<PAGE> 1
As filed with the Securities and Exchange Commission
February 26, 1998
1933 ACT FILE NO. 33-76670
1940 ACT FILE NO. 811-8428 [CONFORMED COPY]
================================================================================
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------------
FORM N-1A
(CHECK APPROPRIATE BOX OR BOXES)
REGISTRATION STATEMENT
UNDER
[ ] THE SECURITIES ACT OF 1933
[ ] PRE-EFFECTIVE AMENDMENT NO.
[X] POST-EFFECTIVE AMENDMENT NO. 8
AND/OR
REGISTRATION STATEMENT
UNDER
[ ] THE INVESTMENT COMPANY ACT OF 1940
[X] AMENDMENT NO. 9
-------------------------------
THE HAVEN CAPITAL MANAGEMENT TRUST
(Exact Name of Registrant as Specified in Charter)
C/O HAVEN CAPITAL MANAGEMENT, INC.
655 THIRD AVENUE
NEW YORK, NEW YORK 10017
(Address of Principal Executive Offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 953-2322
-------------------------------
COLIN C. FERENBACH
C/O HAVEN CAPITAL MANAGEMENT, INC.
655 THIRD AVENUE
NEW YORK, NEW YORK 10017
(Name and Address of Agent for Service)
-------------------------------
WITH COPIES TO:
MARCIA L. MACHARG, ESQ.
DEBEVOISE & PLIMPTON
555 13TH STREET, N.W.
WASHINGTON, D.C. 20004
It is proposed that this filing will become effective (check appropriate box):
[X] immediately upon filing pursuant to paragraph (b), or
[ ] on (date) pursuant to paragraph (b), or
[ ] 60 days after filing pursuant to paragraph (a)(1) of Rule 485, or
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2), or
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment
================================================================================
<PAGE> 2
THE HAVEN CAPITAL MANAGEMENT TRUST
FORM N-1A
CROSS REFERENCE SHEET
---------------------
<TABLE>
<CAPTION>
Part A
Item No. Prospectus Caption
- -------- ------------------
<S> <C> <C>
1. Cover Page . . . . . . . . . . . . . . . . . . . . . Cover Page
2. Synopsis . . . . . . . . . . . . . . . . . . . . . . Shareholder and Fund Expenses
3. Condensed Financial Information . . . . . . . . . . Financial Highlights
4. General Description of Registrant. . . . . . . . . . Cover Page; The Fund and Its Invest-
ment Objectives; General Information
5. Management of the Fund . . . . . . . . . . . . . . . Management of the Fund
5A. Management's Discussion of Fund Performance . . . . Not applicable
6. Capital Stock and Other Securities . . . . . . . . General Information; Dividends and
Distributions; Taxes; Management of
the Fund
7. Purchase of Securities Being Offered . . . . . . . How to Purchase Shares; Manage-
ment of the Fund; Net Asset Value
8. Redemption or Repurchase . . . . . . . . . . . . . How to Redeem Shares
9. Pending Legal Proceedings . . . . . . . . . . . . . Not applicable
</TABLE>
2
<PAGE> 3
<TABLE>
<CAPTION>
Part B Statement of Additional/Information Caption
Item No. -------------------------------------------
- --------
<S> <C> <C>
10. Cover . . . . . . . . . . . . . . . . . . . . . . Cover Page
11. Table of Contents . . . . . . . . . . . . . . . . Contents
12. General Information and History . . . . . . . . . See Prospectus--"The Exchange"
13. Investment Objectives and Policies . . . . . . . Investment Objective; Investment Restrictions;
Investment Policies
14. Management of the Fund . . . . . . . . . . . . . See Prospectus--"Management of the Fund";
Management of the Fund
15. Control Persons and Principal Holders of . . . . .Control Persons and Principal Holders of
Securities Securities
16. Investment Advisory and Other . . . . . . . . . . Management of the Fund; Auditors and
Services Counsel; See Prospectus--"Management of the
Fund"
17. Brokerage Allocation and Other . . . . . . . . . . Portfolio Transactions
Practices
18. Capital Stock and Other Securities . . . . . . Shares of Beneficial Interests and Other
Securities; See Prospectus--"Dividends and
Distributions," "How to Redeem Shares,"
"Taxes" and "General Information."
19. Purchase, Redemption and Pricing of . . . . . . .Additional Purchase and Redemption Infor-
Securities Being Offered mation; See Prospectus--"How to Purchase
Shares", "How to Redeem Shares" and "Net
Asset Value"
20. Tax Status . . . . . . . . . . . . . . . . . . . See Prospectus--"Dividends" and "Taxes";
Additional Information Concerning Taxes
21. Underwriters . . . . . . . . . . . . . . . . . . See Prospectus--"Management of the Fund"
and "The Fund and Its Investment Objective"
22. Calculations of Performance Data . . . . . . . . Determination of Performance Data
</TABLE>
3
<PAGE> 4
<TABLE>
<S> <C> <C>
23. Financial Statements . . . . . . . . . . . . . . Report of Independent Certified Public Accountants; Statement of
Assets and Liabilities
</TABLE>
PROSPECTUS
February 26, 1998
THE HAVEN FUND
The Haven Fund (the "Fund"), constituting the initial series of The
Haven Capital Management Trust (the "Trust"), is an open-end, diversified
management investment company. The investment objective of the Fund is long-term
growth of capital. The Fund seeks to achieve this objective by investing in a
portfolio consisting primarily of equity securities of domestic companies. Under
normal market conditions, the Fund will invest at least 65% of its total assets
in such securities. The Fund may invest the balance of its assets in equity
securities of foreign issuers or companies whose securities are traded
principally outside the United States and, to the extent consistent with its
investment objective, in investment grade fixed income securities of domestic
and foreign issuers. The production of current income is incidental to this
investment objective.
Prior to the continuous offering of shares of the Fund, the Fund
acquired portfolio securities of a limited partnership for which the Fund's
adviser, Haven Capital Management, Inc. ("Haven"), served as investment adviser
and for which three of the Fund's trustees served as general partners. For a
description of the potential tax consequences to investors, see "The Exchange."
This Prospectus briefly sets forth certain information about the Fund
that investors should know before investing. Investors are advised to read this
Prospectus and retain it for future reference. Additional information about the
Fund, contained in a Statement of Additional Information, has been filed with
the Securities and Exchange Commission (the "SEC") and is available to investors
without charge by calling Sunstone Distribution Services, LLC ("Sunstone"), the
Fund's distributor, at 1-800-844-4836. The Statement of Additional Information
bears the same date as this Prospectus and is incorporated by reference in its
entirety into this Prospectus. The SEC maintains a web site (http://www.sec.gov)
that contains the Statement of Additional Information, material incorporated by
reference, and other information regarding registrants that file electronically
with the SEC.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
HAVEN CAPITAL MANAGEMENT, INC.
Investment Adviser
<PAGE> 5
SUNSTONE DISTRIBUTION SERVICES, LLC
Distributor
2
<PAGE> 6
SHAREHOLDER AND FUND EXPENSES
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)............................................ None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price)............................................ None
Deferred Sales Load
(as a percentage of original purchase price or redemption proceeds, as applicable) None
Redemption Fees
(as a percentage of redemption proceeds, if applicable)..................... None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
- -------------------------------------------------------------------------------------------------------------
Advisory Fees.................................................................... 0.60%
12b-1 Fees and Expenses(1)....................................................... 0.22%
Other Expenses (audit, legal, administration, shareholder
services, transfer agency, insurance, custodian, miscellaneous
and amortized organizational expenses)(2) 0.51%
Total Fund Operating Expenses.................................................... 1.33%
</TABLE>
(1) Long-term shareholders may pay more than the economic equivalent of the
maximum front end sales charge permitted by the rules of the National
Association of Securities Dealers, Inc. for investment companies without
12b-1 fees.
(2) Certain of the fees reflected in the table may be paid on a fixed-fee
basis, which, depending on the net assets of the Fund, would cause these
estimated percentages to vary. For additional information about these fees
and expenses, refer to the discussion under the caption "Management of the
Fund."
<TABLE>
<CAPTION>
EXAMPLE
- --------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
A shareholder would pay
the following expenses on
a $1,000 investment,
assuming: (1) 5% annual
return and (2) redemption
at the end of each period: $14 $42 $73 $160
</TABLE>
This example assumes that all dividends and other distributions are reinvested
at net asset value and that the percentage amounts listed under Annual Fund
Operating Expenses will remain the same in the years shown. The above tables and
assumptions in the example of a 5% annual return are required by regulations of
the SEC applicable to open-end investment companies. THE ASSUMED 5% ANNUAL
RETURN AND ANNUAL EXPENSES SHOULD NOT BE CONSIDERED AS REPRESENTATIVE OF ACTUAL
OR EXPECTED FUND PERFORMANCE OR EXPENSES, BOTH OF WHICH MAY VARY. The tables are
provided to assist an investor in understanding the various costs and expenses
that an investor in the Fund will bear directly and indirectly. For a
description of Advisory Fees, 12b-1 Fees and Other Expenses, see "Management of
the Fund."
3
<PAGE> 7
FINANCIAL HIGHLIGHTS
The following information for the fiscal years ended October 31, 1997,
October 31, 1996 and October 31, 1995 and the fiscal period ended October 31,
1994 has been derived from financial statements audited by Coopers & Lybrand
L.L.P., independent accountants. Their opinion and the Fund's financial
statements and notes thereto are incorporated by reference in the Statement of
Additional Information. The Statement of Additional Information and the Fund's
most recent Annual Report (which contains a discussion of the Fund's
performance) are available at no charge upon request by calling 1-800-844-4836.
FINANCIAL HIGHLIGHTS
For a Share Outstanding Throughout each Period
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Period Ended
October 31, October 31, October 31, October 31,
1997 1996 1995 1994 (1)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD $ 14.04 $ 11.67 $ 10.65 $ 10.00
- --------------------------------------------------------------------------------------------------------
Increase from Investment Operations:
Net Investment Income 0.06 0.08 0.12 0.04
Net Realized and Unrealized Gains
on Investments and Foreign
Currency Transactions 3.13 3.07 1.28 0.61
- --------------------------------------------------------------------------------------------------------
Total from Investment Operations 3.19 3.15 1.40 0.65
========================================================================================================
Less Distributions:
Dividends Paid to Shareholders:
From Net Investment Income (0.05) (0.08) (0.15) ----
From Net Realized Gains (1.35) (0.70) (0.23) ----
- --------------------------------------------------------------------------------------------------------
Total Distributions to Shareholders (1.40) (0.78) (0.38) ----
========================================================================================================
NET ASSET VALUE AT END OF PERIOD $ 15.83 $ 14.04 $ 11.67 $ 10.65
- --------------------------------------------------------------------------------------------------------
Total Return 24.90% 28.25% 13.65% 6.50%
Supplemental Data and Ratios:
Net Assets at End of Period (in 000s) $ 84,769 $67,096 $55,579 $ 45,332
Ratios of Expenses to Average Net Assets 1.33% 1.59% 1.53%(2) 1.20%(2)(3)
Ratio of Net Investment Income to
Average Net Assets 0.78% 0.58% 1.14%(2) 1.10%(2)(3)
Portfolio Turnover Rate 57% 67% 77% 27%
</TABLE>
4
<PAGE> 8
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Period Ended
October 31, October 31, October 31, October 31,
1997 1996 1995 1994 (1)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Average Commission Rate Paid(4) $0.0633 $0.0591 ---- ----
</TABLE>
(1) The Haven Fund commenced operations on June 23, 1994.
(2) Without fee waivers, the ratio of operating expenses to average daily net
assets would have been 1.59% and 1.43% (annualized) for the periods ended
October 31, 1995 and 1994, respectively, and the ratio of net investment
income to average daily net assets would have been 1.08% and 0.87%
(annualized) for the periods ended October 31, 1995 and 1994, respectively.
(3) Annualized.
(4) Computed by dividing the total amount of brokerage commissions paid by the
total shares of investment securities purchased and sold during the period
for which commissions were charged, as required by the SEC.
5
<PAGE> 9
THE FUND AND ITS INVESTMENT OBJECTIVE
The Fund is a diversified mutual fund with an investment objective of
long-term growth of capital. It seeks to achieve this objective by investing in
a portfolio consisting primarily of equity securities of domestic companies.
Under normal market conditions and as a matter of fundamental policy, the Fund
will invest at least 65% of its total assets in such securities. The Fund may
invest the balance of its assets in equity securities of foreign issuers or
companies whose securities are traded principally outside the United States and,
to the extent consistent with its investment objective, in investment grade
fixed income securities of domestic or foreign issuers. Any investment involves
risk and, therefore, there can be no assurance that the Fund will achieve its
investment objective.
Shares of beneficial interest of the Fund ("Shares") are sold in a
continuous offering at net asset value without a sales charge. The minimum
initial investment is $2,500 and the minimum subsequent investment is $100.
These minimum investment requirements may be waived at the discretion of Haven
Capital Management, Inc. ("Haven"), the Fund's investment adviser. Prior to the
continuous offering, Shares were exchanged for portfolio securities of a limited
partnership for which Haven served as investment manager. See "The Exchange."
SELECTION OF INVESTMENTS
The Fund invests in domestic and foreign companies that, in Haven's
view, have superior financial and operating characteristics with long-term
prospects for growth and are not sufficiently valued by the securities markets.
Haven evaluates investments for the Fund using fundamental analysis and through
its own field research. In addition, Haven draws upon the research and
information provided by investment brokers and other independent providers of
economic and research data.
Domestic investments are in both large, well-known companies and in
smaller, less well-known companies. Foreign investments are generally in
better-known companies with a relatively large market capitalization, although
the Fund will not be limited to investments in companies with a minimum market
capitalization. The Fund generally invests in domestic securities listed on a
securities exchange or traded through The Nasdaq Stock Market ("Nasdaq") and in
those foreign securities traded on principal trading markets for such
securities. The Fund may invest in the following types of securities:
6
<PAGE> 10
EQUITY SECURITIES. The Fund invests in equity securities, including
common stock; preferred stock; convertible securities (including
convertible preferred stock, bonds, notes and debentures convertible into
common or preferred stock); warrants; equity interests in trusts,
partnerships, joint ventures and real estate investment trusts ("REITs");
and American, Global and other types of Depositary Receipts.
INVESTMENT GRADE FIXED INCOME SECURITIES. The Fund has the ability to
invest in investment grade fixed income securities issued by domestic or
foreign corporations or other entities or by the U.S. or foreign
governments or their agencies, instrumentalities or sponsored enterprises,
if such securities, in the opinion of Haven, offer the potential to further
the Fund's investment objective. Because the market value of fixed income
securities can be expected to vary inversely to changes in prevailing
interest rates, investing in fixed income securities may provide an
opportunity for long-term growth of capital when interest rates are
expected to decline.
In order to reduce the risk of nonpayment of principal or interest on
fixed income securities, the Fund invests in such securities, whether
domestic or foreign, only if they are rated, at the time of investment, "A"
or better by Standard & Poor's Corporation ("S&P") or Moody's Investors
Services, Inc. ("Moody's") or, if unrated, are determined to be of
comparable quality by Haven. The Fund is not required to dispose of
securities whose ratings are downgraded except when considered appropriate
by Haven. See the Appendix attached to the Statement of Additional
Information for a description of the corporate bond ratings assigned by S&P
and Moody's.
Fixed income securities in which the Fund may invest include
obligations issued by the U.S. government or by any agency, instrumentality
or sponsored enterprise thereof supported by the full faith and credit of
the U.S. government, the authority of the issuer to borrow from the U.S.
Treasury, or the discretionary authority of the U.S. government to purchase
the obligations of the agency, instrumentality or enterprise; obligations
fully guaranteed as to principal and interest by an agency, instrumentality
or sponsored enterprise of the U.S. government; and obligations of U.S.
government agencies, instrumentalities or sponsored enterprises which are
not guaranteed. The Fund may also invest in zero coupon U.S. Treasury
securities and in zero coupon securities
7
<PAGE> 11
issued by financial institutions, which represent a proportionate interest
in underlying U.S. Treasury securities. The Fund will invest only in such
U.S. Treasury securities that are part of the STRIPS program.
TEMPORARY INVESTMENTS. When Haven believes that a defensive posture is
warranted, the Fund may invest temporarily without limit in cash or fixed
income securities which are temporary investments. Temporary investments
are short-term high-quality debt securities (rated AA or above by S&P, Aa
or above by Moody's or with an equivalent rating by other nationally
recognized securities rating organizations) denominated in U.S. dollars or
other freely convertible currency, including short-term obligations issued
or guaranteed by the U.S. government, its agencies or instrumentalities,
U.S. finance company obligations, corporate commercial paper, obligations
of banks and repurchase agreements (not to exceed 5% of the Fund's net
assets) with respect to the securities in which the Fund may invest.
Portfolio securities are generally sold when Haven believes their
market price fully reflects or exceeds their fundamental valuation or due to an
increase in risk beyond levels deemed acceptable by Haven. Under normal market
conditions, consistent with the Fund's fundamental policy of investing at least
65% of its total assets in equity securities of domestic companies, the Fund's
cash position is a reflection of Haven's assessment of the availability of
attractive investment alternatives.
INVESTMENT PRACTICES AND RELATED RISK FACTORS
In attempting to achieve its investment objective, the Fund may make
investments and may engage in certain investment techniques that entail special
risks and considerations.
FOREIGN SECURITIES. There are certain risks involved in investing in
securities of companies and governments of foreign nations which are in addition
to the usual risks inherent in U.S. investments. These risks include those
resulting from fluctuations in currency exchange rates, revaluation of
currencies, future adverse political and economic developments and the possible
imposition of currency exchange blockages or other foreign governmental laws or
restrictions, reduced availability of public information concerning issuers and
the lack of uniform accounting, auditing and financial reporting standards or of
other regulatory practices and requirements comparable to those applicable to
domestic companies. The yield of the Fund may be
8
<PAGE> 12
adversely affected by fluctuations in value of one or more currencies relative
to the U.S. dollar. Moreover, securities of many foreign companies may be less
liquid and their prices more volatile than those of securities of comparable
U.S. companies. In addition, with respect to certain foreign countries, there is
the possibility of expropriation, nationalization, confiscatory taxation and
limitations on the use or removal of funds of other assets of the Fund,
including the withholding of dividends. Foreign securities may be subject to
foreign government taxes that would reduce the net yield on such securities. To
the extent the Fund invests in securities denominated or quoted in currencies
other than the U.S. dollar, changes in foreign currency exchange rates will
affect the value of portfolio securities and the appreciation or depreciation of
investments, as well as the Fund's net asset value, which also will be affected
irrespective of the performance of the underlying investments. Investment in
foreign securities may also result in higher expenses due to the cost of
converting foreign currency into U.S. dollars; the payment of fixed brokerage
commissions on foreign exchanges, which generally are higher than commissions on
U.S. exchanges; and the expense of maintaining securities with foreign
custodians. The Fund's investments in foreign government securities are subject
to special risks which may include the inability or unwillingness of a foreign
government to repay principal and interest, currency fluctuations and other
similar risks of investing in foreign securities generally.
CONVERTIBLE SECURITIES. Convertible securities may include corporate
notes or preferred stock but are ordinarily long-term debt obligations of the
issuer convertible at a stated exchange rate into common stock of the issuer.
The Fund will invest in convertible securities of corporations that meet the
criteria for investment by the Fund in equity securities of domestic and foreign
issuers in which the Fund can invest. In evaluating a convertible security,
Haven gives primary emphasis to the attractiveness of the underlying common
stock. The Fund may not purchase or hold more than 5% of its net assets in
convertible securities rated below BBB by S&P, Baa by Moody's or, if unrated,
determined by Haven to be of comparable quality. Securities rated BBB, Baa or
below have speculative characteristics. The market value of convertible
securities tends to decline as interest rates increase and, conversely, to
increase as interest rates decline. Convertible securities generally offer lower
interest or dividend yields than nonconvertible securities of similar quality.
When, however, the market price of the common stock underlying the convertible
security exceeds the conversion price, the price of the convertible security
reflects the value of the underlying common stock. As the market price of the
underlying common stock declines, the convertible security tends to trade
increasingly on a yield basis, and thus may not decline in price to the same
extent as the underlying common stock. Convertible securities rank senior to
common stocks in an issuer's capital structure and are consequently of higher
quality and entail less risk of decline in market value than
9
<PAGE> 13
the issuer's common stock. The extent to which such risk is less depends in
large measure, however, upon the degree to which the convertible security sells
above its value as a fixed income security.
OTHER INVESTMENT COMPANIES. The Fund may invest up to 10% of its total
assets in the securities of closed-end investment companies. The Fund will bear
its proportionate share of any fees and expenses paid by investment companies in
which it invests in addition to the advisory and other fees paid by the Fund.
LENDING OF PORTFOLIO SECURITIES. The Fund may seek income by lending
portfolio securities. Under present regulatory policies, such loans may be made
to institutions, such as certain domestic broker-dealers, and are required to be
secured continuously by collateral in cash, cash equivalents, or U.S. government
securities maintained on a current basis at an amount at least equal to the
market value of the securities loaned. If Haven determines to make securities
loans, the value of the securities loaned may not exceed 33 1/3% of the value of
the total assets of the Fund. The Fund may experience a loss or delay in the
recovery of its securities if the institution with which it has engaged in a
portfolio loan transaction breaches its agreement with the Fund.
FOREIGN CURRENCY HEDGING. In connection with specific portfolio
transactions or with respect to portfolio positions, the Fund may use forward
foreign currency exchange contracts to hedge against movements in the value of
foreign currencies relative to the U.S. dollar. If the Fund enters into a
forward foreign currency exchange contract to buy foreign currency, the Fund
will be required to place cash or high-grade liquid debt securities in a
segregated account with the Fund's custodian in an amount equal to the value of
the assets committed to the consummation of the forward contract. The Fund will
enter into such forward contracts with counterparties that have received (or the
guarantors of their obligations have received) a credit rating of Prime-1 or A-1
by Moody's or S&P, respectively, or that have an equivalent rating from a
nationally recognized securities rating organization or are determined to be of
equivalent credit quality by Haven. Haven will monitor the credit status of the
counterparties or guarantors, as appropriate, on an on-going basis. Forward
foreign currency contracts are privately negotiated transactions, and there is
no established trading market for such investments. Accordingly, there may be no
market for such investments and they may be illiquid. Under normal market
conditions, however, offsetting contracts may be readily entered into in the
major internationally traded currencies.
10
<PAGE> 14
CERTAIN OTHER INVESTMENT TECHNIQUES. Although the Fund has no current
intention of doing so during the coming year, it is authorized to engage in the
following investment strategies: (1) purchasing securities on a when-issued
basis and purchasing or selling securities for delayed delivery; (2) purchasing
put and call options on securities and stock indexes and writing call options on
securities and put and call options on stock indexes; and (3) purchasing and
writing interest rate and stock index futures contracts. The Fund will enter
into such transactions for hedging purposes, in accordance with the rules and
regulations of the Commodity Futures Trading Commission and the SEC. The Fund
may also engage in repurchase agreement transactions with respect to any
securities in which it invests. Detailed information concerning these strategies
and their related risks is contained in the Statement of Additional Information.
PORTFOLIO TURNOVER
Haven purchases securities with the intent of holding them for
investment but may purchase and sell portfolio securities whenever Haven
believes it to be in the best interests of the Fund. The Fund will not consider
portfolio turnover rate a limiting factor in making investment decisions
consistent with its investment objective and policies. For the fiscal year ended
October 31, 1997, the portfolio turnover rate was 57%.
ADDITIONAL INVESTMENT INFORMATION
The Fund's investment objective and its intention to invest, under
normal market conditions, at least 65% of its total assets in equity securities
of domestic companies are fundamental policies of the Fund and cannot be changed
without the approval of a "majority of the Fund's outstanding voting
securities." As used in this Prospectus, a "majority of the Fund's outstanding
voting securities" means the lesser of (1) 67% of the Shares represented at a
meeting at which more than 50% of the outstanding Shares are represented, and
(2) more than 50% of the outstanding Shares.
As described in the Statement of Additional Information, the Fund has
adopted certain investment restrictions as fundamental policies. Among other
restrictions, as a diversified fund, the Fund may not, with respect to 75% of
its total assets, purchase the securities of any one issuer (except U.S.
government securities) if more than 5% of the value of the Fund's assets would
be invested in such issuer. In addi-
11
<PAGE> 15
tion, the Fund may not invest 25% or more of its total assets in securities of
issuers in any one industry, except that this limitation does not apply to
investments in or obligations of the U.S. government or any of its agencies or
instrumentalities. The Fund may borrow money from banks only for temporary or
emergency purposes in an aggregate amount not exceeding 10% of the value of its
total assets (including the amount borrowed). The Fund has also adopted
nonfundamental policies that may be changed without a vote of shareholders. For
example, the Fund may invest up to 5% of its net assets in companies which,
including predecessors, have operated less than three years, and it may invest
up to 5% of its net assets in warrants. For a more complete description of the
investment restrictions to which the Fund is subject, see the Statement of
Additional Information.
MANAGEMENT OF THE FUND
TRUSTEES AND OFFICERS. The Trustees of the Trust (the "Trustees")
decide matters of general policy of the Fund and review the actions of Haven,
the Fund's investment adviser, and the Fund's service providers, i.e., its
administrator, distributor, transfer agent and custodian. The Fund's daily
business operations are conducted and supervised by the officers of the Trust
(the "Officers"). The Trustees and Officers are:
COLIN C. FERENBACH* President and Trustee of the Trust. Managing
Director since 1982 and Chairman since 1997
of Haven. Formerly, General Partner of HCM
Partners, L.P., 1984-94; Principal, McCowan
Associates, Inc., 1980-83; Principal,
Kleinwort Benson McCowan Inc., 1977-80; Vice
President, Goldman, Sachs & Co., 1957-76.
D. EUAN BAIRD Trustee of the Trust. Chairman, President and
Chief Executive Officer of Schlumberger Ltd.
(oil field services, measurements and
systems).
12
<PAGE> 16
STEPHEN ELY* Treasurer, Secretary and Trustee of the
Trust. Managing Director since 1982 and
Treasurer since 1997 of Haven. Formerly,
General Partner of HCM Partners, L.P.,
1984-94; Principal, McCowan Associates, Inc.,
1980-83; Principal, Kleinwort Benson McCowan
Inc., 1978-80; Corporate Vice President,
Lehman Bros. Kuhn Loeb, Inc., 1977-78; First
Vice President and Partner, Kuhn, Loeb & Co.,
1972-77.
WILLIAM F. INDOE Trustee of the Trust. Partner, Sullivan &
Cromwell (attorneys-at-law).
ROBERT E. KAUFMANN Trustee of the Trust. Director, Spencer
Stuart & Associates (executive search
consultants). Formerly, Headmaster of
Deerfield Academy, 1980-94; Director of
various mutual funds, 1985-92.
JOHN F. MCNIFF Trustee of the Trust. Director, Vice
President-Finance and Chief Financial Officer
of Dover Corporation (diversified
manufacturing company); Director of The Allen
Group (manufacturer of telecommunication
products).
DENIS M. TURKO* Vice President and Trustee of the Trust.
Managing Director since 1982 and Secretary
since 1997 of Haven. Formerly, General
Partner of HCM Partners, L.P., 1984-94;
Principal, McCowan Associates, Inc., 1980-83;
Principal, Kleinwort Benson McCowan Inc.,
1977-80; Vice President, Goldman, Sachs &
Co., 1970-76.
* Each of these Trustees and Officers is an "interested person" as defined by
the Investment Company Act of 1940.
INVESTMENT ADVISER. Haven Capital Management, Inc., 655 Third Avenue,
New York, New York 10017, acts as the Fund's investment adviser. Haven is an
independent investment organization that provides investment services to a
variety of institutional and individual investors and, from 1984 to 1994,
managed the investments of HCM Partners, L.P., the predecessor of the Fund. See
"The Exchange." As of
13
<PAGE> 17
December 31, 1997, Haven managed approximately $855 million in assets for its
clients but, prior to the Fund's commencement, had not previously advised a
registered management investment company. The firm, incorporated in Delaware in
1982, is managed jointly and controlled by its managing directors, Messrs.
Stephen Ely, Colin C. Ferenbach and Denis M. Turko. The managing directors have
worked together for more than 16 years, and each has more than 31 years of
experience managing investment portfolios.
Under an Investment Advisory Agreement with the Fund and subject to the
control of the Trustees, Haven manages the investment and reinvestment of the
assets of the Fund in accordance with the Fund's investment objective and stated
investment policies. Mr. Ferenbach serves as the Fund's portfolio manager. He
has been employed by a registered investment adviser as a portfolio manager
since 1973 and has managed the portfolio of HCM Partners, L.P. since its
inception in 1984. Mr. Turko, who has been employed as a portfolio manager since
1972, serves as the Fund's deputy portfolio manager. The Fund pays Haven a
monthly fee as compensation for its services, payable in arrears, calculated at
an annual rate of 0.60% of the Fund's average daily net assets.
ADMINISTRATOR AND TRANSFER AGENT. PFPC Inc. ("PFPC"), 103 Bellevue
Parkway, Wilmington, Delaware 19809, an indirect, wholly owned subsidiary of PNC
Bank Corp. (a multi-bank holding company with its principal offices in
Pittsburgh, Pennsylvania), serves as the administrator and transfer agent of the
Fund. As administrator, PFPC provides administrative and accounting services to
the Fund, including determination of the Fund's net asset value and assistance
in the Fund's administrative operations.
The Fund pays PFPC a fee as compensation for its administrative and
accounting services, payable monthly in arrears, at the annual rate of 0.10% of
the Fund's average daily net assets, with a minimum monthly fee of $8,333
(exclusive of out-of-pocket expenses).
DISTRIBUTOR AND PLAN OF DISTRIBUTION. Sunstone Distribution Services,
LLC ("Sunstone"), 207 East Buffalo Street, Suite 400, Milwaukee, Wisconsin
53202, serves as the distributor of Shares of the Fund. Shares also may be sold
by authorized dealers who have entered into dealer agreements with Sunstone or
the Fund.
The Trust, on behalf of the Fund, has adopted a Plan of Distribution
(the "Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940, as
amended (the "1940 Act"). Under the Plan, the Fund may spend no more each year
14
<PAGE> 18
than 0.25% of its average daily net assets to finance activity primarily
intended to result in the sale of Shares. Such sales activities include
compensation paid to Sunstone, the printing and mailing of prospectuses to
persons other than then-current shareholders, the printing and mailing of sales
literature and compensation to authorized dealers. The Plan may not be amended
to increase materially the amount to be spent on such sales activity without
shareholder approval.
Pursuant to a Distribution Agreement, the Fund will (1) pay Sunstone a
fee, payable monthly in arrears, at the annual rate of 0.10% per annum of the
Fund's average daily net assets, with a minimum monthly fee of $7,083 and (2)
reimburse Sunstone (or pay directly) for (a) Sunstone's out-of-pocket expenses
in connection with its distribution and marketing services and (b) payments to
authorized dealers; provided, however, that if, during any annual period, such
compensation and reimbursement payments for services exceed 0.25% of the Fund's
average daily net assets, Sunstone will rebate such excess to the Fund.
CUSTODIAN. PNC Bank, National Association ("PNC Bank") serves as
custodian of the Fund's United States assets. PNC Bank is an indirect, wholly
owned subsidiary of PNC Bank Corp. and its principal business address is Broad
and Chestnut Streets, Philadelphia, Pennsylvania 19101. In accordance with the
provisions of the 1940 Act, PNC Bank may employ subcustodians outside the United
States approved by the Trustees or the Trustees may delegate to Haven, officers
of the Trust or custodians the duties to select foreign custodians and monitor
foreign custody arrangements.
OTHER EXPENSES OF THE FUND. In addition to advisory, administration and
distribution fees, the Fund's operating expenses generally consist of fees for
professional and brokerage services, costs of regulatory compliance, including
the payment of applicable federal and state filing fees, and costs associated
with maintaining corporate existence, safekeeping of its assets, recording
ownership of its Shares and shareholder relations. The Investment Advisory
Agreement between the Fund and Haven provides that Haven will reduce its
management fee and, if necessary, reimburse the Fund to the extent certain
expenses described in the Statement of Additional Information would otherwise
exceed the expense limitations applicable to the Fund imposed by applicable
state securities laws or regulations thereunder.
15
<PAGE> 19
THE EXCHANGE
On June 23, 1994, pursuant to an Agreement and Plan of Exchange among
the Fund, Haven and HCM Partners, L.P., a limited partnership for which Haven
acted as investment adviser and three of the Fund's Trustees acted as general
partners (the "Partnership"), the Fund acquired portfolio securities, cash and
cash equivalents having a market value on June 22, 1994 of approximately
$41,141,033 owned by the Partnership in exchange for Shares of the Fund. The
Fund commenced a continuous offering of its Shares after the exchange.
The exchange benefits investors who acquire Shares in the continuous
offering after the exchange to the extent that the pro rata portion of expenses
borne by each investor decreases and certain economies are realized by spreading
costs over a larger asset base. The exchange generally has, however, adverse tax
consequences to those same investors insofar as the Fund holds securities
acquired from the Partnership that have appreciated in value from the date they
were acquired by the Partnership; the same potential for adverse tax
consequences is present, however, whenever an investor purchases shares in a
regulated investment company owning appreciated assets. When the Fund sells
appreciated securities, the amount of any gain will be taxable to shareholders,
including new shareholders as well as former partners of the Partnership. The
effect of this will be to tax new shareholders on a distribution that
economically represents a return of the purchase price of their Shares rather
than on an increase in the value of their investment, to the extent the gain
represented appreciation in the securities at the time the Shares of the Fund
were purchased. See "Taxes" with respect to the foregoing and regarding a
private letter ruling obtained from the Internal Revenue Service with respect to
the exchange.
The following is a summary of key financial information relating to the
Partnership and the Fund. The information for the periods June 23, 1994 to
October 31, 1997 for the Fund and January 1, 1994 to June 22, 1994 for the
Partnership and the four years in the period ended December 31, 1993 for the
Partnership has been audited by Coopers & Lybrand L.L.P., independent auditors.
The financial statements as of October 31, 1997 of the Fund appear in the Fund's
Annual Report to Shareholders for the year ended October 31, 1997, which can be
obtained by shareholders at no charge by calling 1-800-844-4836 or by writing to
the Fund at the address on the back cover of this Prospectus.
Although the Partnership was managed by the same individuals who manage
the Fund and the Fund is managed in a manner that is in all material respects
equivalent to the management of the Partnership, the information should not be
viewed
16
<PAGE> 20
as an indication of future performance by the Fund. The information includes
information regarding the Partnership's operations for periods before the Fund's
registration statement became effective. The Partnership was not registered
under the 1940 Act and therefore was not subject to certain investment
restrictions that are imposed by that Act. If the Partnership had been
registered under the 1940 Act, its performance might have been adversely
affected. In addition, the expenses borne by the Fund are higher than those
borne by the Partnership. For a description of the expenses borne by the Fund,
see "Shareholder and Fund Expenses."
17
<PAGE> 21
FOR A FUND SHARE OUTSTANDING THROUGHOUT THE PERIOD(6)
<TABLE>
<CAPTION>
Nov. 1, Nov. 1, Nov. 1, June 23, Jan. 1,
1996 to 1995 to 1994 to 1994 to 1994 to
Oct. 31, Oct. 31, Oct. 31, Oct. 31, June 22, -----------
1997(1) 1996(1) 1995(1) 1994(1) 1994 (2) 1993(2)
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT
BEGINNING OF PERIOD $ 14.04 $ 11.67 $ 10.65 $ 10.00 $ 10.29 $ 9.13
---------- ------------ ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT
OPERATIONS:
NET INVESTMENT INCOME 0.06 0.08 0.12 0.04 0.06 0.16
NET REALIZED AND UNREALIZED
GAINS AND (LOSSES) ON
INVESTMENTS 3.13 3.07 1.28 0.61 (0.35) 1.00
---------- ------------ ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT
OPERATIONS 3.19 3.15 1.40 0.65 (0.29) 1.16
---------- ------------ ---------- ---------- ---------- ----------
LESS DISTRIBUTIONS (1.40) (0.78) (0.38) 0.00 0.00 0.00
---------- ------------ ---------- ---------- ---------- ----------
NET ASSET VALUE,
END OF PERIOD $ 15.83 $ 14.04 $ 11.67 $ 10.65 $ 10.00 $ 10.29
========== ============ ========== ========== ========== ==========
TOTAL RETURN 24.9% 28.3% 13.7% 6.5% (2.8)% 12.7%
SUPPLEMENTAL DATA AND
RATIOS
NET ASSETS AT END OF PERIOD
(IN 000'S) $ 84,769 $ 67,096 $ 55,579 $ 45,332 $ 41,141 $ 44,104
RATIO OF EXPENSES TO
AVERAGE NET ASSETS 1.33% 1.59% 1.53%(4) 1.20%(4)(5) 1.19%(6) 0.67%
RATIO OF NET INVESTMENT
INCOME TO AVERAGE NET ASSETS 0.78% 0.58% 1.14%(4) 1.10%(4)(5) 1.17%(5) 1.64%
PORTFOLIO TURNOVER RATE 57% 67% 77% 27% 78% 72%
AVERAGE COMMISSION RATE
PAID(7) $ 0.0633 $ 0.0591 -- -- -- --
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------------------------
1992(2) 1991(2) 1990(2) 1989(2)(3) 1988(2)(3) 1987(2)(3)
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT
BEGINNING OF PERIOD $ 8.06 $ 6.16 $ 6.31 $ 5.22 $ 4.49 $ 4.61
---------- ---------- ---------- ---------- -------- ----------
INCOME FROM INVESTMENT
OPERATIONS:
NET INVESTMENT INCOME 0.16 0.19 0.21 0.20 0.16 0.13
NET REALIZED AND UNREALIZED
GAINS AND (LOSSES) ON
INVESTMENTS 0.91 1.71 (0.36) 0.89 0.57 (0.25)
---------- ---------- ---------- ---------- -------- ----------
TOTAL FROM INVESTMENT
OPERATIONS 1.07 1.90 (0.15) 1.09 0.73 (0.12)
---------- ---------- ---------- ---------- -------- ----------
LESS DISTRIBUTIONS 0.00 0.00 0.00 0.00 0.00 0.00
---------- ---------- ---------- ---------- -------- ----------
NET ASSET VALUE,
END OF PERIOD $ 9.13 $ 8.06 $ 6.16 $ 6.31 $ 5.22 $ 4.49
========== ========== ========== ========== ========= ==========
TOTAL RETURN 13.3% 30.8% (2.4)% 20.9% 16.3% (2.6)%
SUPPLEMENTAL DATA AND
RATIOS
NET ASSETS AT END OF PERIOD
(IN 000'S) $ 38,243 $ 34,024 $ 24,282 $ 27,426 $ 22,683 $ 19,317
RATIO OF EXPENSES TO
AVERAGE NET ASSETS 0.71% 0.72% 0.67% 0.75% 0.74% 0.77%
RATIO OF NET INVESTMENT
INCOME TO AVERAGE NET ASSETS 1.90% 2.57% 3.32% 3.37% 3.18% 2.56%
PORTFOLIO TURNOVER RATE 60% 68% 67% 48% 38% 61%
AVERAGE COMMISSION RATE
PAID(7) -- -- -- -- -- --
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, June 27,
--------------------------------- 1984 to Dec. 31,
1986(2)(3) 1985(2)(3) 1984(2)(3)
------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE AT
BEGINNING OF PERIOD $ 4.20 $ 3.07 $ 2.83
---------- ---------- ------------
INCOME FROM INVESTMENT
OPERATIONS:
NET INVESTMENT INCOME 0.12 0.10 0.08
NET REALIZED AND UNREALIZED
GAINS AND (LOSSES) ON
INVESTMENTS 0.29 1.03 0.16
---------- ---------- ------------
TOTAL FROM INVESTMENT
OPERATIONS 0.41 1.13 0.24
---------- ---------- ------------
LESS DISTRIBUTIONS 0.00 0.00 0.00
---------- ---------- ------------
NET ASSET VALUE,
END OF PERIOD $ 4.61 $ 4.20 $ 3.07
---------- ---------- ------------
TOTAL RETURN 9.8% 36.8% 8.5%
========== ========== ============
SUPPLEMENTAL DATA AND
RATIOS
NET ASSETS AT END OF PERIOD
(IN 000'S) $ 16,029 $ 11,076 $ 3,060
RATIO OF EXPENSES TO
AVERAGE NET ASSETS 0.78% 0.92% 1.03%(5)
RATIO OF NET INVESTMENT
INCOME TO AVERAGE NET ASSETS 2.48% 2.64% 4.98%(5)
PORTFOLIO TURNOVER RATE 48% 34% 1%
AVERAGE COMMISSION RATE
PAID(7) -- -- --
</TABLE>
- ----------------
(1) Represents the results of operations of The Haven Fund.
(2) Represents the results of operations of HCM Partners, L.P.
(3) Unaudited.
(4) Without fee waivers, the ratio of operating expenses to average net assets
would have been 1.59 and 1.43% (annualized) for the periods ended October
31, 1995 and 1994, respectively, and the ratio of net investment income to
average net assets would have been 1.08% and 0.87% (annualized) for the
periods ended October 31, 1995 and 1994, respectively.
(5) Annualized
(6) Per share amounts for the results of operations of HCM Partners, L.P. have
been calculated using the average number of interests outstanding during
each period.
(7) Computed by dividing the total amount of brokerage commissions paid by the
total shares of investment securities purchased and sold during the period
for which commissions were charged, as required by the SEC.
<PAGE> 22
(7) Computed by dividing the total amount of brokerage commissions paid by the
total shares of investment securities purchased and sold during the period
for which commissions were charged, as required by the SEC.
<PAGE> 23
INVESTING IN THE FUND
HOW TO PURCHASE SHARES
An investor may initially purchase Shares by completing and forwarding
a Purchase Application available from the Fund's distributor, together with a
check payable to the order of "The Haven Fund," to The Haven Fund, P.O. Box
8903, Wilmington, Delaware 19899-8903 (or, for overnight delivery, to The Haven
Fund, 400 Bellevue Parkway, Suite 108, Wilmington, Delaware 19809-3710). Shares
may not be purchased with a check issued by a third party and endorsed over to
the Fund. Checks for investment must be made payable to The Haven Fund. Checks
may be drawn on either U.S. or foreign banks and must be payable in U.S.
dollars. A shareholder may subsequently purchase Shares by mailing a check
payable to the order of "The Haven Fund," together with written instructions
indicating the shareholder's name and Fund account number, to the Fund at the
same address. Initial investments in the Fund must be at least $2,500 ($2,000
for IRAs and $1,000 when establishing an Automatic Investment Plan at the time
of the initial investment) and subsequent investments must be at least $100.
Haven in its sole discretion may waive minimum investment requirements. The Fund
reserves the right to reject any purchase order.
An existing shareholder may purchase additional Shares by using a
federal funds wire. To do so, the shareholder should first call PFPC at
1-800-850-7163, ask to speak with the wire desk and explain that federal funds
are being wired that day. The shareholder should next direct his or her bank to
wire federal funds to PNC Bank, Philadelphia, Pennsylvania, ABA No. 031000053
for credit to "Purchase Concentration Account No. 855-1033-470," with the wire
indicating the investor's name and Fund account number. If PFPC and PNC receive
the required telephone notification and the federal funds wire with proper
instructions by 4:00 p.m. (Eastern Time) the purchase order for Shares will be
processed that day.
Shares may be purchased on any Business Day. A "Business Day" is any
weekday that the New York Stock Exchange (the "NYSE") is open for business.
Shares are sold at the public offering price (i.e., net asset value for the
Shares) next computed after an order is received by the Fund's transfer agent.
Orders received by the Fund's transfer agent after 4:00 p.m. (Eastern Time) are
priced at the public offering price on the following Business Day.
In the interest of economy and convenience, the Fund does not issue
certificates representing the Shares. Instead, the transfer agent maintains a
record of each shareholder's ownership. Each shareholder receives confirmation
of purchase and
21
<PAGE> 24
redemption orders from the transfer agent. Shares and any dividends and
distributions paid by the Fund are reflected in account statements from the
transfer agent.
INDIVIDUAL RETIREMENT ACCOUNTS. Individuals who receive compensation or
earned income, even if they are active participants in a qualified retirement
plan (or certain similar retirement plans), may establish their own
tax-sheltered Individual Retirement Account ("IRA"). The Fund offers a prototype
IRA plan which may be adopted by individuals. There is currently no charge for
establishing an account, although there is an annual maintenance fee.
Earnings on amounts held in an IRA are not taxed until withdrawal.
However, the amount of deduction, if any, allowed for IRA contributions is
limited for individuals who are active participants in an employer-maintained
retirement plan and whose incomes exceed specific limits.
A description of applicable service fees and certain limitations on
contributions and withdrawals, as well as application forms, are available from
the Fund upon request. Because a retirement program involves commitments
covering future years, it is important that the investment objective of the Fund
be consistent with the participant's retirement objectives. Premature
withdrawals from a retirement plan will result in adverse tax consequences.
In addition to offering traditional IRA plans, the Fund also offers
Roth IRAs. For further information or to obtain an application, please call
1-800-844-4836.
AUTOMATIC INVESTMENT PLAN. The Fund offers an Automatic Investment Plan
that allows an investor to automatically purchase shares on a regular,
convenient basis ($100 minimum per transaction). Under this plan, an investor's
designated bank or other financial institution debits a pre-authorized amount on
the investor's account and applies the amount to the purchase of Fund shares.
The plan may be established with any financial institution that is a member of
the Automated Clearing House.
The plan may be established by completing the appropriate section on
the Purchase Application when opening an account. A $1,000 minimum initial
investment must be met before establishing the plan when opening an account. The
plan may also be established after an account is opened by completing an
Automatic Investment Plan Application which may be obtained by calling
1-800-844-4836. No service fee is currently charged by the Fund for
participation in the plan. A $20 fee will be imposed by the transfer agent if
sufficient funds are not available in the investor's account at the time of the
automatic transaction. If an investor discontinues
22
<PAGE> 25
participation in the plan, the Fund reserves the right to redeem the investor's
account involuntarily, upon sixty days' written notice, if the account's net
asset value is $2,000 or less.
HOW TO REDEEM SHARES
REDEMPTIONS. Shareholders may redeem for cash some or all of their
Shares at any time. To do so, a written request in the form described below must
be sent directly to The Haven Fund, P.O. Box 8903, Wilmington, Delaware
19899-8903 (or, for overnight delivery, to The Haven Fund, 400 Bellevue Parkway,
Suite 108, Wilmington, Delaware 19809-3710). There is no charge for a
redemption.
Except as noted below, a request for redemption must be signed by all
persons in whose names the Shares are registered. Signatures must conform
exactly to the account registration. If the proceeds of the redemption exceed
$25,000, if the proceeds are not to be paid to the record owner at the record
address, or if the shareholder is a corporation, partnership, trust or
fiduciary, signature(s) must be guaranteed by a domestic bank or trust company,
broker, dealer, clearing agency or savings association who are participants in a
medallion program recognized by the Securities Transfer Association. The three
recognized medallion programs are Securities Transfer Agents Medallion (STAMP),
Stock Exchanges Medallion Program (SEMP) and New York Stock Exchange, Inc.
Medallion Signature Program (MSP). Signature guarantees which are not a part of
these programs will not be accepted.
Generally, a properly signed written request with any required
signature guarantee is all that is required for a redemption. In some cases,
however, other documents may be necessary. Additional documentary evidence of
authority is required by PFPC in the event redemption is requested by a
corporation, partnership, trust, fiduciary, executor or administrator.
EXPEDITED REDEMPTIONS. If a shareholder has given authorization for
expedited redemption, Shares can be redeemed by telephone and the proceeds sent
by federal wire transfer to a single previously designated bank account or
mailed by check to the address of record or other designated address. Once
authorization is on file, PFPC will honor requests by any person by telephone at
1-800-850-7163. The minimum amount that may be sent by check is $500, while the
minimum amount that may be wired is $10,000. The Fund reserves the right to
change these minimums or to terminate these redemption privileges.
23
<PAGE> 26
During periods of substantial economic or market change, telephone
redemptions may be difficult to complete. If a shareholder is unable to contact
the transfer agent by telephone, the shareholder may also deliver the redemption
request to the transfer agent by mail at the address stated above.
The Fund is not responsible for the efficiency of the federal wire
system or the shareholder's firm or bank. The Fund does not currently charge for
wire transfers. The shareholder is responsible for any charges imposed by the
shareholder's bank. To change the name of the single designated bank account to
receive wire redemption proceeds, it is necessary to send a written request
(with a guaranteed signature as described under "How to Redeem
Shares-Redemptions") to The Haven Fund at the address stated above.
The Fund reserves the right to refuse a telephone redemption if it
believes it advisable to do so. PFPC will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine, but neither the
Fund nor PFPC will be liable for following instructions communicated by
telephone that PFPC reasonably believes to be genuine.
ACCOUNTS WITH LOW BALANCES. The Fund reserves the right to redeem a
shareholder's account in the Fund at any time the net asset value of the account
in the Fund falls below $1,000 as the result of a redemption. A shareholder will
be notified in writing that the value of the shareholder's account in the Fund
is less than the required amount and will be allowed 30 days to make additional
investments before the redemption is processed.
PAYMENT OF REDEMPTION PROCEEDS. In all cases, the redemption price is
the net asset value per share of the Shares next determined after the request
for redemption is received in proper form. Payment for Shares redeemed is made
by check mailed or by wire transfer transmitted within seven days after
acceptance by PFPC of the request and any other necessary documents in proper
order. Such payment may be postponed or the right of redemption suspended as
provided by the rules of the SEC. If the Shares to be redeemed have been
recently purchased by check, the Fund's transfer agent may delay the payment of
redemption proceeds, which may be a period of up to 15 days after the purchase
date, pending a determination that the check has cleared.
24
<PAGE> 27
NET ASSET VALUE
The net asset value for each Share of the Fund is calculated as of the
close of regular trading hours on the NYSE (currently 4:00 p.m. Eastern Time) on
each Business Day by adding the value of all its securities, cash and other
assets allocable to its Shares, subtracting the liabilities allocable to its
Shares and dividing the result by the total number of Shares outstanding.
Valuation of securities held by the Fund other than foreign securities
is as follows: securities traded on a national securities exchange or through
the Nasdaq National Market are valued at the last reported sale price that day;
securities traded on a national securities exchange or through the Nasdaq
National Market for which there were no sales on that day and securities traded
on other over-the-counter markets for which market quotations are readily
available are valued at the mean of the bid and asked prices; and an option or
futures contract is valued at the last sales price prior to 4:00 p.m. (Eastern
Time), as quoted on the principal exchange or board of trade on which such
option or contract is traded, or in the absence of a sale, the mean between the
last bid and asked prices prior to 4:00 p.m. (Eastern Time); and securities for
which market quotations are not readily available are valued at fair market
value as determined in good faith by or under the direction of the Trustees.
Valuation of securities of foreign issuers is as follows: to the extent
sale prices are available, securities which are traded on a recognized stock
exchange are valued at the latest sale price on that exchange prior to the time
when assets are valued or prior to the close of regular trading hours on the
NYSE. In the event that there are no sales, the mean between the last available
bid and asked prices will be used. If a security is traded on more than one
exchange, the latest sale price on the exchange where the stock is primarily
traded is used. An option or futures contract is valued at the last sales price
prior to 4:00 p.m. (Eastern Time), as quoted on the principal exchange or board
of trade on which such option or contract is traded, or in the absence of a
sale, the mean between the last bid and asked prices prior to 4:00 p.m. (Eastern
Time). In the event that application of these methods of valuation results in a
price for a security which is deemed not to be representative of the market
value of such security, the security will be valued by, under the direction of
or in accordance with, a method specified by the Trustees as reflecting fair
value.
The amortized cost method of valuation will be used with respect to
debt obligations with 60 days or less remaining to maturity unless Haven, under
the supervision of the Trustees, determines such method does not represent fair
value. All other assets and securities held by the Fund (including restricted
securities, if any) are valued
25
<PAGE> 28
at fair value as determined in good faith by the Trustees or by someone under
their direction. Any assets which are denominated in a foreign currency are
translated into U.S. dollars at the prevailing market rates as of the time of
valuation. The Fund may use a pricing service, bank or broker-dealer experienced
in such matters, other than PFPC, to value the Fund's securities.
DIVIDENDS AND DISTRIBUTIONS
The Fund distributes to shareholders semiannually substantially all of
its net investment income and distributes to shareholders annually substantially
all of its net realized capital gains, if any. All distributions are reinvested
at net asset value in the form of additional full and fractional Shares unless a
shareholder elects to receive them in cash. Such election, or any revocation
thereof, must be made in writing to PFPC, and will become effective with respect
to dividends with a record date after the receipt by PFPC of such election or
revocation, as the case may be.
TAXES
The Fund intends to qualify for treatment as a "regulated investment
company" within the meaning of the Internal Revenue Code of 1986, as amended
(the "Code"). By so qualifying, the Fund will not be subject to U.S. federal
income tax on income and gains distributed to shareholders. The Fund intends to
distribute to shareholders each year an amount adequate to avoid the imposition
of a 4% nondeductible excise tax, which is applied to certain amounts not
distributed (and not treated as having been distributed) on a timely basis in
accordance with a calendar year distribution requirement. The Fund may be
subject to foreign withholding taxes which would reduce the yield on its
investments. Tax treaties between certain countries and the United States may
reduce or eliminate such taxes. It is expected that Fund shareholders will not
be able to claim a federal income tax credit or deduction for such foreign
taxes, in which event such taxes will ordinarily be deductible by the Fund. The
Fund believes that it may constitute a personal holding company; as such, it
would be subject to additional taxes with respect to its net investment income
not distributed to shareholders within applicable time periods. The Fund intends
to distribute all of its net investment income within such time periods so as
not to be subject to such taxes.
Dividends paid from net investment income (including distributions of
net realized short-term capital gains) are taxable to shareholders as ordinary
income whether received in cash or reinvested in additional Shares. All
distributions derived
26
<PAGE> 29
from net realized long-term capital gains will be taxable to shareholders as
long-term capital gains, regardless of how long shareholders have held Shares
and regardless of whether received in cash or additional Shares. Pursuant to a
ruling obtained from the Internal Revenue Service, the Fund expects to be
treated as succeeding to the tax bases of HCM Partners, L.P. in the assets
transferred by it to the Fund. As of January 31, 1998, based on the unaudited
financial statements of the Fund as of such date, the net assets of the Fund
were approximately $78,975,237 and the net unrealized appreciation of the assets
of the Fund was approximately $22,766,551. If such appreciation were realized
and distributed to the Fund's shareholders, the distribution would be taxable to
them.
Dividends declared in October, November or December of any year to
shareholders of record as of a date in such a month will be treated for federal
income tax purposes as having been received by shareholders in that year if they
are paid before February 1 of the following year.
Statements as to the tax status of each shareholder's dividends and
distributions are mailed annually. Shareholders should consult their own tax
advisers about the status of dividends and distributions from the Fund in their
own states and localities and about the tax consequences of gains and losses
from the redemption or sale of Shares. Non-U.S. shareholders should consult
their tax advisers as to the U.S. and non-U.S. tax consequences of an investment
in the Fund.
GENERAL INFORMATION
DESCRIPTION OF SHARES. The Fund is the initial series of the Trust, a
Delaware business trust formed in 1994. The Agreement and Declaration of Trust
of the Trust (the "Declaration") authorizes the Trustees to issue an unlimited
number of full and fractional transferable shares of beneficial interest, with
or without par value. The number of shares authorized is unlimited, and all
shares issued shall be fully paid and nonassessable. No shares shall have any
appraisal, conversion, or preemptive rights. The Declaration designates one
series of shares, $0.001 par value per share, which represents the Shares of the
Fund. The Trustees may establish additional series of shares of the Trust, each
of which would be a separate regulated investment company under the Code.
The Fund's shareholders are entitled to one vote for each full Share
held and a proportionate fractional vote for each fractional Share held. They
have the power to vote at special meetings with respect to, among other things,
the selection of
27
<PAGE> 30
Trustees; the merger, consolidation or sale of all or substantially all Trust or
Fund assets; and such additional matters relating to the Trust or Fund as may be
required by law or by regulation or order of the SEC (including changes in
fundamental investment policies and certain other limitations on investment of
the assets of the Trust or the Fund, as the case may be), or which the Trustees
consider desirable. A special meeting may be called upon the written request of
a holder or holders of not less than 10% of all Shares outstanding, provided
that the reasonable expenses for preparing and mailing such notice be paid by
such holder or holders. The Trust does not intend to hold annual meetings of
shareholders of the Fund. Any Trustee may be removed by the vote of at least
two-thirds of the outstanding Shares. The Trustees shall promptly call a meeting
of shareholders for such purpose when requested in writing to do so by the
record holders of not less than 10% of the outstanding shares of the Trust. The
Trustees will assist any group of ten or more shareholders, meeting requirements
set forth in the 1940 Act, that wishes to communicate with other shareholders in
order to obtain sufficient signatures to request a meeting for the purpose of
removing a Trustee. The Trustees may amend the Declaration without a shareholder
vote, except that shareholders have the right to vote on any amendment affecting
their right to vote, any amendment required by law of the Trust's registration
statement, or any matter submitted to shareholders by the Trustees.
PERFORMANCE DATA. From time to time the Fund may advertise its capital
appreciation or total return showing the current value of an investment in the
Fund if all dividends and distributions paid by the Fund had been reinvested in
additional Shares at the time of payment. Such advertisements or descriptions
may include the performance of HCM Partners, L.P., the predecessor of the Fund.
Furthermore, in reports or other communications to shareholders and in
advertising material, the Fund may compare its performance with that of other
mutual funds as listed in the rankings prepared by Lipper Analytical Services,
Inc. or similar independent services that monitor the performance of mutual
funds or with other appropriate indexes of investment securities. Performance
computed for purposes of advertisements should not be considered representative
of the future performance of the Fund. For a description of the method used to
determine performance, see the Statement of Additional Information--
"Determination of Performance Data."
REPORTS AND INQUIRIES. Each shareholder will receive a quarterly
statement of his or her account as well as a statement of the account after any
transaction that affects the Share balance or Share registration. The Fund will
also send to its shareholders an unaudited semiannual report and an audited
annual report, each of which will include a list of the investment securities
held by the Fund and a statement of the performance of the Fund. General
inquiries regarding the Fund may be directed to
28
<PAGE> 31
PFPC, the Fund's transfer agent, at P.O. Box 8903, Wilmington, Delaware
19899-8903, or 1-800-850-7163.
29
<PAGE> 32
================================================================================
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, the Statement of
Additional Information or the Fund's official sales literature in connection
with the offering of Shares of the Fund, and if given or made, such other
information or representations must not be relied upon as having been authorized
by the Fund. This Prospectus does not constitute an offer of the Shares in any
state in which, or to any person to whom, such offer may not lawfully be made.
------------------------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
Shareholder and Fund Expenses..................................................2
Financial Highlights...........................................................3
The Fund and Its Investment Objective..........................................5
Selection of Investments..................................................5
Investment Practices and Related Risk Factors.............................7
Portfolio Turnover.......................................................10
Additional Investment Information........................................10
Management of the Fund........................................................11
The Exchange..................................................................15
Investing in the Fund.........................................................18
How to Purchase Shares...................................................18
How to Redeem Shares.....................................................20
Net Asset Value...............................................................21
Dividends and Distributions...................................................23
Taxes.........................................................................23
General Information...........................................................24
</TABLE>
HAVEN CAPITAL MANAGEMENT, INC.
Investment Adviser
SUNSTONE DISTRIBUTION SERVICES, LLC
Distributor
================================================================================
30
<PAGE> 33
STATEMENT OF ADDITIONAL INFORMATION
February 26, 1998
-----------------------
THE HAVEN CAPITAL MANAGEMENT TRUST
-----------------------
CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Investment Objective and Policies............................................ 2
Investment Restrictions................................................... 16
Portfolio Valuation....................................................... 19
Portfolio Transactions.................................................... 19
Management of the Fund.................................................... 21
Control Persons and Principal Holders of Securities....................... 26
Shares of Beneficial Interests and Other Securities....................... 27
Additional Purchase and Redemption Information............................ 28
Additional Information Concerning Taxes................................... 28
Determination of Performance Data......................................... 32
Auditors and Counsel...................................................... 34
Financial Statements...................................................... 34
Appendix -- Description of Ratings........................................ 35
</TABLE>
This Statement of Additional Information is meant to be read in
conjunction with the Prospectus of The Haven Fund (the "Fund") dated February
26, 1998 and is incorporated by reference in its entirety into that Prospectus.
The Fund is the initial series of The Haven Capital Management Trust, a Delaware
business trust (the "Trust").
Because this Statement of Additional Information is not itself a
prospectus, no investment in shares of beneficial interest of the Fund
("Shares") should be made solely upon the information contained herein. Copies
of the Fund's Prospectus and information regarding the Fund's current
performance may be obtained by calling Sunstone Distribution Services, LLC
("Sunstone"), the Fund's distributor, at (800) 844-4836. Information regarding
the status of shareholder accounts may be obtained by calling PFPC Inc.
("PFPC"), the Fund's transfer agent, at (800) 850-7163 or by writing to PFPC
Inc., P.O. 8903, Wilmington, Delaware 19899. Haven Capital Management, Inc.
("Haven") serves as the Fund's investment adviser.
<PAGE> 34
INVESTMENT OBJECTIVE AND POLICIES
The following policies supplement the descriptions of the Fund's
investment objective and policies in the Prospectus.
FOREIGN TRANSACTIONS
Foreign Securities. The Fund may invest up to 35% of its total assets,
calculated at the time of purchase, in foreign securities, including American
Depository Receipts ("ADRs"). ADRs are receipts issued by a U.S. bank or trust
company which evidence ownership of underlying securities of foreign
corporations. ADRs are traded on domestic exchanges or in the U.S.
over-the-counter market and, generally, are in registered form. To the extent
the Fund acquires unsponsored ADRs through banks which do not have a contractual
relationship with the foreign issuer of the security underlying the ADR to issue
and service such ADRs, there may be an increased possibility that the Fund would
not become aware of certain material information or be able to respond to
corporate actions such as stock splits or rights offerings involving the foreign
issuer in a timely manner. In addition, the lack of information may result in
inefficiencies in the valuation of such instruments.
Investments in foreign securities may offer potential benefits not
available from investments solely in securities of domestic issuers. Such
benefits may include the opportunity to invest in foreign issuers that appear,
in the opinion of Haven, to offer better opportunity for long-term growth of
capital than investments in domestic securities, the opportunity to invest in
foreign countries with economic policies or business cycles different from those
of the United States and the opport nity to reduce fluctuations in portfolio
value by taking advantage of foreign stock markets that do not necessarily move
in a manner parallel to U.S. markets.
Investing in securities of foreign companies involves certain
considerations that are not typically associated with investing in securities of
domestic companies. Such investments may be affected by changes in currency
rates and in exchange control regulations (e.g., currency blockage). There may
be less publicly available information about a foreign company than about a
domestic company. Foreign companies are not generally subject to uniform
accounting, auditing and financial report ing standards comparable to those
applicable to domestic companies. Some foreign stock markets may have
substantially less volume than the New York Stock Exchange and
2
<PAGE> 35
securities of some foreign companies may be less liquid than securities of
comparable domestic companies. Also, commissions on transactions in foreign
securities may be higher than for similar transactions on domestic stock
markets. There is generally less government regulation of stock exchanges,
brokers, and listed and unlisted companies in foreign countries than in the
United States.
The Fund generally invests in foreign securities traded on the
principal trading markets for such securities. In most cases, the markets will
be foreign stock exchanges, although they may also be over-the-counter markets.
The Fund anticipates that the principal trading markets for the foreign
securities in which it will invest will be relatively liquid compared to the
stock exchanges or over-the-counter markets in the United States.
The Fund may invest up to 5% of its assets in countries with emerging
economies or securities markets, including certain countries in Asia and Latin
America. Political and economic structures in many of such countries may be
undergoing significant evolution and rapid development, and such countries may
lack the social, political and economic stability characteristic of more
developed countries. Certain of such countries have in the past failed to
recognize private property rights and have at times nationalized or expropriated
the assets of private companies. As a result, the risks described above,
including the risks of nationalization or expropriation of assets, may be
heightened. In addition, unanticipated political or social developments may
affect the values of the Fund's investments in those countries and the
availability to the Fund of additional investments in those countries. The small
size and inexperience of the securities markets in certain of such countries and
the limited volume of trading in securities in those countries may make the
Fund's investments in such countries illiquid and more volatile than investments
in more developed countries, and the Fund may be required to establish special
custodial or other arrangements before making certain investments in those
countries. There may be little financial or accounting information available
with respect to issuers located in certain of such countries, and it may be
difficult as a result to assess the value or prospects of an investment in such
issuers.
Foreign Currency Transactions. The Fund may, to the extent it invests
in foreign securities, enter into forward foreign currency exchange contracts in
order to protect against adverse changes in future foreign currency exchange
rates. Because investment in foreign issuers will usually involve currencies of
foreign countries, the value of the assets of the Fund as measured in U.S.
dollars will be affected by changes in foreign currency exchange rates. The Fund
may incur costs in connection with conversions between various currencies.
3
<PAGE> 36
The Fund may enter, solely for hedging purposes, into contracts to
purchase foreign currencies to protect against an anticipated rise in the U.S.
dollar price of securities it intends to purchase. The Fund may enter into
contracts to sell foreign currencies to protect against the decline in value of
its foreign currency denominated portfolio securities, or a decline in the value
of anticipated dividends from such securities, due to a decline in the value of
foreign currencies against the U.S. dollar. The Fund will not engage in
cross-hedging transactions. Contracts to sell foreign currency could limit any
potential gain which might be realized by the Fund if the value of the hedged
currency increased.
Currency exchange rates may fluctuate significantly over short periods
of time. They generally are determined by the forces of supply and demand in the
foreign exchange markets and the relative merits of investments in different
countries, actual or anticipated changes in interest rates and other complex
factors, as seen from an international perspective. Currency exchange rates also
can be affected unpredictably by intervention by U.S. or foreign governments or
central banks or the failure to intervene or by currency controls or political
developments in the U.S. or abroad. Markets for trading foreign currency forward
contracts offer less protection against defaults than is available when trading
in currency instruments on an exchange. Since a forward foreign currency
exchange contract is not guaranteed by an exchange or clearinghouse, a default
on the contract would deprive the Fund of unrealized profits or force the Fund
to cover its commitments for purchase or resale, if any, at the current market
price.
If the Fund enters into a forward foreign currency exchange contract to
buy foreign currency, the Fund will be required to place cash or liquid
high-grade debt securities in a segregated account with the Fund's custodian in
an amount equal to the value of the assets committed to the consummation of the
forward contract. If the value of the securities placed in the segregated
account declines, additional cash or liquid high-grade debt securities will be
placed in the account so that the value of the account will equal the amount of
the Fund's commitment with respect to the contract. If the Fund sells a forward
foreign currency contract, it will be appropriately covered.
FIXED INCOME SECURITIES
The prices of fixed income securities fluctuate in response to the
general level of interest rates as well as supply and demand for similarly rated
securities. Another factor which causes fluctuations in the prices of fixed
income securities is the supply and demand for similarly rated securities.
Fluctuations in the prices of portfolio
4
<PAGE> 37
securities subsequent to their acquisition by the Fund will not affect cash
income from such securities but will be reflected in the Fund's net asset value.
Corporate Debt Obligations. As described in the Prospectus, the Fund
may invest in a variety of fixed income securities issued by domestic and
foreign issuers, including corporate debt obligations which are rated AAA, AA or
A by Standard & Poor's Corporation ("Standard & Poor's") or Aaa, Aa or A by
Moody's Investors Service, Inc. ("Moody's") or, if unrated, determined by Haven
to be of comparable credit quality. The Fund can hold no more than 5% of its net
assets in corporate debt obligations downgraded to a rating below A. See
Appendix A for a description of these corporate bond ratings assigned by
Standard & Poor's and Moody's. The Fund will limit its investments in corporate
debt obligations and other non-equity investments to no more than 35% of the
value of its total assets.
Zero Coupon Bonds. The Fund may invest up to 5% of its net assets in
zero coupon U.S. Treasuries and in zero coupon securities issued by financial
institutions, which represent a proportionate interest in underlying U.S.
Treasury securities. Such bonds do not entitle the holder to any periodic
payments of interest prior to maturity or provide for a specified cash payment
date when the bonds begin paying current interest. As a result, zero coupon
bonds are generally issued and traded at a significant discount from their face
value. The discount approximates the present value amount of interest the bonds
would have accrued and compounded over the period until maturity. The market
price of zero coupon bonds generally is more volatile than the market prices of
securities that provide for the periodic payment of interest and is likely to
fluctuate more in response to changes in interest rates than those of
interest-bearing securities having similar maturities and credit quality. Zero
coupon bonds carry the additional risk that, unlike securities that periodically
pay interest to maturity, the Fund will realize no cash until a specified future
payment date unless a portion of such securities is sold. In addition, the
Fund's investments in zero coupon bonds may require the Fund to sell certain of
its portfolio securities to generate sufficient cash to satisfy certain income
distribution requirements. The Fund will invest only in zero coupon U.S.
Treasury securities that are part of the STRIPS program.
Government Securities. The Fund may invest in debt obligations of
varying maturities issued or guaranteed by the United States or foreign
governments or their agencies or sponsored instrumentalities. Direct obligations
of the U.S. Treasury include a variety of securities that differ in their
interest rates, maturities and dates of issuance. U.S. government securities
also include securities issued or guaranteed by the Federal Housing
Administration, Farmers Home Loan Administration, Export-Im-
5
<PAGE> 38
port Bank of the United States, Small Business Administration, Government
National Mortgage Association ("GNMA"), General Services Administration, Central
Bank for Cooperatives, Federal Farm Credit Banks, Federal Home Loan Banks,
Federal Home Loan Mortgage Corporation ("FHLMC"), Federal Intermediate Credit
Banks, Federal Land Banks, Federal National Mortgage Association ("FNMA"),
Maritime Administration, Tennessee Valley Authority, District of Columbia Armory
Board and Student Loan Marketing Association. Because the U.S. and foreign
governments are not generally obligated by law to provide support to a sponsored
instrumentality, the Fund will invest in obligations issued by such an
instrumentality only if Haven determines that the credit risk with respect to
the instrumentality does not make its securities unsuitable for investment by
the Fund.
OTHER INVESTMENT POLICIES
Convertible Securities. The Fund may not purchase or hold more than 5%
of its net assets in convertible securities rated below BBB by S&P, Baa by
Moody's or, if unrated, determined by Haven to be of comparable quality. Such
lower rated securities involve greater risk of loss of income and principal than
higher rated securities, are speculative in nature, and are commonly known as
"high yield" securities or "junk bonds." Although high risk, low rated debt
securities and comparable unrated debt securities may offer higher yields than
do higher rated securities, they generally involve greater volatility of price
and risk of principal and income.
Securities of Other Investment Companies. The Fund may invest in
securities of closed-end investment companies to the extent permitted under the
Investment Company Act of 1940, as amended (the "1940 Act"). Presently, under
the 1940 Act, the Fund may hold securities of another investment company in
amounts which (a) do not exceed 3% of the total outstanding voting stock of such
company, (b) do not exceed 5% of the value of the Fund's total assets and (c)
when added to all other investment company securities held by the Fund, do not
exceed 10% of the value of the Fund's total assets. The Fund does not intend to
invest in the securities of other investment companies except by purchase in the
open securities market where no commission or profit to a sponsor or dealer
results from the purchase other than the customary broker's commission, or
except when the purchase is part of a plan of merger, consolidation,
reorganization, or acquisition.
Lending of Portfolio Securities. The Fund may lend portfolio securities
to brokers, dealers and other financial organizations that meet capital and
other credit
6
<PAGE> 39
requirements or other criteria established by the trustees of the Trust (the
"Trustees"). Haven will be responsible for monitoring the Fund's portfolio
lending activities and for compliance with the capital and other credit criteria
established by the Trustees. These loans, if and when made, may not exceed
33-1/3% of the Fund's total assets taken at value. The Fund will not lend
portfolio securities to Haven or its affiliates unless it has applied for and
received specific authority to do so from the Securities and Exchange
Commission (the "SEC"). Loans of portfolio securities will be collateralized by
cash, letters of credit or U.S. government securities, which are maintained at
all times in an amount equal to at least 100% of the current market value of
the loaned securities. Any gain or loss in the market price of the securities
loaned that might occur during the term of the loan would be for the account of
the Fund. From time to time, the Fund may return a part of the interest earned
from the investment of collateral received for securities loaned to the
borrower and/or a third party that is unaffiliated with the Fund and that
is acting as a "finder."
By lending its securities, the Fund can increase its income by
continuing to receive interest on the loaned securities as well as by either
investing the cash collateral in short-term high-grade liquid debt securities
instruments or obtaining yield in the form of interest paid by the borrower when
U.S. government securities are used as collateral. When the Fund invests cash
collateral received for the loan of portfolio securities, a leveraging effect is
obtained. The Fund will adhere to the following conditions whenever its
portfolio securities are loaned: (a) the Fund must receive at least 100% cash
collateral or equivalent securities from the borrower; (b) the borrower must
increase such collateral whenever the market value of the securities rises above
the level of such collateral; (c) the Fund must be able to terminate the loan at
any time; (d) the Fund must receive reasonable interest on the loan, as well as
payments in the amount of any dividends, interest or other distribution on the
loaned securities and any increase in market value; (e) the Fund may pay only
reasonable custodian fees in connection with the loan; and (f) voting rights on
the loaned securities may pass to the borrower, provided, however, that if a
material event adversely affecting the investment occurs, the Fund must
terminate the loan and regain the right to vote the securities.
Repurchase Agreements. The Fund may utilize up to 5% of its net assets
to engage in repurchase agreement transactions with respect to any securities in
which it invests. The Fund will enter into repurchase agreements with member
banks of the Federal Reserve System or certain domestic non-bank dealers.
Repurchase agreements are contracts under which the buyer of a security
simultaneously commits to resell the security to the seller at an agreed-upon
price and date. Under each repurchase agreement, the selling institution will be
required to maintain the value of
7
<PAGE> 40
the securities subject to the repurchase agreement at not less than their
repurchase price. Repurchase agreements could involve certain risks in the event
of default or insolvency of the other party, including possible delays or
restrictions upon the Fund's ability to dispose of the underlying securities.
The investment adviser of the Fund, acting under the supervision of the
Trustees, reviews the creditworthiness of those bank and non-bank dealers with
which the Fund enters into repurchase agreements to evaluate these risks.
Futures Activities. The Fund may utilize up to 5% of its net assets to
enter into interest rate and stock index futures contracts and may utilize up to
5% of its net assets to purchase or write related options that are traded on an
exchange designated by the Commodity Futures Trading Commission (the "CFTC") or
consistent with CFTC regulations on foreign exchanges. These investments may be
made solely for bona fide hedging as defined in CFTC regulations. The ability of
the Fund to trade in futures contracts may be limited by the requirements of the
Internal Revenue Code of 1986, as amended (the "Code"), applicable to a
regulated investment company.
The Fund will not engage in futures activities generally if the sum of
the amount of initial margin deposits and premiums paid for unexpired options
required to establish positions other than those considered to be "bona fide
hedging" by the CFTC would exceed 5% of the Fund's net asset value, after taking
into account unrealized profits and unrealized losses on commodity contracts it
has entered into. The Fund's long positions in futures contracts or options
thereon written by it must be collateralized with cash or high-grade liquid
assets held in a segregated account.
Futures Contracts. An interest rate futures contract provides for the
future sale by one party and the purchase by the other party of a certain amount
of a specific financial instrument (debt security) at a specified price, date,
time and place. A stock index futures contract is an agreement between seller
and buyer to respectively deliver and take delivery of a commodity which is
represented by a stock price index at a future specified date. The delivery is a
cash settlement of the difference between the original transaction price and the
final price of the index at the termination of the contract. Stock index futures
are capitalization weighted indices which reflect the market value of the firms
listed on the indices.
The purpose of entering into a futures contract is to protect the Fund
from fluctuations in value without its actually buying or selling the
securities. Of course, since the value of portfolio securities will far exceed
the value of the futures contracts sold by the Fund, an increase in the value of
the futures contracts could only mitigate -- but not totally offset -- the
decline in the value of the Fund's assets. No
8
<PAGE> 41
consideration is paid or received by the Fund upon the purchase or sale of a
futures contract. Upon entering into a futures contract, the Fund will be
required to deposit in a segregated account with its custodian an amount of cash
or cash equivalents equal to 1 to 10% of the contract amount (this amount is
subject to change by the board of trade on which the contract is traded and
members of such board of trade may charge a higher amount). This amount is known
as "initial margin" and is in the nature of a performance bond or good faith
deposit on the contract which is returned to the Fund upon termination of the
futures contract, assuming all contractual obligations have been satisfied. The
broker will have access to amounts in the margin account if the Fund fails to
meet its contractual obligations. Subsequent payments, known as "variation
margin," to and from the broker, will be made daily as the price of the index or
securities underlying the futures contract fluctuates, making the long and short
positions in the futures contract more or less valuable, a process known as
"marking-to-market." At any time prior to the expiration of a futures contract,
the Fund may elect to close the position by taking an opposite position, which
will operate to terminate the Fund's existing position in the contract.
There are several risks in connection with the use of futures contracts
as a hedging device. Successful use of futures contracts is subject to the
ability of the Fund's investment adviser to predict correctly movements in the
direction of interest rates and stock indices. These predictions involve skills
and techniques that may be different from those involved in the management of
the portfolio securities being hedged. In addition, there can be no assurance
that there will be a correlation between movements in the price of the
underlying securities or index and movements in the price of the securities
which are the subject of the hedge. A decision concerning whether, when and how
to hedge involves the exercise of skill and judgment and even a well-conceived
hedge may be unsuccessful to some degree because of market behavior or
unexpected trends in interest rates or stock indices. The potential loss the
Fund may experience as a result of its investments in any futures transaction is
unlimited.
Positions in futures contracts and options in futures contracts may be
closed out only on the exchange on which they were entered into (or through a
linked exchange). No secondary market for such contracts exists. Although the
Fund intends to purchase or sell futures contracts only if there is an active
market for such contracts, there is no assurance that a liquid market will exist
for the contracts at any particular time. Most U.S. futures exchanges and boards
of trade limit the amount of fluctuation permitted in futures contract prices
during a single trading day. Once the daily limit has been reached in a
particular contract, no trades may be made that day at a price beyond that
limit. It is possible that futures contract prices could move to the daily limit
for several consecutive trading days with little or no trading, thereby
preventing
9
<PAGE> 42
prompt liquidation of futures positions and subjecting some futures traders to
substantial losses. In such event, and in the event of adverse price movements,
the Fund would be required to make daily cash payments of variation margin. In
such circumstances, an increase in the value of the portion of the Fund's
securities being hedged, if any, may partially or completely offset losses on
the futures contract. However, as described above, there is no guarantee that
the price of the securities being hedged will, in fact, correlate with the price
movements in a futures contract and thus provide an offset to losses on the
futures contract.
If the Fund has hedged against the possibility of an event adversely
affecting the value of securities held in its portfolio and that event does not
occur, the Fund will lose part or all of the benefit of the increased value of
securities which it has hedged because it will have offsetting losses in its
futures positions. Losses incurred in hedging transactions and the costs of
these transactions will affect the Fund's performance. In addition, in such
situations, if the Fund had insufficient cash, it may have to sell securities to
meet daily variation margin requirements at a time when it may be
disadvantageous to do so. These sales of securities may, but will not
necessarily, be at increased prices which reflect the decline in interest rates.
When-Issued Securities and Delayed Delivery Transactions. The Fund may
utilize up to 5% of its net assets to purchase securities on a "when-issued"
basis or purchase or sell securities for delayed delivery (i.e., payment or
delivery occur beyond the normal settlement date at a stated price and yield).
In these transactions, payment for and delivery of the securities occurs beyond
the regular settlement dates. When-issued transactions normally settle within
30-45 days. The Fund will enter into a when-issued transaction for the purpose
of acquiring portfolio securities and not for the purpose of leverage, but may
sell the securities before the settlement date if Haven deems it advantageous to
do so. The payment obligation and the interest rate that will be received on
when-issued securities are fixed at the time the buyer enters into the
commitment, and the right to acquire such security must be exercisable without
additional cost to the Fund. Due to fluctuations in the value of securities
purchased or sold on a when-issued or delayed-delivery basis, the yields
obtained on such securities may be higher or lower than the yields available in
the market on the dates when the investments are actually delivered to the
buyers.
When the Fund agrees to purchase when-issued or delayed delivery
securities, its custodian will set aside cash, U.S. government securities or
liquid high-grade debt obligations equal to the amount of the commitment in a
separate account. Normally, the custodian will set aside portfolio securities to
satisfy a purchase commitment, and in such a case the Fund may be required
subsequently to place additional
10
<PAGE> 43
assets in the separate account in order to ensure that the value of the account
remains equal to the amount of the Fund's commitment. It may be expected that
the Fund's net assets will fluctuate to a greater degree when it sets aside
portfolio securities to cover such purchase commitments than when it sets aside
cash. Because the Fund will set aside cash and liquid assets to satisfy its
purchase commitments in the manner described, the Fund's liquidity and ability
to manage its portfolio might be affected by reason of its commitments to
purchase when-issued or sell delayed delivery securities.
When the Fund engages in when-issued or delayed delivery transactions,
it relies on the other party to consummate the trade. Failure of the seller to
do so may result in the Fund's incurring a loss or missing an opportunity to
obtain a price considered to be advantageous.
Options on Securities. In order to hedge against adverse market shifts,
the Fund may utilize up to 5% of its net assets to purchase put and call options
on securities. In addition, the Fund may write covered call options on
securities. The Fund realizes fees (referred to as "premiums") for granting the
rights evidenced by the call options it has written. A put option embodies the
right of its purchaser to compel the writer of the option to purchase from the
option holder an underlying security at a specified price at any time during the
option period. In contrast, a call option embodies the right of its purchaser to
compel the writer of the option to sell to the option holder an underlying
security at a specified price at any time during the option period. Thus, the
purchaser of a call option written by the Fund has the right to purchase from
the Fund the underlying security owned by the Fund at the agreed-upon price for
a specified time period. The Fund may write only covered call options.
Accordingly, whenever the Fund writes a call option it will continue to own or
have the present right to acquire the underlying security for as long as it
remains obligated as the writer of the option. Requirements of the Code may
restrict the Fund's ability to engage in options transactions.
The principal reason for writing covered call options on a security is
to attempt to realize, through the receipt of premiums, a greater return than
would be realized on the securities alone. In return for a premium, the writer
of a covered call option forfeits the right to any appreciation in the value of
the underlying security above the strike price for the life of the option (or
until a closing purchase transaction can be effected). Nevertheless, the call
writer retains the risk of a decline in the price of the underlying security.
The size of the premiums that the Fund may receive may be adversely affected as
new or existing institutions, including other investment companies, engage in or
increase their option-writing activities.
11
<PAGE> 44
Options written by the Fund will normally have expiration dates between
one and nine months from the date written. The exercise price of the options may
be below, equal to or above the market values of the underlying securities at
the times the options are written. In the case of call options, these exercise
prices are referred to as "in-the-money," "at-the-money" and "out-of-the-money,"
respectively. The Fund may write (a) in-the-money call options when Haven
expects that the price of the underlying security will remain flat or decline
moderately during the option period, (b) at-the-money call options when Haven
expects that the price of the underlying security will remain flat or advance
moderately during the option period and (c) out-of-the-money call options when
Haven expects that the premiums received from writing the call option plus the
appreciation in market price of the underlying security up to the exercise price
will be greater than the appreciation in the price of the underlying security
alone. In any of the preceding situations, if the market price of the underlying
security declines and the security is sold at this lower price, the amount of
any realized loss will be offset wholly or in part by the premium received.
So long as the obligation of the Fund as the writer of an option
continues, the Fund may be assigned an exercise notice by the broker-dealer
through which the option was sold, requiring the Fund to deliver the underlying
security against payment of the exercise price. This obligation terminates when
the option expires or the Fund effects a closing purchase transaction. The Fund
can no longer effect a closing purchase transaction with respect to an option
once it has been assigned an exercise notice. To secure its obligation to
deliver the underlying security when it writes a call option, the Fund will be
required to deposit in escrow the underlying security or other assets in
accordance with the rules of the Options Clearing Corporation (the "Clearing
Corporation") and of the securities exchange on which the option is written.
An option position may be closed out only where there exists a
secondary market for an option of the same series on a recognized securities
exchange or in the over-the-counter market. The Fund expects to write options
only on U.S. securities exchanges.
The Fund may realize a profit or loss upon entering into a closing
transaction. In cases where the Fund has written an option, it will realize a
profit if the cost of the closing purchase transaction is less than the premium
received upon writing the original option and will incur a loss if the cost of
the closing purchase transaction exceeds the premium received upon writing the
original option. Similarly, when the Fund has purchased an option and engages in
a closing sale transaction, whether the Fund realizes a profit or loss will
depend upon whether the amount received in the
12
<PAGE> 45
closing sale transaction is more or less than the premium the Fund initially
paid for the original option plus the related transaction costs.
Although the Fund will generally purchase or write only those options
for which Haven believes there is an active secondary market so as to facilitate
closing transactions, there is no assurance that sufficient trading interest
will exist to create a liquid secondary market on a securities exchange for any
particular option or at any particular time, and for some options no such
secondary market may exist. A liquid secondary market in an option may cease to
exist for a variety of reasons. In the past, for example, higher than
anticipated trading activity or order flow or other unforeseen events have at
times rendered certain of the facilities of the Clearing Corporation and various
securities exchanges inadequate and resulted in the institution of special
procedures, such as trading rotations, restrictions on certain types of orders
or trading halts or suspensions in one or more options. There can be no
assurance that similar events, or events that may otherwise interfere with the
timely execution of customers' orders, will not recur. In such event, it might
not be possible to effect closing transactions in particular options. If, as a
covered call option writer, the Fund is unable to effect a closing purchase
transaction in a secondary market, it will not be able to sell the underlying
security until the option expires or it delivers the underlying security upon
exercise.
Securities exchanges generally have established limitations governing
the maximum number of calls and puts of each class which may be held or written,
or exercised within certain time periods by an investor or group of investors
acting in concert (regardless of whether the options are written on the same or
different securities exchanges or are held, written or exercised in one or more
accounts or through one or more brokers). It is possible that the Fund and other
clients of Haven may be considered to be such a group. A securities exchange may
order the liquidation of positions found to be in violation of these limits and
it may impose certain other sanctions. These limits may restrict the number of
options the Fund will be able to purchase on a particular security.
Additional risks exist with respect to certain of the U.S. government
securities for which the Fund may write covered call options. If the Fund writes
covered call options on mortgage-back securities issued by GNMA, FNMA or FHLMC,
the mortgaged-backed securities that it holds as cover may, because of scheduled
amortization or unscheduled prepayments, cease to be sufficient cover. If this
occurs, the Fund will compensate for the decline in the value of the cover by
purchasing an appropriate additional amount of mortgage-backed securities. The
required cover will be marked-to-market daily.
13
<PAGE> 46
In addition to writing covered options for other purposes, the Fund may
enter into options transactions as hedges to reduce investment risk, generally
by making an investment expected to move in the opposite direction of a
portfolio position. A hedge is designed to offset a loss on a portfolio position
with a gain on the hedge position; at the same time, however, a properly
correlated hedge will result in a gain on the portfolio position being offset by
a loss on the hedge position. The Fund bears the risk that the prices of the
securities being hedged will not move in the same amount as the hedge. The Fund
will engage in hedging transactions only when deemed advisable by Haven.
Successful use by the Fund of options will be subject to Haven's ability to
predict correctly movements in the direction of the stock underlying the option
used as a hedge. Losses incurred in hedging transactions and the costs of these
transactions will affect the Fund's performance.
Stock Index Options. The Fund may utilize up to 5% of its net assets to
purchase exchange-listed put and call options on stock indexes, and may write
options on such indexes to hedge against the effects of market-wide price
movements. A stock index measures the movement of a certain group of stocks by
assigning relative values to the common stocks included in the index. A stock
index fluctuates with changes in the market values of the stocks included in the
index. Some stock index options are based on a broad market index such as the
NYSE Composite index, or a narrower market index such as the Standard & Poor's
100. Indexes are also based on an industry or market segment such as the AMEX
Oil and Gas Index or the Computer and Business Equipment Index.
Options on stock indexes are similar to options on stock except that
(a) the expiration cycles of stock index options are monthly, while those of
stock options are currently quarterly, and (b) the delivery requirements are
different. Instead of giving the right to take or make delivery of stock at a
specified price, an option on a stock index gives the holder the right to
receive a cash "exercise settlement amount" equal to (i) the amount, if any, by
which the fixed exercise price of the option exceeds (in the case of a put) or
is less than (in the case of a call) the closing value of the underlying index
on the date of exercise, multiplied by (ii) a fixed "index multiplier." Receipt
of this cash amount will depend upon the closing level of the stock index upon
which the option is based being greater than, in the case of a call, or less
than, in the case of a put, the exercise price of the index and the exercise
price of the option expressed in dollars times a specified multiple. The writer
of the option is obligated, in return for the premium received, to make delivery
of this amount. The writer may offset its position in stock index options prior
to expiration by entering into a closing transaction on an exchange or it may
let the option expire unexercised.
14
<PAGE> 47
The effectiveness of purchasing or writing stock index options as a
hedging technique will depend upon the extent to which price movements in the
portion of a securities portfolio being hedged correlate with price movements of
the stock index selected. Because the value of an index option depends upon
movements in the level of the index rather than the price of a particular stock,
whether the Fund will realize a gain or loss from the purchase or writing of
options on an index depends upon movements in the level of stock prices in the
stock market generally or, in the case of certain indexes, in an industry or
market segment, rather than movements in the price of a particular stock.
Accordingly, successful use by the Fund of options on stock indexes will be
subject to Haven's ability to predict correctly movements in the direction of
the stock market generally or of a particular industry. This requires different
skills and techniques than predicting changes in the price of individual stocks.
The Fund will engage in stock index options transactions only when
determined by Haven to be consistent with the Fund's efforts to control risk.
There can be no assurance that such judgment will be accurate or that the use of
these portfolio strategies will be successful. When the Fund writes an option on
a stock index, the Fund will establish a segregated account consisting of cash
or high-grade liquid debt securities in an amount equal in value to the full
amount the Fund has at risk and will maintain the account while the option is
open. The aggregate value of the securities underlying the calls or puts on
stock indexes written by the Fund, determined as of the date the options are
sold, when added to the securities underlying the calls on securities written by
the Fund, may not exceed 25% of the Fund's net assets. Requirements of the Code
may limit the Fund's ability to engage in stock index transactions.
Warrants. Up to 5% of the net assets of the Fund may be invested in
warrants. A warrant does not carry with it the right to dividends or voting
rights with respect to the securities which it entitles a holder to purchase,
and it does not represent any rights in the assets of the issuer. For these
reasons, warrants may be considered more speculative than certain other types of
investments. In addition, the value of a warrant does not necessarily change
with the value of the underlying securities and a warrant ceases to have value
if it is not exercised prior to its expiration date.
Investment in Unseasoned Companies. The Fund may invest up to 5% of its
net assets, calculated at the time of purchase, in companies which (including
predecessors) have operated less than three years. The securities of such
companies may have limited liquidity which can result in their being priced
lower than might otherwise be the case. In addition, investments in unseasoned
companies are more speculative and entail greater risk than investments in
companies with an established operating record.
15
<PAGE> 48
INVESTMENT RESTRICTIONS
The Fund's investment objective and its intention to invest, under
normal market conditions, at least 65% of its total assets in equity securities
of domestic issuers are fundamental policies of the Fund and cannot be changed
without the approval of a "majority of the Fund's outstanding voting
securities." As used in the Prospectus and this Statement of Additional
Information, a "majority of the Fund's outstanding voting securities" means the
lesser of (i) 67% of the Shares represented at a meeting at which more than
50% of the outstanding Shares are represented, and (ii) more than 50% of the
outstanding Shares.
In addition, the following investment restrictions have been adopted by
the Fund as fundamental policies and cannot be changed without the approval of a
majority of the Fund's outstanding voting securities. The Fund may not:
1. Borrow money, except from banks on a temporary or emergency
basis in an aggregate amount not exceeding 10% of the value of the Fund's
total assets (including the amount borrowed), provided that the Fund is
required to maintain asset coverage of at least 300% for all borrowings. For
purposes of this investment restriction, forward contracts, swaps, options,
futures contracts and options on futures contracts, and forward commitment
transactions shall not constitute borrowing, if appropriately covered.
2. Purchase the securities of any one issuer, other than the United
States Government or any of its agencies or instrumentalities, if immediately
after such purchase more than 5% of the value of its total assets would be
invested in such issuer or the Fund would own more than 10% of the outstanding
voting securities of such issuer, except that (a) up to 25% of the value of the
Fund's total assets may be invested without regard to such 5% and 10%
limitations and (b) such 5% limitation shall not apply to repurchase agreements
collateralized by obligations of the United States Government, its agencies or
instrumentalities.
3. Invest 25% or more of the value of its total assets in the
securities of one or more issuers conducting their principal business activities
in the same industry. This limitation does not apply to investments or
obligations of the U.S. Government or any of its agencies or instrumentalities.
4. Pledge, mortgage or hypothecate its assets, except to the extent
necessary to secure permitted borrowings and to the extent related to the
deposit of
16
<PAGE> 49
assets in escrow in connection with the writing of covered put and call options
and the purchase of securities on a forward commitment or delayed-delivery basis
and collateral and initial or variation margin arrangements with respect to
currency transactions, options, futures contracts, including those relating to
indices, and options on futures contracts or indices.
5. Purchase securities on margin, except for such short-term
credits as are necessary for the clearance of transactions, but the Fund may
make margin deposits in connection with transactions in currencies, options,
futures contracts and options on futures.
6. Make short sales of securities or maintain a short position
(except short sales against-the-box).
7. Underwrite any issue of securities issued by others, except to
the extent that the sale of securities acquired by the Fund directly from an
issuer, underwriter or dealer may be deemed to be an underwriting.
8. Purchase, hold or deal in real estate (including real estate
limited partnerships) or oil, gas or mineral leases, although the Fund may
purchase and sell securities that are secured by real estate or interests
therein, securities of real estate investment trusts and mortgage-related
securities and may hold and sell real estate acquired for the Fund as a result
of the ownership of securities.
9. Invest in commodities except that the Fund may purchase and sell
futures contracts, including those relating to securities, currencies and
indices, and options on futures contracts, securities, currencies or indices,
and purchase and sell currencies or securities on a forward commitment or
delayed delivery basis as described under "Investment Policies."
10. Lend any funds or other assets except through the purchase of all
or a portion of an issue of securities or obligations of the type in which it
may invest; however, the Fund may lend its portfolio securities in an amount not
to exceed 33-1/3% of the value of its total assets.
11. Issue any senior security (as such term is defined in Section
18(f) of the 1940 Act) except as permitted in Investment Restriction No. 1.
In addition to the investment restrictions mentioned above, the
Trustees of the Fund have voluntarily adopted the following policies and
restrictions which are
17
<PAGE> 50
observed in the conduct of its affairs. These represent intentions of the
Trustees based upon current circumstances. They differ from fundamental
investment restrictions in that they may be changed or amended by action of the
Trustees of the Fund without prior notice to or approval of shareholders.
Accordingly, the Fund may not:
1. Purchase the securities of any issuers if the officers or
Trustees of the Fund, its investment advisers or managers owning beneficially
more than one-half of 1% of the securities of such issuer, together own
beneficially more than 5% of such securities.
2. Write covered calls or put options with respect to more than 5%
of the value of its net assets, invest more than 5% of its net assets in
protective put options or more than 5% of its total assets in puts, call,
spreads or straddles, or any combination thereof other than protective put
options. The aggregate value of premiums paid on all options other than
protective put options, held by the Fund at any time will not exceed 5% of the
Fund's total net assets.
3. Invest more than 15% of its net assets in securities that are
not liquid (i.e., securities that may not be sold or disposed of in the ordinary
course of business within seven days at approximately the value at which the
Fund has valued the investment), and the Fund may not invest in securities that,
at the time of purchase by or transfer to the Fund, are subject to restrictions
on transfer, including, without limitation, legends as to applicable federal or
state securities laws or other legal or contractual restrictions.
4. Purchase any security if as a result the Fund would then have \
more than 5% of its total assets invested in securities of companies (including
predecessors) that have been in continuous operation for fewer than three years.
5. Invest in warrants (other than warrants acquired by the Fund as
part of a unit or attached to securities at the time of purchase) if, as a
result, the investments (valued at the lower of cost or market) would exceed 5%
of the value of the Fund's net assets of which not more than 2% of the Fund's
net assets may be invested in warrants not listed on a recognized U.S. or
foreign stock exchange to the extent permitted by applicable state securities
laws.
6. Purchase securities while the Fund's borrowings exceed 5% of its
total assets.
18
<PAGE> 51
For purposes of the foregoing limitations, any limitation which
involves a maximum percentage will not be violated unless an excess over the
percentage occurs immediately after, and is caused by, an acquisition or
encumbrance of securities or assets of, or borrowings by the Fund. With respect
to fundamental Investment Restriction No. 1, the Fund must maintain asset
coverage of at least 300% (as defined in the 1940 Act), inclusive of any amounts
borrowed.
The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Shares in certain states. Should the
Fund determine that any such commitment is no longer in the best interest of the
Fund and its shareholders, the Fund will revoke the commitment by terminating
the sale of Shares in the state involved. The Fund is also subject to
diversification requirements imposed by the 1940 Act and the Code.
PORTFOLIO VALUATION
The Prospectus discusses the manner in which and the time at which the
net asset value of the Fund is determined for purposes of sales and redemptions.
The net asset value of the Fund is determined on every business day that the New
York Stock Exchange (the "NYSE") is open for business. The NYSE is not open for
business on New Year's Day, Martin Luther King, Jr.'s Birthday, President's Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day.
PORTFOLIO TRANSACTIONS
Haven is responsible for decisions to buy and sell securities for the
Fund, the selection of brokers and dealers to effect the transactions and the
negotiation of brokerage commissions, if any. Purchases and sales of securities
on a securities exchange are effected through brokers who charge a negotiated
commission for their services. Orders may be directed to any broker.
In the over-the-counter market, debt and equity securities are
generally traded on a "net" basis with dealers acting as principal for their own
accounts without a stated commission, although the price of a security usually
includes a profit to the dealer. The Fund may also pay a mark-up (sometimes
referred to as a dealer's turn) in principal transactions and in transactions in
the over-the-counter market. In underwritten offerings, securities are purchased
at a fixed price which includes an
19
<PAGE> 52
amount of compensation to the underwriter, generally referred to as the
underwriter's concession or discount. On occasion, certain money market
instruments may be purchased directly from an issuer, in which case no
commissions or discounts are paid.
In placing orders for portfolio securities of the Fund, Haven is
required to give primary consideration to obtaining the most favorable price and
efficient execution. This means that Haven will seek to execute each transaction
at a price and commission, if any, which provide the most favorable total cost
or proceeds reasonably attainable in the circumstances. While Haven generally
seeks reasonably competitive spreads or commissions, the Fund will not
necessarily be paying the lowest spread or commission available. Within the
framework of this policy, Haven will consider research and investment services
provided by brokers or dealers who effect or are parties to portfolio
transactions of the Fund or other clients of Haven. Such research and investment
services are those which brokerage houses customarily provide to institutional
investors and include statistical and economic data and research reports on
particular companies and industries. Such services are used by Haven in
connection with all of its investment activities, and some of such services
obtained in connection with the execution of transactions for the Fund may be
used in managing other investment accounts. Conversely, brokers furnishing such
services may be selected for the execution of transactions of such other
accounts, whose aggregate assets are far larger than those of the Fund, and the
services furnished by such brokers may be used by Haven in providing investment
advisory services for the Fund. On occasions when Haven deems the purchase or
sale of a security to be in the best interest of the Fund as well as its other
customers (including any other fund or other investment company or advisory
account for which Haven or an affiliate acts as investment adviser), Haven, to
the extent permitted by applicable laws and regulations, may aggregate the
securities to be sold or purchased for the Fund with those to be sold or
purchased for such other customers in order to obtain the best net price and
most favorable execution. In such event, allocation of the securities so
purchased or sold, as well as the expenses incurred in the transaction, will be
made by Haven in the manner it considers to be most equitable and consistent
with its fiduciary obligations to the Fund and such other customers. In some
instances, this procedure may adversely affect the price and size of the
position obtainable for the Fund.
Commission rates are established pursuant to negotiations with the
broker based on the quality and quantity of execution services provided by the
broker in the light of generally prevailing rates. The allocation of orders
among brokers and the commission rates paid are reviewed periodically by the
Trustees.
20
<PAGE> 53
For the fiscal years ended October 31, 1997, 1996 and 1995, the Fund
paid total commissions to brokers of $102,965, $127,474 and $125,227,
respectively. Pursuant to agreements with certain brokers, Haven directed
brokerage transactions for the Fund during the year ended October 31, 1997 with
aggregate net values and commissions of approximately $2,499,000 and $5,050,
respectively, in exchange for specific research services. The balance of the
commissions the Fund paid was to other brokers who provide research services to
Haven from time to time. While Haven has no specific agreement or understanding
with such other brokers, Haven believes that such brokers would not continue to
provide research services if Haven does not continue to direct brokerage
transactions to such other brokers. The research services provided to Haven by
brokers assists Haven in managing the assets of Haven's other client accounts as
well as the assets of the Fund.
Portfolio Turnover
The Fund does not intend to seek profits through short-term trading,
but the rate of turnover will not be a limiting factor when the Fund deems it
desirable to sell or purchase securities. The Fund's portfolio turnover rate is
calculated by dividing the lesser of purchases or sales of its portfolio
securities for the year by the monthly average value of the portfolio
securities. Securities with remaining maturities of one year or less at the date
of acquisition are excluded from the calculation.
Certain practices which may be employed by the Fund could result in
high portfolio turnover. For example, options on securities may be sold in
anticipation of a decline in the price of the underlying security (market
decline) or purchased in anticipation of a rise in the price of the underlying
security (market rise) and later sold.
MANAGEMENT OF THE FUND
Trustees
The Trustees and officers of the Trust are described in the Prospectus
under the caption "Management of the Fund -- Trustees and Officers." Colin C.
Ferenbach (age 64), Stephen Ely (age 58) and Denis M. Turko (age 59) each has a
business address at 655 Third Avenue, New York, New York 10017. The ages and
business addresses of the remaining Trustees are as follows: D. Euan Baird (age
60), Schlumberger Ltd., 277 Park Avenue, New York, New York 10172; William F.
Indoe (age 55), Sullivan & Cromwell, 125 Broad Street, New York,
21
<PAGE> 54
New York 10004; Robert E. Kaufmann (age 56), Spencer Stuart & Associates,
Financial Center, 695 East Main Street, Stamford, Connecticut 06901; and John F.
McNiff (age 55), Dover Corporation, 280 Park Avenue, New York, New York 10017.
The following table sets forth the compensation paid to the outside
Trustees of the Fund and Trust for the fiscal year ended October 31, 1997. No
employee of Haven or Sunstone or any of their affiliates receives any
compensation from the Fund or Trust for acting as an officer, Trustee or
employee of the Trust. Each Trustee who is not a director, officer or employee
of Haven, Sunstone or any of their affiliates receives an annual fee of $5,000,
and $500 for each meeting of the Trustees attended by the Trustee for services
as Trustee and is reimbursed for expenses incurred in connection with attendance
at meetings of Trustees. Trustees receive no pension or retirement benefits from
the Fund or Trust nor any compensation from any fund that (i) holds itself out
to investors as related to the Fund for purposes of investment and investor
services or (ii) has Haven, or an affiliated person of Haven, as its investment
adviser.
<TABLE>
<CAPTION>
Aggregate
Compensation
Name of Trustee from the Fund*
--------------- --------------
<S> <C>
D. Euan Baird $6,500
William F. Indoe $7,500
Robert E. Kaufmann $7,000
John F. McNiff $7,500
* Fiscal year ended October 31, 1997.
</TABLE>
Investment Adviser and Administrator
Haven serves as investment adviser to the Fund and PFPC serves as
administrator to the Fund pursuant to separate written agreements (the
"Investment Advisory Agreement" and the "Administration and Accounting Services
Agreement," respectively). The services provided by, and the fees payable by the
Fund to, Haven under the Investment Advisory Agreement and PFPC under the
Administration and Accounting Services Agreement are summarized in the
Prospectus.
22
<PAGE> 55
Pursuant to the Investment Advisory Agreement, Haven will use its best
efforts to provide to the Fund continuing and suitable investment programs
consistent with the investment objectives, policies and restrictions of the
Fund. It will (i) determine from time to time which securities shall be
purchased, sold or exchanged and what portion of the assets of the Fund shall be
held in the various securities and assets in which the Fund invests or in cash;
(ii) make decisions for the Fund with respect to foreign currency matters and
foreign exchange contracts, having regard to foreign exchange controls, if any;
(iii) make determinations as to the manner in which voting rights, subscription
rights, rights to consent to corporate action and any other rights pertaining to
the Fund's assets shall be exercised; (iv) advise the Trust in connection with
policy decisions to be made by the Trustees or any committee thereof with
respect to the Fund's investments and, as requested, furnish the Fund with
research, economic and statistical data in connection with its investments and
investment policies; (v) submit such reports relating to the valuation of the
Fund's securities as the Trustees or the administrator of the Fund may
reasonably request; (vi) place orders for the purchase, sale or exchange of
portfolio assets for the Fund's accounts with brokers or dealers selected by
Haven; provided, however, that in connection with the placing of such orders and
the selection of such brokers or dealers Haven shall seek to obtain execution
and pricing within the policy guidelines established by the Trustees and set
forth in the N-1A Registration Statement as in effect from time to time; (vii)
provide information in Haven's possession to the administrator of the Fund as
such administrator may request to maintain and preserve the records required by
the 1940 Act; (viii) obtain and evaluate such information relating to economies,
industries, businesses, securities markets and securities as Haven may deem
necessary or useful in the discharge of Haven's duties hereunder; (ix) from time
to time, or at any time requested by the Trustees, make reports to the Trustees
concerning Haven's performance of the foregoing services and furnish advice and
recommendations with respect to other aspects of the business and affairs of the
Fund; and (x) cooperate generally with the Trust and the Fund to provide
information necessary for the preparation of registration statements and
periodic reports to be filed with the Securities and Exchange Commission,
including post-effective amendments to the Form N-1A Registration Statement,
filings on Form N-SAR, periodic statements, reports to shareholders, shareholder
communications and proxy material furnished to holders of the Shares, filings
with state "blue sky" authorities and with the United States agencies
responsible for tax matters, and other reports and filings of like nature.
Custodian and Transfer Agent
PNC Bank, National Association ("PNC Bank") is custodian of the Fund's
assets pursuant to a custodian agreement (the "Custodian Services Agreement").
23
<PAGE> 56
Under the Custodian Services Agreement, PNC Bank (a) maintains a separate
account or accounts in the name of the Fund, (b) holds and transfers portfolio
securities on account of the Fund, (c) makes receipts and disbursements of money
on behalf of the Fund, (d) collects and receives all income and other payments
and distributions on account of the Fund's portfolio securities and (e) makes
periodic reports to the Trustees concerning the Fund's operations. PNC Bank is
authorized to select one or more banks or trust companies to serve as
sub-custodian on behalf of the Fund, provided that PNC Bank remains responsible
for the performance of all its duties under the Custodian Agreement and holds
the Fund harmless from the acts and omissions of any sub-custodian chosen by PNC
Bank.
PFPC serves as the Fund's transfer and dividend disbursing agent
pursuant to a Transfer Agency Services Agreement, under which PFPC (a) issues
and redeems Shares, (b) addresses and mails all communications by the Fund to
record owners of Shares, including reports to shareholders, dividend and
distribution notices and proxy material for its meetings of shareholders, (c)
maintains shareholder accounts, and (d) makes periodic reports to the Fund
concerning the Fund's operations. PFPC may, on 30 days' notice to the Fund,
assign its duties thereunder to any other affiliate of PNC Bank or PNC Bank
Corp.
Distribution and Other Related Agreements
Sunstone acts as the distributor of the Fund's Shares. Sunstone acts as
agent in selling Shares under the distribution agreement with the Trust, on
behalf of the Fund. The distribution agreement is renewable annually by the
Trustees (including a majority of its Trustees who are not interested persons of
the Trust or Sunstone), may be terminated on 60 days' notice by the Fund or by
Sunstone, and is automatically terminated upon assignment. The Fund also pays
Hewes Communications, Inc. ("Hewes") a monthly fee of $3,500 (exclusive of
out-of-pocket expenses) as compensation for the media relations services that
Hewes provides to the Fund under the Plan.
The Fund and or Sunstone have entered into agreements with Charles
Schwab & Co., Inc., Fidelity Brokerage Services, Inc., BHC Securities, Inc. and
National Investor Services Corp. (the "Other Distribution Plan Parties")
pursuant to which the Other Distribution Plan Parties (i) engage in activities
intended to result in the sales of the Fund's Shares and (ii) provide certain
shareholder services. During the fiscal year ended October 31, 1997, the Fund
paid distribution fees totaling $87,766 to Sunstone, commissions totaling $539
to selected broker-dealers, fees related to the printing and mailing of
prospectuses and other materials to other than
24
<PAGE> 57
current shareholders totaling $22,278, payments totaling $45,241 to Hewes, and
payments totaling $2,216 to Other Distribution Plan Parties.
Distribution Plan
As described in the Prospectus, the Fund has adopted a distribution
plan (the "Plan") pursuant to Rule 12b-1 under the Act. See "Management of the
Fund-- Distributor and Distribution Plan" in the Prospectus. The Plan was last
approved on June 3, 1997 by the affirmative vote of the Trustees and of the
non-interested Trustees who have no direct or indirect financial interest in the
Plan, cast in person at a meeting called for the purpose of approving the Plan.
The Plan provides for both the payment of a specified fee for
distribution and marketing services and the reimbursement of payments to
authorized selected broker-dealers and of out-of-pocket expenses incurred by
Sunstone. If the Plan were terminated by the Trustees and no successor plan were
adopted, the Fund would cease to make payments under the Plan to Sunstone and
Sunstone would be able to recover only the amount of any of its unreimbursed
expenditures.
Under the Plan, the officers will provide to the Trustees for their
review, and the Trustees will review at least quarterly, a written report of the
services provided and amounts expended under the Plan and the purposes for which
such services were performed and expenditures were made.
The Plan will continue in effect indefinitely, provided such
continuance is approved annually by a majority vote of the Trustees, including a
majority of the non-interested Trustees who have no direct or indirect financial
interest in the Plan. The Plan may not be amended to increase materially the
amount to be spent for the services described therein as to the Fund without
approval of a majority of the outstanding voting securities of the Fund. All
material amendments of the Plan must also be approved by the Trustees in the
manner described above. The Plan may be terminated at any time without payment
of any penalty by a vote of a majority of the non-interested Trustees or by vote
of a majority of the outstanding voting securities of the Fund. So long as the
Plan is in effect, the selection and nomination of non-interested Trustees shall
be committed to the discretion of the non-interested Trustees. The Trustees have
determined that in their judgment there is a reasonable likelihood that the Plan
will benefit the Fund and its shareholders.
25
<PAGE> 58
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
Prior to the consummation of the exchange described in the Prospectus
described under the caption, "The Exchange," Haven, a Delaware corporation,
owned beneficially and of record all of the Shares. Haven is controlled by its
managing directors, Messrs. Stephen Ely, Colin C. Ferenbach and Denis M. Turko.
The table below sets forth the percentage of outstanding Shares owned
of record and beneficially, as of January 31, 1998, by (i) each person known to
the Trust to own beneficially or of record more than 5% of the Shares and (ii)
all Trustees and executive officers as a group.
<TABLE>
<CAPTION>
SHARES OWNED Shares Owned
OF RECORD Beneficially
<S> <C> <C>
Saxon & Co. 10.7% 0.0%
c/o PNC Bank, NA
Box 7780
Philadelphia, Pennsylvania 19182
Thomas B. Walker, Jr. 16.2% 16.2%
4332 Belclaire
Dallas, Texas 75205
George E. Doty 5.7% 5.7%
61 Park Drive South
Rye, New York 10580
Donald R. Gant 8.8% 8.8%
Young's Road
New Vernon, New Jersey 07976
Peter G. Sachs 7.0% 7.0%
443 Webbs Hill Road
Stamford, Connecticut 06903
All current Trustees and 1.2% 1.3%
executive officers as a group
(7 persons)
</TABLE>
26
<PAGE> 59
SHARES OF BENEFICIAL INTERESTS AND OTHER SECURITIES
The Fund has one class of securities, i.e., shares of beneficial
interest with par value of $0.001, all of one class and having equal voting
rights. See "Additional Information - A Description of Shares" in the
Prospectus. The following description supplements information contained in the
Prospectus.
Generally, the Fund's shareholders are not personally liable for
obligations of the Trust or Fund under Delaware law. The Delaware Business Trust
Act (the "Delaware Act") provides that a shareholder of a Delaware business
trust shall be entitled to the same limitation of liability extended to
shareholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. However, no similar statutory or other
authority limiting business trust shareholder liability exists in many other
states. As a result, to the extent that the Fund or a shareholder is subject to
the jurisdiction of courts in those states, the courts may not apply Delaware
law, and may thereby subject the Fund's shareholders to liability. To guard
against this risk, the Declaration of Trust (i) contains a statement that the
Fund's shareholders shall be entitled to the same limitation of personal
liability extended to shareholders of private Delaware corporations for profit,
ii) contains an express disclaimer of shareholder liability to third parties
extending credit to, contracting with or having any claim against the Trust or
any Series thereof, for acts or obligations of the Fund and requires that notice
of such disclaimer be given in each agreement, obligation, and instrument
entered into as executed by the Fund or its Trustees and (iii) provides for
indemnification out of Fund property of any shareholder held personally liable
for the obligations of the Fund. Thus, the risk of a Fund shareholder incurring
financial loss beyond his or her investment because of shareholder liability is
limited to circumstances in which (1) a shareholder of a Delaware corporation
for profit would incur financial loss beyond his or her investment or (2)(a) a
court refused to apply Delaware law, (b) no contractual limitation of liability
was in effect and (c) the Fund itself would be unable to meet its obligations.
In light of Delaware law, the nature of the Fund's business, and the nature of
its assets, Haven believes that the risk of personal liability to a Fund
shareholder is remote.
No action may be brought by a shareholder on behalf of the Trust or the
Fund unless shareholders owning not less than 20% of the Trust or Fund, as the
case may be, join in the bringing of the action.
27
<PAGE> 60
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
Information on how to purchase and redeem Shares and how such Shares
are priced is included in the Prospectus.
In confirming that redemption instructions communicated by telephone
are genuine, PFPC will require the caller to provide caller identification
information that must match the account's registration information.
Under the 1940 Act, the Fund may suspend the right of redemption or
postpone the date of payment upon redemption for any period during which the
NYSE is closed, other than customary weekend and holiday closings, or during
which trading on the NYSE is restricted, or during which disposal or valuation
of portfolio securities is not reasonably practicable, or for such other periods
as the SEC may permit.
Although the Fund does not intend to make payment of redemption
proceeds in securities or other property (rather than cash), the Trustees have
reserved the right to make such in-kind payments when a shareholder elects to
redeem shares in-kind and when, in the Trustees' judgment and in light of their
fiduciary duties to all shareholders, the overall interests of the Fund's
shareholders would not be harmed. If a redemption is paid wholly or partly in
securities or other property, a shareholder would incur transaction costs in
disposing of the redemption proceeds. If the Fund were to make payment of
redemption proceeds in foreign securities, the redeeming Shareholder may
experience risks and costs due to, among other things, currency risk, market
risk, and added disposal costs. See "Investment Practices and Related Risk
Factors -- Foreign Securities" in the Prospectus.
ADDITIONAL INFORMATION CONCERNING TAXES
The discussion set out below of tax considerations generally affecting
the Fund and its shareholders is intended to be only a summary supplementing the
Prospectus and is not intended as a substitute for careful tax planning by
prospective shareholders.
The Fund intends to qualify for each fiscal year as a "regulated
investment company" under Subchapter M of the Code. As a regulated investment
company, the Fund will not be subject to U.S. Federal income tax on its income
and capital gains, if any, that it distributes to shareholders, provided it
distributes each taxable year at least 90% of its "investment company taxable
income," calculated without the deduc-
28
<PAGE> 61
tion for dividends paid, as determined for U.S. Federal income tax purposes
("net investment income"). Net investment income includes dividends, interest,
net short-term capital gains in excess of net long-term capital losses and any
capital loss carryovers from prior years, net of expenses, and net gain or loss
on debt securities and futures contracts on debt securities, to the extent
attributable to fluctuations in currency exchange rates, and, in certain
circumstances, net gain or loss on foreign currencies and foreign currency
forward contracts. Dividend income derived by a regulated investment company
from its investments is required to be taken into account for U.S. Federal
income tax purposes as of the ex-dividend date (rather than the payment date,
which generally is later). Accordingly, the Fund, in order to satisfy its
distribution requirements, may be required to make distributions based on
accrued but not yet received earnings.
To qualify under Subchapter M, the Fund must, among other things: (1)
derive at least 90% of its gross income from dividends, interest, payments with
respect to stock or securities loans, gains from the sale or other disposition
of stock or securities, and certain other related income, including, generally,
gains from options, futures and forward contracts and foreign currency gains
(under regulations which may be promulgated, foreign currency gains which are
not directly related to the Fund's principal business of investing in stocks or
securities may not be treated as qualifying income for this purpose); and (2)
diversify its holdings so that, at the end of each fiscal quarter of the Fund
(a) at least 50% of the market value of the Fund's assets is represented by
cash, U.S. government securities, securities of other regulated investment
companies, and other securities, with such other securities of any one issuer
qualifying, for purposes of this calculation, only if the Fund's investment is
limited to an amount not greater than 5% of the value of the Fund's total assets
and 10% of the outstanding voting securities of such issuer; and (b) not more
than 25% of the market value of the Fund's assets is invested in the securities
of any one issuer (other than U.S. government securities or securities of other
regulated investment companies). In meeting these requirements, the Fund may be
restricted in the utilization of certain of the investment techniques described
above and in the Fund's Prospectus.
The Fund's transactions, if any, in foreign currencies, forward
contracts, options and futures contracts (including options and forward
contracts on foreign currencies) and stock of "passive foreign investment
companies" will be subject to special provisions of the Code that, among other
things, may affect the character of gains and losses recognized by the Fund
(i.e., may affect whether gains or losses are ordinary or capital), accelerate
recognition of income to the Fund, defer Fund losses, cause the Fund to be
subject to hyperinflationary currency rules and impose additional charges in the
nature of interest. These rules could therefore affect the character, amount and
29
<PAGE> 62
timing of distributions to shareholders. These provisions also (1) will require
the Fund to mark-to-market certain types of its positions (i.e., treat them as
if they were closed out at the end of the Fund's fiscal year) and (2) may cause
the Fund to recognize income without receiving cash with which to pay dividends
or make distributions in amounts necessary to satisfy the distribution
requirements for avoiding income and excise taxes.
Shareholders electing to receive distributions in the form of
additional Shares will have a cost basis for federal income tax purposes in each
Share so received equal to the net asset value of a Share on the reinvestment
date.
Dividends paid by the Fund will ordinarily qualify for the
dividends-received deduction for corporations to the extent that they are
derived from dividends paid by domestic corporations. Distributions to
corporations of long-term capital gains are not eligible for the
dividends-received deduction.
Distributions by the Fund result in a reduction in the net asset value
of the Fund's Shares. Should a distribution reduce the net asset value below a
shareholder's cost basis, such distribution would nevertheless be taxable to the
shareholder as ordinary income or capital gain, even though, from an investment
standpoint, it may constitute a partial return of capital. In particular,
investors should be careful to consider the tax implications of buying Shares
just prior to a distribution. The price of Shares purchased at that time
includes the amount of the forthcoming distribution. Those purchasing just prior
to a distribution will then receive a partial return of capital upon the
distribution, which will nevertheless be taxable to them. Also, to the extent
securities of the Fund have appreciated when an investor purchases Shares of the
Fund, a future realization and distribution of such appreciation will be taxable
to the shareholders even though it may constitute, from an investor's
standpoint, a partial return of capital.
Upon the redemption, sale or exchange of Shares, a shareholder will
realize a taxable gain or loss depending upon the amount realized and the basis
in the Shares. Such gain or loss will be treated as capital gain or loss if the
Shares are capital assets in the shareholder's hands, and will be long-term or
short-term depending upon the shareholder's holding period for the Shares. Any
loss realized on a redemption or sale of Shares will be disallowed to the extent
new Shares are purchased, or received through reinvesting dividends and capital
gains distributions in the Fund, within the 61-day period beginning 30 days
before and ending 30 days after the date of the redemption or sale. In such a
case, the basis of the Shares acquired will be increased to reflect the
disallowed loss. Any loss realized by a shareholder on the sale of a Share
30
<PAGE> 63
held by the shareholder for six months or less will be treated for federal
income tax purposes as a long-term capital loss to the extent of any
distributions or deemed distributions of long-term capital gains received by the
shareholder with respect to such Share.
The Fund may be required to withhold for U.S. Federal income taxes 31%
of all distributions and redemption proceeds payable to shareholders who fail to
provide the Fund with their correct taxpayer identification number or to make
required certifications, or who have been notified by the Internal Revenue
Service that they are subject to backup withholding. Corporate shareholders and
other shareholders specified in the Code are or may be exempt from backup
withholding. The backup withholding tax is not an additional tax and may be
credited against a taxpayer's federal income tax liability.
Under the Code, gains or losses attributable to fluctuations in
exchange rates which occur between the time the Fund accrues interest or other
receivables, or accrues expenses or other liabilities, denominated in a foreign
currency, and the time the Fund actually collects such receivables, or pays such
liabilities, generally are treated as ordinary income or ordinary loss.
Similarly, on disposition of debt securities denominated in a foreign currency,
gains or losses attributable to fluctuations in the value of foreign currency
between the date of acquisition of the security and the date of disposition are
also treated as ordinary gain or loss. These gains or losses may increase or
decrease the amount of the Fund's income to be distributed to its shareholders
as ordinary income.
The Fund believes that it may constitute a personal holding company; as
such, it would be subject to additional taxes with respect to its net investment
income not distributed to shareholders within applicable time periods. The Fund
intends to distribute all of its net investment income within such time periods
so as not to be subject to such taxes. With respect to any such income not so
distributed, it would be subject to corporate taxation at the highest rate,
currently 35%, generally applicable to income of corporations, rather than at
the graduated corporate tax rates that would otherwise apply; it would also be
subject to an additional tax, at the rate of 39.6%, on its "undistributed
personal holding company income," which, in general, would be its undistributed
net investment income (not including any short-term capital gains) reduced by
the federal corporate tax paid thereon.
The foregoing discussion of U.S. Federal income tax law relates solely
to the application of that law to U.S. persons, i.e., U.S. citizens and
residents and U.S. corporations, partnerships, trusts and estates. Each
shareholder who is not a U.S.
31
<PAGE> 64
person should consider the U.S. and foreign tax consequences of ownership of
Shares, including the likelihood that such a shareholder may be subject to a
U.S. withholding tax at a rate of 30% (or at a lower rate under an applicable
income tax treaty) on distributions constituting ordinary income.
Shareholders are advised to consult their own tax advisers with respect
to the particular federal, state, and local tax consequences to them of an
investment in the Fund.
DETERMINATION OF PERFORMANCE DATA
The average annual total return is determined by multiplying a
hypothetical initial purchase order of $1,000 by the average annual compound
rate of return (including capital appreciation/depreciation, and distributions
paid and reinvested) for the stated period and analyzing the result. The
calculation assumes that all distributions are reinvested at net asset value on
the reinvestment dates during the period.
For the period from June 23, 1994 (the date of the Fund's commencement)
through October 31, 1997, the Fund had a cumulative total return of 93.89%. The
following table shows the combined average annual total returns of the Fund and
HCM Partners, L.P., a limited partnership for which Haven acted as investment
adviser and three of the Fund's Trustees acted as general partners (the
"Partnership"), for the periods ended October 31, 1997:
<TABLE>
<CAPTION>
One Five Ten
Year Years Years
---- ----- -----
<S> <C> <C> <C>
The Haven Fund and HCM Partners, L.P. 24.9% 17.6% 15.7%
</TABLE>
The Fund's total return, and the combined total return of the Fund and
the Partnership, may be compared to the Consumer Price Index and various
domestic and foreign securities and mutual fund indices, for example: Standard &
Poor's Index of 400 Common Stocks, Standard & Poor's Index of 500 Common Stocks,
Lipper Growth Fund Index, Morningstar Growth Average, the Wilshire 4500 Stock
Index and the Dow Jones Industrial Average. The Fund's total return, and the
combined total return of the Fund and the Partnership, and comparisons with
these indices may be used in advertisements and in information furnished to
present or prospective shareholders.
32
<PAGE> 65
Information used in advertisements and in materials furnished to
present or prospective shareholders may include statistics, data and performance
studies prepared by independent organizations (e.g., Lipper Analytical Services,
Inc., Morningstar, Inc., Value Line, Ibbotson Associates, Standard & Poor's
Corporation, Merrill Lynch, Pierce, Fenner & Smith, Inc., Bloomberg, L.P., Dow
Jones & Company, Inc. and The Federal Reserve Board) or included in various
publications (e.g., The Wall Street Journal, Barron's and The Decade: Wealth of
Investments in U.S. Stocks, Bonds, Bills & Inflation) reflecting the investment
performance or return achieved by various classes and types of investments
(e.g., common stocks, small company stocks, long-term corporate bonds, long-term
government bonds, intermediate-term government bonds, U.S. Treasury bills) over
various periods of time. This information may be used to illustrate the benefits
of long-term investments in common stocks.
From time to time, information about the allocation and holdings of
investments in the Fund may be included in advertisements and other material
furnished to present and prospective shareholders.
From time to time, evaluations of the Fund's performance and the
combined performance of the Fund and the Partnership made by independent
sources, such as Lipper Analytical Services, Inc., CDA/Weisenberger and
Morningstar, Inc. may be used in advertisements and in information furnished to
present or prospective shareholders.
Information used in advertisements and materials furnished to present
or prospective shareholders may include examples and performance illustrations
of the cumulative change in various levels of investments in the Fund, and in
the Fund and the Partnership, for various periods of time and at various prices
per share. Such examples and illustrations may assume that all dividends and
capital gain distributions are reinvested in additional Shares and may also show
separately the value of Shares acquired from such reinvestments as well as the
total value of all Shares acquired for such investments and reinvestments. Such
information may also include statements or illustrations relating to the
appropriateness of types of securities and/or mutual funds which may be employed
to meet specific financial goals, such as (1) funding retirement, (2) paying for
children's education, and (3) financially supporting aging parents.
33
<PAGE> 66
AUDITORS AND COUNSEL
The Fund's independent public accountants are Coopers & Lybrand L.L.P.,
with principal offices at 2400 Eleven Penn Center, Philadelphia, Pennsylvania
19103. Coopers & Lybrand L.L.P. provides audit services, tax return assistance
and consultation with respect to the preparation of filings with the SEC.
Debevoise & Plimpton serves as counsel to the Fund and to Haven.
FINANCIAL STATEMENTS
The financial statements for the fiscal year ended October 31, 1997 and
the report of Coopers & Lybrand L.L.P. on such annual financial statements
contained in the Fund's Annual Report to Shareholders for the year ended October
31, 1997 (the "Annual Report") are incorporated herein by reference to such
financial statements and report in reliance upon the authority of Coopers &
Lybrand L.L.P. as experts in auditing and accounting. Additional copies of the
Fund's Annual Report may be obtained at no charge by telephoning Sunstone at the
telephone number appearing on the front page of this Statement of Additional
Information.
34
<PAGE> 67
APPENDIX
DESCRIPTION OF RATINGS
Commercial Paper Ratings
Commercial paper rated A-1 by Standard and Poor's Corporation ("S&P")
indicates that the degree of safety regarding timely payment is either
overwhelming or very strong. Those issues determined to possess overwhelming
safety characteristics are denoted A-1+. Capacity for timely payment on
commercial paper rated A-2 is strong, but the relative degree of safety is not
as high as for issues designated A-1.
The rating Prime-1 is the highest commercial paper rating assigned by
Moody's Investors Service, Inc. ("Moody's"). Issuers rated Prime-1 (or related
supporting institutions) are considered to have a superior capacity for
repayment of short-term promissory obligations. Issuers rated Prime-2 (or
related supporting institutions) are considered to have a strong capacity for
repayment of short-term promissory obligations. This will normally be evidenced
by many of the characteristics of issuers rated Prime-1 but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternative liquidity is maintained.
Corporate Bond Ratings
The following summarizes the ratings used by S&P for corporate bonds:
AAA - This is the highest rating assigned by S&P to a debt obligation
and indicates an extremely strong capacity to pay interest and repay principal.
AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from AAA issues only in small degree.
A - Principal and interest payments on bonds in this category are
regarded as safe. Debt rated A has a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher-rated
categories.
35
<PAGE> 68
To provide more detailed indications of credit quality, the ratings of
"AA" and "A" may be modified by the addition of a plus or minus sign to show
relative standing within this major rating category.
The following summarizes the ratings used by Moody's for corporate
bonds:
Aaa - Bonds that are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa - Bonds that are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa Securities.
A - Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium-grade obligations. Factors
giving security to principal and interest are considered adequate, but elements
may be preset which suggest a susceptibility to impairment sometime in the
future.
Moody's applies numerical modifiers (1, 2 and 3) with respect to the
bonds rated "Aa" and "A". The modifier 1 indicates that the bond being rated
ranks in the higher end of its generic rating category; the modifier 2 indicates
a mid-range ranking; and the modifier 3 indicates that the bond ranks in the
lower end of its generic rating category.
36
<PAGE> 69
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
Part A - Financial Highlights for the period June 23,
1994 (commencement of operations) to October 31, 1997.
Part B - Statement of Net Assets as of October 31, 1997;
Statement of Operations for the year then ended; and
Statement of Changes in Net Assets for each of the
period ended October 31, 1996 and the year ended October
31, 1997.
(b) Exhibits:
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
- ----------- ----------------------
<S> <C>
1 Agreement and Declaration of Trust of the Registrant
2 By-Laws of the Registrant
3 Not Applicable
4 Not Applicable
5 Form of Investment Advisory Agreement
6(a)* Distribution Agreement
</TABLE>
- ------------------------------
* Previously filed on February 7, 1997.
<PAGE> 70
<TABLE>
<S> <C>
(b)* Service Agreement between Sunstone, on behalf of the
Fund, and Jack White & Company
(b) Form of Standard-Broker Dealer Agreement for the Sale
of Shares of Registrant
(b) Services Agreement with Fidelity Brokerage Services,
Inc.
(b) Retail Services Agreement with Charles Schwab & Co.,
Inc.
(b) No Transaction Fee Fund Servicing Agreement with
National Investor Services Corp.
(b) Letter Agreement between Hewes Communications, Inc. and
Registrant
7 Not Applicable
8(a) Form of Custodian Services Agreement
(a) Fee Letter regarding Custodian Services Fees
(b) Sub-Custodian Agreement
9(a) Form of Transfer Agency Services Agreement
(a) Fee Letter regarding Transfer Agency Services Fees
(b) Form of Administration and Accounting Services Agreement
(b) Fee Letter regarding Administration and Accounting
Services Fees
</TABLE>
- ------------------------------
* Previously filed on February 28, 1996.
2
<PAGE> 71
<TABLE>
<S> <C>
10 (a) Opinion and consent of Debevoise & Plimpton
(b) Opinion and consent of Richards, Layton & Finger
11 Consent of Coopers & Lybrand L.L.P.
12 Not Applicable
13 Form of Subscription Agreement
14* IRA Disclosure Statement and Custodial Account Agreement
15 Distribution Plan
16 Cumulative Total Return Computation
17 Financial Data Schedule
18 Not Applicable
</TABLE>
Item 25. Persons Controlled by or Under Common Control
with Registrant
Not applicable.
Item 26. Number of Holders of Securities
<TABLE>
<CAPTION>
Number of Record Holders
Title of Class as of January 31, 1998
-------------- ----------------------
<S> <C>
Shares of beneficial interest 420
(Par value $0.001)
</TABLE>
- ------------------------------
* Previously filed on February 7, 1997.
3
<PAGE> 72
Item 27. Indemnification
The Agreement and Declaration of Trust of The Haven Capital Management
Trust (the "Trust") provides the following limitations on liability and
indemnifications to Trustees and shareholders (including shareholders who may,
as a result of holding more than 5% of the shares of beneficial interest of the
Fund (the "Shares"), be deemed to be "affiliated persons"):
Section 1.2(d). "Covered Person" shall mean each Trustee,
officer, employee, agent (including, without limitation, any
Investment Adviser, Distributor, custodian or transfer agent or any
director, officer or employee thereof) of the Trust or any Series,
when acting in such capacity;
Section 3.13. Standard of Care of Trustees. The exercise by
the Trustees of their powers and discretion hereunder and the
construction in good faith by the Trustees of the meaning or effect of
any provision of this Declaration shall be binding upon everyone
interested. No Covered Person shall be liable to the Trust or the
Shareholders except for its own willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of its office.
To the extent that, at law or in equity, a Covered Person
has duties (including fiduciary duties) and liabilities relating
thereto to the Trust, a Shareholder or a Trustee, any such Covered
Person acting under this Declaration or By-Laws shall not be liable to
the Trust, any Shareholder or any Trustee for such Covered Person's
good faith reliance on the provisions of this Declaration or By-Laws.
The provisions of this Declaration or By-Laws, to the extent that they
restrict the duties and liabilities of any such Covered Person
otherwise existing at law or in equity, are agreed by the Trustees and
the Shareholders to replace such other duties and liabilities of such
Covered Person.
Whenever in this Declaration or By-Laws, the Trustees are
permitted or required to make a decision (i) in their "sole discretion"
or under a similar grant of authority or latitude, the Trustees shall
be entitled to consider only such interests and factors as they desire,
whether reasonable or unreasonable, and, except as otherwise prohibited
4
<PAGE> 73
under the 1940 Act, may consider their own interests or (ii) in their
"good faith" or under another express standard, the Trustees shall act
under such express standard and shall not be subject to any other or
different standards imposed by this Declaration, the By-laws, law or
any other agreement contemplated herein, except as otherwise required
under the 1940 Act. Each Shareholder and Trustee hereby agrees that any
standard of care or duty imposed in this Declaration or the By-Laws or
any other agreement contemplated herein or under the Delaware Act or
any other applicable law, rule or regulation shall be modified, waived
or limited in each case as required to permit the Trustees to act under
this Declaration or the By-Laws or any other agreement contemplated
herein and to make any decision pursuant to the authority prescribed in
this Declaration or the By-Laws.
Section 5.1. No Personal Liability of Shareholders or
Covered Persons. The Shareholders shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of
the State of Delaware. No Covered Person shall have any power to bind
personally any Shareholder or to call upon any Shareholder for the
payment of any sum of money or assessment whatsoever other than such as
the Share holder may at any time personally agree to pay by way of
subscription for any Shares or otherwise. All Persons extending credit
to, contracting with or having any claim against the Trust or any
Series thereof shall look only to the assets of the Trust or of such
Series, as the case may be, for payment under such credit, contract or
claim, and neither the Shareholders nor the Trustees, nor any of the
Trust's officers, employees or agents, whether past, present or future,
shall be personally liable therefor. No Covered Person shall be subject
to any personal liability whatsoever to any person other than the Trust
or the Shareholders in connection with the Trust Property or the acts,
obligations or affairs of the Trust or any Series thereof. The Trustees
shall not be responsible or liable to the Trust or the Shareholders for
any neglect or wrongdoing of any officer, employee or agent (including,
without limitation, any Investment Adviser, Distributor, custodian, or
transfer agent) of the Trust or any Series thereof, nor shall any
Trustee be responsible or liable for the act or omission of any other
Trustee.
5
<PAGE> 74
Section 5.3. Indemnification of Covered Persons. To the
fullest extent permitted by law, the Trust shall indemnify and hold
harmless any Covered Person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative
(including any action by or in the right of the Trust) by reason of any
action or omission, or any alleged act or omission, arising out of such
Covered Person's activities as a Covered Person if such activities were
performed in good faith and were reasonably believed by such Covered
Person to be in or not opposed to the best interests of the Trust,
against losses, damages, or expenses for which such Covered Person has
not otherwise been reimbursed (including attorneys' fees, judgments,
fines and amounts paid in settlement) actually and reasonably incurred
by such Covered Person in connection with such action, suit or
proceeding, so long as such Covered Person was not liable for or guilty
of gross negligence, willful misfeasance, bad faith or reckless
disregard of such Covered Person's duties with respect to such acts or
omissions and, with respect to any criminal proceeding, had not
reasonable cause to believe his conduct was unlawful. Notwithstanding
the foregoing, absent a judicial or administrative determination that a
Covered Person seeking indemnification was not liable on the merits or
guilty of disabling conduct within the meaning of Section 17(h) of the
1940 Act ("Disabling Conduct"), all determinations that a Covered
Person did not engage in Disabling Conduct shall be based upon a review
of the facts, by (a) independent legal counsel in a written opinion or
(b) if a quorum of Trustees who are neither "interested persons" of the
Trust or Series, as the case may be, as defined in Section 2(a)(19) of
the 1940 Act, nor parties to the proceeding ("Disinterested, Non-Party
Trustees") may be obtained, a vote of a majority of such quorum.
Notwithstanding anything herein to the contrary, if any matter that is
the subject of indemnification hereunder relates only to one Series (or
to more than one but not all of the Series of the Trust), then the
indemnity shall be paid only out of the assets of the affected Series.
The Trustees may make advance payments out of the assets
of the Trust or, if appropriate, of the affected Series in connection
with the expense of defending any action with respect to which
indemnification might be sought under this Section 5.3. The indemnified
Covered Person shall give a written undertaking to reimburse the Trust
or the Series, as the case may be, in the event it is subsequently
6
<PAGE> 75
determined that it is not entitled to such indemnification and (A) the
indemnified Covered Person shall provide security for its undertaking,
(B) the Trust shall be insured against losses arising by reason of
lawful advances, or (C) a majority of a quorum of Disinterested,
Non-Party Trustees or an independent legal counsel in a written opinion
shall determine, based on a review of readily available facts (as
opposed to a full trial-type inquiry), that there is reason to believe
that the indemnitee ultimately will be found entitled to
indemnification. The rights accruing to any Covered Person under these
provisions shall not exclude any other right to which it may be
lawfully entitled and shall inure to the benefit of its heirs,
executors, administrators or other legal representatives.
Section 5.4. Indemnification of Shareholders. In case any
Shareholder or former Shareholder shall be held to be personally liable
solely by reason of his or her being or having been a Shareholder and
not because of acts or omissions or for some other reason, the
Shareholder or former Shareholder (or his or her heirs, executors,
administrators or other legal representatives or in the case of a
corporation or other entity, its corporate or other general successor)
shall be entitled out of the assets of the Series of which such
Shareholder held Shares, to be held harmless from and indemnified
against all loss and expense, including legal expenses reasonably
incurred, arising from such liability. The rights accruing to a
Shareholder under this Section 5.4 shall not exclude any other right to
which such Shareholder may be lawfully entitled, nor shall anything
contained herein restrict the right of the Trust or any Series thereof
to indemnify or reimburse a Shareholder in any appropriate situation
even though not specifically provided herein.
Section 11.5. Provisions in Conflict with Law or
Regulations. (a) The provisions of this Declaration are severable, and
if the Trustees shall determine, with the advice of counsel, that any
of such provisions is in conflict with requirements of the 1940 Act,
would be inconsistent with any of the conditions necessary for
qualification of the Trust as a regulated investment company under the
Code or is inconsistent with other applicable laws and regulations,
such provision shall be deemed never to have constituted a part of this
Declaration, provided that such determination shall not affect any of
the remaining provisions of this Declaration or render invalid or
improper any action taken or omitted prior to such determination.
7
<PAGE> 76
(b) If any provision of this Declaration shall be
held invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such
jurisdiction and shall not in any manner affect such provision in any
other jurisdiction or any other provision of this Declaration in any
jurisdiction.
The By-Laws of Haven Capital Management, Inc., the Fund's
investment adviser, provides the following indemnification in its Section 6.01:
The Corporation shall, to the fullest extent permitted by applicable
law from time to time in effect, indemnify any and all persons who may
serve or who have served at any time as Directors or officers of the
Corporation, or who at the request of the Corporation may serve or at
any time have served as Directors or officers of another corporation
(including subsidiaries of the Corporation) or of any partnership,
joint venture, trust or other enterprise, from and against any and all
of the expenses, liabilities or other matters referred to in or covered
by said law. Such indemnification shall continue as to a person who has
ceased to be Director or officer and shall inure to the benefit of the
heirs, executors and administrators of such a person. The Corporation
may also indemnify any and all other person whom it shall have power to
indemnify under any applicable law from time to time in effect to the
extent authorized by the Board of Directors and permitted by such law.
The indemnification provided by this Article shall not be deemed
exclusive of any other rights to which any person may be entitled under
any provision of the Certificate of Incorporation, other By-Law,
agreement, vote of stockholders or disinterested Directors, or
otherwise, both as to action in his official capacity and as to action
in another capacity while holding such office. [Section 145.]
Insofar as indemnification for liability arising under the
Securities Act of 1933, as amended (the "1933 Act"), may be permitted to
Trustees, officers and controlling persons of Registrant pursuant to the
foregoing provisions, or otherwise, Registrant has been advised that in the
opinion of the Securities and Exchange Commission ("SEC") such indemnification
is against public policy as expressed in the 1933 Act and is, therefore,
unenforceable. In the event that a claim for indemnifica tion against such
liabilities (other than the payment by Registrant of expenses incurred or paid
by Trustee, officer or controlling person of Registrant in the successful
defense of any action, suit or proceeding) is asserted by such Trustee, officer
or controlling person in connection with the securities being registered,
Registrant will, unless in the opinion
8
<PAGE> 77
of its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the 1933 Act and will be governed by
the final adjudication of such issue.
Item 28. Business and Other Connections of
Investment Adviser
Haven acts as investment adviser to Registrant. Haven renders
investment advice to a variety of individual and institutional clients. Set
forth below is a list of officers and directors of Haven, together with
information as to their other business, profession, vocation or employment of a
substantial nature during the past two years.
9
<PAGE> 78
<TABLE>
<CAPTION>
Position/Office Other
Name with Haven* Business, etc.
- ---- ----------- --------------
<S> <C> <C>
Stephen Ely Managing Director and Treasurer None
Colin C. Ferenbach Managing Director and Chairman None
Denis M. Turko Managing Director and Secretary None
</TABLE>
- ---------------------
* Address: 655 Third Avenue, New York, New York 10017.
Item 29. Principal Underwriters
(a) Sunstone Distribution Services, LLC ("Sunstone") serves as
principal underwriter for Registrant. Sunstone acts as an underwriter for:
The Northern Funds
First Omaha Funds, Inc.
The Green Century Funds
The Marsico Investment Fund
(b) To the best of Registrant's knowledge, the executive
officers of Sunstone, distributor for Registrant, are as follows:
<TABLE>
<CAPTION>
Name and Principal Business Address Positions and Offices with Sunstone
- ----------------------------------- -----------------------------------
<S> <C>
Miriam M. Allison President and Member
207 E. Buffalo Street
Suite 400
Milwaukee, WI 53202
Daniel S. Allison Secretary and Member
207 E. Buffalo Street
Suite 400
Milwaukee, WI 53202
</TABLE>
10
<PAGE> 79
<TABLE>
<S> <C>
Mary M. Tenwinkel Vice President
207 E. Buffalo Street
Suite 400
Milwaukee, WI 53202
</TABLE>
(c) Commissions and compensation paid to principal underwriters
who were not affiliated persons of the Registrant, or affiliated persons of such
an affiliated person, during the fiscal year ended October 31, 1997 were as
follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4) (5)
Net Underwriting Compensation on
Name of Principal Discounts and Redemption and Brokerage Other
Underwriter Commissions Repurchase Commissions Compensation
----------- ----------- ---------- ----------- ------------
<S> <C> <C> <C> <C>
Sunstone Distribution Services, LLC $0 $0 $0 $87,766
====================================================================================================================================
</TABLE>
Item 30. Location of Accounts and Records
(1) The Haven Capital Management Trust
c/o Haven Capital Management, Inc.
655 Third Avenue
New York, New York 10017
(Agreement and Declaration of Trust,
By-Laws and minute books of the Trust)
(2) PFPC Inc.
103 Bellevue Parkway
Wilmington, Delaware 19809
(records relating to its functions as administrator)
(3) PFPC Inc.
103 Bellevue Parkway
Wilmington, Delaware 19809
(records relating to its functions as transfer and dividend
disbursing agent)
(4) PNC Bank, National Association
Broad and Chestnut Streets
Philadelphia, Pennsylvania 19101
(records relating to its functions as custodian)
11
<PAGE> 80
(5) Sunstone Distribution Services, LLC
207 East Buffalo Street, Suite 400
Milwaukee, Wisconsin 53202
(records relating to its functions as principal underwriter)
(6) Haven Capital Management, Inc.
655 Third Avenue
New York, New York 10017
(records relating to its functions as investment adviser)
Item 31. Management Services
Not applicable.
Item 32. Undertaking
(a) Since the Registrant does not intend to hold annual
shareholder meetings, Registrant hereby undertakes to assist in shareholder
communications in a manner consistent with the requirements of Section 16(c) of
the Investment Company Act of 1940, as amended.
(b) Registrant hereby undertakes to furnish each person to whom
a prospectus is delivered a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.
12
<PAGE> 81
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, Registrant certifies that it meets all the
requirements for effectiveness of this Post-Effective Amendment No. 8 pursuant
to Rule 485(b) under the Securities Act of 1993 and has duly caused this
Post-Effective Amendment No. 8 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York,
State of New York, on the 26th day of February, 1998.
THE HAVEN CAPITAL
MANAGEMENT TRUST
By: /s/ Colin C. Ferenbach
------------------------
Colin C. Ferenbach
President
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 date indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Colin C. Ferenbach President and Trustee (Chief February 26, 1998
- --------------------------- Executive Officer)
Colin C. Ferenbach
/s/ Stephen Ely Treasurer, Secretary and February 26, 1998
- --------------------------- Trustee (Chief Financial
Stephen Ely Officer)
/s/ Denis M. Turko Vice President and Trustee February 26, 1998
- ---------------------------
Denis M. Turko
/s/ D. Euan Baird* Trustee February 26, 1998
- ---------------------------
D. Euan Baird
/s/ William F. Indoe* Trustee February 26, 1998
- ---------------------------
William F. Indoe
/s/ Robert E. Kaufmann* Trustee February 26, 1998
- ---------------------------
Robert E. Kaufmann
/s/ John F. McNiff* Trustee February 26, 1998
- ---------------------------
John F. McNiff
* By:/s/ Colin C. Ferenbach
----------------------
Colin C. Ferenbach
Attorney-in-fact**
</TABLE>
- ------------------------------------
** Pursuant to the power of attorney filed as part of the signature page to
Pre-Effective Amendment No. 1 to the Registration Statement on Form N-1A,
No. 33-76670, filed May 25, 1994.
13
<PAGE> 82
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Page Number
in Sequential
Exhibit Numbering
No. Description System
--- ----------- ------
<S> <C> <C>
1 Agreement and Declaration of Trust of the Registrant
2 By-Laws of the Registrant
5 Form of Investment Advisory Agreement
6(a)* Distribution Agreement
(b)** Service Agreement between Sunstone Financial Group, Inc., on behalf of
the Fund, and Jack White & Company
(b) Form of Standard-Broker Dealer Agreement for the Sale of Shares of
Registrant
(b) Services Agreement with Fidelity Brokerage Services, Inc.
(b) Retail Services Agreement with Charles Schwab & Co., Inc.
(b) No Transaction Fee Fund Servicing Agreement with National Investor
Services Corp.
(b) Letter Agreement between Hewes Communications, Inc. and Registrant
8(a) Form of Custodian Services Agreement
(a) Fee Letter regarding Custodian Services Fees
(b) Sub-Custodian Custody Agreement
9(a) Form of Transfer Agency Services Agreement
(a) Fee Letter regarding Transfer Agency Services Fees
(b) Form of Administration and Accounting Services Agreement
(b) Fee Letter regarding Administration and Accounting Services Fees
10(a) Opinion and consent of Debevoise & Plimpton
(b) Opinion and consent of Richards, Layton & Finger
11 Consent of Coopers & Lybrand L.L.P.
</TABLE>
- --------------------------------
* Previously filed on February 7, 1997.
** Previously filed on February 28, 1996.
<PAGE> 83
<TABLE>
<CAPTION>
Page Number
in Sequential
Exhibit Numbering
No. Description System
--- ----------- ------
<S> <C> <C>
13 Form of Subscription Agreement
14* IRA Disclosure Statement and Custodial Account Agreement
15 Distribution Plan
16 Cumulative Total Return Computation
17 Financial Data Schedule
</TABLE>
2
<PAGE> 1
EXHIBIT 99.B1
Declaration of Trust
AGREEMENT AND DECLARATION OF TRUST
OF
THE HAVEN CAPITAL MANAGEMENT TRUST
a Delaware Business Trust
Dated as of
March 17, 1994
<PAGE> 2
TABLE OF CONTENTS
Page
----
ARTICLE I NAME AND DEFINITIONS..................................... 1
Section 1.1. Name..................................................... 1
Section 1.2. Definitions.............................................. 2
(a) "By-Laws"....................................... 2
(b) "Code".......................................... 2
(c) "Commission" and "Principal
Underwriter" .................................. 2
(d) "Covered Person"................................ 2
(e) "Declaration.................................... 2
(f) "Delaware Act".................................. 2
(g) "Distributor"................................... 2
(h) "Interested Person"............................. 3
(i) "Investment Adviser"............................ 3
(j) "Majority Shareholder Vote"..................... 3
(k) "1940 Act"...................................... 3
(l) "Person"........................................ 3
(m) "Series"........................................ 3
(n) "Shareholder"................................... 4
(o) "Shares".........................................4
(p) "Trust"......................................... 4
(q) "Trust Property"................................ 4
(r) "Trustees"...................................... 4
ARTICLE II PURPOSE OF TRUST......................................... 4
ARTICLE III TRUSTEES................................................. 5
Section 3.1. Powers................................................... 5
Section 3.2. Legal Title............................................. 11
Section 3.3. Number of Trustees; Term of Office...................... 12
Section 3.4. Election of Trustees.................................... 12
Section 3.5. Resignation and Removal................................. 12
Section 3.6. Vacancies............................................... 13
Section 3.7. Committees; Delegation.................................. 14
Section 3.8. Quorum; Voting.......................................... 15
i
<PAGE> 3
Page
----
Section 3.9. Action Without a Meeting; Participation by
Conference Telephone.................................... 15
Section 3.10. By-Laws................................................. 15
Section 3.11. No Bond Required........................................ 15
Section 3.12. Reliance on Experts..................................... 15
Section 3.13. Standard of Care of Trustees............................ 16
ARTICLE IV CONTRACTS............................................... 17
Section 4.1. Distribution Contracts.................................. 17
Section 4.2. Investment Advisory Contracts........................... 18
Section 4.3. Affiliations of Trustees or Officers.................... 18
ARTICLE V LIMITATION OF LIABILITY; INDEMNIFICATION................ 19
Section 5.1. No Personal Liability of Shareholders or
Covered Persons......................................... 19
Section 5.2. Execution of Documents; Notice; Apparent
Authority............................................... 20
Section 5.3. Indemnification of Covered Persons...................... 20
Section 5.4. Indemnification of Shareholders......................... 22
ARTICLE VI SHARES OF BENEFICIAL INTEREST........................... 22
Section 6.1. Beneficial Interest..................................... 22
Section 6.2. Series Designation...................................... 23
Section 6.3. Series Shares, Assets, Liabilities and
Expenses................................................ 24
(a) Series Shares.................................. 24
(b) Series Assets.................................. 24
(c) Series Liabilities and Expenses................ 25
Section 6.4. Termination of a Series................................. 26
Section 6.5. Rights of Shareholders.................................. 26
Section 6.6. Business Trust Only..................................... 27
Section 6.7. Issuance of Shares...................................... 27
(a) General........................................ 27
(b) Price.......................................... 27
(c) Acquisition of Assets.......................... 27
(d) Fractional Shares.............................. 28
Section 6.8. Register of Shares...................................... 28
Section 6.9. Share Certificates...................................... 28
ii
<PAGE> 4
Page
----
Section 6.10. Transfer of Shares...................................... 29
Section 6.11. Voting Powers........................................... 29
Section 6.12. Meetings of Shareholders................................ 30
Section 6.13. Action Without a Meeting................................ 31
Section 6.14. Quorum and Required Vote................................ 31
Section 6.15. Additional Provisions................................... 31
Section 6.16. Removal of Trustees by Shareholders..................... 32
Section 6.17. Derivative Suits........................................ 32
ARTICLE VII REDEMPTION AND REPURCHASE OF SHARES..................... 32
Section 7.1. Redemption of Shares.................................... 32
Section 7.2. Redemption Price........................................ 32
Section 7.3. Payment................................................. 33
Section 7.4. Effect of Suspension of Right of
Redemption.............................................. 33
Section 7.5. Repurchase by Agreement................................. 33
Section 7.6. Suspension of Right of Redemption....................... 34
Section 7.7. Involuntary Redemption of Shares;
Disclosure of Holding................................... 34
ARTICLE VIII DETERMINATION OF NET ASSET VALUE;
DISTRIBUTIONS........................................... 35
Section 8.1. By Whom Determined...................................... 35
Section 8.2. When Determined......................................... 36
Section 8.3. Calculation of Net Asset Value Per Share
....................................................... 36
Section 8.4. Interim Determinations.................................. 36
Section 8.5. Maintenance of Constant Net Asset Value
Per Share............................................... 36
Section 8.6. Outstanding Shares...................................... 37
Section 8.7. Distributions to Shareholders........................... 38
ARTICLE IX DURATION; TERMINATION OF TRUST;
AMENDMENT; MERGERS, ETC. ............................... 39
Section 9.1. Duration and Termination................................ 39
Section 9.2. Amendment Procedure..................................... 40
Section 9.3. Merger, Consolidation and Sale of Assets................ 41
iii
<PAGE> 5
Page
----
Section 9.4. Incorporation........................................... 41
ARTICLE X REPORTS TO SHAREHOLDERS................................. 42
ARTICLE XI MISCELLANEOUS........................................... 42
Section 11.1. Registered Agent; Registered Office..................... 42
Section 11.2. Governing Law........................................... 43
Section 11.3. Counterparts............................................ 44
Section 11.4. Reliance by Third Parties............................... 44
Section 11.5. Provisions in Conflict with Law or
Regulations............................................. 44
Section 11.6. Section Headings; Interpretation........................ 45
Section 11.7. Use of the Name "Haven"................................. 45
Section 11.8. Integration............................................. 45
iv
<PAGE> 6
AGREEMENT AND DECLARATION OF TRUST
OF
THE HAVEN CAPITAL MANAGEMENT TRUST
AGREEMENT AND DECLARATION OF TRUST made as of March 17, 1994 by and
among the individuals executing this Declaration and Agreement of Trust as
Trustees and the hold ers from time to time of the shares of beneficial interest
issued hereunder.
WHEREAS, the Trustees (this and certain other capitalized terms used
herein having the meanings specified in Section 1.2 hereof) desire to establish
a business trust for the investment and reinvestment of funds contributed
thereto and the carrying on of business and dividing the gains therefrom; and
WHEREAS, the Trustees desire that the beneficial interest in the trust
assets be divided into shares of bene ficial interest, which may, at the sole
discretion of the Trustees, be divided into separate series, as hereinafter
provided;
NOW, THEREFORE, the Trustees hereby declare that all money and property
contributed to the trust established hereunder and all proceeds thereof shall be
held and managed in trust for the pro rata benefit of the holders, from time to
time, of the shares of beneficial interest issued here under and subject to the
provisions hereof.
ARTICLE I
NAME AND DEFINITIONS
Section 1.1. Name. The name of the trust created hereby is "THE HAVEN
CAPITAL MANAGEMENT TRUST," and the
<PAGE> 7
Trustees shall conduct the business of the Trust under that name or any other
names as they may from time to time determine.
Section 1.2. Definitions. Whenever used herein, unless otherwise
required by the context or specifically provided:
(a) "By-Laws" shall mean the By-Laws of the Trust as amended from time
to time and incorporated herein by reference;
(b) "Code" shall mean the United States Internal Revenue Code of 1986,
as amended;
(c) "Commission" and "Principal Underwriter" shall have the respective
meanings given them in Sec tion 2(a)(7) and Section (2)(a)(29) of the 1940
Act;
(d) "Covered Person" shall mean each Trustee, officer, employee, agent
(including, without limitation, any Investment Adviser, Distributor,
custodian or transfer agent or any director, officer or employee thereof) of
the Trust or any Series, when acting in such capacity;
(e) "Declaration" shall mean this Agreement and Declaration of Trust of
the Trust, as amended or restated from time to time;
(f) "Delaware Act" shall mean Chapter 38 of Title 12 of the Delaware
Code entitled "Treatment of Delaware Business Trusts", as amended from time
to time.
(g) "Distributor" shall mean a party furnishing services to the Trust
pursuant to any contract described in Section 4.1.
2
<PAGE> 8
(h) "Interested Person" shall have the meaning given it in Section
2(a)(19) of the 1940 Act;
(i) "Investment Adviser" shall mean a party furnishing investment
advisory services to one or more Series of the Trust pursuant to a contract
described in Section 4.2;
(j) "Majority Shareholder Vote", with respect to the Trust or with
respect to any Series, shall mean the vote at a meeting of the Shareholders
of the Trust or of such Series, as the case may be, of the lesser of (i) 67%
or more of the Shares present or represented at such meeting, if
Shareholders of more than 50% of all Shares of the Trust or of such Series,
as the case may be, are present or represented by proxy, or (ii) more than
50% of all Shares of the Trust or of such Series, as the case may be.
(k) "1940 Act" shall mean the Investment Company Act of 1940 and the
Rules and Regulations thereunder, all as amended from time to time.
References herein to specific sections of the 1940 Act shall be deemed to
include such Rules and Regulations as are applicable to such sections as
determined by the Trustees or their designees;
(l) "Person" shall mean an individual, corporation, partnership,
limited liability company, trust, foundation, plan, association, joint
venture, estate and other entity, whether or not a legal entity, or a
government or agency or political subdivision thereof, whether domestic or
foreign;
(m) "Series" shall mean a series of Shares established and designated
in accordance with the provisions of Article VI and shall mean an entity
such as that described in Section 18(f)(2) of the 1940 Act, and subject to
Rule 18f-2 thereunder.
3
<PAGE> 9
(n) "Shareholder" shall mean a beneficial owner of record of
outstanding Shares;
(o) "Shares" shall mean the shares of beneficial interest, described in
Section 6.1, into which the beneficial interest in each Series shall be
divided and includes fractions of Shares as well as whole Shares.
(p) "Trust" shall mean the Delaware business trust established by this
Declaration;
(q) "Trust Property" shall mean any and all pro perty, real or
personal, tangible or intangible, that is owned or held by or for the
account of the Trust or any Series; and
(r) "Trustees" shall mean the persons who have signed this Declaration
as trustees of the Trust, so long as they continue in office in accordance
with the terms hereof, and all other persons who may from time to time be
duly elected or appointed to serve as Trustees in accordance with the
provisions hereof, and reference herein to a Trustee or the Trustees shall
refer to such person or persons in their capacity as trustees hereunder.
ARTICLE II
PURPOSE OF TRUST
The purpose of the Trust is to conduct, operate and carry on the
business of a management investment company registered under the 1940 Act
through one or more Series investing primarily in securities. The Trust shall
have all power to do everything necessary, suitable, convenient, incidental or
proper for the conduct of such business and of any other business that may be
engaged in by a Delaware business trust.
4
<PAGE> 10
ARTICLE III
TRUSTEES
Section 3.1. Powers. The Trustees, subject only to the specific
limitations contained in this Declaration, shall have exclusive and absolute
power, control and authority over the Trust Property and over the conduct of
the affairs of the Trust, including such power, control and authority to do all
such acts and things as, in their good faith judgment, are necessary,
incidental, convenient, or desirable for the carrying out of or conducting of
the business of the Trust or in order to promote the interests of the Trust,
but with such powers of delegation as may be permitted by this Declaration. The
enumeration of any specific power, control, or authority herein shall not be
con strued as limiting the aforesaid power, control, and authority or any other
specific power, control, or authority. The Trustees shall have power to conduct
and carry on the business of the Trust, or any Series thereof, to have one or
more offices and to exercise any or all of the Trust's trust powers and rights,
in the State of Delaware, in any other states, territories, districts, and
dependencies of the United States and in any foreign countries. In construing
the provisions of this Declaration, the presumption shall be in favor of a grant
of power to the Trustees. Such powers of the Trustees may be exercised without
order of or resort to any court.
Without limiting the foregoing, the Trustees shall have the power:
(a) To operate as and to carry on the business of an investment
company, and to exercise all the powers necessary, suitable, convenient,
incidental, or proper to the conduct of such operations.
(b) To subscribe for and to invest and reinvest funds in, and hold for
investment, the securities (in-
5
<PAGE> 11
cluding but not limited to bonds, debentures, notes, certificates of
deposit, commercial paper, bankers' acceptances and all other evidences of
indebtedness and shares, stock, subscription rights, warrants,
profit-sharing interests or participations and all other contracts for or
evidences of equity interests) of any Person and to hold cash uninvested.
(c) To acquire (by purchase, subscription or otherwise), to trade in
and deal in, to sell or otherwise dispose of, to enter into repurchase
agreements, reverse repurchase agreements and firm commitment agreements
with respect to, and to lend and to pledge any such securities.
(d) To acquire (by purchase, subscription or otherwise), to trade in
and deal in, to sell or other wise dispose of, options or futures, and to
enter into swap, cap, and similar agreements.
(e) To invest all or any portion of the assets of the Trust or of any
Series in the securities of one or more investment companies having
substantially the same investment objectives as the Trust or such Series.
(f) To exercise all rights, powers and privileges of ownership or
interest in all securities included in the Trust Property, including the
right to vote, give assent, execute and deliver proxies or powers of
attorney to such person or persons as the Trustees shall deem proper and
otherwise act with respect thereto and to do all acts for the preservation,
protection, improvement and enhancement in value of all such securities
and to delegate, assign, waive or otherwise dis pose of any of such rights,
powers or privileges.
(g) To exercise powers and rights of subscription or otherwise which in
any manner arise out of the Trust's ownership of securities.
6
<PAGE> 12
(h) To declare (from interest, dividends or other income received or
accrued, from accruals of original issue or other discounts on obligations
held, from capital or profits whether realized or unrealized and from any
other lawful sources) dividends and distributions on the Shares and to
credit the same to the account of Shareholders, or at the election of the
Trustees to accrue income to the account of Share holders, on such dates
(which may be as frequently as every day) as the Trustees may determine.
Such dividends, distributions or accruals shall be payable in cash,
property or Shares as the Trustees may determine and at such intervals as
the Trustees may determine at any time in advance of such payment or
accrual, whether or not the amount of such dividend, distribution or accrual
can at the time of declaration be determined or must be calculated
subsequent to declaration and prior to payment or accrual by reference to
amounts or other factors not yet determined at the time of declaration
(including but not limited to the amount of a dividend or distribution to be
determined by reference to what is sufficient to enable the Trust to qualify
as a regulated investment company under the Code or to avoid liability for
Federal income or excise taxes).
The power granted by this subsection (h) shall include, without
limitation, and if otherwise lawful, the power (i) to declare dividends or
distributions or to accrue income to the account of Shareholders by means of
a formula or other similar method of determination whether or not the
amount of such dividend or distribution can be calculated at the time of
such declaration; (ii) to establish record or payment dates for dividends or
distributions on any basis, including the power to establish a number of
record or payment dates subsequent to the declaration of any dividend or
distribution; (iii) to establish the same payment date for any number of
dividends or distributions declared prior to such date; (iv) to provide for
payment of dividends or distributions declared and as yet unpaid,
7
<PAGE> 13
or unpaid accrued income, to Shareholders redeeming Shares prior to the
payment date otherwise applicable; and (v) to provide in advance for
conditions under which any dividend or distribution may be payable in Shares
to all or less than all of the Shareholders.
(i) To provide for the adjustment of the total number of Shares of any
Series outstanding as contemplated by Section 8.5 hereof in order to
maintain a constant net asset value per share of the Shares of such Series.
(j) To suspend or terminate the maintenance of the net asset value per
share of the Shares of any Series at a constant net asset value from time to
time and at any time that the Trustees determine, in good faith, that such
maintenance is not in the best interests of the Trust or such Series or the
holders of Shares of such Series.
(k) To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, develop and dispose of (by sale, lease or otherwise) any property,
real or personal, and any interest therein.
(l) To borrow money, and in this connection to issue notes or other
evidences of indebtedness; to secure borrowings by mortgaging, pledging or
otherwise subjecting to security interests the Trust Property; and to lend
Trust Property.
(m) To aid by further investment any Person, if any obligation of or
interest in such Person is included in the Trust Property or if the
Trustees have any direct or indirect interest in the affairs of such Person;
to do anything designed to preserve, protect, improve or enhance the value
of such obligation or interest; and to endorse or guarantee or become surety
on any or all of the contracts, stocks, bonds, notes, debentures and other
obligations of any such Person;
8
<PAGE> 14
and to mortgage the Trust Property or any part thereof to secure any of or
all such obligations.
(n) To enter into joint ventures, general or limited partnerships,
limited liability companies and any other combinations or associations.
(o) To purchase and pay for entirely out of Trust Property liability,
casualty, property and other insurance, including, without limitation,
insurance policies insuring Shareholders, Trustees, officers, employees and
agents of the Trust, Investment Advisers, Distributors, underwriters,
dealers or other independent con tractors of the Trust, against all claims
and liabilities of every nature arising by reason of holding or having held
any such position or by reason of any ac tion taken or omitted by any such
Person in such capacity, whether or not constituting negligence, to the
extent the Trust would have the power, under provisions of applicable law,
to indemnify such Person against such liability;
(p) To establish and carry out pension, profit-sharing, share purchase,
share bonus, savings, thrift and other retirement, incentive and benefit
plans for any Trustees, officers, employees or agents of the Trust.
(q) To the extent permitted by law and determined by the Trustees, in
good faith, to indemnify any Person with whom the Trust has dealings,
including, without limitation, the Shareholders, the Trustees, the
officers, employees and agents of the Trust, Investment Advisers,
Distributors, transfer agents, custodians, and dealers (and the officers,
directors and employees of such Persons).
(r) To incur and pay any charges, taxes and expenses which in the
opinion of the Trustees are necessary or incidental to or proper for
carrying out any of
9
<PAGE> 15
the purposes of this Trust, and to pay from the funds of the Trust Property
to themselves as Trustees reason able compensation and reimbursement for
expenses.
(s) To prosecute or abandon and to compromise, arbitrate or otherwise
adjust claims in favor of or against the Trust or any matter in controversy,
including but not limited to claims for taxes.
(t) To exercise the right to consent, and to enter into releases,
agreements and other instruments, including, but not limited to, the right
to consent or participate in any plan for the reorganization, consolidation
or merger of any corporation or issuer any security of which is or was held
by the Trust; to consent to any contract, lease, mortgage, purchase or sale
of such property by such a corporation or issuer; and to pay calls or
subscriptions with respect to securities held by the Trust.
(u) To employ or contract with such Persons as the Trustees may deem
desirable for the transaction of the business of the Trust, including
employees and agents who may be designated as officers with titles,
including, but not limited to, "President," "Vice President," "Executive
Vice President," "Treasurer," "Secretary," "Assistant Secretary" and
"Assistant Treasurer" and who in such capacity may act for and on behalf of
the Trust, as and to the extent authorized by the Trustees.
(v) To adopt a seal for the Trust, but the absence of such seal shall
not impair the validity of any instrument executed on behalf of the Trust.
(w) To employ one or more custodians of the assets of the Trust or of
any Series and authorize such custodians to employ subcustodians and to
deposit all or any part of such assets in a system or systems for the
central handling of securities.
10
<PAGE> 16
(x) To endorse or guarantee the payment of any notes or other
obligations of any Person; to make contracts of guaranty or suretyship, or
otherwise assume liability for payment thereof.
(y) To determine and change the fiscal year of the Trust or of a Series
and the method in which its accounts shall be kept.
(z) In general, to carry on any other business in connection with or
incidental to any of the objects and purposes of the Trust, to do everything
necessary, suitable or proper for the accomplishment of any purpose or the
attainment of any object or the furtherance of any power herein set forth,
either alone or in association with others, and to take any action
incidental or appurtenant to or growing out of or connected with the
business, purposes, objects or powers of the Trustees.
The foregoing clauses shall be construed both as objects and as powers,
and the foregoing enumeration of specific powers shall not be held to limit or
restrict in any manner the general powers of the Trustees.
The Trustees shall not be limited by any law now or hereafter in effect
limiting the investments which may be made or retained by fiduciaries, but they
shall have full power and authority to make any and all investments within the
limitation of this Declaration and the then-current prospectus of the Trust
that they, in their good faith judgment, shall determine, and without liability
for loss even though such investments do not or may not produce income or are
of a character or in an amount not considered proper for the investment of trust
funds.
Section 3.2. Legal Title. Title to all of the assets of the Trust shall
at all times be considered as vested in the Trust, except that the Trustees
shall have power to cause legal title to any Trust Property to be held
11
<PAGE> 17
by or in the name of one or more of the Trustees, or in the name of the Trust,
or in the name of any other Person as nominee, on such terms as the Trustees may
determine in good faith. Upon the death, resignation, retirement, removal,
incapacity or bankruptcy of a Trustee he or she shall automatically cease to
have any such title in any of the Trust Property, and the title of such Trustee
in the Trust Property shall vest automatically in the remaining Trustees. Such
vesting and cessation of title shall be effective whether or not conveyancing
documents have been executed and delivered.
Section 3.3. Number of Trustees; Term of Office. The number of Trustees
initially shall be three, which number may be increased or decreased from time
to time by written instrument signed, or by resolution approved at a duly
constituted meeting, by a majority of the Trustees, provided that the number of
Trustees shall not be less than two nor more than fifteen. Each Trustee shall
hold office until his successor is elected and qualified or until the earlier
occurrence of any of the events specified in the first sentence of Section 3.6.
Section 3.4. Election of Trustees. Initially the Trustees shall be
Stephen Ely, Colin C. Ferenbach and Denis M. Turko. Thereafter, except as
otherwise provided in Section 3.6 hereof, the Trustees shall be elected at a
Shareholders' meeting. Trustees may succeed themselves in office. Trustees
shall be elected by a majority of the Shares present in person or by proxy at
such meeting and entitled to vote. The election of any Trustee (other than an
individual who was serving as a Trustee immediately prior thereto) shall not
become effective, however, until the individual named shall have accepted in
writing such election and agreed in writing to be bound by the terms of this
Declaration. Trustees need not own Shares.
Section 3.5. Resignation and Removal. Any Trustee may resign his office
(without need for prior or subsequent accounting) by an instrument in writing
signed by him and delivered to the President, or the Secretary or any
12
<PAGE> 18
Assistant Secretary, and such resignation shall be effective upon such delivery,
or at any later date specified in the instrument. Any of the Trustees may be
removed (1) with cause by the affirmative vote of two-thirds of the remaining
Trustees (provided that the aggregate number of Trustees after such removal
shall not be less than two) or (2) by the Shareholders pursuant to Section 6.16
hereof.
Section 3.6. Vacancies. The term of office of a Trustee shall terminate
and a vacancy shall occur in the event of the death, retirement, resignation or
removal (whether pursuant to Section 3.5 hereof or otherwise), bankruptcy,
adjudication of incompetence or other incapacity to perform the duties of the
office of a Trustee. No vacancy shall operate to annul this Declaration or to
revoke any existing agency created pursuant to the terms of the Declaration. In
the case of an existing vacancy, including a vacancy existing by reason of an
increase in the authorized number of Trustees, the remaining Trustees may fill
such vacancy by the appointment of such individual as they in their sole
discretion shall see fit, by a written instrument signed by a majority of the
Trustees then in office, provided that immediately after filling any such
vacancy at least two-thirds of the Trustees then holding office shall have been
elected to such office by the Shareholders. In the event that at any time, less
than a majority of the Trustees holding office at that time were elected by the
Shareholders, a meeting of the Shareholders shall be held promptly and in any
event within 60 days (unless the Commission shall by order extend such period)
for the purpose of electing Trustees to fill any existing vacancies. No
appointment or election of a Trustee shall become effective, however, until the
person named shall have accepted in writing such appointment and agreed in
writing to be bound by the terms of this Declaration. Whenever a vacancy in the
number of Trustees shall occur, until such vacancy is filled as provided in
Section 3.4 or this Section 3.6, the Trustees in office, regardless of their
number, shall have all the powers granted to the Trustees and shall discharge
all the duties imposed upon the Trustees by this Declaration.
13
<PAGE> 19
Section 3.7. Committees; Delegation. The Trustees shall have the power
to appoint from their own number, and terminate, any one or more committees
consisting of two or more Trustees, including an executive committee which may
exercise some or all of the power and authority of the Trustees as the Trustees
may determine (including but not limited to the power to determine net asset
value and net income), subject to any limitations contained in the By-Laws, and
in general to delegate from time to time to one or more of their number or to
officers, employees or agents of the Trust such power and authority and the
doing of such things and the execution of such instruments, either in the name
of the Trust or the names of the Trustees or otherwise, as the Trustees may deem
expedient, provided that no committee shall have the power
(a) to change the principal office of the Trust;
(b) to amend the By-Laws;
(c) to issue Shares of any Series;
(d) to elect or remove from office any Trustee or the President, the
Treasurer or the Secretary of the Trust;
(e) to increase or decrease the number of Trustees;
(f) to declare a dividend or other distribution on the Shares of any
Series;
(g) to authorize the repurchase of Shares of any Series; or
(h) to authorize any merger, consolidation or sale, lease or exchange
of all or substantially all of the Trust Property.
14
<PAGE> 20
Section 3.8. Quorum; Voting. At all meetings of the Trustees, the
presence of one-third of the total number of Trustees authorized, but not less
than two, shall constitute a quorum for the transaction of business. When a
quorum is present at any meeting, a majority of Trustees present may take any
action, except when a larger vote is required by this Declaration, the By-laws
or the 1940 Act.
Section 3.9. Action Without a Meeting; Participation by Conference
Telephone. Unless the 1940 Act requires that a particular action must be taken
only at a meeting of Trustees, any action required or permitted to be taken at
any meeting of the Trustees (or of any committee of the Trustees) may be taken
without a meeting if written consents thereto are signed by a majority of the
Trustees then in office (or by a majority of the members of such committee) and
such written consents are filed with the records of the meetings of the
Trustees. Unless the 1940 Act requires that Trustees must be present in person
at a meeting of Trustees, Trustees may participate in a meeting of the Trustees
(or of any committee of the Trustees) by means of a conference telephone or
similar communications equipment if all individuals participating can hear one
another at the same time. Participation in a meeting by these means shall
constitute presence at the meeting.
Section 3.10. By-Laws. The Trustees may adopt By-Laws not inconsistent
with this Declaration or law to provide for the conduct of the business of the
Trust, and may amend or repeal such By-Laws.
Section 3.11. No Bond Required. No Trustee shall be obligated to give
any bond or other security for the performance of any of his duties hereunder.
Section 3.12. Reliance on Experts. Each Trustee, officer, agent and
employee of the Trust or any Series thereof shall, in the performance of his
duties, be fully and completely justified and protected by relying in good faith
upon the books of account or other records of the
15
<PAGE> 21
Trust, or upon such information, opinions, reports or statements presented to
the Trustees (a) by any of the officers or employees of the Trust or any Series
thereof, (b) by any Investment Adviser, Distributor, custodian or transfer
agent, or (c) by any accountants, selected dealers or appraisers or other
agents, experts or consultants selected with reasonable care by the Trustees,
regardless of whether such agent, expert or consultant may also be a Trustee.
The Trustees, officers, agents and employees of the Trust or any Series thereof
may take advice of counsel with respect to the meaning and operation of this
Declaration and with respect to other legal matters, and shall be under no
liability for any act or omission in accordance with such advice or for failing
to follow such advice.
Section 3.13. Standard of Care of Trustees. The exercise by the
Trustees of their powers and discretion hereunder and the construction in good
faith by the Trustees of the meaning or effect of any provision of this
Declaration shall be binding upon everyone interested. No Covered Person shall
be liable to the Trust or the Shareholders except for its own willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of its office.
To the extent that, at law or in equity, a Covered Person has duties
(including fiduciary duties) and liabilities relating thereto to the Trust, a
Shareholder or a Trustee, any such Covered Person acting under this Declaration
or By-Laws shall not be liable to the Trust, any Share holder or any Trustee for
such Covered Person's good faith reliance on the provisions of this Declaration
or By-Laws. The provisions of this Declaration or By-Laws, to the extent that
they restrict the duties and liabilities of any such Covered Person otherwise
existing at law or in equity, are agreed by the Trustees and the Shareholders to
replace such other duties and liabilities of such Covered Person.
Whenever in this Declaration or the By-Laws, the Trustees are permitted
or required to make a decision (i) in
16
<PAGE> 22
their "sole discretion" or under a similar grant of authority or latitude, the
Trustees shall be entitled to consider only such interests and factors as they
desire, whether reasonable or unreasonable, and, except as otherwise prohibited
under the 1940 Act, may consider their own interests or (ii) in their "good
faith" or under another express standard, the Trustees shall act under such
express standard and shall not be subject to any other or different standards
imposed by this Declaration, the By-Laws, law or any other agreement
contemplated herein, except as otherwise required under the 1940 Act. Each
Shareholder and Trustee hereby agrees that any standard of care or duty imposed
in this Declaration or the By-Laws or any other agreement contemplated herein or
under the Delaware Act or any other applicable law, rule or regulation shall be
modified, waived or limited in each case as required to permit the Trustees to
act under this Declaration or the By-Laws or any other agreement contemplated
herein and to make any decision pursuant to the authority prescribed in this
Declaration or the By-Laws.
ARTICLE IV
CONTRACTS
Section 4.1. Distribution Contracts. The Trust may from time to time
enter into a distribution contract with one or more other Persons (each a
"Distributor") providing for the sale of Shares, pursuant to which the Trust
may agree to sell Shares of one or more Series or classes of Series to such
Distributor or appoint such Distributor its sales agent for such Shares. Such
contract may provide that the Distributor may enter into contracts with other
persons to sell Shares on behalf of the Distributor and the Trust. Such contract
may also provide for the repurchase of Shares by the Distributor as agent of the
Trust and shall contain such terms and conditions, if any, as may be prescribed
in the By-Laws and such further terms and conditions not inconsistent with the
provisions of this Article IV or of the
17
<PAGE> 23
By-Laws as the Trustees may in their discretion determine in good faith.
Section 4.2. Investment Advisory Contracts. Subject to approval by a
Majority Shareholder Vote or, where appropriate pursuant to Section 6.11 hereof,
the Majority Shareholder Vote of a given Series, the Trust may from time to time
enter into investment advisory or management contracts with one or more other
Persons (each an "Investment Adviser") pursuant to which such Investment Adviser
shall agree to furnish to the Trust management, investment advisory,
statistical and research facilities or other services with respect to one or
more Series of the Trust. Such contract shall contain such other terms and
conditions, if any, as may be prescribed in the By-Laws and such further terms
and conditions not inconsistent with the provisions of this Article IV, the
By-Laws or applicable law as the Trustees may in their discretion determine in
good faith, including the grant of authority to the Investment Adviser to
determine what securities shall be purchased or sold by each such Series and
what portion of its assets shall be uninvested and to implement such
determinations by making changes in the Series' investments.
Section 4.3. Affiliations of Trustees or Officers. The fact that any
Shareholder, Trustee, officer, agent or employee of the Trust or any Series
thereof is a shareholder, member, director, officer, partner, trustee, employee,
Investment Adviser or Distributor of or for any Person or of or for any parent
or affiliate of any Person with which an investment advisory or management
contract, Principal Underwriter or Distributor contract or custodian, transfer
agent, disbursing agent or similar agency contract may have been or may
hereafter be made, or that any such Person, or any parent or affiliate thereof,
is a Shareholder of or has any other interest in the Trust or any Series
thereof, or that any such Person also has any one or more similar contracts with
one or more other such Persons, or has other businesses or interests, shall not
affect the validity of any such contract made or that may hereafter be
18
<PAGE> 24
made with the Trust or disqualify any Shareholder, Trustee, officer, agent or
employee of the Trust or any Series thereof from voting upon or executing the
same or create any liability or accountability to the Trustees, the Trust, any
Series thereof or the Shareholders.
ARTICLE V
LIMITATION OF LIABILITY; INDEMNIFICATION
Section 5.1. No Personal Liability of Share holders or Covered Persons.
The Shareholders shall be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware. No Trustee shall have any
power to bind personally any Shareholder or to call upon any Shareholder for the
payment of any sum of money or assessment whatsoever other than such as the
Shareholder may at any time personally agree to pay by way of subscription for
any Shares or otherwise. All Persons extending credit to, contracting with or
having any claim against the Trust or any Series thereof shall look only to the
assets of the Trust or of such Series, as the case may be, for payment under
such credit, contract or claim, and neither the Shareholders nor the Trustees,
nor any of the Trust's officers, employees or agents, whether past, present or
future, shall be personally liable therefor. No Covered Person shall be subject
to any personal liability whatsoever to any person other than the Trust or the
Shareholders in connection with the Trust Property or the acts, obligations or
affairs of the Trust or any Series thereof. The Trustees shall not be
responsible or liable to the Trust or the Shareholders for any neglect or
wrongdoing of any officer, employee or agent (including, without limitation, any
Investment Adviser, Distributor, custodian, or transfer agent) of the Trust or
any Series thereof, nor shall any Trustee be responsible or liable for the act
or omission of any other Trustee.
19
<PAGE> 25
Section 5.2. Execution of Documents; Notice; Apparent Authority. Every
note, bond, contract, instrument, certificate or undertaking and every other act
or thing whatsoever executed or done by or on behalf of the Trust or any Series
thereof or the Trustees or any of them in connection with the Trust or any
Series thereof shall be conclusively deemed to have been executed or done only
in or with respect to their or his or her capacity as Trustees or Trustee, and
such Trustees or Trustee shall not be personally liable thereon. Every note,
bond, contract, instrument, certificate or undertaking made or issued by the
Trustees or by any officers or officer shall recite that the obligations of such
instruments are not binding upon any of the Trustees, Shareholders, officers,
employees or agents of the Trust individually but are binding only upon the
assets and property of the Trust or of one or more Series, but the omission
thereof shall not operate to bind any Trustees, Shareholders or officers,
employees and agents of the Trust individually. No purchaser, lender, transfer
agent or other Person dealing with the Trustees or any officer, employee or
agent of the Trust shall be bound to make any inquiry con cerning the validity
of any transaction purporting to be made by the Trustees or by such officer,
employee or agent or make inquiry concerning or be liable for the application of
money or property paid, loaned or delivered to or on the order of the Trustees
or of such officer, employee or agent.
Section 5.3. Indemnification of Covered Persons. To the fullest extent
permitted by law, the Trust shall indemnify and hold harmless any Covered Person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (including any action by or in the right of the
Trust) by reason of any action or omission, or any alleged act or omission,
arising out of such Covered Person's activities as a Covered Person if such
activities were performed in good faith and were reasonably believed by such
Covered Person to be in or not opposed to the best interests of the Trust,
against losses, damages, or expenses for which such Covered
20
<PAGE> 26
Person has not otherwise been reimbursed (including attorneys' fees, judgments,
fines and amounts paid in settlement) actually and reasonably incurred by such
Covered Person in connection with such action, suit or proceeding, so long as
such Covered Person was not liable for or guilty of gross negligence, willful
misfeasance, bad faith or reckless disregard of such Covered Person's duties
with respect to such acts or omissions and, with respect to any criminal
proceeding, had not reasonable cause to believe his conduct was unlawful.
Notwithstanding the foregoing, absent a judicial or administrative determination
that a Covered Person seeking indemnification was not liable on the merits or
guilty of disabling conduct within the meaning of Section 17(h) of the 1940 Act
("Disabling Conduct"), all determinations that a Covered Person did not engage
in Disabling Conduct shall be based upon a review of the facts, by (a)
independent legal counsel in a written opinion or (b) if a quorum of Trustees
who are neither "interested persons" of the Trust or Series, as the case may be,
as defined in Section 2(a)(19) of the 1940 Act, nor parties to the proceeding
("Disinterested, Non-Party Trustees") may be obtained, a vote of a majority of
such quorum. Notwithstanding anything herein to the contrary, if any matter that
is the subject of indemnification hereunder relates only to one Series (or to
more than one but not all of the Series of the Trust), then the indemnity shall
be paid only out of the assets of the affected Series.
The Trustees may make advance payments out of the assets of the Trust
or, if appropriate, of the affected Series in connection with the expense of
defending any action with respect to which indemnification might be sought
under this Section 5.3. The indemnified Covered Person shall give a written
undertaking to reimburse the Trust or the Series, as the case may be, in the
event it is subsequently determined that it is not entitled to such
indemnification and (A) the indemnified Covered Person shall provide security
for its undertaking, (B) the Trust shall be insured against losses arising by
reason of lawful advances, or (C) a majority of a quorum of Disinterested,
Non-Party
21
<PAGE> 27
Trustees or an independent legal counsel in a written opinion shall determine,
based on a review of readily available facts (as opposed to a full trial-type
inquiry), that there is reason to believe that the indemnitee ultimately will be
found entitled to indemnification. The rights accruing to any Covered Person
under these provisions shall not exclude any other right to which it may be
lawfully entitled and shall inure to the benefit of its heirs, executors,
administrators or other legal representatives.
Section 5.4. Indemnification of Shareholders. In case any Shareholder
or former Shareholder shall be held to be personally liable solely by reason of
his or her being or having been a Shareholder and not because of acts or
omissions or for some other reason, the Shareholder or former Shareholder (or
his or her heirs, executors, administrators or other legal representatives or in
the case of a corpora tion or other entity, its corporate or other general
successor) shall be entitled out of the assets of the Series of which such
Shareholder held Shares, to be held harmless from and indemnified against all
loss and expense, including legal expenses reasonably incurred, arising from
such liability. The rights accruing to a Shareholder under this Section 5.4
shall not exclude any other right to which such Shareholder may be lawfully
entitled, nor shall anything contained herein restrict the right of the Trust or
any Series thereof to indemnify or reimburse a Shareholder in any appropriate
situation even though not specifically provided herein.
ARTICLE VI
SHARES OF BENEFICIAL INTEREST
Section 6.1. Beneficial Interest. The interest of the beneficial owners
hereunder shall be divided into transferable shares of beneficial interest
("Shares"), with or without par value as the Trustees may determine in their
22
<PAGE> 28
sole discretion. The number of Shares authorized hereunder is unlimited. All
Shares issued hereunder, including without limitation Shares issued in
connection with a dividend in Shares or a split in Shares, shall be fully paid
and nonassessable. No Shares shall have any appraisal, conversion, or
preemptive rights. The Trustees may hold as treasury Shares (of the same or
some other Series), reissue for such consideration and on such terms as they may
determine, or cancel any Shares of any Series repurchased or redeemed by the
Trust at their sole discretion from time to time.
Section 6.2. Series Designation. Until the Trustees shall authorize one
or more additional Series pursuant to this Section 6.2, the Shares shall be
classified into one initial Series, designated the "The Haven Fund," having a
par value of $0.001 per share. The Trustees may and are hereby authorized,
without Shareholder approval, from time to time to establish additional Series,
each such additional Series relating to a separate portfolio of investments and
having investment objectives distinct from those of the other Series. The
establishment and designation of any Series additional to the initial Series
shall be effective upon the execution by an officer authorized by resolution of
a majority of the Trustees of an instrument setting forth the establishment and
designation of such Series (which instrument shall have the status of an
amendment to this Declaration). Such instrument shall also set forth any rights
and preferences that are in addition to the rights and preferences of Shares set
forth in this Declaration. Each reference to "Shares" shall be deemed to be a
reference to Shares of any or all Series, as the context may require. All Shares
of any Series shall have equal voting, distribution, redemption, liquidation and
other rights and shall be entitled to a preference over Shares of other Series
with respect to the assets of or allocated (pursuant to subsection 6.3(b)) to
such Series. Notwithstanding the foregoing, the Trustees may establish varia
tions between different Series as to purchase price, determination of net asset
value, the price, terms and manner of redemption, special and relative rights as
to dividends on
23
<PAGE> 29
liquidation, and conditions under which the several Series shall have separate
voting rights. The Trustees may from time to time divide or combine the Shares
in each Series into a greater or lesser number without thereby changing the
proportionate beneficial interests in the Trust. The number of Shares of each
Series that may be issued shall be unlimited.
Section 6.3. Series Shares, Assets, Liabilities and Expenses.
(a) Series Shares. The Trustees may classify or reclassify any unissued
Shares or any Shares previously issued and reacquired of any Series into Shares
of such Series or Shares of one or more other Series. The Trustees may hold as
treasury Shares (of the same or some other Series), reissue for such
consideration and on such terms as they may determine, or cancel any Shares of
any Series repurchased or redeemed by the Trust at their sole discretion from
time to time.
(b) Series Assets. All consideration received by the Trust for the
issue or sale of Shares of a particular Series, together with all assets in
which such consideration is invested or reinvested, all income, earnings,
profits, and proceeds thereof, including any proceeds derived from the sale,
loan, exchange or liquidation of such assets, and any funds or payments derived
from any reinvestment of such proceeds in whatever form the same may be, shall
irrevocably belong to that Series for all purposes, subject only to the rights
of creditors, and shall be so recorded upon the books of account of the Trust.
Separate and distinct records shall be maintained for each Series, and the
assets associ ated with a Series shall be held and accounted for separately
from the other assets of the Trust, or any other Series. In the event that there
are any assets, income, earnings, profits, and proceeds thereof, funds, or
payments which are not readily identifiable as belonging to any particular
Series, the Trustees shall allocate them among any one or more of the Series
established and designated from time to
24
<PAGE> 30
time in such manner and on such basis as they, in their good faith judgment,
deem fair and equitable. Each such allocation by the Trustees shall be
conclusive and binding upon the Shareholders of all Series for all purposes.
(c) Series Liabilities and Expenses. The assets belonging to each
particular Series shall be charged with the liabilities of the Trust in respect
of that Series and all expenses, costs, charges and reserves attributable to
that Series, and any general liabilities, expenses, costs, charges or reserves
of the Trust which are not readily identifiable as belonging to any particular
Series shall be allocated and charged by the Trustees to and among any one or
more of the Series in such manner and on such basis as the Trustees in their
good faith judgment deem fair and equitable. Each such allocation by the
Trustees shall be conclusive and binding upon the Shareholders of all Series for
all purposes. Without limiting the foregoing, the debts, liabilities,
obligations and expenses incurred, contracted for or otherwise existing with
respect to a particular Series shall be enforceable against the assets of such
Series only and not against the assets of the Trust generally. Any person
extending credit to, contracting with or otherwise having any claim against any
Series may look only to the assets of that Series to satisfy any such obligation
or claim. No Shareholder or former Shareholder of any Series shall have any
claim on or any right to any assets allocated to or belonging to any other
Series. Notice of this limitation on Series liabilities shall be set forth in
the certificate of trust of the Trust (whether originally or by amendment) as
filed or to be filed in the Office of the Secretary of State of the State of
Delaware pursuant to the Delaware Act, and upon the giving of such notice in the
certificate of trust, the statutory provisions of Section 3804 of the Delaware
Act relating to limitations on Series liabilities (and the statutory effect
under Section 3804 of setting forth such notice in the certificate of trust)
shall become applicable to the Trust and each Series.
25
<PAGE> 31
Section 6.4. Termination of a Series. Any Series may be terminated by
the affirmative vote of at least two-thirds of the Shares of such Series
outstanding or, when authorized by a Majority Shareholder Vote of such Series,
by an instrument in writing signed by a majority of the Trustees. Upon the
termination of a Series, the Series shall carry on no business except for the
purpose of winding up its affairs, and the Trustees shall proceed to wind up the
affairs of the Series, having with respect to such Series all powers
contemplated by Section 9.1 of this Declaration in the event of the termination
of the Trust.
At any time that there are no Shares outstanding of any Series
previously established, the Trustees may, by an instrument executed by a
majority of their number, terminate such Series.
Section 6.5. Rights of Shareholders. Shares shall be deemed to be
personal property giving only the rights provided in this Declaration. Every
Shareholder by virtue of having become a Shareholder shall be held to have
expressly assented and agreed to the terms hereof and to have become a party
hereto. The right to conduct any business described herein is vested
exclusively in the Trustees, and the Shareholders shall have no interest therein
other than the beneficial interest conferred by their Shares, and they shall
have no right to call for any partition or division of any property, profits,
rights or interests of the Trust or any Series thereof nor can they be called
upon to share or assume any losses of the Trust or any Series thereof or suffer
an assessment of any kind by virtue of their ownership of Shares. The death,
incapacity, dissolution, termination or bankruptcy of a Shareholder during the
continuance of the Trust shall not operate to dissolve or terminate the Trust
or any Series thereof nor to entitle the legal representative of such
Shareholder to an accounting or to take any action in any court or otherwise
against other Shareholders or the Trustees or the Trust Property, but only to
the rights of such Shareholder hereunder. The Shares
26
<PAGE> 32
shall not entitle the holder to preference, preemptive, appraisal, conversion or
exchange rights.
Section 6.6. Business Trust Only. The Trust shall be a Delaware
business trust organized under the Delaware Act. It is the intention of the
Trustees to create only the relationship of Trustee and beneficial owner, within
the meaning of the Delaware Act, between the Trustees and each Shareholder from
time to time. It is not the intention of the Trustees to create a general
partnership, limited partnership, joint stock association, corporation,
bailment, joint venture or any form of legal relationship other than a business
trust pursuant to the Delaware Act. Nothing in this Declaration shall be
construed to make the Shareholders, either by themselves or with the Trustees,
partners or members of a joint stock association.
Section 6.7. Issuance of Shares.
(a) General. The Trustees may from time to time without vote of the
Shareholders issue and sell or cause to be issued and sold Shares of any Series,
except that only Shares previously contracted to be sold may be issued during
any period when the right of redemption is suspended pursuant to the provisions
of Section 7.6 hereof. All such Shares, when issued in accordance with the terms
of this Section 6.7, shall be fully paid and nonassessable.
(b) Price. No Shares of any Series shall be issued or sold by the Trust
for less than an amount which would result in proceeds to the Trust, before
taxes and other expenses payable by the Trust in connection with such
transaction, of at least the net asset value per share of Shares of such Series
determined as set forth in Article VIII hereof as of the time specified in the
then current prospectus of the Trust.
(c) Acquisition of Assets. In connection with the acquisition of assets
(including the acquisition of assets subject to, and in connection with the
assumption of,
27
<PAGE> 33
liabilities), businesses, or stock of another Person, the Trustees may issue or
cause to be issued Shares of any Series and accept in payment therefor, in lieu
of cash, such assets or businesses at their market value (as determined by the
Trustees) or such stock at the market value (as deter mined by the Trustees) of
the assets held by such other Person, either with or without adjustment for
contingent costs or liabilities, provided that the funds of the Trust are
permitted by law to be invested in such assets, businesses or stock.
(d) Fractional Shares. The Trustees may issue and sell fractions of
Shares of any Series, to three decimal places, having pro rata all the rights of
full Shares of such Series, including, without limitation, the right to vote and
to receive dividends and distributions.
Section 6.8. Register of Shares. A register shall be kept at the
principal office of the Trust or an office of the transfer agent of the Trust
which shall contain the names and addresses of the Shareholders of each Series,
the number of Shares of each such Series held by them respectively, and a record
of all transfers thereof. A separate register shall be kept for each Series.
Such register shall be conclusive as to who are the holders of the Shares and
who shall be entitled to receive dividends or distributions or otherwise to
exercise or enjoy the rights of Shareholders of each Series. No Shareholder
shall be entitled to receive payment of any dividend or distribution, nor to
have notice given to him as provided herein or in the By-Laws, until he has
given his address to the transfer agent or such other officer or agent of the
Trust as shall keep such register for entry thereon.
Section 6.9. Share Certificates. No certificates certifying ownership
of Shares shall be issued except as the Trustees may otherwise determine from
time to time in their sole discretion.
28
<PAGE> 34
Section 6.10. Transfer of Shares. Shares of any Series shall be
transferable on the records of the Trust upon delivery to the Trust or its
transfer agent or agents of appropriate evidence of assignment, transfer,
succession or authority to transfer accompanied by any certificate or
certificates representing such Shares previously issued to the transferor. Upon
such delivery the transfer shall be recorded on the register of the appropriate
Series. Until such record is made, the Trustees, the transfer agent, and the
officers, employees and agents of the Trust or any Series shall not be entitled
or required to treat the assignee or transferee of any Share as the absolute
owner thereof for any purpose, and accordingly shall not be bound to recognize
any legal, equitable or other claim or interest in such Share on the part of any
Person, other than the holder of record, whether or not any of them shall have
express or other notice of such claim or interest.
Section 6.11. Voting Powers. Except as set forth in the next sentence
and in Section 6.16 of this Declaration, the Shareholders shall have power to
vote only on the following matters, as to each of which matters all Share
holders of all Series shall vote together as a single class: (a) for the
election of Trustees as provided in Section 3.4 hereof; (b) with respect to any
amendment of this Declaration to the extent and as provided in Section 9.2
hereof; (c) with respect to any merger, consolidation or sale of assets of the
Trust, as provided in Section 9.3 hereof; and (d) with respect to such
additional matters relating to the Trust as may be required by this Declaration
or the By-Laws or by reason of the registration of the Trust or the Shares with
the Commission or any State or by any applicable law or any regulation or order
of the Commission or any State or as the Trustees may consider necessary or
desirable. The Shareholders of each Series shall have power to vote as a
separate Series only on the following matters: (i) with respect to any
investment advisory or management contract with respect to such Series entered
into pursuant to Section 4.2 hereof; (ii) with respect to any amendment of this
Declaration affecting the Shareholders of such Series
29
<PAGE> 35
differently from the Shareholders of other Series to the extent and as provided
in Section 9.2 hereof; (iii) to the fullest extent permitted by law, with
respect to any merger, consolidation or sale of assets of a Series to the extent
and as provided in Section 9.3 hereof; and (iv) such matters as may be otherwise
required by this Declaration or by the By-Laws or by reason of the registration
of the Trust or the Shares of such Series with the Commission or any State or by
any applicable law (including the 1940 Act) or any regulation or order of the
Commission or any State or as the Trustees may consider necessary or desirable.
Each whole Share shall be entitled to one vote as to any matter on which
Shareholders are entitled to vote and each fractional Share shall be entitled to
a proportionate fractional vote. A Majority Shareholder Vote, of the Trust or of
a Series, as applicable, shall decide any questions, except when a different
vote is specified by law, any provision of the By-Laws, or this Declaration.
There shall be no cumulative voting in the election of Trustees. Shares may be
voted in person or by proxy. Until Shares are issued, the Trustees may exercise
all rights of Shareholders (including, without limitation, the right to amend
this Declaration) and may take any action required by law, the By-Laws or this
Declaration to be taken by Shareholders. The By-Laws may include further
provisions for Shareholders' votes and related matters.
Section 6.12. Meetings of Shareholders. Meetings of the Shareholders of
any one or more Series may be called at any time by the President or any Vice
President of the Trust, or by a majority of the Trustees for the purpose of
taking action upon any matter requiring the vote or authority of the
Shareholders as herein provided or upon any other matters deemed to be necessary
or desirable. A special meeting of Shareholders may also be called at any time
upon the written request of a holder or the holders of not less than 25% of all
of the Shares entitled to be voted at such meeting, provided that the
Shareholder or Shareholders requesting such meeting shall have paid to the Trust
the reasonably estimated cost of preparing and mailing
30
<PAGE> 36
the notice thereof, which the Secretary shall determine and specify to such
Shareholder or Shareholders.
Section 6.13. Action Without a Meeting. Any action that may be taken by
the vote at a meeting of the Shareholders, including action requiring a Majority
Share holder Vote, may be taken without a meeting if such proportion of
Shareholders as is required to vote for approval of the matter by law, this
Declaration or the By-Laws consents to the action in writing and the written
consents are filed with the records of Shareholders' meetings. Such consents
shall be treated for all purposes as a vote taken at a Shareholders' meeting.
Section 6.14. Quorum and Required Vote. One-third (33 1/3%) of the
outstanding Shares shall be a quorum for the transaction of business at a
Shareholders' meeting, except that where any provision of law or this
Declaration permits or requires that holders of any Series or class shall vote
as a Series or class, then one-third percent (33 1/3%) of the aggregate number
of Shares of that Series or class entitled to vote shall be necessary to
constitute a quorum for the transaction of business by that Series or class. Any
lesser number, however, shall be sufficient for adjournment and any adjourned
session or sessions may be held within 90 days after the date set for the
original meeting without the necessity of further notice. Except when a larger
vote is required by any provision of this Declaration or the By-Laws of the
Trust and subject to any applicable requirements of law, a majority of the
Shares voted shall decide any question, provided that where any provision of law
or of this Declaration permits or requires that the holders of any Series or
class shall vote as a Series or class, then a majority of the Shares of that
Series or class voted on the matter shall decide that matter insofar as that
Series or class is concerned.
Section 6.15. Additional Provisions. The By-Laws may include further
provisions for Shareholders' votes and meetings and related matters.
31
<PAGE> 37
Section 6.16. Removal of Trustees by Shareholders. No Trustee shall
serve as trustee of the Trust after the holders of record of not less than
two-thirds of the outstanding Shares of the Trust have declared that such
Trustee be removed from office either by a declaration in writing filed with the
Secretary of the Trust or by votes cast in person or by proxy at a meeting
called for such purpose. Notwithstanding the provisions of Section 6.12 hereof,
the Trustees shall comply at all times with the provisions of the 1940 Act,
including without limitation Section 16(c) thereof or any successor section,
pertaining to the removal of Trustees by Shareholders.
Section 6.17. Derivative Suits. No action may be brought by a
Shareholder on behalf of the Trust or a Series unless Shareholders owning not
less than twenty percent (20%) of the then outstanding Shares of the Trust or
such Series join in the bringing of such action.
ARTICLE VII
REDEMPTION AND REPURCHASE OF SHARES
Section 7.1. Redemption of Shares. The Trustees shall redeem Shares of
any Series, subject to the conditions and at the price determined in accordance
with this Declaration, upon proper application of the Shareholder of record
thereof at such office or agency as may be designated from time to time for that
purpose by the Trustees. The Trustees shall have power to determine from time to
time, in good faith, the form and the other accompanying documents which shall
be necessary to constitute a proper application for redemption.
Section 7.2. Redemption Price. Shares shall be redeemed for an amount
not exceeding the net asset value of such Shares next determined pursuant to
Article VIII hereof after receipt of a proper application for redemption, less a
32
<PAGE> 38
charge, if and as fixed by resolution of the Trustees from time to time.
Section 7.3. Payment. Payment for such Shares redeemed shall be made to
the Shareholder of record within 7 days after the date upon which proper
application is re ceived, subject to the Trustees or their designated agent
being satisfied that the purchase price of such Shares has been collected and to
the provisions of Section 7.4 hereof. Such payment shall be made in cash or
other assets of the Trust or both, as the Trustees shall prescribe. For the
purposes of such payment for Shares redeemed, the value of assets delivered
shall be determined as set forth in Article VIII hereof as of the same time as
of which the net asset value per share of such Shares is determined.
Section 7.4. Effect of Suspension of Right of Redemption. If, pursuant
to Section 7.6 hereof, the Trustees shall declare a suspension of the right of
redemption, the rights of Shareholders (including those who shall have applied
for redemption pursuant to Section 7.1 hereof but who shall not yet have
received payment) to have Shares redeemed and paid for by the Trust shall be
suspended until the time specified in Section 7.6. Any Shareholder of record who
shall have his redemption right so suspended may, during the period of such
suspension, by appropriate written notice of revocation at the office or agency
where application was made, revoke any application for redemption not honored.
The redemption price of Shares for which redemption applications have not been
revoked shall not exceed the net asset value of such Shares next determined as
set forth in Article VIII hereof after the termination of such suspension, and
payment shall be made within 7 days after the date upon which the application
was made plus the period after such application during which the right of
redemption was suspended.
Section 7.5. Repurchase by Agreement. The Trust may repurchase Shares
directly, or through a Distributor or other agent designated for the purpose, by
agreement with
33
<PAGE> 39
the Shareholder of record thereof, or an agent designated by such Shareholder,
at a price not exceeding the net asset value per share determined as set forth
in Article VIII hereof as of the time specified in the then current prospectus
of the Trust.
Section 7.6. Suspension of Right of Redemption. The Trustees may
declare a suspension of the right of redemption or postpone the date of payment
or redemption as permitted by the 1940 Act and regulations and orders from time
to time in effect thereunder. Such suspension shall take effect at such time as
the Trustees shall specify, which shall not be later than the close of business
on the business day next following the declaration, and thereafter there shall
be no determination of net asset value until the Trustees shall declare the
suspension at an end, except that the suspension shall terminate in any event on
the first day on which (a) the condition giving rise to the suspension shall
have ceased to exist and (b) no other condition exists under which suspension is
authorized under this Section 7.6. Each declaration by the Trustees pursuant to
this Section 7.6 shall be consistent with such applicable rules and
regulations, if any, relating to the subject matter thereof as shall have been
promulgated by the Commission or any other governmental body having jurisdiction
over the Trust and as shall be in effect at the time. To the extent not
inconsistent with such rules and regulations, the determination of the Trustees
shall be conclusive.
Section 7.7. Involuntary Redemption of Shares; Disclosure of Holding.
(a) If the Trustees shall, at any time and in good faith, be of the opinion that
direct or indirect ownership of Shares or other securities of the Trust or of
any Series has or may become concentrated in any Person to an extent that such
concentration would cause any material adverse tax consequences to the Trust or
to any Series, then the Trustees shall have the power by lot or other means
deemed equitable by them
34
<PAGE> 40
(i) to call for redemption a number, or principal amount, of
Shares sufficient in the opinion of the Trustees to avoid such other
material adverse tax consequences, and
(ii) to refuse to transfer or issue Shares to any Person whose
acquisition of the Shares in question would in the opinion of the
Trustees result in such adverse tax consequences.
Any redemption pursuant to this Section 7.7(a) shall be effected
at a redemption price determined in accordance with Section 7.2 hereof.
(b) Each Shareholder shall upon request disclose to the Trustees
in writing such information with respect to direct and indirect ownership of
Shares of the Trust or any Series thereof as the Trustees deem necessary to
comply with the provisions of the Code, United States Treasury Regulations, or
the requirements of any other taxing authority.
(c) The Trustees shall have the power to redeem Shares of any
Series in any Shareholder's account at a redemption price determined in
accordance with Section 7.2 hereof if at any time the total number of Shares of
such Series held in such account is fewer than an established minimum selected
by the Trustees, in which event the Shareholder shall be notified that the
number of Shares in the account is fewer than the minimum and shall be allowed a
period, fixed by the Trustees, in which to avoid such redemption by increasing
the account to at least the established minimum.
ARTICLE VIII
DETERMINATION OF NET ASSET VALUE; DISTRIBUTIONS
Section 8.1. By Whom Determined. The Trustees shall have the power and
duty to determine from time to time
35
<PAGE> 41
the net asset value per share of the Shares of each Series. They may appoint one
or more Persons to assist them in the determination of the value of securities
in the portfolio of each Series and to make the actual calculations pursuant to
their directions. Any determination made pursuant to this Article VIII shall be
binding on all parties concerned.
Section 8.2. When Determined. The net asset value shall be determined
at such times as the Trustees shall prescribe in accordance with the applicable
provisions of the 1940 Act and regulations and orders from time to time in
effect thereunder. The Trustees may suspend the daily determination of net asset
value to the extent permitted by the 1940 Act or the regulations and orders from
time to time in effect thereunder.
Section 8.3. Calculation of Net Asset Value Per Share. The Trustees may
designate the means to be used for calculating the net asset value per share of
the Shares of any Series.
Section 8.4. Interim Determinations. Any determination of net asset
value other than as of times prescribed under Section 8.2 hereof may be made
either by appraisal or by calculation or estimate. Any such calculation or
estimate shall be based on changes in the market value of representative or
selected securities or on changes in recognized market averages since the last
closing appraisal and made in a manner that in the opinion of the Trustees will
fairly reflect the changes in the net asset value.
Section 8.5. Maintenance of Constant Net Asset Value Per Share. The
Trustees shall have the power to maintain the net asset value per share of the
Shares of any Series at a constant amount. In the exercise of the power granted
in this Section 8.5 the Trustees may:
(a) Suspend the accrual or payment of net income to holders of Shares
of any Series or the declaration or payment of dividends.
36
<PAGE> 42
(b) Offset or cause to be offset losses (whether realized or
unrealized) suffered in respect of the assets or any Series against net
income accrued to the account of Shareholders of such Series or against
dividends declared but not yet paid to such Shareholders.
(c) Provide for the entry in such Shareholders' accounts of debits
representing proportionate amounts of such losses.
(d) Adjust the total number of Shares outstanding of any Series by
treating each Shareholder of such Series as having made a proportionate
contribution to capital of Shares of such Series representing an aggregate
amount equal to such losses (or a portion of such losses), by accruing net
income to the accounts of such Shareholders or by declaring a dividend in
Shares of such Series representing such aggregate amount.
(e) Value the assets of such Series in accordance with Rule 2a-7 (or
any successor rule or any other rule, release or order of the Commission
pertaining to similar subject matter) under the 1940 Act.
(f) Take such other action as the Trustees may deem advisable in order
to maintain the net asset value per share at a constant amount.
Nothing in this Section 8.5 shall, however, require the Trustees to
maintain the net asset value per share of the Shares of any Series at a constant
amount in the event that the Trustees determine that the maintenance of such net
asset value per share at a constant amount is not in the best interests of the
Trust or the Shareholders of such Series.
Section 8.6. Outstanding Shares. For the purposes of this Article
VIII, outstanding Shares of any Series shall mean those Shares shown from time
to time on the books
37
<PAGE> 43
of such Series or the transfer agent for such Series as then issued and
outstanding, adjusted as follows:
(a) Shares sold shall be deemed to be outstanding Shares from the time
as of which the Trust has agreed to such sale and the sale price in currency
has been determined.
(b) Shares distributed pursuant to Section 8.7 shall be deemed to be
outstanding as of the time that Shareholders who shall receive the
distribution are determined.
(c) Shares for which a proper application for redemption has been made
or which are subject to repurchase by the Trustees shall be deemed to be
outstanding Shares up to and including the time as of which the redemption
or repurchase price is determined. After such time, they shall be deemed to
be no longer outstanding Shares and the redemption or repurchase price
until paid shall be deemed to be a liability of the appropriate Series.
Section 8.7. Distributions to Shareholders. The Trustees may at any
time and from time to time, as they may determine in good faith, allocate or
distribute to Shareholders of a Series such income and capital gains of the
Series, accrued or realized, as the Trustees may determine in good faith, after
providing for actual, accrued or estimated expenses and liabilities of such
Series (including reserves) determined in accordance with generally accepted
accounting practices. The Trustees shall have sole discretion to determine
which items shall be treated as income and which items as capital and their
determination shall be binding upon the Shareholders. Such distributions shall
be made in cash, property or Shares of the appropriate Series or any combination
thereof as determined by the Trustees. Any such distribution paid in Shares
shall be paid at the net asset value thereof as determined pursuant to this
Article VIII. The Trustees may adopt and offer to Shareholders
38
<PAGE> 44
such dividend reinvestment plans, cash dividend payout plans or related plans as
the Trustees shall deem appropriate. Inasmuch as the computation of net income
and gains for Federal income and excise tax purposes may vary from the
computation thereof on the books of the Trust, the above provisions shall be
interpreted to give the Trustees the power, in their good faith judgment, to
allocate or distribute for any fiscal year as ordinary dividends and as
capital gains distributions, respectively, additional amounts sufficient to
enable the Trust to reduce liability for taxes.
ARTICLE IX
DURATION; TERMINATION OF TRUST;
AMENDMENT; MERGERS, ETC.
Section 9.1. Duration and Termination. (a) Unless terminated as
provided herein, the Trust shall continue without limitation of time. The Trust
may be terminated by the Trustees. Upon the termination of the Trust,
(i) The Trust shall carry on no business except for the purpose of
winding up its affairs.
(ii) The Trustees shall proceed to wind up the affairs of the Trust and
all of the powers of the Trustees under this Declaration shall continue
until the affairs of the Trust shall have been wound up, including the power
to fulfill or discharge the contracts of the Trust, collect its assets,
sell, convey, assign, exchange, transfer or otherwise dispose of all or any
part of the remaining Trust Property to one or more persons at public or
private sale for consideration which may consist in whole or in part of
cash, securities or other property of any kind, discharge or pay its
liabilities, and do all other acts appropriate to liquidate its business,
provided that any sale, conveyance, assignment, exchange, transfer or other
39
<PAGE> 45
disposition of all or substantially all the Trust Property that requires
Shareholder approval under Sec tion 9.3 hereof shall receive the approval so
required.
(iii) After paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities and refunding
agreements as they deem necessary for their protection, the Trustees may
distribute the remaining Trust Property, in cash or in kind or partly each,
among the Shareholders according to their respective rights.
(b) After completion of winding up, termination of the Trust and
distribution to the Shareholders as herein provided, the Trustees shall provide
for the making of all filings and applications required by law (including,
without limitation, a certificate of cancellation of the certificate of trust of
the Trust, executed by at least one of the Trustees), and shall execute and
lodge among the records of the Trust an instrument in writing setting forth the
fact of such termination. Thereupon, the Trustees shall be dis charged from all
further liabilities and duties hereunder, and the rights and interests of all
Shareholders shall thereupon cease.
Section 9.2. Amendment Procedure. (a) Except as specifically provided
herein, the Trustees may, without Shareholder vote, amend this Declaration by an
instrument in writing or by an amended and restated Declaration signed by a
majority of the Trustees. Notwithstanding the foregoing, an amendment of this
Declaration must be approved by a Ma jority Shareholder Vote of the Trust or, if
applicable pursuant to Section 6.11, of the appropriate Series, if such
amendment would limit the right of Shareholders to vote under Section 6.11 or
amend this Section 9.2 or if Shareholder authorization is required by the 1940
Act. Notwithstanding anything else herein, no amendment to this Declaration
shall (i) limit the rights of indemnification provided in Article V hereof
with respect to actions or omissions of Covered Persons covered thereby prior to
such amendment,
40
<PAGE> 46
(ii) impair the exemption from personal liability of the Shareholders, Trustees,
officers, employees and agents of the Trust or any Series thereof or (iii)
permit assessments upon Shareholders.
(b) An instrument in writing setting forth the amendment or an amended
and restated Declaration, executed by a majority of the Trustees, shall be
conclusive evidence of such amendment when lodged among the records of the
Trust.
Section 9.3. Merger, Consolidation and Sale of Assets. The Trust may,
pursuant to an agreement of merger or consolidation, merge or consolidate with
any other corporation, association, partnership (general or limited), limited
liability company, trust, or other organization or may sell, lease, or exchange
all or substantially all of the Trust Property held by one or more Series,
including good will, upon such terms and conditions and for such consideration
when and as authorized at any Shareholders' meeting called for the purpose by
any Majority Shareholder Vote of the Trust or of such Series, as the case may
be. Notwithstanding any other provision of this Declaration or the By-Laws, in
accordance with Section 3815(f) of the Delaware Act, an agreement of merger or
consolidation which has been approved in accordance with the terms of the
preceeding sentence may effect any amendment to the Declaration or the By-Laws
or effect the adoption of a new declaration of trust or by-laws of the Trust
without a further Shareholder vote, if the Trust is the surviving or resulting
business trust in the merger or consolidation. A certificate of merger or
consolidation of the Trust shall be signed by a duly authorized officer of the
Trust.
Section 9.4. Incorporation. Notwithstanding anything else contained
herein, the Trustees may, without prior Shareholder approval, cause to be
organized or assist in organizing under the laws of any jurisdiction a
corporation or corporations or any other trust, partnership, limited liability
company, association, or other organization
41
<PAGE> 47
to take over all or less than all of the Trust Property or to carry on any
business in which the Trust shall directly or indirectly have any interest, and
may sell, convey and transfer Trust Property to any such corporation, trust,
partnership, limited liability company, association or other organization in
exchange for the shares or securities thereof or otherwise, and may lend money
to, subscribe for the shares or securities of, and enter into any contracts with
any such corporation, trust, partnership, limited liability company, association
or other organization, or any corporation, partnership, limited liability
company, trust, association or other organization in which the Trust holds or
is about to acquire shares or any other interest.
ARTICLE X
REPORTS TO SHAREHOLDERS
The Trustees shall at least semiannually submit to the Shareholders of
each Series a written financial report of the transactions of such Series,
including financial statements which shall at least annually be accompanied by a
report thereon of independent public accountants.
ARTICLE XI
MISCELLANEOUS
Section 11.1. Registered Agent; Registered Office. The registered agent
of the Trust within the State of Delaware for service of process, and the
registered office of the Trust within the State of Delaware, shall be RL&F
Service Corp., One Rodney Square, 10th Floor, Tenth and King Streets in the City
of Wilmington, County of New Castle, 19801, or such other agent or place
respectively, as the Trustees may designate from time to time by any amendment
to this Declaration and to the certificate of trust of the Trust.
42
<PAGE> 48
Section 11.2. Governing Law. The Trust and this Declaration, and the
rights and obligations of the Trustees and Shareholders hereunder, are to be
governed by and construed and administered according to the Delaware Act and
the laws of the State of Delaware; provided, however, that there shall not be
applicable to the Trust, the Trustees, or this Declaration (a) the provisions of
Section 3540 of Title 12 of the Delaware Code or (b) any provisions of the laws
(statutory or common) of the State of Delaware (other than the Delaware Act)
pertaining to trusts which are inconsistent with the rights, duties, powers,
limitations on liability of the Covered Persons, the Shareholders or the Trust
set forth in this Declaration or the By-Laws, including, without limitations,
such provisions which relate to or regulate (i) the filing with any court or
governmental body or agency of trustee accounts or schedules of trustee fees and
charges, (ii) affirmative requirements to post bonds for trustees, officers,
agents, or employees of a trust, (iii) the necessity for obtaining court or
other governmental approval concerning the acquisition, holding or disposition
of real or personal property, (iv) fees or other sums payable to trustees,
officers, agents or employees of a trust, (v) the allocation of receipts and
expenditures to income or principal, (vi) restrictions or limitations on the
permissible nature, amount or concentration of trust investments or
requirements relating to the titling, storage or other manner of holding of
trust assets, or (vii) the establishment of fiduciary or other standards or
responsibilities or limitations on the acts or powers of Trustees. The Trust
shall be of the type commonly called a "business trust", and without limiting
the provisions hereof, the Trust may exercise all powers which are ordinarily
exercised by such a trust under Delaware law. The Trust specifically reserves
the right to exercise any of the powers or privileges afforded to trusts or
actions that may be engaged in by trusts under the Delaware Act, and the absence
of a specific reference herein to any such power, privilege or action shall not
imply that the Trust may not exercise such power or privilege or take such
actions.
43
<PAGE> 49
Section 11.3. Counterparts. This Declaration may be simultaneously
executed in several counterparts, each of which shall be deemed to be an
original, and such counterparts, together, shall constitute one and the same
instrument, which shall be sufficiently evidenced by any such original
counterpart.
Section 11.4. Reliance by Third Parties. Any certificate executed by an
officer of the Trust or a Trustee certifying to: (a) the number or identity of
Trustees or Shareholders, (b) the due authorization of the execution of any
instrument or writing, (c) the form of any vote passed at a meeting of Trustees
or Shareholders, (d) the fact that the number of Trustees or Shareholders
present at any meeting or executing any written instrument satisfies the
requirements of this Declaration, (e) the form of any By-Laws adopted by or the
identity of any officers elected by the Trustees or (f) the existence of any
fact or facts which in any manner relate to the affairs of the Trust or any
Series thereof, shall be conclusive evidence as to the matters so certified in
favor of any Person dealing with the Trustees and their successors.
Section 11.5. Provisions in Conflict with Law or Regulations. (a) The
provisions of this Declaration are severable, and if the Trustees shall
determine, with the advice of counsel, that any of such provisions is in
conflict with requirements of the 1940 Act, would be inconsis tent with any of
the conditions necessary for qualification of the Trust as a regulated
investment company under the Code or is inconsistent with other applicable laws
and regulations, such provision shall be deemed never to have constituted a
part of this Declaration, provided that such determination shall not affect any
of the remaining provisions of this Declaration or render invalid or improper
any action taken or omitted prior to such determination.
(b) If any provision of this Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such
44
<PAGE> 50
provision in such jurisdiction and shall not in any manner affect such provision
in any other jurisdiction or any other provision of this Declaration in any
jurisdiction.
Section 11.6. Section Headings; Interpretation. Section headings in
this Declaration are for convenience of reference only, and shall not limit or
otherwise affect the meaning hereof. References in this Declaration to "this
Declaration" shall be deemed to refer to this Declaration as from time to time
amended, and all expressions such as "hereof", "herein" and "hereunder" shall be
deemed to refer to this Declaration as from time to time amended and not
exclusively to the article or section in which such words appear.
Section 11.7. Use of the Name "Haven". The name "Haven" and all rights
to the use of the name "Haven" belongs to Haven Capital Management, Inc.
("Haven"), the sponsor of the Trust. Haven has consented to the use by the
Trust of the identifying word "Haven" and has granted to the Trust a
non-exclusive license to use the name "Haven" as part of the name of the Trust
and the name of any Series of Shares. In the event Haven or an affiliate of
Haven is not appointed as Investment Adviser or ceases to be the Investment
Adviser of the Trust or of any Series using such name, the non-exclusive license
granted herein may be revoked by Haven and the Trust shall cease using the name
"Haven" as part of its name or the name of any Series of Shares, unless
otherwise consented to by Haven or any successor to its interests in such names.
Section 11.8. Integration. This Declaration and the By-Laws constitute
the entire agreement among the Trustees and the Shareholders pertaining to the
subject matter
45
<PAGE> 51
hereof and supersede all prior agreements and understandings
pertaining thereto.
IN WITNESS WHEREOF, the undersigned Trustees do hereby make and enter
into this Declaration as of the day and year first above written.
/s/ Stephen Ely
-------------------------
Stephen Ely
Trustee
/s/ Colin C. Ferenbach
-------------------------
Colin C. Ferenbach
Trustee
/s/ Denis M. Turko
-------------------------
Denis M. Turko
Trustee
46
<PAGE> 1
EXHIBIT 99.B2
Bylaws
BY-LAWS
OF
THE HAVEN CAPITAL MANAGEMENT TRUST
a Delaware Business Trust
As adopted on March 17, 1994
<PAGE> 2
Table of Contents
Page
----
ARTICLE I Definitions . . . . . . . . . . . . . . . . . . . 1
ARTICLE II Offices and Seal . . . . . . . . . . . . . . . . 1
Section 2.1. Principal Office . . . . . . . . . . . . . . . . 1
Section 2.2. Other Offices . . . . . . . . . . . . . . . . . . 1
Section 2.3. Seal . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE III Shareholders . . . . . . . . . . . . . . . . . . 2
Section 3.1. Meetings . . . . . . . . . . . . . . . . . . . . 2
Section 3.2. Place of Meeting . . . . . . . . . . . . . . . . 2
Section 3.3. Notice of Meetings . . . . . . . . . . . . . . . 2
Section 3.4. Shareholders Entitled to Vote . . . . . . . . . . 3
Section 3.5. Quorum . . . . . . . . . . . . . . . . . . . . . 3
Section 3.6. Adjournment . . . . . . . . . . . . . . . . . . . 3
Section 3.7. Proxies . . . . . . . . . . . . . . . . . . . . . 4
Section 3.8. Inspection of Records . . . . . . . . . . . . . . 4
Section 3.9. Record Dates . . . . . . . . . . . . . . . . . . 4
ARTICLE IV Meetings of Trustees . . . . . . . . . . . . . . 5
Section 4.1. Regular Meetings . . . . . . . . . . . . . . . . 5
Section 4.2. Special Meetings . . . . . . . . . . . . . . . . 5
Section 4.3. Notice . . . . . . . . . . . . . . . . . . . . . 5
Section 4.4. Waiver of Notice . . . . . . . . . . . . . . . . 5
Section 4.5. Adjournment and Voting . . . . . . . . . . . . . 6
Section 4.6. Compensation . . . . . . . . . . . . . . . . . . 6
Section 4.7. Quorum . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE V Executive Committee and Other Committees . . . . 6
Section 5.1. How Constituted . . . . . . . . . . . . . . . . . 6
Section 5.2. Powers of the Executive Committee . . . . . . . . 6
Section 5.3. Other Committees of Trustees . . . . . . . . . . 7
Section 5.4. Proceedings, Quorum and Manner of
Acting . . . . . . . . . . . . . . . . . . . . . 7
Section 5.5. Other Committees . . . . . . . . . . . . . . . . 7
i
<PAGE> 3
ARTICLE VI Officers . . . . . . . . . . . . . . . . . . . . . 7
Section 6.1. General . . . . . . . . . . . . . . . . . . . . . . 7
Section 6.2. Election, Term of Office and
Qualifications . . . . . . . . . . . . . . . . . . 8
Section 6.3. Resignations and Removals . . . . . . . . . . . . . 8
Section 6.4. Vacancies and Newly Created Offices . . . . . . . . 8
Section 6.5. President . . . . . . . . . . . . . . . . . . . . . 9
Section 6.6. Vice President . . . . . . . . . . . . . . . . . . 9
Section 6.7. Treasurer and Assistant Treasurers . . . . . . . . 9
Section 6.8. Secretary and Assistant Secretaries . . . . . . . . 10
Section 6.9. Subordinate Officers . . . . . . . . . . . . . . . 10
Section 6.10. Surety Bonds . . . . . . . . . . . . . . . . . . . 11
ARTICLE VII Execution of Instruments; Voting of
Securities . . . . . . . . . . . . . . . . . . . . 11
Section 7.1. Execution of Instruments . . . . . . . . . . . . . 11
Section 7.2. Voting of Securities . . . . . . . . . . . . . . . 12
ARTICLE VIII Fiscal Year; Accountants . . . . . . . . . . . . . 12
Section 8.1. Fiscal Year . . . . . . . . . . . . . . . . . . . . 12
Section 8.2. Accountants . . . . . . . . . . . . . . . . . . . . 12
ARTICLE IX Amendments; Compliance with Investment Company
Act . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 9.1. Amendments . . . . . . . . . . . . . . . . . . . . 13
Section 9.2. Compliance with Investment Company
Act . . . . . . . . . . . . . . . . . . . . 13
ii
<PAGE> 4
BY-LAWS
OF
THE HAVEN CAPITAL MANAGEMENT TRUST
ARTICLE I
Definitions
The terms "Commission", "Interested Person", "1940 Act", "Series",
"Shareholder", "Shares", "sole discretion", "Trust", "Trust Property", and
"Trustees" have the meanings given them in the Agreement and Declaration of
Trust (the "Declaration") of The Haven Capital Management Trust dated as of
March 17, 1994, as amended from time to time.
ARTICLE II
Offices and Seal
Section 2.1. Principal Office. The principal office of the Trust
shall be located in the City of New York, the State of New York.
Section 2.2. Other Offices. The Trust may establish and maintain
such other offices and places of business within or without the State
of New York as the Trustees may from time to time determine, in their sole
discretion.
Section 2.3. Seal. The seal of the Trust shall be circular in form
and shall bear the name of the Trust, the year of its organization, and the
words "Common Seal" and "a Delaware Business Trust". The form of the seal
shall be subject to alteration by the Trustees in their sole discretion
and the seal may be used by causing it or a facsimile to be impressed or
affixed or printed or otherwise reproduced. Any officer or Trustee of the
Trust shall have
<PAGE> 5
authority to affix the seal of the Trust to any document requiring the
same but, unless otherwise required by the Trustee, the seal shall not be
necessary to be placed on, and its absence shall not impair the validity
of, any document, instrument or other paper executed and delivered by or on
behalf of the Trust.
ARTICLE III
Shareholders
Section 3.1. Meetings. A Shareholders' meeting for the election of
Trustees and the transaction of other proper business shall be held when
authorized or required by the Declaration.
Section 3.2. Place of Meeting. All Shareholders' meetings shall be
held at such place within or without the State of New York as the Trustees
shall designate.
Section 3.3. Notice of Meetings. Notice of all Shareholders'
meetings, stating the time, place and purpose of the meeting, shall be given by
the Secretary or an Assistant Secretary of the Trust by mail to each
Shareholder entitled to notice of and to vote at such meeting at his address of
record on the register of the Trust or the Series, as applicable. Such
notice shall be mailed at least 10 days and not more than 90 days before the
meeting. Such notice shall be deemed to be given when deposited in the United
States mail, with postage thereon prepaid. Any adjourned meeting may be held
as adjourned without further notice, provided that any adjourned session or
sessions are held within 90 days after the date set for the original meeting.
No notice need be given (a) to any Shareholder if a written waiver of notice,
executed before or after the meeting by such Shareholder or his attorney
thereunto duly authorized, is filed with the records of the meeting, or (b) to
any Shareholder who attends the meeting without protesting prior thereto or at
its commencement the lack of notice
2
<PAGE> 6
to him. A waiver of notice need not specify the purposes of the meeting.
Section 3.4. Shareholders Entitled to Vote. If, pursuant to Section
3.9 hereof, a record date has been fixed for the determination of Shareholders
entitled to notice of and to vote at any Shareholders' meeting, each
Shareholder of the Trust entitled to vote in accordance with the applicable
provisions of the Declaration, shall be entitled to vote, in person or by
proxy, each Share or fraction thereof standing in his name on the register
of the Trust or Series, as the case may be, at the time of determining net
asset value on such record date. If the Declaration or the 1940 Act requires
that shares be voted by Series, each Shareholder shall only be entitled to
vote, in person or by proxy, each Share or fraction thereof of such Series
standing in his name on the register of the Series at the time of determining
net asset value on such record date. If no record date has been fixed for the
determination of Shareholders entitled to notice of and to vote at a
Shareholders' meeting, such record date shall be at the close of business on
the day on which notice of the meeting is mailed or, if notice is waived by all
Shareholders, at the close of business on the tenth day next preceding the day
on which the meeting is held.
Section 3.5. Quorum. A quorum for the transaction of business shall
be as set forth in the Declaration.
Section 3.6. Adjournment. The holders of a majority of the Shares
entitled to vote at the meeting and present thereat, in person or by proxy,
whether or not constituting a quorum, or, if no Shareholder entitled to
vote is present thereat in person or by proxy, any Trustee or officer present
thereat entitled to preside or act as Secretary of such meeting may adjourn the
meeting sine die or from time to time. Any business that might have been
transacted at the meeting originally called may be transacted at any such
adjourned meeting at which a quorum is present.
3
<PAGE> 7
Section 3.7. Proxies. Shares may be voted in person or by proxy.
When any Share is held jointly by several persons, any one of them may vote at
any meeting, in person or by proxy, in respect of such Share unless at or prior
to exercise of the vote the Trustees receive a specific written notice to the
contrary from any one of them. If more than one such joint owners shall be
present at such meeting, in person or by proxy, and such joint owners or their
proxies so present disagree as to any vote cast, such vote shall not be
received in respect of such Share. A proxy purporting to be executed by or on
behalf of a Shareholder shall be deemed valid unless challenged at or prior to
its exercise and the burden of proving invalidity shall rest on the challenger.
Section 3.8. Inspection of Records. The records of the Trust shall
be open to inspection by Shareholders as is permitted shareholders of a
Delaware corporation under the General Corporation Law of the State of
Delaware.
Section 3.9. Record Dates. The Trustees may fix in advance a date as
a record date for the purpose of determining the Shareholders who are entitled
to notice of and to vote at any meeting or any adjournment thereof, or to
express consent in writing without a meeting to any action of the Trustees, or
who shall receive payment of any dividend or of any other distribution, or for
the purpose of any other lawful action, provided that such record date shall be
not more than 90 days before the date on which the particular action requiring
such determination of Shareholders is to be taken. In such case, subject to
the provisions of Section 3.4, each eligible Shareholder of record on such
record date shall be entitled to notice of, and to vote at, such meeting or
adjournment, or to express such consent, or to receive payment of such dividend
or distribution or to take such other action, as the case may be,
notwithstanding any transfer of Shares on the register of the Trust after the
record date.
4
<PAGE> 8
ARTICLE IV
Meetings of Trustees
Section 4.1. Regular Meetings. The Trustees from time to time shall
provide by resolution for the holding of regular meetings for the election of
officers and the transaction of other proper business and shall fix the place
and time for such meetings to be held within or without the State of New York.
Section 4.2. Special Meetings. Special meetings of the Trustees
shall be held whenever called by the President (or, in the absence or
disability of the President, by any Vice President), the Treasurer, the
Secretary or two or more Trustees, at the time and place within or without the
State of New York specified in the respective notices or waivers of notice of
such meetings.
Section 4.3. Notice. No notice of regular meetings of the Trustees
shall be required except as required by the Investment Company Act of 1940, as
amended. Notice of each special meeting shall be mailed to each Trustee, at
his residence or usual place of business, at least two days before the day
of the meeting, or shall be directed to him at such place by telephone,
telegraph, telecopy or cable, or be delivered to him personally not later than
the day before the day of the meeting. Every such notice shall state the time
and place of the meeting but need not state the purposes thereof, except as
otherwise expressly provided by these By-Laws or by statute. No notice of
adjournment of a meeting of the Trustees to another time or place need be given
if such time and place are announced at such meeting.
Section 4.4. Waiver of Notice. Notice of a meeting need not be given
to any Trustee if a written waiver of notice, executed by him before or after
the meeting, is filed with the records of the meeting, or to any trustee
who attends the meeting without protesting prior thereto or at
5
<PAGE> 9
its commencement, the lack of notice to him. A waiver of notice need not
specify the purposes of the meeting.
Section 4.5. Adjournment and Voting. At all meetings of the
Trustees, a majority of the Trustees present, whether or not constituting a
quorum, may adjourn the meeting, from time to time. The action of a
majority of the Trustees present at a meeting at which a quorum is present
shall be the action of the Trustees unless the concurrence of a greater
proportion is required for such action by law, by the Declaration or by these
By-Laws.
Section 4.6. Compensation. Each Trustee may receive such
remuneration for his services as such as shall be fixed from time to time by
resolution of the Trustees.
Section 4.7. Quorum. One-third of the Trustees present at a meeting
shall constitute a quorum for the transaction of business, but in no case
shall a quorum be less than two Trustees.
ARTICLE V
Executive Committee and Other Committees
Section 5.1. How Constituted. The Trustees may, by resolution,
designate one or more committees, including an Executive Committee, an Audit
Committee and a Committee on Administration, each consisting of at least two
Trustees. The Trustees may, by resolution, designate one or more alternate
members of any committee to serve in the absence of any member or other
alternate member of such committee. Each member and alternate member of
a committee shall be a Trustee and shall hold office at the pleasure of the
Trustees.
Section 5.2. Powers of the Executive Committee. Unless otherwise
provided by resolution of the Trustees, the Executive Committee shall have and
may exercise all of the
6
<PAGE> 10
power and authority of the Trustees, provided that the power and authority of
the Executive Committee shall be subject to the limitations contained in the
Declaration.
Section 5.3. Other Committees of Trustees. To the extent provided by
resolution of the Trustees, other committees shall have and may exercise any of
the power and authority that may lawfully be granted to the Executive
Committee.
Section 5.4. Proceedings, Quorum and Manner of Acting. In the
absence of appropriate resolution of the Trustees, each committee may adopt
such rules and regulations governing its proceedings, quorum and manner of
acting as it shall deem proper and desirable, provided that the quorum shall
not be less than two Trustees. In the absence of any member or alternate
member of any such committee, the members thereof present at any meeting,
whether or not they constitute a quorum, may appoint a Trustee to act in the
place of such absent member or alternate member.
Section 5.5. Other Committees. The Trustees may appoint other
committees, each consisting of one or more persons who need not be Trustees.
Each such committee shall have such powers and perform such duties as
may be assigned to it from time to time by the Trustees, but shall not exercise
any power which may lawfully be exercised only by the Trustees or a committee
thereof.
ARTICLE VI
Officers
Section 6.1. General. The designated officers of the Trust shall be
a President, a Secretary, a Treasurer and may include one or more Vice
Presidents (one or more of whom may be Executive Vice Presidents), one or
more Assistant Secretaries, one or more Assistant Treasurers, and such
7
<PAGE> 11
other officers as may be appointed in accordance with the provisions of Section
6.10 of this Article VI.
Section 6.2. Election, Term of Office and Qualifications. The
designated officers of the Trust and any Series thereof (except those appointed
pursuant to Section 6.10) shall be elected by the Trustees at any regular
or special meeting of the Trustees. Except as provided in Sections 6.3 and 6.4
of this Article VI, each officer elected by the Trustees shall hold office
until his successor shall have been chosen and qualified. Any two offices,
except those of the President and a Vice President, may be held by the same
person, but no officer shall execute, acknowledge or verify any instrument in
more than one capacity if such instrument be required by law, the Declaration
or these By-Laws to be executed, acknowledged or verified by any two or more
officers. The President shall be selected from among the Trustees and may hold
such office only so long as he continues to be a Trustee. Any Trustee or
officer may be but need not be a Shareholder of the trust.
Section 6.3. Resignations and Removals. Any officer may resign his
office at any time by delivering a written resignation to the Trustees, the
President, the Secretary or any Assistant Secretary. Unless otherwise
specified therein, such resignation shall take effect upon delivery. Any
officer may be removed from office with or without cause by the vote of a
majority of the Trustees at any regular meeting or any special meeting.
Except to the extent expressly provided in a written agreement with the Trust,
no officer resigning and no officer removed shall have any right to any
compensation for any period following his resignation or removal or any right
to damages on account of such removal.
Section 6.4. Vacancies and Newly Created Offices. If any vacancy
shall occur in any office by reason of death, resignation, removal,
disqualification or other cause, or if any new office shall be created, such
vacancies or newly created offices may be filled by the Trustees at any regular
8
<PAGE> 12
or special meeting or, in the case of any office created pursuant to Section
6.10 of this Article VI, by any officer upon whom such power shall have been
conferred by the Trustees.
Section 6.5. President. The President shall be the chief executive
officer of the Trust and each Series thereof, shall preside at all
Shareholders' meetings and at all meetings of the Trustees and shall be ex
officio a member of all committees of the Trustees and each Series thereof,
except the Audit Committee. Subject to the supervision of the Trustees, he
shall have general charge of the business of the Trust and each Series thereof,
the Trust Property and the officers, employees and agents of the Trust and each
Series thereof. The President shall also be the chief operating officer of the
Trust and each Series thereof and, subject to the supervision of the Trustees,
he shall have general charge of the operations of the Trust and each Series
thereof and its officers, employees and agents. He shall have such other
powers and perform such other duties as from time to time may be assigned to
him by the Trustees.
Section 6.6. Vice President. The Trustees may, from time to time,
designate and elect one or more Vice Presidents who shall have such powers and
perform such duties as from time to time may be assigned to them by the
Trustees or the President. At the request or in the absence or disability of
the President, the Executive Vice President (or, if there are two or more
Executive Vice Presidents, the senior in length of time in office or if there
is no Executive Vice President in the absence of both the President and any
Executive Vice President, the Vice President who is senior in length of time in
office of the Vice Presidents present and able to act) may perform all the
duties of the President.
Section 6.7. Treasurer and Assistant Treasurers. The Treasurer shall
be the principal financial and accounting officer of the Trust and each
Series thereof and shall have general charge of the finances and books of
9
<PAGE> 13
account of the Trust and each Series thereof. Except as otherwise provided by
the Trustees, he shall have general supervision of the funds and property of
the Trust and each Series thereof and of the performance by the custodian
appointed pursuant to Section 3.1 (paragraph w) of the Declaration of its
duties with respect thereto. The Treasurer shall render a statement of
condition of the finances of the Trust and each Series thereof to the Trustees
as often as they shall require the same and he shall in general perform all the
duties incident to the office of the Treasurer and such other duties as from
time to time may be assigned to him by the Trustees.
Any Assistant Treasurer may perform such duties of the Treasurer as
the Treasurer or the Trustees may assign. In the absence of the Treasurer,
any Assistant Treasurer may perform all duties of the Treasurer.
Section 6.8. Secretary and Assistant Secretaries. The Secretary
shall attend to the giving and serving of all notices of the Trust and each
Series thereof and shall record all proceedings of the meetings of the
Shareholders and Trustees in one or more books to be kept for that purpose.
He shall keep in safe custody the seal of the Trust, and shall have charge of
the records of the Trust and each Series thereof, including the register of
shares and such other books and papers as the Trustees may direct and such
books, reports, certificates and other documents required by law to be kept,
all of which shall at all reasonable times be open to inspection by any
Trustee. He shall perform such other duties as appertain to his office or as
may be required by the Trustees.
Any Assistant Secretary may perform such duties of the Secretary as
the Secretary or the Trustees may assign, and, in the absence of the Secretary,
he may perform all the duties of the Secretary.
Section 6.9. Subordinate Officers. The Trustees from time to
time may appoint such other subordinate offi-
10
<PAGE> 14
cers or agents as they may deem advisable, each of whom shall have such title,
hold office for such period, have such authority and perform such duties as the
Trustees may determine in their sole discretion. The Trustees from time to
time may delegate to one or more officers or agents the power to appoint any
such subordinate officers or agents and prescribe their respective rights,
terms of office, authorities and duties.
Section 6.10. Surety Bonds. The Trustees may require any officer or
agent of the Trust and any Series thereof to execute a bond (including, without
limitation, any bond required by the 1940 Act and the rules and regulations of
the Commission) to the Trustees in such sum and with such surety or sureties as
the Trustees may determine, in their sole discretion, conditioned upon the
faithful performance of his duties to the Trust, including responsibility for
negligence and for the accounting of any of the Trust Property that may come
into his hands. In any such case, a new bond of like character shall be given
at least every six years, so that the date of the new bond shall not be more
than six years subsequent to the date of the bond immediately preceding.
ARTICLE VII
Execution of Instruments; Voting of Securities
Section 7.1. Execution of Instruments. All deeds, documents,
transfers, contracts, agreements, requisitions, orders, promissory notes,
assignments, endorsements, checks and drafts for the payment of money by the
Trust or any Series thereof, and any other instruments requiring execution
either in the name of the Trust or the names of the Trustees or otherwise
may, as the Trustees from time to time authorize by resolution, be signed by
any officer. Any such authorization may be general or confined to specific
instances.
11
<PAGE> 15
Section 7.2. Voting of Securities. Unless otherwise ordered by the
Trustees, the President or any Vice President shall have full power and
authority on behalf of the Trustees to attend and to act and to vote, or in the
name of the Trust to execute proxies to vote, at any meeting of stockholders
of any company in which the Trust may hold stock. At any such meeting such
officer shall possess and may exercise (in person or by proxy) any and all
rights, powers and privileges incident to the ownership of such stock. The
Trustees may by resolution from time to time confer like powers upon any other
person or persons.
ARTICLE VIII
Fiscal Year; Accountants
Section 8.1. Fiscal Year. The fiscal year of the Trust and any
Series thereof shall be established by resolution of the Trustees.
Section 8.2. Accountants. (a) The Trustees shall employ a public
accountant or a firm of independent public accountants as their accountant to
examine the accounts of the Trust and each Series thereof and to sign and
certify at least annually financial statements filed by the Trust. The
accountant's certificates and reports shall be addressed both to the Trustees
and to the Shareholders.
(b) A majority of the Trustees who are not Interested Persons of the
Trust shall select the accountant at any meeting held before the initial
registration statement of the Trust becomes effective, and thereafter shall
select the accountant annually by votes, cast in person, at a meeting held
within 90 days before or after the beginning of the fiscal year of the
Trust.
(c) Any vacancy occurring due to the death or resignation of the
accountant may be filled at a meeting called for the purpose by the vote,
cast in person, of a
12
<PAGE> 16
majority of those Trustees who are not Interested Persons of the Trust.
ARTICLE IX
Amendments; Compliance with Investment Company Act
Section 9.1. Amendments. These By-Laws may be amended or repealed,
in whole or in part, by a majority of the Trustees then in office at any
meeting of the Trustees, or by one or more writings signed by such a majority.
Section 9.2. Compliance with Investment Company Act. No provision of
these By-Laws shall be given effect to the extent inconsistent with the
requirements of the Investment Company Act of 1940, as amended.
13
<PAGE> 1
EXHIBIT 99.B5
Advisory Contract
THE HAVEN CAPITAL MANAGEMENT TRUST
and
THE HAVEN FUND
May 19, 1994
Haven Capital Management, Inc.
655 Third Avenue
New York, New York 10017
Investment Advisory Agreement
Dear Sirs:
The Haven Capital Management Trust (the "Trust") has been
organized as a business trust under the laws of the State of Delaware to engage
in the business of an investment company. The Trust's shares of beneficial
interest may be classified into series, each series representing the entire
undivided interest in a separate portfolio of assets. As of the date hereof,
the Trust has one series of shares, representing interests in The Haven Fund
(the "Fund").
The Trustees of the Trust (the "Trustees") have selected you to
provide investment advice to the Fund, as more fully set forth below, and you
are willing to provide
<PAGE> 2
such advice under the terms and conditions hereinafter set forth. Accordingly,
the Trust agrees with you as follows:
1. Delivery of Documents. The Trust has furnished you with
copies, properly certified or otherwise authenticated, of each of the
following:
(a) Agreement and Declaration of Trust of the Trust, dated as
of March 17, 1994 (the "Declaration").
(b) By-Laws of the Trust as in effect on the date hereof.
(c) Resolution of the Trustees selecting you as investment
adviser for the Fund and approving the form of this Agreement.
(d) Commitments, limitations and undertakings made by the Trust to
state "blue sky" authorities for the purpose of
qualifying shares of the Trust representing beneficial
interests in the Fund (the "Shares") for sale in such states.
(e) Pre-Effective Amendment No. 1 to the Trust's Registration
Statement on Form N-1A, dated
2
<PAGE> 3
May 25, 1994, registering the Shares under the Securities Act
of 1933, as amended, together with all exhibits and amendments
thereto (the "N-1A Registration Statement").
(f) Pre-Effective Amendment No. 2 to the Trust's Registration
Statement on Form N-14, dated May 25, 1994, together with all
exhibits and amendments thereto.
(g) Amended and Restated Application for an Order Pursuant to
Section 17(b) of the Investment Company Act of 1940
Authorizing Certain Transactions Which Are Otherwise
Prohibited Under Section 17(a) of the Act, dated May __, 1994.
(h) Notice of an Application for an Order Pursuant to Section
17(b) of the Investment Company Act of 1940 Authorizing
Certain Transactions Which Are Otherwise Prohibited Under
Section 17(a) of the Act, dated April 29, 1994.
3
<PAGE> 4
(i) Letter Ruling, dated February 23, 1994, issued by the Internal
Revenue Service to HCM Partners, L.P.
The Trust will furnish you from time to time with copies, properly certified or
otherwise authenticated, of all amendments of or supplements to the foregoing,
if any.
2. Investment Advisory Services. You will use your best efforts
to provide to the Fund continuing and suitable investment programs consistent
with the investment objective, policies and restrictions of the Fund. In the
performance of your duties hereunder, subject always (x) to the provisions
contained in the documents delivered to you pursuant to Section 1 as each of
the same may from time to time be amended or supplemented and (y) to the
limitations set forth in the N-1A Registration Statement as in effect from time
to time, as amended, you will, at your expense:
(a) determine from time to time which securities shall be
purchased, sold or exchanged and what portion of the
assets of the Fund shall be held in the various securities and
assets in which the Fund invests or in cash;
4
<PAGE> 5
(b) make decisions for the Fund with respect to foreign
currency matters and foreign exchange contracts, having
regard to foreign exchange controls, if any;
(c) make determinations as to the manner in which voting
rights, subscription rights, rights to consent to
corporate action and any other rights pertaining to
the Fund's assets shall be exercised;
(d) advise the Trust in connection with policy decisions to be
made by the Trustees or any committee thereof with
respect to the Fund's investments and, as requested,
furnish the Fund with research, economic and
statistical data in connection with its investments
and investment policies;
(e) submit such reports relating to the valuation of the
Fund's securities as the Trustees or the
administrator of the Fund may reasonably request;
5
<PAGE> 6
(f) place orders for the purchase, sale or exchange of
portfolio assets for the Fund's accounts with brokers
or dealers selected by you; provided, however, that
in connection with the placing of such orders and the
selection of such brokers or dealers you shall seek
to obtain execution and pricing within the policy
guidelines established by the Trustees and set forth
in the N-1A Registration Statement as in effect from
time to time;
(g) provide information in your possession to the
administrator of the Fund as such administrator may
request to maintain and preserve the records required
by the Investment Company Act of 1940, as amended
(the "Investment Company Act");
(h) obtain and evaluate such information relating to
economies, industries, businesses, securities markets
and securities as you may deem
6
<PAGE> 7
necessary or useful in the discharge of your duties hereunder;
(i) from time to time, or at any time requested by the
Trustees, make reports to the Trustees concerning
your performance of the foregoing services and
furnish advice and recommendations with respect to
other aspects of the business and affairs of the
Fund; and
(j) cooperate generally with the Trust and the Fund to provide
information necessary for the preparation of
registration statements and periodic reports to be
filed with the Securities and Exchange Commission,
including post-effective amendments to the Form N-1A
Registration Statement, filings on Form N-SAR,
periodic statements, reports to shareholders,
shareholder communications and proxy material
furnished to holders of the Shares, filings with
state "blue sky" authorities and with the United
States
7
<PAGE> 8
agencies responsible for tax matters, and other reports
and filings of like nature.
3. Expenses of the Fund. You will pay for maintaining the
staff and personnel necessary to perform your obligations under this Agreement
and shall, at your own expense, maintain the office space, facilities,
equipment and personnel that are reasonably necessary to carry out your
obligations hereunder. In addition, you shall pay the reasonable salaries,
fees and expenses of such of the Trust's officers and employees (including
payroll taxes) and any fees and expenses of such of the Trustees as are
directors, officers or employees of you.
4. Expenses of the Trust or the Fund Not Paid by You. You
will not be required to pay any expenses which this Agreement does not
expressly make payable by you. In particular, and without limiting the
generality of the foregoing but subject to the provisions of Section 3, the
Trust and the Fund assume and shall pay or cause to be paid fees to you and the
administrator of the Trust and the Fund and all other expenses of the Trust and
the Fund including, without limitation: (i) charges and expenses of any
8
<PAGE> 9
custodian, subcustodian or depositary appointed by the Trust or the Fund for
the safekeeping of cash, securities or property and fees and expenses of any
transfer agent, dividend paying agent and registrar for the Fund; (ii) charges
and expenses of accounting and auditing; (iii) expenses and fees associated
with registering and qualifying securities issued by the Trust and the Fund for
sale with the Securities and Exchange Commission and in various states,
expenses of preparing Share certificates, if any, and other expenses in
connection with the issuance, offering or distribution of securities issued by
the Trust and the Fund, including freight insurance and other charges in
connection with the shipment of the Fund's portfolio securities; (iv) expenses
and fees associated with obtaining an order pursuant to Section 17(b) of the
Investment Company Act authorizing certain transactions; (v) expenses of
stationery, preparing, printing and distributing reports, notices and dividends
and other documents to the Fund's shareholders, including, without limitation,
to the extent not borne by the Fund's administrator, distributor or transfer
agent; (vi) interest on any indebtedness of the
9
<PAGE> 10
Fund; (vii) governmental fees and taxes of the Trust and the Fund, including
any stock transfer tax payable on a portfolio security of the Fund; (viii)
brokerage commissions and other expenses incurred in acquiring or disposing of
the Fund's portfolio securities; (ix) costs of trustees' and officers'
insurance and fidelity bonds; (x) compensation and expenses of the Trustees who
are not interested persons of you, including out-of-pocket travel expenses;
(xi) costs and expenses incidental to holding meetings of the Trustees, or any
committees thereof, or meetings of shareholders; (xii) fees for legal, auditing
and consulting services and litigation expenses, including settlement or
arbitration costs; (xiii) dues and expenses incurred in connection with
membership in investment company organizations and expenses relating to
investor and public relations; and (xiv) costs, expenses and fees incurred in
connection with obtaining, maintaining, refinancing or repaying indebtedness.
5. Compensation of the Adviser. For all services to be
rendered, facilities furnished and expenses paid or assumed by you as herein
provided, the Trust will pay you, on behalf of the Fund, an investment advisory
fee,
10
<PAGE> 11
which shall accrue daily and be payable monthly in arrears, calculated at an
annual rate of 0.60% of the Fund's average daily net assets.
If this Agreement becomes effective subsequent to the first day of
a month or shall terminate before the last day of a month, compensation for
that part of the month that this Agreement is in effect shall be subject to a
pro rata adjustment based on the number of days elapsed in the relevant month
as a percentage of the total number of days in such month in order to permit
the fee to be calculated in a manner consistent with the calculation of the fee
as set forth above. During any period when the determination of net asset
value is suspended by the Trustees, the average net asset value of a Share for
the last day prior to such suspension shall for this purpose be deemed to be
the average net asset value at the close of each succeeding day until it is
again determined.
In the event the operating expenses of the Fund, including amounts
payable to you pursuant to this Section 5, for any fiscal year of the Fund
ending on a date on which this Agreement is in effect, exceed the expense
limitations
11
<PAGE> 12
applicable to the Fund imposed by applicable state securities laws or
regulations thereunder, as such limitations may be raised or lowered from time
to time, you shall reduce your management fee by the extent of such excess and,
if required pursuant to any such laws or regulations, will reimburse the Fund
in the amount of such excess; provided, however, to the extent permitted by
law, there shall be excluded from such expenses the amount of any interest,
taxes, brokerage commissions and extraordinary expenses (including but not
limited to legal claims and liabilities and litigation costs, including
settlement or arbitration costs, and any indemnification related thereto) paid
or payable by the Fund. Whenever the expenses of the Fund exceed a pro rata
portion of the applicable annual expense limitations, the estimated amount of
reimbursement under such limitations shall be applicable as an offset against
the monthly payment of the management fee due to you. Should two or more such
expense limitations be applicable as at the end of the last business day of the
month, that expense limitation which results in the largest reduction in your
fee shall be applicable.
12
<PAGE> 13
The net asset value of the Fund shall be determined pursuant to
the applicable provisions of the Trust's Declaration of Trust and applicable
law, and as described in the N-1A Registration Statement, as such registration
statement may be amended from time to time.
6. Other Activities of Adviser and Its Affiliates. Nothing
herein contained shall prevent you or any affiliate or associate of yours from
engaging in any other business or from acting as investment adviser or
investment manager for any other person or entity, whether or not having
investment policies or portfolios similar to that of the Fund; and it is
specifically understood that officers, directors, and employees of yours and of
your subsidiaries, if any, may continue to engage in providing portfolio
management services and advice to other investment companies, whether or not
registered, and to other investment advisory clients of yours.
7. Avoidance of Inconsistent Position. In connection with
purchases or sales of portfolio securities for the account of the Fund, neither
you nor any of your directors, officers or employees will act as principal or
13
<PAGE> 14
agent or receive any commission. If any occasion should arise in which you
advise persons concerning the Shares, you will act solely on your own behalf
and not in any way on behalf of the Trust or the Fund.
8. No Partnership or Joint Venture. The Trust, the Fund and
you are not partners of or joint venturers with each other and nothing herein
shall be construed so as to make them such partners or joint venturers or
impose any liability as such on any of them.
9. Name of Trust and Fund. The Trust and the Fund may use
the name "Haven" or any name derived from or similar to the name "Haven Capital
Management, Inc." only for so long as this Agreement or any extension, renewal,
or amendment hereof remains in effect. At such time as such Agreement shall no
longer be in effect, the Trust and the Fund will (to the extent they lawfully
can) cease to use such a name or any other name indicating that the Fund is
advised or they are otherwise connected with you. The Trust acknowledges that
it has adopted the name "The Haven Capital Management Trust," and the Fund has
adopted the name "The Haven Fund," through permission of Haven Capital
Management,
14
<PAGE> 15
Inc., a Delaware corporation, and agrees that Haven Capital Management, Inc.
reserves to itself and any successor to its business the right to grant the
non-exclusive right to use the name "Haven" or any similar name to any other
corporation or entity, including but not limited to any investment company of
which Haven Capital Management, Inc., or any subsidiary or affiliate thereof or
any successor to the business of any thereof shall be the investment adviser.
10. Limitation of Liability of Adviser. You shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Trust or the Fund in connection with the matters to which this Agreement
relates if such actions by you were performed in good faith and were reasonably
believed by you to be in or not opposed to the best interests of the Trust or
Fund, as the case may be, except a loss resulting from willful misfeasance, bad
faith or gross negligence on your part in the performance of your duties or
from reckless disregard by you of your obligations and duties under this
Agreement. Any person, even though also employed by you, who may be or become
an employee of and paid by the Trust or the Fund shall be deemed, when
15
<PAGE> 16
acting within the scope of his employment by the Trust or the Fund, to be
acting in such employment solely for the Trust or the Fund and not as your
employee or agent.
You shall not be liable for any losses caused by disturbances of
your operations by virtue of force majeure, war, riot, or damage caused by
nature or due to other events for which you are not responsible (e.g., strike,
lock-out or losses caused by the imposition of foreign exchange controls,
expropriation of assets or other acts of domestic or foreign authorities).
The presence of exculpatory language in this Agreement shall not
be deemed by the Trust, the Fund, you or any other party appointed pursuant to
this Agreement, including without limitation any custodian, as in any way
limiting causes of action and remedies which may, notwithstanding such
language, be available to the Trust or Fund either under common law or
statutory law principles applicable to fiduciary relationships or under the
federal securities laws.
11. Duration and Termination of this Agreement. This Agreement
shall remain in force until the second anni-
16
<PAGE> 17
versary of the date upon which this Agreement was executed by the parties
hereto, and from year to year thereafter, but only so long as such continuance
is specifically approved at least annually by (a) a majority of the Trustees
who are not interested persons of you or (other than as Trustees) of the Trust,
cast in person at a meeting called for the purpose of voting on such approval,
and (b) either (i) the Trustees or (ii) a majority of the outstanding voting
securities of the Fund. This Agreement may, on 60 days' written notice, be
terminated at any time by the Trustees without the payment of any penalty by
the Trust or the Fund, by vote of a majority of the outstanding voting
securities of the Fund, or by you. Termination of this Agreement with respect
to the Fund shall not be deemed to terminate or otherwise invalidate any
provision of any contract between you and any other series of the Trust. This
Agreement shall automatically terminate in the event of its assignment. In
interpreting the provisions of this Section 11, the definitions contained in
Section 2(a) of the Investment Company Act (particularly the definitions of
"assignment", "interested person" and "voting security") shall be applied.
17
<PAGE> 18
12. Amendment of This Agreement. No provision of this Agreement
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought, and no amendment, transfer,
assignment, sale, hypothecation or pledge of this Agreement shall be
effective until approved by (a) the Trustees, including a majority of the
Trustees who are not interested persons of you or (other than as Trustees) of
the Trust cast in person at a meeting called for the purpose of voting on such
approval, and (b) a majority of the outstanding voting securities of the Fund,
as defined in the Investment Company Act, provided that no approval shall be
required pursuant to this clause (b) in respect of any contract between you and
the holders of outstanding voting securities of any other series of the Trust
other than the Fund.
13. Notice. Any notice or other communication required to be
given pursuant to this Agreement shall be in writing or by fax, with hard copy
to follow, and shall be effective upon receipt. Notices and communications
shall be
18
<PAGE> 19
given: (a) to the Trust and the Fund c/o Haven Capital Management, Inc., 655
Third Avenue, New York, New York 10017, Attention: Colin C. Ferenbach and (b)
to you at the same address.
14. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York and the applicable provisions
of the Investment Company Act. To the extent the applicable laws of the State
of New York, or any of the provisions herein, conflict with the applicable
provisions of the Investment Company Act, the latter shall control.
15. Miscellaneous. 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 simultaneously in two or more counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. The names The Haven Capital Management
Trust and The Haven Fund are the designations of the Trustees under the
Declaration, dated as of March 17, 1994, as amended from time to
19
<PAGE> 20
time. The Declaration has been filed with the Secretary of State of the State
of Delaware. The obligations of the Trust or the Fund are not binding upon any
of the Trustees, shareholders, officers, employees or agents of the Trust
individually, but only upon the assets and property of the Fund.
Yours very truly,
THE HAVEN CAPITAL MANAGEMENT
TRUST, for itself and its
initial series, The Haven Fund
By /s/ Colin C. Ferenbach
----------------------
President
The foregoing Agreement
is hereby agreed to as of
the date hereof.
HAVEN CAPITAL MANAGEMENT, INC.
By /s/ Denis M. Turko
------------------
Title:
20
<PAGE> 1
EXHIBIT 99.B6-1
Standard broker -
dealer agreement
BROKER-DEALER AGREEMENT
FOR THE SALE OF SHARES OF THE
HAVEN CAPITAL MANAGEMENT TRUST
Ladies and Gentlemen:
We are the principal underwriter (as such term is defined in the Investment
Company Act of 1940, as amended) of the offering of shares of beneficial
interest of the Haven Fund (the "Fund"), a portfolio of The Haven Capital
Management Trust (the "Trust"), and the agent for the continuous distribution
of such shares pursuant to the terms of the Distribution Agreement between us
and the Fund. You desire to enter into an Agreement with us for the sale of
shares of beneficial interest in the Fund. As used herein, the term
"Prospectus" shall mean the prospectus and, unless the context otherwise
requires, related statement of additional information (the "Statement of
Additional Information") incorporated therein by reference, as the same are
amended and supplemented from time to time, of the Fund.
In consideration for the mutual covenants contained herein, it is hereby agreed
that our respective rights and obligations shall be as follows:
1. Customers of yours who purchase shares are for all purposes your
customers and not customers of us or the Fund. You shall be responsible for
opening, approving and monitoring customer accounts and for the review and
supervision of these accounts, all in accordance with the rules of the
Securities and Exchange Commission ("SEC") and National Association of
Securities Dealers, Inc. (the "NASD"). In no transaction involving shares
shall you have any authority to act as agent for the Fund or for us.
2. In offering shares, you shall rely solely and conclusively on the
representations contained in the Prospectus. You agree that you shall not
offer or sell shares except in accordance with all applicable federal and state
laws and the rules and regulations of applicable regulatory agencies or
authorities. In connection with offers to sell and sales of shares of the
Fund, you agree to deliver or cause to be delivered to each person to whom any
such offer or sale is made, at or prior to the time of such offer or sale, a
copy of the Prospectus and, upon request, Statement of Additional Information,
annual and interim reports, and proxy solicitation materials relating to the
Fund in reasonable quantities upon request.
3. You shall not make any representations concerning shares other than
those contained in the Prospectus or in any promotional materials or sales
literature furnished to you by us. You shall not furnish or cause to be
furnished to any person or display or publish any information or materials
relating to the Fund (including, without limitation, promotional materials and
sales literature, advertisements, press releases, announcements, statements,
posters, signs or other similar material), except such information and
materials as may be furnished to you by us, and such other information and
materials as may be approved in writing by us.
<PAGE> 2
4. All orders for the purchase of any shares shall be executed at the
public offering price per share (i.e., the net asset value per share) and all
orders for the redemption of any shares shall be executed at the net asset
value per share, in each case as described in the Prospectus. The minimum
initial purchase order shall be as set forth in the Prospectus. The Fund
reserves the right to reject any purchase order. The Fund and us also reserve
the right, at our discretion and without notice, to suspend the sale of shares
or withdraw entirely the sale of shares.
5. The procedures relating to orders and the handling thereof will be
subject to the terms of the Prospectus and instructions either we or the Fund's
transfer agent provide from time to time. No conditional orders will be
accepted. Purchase orders will be made only for the purpose of covering
purchase orders already received from your customers. Further, you shall place
purchase orders from customers with the Fund immediately and shall not withhold
the placement of such orders so as to profit yourselves; provided, however,
that the foregoing shall not prevent the purchase of shares by you for your own
bona fide investment. You agree that: (a) you shall not effect any
transactions (including, without limitation, any purchases and redemptions) in
any shares registered in the name of, or beneficially owned by, any customer
unless such customer has granted you full right, power and authority to effect
such transactions on his or her behalf, and (b) the Fund, each Transfer Agent
and we and their or our agents, employees, controlling persons and affiliates
shall not be liable for, and shall be fully indemnified and held harmless by
you from and against, any and all claims, demands, liabilities and expenses
(including, without limitation, reasonable attorney's fees) which may be
incurred by us or any of the foregoing persons entitled to indemnification from
you hereunder arising out of or in connection with the execution of any
transactions in shares registered in the name of, or beneficially owned by, any
customer in reliance upon any oral or written instructions believed to be
genuine and to have been given by or on behalf of you. The indemnification
agreement contained in this Paragraph 5 shall survive the termination of this
Agreement.
6. Payment for orders from you for the purchase of shares will be made in
accordance with the terms of the Prospectus. If payment of any purchase order
is not received in accordance with the terms of the Prospectus, we reserve the
right, without notice, to cancel the sale and hold you responsible for any loss
sustained as a result thereof.
7. You acknowledge that the terms of the Prospectus provides that
certificates for shares will not be issued under any circumstances and you
agree to be so bound.
8. You hereby represent and warrant that: (a) you are a corporation,
partnership or other entity duly organized and validly existing in good
standing under the laws of the jurisdiction in which you are organized; (b) the
execution and delivery of this Agreement and the performance of the
transactions contemplated hereby have been duly authorized by all necessary
action and all other authorizations and approvals (if any) required for your
lawful execution and delivery of this Agreement and your performance hereunder
have been obtained; and (c) upon execution and delivery by you, and assuming
due and valid execution and delivery by us, this Agreement will constitute a
valid and binding agreement, enforceable against you in accordance with its
terms.
<PAGE> 3
9. You further represent and warrant that you are a member of the NASD and
you agree to abide by all of the rules and regulations of the NASD, including,
without limitation, its Rules of Fair Practice. You agree to comply with all
applicable federal and state laws, rules and regulations and agree to indemnify
and hold the Funds, its investment adviser, and theirs and our agents,
controlling persons and affiliates and us harmless from any loss or damage
resulting from any failure on your part to comply with all applicable laws,
rules and regulations. We agree to inform you, upon your request, as to the
states in which we believe the shares of the Fund have been qualified for sale
under, or are exempt from the requirements of, the respective securities laws
of such states, but we shall have no obligation or responsibility to make
shares available for sale to your customers in any jurisdiction. You agree to
notify us immediately in the event of your expulsion or suspension from the
NASD. Your expulsion or suspension from the NASD will automatically terminate
this Agreement immediately without notice.
10. The names and addresses and other information concerning your
customers are and shall remain your sole property, and neither we nor our
affiliates shall use such names, addresses or other information for any purpose
except in connection with the performance of our duties and responsibilities
hereunder and except for servicing and informational mailings relating to the
Fund. Notwithstanding the foregoing, this Paragraph 10 shall not prohibit us
or any of our affiliates from utilizing for any purpose the names, addresses or
other information concerning any of your customers if such names, addresses or
other information are obtained in any manner other than from you pursuant to
this Agreement. The provisions of this Paragraph 10 shall survive the
termination of this Agreement.
11. In consideration of your providing distribution and marketing services
in the promotion of the sale of shares of the Fund, and furnishing services and
assistance to your customers who invest in and own shares of the Fund, we will
pay to you, and you will accept as full payment therefor, a fee at the annual
rate of 0.25% of the average daily net asset value of the shares beneficially
owned by your clients for whom you are the dealer of record or holder of record
or which are owned by your clients whose records, as maintained by the Fund or
its agents, designate your firm as the client's dealer of record (the "Clients'
Shares"), which fee will be computed daily and payable quarterly. For purposes
of determining the fees payable under this Section 11, the average daily net
asset value of the Clients' Shares will be computed in the manner specified in
the Fund's Registration Statement (as the same is in effect from time to time)
in connection with the computation of the net asset value of shares for
purposes of purchases and redemptions. The fee rate stated above may be
prospectively increased or decreased by us, in our sole discretion, at any time
upon notice to you. In addition, you understand that the payments of
distribution fees to you shall be made from monies we receive under the Fund's
Distribution Plan ("Plan") adopted pursuant to Rule 12b-1 under the Investment
Company Act of 1940, as amended (the "1940 Act") and as such, the payment of
such fees is subject to the provisions of said Rule and Plan, as well as any
other applicable rules or regulations promulgated by the Securities and
Exchange Commission.
<PAGE> 4
12. You will furnish us or our designee with such information as we or
they may reasonably request, and will otherwise cooperate with us and our
designees (including, without limitation, any auditors designated by us or the
Fund), in connection with the preparation of reports to us or the Fund's Board
of Directors concerning this Agreement and the monies paid or payable by us
pursuant hereto, as well as any other reports or filings that may be required
by law, and any other documents or information relating to this Agreement as we
may reasonably request from time to time.
13. By your written acceptance of this Agreement, you represent, warrant
and agree that: (i) the compensation payable to you hereunder, together with
any other compensation you receive from clients for services contemplated by
this Agreement, will not be excessive or unreasonable under the laws and
instruments governing your relationships with clients; and (ii) you will
provide to clients a schedule of any fees that you may charge to them relating
to the investment of their assets in shares of the Fund.
14. Neither this Agreement nor the performance of the services of the
respective parties hereunder shall be considered to constitute an exclusive
arrangement, or to create a partnership, association or joint venture between
you and us. Neither party hereto shall be, act as, or represent itself as, the
agent or representative of the other, nor shall either party have the right or
authority to assume, create or incur any liability or any obligation of any
kind, express or implied, against or in the name of, or on behalf of, the other
party. This Agreement is not intended to, and shall not, create any rights
against either party hereto by any third party solely on account of this
Agreement. Neither party hereto shall use the name of the other party in any
manner without the other party's prior consent, except as required by any
applicable federal or state law, rule or regulation, and except pursuant to any
promotional programs mutually agreed upon in writing by the parties hereto.
15. Except as otherwise specifically provided herein, all notices required
or permitted to be given pursuant to this Agreement shall be given in writing
and delivered by personal delivery or by postage prepaid, registered or
certified United States first class mail, return receipt requested, or by
facsimile, telex, telegram or similar means of same day delivery (with a
confirming copy by mail as provided herein). Unless otherwise notified in
writing, all notices to us shall be given or sent to us at our offices located
at 207 East Buffalo Street, Suite 400, Milwaukee, Wisconsin, 53202, and all
notices to you shall be given or sent to you at your address shown below.
16. This Agreement shall become effective on the date a fully executed
copy of this Agreement is received by us. This Agreement shall continue in
effect until amended or terminated as provided herein provided the Plan and
related agreement are approved at least annually by vote of the Trustees of the
Trust who are not "interested persons" (as defined in the 1940 Act) and have no
direct or indirect financial interest in the operation of the Plan or any
agreement related thereto, cast in person at a meeting called for the purpose
of voting on such Plan or agreement. This Agreement may be terminated without
penalty at any time by either party upon written notice to the other party, by
a majority of the Trustees of the Trust who are not "interested persons" and
who have no direct or indirect financial interest in the operation of
<PAGE> 5
the Plan or any agreement related thereto, or by a vote of a majority of the
outstanding voting securities of the Fund. In addition, this Agreement shall
terminate automatically in the event of its assignment (as defined in the 1940
Act) or upon the happening of any event that terminates the Trust's
Distribution Agreement with us.
17. This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Wisconsin, without giving effect to
principles of conflicts of laws.
Very truly yours,
SUNSTONE DISTRIBUTION SERVICES, LLC.
By:
--------------------------------
Date:
-------------------------------
If you agree to be legally bound by the provisions of this Agreement, please
sign where indicated below and return such executed copy to us at 207 East
Buffalo Street, Suite 400, Milwaukee, Wisconsin, 53202. Upon receipt thereof,
this instrument and such signed duplicate copy will evidence the agreement
between us.
Dealer:
-----------------------------
Address:
-----------------------------
-----------------------------
-----------------------------
By:
---------------------------------
Authorized Officer
Name and Title:
---------------------
---------------------
Date:
-------------------------------
Contact Person:
---------------------
Phone:
------------------------------
<PAGE> 1
EXHIBIT 99.B6-2
Services Agreement
with Fidelity
SERVICES AGREEMENT
This Agreement is made as of the 6th day of March, 1996 between: (1) the
Fidelity Investment Advisor Group ("FIAG" of Fidelity Brokerage Services, Inc.
("FBSI" and National Financial Services Corporation, ("NFSC") together
"Fidelity"), and (2) the undersigned ("Fund/Agent").
RECITALS
A. Fund/Agent is either (i) an open-end investment company with one or
more series or classes of shares (each such series or class of shares a
"Fund"), (ii) an investment adviser to or administrator for the Funds, (iii)
the principal underwriter or distributor for the Funds, or (iv) the transfer
agent for the Funds.
B. Fund/Agent wishes to have Fidelity to provide to Fund/Agent or on its
behalf certain administrative services with respect to beneficial owners of
shares ("Shareholder(s)") of such Funds which Fidelity makes available to
Shareholders through securities brokerage accounts carried by NFSC on behalf of
FIAG.
C. Fidelity agrees to provide such services on the terms and conditions
set forth herein.
AGREEMENT
THEREFORE in consideration of the mutual promises set forth herein, the
parties agree as follows:
I. SHAREHOLDER SERVICES
A. Shareholder Account Set-Up and Maintenance - To facilitate
Shareholders' ownership of shares of any Fund, Fidelity shall provide to FIAG
adequate facilities and procedures to: (1) establish and maintain Fund
investments on behalf of Shareholders within a consolidated brokerage
account(s) on the Fidelity transaction processing and recordkeeping system, and
(2) access Shareholders' current Fund information including, but not limited
to, share balances, dividend information and transaction history.
B. Shareholder Assistance - Fidelity shall make available to FIAG,
Shareholders and their agents any information maintained by Fidelity as may be
necessary to support and resolve Shareholder servicing inquiries. Fidelity
personnel will assist FIAG in the investigation of Shareholder inquiries when
necessary. FIAG will support Shareholder service inquiries from Shareholders
who maintain brokerage accounts with FIAG.
<PAGE> 2
C. Transaction Processing and Settlement - The Fidelity transaction
processing system shall enable Shareholders to purchase, redeem and exchange
shares of Funds available through Fidelity. NFSC shall facilitate settlement
with each Fund of Shareholder transactions in such Fund insofar as such
transactions are transmitted to NFSC by FIAG on behalf of Shareholders.
D. Shareholder Account Statement Preparation and Distribution - With
respect to each Shareholder holding Fund investments through Fidelity, Fidelity
shall deliver or cause to be delivered to such Shareholder monthly statements
when there has been activity in such Shareholder's brokerage account during
such month, or quarterly statements during periods when there has been no
monthly account activity. Statements will include transaction detail for the
statement period for each Fund in which shares were purchased, redeemed or
exchanged, and a summary of the number of Fund shares owned and share value
thereof as of the statement date to the extent such value is provided by the
Fund.
E. Confirmation Preparation Distribution - Fidelity shall generate a
written confirmation for each purchase, redemption and exchange transaction
affecting each Shareholder's Fund investments held through Fidelity to the
extent such confirmation is required, and such confirmation shall be
distributed to Shareholders through or on behalf of FIAG.
F. Payment of Fund Distributions - NFSC shall distribute to Shareholders
all dividend, capital gain or other payments authorized by the Fund and
distributed to and received by NFSC, and such distributions shall be credited
to Shareholders in accordance with the instructions provided by each
Shareholder, including but not limited to dividend reinvestment into the Fund,
or cash payments of distributions.
G. Prospectus Fulfillment - FIAG will provide a prospectus to prospective
shareholders or their agent upon request, provided Fund/Agent has provided
adequate copies thereof to FIAG. Subsequent to any Shareholder's acquisition
of shares of a Fund by purchase or exchange, Fidelity shall provide to such
Shareholder a confirming prospectus for such Fund to the extent such prospectus
is required with respect to such acquisition and is provided by the Fund to
Fidelity or its designee.
Fund/Agent acknowledges and agrees that Fidelity is not responsible for
(i) the compliance of any prospectus or supplement thereto, annual report,
proxy statement or item of advertising or marketing material of or relating to
any Fund, which is prepared by Fund or Fund/Agent, with any applicable laws,
rules or regulations, (ii) the registration or qualification of any shares of
any Fund under any federal or applicable state laws or (iii) the compliance by
any Fund or Fund/Agent or any "affiliated person" (as that term is defined in
the rules under the Investment Company Act of 1940, as amended), with any
applicable federal or state law, rule, or regulation or the rules and
regulations of any self-regulatory organization with jurisdiction over such
Fund, Fund Agent or affiliated person.
<PAGE> 3
H. Account Level Tax Reporting - NFSC shall provide to Shareholders
through FIAG such reports and information as may be required by the
then-prevailing laws and regulations under the Internal Revenue Code for
non-retirement accounts and qualified and non-qualified retirement plan
accounts.
II. REPRESENTATIONS AND WARRANTIES
A. Fund/Agent represents and warrants that:
(1) it has the requisite authority to enter into this agreement
on its own behalf and on behalf of the Fund(s), and
(2) that the payment to NFSC of any fees pursuant hereto:
(a) has been duly authorized by the Fund(s), the Board of
Trustees of the Fund(s), or any other persons to the extent such
authorization is required to properly make such payment;
(b) is properly disclosed in the relevant Fund prospectus
to the extent such disclosure may be required, and
(c) is in material conformity with all federal, state and
industry laws or regulations to which the Fund or its agents are
subject.
B. FBSI and NFSC each represent and warrant that:
(1) it is a corporation duly organized under the laws of the
Commonwealth of Massachusetts and is duly registered and/or
qualified as a broker/dealer with the SEC, NASD and in every state
or territory of the United States of America (including the District
of Columbia) where such registration or qualification is required
and has the requisite authority to enter into this Agreement and to
carry out the services contemplated herein:
(2) the execution and delivery of this Agreement and the
performance of the services contemplated herein have been duly
authorized by all necessary corporate action in its part, and this
Agreement constitutes the valid and binding obligations of FBSI and
NFSC; and
(3) it is in material conformity with all federal, state and
industry laws or regulations to which it is subject.
(4) Upon written instruction from Fund/Agent, FIAG will accept
orders for the purchase of shares of a fund only from investment
advisors registered under the Investment Advisors Act of 1940.
<PAGE> 4
C. Each party hereto represents and warrants that it shall provide to
the others such information or documentation necessary for such party
to fulfill its obligations hereunder, such other information or
documentation as any party may reasonably request, and that it shall
comply with such operating policies and procedures as the parties may
adopt from time to time.
III. FEES
For the services provided by Fidelity hereunder, Fund/Agent shall pay to
FIAG a fee with respect to each Fund, which fee shall be based upon a
percentage per annum of the average daily value of the aggregate number of
shares of the Fund held by NFSC for the accounts of customers of FIAG. Such
fee shall be calculated and paid in accordance with Exhibit A hereto.
In the event the parties agree to material changes to the scope of
services provided hereunder, the parties agree to negotiate in good faith as to
the appropriate amendment to the fees due FIAG.
IV. INDEMNIFICATION
Fund/Agent shall indemnify and hold harmless Fidelity and each officer,
employee and agent of Fidelity from and against any and all claims, demands,
actions, losses, damages, liabilities, or costs, charges, counsel fees, and
expenses of any nature ("Losses") arising out of (ii) any inaccuracy or
omission in any prospectus or supplement thereto, registration statement,
annual report or proxy statement, of any Fund or Fund/Agent or any advertising
or promotional material generated by any Fund or Fund/Agent, (ii) any breach by
Fund/Agent of any representation, warranty, covenant, or agreement contained in
this Agreement and (iii) any action taken or omitted to be taken by Fidelity
pursuant to this Agreement, except to the extent such Losses result from
Fidelity's breach of this Agreement, willful misconduct, or gross negligence.
I. CONFIDENTIALITY
Each party acknowledges and understands that any and all technical, trade
secret, or business information, including, without limitation, financial
information, business or marketing strategies or plans, product development or
customer information, which is disclosed to the other or is otherwise obtained
by the other, its affiliates, agent or representatives during the term of the
Agreement (the "Proprietary Information") is confidential and proprietary,
constitutes trade secrets of the owner and is of great value and importance to
the success of the owner's business. Each party agrees to use its best efforts
(the same being not less than that employed to protect his own proprietary
information) to safeguard the Proprietary Information and to prevent the
unauthorized, negligent or inadvertent use or disclosure thereof. Neither
party shall, without the prior written approval of any officer of the other,
directly or indirectly, disclose the Proprietary Information to any person or
business entity except for a limited number of employees,
<PAGE> 5
attorneys, accountants and other advisors of the other on a need-to-know basis
or as may be required by law or regulation. Each party shall promptly notify
the other in writing of any unauthorized, negligent or inadvertent use or
disclosure of Proprietary Information. Each party shall be liable under this
Agreement to the other for any use or disclosure in violation of this Agreement
by its employees, attorneys, accountants, or other advisors or agents. This
Section V shall continue in full force and effect notwithstanding the
termination of this Agreement.
VI. DURATION AND TERMINATION OF AGREEMENT
With respect to any Fund, this agreement shall become effective upon the
date such Fund is identified on Exhibit B, and this Agreement is approved by
the Fund or its Board of Trustees if such approval is required, and shall
continue in force for one year, and shall thereafter continue automatically for
successive annual periods unless earlier terminated and subject to any periodic
approval required by the Fund or its Board of Trustees. This Agreement is
terminable as to any Fund by any party upon 60 days written notice thereof to
the other parties or upon default hereof provided that such default shall not
terminate this Agreement to the extent the defaulting party has been notified
of such default by the non-defaulting party and the defaulting party cures such
default within 10 business days of notice of such default.
After the date of termination as to any Fund, no fee will be due with
respect to any shares of such Fund that are first placed or purchased in FIAG
customer accounts after the date of such termination. However, notwithstanding
any such termination. Fund/Agent will remain obligated to pay FIAG the fee as
to each share of such Fund that was considered in the calculation of the fee as
of the date of such termination, for so long as such share is held in the FIAG
account. This Agreement, or any provision hereof, shall survive termination to
the extent necessary for each party to perform its obligations with respect to
shares for which a fee continues to be due subsequent to such termination.
This Agreement shall automatically terminate in the event of its assignment.
VII. MISCELLANEOUS
A. Custody - Fund/Agent acknowledges that Fund shares maintained by the
Fund for shareholders hereunder are held in custody for the exclusive
benefit of customers of NFSC and FIAG and shall be held free of any
right, charge, security interest, lien or claim against NFSC in favor of
the Fund or its agents acting on behalf of the Fund.
<PAGE> 6
B. Transaction Charges - During the term of this Agreement FIAG shall not
assess against or collect from its brokerage customers any transaction
fee upon the purchase or redemption of any Fund's shares that are
considered in calculating the fee due pursuant to Section III hereof.
The parties acknowledge and agree that FIAG reserves the right to collect
such transaction fees from certain customers (including "ActiveTraders,"
as FIAG may define that term) for certain special trading services and
from other customers upon such other customers' redemption of certain
shares.
C. Use of Fidelity Investments Name - Fund/Agent will not, nor will
Fund/Agent cause or permit any Fund to, describe or refer the name
"Fidelity Investments" or any derivation thereof, or to FMR Corp. or any
affiliate thereof or to the services or relationship contemplated by this
Agreement in any advertisement or promotional materials or activities
without the prior written consent of an authorized officer of Fidelity.
D. Nonexclusivity - Fund/Agent acknowledges that Fidelity may perform
services similar to those to be provided under this Agreement to other
investment companies, investment company sponsors, or service providers
to investment companies.
E. Force Maieure - Neither Fidelity nor Fund/Agent or their respective
affiliates shall be liable to the other or to any Fund for any damage,
claim or other loss whatsoever caused by circumstances or events beyond
its reasonable control.
F. Notices - All notices and communications required or permitted by this
Agreement shall be in writing and delivered personally or sent by first
class mail unless otherwise agreed. All such notices and other
communications shall be made:
if to FIAG, to: Fidelity Investment Advisor Group
82 Devonshire Street, A6A
Boston, MA 02109
Attn: Harry Bowdoin
if to Fund/Agent, to: Haven Capital Management, Inc.
655 Third Avenue 19th Floor
New York, New York 10017
Attn: Colin C. Ferenbach
<PAGE> 7
G. This Agreement and any Exhibits hereto may be amended only upon the
written agreement of the parties.
H. This Agreement may not be transferred or assigned by either Fund/Agent
or Fidelity, and shall be construed in accordance with the laws of the
commonwealth of Massachusetts.
IN WITNESS WHEREOF: the parties have executed this Agreement as of
the date first written above.
Fidelity Investment Advisor
Group of
Fund/Agent Fidelity Brokerage Services,
Inc.
By: /s/ Colin C. Ferenbach By: /s/ Harry S. Bowdon
------------------------- -------------------------
Title: President Title: Vice President
Fund or
Company The Haven Capital Management Trust
National Financial Services
Corporation
By: /s/
-------------------------
Title: Director
<PAGE> 8
EXHIBIT A
Calculation and Payment of Fees Pursuant to Section III
1. Except as provided in paragraph 2 below, for the services provided by
Fidelity hereunder, Fund/Agent shall pay to FIAG a fee with respect to each
fund, calculated daily and paid monthly in arrears, equal to (1) .35 percent
per annum with respect to non-fixed Income Funds held in accounts at NFSC on
behalf of customers of FIAG (determined by multiplying the number of such
shares times the publicly-reported net asset value of each share), and (2) .25
percent per annum with respect to Fixed Income Funds (as defined below),
excluding the value of (i) shares as to which a brokerage customer may pay a
transaction fee to FIAG because such customer has been defined as an Active
Trader, and (ii) shares held in a brokerage account prior to the effective date
of the Agreement as to the Fund issuing such shares, and (iii) shares first
placed or purchased in a brokerage account after the termination of the
Agreement as to the Fund issuing such shares. The total number of shares of
all Funds with respect to which a fee will be due to Fidelity hereunder shall
be referred to in this Exhibit A as "Participating Assets". For the purposes
of Exhibit A, Fixed Income Fund shall be defined as any Fund whose underlying
portfolio at the time of the calculation of the fee is not less than 80%
invested in fixed income instruments.
2. With respect to non-Fixed Income Funds acquired and held through a FIAG
account, Fidelity shall calculate the total market value of Participating
Assets for each Fund/Agent two times per calendar year, once as of Fidelity's
brokerage month end in June and once as of Fidelity's brokerage month end in
December. In the event that as of any such month-end the total value of
Fund/Agent Participating Assets equals or exceeds the amount(s) set forth
below; then the fee due FIAG with respect to total participating Assets shall
be adjusted prospectively as of such month-end to the per annum fee set forth
opposite the total value of Participating Assets. The new fee will apply on a
per annum basis going forward, calculated daily and paid monthly in arrears, on
all participating assets until the next evaluation date.
<TABLE>
<CAPTION>
Total Value of Fund/Agent
Participating Assets Per Annum Fee
<S> <C>
$100 million up to $500 million .30%
over $500 million .25%
</TABLE>
In all other respects, the fee due FIAG shall be calculated and payable in
accordance with this Agreement and Exhibit A.
<PAGE> 9
3. Subsequent to each month-end, NFSC shall send to Fund/Agent a statement of
the market value of shares of the Fund for which the fee is calculated for the
preceding month, together with a statement of the amount of such fee. In the
calculation of such fee, NFSC records shall govern unless Fund/Agent can
demonstrate that the number of shares of Fund price(s) used in such calculation
is inaccurate.
4. Fund/Agent shall pay to FIAG such fee within 30 days after Fund/Agent's
receipt of such statement. Such payment shall be by wire transfer or other
form acceptable to NFSC and shall be separate from payments related to
redemption proceeds and distributions.
<PAGE> 10
EXHIBIT B
FUNDS PARTICIPATING IN SERVICES AGREEMENT
<TABLE>
<CAPTION>
Fund Name Cusip Trading Symbol
-------------- --------- --------------
<S> <C> <C>
The Haven Fund 419353107 HAVEX
</TABLE>
<PAGE> 1
EXHIBIT 99.B6-3
Services Agreement
with Charles Schwab
SERVICES AGREEMENT
This Agreement is made as of June 20, 1997, between Charles Schwab &
Co., Inc. ("Schwab"), a California corporation, each registered investment
company ("Fund Company") executing this Agreement, on its own behalf and on
behalf of each of its series or classes of shares listed on Schedule I, as
amended from time to time (such series or classes being referred to as the
"Fund(s)"), and Fund Affiliate (defined below) that has executed this Agreement.
Fund Company and Fund Affiliate are collectively referred to herein as "Fund
Parties." In the event that there are no series or classes of shares listed on
Schedule I, the term "Fund(s)" shall mean "Fund Company".
WHEREAS Fund Affiliate is either (i) an investment adviser to or
administrator for the Funds or (ii) the principle underwriter or distributor for
the Funds.
WHEREAS Fund Parties wish to have Schwab perform certain recordkeeping,
shareholder communication, and other services for each Fund; and
WHEREAS Schwab is willing to perform such services on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises set forth below, the parties agree as follows:
1. Services
a. During the term of this Agreement, Schwab shall perform the
services set forth on Exhibit A hereto, as such exhibit may be amended from time
to time by mutual consent of the parties (the "Services").
b. The parties agree that the Operating Agreement, dated as of
June 20, 1997, between Schwab and Fund Company, as amended from time to time
("Operating Agreement"), is incorporated herein by this reference. In processing
purchase, redemption, transfer and exchange orders placed by Schwab on behalf of
its customers, and in order to facilitate Schwab's performance of Services, all
terms and conditions of the Operating Agreement shall be binding as between
Schwab and Fund Parties, and the references to Fund Company therein shall be
deemed to mean Fund Parties for the purposes of this Agreement. In the event of
any inconsistency between the Operating Agreement and this Agreement, this
Agreement shall control.
2. Fees
For the Services, Schwab shall receive a fee (the "Fee") which
shall be calculated and paid in accordance with Exhibit B hereto. Schedule II
reflects the portion of the Fee that each Fund Party has agreed, as between
them, to pay. Should Exhibit A be amended to revise the Services, the parties
shall also amend Exhibit B and Schedule II, if necessary, in order to reflect
any changes in the Fee.
<PAGE> 2
3. Transaction Charges
The parties acknowledge and agree that Schwab may collect transaction
fees from certain customers (including "Active Traders," as Schwab may define
that term) for certain services and from other customers upon such other
customers' redemption of certain shares.
4. Indemnification
a. Schwab shall indemnify and hold harmless Fund Parties and
their directors, officers, employees, and agents ("Indemnified Parties") from
and against any and all losses, claims, liabilities and expenses (including
reasonable attorney's fees) ("Losses") incurred by any of them arising out of
(i) Schwab's dissemination of information regarding Fund Parties or a Fund that
contains an untrue statement of material fact or any omission of a material fact
necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading and that was not published or
provided to Schwab by or on behalf of Fund Company or its affiliated persons
("Affiliates") as defined under the Investment Company Act of 1940, as amended
(the "1940 Act"), or accurately derived from information published or provided
by or on behalf of Fund Company or any Affiliate, (ii) any breach by Schwab of
any representation, warranty or agreement contained in this Agreement, or (iii)
any willful misconduct or negligence by Schwab in the performance of, or failure
to perform, its obligations under this Agreement, except to the extent such
Losses are caused by Fund Company or Fund's breach of this Agreement or Fund
Company or Fund's willful misconduct or negligence in the performance, or
failure to perform, its obligations under this Agreement. This Section 4(a)
shall survive termination of this Agreement.
b. In any event, no party shall be liable for any special,
consequential or incidental damages.
5. Role and Relationship of Schwab
The parties acknowledge and agree that the Services under this
Agreement are recordkeeping, shareholder communication and related services only
and are not the services of an underwriter or a principal underwriter of any
Fund within the meaning of the Securities Act of 1933, as amended, or the 1940
Act. This Agreement does not grant Schwab any right to purchase shares from any
Fund (although it does not preclude Schwab from purchasing any such shares), nor
does it constitute Schwab an agent of Fund Parties or any Fund for purposes of
selling shares of any Fund to any dealer or the public. To the extent Schwab is
involved in the purchase of shares of any Fund by Schwab's customers, such
involvement will be as agent of such customer only.
6. Information to be Provided
Fund Parties shall provide to Schwab prior to the effectiveness
of this Agreement or as soon thereafter as practicable, two (2) copies of the
then-current
2
<PAGE> 3
prospectus and statement of additional information of each Fund.
Fund Party shall provide Schwab with written copies of any amendments to or
changes in the Fund's prospectus or statement of additional information
immediately upon their effective date.
7. Representations and Warranties
a. Each Fund Party represents and warrants that it has obtained
certified resolutions of its board of directors authorizing such Fund Party to
enter into this Agreement.
b. Each Fund Party represents and warrants that the person
signing this Agreement on its behalf is an officer authorized to execute this
Agreement on behalf of such Fund Party.
8. Notices
All notices required by this Agreement (excluding the Operating
Agreement) shall be in writing and delivered personally or sent by first class
mail. Such notices will be deemed to have been received as of the earlier of
actual physical receipt or three (3) days after deposit, first class postage
prepaid, in the United States mail. All such notices shall be made:
if to Schwab, to: Charles Schwab & Co., Inc.
101 Montgomery Street
San Francisco, CA 94104
Attention: Matthew L. Sadler
Vice President/Mutual Funds
with a copy to: General Counsel, at the same address;
if to Fund Party, to the address given below in the signature
block.
9. Nonexclusivity
Each Party acknowledges that the other may enter into agreements
similar to this Agreement with other parties for the performance of services
similar to those to be provided under this Agreement, unless otherwise agreed to
in writing by the parties.
10. Assignablity
This Agreement is not assignable by any party without the other
parties' prior written consents and any attempted assignment in contravention
hereof shall be null and void; provided, however, that Schwab may, without the
consent of Fund Parties, assign its rights and obligations under this Agreement
to any Affiliate.
3
<PAGE> 4
11. Exhibits and Schedules; Entire Agreement
All Exhibits and Schedules to this Agreement, as they may be
amended from time to time, are by this reference incorporated into and made a
part of this Agreement. This Agreement (including the Exhibits and Schedules
hereto), together with the Operating Agreement, constitute the entire agreement
between the parties as to the subject matter hereof and supersede any and all
agreements, representations and warranties, written or oral, regarding such
subject matter made prior to the time at which this Agreement has been executed
and delivered by Schwab and Fund Parties.
12. No Waiver
The failure of either party to insist upon exercising any right
under this Agreement shall not be construed as a waiver or relinquishment to any
extent of such party's right to assert or rely upon such provision or right in
any other instance.
13. Amendment
This Agreement and the Exhibits and Schedules hereto may be
amended only by a writing executed by each party hereto that is to be bound by
such amendment.
14. Governing Law
This Agreement shall be governed by and interpreted under the
laws of the State of California, applicable to contracts between California
residents entered into and to be performed entirely within the state.
15. Counterparts
This Agreement may be executed in one or more counterparts, each
of which will be deemed an original, but all of which together shall constitute
one and the same instrument.
16. Effectiveness of Agreement; Termination
a. Upon Schwab's acceptance of Schedule I, as amended from time
to time, the effective date of this Agreement as to any Fund shall be the later
of the date on which this Agreement is made or the date set forth opposite the
name of the Fund on Schedule I.
b. This Agreement may be terminated as to a Fund by any party
(i) upon ninety (90) days' written notice to the other parties or (ii) upon such
shorter notice as is required by law, order, or instruction by a court of
competent jurisdiction or a regulatory body or self-regulatory organization with
jurisdiction over the terminating party or (iii) immediately, effective on the
day following the termination of any plan of distribution/shareholder servicing
("Rule 12b-1 Plan") adopted and maintained pursuant
4
<PAGE> 5
to Rule 12b-1 under the 1940 Act by any Fund that has a Rule 12b-1 Plan in
effect as of the effective date of this Agreement, provided that a portion of
the Fee is paid pursuant to the Rule 12b-1 Plan.
c. After the date of termination as to a Fund, Fund Parties will
not be obligated to pay the Fee with respect to any shares of the Fund that are
first held in Schwab customer accounts after the date of such termination.
However, notwithstanding any such termination, Fund Parties will remain
obligated to pay Schwab the Fee as to each share of the Fund that was considered
in the calculation of the Fee as of the date of termination (a "Pre-Termination
Share"), for so long as such Pre-Termination Share is held in any Schwab
brokerage account and Schwab continues to perform substantially all of the
Services as to such Pre-Termination Share. Further, for so long as Schwab
continues to perform the Services as to any Pre-Termination Shares, this
Agreement will otherwise remain in full force and effect as to such
Pre-Termination Shares. Fund Parties shall reimburse Schwab promptly for any
reasonable expenses Schwab incurs in effecting any termination of this
Agreement, including delivery to a Fund Party of any records, instruments, or
documents reasonably requested by the Fund Party.
5
<PAGE> 6
IN WITNESS WHEREOF, the parties have executed this Agreement by a duly
authorized representative of the parties hereto.
<TABLE>
<S><C>
CHARLES SCHWAB & CO., INC. THE HAVEN CAPITAL MANAGEMENT TRUST,
on its own behalf and on behalf of each
Fund listed on Schedule I hereto
By: /s/ Matthew L. Sadler
-------------------------------------
Matthew L. Sadler By: /s/ Colin C. Ferenbach
Vice President/Mutual Funds ----------------------------------
Name Colin C. Ferenbach
--------------------------------
Date: July 28, 1997
---------------------------------- Title: President
-------------------------------
Date: July 11, 1997
-------------------------------
Address: 655 Third Ave. - 19th FL
-------------------------------
New York, NY 10017
-------------------------------
Attn:
-------------------------------
Haven Capital Management, Inc.
-------------------------------------
Name of Fund Affiliate
By: /s/ Colin C. Ferenbach
----------------------------------
Name: Colin C. Ferenbach
--------------------------------
Title: Chairman
-------------------------------
Date: July 11, 1997
--------------------------------
Address: 655 Third Avenue - 19th FL
-----------------------------
New York, NY 10017
-------------------------------------
Attn:
--------------------------------
</TABLE>
6
<PAGE> 7
EXHIBIT A
SERVICES
1. Record Maintenance
Schwab shall maintain the following records with respect to a
Fund for each customer who holds Fund shares in a Schwab brokerage account:
a. Number of shares;
b. Date, price and amount of purchases and redemptions
(including dividend reinvestments) and dates and amounts of dividends paid for
at least the current year to date;
c. Name and address of the customer, including zip codes
and social security numbers or taxpayers identification numbers;
d. Records of distributions and dividend payments;
e. Any transfers of shares; and
f. Overall control records.
2. Shareholder Communications
Schwab shall:
a. Provide to a shareholder mailing agent for the purpose of
mailing certain Fund-related materials the names and addresses of all Schwab
customers who hold shares of such Fund in their Schwab brokerage accounts. The
shareholder mailing agent shall be a person or entity with whom the Fund has
arranged for the distribution of certain Fund-related material in accordance
with the Operating Agreement. The Fund-related materials shall consist of
updated prospectuses and any supplements and amendments thereto, annual and
other periodic reports, proxy or information statements and other appropriate
shareholder communications. In the alternative, in accordance with the Operating
Agreement, Schwab may distribute the Fund-related materials to its customers.
b. Mail current Fund prospectuses and statements of additional
information and annual and other periodic reports upon customer request and, as
applicable, with confirmation statements;
c. Mail statements to customers on a monthly basis (or, as to
accounts in which there has been no activity in a particular month, no less
frequently than quarterly) showing, among other things, the number of shares of
each Fund owned by such customer and the net asset value of such Fund as of a
recent date;
d. Produce and mail to customers confirmation statements
reflecting purchases and redemptions of shares of each Fund in Schwab brokerage
accounts;
7
<PAGE> 8
e. Respond to customer inquiries regarding, among other things,
share prices, account balances, dividend amounts and dividend payment dates; and
f. With respect to Fund shares purchased by customers after the
effective date of this Agreement, provide average cost basis reporting to the
customers to assist them in preparation of income tax returns.
3. Transactional Services
Schwab shall communicate, as to shares of each Fund, purchase,
redemption and exchange orders reflecting the orders it receives from its
customers. Schwab shall also communicate, as to shares of each Fund, mergers,
splits and other reorganization activities.
4. Tax Information Returns and Reports
Schwab shall prepare and file with the appropriate governmental
agencies, such information, returns and reports as are required to be so filed
for reporting (i) dividends and other distributions made, (ii) amounts withheld
on dividends and other distributions and payments under applicable federal and
state laws, rules and regulations, and (iii) gross proceeds of sales
transactions as required.
5. Fund Communications
Schwab shall, on a daily basis and for each Fund, report the
number of shares on which the Fee is to be paid pursuant to this Agreement and
the number of shares on which no such Fee is to be paid. Schwab shall also
provide each Fund with monthly summaries of reports. Such summaries shall be
expressed in both shares and dollar amounts.
8
<PAGE> 9
EXHIBIT B
CALCULATION OF FEE
1. The Fee shall be calculated by multiplying the Daily Value of
Qualifying Shares (defined below) times 35 basis points per annum. The Fee shall
be computed daily and paid monthly in arrears.
2. The Daily Value of Qualifying Shares is the aggregate daily
value of all shares of the Fund held in Schwab brokerage accounts, subject to
the following exclusions ("Qualifying Shares"). There shall be excluded from the
shares (i) shares held in a Schwab brokerage account prior to the effective date
of this Agreement as to the Fund and (ii) shares first held in a Schwab
brokerage account after the termination of this Agreement as to the Fund.
3. For purposes of this Exhibit, the daily value of the shares
of each Fund will be the net asset value reported by such Fund to the National
Association of Securities Dealers, Inc. Automated Quotation System. No
adjustments will be made to the net asset values to correct errors in the net
asset values so reported for any day unless such error is corrected and the
corrected net asset value per share is reported to Schwab before 5 o'clock,
p.m., San Francisco time, on the first business day after the day to which the
error relates.
4. At the request of Fund Parties, Schwab shall provide, on each
business day, a statement detailing the calculation for each Fund and the
aggregate value of the Qualifying Shares of each Fund. As soon as practicable
after the end of the month, Schwab shall also provide to Fund Parties an invoice
for the amount of the Fee due for each Fund. In the calculation of such Fee,
Schwab's records shall govern unless an error can be shown in the number of
shares used in such calculation.
5. Fund Parties shall pay Schwab the Fee within thirty (30) days
after Fund Parties' receipt of such statement. Such payment shall be by wire
transfer, unless the amount thereof is less than $250. Such wire transfers shall
be separate from wire transfers of redemption proceeds or distributions under
the Operating Agreement. Amounts less than $250 may, at Fund Parties'
discretion, be paid by check.
9
<PAGE> 10
SCHEDULE I
TO THE SERVICES AGREEMENT
Fund Company/Fund(s) Effective Date
The Haven Capital Management Trust
The Haven Fund* 6/20/97
* Indicates that Fund is a "no load" or "no sales charge" Fund as defined in
Rule 2830 of the Conduct Rules of the National Association of Securities
Dealers, Inc.
SI Indicates that the Fund is available only to Schwab Institutional customers.
Accepted by: THE HAVEN CAPITAL MANAGEMENT
TRUST, on its own behalf and on behalf of
CHARLES SCHWAB & CO., INC. each Fund Company listed on this
Schedule I
By: /s/ Matthew L. Sadler By: /s/ Colin C. Ferenbach
-------------------------------- ---------------------------------
Matthew L. Sadler
Vice President/Mutual Funds Name: Colin C. Ferenbach
Date: July 28, 1997 Title: President
----------------------------- ----------------------------
Date: July 11, 1997
-------------------------------
Acknowledged by:
Haven Capital Management, Inc.
------------------------------------
Name of Fund Affiliate
By: /s/ Colin C. Ferenbach
---------------------------------
Name: Colin C. Ferenbach
-------------------------------
Title: Chairman
------------------------------
Date: July 11, 1997
------------------------------
10
<PAGE> 11
SCHEDULE II
TO THE SERVICES AGREEMENT
Fund Company
The Haven Capital Management Trust 0.25%
- ----------------------------------------
(name)
Fund Affiliate
Haven Capital Management, Inc. 0.10%
- -----------------------------------------
(name)
Fee Rate Percentage Per Annum on
All Qualifying Shares 0.35%
11
<PAGE> 12
OPERATING AGREEMENT
This Agreement is made as of June 20, 1997, between Charles Schwab & Co., Inc.
("Schwab"), a California corporation, and each registered investment company
executing this Agreement ("Fund Company"), on its own behalf and on behalf of
each of its series or classes of shares listed on Schedule I, as amended from
time to time (such series or classes being referred to as "Fund(s)"). In the
event there are no series or classes of shares listed on Schedule I, then the
term "Fund(s)" shall mean "Fund Company."
WHEREAS, Fund Company wishes to have shares of the Fund(s) available for
purchase and redemption by Schwab's brokerage customers through Schwab's Mutual
Fund Marketplace(R) ("MFMP");
WHEREAS, certain policies, procedures and information are necessary to
enable the Fund(s) to participate in the MFMP; and
WHEREAS, Schwab is willing to permit the Fund(s) to participate in its
MFMP pursuant to the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
set forth below, the parties agree as follows:
1. Operating Procedures
Schwab will open an omnibus account (the "Account") with each Fund
through which it will purchase and redeem shares, settle transactions,
reconcile transactions, obtain pricing, reinvest distributions and maintain
records in accordance with the Operating Procedures set forth in Exhibit A
hereto. In addition, the parties agree to transfer accounts, communicate with
Fund shareholders and perform other obligations in accordance with the
Operating Procedures.
2. Qualification Requirements
a. Schwab will only place purchase orders for shares of a Fund
on behalf of a customer whose account address recorded on Schwab's books
is in a state or other jurisdiction in which Fund Company has advised
Schwab that such Fund has qualified its shares for sale under applicable law.
Fund Company shall advise Schwab immediately if any such qualification is
terminated or if it wishes Schwab not to place purchase orders for a Fund on
behalf of its customers who reside in a particular state or other jurisdiction.
b. Schwab will, upon request, (i) furnish Fund Company with
monthly written statements of the number of shares of each Fund purchased on
behalf of Schwab customers resident in one or more states or other
jurisdictions indicated by Fund Company or (ii) on a daily basis, transmit
to an electronic database provider with whom Schwab has established effective
systems interfaces information regarding the number of shares of each Fund sold
in each state for
1
<PAGE> 13
retrieval by Fund Company. Fund Company shall be responsible for all
reasonable fees and other reasonable charges of such database provider in
connection with Schwab's transmission of such information to and Fund Company's
retrieval of such information from such database provider.
c. Fund Company agrees that any rescission offer that is made
to shareholders who own shares directly with a Fund will also be made to Schwab
customers who would be entitled to such rescission offer if they owned
shares directly with the Fund. Fund Company will provide Schwab with a letter
on Fund Company letterhead containing the terms of any such rescission offer,
and Schwab may send this writing, or any derivation thereof, to the affected
Schwab customers. To assist Fund Company in effecting any such rescission
offer, Schwab agrees to provide Fund Company with relevant information
regarding any affected Schwab customer, including the account number, the
number of shares purchased and redeemed, if any, the dates of the purchase(s)
and redemption(s), if any, and the dollar amount of such transactions.
3. Compliance Responsibilities
a. Fund Company is responsible for (i) the compliance of each
prospectus, registration statement, annual or other periodic report,
proxy statement and item of advertising or marketing material of or relating to
each Fund with all applicable laws, rules and regulations (except for
advertising or marketing material prepared by Schwab that was not published or
provided to Schwab by or on behalf of Fund Company or any Affiliate (defined
below) or accurately derived from information published or provided by or on
behalf of Fund Company or any Affiliate), (ii) the distribution and tabulation
of proxies in accordance with all applicable laws, rules and regulations
(except for such proxy related services provided by Schwab's mailing agent),
(iii) the registration or qualification of the shares of each Fund under all
applicable laws, rules and regulations, and (iv) the compliance by Fund Company
and each Affiliate of Fund Company, as that term is defined below, with all
applicable laws, rules and regulations (including the Investment Company Act of
1940, as amended (the "1940 Act"), and the Investment Advisers Act of 1940, as
amended), and the rules and regulations of each self-regulatory organization
with jurisdiction over Fund Company or Affiliate, except to the extent that the
failure to so comply by Fund Company or any Affiliate is caused by Schwab's
breach of this Agreement. An "Affiliate" of a person means (i) any person
directly or indirectly controlling, controlled by, or under common control
with, such person, (ii) any officer, director, partner, corporation, or
employee of such person, and (iii) if such person is an investment company, any
investment advisor thereof or any member of the advisory board thereof.
b. In the event that the Account holds five percent (5%) or
more of the outstanding Fund shares, Fund Company will be responsible for
requesting Schwab to confirm its status as shareholder of record and to confirm
whether any Schwab customer beneficially owns five percent (5%) or more of
the outstanding Fund shares through its Schwab brokerage account. For this
purpose, Fund Company shall indicate in its inquiry the number of Fund shares
that equal five percent (5%) of outstanding Fund shares. Schwab shall promptly
reply to any such inquiries.
2
<PAGE> 14
c. Schwab is responsible for Schwab's compliance with all applicable
laws, rules and regulations governing Schwab's performance under this
Agreement, except to the extent that Schwab's failure to comply with any law,
rule or regulation is caused by Fund Company's breach of this Agreement, or
its willful misconduct or negligence in the performance or failure to perform
its obligations under this Agreement.
d. Except as set forth in this Agreement or as otherwise agreed upon
in writing by the parties, any communication, instruction or notice made
pursuant to this Agreement shall be made orally, provided that such
oral communication is on a recorded telephone line or is promptly confirmed in
writing by facsimile transmission. Schwab is entitled to rely on any
communications, instructions or notices which it reasonably believes were
provided to it by Fund Company, any Affiliate or their agents authorized to
provide such communications, instructions or notices to Schwab, and on
communications, instructions or notices provided to it by its customers. Fund
Company is entitled to rely on any communications, instructions or notices it
reasonably believes were provided to it by Schwab, or its agents authorized to
provide such communications, instructions or notices to Fund Company.
e. Except to the extent otherwise expressly provided in this
Agreement, neither party assumes any responsibility hereunder, or will
be liable to the other, for any damage, loss of data, delay or any other loss
whatsoever caused by events beyond its reasonable control.
f. Fund Company and each Fund shall indemnify and hold harmless Schwab
and each director, officer, employee and agent of Schwab from and
against any and all losses, claims, liabilities and expenses (including
reasonable attorneys' fees) ("Losses") incurred by any of them arising out of
(i) any untrue statement of material fact or any omission of a material fact
necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading in any prospectus, registration
statement, annual or other periodic report or proxy statement of the Fund or in
any advertising or promotional material published or provided to Schwab by or
on behalf of Fund Company or any Affiliate or accurately derived from
information published or provided by or on behalf of Fund Company or any
Affiliate, (ii) any violation of any law, rule or regulation relating to the
registration or qualification of shares of the Fund, (iii) any breach by Fund
Company of any representation, warranty or agreement contained in this
Agreement, or (iv) any willful misconduct or negligence by Fund Company or a
Fund in the performance of, or failure to perform, its obligations under this
Agreement, except to the extent such Losses are caused by Schwab's breach of
this Agreement or its willful misconduct or negligence in the performance, or
failure to perform, its obligations under this Agreement. This Section 3(f)
shall survive termination of this Agreement.
4. Account Establishment and Maintenance Fees
Fund Company shall pay to Schwab such fees as are set forth on
Schedule II hereto to reimburse Schwab for its costs in establishing and
maintaining Account(s) for each Fund. Fees attributable to establishment of
the Account(s) for a Fund shall be paid prior to establishment of the
Account(s) for the Fund. Fees attributable to maintaining the Account(s) for
each Fund shall be billed on an annual basis on December 31 and paid promptly,
in no event later than thirty (30)
3
<PAGE> 15
days after billing. Such payment shall be by wire transfer. Such wire
transfers shall be separate from wire transfers of redemption proceeds or
distributions under this Agreement.
5. Representations and Warranties
a. Fund Company represents and warrants to Schwab that each Fund is in
compliance with the conditions and qualifications set forth in Rule 2830 of the
Conduct Rules of the National Association of Securities Dealers, Inc. ("NASD"),
as amended from time to time ("Rule 2830"), which enable an NASD member to
offer or sell shares in the Fund. Fund Company represents and warrants that
each Fund marked with an asterisk on Schedule I is a "no load" or "no sales
charge" Fund as defined in Rule 2830. If a Fund, for any reason, fails to
satisfy the terms and conditions of Rule 2830, Fund Company will notify Schwab
immediately of the Fund's disqualification and the reason therefor.
b. Schwab represents and warrants that Schwab is a member of
the NASD.
6. Use of Parties' Names
a. Without Schwab's prior written consent, Fund Company will not cause
or permit the use, description, or reference to Schwab, or to the
relationship contemplated by this Agreement in any advertisement or promotional
materials or activities.
b. Fund Company authorizes Schwab to use the names or other
identifying marks of Fund Company and Fund in connection with the operation of
the MFMP. Fund Company may withdraw this authorization as to any
particular use of any such name or identifying marks at any time (i) upon Fund
Company's reasonable determination that such use would have a material adverse
effect on the reputation or marketing efforts of Fund Company or such Fund, or
(ii) if any of the Funds cease to be available through the MFMP; provided,
however, that Schwab may, in its discretion, continue to use materials prepared
or printed prior to the withdrawal of such authorization or in the process of
being prepared or printed at the time of such withdrawal.
7. Proprietary Information
Each party hereto acknowledges that the identities of the other party's
customers, information maintained by such other party regarding those
customers, and all computer programs and procedures developed by such other
party or such other party's Affiliates or agents in connection with such other
party's performance of its duties hereunder constitute the valuable property of
such other party. Each party agrees that should it come into possession of any
list or compilation of the identities of or other information about the other
party's customers, or any other property of such party, pursuant to this
Agreement or any other agreement related to services under this Agreement, the
party who acquired such information or property shall use its best efforts to
hold such information or property in confidence and refrain from using,
disclosing, or distributing any of such information or other property, except
(i) with the other party's prior written consent, or (ii) as required by law or
judicial process. Each party acknowledges that any breach of the foregoing
agreements as to another party would result in immediate and irreparable harm
to such other party for which there would be no adequate remedy at law and
agrees that in
4
<PAGE> 16
the event of such a breach such other party will be entitled to equitable
relief by way of temporary and permanent injunctions, as well as such other
relief as any court of competent jurisdiction deems appropriate.
8. Assignability
This Agreement is not assignable by either party without the other
party's prior written consent, and any attempted assignment in contravention
hereof shall be null and void and not merely voidable; provided, however, that
Schwab may, without the consent of Fund Company, assign its rights and
obligations under this Agreement to any Affiliate.
9. Exhibits and Schedules; Entire Agreement
All Exhibits and Schedules to this Agreement, as they may be
amended from time to time, are by this reference incorporated into and made a
part of this Agreement. This Agreement (including the Exhibits and Schedule
hereto) constitutes the entire agreement between the parties as to the subject
matter hereof and supersedes any and all agreements, representations and
warranties, written or oral, regarding such subject matter made prior to the
date on which this Agreement has been executed and delivered by Schwab and Fund
Company.
10. Amendment
This Agreement may be amended only by a writing executed by
each party hereto that is to be bound by such amendment, except as provided in
this Section 10. Exhibit A and Schedule II may each be amended by Schwab on
forty (40) days' written notice to Fund Company or such earlier time as shall
be agreed to by the parties. Exhibits B and C shall be amended by Fund Company
in the event of any change to the information contained therein.
11. Governing Law
This Agreement shall be governed by and interpreted under the
laws of the State of California, applicable to contracts between California
residents entered into and to be performed entirely within the state.
12. Counterparts
This Agreement may be executed in one or more counterparts,
each of which will be deemed an original, but all of which together shall
constitute one and the same instrument.
13. Effectiveness and Termination
a. Upon Schwab's acceptance of Schedule I, as amended from time to
time, the effective date of this Agreement as to any Fund shall be the
later of the date on which this Agreement is made or the date set forth
opposite the name of the Fund on Schedule I.
5
<PAGE> 17
b. This Agreement may be terminated as to any Fund by Schwab
immediately upon written notice to Fund Company. This Agreement may be
terminated as to any Fund by Fund Company upon thirty (30) days' written notice
to Schwab.
c. Upon the termination date for any Fund, Schwab will no longer make
the Fund shares available for purchase by Schwab's customers through the MFMP.
Schwab reserves the right to transfer the Fund shares of its customers out of
the Account. If Schwab continues to hold the Fund shares on behalf of its
customers in the Account, the parties agree to be obligated under, and act in
accordance with, the terms and conditions of this Agreement with respect to
such shares.
IN WITNESS WHEREOF, this Agreement has been executed by a duly authorized
representative of the parties hereto.
CHARLES SCHWAB & CO., INC. THE HAVEN CAPITAL MANAGEMENT TRUST, on
its own behalf and on behalf of each
Fund listed on Schedule I hereto, as
amended from time to time
By: /s/ Fred Potts By: /s/ Colin C. Ferenbach
--------------------------- ----------------------
Fred Potts
Vice President/Mutual Funds
Operations Administration Name: Colin C. Ferenbach
----------------------
Date: 7/29/97 Title: President
-------------- ----------------------
Date: 7/11/97
----------------------
6
<PAGE> 18
SCHEDULE I
TO THE OPERATING AGREEMENT
Fund Company(ies)/Fund(s) Effective Date
- ------------------------- --------------
The Haven Capital Management Trust
The Haven Fund* 6/20/97
* Indicates that Fund is a "no-load" or "no sales charge" Fund as defined
in Rule 2830 of the Conduct Rules of National Association of Securities
Dealers, Inc.
SI Indicates that Fund is available only to Schwab Institutitional customers.
THE HAVEN CAPITAL MANAGEMENT
Accepted by: TRUST, on its own behalf and on
behalf of each Fund listed on this
Schedule I, as amended from
CHARLES SCHWAB & CO., INC. time to time
By: /s/ Fred Potts By: /s/ Colin C. Ferenbach
-------------------------- ----------------------
Fred Potts
Vice President/Mutual Funds
Operations Administration Name: Colin C. Ferenbach
----------------------
Date: 7/29/97 Title: President
-------------- ----------------------
Date: 7/11/97
----------------------
7
<PAGE> 19
SCHEDULE II
TO THE OPERATING AGREEMENT
Fees to Establish and Maintain Account(s) for a Fund
ESTABLISHMENT FEES
The Establishment Fee shall be $12,000 for the Account(s) for the initial
Fund established on Schwab's system, and $4,500 for the Account(s) for each
additional Fund, whether added at the same time or subsequent to the initial
Fund.
MAINTENANCE FEE
a. The Maintenance Fee as to the Account(s) for each Fund shall be charged
in advance, annually, on December 31 ("Assessment Date") commencing on the
first Assessment Date after the establishment of the Account(s) for the Fund on
the Schwab system. The Maintenance Fee as to the Account(s) of a Fund shall
not be prorated in the event of termination of this Agreement as to such Fund
prior to the end of a calendar year for which such Maintenance Fee has been
charged.
b. The Maintenance Fee as to the Account(s) for each Fund shall be
determined based on the aggregate value of all shares of a Fund contained in
all Account(s) at the Fund on the Assessment Date. The Maintenance Fees are as
follows:
<TABLE>
<CAPTION>
Aggregate Value of All Shares Maintenance Fee
- ----------------------------- ---------------
<S> <C>
Up to and including $2.5 million $4,500
Over $2.5 million and up to and including $5 million $3,000
Over $5 million $0
</TABLE>
c. For purposes of this calculation, the value of the shares of each Fund
will be the net asset value reported by such Fund to the National Association
of Securities Dealers, Inc. Automated Quotation System. No adjustments will be
made to the net asset values to correct errors in the net asset values so
reported for any Assessment Date unless such error is corrected and the
corrected net asset value per share is reported to Schwab before 5 o'clock,
p.m., San Francisco time, on the next business day after the Assessment Date to
which the error relates.
8
<PAGE> 20
EXHIBIT A
OPERATING PROCEDURES
1. The Account
a. Schwab will open an Account with each Fund. The Account shall be
registered:
Charles Schwab & Co., Inc.
Special Custody Account for the Exclusive Benefit of Customers
Attention: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104
The Account will be set up for the reinvestment of capital gains and
dividend distributions.
b. The Fund shall designate the Account with account numbers. Account
numbers will be the means of identification when the parties are transacting in
the Account.
c. The parties acknowledge that the Account is an omnibus account in
Schwab's name with shares held by any number of beneficial owners. Schwab
represents that the shares in the Account are customer securities and are
segregated from Schwab's own assets. Fund Company represents that the shares
in the Account are carried free of any charge, lien or payment of any kind in
favor of the Fund or any person claiming through the Fund.
d. The Account shall be kept open on the Fund's books regardless of a lack
of activity or small position size, except to the extent that Schwab takes
specific action to close the Account, or to the extent the Fund's prospectus
reserves the right to close accounts that are inactive. In the latter case,
Fund Company will give prior notice to Schwab before closing any Account.
e. Schwab has the right to open additional accounts from time to time to
accommodate other investment options and features, and to consolidate existing
accounts if and when appropriate to meet the needs of the MFMP. In the event
that it is necessary for Schwab to open an account with a Fund for the payment
of distributions in cash, the term "Account" shall mean both the account for
the reinvestment of capital gains and dividend distributions and the account
for the payment of distributions in cash.
f. Schwab reserves the right to issue instructions to each Fund to move
shares between the Account and any other account Schwab may open.
9
<PAGE> 21
2. Purchase and Redemption Orders
For each day on which any Schwab customer places with Schwab a purchase or
redemption order for shares of a Fund, Schwab shall aggregate all such purchase
orders and aggregate all such redemption orders and communicate to the Fund an
aggregate purchase order and an aggregate redemption order. Schwab will accept
orders to purchase and redeem Fund shares from its customers no later than 4:00
p.m. Eastern Time (market close). Schwab will communicate the order to the
Fund prior to a mutually agreed upon time.
3. Settlement of Transactions
a. Schwab will transmit the purchase price of the aggregate purchase order
to the Fund by wire transfer on the next business day after the trade date.
For purposes of this Agreement, a "business day" is any day the New York Stock
Exchange is open for trading.
b. For each business day on which Schwab places a redemption order for a
Fund within the time designated by the Fund, Fund Company will cause the
Fund(s) to send to Schwab the aggregate proceeds of all redemption orders for
the Fund(s) placed by Schwab on that day. Such redemption proceeds will be
sent by wire transfer on the next business day following the trade date for the
redemption orders; provided that Fund Company may, in its discretion, send such
proceeds by check if the aggregate amount is less than $250. Wire transfers of
redemption proceeds shall be separate from wire transfers for other purposes.
c. Each wire transfer of redemption proceeds shall indicate, on the Fed
Funds wire system, the amount thereof attributable to each Fund; provided,
however, that if the number of entries would be too great to be transmitted
through the Fed Funds wire system, Fund Company shall, on the day the wire is
sent, notify Schwab of such entries. The cost of the wire transfer is the
responsibility of the party sending the wire. The interest cost associated
with any delayed wire is the responsibility of the party sending the wire.
d. Should a Fund need to extend settlement on a trade, Fund Company must
contact Schwab on trade date to discuss the extension. For purposes of
determining the length of settlement, Fund Company agrees to treat shareholders
that hold Fund shares through the Account the same as it treats shareholders
that hold Fund shares directly with the Fund.
e. In the event that a Fund cannot verify redemption proceeds, Fund
Company will settle trades and forward redemption proceeds in accordance with
this Agreement based on the information provided by Schwab. Schwab will be
responsible for the accuracy of all trade information provided by it.
f. Fund Company represents that each Fund that has reserved the right to
redeem in kind has filed Form N-18F-1 with the Securities and Exchange
Commission. For purposes of complying with the Fund's election on Form
N-18F-1, Fund Company agrees that it will treat as a "shareholder" each
shareholder that holds Fund shares through the Account, provided that Schwab
provides to Fund Company, upon request, the name or account number, number of
Fund shares and other relevant information for each such shareholder. Fund
Company acknowledges
10
<PAGE> 22
that treatment of Schwab as the sole shareholder of Fund shares held in the
Account for purposes of applying the limits in Rule 18f-1 under the 1940 Act
would be inconsistent with the intent of Rule 18f-1 and the Fund's election on
Form N-18F-1 and could unfairly prejudice shareholders that hold Fund shares
through the Account.
4. Account Reconciliation Requirements
a. Schwab shall verify, on a next day basis, orders placed for the Account
with each Fund. All activity in the Account must be reflected. Therefore, any
"as of" activity must be shown with its corresponding "as of" dates.
b. Schwab must receive statements on or before the eighth business day of
each month, even if there has been no activity in the Account during the
period, unless Schwab can verify transactions by direct or indirect systems
access.
c. The parties agree to notify each other and correct any error in the
Account with any Fund upon discovery. If an error is not corrected by the day
following discovery, each party agrees to make best efforts to avoid this from
hindering any routine daily operational activity.
5. Pricing
Every business day on which there is a transaction in the Account and for
each month-end business day, Fund Company will provide to Schwab prior to 7:00
p.m., Eastern Time, each Fund's closing net asset value and public offering
price (if applicable) for that day and/or notification of no price for that
day. Fund Company shall provide such information on a best efforts basis
taking into consideration any extraordinary circumstances arising at the Fund
(e.g. natural disasters, etc.).
6. Distributions
a. Fund Company shall provide distribution information to Schwab in a
timely manner to enable Schwab to pay distributions to its customers on or as
close to payable date as practicable. As to each Fund, Fund Company or such
Fund shall provide Schwab with (i) the record date, ex-dividend date, and
payable date with respect to a Fund as soon as practicable after it is
announced, but no later than three (3) business days prior to record date, (ii)
the record date share balance in the Account and the distribution rate per
share on the first business day after record date, and (iii) the reinvest price
per share as soon as it is available. Other distribution information required
by Schwab from time to time for payment of distributions to its customers shall
be provided by Fund Company on such dates as are agreed upon between Schwab and
Fund Company, but no later than payable date.
b. For purposes of effecting cash distributions for customers who have
elected to receive their capital gains distributions and/or dividends in cash,
prior to 10:00 a.m., Eastern Time, on the next business day following receipt
of the reinvest price per share as provided in paragraph 6(a)(iii) above,
Schwab shall notify Fund Company of the aggregate number of Fund shares with
respect to which the purchase is required to be voided. Fund Company agrees
that the purchase
11
<PAGE> 23
of such aggregate number of Fund shares may be voided. Fund Company or such
Fund shall wire the proceeds of such voided transaction from the Fund to Schwab
on the same business day. Schwab shall use such voided transaction proceeds to
pay the distribution in cash to Schwab customers who have elected to receive
such distributions in cash.
c. For each Fund that pays daily dividends, Fund Company shall provide on
a daily basis, the following record date information: daily rate, account
share balance, account accrual dividend amount (for that day), account accrual
dividend amount (for period to date), and account transfers and period-to-date
accrual amounts.
d. In the event that Schwab maintains an Account with a Fund for the
payment of distributions in cash, Fund Company shall wire, on payable date, any
cash distribution from the Fund to Schwab.
e. For each Fund that pays daily dividends, each Fund shall accrue
dividends, commencing on the settlement date for the purchase of Fund shares
and terminating on the trade date for the redemption of Fund shares.
f. For annual tax reporting purposes, Fund Company shall inform Schwab of
the portion of each Fund's distributions that include any of the following:
foreign source income, tax exempt income by state of origin or return of
capital.
g. In conformance with its status as a broker/dealer holding its customers
securities in street name, Schwab shall prepare and file with the appropriate
governmental agencies, such information, returns and reports as are required to
be so filed for reporting (i) dividends and other distributions made, (ii)
amounts withheld on dividends and other distributions and payments under
applicable federal and state laws, rules and regulations and (iii) gross
proceeds of sales transactions as required.
h. Upon notice from Fund Company, Schwab shall effect mergers, splits and
other reorganization activities of a Fund for its customers.
7. Price and Distribution Rate Errors
a. In the event adjustments are required to correct any error in the
computation of the net asset value or public offering price of a Fund's shares
or in the distribution rate for a Fund's shares, Fund Company shall notify
Schwab upon discovering the need for such adjustments. Notification can be
made orally, but must be confirmed in writing.
b. Schwab and Fund Company shall agree promptly and in good faith to a
resolution of the error, and no adjustment for the error shall be taken in the
Account until such agreement is reached. Following resolution, upon request by
Schwab, Fund Company shall provide Schwab with written notification of the
resolution. The letter shall be written on Fund Company letterhead and must
state for each day on which an error occurred the incorrect price or rate, the
correct price or rate, and the reason for the price or rate change. Fund
Company agrees that
12
<PAGE> 24
Schwab may send this writing, or derivation thereof, to Schwab's customers
whose accounts are affected by the price or rate change.
c. If a Schwab customer has received cash in excess of what he is
entitled, Schwab will, when requested by Fund Company, and to the extent
practicable and permitted by law, debit the customer's brokerage account in the
amount of such excess, but only to the extent of any cash in the account, and
repay it to the Fund. In no event, however, shall Schwab be liable to Fund
Company or the Fund for any such amounts. Upon the request of Fund Company,
Schwab shall provide Fund Company with the name of Schwab's customer and other
relevant information concerning the customer's brokerage account to assist Fund
Company in the collection from Schwab's customer of any such excess amount not
repaid to the Fund.
d. If adjustment is necessary to correct an error which has caused
Schwab's customers to receive dollars or shares less than that to which they
are entitled, the Fund shall, as appropriate and as mutually agreed by the
parties pursuant to 7(b) above, make all necessary adjustments to the number of
shares owned in the Account and/or distribute to Schwab any and all amounts of
the underpayment. Schwab will credit the appropriate amount of such shares or
payment to each Schwab customer.
e. For purposes of making adjustments, including the collection of
overpayments, Fund Company agrees to treat shareholders that hold Fund shares
through the Account the same as it treats shareholders that hold Fund shares
directly with the Fund. When making adjustments for an error, a Fund shall not
net transactions for that day in the Account.
8. Record Maintenance
a. Schwab shall maintain records for each of its customers who holds Fund
shares through the Account, which records shall include:
i. Number of shares;
ii. Date, price and amount of purchases and redemptions
(including dividend reinvestments) and date and amounts of
dividends paid for at least the current year to date;
iii. Name and address of each of its customers, including zip codes and
social security numbers or taxpayer identification numbers;
iv. Records of distributions and dividend payments;
v. Any transfers of shares; and
vi. Overall control records.
b. Schwab will be responsible for accurately posting transactions in Fund
shares to its customers' brokerage accounts.
13
<PAGE> 25
9. Transfer of Accounts
a. Fund Company agrees to transfer shares between accounts for Schwab
customers or other street name brokers held directly with a Fund and the
Account on the Fund's records. For the purpose of expediting direct transfers
from accounts for Schwab customers, Fund Company will accept by facsimile
transmission a summary sheet of information ("Summary Sheet") indicating the
customers' names, account numbers, the Fund affected and the number of shares
to be re-registered. For record keeping purposes, actual copies of transfer
forms will be forwarded to a Fund upon its request for such forms.
b. Schwab represents and warrants that for each transfer indicated in the
Summary Sheet, it holds each underlying instruction for re-registration signed
by its customer, and that its customer's signature on such instruction is
signature guaranteed by Schwab pursuant to the New York Stock Exchange's
Medallion Signature Program. Schwab will retain these documents for the period
required by any applicable law rule or regulation.
c. Schwab agrees to indemnify and hold harmless Fund Company, the Fund
and each director, officer, employee and agent of Fund Company ("indemnified
person") from and against any and all Losses incurred by any of them arising
out of the impropriety of any transfer effected by the Fund in reliance on the
Summary Sheet to the same extent as provided under the New York Stock
Exchange's Medallion Signature Program, except to the extent such Losses arise
out of the failure of any indemnified person to comply with the instructions on
the summary sheet of information.
d. Fund Company shall process all transfer requests into the appropriate
Account. Schwab as custodian is qualified to accept in the Accounts shares
from Fund IRA, Keogh or 401(k) accounts. At no time shall any Fund establish
separate accounts registered to Schwab for the benefit of individual
shareholders. In the event any such account is mistakenly opened, Schwab
reserves the right to instruct such Fund to move Fund shares to the Account.
e. Fund Company must confirm to Schwab the completion of each transfer on
the day it occurs. The confirming information shall include the number of
shares, date("as of" date if unavoidable delay), transaction date, account
number of the customer and the Account, registration, accrued dividends and
account type (i.e., IRA, Keogh, 401(k), etc.).
f. Transfer processing after record date but prior to payable date will
include all accrued dividends. Each Fund is responsible for monitoring all
completed full transfers for "trailing" dividends. Should a "trailing"
dividend appear in an account, a Fund shall send such dividend to Schwab within
five (5) business days, along with a specific written notification thereof.
Notification shall include details of the dividend and customer, including the
customer's social security number or taxpayer identification number, and/or the
account number for the Account to which the transfer was made.
g. If Schwab customers submit share certificates for transfer into their
Schwab brokerage accounts, Schwab will send such certificates, properly
endorsed to the applicable
14
<PAGE> 26
Fund, for transfer into the Account with such Fund. Upon Schwab's request,
Fund Company agrees to provide the status of said certificates and book share
balances.
10. Shareholder Communication
a. Fund Company shall arrange with Schwab, or a mailing agent designated
or approved by Schwab, for the distribution of the materials listed below to
all of Schwab's customers who hold Fund shares, which distribution shall be so
arranged by Fund Company as to occur immediately upon the effective date of the
materials:
i. All proxy or information statements prepared for
circulation to shareholders of record of such Fund;
ii. Annual reports;
iii. Semi-annual reports;
iv. Quarterly reports (if applicable); and
v. All updated prospectuses, supplements and amendments
thereto.
Fund Company shall be responsible for providing the materials and for Schwab or
the mailing agent's fees in connection with this service as well as for timely
distribution. Fund Company agrees to have Schwab or the mailing agent
consolidate mailings of material to shareholders of more than one Fund if the
mailing is identical for all Funds in the Fund Company family.
b. In addition to the materials listed above, Fund Company agrees to
provide directly to Schwab all prospectuses, statements of additional
information and supplements and amendments thereto, and annual and other
periodic reports for each Fund in amounts reasonably requested by Schwab for
distribution to its customers. Fund Company is obligated to supply these
materials to Schwab in a timely manner so as to allow Schwab, at its own
expense, to send current prospectuses and statements of additional information
and periodic reports, immediately upon their effective dates, to customers and
prospective customers requesting them through Schwab. Schwab will also send a
current Fund prospectus with purchase trade confirmations for the initial
purchase of a Fund. Fund Company shall notify Schwab immediately of any change
to a Fund's prospectus.
c. If Schwab acts as clearing broker in an omnibus relationship with a
correspondent bank or broker ("Correspondent"), upon the request of Schwab,
Fund Company shall also provide to Schwab, in a timely manner, sufficient
supplies of Fund materials identified in Sections 10(a) and 10(b) for Schwab to
give to Correspondent for the distribution of such materials to Correspondent's
customers who hold Fund shares.
d. Fund Company shall ensure that the prospectus of each of its Funds
discloses that a broker may charge transaction fees on the purchase and/or sale
of Fund shares. Fund Company shall also ensure that either the prospectus, or
the statement of additional information if the statement of additional
information is incorporated in the prospectus, of each of its Funds discloses
(i) that the performance of the Fund may be compared in publications to the
performance of various indices and investments for which reliable performance
data is available, (ii) that the performance of the Fund may be compared in
publications to averages, performance
15
<PAGE> 27
rankings, or other information prepared by recognized mutual fund statistical
services, and (iii) that the annual report contains additional performance
information and will be made available to investors upon request and without
charge.
e. Schwab shall mail statements to its customers on a monthly basis (or as
to accounts in which there has been no activity in a particular month, no less
frequently than quarterly) showing, among other things, the number of shares of
each Fund owned by such customer and the net asset value of each such Fund as
of a recent date.
f. Schwab shall respond to customer inquiries regarding, among other
things, share prices, account balances, dividend amounts and dividend payment
dates. With respect to Fund shares purchased by customers after the effective
date of this Agreement, Schwab shall provide average cost basis reporting to
assist customers in the preparation of income tax returns.
11. New Processing Systems
Fund Company agrees to cooperate to the extent possible with Schwab as
Schwab develops and seeks to implement new processing systems for the MFMP.
16
<PAGE> 28
RETIREMENT PLAN ORDER PROCESSING AMENDMENT
TO THE OPERATING AGREEMENT
This Retirement Plan Order Processing Amendment is made as of June 20, 1997, by
and between Charles Schwab & Co., Inc. ("Schwab"), a California corporation;
The Charles Schwab Trust Company ("CSTC"), a California banking corporation;
and each registered investment company ("Fund Company") listed on Schedule I
hereto, executing this Amendment on its own behalf and on behalf of each of its
series or classes of shares ("Fund(s)"), which are parties to an Operating
Agreement with Schwab, made as of June 20, 1997, as amended thereafter
("Operating Agreement"), including such Funds as are listed on Schedule II
hereto, which are excluded from participation in retirement plan order
processing under this Amendment ("Excluded Funds"). This Amendment amends the
Operating Agreement. In the event that there are no Funds, then the term
"Fund(s)" shall mean "Fund Company."
WHEREAS, Schwab and Fund Company, on its own behalf and on behalf of the Funds,
have entered into the Operating Agreement pursuant to which shares of the Funds
are made available for purchase and redemption by Schwab's brokerage customers
through Schwab's Mutual Fund Marketplace(R) ("MFMP");
WHEREAS, Schwab has designated CSTC as its agent to perform certain functions
under the Operating Agreement, including communication of aggregate purchase
and redemption orders for Fund shares to each Fund, for which Schwab remains
fully responsible to Fund Company and the Funds;
WHEREAS, Schwab and Fund Company desire to amend the Operating Agreement to
facilitate the purchase and redemption of Fund shares on behalf of certain
retirement plans ("Plans") for which CSTC acts as trustee of the trust funds
under the Plans and for which an entity identified on Schedule II, as amended
by Schwab from time to time, acts as recordkeeper ("Recordkeeper"), subject to
the terms and conditions of this Amendment; and
WHEREAS, Fund Company wishes to appoint CSTC as a limited purpose co-transfer
agent to each Fund's named transfer agent to facilitate such purchases and
redemptions on behalf of the Plans, and CSTC wishes to accept this appointment.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises set
forth below, the parties hereto agree as follows:
1. Agency Appointment and Acceptance. Fund Company hereby appoints CSTC
to be a limited purpose co-transfer agent to each Fund's named transfer agent
for the purpose of receiving instructions in proper form from the persons
designated to direct investment of the Plan assets ("Instructions") from which
are derived orders for purchases and redemptions of Fund shares ("Orders").
CSTC hereby accepts the appointment as limited purpose co-transfer agent to
each Fund's named transfer agent.
1
<PAGE> 29
2. Agents of CSTC. CSTC, as a co-transfer agent, may engage such
sub-agents as it deems necessary, appropriate or desirable to carry out its
obligation as a limited purpose co-transfer agent to each Fund's named transfer
agent under Section 1 of this Amendment, pursuant to such terms as are
consistent with the agreements set forth in this Amendment and as CSTC deems
necessary, appropriate or desirable. CSTC shall, however, remain fully
responsible to Fund Company and the Funds for any obligations performed by
CSTC's agents under this Section 2. These agents of CSTC shall be the
Recordkeepers and shall each be a service company and a limited purpose
sub-transfer agent to CSTC as co-transfer agent to each Fund's named transfer
agent.
3. CSTC's Receipt and Transmission of Orders. CSTC agrees that (a) Orders
derived from Instructions received by Recordkeepers prior to the close of New
York Stock Exchange (generally, 4:00 p.m. Eastern Time) ("Market Close") on any
Business Day ("Day 1") will be transmitted by CSTC to the Fund by 10:00 a.m.
Eastern Time on the next Business Day ("Day 2") (such Orders are referred to
herein as "Day 1 Trades"); and (b) Orders derived from Instructions received by
Recordkeepers after Market Close on any Business Day ("Day 1") will be
transmitted by CSTC to the Fund by 10:00 a.m. Eastern Time on the second
Business Day following Day 1 ("Day 3") (such Orders are referred to herein as
"Day 2 Trades").
4. Fund's Pricing of Orders. Fund Company agrees that Day 1 Trades will
be effected at the net asset value of each Fund's shares ("Net Asset Value")
calculated as of Market Close on Day 1, provided such trades are received by
the Fund by 10:00 a.m. Eastern Time on Day 2; and Day 2 Trades will be effected
at the Net Asset Value calculated as of Market Close on Day 2, provided such
trades are received by the Fund by 10:00 a.m. Eastern Time on Day 3. Fund
Company agrees that, consistent with the foregoing, Day 1 Trades will have been
received by the Fund prior to Market Close on Day 1, and Day 2 Trades will have
been received by the Fund prior to Market Close on Day 2 for all purposes,
including, without limitation, effecting distributions.
5. Settlement. In accordance with the Operating Agreement, Schwab and
Fund Company will settle Day 1 Trades on Day 2 and will settle Day 2 Trades on
Day 3.
6. Provision of Net Asset Value. In accordance with the Operating
Agreement, Fund Company will provide Schwab the Net Asset Value calculated as
of Market Close on each Business Day by 7:00 p.m. Eastern Time on such Business
Day.
7. Representations and Warranties as to Transfer Agency. CSTC represents
and warrants that it is registered as a transfer agent under Section 17A of the
Securities Exchange Act of 1934, as amended ("1934 Act"), and CSTC will amend
its TA-1 filing to disclose its appointment pursuant to this Amendment as a
limited purpose co-transfer agent to each Fund's named transfer agent. CSTC
further represents and warrants that each Recordkeeper appointed by CSTC
pursuant to Section 2 of this Amendment shall be registered as a transfer agent
under Section 17A of the 1934 Act, and that it shall cause each Recordkeeper to
amend its TA-1 to disclose its appointment as a service company and a limited
purpose sub-transfer agent to CSTC as co-transfer agent to each Fund's named
transfer agent.
2
<PAGE> 30
Fund Company represents and warrants that the Funds' named transfer
agent is set forth on Schedule IV hereto, as amended by Fund Company
from time to time.
8. Books and Records. To the extent required under the Investment Company
Act of 1940, as amended ("1940 Act"), and the rules thereunder, CSTC agrees
that such records maintained by it or each Recordkeeper hereunder are the
property of the Funds and will be preserved, maintained, and made available in
accordance with the 1940 Act and the rules thereunder. Copies, or if required
originals, of such records shall be surrendered promptly to a Fund and its
agents (or independent accountants) upon request. This Section 8 shall survive
termination of this Amendment.
9. Role and Relationship of CSTC. The parties acknowledge and agree that,
except as specifically provided in this Amendment, and for the sole and limited
purpose set forth herein, CSTC acts as an agent for Schwab under the Operating
Agreement in connection with the effectuation of Orders subject to this
Amendment. CSTC shall not be nor hold itself out as an agent of any Fund other
than as provided herein.
10. Role and Relationship of Recordkeepers. The parties acknowledge and
agree that, except as specifically provided in this Amendment and for the sole
and limited purpose set forth herein, the Recordkeepers act as agents of the
Plans in connection with the effectuation of Orders subject to this Amendment.
The parties agree that the Recordkeepers are not agents of the Funds other than
as provided herein, and CSTC shall ensure that the Recordkeepers do not hold
themselves out as an agent of any Fund other than as provided herein.
11. Insurance Coverage. CSTC shall maintain, and shall cause each
Recordkeeper to maintain, general liability insurance, at all times that this
Amendment is in effect, that is reasonable and customary in light of its duties
hereunder. Such general liability insurance coverage shall be issued by a
qualified insurance carrier, with limits of not less than $5 million.
12. Termination. Fund Company will provide Schwab and CSTC 90 days' prior
written notice if purchase orders for a Fund's shares may no longer be effected
in accordance with this Amendment. Such termination shall not affect the
remaining provisions of this Amendment as to such Fund, and redemption orders
shall continue to be effected pursuant to this Amendment. Schwab and CSTC may
terminate this Amendment as to a Fund upon 90 days' prior written notice to
Fund Company.
Any termination of the Operating Agreement by Fund Company shall not
apply to transactions effected pursuant to this Amendment prior to 90
days after the date the Fund Company provides written notice of such
termination to Schwab and CSTC.
13. Indemnification. Schwab and CSTC, on the one hand, and Fund Company,
on the other, agree to indemnify and hold harmless Fund Company, on the one
hand, and Schwab and CSTC, on the other, together with each of its directors,
officers, employees and agents, from and against any and all losses,
liabilities, demands, claims, actions and expenses (including, without
limitation, reasonable attorney's fees) ("Losses") arising out of or in
connection with any breach by Schwab or CSTC, on the one hand, and Fund
Company, on the other, of its obligations under
3
<PAGE> 31
this Amendment, except to the extent such breach was a direct consequence of
an act or omission of an indemnified party constituting negligence or willful
misconduct. In no event will any party be liable for consequential,
incidental, special or indirect damages resulting to an indemnified party
subject to this Amendment. This Section 13 shall survive termination of this
Amendment.
14. Proprietary Information. The parties agree that all books, records,
information, and data pertaining to the business of the other party which are
exchanged or received pursuant to the negotiation or carrying out of this
Amendment, including but not limited to the information on Schedule III, as
amended by Schwab from time to time, and any reports regarding Fund
shareholdings of the Plans or the Recordkeepers that CSTC may provide to Fund
Company from time to time as part of its obligations as a limited purpose
co-transfer agent to each Fund's named transfer agent, shall be kept
confidential and shall not be otherwise used or voluntarily disclosed to any
other person, except as may be required by law or judicial process. Fund
Company expressly agrees not to use nor permit others to use any such books,
records, information, or data to solicit Plans, sponsors of Plans, or
Recordkeepers. This Section 14 shall survive termination of this Amendment.
15. Effect of Amendment. This Amendment is intended to amend and
supplement the provisions of the Operating Agreement. In the event of a
conflict between the provisions of this Amendment and the provisions of the
Operating Agreement, the provisions of this Amendment shall control. All other
provisions of the Operating Agreement shall remain in full force and effect.
CHARLES SCHWAB & CO., INC. THE HAVEN CAPITAL MANAGEMENT
TRUST, on its own behalf and on
behalf of each Fund
By:/s/ Fred Potts By:/s/ Colin C. Ferenbach
--------------------------- ---------------------------
Fred Potts
Vice President/Mutual Funds
Operations Administration Name: Colin C. Ferenbach
-------------------------
Date: 7/29/97 Title: President
------------------------- -----------------------
THE CHARLES SCHWAB TRUST Date: 7/11/97
COMPANY ------------------------
By: /s/ Thomas Torio
--------------------------
Thomas Torio
Vice President
Date: 8/1/97
------------------------
4
<PAGE> 32
SCHEDULE I
TO THE RETIREMENT PLAN ORDER PROCESSING AMENDMENT
TO THE OPERATING AGREEMENT, MADE AS OF JUNE 20, 1997
FUND COMPANY
The Haven Capital Management Trust
Date: June 20, 1997
5
<PAGE> 33
SCHEDULE II
TO THE RETIREMENT PLAN ORDER PROCESSING AMENDMENT
TO THE OPERATING AGREEMENT, MADE AS OF JUNE 20, 1997
EXCLUDED FUNDS
Dated: June 20, 1997
6
<PAGE> 34
SCHEDULE III
TO THE RETIREMENT PLAN ORDER PROCESSING AMENDMENT
TO THE OPERATING AGREEMENT, MADE AS OF JUNE 20, 1997
RECORDKEEPERS
Schwab Retirement Plan Services, Inc.
Date: June 20, 1997
7
<PAGE> 35
SCHEDULE IV
TO THE RETIREMENT PLAN ORDER PROCESSING AMENDMENT
TO THE OPERATING AGREEMENT, MADE AS OF JUNE 20, 1997
NAMED TRANSFER AGENT
PFPC, Inc.
Date: June 20, 1997
8
<PAGE> 36
LIMITED POWER OF ATTORNEY
Charles Schwab & Co., Inc. ("Schwab") does hereby make, constitute, and appoint
The Charles Schwab Trust Company ("CSTC"), as its trustee and lawful attorney or
agent ("Agent"), to transmit to each account for Schwab for the reinvestment of
capital gains and the reinvestment of dividends ("Account") with each of the
Haven mutual funds ("Funds"), which are parties to the Retirement Plan Order
Processing Amendment to the Operating Agreement ("Amendment"), dated June 20,
1997, by and among Schwab, CSTC, and the Funds or their transfer agent, orders
for the purchase or redemption of Fund shares for the Account, as set forth in
the Amendment.
Schwab agrees to indemnify and hold harmless the Funds and their transfer agent
from acting upon orders for purchase or redemption of Fund shares received from
Agent to the same extent as if the orders were received from Schwab under the
Agreement.
This authorization and indemnity is a continuing one and shall remain in full
force and effect and shall be binding upon Schwab until revoked by Schwab in
writing.
/s/ Matthew L. Sadler
----------------------------------
Matthew L. Sadler
Vice President - Mutual Funds
Date: 6/18/97
----------------------------
<PAGE> 37
CONFIDENTIALITY AGREEMENT
This Agreement is made as of the 20th day of June, 1997, between Charles Schwab
& Co., Inc. ("Schwab"), a California corporation, and Haven Capital Management,
Inc. ("Fund Affiliate"), an affiliate of the registered investment company(ies),
listed on Schedule I of the Operating Agreement between Schwab and The Haven
Capital Management Trust, made as of June 20, 1997.
RECITALS
A. Fund Affiliate wishes Schwab to provide it with the names and addresses of
investment managers and retirement plan administrators, whose clients hold
positions in any of the funds (as defined in the Operating Agreement), for
purposes of Fund Affiliate's direct marketing and communication with these
investment managers and retirement plan administrators and for purposes of
tracking the demographics of sale of the Fund shares. Fund Affiliate mailings
using this confidential, proprietary information may occur through a mailing
agent for the Fund Affiliate.
B. Subject to the terms and conditions herein or as may be mutually agreed upon
in writing from time to time, Schwab is willing to provide to Fund Affiliate
such confidential, proprietary information.
AGREEMENT
THEREFORE, in consideration of the foregoing and the mutual promises set forth
below, the parties agree as follows:
1. Definitions. As used in this Agreement, each of the following terms will have
the meaning ascribed thereto:
a. "Schwab Institutional Customer" means a Schwab customer who is an
investment manager or retirement plan administrator whose client(s) hold
position(s) in any of the Funds.
b. "Mailing Agent" means the person or entity with whom Fund Affiliate
contracts to act as its agent in performing mailings to Schwab Institutional
Customers and to whom Fund Affiliate provides names and addresses of Schwab
Institutional Customers received from Schwab under this Agreement;
c. "Objecting Customer" means any Schwab Institutional Customer who has
made objection to the release of his or her name or address.
d. "Proprietary Information" means the lists of names and addresses of
Schwab Institutional Customers, other than Objecting Customers, together with
the opening and closing position in the Fund(s) by each master account and any
activity which has occurred in the master account subsequent to any previous
reporting, which will be provided to Fund Affiliate under this Agreement.
1
<PAGE> 38
2. Access to Proprietary Information.
a. During the term of this Agreement, Schwab will provide to Fund
Affiliate on a monthly basis, the Proprietary Information for that month. The
Proprietary Information shall be provided together with the master accounts of
Objecting Customers - which shall be identified only by coded account number.
b. Fund Affiliate will hold the Proprietary Information in strictest
confidence and will use the Proprietary Information solely for the business
purposes set forth in Recital A above. Fund Affiliate will have in effect, and
enforce, rules and policies designed to protect against unauthorized access to
or use of the Proprietary Information, including instruction of and written
agreements with their employees and Mailing Agent to insure that they protect
the confidentiality of the Proprietary Information. Fund Affiliate may disclose
Proprietary Information to its responsible employees and Mailing Agent only to
the extent necessary to carry out the purpose for which Proprietary Information
is disclosed. Fund Affiliate shall instruct its employees not to disclose
Proprietary Information to third parties, except to Mailing Agent.
c. Fund Affiliate shall not be prevented from using or disclosing any
information or material, or any element thereof, whether or not such information
or material is Proprietary Information for the purposes of this Agreement, to
the extent any such information or material, or any element thereof:
i. has been previously published or is published hereafter, unless
such publication is itself a breach of this Agreement or a similar confidential
disclosure agreement with Schwab;
ii. was already known to Fund Affiliate prior to being disclosed by
Schwab as evidenced by written records kept in the ordinary course of business
of Fund Affiliate or by proof of actual use by Fund Affiliate;
iii. has been or is hereafter rightfully received by Fund Affiliate
from a third person without restriction on disclosure and without breach of this
Agreement; or
iv. has been independently developed by Fund Affiliate.
It shall be presumed that any Proprietary Information in Fund Affiliate's
possession is not within exceptions (iii) or (iv) above, and the burden is on
Fund Affiliate to prove otherwise by records and documentation.
d. Fund Affiliate may release Proprietary Information if required by law
or by order or requirement of any court or governmental authority; provided that
prior to releasing Proprietary Information pursuant to any such requirement or
order, Fund Affiliate shall so notify Schwab. If feasible, such notice shall be
provided not less than five (5) business days prior to the required disclosure.
Fund Affiliate will use reasonable efforts not to release the Proprietary
Information pending the outcome of any measures taken by Schwab to contest the
requirement or order.
2
<PAGE> 39
e. Fund Affiliate acknowledges and agrees that it or its agent's breach
of any part of this Agreement will result in irreparable harm to Schwab for
which an adequate remedy is not available at law. Accordingly, in such event,
Schwab shall be entitled, in addition to any other remedies available, to
equitable relief, including preliminary injunction and restraining order.
f. Fund Affiliate shall receive Proprietary Information back from any
Mailing Agent, and destroy all tangible and non-tangible representations of
Proprietary Information, within thirty (30) days of its receipt, upon receipt of
Proprietary Information for a more recent month, or at termination of this
Agreement, whichever is sooner. Fund Affiliate shall, if so requested by Schwab,
deliver a letter to Schwab confirming the return and the destruction of the
Proprietary Information.
g. Schwab reserves all rights in the Proprietary Information pursuant to
any patents and copyrights contained therein. Fund Affiliate recognizes and
agrees that nothing contained in this Agreement shall be construed as granting
any rights, license or otherwise, to any Proprietary Information disclosed
pursuant to this Agreement.
h. Fund Affiliate shall, at its own expense, take all reasonable steps,
including the initiation and prosecution of actions at law or in equity,
necessary to prevent disclosure of any Proprietary Information by any
representative or employee of Fund Affiliate or Mailing Agent and to prevent the
unauthorized use or disclosure of any Proprietary Information by any other
person who gained such Proprietary Information from Fund Affiliate or its agent,
representatives, or employee in violation of the terms of this Agreement.
3. Responsibility for Communications. Fund Affiliate acknowledges its sole
responsibility for any communication made with or mailings sent to Schwab
Institutional Customers hereunder, and the compliance of such communications and
mailings with all applicable laws and regulations.
4. Indemnification. Fund Affiliate shall indemnify and hold harmless Schwab and
each director, officer, employee and agent of Schwab from and against any and
all claims, liabilities, losses, damages, and expenses of any nature, including
counsel fees ("Losses") arising out of (i) any use made by Fund Affiliate or
Mailing Agent of the Proprietary Information, (ii) any failure by Fund Affiliate
or Mailing Agent to comply with any applicable laws and regulations, and (iii)
any action taken or omitted to be taken by Schwab in observance of the terms of
this Agreement.
5. Liability. Fund Affiliate shall cause Mailing Agent to enter into a contract
with Fund Affiliate, in which Schwab shall be named as an express third party
beneficiary, requiring that the Proprietary Information be kept confidential as
provided in this Agreement and not used for any other purpose than envisioned
under this Agreement. Fund Affiliate understands and agrees that it shall be
liable for any failure of the Mailing Agent to keep the Proprietary Information
confidential to the extent provided in this Agreement.
3
<PAGE> 40
6. Assignability. This Agreement shall be binding upon, and shall inure to the
benefit of, the parties and their respective successors and assigns. Any
assignment (within the meaning of Section 2(a)(4) of the Investment Company Act
of 1940, as amended) of this Agreement by Fund Affiliate is prohibited without
Schwab's prior written consent.
7. Termination. Schwab may terminate this Agreement by giving Fund Affiliate ten
(10) days prior written notice. The termination of this Agreement shall not
affect Fund Affiliate's obligations or rights with respect to Proprietary
Information disclosed prior to the effective date of termination.
8. Choice of Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of California applicable to agreements
made and performed in California by California residents. If any provision of
this Agreement is determined to be illegal or unenforceable by competent
judicial authority, all other terms and provisions shall nevertheless remain
effective and shall be enforced to the fullest extent permitted by law.
9. Single Agreement. This Agreement may be signed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same agreement.
10. Waiver. No delay or omission by a party in exercising any rights under this
Agreement will operate as a waiver of that or any other right. A waiver or
consent given by a party on one occasion is effective only in that instance and
will not be construed as bar to or waiver of any right on any other occasion.
11. Entire Agreement. This Agreement contains the entire agreement between the
parties with respect to the subject matter hereof. Any modification of this
Agreement must be in writing and signed by both parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
Haven Capital Management, Inc. CHARLES SCHWAB & CO., INC.
Name of Fund Affiliate
By: /s/ Colin C. Ferenbach By: /s/ Matthew L. Sadler
----------------------------- --------------------------------
Matthew L. Sadler
Name: Colin C. Ferenbach Vice President
-------------------------- Mutual Funds
Title: President
-------------------------
Date: 7/11/97 Date: 7/28/97
-------------------------- ---------------------------
4
<PAGE> 1
EXHIBIT 99.B6-4
Servicing Agreement
With NISC
NO TRANSACTION FEE FUND SERVICING AGREEMENT
This Agreement is made as of March 26, 1997, by and between National
Investor Services Corp. ("NISC"), located at 55 Water Street, New York, NY, and
Haven Capital Management Trust (the "Fund"), located at P.O. Box 8903
Wilmington, DE 19899-8903.
WHEREAS, NISC functions as a clearing agent for introducing
broker-dealers/correspondents ("participating correspondents") and in such
capacity performs traditional operational functions, including execution and
clearance of trades and custody of Client-shareholders' funds and securities;
WHEREAS, NISC or participating correspondents will execute orders for
new shares free of transaction charges to the client/shareholders, provided
certain minimum purchase amount criteria are met, as same may be modified from
time to time ("Program shares");
WHEREAS, the Fund desires to have NISC perform certain recordkeeping,
shareholder communication, and other services;
NOW THEREFORE, in consideration of the foregoing and the mutual
promises set forth below, the parties agree as follows:
1. Services
a. NISC agrees to perform certain services for the Client-shareholders
as more particularly set forth below. "Client-shareholders" shall mean those
participating correspondent clients who maintain an interest in an omnibus
account with the Fund registered in NISC's name for their exclusive benefit and
who receive services from NISC under this Agreement.
b. NISC represents and warrants that it has and will continue at all
times (i) to maintain necessary facilities, equipment and personnel to perform
its services hereunder and (ii) comply with applicable laws, rules and
regulations including the maintenance and preservation of all required records
and registrations.
<PAGE> 2
2
c. NISC represents and warrants that all Client-shareholders are aware
that they are transacting business with NISC and not the Fund, and that they
will look only to NISC and not the Fund for resolution of problems or
discrepancies in their accounts.
d. NISC agrees that it will establish with the Fund one or more omnibus
accounts registered in NISC's name for the exclusive benefit of its customers
who are Client-shareholders in the Fund, and will perform various services for
the Client-shareholders in those accounts, including without limitation:
establishing and maintaining records of Client-shareholders' accounts;
processing purchase and redemption transactions; confirming Client-shareholder
transactions; answering routine client inquiries regarding the Fund; providing
assistance to Client-shareholders in effecting changes to their dividend
options, account designations and addresses; withholding taxes on non-resident
alien accounts; disbursing income dividends and capital gains distributions;
reinvesting dividends and distributions; preparing and delivering to
Client-shareholders, and state and federal authorities including the United
States Internal Revenue Service, such information respecting dividends and
distributions paid by the Funds as may be required by law, or regulation;
withholding on dividends and distributions as may be required by state or
Federal authorities from time to time; and such other services as the Fund may
reasonably request.
e. NISC shall maintain all historical Client-shareholder records
consistent with requirements of all applicable laws, rules and regulations. Upon
request of the Fund, NISC shall provide copies of written communications
regarding the Fund to or from such Client-shareholders. NISC shall upon request
make available to the Fund such records or communications as may be necessary to
determine the number of Client-shareholders in each NISC omnibus account. If, at
any time, the Fund determines NISC's practices, procedures or controls to be
inadequate, written notice of such inadequacy shall be given to NISC, and NISC
shall have fifteen (15) days plus any additional time as provided by the Fund to
correct such inadequacy. In the event such inadequacy is not corrected by NISC,
the Fund shall have the right to immediately terminate this Agreement. Nothing
in this Agreement shall impose upon the Fund the obligation to review NISC's
practices, procedures and controls.
f. The official records of transactions of NISC's omnibus accounts and
the number of shares in such accounts shall be as determined by the Fund. NISC
shall bear responsibility for any discrepancies between its omnibus accounts and
the Client-shareholder accounts and for the maintenance of all records regarding
the Client-shareholders, the Client-shareholders' transactions, and the
Client-shareholders' interest in the omnibus accounts.
g. NISC assumes sole responsibility for reconciliation of customer
accounts with its omnibus account at the Fund. The Fund agrees to assist NISC
with such reconciliation where necessary.
<PAGE> 3
3
h. The Fund shall have sole authority and responsibility under this
Agreement for countersigning securities of the Fund, monitoring the issuance of
securities of the Fund with a view to preventing unauthorized issuance,
registering the transfer of securities of the Fund, exchanging or converting
securities of the Fund or transferring record ownership of securities of the
Fund by bookkeeping entry without physical issuance of securities certificates
of the Fund. NISC understands that the Fund does not make available certificates
for shares of the Fund.
2. Fees
a. For performance of the services described herein, NISC shall receive
a fee (the "Fee") which will be paid quarterly at the annual rate applicable to
the average aggregate daily net asset value of shares of the Fund in the
accounts for which NISC provides services. Fees are solely for shareholder
servicing and other administrative services provided by NISC and do not
constitute payment in any manner for investment advisory, distribution, trustee,
or custodial services. The terms, conditions and amounts of such payments are
set forth in Schedule A to this Agreement.
b. In computing NISC's fee, one-twelfth of the applicable fee rate set
forth in Schedule A shall be applied to the average aggregate daily net asset
value of shares of the Fund in accounts for which NISC provides services during
the quarter in question. For the quarter in which this Agreement becomes
effective or terminates, there shall be an appropriate proration based on the
number of days that the Agreement is in effect during the quarter.
c. Except as otherwise agreed in writing with the Fund with respect to
specific expenditures by NISC, NISC shall bear sole responsibility for all costs
and expenses of providing services under this Agreement.
3. Transaction Charges
NISC shall not, during the term of this Agreement, assess against, or
collect from, Client-shareholders, any transaction fee upon the purchase or
redemption of any of the Fund's shares that meet the minimum purchase criteria
set forth in this Agreement, except as noted in Section 4 below.
Client-shareholder purchases not meeting the criteria as set forth herein may be
charged a transaction fee and any such fee shall not be included in service fee
invoices presented for payment.
4. Short Term Redemptions and Transfers
<PAGE> 4
4
a. It is hereby agreed that NISC may apply a redemption fee for any
short-term redemption of shares purchased within specified time frames.
b. NISC reserves the right to apply a fee for the transfer of any fund
position purchased within specified time frames.
c. Any such charges shall be imposed in such manner as to make it clear
to the redeeming Client-shareholder that the fee is not being charged by the
Fund.
5. Relationship of Parties
a. The relationship between NISC and the Fund shall be that of
independent contractors and neither party shall be or represent itself to be an
agent, employee, partner or joint venturer of the other, nor shall either party
have or represent itself to have any power or authority to act for, bind or
commit the other.
b. The parties acknowledge and agree that the services under this
Agreement are recordkeeping, shareholder communication, and related services
only and are not the services of an underwriter or a principal underwriter
within the meaning of the Securities Act of 1933, as amended, or the 1940 Act.
This Agreement does not grant NISC any right to purchase shares as a principal
from the Fund, nor does it constitute NISC an agent of the Fund for purposes of
selling shares of the Fund to any dealer or to the public. To the extent NISC is
involved in the purchase of shares of any fund by Client-shareholders, such
involvement will be as agent of such Client-shareholders only.
6. Indemnification
a. NISC shall indemnify and hold harmless the Fund, its directors,
officers, employees, and agents (hereinafter "Indemnified Parties") from and
against any and all losses, claims, liabilities and expenses (including, but not
limited to, reasonable attorney's fees) incurred by any of them and arising as a
result of: (i) NISC's dissemination of information regarding the Fund that is
materially incorrect and that was not provided to NISC by the Fund, or approved
in writing by the Fund, its affiliated persons (as defined in the Investment
Company Act of 1940, as amended (the "1940 Act")) or agents; or (ii) NISC's
willful misconduct or negligence in the performance of, or failure to perform,
its obligations under this Agreement, except to the extent the losses are a
result of the negligence, willful misconduct, or breach of this Agreement by an
Indemnified Party.
b. The Fund hereby agrees to indemnify NISC against any and all losses,
claims, damages and liabilities to which NISC may become subject as a result of
any untrue statement of
<PAGE> 5
5
a material fact contained in the Fund's prospectus or statement of additional
information, as amended or supplemented from time to time, or the omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading.
c. In any event, neither party shall be liable for any special,
consequential or incidental damages.
7. Information to be Provided
The Fund shall provide to NISC, prior to the effectiveness of this
Agreement, or as soon thereafter as possible, a copy of the current prospectus
and statement of additional information. The Fund shall provide NISC with
written copies of any amendments to, or changes in such documents as soon as
possible after such amendments or changes become available. The Fund shall
additionally provide NISC with reasonable supplies of prospectuses upon request.
NISC shall provide the Fund with such information about the services and
activities of NISC under this agreement as the Fund shall, from time to time,
reasonable request.
8. Notices
All notices required under this Agreement must be in writing and
delivered either personally or via first class mail. Such notices will be deemed
to be received as of the date of actual receipt, or three (3) days after deposit
in the United States mail, whichever is earlier.
All such notices shall be made, if to NISC, to: Thomas F. Quercia,
Senior Vice President, 55 Water Street, New York, NY 10041; if to Fund, to P.O.
Box 8903 Wilmington, DE 19899-8903.
9. Nonexclusivity
Each party acknowledges that the other may enter into agreements,
similar to this one, with other parties, for the performance of services similar
to those to be provided under this Agreement.
10. Severability
If any provision of this Agreement should be invalid, illegal or in
conflict with any applicable state or federal law or regulation, such law or
regulation shall control, to the extent of such conflict, without affecting the
remaining provision of this Agreement.
<PAGE> 6
6
11. Licenses
NISC represents and warrants that it is a corporation duly organized
under the laws of the State of New York and is duly licensed and/or qualified
and in good standing as a broker/dealer with the SEC, the NASD and in every
state or territory of the United States of America (including the District of
Columbia) where such licensing or qualification is required and has the
requisite authority to enter into this Agreement and to carry out the services
contemplated herein.
12. Entire Agreement; Amendment
This Agreement, including any exhibits attached hereto, constitute the
entire agreement between the parties with regard to the subject matter herein.
Additionally, these materials supersede any and all agreements, representations
and warranties, wither written or oral, made prior to the execution of this
Agreement. This Agreement and the exhibits attached hereto may be amended only
by a writing signed by both parties.
13. Term and Termination
This Agreement shall become effective as of the date it is accepted by
NISC and will continue in effect until terminated in writing upon notification
by either party to the other; provided, that NISC shall be entitled to receive
all Fees it has earned up to and including the effective date of the
termination.
14. Assignability
This Agreement is not assignable by either party without the other
party's prior written consent. Any attempted assignment in contravention hereof
shall be null and void; provided, however, that NISC may assign its rights and
obligations under this Agreement to any affiliate of NISC.
15. Governing Law
This Agreement shall be governed by, and interpreted in accordance with
the laws of the State of New York, without reference to conflicts of law
provisions thereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed the day and year first above written.
<PAGE> 7
7
NATIONAL INVESTOR SERVICES CORP.
By: /S/ Thomas F. Quercia
------------------------------
Name: Thomas F. Quercia
----------------------------
Title: Senior Vice President
---------------------------
HAVEN CAPITAL MANAGEMENT
By: /S/ Colin C. Ferenbach
------------------------------
Name: Colin C. Ferenbach
----------------------------
Title: President
---------------------------
<PAGE> 8
SCHEDULE A
NO TRANSACTION FEE FUND SERVICING AGREEMENT
FEE SCHEDULE
Fee payable to National Investor Services Corp. is based on the
average aggregate net asset value of the Trust included in this agreement.
<TABLE>
<CAPTION>
- ----------------------------------------------------------
NET ASSET VALUE Rate
- ----------------------------------------------------------
<S> <C>
Less than $50,000,000 .0035
- ----------------------------------------------------------
Less than $100,000,000 .0030
- ----------------------------------------------------------
Greater than $100,000,000 .0025
- ----------------------------------------------------------
</TABLE>
<PAGE> 1
EXHIBIT 99.B.6-5
Letter Agreement
With Hewes Communications
HEWES COMMUNICATIONS, INC.
As of September 30, 1996
Colin Ferenbach
Haven Capital Management Trust
655 Third Avenue
New York, NY 10017
Dear Colin:
This letter constitutes an agreement between The Haven Capital Management Trust
and Hewes Communications, Inc., to cover the media relations program that Hewes
Communications will conduct on behalf of The Haven Fund.
Beginning October 1, 1996, Hewes Communications will conduct an ongoing media
relations program and serve as public relations counsel for The Haven Fund. The
Haven Fund will pay a monthly retainer fee of $3,500 to Hewes Communications and
reimburse expenses (including messenger and overnight delivery, phone, fax,
publications, photocopying, postage, travel and entertainment, and subcontracted
services) incurred by Hewes Communications in the course of conducting the
program.
This agreement may be canceled by either party with 30 days' written notice.
This agreement may also be terminated at any time, without the payment of any
penalty, by vote of a majority of the members of the trustees of The Haven
Capital Management Trust who are not interested persons of the Trust and have no
direct or indirect financial interest in the operation of the Trust's
distribution plan or in any agreements related to the plan or by vote of a
majority of the outstanding voting securities of The Haven Fund on not more than
sixty days' written notice to any other party to the agreement. This agreement
will automatically and immediately terminate in the event of its "assignment."
(As used in this agreement, the terms "majority of the outstanding voting
securities," "interested persons" and "assignment" shall have the same meanings
as such terms have in the Investment Advisers Act of 1940.)
<PAGE> 2
If these terms are acceptable to Haven Capital Management Trust, please indicate
your consent to this agreement by signing below and returning an executed copy
of this letter to Hewes Communications by fax and by regular mail.
Sincerely,
Tucker Hewes -----------------------------------
President Signed
Hewes Communications, Inc.
Colin Ferenbach
President
The Haven Capital Management Trust
<PAGE> 1
EXHIBIT 99.B8-1
Custodian
Services Agreement
CUSTODIAN SERVICES AGREEMENT
THIS AGREEMENT is made as of June 17, 1994 by and between PNC
BANK, NATIONAL ASSOCIATION, a national banking association ("PNC Bank"), and The
Haven Capital Management Trust, a Delaware business trust (the "Fund").
W I T N E S S E T H:
WHEREAS, the Fund is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Fund wishes to retain PNC Bank to provide
custodian services to its investment portfolios listed on Exhibit A attached
hereto and made a part hereof and as such Exhibit A may be amended from time to
time (each a "Portfolio"), and PNC Bank wishes to furnish custodian services,
either directly or through an affiliate or affiliates, as more fully described
herein.
NOW, THEREFORE, In consideration of the premises and mutual
covenants herein contained, and intending to be legally bound hereby, the
parties hereto agree as follows:
<PAGE> 2
1. DEFINITIONS. AS USED IN THIS AGREEMENT:
(a) "1933 Act" means the Securities Act of 1933, as
amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as
amended.
(c) "Authorized Person" means any officer of the Fund and any
other person duly authorized by the Fund's Board of Trustees to give Oral
Instructions and Written Instructions on behalf of the Fund and listed on the
Authorized Persons Appendix attached hereto and made a part hereof or any
amendment thereto as may be received by PNC Bank. An Authorized Person's scope
of authority may be limited by the Fund by setting forth such limitation in the
Authorized Persons Appendix.
(d) "Book-Entry System" means Federal Reserve Treasury
book-entry system for United States and federal agency securities, its successor
or successors, and its nominee or nominees and any book-entry system maintained
by an exchange registered with the SEC under the 1934 Act.
2
<PAGE> 3
(e) "CEA" means the Commodities Exchange Act, as amended.
(f) "Oral Instructions" mean oral instructions received by PNC
Bank from an Authorized Person or from a person reasonably believed by PNC Bank
to be an Authorized Person.
(g) "PNC Bank" means PNC Bank, National Association or a
subsidiary or affiliate of PNC Bank, National Association.
(h) "SEC" means the Securities and Exchange Commission.
(i) "Securities Laws" mean the 1933 Act, the 1934 Act, the
1940 Act and the CEA.
(j) "Shares" mean the shares of beneficial interest of any
series or class of the Fund.
(k) "Property" means:
(i) any and all securities and other investment items
which the Fund may from time to time deposit, or
cause to be deposited, with PNC Bank or which PNC
Bank may from time to time hold for the Fund on
behalf of the Portfolios;
3
<PAGE> 4
(ii) all income in respect of any of such securities
or other investment items;
(iii) all proceeds of the sale of any of such
securities or investment items; and
(iv) all proceeds of the sale of securities issued by
the Fund on behalf of the Portfolios, which are
received by PNC Bank from time to time, from or
on behalf of the Fund.
(l) "Written Instructions" mean written instructions
signed by two Authorized Persons and received by PNC Bank. The instructions may
be delivered by hand, mail, tested telegram, cable, telex or facsimile sending
device.
2. APPOINTMENT. The Fund hereby appoints PNC Bank to provide
custodian services to each of the Portfolios in accordance with the terms set
forth in this Agreement, PNC Bank accepts such appointment and agrees to furnish
such services.
3. DELIVERY OF DOCUMENTS. The Fund has provided or, where
applicable, will provide PNC Bank with the following:
(a) certified or authenticated copies of the
resolutions of the Fund's Board of Trustees,
4
<PAGE> 5
approving the appointment of PNC Bank or its
affiliates to provide services;
(b) a copy of the Fund's most recent effective
registration statement on Form N-1A;
(c) a copy of each Portfolio's advisory
agreements;
(d) a copy of the distribution agreement with
respect to each class of Shares;
(e) a copy of each Portfolio's administration agreement
if PNC Bank is not providing the Portfolio with such
services;
(f) copies of any shareholder servicing agreements
made in respect of the Fund or a Portfolio;
and
(g) certified or authenticated copies of any and
all amendments or supplements to the
foregoing.
4. COMPLIANCE WITH GOVERNMENT RULES AND REGULATIONS.
Subject to Section 13, PNC Bank will comply with all applicable
requirements of the Securities Laws and any laws, rules and regulations of
governmental authorities having jurisdiction with respect to the duties to be
performed by PNC Bank hereunder. Except as specifically set forth herein, PNC
Bank assumes no responsibility for such compliance by the Fund or any Portfolio.
5
<PAGE> 6
5. INSTRUCTIONS.
(a) Unless otherwise provided in this Agreement, PNC Bank
shall act only upon Oral and Written Instructions.
(b) PNC Bank shall be entitled to rely upon any Oral and
Written Instructions it receives from an Authorized Person (or from a person
reasonably believed by PNC Bank to be an Authorized Person) pursuant to this
Agreement. PNC Bank may assume that any Oral or Written Instructions received
hereunder are not in any way inconsistent with the provisions of organizational
documents of the Fund or of any vote, resolution or proceeding of the Fund's
Board of Trustees or of the Fund's shareholders, unless and until PNC Bank
receives Written Instructions to the contrary.
(c) The Fund agrees to forward to PNC Bank Written
Instructions confirming Oral Instructions (except where such Oral Instructions
are given by PNC Bank or its affiliates) so that PNC Bank receives the Written
Instructions by the close of business on the same day that such Oral
Instructions are received. The fact that such confirming Written Instructions
are not received by PNC Bank shall in no way invalidate the
6
<PAGE> 7
transactions or enforceability of the transactions authorized by the Oral
Instructions. Where Oral or Written Instructions reasonably appear to have been
received from an Authorized Person, PNC Bank shall incur no liability to the
Fund in acting upon such Oral or Written Instructions provided that PNC Bank's
actions comply with the other provisions of this Agreement.
6. RIGHT TO RECEIVE ADVICE.
(a) Advice of the Fund. If PNC Bank is in doubt as to any
action it should or should not take, PNC Bank may request directions or advice,
including Oral or Written Instructions, from the Fund.
(b) Advice of Counsel. If PNC Bank shall be in doubt as to any
question of law pertaining to any action it should or should not take, PNC Bank
may request advice at its own cost from such counsel of its own choosing (who
may be counsel for the Fund, the Fund's investment adviser or PNC Bank, at the
option of PNC Bank).
(c) Conflicting Advice. In the event of a conflict
between directions, advice or Oral or Written Instructions PNC
7
<PAGE> 8
Bank receives from the Fund, and the advice it receives from counsel, PNC Bank
shall be entitled to rely upon and follow the advice of counsel. In the event
PNC Bank so relies on the advice of counsel, PNC Bank remains liable for any
action or omission on the part of PNC Bank which constitutes willful
misfeasance, bad faith, gross negligence or reckless disregard by PNC Bank of
any duties, obligations or responsibilities set forth in this Agreement.
(d) Protection of PNC Bank. PNC Bank shall be protected in any
action it takes or does not take in reliance upon directions, advice or Oral or
Written Instructions it receives from the Fund or from counsel and which PNC
Bank believes, in good faith, to be consistent with those directions, advice or
Oral or Written Instructions. Nothing in this section shall be construed so as
to impose an obligation upon PNC Bank (i) to seek such directions, advice or
Oral or Written Instructions, or (ii) to act in accordance with such directions,
advice or Oral or Written Instructions unless, under the terms of other
provisions of this Agreement, the same is a condition of PNC Bank's properly
taking or not
8
<PAGE> 9
taking such action. Nothing in this subsection shall excuse PNC Bank when an
action or omission on the part of PNC Bank constitutes willful misfeasance, bad
faith, gross negligence or reckless disregard by PNC Bank of any duties,
obligations or responsibilities set forth in this Agreement.
7. RECORDS; VISITS. The books and records pertaining to the
Fund and any Portfolio, which are in the possession or under the control of PNC
Bank, shall be the property of the Fund. Such books and records shall be
prepared and maintained as required by the 1940 Act and other applicable
securities laws, rules and regulations. The Fund and Authorized Persons shall
have access to such books and records at all times during PNC Bank's normal
business hours. Upon the reasonable request of the Fund, copies of any such
books and records shall be provided by PNC Bank to the Fund or to an authorized
representative of the Fund, at the Fund's expense.
8. CONFIDENTIALITY. PNC Bank agrees on its own behalf and that
of its employees to keep confidential all records of the Fund and information
relating to the Fund and
9
<PAGE> 10
its shareholders (past, present and future), unless the release of such records
or information is otherwise consented to, in writing, by the Fund. The Fund
agrees that such consent shall not be unreasonably withheld and may not be
withheld where PNC Bank may be exposed to civil or criminal contempt proceedings
or when required to divulge such information or records to duly constituted
authorities.
9. COOPERATION WITH ACCOUNTANTS. PNC Bank shall cooperate with
the Fund's independent public accountants and shall take all reasonable action
in the performance of its obligations under this Agreement to ensure that the
necessary information is made available to such accountants for the expression
of their opinion, as required by the Fund.
10. DISASTER RECOVERY. PNC Bank shall enter into and shall
maintain in effect with appropriate parties one or more agreements making
reasonable provisions for emergency use of electronic data processing equipment
to the extent appropriate equipment is available. In the event of equipment
failures, PNC Bank shall, at no additional expense to the Fund, take reasonable
steps to minimize service interruptions.
10
<PAGE> 11
PNC Bank shall have no liability with respect to the loss of data or service
interruptions caused by equipment failure provided such loss or interruption is
not covered by PNC Bank's own willful misfeasance, bad faith, gross negligence
or reckless disregard of its duties or obligations under this Agreement.
11. COMPENSATION. As compensation for custody services
rendered by PNC Bank during the term of this Agreement, the Fund, on behalf of
each of the Portfolios, will pay to PNC Bank a fee or fees as may be agreed to
in writing from time to time by the Fund and PNC Bank.
12. INDEMNIFICATION. The Fund, on behalf of each Portfolio,
agrees to indemnify and hold harmless PNC Bank and its affiliates from all
taxes, charges, expenses, assessments, claims and liabilities (including,
without limitation, liabilities arising under the Securities Laws and any state
and foreign securities and blue sky laws, and amendments thereto), and expenses,
including (without limitation) attorneys' fees and disbursements, arising
directly or indirectly from any action or omission to act which PNC Bank
11
<PAGE> 12
takes (i) at the request or on the direction of or in reliance on the advice of
the Fund or (ii) upon Oral or Written Instructions. Neither PNC Bank, nor any of
its affiliates, shall be indemnified against any liability (or any expenses
incident to such liability) arising out of PNC Bank's or its affiliates' own
willful misfeasance, bad faith, negligence or reckless disregard of its duties
under this Agreement.
13. RESPONSIBILITY OF PNC BANK.
(a) PNC Bank shall be under no duty to take any action on
behalf of the Fund or any Portfolio except as specifically set
forth herein or as may be specifically agreed to by PNC Bank in writing. PNC
Bank shall be obligated to exercise care and diligence in the performance
of its duties hereunder, to act in good faith and to use its best efforts,
within reasonable limits, in performing services provided for under this
Agreement. PNC Bank shall be liable for any damages arising out of PNC
Bank's failure to perform its duties under this agreement to the extent
such damages arise out of PNC Bank's willful misfeasance, bad faith,
negligence or reckless disregard of its duties under this Agreement.
12
<PAGE> 13
(b) Without limiting the generality of the foregoing or of any
other provision of this Agreement, (i) PNC Bank shall not be under any duty or
obligation to inquire into and shall not be liable for (A) the validity or
invalidity or authority or lack thereof of any Oral or Written Instruction,
notice or other instrument which conforms to the applicable requirements of this
Agreement, and which PNC Bank reasonably believes to be genuine; or (B) subject
to section 10, delays or errors or loss of data occurring by reason of
circumstances beyond PNC Bank's control, including acts of civil or military
authority, national emergencies, fire, flood, catastrophe, acts of God,
insurrection, war, riots or failure of the mails, transportation, communication
or power supply.
(c) Notwithstanding anything in this Agreement to the
contrary, PNC Bank shall have no liability to the Fund or to any Portfolio for
any consequential, special or indirect losses or damages which the Fund may
incur or suffer by or as a consequence of PNC Bank's performance of the services
provided hereunder, whether or not the likelihood of such losses or damages was
known by PNC Bank.
13
<PAGE> 14
14. DESCRIPTION OF SERVICES.
(a) Delivery of the Property. The Fund will
deliver or arrange for delivery to PNC Bank, all the Property owned by the
Portfolios, including cash received as a result of the distribution of Shares,
during the period that is set forth in this Agreement. PNC Bank will not be
responsible for such property until actual receipt.
(b) Receipt and Disbursement of Money. PNC Bank, acting upon
Written Instructions, shall open and maintain separate accounts in the Fund's
name using all cash received from or for the account of the Fund, subject to the
terms of this Agreement. In addition, upon Written Instructions, PNC Bank shall
open separate custodial accounts for each separate series or Portfolio of the
Fund (collectively, the "Accounts") and shall hold in the Accounts all cash
received from or for the Accounts of the Fund specifically designated to each
Portfolio.
PNC Bank shall make cash payments from or for the Accounts of
a Portfolio only for:
14
<PAGE> 15
(i) purchases of securities in the name of a
Portfolio or PNC Bank or PNC Bank's nominee as
provided in sub-section (j);
(ii) purchase or redemption of Shares of the Fund
delivered to PNC Bank;
(iii) payment of, subject to Written Instructions,
interest, taxes, administration, accounting,
distribution, advisory, management fees or similar
expenses which are to be borne by a Portfolio;
(iv) payment to, subject to receipt of Written
Instructions, the Fund's transfer agent, as
agent for the shareholders, an amount equal to
the amount of dividends and distributions
stated in the Written Instructions to be
distributed in cash by the transfer agent to
shareholders, or, in lieu of paying the Fund's
transfer agent, PNC Bank may arrange for the
direct payment of cash dividends and
distributions to shareholders in accordance
with procedures mutually agreed upon from time
to time by and among the Fund, PNC Bank and
the Fund's transfer agent.
(v) payments, upon receipt of Written Instructions, in
connection with the conversion, exchange or surrender
of securities owned or subscribed to by the Fund on
behalf of a Portfolio and held by or delivered to PNC
Bank;
(vi) payments of the amounts of dividends received
with respect to securities sold short;
(vii) payments made to a sub-custodian pursuant to
provisions in sub-section (c) of this Section; and
15
<PAGE> 16
(viii) payments, upon Written Instructions, made for other
proper Fund purposes.
PNC Bank is hereby authorized to endorse and collect all
checks, drafts or other orders for the payment of money received as custodian
for the Accounts.
(c) Receipt of Securities; Subcustodians.
(i) PNC Bank shall hold all securities received
by it for the Accounts in a separate
account that physically segregates
such securities from those of any other
persons, firms or corporations, except for
securities held in a Book-Entry System. All
such securities shall be held or disposed of
only upon Written Instructions of the Fund
pursuant to the terms of this Agreement. PNC
Bank shall have no power or authority to
assign, hypothecate, pledge or otherwise
dispose of any such securities or investment,
except upon the express terms of this Agreement
and upon Written Instructions, accompanied by a
certified resolution of the Fund's Board of
Trustees, authorizing the transaction. In no
case may any member of the Fund's Board of
Trustees, or any officer, employee or agent of
the Fund withdraw any securities.
At PNC Bank's own expense and for its own
convenience, PNC Bank may enter into
sub-custodian agreements with other United
States banks or trust companies to perform
duties described in this subsection (c). Such
bank or trust company shall have an aggregate
capital, surplus
16
<PAGE> 17
and undivided profits, according to its last
published report, of at least one million
dollars ($1,000,000), if it is a subsidiary or
affiliate of PNC Bank, or at least twenty
million dollars ($20,000,000) if such bank or
trust company is not a subsidiary or affiliate
of PNC Bank. In addition, such bank or trust
company must be qualified to act as custodian
and agree to comply with the relevant provisions
of the 1940 Act and other applicable rules and
regulations. Any such arrangement will not be
entered into without prior written notice to the
Fund.
PNC Bank shall remain responsible for the
performance of all of its duties as described in
this Agreement and shall hold the Fund and each
Portfolio harmless from its own acts or
omissions, under the standards of care provided
for herein, or the acts and omissions of any
sub-custodian chosen by PNC Bank under the terms
of this sub-section (c).
(d) Transactions Requiring Instructions. Upon receipt of Oral
or Written Instructions and not otherwise, PNC Bank, directly or through the use
of the Book-Entry System, shall:
(i) deliver any securities held for a Portfolio
against the receipt of payment for the sale of
such securities;
(ii) execute and deliver to such persons as may be
designated in such Oral or Written
17
<PAGE> 18
Instructions, proxies, consents, authorizations, and
any other instruments whereby the authority of a
Portfolio as owner of any securities may be
exercised;
(iii) deliver any securities to the issuer thereof, or its
agent, when such securities are called, redeemed,
retired or otherwise become payable; provided that,
in any such case, the cash or other consideration is
to be delivered to PNC Bank;
(iv) deliver any securities held for a Portfolio
against receipt of other securities or cash
issued or paid in connection with the
liquidation, reorganization, refinancing,
tender offer, merger, consolidation or
recapitalization of any corporation, or the
exercise of any conversion privilege;
(v) deliver any securities held for a Portfolio to
any protective committee, reorganization
committee or other person in connection with
the reorganization, refinancing, merger,
consolidation, recapitalization or sale of
assets of any corporation, and receive and
hold under the terms of this Agreement such
certificates of deposit, interim receipts or
other instruments or documents as may be
issued to it to evidence such delivery;
(vi) make such transfer or exchanges of the assets
of the Portfolios and take such other steps as
shall be stated in said Oral or Written
Instructions to be for the purpose of
effectuating a duly authorized plan of
liquidation, reorganization, merger,
consolidation or recapitalization of the Fund;
18
<PAGE> 19
(vii) release securities belonging to a Portfolio to
any bank or trust company for the purpose of a
pledge or hypothecation to secure any loan
incurred by the Fund on behalf of that
Portfolio; provided, however, that securities
shall be released only upon payment to PNC
Bank of the monies borrowed, except that in
cases where additional collateral is required
to secure a borrowing already made subject to
proper prior authorization, further securities
may be released for that purpose; and repay
such loan upon redelivery to it of the
securities pledged or hypothecated therefor
and upon surrender of the note or notes
evidencing the loan;
(viii) release and deliver securities owned by a
Portfolio in connection with any repurchase
agreement entered into on behalf of the Fund,
but only on receipt of payment therefor; and
pay out moneys of the Fund in connection with
such repurchase agreements, but only upon the
delivery of the securities;
(ix) release and deliver or exchange securities owned by
the Fund in connection with any conversion of such
securities, pursuant to their terms, into other
securities;
(x) release and deliver securities owned by the Fund on
behalf of a Portfolio for the purpose of redeeming in
kind shares of the Fund upon delivery thereof to PNC
Bank; and
(xi) release and deliver or exchange securities owned by
the Fund on behalf of a Portfolio for other corporate
purposes.
PNC Bank must also receive a certified
resolution describing the nature of the
19
<PAGE> 20
corporate purpose and the name and address of the
person(s) to whom delivery shall be made when such
action is pursuant to sub-paragraph d.
(e) Use of Book-Entry System. The Fund shall deliver to PNC
Bank certified resolutions of the Fund's Board of Trustees approving,
authorizing and instructing PNC Bank on a continuous basis, to deposit in the
Book-Entry System all securities belonging to the Portfolios eligible for
deposit therein and to utilize the Book-Entry System to the extent possible in
connection with settlements of purchases and sales of securities by the
Portfolios, and deliveries and returns of securities loaned, subject to
repurchase agreements or used as collateral in connection with borrowings. PNC
Bank shall continue to perform such duties until it receives Written or Oral
Instructions authorizing contrary actions.
PNC Bank shall administer the Book-Entry System as follows:
(i) With respect to securities of each Portfolio which
are maintained in the Book-Entry System, the records
of PNC Bank shall identify by Book-Entry or otherwise
those securities belonging to each Portfolio. PNC
Bank shall furnish to the Fund a detailed statement
of the Property held for each Portfolio under
20
<PAGE> 21
this Agreement at least monthly and from time to time
and upon written request.
(ii) Securities and any cash of each Portfolio
deposited in the Book-Entry System will at all
times be segregated from any assets and cash
controlled by PNC Bank in other than a
fiduciary or custodian capacity but may be
commingled with other assets held in such
capacities. PNC Bank and its sub-custodian,
if any, will pay out money only upon receipt
of securities and will deliver securities only
upon the receipt of money.
(iii) All books and records maintained by PNC Bank
which relate to the Fund's participation in
the Book-Entry System will at all times during
PNC Bank's regular business hours be open to
the inspection of Authorized Persons, and PNC
Bank will furnish to the Fund all information
in respect of the services rendered as it may
require.
(iv) PNC Bank will provide the Fund with copies of any
report obtained by PNC Bank on the system of internal
accounting control of the Book- Entry System promptly
after PNC Bank received such report.
PNC Bank will also provide the Fund with such reports on its
own system of internal control as the Fund may reasonably request from time to
time.
(f) Registration of Securities. All Securities held for a
Portfolio which are issued or issuable only in bearer form, except such
securities held in the Book-Entry
21
<PAGE> 22
System, shall be held by PNC Bank in bearer form; all other securities held for
a Portfolio may be registered in the name of the Fund on behalf of that
Portfolio, PNC Bank, the Book-Entry System, a sub-custodian, or any duly
appointed nominees of the Fund, PNC Bank, Book-Entry System or sub-custodian.
The Fund reserves the right to instruct PNC Bank as to the method of
registration and safekeeping of the securities of the Fund. The Fund agrees to
furnish to PNC Bank appropriate instruments to enable PNC Bank to hold or
deliver in proper form for transfer, or to register in the name of its nominee
or in the name of the Book-Entry System, any securities which it may hold for
the Accounts and which may from time to time be registered in the name of the
Fund on behalf of a Portfolio.
(g) Voting and Other Action. Neither PNC Bank nor its nominee
shall vote any of the securities held pursuant to this Agreement by or for the
account of a Portfolio, except in accordance with Written Instructions. PNC
Bank, directly or through the use of the Book-Entry System, shall execute in
blank and promptly deliver all notices, proxies and proxy
22
<PAGE> 23
soliciting materials to the registered holder of such securities. If the
registered holder is not the Fund on behalf of a Portfolio, then Written or Oral
Instructions must designate the person who owns such securities.
(h) Transactions Not Requiring Instructions. In the absence of
contrary Written Instructions, PNC Bank is authorized to take the following
actions:
(i) Collection of Income and Other Payments.
(A) collect and receive for the account of
each Portfolio, all income, dividends,
distributions, coupons, option premiums,
other payments and similar items, included
or to be included in the Property, and, in
addition, promptly advise each Portfolio of
such receipt and credit such income, as
collected, to each Portfolio's custodian
account;
(B) endorse and deposit for collection, in the
name of the Fund, checks, drafts, or other
orders for the payment of money;
(C) receive and hold for the account of each
Portfolio all securities received as a
distribution on the Portfolio's
securities as a result of a stock
dividend, share split-up or
reorganization, recapitalization,
readjustment or other rearrangement or
distribution of rights or similar
securities issued with respect to any
23
<PAGE> 24
securities belonging to a Portfolio and
held by PNC Bank hereunder;
(D) present for payment and collect the amount
payable upon all securities which may mature
or be called, redeemed, or retired, or
otherwise become payable on the date such
securities become payable; and
(E) take any action which may be necessary and
proper in connection with the collection and
receipt of such income and other payments
and the endorsement for collection of
checks, drafts, and other negotiable
instruments.
(ii) Miscellaneous Transactions.
(A) deliver or cause to be delivered Property
against payment or other consideration or
written receipt therefor in the following
cases:
(1) for examination by a broker or
dealer selling for the account of a
Portfolio in accordance with street
delivery custom;
(2) for the exchange of interim receipts
or temporary securities for
definitive securities; and
(3) for transfer of securities into the
name of the Fund on behalf of a
Portfolio or PNC Bank or nominee of
either, or for exchange of
securities for a different number of
bonds, certificates, or other
evidence, representing the same
24
<PAGE> 25
aggregate face amount or number of
units bearing the same interest
rate, maturity date and call
provisions, if any; provided that,
in any such case, the new securities
are to be delivered to PNC Bank.
(B) Unless and until PNC Bank receives Oral or
Written Instructions to the contrary, PNC
Bank shall:
(1) pay all income items held by it
which call for payment upon
presentation and hold the cash
received by it upon such payment for
the account of each Portfolio;
(2) collect interest and cash dividends
received, with notice to the Fund,
to the account of each Portfolio;
(3) hold for the account of each
Portfolio all stock dividends,
rights and similar securities issued
with respect to any securities held
by PNC Bank; and
(4) execute as agent on behalf of the
Fund all necessary ownership
certificates required by the
Internal Revenue Code or the Income
Tax Regulations of the United States
Treasury Department or under the
laws of any state now or hereafter
in effect, inserting the Fund's
name, on behalf of a Portfolio, on
such certificate as the owner of the
securities covered thereby, to the
extent it may lawfully do so.
25
<PAGE> 26
(i) Segregated Accounts.
(i) PNC Bank shall upon receipt of Written or
Oral Instructions establish and maintain
segregated accounts on its records for and
on behalf of each Portfolio. Such accounts
may be used to transfer cash and securities,
including securities in the Book-Entry
System:
(A) for the purposes of compliance by
the Fund with the procedures
required by a securities or option
exchange, providing such procedures
comply with the 1940 Act and any
releases of the SEC relating to the
maintenance of segregated accounts
by registered investment companies;
and
(B) Upon receipt of Written
Instructions, for other proper
corporate purposes.
(ii) PNC Bank shall arrange for the
establishment of IRA custodian accounts
for such shareholders holding Shares
through IRA accounts, in accordance with
the Portfolios' prospectuses, the
Internal Revenue Code of 1986, as amended
(including regulations promulgated
thereunder), and with such other
procedures as are mutually agreed upon
from time to time by and among the Fund,
PNC Bank and the Fund's transfer agent.
(j) Purchases of Securities. PNC Bank shall settle purchased
securities upon receipt of Oral or Written
26
<PAGE> 27
Instructions from the Fund or its investment advisers that specify:
(i) the name of the issuer and the title of
the securities, including CUSIP number if
applicable;
(ii) the number of shares or the principal amount
purchased and accrued interest, if any;
(iii) the date of purchase and settlement;
(iv) the purchase price per unit;
(v) the total amount payable upon such
purchase;
(vi) the Portfolio involved; and
(vii) the name of the person from whom or the
broker through whom the purchase was
made. PNC Bank shall upon receipt of
securities purchased by or for a
Portfolio pay out of the moneys held for
the account of the Portfolio the total
amount payable to the person from whom or
the broker through whom the purchase was
made, provided that the same conforms to
the total amount payable as set forth in
such Oral or Written Instructions.
(k) Sales of Securities. PNC Bank shall sell securities
upon receipt of Oral Instructions from the Fund that
specify:
27
<PAGE> 28
(i) the name of the issuer and the title of
the security, including CUSIP number if
applicable;
(ii) the number of shares or principal amount
sold, and accrued interest, if any;
(iii) the date of trade and settlement;
(iv) the sale price per unit;
(v) the total amount payable to the Fund upon
such sale;
(vi) the name of the broker through whom or the
person to whom the sale was made; and
(vii) the location to which the security must
be delivered and delivery deadline, if
any; and
(viii) the Portfolio involved.
PNC Bank shall deliver the securities upon receipt of the
total amount payable to the Portfolio upon such sale, provided that the total
amount payable is the same as was set forth in the Oral or Written Instructions.
Subject to the foregoing, PNC Bank may accept payment in such form as shall be
satisfactory to it, and may deliver securities and arrange for payment in
accordance with the customs prevailing among dealers in securities.
28
<PAGE> 29
(l) Reports; Proxy Materials.
(i) PNC Bank shall furnish to the Fund the
following reports:
(A) such periodic and special reports as
the Fund may reasonably request;
(B) a monthly statement summarizing all
transactions and entries for the
account of each Portfolio, listing
each Portfolio securities belonging
to each Portfolio with the adjusted
average cost of each issue and the
market value at the end of such
month and stating the cash account
of each Portfolio including
disbursements;
(C) the reports required to be furnished
to the Fund pursuant to Rule 17f-4;
and
(D) such other information as may be
agreed upon from time to time
between the Fund and PNC Bank.
(ii) PNC Bank shall transmit promptly to the
Fund any proxy statement, proxy material,
notice of a call or conversion or similar
communication received by it as custodian
of the Property. PNC Bank shall be under
no other obligation to inform the Fund
as to such actions or events.
(m) Collections. All collections of monies or other property
in respect, or which are to become part, of the Property (but not the
safekeeping thereof upon receipt by PNC
29
<PAGE> 30
Bank) shall be at the sole risk of the Fund. If payment is not received by PNC
Bank within a reasonable time after proper demands have been made, PNC Bank
shall notify the Fund in writing, including copies of all demand letters, any
written responses, memoranda of all oral responses and shall await instructions
from the Fund. PNC Bank shall not be obliged to take legal action for collection
unless and until reasonably indemnified to its satisfaction. PNC Bank shall also
notify the Fund as soon as reasonably practicable whenever income due on
securities is not collected in due course and shall provide the Fund with
periodic status reports of such income collected after a reasonable time.
15. DURATION AND TERMINATION. This Agreement shall continue
until terminated by the Fund or by PNC Bank on sixty (60) days' prior written
notice to the other party. In the event this Agreement is terminated (pending
appointment of a successor to PNC Bank or vote of the shareholders of the Fund
to dissolve or to function without a custodian of its cash, securities or other
property), PNC Bank shall not deliver cash, securities or other property of the
Portfolios to the
30
<PAGE> 31
Fund. It may deliver them to a bank or trust company of PNC Bank's choice,
having an aggregate capital, surplus and undivided profits, as shown by its last
published report, of not less than twenty million dollars ($20,000,000), as a
custodian for the Fund to be held under terms similar to those of this
Agreement. PNC Bank shall not be required to make any such delivery or payment
until full payment shall have been made to PNC Bank of all of its fees,
compensation, costs and expenses. PNC Bank shall have a security interest in and
shall have a right of setoff against the Property as security for the payment of
such fees, compensation, costs and expenses.
16. NOTICES. All notices and other communications, including
Written Instructions, shall be in writing or by confirming telegram, cable,
telex or facsimile sending device. Notice shall be addressed (a) if to PNC Bank
at Airport Business Center, International Court 2, 200 Stevens Drive, Lester,
Pennsylvania 19113, marked for the attention of the Custodian Services
Department (or its successor) (b) if to the Fund, c/o Haven Capital Management,
655 Third Avenue, New
31
<PAGE> 32
York, NY 10017, Attn: Colin C. Ferenbach or (c) if to neither of the foregoing,
at such other address as shall have been given by like notice to the sender of
any such notice or other communication by the other party. If notice is sent by
confirming telegram, cable, telex or facsimile sending device, it shall be
deemed to have been given immediately. If notice is sent by first-class mail, it
shall be deemed to have been given five days after it has been mailed. If notice
is sent by messenger, it shall be deemed to have been given on the day it is
delivered.
17. AMENDMENTS. This Agreement, or any term hereof, may be
changed or waived only by a written amendment, signed by the party against whom
enforcement of such change or waiver is sought.
18. DELEGATION; ASSIGNMENT. PNC Bank may assign its rights and
delegate its duties hereunder to any wholly-owned direct or indirect subsidiary
of PNC Bank, National Association or PNC Bank Corp., provided that (i) PNC Bank
gives the Fund thirty (30) days' prior written notice; (ii) the delegate (or
assignee) agrees with PNC Bank and the
32
<PAGE> 33
Fund to comply with all relevant provisions of the 1940 Act; and (iii) PNC Bank
and such delegate (or assignee) promptly provide such information as the Fund
may request, and respond to such questions as the Fund may ask, relative to the
delegation (or assignment), including (without limitation) the capabilities of
the delegate (or assignee).
19. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
20. FURTHER ACTIONS. Each party agrees to perform such further
acts and execute such further documents as are necessary to effectuate the
purposes hereof.
21. MISCELLANEOUS.
(a) Entire Agreement. This Agreement embodies the entire
agreement and understanding between the parties and supersedes all prior
agreements and understandings relating to the subject matter hereof, provided
that the parties may embody in one or more separate documents their agreement,
if any, with respect to delegated duties and Oral Instructions.
33
<PAGE> 34
(b) Captions. 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.
(c) Governing Law. This Agreement shall be deemed to be a
contract made in Delaware and governed by Delaware law, without regard to
principles of conflicts of law.
(d) Partial Invalidity. 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.
(e) Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
(f) Facsimile Signatures. The facsimile signature of any party
to this Agreement shall constitute the valid and binding execution hereof by
such party.
(g) Limitations on the Obligations of the Fund. The obligation
of the Funds are not binding upon any of the Trustees, shareholders, officers,
employees or agents of the
34
<PAGE> 35
Fund or its Portfolios individually but are binding only upon the assets and
property of the Fund and Portfolios, provided that no obligations hereunder
shall be binding upon the assets and property of any portfolio of the Fund not
listed on Exhibit A.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first above written.
PNC BANK, NATIONAL ASSOCIATION
By:
--------------------------------
Title:
-----------------------------
THE HAVEN CAPITAL MANAGEMENT TRUST
By:
--------------------------------
Title:
-----------------------------
35
<PAGE> 36
EXHIBIT A
PORTFOLIOS
THIS EXHIBIT A, dated as of June 17, 1994, is Exhibit A to
that certain Custodian Services Agreement dated as of June 17, 1994 between PNC
Bank, National Association and The Haven Capital Management Trust. This Exhibit
A shall supersede all previous form of Exhibit A.
The Haven Fund
PNC BANK, NATIONAL ASSOCIATION
By:
--------------------------------
Title:
-----------------------------
THE HAVEN CAPITAL MANAGEMENT TRUST
By:
--------------------------------
Title:
-----------------------------
36
<PAGE> 37
AUTHORIZED PERSONS APPENDIX
NAME (TYPE) SIGNATURE
Stephen Ely
- ---------------------------------- -------------------------------
Colin C. Ferenbach
- ---------------------------------- -------------------------------
Thomas F. Smyth
- ---------------------------------- -------------------------------
Clifford E. Stober
- ---------------------------------- -------------------------------
Denis M. Turko
- ---------------------------------- -------------------------------
37
<PAGE> 1
EXHIBIT 99.B8-2
Fee Letter regarding
Custodian Services
Fees
June 17, 1994
THE HAVEN CAPITAL MANAGEMENT TRUST
Re: Custodian Services Fees
Dear Sir/Madam:
This letter constitutes our agreement with respect to compensation to
be paid to PNC Bank, National Association ("PNC Bank") under the terms of a
Custodian Agreement dated June 17, 1994 between you (the "Fund") and PNC
Bank. Pursuant to Paragraph 11 of that agreement, and in consideration of
the services to be provided to you, you will pay PNC Bank the following:
1. An annual custody fee of .0175% of the first $100 million of average
gross assets; .015% of the next $400 million of average gross assets;
.0125% of the next $500 million of average gross assets; and $.01% of the
average gross assets in excess of $1 billion; exclusive of out-of-pocket
expenses and transaction charges. Custody fees shall be calculated daily
and payable monthly.
2. The minimum monthly fee shall be $1,500 exclusive of transaction
charges and out-of-pocket expenses.
3. A transaction charge of $25.00 for each purchase or sale of a
physical security or delivery of a physical security upon its maturity date
or delivery of a physical security for reissuance; $10.00 for each
purchase, sale or maturity of a federal book-entry security or DTC eligible
security or other book-entry transaction; $15.00 for each purchase, sale or
maturity or other book-entry transaction for a GNMA security; $30.00 for
each purchase, sale, exercise or expiration of an option contract position
(round trip); $50.00 for each sale, purchase, exercise or expiration of a
futures contract position (round trip); $15.00 for each repurchase trade
collateral tranche received from an institution other than PNC Bank (round
trip).
4. With respect to the per portfolio daily net overdrawn cash balances,
a monthly charge shall be assessed based on the average federal funds rate
for that month.
5. PNC Bank's out-of-pocket expenses including, but not limited to,
postage, telephone, telex, interest claim fees, federal express charges,
global sub-custody fees, Federal Reserve wire fees, confirmation fees and
pricing services.
<PAGE> 2
If PNC Bank is removed from the custodian services agreement referenced
above, the Fund shall pay any costs of time and material associated with
deconversion.
The fee for the period from the day of the year this Agreement is
entered into until the end of that year shall be prorated according to the
proportion which such period bears to the full annual period.
If the foregoing accurately sets forth our agreement and you intend to
be legally bound thereby, please execute a copy of this letter and return
it to us.
Very truly yours,
PNC BANK, NATIONAL ASSOCIATION
By:
---------------------------
Title:
Accepted:
THE HAVEN CAPITAL MANAGEMENT TRUST
By:
-------------------------------
Title:
2
<PAGE> 1
EXHIBIT 99.B8-3
Sub-Custodian
Agreement
SUB-CUSTODIAN AGREEMENT
AGREEMENT dated as of December 31, 1994 among THE CHASE
MANHATTAN BANK, N.A. ("Bank"), THE HAVEN CAPITAL MANAGEMENT TRUST (the
"Fund") and PNC BANK, NATIONAL ASSOCIATION ("Company").
W I T N E S S E T H:
WHEREAS, Company has entered into a Custodian Agreement with
the Fund, a Delaware business trust registered under the Investment Company
Act of 1940, as amended (the "Investment Company Act"), to provide certain
custody services; and
WHEREAS, the Company and the Fund wish to retain Bank to
provide certain sub-custodian services to the Company and the Fund for the
benefit of the Fund, and Bank is willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is agreed between the parties hereto as
follows:
1. CUSTODY ACCOUNT. (a) The Bank agrees to establish and
maintain (a) a separate custody account for each
<PAGE> 2
investment portfolio of the Fund ("Custody Account") for any and all stocks,
shares, bonds, debentures, notes, mortgages or other obligations for the payment
of money 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
(hereinafter called "Securities") from time to time received by the Bank or any
sub-custodian (as defined in the second paragraph of Section 3 hereof) for the
account of the particular investment portfolio of the Fund; and (b) a separate
deposit account or accounts in the name of each investment portfolio of the Fund
("Deposit Account") for any and all cash and cash equivalents in any currency
received by the Bank or any sub-custodian for the account of the particular
investment portfolio of the Fund, which cash shall not be subject to withdrawal
by draft or check. The term "Property" as used herein shall mean all Securities,
cash equivalents and other assets of the Fund.
(b) The Bank shall be responsible for providing information to the
Fund to enable the Fund to determine that
2
<PAGE> 3
the Bank and each sub-custodian is an eligible foreign custodian, qualified
U.S. bank or overseas branch of a qualified U.S. bank in accordance with
the definitions thereof set forth herein.
2. MAINTENANCE OF PROPERTY ABROAD. Securities in a Custody Account
shall be held in the country or other jurisdiction as shall be specified
from time to time in Instructions (as defined in Section 9 hereof),
provided that such country or other jurisdiction shall be one in which the
principal trading market for such Securities is located or the country or
other jurisdiction in which such Securities are to be presented for payment
or are acquired for the Custody Account, and cash in a Deposit Account
shall be credited to an account in such 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 the Bank can comply with such Instructions, the Bank is
authorized to maintain
3
<PAGE> 4
cash balances on deposit for the Fund with itself or one of its 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 the Fund may direct,
if acceptable to the Bank.
3. ELIGIBLE FOREIGN CUSTODIANS AND SECURITIES DEPOSITORIES. The Trustees
of the Fund authorize the Bank to hold the Securities in the Custody
Account(s) and the cash in the Deposit Account(s) in custody and deposit
accounts, respectively, which have been established by the Bank with one of
its branches, a branch of a qualified U.S. bank, an eligible foreign
custodian or an eligible foreign securities depository; provided, however,
that the Trustees of the Fund have approved the use of, and the Bank's
contract with, such eligible foreign custodian or eligible foreign
securities depository by resolution, and Instructions to such effect have
been provided to the Bank. Furthermore, if a Bank's branch, a branch of a
qualified U.S. bank or an eligible foreign custodian is selected to act as
the Bank's sub-custodian to hold any Property, such entity is authorized to
hold such
4
<PAGE> 5
Property in its account with any eligible foreign securities depository in which
it participates so long as such foreign securities depository has been approved
by the Trustees of the Fund. For purposes of this Agreement (a) "qualified U.S.
bank" shall mean a qualified U.S. bank as defined in Rule 17f-5 under the
Investment Company Act, ("Rule 17f-5"); (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
thereto) or (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
thereto) as of dates specified in Rule 17f-5; and (c) "eligible foreign
securities depository" shall mean a securities depository or clearing agency,
incorporated
5
<PAGE> 6
or organized under the laws of a country other than the United States, which
operates (i) the central system, or in specific markets a system that is the
subject of a then currently viable and favorable "no-action letter" that has
been issued to Chase Manhattan Bank, N.A. by the staff of the Securities and
Exchange Commission, for handling of securities or equivalent book-entries in
that country or (ii) a transnational system for the central handling of
securities or equivalent book-entries.
Hereinafter the term "sub-custodian" will refer to any Bank branch, any
branch of a qualified U.S. bank, any eligible foreign custodian or any
eligible foreign securities depository with which the Bank has entered into
an agreement of the type contemplated hereunder regarding Securities and/or
cash held in or to be acquired for a Custody Account or a Deposit Account.
If, after the initial approval of the sub-custodians by the Trustees of
the Fund in connection with this Agreement, the Bank wishes to appoint other
sub-custodians to hold the Fund's Property, it will so notify the Company
and the Fund and
6
<PAGE> 7
will provide them with information reasonably necessary to determine any
such new sub-custodian's eligibility under Rule 17f-5, including a copy of
the proposed agreement with such sub-custodian. The Fund shall within 30
days after receipt of such notice give a written approval or disapproval of
the proposed action.
If the Bank intends to remove any sub-custodian previously approved, it
shall so notify the Fund and the Company and shall move the Property
deposited with such sub-custodian to another sub-custodian previously
approved or to a new sub-custodian, provided that the appointment of any new
sub-custodian will be subject to the requirements set forth in the preceding
paragraph. The Bank shall take steps as may be required to remove any
sub-custodian which has ceased to meet the requirements of Rule 17f-5.
4. USE OF SUB-CUSTODIANS. With respect to Property which is maintained
by the Bank in the physical custody of a sub-custodian pursuant to Section 3:
7
<PAGE> 8
(a) The Bank will identify on its books as belonging to the particular
investment portfolio of the Fund any Property held by such sub-custodian.
(b) In the event that a sub-custodian permits any of the Securities
placed in its care to be held in an eligible foreign securities depository,
such sub-custodian will be required by its agreement with the Bank to
identify on its books such Securities as being held for the account of the
Bank as a custodian for its customers.
(c) Any Securities in a custody account held by a sub-custodian of the
Bank will be subject only to the instructions of the Bank or its agents;
and any Securities held in an eligible foreign securities depository for
the account of a sub-custodian will be subject only to the instructions of
such sub-custodian.
(d) The Bank will only deposit Securities in an account with a
sub-custodian which includes exclusively the assets held by the Bank for its
customers, and the Bank will cause such account to be designated by such
sub-custodian as
8
<PAGE> 9
a special custody account for the exclusive benefit of customers of the
Bank.
(e) Any agreement the Bank shall enter into with a sub-custodian with
respect to the holding of Securities shall be consistent with Rule 17f-5 and
shall require that (i) the Securities are not subject to any right, charge,
security interest, lien or claim of any kind in favor of such sub-custodian or
its creditors except for a claim of payment for its safe custody or
administration and (ii) beneficial ownership of such Securities is freely
transferable without the payment of money or value other than for safe
custody or administration; provided, however, that the foregoing shall not
apply to the extent that any of the above-mentioned rights, charges, etc. result
from any compensation or other expenses arising with respect to the
safekeeping of Securities pursuant to such agreement.
(f) The Bank shall allow independent public accountants of the Fund such
reasonable access to the records of the Bank relating to Property held in a
Custody Account and a Deposit Account as required by such accountants in
9
<PAGE> 10
connection with their examination of the books and records pertaining to
the affairs of the Fund. The Bank shall, subject to restrictions under
applicable law, also obtain from any sub-custodian with which the Bank
maintains the physical possession of any Property an undertaking to permit
independent public accountants of the Fund such reasonable access to the
records of such sub-custodian as may be required in connection with their
examination of the books and records pertaining to the affairs of the Fund
or to supply a verifiable confirmation of the contents of such records. The
Bank shall furnish the Fund and the Company such reports (or portions
thereof) of the Bank's external auditors as relate directly to the Bank's
system of internal accounting controls applicable to the Bank's duties
under this Agreement.
(g) The Bank will supply to the Fund, care of its investment
adviser, and the Company at least monthly a statement in respect to any
Property in a Custody and a Deposit Account held by each sub-custodian,
including an identification of the entity having possession of such
Property, and the Bank will send to the Fund and the Company
10
<PAGE> 11
an advice or notification of any transfers of Property to or from the
Custody Account and Deposit Account, indicating, as to Property acquired
for an investment portfolio of the Fund, the identity of the entity having
physical possession of such Property. In the absence of the filing in
writing with the Bank by the Company of exceptions or objections to any
such statement within sixty (60) days of the Company's receipt of such
statement, or within sixty (60) days after the date that a material defect
is reasonably discoverable, the Company shall be deemed to have approved
such statement and in such case or upon written approval of the Company of
any such statement the Bank shall, to the extent permitted by law and
provided the Bank has met the standard of care in Section 12 hereof, be
released, relieved and discharged with respect to all matters and things
set forth in such statement as though such statement has been settled by
the decree of a court of competent jurisdiction in an action in which the
Fund and all persons having any equity interest in the Fund were parties.
(h) The Bank shall provide to the Company and to the Trustees of the Fund
on an annual basis a report
11
<PAGE> 12
confirming the Bank's belief that it and each of the sub-custodians is an
eligible foreign custodian, a qualified U.S. Bank or branch of a qualified
U.S. Bank, as defined herein. The Bank shall also provide such relevant
information regarding the Securities and other assets, any sub-custodian,
any foreign country or itself as may be reasonably requested from time to
time by the Company or the Fund.
(i) The Bank hereby warrants to the Fund and the Company 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
Securities or cash of the Fund pursuant to this Agreement afford protection
for such Securities or cash at least equal to that afforded by the Bank's
established procedures with respect to similar Securities or cash held by
the Bank (and its securities depositories) in New York.
(j) The Bank hereby warrants to the Fund and the Company that as of the
date of this Agreement it is maintaining a Bankers Blanket Bond and hereby
agrees to notify
12
<PAGE> 13
the Fund and the Company in the event its Bankers Blanket Bond is cancelled or
otherwise lapses.
5. DEPOSIT ACCOUNT PAYMENTS. Subjectto the provisions of Section 7,
the Bank shall make, or cause its sub-custodian to make, payments of cash
credited to a Deposit Account only:
(a) In connection with the purchase of Securities for the particular
investment portfolio of the Fund involved and the delivery of such
Securities to, or the crediting of such Securities to the particular
Custody Account of, the Bank or its sub-custodian, each such payment to be
made at prices as confirmed by Instructions from Authorized persons (as
defined in Section 10 hereof);
(b) For the purchase or redemption of shares of the capital stock of the
particular investment portfolio of the Fund involved and the delivery to,
or crediting to the account of, the Bank or its sub-custodian of such
shares to be so purchased or redeemed;
(c) For the payment for the account of the particular investment portfolio
of the Fund involved of
13
<PAGE> 14
dividends, interest, taxes, management or supervisory fees, capital
distributions or operating expenses;
(d) For the payments to be made in connection with the conversion,
exchange or surrender of Securities held in a Custody Account;
(e) For other proper corporate purposes of the particular investment
portfolio of the Fund involved; or
(f) Upon the termination of this Custody Agreement as hereinafter set
forth.
All payments of cash for a purpose permitted by subsection (a), (b), (c) or
(d) of this Section 5 will be made only upon receipt by the Bank of
Instructions from Authorized Persons which shall specify the purpose for
which the payment is to be made and the applicable subsection of this
Section 5. In the case of any payment to be made for the purpose permitted
by subsection (e) of this Section 5, the Bank must first receive a
certified copy of a resolution of the Trustees of the Fund adequately
describing such payment, declaring such purpose to be a proper corporate
purpose, and naming the person or persons to whom such payment shall be
made. Any payment
14
<PAGE> 15
pursuant to subsection (f) of this Section 5 will be made in accordance
with Section 17 hereof. In the event that any payment for an investment
portfolio of the Fund made under this Section 5 exceeds the funds available
in that investment portfolio's Deposit Account, the Bank may, in its
discretion, advance the Fund on behalf of that investment portfolio an
amount equal to such excess and such advance shall be deemed a loan from
the Bank to that investment portfolio payable on demand, bearing interest
at the rate of interest customarily charged by the Bank on similar loans.
If the Bank causes a Deposit Account to be credited on the payable date for
interest, dividends or redemptions, the particular investment portfolio of
the Fund involved will promptly return to the Bank any such amount or
property so credited upon oral or written notification that neither the
Bank nor its sub-custodian can collect such amount or property in the
ordinary course of business. The Bank or its sub-custodian, as the case may
be, shall have not duty or obligation to institute legal proceedings, file
a claim or proof of claim in any insolvency proceeding or take any other
action with respect to
15
<PAGE> 16
the collection or such amount or property beyond its ordinary collection
procedures.
6. CUSTODY ACCOUNT TRANSACTIONS. Subject to the provisions of Section 7,
Securities in a Custody Account will be transferred, exchanged or delivered
by the Bank or its sub-custodians only:
(a) upon sale of such Securities for the particular investment portfolio
of the Fund involved and receipt by the Bank or its sub-custodian of
payment thereof, each such payment to be in the amount confirmed by
Instructions from Authorized Persons;
(b) when such 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 of merger, consolidation,
reorganization, recapitalization or readjustment;
(d) upon conversion of such Securities pursuant to their terms into
other Securities;
16
<PAGE> 17
(e) upon exercise of subscription, purchase or other similar rights
represented by such Securities;
(f) for the purpose of exchanging interim receipts or temporary
Securities for definitive Securities;
(g) for the purpose of redeeming in kind shares of the capital stock of
the particular investment portfolio of the Fund involved against delivery
to the Bank or its sub-custodian of such shares to be redeemed;
(h) for other proper corporate purposes of the particular investment
portfolio of the Fund involved; or
(i) upon the termination of this Custody Agreement as hereinafter setforth.
All transfers, exchanges or deliveries of Securities in a Custody Account
for a purpose permitted by either subsection (a), (b), (c), (d), (e) or (f)
of this Section 6 will be made, except as provided in Section 8 hereof,
only upon receipt by the Bank of Instructions from Authorized Persons which
shall specify the purpose of the transfer, exchange or delivery to be made
and the applicable subsection of this Section 6. In the case of any
transfer or delivery to be made for the
17
<PAGE> 18
purpose permitted by subsection (g) of this Section 6, the Bank must first
receive Instructions from Authorized Persons specifying the shares held by
the Bank or its sub-custodian to be so transferred or delivered and naming
the person or persons to whom transfers or delivery of such shares shall be
made. In the case of any transfer, exchange or delivery to be made for the
purpose permitted by subsection (h) of this Section 6, the Bank must first
receive a certified copy of a resolution of the Trustees of the Fund
adequately describing such transfer, exchange or delivery, declaring such
purpose to be a proper corporate purpose, and naming the person or persons
to whom delivery of such Securities shall be made. Any transfer or delivery
pursuant to subsection (i) of this Section 6 will be made in accordance
with Section 17 hereof.
7. CUSTODY ACCOUNT PROCEDURES. With respect to any transaction
involving Securities held in or to be acquired for a Custody Account, the
Bank in its discretion may cause the Deposit Account for the particular
investment portfolio of the Fund involved to be credited on the contractual
settlement date with the proceeds of any sale or exchange of Securities
18
<PAGE> 19
from the particular Custody Account and to be debited on the contractual
settlement date for the cost of Securities purchased or acquired for the
particular Custody Account. The Bank may reverse any such credit or debit
if the transaction with respect to which such credit or debit was made
fails to settle within a reasonable period, determined by the Bank in its
discretion, after the contractual settlement date, except that if any
Securities delivered pursuant to this Section 7 are returned by the
recipient thereof, the Bank may cause any such credits and debits to be
reversed at any time. With respect to any transactions as to which the Bank
does not determine so to credit or debit the particular Deposit Account,
the proceeds from the sale or exchange of Securities will be credited and
the cost of such Securities purchased or acquired will be debited to the
particular Deposit Account on the date such proceeds or Securities are
received by the Bank.
Notwithstanding the preceding paragraph, settlement and payment for Securities
received for, and delivery of Securities out of, a Custody Account may be
effected in accordance with the customary or established securities
19
<PAGE> 20
trading or securities processing practices and procedures in the
jurisdiction or market in which the transaction occurs, including, without
limitation, delivering Securities to the purchaser thereof or to a dealer
therefor (or an agent for such purchaser or dealer) against a receipt with
the expectation of receiving later payment for such Securities from such
purchaser or dealer.
8. ACTIONS OF THE BANK. Until the Bank receives Instructions from
Authorized Persons to the contrary, the Bank will, or will instruct its
sub-custodian, to:
(a) present for payment any Securities in a Custody Account 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 the Bank or sub-custodian is aware of such opportunities for payment,
and hold cash received upon presentation of such Securities in accordance
with the provisions of Sections 2, 3 and 4 hereof;
(b) in respect of Securities in a Custody Account, execute in the
name of the Fund on behalf of the particular investment portfolio involved
such ownership and other
20
<PAGE> 21
certificates as may be required to obtain payments in respect thereof;
(c) exchange interim receipts or temporary Securities in a Custody Account
for definitive Securities;
(d) (if applicable) convert monies received with respect to Securities
of foreign issue into United States dollars or any other currency necessary
to effect any transaction involving the Securities whenever it is
practicable to do so through customary banking channels, using any method
or agency available, including, but not limited to, the facilities of the
Bank, its subsidiaries, affiliates or sub-custodians;
(e) (if applicable) appoint brokers and agents for any transaction
involving the Securities in a Custody Account, including, without
limitation, affiliates of the Bank or any sub-custodian; and
(f) reclaim taxes withheld by foreign issuers where reclaim is possible,
provided that Bank has been provided with all documentation it may require.
21
<PAGE> 22
9. INSTRUCTIONS. As used in this Agreement, the term "Instructions" means
instructions of the Fund or the Company received by the Bank via telephone,
telex, TWX, facsimile transmission, bank wire or other teleprocess or
electronic instruction system acceptable to the Bank which the 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 the Bank may specify.
Any Instructions delivered to the Bank by telephone shall promptly
thereafter be confirmed in writing by an Authorized Person (which
confirmation may bear the facsimile signature of such Authorized Person),
but the particular investment portfolio of the Fund involved and the
Company will hold the Bank harmless for the Company's or the Fund's (i)
failure to send such confirmation in writing, or (ii) the failure of such
confirmation to conform to the telephone Instructions received, to the
extent such investment portfolio of the Fund or the Company is responsible
for such failure. Unless otherwise expressly provided, all Instructions
shall
22
<PAGE> 23
continue in full force and effect until canceled or superseded. If the Bank
required test arrangements, authentication methods or other security
devices to be used with respect to Instructions, any Instructions given by
the Fund or the Company thereafter shall be given and processed in
accordance with such terms and conditions for the use of such arrangements,
methods or devices as the Bank may put into effect and modify from time to
time. The Fund and the Company shall safeguard any testkeys, identification
codes or other security devices which the Bank shall make available to
them. The Bank may electronically record any Instructions given by
telephone, and any other telephone discussions, with respect to a Custody
Account.
10. AUTHORIZED PERSONS. As used in this Agreement, the term
"Authorized Persons" means such officers for such agents of the Fund or the
Company as have been designated by a resolution of the Board of Trustees of
the Fund, a certified copy of which has been provided to the Bank, to act
on behalf of the Fund in the performance of any acts which Authorized
Persons may do under this Agreement. Such persons shall
23
<PAGE> 24
continue to be Authorized Persons until such time as the Bank receives
instructions from Authorized Persons that any such officer or agent is no
longer an Authorized Person.
11. NOMINEES. Securities in a Custody Account which are ordinarily
held in registered form may be registered in the name of the Bank's nominee
or, as to any Securities in the possession of an entity other than the
Bank, in the name of such entity's nominee. The particular investment
portfolio of the Fund involved agrees to hold any such nominee harmless
from any liability as a holder of record of such Securities, but not if
such liability is a result of such nominee's negligence. The Bank may
without notice to the Company or the Fund cause any such Securities to
cease to be registered in the name of any such nominee and to be registered
in the name of the Fund. In the event that any Securities registered in the
name of the Bank's nominee or held by one of its sub-custodians and
registered in the name of such sub-custodian's nominee are called for
partial redemption by the issuer of such Security, the Bank may allot, or
cause to be allotted, the called portion to the respective beneficial
holders of
24
<PAGE> 25
such class of security in any manner the Bank deems to be fair and
equitable.
12. STANDARD OF CARE.
(a) The Bank shall be obligated to perform only such duties as are set
forth in this Agreement or expressly contained in Instructions given to Bank
which are consistent with the provisions of this Agreement.
(i) The Bank will use reasonable care with respect to its
obligations under this Agreement and the safekeeping of Property.
The Bank shall be liable to the Fund and the Company for any loss
which shall occur as the result of the failure of a sub-custodian
or an eligible foreign securities depository to exercise
reasonable care with respect to the safekeeping of such Property
to the same extent that the Bank would be liable to the Fund and
the Company if the Bank were holding such Property in New York.
In the event of any loss to the Fund or the Company by reason of
the failure of the Bank or its sub-custodian or an eligible
foreign securities depository to exercise reasonable care, the
Bank shall be liable to the Fund or the Company only to the
extent of the Fund's or Company's direct damages and expenses to
be determined based on, but not limited to, the market value of
the Property which is the subject of the loss at the date of
discovery of such loss and without
25
<PAGE> 26
reference to any special conditions or circumstances.
(ii) The Bank will not be responsible for any act, omission,
default or for the solvency of any broker or agent (other than as
provided herein) which it or a sub-custodian appoints and uses
unless such appointment and use were made or done negligently or
in bad faith.
(iii) The Bank shall be indemnified by, and without liability to,
the particular investment portfolio of the Fund involved and the
Company for any action taken or omitted by the Bank whether
pursuant to Instructions or otherwise within the scope of this
Agreement if such act or omission was in good faith and without
negligence. In performing its obligations under this Agreement,
the Bank may rely on the genuineness of any document which it
believes in good faith and without negligence to have been
validly executed. The Fund and the Company shall indemnify the
Bank only to the extent of the Bank's direct damages and
expenses, without reference to any special conditions or
circumstances.
(iv) The Fund, on behalf of the particular investment portfolio of
the Fund involved, agrees to cause such investment portfolio to
pay for and hold the 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
26
<PAGE> 27
Property in such investment portfolio's Custody Account and
Deposit Account.
(v) The Bank shall be entitled to rely, and may act upon the
advice of counsel (who may be counsel for the Fund or the
Company) on all matters and shall be without liability for any
action reasonably taken or omitted in good faith and without
negligence pursuant to such advice.
(vi) The Bank need not maintain any insurance for the exclusive
benefit of the Fund or Company.
(vii) Without limiting the foregoing, the Bank shall not be liable for
any loss which results from:
1) the general risk of investing, or
2) subject to Section 12(a)(i) hereof, investing or holding
Property in a particular country including, but not limited
to, losses resulting from 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 Property.
(viii) No party shall be liable to the other for any loss due to
forces beyond its control including but not limited to strikes or
work stoppages, acts of war or terrorism, insurrection,
revolution, nuclear fusion, fission or radiation, or acts of God.
27
<PAGE> 28
(b) Consistent with and without limiting the first paragraph of this
Section 12, it is specifically acknowledged that the Bank shall have no duty
or responsibility to:
(i) Question Instructions or make any suggestions to the Fund,
Company or an Authorized Person regarding such Instructions;
(ii) Supervise or make recommendations with respect to
investments or the retention of Securities;
(iii) Subject to Section 3 and Section 12(a)(ii) hereof, evaluate
or report to the Fund, Company 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 to
this Agreement; or
(iv) Review or reconcile trade confirmations received from
brokers.
(c) The Bank shall provide to the Fund, on an annual basis, a report
confirming that the arrangements hereunder remain in compliance with the rules
of the Securities and Exchange Commission governing such arrangements.
13. COMPLIANCE WITH SECURITIES AND EXCHANGE COMMISSION RULES AND ORDERS.
Except to the extent the Bank
28
<PAGE> 29
has specifically agreed pursuant to this Agreement or in an exemptive order to
comply with a condition of Rule 17f-5 or any interpretation or exemptive order
promulgated thereunder by or under the authority of the Securities and Exchange
Commission, the Fund shall be solely responsible to assure that the maintenance
of Securities and cash under this Agreement complies with such Rule 17f-5.
14. CORPORATE ACTION. Whenever the Bank or its sub-custodian receives
information concerning the Securities which requires discretionary action by the
beneficial owner of the Securities (other than a proxy), such 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"), the Bank will give the Company notice of such Corporate
Actions to the extent that the 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
29
<PAGE> 30
similar Corporate Action is received which bears an expiration date, the Bank or
its sub-custodians will endeavor to obtain Instructions from the Fund, Company
to its Authorized Person, but if Instructions are not received in time for the
Bank to take timely action, or actual notice of such Corporate Action was
received too late to seek Instructions, the Bank is authorized to sell such
rights entitlement or fractional interest and to credit the applicable Deposit
Account with the proceeds and to take any other action it deems, in good faith,
to be appropriate in which case, provided it has met the standard of care in
Section 12 hereof, it shall be held harmless by the particular investment
portfolio of the Fund involved for any such action.
The Bank will deliver proxies to the Company or its designated agent
pursuant to special arrangements which may have been agreed to in writing
between the parties hereto. Such proxies shall be executed in the appropriate
nominee name relating to Securities in a Custody Account registered in the name
of such nominee but without indicating the manner in which such proxies are to
be voted; and where bearer
30
<PAGE> 31
Securities are involved, proxies will be delivered in accordance with
instructions from Authorized Persons.
15. FEES AND EXPENSES. The Company agrees to pay to the Bank from time to
time such compensation for its services pursuant to this Agreement as may be
mutually agreed upon in writing from time to time and the Bank's out-of-pocket
or incidental expenses, including (but without limitation) reasonable legal
fees. The Fund shall reimburse the Company for the entirety of such amount. The
Fund hereby agrees on behalf of its respective investment portfolios to cause
the particular investment portfolio of the Fund involved to hold the Bank
harmless from any liability or loss resulting from any taxes or other
governmental charges, and any expenses related thereto, which may be imposed, or
assessed with respect to such investment portfolio's Custody Account and also
agrees on behalf of its respective investment portfolios to cause the particular
investment portfolio of the Fund involved to hold the Bank, its sub-custodians,
and their respective nominees harmless from any liability as a record holder of
Securities in such investment portfolio's Custody
31
<PAGE> 32
Account. The Bank is authorized to charge any account of the particular
investment portfolio of the Fund involved for such items and the Bank shall have
a lien on Securities in such investment portfolio's Custody Account and on cash
in such investment portfolio's Deposit Account for any amount owing to the Bank
in connection with such investment portfolio from time to time under this
Agreement.
16. EFFECTIVENESS. This Agreement shall be effective on the date first
noted above.
17. TERMINATION. This Agreement may be terminated by the Fund, the
Company or the Bank by 60 days' written notice to the other parties, sent by
registered mail, provided that any termination by the Company shall be
authorized by a resolution of the Trustees of the Fund, a certified copy of
which shall accompany such notice of termination, and provided further, that
such resolution shall specify the names of persons to whom the Bank shall
deliver the Securities in each Custody Account and to whom the cash in each
Deposit Account shall be paid. If notice of termination is given by the Bank,
the Fund or the Company shall, within 60 days following the
32
<PAGE> 33
giving of such notices, deliver to the Bank a certified copy of a resolution of
the Trustees of the Fund specifying the names of the persons to whom the Bank
shall deliver such Securities and cash, after deducting therefrom any amounts
which the Bank reasonably determines to be owed to it under Section 15 hereof.
If within 60 days following that giving of a notice of termination by the Bank,
the Bank does not receive from the Fund or the Company a certified copy of a
resolution of the Trustees of the Fund specifying the names of the persons to
whom the cash in each Deposit Account shall be paid and to whom the Securities
in each Custody Account shall be delivered, the Bank, at its election, may
deliver such Securities and pay such cash to a bank or trust company doing
business in the State of New York and qualified as a custodian under the
Investment Company Act of 1940 (and having aggregate capital, surplus and
undivided profits of at least U.S. $20,000,000) to be held and disposed of
pursuant to the provisions of this Agreement, or may continue to hold such
Securities and cash until certified copy of one or more resolutions as aforesaid
is delivered to the Bank. The
33
<PAGE> 34
obligations of the parties hereto regarding the use of reasonable care,
indemnities and payment of fees and expenses shall survive the termination of
this Agreement, and the obligations of each investment portfolio of the Fund to
indemnify and/or hold harmless other persons or entities under this Agreement
shall be the several (and not the joint or joint and several) obligation of each
investment portfolio of the Fund.
18. NOTICES. Any notice or other communication from the Fund or the
Company to the Bank is to be sent to the office of the Bank at 4 Chase MetroTech
Center, 18th Floor, Brooklyn, NY 11245, or such other address as may hereafter
be given to the Fund or the Company in accordance with the notice provisions
hereunder, and any notice from the Bank to the Fund or the Company is to be
mailed postage prepaid, addressed to the Fund and to the Company at the
addresses appearing below, or as the same may hereafter be changed on the Bank's
records in accordance with notice hereunder from the Fund or the Company.
34
<PAGE> 35
19. GOVERNING LAW AND SUCCESSORS AND ASSIGNS. This Agreement shall be
governed by the law of the State of New York and shall not be assignable by
any party, but shall bind the successors and assigns of the Fund, the Company
and the Bank.
20. HEADINGS. The headings of the paragraphs hereof are included for
convenience of reference only and do not form a part of this Agreement.
21. COUNTERPART EXECUTION. This Agreement may be executed in any
number of counterparts with the same effect as if all parties hereto had signed
the same document. All counterparts shall be construed together and shall
constitute one agreement.
22. CONFIDENTIALITY. Bank agrees on behalf of itself and its employees
to treat confidentially all records and other information relative to the Fund
and its prior, present, or potential shareholders, and relative to the Company
and its prior, present, or potential customers, except, after prior notification
to and approval in writing by the Fund or the Company, which approval shall not
be
35
<PAGE> 36
unreasonably withheld and may not be withheld where Bank 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 or the Company.
23. RECORDS. The books and records pertaining to the Fund, which are in
the possession or under the control of the Bank, shall be the property of the
Fund. Such books and records shall be prepared maintained as required by the
Investment Company Act of 1940 and other applicable securities laws, rules and
regulations. The Fund and Authorized Persons shall have access to such books and
records at all time during the Bank's normal business hours. Upon the reasonable
request of the Fund, copies of any such books and records shall be provided by
the Bank to the Fund or to an authorized representative of the Fund, at the
Fund's own expense.
24. LIMITATIONS ON THE OBLIGATIONS OF THE FUND. The obligations of the
Fund are not binding upon any of the Trustees, shareholders, officers, employees
or agents of the Fund individually but are binding only upon the assets and
36
<PAGE> 37
property of the Fund or one or more of its investment portfolios.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below on the day and year first above
written.
PNC BANK, NATIONAL ASSOCIATION
By:
---------------------------
Address for record:
Airport Business Center
200 Stevens Drive
Lester, PA 19113
THE CHASE MANHATTAN BANK, N.A.
By:
---------------------------
Address for record:
THE HAVEN CAPITAL MANAGEMENT TRUST
By:
---------------------------
Address for record:
c/o Haven Capital Management, Inc.
655 Third Avenue
New York, NY 10017
37
<PAGE> 1
EXHIBIT 99.B9-1
Transfer Agency
Services Agreement
TRANSFER AGENCY SERVICES AGREEMENT
THIS AGREEMENT is made as of June 17, 1994 by and between PFPC
INC., a Delaware corporation ("PFPC"), and The Haven Capital Management Trust, a
Delaware business trust (the "Fund").
W I T N E S S E T H:
WHEREAS, the Fund is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Fund wishes to retain PFPC to serve as transfer
agent, registrar, dividend disbursing agent and shareholder servicing agent to
its investment portfolios listed on Exhibit A attached hereto and made a part
hereof as such Exhibit A may be amended from time to time (each a "Portfolio")
and PFPC wishes to furnish such services.
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, and intending to be legally bound hereby, the
parties hereto agree as follows:
<PAGE> 2
1. DEFINITIONS. AS USED IN THIS AGREEMENT:
(a) "1933 Act" means the Securities Act of 1933, as amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as
amended.
(c) "Authorized Person" means any officer of the Fund and any
other person duly authorized by the Fund's Board of Trustees to give Oral and
Written Instructions on behalf of the Fund and listed on the Authorized Persons
Appendix attached hereto and made a part hereof or any amendment thereto as may
be received by PFPC. An Authorized Person's scope of authority may be limited by
the Fund by setting forth such limitation in the Authorized Persons Appendix.
(d) "CEA" means the Commodities Exchange Act, as amended.
(e) "Oral Instructions" mean oral instructions received by
PFPC from an Authorized Person or from a person reasonably believed by PFPC to
be an Authorized Person.
(f) "SEC" means the Securities and Exchange Commission.
2
<PAGE> 3
(g) "Securities Laws" mean the 1933 Act, the 1934 Act, the
1940 Act and the CEA.
(h) "Shares" mean the shares of beneficial interest of any
series or class of the Fund.
(i) "Written Instructions" mean written instructions signed by
an Authorized Person and received by PFPC. The instructions may be delivered by
hand, mail, tested telegram, cable, telex or facsimile sending device.
2. APPOINTMENT. The Fund hereby appoints PFPC to serve as
transfer agent, registrar, dividend disbursing agent and shareholder servicing
agent to each of the Portfolios, in accordance with the terms set forth in this
Agreement. PFPC accepts such appointment and agrees to furnish such services.
3. DELIVERY OF DOCUMENTS. The Fund has provided or, where
applicable, will provide PFPC with the following:
(a) Certified or authenticated copies of the
resolutions of the Fund's Board of Trustees,
approving the appointment of PFPC or its
affiliates to provide services to the
Portfolios and approving this Agreement;
(b) A copy of the Fund's most recent
effective registration statement on Form
N-1A;
3
<PAGE> 4
(c) A copy of the advisory agreement with
respect to each Portfolio;
(d) A copy of the distribution agreement with
respect to each class of Shares of the
Fund;
(e) A copy of each Portfolio's administration
agreements if PFPC is not providing the
Portfolio with such services;
(f) Copies of any shareholder servicing
agreements made in respect of the Fund or
a Portfolio; and
(g) Copies (certified or authenticated where
applicable) of any and all amendments or
supplements to the foregoing.
4. COMPLIANCE WITH RULES AND REGULATIONS. Subject to Section
13, PFPC will comply with all applicable requirements of the Securities Laws and
any laws, rules and regulations of governmental authorities having jurisdiction
with respect to the duties to be performed by PFPC hereunder. Except as
specifically set forth herein, PFPC assumes no responsibility for such
compliance by the Fund or any of its investment portfolios.
5. INSTRUCTIONS.
(a) Unless otherwise provided in this Agreement, PFPC shall
act only upon Oral and Written Instructions.
4
<PAGE> 5
(b) PFPC shall be entitled to rely upon any Oral and Written
Instructions it receives from an Authorized Person (or from a person reasonably
believed by PFPC to be an Authorized Person) pursuant to this Agreement. PFPC
may assume that any Oral or Written Instruction received hereunder is not in any
way inconsistent with the provisions of organizational documents or this
Agreement or of any vote, resolution or proceeding of the Fund's Board of
Trustees or of the Fund's shareholders, unless and until PFPC receives Written
Instructions to the contrary.
(c) The Fund agrees to forward to PFPC Written Instructions
confirming Oral so that PFPC receives the Written Instructions by the close of
business on the same day that such Oral are received. The fact that such
confirming Written Instructions are not received by PFPC shall in no way
invalidate the transactions or enforceability of the transactions authorized by
the Oral Instructions. Where Oral or Written Instructions reasonably appear to
have been received from an Authorized Person, PFPC shall incur no liability to
the Fund in acting upon such Oral or Written
5
<PAGE> 6
Instructions provided that PFPC's actions comply with the other provisions of
this Agreement.
6. RIGHT TO RECEIVE ADVICE.
(a) Advice of the Fund. If PFPC is in doubt as to any action
it should or should not take, PFPC may request directions or advice, including
Oral or Written Instructions, from the Fund.
(b) Advice of Counsel. If PFPC shall be in doubt as to any
question of law pertaining to any action it should or should not take, PFPC may
request advice at its own cost from such counsel of its own choosing (who may be
counsel for the Fund, the Fund's investment adviser or PFPC, at the option of
PFPC).
(c) Conflicting Advice. In the event of a conflict between
directions, advice or Oral or Written Instructions PFPC receives from the Fund,
and the advice it receives from counsel, PFPC may rely upon and follow the
advice of counsel. In the event PFPC so relies on the advice of counsel, PFPC
remains liable for any action or omission on the part of PFPC which constitutes
willful misfeasance, bad faith, gross
6
<PAGE> 7
negligence or reckless disregard by PFPC of any duties, obligations or
responsibilities set forth in this Agreement.
(d) Protection of PFPC. PFPC shall be protected in any action
it takes or does not take in reliance upon directions, advice or Oral or Written
Instructions it receives from the Fund or from counsel and which PFPC believes,
in good faith, to be consistent with those directions, advice or Oral or Written
Instructions. Nothing in this section shall be construed so as to impose an
obligation upon PFPC (i) to seek such directions, advice or Oral or Written
Instructions, or (ii) to act in accordance with such directions, advice or Oral
or Written Instructions unless, under the terms of other provisions of this
Agreement, the same is a condition of PFPC's properly taking or not taking such
action. Nothing in this subsection shall excuse PFPC when an action or omission
on the part of PFPC constitutes willful misfeasance, bad faith, gross negligence
or reckless disregard by PFPC of any duties, obligations or responsibilities set
forth in this Agreement.
7
<PAGE> 8
7. RECORDS; VISITS. The books and records pertaining to the
Fund, which are in the possession or under the control of PFPC, shall be the
property of the Fund. Such books and records shall be prepared and maintained as
required by the 1940 Act and other applicable securities laws, rules and
regulations. The Fund and Authorized Persons shall have access to such books and
records at all times during PFPC's normal business hours. Upon the reasonable
request of the Fund, copies of any such books and records shall be provided by
PFPC to the Fund or to an Authorized Person, at the Fund's expense.
8. CONFIDENTIALITY. PFPC agrees on its own behalf and that of
its employees to keep confidential all records of the Fund and information
relating to the Fund and its shareholders (past, present and future), unless the
release of such records or information is otherwise consented to, in writing, by
the Fund. The Fund agrees that such consent shall not be unreasonably withheld
and may not be withheld where PFPC may be exposed to civil or criminal contempt
proceedings
8
<PAGE> 9
or when required to divulge such information or records to duly constituted
authorities.
9. COOPERATION WITH ACCOUNTANTS. PFPC shall cooperate with the
Fund's independent public accountants and shall take all reasonable actions in
the performance of its obligations under this Agreement to ensure that the
necessary information is made available to such accountants for the expression
of their opinion, as required by the Fund.
10. DISASTER RECOVERY. PFPC shall enter into and shall
maintain in effect with appropriate parties one or more agreements making
reasonable provisions for emergency use of electronic data processing equipment
to the extent appropriate equipment is available. In the event of equipment
failures, PFPC shall, at no additional expense to the Fund, take reasonable
steps to minimize service interruptions. PFPC shall have no liability with
respect to the loss of data or service interruptions caused by equipment
failure, provided such loss or interruption is not caused by PFPC's own willful
misfeasance, bad faith, gross negligence or reckless disregard of its duties or
obligations under this Agreement.
9
<PAGE> 10
11. COMPENSATION. As compensation for services rendered by
PFPC during the term of this Agreement, the Fund, on behalf of each Portfolio,
will pay to PFPC a fee or fees as may be agreed to from time to time in writing
by the Fund and PFPC.
12. INDEMNIFICATION. The Fund agrees to indemnify and hold
harmless PFPC and its affiliates from all taxes, charges, expenses, assessments,
claims and liabilities (including, without limitation, liabilities arising under
the Securities Laws and any state and foreign securities and blue sky laws, and
amendments thereto), and expenses, including (without limitation) attorneys'
fees and disbursements, arising directly or indirectly from any action or
omission to act which PFPC takes (i) at the request or on the direction of or in
reliance on the advice of the Fund or (ii) upon Oral or Written Instructions.
Neither PFPC, nor any of its affiliates, shall be indemnified against any
liability (or any expenses incident to such liability) arising out of PFPC's or
its affiliates' own willful misfeasance, bad faith, negligence
10
<PAGE> 11
or reckless disregard of its duties and obligations under this Agreement.
13. RESPONSIBILITY OF PFPC.
(a) PFPC shall be under no duty to take any action on behalf
of the Fund or any Portfolio except as specifically set forth herein or as may
be specifically agreed to by PFPC in writing. PFPC shall be obligated to
exercise care and diligence in the performance of its duties hereunder, to act
in good faith and to use its best efforts, within reasonable limits, in
performing services provided for under this Agreement. PFPC shall be liable for
any damages arising out of PFPC's failure to perform its duties under this
Agreement to the extent such damages arise out of PFPC's willful misfeasance,
bad faith, negligence or reckless disregard of such duties.
(b) Without limiting the generality of the foregoing or of any
other provision of this Agreement, (i) PFPC, shall not be liable for losses
beyond its control, provided that PFPC has acted in accordance with the standard
of care set forth above; and (ii) PFPC shall not be under any
11
<PAGE> 12
duty or obligation to inquire into and shall not be liable for (A) the validity
or invalidity or authority or lack thereof of any Oral or Written Instruction,
notice or other instrument which conforms to the applicable requirements of this
Agreement, and which PFPC reasonably believes to be genuine; or (B) subject to
Section 10, delays or errors or loss of data occurring by reason of
circumstances beyond PFPC's control, including acts of civil or military
authority, national emergencies, labor difficulties, fire, flood, catastrophe,
acts of God, insurrection, war, riots or failure of the mails, transportation,
communication or power supply.
(c) Notwithstanding anything in this Agreement to the
contrary, neither PFPC nor its affiliates shall be liable to the Fund or to any
Portfolio for any consequential, special or indirect losses or damages which the
Fund may incur or suffer by or as a consequence of PFPC's or its affiliates'
performance of the services provided hereunder, whether or not the likelihood of
such losses or damages was known by PFPC or its affiliates.
12
<PAGE> 13
14. DESCRIPTION OF SERVICES.
(a) Services Provided on an Ongoing Basis, If
Applicable.
(i) Calculate 12b-1 payments;
(ii) Maintain proper shareholder registrations;
(iii) Review new applications and correspond
with shareholders to complete or correct
information;
(iv) Direct payment processing of checks or
wires;
(v) Prepare and certify stockholder lists in conjunction
with proxy solicitations;
(vi) Countersign share certificates;
(vii) Prepare and mail to shareholders
confirmation of activity;
(viii) Provide toll-free lines for direct shareholder use,
plus customer liaison staff for on-line inquiry
response;
(ix) Mail duplicate confirmations to broker-dealers of
their clients' activity, whether executed through the
broker-dealer or directly with PFPC;
(x) Provide periodic shareholder lists and statistics to
the clients;
(xi) Provide detailed data for underwriter/broker
confirmations;
13
<PAGE> 14
(xii) Prepare periodic mailing of year-end tax
and statement information;
(xiii) Notify on a timely basis the investment adviser,
accounting agent, and custodian of Portfolio
activity; and
(xiv) Perform other participating broker-dealer shareholder
services as may be agreed upon from time to time.
(b) Services Provided by PFPC Under Oral or Written
Instructions.
(i) Accept and post daily Portfolio purchases and
redemptions;
(ii) Accept, post and perform shareholder transfers and
exchanges;
(iii) Pay dividends and other distributions;
(iv) Solicit and tabulate proxies; and
(v) Issue and cancel certificates (when requested in
writing by the shareholder).
(c) Purchase of Shares. PFPC shall issue and credit an account
of an investor, in the manner described in the Portfolio's prospectus, once it
receives:
(i) A purchase order;
(ii) Proper information to establish a shareholder
account; and
14
<PAGE> 15
(iii) Confirmation of receipt or crediting of funds for
such order to the Fund's custodian.
(d) Redemption of Shares. PFPC shall redeem Shares only if
that function is properly authorized by the certificate of incorporation or
resolution of the Fund's Board of Trustees. Shares shall be redeemed and payment
therefor shall be made in accordance with the Portfolio's prospectus, when the
recordholder tenders Shares in proper form and directs the method of redemption.
If Shares are received in proper form, Shares shall be redeemed before the funds
are provided to PFPC from the Portfolio's custodian (the "Custodian"). If the
recordholder has not directed that redemption proceeds be wired, when the
Custodian provides PFPC with funds, the redemption check shall be sent to and
made payable to the recordholder, unless:
(i) the surrendered certificate is drawn to the order of
an assignee or holder and transfer authorization is
signed by the recordholder; or
(ii) Transfer authorizations are signed by the
recordholder when Shares are held in book-entry form.
15
<PAGE> 16
When a broker-dealer notifies PFPC of a redemption desired by a customer, and
the Custodian provides PFPC with funds, PFPC shall prepare and send the
redemption check to the broker-dealer and made payable to the broker-dealer on
behalf of its customer.
(e) Dividends and Distributions. Upon receipt of a resolution
of the Fund's Board of Trustees authorizing the declaration and payment of
dividends and distributions, PFPC shall issue dividends and distributions
declared with respect to a Portfolio in Shares, or, upon shareholder election,
pay such dividends and distributions in cash, if provided for in the Portfolio's
prospectus. Such issuance or payment, as well as payments upon redemption as
described above, shall be made after deduction and payment of the required
amount of funds to be withheld in accordance with any applicable tax laws or
other laws, rules or regulations. PFPC shall mail to the Portfolio's
shareholders such tax forms and other information, or permissible substitute
notice, relating to dividends and distributions paid by the Fund as are required
to be filed and mailed by applicable law, rule or regulation. PFPC shall
16
<PAGE> 17
prepare, maintain and file with the IRS and other appropriate taxing authorities
reports relating to all dividends above a stipulated amount paid by the Fund
with respect to the Portfolios' shareholders as required by tax or other law,
rule or regulation.
(f) Shareholder Account Services.
(i) PFPC may arrange, in accordance with the
prospectus, for issuance of Shares
obtained through:
- Any pre-authorized check plan; and
- Direct purchases through broker wire
orders, checks and applications.
(ii) PFPC may arrange, in accordance with the
prospectus, for a shareholder's:
- Exchange of Shares for shares of another
fund with which the Portfolio has
exchange privileges;
- Automatic redemption from an account
where that shareholder participates in a
automatic redemption plan; and/or
- Redemption of Shares from an account with
a checkwriting privilege.
(g) Communications to Shareholders. Upon timely Written
Instructions, PFPC shall mail all communications by the Fund to the Portfolios'
shareholders, including:
17
<PAGE> 18
(i) Reports to shareholders;
(ii) Confirmations of purchases and sales of
Portfolio shares;
(iii) Monthly or quarterly statements;
(iv) Dividend and distribution notices;
(v) Proxy material; and
(vi) Tax form information.
In addition, PFPC will receive and tabulate the proxy cards
for the meetings of the Portfolios' shareholders.
(h) Records. PFPC shall maintain records of the accounts for
each shareholder showing the following information:
(i) Name, address and United States Tax Identification or
Social Security number;
(ii) Number and class of Shares held and number and class
of Shares for which certificates, if any, have been
issued, including certificate numbers and
denominations;
(iii) Historical information regarding the account of each
shareholder, including dividends and distributions
paid and the date and price for all transactions on a
shareholder's account;
(iv) Any stop or restraining order placed
against a shareholder's account;
18
<PAGE> 19
(v) Any correspondence relating to the current
maintenance of a shareholder's account;
(vi) Information with respect to withholdings;
and
(vii) Any information required in order for the transfer
agent to perform any calculations contemplated or
required by
this Agreement.
(i) Lost or Stolen Certificates. PFPC shall place a stop
notice against any certificate reported to be lost or stolen and comply with all
applicable federal regulatory requirements for reporting such loss or alleged
misappropriation. A new certificate shall be registered and issued only upon:
(i) The shareholder's pledge of a lost instrument bond
or such other appropriate indemnity bond issued by a
surety company approved by PFPC; and
(ii) Completion of a release and indemnifica tion
agreement signed by the shareholder to protect PFPC
and its affiliates.
19
<PAGE> 20
(j) Shareholder Inspection of Stock Records. Upon a request
from any Fund shareholder to inspect stock records, PFPC will notify the Fund
and the Fund will issue instructions granting or denying each such request.
Unless PFPC has acted contrary to the Fund's instructions, the Fund agrees and
does hereby, release PFPC from any liability for refusal of permission for a
particular shareholder to inspect the Fund's stock records.
(k) Withdrawal of Shares and Cancellation of Certificates.
Upon receipt of Written Instructions, PFPC shall cancel outstanding certificates
surrendered by the Fund to reduce the total amount of outstanding shares by the
number of shares surrendered by the Fund.
(l) Additional Services
PFPC shall provide additional services on behalf of the
Portfolios which may be initially agreed upon in writing between the Fund and
PFPC.
15. DURATION AND TERMINATION. This Agreement shall continue
until terminated by the Fund or by PFPC on sixty (60) days' prior written notice
to the other party.
20
<PAGE> 21
16. NOTICES. All notices and other communications, including
Written Instructions, shall be in writing or by confirming telegram, cable,
telex or facsimile sending device. Notices shall be addressed (a) if to PFPC, at
103 Bellevue Parkway, Wilmington, Delaware 19809; (b) if to the Fund, c/o Haven
Capital Management, Inc., 655 Third Avenue, New York, NY 10017, Attn: Colon C.
Ferenbach or (c) if to neither of the foregoing, at such other address as shall
have been given by like notice to the sender of any such notice or other
communication by the other party. If notice is sent by confirming telegram,
cable, telex or facsimile sending device, it shall be deemed to have been given
immediately. If notice is sent by first-class mail, it shall be deemed to have
been given three days after it has been mailed. If notice is sent by messenger,
it shall be deemed to have been given on the day it is delivered.
17. AMENDMENTS. This Agreement, or any term thereof, may be
changed or waived only by a written amendment, signed by the party against whom
enforcement of such change or waiver is sought.
21
<PAGE> 22
18. DELEGATION; ASSIGNMENT. PFPC may assign its rights and
delegate its duties hereunder to any wholly-owned direct or indirect subsidiary
of PNC Bank, National Association or PNC Bank Corp., provided that (i) PFPC
gives the Fund thirty (30) days' prior written notice; (ii) the delegate (or
assignee) agrees with PFPC and the Fund to comply with all relevant provisions
of the 1940 Act; and (iii) PFPC and such delegate (or assignee) promptly provide
such information as the Fund may request, and respond to such questions as the
Fund may ask, relative to the delegation (or assignment), including (without
limitation) the capabilities of the delegate (or assignee).
19. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
20. FURTHER ACTIONS. Each party agrees to perform such further
acts and execute such further documents as are necessary to effectuate the
purposes hereof.
22
<PAGE> 23
21. MISCELLANEOUS.
(a) Entire Agreement. This Agreement embodies the entire
agreement and understanding between the parties and supersedes all prior
agreements and understandings relating to the subject matter hereof, provided
that the parties may embody in one or more separate documents their agreement,
if any, with respect to delegated duties and Oral Instructions.
(b) Captions. 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.
(c) Governing Law. This Agreement shall be deemed to be a
contract made in Delaware and governed by Delaware law, without regard to
principles of conflicts of law.
(d) Partial Invalidity. If any provision of this Agreement
shall be held or made invalid by a court decision, statute, rule or otherwise,
the remainder of this Agreement shall not be affected thereby.
23
<PAGE> 24
(e) Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
(f) Facsimile Signatures. The facsimile signature of any party
to this Agreement shall constitute the valid and binding execution hereof by
such party.
(g) Limitations on the Obligations of the Fund. The
obligations of the Fund are not binding upon any of the Trustees, shareholders,
officers, employees, or agents of the Fund or its Portfolios individually but
are binding only upon the assets and property of the Fund and Portfolios,
provided that no obligations hereunder shall be binding upon the assets
24
<PAGE> 25
and property of any portfolio under the Fund not listed on Exhibit A.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first above written.
PFPC INC.
By:
--------------------------------
Title:
-----------------------------
THE HAVEN CAPITAL MANAGEMENT TRUST
By:
--------------------------------
Title:
-----------------------------
25
<PAGE> 26
EXHIBIT A
PORTFOLIOS
THIS EXHIBIT A, dated as of June 17, 1994, is Exhibit A to
that certain Transfer Agency Services Agreement dated as of June 17, 1994
between PFPC Inc. and The Haven Capital Management Trust. This Exhibit A shall
supercede all previous forms of Exhibit A.
The Haven Fund
PFPC INC.
By:
--------------------------------
Title:
-----------------------------
THE HAVEN CAPITAL MANAGEMENT TRUST
By:
--------------------------------
Title:
-----------------------------
26
<PAGE> 27
AUTHORIZED PERSONS APPENDIX
NAME (TYPE) SIGNATURE
Stephen Ely
- -------------------------------- -----------------------------
Colin C. Ferenbach
- -------------------------------- -----------------------------
Denis M. Turko
- -------------------------------- -----------------------------
27
<PAGE> 1
EXHIBIT 99.B9-2
Fee Letter Regarding
Transfer Agency
Services Fees
June, 1997
THE HAVEN CAPITAL MANAGEMENT TRUST
Re: Transfer Agency Services Fees
Dear Sir/Madam:
This letter constitutes our agreement with respect to compensation to be
paid to PFPC Inc. ("PFPC") under the terms of a Transfer Agency Agreement
between The Haven Capital Management Trust ("you" or the "Fund") and PFPC dated
June 17, 1994. Pursuant to Paragraph 11 of that Agreement, and in consideration
of the services to be provided to you, you will pay PFPC certain fees, and
reimburse PPC for certain out-of-pocket expenses, as follows:
1) Account Fee:
Annual, Semi-Annual Dividend: $10.00 per account per annum
Quarterly Dividend: $12.00 per account per annum
Monthly Dividend: $15.00 per account per annum
Daily Accrual Dividend: $18.00 per account per annum
Inactive Account: $.03 per account per annum
Contingent deferred sales charge funds add 12% to annual per account fee.
Fees shall be calculated and paid monthly based on one-twelfth (1/12th) of
the annual fee. An inactive account is defined as having a zero balance
with no dividend payable. Inactive accounts are purged annually after
year-end tax reporting.
2) Transaction Charges:
Master/Omnibus Account: $1.00 per purchase/redemption
Wire order desk: $4.00 per broker call to place transactions
New Account Opening: $.40 per account (electronic interface)
<PAGE> 2
$4.00 per account beginning in June 1997
(paper)
$4.50 per account beginning in June 1998
(paper)
$5.00 per account beginning in June 1999
(paper)
Checkwriting: $1.85 per account per year
$.50 per check (returned)
$.10 per check (not returned)
12b-1 Calculation: $.25 per account per calculation
3) Fundserv/Networking:
PNC System Access Charges(1):
NSCC FundSERV
Membership Fee: $1,000.00 one time setup charge per
fund family
Transaction Fees: $.25 per transaction per month
NSCC Networking
Membership Fee: $ 500.00 one time setup charge per
fund family
Sub-Account Fee: No charge
Position File Fee: No charge
- -------------------
1. Plus: out-of-pocket expenses for settlements; wire charges; NSCC pickup
charges; hardware, CRT's modems; line (if required); etc.
2
<PAGE> 3
Commission Settlement
Membership Fee: $ 500.00 one time setup charge per
fund family
Processing Fee: No charge
Mutual Fund Profile (Phase I)
Base Fee: $ 125.00 one time setup charge per
fund family
Ongoing Fee: $ 10.00 per month per fund/class
$ 100.00 maximum per fund family
per month
Note: NSCC will deduct its monthly fee on the 15th of each month from PNC's cash
settlement that day. PNC will include these charges on its next bill as
out-of-pocket expenses.
4) Additional Out-of-Pocket Expenses
a. Toll-free lines (if required)
b. Forms, envelopes, checks, checkbooks
c. Postage (bulk, pre-sort, first-class current prevailing rates)
d. Federal Express, delivery, courier services, mailgrams
e. Hardware/phone lines for data transmissions and remote terminal(s)
(if required)
f. Data transmissions: $10.00 per transmission, per end point
beginning June 1997
$15.00 per transmission, per end point
beginning June 1998
$20.00 per transmission, per end point
beginning June 1999
g. Microfiche/microfilm
h. Wire fee for receipt: $10.00 per domestic wire
$15.00 per internat'l wire
Wire fee for disbursement: $15.00 per domestic wire
$15.00 per internat'l wire
i. ACH Transaction Charge: $.08 per item
3
<PAGE> 4
j. Mailing fee: Approximately $.08 per item for standard inserts; $.015
each additional insert
k. Cost of proxy solicitation, mailing and tabulation:
$350.00 base fee
$ .03 per proxy issued (5,000 accounts
and up)
$ .45 per proxy issues (less than 5,000
accounts)
$100.00 plus travel expenses for judge of
elections
Postage and Federal Express charges as
incurred
l. Certificate issuance fee: $2.00 per certificate; any additional
reports/services to be negotiated
m. Audio Response System (if applicable)
n. Record retention storage
o. "B"/"C" notice mailing and IRS levies: $3.00 per item
p. Locating lost shareholders in anticipation of escheating:
$7.50 per name
q. Individual state fax filings
r. Development/programming costs: negotiated time and material
s. Consolidated statements: $200.00 setup plus $.20 per page, per
production
t. Sales tracking system interfaces: negotiated time and expenses
u. Fulfillment
v. Creation of user tapes: $100 per occurrence
w. Labels: $.06 each; $100 minimum
x. Reruns for bad price, dividend factors, etc.: time and material cost
y. Ad hoc reports: Standard $.01 per record processed plus
$100.00 set up fee; same day turnaround additional $100.00 set up fee
z. Retroactive record dates: $100.00 plus $.025 per account
aa. Class "B" to "A" aging exchanges: $100.00 per run; plus $.40 per
account
bb. PC fax: $5.00 per fax
cc. Conversion expenses (to be determined)
dd. Disaster recovery (as incurred)
ee. Travel expenses as required
ff. Training expenses as required ($75.00 per hour)
gg. Other services (must be defined and then quoted)
401K Administrator Interfaces: $20.00 per
transmission, plus a processing fee
SEPS/SARSEPS: $35.00 per activity, plus $.50 per
electronic item or $2.50 per paper item processed
Payroll Contribution Plans: $35.00 per activity, plus $.50
per electronic item or $2.50 per paper item processed
4
<PAGE> 5
* Any fee or out-of-pocket expenses not paid within 30 days of the date of the
original invoice will be charged a late payment fee of 1% per month until
payment of the fees are received by PFPC.
5) Additional Expenses (Which May be Paid by Shareholders):
a. IRA/Keough Processing: $10.00 per account per annum
5.50 new account set-up fee
2.50 per distribution
25.00 per transfer in or out
b. Exchange Fee: $ 5.00
c. Stop payments: $12.50 each
Non-Sufficient Funds: $15.00 each
Check Copies: $ 2.50 each
d. Account Transcripts: $35.00 each
(within 3 most recent years)
(if older than 3 years) $50.00 each
e. Returned purchase checks: $20.00 each
f. Lost certificate bonding: $35.00 service charge and replacement
value charged by the insurance company
at the prevailing rate
g. Federal Express charges: $15.00
(if requested by shareholder)
h. Wire fee for disbursement: $15.00 domestic
(if requested by shareholder) $15.00 international
6) Monthly Minimum Fee:
$3,000 with respect to each of the first two Portfolios or classes of
shares, excluding transaction charges and out-of-pocket expenses; and
$2,500 for each Portfolio or class of shares created thereafter, excluding
transaction charges and out-of-pocket expenses.
5
<PAGE> 6
If PPC is removed from the Transfer Agency Agreement referenced above, the
Fund shall pay any costs associated with deconversion.
The fee for the period from the date hereof until the end of the year
shall be prorated according to the proportion which such period bears to the
full annual period.
If the foregoing accurately sets forth out agreement and you intend to be
legally bound thereby, please execute a copy of this letter and return it to us.
Very truly yours,
PPFC INC.
By:
---------------------------
Title:
ACCEPTED: THE HAVEN CAPITAL MANAGEMENT TRUST
By:
------------------------------
Title:
6
<PAGE> 1
EXHIBIT 99.B9-3
Administration &
Accounting Services
Agreeement
ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT
THIS AGREEMENT is made as of June 17, 1994 by and
between The Haven Capital Management Trust, a Delaware business trust (the
"Fund"), and PFPC INC., a Delaware corporation ("PFPC"), which is an indirect
wholly owned subsidiary of PNC Bank Corp.
W I T N E S S E T H:
WHEREAS, the Fund is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Fund wishes to retain PFPC to provide
administration and accounting services to its investment portfolios listed on
Exhibit A attached hereto and made a part hereof, as such Exhibit A may be
amended from time to time (each a "Portfolio"), and PFPC wishes to furnish such
services.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, and intending to be legally bound hereby the
parties hereto agree as follows:
<PAGE> 2
1. DEFINITIONS. AS USED IN THIS AGREEMENT:
(a) "1933 Act" means the Securities Act of 1933, as
amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as
amended.
(c) "Authorized Person" means any officer of the Fund and any
other person duly authorized by the Fund's Board of Trustees to give Oral and
Written Instructions on behalf of the Fund and listed on the Authorized Persons
Appendix attached hereto and made a part hereof or any amendment thereto as may
be received by PFPC. An Authorized Person's scope of authority may be limited by
the Fund by setting forth such limitation in the Authorized Persons Appendix.
(d) "CEA" means the Commodities Exchange Act, as amended.
(e) "Oral Instructions" mean oral instructions received by
PFPC from an Authorized Person or from a person reasonably believed by PFPC to
be an Authorized Person.
(f) "SEC" means the Securities and Exchange Commission.
2
<PAGE> 3
(g) "Securities Laws" means the 1933 Act, the 1934 Act, the
1940 Act and the CEA.
(h) "Shares" mean the shares of beneficial interest of any
series or class of the Fund.
(i) "Written Instructions" mean written instructions signed by
an Authorized Person and received by PFPC. The instructions may be delivered by
hand, mail, tested telegram, cable, telex or facsimile sending device.
2. APPOINTMENT. The Fund hereby appoints PFPC to provide
administration and accounting services to the each of the Portfolios, in
accordance with the terms set forth in this Agreement. PFPC accepts such
appointment and agrees to furnish such services.
3. DELIVERY OF DOCUMENTS. The Fund has provided or, where
applicable, will provide PFPC with the following:
(a) certified or authenticated copies of the resolutions
of the Fund's Board of Trustees, approving the
appointment of PFPC or its affiliates to provide
services to each Portfolio and approving this
Agreement;
(b) a copy of Fund's most recent effective regis tration
statement on Form N-1A;
3
<PAGE> 4
(c) a copy of each Portfolio's advisory agreement
or agreements;
(d) a copy of the distribution agreement with respect to
each class of Shares representing an interest in a
Portfolio;
(e) a copy of any additional administration
agreement with respect to a Portfolio;
(f) a copy of any shareholder servicing agreement
made in respect of the Fund or a Portfolio;
and
(g) copies (certified or authenticated, where applicable)
of any and all amendments or sup plements to the
foregoing.
4. COMPLIANCE WITH RULES AND REGULATIONS.
Subject to Section 13, PFPC will comply with all applicable
requirements of the Securities Laws, and any laws, rules and regulations of
governmental authorities having jurisdiction with respect to the duties to be
performed by PFPC hereunder. Except as specifically set forth herein, PFPC
assumes no responsibility for such compliance by the Fund or any Portfolio.
5. INSTRUCTIONS.
(a) Unless otherwise provided in this Agreement, PFPC shall
act only upon Oral and Written Instructions.
4
<PAGE> 5
(b) PFPC shall be entitled to rely upon any Oral and Written
Instructions it receives from an Authorized Person (or from a person reasonably
believed by PFPC to be an Authorized Person) pursuant to this Agreement. PFPC
may assume that any Oral or Written Instruction received hereunder is not in any
way inconsistent with the provisions of organizational documents or this
Agreement or of any vote, resolution or proceeding of the Fund's Board of
Trustees or of the Fund's shareholders, unless and until PFPC receives Written
Instructions to the contrary.
(c) The Fund agrees to forward to PFPC Written Instructions
confirming Oral Instructions (except where such Oral Instructions are given by
PFPC or its affiliates) so that PFPC receives the Written Instructions by the
close of business on the same day that such Oral Instructions are received. The
fact that such confirming Written Instructions are not received by PFPC shall in
no way invalidate the transactions or enforceability of the transactions
authorized by the Oral Instructions. Where Oral or Written Instructions
reasonably appear to have been received from an Authorized
5
<PAGE> 6
Person, PFPC shall incur no liability to the Fund in acting upon such Oral or
Written Instructions provided that PFPC's actions comply with the other
provisions of this Agreement.
6. RIGHT TO RECEIVE ADVICE.
(a) Advice of the Fund. If PFPC is in doubt as to any action
it should or should not take, PFPC may request directions or advice, including
Oral or Written Instructions, from the Fund.
(b) Advice of Counsel. If PFPC shall be in doubt as to any
question of law pertaining to any action it should or should not take, PFPC may
request advice at its own cost from such counsel of its own choosing (who may be
counsel for the Fund, the Fund's investment adviser or PFPC, at the option of
PFPC).
(c) Conflicting Advice. In the event of a conflict between
directions, advice or Oral or Written Instructions PFPC receives from the Fund
and the advice PFPC receives from counsel, PFPC may rely upon and follow the
advice of counsel. In the event PFPC so relies on the advice of counsel, PFPC
remains liable for any action or omission on the part of PFPC
6
<PAGE> 7
which constitutes willful misfeasance, bad faith, gross negligence or reckless
disregard by PFPC of any duties, obligations or responsibilities set forth in
this Agreement.
(d) Protection of PFPC. PFPC shall be protected in any action
it takes or does not take in reliance upon directions, advice or Oral or Written
Instructions it receives from the Fund or from counsel and which PFPC believes,
in good faith, to be consistent with those directions, advice and Oral or
Written Instructions. Nothing in this section shall be construed so as to impose
an obligation upon PFPC (i) to seek such directions, advice or Oral or Written
Instructions, or (ii) to act in accordance with such directions, advice or Oral
or Written Instructions unless, under the terms of other provisions of this
Agreement, the same is a condition of PFPC's properly taking or not taking such
action. Nothing in this subsection shall excuse PFPC when an action or omission
on the part of PFPC constitutes willful misfeasance, bad faith, gross negligence
or reckless disregard by PFPC of any duties, obligations or responsibilities set
forth in this Agreement.
7
<PAGE> 8
7. RECORDS; VISITS.
(a) The books and records pertaining to the Fund and the
Portfolios which are in the possession or under the control of PFPC shall be the
property of the Fund. Such books and records shall be prepared and maintained as
required by the 1940 Act and other applicable securities laws, rules and
regulations. The Fund and Authorized Persons shall have access to such books and
records at all times during PFPC's normal business hours. Upon the reasonable
request of the Fund, copies of any such books and records shall be provided by
PFPC to the Fund or to an Authorized Person, at the Fund's expense.
(b) PFPC shall keep the following records:
(i) all books and records with respect to each
Portfolio's books of account;
(ii) records of each Portfolio's securities
transactions; and
(iii) all other books and records as PFPC is required
to maintain pursuant to Rule 31a-1 of the 1940
Act in connection with the services provided
hereunder.
8. CONFIDENTIALITY.
PFPC agrees to keep confidential all records of the Fund and
information relating
8
<PAGE> 9
to the Fund and its shareholders (past, present and future), unless the release
of such records or information is otherwise consented to, in writing, by the
Fund. The Fund agrees that such consent shall not be unreasonably withheld and
may not be withheld where PFPC may be exposed to civil or criminal contempt
proceedings or when required to divulge such information or records to duly
constituted authorities.
9. LIAISON WITH ACCOUNTANTS. PFPC shall act as liaison with
the Fund's independent public accountants and shall provide account analyses,
fiscal year summaries, and other audit-related schedules with respect to each
Portfolio. PFPC shall take all reasonable action in the performance of its
duties under this Agreement to assure that the necessary information is made
available to such accountants for the expression of their opinion, as required
by the Fund.
10. DISASTER RECOVERY. PFPC shall enter into and shall
maintain in effect with appropriate parties one or more agreements making
reasonable provisions for emergency use of electronic data processing equipment
to the extent appropriate equipment is available. In the event of equipment
failures,
9
<PAGE> 10
PFPC shall, at no additional expense to the Fund, take reasonable steps to
minimize service interruptions. PFPC shall have no liability with respect to the
loss of data or service interruptions caused by equipment failure, provided such
loss or interruption is not caused by PFPC's own willful misfeasance, bad faith,
gross negligence or reckless disregard of its duties or obligations under this
Agreement.
11. COMPENSATION. As compensation for services rendered by
PFPC during the term of this Agreement, the Fund, on behalf of each Portfolio,
will pay to PFPC a fee or fees as may be agreed to in writing by the Fund and
PFPC.
12. INDEMNIFICATION. The Fund, on behalf of each Portfolio,
agrees to indemnify and hold harmless PFPC and its affiliates from all taxes,
charges, expenses, assessments, claims and liabilities (including, without
limitation, liabilities arising under the Securities Laws and any state or
foreign securities and blue sky laws, and amendments thereto), and expenses,
including (without limitation) attorneys' fees and disbursements arising
directly or indirectly from any action or omission to act which PFPC takes (i)
at the request
10
<PAGE> 11
or on the direction of or in reliance on the advice of the Fund or (ii) upon
Oral or Written Instructions. Neither PFPC, nor any of its affiliates', shall be
indemnified against any liability (or any expenses incident to such liability)
arising out of PFPC's or its affiliates' own willful misfeasance, bad faith,
gross negligence or reckless disregard of its duties and obligations under this
Agreement. Any amounts payable by the Fund hereunder shall be satisfied only
against the relevant Portfolio's assets and not against the assets of any other
investment portfolio of the Fund.
13. RESPONSIBILITY OF PFPC.
(a) PFPC shall be under no duty to take any action on behalf
of the Fund or any Portfolio except as specifically set forth herein or as may
be specifically agreed to by PFPC in writing. PFPC shall be obligated to
exercise care and diligence in the performance of its duties hereunder, to act
in good faith and to use its best efforts, within reasonable limits, in
performing services provided for under this Agreement. PFPC shall be liable for
any damages arising out of PFPC's failure to perform its duties under this
Agreement
11
<PAGE> 12
to the extent such damages arise out of PFPC's willful misfeasance, bad faith,
gross negligence or reckless disregard of such duties.
(b) Without limiting the generality of the foregoing or of any
other provision of this Agreement, (i) PFPC shall not be liable for losses
beyond its control, provided that PFPC has acted in accordance with the standard
of care set forth above; and (ii) PFPC shall not be liable for (A) the validity
or invalidity or authority or lack thereof of any Oral or Written Instruction,
notice or other instrument which conforms to the applicable requirements of this
Agreement, and which PFPC reasonably believes to be genuine; or (B) subject to
Section 10, delays or errors or loss of data occurring by reason of
circumstances beyond PFPC's control, including acts of civil or military
authority, national emergencies, labor difficulties, fire, flood, catastrophe,
acts of God, insurrection, war, riots or failure of the mails, transportation,
communication or power supply.
(c) Notwithstanding anything in this Agreement to the
contrary, neither PFPC nor its affiliates shall be liable
12
<PAGE> 13
to the Fund or to any Portfolio for any consequential, special or indirect
losses or damages which the Fund or any Portfolio may incur or suffer by or as a
consequence of PFPC's or any affiliates' performance of the services provided
hereunder, whether or not the likelihood of such losses or damages was known by
PFPC or its affiliates.
14. DESCRIPTION OF ACCOUNTING SERVICES ON A CONTINUOUS BASIS.
PFPC will perform the following accounting services with respect to each
Portfolio:
(i) Journalize investment, capital share and income and
expense activities;
(ii) Verify investment buy/sell trade tickets when
received from the investment adviser for a Portfolio
(the "Adviser") and transmit trades to the Fund's
custodian (the "Custodian") for proper settlement;
(iii) Maintain individual ledgers for investment
securities;
(iv) Maintain historical tax lots for each security;
(v) Reconcile cash and investment balances of with the
Custodian, and provide the Adviser with the beginning
cash balance available for investment purposes;
(vi) Update the cash availability throughout the day as
required by the Adviser;
13
<PAGE> 14
(vii) Post to and prepare the Statement of Assets and
Liabilities and the Statement of Operations;
(viii) Calculate various contractual expenses (e.g.,
advisory and custody fees);
(ix) Monitor the expense accruals and notify an officer of
the Fund of any proposed adjustments;
(x) Control all disbursements and authorize such
disbursements upon Written Instructions;
(xi) Calculate capital gains and losses;
(xii) Determine net income;
(xiii) Obtain security market quotes from independent
pricing services approved by the Adviser, or if such
quotes are unavailable, then obtain such prices from
the Adviser, and in either case calculate the market
value of each Portfolio's Investments;
(xiv) Transmit or mail a copy of the daily portfolio
valuation to the Adviser;
(xv) Compute net asset value in a manner and at times
described in the registration statement of the Fund
on Form N-1A most recently received by PFPC;
(xvi) As appropriate, compute yields, total return, expense
ratios, portfolio turnover rate, and, if required,
portfolio average dollar-weighted maturity; and
(xvii) Prepare a monthly financial statement, which will
include the following items:
14
<PAGE> 15
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Cash Statement
Schedule of Capital Gains and Losses.
15. DESCRIPTION OF ADMINISTRATION SERVICES ON A CONTINUOUS BASIS. PFPC
will perform the following administration services with respect to each
Portfolio:
(i) Prepare quarterly broker security transactions summaries;
(ii) Prepare monthly security transaction listings;
(iii) Supply various normal and customary Portfolio and Fund
statistical data as requested on an ongoing basis;
(iv) Prepare for execution and file the Fund's Federal and
state tax returns;
(v) Prepare and file the Fund's Semi-Annual Reports with the
SEC on Form N-SAR;
(vi) Prepare and file with the SEC the Fund's annu al,
semi-annual, and quarterly shareholder reports;
(vii) Assist in the preparation of registration statements and
other filings relating to the registration of Shares;
(viii) Monitor and, upon request, provide a monthly report to the
investment adviser regarding each Portfolio's status as a
regulated invest-
15
<PAGE> 16
ment company under Sub-chapter M of the Internal
Revenue Code of 1986, as amended;
(ix) Coordinate contractual relationships and communications
between the Portfolios and their respective contractual
service providers as generally may be required to carry on
properly the business and operations of the Portfolios;
(x) Take reasonable steps to assist each Portfolio, as needed
and agreed to by the parties, in registering its Shares in
states in which such registration has not been made, and
after the initial registration of a Portfolio's Shares:
(i) make the filings and take the actions necessary to
maintain (including increasing the number of
registered Shares if necessary) and renew the state
registration of the Portfolio's Shares; and
(ii) monitor the Portfolio's compliance with the amounts
and conditions of each state qualification;
(xi) Provide such information to a Portfolio's investment
adviser as shall be mutually agreed upon in writing
between the investment adviser and PFPC to allow the
investment adviser to monitor the Portfolio's compliance
with certain requirements of the 1940 Act and the Fund's
registration statement on Form N-1A; and
(xii) Maintain the Fund's fidelity bond as required by the 1940
Act and obtain a directors and officers liability policy.
16
<PAGE> 17
16. DURATION AND TERMINATION. This Agreement shall continue
until terminated by either party on sixty (60) days' prior written notice to the
other party.
17. NOTICES. All notices and other communications, including
Written Instructions, shall be in writing or by confirming telegram, cable,
telex or facsimile sending device. If notice is sent by confirming telegram,
cable, telex or facsimile sending device, it shall be deemed to have been given
immediately. If notice is sent by first-class mail, it shall be deemed to have
been given three days after it has been mailed. If notice is sent by messenger,
it shall be deemed to have been given on the day it is delivered. Notices shall
be addressed (a) if to PFPC, at 103 Bellevue Parkway, Wilmington, Delaware
19809; (b) if to the Fund, c/o Haven Capital Management, Inc., 655 Third Avenue,
New York, New York 10017, Attn: Colin C. Ferenbach; or (c) if to neither of the
foregoing, at such other address as shall have been provided by like notice to
the sender of any such notice or other communication by the other party.
17
<PAGE> 18
18. AMENDMENTS. This Agreement, or any term thereof, may be
changed or waived only by written amendment, signed by the party against whom
enforcement of such change or waiver is sought.
19. DELEGATION; ASSIGNMENT. PFPC may assign its rights and
delegate its duties hereunder to any wholly-owned direct or indirect subsidiary
of PNC Bank, National Association or PNC Bank Corp., provided that (i) PFPC
gives the Fund thirty (30) days' prior written notice; (ii) the delegate (or
assignee) agrees with PFPC and the Fund to comply with all relevant provisions
of the 1940 Act; and (iii) PFPC and such delegate (or assignee) promptly provide
such information as the Fund may request, and respond to such questions as the
Fund may ask, relative to the delegation (or assignment), including (without
limitation) the capabilities of the delegate (or assignee).
20. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
18
<PAGE> 19
21. FURTHER ACTIONS. Each party agrees to perform such further
acts and execute such further documents as are necessary to effectuate the
purposes hereof.
22. MISCELLANEOUS.
(a) Entire Agreement. This Agreement embodies the entire
agreement and understanding between the parties and supersedes all prior
agreements and understandings relating to the subject matter hereof, provided
that the parties may embody in one or more separate documents their agreement,
if any, with respect to delegated duties and Oral Instructions.
(b) Captions. 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.
(c) Governing Law. This Agreement shall be deemed to be a
contract made in Delaware and governed by Delaware law, without regard to
principles of conflicts of law.
(d) Partial Invalidity. If any provision of this
Agreement shall be held or made invalid by a court decision,
19
<PAGE> 20
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby.
(e) Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
(f) Facsimile Signatures. The facsimile signature of any party
to this Agreement shall constitute the valid and binding execution hereof by
such party.
(g) Limitations on the Obligation of the Fund. The obligations
of the Fund are not binding upon any of the Trustees, shareholders, officers,
employees or agents of the Fund or its Portfolios individually but are binding
only upon the assets and property of the Fund and the Portfolios, provided that
no obligation hereunder shall be binding upon
20
<PAGE> 21
the assets and property of any portfolio of the Fund not listed on Exhibit A.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first above written.
PFPC INC.
By:
------------------------------
Title:
---------------------------
THE HAVEN CAPITAL MANAGEMENT TRUST
By:
------------------------------
Title:
---------------------------
21
<PAGE> 22
EXHIBIT A
Portfolios
THIS EXHIBIT A, dated as of June 17, 1994, is Exhibit A to
that certain Administration and Accounting Services Agreement dated as of June
17, 1994 between PFPC Inc. and The Haven Capital Management Trust. This Exhibit
A shall supersede all previous forms of Exhibit A.
The Haven Fund
PFPC INC.
By:
--------------------------
Title:
-----------------------
THE HAVEN CAPITAL MANAGEMENT TRUST
By:
--------------------------
Title:
-----------------------
22
<PAGE> 23
AUTHORIZED PERSONS APPENDIX
NAME (TYPE) SIGNATURE
Stephen Ely
- ------------------- ---------------------
Colin C. Ferenbach
- ------------------- ---------------------
Denis M. Turko
- ------------------- ---------------------
23
<PAGE> 1
EXHIBIT 99.B9-4
Fee Letter Regarding Administration
and Accounting Services Fees.
June 17, 1994
THE HAVEN CAPITAL MANAGEMENT TRUST
Re: Administration and Accounting Services Fees
Dear Sir/Madam:
This letter constitutes our agreement with respect to compensation to
be paid to PFPC Inc. ("PFPC") for services provided under the terms of an
Administration and Accounting Services Agreement dated June 17, 1994 between you
(the "Fund") and PFPC. Pursuant to paragraph 11 of that Agreement, and in
consideration of the services to be provided to you, you will pay PFPC an annual
administration and accounting fee, to be calculated daily and payable monthly.
You will also reimburse PFPC for its out-of-pocket expenses incurred on behalf
of the Fund, including, but not limited to: postage and mailing, telephone,
telex, federal express and outside independent pricing service charges, and
record retention/storage.
The annual administration and accounting fees shall be an asset based
fee of .10% of the first $200 million of average net assets; .075% of the next
$200 million of average net assets; .05% of the next $200 million of average net
assets; and .03% of the average net assets in excess of $600 million; exclusive
of out-of-pocket expenses.
The minimum monthly fee shall be $8,333 for each portfolio, exclusive
of out-of-pocket expenses.
If PFPC is removed from the administration and accounting services
agreement referenced above, the Fund shall pay any costs of time and material
associated with deconversion.
The fee for the period from the day of the year this Agreement is
entered into until the end of that year shall be prorated according to the
proportion which such period bears to the full annual period.
<PAGE> 2
If the foregoing accurately sets forth our agreement and you intend to
be legally bound thereby, please execute a copy of this letter and return it to
us.
Very truly yours,
PFPC INC.
By:
-----------------------------
Title:
Accepted:
THE HAVEN CAPITAL MANAGEMENT TRUST
By:
------------------------------
Title:
2
<PAGE> 1
EXHIBIT 99.B10-1
Opinion of Debevoise & Plimpton
[Letterhead of Debevoise & Plimpton]
May 25, 1994
The Haven Capital Management Trust
c/o Haven Capital Management, Inc.
655 Third Avenue
New York, New York 10017
HCM Partners, L.P.
c/o Haven Capital Management, Inc.
655 Third Avenue
New York, New York 10017
Dear Sirs:
We have acted as counsel for each of The Haven Capital
Management Trust, a Delaware business trust (the "Trust"), and HCM Partners,
L.P., a New York limited partnership (the "Partnership"), in connection with (i)
the offer by the Trust of an unlimited number of shares of beneficial interest,
par value $.001 per share, of the Trust which have been classified as a series
relating to The Haven Fund (the "Shares") and (ii) a proposed agreement and plan
of exchange (the "Agreement") providing for the transfer of substantially all of
the assets of the Partnership in exchange for Shares (the "Exchange") and the
subsequent
<PAGE> 2
The Haven Capital Management Trust
HCM Partners, L.P. -2- May 25, 1994
distribution of the Shares received in the Exchange to the partners of the
Partnership in exchange for their interests in the Partnership.
In so acting, we have participated in the preparation and
filing of the Trust's Registration Statement on Form N-1A (File Nos. 33-76670
and 811-8428) relating to the Shares filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Act"), on March 18, 1994 and Pre-Effective Amendment No. 1 thereto to be filed
with the Commission on May 25, 1994. The Prospectus included in the Registration
Statement on Form N-1A as amended to date is herein called the "Prospectus." We
have also participated in the preparation and filing of the Trust's Registration
Statement on Form N-14 (File No. 33-76672) relating to the Exchange filed with
the Commission on March 18, 1994, Pre-Effective Amendment No. 1 filed with the
Commission on April 14, 1994 and Pre-Effective Amendment No. 2 to be filed with
the Commission on May 25, 1994. In addition, we have participated in the
preparation of the Agreement (a form of which is filed as Attachment B to the
Registration Statement on Form N-14).
We have also relied upon the originals, or copies certified or
otherwise identified to our satisfaction, of such corporate records, documents,
certificates and other instruments as in our judgment are necessary or
appropriate to enable us to render the opinion expressed below.
We are of the following opinion:
1. The Trust is a business trust duly formed and validly
existing under the laws of the State of Delaware.
2. Assuming the due authorization, execution and delivery of
the Agreement by each of the Trust and the Partnership, and the consummation of
the Exchange provided
<PAGE> 3
The Haven Capital Management Trust
HCM Partners, L.P. -3- May 25, 1994
for therein, the Shares to be issued to the partners of the Partnership upon
consummation of the Exchange will have been duly authorized and, when delivered
in the manner described in the Agreement, will be validly issued, fully paid and
nonassessable by the Trust.
3. Upon the issue of the Shares for cash at net asset value
and receipt by the Trust of the authorized consideration therefor as set forth
in the Prospectus, the Shares so issued in the continuous public offering will
be validly issued, fully paid and nonassessable by the Trust.
Insofar as the above opinion relates to matters governed by
the laws of the State of Delaware, we have relied on the opinion of Richards,
Layton & Finger, dated as of today's date, filed as an Exhibit to each of the
Trust's Registration Statement on Form N-1A and Registration Statement on Form
N-14. The assumptions stated in such opinion are incorporated herein by
reference.
The Trust is an entity of the type commonly called a "Delaware
business trust." The Delaware Business Trust Act provides that a shareholder of
a Delaware business trust shall be entitled to the same limitation of liability
extended to stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware. However, no similar statutory
or other authority limiting business trust shareholder liability exists in many
other states. As a result, to the extent that the Trust or a shareholder is
subject to the jurisdiction of courts in those states, the courts may not apply
Delaware law, and may thereby subject the Trust's shareholders to liability. The
Declaration of Trust states that the Trust's shareholders are entitled to the
same limitation of personal liability extended to shareholders of private
Delaware corporations for profit (subject to the obligation of a shareholder to
make contributions required to be made by the shareholder to the Trust, to make
other payments provided for in the
<PAGE> 4
The Haven Capital Management Trust
HCM Partners, L.P. -4- May 25, 1994
Agreement and to repay any funds wrongfully distributed to a shareholder from
the Trust). The Declaration of Trust contains an express disclaimer of
shareholder liability to third parties for acts or obligations of the Trust and
requires that notice of such disclaimer be given in each agreement, obligation
and instrument entered into as executed by the Trust. The Declaration of Trust
provides for indemnification out of the Trust property of any shareholder held
personally liable for the obligations of the Trust. Thus, the risk of Trust
shareholder liability is limited to circumstances in which (1) a shareholder of
a private Delaware corporation for profit would incur financial loss beyond his
or her investment or (2) a court refused to apply Delaware law, no contractual
limitation of liability was in effect and the Trust itself was unable to meet
its obligations.
We understand that this opinion is to be used in connection
with the registration of the Shares for offering and sale pursuant to the Act.
We consent to the filing of this opinion as an Exhibit to each of the Trust's
Pre-Effective Amendment No. 2 to the Registration Statement on Form N-14 and
Pre-Effective Amendment No. 1 to the Registration Statement on Form N-1A. In
giving such consent, we do not hereby concede that we are within the category of
persons whose consent is required under Section 7 of the Act or the Rules and
Regulations of the Commission thereunder.
Very truly yours,
/s/ Debevoise & Plimpton
<PAGE> 1
EXHIBIT-99.B10-2
OPINION OF RICHARDS,
LAYTON & FINGER
[LETTERHEAD OF RICHARDS, LAYTON & FINGER]
May 25, 1994
The Haven Capital Management Trust HCM Partners, L.P.
c/o Haven Capital Management, Inc. c/o Haven Capital Management, Inc.
655 Third Avenue 655 Third Avenue
New York, New York 10017 New York, New York 10017
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Re: The Haven Capital Management Trust
Gentlemen:
We have acted as special Delaware counsel for The Haven
Capital Management Trust, a Delaware business trust (the "Trust"), in connection
with the matters set forth herein. At your request, this opinion is being
furnished to you.
<PAGE> 2
The Haven Capital Management Trust
HCM Partners, L.P.
Debevoise & Plimpton
May 25, 1994
Page 2
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of executed or
conformed counterparts, or copies proved to our satisfaction, of the following:
(a) The Certificate of Trust of the Trust, dated March 17,
1994 (the "Certificate"), as filed in the office of the Secretary of State of
the State of Delaware (the "Secretary of State") on March 17, 1994;
(b) The Agreement and Declaration of Trust of the Trust, dated
as of March 17, 1994 (the "Agreement");
(c) The By-Laws of the Trust, as adopted on March 17, 1994
(the "By-Laws");
(d) A registration statement (the "N14 Initial Registration
Statement") on Form N-14 (Registration No. 33-76672), filed by the Trust with
the Securities and Exchange Commission (the "SEC") on March 18, 1994, as amended
by Pre-Effective Amendment No. 1 to the N14 Initial Registration Statement,
filed by the Trust with the SEC on April 14, 1994 ("N14 Amendment No. 1"), and
by Pre-Effective Amendment No. 2 to the N14 Initial Registration Statement,
including a related preliminary prospectus/proxy statement (the "N14
Prospectus"), filed by the
<PAGE> 3
The Haven Capital Management Trust
HCM Partners, L.P.
Debevoise & Plimpton
May 25, 1994
Page 3
Trust with the SEC on May 25, 1994 ("N14 Amendment No. 2") (the N14 Initial
Registration Statement as amended by N14 Amendment No. 1 and N14 Amendment
No. 2 being hereinafter referred to as the "N14 Registration Statement");
(e) A registration statement (the "N1A Initial Registration
Statement") on Form N-1A (Registration Nos. 33-76670 and 811-8428), filed by the
Trust with the SEC on March 18, 1994, as amended by Pre-Effective Amendment No.
1 to the N1A Initial Registration Statement, including a related preliminary
prospectus (the "N1A Prospectus"), filed by the Trust with the SEC on May 25,
1994 ("N1A Amendment No. 1") (the N1A Initial Registration Statement as amended
by N1A Amendment No. 1 being hereinafter referred to as the "N1A Registration
Statement");
(f) The Minutes of the Special Meeting of the Trustees of the
Trust that was held on May 19, 1994 (the "Minutes");
(g) A form of Agreement and Plan of Exchange (the "Plan of
Exchange"), attached as Attachment "B" to the N14 Prospectus; and
(h) A Certificate of Good Standing for the Trust, dated May
25, 1994, obtained from the Secretary of State.
<PAGE> 4
The Haven Capital Management Trust
HCM Partners, L.P.
Debevoise & Plimpton
May 25, 1994
Page 4
Initial capitalized terms used herein and not otherwise
defined are used as defined in the Agreement.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed above, and we have assumed that there
exists no provision in any document not listed above the bears upon or is
inconsistent with the opinions stated herein. We have conducted no independent
factual investigation of our own, but rather have relied solely upon the
foregoing documents, the statements and information set forth therein and the
additional matters recited or assumed herein, all of which we have assumed to be
true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed
that (i) all signatures on documents examined by us are genuine, (ii) all
documents submitted to us as originals are authentic, and (iii) all documents
submitted to us as copies conform with the original copies of those documents.
For purposes of this opinion, we have assumed (i) the due
authorization, execution and delivery by all parties thereto of all documents
examined by us, (ii) that the Agreement, the By-Laws and the Minutes constitute
the entire agreement among the parties thereto with respect to the subject
matter thereof, including with respect to the
<PAGE> 5
The Haven Capital Management Trust
HCM Partners, L.P.
Debevoise & Plimpton
May 25, 1994
Page 5
admission of beneficial owners to, and the creation, operation and termination
of, the Trust, and that the Agreement, the By-Laws, the Minutes and the
Certificate are in full force and effect, have not been amended and no amendment
of the Agreement, the By-Laws, the Minutes or the Certificate is pending or has
been proposed, (iii) except for the valid existence in good standing of the
Trust as a business trust under the Delaware Business Trust Act (12 Del.C.
Section 3801, et seq.) (the "Act"), the valid existence in good standing of each
party to the documents examined by us under the laws of the jurisdiction
governing its organization or formation, and the capacity of Persons who are
parties to the documents examined by us, (iv) that the Exchange (as defined in
the N14 Prospectus) has been consummated, (v) that the Amendment (as defined in
the N14 Prospectus) has been accomplished in accordance with, and was permitted
by, the relevant provisions of the Limited Partnership Agreement of HCM
Partners, L.P., a New York limited partnership (the "Partnership"), and
applicable law, and (vi) that all actions contemplated by the Plan of Exchange
have been accomplished in accordance with the Plan of Exchange, including the
distribution by the Partnership to the partners of the Partnership as of the
Exchange Date (as defined in the Plan of Exchange) (the "Partner Shareholders")
of beneficial interests in the Trust (the "Partner Shares"). We have not
<PAGE> 6
The Haven Capital Management Trust
HCM Partners, L.P.
Debevoise & Plimpton
May 25, 1994
Page 6
participated in the preparation of the N14 Registration Statement or the N1A
Registration Statement and assume no responsibility for their contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such
questions of law and statutes of the State of Delaware as we have considered
necessary or appropriate, and subject to the assumptions, qualifications,
limitations and exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in
good standing as a business trust under the Act.
2. Assuming (i) the due acceptance by the Trustees of an
appropriate instrument for beneficial interests in the Trust (the "Public
Shares") (the Public Shares and the Partner Shares being hereinafter jointly
referred to as the "Shares") from each of the Persons who subscribe for Public
Shares in the offering
<PAGE> 7
The Haven Capital Management Trust
HCM Partners, L.P.
Debevoise & Plimpton
May 25, 1994
Page 7
described in the N1A Prospectus (the "Public Shareholders") (the Public
Shareholders and the Partner Shareholders being hereinafter jointly referred to
as the "Shareholders") and the due acceptance by the Trustees of the
Shareholders as beneficial owners of the Trust, (ii) the payment by each of the
Shareholders to the Trust of the full consideration due from it for the Shares
acquired by it, (iii) that the books and records of the Trust set forth all
information required by the Agreement and the Act, including all information
with respect to all Persons who are to be Shareholders and their contributions
to the Trust, and (iv) that the Shares are offered and sold as described in the
N14 Registration Statement or the N1A Registration Statement, as the case may
be, and the Agreement, the Shares to be issued to the Shareholders will be
validly issued and will represent fully paid and nonassessable beneficial
interests in the Trust, and the Shareholders shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit (subject to the obligation of a Shareholder to make
contributions required to be made by it to the Trust, to make other payments
provided for in the Agreement and to repay any funds wrongfully distributed to
it from the Trust), and the Shareholders will be beneficial owners of the Trust,
entitled to all of the benefits of beneficial owners to the extent permitted
under the Act.
<PAGE> 8
The Haven Capital Management Trust
HCM Partners, L.P.
Debevoise & Plimpton
May 25, 1994
Page 8
We understand that Debevoise & Plimpton will rely as to
matters of Delaware law upon this opinion in connection with an opinion to be
rendered by it to the Trust and filed by it with the SEC as an exhibit to the
N14 Registration Statement and the N1A Registration Statement in connection with
the filing by the Trust of the N14 Registration Statement and the N1A
Registration Statement under the Securities Act of 1933, as amended (the
"Securities Act"). In connection with such opinion, we hereby consent to
Debevoise & Plimpton relying as to matters of Delaware law upon this opinion and
attaching a copy of this opinion to its opinion. We also consent to the Trust
relying as to matters of Delaware law upon this opinion in connection with its
filing of the N14 Registration Statement and the N14 Registration Statement
under the Securities Act. We hereby consent to the use of our name under the
heading "Legal Matters" in the N14 Prospectus. In giving the foregoing consent,
we do not thereby admit that we come within the category of persons whose
consent is required under Section 7 of the Securities Act, or the rules and
regulations of the SEC thereunder.
<PAGE> 9
The Haven Capital Management Trust
HCM Partners, L.P.
Debevoise & Plimpton
May 25, 1994
Page 9
Except as stated above, without our prior consent, this opinion may not be
furnished or quoted to, or relied upon by, any other person or entity for any
purpose.
Very truly yours,
/s/ Richards, Layton & Finger
<PAGE> 1
EXHIBIT-99.B11
Consent of Independent
Accountants
EXHIBIT 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in Post-Effective Amendment No. 8
under the Securities Act of 1933, as amended, to the Registration Statement of
the Haven Capital Management Trust comprised of The Haven Fund on Form N-1A
(File No. 33-76670) of our report dated December 5, 1997 on our audit of the
financial statements and financial highlights of The Haven Capital Management
Trust, which report is included in the Annual Report to Shareholders for the
year ended October 31, 1997 which is incorporated by reference in the
Post-Effective Amendment to the Registration Statement. We also consent to the
reference to our Firm under the headings "Financial Highlights" and "The
Exchange" in the Prospectus and "Auditors and Counsel" and "Financial
Statements" in the Statement of Additional Information.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
February 26, 1998
<PAGE> 1
EXHIBIT 99.B13
Subscription
Agreement
SUBSCRIPTION AGREEMENT
The Haven Capital Management Trust, a Delaware business trust
(the "Trust"), and Haven Capital Management, Inc., a Delaware corporation
("Haven"), agree with each other as follows:
1. Proposed Registration of Shares. The Trust proposes to
issue and sell to the public an indefinite number of shares of beneficial
interest ("Shares") of the Haven Fund (the "Fund"), constituting the initial
series of the Trust, pursuant to a Registration Statement on Form N-1A (the
"Registration Statement") filed with the Securities and Exchange Commission. In
order to provide the Fund with a net worth of at least $100,000 as required by
Section 14 of the Investment Company Act of 1940, as amended, the Trust hereby
offers the Adviser 10,000 Shares of the Fund at a price of $10.00 per Share for
purchase prior to the effective date of the Registration Statement.
2. Purchase of Shares. Haven agrees to purchase 10,000 Shares
of the Fund at a purchase price of $10.00 per Share. Haven will make payment for
such Shares to be purchased by it on a date specified by the Trust prior to the
effective date of the Registration Statement.
3. Purchase of Investment. Haven represents and warrants to
the Trust and the Fund that such Shares are being acquired by it for investment
and not with a view to the resale or distribution thereof.
IN WITNESS WHEREOF, the parties hereto have set their hands as
of the 19th day of May, 1994.
The Haven Capital Management Trust
By /s/ Colin C. Ferenbach
----------------------------------
President
Haven Capital Management, Inc.
By /s/ Denis M. Turko
---------------------------------
Chairman
<PAGE> 1
EXHIBIT 99.B15
Distribution Plan
THE HAVEN CAPITAL MANAGEMENT TRUST
and
THE HAVEN FUND
AMENDED AND RESTATED
DISTRIBUTION PLAN
DISTRIBUTION PLAN, as of May 19, 1994, of The Haven Capital
Management Trust, a Delaware business trust (the "Trust") on behalf of The Haven
Fund (the "Fund"), constituting the initial series of the Trust.
W I T N E S S E T H:
WHEREAS, the Trust has been organized to operate as an
open-end management investment company and is registered under the Investment
Company Act of 1940 (collectively with the rules and regulations promulgated
thereunder, the "1940 Act"); and
WHEREAS, the Trust intends to distribute the shares of
beneficial interest (par value $0.001 per share) of the Fund (the "Shares") in
accordance with Rule 12b-1 under the 1940 Act ("Rule 12b-1"), and desires to
adopt this Distribution Plan (the "Plan") as a plan of distribution pursuant to
such Rule; and
WHEREAS, the Trust desires to engage Sunstone Financial Group,
Inc., a Wisconsin corporation (the "Distributor"), to provide certain
distribution services for the Trust; and
WHEREAS, the Trust desires to enter into a distribution
agreement (in such form as may from time to time be approved by the Trustees of
the Trust in the manner specified in Rule 12b-1 (the "Distribution Agreement"))
with the Distributor, whereby the Distributor will provide facilities
<PAGE> 2
and personnel and render services to the Trust in connection with the offering
and distribution of the Shares; and
WHEREAS, the Trustees, in considering whether the Trust should
adopt and implement this Plan, have evaluated such information as they deemed
necessary to an informed determination as to whether this Plan should be adopted
and implemented and have considered such pertinent factors as they deemed
necessary to form the basis for a decision to use assets of the Fund for such
purposes, and have determined that there is a reasonable likelihood that the
adoption and implementation of this Plan will benefit each Series and its
shareholders.
NOW, THEREFORE, the Trustees hereby adopt this Plan for the
Trust as a plan of distribution in accordance with Rule 12b-1, on the following
terms and conditions:
1. The Distributor shall perform such services and bear such
costs as shall be specified in a Distribution Agreement approved by a majority
of all the Trustees and of the Trustees who are not "interested persons" of the
Trust or Fund and who have no direct or indirect financial interest in the
operation of the Plan or in any agreements related to the Plan (the "Qualified
Trustees").
2. The proper officers of the Trust may authorize the direct
or indirect use of the Fund's property to finance additional activity which is
primarily intended to result in the sale of Shares ("Additional Sales
Activity"). Expenses attributable to such Additional Sales Activity may include,
without limitation, the cost of printing sales literature and prospectuses for
persons other than then-current shareholders and the cost of mailing such
materials in circumstances in which the Distributor will not incur such mailing
costs.
3. The expenditures to made be by the Fund in connection with
fees paid to the Distributor and Additional Sales Activity shall be determined
by the Trust, provided
2
<PAGE> 3
that the Trust shall not make payments either to the Distributor or to any other
person for activities constituting Additional Sales Activities if such payments
in the aggregate exceed 0.25% of the Fund's average daily net asset value per
annum (determined in accordance with the Fund's prospectus and the Rules of Fair
Practice of the National Association of Securities Dealers, Inc.). No portion of
any expense incurred in any plan year that is subject to the annual cap set
forth in the preceding sentence may be carried over to any subsequent plan year.
4. Nothing herein contained shall be deemed to require the
Trust to take any action contrary to the Agreement and Declaration of Trust of
the Trust or By-Laws of the Trust or any applicable statutory or regulatory
requirement to which it is subject or by which it is bound, or to relieve or
deprive the Trustees of the responsibility for and control of the conduct of the
affairs of the Trust.
5. This Plan shall become effective upon (a) approval by a
vote of at least a "majority of the outstanding voting securities" of the Fund,
and (b) approval by a vote of the Trustees and of the Qualified Trustees, such
votes to be cast in person at a meeting called for the purpose of voting on this
Plan.
6. This Plan shall continue in effect indefinitely; provided,
however, that such continuance is subject to annual approval by a vote of the
Trustees and of the Qualified Trustees, such votes to be cast in person at a
meeting called for the purpose of voting on continuance of this Plan. If such
annual approval is not obtained, this Plan shall expire on the date which is 15
months after the date of the last approval.
7. This Plan may be amended at any time by the Trustees,
provided that (a) any amendment to increase materially the amount to be expended
from the assets of the Fund for the services described herein shall be effective
only upon approval by a vote of a "majority of the out-
3
<PAGE> 4
standing voting securities" of the Fund, and (b) any material amendment of this
Plan shall be effective only upon approval by a vote of the Trustees and of the
Qualified Trustees, such votes to be cast in person at a meeting called for the
purpose of voting on such amendment. This Plan may be terminated at any time by
a vote of a majority of the Qualified Trustees or by a vote of a "majority of
the outstanding voting securities" of the Fund.
8. The officers of the Trust shall provide the Trustees, and
the Trustees shall review, at least quarterly, a written report of the amounts
expended under this Plan and the purposes for which such expenditures were made.
9. While this Plan is in effect, the selection and nomination
of those trustees who are not "interested persons" of the Trust shall be
committed to the discretion of such disinterested Trustees.
10. For the purposes of this Plan, the terms "interested
persons" and "majority of the outstanding voting securities" are used as defined
in the 1940 Act.
11. The Trust shall preserve copies of this Plan, and each
agreement related hereto and each report referred to in paragraph 8 hereof
(collectively, the "Records") for a period of six years from the end of the
fiscal year in which such Record was made, and each such Record shall be kept in
an easily accessible place for the first two years of said record-keeping.
12. This Plan shall be construed in accordance with the laws
of the State of New York and the applicable provisions of the 1940 Act.
4
<PAGE> 5
13. If any provision of this Plan shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Plan shall not be affected thereby.
Amended June 22, 1995
5
<PAGE> 1
EXHIBIT 99.B16
Performance
Quotations
CUMULATIVE TOTAL RETURN (assuming NO SALES LOAD)
June 23, 1994 (Inception) through October 31, 1997
--------------------
ERV
Formula: T = (-----) - 1
P
Where:
P = a hypothetical initial payment of $1,000
made on June 23, 1994, commencement of the
Fund
T = Cumulative total return
ERV = Ending Redeemable Value of a hypothetical
$1,000 payment made at the beginning of the
period, assuming NO sales load.
P = $1,000
ERV = $1,939.88
CUMULATIVE TOTAL RETURN =
93.89%
<PAGE> 1
EXHIBIT 16
AVERAGE ANNUAL TOTAL RETURNS FOR THE FUND
AND THE PARTNERSHIP (assuming NO SALES LOAD)
--------------------
For the year ended October 31, 1997
ERV
Formula: T = (------) - 1
P
Where:
P = a hypothetical initial payment of $1,000 made on
November 1, 1996
T = Average annual total return
ERV = Ending Redeemable Value of a hypothetical $1,000
payment made at the beginning of the period,
assuming NO sales load.
P = $1,000
ERV = $1,249.04
AVERAGE ANNUAL TOTAL RETURN =
24.90%
2
<PAGE> 2
EXHIBIT 16
AVERAGE ANNUAL TOTAL RETURNS FOR THE FUND
AND THE PARTNERSHIP (assuming NO SALES LOAD)
--------------------
For the five years ended October 31, 1997
5
Formula: P(1 + T) = ERV
Where:
P = a hypothetical initial payment of $1,000 made on
November 1, 1992
T = Average annual total return
ERV = Ending Redeemable Value of a hypothetical $1,000
payment made at the beginning of the period,
assuming NO sales load.
P = $1,000
ERV = $2,250.75
AVERAGE ANNUAL TOTAL RETURN =
17.62%
3
<PAGE> 3
EXHIBIT 16
AVERAGE ANNUAL TOTAL RETURNS FOR THE FUND
AND THE PARTNERSHIP (assuming NO SALES LOAD)
--------------------
For the ten years ended October 31, 1997
10
Formula: P(1+T) = ERV
Where:
P = a hypothetical initial payment of $1,000 made on
November 1, 1987
T = Average annual total return
ERV = Ending Redeemable Value of a hypothetical $1,000
payment made at the beginning of the period,
assuming NO sales load.
P = $1,000
ERV = $4,289.56
AVERAGE ANNUAL TOTAL RETURN =
15.68%
4
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 58249264
<INVESTMENTS-AT-VALUE> 85179808
<RECEIVABLES> 1684353
<ASSETS-OTHER> 125147
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 86989308
<PAYABLE-FOR-SECURITIES> 2075794
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 144938
<TOTAL-LIABILITIES> 2220732
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 49847598
<SHARES-COMMON-STOCK> 5356231
<SHARES-COMMON-PRIOR> 4778502
<ACCUMULATED-NII-CURRENT> 217521
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 7774766
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 26928691
<NET-ASSETS> 84768576
<DIVIDEND-INCOME> 1028495
<INTEREST-INCOME> 362925
<OTHER-INCOME> 239017
<EXPENSES-NET> 1024389
<NET-INVESTMENT-INCOME> 606048
<REALIZED-GAINS-CURRENT> 7911410
<APPREC-INCREASE-CURRENT> 8411721
<NET-CHANGE-FROM-OPS> 16929179
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 542627
<DISTRIBUTIONS-OF-GAINS> 6502581
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 527437
<NUMBER-OF-SHARES-REDEEMED> 273510
<SHARES-REINVESTED> 323802
<NET-CHANGE-IN-ASSETS> 17672875
<ACCUMULATED-NII-PRIOR> 91148
<ACCUMULATED-GAINS-PRIOR> 6428889
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 463570
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1024389
<AVERAGE-NET-ASSETS> 77261644
<PER-SHARE-NAV-BEGIN> 14.04
<PER-SHARE-NII> .06
<PER-SHARE-GAIN-APPREC> 3.13
<PER-SHARE-DIVIDEND> .05
<PER-SHARE-DISTRIBUTIONS> 1.35
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.83
<EXPENSE-RATIO> 1.33
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
