As filed with the Securities and Exchange Commission on March 9, 2000
Securities Act File No. 333-92371
Investment Company Act File No. 811-09717
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933 |_|
Pre-Effective Amendment No. 1 |X|
Post-Effective Amendment No. |_|
and
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940 |_|
Amendment No. 1 |X|
(Check appropriate box or boxes)
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VENUS SERIES TRUST
(Exact Name of Registrant as Specified in its Charter)
31 Milk Street
Third Floor
Boston, MA 02109
(Address of Principal Executive Offices)
(617) 423-1901
(Registrant's Telephone Number, including Area Code)
Vikas Mehrotra
Venus Capital Management, Inc.
31 Milk Street
Third Floor
Boston, MA 02109
(Name and address of agent for service)
--------------------------
Copies to:
Harsha Murthy, Esq.
Duval & Stachenfeld LLP
300 East 42nd Street
New York, New York 10017
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Approximate date of proposed public offering: As soon as practical after the
effective date of the Registration Statement.
Registrant declares that it is registering an indefinite number or amount of its
securities by this Registration Statement.
--------------------------
The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE>
SUBJECT TO COMPLETION, DATED MARCH 9, 2000
e[GRAPHIC OMITTED]
THE INDIA TECHNOLOGY FUND
The India Technology Fund (the "Fund") is a stock portfolio of Venus Series
Trust, an open-end management investment company (the "Trust"). The Fund is a
non-diversified fund having the primary investment objective of obtaining
long-term capital appreciation by investing in securities of Indian technology
companies. It is anticipated that the Fund will commence investment activities
upon capitalization of $1 million (which amount may include the Fund's initial
capitalization of $500,000). Until the Fund has received subscriptions
aggregating $1 million, the Fund's offering proceeds will be held in an
interest-bearing money-market account. If the Fund does not receive an aggregate
of $1 million in subscriptions within three months of the initial offering of
its shares, to the extent you have subscribed to purchase the Fund's shares and
have made payment for such shares, the Fund shall refund your payment plus
interest.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED
OR DISAPPROVED THESE SECURITIES OR PASSED UPON
THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
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TABLE OF CONTENTS
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Risk/Return Summary...........................................................2
Fee Table.....................................................................3
Investment Objective/Principal Investment Strategies..........................3
Risk Factors..................................................................4
Performance...................................................................8
How to Purchase Shares........................................................9
How to Sell and Redeem Shares................................................10
Investment Management........................................................12
Distributions and Taxes......................................................13
Distribution Plan............................................................14
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PROSPECTUS
March , 2000
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
<PAGE>
RISK/RETURN SUMMARY
Investment Objective
The India Technology Fund is a stock portfolio of Venus Series Trust that seeks
to obtain long-term capital appreciation.
Principal Investment Strategies
The Fund's adviser, Venus Capital Management, Inc. (the "Adviser") will
generally invest at least 70% of the Fund's total assets in securities of Indian
technology companies. Investments will be concentrated on Indian technology
companies in the following sectors: software, hardware, telecommunications,
healthcare, biotechnology, media and entertainment, internet commerce, and
internet related services. The Adviser will look to invest in companies that
have, among other things, superior sales, earnings, growth, management and
industry position. The Fund will primarily invest in common and preferred stock,
convertible debt and equity instruments. The Fund's portfolio will also consist
of securities traded outside of India and the U.S. represented by American
Depository Receipts ("ADRs") and other similar receipts. For more information,
see "Investment Objective/Principal Investment Strategies" below and the Fund's
Statement of Additional Information.
Principal Risks of Investing in the Fund
o The Fund is non-diversified, which may result in greater fluctuation in
Fund share value than would be the case if the Fund was diversified.
o Because technologies continue to evolve, the Fund's success will depend on
the ability of the companies in which it invests to adapt to this rapidly
changing marketplace. There are no assurances that the companies in which
the Fund invests will be able to adequately adapt their products and
services to meet the needs of the changing marketplace.
o The value of Fund shares is sensitive to stock market volatility. If there
is a decline in the value of exchange-listed stocks in India, the value of
Fund shares will also likely decline. Changes in stock market values can
be sudden and unpredictable. In addition, although stock values can
rebound, there is no assurance that values will return to previous levels.
Because securities markets in India are substantially smaller, less liquid
and more volatile than the major securities markets in the United States,
Fund share values will be more volatile.
o The value of Fund shares may be affected by political, economic, fiscal,
regulatory or other developments in India. These risks can be significant.
o Substantially less public information is available about Indian companies
than U.S. companies. As a result, certain material disclosures may not be
made by publicly traded companies in India and less information may be
available to the Fund.
o India imposes certain foreign ownership limitations on direct investments
in India which, among other things, limits the percentage of foreign
ownership in any one Indian company, individually or collectively, by
foreign investors.
o Because the Fund invests predominantly in Indian securities, the value of
Fund shares can be adversely affected by changes in the US dollar - Indian
rupee exchange rate.
o The Fund may engage in certain other investment practices that are risky.
Such practices include investing in options, warrants and futures, and
engaging in currency transactions, hedging and short-selling.
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Because the Fund is new, it does not have a full calendar year of performance.
Once the Fund has had a full year of performance, the Fund will provide you with
its total and average annual return information. The Fund is not a complete
investment program and you may lose money by investing in the Fund. An
investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Shareholders of the Fund may realize substantial losses by investing in
the Fund.
FEE TABLE
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.
<TABLE>
<CAPTION>
Annual Fund Operating Expenses (expenses deducted from Fund
assets, expressed as a percentage of average net assets) Basic Minimum Maximum
----- ------- -------
<S> <C> <C> <C>
Management Fees* 2.50% 0.00% 5.00%
12b-1/Shareholder Services Fees** 1.00% 1.00% 1.00%
Other Expenses*** 1.00% 1.00% 1.00%
Total Annual Fund Operating Expenses*** 4.50% 2.00% 7.00%
</TABLE>
* The management fee paid to the Adviser for providing advisory services to
the Fund consists of a basic fee and a performance adjustment calculated
by comparing the Fund's performance to a target. The basic fee for the
Fund is 2.50% of the Fund's average net assets. The actual fees paid to
the Adviser may be higher or lower than the basic fee. The target for the
Fund is the investment record of the IFC India Index (the "IFC India
Index"), a stock index compiled by the International Finance Corporation
(IFC), a member of the World Bank Group. For more information, see
"Investment Management -- Investment Adviser" and the Statement of
Additional Information.
** The Fund will begin charging you the 12b-1 fees after it has entered into
a 12b-1 distribution agreement.
*** Based on estimated expenses for the fiscal year ending December 31, 2000.
If you request that the proceeds of a redemption be sent by wire transfer,
you will be charged for the cost of such wire, which is $15.00 as of the
date of this Prospectus (subject to change without notice).
Example
The following example indicates the basic/minimum/maximum expenses on a $10,000
investment in Fund shares, based on the redemption of Fund shares at the end of
each time period. The purpose of the following example is to assist you in
understanding the various costs and expenses that you, as a shareholder of the
Fund, will directly or indirectly bear, and to further assist you in comparing
such costs and expenses with that of other mutual funds.
1 Year 3 Years
------ -------
Basic Minimum Maximum Basic Minimum Maximum
$450.00 $200.00 $700.00 $1,411.66 $612.08 $2,250.43
INVESTMENT OBJECTIVE/PRINCIPAL INVESTMENT STRATEGIES
Investment Objective
The investment objective of the Fund is to obtain long-term capital
appreciation.
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Principal Investment Strategies
The Adviser will generally invest at least 70% of the Fund's total assets in
securities of Indian technology companies. Investments will be concentrated on
Indian technology companies in the following sectors: software, hardware,
telecommunications, healthcare, biotechnology, media and entertainment, internet
commerce, and internet related services. The Adviser will look to invest in
companies that have the following characteristics:
o rapidly rising sales,
o high earnings growth rates,
o demonstrated superior long-term capital appreciation,
o industry leaders, and
o proven management teams.
The Fund will primarily invest in common and preferred stock, convertible debt
and equity instruments. The Fund's portfolio will also consist of securities
traded outside of India and the U.S. represented by ADRs and other similar
receipts. For more information, see the Statement of Additional Information.
Portfolio Turnover
The Fund is not restricted with regard to portfolio turnover and will make
changes in its investment portfolio from time to time as political, business and
economic conditions and market prices may dictate and its investment policies
may require. It is estimated that the portfolio turnover rate generally will not
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. However, the
Fund expects to minimize these potential adverse effects of portfolio turnover
through its use of discount brokers and through investment in a relatively small
number of portfolio securities. Any realized net short-term investment gain will
be taxed to shareholders as ordinary income. See "Dividends, Distributions and
Taxes" below.
RISK FACTORS
In addition to the other information contained in this Prospectus and the
Statement of Additional Information, you should also carefully consider the
following factors in evaluating an investment in the shares of the Fund, any of
which could materially reduce the Fund's net asset value. The risks and
uncertainties described below are not the only ones that could adversely affect
your investment in shares of the Fund. Additional risks and uncertainties of
which the Fund either is unaware or does not deem material at this time could
materially reduce the Fund's net asset value.
Non-Diversified Fund
The Fund is a "non-diversified" fund. The Fund is considered "non-diversified"
because a relatively high percentage of the Fund's assets may be invested in the
securities of a limited number of issuers. The Fund's portfolio securities,
therefore, may be more susceptible to any single economic, political, or
regulatory occurrence than the portfolio securities of a more diversified
investment company. The Fund's classification as a "non-diversified" investment
company means that the proportion of the Fund's assets that may be invested in
the securities of a single issuer is not limited by the 1940 Act. The Fund,
however, intends to seek to qualify as a "regulated investment company" for
purposes of the Internal Revenue Code of 1986, as amended (the "Code"), which
imposes diversification requirements on the Fund that are less restrictive than
the requirements applicable to "diversified" investment companies under the 1940
Act. The Fund reserves the right to become a "diversified fund" by limiting the
investments in which more than 5% of its total assets are invested.
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<PAGE>
Investment in the Technology Sector
The Fund plans to invest primarily in the equity securities of Indian technology
companies. The value of the shares of the Fund may be susceptible to factors
affecting technology and technology-related industries and to greater risk and
market fluctuation than an investment in a fund that invests in a broader range
of portfolio securities. The specific risks faced by technology companies
include:
o rapidly changing technologies and products that may quickly become
obsolete;
o exposure to a high degree of government regulation, making these companies
susceptible to changes in government policy and failures to secure
regulatory approvals;
o cyclical patterns in information technology spending which may result in
inventory write-offs;
o scarcity of management, engineering and marketing personnel with
appropriate technological training;
o the possibility of lawsuits related to technological patents; and
o changing investor sentiments and preferences with regard to technology
sector investments (which are generally perceived as risky).
There are no assurances that the companies in which the Fund invests will be
able to adequately adapt their products and services to meet the needs of the
changing marketplace.
Political and Economic Instability
The value of the Fund shares may be adversely affected by political, economic,
social and religious factors, changes in the laws or regulations of India and
the status of the relations of India with other countries. Furthermore, the
Indian government exercises significant influence over many aspects of the
Indian economy, which could affect private sector companies and the Fund, market
conditions and prices and yields of securities in the Fund's portfolio.
Religious and ethnic unrest persists in India. In recent years, India has
experienced considerable sectarian tension between Hindus and Muslims, marked by
periodic violence. In addition, separatist movements have been ongoing in
several states for a number of years. Political extremists have been responsible
for assassinating two of India's Prime Ministers in the past ten years.
Notwithstanding such conflicts, India has experienced orderly governmental
transitions. India's relations with neighboring countries historically have been
tense.
The Indian government generally exercises substantial involvement in its
economy. From 1947 to the mid - 1980's, India maintained predominantly socialist
economic policies with a high level of state ownership and bureaucratic
intervention. Since the mid-1980's, India has adopted more liberal and
free-market economic policies. Despite these reforms, a large portion of
industry and the financial system remains under state control of or is
subsidized by the government. There can be no assurance that the Indian
government will continue to pursue liberal and free-market economic policies or,
if it does, that such policies will be successful. A return to more socialist
policies could adversely affect the Fund's investments in securities of Indian
companies.
Securities Market Characteristics
The stock markets in India are undergoing a period of growth and change, which
may result in trading or price volatility and difficulties in the settlement and
recording of transactions, and in interpreting and applying the relevant laws
and regulations. The securities industry in India is comparatively
underdeveloped, and stockbrokers and other intermediaries may not perform as
well as their counterparts in the United States and other more developed
securities markets. Physical delivery of securities in small lots generally has
been required in India and a shortage of vault capacity and trained personnel
has existed among qualified custodial Indian banks. The Fund may be unable to
sell securities where the registration process is incomplete and may experience
delays in receipt of
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dividends. If trading volume is limited by operational difficulties, the ability
of the Fund to invest its assets may be impaired.
The Indian securities markets are fragmented, substantially smaller, less liquid
and more volatile than the major securities markets in the United States. A high
proportion of the shares of many Indian companies may be held by a limited
number of persons and financial institutions, which may limit the number of
shares available for investment by the Fund. A limited number of issuers may
represent a disproportionately large percentage of market capitalization and
trading.
Anticipation by market participants of the initial offering period, and offering
of other investment funds seeking to invest in securities of Indian companies,
may increase demand for such securities and may adversely influence the prices
paid by the Fund in purchasing securities for its portfolio. The limited
liquidity of the securities markets of India may affect the Fund's ability to
acquire or dispose of securities at the price and time it desires.
Financial Disclosure and Regulatory Matters
Substantially less public information is available about Indian companies than
U.S. companies. The disclosure and regulatory standards applicable to Indian
companies are in many respects less stringent than U.S. standards, and issuers
are subject to accounting, auditing and financial standards requirements that
are less rigorous than those applicable to U.S. issuers. As a result, certain
material disclosures may not be made by publicly traded companies in India and
less information may be available to the Fund and other investors than would be
the case if the Fund's investments were restricted to listed securities of U.S.
issuers. This lack of available information may be an even greater consideration
in the event that the Fund invests in unlisted securities. There is also
substantially less regulation of the securities markets in India and
substantially less enforcement of regulatory provisions relating thereto than in
the United States. Indian stock exchanges were subject to occasional suspensions
of trading in June and July 1992 and more recently in March 1995 in connection
with a governmental investigation of allegations of significant financial fraud
involving manipulative trading practices.
Restrictions on Investments by Foreign Institutional Investors
Foreign institutional investors ("FIIs"), including institutions such as
institutional portfolio managers, pension funds, investment trusts and asset
management companies, may invest in all the securities traded on the primary and
secondary markets in India. Under the guidelines established by the Securities
and Exchange Board of India ("SEBI"), FIIs are required to obtain an initial
registration from the SEBI before commencing investment activity in Indian
securities. The Adviser is a registered FII with the SEBI, and is permitted to
have its clients, such as the Fund, hold subaccounts with the Adviser and to
effect transactions in Indian securities on behalf of it clients. The Fund holds
a subaccount with the Adviser.
The guidelines set forth by the SEBI under which FIIs may invest directly in
Indian equity securities are new and evolving. Under the existing guidelines, no
FII or a client of an FII (including the Fund) may hold more than ten percent of
the total issued equity securities of any Indian company. In addition, portfolio
investments by all non-residents as a group, including those of all FIIs and
their clients, may not exceed 30 percent of the issued equity securities of any
Indian company. Due to the foregoing, the ability of the Fund to invest in
certain companies may be restricted. Under current guidelines, FIIs and their
clients may freely remit and convert into Indian rupees, amounts for investment
into India and convert into US dollars and repatriate capital, income and gains
from India. There can be no assurance that these guidelines will not be amended,
clarified, interpreted by judicial or administrative ruling or superseded in
such a way that may adversely affect the Fund.
Fluctuations in Currency Exchange Rates
Because investment in Indian companies will usually involve Indian currency, the
value of the assets of the Fund as measured by US dollars may be adversely
affected by changes in the Indian rupee-US dollar exchange rate. Such exchange
rate may fluctuate significantly over short periods of time causing the Fund's
net asset value to fluctuate as well. In addition, costs are incurred in
connection with conversion between the Indian rupee and US dollar.
6
<PAGE>
Foreign Exchange Risk
The Fund's assets will be invested in securities primarily quoted or denominated
in Indian rupees. Accordingly, a change in the value of the Indian rupee against
the US dollar will result in a corresponding change in the US dollar value of
the Fund's assets quoted or denominated in Indian rupees as well as the US
dollar equivalent of dividends distributed in Indian rupees by Indian companies
and of capital gains realized by the Fund on a sale of such assets. In addition,
if the exchange rate of the Indian rupee against the US dollar declines between
the time the Fund incurs expenses in US dollars and the time such expenses are
paid, the amount of Indian rupees required to be converted into US dollars in
order to pay expenses in US dollars will be greater than the equivalent amount
in such currency of such expenses at the time they are incurred.
Exchange Control
The ability of the Fund to exchange Indian rupees into US dollars and repatriate
investment income, capital and proceeds of sales realized from its investments
in Indian securities is subject to regulation by the Reserve Bank of India under
the Foreign Exchange Regulation Act. Under the FII guidelines as currently in
effect, necessary action to establish bank and custodial accounts, convert
currency and repatriate capital and income on behalf of the Fund has been taken.
There can be no assurance that the Government of India in the future will not
impose restrictions on foreign capital remittances abroad or otherwise modify
the exchange control regime in such a way that may adversely affect the ability
of the Fund to repatriate its income and capital.
Delay in Securities Settlement
In the past, Indian stock exchanges have been subject to repeated closure,
including a closure for nine days in December 1993 due to a broker's strike.
Recently, the Mumbai Stock Exchange was closed for 3 days due to suspected
default in payment by a broker. There can be no assurance that such closures
will not recur. The stock markets in India generally have settlement mechanisms
that are less developed and less reliable than those in more mature markets.
Recent increases in the volume of securities transactions, particularly those
involving FIIs approved by SEBI to invest in Indian securities generally have
strained the capacity of the settlement system and of custodial banks in India.
As a result of weaknesses in the settlement system, the Fund may experience
delays or other material difficulties in settling transactions effected in the
securities market of India which could adversely affect the Fund's net asset
value, the market price of the shares of the Fund's portfolio companies, the
ability of the Fund to effect portfolio transactions and the ability of the Fund
to obtain liquid capital to effect redemptions.
Risks Associated with Certain Investment Practices
o Use of put and call options could result in losses to the Fund, from the
sale or purchase of portfolio securities at inopportune times or for
prices higher than (in the case of put options) or lower than (in the case
of call options) current market values, or cause the Fund to hold a
security it might otherwise sell.
o Currency transactions could result in the Fund's incurring losses as a
result of the imposition of exchange controls, suspension of settlements,
or the inability to deliver or receive a specified currency.
o Losses resulting from the use of hedging, such as short sale transactions,
will reduce the Fund's net asset value, and possibly income, and the
losses can be greater than if hedging had not been used.
o Use of equity warrants and interest warrants could result in a greater
volatility in the Fund's net asset value and in sudden losses for the
Fund.
o The variable degree of correlation between price movements of futures
contracts and price movements in the related portfolio position of the
Fund could create the possibility that losses on the futures contracts
will be greater than gains in the value of the Fund's position.
o When the Adviser anticipates that a security is overvalued, it may sell
the security short by borrowing the same security from a broker or other
institution and selling the security. The Fund will incur a loss as a
result of a
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<PAGE>
short sale if the price of the borrowed security increases between the
date of the short sale and the date on which the Fund replaces such
security. The Fund will realize a gain if there is a decline in price of
the security between those dates, which decline exceeds the costs of the
borrowing the security and other transaction costs. There can be no
assurance that the Fund will be able to close out a short position at any
particular time or at an acceptable price. Although the Fund's gain is
limited to the amount at which it sold a security short, its potential
loss is unlimited since it is directly tied to the maximum attainable
price of the security less the price at which the security was sold. Until
the Fund replaces a borrowed security, it will maintain at all times cash,
U.S. government securities, or other liquid securities in an amount which,
when added to any amount deposited with a broker as collateral will at
least equal the current market value of the security sold short. Depending
on arrangements made with brokers, the Fund may not receive any payments
(including interest) on collateral deposited with them. The Fund will not
make a short sale if, after giving effect to such sale, the market value
of all securities sold short exceeds 100% of the value of the Fund's net
assets.
Conflicts of Interest
The Adviser manages the Iris India Fund, which is a broad-based fund that
invests in Indian companies. The Adviser also manages the assets of certain
relatives of Mr. Mehrotra, and invests such assets in Indian companies.
Conflicts of interests may arise when the Adviser is offered a right to invest
in a limited number of securities, and the Adviser must choose what amounts of
the investment will be allocated to each of its clients. To the extent that both
the Iris India Fund and the Fund have co-invested in a given company, the
interests of the two funds may diverge. In addition, the Adviser's interests
among its clients may be different.
Enforceability of Judgments
Because the laws of India relating to limited liability of corporate
shareholders, fiduciary duties of officers and directors, and the bankruptcy of
state enterprises are generally less well developed than or different from such
laws in the United States, if may be more difficult to obtain a judgment in the
courts of India than it is in the United States.
Year 2000
The Fund's Year 2000 efforts have been successfully completed. As of February
29, 2000, the Fund has not experienced any significant problems, and the Fund is
not aware of any significant issues related to the Year 2000 problem that affect
the Fund.
PERFORMANCE
From time to time, the Fund may advertise performance data represented by a
cumulative total return or an average annual total return. Total returns are
based on the overall or percentage change in value of a hypothetical investment
in the Fund and assume all of the Fund's dividends and capital gain
distributions are reinvested. A cumulative total return reflects the Fund's
performance over a stated period of time. An average annual total return
reflects the hypothetical annually compounded return that would have produced
the same cumulative total return if the Fund's performance had been constant
over the entire period. Because average annual returns tend to smooth out
variations in the Fund's returns, it should be recognized that they are not the
same as actual year-by-year results.
Performance may be compared to well-known indices such as the S&P 500 Index or
IFC India Index or BSE India Index. Also, the Fund may include published
editorial comments compiled by independent organizations such as Lipper
Analytical Services or Morningstar, Inc.
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HOW TO PURCHASE SHARES
Shares may be purchased by any investor without a sales charge. A minimum
initial investment of $1,000 is required to open an account with subsequent
minimum investments of $100. Investment minimums may be waived at the discretion
of the Board of Trustees.
Shareholders Accounts
When you invest in the Fund, the Transfer Agent 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 you instruct the Transfer Agent that you would
like your distributions in cash. The Fund will not issue share certificates
evidencing shares of the Fund. Instead, your account will be credited with the
number of shares purchased, relieving you of responsibility for safekeeping of
certificates and the need to deliver them upon redemption. You will be notified
of the status of your account following each purchase or sale transaction.
Initial Purchase
The initial purchase may be made by check or by wire in the following manner:
o By Check. You should complete and sign the account application which
accompanies this Prospectus, and send it along with a check for the
initial investment payable to the India Technology Fund to the Transfer
Agent at:
Mutual Shareholder Services, LLC
1301 E. 9th Street, Suite 1005
Cleveland, Ohio 44114
o By Wire. In order to expedite the investment of funds, you may advise your
bank or broker to transmit funds via Federal Reserve Wire System to:
Deutsche Bank
ABA #
Account #
f/b/o India Technology Fund
Your bank may charge a fee for the wire transfer of funds, which is your
responsibility. Your name and account number should also be provided.
o Through Brokers. The Fund may be made available through the network of
brokers such as Charles Schwab and Fidelity. However, you will need to
check with the broker if the marketing agreement is in place between the
Fund and the broker so that you can invest in the Fund.
Subsequent Purchases
You may make additional purchases in the following manner:
o By Check. You should mail a check made payable to the India Technology
Fund, along with the stub from a previous purchase or sale confirmation,
to the Transfer Agent.
o By Wire. Funds may be wired by following the previously stated
instructions for an initial purchase.
o By Telephone. In order to make telephone purchases, you must first
complete a Telephone Purchase Authorization Form which is available from
the Fund. Once the completed authorization form has been received, you may
make telephone purchases by calling the Transfer Agent at (877) 59-FUNDS
(1-877-593-
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<PAGE>
8637). An order confirmation will be mailed to you. Payment must be
received within three business days of the date that the purchase is made.
If your payment is not received within three business days, the Fund
reserves the right to redeem the shares you purchased by telephone. If
such redemption results in a loss to the Fund, to the extent that you have
shares in your account, the Fund has the right to redeem sufficient
additional shares from your account to reimburse the Fund for any such
loss. In no event will any losses arising from such redemptions be
liabilities of the Fund. Payment for purchases made by telephone may be
made by check or by wire to the aforementioned address and wiring
instructions. This telephone purchase option may be discontinued without
notice.
Automatic Investment Plan
The Automatic Investment Plan permits you to purchase shares of the Fund at
monthly intervals; provided that your bank allows automatic withdrawals. At your
option, the bank account that you designate will be debited by an amount that
you specify, and such funds will be used to purchase shares of the Fund on a
monthly basis. Only an account maintained at a domestic financial institution
which is an Automated Clearing House member may be so designated. Should you
desire participating in the Automatic Investment Plan, you should call the
Transfer Agent at (877) 59-FUNDS (1-877-593-8637) or the Fund at (617) 423-1901
or (800) 720-6850 to obtain the appropriate forms. The Automatic Investment Plan
does not assure a profit and does not protect against loss in declining markets.
You may terminate your participation with the Automatic Investment Plan at any
time by notifying the Transfer Agent.
Price of Shares
The price paid for Fund shares is the net asset value per share of the Fund, as
determined by the Adviser, after the Transfer Agent has received the funds for
purchase, except that the price for shares purchased by telephone is the net
asset value per share determined after receipt of telephone purchase
instructions. Net asset value per share of the Fund is computed by the Adviser
as of the close of business (currently 4:00 P.M., Eastern Standard 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
materially affect the net asset value of the Fund shares. Net asset value of the
Fund is determined by calculating the total value of all portfolio securities,
cash, other assets held by the Fund, and interest and dividends accrued and
subtracting from that amount all liabilities, including accrued expenses. The
net asset value of the Fund is divided by the total number of shares outstanding
to determine the net asset value of each share.
For purposes of computing the net asset value per share, securities listed on a
securities exchange in India or a relevant exchange overseas 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. For purchases of $50,000 or more, the
Fund may, in its discretion, require payment by wire or cashier's or certified
check.
HOW TO SELL AND REDEEM SHARES
All shares of the Fund offered for redemption will be redeemed at the net asset
value per share of the Fund determined after receipt of the redemption request,
if in compliance with the requirements described in this section,
10
<PAGE>
by the Transfer Agent. Because the net asset value of Fund shares will fluctuate
as a result of changes in the market value of the Fund's portfolio securities,
the amount you receive upon redemption may be more or less than the amount you
paid for such Fund shares being redeemed. Redemption proceeds will be mailed to
your registered address of record or, if the redemption proceeds are $5,000 or
more, may be transmitted by wire, upon your written request to the Transfer
Agent, to your pre-designated account at a domestic bank. You will be charged
for the cost of such wire transfer. If Fund shares purchased by check are being
redeemed, such 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, you provide payment by
certified or cashier's check or by wire transfer.
Redemption by Mail
Shares may be redeemed by mail or by writing directly to the Transfer Agent. The
redemption request must be signed exactly as your name appears on the account
application, with the signature guaranteed, and must include your account
number. If Fund 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
form. 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.
A request for redemption will not be processed until all of the necessary
documents have been received in proper form by the Transfer Agent. If you are in
doubt as to what documents are required, you should contact the Transfer Agent
at (877) 59-FUNDS (1-877-593-8637).
Redemption By Telephone
Shares may be redeemed by telephone by calling the Transfer Agent at (877)
59-FUNDS (1-877-593-8637) or the Fund at (617) 423-1901 or (800) 720-6850 on any
day the New York Stock Exchange is open for trading. An election to redeem by
telephone must be made on the account application or on other forms prescribed
by the Fund which may also be obtained by calling the Transfer Agent. This
Prospectus has a form for you to supply your 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 believed to be genuine. If the Fund fails to employ reasonable
procedures to confirm that instructions communicated by telephone are genuine,
the Fund may be liable for any losses due to unauthorized or fraudulent
instructions. Any changes or exceptions to the original election must be made in
writing with signature guaranteed, and will be effective upon receipt by the
Transfer Agent. The Transfer Agent and the Fund reserve the right to refuse any
telephone instructions and may discontinue the aforementioned redemption option
without notice. The minimum telephone redemption is $1,000.
Other Information Concerning Redemption
The Fund reserves the right to take up to seven days to make payment if, in the
judgment of the Adviser, the Fund could be adversely affected by immediate
payment. In addition, the right of redemption for the Fund may be suspended or
the date of payment postponed for (a) any period (i) during which the New York
Stock Exchange is closed other than customary weekend and holiday closings, or
(ii) during which trading on the New York Stock Exchange is restricted; (b) any
period during which an emergency exists as a result of which (i) disposal by the
Fund of securities owned by it is not reasonably practicable, or (ii) it is not
reasonably practicable for the Fund to fairly determine the value of its net
assets; or (c) for such other periods as the SEC may by order permit for the
protection of shareholders of the Fund. In determining whether any of the
conditions for suspension of redemption are in effect, the Fund will be guided
by the rules, regulations and pronouncements of the SEC.
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 your shares of the Fund if,
through prior redemptions, your account has a net asset value of less than
$1,000. You 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 your account up to the applicable minimum before the
redemption is processed.
11
<PAGE>
Automatic Withdrawal Plan
If you who own shares of the Fund valued at $15,000 or more, you may elect to
receive a monthly or quarterly check (or direct deposit to your 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 your withdrawal payments exceed your reinvested
dividends and distributions, your shares will be reduced and eventually
depleted. A withdrawal plan may be terminated at any time by you or the Fund.
Costs associated with the withdrawal plan are borne by the Fund. Additional
information regarding the Automatic Withdrawal Plan may be obtained by calling
the Transfer Agent at (877) 59-FUNDS (1-877-593-8637) or the Fund at (617)
423-1901 or (800) 720-6850.
INVESTMENT MANAGEMENT
Investment Adviser
The Fund's investment adviser is Venus Capital Management, Inc., an investment
management firm founded in 1994. The Adviser is registered under the Investment
Advisers Act of 1940. The Adviser has not been sponsored, recommended or
approved, nor have its abilities or qualifications been passed upon, by the SEC
or any other government agency.
As compensation for the Adviser's services to the Fund, the Fund will pay the
Adviser a performance-based management fee ranging from 0.00 - 5.00% of the
Fund's net asset value, calculated monthly by comparing the Fund's investment
performance to a target during the most recent twelve-month period. The target
for the Fund is the investment record of the IFC India Index, a stock index
compiled by the International Finance Corporation ("IFC"), a member of the World
Bank Group. The difference between the Fund's performance compared to the
performance of the IFC India Index is multiplied by a performance adjustment of
12.5% at an annual rate ("Performance Adjustment"). The Performance Adjustment
is then added or subtracted from the basic fee of 2.50%, subject to the
Adviser's minimum fee of 0.00% and maximum fee of 5.00%. For example, if the
Fund underperforms its benchmark by 20 percentage points over a 12-month period,
the minimum management fee of 0.00% will apply. Correspondingly, if the Fund
overperforms its benchmark by 20 percentage points, the maximum total management
fee of 5.00% will apply.
The Adviser's management fees are higher than the fees charged by other typical
investment advisers. The Adviser believes that the management fee is justified.
The Staff's position on this matter is not binding on the SEC, and no final
determination by the full Commission as to the reasonableness of the fees has
been made. The Adviser believes that each investor can, based on the fee
discussion in this Prospectus, make its own determination as to whether the
higher performance fees are reasonable in light of the Fund's performance.
The IFC India Index is an index that is not managed or controlled by the IFC,
and is comprised of securities of approximately 150 Indian companies. The IFC
India Index assigns relative percentage values to the stocks included in the
index, weighted according to each stock's total market value relative to the
total market value of the other stocks in the index. The Adviser believes that
the IFC India Index will serve as an adequate benchmark against which to compare
the Fund's performance because: (i) the IFC India Index focuses on the same
geographical area as the Fund's investment strategy; (ii) Indian technology
companies comprise approximately 25% of the aggregate market capitalization of
the companies included in the IFC India Index; and (iii) the IFC India Index
reflects a balanced equity return. See the Statement of Additional Information
for additional information about the fee calculation.
Subject to the supervision and direction of the Board of Trustees, the Adviser
manages the Fund's portfolio in accordance with the stated policies of the Fund.
The Adviser makes investment decisions for the Fund and places the purchase and
sale orders for portfolio transactions. In addition, the Adviser or its
affiliates furnishes office facilities and administrative services necessary to
perform its duties, pays the salaries of any officers or employees who are
employed by both it and the Fund and, subject to the direction of the Board of
Trustees, is responsible for the overall management of the business affairs of
the Fund.
12
<PAGE>
Portfolio Manager
Mr. Vik Mehrotra is the person primarily responsible for the management of the
portfolio of the Fund. Mr. Mehrotra has over nine years of experience in
managing portfolios. Mr. Mehrotra is registered with the SEC as an investment
adviser and has also obtained the National Association of Securities Dealers'
series 7, 63, 3 and 65 licenses. Mr. Mehrotra received his Masters in Business
Administration degree in 1991 from the Rochester Institute of Technology,
Rochester, New York, with specialization in finance and investment management.
Since January 1994, Mr. Mehrotra has worked with VLS Finance, Ltd., an
investment bank in India, where he (i) has established its equities research
department, (ii) is responsible for recruiting analysts, traders and fund
managers for VLS Finance, and (iii) developed a 200 selection criteria process
(150 quantitative and 50 qualitative) for investing in equities in Indian
companies. Mr. Mehrotra has also managed the Iris India Fund , a broad-based
India fund, since January 1994. Since June 1999, Mr. Mehrotra has worked as a
broker for Wall Street Electronica. Inc. Mr. Mehrotra's past experiences include
working as a stock broker for PaineWebber, Inc. from June 1991 to January 1994,
and working as a stock broker for Lombard Securities Inc., Baltimore, Maryland
from August 1995 to June 1999.
Mr. Mehrotra will, from time to time, seek advice from an advisory board
comprised of Messrs. V. P. Shenoy (Chief Executive Officer, Euclid Network
Solutions, Inc.) and Sateesh Andra (Chief Technology Officer, Euclid Network
Solutions), who will generally oversee, approve and ratify the management
decisions of Mr. Mehrotra.
DISTRIBUTIONS AND TAXES
The Fund will declare and pay, at least annually, distributions 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 distributions will be reinvested automatically at net asset value in
additional shares of the Fund unless you elect to receive distributions in cash.
For federal income tax purposes, distributions are treated the same whether they
are received in cash or reinvested.
The Fund generally intends to operate in a manner such that it will not be
liable for federal income tax.
The Fund's distributions of net income (including short-term capital gain) are
taxable to you as ordinary income. The Fund's distributions of long-term capital
gain generally are taxable to you as long-term capital gain. The Fund's
distributions also may be subject to certain state and local taxes.
If you buy shares just before the Fund deducts a distribution from its net asset
value, you will pay the full price for the shares and then receive a portion of
the price back as a taxable distribution.
The sale or exchange of Fund shares is a taxable transaction for federal income
tax purposes.
Investment income received by the Fund may give rise to withholding and other
taxes imposed by foreign countries. The Fund intends, if possible, to operate so
as to meet the requirements of the Code to "pass through" to its shareholders
credits or deductions for foreign income taxes paid, but there can be no
assurance that the Fund will be able to do so. For further information, please
see the Statement of Additional Information.
Each year shortly after December 31, the Fund will send you tax information
stating the amount and type of distributions paid during the year.
Consult your personal tax adviser about the tax consequences of an investment in
the Fund in your particular circumstances.
13
<PAGE>
Distribution Plan
The Fund has adopted a distribution plan under Rule 12b-1 of the 1940 Act, but
has not yet entered into any agreement with a distributor. The Fund intends to
enter into a distribution and service agreement ("Distribution and Services
Agreement") in the future. If the Fund enters into a Distribution and Services
Agreement, the fees incurred by the Fund under such agreement would be paid out
of the Fund's assets on an on-going basis. Over time, such fees will increase
the cost of your investment and may cost you more than paying other types of
sales charges.
SHAREHOLDER INQUIRIES SHOULD BE DIRECTED TO THE SECRETARY OF THE
TRUST AT 31 Milk Street, Third Floor, Boston, MA 02109
14
<PAGE>
THE INDIA TECHNOLOGY FUND
Additional information about the Fund has been filed with the
Securities and Exchange Commission (the "Commission") in a Statement
of Additional Information dated the same date as this Prospectus. If
you would like to obtain a free copy of the Statement of Additional
Information or have any inquiries about the Fund, please contact
Mutual Shareholder Services, LLC, the Fund's transfer agent, toll
free at (877) 59-FUNDS (1-877-593-8637). Additional information
about the Fund (including the Statement of Additional Information)
can be reviewed and copied at the Commission's Public Reference Room
in Washington, D.C. Information on the operation of the Public
Reference Room may be obtained by calling the Commission at
1-202-942-8090. Reports and other information about the Fund are
available on the EDGAR Database on the Commission's Internet site at
http://www.sec.gov. Copies of this information may be obtained,
after paying a duplicating fee, by electronic request at the
following E-mail address: [email protected], or by writing the
Commission's Public Reference Section, Washington, D.C. 20549-0102.
PROSPECTUS
MARCH , 2000
Investment Company Act File No. 811-09717
15
<PAGE>
VENUS SERIES TRUST
Statement of Additional Information
March 9, 2000
31 Milk Street
Third Floor
Boston, MA 02109
(617) 423-1901
The India Technology Fund (the "Fund") is a stock portfolio of Venus Series
Trust, an open-end management investment company (the "Trust"). The Fund is a
non-diversified fund having the primary investment objective of obtaining
long-term capital appreciation by investing in securities of Indian technology
companies.
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 Mutual Shareholder Services, LLC
(the "Transfer Agent"), 1301 E. 9th Street, Suite 1005, Cleveland, Ohio 44114,
(877) 59-FUNDS (1-877-593-8637) or from the Fund at (617) 423-1901 or (800)
720-6850. The prospectus to which this Statement of Additional Information
relates is dated the same date as this Statement of Additional Information and
is hereby incorporated by reference.
TABLE OF CONTENTS
Page
----
Fund History.................................................................B-2
Description of the Fund, its Investments and Risks...........................B-2
Fundamental Investment Policies..............................................B-3
Management of the Fund.......................................................B-4
Compensation Table...........................................................B-5
Ownership of Shares..........................................................B-5
Investment Advisory Services.................................................B-5
Other Services...............................................................B-7
Portfolio Transactions.......................................................B-8
Capital Stock and Other Securities...........................................B-8
Purchase, Redemption and Pricing of Securities Being Offered.................B-9
Taxation of the Fund.........................................................B-9
Financial Statements........................................................B-11
B-1
<PAGE>
FUND HISTORY
The Fund is a non-diversified portfolio of the Trust. The Trust is an open-end
management investment company, organized as a business trust under the laws of
the State of Delaware by Certificate of Trust, dated as of November 8, 1999 and
by the Declaration of Trust, dated as of November 8, 1999 (the "Declaration of
Trust").
DESCRIPTION OF THE FUND, ITS INVESTMENTS AND RISKS
Although the Fund will primarily invest in common and preferred stock,
convertible debt and equity instruments (all of which are more fully described
in the Fund's prospectus). The Fund's portfolio will also consist of securities
traded outside of India and the U.S. represented by ADRs and other similar
receipts. The Fund may also, in furtherance of the Fund's investment objective,
invest, trade or engage in the securities or investment activities described
below.
o Money-Market Investments. The Fund may invest in no-load money-market
mutual funds, high-quality short-term debt securities and money-market
instruments (such as repurchase agreements, commercial paper and
certificates of deposit) (collectively, "money-market investments"), when
and to the extent deemed advisable by the Adviser. An investment by the
Fund in money-market investments may involve some duplication of advisory
fees and other expenses.
o Options. The Fund may invest in put and call options for which the Fund
pays a premium (cost of option), and the Fund may buy or sell such
options, exercise such options, or permit such options to expire, in each
case, when and to the extent deemed advisable by the Adviser. The Fund may
suffer a total loss from its investment in options.
o Warrants. When and to the extent deemed advisable by the Adviser, the Fund
may invest in warrants, which are options to purchase a specified security
at a specified price (usually representing a premium over the applicable
market value of the underlying security at the time of the warrant's
issuance) and usually during a specified period of time.
o Futures Contracts. The Fund may invest in futures contracts for the
purchase or sale of specific securities, stock indexes, commodities,
currencies or country indexes, when and to the extent deemed advisable by
the Adviser. A futures contract is an agreement between two parties to buy
and sell a security at a set price on a future date.
o Short Sales. The Fund may engage in short sale transactions in securities
listed on one or more worldwide securities exchanges, particularly in
India, Luxembourg, London and the United States, when and to the extent
deemed advisable by the Adviser. Short selling involves the sale of
borrowed securities. At the time a short sale is effected, the Fund incurs
an obligation to replace such borrowed securities at whatever price such
securities may be at the time the Fund purchases such securities for
delivery to the lender.
Since short selling can result in profits when stock prices generally decline,
the Fund in this manner, can, to a certain extent, hedge the market risk to the
value of its other investments and protect its equity in a declining market.
However, the Fund could, at any given time, suffer both a loss on the purchase
or retention of one security if that security should decline in value, and a
loss on a short sale of another security, if the security sold short should
increase in value. When a short position is closed out, it may result in a
short-term capital gain or loss for federal income tax purposes. Moreover, to
the extent that in a generally rising market the Fund maintains short positions
in securities rising with the market, the net asset value of the Fund would be
expected to increase to a lesser extent than the net asset value of a mutual
fund that does not engage in short sales. The Fund may make short sales "against
the box", i.e., sales made when the Fund owns securities identical to those sold
short.
B-2
<PAGE>
o Illiquid Securities. The Fund may invest up to 15% of its net assets in
illiquid securities. The term "illiquid securities" for this purpose means
securities that cannot be disposed of within seven days in the ordinary
course of business at approximately the amount at which the Fund has
valued the securities.
For more information, see "Investment Objective and Principal Investment
Strategies" and "Risk Factors" in the Fund's prospectus.
FUNDAMENTAL INVESTMENT POLICIES
The following policies are fundamental investment policies. Fundamental
investment policies are those that cannot be changed without the approval of the
holders holding a majority of the Fund's outstanding shares. The phrase "a
majority of the Fund's outstanding shares," when used in this Statement of
Additional Information, means the lesser of (i) 67% or more of the voting shares
represented at a meeting at which more than 50% of the outstanding voting shares
are present in person or represented by proxy and (ii) more than 50% of the
outstanding voting shares.
o Concentration of Investments. In seeking to achieve its investment
objective, the Fund will invest primarily in securities of Indian
technology companies. Investments will be concentrated in Indian software,
hardware, telecommunications, healthcare, biotechnology, media and
entertainment, internet commerce, and internet related services companies
that have, among other things, superior sales, earnings, growth,
management and industry position.
o Limitations of Investments in a Single Company. The Fund may not invest
more than 25% of the value of the Fund's total assets in a single issuer
(other than cash, money-market investments or obligations issued or
guaranteed by the U.S. government, its agencies or instrumentalities).
o Restrictions on Lending. The Fund may not lend money or securities;
provided that the making of interest-bearing demand deposits with banks
and the purchase of debt securities in accordance with the Fund's
objective and policies are not prohibited.
o Borrowing. The Fund may borrow up to but not more than 50% of the Fund's
net assets from a banking institution for the purpose of making
investments.
o Restrictions on Commodities Trading. The Fund may not invest more than 35%
of the Fund's net assets in commodities or commodity futures contracts.
o Restrictions on Purchase and Sale of Real Estate. The Fund may not invest
any of the Fund's net assets 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.
o Restrictions on Underwriting. The Fund may not underwrite securities
issued by others except to the extent the Fund may be deemed to be an
underwriter, under the Securities Act of 1933, as amended (the "Securities
Act"), in connection with the disposition of portfolio securities.
o Restrictions on Issuance of Senior Securities. The Fund may not issue
senior securities, as such term is defined in the Securities Act.
o Mauritius Special Purpose Company. The Fund may invest in India through a
special purpose company organized under the laws of the Republic of
Mauritius, which is intended to allow the Fund to take advantage of a
favorable tax treaty between India and Mauritius.
Changes in values in any of the Fund's investments, or the assets of the Fund as
a whole, will not cause a violation of any percentage-based investment
restriction so long as such percentage restriction was observed by the Fund at
the time the Fund made such investment.
B-3
<PAGE>
MANAGEMENT OF THE FUND
Trustees and Officers
Under state law, the duties of the Trustees are generally characterized as a
duty of loyalty and a duty of care. The duty of loyalty requires a Trustee to
exercise his or her powers in the interest of the Trust and not the Trustee's
own interest or the interest of another person or organization. A Trustee
satisfies his or her duty of care by acting in good faith with the care of an
ordinarily prudent person and in a manner the Trustee reasonably believes to be
in the best interest of the Trust and its beneficiaries, which include the
shareholders of the Fund.
The Board of Trustees consists of Messrs. Vikas Mehrotra, John Gutfreund, S.
Atiq Raza and Raj Singh. Messrs. Gutfreund, S. Atiq Raza and Raj Singh have no
affiliation or business connection with the Adviser or any of the Adviser's
affiliated persons. Mr. Mehrotra is the president and sole stockholder of the
Adviser.
The business and affairs of the Fund are managed under the direction of the
Board of Trustees, as required by Delaware law. The day-to-day operations of the
Fund are conducted through or under the direction of its officers. By virtue of
the responsibilities assumed by the Adviser as investment adviser, all of the
Fund's officers are officers and employees of the Adviser.
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 Investment Company
Act of 1940 (the "1940 Act"), is indicated by an asterisk.
<TABLE>
<CAPTION>
Position with
Name and Address* (Age) Fund Principal Occupations During Past Five Years
- ----------------------- ---- --------------------------------------------
<S> <C> <C>
Vikas Mehrotra** (31) President and Chairman of the Trust; President and Director,
Trustee Venus Capital Management, Inc., a registered
investment adviser; Principal, VLS Finance,
Ltd., an investment bank in India; Manager,
Iris India Fund; Broker, Wall Street
Electronica; stock broker, PaineWebber;
broker, Lombard Securities, Baltimore,
Maryland.
John Gutfreund (70) Trustee President, Gutfreund & Company, Inc., a New
York based financial consulting firm; Director
of FreshPoint America, Inc., Foamex
International, Inc., Baldwin Piano and Organ
Co., LCA Vision, Inc., Command Security Corp
Ascent Assurance, Inc., and the Universal Bond
Fund; Chairman and CEO of Salomon Brothers;
Vice Chairman, The New York Stock Exchange.
S. Atiq Raza (50) Trustee President and CEO of Raza Venture Management,
Inc., an incubator management company focused
on startup companies; Managing Partner of Raza
Venture Fund A, L.P., a broadband
communications and e-commerce fund; President
and CEO of Advanced Micro Devices (AMD), a
microprocessor manufacturer; President and CEO
of NexGen, Inc., a computer manufacturer.
</TABLE>
B-4
<PAGE>
<TABLE>
<S> <C> <C>
Raj Singh (54) Trustee Co-founder of Redwood Venture Partners, a high
technology investment firm; Co-founder and
Chairman of Roshnee Corporation, an optical
networking company; Founder and former CEO of:
StratumOne Communica-tions, a developer of
semi-conductor technology, Fiberlane
Communications (Cerent/Siara/Cyras family), a
fiber-optics telecommunications company, and
InterHDL, a microprocessor manufacturer;
Director of PulseCore, Xpedion, Webscope,
Moscape, WeByPhone, Euclid, RealChip,
GeoTouch.com and eCode.com.
</TABLE>
* The address of each Trustee and officer is c/o Venus Series Trust, 31 Milk
Street, Third Floor, Boston, MA 02109.
** "Interested" Trustee, as defined in the 1940 Act, by reason of his
affiliation with the Adviser.
Currently, no officer, director or employee of the Adviser receives any
compensation from the Trust for serving as an officer or Trustee of the Trust,
and it is not anticipated that any compensation will be given to such officers
or Trustees in the future; however, the Trust reserves the right to compensate
its officers and Trustees. Each Trustee who is not an officer, director or
employee of the Adviser or any affiliate will receive from the Fund a fee of
$125 for each Board or shareholders meeting attended. The estimated fees payable
to the Trustees for the current fiscal year (excluding such $125 fee), which are
the only compensation or benefits payable to Trustees, are summarized in the
following table:
<TABLE>
<CAPTION>
COMPENSATION TABLE
Pension or Total
Retirement Estimated Compensation
Aggregate Benefits Accrued Annual from Fund and
Name of Compensation as Part of Fund Benefits upon Fund Complex
Person, Position from Fund Expenses Retirement paid to Trustees
---------------- ------------ --------------- ------------- ----------------
<S> <C> <C> <C> <C>
Vikas Mehrotra
(President and Trustee) 0 0 0 0
John Guttfreund (Trustee) 0 0 0 0
S. Atiq Raza (Trustee) 0 0 0 0
Raj Singh (Trustee) 0 0 0 0
</TABLE>
OWNERSHIP OF SHARES
As of March 9, 2000, all of the outstanding shares of the Fund were beneficially
owned by the Adviser and its affiliates. A shareholder who beneficially owns,
directly or indirectly, more than 25% of the Fund shares may be deemed a
"control person" (as defined in the 1940 Act) of the Fund. The Adviser is
controlled by Mr. Mehrotra, the Chairman and Trustee of the Fund, and president
and sole stockholder of the Adviser.
B-5
<PAGE>
INVESTMENT ADVISORY SERVICES
Investment Advisor
The Adviser is registered as an investment adviser under the Investment Advisers
Act of 1940 (the "Advisers Act"). The Adviser has not been sponsored,
recommended or approved, nor have its abilities or qualifications been passed
upon, by the Securities and Exchange Commission (the "SEC") or any other
governmental agency. Mr. Vikas Mehrotra, the Chairman of the Trust, is the
president and sole stockholder of the Adviser.
The Adviser acts as investment adviser to the Fund pursuant to an Investment
Advisory Agreement dated March 8, 2000 (the "Advisory Agreement"). Subject to
the supervision and direction of the Board of Trustees, the Adviser manages the
Fund's portfolio in accordance with the stated policies of the Fund. The Adviser
makes investment decisions for the Fund and places the purchase and sale orders
for portfolio transactions. In addition, the Adviser furnishes office facilities
and clerical and administrative services and subject to the direction of the
Board of Trustees, is responsible for the overall management of the business
affairs of the Fund, including the provision of personnel for record keeping,
the preparation of governmental reports and responding to shareholder
communications.
Management Fee
As described in the Prospectus, the Fund will pay the Adviser a
performance-based management fee calculated monthly by comparing the Fund's
investment performance to a target during the most recent twelve-month period.
The target for the Fund is the investment record of the IFC India Index ("IFC
India Index"), a stock index compiled by the International Finance Corporation
(IFC), a member of the World Bank Group. The difference between the Fund's
performance compared to the performance of the IFC India Index is multiplied by
a performance adjustment of 12.5% at an annual rate ("Performance Adjustment").
The Performance Adjustment is then added or subtracted from the basic fee of
2.50%, subject to the Adviser's minimum fee of 0.00% and maximum fee of 5.00%.
If the Fund underperforms its benchmark by 20 percentage points over a 12-month
period, the minimum management fee of 0.00% will apply. Correspondingly, if the
Fund overperforms its benchmark by 20 percentage points, the maximum total
management fee of 5.00% will apply. Therefore, investors in the Fund should pay
special attention to the choice of benchmark since it plays a critical role in
determining the total risk of the Fund as well as the management fees charged by
the Fund. The following table illustrates the fee structure:
Twelve Month Performance of the Fund versus IFC India Index Management Fee
- ----------------------------------------------------------- --------------
The Fund underperforms IFC India Index by 20% or more. 0.00%
The Fund underperforms IFC India Index by 15%. 0.63%
The Fund underperforms IFC India Index by 10%. 1.25%
The Fund underperforms IFC India Index by 5%. 1.88%
The Fund and IFC India Index perform the same. 2.50%
The Fund overperforms IFC India Index by 5%. 3.13%
The Fund overperforms IFC India Index by 10%. 3.75%
The Fund overperforms IFC India Index by 15%. 4.38%
The Fund overperforms IFC India Index by 20% or more. 5.00%
Choice of IFC India Index as Benchmark
The IFC India Index is an index that is not managed or controlled by the IFC,
and is comprised of securities of approximately 150 Indian companies. The IFC
India Index assigns relative percentage values to the stocks included in the
index, weighted according to each stock's total market value relative to the
total market value of the other stocks in the index. The Adviser believes that
the IFC India Index will serve as an adequate benchmark against which to compare
the Fund's performance because: (i) the IFC India Index is keyed to the same
geographical area as the Fund's investment strategy; (ii) Indian technology
companies comprise approximately 25% of the aggregate market capitalization of
the companies included in the IFC India Index; and (iii) the IFC India Index
reflects a balanced equity return.
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Because the Fund is using a "fulcrum" fee formula to raise or lower the base
management fee depending on Fund performance, the choice of benchmark is a
critical factor to be considered by the investor. The total management fee paid
to the Adviser will depend on a base fee as a percentage of assets under
management as well as the Performance Adjustment that will add to or subtract
from the base management fee depending explicitly on the magnitude of positive
excess returns above the benchmark or the magnitude of negative excess returns
below the benchmark. The design of the "fulcrum" around which the incentive fees
either add to or subtract from the base management fees hinges on the choice of
the benchmark. The investor, by buying shares of the Fund, is providing
incentives to the Adviser to strive for higher excess returns and to take
additional risks. The Adviser, when taking additional risks in order to attempt
to gain excess returns above the benchmark, knows that the total management fees
can rise or fall depending on performance. To a limited extent, then, the
Adviser will benefit when the investor benefits, and the Adviser will suffer a
detriment when the investor suffers a below-benchmark performance.
The benchmark for the Fund was chosen based on a number of factors, including
the objectives of the Fund, the universe of securities and other investments
which the Adviser plans to utilize, the level of risks expected to be taken, and
the ability of the portfolio to develop strategies that attempt to out-perform
the benchmark. The Adviser believes that the overall risk profile of the IFC
India Index will be comparable to the targeted risk level of the Fund.
Other Expenses
Other expenses are borne by the Fund and include brokerage fees and commissions,
fees of Trustees not affiliated with the Adviser, expenses of registration of
the Trust and of the shares of the Fund with the SEC and the various states,
charges of the custodian, dividend and transfer agent, outside auditing and
legal expenses, liability insurance premiums on property or personnel (including
officers and trustees), maintenance of business trust existence, any taxes
payable by the Fund, interest payments relating to Fund borrowings, costs of
preparing, printing and mailing registration statements, prospectuses, periodic
reports and other documents furnished to shareholders and regulatory
authorities, costs of printing share certificates, portfolio pricing services
and Fund shareholder meetings.
Approval and Termination of Advisory Agreement
The Advisory Agreement is subject to annual approval by (i) the Board of
Trustees or (ii) vote of a majority 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
1940 Act) of the Fund or the Adviser by vote cast in person at a meeting called
for the purpose of voting on such approval. The Advisory Agreement is terminable
without penalty, on not less than 60 days' notice, by the Board of Trustees or
by vote of the holders of a majority of the Fund's shares or, upon not less than
90 days' notice, by the Adviser. The Advisory Agreement will terminate
automatically in the event of its assignment.
OTHER SERVICES
Transfer Agent
The Fund's transfer agent is Mutual Shareholder Services, LLC, a limited
liability company located at 1301 East Ninth Street, Suite 1005, Cleveland, Ohio
44114 (the "Transfer Agent"). The Fund has entered into a Transfer Agent
Agreement ("Transfer Agent Agreement") with the Transfer Agent, pursuant to
which the Transfer Agent has agreed to act as the Fund's transfer, redemption
and dividend disbursing agent. As such, the Transfer Agent 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 the
Transfer Agent an annual fee, paid monthly, equal to $9.75 per shareholder
account (with a monthly minimum of $775) plus $12 per month for each state in
which the Fund is registered under such state's securities laws, plus
out-of-pocket expenses. The Trust reserves the right to change its transfer,
redemption and dividend distributing agent at any time, subject to the terms of
the Transfer Agent Agreement.
Custodian
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The Fund's custodian is Deutsche Bank AG, a company incorporated in the Federal
Republic of Germany, having its Asia Pacific Head Office at No. 8 Shenton Way,
#23-01, Temasek Tower, Singapore 068811, and its New York office at 130 Liberty
Street, 20th Floor, New York, New York 1006 (the "Custodian"). The Fund has
entered into a Custodian Agreement ("Custodian Agreement") with the Custodian,
pursuant to which the Custodian will hold all securities and cash of the Fund,
deliver and receive payment for securities sold, receive and pay for securities
purchased, collect income from investments and perform other duties, all as
directed by officers of the Fund. The Custodian will not exercise any
supervisory function over the purchase and sale of securities or the payment of
distributions to shareholders. The Fund reserves the right to change its
custodian at any time, subject to the terms of the Custodian Agreement.
Auditors
KPMG, New Delhi, India and New York, has been selected as auditors for the Fund.
In such capacity, KPMG periodically reviews the accounting and financial records
of the Fund and examines its financial statements.
Counsel
Duval & Stachenfeld LLP, based in New York, New York, is legal counsel to the
Fund.
PORTFOLIO TRANSACTIONS
Decisions to buy and sell securities for the Fund are made by the Adviser.
Portfolio security transactions for the Fund are effected by or under the
supervision of the Adviser.
Transactions on stock exchanges involve the payment of negotiated brokerage
commissions. There is generally no stated commission in the case of securities
traded in the over-the-counter markets, but the price of those securities
includes an undisclosed commission or markup. The cost of securities purchased
from underwriters includes an underwriting commission or concession, and the
prices at which securities are purchased from and sold to dealers include a
dealer's markup or markdown.
In executing portfolio transactions and selecting brokers and dealers, it is the
Fund's policy to seek the best overall terms available. The Advisory Agreement
provides that, in assessing the best overall terms available for any
transaction, the Adviser shall consider the factors it deems relevant, including
the breadth of the market in the security, the price of the security, the
financial condition and execution capability of the broker or dealer, and the
reasonableness of the commission, if any, for the specific transaction and on a
continuing basis. In addition, the Advisory Agreement authorizes the Adviser, in
selecting brokers or dealers to execute a particular transaction, and, in
evaluating the best overall terms available, to consider the brokerage and
research services (as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934) provided to the Fund and/or other accounts over which the
Adviser exercises investment discretion.
The Board of Trustees periodically reviews the commissions paid by the Fund to
determine if the commissions paid over representative periods of time were
reasonable in relation to the benefits inuring to the Fund. It is possible that
certain of the services received will primarily benefit one or more other
accounts for which investment discretion is exercised. Conversely, the Fund may
be the primary beneficiary of services received as a result of portfolio
transactions effected for other accounts. The Adviser's fee under the Advisory
Agreement is not reduced by reason of the Adviser's receiving such brokerage and
research services.
Although investment decisions for the Fund are made independently from those of
the other accounts managed by the Adviser, investments of the kind made by the
Fund may also be made by those other accounts. When the Fund and one or more
accounts managed by the Adviser are prepared to invest in, or desire to dispose
of, the same security, available investments or opportunities for sales will be
allocated in a manner believed by the Adviser to be equitable. In some cases,
this procedure may adversely affect the price paid or received by the Fund or
the size of the position obtained for or disposed of by the Fund.
B-8
<PAGE>
CAPITAL STOCK AND OTHER SECURITIES
The Declaration of Trust provides for an unlimited number of authorized shares,
which may, without shareholder approval, be divided into an unlimited number of
series of such shares. There presently is only one series of shares, which are
the Fund shares. Each Fund share represents an equal proportionate interest in
the Fund with other Fund shares, and is entitled to such dividends and
distributions out of the Fund's income as are declared at the discretion of the
Board of Trustees. All consideration received by the Trust for shares of the
Fund and all assets in which such consideration is invested will belong to the
Fund and will be subject to the liabilities relating thereto.
Shareholders are entitled to one vote per share on such matters as shareholders
are entitled to vote. The laws of the State of Delaware, under which the Trust
is organized, and the Trust's bylaws provide that the Fund is not required to
hold an annual meeting of shareholders unless required to do so under the 1940
Act. Accordingly, the Fund will not hold annual shareholder meetings unless
required to do so under the 1940 Act. Shareholders holding two-thirds of the
Fund's voting shares do have the right to call a meeting of shareholders for the
purpose of voting to remove one or more Trustees. The Fund will render
assistance to shareholders in connection with their efforts to arrange a
shareholder meeting as required under Section 16(c) of the 1940 Act.
Upon issuance and sale in accordance with the terms of the Fund's 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 in
the Fund's prospectus in the section titled "How to Sell and Redeem Shares." The
Fund will not issue share certificates evidencing shares of the Fund. Instead,
your account will be credited with the number of shares purchased, relieving you
of responsibility for safekeeping of certificates and the need to deliver them
upon redemption.
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.
In order to provide the initial capital for the Fund, the Adviser and its
affiliates have purchased a total of 50,000 Fund shares at $10.00 per share for
an aggregate purchase price of $500,000. As long as the Adviser owns more than
25% of the Fund shares, it will be deemed to be in "control" of the Fund as that
term is defined in the 1940 Act.
PURCHASE, REDEMPTION AND
PRICING OF SECURITIES BEING OFFERED
See "How To Purchase Shares" and "How To Sell and Redeem Shares" in the Fund's
prospectus.
TAXATION OF THE FUND
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 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 October 31 (or December 31 if elected by the Fund) 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 October, November or
December of that year with a record date in such month 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
B-9
<PAGE>
distributions are received. The Fund will notify shareholders of the tax status
of dividends and distributions.
If the Fund does not qualify for taxation as a regulated investment company for
any taxable year, the Fund's income will be subject to corporate income taxes
imposed at the Fund level, and all distributions from earnings and profits,
including distributions of net capital gain (i.e., the excess, if any, of net
long-term capital gain over net short-term capital loss), will be taxable to
shareholders as ordinary income.
The Fund's transactions in options, futures contracts, hedging transactions,
forward contracts, straddles and foreign currencies will be subject to special
tax rules (including mark-to-market, constructive sale, straddle, wash sale and
short sale rules), the effect of which may be to accelerate income to the Fund,
defer losses to the Fund, cause adjustments in the holding periods of the Fund's
securities, convert long-term capital gains into short-term capital gains and
convert short-term capital losses into long-term capital losses. These rules
could therefore affect the amount, timing and character of distributions to
shareholders of the Fund.
Distributions of the Fund's net ordinary income and distributions of any net
realized short-term capital gain will be taxable to shareholders as ordinary
income. Distributions of net capital gain are taxable as long-term capital gain,
regardless of how long a shareholder has held shares in the Fund. Distributions
are taxable in the manner discussed regardless of whether they are paid to the
shareholder in cash or are reinvested in additional shares of the Fund. The
investment objective of the Fund is such that only a small portion, if any, of
the Fund's distributions is expected to qualify for the dividends-received
deduction for corporate shareholders.
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.
A distribution with respect to shares of the Fund held by a tax-deferred or
qualified plan, such as an individual retirement account or corporate pension or
profit-sharing plan, generally will not be taxable to the plan. Distributions
from such plans will be taxable to individual participants under applicable tax
rules without regard to the character of the income earned by the qualified
plan.
Any gain or loss arising from a sale or redemption of Fund shares generally will
be capital gain or loss. Such gain or loss will be long-term capital gain or
loss if the shareholder has held such shares for more than one year at the time
of the sale or redemption; and otherwise short-term capital gain or loss. If a
shareholder has held shares in the Fund for six months or less and during that
period has received a distribution of net capital gain, any loss recognized by
the shareholder on the sale of those shares during the six-month period will be
treated as a long-term capital loss to the extent of the distribution. In
determining the holding period of such shares for this purpose, any period
during which a shareholder's risk of loss is offset by means of options, short
sales or similar transactions is not counted.
Any loss realized by a shareholder on a sale or exchange of shares of the Fund
will be disallowed to the extent the shares disposed of are replaced within a
period of 61 days beginning 30 days before the ending 30 days after the shares
are sold or exchanged. For this purpose, acquisitions made by reinvesting
distributions would constitute a replacement if made within the period. If
disallowed, the loss will be reflected in an upward adjustment to the basis of
the shares acquired.
Income received by the Fund may be subject to foreign income taxes, including
withholding taxes. If, as is contemplated, more than 50% of the value of the
Fund's total assets at the close of its taxable year consists of stocks or
securities of foreign corporations, the Fund will be eligible and intends to
file an election with the Internal Revenue Service to pass through to its
shareholders the amount of foreign taxes paid by the Fund. However, there can be
no assurance that the Fund will be able to do so. Pursuant to this election, a
shareholder will be required to (i) include in gross income (in addition to
taxable distributions actually received) such shareholder's pro rata share of
foreign taxes paid by the Fund, (ii) treat such shareholder's pro rata share of
such foreign taxes as having been paid by such shareholder, and (iii) either
deduct such pro rata share of foreign taxes in computing such shareholder's
taxable income or treat such foreign taxes as a credit against federal income
taxes. Shareholders which are not liable
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<PAGE>
for federal income taxes, such as retirement plans qualified under section 401
of the Code, will not be affected by any such pass through of taxes by the Fund.
No deduction for foreign taxes may be claimed by an individual shareholder who
does not itemize deductions. In addition, certain shareholders may be subject to
rules which limit or reduce their ability to fully deduct, or claim a credit
for, their pro rata share of the foreign taxes paid by the Fund. A shareholder's
foreign tax credit with respect to a distribution received from the Fund will be
disallowed unless the shareholder holds shares in the Fund on the ex-dividend
date and for at least 15 other days during the 30-day period beginning 15 days
prior to the ex-dividend date. Each shareholder will be notified within 60 days
after the close of the Fund's taxable year whether the foreign taxes paid by the
Fund will pass through for that year.
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 shareholder
fails to make a required certification that the shareholder's taxpayer
identification number is correct and that the shareholder 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. Backup
withholding is not an additional tax; any amounts so withheld may be credited
against a shareholder's federal income tax liability or refunded.
The foregoing discussion of U.S. federal income tax law relates solely to the
application of that law to U.S. citizens or residents and U.S. domestic
corporations, partnerships, trusts and estates. Each shareholder who is not a
U.S. person should consider the U.S. and foreign tax consequences of ownership
of shares of the Fund, including the possibility that such shareholder may be
subject to a U.S. withholding tax at a rate of 30 percent (or at a lower rate
under an applicable income tax treaty) on amounts constituting ordinary income.
In addition, the foregoing discussion of tax law is based on existing provisions
of the Code, existing and proposed regulations thereunder, and current
administrative rulings and court decisions, all of which are subject to change.
Any such changes could affect the validity of this discussion. The discussion
also represents only a general summary of tax law and practice currently
applicable to the Fund and certain shareholders therein, and, as such, is
subject to change. In particular, the consequences of an investment in shares of
the Fund under the laws of any state, local or foreign taxing jurisdictions are
not discussed herein.
PROSPECTIVE INVESTORS IN SHARES OF THE FUND ARE ADVISED TO CONSULT THEIR OWN TAX
ADVISORS AS TO THE TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION
OF SHARES OF THE FUND.
FINANCIAL STATEMENTS
The Fund is a new fund without a prior operating history. Accordingly, financial
statements are not available at this time. The Fund will provide financial
statements within 90 days of the end of each fiscal year after the date of
effectiveness.
B-11
<PAGE>
PART C
OTHER INFORMATION
Item 23. Exhibits.
a. Declaration of Trust, dated as of November 8, 1999, of Venus Series Trust.
b. By-Laws of Venus Series Trust.
c. Reference is made to Article VII of the Declaration of Trust.
d. Investment Advisory Agreement, dated as of March 8, 2000, between Venus
Capital Management, Inc. and Venus Series Trust.
e. None
f. None
g. Form of Amended and Restated Custody Agreement between Deutsche Bank and
Venus Series Trust.*
h. Transfer Agent Agreement, dated as of January 27, 2000, between Venus
Series Trust and Mutual Shareholder Services, LLC.
i. Form of Opinion of Duval & Stachenfeld LLP.*
j. None
k. None
l. Subscription Agreement, dated as of November 8, 1999, between Venus
Capital Management, Inc. and Venus Series Trust.
m. Rule 12b-1 Plan.
n. None
p. None
- ----------
* Executed document to be filed by amendment.
Item 24. Persons Controlled by or Under Common Control with Registrant.
Mr. Vikas Mehrotra, the Chairman of the Trust, is the president and sole
stockholder of the Adviser.
Item 25. Indemnification.
As permitted by Sections 17(h) and (i) of the 1940 Act and pursuant to Article
IV of the Declaration of Trust (Exhibit (a) to the Registration Statement),
officers, directors, employees and agents of the Registrant will not be liable
to the Registrant, any shareholder, officer, director, employee, agent or other
person for any action or failure to act, except for bad faith, willful
misfeasance, gross negligence or reckless disregard of duties, and those
individuals may be indemnified against liabilities in connection with the
Registrant, subject to the same exceptions.
Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended, may be permitted to trustees, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
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Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
1940 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 the 1940 Act and
will be governed by the final adjudication of such issue.
Section 7 of the Investment Advisory Agreement (Exhibit (d) to the Registration
Statement) limits the liability of Venus Capital Management, Inc. to liabilities
arising from willful misfeasance, bad faith or gross negligence in the
performance of its duties or from reckless disregard by it of its obligations
and duties under the Investment Advisory Agreement.
Item 26. Business and Other Connections of Investment Adviser.
See the Prospectus, "Investment Management -- Portfolio Manager" and Statement
of Additional Information, "Management of the Fund."
Item 27. Principal Underwriters.
Not applicable.
Item 28. 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, at the
Registrant's principal offices and with the Transfer Agent at 1301 East Ninth
Street, Suite 1005, Cleveland, Ohio 44114, except that all records relating to
the activities of the Custodian are maintained and are available at the office
of the Adviser, 31 Milk Street, Third Floor, Boston, MA 02109.
Item 29. Management Services.
Not applicable.
Item 30. Undertakings.
Not applicable.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
and the Investment Company Act of 1940, as amended, the Registrant has duly
caused this Pre-Effective Amendment No. 1 to the Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Boston, and State of Massachusetts, on the 9th day of March, 2000.
VENUS SERIES TRUST
By:/s/ Vikas Mehrotra
Vikas Mehrotra
Chairman
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Pre-Effective Amendment No. 1 to the Registration Statement has been signed
below by the following persons in the capacities and on the dates indicated.
Signature Title Date
/s/ Vikas Mehrotra Chairman, President and
Vikas Mehrotra Trustee March 9, 2000
/s/ John Guttfreund
John Guttfreund Trustee March 9, 2000
/s/ S. Atiq Raza
S. Atiq Raza Trustee March 9, 2000
/s/ Raj Singh
Raj Singh Trustee March 9, 2000
Exhibit 23(a)
DECLARATION OF TRUST
OF VENUS SERIES TRUST
THIS DECLARATION OF TRUST (this "Declaration") is made on November
8, 1999 by Vikas Mehrotra (together with all other persons from time to time
duly elected, qualified and serving as Trustees of the Venus Series Trust in
accordance with the provisions of Article II hereof, the "Trustees").
R E C I T A L S
WHEREAS, the Trustees desire to establish a business trust under the
Delaware Business Trust Act (the "Act") consisting of one or more series or
portfolios for the investment and reinvestment of funds contributed thereto.
NOW, THEREFORE, the Trustees hereby declare that all money and
property hereafter contributed to the business trust established hereby shall be
held and managed in trust for the benefit of the holders of beneficial interests
issued hereunder with respect to each respective series from time to time and
subject to the provisions hereof, to wit:
ARTICLE I
NAME AND DEFINITIONS
SECTION 1. Name. The name of the Trust shall be "Venus Series
Trust."
SECTION 2. Definitions. Unless otherwise provided or required by the
context:
(a) "Administrator" means the party, other than the Trust, to
the contract described in Article III, Section 3 hereof.
(b) "By-laws" means the By-laws of the Trust as may be adopted
by the Trustees, as amended from time to time, which By-laws are expressly
herein incorporated by reference as part of the "governing instrument" within
the meaning of the Delaware Act.
(c) "Class" means any class of Shares of a Series established
pursuant to Article V hereof.
(d) "Chairman" has the meaning given to it in Article II,
Section 8.
(e) "Commission," "Interested Person" and "Principal
Underwriter" have the meanings provided in the 1940 Act. Except as such term may
be otherwise defined by the Trustees in conjunction with the establishment of
any Series or Class of Shares, the term
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<PAGE>
"vote of a majority of the Shares outstanding and entitled to vote" shall have
the same meaning as is assigned to the term "vote of a majority of the
outstanding voting securities" in the 1940 Act.
(f) "Covered Person" means a person so defined in Article IV,
Section 3.
(g) "Custodian" means any Person other than the Trust who has
custody of any Trust Property as required by Section 17(f) of the 1940 Act, but
does not include a system for the central handling of securities described in
said Section 17(f) of the 1940 Act.
(h) "Declaration" shall mean this Agreement and Declaration of
Trust, as amended or restated from time to time. Reference in this Declaration
of Trust to "Declaration," "hereof," "herein," and "hereunder" shall be deemed
to refer to this Declaration rather than exclusively to the article or section
in which such words appear.
(i) "Delaware Act" means Chapter 38 of Title of the Delaware
Code entitled "Treatment of Delaware Business Trusts," as amended from time to
time.
(j) "Distributor" means the party, other than the Trust, to
the contract described in Article III, Section 1 hereof.
(k) "His" shall include the feminine and neuter, as well as
the masculine, genders.
(l) "Investment Adviser" means the party, other than the
Trust, to the contract described in Article III, Section 2 hereof.
(m) "Net Asset Value" means the net asset value of each Series
or Class of the Trust, determined as provided in Article VI, Section 3 hereof.
(n) "Outstanding Shares" means Shares shown in the books of
the Trust or its transfer agent as then issued and outstanding, but does not
include Shares which have been repurchased or redeemed by the Trust and which
are held in the treasury of the Trust.
(o) "Person" means and includes individuals, corporations,
partnerships, trusts, associations, joint ventures, estates and other entities,
and governments and agencies and political subdivisions, thereof, whether
domestic or foreign.
(p) "Series" means any series of Shares established pursuant
to Article V hereof.
(q) "Series Trustees" has the meaning given to it in Article
II, Section 13.
(r) "Shareholder" means a record owner of Outstanding Shares.
2
<PAGE>
(s) "Shares" means the equal proportionate transferable units
of interest into which the beneficial interest of each Series or Class is
divided from time to time (including whole Shares and fractions of Shares).
(t) "Transfer Agent" means any Person other than the Trust who
maintains the Shareholder records of the Trust, such as the list of
Shareholders, the number of Shares credited to each account, and the like.
(u) "Trust" means Venus Series Trust established hereby, and
reference to the Trust, when applicable to one or more Series or Class, refers
to such Series or Class.
(v) "Trustees" means the person who has signed this
Declaration of Trust, so long as he shall continue in office in accordance with
the terms hereof, and all other persons who may from time to time be duly
qualified and serving as Trustees in accordance with Article II, in all cases in
their capacities as Trustees hereunder.
(w) "Trust Property" means any and all property, real or
personal, tangible or intangible, which is owned or held by or for the Trust or
the Trustees on behalf of the Trust.
(x) The "1940 Act" means the Investment Company Act of 1940,
as amended from time to time.
ARTICLE II
THE TRUSTEES
SECTION 1. Management of the Trust. The business and affairs of the
Trust shall be managed by, or under the direction of, the Trustees, and the
Trustees shall have all such powers necessary to carry out such responsibility.
The Trustees may execute all instruments and take all action that the Trustees
deem necessary to further the interests of the Trust. Any determination made by
the Trustees in good faith as to what is in the interests of the Trust shall be
conclusive. In construing the provisions of this Declaration, the presumption
shall be in favor of a grant of power to the Trustees.
SECTION 2. Powers. The Trustees in all instances shall act as
principals, free of the control of the Shareholders. The Trustees shall have
full power and authority to take or refrain from taking any action and to
execute any contracts and instruments that they may consider necessary or
desirable in the management of the Trust. The Trustees shall not in any way be
bound or limited by current or future laws or customs applicable to trust
investments, but shall have full power and authority to make any investments
which they, in their sole discretion, deem proper to accomplish the purposes of
the Trust. The Trustees may exercise all of their powers without recourse to any
court or other authority. Subject to any applicable limitation
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herein or in the By-laws or resolutions of the Trust, the Trustees shall have
power and authority, without limitation:
(a) To operate as and carry on the business of an investment
company, and exercise all the powers necessary and appropriate to the conduct of
such operations;
(b) To invest in, hold for investment, or reinvest in, cash;
securities, including common, preferred and preference stocks; warrants;
subscription rights; profit-sharing interests or participations and all other
contracts for or evidence of equity interests; bonds, debentures, bills, time
notes and all other evidences of indebtedness; negotiable or non-negotiable
instruments; government securities, including securities of any state,
municipality or other political subdivision thereof, or any governmental or
quasi-governmental agency or instrumentality; and money market instruments
including bank certificates of deposit, finance paper, commercial paper,
bankers' acceptances and all kinds of repurchase agreements, of any corporation,
company, trust, association, firm or other business organization however
established, and of any country, state, municipality or other political
subdivision, or any governmental or quasi-governmental agency or
instrumentality; or any other security, property or instrument in which the
Trust or any of its Series or Classes shall be authorized to invest;
(c) To acquire (by purchase, subscription or otherwise), to
hold, to trade in and deal in, to acquire any rights or options to purchase or
sell, to sell or otherwise dispose of, to lend and to pledge any such
securities, to enter into repurchase agreements, reverse repurchase agreements,
firm commitment agreements and forward foreign currency exchange contracts, to
purchase and sell options on securities, securities indices, currency and other
financial assets, futures contracts and options on futures contracts of all
descriptions and to engage in all types of hedging and risk-management
transactions;
(d) To exercise all rights, powers and privileges of ownership
or interest in all securities and repurchase agreements included in the Trust
Property, including the right to vote thereon and otherwise act with respect
thereto and to do all acts for the preservation, protection, improvement and
enhancement in value of all such securities and repurchase agreements;
(e) To acquire (by purchase, lease or otherwise) and to hold,
use, maintain, develop and dispose of (by sale or otherwise) any property, real
or personal, including cash or foreign currency, and any interest therein;
(f) To borrow money or other property in the name of the Trust
exclusively for Trust purposes and in this connection issue notes or other
evidence of indebtedness; to secure borrowings by mortgaging, pledging or
otherwise subjecting as security the Trust Property; and to endorse, guarantee,
or undertake the performance of any obligation or engagement of any other Person
and to lend Trust Property;
(g) To aid by further investment any corporation, company,
trust, association or firm, any obligation of or interest in which is included
in the Trust Property or in the affairs of which the Trustees have any direct or
indirect interest; to do all acts and things
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designed to protect, preserve, improve or enhance the value of such obligation
or interest; and to guarantee or become surety on any or all of the contracts,
stocks, bonds, notes, debentures and other obligations of any such corporation,
company, trust, association or firm;
(h) To adopt By-laws not inconsistent with this Declaration
providing for the conduct of the business of the Trust and to amend and repeal
them to the extent such right is not reserved to the Shareholders;
(i) To elect and remove such officers and appoint and
terminate such agents as they deem appropriate;
(j) To employ as custodian of any assets of the Trust, subject
to any provisions herein or in the By-laws, one or more banks, trust companies
or companies that are members of a national securities exchange, or other
entities permitted by the Commission to serve as such;
(k) To retain one or more transfer agents and shareholder
servicing agents, or both;
(l) To provide for the distribution of Shares either through a
Principal Underwriter as provided herein or by the Trust itself, or both, or
pursuant to a distribution plan of any kind;
(m) To set record dates in the manner provided for herein or
in the By-laws;
(n) To delegate such authority as they consider desirable to
any officers of the Trust and to any agent, independent contractor, manager,
investment adviser, custodian or underwriter;
(o) To hold any security or other property (i) in a form not
indicating any trust, whether in bearer, book entry, unregistered or other
negotiable form, or (ii) either in the Trust's or Trustees' own name or in the
name of a custodian or a nominee or nominees, subject to safeguards according to
the usual practice of business trusts or investment companies.
(p) To establish separate and distinct Series with separately
defined investment objectives and policies and distinct investment purposes, and
with separate Shares representing beneficial interests in such Series, and to
establish separate Classes, all in accordance with the provisions of Article V;
(q) To the full extent permitted by Section 3804 of the
Delaware Act, to allocate assets, liabilities and expenses of the Trust to a
particular Series and assets, liabilities and expenses to a particular Class or
to apportion the same between or among two or more Series or Classes, provided
that any liabilities or expenses incurred by a particular Series or Class shall
be payable solely out of the assets belonging to that Series or Class as
provided for in Article V, Section 4;
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(r) To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or concern whose
securities are held by the Trust; to consent to any contract, lease, mortgage,
purchase, or sale of property by such corporation or concern; and to pay calls
or subscriptions with respect to any security held in the Trust;
(s) To compromise, arbitrate, or otherwise adjust claims in
favor of or against the Trust or any matter in controversy including, but not
limited to, claims for taxes;
(t) To make distributions of income, capital gains, returns of
capital (if any) and redemption proceeds to Shareholders in the manner
hereinafter provided for;
(u) To establish committees for such purposes, with such
membership, and with such responsibilities as the Trustees may consider proper,
including a committee consisting of fewer than all of the Trustees then in
office, which may act for and bind the Trustees and the Trust with respect to
the institution, prosecution, dismissal, settlement, review or investigation of
any legal action, suit or proceeding, pending or threatened;
(v) To issue, sell, repurchase, redeem, cancel, retire,
acquire, hold, resell, reissue, dispose of and otherwise deal in Shares; to
establish terms and conditions regarding the issuance, sale, repurchase,
redemption, cancellation, retirement, acquisition, holding, resale, reissuance,
disposition of or dealing in Shares; and, subject to Articles V and VI, to apply
to any such repurchase, redemption, retirement, cancellation or acquisition of
Shares of any funds or property of the Trust or of the particular Series or
Class with respect to which such Shares are issued;
(w) To invest part or all of the Trust Property (or part or
all of the assets of any Series or Class), or to dispose of part or all of the
Trust Property (or part or all of the assets of any Series or Class) and invest
the proceeds of such disposition, in securities issued by one or more other
investment companies registered under the 1940 Act all without any requirement
of approval by Shareholders. Any such other investment company may (but need
not) be a trust (formed under the laws of the State of Delaware or of any other
state) which is classified as a partnership for federal income tax purposes;
(x) To carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary or
desirable to accomplish any purpose or to further any of the foregoing powers,
and to take every other action incidental to the foregoing business or purposes,
objects or powers;
(y) To sell or exchange any or all of the assets of the Trust,
subject to Article IX, Section 4;
(z) To enter into joint ventures, partnerships and other
combinations and associations;
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(aa) To join with other security holders in acting through a
committee, depositary, voting trustee or otherwise, and in that connection to
deposit any security with, or transfer any security to, any such committee,
depositary or trustee, and to delegate to them such power and authority with
relation to any security (whether or not so deposited or transferred) as the
Trustees shall deem proper, and to agree to pay, and to pay, such portion of the
expenses and compensation of such Committee, depositary or trustee as the
Trustees shall deem proper;
(bb) To purchase and pay for entirely out of Trust Property
such insurance as the Trustees may deem necessary or appropriate for the conduct
of the business, including, without limitation, insurance policies insuring the
assets of the Trust or payment of distributions and principal on its portfolio
investments, and, subject to applicable law and any restrictions set forth in
the By-laws, insurance policies insuring the Shareholders, Trustees, officers,
employees, agents, investment advisers, Principal Underwriters, or independent
contractors of the Trust, individually, against all claims and liabilities of
every nature arising by reason of holding Shares, holding, being or having held
any such office or position, or by reason of any action alleged to have been
taken or omitted by any such Person as Trustee, officer, employee, agent,
investment adviser, Principal underwriter, or independent contractor, including
any action taken or omitted that may be determined to constitute negligence,
whether or not the Trust would have the power to indemnify such Person against
liability;
(cc) To adopt, establish and carry out pension,
profit-sharing, share bonus, share purchase, savings, thrift and other
retirement, incentive and benefit plans and trusts, including the 6 purchasing
of life insurance and annuity contracts as a means of providing such retirement
and other benefits, for any or all of the Trustees, officers, employees and
agents of the Trust;
(dd) To enter into contracts of any kind and description;
(ee) To interpret the investment policies, practices or
limitations of any Series or Class; and
(ff) To guarantee indebtedness and contractual obligations of
others. The clauses above shall be construed as objects and powers, and the
enumeration of specific powers shall not limit in any way the general powers of
the Trustees. Any action by one or more of the Trustees in their capacity as
such hereunder shall be deemed an action on behalf of the Trust or the
applicable Series or Classes, and not an action in an individual capacity. No
one dealing with the Trustees shall be under any obligation to make any inquiry
concerning the authority of the Trustees, or to see to the application of any
payments made or property transferred to the Trustees or upon their order. In
construing this Declaration, the presumption shall be in favor of a grant of
power to the Trustees.
SECTION 3. Certain Transactions. Except as prohibited by applicable
law, the Trustees may, on behalf of the Trust, buy any securities from or sell
any securities to, or lend any assets of the Trust to, any Trustee or officer of
the Trust or any firm of which any such Trustee or officer is a member acting as
principal, or have any such dealings with any investment adviser, administrator,
distributor or transfer agent for the Trust or with any Interested Person of
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such person. The Trust may employ any such person or entity in which such person
is an Interested Person, as broker, legal counsel, registrar, investment
adviser, administrator, distributor, transfer agent, dividend disbursing agent,
custodian or in any other capacity upon customary terms.
SECTION 4. Initial Trustees; Election and Number of Trustees. The
initial Trustee shall be the person initially signing this Declaration. The
number of Trustees (other than the initial Trustee) shall be fixed from time to
time by a majority of the Trustees; provided, that there shall be at least one
(1) Trustee and no more than fifteen (15). The Shareholders shall elect the
Trustees (other than the initial Trustee) on such dates as the Trustees may fix
from time to time.
SECTION 5. Term of Office of Trustees. Each Trustee shall hold
office for life or until his successor is elected or the Trust terminates;
except that (a) any Trustee may resign by delivering to the other Trustees or to
any Trust officer a written resignation effective upon such delivery or a later
date specified therein; (b) any Trustee may be removed with or without cause at
any time by a written instrument signed by at least a majority of the then
Trustees, specifying the effective date of removal; (c) any Trustee who requests
to be retired, or who is declared bankrupt or has become physically or mentally
incapacitated or is otherwise unable to serve, may be retired by a written
instrument signed by a majority of the other Trustees, specifying the effective
date of retirement; and (d) any Trustee may be removed at any meeting of the
Shareholders by a vote of at least two-thirds of the Outstanding Shares.
SECTION 6. Vacancies; Appointment of Trustees. Whenever a vacancy
shall exist in the Board of Trustees, regardless of the reason for such vacancy,
the remaining Trustees shall appoint any person as they determine in their sole
discretion to fill that vacancy, consistent with the limitations under the 1940
Act. Such appointment shall be made by a written instrument signed by a majority
of the Trustees or by a resolution of the Trustees, duly adopted and recorded in
the records of the Trust, specifying the effective date of the appointment. The
Trustees may appoint a new Trustee as provided above in anticipation of a
vacancy expected to occur because of the retirement, resignation or removal of a
Trustee, or an increase in number of Trustees, provided that such appointment
shall become effective only at or after the expected vacancy occurs. As soon as
any such Trustee has accepted his appointment in writing, the trust estate shall
vest in the new Trustee, together with the continuing Trustees, without any
further act or conveyance, and he shall be deemed a Trustee hereunder. The
Trustees' power of appointment is subject to Section 16(a) of the 1940 Act.
Whenever a vacancy in the number of Trustees shall occur, until such vacancy is
filled as provided in this Article II, the Trustees in office, regardless of
their number, shall have all the powers granted to the Trustees and shall
discharge all the duties imposed upon the Trustees by the Declaration. The
death, declination to serve, resignation, retirement, removal or incapacity of
one or more Trustees, or all of them, shall not operate to annul the Trust or to
revoke any existing agency created pursuant to the terms of this Declaration of
Trust.
SECTION 7. Temporary Vacancy or Absence. Whenever a vacancy in the
Board of Trustees shall occur, until such vacancy is filled, or while any
Trustee is absent from his domicile (unless that Trustee has made arrangements
to be informed about, and to participate
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in, the affairs of the Trust during such absence), or is physically or mentally
incapacitated, the remaining Trustees shall have all the powers hereunder and
their certificate as to such vacancy, absence, or incapacity shall be
conclusive. Any Trustee may, by power of attorney, delegate his powers as
Trustee for a period not exceeding six (6) months at any one time to any other
Trustee or Trustees.
SECTION 8. Chairman. The Trustees shall appoint one of their number
to be Chairman of the Board of Trustees. The Chairman shall preside at all
meetings of the Trustees, shall be responsible for the execution of policies
established by the Trustees and the administration of the Trust, and may be the
chief executive, financial and/or accounting officer of the Trust.
SECTION 9. Action by the Trustees. The Trustees shall act by
majority vote at a meeting duly called at which a quorum is present, including a
meeting held by conference telephone, teleconference or other electronic media
or communication equipment by means of which all persons participating in the
meeting can communicate with each other; or by written consent of a majority of
Trustees (or such greater number as may be required by applicable law) without a
meeting. A majority of the Trustees shall constitute a quorum at any meeting.
Meetings of the Trustees may be called orally or in writing by the president of
the Trust or by any one of the Trustees. Notice of the time, date and place of
all Trustees' meetings shall be given to each Trustee as set forth in the
By-laws; provided, however, that no notice is required if the Trustees provide
for regular or stated meetings. Notice need not be given to any Trustee who
attends the meeting without objecting to the lack of notice or who signs a
waiver of notice either before or after the meeting. The Trustees by majority
vote may delegate to any Trustee or Trustees or committee authority to approve
particular matters or take particular actions on behalf of the Trust. Any
written consent or waiver may be provided and delivered to the Trust by
facsimile or other similar electronic mechanism.
SECTION 10. Ownership of Trust Property. The Trust Property of the
Trust and of each Series and Class shall be held separate and apart from any
assets now or hereafter held in any capacity other than as Trustee hereunder by
the Trustees or any successor Trustees. Legal title in and beneficial ownership
of all of the assets of the Trust shall at all times be considered as vested in
the Trust, except that the Trustees may cause legal title in and beneficial
ownership of any Trust Property to be held by, or in the name of one or more of
the Trustees acting for and on behalf of the Trust, or in the name of any person
as nominee acting for and on behalf of the Trust. No Shareholder shall be deemed
to have a severable ownership in any individual asset of the Trust or of any
Series or Class or any right of partition or possession thereof, but each
Shareholder shall have, as provided in Article V, a proportionate undivided
beneficial interest in the Trust or Series or Class thereof represented by
Shares. The Shares shall be personal property giving only the rights
specifically set forth in this Trust Instrument. The Trust, or at the
determination of the Trustees one or more of the Trustees or a nominee acting
for and on behalf of the Trust, shall be deemed to hold legal title and
beneficial ownership of any income earned on securities of the Trust issued by
any business entities formed, organized, or existing under the laws of any
jurisdiction, including the laws of any foreign country. Upon the resignation or
removal of a Trustee, or his otherwise ceasing to be a Trustee, he shall execute
and deliver such documents as the remaining Trustees shall require for the
purpose of conveying to the Trust or
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the remaining Trustees any Trust Property held in the name of the resigning or
removed Trustee. Upon the incapacity or death of any Trustee, his legal
representative shall execute and deliver on his behalf such documents as the
remaining Trustees shall require as provided in the preceding sentence.
SECTION 11. Effect of Trustees Not Serving. The death, resignation,
retirement, removal, incapacity or inability or refusal to serve of the
Trustees, or any one of them, shall not operate to annul the Trust or to revoke
any existing agency created pursuant to the terms of this Declaration.
SECTION 12. Trustees, etc. as Shareholders. Subject to any
restrictions in the By-laws, any Trustee, officer, agent or independent
contractor of the Trust may acquire, own and dispose of Shares to the same
extent as any other Shareholder; the Trustees may issue and sell Shares to and
buy Shares from any such person or any firm or company in which such person is
interested, subject only to any general limitations herein.
SECTION 13. Series Trustees. In connection with the establishment of
one or more Series or Classes, the Trustees establishing such Series or Classes
may appoint, to the extent permitted by the Delaware Act, separate Trustees with
respect to such Series or Classes (the "Series Trustees"). Series Trustees may,
but are not required to, serve as Trustees of the Trust or any other Series or
Classes of the Trust. The Series Trustees shall have, to the exclusion of any
other Trustee of the Trust, all the powers and authorities of Trustees hereunder
with respect to such Series or Classes, but shall have no power or authority
with respect to any other Series or Classes. Any provision of this Declaration
relating to election of Trustees by Shareholders only shall entitle the
Shareholders of a Series or Class for which Series Trustees have been appointed
to vote with respect to the election of such Series Trustees and the
Shareholders of any other Series or Classes shall not be entitled to participate
in such vote. In the event that Series Trustees are appointed, the Trustees
initially appointing such Series Trustees shall, without the approval of any
Outstanding Shares, amend either the Declaration or the By-laws to provide for
the respective responsibilities of the Trustees and the Series Trustees in
circumstances where an action of the Trustees or Series Trustees affects all
Series and Classes of the Trust or two or more Series or Classes represented by
different Trustees.
ARTICLE III
CONTRACTS WITH SERVICE PROVIDERS
SECTION 1. Underwriting Contract. The Trustees may in their
discretion from time to time enter into an exclusive or non-exclusive
distribution contract or contracts providing for the sale of the Shares whereby
the Trustees may either agree to sell the Shares to the other party to the
contract or appoint such other party as their sales agent for the Shares, and in
either case on such terms and conditions, if any, as may be prescribed in the
By-laws, and such further terms and conditions as the Trustees may in their
discretion determine not inconsistent with the provisions of this Article III or
of the By-laws; and such contract may also provide for the repurchase of the
Shares by such other party as agent of the Trustees.
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SECTION 2. Advisory or Management Contract. The Trustees may in
their discretion from time to time enter into one or more investment advisory or
management contracts or, if the Trustees establish multiple Series or Classes,
separate investment advisory or management contracts with respect to one or more
Series or Classes whereby the other party or parties to any such contracts shall
undertake to furnish the Trust or such Series or Class management, investment
advisory, administration, accounting, legal, statistical and research facilities
and services, promotional or marketing activities, and such other facilities and
services, if any, as the Trustees shall from time to time consider desirable and
all upon such terms and conditions as the Trustees may in their discretion
determine. Notwithstanding any provisions of the Declaration, the Trustees may
authorize the Investment Advisers or persons to whom the Investment Adviser
delegates certain or all of their duties, or any of them, under any such
contracts (subject to such general or specific instructions as the Trustees may
from time to time adopt) to effect purchases, sales, loans or exchanges of
portfolio securities and other investments of the Trust on behalf of the
Trustees or may authorize any officer, employee or Trustee to effect such
purchases, sales, loans or exchanges pursuant to recommendations of such
Investment Advisers, or any of them (and all without further action by the
Trustees). Any such purchases, sales, loans and exchanges shall be deemed to
have been authorized by all of the Trustees. The Trustees may, in their sole
discretion, call a meeting of Shareholders to obtain Shareholder approval for
the continuance of any such investment advisory or management agreement.
SECTION 3. Administration Agreement. The Trustees may in their
discretion from time to time enter into an administration agreement or, if the
Trustees establish multiple Series or Classes, separate administration
agreements with respect to each Series or Class, whereby the other party to such
agreement shall undertake to manage the business affairs of the Trust or of a
Series or Class thereof of the Trust and furnish the Trust or a Series or Class
thereof with office facilities, and shall be responsible for the ordinary
clerical, bookkeeping and record-keeping services at such office facilities, and
other facilities and services, if any, and all upon such terms and conditions as
the Trustees may in their discretion determine.
SECTION 4. Service Agreement. The Trustees may in their discretion
from time to time enter into service agreements with respect to one or more
Series or Classes of Shares whereby the other parties to such Service Agreements
will provide administration and/or support services pursuant to administration
plans and service plans, and all upon such terms and conditions as the Trustees
in their discretion may determine.
SECTION 5. Transfer Agent. The Trustees may in their discretion from
time to time enter into a transfer agency and shareholder service contract
whereby the other party to such contract shall undertake to furnish transfer
agency and shareholder services to the Trust. The contract shall have such terms
and conditions as the Trustees may in their discretion determine not
inconsistent with the Declaration. Such services may be provided by one or more
Persons.
SECTION 6. Custodian. The Trustees may appoint or otherwise engage
one or more banks or trust companies, each having aggregate capital, surplus and
undivided profits (as shown in its last published report) of at least two
million dollars ($2,000,000), or any other entity satisfying the requirements of
the 1940 Act, to serve as Custodian with authority as its agent, but subject to
such restrictions, limitations and other requirements, if any, as may be
contained in the
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By-laws of the Trust. The Trustees may also authorize the Custodian to employ
one or more sub-custodians, including such foreign banks and securities
depositories as meet the requirements of applicable provisions of the 1940 Act,
and upon such terms and conditions as may be agreed upon between the Custodian
and such sub-custodian, to hold securities and other assets of the Trust and to
perform the acts and services of the Custodian, subject to applicable provisions
of law and resolutions adopted by the Trustees.
SECTION 7. Affiliations of Trustees or Officers, Etc. The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust or any Series or
Class thereof is a shareholder, director, officer, partner, trustee, employee,
manager, adviser or distributor of or for any partnership, corporation, trust,
association or other organization or of or for any parent or affiliate of any
organization, with which a contract of the character described in this Article
III or for services as Custodian, Transfer Agent or disbursing agent or for
related services may have been or may hereafter be made, or that any such
organization, or any parent or affiliate thereof, is a Shareholder of or has an
interest in the Trust, or that (ii) any partnership, corporation, trust,
association or other organization with which a contract of the character
described in Sections 1, 2, 3 or 4 of this Article III or for services as
Custodian, Transfer Agent or disbursing agent or for related services may have
been or may hereafter be made also has any one or more of such contracts with
one or more other partnerships, corporations, trusts, associations or other
organizations, or has other business or interests, shall not affect the validity
of any such contract or disqualify any Shareholder, Trustee or officer of the
Trust from voting upon or executing the same or create any liability or
accountability to the Trust or its Shareholders.
ARTICLE IV
COMPENSATION, LIMITATION OF LIABILITY AND INDEMNIFICATION
SECTION 1. Compensation. The Trustees as such shall be entitled to
reasonable compensation from the Trust, and they may fix the amount of such
compensation. Nothing herein shall in any way prevent the employment of any
Trustee for advisory, management, legal, accounting, investment banking or other
services and payment for the same by the Trust.
SECTION 2. Limitation of Liability. All persons contracting with or
having any claim against the Trust or a particular Series or Class shall look
only to the assets of all Series or Classes or such particular Series or Class
for payment under such contract or claim; and neither the Trustees nor, when
acting in such capacity, any of the Trust's officers, employees or agents,
whether past, present or future, shall be personally liable therefore. Every
written instrument or obligation on behalf of the Trust or any Series or Class
shall contain a statement to the foregoing effect, but the absence of such
statement shall not operate to make any Trustee or officer of the Trust liable
thereunder. Provided they have exercised reasonable care and have acted under
the reasonable belief that their actions are in the best interest of the Trust,
the Trustees and officers of the Trust shall not be responsible or liable for
any act or omission or for neglect or wrongdoing of them or any officer, agent,
employee, investment adviser or independent contractor of the Trust, but nothing
contained in this Declaration or in the Delaware Act shall protect any Trustee
or officer of the Trust against liability to the Trust or to Shareholders to
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which he would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his office.
SECTION 3. Indemnification. (a) Subject to the exceptions and
limitations contained in subsection (b) below: (i) every person who is, or has
been, a Trustee or an officer, employee or agent of the Trust (including any
individual who serves at its request as director, officer, partner, trustee or
the like of another organization in which it has any interest as a shareholder,
creditor or otherwise) ("Covered Person") shall be indemnified by the Trust or
the appropriate Series or Class to the fullest extent permitted by law against
liability and against all expenses reasonably incurred or paid by him in
connection with any claim, action, suit or proceeding in which he becomes
involved as a party or otherwise by virtue of his being or having been a Covered
Person and against amounts paid or incurred by him in the settlement thereof;
and (ii) as used herein, the words "claim," "action," "suit," or "proceeding"
shall apply to all claims, actions, suits or proceedings (civil, criminal or
other, including appeals), actual or threatened, and the words "liability" and
"expenses" shall include, without limitation, attorneys' fees, costs, judgments,
amounts paid in settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered
Person:
(i) who shall have been adjudicated by a court or body
before which the proceeding was brought
(A) to be liable to the Trust or its Shareholders by
reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties
involved in the conduct of his office, or
(B) not to have acted in good faith in the reasonable
belief that his action was in the best interest of
the Trust; or
(ii) in the event of a settlement, unless there has been a
determination that such Covered Person did not engage in
willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct
of his office:
(A) by the court or other body approving the
settlement;
(B) by at least a majority of those Trustees who are
neither Interested Persons of the Trust nor are
parties to the matter based upon a review of
readily available facts (as opposed to a full
trial-type inquiry);
(C) by written opinion of independent legal counsel
based upon a review of readily available facts (as
opposed to a full trial-type inquiry) or
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(D) by a vote of a majority of the Outstanding Shares
entitled to vote (excluding any Outstanding Shares
owned of record or beneficially by such
individual).
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall not be
exclusive of or affect any other rights to which any Covered Person may now or
hereafter be entitled, and shall inure to the benefit of the heirs, executors
and administrators of a Covered Person.
(d) To the maximum extent permitted by applicable law, expenses in
connection with the preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in subsection (a) of this
Section may be paid by the Trust or applicable Series or Class from time to time
prior to final disposition thereof upon receipt of an undertaking by or on
behalf of such Covered Person that such amount will be paid over by him to the
Trust or applicable Series or Class if it is ultimately determined that he is
not entitled to indemnification under this Section; provided, however, that
either
(i) such Covered Person shall have provided appropriate
security for such undertaking,
(ii) the Trust is insured against losses arising out of any
such advance payments or
(iii) either a majority of the Trustees who are neither
Interested Persons of the Trust nor parties to the
matter, or independent legal counsel in a written
opinion, shall have determined, based upon a review of
readily available facts (as opposed to a full trial-type
inquiry) that there is reason to believe that such
Covered Person will not be disqualified from
indemnification under this Section.
(e) Any repeal or modification of this Article IV by the
Shareholders, or adoption or modification of any other
provision of the Declaration or By-laws inconsistent with this
Article, shall be prospective only, to the extent that such
repeal, or modification would, if applied retrospectively,
adversely affect any limitation on the liability of any
Covered Person or indemnification available to any Covered
Person with respect to any act or omission which occurred
prior to such repeal, modification or adoption.
SECTION 4. Indemnification of Shareholders. If any Shareholder or
former Shareholder of any Series or Class shall be held personally liable solely
by reason of his being or having been a Shareholder and not because of his acts
or omissions or for some other reason, the Shareholder or former Shareholder or
his heirs, executors, administrators or other legal representatives or in the
case of any entity, its general successor) shall be entitled out of the assets
belonging to the applicable Series or Class to be held harmless from and
indemnified against all loss and expense arising from such liability. The Trust,
on behalf of the affected Series or Class, shall, upon request by such
Shareholder, assume the defense of any claim made
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against such Shareholder for any act or obligation of the Series or Class and
satisfy any judgment thereon from the assets of the Series or Class.
SECTION 5. No Bond Required of Trustees. No Trustee shall be
obligated to give any bond or other security for the performance of any of his
duties hereunder.
SECTION 6. No Duty of Investigation; Notice in Trust Instruments,
Etc. No purchaser, lender, transfer agent or other Person dealing with the
Trustees or any officer, employee or agent of the Trust or a Series or Class
thereof shall be bound to make any inquiry concerning the validity of any
transaction purporting to be made by the Trustees or by said officer, employee
or agent or be liable for the application of money or property paid, loaned, or
delivered to or on the order of the Trustees or of said officer, employee or
agent. Every obligation, contract, instrument, certificate, Share, other
security of the Trust or a Series or Class thereof or undertaking, and every
other act or thing whatsoever executed in connection with the Trust shall be
conclusively presumed to have been executed or done by the executors thereof
only in their capacity as Trustees under this Declaration or in their capacity
as officers, employees or agents of the Trust or a Series or Class thereof.
Every written obligation, contract, instrument, certificate, Share, other
security of the Trust or a Series or Class thereof or undertaking made or issued
by the Trustees may recite that the same is executed or made by them not
individually, but as Trustees under the Declaration, and that the obligations of
the Trust or a Series or Class thereof under any such instrument are not binding
upon any of the Trustees or Shareholders individually, but bind only the Trust
Property or the Trust Property of the applicable Series or Class, and may
contain any further recital which they may deem appropriate, but the omission of
such recital shall not operate to bind the Trustees individually. The Trustees
shall at all times maintain insurance for the protection of the Trust Property
or the Trust Property of the applicable Series or Class, its Shareholders,
Trustees, officers, employees and agents in such amount as the Trustees shall
deem adequate to cover possible tort liability, and such other insurance as the
Trustees in their sole judgment shall deem advisable.
SECTION 7. Reliance on Experts, Etc. Each Trustee, officer or
employee of the Trust or a Series or Class thereof shall, in the performance of
his duties, powers and discretions hereunder be fully and completely justified
and protected with regard to any act or any failure to act resulting from
reliance in good faith upon the books of account or other records of the Trust
or a Series or Class thereof, upon an opinion of counsel, or upon reports made
to the Trust or a Series or Class thereof by any of its officers or employees or
by the Investment Adviser, the Administrator, the Distributor, Transfer Agent,
selected dealers, accountants, appraisers or other experts or consultants
selected with reasonable care by the Trustees, officers or employees of the
Trust, regardless of whether such counsel or expert may also be a Trustee.
ARTICLE V
SERIES; CLASSES; SHARES
SECTION 1. Establishment of Series or Class. The Trust shall consist
of one or more Series. Without limiting the authority of the Trustees to
establish and designate any further Series, the Trustees hereby establish one
Series which shall be designated the India Technology
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Fund. Each additional Series shall be established and is effective upon the
adoption of a resolution of a majority of the Trustees or any alternative date
specified in such resolution. The Trustees may designate the relative rights and
preferences of the Shares of each Series. The Trustees may divide the Shares of
any Series into Classes. Without limiting the authority of the Trustees to
establish and designate any further Classes, the Trustees hereby establish a
single Class of Shares for the India Technology Fund. The Classes of Shares of
the existing Series herein established and designated and any Shares of any
further Series and Classes that may from time to time be established and
designated by the Trustees shall be established and designated, and the
variations in the relative rights and preferences as between the different
Series and Classes shall be fixed and determined, by the Trustees; provided,
that all Shares shall be identical except for such variations as shall be fixed
and determined between different Series or Classes by the Trustees in
establishing and designating such Series or Classes. In connection therewith
with respect to any Class, the purchase price, the method of determining the net
asset value, and the relative dividend rights of holders shall be as set forth
in the Trust's Registration Statement on Form N-1A under the Securities Act of
1933 and/or the 1940 Act and as in effect at the time of issuing Shares of such
Class. All references to Shares in this Declaration shall be deemed to be Shares
of any or all Series or Classes as the context may require. The Trust shall
maintain separate and distinct records for each Series and hold and account for
the assets thereof separately from the other assets of the Trust or of any other
Series. A Series may issue any number of Shares or any Class thereof and need
not issue Shares. Each Share of a Series shall represent an equal beneficial
interest in the net assets of such Series. Each holder of Shares of a Series or
Class thereof shall be entitled to receive his pro rata share of all
distributions made with respect to such Series or Class. Upon redemption of his
Shares, such Shareholder shall be paid solely out of the funds and property of
such Series. The Trustees may adopt and change the name of any Series or Class.
SECTION 2. Shares. The beneficial interest in the Trust shall be
divided into transferable Shares of one or more separate and distinct Series or
Classes established by the Trustees. The number of Shares of each Series and
Class is unlimited and each Share shall have no par value per Share or such
other amount as the Trustees may establish. All Shares issued hereunder shall be
fully paid and nonassessable. Shareholders shall have no preemptive or other
right to subscribe to any additional Shares or other securities issued by the
Trust. The Trustees shall have full power and authority, in their sole
discretion and without obtaining Shareholder approval, to issue original or
additional Shares at such times and on such terms and conditions as they deem
appropriate; to issue fractional Shares and Shares held in the treasury; to
establish and to change in any manner Shares of any Series or Class with such
preferences, terms of conversion, voting powers, rights and privileges as the
Trustees may determine (but the Trustees may not change Outstanding Shares in a
manner materially adverse to the Shareholders of such Shares); to divide or
combine the Shares of any Series or Class into a greater or lesser number; to
classify or reclassify any unissued Shares of any Series or Class into one or
more Series or Classes of Shares; to abolish any one or more Series or Classes
of Shares; to issue Shares to acquire other assets (including assets subject to,
and in connection with, the assumption of liabilities) and businesses; and to
take such other action with respect to the Shares as the Trustees may deem
desirable. Shares held in the treasury shall not confer any voting rights on the
Trustees and shall not be entitled to any dividends or other distributions
declared with respect to the Shares.
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SECTION 3. Investment in the Trust. The Trustees shall accept
investments in any Series or Class from such persons and on such terms as they
may from time to time authorize. At the Trustees' discretion, such investments,
subject to applicable law, may be in the form of cash or securities in which
that Series or Class is authorized to invest, valued as provided in Article VI,
Section 3. Investments in a Series or Class shall be credited to each
Shareholder's account in the form of full Shares at the Net Asset Value per
Share next determined after the investment is received or accepted as may be
determined by the Trustees; provided, however, that the Trustees may, in their
sole discretion, (a) impose a sales charge upon investments in any Series or
Class, (b) issue fractional Shares, (c) determine the Net Asset Value per Share
of the initial capital contribution or (d) authorize the issuance of Shares at a
price other than Net Asset Value to the extent permitted by the 1940 Act or any
rule, order or interpretation of the Commission thereunder. The Trustees shall
have the right to refuse to accept investments in any Series or Class at any
time without any cause or reason therefor whatsoever.
SECTION 4. Segregation of Series and Classes. Shares of each Series
established by Section 1 of this Article shall have the following rights and
preferences relative to Shares of each other Series, and Shares of each Class of
a Series shall have such rights and preferences relative to other classes of the
same Series as are set forth below, together with such other rights and
preferences relative to such other classes as are set forth in any resolution of
the Trustees establishing and designating such Class of Shares:
(a) Subject to the provisions of paragraph (c) of this Section 4,
all consideration received by the Trust for the issue or sale of Shares of a
particular Series, together with all assets in which such consideration is
invested or reinvested, all income, earnings, profits and proceeds thereof from
whatever source derived, including, without limitation, any proceeds derived
from the sale, exchange or liquidation of such assets, and any funds or payments
derived from any reinvestment of such proceeds in whatever form the same may be,
shall irrevocably belong to that Series for all purposes, subject only to the
rights of creditors, and shall be so recorded upon the books of account of the
Trust. Such consideration, assets, income, earnings, profits and proceeds
thereof, from whatever source derived, including, without limitation, any
proceeds derived from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such proceeds, in whatever
form the same may be, are herein referred to as "assets belonging to" that
Series. In the event that there are any assets, income, earnings, profits and
proceeds thereof, funds or payments which are not readily identifiable as
belonging to any particular Series (collectively "General Assets"), the Trustees
shall allocate such General Assets to, between or among any one or more of the
Series established and designated from time to time in such manner and on such
basis as they, in their sole discretion, deem fair and equitable, and any
General Asset so allocated to a particular Series shall belong to that Series.
Each such allocation by the Trustees shall be conclusive and binding upon the
Shareholders of all Series for all purposes.
(b) Subject to the provisions of paragraph (c) of this Section 4,
the assets belonging to each particular Series shall be charged solely with the
liabilities of the Trust in respect to that Series, the expenses, costs, charges
and reserves attributable to that Series, and any general liabilities of the
Trust which are not readily identifiable as belonging to any
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particular Series but which are allocated and charged by the Trustees to and
among any one or more of the Series established and designated from time to time
in a manner and on such basis as the Trustees in their sole discretion deem fair
and equitable. The liabilities, expenses, costs, charges and reserves so charged
to a Series are herein referred to as "liabilities belonging to" that Series.
Each allocation of liabilities, expenses, costs, charges and reserves by the
Trustees shall be conclusive and binding upon the Shareholders of all Series for
all purposes.
(c) In the case of any Series with more than one Class of Shares, to
the extent necessary or appropriate to give effect to the relative rights and
preferences of any classes of Shares of such Series, (i) any assets, income,
earnings, profits, proceeds, liabilities, expenses, charges, costs and reserves
belonging or attributable to that Series may be allocated or attributed to a
particular class of Shares of that Series or apportioned among two or more
classes of Shares of that Series; and (ii) Shares of any class of such Series
may have priority or preference over shares of other classes of such Series with
respect to dividends or distributions upon termination of the Trust or of such
Series or class or otherwise, provided that no Share shall have any priority or
preference over any other Shares of the same class and that all dividends and
distributions to Shareholders of a particular class shall be made ratably among
all Shareholders of such class according to the number of Shares of such class
held of record by such Shareholders on the record date for any dividend or
distribution or on the date of termination, as the case may be.
(d) Notwithstanding any other provisions of this Declaration, no
dividend or distribution (including, without limitation, any distribution paid
upon termination of the Trust or of any Series or Class) with respect to, nor
any redemption or repurchase of, the Shares of any Series or Class shall be
effected by the Trust other than from the assets belonging to such Series or
attributable to such Class, nor shall any Shareholder of any particular Series
or Class otherwise have any right or claim against the assets belonging to any
other Series or attributable to any other Class except to the extent that such
Shareholder has such a right or claim hereunder as a Shareholder of such other
Series or Class.
(e) Notwithstanding any of the other provisions of this Declaration,
the Shareholders of any particular Series or Class shall not be entitled to vote
on any matters as to which such Series or Class is not affected. On any matter
submitted to a vote of Shareholders, all Shares of the Trust then entitled to
vote shall, except as otherwise provided in the By-Laws, be voted in the
aggregate as a single class without regard to Series or class of Shares, except
that (1) when required by the 1940 Act or when the Trustees shall have
determined that the matter affects one or more Series or Classes of Shares
materially differently, Shares shall be voted by individual Series or Class and
(2) when the matter affects only the interests of one or more Series or Classes,
only Shareholders of such Series or Classes shall be entitled to vote thereon.
There shall be no cumulative voting in the election of Trustees.
(f) Except to the extent necessary or appropriate to give effect to
the relative rights and preferences of any Class, all the Shares of each
particular Series shall represent an equal proportionate interest in the assets
belonging to that Series (subject to the liabilities belonging to that Series),
and each Share of any particular Series shall be equal to each other Share of
that Series. All the Shares of each particular Class shall represent an equal
proportionate
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interest in the assets belonging to such Series that are attributable to such
Class (subject to the liabilities attributable to such Class), and each Share of
any particular Class within a Series shall be equal to each other Share of such
Class.
(g) Any fractional Share of a Series or Class shall carry
proportionately all the rights and obligations of a whole Share of that Series
or class, including rights with respect to voting, receipt of dividends and
distributions, redemption of Shares and termination of the Trust.
(h) The Trustees shall have the authority to provide that the
holders of Shares of any Series or Class shall have the right to exchange said
Shares for Shares of one or more other Series or Classes of Shares in accordance
with such requirements and procedures as may be established by the Trustees.
(i) The Trustees shall have the authority, without the approval of
the Shareholders of any Series or Class unless otherwise required by applicable
law, to combine the assets and liabilities belonging to any two or more Series
or attributable to any Class into assets and liabilities belonging to a single
Series or attributable to a single Class.
(j) At any time that there are no Shares outstanding of any
particular Series previously established and designated, the Trustees may amend
this Declaration to abolish that Series and to rescind the establishment and
designation thereof. At any time that there are no Shares outstanding of any
particular Class, the Trustees may abolish that Class and rescind the
establishment and designation thereof, either by amending this Declaration or by
vote or written consent of a majority of the then Trustees (if such Class was
established and designated by Trustee vote or written consent).
SECTION 5. Ownership and Transfer of Shares. The Trust or a transfer
or similar agent for the Trust shall maintain a register containing the names
and addresses of the Shareholders of each Series and Class thereof, the number
of Shares of each Series and Class held by such Shareholders, and a record of
all Share transfers. The register shall be conclusive as to the identity of
Shareholders of record and the number of Shares held by them from time to time.
The Trustees may authorize the issuance of certificates representing Shares and
adopt rules governing their use. The Trustees may make rules governing the
transfer of Shares, whether or not represented by certificates. Except as
otherwise provided by the Trustees, Shares shall be transferable on the books of
the Trust only by the record holder thereof or by his duly authorized agent upon
delivery to the Trustees or the Trust's transfer agent of a duly executed
instrument of transfer, together with a Share certificate if one is outstanding,
and such evidence or the genuineness of each such execution and authorization
and of such other matters as may be required by the Trustees. Upon such
delivery, and subject to any further requirements specified by the Trustees or
contained in the By-laws, the transfer shall be recorded on the books of the
Trust. Until a transfer is so recorded, the Shareholder of record of Shares
shall be deemed to be the holder of such Shares for all purposes hereunder and
neither the Trustees nor the Trust, nor any transfer agent or registrar or any
officer, employee or agent of the Trust, shall be affected by any notice of a
proposed transfer.
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SECTION 6. Status of Shares; Limitation of Shareholder Liability.
Shares shall be deemed to be personal property giving Shareholders only the
rights provided in this Declaration. Every Shareholder, by virtue of having
acquired a Share, shall be held expressly to have assented to and agreed to be
bound by the terms of this Declaration and to have become a party hereto. No
Shareholder shall be personally liable for the debts, liabilities, obligations
and expenses incurred by, contracted for, or otherwise existing with respect to,
the Trust or any Series or Class. The death, incapacity, dissolution,
termination or bankruptcy of a Shareholder during the existence of the Trust
shall not operate to terminate the Trust, nor entitle the representative of any
such Shareholder to an accounting or to take any action in court or elsewhere
against the Trust or the Trustees, but entitles such representative only to the
rights of such Shareholder under this Trust. Ownership of Shares shall not
entitle the Shareholder to any title in or to the whole or any part of the Trust
Property or right to call for a partition or division of the same or for an
accounting, nor shall the ownership of Shares constitute the Shareholders as
partners. Neither the Trust nor the Trustees shall have any power to bind any
Shareholder personally or to demand payment from any Shareholder for anything,
other than as agreed by the Shareholder. Shareholders shall have the same
limitation of personal liability as is extended to shareholders of a private
corporation for profit incorporated in the State of Delaware. Every written
obligation of the Trust or any Series or Class shall contain a statement to the
effect that such obligation may only be enforced against the assets of the
appropriate Series or Class or all Series and Classes; however, the omission of
such statement shall not operate to bind or create personal liability for any
Shareholder or Trustee.
ARTICLE VI
DISTRIBUTIONS AND REDEMPTIONS
SECTION 1. Distributions. The Trustees or a committee of one or more
Trustees and one or more officers may declare and pay dividends and other
distributions, including dividends on Shares of a particular Series or Class
from the assets belonging to that Series or Class. No dividend or distribution,
including, without limitation, any distribution paid upon termination of the
Trust or of any Series or Class with respect to, nor any redemption or
repurchase of, the Shares of any Series or Class shall be effected by the Trust
other than from the assets held with respect to such Series or Class, nor shall
any Shareholder of any particular Series or Class otherwise have any right or
claim against the assets held with respect to any other Series or Classes except
to the extent that such Shareholder has such a right or claim hereunder as a
Shareholder of such other Series or Classes. The Trustees shall have full
discretion to determine which items shall be treated as income and which items
as capital; and each such determination and allocation shall be conclusive and
binding upon the Shareholders. The amount and payment of dividends or
distributions and their form, whether they are in cash, Shares or other Trust
Property, shall be determined by the Trustees. Dividends and other distributions
may be paid pursuant to a standing resolution adopted once or more often as the
Trustees determine. All dividends and other distributions on Shares of a
particular Series or Class shall be distributed pro rata to the Shareholders of
that Series or Class in proportion to the number of Shares of that Series or
Class they held on the record date established for such payment, except that
such dividends and distributions shall appropriately reflect expenses allocated
to a particular Series or Class. The Trustees may adopt and offer to
Shareholders such
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dividend reinvestment plans, cash dividend payout plans or similar plans as the
Trustees deem appropriate.
SECTION 2. Redemptions. Each Shareholder of a Series or Class shall
have the right at such times as may be permitted by the Trustees to require the
Series or Class to redeem all or any part of his Shares at a redemption price
per Share equal to the Net Asset Value per Share at such time as the Trustees
shall have prescribed by resolution, or, to the extent permitted by the 1940
Act, at such other redemption price and at such times as the Trustees shall
prescribe by resolution. In the absence of such resolution, the redemption price
per Share shall be the Net Asset Value next determined after receipt by the
Series or Class of a request for redemption in proper form less such charges as
are determined by the Trustees and described in the Trust's Registration
Statement for that Series or Class under the Securities Act of 1933. The
Trustees may specify conditions, prices, and places of redemption, may specify
binding requirements for the proper form or forms of requests for redemption and
may specify the amount of any deferred sales charge to be withheld from
redemption proceeds. Payment of the redemption price may be wholly or partly in
securities or other assets at the value of such securities or assets used in
such determination of Net Asset Value, or may be in cash. Upon redemption,
Shares may be reissued from time to time. The Trustees may require Shareholders
to redeem Shares for any reason under terms set by the Trustees, including, but
not limited to, the failure of a Shareholder to supply a taxpayer identification
number if required to do so, or to have the minimum investment required, or to
pay when due for the purchase of Shares issued to him. To the extent permitted
by law, the Trustees may retain the proceeds of any redemption of Shares
required by them for payment of amounts due and owing by a Shareholder to the
Trust or any Series or Class or any governmental authority. Notwithstanding the
foregoing, the Trustees may postpone payment of the redemption price and may
suspend the right of the Shareholders to require any Series or Class to redeem
Shares during any period of time when and to the extent permissible under the
1940 Act.
SECTION 3. Determination of Net Asset Value. The Trustees shall
cause the Net Asset Value of Shares of each Series or Class to be determined
from time to time in a manner consistent with applicable laws and regulations.
The Trustees may delegate the power and duty to determine Net Asset Value per
Share to one or more Trustees or officers of the Trust or to a custodian,
depository or other agent appointed for such purpose. The Net Asset Value of
Shares shall be determined separately for each Series or Class at such times as
may be prescribed by the Trustees or, in the absence of action by the Trustees,
as of the close of regular trading on the New York Stock Exchange on each day
for all or part of which such Exchange is open for unrestricted trading.
SECTION 4. Suspension of Right of Redemption. If, as referred to in
Section 2 of this Article, the Trustees postpone payment of the redemption price
and suspend the right of Shareholders to redeem their Shares, such suspension
shall take effect at the time the Trustees shall specify, but not later than the
close of business on the business day next following the declaration of
suspension. Thereafter Shareholders shall have no right of redemption or payment
until the Trustees declare the end of the suspension. If the right of redemption
is suspended, a Shareholder may either withdraw his request for redemption or
receive payment based on the Net Asset Value per Share next determined after the
suspension terminates.
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SECTION 5. Repurchase by Agreement. The Trust may repurchase Shares
directly, or through the Distributor or another agent designated for the
purpose, by agreement with the owner thereof at a price based on the Net Asset
Value per Share next determined after the time when the purchase or contract of
purchase is made.
ARTICLE VII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
SECTION 1. Voting Powers. The Shareholders shall have power to vote
only with respect to (a) the election of Trustees as provided in Section 2 of
this Article; (b) the removal of Trustees as provided in Article II, Section 5;
(c) any investment advisory or management contract as provided in Article III,
Section 2; (d) any termination of the Trust as provided in Article IX, Section
4; (e) the amendment of this Declaration to the extent and as provided in
Article IX, Section 8; and (f) such additional matters relating to the Trust as
may be required or authorized by law, this Declaration, or the By-laws or any
registration of the Trust with the Commission or any State, or as the Trustees
may consider desirable. On any matter submitted to a vote of the Shareholders,
all Shares shall be voted by individual Series or Class, except (a) when
required by the 1940 Act, Shares shall be voted in the aggregate and not by
individual Series or Class, and (b) when the Trustees have determined that the
matter affects the interests of more than one Series or Class, then the
Shareholders of all affected Series or Classes shall be entitled to vote
thereon. As determined by the Trustees without the vote or consent of
shareholders, on any matter submitted to a vote of Shareholders either (i) each
whole Share shall be entitled to one vote as to any matter on which it is
entitled to vote and each fractional Share shall be entitled to a proportionate
fractional vote or (ii) each dollar of net asset value (number of Shares owned
times net asset value per share of such Series or Class, as applicable) shall be
entitled to one vote on any matter on which such Shares are entitled to vote and
each fractional dollar amount shall be entitled to a proportionate fractional
vote. Without limiting the power of the Trustees in any way to designate
otherwise in accordance with the preceding sentence, the Trustees hereby
establish that each whole Share shall be entitled to one vote as to any matter
on which it is entitled to vote and each fractional Share shall be entitled to a
proportionate fractional vote. There shall be no cumulative voting in the
election of Trustees. Shares may be voted in person or by proxy or in any manner
provided for in the By-laws. The By-laws may provide that proxies may be given
by any electronic or telecommunications device or in any other manner, but if a
proposal by anyone other than the officers or Trustees is submitted to a vote of
the Shareholders of any Series or Class, or if there is a proxy contest or proxy
solicitation or proposal in opposition to any proposal by the officers or
Trustees, Shares may be voted only in person or by written proxy. Until Shares
of a Series or Class are issued, as to that Series or Class the Trustees may
exercise all rights of Shareholders and may take any action required or
permitted to be taken by Shareholders by law, this Declaration or the By-laws.
Meetings of Shareholders shall be called and notice thereof and record dates
therefor shall be given and set as provided in the By-laws.
SECTION 2. Quorum; Required Vote. One-third of the Outstanding
Shares of each Series or Class, or one-third of the Outstanding Shares of the
Trust, entitled to vote in
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person or by proxy shall be a quorum for the transaction of business at a
Shareholders' meeting with respect to such Series or Class, or with respect to
the entire Trust, respectively. Any lesser number shall be sufficient for
adjournments. Any adjourned session of a Shareholders' meeting may be held
within a reasonable time without further notice. Except when a larger vote is
required by law, this Declaration or the By-laws, a majority of the Shares
voting at a Shareholders' meeting in person or by proxy shall decide any matters
to be voted upon with respect to the entire Trust and a plurality of such Shares
shall elect a Trustee; provided, that if this Declaration or applicable law
permits or requires that Shares be voted on any matter by individual Series or
Class, then a majority of the Shares of that Series or Class (or, if required by
law, a majority of the Shares outstanding and entitled to vote of that Series or
Class) voting at a Shareholders' meeting in person or by proxy on the matter
shall decide that matter insofar as that Series or Class is concerned.
Shareholders may act as to the Trust or any Series or Class by the written
consent of a majority (or such other amount as may be required by applicable
law) of the Outstanding Shares of the Trust or of such Series or Class, as the
case may be.
SECTION 3. Record Dates. For the purpose of determining the
Shareholders of any Series or Class who are entitled to receive payment of any
dividend or of any other distribution, the Trustees may from time to time fix a
date, which shall be before the date for the payment of such dividend or such
other payment, as the record date for determining the Shareholders of such
Series or Class having the right to receive such dividend or distribution.
Without fixing a record date, the Trustees may for distribution purposes close
the register or transfer books for one or more Series or Classes any time prior
to the payment of a distribution. Nothing in this Section shall be construed as
precluding the Trustees from setting different record dates for different Series
or Classes.
SECTION 4. Additional Provisions. The By-laws may include further
provisions for Shareholders' votes and meetings and related matters.
ARTICLE VIII
EXPENSES OF THE TRUST AND SERIES
SECTION 1. Payment of Expenses by the Trust. Subject to Article V,
Section 4, the Trust or a particular Series or Class shall pay, or shall
reimburse the Trustees from the assets belonging to all Series and Classes or
the particular Series or Class, for their expenses and disbursements, including,
but not limited to, interest charges, taxes, brokerage fees and commissions;
expenses of issue, repurchase and redemption of Shares; certain insurance
premiums; applicable fees, interest charges and expenses of third parties,
including the Trust's investment advisers, managers, administrators,
distributors, custodians, transfer agents and fund accountants; fees of pricing,
interest, dividend, credit and other reporting services; costs of membership in
trade associations; telecommunications expenses; funds transmission expenses;
auditing, legal and compliance expenses; costs of forming the Trust and its
Series and Classes and maintaining its existence; costs of preparing and
printing the prospectuses of the Trust and each Series and Class, statements of
additional information and Shareholder reports and delivering them to
Shareholders; expenses of meetings of Shareholders and proxy solicitations
therefor; costs of maintaining books and accounts; costs of reproduction,
stationery and supplies;
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fees and expenses of the Trustees; compensation of the Trust's officers and
employees and costs of other personnel performing services for the Trust or any
Series or Class; costs of Trustee meetings; Commission registration fees and
related expenses; state or foreign securities laws registration fees and related
expenses; and for such non-recurring items as may arise, including litigation to
which the Trust or a Series or Class (or a Trustee or officer of the Trust
acting as such) is a party, and for all losses and liabilities by them incurred
in administering the Trust. The Trustees shall have a lien on the assets
belonging to the appropriate Series or Class, or in the case of an expense
allocable to more than one Series or Classes, on the assets of each such Series
or Classes, prior to any rights or interests of the Shareholders thereto, for
the reimbursement to them of such expenses, disbursements, losses and
liabilities.
ARTICLE IX
MISCELLANEOUS
SECTION 1. Trust Not a Partnership. This Declaration creates a trust
and not a partnership. No Trustee shall have any power to bind personally either
the Trust's officers or any Shareholder.
SECTION 2. Trustee Action. The exercise by the Trustees of their
powers and discretion hereunder in good faith and with reasonable care under the
circumstances then prevailing shall be binding upon everyone interested. Subject
to the provisions of Article IV, the Trustees shall not be liable for errors of
judgment or mistakes of fact or law.
SECTION 3. Record Dates. The Trustees may fix in advance a date up
to ninety (90) days before the date of any Shareholders' meeting, or the date
for the payment of any dividends or other distributions, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
Shares shall go into effect as a record date for the determination of the
Shareholders entitled to notice of, and to vote at, any such meeting, or
entitled to receive payment of such dividend or other distribution, or to
receive any such allotment of rights, or to exercise such rights in respect of
any such change, conversion or exchange of Shares.
SECTION 4. Termination of the Trust. (a) This Trust shall have
perpetual existence. Subject to the vote of a majority of the Shares outstanding
and entitled to vote of the Trust or of each Series or Class to be affected, the
Trustees may (i) sell and convey all or substantially all of the assets of all
Series or Classes or any affected Series or Class to another Series or Class or
to another entity which is an open-end investment company as defined in the 1940
Act, or is a series thereof, for adequate consideration, which may include the
assumption of all outstanding obligations, taxes and other liabilities, accrued
or contingent, of the Trust or any affected Series or Class, and which may
include shares of or interests in such Series or Class, entity, or series
thereof; or (ii) at any time sell and convert into money all or substantially
all of the assets of all Series and Classes or any affected Series or Class.
Upon making reasonable provision for the payment of all known liabilities of all
Series and Classes or any affected Series or Class in either (i) or (ii), by
such assumption or otherwise, the Trustees shall distribute the remaining
proceeds or assets (as the case may be) ratably among the Shareholders of all
Series
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and Classes or any affected Series or Class; however, the payment to any
particular Class of such Series may be reduced by any fees, expenses or charges
allocated to that Class.
(b) The Trustees may take any of the actions specified in subsection
(a)(i) and (ii) above without obtaining the vote of a majority of the Shares
Outstanding and entitled to vote of the Trust or any Series or Class if a
majority of the Trustees determines that the continuation of the Trust or Series
or Class is not in the best interests of the Trust, such Series or Class, or
their respective Shareholders as a result of factors or events adversely
affecting the ability of the Trust or such Series or Class to conduct its
business and operations in an economically viable manner. Such factors and
events may include the inability of the Trust or a Series or Class to maintain
its assets at an appropriate size, changes in laws or regulations governing the
Trust or the Series or Class or affecting assets of the type in which the Trust
or Series or Class invests, or economic developments or trends having a
significant adverse impact on the business or operations of the Trust or such
Series or Class.
(c) Upon completion of the distribution of the remaining proceeds or
assets pursuant to subsection (a), the Trust or affected Series or Class shall
terminate and the Trustees and the Trust shall be discharged of any and all
further liabilities and duties hereunder with respect thereto and the right,
title and interest of all parties therein shall be canceled and discharged. Upon
termination of the Trust, following completion of winding up of its business,
the Trustees shall cause a certificate of cancellation of the Trust's
certificate of trust to be filed in accordance with the Delaware Act, which
certificate of cancellation may be signed by any one Trustee.
SECTION 5. Reorganization. (a) Notwithstanding anything else herein,
to change the Trust's form or place of organization the Trustees may, without
Shareholder approval unless such approval is required by applicable law, (i)
cause the Trust to merge or consolidate with or into one or more entities, if
the surviving or resulting entity is the Trust or another open-end management
investment company under the 1940 Act, or a series thereof, that will succeed to
or assume the Trust's registration under the 1940 Act, (ii) cause the Shares to
be exchanged under or pursuant to any state or federal statute to the extent
permitted by law, or (iii) cause the Trust to incorporate under the laws of
Delaware or any other U.S. jurisdiction. Any agreement of merger or
consolidation or certificate of merger may be signed by a majority of Trustees
and facsimile signatures conveyed by electronic or telecommunication means shall
be valid.
(b) Pursuant to and in accordance with the provisions of Section
3815(f) of the Delaware Act, an agreement of merger or consolidation approved by
the Trustees in accordance with this Section 5 may effect any amendment to the
Declaration or effect the adoption of a new trust instrument of the Trust if it
is the surviving or resulting trust in the merger or consolidation.
(c) The Trustees may create one or more business trusts to which all
or any part of the assets, liabilities, profits or losses of the Trust or any
Series or Class thereof may be transferred and may provide for the conversion of
Shares in the Trust or any Series or Class thereof into beneficial interests in
any such newly created trust or trusts or any series or classess thereof.
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SECTION 6. Declaration of Trust. The original or a copy of
this Declaration of Trust and of each amendment hereto or Declaration of Trust
supplemental shall be kept at the office of the Trust where it may be inspected
by any Shareholder. Anyone dealing with the Trust may rely on a certificate by a
Trustee or an officer of the Trust as to the authenticity of the Declaration of
Trust or any such amendments or supplements and as to any matters in connection
with the Trust. The masculine gender herein shall include the feminine and
neuter genders. Headings herein are for convenience only and shall not affect
the construction of this Declaration of Trust. This Declaration of Trust may be
executed in any number of counterparts, each of which shall be deemed an
original.
SECTION 7. Applicable Law. This Declaration and the Trust
created hereunder are governed by and construed and administered according to
the Delaware Act and the applicable laws of the State of Delaware; provided,
however, that there shall not be applicable to the Trust, the Trustees or this
Declaration of Trust (a) the provisions of Section 3540 of Title of the Delaware
Code, or (b) any provisions of the laws (statutory or common) of the State of
Delaware (other than the Delaware Act) pertaining to trusts which relate to or
regulate (i) the filing with any court or governmental body or agency of trustee
accounts or schedules of trustee fees and charges, (ii) affirmative requirements
to post bonds for trustees, officers, agents or employees of a trust, (iii) the
necessity for obtaining court or other governmental approval concerning the
acquisition, holding or disposition of real or personal property, (iv) fees or
other sums payable to trustees, officers, agents or employees of a trust, (v)
the allocation of receipts and expenditures to income or principal, (vi)
restrictions or limitations on the permissible nature, amount or concentration
of trust investments or requirements relating to the titling, storage or other
manner of holding of trust assets, or (vii) the establishment of fiduciary or
other standards of responsibilities or limitations on the acts or powers of
trustees, which are inconsistent with the limitations or liabilities or
authorities and powers of the Trustees set forth or referenced in this
Declaration. The Trust shall be of the type commonly called a Delaware business
trust, and, without limiting the provisions hereof, the Trust may exercise all
powers which are ordinarily exercised by such a trust under Delaware law. The
Trust specifically reserves the right to exercise any of the powers or
privileges afforded to trusts or actions that may be engaged in by trusts under
the Delaware Act, and the absence of a specific reference herein to any such
power, privilege or action shall not imply that the Trust may not exercise such
power or privilege or take such actions.
SECTION 8. Amendments. The Trustees may, without any
Shareholder vote, amend or otherwise supplement this Declaration by making an
amendment, a Declaration of Trust supplemental hereto or an amended and restated
trust instrument; provided, that Shareholders shall have the right to vote on
any amendment (a) which would affect the voting rights of Shareholders granted
in Article VII, Section l, (b) to this Section 8, (c) required to be approved by
Shareholders by law or by the Trust's registration statement(s) filed with the
Commission, and (d) submitted to them by the Trustees in their discretion. Any
amendment submitted to Shareholders which the Trustees determine would affect
the Shareholders of any Series or Class shall be authorized by vote of the
Shareholders of such Series or Class and no vote shall be required of
Shareholders of a Series or Class not affected. Notwithstanding anything else
herein, any amendment to Article IV which would have the effect of reducing the
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indemnification and other rights provided thereby to Trustees, officers,
employees, and agents of the Trust or to Shareholders or former Shareholders,
and any repeal or amendment of this sentence shall each require the affirmative
vote of the holders of two-thirds of the Outstanding Shares of the Trust
entitled to vote thereon.
SECTION 9. Derivative Actions. In addition to the requirements
set forth in Section 3816 of the Delaware Act, a Shareholder may bring a
derivative action on behalf of the Trust only if the following conditions are
met: (a) Shareholders eligible to bring such derivative action under the
Delaware Act who hold at least 10% of the Outstanding Shares of the Trust, or
10% of the Outstanding Shares of the Series or Class to which such action
relates, shall join in the request for the Trustees to commence such action; and
(b) the Trustees must be afforded a reasonable amount of time to consider such
shareholder request and to investigate the basis of such claim. The Trustees
shall be entitled to retain counsel or other advisers in considering the merits
of the request and shall require an undertaking by the Shareholders making such
request to reimburse the Trust for the expense of any such advisers in the event
that the Trustees determine not to bring such action.
SECTION 10. Fiscal Year. The fiscal year of the Trust shall
end on a specified date as set forth in the By-laws. The Trustees may change the
fiscal year of the Trust without Shareholder approval.
SECTION 11. Severability. The provisions of this Declaration
are severable. If the Trustees determine, with the advice of counsel, that any
provision hereof conflicts with the 1940 Act, the regulated investment company
provisions of the Internal Revenue Code or with other applicable laws and
regulations, the conflicting provision shall be deemed never to have constituted
a part of this Declaration; provided, however, that such determination shall not
affect any of the remaining provisions of this Declaration or render invalid or
improper any action taken or omitted prior to such determination. If any
provision hereof shall be held invalid or unenforceable in any jurisdiction,
such invalidity or unenforceability shall attach only to such provision only in
such jurisdiction and shall not affect any other provision of this Declaration.
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IN WITNESS WHEREOF, the undersigned has executed this
instrument as of the date first written above.
/s/ Vikas Mehrotra
--------------------------
Vikas Mehrotra, as Trustee
Exhibit 23(b)
BY-LAWS OF VENUS SERIES TRUST
ARTICLE I
DEFINITIONS
Unless otherwise defined herein or the context clearly requires
otherwise, capitalized terms have the meanings given them in the Agreement and
Declaration of Trust of Venus Series Trust dated November 8, 1999, as amended or
restated from time to time (the "Declaration of Trust").
ARTICLE II
OFFICES
Section 1. Principal Office. Unless changed by the Trustees, the
principal office of the Trust shall be in Cleveland, Ohio.
Section 2. Other Offices. The Trust may have offices in such other
places without as well as within the State of Delaware as the Trustees may from
time to time determine.
Section 3. Registered Office and Registered Agent. The Board of
Trustees shall establish a registered office in the State of Delaware and shall
appoint as the Trust's registered agent for service of process in the State of
Delaware an individual resident of the State of Delaware or a Delaware
corporation or a corporation authorized to transact business in the State of
Delaware.
ARTICLE III
SHAREHOLDERS
Section 1. Meetings. Meetings of the Shareholders shall be held as
provided in the Declaration of Trust at such place within or without the State
of Delaware as the Trustees shall designate. The holders of one-third of the
Outstanding Shares of any Series or Class present in person or by proxy and
entitled to vote shall constitute a quorum at any meeting of the Shareholders of
such Series or Class.
Section 2. Notice of Meetings. Notice of all meetings of
Shareholders of any Series or Class shall be given by the Trustees by mail or
telegraphic or electronic means to each Shareholder of such Series or Class, as
the case may be, at his address as recorded on the register of the Trust mailed
at least ten (10) days and not more than ninety (90) days before the meeting,
which notice shall state the time, place and purposes of such meeting; provided,
however, that notice of a meeting need not be given to any Shareholder to whom
such notice need not be given under the proxy rules of the Commission under the
1940 Act and the Securities Exchange Act of 1934, as amended. Only the business
stated in the notice of a meeting of Shareholders shall be
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considered at such meeting. Any adjourned meeting of Shareholders may be held as
adjourned without any further notice to Shareholders. No notice need be given to
any Shareholder that has failed to inform the Trust of his current address or if
a written waiver of notice, executed before or after the meeting by the
Shareholder or his attorney thereunto authorized, is filed with the records of
the meeting.
Section 3. Record Date for Meetings and Other Purposes. For the
purpose of determining the Shareholders that are entitled to notice of and to
vote at any meeting of Shareholders, or to participate in any distribution, or
for the purpose of any other action, the Trustees may fix a date not more than
ninety (90) days prior to the date of any meeting of Shareholders or
distribution or other action as a record date for the determination of the
persons to be treated as Shareholders of record for such purposes; provided,
however, that all dividend payments shall be governed solely by the Declaration
of Trust.
Section 4. Proxies. At any meeting of Shareholders, any holder of
Shares entitled to vote thereat may vote by proxy, provided that no proxy shall
be voted at any meeting unless it shall have been placed on file with the
Secretary of the Trust, or with such other officer or agent of the Trust as the
Secretary may direct, for verification prior to the time at which such vote
shall be taken. A proxy shall be deemed signed if the shareholder's name is
placed on the proxy (whether by manual signature, typewriting, telegraphic
transmission, facsimile, other electronic means or otherwise) by the Shareholder
or the Shareholder's attorney-in-fact. Proxies may be given by any electronic or
telecommunication device except as otherwise provided in the Declaration of
Trust. Proxies may be solicited in the name of one or more Trustees or one or
more of the officers of the Trust. Only Shareholders of record shall be entitled
to vote. As determined by the Trustees without the vote or consent of
Shareholders, on any matter submitted to a vote of Shareholders of any Series or
Class, either (i) each whole Share shall be entitled to one vote as to any
matter on which it is entitled to vote and each fractional Share shall be
entitled to a proportionate fractional vote, or (ii) each dollar of net asset
value (number of Shares owned times net asset value per Share of such Series or
Class, as applicable) shall be entitled to one vote on any matter on which such
Shares are entitled to vote and each fractional dollar amount shall be entitled
to a proportionate fractional vote. When any Share is held jointly by several
persons, any one of them may vote at any meeting in person or by proxy in
respect of such Share, but if more than one of them shall be present at such
meeting in person or by proxy, and such joint owners or their proxies so present
disagree as to any vote to be cast, such vote shall not be received in respect
of such Share. A proxy purporting to be executed by or on behalf of any
Shareholder shall be deemed valid unless challenged at or prior to its exercise,
and the burden of proving invalidity shall rest on the challenger. If the holder
of any such Share is a minor or a person of unsound mind, and subject to
guardianship or the legal control of any other person as regards the charge or
management of such Share, he may vote by his guardian or such other person
appointed or having such control, and such vote may be given in person or by
proxy.
Section 5. Abstentions and Broker Non-Votes. Outstanding Shares
represented in person or by proxy (including Shares which abstain or do not vote
with respect to one or more of any proposals presented for Shareholder approval)
will be counted for purposes of determining whether a quorum is present at a
meeting of Shareholders. Abstentions will be treated as Shares that are present
and entitled to vote for purposes of determining the number of
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Shares that are present and entitled to vote with respect to any particular
proposal, but will not be counted as a vote in favor of such proposal. If a
broker or nominee holding Shares in "street name" indicates on the proxy that it
does not have discretionary authority to vote as to a particular proposal, those
Shares will not be considered as present and entitled to vote with respect to
such proposal.
Section 6. Inspection of Records. The records of the Trust shall be
open to inspection by Shareholders to the same extent as is permitted
stockholders of a Delaware corporation.
Section 7. Action without Meeting. Any action that may be taken by
Shareholders may be taken without a meeting if a majority of Outstanding Shares
entitled to vote on the matter (or such larger proportion thereof as shall be
required by law) consent to the action in writing and the written consents are
filed with the records of the meetings of Shareholders. Such consents shall be
treated for all purposes as a vote taken at a meeting of Shareholders.
ARTICLE IV
TRUSTEES
Section 1. Meetings of the Trustees. The Trustees may in their
discretion provide for regular or stated meetings of the Trustees. Notice of
regular or stated meetings need not be given. Meetings of the Trustees other
than regular or stated meetings shall be held whenever called by the President,
the Chairman or by any one of the Trustees. Notice of the time and place of each
meeting other than regular or stated meetings shall be given by the Secretary or
any Assistant Secretary of the Trust or by the officer or Trustee calling the
meeting and shall be mailed to each Trustee at least two days before the
meeting, or shall be given by telephone, cable, wireless, facsimile or other
electronic mechanism to each Trustee at his business address, or personally
delivered to him at least one day before the meeting. Such notice may, however,
be waived by any Trustee. Notice of a meeting need not be given to any Trustee
if a written waiver of notice, executed by him before or after the meeting, is
filed with the records of the meeting, or to any Trustee who attends the meeting
without protesting prior thereto or at its commencement the lack of notice to
him. A notice or waiver of notice need not specify the purpose of any meeting.
The Trustees may meet by means of a telephone conference circuit or similar
communications equipment by means of which all persons participating in the
meeting can hear each other at the same time and participation by such means
shall be deemed to have been held at a place designated by the Trustees at the
meeting. Participation in a telephone conference meeting shall constitute
presence in person at such meeting. Any action required or permitted to be taken
at any meeting of the Trustees may be taken by the Trustees without a meeting if
a majority of the Trustees consent to the action in writing and the written
consents are filed with the records of the Trust.
Section 2. Quorum and Manner of Acting. A majority of the Trustees
shall be present in person at any regular or special meeting of the Trustees in
order to constitute a quorum for the transaction of business at such meeting and
(except as otherwise required by law, the Declaration of Trust or these By-laws)
the act of a majority of the Trustees present at any meeting at which a quorum
is present shall be the act of the Trustees. In the absence of a
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quorum, a majority of the Trustees present may adjourn the meeting from time to
time until a quorum shall be present. Notwithstanding Section 1 of this Article
IV, notice of an adjourned meeting need not be given to any Trustee.
ARTICLE V
COMMITTEES
Section 1. Committees. The Trustees by vote of a majority of all the
Trustees may elect from their number an Executive Committee (the "Executive
Committee"), which committee shall have the power to conduct the current and
ordinary business of the Trust while the Trustees are not in session, including
the purchase and sale of securities and the designation of securities to be
delivered upon redemption of Shares of any Series or Class, and such other
powers of the Trustees may delegate to the Executive Committee from time to
time, except those powers which by law, the Declaration of Trust or these
By-laws may not be delegated by the Trustees. The Trustees may also elect from
their own number other committees from time to time, in which case the number of
Trustees composing such committees, the powers conferred upon the such
committees (subject to the requirements of law, the Declaration of Trust and
these By-Laws) and the term of membership on such committees shall be determined
by the Trustees. The Trustees may designate a chairman of the Executive
Committee or any other committee (any such committee, including the Executive
Committee, is referred to as a "Committee") or, in the absence of such
designation, the Committee may elect its own Chairman. The Trustees by a
majority vote of all of the Trustees may discontinue any Committee at any time.
Section 2. Meetings, Quorum and Manner of Acting. The Trustees may
(1) provide for stated meetings of any Committee, (2) specify the manner of
calling and notice required for special meetings of any Committee, (3) specify
the number of members of a Committee required to constitute a quorum and the
number of members of a Committee required to exercise specified powers delegated
to such Committee, (4) authorize the making of decisions to exercise specified
powers by written assent of the requisite number of members of a Committee
without a meeting, and (5) authorize the members of a Committee to meet by means
of a telephone conference circuit. Each Committee shall keep regular minutes of
its meetings and records of decisions taken without a meeting and cause them to
be recorded in a book designated for that purpose and kept in the office of the
Trust.
ARTICLE VI
OFFICERS
Section 1. General Provisions. The officers of the Trust shall
consistent of a President, a Treasurer and a Secretary, each of who shall be
elected by the Trustees. The Trustees may also elect or appoint such other
officers or agents as the business of the Trust may desire, including one or
more Vice-Presidents, one or more Assistant Secretaries, and one or more
Assistant Treasurers. The Trustees may delegate to any officer or committee the
power to appoint any subordinate officers or agents.
Section 2. Term of Office and Qualifications. Except as otherwise
provided by law, the Declaration of Trust or these By-laws, the President, the
Treasurer, the Secretary and
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any other officer shall each hold office at the pleasure of the Board of
Trustees or until his successor shall have been duly elected and qualified. Any
two or more offices may be held by the same person. Any officer may be but none
need be a Trustee or Shareholder.
Section 3. Removal. The Trustees, at any regular or special meeting
of the Trustees, may remove any officer with or without cause, by a vote of a
majority of the Trustees then in office. Any officer or agent appointed by an
officer or Committee may be removed with or without cause by such appointing
officer or Committee.
Section 4. Powers and Duties of the Chairman. The Trustees may, but
need not, appoint from among their number a Chairman. When present, the Chairman
shall preside at the meetings of the Shareholders and of the Trustees. The
Chairman may call meetings of the Trustees and Committee whenever he deems it
necessary or appropriate. The Chairman shall have such other powers and duties
as may be conferred upon or assigned to him by the Trustees from time to time.
Section 5. Powers and Duties of the President. The President may
call meetings of the Trustees and any Committee when he deems it necessary or
appropriate and, subject to Section 4 of this Article VI, the President shall
preside at all meetings of the Shareholders. Subject to the control of the
Trustees and any Committee, the President shall at all times exercise a general
supervision and direction over the affairs of the Trust. He shall have the power
to employ attorneys and counsel for the Trust or any Series or Class and to
employ such subordinate officers, agents, clerks and employees as he may find
necessary to transact the business of the Trust or any Series or Class. The
President shall also have the power to grant, issue, execute or sign such powers
of attorney, proxies or other documents as may be deemed advisable or necessary
in furtherance of the interests of the Trust or any Series or Class. The
President shall have such other powers and duties as may be conferred upon or
assigned to him by the Trustees from time to time.
Section 6. Powers and Duties of Vice Presidents. Each Vice President
shall perform such other duties as may be assigned to him from time to time by
the President or the Trustees. In the absence or disability of the President,
the Vice President or, if there be more than one Vice President, any Vice
President designated by the Trustees, shall perform all the duties and may
exercise any of the powers of the President, subject to the direction and
control of the Trustees.
Section 7. Powers and Duties of the Treasurer. The Treasurer shall
be the principal financial and accounting officer of the Trust. The Treasurer
shall deliver all funds of the Trust or any Series or Class that may come into
his hands to such custodian as the Trustees may employ. He shall render a
statement of condition of the finances of the Trust or any Series or Class to
the Trustees as often as they shall require the same and the Treasurer shall in
general perform all the duties incident to the office of a treasurer and such
other duties as from time to time may be assigned to him by the Trustees.
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Section 8. Powers and Duties of the Secretary. The Secretary shall
keep the minutes of all meetings of the Trustees and of the Shareholders in
proper books provided for that purpose; he shall have custody of the seal of the
Trust; he shall have charge of the Share transfer books, lists and records
unless the same are in the charge of a transfer agent. The Secretary shall
attend to the giving and serving of all notices by the Trust in accordance with
the provisions of these By-laws and as required by law and, subject to these
By-laws, the Secretary shall in general perform all duties incident to the
office of Secretary and such other duties as from time to time may be assigned
to him by the Trustees.
Section 9. Powers and Duties of Assistant Treasurers. Each Assistant
Treasurer shall perform such other duties as from time to time may be assigned
to him by the Treasurer or the Trustees. In the absence or disability of the
Treasurer, any Assistant Treasurer designated by the Trustees shall perform all
the duties, and may exercise any of the powers, of the Treasurer.
Section 10. Powers and Duties of Assistant Secretaries. Each
Assistant Secretary shall perform such other duties as from time to time may be
assigned to him by the Secretary or the Trustees. In the absence or disability
of the Secretary, any Assistant Secretary designated by the Trustees shall
perform all the duties, and may exercise any of the powers, of the Secretary.
Section 11. Compensation of Officers and Trustees. Subject to any
applicable provisions of the Declaration of Trust, the compensation of the
officers and Trustees shall be fixed from time to time by the Trustees or, in
the case of officers, by any Committee or officer upon whom such power may be
conferred by the Trustees. No officer shall be prevented from receiving such
compensation as such officer by reason of the fact that he is also a Trustee.
ARTICLE VII
FISCAL YEAR
The fiscal year of the Trust shall end on the last day of December
in each year; provided, however, that the Trustees may change the fiscal year
from time to time. The taxable year of each Series and Class shall be as
determined by the Trustees from time to time.
ARTICLE VIII
SEAL
The Trustees may adopt a seal which shall be in such form and shall
have such inscription thereon as the Trustees may from time to time prescribe.
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ARTICLE IX
SUFFICIENCY AND WAIVERS OF NOTICE
For purposes of these By-laws, a notice shall be deemed to have been
sent by mail, telegraph, cable, wireless, facsimile or other electronic means
when such notice has been delivered to a representative of any company holding
itself out as capable of sending notice by such means with instructions that it
be so sent. Whenever any notice is required to be given by law, the Declaration
of Trust or these By-laws, a waiver thereof in writing, signed by the person or
persons entitled to said notice, whether before or after the time stated
therein, shall be deemed equivalent to receiving such notice.
ARTICLE X
AMENDMENTS
These By-laws, or any of them, may be altered, amended or repealed,
or new By-laws may be adopted, by (a) vote of a majority of the Outstanding
Shares of each Series and Class at a meeting of Shareholders, or (b) by the
Trustees; provided, however, that these By-laws may not be amended, adopted or
repealed by the Trustees without the approval of the Shareholders if such
amendment, adoption or repeal requires a vote of the Shareholders pursuant to
law, the Declaration of Trust or these By-laws.
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Exhibit 23(d)
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made as of the 8th day of March, 2000.
BETWEEN
(1) THE VENUS SERIES TRUST, a Delaware business trust (the "Trust") on behalf
of the INDIA TECHNOLOGY FUND (the "Fund") having its registered office at
c/o The Corporation Trust, Corporation Trust Center, 1209 Orange Street,
Wilmington, Delaware 19801
AND
(2) VENUS CAPITAL MANAGEMENT, INC., a Delaware corporation having its
registered office at 31 Milk Street, Third Floor, Boston, MA 02109
(hereinafter called the "Adviser")
WHEREAS
(A) The Trust is an open-end management company registered as such under the
Investment Company Act of 1940, as amended (the "Investment Company Act").
(B) The Adviser is a registered investment adviser under the Investment
Adviser's Act of 1940, as amended (the "Investment Adviser's Act").
(C) The Adviser is the sole sponsor and organizer of and has been retained as
investment adviser to the Fund.
WHEREBY IT IS AGREED AND DECLARED as follows:
1. Interpretation
1.1. In this Agreement the following words and expressions shall, where
not inconsistent with the context, have the following meanings
respectively:
"Auditors" means KPMG New Delhi or New York or such other
firm of independent auditors as is appointed by
the Board of Trustees.
"Board of Trustees" means the Board of Trustees of the Trust as set
forth in the Prospectus.
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"Custodian" means Deutsche Bank, A.G.; acting in its capacity
as custodian of the Investments or any such other
corporation appointed to act as custodian of the
Investments by the Board of Trustees;
"Declaration" means that certain Declaration of Trust dated
November 8, 1999;
"Effective Date" means the date referred to in the first sentence
of the Preamble.
"Investment
Advisers Act" means the Investment Advisers Act of 1940, as
amended;
"Investment
Company Act" means the Investment Company Act of 1940, as
amended;
"Investments" means the assets and rights from time to time of
the Trust held or to be held in accordance with
the Declaration (including any uninvested cash and
any moneys or application moneys which may be or
become returnable to any applicant for Shares) and
further means, in the case of a purchase or
acquisition of Investments, such transferable
securities of any kind or other assets as may be
purchased or acquired and form part of the assets
and rights from time to time of the Trust held or
to be held in accordance with the Declaration;
"Laws" means the laws of Delaware (including delegated
legislation or regulations of any competent
authority) and any other applicable laws and
regulations for the time being in force;
"Net Asset Value" means the total value of all portfolio securities,
cash, other assets held by the Fund, and interest
and dividends accrued minus all liabilities,
including accrued expenses.
"Prospectus" means the detailed prospectus of the Trust
approved by the Trustee under which Shares are
offered for subscription or purchase from time to
time, the initial Prospectus being of even date
herewith;
"Term" means a period of twenty-five years beginning on
the Effective Date.
"Transfer Agent" means Mutual Shareholder Services, LLC.
"Shares" means the Shares in the Trust (and "Shareholder"
shall be construed accordingly);
"Trustees" means the Board of Trustees of the Trust including
any duly appointed committee thereof;
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"Unlimited Period" means the period set forth in Section 8.1;
"US" means the United States of America;
1.2. Any reference to the Trust, the Adviser, the Transfer Agent, or the
Custodian includes a reference to its or their duly authorized
agents or delegates.
1.3. References to Clauses are to Clauses of this Agreement.
1.4. The headings to the Clauses of this Agreement are for convenience
only and shall not affect the construction or interpretation
thereof.
2. Appointment and Duties of the Adviser
As of the Effective Date, the Trust HEREBY APPOINTS the Adviser to
act as investment adviser to the Fund for the period and on such
terms set forth in this Agreement and the Adviser hereby accepts
such appointment and agrees to assume the obligations set forth
herein.
Adviser, as sponsor of the Fund, has the overall responsibility for
its organization, administration, operation, and compliance with all
Laws as well as all policies established by the Board of Trustees.
The duties of the Adviser include but are not limited to the
following:
(a) advising the Trust concerning the investment and reinvestment
of the assets of the Fund and the Fund's general investment
policy;
(b) obtaining and evaluating pertinent information relating to
economic developments, the performance of security markets,
and investment opportunities generally on an international
basis;
(c) recommending industries and companies to be represented in the
Fund's portfolio;
(d) formulating programs concerning the purchase and sale of the
investments and securities included or to be included in the
Fund's portfolio;
(e) advising the Trust concerning all actions which it appears to
the Adviser should be taken to carry out the investment
policies of the Trust;
(f) preparation of material other than accounts for inclusion in
annual or other required ownership reports of the Fund
whenever and in whatever form the Trust may reasonably
require;
(g) carrying out reviews and controls of the investment portfolio
of the Fund whenever the Adviser shall deem necessary or the
Trust shall reasonably require including submitting periodical
reports to the Trust;
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(h) maintaining consolidated books and records with respect to the
Fund's overall portfolio of securities;
(i) overseeing pricing of the Fund's portfolio; and
(j) selection of the brokers or dealers that will execute the
purchases and sales of securities for the Fund.
2.2. The Adviser shall undertake, by meetings with representatives of the
Trust's Board of Trustees or by any other means, to keep the Trust
informed of relevant developments affecting the investments of the
Fund.
3 Duties of the Adviser
In carrying out its duties, the Adviser shall have regard to:
(a) the investment objectives specified by the Trust,
(b) the primary purpose of the Trust's investment policy from time
to time communicated in writing by the Trust to the Adviser,
(c) the entitlement of the holders of shares of the Trust to
require redemption of their shares,
(d) the terms of any exchange control consent and any other
present or future governmental consents,
(e) the terms of the Prospectus issued by the Trust,
(f) any other matter to which a prudent adviser to an investor of
a category similar to the Trust would reasonably pay regard in
the proper discharge of his duties, and
(g) any directions from the Board of Trustees of the Trust or any
restrictions for the time being contained in the Declaration
and Prospectus of the Trust with regard to investment or
borrowing.
4. Delegation
(a) The Adviser shall be at liberty in the performance of its
duties and in the exercise of the powers, privileges and
duties vested in the Adviser hereunder to act by responsible
officers or a responsible officer for the time being and to
employ and pay an agent to perform or concur in performing any
of the services required to be performed hereunder and may act
or rely upon the opinion or advice or any information obtained
from any broker, lawyer, valuer, surveyor, auctioneer or
expert whether reporting to the Trust or not.
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5. Fees and Expenses of the Adviser
5.1. The Trust, on behalf of the Fund, will pay the Adviser a
performance-based management fee calculated monthly by comparing the
Fund's investment performance to the investment record of the IFC
India Index ("IFC India Index"). The difference between the Fund's
performance compared to the performance of the IFC India Index will
multiplied by a performance adjustment of 12.5% at an annual rate
("Performance Adjustment"). The Performance Adjustment will then be
added or subtracted from the basic fee of 2.5%, subject to the
Adviser's minimum fee of 0.00% and maximum fee of 5.00%. If the Fund
underperforms the IFC India Index by 20 percentage points over a
12-month period, the minimum management fee of 0.00% will apply.
Correspondingly, if the Fund overperforms the IFC India Index by 20
percentage points, the maximum total management fee of 5.00% will
apply. The following table illustrates the fee structure:
Twelve Month Performance of the Fund versus IFC India Index Management Fee
- ----------------------------------------------------------- --------------
The Fund underperforms IFC India Index by 20% or more. 0.00%
The Fund underperforms IFC India Index by 15%. 0.63%
The Fund underperforms IFC India Index by 10%. 1.25%
The Fund underperforms IFC India Index by 5%. 1.88%
The Fund and IFC India Index perform the same. 2.50%
The Fund overperforms IFC India Index by 5%. 3.13%
The Fund overperforms IFC India Index by 10%. 3.75%
The Fund overperforms IFC India Index by 15%. 4.38%
The Fund overperforms IFC India Index by 20% or more. 5.00%
5.2 The Adviser shall pay the expenses incurred by it in connection with
the performance of its services hereunder.
5.3. The Trust shall reimburse the Adviser for those reasonable
out-of-pocket expenses which the Adviser may have paid on behalf of
the Fund in the performance its duties hereunder.
6. Authority and Exclusivity of the Adviser
The services of the Adviser to the Trust hereunder are to be deemed
exclusive and the Adviser shall not be authorized to render similar
services to other entities.
Except in accordance with the Trust's instructions, the Adviser
shall not have any power to enter into any agreement, contract,
transaction, or arrangement on behalf or in the name of the Trust or
have the authority in any way to bind the Trust.
7. Responsibility
7.1. The Adviser shall not be liable to the Trust or any Shareholder for
any error of judgement or for any loss suffered by the Trust or any
such Shareholder in connection with the subject matter of this
Agreement unless such loss arises from recklessness,
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fraud, bad faith or willful default on the part of the Adviser in
the performance or non-performance by it of its duties and
obligations relating to this Agreement or failure by the Adviser to
exercise due care and diligence in relation to the performance or
non-performance by it of all other duties and obligations hereunder
(any such occurrence, an Adviser's Default").
7.2. The Trust hereby undertakes to hold harmless and indemnify the
Adviser against all actions, proceedings, claims, costs, demands and
expenses which may be brought against, suffered, or incurred by the
Adviser by reason of its performance or non-performance of its
duties under the terms of this Agreement (other than due to an
Adviser's Default) including carrying out or relying upon a duly
issued instruction, order, or resolution of the Trustees and
including all legal, professional, and other expenses incurred by
the Adviser in the performance of its obligations or duties.
8. Duration
This Agreement shall continue in effect for an initial period of two
years from the date of adoption and shall continue in effect
thereafter for so long as such continuance is specifically approved
at least annually by the affirmative vote of (i) a majority of the
Trustees of the Trust, who are not interested persons of the Trust,
cast in person at a meeting called for the purpose of voting on such
approval, and (ii) a majority of the Trustees of the Trust or the
holders of a majority of the outstanding voting securities of the
Fund; provided however, that this Agreement may be terminated by the
Trust, on behalf of the Fund at any time, without the payment of any
penalty, by a majority of the Trustees who are not interested
persons of the Trust or by vote of a majority of the outstanding
voting securities (as defined in the Investment Company Act) of the
Fund, or by the Adviser at any time, without the payment of any
penalty, on not more than 60 days' written notice to the other
party. This Agreement shall terminate automatically in the event of
its assignment provided that a transaction which does not, under the
Investment Company Act, result in a change of actual control or
management of the Adviser's business shall not be deemed to be an
assignment for the purposes of this Agreement. The term "assignment"
for this purpose shall have the meaning defined in Section 2(a)(4)
of the Investment Company Act.
9. Force Majeure
The Adviser shall not be responsible for the loss of or damage to
any property of the Trust in the possession of the Adviser or for
any failure to fulfill its duties hereunder if such loss, damage or
failure shall be caused by or directly or indirectly due to war
damage, enemy action, the act of any Government or other competent
authority, riot, civil commotion, rebellion, storm, tempest,
accident, fire, lock-out, strike or other cause whether similar or
not and beyond the control of the Adviser provided that the Adviser
shall use all reasonable efforts to minimize the effects of the
same.
10.Confidentiality
Neither party hereto shall (except if mandated by law) at any time
before or after the termination of this Agreement disclose to any
person any confidential information
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relating to the other party or to the affairs of the other party
obtained during the Term and each party shall use reasonable best
efforts to prevent any such disclosure.
11. Miscellaneous Provisions
11.1 No failure on the part of any party to exercise, and no delay on its
part in exercising, any right or remedy under this Agreement will
operate as a waiver thereof nor will any single or partial exercise
of any right or remedy preclude any other or further exercise
thereof or the exercise of any other right or remedy. The rights and
remedies provided in this Agreement are cumulative and not exclusive
of any rights or remedies provided by law.
11.2 Any provision of this Agreement may be amended only if the parties
so agree in writing and subject to the provisions of the
Declaration.
11.3. The illegality, invalidity or unenforceability of any provision of
this Agreement under the law of any jurisdiction shall not affect
its legality, validity or enforceability under the law of any other
jurisdiction nor the legality, validity or enforceability of any
other provision.
11.4 The Trust may invest in India through a trust, subsidiary,
partnership or other entity set up for such a purpose and if it
shall so do, the Trust, as appropriate, shall procure the trust,
subsidiary, partnership or other entity to enter into an agreement
supplemental hereto with the Trust, and the Investment Adviser upon
the terms of this Agreement, subject to such amendments as are
considered necessary and approved by the parties hereto.
12. Notices
12.1. Any notice given hereunder shall be given by sending the same by
certified mail, return receipt requested, or by telegram, cable,
telex or facsimile confirmed in each case by a copy sent forthwith
by certified mail, return receipt requested, or by delivering the
same by hand; such notice shall be addressed, dispatched or
delivered (as the case may be) to the principal place of business
for the time being of the party to whom it is addressed.
12.2. Any notice sent by mail as provided in this Clause 12 shall be
deemed to have been given 72 hours after dispatch and any notice
sent by telegram, cable, telex or facsimile as provided in this
Clause 12 shall be deemed to have been given upon receipt or by
confirmed answer back if served by telex.
13. Governing Law
This Agreement shall be governed and construed in accordance with
the laws of the State of Delaware and the Adviser and the Investment
Adviser hereby irrevocably submit to the non-exclusive jurisdiction
of the courts of the State of Delaware in relation to any dispute
arising from this Agreement.
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14. Counterparts
This Agreement may be executed in one or more counterparts each of
which shall constitute an original, but all of which together shall
constitute one and the same instrument.
15. Contemplated Amendment
The parties hereto acknowledge that the terms and conditions of this
Agreement will be the subject of a review of the United States
Securities and Exchange Commission ("SEC"). Each of the parties
hereto shall promptly consider the comments of the SEC in the
context of the placing and the application for registration of the
Trust with the SEC and each shall use their best efforts to agree to
such amendments to this Agreement as may be necessary or desirable
in order to take account of the SEC's comments. Any amendments made
in accordance with the foregoing shall be made by re-executing this
Agreement which shall incorporate such amendments as the parties
hereto agree, which shall include the removal of this Clause 15, and
such subsequent agreement shall be expressed to be effective as of
the date hereof and shall replace in its entirety any and all rights
and obligations of any of the parties hereto.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first above written.
VENUS SERIES TRUST
By: /s/ Vikas Mehrotra
----------------------
Vikas Mehrotra
Trustee
VENUS CAPITAL MANAGEMENT, INC.
By: /s/ Vikas Mehrotra
----------------------
Vikas Mehrotra
President
Exhibit 23(g)
FORM OF AMENDED AND RESTATED CUSTODY AGREEMENT
This Amended and Restated Custody Agreement (this "Agreement") is made as of the
27th day of January, 2000 between
(A) DEUTSCHE BANK AG, a company incorporated in the Federal Republic of
Germany, having its Asia Pacific Head Office at No. 8 Shenton Way, #23-01,
Temasek Tower, Singapore 068811, and acting through its branch(es) as
stated in Schedule I of this Agreement (each relevant branch shall be
known as "Branch");
(B) The subsidiary(ies) of Deutsche Bank AG as stated in Schedule I of this
Agreement (the "Subsidiary") (the relevant Branch or Subsidiary shall
hereinafter be referred to as the "Bank"); and
(C) VENUS SERIES TRUST, a Delaware business trust, having its principal office
at 31 Milk Street, Third Floor, Boston, MA 02109 (the "Client").
R E C I T A L S
WHEREAS, the parties hereto entered into a Custody Agreement dated as of
January 27, 2000 (the "Original Agreement"); and
WHEREAS, the parties hereto desire to amend and restate the Original
Agreement as set forth herein;
A G R E E M E N T
NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, the parties to this Agreement hereby agree as follows:
1. Definitions and Interpretation
1.1 "Authorised Person(s)" means any party (including a person or a corporate)
which has been authorised in a manner acceptable to the Bank to act on the
Client's behalf in the performance of any acts, discretions or duties
under this Agreement;
"Cash" means any cash held from time to time by the Bank under the terms
of this Agreement;
"Deutsche Bank Group" means Deutsche Bank AG and its branches, offices and
majority-owned subsidiaries;
"Securities" include bonds, notes, shares, units of mutual funds,
certificates of deposit, futures, foreign exchange contracts, or other
securities and instruments, and rights or property which may at any time
accrue or be offered (whether by way of bonus,
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redemption, dividends, conversion, option or otherwise) in respect of any
of the foregoing, and any certificates, options, receipts, warrants or
other instruments (whether in registered or unregistered form)
representing rights to receive, purchase or subscribe for any of the
foregoing or evidencing or representing any other rights or interests
therein (including, without limitation, any of the foregoing constituted,
evidenced or represented by an entry in the records of the issuer or a
depository) which may from time to time be held by the Bank under the
terms of this Agreement.
1.2 The expression "Agreement" shall include any schedule or annex applicable
thereto.
1.3 This Agreement is entered into on a multi-branch/subsidiary basis for
administrative convenience (so as to avert the necessity of having
separate agreement for each Branch/Subsidiary). Accordingly, any reference
to "Bank" shall refer to the particular Branch/Subsidiary that is holding
the relevant Security/Cash and maintaining the relevant account(s) in
question, as if that Branch/Subsidiary has entered into a separate
agreement with the Client.
2. Appointment of Custodian
The Client authorises the Bank to establish on the terms of this Agreement
and in each location stated in Schedule I, a custody account or accounts
including sub-accounts for the Client's customers (the "Custody Account")
in the name of the Client, for the deposit of any Securities from time to
time received by the Bank for the account of the Client, and a cash
account or accounts including any sub-accounts for the Client's customers
(the "Cash Account") in the name of the Client for the deposit of Cash in
any currency from time to time received by the Bank for the account of the
Client, whether by way of deposit or arising out of or in connection with
any Securities.
3. Representations and Warranties
Each party hereby represents and warrants to the other that:-
(i) during the currency of this Agreement it (and, if applicable, any
person on whose behalf it may act as agent or otherwise in a
representative capacity) has and will continue to have full capacity
and authority to enter into this Agreement and to carry out the
transactions contemplated herein, and has taken and will continue to
take all action (including, without limitation, the obtaining of all
necessary corporate approvals and governmental consents in any
applicable jurisdiction) to authorise the execution, delivery and
performance of this Agreement; and
(ii) the terms of this Agreement do not constitute a breach of any
obligations by which it is bound whether arising by its
constitutional documents, any contract or operation of law.
The Client agrees to deliver such documents, perform such further acts and
execute such further documents as the Bank may reasonably require in
relation to this Agreement.
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4. Transactions Not Requiring Instructions
In the absence of contrary instructions and so long as the Bank is
prepared to provide the services, the Bank is authorised by the Client to
carry out the following transactions at the Client's expense and the
Bank's discretion relating to the Securities and/or Cash without requiring
further instructions from the Client:-
(i) to complete and sign any affidavits, certificates of ownership or
other certificates, and to disclose relevant information, relating
to the Securities and/or Cash in connection with the Bank's duties
under this Agreement which may be required by the tax or any other
regulatory authority in any relevant jurisdiction, whether
governmental or otherwise, and whether relating to ownership, income
tax or capital gains, or any other tax, duty or levy (and the Client
further agrees to ratify and to confirm or to do, or to procure the
doing of, such things as may be necessary to complete or evidence
the Bank's actions under this sub-clause (i) or otherwise under the
terms of this Agreement);
(ii) (a) to collect and receive, for the account of the Client, all
income and other payments and distributions in respect of the
Securities and/or Cash, and credit the same to the relevant
account;
(b) to take any action necessary and proper in connection with the
receipt of income and other payments and distributions as are
referred to in sub-clause (ii)(a) above, including (without
limitation) the presentation of coupons and other interest
items;
(iii) (a) to receive and hold for the account of the Client any
capital arising out of or in connection with the Securities
and/or Cash whether as a result of its being called or
redeemed or otherwise becoming payable (other than at the
option of the holder thereof) and credit the same to the
relevant account;
(b) to take any action necessary and proper in connection with the
receipt of any capital as is referred to in sub-clause
(iii)(a) above, including (without limitation) the
presentation for payment of any Securities which become
payable as a result of their being called or redeemed or
otherwise becoming payable (other than at the option of the
holder thereof) and the endorsement for collection of cheques,
drafts and other negotiable instruments;
(iv) to receive and hold for the account of the Client all Securities
received by the Bank as a result of a stock dividend, share
sub-division or reorganisation, capitalisation of reserves or
otherwise;
(v) to exchange interim or temporary receipts for definitive
certificates, and old or overstamped certificates for new
certificates;
(vi) to make cash disbursements or payments for any fees, taxes, duties,
levies, expenses and/or any payments incurred in handling or in
connection with the Bank's duties under this Agreement (including
advisers', depositories' and other
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third parties' fees), and debit the same to the Cash Account or any
other account of the Client with the Bank and for this purpose to do
any necessary currency conversion at such rate to be determined by
the Bank;
(vii) to deliver to the Client transaction advices and/or regular
statements of account showing the Securities and/or Cash held at
such intervals as determined by the Bank; and
(viii) to do all such acts as the Bank may consider to be necessary or
desirable in order to perform its duties under this Agreement
(including without limitation to do any currency conversion at such
rate as may be determined by the Bank where any payment is received
or to be made in a different currency).
5. Transactions Requiring Instructions
Without prejudice to the authority given to the Bank above, the Bank is
authorised to carry out any transactions whatsoever relating to the
Securities and/or Cash upon receipt of specific instructions, including,
without limitation, instructions to deliver or otherwise deal with the
Securities (for example pursuant to any sale, surrender or conversion), or
to make payment for and/or receive Securities purchased by the Client.
6. Notice of Rights Issues, General Meetings and Other Matters
The Bank will make reasonable efforts to inform the Client of notices that
it has actually received in respect of any bonus issues, rights issues,
payment calls, takeover bids or general meetings of the issuers/companies
in relation to the Securities, and the Client shall give the Bank
instructions on a timely basis so that the Bank will have sufficient time
to comply with the same. If the Bank does not receive any timely
instructions from the Client, the Bank is authorised at its discretion to
take or omit to take any action (including to sell any rights entitlements
or allow the same to lapse) without any liability as it may deem advisable
or expedient to be in the interest of the Client.
7. Segregation, Identification and Registration
7.1 To the extent possible, Securities which are deposited in a depository may
be maintained with the depository in an account for the Bank's customers
and the Bank warrants that it will not mingle its own assets with such
Securities held for the Client.
7.2 Where Securities are physically held by the Bank, such Securities shall be
physically segregated from the securities of the Bank or of the other
clients of the Bank.
7.3 Provided always that the Securities and/or Cash whether held by the Bank
or a depository shall be clearly identified in the Bank's records as being
held for the Client.
7.4 The Securities shall be registered as per the Client's instructions.
7.5 The Bank's records relating to the Securities and Cash and the Bank's
premises where the Securities are kept shall be open to inspection/audit
at reasonable times (subject to prior notice) by the auditors and
representatives of the Client, provided that such inspection/audit is not
in violation of any applicable laws. Whenever reasonably required
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by the Client, the Bank shall furnish general audit reports on the Bank's
operational and security control.
8. Cash Account Payments
The Bank shall be entitled to utilize the funds in the Cash Account to
effect all payments required or authorized under this Agreement.
9. Overdrawn Amounts
The Bank may at its discretion (without being obliged to do so) extend
credit, banking facility or financial accommodation or advance monies to
the Client for the purpose of meeting any payment or carrying out any
instruction or for any purpose in connection with this Agreement
(including facility for settlement of purchase or for advance of
sale/redemption proceeds or coupon payment), in which event any
liabilities owing pursuant thereto (i) shall be repayable by the Client on
the Bank's demand (unless otherwise expressly agreed to by the Bank in
writing) and (ii) shall bear interest and other charges at such rate(s) as
the Bank may determine in accordance with its internal procedures.
10. Custody Account and Cash Account Procedures
With respect to any transaction involving the Securities and/or Cash, the
Bank will cause the Cash Account and/or the Custody Account to be credited
or debited in accordance with normal market practice.
11. Withdrawal and Delivery
The Client may at any time subject to the other terms of this Agreement,
demand withdrawal of all or any part of the Securities in the Custody
Account and/or Cash in the Cash Account. Payments of Cash shall be made at
the expense of the Client by banker's draft, telegraphic transfer, cheque
or otherwise as may be agreed between the Client and the Bank. Delivery of
Securities will be made at the expense of the Client in such manner and at
such location as the parties hereto may agree. Where necessary the Bank
will on withdrawal transfer any Securities into the name of the Client or
as the Client may direct at the expense of the Client.
12. Appointment of Agents, Clearance Systems and others
The Client agrees and understands that:-
(i) the Bank is authorised to appoint at Client's expense any party
(including clearance systems, depositories and any member of the
Deutsche Bank Group), whether in its own name or that of the Client,
to perform and/or to assist/advise the Bank in performing any of the
duties of the Bank under this Agreement and may delegate to any such
party so appointed any of its functions under this Agreement,
provided that the Bank shall use reasonable care to ensure that it
appoints only reputedly competent party. The Bank shall not be
responsible for any such party save for the negligence or wilful
misconduct of the following:
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(a) a subcustodian which is a member of the Deutsche Bank Group;
(b) a service contractor which performs secretarial or
administrative services for the Bank at the Bank's premises.
(ii) Securities deposited with a sub-custodian, depository or clearing
agency shall be held subject to the rules and operating procedures
of such party and any applicable laws and regulations whether of a
governmental authority or otherwise;
(iii) The Client understands that the Bank may not be able to exercise
discretion in the selection or monitoring of a depository/clearing
system, or in the negotiation of contractual provisions with the
same.
13. Deutsche Bank Group Involvement
13.1 The Client hereby authorises the Bank, when acting on instructions from
the Client, (i) to deal with securities and/or cash from and to the Bank
or any other member of the Deutsche Bank Group and through any member of
the Deutsche Bank Group, and from and to any other client of the Bank, and
(ii) to earn and retain any commission, fee or profit in relation thereto.
Provided that any dealing shall be on terms which are not less favourable
to the Client than would be reasonably obtainable at the same time by the
Bank in comparable arms-length dealings with other similar non-Deutsche
Bank Group entities.
13.2 The Client agrees and understands that the Bank may have banking
relationships with or interests in companies whose Securities are held in
the Custody Account or which are purchased or sold for the Custody
Account.
14. Scope of Responsibility
The Client agrees and understands that:-
(i) The Bank shall exercise reasonable care in the performance of its
duties as are set forth or contemplated herein or contained in
instructions given to the Bank which are not contrary to this
Agreement, and shall maintain adequate insurance and agrees to
indemnify and hold the Client harmless from and against any loss,
damage, cost, expense, liability or claim arising out of or in
connection with the Bank's performance of its obligations hereunder.
(ii) The Bank agrees that (A) the Cash and Securities are not subject to
any right, charge, security Interest, lien or claim of any kind in
favor of the Bank or any of its agents or its creditors except a
claim of payment for their safe custody and administration and (B)
the beneficial ownership of the Cash and Securities shall be freely
transferable without the payment of money or other value other than
for safe custody or administration.
(iii) upon receipt of each and every transaction advice and/or statement
of account supplied to it by the Bank, the Client shall examine the
same and notify the Bank within fourteen days of the date of receipt
of any such advice or statement of any
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error therein. In the absence of any notification by the Client
within the fourteen days period, the transactions/entries indicated
by the advice or statement shall be conclusively settled against the
Client to be correct;
(iv) the Bank's sole responsibility with regard to the sale proceeds of
the Securities is to receive payment whether by way of cheque, bank
draft or any other form, of such proceeds from the purchaser (or its
agent), broker or any other party provided that the Bank shall not
be liable to the Client in any way if such payment to the Bank is
not honoured by the banker upon whom that payment is drawn or
otherwise is not good, timely or valid payment. The Bank may make
delivery of the Securities either contemporaneously with or before
the receipt of such payment or purported payment in accordance with
local settlement procedures;
(v) all collections of the Securities and/or Cash and of any funds or
other property paid or distributed in respect of the Securities
and/or Cash are made at the risk of the Client and the Bank is
entitled to make payment prior to delivery of Securities in
accordance with local settlement procedures and shall not be
responsible for the seller's (or its agent's), broker's or any other
party's failure to make good, valid or timely delivery of any
Securities and/or Cash nor for the genuineness, validity or title of
any documents received in relation to the Securities and/or Cash;
(vi) the Client shall be responsible for all filings, tax returns and
reports on any transactions undertaken pursuant to this Agreement
which must be made to any relevant authority whether governmental or
otherwise and for the payment of all unpaid calls, taxes, imposts,
levies or duties due on any principal or interest, or any other
liability or payment arising out of or in connection with the
Securities and/or Cash, and in so far as the Bank is under any legal
obligation to pay the same on behalf of the Client it may (but
without liability if it failed to do so) do so out of the Securities
and/or Cash;
(vii) the Bank is not acting under this Agreement as investment manager or
investment adviser to the Client and responsibility for the
selection, acquisition and disposal of the Securities and/or Cash
shall remain with the Client at all times;
(viii) the Bank shall not be bound to return identical securities lodged.
The Client shall accept securities of the same class and type in
place of the securities deposited;
(ix) the Bank shall not be liable for any negligence, default, failure or
delay of any securities registration body or securities registrar
(or similar party) and any losses arising therefrom (including
non-receipt of bonus, dividends and any rights);
(x) the Bank may in its sole discretion assist the Client in any tax
matters, including any application for reduce rate or refund of tax.
The Bank gives no assurance that such assistance will result in
relief at source, refund of tax or other intended consequences, and
may in its sole discretion without liability withdraw such
assistance at any time (notwithstanding any pending application);
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<PAGE>
(xi) the Bank is entitled at its discretion to reverse incorrect credit
entries to any accounts (including where an entry was made in
anticipation of receipt of funds/assets which receipt was however
not fulfilled);
(xii) the Bank shall not have any duty to monitor the compliance by the
Client or its customers/agents with any guideline or restriction
imposed by the Client's constitutional documents or by any other
document, law or regulation (including compliance with any
notification requirement relating to the Client's or its
customers'/agents' beneficial ownership of securities);
(xiii) the Bank may rely in good faith on the advice of legal counsel or
other advisers;
(xiv) the Bank shall not have any liability in connection with its
reliance in good faith on records that were maintained for the
Client by another party prior to the Bank's appointment hereunder;
(xv) where the Bank is providing market values of securities (via
electronic on-lie service or otherwise), the Bank may obtain
information on such values from outside sources which the Bank
considers to be reliable and the Bank makes no warranty as to the
reliability, accuracy or completeness of such information;
(xvi) the laws and practices in different jurisdiction relating to
custody, securities or settlement will vary, and neither the Bank
nor any sub-custodian will assume any risk arising out of such laws
and practices.
15. Instructions
The Client agrees that:-
(i) the Bank is authorised to act on any instructions given or
purportedly given by the Client or Authorised Person(s) by any of
the following methods:
a) in writing;
b) by telegram, telex, facsimile, S.W.I.F.T. or other electronic
or teleprocess instruction system (including email and db
Custody) acceptable to the Bank (whether tested or untested);
c) orally (including via telephone) provided the Bank may in its
absolute discretion and without liability act upon any oral
instructions without further confirmation, or refrain from
acting upon any oral instructions until it has received
confirmation thereof by any of the methods listed under Clause
15(i)(a), (b) or (d);
d) any other methods agreed between the Client and the Bank.
(ii) the Bank may rely in the performance of its duties under this
Agreement and without liability on its part, upon any instructions
believed by it in good faith to be given by the Client or Authorised
Person(s) or any document which it believes to be genuine, and
provided the Bank is not guilty of negligence or wilful
8
<PAGE>
misconduct the Bank shall have no responsibility for any losses or
liabilities whatsoever should such instructions (or the signature
thereon) or such document turn out to be unauthorised, erroneous or
fraudulent;
(iii) instructions shall continue in full force and effect until cancelled
or superseded;
(iv) if any instructions are in the Bank's opinion conflicting and/or
ambiguous, the Bank shall inform the Client and may without any
liability on its part refuse to execute such instructions until such
conflict or ambiguity has been resolved to its satisfaction;
(v) instructions, and handling of the Securities or Cash, shall be
carried out subject to the rules, laws, operating procedures and
market practice of any relevant stock exchange, clearing house,
sub-custodian, depository, settlement system, market or jurisdiction
where or through which they are to be executed, and the Bank is
entitled to execute any instructions in accordance with its normal
market practice and operational procedures and insofar as it may
consider practicable and reasonable. The Bank may further refuse to
execute any instruction or accept any deposit if in the Bank's
opinion it is contrary to any applicable law, rule or other
regulatory requirement (including those arising from any
governmental authority, self-regulatory organisation, stock
exchange, clearing house, depository, settlement system or market)
or the assets for deposit are not in good order;
(vi) the Bank may, without any liability on its part, refuse to execute
any instruction if in its opinion (a) there are reasonable grounds
for believing that liabilities arising from the execution of such
instruction may not be adequately covered by the Cash and/or
Securities, (b) personal liabilities may be incurred by it pursuant
to such instruction, (c) satisfactory arrangement for the settlement
of any outstanding hereunder has not been made or (d) the
instruction may be unauthorised or fraudulent;
(vii) the Bank shall be under no duty to assess the prudence or otherwise
of any instructions or to give advice in relation thereto, and may
act on the instructions irrespective of their prudence or otherwise.
16. Indemnity
[Intentionally Omitted]
17. Lien
Each Branch/Subsidiary shall have a lien or security right on the Cash or
Securities in relation to custody or administrative fees, charges and
expenses, and any credit facility or accommodation granted to the Client
by Deutsche Bank AG or any subsidiary, and the Branch/Subsidiary shall be
entitled to convert and set-off any Cash and/or sell or otherwise dispose
any Securities in settlement of the same.
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18. Fees and Expenses
Without prejudice to any of its liabilities and obligations under this
Agreement the Client agrees to pay to the Bank from time to time (without
any deduction) such fees/commission for its services pursuant to this
Agreement as may be agreed in writing between the Bank and the Client and
the Bank's expenses, disbursements and costs incurred under this
Agreement, and agrees to hold the Bank harmless from any liability, loss
or withholding resulting from any taxes or other governmental charges, and
any expenses related thereto, which may be imposed or assessed in
connection with or arising out of any payment, the Custody Account and/or
the Cash Account. If any applicable law requires a deduction to be made to
any payment, the Client shall pay such further sum to the Bank so that the
Bank would ultimately receive an amount equal to that it would have
received had no such deduction been made. The Client further agrees that
the Bank may charge the Client interest at the Bank's applicable rate from
time to time on any sums owed under this Agreement but not paid by the
Client on the due date of payment.
19. Termination
Either of the parties hereto may terminate this Agreement on giving not
less than 30 days written notice to the other party (or one day notice
where the recipient party has committed a material breach of any provision
of this Agreement). Upon the expiry of such notice the Bank shall account
to the Client in accordance with the terms of this Agreement. The
operation of Article 1266 of the Indonesian Civil Code is waived so that a
judicial termination of this Agreement is not required.
Clauses 3, 7, 9, 10, 11, 12, 13, 14, 15, 17, 18, 22, 27 and 31 shall
survive termination of this Agreement.
Where the Client failed to give timely transfer instruction, the Bank
shall hold any non-transferred assets at the Client's risk.
20. Assignment
Neither party may assign, transfer or charge all or any of its rights,
benefits and obligations hereunder, but this Agreement shall enure to the
benefit of the successor of any of the parties hereunder. The Bank may
assign or transfer any of its rights, benefits and obligations hereunder
to any Deutsche Bank Group member.
21. Rule 17f-5 ----------
Each Branch/Subsidiary as listed in Schedule I represents that it is an
eligible foreign custodian as per Rule 17f-5 of the Investment Company Act
of 1940. The Bank shall notify the Client if the aforesaid representation
ceases to be true, and in which event, the Client may terminate this
Agreement vis-a-vis the relevant Branch/Subsidiary with immediate written
notice.
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22. Disclosure
The Client hereby authorises the Bank to disclose information regarding
the Custody Account and/or the Cash Account if required or permitted to do
so by:-
(i) any applicable law, statute or other regulation of or by any court
order or similar process enforceable in any relevant jurisdiction;
(ii) any regulatory body, self-regulatory organisation or depository
(whether of a governmental nature or otherwise) in any relevant
jurisdiction;
(iii) any department or agency of government in any relevant jurisdiction;
(iv) the issuers of the Securities or the securities registrars; or
(v) any offices, branches or subsidiaries of Deutsche Bank AG or any
authorised agent for the purpose of or in connection with the
services to be provided by the Bank under this Agreement.
23. Severability
If any provision hereunder becomes invalid, illegal or unenforceable under
any law, the validity, legality and enforceability of the remaining
provisions and this Agreement shall not be affected or impaired.
24. Adverse Claims
Where the Bank is notified of any adverse claim or dispute in relation to
any Securities and/or Cash, the Bank shall inform the Client of the same
and shall be entitled to take whatever action reasonably deemed necessary
by it in relation to such Securities and/or Cash.
25. Notices
Except as otherwise provided in this Agreement, any notice, demand, letter
or communication may be sent by the Bank to the Client by telex, post,
facsimile, S.W.I.F.T. or hand, and shall be deemed to have been received
by the Client on the date it was sent (if by hand, telex, S.W.I.F.T. or
facsimile) or two days after it was posted (if local) or five days after
it was posted (if overseas).
Any notice, demand, letter or communication to the Bank shall be sent to
the Branch/Subsidiary to which the same relates and shall be effective
only when received by the relevant Branch/Subsidiary.
Any notice, demand, letter or communication may be sent by one party to
the other at the address and numbers set out in Schedule II or such
address and numbers as one party may inform the other in writing.
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26. Amendment
The Bank may at any time by notice in writing to the Client add to, delete
or amend any terms of this Agreement such addition, deletion or amendment
to take effect on acceptance thereof by the Client.
27. Own Account
27.1 The Client agrees to inform the Bank on the execution by it of this
Agreement and from time to time whether it is acting on its own account or
for the account of any third party (including the reasonable details of
such third party).
27.2 The Client understands that local regulatory authorities may require the
Bank to furnish information concerning the ultimate beneficiaries of any
account. Upon the Bank forwarding any such regulatory authority's
requirement to the Client, the Client undertakes to promptly furnish such
information directly to the relevant regulatory authority in accordance
with the local laws.
28. Further Terms and Conditions
The terms and conditions listed in the Annex(es) hereto and any Annex
accepted by both parties from time to time shall be deemed to be
incorporated into and form an integral part of this Agreement. Where there
is any inconsistency between the terms of this Agreement and the
Annex(es), the terms of the Annex(es) shall prevail.
29. Power of Attorney
Where necessary, the Client shall execute such power of attorney in favour
of the Bank, in the form as required by the Bank and the Bank shall not be
obliged to proceed with any instructions until it has received the duly
executed and notarized (if necessary) power of attorney.
30. Inconsistency
Where any inconsistency exists between any provision of this Agreement and
the Bank's General Business Conditions, the provision of this Agreement
shall prevail.
31. Restriction on Advertisement etc
The Client shall not use or suffer/permit to be used the name, logo or any
particulars of the Bank in any advertisement, document/brochure (save
those which are solely for the Client's internal use), name card or other
similar instrument (in whatever form), except with the prior written
consent of the Bank.
32. Waiver of Sovereign Immunity
Each party agrees that this Agreement involves only civil activities and
represents a commercial transaction, and hereby expressly waives the
defense of sovereign immunity (or any similar defense in the relevant
jurisdiction) (including any defense based on the
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fact or allegation that it is an agency or instrumentality of a sovereign
state) to which it may be entitled.
33 Governing Law/Place of Jurisdiction
As between the Client and a Branch/Subsidiary, this Agreement shall be
governed by and construed in accordance with the laws of the country or
state in which such Branch/Subsidiary is located and performs its
obligations hereunder, and the Client and such Branch/Subsidiary
irrevocably submit to the non-exclusive jurisdiction of the courts of such
country or state.
34. European Monetary Union ("EMU")
The Client understands that the EMU would result in appropriate
conversion(s) in the currency(ies) in which the Securities are
denominated. Any payment in euro at the official conversion rate will be
acceptable as an alternative to payment in a relevant national currency.
The Client agrees that this Agreement will continue to be in full force
and effect in accordance with the laws and regulations implementing the
EMU. The Client will not hold the Bank liable for any risk or loss
associated with the introduction of the euro.
35. Existing Accounts
Where the Client has any existing account, the Bank shall be entitled at
its discretion to treat this account as being governed by this Agreement
or any provision hereof unless the Bank has received written instruction
otherwise from the Client.
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<PAGE>
IN WITNESS the hands of the parties hereto the day and year first above written.
Signed for and on behalf of VENUS SERIES TRUST
______________________________
Name: Vikas Mehrotra
Title: President
DEUTSCHE BANK
By: __________________________
Name:
Title:
Exhibit 23(h)
TRANSFER AGENT AGREEMENT
THIS AGREEMENT is made and entered into this 27th day of January, 2000 by
and between Venus Series Trust, a registered management investment company (the
"Fund"), and Mutual Shareholder Services LLC ("MSS").an Ohio corporation.
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. MSS 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 MSS and to have MSS perform the Fund certain services appropriate
to the operations of the Fund, and MSS 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 MSS.
MSS 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 MSS'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 MSS. Without
limiting the generality of the foregoing, MSS will prepare and maintain
the following records upon receipt of information in proper form from the
Fund or its authorized agents:
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o Cash receipts journal
o Cash disbursements journal
o Dividend record
o Purchase and sales - portfolio securities journals
o Subscription and redemption journals
o Security ledgers
o Broker ledger
o General ledger
o Daily expense accruals
o Daily income accruals
o Securities and monies borrowed or loaned and collateral
therefore
o Foreign currency journals
o Trial balances
(c) Provide the Fund and its investment adviser with daily portfolio
valuation, net asset value calculation and other standard operational
reports as requested from time to time.
(d) Provide all raw data available from its fund accounting system
for the preparation by the Fund or its investment advisor of the
following:
1. Semi-annual financial statements;
2. Semi-annual form N-SAR;
3. Annual tax returns;
4. Financial data necessary to update form N-1A;
5. Annual proxy statement.
(e) Provide facilities to accommodate annual audit and any audits or
examinations conducted by the Securities and Exchange Commission or any
other governmental or quasi-governmental entities with jurisdiction.
MSS 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 MSS pursuant
to this Agreement, the Fund agrees to pay MSS 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 MSS for out-of-pocket expenses or advances incurred by
MSS in connection with the performance of its obligations under this
Agreement. In addition, any other
2
<PAGE>
expenses incurred by MSS 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.
3. LIMITATION OF LIABILITY OF MSS.
(a) MSS 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 MSS, 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 MSS
against any liability to the Fund to which MSS 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
MSS 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 MSS by
the Fund or its authorized agents.
4. REPORTS.
(a) The Fund shall provide to MSS on a quarterly basis a report of a
duly authorized officer of the Fund representing that all information
furnished to MSS during the preceding quarter was true, complete and
correct in all material respects. MSS 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 MSS 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, MSS determines, on the basis of information supplied to MSS 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
3
<PAGE>
of time, would occur, MSS shall promptly notify the Fund and its counsel
of such violation.
5. ACTIVITIES OF MSS.
The services of MSS under this Agreement are not to be deemed exclusive,
and MSS shall be free to render similar services to others so long as its
services hereunder are not impaired thereby.
6. ACCOUNTS AND RECORDS.
The accounts and records maintained by MSS 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.
MSS 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. MSS 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. MSS shall
preserve the accounts and records as they are required to be maintained and
preserved by Rule 31a-1.
7. CONFIDENTIALITY.
MSS 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, MSS 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.
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<PAGE>
(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.
(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 MSS:
Venus Capital Management, Inc. Mutual Shareholder Services, LLC
31 Milk Street, Third Floor 1301 East Ninth Street, Suite 1005
Boston, MA 02109 Cleveland, OH 44114
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
Fund: Mutual Shareholder Services, LLC
India Technology Fund
By: /s/ Vikas Mehrotra By: /s/ Gregory B. Getts
------------------ --------------------
Its: Trustee Its: President
5
Exhibit 23(i)
DUVAL & STACHENFELD LLP
300 EAST 42ND STREET
THIRD FLOOR
NEW YORK, NEW YORK 10017
TELEPHONE: 212-883-1700
FACSIMILE: 212-883-8883
March, 2000
Venus Series Trust
31 Milk Street, Third Floor
Boston, MA 02109
Ladies and Gentlemen:
We have acted as counsel for Venus Series Trust, a Delaware business
trust (the "Trust"), in connection with the filing by the Trust of a
Registration Statement on Form N-1A (the "Registration Statement") under the
Securities Act of 1933 and the Investment Company Act of 1940 with respect to
the proposed sale of an indefinite number of shares (the "Shares") of the India
Technology Find, a series of shares of beneficial interest in the Trust.
We have examined and relied upon originals or copies, certified or
otherwise identified to our satisfaction as being true copies, of all such
records of the Trust, all such agreements, certificates of officers of the
Trust, public officials and others, and such other documents, certificates and
other records as we have deem necessary as a basis for the opinion expressed in
this letter.
In our examination, we have assumed the genuineness of all
signatures, the legal capacity of all natural persons, the authenticity of all
documents submitted to us as originals, and the conformity to original documents
of all documents submitted to us as certified or photostatic copies.
This letter expresses our opinion as to Title 12, Chapter 38
Treatment of Delaware Business Trusts, of the Delaware Code, with respect to the
authorization and issuance of the Shares, but does not extend to the securities
or "blue sky" laws of the State of Delaware or to federal securities or other
laws.
Based upon the foregoing, we are of the opinion that:
<PAGE>
1. The issuance and sale of the Shares have been duly
authorized under Delaware law.
2. Upon the original issuance and sale of the Shares and
receipt of the authorized consideration therefor in an amount not less
than the net asset value of the Shares established and in force at the
time of their sale, the Shares issued will be validly issued, fully paid
and nonassessable.
We consent to the use of this opinion as an exhibit to the
Registration Statement and to the reference to Duval & Stachenfeld LLP under the
caption "Counsel" in the Statement of Additional Information, which is
incorporated by reference into the prospectus comprising a part of the
Registration Statement.
Very truly yours,
Exhibit 23(l)
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT, dated as of November 9, 1999 (this
"Agreement"), is by and between Venus Capital Management, Inc. (the
"Subscriber") and Venus Series Trust (the "Trust").
R E C I T A L S
WHEREAS, the Subscriber wishes to purchase shares of the India
Technology Fund, a series of shares of the Trust (the "Shares"), and the Trust
wishes to issue and sell the Shares to Subscriber.
A G R E E M E N T
NOW, THEREFORE, pursuant to the provision set forth in this
Agreement, the parties to this Agreement hereby agree as follows:
SECTION 1. Subscription of Shares. Subscriber hereby agrees to
purchase from the Trust, and the Trust hereby agrees to sell to Subscriber,
50,000 Shares for an aggregate purchase price of Five Hundred Thousand and
00/100 Dollars ($500,000) (the "Purchase Price").
SECTION 2. Payment of Purchase Price. Subscriber shall pay the
Purchase Price to the Trust by personal check or wire transfer in accordance
with the instructions of the Trust.
SECTION 3. Miscellaneous. This Agreement may not be amended,
modified or supplemented except in writing signed by both Subscriber and the
Trust. This Agreement shall be governed by, and shall be construed in accordance
with, the internal laws of the State of New York (without giving effect to any
conflict of law principles). Subscriber and the Trust hereby submit to the
jurisdiction of any New York state or federal court sitting in New York County
over any suit, action or proceeding arising out of or relating to this
Agreement. This Agreement may be executed in counterparts, each of which shall
be deemed an original and both of which shall together constitute one and the
same instrument. Section headings in this Agreement are for reference only and
shall not affect the construction, scope or enforceability of the provisions in
this Agreement.
[SIGNATURES ON FOLLOWING PAGE]
<PAGE>
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first above written.
VENUS SERIES TRUST
By: /s/ Vikas Mehrotra
------------------------------
Vikas Mehrotra
Trustee
VENUS CAPITAL MANAGEMENT, INC.
By: /s/ Vikas Mehrotra
------------------------------
Vikas Mehrotra
President
Exhibit 23(m)
VENUS SERIES TRUST
DISTRIBUTION PLAN
INTRODUCTION
The Board of Trustees (the "Board") of Venus Series Trust, a
Delaware business trust (the "Trust"), has approved the adoption of the
Distribution Plan (the "Plan") set forth below with respect to the distribution
of shares (the "Shares") of the India Technology Fund, a stock portfolio of the
Trust (the "Fund"). This Plan is designed to conform to the requirements of
Rule12b-1 promulgated under the Investment Company Act of 1940, as amended
(the"1940 Act"). The Trust, on behalf of the Fund, may enter into a distribution
agreement pursuant to which the Trust will employ a distributor (the
"Distributor") to distribute Shares of the Fund. Under this Plan, the Trust, on
behalf of the Fund, intends to compensate the Distributor for expenses incurred,
and services and facilities provided, by the Distributor in distributing Shares
of the Fund.
THE PLAN
The material aspects of the Plan are as follows:
SECTION 1. The Fund will pay the Distributor for: (a) expenses
incurred in connection with advertising and marketing Shares of the Fund
including, but not limited to, any advertising or marketing via radio,
television, newspapers, magazines, telemarketing, or direct dial mail
solicitations; (b) periodic payments of fees for distribution assistance made to
one or more securities dealers, or other industry professionals, such as
investment advisers, accountants, estate planning firms, and the Distributor
itself (collectively the "Service Organizations") in respect of the average
daily value of the Fund's Shares beneficially owned by persons ("Clients") for
whom the Service Organization is the dealer of record or holder of record or
with whom the Service Organization has a servicing relationship; and (c)
expenses incurred in preparing, printing, and distributing the Fund's prospectus
and statement of additional information (except those used for regulatory
purposes or for distribution to existing stockholders of the Fund).
SECTION 2. While this Plan is in effect the Distributor will be
compensated by the Fund for such distribution expenses that are incurred, and
services and facilities that are provided, in connection with Shares of the Fund
on a monthly basis, at the annual rate of up to 2.00% of the Fund's average
daily net assets during such month. These monthly payments to the Distributor
will be made in accordance with and subject to the conditions set forth below.
For the purposes of determining the amounts payable under the Plan, the value of
the Fund's net assets shall be computed in the manner specified in the Fund's
prospectus and statement of additional information as then in effect for the
computation of the value of the Fund's net assets. The distribution fees payable
to the Distributor are designed to reimburse the Distributor for the expenses it
incurs and services it renders in distributing the Shares of the Fund. If in any
year the
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Distributor's expenses incurred in connection with the distribution of Shares of
the Fund exceed the distribution fees paid by the Fund, the Distributor will
recover such excess only if this Plan continues to be in effect with respect to
the Fund in some later year when the distribution fees exceed the Distributor's
expenses. There is no limit on the periods during which unreimbursed expenses
may be carried forward, although the Company is not obligated to repay any
unreimbursed expenses for the Fund that may exist at such time, if any, as this
Plan terminates or is not continued with respect to the Fund. No interest,
carrying, or finance charge will be imposed on any amounts carried forward.
Payment made out of or charged against the assets of the Fund must be in payment
for distribution expenses incurred on behalf of the Fund and which are described
herein.
SECTION 3. Payments by the Distributor to a Service Organization
described in this Plan shall be subject to compliance by the Service
Organization with the terms of a written agreement between the Service
Organization and the Distributor. If an investor in a Fund ceases to be a Client
of a Service Organization that has entered into a selling group agreement with
the Distributor, but continues to hold Shares of the Fund, the Distributor will
be entitled to receive similar payments in respect of the distribution
assistance provided with respect to such investor.
SECTION 4. The Distributor shall provide the Board, at least
quarterly, with a written report of all amounts expended pursuant to this Plan.
The report shall state the purposes for which the amounts were expended.
SECTION 5. This Plan shall become effective with respect to the Fund
upon its adoption by the Board and, unless earlier terminated with respect to
the Fund in accordance with its terms, the Plan shall continue automatically
with respect to the Fund for successive annual periods provided such continuance
is approved by a majority of the Board, including a majority of the Trustees who
are not "interested" persons (as defined in the 1940 Act) of the Company and who
have no direct or indirect financial interest in the operation of this Plan or
in any agreements entered into in connection with this Plan (the "Independent
Trustees"), pursuant to a vote cast in person at a meeting called for the
purpose of voting on the continuance of the Plan.
SECTION 6. This Plan may be amended at any time by the Board
provided that (i) any amendment to increase materially the costs which the Fund
may bear for distribution pursuant to this Plan shall be effective only upon
approval by a vote of a majority of the outstanding voting securities of the
Fund, and (ii)any material amendments of the terms of this Plan shall become
effective only upon approval by a majority of the Board and a majority of the
Independent Trustees pursuant to a vote cast in person at a meeting called for
the purpose of voting on the Plan.
SECTION 7. This Plan is terminable without penalty at any time by
(i) the vote of a majority of the Independent Trustees, or (ii) the vote of a
majority of the outstanding voting securities of the Fund. This Plan shall
automatically terminate upon assignment.
SECTION 8. The Board has adopted this Plan as of November 8, 1999.
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