SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. ___ [_]
Post-Effective Amendment No. ___ [_]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. ___ [_]
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PRASAD SERIES TRUST
(Exact name of registrant as specified in charter)
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The Tower at Erieview, 36th Floor, 1301 East Ninth Street,
Cleveland, Ohio 44114-1800
(Address of principal executive offices)
Registrant's Telephone Number: 216-687-1000
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Rajendra Prasad, 821 Hillside Drive, Long Beach, CA
90815 (Name and address of agent for service)
Copy to:
Michael J. Meaney, Esq.
Benesch, Friedlander, Coplan & Aronoff LLP
2300 BP America Building, 200 Public Square, Cleveland, Ohio 44114
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Approximate date of proposed public offering: As soon as practicable after the
effective date of the Registration Statement.
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, Registrant has
elected to register an indefinite number of shares of beneficial interest. The
amount of the registration fee pursuant to Rule 24f-2 of the Investment Company
Act of 1940 is $500.
The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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PRASAD GROWTH FUND The Tower at Erieview, 36th Floor
1301 East Ninth Street
Cleveland, Ohio 44114
(216) 687-1000
Prasad Growth Fund (the "Fund") is a portfolio of Prasad Series Trust, an
open-end management investment company (the "Trust").
The Fund has an investment objective of obtaining capital appreciation. It seeks
to achieve this objective by investing in equity securities.
This Prospectus sets forth concisely the information about the Fund that a
prospective investor ought to know before investing. Investors should read this
Prospectus and retain it for future reference. Additional information about the
Fund has been filed with the Securities and Exchange Commission (the "SEC") in a
Statement of Additional Information dated the same date as this Prospectus and
is available upon request and without charge by calling the Fund's Transfer
Agent, Maxus Information Systems, Inc. at 1-800-44-MAXUS (1-800-446-2987) or at
(216) 687-1000. Such additional information is hereby incorporated by reference
into this Prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESEN TATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PROSPECTUS/_____________, 1998
Investors are advised to read this Prospectus and to retain it for future
reference.
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HIGHLIGHTS
Investment Objectives. The investment objective of the Fund is to obtain capital
appreciation. No assurance can be given that the Fund will achieve its
objective. See "Investment Objective and Management Techniques."
No Sales Charge. The Fund sells and redeems its shares at net asset value
without any sales charges or redemption charges.
Liquidity. The Fund continuously offers and redeems shares at the net asset
value next computed after receipt by the Fund's Transfer Agent of a purchase
order or redemption request in proper form.
See "How to Purchase Shares" and "How to Redeem Shares."
Minimum Investment. The minimum initial investment in the Fund is $1,000, with
subsequent minimum investments of $100. See "How to Purchase Shares." The Fund
has the right to redeem the shares in an account and pay the proceeds to the
shareholder if, because of shareholder redemptions, the value of the account
drops below $1,000. See "How to Redeem Shares."
Dividends. The Fund intends to pay dividends at least once annually to
shareholders. Unless otherwise directed, all dividends will be automatically
reinvested in additional shares. See "Dividends, Distributions and Taxes."
Investment Adviser. Mutual Funds Leader, Inc. (the "Adviser") is the investment
adviser for the Fund. Its annual fee is 1% of the Fund's net assets. The Adviser
is newly formed and has no prior experience as an adviser to mutual funds. The
Adviser is controlled by Rajendra Prasad, Chairman of the Trust. See "Investment
Management."
Risk Factors. The Fund is subject to the following risks (among others):
o Shares of the Fund may lose value, depending on market,
economic and other conditions affecting the securities in
which the Fund invests. The Fund is not intended to provide a
balanced investment program.
o The Fund is non-diversified, which may result in greater
fluctuation in the Fund's share value than would be the case
if the Fund was diversified.
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FEE TABLE
Annual Fund Operating Expenses (as a percentage of average net assets)
Management Fees 1.00%
Other Expenses* 0.50%
Total Fund Operating
Expenses* 1.50%
* Based on estimated expenses for the current fiscal year.
A shareholder who requests that the proceeds of a redemption be sent by
wire transfer will be charged for the cost of such wire, which is $7.00 as of
the date of this Prospectus (subject to change without notice).
Example 1 year 3 years
------ -------
You would pay the following expenses
on a $1,000 investment in Shares of the
Fund, assuming (1) 5% annual return and
(2) redemption at the end of each time period: $15 $47
The purpose of the foregoing table is to assist you in understanding
the various costs and expenses that an investor in the Fund will bear, directly
or indirectly. The Example set forth in the foregoing table should not be
considered a representation of actual or expected expenses or returns. Actual
expenses or returns may be greater or lesser than those shown.
INVESTMENT OBJECTIVE AND MANAGEMENT TECHNIQUES
Investment Objective
The Fund is a non-diversified fund whose investment objective is to
obtain capital appreciation. This objective is a fundamental policy of the Fund
and may not be changed without approval of a majority of the Fund's shares.
There is no assurance that this investment objective will be achieved.
Equity Securities
In seeking its objective, except as described below, this Fund will
invest exclusively in equity securities. Equity securities are common stocks and
preferred stocks and securities convertible into or exchangeable for common
stocks or preferred stocks, including American Depository Receipts ("ADR's"). In
selecting equity securities, the Adviser will seek to invest in companies which
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have high earnings growth rates and which currently demonstrate superior long
term capital appreciation relative to other equity securities and the S&P 500
Index.
Money Market Mutual Funds
The Fund may also invest up to 100% of the Fund's assets in money
market mutual funds (i) for temporary defensive purposes (without monetary
limitation) when and to the extent that, in the judgment of the Adviser, other
investments involve unreasonable risk or (ii) as may be considered necessary to
accumulate cash in order to meet anticipated redemptions.
Options
For the purposes of achieving capital appreciation, the Fund may invest
up to 5% of its net assets in put and call options which trade on securities
exchanges and for which it pays a premium (cost of option). The Fund may sell
the options, exercise them, or permit them to expire. The Fund may suffer a
total loss of its investment if the underlying security decreases in value in
the case of a call option or increase in value in the case of a put option.
Warrants
The Fund may invest up to 5% of its net assets in warrants, which are
options to purchase a specified security at a specified price (usually
representing a premium over the applicable market value of the underlying equity
security at the time of the warrant's issuance) and usually during a specified
period of time. They are usually issued by the issuer of the security to which
they relate. While warrants may be traded, there is often no secondary market
for them. The prices of the warrants do not necessarily move parallel to the
prices of the underlying securities. Holders of warrants have no voting rights,
receive no dividends and have no rights with respect to the assets of the
issuer. To the extent that the market value of the security that may be
purchased upon exercise of the warrant rises above the exercise price, the value
of the warrant will tend to rise. To the extent that the exercise price equals
or exceeds the market value of such security and the warrant is not exercised
within the specified time period, it will become worthless and the Fund will
lose the purchase price paid for the warrant and the right to purchase the
underlying security.
Futures Contracts
For the purpose of hedging the Fund's investment in equity securities
or its cash position, the Fund may invest up to 5% of its net assets in futures
contracts for the purchase or sale of specific securities or stock indexes. A
futures contract is an agreement between two parties to buy and sell a security
or an index for a set price on a future date. Futures are generally bought and
sold on commodity exchanges.
In the event of an imperfect correlation between the futures contract
and the portfolio position that is intended to be protected, the desired
protection may not be obtained and the Fund may be exposed to risk of loss.
Further, unanticipated changes in stock price movements may result in a poorer
overall performance for the Fund than if it had not entered into futures
contracts. Finally, positions in futures contracts may be closed out only on an
exchange that provides a secondary market for such futures. There is no
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assurance that a liquid secondary market on an exchange will exist at any
particular time.
Short Sales
The Fund may seek to realize additional gains through short sale
transactions in securities listed on one or more national securities exchanges
or on NASDAQ. Short selling involves that sale of borrowed securities. At the
time a short sale is effected, the Fund incurs an obligation to replace the
security borrowed at whatever its price may be at the time the Fund purchases it
for delivery to the lender.
Since short selling can result in profits when stock prices generally
decline, the Fund in this manner, can, to a certain extent, hedge the market
risk to the value of its other investments and protect its equity in a declining
market. However, the Fund could, at any given time, suffer both a loss on the
purchase or retention of one security if that security should decline in value,
and a loss on a short sale of another security, if the security sold short
should increase in value. When a short position is closed out, it may result in
a short term capital gain or loss for federal income tax purposes. Moreover, to
the extent that in a generally rising market the Fund maintains short positions
in securities rising with the market, the net asset value of the Fund would be
expected to increase to a lesser extent than the net asset value of a mutual
fund that does not engage in short sales.
No short sales will be effected which will, at the time of making such
short sale transaction and giving effect thereto, cause the aggregate market
value of all securities sold short to exceed 25% of the value of the Fund's net
assets. The value of the securities of any one issuer that have been shorted by
the Fund is limited to the lesser of 2% of the value of the Fund's net assets or
2% of the securities of any class of the issuer. In addition, to secure the
Fund's obligation to replace any borrowed security, it will place in a
segregated account, an amount of cash or U.S. Government securities equal to the
difference between the market value of the securities sold short at the time of
the short sale and any cash or U.S. Government securities originally deposited
with the broker in connection with the short sale (excluding the proceeds of the
short sale). The Fund will thereafter maintain daily the segregated amount at
such a level that the amount deposited in it plus the amount originally
deposited with the broker as collateral will equal the greater of the current
market value of the securities sold short or the market value of the securities
at the time they were shold short. The Fund may make short sales "against the
box", i.e., sales made when the Fund owns securities identical to those sold
short.
For a description of the principal risks of investing in the Fund, in
addition to the risks described above, please read the section of this
Prospectus entitled "Risks and Other Considerations."
Portfolio Turnover
The Fund is not restricted with regard to portfolio turnover and will
make changes in its investment portfolio from time to time as business and
economic conditions and market prices may dictate and its investment policies
may require. It is estimated that the portfolio turnover rate generally will not
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exceed 100%. A high rate of portfolio turnover in any year will increase
brokerage commissions paid and could result in high amounts of realized
investment gain subject to the payment of taxes by shareholders. However, the
Fund expects to minimize these potential adverse effects of portfolio turnover
through its use of discount brokers and through investment in a relatively small
number of portfolio securities. Any realized net short-term investment gain will
be taxed to shareholders as ordinary income. See "Dividends, Distributions and
Taxes" below.
INVESTMENT POLICIES AND RESTRICTIONS
The Fund has adopted certain fundamental policies which may not be
changed without the approval of the holders of a majority of the Fund's
outstanding voting securities (as defined in the 1940 Act). Certain of these
policies are detailed below, while other policies are set forth in the Statement
of Additional Information. The Fund may not:
(1) invest more than 25% of the value of the Fund's total
assets in securities of companies in a particular industry (except
cash, money market mutual funds and obligations issued or guaranteed by
the United States Government, its agencies and instrumentalities);
(2) purchase the securities of any issuer if, as a result,
more than 10% of the value of the Fund's net assets would be invested
in securities that are not readily marketable;
(3) With respect to 50% of the total assets of the Fund,
purchase a security of any issuer (other than cash, money market mutual
funds and obligations issued or guaranteed by the United States
Government, its agencies and instrumentalities) if such purchase would
cause the Fund's holdings of that issuer to amount to more than 5% of
the Fund's total assets; or
(4) Invest more than 25% of its assets in a single issuer
(other than cash, money market mutual funds and obligations issued or
guaranteed by the United States Government, its agencies and
instrumentalities).
Changes in values of Fund assets or the assets of the Fund as a whole
will not cause a violation of the investment restrictions so long as percentage
restrictions are observed by the Fund at the time it purchases any security.
Other investment policies are discussed in the Statement of Additional
Information under the heading "Investment Policies and Restrictions."
RISKS AND OTHER CONSIDERATIONS
The Fund is not intended to provide a balanced investment program to
meet all requirements of every investor. No assurance can be given that the Fund
will achieve its investment objective.
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The prices of equity securities fluctuate based on changes in a
company's activities and financial condition and in overall market and financial
conditions. The value of an investment in the Fund may sometimes decrease
instead of increase.
Additional risks associated with specific permitted investment
activities of the Fund are discussed in connection with the descriptions of
those activities under "Investment Objective and Management Techniques".
The Fund is a "non-diversified" fund. The Fund is considered
"non-diversified" because a relatively high percentage of the Fund's assets may
be invested in the securities of a limited number of issuers. The Fund's
portfolio securities, therefore, may be more susceptible to any single economic,
political, or regulatory occurrence than the portfolio securities of a more
diversified investment company. The Fund's classification as a "non-diversified"
investment company means that the proportion of the Fund's assets that may be
invested in the securities of a single issuer is not limited by the Investment
Company Act of 1940 (the "1940 Act"). The Fund, however, intends to seek to
qualify as a "regulated investment company" for purposes of the Internal Revenue
Code, which imposes diversification requirements on the Fund that are less
restrictive than the requirements applicable to "diversified" investment
companies under the 1940 Act.
The Fund reserves the right to become a "diversified fund" by limiting
the investments in which more than 5% of its total assets are invested.
PERFORMANCE
From time to time, the Fund may advertise performance data represented
by a cumulative total return or an average annual total return. Total returns
are based on the overall or percentage change in value of a hypothetical
investment in the Fund and assume all of the Fund's dividends and capital gain
distributions are reinvested. A cumulative total return reflects the Fund's
performance over a stated period of time. An average annual total return
reflects the hypothetical annually compounded return that would have produced
the same cumulative total return if the Fund's performance had been constant
over the entire period. Because average annual returns tend to smooth out
variations in the Fund's returns, it should be recognized that they are not the
same as actual year-by-year results.
Performance may be compared to well-known indices such as the S&P 500
Index or alternative investments such as Treasury Bills. Also, the Fund may
include published editorial comments compiled by independent organizations such
as Lipper Analytical Services or Morningstar, Inc.
All performance information is historical in nature and is not intended
to represent or guarantee future results. The value of Fund shares when redeemed
may be more or less than their original cost.
Further information about the performance of the Fund is contained in
the Fund's Annual Report to Shareholders which may be obtained from the Fund
without charge.
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HOW TO PURCHASE SHARES
Shares may be purchased by any investor without a sales charge. A
minimum initial investment of $1,000 is required to open an account with
subsequent minimum investments of $100. Investment minimums may be waived at the
discretion of the Fund.
Shareholders Accounts
When a shareholder invests in the Fund, Maxus Information Systems Inc.,
the Transfer Agent for the Fund, will establish an open account to which all
full and fractional shares (to three decimal places) will be credited, together
with any dividends and capital gains distributions, which are paid in additional
shares unless the shareholder otherwise instructs the Transfer Agent. Stock
certificates will be issued for full shares only when requested in writing. Each
shareholder is notified of the status of his account following each purchase or
sale transaction.
Initial Purchase
The initial purchase may be made by check or by wire in the following
manner:
By Check. The Account application which accompanies this Prospectus should be
completed, signed, and, along with a check for the initial investment payable to
Prasad Series Trust, mailed to: Maxus Information Systems Inc., The Tower at
Erieview, 36th Floor, 1301 East Ninth Street, Cleveland, Ohio 44114.
By Wire. In order to expedite the investment of funds, investors may advise
their bank or broker to transmit funds via Federal Reserve Wire System to:
[Fifth Third Bank, __________________.] Also provide the shareholder's name and
account number. In order to obtain this needed account number and receive
additional instructions, the investor may contact, prior to wiring funds, Maxus
Information Systems Inc., at 1-800-44-MAXUS (1-800-466-2987) or at (216)
687-1000. The investor's bank may charge a fee for the wire transfer of funds.
Subsequent Purchases
Investors may make additional purchases in the following manner:
By Check. Checks made payable to Prasad Series Trust should be sent, along with
the stub from a previous purchase or sale confirmation, to Maxus Information
Systems Inc., The Tower at Erieview, 36th Floor, 1301 East Ninth Street,
Cleveland, Ohio 44114.
By Wire. Funds may be wired by following the previously discussed wire
instructions for an initial purchase.
By Telephone. Investors may purchase shares up to an amount equal to 3 times the
market value of shares held in the shareholder's account in the Fund on the
preceding day for which payment has been received, by telephoning Maxus
Information Systems Inc., at 1-800-44-MAXUS (1-800-466-2987) or at (216)
687-1000 and identifying their account by number. Shareholders wishing to
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available themselves of this privilege must complete a Telephone Purchase
Authorization Form which is available from the Fund. A confirmation will be
mailed and payment must be received within 3 business days of date of purchase.
If payment is not received within 3 business days, the Fund reserves the right
to redeem the shares purchased by telephone, and if such redemption results in a
loss to the Fund, redeem sufficient additional shares from the shareholder's
account to reimburse the Fund for the loss. Payment may be made by check or by
wire. The Adviser has agreed to hold the Fund harmless from net losses resulting
from this service to the extent, if any, not reimbursed from the shareholder's
account. This telephone purchase option may be discontinued without notice.
Systematic Investment Plan
The Systematic Investment Plan permits investors to purchase shares of
the Fund at monthly intervals. Provided the investor's bank or other financial
institution allows automatic withdrawals, shares may be purchased by
transferring funds from the account designated by the investor. At the
investor's option, the account designated will be debited in the specified
amount, and shares will be purchased once a month, on or about the 15th day.
Only an account maintained at a domestic financial institution which is an
Automated Clearing House member may be so designated. Investors desiring to
participate in the Systematic Investment Plan should call the Transfer Agent at
1-800-44-MAXUS (1-800-466-2987) or at (216) 687-1000 to obtain the appropriate
forms. The Systematic Investment Plan does not assure a profit and does not
protect against loss in declining markets.
Price of Shares
The price paid for shares of the Fund is the net asset value per share
of the Fund next determined after receipt by the Transfer Agent of properly
identified purchase funds, except that the price for shares purchased by
telephone is the net asset value per share next determined after receipt of
telephone instructions. Net asset value per share is computed for the Fund as of
the close of business (currently 4:00 P.M., New York time) each day the New York
Stock Exchange is open for trading and on each other day during which there is a
sufficient degree of trading in the Fund's investments to affect materially net
asset value of its redeemable securities. Net asset value of the Fund is
determined by totaling the value of all portfolio securities, cash, other assets
held by the Fund, and interest and dividends accrued and subtracting from that
amount all liabilities, including accrued expenses. The net asset value of the
Fund is divided by the total number of shares outstanding to determine the net
asset value of each share.
For purposes of computing the net asset value per share, securities
listed on a national securities exchange or on the NASDAQ National Market System
will be valued on the basis of the last sale of the date on which the valuation
is made or, in the absence of sales, at the closing bid price. Over-the-counter
securities will be valued on the basis of the bid price at the close of business
on each day or, if market quotations are not readily available, at fair value as
determined in good faith by the Board of Trustees. Unless the particular
circumstances (such as an impairment of the credit-worthiness of the issuer)
dictate otherwise, the fair value of short-term securities with maturi ties of
60 days or less shall be their amortized cost. All other securities and other
assets of the Fund will be valued at their fair value as determined in good
faith by the Board of Trustees.
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Other Information Concerning Purchase of Shares
The Fund reserves the right to reject any order, to cancel any order
due to non-payment and to waive or lower the investment minimums with respect to
any person or class of persons. If an order is canceled because of non-payment
or because your check does not clear, you will be responsible for any loss that
the Fund incurs. If you are already a shareholder, the Fund can redeem shares
from your account to reimburse it for any loss. The Adviser has agreed to hold
the Fund harmless from net losses to the Fund resulting from the failure of a
check to clear to the extent, if any, not recovered from the investor. For
purchases of $50,000 or more, the Fund may, in its discretion, require payment
by wire or cashier's or certified check.
HOW TO REDEEM SHARES
All shares of the Fund offered for redemption will be redeemed at the
net asset value per share of the Fund next determined after receipt of the
redemption request, if in good order, by the Transfer Agent. See "Price of
Shares." Because the net asset value of the Fund's shares will fluctuate as a
result of changes in the market value of securities owned, the amount a
stockholder receives upon redemption may be more or less than the amount paid
for the shares. Redemption proceeds will be mailed to the shareholder's
registered address of record or, if $5,000 or more, may be transmitted by wire,
upon request, to the shareholder's pre-designated account at a domestic bank.
The shareholder will be charged for the cost of such wire. If shares have been
purchased by check and are being redeemed, redemption proceeds will be paid only
after the check used to make the purchase has cleared (usually within 15 days
after payment by check). This delay can be avoided if, at the time of purchase,
the shareholder provides payment by certified or cashier's check or by wire
transfer.
Redemption by Mail
Shares may be redeemed by mail by writing directly to the Fund's
Transfer Agent, Maxus Information Systems Inc., The Tower at Erieview, 36th
Floor, 1301 East Ninth Street, Cleveland, Ohio 44114. The redemption request
must be signed exactly as the shareholder's name appears on the registration
form, with the signature guaranteed, and must include the account number. If
shares are owned by more than one person, the redemption request must be signed
by all owners exactly as the names appear on the registration.
A request for redemption will not be processed until all of the
necessary documents have been received in proper form by the Transfer Agent. A
shareholder in doubt as to what documents are required should contact Maxus
Information Systems Inc. at 1-800-44-MAXUS (1-800-466-2987) or at (216)
687-1000.
You should be able to obtain a signature guarantee from a bank,
broker-dealer, credit union (if authorized under state law), securities exchange
or association, clearing agency or savings association. A notary public is not
an acceptable guarantor. The Fund may in its discretion waive the signature
guarantee in certain instances.
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Redemption By Telephone
Shares may be redeemed by telephone by calling Maxus Information
Systems Inc. at 1-800-44-MAXUS (1-800-466-2987) or at (216) 687-1000 between
9:00 A.M. and 4:00 P.M. eastern time on any day the New York Stock Exchange is
open for trading. An election to redeem by telephone must be made on the initial
application form or on other forms prescribed by the Fund which may be obtained
by calling the Funds at either of such phone numbers. This form contains a space
for the shareholder to supply his own four digit identification number which
must be given upon request for redemption. The Fund will not be liable for
following instructions communicated by telephone that the Fund reasonably
believes to be genuine. If the Fund fails to employ reasonable procedures to
confirm that instructions communicated by telephone are genuine, the Fund may be
liable for any losses due to unauthorized or fraudulent instructions. Any
changes or exceptions to the original election must be made in writing with
signature guaranteed, and will be effective upon receipt by the Transfer Agent.
The Transfer Agent and the Fund reserve the right to refuse any telephone
instructions and may discontinue the aforementioned redemption option without
notice. The minimum telephone redemption is $1,000.
Other Information Concerning Redemption
The Fund reserves the right to take up to seven days to make payment
if, in the judgment of the Fund's Investment Adviser, the Fund could be affected
adversely by immediate payment. In addition, the right of redemption for the
Fund may be suspended or the date of payment postponed (a) for any period during
which the NYSE is closed (other than for customary week-end and holiday
closings), (b) when trading in the markets that the Fund normally utilizes is
restricted, or when an emergency, as defined by the rules and regulations of the
SEC, exists, making disposal of the Fund's investments or determination of its
net asset value not reasonably practicable, or (c) for any other periods as the
SEC by order may permit for protection of that Fund's shareholders.
Due to the high cost of maintaining accounts, the Fund has the right to
redeem, upon not less than 30 days written notice, all of the shares of any
shareholder if, through redemptions, the shareholder's account has a net asset
value of less than $1,000. A shareholder will be given at least 30 days written
notice prior to any involuntary redemption and during such period will be
allowed to purchase additional shares to bring his account up to the applicable
minimum before the redemp tion is processed.
SYSTEMATIC WITHDRAWAL PLAN
Shareholders who own shares of the Fund valued at $15,000 or more may
elect to receive a monthly or quarterly check (or direct deposit to the
shareholder's checking account) in a stated amount (minimum amount is $100 per
month or quarter). Shares will be redeemed at net asset value as may be
necessary to meet the withdrawal payments. If withdrawal payments exceed
reinvested dividends and distributions, the investor's shares will be reduced
and eventually depleted. A withdrawal plan may be terminated at any time by the
shareholder or the applicable Fund. Costs associated with a withdrawal plan are
borne by the Fund. Additional information regarding systematic withdrawal plans
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may be obtained by calling Maxus Information Systems Inc. at 1-800-44-MAXUS
(1-800-466-2987) or at (216) 687-1000.
INVESTMENT MANAGEMENT
Trustees and Officers
The business and affairs of the Fund are managed under the direction of
the Board Trustees of the Trust, as required by Delaware law. The day-to-day
operations of the Fund are conducted through or under the direction of its
officers. By virtue of the responsibilities assumed by the Adviser as investment
adviser (see below), the Fund has no executive employees other than its
officers, each of whom is employed by the Adviser and none of whom devotes full
time to the affairs of the Fund. No officer, director or employee of the Adviser
receives any compensation from the Fund for serving as a Trustee or officer of
the Fund. The Fund pays each Trustee who is not an officer, director or employee
of the Adviser or any of its affiliates a fee of $125 per meeting attended and
reimburses each such Trustee for travel and out-of-pocket expenses.
The Investment Adviser
The Fund has retained as its investment adviser Mutual Funds Leader,
Inc. (the "Adviser"), 821 Hillside Drive, Long Beach, California 90815, an
investment management firm founded in 1998. The Adviser is registered under the
Investment Advisers Act of 1940. The Adviser has not been sponsored, recommended
or approved, nor have its abilities or qualifications been passed upon, by the
Securities and Exchange Commission or any other government agency.
Rajendra Prasad, M.D. is the person primarily responsible for the
management of the portfolio of the Fund. Dr. Prasad is a part-time practicing
physician. He personally was registered as an investment advisor under the
Investment Advisors Act of 1940 from 1992 to 1998 and has managed accounts of
individual investors since 1996. From 1993 to the present, he has published a
monthly newsletter, "The Mutual Funds Leader," which seeks to guide investors in
selecting mutual funds. Neither the Adviser nor Dr. Prasad has any prior
experience in advising mutual funds.
Subject to the supervision and direction of the Fund's Trustees, the
Adviser manages the Fund's portfolio in accordance with the stated policies of
the Fund. The Adviser makes investment decisions for the Fund and places the
purchase and sale orders for portfolio transactions. In addition, the Adviser or
its affiliates furnishes office facilities and administrative services necessary
to perform its duties, pays the salaries of any officers or employees who are
employed by both it and the Fund and, subject to the direction of the Trust's
Board of Trustees, is responsible for the overall management of the business
affairs of the Fund.
Advisory Fee
The Adviser receives from the Fund as compensation for its services to
the Fund an annual fee of 1% of the Fund's net assets. This fee is higher than
that paid by most other investment companies. The fee is paid monthly and
calculated on the basis of that month's net assets.
12
<PAGE>
Expenses Borne by The Fund
The Fund pays all expenses not assumed by the Adviser, including
brokerage fees and commissions, fees of Trustees not affiliated with the
Adviser, expenses of registration of the Fund and of the shares of the Fund with
the Securities and Exchange Commission and the various states, charges of the
custodian, dividend and transfer agent, outside auditing and legal expenses,
liability insurance premiums on property or personnel (including officers and
trustees), maintenance of trust existence such as the filing of reports required
by state law, any taxes payable by the Fund, interest payments relating to Fund
borrowings, costs of preparing, printing and mailing registration statements,
prospectuses, periodic reports and other documents furnished to shareholders and
regulatory authorities, fees and expenses of legal counsel, and costs of
printing share certificates, portfolio pricing services and shareholder
meetings.
Execution of Portfolio Transactions
Orders for transactions in portfolio securities for the Fund are placed
by the Adviser with securities broker-dealers with the objective of obtaining
the best available price, investment services and execution. Cost of execution
(commissions) is an important consideration but may not be the overriding
determinant.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund will declare and pay, at least annually, dividends to
shareholders of substantially all of its net investment income, if any, earned
during the year from investments, and will distribute net realized capital
gains, if any, once each year. All dividends and distributions will be
reinvested automatically at net asset value in additional shares of the Fund
unless the shareholder has notified the Fund in writing of his election to
receive distributions in cash.
The Fund will be treated as a separate entity for federal income tax
purposes. The Fund intends to qualify continually as a regulated investment
company under Subchapter M of the Internal Revenue Code (the "Code"). Such
qualification removes from the Fund any liability for federal income taxes upon
the portion of its income distributed to shareholders and makes federal income
tax upon such distributed income generated by the Fund's investments the sole
responsibility of the shareholders. Continued qualification requires the Fund to
distribute to its shareholders each year substantially all of its income and
capital gains. In addition, amounts not distributed on a timely basis in
accordance with a calendar year distribution requirement are subject to a
nondeductible four percent (4%) excise tax. To prevent imposition of the excise
tax the Fund must distribute for each calendar year an amount equal to the sum
of (1) at least 98% of its calendar year net ordinary income, (2) at least 98%
of the excess of its capital gains over capital losses (adjusted for certain
ordinary losses) realized during the one-year period ending December 31 of such
year, and (3) 100% of any undistributed net ordinary income and net capital
gains for previous years. A distribution will be treated as paid on December 31
of the calendar year if it is declared by the Fund in December of that year with
a record date in December and paid by the Fund during January of the following
calendar year. Such distributions will be taxable to shareholders in the
calendar year in which the distributions are declared, rather than the calendar
13
<PAGE>
year in which the distributions are received. The Fund will notify shareholders
of the tax status of dividends and distributions.
Any dividend or distribution paid by the Fund has the effect of
reducing the net asset value per share on the ex-dividend date by the amount of
the dividend or distribution. Therefore, a dividend or distribution paid shortly
after a purchase of shares by an investor would represent, in substance, a
return of capital to the shareholder, even though subject to income taxes.
The Fund may also, from time to time, pay dividends in excess of net
income and net realized capital gains. Any such excess dividends would
constitute a non-taxable return of capital to the shareholder.
Depending on the residence of the shareholder for tax purposes,
distributions also may be subject to state and local taxes, including
withholding taxes. Shareholders should consult their own tax advisers as to the
tax consequences of ownership of shares of the Fund in their particular
circumstances.
In accordance with the Code, the Fund may be required to withhold a
portion of dividends or redemptions or capital gains paid to a shareholder and
remit such amount to the Internal Revenue Service if the shareholder fails to
furnish the Fund with a correct taxpayer identification number, if the
shareholder fails to supply the Fund with a tax identification number
altogether, if the investor fails to make a required certification that his
taxpayer identification number is correct and that he is not subject to backup
withholding, or if the Internal Revenue Service notifies the Fund to withhold a
portion of such distributions from a shareholder's account.
GENERAL INFORMATION
The Fund is a non-diversified portfolio of Prasad Series Trust (the
"Trust"). The Trust is an open-end management investment company, organized as a
business trust under the laws of the State of Delaware by an Agreement and
Declaration of Trust dated July 31, 1998. The Agreement and Declaration of Trust
provides for an unlimited number of authorized shares, which may, without
shareholder approval, be divided into an unlimited number of series of such
shares. There presently is only a single series of shares, that is, for the
Fund. Each share represents an equal proportionate interest in the Fund with
other shares of the same series, and is entitled to such dividends and
distributions out of the income earned on the assets belonging to the Fund as
are declared at the discretion of the Trustees. All consideration received by
the Trust for shares of the Fund and all assets in which such consideration is
invested will belong to the Fund and will be subject to the liabilities relating
thereto.
Shareholders are entitled to one vote per share (with proportional
voting for fractional shares) on such matters as shareholders are entitled to
vote. Shareholders vote in the aggregate and not by series on all matters except
that shares shall be voted by individual series when required by the 1940 Act or
when the Trustees have determined that the matter affects only the interests of
a particular series.
14
<PAGE>
As used in this Prospectus and in the Statement of Additional
Information, a "vote of a majority of the outstanding Shares" of the Trust or a
particular Fund means the affirmative vote, at a meeting of shareholders duly
called, of the lesser of (a) 67% or more of the votes of shareholders of the
Trust or such Fund present at such meeting at which the holders of more than 50%
of the votes attributable to the shareholders of record of the Trust or such
Fund are represented in person or by proxy, or (b) the holders of more than 50%
of the outstanding votes of shareholders of the Trust or such Fund.
Although the Trust is not required to hold annual meetings of the
shareholders, shareholders holding at least 10% of the Trust's outstanding
shares have the right to call a meeting to elect or remove one or more of the
Trustees of the Trust.
Upon issuance and sale in accordance with the terms of this Prospectus,
each share will be fully paid and non-assessable. Shares of the Fund have no
preemptive, subscription or conversion rights and are redeemable as set forth
under "How to Redeem Shares." The Agreement and Declaration of Trust also
provides that shareholders shall not be subject to any personal liability for
the acts or obligations of the Fund and that every agreement, obligation or
instrument entered into or executed by the Fund shall contain a provision to the
effect that the shareholders are not personally liable thereunder.
In order to provide the initial capital for the Fund, the Adviser has
purchased a total of 10,000 Shares of the Fund at $10.00 per share for an
aggregate purchase price of $100,000. As long as the Adviser owns more than 25%
of the Fund's shares, it will be deemed to be in "control" of the Fund as that
term is defined in the 1940 Act.
Fifth Third Bank, 38 Fountain Square Plaza, Cincinnati, Ohio 45263, is
the custodian for the Fund's securities and cash. Maxus Information Systems
Inc., The Tower at Erieview, 36th Floor, 1301 East Ninth Street, Cleveland, Ohio
44114, is the Fund's Transfer, Redemption and Dividend Distributing Agent.
McCurdy & Associates C.P.A.'s, Inc., 27955 Clemens Road, Westlake, Ohio
44145, have been appointed as independent accountants for the Funds.
Benesch, Friedlander, Coplan & Aronoff LLP, 2300 BP America Building,
200 Public Square, Cleveland, Ohio 44114, is legal counsel to the Funds and to
the Adviser.
Shareholder inquiries should be directed to the Secretary of the Trust
at The Tower at Erieview, 36th Floor, 1301 East Ninth Street, Cleveland, Ohio
44114.
15
<PAGE>
No dealer, salesman, or other person has been authorized to give any information
or to make any representations, other than those contained in this Prospectus,
and, if given or made, such other information or representations must not be
relied upon as having been authorized by the Funds or the Adviser. This
Prospectus does not constitute an offering in any state in which such offering
may not lawfully be made.
TABLE OF CONTENTS Page
HIGHLIGHTS.....................................................................2
FEE TABLE......................................................................3
INVESTMENT OBJECTIVE AND MANAGEMENT TECHNIQUES.................................3
INVESTMENT POLICIES AND RESTRICTIONS...........................................4
RISKS AND OTHER CONSIDERATIONS.................................................5
PERFORMANCE....................................................................5
HOW TO PURCHASE SHARES.........................................................6
HOW TO REDEEM SHARES...........................................................8
SYSTEMATIC WITHDRAWAL PLAN.....................................................9
INVESTMENT MANAGEMENT.........................................................10
DIVIDENDS, DISTRIBUTIONS AND TAXES............................................11
GENERAL INFORMATION...........................................................12
<PAGE>
Investors are advised to read
this Prospectus and to retain
it for future reference.
PRASAD GROWTH FUND
PROSPECTUS
_______________, 1998
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
____________, 1998
PRASAD GROWTH FUND
The Tower at Erieview, 36th Floor
1301 East Ninth Street
Cleveland, Ohio 44114
1-800-44-MAXUS (1-800-446-2987)
or (216) 687-1000
Prasad Growth Fund (the "Fund") is a non-diversified portfolio of
Prasad Series Trust, an open-end management investment company. The investment
objective of the Fund is to obtain capital appreciation. This Statement of
Additional Information relating to the Fund is not a prospectus and should be
read in conjunction with the Fund's prospectus. A copy of the Fund's prospectus
can be obtained from the Fund's Transfer Agent at The Tower at Erieview, 36th
Floor, 1301 East Ninth Street, Cleveland, Ohio 44114, telephone number
1-800-44-MAXUS (1-800-446- 2987) or (216) 687-1000. The prospectus to which this
Statement relates is dated the same date as this Statement of Additional
Information.
The date of this Statement of Additional Information is __________,
1998.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
Caption Page Location in Prospectus
General Information and History 1 General Information
Investment Objective and Policies 1 Investment Objectives
and Management Techniques
Management of the Fund 3 Investment Management
Ownership of Shares 4 Not Applicable
Investment Advisory and Other 5 Investment Management
Services
Portfolio Transactions 7 Execution of Portfolio
Transactions
Capital Stock and Other Securities 8 General Information
Purchase, Redemption and Pricing of 8 How to Purchase Shares/
Securities Being Offered How to Redeem Shares
Determination of Net Asset Value 9 How to Purchase Shares
Tax Status 9 Dividends, Distributions
and Federal Taxes
Financial Statements 11 Not Applicable
</TABLE>
<PAGE>
GENERAL INFORMATION AND HISTORY
Prasad Growth Fund (the "Fund") is a non-diversified portfolio of
Prasad Series Trust (the "Trust"), an open-end management investment company.
The Fund seeks capital appreciation. The Trust was organized as a business trust
under the laws of the State of Delaware pursuant to an Agreement and Declaration
of Trust dated July 31, 1998.
Investment Objective and Policies
The investment objective and policies of the Fund are briefly described
in the Prospectus under the heading "Investment Objective And Management
Techniques." The Fund has also adopted the following fundamental investment
policies and restrictions in addition to the funda mental investment policies
described in the Prospectus under the subheading "Investment Restric tions."
These policies cannot be changed without approval by the holders of a majority
of the outstanding voting securities of the Fund (as defined in the Prospectus
under "GENERAL INFORMATION"). Except as set forth in the Prospectus, the Fund
may not:
1. Invest in securities of other registered investment
companies (other than money market mutual funds), except by purchase in
the open market involving only customary brokerage commissions, or
except as part of a merger, consolidation, reorganization or
acquisition; or
2. Invest in securities of any registered closed-end
investment company, if immediately after such purchase or acquisition
the Fund would own more than 3% of the total outstanding voting stock
of such closed-end company.
3. Invest more than 10% of the Fund's net assets in securities
for which market quotations are not readily available and repurchase
agreements maturing in more than seven days.
4. Lend money or securities, provided that the making of
interest-bearing demand deposits with banks and the purchase of debt
securities in accordance with its objective and policies are not
prohibited.
5. Borrow money except for temporary or emergency purposes
from banks (but not for the purpose of purchase of investments) and
then only in an amount not to exceed 5% of the Fund's net assets; or
pledge the Fund's securities or receivables or transfer or assign or
otherwise encumber them in an amount exceeding the amount of the
borrowings secured thereby.
6. Make short sales of securities, or purchase any securities
on margin except to obtain such short-term credits as may be necessary
for the clearance of transactions.
7. Write (sell) put or call options, combinations thereof or
similar options; nor may it purchase put or call options if more than
5% of the Fund's net assets would be invested in premiums on put and
call options, combinations thereof or similar options.
1
<PAGE>
8. Purchase or retain the securities of any issuer if any of
the officers or Trustees of the Trust or its investment adviser owns
beneficially more than 1/2 of 1% of the securities of such issuer and
together own more than 5% of the securities of such issuer.
9. Invest for the purpose of exercising control or management
of another issuer.
10. Invest in commodities or commodity futures contracts or in
real estate, although it may invest in securities which are secured by
real estate and securities of issuers which invest or deal in real
estate.
11. Invest in interests in oil, gas or other mineral
exploration or development programs, although it may invest in the
securities of issuers which invest in or sponsor such programs.
12. Underwrite securities issued by others except to the
extent the Fund may be deemed to be an underwriter, under the federal
securities laws, in connection with the disposition of portfolio
securities.
13. Issue senior securities as defined in the Act.
14. Purchase securities subject to restrictions on disposition
under the Securities Act of 1933.
If a percentage restriction is adhered to at the time of investment, a later
increase or decrease in percentage beyond the specified limit resulting from a
change in values or net assets will not be considered a violation.
MANAGEMENT OF THE FUND
The following table provides biographical information with respect to
each current Trustee and officer of the Trust. Each Trustee who is or may be
deemed to be an "interested person" of the Fund, as defined in the Act, is
indicated by an asterisk.
<TABLE>
<S> <C> <C>
Position Held Principal Occupation(s)
Name and Address With the Fund During Past 5 Years
- ---------------- ------------- -------------------
Rajendra Prasad* Chairman, Treasurer Physician; publisher of mutual
821 Hillside Drive and Trustee funds newsletter; registered
Long Beach, California 90815 investment adviser.
</TABLE>
2
<PAGE>
<TABLE>
<S> <C> <C>
Position Held Principal Occupation(s)
Name and Address With the Fund During Past 5 Years
Anita Alamshaw, M.B.A.* Trustee Sales and marketing in
901 Calle Primavera pharmaceutical industry
Glendale, California 91208
(daughter of Rajendra Prasad)
Richard L.D. Saxton Trustee Television broadcaster
5545 Sunset Boulevard specializing in business news;
Los Angeles, California 90028 formerly account representative,
Dean Witter.
Samir Thakker Trustee Managing Director, The Acacia
625 The City Drive South Group (financial services)
Suite 250
Orange, California 92868
</TABLE>
No officer, director or employee of Mutual Funds Leader Inc. (the
"Adviser") receives any compensation from the Trust for serving as an officer or
Trustee of the Trust. Each Trustee who is not an officer, director or employee
of the Adviser or any affiliate will receive from the Fund a fee of $125 for
each Board or shareholders meeting attended. The estimated fees payable to the
Trustees for the current fiscal year, which are the only compensation or
benefits payable to Trustees, are summarized in the following table:
COMPENSATION TABLE
Aggregate Compensation
Name of Trustee from Fund*
Rajendra Prasad $ 0
Anita Alamshaw 500
Richard L.D. Saxton 500
Samir Thakker 500
*Estimated fees for first fiscal year.
OWNERSHIP OF SHARES
As of August 31, 1998, all of the outstanding shares of the Fund were
owned by the Adviser, whose address is 821 Hillside Drive, Long Beach,
California 90815. A shareholder who beneficially owns, directly or indirectly,
more than 25% of the Fund's voting securities may be deemed a "control person"
(as defined in the 1940 Act) of the Fund. The Adviser is controlled by Rajendra
Prasad, the Chairman of the Fund.
3
<PAGE>
INVESTMENT ADVISORY AND OTHER SERVICES
The Adviser is registered as an investment adviser under the Investment
Advisers Act of 1940. The Adviser has not been sponsored, recommended or
approved, nor have its abilities or qualifications been passed upon, by the
Securities and Exchange Commission or any other governmental agency.
As compensation for the Adviser's services rendered to the Fund, the
Fund pays a fee, computed and paid monthly, at an annual rate of 1% of the
average value of the Fund's daily net assets. This fee is higher than that paid
by most other investment companies.
The Adviser acts as investment adviser to the Fund pursuant to an
Investment Advisory and Administration Agreement dated ____________, 1998 (the
"Advisory Agreement"). Subject to the supervision and direction of the Board of
Trustees, the Adviser manages the Fund's portfolio in accordance with the stated
policies of the Fund. The Adviser makes investment decisions for the Fund and
places the purchase and sale orders for portfolio transactions. In addition, the
Adviser furnishes office facilities and clerical and administrative services and
subject to the direction of the Board of Trustees, is responsible for the
overall management of the business affairs of the Fund, including the provision
of personnel for record keeping, the preparation of governmental reports and
responding to shareholder communications.
Other expenses are borne by the Fund and include brokerage fees and
commissions, fees of Trustees not affiliated with the Adviser, expenses of
registration of the Fund and of the shares of the Fund with the Securities and
Exchange Commission (the "SEC") and the various states, charges of the
custodian, dividend and transfer agent, outside auditing and legal expenses,
liability insurance premiums on property or personnel (including officers and
trustees), maintenance of business trust existence, any taxes payable by the
Fund, interest payments relating to Fund borrowings, costs of preparing,
printing and mailing registration statements, prospectuses, periodic reports and
other documents furnished to shareholders and regulatory authorities, costs of
printing share certificates, portfolio pricing services and Fund meetings.
The Advisory Agreement is subject to annual approval by (i) the Board
of Trustees or (ii) vote of a majority (as defined in the Act) of the
outstanding voting securities of the Fund, provided that in either event the
continuance is also approved by a majority of the Trustees who are not
"interested persons" (as defined in the Act) of the Fund or the Adviser by vote
cast in person at a meeting called for the purpose of voting on such approval.
The Board of Trustees, including a majority of the Trustees who are not
"interested persons," voted to approve the Advisory Agreement at a meeting held
on ___________, 1998. The Advisory Agreement is terminable without penalty, on
not less than 60 days' notice, by the Board of Trustees or by vote of the
holders of a majority of the Fund's shares or, upon not less than 90 days'
notice, by the Adviser. The Advisory Agreement will terminate automatically in
the event of its assignment.
The Trust has entered into an Administration Agreement with Maxus
Information Systems Inc. ("MIS"), The Tower at Erieview, 36th Floor, 1301 East
Ninth Street, Cleveland, Ohio 44114, pursuant to which MIS has agreed to act as
the Fund's transfer, redemption and dividend disbursing agent. As such, MIS
4
<PAGE>
maintains the Fund's official record of shareholders and is responsible for
crediting dividends to shareholders' accounts. In consideration of such
services, the Fund pays MIS an annual fee, paid monthly, equal to $9.75 per
shareholder account (with a monthly minimum of $775) plus $12 per month for each
state in which the Fund is registered under such state's securities laws, plus
out-of-pocket expenses. In addition, the Fund has entered into an Accounting
Services Agreement with MIS, pursuant to which MIS has agreed to provide
portfolio pricing and related services, for the payment of an annual fee of
$21,000 for the first $25,000,000 in net assets, $10,500 for the next
$25,000,000 in net assets and $5,750 for each additional $25,000,000 in net
assets, plus out-of-pocket expenses. Notwithstanding the foregoing, if for any
month the average net assets of the Fund are less than $1,000,000, all of the
above amounts will be reduced based on a discount of 65% if net assets are under
$1,000,000 with proportionately lower discounts as net assets increase, until
the discount is removed completely if net assets exceed $11,000,000.
Fifth Third Bank, 38 Fountain Square Plaza, Cincinnati, Ohio 45263,
serves as the Fund's custodian. As custodian, Fifth Third Bank maintains custody
of the Fund's cash and portfolio securities.
McCurdy & Associates C.P.A.'s, Inc., independent certified public
accountants located at 27955 Clemens Road, Westlake, Ohio 44145, has been
selected as auditors for the Fund. In such capacity, McCurdy & Associates
C.P.A.'s, Inc. periodically reviews the accounting and financial records of the
Fund and examines its financial statements.
PORTFOLIO TRANSACTIONS
Decisions to buy and sell securities for the Fund are made by the
Adviser subject to the overall supervision and review by the Board of Trustees.
Portfolio security transactions for the Fund are effected by or under the
supervision of the Adviser.
Transactions on stock exchanges involve the payment of negotiated
brokerage commissions. There is generally no stated commission in the case of
securities traded in the over-the-counter markets, but the price of those
securities includes an undisclosed commission or markup. The cost of securities
purchased from underwriters includes an underwriting commission or concession,
and the prices at which securities are purchased from and sold to dealers
include a dealer's markup or markdown.
In executing portfolio transactions and selecting brokers and dealers,
it is the Fund's policy to seek the best overall terms available. The Advisory
Agreement provides that, in assessing the best overall terms available for any
transaction, the Adviser shall consider the factors it deems relevant, including
the breadth of the market in the security, the price of the security, the
financial condition and execution capability of the broker or dealer, and the
reasonableness of the commission, if any, for the specific transaction and on a
continuing basis. In addition, the Advisory Agreement authorizes the Adviser, in
selecting brokers or dealers to execute a particular transaction, and, in
evaluating the best overall terms available, to consider the brokerage and
research services (as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934) provided to the Fund and/or other accounts over which the
Adviser exercises investment discretion.
5
<PAGE>
The Board of Trustees periodically reviews the commissions paid by the
Fund to determine if the commissions paid over representative periods of time
were reasonable in relation to the benefits inuring to the Fund. It is possible
that certain of the services received will primarily benefit one or more other
accounts for which investment discretion is exercised. Conversely, the Fund may
be the primary beneficiary of services received as a result of portfolio
transactions effected for other accounts. The Adviser's fee under the Advisory
Agreement is not reduced by reason of the Adviser's receiving such brokerage and
research services.
Even though investment decisions for the Fund are made independently
from those of the other accounts managed by the Adviser, investments of the kind
made by the Fund may also be made by those other accounts. When the Fund and one
or more accounts managed by the Adviser are prepared to invest in, or desire to
dispose of, the same security, available investments or oppor tunities for sales
will be allocated in a manner believed by the Adviser to be equitable. In some
cases, this procedure may adversely affect the price paid or received by the
Fund or the size of the position obtained for or disposed of by the Fund.
CAPITAL STOCK AND OTHER SECURITIES
See "General Information" in the Fund's prospectus.
PURCHASE, REDEMPTION AND
PRICING OF SECURITIES BEING OFFERED
The information pertaining to the purchase and redemption of the Fund's
shares appearing in the Prospectus under the captions "How To Purchase Shares"
and "How To Redeem Shares" is hereby incorporated by reference.
DETERMINATION OF NET ASSET VALUE
The information pertaining to the determination of net asset value
appearing in the Prospectus under the caption "How to Purchase Shares -- Price
of Shares" is hereby incorporated by reference.
TAX STATUS
The Fund will be treated as a separate entity for federal income tax
purposes. The Fund's policy is to distribute at least annually, prior to the end
of the calendar year, dividends sufficient to satisfy excise tax requirements of
the Internal Revenue Service and to distribute annually, after the end of the
calendar year, any remaining net investment income and net realized capital
gains. Unless a shareholder elects otherwise, dividends and capital gains
distributions are paid in additional shares that are credited to the
shareholder's account with the Fund.
6
<PAGE>
The Fund intends to qualify each year as a "regulated investment
company" under the Internal Revenue Code of 1986, as amended (the "Code").
Qualification as a regulated investment company will result in the Fund's paying
no taxes on net income and net realized capital gains distributed to
shareholders. To qualify for this treatment, the Fund must derive at least 90%
of its gross income from dividends, interest, and gains from the sale or other
disposition of securities; derive less than 30% of its gross income from the
sale or other disposition of securities held for fewer than three months; invest
in securities within certain limits; and distribute to its shareholders at least
90% of its net taxable income earned in any year.
Dividends derived from the Fund's net investment income, whether
received in additional shares or in cash, will be taxable to shareholders as
ordinary income, but a portion may be eligible for the 70% dividends received
deduction available to corporations.
Distributions of the excess of net long-term capital gain over net
short-term capital loss are taxable to a shareholder in the year in which
received (except as set forth in the next paragraph), whether those
distributions are accepted in cash or in additional shares, and regardless of
the length of time the shareholder has held his Fund shares. These
distributions, like dividends, may also be subject to state and local taxes.
In addition to any dividends paid within the calendar year, dividends
and capital gain distributions declared in December and paid the following
January will be taxable in the year they are declared.
Investors should consider carefully the tax implications of purchasing
shares of the Fund just prior to the record date of a dividend or capital gains
distribution. Although a dividend or distribu tion paid shortly after shares
have been purchased is in effect a return of investment, it is subject to
taxation as described above, and a sale at a loss of shares held not more than
six months will be long-term capital loss to the extent of any long-term capital
gain dividends received within that period.
Shareholders must furnish the Fund with their correct Taxpayer
Identification Number to avoid being subject to a 20% federal backup withholding
tax on dividend distributions. Investors also must certify on the Account
Application that the stated Tax Identification Number is correct and that the
Investor is not subject to 20% backup withholding for previous under-reporting
to the IRS. Shareholders not subject to income taxation do not have to pay an
income tax on the dividend or capital gain distributions.
Shareholders shall upon demand disclose to the Fund in writing such
information with respect to direct and indirect ownership of Shares of the Fund
as the Trustees of the Fund deem necessary to comply with the provisions of the
Internal Revenue Code, or to comply with the require ments of any other taxing
authority.
Statements as to the tax status of each shareholder's dividends and
distributions will be mailed annually by the Fund's transfer agent. Shareholders
are urged to consult their own tax advisers regarding specific questions as to
Federal, state or local taxes.
7
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
(a) Financial Statements:
The Financial Statements filed as part of this
Registration Statement are as follows:
Statement of Assets and Liabilities as of
___________, 1998, together with Report of
Independent Certified Public Accountants dated
___________, 1998.
(b) Exhibits:
Exhibit
Number Description
1 Registrant's Agreement and
Declaration of Trust dated
July 31, 1998.
2 Registrant's By-Laws.
3 None.
4 None.
5 Investment Advisory and
Administration Agreement.
7 None.
8 Custody Agreement.*
9(a) Administration Agreement.
9(b) Accounting Services Agreement.
10 Opinion and consent.*
11 Consent of Independent Auditors.*
12 None.
13 Subscription Agreement between
the Trust and the Adviser *
C-1
<PAGE>
27 Financial Data Schedule.*
*To be filed by Amendment.
Item 25. Persons Controlled by or Under Common Control with Registrant.
The Fund and the Adviser may be deemed to be under common
control of Rajendra Prasad, the Chairman of the Fund and the
President and controlling shareholder of the Adviser.
Item 26. Number of Holders of Securities.
As of the date of this Registration Statement, there was one
record holder of the Fund's Shares.
Item 27. Indemnification.
Reference is made to Article IV of the Registrant's Agreement
and Declaration of Trust filed as Exhibit 1. The application
of these provisions is limited by the follow ing undertaking
set forth in the rules promulgated by the Securities and
Exchange Commission:
Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to
trustees, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission
such indemnification is against public policy as
expressed in such Act and is, therefore, unenforce
able. In the event that a claim for indemnification
against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a
trustee, officer or controlling person of the
registrant in the successful defense of any action,
suit or proceeding) is asserted by such trustee,
officer or controlling person in connection with the
securities being registered, the registrant will,
unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question
whether such indemnification by it is against public
policy as expressed in such Act and will be governed
by the final adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser.
Reference is made to the section in the Prospectus entitled
"Investment Management".
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Item 29. Principal Underwriters.
Not applicable.
Item 30. Location of Accounts and Records.
All accounts, books and documents required to be maintained by
the Registrant pursuant to Section 31(a) of the Investment
Company Act of 1940 and Rules 31a-1 through 31a-3 thereunder
are maintained at the office of the Registrant and the
Transfer Agent at The Tower at Erieview, 36th Floor, 1301 East
Ninth Street, Cleveland, Ohio 44114, except that all records
relating to the activities of the Fund's Custodian are
maintained at the office of the Custodian, Fifth Third Bank,
38 Fountain Square Plaza, Cincinnati, Ohio 45263.
Item 31. Management Services.
Not applicable.
Item 32. Undertakings.
The Registrant undertakes (1) to furnish a copy of the
Registrant's latest annual report, upon request and without
charge, to every person to whom a Prospectus is delivered, (2)
to file a post-effective amendment, using reasonably current
financial statements which need not be certified, without four
to six months from the effective date of Registrant's
Registration Statement under the Securities Act of 1933, and
(3) to call a meeting of shareholders for the purpose of
voting upon the question of removal of a trustee or trustees
when requesting in writing to do so by the holders of at least
10% of the Registrant's outstanding shares of beneficial
interest and in connection with such meeting to comply with
the provisions of Section 16(c) of the Investment Company Act
of 1940 relating to shareholder communications.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Long Beach, State of California, on the 1st day of
September, 1998.
PRASAD SERIES TRUST
By: /s/ Rajendra Prasad
Rajendra Prasad, Chairman
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signature Title Date
/s/ Rajendra Prasad Chairman, Treasurer and Trustee September 1, 1998
Rajendra Prasad (Principal Executive Officer,
Financial Officer and Accounting
Officer)
/s/ Anita Alamshaw Trustee September 1, 1998
Anita Alamshaw
/s/ Richard L.D. Saxton Trustee September 1, 1998
Richard L.D. Saxton
/s/ Samir Thakker
Samir Thakker Trustee September 1, 1998
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REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 - PRASAD SERIES
TRUST
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EXHIBIT NO. 1
PRASAD SERIES TRUST
AGREEMENT AND
DECLARATION OF TRUST
This AGREEMENT AND DECLARATION OF TRUST is made on July 31, 1998 by
Rajendra Prasad (together with all other persons from time to time duly elected,
qualified and serving as Trustees in accordance with the provisions of Article
II hereof, the "Trustees");
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the Trust shall be held and managed in trust pursuant to this
Agreement and Declaration of Trust.
ARTICLE I
NAME AND DEFINITIONS
Section 1. Name. The name of the Trust created by this Agreement
and Declaration of Trust is "Prasad Series Trust."
Section 2. Definitions. Unless otherwise provided or required by
the context:
(a) "Administrator" means the party, other than the Trust, to
the contract described in Article III, Section 3 hereof.
(b) "By-laws" means the By-laws of the Trust adopted by the
Trustees, as amended from time to time, which By-laws are expressly
herein incorporated by reference as part of the "governing instrument"
within the meaning of the Delaware Act.
(c) "Class" means the class of Shares of a Series established
pursuant to Article V.
(d) "Commission," "Interested Person" and "Principal
Underwriter" have the meanings provided in the 1940 Act. Except as such
term may be otherwise defined by the Trustees in conjunction with the
establishment of any Series of Shares, the term "vote of a majority of
the Shares outstanding and entitled to vote" shall have the same
meaning as is assigned to the term "vote of a majority of the
outstanding voting securities" in the 1940 Act.
(e) "Covered Person" means a person so defined in Article IV,
Section 2.
(f) "Custodian" means any Person other than the Trust who has
custody of any Trust Property as required by Section 17(f) of the 1940
Act, but does not include a system for the central handling of
securities described in said Section 17(f).
(g) "Declaration" shall mean this Agreement and Declaration of
Trust, as amended or restated from time to time. Reference in this
Declaration of Trust to "Declaration," "hereof," "herein," and
"hereunder" shall be deemed to refer to this Declaration rather than
exclusively to the article or section in which such words appear.
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(h) "Delaware Act" means Chapter 38 of Title 12 of the
Delaware Code entitled "Treatment of Delaware Business Trusts," as
amended from time to time.
(i) "Distributor" means the party, other than the Trust, to
the contract described in Article III, Section 1 hereof.
(j) "His" shall include the feminine and neuter, as well as
the masculine, genders.
(k) "Investment Adviser" means the party, other than the
Trust, to the contract described in Article III, Section 2 hereof.
(l) "Net Asset Value" means the net asset value of each Series
of the Trust, determined as provided in Article VI, Section 3.
(m) "Person" means and includes individuals, corporations,
partnerships, trusts, associations, joint ventures, estates and other
entities, and governments and agencies and political subdivisions,
thereof, whether domestic or foreign.
(n) "Series" means a series of Shares established pursuant to
Article V.
(o) "Shareholder" means a record owner of Outstanding Shares;
(p) "Shares" means the equal proportionate transferable units
of interest into which the beneficial interest of each Series or Class
is divided from time to time (including whole Shares and fractions of
Shares). "Outstanding Shares" means Shares shown in the books of the
Trust or its transfer agent as then issued and outstanding, but does
not include Shares which have been repurchased or redeemed by the Trust
and which are held in the treasury of the Trust.
(q) "Transfer Agent" means any Person other than the Trust who
maintains the Shareholder records of the Trust, such as the list of
Shareholders, the number of Shares credited to each account, and the
like.
(r) "Trust" means Prasad Series Trust established hereby, and
reference to the Trust, when applicable to one or more Series, refers
to that Series.
(s) "Trustees" means the person who has signed this
Declaration of Trust, so long as he shall continue in office in
accordance with the terms hereof, and all other persons who may from
time to time be duly qualified and serving as Trustees in accordance
with Article II, in all cases in their capacities as Trustees
hereunder.
(t) "Trust Property" means any and all property, real or
personal, tangible or intangible, which is owned or held by or for the
Trust or any Series or the Trustees on behalf of the Trust or any
Series.
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(u) The "1940 Act" means the Investment Company Act of 1940,
as amended from time to time.
ARTICLE II
THE TRUSTEES
Section 1. Management of the Trust. The business and affairs of the
Trust shall be managed by or under the direction of the Trustees, and they shall
have all powers necessary or desirable to carry out that responsibility. The
Trustees may execute all instruments and take all action they deem necessary or
desirable to promote the interests of the Trust. Any determination made by the
Trustees in good faith as to what is in the interests of the Trust shall be
conclusive. In construing the provisions of this Declaration, the presumption
shall be in favor of a grant of power to the Trustees.
Section 2. Powers. The Trustees in all instances shall act as
principals, free of the control of the Shareholders. The Trustees shall have
full power and authority to take or refrain from taking any action and to
execute any contracts and instruments that they may consider necessary or
desirable in the management of the Trust. The Trustees shall not in any way be
bound or limited by current or future laws or customs applicable to trust
investments, but shall have full power and authority to make any investments
which they, in their sole discretion, deem proper to accomplish the purposes of
the Trust. The Trustees may exercise all of their powers without recourse to any
court or other authority. Subject to any applicable limitation herein or in the
By-laws or resolutions of the Trust, the Trustees shall have power and
authority, without limitation:
(a) To operate as and carry on the business of an investment
company, and exercise all the powers necessary and appropriate to the
conduct of such operations.
(b) To invest in, hold for investment, or reinvest in, cash;
securities, including common, preferred and preference stocks;
warrants; subscription rights; profit-sharing interests or
participations and all other contracts for or evidence of equity
interests; bonds, debentures, bills, time notes and all other evidences
of indebtedness; negotiable or non-negotiable instruments; government
securities, including securities of any state, municipality or other
political subdivision thereof, or any governmental or
quasi-governmental agency or instrumentality; and money market
instruments including bank certificates of deposit, finance paper,
commercial paper, bankers' acceptances and all kinds of repurchase
agreements, of any corporation, company, trust, association, firm or
other business organization however established, and of any country,
state, municipality or other political subdivision, or any governmental
or quasi-governmental agency or instrumentality; or any other security,
property or instrument in which the Trust or any of its Series shall be
authorized to invest.
(c) To acquire (by purchase, subscription or otherwise), to
hold, to trade in and deal in, to acquire any rights or options to
purchase or sell, to sell or otherwise dispose of, to lend and to
pledge any such securities, to enter into repurchase agreements,
reverse repurchase agreements, firm commitment agreements and forward
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foreign currency exchange contracts, to purchase and sell options on
securities, securities indices, currency and other financial assets,
futures contracts and options on futures contracts of all descriptions
and to engage in all types of hedging and risk-management transactions.
(d) To exercise all rights, powers and privileges of ownership
or interest in all securities and repurchase agreements included in the
Trust Property, including the right to vote thereon and otherwise act
with respect thereto and to do all acts for the preservation,
protection, improvement and enhancement in value of all such securities
and repurchase agreements.
(e) To acquire (by purchase, lease or otherwise) and to hold,
use, maintain, develop and dispose of (by sale or otherwise) any
property, real or personal, including cash or foreign currency, and any
interest therein.
(f) To borrow money or other property in the name of the Trust
exclusively for Trust purposes and in this connection issue notes or
other evidence of indebtedness; to secure borrowings by mortgaging,
pledging or otherwise subjecting as security the Trust Property; and to
endorse, guarantee, or undertake the performance of any obligation or
engagement of any other Person and to lend Trust Property.
(g) To aid by further investment any corporation, company,
trust, association or firm, any obligation of or interest in which is
included in the Trust Property or in the affairs of which the Trustees
have any direct or indirect interest; to do all acts and things
designed to protect, preserve, improve or enhance the value of such
obligation or interest; and to guarantee or become surety on any or all
of the contracts, stocks, bonds, notes, debentures and other
obligations of any such corporation, company, trust, association or
firm.
(h) To adopt By-laws not inconsistent with this Declaration
providing for the conduct of the business of the Trust and to amend and
repeal them to the extent such right is not reserved to the
Shareholders.
(i) To elect and remove such officers and appoint and
terminate such agents as they deem appropriate.
(j) To employ as custodian of any assets of the Trust, subject
to any provisions herein or in the By-laws, one or more banks, trust
companies or companies that are members of a national securities
exchange, or other entities permitted by the Commission to serve as
such.
(k) To retain one or more transfer agents and shareholder
servicing agents, or both.
(l) To provide for the distribution of Shares either through a
Principal Underwriter as provided herein or by the Trust itself, or
both, or pursuant to a distribution plan of any kind.
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(m) To set record dates in the manner provided for herein or
in the By-laws.
(n) To delegate such authority as they consider desirable to
any officers of the Trust and to any agent, independent contractor,
manager, investment adviser, custodian or underwriter.
(o) To hold any security or other property (i) in a form not
indicating any trust, whether in bearer, book entry, unregistered or
other negotiable form, or (ii) either in the Trust's or Trustees' own
name or in the name of a custodian or a nominee or nominees, subject to
safeguards according to the usual practice of business trusts or
investment companies.
(p) To establish separate and distinct Series with separately
defined investment objectives and policies and distinct investment
purposes, and with separate Shares representing beneficial interests in
such Series, and to establish separate Classes, all in accordance with
the provisions of Article V.
(q) To the full extent permitted by Section 3804 of the
Delaware Act, to allocate assets, liabilities and expenses of the Trust
to a particular Series and assets, liabilities and expenses to a
particular Class or to apportion the same between or among two or more
Series or Classes, provided that any liabilities or expenses incurred
by a particular Series or Class shall be payable solely out of the
assets belonging to that Series or Class as provided for in Article V,
Section 4.
(r) To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or concern
whose securities are held by the Trust; to consent to any contract,
lease, mortgage, purchase, or sale of property by such corporation or
concern; and to pay calls or subscriptions with respect to any security
held in the Trust.
(s) To compromise, arbitrate, or otherwise adjust claims in
favor of or against the Trust or any matter in controversy including,
but not limited to, claims for taxes.
(t) To make distributions of income, capital gains, returns of
capital (if any) and redemption proceeds to Shareholders in the manner
hereinafter provided for.
(u) To establish committees for such purposes, with such
membership, and with such responsibilities as the Trustees may consider
proper, including a committee consisting of fewer than all of the
Trustees then in office, which may act for and bind the Trustees and
the Trust with respect to the institution, prosecution, dismissal,
settlement, review or investigation of any legal action, suit or
proceeding, pending or threatened.
(v) To issue, sell, repurchase, redeem, cancel, retire,
acquire, hold, resell, reissue, dispose of and otherwise deal in
Shares; to establish terms and conditions regarding the issuance, sale,
repurchase, redemption, cancellation, retirement, acquisition, holding,
resale, reissuance, disposition of or dealing in Shares; and, subject
to Articles V and VI, to apply to any such repurchase, redemption,
retirement, cancellation or acquisition of Shares any funds
5
<PAGE>
or property of the Trust or of the particular Series with respect to
which such Shares are issued.
(w) To invest part or all of the Trust Property (or part or
all of the assets of any Series), or to dispose of part or all of the
Trust Property (or part or all of the assets of any Series) and invest
the proceeds of such disposition, in securities issued by one or more
other investment companies registered under the 1940 Act all without
any requirement of approval by Shareholders. Any such other investment
company may (but need not) be a trust (formed under the laws of the
State of Delaware or of any other state) which is classified as a
partnership for federal income tax purposes.
(x) To carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary
or desirable to accomplish any purpose or to further any of the
foregoing powers, and to take every other action incidental to the
foregoing business or purposes, objects or powers.
(y) To sell or exchange any or all of the assets of the Trust,
subject to Article IX, Section 4.
(z) To enter into joint ventures, partnerships and other
combinations and associations.
(aa) To join with other security holders in acting through a
committee, depositary, voting trustee or otherwise, and in that
connection to deposit any security with, or transfer any security to,
any such committee, depositary or trustee, and to delegate to them such
power and authority with relation to any security (whether or not so
deposited or transferred) as the Trustees shall deem proper, and to
agree to pay, and to pay, such portion of the expenses and compensation
of such Committee, depositary or trustee as the Trustees shall deem
proper;
(bb) To purchase and pay for entirely out of Trust Property
such insurance as the Trustees may deem necessary or appropriate for
the conduct of the business, including, without limitation, insurance
policies insuring the assets of the Trust or payment of distributions
and principal on its portfolio investments, and, subject to applicable
law and any restrictions set forth in the By-laws, insurance policies
insuring the Shareholders, Trustees, officers, employees, agents,
investment advisers, Principal Underwriters, or independent contractors
of the Trust, individually, against all claims and liabilities of every
nature arising by reason of holding Shares, holding, being or having
held any such office or position, or by reason of any action alleged to
have been taken or omitted by any such Person as Trustee, officer,
employee, agent, investment adviser, Principal underwriter, or
independent contractor, including any action taken or omitted that may
be determined to constitute negligence, whether or not the Trust would
have the power to indemnify such Person against liability;
(cc) To adopt, establish and carry out pension,
profit-sharing, share bonus, share purchase, savings, thrift and other
retirement, incentive and benefit plans and trusts, including the
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purchasing of life insurance and annuity contracts as a means of
providing such retirement and other benefits, for any or all of the
Trustees, officers, employees and agents of the Trust;
(dd) To enter into contracts of any kind and description;
(ee) To interpret the investment policies, practices or
limitations of any Series or Class; and
(ff) To guarantee indebtedness and contractual obligations
of others.
The clauses above shall be construed as objects and powers, and the
enumeration of specific powers shall not limit in any way the general powers of
the Trustees. Any action by one or more of the Trustees in their capacity as
such hereunder shall be deemed an action on behalf of the Trust or the
applicable Series, and not an action in an individual capacity. No one dealing
with the Trustees shall be under any obligation to make any inquiry concerning
the authority of the Trustees, or to see to the application of any payments made
or property transferred to the Trustees or upon their order. In construing this
Declaration, the presumption shall be in favor of a grant of power to the
Trustees.
Section 3. Certain Transactions. Except as prohibited by applicable
law, the Trustees may, on behalf of the Trust, buy any securities from or sell
any securities to, or lend any assets of the Trust to, any Trustee or officer of
the Trust or any firm of which any such Trustee or officer is a member acting as
principal, or have any such dealings with any investment adviser, administrator,
distributor or transfer agent for the Trust or with any Interested Person of
such person. The Trust may employ any such person or entity in which such person
is an Interested Person, as broker, legal counsel, registrar, investment
adviser, administrator, distributor, transfer agent, dividend disbursing agent,
custodian or in any other capacity upon customary terms.
Section 4. Initial Trustees; Election and Number of Trustees. The
initial Trustee shall be the person initially signing this Declaration. The
number of Trustees (other than the initial Trustee) shall be fixed from time to
time by a majority of the Trustees; provided, that there shall be at least one
(1) Trustee and no more than fifteen (15). The Shareholders shall elect the
Trustees (other than the initial Trustee) on such dates as the Trustees may fix
from time to time.
Section 5. Term of Office of Trustees. Each Trustee shall hold office
for life or until his successor is elected or the Trust terminates; except that
(a) any Trustee may resign by delivering to the other Trustees or to any Trust
officer a written resignation effective upon such delivery or a later date
specified therein; (b) any Trustee may be removed with or without cause at any
time by a written instrument signed by at least a majority of the then Trustees,
specifying the effective date of removal; (c) any Trustee who requests to be
retired, or who is declared bankrupt or has become physically or mentally
incapacitated or is otherwise unable to serve, may be retired by a written
instrument signed by a majority of the other Trustees, specifying the effective
date of retirement; and (d) any Trustee may be removed at any meeting of the
Shareholders by a vote of at least two-thirds of the Outstanding Shares.
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Section 6. Vacancies; Appointment of Trustees. Whenever a vacancy shall
exist in the Board of Trustees, regardless of the reason for such vacancy, the
remaining Trustees shall appoint any person as they determine in their sole
discretion to fill that vacancy, consistent with the limitations under the 1940
Act. Such appointment shall be made by a written instrument signed by a majority
of the Trustees or by a resolution of the Trustees, duly adopted and recorded in
the records of the Trust, specifying the effective date of the appointment. The
Trustees may appoint a new Trustee as provided above in anticipation of a
vacancy expected to occur because of the retirement, resignation or removal of a
Trustee, or an increase in number of Trustees, provided that such appointment
shall become effective only at or after the expected vacancy occurs. As soon as
any such Trustee has accepted his appointment in writing, the trust estate shall
vest in the new Trustee, together with the continuing Trustees, without any
further act or conveyance, and he shall be deemed a Trustee hereunder. The
Trustees' power of appointment is subject to Section 16(a) of the 1940 Act.
Whenever a vacancy in the number of Trustees shall occur, until such vacancy is
filled as provided in this Article II, 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 the Declaration. The
death, declination to serve, resignation, retirement, removal or incapacity of
one or more Trustees, or all of them, shall not operate to annul the Trust or to
revoke any existing agency created pursuant to the terms of this Declaration of
Trust.
Section 7. Temporary Vacancy or Absence. Whenever a vacancy in the
Board of Trustees shall occur, until such vacancy is filled, or while any
Trustee is absent from his domicile (unless that Trustee has made arrangements
to be informed about, and to participate in, the affairs of the Trust during
such absence), or is physically or mentally incapacitated, the remaining
Trustees shall have all the powers hereunder and their certificate as to such
vacancy, absence, or incapacity shall be conclusive. Any Trustee may, by power
of attorney, delegate his powers as Trustee for a period not exceeding six (6)
months at any one time to any other Trustee or Trustees.
Section 8. Chairman. The Trustees shall appoint one of their number to
be Chairman of the Board of Trustees. The Chairman shall preside at all meetings
of the Trustees, shall be responsible for the execution of policies established
by the Trustees and the administration of the Trust, and may be the chief
executive, financial and/or accounting officer of the Trust.
Section 9. Action by the Trustees. The Trustees shall act by majority
vote at a meeting duly called at which a quorum is present, including a meeting
held by conference telephone, teleconference or other electronic media or
communication equipment by means of which all persons participating in the
meeting can communicate with each other; or by written consent of a majority of
Trustees (or such greater number as may be required by applicable law) without a
meeting. A majority of the Trustees shall constitute a quorum at any meeting.
Meetings of the Trustees may be called orally or in writing by the President or
by any one of the Trustees. Notice of the time, date and place of all Trustees'
meetings shall be given to each Trustee as set forth in the By-laws; provided,
however, that no notice is required if the Trustees provide for regular or
stated meetings. Notice need not be given to any Trustee who attends the meeting
without objecting to the lack of notice or who signs a waiver of notice either
before or after the meeting. The Trustees by majority vote may delegate to any
Trustee or Trustees or committee authority to approve particular matters or take
particular actions on behalf of the Trust. Any written consent or waiver may be
provided and delivered to the Trust by facsimile or other similar electronic
mechanism.
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Section 10. Ownership of Trust Property. The Trust Property of the
Trust and of each Series shall be held separate and apart from any assets now or
hereafter held in any capacity other than as Trustee hereunder by the Trustees
or any successor Trustees. Legal title in and beneficial ownership of all of the
assets of the Trust shall at all times be considered as vested in the Trust,
except that the Trustees may cause legal title in and beneficial ownership of
any Trust Property to be held by, or in the name of one or more of the Trustees
acting for and on behalf of the Trust, or in the name of any person as nominee
acting for and on behalf of the Trust. No Shareholder shall be deemed to have a
severable ownership in any individual asset of the Trust or of any Series or any
right of partition or possession thereof, but each Shareholder shall have, as
provided in Article V, a proportionate undivided beneficial interest in the
Trust or Series or Class thereof represented by Shares. The Shares shall be
personal property giving only the rights specifically set forth in this Trust
Instrument. The Trust, or at the determination of the Trustees one or more of
the Trustees or a nominee acting for and on behalf of the Trust, shall be deemed
to hold legal title and beneficial ownership of any income earned on securities
of the Trust issued by any business entities formed, organized, or existing
under the laws of any jurisdiction, including the laws of any foreign country.
Upon the resignation or removal of a Trustee, or his otherwise ceasing to be a
Trustee, he 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 incapacity or death of any Trustee, his legal representative
shall execute and deliver on his behalf such documents as the remaining Trustees
shall require as provided in the preceding sentence.
Section 11. Effect of Trustees Not Serving. The death, resignation,
retirement, removal, incapacity or inability or refusal to serve of the
Trustees, or any one of them, shall not operate to annul the Trust or to revoke
any existing agency created pursuant to the terms of this Declaration.
Section 12. Trustees, etc. as Shareholders. Subject to any restrictions
in the By-laws, any Trustee, officer, agent or independent contractor of the
Trust may acquire, own and dispose of Shares to the same extent as any other
Shareholder; the Trustees may issue and sell Shares to and buy Shares from any
such person or any firm or company in which such person is interested, subject
only to any general limitations herein.
Section 13. Series Trustees. In connection with the establishment of
one or more Series or Classes, the Trustees establishing such Series or Class
may appoint, to the extent permitted by the Delaware Act, separate Trustees with
respect to such Series or Classes (the "Series Trustees"). Series Trustees may,
but are not required to, serve as Trustees of the Trust or any other Series or
Class of the Trust. The Series Trustees shall have, to the exclusion of any
other Trustee of the Trust, all the powers and authorities of Trustees hereunder
with respect to such Series or Class, but shall have no power or authority with
respect to any other Series or Class. Any provision of this Declaration relating
to election of Trustees by Shareholders only shall entitle the Shareholders of a
Series or Class for which Series Trustees have been appointed to vote with
respect to the election of such Series Trustees and the Shareholders of any
other Series or Class shall not be entitled to participate in such vote. In the
event that Series Trustees are appointed, the Trustees initially appointing such
Series Trustees shall, without the approval of any Outstanding Shares, amend
either the Declaration or the By-laws to provide for the respective
responsibilities of the Trustees and the Series Trustees in circumstances where
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an action of the Trustees or Series Trustees affects all Series of the Trust
or two or more Series represented by different Trustees.
ARTICLE III
CONTRACTS WITH SERVICE PROVIDERS
Section 1. Underwriting Contract. The Trustees may in their discretion
from time to time enter into an exclusive or non-exclusive distribution contract
or contracts providing for the sale of the Shares whereby the Trustees may
either agree to sell the Shares to the other party to the contract or appoint
such other party as their sales agent for the Shares, and in either case on such
terms and conditions, if any, as may be prescribed in the By-laws, and such
further terms and conditions as the Trustees may in their discretion determine
not inconsistent with the provisions of this Article III or of the By-laws; and
such contract may also provide for the repurchase of the Shares by such other
party as agent of the Trustees.
Section 2. Advisory or Management Contract. The Trustees may in their
discretion from time to time enter into one or more investment advisory or
management contracts or, if the Trustees establish multiple Series, separate
investment advisory or management contracts with respect to one or more Series
whereby the other party or parties to any such contracts shall undertake to
furnish the Trust or such Series management, investment advisory,
administration, accounting, legal, statistical and research facilities and
services, promotional or marketing activities, and such other facilities and
services, if any, as the Trustees shall from time to time consider desirable and
all upon such terms and conditions as the Trustees may in their discretion
determine. Notwithstanding any provisions of the Declaration, the Trustees may
authorize the Investment Advisers or persons to whom the Investment Adviser
delegates certain or all of their duties, or any of them, under any such
contracts (subject to such general or specific instructions as the Trustees may
from time to time adopt) to effect purchases, sales, loans or exchanges of
portfolio securities and other investments of the Trust on behalf of the
Trustees or may authorize any officer, employee or Trustee to effect such
purchases, sales, loans or exchanges pursuant to recommendations of such
Investment Advisers, or any of them (and all without further action by the
Trustees). Any such purchases, sales, loans and exchanges shall be deemed to
have been authorized by all of the Trustees.
Section 3. Administration Agreement. The Trustees may in their
discretion from time to time enter into an administration agreement or, if the
Trustees establish multiple Series or Classes, separate administration
agreements with respect to each Series or Class, whereby the other party to such
agreement shall undertake to manage the business affairs of the Trust or of a
Series or Class thereof of the Trust and furnish the Trust or a Series or a
Class thereof with office facilities, and shall be responsible for the ordinary
clerical, bookkeeping and recordkeeping services at such office facilities, and
other facilities and services, if any, and all upon such terms and conditions as
the Trustees may in their discretion determine.
Section 4. Service Agreement. The Trustees may in their discretion from
time to time enter into service agreements with respect to one or more Series or
Classes of Shares whereby the other parties to such Service Agreements will
provide administration and/or support services pursuant to administration plans
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and service plans, and all upon such terms and conditions as the Trustees in
their discretion may determine.
Section 5. Transfer Agent. The Trustees may in their discretion from
time to time enter into a transfer agency and shareholder service contract
whereby the other party to such contract shall undertake to furnish transfer
agency and shareholder services to the Trust. The contract shall have such terms
and conditions as the Trustees may in their discretion determine not
inconsistent with the Declaration. Such services may be provided by one or more
Persons.
Section 6. Custodian. The Trustees may appoint or otherwise engage one
or more banks or trust companies, each having aggregate capital, surplus and
undivided profits (as shown in its last published report) of at least two
million dollars ($2,000,000), or any other entity satisfying the requirements of
the 1940 Act, to serve as Custodian with authority as its agent, but subject to
such restrictions, limitations and other requirements, if any, as may be
contained in the By-laws of the Trust. The Trustees may also authorize the
Custodian to employ one or more sub-custodians, including such foreign banks and
securities depositories as meet the requirements of applicable provisions of the
1940 Act, and upon such terms and conditions as may be agreed upon between the
Custodian and such sub-custodian, to hold securities and other assets of the
Trust and to perform the acts and services of the Custodian, subject to
applicable provisions of law and resolutions adopted by the Trustees.
Section 7. Affiliations of Trustees or Officers, Etc. The fact that:
(i) any of the Shareholders, Trustees or officers of the
Trust or any Series thereof is a shareholder, director,
officer, partner, trustee, employee, manager, adviser or
distributor of or for any partnership, corporation, trust,
association or other organization or of or for any parent or
affiliate of any organization, with which a contract of the
character described in this Article III or for services as
Custodian, Transfer Agent or disbursing agent or for related
services may have been or may hereafter be made, or that any
such organization, or any parent or affiliate thereof, is a
Shareholder of or has an interest in the Trust, or that
(ii) any partnership, corporation, trust, association or
other organization with which a contract of the character
described in Sections 1, 2, 3 or 4 of this Article III or for
services as Custodian, Transfer Agent or disbursing agent or
for related services may have been or may hereafter be made
also has any one or more of such contracts with one or more
other partnerships, corporations, trusts, associations or
other organizations, or has other business or interests, shall
not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon
or executing the same or create any liability or
accountability to the Trust or its Shareholders.
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ARTICLE IV
COMPENSATION, LIMITATION OF
LIABILITY AND INDEMNIFICATION
Section 1. Compensation. The Trustees as such shall be entitled to
reasonable compensation from the Trust, and they may fix the amount of such
compensation. Nothing herein shall in any way prevent the employment of any
Trustee for advisory, management, legal, accounting, investment banking or other
services and payment for the same by the Trust.
Section 2. Limitation of Liability. All persons contracting with or
having any claim against the Trust or a particular Series shall look only to the
assets of all Series or such particular Series for payment under such contract
or claim; and neither the Trustees nor, when acting in such capacity, any of the
Trust's officers, employees or agents, whether past, present or future, shall be
personally liable therefor. Every written instrument or obligation on behalf of
the Trust or any Series shall contain a statement to the foregoing effect, but
the absence of such statement shall not operate to make any Trustee or officer
of the Trust liable thereunder. Provided they have exercised reasonable care and
have acted under the reasonable belief that their actions are in the best
interest of the Trust, the Trustees and officers of the Trust shall not be
responsible or liable for any act or omission or for neglect or wrongdoing of
them or any officer, agent, employee, investment adviser or independent
contractor of the Trust, but nothing contained in this Declaration or in the
Delaware Act shall protect any Trustee or officer of the Trust against liability
to the Trust or to Shareholders to which he would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office.
Section 3. Indemnification. (a) Subject to the exceptions and
limitations contained in subsection (b) below:
(i) every person who is, or has been, a Trustee or an
officer, employee or agent of the Trust (including any
individual who serves at its request as director, officer,
partner, trustee or the like of another organization in which
it has any interest as a shareholder, creditor or otherwise)
("Covered Person") shall be indemnified by the Trust or the
appropriate Series to the fullest extent permitted by law
against liability and against all expenses reasonably incurred
or paid by him in connection with any claim, action, suit or
proceeding in which he becomes involved as a party or
otherwise by virtue of his being or having been a Covered
Person and against amounts paid or incurred by him in the
settlement thereof; and
(ii) as used herein, the words "claim," "action," "suit,"
or "proceeding" shall apply to all claims, actions, suits or
proceedings (civil, criminal or other, including appeals),
actual or threatened, and the words "liability" and "expenses"
shall include, without limitation, attorneys' fees, costs,
judgments, amounts paid in settlement, fines, penalties and
other liabilities.
(b) No indemnification shall be provided hereunder to a
Covered Person:
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(i) who shall have been adjudicated by a court or body
before which the proceeding was brought (A) to be liable to
the Trust or its Shareholders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his office, or (B)
not to have acted in good faith in the reasonable belief that
his action was in the best interest of the Trust; or
(ii) in the event of a settlement, unless there has been
a determination that such Covered Person did not engage in
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office:
(A) by the court or other body approving the settlement; (B)
by at least a majority of those Trustees who are neither
Interested Persons of the Trust nor are parties to the matter
based upon a review of readily available facts (as opposed to
a full trial-type inquiry); (C) by written opinion of
independent legal counsel based upon a review of readily
available facts (as opposed to a full trial-type inquiry) or
(D) by a vote of a majority of the Outstanding Shares entitled
to vote (excluding any Outstanding Shares owned of record or
beneficially by such individual).
(c) The rights of indemnification herein provided may be
insured against by policies maintained by the Trust, shall be
severable, shall not be exclusive of or affect any other rights to
which any Covered Person may now or hereafter be entitled, and shall
inure to the benefit of the heirs, executors and administrators of a
Covered Person.
(d) To the maximum extent permitted by applicable law,
expenses in connection with the preparation and presentation of a
defense to any claim, action, suit or proceeding of the character
described in subsection (a) of this Section may be paid by the Trust or
applicable Series from time to time prior to final disposition thereof
upon receipt of an undertaking by or on behalf of such Covered Person
that such amount will be paid over by him to the Trust or applicable
Series if it is ultimately determined that he is not entitled to
indemnification under this Section; provided, however, that either (i)
such Covered Person shall have provided appropriate security for such
undertaking, (ii) the Trust is insured against losses arising out of
any such advance payments or (iii) either a majority of the Trustees
who are neither Interested Persons of the Trust nor parties to the
matter, or independent legal counsel in a written opinion, shall have
determined, based upon a review of readily available facts (as opposed
to a full trial-type inquiry) that there is reason to believe that such
Covered Person will not be disqualified from indemnification under this
Section.
(e) Any repeal or modification of this Article IV by the
Shareholders, or adoption or modification of any other provision of the
Declaration or By-laws inconsistent with this Article, shall be
prospective only, to the extent that such repeal, or modification
would, if applied retrospectively, adversely affect any limitation on
the liability of any Covered Person or indemnification available to any
Covered Person with respect to any act or omission which occurred prior
to such repeal, modification or adoption.
Section 3. Indemnification of Shareholders. If any Shareholder or
former Shareholder of any Series shall be held personally liable solely by
reason of his being or having been a Shareholder and not because of his acts or
omissions or for some other reason, the Shareholder or former Shareholder
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(or his heirs, executors, administrators or other legal representatives or in
the case of any entity, its general successor) shall be entitled out of the
assets belonging to the applicable Series to be held harmless from and
indemnified against all loss and expense arising from such liability. The Trust,
on behalf of the affected Series, shall, upon request by such Shareholder,
assume the defense of any claim made against such Shareholder for any act or
obligation of the Series and satisfy any judgment thereon from the assets of the
Series.
Section 4. No Bond Required of Trustees. No Trustee shall be obligated
to give any bond or other security for the performance of any of his duties
hereunder.
Section 5. No Duty of Investigation; Notice in Trust Instruments, Etc.
No purchaser, lender, transfer agent or other Person dealing with the Trustees
or any officer, employee or agent of the Trust or a Series thereof 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, Share, other security of the Trust or a
Series thereof or undertaking, and every other act or thing whatsoever executed
in connection with the Trust shall be conclusively presumed to have been
executed or done by the executors thereof only in their capacity as Trustees
under this Declaration or in their capacity as officers, employees or agents of
the Trust or a Series thereof. Every written obligation, contract, instrument,
certificate, Share, other security of the Trust or a Series thereof or
undertaking made or issued by the Trustees may recite that the same is executed
or made by them not individually, but as Trustees under the Declaration, and
that the obligations of the Trust or a Series thereof under any such instrument
are not binding upon any of the Trustees or Shareholders individually, but bind
only the Trust Property or the Trust Property of the applicable Series, and may
contain any further recital which they may deem appropriate, but the omission of
such recital shall not operate to bind the Trustees individually. The Trustees
shall at all times maintain insurance for the protection of the Trust Property
or the Trust Property of the applicable Series, its Shareholders, Trustees,
officers, employees and agents in such amount as the Trustees shall deem
adequate to cover possible tort liability, and such other insurance as the
Trustees in their sole judgment shall deem advisable.
Section 6. Reliance on Experts, Etc. Each Trustee, officer or employee
of the Trust or a Series thereof shall, in the performance of his duties, powers
and discretions hereunder 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 or a Series thereof,
upon an opinion of counsel, or upon reports made to the Trust or a Series
thereof by any of its officers or employees or by the Investment Adviser, the
Administrator, the Distributor, Transfer Agent, selected dealers, accountants,
appraisers 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.
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ARTICLE V
SERIES; CLASSES; SHARES
Section 1. Establishment of Series or Class. The Trust shall consist of
one or more Series. Without limiting the authority of the Trustees to establish
and designate any further Series, the Trustees hereby establish two Series which
shall be designated Prasad Fund of Funds and Prasad Growth Fund. Each additional
Series shall be established and is effective upon the adoption of a resolution
of a majority of the Trustees or any alternative date specified in such
resolution. The Trustees may designate the relative rights and preferences of
the Shares of each Series. The Trustees may divide the Shares of any Series into
Classes. Without limiting the authority of the Trustees to establish and
designate any further Classes, the Trustees hereby establish a single Class of
Shares. The Classes of Shares of the existing Series herein established and
designated and any Shares of any further Series and Classes that may from time
to time be established and designated by the Trustees 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; provided,
that all Shares shall be identical except for such variations as shall be fixed
and determined between different Series or Classes by the Trustees in
establishing and designating such Class or Series. In connection therewith with
respect to the existing Classes, the purchase price, the method of determining
the net asset value, and the relative dividend rights of holders shall be as set
forth in the Trust's Registration Statement on Form N-1A under the Securities
Act of 1933 and/or the 1940 Act and as in effect at the time of issuing Shares
of the existing Classes.
All references to Shares in this Declaration shall be deemed to be
Shares of any or all Series or Classes as the context may require. The Trust
shall maintain separate and distinct records for each Series and hold and
account for the assets thereof separately from the other assets of the Trust or
of any other Series. A Series may issue any number of Shares or any Class
thereof and need not issue Shares. Each Share of a Series shall represent an
equal beneficial interest in the net assets of such Series. Each holder of
Shares of a Series or a Class thereof shall be entitled to receive his pro rata
share of all distributions made with respect to such Series or Class. Upon
redemption of his Shares, such Shareholder shall be paid solely out of the funds
and property of such Series. The Trustees may adopt and change the name of any
Series or Class.
Section 2. Shares. The beneficial interest in the Trust shall be
divided into transferable Shares of one or more separate and distinct Series or
Classes established by the Trustees. The number of Shares of each Series and
Class is unlimited and each Share shall have no par value per Share or such
other amount as the Trustees may establish. All Shares issued hereunder shall be
fully paid and nonassessable. Shareholders shall have no preemptive or other
right to subscribe to any additional Shares or other securities issued by the
Trust. The Trustees shall have full power and authority, in their sole
discretion and without obtaining Shareholder approval, to issue original or
additional Shares at such times and on such terms and conditions as they deem
appropriate; to issue fractional Shares and Shares held in the treasury; to
establish and to change in any manner Shares of any Series or Classes with such
preferences, terms of conversion, voting powers, rights and privileges as the
Trustees may determine (but the Trustees may not change Outstanding Shares in a
manner materially adverse to the Shareholders of such Shares); to divide or
combine the Shares of any Series or Classes into a greater or lesser number; to
classify or reclassify any unissued Shares of any Series or Classes into one or
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more Series or Classes of Shares; to abolish any one or more Series or Classes
of Shares; to issue Shares to acquire other assets (including assets subject to,
and in connection with, the assumption of liabilities) and businesses; and to
take such other action with respect to the Shares as the Trustees may deem
desirable. Shares held in the treasury shall not confer any voting rights on the
Trustees and shall not be entitled to any dividends or other distributions
declared with respect to the Shares.
Section 3. Investment in the Trust. The Trustees shall accept
investments in any Series or Class from such persons and on such terms as they
may from time to time authorize. At the Trustees' discretion, such investments,
subject to applicable law, may be in the form of cash or securities in which
that Series is authorized to invest, valued as provided in Article VI, Section
3. Investments in a Series shall be credited to each Shareholder's account in
the form of full Shares at the Net Asset Value per Share next determined after
the investment is received or accepted as may be determined by the Trustees;
provided, however, that the Trustees may, in their sole discretion, (a) impose a
sales charge upon investments in any Series or Class, (b) issue fractional
Shares, (c) determine the Net Asset Value per Share of the initial capital
contribution or (d) authorize the issuance of Shares at a price other than Net
Asset Value to the extent permitted by the 1940 Act or any rule, order or
interpretation of the Commission thereunder. The Trustees shall have the right
to refuse to accept investments in any Series at any time without any cause or
reason therefor whatsoever.
Section 4. Assets and Liabilities of Series. All consideration received
by the Trust for the issue or sale of Shares of a particular Series, together
with all assets in which such consideration is invested or reinvested, all
income, earnings, profits, and proceeds thereof (including any proceeds derived
from the sale, 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 be held and accounted for separately from the assets of every other
Series and are referred to as "assets belonging to" that Series. The assets
belonging to a Series shall belong only to that Series for all purposes, and to
no other Series, subject only to the rights of creditors of that Series. Any
assets, income, earnings, profits, and proceeds thereof, funds, or payments
which are not readily identifiable as belonging to any particular Series shall
be allocated by the Trustees between and among one or more Series as the
Trustees deem fair and equitable. Each such allocation shall be conclusive and
binding upon the Shareholders of all Series for all purposes, and such assets,
earnings, income, profits or funds, or payments and proceeds thereof shall be
referred to as assets belonging to that Series. The assets belonging to a Series
shall be so recorded upon the books of the Trust, and shall be held by the
Trustees in trust for the benefit of the Shareholders of that Series. The assets
belonging to a Series shall be charged with the liabilities of that Series and
all expenses, costs, charges and reserves attributable to that Series, except
that liabilities and expenses allocated solely to a particular Class shall be
borne by that Class. Any general liabilities, expenses, costs, charges or
reserves of the Trust which are not readily identifiable as belonging to any
particular Series or Class shall be allocated and charged by the Trustees
between or among any one or more of the Series or Classes in such manner as the
Trustees deem fair and equitable. Each such allocation shall be conclusive and
binding upon the Shareholders of all Series or Classes for all purposes.
Without limiting the foregoing, but subject to the right of the
Trustees to allocate general liabilities, expenses, costs, charges or reserves
as herein provided, the debts, liabilities, obligations and expenses incurred,
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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 contractual limitation on liabilities
among Series may, in the Trustees' 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 Delaware Act, and upon the giving of such notice in the certificate of
trust, the statutory provisions of Section 3804 of the Delaware Act relating to
limitations on liabilities among Series (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. Any person extending credit to,
contracting with or having any claim against any Series may look only to the
assets of that Series to satisfy or enforce any debt, with respect to that
Series. No Shareholder or former Shareholder of any Series shall have a claim on
or any right to any assets allocated or belonging to any other Series.
Section 5. Ownership and Transfer of Shares. The Trust or a transfer or
similar agent for the Trust shall maintain a register containing the names and
addresses of the Shareholders of each Series and Class thereof, the number of
Shares of each Series and Class held by such Shareholders, and a record of all
Share transfers. The register shall be conclusive as to the identity of
Shareholders of record and the number of Shares held by them from time to time.
The Trustees may authorize the issuance of certificates representing Shares and
adopt rules governing their use. The Trustees may make rules governing the
transfer of Shares, whether or not represented by certificates. Except as
otherwise provided by the Trustees, Shares shall be transferable on the books of
the Trust only by the record holder thereof or by his duly authorized agent upon
delivery to the Trustees or the Trust's transfer agent of a duly executed
instrument of transfer, together with a Share certificate if one is outstanding,
and such evidence or the genuineness of each such execution and authorization
and of such other matters as may be required by the Trustees. Upon such
delivery, and subject to any further requirements specified by the Trustees or
contained in the By-laws, the transfer shall be recorded on the books of the
Trust. Until a transfer is so recorded, the Shareholder of record of Shares
shall be deemed to be the holder of such Shares for all purposes hereunder and
neither the Trustees nor the Trust, nor any transfer agent or registrar or any
officer, employee or agent of the Trust, shall be affected by any notice of a
proposed transfer.
Section 6. Status of Shares; Limitation of Shareholder Liability.
Shares shall be deemed to be personal property giving Shareholders only the
rights provided in this Declaration. Every Shareholder, by virtue of having
acquired a Share, shall be held expressly to have assented to and agreed to be
bound by the terms of this Declaration and to have become a party hereto. No
Shareholder shall be personally liable for the debts, liabilities, obligations
and expenses incurred by, contracted for, or otherwise existing with respect to,
the Trust or any Series. The death, incapacity, dissolution, termination or
bankruptcy of a Shareholder during the existence of the Trust shall not operate
to terminate the Trust, nor entitle the representative of any such Shareholder
to an accounting or to take any action in court or elsewhere against the Trust
or the Trustees, but entitles such representative only to the rights of such
Shareholder under this Trust. Ownership of Shares shall not entitle the
Shareholder to any title in or to the whole or any part of the Trust Property or
right to call for a partition or division of the same or for an accounting, nor
shall the ownership of Shares constitute the Shareholders as partners. Neither
the Trust nor the Trustees shall have any power to bind any Shareholder
personally or to demand payment from any Shareholder for anything, other than as
agreed by the Shareholder. Shareholders shall have the same limitation of
personal liability as is extended to shareholders of a private corporation for
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profit incorporated in the State of Delaware. Every written obligation of the
Trust or any Series shall contain a statement to the effect that such obligation
may only be enforced against the assets of the appropriate Series or all Series;
however, the omission of such statement shall not operate to bind or create
personal liability for any Shareholder or Trustee.
ARTICLE VI
DISTRIBUTIONS AND REDEMPTIONS
Section 1. Distributions. The Trustees or a committee of one or more
Trustees and one or more officers may declare and pay dividends and other
distributions, including dividends on Shares of a particular Series and other
distributions from the assets belonging to that Series. No dividend or
distribution, including, without limitation, any distribution paid upon
termination of the Trust or of any Series (or Class) with respect to, nor any
redemption or repurchase of, the Shares of any Series (or Class) shall be
effected by the Trust other than from the assets held with respect to such
Series, nor shall any Shareholder of any particular Series otherwise have any
right or claim against the assets held with respect to any other Series except
to the extent that such Shareholder has such a right or claim hereunder as a
Shareholder of such other Series. The Trustees shall have full discretion 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
Shareholders. The amount and payment of dividends or distributions and their
form, whether they are in cash, Shares or other Trust Property, shall be
determined by the Trustees. Dividends and other distributions may be paid
pursuant to a standing resolution adopted once or more often as the Trustees
determine. All dividends and other distributions on Shares of a particular
Series shall be distributed pro rata to the Shareholders of that Series in
proportion to the number of Shares of that Series they held on the record date
established for such payment, except that such dividends and distributions shall
appropriately reflect expenses allocated to a particular Class of such Series.
The Trustees may adopt and offer to Shareholders such dividend reinvestment
plans, cash dividend payout plans or similar plans as the Trustees deem
appropriate.
Section 2. Redemptions. Each Shareholder of a Series shall have the
right at such times as may be permitted by the Trustees to require the Series to
redeem all or any part of his Shares at a redemption price per Share equal to
the Net Asset Value per Share at such time as the Trustees shall have prescribed
by resolution, or, to the extent permitted by the 1940 Act, at such other
redemption price and at such times as the Trustees shall prescribe by
resolution. In the absence of such resolution, the redemption price per Share
shall be the Net Asset Value next determined after receipt by the Series of a
request for redemption in proper form less such charges as are determined by the
Trustees and described in the Trust's Registration Statement for that Series
under the Securities Act of 1933. The Trustees may specify conditions, prices,
and places of redemption, may specify binding requirements for the proper form
or forms of requests for redemption and may specify the amount of any deferred
sales charge to be withheld from redemption proceeds. Payment of the redemption
price may be wholly or partly in securities or other assets at the value of such
securities or assets used in such determination of Net Asset Value, or may be in
cash. Upon redemption, Shares may be reissued from time to time. The Trustees
may require Shareholders to redeem Shares for any reason under terms set by the
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Trustees, including, but not limited to, the failure of a Shareholder to supply
a taxpayer identification number if required to do so, or to have the minimum
investment required, or to pay when due for the purchase of Shares issued to
him. To the extent permitted by law, the Trustees may retain the proceeds of any
redemption of Shares required by them for payment of amounts due and owing by a
Shareholder to the Trust or any Series or Class or any governmental authority.
Notwithstanding the foregoing, the Trustees may postpone payment of the
redemption price and may suspend the right of the Shareholders to require any
Series or Class to redeem Shares during any period of time when and to the
extent permissible under the 1940 Act.
Section 3. Determination of Net Asset Value. The Trustees shall cause
the Net Asset Value of Shares of each Series or Class to be determined from time
to time in a manner consistent with applicable laws and regulations. The
Trustees may delegate the power and duty to determine Net Asset Value per Share
to one or more Trustees or officers of the Trust or to a custodian, depository
or other agent appointed for such purpose. The Net Asset Value of Shares shall
be determined separately for each Series or Class at such times as may be
prescribed by the Trustees or, in the absence of action by the Trustees, as of
the close of regular trading on the New York Stock Exchange on each day for all
or part of which such Exchange is open for unrestricted trading.
Section 4. Suspension of Right of Redemption. If, as referred to in
Section 2 of this Article, the Trustees postpone payment of the redemption price
and suspend the right of Shareholders to redeem their Shares, such suspension
shall take effect at the time the Trustees shall specify, but not later than the
close of business on the business day next following the declaration of
suspension. Thereafter Shareholders shall have no right of redemption or payment
until the Trustees declare the end of the suspension. If the right of redemption
is suspended, a Shareholder may either withdraw his request for redemption or
receive payment based on the Net Asset Value per Share next determined after the
suspension terminates.
Section 5. Repurchase by Agreement. The Trust may repurchase Shares
directly, or through the Distributor or another agent designated for the
purpose, by agreement with the owner thereof at a price not exceeding the Net
Asset Value per Share determined as of the time when the purchase or contract of
purchase is made or the Net Asset Value as of any time which may be later
determined, provided payment is not made for the Shares prior to the time as of
which such Net Asset Value is determined.
ARTICLE VII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 1. Voting Powers. The Shareholders shall have power to vote
only with respect to (a) the election of Trustees as provided in Section 2 of
this Article; (b) the removal of Trustees as provided in Article II, Section
3(d); (c) any investment advisory or management contract as provided in Article
VIII, Section 1; (d) any termination of the Trust as provided in Article IX,
Section 4; (e) the amendment of this Declaration to the extent and as provided
in Article X, Section 8; and (f) such additional matters relating to the Trust
as may be required or authorized by law, this Declaration, or the By-laws or any
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registration of the Trust with the Commission or any State, or as the Trustees
may consider desirable.
On any matter submitted to a vote of the Shareholders, all Shares shall
be voted by individual Series or Class, except (a) when required by the 1940
Act, Shares shall be voted in the aggregate and not by individual Series or
Class, and (b) when the Trustees have determined that the matter affects the
interests of more than one Series or Class, then the Shareholders of all such
Series or Classes shall be entitled to vote thereon. As determined by the
Trustees without the vote or consent of shareholders, on any matter submitted to
a vote of Shareholders either (i) each whole Share shall be entitled to one vote
as to any matter on which it is entitled to vote and each fractional Share shall
be entitled to a proportionate fractional vote or (ii) each dollar of net asset
value (number of Shares owned times net asset value per share of such Series or
Class, as applicable) shall be entitled to one vote on any matter on which such
Shares are entitled to vote and each fractional dollar amount shall be entitled
to a proportionate fractional vote. Without limiting the power of the Trustees
in any way to designate otherwise in accordance with the preceding sentence, the
Trustees hereby establish that each whole Share shall be entitled to one vote as
to any matter on which it is entitled to vote and each fractional Share shall be
entitled to a proportionate fractional vote. There shall be no cumulative voting
in the election of Trustees. Shares may be voted in person or by proxy or in any
manner provided for in the By-laws. The By-laws may provide that proxies may be
given by any electronic or telecommunications device or in any other manner, but
if a proposal by anyone other than the officers or Trustees is submitted to a
vote of the Shareholders of any Series or Class, or if there is a proxy contest
or proxy solicitation or proposal in opposition to any proposal by the officers
or Trustees, Shares may be voted only in person or by written proxy. Until
Shares of a Series are issued, as to that Series the Trustees may exercise all
rights of Shareholders and may take any action required or permitted to be taken
by Shareholders by law, this Declaration or the By-laws. Meetings of
Shareholders shall be called and notice thereof and record dates therefor shall
be given and set as provided in the By-laws.
Section 2. Quorum; Required Vote. One-third of the Outstanding Shares
of each Series or Class, or one-third of the Outstanding Shares of the Trust,
entitled to vote in person or by proxy shall be a quorum for the transaction of
business at a Shareholders' meeting with respect to such Series or Class, or
with respect to the entire Trust, respectively. Any lesser number shall be
sufficient for adjournments. Any adjourned session of a Shareholders' meeting
may be held within a reasonable time without further notice. Except when a
larger vote is required by law, this Declaration or the By-laws, a majority of
the Shares voting at a Shareholders' meeting in person or by proxy shall decide
any matters to be voted upon with respect to the entire Trust and a plurality of
such Shares shall elect a Trustee; provided, that if this Declaration or
applicable law permits or requires that Shares be voted on any matter by
individual Series or Classes, then a majority of the Shares of that Series or
Class (or, if required by law, a majority of the Shares outstanding and entitled
to vote of that Series or Class) voting at a Shareholders' meeting in person or
by proxy on the matter shall decide that matter insofar as that Series or Class
is concerned. Shareholders may act as to the Trust or any Series or Class by the
written consent of a majority (or such other amount as may be required by
applicable law) of the Outstanding Shares of the Trust or of such Series or
Class, as the case may be.
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Section 3. Record Dates. For the purpose of determining the
Shareholders of any Series (or Class) who are entitled to receive payment of any
dividend or of any other distribution, the Trustees may from time to time fix a
date, which shall be before the date for the payment of such dividend or such
other payment, as the record date for determining the Shareholders of such
Series (or Class) having the right to receive such dividend or distribution.
Without fixing a record date, the Trustees may for distribution purposes close
the register or transfer books for one or more Series (or Classes) any time
prior to the payment of a distribution. Nothing in this Section shall be
construed as precluding the Trustees from setting different record dates for
different Series (or Classes).
Section 4. Additional Provisions. The By-laws may include further
provisions for Shareholders' votes and meetings and related matters.
ARTICLE VIII
EXPENSES OF THE TRUST AND SERIES
Section 1. Payment of Expenses by the Trust. Subject to Article V,
Section 4, the Trust or a particular Series shall pay, or shall reimburse the
Trustees from the assets belonging to all Series or the particular Series, for
their expenses (or the expenses of a Class of such Series) and disbursements,
including, but not limited to, interest charges, taxes, brokerage fees and
commissions; expenses of issue, repurchase and redemption of Shares; certain
insurance premiums; applicable fees, interest charges and expenses of third
parties, including the Trust's investment advisers, managers, administrators,
distributors, custodians, transfer agents and fund accountants; fees of pricing,
interest, dividend, credit and other reporting services; costs of membership in
trade associations; telecommunications expenses; funds transmission expenses;
auditing, legal and compliance expenses; costs of forming the Trust and its
Series and maintaining its existence; costs of preparing and printing the
prospectuses of the Trust and each Series, statements of additional information
and Shareholder reports and delivering them to Shareholders; expenses of
meetings of Shareholders and proxy solicitations therefor; costs of maintaining
books and accounts; costs of reproduction, stationery and supplies; fees and
expenses of the Trustees; compensation of the Trust's officers and employees and
costs of other personnel performing services for the Trust or any Series; costs
of Trustee meetings; Commission registration fees and related expenses; state or
foreign securities laws registration fees and related expenses; and for such
non-recurring items as may arise, including litigation to which the Trust or a
Series (or a Trustee or officer of the Trust acting as such) is a party, and for
all losses and liabilities by them incurred in administering the Trust. The
Trustees shall have a lien on the assets belonging to the appropriate Series, or
in the case of an expense allocable to more than one Series, on the assets of
each such Series, prior to any rights or interests of the Shareholders thereto,
for the reimbursement to them of such expenses, disbursements, losses and
liabilities.
Section 2. Payment of Expenses by Shareholders. The Trustees shall have
the power, as frequently as they may determine, to cause each Shareholder, or
each Shareholder of any particular Series, to pay directly, in advance or
arrears, for charges of the Trust's custodian or transfer, shareholder servicing
or similar agent, an amount fixed from time to time by the Trustees, by setting
off such charges due from such Shareholder from declared but unpaid dividends
owed such Shareholder and/or by reducing the number of Shares in the account of
such Shareholder by that number of full and/or fractional Shares which
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represents the outstanding amount of such charges due from such Shareholder.
ARTICLE IX
MISCELLANEOUS
Section 1. Trust Not a Partnership. This Declaration creates a trust
and not a partnership. No Trustee shall have any power to bind personally either
the Trust's officers or any Shareholder.
Section 2. Trustee Action. The exercise by the Trustees of their powers
and discretion hereunder in good faith and with reasonable care under the
circumstances then prevailing shall be binding upon everyone interested. Subject
to the provisions of Article IV, the Trustees shall not be liable for errors of
judgment or mistakes of fact or law.
Section 3. Record Dates. The Trustees may fix in advance a date up to
ninety (90) days before the date of any Shareholders' meeting, or the date for
the payment of any dividends or other distributions, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
Shares shall go into effect as a record date for the determination of the
Shareholders entitled to notice of, and to vote at, any such meeting, or
entitled to receive payment of such dividend or other distribution, or to
receive any such allotment of rights, or to exercise such rights in respect of
any such change, conversion or exchange of Shares.
Section 4. Termination of the Trust.
(a) This Trust shall have perpetual existence. Subject to the
vote of a majority of the Shares outstanding and entitled to vote of
the Trust or of each Series to be affected, the Trustees may
(i) sell and convey all or substantially all of the
assets of all Series or any affected Series to another Series
or to another entity which is an open-end investment company
as defined in the 1940 Act, or is a series thereof, for
adequate consideration, which may include the assumption of
all outstanding obligations, taxes and other liabilities,
accrued or contingent, of the Trust or any affected Series,
and which may include shares of or interests in such Series,
entity, or series thereof; or
(ii) at any time sell and convert into money all or
substantially all of the assets of all Series or any affected
Series.
Upon making reasonable provision for the payment of all known
liabilities of all Series or any affected Series in either (i) or (ii),
by such assumption or otherwise, the Trustees shall distribute the
remaining proceeds or assets (as the case may be) ratably among the
Shareholders of all Series or any affected Series; however, the payment
to any particular Class of such Series may be reduced by any fees,
expenses or charges allocated to that Class.
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(b) The Trustees may take any of the actions specified in
subsection (a)(i) and (ii) above without obtaining the vote of a
majority of the Shares Outstanding and entitled to vote of the Trust or
any Series if a majority of the Trustees determines that the
continuation of the Trust or Series is not in the best interests of the
Trust, such Series, or their respective Shareholders as a result of
factors or events adversely affecting the ability of the Trust or such
Series to conduct its business and operations in an economically viable
manner. Such factors and events may include the inability of the Trust
or a Series to maintain its assets at an appropriate size, changes in
laws or regulations governing the Trust or the Series or affecting
assets of the type in which the Trust or Series invests, or economic
developments or trends having a significant adverse impact on the
business or operations of the Trust or such Series.
(c) Upon completion of the distribution of the remaining
proceeds or assets pursuant to subsection (a), the Trust or affected
Series shall terminate and the Trustees and the Trust shall be
discharged of any and all further liabilities and duties hereunder with
respect thereto and the right, title and interest of all parties
therein shall be canceled and discharged. Upon termination of the
Trust, following completion of winding up of its business, the Trustees
shall cause a certificate of cancellation of the Trust's certificate of
trust to be filed in accordance with the Delaware Act, which
certificate of cancellation may be signed by any one Trustee.
Section 5. Reorganization.
(a) Notwithstanding anything else herein, to change the
Trust's form or place of organization the Trustees may, without
Shareholder approval unless such approval is required by applicable
law, (i) cause the Trust to merge or consolidate with or into one or
more entities, if the surviving or resulting entity is the Trust or
another open-end management investment company under the 1940 Act, or a
series thereof, that will succeed to or assume the Trust's registration
under the 1940 Act, (ii) cause the Shares to be exchanged under or
pursuant to any state or federal statute to the extent permitted by
law, or (iii) cause the Trust to incorporate under the laws of Delaware
or any other U.S. jurisdiction. Any agreement of merger or
consolidation or certificate of merger may be signed by a majority of
Trustees and facsimile signatures conveyed by electronic or
telecommunication means shall be valid.
(b) Pursuant to and in accordance with the provisions of
Section 3815(f) of the Delaware Act, an agreement of merger or
consolidation approved by the Trustees in accordance with this Section
5 may effect any amendment to the Declaration or effect the adoption of
a new trust instrument of the Trust if it is the surviving or resulting
trust in the merger or consolidation.
(c) The Trustees may create one or more business trusts to
which all or any part of the assets, liabilities, profits or losses of
the Trust or any Series or Class thereof may be transferred and may
provide for the conversion of Shares in the Trust or any Series or
Class thereof into beneficial interests in any such newly created trust
or trusts or any series or classes thereof.
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Section 6. Declaration of Trust. The original or a copy of this
Declaration of Trust and of each amendment hereto or Declaration of Trust
supplemental shall be kept at the office of the Trust where it may be inspected
by any Shareholder. Anyone dealing with the Trust may rely on a certificate by a
Trustee or an officer of the Trust as to the authenticity of the Declaration of
Trust or any such amendments or supplements and as to any matters in connection
with the Trust. The masculine gender herein shall include the feminine and
neuter genders. Headings herein are for convenience only and shall not affect
the construction of this Declaration of Trust. This Declaration of Trust may be
executed in any number of counterparts, each of which shall be deemed an
original.
Section 7. Applicable Law. This Declaration and the Trust created
hereunder are governed by and construed and administered according to the
Delaware Act and the applicable laws of the State of Delaware; provided,
however, that there shall not be applicable to the Trust, the Trustees or this
Declaration of Trust (a) the provisions of Section 3540 of Title 12 of the
Delaware Code, or (b) any provisions of the laws (statutory or common) of the
State of Delaware (other than the Delaware Act) pertaining to trusts which
relate to or regulate (i) the filing with any court or governmental body or
agency of trustee accounts or schedules of trustee fees and charges, (ii)
affirmative requirements to post bonds for trustees, officers, agents or
employees of a trust, (iii) the necessity for obtaining court or other
governmental approval concerning the acquisition, holding or disposition of real
or personal property, (iv) fees or other sums payable to trustees, officers,
agents or employees of a trust, (v) the allocation of receipts and expenditures
to income or principal, (vi) restrictions or limitations on the permissible
nature, amount or concentration of trust investments or requirements relating to
the titling, storage or other manner of holding of trust assets, or (vii) the
establishment of fiduciary or other standards of responsibilities or limitations
on the acts or powers of trustees, which are inconsistent with the limitations
or liabilities or authorities and powers of the Trustees set forth or referenced
in this Declaration. The Trust shall be of the type commonly called a Delaware
business trust, and, without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust under
Delaware law. The Trust specifically reserves the right to exercise any of the
powers or privileges afforded to trusts or actions that may be engaged in by
trusts under the Delaware Act, and the absence of a specific reference herein to
any such power, privilege or action shall not imply that the Trust may not
exercise such power or privilege or take such actions.
Section 8. Amendments. The Trustees may, without any Shareholder vote,
amend or otherwise supplement this Declaration by making an amendment, a
Declaration of Trust supplemental hereto or an amended and restated trust
instrument; provided, that Shareholders shall have the right to vote on any
amendment (a) which would affect the voting rights of Shareholders granted in
Article VII, Section l, (b) to this Section 8, (c) required to be approved by
Shareholders by law or by the Trust's registration statement(s) filed with the
Commission, and (d) submitted to them by the Trustees in their discretion. Any
amendment submitted to Shareholders which the Trustees determine would affect
the Shareholders of any Series shall be authorized by vote of the Shareholders
of such Series and no vote shall be required of Shareholders of a Series not
affected. Notwithstanding anything else herein, any amendment to Article IV
which would have the effect of reducing the indemnification and other rights
provided thereby to Trustees, officers, employees, and agents of the Trust or to
Shareholders or former Shareholders, and any repeal or amendment of this
sentence shall each require the affirmative vote of the holders of two-thirds of
the Outstanding Shares of the Trust entitled to vote thereon.
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Section 9. Derivative Actions. In addition to the requirements set
forth in Section 3816 of the Delaware Act, a Shareholder may bring a derivative
action on behalf of the Trust only if the following conditions are met:
(a) Shareholders eligible to bring such derivative action
under the Delaware Act who hold at least 10% of the Outstanding Shares
of the Trust, or 10% of the Outstanding Shares of the Series or Class
to which such action relates, shall join in the request for the
Trustees to commence such action; and
(b) the Trustees must be afforded a reasonable amount of time
to consider such shareholder request and to investigate the basis of
such claim. The Trustees shall be entitled to retain counsel or other
advisers in considering the merits of the request and shall require an
undertaking by the Shareholders making such request to reimburse the
Trust for the expense of any such advisers in the event that the
Trustees determine not to bring such action.
Section 10. Fiscal Year. The fiscal year of the Trust shall end on a
specified date as set forth in the By-laws. The Trustees may change the fiscal
year of the Trust without Shareholder approval.
Section 11. Severability. The provisions of this Declaration are
severable. If the Trustees determine, with the advice of counsel, that any
provision hereof conflicts with the 1940 Act, the regulated investment company
provisions of the Internal Revenue Code or with other applicable laws and
regulations, the conflicting provision 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. If any
provision hereof shall be held invalid or unenforceable in any jurisdiction,
such invalidity or unenforceability shall attach only to such provision only in
such jurisdiction and shall not affect any other provision of this Declaration.
IN WITNESS WHEREOF, the undersigned has executed this instrument as of
the date first written above.
/s/ Rajendra Prasad
Rajendra Prasad, as Trustee and not
individually 821 Hillside Drive, Long
Beach, California 90815
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EXHIBIT NO. 2
BY-LAWS
OF
PRASAD SERIES TRUST
ARTICLE I
DEFINITIONS
All capitalized terms have the respective meanings given them in the
Agreement and Declaration of Trust of Prasad Series Trust dated July 31, 1998,
as amended or restated from time to time.
ARTICLE II
OFFICES
Section 1. Principal Office. Until changed by the Trustees, the
principal office of the Trust shall be in Cleveland, Ohio.
Section 2. Other Offices. The Trust may have offices in such other
places without as well as within the State of Delaware as the Trustees may from
time to time determine.
Section 3. Registered Office and Registered Agent. The Board of
Trustees shall establish a registered office in the State of Delaware and shall
appoint as the Trust's registered agent for service of process in the State of
Delaware an individual resident of the State of Delaware or a Delaware
corporation or a corporation authorized to transact business in the State of
Delaware; in each case the business office of such registered agent for service
of process shall be identical with the registered Delaware office of the Trust.
ARTICLE III
SHAREHOLDERS
Section 1. Meetings. Meetings of the Shareholders of the Trust or a
Series or Class thereof shall be held as provided in the Declaration of Trust at
such place within or without the State of Delaware as the Trustees shall
designate. The holders of one-third of the Outstanding Shares of the Trust or a
Series or Class thereof present in person or by proxy and entitled to vote shall
constitute a quorum at any meeting of the Shareholders of the Trust or a Series
or Class thereof.
Section 2. Notice of Meetings. Notice of all meetings of the
Shareholders, stating the time, place and purposes of the meeting, shall be
given by the Trustees by mail or telegraphic or electronic means to each
Shareholder at his address as recorded on the register of the Trust mailed at
least ten (10) days and not more than ninety (90) days before the meeting,
provided, however, that notice of a meeting need not be given to a Shareholder
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to whom such notice need not be given under the proxy rules of the Commission
under the 1940 Act and the Securities Exchange Act of 1934, as amended. Only the
business stated in the notice of the meeting shall be considered at such
meeting. Any adjourned meeting may be held as adjourned without further notice.
No notice need be given to any Shareholder who shall have failed to inform the
Trust of his current address or if a written waiver of notice, executed before
or after the meeting by the Shareholder or his attorney thereunto authorized, is
filed with the records of the meeting.
Section 3. Record Date for Meetings and Other Purposes. For the
purpose of determining the Shareholders who are entitled to notice of 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 close the transfer books
for such period, not exceeding thirty (30) days, as the Trustees may determine;
or without closing the transfer books the Trustees may fix a date not more than
ninety (90) days prior to the date of any meeting of Shareholders or
distribution or other action as a record date for the determination of the
persons to be treated as Shareholders of record for such purposes, except for
dividend payments which shall be governed by the Declaration of Trust.
Section 4. Proxies. At any meeting of Shareholders, any holder of
Shares 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
proxy shall be deemed signed if the shareholder's name is placed on the proxy
(whether by manual signature, typewriting, telegraphic transmission, facsimile,
other electronic means or otherwise) by the Shareholder or the Shareholder's
attorney-in-fact. Proxies may be given by any electronic or telecommunication
device except as otherwise provided in the Declaration of Trust. Proxies may be
solicited in the name of one or more Trustees or one or more of the officers of
the Trust. Only Shareholders of record shall be entitled to vote. As determined
by the Trustees without the vote or consent of Shareholders, on any matter
submitted to a vote of Shareholders, either (i) each whole Share shall be
entitled to one vote as to any matter on which it is entitled to vote and each
fractional Share shall be entitled to a proportionate fractional vote or (ii)
each dollar of net asset value (number of Shares owned times net asset value per
Share of such Series or Class, as applicable) shall be entitled to one vote on
any matter on which such Shares are entitled to vote and each fractional dollar
amount shall be entitled to a proportionate fractional vote. Without limiting
their power to designate otherwise in accordance with the preceding sentence,
the Trustees have established in the Declaration of Trust that each whole share
shall be entitled to one vote as to any matter on which it is entitled by the
Declaration of Trust to vote and fractional shares shall be entitled to a
proportionate fractional vote. When any Share is held jointly by several
persons, any one of them may vote at any meeting in person or by proxy in
respect of such Share, 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 Share. A proxy purporting to be executed by or on behalf of a
Shareholder shall be deemed valid unless challenged at or prior to its exercise,
and the burden of proving invalidity shall rest on the challenger. If the holder
of any such share is a minor or a person of unsound mind, and subject to
guardianship or the legal control of any other person as regards the charge or
management of such Share, he may vote by his guardian or such other person
appointed or having such control, and such vote may be given in person or by
proxy.
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Section 5. Abstentions and Broker Non-Votes. Outstanding Shares
represented in person or by proxy (including Shares which abstain or do not vote
with respect to one or more of any proposals presented for Shareholder approval)
will be counted for purposes of determining whether a quorum is present at a
meeting. Abstentions will be treated as Shares that are present and entitled to
vote for purposes of determining the number of Shares that are present and
entitled to vote with respect to any particular proposal, but will not be
counted as a vote in favor of such proposal. If a broker or nominee holding
Shares in "street name" indicates on the proxy that it does not have
discretionary authority to vote as to a particular proposal, those Shares will
not be considered as present and entitled to vote with respect to such proposal.
Section 6. Inspection of Records. The records of the Trust shall be
open to inspection by Shareholders to the same extent as is permitted
shareholders of a Delaware business corporation.
Section 7. Action without Meeting. Any action which may be taken by
Shareholders may be taken without a meeting if a majority of Outstanding Shares
entitled to vote on the matter (or such larger proportion thereof as shall be
required by law) consent to the action in writing and the written consents are
filed with the records of the meetings of Shareholders. Such consents shall be
treated for all purposes as a vote taken at a meeting of Shareholders.
ARTICLE IV
TRUSTEES
Section 1. Meetings of the Trustees. The Trustees may in their
discretion provide for regular or stated meetings of the Trustees. Notice of
regular or stated meetings need not be given. Meetings of the Trustees other
than regular or stated meetings shall be held whenever called by the President,
the Chairman or by any one of the Trustees, at the time being in office. Notice
of the time and place of each meeting other than regular or stated meetings
shall be given by the Secretary or an Assistant Secretary or by the officer or
Trustee calling the meeting and shall be mailed to each Trustee at least two
days before the meeting, or shall be given by telephone, cable, wireless,
facsimile or other electronic mechanism to each Trustee at his business address,
or personally delivered to him at least one day before the meeting. Such notice
may, however, be waived by any Trustee. Notice of a meeting need not be given to
any Trustee if a written waiver of notice, executed by him before or after the
meeting, is filed with the records of the meeting, or to any Trustee who attends
the meeting without protesting prior thereto or at its commencement the lack of
notice to him. A notice or waiver of notice need not specify the purpose of any
meeting. The Trustees may meet by means of a telephone conference circuit or
similar communications equipment by means of which all persons participating in
the meeting can hear each other at the same time and participation by such means
shall be deemed to have been held at a place designated by the Trustees at the
meeting. Participation in a telephone conference meeting shall constitute
presence in person at such meeting. Any action required or permitted to be taken
at any meeting of the Trustees may be taken by the Trustees without a meeting if
a majority of the Trustees consent to the action in writing and the written
consents are filed with the records of the Trustees' meetings. Such consents
shall be treated as a vote for all purposes.
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Section 2. Quorum and Manner of Acting. A majority of the Trustees
shall be present in person at any regular or special meeting of the Trustees in
order to constitute a quorum for the transaction of business at such meeting and
(except as otherwise required by law, the Declaration of Trust or these By-laws)
the act of a majority of the Trustees present at any such meeting, at which a
quorum is present, shall be the act of the Trustees. In the absence of a quorum,
a majority of the Trustees present may adjourn the meeting from time to time
until a quorum shall be present. Notice of an adjourned meeting need not be
given.
ARTICLE V
COMMITTEES
Section 1. Executive and Other Committees. The Trustees by vote of a
majority of all the Trustees may elect from their own number an Executive
Committee to consist of not less than three (3) members to hold office at the
pleasure of the Trustees, which shall have the power to conduct the current and
ordinary business of the Trust while the Trustees are not in session, including
the purchase and sale of securities and the designation of securities to be
delivered upon redemption of Shares of the Trust or a Series thereof, and such
other powers of the Trustees as the Trustees may delegate to them, from time to
time, except those powers which by law, the Declaration of Trust or these
By-laws they are prohibited from delegating. The Trustees may also elect from
their own number other Committees from time to time; the number composing such
Committees, the powers conferred upon the same (subject to the same limitations
as with respect to the Executive Committee) and the term of membership on such
Committees to be determined by the Trustees. The Trustees may designate a
chairman of any such Committee. In the absence of such designation the Committee
may elect its own Chairman.
Section 2. Meetings, Quorum and Manner of Acting. The Trustees may (1) provide
for stated meetings of any Committee, (2) specify the manner of calling and
notice required for special meetings of any Committee, (3) specify the number of
members of a Committee required to constitute a quorum and the number of members
of a Committee required to exercise specified powers delegated to such
Committee, (4) authorize the making of decisions to exercise specified powers by
written assent of the requisite number of members of a Committee without a
meeting, and (5) authorize the members of a Committee to meet by means of a
telephone conference circuit.
The Executive Committee shall keep regular minutes of its meetings and
records of decisions taken without a meeting and cause them to be recorded in a
book designated for that purpose and kept in the office of the Trust.
ARTICLE VI
OFFICERS
Section 1. General Provisions. The officers of the Trust shall be a
President, a Treasurer and a Secretary, who shall be elected by the Trustees.
The Trustees may elect or appoint such other officers or agents as the business
of the Trust may require, including one or more Vice Presidents, one or more
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Assistant Secretaries, and one or more Assistant Treasurers. The Trustees may
delegate to any officer or committee the power to appoint any subordinate
officers or agents.
Section 2. Term of Office and Qualifications. Except as otherwise
provided by law, the Declaration of Trust or these By-laws, the President, the
Treasurer, the Secretary and any other officer shall each hold office at the
pleasure of the Board of Trustees or until his successor shall have been duly
elected and qualified. Any two or more offices may be held by the same person.
Any officer may be but none need be a Trustee or Shareholder.
Section 3. Removal. The Trustees, at any regular or special meeting of
the Trustees, may remove any officer with or without cause, by a vote of a
majority of the Trustees then in office. Any officer or agent appointed by an
officer or committee may be removed with or without cause by such appointing
officer or committee.
Section 4. Powers and Duties of the Chairman. The Trustees may, but
need not, appoint from among their number a Chairman. When present he shall
preside at the meetings of the Shareholders and of the Trustees. He may call
meetings of the Trustees and of any committee thereof whenever he deems it
necessary. He shall be an executive officer of the Trust and shall have, with
the President, general supervision over the business and policies of the Trust,
subject to the limitations imposed upon the President, as provided in Section 5
of this Article VI.
Section 5. Powers and Duties of the President. The President may call
meetings of the Trustees and of any Committee thereof when he deems it necessary
and shall preside at all meetings of the Shareholders. Subject to the control of
the Trustees and to the control of any Committees of the Trustees, within their
respective spheres, as provided by the Trustees, he shall at all times exercise
a general supervision and direction over the affairs of the Trust. He shall have
the power to employ attorneys and counsel for the Trust or any Series or Class
thereof and to employ such subordinate officers, agents, clerks and employees as
he may find necessary to transact the business of the Trust or any Series or
Class thereof. He shall also have the power to grant, issue, execute or sign
such powers of attorney, proxies or other documents as may be deemed advisable
or necessary in furtherance of the interests of the Trust or any Series thereof.
The President shall have such other powers and duties, as from time to time may
be conferred upon or assigned to him by the Trustees.
Section 6. Powers and Duties of Vice Presidents. In the absence or
disability of the President, the Vice President or, if there be more than one
Vice President, any Vice President designated by the Trustees, shall perform all
the duties and may exercise any of the powers of the President, subject to the
control of the Trustees. Each Vice President shall perform such other duties as
may be assigned to him from time to time by the Trustees and the President.
Section 7. Powers and Duties of the Treasurer. The Treasurer shall be
the principal financial and accounting officer of the Trust. He shall deliver
all funds of the Trust or any Series or Class thereof which may come into his
hands to such Custodian as the Trustees may employ. He shall render a statement
of condition of the finances of the Trust or any Series or Class thereof to the
Trustees as often as they shall require the same and he shall in general perform
all the duties incident to the office of a Treasurer and such other duties as
from time to time may be assigned to him by the Trustees. The Treasurer shall
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give a bond for the faithful discharge of his duties, if required so to do by
the Trustees, in such sum and with such surety or sureties as the Trustees shall
require.
Section 8. Powers and Duties of the Secretary. The Secretary shall
keep the minutes of all meetings of the Trustees and of the Shareholders in
proper books provided for that purpose; he shall have custody of the seal of the
Trust; he shall have charge of the Share transfer books, lists and records
unless the same are in the charge of a transfer agent. He shall attend to the
giving and serving of all notices by the Trust in accordance with the provisions
of these By-laws and as required by law; and subject to these By-laws, he shall
in general perform all duties incident to the office of Secretary and such other
duties as from time to time may be assigned to him by the Trustees.
Section 9. Powers and Duties of Assistant Officers. In the absence or
disability of the Treasurer, any officer designated by the Trustees shall
perform all the duties, and may exercise any of the powers, of the Treasurer.
Each officer shall perform such other duties as from time to time may be
assigned to him by the Trustees. Each officer performing the duties and
exercising the powers of the Treasurer, if any, and any Assistant Treasurer,
shall give a bond for the faithful discharge of his duties, if required so to do
by the Trustees, in such sum and with such surety or sureties as the Trustees
shall require.
Section 10. Powers and Duties of Assistant Secretaries. In the absence
or disability of the Secretary, any Assistant Secretary designated by the
Trustees shall perform all the duties, and may exercise any of the powers, of
the Secretary. Each Assistant Secretary shall perform such other duties as from
time to time may be assigned to him by the Trustees.
Section 11. Compensation of Officers and Trustees and Members of the
Advisory Board. Subject to any applicable provisions of the Declaration of
Trust, the compensation of the officers and Trustees and members of an advisory
board shall be fixed from time to time by the Trustees or, in the case of
officers, by any Committee or officer upon whom such power may be conferred by
the Trustees. No officer shall be prevented from receiving such compensation as
such officer by reason of the fact that he is also a Trustee.
ARTICLE VII
FISCAL YEAR
The fiscal year of the Trust shall end on the last day of
________________ in each year, provided, however, that the Trustees may from
time to time change the fiscal year. The taxable year of each Series of the
Trust shall be as determined by the Trustees from time to time.
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ARTICLE VIII
SEAL
The Trustees may adopt a seal which shall be in such form and shall
have such inscription thereon as the Trustees may from time to time prescribe.
ARTICLE IX
SUFFICIENCY AND WAIVERS OF NOTICE
Whenever any notice whatever is required to be given by law, the
Declaration of Trust or these By-laws, a waiver thereof in writing, signed by
the person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto. A notice shall be deemed to
have been sent by mail, telegraph, cable, wireless, facsimile or other
electronic means for the purposes of these By-laws when it has been delivered to
a representative of any company holding itself out as capable of sending notice
by such means with instructions that it be so sent.
ARTICLE X
AMENDMENTS
These By-laws, or any of them, may be altered, amended or repealed, or
new By-laws may be adopted by (a) vote of a majority of the Outstanding Shares
voting in person or by proxy at a meeting of Shareholders and entitled to vote
or (b) by the Trustees, provided, however, that no By-law may be amended,
adopted or repealed by the Trustees if such amendment, adoption or repeal
requires, pursuant to law, the Declaration of Trust or these By-laws, a vote of
the Shareholders.
PRASAD SERIES TRUST - BY-LAWS
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EXHIBIT NO. 5
INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENT
_______________, 1998
Mutual Funds Leader, Inc.
821 Hillside Drive
Long Beach, CA 90815
Dear Sirs:
Prasad Series Trust, a Delaware business trust (the "Trust"), herewith
confirms its agreement with you ("MFL") as follows:
The Trust desires to employ its capital by investing and reinvesting
the same in investments of the type and in accordance with the limitations
specified in its Prospectus as from time to time in effect, copies of which have
been or will be submitted to MFL, and in such manner and to such extent as may
from time to time be approved by the Board of Trustees of the Trust. The Trust
desires to employ MFL to act as the investment adviser and administrator for its
investment portfolio Prasad Growth Fund (the "Fund").
Subject to the supervision and approval of the Board of Trustees, MFL
will provide investment management of the Fund's portfolio in accordance with
the Fund's investment objective and policies as stated in its most recent
Prospectus delivered to MFL, upon which MFL shall be entitled to rely. In
connection therewith, MFL will provide investment research and supervision of
the Fund's investments and conduct a continuous program of investment,
evaluation and, if appropriate, sale and reinvestment of the Fund's assets. MFL
will furnish to the Trust such statistical information with respect to the
investments which the Fund may hold or contemplate purchasing as the Trust may
reasonably request. The Board wishes to be kept in touch with important
developments materially affecting its portfolio and shall expect MFL, on its own
initiative, to furnish to the Board from time to time such information as MFL
may believe appropriate for this purpose.
In providing investment management services to the Trust, MFL shall
give primary consideration to securing the most favorable price and efficient
execution. In so doing, MFL may consider the financial responsibility, research
and investment information and other services provided by brokers or dealers who
may effect or be a party to any such transaction or other transactions to which
other clients of MFL may be a party. The Trust recognizes that it is desirable
that MFL have access to supplemental investment and market research and security
and economic analyses provided by brokers and that such brokers may execute
brokerage transactions at a higher cost to the Trust than may result when
allocating brokerage to other brokers on the basis of seeking the most
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favorable price and efficient execution. Therefore, MFL is authorized to pay
higher brokerage commissions for the purchase and sale of securities for the
Fund to brokers who provide such research and analyses, subject to review by the
Board of Trustees from time to time with respect to the extent and continuation
of this practice. It is understood that the services provided by such brokers
may be useful to MFL in connection with its services to other clients.
On occasions when MFL deems the purchase or sale of a security to be
in the best interest of the Fund as well as other clients, MFL, to the extent
permitted by applicable laws and regulations, may aggregate the securities to be
sold or purchased in order to obtain the most favorable price or lower brokerage
commissions and efficient execution. In such event, allocation of the securities
so purchased or sold, as well as the expenses incurred in the transaction, will
be made by MFL in the manner it considers to be the most equitable and
consistent with its fiduciary obligations to the Fund and to such other clients.
MFL shall maintain such office facilities and administrative services
necessary to perform its duties under this Agreement. In addition, MFL will
prepare and file various returns, reports and registrations required by Federal
and state law and respond to shareholder communications. Subject to the
direction of the Board of Trustees, MFL shall be responsible for the overall
management of the business affairs of the Trust.
MFL shall exercise its best judgment in rendering to the Trust the
services described above and the Trust agrees as an inducement to MFL's
undertaking the same that MFL shall not be liable hereunder for any mistake of
judgment or in any other event whatsoever, provided that nothing herein shall be
deemed to protect or purport to protect MFL against any liability to the Trust
or to its security holders to which MFL would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties hereunder, or by reason of MFL's reckless disregard of its obligations
and duties hereunder.
MFL shall, at its own expense, maintain such staff and employ or
retain such personnel and consult with such other persons as it shall from time
to time determine to be necessary or useful to the performance of its
obligations under this Agreement. Without limiting the generality of the
foregoing, the staff and personnel of MFL shall be deemed to include persons
employed or otherwise retained by MFL to furnish statistical and other factual
data, advice regarding economic factors and trends, information with respect to
technical and scientific developments, and such other information, advice and
assistance as MFL may desire. MFL shall, as agent for the Trust, maintain the
Trust's records and books of account (other than those maintained by the Fund's
transfer agent, registrar, custodian and other agencies), including records of
portfolio transactions. All such books and records so maintained shall be the
property of each Fund and, upon request therefore, MFL shall surrender to such
Fund such of the books and records so requested.
MFL shall bear the cost of rendering the investment management,
supervisory and administrative services to be performed by it under this
Agreement, and shall, at its own expense, pay the compensation of the officers
and employees, if any, of the Trust who are employees of MFL. The Trust shall
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bear all other expenses to be incurred in the operation of the Trust, including
charges and expenses of any registrar, custodian, stock transfer and dividend
disbursing agent; brokerage commissions; taxes; engraving and printing stock
certificates, if any; registration costs of the Trust and its shares under
Federal and state securities laws; the cost and expense of printing and
distributing prospectuses to the Trust's shareholders; all expenses of
shareholders' and trustees' meetings and of preparing, printing and mailing
proxy statements and reports to shareholders; fees and travel expenses of
trustees' or members of any advisory board or committee who are not employees of
MFL or any corporate affiliate of MFL; all expenses incident to any dividend,
withdrawal or redemption options; charges and expenses of any outside service
used for pricing of each Fund's portfolio securities; fees and expenses of legal
counsel, including counsel to the trustees who are not interested persons of the
Trust or of MFL and independent accountants; membership dues of industry
associations; interest on Fund borrowings; postage; liability insurance premiums
on property or personnel (including officers and trustees) of the Trust which
inure to their benefit; and extraordinary expenses (including, but not limited
to, legal claims and liabilities and litigation costs and any indemnification
relating thereto).
In consideration of services rendered pursuant to this Agreement, the
Trust will pay MFL on the first business day of each month a fee at the annual
rate of one percent (1%) of the average value of each Fund's daily net assets.
Net asset value shall be computed at least once each business day. The fee for
the period from the date the initial registration statement of the Fund is
declared effective by the Securities and Exchange Commission to the end of the
month during which such initial registration shall have been declared effective
by the Securities and Exchange Commission shall be prorated according to the
proportion which such period bears to the full monthly period, and upon any
termination of this Agreement before the end of any month, such fee for such
part of a month shall be prorated according to the proportion which such period
bears to the full monthly period and shall be payable upon the date of
termination of this Agreement. For the purpose of determining fees payable to
MFL, the value of each Fund's net assets shall be computed in the manner
specified in such Fund's Prospectus for the computation of the value of such net
assets.
The Trust understands that MFL now acts and will continue to act as
investment adviser to various fiduciary or other managed accounts, and the Trust
has no objection to MFL's so acting. In addition, it is understood that the
persons employed by MFL to assist in the performance of its duties hereunder
will not devote their full time to such service and nothing contained herein
shall be deemed to limit or restrict the right of MFL or any affiliate of MFL to
engage in and devote time and attention to other businesses or to render
services of whatever kind or nature.
The Trust understands that MFL now acts and may in the future act as
investment adviser to one or more other investment companies, and the Trust has
no objection to MFL's so acting, provided that when two or more companies
managed by MFL have available funds for investment in money market instruments,
available money market investments will be allocated in accordance with a
formula believed to be equitable to each company. It is recognized that in some
cases this procedure may adversely affect the size of the position obtainable
for the Funds.
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MFL shall not be liable for any error of judgment or mistake of law or
for any loss suffered by any Fund in connection with the matters to which this
Agreement relates, except for a loss resulting from willful misfeasance, bad
faith or gross negligence on its part in the performance of its duties or from
reckless disregard by it of its obligations and duties under this Agreement. Any
person, even though also an officer, partner, employee, or agent of MFL who may
be or become an officer, trustee, employee or agent of the Trust, shall be
deemed, when rendering services to the Trust or acting on any business of the
Trust, to be rendering such services to, or acting solely for, the Fund and not
as an officer, partner, employee, or agent or one under the control or direction
of MFL even though paid by it.
This Agreement shall become effective on the date hereof and shall
continue in force for a period of two (2) years and from year to year
thereafter, provided such continuance is specifically approved at least annually
by (i) the Board of Trustees or (ii) as to any Fund, by a vote of a majority (as
defined in the Investment Company Act of 1940, as amended) of such Fund's
outstanding voting securities; provided that in either event the continuance is
also approved by a majority of the Trustees who are not "interested persons" (as
defined in said Act) of any party to this Agreement, by vote cast in person at a
meeting called for the purpose of voting on such approval. This Agreement is
terminable without penalty, at any time by (i) the Board of Trustees or (ii) as
to any Fund, by vote of holders of a majority of such Fund's shares or by (iii)
MFL. This Agreement will also terminate automatically in the event of its
assignment (as defined in said Act).
Pursuant to the Trust's Agreement and Declaration of Trust dated July
31, 1998, neither the Trustees, shareholders, officers, employees or agents of
the Trust shall be personally liable upon, nor shall resort be had to their
private property for the satisfaction of, any obligations of the Trust
hereunder, and MFL shall look solely to the property of the Trust for the
satisfaction of any claim hereunder.
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If the foregoing is in accordance with your understanding, kindly so
indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
PRASAD SERIES TRUST
By:______________________________
Accepted: Rajendra Prasad, Chairman
MUTUAL FUNDS LEADER, INC.
By:______________________________
Rajendra Prasad, President
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EXHIBIT NO. 9(a)
ADMINISTRATION AGREEMENT
THIS AGREEMENT is made and entered into this 31st day of July, 1998,
by and between Prasad Series Trust, a Delaware business trust (the "Fund"), and
Maxus Information Systems, Inc., an Ohio corporation ("MIS").
RECITALS:
A. The Fund is a diversified, open-end management investment company
registered with the United States Securities and Exchange Commission under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
B. The Fund desires to appoint MIS as its transfer agent and dividend
disbursing and redemption agent, and MIS desires to accept such appointment.
AGREEMENTS:
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereby agree as follows:
1. DUTIES OF MIS.
1.01 Subject to the terms and conditions set forth in this Agreement,
the Fund hereby employs and appoints MIS to act, and MIS agrees to act, as
transfer agent for the Fund's authorized and issued shares of each Series of the
Fund (the "Shares), and as dividend disbursing and redemption agent for the
Fund.
1.02 MIS agrees that it will perform the following services:
(a) In accordance with procedures established from time to
time by agreement between the Fund and MIS, MIS shall:
(i) Receive for acceptance, orders for the purchase of
Shares, and promptly deliver payment and appropriate
documentation therefore to the Custodian of the Fund
authorized by the Board of Directors of the Fund (the
"Custodian");
(ii) Pursuant to purchase orders, issue the appropriate
number of Shares and hold such Shares in the appropriate
Shareholder account;
(iii) Receive for acceptance redemption requests and
redemption directions and deliver the appropriate
documentation therefore to the Custodian;
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(iv) At the appropriate time as and when it receives
monies paid to it by the Custodian with respect to any
redemption, pay over or cause to be paid over in the
appropriate manner such monies as instructed by the redeeming
Shareholders;
(v) Effect transfers of Shares by the registered owners
thereof upon receipt of appropriate instructions;
(vi) Prepare and transmit payments for dividends and
distributions declared by the Fund;
(vii) Maintain records of account for and advise the Fund
and its Shareholders as to the foregoing; and
(viii) Record the issuance of shares of the Fund and
maintain pursuant to SEC Rule 17Ad-10(e) a record of the
total number of shares of the Fund which are authorized,
based upon data provided to it by the Fund, and issued and
outstanding. MIS shall also provide the Fund on a regular
basis with the total number of shares which are authorized
and issued and outstanding and shall have no obligation, when
recording the issuance of shares, to monitor the issuance of
such shares or to take cognizance of any laws relating to the
issue or sale of such shares, which functions shall be the
sole responsibility of the Fund.
(b) In addition, MIS shall perform all of the customary
services of a transfer agent, dividend disbursing and redemption
agent, including but not limited to: maintaining all Shareholder
accounts, preparing Shareholder meeting lists, mailing proxies,
receiving and tabulating proxies, mailing Shareholder reports and
prospectuses to current Shareholders, withholding taxes on U.S.
resident and non-resident alien accounts, preparing and filing U.S.
Treasury Department Forms 1099 and other appropriate forms required
with respect to dividends and distributions by federal authorities for
all Shareholders, preparing and mailing confirmation forms and
statements of account to Shareholders for all purchases and
redemptions of Shares and other confirmable transactions in
Shareholder accounts, preparing and mailing activity statements for
Shareholders, and providing Shareholder account information and
provide a system and reports which will enable the Fund to monitor the
total number of Shares sold in each State.
Procedures applicable to certain of these services may be established
from time to time by agreement between the Fund and MIS.
2. FEES AND EXPENSES
2.01 In consideration of the services to be performed by MIS pursuant
to this Agreement, the Fund agrees to pay MIS the fees set forth in the fee
schedule attached hereto as Exhibit "A".
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2.02 In addition to the fee paid under Section 2.01 above, the Fund
agrees to reimburse MIS for out-of-pocket expenses or advances incurred by MIS
in connection with the performance of its obligations under this Agreement. In
addition, any other expenses incurred by MIS at the request or with the consent
of the Fund will be reimbursed by the Fund.
2.03 The Fund agrees to pay all fees and reimbursable expenses within
five days following the receipt of the respective billing notice. Postage for
mailing of dividends, proxies, Fund reports and other mailings to all
shareholder accounts shall be advanced to MIS by the Fund at least seven days
prior to the mailing date of such materials.
3. REPRESENTATIONS AND WARRANTIES OF MIS
MIS represents and warrants to the Fund that:
3.01 It is a corporation duly organized and existing and in good
standing under the laws of the State of Ohio.
3.02 It is duly qualified to carry on its business in the State of
Ohio.
3.03 It is empowered under applicable laws and by its charter and
by-laws to enter into and perform this Agreement.
3.04 All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement.
3.05 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.
3.06 MIS is duly registered as a transfer agent under the Securities
Act of 1934 and shall continue to be registered throughout the remainder of this
Agreement.
4. REPRESENTATIONS AND WARRANTIES OF The Fund
The Fund represents and warrants to MIS that:
4.01 It is a business trust duly organized and existing and in good
standing under the laws of Delaware.
4.02 It is empowered under applicable laws and by its Declaration of
Trust and By-Laws to enter into and perform this Agreement.
4.03 All corporate proceedings required by said Declaration of Trust
and By-Laws have been taken to authorize it to enter into and perform this
Agreement.
4.04 It is an open-end and diversified management investment company
registered under the 1940 Act.
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4.05 A registration statement under the Securities Act of 1933 is
currently or will become effective and will remain effective, and appropriate
state securities law filings as required, have been or will be made and will
continue to be made, with respect to all Shares of the Fund being offered for
sale.
5. INDEMNIFICATION
5.01 MIS shall not be responsible for, and the Fund shall indemnify
and hold MIS harmless from and against, any and all losses, damages, costs,
charges, counsel fees, payments, expenses and liability arising out of or
attributable to:
(a) All actions of MIS or its agents or subcontractors
required to be taken pursuant to this Agreement, provided that such
actions are taken in good faith and without gross negligence or
willful misconduct.
(b) The Fund's refusal or failure to comply with the terms of
this Agreement, or which arise out of the Fund's lack good faith,
gross negligence or willful misconduct or which arise out of the
breach of any representation or warranty of the Fund hereunder.
(c) The reliance on or use by MIS or its agents or
subcontractors of information, records and documents which (i) are
received by MIS or its agents or subcontractors and furnished to it by
or on behalf of the Fund, and (ii) have been prepared and/or
maintained by the Fund or any other person or firm on behalf of the
Fund.
(d) The reliance on, or the carrying out by MIS or its agents
or subcontractors of, any instructions or requests of the Fund.
(e) The offer or sale of Shares in violation of any
requirement under the federal securities laws or regulations or the
securities laws or regulations of any state that such Shares be
registered in such state or in violation of any stop order or other
determination or ruling by any federal agency or any state with
respect to the offer or sale of such Shares in such state.
5.02 MIS shall indemnify and hold the Fund harmless from and against
any and all losses, damages, costs, charges, counsel fees, payments, expenses
and liability arising out of or attributable to any action or failure or
omission to act by MIS as a result of MIS's lack of good faith, gross negligence
or willful misconduct.
5.03 At any time MIS may apply to any officer of the Fund for
instructions, and may consult with legal counsel with respect to any matter
arising in connection with the services to be performed by MIS under this
Agreement, and MIS and its agents or subcontractors shall not be liable and
shall be indemnified by the Fund for any action taken or omitted by it in
reliance upon such instructions or upon the opinion of such counsel. MIS, its
agents and subcontractors shall be protected and indemnified in acting upon any
paper or document furnished by or on behalf of the Fund, reasonably believed to
be genuine and to have been signed by the proper person or persons, or upon any
instruction, information, data, records or documents provided MIS or its agents
or subcontractors by machine readable input, telex, CRT data entry or other
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similar means authorized by the Fund, and shall not be held to have notice of
any change of authority of any person, until receipt of written notice thereof
from the Fund. MIS, its agents and subcontractors shall also be protected and
indemnified in recognizing stock certificates which are reasonably believed to
bear the proper manual or facsimile signatures of the officers of the Fund, and
the proper countersignature of any former transfer agent or registrar, or of a
co-transfer agent or co-registrar.
5.04 In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable for damages to the
other for any damages resulting from such failure to perform or otherwise from
such causes.
5.05 Neither party to this Agreement shall be liable to the other
party for consequential damages under any provision of this Agreement or for any
act or failure to act hereunder.
5.06 Upon the assertion of a claim for which either party may be
required to indemnify the other, the party of seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The party
who may be required to indemnify shall have the option to participate with the
party seeking indemnification the defense of such claim. The party seeking
indemnification shall in no case confess any claim or make any compromise in any
case in which the other party may be required to indemnify it except with the
other party's prior written consent.
6. COVENANTS OF THE FUND AND MIS
6.01 The Fund shall promptly furnish to MIS a certified copy of the
resolution of the Board of Directors of the Fund authorizing the appointment of
MIS and the execution and delivery of this Agreement.
6.02 MIS hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Fund for safekeeping of stock
certificates, check forms and facsimile signature imprinting devices, if any;
and for the preparation or use, and for keeping account of, such certificates,
forms and devices.
6.03 MIS shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable. To the extent
required by Section 31 of the 1940 Act, as amended, and the Rules thereunder,
MIS agrees that all such records prepared or maintained by MIS relating to the
services to be performed by MIS hereunder are the property of the Fund and will
be preserved, maintained and made available in accordance with such Section and
Rules, and will be surrendered promptly to the Fund on and in accordance with
its request.
6.04 MIS and the Fund agree that all books, records, information and
data pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this Agreement shall
remain confidential, and shall not be voluntarily disclosed to any other person,
except as may be required by law.
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6.05 In case of any requests or demands for the inspection of the
Shareholder records of the Fund, MIS will endeavor to notify the Fund and to
secure instructions from an authorized officer of the Fund as to such
inspection. MIS reserves the right, however, to exhibit the Shareholder records
to any person whenever it is advised by its counsel that it may be held liable
for the failure to exhibit the Shareholder records to such person, and shall
promptly notify the Fund of any unusual request to inspect or copy the
shareholder records of the Fund or the receipt of any other unusual request to
inspect, copy or produce the records of the Fund.
7. TERM OF AGREEMENT
7.01 This Agreement shall become effective as of the date hereof and
shall remain in force for a period of three years; provided, however, that each
party to this Agreement have the option to terminate the Agreement without
penalty, upon 90 days prior written notice.
7.02 Should the Fund exercise its right to terminate, all
out-of-pocket expenses associated with the movement of records and material will
be borne by the Fund. Additionally, MIS reserves the right to charge for any
other reasonable expenses associated with such termination.
8. MISCELLANEOUS
8.01 Neither this Agreement nor any rights or obligations hereunder
may be assigned by eithero party without the written consent of the other party.
This Agreement shall inure to the benefit of and be binding upon the parties and
their respective permitted successors and assigns.
8.02 This Agreement may be amended or modified by a written agreement
executed by both parties and authorized or approved by a resolution of the Board
of Trustees of the Fund.
8.03 The provisions of this Agreement shall be construed and
interpreted in accordance with the laws of the State of Ohio as at the time in
effect and the applicable provisions of the 1940 Act. To the extent that the
applicable law of the State of Ohio, or any of the provisions here in, conflict
with the applicable provisions of the 1940 Act, the latter shall control.
8.04 This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
matter hereof whether oral or written.
8.05 All notices and other communications hereunder shall be in
writing, shall be deemed to have been given when received or when sent by telex
or facsimile, and shall be given to the following addresses (or such other
addresses as to which notice is given):
To the Fund: To MIS:
Prasad Series Trust Maxus Information Systems, Inc.
821 Hillside Drive The Tower at Erieview, 36th Floor
Long Beach, CA 90815 1301 East Ninth Street
Cleveland, OH 44114
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8.06 All persons contracting with or having any claim against the Fund
or a particular series of the Fund shall look only to the assets of all series
or such particular series for payment under such contract or claim; and to
neither the Trustees nor, when acting in such capacity, any of the Fund's
officers, employees or agents, whether past, present or future, shall be
personally liable therefor.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
PRASAD SERIES TRUST MAXUS INFORMATION SYSTEMS,
INC.
By: /s/ Rajendra Prasad By: /s/ Gregory B. Getts
Rajendra Prasad
President Its: President
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EXHIBIT "A"
FEE SCHEDULE
The following fees will be paid in respect of each Series of the Fund:
$9.25 shareholder account per annum, payable monthly, subject to a
$775 minimum per month.*
plus:
$12.00 per month for each state in which a Series is registered under
the blue sky laws of such state.*
- ------------------
*Notwithstanding the foregoing, the above amounts will be discounted by the
following percentages depending on the size of the Series:
Discount Net assets of Series
65% 0 - 1,000,000
60% 1,000,000 - 1,500,000
50% 1,500,000 - 2,000,000
45% 2,000,000 - 3,000,000
40% 3,000,000 - 4,000,000
35% 4,000,000 - 5,000,000
30% 5,000,000 - 6,000,000
25% 6,000,000 - 7,000,000
20% 7,000,000 - 8,000,000
15% 8,000,000 - 9,000,000
10% 9,000,000 - 10,000,000
5% 10,000,000 - 11,000,000
0% 11,000,000 -
<PAGE>
EXHIBIT NO. 9(b)
ACCOUNTING SERVICES AGREEMENT
THIS AGREEMENT is made and entered into this 31st day of July, 1998,
by and between Prasad Series Trust, a Delaware business trust (the "Fund"), and
Maxus Information Systems, Inc., an Ohio corporation ("MIS").
RECITALS:
A. The Fund is a diversified, open-end management investment company
registered with the United States Securities and Exchange Commission under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
B. MIS is a corporation experienced in providing accounting services
to mutual funds and possesses facilities sufficient to provide such services;
and
C. The Fund desires to avail itself of the experience, assistance and
facilities of MIS and to have MIS perform the Fund certain services appropriate
to the operations of the Fund, and MIS is willing to furnish such services in
accordance with the terms hereinafter set forth.
AGREEMENTS:
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereby agree as follows:
1. DUTIES OF MIS.
MIS will provide the Fund with the necessary office space,
communication facilities and personnel to perform the following services for the
Fund:
(a) Timely calculate and transmit to NASDAQ the daily net
asset value of each Series of the Fund, and communicate such value to
the Fund and its transfer agent;
(b) Maintain and keep current all books and records of the
Fund as required by Rule 31a-1 under the 1940 Act, as such rule or any
successor rule may be amended from time to time ("Rule 31a-1"), that
are applicable to the fulfillment of MIS's duties hereunder, as well
as any other documents necessary or advisable for compliance with
applicable regulations as may be mutually agreed to between the Fund
and MIS. Without limiting the generality of the foregoing, MIS will
prepare and maintain the following records upon receipt of information
in proper form from the Fund or its authorized agents:
o Cash receipts journal
o Cash disbursements journal
o Dividend record
o Purchase and sales - portfolio securities
journals
o Subscription and redemption journals
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o Security ledgers
o Broker ledger
o General ledger
o Daily expense accruals
o Daily income accruals
o Securities and monies borrowed or loaned
and collateral therefore
o Foreign currency journals
o Trial balances
(c) Provide the Fund and its investment adviser with daily
portfolio valuation, net asset value calculation and other standard
operational reports as requested from time to time.
(d) Provide all raw data available from its fund accounting
system for the preparation by the Fund or its investment advisor of
the following:
1. Semi-annual financial statements; 2. Semi-annual
form N-SAR; 3. Annual tax returns; 4. Financial data
necessary to update form N-1A; 5. Annual proxy
statement.
(e) Provide facilities to accommodate annual audit and any
audits or examinations conducted by the Securities and Exchange
Commission or any other governmental or quasi-governmental entities
with jurisdiction.
MIS shall for all purposes herein be deemed to be an independent contractor and
shall, unless otherwise expressly provided or authorized, have no authority to
act for or represent the Fund in any way or otherwise be deemed an agent of the
Fund.
2. FEES AND EXPENSES.
(a) In consideration of the services to be performed by MIS
pursuant to this Agreement, the Fund agrees to pay MIS the fees set
forth in the fee schedule attached hereto as Exhibit A.
(b) In addition to the fees paid under paragraph (a) above,
the Fund agrees to reimburse MIS for out-of-pocket expenses or
advances incurred by MIS in connection with the performance of its
obligations under this Agreement. In addition, any other expenses
incurred by MIS at the request or with the consent of the Fund will be
reimbursed by the Fund.
(c) The Fund agrees to pay all fees and reimburseable
expenses within five days following the receipt of the respective
billing notice.
3. LIMITATION OF LIABILITY OF MIS.
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(a) MIS shall be held to the exercise of reasonable care in
carrying out the provisions of the Agreement, but shall not be liable
to the Fund for any action taken or omitted by it in good faith
without gross negligence, bad faith, willful misconduct or reckless
disregard of its duties hereunder. It shall be entitled to rely upon
and may act upon the accounting records and reports generated by the
Fund, advice of the Fund, or of counsel for the Fund and upon
statements of the Fund's independent accountants, and shall not be
liable for any action reasonably taken or omitted pursuant to such
records and reports or advice, provided that such action is not, to
the knowledge of MIS, in violation of applicable federal or state laws
or regulations, and provided further that such action is taken without
gross negligence, bad faith, willful misconduct or reckless disregard
of its duties.
(b) Nothing herein contained shall be construed to protect
MIS against any liability to the Fund to which MIS shall otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence
in the performance of its duties to the Fund, reckless disregard of
its obligations and duties under this Agreement or the willful
violation of any applicable law.
(c) Except as may otherwise be provided by applicable law,
neither MIS nor its stockholders, officers, directors, employees or
agents shall be subject to, and the Fund shall indemnify and hold such
persons harmless from and against, any liability for and any damages,
expenses or losses incurred by reason of the inaccuracy of information
furnished to MIS by the Fund or its authorized agents.
4. REPORTS.
(a) The Fund shall provide to MIS on a quarterly basis a
report of a duly authorized officer of the Fund representing that all
information furnished to MIS during the preceding quarter was true,
complete and correct in all material respects. MIS shall not be
responsible for the accuracy of any information furnished to it by the
Fund or its authorized agents, and the Fund shall hold MIS harmless in
regard to any liability incurred by reason of the inaccuracy of such
information.
(b) Whenever, in the course of performing its duties under
this Agreement, MIS determines, on the basis of information supplied
to MIS by the Fund or its authorized agents, that a violation of
applicable law has occurred or that, to its knowledge, a possible
violation of applicable law may have occurred or, with the passage of
time, would occur, MIS shall promptly notify the Fund and its counsel
of such violation.
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5. ACTIVITIES OF MIS.
The services of MIS under this Agreement are not to be deemed
exclusive, and MIS shall be free to render similar services to others so long as
its services hereunder are not impaired thereby.
6. ACCOUNTS AND RECORDS.
The accounts and records maintained by MIS shall be the property of
the Fund, and shall be surrendered to the Fund promptly upon request by the Fund
in the form in which such accounts and records have been maintained or
preserved. MIS agrees to maintain a back-up set of accounts and records of the
Fund (which back-up set shall be updated on at least a weekly basis) at a
location other than that where the original accounts and records are stored. MIS
shall assist the Fund's independent auditors, or, upon approval of the Fund, any
regulatory body, in any requested review of the Fund's accounts and records. MIS
shall preserve the accounts and records as they are required to be maintained
and preserved by Rule 31a-1.
7. CONFIDENTIALITY.
MIS agrees that it will, on behalf of itself and its officers and
employees, treat all transactions contemplated by this Agreement, and all other
information germane thereto, as confidential and not to be disclosed to any
person except as may be authorized by the Fund.
8. TERM OF AGREEMENT.
(a) This Agreement shall become effective as of the date hereof and
shall remain in force for a period of three years; provided, however, that each
party to this Agreement have the option to terminate the Agreement, without
penalty, upon 90 days prior written notice.
(b) Should the Fund exercise its right to terminate, all out-of-pocket
expenses associated with the movements of records and material will be borne by
the Fund. Additionally, MIS reserves the right to charge for any other
reasonable expenses associated with such termination.
9. MISCELLANEOUS.
(a) Neither this Agreement nor any rights or obligations hereunder may
be assigned by either party without the written consent of the other party. This
Agreement shall inure to the benefit of and be binding upon the parties and
their respective permitted successors and assigns.
(b) The provisions of this Agreement shall be construed and
interpreted in accordance with the laws of the State of Ohio as at the time in
effect and the applicable provisions of the 1940 Act. To the extent that the
applicable law of the State of Ohio, or any of the provisions herein, conflict
with the applicable provisions of the 1940 Act, the latter shall control.
(c) This Agreement may be amended by the parties hereto only if such
amendment is in writing and signed by both parties.
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(d) This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
matter hereof whether oral or written.
(e) All notices and other communications hereunder shall be in
writing, shall be deemed to have been given when received or when sent by telex
or facsimile, and shall be given to the following addresses (or such other
addresses as to which notice is given):
To the Fund: To MIS:
Prasad Series Trust Maxus Information Systems, Inc.
821 Hillside Drive The Tower at Erieview, 36th Floor
Long Beach, CA 90815 1301 East Ninth Street
Cleveland, Ohio 44114
(f) All persons contracting with or having any claim against the Fund
or a particular series of the Fund shall look only to the assets of all series
or such particular series for payment under such contract or claim; and to
neither the Trustees nor, when acting in such capacity, any of the Fund's
officers, employees or agents, whether past, present or future, shall be
personally liable therefor.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
PRASAD SERIES TRUST MAXUS INFORMATION SYSTEMS,
INC.
By: /s/ Rajendra Prasad By: /s/ Gregory B. Getts
Rajendra Prasad,
President Its: President
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EXHIBIT A
FEE SCHEDULE
The following fees will be paid in respect of each Series of the Fund:
If average value of Series is
between the following Yearly Fee Monthly Fee
- --------------------- ---------- -----------
- 25,000,000 21,000 1,750
25,000,000 - 50,000,000 30,500 2,542
50,000,000 - 75,000,000 36,250 3,021
75,000,000 - 100,000,000 42,000 3,500
100,000,000 - 125,000,000 47,750 3,979
125,000,000 - 150,000,000 53,500 4,458
150,000,000 - 59,250 4,938
*Notwithstanding the foregoing, the above amounts will be discounted by the
following percentages depending on the size of the Series:
Discount Net assets of Series
65% 0 - 1,000,000
60% 1,000,000 - 1,500,000
50% 1,500,000 - 2,000,000
45% 2,000,000 - 3,000,000
40% 3,000,000 - 4,000,000
35% 4,000,000 - 5,000,000
30% 5,000,000 - 6,000,000
25% 6,000,000 - 7,000,000
20% 7,000,000 - 8,000,000
15% 8,000,000 - 9,000,000
10% 9,000,000 - 10,000,000
5% 10,000,000 - 11,000,000
0% 11,000,000 -
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