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File No. 333-03531
811-07585
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. 1 [X]
Post-Effective Amendment No. __ [_]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 1 [X]
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WWW TRUST
(formerly named "WWW Internet Fund")
(Exact name of registrant as specified in charter)
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525 Vine Street, Suite 1330, Cincinnati, Ohio 45202
(Address of principal executive offices)
Registrant's Telephone Number: 513-357-8400
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Lawrence S. York, 131 Prosperous Place, Suite 17, Lexington, Kentucky 40509
(Name and address of agent for service)
Copy to:
Michael J. Meaney, Esq.
Benesch, Friedlander, Coplan & Aronoff P.L.L.
2300 BP America Building, 200 Public Square, Cleveland, Ohio 44114
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Approximate date of proposed public offering: As soon as practicable after the
effective date of the Registration Statement.
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, Registrant has
elected to register an indefinite number of shares of beneficial interest. The
amount of the registration fee pursuant to Rule 24f-2 of the Investment Company
Act of 1940 is $500 and the amount of the registration fee pursuant to Rule 8b-6
of the Investment Company Act of 1940 is $1,000.
The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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File No. 333-03531
811-07585
WWW TRUST
FORM N-1A CROSS REFERENCE SHEET
Pursuant to Rule 481(a)
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Item in Part A of Form N-1A Location in Prospectus
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1. Cover Page Cover Page
2. Synopsis Summary of Fund Expenses
3. Condensed Financial Information Not Applicable
4. General Description of Registrant Cover Page; General Information
5. Management of the Fund Management Services
5A. Manager's Discussion of Fund Not Applicable
Performance
6. Capital Stock and Other Securities General Information
7. Purchase of Securities Being Offered How to Buy Shares; Distribution and
Shareholder Servicing Plan
8. Redemption or Repurchase How to Redeem Shares
9. Pending Legal Proceedings Not Applicable
Item in Part B of Form N-1A Location in Statement of Additional
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Information
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10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History General Information; General Information
(Prospectus)
13. Investment Objectives and Policies Investment Objective and Policies
14. Management of the Registrant Management
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15. Control Persons and Principal Trustees and Officers
Holders of Securities
16. Investment Advisory and Other Management
Services
17. Brokerage Allocation Portfolio Transactions; Distribution and
Shareholder Servicing Plan
18. Capital Stock and Other Securities General Information; General Information
(Prospectus)
19. Purchase, Redemption and Pricing of Redemption of Fund Shares; How to Buy
Securities being offered Shares (Prospectus); How to Redeem Shares
(Prospectus); Valuation
20. Tax Status Dividends, Distributions and Taxes
(Prospectus)
21. Underwriters Not Applicable
22. Calculation of Performance Data Not Applicable
23. Financial Statements Financial Statements
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BY ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
PRELIMINARY PROSPECTUS
SUBJECT TO COMPLETION
WWW INTERNET FUND
525 Vine Street, Suite 1330
Cincinnati, Ohio 45202
Telephone: (513) 357-8400
July ___, 1996
WWW Internet Fund (the "Fund") is a mutual fund which invests to
produce long term growth through capital appreciation. The Fund invests
primarily in equity securities of companies that are designing, developing or
manufacturing hardware or software products or services for the Internet and/or
the World Wide Web. Investment advisory and management services are provided to
the Fund by WWW Advisors, Inc. (the "Manager"). For a description of the Fund's
investment objective and policies, including the risk factors associated with an
investment in the Fund, see "Investment Objective, Policies And Risks." There
can be no assurance that the Fund's investment objective will be achieved.
Shares of the Fund are subject to a 1% contingent redemption fee imposed on
redemptions made within one year of the date of purchase.
This Prospectus sets forth concisely the information a prospective
investor should know about the Fund before investing. Please read it carefully
before you invest and keep it for future reference. Additional information about
the Fund, including a Statement of Additional Information, has been filed with
the Securities and Exchange Commission. The Statement of Additional Information
is available upon request and without charge by calling or writing the Fund at
the telephone number or the address set forth above. The Statement of Additional
Information is dated the same date as this Prospectus and is incorporated herein
by reference in its entirety.
SHARES IN THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND SHARES ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR
ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISK,
INCLUDING THE LOSS OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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TABLE OF CONTENTS
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PAGE
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Summary of Fund Expenses...................................................................................... 3
Investment Objective, Policies and Risks...................................................................... 5
Management Services........................................................................................... 7
How to Buy Shares............................................................................................. 11
How to Redeem Shares.......................................................................................... 14
Distribution and Shareholder Servicing Plan................................................................... 16
Dividends, Distributions and Taxes............................................................................ 16
Systematic Investment Plan.................................................................................... 17
Advertising the Fund's Performance............................................................................ 18
General Information........................................................................................... 18
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SUMMARY OF FUND EXPENSES
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SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases (as a percentage of
offering price)..................................................................................... None
Redemption Fee (as a percentage of the amount
subject to charge).................................................................................. 1.00%
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
Management Fees (after fee waiver)*................................................................. .75%**
12b-1 Fees***....................................................................................... .50%
Other Expenses*..................................................................................... 1.25%
Total Fund Operating Expenses (after fee waiver)*................................................... 2.50%
EXAMPLE
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at the end of each time period:
1 YEAR............................................................................................. $35
3 YEARS............................................................................................ $78
EXAMPLE
You would pay the following expenses on the same investment, assuming
no redemption:
1 YEAR............................................................................................. $25
3 YEARS............................................................................................ $78
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* Based on estimated expenses for the current fiscal year. The Manager
has undertaken, until such time as it gives investors 60 days notice to
the contrary, to waive its investment advisory fee to the extent
Total Fund Operating Expenses (other than interest, taxes, brokerage
fees and extraordinary items) exceed 2.50%, except that the amount of
such obligation will not exceed the amount of fees received by the
Manager for the applicable period. Without such waiver, Management
Fees stated above would be 1.00%, Other Expenses would be 1.25% and
Total Fund Operating Expenses would be 2.75%.
** The Management Fee is payable at an annual rate equal to 1% of the Fund's average daily
net assets, subject to increase or decrease by up to 0.50% annually depending on the
Fund's performance. See "Management Services."
*** Pursuant to the Rules of the National Association of Securities
Dealers, Inc., the aggregate annual distribution fees on shares of the
Fund may not exceed 6.25% of total gross sales, subject to certain
exclusions. The 6.25% limitation is imposed on the Fund rather than on
a per shareholder basis. Therefore, a long-term shareholder of the Fund
may pay more
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in distribution fees than the economic equivalent of 6.25% of such
shareholder's investment in such shares.
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR
LESS THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5%
ANNUAL RETURN, THE FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT
IN AN ACTUAL RETURN GREATER OR LESS THAN 5%.
The purpose of the foregoing table is to assist you in understanding
the various costs and expenses that investors will bear, directly or
indirectly, the payment of which will reduce investors' return on an
annual basis. Other Expenses and Total Fund Operating Expenses are
based on estimated amounts for the current fiscal year. In addition to
the expenses noted above, the Fund will charge $15.00 for each wire
redemption. See "How to Redeem Shares." For a further description of
the various costs and expenses incurred in the Fund's operation, as
well as expense reimbursement or waiver arrangements, see "Management
Services."
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INVESTMENT OBJECTIVE, POLICIES AND RISKS
WWW Internet Fund is a mutual fund whose investment objective is long
term growth through capital appreciation. Investing for capital appreciation
ordinarily exposes capital to added risk. Shares of the Fund are intended for
you only if you are able and willing to take such risk. There can be no
assurance that the Fund's investment objective will be attained.
The Fund will seek to achieve its objective by investing primarily
(under normal conditions, at least 70% of its total assets) in equity securities
of companies that are designing, developing or manufacturing hardware or
software products or services for the Internet and/or World Wide Web. The Fund
will strive to achieve a balanced mix of mature companies (large, established
companies that have successfully implemented Internet strategies), mid-life
companies (companies which have captured a leadership position in an established
sector of the Internet industry) and adolescent companies (IPO's and small,
growing companies that are experiencing unprecedented valuations and are
expected to achieve leadership in emerging market segments in the Internet
industry). Generally, the Fund will attempt to achieve a balance of the
following approximate percentages of its assets which are invested in Internet
companies: mature companies, 50%; mid-life companies, 25%; and adolescent
companies, 25%; however, the Fund has the discretion to alter these percentages
from time to time as market conditions may warrant. Nevertheless, all securities
of companies in the Internet industry are subject to the risk factors described
below.
The Internet is a world-wide network of computers designed to permit
users to share information and transfer data quickly and easily. The World Wide
Web ("WWW"), which is a means of graphically interfacing with the Internet, is a
hyper-text based publishing medium containing text, graphics, interactive
feedback mechanisms and links within WWW documents and to other WWW documents.
The Manager believes that the Internet is the emerging frontier interlinking
computers, telecommunications and broadcast. Consequently, there are
opportunities for continued growth in demand for components, products, media,
services, and systems to assist, facilitate, enhance, store, process, record,
reproduce, retrieve and distribute information, products and services for use by
businesses, institutions and consumers. Companies engaged in these efforts are
the central focus of the Fund. However, older technologies such as telephone,
broadcast, cable, pc video, print and photography may also be represented when
the Manager believes that these companies may successfully integrate existing
technology with new emerging technologies. Sectors identified for investment
include, but are not limited to: servers, routers, search engines, bridge and
switches, browsers, network applications, agent software, modems, carriers,
firewall and security, e-mail, electronic commerce, video and publishing.
Equity securities consist of common stocks, convertible securities and
preferred stocks. The convertible securities and preferred stocks in which the
Fund may invest will be rated at least investment grade by a nationally
recognized statistical rating organization at the time of purchase. Convertible
securities rated in the lowest investment grade rating may be considered to have
speculative characteristics. The Fund may invest, in anticipation of investing
cash positions, in money market instruments consisting of U.S. Government
securities, certificates of deposit, time deposits, bankers' acceptances,
short-term investment grade corporate bonds and other short-term
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debt instruments, and repurchase agreements, as set forth in the Appendix. Under
normal market conditions, the Fund expects to have less than 15% of its assets
invested in money market instruments. However, when the Manager determines that
adverse market conditions exist, the Fund may adopt a temporary defensive
posture and invest all of its assets in money market instruments.
RISKS. The value of Fund shares may be susceptible to factors affecting
the industries described above. These industries may be subject to greater
governmental regulation than many other industries and changes in governmental
policies and the need for regulatory approvals may have a material effect on the
products and services of these industries. In addition, because of its narrow
industry focus, the Fund's performance is closely tied to, and affected by,
these industries. Companies in an industry are often faced with the same
obstacles, issues or regulatory burdens, and their securities may react
similarly and move in unison to these and other market conditions. As a result
of these factors, securities in which the Fund will invest are more volatile
than securities of companies in other industries.
Finally, competitive pressures and changing demand may have a
significant effect on the financial condition of companies in these industries.
Such companies spend heavily on research and development and are especially
sensitive to the risk of product obsolescence.
Although securities of large and well-established companies in the
information technology industries will be held in the Fund's portfolio, the Fund
also will invest in medium, small and/or newly-public companies which may be
subject to greater share price fluctuations and declining growth, particularly
in the event of rapid changes in technology and/or increased competition.
Securities of those smaller and/or less seasoned companies may therefore expose
shareholders of the Fund to above-average risk.
The Fund also may invest in warrants, foreign securities and illiquid
securities. For a discussion of these investments and their related risks, see
the Appendix to this Prospectus.
INVESTMENT TECHNIQUES. The Fund may engage in various investment
techniques, such as short selling, purchasing put and call options, and lending
portfolio securities, each of which involves risk. For a discussion of these and
other investment techniques and their related risks, see the Appendix to this
Prospectus.
CHANGES IN INVESTMENT POLICIES. Except as noted below, the foregoing
investment policies are not fundamental and the Fund's Board of Trustees may
change such policies without the vote of a majority of the Fund's outstanding
voting securities. The Board will not change the Fund's investment objective of
seeking to produce capital appreciation without such a vote. A more detailed
description of the Fund's investment policies, including a list of those
restrictions on the Fund's investment activities which cannot be changed without
such a vote, appears in the Statement of Additional Information.
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MANAGEMENT SERVICES
THE MANAGER. The Board of Trustees provides broad supervision over the
affairs of the Fund. Pursuant to a Management Agreement between the Fund and WWW
Advisors, Inc. (the "Manager") and subject to the authority of the Board of
Trustees, the Manager manages the investments of the Fund and is responsible for
the overall management of the business affairs of the Fund. The address of the
Manager is 131 Prosperous Place, Suite 17, Lexington, Kentucky 40509. The
Manager has no previous experience in advising a mutual fund.
The Manager was founded in April 1996 by Lawrence S. York and James D.
Greene. Mr. York, the Chairman of the Board and President of the Fund, is the
Chairman of the Board and President of the Manager and owns 31.25% of its
outstanding shares. Mr. York also is President of Capital Advisors Group, Inc. a
financial planning and investment advisory firm and President of R H York &
Company, Inc., a registered NASD broker dealer. Mr. York and these companies
provide investment management advice to individual, business and institutional
accounts having an aggregate value of more than $50 million. Mr. York is a
co-portfolio manager of the Fund, responsible for fundamental financial
research. Mr. York holds a B.A. degree from Berea College and an M.B.A. degree
from the University of Kentucky.
Mr. Greene, the Vice President, Secretary and Treasurer of the Fund, is
the Executive Senior Vice President of the Manager and owns 31.25% of its
outstanding shares. Since 1991 Mr. Greene has been a marketing strategist with
Lexmark International, Inc., a manufacturer of network personal computer and
office electronics, and previously held marketing and strategist positions with
other computer companies such as Tandy, Computerland and Texas Instruments. Mr.
Greene is a co-portfolio manager of the Fund, responsible for providing the Fund
with technology assessments and for identifying promising internet technology
companies for purchase by the Fund. Mr. Greene holds a B.A. degree from the
University of Kentucky.
MANAGEMENT FEES. Under the terms of the Management Agreement, the Fund
has agreed to pay the Manager a base monthly management fee at the annual rate
of 1.00% of the Fund's average daily net assets (the "Base Fee") which will be
adjusted monthly (the "Monthly Performance Adjustment") depending on the extent
by which the investment performance of the Fund, after expenses, exceeded or was
exceeded by the percentage change of the S&P 500 Index. Under terms of the
Management Agreement, the monthly performance adjustment may increase or
decrease the total management fee payable to the Manager (the "Total Management
Fee") by up to .50% per year of the value of the Fund's average daily net
assets.
The monthly Total Management Fee is calculated as follows: (a)
one-twelfth of 1.0% annual Base Fee rate (0.083%) is applied to the Fund's
average daily net assets over the most recent calendar month, giving a dollar
amount which is the Base Fee for that month; (b) one-twelfth of the applicable
performance adjustment rate from the table below is applied to the Fund's
average daily net assets over the most recent calendar month, giving a dollar
amount
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which is the Monthly Performance Adjustment (for the first twelve-month period
no performance adjustment will be made); and (c) the Monthly Performance
Adjustment is then added to or subtracted from the Base Fee and the result is
the amount payable by the Fund to the Manager as the Total Management Fee for
that month.
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The full range of Total Management Fee on an annualized basis is as
follows:
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PERCENTAGE POINT DIFFERENCE BETWEEN FUND
PERFORMANCE (NET OF EXPENSES INCLUDING PERFORMANCE
ADVISORY FEES) AND PERCENTAGE CHANGE IN ADJUSTMENT
THE S&P 500 INDEX BASE FEE (%) RATE (%) TOTAL FEE (%)
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+3.00 percentage points or more............................ 1% .50% 1.50%
+2.75 percentage points or more but less than +3.00
percentage points.......................................... 1% .40% 1.40%
+2.50 percentage points or more but less than +2.75
percentage points.......................................... 1% .30% 1.30%
+2.25 percentage points or more but less than +2.50
percentage points.......................................... 1% .20% 1.20%
+2.00 percentage points or more but less than +2.25
percentage points.......................................... 1% .10% 1.10%
Less than +2.00 percentage points but more than -2.00
percentage points.......................................... 1% 0% 1.00%
- -2.00 percentage points or less but more than -2.25
percentage points.......................................... 1% -.10% .90%
- -2.25 percentage points or less but more than -2.50
percentage points.......................................... 1% -.20% .80%
- -2.50 percentage points or less but more than -2.75
percentage points.......................................... 1% -.30% .70%
- -2.75 percentage points or less but more than -3.00
percentage points.......................................... 1% -.40% .60%
- -3.00 percentage points or less............................ 1% -.50% .50%
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The period over which performance is measured is a rolling twelve-month period
and the performance of the S&P 500 Index is calculated as the sum of the change
in the level of the S&P 500 Index during the period, plus the value of any
dividends or distributions made by the companies whose securities comprise the
S&P 500 Index.
Because the maximum Monthly Performance Adjustment for the Fund applies
whenever the Fund's performance exceeds the S&P 500 Index by 3.00% or more, the
Manager could receive a maximum Monthly Performance Adjustment even if the
performance of the Fund is negative. In 1972, the SEC issued Release No. 7113
under the Investment Company Act (the "Release") to call the attention of
directors and investment advisers to certain factors which must be considered in
connection with investment company incentive fee arrangements. One of these
factors is to "avoid basing significant fee adjustments upon random or
insignificant differences" between the investment performance of a fund and that
of the particular index with which it is being compared. The Release provides
that "preliminary studies (of the SEC staff) indicate that as a 'rule of thumb'
the performance difference should be at least +/-10 percentage points" annually
before the maximum performance adjustment may be made. However, the Release also
states that "because of the preliminary nature of these studies, the Commission
is not recommending, at this time, that any particular performance difference
exist before the maximum
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fee adjustment may be made." The Release concludes that the directors of a fund
"should satisfy themselves that the maximum performance adjustment will be made
only for performance differences that can reasonably be considered significant."
The Board of Trustees has fully considered the Release and believes that the
performance adjustments are entirely appropriate although not within the +/-10
percentage points per year range suggested by the Release.
EXPENSES. All expenses incurred in the operation of the Fund will be
borne by the Fund, except to the extent specifically assumed by the Manager. The
expenses to be borne by the Fund will include: organizational costs, taxes,
interest, brokerage fees and commissions, fees of board members who are not
officers, directors or employees of the Manager or its affiliates, Securities
and Exchange Commission fees, state Blue Sky qualification fees, advisory,
administrative and fund accounting fees, charges of custodians, transfer and
dividend disbursing agents' fees, insurance premiums, industry association fees,
outside auditing and legal expenses, costs of maintaining the Fund's existence,
costs of independent pricing services, costs attributable to investor services
(including, without limitation, telephone and personnel expenses), costs of
shareholders' reports and meetings, costs of preparing and printing prospectuses
and statements of additional information, amounts payable under the Fund's
Distribution and Shareholder Servicing Plan (the "Plan") and any extraordinary
expenses.
The Manager has undertaken, until such time as it gives investors 60
days' notice to the contrary, to waive its Management Fee in the amount, if
any, by which the total expenses of the Fund for any fiscal year, including
amortization of organizational expenses and amounts paid by the Fund under the
Plan, exceed 2.50% of average annual net assets of the Fund, except that the
amount of such fee waiver shall not exceed the amount of fees received by the
Manager under the Management Agreement for such fiscal year. The fee waiver,
if any, will be on a monthly basis, subject to year-end adjustment. Interest
expenses, taxes, brokerage fees and commissions, and extraordinary expenses are
not included as expenses for these purposes.
PORTFOLIO TRANSACTIONS. The Management Agreement recognizes that in the
purchase and sale of portfolio securities, the Manager will seek the most
favorable price and execution, and, consistent with that policy, may give
consideration to the research, statistical and other services furnished by
brokers or dealers to the Manager. The use of brokers who provide investment and
market research and securities and economic analysis may result in higher
brokerage charges than the use of brokers selected on the basis of the most
favorable brokerage commission rates and research and analysis received may be
useful to the Manager in connection with its services to other clients as well
as to the Fund. In over-the-counter markets, orders are placed with responsible
primary market makers unless a more favorable execution or price is believed to
be obtainable.
Consistent with these considerations, the Manager may (i) consider
sales of shares of the Fund as a factor in the selection of brokers or dealers
to execute portfolio transactions for the Fund and (ii) make substantial use of
the brokerage services of RH York & Company, Inc., an affiliate of the Manager.
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PORTFOLIO TURNOVER. A change in securities held by the Fund is known as
"portfolio turnover" which may result in the payment by the Fund of dealer
spreads or underwriting commissions and other transaction costs on the sale of
securities as well as on the reinvestment of the proceeds in other securities.
Although it is the policy of the Fund to hold securities for investment, changes
in the securities held by the Fund will be made from time to time when the
Manager believes such changes will strengthen the Fund's portfolio. It is
estimated that the portfolio turnover of the Fund generally will not exceed
100%.
CUSTODIAN AND TRANSFER AGENT. Star Bank, N.A., 425 Walnut Street, M.L.
6118, P.O. Box 1118, Cincinnati, Ohio 45201-1118 is the Fund's custodian.
American Data Services, Inc., 24 West Carver Street, 2nd Floor, Huntington, New
York 11743 is the Fund's transfer agent and dividend disbursing agent (the
"Transfer Agent").
HOW TO BUY SHARES
GENERAL. The minimum initial investment is $1,000 ($250 for IRA's).
Subsequent investments ordinarily must be at least $100. The Fund reserves the
right to reject any purchase order. The Fund reserves the right to vary or waive
the initial and subsequent investment minimum requirements at any time.
Purchase orders received in proper form before the close of regular
trading on the New York Stock Exchange (currently 4:00 p.m., New York time) on
any day the Fund calculates its net asset value are priced according to the net
asset value determined on that date. Purchase orders received in proper form
after the close of trading on the New York Stock Exchange are priced as of the
time the net asset value is next determined.
INITIAL PURCHASE.
By Mail -- You may purchase shares of the Fund by completing and
signing the application form which accompanies this Prospectus and mailing it,
in proper form, together with a check (subject to the above minimum amounts)
made payable to WWW Internet Fund, and sent to the P.O. Box listed below. If you
prefer overnight delivery, use the overnight address listed below.
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U.S. mail: WWW Internet Fund Overnight: WWW Internet Fund
P.O. Box 640335 c/o Star Bank, N.A.
Cincinnati, Ohio 45264-0335 Mutual Fund Custody Dept.
425 Walnut St. M.L. 6118
Cincinnati, Ohio 45202
</TABLE>
By Wire -- You may also purchase shares of the Fund by wiring federal
funds from your bank, which may charge you a fee for doing so. If money is to be
wired, you must call American Data Services, Inc., the Fund's Transfer Agent, at
(888) 999-8331 to set up your account and obtain an account number. You should
be prepared to provide the information on
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the application form to the Transfer Agent. Then, you should provide your bank
with the following information for purposes of wiring your investment:
Star Bank, N.A. Cinti/Trust
ABA #0420-0001-3
Attn: WWW Internet Fund
D.D.A. # 485777098
Account Name ___________________________________________
(write in account registration name)
For the Account # _____________________________________________
(write in account # assigned by Transfer Agent)
You are required to mail a signed application to the Transfer Agent at the
following address in order to complete your initial wire purchase:
WWW Internet Fund
c/o American Data Services, Inc.
24 West Carver Street, 2nd Floor
Huntington, New York 11743
Wire orders will be accepted only on a day on which the Fund and the Custodian
and Transfer Agent are open for business. A wire purchase will not be considered
made until the wired money is received and the purchase is accepted by the Fund.
Any delays which may occur in wiring money, including delays which may occur in
processing by the banks, are not the responsibility of the Fund or the Transfer
Agent. There is presently no fee for the receipt of wired funds, but the right
to charge shareholders for this service is reserved by the Fund.
ADDITIONAL INVESTMENTS. You may purchase additional shares of the Fund
at any time (minimum of $100) by mail or wire. Each additional mail purchase
request must contain the additional investment portion of your shareholder
statement or a letter containing your name, the name of your account, your
account number and the name of the Fund. Checks should be made payable to WWW
Internet Fund and should be sent to the Custodian as set forth above under
"INITIAL PURCHASE - By Mail". A bank wire should be sent as set forth above
under "INITIAL PURCHASE - By Wire".
PURCHASES THROUGH PROCESSING ORGANIZATIONS. Shares of the Fund may also
be purchased through a "Processing Organization," which is a broker-dealer, bank
or other financial institution that purchases shares for its customers. When
shares are purchased this way, the Processing Organization, rather than its
customer, may be the shareholder of record of the shares. Such shares may be
transferred into the investor's name following procedures established by the
Processing Organization and the Transfer Agent. The minimum initial and
subsequent investments in the Fund for shareholders who invest through a
Processing Organization generally will be set by the Processing Organization.
Processing Organizations may also impose other charges and restrictions in
addition to or different from those applicable to investors who remain the
shareholder of record of their shares. Certain Processing Organizations may
receive
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compensation from the Manager pursuant to the Fund's Distribution and
Shareholder Servicing Plan. An investor contemplating investing with the Fund
through a Processing Organization should read materials provided by the
Processing Organization in conjunction with this Prospectus.
TAX SHELTERED RETIREMENT PLANS. Since the Fund is oriented to longer
term investments, shares of the Fund may be an appropriate investment medium for
tax sheltered retirement plans, including: individual retirement plans (IRAs);
simplified employee pensions (SEPs); 401(k) plans; qualified corporate pension
and profit sharing plans (for employees); tax deferred investment plans (for
employees of public school systems and certain types of charitable
organizations); and other qualified retirement plans. You should contact the
Transfer Agent for the procedure to open an IRA or SEP plan, as well as more
specific information regarding these retirement plan options. Consultation with
an attorney or tax adviser regarding these plans is advisable. Custodial fees
and other processing fees for an IRA will be paid by the shareholder by
redemption of sufficient shares of the Fund from the IRA unless the fees are
paid directly to the IRA custodian. You can obtain information about IRA fees by
calling the Transfer Agent at (888) 999-8331.
AUTOMATIC INVESTMENT OPTION. Please see "SYSTEMATIC INVESTMENT PLAN"
below.
NET ASSET VALUE. Shares of the Fund are sold on a continuous basis. Net
asset value per share is determined as of the close of regular trading on the
floor of the New York Stock Exchange (currently 4:00 p.m., New York time) on
each business day. The net asset value per share of the Fund is computed by
dividing the value of the Fund's net assets by the total number of shares of the
Fund outstanding. The Fund's investments are valued based on market value or,
where market quotations are not readily available, based on fair value as
determined in good faith by, or in accordance with procedures established by,
the Fund's Board of Trustees.
ADDITIONAL INFORMATION. Federal regulations require that investors
provide a certified Taxpayer Identification Number (a "TIN") upon opening or
reopening an account. See "Dividends, Distributions and Taxes." Failure to
furnish a certified TIN to the Fund could subject the investor to a $50 penalty
imposed by the Internal Revenue Service (the "IRS").
Dividends begin to accrue after you become a shareholder. The Fund does
not issue share certificates. All shares are held in non-certificate form
registered on the books of the Fund's Transfer Agent for the account of the
shareholder. The rights to limit the amount of purchases and to refuse to sell
to any person are reserved by the Fund. If your check or wire does not clear,
you will be responsible for any loss incurred. If you are already a shareholder,
the Fund can redeem shares from any identically registered account in the Fund
as reimbursement for any loss incurred. You may be prohibited or restricted from
making future purchases in the Fund.
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HOW TO REDEEM SHARES
GENERAL. Investors may request redemption of Fund shares at any time.
Redemption requests may be made as described below. When a request is received
in proper form, the Fund will redeem the shares at the next determined net asset
value.
The Fund ordinarily will make payment for all shares redeemed within
three days after receipt by the Transfer Agent of a redemption request in proper
form, except as provided by the rules of the Securities and Exchange Commission.
However, if an investor has purchased Fund shares by check and subsequently
submits a redemption request, the redemption proceeds will not be transmitted
until the check used for investment has cleared, which may take up to 15 days.
This procedure does not apply to shares purchased by wire payment.
The Fund reserves the right to redeem investor accounts at its option
upon not less than 60 days' written notice if the account's net asset value is
$1,000 ($250 for IRA's) or less, for reasons other than market conditions, and
remains so during the notice period.
CONTINGENT REDEMPTION FEE. A redemption fee of 1% payable to the Fund
is imposed on any redemption of shares within one year of the date of purchase.
No redemption fee will be imposed to the extent that the net asset value of the
shares redeemed does not exceed (i) the current net asset value of shares
acquired through reinvestment of dividends or capital gain distributions, plus
(ii) increases in the net asset value of an investor's shares above the dollar
amount of all such investor's payments for the purchase of shares held by the
investor at the time of redemption. If the aggregate value of shares redeemed
has declined below their original cost as a result of the Fund's performance,
the applicable redemption fee will be applied to the then-current net asset
value rather than the purchase price.
In determining whether a redemption fee is applicable to a redemption,
the calculation will be made in a manner that results the lowest possible rate.
It will be assumed that the redemption is made first of amounts representing
shares acquired pursuant to the reinvestment of dividends and distributions;
then of amounts representing the increase in net asset value of shares above the
total amount of payments for the purchase of shares made during the preceding
year; then of amounts representing shares purchased more than one year prior to
the redemption; and finally, of amounts representing the cost of shares
purchased within one year prior to the redemption.
REDEMPTION PROCEDURES. Shareholders who wish to redeem shares must do
so through the Transfer Agent by mail or telephone.
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By Mail -- Redemption requests by mail must include your letter of
instruction (including Fund name, account number, account name(s), address and
the dollar amount or number of shares you wish to redeem) and should be
addressed to:
WWW Internet Fund
c/o American Data Services, Inc.
24 West Carver Street, 2nd Floor
Huntington, New York 11743
By Telephone -- Shareholders that have elected the telephone redemption
option on the shareholder application form may make a telephone redemption
request by calling the Transfer Agent at (888) 999-8331. The Transfer Agent may
act on telephone instructions from any person representing himself or herself to
be a shareholder and reasonably believed by the Transfer Agent to be genuine.
The Fund will require the Transfer Agent to employ reasonable procedures, such
as requiring a form of personal identification, to confirm that instructions are
genuine and, if it does not follow such procedures, the Transfer Agent or the
Fund may be liable for any losses due to unauthorized or fraudulent
instructions. Neither the Fund nor the Transfer Agent will be liable for
following telephone instructions reasonably believed to be genuine.
During times of drastic economic or market conditions, investors may
experience difficulty in contacting the Transfer Agent by telephone to request a
redemption of Fund shares. In such cases, investors should consider using the
other redemption procedures described herein. Use of these other redemption
procedures may result in the redemption request being processed at a later
time than it would have been if telephone redemption had been used. During the
delay, Fund's the net asset value may fluctuate.
ADDITIONAL INFORMATION ABOUT REDEMPTIONS. A shareholder may have
redemption proceeds of $500 or more wired to the shareholder's brokerage account
or a commercial bank account designated by the shareholder. A transaction fee of
$15.00 will be charged for payments by wire. Questions about this option, or
redemption requirements generally, should be referred to the Transfer Agent
at (888) 999-8331.
Written redemption instructions must be received by the Transfer Agent
in proper form and signed exactly as the shares are registered. All signatures
must be guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature guarantees in proper form generally will be accepted
from domestic banks, brokers, dealers, credit unions, national securities
exchanges, registered securities associations, clearing agencies and savings
associations, as well as from participants in the New York Stock Exchange
Medallion Signature Program, the Stock Exchange Medallion Program and the
Securities Transfer Agents Medallion Program ("STAMP"). Such guarantees must be
signed by an authorized signatory thereof with "Signature Guaranteed" appearing
with the shareholder's signature. If the signature is guaranteed by a broker or
dealer, such broker or dealer must be a member of a clearing corporation and
maintain net capital of at least $100,000. Signature-guarantees may not be
provided by notaries public. Redemption requests by corporate and fiduciary
shareholders must be accompanied by appropriate documentation establishing the
authority of the person seeking to act on behalf of the account.
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Investors may obtain from the Fund or the Transfer Agent forms of resolutions
and other documentation which have been prepared in advance to assist compliance
with the Fund's procedures. Any questions with respect to signature guarantees
should be directed to the Transfer Agent by calling (888) 999-8331.
DISTRIBUTION AND SHAREHOLDER SERVICING PLAN
Under a plan adopted by the Fund's Board of Trustees pursuant to Rule
12b-1 under the 1940 Act (the "Plan"), the Fund pays the Manager a shareholder
servicing and distribution fee at the annual rate of .50% of the average daily
net assets of the Fund. Such fee will be used in its entirety by the Manager to
make payments for administration, shareholder services and distribution
assistance, including, but not limited to (i) compensation to securities dealers
and other organizations (each, a "Service Organization" and collectively, the
"Service Organizations"), for providing distribution assistance with respect to
assets invested in the Fund, (ii) compensation to Service Organizations for
providing administration, accounting and other shareholder services with respect
to Fund shareholders, and (iii) otherwise promoting the sale of shares of the
Fund, including paying for the preparation of advertising and sales literature
and the printing and distribution of such promotional materials to prospective
investors. The fees paid to the Manager under the Plan are in addition to the
fees payable under the Management Agreement and are payable without regard to
actual expenses incurred. The Fund understands that third parties also may
charge fees to their clients who are beneficial owners of Fund shares in
connection with their client accounts. These fees would be in addition to any
amounts which may be received by them from the Manager under the Plan.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily pays dividends from its net investment income and
distributes net realized securities gains, if any, once a year, but it may make
distributions on a more frequent basis to comply with the distribution
requirements of the Code, in all events in a manner consistent with the
provisions of the 1940 Act. Dividends are automatically reinvested in additional
Fund shares at net asset value, unless the shareholder has elected to receive
payment in cash. All expenses are accrued daily and deducted before declaration
of dividends to investors.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains, paid by the Fund
will be taxable to U.S. shareholders as ordinary income for Federal income tax
purposes. Distributions from net realized long-term securities gains of the Fund
will be taxable to U.S. shareholders as long-term capital gains for Federal
income tax purposes. Dividends and distributions also may be subject to state
and local taxes. The Fund's distributions are taxable in the year paid,
regardless of whether they are received in cash or reinvested in additional
shares of the Fund, except that certain distributions declared in the last three
months of the year and paid in January are taxable as if paid on December 31.
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<PAGE> 20
Notice as to the tax status of investors' dividends and distributions
will be mailed to them annually. Investors also will receive periodic summaries
of their accounts which will include information as to dividends and
distributions from securities gains, if any, paid during the year.
An investor's redemption of Fund shares may result in a taxable gain or
loss, depending upon whether the redemption proceeds payable to such investor
are more or less than his adjusted tax basis for his redeemed shares.
Federal regulations generally require the Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends, distributions
from net realized securities gains and the proceeds of any redemption,
regardless of the extent to which gain or loss may be realized, paid to a
shareholder if such shareholder fails to certify either that the TIN furnished
in connection with opening an account is correct or that such shareholder has
not received notice from the IRS of being subject to backup withholding as a
result of a failure to properly report taxable dividend or interest income on a
Federal income tax return. Furthermore, the IRS may notify the Fund to institute
backup withholding if the IRS determines a shareholder's TIN is incorrect or if
a shareholder has failed to properly report taxable dividend and interest income
on a Federal income tax return.
A TIN is either the Social Security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the record
owner of the account, and may be claimed as a credit on the record owner's
Federal income tax return.
The Fund intends to qualify as a "regulated investment company"
under the Code so long as such qualification is in the best interests of its
shareholders. Such qualification relieves the Fund of any liability for Federal
income tax to the extent its earnings are distributed in accordance with
applicable provisions of the Code. The Fund intends to make sufficient
distributions prior to the end of each calendar year to avoid liability for a 4%
Federal excise tax on undistributed income.
Each investor should consult its tax adviser regarding specific
questions as to Federal, state or local taxes.
SYSTEMATIC INVESTMENT PLAN
The Systematic Investment Plan permits investors to purchase shares of
the Fund (minimum initial investment of $500 and minimum subsequent
investments of $25 per transaction) at regular intervals selected by the
investor. Provided the investor's bank or other financial institution allows
automatic withdrawals, shares may be purchased by transferring funds from the
account designated by the investor. At the investor's option, the account
designated will be debited in the specified amount, and shares will be purchased
once a month, on the twentieth day. Only an account maintained at a domestic
financial institution which is an Automated Clearing House member may be so
designated. Investors desiring to participate in the Systematic
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<PAGE> 21
Investment Plan should call the Transfer Agent at (888) 999-8331 to obtain the
appropriate forms. The Systematic Investment Plan does not assure a profit and
does not protect against loss in declining markets. Since the Systematic
Investment Plan involves the continuous investment in the Fund regardless of
fluctuating price levels of the Fund's shares, investors should consider their
financial ability to continue to purchase through periods of low price levels.
The Fund may modify or terminate the Systematic Investment Plan at any time or
charge a service fee. No such fee currently is contemplated.
ADVERTISING THE FUND'S PERFORMANCE
From time to time the Fund advertises its "total return" and "average
annual total return". These figures are based on historical earnings and are not
intended to indicate future performance. The "total return" shows what an
investment in shares of the Fund would have earned over a specified period of
time (for example, one and five year periods or since inception) assuming the
payment of the redemption fee upon redemption and that all distributions and
dividends paid by the Fund were reinvested on the reinvestment dates during the
period. The "average annual total return" is the annual rate required for the
initial payment to grow to the amount which would be received at the end of the
specified period; i.e., the average annual compound rate of return. Total return
and average annual total return may also be presented without the effect of the
redemption fee.
From time to time, reference may be made in advertising or promotional
material to performance information, including mutual fund rankings, prepared by
Lipper Analytical Service, Inc. ("Lipper"), an independent reporting service
which monitors the performance of mutual funds. In calculating the total return
of the Fund's shares, the Lipper analysis assumes investment of all dividends
and distributions paid but does not take into account applicable sales loads.
The Fund may also refer in advertisements or in other promotional material to
articles, comments listings and columns in the financial press pertaining to the
Fund's performance.
GENERAL INFORMATION
The Fund is an open-end diversified portfolio of WWW Trust (the
"Trust"). The Trust was organized as a business trust under the laws of the
state of Ohio in 1996. The Trust is authorized to issue an indefinite number of
shares of beneficial interest, par value $.001 per share. Shares have
non-cumulative voting rights, do not have preemptive or subscription rights and
are freely transferable. Upon issuance and sale in accordance with the terms of
this Prospectus, each share will be fully paid and nonassessable. Each share has
one vote.
The Trust's Board has authority to create additional portfolios of
shares without shareholder approval. All consideration received by the Trust for
shares of one of the portfolios and all assets in which such consideration is
invested will belong to that portfolio (subject only to the rights of creditors
of the Trust) and will be subject to the liabilities related thereto. The assets
attributable to, and the expenses of, one portfolio are treated separately from
those of the
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other portfolios. Each portfolio is treated as a separate entity for certain
matters under the 1940 Act, and for other purposes, and a shareholder of one
portfolio is not deemed to be a shareholder of any other portfolio. For certain
matters, Trust shareholders vote together as a group; as to others, they vote
separately by portfolio. By this Prospectus, shares of the Fund are being
offered.
In order to provide the initial capital for the Fund, WWW Advisors,
Inc. has purchased a total of 10,000 shares of the Fund at $10.00 per share for
an aggregate purchase price of $100,000. As long as WWW Advisors Inc. owns more
than 25% of the Fund's shares, it will be deemed to be in "control" of the Fund
as that term is defined in the 1940 Act.
Shareholder inquiries may be made by writing to the Transfer Agent at
American Data Services, Inc., 24 West Carver Street, 2nd Floor, Huntington, New
York 11743, or by calling (888) 999-8331.
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APPENDIX
In connection with its investment objective and policies, the Fund may
employ, among others, the following investment techniques which may involve
certain risks. Options transactions involve "derivative securities."
OPTIONS TRANSACTIONS
The Fund may invest up to 20% of its assets in exchange listed and
negotiated put and call options. Such options may be on individual securities or
on indexes. A put option gives the Fund, in return for the payment of a premium,
the right to sell the underlying security or index to another party at a fixed
price. If the market value of the underlying security or index declines, the
value of the put option would be expected to rise. If the market value of the
underlying security or index remains the same or rises, however, the put option
could lose all of its value, resulting in a loss to the Fund.
A call option gives the Fund, in return for the payment of a premium,
the right to purchase the underlying security or index from another party at a
fixed price. If the market value of the underlying security or index rises, the
value of the call option would also be expected to rise. If the market value of
the underlying security or index remains the same or declines, however, the call
option could lose all of its value, resulting in a loss to the Fund.
SHORT SELLING
Short sales are transactions in which the Fund sells a security it does
not own in anticipation of a decline in the market value of that security. To
complete such a transaction, the Fund must borrow the security to make delivery
to the buyer. The Fund then is obligated to replace the security borrowed by
purchasing it at the market price at the time of replacement. The price at such
time may be more or less than the price at which the security was sold by the
Fund. Until the security is replaced, the Fund is required to pay to the lender
amounts equal to any dividend which accrues during the period of the loan. To
borrow the security, the Fund also may be required to pay a premium, which would
increase the cost of the security sold. The proceeds of the short sale will be
retained by the broker, to the extent necessary to meet margin requirements,
until the short position is closed out.
Until the Fund replaces a borrowed security in connection with a short
sale, the Fund will: (a) maintain daily a segregated account, containing cash,
cash equivalents or U.S. Government securities, at such a level that (i) the
amount deposited in the account plus the amount deposited with the broker as
collateral will equal the current value of the security sold short and (ii) the
amount deposited in the segregated account plus the amount deposited with the
broker as collateral will not be less than the market value of the security at
the time it was sold short; or (b) otherwise cover its short position in
accordance with positions taken by the Staff of the Securities and Exchange
Commission.
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The Fund will incur a loss as a result of the short sale if the price
of the security increases between the date of the short sale and the date on
which the Fund replaces the borrowed security. The Fund will realize a gain if
the security declines in price between those dates. This result is the opposite
of what one would expect from a cash purchase of a long position in a security.
The amount of any gain will be decreased, and the amount of any loss increased,
by the amount of any premium or amounts in lieu of interest the Fund may be
required to pay in connection with a short sale. The Fund may purchase call
options to provide a hedge against an increase in the price of a security sold
short by the Fund. See "Appendix -- Options Transactions."
The Fund anticipates that the frequency of short sales will vary
substantially in different periods, and it does not intend that any specified
portion of its assets, as a matter of practice, will be invested in short sales.
However, no securities will be sold short if, after effect is given to any such
short sale, the total market value of all securities sold short would exceed 20%
of the value of the Fund's net assets. The Fund may not sell short the
securities of any single issuer listed on a national securities exchange to the
extent of more than 5% of the value of its net assets. The Fund may not sell
short the securities of any class of an issuer to the extent, at the time of the
transaction, of more than 2% of the outstanding securities of that class.
LENDING PORTFOLIO SECURITIES
From time to time, the Fund may lend securities from its portfolio to
brokers, dealers and other financial institutions needing to borrow securities
to complete certain transactions. Such loans may not exceed 33 1/3% of the value
of the Fund's total assets. In connection with such loans, the Fund will receive
collateral consisting of cash, U.S. Government securities or irrevocable letters
of credit which will be maintained at all times in an amount equal to at least
100% of the current market value of the loaned securities. The Fund can increase
its income through the investment of such collateral. The Fund continues to be
entitled to payments in amounts equal to the interest, dividends and other
distributions payable on the loaned security and receives interest on the amount
of the loan. Such loans will be terminable at any time upon specified notice.
The Fund might experience risk of loss if the institution with which it has
engaged in a portfolio loan transaction breaches its agreement with the Fund.
BORROWING MONEY
As a fundamental policy, the Fund is permitted to borrow to the extent
permitted under the 1940 Act. The 1940 Act permits an investment company to
borrow in an amount up to 33 1/3% of the value of such company's assets.
However, the Fund currently intends to borrow money only for temporary or
emergency (not leveraging) purposes, in an amount up to 15% of the value of its
total assets (including the amount borrowed) valued at the lesser of cost or
market, less liabilities (not including the amount borrowed) at the time the
borrowing is made. While borrowings exceed 5% of the Fund's total assets, the
Fund will not make any additional investments.
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CERTAIN PORTFOLIO SECURITIES
CONVERTIBLE SECURITIES
Convertible securities are fixed-income securities that may be
converted at either a stated price or stated rate into underlying shares of
common stock. Convertible securities have general characteristics similar to
both fixed-income and equity securities. Although to a lesser extent than with
fixed-income securities generally, the market value of convertible securities
tends to decline as interest rates increase and, conversely, tends to increase
as interest rates decline. In addition, because of the conversion feature, the
market value of convertible securities tends to vary with fluctuations in the
market value of the underlying common stock, and, therefore, also will react to
variations in the general market for equity securities. A unique feature of
convertible securities is that as the market price of the underlying common
stock declines, convertible securities tend to trade increasingly on a yield
basis, and so may not experience market value declines to the same extent as the
underlying common stock. When the market price of the underlying common stock
increases, the prices of the convertible securities tend to rise as a reflection
of the value of the underlying common stock. While no securities investments are
without risk, investments in convertible securities generally entail less risk
than investments in common stock of the same issuer.
As fixed-income securities, convertible securities are investments that
provide for a stable stream of income with generally higher yields than common
stocks. Of course, like all fixed-income securities, there can be no assurance
of current income because the issuers of the convertible securities may default
on their obligations. Convertible securities, however, generally offer lower
interest or dividend yields than non-convertible securities of similar quality
because of the potential for capital appreciation. A convertible security, in
addition to providing fixed income, offers the potential for capital
appreciation through the conversion feature, which enables the holder to benefit
from increases in the market price of the underlying common stock. There can be
no assurance of capital appreciation, however, because securities prices
fluctuate.
Convertible securities generally are subordinated to other similar but
non-convertible securities of the same issuer, although convertible bonds, as
corporate debt obligations, enjoy seniority in right of payment to all equity
securities, and convertible preferred stock is senior to common stock, of the
same issuer. Because of the subordination feature, however, convertible
securities typically have lower ratings than similar non-convertible securities.
MONEY MARKET INSTRUMENTS
The Fund may invest, in the circumstances described under "Investment
Objective, Policies and Risks," in the following types of money market
instruments.
U.S. GOVERNMENT SECURITIES. The Fund may purchase securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities, which
include U.S. Treasury securities that differ in their interest rates, maturities
and times of issuance. Treasury Bills have initial maturities of one year or
less; Treasury Notes have initial maturities of one to ten years; and
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Treasury Bonds generally have initial maturities of greater than ten years. Some
obligations issued or guaranteed by U.S. Government agencies and
instrumentalities, for example, Government National Mortgage Association
pass-through certificates, are supported by the full faith and credit of the
U.S. Treasury; others, such as those of the Federal Home Loan Banks, by the
right of the issuer to borrower from the U.S. Treasury; others, such as those
issued by the Federal National Mortgage Association, by discretionary authority
of the U.S. Government to purchase certain obligations of the agency or
instrumentality; and others, such as those issued by the Student Loan Marketing
Association, only by the credit of the agency or instrumentality. These
securities bear fixed, floating or variable rates of interest. Principal and
interest may fluctuate based on generally recognized reference rates or the
relationship of rates. While the U.S. Government provides financial support to
such U.S. Government-sponsored agencies or instrumentalities, no assurance can
be given that it will always do so, since it is not so obligated by law.
BANK OBLIGATIONS. The Fund may invest in bank obligations, including
certificates of deposit, time deposits, bankers' acceptances and other
short-term obligations of banks, savings and loan associations and other banking
institutions.
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period of
time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest rate. Time
deposits which may be held by the Fund will not benefit from insurance from the
Bank Insurance Fund or the Savings Association Insurance Fund administered by
the Federal Deposit Insurance Corporation. The Fund will not invest more than
15% of the value of its net assets in time deposits maturing in more than seven
days and in other securities that are illiquid.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments reflect
the obligation both of the bank and of the drawer to pay the face amount of the
instrument upon maturity. The other short-term obligations may include
uninsured, direct obligations bearing fixed, floating or variable interest
rates.
REPURCHASE AGREEMENTS. Repurchase agreements involve the acquisition by
the Fund of an underlying debt instrument, subject to an obligation of the
seller to repurchase, and the Fund to resell, the instrument at a fixed price
usually not more than one week after its purchase. Certain costs may be incurred
by the Fund in connection with the sale of the securities if the seller does not
repurchase them in accordance with the repurchase agreement. In addition, if
bankruptcy proceedings are commenced with respect to the seller of the
securities, realization on the securities by the Fund may be delayed or limited.
COMMERCIAL PAPER AND OTHER SHORT-TERM CORPORATE OBLIGATIONS. Commercial
paper consists of short-term, unsecured promissory notes issued to finance
short-term credit needs. The commercial paper purchased by the Fund will consist
only of direct obligations which, at the time
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of their purchase, are (a) rated not lower than Prime-1 by Moody's Investors
Service Inc. ("Moody's"), A-1 by Standard & Poor's Corporation ("S&P"), F-1 by
Fitch Investors Service, Inc. ("Fitch") or Duff-1 by Duff & Phelps, Inc.
("Duff"), (b) issued by companies having an outstanding unsecured debt issue
currently rated not lower than Aa3 by Moody's or AA- by S&P, Fitch or Duff, or
(c) if unrated, determined by the Manager to be of comparable quality to those
rated obligations which may be purchased by the Fund. The Fund may purchase
floating and variable rate demand notes and bonds, which are obligations
ordinarily having stated maturities in excess of one year, but which permit the
holder to demand payment of principal at any time or at specified intervals.
WARRANTS
The Fund may invest up to 5% of its net assets in warrants, except that
this limitation does not apply to warrants acquired in units or attached to
securities. Included in such amount, but not to exceed 2% of the value of the
Fund's net assets, may be warrants which are not listed on the New York or
American Stock Exchange. A warrant is an instrument issued by a corporation
which gives the holder the right to subscribe to a specified amount of the
corporation's capital stock at a set price for a specified period of time.
FOREIGN SECURITIES
The Fund may invest up to 20% of its assets in securities of foreign
issuers directly or through American Depository Receipts ("ADRs"). Foreign
investments may be affected favorably or unfavorably by changes in currency
rates and exchange control regulations. There may be less information available
about a foreign company than about a U.S. company and foreign companies may not
be subject to reporting standards and requirements comparable to those
applicable to U.S. companies. Foreign securities may not be as liquid as U.S.
securities. Securities of foreign companies may involve greater market risk than
securities of U.S. companies, and foreign brokerage commissions and custody fees
are generally higher than in the United States. Investments in foreign
securities may also be subject to local economic or political risks, political
instability and possible nationalization of issuers.
ILLIQUID SECURITIES
The Fund may invest up to 15% of the value of its net assets in
securities as to which a liquid trading market does not exist, provided such
investments are consistent with the Fund's investment objective. Such securities
may include securities that are not readily marketable, such as certain
securities that are subject to legal or contractual restrictions on resale,
repurchase agreements providing for settlement in more than seven days after
notice, and options traded in the over-the-counter market and securities used to
cover such options. As to these securities, the Fund is subject to a risk that
should the Fund desire to sell them when a ready buyer is not available at a
price the Fund deems representative of their value, the value of the Fund's net
assets could be adversely affected.
24
<PAGE> 28
================================================================================
================================================================================
WWW INTERNET FUND
- --------------------------------------------------------------------------------
525 Vine Street, Suite 1330
Cincinnati, Ohio 45202
INVESTMENT MANAGER
WWW Advisors, Inc.
131 Prosperous Place, Suite 17
Lexington, Kentucky 40509
TRANSFER AGENT
American Data Services, Inc.
24 West Carver Street
Huntington, New York 11743
PORTFOLIO SECURITIES CUSTODIAN
Star Bank, N.A.
P.O. Box 1118
Cincinnati, Ohio 45201-1118
GENERAL COUNSEL
Benesch, Friedlander, Coplan & Aronoff P.L.L.
2300 BP America Building
200 Public Square
Cleveland, Ohio 44114-2378
EQCS1 4/96
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PROSPECTUS
WWW INTERNET FUND
July ___, 1996
- --------------------------------------------------------------------------------
<PAGE> 29
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY ANY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS STATEMENT OF ADDITIONAL INFORMATION DOES NOT CONSTITUTE A
PROSPECTUS.
PRELIMINARY STATEMENT OF ADDITIONAL INFORMATION
SUBJECT TO COMPLETION
WWW INTERNET FUND
525 Vine Street, Suite 1330
Cincinnati, Ohio 45202
Telephone (513) 357-8400
July ___, 1996
This Statement of Additional Information, which is not a prospectus,
expands upon and supplements the information contained in the current Prospectus
of WWW Internet Fund (the "Fund") of WWW Trust (the "Trust") dated July ___,
1996. It should be read in conjunction with the Prospectus, which may be
obtained without charge by writing or calling the Fund at the above address or
telephone number. This Statement of Additional Information is incorporated by
reference into the Prospectus in its entirety.
WWW Advisors, Inc. (the "Manager") is the Fund's investment manager.
<PAGE> 30
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Investment Objective and Policies .......................................... 2
Trustees and Officers ...................................................... 4
Management ................................................................. 5
Distribution and Shareholder Servicing Plan ................................ 6
Portfolio Transactions ..................................................... 7
Redemption of Fund Shares .................................................. 7
Valuation .................................................................. 8
General Information ........................................................ 8
</TABLE>
(i)
<PAGE> 31
INVESTMENT OBJECTIVE AND POLICIES
The investment objective and policies of the Fund are described in the
Fund's Prospectus under the heading "Investment Objective, Policies and Risks"
and in the Appendix to the Prospectus. In addition to its fundamental investment
objective of seeking to produce capital appreciation, the Fund has adopted the
following fundamental investment policies and restrictions. These policies
cannot be changed without approval by the holders of a majority of the
outstanding voting securities of the Fund. As defined in the Investment Company
Act of 1940 (the"Act"), the "vote of a majority of the outstanding voting
securities" means the lesser of the vote of (a) 67% of the shares of the Fund at
a meeting where more than 50% of the outstanding shares are present in person or
by proxy or (b) more than 50% of the outstanding shares of the Fund. The Fund
may not:
1. Purchase or retain any securities of an issuer if any of the
officers or Trustees of the Fund or its investment adviser owns beneficially
more than 1/2 of 1% of the securities of such issuer and together own more than
5% of the securities of such issuer.
2. Invest in commodities, except that the Fund may purchase and sell
options, forward contracts, futures contracts, including those relating to
indexes, and options on future contracts or indexes.
3. Purchase, hold or deal in real estate, real estate limited
partnership interests, or oil, gas or other mineral leases or exploration or
development programs, but the Fund may purchase and sell securities that are
secured by real estate or issued by companies that invest or deal in real estate
or real estate investment trusts.
4. Borrow money, except to the extent permitted under the 1940 Act. The
1940 Act permits an investment company to borrow in an amount up to 33-1/3% of
the value of such company's total assets. For purposes of this Investment
Restriction, the entry into options, forward contracts, futures contracts,
including those relating to indexes, and options on futures or indexes shall not
constitute borrowing.
5. Make loans to others, except through the purchase of debt
obligations and the entry into repurchase agreements. However, the Fund may lend
its portfolio securities in an amount not to exceed 33-1/3% of the value of its
total assets.
6. Act as an underwriter of securities of other issuers, except to the
extent the Fund may be deemed an underwriter under the Securities Act of 1933,
as amended, by virtue of disposing of portfolio securities.
7. Issue any senior security (as such term is defined in Section 18(f)
of the 1940 Act).
2
<PAGE> 32
8. Purchase securities on margin, but the Fund may make margin deposits
in connection with transactions in options, forward contracts, futures
contracts, including those relating to indexes, and options on futures contracts
or indexes.
9. Invest more than 25% of the value of its total assets in any one
industry, except that the Fund will invest at least 70% of the value of its
total assets in securities of companies that are designing, developing or
manufacturing hardware or software products or services for the Internet and/or
World Wide Web.
10. Invest in the securities of a company for the purpose of exercising
management or control, but the Fund will vote the securities it owns in its
portfolio as a shareholder in accordance with its views.
11. Pledge, mortgage or hypothecate its assets, except to the extent
necessary to secure permitted borrowings and to the extent related to the
purchase of securities on a when-issued or forward commitment basis and the
deposit of assets in escrow in connection with writing covered put and call
options and collateral and initial or variation margin arrangements with respect
to options, forward contracts, futures contracts, including those relating to
indexes, and options on futures contracts or indexes.
12. Purchase, sell or write puts, calls or combinations thereof, except
as described in the Fund's Prospectus or Statement of Additional Information.
13. Engage in short sales of securities, except as described in the
Fund's Prospectus or Statement of Additional Information.
14. Invest more than 20% of its assets in securities of foreign issuers
(whether directly or through American Depository Receipts).
15. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid, if, in
the aggregate, more than 15% of the value of its net assets would be so
invested.
16. Purchase securities of other investment companies, except by
purchase in the open 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, and provided that any such purchase is permitted under the 1940
Act.
If a percentage restriction is adhered to at the time of investment, a
later change in percentage resulting from a change in values or assets will not
constitute a violation of such restriction.
The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of the Fund's shares in certain states.
Should the Fund determine that a
3
<PAGE> 33
commitment is no longer in the best interest of the Fund and its shareholders,
the Fund reserves the right to revoke the commitment by terminating the sale of
Fund shares in the state involved.
TRUSTEES AND OFFICERS
Trustees and officers of the Trust, together with their ages and
information as to their principal business occupations during the past five
years, are shown below. Each Trustee who is an "interested person" of the Trust,
as defined in the 1940 Act, is indicated by an asterisk.
<TABLE>
<S> <C>
Lawrence S. York* (45) Trustee, Chairman of the Board and
131 Prosperous Place, Suite 17 President of the Trust; President, Capital
Lexington, Kentucky 40509 Advisors Group, Inc. (financial planning and
investment advisory firm); President, RH
York & Company, Inc. (broker-dealer).
James D. Greene* (38) Vice President, Secretary and Treasurer of
4185 Palmetto Drive the Trust; Marketing Strategist, Lexmark
Lexington, Kentucky 40513 International, Inc. (manufacturer of network
personal computer and office electronics).
Mary J. Cronin (48) Trustee of the Trust; Professor of
140 Commonwealth Avenue Management (formerly Associate Professor
Chestnut Hill, Massachusetts 02167 & Director of Libraries), Boston College,
Chestnut Hill, Massachusetts.
Charles F. Haywood (69) Trustee of the Trust; National City Bank
348 Business & Economics Professor of Finance, University of
University of Kentucky Kentucky; Director, Center for Business &
Lexington, Kentucky 40506 Economic Research, University of
Kentucky; Member, Board of Directors, The
Pittston Company.
</TABLE>
For so long as the Plan described in the section captioned
"Distribution and Shareholder Servicing Plan" remains in effect, the Trust's
Trustees who are not "interested persons" of the Fund, as defined in the 1940
Act, will be selected and nominated by the Trustees who are not "interested
persons" of the Trust.
No meetings of shareholders of the Trust will be held for the purpose
of electing Trustees unless and until such time as less than a majority of the
Trustees holding office have been elected by shareholders, at which time the
Trustees then in office will call a shareholders' meeting for the election of
Trustees. Under the 1940 Act, shareholders of record of not less than two-thirds
of the outstanding shares of the Trust may remove a Trustee through a
declaration in writing or by vote cast in person or by proxy at a meeting called
for that purpose.
4
<PAGE> 34
Under the Trust's Declaration of Trust, the Trustees are required to call a
meeting of shareholders for the purpose of voting upon the question of removal
of any such Trustee when required in writing to do so by the shareholders of
record of not less than 10% of the Trust's outstanding shares.
Compensation Table
<TABLE>
<CAPTION>
Pension or Total
Retirement Compensation
Aggregate Benefits Accrued Estimated from Trust
Name of Person, Compensation as Part of Annual Benefits (the Trust is not
Position from Trust Trust Expenses Upon Retirement in a Fund Complex)
<S> <C> <C> <C> <C>
Lawrence S. York, Trustee, 0 0 0 0
Chairman of the Board and
President
James D. Greene, Trustee, 0 0 0 0
Vice President, Secretary
and Treasurer
Mary J. Cronin, Trustee 10,000* 0 0 10,000*
Charles F. Haywood, Trustee 10,000* 0 0 10,000*
<FN>
*Estimated payments for the current fiscal year ending June 30, 1997.
</TABLE>
The Trust does not compensate its officers. The Trust intends to pay
each Trustee who is not an officer or employee of the Manager a fee of $2,500
per quarter and reimbursement for travel and out-of-pocket expenses.
MANAGEMENT
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Management Services."
Under the Management Agreement dated July 10, 1996, subject to the
control of the Board of Trustees, WWW Advisors, Inc. (the "Manager"), manages
the investment of the assets of the Fund, including making purchases and sales
of portfolio securities consistent with the Fund's investment objectives and
policies, and administers its business and other affairs. The Manager provides
the Fund with such office space, administrative and other services and executive
and other personnel as are necessary for Fund operations. The Manager pays all
of the compensation of trustees of the Fund who are employees or consultants of
the Manager and of the officers and employees of the Fund.
Pursuant to an undertaking to a state securities administrator, the
Management Fee of the Manager will be reduced in the amount, if any, by which
total expenses, including the management fee, but excluding interest, taxes,
brokerage commissions, redemption fees,
5
<PAGE> 35
distribution fees and certain extraordinary expenses, exceed 2-1/2% of the first
$30,000,000 of average net assets, 2% of the next $70,000,000 and 1-1/2%
thereafter.
The Management Agreement is subject to annual approval by (i) the
Trust's Board of Trustees or (ii) vote of a majority (as defined in the 1940
Act) of the outstanding voting securities of the Fund, provided that in either
event the continuance also is approved by a majority of the Board of Trustees
who are not "interested persons" (as defined in the 1940 Act) of the Trust or
the Manager, by vote cast in person at a meeting called for the purpose of
voting on such approval. The Board of Trustees, including a majority of the
Trustees who are not "interested persons" of any party to the Agreement,
approved the Agreement at a meeting held on July 10, 1996. The Agreement is
terminable, without penalty, on 60 days' notice, by the Trust's Board of
Trustees or by vote of the holders of a majority of the Trust's shares, or, on
not less than 90 days' notice, by the Manager. As to the Fund, the Agreement
will terminate automatically in the event of its assignment (as defined in the
1940 Act).
The Manager is a Kentucky corporation incorporated in 1996. Lawrence S.
York is the Chief Executive Officer of the Manager and owns 31.25% of its
outstanding shares of stock. Mr. York is also President of RH York & Company,
Inc. James D. Greene is the Executive Senior Vice President of the Manager and
owns 31.25% of its outstanding shares of stock.
DISTRIBUTION AND SHAREHOLDER SERVICING PLAN
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Distribution and Shareholder
Servicing Plan."
Rule 12b-1 (the "Rule") adopted by the Securities and Exchange
Commission under the 1940 Act provides, among other things, that an investment
company may bear expenses of distributing its shares only pursuant to a plan
adopted in accordance with the Rule. The Trust's Trustees have adopted such a
plan (the "Plan"). The Trust's Trustees believe that there is a reasonable
likelihood that the Plan will benefit the Fund and its shareholders.
A quarterly report of the amounts expended under the Plan, and the
purposes for which such expenditures were incurred, must be made to the Trustees
for their review. In addition, the Plan provides that it may not be amended to
increase materially the costs which shareholders may bear pursuant to the Plan
without approval of such shareholders and that other material amendments of the
Plan must be approved by the Board of Trustees, and by the Trustees who are
neither "interested persons" (as defined in the 1940 Act) of the Trust nor have
any direct or indirect financial interest in the operation of the Plan or in the
related Plan agreements, by vote cast in person at a meeting called for the
purpose of considering such amendments. The Plan and related agreements are
subject to annual approval by such vote cast in person at a meeting called for
the purpose of voting on the Plan. The Plan was approved by the Trustees and by
WWW Advisors, Inc., as sole shareholder of the Fund, on July 10, 1996. The
Plan is terminable at any time by vote of a majority of the Trustees who are not
"interested persons" and who have no direct or indirect financial interest in
the operation of the Plan or in the Plan agreements or
6
<PAGE> 36
by vote of holders of a majority of the Fund's shares. A Plan agreement is
terminable, without penalty, at any time, by such vote of the Trustees, upon not
more than 60 days' written notice to the parties to such agreement or by vote of
the holders of a majority of the Fund's shares. A Plan agreement will terminate
automatically in the event of its assignment (as defined in the 1940 Act).
PORTFOLIO TRANSACTIONS
The Management Agreement recognizes that in the purchase and sale of
portfolio securities the Manager will seek the most favorable price and
execution, and, consistent with that policy, may give consideration to the
research, statistical and other services furnished by brokers or dealers to the
Manager for their use, as well as to the general attitude toward and support of
investment companies demonstrated by such brokers or dealers. Such services
include supplemental investment research, analysis and reports concerning
issuers, industries and securities deemed by the Manager to be beneficial to the
Fund. In addition, the Manager is authorized to place orders with brokers who
provide supplemental investment and market research and statistical and economic
analysis although the use of such brokers may result in a higher brokerage
charge to the Fund than the use of brokers selected solely on the basis of
seeking the most favorable price and execution and although such research and
analysis may be useful to the Manager in connection with its services to clients
other than the Fund.
In over-the-counter markets, the Fund deals with primary market makers
unless a more favorable execution or price is believed to be obtainable. The
Fund may buy securities from or sell securities to dealers acting as principal,
except dealers with which its directors and/or officers are affiliated.
Consistent with these considerations, the Manager may (i) consider
sales of shares of the Fund as a factor in the selection of brokers or dealers
to execute portfolio transactions for the Fund and (ii) make substantial use of
the services of RH York & Company, Inc., an affiliate of the Manager.
REDEMPTION OF FUND SHARES
The procedures for redemption of Fund shares under ordinary
circumstances are set forth in the Prospectus. In unusual circumstances payment
may be postponed, or the right of redemption postponed for more than seven days,
if the orderly liquidation of portfolio securities is prevented by the closing
of, or restricted trading on the New York Stock Exchange during periods of
emergency, or such other periods as ordered by the Securities and Exchange
Commission. Payment may be made in securities, subject to the review of some
state securities commissions. If payment is made in securities, a shareholder
may incur brokerage expenses in converting these securities into cash.
7
<PAGE> 37
VALUATION
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Buy Shares."
Portfolio securities, including covered call options written by the
Fund, are valued at the last sale price on the securities exchange or national
securities market on which such securities primarily are traded. Securities not
listed on an exchange or national securities market, or securities in which
there were no transactions, are valued at the average of the most recent bid and
asked prices, except in the case of open short positions where the asked price
is used for valuation purposes. Bid price is used when no asked price is
available. Short-term investments are carried at amortized cost, which
approximates value. Any securities or other assets for which recent market
quotations are not readily available are valued at fair value as determined in
good faith by the Trust's Board of Trustees. Expenses and fees, including the
management fee and distribution and service fees, are accrued daily and taken
into account for the purpose of determining the net asset value of the Fund's
shares.
Restricted securities, as well as securities or other assets for which
market quotations are not readily available, are valued at fair value as
determined in good faith by the Board of Trustees. The Board of Trustees will
review the method of valuation on a current basis. In making their good faith
valuation of restricted securities, the Trustees generally will take the
following factors into consideration: restricted securities which are, or are
convertible into, securities of the same class of securities for which a public
market exists usually will be valued at market value less the same percentage
discount at which purchased. This discount will be revised periodically by the
Board of Trustees if the Trustees believe that it no longer reflects the value
of the restricted securities. Restricted securities not of the same class as
securities for which a public market exists usually will be valued initially at
cost. Any subsequent adjustment from cost will be based upon considerations
deemed relevant by the Board of Trustees.
GENERAL INFORMATION
CUSTODIAN. Star Bank, N.A., 425 Walnut Street, Cincinnati, Ohio
45201-1118 serves as custodian of the Fund.
AUDITORS. McCurdy & Associates C.P.A.'s, Inc., independent auditors,
have been selected as auditors of the Fund. Their address is 27955 Clemens Road,
Westlake, Ohio 44145.
As of July 8, 1996, all of the outstanding shares of the Fund were
owned by WWW Advisors, Inc., 131 Prosperous Place, Suite 17, Lexington, Kentucky
40509. A shareholder who beneficially owns, directly or indirectly, more than
25% of the Fund's voting securities may be deemed a "control person" (as defined
in the 1940 Act) of the Fund. WWW Advisors, Inc. is controlled by Lawrence S.
York, the Chairman of the Board and President of the Fund, and James D. Greene,
the Vice President, Treasurer and Secretary of the Fund.
8
<PAGE> 38
To The Shareholders and Trustees
WWW Trust
We have audited the accompanying statement of assets and liabilities of WWW
Internet Fund (a portfolio of the WWW Trust) as of July 8, 1996. This financial
statement is the responsibility of the Company's management. Our responsibility
is to express an opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of assets and liabilities is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement of assets and
liabilities. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
presentation of the statement of assets and liabilities. Our procedures included
confirmation of cash held by the custodian as of July 8, 1996, by correspondence
with the custodian. We believe that our audit of the statement of assets and
liabilities provides a reasonable basis for our opinion.
In our opinion, the statement of assets and liabilities referred to above
presents fairly, in all material respects, the financial position of WWW
Internet Fund of the WWW Trust as of July 8, 1996, in conformity with generally
accepted accounting principles.
/s/ McCurdy & Associates CPA's, Inc.
McCurdy & Associates CPA's, Inc.
Westlake, Ohio
July 8, 1996
9
<PAGE> 39
WWW TRUST
STATEMENT OF ASSETS & LIABILITIES
JULY 8, 1996
<TABLE>
<CAPTION>
WWW
Internet Fund
<S> <C>
ASSETS:
Cash in Bank $100,000
Total Assets $100,000
NET ASSETS $100,000
NET ASSETS CONSIST OF:
Capital Paid In $100,000
OUTSTANDING SHARES
Indefinite Number of Shares of
Beneficial Interest Authorized
With Par Value of $.001 Per Share $10,000
NET ASSET VALUE PER SHARE $10
OFFERING PRICE PER SHARE $10
</TABLE>
The accompanying notes are an integral
part of this financial statement
10
<PAGE> 40
WWW TRUST
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
The WWW Trust (the "Trust") was organized as a business trust under the laws of
the state of Ohio on April 23, 1996. The Trust is authorized to issue an
indefinite number of shares of beneficial interest, par value $.001 per share.
Shares have non-cumulative voting rights, do not have preemptive or subscription
rights and are freely transferable. The WWW Internet Fund is an open-end
diversified portfolio of WWW Trust.
The Trust uses an independent administrator, transfer agent, and dividend paying
agent. No transactions other than those relating to organizational matters and
the sale of 10,000 shares of WWW Internet Fund has taken place to date.
2. RELATED PARTY TRANSACTIONS
In order to provide the initial capital for the Fund, WWW Advisors, Inc. has
purchased a total of 10,000 shares of the Fund at $10.00 per share for an
aggregate purchase price of $100,000. As long as WWW Advisors, Inc. owns more
than 25% of the Fund's shares, it will be deemed to be in "control" of the Fund
as that term is defined in the 1940 Act.
Pursuant to a Management Agreement between the Fund and WWW Advisors, Inc. (the
"Manager") and subject to the authority of the Board of Trustees, the Manager
manages the investments of the Fund and is responsible for the overall
management of the business affairs of the Fund.
Under the terms of the Management Agreement, the Fund has agreed to pay the
Manager a base monthly management fee at the annual rate of 1.00% of the Fund's
average daily net assets (the "Base Fee") which will be adjusted monthly (the
"Monthly Performance Adjustment") depending on the extent by which the
investment performance of the Fund, after expenses, exceeded or was exceeded by
the percentage change of the S&P 500 Index. Under terms of the Management
Agreement, the monthly performance adjustment may increase or decrease the total
management fee payable to the Manager (the "Total Management Fee") by up to .50%
per year of the value of the Fund's average daily net assets.
All expenses incurred in the operation of the Fund will be borne by the Fund,
except to the extent specifically assumed by the Manager. The expenses to be
borne by the Fund will include: organizational costs, taxes, interest, brokerage
fees and commissions, fees of board members who are not officers, directors or
employees of the Manager or its affiliates, Securities and Exchange Commission
fees, state Blue Sky qualification fees, advisory, administrative and fund
accounting fees, charges of custodians, transfer and dividend disbursing agents'
fees, insurance premiums, industry association fees, outside auditing and legal
expenses, costs of maintaining the Fund's existence, costs of independent
pricing services, costs attributable to investor services (including,
11
<PAGE> 41
WWW TRUST
NOTES TO FINANCIAL STATEMENTS (CONT'D)
2. RELATED PARTY TRANSACTION (CONT'D)
without limitation, telephone and personnel expenses), cost of shareholders'
reports and meetings, costs of preparing and printing prospectuses and
statements of additional information, amounts payable under the Fund's
Distribution and Shareholder Servicing Plan (the "Plan") and any extraordinary
expenses.
The Manager has undertaken, until such time as it gives investors 60 days'
notice to the contrary, to waive its Management Fee in the amount, if any, by
which the total expenses of the Fund for any fiscal year, including amortization
of organizational expenses and amounts paid by the Fund under the Plan, exceed
2.50% of average annual net assets of the Fund, except that the amount of such
fee waiver shall not exceed the amount of fees received by the Manager under the
Management Agreement for such fiscal year. The fee waiver, if any, will be on a
monthly basis, subject to year-end adjustment. Interest expenses, taxes,
brokerage fees and commissions, and extraordinary expenses are not included as
expenses for these purposes.
3. CAPITAL STOCK AND DISTRIBUTION
At July 8, 1996 an indefinite number of shares were authorized and paid-in
capital amounted to $100,000 for WWW Internet Fund. Transactions in capital
stock were as follows:
<TABLE>
<CAPTION>
WWW
Internet Fund
<S> <C>
Shares sold 10,000
Shares redeemed -0-
Net increase 10,000
Shares outstanding:
Beginning of period -0-
End of period 10,000
</TABLE>
12
<PAGE> 42
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Statement of Assets and Liabilities at July 8, 1996,
together with Report of Independent Certified Public
Accountants dated July 8, 1996.
(b) Exhibits:
(1) Amended and Restated Declaration of Trust.*
(2) By-laws.*
(5) Management Agreement between Registrant and WWW
Advisors, Inc.*
(8) Custody Agreement.
(9a) Transfer Agency and Service Agreement.
(9b) Fund Accounting Service Agreement.
(9c) Administrative Service Agreement.
(10) Opinion and Consent of Counsel.
(11) Consent of Independent Auditors.
(13) Purchase Agreement for Initial Capital between
Registrant and WWW Advisors, Inc.
(15) Distribution and Shareholder Servicing Plan.*
(17) Financial Data Schedule meeting the requirements of
Rule 483 under the Securities Act of 1933.
* Previously filed.
Item 25. Persons Controlled by or Under Common Control with Registrant
- None.
C-1
<PAGE> 43
Item 26. Number of Holders of Securities
As of July 8, 1996, WWW Advisors, Inc. owned all
10,000 of the Fund's issued and outstanding shares.
Item 27. Indemnification
---------------
Reference is made to Article VIII of the Registrant's
Amended and Restated Declaration of Trust filed as Exhibit 1.
The application of these provisions is limited by Article 10
of the Registrant's By-Laws filed as Exhibit 2 and by the
following undertaking set forth in the rules promulgated by
the Securities and Exchange Commission:
Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to
trustees, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission
such indemnification is against public policy as
expressed in such Act and is, therefore,
unenforceable. In the event that a claim for
indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or
paid by a trustee, officer or controlling person of
the 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, the registrant
will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question
whether such indemnification by it is against public
policy as expressed in such Act and will be governed
by the final adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser.
Reference is made to the section in the Prospectus
entitled "Management Services."
Item 29. Principal Underwriters
The Registrant does not have a principal underwriter.
Item 30. Location of Accounts and Records
1. WWW Advisors, Inc.
131 Prosperous Place
Suite 17
Lexington, Kentucky 40509
C-2
<PAGE> 44
2. WWW Trust
525 Vine Street
Suite 1330
Cincinnati, Ohio 45202
3. Star Bank, N.A.
425 Walnut Street
Cincinnati, Ohio 45201-1118
4. American Data Services, Inc.
24 West Carver Street
Huntington, New York 11743
Item 31. Management Services
Not applicable.
Item 32. Undertakings - The Registrant undertakes (1) to furnish a
copy of the Registrant's latest annual report, upon request
and without charge, to every person to whom a Prospectus is
delivered, (2) to file a post effective amendment, using
reasonably current financial statements which need not be
certified, within four to six months from the effective date
of Registrant's Registration Statement under the Securities
Act of 1933, and (3) to call a meeting of shareholders for the
purpose of voting upon the question of removal of a trustee or
trustees when requested in writing to do so by the holders of
at least 10% of the Registrant's outstanding shares of
beneficial interest and in connection with such meeting to
comply with the provisions of Section 16(c) of the Investment
Company Act of 1940 relating to shareholder communications.
C-3
<PAGE> 45
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940, the Registrant and has duly caused this
Amendment to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cincinnati, State of
Ohio, on the 11th day of July, 1996.
WWW TRUST
By: /s/ Lawrence S. York
-----------------------------------
Lawrence S. York
Chairman of the Board and President
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, this Amendment to Registration Statement has
been signed below by the following persons in the capacities indicated on July
11, 1996.
Signature Title
- --------- -----
Lawrence S. York Chairman of the Board (Principal executive
officer, financial officer and accounting
officer) and Trustee
James D. Greene Trustee, Vice President, Treasurer and
Secretary
Mary J. Cronin Trustee
Charles F. Haywood Trustee
Lawrence S. York, by signing his name below, signs this Registration
Statement on behalf of the above-named Trustees pursuant to Powers of Attorney
contained in the Registration Statement filed herewith with the Securities and
Exchange Commission.
Dated: July 11, 1996 /s/ Lawrence S. York
----------------------------------
LAWRENCE S. YORK, Attorney-in-Fact
<PAGE> 46
POWER OF ATTORNEY
The undersigned Trustee of WWW Trust, an Ohio business trust, which
anticipates filing with the Securities and Exchange Commission, Washington, DC,
under the provisions of the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, a registration statement on Form
N-1A, hereby constitutes and appoints LAWRENCE S. YORK with full power of
substitution and resubstitution, as attorney to sign for the undersigned and in
my name, place and stead, as Trustee of said Trust, said registration statement
and any and all amendments and exhibits thereto, and any and all applications
and documents to be filed with the Securities and Exchange Commission pertaining
to such registration statement, with full power and authority to do and perform
any and all acts and things whatsoever requisite, necessary or advisable to be
done in the premises, as fully and for all intents and purposes as the
undersigned could do if personally present, hereby approving the acts of said
attorney, and any such substitute.
IN WITNESS WHEREOF, I have hereunto set my hand this 10th day of July,
1996.
/s/ Mary J. Cronin
----------------------------
MARY J. CRONIN
<PAGE> 47
POWER OF ATTORNEY
The undersigned Trustee of WWW Trust, an Ohio business trust, which
anticipates filing with the Securities and Exchange Commission, Washington, DC,
under the provisions of the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, a registration statement on Form
N-1A, hereby constitutes and appoints LAWRENCE S. YORK with full power of
substitution and resubstitution, as attorney to sign for the undersigned and in
my name, place and stead, as Trustee of said Trust, said registration statement
and any and all amendments and exhibits thereto, and any and all applications
and documents to be filed with the Securities and Exchange Commission pertaining
to such registration statement, with full power and authority to do and perform
any and all acts and things whatsoever requisite, necessary or advisable to be
done in the premises, as fully and for all intents and purposes as the
undersigned could do if personally present, hereby approving the acts of said
attorney, and any such substitute.
IN WITNESS WHEREOF, I have hereunto set my hand this 10th day of July,
1996.
/s/ Charles F. Haywood
-------------------------
CHARLES F. HAYWOOD
<PAGE> 48
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
<S> <C>
(1) Amended and Restated Declaration of Trust.*
(2) By-laws.*
(5) Management Agreement between Registrant and WWW Advisors, Inc.*
(8) Custody Agreement.
(9a) Transfer Agency and Service Agreement.
(9b) Fund Accounting Service Agreement.
(9c) Administrative Service Agreement.
(10) Opinion and Consent of Counsel.
(11) Consent of Independent Auditors.
(13) Purchase Agreement for Initial Capital between Registrant and WWW Advisors,
Inc.
(15) Distribution and Shareholder Servicing Plan.*
(17) Financial Data Schedule meeting the requirements of Rule 483 under the Securities
Act of 1933.
<FN>
*Previously filed.
</TABLE>
<PAGE> 1
Exhibit (8)
-----------
CUSTODY AGREEMENT
This agreement (the "Agreement") is entered into as of the 28th day of
June, 1996 by and between WWW Internet, (the "Fund"), an open-end diversified
investment business trust organized under the laws of Ohio and having its office
at 525 Vine Street, Suite 1300, Cincinnati, Ohio and Star Bank, National
Association, (the "Custodian"), a national banking association having its
principal office at 425 Walnut Street, Cincinnati, Ohio, 45202.
WHEREAS, the Fund and the Custodian desire to enter into this Agreement
to provide for the custody and safekeeping of the assets of the Fund as required
by the Investment Company Act of 1940, as amended (the "Act").
WHEREAS, the Fund hereby appoints the Custodian as custodian of all the
Fund's Securities and moneys at any time owned by the Fund during the term of
this Agreement (the "Fund Assets").
WHEREAS, the Custodian hereby accepts such appointment as Custodian and
agrees to perform the duties thereof as hereinafter set forth.
THEREFORE, in consideration of the mutual promises hereinafter set
forth, the Fund and the Custodian agree as follows:
ARTICLE I
DEFINITIONS
-----------
The following words and phrases, when used in this Agreement, unless
the context otherwise requires, shall have the following meanings:
AUTHORIZED PERSON - the Chairman, President, Secretary, Treasurer,
Controller, or Senior Vice President of the Fund, or any other person, whether
or not any such person is an officer or
<PAGE> 2
employee of the Fund, duly authorized by the Board of Trustees of the Fund to
give Oral Instructions and Written Instructions on behalf of the Fund, and
listed in the Certificate annexed hereto as Appendix A, or such other
Certificate as may be received by the Custodian from time to time.
BOOK-ENTRY SYSTEM - the Federal Reserve Bank book-entry system for
United States Treasury securities and federal agency securities.
DEPOSITORY - The Depository Trust Company ("DTC"), a limited purpose
trust company its successor(s) and its nominee(s) or any other person or
clearing agent
DIVIDEND AND TRANSFER AGENT - the dividend and transfer agent
appointed, from time to time, pursuant to a written agreement between the
dividend and transfer agent and the Fund
FOREIGN SECURITIES - a) securities issued and sold primarily outside of
the United States by a foreign government, a national of any foreign country, or
a trust or other organization incorporated or organized under the laws of any
foreign country or; b) securities issued or guaranteed by the government of the
United States, by any state, by any political subdivision or agency thereof, or
by any entity organized under the laws of the United States or of any state
thereof, which have been issued and sold primarily outside of the United States.
MONEY MARKET SECURITY - debt obligations issued or guaranteed as to
principal and/or interest by the government of the United States or agencies or
instrumentalities thereof, commercial paper, obligations (including certificates
of deposit, bankers' acceptances, repurchase agreements and reverse repurchase
agreements with respect to the same), and time deposits of domestic banks and
thrift institutions whose deposits are insured by the Federal Deposit Insurance
Corporation, and short-term corporate obligations where the purchase and sale of
such securities
2
<PAGE> 3
normally require settlement in federal funds or their equivalent on the same day
as such purchase and sale, all of which mature in not more than thirteen (13)
months.
OFFICERS - the Chairman, President, Secretary, Treasurer, Controller,
and Senior Vice President of the Fund listed in the Certificate annexed hereto
as Appendix A, or such other Certificate as may be received by the Custodian
from time to time.
ORAL INSTRUCTIONS - verbal instructions received by the Custodian from
an Authorized Person (or from a person that the Custodian reasonably believes in
good faith to be an Authorized Person) and confirmed by Written Instructions in
such a manner that such Written Instructions are received by the Custodian on
the business day immediately following receipt of such Oral Instructions.
PROSPECTUS - the Fund's then currently effective prospectus and
Statement of Additional Information, as filed with and declared effective from
time to time by the Securities and Exchange Commission.
SECURITY OR SECURITIES - Money Market Securities, common stock,
preferred stock, options, financial futures, bonds, notes, debentures, corporate
debt securities, mortgages, 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 interest therein, or any
property or assets.
WRITTEN INSTRUCTIONS - communication received in writing by the
Custodian from an Authorized Person.
3
<PAGE> 4
ARTICLE II
DOCUMENTS AND NOTICES TO BE FURNISHED BY THE FUND
-------------------------------------------------
A. The following documents, including any amendments thereto, will be
provided contemporaneously with the execution of the Agreement, to the Custodian
by the Fund:
1. A copy of the Articles of Incorporation of the Fund
certified by the Secretary.
2. A copy of the By-Laws of the Fund certified by the
Secretary.
3. A copy of the resolution of the Board of Trustees of the
Fund appointing the Custodian, certified by the Secretary.
4. A copy of the then current Prospectus.
5. A Certificate of the President and Secretary of the Fund
setting forth the names and signatures of the Officers of the Fund.
B. The Fund agrees to notify the Custodian in writing of the
appointment of any Dividend and Transfer Agent.
ARTICLE III
RECEIPT OF FUND ASSETS
----------------------
A. During the term of this Agreement, the Fund will deliver or cause to
be delivered to the Custodian all moneys constituting Fund Assets. The Custodian
shall be entitled to reverse any deposits made on the Fund's behalf where such
deposits have been entered and moneys are not finally collected within 30 days
of the making of such entry.
4
<PAGE> 5
B. During the term of this Agreement, the Fund will deliver or cause to
be delivered to the Custodian all Securities constituting Fund Assets. The
Custodian will not have any duties or responsibilities with respect to such
Securities until actually received by the Custodian.
C. As and when received, the Custodian shall deposit to the account(s)
of the Fund any and all payments for shares of the Fund issued or sold from time
to time as they are received from the Fund's distributor or Dividend and
Transfer Agent or from the Fund itself.
ARTICLE IV
DISBURSEMENT OF FUND ASSETS
---------------------------
A. The Fund shall furnish to the Custodian a copy of the resolution of
the Board of Trustees of the Fund, certified by the Fund's Secretary, either (i)
setting forth the date of the declaration of any dividend or distribution in
respect of shares of the Fund, the date of payment thereof, the record date as
of which Fund shareholders entitled to payment shall be determined, the amount
payable per share to Fund shareholders of record as of that date, and the total
amount to be paid by the Dividend and Transfer Agent on the payment date, OR
(ii) authorizing the declaration of dividends and distributions in respect of
shares of the Fund on a daily basis and authorizing the Custodian to rely on a
Certificate setting forth the date of the declaration of any such dividend or
distribution, the date of payment thereof, the record date as of which Fund
shareholders entitled to payment shall be determined, the amount payable per
share to Fund shareholders of record as of that date, and the total amount to be
paid by the Dividend and Transfer Agent on the payment date.
5
<PAGE> 6
On the payment date specified in such resolution or Certificate
described above, the Custodian shall segregate such amounts from moneys held for
the account of the Fund so that they are available for such payment.
B. Upon receipt of Written Instructions so directing it, the Custodian
shall segregate amounts necessary for the payment of redemption proceeds to be
made by the Dividend and Transfer Agent from moneys held for the account of the
Fund so that they are available for such payment.
C. Upon receipt of a Certificate directing payment and setting forth
the name and address of the person to whom such payment is to be made, the
amount of such payment, and the purpose for which payment is to be made, the
Custodian shall disburse amounts as and when directed from the Fund Assets. The
Custodian is authorized to rely on such directions and shall be under no
obligation to inquire as to the propriety of such directions.
D. Upon receipt of a Certificate directing payment, the Custodian shall
disburse moneys from the Fund Assets in payment of the Custodian's fees and
expenses as provided in Article VIII hereof.
ARTICLE V
CUSTODY OF FUND ASSETS
----------------------
A. The Custodian shall open and maintain a separate bank account or
accounts in the United States in the name of the Fund, subject only to draft or
order by the Custodian acting pursuant to the terms of this Agreement, and shall
hold all cash received by it from or for the account of the Fund, other than
cash maintained by the Fund in a bank account established and used by the Fund
in accordance with Rule 17f-3 under the Act. Moneys held by the Custodian
6
<PAGE> 7
on behalf of the Fund may be deposited by the Custodian to its credit as
Custodian in the banking department of the Custodian. Such moneys shall be
deposited by the Custodian in its capacity as such, and shall be withdrawable by
the Custodian only in such capacity.
B. The Custodian shall hold all Securities delivered to it in
safekeeping in a separate account or accounts maintained at Star Bank, N.A. for
the benefit of the Fund.
C. All Securities held which are issued or issuable only in bearer
form, shall be held by the Custodian in that form; all other Securities held for
the Fund shall be registered in the name of the Custodian or its nominee. The
Fund agrees to furnish to the Custodian appropriate instruments to enable the
Custodian to hold, or deliver in proper form for transfer, any Securities that
it may hold for the account of the Fund and which may, from time to time, be
registered in the name of the Fund.
D. With respect to all Securities held for the Fund , the Custodian
shall on a timely basis (concerning items 1 and 2 below, as defined in the
Custodian's Standards of Service Guide, as amended from time to time, annexed
hereto as Appendix C):
1.) Collect all income due and payable with respect to such
Securities;
2.) Present for payment and collect amounts payable upon all
Securities which may mature or be called, redeemed, or retired, or
otherwise become payable;
3.) Surrender Securities in temporary form for definitive
Securities; and
4.) Execute, as agent, any necessary declarations or
certificates of ownership under the Federal income tax laws or the laws
or regulations of any other taxing authority, including any foreign
taxing authority, now or hereafter in effect.
7
<PAGE> 8
E. Upon receipt of a Certificate AND NOT OTHERWISE, the Custodian
shall:
1.) Execute and deliver to such persons as may be designated
in such Certificate proxies, consents, authorizations, and any other
instruments whereby the authority of the Fund as beneficial owner of
any Securities may be exercised;
2.) Deliver any Securities in exchange for other Securities or
cash issued or paid in connection with the liquidation, reorganization,
refinancing, merger, consolidation, or recapitalization of any trust,
or the exercise of any conversion privilege;
3.) Deliver any Securities to any protective committee,
reorganization committee, or other person in connection with the
reorganization, refinancing, merger, consolidation, recapitalization,
or sale of assets of any trust, 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;
4.) Make such transfers or exchanges of the assets of the Fund
and take such other steps as shall be stated in said Certificate to be
for the purpose of effectuating any duly authorized plan of
liquidation, reorganization, merger, consolidation or recapitalization
of the Fund; and
5.) Deliver any Securities held for the Fund to the depository
agent for tender or other similar offers.
F. The Custodian shall promptly deliver to the Fund all notices, proxy
material and executed but unvoted proxies pertaining to shareholder meetings of
Securities held by the Fund. The Custodian shall not vote or authorize the
voting of any Securities or give any consent, waiver or approval with respect
thereto unless so directed by a Certificate or Written Instruction.
8
<PAGE> 9
G. The Custodian shall promptly deliver to the Fund all information
received by the Custodian and pertaining to Securities held by the Fund with
respect to tender or exchange offers, calls for redemption or purchase, or
expiration of rights.
ARTICLE VI
PURCHASE AND SALE OF SECURITIES
-------------------------------
A. Promptly after each purchase of Securities by the Fund, the Fund
shall deliver to the Custodian (i) with respect to each purchase of Securities
which are not Money Market Securities, Written Instructions, and (ii) with
respect to each purchase of Money Market Securities, Written Instructions or
Oral Instructions, specifying with respect to each such purchase the;
1.) name of the issuer and the title of the Securities,
2.) principal amount purchased and accrued interest, if any,
3.) date of purchase and settlement,
4.) purchase price per unit,
5.) total amount payable, and
6.) name of the person from whom, or the broker through which,
the purchase was made.
The Custodian shall, against receipt of Securities purchased by or for the Fund,
pay out of the Fund Assets, the total amount payable to the person from whom or
the broker through which the purchase was made, provided that the same conforms
to the total amount payable as set forth in such Written Instructions or Oral
Instructions, as the case may be.
9
<PAGE> 10
B. Promptly after each sale of Securities by the Fund, the Fund shall
deliver to the Custodian (i) with respect to each sale of Securities which are
not Money Market Securities, Written Instructions, and (ii) with respect to each
sale of Money Market Securities, Written Instructions or Oral Instructions,
specifying with respect to each such sale the;
1.) name of the issuer and the title of the Securities,
2.) principal amount sold and accrued interest, if any,
3.) date of sale and settlement,
4.) sale price per unit,
5.) total amount receivable, and
6.) name of the person to whom, or the broker through which,
the sale was made.
The Custodian shall deliver the Securities against receipt of the total amount
receivable, provided that the same conforms to the total amount receivable as
set forth in such Written Instructions or Oral Instructions, as the case may be.
C. On contractual settlement date, the account of the Fund will be
charged for all purchased Securities settling on that day, regardless of whether
or not delivery is made. Likewise, on contractual settlement date, proceeds from
the sale of Securities settling that day will be credited to the account of the
Fund, irrespective of delivery.
D. Purchases and sales of Securities effected by the Custodian will be
made on a delivery versus payment basis. The Custodian may, in its sole
discretion, upon receipt of a Certificate, elect to settle a purchase or sale
transaction in some other manner, but only upon receipt of acceptable
indemnification from the Fund.
10
<PAGE> 11
E. The Custodian shall, upon receipt of a Written Instructions so
directing it, establish and maintain a segregated account or accounts for and on
behalf of the Fund. Cash and/or Securities may be transferred into such account
or accounts for specific purposes, to-wit:
1.) in accordance with the provision of any agreement among
the Fund, the Custodian, and a broker-dealer registered under the
Securities and Exchange Act of 1934, as amended, and also a member of
the National Association of Securities Dealers (NASD) (or any futures
commission merchant registered under the Commodity Exchange Act),
relating to compliance with the rules of the Options Clearing
Corporation and of any registered national securities exchange, the
Commodity Futures Trading Commission, any registered contract market,
or any similar organization or organizations requiring escrow or other
similar arrangements in connection with transactions by the Fund;
2.) for purposes of segregating cash or government securities
in connection with options purchased, sold, or written by the Fund or
commodity futures contracts or options thereon purchased or sold by the
Fund;
3.) for the purpose of compliance by the fund with the
procedures required for reverse repurchase agreements, firm commitment
agreements, standby commitment agreements, and short sales by Act
Release No. 10666, or any subsequent release or releases or rule of the
Securities and Exchange Commission relating to the maintenance of
segregated accounts by registered investment companies; and
4.) for other corporate purposes, ONLY IN THE CASE OF THIS
CLAUSE 4 upon receipt of a copy of a resolution of the Board of
Trustees of the Fund, certified by the Secretary of the Fund, setting
forth the purposes of such segregated account.
11
<PAGE> 12
F. Except as otherwise may be agreed upon by the parties hereto, the
Custodian shall not be required to comply with any Written Instructions to
settle the purchase of any Securities on behalf of the Fund unless there is
sufficient cash in the account(s) at the time or to settle the sale of any
Securities from an account(s) unless such Securities are in deliverable form.
Notwithstanding the foregoing, if the purchase price of such Securities exceeds
the amount of cash in the account(s) at the time of such purchase, the Custodian
may, in its sole discretion, advance the amount of the difference in order to
settle the purchase of such Securities. The amount of any such advance shall be
deemed a loan from the Custodian to the Fund payable on demand and bearing
interest accruing from the date such loan is made up to but not including the
date such loan is repaid at a rate per annum customarily charged by the
Custodian on similar loans.
ARTICLE VII
FUND INDEBTEDNESS
-----------------
In connection with any borrowings by the Fund, the Fund will cause to
be delivered to the Custodian by a bank or broker requiring Securities as
collateral for such borrowings (including the Custodian if the borrowing is from
the Custodian), a notice or undertaking in the form currently employed by such
bank or broker setting forth the amount of collateral. The Fund shall promptly
deliver to the Custodian a Certificate specifying with respect to each such
borrowing: (a) the name of the bank or broker, (b) the amount and terms of the
borrowing, which may be set forth by incorporating by reference an attached
promissory note duly endorsed by the Fund, or a loan agreement, (c) the date,
and time if known, on which the loan is to be entered into, (d) the date on
which the loan becomes due and payable, (e) the total amount payable to
12
<PAGE> 13
the Fund on the borrowing date, and (f) the description of the Securities
securing the loan, including the name of the issuer, the title and the number of
shares or the principal amount. The Custodian shall deliver on the borrowing
date specified in the Certificate the required collateral against the lender's
delivery of the total loan amount then payable, provided that the same conforms
to that which is described in the Certificate. The Custodian shall deliver, in
the manner directed by the Fund, such Securities as additional collateral, as
may be specified in a Certificate, to secure further any transaction described
in this Article VII. The Fund shall cause all Securities released from
collateral status to be returned directly to the Custodian and the Custodian
shall receive from time to time such return of collateral as may be tendered to
it.
The Custodian may, at the option of the lender, keep such collateral in
its possession, subject to all rights therein given to the lender because of the
loan. The Custodian may require such reasonable conditions regarding such
collateral and its dealings with third-party lenders as it may deem appropriate.
ARTICLE VIII
CONCERNING THE CUSTODIAN
------------------------
A. Except as otherwise provided herein, the Custodian shall not be
liable for any loss or damage resulting from its action or omission to act or
otherwise, except for any such loss or damage arising out of its own gross
negligence or willful misconduct. The Fund shall defend, indemnify and hold
harmless the Custodian and its directors, officers, employees and agents with
respect to any loss, claim, liability or cost (including reasonable attorneys'
fees) arising or alleged to arise from or relating to the Fund's duties
hereunder or any other action or inaction of the Fund or its Trustees, officers,
employees or agents, except such as may arise from the negligent
13
<PAGE> 14
action, omission, willful misconduct or breach of this Agreement by the
Custodian. The Custodian may, with respect to questions of law, apply for and
obtain the advice and opinion of counsel, at the expense of the Fund, and shall
be fully protected with respect to anything done or omitted by it in good faith
in conformity with the advice or opinion of counsel. The provisions under this
paragraph shall survive the termination of this Agreement.
B. Without limiting the generality of the foregoing, the Custodian,
acting in the capacity of Custodian hereunder, shall be under no obligation to
inquire into, and shall not be liable for:
1.) The validity of the issue of any Securities purchased by
or for the account of the Fund, the legality of the purchase thereof,
or the propriety of the amount paid therefor;
2.) The legality of the sale of any Securities by or for the
account of the Fund, or the propriety of the amount for which the same
are sold;
3.) The legality of the issue or sale of any shares of the
Fund, or the sufficiency of the amount to be received therefor;
4.) The legality of the redemption of any shares of the Fund,
or the propriety of the amount to be paid therefor;
5.) The legality of the declaration or payment of any dividend
by the Fund in respect of shares of the Fund;
6.) The legality of any borrowing by the Fund on behalf of the
Fund, using Securities as collateral;
C. The Custodian shall not be under any duty or obligation to take
action to effect collection of any amount due to the Fund from any Dividend and
Transfer Agent of the Fund
14
<PAGE> 15
nor to take any action to effect payment or distribution by any Dividend and
Transfer Agent of the Fund of any amount paid by the Custodian to any Dividend
and Transfer Agent of the Fund in accordance with this Agreement.
D. Notwithstanding Section D of Article V, the Custodian shall not be
under any duty or obligation to take action to effect collection of any amount,
if the Securities upon which such amount is payable are in default, or if
payment is refused after due demand or presentation, unless and until (i) it
shall be directed to take such action by a Certificate and (ii) it shall be
assured to its satisfaction (including prepayment thereof) of reimbursement of
its costs and expenses in connection with any such action.
E. The Fund acknowledges and hereby authorizes the Custodian to hold
Securities through its various agents described in Appendix B annexed hereto.
The Fund hereby represents that such authorization has been duly approved by the
Board of Trustees of the Fund as required by the Act. The Custodian acknowledges
that although certain Fund Assets are held by its agents, the Custodian remains
primarily liable for the safekeeping of the Fund Assets.
In addition, the Fund acknowledges that the Custodian may appoint one
or more financial institutions, as agent or agents or as sub-custodian or
sub-custodians, including, but not limited to, banking institutions located in
foreign countries, for the purpose of holding Securities and moneys at any time
owned by the Fund. The Custodian shall not be relieved of any obligation or
liability under this Agreement in connection with the appointment or activities
of such agents or sub-custodians. Any such agent or sub-custodian shall be
qualified to serve as such for assets of investment companies registered under
the Act. Upon request, the Custodian shall promptly forward to the Fund any
documents it receives from any agent or sub-custodian appointed
15
<PAGE> 16
hereunder which may assist trustees of registered investment companies fulfill
their responsibilities under Rule 17f-5 of the Act.
F. The Custodian shall not be under any duty or obligation to ascertain
whether any Securities at any time delivered to or held by it for the account of
the Fund are such as properly may be held by the Fund under the provisions of
the Articles of Incorporation and the Fund's By-Laws.
G. The Custodian shall treat all records and other information relating
to the Fund and the Fund Assets as confidential and shall not disclose any such
records or information to any other person unless (i) the Fund shall have
consented thereto in writing or (ii) such disclosure is required by law.
H. The Custodian shall be entitled to receive and the Fund agrees to
pay to the Custodian such compensation as shall be determined pursuant to
Appendix D attached hereto, or as shall be determined pursuant to amendments to
such Appendix D. The Custodian shall be entitled to charge against any money
held by it for the account of the Fund, the amount of any of its fees, any loss,
damage, liability or expense, including counsel fees. The expenses which the
Custodian may charge against the account of the Fund include, but are not
limited to, the expenses of agents or sub-custodians incurred in settling
transactions involving the purchase and sale of Securities of the Fund.
I. The Custodian shall be entitled to rely upon any Oral Instructions
and any Written Instructions. The Fund agrees to forward to the Custodian
Written Instructions confirming Oral Instructions in such a manner so that such
Written Instructions are received by the Custodian, whether by hand delivery,
facsimile or otherwise, on the same business day on which such Oral Instructions
were given. The Fund agrees that the failure of the Custodian to receive such
16
<PAGE> 17
confirming instructions shall in no way affect the validity of the transactions
or enforceability of the transactions hereby authorized by the Fund. The Fund
agrees that the Custodian shall incur no liability to the Fund for acting upon
Oral Instructions given to the Custodian hereunder concerning such transactions.
J. The Custodian will (i) set up and maintain proper books of account
and complete records of all transactions in the accounts maintained by the
Custodian hereunder in such manner as will meet the obligations of the Fund
under the Act, with particular attention to Section 31 thereof and Rules 31a-1
and 31a-2 thereunder and those records are the property of the Fund, and (ii)
preserve for the periods prescribed by applicable Federal statute or regulation
all records required to be so preserved. All such books and records shall be the
property of the Fund, and shall be open to inspection and audit at reasonable
times and with prior notice by Officers and auditors employed by the Fund.
K. The Custodian shall send to the Fund any report received on the
systems of internal accounting control of the Custodian, or its agents or
sub-custodians, as the Fund may reasonably request from time to time.
L. The Custodian performs only the services of a custodian and shall
have no responsibility for the management, investment or reinvestment of the
Securities from time to time owned by the Fund. The Custodian is not a selling
agent for shares of the Fund and performance of its duties as custodian shall
not be deemed to be a recommendation to the Fund's depositors or others of
shares of the Fund as an investment.
M. The Custodian shall take all reasonable action, that the Fund may
from time to time request, to assist the Fund in obtaining favorable opinions
from the Fund's independent accountants, with respect to the Custodian's
activities hereunder, in connection with the
17
<PAGE> 18
preparation of the Fund's Form N-1A, Form N-SAR, or other annual reports to the
Securities and Exchange Commission.
N. The Fund hereby pledges to and grants the Custodian a security
interest in any Fund Assets to secure the payment of any liabilities of the Fund
to the Custodian, whether acting in its capacity as Custodian or otherwise, or
on account of money borrowed from the Custodian. This pledge is in addition to
any other pledge of collateral by the Fund to the Custodian.
ARTICLE X
TERMINATION
-----------
A. Either of the parties hereto may terminate this Agreement for any
reason by giving to the other party a notice in writing specifying the date of
such termination, which shall be not less than ninety (90) days after the date
of giving of such notice. If such notice is given by the Fund, it shall be
accompanied by a copy of a resolution of the Board of Trustees of the Fund,
certified by the Secretary of the Fund, electing to terminate this Agreement and
designating a successor custodian or custodians. In the event such notice is
given by the Custodian, the Fund shall, on or before the termination date,
deliver to the Custodian a copy of a resolution of the Board of Trustees of the
Fund, certified by the Secretary, designating a successor custodian or
custodians to act on behalf of the Fund. In the absence of such designation by
the Fund, the Custodian may designate a successor custodian which shall be a
bank or trust company having not less than $100,000,000 aggregate capital,
surplus, and undivided profits. Upon the date set forth in such notice this
Agreement shall terminate, and the Custodian, provided that it has received a
notice of acceptance by the successor custodian, shall deliver, on that date,
directly to the successor custodian all Securities and moneys then owned by the
Fund and held by it as
18
<PAGE> 19
Custodian. Upon termination of this Agreement, the Fund shall pay to the
Custodian on behalf of the Fund such compensation as may be due as of the date
of such termination. The Fund agrees on behalf of the Fund that the Custodian
shall be reimbursed for its reasonable costs in connection with the termination
of this Agreement.
B. If a successor custodian is not designated by the Fund, or by the
Custodian in accordance with the preceding paragraph, or the designated
successor cannot or will not serve, the Fund shall, upon the delivery by the
Custodian to the Fund of all Securities (other than Securities held in the
Book-Entry System which cannot be delivered to the Fund) and moneys then owned
by the Fund, be deemed to be the custodian for the Fund, and the Custodian shall
thereby be relieved of all duties and responsibilities pursuant to this
Agreement, other than the duty with respect to Securities held in the Book-Entry
System, which cannot be delivered to the Fund, which shall be held by the
Custodian in accordance with this Agreement.
ARTICLE XI
MISCELLANEOUS
-------------
A. Appendix A sets forth the names and the signatures of all Authorized
Persons, as certified by the Secretary of the Fund. The Fund agrees to furnish
to the Custodian a new Appendix A in form similar to the attached Appendix A, if
any present Authorized Person ceases to be an Authorized Person or if any other
or additional Authorized Persons are elected or appointed. Until such new
Appendix A shall be received, the Custodian shall be fully protected in acting
under the provisions of this Agreement upon Oral Instructions or signatures of
the then current Authorized Persons as set forth in the last delivered Appendix
A.
19
<PAGE> 20
B. No recourse under any obligation of this Agreement or for any claim
based thereon shall be had against any organizer, shareholder, Officer,
Director, past, present or future as such, of the Fund or of any predecessor or
successor, either directly or through the Fund or any such predecessor or
successor, whether by virtue of any constitution, statute or rule of law or
equity, or be the enforcement of any assessment or penalty or otherwise; it
being expressly agreed and understood that this Agreement and the obligations
thereunder are enforceable solely against the Fund, and that no such personal
liability whatever shall attach to, or is or shall be incurred by, the
organizers, shareholders, Officers, Trustees of the Fund or of any predecessor
or successor, or any of them as such. To the extent that any such liability
exists, it is hereby expressly waived and released by the Custodian as a
condition of, and as a consideration for, the execution of this Agreement.
C. The obligations set forth in this Agreement as having been made by
the Fund have been made by the Board of Trustees, acting as such Trustees for
and on behalf of the Fund, pursuant to the authority vested in them under the
laws of the State of Ohio, the Articles of Incorporation and the By-Laws of the
Fund. This Agreement has been executed by Officers of the Fund as officers, and
not individually, and the obligations contained herein are not binding upon any
of the Trustees, Officers, agents or holders of shares, personally, but bind
only the Fund.
D. Provisions of the Prospectus and any other documents (including
advertising material) specifically mentioning the Custodian (other than merely
by name and address) shall be reviewed with the Custodian by the Fund prior to
publication and/or dissemination or distribution, and shall be subject to the
consent of the Custodian.
20
<PAGE> 21
E. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Custodian, shall be sufficiently given if
addressed to the Custodian and mailed or delivered to it at its offices at Star
Bank Center, 425 Walnut Street, M. L. 6118, Cincinnati, Ohio 45202, attention
Mutual Fund Custody Department, or at such other place as the Custodian may from
time to time designate in writing.
F. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Fund shall be sufficiently given when
delivered to the Fund or on the second business day following the time such
notice is deposited in the U.S. mail postage prepaid and addressed to the Fund
at its office at 131 Prosperous Place, Lexington, KY 40509 or at such other
place as the Fund may from time to time designate in writing.
G. This Agreement, with the exception of the Appendices, may not be
amended or modified in any manner except by a written agreement executed by both
parties with the same formality as this Agreement, and authorized and approved
by a resolution of the Board of Trustees of the Fund.
H. This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided, however, that
this Agreement shall not be assignable by the Fund or by the Custodian, and no
attempted assignment by the Fund or the Custodian shall be effective without the
written consent of the other party hereto.
I. This Agreement shall be construed in accordance with the laws of the
State of Ohio.
J. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but such counterparts shall,
together, constitute only one instrument.
21
<PAGE> 22
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective Officers, thereunto duly authorized as of the day
and year first above written.
ATTEST: WWW INTERNET FUND
/s/ Janet A. Wilson By: /s/ Lawrence York
- -------------------------- -------------------------
Title: President
----------------------
ATTEST: STAR BANK, N.A.
/s/ Gabrielle Jackson By: /s/ Lynnette C. Gibson
- -------------------------- ------------------------
Title: Senior Trust Officer
---------------------
22
<PAGE> 23
APPENDIX A
<TABLE>
<CAPTION>
Authorized Persons Specimen Signatures
------------------ -------------------
<S> <C> <C>
Chairman: Lawrence S. York _______________________
President: Lawrence S. York _______________________
Secretary: _______________________ _______________________
Treasurer: Jim D. Greene _______________________
Controller: _______________________ _______________________
Adviser Employees: Kathy Cornelison _______________________
_______________________ _______________________
_______________________ _______________________
Transfer Agent/Fund
Accountant
Employees: _______________________ _______________________
_______________________ _______________________
_______________________ _______________________
_______________________ _______________________
</TABLE>
23
<PAGE> 24
APPENDIX B
The following agents are employed currently by Star Bank, N.A. for
securities processing and control . . .
The Depository Trust Company (New York)
7 Hanover Square
New York, NY 10004
The Federal Reserve Bank
Cincinnati and Cleveland Branches
Bankers Trust Company
16 Wall Street
New York, NY 10005
(For Foreign Securities and certain non-DTC eligible Securities)
24
<PAGE> 25
APPENDIX C
STANDARDS OF SERVICE GUIDE
25
<PAGE> 26
================================================================================
STANDARDS OF SERVICE GUIDE
STAR BANK, N.A.
MAIL LOCATION #6118,
425 WALNUT STREET,
CINCINNATI, OH 45202
March, 1996
================================================================================
26
<PAGE> 27
STAR BANK, N.A.
STANDARDS OF SERVICE GUIDE
Star Bank, N.A. is committed to providing superior quality service to
all customers and their agents at all times. We have compiled this guide as a
tool for our clients to determine our standards for the processing of security
settlements, payment collection, and capital change transactions. Deadlines
recited in this guide represent the times required for Star Bank to guarantee
processing. Failure to meet these deadlines will result in settlement at our
client's risk. In all cases, Star Bank will make every effort to compete all
processing on a timely basis.
Star Bank is a direct participant of the Depository Trust Company, a
direct member of the Federal Reserve Bank of Cleveland, and utilizes the Bankers
Trust Company as its agent for ineligible and foreign securities.
For corporate reorganizations, Star Bank utilizes SEI's Reorg Source,
Financial Information, Inc., XCITEK, DTC Important Notices, and the Wall Street
Journal.
For bond calls and mandatory puts, Star Bank utilizes SEI's Bond
Source, Kenny Information Systems, Standard & Poor's Corporation, and DTC
Important Notices. Star Bank will not notify clients of optional put
opportunities.
Any securities delivered free to Star Bank or its agents must be
received three (3) business days prior to any payment or settlement in order for
the Star Bank standards of service to apply.
Should you have any questions regarding the information contained in
this guide, please feel free to contract your account representative.
The information contained in this Standards of Service Guide
is subject to change. Should any changes be made Star Bank
will provide you with an updated copy of its Standards of
Service Guide.
27
<PAGE> 28
STAR BANK SECURITY SETTLEMENT STANDARDS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TRANSACTION TYPE INSTRUCTIONS DEADLINES* DELIVERY INSTRUCTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
DTC 1:30 P.M. on Settlement Date DTC Participant #2219
Agent Bank ID 27895
Institutional # _______________
For Account # ____________
Federal Reserve Book Entry 12:30 P.M. on Settlement Date Federal Reserve Bank of Cinti/Trust
for Star Ban, N.A. ABA #042000013
For Account # ____________
Federal Reserve Book Entry (Repurchase 1:00 P.M. on Settlement Date Federal Reserve Bank of Cinti/Spec
Agreement Collateral Only) for Star Bank, N.A. ABA #042000013
For Account #____________
PTC Securities 12:00 P.M. on Settlement Date PTC For Account BTRST/CUST
(GNMA Book Entry) Sub Account: Star Bank, N.A. #090334
Physical Securities 9:30 A.M. EST on Settlement Date (for Bankers Trust Company
Deliveries, by 4:00 P.M. on Settlement Date 16 Wall Street 4th Floor, Window 43
minus 1) for Star Bank Account #090334
</TABLE>
28
<PAGE> 29
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TRANSACTION TYPE INSTRUCTIONS DEADLINES* DELIVERY INSTRUCTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CEDEL/EURO-CLEAR 11:00 A.M. on Settlement Date minus 2 Euroclear Via Cedel Bridge
In favor of Bankers Trust Comp
Cedel 53355
For Star Bank Account #501526354
Cash Wire Transfer 3:00 P.M. Star Bank, N.A. Cinti/Trust ABA
#042000013
Credit Account #9901877
Further Credit to __________
Account #_______________
<FN>
* All times listed are Eastern Standard Time.
</TABLE>
29
<PAGE> 30
STAR BANK PAYMENT STANDARDS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
SECURITY TYPE INCOME PRINCIPAL
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Equities Payable Date
Municipal Bonds* Payable Date Payable Date
Corporate Bonds* Payable Date Payable Date
Federal Reserve Bank Book Entry* Payable Date Payable Date
PTC GNMA's (P&I) Payable Date +1 Payable Date +1
CMOs*
DTC Payable Date +1 Payable Date +1
Bankers Trust Payable Date +1 Payable Date +1
SBA Loan Certificates When Received When Received
Unit Investment Trust Certificates* Payable Date Payable Date
Certificates of Deposit* Payable Date +1 Payable Date +1
Limited Partnerships When Received When Received
Foreign Securities When Received When Received
*Variable Rate Securities
Federal Reserve Bank Book Entry Payable Date Payable Date
DTC Payable Date +1 Payable Date +1
Bankers Trust Payable Date +1 Payable Date +1
<FN>
NOTE: If a payable date falls on a weekend or bank holiday, payment will be
made on the immediately following business day.
</TABLE>
30
<PAGE> 31
STAR BANK CORPORATE REORGANIZATION STANDARDS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TYPE OF ACTION NOTIFICATION TO CLIENT DEADLINE FOR CLIENT TRANSACTION
INSTRUCTIONS TO STAR BANK POSTING
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Rights, Warrants, and Later of 10 business days prior to expiration 5 business days prior to expiration Upon receipt
Optional Mergers or receipt of notice
Mandatory Puts with Option Later of 10 business days prior to expiration 5 business days prior to expiration Upon receipt
to Retain or receipt of notice
Class Actions 10 business days prior to expiration date 5 business days prior to expiration Upon receipt
Voluntary Tenders, Later of 10 business days prior to expiration 5 business days prior to expiration Upon receipt
Exchanges, and Conversions or receipt of notice
Mandatory Puts, Defaults, At posting of funds or securities received None Upon receipt
Liquidations, Bankruptcies,
Stock Splits, Mandatory
Exchanges
Full and Partial Calls Later of 10 business days prior to expiration None Upon receipt
or receipt of notice
<FN>
NOTE: Fractional shares/par amounts resulting from any of the above will be sold.
</TABLE>
31
<PAGE> 32
APPENDIX D
SCHEDULE OF COMPENSATION
32
<PAGE> 33
STAR BANK, N.A.
PROPOSED DOMESTIC CUSTODY FEE SCHEDULE FOR R H YORK AND COMPANY
<TABLE>
<CAPTION>
I. Portfolio Transaction Fees:
---------------------------
<S> <C> <C> <C>
(a) For each repurchase agreement transaction $7.00
(b) For each portfolio transaction processed through
DTC of Federal Reserve $9.00
(c) For each portfolio transaction processed through
our New York custodian $25.00
(d) For each GNMA/Amortized Security Purchase $16.00
(e) For each GNMA Prin/Int Paydown, GNMA Sales $8.00
(f) For each option/future contract written,
exercised or expired $40.00
(g) For each Cedel/Euro clear transaction $80.00
(h) For each Disbursement (Fund expenses only) $5.00
A transaction is a purchase/sale of a security, free receipt/free delivery
(excludes initial conversion, maturity, tender or exchange.
II. MARKET VALUE FEE
----------------
Based upon an annual rate of: Million
-------
.0003 (3 Basis Points) on First $20
.0002 (2 Basis Points) on Next $20
.00015 (1.5 Basis Points) on Balance
III. MONTHLY MINIMUM FEE-PER FUND $400.00
----------------------------
IV. OUT-OF-POCKET EXPENSES
----------------------
The only out-of-pocket expenses charged to your account will
be shipping fees or transfer fees.
V. IRA DOCUMENTS
-------------
Per Shareholder/year to hold each IRA Document $8.00
VI. EARNINGS CREDITS
----------------
On a monthly basis any earnings generated from uninvested custody
balances will be applied against any cash management service fees
generated. Earnings credits are based on the average yield on the 91 day
U.S. Treasury Bill for the preceding thirteen weeks less the 10%
reserve.
</TABLE>
33
<PAGE> 34
STAR BANK
Proposed Cash Management Fee Schedule For R H York and Company
<TABLE>
<CAPTION>
SERVICES UNIT COST ($) MONTHLY COST ($)
- -------- ------------- ----------------
<S> <C> <C>
D.D.A. Account Maintenance .399 14.00
Deposits .399
Deposited Items .109
Checks Paid .159
Balance Reporting - P.C. Access 50.00
ACH Transaction .095
ACH Monthly Maintenance 40.00
Controlled Disbursement (1st account) 110.00
Each additional account 25.00
Deposited Items Returned 6.00
International Items Returned 10.00
NSF Returned Checks 25.00
Stop Payments 22.00
Data Transmission per account 110.00
Data Capture* .10
Drafts Cleared .179
Lockbox Maintenance** 055.00
Lockbox items Processed
-with copy of check .32
-without copy of check .26
Checks Printed .20
Positive Pay .06
Issued Items .015
Wires Incoming
-Domestic 10.00
-International 10.00
Wires Outgoing
-Domestic
-Repetitive 12.00
-Non-Repetitive 13.00
-International
-Repetitive 35.00
-Non-Repetitive 40.00
PC - Initiated Wires:
-Domestic
-Repetitive 9.00
-Non-Repetitive 9.00
-International
-Repetitive 25.00
-Non-Repetitive 25.00
<FN>
*** Uncollected Charge Star Bank Prime Rate as of first of month plus 4%
* Price can vary depending upon what information needs to be captured
** With the use of lockbox, the collected balance in the demand deposit
account will be significantly increased and therefore earnings to offset
cash management service fees will be maximized
*** Fees for uncollected balances are figured on the MONTHLY AVERAGE of all
combined accounts.
**** Other available cash management services are priced separately. Revised 10/31/95
</TABLE>
34
<PAGE> 35
Star Bank
IRA Fee Schedule for R H York and Company
<TABLE>
<CAPTION>
Annual Charge Per
IRA Shareholder/Per Account
---------------------------
<S> <C> <C> <C>
I. CUSTODY SERVICES $8
----------------
Star Bank will hold each original
IRA shareholder
Agreement
II. TURNKEY IRA SERVICES $14
--------------------
1. Custody of Each Original IRA
Shareholder Agreement (see section I above)
A Turnkey IRA booklet can be provided to you. It includes:
2. IRA Plan Agreement
IRA Disclosure statement
IRA Distribution Election Forms
IRA Withdrawal Forms
*THE FORMS LISTED ABOVE ARE AVAILABLE FOR AN ADDITIONAL FEE.
3. Toll Free Technical Support Line
4. Account Maintenance Reports
Mutual Fund Group Use:
o Monthly Recap Report
o Monthly Required Distribution Report
o Annual 1099-R IRS Magnetic Tape Listing
o Annual 5498 IRS Magnetic Tape Listing (IRA Only)
o Annual 1099-R and 5498 IRS Correction Magnetic Tape Listing
IRA Shareholder receives:
o Annual Fair Market Value Report Or Fair Market Value Statement
o 1099-R Forms
o Annual Status Reports (Substitute 5498) or 5498 Forms
o Election/Required Distribution Notification Letters (Age 69 1/2)
o Annual Notice of Minimum Distribution Forms (Age 70 1/2 and
Over)
5. Financial Innovator Retirement Plan Newsletter
</TABLE>
35
<PAGE> 1
Exhibit 9(a)
TRANSFER AGENCY AND SERVICE AGREEMENT
BETWEEN
WWW INTERNET FUND
AND
AMERICAN DATA SERVICES, INC.
<PAGE> 2
INDEX
-----
<TABLE>
<S> <C>
1. TERMS OF APPOINTMENT; DUTIES OF ADS...........................3
2. FEES AND EXPENSES.............................................4
3. REPRESENTATIONS AND WARRANTIES OF ADS.........................4
4. REPRESENTATIONS AND WARRANTIES OF THE FUND....................5
5. INDEMNIFICATION...............................................5
6. COVENANTS OF THE FUND AND ADS.................................6
7. TERMINATION OF AGREEMENT......................................7
8. ASSIGNMENT....................................................7
9. AMENDMENT.....................................................7
10. NEW YORK LAWS TO APPLY........................................8
11. MERGER OF AGREEMENT...........................................8
12. NOTICES.......................................................8
FEE SCHEDULE...........................................................9
- ------------
(A) ACCOUNT MAINTENANCE CHARGE:...................................9
(B) TRANSACTION FEES:.............................................9
(C) IRA PLAN FEES................................................10
FEE INCREASES.........................................................10
- -------------
(D) EXPENSES:....................................................10
(E) SPECIAL REPORTS:.............................................10
(F) SECURITY DEPOSIT:............................................10
(G) CONVERSION CHARGE............................................11
SCHEDULE A............................................................12
- ----------
</TABLE>
2
<PAGE> 3
TRANSFER AGENCY AND SERVICE AGREEMENT
-------------------------------------
AGREEMENT made the 5TH day of June 1996, by and between WWW Internet Fund having
its principal office and place of business at 525 Vine Street, Suite 1330,
Cincinnati, Ohio 45202 (the "Fund"), and American Data Services, Inc., a New
York corporation having its principal office and place of business at 24 West
Carver Street., Huntington, New York 11743 ("ADS").
WHEREAS, the Fund desires to appoint ADS as its transfer agent,
dividend disbursing agent and agent in connection with certain other activities,
and ADS desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. TERMS OF APPOINTMENT; DUTIES OF ADS
1.01 Subject to the terms and conditions set forth in this agreement,
the Fund hereby employs and appoints ADS to act as, and ADS agrees to act as its
transfer agent for the Fund's authorized and issued shares of its common stock,
("Shares"), dividend disbursing agent and agent in connection with any
accumulation, open-account or similar plans provided to the shareholders of the
fund ("Shareholders") set out in the currently effective prospectus and
statement of additional information ("prospectus") of the Fund.
1.02 ADS agrees that it will perform the following services:
(a) In accordance with procedures established from time to time by
agreement between the Fund and ADS, ADS shall:
(i) Receive for acceptance, orders for the purchase of Shares, and promptly
deliver payment and appropriate documentation therefore to the Custodian of the
Fund authorized by the Board of Directors of the Fund (the "Custodian");
(ii) Pursuant to purchase orders, issue the appropriate number of Shares and
hold such Shares in the appropriate Shareholder account;
(iii) Receive for acceptance redemption requests and redemption directions and
deliver the appropriate documentation therefore to the Custodian;
(iv) At the appropriate time as and when it receives monies paid to it by the
Custodian with respect to any redemption, pay over or cause to be paid over in
the appropriate manner such monies as instructed by the redeeming Shareholders;
(v) Effect transfers of Shares by the registered owners thereof upon receipt of
appropriate instructions;
(vi) Prepare and transmit payments for dividends and distributions declared by
the Fund;
(vii) Maintain records of account for and advise the Fund and its Shareholders
as to the foregoing; and
(viii) Record the issuance of shares of the Fund and maintain pursuant to SEC
Rule 17Ad-10(e) a record of the total number of shares of the Fund which are
authorized, based upon data provided to it by the Fund, and issued and
outstanding. ADS shall also provide the Fund on a regular basis with the total
number of shares which are authorized and issued and outstanding and shall have
no obligation, when recording the issuance of shares, to
3
<PAGE> 4
monitor the issuance of such shares or to take cognizance of any laws relating
to the issue or sale of such shares, which functions shall be the sole
responsibility of the Fund.
(b) In addition to and not in lieu of the services set forth in the
above paragraph (a), ADS shall:
(i) Perform all of the customary services of a transfer agent, dividend
disbursing agent, including but not limited to: maintaining all Shareholder
accounts, preparing Shareholder meeting lists, mailing proxies, receiving and
tabulating proxies, mailing Shareholder reports and prospectuses to current
Shareholders, withholding taxes on U.S. resident and non-resident alien
accounts, preparing and filing U.S. Treasury Department Forms 1099 and other
appropriate forms required with respect to dividends and distributions by
federal authorities for all Shareholders, preparing and mailing confirmation
forms and statements of account to Shareholders for all purchases, redemptions
of Shares and other confirmable transactions in Shareholder accounts, preparing
and mailing activity statements for Shareholders, and providing Shareholder
account information and (ii) provide a system and reports which will enable the
Fund to monitor the total number of Shares sold in each State.
(c) In addition, the Fund shall (i) identify to ADS in writing those
transactions and shares to be treated as exempt from blue sky reporting for each
State and (ii) verify the establishment of such transactions for each state on
the system prior to activation and thereafter monitor the daily activity for
each State as provided by ADS. The responsibility of ADS for the Fund's blue sky
State registration status is solely limited to the initial establishment of
transactions subject to blue sky compliance by the Fund and the reporting of
such transactions to the Fund as provided above.
Procedures applicable to certain of these services may be established
from time to time by agreement between the Fund and ADS.
2. FEES AND EXPENSES
2.01 For performance by ADS pursuant to this Agreement, the Fund agrees
to pay ADS an annual maintenance fee for each Shareholder account and
transaction fees for each portfolio or class of shares serviced under this
Agreement (See Schedule A) as set out in the fee schedule attached hereto. Such
fees and out-of pocket expenses and advances identified under Section 2.02 below
may be changed from time to time subject to mutual written agreement between the
Fund and ADS.
2.02 In addition to the fee paid under Section 2.01 above, the Fund
agrees to reimburse ADS for out-of-pocket expenses or advances incurred by ADS
for the items set out in the fee schedule attached hereto. In addition, any
other expenses incurred by ADS at the request or with the consent of the Fund,
will be reimbursed by the Fund.
2.03 The Fund agrees to pay all fees and reimbursable expenses within
five days following the receipt of the respective billing notice. Postage for
mailing of dividends, proxies, Fund reports and other mailings to all
shareholder accounts shall be advanced to ADS by the Fund at least seven (7)
days prior to the mailing date of such materials.
3. REPRESENTATIONS AND WARRANTIES OF ADS
ADS represents and warrants to the Fund that:
3.01 It is a corporation duly organized and existing and in good
standing under the laws of The State of New York.
4
<PAGE> 5
3.02 It is duly qualified to carry on its business in The State of New
York.
3.03 It is empowered under applicable laws and by its charter and
by-laws to enter into and perform this Agreement.
3.04 All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement.
3.05 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.
3.06 ADS is duly registered as a transfer agent under the Securities
Act of 1934 and shall continue to be registered throughout the remainder of this
Agreement.
4. REPRESENTATIONS AND WARRANTIES OF THE FUND
The Fund represents and warrants to ADS that;
4.01 It is a Business Trust duly organized and existing and in good
standing under the laws of Ohio.
4.02 It is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform this Agreement.
4.03 All corporate proceedings required by said Articles of
Incorporation and By-Laws have been taken to authorize it to enter into and
perform this Agreement.
4.04 It is an open-end and diversified management investment company
registered under the Investment Company Act of 1940.
4.05 A registration statement under the Securities Act of 1933 is
currently or will become effective and will remain effective, and appropriate
state securities law filings as required, have been or will be made and will
continue to be made, with respect to all Shares of the Fund being offered for
sale.
5. INDEMNIFICATION
5.01 ADS shall not be responsible for, and the Fund shall indemnify and
hold ADS harmless from and against, any and all losses, damages, costs, charges,
counsel fees, payments, expenses and liability arising out of or attributable
to:
(a) All actions of ADS or its agents or subcontractors required to be
taken pursuant to this Agreement, provided that such actions are taken in good
faith and without gross negligence or willful misconduct.
(b) The Fund's refusal or failure to comply with the terms of this
Agreement, or which arise out of the Fund's lack good faith, gross negligence or
willful misconduct or which arise out of the breach of any representation or
warranty of the Fund hereunder.
(c) The reliance on or use by ADS or its agents or subcontractors of
information, records and documents which (i) are received by ADS or its agents
or subcontractors and furnished to it by or on behalf of the Fund, and (ii) have
been prepared and/or maintained by the Fund or any other person or firm on
behalf of the Fund.
5
<PAGE> 6
(d) The reliance on, or the carrying out by ADS or its agents or
subcontractors of any instructions or requests of the Fund.
(e) The offer or sale of Shares in violation of any requirement under
the federal securities laws or regulations or the securities laws or regulations
of any state that such Shares be registered in such state or in violation of any
stop order or other determination or ruling by any federal agency or any state
with respect to the offer or sale of such Shares in such state.
5.02 ADS shall indemnify and hold the Fund harmless from and against
any and all losses, damages, costs, charges, counsel fees, payments, expenses
and liability arising out of or attributable to any action or failure or
omission to act by ADS as a result of ADS's lack of good faith, gross negligence
or willful misconduct.
5.03 At any time ADS may apply to any officer of the Fund for
instructions, and may consult with legal counsel with respect to any matter
arising in connection with the services to be performed by ADS under this
Agreement, and ADS and its agents or subcontractors shall not be liable and
shall be indemnified by the Fund for any action taken or omitted by it in
reliance upon such instructions or upon the opinion of such counsel. ADS, its
agents and subcontractors shall be protected and indemnified in acting upon any
paper or document furnished by or on behalf of the Fund, reasonably believed to
be genuine and to have been signed by the proper person or persons, or upon any
instruction, information, data, records or documents provided ADS or its agents
or subcontractors by machine readable input, telex, CRT data entry or other
similar means authorized by the Fund, and shall not be held to have notice of
any change of authority of any person, until receipt of written notice thereof
from the Fund. ADS, its agents and subcontractors shall also be protected and
indemnified in recognizing stock certificates which are reasonably believed to
bear the proper manual or facsimile signatures of the officers of the Fund, and
the proper countersignature of any former transfer agent or registrar, or of a
co-transfer agent or co-registrar.
5.04 In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable for damages to the
other for any damages resulting from such failure to perform or otherwise from
such causes.
5.05 Neither party to this Agreement shall be liable to the other party
for consequential damages under any provision of this Agreement or for any act
or failure to act hereunder.
5.06 In order that the indemnification provisions contained in this
Article 5 shall apply, upon the assertion of a claim for which either party may
be required to indemnify the other, the party of seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The party
who may be required to indemnify shall have the option to participate with the
party seeking indemnification the defense of such claim. The party seeking
indemnification shall in no case confess any claim or make any compromise in any
case in which the other party may be required to indemnify it except with the
other party's prior written consent.
6. COVENANTS OF THE FUND AND ADS
6.01 The Fund Shall promptly furnish to ADS a certified copy of the
resolution of the Board of Directors of the Fund authorizing the appointment of
ADS and the execution and delivery of this Agreement.
6
<PAGE> 7
6.02 ADS hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Fund for safekeeping of stock
certificates, check forms and facsimile signature imprinting devices, if any;
and for the preparation or use, and for keeping account of, such certificates,
forms and devices.
6.03 ADS shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable. To the extent
required by Section 31 of the Investment Company Act of 1940, as amended, and
the Rules thereunder, ADS agrees that all such records prepared or maintained by
ADS relating to the services to be performed by ADS hereunder are the property
of the Fund and will be preserved, maintained and made available in accordance
with such Section and Rules, and will be surrendered promptly to the Fund on and
in accordance with its request.
6.04 ADS and the Fund agree that all books, records, information and
data pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this Agreement shall
remain confidential, and shall not be voluntarily disclosed to any other person,
except as may be required by law.
6.05 In case of any requests or demands for the inspection of the
Shareholder records of the Fund, ADS will endeavor to notify the Fund and to
secure instructions from an authorized officer of the Fund as to such
inspection. ADS reserves the right, however, to exhibit the Shareholder records
to any person whenever it is advised by its counsel that it may be held liable
for the failure to exhibit the Shareholder records to such person, and shall
promptly notify the Fund of any unusual request to inspect or copy the
shareholder records of the Fund or the receipt of any other unusual request to
inspect, copy or produce the records of the Fund.
7. TERMINATION OF AGREEMENT
7.01 This Agreement shall become effective as of the date hereof and
shall remain in force for a period of three (3) years, provided however, that
both parties to this Agreement have the option to terminate the Agreement,
without penalty, upon ninety (90) days prior written notice.
7.02 Should the Fund exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be borne by
the Fund. Additionally, ADS reserves the right to charge for any other
reasonable expenses associated with such termination.
8. ASSIGNMENT
8.01 Neither this Agreement nor any rights or obligations hereunder may
be assigned by either party without the written consent of the other party.
8.02 This Agreement shall inure to the benefit of and be binding upon
the parties and their respective permitted successors and assigns.
9. AMENDMENT
9.01 This Agreement may be amended or modified by a written agreement
executed by both parties and authorized or approved by a resolution of the Board
of Directors of the Fund.
7
<PAGE> 8
10. NEW YORK LAWS TO APPLY
10.01 The provisions of this Agreement shall be construed and
interpreted in accordance with the laws of the State of New York as at the time
in effect and the applicable provisions of the 1940 Act. To the extent that the
applicable law of the State of New York, or any of the provisions herein,
conflict with the applicable provisions of the 1940 Act, the latter shall
control.
11. MERGER OF AGREEMENT
11.01 This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
matter hereof whether oral or written.
12. NOTICES.
All notices and other communications hereunder shall be in writing,
shall be deemed to have been given when received or when sent by telex or
facsimile, and shall be given to the following addresses (or such other
addresses as to which notice is given):
<TABLE>
<S> <C>
To the Fund: To ADS:
Lawrence S. York Michael Miola
President President
WWW Internet Fund American Data Services, Inc.
525 Vine Street, Suite 1330 24 West Carver Street
Cincinnati, Ohio 45202 Huntington, New York 11743
</TABLE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
WWW INTERNET FUND AMERICAN DATA SERVICES, INC.
By: /s/ Lawrence S. York By: /s/ Michael Miola
--------------------------- ------------------------
Lawrence S. York, President Michael Miola, President
8
<PAGE> 9
FEE SCHEDULE
------------
For the services rendered by ADS in its capacity as transfer agent, the
Fund shall pay ADS, within ten (10) days after receipt of an invoice from ADS at
the beginning of each month, a fee, calculated as a combination of account
maintenance charges and transaction charges as follows:
(A) ACCOUNT MAINTENANCE CHARGE:
The Greater of:
(1) Minimum maintenance charge per fund - $800.00/month (No prorating
partial months);
OR,
(2) Based upon the total of all open/closed accounts in the Fund upon the
following annual rates (billed monthly): **
<TABLE>
<S> <C>
Equity Fund ....................... $ 8.50 per account
Fixed Income Fund.................. $10.00 per account
Money Market Fund ................. $14.00 per account
Closed accounts ................... $ 2.00 per account***
<FN>
** All accounts closed during a calendar year will be considered as open
accounts for billing purposes until the end of that calendar year.
*** Closed accounts will remain in the shareholder files until all 1099's and
5498's have been sent to shareholders and reported (via mag media) to the IRS.
</TABLE>
(B) TRANSACTION FEES:
<TABLE>
<S> <C>
Trade Entry (purchase/liquidation) and maintenance transactions..........................................$1.35 each
New account set-up.......................................................................................$2.50 each
Customer service calls...................................................................................$1.00 each
Correspondence/information requests......................................................................$1.25 each
Check preparation.........................................................................................$.50 each
Liquidations paid by wire transfer.......................................................................$3.00 each
Omnibus accounts............................................................................ $ 1.25 per transaction*
ACH charge................................................................................................$.30 each
SWP.....................................................................................................$ 1.25 each*
<FN>
* Not included as a Trade Entry.
</TABLE>
9
<PAGE> 10
(C) IRA PLAN FEES:
The following fees will be charged directly to the shareholder account:
<TABLE>
<S> <C>
Annual maintenance fee..............................................................................$15.00 /account*
Incoming transfer from prior custodian.......................................................................$12.00
Distribution to a participant................................................................................$15.00
Refund of excess contribution................................................................................$15.00
Transfer to successor custodian..............................................................................$15.00
Automatic periodic distributions............................................................$15.00/year per account
<FN>
* Includes Star Bank N.A. $8.00 Custody Fee.
</TABLE>
FEE INCREASES
-------------
On each annual anniversary date of this Agreement, the fees enumerated above
will be increased by the change in the Consumer Price Index for the Northeast
region (CPI) for the twelve month period ending with the month preceding such
annual anniversary date.
(D) EXPENSES:
The Fund shall reimburse ADS for any out-of-pocket expenses, exclusive
of salaries, advanced by ADS in connection with but not limited to the printing
of confirmation forms and statements, proxy expenses, travel requested by the
Fund, telephone, facsimile transmissions, stationery and supplies (related to
Fund records), record storage, postage (plus a $0.15 service charge for all
mailings), pro-rata portion of annual 17AD-13 audit letter, telex and courier
charges incurred in connection with the performance of its duties hereunder. ADS
shall provide the Fund with a monthly invoice of such expenses and the Fund
shall reimburse ADS within fifteen (15) days after receipt thereof.
(E) SPECIAL REPORTS:
All reports and/or analyses requested by the Fund that are not included
in the fee schedule, shall be subject to an additional charge, agreed upon in
advance, based upon the following rates:
Labor:
Senior staff - $100.00/hr.
Junior staff - $ 50.00/hr.
Computer time - $45.00/hr.
10
<PAGE> 11
(F) SECURITY DEPOSIT:
The Fund will remit to ADS upon execution of this Agreement a security
deposit of equal to one (1) month's shareholder service fee. The security
deposit computation will be based either on the total number of shareholder
accounts (open and closed) of the Fund or the minimum fee, whichever is greater
on the date above written. The Fund will have the option to have the security
deposit applied to the last month's service fee, or applied to any new contract
between the Fund and ADS.
(G) CONVERSION CHARGE:
NOTE: FOR EXISTING FUNDS ONLY (new funds please ignore):
There will be a charge to convert the Fund's shareholder accounting
records on to the ADS stock transfer system (ADSHARE). In addition, ADS will be
reimbursed for all out-of-pocket expenses, enumerated in paragraph (b) above and
data media conversion costs, incurred during the conversion process.
The conversion charge will be estimated and agreed upon in advance by
the Fund and ADS. The charge will be based upon the quantity of records to be
converted and the condition of the previous service agents records.
11
<PAGE> 12
SCHEDULE A
----------
PORTFOLIOS TO BE SERVICED UNDER THIS AGREEMENT:
WWW INTERNET FUND
12
<PAGE> 1
Exhibit 9(b)
FUND ACCOUNTING SERVICE AGREEMENT
BETWEEN
WWW INTERNET FUND
AND
AMERICAN DATA SERVICES, INC.
<PAGE> 2
INDEX
<TABLE>
<S> <C>
1. DUTIES OF ADS.......................................................3
2. COMPENSATION OF ADS.................................................4
3. LIMITATION OF LIABILITY OF ADS......................................4
4. REPORTS.............................................................5
5. ACTIVITIES OF ADS...................................................5
6. ACCOUNTS AND RECORDS................................................5
7. CONFIDENTIALITY.....................................................5
8. DURATION AND TERMINATION OF THIS AGREEMENT..........................5
9. ASSIGNMENT..........................................................6
10. NEW YORK LAWS TO APPLY..............................................6
11. AMENDMENTS TO THIS AGREEMENT........................................6
12. MERGER OF AGREEMENT.................................................6
13. NOTICES.............................................................6
SCHEDULE A...................................................................7
- ----------
(A) FUND ACCOUNTING SERVICE FEE:........................................7
FEE INCREASES................................................................7
- -------------
(B) EXPENSES............................................................8
(C) SPECIAL REPORTS.....................................................8
(D) SECURITY DEPOSIT....................................................8
(E) CONVERSION CHARGE...................................................8
SCHEDULE B:..................................................................9
- ----------
</TABLE>
2
<PAGE> 3
FUND ACCOUNTING SERVICE AGREEMENT
---------------------------------
AGREEMENT made the 5TH day of June 1996, by and between WWW Internet Fund having
its principal office and place of business at 525 Vine Street, Suite 1330,
Cincinnati, Ohio 45202 (the "Fund"), and American Data Services, Inc., a New
York corporation having its principal office and place of business at 24 West
Carver Street., Huntington, New York 11743 ("ADS").
BACKGROUND
WHEREAS, the Fund is a diversified, open-end management investment company
registered with the United States Securities and Exchange Commission under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, ADS is a corporation experienced in providing accounting services to
mutual funds and possesses facilities sufficient to provide such services; and
WHEREAS, the Fund desires to avail itself of the experience, assistance and
facilities of ADS and to have ADS perform for the Fund certain services
appropriate to the operations of the Fund, and ADS is willing to furnish such
services in accordance with the terms hereinafter set forth.
TERMS
NOW, THEREFORE, in consideration of the promises and mutual covenants
hereinafter contained, the Fund and ADS hereby agree as follows:
1. DUTIES OF ADS.
ADS will provide the Fund with the necessary office space,
communication facilities and personnel to perform the following services for the
Fund:
(a) Timely calculate and transmit to NASDAQ the Fund's daily net asset
value and communicate such value to the Fund and its transfer agent;
(b) Maintain and keep current all books and records of the Fund as
required by Rule 31a-1 under the 1940 Act, as such rule or any successor rule
may be amended from time to time ("Rule 31a-1"), that are applicable to the
fulfillment of ADS's duties hereunder, as well as any other documents necessary
or advisable for compliance with applicable regulations as may be mutually
agreed to between the Fund and ADS. Without limiting the generality of the
foregoing, ADS will prepare and maintain the following records upon receipt of
information in proper form from the Fund or its authorized agents:
o Cash receipts journal
o Cash disbursements journal
o Dividend record
o Purchase and sales - portfolio securities journals
o Subscription and redemption journals
o Security ledgers
o Broker ledger
o General ledger
o Daily expense accruals
o Daily income accruals
o Securities and monies borrowed or loaned and collateral
therefore
o Foreign currency journals
3
<PAGE> 4
o Trial balances
(c) Provide the Fund and its investment adviser with daily portfolio
valuation, net asset value calculation and other standard operational reports as
requested from time to time.
(d) Provide all raw data available from our fund accounting system
(PAIRS) for management's or the administrators preparation of the following:
1. Semi-annual financial statements;
2. Semi-annual form N-SAR;
3. Annual tax returns;
4. Financial data necessary to update form N-1a;
5. Annual proxy statement.
(e) Provide facilities to accommodate annual audit and any audits or
examinations conducted by the Securities and Exchange Commission or any other
governmental or quasi-governmental entities with jurisdiction.
ADS shall for all purposes herein be deemed to be an independent contractor and
shall, unless otherwise expressly provided or authorized, have no authority to
act for or represent the Fund in any way or otherwise be deemed an agent of the
Fund.
2. COMPENSATION OF ADS.
In consideration of the services to be performed by ADS as set forth
herein for each portfolio listed in Schedule B, ADS shall be entitled to receive
compensation and reimbursement for all reasonable out-of-pocket expenses. The
Fund agrees to pay ADS the fees and reimbursement of out-of-pocket expenses as
set forth in the fee schedule attached hereto as Schedule A.
3. LIMITATION OF LIABILITY OF ADS.
(a) ADS shall be held to the exercise of reasonable care in carrying
out the provisions of the Agreement, but shall be without liability to the Fund
for any action taken or omitted by it in good faith without gross negligence,
bad faith, willful misconduct or reckless disregard of its duties hereunder. It
shall be entitled to rely upon and may act upon the accounting records and
reports generated by the Fund, advice of the Fund, or of counsel for the Fund
and upon statements of the Fund's independent accountants, and shall be without
liability for any action reasonably taken or omitted pursuant to such records
and reports or advice, provided that such action is not, to the knowledge of
ADS, in violation of applicable federal or state laws or regulations, and
provided further that such action is taken without gross negligence, bad faith,
willful misconduct or reckless disregard of its duties.
(b) Nothing herein contained shall be construed to protect ADS against
any liability to the Fund or its security holders to which ADS shall otherwise
be subject by reason of willful misfeasance, bad faith, gross negligence in the
performance of its duties on behalf of the Fund, reckless disregard of the
Administrator's obligations and duties under this Agreement or the willful
violation of any applicable law.
(c) Except as may otherwise be provided by applicable law, neither ADS
nor its stockholders, officers, directors, employees or agents shall be subject
to, and the Fund shall indemnify and hold such persons harmless from and
against, any liability for and any damages, expenses or losses incurred by
reason of the inaccuracy of information furnished to ADS by the Fund or its
authorized agents.
4
<PAGE> 5
4. REPORTS.
(a) The Fund shall provide to ADS on a quarterly basis a report of a
duly authorized officer of the Fund representing that all information furnished
to ADS during the preceding quarter was true, complete and correct in all
material respects. ADS shall not be responsible for the accuracy of any
information furnished to it by the Fund or its authorized agents, and the Fund
shall hold ADS harmless in regard to any liability incurred by reason of the
inaccuracy of such information.
(b) Whenever, in the course of performing its duties under this
Agreement, ADS determines, on the basis of information supplied to ADS by the
Fund or its authorized agents, that a violation of applicable law has occurred
or that, to its knowledge, a possible violation of applicable law may have
occurred or, with the passage of time, would occur, ADS shall promptly notify
the Fund and its counsel of such violation.
5. ACTIVITIES OF ADS.
The services of ADS under this Agreement are not to be deemed
exclusive, and ADS shall be free to render similar services to others so long as
its services hereunder are not impaired thereby.
6. ACCOUNTS AND RECORDS.
The accounts and records maintained by ADS shall be the property of the
Fund, and shall be surrendered to the Fund promptly upon request by the Fund in
the form in which such accounts and records have been maintained or preserved.
ADS agrees to maintain a back-up set of accounts and records of the Fund (which
back-up set shall be updated on at least a weekly basis) at a location other
than that where the original accounts and records are stored. ADS shall assist
the Fund's independent auditors, or, upon approval of the Fund, any regulatory
body, in any requested review of the Fund's accounts and records. ADS shall
preserve the accounts and records as they are required to be maintained and
preserved by Rule 31a-1.
7. CONFIDENTIALITY.
ADS agrees that it will, on behalf of itself and its officers and
employees, treat all transactions contemplated by this Agreement, and all other
information germane thereto, as confidential and not to be disclosed to any
person except as may be authorized by the Fund.
8. DURATION AND TERMINATION OF THIS AGREEMENT.
This Agreement shall become effective as of the date hereof and shall
remain in force for a period of three (3) years, provided however, that both
parties to this Agreement have the option to terminate the Agreement, without
penalty, upon ninety (90) days prior written notice.
Should the Fund exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be borne by
the Fund. Additionally, ADS reserves the right to charge for any other
reasonable expenses associated with such termination.
5
<PAGE> 6
9. ASSIGNMENT.
This Agreement shall extend to and shall be binding upon the parties
hereto and their respective successors and assigns; provided, however, that this
Agreement shall not be assignable by the Fund without the prior written consent
of ADS, or by ADS without the prior written consent of the Fund.
10. NEW YORK LAWS TO APPLY.
The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the State of New York as at the time in effect and
the applicable provisions of the 1940 Act. To the extent that the applicable law
of the State of New York, or any of the provisions herein, conflict with the
applicable provisions of the 1940 Act, the latter shall control.
11. AMENDMENTS TO THIS AGREEMENT.
This Agreement may be amended by the parties hereto only if such
amendment is in writing and signed by both parties.
12. MERGER OF AGREEMENT.
This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject matter
hereof whether oral or written.
13. NOTICES.
All notices and other communications hereunder shall be in writing,
shall be deemed to have been given when received or when sent by telex or
facsimile, and shall be given to the following addresses (or such other
addresses as to which notice is given):
<TABLE>
<S> <C>
To the Fund: To ADS:
Lawrence S. York Michael Miola
President President
WWW Internet Fund American Data Services, Inc.
525 Vine Street, Suite 1330 24 West Carver Street
Cincinnati, Ohio 45202 Huntington, New York 11743
</TABLE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
WWW INTERNET FUND AMERICAN DATA SERVICES, INC.
By: /s/ Lawrence S. York By: /s/ Michael Miola
--------------------------- ------------------------
Lawrence S. York, President Michael Miola, President
6
<PAGE> 7
SCHEDULE A
----------
(A) FUND ACCOUNTING SERVICE FEE:
For the services rendered by ADS in its capacity as fund accounting
agent, as specified in Paragraph 1. DUTIES OF ADS, the Fund shall pay ADS,
within ten (10) days after receipt of an invoice from ADS at the beginning of
each month, a fee equal to:
Monthly fund accounting service fees will be determined utilizing either the
minimum fee per portfolio, or the net asset charge, whichever is greater:
Calculated Fee Will Be Based Upon Prior Month Average Net Assets:
(No prorating partial months)
MONTHLY MINIMUM FEE PER PORTFOLIO:
<TABLE>
<CAPTION>
Portfolio Type
Net Assets (in millions) Global Domestic Money Mkt
- ------------------------ ------ -------- ---------
<S> <C> <C> <C>
Under $2 ............... $1,000 $ 800 $ 600
From $2 to $ 5 ......... 1,375 1,100 825
From $5 to $10 ......... 1,750 1,400 1,050
From $10 to $20 ........ 2,125 1,700 1,275
From $20 to $25 ........ 2,500 2,000 1,500
Over $25 ............... 3,000 2,500 2,000
</TABLE>
OR,
MONTHLY NET ASSET CHARGE (on all assets in fund group):
<TABLE>
<S> <C>
First $500 million...............................................1/12th of 3.0 basis points
Next $500 million................................................1/12th of 2.0 basis points
Excess over $1 billion..........................................1/12th of 1.25 basis points
</TABLE>
MULTI-CLASS PROCESSING CHARGE
$300 per month will be charged for each additional class of stock per portfolio.
FEE INCREASES
-------------
On each annual anniversary date of this Agreement, the fees enumerated
above will be increased by the change in the Consumer Price Index for the
Northeast region (CPI) for the twelve month period ending with the month
preceding such annual anniversary date.
7
<PAGE> 8
(B) EXPENSES.
The Fund shall reimburse ADS for any out-of-pocket expenses , exclusive
of salaries, advanced by ADS in connection with but not limited to the printing
or filing of documents for the Fund, travel, telephone, quotation services,
facsimile transmissions, stationery and supplies, record storage, postage,
telex, and courier charges, incurred in connection with the performance of its
duties hereunder. ADS shall provide the Fund with a monthly invoice of such
expenses and the Fund shall reimburse ADS within fifteen (15) days after receipt
thereof.
(C) SPECIAL REPORTS.
All reports and/or analyses requested by the Fund, its auditors, legal
counsel, portfolio manager, or any regulatory agency having jurisdiction over
the Fund, that are not in the normal course of fund accounting activities as
specified in Section 1 of this Agreement shall be subject to an additional
charge, agreed upon in advance, based upon the following rates:
Labor:
Senior staff - $100.00/hr.
Junior staff - $ 50.00/hr.
Computer time - $45.00/hr.
(D) SECURITY DEPOSIT.
The Fund will remit to ADS upon execution of this Agreement a security
deposit equal to one (1) month's minimum fee under this Agreement, computed in
accordance with the number of portfolios listed in Schedule B of this Agreement
without giving effect to any fee waivers that may be in effect. The Fund will
have the option to have the security deposit applied to the last month's service
fee, or applied to any new contract between the Fund and ADS.
(E) CONVERSION CHARGE.
NOTE: FOR EXISTING FUNDS ONLY (new funds please ignore):
There will be a charge to convert the Fund's portfolio accounting
records on to the ADS fund accounting system (PAIRS). In addition, ADS will be
reimbursed for all out-of-pocket expenses, enumerated in paragraph (b) above,
incurred during the conversion process.
The conversion charge will be estimated and agreed upon in advance by
the Fund and ADS. The charge will be based upon the quantity of records to be
converted and the condition of the previous service agents records.
8
<PAGE> 9
SCHEDULE B
----------
PORTFOLIOS TO BE SERVICED UNDER THIS AGREEMENT:
WWW INTERNET FUND
9
<PAGE> 1
Exhibit 9(c)
ADMINISTRATIVE SERVICE AGREEMENT
BETWEEN
WWW INTERNET FUND
AND
AMERICAN DATA SERVICES, INC.
<PAGE> 2
INDEX
-----
<TABLE>
<S> <C>
1. DUTIES OF THE ADMINISTRATOR.......................................3
2. COMPENSATION OF THE ADMINISTRATOR.................................4
3. RESPONSIBILITY AND INDEMNIFICATION................................4
4. REPORTS...........................................................5
5. ACTIVITIES OF THE ADMINISTRATOR...................................5
6. RECORDS...........................................................5
7. CONFIDENTIALITY...................................................6
8. DURATION AND TERMINATION OF THE AGREEMENT.........................6
9. ASSIGNMENT........................................................6
10. NEW YORK LAWS TO APPLY............................................6
11. AMENDMENTS TO THIS AGREEMENT......................................6
12. MERGER OF AGREEMENT...............................................6
13. NOTICES...........................................................6
SCHEDULE A.................................................................8
- ----------
(A) ADMINISTRATIVE SERVICE FEE:............................................8
FEE INCREASES..............................................................8
- -------------
(B) EXPENSES...............................................................8
(C) STATE REGISTRATION (BLUE SKY) SURCHARGE:...............................9
(D) SPECIAL REPORTS........................................................9
(E) SECURITY DEPOSIT.......................................................9
SCHEDULE B................................................................10
- ----------
</TABLE>
2
<PAGE> 3
ADMINISTRATIVE SERVICES AGREEMENT
---------------------------------
AGREEMENT made the 5TH day of June 1996, by and between WWW Internet Fund having
its principal office and place of business at 525 Vine Street, Suite 1330,
Cincinnati, Ohio 45202 (the "Fund"), and American Data Services, Inc., a New
York corporation having its principal office and place of business at 24 West
Carver Street., Huntington, New York 11743 (the "Administrator").
BACKGROUND
WHEREAS, the Fund is a diversified open-end management investment
company registered with the United States Securities and Exchange Commission
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Administrator is a corporation experienced in providing
administrative services to mutual funds and possesses facilities sufficient to
provide such services; and
WHEREAS, the Fund desires to avail itself of the experience, assistance
and facilities of the Administrator and to have the Administrator perform for
the Fund certain services appropriate to the operations of the Fund and the
Administrator is willing to furnish such services in accordance with the terms
hereinafter set forth.
TERMS
NOW, THEREFORE, in consideration of the promises and mutual covenants
hereinafter contained, the Fund and the Administrator hereby agree to the
following:
1. DUTIES OF THE ADMINISTRATOR.
The Administrator will provide the Fund with the necessary office
space, communication facilities and personnel to perform the following services
for the Fund:
(a) Monitor all regulatory (1940 Act and IRS) and prospectus
restrictions for compliance;
(b) Prepare and coordinate the printing of semi-annual and annual
financial statements;
(c) Prepare selected management reports for performance and
compliance analyses as agreed upon by the Fund and
Administrator from time to time;
(d) Prepare selected financial data required for directors'
meetings as agreed upon by the Fund and the Administrator from
time to time and coordinate directors meeting agendas with
outside legal counsel to the Fund;
(e) Determine income and capital gains available for distribution
and calculate distributions required to meet regulatory,
income, and excise tax requirements, to be reviewed by the
Fund's independent public accountants;
(f) Prepare the Fund's federal, state, and local tax returns to be
reviewed by the Fund's independent public accountants;
(g) Prepare and maintain the Fund's operating expense budget to
determine proper expense accruals to be charged to the Fund in
order to calculate it's daily net asset value;
3
<PAGE> 4
(h) 1940 ACT filings - In conjunction with the Fund's outside
legal counsel the Administrator will:
o Prepare the Fund's Form N-SAR reports;
o Update all financial sections of the Fund's Statement
of Additional Information and coordinate its
completion;
o Update all financial sections of the Fund's
prospectus and coordinate its completion;
o Update all financial sections of the Fund's proxy
statement and coordinate its completion;
o Prepare an annual update to Fund's 24f-2 filing (if
applicable);
(i) Monitor services provided by the Fund's custodian bank as well
as any other service providers to the Fund;
(j) Provide appropriate financial schedules (as requested by the
Fund's independent public accountants or SEC examiners),
coordinate the Fund's annual or SEC audit, and provide office
facilities as may be required;
(k) Attend management and board of directors meetings as
requested;
(l) The preparation and filing (filing fee to be paid by the Fund)
of applications and reports as necessary to register or
maintain the Funds registration under the securities or "Blue
Sky" laws of the various states selected by the Fund's
Distributor.
The Administrator shall, for all purposes herein, be deemed to be an independent
contractor and shall, unless otherwise expressly provided or authorized, have no
authority to act for or represent the Fund in any way or otherwise be deemed an
agent of the Fund.
2. COMPENSATION OF THE ADMINISTRATOR.
In consideration of the services to be performed by ADS as set forth
herein for each portfolio listed in Schedule B, ADS shall be entitled to receive
compensation and reimbursement for all reasonable out-of-pocket expenses. The
Fund agrees to pay ADS the fees and reimbursement of out-of-pocket expenses as
set forth in the fee schedule attached hereto as Schedule A.
3. RESPONSIBILITY AND INDEMNIFICATION.
(a) he Administrator shall be held to the exercise of reasonable care
in carrying out the provisions of the Agreement, but shall be without liability
to the Fund for any action taken or omitted by it in good faith without gross
negligence, bad faith, willful misconduct or reckless disregard of its duties
hereunder. It shall be entitled to rely upon and may act upon the accounting
records and reports generated by the Fund, advice of the Fund, or of counsel for
the Fund and upon statements of the Fund's independent accountants, and shall be
without liability for any action reasonably taken or omitted pursuant to such
records and reports or advice, provided that such action is not, to the
knowledge of the Administrator, in violation of applicable federal or state laws
or regulations, and provided further that such action is taken without gross
negligence, bad faith, willful misconduct or reckless disregard of its duties.
(b) The Administrator shall not be liable to the Fund for any error of
judgment or mistake of law or for any loss arising out of any act or omission by
the Administrator in the performance of its duties hereunder except as
hereinafter set forth. Nothing herein contained shall be construed to protect
the Administrator against any liability to the Fund or its security holders to
which the Administrator shall otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence in the performance of its duties on
behalf of the Fund, reckless disregard of the Administrator's obligations and
duties under this Agreement or the willful violation of any applicable law.
4
<PAGE> 5
(c) Except as may otherwise be provided by applicable law, neither the
Administrator nor its stockholders, officers, directors, employees or agents
shall be subject to, and the Fund shall indemnify and hold such persons harmless
from and against, any liability for and any damages, expenses or losses incurred
by reason of the inaccuracy of information furnished to the Administrator by the
Fund or its authorized agents or in connection with any error in judgment or
mistake of law or any act or omission in the course of, connected with or
arising out of any services to be rendered hereunder, except by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties, by reason of reckless disregard of the Administrator's obligations and
duties under this Agreement or the willful violation of any applicable law.
4. REPORTS.
(a) The Fund shall provide to the Administrator on a quarterly basis a
report of a duly authorized officer of the Fund representing that all
information furnished to the Administrator during the preceding quarter was
true, complete and correct to the best of its knowledge. The Administrator shall
not be responsible for the accuracy of any information furnished to it by the
Fund, and the Fund shall hold the Administrator harmless in regard to any
liability incurred by reason of the inaccuracy of such information.
(b) The Administrator shall provide to the Board of Directors of the
Fund, on a quarterly basis, a report, in such a form as the Administrator and
the Fund shall from time to time agree, representing that, to its knowledge, the
Fund was in compliance with all requirements of applicable federal and state
law, including without limitation, the rules and regulations of the Securities
and Exchange Commission and the Internal Revenue Service, or specifying any
instances in which the Fund was not so in compliance. Whenever, in the course of
performing its duties under this Agreement, the Administrator determines, on the
basis of information supplied to the Administrator by the Fund, that a violation
of applicable law has occurred, or that, to its knowledge, a possible violation
of applicable law may have occurred or, with the passage of time, could occur,
the Administrator shall promptly notify the Fund and its counsel of such
violation.
5. ACTIVITIES OF THE ADMINISTRATOR.
The Administrator shall be free to render similar services to others so
long as its services hereinunder are not impaired thereby.
6. RECORDS.
The records maintained by the Administrator shall be the property of
the Fund, and shall be made available to the Fund promptly upon request by the
Fund in the form in which such records have been maintained or preserved. The
Administrator shall upon approval of the Fund assist the Fund's independent
auditors, or, any regulatory body, in any requested review of the Fund's
accounts and records. The Administrator shall preserve the records in its
possession (at the expense of the Fund) as required by Rule 31a-1 of the 1940
Act.
5
<PAGE> 6
7. CONFIDENTIALITY.
The Administrator agrees that it will, on behalf of itself and its
officers and employees, treat all transactions contemplated by this Agreement,
and all other information germane thereto, as confidential and such information
shall not be disclosed to any person except as may be authorized by the Fund.
8. DURATION AND TERMINATION OF THE AGREEMENT.
This Agreement shall become effective as of the date hereof and shall
remain in force for a period of three (3) years, provided however, that both
parties to this Agreement have the option to terminate the Agreement, without
penalty, upon ninety (90) days prior written notice.
Should the Fund exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be borne by
the Fund. Additionally, ADS reserves the right to charge for any other
reasonable expenses associated with such termination.
9. ASSIGNMENT.
This Agreement shall extend to and shall be binding upon the parties
hereto and their respective successors and assigns; provided, however, that this
Agreement shall not be assignable by the Fund without the prior written consent
of the Administrator, or by the Administrator without the prior written consent
of the Fund.
10. NEW YORK LAWS TO APPLY.
The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the State of New York as at the time in effect and
the applicable provisions of the 1940 Act. To the extent that the applicable law
of the State of New York, or any of the provisions herein, conflict with the
applicable provisions of the 1940 Act, the latter shall control.
11. AMENDMENTS TO THIS AGREEMENT.
This Agreement may be amended by the parties hereto only if such
amendment is in writing and signed by both parties.
12. MERGER OF AGREEMENT
This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject matter
hereof whether oral or written.
13. NOTICES.
All notices and other communications hereunder shall be in writing,
shall be deemed to have been given when delivered in person or by certified
mail, return receipt requested, and shall be given to the following addresses
(or such other addresses as to which notice is given):
<TABLE>
<S> <C>
To the Fund: To the Administrator:
Lawrence S. York Michael Miola
President President
WWW Internet Fund American Data Services, Inc.
525 Vine Street, Suite 1330 24 West Carver Street
Cincinnati, Ohio 45202 Huntington, New York 11743
</TABLE>
6
<PAGE> 7
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
WWW INTERNET FUND AMERICAN DATA SERVICES, INC.
By: /s/ Lawrence S. York By: /s/ Michael Miola, President
--------------------------- ----------------------------
Lawrence S. York, President Michael Miola, President
7
<PAGE> 8
SCHEDULE A
----------
(A) ADMINISTRATIVE SERVICE FEE:
For the services rendered by ADS in its capacity as administrator, as
specified in Paragraph 1. DUTIES OF THE ADMINISTRATOR., the Fund shall pay ADS
within ten (10) days after receipt of an invoice from ADS at the beginning of
each month, a fee equal to the greater of:
NOTE: The following minimum fees are per portfolio serviced.
MINIMUM FEE:
CALCULATED FEE WILL BE BASED UPON PRIOR MONTH AVERAGE NET ASSETS:
(No prorating partial months)
<TABLE>
<CAPTION>
Each Additional
First Portfolio Portfolio
--------------- ---------
<S> <C> <C>
Under $10 million .................................$1,300 $ 650
From $10 million to $20 million.................... 1,600 800
From $20 million on................................ 2,000 1,000
</TABLE>
OR,
NET ASSET CHARGE:
1/12th of 0.05% (5 basis points) of combined average net assets of Fund
group (if applicable) for month.
FEE INCREASES
-------------
On each annual anniversary date of this Agreement, the fees enumerated above
will be increased by the change in the Consumer Price Index for the Northeast
region (CPI) for the twelve month period ending with the month preceding such
annual anniversary date.
(B) EXPENSES.
The Fund shall reimburse ADS for any out-of-pocket expenses , exclusive
of salaries, advanced by ADS in connection with but not limited to the printing
or filing of documents for the Fund, travel, telephone, quotation services,
facsimile transmissions, stationery and supplies, record storage, postage,
telex, and courier charges, incurred in connection with the performance of its
duties hereunder. ADS shall provide the Fund with a monthly invoice of such
expenses and the Fund shall reimburse ADS within fifteen (15) days after receipt
thereof.
8
<PAGE> 9
(C) STATE REGISTRATION (BLUE SKY) SURCHARGE:
The fees enumerated in paragraph (a) above include the initial state
registration, renewal and maintenance of registrations (as detailed in Paragraph
1(l) DUTIES OF THE ADMINISTRATOR) for three states. Each additional state
registration requested will be subject to the following fees:
<TABLE>
<S> <C>
Initial registration .................$275.00
Registration renewal .................$100.00
Sales reports (if required) ..........$ 25.00
</TABLE>
(D) SPECIAL REPORTS.
All reports and /or analyses requested by the Fund, its auditors, legal
counsel, portfolio manager, or any regulatory agency having jurisdiction over
the Fund, that are not in the normal course of fund administrative activities as
specified in Section 1 of this Agreement shall be subject to an additional
charge, agreed upon in advance, based upon the following rates:
Labor:
Senior staff - $100.00/hr.
Junior staff - $ 50.00/hr.
Computer time - $45.00/hr.
(E) SECURITY DEPOSIT.
The Fund will remit to ADS upon execution of this Agreement a security
deposit equal to one (1) month's minimum fee under this Agreement, computed in
accordance with the number of portfolios listed in Schedule B of this Agreement
without giving effect to any fee waivers that may be in effect. The Fund will
have the option to have the security deposit applied to the last month's service
fee, or applied to any new contract between the Fund and ADS.
9
<PAGE> 10
SCHEDULE B
----------
PORTFOLIOS TO BE SERVICED UNDER THIS AGREEMENT:
WWW INTERNET FUND
June 14, 1996 - 11:06am - DEW
CIN - 119010.1D - 45101\3
10
<PAGE> 1
Exhibit 10
----------
July 10, 1996
WWW Trust
Suite 1330
525 Vine Street
Cincinnati, OH 45202
Gentlemen:
We have acted as counsel for WWW Trust (the "Trust") in connection with the
filing by the Trust of a Registration Statement on Form N-1A pursuant to the
Securities Act of 1933 and the Investment Company Act of 1940 (the "Registration
Statement") with respect to the proposed sale of an indefinite number of a
series of shares of beneficial interest, par value $.001 per share (the
"Shares"), of the Trust, representing the beneficial interest of shareholders of
WWW Internet Fund, a separate investment portfolio of the Trust.
We have examined and relied upon originals or copies, certified or otherwise
identified to our satisfaction as being true copies, of all such records of the
Trust, all such agreements, certificates of officers of the Trust, public
officials and others, and such other documents, certificates and other records
as we have deemed necessary as a basis for the opinions expressed in this
letter, including, without limitation, the Amended and Restated Declaration of
Trust of the Trust (the "Declaration of Trust"), the By-laws of the Trust and
the records of proceedings of the Trustees and shareholder of the Trust from the
date of formation.
In our examination, we have assumed the genuineness of all signatures, the legal
capacity of all natural persons, the authenticity of all documents submitted to
us as originals, and the conformity to original documents of all documents
submitted to us as certified or photostatic copies.
We have investigated such questions of law for the purpose of rendering the
opinions expressed in this letter as we have deemed necessary. We express no
opinion in this letter concerning any law other than the law of the State of
Ohio and the federal law of the United States of America.
This opinion is being rendered to you as of July 10, 1996. The opinion expressed
herein assumes that there is no change in the facts, circumstances and law in
effect on the date of this opinion, particularly as they relate to Trust
authority and the Trust's good standing under Ohio law.
<PAGE> 2
WWW Trust
July 10, 1996
Page 2
On the basis of the foregoing, and in reliance thereon, we are of the opinion
that the Shares, when issued pursuant to the terms, provisions and conditions
set forth in the Declaration of Trust and in the Registration Statement, and
upon receipt of full authorized consideration therefor in cash, will be validly
issued, fully paid and non-assessable by the Trust.
This opinion is rendered only to the Trust in connection with the filing of the
Registration Statement. We consent to the filing of this opinion as Exhibit 10
to the Registration Statement and to the filing of this opinion in conjunction
with the filing in any state under such state's securities or blue sky laws.
This letter may not be paraphrased, quoted or summarized, nor may it be
duplicated or reproduced in part.
Respectfully submitted,
/s/ Benesch, Friedlander, Coplan & Aronoff
BENESCH, FRIEDLANDER,
COPLAN & ARONOFF P.L.L.
July 10, 1996 - 10:22am - DEW
CLE1 - 213413.1A - 45101\3
<PAGE> 1
Exhibit (11)
------------
CONSENT OF INDEPENDENT AUDITORS
We consent to the use in this Pre-Effective Amendment No. 1 to WWW Internet
Fund's Registration Statement on Form N-1A of our report dated July 8, 1996 on
the financial statements of WWW Internet Fund and to the reference made to us
under the caption "General Information" included in the Statement of Additional
Information.
/s/ McCurdy & Associates CPA's, Inc.
McCURDY & ASSOCIATES CPA'S, INC.
Westlake, Ohio
July 8, 1996
July 11, 1996 - 2:26pm - DEW
CLE2 - 200779.1B - 45101\3
<PAGE> 1
Exhibit 13
----------
WWW ADVISORS, INC.
131 Prosperous Place - Suite 17
Lexington, Kentucky 40509
July 3, 1996
WWW Trust
Suite 1330
525 Vine Street
Cincinnati, OH 45202
Re: Purchase Agreement for Initial Capital
Gentlemen:
We are purchasing from you today 10,000 shares of WWW Internet Fund
(the "Fund"), a portfolio of WWW Trust, at a price of $10 per share, or an
aggregate price of $100,000, to provide the initial capital you require pursuant
to Section 14 of the Investment Company Act of 1940 in order to make a public
offering of shares of the Fund.
We hereby represent that we are acquiring said shares for investment
and not for distribution or resale to the public.
In the event that we redeem any such shares during the five-year period
beginning with the commencement of operations of the Fund, the net asset value
payable in respect to such shares will be reduced by the pro-rata share (based
on the proportion of original shares being redeemed to the total number of
original shares) of the then unamortized deferred organization expense as of the
date of such redemption.
Very truly yours,
WWW ADVISORS, INC.
By: /s/ Lawrence S. York
---------------------------
Lawrence S. York, President
July 9, 1996 - 12:58pm - DEW
CLE1 - 213411.1A - 45101\3
<PAGE> 1
[ARTICLE] 6
[CIK] 0001011714
[NAME] WWW INTERNET FUND
<TABLE>
<S> <C>
[PERIOD-TYPE] OTHER
[FISCAL-YEAR-END] JUN-30-1996
[PERIOD-END] JUN-30-1996
[INVESTMENTS-AT-COST] 0
[INVESTMENTS-AT-VALUE] 0
[RECEIVABLES] 0
[ASSETS-OTHER] 0
[OTHER-ITEMS-ASSETS] 100,000
[TOTAL-ASSETS] 100,000
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 0
[TOTAL-LIABILITIES] 0
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 100,000
[SHARES-COMMON-STOCK] 10,000
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 0
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 0
[NET-ASSETS] 0
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 0
[OTHER-INCOME] 0
[EXPENSES-NET] 0
[NET-INVESTMENT-INCOME] 0
[REALIZED-GAINS-CURRENT] 0
[APPREC-INCREASE-CURRENT] 0
[NET-CHANGE-FROM-OPS] 0
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 0
[NUMBER-OF-SHARES-REDEEMED] 0
[SHARES-REINVESTED] 0
[NET-CHANGE-IN-ASSETS] 0
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 0
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 0
[AVERAGE-NET-ASSETS] 0
[PER-SHARE-NAV-BEGIN] 10.00
[PER-SHARE-NII] 0
[PER-SHARE-GAIN-APPREC] 0
[PER-SHARE-DIVIDEND] 0
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 10.00
[EXPENSE-RATIO] 0
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
