File No. 811-08049
File No. 333-21311
As filed via EDGAR with the Securities and Exchange Commission on
______, 1997
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |X|
Pre-Effective Amendment No. 1 |X|
Post-Effective Amendment No. |_|
and
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 |X|
Amendment No. 1 |X|
RENAISSANCE CAPITAL GREENWICH FUNDS
(Formerly RENAISSANCE FUNDS)
(Exact Name of Registrant as Specified in Charter)
325 Greenwich Avenue
Greenwich, Connecticut 06830
(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, including Area Code: (203) 622-2978
Linda R. Killian, C.F.A.
Renaissance Capital Corporation
325 Greenwich Avenue
Greenwich, Connecticut 06830
(Name and Address of Agent for Service)
Copies of Communication to:
Susan Penry-Williams, Esq.
Kramer, Levin, Naftalis & Frankel
919 Third Avenue
New York, New York 10022
Approximate date of proposed public offering: As soon as practicable after
this registration statement becomes effective.
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An indefinite number of shares of beneficial interest of the Registrant is
being registered by this Registration Statement pursuant to Rule 24f-2 under the
Investment Company Act of 1940.
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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.
<PAGE>
-2-
RENAISSANCE CAPITAL GREENWICH FUNDS
CROSS-REFERENCE SHEET
(Pursuant to Rule 404 showing location in each form of
Prospectus of the responses to the Items in Part A and location in each form of
Prospectus and the Statement of Additional Information of the responses to the
Items in Part B of Form N-1A).
Form N-1A Part A Item Prospectus Caption
1. Cover Page Cover Page
2. Synopsis Expense Table; Prospectus Summary
3. Condensed Financial Information Inapplicable
4. General Description of Registrant Prospectus Summary; Investment Objective;
Investment Policies and Techniques; Additional Information
5. Management of the Fund Additional Information
5A. Management's Discussion of Fund Performance Inapplicable
6. Capital Stock and Other Securities Investing in the IPO Fund; How to Redeem
IPO Fund Shares; Dividends and Distributions; Additional
Information
7. Purchase of Securities Being Offered Prospectus Summary; Investing in the IPO
Fund; How to Redeem IPO Fund Shares
8. Redemption or Repurchase Prospectus Summary; Investing in the IPO Fund; How
to Redeem IPO Fund Shares
9. Pending Legal Proceedings Inapplicable
<PAGE>
Form N-1A Part B Item Prospectus Caption
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History Additional Information
13. Investment Objectives and Policies Investment Objectives, Policies and
Techniques
14. Management of the Fund Trustees and Officers
15. Control Persons and Principal Holders of Inapplicable
Securities
16. Investment Advisory and Other Services Investment Advisory and Other
Services
17. Brokerage Allocation and Other Practices Brokerage Arrangements
18. Capital Stock and Other Securities How to Buy Shares; How to Redeem Shares;
Valuation of Securities
19. Purchase, Redemption and Pricing of Securities How to Buy Shares; How to
Redeem Shares; Valuation of Being Offered Securities
20. Tax Status Taxes
21. Underwriters Investment Advisory and Other Services
22. Calculation of Performance Data Performance Information
23. Financial Statements Financial Statements
Part C
Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration Statement.
<PAGE>
PART A PROSPECTUS
The IPO Plus Aftermarket Fund
PROSPECTUS
November 1997
Investment Objective: Capital Appreciation
The IPO Plus Aftermarket Fund ("IPO Fund") seeks capital appreciation by
investing in the common stock of Initial Public Offerings ("IPOs") on the
offering and in the aftermarket.
No Sales Charge
No sales load is charged on purchases. See "Fund Expenses" for further
information on fees.
Low Minimum Initial Investment
The minimum initial investment for a regular account is $2,500. An IRA may
be initiated with a $500 minimum investment.
This Prospectus describes information about the IPO Fund that an investor ought
to know before investing. Investors should read it and keep it for future
reference. More information about the IPO Fund is contained in a Statement of
Additional Information dated , 1997 which is filed with the Securities and
Exchange Commission and is incorporated by reference in this Prospectus. The
Statement of Additional Information may be obtained free of charge by calling
1-888-IPO-FUND, or by writing to the IPO Fund, P.O. Box 2798, Boston, MA
02208-2798.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
Renaissance Capital Corporation
325 Greenwich Avenue
Greenwich, CT 06830
1-888-IPO-FUND
www.ipo-fund.com
<PAGE>
FUND EXPENSES
The following table sets forth certain information about the costs and expenses
that a shareholder of the IPO Fund will incur, directly or indirectly, when
investing in the IPO Fund.
Shareholder Transaction Expenses:
Sales Load on Purchases................................................ None
Sales Load on Reinvested Dividends..................................... None
Deferred Sales Load.................................................... None
Redemption Fee on Shares Held 90 Days or Less.......................... 2.00%
Annual Fund Operating Expenses (as a percent of average net assets):
Management Fees (a)................................................... 1.50%
12b-1 Fees (b)......................................................... .25%
Other Expenses (after reimbursement) (a) (c)..............................75%
Total Fund Operating Expenses (after reimbursement)(a)............2.50%
Example: An investor in the IPO Fund would incur the following expenses on a
$1,000 investment, assuming (1) 5% annual return and (2) redemption at the end
of each period (d).
One Year Three Years
$25 $78
(a) Renaissance Capital has voluntarily agreed to defer or waive fees or absorb
some or all of the expenses of the IPO Fund in order to limit Total Fund
Operating Expenses to 2.5%. Subject to the 2.5% limitation, such fee deferrals
and expense absorptions are subject to later reimbursement over a period of
three years.
(b) A long-term shareholder should consider that the fees and costs it will
incur under the 12b-1 plan may result in the shareholder paying more over time
than the equivalent of the maximum front-end sales charges permitted by the
rules and regulations of the National Association of Securities Dealers, Inc.
(c) The IPO Fund is newly organized and has no operating history. The
percentages set forth in the table above under the caption "Other Expenses" have
been estimated based on the expected asset levels and the amount of expenses
expected to be incurred during the current fiscal period ending September 30,
1998. Actual expenses may be higher or lower than estimated. "Other Expenses"
include an estimate of shareholder servicing fees the IPO Fund expects to pay.
Absent voluntary waivers, the maximum shareholder servicing fee payable by the
IPO Fund is 0.25% of the IPO Fund's average daily net assets. See "Shareholder
Services Shareholder Service Agents."
(d) This example should not be considered a representation of past or future IPO
Fund expenses or performance. Moreover, the IPO Fund's actual performance will
vary and may result in an actual return greater or lesser than 5%.
<PAGE>
PROSPECTUS SUMMARY
The information below is qualified in its entirety by the detailed information
appearing elsewhere in this Prospectus and Statement of Additional Information.
THE IPO FUND The IPO Fund is a series of Renaissance Capital
Greenwich Funds("Renaissance Capital Funds"), a
Delaware trust, operating as a registered,
diversified, open-end investment company.
THE INVESTMENT OBJECTIVE The IPO Fund seeks appreciation of capital. It
pursues this objective by investing in the common
stock of IPOs on the offering and in the
aftermarket. The IPO Fund gives individual
investors the opportunity to invest in a diverse
selection of IPOs that they may not otherwise
have access as individuals acting alone.
MANAGEMENT OF THE IPO FUND Renaissance Capital Corporation ("Renaissance
Capital"), a registered investment adviser,
serves as the IPO Fund's investment adviser. The
principals of Renaissance Capital each have more
than 17 years of portfolio management, security
analysis and relevant corporate finance
experience. Renaissance Capital specializes in
researching IPOs and has been providing its
proprietary research, primarily to institutional
investors, since 1992. This research and other
statistical information on IPOs will be used in
selecting securities for the IPO Fund.
Renaissance Capital is internationally recognized
as a leading provider of research on initial
public offerings. See "Management of the IPO
Fund."
MINIMUM INITIAL INVESTMENT The minimum initial investment in the IPO Fund is
$2,500 ($500 for an IRA) and the minimum
subsequent investment is $100. See "Investing in
the IPO Fund."
RISKS Investing in IPOs entails special risks,
including limited operating history of the
companies, unseasoned trading, high portfolio
turnover and limited liquidity.
<PAGE>
INVESTMENT OBJECTIVE
The IPO Fund seeks appreciation of capital. It pursues this objective by
investing in a diversified portfolio of the common stock of IPOs at the time of
the offering and in subsequent aftermarket trading. For the purpose of this
Prospectus, the IPO Fund will purchase IPOs at the time the shares are first
publicly offered by a company and during the subsequent ten years those shares
are trading in the aftermarket. Investment in the IPO Fund may be best suited to
individuals who are not concerned with or do not require current income. Any
income realized by the IPO Fund will be incidental and will not be an important
criterion in the selection of portfolio securities. There is no assurance that
the IPO Fund will achieve its investment objective.
Access to Hot Issues
Due to intense demand for a limited number of shares of certain "hot issues,"
individual investors acting alone may have difficulty obtaining shares of IPOs
at the offering price. A "hot issue" is any newly issued security which, at the
time of its offering, trades in the aftermarket at a price in excess of its
offering price. In addition, individual investors may also be limited to those
IPOs underwritten by the broker with whom the individual investor has an
account. By virtue of its size and institutional nature, the IPO Fund may have
greater access to IPOs at the offering price. However, there is no assurance
that the IPO Fund will be able to obtain allocations of "hot issues."
Independent IPO Research
The IPO Fund will have the benefit of Renaissance Capital's research and
statistical information on IPOs in selecting securities for its portfolio. This
research analyzes the business, fundamentals, financial results, management
control issues and proposed valuation of the IPO. Prior to an IPO and for a
period of time thereafter, underwriters and brokerage firms involved in the
underwriting are prohibited from providing any commentary or disseminating
research on these companies to the general public. Future research distributed
by an underwriter may not be considered to be independent due to the financial
benefits derived from the underwriting.
Renaissance Capital employs proprietary statistical information on IPO
performance trends, number of pending IPOs, industry sectors, and valuation
trends to determine the overall tone of market activity. Other information
sources used by Renaissance Capital may include the IPO's prospectus filed with
the SEC, discussions and meetings with management, periodic corporate financial
reports, press releases, general economic and industry data supplied by
government agencies and trade associations, and research reports prepared by
broker/dealers.
Special Risks of IPOs
By definition, IPOs have not traded publicly until the time of their offerings.
Special risks associated with IPOs may include a limited number of shares
available for trading, unseasoned trading, lack of investor knowledge of the
company, and limited operating history, all of which may contribute to price
volatility. The limited number of shares available for trading in some IPOs may
make it more difficult for the IPO Fund to buy or sell significant amounts of
shares without an unfavorable impact on prevailing prices. In addition, some
IPOs are involved in relatively new industries or lines of business, which may
not be widely understood by investors. Some of the companies involved in new
industries may be regarded as developmental stage companies, without revenues or
operating income, or the near-term prospects of such. Foreign initial public
offerings are subject to foreign political and currency risks. Many IPOs are
issued by undercapitalized companies of small or microcap size.
<PAGE>
INVESTMENT POLICIES AND TECHNIQUES
Under normal market conditions, the IPO Fund will invest at least 65% of its
total assets in the common stock of IPOs on the offering and in the aftermarket.
Investments may be in both large and small capitalization companies. The IPO
Fund may modify the policies and techniques described herein without shareholder
approval unless a policy is expressly deemed to be changeable only by
shareholder vote. The following provides a brief description of some additional
types of securities in which the IPO Fund may invest including certain
transactions it may enter into and techniques it may use:
Public Companies Similar to IPOs
The IPO Fund may invest up to 35% of its assets in related public companies
whose valuations may be affected by an IPO. The occasion of an IPO may directly
affect the valuations of similar publicly traded companies, creating investment
opportunities. This occurs because underwriters and investors use the valuations
of similar public companies as a benchmark when evaluating the price of an IPO.
The IPO Fund will have the benefit of Renaissance Capital's research, which
compares each IPO to financially or competitively analogous publicly traded
comparable companies.
Short Term Obligations
When Renaissance Capital deems market or economic conditions to be unfavorable,
the IPO Fund may assume a defensive position by temporarily investing up to 100%
of its assets in cash or high quality money market instruments, such as
short-term U.S. government obligations, commercial paper, or repurchase
agreements, seeking to protect its assets until conditions stabilize.
Investment in Foreign Issuers
The IPO Fund will invest primarily in securities of companies domiciled in the
United States, but the IPO Fund may also invest up to 25% of its assets,
measured at the time of investment, in securities of foreign issuers. However,
investments in foreign domiciled companies may be made without limitation,
provided that the securities are registered with the SEC and trade on a U.S.
stock exchange. Such investments will be made either directly in such issuers or
indirectly through American Depository Receipts ("ADRs"), American Depository
Shares ("ADSs") or closed-end investment companies.
Foreign securities involve inherent risks that are different from those of
domestic issuers, including political or economic instability of the issuer or
the country of issue, changes in foreign currency and exchange rates and the
possibility of adverse changes in investment or exchange control regulations.
Currency fluctuations will affect the net asset value of the IPO Fund
irrespective of the performance of the underlying investments in foreign
issuers. Typically, there is less publicly available information about a foreign
company than about a U.S. company and foreign companies may be subject to less
stringent auditing and reporting requirements. Income from foreign securities
owned by the IPO Fund may be reduced by withholding tax at the source, which
would reduce dividend income payable to the IPO Fund shareholders. Moreover,
securities of many foreign companies may be less liquid and their prices more
volatile than those securities of comparable domestic companies. There is
generally less government regulation and supervision of foreign stock exchanges,
brokers, and issuers, which may make it difficult to enforce contractual
obligations. In addition, with respect to certain foreign countries, there is
the possibility of expropriation, confiscation, taxation and limitations on the
removal of funds or other assets of the IPO Fund.
<PAGE>
Put, Call Options and Futures Contracts
The IPO Fund may buy and sell call and put options to protect against changes in
market prices or to enhance investment performance. In addition, the IPO fund
may enter into futures contracts, options on futures contracts, and stock index
futures contracts and options thereon, for the purposes of remaining fully
invested and reducing transaction costs.
Index Futures and Options
The IPO Fund may buy and sell index futures contracts ("index futures") and
options on index futures and on indices for hedging purposes (or may purchase
warrants whose value is based on the value from time to time of one or more
foreign securities indices). An index future is a contract to buy or sell units
of a particular bond or stock index at an agreed price on a specified future
date. Depending on the change in value of the index between the time when the
IPO Fund enters into and terminates index futures or options transaction, the
IPO Fund realizes a gain or loss. The IPO Fund may also buy and sell index
futures and options to increase its investment return.
Illiquid Investments and Restricted Securities
The IPO Fund may invest up to 15% of its net assets in illiquid investments
(investments that cannot readily be sold within seven days) including restricted
securities which do not meet the criteria for liquidity established by the Board
of Trustees. Renaissance Capital, under the supervision of the Board of
Trustees, determines the liquidity of the IPO Fund's investments. The absence of
a trading market can make it difficult to ascertain a market value for illiquid
investments. Disposing of illiquid investments may involve time-consuming
negotiation and legal expenses. Restricted securities are securities that cannot
be sold to the public without registration under the Securities Act of 1933.
Unless registered for sale, these securities can only be sold in privately
negotiated transactions or pursuant to an exemption from registration.
Short Selling
The IPO Fund may from time to time sell securities short. A short sale is a
transaction in which the IPO Fund sells borrowed securities in anticipation of a
decline in the market price of the securities. The IPO Fund may make a profit or
incur a loss depending on whether the market price of the security decreases or
increases between the date of the short sale and the date on which the IPO Fund
must replace the borrowed security. All short sales must be fully
collateralized, and the IPO Fund will not sell securities short if, immediately
after and as a result of the sale, the value of all securities sold short by the
IPO Fund exceeds 25% of its total assets. The IPO Fund may also engage in a
technique known as selling short "against the box." When selling short "against
the box," the IPO Fund will own an equal amount of securities or securities
convertible into or exchangeable, without payment of any further consideration,
for securities of the same issue as and in an amount equal to, the securities
sold short. Gain will be recognized as a result of certain constructive sales
including short sales against the box.
Repurchase Agreements
Under the terms of a repurchase agreement, the IPO Fund acquires securities from
financial institutions or registered broker-dealers, subject to the seller's
agreement to repurchase such securities at a mutually agreed upon date and
price. The seller is required to maintain the value of collateral held pursuant
to the agreement at not less than the repurchase price (including accrued
interest). If the seller were to default on its repurchase obligation or become
insolvent, the IPO Fund would suffer a loss to the extent that the proceeds from
a sale of the underlying portfolio securities were less than the repurchase
price, or to the extent that the disposition of such securities by the IPO Fund
was delayed pending court action. Repurchase agreements are considered to be
loans by the staff of the SEC.
<PAGE>
Convertible Securities
The IPO Fund may invest in all types of common stocks and equivalents (such as
convertible debt securities and warrants) and preferred stocks. The IPO Fund may
invest in convertible securities which may offer higher income than the common
stocks into which they are convertible. The convertible securities in which the
IPO Fund may invest consist of bonds, notes, debentures and preferred stocks
that may be converted or exchanged at a stated or determinable exchange ratio
into underlying shares of common stock.
Securities Lending
For incremental income purposes, the IPO Fund may lend its portfolio securities
constituting up to 33 1/3% of its total assets to U.S. or foreign banks or
broker/dealers which have been rated within the two highest grades assigned by
Standard & Poor's Corporation or Moody's Investors Service or which have been
determined by Renaissance Capital to be of equivalent quality. Renaissance
Capital is responsible for monitoring compliance with this rating standard
during the term of any securities lending agreement. With any loan of portfolio
securities, there is a risk that the borrowing institution will fail to
redeliver the securities when due. However, loans of securities by the IPO Fund
will be fully collateralized at all times by at least 100% of the current market
value of the lent securities. This policy may not be changed without shareholder
approval.
Leverage
The IPO Fund may from time to time use borrowed money to increase its portfolio
positions in an amount not to exceed 33 1/3% of its total assets. Investment
gains realized with borrowed funds that exceed the cost of such borrowings
(including interest costs) may cause the net asset value of IPO Fund shares to
increase more dramatically than would otherwise be the case. On the other hand,
leverage can cause the net asset value of the IPO Fund shares to decrease more
rapidly than normal if the securities purchased with borrowed money decline in
value or if the investment performance of such securities does not cover the
cost of borrowing.
Portfolio Turnover
The IPO Fund may make short-term investments when it is deemed desirable to do
so. The IPO Fund may, from time to time, sell a security without regard to the
length of time that it has been held to realize a profit or to avoid an
anticipated loss. Short-term transactions produce higher portfolio turnover
rates than would otherwise be the case, resulting in the likelihood of larger
expenses (including brokerage commissions) than are incurred by mutual funds
that engage primarily in long-term transactions. The IPO Fund's portfolio
turnover rate will fluctuate annually and may exceed 200% in any given year.
<PAGE>
MANAGEMENT OF THE IPO FUND
Investment Adviser
Renaissance Capital, located at 325 Greenwich Avenue, Greenwich, CT, 06830,
serves as the investment adviser pursuant to an Investment Advisory Agreement
(the "Investment Advisory Agreement"), which provides that Renaissance Capital
will furnish continuous investment advisory services and management to the IPO
Fund, subject to the overall authority of the IPO Fund's Board of Trustees.
Renaissance Capital specializes in researching IPOs and has been providing its
proprietary research, primarily to institutional investors, since 1992.
Renaissance Capital is internationally recognized as a leading provider of
research on initial public offerings. Renaissance Capital has analyzed and built
a proprietary research database of more than 2,000 IPOs and 4,000 directly
analogous already-public companies. Renaissance Capital believes it is the
leading provider of such research to institutional investors. In addition,
Renaissance Capital makes full-length and abridged versions of its original
research available to a wide group of investors through various electronic
delivery media. This research and statistical information on IPOs will be used
in selecting securities for the IPO Fund.
Renaissance Capital supervises and manages the investment portfolio of the IPO
Fund and directs the day-to-day management of the IPO Fund's investment
portfolio. Although Renaissance Capital has had much experience in advising
institutional investors, it has not previously provided investment advisory
services to registered investment companies or to individuals.
For its services Renaissance Capital will receive an annual fee of 1.5% on the
average daily net assets of the IPO Fund. Renaissance Capital may, from time to
time, voluntarily agree to defer or waive fees or absorb some or all of the
expenses of the IPO Fund. In the event it should do so, such fee deferrals and
expense absorptions are subject to later reimbursement for a period of three
years.
Portfolio Managers
The principals of Renaissance Capital each have more than 17 years of relevant
portfolio management, securities analysis and corporate finance experience prior
to forming Renaissance Capital.
Linda R. Killian, C.F.A.
Founder and Principal of Renaissance Capital, her 17-year professional
experience spans investment management and equity research.
Before forming Renaissance Capital, she was a portfolio manager and
analyst with Wertheim Schroder Investment Services, where she managed
broadly diversified equity and balanced accounts for pension, high net
worth and not-for-profit organizations. Her analytic coverage included
health care, retailing, telecommunications services, consumer products
and media. Prior to Wertheim Schroder, she was a portfolio manager and
equity analyst with Citicorp Investment Management where she created,
managed and researched the Medium Capitalization Stock Fund, one of the
first investment vehicles focusing on the mid-cap sector. Over the six
years at Citicorp, she also covered a variety of industries as an
analyst, including telecommunication services, special situations,
multi-industry companies and mid-capitalization companies. Before
joining Citicorp, she was a member of the Utility Corporate Finance
Group at The First Boston Corporation, where she was involved in
numerous utility debt and equity financings and specialized in
financial issues pertaining to diversification and deregulation. As a
public utility finance professional, she appeared as an expert witness
before public utility commissions and published articles on
deregulation in industry journals.
<PAGE>
Ms. Killian earned a M.B.A. from the Wharton School in 1979 and a B.A.
from New York University in 1972, where she was designated an
Outstanding Scholar. She is a Chartered Financial Analyst and is active
in the New York Society of Security Analysts.
Kathleen Shelton Smith
Founder and Principal of Renaissance Capital, her 17-year professional
career has focused on providing investment banking services to and
equity research on technology and emerging growth companies. Her
industry expertise is broad including technology, communications,
health care and industrial companies.
Prior to forming Renaissance Capital in 1991, she was a director of
Merrill Lynch Capital Markets' Technology and Emerging Growth
Investment Banking Group. Her experience includes mergers and
acquisitions and numerous public equity offerings. She has been the
investment banker for many IPOs including Cabletron Systems, EMC
Corporation and United States Cellular. Over the years she has been a
keynote speaker at many of the highly regarded Technologic Conferences
including the conferences on Personal Computers, Communications,
Software and Semiconductors.
Ms. Smith earned a M.B.A. from the Wharton School in 1979 and a
B.A., Phi Beta Kappa, from Pennsylvania State University in 1976.
She is certified by the NASD as a general securities principal.
William K. Smith
Founder and President of Renaissance Capital, his 18-year professional
experience covers equity research, investment banking, financial
restructuring and management consulting.
Prior to forming Renaissance Capital, he was an investment banking
senior vice president at Kidder Peabody where he was a founding member
of Kidder's Financial Restructuring Group. This group was involved in
numerous significant and complex restructuring assignments. His
industry experience spans electrical equipment, retailing, steel,
energy, health care, automobile, technology, publishing, banking and
insurance. He was a vice president in the Corporate Finance Group at
Bear Stearns prior to Kidder Peabody. While at Bear Stearns, he
specialized in corporate restructurings, valuations and mergers &
acquisitions. Before that, he was a senior manager in management
consulting at the Touche Ross Financial Services Center where he
specialized in valuations and M&A for a broad cross section of clients.
He is the author of "Strategic Growth Through Mergers and
Acquisitions," which was published by Prentice Hall in the United
States and Japan.
Mr. Smith earned a M.B.A. in finance from the Wharton School in 1978
and a B.S. in Electrical Engineering from Villanova University in
1973. He is certified by the NASD as a general securities
principal and a financial and operations principal.
<PAGE>
Fund Administration
Under an Administration and Fund Accounting Agreement (the "Administration
Agreement"), Chase Global Funds Services Company (the "Administrator"), located
at 73 Tremont Street, Boston, Massachusetts 02108, generally supervises certain
operations of the IPO Fund, subject to the over-all authority of the Board of
Trustees.
For its services, the Administrator receives a maximum annual fee of .17%,
computed daily and payable monthly as a percent of assets under management.
Fund Brokerage and Trading
The IPO Fund may pay a portion of its total brokerage commissions to Renaissance
Capital Investments, Inc. (the "Broker/Dealer"), an affiliate of Renaissance
Capital. The Broker/Dealer will clear transactions through unaffiliated
broker/dealers. The IPO Fund will trade directly with dealers making the most
favorable market (both in terms of price and number of shares) at net prices to
the IPO Fund. In regard to transactions on the New York Stock Exchange or other
exchanges, the IPO Fund will select a broker believed to have the ability to
execute orders at favorable prices and at competitive commission rates. Neither
the IPO Fund nor Renaissance Capital, which manages the IPO Fund's trading
operations, are obligated to select a certain broker solely on the basis of
commission rates to be paid, but rather seek a broker on the basis of the most
favorable execution, net of commissions. It is anticipated that the
Broker/Dealer will receive commissions at competitive rates from the IPO Fund in
connection with orders executed on an agency basis on stock exchanges. The IPO
Fund may allocate certain commissions to brokers for research and other
investment services benefiting the IPO Fund.
Renaissance Capital is authorized to place portfolio transactions with brokerage
firms participating in the distribution of shares of the IPO Fund if it
reasonably believes that the quality of the execution and the commission are
comparable to that available from other qualified brokerage firms. Renaissance
Capital is authorized to pay higher commissions to brokerage firms that provide
it with investment and research information than to firms that do not provide
such services if Renaissance Capital determines that such commissions are
reasonable in relation to the overall services provided.
Section 10(f) of the 1940 Act generally prohibits an investment company from
acquiring, during the existence of any underwriting or selling syndicate, any
securities the principal underwriter of which is affiliated with the investment
company's investment adviser. Rule 10f-3, however, permits an investment company
to purchase such securities if certain procedures are followed. These conditions
include (i) that the securities to be purchased are part of a registered
offering or are municipal securities; (ii) that the securities are purchased at
not more than the public offering price; (iii) that the securities are offered
pursuant to an underwriting agreement; (iv) that the commissions paid are fair
and reasonable; (v) that the securities meet certain qualifications and ratings;
(vi) that the amount of securities purchased are limited to up to 25% of the
principal amount of the offering; and (vii) that the investment company may not
purchase such securities directly or indirectly from certain affiliated persons.
The procedures must be approved and reviewed annually by the Board of Trustees
of the investment company.
<PAGE>
DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS AND TAXES
Dividends and Capital Gain Distributions
The IPO Fund intends to pay dividends from net investment income and net
realized capital gains (not offset by capital loss carryovers) on an annual
basis in December. Investors may elect to reinvest all income dividends and
capital gains distributions in shares of the IPO Fund or in cash as designated
on the New Account Application. If the investor does not specify an election,
all income dividends and capital gains distributions will automatically be
reinvested in full and fractional shares of the IPO Fund and calculated to the
nearest 1,000th of a share. Shares will be purchased at the net asset value in
effect on the business day after the dividend record date and will be credited
to the investor's account on such date. Reinvested dividends and distributions
receive the same tax treatment as those paid in cash.
An investor may change his or her election at any time by sending written
notification to the IPO Fund, P.O. Box 2798, Boston, MA 02108. The election is
effective for distributions with a dividend record date on or after the date
that the Transfer Agent receives notice of the election.
Taxes
The IPO Fund intends to qualify annually for and elect tax treatment applicable
to a "regulated investment company" under Subchapter M of the Internal Revenue
Code of 1996, as amended. Because it intends to distribute substantially all of
its net investment income and capital gains to shareholders, it is not expected
that the IPO Fund will be required to pay any federal income taxes. The IPO Fund
would be subject to a 4% excise tax on the portion of its undistributed income
if it fails to meet certain annual distribution requirements. The IPO Fund
intends to make distributions in a timely manner, and, accordingly, does not
expect to be subject to taxes. Shareholders will normally have to pay federal
income taxes and any state and local income taxes on the dividends and
distributions they receive from the IPO Fund. Shareholders not subject to tax on
their income will not be required to pay tax on amounts distributed to them.
At the end of each calendar year, shareholders are sent full information on
dividends and long-term capital gains distributions for tax purposes, including
information as to the portion taxable as ordinary income and the portion taxable
as long-term capital gains.
Prior to purchasing shares of the IPO Fund, prospective shareholders (except for
tax qualified retirement plans) should consider the impact of dividends or
capital gains distributions which are expected to be announced, or have been
announced but not paid. Any such dividends or capital gains distributions paid
shortly after a purchase of shares by an investor prior to the record date will
have the effect of reducing the per share net asset value by the amount of the
dividends or distributions. All or a portion of such dividends or distributions,
although in effect a return of capital, is subject to taxation.
Shareholders are advised to consult their own tax advisers with respect to these
matters.
<PAGE>
INVESTING IN THE IPO FUND
Shares of the IPO Fund may be purchased directly from Renaissance Capital Funds
through an account maintained with a securities broker or other financial
institution. Investors may be charged a fee if they effect transactions through
a securities broker or agent.
All purchases must be made in U.S. dollars and checks must be drawn on U.S.
banks. No cash will be accepted. A $15 fee may be charged against an investor's
account for any payment check returned to the Transfer Agent for insufficient
funds, stop payment, closed account or other reasons. The investor will also be
responsible for any losses suffered by the IPO Fund as a result. The IPO Fund
reserves the right to reject any purchase order for IPO Fund shares. No share
certificates will be issued.
The minimum purchase requirements, which may be altered in certain
circumstances, are $2,500 for regular accounts; and $500 for IRAs. Additional
investments are $100. Questions about the IPO Fund can be answered by calling
toll-free 1-888-IPO-FUND.
Procedure for Purchasing IPO Fund Shares
To Open an Account: To Add to an Account:
By Mail Complete and sign the Make the check
New Account Application. payable to the IPO
Make sure the check is Fund and mail to the
payable to the IPO Fund address at the left.
and mail to: Put the account name,
address and IPO Fund
The IPO Fund account number on the
P.O. Box 2798 check.
Boston, MA 02208-2798
By Courier Follow instructions above Follow the
and send to: instructions above
and send to the
The IPO Fund address at the left.
c/o Chase Global Fund Services
73 Tremont Street
Boston, MA 02108-3913
By Telephone Telephone transactions Call toll free
may not be used for initial 1-888-IPO-FUND to
purchases. To establish, make your purchase
please select this service from a checking or
on the New Account money market account
Application. by electronic funds
transfer. Specify
name, address and IPO
Fund account number.
<PAGE>
By Wire Call toll free 1-888-IPO-FUND Follow the
to notify us of a wire instructions at the
transfer and to verify left. Please note
instructions. You will be that wires may be
given a wire reference rejected if they do
control number. Then wire funds not contain complete
care of Chase Manhattan Bank: account information.
Credit: 021000021
Account No.: 910-2-776128
Wire Reference Control No.:____________
Further Credit: IPO Fund Shareholder
Account No.:_______________
Shareholder Name: ____________________
Include your name, address and taxpayer ID.
Purchases by Mail
The New Account Application, if properly filled out and accompanied by payment
in the form of a check made payable to the IPO Fund, will be processed upon
receipt by the Transfer Agent. If the Transfer Agent receives your order and
payment by the close of regular trading (currently 4:00 p.m. New York City time)
on the New York Stock Exchange, your shares will be purchased at the net asset
value calculated at the close of regular trading on that day. If received after
that time, your shares will be purchased at the net asset value determined as of
the close of regular trading on the next business day.
Purchases Through Financial Service Agents
If you are investing through a Financial Service Agent, please refer to their
program materials for any additional special provisions or fees that may be
different from those described in this Prospectus. Certain Financial Service
Agents may receive compensation from the IPO Fund. The Financial Service agent
must promise to send to the Transfer Agent immediately available funds in the
amount of the purchase price within one business day from the date of the trade.
Purchases by Telephone
Only bank accounts held at domestic financial Institutions that are Automated
Clearing House (ACH) members can be used for telephone transactions. Telephone
transactions may not be used for initial purchases. Your account must already be
established prior to initiating telephone transactions. Your shares will be
purchased at the net asset value determined as of the close of regular trading
on the date that the Transfer Agent receives payment for shares purchased by
electronic funds transfer through the ACH system. Most transfers are completed
within three business days after your call to place the order. To preserve
flexibility, the IPO Fund may revise or remove the ability to purchase shares by
phone, or may charge a fee for such service, although currently, the IPO Fund
does not expect to charge a fee.
The IPO Fund will employ reasonable procedures to confirm that instructions
communicated by telephone are genuine. Such procedures may include requiring
some form of personal identification prior to acting upon telephone
instructions, providing written confirmations of all such transactions, and/or
tape recording all telephone instructions. Assuming procedures such as the above
have been followed, the IPO Fund will not be liable for any loss, cost or
expense for acting upon an investor's telephone instructions or for any
unauthorized telephone redemption. As a result of this policy, the investor will
bear the risk of any loss unless the IPO Fund has failed to follow such
procedure(s).
Purchases by Wire
Before you purchase your initial shares by wire, you must prepare and file a New
Account Application with the Transfer Agent. The Transfer Agent must receive the
New Account Application before any of the shares purchased can be redeemed. You
should contact your bank (which will need to be a commercial bank that is a
member of the Federal Reserve System) for information on sending funds by wire,
including any charges that your bank may make for these services.
<PAGE>
REDEEMING IPO FUND SHARES
You may sell (redeem) your shares at any time. A fee will be charged on the
redemption of shares equal to 2% of the redemption price of shares of the IPO
Fund held 90 days or less that are being redeemed. There is no redemption fee
for the sale of shares held longer than 90 days. The redemption fee will not
apply to shares representing the reinvestment of dividends and capital gains
distributions. Reinvested distributions will be sold first without a fee. The
redemption fee will be applied on a share by share basis using the "first shares
in, first shares out" (FIFO) method. Therefore, the oldest shares are considered
to have been sold first. Redemption fee proceeds will be applied to the IPO
Fund's aggregate expenses allocable to providing custody, redemption services,
including transfer agent fees, postage, printing, telephone costs and employment
costs relating to the handling and processing of redemptions. Any excess fee
proceeds will be added to the IPO Fund's capital. Ordinarily, the IPO Fund makes
payment by check for the shares redeemed within seven days after it receives a
properly completed request. However, the right of redemption may be suspended or
payment may be postponed under unusual circumstances such as when trading on the
New York Stock Exchange is restricted. Payment of redemption proceeds with
respect to shares purchased by check will not be made until the check or payment
received for investment has cleared, which may take up to 15 calendar days from
the purchase date.
Payment of the redemption proceeds for shares of the IPO Fund where an investor
requests wire payment will normally be made in federal funds on the next
business day. The Transfer Agent will wire redemption proceeds only to the bank
and account designated on the New Account Application or in written instructions
subsequently received by the Transfer Agent, and only if is a commercial bank
and a member of the Federal Reserve System. The Transfer Agent currently charges
a $10 fee for each payment made by wire of redemption proceeds, which fee will
be deducted from the investor's proceeds.
Procedure for Requesting Redemption
You may request the sale of your shares by mail, courier or telephone as
described below:
By Mail: By Courier:
The IPO Fund The IPO Fund
P.O. Box 2798 c/o Chase Global Fund Services
Boston, MA 02208-2798 73 Tremont Street
Boston, MA 02108-3913
<PAGE>
The selling price of each share being redeemed will be the IPO Fund's per share
net asset value next calculated after receipt of all required documents in good
order. Good order means that the request must include:
o Your IPO Fund account number
o The number of shares or dollar amount to be sold (redeemed)
o The signatures of all account owners exactly as they are registered on
the account
o Any required signature guarantees
o Any supporting legal documentation that is required in the case of
estates, trusts, corporations or partnerships
o In the case of shares being redeemed from IRA or IRA/SEP Plan,
a statement of whether or not federal income tax should be withheld
(in the absence of any statement, federal tax will be withheld)
A signature guarantee of each owner is required to redeem shares in the
following situations (i) if you change ownership on your account; (ii) when you
want the redemption proceeds sent to a different address from that registered on
the account; (iii) if the proceeds are to be made payable to someone other than
the account's owner(s); (iv) any redemption transmitted by federal wire transfer
to your bank; and (v) if a change of address request has been received by the
Fund or the Transfer Agent within the last 15 days. In addition, signature
guarantees are required for all redemptions of $25,000 or more from any
shareholder account.
Signature guarantees are designed to protect both you and the IPO Fund from
fraud. Signature guarantees can be obtained from most banks, credit unions or
savings associations, or from broker/dealers, national securities exchanges,
registered securities associations or clearing agencies deemed eligible by the
SEC. Notaries cannot provide signature guarantees.
By Telephone:
Shares of the IPO Fund may also be sold by calling the Transfer Agent toll free
at 1-888-IPO-FUND. To use this procedure for telephone redemption, a shareholder
must have previously elected this procedure in writing, which election will be
reflected in the records of the Transfer Agent, and the redemption proceeds must
be mailed directly to the investor or transmitted to the investor's
predesignated account at a domestic bank. To change the designated account or
address, a written request with signature(s) guaranteed must be sent to the
Transfer Agent. The IPO Fund reserves the right to limit the number of telephone
redemptions by an investor. Once made, telephone requests may not be modified or
canceled. The selling price of each share being redeemed will be the IPO Fund's
per share net asset value next calculated after receipt by the Transfer Agent of
the telephone redemption request. The IPO Fund will not be liable for following
instructions communicated by telephone that it reasonably believes to be
genuine.
The IPO Fund reserves the right to redeem shares held in any account at its
option upon thirty days written notice if the net asset value of the account
falls below $500 for reasons other than market conditions and remains so during
the notice period.
<PAGE>
SHAREHOLDER SERVICES
Automatic Investment Plan
The IPO Fund offers an Automatic Investment Plan whereby an investor may
automatically purchase shares of the IPO Fund on a monthly basis ($100 minimum
per transaction). Applications to establish the Automatic Investment Plan are
available from the IPO Fund.
Retirement Plans
The IPO Fund offers various tax-sheltered retirement plans that allow investors
to invest for retirement and to shelter some of their income from taxes.
Application forms, as well as descriptions of applicable service fees and
certain limitations on contributions and withdrawals, are available from the
Transfer Agent of the IPO Fund upon request. These Retirement Plans include
Individual Retirement Accounts (IRAs), Rollover IRAs, Simplified Employee
Pension Plan (SEP/IRA), and Salary Reduction SEPs.
Distribution Plan
The IPO Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1
under the 1940 Act. The Plan authorizes payments by the IPO Fund in connection
with the distribution of its shares at an annual rate, as determined from time
to time by the Board of Trustees, of up to 0.25% of the IPO Fund's average daily
net assets. Payments under the distribution plan shall be used to compensate or
reimburse the Broker/Dealer and other broker-dealers for services provided and
expenses incurred in connection with the sale of the IPO Fund's shares, and are
not tied to the amount of actual expenses incurred. Payments may be used to
compensate broker-dealers with trail or maintenance commissions at an annual
rate of up to 0.25% of the average daily net asset value of shares invested in
the IPO Fund by customers of these broker-dealers.
Shareholder Servicing Agents
The IPO Fund has entered into shareholder servicing agreement with certain
shareholder servicing agents under which the shareholder servicing agents have
agreed to provide certain support services to their customers who beneficially
own shares of the IPO Fund. These services include assisting with purchase and
redemption transactions, maintaining shareholder accounts and records,
furnishing customer statements, transmitting shareholder reports and
communications to customers and other similar shareholder liaison services. For
performing these services, each shareholder servicing agent receives an annual
fee of up to 0.25% of the average daily net assets of shares of the IPO Fund
held by investors for whom the shareholder servicing agent maintains a servicing
relationship. Shareholder servicing agents may subcontract with other parties
for the provision of shareholder support services.
Shareholder servicing agents may offer additional services to their customers,
such as pre-authorized or systematic purchase and redemption plans. Each
shareholder servicing agent may establish its own terms and conditions,
including limitations on the amounts of subsequent transactions, with respect to
such services. Certain shareholder servicing agents may (although they are not
required by the IPO Fund to do so) credit to the accounts of their customers
from whom they are already receiving other fees an amount not exceeding such
other fees or the fees for their services as shareholder servicing agents.
<PAGE>
NET ASSET VALUE
Net asset value for the IPO Fund is determined as of the end of regular trading
hours on the New York Stock exchange (currently 4:00 p.m. Eastern Time) on days
that the New York Stock Exchange is open. The net asset value per share is
determined by dividing the market value of the IPO Fund's securities as of the
close of trading plus any cash or other assets (including dividends and accrued
interest) less all liabilities (including accrued expenses) by the number of the
IPO Fund's shares outstanding.
IPO FUND PERFORMANCE
From time to time, the IPO Fund may advertise its "average annual total return"
over various periods of time. This total return figure shows the average
percentage change in value of an investment in the IPO Fund from the beginning
date of the measuring period to the ending date of the measuring period. The
figure reflects changes in the price of the IPO Fund's shares and assumes that
any income dividends and/or capital gains distributions made by the IPO Fund
during the period are reinvested in shares of the IPO Fund. Figures may be given
for recent one, three, five and ten-year periods (when applicable), and may be
given for other periods (such as from commencement of the IPO Fund's operations,
or on a year-by-year basis). When considering "average" total return figures for
periods longer than one year, investors should note that the IPO Fund's annual
total return for any one year in the period might have been greater or less than
the average for the entire period. The IPO Fund also may use "aggregate" total
return figures for various periods, representing the cumulative change in value
of an investment in the IPO Fund for the specific period (again reflecting
changes in the IPO Fund's share price and assuming reinvestment of dividends and
distributions). Aggregate total returns may be shown by means of schedules,
charts or graphs, and may indicate subtotals of the various components of total
return (that is, the change in value of initial investment, income dividends and
capital gains distributions).
The IPO Fund may quote the IPO Fund's average annual total and/or aggregate
total return for various time periods in advertisements or communications to
shareholders. The IPO Fund may also compare its performance to that of other
mutual funds with similar investment objectives and to stock and other relevant
indices or to rankings prepared by independent services or industry
publications. For example, the IPO Fund's total return may be compared to data
prepared by Lipper Analytical Services, Inc., Morningstar, Value Line Mutual
Fund Survey and CDA Investment Technologies, Inc. as well as other providers of
mutual fund total return data. The IPO Fund's total return may also be compared
to such indices as the Dow Jones Industrial Average, the Standard & Poor's 500
Composite Index, the NASDAQ Composite OTC Index, and the Russell 2000 Index.
<PAGE>
ADDITIONAL INFORMATION
Renaissance Capital Funds, a Delaware Trust organized on January 8, 1997, may
issue an unlimited number of shares and classes of the IPO Fund. Shares of each
class of the IPO Fund participate equally in dividends and distributions and
have equal voting, liquidation and other rights. When issued and paid for,
shares will be fully paid and nonassessable by the Renaissance Capital Funds and
will have no preference, conversion, exchange or preemptive rights. Shareholders
are entitled to one vote for each full share owned and fractional votes for
fractional shares owned. For those investors with qualified trust accounts, the
trustee will vote the shares at meetings of the IPO Fund's shareholders in
accordance with the shareholder's instructions or will vote in the same
percentage as shares that are not so held in trust. The trustee will forward to
these shareholders all communications received by the trustee, including proxy
statements and financial reports. Renaissance Capital Funds and the IPO Fund are
not required to hold annual meetings of shareholders and in ordinary
circumstances do not intend to hold such meetings. The Trustees may call special
meetings of shareholders for action by shareholder vote as may be required by
the 1940 Act or the Declaration of Trust. Under certain circumstances, the
Trustees may be removed by action of the Trustees or by the shareholders.
Shareholders holding 10% or more of Renaissance Capital Fund's outstanding
shares may call a special meeting of shareholders for the purpose of voting upon
the question of removal of Trustees.
The Board of Trustees may authorize Renaissance Capital Funds to offer other
funds that may differ in the types of securities in which their assets may be
invested.
Renaissance Capital and the IPO Fund have adopted a Code of Ethics (the "Code")
which requires investment personnel (a) to pre-clear all personal securities
transactions, (b) to file reports regarding such transactions, and (c) to
refrain from personally engaging in (i) short-term trading of a security without
preclearance, (ii) transactions involving a security within seven days of an IPO
Fund transaction involving the same security, and (iii) transactions involving
securities being considered for investment by the IPO Fund. The Code also
prohibits investment personnel from purchasing securities in an initial public
offering. Personal trading reports are reviewed periodically by Renaissance
Capital and the Board of Trustees reviews annually such reports (including
information on any substantial violations of the Code). Violations of the Code
may result in censure, monetary penalties, suspension or termination of
employment.
Counsel
Kramer, Levin, Naftalis & Frankel, 919 Third Avenue, New York, NY 10022-3852,
serves as counsel to Renaissance Capital Funds.
Independent Certified Public Accountants
Tait, Weller & Baker, 8 Penn Plaza, Suite 800, Philadelphia, PA 19103 serves as
independent certified public accountants of Renaissance Capital Funds.
Custodian, Transfer and Dividend Disbursing Agent
Chase Global Fund Services, which has its principal custodial address at 73
Tremont Street, Boston, MA 02108-3913, acts as custodian of the IPO Fund's
investments, and also serves a the IPO Fund's Transfer and Dividend Disbursing
Agent.
<PAGE>
TABLE OF CONTENTS
Page
Prospectus............................................................1
Fund Expenses.........................................................2
Prospectus Summary....................................................3
Investment Objective..................................................4
Investment Policies and Techniques....................................5
Management of the IPO Fund............................................8
Dividends, Capital Gain Distributions and Taxes.......................11
Investing in the IPO Fund.............................................12
Redeeming IPO Fund Shares.............................................14
Shareholder Services..................................................16
Net Asset Value.......................................................17
IPO Fund Performance..................................................17
Additional Information................................................18
<PAGE>
The IPO Plus Aftermarket Fund
IPO
logo
R Renaissance Capital
The IPO Experts(TM)
Renaissance Capital Corporation
325 Greenwich Avenue
Greenwich, CT 06830
Toll Free 1-888-IPO-Fund
www. ipo-fund com
<PAGE>
PART B STATEMENT OF ADDITIONAL INFORMATION
1
The IPO Plus Aftermarket Fund
Renaissance Capital Corporation
325 Greenwich Avenue
Greenwich, CT 06830
1-888-IPO-FUND
www.ipo-fund.com
STATEMENT OF ADDITIONAL INFORMATION
November 1997
The IPO Plus Aftermarket Fund (the "IPO Fund") is a series of Renaissance
Capital Greenwich Funds ("Renaissance Capital Funds"), a Delaware Trust,
operating as a diversified, open-end investment company.
This Statement of Additional Information is not a prospectus but contains
information in addition to and more detailed than that set forth in the
Prospectus and should be read in conjunction with the Prospectus for Renaissance
Capital Greenwich Funds also dated , 1997. A Prospectus may be obtained without
charge by writing the IPO Fund, P.O. Box 2798, Boston, MA 02208, or by calling
toll free at 1-888-IPO FUND.
TABLE OF CONTENTS
INVESTMENT OBJECTIVE, POLICIES AND TECHNIQUES...................... 2
INVESTMENT RESTRICTIONS............................................ 7
TRUSTEES AND OFFICERS............................................. 7
INVESTMENT ADVISORY AND OTHER SERVICES............................. 9
BROKERAGE ARRANGEMENTS............................................. 10
HOW TO BUY SHARES.................................................. 11
HOW TO REDEEM SHARES.............................................. 11
VALUATION OF SECURITIES............................................ 11
SHAREHOLDER SERVICES............................................... 12
TAXES.............................................................. 12
ADDITIONAL INFORMATION............................................. 13
PERFORMANCE INFORMATION............................................ 14
FINANCIAL STATEMENT................................................ 16
<PAGE>
INVESTMENT OBJECTIVE, POLICIES AND TECHNIQUES
The following information supplements, and should be read in conjunction with,
the sections in the Prospectus entitled "Investment Objective" and "Investment
Policies and Techniques".
Futures Contracts
The IPO Fund may enter into futures contracts, options on futures contracts and
stock index futures contracts and options thereon for the purposes of remaining
fully invested and reducing transaction costs. Futures contracts provide for the
future sale by one party and purchase by another party of a specified amount of
a specific security, class of securities, or an index at a specified future time
and at a specified price. A stock index futures contract is a bilateral
agreement pursuant to which two parties agree to take or make delivery of an
amount of cash equal to a specified dollar amount times the difference between
the stock index value at the close of trading of the contracts and the price at
which the futures contract is originally struck. Futures contracts which are
standardized as to maturity date and underlying financial instrument are traded
on national futures exchanges. Futures exchanges and trading are regulated under
the Commodity Exchange Act by the Commodity Futures Trading Commission ("CFTC"),
a U.S. Government agency.
Although futures contracts by their terms call for actual delivery and
acceptance of the underlying securities, in most cases the contracts are closed
out before the settlement date without the making or taking of delivery. Closing
out an open futures position is done by taking an opposite position ("buying" a
contract which has previously been "sold," or "selling" a contract previously
purchased) in an identical contract to terminate the position. A futures
contract on a securities index is an agreement obligating either party to pay,
and entitling the other party to receive, while the contract is outstanding,
cash payments based on the level of a specified securities index. The
acquisition of put and call options on futures contracts will, respectively,
give the IPO Fund the right (but not the obligation), for a specified price, to
sell or to purchase the underlying futures contract, upon exercise of the
option, at any time during the option period. Brokerage commissions are incurred
when a futures contract is bought or sold.
Futures traders are required to make a good faith margin deposit in cash or
government securities with a broker or custodian to initiate and maintain open
positions in futures contracts. A margin deposit is intended to assure
completion of the contract (delivery or acceptance of the underlying security)
if it is not terminated prior to the specified delivery date. Minimal initial
margin requirements are established by the futures exchange and may be changed.
Brokers may establish deposit requirements which are higher than the exchange
minimums. Initial margin deposits on futures contracts are customarily set at
levels much lower than the prices at which the underlying securities are
purchased and sold, typically ranging upward from less than 5% of the value of
the contract being traded.
After a futures contract position is opened, the value of the contract is
marked-to-market daily. If the futures contract price changes to the extent that
the margin on deposit does not satisfy margin requirements, payment of
additional "variation" margin will be required. Conversely, change in the
contract value may reduce the required margin, resulting in a repayment of
excess margin to the contract holder. Variation margin payments are made to and
from the futures broker for as long as the contract remains open. The IPO Fund
expects to earn interest income while its margin deposits are held pending
performance on the futures contract.
When interest rates are expected to rise or market values of portfolio
securities are expected to fall, the IPO Fund can seek through the sale of
futures contracts to offset a decline in the value of its portfolio securities.
When interest rates are expected to fall or market values are expected to rise,
the IPO Fund, through the purchase of such contracts, can attempt to secure
better rates or prices for the IPO Fund than might later be available in the
market when it effects anticipated purchases.
The IPO Fund's ability to effectively utilize futures trading depends on several
factors. First, it is possible that there will not be a perfect price
correlation between the futures contracts and their underlying stock index.
Second, it is possible that a lack of liquidity for futures contracts could
exist in the secondary market, resulting in an inability to close a futures
position prior to its maturity date. Third, the purchase of a futures contract
involves the risk that the IPO Fund could lose more than the original margin
deposit required to initiate a futures transaction.
Restrictions on the Use of Futures Contracts. The IPO Fund will only sell
futures contracts to protect securities it owns against price declines or
purchase contracts to protect against an increase in the price of securities it
intends to purchase. The IPO Fund will not enter into futures contract
transactions for purposes other than bona fide hedging purposes to the extent
that, immediately thereafter, the sum of its initial margin deposits on open
contracts exceeds 5% of the market value of the IPO Fund's total assets. In
addition, the IPO Fund will not enter into futures contracts to the extent that
the value of the futures contracts held would exceed 1/3 of the IPO Fund's total
assets. Futures transactions will be limited to the extent necessary to maintain
the Fund's qualification as a regulated investment company.
Renaissance Capital Funds, on behalf of the IPO Fund, has undertaken to restrict
its futures contract trading as follows: first, the IPO Fund will not engage in
transactions in futures contracts for speculative purposes; second, the IPO Fund
will not market its funds to the public as commodity pools or otherwise as
vehicles for trading in the commodities futures or commodity options markets;
third, the IPO Fund will disclose to all prospective shareholders the purpose of
and limitations on its commodity futures trading; fourth, the IPO Fund will
submit to the CFTC special calls for information. Accordingly, registration as a
commodities pool operator with the CFTC is not required.
In addition to the margin restrictions discussed above, transactions in futures
contracts may involve the segregation of funds pursuant to requirements imposed
by the Securities and Exchange Commission (the "SEC"). Under those requirements,
where the IPO Fund has a long position in a futures contract, it may be required
to establish a segregated account (not with a futures commission merchant or
broker, except as may be permitted under SEC rules) containing cash or certain
liquid assets equal to the purchase price of the contract (less any margin on
deposit). For a short position in futures or forward contracts held by the IPO
Fund, those requirements may mandate the establishment of a segregated account
(not with a futures commission merchant or broker, except as may be permitted
under SEC rules) with cash or certain liquid assets that, when added to the
amounts deposited as margin, equal the market value of the instruments
underlying the futures contracts (but are not less than the price at which the
short positions were established). However, segregation of assets is not
required if the IPO Fund "covers" a long position. For example, instead of
segregating assets, the IPO Fund, when holding a long position in a futures
contract, could purchase a put option on the same futures contract with a strike
price as high or higher than the price of the contract held by the IPO Fund. In
addition, where the IPO Fund takes short positions, or engages in sales of call
options, it need not segregate assets if it "covers" these positions. For
example, where the IPO Fund holds a short position in a futures contract, it may
cover by owning the instruments underlying the contract. The IPO Fund may also
cover such a position by holding a call option permitting it to purchase the
same futures contract at a price no higher than the price at which the short
position was established. Where the IPO Fund sells a call option on a futures
contract, it may cover either by entering into a long position in the same
contract at a price no higher than the strike price of the call option or by
owning the instruments underlying the futures contract. The IPO Fund could also
cover this position by holding a separate call option permitting it to purchase
the same futures contract at a price no higher than the strike price of the call
option sold by the IPO Fund.
Risk Factors in Futures Transactions. Positions in futures contracts may be
closed out only on an exchange which provides a secondary market for such
futures. However, there can be no assurance that a liquid secondary market will
exist for any particular futures contract at any specific time. Thus, it may not
be possible to close a futures position. In the event of adverse price
movements, the IPO Fund would continue to be required to make daily cash
payments to maintain the required margin. In such situations, if the IPO Fund
has insufficient cash, it may have to sell portfolio securities to meet daily
margin requirements at a time when it may be disadvantageous to do so. In
addition, the IPO Fund may be required to make delivery of the instruments
underlying futures contracts it holds. The inability to close options and
futures positions also could have an adverse impact on the ability to
effectively hedge them. The IPO Fund will minimize the risk that it will be
unable to close out a futures contract by only entering into futures contracts
which are traded on national futures exchanges and for which there appears to be
a liquid secondary market.
The risk of loss in trading futures contracts in some strategies can be
substantial, due both to the low margin deposits required, and the extremely
high degree of leverage involved in futures pricing. Because the deposit
requirements in the futures markets are less onerous than margin requirements in
the securities market, there may be increased participation by speculators in
the futures market which may also cause temporary price distortions. A
relatively small price movement in a futures contract may result in immediate
and substantial loss (as well as gain) to the investor. For example, if at the
time of purchase, 10% of the value of the futures contract is deposited as
margin, a subsequent 10% decrease in the value of the futures contract would
result in a total loss of the margin deposit, before any deduction for the
transaction costs, if the account were then closed out. A 15% decrease would
result in a loss equal to 150% of the original margin deposit if the contract
were closed out. Thus, a purchaser or sale of a futures contract may result in
losses in excess of the amount invested in the contract. However, because the
futures strategies engaged in by the IPO Fund are primarily for hedging
purposes, Renaissance Capital believes that the IPO Fund is generally not
subject to risks of loss exceeding those that would be undertaken if, instead of
the futures contract, it had invested in the underlying financial instrument and
sold it after the decline.
Utilization of futures transactions by the IPO Fund does involve the risk of
imperfect or no correlation where the securities underlying futures contract
have different maturities than the portfolio securities being hedged. It is also
possible that the IPO Fund could both lose money on futures contracts and also
experience a decline in value of its portfolio securities. There is also the
risk of loss by the IPO Fund of margin deposits in the event of bankruptcy of a
broker with whom the IPO Fund has an open position in a futures contract or
related option.
<PAGE>
Options
The IPO Fund may purchase and sell put and call options on their portfolio
securities to enhance investment performance and to protect against changes in
market prices.
Covered Call Options. The IPO Fund may write covered call options on its
securities to realize a greater current return through the receipt of premiums
than it would realize on its securities alone. Such option transactions may also
be used as a limited form of hedging against a decline in the price of
securities owned by the IPO Fund.
A call option gives the holder the right to purchase, and obligates the writer
to sell, a security at the exercise price at any time before the expiration
date. A call option is "covered" if the writer, at all times while obligated as
a writer, either owns the underlying securities (or comparable securities
satisfying the cover requirements of the securities exchanges), or has the right
to acquire such securities through immediate conversion of securities.
In return for the premium received when it writes a covered call option, the IPO
Fund gives up some or all of the opportunity to profit from an increase in the
market price of the securities covering the call option during the life of the
option. The IPO Fund retains the risk of loss should the price of such
securities decline. If the option expires unexercised, the IPO Fund realizes a
gain equal to the premium, which may be offset by a decline in price of the
underlying security. If the option is exercised, the IPO Fund realizes a gain or
loss equal to the difference between the IPO Fund's cost for the underlying
security and the proceeds of sale (exercise price minus commissions) plus the
amount of the premium.
The IPO Fund may terminate a call option that it has written before it expires
by entering into a closing purchase transaction. The IPO Fund may enter into
closing purchase transactions in order to free itself to sell the underlying
security or to write another call on the security, realize a profit on a
previously written call option, or protect a security from being called in an
unexpected market rise. Any profits from a closing purchase transaction may be
offset by a decline in the value of the underlying security. Conversely, because
increases in the market price of a call option will generally reflect increases
in the market price of the underlying security, any loss resulting from a
closing purchase transaction is likely to be offset in whole or in part by
unrealized appreciation of the underlying security owned by the IPO Fund.
Covered Put Options. The IPO Fund may write covered put options in order to
enhance its current return. Such options transactions may also be used as a
limited form of hedging against an increase in the price of securities that the
IPO Fund plans to purchase. A put option gives the holder the right to sell, and
obligates the writer to buy, a security at the exercise price at any time before
the expiration date. A put option is "covered" if the writer segregates cash and
high-grade short-term debt obligations or other permissible collateral equal to
the price to be paid if the option is exercised.
In addition to the receipt of premiums and the potential gains from terminating
such options in closing purchase transactions, the IPO Fund also receives
interest on the cash and debt securities maintained to cover the exercise price
of the option. By writing a put option, the IPO Fund assumes the risk that it
may be required to purchase the underlying security for an exercise price higher
than its then current market value, resulting in a potential capital loss unless
the security later appreciates in value.
The IPO Fund may terminate a put option that it has written before it expires by
a closing purchase transaction. Any loss from this transaction may be partially
or entirely offset by the premium received on the terminated option.
Purchasing Put and Call Options. The IPO Fund may also purchase put options to
protect portfolio holdings against a decline in market value. This protection
lasts for the life of the put option because the IPO Fund, as a holder of the
option, may sell the underlying security at the exercise price regardless of any
decline in its market price. In order for a put option to be profitable, the
market price of the underlying security must decline sufficiently below the
exercise price to cover the premium and transaction costs that the IPO Fund must
pay. These costs will reduce any profit the IPO Fund might have realized had it
sold the underlying security instead of buying the put option.
The IPO Fund may purchase call options to hedge against an increase in the price
of securities that the IPO Fund wants ultimately to buy. Such hedge protection
is provided during the life of the call option since the IPO Fund, as holder of
the call option, is able to buy the underlying security at the exercise price
regardless of any increase in the underlying security's market price. In order
for a call option to be profitable, the market price of the underlying security
must rise sufficiently above the exercise price to cover the premium and
transaction costs. These costs will reduce any profit the IPO Fund might have
realized had it bought the underlying security at the time it purchased the call
option.
<PAGE>
The IPO Fund may also purchase put and call options to attempt to enhance its
current return.
Risks Involved in the Sale of Options. Options transactions involve certain
risks, including the risks that Renaissance Capital will not forecast interest
rate or market movements correctly, that the IPO Fund may be unable at times to
close out such positions, or that hedging transactions may not accomplish their
purpose because of imperfect market correlations. The successful use of these
strategies depends on the ability of Renaissance Capital to forecast market and
interest rate movements correctly.
An exchange-listed option may be closed out only on an exchange which provides a
secondary market for an option of the same series. There is no assurance that a
liquid secondary market on an exchange will exist for any particular option or
at any particular time. If no secondary market were to exist, it would be
impossible to enter into a closing transaction to close out an option position.
As a result, the IPO Fund may be forced to continue to hold, or to purchase at a
fixed price, a security on which it has sold an option at a time when
Renaissance Capital believes it is inadvisable to do so.
Higher than anticipated trading activity or order flow or other unforeseen
events might cause The Options Clearing Corporation or an exchange to institute
special trading procedures or restrictions that might restrict the IPO Fund's
use of options. The exchanges have established limitations on the maximum number
of calls and puts of each class that may be held or written by an investor or
group of investors acting in concert. It is possible that Renaissance Capital
Funds and other clients of Renaissance Capital may be considered such a group.
These position limits may restrict the IPO Funds' ability to purchase or sell
options on particular securities. Options which are not traded on national
securities exchanges may be closed out only with the other party to the option
transaction. For that reason, it may be more difficult to close out unlisted
options than listed options. Furthermore, unlisted options are not subject to
the protection afforded purchasers of listed options by The Options Clearing
Corporation.
Short Sales
The IPO Fund may seek to hedge investments or realize additional gains through
short sales. Short sales are transactions in which the IPO 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 IPO Fund must borrow the security
to make delivery to the buyer. The IPO Fund then is obligated to replace the
security borrowed by purchasing it at the market price at or prior to 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 IPO Fund. Until the security is replaced, the
IPO Fund is required to repay the lender any dividends or interest that accrue
during the period of the loan. To borrow the security, the IPO Fund also may be
required to pay a premium, which would increase the cost of the security sold.
The net proceeds of the short sale will be retained by the broker (or by the IPO
Fund's custodian in a special custody account), to the extent necessary to meet
margin requirements, until the short position is closed out. The IPO Fund also
will incur transaction costs in effecting short sales. To secure its obligation
to deliver the securities sold short, the IPO Fund will deposit in escrow in a
separate account with its custodian, an equal amount of the securities sold
short or securities convertible into or exchangeable for such securities.
Securities Lending
The IPO Fund may lend its portfolio securities to broker-dealers, banks or
institutional borrowers of securities. The IPO Fund must receive a minimum of
100% collateral, plus any interest due in the form of cash or U.S. Government
securities. This collateral must be valued daily and should the market value of
the loaned securities increase, the borrower must furnish additional collateral
to the IPO Fund. During the time portfolio securities are on loan, the borrower
will pay the IPO Fund any dividends or interest paid on such securities plus any
interest negotiated between the parties to the lending agreement. Loans will be
subject to termination by the IPO Fund or the borrower at any time. While the
IPO Fund will not have the right to vote securities on loan, it intends to
terminate the loan and regain the right to vote if that is considered important
with respect to the investment.
<PAGE>
Convertible Securities
The IPO Fund may be required to permit the issuer of a convertible security to
redeem the security, convert it into the underlying common stock or sell it to a
third party. Thus, the IPO Fund may not be able to control whether the issuer of
a convertible security chooses to convert that security. If the issuer chooses
to do so, this action could have an adverse effect on the IPO Fund's ability to
achieve its investment objective.
Investment Company Securities
The IPO Fund may invest up to 5% of its total assets in the securities of any
one investment company, but may not own more than 3% of the securities of any
one investment company or invest more than 10% of its total assets in the
securities of other investment companies. Because such other investment
companies employ an investment adviser, such investment by the IPO Fund will
cause shareholders to bear duplicative fees, such as management fees.
Borrowing
The IPO Fund may, from time to time, borrow money to the maximum extent
permitted by the Investment Company Act of 1940, as amended (the "1940 Act")
from banks at prevailing interest rates for temporary or emergency purposes and
investing in additional securities. The IPO Fund's borrowings are limited so
that immediately after such borrowings the value of assets (including
borrowings) less liabilities (not including borrowings) is at least three times
the amount of the borrowings. Should the IPO Fund, for any reason, have
borrowings that do not meet the above test then, within three business days, the
IPO Fund must reduce such borrowings so as to meet the necessary test. Under
such a circumstance, the IPO Fund may have to liquidate portfolio securities at
a time when it is disadvantageous to do so. Gains made with additional funds
borrowed will generally cause the net value of the IPO Fund's shares to rise
faster than could be the case without borrowings. Conversely, if investment
results fail to cover the cost of borrowings, the net asset value of the Fund
could decrease faster than if there had been no borrowings.
INVESTMENT RESTRICTIONS
The IPO Fund has adopted the following restrictions and policies relating to the
investment of the assets of the IPO Fund and its activities. These are
fundamental restrictions and may not be changed without the approval of the
holders of a majority of the outstanding voting shares of the IPO Fund which
means the lesser of (1) the holders of more than 50% of the outstanding shares
of the IPO Fund or (2) 67% of the shares present if more than 50% of the shares
are present at a meeting in person or by proxy.
The IPO Fund may not:
1. Purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent the IPO
Fund from purchasing or selling options and futures contracts or from investing
in securities or other instruments backed by physical commodities).
2. Purchase or sell real estate unless acquired as a result of ownership of
securities or other instruments (but this shall not prevent the IPO Fund from
investing in securities or other instruments backed by real estate or securities
of companies engaged in the real estate business). Investments by the IPO Fund
in securities backed by mortgages on real estate or in marketable securities of
companies engaged in such activities are not hereby precluded.
3. Issue any senior security except that (a) the IPO Fund may engage in
transactions that may result in the issuance of senior securities to the extent
permitted under applicable regulations and interpretations of the 1940 Act or an
exemptive order; (b) the IPO Fund may acquire other securities, the acquisition
of which may result in the issuance of a senior security, to the extent
permitted under applicable regulations or interpretations of the 1940 Act; and
(c) subject to the restrictions set forth below, the IPO Fund may borrow money
as authorized by the 1940 Act.
4. Lend any security or make any other loan if, as a result, more than 33 1/3%
of the IPO Fund's total assets would be lent to other parties, but this
limitation does not apply to purchases of publicly issued debt securities or to
repurchase agreements.
5. Underwrite securities issued by others, except to the extent that the IPO
Fund may be considered an underwriter within the meaning of the Securities Act
of 1933 (the "1933 Act") in the disposition of restricted securities.
6. With respect to 75% of the IPO Fund's total assets, the IPO Fund may not
purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or any of its agencies or instrumentalities)
if, as a result (a) more than 5% of the IPO Fund's total assets would be
invested in the securities of that issuer, or (b) the IPO Fund would hold more
than 10% of the outstanding voting securities of that issuer.
7. Purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or any of its agencies or instrumentalities,
or repurchase agreements secured thereby) if, as a result, more than 25% of the
IPO Fund's total assets would be invested in the securities of companies whose
principal business activities are in the same industry. In the utilities
category, the industry shall be determined according to the service provided.
For example, gas, electric, water and telephone will be considered as separate
industries.
<PAGE>
TRUSTEES AND OFFICERS
Overall responsibility for management of the IPO Fund rests with the Trustees
who are elected by the shareholders. The Trustees, in turn, elect the officers
of the IPO Fund to actively supervise its day-to-day operations.
The Trustees and Officers of the IPO Fund and their principal occupations during
the past five years are set forth below.
Name and Address Position held with the IPO Fund Principal
- ---------------- ------------------------------- Occupations
During the
Past Five
Years
------------
William K. Smith * Chairman of the Board, Chairman of
325 Greenwich Avenue President and Trustee the Board,
Greenwich, CT 06830 President and
Director,
Renaissance
Capital
Corporation
(1991 -
present);
Senior Vice
President,
Kidder Peabody
(1989-1991);
Vice
President,
Bear Stearns
(1987-1989)
Linda R. Killian* Vice President, Secretary, Vice President
325 Greenwich Avenue co-Chief Investment Officer and Director,
Greenwich, CT 06830 and Trustee Renaissance
Capital
Corporation
(1992-
present);
Senior Vice
President,
Wertheim
Schroder (1989
-1992);
Vice President
and Portfolio
Manager,
Citicorp
Investment
Management
(1984-1989)
Kathleen Shelton Smith* Vice President, Treasurer, Vice President,
325 Greenwich Avenue co-Chief Investment Officer Treasurer,
Greenwich, CT 06830 and Trustee Secretary and
Director,
Renaissance
Capital
Corporation
(1991-present);
Director,
Merrill Lynch
Capital Markets
(1983-1991)
Martin V. Alonzo Trustee Chairman,
c/o Chase Industries Inc. President and
PO Box 152 Chief Executive
Montpelier, OH 43543 Officer, Chase
Industries Inc.
(1990-present);
Advisor to
Maxxam Group
(1987-1990);
Senior Vice
President and
President, AMAX
(1967-1987)
Warren K. Greene Trustee Senior Vice
c/o Trendlogic Associates, Inc. President,
One Fawcett Place Trendlogic
Greenwich, CT 06830 Inc., an
investment
adviser and
trading
advisor (1995
-present);
Consultant to
Mutual Funds
(1993-1994);
President,
Chief
Executive
Officer and
Investment
Officer,
American
Investor Funds
(1965-1993)
Philip D. Gunn Trustee Principal,
Growth Capital Partners, Inc. Growth Capital
520 Madison Avenue Partners, Inc.,
New York, N.Y. 10022 (1995-present);
Founder and
President,
Philip D. Gunn,
a merchant
banking firm
(1982-present)
Gerald W. Puschel Trustee President, F.
c/o F. Schumacher & Co. Schumacher &
79 Madison Avenue Co. (1989-
New York, NY 10016 present);
President,
Waverly Fabrics
(1980-1989)
*Trustees who are "interested persons" of the IPO Fund, as defined in the
1940 Act. The Trustees of the IPO Fund who are officers of employees of the
investment adviser receive no remuneration from the IPO Fund. Each of the
other Trustees is paid an annual retainer of $1,500 and is reimbursed for
the expenses of attending the meetings. Kathleen S. and William K. Smith are
married.
<PAGE>
The following table indicates the estimated compensation to be paid to each
Trustee from the Renaissance Capital Funds for a 12 month period ended September
30, 1997.
Estimated
Pension or Retirement Annual Benefits
Benefits Accrued as Upon
Portfolio Expenses Retirement
William K. Smith, Trustee.. -0- -0-
Linda R. Killian, Trustee -0- -0-
Kathleen Shelton Smith, -0- -0-
Trustee....................
Martin V. Alonzo, Trustee -0- -0-
Warren K. Greene, Trustee -0- -0-
Philip D. Gunn, Trustee.. -0- -0-
Gerald W. Puschel, Trustee -0- -0-
Total Compensation Total Compensation
from Fund from "Fund
Complex"
William K.Smith, Trustee.. -0- -0-
Linda R. Killian, Trustee.. -0- -0-
Kathleen Shelton Smith, Trustee.. -0- -0-
(1) Currently there is only the IPO Fund in the Renaissance Capital Fund
Complex.
INVESTMENT ADVISORY AND OTHER SERVICES
As described in the Prospectus, Renaissance Capital is the IPO Fund's investment
adviser, providing services under the advisory and service contracts.
Renaissance Capital has been a registered investment adviser since August 1994
and it and its predecessor have been operating since September 1991.
The principal executive officers and directors of Renaissance Capital
are: William K. Smith, Chairman and President; Kathleen Shelton Smith,
Director, Vice President, Secretary and Treasurer; and Linda R. Killian,
Director and Vice President. Renaissance Capital is wholly owned by the three
principals.
The investment advisory agreement between the IPO Fund and Renaissance Capital
dated October 10, 1997 provides for an advisory fee at an annual rate of 1.50%
of the IPO Fund's average daily net assets during the year.
The investment advisory agreement provides that Renaissance Capital shall render
investment advisory and other services to the IPO Fund including, at its
expense, all administrative services, office space and the services of all
officers and employees of the IPO Fund. The IPO Fund pays all other expenses not
assumed by Renaissance Capital, including taxes, interest, brokerage
commissions, insurance premiums, fees and expenses of the custodian and
shareholder servicing agent, legal, audit and fund accounting expenses, fees and
expenses in connection with qualification under federal and state securities
laws, and costs of shareholder reports and proxy materials.
It is possible that certain of Renaissance Capital's clients may have investment
objectives similar to the IPO Fund and certain investments may be appropriate
for the IPO Fund and for other clients advised by Renaissance Capital. From time
to time, a particular security may be bought or sold for only one client's
portfolio or in different amounts and at different times for more than one but
less than all such clients. In addition, a particular security may be bought for
one or more clients when one of more clients are selling such security, or
purchases or sales of the same security may be made for two or more clients at
the same time. In such an event, such transactions, to the extent practicable,
will be averaged as to price and allocated as to amount in proportion to the
amount of each order. In some cases, this procedure could have a detrimental
effect on the price or amount of the securities purchased or sold by the IPO
Fund. In other cases, however, it is believed that the ability of the IPO Fund
to participate, to the extent permitted by law, in volume transactions will
produce less expensive brokerage costs.
The officers, directors, employees of Renaissance Capital and its affiliates may
from time to time own securities that are also held in the IPO Fund's portfolio.
Renaissance Capital has adopted a Code of Ethics which requires among other
things, duplicate confirms of security transactions for each account and
restricting trading in various types of securities to avoid possible conflicts
of interest.
Renaissance Capital may from time to time, directly or through affiliates, enter
into agreements to furnish for compensation special research or financial
services to companies, including services in connection with acquisitions,
mergers, or financings. In the event that such agreements are in effect with
respect to issuers of securities held in the portfolio of the IPO Fund, specific
reference to such agreements will be made in the "Schedule of Investments" in
shareholder reports of the IPO Fund. As of the date of this Statement of
Additional information, no such agreements exist.
<PAGE>
BROKERAGE ARRANGEMENTS
Orders for the purchase and sale of portfolio securities are placed with brokers
and dealers who, in the judgment of Renaissance Capital, are able to execute
them as expeditiously as possible and at the best obtainable price. Purchases
and sales of securities which are not listed or traded on a securities exchange
will ordinarily be executed with primary market makers acting as principal,
except when it is determined that better prices and executions may otherwise be
obtained. Renaissance Capital is also authorized to place purchase or sale
orders with brokers or dealers who may charge a commission in excess of that
charged by other brokers or dealers if the amount of the commission is
reasonable in relation to the value of the brokerage and research services
provided. Such services may include but are not limited to information as to the
availability of securities for purchase and sale; statistical or factual
information or opinions pertaining to investments; and appraisals or evaluations
of portfolio securities. Such allocations will be in such amounts and in such
proportions as Renaissance Capital may determine. A portion of the IPO Fund's
brokerage commissions may be paid to Renaissance Capital Investments, Inc. (the
"Broker/Dealer"), an affiliate of Renaissance Capital.
Renaissance Capital undertakes that such higher commissions will not be paid by
the IPO Fund unless (1) Renaissance Capital determines in good faith that the
amount is reasonable in relation to the services in terms of the particular
transaction or in terms of Renaissance Capital's overall responsibilities to the
IPO Fund, (2) such payment is made in compliance with the provisions of Section
28 (e) of the Securities and Exchange Act of 1934 and other applicable state and
federal laws, and (3) in the opinion of Renaissance Capital the total
commissions paid by the IPO Fund are reasonable in relation to the expected
benefits to the IPO Funds over the long term. The investment advisory fees paid
by the IPO Fund under the investment advisory agreement are not reduced as a
result of the IPO Fund's receipt of research services.
Consistent with both the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. and such policies as the Board of Trustees may
determine, and subject to seeking best execution, Renaissance Capital may
consider sales of shares of the IPO Fund as a factor in the selection of dealers
to execute portfolio transactions for IPO Fund.
The Board of Trustees has adopted procedures incorporating the standards of Rule
17e-1 under the 1940 Act which requires that the commissions paid to the
Broker/Dealer or any other "affiliated person" be "reasonable and fair" compared
to the commissions paid to other brokers in connection with comparable
transactions. The procedures require that Renaissance Capital furnish reports to
the Trustees with respect to the payment of commissions to affiliated brokers
and maintain records with respect thereto.
HOW TO BUY SHARES
(See also "Net Asset Value", "Investing in the IPO Fund", and "Shareholder
Services" in the IPO Fund's Prospectus)
Shares of the IPO Fund are purchased at the net asset value next calculated
after receipt of a purchase order. The IPO Fund reserves the right to reduce or
waive the minimum purchase requirements in certain cases such as pursuant to
payroll deduction plans, etc., where subsequent and continuing purchases are
contemplated. Shares of the IPO Fund may be purchased by various tax-sheltered
retirement plans. Upon request, the Broker/Dealer will provide information
regarding eligibility and permissible contributions. Because a retirement plan
is designed to provide benefits in future years, it is important that the
investment objective of the IPO Fund be consistent with the participant's
retirement objectives and time horizon. Premature withdrawals from a retirement
plan may result in adverse tax consequences. For more complete information,
contact the Broker/Dealer at 1-888-IPO-FUND during New York business hours.
HOW TO REDEEM SHARES
(See also "Redeeming IPO Fund Shares" in the IPO Fund's Prospectus)
The right of redemption may be suspended, or the date of payment postponed
beyond the normal two-day period by the IPO Fund under the following conditions
authorized by the 1940 Act: (1) for any period (a) during which the New York
Stock Exchange is closed, other than customary weekend and holiday closures, or
(b) during which trading on the New York Stock Exchange is restricted; (2) for
any period during which an emergency exists as a result of which (a) disposal by
the IPO Fund of securities owned by it is not reasonably practical, or (b) it is
not reasonably practical for the IPO Fund to determine the fair value of its net
assets; (3) for such other periods as the SEC may by order permit for the
protection of the IPO Fund's shareholders.
It is possible that conditions may exist in the future which would, in the
opinion of the Board of Trustees, make it undesirable for the IPO Fund to pay
for redemptions in cash. In such cases the Board may authorize payment to be
made in portfolio securities or other property of the IPO Fund. However, the IPO
Fund has obligated itself under the 1940 Act to redeem for cash all shares
presented for redemption by any one shareholder up to $250,000 (or 1% of the IPO
Fund's net assets if that is less) in any 90-day period. Securities delivered in
payment of redemptions are valued at the same value assigned to them in
computing the net asset value per share.
Shareholders receiving such securities may incur brokerage costs on their sales.
<PAGE>
VALUATION OF SECURITIES
Portfolio securities 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 IPO Fund'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 IPO
Fund's shares.
Restricted securities, as well as securities or other assets for which market
quotations are not readily available, or are not valued by a pricing service
approved by the Board of Trustees, 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 Board of 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.
SHAREHOLDER SERVICES
(See also "Shareholder Services" in the IPO Fund's Prospectus)
In approving the Distribution Plan ("the Plan") in accordance with the
requirements of Rule 12b-1 under the 1940 Act, the Trustees (including the
Independent Trustees, being Trustees who are not "interested persons", as
defined by the 1940 Act, of the Renaissance Capital Funds and have no direct or
indirect financial interest in the operation of the Plan or in any agreements
related to the Plan) considered various factors and determined that there is a
reasonable likelihood that the Plan will benefit the IPO Fund and its
shareholders. The Plan will continue in effect from year to year if specifically
approved annually (a) by the majority of the IPO Fund's outstanding voting
shares or by the Board of Trustees and (b) by the vote of a majority of the
Independent Trustees. While the Plan remains in effect, the Principal Financial
Officer shall prepare and furnish to the Board of Trustees a written report
setting forth the amounts spent by the IPO Fund under the Plan and the purposes
for which such expenditures were made. The Plan may not be amended to increase
materially the amount to be spent for distribution without shareholder approval
and all material amendments to the Plan must be approved by the Board of
Trustees and by the Independent Trustees cast in person at a meeting called
specifically for that purpose. While the Plan is in effect, the selection and
nomination of the Independent Trustees shall be made by those Independent
Trustees then in office.
TAXES
The IPO Fund intends to qualify each year as a "regulated investment company"
under the Internal Revenue Code of 1986, as amended (the "Code"). By so
qualifying, the IPO Fund will not be subject to Federal income taxes to the
extent that it distributes its net investment income and realized net capital
gains.
Distributions of investment income and of the excess of net short-term capital
gain over net long-term capital loss are taxable as ordinary income (whether or
not reinvested in additional IPO Fund shares). Distributions of the excess of
net long-term capital gain over net short-term capital loss (net capital gains)
are taxable to shareholders as long-term capital gain, regardless of the length
of time the shares of the IPO Fund have been held by such shareholders and
regardless of whether the distribution is received in cash or in additional
shares of the IPO Fund. It is expected that dividends will constitute a small
portion of the IPO Fund's gross income.
The Code requires each regulated investment company to pay a nondeductible 4%
excise tax to the extent the company does not distribute, during each calendar
year, an amount equal to 98% of its ordinary income for such calendar year and
98% of its capital gain net income for the one-year period ended on October 31
of such calendar year (or, at the election of a regulated investment company
having a taxable year ending November 30 or December 31, for its taxable year).
The balance of such income must be distributed during the next calendar year.
For the foregoing purposes, a regulated investment company is treated as having
distributed any amount on which it is subject to income tax for any taxable year
ending in such calendar year. The IPO Fund anticipates that it will make
sufficient timely distributions to avoid imposition of the excise tax.
Options and futures contracts entered into by the IPO Fund will be subject to
special tax rules. These rules may accelerate income to the IPO Fund, defer IPO
Fund losses, cause adjustments in the holding periods of IPO Fund securities,
convert capital gains into ordinary income and convert short-term capital losses
into long-term capital losses. As a result, these rules could affect the amount,
timing and character of IPO Fund distributions.
A distribution by the IPO Fund will result in a reduction in the IPO Fund's net
asset value per share. Such a distribution is taxable to the shareholder as
ordinary income or capital gain as described above even though, from an investor
standpoint, it may constitute a return of capital. In particular, investors
should be careful to consider the tax implications of buying shares just prior
to a distribution. The price of shares purchased at that time includes the
amount of the forthcoming distribution. Those purchasing just prior to a
distribution will then receive a return of capital on the distribution that
nevertheless is taxable to them. All distributions, whether received in cash or
reinvested in shares, must be reported by each shareholder on his or her federal
income tax. Under the Code, dividends declared by the IPO Fund in October,
November and December of any calendar year, and payable to shareholders of
record in such a month, shall be deemed to have been received by the shareholder
on December 31 of such calendar year if such dividend is actually paid in
January of the following calendar year. The IPO Fund intends to pay all
dividends during the month of December so that it will not be affected by this
rule.
A shareholder may realize a capital gain or capital loss on the sale or
redemption of shares of the IPO Fund. The tax consequences of a sale or
redemption depend on several factors, including the shareholder's tax basis in
the shares sold or redeemed and the length of time the shares have been held.
Basis in the shares may be the actual cost of those shares (net asset value of
the IPO Fund shares on purchase or reinvestment date). Under certain
circumstances, a loss on the sale or redemption of shares held for six months or
less may be treated as a long-term capital loss to the extent that the IPO Fund
has distributed long-term capital gain dividends on such shares. Moreover, a
loss on a sale or redemption of IPO Fund shares will be disallowed to the extent
the shareholder purchases other shares of the IPO Fund within 30 days before or
after the date the shares are sold or redeemed.
<PAGE>
For Federal income tax purposes, distributions paid from net investment income
and from any realized net short-term capital gains are taxable to shareholders
as ordinary income, whether received in cash or in additional shares. Dividends
are taxable as ordinary income, whereas capital gain distributions are taxable
as long-term capital gains. The 70% dividends-received deduction for
corporations will apply only to the proportionate share of the dividend
attributable to dividends received by the IPO Fund from domestic corporations.
Any dividend or capital gain distribution paid shortly after a purchase of
shares of the IPO Fund will have the effect of reducing the per share net asset
value of such share by the amount of the dividend or distribution. Furthermore,
even if the net asset value of the shares of the IPO Fund immediately after a
dividend or distribution is less than the cost of such shares to the investor,
the dividend or distribution will be taxable to the investor.
The IPO Fund is required to withhold federal income tax at a rate of 31%
("backup withholding") from dividend payments and redemption and exchange
proceeds if an investor fails furnish the IPO Fund with his social security
number or other tax identification number or fails to certify under penalty of
perjury that such number is correct or that he is not subject to backup
withholding due to the underreporting of income. The certification form is
included as part of the share purchase application and should be completed when
the account is opened. Corporations, other exempt individuals or entities, and
foreign individuals who furnish the IPO Fund with proper notification of their
foreign status will not be subject to backup withholding.
This section is not intended to be a full discussion of present or proposed
federal income tax laws and the effect of such laws on an investor. Investors
are urged to consult their respective tax advisers for a complete review of the
tax ramifications of an investment in the IPO Fund.
ADDITIONAL INFORMATION
Description of Shares
Renaissance Capital Funds is a Delaware business trust. The Delaware Trust
Instrument authorizes the Trustees to issue an unlimited number of shares, which
are units of beneficial interest, without par value. The Trust Instrument
authorizes the Trustees to divide or redivide any unissued shares of the
Renaissance Capital Funds into one or more additional series by setting or
changing in any one or more aspects their respective preferences, conversion or
other rights, voting power, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption.
Shares have no subscription or preemptive rights and only such conversion or
exchange rights as the Trustees may grant in their discretion. When issued for
payment, as described in the Prospectus and this Statement of Additional
Information, Renaissance Capital Fund's shares will be fully paid and
non-assessable. In the event of a liquidation or dissolution of Renaissance
Capital Funds, shares of the IPO Fund are entitled to receive the assets
available for distribution belonging to the IPO Fund, and a proportionate
distribution, based upon the relative asset values of the respective funds of
the Renaissance Capital Funds, of any general assets not belonging to any
particular fund that are available for distribution.
Shares of Renaissance Capital Funds are entitled to one vote per share (with
proportional voting for fractional shares) on such matters as shareholders are
entitled to vote. On any matter submitted to a vote of the shareholders, all
shares are voted separately by individual series (funds), and whenever the
Trustees determine that the matter affects only certain series, may be submitted
for a vote by only such series, except (1) when required by the 1940 Act, shares
are voted in the aggregate and not by individual series; and (2) when the
Trustees have determined that the matter affects the interests of more than one
series and that voting by shareholders of all series would be consistent with
the 1940 Act, then the shareholders of all such series shall be entitled to vote
thereon (either by individual series or by shares voted in the aggregate, as the
Trustees in their discretion may determine). The Trustees may also determine
that a matter affects only the interests of one or more classes of a series, in
which case (or if required under the 1940 Act) such matter shall be voted on by
such class or classes. There will normally be no meetings of shareholders for
the purpose of electing Trustees unless and until such time as less than a
majority of the Trustees have been elected by the shareholders, at which time
the Trustees then in office will call a shareholders' meeting for the election
of Trustees. In addition, Trustees may be removed from office by a vote of the
holders of at least two-thirds of the outstanding shares of Renaissance Capital
Funds. A meeting shall be held for such purpose upon the written request of the
holders of not less than 10% of the outstanding shares. Upon written request by
ten or more shareholders meeting the qualifications of Section 16(c) of the 1940
Act, (i.e. persons who have been shareholders for at least six months, and who
hold shares having a net asset value of at least $25,000 or constituting 1% of
the outstanding shares) stating that such shareholders wish to communicate with
the other shareholders for the purpose of obtaining the signatures necessary to
demand a meeting to consider removal of a Trustee, Renaissance Capital Funds
will provide a list of shareholders or disseminate appropriate materials (at the
expense of the requesting shareholders). Except as set forth above, the Trustees
shall continue to hold office and may appoint their successors.
<PAGE>
Shareholder and Trustee Liability
The Delaware Business Trust Act provides that a shareholder of a Delaware
business trust shall be entitled to the same limitation of personal liability
extended to shareholders of Delaware corporations, and the Delaware Trust
Instrument provides that shareholders of Renaissance Capital Funds shall not be
liable for the obligations of Renaissance Capital Funds. The Delaware Trust
Instrument also provides for indemnification out of the trust property of any
shareholder held personally liable solely by reason of his or her being or
having been a shareholder. The Delaware Trust Instrument also provides that
Renaissance Capital Funds shall, upon request, assume the defense of any claim
made against any shareholder for any act or obligation of Renaissance Capital
Funds, and shall satisfy any judgment thereon. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is considered to be
extremely remote.
The Delaware Trust Instrument states further that no Trustee, officer, or agent
of Renaissance Capital Funds shall be personally liable in connection with the
administration or preservation of the assets of the IPO Fund or the conduct of
Renaissance Capital Funds's business; nor shall any Trustee, officer, or agent
be personally liable to any person for any action or failure to act except for
his own bad faith, willful misfeasance, gross negligence, or reckless disregard
of his duties. The Declaration of Trust also provides that all persons having
any claim against the Trustees or Renaissance Capital Funds shall look solely to
the assets of Renaissance Capital Funds for payment.
PERFORMANCE INFORMATION
General
From time to time, quotations of the IPO Fund's performance may be included in
advertisements, sales literature or reports to shareholders or prospective
investors. These performance figures are calculated in the following manner.
Average Annual Total Return
Average annual total return is the average annual compound rate of return for
periods of one year, five years, and ten years, all ended on the last day of a
recent calendar quarter. Average annual total return quotations reflect changes
in the price of the IPO Fund's shares and assume that all dividends and capital
gains distributions during the respective periods were reinvested in IPO Fund
shares. Average annual total return is calculated by computing the average
annual compound rates of return of a hypothetical investment over such periods,
according to the following formula (average annual total return is then
expressed as a percentage):
T = (ERV/P)1/n - 1
Where:
T = Average annual total return
P = A hypothetical initial investment of $1,000
n = Number of years
ERV = Ending redeemable value: ERV is the value, at the end of
the applicable period, of a hypothetical $1,000 investment made at the beginning
of the applicable period.
It should be noted that average annual total return is based on historical
earnings and based on changes in market conditions and the level of the IPO
Fund's expenses.
In connection with communicating its average annual total return to current or
prospective shareholders, the IPO Fund also may compare these figures to the
performance of other mutual funds tracked by the mutual fund rating services or
to unmanaged indices which may assume reinvestment of dividends but generally do
not reflect deductions for administrative and management cost.
Comparison of Portfolio Performance
Comparison of the quoted non-standardized performance of various investments is
valid only if performance is calculated in the same manner. Because there are
different methods of calculating performance, investors should consider the
effect of the methods used to calculate performance when comparing performance
of the IPO Fund with performance equated with respect to other investment
companies or types of investments.
Marketing and other IPO Fund literature may include a description of the
potential risks and rewards associated with an investment in the IPO Fund. The
description may include a "risk/return spectrum" which compares the IPO Fund to
other Funds investing in IPOs or broad categories of funds, such as money
market, bond or equity funds, in terms of potential risk and returns. Money
market funds are designed to maintain a constant $1.00 share price and have a
fluctuating yield. Share price, yield and total return of a bond fund will
fluctuate. The share price and return of an equity fund also will fluctuate.
Risk/return spectrums also may depict funds that invest in both domestic and
foreign securities or a combination of bond and equity securities.
FINANCIAL STATEMENT
THE IPO PLUS AFTERMARKET FUND
Statement of Assets and Liabilities
November 1997
To be filed
<PAGE>
PART C. OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits
(a) Financial statements.
In Part A:
None.
In Part B:
Statement of Assets and Liabilities as of_______, 1997.
In Part C:
None.
(b) Exhibits
EX-99.B1(a) Amended Certificate of Trust dated October 30, 1997 as filed with
the State of Delaware.
EX-99.B1(b) Delaware Trust Instrument dated January 8,1997 is incorporated
herein by reference to Exhibit 99.B1(b) to the Registrant's
Registration Statement on Form N-1A filed electronically on
February 6, 1997, accession number 0001026634-97-000003.
EX-99.B2 Bylaws dated February 3, 1997 is incorporated herein by reference to
Exhibit 99.B2 to the Registrant's Registration Statement on Form N-1A
filed electronically on February 6, 1997, accession number
0001026634-97-000003.
EX-99.B3 None.
EX-99.B4 None.
EX-99.B5 Form of Investment Advisory Agreement between the Registrant and
Renaissance Capital Corporation is filed herewith.
EX-99.B6(a) Form of Distribution Agreement between Registrant and Renaissance
Capital Investments, Inc. is filed herewith.
EX-99.B6(b) Form of Selected Dealer Agreement is filed herewith.
EX-99.B7 None.
EX-99.B8(a) Form of Domestic Custody Agreement between the
Registrant and The Chase Manhattan Bank is filed herewith.
EX-99.B9 Form of Administration, Accounting and Transfer Agency Services
Agreement between the Registrant and Chase Global Fund Services
Company is filed herewith.
EX-99.B10(a) To be filed.
EX-99.B10(b) To be filed.
EX-99.B11(a) Consent of Kramer, Levin, Naftalis & Frankel is filed
herewith.
EX-99.B11(b) Consent of Tait, Weller & Baker is filed herewith.
EX-99.B12 None.
EX-99.B13 Investment Letters are filed herewith.
EX-99.B14 None.
EX-99.B15 Form of Rule 12b-1 Distribution Plan is filed herewith.
EX-99.B16 Forms of performance computation are filed herewith.
EX-99.B17 None.
EX-99.B18 None.
ITEM 25. Persons Controlled By or Under Common Control with Registrant
None.
ITEM 26. Number of Holders of Securities
Title of Class; Shares of Number of Record Holders
beneficial interest as of October , 1997
The IPO Plus Aftermarket Fund 0
ITEM 27. Indemnification
Article X, Section 10.02 of the Registrant's Delaware Trust
Instrument, incorporated herein as Exhibit 2 hereto, provides
for the indemnification of Registrant's Trustees and
officers, as follows:
"Section 10.02 Indemnification"Section 10.02 Indemnification"Section 10.02
.ndemnification
(a) Subject to the exceptions and limitations contained in Subsection
10.02(b):
(i) every person who is, or has been, a Trustee or officer of
the Trust (hereinafter referred to as a "Covered Person") shall be
indemnified by the Trust to the fullest extent permitted by law
against liability and against all expenses reasonably incurred or
paid by him in connection with any claim, action, suit or proceeding
in which he becomes involved as a party or otherwise by virtue of his
being or having been a Trustee or officer and against amounts paid or
incurred by him in the settlement thereof;
(ii) the words "claim," "action," "suit," or "proceeding"
shall apply to all claims, actions, suits or proceedings (civil,
criminal or other, including appeals), actual or threatened while in
office or thereafter, and the words "liability" and "expenses" shall
include, without limitation, attorneys' fees, costs, judgments,
amounts paid in settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered
Person:
(i) who shall have been adjudicated by a court or body before
which the proceeding was brought (A) to be liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of his office or (B) not to have acted in good faith in the
reasonable belief that his action was in the best interest of the
Trust; or
(ii) in the event of a settlement, unless there has been a
determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office, (A) by the court or
other body approving the settlement; (B) by at least a majority of
those Trustees who are neither Interested Persons of the Trust nor
are parties to the matter based upon a review of readily available
facts (as opposed to a full trial-type inquiry); or (C) by written
opinion of independent legal counsel based upon a review of readily
available facts (as opposed to a full trial-type inquiry).
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable,
shall not be exclusive of or affect any other rights to which any
Covered Person may now or hereafter be entitled, shall continue as to
a person who has ceased to be a Covered Person and shall inure to the
benefit of the heirs, executors and administrators of such a person.
Nothing contained herein shall affect any rights to indemnification
to which Trust personnel, other than Covered Persons, and other
persons may be entitled by contract or otherwise under law.
(d) Expenses in connection with the preparation and presentation of a
defense to any claim, action, suit or proceeding of the character
described in Subsection (a) of this Section 10.02 may be paid by the
Trust or Series from time to time prior to final disposition thereof
upon receipt of an undertaking by or on behalf of such Covered Person
that such amount will be paid over by him to the Trust or Series if
it is ultimately determined that he is not entitled to
indemnification under this Section 10.02; provided, however, that
either (i) such Covered Person shall have provided appropriate
security for such undertaking, (ii) the Trust is insured against
losses arising out of any such advance payments or (iii) either a
majority of the Trustees who are neither Interested Persons of the
Trust nor parties to the matter, or independent legal counsel in a
written opinion, shall have determined, based upon a review of
readily available facts (as opposed to a trial-type inquiry or full
investigation), that there is reason to believe that such Covered
Person will be found entitled to indemnification under this Section
10.02."
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to trustees, officers, and controlling
persons or Registrant pursuant to the foregoing provisions, or
otherwise, Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Investment Company Act of 1940, as
amended, and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment
by Registrant of expenses incurred or paid by a trustee, officer, or
controlling person of Registrant in the successful defense of any
action, suit, or proceeding) is asserted by such trustee, officer, or
controlling person in connection with the securities being
registered, Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
<PAGE>
Item 28. Business and Other Connections of Investment Adviser
Renaissance Capital Corporation, Registrant's investment adviser, is
a registered investment adviser providing research on initial public offerings
to institutional and individual investors. The directors and officers of
Renaissance Capital Corporation have held the following positions of a
substantial nature:
Name Position with the Adviser Other Employment
- ----- ------------------------- -----------------
William K. Smith Chairman of the Board, President Chairman of the
and Director Board and President
of Renaissance
Capital Investments,
Inc., the
underwriter
Kathleen Shelton Smith Vice President, Secretary, Secretary, Treasurer
Treasurer and Director and Director of the
underwriter
Linda R. Killian Vice President, Assistant Vice President,
Secretary and Director Assistant Secretary
and Director of the
underwriter
The business address of each of the officers and directors is 325 Greenwich
Avenue, Greenwich, CT 06830.
Item 29. Principal Underwriters
(a) Not applicable.
(b) Renaissance Capital Investments, Inc. serves as underwriter to the
Registrant. The following information is provided with respect to each director,
officer or partner of the underwriter:
==========================================-------------------------------------
Name and principal Positions and offices Positions and offices
business address with Underwriter with Registrant
==========================================-------------------------------------
William K. Smith, Chairman of the Board and President Chairman of Board,
President and Trustee
325 Greenwich Avenue
Greenwich, Connecticut 06830
==========================================-------------------------------------
Kathleen Shelton Smith, Secretary, Treasurer and Director Vice President,
Treasurer, co-Chief Investment Officer and Trustee
325 Greenwich Avenue
Greenwich, Connecticut 06830
==========================================-------------------------------------
Linda R. Killian, Vice President, Assistant Secretary and Vice President,
Secretary, Chief Director Investment Officer and Trustee
325 Greenwich Avenue
Greenwich, Connecticut 06830
===============================================================================
(c)Not applicable.
ITEM 30. Location of Accounts and Records
The majority of the accounts, books and other documents required to
be maintained by Section 31(a) of the Investment Company Act of 1940 (the "1940
Act") and the Rules thereunder are maintained at the offices of Chase Global
Funds Services Company, 73 Tremont Street, Boston, Massachusetts 02108. The
records required to be maintained under Rule 31a-1(b)(1) with respect to
journals of receipts and deliveries of securities and receipts and disbursements
of cash are maintained at the offices of the Registrant's custodian, as listed
under "Investment Advisory and Other Services" in Part B to this Registration
Statement.
ITEM 31. Management Services
Not applicable.
ITEM 32. Undertakings
(1) Registrant undertakes to file a post-effective amendment,
using financial statements which need not be certified, within four to six
months from the effective date of Registrant's 1933 Act Registration Statement.
(2) Registrant undertakes that, if requested to do so by the
holders of at least 10% of the Registrant's outstanding shares, a shareholder
meeting will be called for the purpose of voting upon the removal of a director
or directors and that communications with other shareholders will be assisted as
provided by Section 16(c) of the 1940 Act.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Pre-Effective Amendment to its Registration Statement on Form N-1A to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Greenwich, and the State of Connecticut on this ____ day of ______________,
1997.
RENAISSANCE CAPITAL GREENWICH FUNDS
By:
William K. Smith, President
Pursuant to the requirements of the Securities Act of 1933, this
Pre-Effective Aemendment to its Registration Statement has been signed by the
following persons in the capacities indicated on the ____ day of ______________,
1997.
/s/
- ----------------------- Chairman, President
William K. Smith and Trustee
/s/
- ----------------------- Vice President, Treasurer,
Kathleen Shelton Smith co-Chief Investment Officer and
Trustee
/s/
- ----------------------- Vice President, Secretary,
Linda R. Killian Chief co-Investment Officer and Trustee
/s/
- ----------------------- Trustee
Martin V. Alonzo
/s/
- ----------------------- Trustee
Warren K. Greene
/s/
- ----------------------- Trustee
Philip D. Gunn
/s/
- ----------------------- Trustee
Gerald W. Puschel
<PAGE>
EXHIBIT INDEX
EX-99.B1(a) Amended Certificate of Trust
EX-99.B5 Form of Investment Advisory Agreement.
EX-99.B6(a) Form of Distribution Agreement.
EX-99.B6(b) Form of Selected Dealer Agreement.
EX-99.B8(a) Form of Domestic Custody Agreement.
EX-99.B9 Form of Administration, Accounting and Transfer Agency Services
Agreement.
EX-99.B11(a) Consent of Kramer, Levin, Naftalis & Frankel.
EX-99.B11(b) Consent of Tait, Weller & Baker.
EX-99.B13 Investment Letters.
EX-99.B15(a) Form of Rule 12b-1 Distribution Plan.
EX-99.B15(b) Shareholder Servicing Agreement
EX-99.B16 Forms of performance computation.
Certificate of Amendment
Of
Certificate of Trust
Of
Renaissance Funds
This Certificate of Trust is being executed as of October 30, 1997 for
the purpose of amending the Certificate of Trust filed with the Secretary of
State of the State of Delaware on February 3, 1997 pursuant to the Delaware
Business Trust Act, 12 Del. C. ss.ss. 3801 et seq.
The undersigned hereby certifies as follows:
1. Article 1 of the Certificate of Trust shall
be amended in its entirety to read as follows:
" 1. Name. The name of the business trust is
Renaissance Capital Greenwich Funds("Trust")."
IN WITNESS WHEREOF, the undersigned duly authorized trustee of
the Trust has executed this Certificate of Amendment as of the day and year
first above written.
Trustee
_______/s/_____________
Name: Linda R. Killian
Secretary
INVESTMENT ADVISORY AGREEMENT
between
RENAISSANCE CAPITAL GREENWICH FUNDS
and
RENAISSANCE CAPITAL CORPORATION
AGREEMENT made as of the ___ day of _______, 1997, by and between Renaissance
Capital Greenwich Funds, a Delaware business trust which may issue one or more
series of shares of beneficial interest (the "Trust"), and Renaissance Capital
Corporation, a Delaware corporation (the "Adviser").
WHEREAS, the Trust is registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Trust desires to retain the Adviser to furnish investment
advisory services to the funds listed on Schedule A (each, a "Fund" and
collectively, the "Funds"), and the Adviser represents that it is willing and
possesses legal authority to so furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment.
(a) General. The Trust hereby appoints the Adviser to act as
investment adviser to the Funds for the period and on the
terms set forth in this Agreement. The Adviser accepts such
appointment and agrees to furnish the services herein set
forth for the compensation herein provided.
(b) Employees of Affiliates. The Adviser may, in its discretion,
provide such services through its own employees or the
employees of one or more affiliated companies that are
qualified to act as an investment adviser to the Trust under
applicable laws; provided that (i) all persons, when providing
services hereunder, are functioning as part of an organized
group of persons, and (ii) such organized group of persons is
managed at all times by authorized officers of the Adviser.
(c) Sub-Advisers. It is understood and agreed that the Adviser
may from time to time employ or associate with such other
entities or persons as the Adviser believes appropriate to
assist in the performance of this Agreement with respect to a
particular Fund or Funds (each a "Sub-Adviser"), and that any
such Sub-Adviser shall have all of the rights and powers of
the Adviser set forth in this Agreement; provided that a Fund
shall not pay any additional compensation for any Sub-Adviser
and the Adviser shall be as fully responsible to the Trust for
the acts and omissions of the Sub-Adviser as it is for its own
acts and omissions; and provided further that the retention
of any Sub-Adviser shall be approved in advance by
(i) the Board of Trustees of the Trust and
(ii) the shareholders of the relevant Fund if required under
any applicable provisions of the 1940 Act. The Adviser
wil1 review, monitor and report to the Trust's Board of
Trustees regarding the performance and investment
procedures of any Sub-Adviser. In the event that the
services of any Sub-Adviser are terminated, the Adviser
may provide investment advisory services pursuant to this
Agreement to the Fund without a Sub-Adviser and without
further shareholder approval, to the extent consistent
with the 1940 Act. A Sub-Adviser may be an affiliate of
the Adviser.
2. Delivery of Documents. The Trust has delivered to the Adviser copies
of each of the following documents along with all amendments thereto through the
date hereof, and will promptly deliver to it all future amendments and
supplements thereto, if any:
<PAGE>
(a) the Trust's Trust Instrument;
(b) the Bylaws of the Trust;
(c) resolutions of the Board of Trustees of the Trust authorizing
the execution and delivery of this Agreement;
(d) the Trust's Registration Statement under the Securities Act of
1933, as amended (the "1933 Act"), and the 1940 Act, on Form
N-1A as filed with the Securities and Exchange Commission (the
"Commission");
(e) Notification of Registration of the Trust under the 1940
Act on Form N-8A as filed with the Commission; and
(f) the currently effective Prospectus and Statement of
Additional Information of the Funds.
3. Investment Advisory Services.
(a) Management of the Funds. The Adviser hereby undertakes to act
as investment adviser to the Funds. The Adviser shall
regularly provide investment advice to the Funds and
continuously supervise the investment and reinvestment of
cash, securities and other property composing the assets of
the Funds and, in furtherance thereof, shall:
(i) supervise all aspects of the operations of the Trust
and each Fund;
(ii) obtain and evaluate pertinent economic, statistical
and financial data, as well as other significant
events and developments, which affect the economy
generally, the Funds' investment programs, and the
issuers of securities included in the Funds'
portfolios and the industries in which they engage,
or which may relate to securities or other
investments which the Adviser may deem desirable for
inclusion in a Fund's portfolio;
(iii) determine which issuers and securities shall be
included in the portfolio of each Fund;
(iv) furnish a continuous investment program for each
Fund;
(v) in its discretion and without prior consultation with
the Trust, buy, sell, lend and otherwise trade any
stocks, bonds and other securities and investment
instruments on behalf of each Fund; and
(vi) take, on behalf of each Fund, all actions the Adviser
may deem necessary in order to carry into effect such
investment program and the Adviser's functions as
provided above, including the making of appropriate
periodic reports to the Trust's Board of Trustees.
(b) Covenants. The Adviser shall carry out its investment
advisory and supervisory responsibilities in a manner
consistent with the investment objectives, policies, and
restrictions provided in:
(i) each Fund's Prospectus and Statement of Additional
Information as revised and in effect from time to time;
(ii) the Trust's Trust Instrument, Bylaws or other governing
instruments, as amended from time to time;
(iii) the 1940 Act;
(iv) other applicable laws; and
(v) such other investment policies, procedures and/or
limitations as may be adopted by the Trust with respect to
a Fund and provided to the Adviser in writing. The Adviser
agrees to use reasonable efforts to manage each Fund so
that it will qualify, and continue to qualify, as a
regulated investment company under Subchapter M of the
Internal Revenue Code of 1986, as amended, and regulations
issued thereunder (the "Code"), except as may be authorized
to the contrary by the Trust's Board of Trustees. The
management of the Funds by the Adviser shall at all times
be subject to the review of the Trust's Board of Trustees.
(c) Books and Records. Pursuant to applicable law, the Adviser
shall keep each Fund's books and records required to be
maintained by, or on behalf of, the Funds with respect to
advisory services rendered hereunder. The Adviser agrees that
all records which it maintains for a Fund are the property of
the Fund and it will promptly surrender any of such records to
the Fund upon the Fund's request. The Adviser further agrees
to preserve for the periods prescribed by Rule 31a-2 under the
1940 Act any such records of the Fund required to be preserved
by such Rule.
(d) Reports, Evaluations and other Services. The Adviser shall
furnish reports, evaluations, information or analyses to the
Trust with respect to the Funds and in connection with the
Adviser's services hereunder as the Trust's Board of Trustees
may request from time to time or as the Adviser may otherwise
deem to be desirable. The Adviser shall make recommendations
to the Trust's Board of Trustees with respect to Trust
policies, and shall carry out such policies as are adopted by
the Board of Trustees. The Adviser shall, subject to review
by the Board of Trustees, furnish such other services as the
Adviser shall from time to time determine to be necessary or
useful to perform its obligations under this Agreement.
(e) Purchase and Sale of Securities. The Adviser shall place all
orders for the purchase and sale of portfolio securities for
each Fund with brokers or dealers selected by the Adviser,
which may include brokers or dealers affiliated with the
Adviser to the extent permitted by the 1940 Act and the
Trust's policies and procedures applicable to the Funds. The
Adviser shall use its best efforts to seek to execute
portfolio transactions at prices which, under the
circumstances, result in total costs or proceeds being the
most favorable to the Funds. In assessing the best overall
terms available for any transaction, the Adviser shall
consider all factors it deems relevant, including the breadth
of the market in the security, the price of the security, the
financial condition and execution capability of the broker or
dealer, research services provided to the Adviser, and the
reasonableness of the commission, if any, both for the
specific transaction and on a continuing basis. In no event
shall the Adviser be under any duty to obtain the lowest
commission or the best net price for any Fund on any
particular transaction, nor shall the Adviser be under any
duty to execute any order in a fashion either preferential to
any Fund relative to other accounts managed by the Adviser or
otherwise materially adverse to such other accounts.
(f) Selection of Brokers or Dealers. In selecting brokers
or dealers qualified to execute a particular transaction,
brokers or dealers may be selected who also provide
brokerage and research services (as those terms are defined
in Section 28(e) of the Securities Exchange Act of 1934) to
the Adviser, the Funds and/or the other accounts over which
the Adviser exercises investment discretion. The Adviser is
authorized to pay a broker or dealer who provides such
brokerage and research services a commission for executing a
portfolio transaction for a Fund which is in excess of the
amount of commission another broker or dealer would have
charged for effecting that transaction if the Adviser
determines in good faith that the total commission is
reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed
in terms of either that particular transaction or the overall
responsibilities of the Adviser with respect to accounts over
which it exercises investment discretion. The Adviser shall
report to the Board of Trustees of the Trust regarding overall
commissions paid by the Funds and their reasonableness in
relation to the benefits to the Funds. Any transactions for
the Funds that are effected through an affiliated
broker-dealer on a national securities exchange of which such
broker-dealer is a member will be effected in accordance with
Section 11(a) of the Securities Exchange Act of 1934, as
amended, and the regulations promulgated thereunder. The
Funds hereby authorize any such broker or dealer to retain
commissions for effecting such transactions and to pay out of
such retained commissions any compensation due to others in
connection with effectuating those transactions.
<PAGE>
(g) Aggregation of Securities Transactions. In executing
portfolio transactions for a Fund, the Adviser may, to the
extent permitted by applicable laws and regulations, but shall
not be obligated to, aggregate the securities to be sold or
purchased with those of other Funds or its other clients if,
in the Adviser's reasonable judgment, such aggregation
(i) will result in an overall economic benefit to the Fund,
taking into consideration the advantageous selling or
purchase price, brokerage commission and other expenses,
and trading requirements, and
(ii) is not inconsistent with the policies set forth in
the Trust's registration statement and the Fund's
Prospectus and Statement of Additional Information.
In such event, the Adviser will allocate the securities
so purchased or sold, and the expenses incurred in the
transaction, in an equitable manner, consistent with
its fiduciary obligations to the Fund and such other
clients.
4. Representations and Warranties.
(a) The Adviser hereby represents and warrants to the Trust as
follows:
(i) The Adviser is a corporation duly organized and in
good standing under the laws of the State of Delaware
and is fully authorized to enter into this Agreement
and carry out its duties and obligations hereunder.
(ii) The Adviser is registered as an investment adviser
with the Commission under the Investment Advisers Act
of 1940, as amended (the "Advisers Act"), and is
registered or licensed as an investment adviser under
the laws of all applicable jurisdictions. The Adviser
shall maintain such registrations or licenses in
effect at all times during the term of this
Agreement.
(iii) The Adviser at all times shall provide its best
judgment and effort to the Trust in carrying out the
Adviser's obligations hereunder.
(b) The Trust hereby represents and warrants to the Adviser as follows:
(i) The Trust has been duly organized as a business trust
under the laws of the State of Delaware and is
authorized to enter into this Agreement and carry out
its terms.
(ii) The Trust is registered as an investment company with
the Commission under the 1940 Act and shares of each
Fund are registered for offer and sale to the public
under the 1933 Act and all applicable state
securities laws where currently sold. Such
registrations will be kept in effect during the term
of this Agreement.
5. Compensation. As compensation for the services which the Adviser is
to provide or cause to be provided pursuant to Paragraph 3, each Fund shall pay
to the Adviser out of Fund assets an annual fee, computed and accrued daily and
paid in arrears on the first business day of every month, at the rate set forth
opposite each Fund's name on Schedule A, which shall be a percentage of the
average daily net assets of the Fund (computed in the manner set forth in the
Fund's most recent Prospectus and Statement of Additional Information)
determined as of the close of business on each business day throughout the
month. At the request of the Adviser, some or all of such fee shall be paid
directly to a Sub-Adviser. The fee for any partial month under this Agreement
shall be calculated on a proportionate basis.
6. Interested Persons. It is understood that, to the extent consistent
with applicable laws, the Trustees, officers and shareholders of the Trust are
or may be or become interested in the Adviser as directors, officers or
otherwise and that directors, officers and shareholders of the Adviser are or
may be or become similarly interested in the Trust.
7. Expenses. As between the Adviser and the Funds, the Funds will pay
for all their expenses other than those expressly stated to be payable by the
Adviser hereunder, which expenses payable by the Funds shall include, without
limitation, (i) interest and taxes; (ii) brokerage commissions and other costs
in connection with the purchase or sale of securities and other investment
instruments, which the parties acknowledge might be higher than other brokers
would charge when a Fund utilizes a broker which provides brokerage and research
services to the Adviser as contemplated under Paragraph 3 above; (iii) fees and
expenses of the Trust's Trustees that are not employees of the Adviser; (iv)
legal and audit expenses; (v) administrator, custodian, pricing and bookkeeping,
registrar and transfer agent fees and expenses; (vi) fees and expenses related
to the registration and qualification of the Funds' shares for distribution
under state and federal securities laws; (vii) expenses of printing and mailing
reports and notices and proxy material to shareholders, unless otherwise
required; (viii) all other expenses incidental to holding meetings of
shareholders, including proxy solicitations therefor, unless otherwise required;
(ix) expenses of typesetting for printing Prospectuses and Statements of
Additional Information and supplements thereto; (x) expenses of printing and
mailing Prospectuses and Statements of Additional Information and supplements
thereto sent to existing shareholders; (xi) insurance premiums for fidelity
bonds and other coverage to the extent approved by the Trust's Board of
Trustees; (xii) association membership dues authorized by the Trust's Board of
Trustees; and (xiii) such non-recurring or extraordinary expenses as may arise,
including those relating to actions, suits or proceedings to which the Trust is
a party (or to which the Funds' assets are subject) and any legal obligation for
which the Trust may have to provide indemnification to the Trust's Trustees and
officers.
8. Non-Exclusive Services; Limitation of Adviser's Liability. The
services of the Adviser to the Funds are not to be deemed exclusive and the
Adviser may render similar services to others and engage in other activities.
The Adviser and its affiliates may enter into other agreements with the Funds
and the Trust for providing additional services to the Funds and the Trust which
are not covered by this Agreement, and to receive additional compensation for
such services. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the part
of the Adviser, or a breach of fiduciary duty with respect to receipt of
compensation, neither the Adviser nor any of its directors, officers,
shareholders, agents, or employees shall be liable or responsible to the Trust,
the Funds or to any shareholder of the Funds for any error of judgment or
mistake of law or for any act or omission in the course of, or connected with,
rendering services hereunder or for any loss suffered by the Trust, a Fund or
any shareholder of a Fund in connection with the performance of this Agreement.
9. Effective Date; Modifications; Termination. This Agreement shall
become effective on _______, 1997, provided that it shall have been approved by
a majority of the outstanding voting securities of each Fund, in accordance with
the requirements of the 1940 Act, or such later date as may be agreed by the
parties following such shareholder approval.
(a) This Agreement shall continue in force until _____, 1999.
Thereafter, this Agreement shall continue in effect as to each
Fund for successive annual periods, provided such continuance
is specifically approved at least annually (i) by a vote of
the majority of the Trustees of the Trust who are not parties
to this Agreement or interested persons of any such party,
cast in person at a meeting called for the purpose of voting
on such approval and (ii) by a vote of the Board of Trustees
of the Trust or a majority of the outstanding voting shares of
the Fund.
(b) The modification of any of the non-material terms of this
Agreement may be approved by a vote of a majority of those
Trustees of the Trust who are not interested persons of any
party to this Agreement, cast in person at a meeting called
for the purpose of voting on such approval.
(c) Notwithstanding the foregoing provisions of this Paragraph 9,
either party hereto may terminate this Agreement with respect
to any particular Fund at any time on sixty (60) days' prior
written notice to the other, without payment of any penalty.
Such a termination by the Trust shall be effected as to any
Fund by vote of the Trust's Board of Trustees or by vote of a
majority of the outstanding voting securities of the Fund.
This Agreement shall terminate automatically in the event of
its assignment.
10. Limitation of Liability of Trustees and Shareholders. The Adviser
acknowledges the following limitation of liability:
The terms "Renaissance Capital Greenwich Funds" and "Trustees" refer,
respectively, to the trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under the Trust Instrument,
to which reference is hereby made, such reference being inclusive of any and all
amendments thereto so filed or hereafter filed. The obligations of "Renaissance
Capital Greenwich Funds" entered into in the name or on behalf thereof by any of
the Trustees, representatives or agents are made not individually, but in such
capacities and are not binding upon any of the Trustees, shareholders or
representatives of the Trust personally, but bind only the assets of the Trust,
and all persons dealing with the Trust or a Fund must look solely to the assets
of the Trust or Fund for the enforcement of any claims against the Trust or
Fund.
11. Non-Exclusive Use of the Name "Renaissance". The Trust acknowledges
that it adopted its name through the permission of the Adviser. The Adviser
hereby consents to the non-exclusive use by the Trust of the name "Renaissance"
only so long as the Adviser serves as the Funds' adviser.
If the Adviser or any successor to its business shall cease to furnish
services to the Funds under this Agreement or similar contractual arrangement,
the Trust:
(a) as promptly as practicable, will take all necessary action
to cause its Certificate of Trust to be amended to accomplish a change
of name; and
(b) within 90 days after the termination of this Agreement or
such similar contractual arrangement, shall cease to use in any other
manner, including but not limited to use in any prospectus, sales
literature or promotional material, the name "Renaissance" or any name,
mark or logotype derived from it or similar to it or indicating that
the Funds are managed by or otherwise associated with the Adviser.
12. Certain Definitions. The terms "vote of a majority of the
outstanding voting securities," "assignment," "control," and "interested
persons," when used herein, shall have the respective meanings specified in the
1940 Act. References in this Agreement to the 1940 Act and the Advisers Act
shall be construed as references to such laws as now in effect or as hereafter
amended, and shall be understood as inclusive of any applicable rules,
interpretations and/or orders adopted or issued thereunder by the Commission.
13. Independent Contractor. The Adviser shall for all purposes herein
be deemed to be an independent contractor and shall, unless otherwise expressly
provided herein or authorized by the Board of Trustees of the Trust from time to
time, have no authority to act for or represent a Fund in any way or otherwise
be deemed an agent of a Fund.
14. Structure of Agreement. The Trust is entering into this Agreement
on behalf of the respective Funds severally and not jointly. The
responsibilities and benefits set forth in this Agreement shall refer to each
Fund severally and not jointly. No Fund shall have any responsibility for any
obligation of any other Fund arising out of this Agreement. Without otherwise
limiting the generality of the foregoing:
(a) any breach of any term of this Agreement regarding the Trust
with respect to any one Fund shall not create a right or
obligation with respect to any other Fund;
(b) under no circumstances shall the Adviser have the right to set
off claims relating to a Fund by applying property of any
other Fund; and
(c) the business and contractual relationships created by this
Agreement, consideration for entering into this Agreement, and
the consequences of such relationship and consideration relate
solely to the Trust and the particular Fund to which such
relationship and consideration applies.
This Agreement is intended to govern only the relationships between the
Adviser, on the one hand, and the Trust and the Funds, on the other hand, and
(except as specifically provided above in this Paragraph 14) is not intended to
and shall not govern (i) the relationship between the Trust and any Fund or (ii)
the relationships among the respective Funds.
15. Governing Law. This Agreement shall be governed by the laws of the
State of Delaware, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act or the Advisers Act.
16. Severability. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby and, to this extent, the provisions
of this Agreement shall be deemed to be severable.
17. Notices. Notices of any kind to be given to the Trust hereunder by
the Adviser shall be in writing and shall be duly given if mailed or delivered
to 325 Greenwich Avenue, Greenwich, Connecticut 06830, Attention: Linda R.
Killian; with a copy to Kramer, Levin, Naftalis & Frankel, 919 Third Avenue, New
York, New York 10022, Attention: Susan Penry-Williams, Esq., or at such other
address or to such individual as shall be so specified by the Trust to the
Adviser. Notices of any kind to be given to the Adviser hereunder by the Trust
shall be in writing and shall be duly given if mailed or delivered to the
Adviser at 325 Greenwich Avenue, Greenwich, Connecticut 06830, Attention:
William K. Smith or at such other address or to such individual as shall be so
specified by the Adviser to the Trust. Notices shall be effective upon delivery.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
written above.
RENAISSANCE CAPITAL RENAISSANCE CAPITAL CORPORATION
GREENWICH FUNDS
By: By:
Name: Name:
Title: Title:
<PAGE>
KL2:175834.1
Schedule A
Name of Fund Fee*
1. The IPO Plus Aftermarket Fund 1.50%
- --------------------
* As a percentage of average daily net assets. Note, however, that the
Adviser shall have the right, but not the obligation, to voluntarily
waive any portion of the advisory fee from time to time.
(..continued)
KL2:175836.1
KL2:175836.1
-6-
KL2:175836.1
FORM OF
DISTRIBUTION AGREEMENT
THIS AGREEMENT made as of the ____ day of ________, 1997 by and between
RENAISSANCE CAPITAL GREENWICH FUNDS (the "Trust"), a Delaware business trust,
and __________________ (the "Distributor").
W I T N E S S E T H:
In consideration of the mutual covenants herein contained and other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto agree as follows:
FIRST: The Trust on behalf of each of its series and any new
series to be created hereby appoints the Distributor as its exclusive
underwriter to promote and arrange for the sale of shares of beneficial
interest of each series of the Trust in jurisdictions wherein shares
may legally be offered for sale. The Trust shall notify the Distributor
in writing of all states in which its shares are qualified for offer
and sale, including any limitations with respect to offers or sales in
such states. In addition, the Distributor shall receive payment for
certain distribution expenses pursuant to a Rule 12b-1 distribution
plan ("12b-1 Plan") adopted by the Trust.
The Trust agrees to sell and deliver its unissued shares of
each series, as from time to time shall be effectively registered under
the Securities Act of 1933 (the "1933 Act"), upon the terms hereinafter
set forth.
SECOND: The Trust hereby authorizes the Distributor, subject
to law and the Trust Instrument of the Trust (the "Trust Instrument"),
to accept, for the account of each series of the Trust, orders for the
purchase of shares, satisfactory to the Distributor, as of the time of
receipt of such orders or as otherwise described in the then current
Prospectuses and Statements of Additional Information of the Trust.
THIRD: The price at which the shares may be sold (the
"offering price") shall be the net asset value per share plus any sales
charge that may be imposed on any class of shares. For the purpose of
computing the offering price, the net asset value per share and the
sales charge, if any, shall be determined in the manner provided in the
Registration Statement of the Trust, as amended from time to time.
FOURTH: The Distributor shall use its best efforts with
reasonable promptness to promote and sell shares of each of the series
of the Trust. The Distributor, with the consent of the Trust, may enter
into agreements with selected broker-dealers ("Selected Dealers") for
the purpose of sale and redemption of shares of each of the series of
the Trust upon terms consistent with those found in this Agreement. The
Distributor shall not be obligated to sell any certain number of shares
of beneficial interest. Each series of the Trust reserves the right to
issue shares in connection with any merger or consolidation
of the Trust or any series with any other investment company or any
personal holding company or in connection with offers of exchange
exempted from Section 11(a) of the Investment Company Act of 1940 (the
"Act").
FIFTH: All sales literature and advertisements used by the
Distributor in connection with sales of shares of any series of the
Trust shall be subject to the approval of the Trust. The Trust
authorizes the Distributor in connection with the sale or arranging for
the sale of the shares to give only such information and to make only
such statements or representations as are contained in the then current
Prospectuses and Statements of Additional Information of the Trust or
in sales literature or advertisements approved for any series by the
Trust or in such financial statements and reports as are furnished to
the Distributor pursuant to this Agreement. The Trust shall not be
responsible in any way for any information, statements or
representations given or made by the Distributor or its representative
or agents other than such information, statements or representations
contained in the then current Prospectuses and Statements of Additional
Information or other financial statements of the Trust or any sales
literature or advertisements approved by the Trust.
SIXTH: The Distributor as agent of the Trust, and any Selected
Dealer entering into a Selected Dealer Agreement with the Distributor
are authorized, subject to the direction of the Trust, to accept shares
of the series of the Trust for redemption at their net asset value less
any applicable deferred sales charge, determined as prescribed in the
then current Prospectuses and Statements of Additional Information of
the Trust.
SEVENTH: The Trust shall cause to be delivered to the
Distributor all books, records, and other documents and papers relating
to the federal and state registration of Trust shares, as well as all
books, records and other documents and papers relating in any way to
the distribution of Trust shares.
EIGHTH: The Trust shall bear:
(A) The costs and expenses incurred in connection
with the registration of the shares of each series of the
Trust under the 1933 Act (including any amendment to any
Registration Statement or Prospectus or Statement of
Additional Information), and all expenses in connection with
preparing, printing and distributing the Prospectuses or
Statements of Additional Information except as set forth in
Paragraph NINTH hereof;
(B) the expenses of qualification of the shares of
each series of the Trust for sale in connection with such
public offerings in such states as shall be selected by the
Distributor and of continuing the qualification therein until
the Distributor notifies the Trust that it does not wish such
qualification continued; and
(C) all legal expenses in connection with the
foregoing.
NINTH: The Distributor shall provide certain distribution
services including:
(A) providing officers, clerical staff and office
space to use as the headquarters of the Trust;
(B) arranging for the printing, distribution and
filing of prospectuses and statements of additional
information;
(C) preparing, filing and maintaining all Trust
registrations with the securities regulatory agencies of all
states and other jurisdictions in which the Trust shares are
sold;
(D) making all required filings of advertising and
promotional materials with the National Association of
Securities Dealers, Inc.; and
(E) bearing the expenses of:
(i) the printing, distribution and filing of
prospectuses and statements of additional information
after such have been typeset (other than those
prospectuses and statements of additional information
required by applicable laws and regulations to be
distributed to the existing shareholders of the Trust
and pursuant to any 12b-1 Plan adopted by the Trust);
(ii) any promotional or sales literature
which are used by the Distributor or furnished by the
Distributor to purchasers or dealers in connection
with the Distributor's activities pursuant to this
Agreement (unless paid for by any 12b-1 Plan adopted
by the Trust);
(iii) any advertising used by the
Distributor in connection with such public offering
(unless paid for by any 12b-1 Plan adopted by the
Trust); and
(iv) all legal expenses in connection with
the foregoing.
TENTH: The Distributor will accept orders for shares of a
series of the Trust only to the extent of purchase orders actually
received and not in excess of such orders, and it will not avail itself
of any opportunity of making a profit by expediting or withholding
orders.
ELEVENTH: The Trust shall keep the Distributor fully informed
with regard to its affairs and shall furnish the Distributor with a
certified copy of all financial statements and any amendments to its
Registration Statement under the 1933 Act.
TWELFTH: The Trust shall register, from time to time as
necessary, additional shares with the Securities and Exchange
Commission, state and other regulatory bodies and pay the related
filing fees therefor and file such amendments, reports and other
documents as may be necessary in order that there may be no untrue
statement of a material fact in the Registration Statement,
Prospectuses or Statements of Additional Information necessary in order
that there may be no omission to state a material fact therein, in
light of the circumstances under which they were made, not misleading.
As used in this Agreement, the term "Registration Statement" shall mean
the Registration Statement most recently filed by the Trust with the
Securities and Exchange Commission and effective under the 1933 Act, as
such Registration Statement is amended at such time, and the term
"Prospectuses" and "Statements of Additional Information" shall mean
for the purposes of this Agreement the form of the then current
prospectuses and statements of additional information for each series
authorized by the Trust for use by the Distributor and by dealers.
THIRTEENTH:
(A) The Trust and the Distributor shall each comply
with all applicable provisions of the Act, the 1933 Act and
the rules and regulations of the National Association of
Securities Dealers, Inc. and of all other Federal and state
laws, rules and regulations governing the issuance and sale of
shares of the series of Trust.
(B) The Distributor shall not be liable for any error
of judgment or mistake of law or for any loss suffered by the
Trust in connection with the matters to which this Agreement
relates, except a loss resulting from willful misfeasance, bad
faith or gross negligence on the Distributor's part in the
performance of its duties or from reckless disregard by it of
its obligations and duties under this Agreement.
(C) In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or
duties hereunder on the part of the Distributor or any of its
officers, directors or employees, the Trust agrees to
indemnify the Distributor and any controlling person of the
Distributor against any and all claims, demands, liabilities
and expenses (including reasonable attorney's fees) which the
Distributor may incur (i) based on any act or omission in the
course of, or connected with, rendering services hereunder,
(ii) based on any representations made herein by the Trust;
(iii) based on any act or omission of any prior Distributor
(in its capacity as Distributor), Administrator or Adviser to
the Trust, including the registration or failure to register
any shares of the Trust in accordance with state or federal
laws or resulting from or relating to any books or records
delivered to the Distributor in connection with its
responsibilities under this Agreement and occurring prior to
the date of this Agreement; and (iv) under the 1933 Act, or
common law or otherwise, arising out of or based upon any
alleged untrue statement of a material fact contained in any
Registration Statement, Statements of Additional Information
or Prospectuses of the Trust, or any omission to state a
material fact therein, the omission of which makes any
statement contained therein misleading, unless such statement
or omission was made in reliance upon, and in conformity with
written information furnished to the Trust in connection
therewith by or on behalf of the Distributor.
(D) The Distributor shall indemnify the Trust against
any and all claims, demands, liabilities and expenses which
the Trust may incur under the 1933 Act, or common law or
otherwise, arising out of or based upon any alleged untrue
statement of material fact contained in any Registration
Statement, Statements of Additional Information or
Prospectuses of the Trust, or any omission to state a material
fact therein if such statement or omission was made in
reliance upon, and in conformity with, written information
furnished to the Trust in connection therewith by the
Distributor.
FOURTEENTH: Nothing herein contained shall require the Trust
to take any action contrary to any provision of its Declaration of
Trust or to any applicable statute or regulation.
FIFTEENTH:
(A) This Agreement shall go into effect at the close
of business on the date hereof, and, unless terminated as
hereinafter provided, shall continue in effect for one year
thereafter and from year to year thereafter, but only so long
as such continuance is specifically approved at least annually
by the Trust's Board of Trustees, including the vote of a
majority of the Trustees who are not parties to this Agreement
or "interested persons" (as defined in the Act) of any such
party cast in person at a meeting called for the purpose of
voting on such approval, or by the vote of the holders of a
"majority" (as so defined) of the outstanding voting
securities of the applicable series and by such vote of the
Trustees.
(B) This Agreement may be terminated by the
Distributor at any time without penalty upon giving the Board
of Trustees of the Trust sixty (60) days' written notice
(which notice may be waived by the Trust) and may be
terminated by the Board of Trustees of the Trust at any time
without penalty upon giving the Distributor sixty (60) days'
written notice (which may be waived by the Distributor),
provided that such termination by the Board of Trustees of the
Trust shall be directed or approved by the vote of a majority
of all of its Trustees in office at the time, including a
majority of the Trustees who are not interested persons (as
defined in the Act) of the Trust, or by the vote of the
holders of a majority (as defined in the Act) of the voting
securities of each series of the Trust at the time outstanding
and entitled to vote. This Agreement shall automatically
terminate in the event of its assignment, the term
"Assignment" for this purpose having the meaning defined in
Section 2(a)(4) of the Act.
SIXTEENTH: The Distributor may at any time or times in its
discretion and at its own expense appoint (and may at any time remove)
an agent or agents to carry out such of the provisions of Article NINTH
herein as the Distributor may from time to time direct; provided,
however, that the appointment of any agent shall not relieve the
Distributor of its responsibilities or liabilities hereunder.
SEVENTEENTH: The services of the Distributor to the Funds are
not to be deemed exclusive and the Distributor may render similar
services to others and engage in other activities. The Distributor and
its affiliates may enter into other agreements with the Funds and the
Trust for providing additional services to the Funds and the Trust
which are not covered by this Agreement, and to receive additional
compensation for such services.
EIGHTEENTH: A copy of the Certificate of Trust is on file with
the State of Delaware, and notice is hereby given that this instrument
is executed on behalf of the Trustees of the Trust as Trustees and not
individually, and that the obligations of this instrument are not
binding upon any of the Trustees or shareholders individually but are
binding only upon the assets and property of the Trust, and all persons
dealing with any class of shares of the Trust must look solely to the
Trust property belonging to such class for the enforcement of any
claims against the Trust.
NINETEENTH: Any notice under this Agreement shall be in
writing, addressed and delivered, or mailed, postage paid, to the other
party at such address as such other party may designate for the receipt
of such notices. Until further notice to the other party, it is agreed
that the address of the Trust shall be 325 Greenwich Avenue, Greenwich,
Connecticut 06830 and the address of the Distributor shall be
--------------------.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
ATTEST: RENAISSANCE CAPITAL GREENWICH FUNDS
_________________________________ By:_________________________________
ATTEST: __________________________
_________________________________ By:_________________________________
<PAGE>
-8-
(..continued)
7
KL2:175839.1
KL2:175839.1
RENAISSANCE CAPITAL GREENWICH FUNDS
SELECTED DEALER AGREEMENT
AGREEMENT made this ____________ day of ________, 19____, between
_________________, a corporation organized under the laws of the State of
_________ with its principal place of business at ____________________ and
__________________________________, a member of the National Association of
Securities Dealers, Inc.
("Dealer").
WHEREAS, ____________________ serves as the principal underwriter (the
"Distributor") for current and future series (each a "Fund" and collectively the
"Funds") of Renaissance Capital Greenwich Funds (the "Trust") pursuant to a
distribution agreement (the "Distribution Agreement") and, as described in the
Funds' Prospectus, may subcontract any or all of its functions to one or more
qualified sub-transfer agents or processing agents; and
WHEREAS, the Distributor and Dealer, acting as a Selected Dealer as
described in the Funds' Prospectuses, desire to document their procedures
regarding the purchase, redemption and transfer of Fund shares;
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants herein contained and other valuable consideration, the Distributor and
Dealer agree as follows:
SECTION 1. SERVICES; COMPENSATION
Dealer shall perform some or all of the services described in Exhibit A
hereto (the "Services") in connection with its purchase and redemption of shares
of the Funds at the direction of, and as agent for, its customers. Dealer will
bear all expenses incurred by it or its agents in performing the Services.
Dealer shall receive no consideration under this agreement in consideration of
these Services. Dealer shall act only as agent for its customers in all purchase
and redemption transactions and in furnishing information regarding the Trust,
the Funds or the Trust shares and shall not act as agent for the Trust.
SECTION 2. RECORDKEEPING
Dealer represents to the Distributor and to the Trust that it will
comply with all recordkeeping, reporting, account maintenance and other
requirements imposed upon Dealer or the Trust by applicable state and Federal
laws. Dealer also represents that to the extent required by the Internal Revenue
Code of 1986 and applicable Internal Revenue Service regulation it will (i)
obtain and maintain for each customer for which Dealer maintains an account and,
unless otherwise agreed to, for each customer to whom Dealer otherwise provides
service, a certified taxpayer identification number and (ii) prepare and
distribute all Form 1099s and Individual Retirement Account reporting forms to
each of Dealer's or its affiliates' customers who hold Fund shares in "street
name" or through an omnibus account with the Trust's transfer agent.
SECTION 3. PURCHASE AND REDEMPTION ORDERS
Dealer shall purchase (with funds to be subsequently delivered as
provided in Section 4) and redeem (which for purposes hereof includes exchange)
shares of a Fund by written, including facsimile, or oral order ("Orders") for
the account of Dealer or Dealer's various customers, whether the records of the
customers' holdings of Fund shares are maintained by the Trust's transfer agent
or by Dealer on behalf of the customers. Dealer represents that it will have
appropriate power to transmit Orders on behalf of its customers. Upon the
Trust's request, to the extent necessary for the parties to comply with
applicable securities laws and not inconsistent with Dealer's agreement with its
customers, Dealer shall provide a list of all Trust shareholder accounts
maintained by Dealer, showing each account name, address and share holding.
Dealer shall provide the Trust with such other information as the Trust may
reasonably request concerning the location (by state) of accounts to which
shares are sold and the amounts thereof.
SECTION 4. ORDER PRICING; DELIVERY OF FUNDS; DIVIDENDS
(a) All Orders will be priced at and effected immediately after the
next determined net asset value of the applicable Fund after receipt of the
Order by the Trust's transfer agent in proper form and, if necessary,
confirmation of the Order. Orders may be confirmed by telephone call or
otherwise as the Trust's transfer agent deems appropriate.
(b) With respect to each purchase Order, Dealer shall deliver funds on
deposit at a Federal Reserve Bank ("Fed Funds") by wire or otherwise to the
applicable Fund's account as designated in the Fund's Prospectus or, as may be
agreed to by the Trust's transfer agent, Dealer and the Trust. Proceeds of any
redemption Order will be delivered by the Trust's transfer agent (i) to Dealer
to the account listed on Exhibit B or such other account as Dealer may designate
in writing (the "Account") on the day a redemption Order is effected or (ii) to
a shareholder of a Fund in accordance with the procedures contained in the
Fund's Prospectus.
(c) Shares of a Fund purchased by Order will become eligible to receive
dividends on the day that the Order is priced (in accordance with Section 4(a)
or, if applicable, Section 5(c)) so long as the Trust's transfer agent, on
behalf of the Trust, has received Fed Funds form Dealer by 4:00 p.m., Eastern
Time, on that day.
SECTION 5. DELAYED PAYMENTS
(a) If the Trust's transfer agent, on behalf of the Trust, does not
receive a wire by the times indicated in Section 4 due to errors made by Dealer
or any of its affiliates or agents, Dealer will pay the Trust's transfer agent a
fee based on and in the same amount as any overdraft fees and interest charges
incurred by the Trust's transfer agent or the Trust with respect to the
transaction. If the Trust's transfer agent does not receive payment for shares
purchased on the same day as an Order, the Trust's transfer agent and the
Distributor reserve the right, without notice, either to cancel the sale or to
sell the shares purchased back to the Trust, and in either case, Dealer shall be
responsible for any loss, including loss of profit, suffered by the Trust's
transfer agent, the Distributor or the Trust resulting from Dealer's failure to
make payment.
(b) If Dealer does not receive redemption proceeds by the time
indicated in the then current Prospectus of the Trust, due to errors made by the
Trust's transfer agent, the Trust or the Trust's custodian (acting in that
capacity) or any of the Trust's transfer agent's affiliates or agents, the
Distributor will pay Dealer an amount equal to any overdraft fees and interest
charges that would be incurred by the Trust for an equivalent overdraft at its
custodian.
(c) If Dealer delivers Fed Funds with respect to an Order but fails to
notify the Trust's transfer agent of the Order prior to the time at which the
Order would be priced (had the Order been placed at the time of receipt of the
funds), the purchase will be priced at the net asset value determined on the
Fund Business Day (as defined in the applicable Prospectus) after the day the
funds are received.
SECTION 6. INFORMATION PERTAINING TO THE SHARES
(a) Dealer and its officers, employees and agents are not authorized to
make any representations concerning the Trust, the Funds or the Trust shares
except accurate communication of factual information contained in the
then-current prospectus and statement of additional information of the Trust and
in such printed information subsequently issued by the trust or the Distributor
as information supplemental to the prospectus and statement of additional
information.
(b) Dealer will not offer or sell any of the shares except under
circumstances that will result in compliance with the applicable Federal and
state securities laws, including any applicable requirements to deliver
confirmations to its customers. In connection with sales and offers to sell
shares, Dealer will furnish to each person to whom any such sale or offer is
made, a copy of the Fund's then current prospectus. The Distributor shall advise
Dealer as to the states or other jurisdictions in which shares of the Fund have
been qualified for sale under, or are exempt from the requirements of the
respective securities laws of such states and jurisdictions.
(c) The Distributor shall be under no liability to Dealer except for
lack of good faith and for obligations expressly assumed by The Distributor
herein. Nothing herein contained, however, shall be deemed to be a condition,
stipulation or provision binding any persons acquiring any securities to waive
compliance with any provision of the Securities Act of 1933, the Securities
Exchange Act of 1934 or the Rules and Regulations of the Securities and Exchange
Commission or to relieve the parties hereto from any liability arising under the
Securities Act of 1933.
SECTION 7. CERTIFICATION
The person signing below on behalf of Dealer certifies that he has been
duly elected, is now legally holding the offices indicated and is authorized to
execute this Agreement. He further certifies that Dealer is duly organized and
existing and has the power to take the actions referred to herein. He certifies
and agrees that the certifications and authorizations described in this
Agreement will continue in effect until the Distributor and the Trust's transfer
agent receive actual written notice of any change thereof.
SECTION 8. MISCELLANEOUS
(a) This Agreement shall be construed in accordance with the laws of
the State of ____________.
(b) This Agreement may be amended in writing at any time by the parties
hereto. In addition, this Agreement may be amended by the Distributor from time
to time by the following procedure in order to enable the Trust, the Distributor
or the Trust's transfer agent to comply with any regulatory requirements or
policy positions which may be imposed or adopted in the future by any
governmental authority with jurisdiction over the Trust, the Distributor or the
Trust's transfer agent. The Distributor will mail a copy of the amendment to
Dealer at the address listed above or such other address as Dealer shall in
writing provide to the Distributor.
The amendment will be effective immediately upon its being sent.
(c) This Agreement will terminate automatically upon the termination of
either of the Transfer Agent Agreement or the Distribution Agreement. This
Agreement may be terminated at any time by any party hereto without cause by
giving the other parties at least sixty (60) days' written notice of its
intention to terminate.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
By:
Name:
Title:
----------------------------
By:
Name:
Title:
<PAGE>
RENAISSANCE CAPITAL GREENWICH FUNDS
SELECTED DEALER AGREEMENT
Exhibit A
SERVICE PERFORMED BY DEALER
<PAGE>
a. Maintain customer account detail for shares held for customers.
b. Issue and deliver periodic statements to customers.
c. Receive from the Trust and break down and remit to customers monies
associated with their redemption of Trust shares.
d. Answer customer inquiries regarding account status and history.
e. Fill customer requests for prospectuses and statements of additional
information.
f. Receive and process customer registration forms.
g. Receive records regarding the services to be performed, as required by
applicable law and regulations.
h. For any omnibus or similar account maintained with the Trust's transfer
agent, perform all subaccounting for subaccounts, including:
(i) Break down daily dividend accruals and apply them to customer
account records.
(ii) Receive, break down and pay or, at customer's direction,
consolidate and reinvest customer dividends on payment
dates.
(iii) Maintain all proof procedures between customer subaccounts
and the central account with the Trust.
(iv) Perform all special mailings to customers required by the
Trust, such as annual prospectus mailings, proxy
solicitations, and semi-annual and annual reports.
<PAGE>
RENAISSANCE CAPITAL GREENWICH FUNDS
SELECTED DEALER AGREEMENT
Exhibit B
WIRE RECEIPT ACCOUNT
Name of Bank
-------------------------------------------------------------------
Street Address
-------------------------------------------------------------------
City/State/Zip
-------------------------------------------------------------------
ABA Routing No.
-------------------------------------------------------------------
Account No.
-------------------------------------------------------------------
Title of Account
-------------------------------------------------------------------
Instructions
-------------------------------------------------------------------
<PAGE>
9
KL2:175839.1
15
DOMESTIC CUSTODY AGREEMENT Renaissance Capital Greenwich Funds
To: The Chase Manhattan Bank
Institutional Client Services
4 New York Plaza
New York, New York 10004
Gentlemen:
We are a company registered under the Investment Company Act of
1940, as amended and hereby request you to open and to maintain on your records
a Custody Account in our name as Entitlement Holder and to credit to such
account Financial Assets as our Securities Intermediary, upon the following
terms and conditions. From time to time, we may instruct you to open additional
Custody Accounts for us. Unless we and you shall otherwise expressly agree in
writing, all such Custody Accounts shall be governed by the terms of this
Agreement
Financial Assets credited to the Custody Account shall be
segregated at all times from your proprietary assets. Financial Assets credited
to the Custody Account shall be withdrawable or transferable upon our
instructions as hereinafter described, subject to the further terms and
conditions herein.
Definitions. The capitalized terms used herein shall have the
meanings set forth below:
"Agreement" means this Domestic Custody Agreement.
"Cash Account" means a cash account in our name on your records,
designated by us to be credited and debited in respect of all transactions to
the Custody Account pursuant to this Agreement and in which cash shall not be
subject to withdrawal by check or draft.
"Custody Account" means each Securities custody account on your
records to which Financial Assets are or may be credited pursuant to this
Agreement.
"Depository" means a Federal Reserve Bank and any clearing
corporation as defined in the Uniform Commercial Code.
"Entitlement Holder" means the person on the records of a
Securities Intermediary as the person having a Securities Entitlement against
the Securities Intermediary.
"Financial Assets" means Securities. As the context requires a
Financial Asset means either the interest itself or the means by which a
person's claim to it is evidenced, including a certificated or uncertificated
Security, a Security certificate, or a Securities Entitlement.
"Securities" means stocks, bonds, rights, warrants and other
negotiable and non-negotiable paper issued in certificated form or in
uncertificated form and commonly traded or dealt in on securities exchanges or
financial markets, and other obligations of an issuer, or shares, participations
and interests in an issuer recognized in an area in which it is issued or dealt
in as a medium for investment and any other property as shall be acceptable to
you for the Custody Account.
"Securities Entitlement" means the rights and property interest
of an Entitlement Holder with respect to a Financial Asset as set forth in Part
5 of the Uniform Commercial Code.
"Securities Intermediary" means you, a Depository, and any other
financial institution which in the ordinary course of its business maintains
Securities accounts for others and acts in that capacity.
"Uniform Commercial Code" means Article 8 of the New York Uniform
Commercial Code, as amended.
Transactions. Unless you receive contrary written instructions
from us, and subject to the further provisions of
this Agreement, you are authorized:
(a) to receive all interest and dividends payable on the
Financial Assets credited to the Custody Account and to credit such interest and
dividends to the Cash Account;
(b) to credit to the Cash Account all proceeds received from
sales and redemptions of Financial Assets for the Custody Account;
(c) to debit the Cash Account for the cost of acquiring Financial
Assets for the Custody Account;
(d) to present Financial Assets (including coupons) for payment
upon maturity, when called for redemption and when income payments are due;
(e) to exchange Financial Assets for other Financial Assets where
the exchange is purely ministerial as, for example, the exchange of Financial
Assets in temporary form for Financial Assets in definitive form or the
mandatory exchange of Financial Assets;
(f) to sell Financial Assets with fractional interests resulting
from a stock split or a stock dividend and to credit the Cash Account with the
proceeds thereof;
(g) to execute in our name, whenever you deem it appropriate,
such ownership and other certificates as may be required to obtain payments with
respect to, or to effect the sale, transfer or other disposition of, Financial
Assets in the Custody Account and to guarantee as our signature the signature so
affixed; and
(h) to receive and hold in the Custody Account Financial Assets
which have transfer limitations imposed upon them by the Securities Act of 1933,
as amended.
Instructions. You are authorized to rely and act upon all further
written instructions given or purported to be given by one or more officers,
employees or agents of ours (i) authorized by or in accordance with a corporate
resolution of ours delivered to you or (ii) described as authorized in a
certificate delivered to you by our Secretary or an Assistant Secretary or
similar officer of ours (each such officer, employee or agent or combination of
officers, employees and agents authorized pursuant to clause (i) or described
pursuant to clause (ii) of this paragraph is hereinafter referred to as an
"Authorized Officer"). (The term "instructions" includes, without limitation,
instructions to sell, assign, transfer, deliver, purchase or receive for the
Custody Account, any and all stocks, bonds and other Financial Assets or to
transfer funds in the Cash Account.) You may also rely and act upon instructions
when bearing or purporting to bear the facsimile signature or signatures of any
of the individuals designated by an Authorized Officer regardless of by whom or
by what means the actual or purported facsimile signature or signatures thereon
may have been affixed thereto if such facsimile signature or signatures resemble
the facsimile specimen or specimens from time to time furnished to you by any of
such Authorized Officers, our Secretary or an Assistant Secretary or similar
officer of ours. In addition, you may rely and act upon instructions received by
telephone, telex, TWX, facsimile transmission, bank wire or other teleprocess or
electronic instruction or trade information system acceptable to you which you
believe in good faith to have been given by an Authorized Officer or which are
transmitted with proper testing or authentication pursuant to terms and
conditions which you may specify. You may also rely and act upon instructions
transmitted electronically through your TITAN Data Entry System or any similar
electronic instruction system acceptable to you. You shall incur no liability to
us or otherwise as a result of any act or omission by you in accordance with
instructions on which you are authorized to rely pursuant to the provisions of
this paragraph. Any instructions delivered to you by telephone shall promptly
thereafter be confirmed in writing by an Authorized Officer, but you shall incur
no liability for our failure to send such confirmation in writing, the failure
of any such written confirmation to conform to the telephone instructions which
you received, the failure of any such written confirmation to be signed or
properly signed, or your failure to produce such confirmation at any subsequent
time. You shall incur no liability for refraining from acting upon any
instructions which for any reason you, in good faith, are unable to verify to
your own satisfaction. With respect to instructions received hereunder to
transfer funds from the Cash Account to any other account or party, we agree to
implement any callback or other authentication method or procedure or security
device required by you at any time or from time to time. Unless otherwise
expressly provided, all authorizations and instructions shall continue in full
force and effect until canceled or superseded by subsequent authorizations or
instructions received by your safekeeping account administrator with reasonable
opportunity to act thereon. Your authorization to rely and act upon instructions
pursuant to this paragraph shall be in addition to, and shall not limit, any
other authorization which we may give you regarding our accounts with you.
We agree that, if you require test arrangements, authentication
methods or procedures or other security devices to be used with respect to
instructions which we may give hereunder, thereafter instructions given by us
shall be given and processed in accordance with terms and conditions for the use
of such arrangements, methods or procedures or devices as you may put into
effect and modify from time to time. We shall safeguard any testkeys,
identification codes or other security devices which you make available to us
and agree that we shall be responsible for any loss, liability or damage
incurred by you or by us as a result of your acting in accordance with
instructions from any unauthorized person using the proper security device,
unless such unauthorized use is the result of your negligence or willful
misconduct. You may electronically record any instructions given by telephone,
and any other telephone discussions with respect to the Custody Account or
transactions pursuant to this Agreement.
If you are instructed by us to purchase or sell Financial Assets
for the Custody Account you may enter purchase and sale orders and
confirmations, and perform any other acts incidental or necessary to the
performance thereof with brokers or dealers or similar agents selected by you,
including any broker or dealer or similar agent affiliated with you, for our
account and risk in accordance with accepted industry practices in the relevant
market.
Except as may be provided otherwise in this Agreement, you are
authorized to execute our instructions and take other actions pursuant to this
Agreement in accordance with your customary processing practices for customers
similar to us and, in accordance with such practices, you may retain agents,
including subsidiaries or affiliates of yours, to perform any of your duties and
responsibilities under this Agreement
In acting upon instructions to deliver Financial Assets against
payment, you are authorized, in accordance with customary securities processing
practices, to deliver such Financial Assets to the purchaser thereof or dealer
therefor (including to an agent for any such purchaser or dealer) against a
receipt, with the expectation of collecting payment from the purchaser, dealer
or agent to whom the Financial Assets were so delivered before the close of
business on the same day.
Payment Orders. Funds credited to the Cash Account shall be
transferred by us by means of instruction (a "payment order") to one of your
account administrators assigned by you for the Custody Account, which you will
identify to us. We agree that payment orders and communications seeking to
cancel or amend payment orders which are issued by telephone, telecopier or in
writing shall be subject to a mutually agreed security procedure and you may
execute or pay payment orders issued in our name when verified by you in
accordance with such procedure.
In executing or paying a payment order you may rely upon the
identifying number (e.g. Fedwire routing number or account) or any party as
instructed in the payment order. We assume full responsibility for any
inconsistency between the name and identifying number of any party in payment
orders issued to you in our name.
Registration. Unless you receive contrary instructions from us,
you are authorized to keep Financial Assets in your own vaults or in book entry
form registered in your name or in the name of your nominee or nominees or,
where Financial Assets are eligible for deposit in a Depository, such as The
Depository Trust Company or Participants Trust Company, you may use any such
Depository and permit the registration of registered Financial Assets in the
name of its nominee or nominees, and we agree to hold you and the nominees
harmless from any liability as holders of record. We shall accept the return or
delivery of Financial Assets of the same class and denomination as those
deposited with you by us or otherwise received by you for the Custody Account,
and you need not retain the particular certificates so deposited or received.
If any of our Financial Assets registered in your name or the
name of your nominee or held in a Depository and registered in the name of the
Depository's nominee are called for partial redemption by the issuer of such
Financial Assets, you are authorized to allot the called portion to the
respective beneficial holders of the Financial Assets in any manner deemed to be
fair and equitable by you in your sole discretion.
Segregated Account. Upon receipt of instructions from us you will
establish and maintain a segregated account or accounts on your records for and
on our behalf, in which may be credited cash and/or Financial Assets:
(a) in accordance with the provisions of an agreement among us
and a broker-dealer (registered under the Securities and Exchange Act of 1934
("Exchange Act") and a member of the National Association of Securities Dealers,
Inc. ("NASD"), or any futures commission merchant registered under the Commodity
Exchange Act, relating to compliance with the rules of the Options Clearing
Corporation and of any registered national securities exchange (or the
Commoditiy Futures Trading Commission or any registered contract market), or of
any similar organization, regarding escrow or other arrangements in connection
with the transactions by us;
(b) for the purpose of segregating cash or financial assets with
options purchased or sold by us; and
(c) for other proper corporate purposes as per the instruction of
an Authorized Officer.
Statements. You shall notify us of each Financial Asset
transaction effected for the Custody Account and of income on and redemptions of
the Financial Assets in the Custody Account, as well as furnish us a listing of
such Financial Assets, at such times upon which you and we mutually agree.
Periodic statements shall be rendered to us as we may reasonably require, but
not less frequently than monthly. You shall at all times maintain proper books
and records that shall identify the Financial Assets as ours. Your books and
records relating to the Custody Account shall be available for inspection upon
reasonable notice to you during your regular business hours by duly authorized
officers, employees, or agents of ours, or by legally authorized regulatory
officials who are then in the process of reviewing our financial affairs upon
proof to you of such official status.
Unless we shall send to you a written exception or objection to
any statement of account within 60 days of our receipt of such statement from
you, we shall be deemed to have approved such statement. In such event, or where
we have otherwise approved such statement, you shall, to the extent permitted by
law, be released, relieved and discharged with respect to all matters set forth
in such statement or reasonably implied therefrom as though it had been settled
by the decree of a court of competent jurisdiction in an action where we and all
persons having or claiming an interest in the Custody Account or Cash Account
were parties.
Corporate Actions. You shall send us such proxies (signed in
blank, if issued in your name or the name of your nominee or a nominee of a
Depository) and communications with respect to Financial Assets in the Custody
Account as call for voting or relate to legal proceedings within a reasonable
time after sufficient copies are received by you for forwarding to customers. In
addition, you shall follow coupon payments, redemptions, exchanges or similar
matters with respect to Financial Assets in the Custody Account and advise us of
rights issued, tender offers or any other discretionary rights with respect to
such Financial Assets, in each case, of which you receive notice at your central
corporate actions department from the issuer or from the Depository in which
such Financial Assets are maintained or notice published in publications and
reported in reporting services routinely used by you for this purpose.
Custodian Responsibility. Except as provided in the next
following paragraph, you shall be obligated to indemnify us for any loss of
Financial Assets credited to the Custody Account resulting from (i) the
negligence or willful misconduct of you or your officers, employees or agents
retained by you to hold such Financial Assets or (ii) the burglary, robbery,
hold-up, theft or mysterious disappearance, including loss by damage or
destruction. In the event of a loss of Financial Assets in the Custody Account
for which you are required to indemnify us pursuant to the immediately preceding
sentence, at your option, you shall promptly replace such Financial Assets (by
among other means posting appropriate security or bond with the issuer(s) of
such Financial Assets and obtaining their reissue) or the value thereof
(determined based upon the market value of the Financial Assets which are the
subject of such loss as of the date of the discovery of such loss) and the value
of any loss of rights or privileges resulting from the loss of such Financial
Assets. The foregoing indemnity shall be your exclusive liability to us for your
loss of Financial Assets from the Custody Account. In respect of all your other
duties and obligations pursuant to the terms of this Agreement, you shall be
liable to us only to the extent of our general damages suffered or incurred as a
result of any act or omission of you or your officers, employees or agents which
constitutes negligence or willful misconduct. General damages shall mean only
those damages as directly and necessarily result from such act or omission
without reference to any special conditions or circumstances of ours or of any
transaction, whether or not you have been advised of any such special conditions
or circumstances. Anything in this Agreement to the contrary notwithstanding, in
no event shall you be liable to us under this Agreement for special, indirect or
consequential loss or damage of any kind whatsoever, whether or not you are
advised as to the possibility of such loss or damage and regardless of the form
of action any such loss or damage may be claimed.
You shall not be liable for the acts or omissions of (or the
bankruptcy or insolvency of) any Depository. If, however, as a result of any act
or omission of, or the bankruptcy or insolvency of, any Depository we suffer any
loss or liability, you will take such steps with respect thereto in order to
effect a recovery as you shall reasonably deem appropriate under the
circumstances (including the bringing and settling of legal proceedings),
provided that unless you shall be liable as set forth in the immediately
preceding paragraph of this Agreement, for such loss or liability by virtue of
the negligence or misconduct of you or your officers, employees or agents, the
amount of any cost or expense in effecting, or attempting to effect, such
recovery shall be for our account, and you shall have the right to charge such
cost or expense to the Cash Account. We further agree to be bound by the
Depository rules and procedures applicable to you as a participant in respect of
any Financial Assets held by you in your account with such Depository.
All collection and receipt of funds or Financial Assets and all
payment and delivery of funds or Financial Assets under this Agreement shall be
made by you as our agent, at our risk with respect to our actions or omissions
and those of persons other than you, including, without limitation, the risk
associated with the securities processing practice of delivering Financial
Assets against a receipt and the risk that the counterparty in any transaction
into which we enter will not transfer funds or Financial Assets or otherwise
perform in accordance with our expectation of its obligations thereunder
(including, without limitation, where, as a result of such nonperformance, a
Depository reverses, or requires repayment of, any credit given in connection
with the transfer of Financial Assets).
In no event shall you be responsible or liable for any loss due
to forces beyond your control, including, but not limited to, acts of God,
flood, fire, nuclear fusion, fission or radiation, war (declared or undeclared),
terrorism, insurrection, revolution, riot, strikes or work stoppages for any
reason, embargo, closure or disruption of any market, government action,
including any laws, ordinances, regulations or the like which restrict or
prohibit the providing of the services contemplated by this Agreement, inability
to obtain equipment or communications facilities, or the error in transmission
of information caused by any machines or systems or the failure of equipment or
interruption of communications facilities, and other causes whether or not of
the same class or kind as specifically named above. In the event that you are
unable substantially to perform for any of the reasons described in the
immediately preceding sentence, you shall so notify us as soon as reasonably
practicable.
You shall be responsible for only those duties expressly stated
in this Agreement or expressly contained in instructions to perform the services
described herein given to you pursuant to the provisions of this Agreement and
accepted by you and, without limiting the foregoing, you shall have no duty or
responsibility:
a) to supervise the investment of, or make
recommendations with respect to the purchase, retention or sale of, Financial
Assets relating to the Custody Account, or to maintain for your benefit any
insurance on Financial Assets in the Custody Account;
(b) with regard to any Financial Asset in the Custody Account as
to which a default in the payment of principal or interest has occurred, (i) to
give notice of default or make demand for payment to the issuer, or (ii) to take
any other action with respect to such default, except, in each instance, where
you have been requested by us and you have agreed in writing to do so;
(c) except as otherwise specifically provided in this section
under the heading "Custodian Responsibility", for any act or omission, or for
the solvency or insolvency, or notice to us of the solvency or insolvency, of
any broker or agent which is selected by you with reasonable care or by us or
any other person to effect any transaction for the Custody Account or to
perform any service under this Agreement;
(d) to evaluate, or report to us regarding, the financial
condition of any person, firm or corporation to which you deliver Financial
Assets or funds pursuant to this Agreement;
(e) for any loss occasioned by delay in the actual receipt of
notice by you of any payment, redemption or other transaction in respect to
which you are authorized to take some action pursuant to this Agreement; or
(f) for any errors or omissions made by any pricing services used
by you to value Financial Assets credited to the Custody Account as part of any
service subscribed to by us from you.
Settlements. We agree with you that all credits of Financial
Assets and proceeds by you to the Custody Account and the Cash Account,
respectively, on the settlement or payable date shall be provisional when made
and you shall be entitled to reverse any such credits subject to actual receipt
or collection of immediately available funds, and you shall have the right to
reverse any such provisional credits or erroneous entries to the Cash Account
retroactively to the date upon which the correct entry, or no entry, should have
been made.
We shall have sufficient immediately available funds each day in
the Cash Account to pay for the settlement of all Financial Assets delivered
against payment to you and credited to the Custody Account. Should we fail to
have sufficient immediately available funds in the Cash Account to settle these
deliveries of Financial Assets pursuant to the preceding sentence (a "Deficit"),
you, in your sole discretion, may elect (i) to reject the settlement of any or
all of the Financial Assets delivered to you that day to the Custody Account,
(ii) to settle the deliveries on our behalf and debit the Cash Account (A) for
the amount of such Deficit and (B) for the amount of the funding or other cost
or expense incurred or sustained by you for our failure to have sufficient
immediately available funds in the Cash Account by the applicable settlement
deadlines for you, or (iii) to reverse the posting of the Financial Assets
credited to the Custody Account.
The foregoing rights are in addition to and not in limitation of
any other rights or remedies available to you under this Agreement or otherwise.
Any advances made by you to us in connection with the purchase, sale,
redemption, transfer or other designation of Financial Assets or in connection
with disbursements of funds to any party, which create or result in an overdraft
in the Cash Account shall be deemed a loan by you to us, payable on demand, and
bear interest on the amount of the loan each day that the loan remains unpaid at
your prime rate in effect as announced by you from time to time (unless another
rate has been separately agreed upon, in writing, between you and us in respect
of such advances).
No prior action or course of dealing on your part with respect to
the settlement of Financial Asset transactions on our behalf shall be used by or
give rise to any claim or action by us against you for your refusal to pay or
settle for Financial Asset transactions we have not timely funded as required
herein.
Responsible as Principal. We agree that we shall be responsible
to you as a principal for all of our obligations to you arising under or in
connection with this Agreement, notwithstanding that we may be acting on behalf
of other persons, and we warrant our authority to deposit in the Custody Account
and Cash Account, respectively, any Financial Assets and funds which you or your
agents receive therefor and to give instructions relative thereto. We further
agree that you shall not be subject to, nor shall your rights and obligations
with respect to this Agreement and the Custody Account or the Cash Account be
affected by, any agreement between us and any such person.
Crediting and Debiting Procedures. With respect to all
transactions for the Custody Account and the Cash Account, including, without
limitation, dividend and interest payments and sales and redemptions of
Financial Assets, availability of funds credited to the Custody Account and Cash
Account shall be based on the type of funds used in the trade settlement or
payment, including, but not limited to, same day availability for federal or
same day funds and next business day availability for clearing house or next day
funds. Furthermore, with respect to all purchases and sales of Financial Assets
for the Custody Account, the proceeds from the sale of Financial Assets shall be
credited to the Cash Account on the date proceeds are received by you and the
cost of Financial Assets purchased shall be debited to the Cash Account on the
date Financial Assets are received by you, unless we request your contractual
settlement service for the Custody Account in which case the following
provisions shall apply with respect to the delivery and receipt of Financial
Assets for the Custody Account for those Financial Assets and transactions as to
which you customarily offer this service.
(a) When we instruct you to deliver or receive Financial Assets,
on the contractual settlement date you shall credit the Cash Account with the
expected proceeds of the transaction and debit the Custody Account for the
Financial Assets which we have instructed you to deliver, in the case of
deliveries, and debit the Cash Account for the cost of the Financial Assets
which we have instructed you to receive and credit the Custody Account with such
Financial Assets, in the case of receives. These credits and debits are
provisional accounting entries which you shall reverse on our instructions and
which you may reverse, even in the absence of instructions from us, if the
transaction with respect to which they were made fails to settle within a
reasonable period, determined by you in your discretion, after the contractual
settlement date, except that if you deliver Financial Assets which are returned
by the recipient thereof, you may reverse such credits and debits at any time.
You have no obligation to use this crediting and debiting procedure with respect
to a delivery of Financial Assets if we do not have actually in our account
sufficient Financial Assets to make the delivery.
(b) As with other transactions processed by you, your
responsibility with respect to transactions for which you use this crediting and
debiting procedure shall be governed by the provisions of this Custody
Agreement, including the section headed "Custodian Responsibility". We agree
that your using this procedure is not an assurance by you that the transaction
will actually settle on the contractual settlement date and does not impose any
additional responsibility on you with respect to the transaction. Without
limiting your right to reverse credits and debits described above, the account
statements which you furnish to us shall reflect transactions as to which you
use this procedure as if they had actually settled on the contractual settlement
date, unless prior to the date to which the statement relates, you have reversed
such credits and debits.
(c) We agree that you may terminate this contractual settlement
service to us at any time and for any reason.
With respect to Financial Assets or transactions as to which you
do not customarily offer this service, you shall (i) in the case of deliveries
of Financial Assets, credit the proceeds of the transaction to the Cash Account
on the date they are received by you and debit the Financial Assets from the
Custody Account on the date they are delivered by you, and (ii) in the case of
Financial Assets received, debit the Cash Account for the cost of such Financial
Assets and credit the Custody Account with such Financial Assets on the date the
Financial Assets are received by you.
Taxes. Unless we have already done so, we shall deliver promptly
to you with respect to each Custody Account established under this Agreement,
two duly completed and executed copies of the proper United States Internal
Revenue Service Form W-9. We agree to provide duly executed and completed
updates of such form (or successor applicable form), on or before the date that
such form expires or becomes obsolete or after the occurrence of an event
requiring a change in the most recent form previously delivered by us to you. We
shall be responsible for the payment of all taxes relating to the Financial
Assets in the Custody Account, and we agree to pay, indemnify and hold you
harmless from and against any and all liabilities, penalties, interest or
additions to tax with respect to, or resulting from, any delay in, or failure
by, you (i) to pay, withhold or report any Federal, state or foreign taxes
imposed on, or (ii) to report interest, dividend or other income paid or
credited to the Cash Account, whether such failure or delay by you to pay,
withhold or report tax or income is the result of (x) our failure to comply with
the terms of this paragraph, or (y) your own acts or omissions; provided,
however, we shall not be liable to you for penalty or additions to tax due as a
result of your failure to pay or withold tax or to repoprt interest, dividend or
other income paid or credited to the Cash Account soley as a result of your
negligent acts or omissions.
Fees, Indemnification. We agree to pay you compensation for your
services pursuant to this Agreement at the fees of which you shall notify us
from time to time. We also agree to hold you and your officers, employees and
agents harmless from, and to indemnify and reimburse you and them for, all
claims, liabilities, losses, damages and expenses (including out-of-pocket and
incidental expenses and legal fees) incurred by you or them in connection with
or relating to the Custody Account or your acting under this Agreement, provided
that you or they, as the case may be, have not acted with negligence or willful
misconduct with respect to the events resulting in such claims, liabilities,
losses, damages or expenses.
Security Interest. We hereby pledge, assign and grant to you a
continuing security interest in the Financial Assets in the Custody Account and
any Financial Assets in your possession and under your control for credit to the
Custody Account, as security for any obligations, matured or unmatured, direct
or indirect, absolute or contingent, now due or hereafter to become due from us
to you pursuant to this Agreement.
Set-Off. You may, without notice to us, set-off any sums held for
us or standing to the credit of any of our cash accounts with you in and toward
the satisfaction of any obligation of us to you under this Agreement, whether or
not any such sums or credits or obligations are matured or unmatured, diirect or
indirect, absolute or contingent, and may do so notwithstanding that the
accounts may be maintained at different branches of yours and may not be
expressed in the same currency.
Termination. Either party may terminate this Agreement at any
time upon thirty days written notice. Our obligations pursuant to the paragraphs
under the headings "Registration", "Settlements", "Fees, Indemnification"
"Taxes" and "Security Interest" shall survive the termination of this Agreement.
Notices. Notices with respect to termination, specification of
Authorized Officers and terms and conditions for instructions required hereunder
shall be in writing, and shall be deemed to have been duly given if delivered
personally, and when delivered by courier service or by mail, postage prepaid
when received, to the following addresses (or to such other address as either
party hereto may from time to time designate by notice duly given in accordance
with this paragraph):
To us at: Renaissance Capital Greenwich Funds
Attn: Linda Killian
325 Greenwich Ave.
Greenwich, CT 06830
Fax #203-622-0898
To you, to the attention of the individual designated by you as
the safekeeping account administrator for our account, at:
The Chase Manhattan Bank
Institutional Client Services
4 New York Plaza
New York, New York 10004
Governing Law, Successors and Assigns, Headings. This
Agreement shall be governed by andconstrued in accordance with the laws of the
State of New York, without regardto laws as to conflicts of laws, and shall be
binding on our and your respectivesuccessors and assigns. We and you hereby
irrevocably submit to the exclusive jurisdiction of the state and federal courts
in the State and County of New Yorkfor the purposes of any suit, action or other
proceedings arising out of this Agreement. We and you hereby irrevocably waive
any objection on the ground of venue,forum non conveniens, or any similar
grounds, and irrevocably consent to service of process by mail or in any manner
permitted by New York law, and irrevocably waive our rights to any jury trial.
The headings of the paragraphs hereof are included for convenience of reference
only and do not form a part ofthis Agreement.
Prior Proposals. This Agreement (including any Riders
relating to additional services in respect of the Custody Account we may request
of you) shall contain the complete agreement of the parties hereto with respect
to the Custody Account (except as may be expressly provided to the contrary
herein) and supersedes and replaces any previously made proposals,
representations, warranties or agreements with respect thereto by either or
both of the parties hereto. This Agreement shall become effective upon
execution hereof by us and acceptance by you.
Separability. Any provisions of this Agreement which
may be determined by competent authority to be prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate orrender unenforceable such provision in any
other jurisdiction.
Reservation of Right. You shall have the right not to
accept for deposit to the Custody Account any Financial Assets which are in a
form or condition which you, in your sole discretion, determine not to be
suitable for the services you provide under this Agreement.
Your rights and remedies under this Agreement are in
addition to, and not in limitation of,any other rights and remedies you may have
under applicable law.
Additional Duties. If we shall ask you to perform
duties or responsibilities not specifically set forth in this Agreement
and you choose to perform such additional duties or responsibilities, you
shall be held to the same standard of care and you shall be entitled to all the
protective provisions (including but not limited to limitation of liability
and indemnification) set forth herein.
Counterparts. This Agreement may be executed in several
counterparts each of which shall be deemed to be an original and together shall
constitute one and the same agreement.
Renaissance Capital Greenwich Funds
By:
Title:
Date:
Accepted by:
THE CHASE MANHATTAN BANK
By:
Title:
Date:
MUTUAL FUNDS SERVICE AGREEMENT
o FUND ADMINISTRATION SERVICES
o FUND ACCOUNTING SERVICES
o TRANSFER AGENCY SERVICES
RENAISSANCE CAPITAL GREENWICH FUNDS
OCTOBER 10, 1997
<PAGE>
MUTUAL FUNDS SERVICE AGREEMENT
Table of Contents
Section Page
1. Appointment....................................................1
2. Representations and Warranties.................................1
3. Delivery of Documents..........................................3
4. Services Provided..............................................3
5. Fees and Expenses..............................................4
6. Limitation of Liability and Indemnification....................6
7. Term...........................................................8
8. Notices........................................................8
9. Waiver.........................................................9
10. Force Majeure..................................................9
12. Amendments.....................................................9
12. Severability...................................................9
13. Governing Law..................................................9
Signatures.............................................................10
<PAGE>
MUTUAL FUNDS SERVICE AGREEMENT
Table of Contents (continued)
Page
Schedule A -- Fees and Expenses.......................................A-1
Schedule B -- Fund Administration Services Description................B-1
Schedule C -- Fund Accounting Services Description....................C-1
Schedule D -- Transfer Agency Services Description....................D-1
<PAGE>
12
MUTUAL FUNDS SERVICE AGREEMENT
AGREEMENT made as of October 10, 1997 by and between the
Renaissance Capital Greenwich Funds, (the "Fund"), a Delaware Trust, and Chase
Global Funds Services Company ("Chase"), a Delaware corporation.
W I T N E S S E T H:
WHEREAS, the Fund is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Fund wishes to contract with Chase to provide
certain services with respect to the Fund;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Fund hereby appoints Chase to provide services for
the Fund, as described hereinafter, subject to the supervision of the Board of
Trustees of the Fund (the "Board"), for the period and on the terms set forth in
this Agreement. Chase accepts such appointment and agrees to furnish the
services herein set forth in return for the compensation as provided in Section
5 of and Schedule A to this Agreement.
2. REPRESENTATIONS AND WARRANTIES.
(a) Chase represents and warrants to the Fund that:
(i) Chase is a corporation, duly organized and
existing under the laws of the State of
Delaware;
(ii) Chase is duly qualified to carry on its
business in the Commonwealth of Massachusetts;
(iii) Chase is empowered under applicable laws and
by its Articles of Incorporation and By-Laws
to enter into and perform this Agreement;
(iv) all requisite corporate proceedings have been
taken to authorize Chase to enter into and
perform this Agreement;
(v) Chase has, and will continue to have, access
to the facilities, personnel and equipment
required to fully perform its duties and
obligations hereunder;
<PAGE>
(vi) no legal or administrative proceedings have
been instituted or threatened which would
impair Chase's ability to perform its duties
and obligations under this Agreement; and
(vii) Chase's entrance into this Agreement shall not
cause a material breach or be in material
conflict with any other agreement or
obligation of Chase or any law or regulation
applicable to Chase;
(b) The Fund represents and warrants to Chase that:
(i) the Fund is a Delaware Trust, duly organized
and existing and in good standing under the
laws of Delaware;
(ii) the Fund is empowered under applicable laws
and by its Charter Document and By-Laws to
enter into and perform this Agreement;
(iii) all requisite proceedings have been taken to
authorize the Fund to enter into and perform
this Agreement;
(iv) the Fund is an investment company properly
registered under the 1940 Act; (v) a
registration statement under the Securities
Act of 1933, as amended("1933 Act") and the
1940 Act on Form N-1A has been filed and will
be effective and will remain effective
during the term of this Agreement, and all
necessary filings under the laws of the states
will have been made and will be current during
the term of this Agreement;
(vi) no legal or administrative proceedings have
been instituted or threatened which would
impair the Fund's ability to perform its
duties and obligations under this Agreement;
(vii) the Fund's registration statements comply in
all material respects with the 1933 Act and
the 1940 Act (including the rules and
regulations thereunder) and none of the Fund's
prospectuses and/or statements of additional
information contain any untrue statement of
material fact or omit to state a material fact
necessary to make the statements therein not
misleading; and
(viii) the Fund's entrance into this Agreement shall
not cause a material breach or be in material
conflict with any other agreement or
obligation of the Fund or any law or
regulation applicable to it.
<PAGE>
3. DELIVERY OF DOCUMENTS. The Fund will promptly furnish to Chase such
copies, properly certified or authenticated, of contracts, documents and other
related information that Chase may request or requires to properly discharge its
duties. Such documents may include but are not limited to the following:
(a) Resolutions of the Board authorizing the appointment of
Chase to provide certain services to the Fund and
approving this Agreement;
(b) The Fund's Charter Document;
(c) The Fund's By-Laws;
(d) The Fund's Notification of Registration on Form N-8A
under the 1940 Act as filed with the Securities and
Exchange Commission ("SEC");
(e) The Fund's registration statement including exhibits,
as amended, on Form N-1A (the "Registration Statement")
under the 1933 Act and the 1940 Act, as filed with the
SEC;
(f) Copies of the Investment Advisory Agreement between the
Fund and its investment adviser (the "Advisory
Agreement");
(g) Opinions of counsel and auditors' reports;
(h) The Fund's prospectus(es) and statement(s) of
additional information relating to all funds, series,
portfolios and classes, as applicable, and all
amendments and supplements thereto (such Prospectus(es)
and Statement(s) of Additional Information and
supplements thereto, as presently in effect and as from
time to time hereafter amended and supplemented, herein
called the "Prospectuses"); and
(i) Such other agreements as the Fund may enter into from
time to time including securities lending agreements,
futures and commodities account agreements, brokerage
agreements and options agreements.
4. SERVICES PROVIDED.
(a) Chase will provide the following services subject to the
control, direction and supervision of the Board and in compliance with the
objectives, policies and limitations set forth in the Fund's Registration
Statement, Charter Document and By-Laws; applicable laws and regulations; and
all resolutions and policies implemented by the Board:
<PAGE>
(i) Fund Administration,
(ii) Fund Accounting, and
(iii) Transfer Agency.
A detailed description of each of the above services is contained in Schedules
B, C and D, respectively, to this Agreement.
(b) Chase will also:
(i) provide office facilities with respect to the
provision of the services contemplated herein
(which may be in the offices of Chase or a
corporate affiliate of Chase);
(ii) provide the services of individuals to serve
as officers of the Fund who will be
designated by Chase and elected by the Board
subject to reasonable Board approval;
(iii) provide or otherwise obtain personnel
sufficient for provision of the services
contemplated herein;
(iv) furnish equipment and other materials, which
are necessary or desirable for provision of
the services contemplated herein; and
(v) keep records relating to the services
provided hereunder in such form and manner as
Chase may deem appropriate or advisable.
To the extent required by Section 31 of the
1940 Act and the rules thereunder, Chase
agrees that all such records prepared or
maintained by Chase relating to the services
provided hereunder are the property of the
Fund and will be preserved for the periods
prescribed under Rule 31a-2 under the 1940
Act, maintained at the Fund's expense, and
made available in accordance with such Section
and rules.
5. FEES AND EXPENSES.
(a) As compensation for the services rendered to the Fund
pursuant to this Agreement the Fund shall pay Chase monthly fees determined as
set forth in Schedule A to this Agreement. Such fees are to be billed monthly
and shall be due and payable upon receipt of the invoice. Upon any termination
of the provision of services under this Agreement before the end of any month,
the fee for the part of the month before such termination shall be prorated
according to the proportion which such part bears to the full monthly period and
shall be payable upon the date of such termination.
(b) For the purpose of determining fees calculated as a function
of the Fund's assets, the value of the Fund's assets and net assets shall be
computed as required by its currently effective Prospectus, generally accepted
accounting principles, and resolutions of the Board.
<PAGE>
(c) The Fund may request additional services, additional
processing, or special reports, with such specifications and requirements
documentation as may be reasonably required by Chase . If Chase elects to
provide such services or arrange for their provision, it shall be entitled to
additional fees and expenses at its customary rates and charges.
(d) Chase will bear its own expenses in connection with the
performance of the services under this Agreement except as provided herein or as
agreed to by the parties. The Fund agrees to promptly reimburse Chase for any
services, equipment or supplies ordered by or for the Fund through Chase and for
any other expenses that Chase may incur on the Fund's behalf at the Fund's
request or as consented to by the Fund. Such other expenses to be incurred in
the operation of the Fund and to be borne by the Fund, include, but are not
limited to: taxes; interest; brokerage fees and commissions; salaries and fees
of officers and directors who are not officers, directors, shareholders or
employees of Chase, or the Fund's investment adviser or distributor; SEC and
state Blue Sky registration and qualification fees, levies, fines and other
charges; EDGAR filing fees', processing services and related fees; postage and
mailing costs; costs of share certificates; advisory and administration fees;
charges and expenses of pricing and data services, independent public
accountants and custodians; insurance premiums including fidelity bond premiums;
legal expenses; consulting fees; customary bank charges and fees; costs of
maintenance of corporate existence; expenses of typesetting and printing of
Prospectuses for regulatory purposes and for distribution to current
shareholders of the Fund (the Fund's distributor to bear the expense of all
other printing, production, and distribution of Prospectuses, and marketing
materials); expenses of printing and production costs of shareholders' reports
and proxy statements and materials; expenses of proxy solicitation, proxy
tabulation and annual meetings; costs and expenses of Fund stationery and forms;
costs and expenses of special telephone and data lines and devices; costs
associated with corporate, shareholder, and Board meetings; trade association
dues and expenses; reprocessing costs to Chase caused by third party errors; and
any extraordinary expenses and other customary Fund expenses. In addition, Chase
may utilize one or more independent pricing services to obtain securities prices
and to act as backup to the primary pricing services, in connection with
determining the net asset values of the Fund. The Fund will reimburse Chase for
the Fund's share of the cost of such services based upon the actual usage, or a
pro-rata estimate of the use, of the services for the benefit of the Fund.
(e) All fees, out-of-pocket expenses, or additional charges of
Chase shall be billed on a monthly basis and shall be due and payable upon
receipt of the invoice.
<PAGE>
(f) Chase will render, after the close of each month in which
services have been furnished, a statement reflecting all of the charges for such
month. Charges remaining unpaid after thirty (30) days shall bear interest in
finance charges equivalent to, in the aggregate, the Prime Rate (as determined
by Chase) plus two percent per year and all costs and expenses of effecting
collection of any such sums, including reasonable attorney's fees, shall be paid
by the Fund to Chase.
(g) In the event that the Fund is more than sixty (60) days
delinquent in its payments of monthly billings in connection with this Agreement
(with the exception of specific amounts which may be contested in good faith by
the Fund), this Agreement may be terminated upon sixty (60) days' written notice
to the Fund by Chase. The Fund must notify Chase in writing of any contested
amounts within sixty (60) days of receipt of a billing for such amounts.
Disputed amounts are not due and payable while they are being investigated.
6. LIMITATION OF LIABILITY AND INDEMNIFICATION.
(a) Chase shall not be liable for any error of judgment or
mistake of law or for any loss or expense suffered by the Fund, in connection
with the matters to which this Agreement relates, except for a loss or expense
solely caused by or resulting from willful misfeasance, bad faith or negligence
on Chase's part in the performance of its duties or from reckless disregard by
Chase of its obligations and duties under this Agreement. In no event shall
Chase be liable for any indirect, incidental, special or consequential losses or
damages of any kind whatsoever (including but not limited to lost profits), even
if Chase has been advised of the likelihood of such loss or damage and
regardless of the form of action.
(b) Subject to Section 6(a) above, Chase shall not be
responsible for, and the Fund shall indemnify and hold Chase harmless from and
against, any and all losses, damages, costs, reasonable attorneys' fees and
expenses, payments, expenses and liabilities incurred by Chase, any of its
agents, or the Fund's agents in the performance of its/their duties hereunder,
including but not limited to those arising out of or attributable to:
(i) any and all actions of Chase or its officers
or agents required to be taken pursuant to
this Agreement;
(ii) the reliance on or use by Chase or its
officers or agents of information, records, or
documents which are received by Chase or its
officers or agents and furnished to it or them
by or on behalf of the Fund, and which have
been prepared or maintained by the Fund or any
third party on behalf of the Fund;
<PAGE>
(iii) the Fund's refusal or failure to comply with
the terms of this Agreement or the Fund's lack
of good faith, or its actions, or lack
thereof, involving negligence or willful
misfeasance;
(iv) the breach of any representation or warranty
of the Fund hereunder;
(v) the taping or other form of recording of
telephone conversations or other forms of
electronic communications with investors and
shareholders, or reliance by Chase on
telephone or other electronic instructions of
any person acting of behalf of a shareholder
or shareholder account for which telephone or
other electronic services have been
authorized;
(vi) the reliance on or the carrying out by Chase
or its officers or agents of any proper
instructions reasonably believed to be duly
authorized, or requests of the Fund or
recognition by Chase of any share certificates
which are reasonably believed to bear the
proper signatures of the officers of the Fund
and the proper countersignature of any
transfer agent or registrar of the Fund;
(vii) any delays, inaccuracies, errors in or
omissions from information or data provided to
Chase by data, corporate action pricing
services or securities brokers and dealers;
(viii) the offer or sale of shares by the Fund in
violation of any requirement under the Federal
securities laws or regulations or the
securities laws or regulations of any state,
or in violation of any stop order or other
determination or ruling by any Federal agency
or any state agency with respect to the offer
or sale of such shares in such state (1)
resulting from activities, actions, or
omissions by the Fund or its other service
providers and agents, or (2) existing or
arising out of activities, actions or
omissions by or on behalf of the Fund
prior to the effective date of this Agreement;
(ix) any failure of the Fund's registration
statement to comply with the 1933 Act and the
1940 Act (including the rules and regulations
thereunder) and any other applicable laws, or
any untrue statement of a material fact or
omission of a material fact necessary to make
any statement therein not misleading in a
Fund's prospectus;
(x) the actions taken by the Fund, its investment
adviser, and its distributor in compliance
with applicable securities, tax, commodities
and other laws, rules and regulations, or the
failure to so comply; and
<PAGE>
(xi) all actions, inactions, omissions, or errors
caused by third parties to whom Chase or the Fund
has assigned any rights and/or delegated any
duties under this Agreement at the request of or
as required by the Fund, its investment advisers,
distributor, administrator or sponsor.
(c) In performing its services hereunder, Chase shall be
entitled to rely on any oral or written instructions, notices or other
communications, including electronic transmissions, from the Fund and its
custodians, officers and directors, investors, agents and other service
providers which Chase reasonably believes to be genuine, valid and authorized,
and shall be indemnified by the Fund for any loss or expense caused by such
reliance. Chase shall also be entitled to consult with and rely on the advice
and opinions of outside legal counsel retained by the Fund, as necessary or
appropriate.
7. TERM. This Agreement shall become effective on the date first
hereinabove written and may be modified or amended from time to time by mutual
agreement between the parties hereto. The Agreement shall continue in effect for
one year. Thereafter the Agreement may be terminated by either party on 180
days' prior written notice. Upon termination of this Agreement, the Fund shall
pay to Chase such compensation and any out-of-pocket or other reimbursable
expenses which may become due or payable under the terms hereof as of the date
of termination or after the date that the provision of services ceases,
whichever is later.
8. NOTICES. Any notice required or permitted hereunder shall be in
writing and shall be deemed effective on the date of personal delivery (by
private messenger, courier service or otherwise) or upon confirmed receipt of
telex or facsimile, whichever occurs first, or upon receipt if by mail to the
parties at the following address (or such other address as a party may specify
by notice to the other):
If to the Fund:
Renaissance Capital Greenwich Funds
325 Greenwich Avenue
Greenwich, CT 06830
Attention:Linda R. Killian
Fax: 203-622-0898
<PAGE>
If to Chase:
Chase Global Funds Services Company
73 Tremont Street
Boston, MA 02108
Attention: Karl O. Hartmann, Esq.
Fax: 617-557-8820
9. WAIVER. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver nor
shall it deprive such party of the right thereafter to insist upon strict
adherence to that term or any term of this Agreement. Any waiver must be in
writing signed by the waiving party.
10. FORCE MAJEURE. Chase shall not be responsible or liable for any
harm, loss or damage suffered by the Fund, its investors, or other third parties
or for any failure or delay in performance of Chases obligations under this
Agreement arising out of or caused, directly or indirectly, by circumstances
beyond Chase's control. In the event of a force majeure, any resulting harm,
loss, damage, failure or delay by Chase will not give the Fund the right to
terminate this Agreement.
11. AMENDMENTS. This Agreement may be modified or amended from time to
time by mutual written agreement between the parties. No provision of this
Agreement may be changed, discharged, or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
change, discharge or termination is sought.
12. SEVERABILITY. If any provision of this Agreement is invalid or
unenforceable, the balance of the Agreement shall remain in effect, and if any
provision is inapplicable to any person or circumstance it shall nevertheless
remain applicable to all other persons and circumstances.
13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY THE SUBSTANTIVE
LAWS OF THE STATE OF NEW YORK.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the date first written above.
RENAISSANCE CAPITAL GREENWICH FUNDS
By:________________________
Name:______________________
Title:_____________________
CHASE GLOBAL FUNDS
SERVICES COMPANY
By:________________________
Name:______________________
Title:_____________________
<PAGE>
A-1
MUTUAL FUNDS SERVICE AGREEMENT
SCHEDULE A
FEES AND EXPENSES
Fund Administration, Accounting and Transfer Agency Fees
A. For the services rendered under this Agreement, the Fund shall pay
to the Administrator an annual fee based on the following
schedule:
17 basis points of the first $200 million dollars in assets 14
basis points for the next $100 million in assets 13 basis points
for the next $200 million in assets 10 basis points for the next
$500 million in assets 9 basis points for assets over $1 billion
B. The foregoing calculation is based on the average daily net assets
of the Fund. The fees will be computed, billed and payable
monthly.
C. Out-of-pocket expenses, including but not limited to those in
Section 5(d), and customary bank charges and offsets and
customized systems and technology charges, which will be computed,
billed and payable monthly.
D. Any discretionary out-of-pocket expenses exceeding $500 will require
prior Fund approval.
<PAGE>
B-4
MUTUAL FUNDS SERVICE AGREEMENT
SCHEDULE B
GENERAL DESCRIPTION OF FUND ADMINISTRATION SERVICES
I. Financial and Tax Reporting
A. Prepare management reports and Board of Trustees materials, such
as unaudited financial statements and summaries of dividends and
distributions.
B. Report Fund performance to outside services as directed by
Fund management.
C. Calculate dividend and capital gain distributions in accordance
with distribution policies detailed in the Fund's prospectus(es).
Assist Fund management in making final determinations of
distribution amounts.
D. Estimate and recommend year-end dividend and capital gain
distributions necessary to establish Fund's status as a regulated
investment company ("RIC") under Section 4982 of the Internal
Revenue Code of 1986, as amended (the "Code") regarding minimum
distribution requirements.
E. Working with the Fund's public accountants or other professionals,
prepare and file Fund's Federal tax return on Form 1120-RIC along
with all state and local tax returns where applicable. Prepare and
file Federal Excise Tax Return (Form 8613).
F. Prepare and file Fund's Form N-SAR with the SEC.
G. Prepare and coordinate printing of Fund's Semiannual and
Annual Reports to Shareholders.
H. In conjunction with transfer agent, notify shareholders as to what
portion, if any, of the distributions made by the Fund's during
the prior fiscal year were exempt-interest dividends under Section
852 (b)(5)(A) of the Code.
I. Provide Form 1099-MISC to persons other than corporations (i.e.,
Trustees [Directors]) to whom the Fund paid more than $600 during
the year.
J. Provide financial information for Fund proxies and prospectuses
(Expense Table).
<PAGE>
II. Portfolio Compliance
A. Assist with monitoring each Investment Fund's compliance with
investment restrictions (e.g., issuer or industry diversification,
etc.) listed in the current prospectus(es) and Statement(s) of
Additional Information, although primary responsibility for such
compliance shall remain with the Fund's investment adviser or
investment manager.
B. Assist with monitoring investment manager's compliance with Board
directives such as "Approved Issuers Listings for Repurchase
Agreements", Rule 17a-7, and Rule 12d-3 procedures, although
primary responsibility for such compliance shall remain with the
Fund's investment adviser or investment manager.
C. Mail quarterly requests for "Securities Transaction Reports" to
the Fund's Trustees and Officers and "access persons" under the
terms of the Fund's Code of Ethics and SEC regulations.
III. Regulatory Affairs and Corporate Governance
A. Prepare and file post-effective amendments to the Fund's
registration statement and supplements as needed.
B. Prepare and file proxy materials and administer shareholder
meetings.
C. Prepare and file all state registrations of the Fund's securities
including annual renewals; registering new funds, portfolios, or
classes; preparing and filing sales reports; filing copies of the
registration statement, prospectus and statement of additional
information; and increasing registered amounts of securities in
individual states.
D. Prepare Board materials for Board meetings.
E. Assist with the review and monitoring of fidelity bond and errors
and omissions insurance coverage and the submission of any related
regulatory filings.
F. Prepare and update documents such as charter document, by-laws,
and foreign qualification filings.
G. Provide support with respect to routine regulatory examinations or
investigations of the Fund.
H. File copies of financial reports to shareholders with the SEC
under Rule 30b2-1.
<PAGE>
IV. General Administration
A. Furnish officers of the Fund, subject to reasonable Board
approval.
B. Prepare fund, portfolio or class expense projections, establish
accruals and review on a periodic basis, including expenses based
on a percentage of average daily net assets (advisory and
administrative fees) and expenses based on actual charges
annualized and accrued daily (audit fees, registration fees,
directors' fees, etc.).
C. For new funds, portfolios and classes, obtain Employer or Taxpayer
Identification Number and CUSIP numbers, as necessary. Estimate
organizational costs and expenses and monitor against actual
disbursements.
D. Coordinate all communications and data collection with regard to
any regulatory examinations and yearly audits by independent
accountants.
<PAGE>
C-1
MUTUAL FUNDS SERVICE AGREEMENT
SCHEDULE C
DESCRIPTION OF FUND ACCOUNTING SERVICES
I. General Description
Chase shall provide the following accounting services to the Fund:
A. Maintenance of the books and records for the Fund's assets,
including records of all securities transactions.
B. Calculation of each funds', portfolios' or classes' Net Asset
Value in accordance with the Prospectus, and after the fund,
portfolio or class meets eligibility requirements, transmission to
NASDAQ and to such other entities as directed by the Fund.
C. Accounting for dividends and interest received and distributions
made by the Fund.
D. Coordinate with the Fund's independent auditors with respect to
the annual audit, and as otherwise requested by the Fund.
E. As mutually agreed upon, Chase will provide domestic and/or
international reports.
<PAGE>
D-3
MUTUAL FUNDS SERVICE AGREEMENT
SCHEDULE D
DESCRIPTION OF TRANSFER AGENCY SERVICES
The following is a general description of the transfer agency services
Chase shall provide to the Fund.
A. Shareholder Recordkeeping. Maintain records showing for each Fund
shareholder the following: (i) name, address, appropriate tax
certification and tax identifying number; (ii) number of shares of
each fund, portfolio or class; (iii) historical information
including, but not limited to, dividends paid, date and price of
all transactions including individual purchases and redemptions,
based upon appropriate supporting documents; and (iv) any dividend
reinvestment order, application, specific address, payment and
processing instructions and correspondence relating to the current
maintenance of the account.
B. Shareholder Issuance. Record the issuance of shares of each fund,
portfolio or class. Except as specifically agreed in writing
between Chase and the Fund, Chase shall have no obligation when
countersigning and issuing and/or crediting shares to take
cognizance of any other laws relating to the issue and sale of
such shares except insofar as policies and procedures of the Stock
Transfer Association recognize such laws.
C. Transfer, Purchase and Redemption Orders. Process all orders for
the transfer, purchase and redemption of shares of the Fund in
accordance with the Fund's current prospectus and customary
transfer agency policies and procedures, including electronic
transmissions which the Fund acknowledges it has authorized, or in
accordance with any instructions of the Fund or its agents which
Chase reasonably believes to be authorized.
D. Shareholder Communications. Transmit all communications by the
Fund to its shareholders promptly following the delivery by the
Fund of the material to be transmitted by mail, telephone, courier
service or electronically.
E. Proxy Materials. Assist with the mailing or transmission of proxy
materials, tabulating votes, and compiling and certifying voting
results. Services may include the provision of inspectors of
election at any meeting of shareholders.
<PAGE>
F. Share Certificates. If permitted by Fund policies, and if a
shareholder of the Fund requests a certificate representing
shares, Chase as Transfer Agent, will countersign and mail a share
certificate to the investor at his/her address as it appears on
the Fund's shareholder records.
G. Returned Checks. In the event that any check or other negotiable
instrument for the payment of shares is returned unpaid for any
reason, Chase will take such steps, as Chase may, in its
discretion, deem appropriate and notify the Fund of such action.
However, the Fund remains ultimately liable for any returned
checks or negotiable instruments of its shareholders.
H. Shareholder Correspondence. Acknowledge all correspondence from
shareholders relating to their share accounts and undertake such
other shareholder correspondence as may from time to time be
mutually agreed upon.
I. Tax Reporting. Chase shall issue appropriate shareholder tax
forms as required.
J. Dividend Disbursing. Chase will prepare and mail checks, place
wire transfers or credit income and capital gain payments to
shareholders. The Fund will advise Chase of the declaration of
any dividend or distribution and the record and payable date
thereof at least five (5) days prior to the record date. Chase
will, on or before the payment date of any such dividend or
distribution, notify the Fund's Custodian of the estimated amount
required to pay any portion of such dividend or distribution
payable in cash and on or before the payment date of such
distribution, the Fund will instruct its Custodian to make
available to Chase sufficient funds for the cash amount to be paid
out. If a shareholder is entitled to receive additional shares by
virtue of any such distribution or dividend, appropriate credits
will be made to each shareholder's account.
K. Escheatment. Chase shall provide escheatment services only with
respect to the escheatment laws of the Commonwealth of
Massachusetts, including those which relate to reciprocal
agreements with other states.
L. Telephone Services. Chase will provide staff coverage, training
and supervision in connection with the Fund's telephone line for
shareholder inquiries, and will respond to inquiries concerning
shareholder records, transactions processed by Chase, procedures
to effect the shareholder records and inquiries of a general
nature relative to shareholder services. All other telephone calls
will be referred to the Fund, as appropriate.
M. Fulfillment Services. As directed by the Fund, the Fund Adviser or
the Distributor, or upon the request of prospective shareholders
either by telephone or in writing, Chase will mail reasonable
quantities of prospectuses, applications to purchase shares, and
other information normally sent to prospective shareholders.
October 30, 1997
Renaissance Capital Greenwich Funds
325 Greenwich Avenue
Greenwich, CT 06830
Re: Renaissance Capital Greenwich Funds
Dear Madam/Sir:
We hereby consent to the reference to our firm as Counsel in this
Pre-effective Amendment No. 1 to the Registration Statement on Form N-1A.
Very Truly Yours,
_________/s/___________________
Kramer, Levin, Naftalis, & Frankel
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the references to our Firm in the Pre-Effective Amendment
to the Registration Statement on Form N-1A of The Renaissance Capital Greenwich
Funds.
_____________/s/________________
Tait, Weller, & Baker
Philadelphia, Pennsylvania
October 29, 1997
(..continued)
KL2:190040.1
FORM OF INVESTMENT LETTER
[____________ LETTERHEAD]
_________, 1997
Renaissance Capital Greenwich Funds
325 Greenwich Avenue
Greenwich, Conneticut 06830
Ladies/Gentlemen:
______________________ ("___") hereby offers to purchase
______ shares The IPO Plus Aftermarket Fund (the "Seed Capital Shares"). This
letter will confirm that ____ is purchasing the Seed Capital Shares for its own
account for investment purposes only and not with a view to reselling or
otherwise distributing such shares.
____ agrees and hereby undertakes that, in the event any of
the Seed Capital Shares are redeemed during the period of amortization of the
Fund's organizational expenses, the redemption proceeds will be reduced by any
unamortized organizational expenses in the same proportion as the number of Seed
Capital Shares being redeemed bears to the number of Seed Capital Shares
outstanding at the time of redemption.
Sincerely,
KL2:175835.1
FORM OF
RENAISSANCE CAPITAL GREENWICH FUNDS
DISTRIBUTION PLAN
<PAGE>
-5-
KL2:175835.1
This Distribution Plan (the "Plan") is adopted in accordance with Rule
12b-1 (the "Rule") under the Investment Company Act of 1940, as amended (the
"1940 Act"), by Renaissance Capital Greenwich Funds, a business trust organized
under the laws of the State of Delaware (the "Company"), on behalf of its Funds
(individually, a "Fund," and collectively, the "Funds") as set forth in Schedule
I, as amended from time to time, subject to the following terms and conditions:
Section 1. Annual Fees.
Distribution Fee. Each Fund will pay to the distributor of its shares,
_______________ (the "Distributor"), a distribution fee under the Plan at the
annual rate of 0.50% of the average daily net assets of the Fund (the
"Distribution Fee").
Adjustment to Fees. Any Fund may pay a Distribution Fee to the
Distributor at a lesser rate than the fees specified in Section 1 hereof as
agreed upon by the Board of Trustees and the Distributor and approved in the
manner specified in Section 3 of this Plan.
Payment of Fees. The Distribution Fees will be calculated daily and
paid monthly by each Fund at the annual rates indicated above.
Section 2. Expenses Covered by the Plan.
Distribution Fees may be used by the Distributor for: (a) costs of
printing and distributing a Fund's prospectus, statement of additional
information and reports to prospective investors in the Fund; (b) costs involved
in preparing, printing and distributing sales literature pertaining to a Fund;
(c) an allocation of overhead and other branch office distribution-related
expenses of the Distributor; (d) payments to persons who provide support
services in connection with the distribution of a Fund's shares, including but
not limited to, office space and equipment, telephone facilities, answering
routine inquiries regarding a Fund, processing shareholder transactions and
providing any other shareholder services not otherwise provided by a Fund's
transfer agent; (e) accruals for interest on the amount of the foregoing
expenses that exceed the Distribution Fee; and (f) any other expense primarily
intended to result in the sale of a Fund's shares, including, without
limitation, payments to salesmen and selling dealers who have entered into
selected dealer agreements with the Distributor, at the time of the sale of
shares, if applicable, and continuing fees to each such salesmen and selling
dealers, which fee shall begin to accrue immediately after the sale of such
shares.
The amount of the Distribution Fees payable by any Fund under Section 1
hereof is not related directly to expenses incurred by the Distributor and this
Section 2 does not obligate a Fund to reimburse the Distributor for such
expenses. The Distribution Fees set forth in Section 1 will be paid by a Fund to
the Distributor unless and until the Plan is terminated or not renewed with
respect to a Fund. Any distribution or service expenses incurred by the
Distributor on behalf of a Fund in excess of payments of the Distribution Fees
specified in Section 1 hereof which the Distributor has accrued through the
termination date are the sole responsibility and liability of the Distributor
and not an obligation of a Fund.
Section 3. Indirect Expenses.
While each Fund is authorized to make payments under this Plan to the
Fund's Distributor for expenses described above, it is expressly recognized that
each Fund presently pays, and will continue to pay, an investment advisory fee
to its Investment Adviser and an administration fee to the Administrator. To the
extent that any payments made by any Fund to the Investment Adviser or
Administrator, including payment of fees under the Investment Advisory Agreement
or the Administration Agreement, respectively, should be deemed to be indirect
financing of any activity primarily intended to result in the sale of shares of
the Portfolio within the context of Rule 12b-1 under the 1940 Act, then such
payments shall be deemed to be authorized by this Plan.
Section 4. Approval of Trustees.
Neither the Plan nor any related agreements will take effect until
approved by a majority of both (a) the full Board of Trustees of the Trust and
(b) those Trustees who are not interested persons of the Trust and who have no
direct or indirect financial interest in the operation of the Plan or in any
agreements related to it (the "Qualified Trustees"), cast in person at a meeting
called for the purpose of voting on the Plan and the related agreements.
Section 5. Continuance of the Plan.
The Plan will continue in effect until ___________, 1999, and
thereafter for successive twelve-month periods: provided, however, that such
continuance is specifically approved at least annually by the Trustees of the
Trust and by a majority of the Qualified Trustees.
Section 6. Termination.
The Plan may be terminated at any time with respect to a Fund (i) by
the Trust without payment of any penalty, by the vote of a majority of the
outstanding voting securities of any Fund or (ii) by a vote of the Qualified
Trustees. The Plan may remain in effect with respect to a Fund even if the Plan
has been terminated in accordance with this Section 5 with respect to any other
Fund.
Section 7. Amendments.
The Plan may not be amended with respect to any Fund so as to increase
materially the amounts of the fees described in Section 1 above, unless the
amendment is approved by a vote of the holders of at least a majority of the
outstanding voting securities of that Fund. No material amendment to the Plan
may be made unless approved by the Trust's Board of Trustees in the manner
described in Section 3 above.
Section 8. Selection of Certain Trustees.
While the Plan is in effect, the selection and nomination of the
Trust's Trustees who are not interested persons of the Trust will be committed
to the discretion of the Trustees then in office who are not interested persons
of the Trust.
Section 9. Written Reports.
In each year during which the Plan remains in effect, a person
authorized to direct the disposition of monies paid or payable by a Fund
pursuant to the Plan or any related agreement will prepare and furnish to the
Trust's Board of Trustees, and the Board will review, at least quarterly,
written reports complying with the requirements of the Rule which set out the
amounts expended under the Plan and the purposes for which those expenditures
were made.
Section 10. Preservation of Materials.
The Trust will preserve copies of the Plan, any agreement relating to
the Plan and any report made pursuant to Section 8 above, for a period of not
less than six years (the first two years in an easily accessible place) from the
date of the Plan, agreement or report.
Section 11. Meanings Or Certain Terms.
As used in the Plan, the terms "interested person" and "majority of the
outstanding voting securities" will be deemed to have the same meaning that
those terms have under the 1940 Act by the Securities and Exchange Commission.
<PAGE>
IN WITNESS WHEREOF, the Trust executed this Plan as of _________, 1997.
Renaissance Capital Greenwich Funds,
on behalf of each Fund listed
on Schedule I, individually
and not jointly
By: __________________
President
<PAGE>
SCHEDULE I
This Plan shall be adopted with respect to the following Funds of Renaissance
Capital Greenwich Funds:
The IPO Plus Aftermarket Fund
(..continued)
KL2:175840.1
FORM OF
SHAREHOLDER SERVICING AGREEMENT
Renaissance Capital Greenwich Funds
------------------
------------------------
To: _______________
We (the "Trust") wish to enter into this Servicing Agreement with you
concerning the provision of support services to your client ("Clients") who may
from time to time beneficially own shares ("Shares") of the Funds (the "Funds")
offered by us.
The terms and conditions of this Servicing Agreement are as follows:
Section 1. You agree to provide the following support services to
Clients who may from time to time beneficially own Shares:1 (i) answering
customer inquiries regarding account matters; (ii) assisting shareholders in
designating and changing various account options; (iii) aggregating and
processing purchase and redemption orders and transmitting and receiving funds
for shareholder orders; (iv) transmitting, on behalf of the Trust, proxy
statements, prospectuses and shareholder reports to shareholders and tabulating
proxies; (v) processing dividend payments and providing subaccounting services
for Fund shares held beneficially; and (vi) providing such other services as the
Trust or a shareholder may request to the extent you are permitted to do so
under applicable statutes, rules and regulations.
Section 2. You will provide such office space and equipment, telephone
facilities and personnel (which may be any part of the space, equipment and
facilities currently used in your business, or any personnel employed by you) as
may be reasonably necessary or beneficial in order to provide the aforementioned
services and assistance to Clients.
<PAGE>
Section 3. Neither you nor any of your officers, employees or agents
are authorized to make any representations concerning us or the Shares except
those contained in our then current prospectuses and statements of additional
information, copies of which will be supplied by us to you, or in such
supplemental literature or advertising as may be authorized by us in writing.
Section 4. For all purposes of this Agreement you will be deemed to be
an independent contractor, and will have no authority to act as agent for us in
any matter or in any respect. By your written acceptance of this Agreement, you
agree to and do release, indemnify and hold us harmless from and against any and
all direct or indirect liabilities or losses resulting from requests,
directions, actions, or inactions of or by you or your officers, employees or
agents regarding your responsibilities hereunder or the purchase, redemption,
transfer or registration of Shares (or orders relating to the same) by or on
behalf of Clients. You and your employees will, upon request, be available
during normal business hours to consult with us or our designees concerning the
performance of your responsibilities under this Agreement.
Section 5. In consideration of the services and facilities provided by
you hereunder, we will pay to you, and you will accept as full payment therefor,
a fee at the annual rate of ____ one-hundredths of one percent (.__%) of the
average daily net asset value of the shares beneficially owned by your Clients
for whom you are the dealer of record or holder of record or with whom you have
a servicing relationship (the "Clients' Shares"), which fee will be computed
daily (on the basis of 360-day year) and payable monthly. For purposes of
determining the fees payable under this Section 5, the average daily net asset
value of the Clients' Shares will be computed in the manner specified in our
Registration Statement (as the same is in effect from time to time) in
connection with the computation of the net asset value of Shares for purposes of
purchases and redemptions. By your written acceptance of this Agreement, you
agree to and do waive such portion of any fee payable to you hereunder to the
extent necessary to assure that such fee and other expenses required to be
accrued by us on any day with respect to the Clients' Share in any Fund that
declares its net investment income as a dividend to shareholders on a daily
basis does not exceed the income to be accrued by us to such Shares on that day.
The fee rate stated above may be prospectively increased or decreased by us, in
our sole discretion, at any time upon notice to you. Further, we may, in our
discretion and without notice, suspend or withdraw the sale of Shares, including
the sale of Shares to you for the account of any Client or Clients.
Section 6. Any person authorized to direct the disposition of monies
paid or payable by us pursuant to this Agreement will provide to our Board of
Trustees, and our trustees will review, at least quarterly, a written report of
the amounts so expended and the purposes for which such expenditures were made.
In addition, you will furnish us or our designees with such information as we or
they may reasonably request (including, without limitation, periodic
certifications confirming the provision to Clients of the services described
herein), and will otherwise cooperate with us and our designees (including,
without limitation, any auditors designated by us), in connection with the
preparation of reports to our Board of Trustees concerning this Agreement and
the monies paid or payable by us pursuant hereto, as well as any other reports
or filings that may be required by law.
Section 7. We may enter into other similar Servicing Agreements with
any other person or persons without your consent.
Section 8. By your written acceptance of this Agreement, you represent,
warrant and agree that: (i) the compensation payable to you in connection with
the investment of your Clients' assets in Shares will be disclosed by you to
your Clients, will be authorized by your Clients and will not be excessive; and
(ii) the services provided by you under this Agreement will in no event be
primarily intended to result in the sale of Shares.
Section 9. This Agreement will become effective on the date a fully
executed copy of this Agreement is received by us or our designee. Unless sooner
terminated, this Agreement will continue automatically for successive annual
periods provided such continuance is specifically approved at least annually by
us in the manner described in Section 12. This Agreement is terminable without
penalty at any time by us (which termination may be by a vote of a majority of
the Disinterested Trustees as defined in Section 12) or by you upon written
notice to the other party hereto.
Section 10. All notices and other communications to either you or us
will be duly given if mailed, telegraphed, telexed or transmitted by similar
telecommunication device to the appropriate address stated herein, or to such
other address as either party shall so provide the other.
Section 11. This Agreement will be construed in accordance with the
laws of the State of Delaware and is non-assignable by the parties hereto.
Section 12. This Agreement has been approved by vote of a majority of
(i) our Board of Trustees and (ii) those Trustees who are not "interested
persons" (as defined in the Investment Company Act of 1940) of us and have no
direct or indirect financial interest in this Agreement ("Disinterested
Trustees"), cast in person at a meeting called for the purpose of voting on such
approval.
Section 13. The names "Renaissance Capital Greenwich Funds" and the
"Board of Trustees" refer respectively to the Trust created and the Trustees, as
trustees but not individually or personally, acting from time to time under a
Certificate of Trust filed at the office of the State Secretary of the State of
Delaware on January 8, 1997. The obligations of "Renaissance Capital Greenwich
Funds" entered into in the name or on behalf thereof by any of the Trustees,
representatives or agents are made not individually but in such capacities, and
are not binding upon any of the Trustees, Shareholders or representatives of the
Trust personally, but bind only the Trust Property (as defined in the
Certificate of Trust), and all persons dealing with any class of Shares of ours
must look solely to the Trust Property belonging to such class for the
enforcement of any claims against us.
If you agree to be legally bound by the provisions of this Agreement,
please sign a copy of this letter where indicated below and promptly return it
to us, ______________________.
Very truly yours,
RENAISSANCE CAPITAL
GREENWICH FUNDS
Date: ____________________ By: ______________________
(Authorized Officer)
Title:
Accepted and Agreed to:
Date: ____________________ By: ______________________
(Authorized Officer)
Title:
<PAGE>
Schedule or Computation of Performance Quotations
Renaissance IPO Plus Aftermarket Fund
Exhibit 16
1. Average Annual Total Return
P (1+T) = ERV
Where: P = A hypothetical initial payment of $1,000
T = average annual total return
N = number of years
ERV = ending redeemable value at end of the period
