As filed with the Securities and Exchange Commission on June 30, 1997
Securities Act Registration No. 333-21089
Investment Company Act Registration No. 811-08043
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. 1
Post-Effective Amendment No. __
and
THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 1
___________________________________________________________
Berkshire Capital Investment Trust
(Exact Name of Registrant as Specified in Charter)
475 Milan Drive, #103
San Jose, CA 95134-2453
(Address of Principal Executive Offices)
(408) 526-0707
(Registrant's Telephone Number)
The Corporation Trust Company
1209 Orange Street
Wilmington, DE 19801
(Name and Address of Agent for Service)
___________________________________________________________
Approximate Date of Proposed Public Offering:
As soon as practicable after the Registration Statement becomes effective.
Calculation of Registration Fee Under the Securities Act of 1933
_____________________________________________________________________________
Proposed Proposed
Maximum Maximum Amount of
Title of Securities Amount Being Offering Price Aggregate Registration
Being Registered Registered Per Unit Offering Price Fee
_____________________________________________________________________________
Berkshire Capital *Indefinite $10.00 *Indefinite *$500
Growth & Value Fund
_____________________________________________________________________________
*Registrant hereby elects to register pursuant to Rule 24f-2 under the
Investment Company Act of 1940 an indefinite number of shares of Berkshire
Capital Growth & Value Fund, a series of Berkshire Capital Investment Trust.
Pursuant to Rule 24f-2, the registration fee payable with respect to such
election is $500.
The Registrant hereby amends this Registration Statement on such date or dates
that 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 this Registration Statement shall become
effective on such date as the Commission acting to section 8(a) may determine.
- i -
<PAGE>
<TABLE>
<CAPTION>
CROSS REFERENCE SHEET
INFORMATION REQUIRED CAPTIONS IN FILING
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<S> <C>
Part A: IN PROSPECTUS
Item 1. Cover Page Cover Page
Item 2. Synopsis Fund Expenses
Item 3. Condensed Financial Information Fund Expenses
Item 4. General Description of Registrant The Fund
Item 5. Management of the Fund Shareholders Meetings
Item 6. Capital Stock and other Securities Organization and Capital
Structure
Item 7. Purchase of Securities being Purchase of Shares and
Offered Reinvestment
Item 8. Redemption or Repurchase Redemption of Shares
Item 9. Legal Proceedings Litigation
Part B: STATEMENT OF ADDITIONAL INFORMATION
Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. General Information and History The Fund
Item 13. Investment Objectives and Policies Investment Objective
Item 14. Management of the Registrant Management of the Fund
Item 15. Control Persons and Principal Not Applicable
Holders of Securities
Item 16. Investment Advisory and Other Investment Adviser
Services
Item 17. Brokerage Allocation Brokerage
Item 18. Capital Stock and Other Securities Organization and Capital
Structure
Item 19. Purchase, Redemption and Pricing of Purchase of Shares and
Securities Being Offered Reinvestment
Item 19. Purchase, Redemption and Pricing of Redemption of Shares
Securities Being Offered
Item 19. Purchase, Redemption and Pricing of Pricing of Shares
Securities Being Offered
Item 20. Tax Status Tax Status
Item 21. Underwriters Not Applicable
Item 22. Calculation of Yield Quotations Not Applicable
of Money Market Funds
Item 23. Financial Statements Financial Statements
Part C: OTHER INFORMATION
Item 24. Financial Statements and Exhibits Financial Statements and
Exhibits
Item 25. Persons Controlled by/or under Control Persons
Common Control
Item 26. Number of Holders of Securities Number of Shareholders
Item 27. Indemnifications Indemnification
Item 28. Business and Other Connections Activities of Investment
of Adviser Adviser
Item 29. Principal Underwriters Principal Underwriter
Item 30. Location of Accounts and Records Location of Accounts and
Records
Item 31. Management Services Not Applicable
Item 32. Undertakings Undertakings
</TABLE>
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<PAGE>
BERKSHIRE CAPITAL GROWTH & VALUE FUND
475 Milan Drive, #103
San Jose, California 95134-2453
(408) 526-0707
PROSPECTUS July 1, 1997
THE FUND AND INVESTMENT OBJECTIVE
Berkshire Capital Growth & Value Fund (the "Fund") is a non-diversified series
of the Berkshire Capital Investment Trust (the "Trust"), an open-end
management investment company. The Trust was organized in Delaware as a
business trust and may offer shares of beneficial interest in a number of
separate series, each series representing a distinct fund with its own
investment objectives and policies. At present, there is only one series
authorized by the Trust, which series has been designated as the Berkshire
Capital Growth & Value Fund. The Fund's investment objective is to seek
long-term capital appreciation through investments in equity securities. The
Fund seeks to accomplish its objective by investing primarily in equities of
growth companies in sectors offering the potential for above average returns
and/or those companies which the Fund's adviser believes to be undervalued at
their current market price, resulting in the potential for capital
appreciation. Receipt of income is a secondary objective, as some investments
may yield dividends, interest or other income.
FUND SHARE PURCHASE
Capital shares of the Fund may be purchased directly at net asset value as
next determined after receipt of order. The Board of Trustees has established
$5,000 as the minimum initial purchase unless investing through the vehicle of
an Individual Retirement Account ("IRA"), in which case the minimum initial
investment is $2,000. Subsequent investments in the Fund must be at least
$500, or $200 for an IRA. Please see "Purchase of Shares and Reinvestment" in
this Prospectus for more information.
ADDITIONAL INFORMATION
This Prospectus, which should be held for future reference, is designed to set
forth concisely the information that you should know before you invest. A
"Statement of Additional Information" containing more information about the
Fund has been filed with the Securities and Exchange Commission. Such
Statement is dated July 1, 1997 and has been incorporated by reference into
the Prospectus. A copy of the Statement may be obtained without charge, by
writing to the Fund or by calling the telephone number shown above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
-1-
<PAGE>
FUND EXPENSES
Set forth below is a table containing information regarding the annual
expenses which may be incurred by the Fund. The purpose of this table is to
assist an investor in understanding the various costs and expenses that a
shareholder in the Fund will bear directly or indirectly.
Shareholder Transaction Expenses:
Sales Load Imposed on Purchases None
Sales Load Imposed on Reinvested Dividends None
Redemption Fees $10
Exchange Fees None
IRA Trustee Fees $20
Annualized Fund Operating Expenses:
Management Fees 1.50%
12b-1 Fees None
Other Expenses* 0.50%
----
Total Operating Expenses 2.00%
====
The Fund and the Investment Adviser may enter into arrangements with brokerage
firms and financial institutions under which shares of the Fund may be
purchased or sold. Investors may be charged a transaction fee if they effect
transactions in Fund shares through a broker or agent.
*Fees payable under the Administration Agreement between the Fund and the
Investment Adviser are fixed at 0.50% of the Fund's average daily net assets
up to $50 million, 0.45% of such assets from $50 million to $200 million,
0.40% of such assets from $200 million to $500 million, 0.35% of such assets
from $500 million to $1 billion, and 0.30% of such assets in excess of $1
billion.
___________________________________________________________
The following is an example that illustrates the expenses paid on a $1,000
investment over various time periods assuming (a) 5% annual rate of return and
(b) redemption at the end of each time period. This example should not be
considered a representation of past or future expenses or performance. Actual
expenses may be greater or less than those shown.
<TABLE>
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<S> <C> <C> <C>
1 Year 3 Years 5 Years 10 Years
------- -------- -------- ---------
$30 $73 $118 $243
</TABLE>
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<PAGE>
THE FUND
Berkshire Capital Growth & Value Fund is an open-end, non-diversified
portfolio of the Berkshire Capital Investment Trust. The Trust was organized
on November 25, 1996 as a Delaware business trust and is authorized to issue
an indefinite number of shares of beneficial interest. The Trust's registered
office is 1209 Orange Street, Wilmington, Delaware 19801. Mail may be
addressed to Trust's principal executive office at 475 Milan Drive, #103, San
Jose, California 95134-2453.
INVESTMENT OBJECTIVE
Berkshire Capital Growth & Value Fund has the primary objective of long-term
capital appreciation through investments in equity securities. The Fund seeks
to accomplish this objective by investing primarily in equities of growth
companies in sectors offering the potential for above-average returns and/or
those companies which the Fund's adviser believes to be undervalued at their
current market price, resulting in the potential for capital appreciation. In
selecting investments for the Fund, the adviser's primary emphasis is
typically on evaluating a company's management, growth prospects, business
operations, revenues, earnings, cash flows, and balance sheet in relationship
to its share price. Fundamental analysis by use of dividend and cash flow
discounting models are often employed to determine the intrinsic value of a
company and then compared to the current share price. Receipt of income is a
secondary objective, as some investments may yield dividends, interest or
other income.
RISK FACTORS
Generally: Risks associated with the Fund's performance will be those due to
broad market declines and business risks from difficulties which occur to
particular companies while in the Fund's portfolio. It must be realized, as is
true of almost all securities, there can be no assurance that the Fund will
obtain its ongoing objective of capital appreciation.
Non-Diversification: The Fund will be operated as a non-diversified investment
company and as such, the Fund's shares may be more susceptible to adverse
change in value than would be the shares of a diversified investment company.
Concentration: The Fund has adopted the fundamental policy concentrating at
least 25% of its assets in the equity securities of companies in the
electronic technology industry. Because of such policy, the Fund may be
subject to greater risk than that of a fund which is fully diversified among
many market sectors.
Inexperience of Investment Adviser: Berkshire Capital Holdings, Inc., the
Fund's investment adviser, does not have previous experience as an investment
adviser.
PORTFOLIO TURNOVER POLICY
The Fund does not propose to purchase securities for short-term trading in the
ordinary course of operations. Accordingly, it is expected that the annual
turnover rate will not exceed 50%, wherein turnover is computed by dividing
the lesser of the Fund's total purchases or sales of securities within the
period by the average monthly portfolio value of the Fund during such period.
There may be times when management deems it advisable to substantially alter
the composition of the portfolio, in which event, the portfolio turnover rate
might substantially exceed 50%; this would only result from special
circumstances and not from the Fund's normal operations.
-3-
<PAGE>
CONCENTRATION AND NON-DIVERSIFICATION POLICY
Concentration: The Fund will concentrate its investments in the equity
securities of companies in the electronic technology industry. Concentration
requires the Fund to invest 25% or more of the value of its total assets in
securities of issuers in a particular industry. Companies in the electronic
technology industry shall include businesses which are principally engaged in
the development, production, or distribution of products or services related
to the following business segments: Computers, Computer Peripherals,
Semiconductors, Software, Telecommunications and Mass Storage Devices. In some
future period or periods, due to adverse economic conditions in the electronic
technology industry, the Fund may temporarily have less than 25% of the value
of its assets invested in that industry. At such times the adviser may adopt a
temporary defensive posture and recommend the Fund invest in money market
instruments or U.S. Government securities. As a result of such concentration
in the electronic technology industry, the Fund's shares may fluctuate more
widely than the value of shares of a portfolio which invests in a broader
range of industries.
Non-Diversification: The Fund is classified as being non-diversified which
means that it may not invest more than 25% of its assets in the securities of
any one issuer and, with respect to 50% of its total assets, the Fund may not
invest more than 5% of its total assets in the securities of any one issuer.
Thus, the Fund may invest up to 25% of its total assets in the securities of
each of any two issuers. The Fund, therefore, may be more susceptible to risk
of loss than a more widely diversified fund as a result of a single economic,
political, or regulatory occurrence. The policy of the Fund, in the hope of
achieving its objective as stated above, is therefore one of selective
investments rather than broad diversification. The Fund seeks only enough
diversification for adequate representation among what it considers to be the
best performing securities and to maintain its federal non-taxable status
under Sub-Chapter M of the Internal Revenue Code.
TAX STATUS
Under the provisions of Sub-Chapter M of the Internal Revenue Code of 1986 as
amended, the Fund intends to pay out substantially all of its investment
income and realized capital gains. As a result, the Fund intends to be
relieved of federal income tax on the amounts distributed to shareholders. In
order to qualify as a "regulated investment company" under Sub-Chapter M, at
least 90% of the Fund's income must be derived from dividends, interest, and
gains from securities transactions. No more than 30% of the Fund's profits may
be derived from securities held less than three months and no more than 50% of
the Fund assets may be held in security holdings that exceed 5% of the total
assets of the Fund at time of purchase. Distribution of any net long-term
capital gains realized by the Fund will be taxable to the shareholder as
long-term capital gains regardless of the length of time Fund shares have been
held by the investor. All income realized by the Fund, including short-term
capital gains, will be taxable to the shareholder as ordinary income.
Dividends from net income will be made annually or more frequently at the
discretion of the Fund's Board of Trustees and will automatically be
reinvested in additional Fund shares at net asset value, unless shareholder
has elected to receive payment in the form of cash. Dividends received shortly
after purchase of shares by an investor will have the effect of reducing the
per share net asset value of the shares by the amount of such dividends or
distributions and, although in effect a return of capital, are subject to
federal income taxes.
The Fund is required by federal law to withhold 31% of reportable payments
(which may include dividends, capital gains, distributions and redemptions)
paid to shareholders who have not complied with IRS regulations. In order to
avoid this withholding requirement you must certify on the Shareholder
Purchase Application supplied by the Fund, that your Social Security or
Taxpayer Identification Number is correct and that you are not currently
subject to back-up withholding or otherwise certify that you are exempt from
back-up withholding.
-4-
<PAGE>
INVESTMENT RESTRICTIONS
The Fund has adopted the following fundamental investment restrictions. These
restrictions cannot be changed without approval by the holders of a majority
of the outstanding voting securities of the Fund. As defined in the Investment
Company Act of 1940 (the "Act"), the "vote of a majority of the outstanding
voting securities" means the lesser of the vote of (i) 67% of the shares of
the Fund at a meeting where more than 50% of the outstanding shares are
present in person or by proxy or (ii) more than 50% of the outstanding shares
of the Fund.
The Fund may not:
(a) Act as underwriter for securities of other issuers except insofar as the
Fund may be deemed an underwriter in selling its own portfolio securities.
(b) Borrow money or purchase securities on margin except for temporary or
emergency (not leveraging) purposes, including the meeting of redemption
requests that might otherwise require the untimely disposition of securities,
in an aggregate amount not exceeding 25% of the value of the Fund's total
assets at the time any borrowing is made. While the Fund's borrowings are in
excess of 5% of its total assets, the Fund will not purchase any additional
portfolio securities.
(c) Sell securities short.
(d) Invest in securities of other investment companies except as part of a
merger, consolidation, or purchase of assets approved by the Fund's
shareholders or by purchases with no more than 10% of the Fund's assets in the
open market involving only customary broker's commissions.
(e) Make investments in commodities, commodity contracts or real estate
although the Fund may purchase and sell securities of companies which deal in
real estate or interests therein.
(f) Make loans. The purchase of a portion of a readily marketable issue of
publicly distributed bonds, debentures or other debt securities will not be
considered the making of a loan.
(g) Acquire more than 10% of the securities of any class of another issuer,
treating all preferred securities of an issuer as a single class and all debt
securities as a single class, or acquire more than 10% of the voting
securities of another issuer.
(h) Invest in companies for the purpose of acquiring control.
(i) Purchase or retain securities of any issuer if those officers, directors
or trustees of the Fund or its Investment Adviser individually owns more than
1/2 of 1% of any class of security or collectively own more than 5% of such
class of securities of such issuer.
(j) Pledge, mortgage or hypothecate any of its assets.
(k) Invest in securities which may be subject to registration under the
Securities Act of 1933 prior to sale to the public or which are not at the
time of purchase readily saleable.
(l) Invest more than 10% of the total Fund assets, taken at market value at
the time of purchase, in securities of companies with less than three years'
continuous operation, including the operations of any predecessor.
(m) Issue senior securities.
(n) Acquire any securities of companies within one industry if, as a result of
such acquisition, more than 25% of the value of the Fund's total assets would
be invested in securities of companies within such industry; provided,
however, that there shall be no limitation on the purchase of securities of
companies in the electronic technology industry.
With respect to fundamental restriction (n) above, companies in the electronic
technology industry shall be defined as businesses which are principally
engaged in the development, production, or distribution of products or
services related to the following business segments: Computers, Computer
Peripherals, Semiconductors, Software, Telecommunications and Mass Storage
Devices.
-5-
<PAGE>
In connection with its investment objective and policies the Fund may,
however, invest in the following types of securities which can involve certain
risks:
U.S. Government Securities: The Fund may purchase securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities. Such
securities will typically include, without limitation, U.S. Treasury
securities such as Treasury Bills, Treasury Notes or Treasury Bonds that
differ in their interest rates, maturities and times of issuance.
Bank Obligations: The Fund may invest in bank obligations, including
certificates of deposit, time deposits, banker's acceptances and other
short-term obligations of banks, savings and loan associations and other
banking institutions.
Warrants: The Fund may purchase warrants, valued at the lower of cost or
market, but only to the extent that such purchase does not exceed 5% of the
Fund's net assets at the time of purchase. Included within that amount, but
not to exceed 2% of the Fund's net assets, may be warrants which are not
listed on the New York or American Stock Exchanges.
INVESTMENT ADVISER
The Fund retains Berkshire Capital Holdings, Inc., at 475 Milan Drive, #103,
San Jose, California 95134-2453, as its Investment Adviser. Berkshire Capital
Holdings, Inc. (the "Investment Adviser") is a California corporation founded
in February 1993. The company is registered as an Investment Adviser with the
Securities and Exchange Commission under the Investment Advisers Act of 1940.
The corporation is controlled and wholly owned by Malcolm R. Fobes III and Dr.
Ronald G. Seger. The Investment Adviser does not have any previous advising
experience.
Malcolm R. Fobes III has the direct responsibility for the overall strategic
management of the Fund's portfolio and its administration. Mr. Fobes founded
Berkshire Capital Holdings, Inc. in 1993, has served as Chairman of the Board
and Chief Executive Officer since the company's inception, and has been
responsible for the direction of the company's investments in both private and
publicly-held concerns. Mr. Fobes has a B.S. degree in Finance and a minor in
Economics from San Jose State University in California. In addition to
founding the company in 1993, Mr. Fobes was also simultaneously retained by
Adobe Systems, Inc., a high-technology software development firm, as a
technical support engineer from May 1991 to November 1994. Mr. Fobes has
served exclusively in the capacity of Chairman and Chief Executive Officer of
the Investment Adviser from November 1994 to present. Dr. Ronald G. Seger has
served as Secretary and member of the Board of Directors of the Investment
Adviser since September 1996. Both Mr. Fobes and Dr. Seger also serve as
Trustees to the Fund.
ADVISORY FEE
The Fund will be managed by Berkshire Capital Holdings, Inc. The Investment
Adviser will be paid a fee of 1.5% per year on the net assets of the Fund. All
fees are computed on the average daily closing net asset value of the Fund and
are payable monthly. Such fee is higher than the fee paid by most other funds.
Notwithstanding, the Investment Adviser may at its discretion, forgo
sufficient fees which would have the effect of lowering the Fund's expense
ratio and increasing the yield to shareholders.
FUND ADMINISTRATION
In addition to its fee for serving as the Fund's Investment Adviser, Berkshire
Capital Holdings, Inc. will receive a fee for serving as the Fund's
administrator. The fee will be paid monthly at an annual rate of 0.50% of the
Fund's average daily net assets up to $50 million, 0.45% of such assets from
$50 million to $200 million, 0.40% of such assets from $200 million to $500
million, 0.35% of such assets from $500 million to $1 billion, and 0.30% of
such assets in excess of $1 billion. For such fee, Berkshire Capital Holdings,
Inc. will act as the Fund's administrator, transfer agent, custodian, dividend
disbursing agent, shareholder servicing agent, and provide virtually all
customary services required for Fund operations.
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<PAGE>
ADVISORY AND ADMINISTRATION AGREEMENTS
On June 26, 1997 the shareholders of the Fund and the Board of Trustees
unanimously approved an investment advisory contract (the "Advisory
Agreement") and a separate administration contract (the "Administration
Agreement") with Berkshire Capital Holdings, Inc. The Advisory Agreement and
the Administration Agreement are effective through December 31, 1997.
Thereafter, both agreements may be continued for successive periods not to
exceed one year, provided that such continuance is specifically approved
annually by (a) the Fund's Board of Trustees or (b) vote of the holders of a
majority (as defined in the 1940 Act) of the outstanding voting securities of
the Fund. In either event, the continuance must be approved by a majority of
the Board of Trustees who are not "interested persons" of the Trust (as
defined by the 1940 Act) or the Investment Adviser, by vote cast in person at
a meeting called for the purpose of voting on such approval.
Under the Advisory Agreement, Berkshire Capital Holdings, Inc. will determine
what securities will be purchased, retained or sold by the Fund on the basis
of a continuous review of its portfolio. Mr. Fobes, will have the direct
responsibility of managing the composition of the Fund's portfolio in
accordance with the Fund's investment objective. Pursuant to its contract with
the Fund, the Investment Adviser is (i) required to render research,
statistical and advisory services to the Fund, (ii) make specific
recommendations based on the Fund's investment requirements, and (iii) pay
salaries of the Fund's employees who may be officers, directors or employees
of the Investment Adviser. Excepting these items, the Fund pays all other fees
and expenses incurred in conducting its business affairs. The Investment
Adviser has paid the initial organizational costs of the Fund and will
reimburse the Fund for any and all losses incurred because of purchase
reneges.
Under the Administration Agreement, the Investment Adviser will render all
administrative and supervisory services to the Fund. The Adviser will oversee
the maintenance of all books and records with respect to the Fund's securities
transactions and the Fund's book of accounts in accordance with all applicable
federal and state laws and regulations. The Adviser will also arrange for the
preservation of journals, ledgers, corporate documents, brokerage account
records and other records which are required pursuant to Rule 31a-1
promulgated under the 1940 Act. In accordance with the Administration
Agreement, the Adviser is also responsible for the equipment, staff, office
space and facilities necessary to perform its obligations. The Fund will
assume all other expenses except to the extent of those paid by the Adviser.
The Investment Adviser assumes and shall pay all ordinary expenses of the
Fund. Examples of such expenses include: (a) organizational costs, (b)
compensation of the Investment Adviser's personnel, (c) compensation of any of
the Fund's trustees, officers or employees who are not interested persons of
the Investment Adviser or its affiliates, (d) fees and expenses of registering
the Fund's shares under the federal securities laws and of qualifying its
shares under applicable state Blue Sky laws, including expenses attendant upon
renewing such registrations and qualifications, (e) insurance premiums, (f)
fidelity bonds, (g) accounting and bookkeeping costs and expenses necessary to
maintain the Fund's books and records, (h) outside auditing and ordinary legal
expenses, (i) all costs associated with shareholders meetings and the
preparation and dissemination of proxy solicitation materials, (j) costs of
printing and distribution of the Fund's Prospectus and other shareholder
information to existing shareholders, (k) charges, if any, of custodian and
dividend disbursing agent's fees, (l) industry association fees, and (m) costs
of independent pricing services and calculation of daily net asset value. The
Adviser may, at its discretion, assume any additional expenses ordinarily
assumed by the Fund when it determines that such action is in the best
interest of the shareholders. Any extraordinary and non-recurring expenses
shall be paid by the Fund.
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<PAGE>
The Investment Adviser may act as an investment adviser and administrator to
other persons, firms, or corporations (including investment companies), and
may have numerous advisory clients besides the Fund.
The Advisory Agreement and the Administration Agreement are terminable on 60
days' written notice, without penalty, by a vote of a majority of the Fund's
outstanding shares or by vote of a majority of the Fund's entire Board of
Trustees, or by the Investment Adviser on 60 days' written notice, and
automatically terminates in the event of its assignment.
MANAGEMENT OF THE FUND
The business of the Fund is managed under the direction of its Board of
Trustees in accordance with Section 3.2 of the Declaration of Trust of
Berkshire Capital Investment Trust, which Declaration of Trust has been filed
with the Securities and Exchange Commission and is available upon request.
Pursuant to Section 2.6 of the Declaration of Trust, the trustees shall elect
officers including a president, secretary and treasurer. The Board of Trustees
retains the power to conduct, operate and carry on the business of the Fund
and has the power to incur and pay any expenses which, in the opinion of the
Board of Trustees, are necessary or incidental to carry out any of the Fund's
purposes. The trustees, officers, employees and agents of the Fund, when
acting in such capacities, shall not be subject to any personal liability
except for his or her own bad faith, willful misfeasance, gross negligence or
reckless disregard of his or her duties. The trustees and officers, together
with their addresses, age, principal occupations during the past five years
and ownership of the Fund are as follows:
<TABLE>
<CAPTION>
Principal Occupation Fund Shares Percent
Name and Address Past 5 Years Owned 7/1/97 of Class
- ----------------------- --------------------------- ------------- --------
<S> <C> <C> <C>
*Malcolm R. Fobes III Trustee; 7,500 74.6%
475 Milan Drive, #103 President of the Trust;
San Jose, CA 95134 Chairman & CEO
Age: 32 Berkshire Capital Holdings, Inc.;
Technical Support Engineer
Adobe Systems, Inc.
*Dr. Ronald G. Seger Trustee; 2,500 24.8%
715 Glenborough Drive Secretary of the Trust;
Mountain View, CA 94041 Principal Owner
Age: 46 Optometrist Family Practice
**Leland F. Smith Trustee; 0 0%
#7 Rocky Mountain Lane Chairman & CEO
Sunriver, OR 97707 Corporate Asset Strategies, Inc.;
Age: 58 Chairman & CEO
Elesco, Ltd.
***Arthur J. Hopper Trustee; 0 0%
634 Orange Avenue Retired
Los Altos, CA 94022 Real Estate Broker
Age: 72
</TABLE>
*Trustees of the Fund who are considered "interested persons" as defined in
Section 2(a)(19) of the Investment Company Act of 1940 by virtue of their
affiliation with the Investment Adviser.
**Corporate Asset Strategies, Inc. provides consulting services in the field
of corporate real estate management.
***Arthur J. Hopper is the father-in-law to Malcolm R. Fobes III.
REMUNERATION OF OFFICERS AND TRUSTEES
The Fund does not intend to pay fees to the trustees until such time as the
Fund's assets exceed $2,500,000; although the Fund will reimburse trustees for
their expenses. The Fund does not compensate trustees affiliated with the
Investment Adviser except as they may benefit through payment of the Advisory
and Administrative fees.
-8-
<PAGE>
ORGANIZATION AND CAPITAL STRUCTURE
The Trust was organized on November 25, 1996 as a Delaware business trust and
is authorized to issue an unlimited number of shares of beneficial interest.
At present there is only one series authorized by the Trust, which series has
been designated as the Berkshire Capital Growth & Value Fund. The Board of
Trustees may authorize the creation of an additional series without
shareholder approval.
All shares, when issued, will be fully paid and non-assessable and will be
redeemable and freely transferable. All shares have equal voting rights and
can be issued as full or fractional shares. A fractional share has pro rata
the same kind of rights and privileges as a full share. The shares possess no
preemptive or conversion rights.
Each shareholder has one vote for each share held irrespective of the relative
net asset value of the shares. Each share has equal dividend, distribution and
liquidation rights. The voting rights of the shareholders are non-cumulative,
so that holders of more than 50% of the shares can elect all trustees being
elected. On some issues, such as election of trustees, all shares of the Fund
vote together as one series. In the event that the Trust authorizes additional
series of shares as separate funds, on issues affecting only a particular
fund, the shares of the affected fund will vote as a separate series. An
example of such an issue would be a fundamental investment restriction
pertaining to only one fund.
The Board of Trustees of the Trust is responsible for managing the business
and affairs of the Fund. The Board of Trustees consists of four members:
Malcolm R. Fobes III, Ronald G. Seger, Leland F. Smith and Arthur J. Hopper.
As of the date of this offering, all of the outstanding voting shares of the
Fund were owned by the following Trustees and other holders of beneficial
interest:
Holders of Interest Shares
---------------------- ------
Malcolm R. Fobes III* 7,500
Ronald G. Seger* 2,500
Senator Alan M. Cranston 50
*Malcolm R. Fobes III and Ronald G. Seger are considered control persons as
defined in Section 2(a)(9) of the Investment Company Act of 1940.
PURCHASE OF SHARES AND REINVESTMENT
The offering price of the shares offered by the Fund is at the Net Asset Value
("NAV") per share next determined after receipt of the purchase order by the
Fund and is computed in the manner described under the caption "Pricing of
Shares" in this Prospectus. The Fund reserves the right to terminate the
offering of the shares made by this Prospectus at any time and to refuse
purchase applications when, in the judgement of management, such termination
or refusal is in the best interests of the Fund. The Fund also reserves the
right to waive initial and subsequent investment minimums and to modify
investment minimums generally from time to time. The Fund does not intend to
issue share certificates to its shareholders whereby shares of the Fund shall
be considered "uncertificated securities" as defined under Rule 17f-1 of the
Securities Exchange Act of 1934. The Fund and the Investment Adviser may enter
into arrangements with brokerage firms and financial institutions under which
shares of the Fund may be purchased or sold. Investors may be charged a
transaction fee if they effect transactions in Fund shares through a broker or
agent.
Initial Investments: Initial purchase of shares of the Fund may be made by
application submitted to the Fund. For the convenience of investors, a Share
Purchase Application is provided with this Prospectus. The minimum initial
purchase of shares is $5,000 unless investing through the vehicle of an
Individual Retirement Account ("IRA"), in which case the minimum initial
investment is $2,000. Such initial investment amount is due and payable three
(3) business days after the purchase date. The Fund will be initially
registered in California and therefore restricted to California residents at
the time of purchase. There will be no solicitation out of the state of
California of potential shareholders until registration under the Blue Sky
laws of the state of residence have been met.
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<PAGE>
Subsequent Purchases: Subsequent purchases may be made by mail or by phone and
are due and payable three (3) business days after the purchase date. The
minimum is $500, or $200 for an IRA. Less may be accepted under special
circumstances.
Reinvestments: The Fund will automatically retain and reinvest dividends and
capital gains distributions and use same for the purchase of additional shares
for the shareholder at net asset value as of the close of business on the
distribution date. A shareholder may at any time by letter or forms supplied
by the Fund direct the Fund to pay dividends and/or capital gains
distributions, if any, to such shareholder in cash.
Fractional Shares: Full or fractional shares will be issued by the Fund.
Fractional shares will be issued to three decimal places as purchased from the
Fund. The Fund will maintain an account for each shareholder of shares for
which no certificates have been issued.
RETIREMENT PLANS
Generally: Shares of the Fund may be purchased directly by existing retirement
plans which allow for such investment. Self-employed individuals may purchase
shares through properly drafted Keogh plans covering the self-employed
individual or eligible employees. An investor should consult with a tax
adviser concerning the eligibility or establishment of such plans before
investing in shares of the Fund.
Individual Retirement Accounts: Certain individuals may be eligible to
establish an Individual Retirement Account (IRA) with the Fund if they meet
the applicable requirements of the Internal Revenue Code. Persons who earn
compensation and are not covered by a company retirement plan (and, if
married, your spouse is not covered by a company retirement plan) may
establish IRA accounts using Fund shares. Under such circumstances, annual
contributions by individuals, limited to the lesser of $2,000 or 100% of
compensation, are tax deductible from gross income. If you are married (filing
jointly) and each spouse establishes an IRA, each spouse may contribute up to
$2,000 to his or her IRA for a year as long as the combined compensation of
both spouses for the year is at least $4,000. Contributions to each spousal
account are fully deductible under the aforementioned guidelines. IRA
contributions may also be tax deductible for individual taxpayers and married
couples if covered by a company retirement plan as long as adjusted gross
incomes are within certain specified limits. All individuals may make
nondeductible IRA contributions to separate accounts. You may begin to make
non-penalty IRA withdrawals as early as age 59 1/2 or as late as 70 1/2. Most
withdrawals from an IRA account before age 59 1/2 are subject to a 10% penalty
tax in addition to regular income taxes. In certain situations, withdrawals
before age 59 1/2 are not subject to the 10% penalty. For example, in the
event of death or disability early withdrawals may be made without penalty.
Investors should consult their tax advisers to determine whether they are
qualified to take advantage of an IRA and whether an investment in the Fund
would be appropriate.
The Board of Trustees has selected Delaware Charter Guarantee & Trust Co. as
the Fund's trustee for qualified individuals who wish to establish an IRA
account funded with shares of the Fund. Although the Fund does not charge IRA
fees itself, there are fees charged by Delaware Charter Guarantee & Trust Co.
to open and maintain an IRA account. To establish an IRA account, all
prospective applicants are required to complete an IRA application for
Delaware Charter Guarantee & Trust Co. A disclosure statement describing the
general provisions of the IRA will be forwarded to all prospective applicants
as required by U.S. Treasury regulations. All IRAs may be revoked within seven
(7) days of their establishment with no penalty. For more information
regarding the establishment of an IRA account, please direct all inquiries to
the Fund at its principal office in San Jose, California.
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<PAGE>
PRICING OF SHARES
The net asset value of the Fund's shares is determined as of the close of
business of the New York Stock Exchange on each business day of which that
Exchange is open (presently 4:00 p.m.); Monday through Friday exclusive of
Washington's Birthday, Good Friday, Memorial Day, July 4th, Labor Day,
Thanksgiving, Christmas and New Year's Day. The price is determined by
dividing the value of its securities, plus any cash and other assets less all
liabilities, excluding capital surplus, by the number of shares outstanding.
The market value of securities listed on a national exchange is determined to
be the last recent sales price on such exchange. Listed securities that have
not recently traded and over-the-counter securities are valued at the last bid
price in such market. Short-term paper (debt obligations that mature in less
than 60 days) are valued at amortized cost which approximates market value.
Other assets are valued at fair market value as determined in good faith by
the Board of Trustees.
REDEMPTION OF SHARES
The Fund will redeem all or any portion of a shareholder's shares of the Fund
when requested in accordance with the procedures set forth below. Although the
Fund does not charge a redemption fee, there is a fee equal to that charged to
the Fund by the registered Transfer Agent for processing services, currently
$10 regardless of the number of shares redeemed.
All redemption requests should be made to the Fund at its principal office in
San Jose, California. The redemption price shall be the net asset value per
share next determined after notice in received by the Fund.
If By Mail: Send a written request, signed by all registered owners in the
exact names in which they appear on the account indicating the dollar amount
or number of shares to be redeemed. Redemption requests by corporations,
partnerships, trusts, estates, guardianships, custodial accounts and accounts
under court jurisdiction shall be accompanied with all supporting legal
documents if required by applicable law. To be in proper form, such redemption
requests shall be signed by an authorized officer and must indicate the
capacity in which the officer is acting.
If by Telephone: Shareholders who complete the Share Purchase Application
provided with this Prospectus may redeem shares of the Fund by telephone if
they have elected on the application to do so. The Fund will employ reasonable
procedures to confirm that all instructions given by telephone are genuine.
Such procedures shall include requiring the caller to provide personal and/or
account information for the purpose of establishing the caller's
identification and sending a confirmation statement on redemptions to the
address of record each time activity is initiated by telephone. As long as the
Fund's registered transfer agent follows instructions communicated by
telephone which were reasonably believed to be genuine at the time of receipt,
neither the Fund nor the registered transfer agent shall be liable for any
loss to the shareholder caused by an unauthorized transaction. In any instance
where the Fund's registered transfer agent is not reasonably satisfied that
instructions received by telephone are genuine, neither the Fund nor the
transfer agent shall be liable for any losses which may occur because of delay
in implementing a transaction.
Unless the shareholder is known to management, all signatures must be
guaranteed by an "eligible guarantor institution" as defined under Rule
17Ad-15 of the Securities Exchange Act of 1934. Generally, such institutions
include national or state banks, savings and loan associations, credit unions,
brokers and dealers which are members of a national securities exchange or a
clearing agency and maintain a net capital of at least $100,000, national
securities exchanges, registered securities associations, clearing agencies
and institutions that participate in the Securities Transfer Agent Medallion
Program ("STAMP") or other recognized signature guarantee medallion programs.
Such guarantees must be signed by an authorized signatory thereof with
"Signature Guaranteed" appearing along with the shareholder's signature. A
notarized signature will not be sufficient for the request to be in proper
form. Redemption requests by corporate and fiduciary shareholders must be
accompanied by appropriate documentation establishing authority of the person
seeking to act on behalf of the account.
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<PAGE>
The proceeds received by the shareholder may be more or less than his cost of
such shares, depending upon the net asset value per share at the time of
redemption. Any difference should be treated by the shareholder as a capital
gain or loss for federal income tax purposes.
Payment by the Fund will ordinarily be made within seven (7) business days
provided the shareholder has complied with all the aforementioned
requirements. However, if an investor has purchased Fund shares by check and
subsequently submits a redemption request, the redemption proceeds will not be
transmitted until the check used for investment has cleared, which may take up
to fifteen (15) days. The Fund may suspend the right of redemption or postpone
the date of payment if; the New York Stock Exchange is closed for other than
customary weekend or holiday closings, or when trading on the New York Stock
Exchange is restricted as determined by the Securities and Exchange Commission
or when the Commission has determined that an emergency exists, thereby making
disposal of fund securities or valuation of net assets not reasonably
practicable, or for such other periods as the Commission may permit. The Fund
intends to make payments in cash, however, if the Board of Trustees believes
that economic conditions exist which would make such practice detrimental to
the best interests of the Fund, redemption may be accomplished through
distribution of portfolio securities of the Fund. The Fund and the Investment
Adviser may enter into arrangements with brokerage firms and financial
institutions under which shares of the Fund may be purchased or sold.
Investors may be charged a transaction fee if they effect transactions in Fund
shares through a broker or agent.
BROKERAGE
The Fund requires all brokers to effect transactions in portfolio securities
in such a manner as to get prompt execution of the orders at the most
favorable price. Under the terms of the Advisory Agreement, the Adviser is
authorized to employ all brokers to execute orders for the purchase and sale
of portfolio securities on behalf of the Fund. The Adviser will use its best
judgement in determining which broker can provide the best net price and
execution. The selected broker shall be required to provide prompt and
reliable execution at a reasonably competitive price. The Adviser may select
brokers who, in addition to meeting primary requirements of execution and
price, may furnish statistical or other factual information and services,
which, in the opinion of management, will produce a direct benefit to the Fund
or assist the Adviser in carrying out its responsibilities to the Fund. Such
information and services shall include economic studies, industry studies,
statistical analysis, corporate reports and quotations necessary to determine
the value of the Fund's net assets. No effort is made to determine the value
of these services or the amount they might have reduced the expenses of the
Adviser. Other than as set forth above, the Fund has no fixed policy, formula,
method, or criteria which it uses in allocating brokerage business to firms
furnishing these materials and services. The Board of Trustees will evaluate
and review the reasonableness of brokerage commissions paid semiannually.
SHAREHOLDERS MEETINGS
Annual meetings of shareholders will not be held unless called by the
shareholders pursuant to Delaware Business Trust Act or unless required by the
1940 Act and the rules and regulations promulgated thereunder. Special
meetings of the shareholders may be held from time to time when called upon by
(i) the Chairman of the Board of Trustees, if one exists, the President and
two or more trustees, (ii) by one or more shareholders holding ten percent or
more of the shares entitled to vote on matters presented to the meeting, or
(iii) if the annual meeting is not held within any thirteen month period, upon
application of any shareholder, a court of competent jurisdiction may
summarily order that such meeting be held. In addition, the 1940 Act requires
a shareholder vote on all investment advisory contracts and amendments
thereto. Shareholder inquiries should be directed to the Fund's principal
office at 475 Milan Drive, #103, San Jose, California 95134-2453.
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<PAGE>
REPORTS TO SHAREHOLDERS
The Fund sends all shareholders annual reports containing audited financial
statements and other periodic reports, at least semiannually, containing
unaudited financial statements.
CUSTODIAN AND TRANSFER AGENT
The Fund acts as its own Custodian. Berkshire Capital Holdings, Inc. serves as
the Fund's Administrator, Registered Transfer Agent, Dividend Paying Agent and
Shareholder Servicing Agent.
AUDITORS
Meredith, Cardozo & Lanz LLP, independent certified public accountants, 97
South Second Street, Suite 100, San Jose, California 95113, have been selected
as the auditor of the Fund. Meredith, Cardozo & Lanz LLP has no direct or
indirect financial interest in the Fund or the Adviser.
LEGAL OPINION
The legality of the shares offered hereby have been passed upon by Hall &
Evans, L.L.C., 1200 Seventeenth Street, Suite 1700, Denver, Colorado
80202-5800.
LITIGATION
As of the date of this prospectus, there was no pending or threatened
litigation involving the Fund in any capacity whatsoever.
ADDITIONAL INFORMATION
This Prospectus omits certain information contained in the registration
statement on file with the Securities & Exchange Commission. The registration
statement may be inspected without charge at the principal office of the
Commission in Washington, D.C. and copies of all or part thereof may be
obtained upon payment of the fee prescribed by the Commission. Shareholders
may also direct inquiries to the Fund by phone or at the address given on
cover of this Prospectus.
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<PAGE>
INVESTMENT ADVISER
Berkshire Capital Holdings, Inc.
475 Milan Drive, #103
San Jose, California 95134-2453
INDEPENDENT AUDITORS
Meredith, Cardozo & Lanz LLP
97 South Second Street,
Suite 100,
San Jose, California 95113
LEGAL COUNSEL
Hall & Evans, L.L.C.
1200 Seventeenth Street,
Suite 1700,
Denver, Colorado 80202-5800
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
Fund Expenses 2
The Fund 3
Investment Objective 3
Risk Factors 3
Portfolio Turnover Policy 3
Concentration and Non-Diversification Policy 4
Tax Status 4
Investment Restrictions 5
Investment Adviser 6
Advisory Fee 6
Fund Administration 6
Advisory and Administration Agreements 7
Management of the Fund 8
Remuneration of Officers and Trustees 8
Organization and Capital Structure 9
Purchase of Shares and Reinvestment 9
Retirement Plans 10
Pricing of Shares 11
Redemption of Shares 11
Brokerage 12
Shareholders Meetings 12
Reports to Shareholders 13
Custodian and Transfer Agent 13
Auditors 13
Legal Opinion 13
Litigation 13
Additional Information 13
</TABLE>
PROSPECTUS
BERKSHIRE CAPITAL GROWTH & VALUE FUND
475 Milan Drive, #103
San Jose, California 95134-2453
(408) 526-0707
July 1, 1997
The Fund's investment objective is to seek long-term capital appreciation
through investments in equity securities. The Fund seeks to accomplish this
objective by investing primarily in equities of growth companies in sectors
offering the potential for above-average returns and/or those companies which
the Fund's adviser believes to be undervalued at their current market price,
resulting in the potential for capital appreciation. Receipt of income is a
secondary objective, as some investments may yield dividends, interest or
other income.
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<PAGE>
BERKSHIRE CAPITAL GROWTH & VALUE FUND
475 Milan Drive, #103
San Jose, California 95134-2453
(408) 526-0707
Part B
STATEMENT OF ADDITIONAL INFORMATION
July 1, 1997
This Statement of Additional Information is not a Prospectus, but is to be
read in conjunction with the Prospectus for Berkshire Capital Growth & Value
Fund dated July 1, 1997 (the "Prospectus"). To obtain the Prospectus, please
write or call the Fund at the address or phone number referenced above.
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
The Fund 2
Investment Objective 2
Risk Factors 2
Generally 2
Non-Diversification 2
Concentration 2
Inexperience of Investment Adviser 2
Portfolio Turnover Policy 2
Concentration and Non-Diversification Policy 3
Concentration 3
Non-Diversification 3
Tax Status 3
Investment Restrictions 4
Investment Adviser 5
Advisory Fee 5
Fund Administration 5
Advisory and Administration Agreements 6
Management of the Fund 7
Remuneration of Officers and Trustees 7
Organization and Capital Structure 8
Purchase of Shares and Reinvestment 8
Initial Investments 8
Subsequent Purchases 8
Reinvestments 8
Fractional Shares 8
Retirement Plans 9
Generally 9
Individual Retirement Account 9
Pricing of Shares 9
Redemption of Shares 9
Brokerage 11
Financial Statements 11
Miscellaneous Information 11
Appendix:
Independent Auditor's Report 1A
Statement of Assets & Liabilities 2A
Notes to Statement of Assets and Liabilities 2A
Organization and Significant Accounting Policies 2A
Related Party Transactions 3A
Capital Stock and Distribution 3A
</TABLE>
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<PAGE>
THE FUND
Berkshire Capital Growth & Value Fund (the "Fund") is an open-end,
non-diversified portfolio of the Berkshire Capital Investment Trust (the
"Trust"). The Trust was organized on November 25, 1996 as a Delaware business
trust and is authorized to issue an indefinite number of shares of beneficial
interest. The Trust's registered office is 1209 Orange Street, Wilmington,
Delaware 19801. Mail may be addressed to Trust's principal executive office at
475 Milan Drive, #103, San Jose, California 95134-2453.
INVESTMENT OBJECTIVE
Berkshire Capital Growth & Value Fund has the primary objective of long-term
capital appreciation through investments in equity securities. The Fund seeks
to accomplish this objective by investing primarily in equities of growth
companies in sectors offering the potential for above-average returns and/or
those companies which the Fund's adviser believes to be undervalued at their
current market price, resulting in the potential for capital appreciation. In
selecting investments for the Fund, the adviser's primary emphasis is
typically on evaluating a company's management, growth prospects, business
operations, revenues, earnings, cash flows, and balance sheet in relationship
to its share price. Fundamental analysis by use of dividend and cash flow
discounting models are often employed to determine the intrinsic value of a
company and then compared to the current share price. Receipt of income is a
secondary objective, as some investments may yield dividends, interest or
other income.
RISK FACTORS
Generally: Risks associated with the Fund's performance will be those due to
broad market declines and business risks from difficulties which occur to
particular companies while in the Fund's portfolio. It must be realized, as is
true of almost all securities, there can be no assurance that the Fund will
obtain its ongoing objective of capital appreciation.
Non-Diversification: The Fund will be operated as a non-diversified investment
company and as such, the Fund's shares may be more susceptible to adverse
change in value than would be the shares of a diversified investment company.
Concentration: The Fund has adopted the fundamental policy of concentrating at
least 25% of its assets in the equity securities of companies in the
electronic technology industry. Because of such policy, the Fund may be
subject to greater risk than that of a fund which is fully diversified among
many market sectors.
Inexperience of Investment Adviser: Berkshire Capital Holdings, Inc., the
Fund's investment adviser, does not have previous experience as an investment
adviser.
PORTFOLIO TURNOVER POLICY
The Fund does not propose to purchase securities for short-term trading in the
ordinary course of operations. Accordingly, it is expected that the annual
turnover rate will not exceed 50%, wherein turnover is computed by dividing
the lesser of the Fund's total purchases or sales of securities within the
period by the average monthly portfolio value of the Fund during such period.
There may be times when management deems it advisable to substantially alter
the composition of the portfolio, in which event, the portfolio turnover rate
might substantially exceed 50%; this would only result from special
circumstances and not from the Fund's normal operations.
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<PAGE>
CONCENTRATION AND NON-DIVERSIFICATION POLICY
Concentration: The Fund will concentrate its investments in the equity
securities of companies in the electronic technology industry. Concentration
requires the Fund to invest 25% or more of the value of its total assets in
securities of issuers in a particular industry. Companies in the electronic
technology industry shall include businesses which are principally engaged in
the development, production, or distribution of products or services related
to the following business segments: Computers, Computer Peripherals,
Semiconductors, Software, Telecommunications and Mass Storage Devices. In some
future period or periods, due to adverse economic conditions in the electronic
technology industry, the Fund may temporarily have less than 25% of the value
of its assets invested in that industry. At such times the adviser may adopt a
temporary defensive posture and recommend the Fund invest in money market
instruments or U.S. Government securities. As a result of such concentration
in the electronic technology industry, the Fund's shares may fluctuate more
widely than the value of shares of a portfolio which invests in a broader
range of industries.
Non-Diversification: The Fund is classified as being non-diversified which
means that it may not invest more than 25% of its assets in the securities of
any one issuer and, with respect to 50% of its total assets, the Fund may not
invest more than 5% of its total assets in the securities of any one issuer.
Thus, the Fund may invest up to 25% of its total assets in the securities of
each of any two issuers. The Fund, therefore, may be more susceptible to risk
of loss than a more widely diversified fund as a result of a single economic,
political, or regulatory occurrence. The policy of the Fund, in the hope of
achieving its objective as stated above, is therefore one of selective
investments rather than broad diversification. The Fund seeks only enough
diversification for adequate representation among what it considers to be the
best performing securities and to maintain its federal non-taxable status
under Sub-Chapter M of the Internal Revenue Code.
TAX STATUS
Under the provisions of Sub-Chapter M of the Internal Revenue Code of 1986 as
amended, the Fund intends to pay out substantially all of its investment
income and realized capital gains. As a result, the Fund intends to be
relieved of federal income tax on the amounts distributed to shareholders. In
order to qualify as a "regulated investment company" under Sub-Chapter M, at
least 90% of the Fund's income must be derived from dividends, interest, and
gains from securities transactions. No more than 30% of the Fund's profits may
be derived from securities held less than three months and no more than 50% of
the Fund assets may be held in security holdings that exceed 5% of the total
assets of the Fund at time of purchase. Distribution of any net long-term
capital gains realized by the Fund will be taxable to the shareholder as
long-term capital gains regardless of the length of time Fund shares have been
held by the investor. All income realized by the Fund, including short-term
capital gains, will be taxable to the shareholder as ordinary income.
Dividends from net income will be made annually or more frequently at the
discretion of the Fund's Board of Trustees and will automatically be
reinvested in additional Fund shares at net asset value, unless shareholder
has elected to receive payment in the form of cash. Dividends received shortly
after purchase of shares by an investor will have the effect of reducing the
per share net asset value of the shares by the amount of such dividends or
distributions and, although in effect a return of capital, are subject to
federal income taxes.
The Fund is required by federal law to withhold 31% of reportable payments
(which may include dividends, capital gains, distributions and redemptions)
paid to shareholders who have not complied with IRS regulations. In order to
avoid this withholding requirement you must certify on the Shareholder
Purchase Application supplied by the Fund, that your Social Security or
Taxpayer Identification Number is correct and that you are not currently
subject to back-up withholding or otherwise certify that you are exempt from
back-up withholding.
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<PAGE>
INVESTMENT RESTRICTIONS
The Fund has adopted the following fundamental investment restrictions. These
restrictions cannot be changed without approval by the holders of a majority
of the outstanding voting securities of the Fund. As defined in the Investment
Company Act of 1940 (the "Act"), the "vote of a majority of the outstanding
voting securities" means the lesser of the vote of (i) 67% of the shares of
the Fund at a meeting where more than 50% of the outstanding shares are
present in person or by proxy or (ii) more than 50% of the outstanding shares
of the Fund.
The Fund may not:
(a) Act as underwriter for securities of other issuers except insofar as the
Fund may be deemed an underwriter in selling its own portfolio securities.
(b) Borrow money or purchase securities on margin except for temporary or
emergency (not leveraging) purposes, including the meeting of redemption
requests that might otherwise require the untimely disposition of securities,
in an aggregate amount not exceeding 25% of the value of the Fund's total
assets at the time any borrowing is made. While the Fund's borrowings are in
excess of 5% of its total assets, the Fund will not purchase any additional
portfolio securities.
(c) Sell securities short.
(d) Invest in securities of other investment companies except as part of a
merger, consolidation, or purchase of assets approved by the Fund's
shareholders or by purchases with no more than 10% of the Fund's assets in the
open market involving only customary broker's commissions.
(e) Make investments in commodities, commodity contracts or real estate
although the Fund may purchase and sell securities of companies which deal in
real estate or interests therein.
(f) Make loans. The purchase of a portion of a readily marketable issue of
publicly distributed bonds, debentures or other debt securities will not be
considered the making of a loan.
(g) Acquire more than 10% of the securities of any class of another issuer,
treating all preferred securities of an issuer as a single class and all debt
securities as a single class, or acquire more than 10% of the voting
securities of another issuer.
(h) Invest in companies for the purpose of acquiring control.
(i) Purchase or retain securities of any issuer if those officers, directors
or trustees of the Fund or its Investment Adviser individually owns more than
1/2 of 1% of any class of security or collectively own more than 5% of such
class of securities of such issuer.
(j) Pledge, mortgage or hypothecate any of its assets.
(k) Invest in securities which may be subject to registration under the
Securities Act of 1933 prior to sale to the public or which are not at the
time of purchase readily saleable.
(l) Invest more than 10% of the total Fund assets, taken at market value at
the time of purchase, in securities of companies with less than three years'
continuous operation, including the operations of any predecessor.
(m) Issue senior securities.
(n) Acquire any securities of companies within one industry if, as a result of
such acquisition, more than 25% of the value of the Fund's total assets would
be invested in securities of companies within such industry; provided,
however, that there shall be no limitation on the purchase of securities of
companies in the electronic technology industry.
With respect to fundamental restriction (n) above, companies in the electronic
technology industry shall be defined as businesses which are principally
engaged in the development, production, or distribution of products or
services related to the following business segments: Computers, Computer
Peripherals, Semiconductors, Software, Telecommunications and Mass Storage
Devices.
-4-
<PAGE>
In connection with its investment objective and policies the Fund may,
however, invest in the following types of securities which can involve certain
risks:
U.S. Government Securities: The Fund may purchase securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities. Such
securities will typically include, without limitation, U.S. Treasury
securities such as Treasury Bills, Treasury Notes or Treasury Bonds that
differ in their interest rates, maturities and times of issuance.
Bank Obligations: The Fund may invest in bank obligations, including
certificates of deposit, time deposits, banker's acceptances and other
short-term obligations of banks, savings and loan associations and other
banking institutions.
Warrants: The Fund may purchase warrants, valued at the lower of cost or
market, but only to the extent that such purchase does not exceed 5% of the
Fund's net assets at the time of purchase. Included within that amount, but
not to exceed 2% of the Fund's net assets, may be warrants which are not
listed on the New York or American Stock Exchanges.
INVESTMENT ADVISER
The Fund retains Berkshire Capital Holdings, Inc., at 475 Milan Drive, #103,
San Jose, California 95134-2453, as its Investment Adviser. Berkshire Capital
Holdings, Inc. (the "Investment Adviser") is a California corporation founded
in February 1993. The company is registered as an Investment Adviser with the
Securities and Exchange Commission under the Investment Advisers Act of 1940.
The corporation is controlled and wholly owned by Malcolm R. Fobes III and Dr.
Ronald G. Seger. The Investment Adviser does not have any previous advising
experience.
Malcolm R. Fobes III has the direct responsibility for the overall strategic
management of the Fund's portfolio and its administration. Mr. Fobes founded
Berkshire Capital Holdings, Inc. in 1993, has served as Chairman of the Board
and Chief Executive Officer since the company's inception, and has been
responsible for the direction of the company's investments in both private and
publicly-held concerns. Mr. Fobes has a B.S. degree in Finance and a minor in
Economics from San Jose State University in California. In addition to
founding the company in 1993, Mr. Fobes was also simultaneously retained by
Adobe Systems, Inc., a high-technology software development firm, as a
technical support engineer from May 1991 to November 1994. Mr. Fobes has
served exclusively in the capacity of Chairman and Chief Executive Officer of
the Investment Adviser from November 1994 to present. Dr. Ronald G. Seger has
served as Secretary and member of the Board of Directors of the Investment
Adviser since September 1996. Both Mr. Fobes and Dr. Seger also serve as
Trustees to the Fund.
ADVISORY FEE
The Fund will be managed by Berkshire Capital Holdings, Inc. The Investment
Adviser will be paid a fee of 1.5% per year on the net assets of the Fund. All
fees are computed on the average daily closing net asset value of the Fund and
are payable monthly. Such fee is higher than the fee paid by most other funds.
Notwithstanding, the Investment Adviser may at its discretion, forgo
sufficient fees which would have the effect of lowering the Fund's expense
ratio and increasing the yield to shareholders.
FUND ADMINISTRATION
In addition to its fee for serving as the Fund's Investment Adviser, Berkshire
Capital Holdings, Inc. will receive a fee for serving as the Fund's
administrator. The fee will be paid monthly at an annual rate of 0.50% of the
Fund's average daily net assets up to $50 million, 0.45% of such assets from
$50 million to $200 million, 0.40% of such assets from $200 million to $500
million, 0.35% of such assets from $500 million to $1 billion, and 0.30% of
such assets in excess of $1 billion. For such fee, Berkshire Capital Holdings,
Inc. will act as the Fund's administrator, transfer agent, custodian, dividend
disbursing agent, shareholder servicing agent, and provide virtually all
customary services required for Fund operations.
-5-
<PAGE>
ADVISORY AND ADMINISTRATION AGREEMENTS
On June 26, 1997 the shareholders of the Fund and the Board of Trustees
unanimously approved an investment advisory contract (the "Advisory
Agreement") and a separate administration contract (the "Administration
Agreement") with Berkshire Capital Holdings, Inc. The Advisory Agreement and
the Administration Agreement are effective through December 31, 1997.
Thereafter, both agreements may be continued for successive periods not to
exceed one year, provided that such continuance is specifically approved
annually by (a) the Fund's Board of Trustees or (b) vote of the holders of a
majority (as defined in the 1940 Act) of the outstanding voting securities of
the Fund. In either event, the continuance must be approved by a majority of
the Board of Trustees who are not "interested persons" of the Trust (as
defined by the 1940 Act) or the Investment Adviser, by vote cast in person at
a meeting called for the purpose of voting on such approval.
Under the Advisory Agreement, Berkshire Capital Holdings, Inc. will determine
what securities will be purchased, retained or sold by the Fund on the basis
of a continuous review of its portfolio. Mr. Fobes, will have the direct
responsibility of managing the composition of the Fund's portfolio in
accordance with the Fund's investment objective. Pursuant to its contract with
the Fund, the Investment Adviser is (i) required to render research,
statistical and advisory services to the Fund, (ii) make specific
recommendations based on the Fund's investment requirements, and (iii) pay
salaries of the Fund's employees who may be officers, directors or employees
of the Investment Adviser. Excepting these items, the Fund pays all other fees
and expenses incurred in conducting its business affairs. The Investment
Adviser has paid the initial organizational costs of the Fund and will
reimburse the Fund for any and all losses incurred because of purchase
reneges.
Under the Administration Agreement, the Investment Adviser will render all
administrative and supervisory services to the Fund. The Adviser will oversee
the maintenance of all books and records with respect to the Fund's securities
transactions and the Fund's book of accounts in accordance with all applicable
federal and state laws and regulations. The Adviser will also arrange for the
preservation of journals, ledgers, corporate documents, brokerage account
records and other records which are required pursuant to Rule 31a-1
promulgated under the 1940 Act. In accordance with the Administration
Agreement, the Adviser is also responsible for the equipment, staff, office
space and facilities necessary to perform its obligations. The Fund will
assume all other expenses except to the extent of those paid by the Adviser.
The Investment Adviser assumes and shall pay all ordinary expenses of the
Fund. Examples of such expenses include: (a) organizational costs, (b)
compensation of the Investment Adviser's personnel, (c) compensation of any of
the Fund's trustees, officers or employees who are not interested persons of
the Investment Adviser or its affiliates, (d) fees and expenses of registering
the Fund's shares under the federal securities laws and of qualifying its
shares under applicable state Blue Sky laws, including expenses attendant upon
renewing such registrations and qualifications, (e) insurance premiums, (f)
fidelity bonds, (g) accounting and bookkeeping costs and expenses necessary to
maintain the Fund's books and records, (h) outside auditing and ordinary legal
expenses, (i) all costs associated with shareholders meetings and the
preparation and dissemination of proxy solicitation materials, (j) costs of
printing and distribution of the Fund's Prospectus and other shareholder
information to existing shareholders, (k) charges, if any, of custodian and
dividend disbursing agent's fees, (l) industry association fees, and (m) costs
of independent pricing services and calculation of daily net asset value. The
Adviser may, at its discretion, assume any additional expenses ordinarily
assumed by the Fund when it determines that such action is in the best
interest of the shareholders. Any extraordinary and non-recurring expenses
shall be paid by the Fund.
-6-
<PAGE>
The Investment Adviser may act as an investment adviser and administrator to
other persons, firms, or corporations (including investment companies), and
may have numerous advisory clients besides the Fund.
The Advisory Contract and the Administration Agreement are terminable on 60
days' written notice, without penalty, by a vote of a majority of the Fund's
outstanding shares or by vote of a majority of the Fund's entire Board of
Trustees, or by the Investment Adviser on 60 days' written notice, and
automatically terminates in the event of its assignment.
MANAGEMENT OF THE FUND
The business of the Fund is managed under the direction of its Board of
Trustees in accordance with Section 3.2 of the Declaration of Trust of
Berkshire Capital Investment Trust, which Declaration of Trust has been filed
with the Securities and Exchange Commission and is available upon request.
Pursuant to Section 2.6 of the Declaration of Trust, the trustees shall elect
officers including a president, secretary and treasurer. The Board of Trustees
retains the power to conduct, operate and carry on the business of the Fund
and has the power to incur and pay any expenses which, in the opinion of the
Board of Trustees, are necessary or incidental to carry out any of the Fund's
purposes. The trustees, officers, employees and agents of the Fund, when
acting in such capacities, shall not be subject to any personal liability
except for his or her own bad faith, willful misfeasance, gross negligence or
reckless disregard of his or her duties. The trustees and officers, together
with their addresses, age, principal occupations during the past five years
and ownership of the Fund are as follows:
<TABLE>
<CAPTION>
Principal Occupation Fund Shares Percent
Name and Address Past 5 Years Owned 7/1/97 of Class
- ----------------------- --------------------------- ------------- --------
<S> <C> <C> <C>
*Malcolm R. Fobes III Trustee; 7,500 74.6%
475 Milan Drive, #103 President of the Trust;
San Jose, CA 95134 Chairman & CEO
Age: 32 Berkshire Capital Holdings, Inc.;
Technical Support Engineer
Adobe Systems, Inc.
*Dr. Ronald G. Seger Trustee; 2,500 24.8%
715 Glenborough Drive Secretary of the Trust;
Mountain View, CA 94041 Principal Owner
Age: 46 Optometrist Family Practice
**Leland F. Smith Trustee; 0 0%
#7 Rocky Mountain Lane Chairman & CEO
Sunriver, OR 97707 Corporate Asset Strategies, Inc.;
Age: 58 Chairman & CEO
Elesco, Ltd.
***Arthur J. Hopper Trustee; 0 0%
634 Orange Avenue Retired
Los Altos, CA 94022 Real Estate Broker
Age: 72
</TABLE>
*Trustees of the Fund who are considered "interested persons" as defined in
Section 2(a)(19) of the Investment Company Act of 1940 by virtue of their
affiliation with the Investment Adviser.
**Corporate Asset Strategies, Inc. provides consulting services in the field
of corporate real estate management.
***Arthur J. Hopper is the father-in-law to Malcolm R. Fobes III.
REMUNERATION OF OFFICERS AND TRUSTEES
The Fund does not intend to pay fees to the trustees until such time as the
Fund's assets exceed $2,500,000; although the Fund will reimburse trustees for
their expenses. The Fund does not compensate trustees affiliated with the
Investment Adviser except as they may benefit through payment of the Advisory
and Administrative fees.
-7-
<PAGE>
ORGANIZATION AND CAPITAL STRUCTURE
The Trust was organized on November 25, 1996 as a Delaware business trust and
is authorized to issue an unlimited number of shares of beneficial interest.
At present there is only one series authorized by the Trust, which series has
been designated as the Berkshire Capital Growth & Value Fund. The Board of
Trustees may authorize the creation of an additional series without
shareholder approval.
All shares, when issued, will be fully paid and non-assessable and will be
redeemable and freely transferable. All shares have equal voting rights and
can be issued as full or fractional shares. A fractional share has pro rata
the same kind of rights and privileges as a full share. The shares possess no
preemptive or conversion rights.
Each shareholder has one vote for each share held irrespective of the relative
net asset value of the shares. Each share has equal dividend, distribution and
liquidation rights. The voting rights of the shareholders are non-cumulative,
so that holders of more than 50% of the shares can elect all trustees being
elected. On some issues, such as election of trustees, all shares of the Fund
vote together as one series. In the event that the Trust authorizes additional
series of shares as separate funds, on issues affecting only a particular
fund, the shares of the affected fund will vote as a separate series. An
example of such an issue would be a fundamental investment restriction
pertaining to only one fund.
The Board of Trustees of the Trust is responsible for managing the business
and affairs of the Fund. The Board of Trustees consists of four members:
Malcolm R. Fobes III, Ronald G. Seger, Leland F. Smith and Arthur J. Hopper.
As of the date of this offering, all of the outstanding voting shares of the
Fund were owned by the following Trustees and other holders of beneficial
interest:
Holders of Interest Shares
---------------------- ------
Malcolm R. Fobes III* 7,500
Ronald G. Seger* 2,500
Senator Alan M. Cranston 50
*Malcolm R. Fobes III and Ronald G. Seger are considered control persons as
defined in Section 2(a)(9) of the Investment Company Act of 1940.
PURCHASE OF SHARES AND REINVESTMENT
The offering price of the shares offered by the Fund is at the Net Asset Value
("NAV") per share next determined after receipt of the purchase order by the
Fund and is computed in the manner described under the caption "Pricing of
Shares" in this Prospectus. The Fund reserves the right to terminate the
offering of the shares made by this Prospectus at any time and to refuse
purchase applications when, in the judgement of management, such termination
or refusal is in the best interests of the Fund. The Fund also reserves the
right to waive initial and subsequent investment minimums and to modify
investment minimums generally from time to time. The Fund does not intend to
issue share certificates to its shareholders whereby shares of the Fund shall
be considered "uncertificated securities" as defined under Rule 17f-1 of the
Securities Exchange Act of 1934. The Fund and the Investment Adviser may enter
into arrangements with brokerage firms and financial institutions under which
shares of the Fund may be purchased or sold. Investors may be charged a
transaction fee if they effect transactions in Fund shares through a broker or
agent.
Initial Investments: Initial purchase of shares of the Fund may be made by
application submitted to the Fund. For the convenience of investors, a Share
Purchase Application is provided with the Prospectus. The minimum initial
purchase of shares is $5,000 unless investing through the vehicle of an
Individual Retirement Account ("IRA"), in which case the minimum initial
investment is $2,000. Such initial investment amount is due and payable three
(3) business days after the purchase date. The Fund will be initially
registered in California and therefore restricted to California residents at
the time of purchase. There will be no solicitation out of the state of
California of potential shareholders until registration under the Blue Sky
laws of the state of residence have been met.
Subsequent Purchases: Subsequent purchases may be made by mail or by phone and
are due and payable three (3) business days after the purchase date. The
minimum is $500, or $200 for an IRA. Less may be accepted under special
circumstances.
Reinvestments: The Fund will automatically retain and reinvest dividends and
capital gains distributions and use same for the purchase of additional shares
for the shareholder at net asset value as of the close of business on the
distribution date. A shareholder may at any time by letter or forms supplied
by the Fund direct the Fund to pay dividends and/or capital gains
distributions, if any, to such shareholder in cash.
Fractional Shares: Full or fractional shares will be issued by the Fund.
Fractional shares will be issued to three decimal places as purchased from the
Fund. The Fund will maintain an account for each shareholder of shares for
which no certificates have been issued.
-8-
<PAGE>
RETIREMENT PLANS
Generally: Shares of the Fund may be purchased directly by existing retirement
plans which allow for such investment. Self-employed individuals may purchase
shares through properly drafted Keogh plans covering the self-employed
individual or eligible employees. An investor should consult with a tax
adviser concerning the eligibility or establishment of such plans before
investing in shares of the Fund.
Individual Retirement Accounts: Certain individuals may be eligible to
establish an Individual Retirement Account (IRA) with the Fund if they meet
the applicable requirements of the Internal Revenue Code. Persons who earn
compensation and are not covered by a company retirement plan (and, if
married, your spouse is not covered by a company retirement plan) may
establish IRA accounts using Fund shares. Under such circumstances, annual
contributions by individuals, limited to the lesser of $2,000 or 100% of
compensation, are tax deductible from gross income. If you are married (filing
jointly) and each spouse establishes an IRA, each spouse may contribute up to
$2,000 to his or her IRA for a year as long as the combined compensation of
both spouses for the year is at least $4,000. Contributions to each spousal
account are fully deductible under the aforementioned guidelines. IRA
contributions may also be tax deductible for individual taxpayers and married
couples if covered by a company retirement plan as long as adjusted gross
incomes are within certain specified limits. All individuals may make
nondeductible IRA contributions to separate accounts. You may begin to make
non-penalty IRA withdrawals as early as age 59 1/2 or as late as 70 1/2. Most
withdrawals from an IRA account before age 59 1/2 are subject to a 10% penalty
tax in addition to regular income taxes. In certain situations, withdrawals
before age 59 1/2 are not subject to the 10% penalty. For example, in the
event of death or disability early withdrawals may be made without penalty.
Investors should consult their tax advisers to determine whether they are
qualified to take advantage of an IRA and whether an investment in the Fund
would be appropriate.
The Board of Trustees has selected Delaware Charter Guarantee & Trust Co. as
the Fund's trustee for qualified individuals who wish to establish an IRA
account funded with shares of the Fund. Although the Fund does not charge IRA
fees itself, there are fees charged by Delaware Charter Guarantee & Trust Co.
to open and maintain an IRA account. To establish an IRA account, all
prospective applicants are required to complete an IRA application for
Delaware Charter Guarantee & Trust Co. A disclosure statement describing the
general provisions of the IRA will be forwarded to all prospective applicants
as required by U.S. Treasury regulations. All IRAs may be revoked within seven
(7) days of their establishment with no penalty. For more information
regarding the establishment of an IRA account, please direct all inquiries to
the Fund at its principal office in San Jose, California.
PRICING OF SHARES
The net asset value of the Fund's shares is determined as of the close of
business of the New York Stock Exchange on each business day of which that
Exchange is open (presently 4:00 p.m.); Monday through Friday exclusive of
Washington's Birthday, Good Friday, Memorial Day, July 4th, Labor Day,
Thanksgiving, Christmas and New Year's Day. The price is determined by
dividing the value of its securities, plus any cash and other assets less all
liabilities, excluding capital surplus, by the number of shares outstanding.
The market value of securities listed on a national exchange is determined to
be the last recent sales price on such exchange. Listed securities that have
not recently traded and over-the-counter securities are valued at the last bid
price in such market. Short-term paper (debt obligations that mature in less
than 60 days) are valued at amortized cost which approximates market value.
Other assets are valued at fair market value as determined in good faith by
the Board of Trustees.
REDEMPTION OF SHARES
The Fund will redeem all or any portion of a shareholder's shares of the Fund
when requested in accordance with the procedures set forth below. Although the
Fund does not charge a redemption fee, there is a fee equal to that charged to
the Fund by the registered Transfer Agent for processing services, currently
$10 regardless of the number of shares redeemed.
All redemption requests should be made to the Fund at its principal office in
San Jose, California. The redemption price shall be the net asset value per
share next determined after notice in received by the Fund.
-9-
<PAGE>
If By Mail: Send a written request, signed by all registered owners in the
exact names in which they appear on the account indicating the dollar amount
or number of shares to be redeemed. Redemption requests by corporations,
partnerships, trusts, estates, guardianships, custodial accounts and accounts
under court jurisdiction shall be accompanied with all supporting legal
documents if required by applicable law. To be in proper form, such redemption
requests shall be signed by an authorized officer and must indicate the
capacity in which the officer is acting.
If by Telephone: Shareholders who complete the Share Purchase Application
provided with this Prospectus may redeem shares of the Fund by telephone if
they have elected on the application to do so. The Fund will employ reasonable
procedures to confirm that all instructions given by telephone are genuine.
Such procedures shall include requiring the caller to provide personal and/or
account information for the purpose of establishing the caller's
identification and sending a confirmation statement on redemptions to the
address of record each time activity is initiated by telephone. As long as the
Fund's registered transfer agent follows instructions communicated by
telephone which were reasonably believed to be genuine at the time of receipt,
neither the Fund nor the registered transfer agent shall be liable for any
loss to the shareholder caused by an unauthorized transaction. In any instance
where the Fund's registered transfer agent is not reasonably satisfied that
instructions received by telephone are genuine, neither the Fund nor the
transfer agent shall be liable for any losses which may occur because of delay
in implementing a transaction.
Unless the shareholder is known to management, all signatures must be
guaranteed by an "eligible guarantor institution" as defined under Rule
17Ad-15 of the Securities Exchange Act of 1934. Generally, such institutions
include national or state banks, savings and loan associations, credit unions,
brokers and dealers which are members of a national securities exchange or a
clearing agency and maintain a net capital of at least $100,000, national
securities exchanges, registered securities associations, clearing agencies
and institutions that participate in the Securities Transfer Agent Medallion
Program ("STAMP") or other recognized signature guarantee medallion programs.
Such guarantees must be signed by an authorized signatory thereof with
"Signature Guaranteed" appearing along with the shareholder's signature. A
notarized signature will not be sufficient for the request to be in proper
form. Redemption requests by corporate and fiduciary shareholders must be
accompanied by appropriate documentation establishing authority of the person
seeking to act on behalf of the account.
The proceeds received by the shareholder may be more or less than his cost of
such shares, depending upon the net asset value per share at the time of
redemption. Any difference should be treated by the shareholder as a capital
gain or loss for federal income tax purposes. Payment by the Fund will
ordinarily be made within seven (7) business days provided the shareholder has
complied with all the aforementioned requirements. However, if an investor has
purchased Fund shares by check and subsequently submits a redemption request,
the redemption proceeds will not be transmitted until the check used for
investment has cleared, which may take up to fifteen (15) days. The Fund may
suspend the right of redemption or postpone the date of payment if; the New
York Stock Exchange is closed for other than customary weekend or holiday
closings, or when trading on the New York Stock Exchange is restricted as
determined by the Securities and Exchange Commission or when the Commission
has determined that an emergency exists, thereby making disposal of fund
securities or valuation of net assets not reasonably practicable, or for such
other periods as the Commission may permit. The Fund intends to make payments
in cash, however, if the Board of Trustees believes that economic conditions
exist which would make such practice detrimental to the best interests of the
Fund, redemption may be accomplished through distribution of portfolio
securities of the Fund. The Fund and the Investment Adviser may enter into
arrangements with brokerage firms and financial institutions under which
shares of the Fund may be purchased or sold. Investors may be charged a
transaction fee if they effect transactions in Fund shares through a broker or
agent.
-10-
<PAGE>
BROKERAGE
The Fund requires all brokers to effect transactions in portfolio securities
in such a manner as to get prompt execution of the orders at the most
favorable price. Under the terms of the Advisory Agreement, the Adviser is
authorized to employ all brokers to execute orders for the purchase and sale
of portfolio securities on behalf of the Fund. The Adviser will use its best
judgement in determining which broker can provide the best net price and
execution. The selected broker shall be required to provide prompt and
reliable execution at a reasonably competitive price. The Adviser may select
brokers who, in addition to meeting primary requirements of execution and
price, may furnish statistical or other factual information and services,
which, in the opinion of management, will produce a direct benefit to the Fund
or assist the Adviser in carrying out its responsibilities to the Fund. Such
information and services shall include economic studies, industry studies,
statistical analysis, corporate reports and quotations necessary to determine
the value of the Fund's net assets. No effort is made to determine the value
of these services or the amount they might have reduced the expenses of the
Adviser. Other than as set forth above, the Fund has no fixed policy, formula,
method, or criteria which it uses in allocating brokerage business to firms
furnishing these materials and services. The Board of Trustees will evaluate
and review the reasonableness of brokerage commissions paid semiannually.
FINANCIAL STATEMENTS
The audited statement of assets and liabilities of the Fund as of June 12,
1997 is attached as an Appendix to this Statement of Additional Information.
MISCELLANEOUS INFORMATION
This Statement of Additional Information and the Prospectus do not contain all
the information included in the Trust's registration statement filed with the
Securities and Exchange Commission under the Securities Act with respect to
the securities offered hereby, certain portions of which have been omitted
pursuant to the rules and regulations of the Commission. The registration
statement, including exhibits filed therewith, may be examined at the offices
of the Commission in Washington D.C.
Statements contained herein and in the Prospectus as to the contents of any
contract or other documents referred to are not necessarily complete, and, in
each instance, reference is made to the copy of such contract or other
documents filed as an exhibit to the registration statement, each such
statement being qualified in all respects by such reference.
-11-
<PAGE>
MEREDITH, CARDOZO & LANZ LLP
Certified Public Accountants
97 South Second Street, Suite 100
San Jose, California 95113
(408) 278-0220
INDEPENDENT AUDITOR'S REPORT
To the Shareholders and
Board of Trustees
Berkshire Capital Investment Trust:
We have audited the statement of assets and liabilities of Berkshire Capital
Investment Trust (comprising the Berkshire Capital Growth & Value Fund) as of
June 12, 1997. This financial statement is the responsibility of the Company's
management. Our responsibility is to express an opinion on the financial
statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statement is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statement. An audit
also includes assessing the accounting principles used and significant
estimates made by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the financial position of Berkshire Capital Investment
Trust as of June 12, 1997, in conformity with generally accepted accounting
principles.
Meredith, Cardozo & Lanz LLP
San Jose, California
June 18, 1997
-1A-
<PAGE>
Berkshire Capital Investment Trust
Statement of Assets and Liabilities
June 12, 1997
<TABLE>
<CAPTION>
Berkshire Capital
Growth & Value Fund
----------------------
<S> <C>
ASSETS:
Cash in Bank $100,500
Total Assets $100,500
NET ASSETS $100,500
NET ASSETS CONSIST OF: Paid in Capital $100,500
OUTSTANDING SHARES: 10,050
NET ASSET VALUE PER SHARE $10
OFFERING PRICE PER SHARE $10
</TABLE>
Berkshire Capital Investment Trust
Notes to the Statement of Assets and Liabilities
June 12, 1997
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization: The Berkshire Capital Investment Trust (the "Trust") was
organized as a business trust under the laws of the state of Delaware on
November 25, 1996. The Trust is authorized to issue an indefinite number of
shares of beneficial interest, par value $1.00 per share. Shares have
non-cumulative voting rights, do not have preemptive or subscription rights
and are freely transferable. The Berkshire Capital Growth & Value Fund is an
open-end non-diversified portfolio of the Berkshire Capital Investment Trust.
The Trust has no transactions other than those matters relating to its
organization and registration as an open-end, non-diversified management
investment company under the Investment Company Act of 1940, its securities
under the Securities Act of 1933, and the sale of 10,050 shares of the
Berkshire Capital Growth & Value Fund to its initial investors on June 12,
1997.
Significant Accounting Policies: Accounting policies consistently followed by
the Trust in the preparation of its financial statements are in conformity
with generally accepted accounting principles and include:
(a) Security valuations: The Trust values investment securities, where market
quotations are available, at market value based on the last recorded sales
prices as reported by the principal securities exchange on which the security
is traded, or if the security is not traded on an exchange, market value is
based on the latest bid price. Short-term investments are valued at cost,
approximating market value.
(b) Federal income taxes: The Trust's policy is to comply with the
requirements of the Internal Revenue Code that are applicable to regulated
investment companies and to distribute all its taxable income to its
shareholders. Therefore, no federal income tax provision is required.
(c) Distribution to shareholders: The Trust intends to distribute to
shareholders substantially all of its net investment income, if any, and net
realized capital gains, if any, at year end.
-2A-
<PAGE>
(d) Organizational costs and registration fees: Initial organizational costs
and registration fees were all borne by the Investment Adviser.
(e) Other: The Trust records security transactions on the trade date. Specific
identification is used for determining gains or losses for financial
statements and income tax purposes. Dividend income is recorded on the
ex-dividend date and interest income is accrued daily on the cash balance
maintained in an account at the rate of interest in effect at the first of
each month. Advisory and Administrative fees are accrued each calendar day
(including weekends and holidays) at a rate of 1.5% per annum of the net
assets as stipulated in the Advisory Agreement and 0.50% per annum of the
Fund's average daily net assets up to $50 million, 0.45% of such assets from
$50 million to $200 million, 0.40% of such assets from $200 million to $500
million, 0.35% of such assets from $500 million to $1 billion, and 0.30% of
such assets in excess of $1 billion as stipulated in the Administration
Agreement.
NOTE 2 - RELATED PARTY TRANSACTIONS:
The Trust has an Investment Advisory Agreement and a separate Administration
Agreement with Berkshire Capital Holdings, Inc. Under the terms of the
Investment Advisory Agreement, Berkshire Capital Holdings, Inc. will receive a
fee of 1.5% per year on the net assets of the Fund. Under the Administration
Agreement, Berkshire Capital Holdings, Inc. will receive a fee of 0.50% of the
Fund's average daily net assets up to $50 million, 0.45% of such assets from
$50 million to $200 million, 0.40% of such assets from $200 million to $500
million, 0.35% of such assets from $500 million to $1 billion, and 0.30% of
such assets in excess of $1 billion. All fees are computed on the average
daily closing net asset value of the Fund and are payable monthly.
Berkshire Capital Holdings, Inc. is owned and controlled by the same
individuals who have organized the Trust. The Investment Advisory Agreement
and the Administration Agreement has been approved by the Board of Trustees of
the Fund including the disinterested parties.
NOTE 3 - CAPITAL STOCK AND DISTRIBUTION:
As of June 12, 1997 an indefinite number of shares were authorized and paid-in
capital amounted to $100,500 for the Berkshire Capital Growth & Value Fund.
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
Berkshire Capital
Growth & Value Fund
----------------------
<S> <C>
Shares Sold 10,050
Shares Redeemed 0
Net Increase 10,050
Shares Outstanding at Beginning of Period 0
Shares Outstanding at End of Period 10,050
</TABLE>
-3A-
<PAGE>
FORM N-1A
PART C - OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
(1) Financial statements are presented in Part B.
These include:
Independent Auditor's Report dated June 18, 1997
Statement of Assets and Liabilities as of June 12, 1997
Notes to Statement of Assets and Liabilities as of June 12, 1997
(b) Exhibits
Exhibit No. Description
----------- -----------
99.1 Certificate of Trust -
Berkshire Capital Investment Trust
99.2 Certificate of Amendment of Certificate of Trust
Berkshire Capital Investment Trust
99.3 Declaration of Trust -
Berkshire Capital Investment Trust
99.4 Certificate of Consent of the Trustees of the
Berkshire Capital Investment Trust
99.5 Investment Advisory Agreement
99.6 Administration Agreement
99.7 Transfer Agent Agreement
99.8 Subscription Agreements
99.9 Reimbursement Agreement
99.10 Consent of Independent Auditors
99.11 Opinion and Consent of Hall & Evans, L.L.C.
Item 25. Control Persons
Not Applicable.
Item 26. Number of Shareholders
Title of Class Number of Record Holders
--------------- --------------------------
Berkshire Capital Growth & Value Fund Three as of June 12, 1997
<PAGE>
Item 27. Indemnification
Under section 3817(a) of the Delaware Business Trust Act, a Delaware business
trust has the power to indemnify and hold harmless any trustee, beneficial
owner or other person from and against any and all claims and demands
whatsoever. Reference is made to sections 5.1 and 5.2 of the Declaration of
Trust of Berkshire Capital Investment Trust (the "Trust") (Exhibit 99.3)
pursuant to which no trustee, officer, employee or agent of the Trust shall be
subject to any personal liability, when acting in his or her individual
capacity, except for his own bad faith, willful misfeasance, gross negligence
or reckless disregard of his or her duties. The Trust shall indemnify each of
its trustees, officers, employees and agents against all liabilities and
expenses reasonably incurred by him or her in connection with the defense or
disposition of any actions, suits or other proceedings by reason of his or her
being or having been a trustee, officer, employee or agent, except with
respect to any matter as to which he or she shall have been adjudicated to
have acted in or with bad faith, willful misfeasance, gross negligence or
reckless disregard of his or her duties. The Trust will comply with Section
17(h) of the Investment Company Act of 1940, as amended (the "1940 Act") and
1940 Act Releases number 7221 (June 9, 1972) and number 11330 (September 2,
1980).
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to trustees, officers and controlling persons of the
Trust pursuant to the foregoing, the Trust has been advised that in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy and therefore may be unenforceable. In the event that a
claim for indemnification (except insofar as it provides for the payment by
the Trust of expenses incurred or paid by a trustee, officer or controlling
person in the successful defense of any action, suit or proceeding) is
asserted against the Trust by such trustee, officer or controlling person and
the Securities and Exchange Commission is still in the same opinion, the Trust
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 Securities Act of 1933 and will be governed by the final
adjudication of such issue.
Indemnification provisions exist in the Investment Advisory and Administration
Agreement under the headings "Limitation of Liability" which are identical to
those in the Declaration of Trust noted above.
Item 28. Activities of Investment Adviser
Berkshire Capital Holdings, Inc. activity at the present time is
performance on its Investment Advisory Contract and Administration Agreement
currently effective with the Berkshire Capital Investment Trust. Malcolm R.
Fobes III has the principal occupation of, owner, officer and director of
Berkshire Capital Holdings, Inc.
Item 29. Principal Underwriter
The Fund acts as its own underwriter.
Item 30. Location of Accounts and Records
All fund records are held at the Trust's principal executive offices
at 475 Milan Drive, #103, San Jose, California 95134-2453 with the exception
of security certifications which are held in a safe deposit box at the Bank of
Los Altos, 4546 El Camino at San Antonio, Los Altos, California 94022.
<PAGE>
Item 31. Management Services
Not Applicable
Item 32. Undertakings
The Registrant undertakes to file with the Securities and Exchange
Commission (the "Commission") an amendment to the Registration Statement with
certified financial statements showing the initial capital received before
accepting subscriptions from any persons in excess of 25 pursuant to Section
14(a)(3) of the 1940 Act.
The Registrant undertakes to file with the Commission a
post-effective amendment to this Registration Statement, using financial
statements which need not be certified, within four to six months of the
effective date hereof.
The Registrant undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest annual report
to shareholders, upon request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement and has duly
caused this amendment to the Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of San Jose and
State of California, on the 7th day of January, 1997.
Berkshire Capital Investment Trust
/s/ Malcolm R. Fobes III
By: __________________________________
Malcolm R. Fobes III, President
Pursuant to the requirements of the Securities Act of 1933, this registration
Statement has been signed below by the following persons in the capacities and
on the dates(s) indicated.
/s/ Malcolm R. Fobes III Trustee; President of the Trust 6/26/97
/s/ Ronald G. Seger Trustee; Secretary of the Trust 6/26/97
/s/ Leland F. Smith Trustee 6/26/97
/s/ Arthur J. Hopper Trustee 6/26/97
<PAGE>
EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description Page
----------- ----------- ----
<S> <C> <C>
99.1 Certificate of Trust -
Berkshire Capital Investment Trust 1A
99.2 Certificate of Amendment of Certificate of Trust
Berkshire Capital Investment Trust 2A
99.3 Declaration of Trust -
Berkshire Capital Investment Trust 3A
99.4 Certificate of Consent of the Trustees of the
Berkshire Capital Investment Trust 4A
99.5 Investment Advisory Agreement 5A
99.6 Administration Agreement 6A
99.7 Transfer Agent Agreement 7A
99.8 Subscription Agreements 8A
99.9 Reimbursement Agreement 9A
99.10 Consent of Independent Auditors 10A
99.11 Opinion and Consent of Hall & Evans, L.L.C. 11A
</TABLE>
<PAGE>
CERTIFICATE OF TRUST
OF
BERKSHIRE CAPITAL INVESTMENT TRUST
This Certificate of Trust is filed in accordance with the provisions
of the Delaware Business Trust Act (12 Del. C. Section 3801 et. seq.) and sets
forth the following:
1. The name of the business trust is BERKSHIRE CAPITAL INVESTMENT TRUST.
2. BERKSHIRE CAPITAL INVESTMENT TRUST will become within 180 days following
the first issuance of beneficial interests, a registered investment company
under the Investment Company Act of 1940, as amended (15 U.S.C. 80a-1 et
seq.), and shall have and maintain the following registered office and
registered agent for service of process:
The Corporation Trust Company
1209 Orange Street
Wilmington, DE 19801
3. The following persons shall serve as all of the trustees of BERKSHIRE
CAPITAL INVESTMENT TRUST:
Malcolm R. Fobes III 475 Milan Drive, # 103, San Jose, CA 95134
Ronald G. Seger 715 Glenborough Drive, Mountain View, CA 94040
We the undersigned, in order to form a business trust under the laws of the
State of Delaware, hereby make and file this Certificate of Trust.
/s/ Malcolm R. Fobes III
_________________________________
Malcolm R. Fobes III, Trustee
/s/ Ronald G. Seger
_________________________________
Ronald G. Seger, Trustee
-1A-
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF TRUST
OF
BERKSHIRE CAPITAL INVESTMENT TRUST
This Certificate of Amendment is filed in accordance with the
provisions of the Delaware Business Trust Act (12 Del. C. Section 3801 et.
seq.) and sets forth the following:
1. The name of the business trust is BERKSHIRE CAPITAL INVESTMENT TRUST.
2. The Certificate of Trust filed on November 25, 1996 is to be amended, as
the following persons shall hereinafter serve as all of the trustees of the
BERKSHIRE CAPITAL INVESTMENT TRUST:
Malcolm R. Fobes III
Ronald G. Seger
Leland F. Smith
Arthur J. Hopper
3. This Certificate of Amendment is to be effective upon this filing.
The undersigned, in order to amend the Certificate of Trust of BERKSHIRE
CAPITAL INVESTMENT TRUST under the laws of the State of Delaware, hereby make
and file this Certificate of Amendment this 25th day of June, 1997.
/s/ Malcolm R. Fobes III
_________________________________
Malcolm R. Fobes III, Trustee
/s/ Ronald G. Seger
_________________________________
Ronald G. Seger, Trustee
-2A-
<PAGE>
DECLARATION OF TRUST
OF
BERKSHIRE CAPITAL INVESTMENT TRUST
<TABLE>
<CAPTION>
TABLE OF CONTENTS
------------------
<S> <C>
Article I: The Trust 1
1.1 Name 1
1.2 Trust Purpose 1
1.3 Definitions 1
Article II: Trustees 3
2.1 Number and Qualification 3
2.2 Term and Election 3
2.3 Resignation and Removal 3
2.4 Vacancies 4
2.5 Meetings 4
2.6 Officers; Chairman of the Board 5
2.7 By-Laws 5
Article III: Powers of Trustees 5
3.1 General 5
3.2 Investments 5
3.3 Legal Title 6
3.4 Sale of Interests 6
3.5 Borrow Money 6
3.6 Delegation; Committees 6
3.7 Collection and Payment 6
3.8 Expenses 7
3.9 Miscellaneous Powers 7
3.10 Further Powers 7
Article IV: Investment Advisory and Administrative Services and
Placement Agent Arrangements 7
4.1 Investment Advisory and Other Arrangements 7
4.2 Parties to Contract 8
Article V: Limitations of Liability 8
5.1 No Personal Liability of Trustees, Officers, Employees, Agents 8
5.2 Indemnification of Trustees, Officers, Employees, Agents 8
5.3 Liability of Holders; Indemnification 9
5.4 No Bond Required of Trustees 9
5.5 No Duty of Investigation; Notice in Trust Instruments, Etc. 9
5.6 Reliance on Experts, Etc. 10
5.7 Assent to Declaration 10
Article VI: Interests in the Trust 10
6.1 Interests 10
6.2 Rights of Holders 10
6.3 Register of Interests 10
6.4 Notices 10
6.5 No Pre-emptive Rights; Derivative Suits 10
6.6 No Appraisal Rights 10
Article VII: Purchases and Redemption 11
7.1 Purchases 11
7.2 Redemption by Holder 11
7.3 Redemption by Trust 11
7.4 Net Asset Value 11
-3A-
<PAGE>
Article VIII: Holders 12
8.1 Meetings of Holders 12
8.2 Notice of Meetings 12
8.3 Record Date for Meetings 12
8.4 Proxies, Etc. 12
8.5 Reports 13
8.6 Inspection of Records 13
8.7 Voting Powers 13
8.8 Series of Interests 13
8.9 Holder Action by Written Consent 15
8.10 Holder Communications 15
Article IX: Duration; Termination of Trust; Amendment; Mergers, Etc. 16
9.1 Duration 16
9.2 Termination of Trust 16
9.3 Amendment Procedure 17
9.4 Merger, Consolidation and Sale of Assets 17
9.5 Incorporation 17
Article X: Miscellaneous 18
10.1 Certificate of Designation; Agent for Service of Process 18
10.2 Governing Law 18
10.3 Counterparts 18
10.4 Reliance by Third Parties 18
10.5 Provisions in Conflict with Law or Regulations 19
10.6 Trust Only 19
10.7 Withholding 19
10.8 Headings and Construction 19
</TABLE>
Addendum to Declaration of Trust of Berkshire Capital Investment Trust
<PAGE>
DECLARATION OF TRUST
OF
BERKSHIRE CAPITAL INVESTMENT TRUST
This DECLARATION OF TRUST of BERKSHIRE CAPITAL INVESTMENT TRUST is
made on the 25th day of November, 1996 by the parties signatory hereto, as
trustees.
WHEREAS, the Trustee desires to form a business trust under the law
of Delaware for the investment and reinvestment of its assets; and
WHEREAS, it is proposed that the Trust assets be composed of cash,
securities and other Assets contributed to the Trust by the holders of
interests in the Trust entitled to ownership rights in the Trust;
NOW, THEREFORE, the Trustee hereby declares that the Trustees will
hold in trust all cash, securities and other assets which they may from time
to time acquire in any manner as Trustees hereunder, and manage and dispose of
the same for the benefit of the holders of interests in the Trust and subject
to the following terms and conditions.
ARTICLE I: THE TRUST
Section 1.1 Name. The name of the trust created hereby (the "Trust")
shall be "BERKSHIRE CAPITAL INVESTMENT TRUST", and so far as may be
practicable the Trustees shall conduct the Trust's activities, execute all
documents and sue or be sued under that name, which name (and the word "Trust"
wherever hereinafter used) shall not refer to the Trustees in their individual
capacities or to the officers, agents, employees or holders of interest in the
Trust. However, should the Trustees determine that the use of the name of the
Trust is not advisable, they may select such other name for the Trust as they
deem proper and the Trust may hold its property and conduct its activities
under such other name. Any name change shall become effective upon the
execution by a majority of the then Trustees of an instrument setting forth
the new name and the filing of a certificate of amendment pursuant to Section
3810(b) of the DBTA. Any such instrument shall not require the approval of the
holders of interests in the Trust, but shall have the status of an amendment
to this Declaration.
Section 1.2 Trust Purpose. The purpose of the Trust is to conduct,
operate and carry on the business of an open-end management investment company
registered under the 1940 Act. In furtherance of the foregoing, it shall be
the purpose of the Trust to do everything necessary, suitable, convenient or
proper for the conduct, promotion and attainment of any businesses and
purposes which at any time may be incidental or may appear conducive or
expedient for the accomplishment of the business of an open-end management
investment company registered under the 1940 Act and which may be engaged in
or carried on by a trust organized under the DBTA, and in connection
therewith, the Trust shall have and may exercise all of the powers conferred
by the laws of the State of Delaware upon a Delaware business trust.
Section 1.3 Definitions. As used in this Declaration, the following
terms shall have the following meanings:
(a) "1940 Act" shall mean the Investment Company Act of 1940, as
amended from time to time, and the rules and regulations thereunder, as
adopted or amended from time to time.
(b) "Affiliated Person", "Assignment" and "Interested Person" shall
have the meanings given them in the 1940 Act.
-1-
<PAGE>
(c) "Administrator" shall mean any party furnishing services to the
Trust pursuant to any administrative services contract described in Section
4.1 hereof.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and the rules and regulations thereunder, as adopted or
amended from time to time.
(e) "Commission" shall mean the Securities and Exchange Commission.
(f) "Declaration" shall mean this Declaration of Trust as amended
from time to time. References in this Declaration to "Declaration", "hereof",
"herein", and "hereunder" shall be deemed to refer to the Declaration rather
than the article or section in which such words appear. This Declaration shall
constitute the governing instrument of the Trust under the DBTA.
(g) "DBTA" shall mean the Delaware Business Trust Act, Delaware Code
Annotated title 12, Sections 3801 et seq., as amended from time to time.
(h) "Fiscal Year" shall mean an annual period as determined by the
Trustees unless otherwise provided by the Code or applicable regulations.
(i) "Holders" shall mean as of any particular time any or all
holders of record of Interests in the Trust or in Trust Property, as the case
may be, at such time.
(j) "Interest" shall mean a Holder's units of interest into which
the beneficial interest in the Trust and each series of the Trust shall be
divided from time to time.
(k) "Investment Advisor" shall mean any party furnishing services to
the Trust pursuant to any investment advisory contract described in Section
4.1 hereof.
(l) "Majority Interests Vote" shall mean the vote, at a meeting of
the Holders of interests, of the lesser of, (A) 67% or more of the Interests
present or represented at such meeting, provided the Holders of more than 50%
of the Interests are present or represented by proxy or (B) more than 50% of
the Interest.
(m) "Person" shall mean and include an individual, corporation,
partnership, trust, association, joint venture and other entity, whether or
not a legal entity, and a government and agencies and political subdivisions
thereof.
(n) "Registration Statement" as of any particular time shall mean
the Registration Statement of the Trust which is effective at such time under
the 1940 Act.
(o) "Trust Property" shall mean as of any particular time any and
all property, real or personal, tangible or intangible, which at such time is
owned or held by or for the account of the Trust or the Trustees. The Trustees
may authorize the division of Trust Property into two or more series, in
accordance with the provisions of Section 8.8 hereof, in which case all
references in this Declaration to the Trust, Trust Property, Interests therein
or Holders thereof shall be deemed to refer to each such series, as the case
may be, except as the context otherwise requires. Any series of Trust Property
shall be established and designated, and the variations in the relative rights
and preferences as between the different series shall be fixed and determined,
by the Trustees.
-2-
<PAGE>
(p) "Trustees" shall mean such persons who are indemnified as
trustees of the Trust on the signature page of this Declaration, so long as
they shall continue in office in accordance with the terms of this Declaration
of Trust, and all other persons who at the time in question have been duly
elected or appointed as trustees in accordance with the provisions of this
Declaration of Trust and are then in office, in their capacity as trustees
hereunder.
ARTICLE II: TRUSTEES
Section 2.1 Number and Qualification. The number of Trustees shall
initially be two and shall thereafter be fixed from time to time by written
instrument signed by majority of the Trustees so fixed then in office,
provided, however, that the number of Trustees shall in no event be less than
one. A Trustee shall be an individual at least 21 years of age who is not
under legal disability.
(a) Any vacancy created by an increase in Trustees shall be filled
by the appointment or election of an individual having the qualifications
described in this Article as provided in Section 2.4. Any such appointment
shall not become effective, however, until the individual appointed or elected
shall have accepted in writing such appointment or election and agreed in
writing to be bound by the terms of the Declaration. No reduction in the
number of Trustees shall have the effect of removing any Trustee from office.
(b) Whenever a vacancy in the number of Trustees shall occur, until
such vacancy is filled as provided in Section 2.4 hereof, the Trustees in
office, regardless of their number, shall have all the powers granted to the
Trustees and shall discharge all the duties imposed upon the Trustees by this
Declaration.
Section 2.2 Term and Election. Each Trustee named herein, or elected
or appointed prior to the first meeting of the Holders, shall (except in the
event of resignations or removals or vacancies pursuant to Section 2.3 or 2.4
hereof) hold office until his or her successor has been elected at such
meeting and has qualified to serve as Trustee. Beginning with the Trustees
elected at the first meeting of Holders, each Trustee shall hold office during
the lifetime of this Trust and until its termination as hereinafter provided
unless such Trustee resigns or is removed as provided in Section 2.3 below.
Section 2.3 Resignation and Removal. Any Trustee may resign (without
need for prior or subsequent accounting) by an instrument in writing signed by
him or her and delivered or mailed to the Chairman, if any, the President or
the Secretary and such resignation shall be effective upon such delivery, or
at a later date according to the terms of the instrument.
(a) Any of the Trustees may be removed with or without cause by the
affirmative vote of the Holders of two-thirds (2/3) of the Interests or
(provided the aggregate number of Trustees, after such removal and after
giving effect to any appointment made to fill the vacancy created by such
removal, shall not be less than the number required by Section 2.1 hereof)
with cause, by the action of two-thirds (2/3) of the remaining Trustees.
Removal with cause shall include, but not be limited to, the removal of a
Trustee due to physical or mental incapacity.
(b) Upon the resignation or removal of a Trustee, or his or her
otherwise ceasing to be a Trustee, he or she shall execute and deliver such
documents as the remaining Trustees shall require for the purpose of conveying
to the Trust or the remaining Trustees any Trust Property held in the name of
the resigning or removed Trustee. Upon the death of any Trustee or upon
removal or resignation due to any Trustee's incapacity to serve as trustee,
his or her legal representative shall execute and deliver on his or her behalf
such documents as the remaining Trustees shall require as provided in the
preceding sentence.
-3-
<PAGE>
Section 2.4 Vacancies. The term of office of a Trustee shall
terminate and a vacancy shall occur in the event of the death, resignation,
adjudicated incompetence or other incapacity to perform the duties of the
office, or removal, of a Trustee. A vacancy shall also occur in the event of
an increase in the number of trustees as provided in Section 2.1. No such
vacancy shall operate to annul this Declaration or to revoke any existing
trust created pursuant to the terms of this Declaration. In the case of a
vacancy, the Holders of at least a majority of the Interests entitled to vote,
acting at any meeting of the Holders held in accordance with Section 8.1
hereof, or, to the extent permitted by the 1940 Act, a majority vote of the
Trustees continuing in office acting by written instrument or instruments, may
fill such vacancy, and any Trustee so elected by the Trustees or the Holders
shall hold office as provided in this Declaration. There shall be no
cumulative voting by the Holders in the election of Trustees.
Section 2.5 Meetings. Meetings of the Trustees shall be held from
time to time within or without the State of Delaware upon the call of the
Chairman, if any, the President, the Chief Operating Officer, the Secretary,
an Assistance Secretary or any two Trustees.
(a) Regular meetings of the Trustees may be held without call or
notice at a time and place fixed by resolution of the Trustees. Notice of any
other meeting shall be given not later than 72 hours preceding the meeting by
United States mail or by electronic transmission to each Trustee at his
business address as set forth in the records of the Trust or otherwise given
personally not less than 24 hours before the meeting but may be waived in
writing by any Trustee either before or after such meeting. The attendance of
a Trustee at a meeting shall constitute a waiver of notice of such meeting
except where a Trustee attends a meeting for the express purpose of objecting
to the transaction of any business on the ground that the meeting has not been
lawfully called or convened.
(b) A quorum for all meetings of the Trustees shall be two-third of
the total number of Trustees, but (except at such time as there is only one
Trustee) no less than two Trustees. Unless provided otherwise in this
Declaration, any action of the Trustees may be taken at a meeting by vote of a
majority of the Trustees present (a quorum being present) or without a meeting
by written consent of a majority of the Trustees, which written consent shall
be filed with the minutes of proceedings of the Trustees or any such
committee. If there be less than a quorum present at any meeting of the
Trustees, a majority of those present may adjourn the meeting until a quorum
shall have been obtained.
(c) Any committee of the Trustees, including an executive committee,
if any, may act with or without a meeting. A quorum for all meetings of any
such committee shall be two or more of the members thereof, unless the Board
shall provide otherwise. Unless provided otherwise in this Declaration, any
action of any such committee may be taken at a meeting by vote of a majority
of the members present (a quorum being present) or without a meeting by
written consent of a majority of the members, which written consent shall be
filed with the minutes of proceedings of the Trustees or any such committee.
(d) With respect to actions of the Trustees and any committee of the
Trustees, Trustees who are Interested Persons of the Trust or are otherwise
interested in any action to be taken may be counted for quorum purposes under
this Section 2.5 and shall be entitled to vote to the extent permitted by the
1940 Act.
-4-
<PAGE>
(e) All or any one or more Trustees may participate in a meeting of
the Trustees or any committee thereof by means of a conference telephone or
similar communications equipment by means of which all persons participating
in the meeting can hear each other, and participation in a meeting pursuant to
such communications system shall constitute presence in person at such
meeting, unless the 1940 Act specifically requires the Trustees to act "in
person" in which case such term shall be construed consistent with Commission
or staff releases or interpretations.
Section 2.6 Officers; Chairman of the Board. The Trustees shall,
from time to time, elect officers of the Trust, including a President, a
Secretary and a Treasurer. The Trustees shall elect or appoint, from time to
time, a Trustee to act as Chairman of the Board who shall preside at all
meetings of the Trustees and carry out such other duties as the Trustees shall
designate. The Trustees may elect or appoint or authorize the President to
appoint such other officers or agents with such powers as the Trustees may
deem to be advisable. The President, Secretary and Treasurer may, but need
not, be a Trustee. The Chairman of the Board and such officers of the Trust
shall serve in such capacity for such time and with such authority as the
Trustees may, in their discretion, so designate.
Section 2.7 By-Laws. The Trustees may adopt and, from time to time,
amend or repeal the By-Laws for the conduct of the business of the Trust not
inconsistent with this Declaration and such By-Laws are hereby incorporated in
this Declaration by reference thereto.
ARTICLE III: POWERS OF TRUSTEES
Section 3.1 General. The Trustees shall have exclusive and absolute
control over management of the business and affairs of the Trust, but with
such powers of delegation as may be permitted by this Declaration and the
DBTA. The Trustees may perform such acts as in their sole discretion are
proper for conducting the business and affairs of the Trust. The enumeration
of any specific power herein shall not be construed as limiting the aforesaid
power. Such powers of the Trustee may be exercised without order of or
recourse to any court.
Section 3.2 Investments. The Trustees shall have power to:
(a) conduct, operate and carry on the business of an investment
company;
(b) subscribe for, invest in, reinvest in, purchase or otherwise
acquire, hold, pledge, sell, assign, transfer, exchange, distribute or
otherwise deal in or dispose of United States and foreign currencies and
related instruments including forward contracts, and securities, including
common and preferred stock, warrants, bonds, debentures, time notes and all
other evidences of indebtedness, negotiable or non-negotiable instruments,
obligations, certificates of deposit or indebtedness, commercial paper,
repurchase agreements, reverse repurchase agreements, convertible securities,
forward contracts, options, futures contracts, and other securities,
including, without limitation, those issued, guaranteed or sponsored by any
state, territory or possession of the United States and the District of
Columbia and their political subdivisions, agencies and instrumentalities, or
by the United States Government, any foreign government, or any agency,
instrumentality or political subdivision of the United States Government or
any foreign government, or international instrumentalities, or by any bank,
savings institution, corporation or other business entity organized under the
laws of the Untied States or under foreign laws; and to exercise any and all
rights, powers and privileges of ownership or interest in respect of any and
all such
-5-
<PAGE>
investments of every kind and description, including, without limitation, the
right to consent and otherwise act with respect thereto, with power to
designate one or more persons, firms, associations, or corporations to
exercise any of said rights, powers and privileges in respect of any of said
instruments; and the Trustees shall be deemed to have the foregoing powers
with respect to any additional securities in which the Trustees may determine
to invest.
The Trustees shall not be limited to investing in obligations
maturing before the possible termination of the Trust, nor shall the Trustees
be limited by any law limiting the investments which may be made by
fiduciaries.
Section 3.3 Legal Title. Legal title to all the Trust Property shall
be vested in the Trust as a separate legal entity under the DBTA, except that
the Trustees shall have the power to cause legal title to any Trust Property
to be held by or in the name of one or more of the Trustees or in the name of
any other Person on behalf of the Trust on such terms as the Trustees may
determine.
In the event that title to any part of the Trust Property is vested
in one or more Trustees, the right, title and interest of the Trustees in the
Trust Property shall vest automatically in each person who may hereafter
become a Trustee upon his or her due election and qualifications. Upon the
resignation, removal or death of a Trustee he or she shall automatically cease
to have any right, title or interest in any of the Trust Property, and the
right, title and interest of such Trustee in the Trust Property shall vest
automatically in the remaining Trustees. To the extent permitted by law, such
vesting and cessation of title shall be effective whether or not conveyancing
documents have been executed and delivered.
Section 3.4 Sale of Interests. Subject to the more detailed
provisions set forth in Article VII, the Trustees shall have the power to
permit persons to purchase Interests and to add or reduce, in whole or in
part, their Interest in the Trust.
Section 3.5 Borrow Money. The Trustees shall have the power to
borrow money or otherwise obtain credit and to secure the same by mortgaging,
pledging or otherwise subjecting as security the assets of the Trust,
including the lending of portfolio securities, and to endorse, guarantee or
undertake the performance of any obligation, contract or engagement of any
other person, firm, association or corporation.
Section 3.6 Delegation; Committees. The Trustees shall have the
power, consistent with their continuing exclusive authority over the
management of the Trust and the Trust Property, to delegate from time to time
to such of their number or to officers, employees or agents of the Trust the
doing of such things and the execution of such instruments, either in the name
of the Trust or the names of the Trustees or otherwise, as the Trustees may
deem expedient.
Section 3.7 Collection and Payment. The Trustees shall have the
power to collect all property due to the Trust; to pay all claims, including
taxes, against the Trust Property; to prosecute, defend, compromise or abandon
any claims relating to the Trust Property; to foreclose any security interest
securing any obligations, by virtue of which any property is owned, to the
Trust; and to enter into releases, agreements and other instruments.
-6-
<PAGE>
Section 3.8 Expenses. The Trustees shall have the power to incur and
pay any expenses which in the opinion of the Trustees are necessary or
incidental to carry out any of the purposes of this Declaration, and to pay
reasonable compensation from the funds of the Trust to themselves as Trustees.
The Trustees shall fix the compensation of all officers, employees and
Trustees. The Trustees may pay themselves such compensation for special
services, including legal and brokerage services, as they in good faith may
deem reasonable (subject to any limitations in the 1940 Act), and
reimbursement for expenses reasonably incurred by themselves on behalf of the
Trust.
Section 3.9 Miscellaneous Powers. The Trustees shall have the power
to (a) employ or contract with such Persons as the Trustees may deem desirable
for the transaction of the business of the Trust and terminate such employees
or contractual relationships as they consider appropriate; (b) enter into
joint ventures, partnerships and any other combinations or associations; (c)
purchase, and pay for out of Trust Property, insurance policies (including,
but not limited to, fidelity, bonding and errors and omission policies;
insuring the Investment Adviser, Administrator, distributor, Holders,
Trustees, officers, employees, agents, or independent contractors of the Trust
against all claims arising by reason of holding any such position or by reason
of any action taken or omitted by any such person in such capacity, whether or
not the Trust would have the power to indemnify such Person against liability;
(d) establish pension, profit-sharing and other retirement, incentive and
benefit plans for any Trustees, officers, employees and agents of the Trust;
(e) to the extent permitted by law, indemnify any Person with whom the Trust
has dealings, including the Investment Adviser, Administrator, distributor,
Holders, Trustees, officers, employees, agents or independent contractors of
the Trust, to such extent as the Trustees shall determine; (f) guarantee
indebtedness or contractual obligations of others; (g) determine and change
the Fiscal Year of the Trust and the method by which its accounts shall be
kept; and (h) adopt a seal for the Trust, but the absence of such seal shall
not impair the validity of any instrument executed on behalf of the Trust.
Section 3.10 Further Powers. The Trustees shall have power to
conduct the business of the Trust and carry on its operations in any and all
of its branches and maintain offices, whether within or without the State of
Delaware, in any and all states of the United States of America, in the
District of Columbia, in any foreign countries, and in any and all
commonwealths, territories, dependencies, colonies, possessions, agencies or
instrumentalities of the United States of America and of foreign countries,
and to do all such other things and execute all such instruments as they deem
necessary, proper or desirable in order to promote the interests of the Trust
although such things are not herein specifically mentioned. Any determination
as to what is in the interests of the Trust made by the Trustees in good faith
shall be conclusive and shall be binding upon the Trust and the Holders, past,
present and future. In construing the provisions of this Declaration, the
presumption shall be in favor of a grant of power to the Trustees. The
Trustees shall not be required to obtain any court order to deal with Trust
Property.
ARTICLE IV: INVESTMENT ADVISORY AND ADMINISTRATIVE
SERVICES AND PLACEMENT AGENT ARRANGEMENTS
Section 4.1 Investment Advisory and Other Arrangements. The Trustees
may in their discretion, from time to time, enter into contracts or agreements
for investment advisory services, administrative services (including transfer
and dividend disbursing agency services), distribution services, fiduciary
(including custodian) services, placement agent services, Holder servicing and
distribution services, or other services, whereby the other party to such
contract or agreement shall undertake to furnish the Trustees such services as
the Trustees shall, from time to time, consider desirable and all upon such
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terms and conditions as the Trustees may in their discretion determine.
Notwithstanding any other provisions of this Declaration to the contrary, the
Trustees may authorize any Investment Adviser (subject to such general or
specific instructions as the Trustees may, from time to time, adopt) to effect
purchases, sales, loans or exchanges of Trust Property on behalf of the
Trustees or may authorize any officer, employee or Trust to effect such
purchases, sales, loans or exchanges pursuant to recommendations of any such
Investment Adviser (all without further action by the Trustees). Any such
purchases, sales, loans and exchanges shall be binding upon the Trust.
Section 4.2 Parties to Contract. Any contract or agreement of the
character described in Section 4.1 of this Article IV may be entered into with
any Person, although one or more of the Trustees or officers of the Trust or
any Holder may be an officer, director, trustee, shareholder, or member of
such other party to the contract or agreement, and no such contract or
agreement shall be invalidated or rendered voidable by reason of the existence
of any such relationship, nor shall any person holding such relationship be
liable merely by reason of such relationship for any loss or expense to the
Trust under or by reason of such contract or agreement or accountable for any
profit realized directly or indirectly therefrom, provided that the contract
or agreement when entered into was reasonable and fair and not inconsistent
with the provisions of this Article IV. Any Trustee or officer of the Trust or
any Holder may be the other party to contracts or agreements entered into
pursuant to Section 4.1 hereof, and any Trustee or officer of the Trust or any
Holder may be financially interested or otherwise affiliated with Persons who
are parties to any or all of the contracts or agreements mentioned in this
Section 4.2
ARTICLE V: LIMITATIONS OF LIABILITY
Section 5.1 No Personal Liability of Trustees, Officers, Employees,
Agents. No Trustee, officer, employee or agent of the Trust when acting in
such capacity shall be subject to any personal liability whatsoever, in his or
her individual capacity, to any Person, other than the Trust or its Holders,
in connection with Trust Property or the affairs of the Trust; and all such
Persons shall look solely to the Trust Property for satisfaction of claims of
any nature against a Trustee, officer, employee or agent of the Trust arising
in connection with the affairs of the Trust. No Trustee, officer, employee or
agent of the Trust shall be liable to the Trust, Holders of Interests therein,
or to any Trustee, officer, employee, or agent thereof for any action or
failure to act (including, without limitation, the failure to compel in any
way any former or acting Trustee to redress any breach of trust) except for
his or her own bad faith, willful misfeasance, gross negligence or reckless
disregard of his or her duties.
Section 5.2 Indemnification of Trustees, Officers, Employees,
Agents. The Trust shall indemnify each of its Trustees, officers, employees,
and agents (including Persons who serve at its request as directors, officers
or trustees of another organization in which it has an interest, as a
shareholder, creditor or otherwise) against all liabilities and expenses
(including amounts paid in satisfaction of judgments, in compromise, as fines
and penalties, and as counsel fees) reasonably incurred by him or her in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, in which he or she may be involved or
with which he or she may be threatened, while in office or thereafter, by
reason of his or her being or having been such a Trustee, officer, employee or
agent, except with respect to any matter as to which he or she shall have been
adjudicated to have acted in bad faith, willful misfeasance, gross negligence
or reckless disregard of his or her duties; provided, however, that as to any
matter disposed of by a compromise payment by such Person, pursuant to a
consent decree or otherwise, no indemnification either for said payment or for
any other expenses shall be
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provided unless there has been a determination that such Person did not engage
in willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his or her office by the court or other
body approving the settlement or other disposition or by a reasonable
determination, based upon review of readily available facts (as opposed to a
full trial-type inquiry), that he or she did not engage in such conduct by
written opinion from independent legal counsel approved by the Trustees. The
rights accruing to any Person under these provisions shall not exclude any
other right to which he or she may be lawfully entitled; provided that no
Person may satisfy any right of indemnity or reimbursement granted herein or
in Section 5.1 or to which he or she may be otherwise entitled except out of
the Trust Property. The Trustees may make advance payments in connection with
indemnification under this Section 5.2, provided that the indemnified Person
shall have given a written undertaking to reimburse the Trust in the event it
is subsequently determined that he or she is not entitled to such
indemnification.
Section 5.3 Liability of Holders; Indemnification. The Trust shall
indemnify and hold each Holder harmless from and against any claim or
liability to which such Holder may become subject solely by reason of his or
her being or having been a Holder and not because of such Holder's acts or
omissions or for some other reason, and shall reimburse such Holder for all
legal and other expenses reasonably incurred by him or her in connection with
any such claim or liability (upon proper and timely request by the Holder);
provided, however, that no Holder shall be entitled to indemnification by any
series established in accordance with Section 8.8 unless such Holder is a
Holder of Interest of such series. The rights accruing to a Holder under this
Section 5.3 shall not exclude any other right to which such Holder may be
lawfully entitled, nor shall anything herein contained restrict the right of
the Trust to indemnify or reimburse a Holder in any appropriate situation even
though not specifically provided herein.
Section 5.4 No Bond Required of Trustees. No Trustee shall, as such,
be obligated to give any bond or surety or other security for the performance
of any of his or her duties hereunder.
Section 5.5 No Duty of Investigation; Notice in Trust Instruments,
Etc. No purchaser, lender, or other Person dealing with the Trustees or any
officer, employee or agent of the Trust shall be bound to make any inquiry
concerning the validity of any transaction purporting to be made by the
Trustees or by said officer, employee or agent or be liable for the
application of money or property paid, loaned, or delivered to or on the order
of the Trustees or of said officer, employee or agent. Every obligation,
contract, instrument, certificate or other interest or undertaking of the
Trust, and every other act or thing whatsoever executed in connection with the
Trust, shall be conclusively taken to have been executed or done by the
executors thereof only in their capacity as Trustees, officers, employees or
agents of the Trust. Every written obligation, contract, instrument,
certificate or other interest or undertaking of the Trust made by the Trustees
or by any officer, employee or agent of the Trust, in his or her capacity as
such, shall contain an appropriate recital to the effect that the Trustee,
officer, employee and agent of the Trust shall not personally be bound by or
liable thereunder, nor shall resort be had to their private property or the
private property of the Holders for the satisfaction of any obligation or
claim thereunder, and appropriate references shall be made therein to the
Declaration, and may contain any further recital which they may deem
appropriate, but the omission of such recital shall not operate to impose
personal liability on any of the Trustees, officers, employees or agents of
the Trust. The Trustees may maintain insurance for the protection of the Trust
Property, Holders, Trustees, officers, employees and agents in such amount as
the Trustees shall deem advisable.
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Section 5.6 Reliance on Experts, Etc. Each Trustee and officer or
employee of the Trust shall, in the performance of his or her duties, be fully
and completely justified and protected with regard to any act or any failure
to act resulting from reliance in good faith upon the books of account or
other records of the Trust, upon any opinion of counsel, or upon reports made
to the Trust by any of its officers or employees or by any Investment Adviser,
Administrator, accountant, appraiser or other experts or consultants selected
with reasonable care by the Trustees, officers or employees of the Trust,
regardless of whether such counsel or expert may also be a Trustee.
Section 5.7 Assent To Declaration. Every Holder, by virtue of having
become a Holder in accordance with the terms of this Declaration, shall be
held to have expressly assented and agreed to the terms hereof and to have
become a party hereto.
ARTICLE VI: INTERESTS IN THE TRUST
Section 6.1 Interests. The beneficial interests in the property of
the Trust shall consist of an unlimited number of Interests. No certificate
certifying the ownership of Interests need by issued except as the Trustees
may otherwise determine from time to time.
Section 6.2 Rights of Holders. The ownership of the Trust Property
of every description and the right to conduct any business hereinbefore
described are vested exclusively in the Trust or the Trustees, and the Holders
shall have no right or title therein other than the beneficial interest
conferred by their Interests and they shall have no right to call for any
partition or division of any property, profits or rights of the Trust. The
Interests shall be personal property giving only the rights specifically set
forth in this Declaration.
Section 6.3 Register of Interests. A register shall be kept by the
Trust under the direction of the Trustees which shall contain the names and
addresses of the Holders and Interests held by each Holder. Each such register
shall be conclusive as to the identity of the Holders of the Trust and the
Persons who shall be entitled to payments of distributions or otherwise to
exercise or enjoy the rights of Holders. No Holder shall be entitled to
receive payment of any distribution, nor to have notice given to it as herein
provided, until it has given its address to such officer or agent of the
Trustees as shall keep the said register for entry thereon.
Section 6.4 Notices. Any and all notices to which any Holder
hereunder may be entitled and any and all communications shall be deemed duly
served or given if mailed, postage prepaid, addressed to any Holder of record
at its last known address as recorded on the register.
Section 6.5 No Pre-emptive Rights: Derivative Suits. Holders shall
have no preemptive or other right to subscribe to any additional Interests or
other securities issued by the Trust or any series thereof. No action may be
brought by a Holder on behalf of the Trust unless Holders owning no less than
10% of the then outstanding Interests join in the bringing of such action.
Section 6.6 No Appraisal Rights. Holders shall have no right to
demand payment for their Interests or to any other rights of dissenting
Holders in the event the Trust participates in any transaction which would
give rise to appraisal or dissenters' rights by a holder of a corporation
organized under the General Corporation Law of Delaware, or otherwise.
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ARTICLE VII: PURCHASES AND REDEMPTION
Section 7.1 Purchases. The Trustees, in their discretion, may, from
time to time, without a vote of the Holders, permit the purchase of Interests
by such party or parties (or increase in the Interests of a Holder) and for
such type of consideration, including, without limitation, cash or property,
at such time or times (including, without limitation, each business day), and
on such terms as the Trustees may deem best, and may in such manner acquire
other assets (including, without limitation, the acquisition of assets subject
to, and in connection with the assumption of, liabilities) and businesses.
Section 7.2 Redemption by Holder. Each Holder of Interests of the
Trust or any series thereof shall have the right at such times as may be
permitted by the Trust to require the Trust to redeem all or any part of his
or her Interests of the Trust or series thereof at a redemption price equal to
the net asset value per Interest of the Trust or series thereof next
determined in accordance with Section 7.4 hereof after the Interests are
properly tendered for redemption. Payment of the redemption price shall be in
cash; provided, however, that if the Trustees determine, which determination
shall be conclusive, that conditions exist which make payment wholly in cash
unwise or undesirable, the Trust may, subject to the requirements of the 1940
Act, make payment wholly or partly in securities or other assets belonging to
the Trust or series thereof of which the Interests being redeemed are part of
the value of such securities or assets used in such determination of net asset
value.
Notwithstanding the foregoing, the Trust may postpone payment of the
redemption price and may suspend the right of the Holders of Interests of the
trust or series thereof to require the trust to redeem Shares of the Trust of
series during any period or at any time when and to the extent permissible
under the 1940 Act.
Section 7.3 Redemption by Trust. Each Interest of the Trust or
series thereof that has been established and designated is subject to
redemption by the trust at the redemption price which would be applicable if
such Interest was then being redeemed by the Holder pursuant to Section 7.2
hereof: (i) at any time, if the Trustees determine in their sole discretion
and by majority vote that failure to so redeem may have materially adverse
consequences to the Trust or any series or to the Holders of the Interests of
the Trust or any series thereof, or (ii) upon such other conditions as may
from time to time be determined by the Trustees and set forth in the then
current Prospectus of the Trust with respect to maintenance of Holder accounts
of a minimum amount. Upon such redemption the Holders of the Interests so
redeemed shall have no further right with respect thereto other than to
receive payment of such redemption price.
Section 7.4 Net Asset Value. The net asset value per Interest of any
series shall be (i) in the case of a series whose Interests are not divided
into classes, the quotient obtained by dividing the value of the net assets of
that series (being the value of the assets belonging to that series less the
liabilities belonging to that series) by the total number of Interests of that
series outstanding, and (ii) in the case of a class of Interests of a series
whose Interests are divided into classes, the quotient obtained by dividing
the value of the net assets of that series allocable to such class (being the
value of the assets belonging to that series allocable to such class less the
liabilities belonging to such class) by the total number of Interests of such
class outstanding: all determined in accordance with the methods and
procedures, including without limitation those with respect to rounding,
established by the Trustees from time to time.
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The Trustees may determine to maintain the net asset value per
Interests of any series at a designated constant dollar amount and in
connection therewith may adopt procedures consistent with the 1940 Act for
continuing declarations of income attributable to that series as dividends
payable in additional Interests of that series at the designated constant
dollar amount and for the handling of any losses attributable to that series.
ARTICLE VIII: HOLDERS
Section 8.1 Meetings of Holders. Meetings of the Holders may be
called at any time by a majority of the Trustees and shall be called by any
trustee upon written request of Holders holding, in the aggregate, not less
than 10% of the Interests, such requests specifying the purpose or purposes
for which such meeting is to be called. Any such meeting shall be held within
or without the State of Delaware on such day and at such time as the Trustees
shall designate. Holders of one-third of the Interests in the Trust, present
in person or by proxy, shall constitute a quorum for the transaction of any
business, except as may otherwise be required by the 1940 Act or other
applicable law or by this Declaration. If a quorum is present at a meeting, an
affirmative vote by the Holders present, in person or by proxy, holding more
than 50% of the total Interests of the Holders present, either in person or by
proxy, at such meeting constitutes the action of the Holders, unless the 1940
Act, other applicable law or this Declaration requires a greater number of
affirmative votes.
Section 8.2 Notice of Meetings. Written or printed notice of all
meetings of the Holders, stating the time, place and purposes of the meeting,
shall be given by the Trustees either by presenting it personally to a Holder,
leaving it at his or her residence or usual place of business, or by sending
it via United States mail or by electronic transmission to a Holder, at his or
her registered address, at least 10 business days and not more than 90
business days before the meeting. If mailed, such notice shall be deemed to be
given when deposited in the United States mail addressed to the Holder at his
or her address as it is registered with the Trust, with postage thereon
prepaid. At any such meeting, any business properly before the meeting may be
considered whether or not stated in the notice of the meeting. Any adjourned
meeting may be held as adjourned without further notice.
Section 8.3 Record Date for Meetings. For the purpose of determining
the Holders who are entitled to notice of any meeting and to vote at any
meeting, or to participate in any distribution, or for the purpose of any
other action, the Trustees may from time to time fix a date, not more than 90
calendar days prior to the date of any meeting of the Holders or payment of
distributions or other action, as the case may be, as a record date for the
determination of the persons to be treated as holders of record for such
purposes. If the Trustees shall divide the Trust Property into two or more
series in accordance with Section 8.8 herein, nothing in this Section 8.3
shall be construed as precluding the Trustees from setting different record
dates for different series.
Section 8.4 Proxies, Etc. At any meeting of Holders, any Holder
entitled to vote thereat may vote by proxy, provided that no proxy shall be
voted at any meeting unless it shall have been placed on file with the
Secretary, or with such other officer or agent of the Trust as the Secretary
may direct, for verification prior to the time at which such vote shall be
taken.
(a) Pursuant to a resolution of a majority of the Trustees, proxies
may be solicited in the name of one or more Trustees or one or more of the
officers of the Trust. Only Holders of record shall be entitled to vote. Each
Holder shall be entitled to a vote proportionate to its Interest in the Trust.
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(b) When Interests are held jointly by several persons, any one of
them may vote at any meeting in person or by proxy in respect of such
Interest, but if more than one of them shall be present at such meeting in
person or by proxy, and such joint owners or their proxies so present disagree
as to any vote to be cast, such vote shall not be received in respect of such
Interest.
(c) A proxy purporting to be executed by or on behalf of a Holder
shall be deemed valid unless challenged at or prior to its exercise, and the
burden of proving invalidity shall rest on the challenger. If the Holder is a
minor or a person of unsound mind, and subject to guardianship or to the legal
control of any other person regarding the charge or management of its
Interest, he or she may vote by his or her guardian or such other person
appointed or having such control, and such vote may be given in person or by
proxy.
Section 8.5 Reports. The Trustees shall cause to be prepared, at
least annually, a report of operations containing a balance sheet and
statement of income and undistributed income of the Trust prepared in
conformity with generally accepted accounting principles and an opinion of an
independent public accountant on such financial statements. The Trustees
shall, in addition, furnish to the Holders at least semi-annually interim
reports containing an unaudited balance sheet as of the end of such period and
an unaudited statement of income and surplus for the period from the beginning
of the current Fiscal Year to the end of such period.
Section 8.6 Inspection of Records. The records of the Trust shall be
open to inspection by Holders during normal business hours and for any purpose
not harmful to the Trust.
Section 8.7 Voting Powers. The Holders shall have power to vote only
(a) for the election of Trustees as contemplated by Section 2.2 hereof, (b)
with respect to any investment advisory contract as contemplated by Section
4.1 hereof, (c) with respect to termination of the Trust as provided in
Section 9.2 hereof, (d) with respect to any merger, consolidation or sale of
assets as provided in Section 9.4 hereof, (e) with respect to incorporation of
the Trust to the extent and as provided in Section 9.5 hereof, (f) with
respect to such additional matters relating to the Trust as may be required by
the 1940 Act, DBTA, or any other applicable law, the Declaration, or any
registration of the Trust with the Commission (or any successor agency) or any
state, or as and when the Trustees may consider necessary or desirable.
Each Holder shall be entitled to vote based on the ratio its
Interest bears to the Interests of all-Holders entitled to vote. Until
Interests are issued, the Trustees may exercise all rights of Holders and may
take any action required by law or the Declaration to be taken by Holders.
Section 8.8 Series of Interests. The Trustees shall have the power
to divide the Trust Property into two or more series. The following provisions
shall be applicable to such series and any further series that may from time
to time be established and designated by the Trustees:
(a) All consideration received by the Trust for the issue or sale of
Interests of a particular series together with all Trust Property in which
such consideration is invested or reinvested, all income, earnings, profits,
and proceeds thereof, including any proceeds derived from the sale, exchange
or liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall
irrevocably belong to that series for all purposes, subject only to the rights
of creditors of such series and except as may otherwise be required by
applicable tax laws, and shall be so recorded upon the books of account of the
Trust. In the event that there is any Trust Property, or any income, earnings,
profits, and proceeds thereof, funds, or payments which are not readily
identifiable as belonging to any particular series, the Trustees shall
allocate
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them among any one or more of the series established and designated from time
to time in such manner and on such basis as they, in their sole discretion,
deem fair and equitable. Each such allocation by the Trustees shall be
conclusive and binding upon the Holders of all Interests for all purposes.
(b) The Trust Property belonging to each particular series shall be
charged with the liabilities of the Trust in respect of that series and all
expenses, costs, charges and reserves attributable to that series, and any
general liabilities, expenses, costs, charges or reserves of the Trust which
are not readily identifiable as belonging to any particular series shall be
allocated and charged by the Trustees to and among any one or more of the
series established and designated from time to time in such manner and on such
basis as the Trustees in their sole discretion deem fair and equitable. Each
allocation of liabilities, expenses, costs, charges and reserves by the
Trustees shall be conclusive and binding upon the Holders of all interests for
all purposes. The Trustees shall have full discretion, to the extent not
inconsistent with the 1940 Act, to determine which items shall be treated as
income and which items as capital, and each such determination and allocation
shall be conclusive and binding upon the Holders. Without limitation of the
foregoing provisions of this Section, but subject to the right of the Trustees
in their discretion to allocate general liabilities, expenses, costs, charges
or reserves as herein provided, the debts, liabilities, obligations and
expenses incurred, contracted for or otherwise existing with respect to a
particular series shall be enforceable against the assets of such series only,
and not against the assets of any other series. Notice of this limitation on
inter-series liabilities may, in the Trustee's sole discretion, be set forth
in the certificate of trust of the Trust (whether originally or by amendment)
as filed or to be filed in the Office of the Secretary of State of the State
of Delaware pursuant to the DBTA, and upon the giving of such notice in the
certificate of trust, the statutory provisions of Section 3804 of the DBTA
relating to limitations on inter-series liabilities (and the statutory effect
under Section 3804 of setting forth such notice in the certificate of trust)
shall become applicable to the Trust and each series. Every note, bond,
contract or other undertaking issued by or on behalf of a particular series
shall include a recitation limiting the obligation represented thereby to that
series and its assets.
(c) Dividends and distributions on Interests of a particular series
may be paid with such frequency as the Trustees may determine, which may be
daily or otherwise, pursuant to a standing resolution or resolution adopted
only once or with such frequency as the Trustees may determine, to the Holders
of Interests in that series, from such of the income and capital gains,
accrued or realized, from the Trust Property belonging to that series as the
Trustees may determine, after providing for actual and accrued liabilities
belonging to that series. All dividends and distributions on Interests in a
particular series shall be distributed pro rata to the Holders of Interests in
that series in proportion to the total outstanding Interests in that series
held by such Holders at the date and time of record establishment for the
payment of such dividends or distribution.
(d) The Interests in a series of the Trust shall represent
beneficial interests in the Trust Property belonging to such series. Each
Holder of Interests in a series shall be entitled to receive its pro rata
share of distributions of income and capital gains made with respect to such
series. Upon reduction or withdrawal of its Interests or indemnification for
liabilities incurred by reason of being or having been a Holder of Interests
in a series, such Holder shall be paid solely out of the funds and property of
such series of the Trust. Upon liquidation or termination of a series of the
Trust, Holders of Interests in such series shall be entitled to receive a pro
rata share of the Trust Property belonging to such series. A Holder of
Interests in a particular series of the Trust shall not be entitled to
participate in a derivative or class action lawsuit on behalf of any other
series or the Holders of Interests in any other series of the Trust.
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(e) Notwithstanding any other provision hereof, if the Trust
Property has been divided into two or more series, then on any matter
submitted to a vote of Holders of Interests in the Trust, all Interests then
entitled to vote shall be voted by individual series, except that (1) when
required by the 1940 Act, Interests shall be voted in the aggregate and not by
individual series, and (2) when the Trustees have determined that the matter
affects only the interests of Holders of Interests in a limited number of
series, then only the Holders of Interests in such series shall be entitled to
vote thereon. Except as otherwise provided in this Article VIII, the Trustees
shall have the power to determine the designations, preferences, privileges,
limitations and rights, including voting and dividend rights, of each series
of Interests.
(f) The establishment and designation of any series of Interests
other than those set forth above shall be effective upon the execution by a
majority of the then Trustees of an instrument setting forth such
establishment and designation and the relative rights and preferences of such
series, or as otherwise provided in such instrument. At any time that there
are no Interests outstanding of any particular series previously established
and designated, the Trustees may by an instrument executed by a majority of
their number abolish that series and the establishment and designation
thereof. Each instrument referred to in this paragraph shall have the status
of an amendment to this Declaration.
(g) If the Trust Property has been divided into two or more series,
then Section 9.2 of this Agreement shall apply also with respect to each such
series as if such series were a separate trust.
(h) The Trustees shall be authorized to issue an unlimited number of
Interests of each series.
(i) Subject to compliance with the requirements of the 1940 Act, the
Trustees shall have the authority to provide that Holders of Interests of any
series shall have the right to convert said Interests into one or more other
series in accordance with such requirements and procedures as may be
established by the Trustees.
Section 8.9 Holder Action by Written Consent. Any action which may
be taken by Holders may be taken without notice and without a meeting if
Holders holding more than 50% of the total Interests entitled to vote (or such
larger proportion thereof as shall be required by any express provision of
this Declaration) shall consent to the action in writing and the written
consents shall be filed with the records of the meetings of Holders. Such
consents shall be treated for all purposes as votes taken at a meeting of
Holders.
Section 8.10 Holder Communications. Whenever ten or more Holders who
have been such for at least six months preceding the date of application, and
who hold in the aggregate at least 1% of the total Interests, shall apply to
the Trustees in writing, stating that they wish to communicate with other
Holders with a view to obtaining signatures to a request for a meeting of
Holders and accompanied by a form of communication and request which they wish
to transmit, the Trustees shall within five business days after receipt of
such application either (1) afford to such applicants access to a list of the
names and addresses of all Holders as recorded on the books of the Trust; or
(2) inform such applicants as to the approximate number of Holders, and the
approximate cost of transmitting to them the proposed communication and form
of request.
If the Trustees elect to follow the course specified in clause (2)
above, the Trustees, upon the written request of such applicants, accompanied
by a tender of the material to be transmitted and of the reasonable expenses
of transmission, shall, with reasonable promptness, transmit, by United States
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mail or by electronic transmission, such material to all Holders at their
addresses as recorded on the books, unless within five business days after
such tender the Trustees shall transmit, by United States mail or by
electronic transmission, to such applicants and file with the Commission,
together with a copy of the material to be transmitted, a written statement
signed by at least a majority of the Trustees to the effect that in their
opinion either such material contains untrue statements of fact or omits to
state facts necessary to make the statements contained therein not misleading,
or would be in violation of applicable law, and specifying the basis of such
opinion. The Trustees shall thereafter comply with any order entered by the
Commission and the requirements of the 1940 Act and the Securities Exchange
Act of 1934.
ARTICLE IX: DURATION; TERMINATION OF TRUST; AMENDMENT; MERGERS; ETC.
Section 9.1 Duration. Subject to possible termination in accordance
with the provisions of Section 9.2, the Trust created hereby shall continue
perpetually pursuant to Section 3808 of DBTA.
Section 9.2 Termination of Trust.
(a) The Trust may be terminated (i) by the affirmative vote of the
Holders of not less than two-thirds of the Interests in the Trust at any
meeting of the Holders, or (ii) by an instrument in writing, without a
meeting, signed by a majority of the Trustees and consented to by the Holders
of not less than two-thirds of such Interests, or (iii) by the Trustees by
written notice to the Holders. Upon any such termination:
(i) The Trust shall carry on no business except for the purpose of
winding up its affairs.
(ii) The Trustees shall proceed to wind up the affairs of the Trust
and all of the powers of the Trustees under this Declaration shall continue
until the affairs of the Trust shall have been wound up, including the power
to fulfill or discharge the contracts of the Trust, collect its assets, sell,
convey, assign, exchange, or otherwise dispose of all or any part of the
remaining Trust Property to one or more Persons at public or private sale for
consideration which may consist in whole or in part of cash, securities or
other property of any kind, discharge or pay its liabilities, and do all other
acts appropriate to liquidate its business; provided that any sale,
conveyance, assignment, exchange, or other disposition of all or substantially
all of the Trust Property shall require approval of the principal terms of the
transaction and the nature and amount of the consideration by the Holders by a
Majority Interests Vote.
(iii) After paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities and refunding
agreements, as they deem necessary for their protection, the Trustees may
distribute the remaining Trust Property, in cash or in kind or partly each,
among the Holders according to their respective rights.
(b) Upon termination of the Trust and distribution to the Holders as
herein provided, a majority of the Trustees shall execute and lodge among the
records of the Trust an instrument in writing setting forth the fact of such
termination and file a certificate of cancellation in accordance with Section
3810 of the DBTA. Upon termination of the Trust, the Trustees shall thereon be
discharged from all further liabilities and duties hereunder, and the rights
and interests of all Holders shall thereupon cease.
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<PAGE>
Section 9.3 Amendment Procedure.
(a) All rights granted to the Holders under this Declaration of
Trust are granted subject to the reservation of the right of the Trustees to
amend this Declaration of Trust as herein provided, except as set forth herein
to the contrary. Subject to the foregoing, the provisions of this Declaration
of Trust (whether or not related to the rights of Holders) may be amended at
any time, so long as such amendment is not in contravention of applicable law,
including the 1940 Act, by an instrument in writing signed by a majority of
the then Trustees (or by an officer of the Trust pursuant to the vote of a
majority of such Trustees). Any such amendment shall be effective as provided
in the instrument containing the terms of such amendment or, if there is no
provision therein with respect to effectiveness, upon the execution of such
instrument and of a certificate (which may be a part of such instrument)
executed by a Trustee or officer of the Trust to the effect that such
amendment has been duly adopted.
(b) No amendment may be made, under Section 9.3(a) above, which
would change any rights with respect to any Interest in the Trust by reducing
the amount payable thereon upon liquidation of the Trust, by repealing the
limitations on personal liability of any Holder or Trustee, or by diminishing
or eliminating any voting rights pertaining thereto, except with a Majority
Interests Vote.
(c) A certification signed by a majority of the Trustees setting
forth an amendment and reciting that it was duly adopted by the Holders or by
the Trustees as aforesaid or a copy of the Declaration, as amended, and
executed by a majority of the Trustees, shall be conclusive evidence of such
amendment when lodged among the records of the Trust.
(d) Notwithstanding any other provision hereof, until such time as
Interests are first sold, this Declaration may be terminated or amended in any
respect by the affirmative vote of a majority of the Trustees or by an
instrument signed by a majority of the Trustees.
Section 9.4 Merger, Consolidation and Sale of Assets. The Trust, or
any series thereof, may merge or consolidate with any other corporation,
association, trust or other organization or may sell, lease or exchange all or
substantially all of its property, including its good will, upon such terms
and conditions and for such consideration when and as authorized by no less
than a majority of the Trustees and by a Majority Interests Vote of the Trust
or such series, as the case may be, or by an instrument or instruments in
writing without a meeting, consented to by the Holders of not less than 50% of
the total Interests of the Trust or such series, as the case may be, and any
such merger, consolidation, sale, lease or exchange shall be deemed for all
purposes to have been accomplished under and pursuant to the statutes of the
State of Delaware. In accordance with Section 3815(f) of DBTA, an agreement of
merger or consolidation may effect any amendment to the Declaration or effect
the adoption of a new declaration of trust if the Trust is the surviving or
resulting business trust. A certificate of merger or consolidation of the
Trust shall be signed by a majority of the Trustees.
Section 9.5 Incorporation. Upon a Majority Interests Vote, the
Trustees may cause to be organized or assist in organizing a corporation or
corporations under the laws of any jurisdiction or any other trust,
partnership, association or other organization to take over all of the Trust
Property or to carry on any business in which the Trust shall directly or
indirectly have any interest, and to sell, convey and transfer the Trust
Property to any such corporation, trust, association or organization in
exchange for the equity interests thereof or otherwise, and to lend money to,
subscribe for the equity interests of, and enter into any contracts with any
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<PAGE>
such corporation, trust, partnership, association or organization, or any
corporation, partnership, trust, association or organization in which the
Trust holds or is about to acquire equity interests. The Trustees may also
cause a merger or consolidation between the Trust or any successor thereto and
any such corporation, trust, partnership, association or other organization if
and to the extent permitted by law, as provided under the law then in effect.
Nothing contained herein shall be construed as requiring approval of the
Holders for the Trustees to organize or assist in organizing one or more
corporations, trusts, partnerships, associations or other organizations and
selling, conveying or transferring a portion of the Trust Property to such
organizations or entities.
ARTICLE X: MISCELLANEOUS
Section 10.1 Certificate of Designation; Agent for Service of
Process. The Trust shall file, in accordance with Section 3812 of DBTA, in the
office of the Secretary of State of Delaware, a certificate of trust, in the
form and with such information required by Section 3810 by DBTA and executed
in the manner specified in Section 3811 of DBTA. In the event the Trust does
not have at least one Trustee qualified under Section 3807(a) of DBTA, then
the Trust shall comply with Section 3807(b) of DBTA by having and maintaining
a registered office in Delaware and by designating a registered agent for
service of process on the Trust, which agent shall have the same business
office as the Trust's registered office. The failure to file any such
certificate, to maintain a registered office, to designate a registered agent
for service of process, or to include such other information shall not affect
the validity of the establishment of the Trust, the Declaration or any action
taken by the Trustees, the Trust officers or any other Person with respect to
the Trust except insofar as a provision of the DBTA would have governed, in
which case the Delaware common law governs.
Section 10.2 Governing Law. This Declaration is executed by all of
the Trustees and delivered with reference to DBTA and the laws of the State of
Delaware, and the rights of all parties and the validity and construction of
every provision hereof shall be subject to and construed according to DBTA and
the laws of the State of Delaware (unless and to the extent otherwise provided
for and/or preempted by the 1940 Act or other applicable federal securities
law); provided, however, that there shall not be applicable to the Trust, the
Trustees or this Declaration (a) the provisions of Section 3540 of Title 12 of
the Delaware Code or (b) any provisions of the laws (statutory or common) of
the State of Delaware (other than the DBTA) pertaining to trusts which are
inconsistent with the rights, duties, powers, limitations or liabilities of
the Trustees set forth or referenced in this Declaration.
Section 10.3 Counterparts. This Declaration may be simultaneously
executed in several counterparts, each of which shall be deemed to be an
original, and such counterparts, together, shall constitute one and the same
instrument, which shall be sufficiently evidenced by any such original
counterpart.
Section 10.4 Reliance by Third Parties. Any certificate executed by
an individual who, according to the records of the Trust or of any recording
office in which this Declaration may be recorded, appears to be a Trustee
hereunder, certifying to (a) the number or identity of Trustees or Holders,
(b) the due authorization of the execution of any instrument or writing, (c)
the form of any vote passed at a meeting of Trustees or Holders, (d) the fact
that the number of Trustees or Holders present at any meeting or executing any
written instrument satisfies the requirements of this Declaration, (e) the
identity of any officers elected by the Trustees, or (f) the existence of any
fact or facts which in any manner relate to the affairs of the Trust, shall be
conclusive evidence as to the matters so certified in favor of any person
dealing with the Trustees and their successors.
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<PAGE>
Section 10.5 Provisions in Conflict with Law or Regulations.
(a) The provisions of this Declaration are severable, and if the
Trustees shall determine, with the advice of counsel, that any of such
provisions is in conflict with the 1940 Act, the DBTA, or with other
applicable laws and regulations, the conflicting provisions shall be deemed
never to have constituted a part of this Declaration; provided, however, that
such determination shall not affect any of the remaining provisions of this
Declaration or render invalid or improper any action taken or omitted prior to
such determination.
(b) If any provision of this Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of this
Declaration in any jurisdiction.
Section 10.6 Trust Only. It is the intention of the Trustees to
create only a business trust under DBTA with the relationship of Trustee and
beneficiary between the Trustees and each Holder from time to time. It is not
the intention of the Trustees to create a general partnership, limited
partnership, joint stock association, corporation, bailment, or any form of
legal relationship other than a Delaware business trust except to the extent
such trust is deemed to constitute a corporation under the Code and applicable
state tax laws. Nothing in this Declaration of Trust shall be construed to
make the Holders, either by themselves or with the Trustees, partners or
members of a joint stock association.
Section 10.7 Withholding. Should any Holder be subject to
withholding pursuant to the Code or any other provision of law, the Trust
shall withhold all amounts otherwise distributable to such Holder as shall be
required by law and any amounts so withheld shall be deemed to have been
distributed to such Holder under this Declaration of Trust. If any sums are
withheld, pursuant to this provision, the Trust shall remit the sums so
withheld to and file the required forms with the Internal Revenue Service, or
other applicable government agency.
Section 10.8 Headings and Construction. Headings are placed herein
for convenience of reference only and shall not be taken as a part hereof or
control or affect the meaning, construction or effect of this instrument.
Whenever the singular number is used herein, the same shall include the
plural; and the neuter, masculine and feminine genders shall include each
other, as applicable.
IN WITNESS WHEREOF the undersigned has caused this Declaration of
Trust to be executed as of the day and year first above written.
/s/ Malcolm R. Fobes III November 25, 1996
________________________________________ _______________________
Malcolm R. Fobes III, Trustee Date
/s/ Ronald G. Seger November 25, 1996
________________________________________ _______________________
Ronald G. Seger, Trustee Date
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<PAGE>
ADDENDUM TO
DECLARATION OF TRUST
OF
BERKSHIRE CAPITAL INVESTMENT TRUST
ADDENDUM TO DECLARATION OF TRUST OF BERKSHIRE CAPITAL INVESTMENT
TRUST, executed this 25th day of June, 1997, by and among Malcolm R. Fobes III
and Ronald G. Seger (collectively the "Trustees").
WHEREAS, on November 25, 1996 Trustees entered into Declaration of
Trust (the "Declaration"); and
WHEREAS, on June 25, 1997, the Trustees desired to appoint two (2)
additional Trustees of the Berkshire Capital Investment Trust (the "Trust")
and in connection therewith, to execute an addendum to the Declaration which
binds the new Trustees to the terms and conditions of the Declaration;
NOW, THEREFORE, in consideration of the mutual promises contained
herein, it is agreed that the undersigned Trustees understand the terms and
conditions of the Declaration, agree to be bound by the terms and conditions
of the Declaration and consent and agree to perform the duties and obligations
of Trustees under the Declaration.
IN WITNESS WHEREOF, the parties have caused the Addendum to be
executed as of the date first written above.
/s/ Leland F. Smith
________________________________
Leland F. Smith, Trustee
/s/ Arthur J. Hopper
________________________________
Arthur J. Hopper, Trustee
<PAGE>
CERTIFICATE OF CONSENT
OF THE TRUSTEES
OF THE
BERKSHIRE CAPITAL INVESTMENT TRUST
The undersigned, being Trustees of the Berkshire Capital Investment
Trust (the "Trust"), do hereby adopt the following resolutions effective as of
June 25, 1997.
WHEREAS, the Trustees deem it to be in the best interest of the
Trust to establish an initial series of the Trust;
NOW, THEREFORE, BE IT RESOLVED, the Trustees hereby adopt the
initial series of the Trust, which shall be named Berkshire Capital Growth &
Value Fund, subject to the following restrictions:
These fundamental investment restrictions cannot be changed without
approval by the holders of a majority of the outstanding voting securities of
the Series. As defined in the Investment Company Act of 1940 (the "Act"), the
"vote of a majority of the outstanding voting securities" means the lesser of
the vote of (i) 67% of the shares of the Fund at a meeting where more than 50%
of the outstanding shares are present in person or by proxy or (ii) more than
50% of the outstanding shares of the Fund.
The Fund may not:
(a) Act as underwriter for securities of other issuers except insofar as the
Fund may be deemed an underwriter in selling its own portfolio securities.
(b) Borrow money or purchase securities on margin except for temporary or
emergency (not leveraging) purposes, including the meeting of redemption
requests that might otherwise require the untimely disposition of securities,
in an aggregate amount not exceeding 25% of the value of the Fund's total
assets at the time any borrowing is made. While the Fund's borrowings are in
excess of 5% of its total assets, the Fund will not purchase any additional
portfolio securities.
(c) Sell securities short.
(d) Invest in securities of other investment companies except as part of a
merger, consolidation, or purchase of assets approved by the Fund's
shareholders or by purchases with no more than 10% of the Fund's assets in the
open market involving only customary broker's commissions.
(e) Make investments in commodities, commodity contracts or real estate
although the Fund may purchase and sell securities of companies which deal in
real estate or interests therein.
(f) Make loans. The purchase of a portion of a readily marketable issue of
publicly distributed bonds, debentures or other debt securities will not be
considered the making of a loan.
(g) Acquire more than 10% of the securities of any class of another issuer,
treating all preferred securities of an issuer as a single class and all debt
securities as a single class, or acquire more than 10% of the voting
securities of another issuer.
(h) Invest in companies for the purpose of acquiring control.
(i) Purchase or retain securities of any issuer if those officers, directors
or trustees of the Fund or its Investment Adviser individually owns more than
1/2 of 1% of any class of security or collectively own more than 5% of such
class of securities of such issuer.
(j) Pledge, mortgage or hypothecate any of its assets.
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<PAGE>
(k) Invest in securities which may be subject to registration under the
Securities Act of 1933 prior to sale to the public or which are not at the
time of purchase readily saleable.
(l) Invest more than 10% of the total Fund assets, taken at market value at
the time of purchase, in securities of companies with less than three years'
continuous operation, including the operations of any predecessor.
(m) Issue senior securities.
(n) Acquire any securities of companies within one industry if, as a result of
such acquisition, more than 25% of the value of the Fund's total assets would
be invested in securities of companies within such industry; provided,
however, that there shall be no limitation on the purchase of securities of
companies in the electronic technology industry.
With respect to fundamental restriction (n) above, companies in the electronic
technology industry shall be defined as businesses which are principally
engaged in the development, production, or distribution of products or
services related to the following business segments: Computers, Computer
Peripherals, Semiconductors, Software, Telecommunications and Mass Storage
Devices.
In connection with its investment objective and policies the Fund may,
however, invest in the following types of securities which can involve certain
risks:
U.S. Government Securities: The Fund may purchase securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities. Such
securities will typically include, without limitation, U.S. Treasury
securities such as Treasury Bills, Treasury Notes or Treasury Bonds that
differ in their interest rates, maturities and times of issuance.
Bank Obligations: The Fund may invest in bank obligations, including
certificates of deposit, time deposits, banker's acceptances and other
short-term obligations of banks, savings and loan associations and other
banking institutions.
Warrants: The Fund may purchase warrants, valued at the lower of cost or
market, but only to the extent that such purchase does not exceed 5% of the
Fund's net assets at the time of purchase. Included within that amount, but
not to exceed 2% of the Fund's net assets, may be warrants which are not
listed on the New York or American Stock Exchanges.
IN WITNESS WHEREOF the undersigned, being the Trustees of the Trust,
have hereunto set their hands and seals, to be effective as of the date first
above written.
/s/ Malcolm R. Fobes III June 25, 1997
________________________________________ _______________________
Malcolm R. Fobes III, Trustee Date
/s/ Ronald G. Seger June 25, 1997
________________________________________ _______________________
Ronald G. Seger, Trustee Date
<PAGE>
INVESTMENT ADVISORY AGREEMENT
THIS INVESTMENT ADVISORY AGREEMENT ("Agreement"), is made and
entered into this 26th day of June, 1997 by and between Berkshire Capital
Investment Trust, a Delaware business trust (the "Fund"), and Berkshire
Capital Holdings, Inc., a California corporation (the "Investment Adviser").
W I T N E S S E T H:
WHEREAS, the Fund, and open-end, non-diversified investment company
registered under the Investment Company Act of 1940 (the "1940 Act"), wishes
to retain the Investment Adviser to provide investment advisory services to
the Fund; and
WHEREAS, the Investment Adviser is willing to furnish such services
on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and mutual
covenants herein contained, it is agreed as follows:
1. Employment of the Investment Adviser. The Fund hereby appoints the
Investment Adviser to manage the investment and reinvestment of assets of the
Berkshire Capital Growth & Value Fund and any other portfolio of the Fund
which may be hereafter designated as a separate series for the period and on
the terms set forth in this Agreement. The Investment Adviser accepts such
appointment and agrees to render the services herein set forth, for the
compensation herein provided.
2. Obligations of the Fund. The Fund shall at all times inform the
Investment Adviser as to the securities owned by it, the funds available or to
become available for investment by it, and generally as to the condition of
its affairs. It shall furnish the Investment Adviser with such other documents
and information with regard to its affairs as the Investment Adviser may from
time to time reasonably request.
3. Obligations of the Investment Adviser. Subject to the direction
and control of the Fund's Board of Trustees, the Investment Adviser shall
regularly provide the Fund with investment research, advice, management and
supervision and shall furnish a continuous investment program for the Fund's
portfolio of securities consistent with the Fund's investment objective,
policies, and limitations as stated in the Fund's current Prospectus and
Statement of Additional Information. The Investment Adviser shall determine
from time to time what securities will be purchased, retained or sold by the
Fund, and shall implement those decisions, all subject to the provisions of
the Fund's Declaration of Trust, the 1940 Act, the applicable rules and
regulations of the Securities and Exchange Commission, and other applicable
federal and state laws, as well as the investment objectives, policies, and
limitations of the Fund. In placing orders for the Fund with brokers and
dealers with respect to the execution of the Fund's securities transactions,
the Investment Adviser shall attempt to obtain the best net results. In doing
so, the Investment Adviser may consider such factors which it deems relevant
to the Fund's best interest, such as price, the size of the transaction, the
nature of the market for the security, the amount of the commission, the
timing of the transaction, the reputation, experience and financial stability
of the broker-dealer involved and the quality of service rendered by the
broker-dealer in other
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<PAGE>
transactions. The Investment Adviser shall have the discretionary authority to
utilize certain broker-dealers even though it may result in the payment by the
Fund of an amount of commission for effecting a securities transaction in
excess of the amount of commission another broker-dealer would have charged
for effecting that transaction, providing, however, that the Investment
Adviser had determined that such amount of commission was reasonable in
relation to the value of the brokerage and research services provided by the
broker-dealer effecting the transaction. In no instance will portfolio
securities be purchased from or sold to the Investment Adviser or any
affiliated person thereof except in accordance with the rules and regulations
promulgated by the Securities and Exchange Commission pursuant to the 1940
Act. The Investment Adviser shall also provide advice and recommendations with
respect to other aspects of the business and affairs of the Fund and shall
perform such other functions of management and supervision as may be directed
by the Board of Trustees of the Fund, provided that in no event shall the
Investment Adviser be responsible for any expense occasioned by the
performance of such functions.
4. Expenses of the Fund. The Investment Adviser is responsible for
(i) the compensation of any of the Fund's trustees, officers and employees who
are interested persons of the Investment Adviser, (ii) compensation of the
Investment Adviser's personnel and other expenses in connection with the
provisions of portfolio management services under this Agreement, and (iii)
expenses of printing and distributing the Fund's prospectus and sales and
advertising materials to prospective clients. Other than as herein
specifically indicated, the Investment Adviser shall not be responsible for
the Funds expenses. Specifically, the Investment Adviser will not be
responsible, except to the extent of the reasonable compensation of employees
of the Fund whose services may be used by the Investment Adviser hereunder,
for any of the following expenses of the Fund, which expenses shall be borne
by Fund: legal and audit expenses, organizational expenses; interest; taxes;
governmental fees; industry association fees; the cost (including brokerage
commissions or charges, if any) of securities purchased or sold by the Fund
and any losses incurred in connection herewith; fees, if any, of custodians,
transfer agents, registrars or other agents; distribution fees; expenses of
preparing share certificates; expenses relating to the redemption or
repurchase of the Fund's shares; fees and expenses of registering the Fund's
shares under the federal securities laws and of qualifying its shares under
applicable state Blue Sky laws, including expenses attendant upon renewing
such registrations and qualifications; expenses of preparing, setting in
print, printing and distributing prospectuses, proxy statements, reports,
notices, and dividends to fund shareholders; cost of stationary; costs of
shareholders and other meetings of the Fund; compensation and expenses of the
independent trustees of the Fund; fidelity bond and other insurance covering
the Fund and its officers and trustees.
5. Limitations on Salaries. No trustee, officer or employee of the
Fund shall receive from the Fund any salary or other compensation as such
trustee, officer or employee while he is at the same time director, officer or
employee of the Investment Adviser or any affiliated company of the Investment
Adviser. This paragraph shall not apply to trustees, executive committee
members, consultants and other persons who are not regular members of the
Investment Adviser's or any affiliated company's staff.
6. Compensation. As compensation for the services performed by the
Investment Adviser, the Fund shall pay the Investment Adviser, as promptly as
possible after the last day of each month, a fee, accrued each calendar day
(including weekends and holidays) at a rate of 1.5% per annum of the daily net
assets of the Fund. The Investment Adviser shall reduce such fee or, if
necessary, make payments to the Fund to the extent required to satisfy any
limitations with respect thereto imposed by the securities laws or regulations
thereunder of any state in which the Fund's shares are qualified for sale. The
daily net assets of the Funds shall be computed as of the time of the regular
close of business of the New York Stock Exchange, or such other time as may be
determined by the Board of Trustees of the Fund. Any of such payments as to
which the Investment Adviser may so request shall be accompanied by a report
of the Fund prepared either by the Fund or by a reputable firm of independent
accountants which shall show the amount properly payable to the Investment
Adviser under this Agreement and detailed computation thereof.
<PAGE>
7. Limitation of Liability. The Investment Adviser assumes no
responsibility under this Agreement other than to render the services called
for hereunder in good faith, and shall not be responsible for any action of
the Board of Trustees of the Fund in the following or declining to follow any
advice or recommendation of the Investment Adviser; provided that nothing in
this Agreement shall protect the Investment Adviser against any liability to
the Fund or its stockholders to which it would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence in the performance of
its duties or by reason of its reckless disregard of its obligations and
duties hereunder.
8. Independent Contractor. The Investment Adviser shall be an
independent contractor and shall have no authority to act for or represent the
Fund in its investment commitments unless otherwise provided. No agreement,
bid, offer, commitment, contract or other engagement entered into by the
Investment Adviser whether on behalf of the Investment Adviser or whether
purporting to have been entered unto on behalf of the Fund shall be binding
upon the Fund, and all acts authorized to be done by the Investment Adviser
under this Agreement shall be done by it as an independent contractor and not
as an agent.
9. Activities of the Investment Adviser. Nothing in this Agreement
shall limit or restrict the right of any director, officer, or employee of the
Investment Adviser who may also be a trustee, officer, or employee of the
Fund, to engage in any other business or to devote his time and attention in
part to the management or other aspects of any other business, whether of a
similar nature or dissimilar nature, nor to limit or restrict the right of the
Investment Adviser to engage in any other business or to render services of
any kind, including investment advisory services, to any other corporation,
firm, individual or association.
10. Definitions. As used in this Agreement, the terms "assignment,"
"interested person," and "majority of the outstanding voting securities" shall
have meanings given to them by Section 2(a) of the 1940 Act, subject to such
exemptions as may be granted by the Securities and Exchange Commission by any
rule, regulation or order.
11. Termination. This Agreement shall terminate automatically in the event
of its assignment by the Investment Adviser and shall not be assignable by the
Fund without consent of the Investment Adviser. This Agreement may also be
terminated at any time, without payment of penalty (i) by the Fund either by
vote of the Board of Trustees of the Fund or by vote of a majority of the
outstanding voting securities of the Fund, on 60 days written notice to the
Investment Adviser, or (ii) by the Investment Adviser on 60 days written
notice to the Fund. Upon the termination of this agreement, the obligations of
all the parties hereunder shall cease and terminate as of the date of such
termination, except for any obligation to respond for a breach of this
Agreement committed prior to such termination and except or the obligation of
the Fund to pay to the Investment Adviser the fee provided in Paragraph 6
hereof, prorated to the date of termination.
12. Term. This Agreement shall become effective on the effective date of
the first public offering of the Fund's shares and shall continue in effect
for one year and from year to year thereafter only so long as specifically
approved annually by (i) the Fund's Board of Trustees and by a vote of the
holders of a majority of the outstanding voting securities of the Fund, or
(ii) a majority of the Trustees who are not parties to the 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.
13. Amendments. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed
by the party against which enforcement of the change, waiver, discharge or
termination is sought, and no material amendment of this agreement shall be
effective until approved by vote of the holders of a majority of the Fund's
outstanding voting securities.
<PAGE>
14. Severability. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. This agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and sealed by their officers thereunto duly authorized on the day
and year first above written.
ATTEST: BERKSHIRE CAPITAL INVESTMENT TRUST
/s/ Ronald G. Seger /s/ Malcolm R. Fobes III
By: ____________________________ By: _____________________________
Ronald G. Seger, Malcolm R. Fobes III,
Secretary President
ATTEST: BERKSHIRE CAPITAL HOLDINGS, INC.
/s/ Ronald G. Seger /s/ Malcolm R. Fobes III
By: ____________________________ By: _____________________________
Ronald G. Seger, Secretary Malcolm R. Fobes III,
Secretary Chairman & CEO
<PAGE>
ADMINISTRATION AGREEMENT
THIS ADMINISTRATION AGREEMENT ("Agreement"), is made this 26th day
of June, 1997, by and between Berkshire Capital Investment Trust, a Delaware
business trust (the "Fund"), and Berkshire Capital Holdings, Inc., a
California corporation (the "Administrator").
W I T N E S S E T H:
WHEREAS, the Fund is engaged in business as a non-diversified
open-end management investment company and is to be registered as such under
the Investment Company Act of 1940, as amended (the "Act"); and
WHEREAS, the Administrator is engaged in the business of rendering
administrative and supervisory services to investment companies; and
WHEREAS, the Fund desires to retain the Administrator to render
supervisory and corporate administrative services to the Fund in the manner
and on the terms hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises and
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Employment of the Administrator. The Fund hereby employs the
Administrator to administer the affairs of the Fund subject to the direction
of the Board of Trustees and the officers of the Fund, for the period and on
the terms hereinafter set forth. The Administrator hereby accepts such
employment and agrees during such period to render the services and to assume
the obligations herein set forth for the compensation herein provided. The
Administrator shall devote such time as is necessary to carry out and shall at
all times faithfully, with diligence and to the best of its ability, perform
all of the duties required of it by the Fund hereunder.
2. Obligations of the Administrator. The Administrator shall, at its
expense, establish and maintain separate books of account and other records
reasonably appropriate for the operation of the business of the Fund,
including such entries and supporting documents as may be necessary or
appropriate for the purpose of showing all the transactions made or committed
on behalf of the Fund, and shall supervise all accounting procedures and
audits. All books and records shall be maintained in such form and detail as
may be required by applicable law. The Administrator shall oversee the
maintenance of all books and records with respect to the Fund's securities
transactions and the Fund's book of account in accordance with all applicable
federal and state laws and regulations. The Administrator, at its expense,
shall supply the Board of Trustees and officers of the Fund with all
statistical information and reports reasonably required by it and reasonably
available to the Administrator and furnish the Fund with office facilities,
including space, furniture and equipment and all personnel reasonably
necessary for the operation of the Fund. In compliance with the requirements
of Rule 31a-3 under the Act, the Administrator hereby agrees that any records
which it maintains for the Fund are the property of the Fund and further
agrees to surrender promptly to the Fund any of such records upon the Fund's
request. The Administrator further agrees to arrange for the preservation of
the records required to be maintained by Rule 31a-1 under the Act for the
periods prescribed by Rule 31a-2 under the Act.
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The Administrator covenants and agrees that it will maintain, or
will otherwise have available to it, facilities and staff, including
managerial, administrative and technical, as shall be necessary and adequate,
in all material respects, to perform properly its obligations hereunder.
3. Expenses of the Fund. The Administrator assumes and shall pay for
maintaining its staff and personnel, and shall at its own expense provide the
equipment, office space and facilities necessary to perform its obligations
under this Agreement. In addition, the Administrator assumes and shall pay all
ordinary expenses of the Fund, including, without limitation: (a)
organizational costs, (b) compensation of the Investment Adviser's personnel
and payment of other expenses in connection with provision of portfolio
management services, (c) compensation of any of the Fund's trustees, officers
or employees who are not interested persons of the Investment Adviser or its
affiliates, (d) fees and expenses of registering the Fund's shares under the
federal securities laws and of qualifying its shares under applicable state
Blue Sky laws, including expenses attendant upon renewing such registrations
and qualifications, (e) insurance premiums, (f) fidelity bonds, (g) accounting
and bookkeeping costs and expenses necessary to maintain the Fund's books and
records, (h) outside auditing and ordinary legal expenses, (i) all costs
associated with shareholders meetings and the preparation and dissemination of
proxy solicitation materials, (j) costs of printing and distribution of the
Fund's Prospectus and other shareholder information to existing shareholders,
(k) charges, if any, of custodian and dividend disbursing agent's fees, (l)
industry association fees, and (m) costs of independent pricing services and
calculation of daily net asset value. The Administrator may, at its
discretion, assume any additional expenses ordinarily assumed by the Fund when
it determines that such action is in the best interest of the shareholders.
Any extraordinary and non-recurring expenses shall be paid by the Fund.
4. Compensation. As compensation for the services rendered, the
facilities furnished and the expenses assumed by the Administrator, the Fund
shall pay to the Administrator, in arrears, within ten days after the end of
each calendar month, a fee, accrued each calendar day (including weekends and
holidays) at a rate of 0.50% per annum of the Fund's average daily net assets
up to $50 million, 0.45% of such assets from $50 million to $200 million,
0.40% of such assets from $200 million to $500 million, 0.35% of such assets
from $500 million to $1 billion, and 0.30% of such assets in excess of $1
billion for such month as determined and computed in accordance with the
description of the method of determination of net asset value contained in the
Fund's Prospectus and Statement of Additional Information.
5. Expense Limitation. If, in any fiscal year, the aggregate expenses
of the Fund (including advisory, administrative and transfer agency fees, but
excluding interest, local, state and federal taxes), exceed the expense
limitations of any state having jurisdiction over the Fund, then the fee paid
to the Administrator hereunder will be reduced pro rata (but not below zero)
to the extent required by such expense limitation. The Administrator will bear
its pro rata share of any such fee reduction based on the percentage that the
Administrator's fee bears to the total administrative and advisory fees paid
by the Fund to the Administrator and to the investment adviser of the Fund,
for the month and year in which this Agreement becomes effective or
terminates, there shall be an appropriate proration of said fee reduction
based on the number of days that the Agreement is in effect during such month
and year, respectively.
6. Inspection of Books and Records. Manager shall, upon reasonable
notice, permit the Fund and its duly authorized representatives to inspect and
to audit, for any purposes whatsoever, all of the books of account, documents,
records, papers and files in the custody or possession of the Administrator
relating in any manner to the business of the Fund. All expenses involved in
such audit or inspection will be borne by the Fund.
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7. Independent Contractor. The Administrator is for all purposes
hereunder an independent contractor, free from control, direction or
supervision of the Fund and any persons engaged by the Administrator in the
performance of the Administrator's duties hereunder are solely the employees
or agents of the Administrator. The parties hereto intend and contemplate that
their relationship shall not be construed, nor shall any provision of this
Agreement be interpreted, so as to create a partnership or joint venture
between them or their respective successors in interest and, except as
expressly provided or authorized, neither party shall have the authority to
act for, represent or bind the other or otherwise be deemed an agent of the
other.
8. Activities of the Administrator. The services of the Administrator
to the Fund hereunder are not to be deemed exclusive and the Administrator
shall be free to render similar services to others. Subject to, and in
accordance with the Declaration of Trust and By-Laws of the Fund and Section
10(a) of the Act, it is understood that trustees, officers, agents and
beneficial holders of the Fund are or may be "interested persons" (as defined
in the Act) of the Administrator of its affiliates, and that directors,
officers, agents or shareholders of the Administrator of its affiliates are or
may be "interested persons" of the Fund as beneficial holders or otherwise.
9. Limitation of Liability. In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Administrator, the Administrator shall not be
liable to the Fund or to any beneficial holder of the Fund for any act or
omission in the course of, or in connection with, rendering services hereunder
or for any losses that may be sustained in the purchase, holding or sale of
any security.
10. Term. This Agreement shall become effective on the effective date of
the first public offering of the Fund's shares and shall continue in effect
for one year and from year to year thereafter only so long as specifically
approved annually by (i) the Fund's Board of Trustees and by a vote of the
holders of a majority of the outstanding voting securities of the Fund, or
(ii) a majority of the Trustees who are not parties to the 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.
11. Termination. This Agreement may be terminated at any time without the
payment of any penalty (i) by the Fund either by vote of the Board of Trustees
of the Fund or by vote of a majority of the outstanding voting securities of
the Fund, on 60 days written notice to the Administrator, or (ii) by the
Administrator on 60 days written notice to the Fund.
12. Amendments. This Agreement may be amended by the parties only if such
amendment is specifically approved by (i) the Board of Trustees of the Fund
and by a vote of the holders of a majority of the outstanding voting
securities of the Fund, or (ii) a majority of those trustees of the Fund 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.
13. Notices. Any notice required or desired to be given hereunder shall be
in writing and shall be considered effective (i) when delivered, if by
personal delivery, (ii) upon receipt, if sent by FAX, which FAX has been
telephonically confirmed, between the hours of 9:00 a.m. and 5:00 p.m. local
time of the recipient on a business day, or if not, at 9:00 a.m., local time
on the next business day, or (iii) upon the earlier of actual or first
attempted delivery, if mailed, postage prepaid, addressed as follows:
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If to the Administrator:
Berkshire Capital Holdings, Inc.
475 Milan Drive, #103
San Jose, California 95134-2453
FAX No.: (408) 562-6501
Telephone No.: (408) 526-0707
If to the Fund:
Berkshire Capital Investment Trust
475 Milan Drive, #103
San Jose, California 95134-2453
FAX No.: (408) 562-6501
Telephone No.: (408) 526-0707
or to such other address as the party shall have furnished in writing in
accordance with the provisions of this Section 13.
14. Entire Agreement. This Agreement constitutes the entire agreement of
the parties with respect to the subject matter hereof, and supersedes all
prior negotiations or agreements, whether written or oral.
15. Inurement. This Agreement shall inure to the benefit of and be binding
upon the Fund, the Administrator, and their respective successors, transferees
and assigns.
16. Assignment. Except as otherwise expressly provided herein, the rights
and obligations of the parties pursuant to this Agreement may not be assigned
without the express written consent of the other party.
17. Severability. If any provision of this Agreement shall be held,
declared or pronounced void, voidable, invalid, unenforceable or inoperative
for any reason by any court of competent jurisdiction, such holding,
declaration or pronouncement shall not adversely affect any other provision of
this Agreement, and this Agreement shall otherwise remain in full force and
effect and be enforced in accordance with its terms, including in a manner
that may be reasonably required in order to render any provision that has been
held, declared or pronounced void, voidable, invalid, unenforceable or
inoperative to become valid, enforceable and operative.
18. Counterparts. This Agreement shall be executed in counterparts, in
which case all such counterparts shall constitute one and the same agreement.
19. Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of California.
20. Attorneys' Fees. In the event any proceeding is brought by one party
against the other to enforce or for the breach of any of the provisions of
this Agreement, the prevailing party shall be entitled in such proceeding and
in any appeal therefrom to recover reasonable attorneys' fees, together with
the costs of such proceeding therein incurred.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on the date first written above.
ATTEST: BERKSHIRE CAPITAL INVESTMENT TRUST
/s/ Ronald G. Seger /s/ Malcolm R. Fobes III
By: ____________________________ By: _____________________________
Ronald G. Seger, Malcolm R. Fobes III,
Secretary President
ATTEST: BERKSHIRE CAPITAL HOLDINGS, INC.
/s/ Ronald G. Seger /s/ Malcolm R. Fobes III
By: ____________________________ By: _____________________________
Ronald G. Seger, Malcolm R. Fobes III,
Secretary Chairman & CEO
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TRANSFER AGENT AGREEMENT
THIS TRANSFER AGENT AGREEMENT ("Agreement"), is made and entered
into this 26th day of June, 1997 by and between the Berkshire Capital
Investment Trust, a Delaware business trust (hereinafter called the "Trust")
presently having a portfolio named the Berkshire Capital Growth & Value Fund
(hereinafter called the "Fund"), and Berkshire Capital Holdings, Inc., a
California Corporation (hereinafter called the "Transfer Agent").
W I T N E S S E T H:
WHEREAS, the Fund, and open-end, non-diversified investment company
registered under the Investment Company Act of 1940 (the "1940 Act"), wishes
to retain the Transfer Agent to provide Transfer, Redemption and Dividend
Disbursing services to the Fund and also has agreed to act for the Fund in
other respects as hereinafter stated; and
WHEREAS, the Transfer Agent is willing to furnish such services on
the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and mutual
covenants herein contained, it is agreed as follows:
Section 1. The Fund hereby appoints the Transfer Agent to act as Transfer,
Registrar, Redemption and Dividend Disbursing Agent and the Transfer Agent
accepts such appointments and agrees to act in such capacities upon the terms
set forth in this Agreement.
The Transfer Agent agrees to comply with all relevant provisions of the 1940
Act, the Internal Revenue Code, other applicable laws and all applicable rules
and regulations thereunder.
If the Fund is a series company for purposes of Rule 18f-2 under the 1940 Act,
the term "Fund" as used in this Agreement shall be deemed to refer to each
such series as a separate portfolio unless the context otherwise requires. In
performing its functions hereunder, the Transfer Agent shall in all cases
comply with the procedures and conditions set forth in the Fund's then current
Prospectus and Statement of Additional Information ("SAI"), as provided to the
Transfer Agent by the Fund. To the extent that the Prospectus and SAI cover
procedures and duties of the Transfer Agent, agreement as to such matters must
have been reached between the Transfer Agent and the Fund prior to the
effectiveness of the Prospectus.
Section 2. The Fund currently has no Share Certificates outstanding, and does
not intend for issue of Share Certificates in the future. Should the Fund wish
to issue Certificates in the future, it can do so only with the consent of the
Transfer Agent. All language in this agreement relating to Share Certificates,
such as the following paragraph, will be of no effect until such time as it
mutually agreed that Share Certificates shall be issued.
The Fund shall furnish to the Transfer Agent a sufficient supply of blank
Share Certificates and from time to time will renew such supply upon the
request of the Transfer Agent. Such blank Share Certificates shall be signed
manually or by facsimile signatures of officers of the Fund authorized by law
or the by-laws of the Fund to sign Share Certificates and, if required, shall
bear the Fund's seal or facsimile thereof.
Section 3. The Transfer Agent shall make original issues of Shares in
accordance with Sections 13 and 14 below and with the Fund's then currently
effective Prospectus upon being furnished with (i) a certified copy of a
resolution of Trustees of the Fund authorizing such issue and (ii) necessary
funds for the payment of any original issue tax applicable to such additional
Shares. If requested, a copy of the opinion of counsel as to the validity of
such additional Shares shall be furnished to the Transfer Agent upon the
Fund's filing of its Rule 24f-2 Notice under the 1940 Act with the Securities
and Exchange Commission.
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Section 4. Transfers of Shares shall be registered and, subject to the
provisions of Section 10, new Share Certificates issued by the Transfer Agent
upon surrender of outstanding Share Certificates, if any, (i) in form deemed
by the Transfer Agent to be properly endorsed for transfer, (ii) with all
necessary endorser's signatures guaranteed by a member firm of a national
securities exchange, the NASD, or a commercial bank, except when the
requirement of a signature guarantee is waived in accordance with the Fund's
then current Prospectus or SAI or when otherwise authorized by the Fund
pursuant to Written Instructions (as defined in Section 34 below), accompanied
by (iii) such assurances as the Transfer Agent shall deem necessary or
appropriate to evidence the genuineness and effectiveness of each necessary
endorsement, and (iv) satisfactory evidence of compliance with all applicable
laws relating to the payment or collection of taxes. The Transfer Agent shall
retain all shareholder applications and shall compare the signature(s) on
written redemption requests with the signature on the shareholder applications
as may be necessary in the opinion of the Transfer Agent, provided that the
Transfer Agent shall be liable for any loss due to forgery or improper
signature of any kind resulting from the negligence of the Transfer Agent in
making or failing to make such comparison. The Transfer Agent shall take such
reasonable measures as may be agreed upon from time to time between the Fund
and the Transfer Agent to enable the Fund to identify proposed transfers
which, if effected, appear likely to cause the Fund to fall within the
definitions of a personal holding company as defined in the Internal Revenue
Code and shall not make such transfer without prior written approval of the
Fund and its counsel.
Section 5. When mail is used for delivery of Share Certificates the Transfer
Agent shall forward Share Certificates in "non-negotiable" form by first-class
mail, and Share Certificates in "negotiable" form by registered mail, return
receipt requested, all mail deliveries to be covered while in transit to the
addressee by insurance arranged for by the Transfer Agent.
Section 6. In registering transfers of Shares the Transfer Agent may rely upon
the Uniform Commercial Code or any other statutes which in the opinion of
counsel protect the Transfer Agent and the Fund in not requiring complete
documentation, (subject to compliance with procedures set forth in the Fund's
current Prospectus and/or SAI), in registering transfer with inquiry into
adverse claims, in delaying registration for purposes of such inquiry, or in
refusing registration where in its judgement an adverse claim requires such
refusal.
Section 7. The Transfer Agent may issue new Share Certificates in place of
Share Certificates represented to have been lost, destroyed, or stolen, upon
receiving indemnity satisfactory to the Transfer Agent and the Fund and may
issue new Share Certificates in exchange for, and upon surrender of, mutilated
Share Certificates.
Section 8. In case any officer of the Fund who shall have signed manually or
whose facsimile signature shall have been affixed to blank Share Certificates
shall die, resign or be removed prior to the issuance of such Share
Certificates, the Transfer Agent may issue or register such Share Certificates
as the Share Certificates of the Fund notwithstanding such death, resignation
or removal until otherwise directed by the Fund; and the Fund shall file
promptly with the Transfer Agent such approval, adoption or ratification as
may be required by law.
Section 9. The Transfer Agent will maintain mutual fund account records in
which, among other details, it will note the issuance, transfer and redemption
of Shares, whether certificated or not. Whenever a Shareholder deposits Shares
represented by Share Certificates in an account, the Transfer Agent upon
receipt of the Share Certificates registered in the name of the Shareholder
(or if not so registered, in proper form for transfer), shall cancel such
Share Certificates and make appropriate entries in its stock transfer records.
The Transfer Agent will keep account records, part of which shall be the stock
transfer records, in which it will note the names and registered addresses of
Shareholders and the number of Shares and fractions owned by them, whether or
not Share Certificates are outstanding.
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Section 10. The Transfer Agent shall issue Share Certificates for Shares only
upon receipt of a written request from a Shareholder. In all other cases, the
Transfer Agent shall dispense with the issuance and countersignature of Share
Certificates whenever Shares are purchased. The Transfer Agent shall process
purchase and redemption transactions by making appropriate entries in the
Fund's account records.
Section 11. The Transfer Agent shall, in addition to the duties and functions
above-mentioned, perform the usual duties and functions of a stock Transfer
Agent for a corporation. It shall countersign for issuance Share Certificates
representing original issue treasury shares as directed by the Written
Instructions of the Fund and shall transfer Share Certificates registered in
the name of Shareholders from one Shareholder to another in the usual manner.
The Transfer Agent may rely conclusively and act without further investigation
upon any list, instruction, certification, authorization, Share Certificate or
other instrument or paper reasonably believed by it in good faith to be
genuine and unaltered, and to have been signed, countersigned, or executed by
duly authorized person or persons, or upon the instructions of any duly
authorized officer of the Fund, or upon the advice of counsel for the Fund or
for the Transfer Agent. The Transfer Agent may record any transfer of Share
Certificates which is reasonably believed by it in good faith to have been
duly authorized or may refuse to record any transfer of Share Certificates if
in good faith the Transfer Agent deems such refusal necessary to avoid any
liability on the part of either the Fund or the Transfer Agent; provided,
however, that the Transfer Agent shall promptly notify the Fund of any such
refusal to record any transfer and shall act in accordance with the Fund's
Written Instructions, if any. The Fund agrees to indemnify and hold harmless
the Transfer Agent from and against any and all losses, costs, claims, and
liability which it may suffer or incur by reason of so relying or acting or
refusing to act.
Section 12. In case of any request or demand for the inspection of the share
records of the Fund, the Transfer Agent shall endeavor to notify the Fund and
to secure instructions as to permitting or refusing such inspection. However,
the Transfer Agent may (after giving written notice to the Fund) exhibit such
records to any person in any case where it is advised by its counsel that it
may be held liable for failure to do so, unless indemnified against such
liability by the Fund.
ISSUANCE OF SHARES
Section 13. For the purpose of this Section, the Fund hereby instructs the
Transfer Agent to consider Shareholder payments as available for investment in
accordance with the policies and procedures set forth in the Fund's then
current Prospectus and SAI. Immediately after the time or times and on each
day on which the Fund's then current Prospectus or SAI states that its net
asset value per share shall be determined, the Transfer Agent shall obtain
from the Fund or its designated agent a quotation of the net asset value per
share determined as of such time on such day. The Transfer Agent reserves the
right to charge the Fund its reasonable costs of making corrections to
shareholder records if it is later determined that the Fund supplied an
inaccurate net asset value.
The Transfer Agent shall, on the same business day on which any order for the
purchase of Shares is received and utilizing the net asset value per share
next determined after the receipt of such order, determine the amount to be
invested and the number of Shares and fractional Shares (rounded to three
decimal places) to be purchased. The Transfer Agent shall thereupon as agent
for the Shareholders place a purchase order with the Fund for the proper
number of Shares and fractional Shares to be purchased and confirm such number
to the Fund in writing. The Transfer Agent shall total the amount available
for investment in Shares at the net asset value determined by the Fund or its
designated agent at each pricing time.
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The Transfer Agent shall pay over to its designated bank the net asset value
of Shares and fractional Shares purchased immediately upon receipt of the
consideration therefor. In the event that any check or other order for the
payment of money is returned unpaid for any reason, the Transfer Agent shall
give prompt notification to the Fund of the non-payment of said check and take
such action as the Fund may authorize by Written Instructions.
Any profit on the liquidation of unpaid shares accrues to the Fund. In the
event of loss upon liquidation of unpaid shares the Transfer Agent will charge
the purchaser's account for the amount of such loss. If the balance in such
account is insufficient to cover the loss the Transfer Agent will assist the
Fund in the Fund's efforts to recover any such losses from the purchaser.
Section 14. The Transfer Agent, in making the calculations provided for in
Section 13, shall rely on its record of available investment funds. The proper
number of Shares and fractional Shares shall then be issued daily and credited
by the Transfer Agent to the shareholder accounts. The Transfer Agent shall
mail to each Shareholder a confirmation of each purchase (if provided for
under the provisions of the Shareholder's account) no later than the next
business day, with copies to interested parties if requested.
Such confirmations shall among other details show the prior Share balance, the
new Share balance, the dollar value, the Shares for which Stock Certificates
are outstanding (if any), the amount invested and the price paid for the
newly-purchased Shares.
The Transfer Agent shall provide the Fund with the total number of shares
issued by the Fund each day. In the case any issue of shares would result in
overissuance, the Transfer Agent shall notify the Fund.
REDEMPTIONS
Section 15. The Transfer Agent shall process all requests from Shareholders to
redeem Shares and determine the number of Shares required to be redeemed to
make monthly payments, automatic payments or the like and advise the Fund, on
the same business day that the request for redemption was received, of the
total number of Shares and fractional Shares (rounded to three decimal places)
to be redeemed. Notwithstanding the foregoing, if a redemption request is for
a dollar value of Shares in excess of the dollar value of Shares in the
specified account or is not in accordance with the requirements of the
Prospectus and/or SAI, the Transfer Agent shall not effect such redemption in
whole or in part, and shall immediately advise both the Fund and the
Shareholder of such discrepancy. The Fund or its designated agent shall then
quote to the Transfer Agent the applicable net asset value; whereupon the
Transfer Agent shall furnish the Fund with an appropriate confirmation of the
redemption and process the redemption, at the net asset value per share next
computed after receipt of the order for redemption, by filing with the Fund's
designated bank an appropriate statement and making the proper distribution
and application of the redemption proceeds in accordance with the Fund's
Prospectus or SAI. The stock registry books recording outstanding Shares and
the individual account of the Shareholder shall be properly debited. If
provided for under the provisions of the shareholder's account, the Transfer
Agent shall mail to each Shareholder a confirmation of each redemption no
later than the next business day, with copies to interested persons if
requested. Such confirmation shall among other details show the prior Share
balance, the new Share balance and total dollar value thereof, the Shares for
which stock certificates are outstanding (if any), the amount redeemed and the
price received for the redeemed Shares.
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Section 16. The proceeds of redemption shall be remitted by the Transfer
Agent, in each case by draft or other instrument drawn against funds held by
the Fund in its designated bank, in accordance with the Fund's then currently
effective Prospectus or SAI as follows:
(i) By check drawn to the order of and mailed to the Shareholder at
the address of record no later than seven (7) business days after the
redemption request is received.
(ii) By wire to a designated bank or broker upon telephone request,
without signature guarantee, if such redemption procedure has been elected
by the Shareholder and provided the Transfer Agent has proper procedures in
place to accommodate such request.
(iii) To a person other than the Shareholder or to an address other
than the Shareholder's registered address only if instructions are received in
writing with signature guaranteed. Planholders transferring to another Plan
custodian do not require written signature guarantees but do require the
written acceptance of the new custodian.
(iv) By other procedures commonly followed by mutual funds and
mutually agreed upon by the Fund and the Transfer Agent.
Any change in the bank or brokerage account or registered address will be
accepted by the Transfer Agent only if made in writing by the Shareholder,
with signature guaranteed, unless a different procedure is agreed to in
writing by the Fund and the Transfer Agent.
If required by the Fund's then current Prospectus or SAI, the request and
stock certificates, if any, for Shares being redeemed, must have the owner's
signature guaranteed by a domestic commercial bank or trust company or a
member firm of a national securities exchange or the NASD. If Share
Certificates have not been issued to the redeeming Shareholder, the signature
of the Shareholder on the redemption request must be similarly guaranteed. If
the Fund authorizes the Transfer Agent by Written Instructions to waive the
signature guarantee in certain instances, the Fund hereby provides the
Transfer Agent, its successors and assigns, the same protections the Transfer
Agent would normally receive from a signature guarantee requirement.
The Transfer Agent shall retain all canceled certificates for redemption or
transfer for a period of three (3) years, during which time it shall be able
to produce said certificates upon appropriate notice from the Fund.
For the purpose of redemption of Shares which have been purchased by check
within 15 business days of a receipt of the redemption request for such
shares, the Fund shall provide the Transfer Agent, from time to time, with
Written Instructions concerning the time within which such requests may be
honored. The Transfer Agent has no responsibility to determine if any
investment payment will be reversed for any reason and is not responsible in
any way for the failure of any investment collected.
The authority of the Transfer Agent to perform its responsibilities under
Section 15 and 16 shall be suspended upon the Transfer Agent's receipt of
notification of the suspension of the determination of the Fund's net asset
value.
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DIVIDENDS
Section 17. Upon the declaration of each dividend and each capital gains
distribution by the Board of Trustees of the Fund, the Fund shall notify the
Transfer Agent by Written Instructions of the date of such declaration, the
amount payable per share, the sources from which such dividend or distribution
is made, and, unless such dividend is a regular daily or monthly dividend
payable by a money market or other fund, the record date for determining the
Shareholders entitled to payment. The ex-date and payment date shall always be
the next determination of net asset value after the record date. The Transfer
Agent shall withhold such sums as may be required to be withheld under
applicable income tax laws, rules and regulations.
Section 18. Upon the payment date of a dividend or distribution declared by
the Fund's Board of Trustees, the Fund will cause the designated bank to
transfer to the disbursement account maintained in the name of the Fund the
total amount of such dividends or distributions payable in cash to those
Shareholders electing to receive such dividends or distributions in cash. On
payment date, the Transfer Agent shall prepare a check in the appropriate
amount and mail it no later than the third business day after the payment date
to such Shareholder at his address of record or to such other address as the
Shareholder may have designated.
With regard to Shareholders not electing to receive such dividends or
distributions in cash, the Transfer Agent will automatically reinvest all
dividends and other such distributions in additional shares at the net asset
value per share on payment date. When provided by the provisions of the
Shareholder's account, the Transfer Agent will promptly mail to each
shareholder at his address of record or such other address as the Shareholder
may have designated a statement showing the number of full and fractional
Shares (rounded to three decimal places) currently owned by the Shareholder
and the net asset value of the shares so credited to the Shareholder's
account.
The Transfer Agent's dividend statement meets the requirements of the 1940 Act
and Rule 19a-1 thereunder for notification as to the source(s) of dividend
payment(s). Where further notification detail is required, the Transfer Agent
shall prepare and distribute the information necessary as directed by the
Fund.
GENERAL PROVISIONS
Section 19. The Transfer Agent shall provide to the Fund's investors equity
fund account confirmations with each transaction, money fund account
confirmations with each transaction or monthly (as desired by the investor),
investor choice of monthly transfer agency consolidated statements or monthly
brokerage consolidated statements, as well as all services available now or in
the future to the shareowners of mutual funds serviced by the Transfer Agent,
on the same terms and conditions. The Transfer Agent shall provide account
confirmation statements as at December 31 of each year which include a listing
of all transactions in the account during the calendar year then ended, plus
income tax reporting information.
The Transfer Agent will not use its position to solicit business from the
shareholders of the Fund.
Section 20. The Transfer Agent shall report daily the sales and redemptions in
each state in a manner suitable for state "blue-sky" reporting by the Fund.
The Transfer Agent has no further responsibility as to controlling sales of
Fund Shares of maintaining the various registrations required under state
"blue-sky" laws and regulations. If the Fund notifies the Transfer Agent, the
Transfer Agent will stop Shares from being sold in all states where the Fund's
registration is not current. Maintaining current registration information
on-line is the responsibility of the Fund.
<PAGE>
Section 21. The Transfer Agent shall maintain records (which may be part of
the stock transfer records) in connection with the issuance and redemption of
Shares and the administration of the Plans and dividend reinvestments, in
which will be noted the transactions effected for each Shareholder and the
number of Shares and fractional Shares (rounded to three decimal places) owned
by each for which no Share Certificates are outstanding. The Transfer Agent
shall create and maintain all necessary records in accordance with good
custodial practice, including, but not limited, to records required by Section
31(a) of the 1940 Act and Section 17(A) of the Securities and Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder. The
Transfer Agent agrees to make available upon request and to preserve for
periods prescribed in Section 31(a) under the 1940 Act and Section 17(A) of
the Securities and Exchange Act of 1934, as amended, and the rules and
regulations thereunder, any records relating to services provided under this
Agreement or maintained by it on behalf of the Fund. All such records shall be
the property of the Fund.
The Transfer Agent shall also maintain the following records for each
Shareholder's account: name, address, and tax identification number; number of
Shares held and specific form of holding, including numbers and denominations
of certificates, if any; historical information regarding the account of each
Shareholder, including dividends paid, distributions made and date and price
for all transactions in a Shareholder's account; any stop or restraining order
placed against a Shareholder's account; any dividend reinvestment order,
dividend address and correspondence relating to the maintenance of a
Shareholder's account; all tax and withholding information relating to a
Shareholder's account; information with respect to withholding on foreign
accounts.
The Transfer Agent shall maintain records for all accounts opened by entities
assigned an institution number ("institution") so that where required the
aggregate average daily value of all of an institution's accounts can be
determined and a record of such values maintained, and so that duplicate
statements for the accounts can be prepared and sent to each institution.
The Transfer Agent represents and warrants that the various procedures and
systems which it has implemented with regard to safeguarding from loss and
damage attributable to fire, theft, or any other cause of the Fund's blank
checks, blank share certificates, records and other data and the Transfer
Agent's records, data, equipment, facilities, and other property used in the
performance of its obligations hereunder are adequate and that it will make
such changes therein from time to time as are required for the secure
performance of its obligations hereunder.
Section 22. The Transfer Agent shall maintain such records as shall enable the
Fund to fulfill in a timely fashion the filing requirements of Form N-SAR or
of any successor monthly, quarterly or annual report required by the 1940 Act
or rules and regulations thereunder to be filed by the Fund. All such records
shall be the property of the Fund.
Section 23. The Transfer Agent shall cooperate with the Fund's independent
public accountants and shall take all reasonable action in the performance of
its obligations under this Agreement to assure that the necessary information
is made available to such accountants for the expression of their opinion,
including but not limited to the opinion included in the Fund's annual or
semi-annual reports on Form N-SAR, or of any successor annual report required
by the 1940 Act or rules thereunder to be filed by the Fund.
<PAGE>
Section 24. In addition to the services as Transfer Agent and Administrator as
above set forth, the Transfer agent will perform other services for the Fund
as agreed from time to time, including but not limited to, preparation of
filing with the Internal Revenue Service and mailing to Shareholders such
Federal Tax Information Forms as are required to be so prepared, filed and
mailed by applicable laws, rules and regulations, mailing periodic reports of
the Fund, preparation of Shareholder lists as necessary, and mailing initial
notices of Shareholder's meetings, proxies and proxy statements.
The Transfer Agent shall answer telephone calls and correspondence from
Shareholders relating to their share accounts. The Transfer Agent shall
respond to all inquiries from Shareholders relating to the administration of
their accounts within one (1) business day with respect to answers delivered
by telephone and within three (3) business days with respect to answers
delivered in writing. Copies of all correspondence from Shareholders involving
complaints about the management of the Fund, the services provided by or for
the Fund, the Transfer Agent or others, or concerning complaints relating to
the Fund shall be sent immediately to the Fund. Summaries of any similar
matters conveyed by a Shareholder by telephone shall be prepared by the
Transfer Agent and sent to the Fund within three (3) business days.
Telephone calls and correspondence on other matters will be referred to the
Fund.
The Transfer Agent shall keep records of Shareholder substantive telephone
calls and correspondence and replies thereto, and of the lapse of time between
receipt of such substantive telephone calls and correspondence and the making
of replies.
Section 25. Nothing contained in this Agreement is intended to or shall
require the Transfer Agent in any capacity hereunder to perform any functions
or duties on any day identified in the Prospectus and/or SAI on which the Fund
is closed. Functions or duties normally scheduled to be performed on such days
shall be performed on, and as of, the next business day on which the Transfer
Agent is open, except when the Transfer Agent is closed to observe a legal
emergency. When the Fund is open and if the Fund has received purchases or
redemption requests, such purchases and redemptions shall be priced and
executed "as of" such date on the business day next following such day.
Section 26. The Transfer Agent shall receive from the Fund, as compensation
for the processing services rendered, an amount of $10.00 per executed
redemption request of Shares of the Fund, regardless of the aggregate dollar
value or the number of Shares redeemed. A record of all processed redemptions
shall be kept monthly and the Fund shall pay the Transfer Agent after the end
of each calendar month. The Fund shall reimburse the Transfer Agent for
expenses such as costs of forms, statements, envelopes, postage, shipping,
telephone, and statement microfiche copies. Telephone costs will be passed to
the Fund at cost. All such payments and reimbursements shall be charged to and
paid by the Fund on a monthly basis. It is understood that the Fund may, in
the future, undertake to performs certain of the services herein contemplated
to be performed by the Transfer Agent, such as maintaining the facility for
Shareholders to make telephone purchases, redemptions and transfers of Shares.
To the extent, if any, the Fund undertakes such duties, the Transfer Agent
shall be relieved of such obligation.
Section 27. The Transfer Agent in acting for Planholders, or any other
capacity set forth in this Agreement, shall not be personally liable for any
taxes, assessments, or governmental charges which may be levied or assessed on
any basis whatsoever in connection with the administration of the Plans,
excepting only for taxes assessed against the Transfer Agent in its corporate
capacity arising out of its compensation hereunder.
<PAGE>
Section 28. The Transfer Agent shall not be liable hereunder for any
non-negligent action taken in good faith and reasonably believed to be within
the powers conferred upon it by this Agreement. The Fund shall indemnify the
Transfer Agent and hold it harmless from any and against any and all actions,
suits and claims, whether groundless or otherwise, arising directly or
indirectly out of or in connection with its performance under this Agreement
including but not limited to its performance as Transfer Agent and
Administrator of Plans and from and against any and all losses, damages,
costs, charges, counsel fees, payments expenses and liabilities incurred by
the Transfer Agent in connection with any such action, suit, or claim, except
such as shall result from its own negligent act, omission or willful
misconduct or that of its officers, agents or employees. The Fund shall not be
required to indemnify the Transfer Agent against any expenses or liabilities
arising out of a default judgement, a confession of judgement or a settlement
entered into without prior written consent of the Fund. The Transfer Agent
shall not be under any obligation to prosecute or to defend any action, suit
or claim arising out of or in connection with its performance under this
Agreement as Transfer Agent and Administrator of Plans, which, in the opinion
of counsel, may involve it in expense or liability. At its option the Fund may
and upon request of the Transfer Agent the Fund shall assume the entire
defense of any action, suit, or claim subject to the foregoing indemnity. The
Transfer Agent shall give the Fund notice, and reasonable opportunity to
defend, any such action, suit, or claim, in the name of the Fund or the
Transfer Agent or both. In the event the Fund assumes the defense, the
Transfer Agent shall be responsible for its own legal fees and expenses from
the date the Fund so assumes the defense, except for such fees and expenses
incurred at the request of the Fund. The Fund and Transfer Agent shall
cooperate fully in the defense of any action, suit or claim.
The Transfer Agent at its expense will make corrections and adjustments as may
be required, where the Transfer Agent, its officers, agents, employees or
delegates are the cause of any error made in rendering the services described
in this agreement, without limitation.
Without limitation of the foregoing:
(i) The Transfer Agent may rely upon and shall not be liable to the
Fund for the advice of the Fund, counsel (who may be counsel for the Fund or
counsel for the Transfer Agent) and upon statements of accountants, brokers
and other persons believed by it in good faith to be expert in the matters
about which they are consulted and for any actions taken in good faith upon
such statements.
(ii) The Transfer Agent shall not be liable for any action
reasonably taken in good faith reliance upon any Written Instructions or
certified copy of any resolution of the Board of Trustees of the Fund,
provided, however, that upon a receipt of a Written Instruction countermanding
a prior Instruction which has been fully executed by the Transfer Agent, the
Transfer Agent shall attempt to honor to the extent then possible, such later
Instructions and rely upon the genuineness of any such document or
correspondence reasonably believed in good faith to have been validly
executed.
(iii) The Transfer Agent may rely and shall be protected in acting
upon any signature, instruction, request, letter of transmittal, certificate,
opinion of counsel, statement, instrument, report, notice, consent, order, or
other paper or document reasonably believed by it to be genuine and to have
been signed or presented by the Shareholder, Fund or other proper party or
parties.
<PAGE>
Section 29. The Fund shall promptly cause to be turned over to the Transfer
Agent (i) an accurate list of Shareholders of the Fund showing the proper
registered address and number of Shares owned and whether such shares are
represented by outstanding Share Certificates or by non-certificated share
accounts, (ii) all records relating to Plans, including original applications
signed by the Planholders and original plan accounts recording payments,
contributions, deductions, reinvestments, withdrawals and liquidations, and
(iii) all shareholder records, files, and other materials necessary or
appropriate for proper performance of the functions assumed by the Transfer
Agent under this Agreement (hereinafter called "Materials"). The Fund agrees
to indemnify and hold the Transfer Agent, its successors and assigns, harmless
of and from any and all expenses, damages, claims, suits, liabilities,
actions, demand and losses of third parties arising out of or in connection
with any error, omission, inaccuracy or other deficiency of such Materials, or
out of the failure of the Fund to provide any portion of such Materials or to
provide any information needed by the Transfer Agent to perform knowledgeably
its functions. The Fund agrees to pay reasonable compensation to the Transfer
Agent to cover the Transfer Agent's expenses in correcting any such error,
omission, inaccuracy or other deficiency of the Materials.
Section 30. The Transfer Agent shall at all times act in good faith and shall
use its best efforts to insure the accuracy of all services performed under
this Agreement and shall be liable for and shall indemnify and hold the Fund
harmless from and against any and all actions, suits and claims, whether
groundless or otherwise, and from and against any and all losses, damages,
costs, charges, counsel fees, payments, expenses and liabilities incurred by
the Fund, in connection with any such action, suit or claim arising directly
or indirectly out of or in connection with errors caused by the Transfer
Agent's negligence, bad faith or willful misconduct or that of its agents or
employees. The Transfer Agent shall not be required to indemnify the Fund
against any expenses or liabilities arising out of a default judgement, a
confession of judgement or a settlement entered into without the prior written
consent of the Transfer Agent. The Fund shall not be under any obligation to
prosecute or defend any action, suit or claim arising directly or indirectly
out of or in connection with errors caused by the Transfer Agent's negligence,
bad faith or willful misconduct or that of its employees or agents which, in
the opinion of counsel, may involve it in expense or liability. The Transfer
Agent may at its option and, upon request of the Fund the Transfer Agent
shall, assume the entire defense of any action, suit or claim subject to the
foregoing indemnity. The Fund shall give the Transfer Agent notice of, and
reasonable opportunity to defend, any such action, suit or claim in the name
of the Fund or the Transfer Agent or both. In the event the Transfer Agent
assumes the defense, the Fund shall be responsible for its own legal fees and
expenses from the date the Fund so assumes the defense, except for such fees
and expenses which are incurred at the request of the Transfer Agent. The
Transfer Agent and the Fund agree to cooperate fully in the defense of any
such action, suit or claim.
Section 31. The Transfer Agent acknowledges and agrees that all books and
records maintained for the Fund in any capacity under this Agreement are the
property of the Fund and may be inspected by the Fund at any reasonable time.
The Transfer Agent agrees to regard and preserve as confidential all records
and other information relative to the Fund, and will not without written
authority of the Fund disclose to others, during the term of this Agreement or
thereafter, any such records or other information.
<PAGE>
In the event of termination of this Agreement for any reason, the Transfer
Agent agrees to provide the Fund with complete and accurate records and to
assist the Fund in the orderly transfer of accounts and records. Without
limiting the generality of the foregoing, the Transfer Agent agrees upon
termination of this Agreement:
(i) to deliver to the Fund all electronic storage devices containing
the Fund's accounts and records in computer readable form together with such
record layouts and additional information as may be necessary to enable the
Fund to utilize the information therein;
(ii) to cooperate with the Fund and any successor transfer agent in
the interpretation of the Fund's accounts and records; and
(iii) to reimburse the Fund its reasonable costs arising out of any
error, omission, inaccuracy or other deficiency in the Fund's accounts and
records which occurred during the term of this Agreement which arise from the
negligence or other error of the Transfer Agent as long as claim for such
reimbursement is made within 90 days of termination.
Section 32. The Transfer Agent shall require all employees at the time of
employment to have fingerprints made and checked by the FBI under procedures
established as standard for stockbrokerage employees by the NASD, as well as
for transfer agency employees by the SEC.
Section 33. The practices and procedures of the Transfer Agent and the Fund
set forth in this Agreement, or any other terms or conditions of this
Agreement, may be altered or modified from time to time as may be mutually
agreed by the parties to this Agreement. In special cases the parties hereto
may adopt in writing such procedures as may be appropriate or practical under
the circumstances, and the Transfer Agent may conclusively rely on the
determination of the Fund that any special procedure which has been approved
by the Fund does not conflict with or violate any requirements of its
Declaration of Trust, By-Laws or Prospectus, or any rule, regulation or
requirement of any regulatory body.
Section 34. The Fund shall file with the Transfer Agent a certified copy of
each resolution of its Board of Trustees authorizing the execution of Written
Instructions or the transmittal of Oral Instructions.
The following additional terms, for purposes of this Agreement or any
amendment or supplement thereto, shall have the meanings herein specified
unless the context otherwise requires:
Plan: the term Plan shall include such investment plan, dividends or capital
gains reinvestment plans, systematic withdrawal plans or other types of plans
set forth in the then currently effective Prospectus of the Fund, including
any qualified retirement plan which is a Shareholder of the Fund, in form
acceptable to the Transfer Agent, which the Fund may from time to time adopt
and make available to its Shareholders, including plans or accounts by
individuals or corporations. All Planholders are Shareholders, who use a
specific plan or service not used by all Shareholders as a whole.
Administrator: The term Administrator of a Plan means the Transfer Agent
solely in its capacity as agent for the performance of those retirement plan
tasks which can be performed on a group or mass basis by the Transfer Agent's
systems. It does not include certain corporate retirement plan tasks that are
often performed on an individual basis, such as preparing Summary Plan
Descriptions and/or preparing IRS Form 5500.
<PAGE>
Section 35. This Agreement may be amended from time to time by a supplemental
agreement executed by the Fund and the Transfer Agent.
Section 36. Either the Fund or the Transfer Agent may give 60 days' written
notice to the other of the termination of this Agreement, such termination to
take effect at the time specified in the notice; provided, however, the
obligations set forth in Sections 28,30,31,38 and 39 and, for the fiscal year
of the Fund in which termination occurs, Sections 22 and 23, shall survive
such termination, unless satisfied.
Section 37. Any notice required or desired to be given hereunder shall be in
writing and shall be considered effective (i) when delivered, if by personal
delivery, (ii) upon receipt, if sent by FAX, which FAX has been telephonically
confirmed, between the hours of 9:00 a.m. and 5:00 p.m. local time of the
recipient on a business day, or if not, at 9:00 a.m., local time on the next
business day, or (iii) upon the earlier of actual or first attempted delivery,
if mailed, postage prepaid, addressed as follows:
If to the Transfer Agent:
Berkshire Capital Holdings, Inc.
475 Milan Drive, #103
San Jose, California 95134-2453
FAX No.: (408) 562-6501
Telephone No.: (408) 526-0707
If to the Fund:
Berkshire Capital Investment Trust
475 Milan Drive, #103
San Jose, California 95134-2453
FAX No.: (408) 562-6501
Telephone No.: (408) 526-0707
Section 38. The Transfer Agent and the Fund each represent and warrant to the
other as to itself that all actions required by their respective trustees or
shareholders has been taken to authorize the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby; the
execution and delivery of this Agreement and consummation of the transactions
contemplated hereby do not contravene any provision of their respective
charter or by-laws or of any laws, regulations or orders of any government or
agency thereof to which it is subject; do not constitute the violation or
breach of any agreement or understanding to which it is a party or by which it
is bound; and upon its execution and delivery, this Agreement shall be binding
and enforceable against it in accordance with its terms.
Section 39. The Transfer Agent may from time to time, with written consent of
the Fund, delegate some or all of its duties hereunder to others, who shall
perform such functions as the agent of the Transfer Agent. To the extent of
such delegation, the term "the Transfer Agent" in this Agreement shall be
deemed to refer to both the Transfer Agent and to its designee or to either of
them, as the context may indicate. In each provision of this Agreement fixing
or limiting the liabilities or the delegations of the Transfer Agent, or
providing for the liability indemnification or protection of the Transfer
agent, the term "the Transfer Agent" shall include the Transfer Agent's
designee. The Transfer Agent shall not be relieved of any liabilities or
obligation under the Agreement in connection with such delegation of duties,
shall be responsible to supervise and assure that any such designee properly
performs the duties delegated to it, and shall be responsible for the
performance of the designee as the Transfer Agent had, itself, performed the
duties so delegated.
<PAGE>
Section 40. This Agreement may be executed in two or more counterparts, each
of which when so executed shall be deemed to be an original, but such
counterparts shall together constitute but one and the same instrument.
Section 41. This Agreement shall extend to and shall be binding upon the
parties hereto and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable by the Fund without the written
consent of the Transfer Agent or by the Transfer Agent without the written
consent of the Fund, authorized or approved by a resolution of its Board of
Trustees.
Section 42. This Agreement constitutes the full and complete agreement of the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements or understandings between the parties.
Section 43. Whenever pronouns are used herein, they shall be interpreted in
the neuter, masculine, feminine, singular or plural as the context may
require.
Section 44. Except where specific time limits are herein provided, no delay on
the part of any party hereto in exercising any power or right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
power or right hereunder preclude other or further exercise thereof or the
exercise of any other power or right. No waiver shall be enforceable against
any party hereto unless in writing, signed by the party against whom such
waiver is claimed, and shall be limited solely to the one event.
Section 45. This Agreement shall be governed by, and construed in accordance
with, the internal laws of the State of California, without giving effect to
the principals of conflicts of law.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and sealed by their officers thereunto duly authorized on the day
and year first above written.
ATTEST: BERKSHIRE CAPITAL INVESTMENT TRUST
/s/ Ronald G. Seger /s/ Malcolm R. Fobes III
By: ____________________________ By: _____________________________
Ronald G. Seger, Malcolm R. Fobes III,
Secretary President
ATTEST: BERKSHIRE CAPITAL HOLDINGS, INC.
/s/ Ronald G. Seger /s/ Malcolm R. Fobes III
By: ____________________________ By: _____________________________
Ronald G. Seger, Malcolm R. Fobes III,
Secretary Chairman & CEO
<PAGE>
SUBSCRIPTION AGREEMENT
For and in consideration of the mutual agreements herein contained,
Malcolm R. Fobes III, hereinafter referred to as "Subscriber" hereby agrees to
purchase from the Berkshire Capital Growth & Value Fund (the "Fund"), a mutual
fund series of the Berkshire Capital Investment Trust, and Fund agrees to sell
to Subscriber 7,500 shares of capital stock of Fund, par value $1.00 per
share, at the price of $10.00 per share, upon the following terms and
conditions:
Subscriber agrees to pay $75,000 to Fund upon demand.
Fund will not issue any securities or receive any of the proceeds of
this subscription until subscriptions identical in form to this one have been
made by not more than 25 persons (which shall include Subscriber) to purchase
from Fund securities for an aggregate net amount, which plus Fund's then net
worth will equal at least $100,000.
Unless such aggregate net amount is paid to Fund and Fund then has
$100,000 of net worth within 90 days after July 1, 1997, the date on which the
registration statement filed under the Securities Act of 1933 with respect to
the Fund's capital stock became effective, then this subscription shall become
null and void and the full amount paid in by the Subscriber will be refunded
to Subscriber on demand without any deduction.
In the event that such aggregate net amount of cash has been paid in
and Fund has a net worth of at least $100,000 within 90 days after such
registration statement has become effective, then this subscription shall be
in full force and effect; and Fund may retain all funds tendered to it.
Subscriber agrees that the shares are being purchased for investment
with no present intention of reselling or redeeming said shares.
It is understood that said aggregate net amount will be paid in to
Fund before any subscriptions for Fund capital stock will be accepted from any
persons in excess of twenty-five.
Subscriber of shares of the Berkshire Capital Growth & Value Fund
/s/ Malcolm R. Fobes III June 12, 1997
By: ___________________________ Dated: _______________
Malcolm R. Fobes III
Subscription agreed to Berkshire Capital Growth & Value Fund
/s/ Malcolm R. Fobes III June 12, 1997
By: ____________________________ Dated: _______________
Malcolm R. Fobes III
Chairman
Board of Trustees
Berkshire Capital Investment Trust
-8A-
<PAGE>
SUBSCRIPTION AGREEMENT
For and in consideration of the mutual agreements herein contained,
Ronald G. Seger, hereinafter referred to as "Subscriber" hereby agrees to
purchase from the Berkshire Capital Growth & Value Fund (the "Fund"), a mutual
fund series of the Berkshire Capital Investment Trust, and Fund agrees to sell
to Subscriber 2,500 shares of capital stock of Fund, par value $1.00 per
share, at the price of $10.00 per share, upon the following terms and
conditions:
Subscriber agrees to pay $25,000 to Fund upon demand.
Fund will not issue any securities or receive any of the proceeds of
this subscription until subscriptions identical in form to this one have been
made by not more than 25 persons (which shall include Subscriber) to purchase
from Fund securities for an aggregate net amount, which plus Fund's then net
worth will equal at least $100,000.
Unless such aggregate net amount is paid to Fund and Fund then has
$100,000 of net worth within 90 days after July 1, 1997, the date on which the
registration statement filed under the Securities Act of 1933 with respect to
the Fund's capital stock became effective, then this subscription shall become
null and void and the full amount paid in by the Subscriber will be refunded
to Subscriber on demand without any deduction.
In the event that such aggregate net amount of cash has been paid in
and Fund has a net worth of at least $100,000 within 90 days after such
registration statement has become effective, then this subscription shall be
in full force and effect; and Fund may retain all funds tendered to it.
Subscriber agrees that the shares are being purchased for investment
with no present intention of reselling or redeeming said shares.
It is understood that said aggregate net amount will be paid in to
Fund before any subscriptions for Fund capital stock will be accepted from any
persons in excess of twenty-five.
Subscriber of shares of the Berkshire Capital Growth & Value Fund
/s/ Ronald G. Seger June 12, 1997
By: ___________________________ Dated: _______________
Ronald G. Seger
Subscription agreed to Berkshire Capital Growth & Value Fund
/s/ Malcolm R. Fobes III June 12, 1997
By: ____________________________ Dated: _______________
Malcolm R. Fobes III
Chairman
Board of Trustees
Berkshire Capital Investment Trust
<PAGE>
SUBSCRIPTION AGREEMENT
For and in consideration of the mutual agreements herein contained
Alan M. Cranston, hereinafter referred to as "Subscriber" hereby agrees to
purchase from the Berkshire Capital Growth & Value Fund (the "Fund"), a mutual
fund series of the Berkshire Capital Investment Trust, and Fund agrees to sell
to Subscriber 50 shares of capital stock of Fund, par value $1.00 per share,
at the price of $10.00 per share, upon the following terms and conditions:
Subscriber agrees to pay $500 to Fund upon demand.
Fund will not issue any securities or receive any of the proceeds of
this subscription until subscriptions identical in form to this one have been
made by not more than 25 persons (which shall include Subscriber) to purchase
from Fund securities for an aggregate net amount, which plus Fund's then net
worth will equal at least $100,000.
Unless such aggregate net amount is paid to Fund and Fund then has
$100,000 of net worth within 90 days after July 1, 1997, the date on which the
registration statement filed under the Securities Act of 1933 with respect to
the Fund's capital stock became effective, then this subscription shall become
null and void and the full amount paid in by the Subscriber will be refunded
to Subscriber on demand without any deduction.
In the event that such aggregate net amount of cash has been paid in
and Fund has a net worth of at least $100,000 within 90 days after such
registration statement has become effective, then this subscription shall be
in full force and effect; and Fund may retain all funds tendered to it.
Subscriber agrees that the shares are being purchased for investment
with no present intention of reselling or redeeming said shares.
It is understood that said aggregate net amount will be paid in to
Fund before any subscriptions for Fund capital stock will be accepted from any
persons in excess of twenty-five.
Subscriber of shares of the Berkshire Capital Growth & Value Fund
/s/ Alan M. Cranston June 12, 1997
By: ___________________________ Dated: _______________
Alan M. Cranston
Subscription agreed to Berkshire Capital Growth & Value Fund
/s/ Malcolm R. Fobes III June 12, 1997
By: ____________________________ Dated: _______________
Malcolm R. Fobes III
Chairman
Board of Trustees
Berkshire Capital Investment Trust
<PAGE>
REIMBURSEMENT AGREEMENT
The Fund will reimburse officers and directors not affiliated with the
Investment Adviser to compensate for travel expenses associated with
performance of their duties.
The Fund has no plans to, compensate officers and directors who are affiliated
with the Investment Adviser except indirectly through payment of the
management fee.
-9A-
<PAGE>
MEREDITH, CARDOZO & LANZ LLP
Certified Public Accountants
97 South Second Street, Suite 100
San Jose, California 95113
(408) 278-0220
CONSENT OF INDEPENDENT AUDITORS
We consent to the use in the Registration Statement on Form N-1A of Berkshire
Capital Investment Trust of our report dated June 18, 1997, on our audit of
the statement of assets and liabilities of the Trust.
We also consent to the reference to our firm in such Registration Statement.
Meredith, Cardozo & Lanz LLP
San Jose, California
June 30, 1997
-10A-
<PAGE>
Hall & Evans, L.L.C.
Attorneys at Law
1200 Seventeenth Street
Suite 1700
Denver, Colorado 80202-5817
Telephone (303) 628-3300
Facsimile (303) 628-3368
January 21, 1997
Board of Trustees
Berkshire Capital Investment Trust
475 Milan Drive, #103
San Jose, California 95134-2453
Re: Registration Statement on Form N-1A Covering Offering of Beneficial
Interests of Berkshire Capital Investment Trust.
Gentlemen:
We have acted as counsel to Berkshire Capital Investment Trust, a
Delaware business trust (the "Trust"), in connection with the registration of
an unlimited number of units (the "Units") of beneficial interest in the Trust
pursuant to a registration statement on Form N-1A as filed with the Securities
and Exchange Commission (the "Registration Statement").
We have examined the Certificate of Trust and Declaration of Trust
of the Trust and the filings before the Securities and Exchange Commission
relating to the registration under the Securities Act of 1933, as amended (the
"Act"), and the Investment Company Act of 1940, as amended ("1940 Act").
In rendering our opinion, we have assumed (i) the genuineness of all
signatures; (ii) that parties executing documents, other than the Company, had
the individual capacity and corporate power to enter into and perform all
obligations under those documents, the due authorization by all requisite
corporate action of the execution and delivery of those documents and the
validity and binding effect of those documents on those parties; and (iii) the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified or
photostatic copies and the authenticity of the originals of such copies. As to
questions of fact material to our opinions, we have relied solely upon the
documents and instruments described above and have assumed the accuracy and
correctness of all statements of fact contained therein.
Based on the foregoing, we are of the opinion that the Units have
been duly authorized for issuance by all necessary action and, when issued in
accordance with the terms of the this offering, will be validly issued, fully
paid and nonassessable.
We are admitted to practice before the Bar of the State of Colorado
only. We are not admitted to practice in Delaware, the jurisdiction of the
Trust's formation, in California, the location of its principal place of
business, or in any other jurisdiction in which the Company owns or may own
property or may transact business. In furnishing the opinions expressed above,
we advise that our opinions are with respect only to federal law and the law
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of the State of Colorado in effect as of the date hereof, and in all respects
are subject to and may be limited by future legislation, regulations and
judicial decisions. To the extent that such opinions are derived from laws of
other jurisdictions, such statements are based on examinations or relevant
authorities and are believed to be correct, but we have obtained no legal
opinions as to such matters from lawyers licensed to practice in such other
jurisdictions.
We hereby consent to the use of our name and to the reference to our
firm in Registration Statement and to the filing of a copy of this opinion as
an exhibit to the Registration Statement.
Very truly yours,
Hall & Evans, L.L.C.
