UNITED STATES
Securities and Exchange Commission
Washington, DC. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
and
THE INVESTMENT COMPANY ACT OF 1940 [X]
___________________________________________________________
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 effective date of this registration.
It is proposed that this filing will become effective
[x] 60 days after filing pursuant to paragraph (a)
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.
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<TABLE>
<CAPTION>
CROSS REFERENCE SHEET
INFORMATION REQUIRED CAPTIONS IN FILING
- - --------------------- --------------------
<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 and
Policies
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 Advisor Advisor
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 Not Applicable
</TABLE>
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<PAGE>
BERKSHIRE CAPITAL GROWTH & VALUE FUND
475 Milan Drive, #103
San Jose, California 95134-2453
(408) 526-0707
PROSPECTUS _________ __, 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 are believed 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. The Fund does not charge a transaction fee for sales
or redemptions.
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 ________ __, 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.
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<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 None
Exchange Fees None
IRA Trustee Fees None
Annualized Fund Operating Expenses:
Management Fees 1.0%
12b-1 Fees None
Other Expenses* 1.0%
----
Total Operating Expenses 2.0%
====
*Fees payable under the Administration Agreement between the Fund and the
Investment Adviser are fixed at 1% for the first $10 million under management
and 0.5% for $10 million and above.
___________________________________________________________
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>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------- -------- -------- ---------
<S> <C> <C> <C>
$20 $63 $111 $252
</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 AND POLICIES
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 are believed 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 policy of allowing for the
concentration of its investments in the securities of companies in one or more
market sectors. 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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CONCENTRATION AND NON-DIVERSIFICATION POLICY
Concentration: The Fund may, at its discretion, concentrate its investments in
the securities of companies in one or more market sectors such as, for
example, the electronic technology industry. Concentration allows the fund to
invest 25% or more of the value of its total assets in securities of issuers
in a particular industry. The Fund would only concentrate its investments in a
particular market sector if the Fund's investment adviser were to believe the
investment return available from concentration in that sector justifies any
additional risk associated with such concentration. As a result, the Fund may
be subject to greater risk of market fluctuation than that of a fund invested
in a wider spectrum of market sectors.
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 in 1997 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 a W-9 tax form 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 state
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 (a) 67% of the shares of
the Fund at a meeting where more than 50% of the outstanding shares are
present in person or by proxy or (b) more than 50% of the outstanding shares
of the Fund. The Fund may not:
(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, but may obtain such short-
term credit as may be necessary for clearance of purchases and sales of
securities for temporary or emergency purposes in an amount not exceeding 5%
of the value of its total assets.
(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 5% 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.
-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, the
founder of the Adviser, has served as Chairman of the Board and Chief
Executive Officer since the company's inception. 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 Berkshire Capital Holdings 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. Dr. Ronald G. Seger has served as Secretary
and member of the Board of Directors of the 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% 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 1% of the
Fund's average daily net assets for the first $10 million and 0.5% of the
Fund's average daily net assets over $10 million. For such fee, Berkshire
Capital Holdings, Inc. will act as the Fund's administrator, transfer agent,
custodian, dividend disbursing agent and provide virtually all customary
services required for Fund operations.
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<PAGE>
ADVISORY AND ADMINISTRATION AGREEMENTS
On ________ __, 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 ("Administration
Agreement") with Berkshire Capital Holdings, Inc. The Advisory Agreement and
the Administration Agreement are effective through December 31, 1997.
Thereafter, it 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 furnish
investment advice to the Trustees of the Fund on the basis of a continuous
review of the portfolio and recommend to the Fund when and to what extent
securities should be purchased or disposed. Pursuant to its contract with the
Fund, the Investment Adviser is required to render research, statistical and
advisory services to the Fund; to make specific recommendations based on the
Fund's investment requirements; and to pay salaries of the Funds employees who
may be officers or 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. Under 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 paid by the Adviser pursuant to Section 3
of the Administration Agreement.
Specifically, the Investment Adviser assumes and shall pay all expenses of the
Fund, including, without limitation: (a) organizational costs, (b) taxes, (c)
interest, (d) brokerage costs, (e) compensation of the Investment Adviser's
personnel and payment of other expenses in connection with provision of
portfolio management services, (f) compensation of any of the Fund's trustees,
officers or employees who are not interested persons of the Investment Adviser
or its affiliates, (g) 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, (h) insurance premiums, (i) fidelity
bond, (j) accounting and bookkeeping costs and expenses necessary to maintain
the Fund's books and records, (k) outside auditing and legal expenses, (l) all
costs associated with shareholders meetings and the preparation and
dissemination of proxy solicitation materials, (m) costs of printing and
distribution of the Fund's Prospectus and other shareholder information to
existing shareholders, (n) charges, if any, of custodian, transfer and
dividend disbursing agent's fees, (o) industry association fees, (p) costs of
independent pricing services and calculation of daily net asset value, (q)
general costs of maintaining the Fund's existence, (r) any extraordinary and
non-recurring expenses and, (s) other expenses properly payable to the Fund.
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.
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The Investment Advisor 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 the ownership of the Fund are as follows:
<TABLE>
<CAPTION>
Principal Occupation Fund Shares Percent
Name and Address Past 5 Years Owned _/_/97 of Class
- - ----------------------- --------------------------- ------------- --------
<S> <C> <C> <C>
*Malcolm R. Fobes III Trustee; 5,000 50%
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; 5,000 50%
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: 71
</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.
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. They
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.
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 judgment 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. Although the Fund does not
charge a transaction fee, 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 form 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
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 five 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.
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<PAGE>
RETIREMENT PLANS
Individual Retirement Account: Persons who earn compensation and are not
active participants (and who do not have a spouse who is an active
participant) in an employee maintained retirement plan may establish
Individual Retirement Accounts (IRA) using Fund shares. Annual contributions,
limited to the lesser of $2,000 or 100% of compensation, are tax deductible
from gross income. This IRA deduction is also retained for individual
taxpayers and married couples with adjusted gross incomes within certain
specified limits. All individuals may make nondeductible IRA contributions to
separate accounts to the extent that they are not eligible for a deductible
contribution.
Earnings under the IRA are reinvested and are tax-deferred until withdrawals
begin. The maximum annual contribution may be increased to $4,000 if you have
a spouse who earns no compensation during the taxable year. A separate and
independent Spousal IRA must be maintained.
You may begin to make non-penalty withdrawals as early as age 59 1/2 or as
late as age 70 1/2. In the event of death or disability, withdrawals may be
made before age 59 1/2 without penalty.
A Disclosure Statement is required by U.S. Treasury Regulations. This
Statement describes the general provisions of the IRA and is forwarded to all
prospective IRA's. There is no charge to open and maintain a Berkshire Capital
Growth & Value Fund IRA. This policy may be changed by the Board of Trustees
if they deem it to be in the best interests of all shareholders. All IRA's may
be revoked within 7 days of their establishment with no penalty.
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 part of the shares of any shareholder who
tenders a request for redemption (if certificates have not been issued) or
certificates with respect to shares for which certificates have been issued.
In either case, proper endorsements guaranteed either by a national bank or a
member firm of the New York Stock Exchange will be required unless the
shareholder is known to management. The redemption price is the net asset
value per share next determined after notice is received by the Fund for
redemption of shares. 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 and the difference should be treated by the
shareholder as a capital gain or loss for federal income tax purposes.
-10-
<PAGE>
Payment by the Fund will ordinarily be made within three business days after
tender. 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
Securities and Exchange Commission has determined that an emergency exists,
making disposal of fund securities or valuation of net assets not reasonably
practicable. The Fund intends to make payments in cash, however, the Fund
reserves the right to make payments in kind. Although the Fund does not charge
a transaction fee, 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. The Fund will place all orders for purchase and sale of its
portfolio securities through the Fund's President who is answerable to the
Fund's Board of Trustees. He 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, are
helpful or necessary to the Fund's normal operations. Information or services
may include economic studies, industry studies, statistical analysis,
corporate reports, or other forms of assistance to the Fund or Adviser. 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 for all amendments to 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.
CUSTODIAN AND TRANSFER AGENT
The Fund acts as its own custodian and transfer agent.
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.
AUDITORS
Meredith, Cardozo & Lanz, LLP, independent certified public accountants, 97
South Second Street, Suite 100, San Jose, California 95113, has 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, LLC, 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.
-11-
<PAGE>
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.
-12-
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT ADVISER
Berkshire Capital Holdings, Inc.
475 Milan Drive, #103
San Jose, California 95134-2453
TABLE OF CONTENTS
<S> <C>
Fund Expenses. . . . . . . . . . . . . . . . . . . . . 2
The Fund. . . . . . . . . . . . . . . . . . . . . . . .3
Investment Objective and Policies. . . . . . . . . . . 3
Objective. . . . . . . . . . . . . . . . . . . . .3
Risk Factors. . . . . . . . . . . . . . . . . . . . . .3
Generally. . . . . . . . . . . . . . . . . . . . .3
Non-Diversification. . . . . . . . . . . . . . . .3
Concentration. . . . . . . . . . . . . . . . . . .3
Inexperience of Investment Adviser. . . . . . . . 3
Portfolio Turnover Policy. . . . . . . . . . . . . . . 3
Concentration and Non-Diversification Policy. . . . . .4
Concentration. . . . . . . . . . . . . . . . . . .4
Non-Diversification. . . . . . . . . . . . . . . .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
Initial Investments. . . . . . . . . . . . . . . .9
Subsequent Purchases. . . . . . . . . . . . . . . 9
Reinvestments. . . . . . . . . . . . . . . . . . .9
Fractional Shares. . . . . . . . . . . . . . . . .9
Retirement Plans. . . . . . . . . . . . . . . . . . . 10
Individual Retirement Account. . . . . . . . . . 10
Pricing of Shares. . . . . . . . . . . . . . . . . . .10
Redemption of Shares. . . . . . . . . . . . . . . . . 10
Brokerage. . . . . . . . . . . . . . . . . . . . . . .11
Shareholders Meetings. . . . . . . . . . . . . . . . .11
Custodian and Transfer Agent. . . . . . . . . . . . . 11
Reports to Shareholders. . . . . . . . . . . . . . . .11
Auditors. . . . . . . . . . . . . . . . . . . . . . . 11
Legal Opinion. . . . . . . . . . . . . . . . . . . . .11
Litigation. . . . . . . . . . . . . . . . . . . . . . 11
Additional Information. . . . . . . . . . . . . . . . 12
</TABLE>
PROSPECTUS
BERKSHIRE CAPITAL GROWTH & VALUE FUND
475 Milan Drive, #103
San Jose, California 95134-2453
(408) 526-0707
________ __, 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
are believed 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.
-13-
<PAGE>
BERKSHIRE CAPITAL GROWTH & VALUE FUND
475 Milan Drive, #103
San Jose, California 95134-2453
(408) 526-0707
Part B
STATEMENT OF ADDITIONAL INFORMATION
________ __, 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 _______ __, 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 and Policies. . . . . . . . . . . . . . . . . . . . . . 2
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
Individual Retirement Account. . . . . . . . . . . . . . . . . . . . . .9
Pricing of Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Redemption of Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
Brokerage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Miscellaneous Information. . . . . . . . . . . . . . . . . . . . . . . . . .10
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 AND POLICIES
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 are believed 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 policy of allowing for the
concentration of its investments in the securities of companies in one or more
market sectors. 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.
-2-
<PAGE>
CONCENTRATION AND NON-DIVERSIFICATION POLICY
Concentration: The Fund may, at its discretion, concentrate its investments in
the securities of companies in one or more market sectors such as, for
example, the electronic technology industry. Concentration allows the fund to
invest 25% or more of the value of its total assets in securities of issuers
in a particular industry. The Fund would only concentrate its investments in a
particular market sector if the Fund's investment adviser were to believe the
investment return available from concentration in that sector justifies any
additional risk associated with such concentration. As a result, the Fund may
be subject to greater risk of market fluctuation than that of a fund invested
in a wider spectrum of market sectors.
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 in 1997 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 a W-9 tax form 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 state
that you are exempt from back-up withholding.
-3-
<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 (a) 67% of the shares of
the Fund at a meeting where more than 50% of the outstanding shares are
present in person or by proxy or (b) more than 50% of the outstanding shares
of the Fund. The Fund may not:
(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, but may obtain such short-
term credit as may be necessary for clearance of purchases and sales of
securities for temporary or emergency purposes in an amount not exceeding 5%
of the value of its total assets.
(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 5% 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.
-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, the
founder of the Adviser, has served as Chairman of the Board and Chief
Executive Officer since the company's inception. 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 Berkshire Capital Holdings 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. Dr. Ronald G. Seger has served as Secretary
and member of the Board of Directors of the 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% 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 1% of the
Fund's average daily net assets for the first $10 million and 0.5% of the
Fund's average daily net assets over $10 million. For such fee, Berkshire
Capital Holdings, Inc. will act as the Fund's administrator, transfer agent,
custodian, dividend disbursing agent and provide virtually all customary
services required for Fund operations.
-5-
<PAGE>
ADVISORY AND ADMINISTRATION AGREEMENTS
On ________ __, 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 ("Administration
Agreement") with Berkshire Capital Holdings, Inc. The Advisory Agreement and
the Administration Agreement are effective through December 31, 1997.
Thereafter, it 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 furnish
investment advice to the Trustees of the Fund on the basis of a continuous
review of the portfolio and recommend to the Fund when and to what extent
securities should be purchased or disposed. Pursuant to its contract with the
Fund, the Investment Adviser is required to render research, statistical and
advisory services to the Fund; to make specific recommendations based on the
Fund's investment requirements; and to pay salaries of the Funds employees who
may be officers or 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. Under 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 paid by the Adviser pursuant to Section 3
of the Administration Agreement.
Specifically, the Investment Adviser assumes and shall pay all expenses of the
Fund, including, without limitation: (a) organizational costs, (b) taxes, (c)
interest, (d) brokerage costs, (e) compensation of the Investment Adviser's
personnel and payment of other expenses in connection with provision of
portfolio management services, (f) compensation of any of the Fund's trustees,
officers or employees who are not interested persons of the Investment Adviser
or its affiliates, (g) 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, (h) insurance premiums, (i) fidelity
bond, (j) accounting and bookkeeping costs and expenses necessary to maintain
the Fund's books and records, (k) outside auditing and legal expenses, (l) all
costs associated with shareholders meetings and the preparation and
dissemination of proxy solicitation materials, (m) costs of printing and
distribution of the Fund's Prospectus and other shareholder information to
existing shareholders, (n) charges, if any, of custodian, transfer and
dividend disbursing agent's fees, (o) industry association fees, (p) costs of
independent pricing services and calculation of daily net asset value, (q)
general costs of maintaining the Fund's existence, (r) any extraordinary and
non-recurring expenses and, (s) other expenses properly payable to the Fund.
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.
-6-
<PAGE>
The Investment Advisor 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 the ownership of the Fund are as follows:
<TABLE>
<CAPTION>
Principal Occupation Fund Shares Percent
Name and Address Past 5 Years Owned _/_/97 of Class
- - ----------------------- --------------------------- ------------- --------
<S> <C> <C> <C>
*Malcolm R. Fobes III Trustee; 5,000 50%
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; 5,000 50%
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: 71
</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.
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. They
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.
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 judgment 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. Although the Fund does not
charge a transaction fee, 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 form 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
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 five 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
Individual Retirement Account: Persons who earn compensation and are not
active participants (and who do not have a spouse who is an active
participant) in an employee maintained retirement plan may establish
Individual Retirement Accounts (IRA) using Fund shares. Annual contributions,
limited to the lesser of $2,000 or 100% of compensation, are tax deductible
from gross income. This IRA deduction is also retained for individual
taxpayers and married couples with adjusted gross incomes within certain
specified limits. All individuals may make nondeductible IRA contributions to
separate accounts to the extent that they are not eligible for a deductible
contribution.
Earnings under the IRA are reinvested and are tax-deferred until withdrawals
begin. The maximum annual contribution may be increased to $4,000 if you have
a spouse who earns no compensation during the taxable year. A separate and
independent Spousal IRA must be maintained.
You may begin to make non-penalty withdrawals as early as age 59 1/2 or as
late as age 70 1/2. In the event of death or disability, withdrawals may be
made before age 59 1/2 without penalty.
A Disclosure Statement is required by U.S. Treasury Regulations. This
Statement describes the general provisions of the IRA and is forwarded to all
prospective IRA's. There is no charge to open and maintain a Berkshire Capital
Growth & Value Fund IRA. This policy may be changed by the Board of Trustees
if they deem it to be in the best interests of all shareholders. All IRA's may
be revoked within 7 days of their establishment with no penalty.
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 part of the shares of any shareholder who
tenders a request for redemption (if certificates have not been issued) or
certificates with respect to shares for which certificates have been issued.
In either case, proper endorsements guaranteed either by a national bank or a
member firm of the New York Stock Exchange will be required unless the
shareholder is known to management. The redemption price is the net asset
value per share next determined after notice is received by the Fund for
redemption of shares. 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 and the difference should be treated by the
shareholder as a capital gain or loss for federal income tax purposes.
-9-
<PAGE>
Payment by the Fund will ordinarily be made within three business days after
tender. 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
Securities and Exchange Commission has determined that an emergency exists,
making disposal of fund securities or valuation of net assets not reasonably
practicable. The Fund intends to make payments in cash, however, the Fund
reserves the right to make payments in kind. Although the Fund does not charge
a transaction fee, 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. The Fund will place all orders for purchase and sale of its
portfolio securities through the Fund's President who is answerable to the
Fund's Board of Trustees. He 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, are
helpful or necessary to the Fund's normal operations. Information or services
may include economic studies, industry studies, statistical analysis,
corporate reports, or other forms of assistance to the Fund or Adviser. 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 _______ __,
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.
-10-
<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 be provided by Amendment
-1A-
<PAGE>
Berkshire Capital Investment Trust
Statement of Assets & Liabilities
_______ __, 1997
<TABLE>
<CAPTION>
Berkshire Capital
Growth & Value Fund
------------------
<S> <C>
ASSETS:
Cash in Bank $100,000
Total Assets $100,000
NET ASSETS $100,000
NET ASSETS CONSIST OF: Paid in Capital $100,000
OUTSTANDING SHARES:
Indefinite number of shares
of beneficial interest 10,000
NET ASSET VALUE PER SHARE $ 10
OFFERING PRICE PER SHARE $ 10
</TABLE>
Berkshire Capital Investment Trust
Notes to the Statement of Assets and Liabilities
________ __, 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. 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 10,000 shares of the
Berkshire Capital Growth & Value Fund to its initial investors on ________ __,
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 Advisor.
(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 fees are accrued daily at a rate of 1/365 of 1% of net
assets as stipulated in the advisory agreement. Administrative fees are
accrued daily at a rate of 1/365 of 1% of the first $10 million of net assets
and 1/365 of 0.5% of net assets over $10 million 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% per year on the net assets of the Fund. Under the Administration
Agreement, Berkshire Capital Holdings, Inc. will receive a fee of 1% per year
on the net assets of the Fund for the first $10 million and 0.5% of the net
assets over $10 million. 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 ________ __, 1997 an indefinite number of shares were authorized and
paid-in capital amounted to $100,000 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 10,000
Shares Redeemed 0
Net Increase 10,000
Shares Outstanding at Beginning of Period 0
Shares Outstanding at End of Period 10,000
</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:
Auditors' Report dated ________ __, 1997
Statement of Assets & Liabilities ________ __, 1997
Notes to Statement of Assets and Liabilities ________ __, 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. Reimbursement Agreements
99.8. Consent of Independent Auditors
99.9. Opinion and Consent of Hall & Evans, LLC
Item 25. Control Persons
Not Applicable.
Item 26. Number of Shareholders
Title of Class Number of Record Holders
--------------- --------------------------
Berkshire Capital Growth & Value Fund Two as of ________ __, 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 2) 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.
Item 31. Management Services
Not Applicable
Item 32. Undertakings
Not Applicable
<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 21st day of January, 1997.
Berkshire Capital Investment Trust
/s/ Malcolm R. Fobes III
By: __________________________________
Malcolm R. Fobes III, President
<PAGE>
EXHIBITS
Exhibit No. Description Page
- - ----------- ----------- ----
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. Reimbursement Agreements 7A
99.8. Consent of Independent Auditors 8A
99.9. Opinion and Consent of Hall & Evans, LLC 9A
<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 __ day of January, 1997.
-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
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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>
<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.
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<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.
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(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.
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<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.
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<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.
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<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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<PAGE>
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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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>
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
November 18, 1996.
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 (a) 67% of the shares of the Fund at a meeting where more than 50%
of the outstanding shares are present in person or by proxy or (b) more than
50% of the outstanding shares of the Fund. The Fund may not:
(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, but may obtain such short
term credit as may be necessary for clearance of purchases and sales of
securities for temporary or emergency purposes in an amount not exceeding 5%
of the value of its total assets.
(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 5% 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.
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 November 18, 1996
________________________________________ ____________________
Malcolm R. Fobes III, Trustee Date
/s/ Ronald G. Seger November 18, 1996
________________________________________ ____________________
Ronald G. Seger, Trustee Date
<PAGE>
INVESTMENT ADVISORY AGREEMENT
THIS INVESTMENT ADVISORY AGREEMENT ("Agreement"), is made and
entered into this ____ day of ________, 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% 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, by the Fund or by the
Investment Adviser on sixty (60) days' written notice addressed to the other
party at its principal place of business. 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
By: /s/ Ronald G. Seger By:./s/ Malcolm R. Fobes III
____________________________ ._____________________________
Ronald G. Seger Malcolm R. Fobes III, Trustee
ATTEST: BERKSHIRE CAPITAL HOLDINGS, INC.
By: /s/ Ronald G. Seger By:./s/ Malcolm R. Fobes III
____________________________ ._____________________________
Ronald G. Seger Malcolm R. Fobes III, Chairman
<PAGE>
ADMINISTRATION AGREEMENT
THIS ADMINISTRATION AGREEMENT ("Agreement"), is made this ____ day
of ________, 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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<PAGE>
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
other expenses of the Fund, including, without limitation: (a) organizational
costs, (b) taxes, (c) interest, (d) brokerage costs, (e) compensation of the
Investment Adviser's personnel and payment of other expenses in connection
with provision of portfolio management services, (f) compensation of any of
the Fund's trustees, officers or employees who are not interested persons of
the Investment Adviser or its affiliates, (g) 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, (h) insurance premiums, (i)
fidelity bond, (j) accounting and bookkeeping costs and expenses necessary to
maintain the Fund's books and records, (k) outside auditing and legal
expenses, (l) all costs associated with shareholders meetings and the
preparation and dissemination of proxy solicitation materials, (m) costs of
printing and distribution of the Fund's Prospectus and other shareholder
information to existing shareholders, (n) charges, if any, of custodian,
transfer and dividend disbursing agent's fees, (o) industry association fees,
(p) costs of independent pricing services and calculation of daily net asset
value, (q) general costs of maintaining the Fund's existence, (r) any
extraordinary and non-recurring expenses and (s) other expenses properly
payable to 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 equal to one-twelfth of 1% of the Fund's average
daily net assets for the first $10 million of average daily net assets and
0.5% of the Fund's average daily net assets for average daily net assets over
$10 million, 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.
<PAGE>
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:
<PAGE>
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
By: /s/ Ronald G. Seger By:./s/ Malcolm R. Fobes III
____________________________ ._____________________________
Ronald G. Seger Malcolm R. Fobes III, Trustee
ATTEST: BERKSHIRE CAPITAL HOLDINGS, INC.
By: /s/ Ronald G. Seger By:./s/ Malcolm R. Fobes III
____________________________ ._____________________________
Ronald G. Seger Malcolm R. Fobes III, Chairman
<PAGE>
Reimbursement Agreements
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.
-7A-
<PAGE>
MEREDITH, CARDOZO & LANZ, LLP
Certified Public Accountants
97 South Second Street, Suite #100
San Jose, California 95113
(408) 278-0220
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the use in the Registration Statement on Form N-1A of Berkshire
Capital Investment Trust of our report dated ________ __ 1997, on our audit of
the financial statements of the Trust.
We also consent to the reference to our firm in such Registration Statement.
MEREDITH, CARDOZO & LANZ, LLP
San Jose, California
________ __, 1997
-8A-
<PAGE>
Hall & Evans, LLC
Attorneys at Law
Suite 1700
1200 Seventeenth Street
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
-9A-
<PAGE>
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, LLC
