SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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. __ [_]
OTI TRUST
(Exact name of registrant as specified in charter)
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
Richard A. Barone, The Tower at Erieview, 36th Floor, 1301 East Ninth Street,
Cleveland, Ohio 44114-1800
(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
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.
<PAGE>
OTI SPECIAL OPPORTUNITIES FUND The Tower at Erieview, 36th Floor
1301 East Ninth Street
Cleveland, Ohio 44114
(216) 687-1000
OTI Special Opportunities Fund (the "Fund") is a diversified portfolio of OTI
Trust, an open-end management investment company (the "Trust").
The Fund has an investment objective of obtaining capital appreciation. Under
normal circumstances, at least 80% of the value of this Fund's total assets
(other than money market investments) will consist of equity securities.
By this Prospectus, the Fund is offering Investor Shares and Institutional
Shares. Investor Shares are offered to the general public. Institutional
Shares are offered to certain institutions and other specified investors. See
"How to Purchase Shares." Investor Shares and Institutional Shares are
identical, except as to minimum investment requirements and the services offered
to and expenses borne by each class.
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 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 REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PROSPECTUS/October __, 1998
Investors are advised to read this Prospectus and to retain it for future
reference.
<PAGE>
HIGHLIGHTS
Investment Objective. The Fund is a diversified fund. 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."
Sales Charge. The Fund sells and redeems its shares at net asset value without
any front-end sales charges or redemption charges. Investor Shares of the Fund
are subject to a plan for using as much as .60% of net assets annually to aid
the distribution of its shares. See "Distribution Plan (Investor Shares Only)."
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. For Investor Shares, the minimum initial investment is
$1,000, with subsequent minimum investments of $100. For Institutional Shares,
the minimum initial investment is $1,000,000, with subsequent minimum
investments of $10,000. 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
in the case of Investor Shares or $1,000,000 in the case of Institutional
Shares. 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. Maxus Asset Management Inc. ("MAM" or the "Adviser") is the
investment adviser for the Fund. Its annual fee is 1% of the Fund's average
daily net assets. This fee is higher than that paid by most other investment
companies. Since 1976 MAM has been an investment adviser to individuals,
retirement plans, corporations and foundations. MAM is controlled by
Richard A. Barone, Chairman of the Fund. See "Investment Management."
Sub-Adviser. The Fund's Sub-Adviser is Morton H. Sachs & Company. The Sub-
Adviser obtains and performs fundamental research, performs analysis and makes
recommendations to the Adviser with respect to the purchase or sale of specific
investments. The Adviser pays the Sub-Adviser a sub-advisory fee at the rate of
.50% of the Fund's average daily net assets. See "Investment Management."
Distributor. Shares of the Fund are offered by Maxus Securities Corp ("MSC")
and by the Sub-Adviser, each an NASD broker-dealer, on a best efforts basis. MSC
is controlled by Richard A. Barone, Chairman of the Trust. See "Other
Information Concerning Purchase of Shares" and "Distribution Plan (Investor
Shares Only)."
Risk Factors. The Fund is not intended to provide a balanced investment program
to meet all requirements of every investor. The prices of equity securities
fluctuate based on changes in a company's activities and financial condition and
in overall market and financial conditions.
<PAGE>
The Fund is expected to have a high rate of portfolio turnover relative to
other mutual funds, which may result in the Fund paying more brokerage
commissions and having higher amounts of realized investment gain subject to the
payment of taxes by shareholders. See "Risks and Other Considerations."
FEE TABLE
Annual Fund Operating Expenses (as a percentage of average net assets)
Investor Institutional
Class Class
Management Fees 1.00% 1.00%
12b-1 Fees 0.60% 0.00%
Other Expenses* 1.25% 1.25%
Total Fund Operating
Expenses* 2.85% 2.25%
* Based on estimated expenses for the current fiscal year.
The 12b-1 fee in the foregoing table is an asset-based sales charge as
defined in the Rules of Fair Practice of the National Association of Securities
Dealers (the "Rules"). The existence of this charge may cause long-term
shareholders to pay more in total sales charges than the economic equivalent of
the maximum front-end sales charges permitted under those Rules.
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 $10.00 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 Investor Shares of
the Fund, assuming (1) 5% annual return
and (2) redemption at the end of each
time period: $29 $88
Example 1 year 3 years
You would pay the following expenses on
a $1,000 investment in Institutional Shares of
the Fund, assuming (1) 5% annual return and
(2) redemption at the end of each time period: $23 $70
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.
<PAGE>
INVESTMENT OBJECTIVE AND MANAGEMENT TECHNIQUES
The investment objective of the Fund 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.
In seeking its objective, under normal conditions, the Fund will invest at
least 80% of its total assets (other than "money market investments" as defined
below) in equity securities. Equity securities are common stocks and preferred
stocks and securities convertible or exchangeable into common stocks or
preferred stocks. The Fund seeks to maximize long-term capital appreciation by
investing in equity securities that represent excellent value in relation to
companies' cash-generating ability, assets, and perceived future earning power.
The Fund uses a "bottom-up" selection process that is based on fundamental
research and early trend analysis. A proprietary stock price indicator that
provides information which is valuable in determining the most probable future
price movements for each stock or industry group is incorporated within this
value oriented investment discipline and is used to select those equity
investments which are most likely to appreciate within a relevant time period.
Under normal conditions, the Fund also may invest up to 20% of its total
assets in cash, high-quality commercial paper (i.e., rated A-1 or A-2 by
Standard & Poor's) and other money market instruments (collectively, "money
market investments"), investment grade corporate debt securities (i.e., rated
BBB or better by Standard & Poor's), U.S. Government Securities and U.S.
Government agency securities. In addition, when the Adviser believes that
market conditions warrant a temporary defensive posture, the Fund may invest
without limitation in money market investments. Please refer to Appendix A for
a description of these ratings.
The Fund is not restricted with regard to portfolio turnover and will make
changes in its investment portfolios from time to time as business and economic
conditions and market prices may dictate and their respective investment
policies may require. It is estimated that the portfolio turnover rate
generally will not exceed 200%. 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. 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.
<PAGE>
The Fund may not:
(1) invest more than 5% of the value of its total assets in the
securities of any one issuer (except obligations issued or guaranteed by
the United States Government, its agencies and instrumentalities);
(2) acquire more than 10% of the outstanding voting securities of any
one issuer;
(3) invest more than 25% of the value of such Fund's total assets in
securities of companies in a particular industry (except obligations issued
or guaranteed by the United States Government, its agencies and
instrumentalities).
Changes in values of particular 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.
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.
The Fund is expected to have a high rate of portfolio turnover relative to
other mutual funds, which may result in the Fund paying more brokerage
commissions and having higher amounts of realized investment gain subject to the
payment of taxes by shareholders.
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 Dow Jones
Industrial Average 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.
<PAGE>
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.
HOW TO PURCHASE SHARES
By this Prospectus, the Fund is offering Investor Shares and Institutional
Shares. Investor Shares and Institutional Shares are identical, except as to
minimum investment requirements and the services offered to and expenses borne
by each class.
Investor Shares
Investor Shares may be purchased by any investor without a sales charge. A
minimum initial investment of $1,000 is required to open an Investor Shares
account with subsequent minimum investments of $100. Investment minimums may be
waived at the discretion of the Fund.
Institutional Shares
Institutional Shares may be purchased without a sales charge by (1)
financial institutions, such as banks, trust companies, thrift institutions,
mutual funds or other financial institutions, acting on their own behalf or on
behalf of their qualified fiduciary accounts, employee benefit or retirement
plan accounts or other qualified accounts, (2) securities brokers or dealers
acting on their own behalf or on behalf of their clients, (3) directors or
employees of the Fund or of the Adviser or its affiliated companies or by the
relatives of those individuals or the trustees of benefit plans covering those
individuals. These requirements for the purchase of Institutional Shares may be
waived in the sole discretion of the Fund.
A minimum initial investment of $1,000,000 is required to open an
Institutional Shares account with subsequent minimum investments of $10,000.
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:
<PAGE>
By Check. The Account application which accompanies this Prospectus should be
completed, signed, and, along with a check for the initial investment payable to
OTI 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: Star
Bank, N.A. Cinti/Trust, ABA #0420-0001-3, [F/F/C Account No. _____________ Maxus
Mutual Funds DDA ___________ (Star Bank Trust)]. 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 (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 OTI 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 (216) 687-1000 and identifying their account by
number. Shareholders wishing to 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
(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.
<PAGE>
Price of Shares.
The price paid for shares of a certain class of the Fund is the net asset
value per share of such class 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 each class of 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.
For purposes of pricing sales and redemptions, net asset value per share of each
class of the Fund is calculated by determining the value of the class's
proportional interest in the assets of the Fund, less (i) such class's
proportional share of general liabilities and (ii) the liabilities allocable to
such class, and dividing such amount by the number of shares of such class
outstanding.
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 maturities 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.
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 that 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.
Shares of the Fund are offered, on a best efforts basis by the Fund's
Distributors, Maxus Securities Corp ("MSC") (an affiliate of the Adviser) and
the Sub-Adviser, each an NASD broker-dealer. Purchases of the Fund's shares
through MSC will be transmitted promptly to the Transfer Agent so that the
investor's purchase order receives the net asset value next determined following
receipt of the order by either Distributor. The address of MSC is The Tower at
Erieview, 36th Floor, 1301 East Ninth Street, Cleveland, Ohio 44114. The
address of the Sub-Adviser is 1346 S. Third Street, Louisville, Kentucky 40208.
MSC and the Sub-Adviser each receives for its services as Distributor an annual
distribution fee of .30% of average net assets of Investor Shares. See
"Distribution Plan (Investor Shares Only)."
<PAGE>
HOW TO REDEEM SHARES
All shares of each class of the Fund offered for redemption will be
redeemed at the net asset value per share of such class 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.
If a shareholder is in possession of the stock certificate, these
certificates must accompany the redemption request and must be endorsed as
registered with a signature guarantee. Additional documents may be required for
registered certificates owned by corporations, executors, administrators,
trustees or guardians. 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 (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.
Redemption By Telephone.
Shares may be redeemed by telephone by calling Maxus Information Systems
Inc. 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 Fund at (216) 687-
1000. 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.
<PAGE>
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 the 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 in the case of Investor Shares or $1,000,000 in the
case of Institutional Shares. 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 redemption 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 Fund. Costs associated with a withdrawal plan are borne by
the Fund. Additional information regarding systematic withdrawal plans may be
obtained by calling Maxus Information Systems Inc. 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 Ohio 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 MAM as investment adviser (see below),
the Fund has no executive employees other than their officers, each of whom is
employed by MAM or its affiliates and none of whom devotes full time to the
affairs of the Fund. No officer, director or employee of MAM or any of its
affiliates 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 MAM, the Sub-Adviser or any of their affiliates a fee for each
meeting attended and reimburses each such Trustee for travel and out-of-pocket
expenses.
<PAGE>
The Investment Adviser and Sub-Adviser.
The Fund has retained as its investment adviser Maxus Asset Management Inc
("MAM" or the "Adviser"), The Tower at Erieview, 36th Floor, 1301 East Ninth
Street, Cleveland, Ohio 44114, an investment management organization founded in
1976. The Adviser is actively engaged in providing discretionary investment
management services to institutional and individual clients and is registered
under the Investment Advisers Act of 1940.
MAM is a wholly owned subsidiary of Resource Management Inc, dba Maxus
Investment Group ("RMI"), an Ohio corporation with interests primarily in the
financial services industry. RMI also owns all of the shares of Maxus
Securities Corp ("MSC"), an NASD broker/dealer through which shares of the Fund
are being offered. Mr. Richard A. Barone is the president and controlling
shareholder of RMI and, therefore, is deemed to be in control of MAM and MSC.
Mr. Barone is the person primarily responsible for the management of the
portfolio of the Fund. He has been President of MAM since 1976.
Subject to the supervision and direction of the Trustees, MAM, as
investment adviser, manages the Fund's portfolio in accordance with the stated
policies of the Fund. Based upon recommendations of the Sub-Adviser as explained
below, MAM makes investment decisions for the Fund and places the purchase and
sale orders for portfolio transactions. In addition, MAM or its affiliates
furnishes office facilities and clerical and administrative services, pays the
salaries of all officers and 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, including the
provision of personnel for recordkeeping, the preparation of governmental
reports and responding to shareholder communications.
The Adviser has retained Morton H. Sachs & Company ("Sachs" or the "Sub-
Adviser"), 1346 S. Third Street, Louisville, Kentucky 40208, as the Sub-Adviser
of the Fund. The Sub-Adviser obtains and performs fundamental research,
performs analysis of such research and makes recommendations to the Adviser with
respect to the purchase or sale of specific investments. A key component of the
fundamental research utilized by the Sub-Adviser is a proprietary stock price
indicator service provided to the Sub-Adviser by OTI Equity Research Inc.
("OTI"). All final investment decisions are made by the Adviser.
The Sub-Adviser is an investment management organization founded in 1974.
The Sub-Adviser is actively engaged in providing discretionary investment
management services to institutional and individual clients and is registered
under the Investment Advisors Act of 1940. The Sub-Adviser is also an NASD
broker-dealer through which shares of the Fund are being offered.
<PAGE>
Advisory Fee, Sub-Advisory Fee and Other Expenses.
The Adviser receives from the Fund as compensation for its services to the
Fund a fee at the annual rate of 1% of the Fund's average daily net assets. The
Adviser pays the Sub-Adviser a sub-advisory fee at the annual rate of .50% of
the Fund's average daily net assets. The Adviser also reimburses the Sub-
Adviser for 50% of the amounts paid by the Sub-Adviser to obtain research from
OTI.
The Fund pays all expenses not assumed by the Adviser, including brokerage
fees and commissions, fees of Trustees not affiliated with MAM, 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, and costs
pursuant to the Fund's plan of distribution described below.
Distribution Plan (Investors Shares Only).
Under a plan adopted by the Board of Trustees pursuant to Rule 12b-1 under
the 1940 Act (the "Plan"), the Fund pays each of MSC and the Sub-Adviser a
shareholder servicing and distribution fee at the annual rate of .30% of the
average daily net assets of the Investor Shares of the Fund. Such fee will be
used by MSC and the Sub-Adviser to make payments for administration, shareholder
services and distribution assistance, including, but not limited to (i)
compensation to securities dealers and other persons and organizations ("Service
Organizations") for providing distribution assistance with respect to Investor
Shares, (ii) compensation to Service Organizations for providing administration,
accounting and other shareholder services with respect to Investor Shares, and
(iii) otherwise promoting the sale of Investor Shares, including paying for the
preparation of advertising and sales literature and the printing and
distribution of such materials to prospective investors. The fees paid to MSC
and the Sub-Adviser under the Plan are payable without regard to actual expenses
incurred. Third parties also may charge fees to their clients who are
beneficial owners of Investor Shares in connection with their clients' accounts.
These fees would be in addition to any amounts which may be received by them
from MSC or the Sub-Adviser under the Plan.
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. Based upon this consideration the Adviser makes substantial use of
the services of (i) MSC, an affiliate of the Fund and of the Adviser and (ii)
the Sub-Adviser, but is not required to do so in either case.
<PAGE>
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 such Fund in writing of his election to receive
distributions in cash. As a result of the application of the Distribution Plan
to Investor Shares only, the amount of dividends on Institutional Shares will
exceed the amount of dividends on Investors Shares.
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
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.
<PAGE>
GENERAL INFORMATION
The Fund is a diversified portfolio of OTI Trust (the "Trust"). The Trust
is an open-end management investment company, organized as a business trust
under the laws of the State of Ohio by a Declaration of Trust dated
September 15, 1998. The Declaration of Trust provides for an unlimited number
of authorized shares of beneficial interest, which may, without shareholder
approval, be divided into an unlimited number of series of such shares. Each
share represents an equal proportionate interest in an investment portfolio with
other shares of the same series and class, and is entitled to such dividends and
distributions out of the income earned on the assets belonging to that portfolio
as are declared at the discretion of the Trustees. All consideration received
by the Trust for shares of one of the portfolios and all assets in which such
consideration is invested will belong to that portfolio and will be subject to
the liabilities relating thereto. Presently, only a single series of shares has
been authorized, that is, the shares in the Fund.
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 or class on all matters
except that (i) shares shall be voted by individual series or class when
required by the 1940 Act or when the Trustees have determined that the matter
affects only the interests of a particular series or class, and (ii) only the
holders of Investor Shares will be entitled to vote on matters submitted to
shareholder vote with regard to the Distribution Plan applicable to such class.
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
series 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
series 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 series 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 series.
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 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.
<PAGE>
In order to provide the initial capital for the Trust, MAM and Sachs each
have purchased 5,000 Institutional Shares of the Fund at $10.00 per share for a
total purchase price of $50,000 each. As long as MAM or Sachs owns more than
25% of the Trust's shares, it will be deemed to be in "control" of the Trust as
that term is defined in the 1940 Act.
Star Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45201, is the
custodian for the Fund's securities and cash. Maxus Information Systems Inc.
("MIS"), The Tower at Erieview, 36th Floor, 1301 East Ninth Street, Cleveland,
Ohio 44114, is the Fund's Transfer, Redemption and Dividend Distributing Agent.
MIS is a subsidiary of RMI, the parent company of the Adviser.
McCurdy & Associates C.P.A.'s, Inc., 27955 Clemens Road, Westlake, Ohio
44145, have been appointed as independent accountants for the Fund.
Benesch, Friedlander, Coplan & Aronoff LLP, 2300 BP America Building,
200 Public Square, Cleveland, Ohio 44114, is legal counsel to the Fund 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.
<PAGE>
APPENDIX A
Description of bond and Commercial Paper Ratings*
Standard & Poor's Corporation
Bonds
AAA: Bonds rated AAA have the highest rating assigned by Standard & Poor's
to a debt obligation. Capacity to pay interest and repay principal is extremely
strong.
AA: Bonds rated AA have very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.
A: Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effect of
changes in circumstances and economic conditions than bonds in the higher rated
categories.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than for the bonds in higher rated categories.
BBB, B, CCC and CC: Bonds rated BB, B, CCC and CC are regarded on balance
as predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. BB indicates the
lowest degree of speculation and CC the highest degree of speculation. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.
Commercial Paper
A-1: Commercial paper rated A-1 indicates that the degree of safety
regarding timely payment is very strong.
A-2: Commercial paper rated A-2 indicates that the capacity for timely
payment is strong. However, the relative degree of safety is not as
overwhelming as for issues designated A-1.
___________________________
*As described by Standard & Poor's Corporation.
<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 4
INVESTMENT POLICIES AND RESTRICTIONS 4
RISKS AND OTHER CONSIDERATIONS 5
PERFORMANCE 5
HOW TO PURCHASE SHARES 6
HOW TO REDEEM SHARES 9
SYSTEMATIC WITHDRAWAL PLAN 10
INVESTMENT MANAGEMENT 10
DIVIDENDS, DISTRIBUTIONS AND TAXES 13
GENERAL INFORMATION 14
<PAGE>
Investors are advised to read
this Prospectus and to retain
it for future reference.
OTI SPECIAL OPPORTUNITIES FUND
PROSPECTUS
October __, 1998
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
October __, 1998
OTI SPECIAL OPPORTUNITIES FUND
The Tower at Erieview, 36th Floor
1301 East Ninth Street
Cleveland, Ohio 44114
(216) 687-1000
OTI Special Opportunities Fund (the "Fund") is a diversified portfolio of
OTI 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 one of the Fund's distributors, Maxus Securities Corp, The Tower
at Erieview, 36th Floor, 1301 East Ninth Street, Cleveland, Ohio 44114,
telephone number (216) 687-1000 or Morton H. Sachs & Company, 1346 S. Third
Street, Louisville, Kentucky 40208, telephone number (502) 636-5282. 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 October __, 1998.
<PAGE>
TABLE OF CONTENTS
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 2 Investment Management
Ownership of Shares 4 Not Applicable
Investment Advisory and Other 4 Investment Management
Services
Brokerage Allocation 5 Execution of Portfolio Transactions
Capital Stock and Other Securities 7 General Information
Purchase, Redemption and Pricing of 7 How to Purchase Shares/
Securities Being Offered How to Redeem Shares
Determination of Net Asset Value 7 How to Purchase Shares
Tax Status 8 Dividends, Distributions
and Federal Taxes
Distributors 9 Investment Management
Financial Statements 10 Not Applicable
<PAGE>
GENERAL INFORMATION AND HISTORY
OTI Special Opportunities Fund (the "Fund") is a diversified portfolio of
OTI 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 Ohio pursuant to a Declaration of Trust dated
September 15, 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 fundamental investment policies
described in the Prospectus under the subheading "Investment Restrictions."
These policies cannot be changed without approval by the holders of a majority
of the outstanding voting securities of the Fund (as defined in the Prospectus
under "GENERAL INFORMATION"). The Fund may not:
1. Invest in securities of other registered investment companies,
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.
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.
<PAGE>
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.
The Fund will not invest more than 5% of its assets in repurchase
agreements. A repurchase agreement is an instrument under which the Fund
acquires ownership of an obligation but the seller agrees, at the time of sale,
to repurchase the obligation at a mutually agreed-upon time and price. The
resale price is in excess of the purchase price and reflects an agreed-upon
market rate unrelated to the interest rate on the purchased security. The Fund
will make payments for repurchase agreements only upon physical delivery or
evidence of book entry transfer to the account of the custodian or bank acting
as agent. In the event of bankruptcy or other default of a seller of a
repurchase agreement, the Fund could experience both delays in liquidating the
underlying securities and losses including: (a) possible decline in the value
of the underlying securities during the period while the Fund seeks to enforce
its rights thereto; (b) possible subnormal levels of income and lack of access
to income during this period; and (c) expenses of enforcing its rights.
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. Richard A. Barone is also a Trustee of Maxus Income Fund, Maxus
Equity Fund, Maxus Laureate Fund and MaxFund Trust, four other open-end
management investment companies.
<PAGE>
Name and Address Position Held Principal
With the Fund Occupation(s)
During Past 5 Years
Richard A. Barone* Chairman, President of Maxus
The Tower at Erieview, Treasurer and Securities Corp
36th Fl Trustee (broker-dealer), Maxus
1301 East Ninth Street Asset Management Inc.
Cleveland, Ohio 44114 (Investment adviser)
and Resource
Management Inc, dba
Maxus Investment Group
(financial services)
Morton H. Sachs* Trustee President of Morton H.
1346 S. Third Street Sachs & Company
Louisville, Kentucky (investment advisor)
40208
_______________ Trustee ____________________
_______________ Trustee ____________________
_______________ Trustee ____________________
_______________ Trustee ____________________
Robert J. Conrad Vice President Vice President,
The Tower at Erieview, Resource Management
36th Fl Inc.; formerly Vice
1301 East Ninth Street President, American
Cleveland, Ohio 44114 Income Plus
Robert W. Curtin Secretary Senior Vice President
The Tower at Erieview, and Secretary, Maxus
36th Fl Securities Corp;
1301 East Ninth Street formerly Executive
Cleveland, Ohio 44114 Vice President,
Roulston & Company,
Inc.
No officer, director or employee of Maxus Asset Management Inc. ("MAM" or
the "Investment Adviser") or of Morton H. Sachs & Company ("Sachs" or the "Sub-
Adviser") receives any compensation from the Trust for serving as an officer or
Trustee of the Trust. Each Trustee who is not an interested person of MAM or
Sachs will receive from the Fund the following fees for each Board or
shareholders meeting attended: $100 per meeting if net assets of such fund are
under $10,000,000; $200 per meeting if net assets of such Fund are between
$10,000,000 and $50,000,000; or $300 per meeting if net assets of such Fund are
over $50,000,000. 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:
<PAGE>
COMPENSATION TABLE
Aggregate CompensationTotal Compensation From All
Name of Trustee from Fund* Maxus Funds Paid to Trustees*
Richard A. Barone $ 0 $ 0
Morton H. Sachs $ 0 $ 0
_______________ $___ $____
_______________ $___ $____
_______________ $___ $____
_______________ $___ $____
*Estimated fees for current fiscal year.
OWNERSHIP OF SHARES
As of October __, 1998, 50% of the outstanding shares of the Fund were
owned by Maxus Asset Management, Inc., The Tower at Erieview, 36th Floor, 1301
East Ninth Street, Cleveland, Ohio 44114 and 50% of the outstanding shares were
owned by Morton H. Sachs & Company, 1346 S. Third Street, Louisville, Kentucky
40208. 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. Maxus Management, Inc. is controlled by Richard A.
Barone, the Chairman of the Fund.
INVESTMENT ADVISORY AND OTHER SERVICES
Investment Adviser and Sub-Adviser.
The information appearing in the Prospectus under the captions "Investment
Management - The Investment Adviser and Sub-Adviser" and "Investment
Management - Advisory Fee, Sub-Advisory Fee and Other Expenses" is hereby
incorporated by reference.
The Investment Advisory and Administration Agreement (the "Advisory
Agreement") and Sub-Advisory Agreement each are 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 such Fund or MAM or Sachs 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 and the Sub-
Advisory Agreement at a meeting held on October __, 1998. The Advisory
Agreement and the Sub-Advisory Agreement are 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 such Fund's shares or, upon not less than 90 days' notice, by MAM
or Sachs, as the case may be. The Advisory Agreement and the Sub-Advisory
Agreement each will terminate automatically in the event of its assignment.
<PAGE>
Distribution Plan.
The Fund has a Plan of Distribution (the "Plan") pursuant to Rule 12b-1
under the Act, pursuant to which the Fund pays each of Maxus Securities Corp
("MSC") and the Sub-Adviser .25% of average net assets of Investor Shares
annually for the costs of activities intended to result in the sale of Investor
Shares. See "Investment Management--Distribution Plan" in the Fund's Prospectus.
The Trustees believe that the Plan will benefit the Fund and its holders of
Investor Shares. Among these benefits are: (1) reductions in the per share
expenses of the Fund as a result of increased assets in the Fund; (2) reductions
in the cost of executing portfolio transactions and the possible ability of the
Investment Adviser in some cases to negotiate lower purchase prices for
securities, due to the potentially larger blocks of securities which may be
traded by the Fund as its net assets increase in size; and (3) a more
predictable flow of cash which may provide investment flexibility in seeking the
Fund's investment objective and may better enable the Fund to meet redemption
demands without liquidating portfolio securities at inopportune times.
Other Agreements.
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
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 $6.75 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
$17,400 for the first $25,000,000 in net assets, $8,500 for the next $25,000,000
in net assets and $4,750 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 $10,000,000, all of the above
amounts will be reduced based on the proportion which such average net assets
bears to $10,000,000.
Star Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45201, serves as the
Fund's custodian. As custodian, Star 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.
BROKERAGE ALLOCATION
Decisions to buy and sell securities for the Fund are made by MAM 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
MAM.
<PAGE>
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, MAM 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 MAM, 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 MAM
exercises investment discretion.
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. MAM's fee under the Advisory Agreement
is not reduced by reason of MAM's receiving such brokerage and research
services.
Under the Act, a mutual fund may not pay brokerage commissions to an
affiliate which exceed the usual and customary broker's commissions. A
commission is deemed as not exceeding the usual and customary broker's
commission if (i) the commission is reasonable and fair compared to the
commission received by other brokers in connection with comparable transactions
involving similar securities being purchased or sold during a comparable period
of time and (ii) the Board of Trustees, including a majority of the Trustees who
are not interested persons of the mutual fund, have adopted procedures
reasonably designed to provide that such commission is consistent with the
above-described standard, review these procedures annually for their continuing
appropriateness and determine quarterly that all commissions paid during the
preceding quarter were in compliance with these procedures.
The Fund's Board of Trustees has determined that any portfolio transaction
for the Fund, including in certain instances over-the-counter purchases and
sales, may be effected through MSC or the Sub-Adviser if, in MAM's judgment, the
use of MSC or the Sub-Adviser is likely to result in price and execution at
least as favorable as those of other qualified brokers, and if, in the
transaction, MSC or the Sub-Adviser charges the Fund a commission rate
consistent with those charged by MSC or the Sub-Adviser to comparable
unaffiliated customers in similar transactions. Each quarter, the Trustees
review a report comparing the commissions charged the Fund by MSC and the Sub-
Adviser to the commissions which would have been charged for the same
transactions by a national discount brokerage firm and a full-service brokerage
firm at its institutional rates. Based upon such review, the Board of Trustees
determines on a quarterly basis whether the commissions charged by MSC or the
Sub-Adviser meet the requirements of the Act. MSC and the Sub-Adviser will not
participate in commissions from brokerage given by the Fund to other brokers or
dealers. Over-the-counter purchases and sales are transacted through brokers
and dealers with principal market makers. The Fund will in no event effect
principal transactions with MSC or the Sub-Adviser in over-the-counter
securities in which MSC or the Sub-Advisor makes a market. MSC is a wholly owned
subsidiary of RMI, a corporation controlled by Richard A. Barone, Chairman of
the Fund. Richard A. Barone is, therefore, considered to control MSC.
<PAGE>
Under the rules adopted by the SEC, MSC or the Sub-Adviser may not execute
transactions for the Fund on the floor of any national securities exchange, but
may effect transactions for a Fund by transmitting orders for execution,
providing for clearance and settlement, and arranging for the performance of
those functions by members of the exchange not associated with MSC or the Sub-
Adviser. MSC or the Sub-Adviser will be required to pay fees charged by those
persons performing the floor brokerage elements out of the brokerage
compensation it receives from the Fund. The Fund has been advised by MSC and
the Sub-Adviser that on most transactions, the floor brokerage generally
constitutes from 10% to 40% of the total commissions paid.
Even though investment decisions for the Fund are made independently from
those of the other accounts managed by MAM, 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 MAM are prepared to invest in, or desire to dispose of, the
same security, available investments or opportunities for sales will be
allocated in a manner believed by MAM 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.
<PAGE>
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 such Fund.
As a result of the application of the Distribution Plan to Investor Shares
only, the amount of dividends on Institutional Shares will exceed the amount of
dividends on Investor Shares.
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 a 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 distribution 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.
<PAGE>
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 requirements 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.
DISTRIBUTORS
Shares of the Fund are offered on a best-efforts basis by Maxus Securities
Corp ("MSC") and the Sub-Adviser, each a registered NASD broker-dealer. MSC is a
wholly-owned subsidiary of RMI, which is controlled by Richard A. Barone,
Chairman of the Fund.
Pursuant to Distribution Agreements between the Trust and each of MSC and
the Sub-Adviser with respect to Investor Shares, each of MSC and the Sub-Adviser
has agreed to hold itself available to receive orders for the purchase of Shares
of the Fund, to accept such orders on behalf of the Fund as of the time of
receipt of such orders and to transmit such orders to the Fund's transfer agent
as promptly as practicable. Each of MSC and the Sub-Adviser receives an annual
distribution fee of .30% of average net assets for distributing and marketing
the Investor Shares of the Fund. Certain employees of MSC or the Sub-Adviser
may receive compensation under the Distribution Plan. See "Investment Advisory
and Other Services."
The Distribution Agreements provide that each of MSC and the Sub-Adviser
shall arrange to sell the Fund's Shares as agent for the Fund and may enter into
agreements with registered broker-dealers as it may select to arrange for the
sale of such shares. MSC and the Sub-Adviser are not obligated to sell any
certain number of shares.
<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 Declaration of Trust.
2 Registran's By-Laws.
3 None.
4 None.
5(a) Investment Advisory and Administration Agreement.
5(b) Sub-Advisory Agreement
6(a) Distribution Agreement with Maxus Securities Corp.
6(b) Distribution Agreement with Morton H. Sachs &
Company.
7 None.
8 Custody Agreement.*
9(a) Administration Agreement.
9(b) Accounting Services Agreement.
10 Opinion and consent.*
11 Consent of Independent Auditors.*
<PAGE>
12 None.
13 Subscription Agreements between the Trust and
(a) Resource Management Inc. and (b) Morton H.
Sachs & Company
14 Individual Retirement Account Documents.*
15 Plan of Distribution Pursuant to Rule 12b-1.
27 Financial Data Schedule.*
*To be filed by amendment.
Item 25. Persons Controlled by or Under Common Control with Registrant.
The Fund, together with Maxus Income Fund, Maxus Equity Fund, Maxus
Laureate Fund and MaxFund Trust (four other investment companies), may
be deemed to be under common control on the basis of the fact that
Richard A. Barone, the Chairman of the Fund, is also Chairman of the
other four investment companies.
In addition, the Fund and Resource Management Inc. (together with its
subsidiaries, MAM, MSC and MIS) may be deemed to be under common
control of Richard A. Barone, the Chairman of the Fund and the
President and controlling shareholder of Resource Management Inc.
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 of Beneficial Interest.
Item 27. Indemnification.
Reference is made to Article VIII of the Registrant's Declaration of
Trust filed as Exhibit 1. The application of these provisions is
limited by Article 10 of the Registrant's By-laws filed as Exhibit 2
and by the following undertaking set forth in the rules promulgated by
the Securities and Exchange Commission:
Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted
to trustees, officers and controlling persons of
the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and
Exchange Commission such indemnification is
against public policy as expressed in such Act and
is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities
(other than the payment by the registrant of
expenses incurred or paid by a trustee, officer or
controlling person of the registrant in the
successful defense of any action, suit or
proceeding) is asserted by such trustee, officer
or controlling person in connection with the
securities being registered, the registrant will,
unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the
question whether such indemnification by it is
against public policy as expressed in such Act and
will be governed by the final adjudication of such
issue.
<PAGE>
Item 28. Business and Other Connections of Investment Adviser.
Reference is made to the section in the Prospectus entitled
"Investment Management".
Item 29. Principal Underwriters.
(a) Maxus Securities Corp, the distributor for the Fund, also
distributes securities for Maxus Income Fund, Maxus Equity Fund, Maxus
Laureate Fund and MaxFund Trust.
(b) The following information is provided with respect to each
director and officer of Maxus Securities Corp:
Name and Principal Positions & Offices Positions & Offices
Business Address with Underwriter with Registrant
Richard A. Barone President, Treasurer Chairman, Treasurer
The Tower at Erieview and Director and a Trustee
1301 East Ninth Street
Cleveland, Ohio 44114
Robert W. Curtin Senior Vice President Secretary
The Tower at Erieview and Secretary
1301 East Ninth Street
Cleveland, Ohio 44114
<PAGE>
The following information is provided with respect to each director and
officer of Morton H. Sachs & Company.
Name and Principal Positions & Offices Positions & Offices
Business Address* with Underwriter with Registrant
Morton H. Sachs President Trustee
Royden P. Durham Vice President N/A
Charles M. O'Neill Vice President N/A
Christopher A. Nunnelley Vice President N/A
Jennifer Sachs Dobbins Vice President N/A
Thomas A. Douglas Jr. Vice President N/A
* The principal business address of each such person is 1346 S. Third
Street, Louisville, Kentucky 40208.
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, Star Bank,
N.A., 425 Walnut Street, Cincinnati, Ohio 45201.
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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cleveland, State of Ohio, on the 17th day of
September, 1998.
OTI TRUST
By: /s/ Richard A. Barone
Richard A. Barone, 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/ Richard A. Barone
Richard A. Barone Chairman, Treasurer and Trustee September 17, 1998
(Principal Executive Officer,
Financial Officer and Accounting
Officer)
/s/ Morton H. Sachs
Morton H. Sachs Trustee September 30, 1998
<PAGE>
EXHIBIT 1
DECLARATION OF TRUST
OF
OTI TRUST
THIS DECLARATION OF TRUST is made this 15th day of September, 1998 by the
Trustees hereunder (hereinafter with any additional and successor trustees
referred to as the "Trustees") and by the holders of shares of beneficial
interest to be issued hereunder as hereinafter provided.
W I T N E S S E T H:
WHEREAS, the Trustees have formed an unincorporated association in the form
of a business trust under the laws of the State of Ohio for the investment and
reinvestment of funds contributed thereto; and
WHEREAS, the Trustees have agreed to manage all property coming into their
hands as trustees of an Ohio business trust in accordance with the provisions
hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will hold all cash,
securities and other assets, which they may from time to time acquire in any
manner as Trustees hereunder IN TRUST to manage and dispose of the same upon the
following terms and conditions for the pro rata benefit of the holders from time
to time of Shares, whether or not certificated, in this Trust as hereinafter set
forth.
ARTICLE I
Name and Definitions
Section 1. Name. This Trust shall be known as "OTI Trust".
Section 2. Definitions. Whenever used herein, unless otherwise
required by the context or specifically provided:
(a) The term "Commission" shall have the meaning provided in the 1940
Act;
(b) The "Trust" refers to the Ohio business trust established by this
Declaration of Trust, as amended from time to time;
(c) "Shareholder" means a record owner of Shares of the Trust;
(d) "Shares" means the equal proportionate transferable units of
interest into which the beneficial interest in the Trust shall be divided
from time to time or, if more than one series or class of Shares is
authorized by the Trustees, the equally proportionate transferable units
into which each series or class of Shares shall be divided from time to
time, and includes a fraction of a Share as well as a whole Share;
<PAGE>
(e) The "1940 Act" refers to the Investment Company Act of 1940, and
the Rules and Regulations thereunder, all as amended from time to time;
(f) The term "Manager" is defined in Article IV, Section 5;
(g) The term "Person" shall mean an individual or any corporation,
partnership, joint venture, trust or other enterprise;
(h) "Declaration of Trust" shall mean this Declaration of Trust as
amended or restated from time to time;
(i) "Bylaws" shall mean the Bylaws of the Trust as amended from time
to time;
(j) The term "series" or "series of Shares" refers to the one or more
separate investment portfolios of the Trust into which the assets and
liabilities of the Trust may be divided and the Shares of the Trust
representing the beneficial interest of Shareholders in such respective
portfolios; and
(k) The term "class" or "class of Shares" refers to the division of
Shares representing any series into two or more classes as provided in
Article III, Section 1 hereof.
ARTICLE II
Purposes of Trust
This Trust is formed for the following purpose or purposes:
(a) to conduct, operate and carry on the business of an investment
company;
(b) to subscribe for, invest in, reinvest in, purchase or otherwise
acquire, hold, pledge, sell, assign, transfer, lend, write options on,
exchange, distribute or otherwise dispose of and deal in and with
securities of every nature, kind, character, type and form, including,
without limitation of the generality of the foregoing, all types of stocks,
shares, futures contracts, bonds, debentures, notes, bills and other
negotiable or non-negotiable instruments, obligations, evidences of
interest, certificates of interest, certificates of participation,
certificates, interests, evidences of ownership, guarantees, warrants,
options or evidences of indebtedness issued or created by or guaranteed as
to principal and interest by any state or local government or any agency or
instrumentality thereof by the United States Government or any agency,
instrumentality, territory, district or possession thereof, by any foreign
government or any agency, instrumentality, territory, district or
possession thereof, by any corporation organized under the laws of any
state, the United States or any territory or possession thereof or under
the laws of any foreign country, bank certificates of deposit, bank time
deposits, bankers' acceptances and commercial paper; to pay for the same in
cash or by the issue of stock, including treasury stock, bonds or notes of
the Trust or otherwise; and to exercise any and all rights, powers and
privileges of ownership or interest in respect of any and all such
investments of every kind and description, including, without limitation,
the right to consent and otherwise act with respect thereto, with power to
designate one or more persons, firms, associations or corporations to
exercise any of said rights, powers and privileges in respect of any said
instruments;
<PAGE>
(c) to borrow money or otherwise obtain credit and to secure the same
by mortgaging, pledging or otherwise subjecting as security the assets of
the Trust;
(d) to issue, sell, repurchase, redeem, retire, cancel, acquire,
hold, resell, reissue, dispose of, transfer, and otherwise deal in, Shares
including Shares in fractional denominations, and to apply to any such
repurchase, redemption, retirement, cancellation or acquisition of Shares
any funds or other assets of the appropriate series or class of Shares,
whether capital or surplus or otherwise, to the full extent now or
hereafter permitted by the laws of the State of Ohio;
(e) to conduct its business, promote its purposes, and carry on its
operations in any and all of its branches and maintain offices both within
and without the State of Ohio, in any and all States of the United States
of America, in the District of Columbia, and in any other parts of the
world; and
(f) to do all and everything necessary, suitable, convenient, or
proper for the conduct, promotion, and attainment of any of the businesses
and purposes herein specified or which at any time may be incidental
thereto or may appear conducive to or expedient for the accomplishment of
any of such businesses and purposes and which might be engaged in or
carried on by a business trust organized under Ohio Revised Code Chapter
1746, and to have and exercise all of the powers conferred by the laws of
the State of Ohio upon an Ohio business trust.
The foregoing provisions of this Article II shall be construed both as
purposes and powers and each as an independent purpose and power.
ARTICLE III
Beneficial Interest
Section 1. Shares of Beneficial Interest. The Shares of the Trust
shall be issued in one or more series as the Trustees may, without Shareholder
approval, authorize. Each series shall be preferred over all other series in
respect of the assets allocated to that series and shall represent a separate
investment portfolio of the Trust. The beneficial interest in each series at
all times shall be divided into Shares, with or without par value as the
Trustees may from time to time determine, each of which shall except as provided
in the following sentence, represent an equal proportionate interest in the
series with each other Share of the same series, none having priority or
preference over another. The Trustees may, without Shareholder approval, divide
Shares of any series into two or more classes, Shares of each such class having
such preferences and special or relative rights and privileges (including
conversion rights, if any) as the Trustees may determine. The number of Shares
authorized shall be unlimited, and the Shares so authorized may be represented
in part by fractional shares. From time to time, the Trustees may divide or
combine the Shares of any series or class into a greater or lesser number
without thereby changing the proportionate beneficial interests in the series or
class.
<PAGE>
Section 2. Ownership of Shares. The ownership of Shares will be
recorded in the books of the Trust or a transfer agent. The record books of the
Trust or any transfer agent, as the case may be, shall be conclusive as to who
are the holders of Shares of each series and class and as to the number of
Shares of each series and class held from time to time by each. No certificates
certifying the ownership of Shares need be issued except as the Trustees may
otherwise determine from time to time.
Section 3. Issuance of Shares. The Trustees are authorized, from time
to time, to issue or authorize the issuance of Shares at not less than the par
value thereof, if any, and to fix the price or the minimum price or the
consideration (in cash and/or such other property, real or personal, tangible or
intangible, as from time to time they may determine) or minimum consideration
for such Shares. Anything herein to the contrary notwithstanding, the Trustees
may issue Shares pro rata to the Shareholders of a series at any time as a stock
dividend, except to the extent otherwise required or permitted by the
preferences and special or relative rights and privileges of any classes of
Shares of that series, and any stock dividend to the Shareholders of a
particular class of Shares shall be made to such Shareholders pro rata in
proportion to the number of Shares of such class held by each of them.
All consideration received by the Trust for the issue or sale of Shares of
each series, together with all income, earnings, profits, and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation thereof,
and any funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall belong irrevocably to the series of Shares
with respect to which the same were received by the Trust for all purposes,
subject only to the rights of creditors, and shall be so handled upon the books
of account of the Trust and are herein referred to as "assets of" such series.
Shares may be issued in fractional denominations to the same extent as
whole Shares, and Shares in fractional denominations shall be Shares having
proportionately to the respective fractions represented thereby all the rights
of whole Shares, including, without limitation, the right to vote, the right to
receive dividends and distributions, and the right to participate upon
liquidation of the Trust or of a particular series of Shares.
Section 4. No Preemptive Rights; Derivative Suits. Shareholders shall
have no preemptive or other right to subscribe for any additional Shares or
other securities issued by the Trust. No action may be brought by a Shareholder
on behalf of the Trust or a series unless a prior demand regarding such matter
has been made on the Trustees and the Shareholders of the Trust or such series.
<PAGE>
Section 5. Status of Shares and Limitation of Personal Liability.
Shares shall be deemed to be personal property giving only the rights provided
in this instrument. Every Shareholder by virtue of having become a Shareholder
shall be held to have expressly assented and agreed to the terms hereof and to
have become a party hereto. The death of a Shareholder during the continuance
of the Trust shall not operate to terminate the same nor entitle the
representative of any deceased Shareholder to an accounting or to take any
action in court or elsewhere against the Trust or the Trustees, but only to the
rights of said decedent 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
partners. Neither the Trust nor the Trustees, nor any officer, employee or
agent of the Trust shall have any power to bind any Shareholder or Trustee
personally or to call upon any Shareholder for the payment of any sum of money
or assessment whatsoever other than such as the Shareholder at any time
personally may agree to pay by way of subscription for any Shares or otherwise.
Every note, bond, contract or other undertaking issued by or on behalf of the
Trust shall include a recitation limiting the obligation represented thereby to
the Trust and its assets or the assets of a particular series (but the omission
of such a recitation shall not operate to bind any Shareholder or Trustee
personally).
ARTICLE IV
Trustees
Section 1. Election. A Trustee may be elected either by the Trustees
or the Shareholders. The Trustees named herein shall serve until the first
meeting of the Shareholders or until the election and qualification of their
successors. Prior to the first meeting of Shareholders the initial Trustees
hereunder may elect additional Trustees to serve until such meeting and until
their successors are elected and qualified. The Trustees also at any time may
elect Trustees to fill vacancies in the number of Trustees. The number of
Trustees shall be fixed from time to time by the Trustees and, at or after the
commencement of the business of the Trust, shall be not less than three. Each
Trustee, whether referred to hereinafter or hereafter becoming a Trustee, shall
serve as a Trustee during the lifetime of this Trust, until such Trustee dies,
resigns, retires, or is removed, or, if sooner, until the next meeting of
Shareholders called for the purpose of electing Trustees and the election and
qualification of his successor. Subject to Section 16(a) of the 1940 Act, the
Trustees may elect their own successors and, pursuant to this Section, may
appoint Trustees to fill vacancies.
Section 2. Powers. The Trustees shall have all powers necessary or
desirable to carry out the purposes of the Trust, including, without limitation,
the powers referred to in Article II hereof. Without limiting the generality of
the foregoing, the Trustees may adopt By-Laws not inconsistent with this
Declaration of Trust providing for the conduct of the business of the Trust and
may amend and repeal them to the extent that they do not reserve that right to
the Shareholders; they may fill vacancies in their number, including vacancies
resulting from increases in their own number, and may elect and remove such
officers and employ, appoint and terminate such employees or agents as they
consider appropriate; they may appoint from their own number and terminate any
one or more committees; they may employ one or more custodians of the assets of
the Trust and may authorize such custodians to employ subcustodians and to
deposit all or any part of such assets in a system or systems for the central
handling of securities, retain a transfer agent and a Shareholder servicing
agent, or both, provide for the distribution of Shares through a principal
underwriter or otherwise, set record dates, and in general delegate such
authority as they consider desirable (including, without limitation, the
authority to purchase and sell securities and to invest funds, to determine the
net income of the Trust for any period, the value of the total assets of the
Trust and the net asset value of each Share, and to execute such deeds,
agreements or other instruments either in the name of the Trust or the names of
the Trustees or as their attorney or attorneys or otherwise as the Trustees from
time to time may deem expedient) to any officer of the Trust, committee of the
Trustees, any such employee, agent, custodian or underwriter or to any Manager.
<PAGE>
Without limiting the generality of the foregoing, the Trustees shall have
full power and authority:
(a) To invest and reinvest cash and to hold cash uninvested;
(b) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and
deliver proxies or powers of attorney to such person or persons as the
Trustees shall deem proper, granting to such person or persons such power
and discretion with relation to securities or property as the Trustees
shall deem proper;
(c) To hold any security or property in a form not indicating any
trust whether in bearer, unregistered or other negotiable form or in the
name of the Trust or a custodian, subcustodian or other depository or a
nominee or nominees or otherwise;
(d) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or concern, any security of
which is held in 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;
(e) 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;
(f) 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;
(g) Subject to the provisions of Article III, Section 3, to allocate
assets, liabilities, income and expenses of the Trust to a particular
series of Shares or to apportion the same among two or more series,
provided that any liabilities or expenses incurred by a particular series
of Shares shall be payable solely out of the assets of that series; and to
the extent necessary or appropriate to give effect to the preferences and
special or relative rights and privileges of any classes of Shares, to
allocate assets, liabilities, income and expenses of a series to a
particular class of Shares of that series or to apportion the same among
two or more classes of Shares of that series;
(h) To enter into joint ventures, general or limited partnerships and
any other combinations or associations;
<PAGE>
(i) To purchase and pay for entirely out of Trust property such
insurance as they may deem necessary or appropriate for the conduct of the
business, including, without limitation, insurance policies insuring the
assets of the Trust and payment of distributions and principal on its
portfolio investments, and insurance policies insuring the Shareholders,
Trustees, officers, employees, agents, investment advisers or Managers,
principal underwriters, or independent contractors of the Trust
individually against all claims and liabilities of every nature arising by
reason of 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 Shareholder, Trustee, officer, employee, agent, investment
adviser or Manager, 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 such liability; and
(j) To pay pensions for faithful service, as deemed appropriate by
the Trustees, and to adopt, establish and carry out pension, profit-
sharing, share bonus, share purchase, savings, thrift and other retirement,
incentive and benefit plans, trusts and provisions, including the
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.
Further, without limiting the generality of the foregoing, the Trustees
shall have full power and authority to incur and pay out of the principal or
income of the Trust such expenses and liabilities as may be deemed by the
Trustees to be necessary or proper for the purposes of the Trust; provided,
however, that all expenses and liabilities incurred by or arising in connection
with a particular series of Shares, as determined by the Trustees, shall be
payable solely out of the assets of that series.
Any determination made in good faith and, so far as accounting matters are
involved, in accordance with generally accepted accounting principles by or
pursuant to the authority granted by the Trustees, as to the amount of the
assets, debts, obligations or liabilities of the Trust or a particular series or
class of Shares; the amount of any reserves or charges set up and the propriety
thereof; the time of or purpose for creating such reserves or charges; the use,
alteration or cancellation of any reserves or charges (whether or not any debt,
obligation or liability for which such reserves or charges shall have been
created shall have been paid or discharged or shall be then or thereafter
required to be paid or discharged); the price or closing bid or asked price of
an investment owned or held by the Trust or a particular series; the market
value of any investment or fair value of any other asset of the Trust or a
particular series; the number of Shares outstanding; the estimated expense to
the Trust or a particular series in connection with purchases of its Shares; the
ability to liquidate investments in an orderly fashion; and the extent to which
it is practicable to deliver a cross-section of the portfolio of the Trust or a
particular series in payment for any such Shares, or as to any other matters
relating to the issue, sale, purchase and/or other acquisition or disposition of
investments or Shares of the Trust or a particular series, shall be final and
conclusive, and shall be binding upon the Trust or such series and its
Shareholders, past, present and future, and Shares are issued and sold on the
condition and understanding that any and all such determinations shall be
binding as aforesaid.
<PAGE>
Section 3. Meetings. At any meeting of the Trustees, a majority of the
Trustees then in office shall constitute a quorum. Any meeting may be adjourned
from time to time by a majority of the votes cast upon the question, whether or
not a quorum is present, and the meeting may be held as adjourned without
further notice.
When a quorum is present at any meeting, a majority of the Trustees present
may take an action, except when a larger vote is required by this Declaration of
Trust, the By-Laws or the 1940 Act.
Any action required or permitted to be taken at any meeting of the Trustees
or of any committee thereof may be taken without a meeting, if a written consent
to such action is signed by a majority of the Trustees or members of any such
committee then in office, as the case may be, and such written consent is filed
with the minutes of proceedings of the Trustees or any such committee.
The Trustees or any committee designated by the Trustee may participate in
a meeting of the Trustees or such committee by means of a conference telephone
or similar communications equipment by means of which all persons participating
in the meeting can hear each other at the same time. Participation by such
means shall constitute presence in person at a meeting.
Section 4. Ownership of Assets of the Trust. Title to all of the
assets of each series of Shares of the Trust at all times shall be considered as
vested in the Trustees.
Section 5. Investment Advice and Management Services. The Trustees
shall not in any way be bound or limited by any present or future law or custom
in regard to investments by trustees. The Trustees from time to time may enter
into a written contract or contracts with any person or persons (herein called
the "Manager"), including any firm, corporation, trust or association in which
any Trustee or Shareholder may be interested, to act as investment advisers
and/or managers of the Trust and to provide such investment advice and/or
management as the Trustees from time to time may consider necessary for the
proper management of the assets of the Trust, including, without limitation,
authority to determine from time to time what investments shall be purchased,
held, sold or exchanged and what portion, if any, of the assets of the Trust
shall be held uninvested and to make changes in the Trust's Investments. Any
such contract shall be subject to the requirements of the 1940 Act with respect
to its continuance in effect, its termination and the method of authorization
and approval of such contract, or any amendment thereto or renewal thereof.
Any Trustee or any organization with which any Trustee may be associated
also may act as broker for the Trust in making purchases and sales of securities
for or to the Trust for its investment portfolio, and may charge and receive
from the Trust the usual and customary commission for such service. Any
organization with which a Trustee may be associated in acting as broker for the
Trust shall be responsible only for the proper execution of transactions in
accordance with the instructions of the Trust and shall be subject to no further
liability of any sort whatever.
The Manager, or any affiliate thereof, also may be a distributor for the
sale of Shares by separate contract or may be a person controlled by or
affiliated with any Trustee or any distributor or a person in which any Trustee
or any distributor is interested financially, subject only to applicable
provisions of law. Nothing herein contained shall operate to prevent any
Manager, who also acts as such a distributor, from also receiving compensation
for services rendered as such distributor.
<PAGE>
Section 6. Removal and Resignation of Trustees. The Trustees or the
Shareholders (by vote of 66-2/3% of the outstanding Shares entitled to vote
thereon) may remove at any time any Trustee with or without cause, and any
Trustee may resign at any time as Trustee, without penalty by written notice to
the Trust; provided that sixty days' advance written notice shall be given in
the event that there are only three or fewer Trustees at the time a notice of
resignation is submitted.
ARTICLE V
Shareholders' Voting Powers and Meetings
Section 1. Voting Powers. The Shareholders shall have power to vote
only (i) for the election of Trustees as provided in Article IV, Section 1, of
this Declaration of Trust; provided, however, that no meeting of Shareholders is
required to be called for the purpose of electing Trustees unless and until such
time as less than a majority of the Trustees have been elected by the
Shareholders, (ii) for the removal of Trustees as provided in Article IV,
Section 6, (iii) with respect to any Manager as provided in Article IV,
Section 5, (iv) with respect to any amendment of this Declaration of Trust as
provided in Article IX, Section 8, (v) with respect to the termination of the
Trust or a series of Shares as provided in Article IX, Section 5, and (vi) with
respect to such additional matters relating to the Trust as may be required by
law, by this Declaration of Trust, or the By-Laws of the Trust or any
registration of the Trust with the Commission or any state, or as the Trustees
may consider desirable. Each whole Share shall be entitled to one vote as to
any matter on which it is entitled to vote (except that in the election of
Trustees said vote may be cast for as many persons as there are Trustees to be
elected), and each fractional Share shall be entitled to a proportionate
fractional vote. Notwithstanding any other provision of this Declaration of
Trust, on any matter submitted to a vote of Shareholders, all Shares of the
Trust then entitled to vote shall be voted in the aggregate as a single class
without regard to series or classes of Shares, except (i) when required by the
1940 Act or when the Trustees shall have determined that the matter affects one
or more series or classes differently Shares shall be voted by individual series
or class and (ii) when the Trustees have determined that the matter affects only
the interests of one or more series or classes then only Shareholders of such
series or classes shall be entitled to vote thereon. There shall be no
cumulative voting in the election of Trustees. Shares may be voted in person or
by proxy. A proxy with respect to Shares held in the name of two or more
persons shall be valid if executed by any one of them, unless at or prior to
exercise of the proxy the Trust receives a specific written notice to the
contrary from any one of them. 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.
Whenever no Shares of any series or class are issued and outstanding, the
Trustees may exercise with respect to such series or class all rights of
Shareholders and may take any action required by law, this Declaration of Trust
or any By-Laws of the Trust to be taken by Shareholders.
Section 2. Meetings. Meetings of the Shareholders may be called by the
Trustees or such other person or persons as may be specified in the By-Laws and
shall be called by the Trustees upon the written request of Shareholders owning
at least 10% of the outstanding Shares entitled to vote. Shareholders shall be
entitled to at least ten days' prior notice of any meeting.
<PAGE>
Section 3. Quorum and Required Vote. Thirty percent (30%) of the
outstanding Shares shall be a quorum for the transaction of business at a
Shareholders' meeting, except that where any provision of law or of this
Declaration of Trust permits or requires that holders of any series or class
shall vote as a series or class, then thirty percent (30%) of the aggregate
number of Shares of that series or class entitled to vote shall be necessary to
constitute a quorum for the transaction of business by that series or class.
Any lesser number, however, shall be sufficient for adjournment and any
adjourned session or sessions may be held within 90 days after the date set for
the original meeting without the necessity of further notice. Except when a
larger vote is required by any provision of this Declaration of Trust or the By
Laws of the Trust and subject to any applicable requirements of law, a majority
of the Shares voted shall decide any question and a plurality shall elect a
Trustee, provided that where any provision of law or of this Declaration of
Trust permits or requires that the holders of any series or class shall vote as
a series or class, then a majority of the Shares of that series or class voted
on the matter (or a plurality with respect to the election of a Trustee) shall
decide that matter insofar as that series or class is concerned.
Section 4. Action by Written Consent. Any action required or permitted
to be taken at any meeting may be taken without a meeting if a consent in
writing, setting forth such action, is signed by a majority of Shareholders
entitled to vote on the subject matter thereof (or such larger proportion
thereof as shall be required by any express provision of this Declaration of
Trust) and such consent is filed with the records of the Trust.
Section 5. Additional Provisions. The By-Laws may include further
provisions for Shareholders, votes and meetings and related matters.
ARTICLE VI
Distributions and Redemptions
Section 1. Distributions. The Trustees shall distribute periodically
to the Shareholders of each series of Shares an amount approximately equal to
the net income of that series, determined by the Trustees or as they may
authorize and as herein provided. Distributions of income may be made in one or
more payments, which shall be in Shares, cash or otherwise, and on a date or
dates and as of a record date or dates determined by the Trustees. At any time
and from time to time in their discretion, the Trustees also may cause to be
distributed to the Shareholders of any one or more series as of a record date or
dates determined by the Trustees, in Shares, cash or otherwise, all or part of
any gains realized on the sale or disposition of the assets of the series or all
or part of any other principal of the Trust attributable to the series. Each
distribution pursuant to this Section 1 shall be made ratably according to the
number of Shares of the series held by the several Shareholders on the record
date for such distribution, except to the extent otherwise required or permitted
by the preferences and special or relative rights and privileges of any classes
of Shares of that series, and any distribution to the Shareholders of a
particular class of Shares shall be made to such Shareholders pro rata in
proportion to the number of Shares of such class held by each of them. No
distribution need be made on Shares purchased pursuant to orders received, or
for which payment is made, after such time or times as the Trustees may
determine.
<PAGE>
Section 2. Determination of Net Income. In determining the net income
of each series or class of Shares for any period, there shall be deducted from
income for that period (a) such portion of all charges, taxes, expenses and
liabilities due or accrued as the Trustees shall consider properly chargeable
and fairly applicable to income for that period or any earlier period and
(b) whatever reasonable reserves the Trustees shall consider advisable for
possible future charges, taxes, expenses and liabilities which the Trustees
shall consider properly chargeable and fairly applicable to income for that
period or an earlier period. The net income of each series or class for any
period may be adjusted for amounts included on account of net income in the net
asset value of Shares issued or redeemed or repurchased during that period. In
determining the net income of a series or class for a period ending on a date
other than the end of its fiscal year, income may be estimated as the Trustees
shall deem fair. Gains on the sale or disposition of assets shall not be
treated as income, and losses shall not be charged against income unless
appropriate under applicable accounting principles, except in the exercise of
the discretionary powers of the Trustees. Any amount contributed to the Trust
which is received as income pursuant to a decree of any court of competent
jurisdiction shall be applied as required by the said decree.
Section 3. Redemptions. Any Shareholder shall be entitled to require
the Trust to redeem and the Trust shall be obligated to redeem at the option of
such Shareholder all or any part of the Shares owned by said Shareholder, at the
redemption price, pursuant to the method, upon the terms and subject to the
conditions hereinafter set forth:
(a) Certificates for Shares, if issued, shall be presented for
redemption in proper form for transfer to the Trust or the agent of the
Trust appointed for such purpose, and these shall be presented with a
written request that the Trust redeem all or any part of the Shares
represented thereby.
(b) The redemption price per Share shall be the net asset value per
Share when next determined by the Trust at such time or times as the
Trustees shall designate, following the time of presentation of
certificates for Shares, if issued, and an appropriate request for
redemption, or such other time as the Trustees may designate in accordance
with any provision of the 1940 Act, or any rule or regulation made or
adopted by any securities association registered under the Securities
Exchange Act of 1934, as determined by the Trustees, less any applicable
charge or fee imposed from time to time as determined by the Trustees.
(c) Net asset value of each series or class of Shares (for the
purpose of issuance of Shares as well as redemptions thereof) shall be
determined by dividing:
(i) the total value of the assets of such series or class
determined as provided in paragraph (d) below less to the extent
determined by or pursuant to the direction of the Trustees in
accordance with generally accepted accounting principles, all debts,
obligations and liabilities of such series or class (which debts,
obligations and liabilities shall include, without limitation of the
generality of the foregoing, any and all debts, obligations,
liabilities, or claims, of any and every kind and nature, fixed,
accrued and otherwise, including the estimated accrued expenses of
management and supervision, administration and distribution and any
reserves or charges for any or all of the foregoing, whether for
taxes, expenses, or otherwise, and the price of Shares redeemed but
not paid for) but excluding the Trust's liability upon its Shares and
its surplus, by
<PAGE>
(ii) the total number of Shares of such series or class
outstanding.
The Trustees are empowered, in their absolute discretion, to establish
other methods for determining such net asset value whenever such other
methods are deemed by them to be necessary to enable the Trust to comply
with applicable law, or are deemed by them to be desirable, provided they
are not inconsistent with any provision of the 1940 Act.
(d) In determining for the purposes of this Declaration of Trust the
total value of the assets of each series or class of Shares at any time,
investments and any other assets of such series or class shall be valued in
such manner as may be determined from time to time by or pursuant to the
order of the Trustees.
(e) Payment of the redemption price by the Trust may be made either
in cash or in securities or other assets at the time owned by the Trust or
partly in cash and partly in securities or other assets at the time owned
by the Trust. The value of any part of such payment to be made in
securities or other assets of the Trust shall be the value employed in
determining the redemption price. Payment of the redemption price shall be
made on or before the seventh day following the day on which the Shares are
improperly presented for redemption hereunder, except that delivery of any
securities included in any such payment shall be made as promptly as any
necessary transfers on the books of the issuers whose securities are to be
delivered may be made and, except as postponement of the date of payment
may be permissible under the 1940 Act.
Pursuant to resolution of the Trustees, the Trust may deduct from the
payment made for any Shares redeemed a liquidating charge not in excess of
an amount determined by the Trustees from time to time.
(f) The right of any holder of Shares redeemed by the Trust as
provided in this Article VI to receive dividends or distributions thereon
and all other rights of such Shareholder with respect to such Shares shall
terminate at the time as of which the redemption price of such Shares is
determined, except the right of such Shareholder to receive (i) the
redemption price of such Shares from the Trust in accordance with the
provisions hereof, and (ii) any dividend or distribution to which such
Shareholder previously had become entitled as the record holder of such
Shares on the record date for such dividend or distribution.
(g) Redemption of Shares by the Trust is conditional upon the Trust
having funds or other assets legally available therefor.
(h) The Trust, either directly or through an agent, may repurchase
its Shares, out of funds legally available therefor, upon such terms and
conditions and for such consideration as the Trustees shall deem advisable,
by agreement with the owner at a price not exceeding the net asset value
per Share as determined by or pursuant to the order of the Trustees at such
time or times as the Trustees shall designate, less any applicable charge,
if and as fixed by the Trustees from time to time, and to take all other
steps deemed necessary or advisable in connection therewith.
<PAGE>
(i) Shares purchased or redeemed by the Trust shall be cancelled or
held by the Trust for reissue, as the Trustees from time to time may
determine.
(j) The obligations set forth in this Article VI may be suspended or
postponed, (1) for any period (i) during which the New York Stock Exchange
is closed other than for customary weekend and holiday closings or
(ii) during which trading on the New York Stock Exchange is restricted,
(2) for any period during which an emergency exists as a result of which
(i) the disposal by the Trust of investments owned by it is not reasonably
practicable, or (ii) it is not reasonably practicable for the Trust fairly
to determine the value of its net assets, or (3) for such other periods as
the Commission or any successor governmental authority by order may permit.
Notwithstanding any other provision of this Section 3 of Article VI, if
certificates representing such Shares have been issued, the redemption or
repurchase price need not be paid by the Trust until such certificates are
presented in proper form for transfer to the Trust or the agent of the Trust
appointed for such purpose; however, the redemption or repurchase shall be
effective, in accordance with the resolution of the Trustees, regardless of
whether or not such presentation has been made.
Section 4. Redemptions at the Option of the Trust. The Trust shall
have the right at its option and at any time to redeem Share of any Shareholder
at the net asset value thereof as determined in accordance with Section 3 of
Article VI of this Declaration of Trust: (i) if at such time such Shareholder
owns fewer Shares than, or Shares having an aggregate net asset value of less
than, an amount determined from time to time by the Trustees, or (ii) to the
extent that such Shareholder owns Shares of a particular series or class of
Shares equal to or in excess of a percentage of the outstanding Shares of that
series or class determined from time to time by the Trustees, or (iii) to the
extent that such Shareholder owns Shares of the Trust representing a percentage
equal to or in excess of such percentage of the aggregate number of outstanding
Shares of the Trust or the aggregate net asset value of the Trust determined
from time to time by the Trustees.
Section 5. Dividends, Distributions, Redemptions and Repurchases. No
dividend or distribution including, without limitation, any distribution paid
upon termination of the Trust or of any series) with respect to, nor any
redemption or repurchase of, the Shares of any series shall be effected by the
Trust other than from the assets of such series.
ARTICLE VII
Compensation and Limitation of
Liability of Trustees
Section 1. Compensation. The Trustees shall be entitled to reasonable
compensation from the Trust and may fix the amount of their compensation.
<PAGE>
Section 2. Limitation of Liability. The Trustees shall not be
responsible or liable in any event for any neglect or wrongdoing of any officer,
agent, employee or Manager of the Trust, nor shall any Trustee be responsible
for the act or omission of any other Trustee, but nothing herein contained shall
protect any Trustee against any liability 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.
Every note, bond, contract, instrument, certificate, share, or undertaking
and every other act or thing whatsoever executed or done by or on behalf of the
Trust or the Trustees or any of them in connection with the Trust, shall be
deemed conclusively to have been executed or done only in their or his capacity
as Trustees or Trustee, and such Trustees or Trustee shall not be personally
liable thereon.
ARTICLE VIII
Indemnification
Section 1. Indemnification of Trustees, Officers, Employees and
Agents. Each person who is or was a Trustee, officer, employee or agent of the
Trust or who serves or has served at the Trust's request as a director, officer
or trustee of another entity in which the Trust has or had any interest as a
shareholder, creditor or otherwise shall be entitled to indemnification out of
the assets of the Trust to the extent provided in, and subject to the provisions
of, the By-Laws, provided that no indemnification shall be granted by the Trust
in contravention of the 1940 Act.
Section 2. Merged Corporations. For the purposes of this Article VIII
references to "the Trust" include any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger which, if
its separate existence had continued, would have had power and authority to
indemnify its directors, officers, employees or agents as well as the resulting
or surviving entity; so that any person who is or was a director, officer,
employee or agent of such a constituent corporation or is or was serving at the
request of such a constituent corporation as a trustee, director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise shall stand in the same position under the provisions of this
Article VIII with respect to the resulting or surviving entity as he would have
with respect to such a constituent corporation if its separate existence had
continued.
Section 3. Shareholders. In case any Shareholder or former Shareholder
shall be held to be 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 (or his heirs, executors,
administrators or other legal representatives or in the case of a corporation or
other entity, its corporate or other general successor) shall be entitled out of
the assets of the particular series of Share of which he is or was a Shareholder
to be held harmless from and indemnified against all losses and expenses arising
from such liability. Upon request, the Trust shall cause its counsel to assume
the defense of any claim which, if successful, would result in an obligation of
the Trust to indemnify the Shareholder as aforesaid.
<PAGE>
ARTICLE IX
Status of the Trust and Other General Provisions
Section 1. Trust Not a Partnership. It is hereby expressly declared
that a trust and not a partnership is created hereby. Neither the Trust nor the
Trustees, nor any officer, employee or agent of the Trust shall have any power
to bind personally either the Trust's Trustees or officers or any Shareholders.
All persons extending credit to, contracting with or having any claim against
the Trust or a particular series of Shares shall look only to the assets of the
Trust or the assets of that particular series for payment under such credit,
contract or claim; and neither the Shareholders nor the Trustees, nor any of the
Trust's officers, employees or agents, whether past, present or future, shall be
personally liable therefore. Nothing in this Declaration of Trust shall protect
any Trustee against any liability to which such Trustee otherwise would be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of the office of
Trustee hereunder.
Section 2. Trustee's Good Faith Action, Expert Advice, No Bond or
Surety. The exercise by the Trustees of their powers and discretion hereunder
under the circumstances then prevailing, shall be binding upon every one
interested. A Trustee shall be liable for his or her own willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee, and for nothing else, and shall not be liable
for errors of judgment or mistakes of fact or law. The Trustees may take advice
of counsel or other experts with respect to the meaning and operation of this
Declaration of Trust, and subject to the provisions of Section 1 of this
Article IX shall be under no liability for any act or omission in accordance
with such advice or for failing to follow such advice. The Trustees shall not
be required to give any bond as such, nor any surety if a bond is required.
Section 3. Liability of Third Persons Dealing with Trustees. No person
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees pursuant hereto
or to see to the application of any payments made or property transferred to the
Trust or upon its order.
Section 4. Trustees, Shareholders, etc. Not Personally Liable; Notice.
All persons extending credit to, contracting with or having any claim against
the Trust or a particular series of Shares shall look only to the assets of the
Trust or the assets of that particular series of Shares for payment under such
credit, contract or claim; and neither the Shareholders nor the Trustees, nor
any of the Trust's officers, employees or agents, whether past, present or
future, shall be personally liable therefor.
Section 5. Termination of Trust. Unless terminated as provided herein,
the Trust shall continue without limitation of time. The Trust may be
terminated at any time by vote of Shareholders holding at least a majority of
the Shares of each series entitled to vote or by the Trustees by written notice
to the Shareholders. Any series of Shares may be terminated at any time by vote
of Shareholders holding at least a majority of the Shares of such series
entitled to vote or by the Trustees by written notice to the Shareholders of
such series.
<PAGE>
Upon termination of the Trust or of any one or more series of Shares, after
paying or otherwise providing for all charges, taxes, expenses and liabilities,
whether due or accrued or anticipated as may be determined by the Trustees, the
Trust shall reduce, in accordance with such procedures as the Trustees consider
appropriate, the remaining assets to distributable form in cash or shares or
other securities, or any combination thereof, and distribute the proceeds to the
Shareholders of the series involved, ratably according to the number of Shares
of such series held by the several Shareholders of such series on the date of
termination, except to the extent otherwise required or permitted by the
preferences and special or relative rights and privileges of any classes of
Shares of that series, provided that any distribution to the Shareholders of a
particular class of Shares shall be made to such Shareholders pro rata in
proportion to the number of Shares of such class held by each of them.
Section 6. Filing of Copies, References, Headings. The original or a
copy of this instrument and of each amendment hereto and of each Declaration of
Trust supplemental hereto shall be kept at the office of the Trust where it may
be inspected by any Shareholder. A copy of this instrument and of each such
amendment shall be filed by the Trust with the Secretary of State of the State
of Ohio, as well as any other governmental office where such filing may from
time to time be required. Anyone dealing with the Trust may rely on a
certificate by an officer of the Trust as to whether or not any such amendments
have been made and as to matters in connection with the Trust hereunder; and,
with the same effect as if it were the original, may rely on a copy certified by
an officer of the Trust to be a copy of this instrument or of any such
amendment. In this instrument or in any such amendment, references to this
instrument, and all expressions like "herein," "hereof," and "hereunder," shall
be deemed to refer to this instrument as amended or affected by any such
amendment. Headings are placed herein for convenience of reference only and in
case of any conflict, the text of this instrument, rather than the headings,
shall control. This instrument may be executed in any number of counterparts
each of which shall be deemed an original.
Section 7. Applicable Law. The Trust set forth in this instrument is
made in the State of Ohio and it is created under and is to be governed by and
construed and administered according to the laws of said state, including,
without limitation, Ohio Revised Code Chapter 1746. The Trust shall be of the
type commonly called an Ohio business trust, and without limiting the
provisions hereof, the Trust may exercise all powers which are ordinarily
exercised by such a trust.
Section 8. Amendments. This Declaration of Trust may be amended at any
time by an instrument in writing signed by a majority of the then Trustees when
authorized so to do by a vote of Shareholders holding a majority of the Shares
outstanding and entitled to vote, except that an amendment which shall affect
the holders of one or more series or class of Shares but not the holders of all
outstanding series or classes of Shares shall be authorized by vote of the
Shareholders holding a majority of the Shares entitled to vote of the series or
classes affected and no vote of Shareholders of a series or class not affected
shall be required. Amendments having the purpose of changing the name of the
Trust or of supplying any omission, curing any ambiguity or curing, correcting
or supplementing any defective or inconsistent provision contained herein shall
not require authorization by Shareholder vote.
Section 9. Counterparts. This Declaration of Trust may be
simultaneously executed in several counterparts, each of which shall be deemed
to be an original, and such counterparts, together, shall constitute one and the
same instrument, which shall be sufficiently evidenced by any such original
counterpart.
<PAGE>
IN WITNESS WHEREOF, the undersigned Trustees have hereunto set his hand and
seal for himself and him assigns as of the day and year first above written.
/S/ Richard A. Barone
Richard A. Barone, Trustee
/S/ Morton H. Sachs
Morton H. Sachs, Trustee
<PAGE>
STATE OF OHIO )
) SS:
COUNTY OF CUYAHOGA )
BEFORE ME, a Notary Public in and for said County and State, personally
appeared the above-named Richard A. Barone, who acknowledged that he did sign
the foregoing instrument, and that the same is his free act and deed.
IN TESTIMONY WHEREOF, I have set my hand and official seal this 15th day of
September, 1998.
/S/ Michael J. Meaney
NOTARY PUBLIC
(Notarial Seal)
STATE OF KENTUCKY )
) SS:
COUNTY OF JEFFERSON )
BEFORE ME, a Notary Public in and for said County and State, personally
appeared the above-named Morton H. Sachs, who acknowledged that he did sign the
foregoing instrument, and that the same is his free act and deed.
IN TESTIMONY WHEREOF, I have set my hand and official seal this 15th day of
September, 1998.
/S/ Inda M. Wangerin
NOTARY PUBLIC
(Notarial Seal)
<PAGE>
EXHIBIT 2
BY-LAWS
OF
OTI TRUST
ARTICLE 1
Declaration of Trust and Principal Office
1.1. Agreement and Declaration of Trust. These By-Laws shall be subject to
the Declaration of Trust, as from time to time in effect (the "Declaration of
Trust"), of the above-captioned Ohio business trust established by the
Declaration of Trust (the "Trust").
1.2. Principal Office of the Trust. The principal office of the Trust
shall be located at such place within or outside the State of Ohio as the
Trustees from time to time may select.
ARTICLE 2
Meetings of Trustees
2.1. Regular Meetings. Regular meetings of the Trustees may be held
without call or notice at such places and at such times as the Trustees from
time to time may determine, provided that notice of the first regular meeting
following any such determination shall be given to absent Trustees.
2.2. Special Meetings. Special meetings of the Trustees may be held at any
time and at any place designated in the call of the meeting when called by the
President or the Treasurer or by two or more Trustees, sufficient notice thereof
being given to each Trustee by the Secretary or an Assistant Secretary or by the
officer or the Trustees calling the meeting.
2.3. Notice of Special Meetings. It shall be sufficient notice to a
Trustee of a special meeting to send notice by mail at least forty-eight hours
or by telegram at least twenty-four hours before the meeting addressed to the
Trustee at his or her usual or last known business or residence address or to
give notice to him or her in person or by telephone at least twenty-four hours
before the meeting. Notice of a meeting need not be given to any Trustee if a
written waiver of notice, executed by him or her 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 or her. Neither notice of a meeting nor a waiver of a notice need specify
the purposes of the meeting.
2.4. Notice of Certain Actions by Consent. If in accordance with the
provisions of the Declaration of Trust any action is taken by the Trustees by a
written consent of less than all of the Trustees, then prompt notice of any such
action shall be furnished to each Trustee who did not execute such written
consent, provided that the effectiveness of such action shall not be impaired by
any delay or failure to furnish such notice.
<PAGE>
ARTICLE 3
Officers
3.1. Enumeration; Qualification. The officers of the Trust shall be a
President, a Treasurer, a Secretary, and such other officers, if any, as the
Trustees from time to time may in their discretion elect. The Trust also may
have such agents as the Trustees from time to time may in their discretion
appoint. Officers may be but need not be a Trustee or shareholder. Any two or
more offices may be held by the same person.
3.2. Election. The President, the Treasurer and the Secretary shall be
elected by the Trustees upon the occurrence of any vacancy in any such office.
Other officers, if any, may be elected or appointed by the Trustees at any time.
Vacancies in any such other office may be filled at any time.
3.3. Tenure. The President, Treasurer and Secretary shall hold office in
each case until he or she sooner dies, resigns, is removed or becomes
disqualified. Each other officer shall hold office and each agent shall retain
authority at the pleasure of the Trustees.
3.4. Powers. Subject to the other provisions of these By-Laws, each
officer shall have, in addition to the duties and powers herein and in the
Declaration of Trust set forth, such duties and powers as commonly are incident
to the office occupied by him or her as if the Trust were organized as an Ohio
business corporation or such other duties and powers as the Trustees may from
time to time designate.
3.5. President. Unless the Trustees otherwise provide, the President shall
preside at all meetings of the shareholders and of the Trustees. Unless the
Trustees otherwise provide, the President shall be the chief executive officer.
3.6. Treasurer. The Treasurer shall be the chief financial and accounting
officer of the Trust, and, subject to the provisions of the Declaration of Trust
and to any arrangement made by the Trustees with a custodian, investment adviser
or manager, or transfer, shareholder servicing or similar agent, shall be in
charge of the valuable papers, books of account and accounting records of the
Trust, and shall have such other duties and powers as may be designated from
time to time by the Trustees or by the President.
3.7. Secretary. The Secretary shall record all proceedings of the
shareholders and the Trustees in books to be kept therefor, which books or a
copy thereof shall be kept at the principal office of the Trust. In the absence
of the Secretary from any meeting of the shareholders or Trustees, an Assistant
Secretary, or if there be none or if he or she is absent, a temporary Secretary
chosen at such meeting shall record the proceedings thereof in the aforesaid
books.
3.8. Resignations and Removals. Any Trustee or officer may resign at any
time by written instrument signed by him or her and delivered to the President
or Secretary or to a meeting of the Trustees. Such resignation shall be
effective upon receipt unless specified to be effective at some other time. The
Trustees may remove any Officer elected by them with or without cause. Except
to the extent expressly provided in a written agreement with the Trust, no
Trustee or officer resigning and no officer removed shall have any right to any
compensation for any period following his or her resignation or removal, or any
right to damages on account of such removal.
<PAGE>
ARTICLE 4
Committees
4.1. Appointment. The Trustees may appoint from their number an executive
committee and other committees. Except as the Trustees otherwise may determine,
any such committee may make rules for conduct of its business.
4.2. Quorum; Voting. A majority of the members of any Committee of the
Trustees shall constitute a quorum for the transaction of business, and any
action of such a Committee may be taken at a meeting by a vote of a majority of
the members present (a quorum being present).
ARTICLE 5
Reports
The Trustees and officers shall render reports at the time and in the
manner required by the Declaration of Trust or any applicable law. Officers and
Committees shall render such additional reports as they may deem desirable or as
may from time to time be required by the Trustees.
ARTICLE 6
Fiscal Year
The fiscal year of the Trust shall be fixed, and shall be subject to
change, by the Board of Trustees.
ARTICLE 7
Seal
The seal of the Trust shall consist of a flat-faced die with the word
"Ohio," together with the name of the Trust and the year of its organization cut
or engraved thereon but, unless otherwise required by the Trustees, the seal
shall not be necessary to be placed on, and in its absence shall not impair the
validity of, any document, instrument other paper executed and delivered by or
on behalf of the Trust.
ARTICLE 8
Execution of Papers
Except as the Trustees generally or in particular cases may authorize the
execution thereof in some other manner, all deeds, leases, contracts, notes and
other obligations made by the Trustees shall be signed by the President, any
Vice President, or by the Treasurer and need not bear the seal of the Trust.
<PAGE>
ARTICLE 9
Issuance of Share Certificates
9.1. Sale of Shares. Except as otherwise determined by the Trustees, the
Trust will issue and sell for cash or securities from time to time, full and
fractional shares of its shares of beneficial interest, such shares to be issued
and sold at a price of not less than net asset value per share as from time to
time determined in accordance with the Declaration of Trust and these By-Laws
and, in the case of fractional shares, at a proportionate reduction in such
price. In the case of shares sold for securities, such securities shall be
valued in accordance with the provisions for determining value of assets of the
Trust as stated in the Declaration of Trust and these By-Laws. The officers of
the Trust are severally authorized to take all such actions as may be necessary
or desirable to carry out this Section 9.1.
9.2. Share Certificates. In lieu of issuing certificates for shares, the
Trustees or the transfer agent either may issue receipts therefor or may keep
accounts upon the books of the Trust for the record holders of such shares, who
shall in either case, for all purposes hereunder, be deemed to be the holders of
certificates for such shares as if they had accepted such certificates and shall
be held to have expressly assented and agreed to the terms hereof.
The Trustees at any time may authorize the issuance of share certificates.
In that event, each shareholder shall be entitled to a certificate stating the
number of shares owned by him, in such form as shall be prescribed from time to
time by the Trustees. Such certificate shall be signed by the President or Vice
President and by the Treasurer or Assistant Treasurer. Such signatures may be
facsimile if the certificate is signed by a transfer agent, or by a registrar,
other than a Trustee, officer or employee of the Trust. In case any officer who
has signed or whose facsimile signature has been placed on such certificate
shall cease to be such officer before such certificate is issued, it may be
issued by the Trust with the same effect as if he or she were such officer at
the time of its issue.
9.3. Loss of Certificates. The Trust, or if any transfer agent is
appointed for the Trust, the transfer agent with the approval of any two
officers of the Trust, is authorized to issue and countersign replacement
certificates for the shares of the Trust which have been lost, stolen or
destroyed subject to the deposit of a bond or other indemnity in such form and
with such security, if any, as the Trustees may require.
9.4. Discontinuance of Issuance of Certificates. The Trustees at any time
may discontinue the issuance of share certificates and by written notice to each
shareholder, may require the surrender of share certificates to the Trust for
cancellation. Such surrender and cancellation shall not affect the ownership of
shares in the Trust.
<PAGE>
ARTICLE 10
Indemnification
10.1. Trustees, Officers, etc. The Trust shall indemnify each of its
Trustees and officers (including persons who serve at the Trust's request as
directors, officers or trustees of another organization in which the Trust has
any interest as a shareholder, creditor or otherwise) (hereinafter referred to
as a "Covered Person") against all liabilities and expenses, including but not
limited to amounts paid in satisfaction of judgments, in compromise or as fines
and penalties, and counsel fees reasonably incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been involved
as a party or otherwise or with which such person may be or may have been
threatened, while in office or thereafter, by reason of being or having been
such a Trustee or officer, except with respect to any matter as to which such
Covered Person shall have been finally adjudicated in a decision on the merits
in any such action, suit or other proceeding not to have acted in good faith in
the reasonable belief that such Covered Person's action was in the best
interests of the Trust and except that no Covered Person shall be indemnified
against an liability to the Trust or its Shareholders to which such Covered
Person would otherwise be subject by reason of wilful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
such Covered Person's office. Expenses, including counsel fees so incurred by
any such Covered Person (but excluding amounts paid in satisfaction of
judgments, in compromise or as fines or Penalties), may be paid from time to
time by the Trust in advance of the final disposition or any such action, suit
or proceeding upon receipt of an undertaking by or on behalf of such Covered
Person to repay amounts so paid to the Trust if it is ultimately determined that
indemnification of such expenses is not authorized under this Article, provided
that (a) such Covered Person shall provide security for his undertaking, (b) the
Trust shall be insured against losses arising by reason of Such Covered Person's
failure to fulfill his undertaking, or (c) a majority of the Trustees who are
disinterested persons and who are not Interested Persons (as that term is
defined in the Investment Company Act of 1940) (provided that a majority of such
Trustees then in office act on the matter), or independent legal counsel in a
written opinion, shall determine, based on a review of readily available facts
(but not a full trial-type inquiry), that there is reason to believe such
Covered Person ultimately will be entitled to indemnification.
10.2. Compromise Payment. As to any matter disposed of (whether by a
compromise payment, pursuant to a consent decree or otherwise) without an
adjudication in a decision on the merits by a court, or by any other body before
which the proceeding was brought, that such Covered Person either (a) did not
act in good faith in the reasonable belief that such Covered Person's action was
in the best interests of the Trust or (b) is liable to the Trust or its
Shareholders by reason of wilful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of such Covered
Person's office, indemnification shall be provided if (a) approved as in the
best interest of the Trust, after notice that it involves such indemnification,
by at least a majority of the Trustees who are disinterested persons and are not
Interested Persons (provided that a majority of such Trustees then in office act
on the matter), upon a determination based upon a review of readily available
facts (but not a full trial-type inquiry) that such Covered Person acted in good
faith in the reasonable belief that such Covered Person's action was in the best
interests of the Trust and is not liable to the Trust or its Shareholders by
reason of wilful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of such Covered Person's office, or (b)
there has been obtained an opinion in writing of independent legal counsel,
based upon a review of readily available facts (but not a full trial-type
inquiry) to the effect that such Covered Person appears to have acted in good
faith in the reasonable belief that such Covered Person's action was in the best
interests of the Trust and that such indemnification would not protect such
Covered Person against any liability to the Trust to which such Covered Person
would otherwise be subject by reason of wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office. Any approval pursuant to this Section shall not prevent the recovery
from any Covered Person of any amount paid to such Covered Person in accordance
with this Section as indemnification if such Covered Person is subsequently
adjudicated by a court of competent jurisdiction not to have acted in good faith
in the reasonable belief that such Covered Person's action was in the best
interests of the Trust or to have been liable to the Trust or its shareholders
by reason of wilful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of such Covered Person's office.
<PAGE>
10.3. Indemnification Not Exclusive. The right of indemnification
hereby provided shall not be exclusive of or affect any other rights to which
any such Covered Person may be entitled. As used in this Article 10, the term
"Covered Person" shall include such person's heirs, executors and
administrators, and a "disinterested person" is a person against whom none of
the actions, suits or other proceedings in question or another action, suit, or
other proceeding on the same or similar grounds is then or has been pending.
Nothing contained in this article shall affect any rights to indemnification to
which personnel of the Trust, other than Trustees and officers, and other
persons may be entitled by contract or otherwise under law, nor the power of the
Trust to purchase and maintain liability insurance on behalf of such person.
10.4. Limitation. Notwithstanding any provisions in the Declaration of
Trust and these By-Laws pertaining to indemnification, all such provisions are
limited by the following undertaking set forth in the rules promulgated by the
Securities and Exchange Commission:
In the event that a claim for indemnification is asserted by a Trustee,
officer or controlling person of the Trust in connection with the registered
securities of the Trust, the Trust will not make such indemnification unless (i)
the Trust has submitted, before a court or other body, the question of whether
the person to be indemnified was liable by reason of wilful misfeasance, bad
faith, gross negligence, or reckless disregard of duties, and has obtained a
final decision on the merits that such person was not liable by reason of such
conduct or (ii) in the absence of such decision, the Trust shall have obtained a
reasonable determination, based upon a review of the facts, that such person was
not liable by virtue of such conduct, by (a) the vote of a majority of Trustees
who are neither interested persons as such term is defined in the Investment
Company Act of 1940, nor parties to the proceeding or (b) an independent legal
counsel in a written opinion.
The Trust will not advance attorneys' fees or other expenses incurred by
the person to be indemnified unless the Trust shall have (i) received an
undertaking by or on behalf of such person to repay the advance unless it is
ultimately determined that such person is entitled to indemnification and one of
the following conditions shall have occurred: (x) such person shall provide
security for his undertaking, (y) the Trust shall be insured against losses
arising by reason of any lawful advances or (z) a majority of the disinterested,
non-party Trustees of the Trust, or an independent legal counsel in a written
opinion, shall have determined that based on a review of readily available facts
there is reason to believe that such person ultimately will be found entitled to
indemnification.
ARTICLE 11
Shareholders
11.1. Meetings. A meeting of the shareholders shall be called by the
Secretary whenever ordered by the Trustees, or requested in writing by the
holder or holders of at least 10% of the outstanding shares entitled to vote at
such meeting. If the meeting is a meeting of the shareholders of one or more
series or class of shares, but not a meeting of all shareholders of the Trust,
then only the shareholders of such one or more series or classes shall be
entitled to notice of and to vote at the meeting. If the Secretary, when so
ordered or requested, refuses or neglects for more than five days to call such
meeting, the Trustees, or the shareholders so requesting may, in the name of the
Secretary, call the meeting by giving notice thereof in the manner required when
notice is given by the Secretary.
<PAGE>
11.2. Access to Shareholder List. Shareholders of record may apply to
the Trustees for assistance in communicating with other shareholders for the
purpose of calling a meeting in order to vote upon the question of removal of a
Trustee. When ten or more shareholders of record who have been such for at
least six months preceding the date of application and who hold in the aggregate
shares having a net asset value of at least $25,000 or at least 1% of the
outstanding shares, whichever is less, so apply, the Trustees shall within five
business days either:
(i) afford to such applicants access to a list of names and addresses
of all shareholders as recorded on the books of the Trust; or
(ii) inform such applicants of the approximate number of shareholders
of record and the approximate cost of mailing material to them and, within
a reasonable time thereafter, mail, materials submitted by the applicants,
to all such shareholders of record. The Trustees shall not be obligated to
mail materials which they believe to be misleading or in violation of
applicable law.
11.3. Record Dates. For the purpose of determining the shareholders of
any series or class who are entitled to vote or act at any meeting or any
adjournment thereof, or who are entitled to receive payment of any dividend or
of any other distribution, the Trustees from time to time may fix a time, which
shall be not more than 90 days before the date of any meeting of shareholders or
the date of payment of any dividend or of any other distribution, as the record
date for determining the shareholders of such series or class having the right
to notice of and to vote at such meeting and any adjournment thereof or the
right to receive such dividend or distribution, and in such case only
shareholders of record or such record date shall have such right notwithstanding
any transfer of shares on the books of the Trust after the record date; or
without fixing such record date the Trustees may for any such purposes close the
register or transfer books for all or part of such period.
11.4. Place of Meetings. All meetings of the shareholders shall be
held at the principal office of the Trust or at such other place within the
United States as shall be designated by the Trustees or the President of the
Trust.
11.5. Notice of Meetings. A written notice of each meeting of
shareholders, stating the place, date and hour and the purposes of the meeting,
shall be given at least ten days before the meeting to each shareholder entitled
to vote thereat by leaving such notice with him or at his residence or usual
place of business or by mailing it, postage prepaid, and addressed to such
shareholder at his address as it appears in the records of the Trust. Such
notice shall be given by the Secretary or an Assistant Secretary or by an
officer designated by the Trustees. No notice of any meeting of shareholders
need be given to a shareholder if a written waiver of notice, executed before or
after the meeting by such shareholder or his attorney thereunto duly authorized,
is filed with the records of the meeting.
<PAGE>
11.6. Ballots. No ballot shall be required for any election unless
requested by a shareholder present or represented at the meeting and entitled to
vote in the election.
11.7. Proxies. Shareholders entitled to vote may vote either in person
or by proxy in writing dated not more than six months before the meeting named
therein, which proxies shall be filed with the Secretary or other person
responsible to record the proceedings of the meeting before being voted. Unless
otherwise specifically limited by their terms, such proxies shall entitle the
holders thereof to vote at any adjournment of such meeting but shall not be
valid after the final adjournment of such meeting.
ARTICLE 12
Amendments to the By-Laws
These By-Laws may be amended or repealed, in whole or in part, by a
majority of the Trustees then in office at any meeting of the Trustees, or by
one or more writings signed by such a majority.
<PAGE>
EXHIBIT 5(a)
INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENT
________________, 1998
Maxus Asset Management Inc.
The Tower at Erieview - 36th Floor
1301 East Ninth Street
Cleveland, OH 44114
Dear Sirs:
OTI Trust, an Ohio business trust (the "Trust"), herewith confirms its
agreement with you ("MAM") 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 MAM, 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 MAM to act as the investment adviser and administrator for its investment
portfolio OTI Special Opportunities Fund and such other investment portfolios as
the Trust may from time to time create (individually, a "Fund" or collectively,
the "Funds").
Subject to the supervision and approval of the Board of Trustees, MAM will
provide investment management of each Fund's portfolio in accordance with each
Fund's investment objective and policies as stated in its most recent Prospectus
delivered to MAM, upon which MAM shall be entitled to rely. In connection
therewith, MAM will provide investment research and supervision of each Fund's
investments and conduct a continuous program of investment, evaluation and, if
appropriate, sale and reinvestment of the Fund's assets. MAM will furnish to
the Trust such statistical information with respect to the investments which
each 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 MAM, on its own initiative,
to furnish to the Board from time to time such information as MAM may believe
appropriate for this purpose.
In providing investment management services to the Trust, MAM shall give
primary consideration to securing the most favorable price and efficient
execution. In so doing, MAM 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 MAM may be a party. The Trust recognizes that it is desirable
that MAM 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 favorable
price and efficient execution. Therefore, MAM is authorized to pay higher
brokerage commissions for the purchase and sale of securities for each 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 MAM in connection with its services to other clients.
<PAGE>
On occasions when MAM deems the purchase or sale of a security to be in the
best interest of each Fund as well as other clients, MAM, 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 MAM in the manner it considers to be the most
equitable and consistent with its fiduciary obligations to the Fund and to such
other clients.
MAM shall provide the Trust with such office facilities and clerical and
administrative services necessary to manage the business affairs of the Trust.
In addition, MAM 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, MAM shall be
responsible for the overall management of the business affairs of the Trust.
MAM shall exercise its best judgment in rendering to the Trust the services
described above and the Trust agrees as an inducement to MAM's undertaking the
same that MAM 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 MAM against any liability to the Trust or to its
security holders to which MAM 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 MAM's reckless disregard of its obligations and
duties hereunder.
MAM 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 MAM shall be deemed to include persons employed or otherwise
retained by MAM 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
MAM may desire. MAM 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, MAM shall surrender to such Fund such of
the books and records so requested.
<PAGE>
MAM 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 MAM, and provide such office space,
facilities and equipment, such clerical help and accounting, data processing,
bookkeeping and internal auditing services as the Trust shall reasonably require
in the conduct of its business and the cost of telephone service, heat, light,
power and other utilities provided to the Trust. The Trust shall 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, including typesetting, and
distributing prospectuses of the Trust and supplements thereto 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 MAM or any corporate affiliate of MAM; 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 MAM 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 MAM 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 MAM, 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 MAM now acts and will continue to act as
investment adviser to various fiduciary or other managed accounts, and the Trust
has no objection to MAM's so acting. In addition, it is understood that the
persons employed by MAM 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 MAM or any affiliate of MAM to
engage in and devote time and attention to other businesses or to render
services of whatever kind or nature.
The Trust understands that MAM 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 MAM's so acting, provided that when two or more companies
managed by MAM 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.
<PAGE>
MAM 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 MAM 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 MAM 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)
MAM. This Agreement will also terminate automatically in the event of its
assignment (as defined in said Act).
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
MAM shall look solely to the property of the Trust for the satisfaction of any
claim hereunder.
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,
OTI TRUST
By:__________________________________
Accepted: Richard A. Barone, Chairman
MAXUS ASSET MANAGEMENT INC.
By:______________________________
<PAGE>
EXHIBIT 5(b)
SUB-ADVISORY AGREEMENT
_________________, 1998
Morton H. Sachs & Company
1346 S. Third Street
Louisville, Kentucky 40208
Ladies and Gentlemen:
This will confirm the agreement by and among Maxus Asset Management Inc.
(the "Adviser"), OTI Trust (the "Trust") and Morton H. Sachs & Company (the
"Sub- Adviser") as follows:
1. The Trust is a registered open-end management investment company
currently consisting of one investment portfolio, but which may from time to
time consist of a greater number of investment portfolios (each, a "Fund"). The
Trust engages in the business of investing and reinvesting the assets of the
Funds in the manner and in accordance with the investment objective and
restrictions specified in the Trust's Registration Statement, as amended from
time to time (the "Registration Statement"), filed by the Trust under the
Investment Company Act of 1940 (the "Company Act") and the Securities Act of
1933.
2. The Trust has engaged the Adviser to manage the investing and
reinvesting of the Funds' assets and to provide the advisory services specified
elsewhere in the Investment Advisory and Administration Agreement (the "Advisory
Agreement") between the Trust and the Adviser, subject to the overall
supervision of the Board of Trustees of the Trust (the "Board of Trustees").
3. The Adviser hereby employs the Sub-Adviser to perform for the Funds
certain advisory services and the Sub-Adviser hereby accepts such employment.
Each business day, the Sub-Adviser shall furnish the Adviser with
recommendations with respect to the purchase and sale of investments for the
Fund in accordance with (i) the investment objectives, policies and restrictions
of the Fund as set forth in the Registration Statement and (ii) any other
limitations or requirements established by the Board of Trustees from time to
time as communicated in writing to the Sub-Adviser. The Sub-Adviser shall also
furnish such additional reports and information as the Adviser or the Board of
Trustees shall reasonably request. The Adviser shall retain the responsibility
for determining whether the recommended transactions shall be executed and for
effecting such transactions.
4. The Adviser shall be responsible for the fees paid to the Sub-Adviser
for its services. The Sub-Adviser agrees that it shall have no claim against
the Trust or the Fund respecting compensation under this Agreement. In
consideration of the services to be rendered by the Sub-Adviser under this
Agreement, the Adviser shall pay the Sub-Adviser on the first business day of
each month a fee at the annual rate of .50 percent of the average value of each
Fund's daily net assets. Net assets value will be calculated in the manner set
forth in the Advisory Agreement.
5. It is understood that to assist the Sub-Adviser in performing its
duties under this Agreement, Sub-Adviser will contract to obtain a proprietary
stock price indicator service from OTI Research Inc. ("OTI"). The Adviser
agrees to reimburse Sub-Adviser for 50% of the amounts paid by Sub-Adviser to
OTI. Any such contract between Sub-Adviser and OTI (i) shall be subject to the
prior approval of Adviser which approval shall not be unreasonably withheld and
(ii) shall contain a provision prohibiting OTI from providing such stock price
indicator service to any other mutual fund or mutual fund adviser or sub-
adviser.
<PAGE>
6. Sub-Adviser represents, warrants and agrees as follows;
(a) Sub-Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940 (the "Advisers Act");
(b) Sub-Adviser shall maintain all licenses and registrations
necessary to perform its duties hereunder in good order.
(c) Sub-Adviser shall conduct its responsibilities under this
Agreement at all times in conformance with the Advisers Act, the
Company Act, and any other applicable state and/or self-
regulatory organization regulations.
(d) Sub-Adviser shall be responsible for providing the personnel,
office space and equipment necessary to fulfill its obligations
under this Agreement and, except as specifically set forth in
Paragraph 5, shall pay all expenses incurred by it in fulfilling
such obligations.
7. The Sub-Adviser shall give the Trust and the Adviser the benefit of
the Sub-Adviser's best judgment and efforts in rendering services under this
Agreement. As consideration and as an inducement to the Sub-Adviser's
undertaking to render these services, the Trust and the Adviser agree that the
Sub-Adviser shall not be liable under this Agreement for any mistake in judgment
or in any other event whatsoever, provided that nothing in this Agreement shall
be deemed to protect or purport to protect the Sub-Adviser against any liability
to the Adviser, the Trust or its shareholders to which the Sub-Adviser would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of the Sub-Adviser's duties under this Agreement
or by reason of reckless disregard of its obligations and duties hereunder.
8. This Agreement shall become effective as of its execution date and
shall thereafter continue in effect, provided that this Agreement shall continue
in effect for a period of more than two years from the date hereof only so long
as the continuance is specifically approved at least annually (a) by the vote of
a majority of a Fund's outstanding voting securities (as defined in the Company
Act) or by the Board of Trustees or (b) by the vote, cast in person at a meeting
called specifically for the purpose of continuing this Sub-Advisory Agreement,
of a majority of the Trustees who are not parties to this contract or
"interested persons" (as defined in the Company Act) of any such party. This
Agreement may be terminated, upon 60 days' written notice to the Sub-Adviser, by
the Trust without the payment of any penalty, by a vote of a majority of a
Fund's outstanding voting securities (as defined in the Company Act) or by a
vote of a majority of the entire Board of Trustees. The Sub-Adviser may
terminate this Agreement on 60 days' written notice to the Trust. This
Agreement shall terminate automatically in the event of its "assignment" (as
defined in the Company Act).
9. Adviser and Sub-Adviser shall for all purposes herein be deemed to be
independent contractors and, unless expressly authorized to do so, shall have no
authority to act for or represent the Trust, the Fund, or each other in any way,
or in any way be deemed an agent for the Trust, the Fund, or each other.
<PAGE>
10. This contract shall be governed by and construed in accordance with
the laws of the State of Ohio.
11. 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, and the
Adviser and the Sub-Adviser shall look solely to the property of the Trust for
the satisfaction of any claim.
If the foregoing correctly sets forth the agreement by and among the Trust,
the Adviser and the Sub-Adviser, please so indicate by signing and returning to
the Company the enclosed copy hereof.
Very truly yours,
MAXUS ASSET MANAGEMENT INC.
By:__________________________________
Richard A. Barone, President
Accepted and Agreed:
MORTON H. SACHS & COMPANY
By:_____________________________
Morton H. Sachs, President
OTI TRUST
By:_______________________________
Richard A. Barone, Chairman
<PAGE>
EXHIBIT 6(a)
DISTRIBUTION AGREEMENT
THIS AGREEMENT dated as of the _____ day of ___________, 1998 by and
between OTI TRUST (the "Trust"), a business trust established and existing under
the laws of the State of Ohio, and MAXUS SECURITIES CORP (the "Distributor"), a
corporation organized and existing under the laws of the State of Ohio.
W I T N E S S E T H:
In consideration of the mutual covenants hereinafter contained, the parties
hereto agree as follows:
Section 1. Appointment of the Distributor. The Trust hereby appoints
the Distributor as its agent to arrange for the sale of shares of the Trust on
the terms and for the period set forth in this Agreement, and the Distributor
hereby accepts such appointment and agrees to act hereunder. It is acknowledged
that the Trust is authorized to issue shares in one or more series, with each
series representing shares of a separate investment portfolio of the Trust (a
"Fund"), and with the shares of each Fund being divided into Investor Shares and
Institutional Shares. The term "Shares" as used herein shall refer to shares of
each class of each Fund of the Trust. It is also acknowledged that this
appointment is not exclusive, and that the Trust may appoint other persons as
distributors for its Shares.
Section 2. Services and Duties of the Distributor.
(a) The Distributor agrees to arrange to sell, as agent for the
Trust, from time to time during the term of this Agreement, Shares upon the
terms described in the Prospectus. As used in this Agreement, the term
"Prospectus" shall mean the prospectus included in the Trust's Registration
Statement most recently filed by the Trust with the Securities and Exchange
Commission and effective under the Securities Act of 1933, as amended (the
"1933 Act"), and the Investment Company Act of 1940, as amended (the "1940
Act"), as such Registration Statement is amended by any amendments thereto
at the time in effect.
(b) Upon commencement of the continuous public offering of the Shares
of the Trust, the Distributor will hold itself available to receive orders,
satisfactory to the Distributor, for the purchase of Shares and will accept
such orders on behalf of the Trust as of the time of receipt of such orders
and will transmit such orders as are so accepted to the Trust's Dividend
and Transfer Agent as promptly as practicable. Purchase orders shall be
deemed effective at the time and in the manner set forth in the Prospectus.
(c) The Distributor, as agent for the Trust and in its discretion,
may enter into agreements with such registered and qualified retail broker-
dealers as it may select pursuant to which such broker-dealers may also
arrange for the sale of Shares.
(d) The offering price of the Shares of each class of each Fund shall
be the net asset value (as described in the Prospectus, as amended from
time to time and determined as set forth in the Prospectus) per Share of
such class of such Fund next determined following receipt of an order. The
Trust shall furnish the Distributor with all possible promptness advice of
each computation of net asset value.
<PAGE>
(e) The Distributor shall not be obligated to sell any certain number
of Shares, and nothing herein contained shall prevent the Distributor from
entering into like distribution agreements with other investment companies
so long as the performance of its obligations hereunder is not impaired
thereby.
Section 3. Duties of the Trust.
(a) The Trust agrees to sell its Shares so long as it has Shares
available for sale and to cause its Dividend and Transfer Agent to issue,
if requested by the purchaser, certificates for Shares, registered in such
names and amounts as the Distributor has requested in writing, as promptly
as practicable after receipt by the Trust of the purchase price therefor
and thereof and written request of the Distributor therefor.
(b) The Trust shall keep the Distributor fully informed with regard
to its affairs and shall furnish to the Distributor copies of all
information, financial statements and other papers which the Distributor
may reasonably request for use in connection with the distribution of
Shares of the Trust. This shall include, without limitation, one certified
copy of all financial statements of the Trust prepared by independent
accountants and such reasonable number of copies of its most current
Prospectus and annual and interim reports as the Distributor may request.
The Trust shall cooperate fully in the efforts of the Distributor to
arrange for the sale of the Shares and in the performance of the
Distributor under this Agreement.
(c) The Trust agrees to file from time to time such amendments,
reports and other documents as may be necessary in order that there may be
no untrue statement of a material fact in a Registration Statement or
Prospectus, or necessary in order that there may be no omission to state a
material fact in the Registration Statement or Prospectus which omission
would make the statements therein, in light of the circumstances under
which they were made, misleading.
(d) The Trust shall use its best efforts to qualify and maintain the
qualification of an appropriate number of its Shares for sale under the
securities laws of such states as the Distributor and the Trust may
approve, and, if necessary or appropriate in connection therewith, to
qualify and maintain the qualification of the Trust as a broker or dealer
in such states; provided that the Trust shall not be required to amend the
Declaration of Trust or its By-Laws to comply with the laws of any state,
to maintain an office in any state, to change the terms of the offering of
its Shares in any state from the terms set forth in its Registration
Statement and Prospectus, to qualify as a foreign corporation, business
trust or similar entity in any state or to consent to service of process in
any state other than with respect to claims arising out of the offering of
its Shares. The Distributor shall furnish such information and other
material relating to its affairs and activities as may be required by the
Trust in connection with such qualifications.
<PAGE>
Section 4. Compensation and Expenses.
(a) Except as set forth in this Section, (i) the Distributor shall
not receive any compensation for its services under this Agreement and (ii)
the Distributor shall not be required to bear any costs in connection with
the offering of Shares for sale to the public.
(b) The Trust shall bear all costs and expenses of the continuous
offering of its Shares, including: (i) fees and disbursements of its
counsel and auditors, (ii) the preparation, filing and printing of any
registration statements and/or prospectuses required by and under the
federal securities laws, (iii) the preparation and mailing of annual and
interim reports and proxy materials to shareholders and (iv) the
qualification of the Shares for sale and of the Trust as a broker or dealer
under the securities laws of such states or other jurisdictions as shall be
selected by the Trust and by the Distributor pursuant to Section 3(d)
hereof and the cost and expenses payable to each such state for continuing
qualification therein.
(c) The Distributor agrees to provide the services described in the
Trust's Distribution and Shareholder Servicing Plan (Investor Shares Only)
of even date herewith. In consideration for such services, the Trust shall
pay to the Distributor a fee at the annual rate of .30% of the average
daily net assets of the Investor Shares of each Fund.
Section 5. Indemnification. The Trust agrees to indemnify, defend and
hold the Distributor, its officers and directors and any person who controls the
Distributor within the meaning of Section 15 of the 1933 Act or Section 20 of
the Securities Exchange Act of 1934, as amended (the "1934 Act"), free and
harmless from and against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending such claims, demands or
liabilities and any counsel fees and expenses incurred in connection therewith)
which the Distributor, its officers, directors or any such controlling persons
may incur under the 1933 Act, the 1934 Act, or under common law or otherwise,
arising out of or based upon any untrue statement of a material fact contained
in the Registration Statement or Prospectus or arising out of or based upon any
alleged omission to state a material fact required to be stated in either
thereof or necessary to make the statements in either thereof not misleading,
except insofar as such claims, demands, liabilities or expenses arise out of or
are based upon any such untrue statement or omission or alleged untrue statement
or omission made in reliance upon and in conformity with information furnished
in writing by the Distributor to the Trust for use in the Registration Statement
or Prospectus; provided, however, that this indemnity agreement, to the extent
that it might require indemnity of any person who is also an officer or trustee
of the Trust or who controls the Trust within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act, shall not inure to the benefit of such
officer, trustee or controlling person unless a court of competent jurisdiction
shall determine, or it shall have been determined by controlling precedent, that
such result would not be against public policy as expressed in the 1933 Act; and
further provided, that in no event shall anything contained herein be so
construed as to protect the Distributor against any liability to the Trust or to
its security holders to which the Distributor would otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the performance
of its duties, or by reason of its reckless disregard of its obligations under
this Agreement. The Trust's agreement to indemnify the Distributor, its
officers and directors and any such controlling person as aforesaid is expressly
conditioned upon the Trust being promptly notified of any action brought against
the Distributor, its officers or directors, or any such controlling person, such
notification to be given by letter or telegram addressed to the Trust at its
principal business office. The Trust agrees promptly to notify the Distributor
of the commencement of any litigation or proceedings against it or any of its
officers or directors in connection with the issue and sale of any of its
Shares.
<PAGE>
The Distributor agrees to indemnify, defend and hold the Trust, its
trustees and officers and any person who controls the Trust, if any, within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, free and
harmless from and against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection therewith) which the
Trust, its trustees or officers or any such controlling person may incur under
the 1933 Act, the 1934 Act, or under common law or otherwise, but only to the
extent that such liability or expense incurred by the Trust, its trustees or
officers or such controlling person resulting from such claims or demands shall
arise out of or be based upon (i) any alleged untrue statement of a material
fact contained in information furnished in writing by the Distributor to the
Trust for use in the Registration Statement or Prospectus; (ii) any failure of
the Distributor or any investor purchasing Shares of the Trust through the
Distributor to timely transmit good payment for the purchase of Trust Shares; or
(iii) any breach of the obligations of the Distributor under Section 6 of this
Agreement. The Distributor's agreement to indemnify the Trust, its trustees and
officers and any such controlling person as aforesaid, is expressly conditioned
upon the Distributor being promptly notified of any event giving rise to rights
of indemnification hereunder, including any action brought against the Trust,
its trustees or officers or any such controlling person, such notification being
given to the Distributor at its principal business office.
Section 6. Compliance with Securities Laws. The Trust represents that
it is registered as a diversified, open-end management investment company under
the 1940 Act, and agrees that it will comply with all of the provisions of the
1940 Act and of the rules and regulations thereunder. The Trust and the
Distributor each agree to comply with all of the applicable terms and provisions
of the 1940 Act, the 1933 Act and, subject to the provisions of Section 3(d),
all applicable state "Blue Sky" laws. The Distributor agrees to comply with all
of the applicable terms and provisions of the 1934 Act.
Section 7. Terms of Agreement; Termination. This Agreement shall
commence on the date first set forth above. This Agreement shall continue in
effect for a period more than two years from the date hereof only so long as
such continuance is specifically approved at least annually in conformity with
the requirements of the 1940 Act, including Rule 12b-1 thereunder.
This Agreement shall terminate automatically in the event of its assignment
(as defined by the 1940 Act). In addition, this Agreement may be terminated by
either party at any time, without penalty, on not more than sixty days' nor less
than thirty days' written notice to the other party.
Section 8. Notices. Any notice required to be given pursuant to this
Agreement shall be deemed duly given if delivered or mailed by registered mail,
postage prepaid, (i) to the Distributor at Maxus Securities Corp, The Tower at
Erieview, 36th Floor, 1301 East Ninth Street, Cleveland, Ohio 44114 or (2) to
the Trust at MaxFund Trust, The Tower at Erieview, 36th Floor, 1301 East Ninth
Street, Cleveland, Ohio 44114.
Section 9. Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Ohio.
<PAGE>
Section 10. Non-Liability of Shareholders, Trustees, Officers,
Employees, Representatives and Agents. It is expressly agreed that the
obligation of the Trust hereunder shall not be binding upon nor resort be had to
the private property of any of the trustees, Shareholders, nominees, officers,
agents or employees of the Trust, personally, but bind only the Trust property,
as provided in the Declaration of Trust. The execution and delivery of this
Agreement have been authorized by the trustees of the Trust and signed by the
officers of the Trust, acting as such, and neither such authorization by such
trustees nor such execution and delivery by such officers shall be deemed to
have been made by any of them individually, or to impose any liability on any of
them personally, but shall bind only the Trust property as provided in the
Declaration of Trust.
Section 11. Complete Agreement. This Agreement contains the complete
agreement with respect to the subject matter hereof and supersedes any prior
understandings, agreements or representations by or between the parties related
to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
OTI TRUST
By:__________________________________
Richard A. Barone, Chairman
MAXUS SECURITIES CORP
By:__________________________________
EXHIBIT 6(b)
<PAGE>
DISTRIBUTION AGREEMENT
THIS AGREEMENT dated as of the _____ day of ___________, 1998 by and
between OTI TRUST (the "Trust"), a business trust established and existing under
the laws of the State of Ohio, and MORTON H. SACHS & COMPANY (the
"Distributor"), a corporation organized and existing under the laws of the State
of Ohio.
W I T N E S S E T H:
In consideration of the mutual covenants hereinafter contained, the parties
hereto agree as follows:
Section 1. Appointment of the Distributor. The Trust hereby appoints
the Distributor as its agent to arrange for the sale of shares of the Trust on
the terms and for the period set forth in this Agreement, and the Distributor
hereby accepts such appointment and agrees to act hereunder. It is acknowledged
that the Trust is authorized to issue shares in one or more series, with each
series representing shares of a separate investment portfolio of the Trust (a
"Fund"), and with the shares of each Fund being divided into Investor Shares and
Institutional Shares. The term "Shares" as used herein shall refer to shares of
each class of each Fund of the Trust. It is also acknowledged that this
appointment is not exclusive, and that the Trust may appoint other persons as
distributors for its Shares.
Section 2. Services and Duties of the Distributor.
(a) The Distributor agrees to arrange to sell, as agent for the
Trust, from time to time during the term of this Agreement, Shares upon the
terms described in the Prospectus. As used in this Agreement, the term
"Prospectus" shall mean the prospectus included in the Trust's Registration
Statement most recently filed by the Trust with the Securities and Exchange
Commission and effective under the Securities Act of 1933, as amended (the
"1933 Act"), and the Investment Company Act of 1940, as amended (the "1940
Act"), as such Registration Statement is amended by any amendments thereto
at the time in effect.
(b) Upon commencement of the continuous public offering of the Shares
of the Trust, the Distributor will hold itself available to receive orders,
satisfactory to the Distributor, for the purchase of Shares and will accept
such orders on behalf of the Trust as of the time of receipt of such orders
and will transmit such orders as are so accepted to the Trust's Dividend
and Transfer Agent as promptly as practicable. Purchase orders shall be
deemed effective at the time and in the manner set forth in the Prospectus.
(c) The Distributor, as agent for the Trust and in its discretion,
may enter into agreements with such registered and qualified retail broker-
dealers as it may select pursuant to which such broker-dealers may also
arrange for the sale of Shares.
(d) The offering price of the Shares of each class of each Fund shall
be the net asset value (as described in the Prospectus, as amended from
time to time and determined as set forth in the Prospectus) per Share of
such class of such Fund next determined following receipt of an order. The
Trust shall furnish the Distributor with all possible promptness advice of
each computation of net asset value.
<PAGE>
(e) The Distributor shall not be obligated to sell any certain number
of Shares, and nothing herein contained shall prevent the Distributor from
entering into like distribution agreements with other investment companies
so long as the performance of its obligations hereunder is not impaired
thereby.
Section 3. Duties of the Trust.
(a) The Trust agrees to sell its Shares so long as it has Shares
available for sale and to cause its Dividend and Transfer Agent to issue,
if requested by the purchaser, certificates for Shares, registered in such
names and amounts as the Distributor has requested in writing, as promptly
as practicable after receipt by the Trust of the purchase price therefor
and thereof and written request of the Distributor therefor.
(b) The Trust shall keep the Distributor fully informed with regard
to its affairs and shall furnish to the Distributor copies of all
information, financial statements and other papers which the Distributor
may reasonably request for use in connection with the distribution of
Shares of the Trust. This shall include, without limitation, one certified
copy of all financial statements of the Trust prepared by independent
accountants and such reasonable number of copies of its most current
Prospectus and annual and interim reports as the Distributor may request.
The Trust shall cooperate fully in the efforts of the Distributor to
arrange for the sale of the Shares and in the performance of the
Distributor under this Agreement.
(c) The Trust agrees to file from time to time such amendments,
reports and other documents as may be necessary in order that there may be
no untrue statement of a material fact in a Registration Statement or
Prospectus, or necessary in order that there may be no omission to state a
material fact in the Registration Statement or Prospectus which omission
would make the statements therein, in light of the circumstances under
which they were made, misleading.
(d) The Trust shall use its best efforts to qualify and maintain the
qualification of an appropriate number of its Shares for sale under the
securities laws of such states as the Distributor and the Trust may
approve, and, if necessary or appropriate in connection therewith, to
qualify and maintain the qualification of the Trust as a broker or dealer
in such states; provided that the Trust shall not be required to amend the
Declaration of Trust or its By-Laws to comply with the laws of any state,
to maintain an office in any state, to change the terms of the offering of
its Shares in any state from the terms set forth in its Registration
Statement and Prospectus, to qualify as a foreign corporation, business
trust or similar entity in any state or to consent to service of process in
any state other than with respect to claims arising out of the offering of
its Shares. The Distributor shall furnish such information and other
material relating to its affairs and activities as may be required by the
Trust in connection with such qualifications.
<PAGE>
Section 4. Compensation and Expenses.
(a) Except as set forth in this Section, (i) the Distributor shall
not receive any compensation for its services under this Agreement and (ii)
the Distributor shall not be required to bear any costs in connection with
the offering of Shares for sale to the public.
(b) The Trust shall bear all costs and expenses of the continuous
offering of its Shares, including: (i) fees and disbursements of its
counsel and auditors, (ii) the preparation, filing and printing of any
registration statements and/or prospectuses required by and under the
federal securities laws, (iii) the preparation and mailing of annual and
interim reports and proxy materials to shareholders and (iv) the
qualification of the Shares for sale and of the Trust as a broker or dealer
under the securities laws of such states or other jurisdictions as shall be
selected by the Trust and by the Distributor pursuant to Section 3(d)
hereof and the cost and expenses payable to each such state for continuing
qualification therein.
(c) The Distributor agrees to provide the services described in the
Trust's Distribution and Shareholder Servicing Plan (Investor Shares Only)
of even date herewith. In consideration for such services, the Trust shall
pay to the Distributor a fee at the annual rate of .30% of the average
daily net assets of the Investor Shares of each Fund.
Section 5. Indemnification. The Trust agrees to indemnify, defend and
hold the Distributor, its officers and directors and any person who controls the
Distributor within the meaning of Section 15 of the 1933 Act or Section 20 of
the Securities Exchange Act of 1934, as amended (the "1934 Act"), free and
harmless from and against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending such claims, demands or
liabilities and any counsel fees and expenses incurred in connection therewith)
which the Distributor, its officers, directors or any such controlling persons
may incur under the 1933 Act, the 1934 Act, or under common law or otherwise,
arising out of or based upon any untrue statement of a material fact contained
in the Registration Statement or Prospectus or arising out of or based upon any
alleged omission to state a material fact required to be stated in either
thereof or necessary to make the statements in either thereof not misleading,
except insofar as such claims, demands, liabilities or expenses arise out of or
are based upon any such untrue statement or omission or alleged untrue statement
or omission made in reliance upon and in conformity with information furnished
in writing by the Distributor to the Trust for use in the Registration Statement
or Prospectus; provided, however, that this indemnity agreement, to the extent
that it might require indemnity of any person who is also an officer or trustee
of the Trust or who controls the Trust within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act, shall not inure to the benefit of such
officer, trustee or controlling person unless a court of competent jurisdiction
shall determine, or it shall have been determined by controlling precedent, that
such result would not be against public policy as expressed in the 1933 Act; and
further provided, that in no event shall anything contained herein be so
construed as to protect the Distributor against any liability to the Trust or to
its security holders to which the Distributor would otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the performance
of its duties, or by reason of its reckless disregard of its obligations under
this Agreement. The Trust's agreement to indemnify the Distributor, its
officers and directors and any such controlling person as aforesaid is expressly
conditioned upon the Trust being promptly notified of any action brought against
the Distributor, its officers or directors, or any such controlling person, such
notification to be given by letter or telegram addressed to the Trust at its
principal business office. The Trust agrees promptly to notify the Distributor
of the commencement of any litigation or proceedings against it or any of its
officers or directors in connection with the issue and sale of any of its
Shares.
<PAGE>
The Distributor agrees to indemnify, defend and hold the Trust, its
trustees and officers and any person who controls the Trust, if any, within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, free and
harmless from and against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection therewith) which the
Trust, its trustees or officers or any such controlling person may incur under
the 1933 Act, the 1934 Act, or under common law or otherwise, but only to the
extent that such liability or expense incurred by the Trust, its trustees or
officers or such controlling person resulting from such claims or demands shall
arise out of or be based upon (i) any alleged untrue statement of a material
fact contained in information furnished in writing by the Distributor to the
Trust for use in the Registration Statement or Prospectus; (ii) any failure of
the Distributor or any investor purchasing Shares of the Trust through the
Distributor to timely transmit good payment for the purchase of Trust Shares; or
(iii) any breach of the obligations of the Distributor under Section 6 of this
Agreement. The Distributor's agreement to indemnify the Trust, its trustees and
officers and any such controlling person as aforesaid, is expressly conditioned
upon the Distributor being promptly notified of any event giving rise to rights
of indemnification hereunder, including any action brought against the Trust,
its trustees or officers or any such controlling person, such notification being
given to the Distributor at its principal business office.
Section 6. Compliance with Securities Laws. The Trust represents that
it is registered as a diversified, open-end management investment company under
the 1940 Act, and agrees that it will comply with all of the provisions of the
1940 Act and of the rules and regulations thereunder. The Trust and the
Distributor each agree to comply with all of the applicable terms and provisions
of the 1940 Act, the 1933 Act and, subject to the provisions of Section 3(d),
all applicable state "Blue Sky" laws. The Distributor agrees to comply with all
of the applicable terms and provisions of the 1934 Act.
Section 7. Terms of Agreement; Termination. This Agreement shall
commence on the date first set forth above. This Agreement shall continue in
effect for a period more than two years from the date hereof only so long as
such continuance is specifically approved at least annually in conformity with
the requirements of the 1940 Act, including Rule 12b-1 thereunder.
This Agreement shall terminate automatically in the event of its assignment
(as defined by the 1940 Act). In addition, this Agreement may be terminated by
either party at any time, without penalty, on not more than sixty days' nor less
than thirty days' written notice to the other party.
Section 8. Notices. Any notice required to be given pursuant to this
Agreement shall be deemed duly given if delivered or mailed by registered mail,
postage prepaid, (i) to the Distributor at Morton H. Sachs & Company, 1346 South
Third Street, Louisville, Kentucky 40208 or (ii) to the Trust at OTI Trust, The
Tower at Erieview, 36th Floor, 1301 East Ninth Street, Cleveland, Ohio 44114.
Section 9. Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Ohio.
<PAGE>
Section 10. Non-Liability of Shareholders, Trustees, Officers,
Employees, Representatives and Agents. It is expressly agreed that the
obligation of the Trust hereunder shall not be binding upon nor resort be had to
the private property of any of the trustees, Shareholders, nominees, officers,
agents or employees of the Trust, personally, but bind only the Trust property,
as provided in the Declaration of Trust. The execution and delivery of this
Agreement have been authorized by the trustees of the Trust and signed by the
officers of the Trust, acting as such, and neither such authorization by such
trustees nor such execution and delivery by such officers shall be deemed to
have been made by any of them individually, or to impose any liability on any of
them personally, but shall bind only the Trust property as provided in the
Declaration of Trust.
Section 11. Use of Name. The Trust recognizes that directors, officers
and employees of the Distributor may from time to time serve as directors,
officers and employees of other corporations (including other investment
companies) and that such other corporations may include the name "OTI" as part
of their name, and that the Distributor or its affiliates may enter into
distribution or other agreements with such other corporations. If the
Distributor ceases to act as the Trust's distributor of shares or if Maxus Asset
Management Inc, an affiliate of the Distributor, ceases to act as the Trust's
investment adviser, the Trust agrees that, at the Distributor's request, the
Trust's license to use the word "OTI" will terminate and the Trust will take all
necessary action to change the name of all Funds of the Trust to a name not
including the word "OTI".
Section 12. Complete Agreement. This Agreement contains the complete
agreement with respect to the subject matter hereof and supersedes any prior
understandings, agreements or representations by or between the parties related
to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
OTI TRUST
By:__________________________________
Richard A. Barone, Chairman
MORTON H. SACHS & COMPANY
By:__________________________________
EXHIBIT 9(a)
<PAGE>
ADMINISTRATION AGREEMENT
THIS AGREEMENT is made and entered into this ____ day of __________, 1998,
by and between OTI Trust, an Ohio 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 beneficial interest of each
class of each portfolio 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;
(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;
<PAGE>
(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".
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.
<PAGE>
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 Ohio.
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.
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.
<PAGE>
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
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.
<PAGE>
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.
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.
<PAGE>
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 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.
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:
OTI Trust Maxus Information Systems, Inc.
The Tower at Erieview, 36th Floor The Tower at Erieview, 36th Floor
1301 East Ninth Street 1301 East Ninth Street
Cleveland, OH 44114 Cleveland, OH 44114
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
OTI TRUST MAXUS INFORMATION SYSTEMS, INC.
By: By:
Richard A. Barone
President Its: ___________________________
<PAGE>
EXHIBIT "A"
FEE SCHEDULE
The following fees will be paid in respect of each portfolio of the Fund:
$6.75 per shareholder account per annum, payable monthly, subject to a $775
minimum per month.*
plus:
$12.00 per month for each state in which a portfolio is registered under
the blue sky laws of such state.*
__________________
*Notwithstanding the foregoing, if for any month the average net assets of a
portfolio are less than $10,000,000, all of the above dollar amounts will be
reduced based on the proportion which such average net assets bears to
$10,000,000.
<PAGE>
EXHIBIT 9(b)
ACCOUNTING SERVICES AGREEMENT
THIS AGREEMENT is made and entered into this ____ day of __________, 1998,
by and between OTI Trust, an Ohio 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 class of shares of each portfolio 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:
<PAGE>
* Cash receipts journal
* Cash disbursements journal
* Dividend record
* Purchase and sales - portfolio securities journals
* Subscription and redemption journals
* Security ledgers
* Broker ledger
* General ledger
* Daily expense accruals
* Daily income accruals
* Securities and monies borrowed or loaned and collateral
therefore
* Foreign currency journals
* 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 reimbursable expenses within
five days following the receipt of the respective billing notice.
<PAGE>
3. LIMITATION OF LIABILITY OF MIS.
(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.
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.
<PAGE>
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.
(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.
<PAGE>
(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:
OTI Trust Maxus Information Systems, Inc.
The Tower at Erieview, 36th Floor The Tower at Erieview, 36th Floor
1301 East Ninth Street 1301 East Ninth Street
Cleveland, OH 44114 Cleveland, OH 44114
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
OTI TRUST MAXUS INFORMATION
SYSTEMS, INC.
By:_____________________________ By:______________________________
Richard A. Barone,
President Its:______________________________
<PAGE>
EXHIBIT A
FEE SCHEDULE
The following fees will be paid in respect of each portfolio of the Fund:
ANNUAL FEE
AVERAGE PORTFOLIO (payable monthly at
NET ASSETS the end of
each month)
First $25 Million in Assets $17,400.00*
Next $25 Million in Assets 8,500.00
Each Additional $25 Million in Assets 4,750.00
*Notwithstanding the foregoing, if the average net asset value of the portfolio
for the month is less than $10,000,000, the portfolio will pay an annual fee
(payable monthly) equal to .174% of average net assets for the month.
<PAGE>
EXHIBIT 13(a)
MAXUS ASSET MANAGEMENT INC.
The Tower at Erieview, 36th Floor
1301 East Ninth Street
Cleveland, Ohio 44114
____________, 1998
OTI Trust
The Tower at Erieview, 36th Floor
1301 East Ninth Street
Cleveland, OH 44114
Re: Purchase Agreement for Initial Capital
Gentlemen:
We are purchasing from you today 5,000 Institutional Shares of OTI Special
Opportunities Fund, a portfolio of OTI Trust, an Ohio business trust (the
"Trust"), at a price of $10.00 per share, for an aggregate price of $50,000, to
provide the initial capital you require pursuant to Section 14 of the Investment
Company Act of 1940 in order to make a public offering of shares of the Fund.
We hereby represent that we are acquiring said shares for investment and
not for distribution or resale to the public.
Very truly yours,
MAXUS ASSET MANAGEMENT INC.
By: ______________________________
Richard A. Barone, President
<PAGE>
EXHIBIT 13(b)
MORTON H. SACHS & COMPANY
1346 South Third Street
Louisville, Kentucky 40208
____________, 1998
OTI Trust
The Tower at Erieview, 36th Floor
1301 East Ninth Street
Cleveland, OH 44114
Re: Purchase Agreement for Initial Capital
Gentlemen:
We are purchasing from you today 5,000 Institutional Shares of OTI Special
Opportunities Fund, a portfolio of OTI Trust, an Ohio business trust (the
"Trust"), at a price of $10.00 per share, for an aggregate price of $50,000, to
provide the initial capital you require pursuant to Section 14 of the Investment
Company Act of 1940 in order to make a public offering of shares of the Fund.
We hereby represent that we are acquiring said shares for investment and
not for distribution or resale to the public.
Very truly yours,
MORTON H. SACHS & COMPANY
By: ______________________________
Morton H. Sachs, President
<PAGE>
EXHIBIT 15
DISTRIBUTION AND SHAREHOLDER SERVICING PLAN
(Investor Shares Only)
WHEREAS, OTI Trust (the "Trust") engages in business as an open-end
management investment company and is registered as such under the Investment
Company Act of 1940, as amended (the "Act"); and
WHEREAS, the Trust currently is comprised of a single series, but the
number of series may be increased from time to time (each, a "Portfolio"); and
WHEREAS, the shares of each Portfolio are divided into two classes, namely,
Investor Shares and Institutional Shares; and
WHEREAS, the Trust desires to adopt this Plan pursuant to Rule 12b-1 under
the Act, and the Trust's Board has determined that there is a reasonable
likelihood that adoption of this Plan will benefit the Portfolios and holders of
the Investor Shares; and
WHEREAS, the Trust engages Maxus Securities Corp. and Morton H. Sachs &
Company (the "Distributors") as distributors for the Portfolios' shares (the
"Shares") pursuant to separate Distribution Agreements dated as of the date
hereof.
NOW, THEREFORE, the Trust hereby adopts, and the Distributors hereby agree
to the terms of, this Plan in accordance with Rule 12b-1 under the Act on the
following terms and conditions:
1. (a) Each Portfolio shall pay each Distributor a shareholder
servicing and distribution fee at the annual rate of .30% of the
average daily net assets of the Investor Shares of such
Portfolio.
(b) Such fee will be used by the Distributors to make payments
for administration, shareholder services and distribution
assistance for holders of Investor Shares, including, but not
limited to (i) compensation to securities dealers and other
persons and organizations (collectively, "Service
Organizations"), for providing distribution assistance with
respect to Investor Shares, (ii) compensation to Service
Organizations for providing administration, accounting and other
shareholder services with respect to Investor Shares, and (iii)
otherwise promoting the sale of Investor Shares, including paying
for the preparation of advertising and sales literature and the
printing and distribution of such materials to prospective
investors. Each Distributor shall determine the amounts to be
paid to third parties and the basis on which such payments will
be made. Payments to a third party are subject to compliance by
the third party with the terms of any related Plan agreement
between the third party and the Distributor.
<PAGE>
(c) For the purposes of determining the fees payable under this
Plan, the value of each Portfolio's net assets shall be computed
in the manner specified in the Trust's charter documents as then
in effect for the computation of the value of such Portfolio's
net assets.
2. As respects each Portfolio, this Plan shall not take effect until it,
together with any related agreement, has been approved by vote of a
majority of both (a) the Trust's Board and (b) those Trustees who are
not "interested persons" of the Trust (as defined by the Act) and who
have no direct or indirect financial interest in the operation of this
Plan or any agreements related to it (the "Rule 12b-1 Trustees") cast
in person at a meeting (or meetings) called for the purpose of voting
on this Plan and such related Agreements.
3. As respects each Portfolio, this Plan shall remain in effect until
December 31, 1998 and shall continue in effect thereafter so long as
such continuance is specifically approved at least annually in the
manner provided for approval of this Plan in paragraph 2.
4. Each Distributor shall provide to the Trust's Board and the Board
shall review, at least quarterly, a written report of amounts paid
hereunder and the purposes for which they were made.
5. As respects each Portfolio, this Plan may be terminated at any time by
vote of a majority of the Rule 12b-1 Trustees or by a vote of a
majority of the outstanding Investor Shares of such Portfolio.
6. This Plan may not be amended as to any Portfolio to increase
materially the amount of compensation payable pursuant to paragraph 1
hereof unless such amendment is approved by a vote of at least a
majority (as defined in the Act) of the outstanding Investor Shares of
such Portfolio. No material amendment to the Plan shall be made
unless approved in the manner provided in paragraph 2 hereof.
7. While this Plan is in effect, the selection and nomination of the
Trustees who are not interested persons (as defined in the Act) of the
Trust shall be committed to the discretion of the Trustees who are not
such interested persons.
8. The Trust shall preserve copies of this Plan and any related
agreements and all reports made pursuant to paragraph 4 hereof, for a
period of not less than six years from the date of this Plan, any such
agreement or any such report, as the case may be, the first two years
in an easily accessible place.
9. This Plan may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument. The name OTI Trust is
the designation of the Trustees for the time being under a Declaration
of Trust dated September 15, 1998, as amended from time to time, and
all persons dealing with the Trust must look solely to the property of
the Trust for enforcement of any claims against the Trust as neither
the Trustees, officers, agents or shareholders assume any personal
liability for obligations entered into on behalf of the Trust.
<PAGE>
IN WITNESS WHEREOF, the Trust, on behalf of the Portfolios, and the
Distributors have executed this Plan as of the date set forth below.
Dated: _________________, 1998
OTI TRUST
By:
MAXUS SECURITIES CORP.
By:
MORTON H. SACHS & COMPANY
By:
<PAGE>
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
<PAGE>
