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As filed with the Securities and Exchange Commission on September 16, 1998
1933 Act Registration No. 333-49109
1940 Act Registration No. 811-08723
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / /
Pre-effective Amendment No. 2 /x/
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / /
Amendment No. 2 /x/
(Check appropriate box or boxes)
UPRIGHT INVESTMENTS TRUST
(Exact name of registrant as specified in Charter)
615 Mount Pleasant Avenue
Livingston, NJ 07039
(Address of Principal Executive Offices)
Registrant's Telephone Number,
including Area Code: (973) 533-1818
David Y.S. Chiueh, CFP
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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CROSS REFERENCE SHEET
(as required by Rule 495)
Upright Investments Trust
N-1A Item No. Location
Part A
Item 1. Cover Page Cover Page
Item 2. Synopsis not applicable
Item 3. Condensed Financial Information Fees and Expenses.
Item 4. General Description of Registrant Cover Page; The Fund;
Description of Certain
Investment Policies;
General Information
Item 5. Management of the Fund Management of the Fund
Item 6. Capital Stock and Other Securities Tax Information
Item 7. Purchase of Securities Being Offered Purchase of Shares;
Net Asset Value
Item 8. Redemption or Repurchase How to Redeem Shares
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Part B-Statement of Additional Information
Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. General Information and History Description of the Trust
Item 13. Investment Objectives and Policies Investment Policies and
Limitations
Item 14. Management of the Fund Management of the Fund
Item 15. Control Persons and Principal
Holders of Securities Management of the Fund
Item 16. Investment Advisory and Management of the Fund
Other Services
Item 17. Brokerage Allocation and Portfolio Transactions
Other Practices
Item 18. Capital Stock and Other Securities General Information
About the Trust
Item 19. Purchase, Redemption and Pricing of Purchase and Redemption
Securities Being Offered Information; Net Asset
Value
Item 20. Tax Status Taxes and Distribution
Item 21. Underwriters Investment Advisory and
Other Services
Item 22. Calculation of Performance Data Performance Information
Item 23. Financial Statements
Part C
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Information required to be included in Part C is set forth under the appropriate
Item, so numbered, in Part C to this Registration Statement.
Prospectus dated September , 1998
UPRIGHT GROWTH FUND
615 West Mount Pleasant Avenue
Livingston, New Jersey 07039
(973) 533-1818
The Upright Growth Fund ( the "Fund") is a newly organized, diversified mutual
fund that invests in stocks for long-term capital growth. This is the primary
objective of the Fund. The Fund invests in the common stock of companies that
are traded on the New York Stock Exchange ("NYSE"), American Stock Exchange
("ASE"), over-the-counter (OTC) and stocks traded on foreign stock exchanges.
The Fund's investment adviser seeks appreciation of capital through investments
in stocks of large and small companies that are reasonably priced or undervalued
with the potential for growth.
The adviser to the Fund is Upright Financial Corporation (the "Adviser") founded
in 1990 by David Y.S. Chiueh, the president and sole stockholder of the
Investment Adviser. The Adviser also serves as the administrator for the Fund.
This Fund is designed for investors that are interested in a long-term
investment. Investors should be willing and financially able to tolerate changes
in the value of their investment in the Fund. This investment may present
greater risk than other investments, with a potential for greater investment
gain or loss in the future.
The Upright Growth Fund is a portfolio of Upright Investments Trust.
The minimum initial investment in the Fund is $2,000. The Fund has a sales
charge of 3%. There are no 12b-1 marketing fees.
This prospectus contains the information you should know about the Fund before
you invest. Please read the prospectus and retain it for future reference. A
Statement of Additional Information for the Fund (dated May , 1998) has been
filed with the Securities and Exchange Commission ("SEC") and is incorporated by
reference into this prospectus. It is made available for no additional charge by
calling 1-216-687-1000.
This prospectus does not constitute an offer to sell, or a solicitation of an
offer to buy, the shares of the Fund in any jurisdiction in which such may not
lawfully be made.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, PASSED UPON THE
ACCURACY OR THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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Table of Contents
Page Page
Fees and Expenses..................... [ ] How to Purchase Shares.........[ ]
Investment Objectives and Policies.....[ ] How to Redeem Shares...........[ ]
Performance............................[ ] Dividends and Distributions....[ ]
Management of the Fund.................[ ] Tax Information................[ ]
Net Asset Value........................[ ] General Information............[ ]
Fees and Expenses
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases1 ..............................3.0%
Maximum sales charge imposed on reinvested amounts.....................None
Deferred sales charge imposed on redemptions
(as a percentage of amount redeemed).................................None
Redemption fee2........................................................None
Exchange fee...........................................................None
Annual Fund Operating Expenses (as a percentage of average net assets)
Management Fees..................................................... 1.5%
12b-1 Fees.......................................................... NONE
Other Fees3......................................................... .45%
Total Fund Operating
Expenses............................................................ 1.95%
Example
The table below shows what an investor would pay if he or she invested $1000
over the various time frames indicated. The example assumes reinvestment of all
dividends, an average annual return of 5%, and that "Total Fund Operating
Expenses" remain the same each year.
1 Year 3 Years
$49 $89
- --------
1 The sales charge is reduced for investments of $50,000 or more, declining to
.75% for purchases of $1 million or more. The sales charge may be waived for
certain investors.
2 The Fund's custodian bank may charge for redemptions by wire.
3 Other Expenses including Administrative Fees. For the fiscal year ending June
30, 1999, the Advisor has agreed to waive the management fee and/or reimburse
the Fund's operating expenses to the extent necessary to ensure that the total
operating expense does not exceed 1.95%. "Other expenses" have been estimated
for the current fiscal year since the Fund did not begin operations until
September , 1998, and are presented net of reimbursements. Absent these
reimbursements, other expenses and total operating expenses are estimated to be
2.75% and 4.25%.
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Investment Objectives and Policies
Fundamental Goal. The Fund seeks to provide long term growth of capital, with
income as a secondary objective.
Strategy. The Fund invests in common stock, preferred stock, securities
convertible into common stock, of companies that are traded on the NYSE, ASE,
OTC and on foreign stock exchanges. In selecting investments for the Fund, the
Adviser uses a Top-Down and Bottom-Up strategy. This means that the adviser
invests in companies with a favorable relationship between price/earnings ratios
and growth rates, in sectors offering the potential for above average return.
The Adviser evaluates a company's management, sales growth, operating margins,
revenue, earnings growth, free cash flows, return on equity, the economic
outlook for the industry, and relevant economic and political environments.
The Adviser considers industry diversification as an important factor, although
the emphasis on a certain industry may change due to the outlook for earnings in
certain sectors. Diversification means placing a limitation on the amount of
money invested in any one issuer and limiting the amount of money invested in
any one industry. Diversification reduces the risks of investing.
Although the Fund invests primarily in common stock, it may invest a portion of
its assets in cash or cash equivalents such as obligations issued or guaranteed
by the U.S. Government, its agencies and/or instrumentality's ("U.S. Government
Securities") or high quality money market instruments such as notes,
certificates of deposit or bankers acceptances. The Adviser may assume a
temporary defensive posture in the market, in which case, the Fund may invest up
to 100% of its assets in these instruments. The Adviser may invest up to 10% of
the Fund's assets in warrants, up to 25% of its assets in foreign issuers of
securities not publicly traded in the U.S., engage in the purchase and sale of
put and call options in an amount of up to 15% of its net assets, covered
options writing (sell) are not subject to the 15% limitation. The Fund may make
short sales of securities in an aggregate amount not greater than 25% of net
assets, and may borrow up to one-third of its net assets.
Risk Factors. The Fund is only appropriate for long-term, aggressive investors
who can accept the fluctuations in portfolio value and have no immediate
financial needs for this investment. The risk associated with this investment
include: Market Risk, the possibility that a downward business cycle can
adversely affect a specific investment, as well as changes in the economic and
political landscape; Management Risk, that the strategy or determinations that
the adviser makes will fail to achieve the intended objectives; Liquidity Risk,
the risk assoicated with the particular secondary market in which a security
trades. The absence of a trading market could make it difficult to ascertain a
market value for illiquid positions. A Fund's net asset value could be adversely
affected if there were no ready buyer at an acceptable price at the time the
Fund decided to sell. The value of the Fund's investments will vary from
day-to-day, and generally reflect changes in market conditions, interest rates
and other company, political, and economic news. The Fund is not, by itself, a
balanced investment plan. The lack of operating history and that the investment
adviser has not previously managed mutual fund assets presents certain risks.
The value of the Fund's shares will fluctuate to a greater degree than the
shares of funds utilizing more conservative investment techniques or those
having as investment objectives, the conservation of capital and/or the
realization of current income. When you sell your fund shares, they may be worth
more or less than what you paid for them. There is no assurance that this Fund
can achieve its objective, since all investments are inherently subject to
market risk.
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Performance
The term "total return" will be used as tool for measuring for the Fund's
performance. Total return shows how an investment in the Fund has increased or
decreased over a certain period of time, assuming that all distributions are
reinvested. Cumulative total return reflects the actual performance over a
certain period of time and an average total return reflects a hypothetical rate
of return. Total return will be shown for recent one, five and ten year periods
and may be shown for other periods as well. From time to time the Fund may
advertise its "yield". The yield refers to the income generated by Fund over a
specified thirty-day period, which is then expressed as an annual percentage
rate. The calculation will reflect the deduction of the maximum sales charge of
3%.
Investors should note that yield and total return figures are based on
historical earnings and are not intended to indicate future performance. In
reports or other communications to investors or in advertising material, the
Fund may describe general economic and market conditions affecting the fund and
may compare its performance with that of other mutual funds as listed in the
rankings prepared by Lipper Analytical Services, Inc. or similar investment
services that monitor evaluations of the Fund published by nationally recognized
rating services and by financial publications that are nationally recognized.
Because this fund invests in stocks, its performance is related to that of the
overall stock market. The S&P 500 is the Standard & Poors Composite Index of 500
Stocks, a widely recognized, unmanaged index of common stock prices. The S&P 500
figures assume reinvestment of all distributions and do not reflect brokerage
commissions incurred if purchasing the stocks in the open market.
Management of the Fund
Board of Trustees. Overall responsibility for management and supervision of the
Fund rests with the Fund's Board of Trustees. The Trustees approve all
significant agreements between the Fund and the persons and companies that
furnish services to the Fund, including agreements with the Fund's custodian,
transfer agent, investment adviser and administrator. The day to day operations
of the fund are delegated to the Adviser. The Statement of Additional
Information contains background information regarding each of the Fund's
Trustees and executive officers.
Adviser - Upright Financial Corporation. Upright Financial Corporation ("UFC" or
the "Adviser") is responsible for selection and management of the stocks and
other investments in the Fund's portfolio. The Adviser is a registered
investment adviser, under the Investment Advisers Act of 1940 and was founded in
1990 by David Y.S. Chiueh, the president and sole stockholder of the Investment
Adviser. The Adviser's office is located at 615 West Mount Pleasant Avenue,
Livingston, New Jersey 07039. For its services, the Fund pays the Adviser an
annual fee of 1.5% of its average daily net assets. This 1.5% charge is higher
than other funds of this type, however the total operating fees are expected to
be lower than other funds.
Research and management for the Fund's portfolio of securities is provided by a
team of analysts and portfolio managers. Members of the team meet regularly to
discuss holdings, investment strategy, prospective investments and portfolio
composition. David Y.S. Chiueh serves as the senior portfolio manager for the
Fund. The Adviser also provides administrative services for the Fund, subject to
the supervision and direction of the Board of Trustees of the Fund. The
administrative services, including furnishing certain internal executive and
administrative services, providing office space, responding to shareholder
inquiries, monitoring the financial, accounting and administrative transactions
of the Fund, furnishing corporate secretarial services, which include assisting
in the preparation of materials for meetings of the Board of Trustees,
coordinating the preparation of annual and semi-annual reports, preparation of
tax returns and generally assisting in monitoring compliance procedures for the
Fund. For providing these services to the Fund, UFC receives a monthly fee
calculated at an annual rate of .45% of the Fund's average daily net assets.
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Custodian. The Fifth Third Bank Corporation (the"Custodian"), 38 Fountain Square
Plaza, Cincinnati, Ohio 45263, serves as custodian for the Fund. All of the
Fund's assets are held at an account with the Fifth Third. The Custodian settles
all securities trades and collects dividends and interest due to the Fund.
Custody does not involve advice or decisions as to the purchase or sale of
portfolio securities.
Transfer Agent. The Maxus Information System, Inc. DBA Mutual Shareholder
Services (the "Transfer Agent"), serves as the transfer agent, dividend paying
agent and shareholder service agent for the Fund. The Transfer Agent is located
at 1301 East Ninth Street, 36th Floor, Cleveland, OH 44114. In addition to
maintaining all shareholder accounts, the Transfer Agent prepares and mails
confirmation forms and statements of account to shareholders for all purchases
and redemptions of fund shares. The Investment Adviser (not the Fund) pays the
Transfer Agent for these services.
Distributor. The Maxus Securities Corp. 1301 East Ninth Street, Suite 3600,
Cleveland, Ohio 44114, serves as the Fund's distributor.
Net Asset Value
The Fund is open for business on each day that the New York Stock Exchange
(NYSE) is open.
The Fund's net asset value per share (NAV) is normally determined as of 4:00
p.m., eastern time. The Fund's net asset value is calculated by subtracting its
liabilities from its total assets and dividing the result by the total number of
shares outstanding on that same day. Fund liabilities include accrued expenses
and dividends payable, and its total assets include the market value of the
portfolio securities as well as income accrued but not yet received. The public
offering price of shares of the Fund is based on net asset value and calculated
by applying the sales charge to the net asset value. Since the Fund does not
charge a redemption fee, the NAV is the redemption price of shares of the Fund.
Purchase of Shares
In order to invest in the Fund, an investor must first complete and sign an
account application, which is included in this prospectus and send payment for
the shares by check or wire. Completed and signed applications should be mailed
or transmitted by facsimile to the fund at (216) 875-8992.
Orders for the purchase of shares received when the Fund is open for business,
before 4:00 p.m. eastern time, will be executed at the NAV determined that day
plus the applicable sales charge. The minimum initial investment for
non-qualified accounts is $2,000 and the minimum for additional purchases is
$100.
For information about investing in the Fund through a tax-deferred retirement
plan, such as an Individual Retirement Account ("IRA"), Keogh Plan, a Simplified
Employee Pension IRA ("SEP-IRA") or a profit sharing and money purchase plan, an
investor should telephone the Fund at 1-216-687-1000 or write to the Fund at the
address set forth above. Investors should consult their own tax advisers about
the establishment of retirement plans.
Purchases by Mail. If the Investor desires to purchase shares by mail, a check
made payable to the Upright Growth Fund should be sent along with the completed
account application to the Fund. Checks should be drawn on a U.S. bank. Send
your purchase order to:
Upright Growth Fund
c/o Mutual Shareholder Services
1301 East Ninth Street, 36th Floor
Cleveland, OH 44114
Purchases by Wire. To make initial or subsequent purchases by wire, investors
should contact the Fund's transfer agent , Mutual Shareholder Services, at (216)
687-1000 to obtain an account number. Complete and sign the application form and
mail it to the Fund at the above address. Instruct your bank to follow
instructions when wiring funds:
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Wire to: Fifth Third Bank
ABA Number 42000314
Credit: Upright Growth Fund
Fund's Account Number 729-36895
Shareholder Account Number
Shareholder Name______________
Purchases through Brokers-Dealers. You may purchase shares of the Fund through a
broker-dealer or other financial institution that may charge a transaction fee.
Such fees and services may vary among broker-dealers, and such broker-dealers
may impose higher initial or subsequent investment requirements than those
established by the Fund. Broker-dealers are responsible for forwarding payment
for fund shares promptly to transfer agent, Maxus Information Systems, Inc. DBA
Mutual Shareholder Services.
Automatic Purchase Plan. This plan allows investors to purchase on a regular
monthly basis. The minimum initial investment for participants in this plan is
$1000. Under this plan, on a preset day of the month, a draft is drawn on the
investor's bank account in any amount of $100 or more specified by the investor.
The proceeds of the draft are immediately invested in shares of the Fund at the
NAV plus the applicable sales charge determined on the date of investment.
General. The Fund reserves the right to reject any purchase order and to suspend
the offering of shares for a period of time. However, shareholders would
generally be given the right to reinvest dividends during a time when sales were
suspended. The Fund also reserves the right to cancel any purchase due to
nonpayment; waive or lower the investment minimums; modify the conditions of
purchase at any time; and reject any check not made directly payable to the
Upright Growth Fund. Investors who purchase or redeem shares of the fund through
broker-dealers or financial advisors may be subject to service fees imposed by
those broker-dealers or financial advisors for the services they provide.
Sales Charge
The sales charge for the shares of the Fund are outlined below:
Investment As a % of offering price Net amount invested
Up to $49,999 3.00% 3.09%
$50,000-99,999 2.50% 2.56%
$100,000-249,999 2.25% 2.30%
$250,000-499,999 1.75% 1.78%
$500,000-749,999 1.50% 1.52%
750,000-999,999 1.25% 1.27%
$1 million and up .75% .76%
Sales Charge Waiver. The following persons or entities may purchase shares of
the Fund at net asset value without payment of any sales charge, (1) any
investor purchasing shares upon the recommendation of a financial adviser to
which the investor pays a fee for services relating to investment selection; (2)
any employee or representative of UFC, one of its affiliates or a broker-dealer
with a selling group agreement with UFC; (3) any trustee of the Trust; (4) any
company exchanging shares with the Fund pursuant to a merger, acquisition or
exchange offer; (5) any investment advisory client of the Adviser who has, in
writing, given investment discretion to UFC, to the extent the investment is
from the account managed by the Adviser or UFC; (6) registered investment
companies.
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Rights of Accumulation. You may qualify for a reduced sales charge if the
aggregate value of shares previously purchased and the shares currently being
purchased in the account is over a breakpoint. Investments may be combined to
include those held by you, your spouse, and your children under age 21 or
members of a qualified group. A "qualified group" is one that has a purpose
other than buying Fund shares at a discount. To qualify for the reduced sales
charge, at time of purchase, you must provide your representative with enough
information to make a proper determination.
Letter of Intent. The Letter of Intent will allow you to qualify for the reduced
sales charge immediately by promising to invest an amount qualifying for a
certain breakpoint with 13 months from the date of the letter. The minimum
initial investment under a Letter of Intent is 5% of the amount indicated in the
Letter of Intent.
How to Redeem Shares
You can arrange to take money out of your fund account any time by selling some
or all of your shares. Your shares will be sold at the next share price
calculated after your order is received. You must redeem your shares by mailing
or transmitting your request to:
Upright Growth Fund
c/o Mutual Shareholder Services
1301 East Ninth Street, 36th Floor
Cleveland, OH 44114
Facsimile: (216) 875-8992
Redemption proceeds are mailed within five business days after a request is
received in good order except that the mailing or wiring of redemption proceeds
on shares purchased by personal, corporate or government check may be delayed
until it has been determined that collected funds have been received for the
purchase of such shares, which may take up to 15 days from the purchase date.
The clearing period does not apply to purchases made by wire or by cashier's,
treasurer's, or certified check. The Fund's bank may charge for a wire transfer
fee.
Signature Guarantees. A signature guarantee is designed to protect you and the
Fund by verifying your signature. You will need one to: (1) establish certain
services after the account is opened; (2) redeem over $50,000 by written
request; (3) redeem or exchange shares when proceeds are: (i) being mailed to an
address other than the address of record, (ii) made payable to other than the
registered owner(s), or (iii) being sent to a bank account other than the bank
account listed on your Fund account; (4) transfer shares to another owner; (5)
send us written instructions asking us to wire redemption proceeds (unless
previously authorized). These requirements may be waived or modified in certain
circumstances. Acceptable guarantors are all eligible guarantor institutions as
defined by the Securities Exchange Act of 1934 such as : commercial banks which
are FDIC members; trust companies; credit unions, savings associations, firms
which are members of a domestic stock exchange; and foreign branches of any of
the above. We cannot accept guarantees from institutions or individuals who do
not provide reimbursement in the case of fraud, such as notaries public.
Minimum Account Balance. If an investor's account balance falls below $1500, the
investor will be given thirty days notice to reestablish the minimum balance. If
you do not increase your balance, the Fund reserves the right to close your
account and send the proceeds to you. The shares will be redeemed at the NAV on
the day your account is closed.
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Description of Certain Investment Policies
Restricted and Illiquid Securities. The Fund may invest up to 15% of its assets
in securities that are determined by the Adviser, under the supervision of the
Board of Trustees, to be illiquid. This means that the securities may be
difficult to sell promptly at an acceptable price. The sale of some illiquid
securities and some other securities may be subject to legal restrictions. These
securities may present a greater risk of loss than other types of securities and
therefore the Fund is limited as to the percentage of illiquid securities that
it will hold.
When Issued Securities and Delayed Delivery Transactions. The Fund may purchase
securities on a when-issued basis, and it may purchase or sell securities for
delayed delivery. These transactions occur when securities are purchased or sold
by the fund with payment and delivery taking place in the future to secure what
is considered an advantageous yield and price to the Fund at the time of
entering into the transaction. Although the Fund has not established any limit
on the percentage of its assets that may be committed in connection with such
transactions, the fund will maintain a segregated account with its custodian of
cash, cash equivalents, U.S. Government securities or other high grade liquid
debt securities denominated in U.S. dollars or non-U.S. currencies in an
aggregate amount equal to the amount of its commitment in connection with such
purchase transactions.
Foreign Securities. The Fund may invest up to 25% of the Fund's assets in
securities of foreign issuers which are not publicly traded in the U.S. and may
also invest in foreign securities in domestic markets through depository
receipts (ADR's) without regard to this limitation. These securities may involve
additional risks not associated with securities of domestic companies, including
exchange rate fluctuations, political or economic instability, expropriation or
confiscatory taxes. Issuers of foreign securities are subject to different
accounting, reporting and disclosure requirements.
Borrowing and Leverage. The Fund may borrow up to one third of its total assets
for temporary or emergency purposes such as clearing trades or processing
redemptions, and for increasing portfolio holdings. The Fund must maintain
continuous asset coverage of 300% with respect to borrowings and sell within
three days sufficient portfolio holdings to restore such coverage if it should
decline to less than 300%, even if such liquidations are disadvantageous from an
investment standpoint. Leveraging may exaggerate the effect of any increase or
decrease in the value of portfolio securities on the Fund's net asset value.
Money borrowed also will be subject to interest and other costs which may
include commitment fees and/or the cost of maintaining minimum average balances.
These expenses may exceed the income received from the securities purchased with
borrowed funds.
A Fund may at times borrow money by means of reverse repurchase agreements.
Reverse repurchase agreements generally involve the sale by a Fund of securities
held by it and an agreement to repurchase the securities at an agreed-upon
price, date, and interest payment. Reverse repurchase agreements will increase a
Fund's overall investment exposure and may result in losses.
Options, Warrants and Short Sales. The Fund may write, purchase and sell put and
covered call options, and may engage in strategies employing combinations
thereof. A put option constitutes a hedge against a decline in the price of a
security owned by the Fund. A call option constitutes a hedge against an
increase in the price of a security which the Fund has sold short. Gains and
losses realized from options depend on the manager's ability to predict the
direction of stock prices, interest rates and other economic factors. Options
may fail as hedging techniques in cases where the price movements of the
securities underlying the options do not follow the price movements of the
stocks subject ot the hedge. The Fund may invest up to 10% of its assets in
warrants. A warrant is an option to purchase, within a specified time period, a
stated number of shares of common stock at a specified price. Warrants permit
the Fund to participate in an anticipated increase in the market value of a
security without having to purchase the security to which the warrants relate.
Warrants convey no rights to dividends or voting rights, but only an option to
purchase equity securities of the issuer at a fixed price.
The Fund may seek to enhance investments through short sale transactions (up to
25% of the fund's total assets) in stocks listed on one or more exchanges or in
unlisted securities. Short selling involves the sale of borrowed securities. At
the time the short sale is effected, the Fund incurs an obligation to replace
the security borrowed at whatever its price may be at the time the fund
purchases it for delivery to the lender. The Fund may make short sales "against
the box" where the fund sells short a security it already owns, for the purpose
of either protecting or deferring unrealized gains of portfolio securities.
During such time that a short position is open, the Fund would maintain in a
segregated account with the fund's custodian, an amount of cash or U.S.
Government securities equal to the difference between the market value of the
securities sold short at the time of the short sale, and any cash or U.S.
Government securities originally deposited with the broker in connection with
the short sale (excluding the proceeds of the short sale). In addition, until
the Fund replaces the borrowed securities, it must maintain daily the segregated
amount at such a level that the amount deposited in it plus the amount
originally deposited with the broker as collateral will equal the greater of the
current market value of the securities sold short and amount will not be less
than the market value of the securities at the time they were sold short.
<PAGE>
Portfolio Turnover. The portfolio turnover rate for any year is determined by
dividing the lesser of sales or purchases by the Fund's monthly average net
assets, and multiplying by 100. The portfolio turnover rate will vary from year
to year depending on the market conditions. Given the Fund's investment
objective, the portfolio turnover rate should not exceed 150%. Higher portfolio
turnover activity can result in higher brokerage costs of the Fund.
Fundamental Investment Policies. The Fund's investment objective, to seek long
term capital growth is a fundamental policy. This means that this policy may not
be changed without a vote of the holders of a majority of the Fund's shares. All
other policies stated in this prospectus, other than those identified in this
paragraph may be changed without shareholder approval. Additional fundamental
policies include the following: (1) With respect to 75% of its assets, the Fund
may not invest more than 5% of its total assets in any one issuer and may not
own more than 10% of the outstanding voting securities of a single issuer; (2)
the Fund may not invest more than 25% of its total assets in one industry; (3)
the Fund may not borrow in amounts exceeding 33 1/3% of its assets and (4) the
Fund may not issue senior securities. A complete list of both fundamental and
non-fundamental policies is in the Fund's Statement of Additional Information.
Dividends and Distributions
Shareholders should not expect income from this Fund. However, the Fund
distributes substantially all of its net income and net capital gains to
shareholders annually to qualify as a regulated investment company. Dividends
from net investment income and distributions from capital gains, if any, are
normally declared in December and paid after the end of the year. Dividends and
distributions declared by the Fund will be reinvested unless you choose an
alternative payment option on the application form. Dividends not reinvested are
paid by check.
Tax Information
As with any investment, you should consider how your investment in the Fund will
be taxed. If your account is not a tax-deferred retirement account, you should
be aware of these tax consequences. For federal tax purposes, the Fund's income
and short-term capital gain distributions are taxed as dividends; long-term
capital gain distributions are taxed as long-term capital gains. Your
distributions may also be subject to state income tax. The distributions are
taxable when they are paid, whether you take them in cash or participate in the
dividend reinvestment program. In January, the Fund will mail shareholders a
form indicating the federal tax status of your dividend and capital gain
distributions.
Redemptions from the Fund will result in a short or long term capital gain or
loss, depending on how long you have owned the shares. The Fund will mail a form
indicating the trade date and proceeds from all redemptions.
When investors purchase shares just before the Fund pays a distribution from the
NAV, the share price of each Fund may reflect undistributed income, capital
gains or unrealized appreciation of securities. Any distributions from these
amounts that are distributed to the investor , no matter how long the investor
has held their shares, will be fully taxable, even if the net asset value of the
shares is reduced below the price you paid for your shares.
The Taxpayer Relief Act of 1997 made certain changes to capital gains tax rates.
Under the law, taxpayers in all brackets will have an advantage when it comes to
capital gains tax rates. The Fund will provide information relating to the
portion of any fund distribution that is eligible for the reduced capital gains
tax rate.
<PAGE>
General Information
The Fund is a portfolio of Upright Investments Trust, which was organized on
March 4, 1998 as a Delaware business trust. An investor in the Fund is entitled
to one vote for each full share held and a fractional vote for each fractional
share held. There will normally be no meetings of investors for the purpose of
electing Trustees unless and until such time as less than a majority of the
Trustees holding office have been elected by investors. Any Trustee may be
removed from office upon the vote of shareholders holding at least a majority of
the Fund's outstanding shares at a meeting called for that purpose. A meeting
will be called for the purpose of voting on the removal of a Trustee at the
written request of holders of 10% of the Fund's outstanding shares.
The expenses borne by the Fund include all organizational expenses, brokerage
commissions for portfolio transactions, taxes (if any), advisory fee,
administration fee, expenses of registering and qualifying shares for sale (blue
sky fees), fees of Trustees who are not "interested persons" of the Advisor or
Administrator, custodian fees, auditors expenses, and the fidelity bond
premiums.
The Fund will send investors a semi-annual report and an audited annual report,
each of which includes a list of the securities held by the Fund. In an effort
to conserve on the Fund's printing and mailing costs, the Fund plans to
consolidate the mailing of its financial reports by household. This means that a
household having multiple accounts with the identical address of record will
receive a single copy of each report. Any shareholder who does not want
consolidation to apply to his or her account should contact the Fund.
Shareholder inquiries should be made by calling or writing the Fund at the
address on the cover page of this prospectus.
No person has been authorized to give any information or to make any
representations other than those contained in this prospectus, the statement of
additional information or the Fund's official sales literature in connection
with the offering of shares of the Fund, and if given or made, such other
information or representations must not be relied upon as having been authorized
by the Fund. This prospectus does not constitute an offer of shares in any state
which, or to any person to whom, such offer may not lawfully be made.
<PAGE>
UPRIGHT GROWTH FUND
STATEMENT OF ADDITIONAL INFORMATION
September , 1998
This Statement of Additional Information is not a prospectus but should
be read in conjunction with the Fund's Prospectus dated September , 1998, which
may be obtained by writing the Fund at 615 West Mount Pleasant Avenue,
Livingston, New Jersey 07039 or calling the Fund at 1-973-533-1818. The Fund is
a portfolio of Upright Investments Trust.
TABLE OF CONTENTS PAGE
Investment Policies and Limitations
Portfolio Transactions
Management of the Trust
Investment Management and Administration
Performance
Taxes and Distributions
Description of the Trust
Investment Adviser and Administrator
Upright Financial Corporation
615 West Mt. Pleasant Avenue
Livingston, NJ 07039
Custodian
Fifth Third Bank Corporation
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Transfer Agent
Mutual Shareholder Services
1301 East Ninth Street, 36th Floor
Cleveland, OH 44114
Independent Accountants
McCurdy & Associates CPA's, Inc.
27955 Clemens Road
Westlake, OH 44145
Underwriter
Maxus Securities Corp.,
1301 East Ninth Street, Suite 3600
Cleveland, OH 44114
<PAGE>
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in the
Prospectus.
Fundamental Policies. The Fund's fundamental investment policies and limitations
cannot be changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940) of the Fund. The
other investment policies and limitations described in this Statement of
Additional Information are not fundamental and may be changed by a vote of a
majority of the Trustees of the Fund. The following are the fund's fundamental
investment limitations set forth in their entirety. The Fund may not:
(1) with respect to 75% of the fund's total assets, purchase the securities of
any issuer (other than securities issued or guaranteed by the U.S. government or
any of its agencies or instrumentalities) if, as a result, (a) more than 5% of
the Fund's total assets would be invested in the securities of that issuer, or
(b) the fund would hold more than 10% or the outstanding voting securities of
that issuer;
(2) issue senior securities, except as permitted under the Investment Company
Act of 1940;
(3) borrow in amounts exceeding 33 1/3% of its total assets at the time of
borrowing;
(4) underwrite any issue of securities (except to the extent that the Fund may
be deemed to be an underwriter within the meaning of the Securities Act of 1933
in the disposition of restricted securities);
(5) Invest more than 25% of its total assets in securities of companies
principally engaged in any one industry, (other than securities issued or
guaranteed by the U.S. government or any of its agencies or instrumentalities);
(6) purchase or sell real estate unless acquired as a result of ownership of
securities or other instruments (but this shall not prevent the Fund from
investing in securities or other instruments backed by real estate or securities
of companies engaged in the real estate business);
(7) purchase or sell commodities or commodities futures contracts; and
(8) lend money, except that it may purchase and hold debt securities publicly
distributed or traded or privately place and may enter into repurchase
agreements. The Fund will not lend securities if such a loan would cause more
than 33 1/3% of the value of its total net assets to then be subject to such
loans.
Non-Fundamental Policies. The following are non-fundamental investment
limitations and therefore, may be changed by the Board of Trustees, without a
shareholder vote. The Fund may not:
<PAGE>
(9) Invest more than 10% of its total assets in warrants to purchase common
stock, provided that warrants acquired in units or attached ;
(10) Invest in companies for the purpose of exercising control or management;
(11) Invest more than 15% of its net assets illiquid securities;
(12) Invest in oil, gas or other mineral exploration or development programs or
leases;
(13) Purchase the securities of open-end or closed-end investment companies
except in compliance with the Investment Company Act of 1940;
(14) Invest more than 25% of its net assets in foreign securities which are not
traded on U.S. exchanges;
(15) Purchase a call option or a put option if the aggregate premium paid for
all call and put options then held exceeds 15% of its net assets (less the
amount by which any such positions are in-the-money), covered options writing
(sell) are not subject to this 15% limitation; and
(16) Make short sales of securities in an aggregate amount greater than 25% of
net assets. The value of the securities of any one issuer that have been shorted
by the Fund is limited to the lesser of 3% of the securities of any class of the
issuer. Short sales "against the box" where the Fund sells short a security it
already owns or owns at least an equal amount of such securities, is not subject
to this 25% limitation.
American Depository Receipts. ("ADR's") are certificates evidencing ownership of
shares of a foreign issuer. These certificates are issued by depository banks
and generally trade on an established market in the United States or elsewhere.
The underlying shares are held in trust by a custodian bank or similar financial
institution in the issuers home country. The depository bank may not have
physical custody of the underlying securities at all times and may charge fees
for various services, including forwarding dividends and interest and corporate
actions. ADRs are an alternative to directly purchasing the underlying foreign
securities in their national markets and currencies. However, ADRs continue to
be subject to many of the risks associated with investing directly in foreign
securities. These risks include foreign exchange risk as well as the political
and economic risks associated with investing directly in foreign securities.
ADRs are not subject to the 25% limitation on purchases of foreign securities.
Firm Commitment Agreements. The Fund may enter into firm commitment agreements
("when-issued" purchases) for the purchase of securities at an agreed upon price
on a specified future date. The Fund will not enter into such agreements for the
purpose of investment leverage. Liability for the purchase price and all the
rights and risks of ownership of the securities accrue to the Fund at the time
it becomes obligated to purchase the securities, although delivery and payment
occur at a later date, generally within 45 days of the date of the commitment to
purchase. Accordingly, if the market price of the security should decline, the
effect of the agreement would be to obligate the fund to purchase the security
at a price above the current market price on the date of delivery and payment.
During the time the Fund is obligated to purchase such securities, it will
maintain with the Custodian a segregated account with U.S. Government
Securities, cash or cash equivalents of an aggregate current value sufficient to
make payment for the securities.
Option Transactions. The Fund may invest in option transactions involving
individual securities and market indices. An option involves either (a) the
right or the obligation to buy or sell a specific instrument at a specific price
until the expiration date of the option, or (b) the right to receive payments or
the obligation to make payments representing the difference between the closing
price of a market index and the exercise price of the option expressed in
dollars times a specified multiple until the expiration date of the option.
Options are sold (written) on securities and market indices. The purchaser of an
option on a security pays the seller (the writer) a premium for the right
granted but is not obligated to buy or sell the underlying security. The
purchaser of an option on a market index pays the seller a premium for the right
granted, and in return the seller of such an option is obligated to make the
payment. A writer of an option may terminate the obligation prior to expiration
of the option by making an offsetting purchase of an identical option. Options
are traded on organized exchanges and in the over-the-counter market. Options on
securities which the Fund sells (writes) will be covered or secured, which means
that it will own the underlying security (for a call option); will segregate
with the Custodian high quality liquid debt obligations equal to the option
exercise price (for a put option); or (for an option on a stock index) will hold
a portfolio of securities substantially replicating the movement of the index
(or, to the extent it does not hold such a portfolio, will maintain a segregated
account with the Custodian of high quality liquid debt obligations equal to the
market value of the option, marked to market daily). When the Fund writes
options, it may be required to maintain a margin account, to pledge the
underlying securities or U.S. government obligations or to deposit liquid high
quality debt obligations in a separate account with the Custodian.
<PAGE>
The principal reason for the Fund to write a put would be to earn the premium
income. The put option writer has the potential to gain a profit as long as the
price of the underlying security remains above the exercise price, however, in
return for receipt of the premium, the Fund has assumed the obligation to
purchase the underlying security from the buyer of the put option at the
exercise price, even though the security may fall below the exercise price, at
any time during the option period. If the secondary market is not liquid for a
put option a Fund has written, however, the Fund must continue to be prepared to
pay the strike price while the option is outstanding, regardless of price
changes, and must continue to set aside assets to cover its position.
The purchase and writing of options involves certain risks; for example, the
possible inability to effect closing transactions at favorable prices and an
appreciation limit on the securities set aside for settlement, as well as (in
the case of options on a stock index) exposure to an indeterminate liability.
The purchase of options limits the Fund's potential loss to the amount of the
premium paid and can afford the Fund the opportunity to profit from favorable
movements in the price of an underlying security to a greater extent than if
transactions were effected in the security directly. However, the purchase of an
option could result in the Fund losing a greater percentage of its investment
than if the transaction were effected directly. When the Fund writes a covered
call option, it will receive a premium, but it will give up the opportunity to
profit from a price increase in the underlying security above the exercise price
as long as its obligation as a writer continues, and it will retain the risk of
loss should the price of the security decline. When the Fund writes a covered
put option, it will receive a premium, but it will assume the risk of loss
should the price of the underlying security fall below the exercise price. When
the Fund writes a covered put option on a stock index, it will assume the risk
that the price of the index will fall below the exercise price, in which case
the Fund may be required to enter into a closing transaction at a loss. An
analogous risk would apply if the Fund writes a call option on a stock index and
the price of the index rises above the exercise price.
Foreign Securities. The Fund may invest in foreign equity securities including
common stock, preferred stock and common stock equivalents issued by foreign
companies, and foreign fixed income securities. Foreign fixed income securities
include corporate debt obligations issued by foreign companies and debt
obligations of foreign governments or international organizations. This category
may include floating rate obligations, variable rate obligations, Yankee dollar
obligations (U.S. dollar denominated obligations issued by foreign companies and
traded on U.S. markets) and Eurodollar obligations (U.S. dollar denominated
obligations issued by foreign companies and traded on foreign markets).
Foreign government obligations generally consist of debt securities supported by
national, state or provincial governments or similar political units or
governmental agencies. Such obligations may or may not be backed by the national
government's full faith and credit and general taxing powers. Investments in
foreign securities also include obligations issued by international
organizations. International organizations include entities designated or
supported by governmental entities to promote economic reconstruction or
development as well as international banking institutions and related government
agencies. Examples are the International Bank for Reconstruction and Development
(the World Bank), the European Coal and Steel Community, the Asian Development
Bank and the InterAmerican Development Bank. In addition, investments in foreign
securities may include debt securities denominated in multinational currency
units of an issuer (including international issuers). An example of a
multinational currency unit is the European Currency Unit. A European Currency
Unit represents specified amounts of the currencies of certain member states of
the European Economic Community, more commonly known as the Common Market.
<PAGE>
Purchases of foreign securities are usually made in foreign currencies and, as a
result, the Fund may incur currency conversion costs and may be affected
favorably or unfavorably by changes in the value of foreign currencies against
the U.S. dollar. In addition, there may be less information publicly available
about a foreign company then about a U.S. company, and foreign companies are not
generally subject to accounting, auditing and financial reporting standards and
practices comparable to those in the U.S. Other risks associated with
investments in foreign securities include changes in restrictions on foreign
currency transactions and rates of exchanges, changes in the administrations or
economic and monetary policies of foreign governments, the imposition of
exchange control regulations, the possibility of expropriation decrees and other
adverse foreign governmental action, the imposition of foreign taxes, less
liquid markets, less government supervision of exchanges, brokers and issuers,
difficulty in enforcing contractual obligations, delays in settlement of
securities transactions and greater price volatility. In addition, investing in
foreign securities will generally result in higher commissions than investing in
similar domestic securities.
PORTFOLIO TRANSACTIONS
The amended Advisory Agreement "Advisory Agreement" between the Fund and the
Adviser requires that the Adviser, in executing portfolio transactions and
selecting brokers and dealers, seek the best overall terms available. In this
regard, the Adviser will seek the most favorable price and execution for the
transaction given the size and risk involved. In placing executions and paying
brokerage commissions, the Adviser considers the financial responsibility and
reputation of the broker or dealer, the range and quality of the brokerage and
research services made available to the Fund and the professional services
rendered, including execution, clearance procedures, wire service quotations,
assistance with the placement of sales for the Fund and ability to provide
supplemental performance, statistical and other research information for
consideration, analysis and evaluation by the Adviser's staff. Under the
Advisory Agreement, the Adviser is permitted, in certain circumstances, to pay
a higher commission than might otherwise be obtained in order to acquire
brokerage and research services.
The Adviser must determine in good faith, however, that such commission is
reasonable in relation to the value of the brokerage and research services
provided -- viewed in terms of that particular transaction or in terms of all
the accounts over which investment discretion is exercised. In such case, the
Board of Trustees will review the commissions paid by the Fund to determine if
the commissions paid over representative periods of time were reasonable in
relation to the benefits obtained. The advisory fee paid to the Adviser would
not be reduced by reason of its receipt of such brokerage and research services.
To the extent that research services of value are provided by broker/dealers
through or with whom the Fund places portfolio transactions the Adviser may be
relieved of expenses which it might otherwise bear. In addition, the Adviser may
use such research in servicing its other fiduciary accounts and not all services
received may be used by the Adviser in connection with its services to the Fund.
However, the Fund may also benefit from research services received by the
Adviser in connection with transactions effected on behalf of other fiduciary
accounts.
On occasions when the Adviser deems the purchase or sale of a security to be in
the best interests of the Fund as well as other fiduciary accounts, the Adviser
may aggregate the securities to be sold or purchased for the Fund with those to
be sold or purchased for other accounts in order to obtain the best net price
and most favorable execution. In such event, the allocation will be made by the
Adviser in the manner considered to be most equitable and consistent with its
fiduciary obligations to all such fiduciary accounts, including the Fund. In
some instances, this procedure could adversely affect the Fund but the Adviser
deems that any disadvantage in the procedure would be outweighed by the
increased selection available and the increased opportunity to engage in volume
transactions.
<PAGE>
MANAGEMENT OF THE FUND
The Trustees and Officers of the Fund, their current business addresses and
principal occupations during the last five years are set forth below. Trustees
that have an asterisk before their name are "interested persons" of the Trust as
defined in the Investment Company Act of 1940, as amended.
<TABLE>
<S> <C> <C>
Name and address Positions held with Age and Principal Occupation(s)
Trust During Past Five Years
*David Y.S. Chiueh Trustee and President Age 40. Founded Upright Financial
615 West Mt. Pleasant Avenue Corporation in 1990 and serves as Chief
Livingston, New Jersey 07039 Executive Officer. Prior to this service, he
served as a financial planner. Mr. Chiueh
received a Masters Degree in Business
Administration from the Rutgers University in
1988. He is a Certified Financial Planner and
has been a registered investment adviser since
1990
*Chaur Nan Yeh Trustee and Vice Age 50. Mr. Yeh serves a research analyst
615 West Mt. Pleasant Avenue President with Upright Financial Corporation. He is Vice
Livingston, New Jersey 07039 President of the FMY Services, Inc., an
engineering consulting firm, since 1987. He
received a Masters Degree in Engineering from
New York University in 1975.
Wellman Wu Trustee Age 56. Mr. Wu is the president of Kam Kuo Food
Kam Man Food Inc. Corporation in New Jersey. He has served as
511 Old Post Road president since 1996. Prior to that position,
Edison, NJ 08817 Mr. Wu served as Vice President for the Kam Man
Food Inc. in New York since 1972. Mr. Wu
graduated from the School of Commerce in Hong
Kong in 1963.
Bing B. Chen Trustee Age 41. Mr. Chen serves as president of the
Great China Chartering Agency Great China Chartering & Agency Corp., a
253 Washington Street shipping brokerage firm. Prior to December,
Jersey City, NJ 07302 1997, Mr. Chen served as vice-president of
Great China Chartering & Agency Corp. Mr. Chen
received his masters degree of science from the
State University of New York at Maritime
College.
</TABLE>
The Fund does not pay any direct remuneration to any Trustee who is an
"interested person" of the Fund, or any officer employed by the Adviser or its
affiliates. It is anticipated that the Trustees of the Fund who not "interested
persons" of the Fund will receive compensation in the amount of $100.00 per
meeting attended.
The following table sets forth information estimating the compensation of each
current Trustee of the Fund for his or her services.
<TABLE>
<S> <C> <C> <C> <C>
Trustees Aggregate Pension or Retirement Estimated Annual Total Compensation
compensation from Benefits Benefits Upon From the Fund
the Fund Retirement From the
Fund
David Chiueh 0 0 0 0
Chaur Nan Yeh 0 0 0 0
Wellman Wu 400.00 0 0 400.00
Bing B. Chen 400.00 0 0 400.00
</TABLE>
Investment Advisory and Administrative Services
<PAGE>
Upright Financial Corporation serves as the Fund's investment adviser and as the
Fund's Administrator. In addition to the services described in the Fund's
prospectus, the Adviser and/or the Administrator will compensate all personnel,
Officers and Trustees of the Fund if such persons are employees of the Adviser
or its affiliates.
For the services and facilities provided to the Fund by the Adviser, the Fund
pays the Adviser a monthly fee based upon the daily average net assets of such
Fund for such calendar month equal to 1.5% on assets of the Fund. For the
administrative services provided to the Fund, the Fund pays a monthly fee equal
to .45% of the Fund's net assets.
The Board of Trustees of the Fund (including a majority of the Trustees who are
not "interested persons" of the Fund) approved the Advisory Agreement on March
22, 1998 and the amended Advisory Agreement on July 17, 1998 and September 8,
1998. The Advisory Agreement provides that it will continue initially for two
years, and from year to year thereafter as long as it is approved at least
annually both (i) by a vote of a majority of the outstanding voting securities
of the Fund (as defined in the Investment Company Act of 1940) or by the Board
of Trustees of the Fund, and (ii) by a vote of a majority of the Trustees who
are not parties to the Advisory Agreement or "interested persons" of any party
thereto, cast in person at a meeting called for the purpose of voting on such
approval. The Advisory Agreement may be terminated on 60 days written notice by
either party and will terminate automatically if it is assigned. The Advisory
Agreement provides in substance that the Adviser shall not be liable for any
action or failure to act in accordance with its duties thereunder in the absence
of willful misfeasance, bad faith or gross negligence on the part of the Adviser
or of reckless disregard of its obligations thereunder.
The Adviser has adopted a Code of Ethics which regulates the personal securities
transactions of the Adviser's investment personnel and other employees and
affiliates with access to information regarding securities transactions of the
Fund. The Code of Ethics requires investment personnel to disclose personal
securities holdings upon commencement of employment and all subsequent trading
activity.
Mr. David Chiueh owns 100% stock of the Adviser, Upright Financial Corporation.
PERFORMANCE INFORMATION
Total Return. The Fund may advertise performance in terms of average annual
total return for 1, 5 and 10-year periods, or for such lesser periods as the
Fund has been in existence. Average annual total return is computed by finding
the average annual compounded rates of return over the periods that would equate
the initial amount invested to the ending redeemable value, according to the
following formula:
n
P(1 + T) = ERV
Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment
and assumes all dividends and distributions by the Fund are reinvested at the
price stated in the prospectus on the reinvestment dates during the period.
In addition to average annual total returns, the Fund may quote unaveraged or
cumulative total returns reflecting the change in value of an investment over a
specified period. Total returns and other performance information may be quoted
numerically or in a table, graph, or similar illustration.
<PAGE>
Distribution Rate. The Fund may quote its distribution rate along with the above
described standard total return and yield information. The distribution rate is
calculated by annualizing the latest distribution and dividing the result by the
offering price per share as of the end of the period to which the distribution
relates. A distribution can include gross investment income from debt
obligations purchased at a premium and in effect include a portion of the
premium paid. A distribution can also include gross short-term capital gains
without recognition of any unrealized capital losses. Further, a distribution
can include income from the sale of options by the Fund even though such option
income is not considered investment income under generally accepted accounting
principles.
Because a distribution can include such premiums and capital gains, the amount
of the distribution may be susceptible to control by the Adviser through
transactions designed to increase the amount of such items. Also, because the
distribution rate is calculated in part by dividing the latest distribution by
net asset value, the distribution rate will increase as the net asset value
declines. A distribution rate can be greater than the yield rate calculated as
described above.
Comparative Performance. The Fund's performance may be compared to that of other
similar mutual funds. These comparisons may be expressed as mutual fund rankings
prepared by Lipper Analytical Services, Inc. ("Lipper"), which monitors mutual
fund performance. The Fund's performance may also be compared to other mutual
funds tracked by financial or business publications and periodicals.
TAXES AND DISTRIBUTIONS
Each investor should consult a tax advisor regarding the effect of federal,
state and local taxes on an investment in the Fund.
Taxation of the Fund. The Fund intends to qualify as a "regulated investment
company" under Subchapter M of the Internal Revenue Code (the "Code"). To
qualify as a regulated investment company, the Fund must, among other things,
(a) derive at least 90% of its gross income from dividends, interest, payments
with respect to securities loans, gains from the sale or other disposition of
stock, securities or foreign currencies, or other income derived with respect to
its business of investing in such stock or securities; (b) satisfy certain
diversification requirements at the close of each quarter of the Fund's taxable
year.
If the Fund qualifies as a regulated investment company and distributes at least
90% of its net investment income, the Fund will not be subject to Federal income
tax on the income so distributed. However, the Fund would be subject to
corporate income tax on any undistributed income other than tax-exempt income
from municipal securities.
Taxation of the Shareholder. Taxable distributions generally are included in a
shareholder's gross income for the taxable year in which they are received.
However, dividends declared in October, November and December and made payable
to shareholders of record in such a month will be deemed to have been received
on December 31 if paid by the Fund during the following January.
Distributions by the Fund will result in a reduction in the fair market value of
the Fund's shares. Should a distribution reduce the fair market value below a
shareholders cost basis, such distribution nevertheless would be taxable to the
shareholder as ordinary income or long-term capital gain, even though, from an
investment standpoint, it may constitute a partial return of capital. In
particular, investors should be careful to consider the tax implications of
buying shares of the Fund just prior to a distribution. The price of such shares
includes the amount of any forthcoming distribution so that those investors may
receive a return of investment upon distribution which will nevertheless be
taxable to them.
<PAGE>
A redemption of shares is a taxable event and, accordingly, a capital gain or
loss may be recognized. If a shareholder receives a distribution taxable as
long-term capital gain and redeems shares which he has not held for more than
six months, any loss on the redemption (not otherwise disallowed as attributable
to an exempt-interest dividend) will be treated as long-term capital loss to the
extent of the long-term capital gain previously recognized.
Dividends. A portion of the Fund's income may qualify for the dividends-received
deduction available to corporate shareholders to the extent that the Fund's
income is derived from qualifying dividends. Because the Fund may earn other
types of income, such as interest, income from securities loans, non-qualifying
dividends, and short-term capital gains, the percentage of dividends from the
Fund that qualifies for the deduction generally will be less than 100%. The Fund
will notify corporate shareholders annually of the percentage of Fund dividends
that qualifies for the dividend received deductions. A portion of the Fund's
dividends derived from certain U.S. government obligations may be exempt from
state and local taxation. Gains (losses) attributable to foreign currency
fluctuations are generally taxable as ordinary income, and therefore will
increase (decrease) dividend distributions. Short-term capital gains are
distributed as dividend income. The Fund will send each shareholder a notice in
January describing the tax status of dividends and capital gain distributions
for the prior year.
Capital Gain Distributions. Long-term capital gains earned by the Fund on the
sale of securities and distributed to shareholders are federally taxable as
long-term capital gains, regardless of the length of time shareholders have held
their shares. If a shareholder receives a long-term capital gain distribution on
shares of the Fund, and such shares are held six months or less and are sold at
a loss, the portion of the loss equal to the amount of the long-term capital
gain distribution will be considered a long-term loss for tax purposes.
Short-term capital gains distributed by the Fund are taxable to shareholders as
dividends, not as capital gains.
DESCRIPTION OF THE TRUST
Organization. Upright Growth Fund is a portfolio of Upright Investments Trust,
an open-end management investment company organized as a Delaware business trust
on March 4, 1998. The Declaration of Trust provides that the Trust shall not
have any claim against shareholders except for the payment of the purchase price
of shares and requires that each agreement entered into or executed by the Trust
or the Trustees include a provision limiting the obligations created thereby to
the Trust and its assets.
Voting Rights. The Fund's capital consists of shares of beneficial interest. As
a shareholder, you receive one vote for each dollar value of net asset value you
own. The shares have no preemptive or conversion rights; the voting and dividend
rights and the right of redemption are described in the Prospectus. Shares are
fully paid and non-assessable, except as set forth under the heading
"Shareholder and Trustee Liability" above. Shareholders representing 10% or more
of the trust or a fund may, as set forth in the Declaration of Trust, call
meetings of the Trust for any purpose related to the Trust including for the
purpose of voting on the removal of one or more Trustees.
Year 2000. The Fund believes that the year 2000 issue will not pose significant
operational problems for the Fund. Also the Fund believes that the year 2000
issue will not have a material adverse effect on the Fund's future financial
condition, liquidity or results of operations during 1999 and in the future.
Auditor. McCurdy & Associates CPA's , Inc., 27955 Clemens Road, Westlake, Ohio
serves as the Trust's independent accountant. The independent accountant
examines financial statements for the Fund and provides other audit, tax and
related services.
<PAGE>
FORM N-1A
PART C. OTHER INFORMATION
Item 24. Financial Statements:
(a) Financial Statements:
Seed Audit Financial Statement
(b) Exhibits:
(1) Seed Audit Financial Statement
Except as noted, the following exhibits are being filed herewith:
1. Declaration of Trust of Registrant is hereby incorporated by
reference from the Registrant's Pre-Effective Amendment No. 1 to the
Registration Statement on Form N-1A as filed with the Securities and Exchange
Commission on July 30, 1998.
2. By-Laws of Registrant is hereby incorporated by reference from the
Registrant's Pre-Effective Amendment No. 1 to the Registration Statement on
Form N-1A as filed with the Securities and Exchange Commission on July 30, 1998.
3. Not applicable.
4. Not applicable.
5. Amended and Restated Investment Advisory Agreement between Upright
Financial Corporation and Registrant is filed herein.
6. Distribution Agreement between Registrant and Maxus Securities Corp.
dated August 24, 1998 is filed herein.
7. Not applicable.
8. Custody Agreement between Registrant and Fifth Third Bank is filed
herein.
9.(b) Amended and Restated Administration Agreement between Registrant
and Upright Financial Corp. is filed herein.
9.(c) The Transfer Agency Agreement is filed herein.
10. Opinion of counsel is hereby incorporated by reference from the
Registrant's Pre-Effective Amendment No. 1 to the Registration Statement on Form
N-1A as filed with the Securities and Exchange Commission on July 30, 1998.
11. Opinion and Consent of Independent Public Accountant is hereby
incorporated by reference from the Registrant's Pre-Effective Amendment No. 1 to
the Registration Statement on Form N-1A as filed with the Securities and
Exchange Commission on July 30, 1998.
12. Not applicable.
13. Mutual Fund Subscription Purchase Agreement is filed herein.
14. Not applicable.
15. Not applicable.
16. Not applicable.
17(a). Powers of Attorney are hereby incorporated by reference from the
Registrant's Pre-Effective Amendment No. 1 to the Registration Statement on Form
N-1A as filed with the Securities and Exchange Commission on July 30, 1998.
<PAGE>
Item 25. Persons Controlled by or Under Common Control with Registrant.
The Registrant does not directly or indirectly control any person.
Upright Financial Corporation, the Registrant's investment adviser
(the"Adviser") is wholly owned by David Y.S. Chiueh.
Item 26. Number of Holders of Securities.
There was one record holder of the Fund as of the date of this
filing.
Item 27. Indemnification
Section 8.2 of the Declaration of Trust filed herein provides for
indemnification of the Registrant's trustees and officers under certain
circumstances.
Insofar as indemnification for liability arising under the Act may be
permitted to trustees, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the 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 Act and will be governed by the final adjudication of
such issue.
Item 28. Business and Other Connections of Investment Adviser
All of the information required by this item is set forth in the Form
ADV, as amended, of Upright Financial Corporation (File No. 801-38340). The
following sections of Form ADV are incorporated herein by reference:
(a) Items 1 and 2 of Part II
(b) Section 6, Business Background, of each Schedule D.
Item 29. Principal Underwriter
(a) The Maxus Securities Corp. the principal underwriter of the
Registrant, currently acts as a principal underwriter for the following
investment companies: Maxus Income Fund; Maxus Equity Fund; Maxus Laureate Fund;
Maxus Ohio Heartland Fund; Maxus Aggressive Value Fund; and Jhaveri Fund.
(b)
Name: Positions and Offices Positions and Offices
with Underwriter: with Registrant:
Richard A. Barone
1301 East Ninth Street, Suite 3600
Cleveland, Ohio 44114 President None
Robert W. Curtin
1301 East Ninth Street, Suite 3600
Cleveland, Ohio 44114 Sr. Vice President and Secretary None
Robert F. Pincus
1301 East Ninth Street, Suite 3600
Cleveland, Ohio 44114 Vice President None
(c) Maxus Securities Corp. No compensation of any kind received from
Registrant in the past year.
Item 30. Location of Accounts and Records
(a)The Declaration of Trust, by-laws, minute books and procedural
information of the Registrant are in the physical possession of Upright
Financial Corp.
(b)All books and records required to be maintained by the custodian
(c)All books and record required to be maintained by the transfer agent
are held at:
Mutual Shareholder Services
1301 East Ninth Street, 36th Floor
Cleveland, OH 44114
<PAGE>
Item 31. Management Services.
Item 32. Undertakings.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this pre-effective amendment to the Fund's
registration statement pursuant to Rule 485(b ) under the Securities Act of 1933
and the Investment Company Act of 1940, as amended has duly caused this
Pre-Effective Amendment to the Fund's Registration Statement to be signed on its
behalf by the undersigned, thereto duly authorized in the City of Livingston,
and State of New Jersey on the 28th day of July, 1998.
Upright Investments Trust
Upright Growth Fund
By: /s/ David Y.S. Chiueh
David Y.S. Chiueh
President
Pursuant to the requirements of the Securities Act of 1933, this Pre-Effective
Amendment to the Fund's Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated:
Signature Date
/s/ David Y.S. Chiueh September 16, 1998
- --------------------------------------------------------------------------------
Trustee and President of the Fund
/s/ Chaur Nan Yeh September 16, 1998
- --------------------------------------------------------------------------------
Trustee and Vice President of the Fund
/s/ Wellman Wu September 16, 1998
- --------------------------------------------------------------------------------
Trustee of the Fund
/s/ Bing B. Chen September 16, 1998
- --------------------------------------------------------------------------------
Trustee of the Fund
<PAGE>
EXHIBIT INDEX
Exhibit
Number Document Title
1. Underwriting Agreement
2. Mutual Fund Subscription Purchase Agreement
3. Amended Investment Advisory Agreement
4. Amended Administration Agreement
5. Amended Transfer Agent Agreement
6. Custody Agreement
<PAGE>
<PAGE>
UNDERWRITING AGREEMENT
THIS AGREEMENT is made as of August 21, 1998, by and between
Upright Growth Fund, a portfolio of Upright Investments Trust of Delaware
Business Trust ("FUND"),and Maxus Securities Corp., an Ohio corporation
("Underwriter").
WHEREAS, the Fund is an investment company registered under the
Investment Company Act of 1940, as amended (the "Act"); and
WHEREAS, Underwriter is a broker-dealer registered with the Securities
and Exchange Commission and a member of the National Association of Securities
Dealers, Inc., (the "NASD"); and
WHEREAS, the Fund and Underwriter are desirous of entering into an
agreement providing for the distribution by Underwriter of shares of beneficial
interest (the "Shares") of the Upright Growth Fund series of shares of the
Upright Investments Trust (the "Series").
NOW, THEREFORE, in consideration of the promises and agreements of the
parties contained herein, the parties agree as follows:
1. Appointment. The Fund hereby appoints Underwriter as its agent for
the distribution of the Shares in the states where such a requirement exists.
The services of the Distributor to the Fund under this Agreement are not to be
deemed exclusive, and Distributor shall be free to render similar services or
other services to others so long as its services hereunder are not impaired
thereby. Underwriter hereby accepts such appointment under the terms of this
Agreement. Notwithstanding any other provision hereof, the Trust may terminate,
suspend or withdraw the offering of Shares of any Series whenever, in its sole
discretion, it deems such action to be desirable.
2. Sale and Repurchase of Shares.
(a) Underwriter, as agent for the Fund, will sell Shares
to the public Against orders therefor in the at the regular public price
currently determined by the Fund in the manner described in their offering
Prospectuses, all such sales to comply with the provisions of the Act and the
rules and regulations of the Securities and Exchange Commission promulgated
thereunder.
(b) Underwriter will also have the right to take, as agent
for the Fund, all actions, which, in Underwriter's judgement, are necessary to
carry into, effect the distribution of the Shares.
<PAGE>
(c) The net asset value of the Shares of each Series (or
Class of a Series shall be determined in the manner provided in the Registration
Statement, and when determined shall be applicable to transactions as provided
for in the Registration Statement. The net asset value of the Shares of each
Series (or each Class of a Series) Shall be calculated by the Upright Financial
Corp. (Administrator) or by another entity on behalf of the Upright Growth Fund.
Underwriter shall have no duty to inquire into or liability for the accuracy of
the net asset value per share is calculated.
(d) On every sale, the Fund shall receive the applicable
net asset Value of the shares promptly, but in no event later than the third
business day following the date on which Underwriter shall have received an
order for the purchase of the Shares. (e) Upon receipt of purchase instructions,
Underwriter will transmit Such instructions to the Fund or its transfer agent
for registration of the Shares purchased.
(f) Nothing in the Agreement shall prevent Underwriter or
any Affiliated person (as defined in the Act) of Underwriter from acting as
underwriter or distributor for any other person, firm or corporation (including
other investment companies) or in any way limit or restrict Underwriter or any
such affiliated person from buying, selling or trading any securities for its or
their own account or for the accounts of others for whom it or they may be
acting; provided, however, that Underwriter expressly represents that it will
undertake no activities which, in its judgment, will adversely affect the
performance of its obligations to the Fund under this Agreement.
(g) Underwriter, as agent of and for the account of the
Fund, may Repurchase the Shares at such prices and upon such terms and
conditions as shall be specified in the Registration Statement. At the end of
each business day, the Underwriter shall notify the Fund and the Fund's transfer
agent of the number of shares redeemed, and the identity of the shareholders or
dealers offering Shares for repurchase. Upon such notice, the Fund's Transfer
Agent shall pay the Underwriter the net asset value of the redeemed shares in
cash or in the form of a credit against monies due the Fund from the Underwriter
as proceeds from the sale of Shares. The Fund reserves the right to suspend such
repurchase right upon written notice to the Underwriter. The Underwriter further
agrees to act as agent for the Fund to receive and transmit promptly to the
Fund's transfer agent, shareholder and dealer requests for redemption of Shares.
3. Sales of Shares by the Fund. The Fund reserves the right To issue or
sell any Shares directly to the public at any time.
4. Basis of Sale of Shares. Underwriter does not agree to sell
any specific number of Shares. Underwriter, as agent for the Fund, undertakes to
sell Shares on a best effort basis only against orders therefor.
<PAGE>
5. Compliance with NASD and Government Rules.
(a) Underwriter will conform to the Rules of Fair Practice
of the NASD and the securities laws of any jurisdiction in which it sells,
(b) Underwriter agrees to furnish to the Trust sufficient
copies of any Agreements, plans or other materials it intends to use in
connection with sales of Shares in adequate time for the Fund to file and clear
them with the proper authorities before they are put in use, and not to use them
until so filed and cleared.
(c) Underwriter may enter into selected dealer agreement with
registered and qualified dealers and other financial institutions of its choice
for the sale of Shares (the "Selected Dealers"), provided that the Fund shall
approve the form of such agreements and provided further that, in entering into
any such agreement. Shares sold to Selected Dealers by the Distributor shall be
for resale by such dealers only at the prices as set forth herein. With respect
to Shares sold by any Selected Dealer, the Distributor is authorized to direct
the Transfer Agent to receive instructions directly from the Selected Dealer on
behalf of the Distributor as to the registration of Shares in the names of
investors and to confirm the issuance of such Shares to such investors. The
Distributor is also authorized to instruct the Transfer Agent to receive payment
directly from a Selected Dealer on behalf of the Distributor for the purchase
price of the Shares. In such event, the Transfer Agent will obtain from the
Selected Dealer and maintain a record of such registration and payments.
(d) Underwriter, at its own expense, will qualify as dealer or
broker, or Otherwise, under all applicable State or federal laws required in
order that Shares may be sold in such States as may be mutually agreed upon by
the parties, except for expenses described in Exhibit A hereto, which will be
paid by the Administrator. Underwriter shall pay its brokers or selected dealers
commissions on sales of Fund shares made by or through them, except that no
commission need be paid when the sale price does not include a per share load.
(e) Underwriter and selected dealer shall not make, or
permit any representative, broker or dealer to make, in connection with any sale
or solicitation of a sale of the Shares, any representations concerning the
Shares except those contained in the then current prospectus and statement of
additional information covering the Shares and in printed information approved
by the Fund as information supplemental to such prospectus and statement of
additional information. Copies of the then effective prospectus and statement of
additional information and any such printed supplemental information will be
supplied by the Fund to Underwriter in reasonable quantities upon request.
6. Records to be Supplied by Fund_. The Fund shall furnish to
Underwriter copies of all information, financial statements and other papers
which Underwriter may reasonably request for use in connection with the
distribution of the Shares
<PAGE>
7. Expenses to be Borne by Fund_. The Fund will bear the following
expenses:
(a) preparation, setting in type, printing of sufficient
copies of the prospectus and statement of additional information for
distribution to shareholders, and the distribution to shareholders of the
prospectus and statement of additional information;
(b) preparation, printing and distribution of reports and
other communications to shareholders;
(c) registration of the Shares under the federal securities
law;
(d) qualification of the Shares for sale in the jurisdictions
designated by Underwriter;
(e) maintaining facilities for the issue and transfer of the
Shares;
(f) supplying information, prices and other data to be
furnished by the Fund under this Agreement; and
(g) any original issue taxes or transfer taxes applicable to
the sale or delivery of the Shares of certificates therefor.
8. Indemnification
(a) The Fund agrees to indemnify, defend and hold the
Underwriter, its officers, and directors, and any person who controls the
Underwriter within the meaning of Section 15 or 1933 Act (the "1933 Act") or
Section 20 of the Securities Exchange Act of 1934, as amended (the "1934 Act"),
free and harmless from and against any and all claims, demands or liabilities
and expenses (including the cost of investigating or defending such claims,
demands or liabilities and any counsel fees incurred in connection therewith)
which the Underwriter, its officers, directors or any such controlling persons
may incur under the 1933 Act, the 1934 Act, or under common law or otherwise,
arising out of or based upon any untrue statement of a material fact contained
in the Registration Statement or Prospectus or arising out of or based upon any
alleged omission to state a material fact required to be stated in either
thereof or necessary to make the statements in either thereof not misleading,
except insofar as such claims, demands, liabilities or expenses arise out of or
are based upon any such untrue statement or omission or alleged untrue statement
or omission made in reliance upon and in conformity with information furnished
in writing by the Underwriter to the Fund for use in the Registration Statement.
The Underwriter agrees to comply with all of the applicable terms and provisions
of the 1934 Act.
<PAGE>
(b) The Underwriter agrees to indemnify, defend, and hold the
Fund, its officers, trustees, employees shareholders and agents, and any person
who controls the Fund within the meaning of Section 15 of the 1933 Act of
Section 20 of the 1934 Act, free and harmless from and against any and all
claims, demands, liabilities and expenses (including the cost of investigating
or defending against such claims, demands or liabilities and any counsel fees
incurred in connection therewith) which the Fund, its trustees, officers,
employees, shareholders and agents, or any such controlling person may incur
under the 1933 Act, the 1934 Act or under common law or otherwise arising out of
or based upon any untrue statement of a material fact contained in information
furnished in writing by the Underwriter to the Fund for use in the Registration
Statement, or arising out of or based upon any omission or alleged omission to
state a material fact in connection with such information required to be stated
in the Registration Statement necessary to make such information not misleading.
(c) A party seeking indemnification hereunder (the Indemnitee)
shall give prompt written notice to the party from whom indemnification is
sought ("Indemnitor") of a written assertion or claim of any threatened or
pending legal proceeding which may be subject to indemnity under this Section;
provided, however, that failure to notify the Indemnitor of such written
assertion or claim shall not relieve the indemnitor of any liability arising
from this Section. The Indemnitor shall be entitled, if it so elects, to assume
the defense of any suit brought to enforce a claim subject to this Agreement and
such defense shall be conducted by counsel chosen by the Indemnitor and
satisfactory to the Indemnitee; provided, however, that if the defendants
include both the Indemnitee and the Indemnitor, and the Indemnitee shall have
reasonably concluded that there may be one or more legal defenses available to
it which are different from or additional to those available to the Indemnitor
("conflict of interest"), the Indemnitor shall have the right to select separate
counsel to defend such claim on behalf of the Indemnitee. In the event that the
Indemnitor elects to assume the defense of any suit pursuant to the preceding
sentence and retains counsel satisfactory to the Indemnitee, the Indemnitee
shall bear the fees and expenses of additional counsel retained by it except for
reasonable investigation costs which shall be borne by the Indemnitor. If the
Indemnitor (i) does not elect to assume the defense of a claim, (ii) elects to
assume the defense of a claim but chooses counsel that is not satisfactory to
the Indemnitee or (iii) has no right to assume the defense of a claim because of
a conflict of interest, the Indemnitor shall advance or reimburse the
Indemnitee, at the election of the Indemnitee, reasonable fees and disbursements
of any counsel retained by Indemnitee, including reasonable investigation costs.
9. Termination and Amendment of this Agreement. This Agreement shall
automatically terminate, without the payment of any penalty, in the event of its
assignment. This Agreement may be amended only if such amendment is approved (i)
by Underwriter, (ii) either by action of the Board of Trustees of the Fund or at
a meeting of the Shareholders of the Fund by the affirmative vote of a majority
of the outstanding Shares, and (iii) by a majority of the Trustees of the Fund
who are not interested persons of the Trust or of Underwriter, by vote cast in
person at a meeting called for the purpose of voting on such approval. Either
the Fund or Underwriter may at any time terminate this Agreement on sixty (60)
days' written notice delivered or mailed by registered mail, postage prepaid, to
the other party.
<PAGE>
10. Effective Period of This Agreement. This Agreement shall take
effect upon its execution and shall remain in full force and effect for a period
of two years from the date of its execution (unless terminated automatically as
set forth in paragraph 10 and from year to year thereafter), subject to annual
approval (i) by Underwriter, (ii) by the Board of Trustees of the Fund or a vote
of a majority of the outstanding Shares, and (iii) by a majority of the Trustees
of the Fund who are not interested persons of the Fund or of Underwriter, by
vote cast in person at a meeting called for the purpose of voting on such
approval.
11. Limitation of Fund's Liability. The Term "The Upright Growth Funds"
means and refers to the Fund from time to time serving under the Fund's
Declaration of Trust as the same may subsequently thereto have been, or
subsequently hereto be, amended. It is expressly agreed that the obligations of
the Fund hereunder shall not be binding upon any of the Trustees, Shareholders,
nominees, officers, agents or employees of the Fund, personally, but bind only
the trust property of the Fund, as provided in the Declaration of Trust of the
Upright Investments Trust. The execution and delivery of this Agreement have
been authorized by the Trustees and Shareholders of the Fund and signed by the
officers of the Fund, acting as such, and neither such authorization by such
Trustees and Shareholders nor such execution and delivery by such officers shall
be deemed to have been made by any of them individually or to impose any
liability on them personally, but shall bind only the trust property of the Fund
as provided in its Declaration of Trust. A copy of the Agreement and Declaration
of Trust of the Fund is on file with the SEC.
12. Successor Investment Company. Unless this Agreement has been
terminated in accordance with Paragraph 10, the terms and provisions of this
Agreement shall become automatically applicable to any investment company which
is a successor to the Fund as a result of a reorganization, recapitalization or
change of domicile.
13. Severability. In the event any provision of this Agreement is
determined to be void or unenforceable, such determination
shall not affect the remainder of this Agreement, which shall
continue to be in force.
14. Questions of Interpretation.
(a) This Agreement shall be governed by the laws of the State
of Ohio.
(b) Any question of interpretation of any term or provision of
this Agreement having a counterpart in or otherwise derived from a term or
provision of the Act shall be resolved by reference to such term or provision of
the Act and to interpretation thereof, if any, by the United States courts or in
the absence of any controlling decision of any such court, by rules, regulations
or orders of the Securities and Exchange Commission issued pursuant to said Act.
In addition, where the effect of a requirement of the Act, reflected in any
provision of this Agreement is revised by rule, regulation or order of the
Securities and Exchange Commission, such provision shall be deemed to
incorporate the effect of such rule, regulation or order.
<PAGE>
15. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that for this purpose the
address of the Upright Growth Fund shall be 615 West Mt. Pleasant Ave.,
Livingston, NJ 07039 and of the Underwriter shall be 1301 East Ninth Street,
Suite 3600, Cleveland, Ohio 44114.
16. Counterparts. This Agreement may be in one or more counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
17. Binding Effect. Each of the undersigned expressly warrants and
represents that he has the full power and authority to sign this Agreement on
behalf of the party indicated, and that his signature will operate to bind the
party indicated to the foregoing terms.
18. Force Majeure. If Underwriter shall be delayed in its performance
of services or prevented entirely or in part from performing services due to
causes or events beyond its control, including and without limitation, acts of
God, interruption of power or other utility, transportation or communication
services, acts of civil or military authority, sabotages, national emergencies,
explosion, flood, accident, earthquake or other catastrophe, fire, strike or
other labor problems, legal action, present or future law, governmental order,
rule or regulation, or shortages or suitable parts, materials, labor or
transportation, such delay or non-performance shall be excused and a reasonable
time for performance in connection with the Agreement shall be extended to
include the period of such delay or non-performance.
IN WITNESS WHEREOF, the Fund and Underwriter have each caused this
Agreement to be signed on its behalf, all as of the day and year first above
written.
ATTEST: Upright Growth Fund
/S/ Chaur Nan Yeh By: /S/ David Y.S. Chiueh
ATTEST: Maxus Securities Corp.
_________________________ By: /S/ Robert W. Curtin
Name: Robert W. Curtin
President
<PAGE>
UNDERWRITING AGREEMENT
EXHIBIT A
The following is a list of the states in which Maxus Securities Corp.
will act as underwriter for Upright Growth Fund, and the amount of expenses that
Upright Financial Corp. ("Administrator") will pay on behalf of Maxus Securities
Corp.
State Expenses *
New Jersey
New York
In addition to the above fees an annual fee of $350 will be charged to write
checks to the various brokers selling the fund.
* The calculation of this expense is the state registration fee dividend by 2.
<PAGE>
<PAGE>
SUBSCRIPTION AGREEMENT
For and in consideration of the mutual agreements herein contained
David Y.S. Chiueh, hereinafter referred to as "Subscriber" hereby agrees to
purchase from Upright Growth Fund (the "Fund"), a mutual fund series of the
Upright Investment Trust, and Fund agrees to sell to Subscriber 10,000 shares of
capital stock of Fund, at the price of $10 per share, upon the following terms
and conditions:
Subscriber agrees to pay $100,000 to Fund.
Fund will not issue any securities or receive any of the proceeds of
this subscription until subscriptions identical in from to this one have been
made by not more than 25 persons (which shall include Subscriber) to purchase
from Fund securities for an aggregate net amount, which plus Fund's then net
worth will equal at least $100,000.
In the event that such aggregate net amount of cash has been paid
in and Fund has a net worth of at least $100,000 within 90 days after such
registration statement has become effective, then this subscription shall be in
full force and effect; and Fund may retain all funds tendered to it.
Subscriber agrees that the shares are being purchased for investment
with no present intention of reselling or redeeming said shares.
Subscribers of shares of the Upright Growth Fund
By: /s/ David Y.S. Chiueh Date: June 27, 1998
David Y.S. Chiueh
Subscription agree to Upright Growth Fund
By: /s/ David Y.S. Chiueh Date: June 27, 1998
David Y.S. Chiueh
President
Board of Trustees
Upright Growth Fund
<PAGE>
INVESTMENT ADVISORY AGREEMENT
This Investment Advisory and Management Agreement ("Agreement"), is made
and entered into this 8th day of September, 1998 by and between Upright
Investments Trust, a Delaware business trust (the "Fund"), and Upright Financial
Corporation, a New Jersey company (the "Adviser").
WHEREAS, the Fund is registered as an open-end, diversified investment
company under the Investment Company Act of 1940 (the "1940 Act") and has
registered its shares of common stock for sale to the public under the
Securities Act of 1933 and various state securities laws; and
WHEREAS, the Fund wishes to retain the Adviser to provide investment
advisory and portfolio management services to the Fund; and WHEREAS, the Adviser
is willing to furnish such services on the terms and conditions hereinafter set
forth.
NOW THEREFORE , in consideration of the promises and mutual covenants
herein contained, and intending to be legally bound, the Fund and the Adviser
agree as follows:
1. Appointment. The Fund hereby appoints the Adviser to manage the
investment and reinvestment of assets of the Upright Growth Fund and any other
portfolio of the Fund which may be hereafter designated as a separate series for
the period and on the terms set forth in this Agreement. The Adviser accepts
such appointment and agrees to render the services herein set forth, for the
compensation herein provided.
2. Duties of the Advisor. Subject to supervision by the Board, the
Advisor shall, during the term and subject to the provisions of this Agreement,
(i) determine the composition of the Fund's portfolio, the nature and timing of
the changes herein and the manner of implementing such changes and (ii) provide
the Fund with such investment advisory, research and related services as the
Fund may, from time to time, reasonably require for the investment of its funds.
The Advisor shall perform such duties in accordance with (a) applicable laws and
regulations, including, but not limited to, the 1940 Act, (b) the terms of this
Agreement, (c) the Trust's Declaration of Trust, By-Laws and currently effective
registration statement under the Securities Act of 1933, as amended, and the
1940 Act, and any amendments thereto, (d) relevant undertakings to state
securities regulators which also have been provided to the Manager, (e) the
stated investment objective(s), policies and restrictions of each applicable
Series, and (f) such other guidelines as the Fund's Board of Trustees ("Board")
reasonably may establish.
3. Services Not Exclusive. The services furnished by the Advisor
hereunder are not to be deemed exclusive and the Advisor shall be free to
furnish similar services to other so long as its services under this Agreement
are not impaired thereby. Nothing in this Agreement shall limit or restrict the
right of any director, officer or employee of the Advisor, who may also be a
Trustee, officer or employee of the Fund, to engage in any other business or to
devote his or her time and attention in part to the management or other aspects
of any other business, whether of a similar nature or a dissimilar nature.
<PAGE>
4. Expenses Payable by the Fund. Except as otherwise provided in
Paragraphs 2 and 5 hereof, the Fund shall be responsible for effecting sales and
redemption of its shares, for determining the net asset value thereof and for
all of its other operations and shall pay all administrative and other costs and
expenses attributable to its operations and transactions, including, without
limitation, organization expenses; voluntary assessments and other expenses
incurred connection with membership in investment company organizations;
transfer agent and custodian fees; legal, administrative and clerical services;
auditing; preparation, printing and distribution of its prospectuses, proxy
statements, stockholders reports and notices; cost of supplies and postage;
Federal and state registration fees; Federal, state and local taxes;
non-affiliated directors fees; interest on its bank loans; brokerage commissions
and prompting the sale of its shares, including advertising, compensation of
sales personnel.
5. Expenses Payable by the Advisor. The Advisor is responsible for (1)
the compensation of any of the Fund's trustees, officers and employees who are
interested persons of the Advisor, (2) compensation of the Advisor's personnel
and other expenses in connection with the provisions of portfolio management
services under this Agreement. Other than as herein specifically indicated, the
Advisor shall not be responsible for the Fund's expenses. Specifically, the
Advisor will not be responsible, except to the extent of the reasonable
compensation of employees of the Fund whose services may be used by the Advisor.
No trustee, officer or employee of the Fund shall receive from the Fund
any salary or other compensation as such trustee, officer or employee while he
is at the same time a director, officer or employee of the Advisor or any
affiliated company of the Advisor. This paragraph shall not apply to trustees,
executive committee members, consultants and other persons who are not regular
members of the Advisor's or any affiliated company's staff.
6. Compensation. As compensation for the services performed by the
Advisor, the Fund shall pay the Advisor, as promptly as possible after the last
day of each month, a fee, accrued each calendar day (including weekends and
holidays) at the rate of 1.5% per annum of the daily net assets of the Fund.
Advisor may waive its fee or reimburse the Fund for any amount of the fee
payable to it during that fiscal year.
7. Limitation of Liability of the Advisor. The Advisor shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Fund or any Series in connection with the matters to which this Agreement
relate except a loss resulting from the willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement. The Fund
shall indemnify the Advisor and hold it harmless from and against all damages,
liabilities, costs and expenses (including reasonable attorneys' fees and
amounts reasonably paid in settlement) incurred by the Advisor in or by reason
of any pending, threatened or completed action, suit, investigation or other
proceeding (including an action or suit by or in the right of the Fund or its
security holders) arising out of or otherwise based upon any action actually or
allegedly taken or omitted to be taken by the Advisor in connection with the
performance of any of its duties or obligations under this Agreement or
otherwise as an investment adviser of the Fund.
<PAGE>
8. Responsibility of Dual Directors, Officers and/or Employees. If any
person who is a director, officer or employee of the Advisor is or becomes a
director, officer and/or employee of the Fund and acts as such in any business
of the Fund pursuant to this Agreement, then such director, officer and/or
employee of the Advisor shall be deemed to be acting in such capacity solely for
the Fund, and not as a director, officer or employee of the Advisor or under the
control or direction of the Advisor, although paid by the Advisor.
9. Execution of Transactions. In the selection of brokers or dealers
and the placement of orders for the purchase and sale of portfolio investments
for the Fund, the Advisor shall use its best efforts to obtain for the Fund the
most favorable price and execution available, except to the extent that it may
be permitted to pay higher brokerage commissions for brokerage or research
services. In doing so, the Advisor may consider such factors which it deems
relevant to the Fund's best interest, such as price, the size of the
transaction, the nature of the market for the security, the amount of the
commission, the timing of the transaction, the reputation, experience and
financial stability of the broker-dealer involved and the quality of service
rendered by the broker-dealer in other transactions. Subject to such policies as
the Board may determine, the Advisor shall not be deemed to have acted
unlawfully or to have breached any duty created by this Agreement or otherwise
solely by reason of its having caused a Fund to pay a broker that provides
brokerage or research services to the Advisor an amount of commission for
effecting a portfolio investment transaction in excess of the amount of
commission another broker would have charged for effecting that transaction if
the Advisor determines in good faith that such amount of commission is
reasonable in relation to the value of the brokerage or research services
provided by such broker or dealer, viewed in terms of either that particular
transaction or the Advisor 's overall responsibilities with respect to the Fund
and to other clients of the Advisor as to which the Advisor exercises investment
discretion.
10. Duration and termination. This Agreement will remain in effect for
two years from the date of its execution and from year to year thereafter so
long as specifically approved annually, (1) by vote of a majority of the
trustees of the Fund who are not parties to this Agreement or interested persons
of such parties, cast in person at a meeting called for that purpose, and (2)
either by vote of the holders of a majority of the outstanding voting securities
of the Fund or by a majority vote of the Fund's Board of Trustees.
<PAGE>
This Agreement shall terminate automatically in the event of its
assignment by the Advisor and shall not be assignable by the Fund without the
consent of the Advisor. This Agreement may also be terminated at any time,
without the payment of penalty, by the Fund or by the Advisor on sixty (60)
days' written notice addressed to the other party at its principal place of
business.
11. Amendment of This Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no material amendment of this Agreement
shall be effective until approved by vote of the holders of a majority of the
outstanding voting securities of such Series.
12. Name of Company. The Fund may use the name "Upright Investments"
only for so long as this Agreement or any extension, renewal or amendment hereof
remains in effect, including any similar agreement with any organization which
shall have succeeded to the business of the Advisor. At such time as such an
agreement shall no longer be in effect, the Fund will (to the extent that it
lawfully can) cease to use any name derived from Upright Financial Corp. or any
successor.
13. Definitions. As used in this Agreement, the terms "majority of the
outstanding voting securities," "interested person, " and "assignment "shall
have the same meanings as such terms have in the 1940 Act.
14. Severability. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors.
15. Miscellaneous. The captions in this Agreement are included for
convenience of reference only an din no way define or delimit nay of the
provisions hereof or otherwise affect their construction or effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
Attest: Upright Growth Fund
/s/ Chaur Nan Yeh BY /s/ David Y.S. Chiueh
- -------------------------- ------------------------------
Vice President of the Fund President
<PAGE>
Upright Financial Corporation
Attest:
/s/ Chaur Nan Yeh BY /s/ David Y.S. Chiueh
- -------------------------- ------------------------------
Vice President of the Fund President
<PAGE>
ADMINISTRATION AGREEMENT
THIS ADMINISTRATION AGREEMENT is made and entered into this 8th day of
September, 1998 by and between Upright Investments Trust, a Delaware business
trust (the "Fund"), and Upright Financial Corporation, a New Jersey company
(the "Administrator")
WHEREAS, the Fund is registered as an open-end, diversified investment
company under the Investment Company Act 1940 (the "1940 Act"); and
WHEREAS, the Fund wishes to retain the Administrator to render
supervisory and corporate administrative services to the Fund in the manner and
on the terms hereinafter set forth;
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, and intending to be legally bound, the Fund and the
Administrator agree as follows:
1. Appointment. The Fund hereby appoints the Administrator to provide
administrative services, subject to the direction of the Board of Trustees and
the officers of the Fund, in connection with the management of the Fund's
operations for the period and on the terms set forth in this Agreement. The
Administrator accepts such appointment and agrees perform all services of
administrator. The Administrator shall for all purposes herein be deemed to he
an independent contractor and, except as expressly provided or authorized
(whether herein or otherwise), shall have no authority to act for or represent
the Fund in any way or otherwise be deemed an agent of the Fund.
2. Duties of the Administrator. The Administrator, at its expense, shall supply
the Board of Trustees and officers of the Fund with all statistical information
and reports reasonably required by it and reasonably available to the
Administrator and furnish the Fund with office facilities, including space,
furniture and equipment and all personnel reasonably necessary for the operation
of the Fund. The Administrator shall maintain and preserve all books and records
with respect to the Fund's securities and transactions in accordance with all
applicable federal and state laws and regulations. In compliance with the
requirements of Rule 31a-3 under the 1940 Act, the Administrator agrees that all
records that it maintains for the Fund are the property of the Fund and further
agrees to surrender promptly to the Fund any of such records upon the Fund's
request. The Administrator further agrees to preserve for the periods prescribed
by Rule 31a-2 under the 1940 Act the records required to be maintained by
Rule31a-1 under the 1940 Act.
<PAGE>
3. Expenses of the Fund.
(A) Expense Payable by the Fund. The Fund should be responsible for
effecting sales and expenses attributable to its operations, including, without
limitation, custodian fees; legal; auditing; federal and state registration
fees; federal, state and local taxes; commission of sales personnel;
non-affiliated directors' fees; interest on its bank loans; brokerage
commissions; insurance; and non-recurring expense.
(B) Expense Payable by the Administrator. The Administrator assume and
shall pay for maintaining its staff and personal, and shall at its own its own
expense provide the equipment, office space and facilities necessary to perform
its obligations under this agreement. In addition, without limitation:
organization costs, cost of printing proxies, prospectuses, accounting and
pricing costs (including the daily calculation of net asset value), shareholders
reports and notices; cost of supplies and postage; and administrative and
clerical services.
4. Compensation. As compensation for the services rendered, the
facilities furnished and the expenses assumed by the Administrator, the Fund
shall pay to the Administrator at the end of each calendar month a fee at the
annual rate of 0.45% of the Fund's average daily net assets for the first $50
million of average daily net assets and 0.40% of the Fund's average daily net
assets for average daily net assets over $50 million, as determined and computed
in accordance with the description of the method of determination of net asset
value contained in the Fund's Prospectus and Statement of Additional
Information.
5. Fee Reduce and Reimbursements. If the expenses borne by the Fund in
any fiscal year exceed the applicable expense limitations imposed by the
securities regulations of any state in which shares are registered or qualified
for sale to the public, the Administrator will reduced pro rata (but not below
zero) to the extent required by such expense limitation. The Administrator will
bear its pro rata share of any such fee reduction based on the percentage that
the Administrator's fee bears to the total administrative and advisory fees paid
by the Fund to the Administrator and to the investment adviser of the Fund, for
the month and year in which this Agreement becomes effective or terminates,
there shall be an appropriate portion of said fee reduction based on the number
of days that the Agreement is in effect during such month and year,
respectively.
6. Activities of the Administrator. The services of the Administrator
to the Trust hereunder are not to be deemed exclusive, and the Administrator and
any of its affiliates shall be free to render similar services to others.
Subject to and in accordance with the Agreement and Declaration of Trust and
By-Laws of the Trust and to Section 10(a) of the Federal Investment Company Act
of 1940, it is understood that trustees, officers, agents and shareholder of the
Trust are or may be interested in the Administrator or its affiliates as
directors, are or may be interested in the Trust as trustees, officers, agents,
shareholder or otherwise, that the Administrator or its affiliates may be
interested in the Trust as shareholders or otherwise; and that the effect of any
such interests shall be governed by said Agreement and Declaration of Trust, the
By-Laws and the Act.
<PAGE>
7. Limitation of Liability of the Administrator. The administrator
assumes no responsibility under this Agreement other than to render the services
called for hereunder, in good faith, and shall not be responsible for any action
of the Board of Trustees of the Fund. The Administrator shall not be liable to
the Fund or to any shareholder of the Fund for any act or omission in the course
of, or in connection with, rendering services hereunder or for any losses that
may be sustained in the purchase, holding or sale of any security.
8. Duration and termination. This Agreement will remain in effect for
two years from the date of its execution and from year to year thereafter so
long as specifically approved annually, (1) by vote of a majority of the
trustees of the Fund who are not parties to this Agreement or interested persons
of such parties, cast in person at a meeting called for that purpose, and (2)
either by vote of the holders of a majority of the outstanding voting securities
of the Fund or by a majority vote of the Fund's Board of Trustees.
This Agreement shall terminate automatically in the event of its
assignment by the Advisor and shall not be assignable by the Fund without the
consent of the Advisor. This Agreement may also be terminated at any time,
without the payment of penalty, by the Fund or by the Advisor on sixty (60)
days' written notice addressed to the other party at its principal place of
business.
9. Amendment of This Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no material amendment of this Agreement
shall be effective until approved by (i) the Board of Trustees of the Fund, or
by a vote of the holders or a majority of the outstanding voting securities of
the Fund, and (ii) a majority of those trustees of the Fund who are not parties
to this Agreement or interested persons of any such party cast in person at a
meeting called for the purpose of voting on such approval.
10. Delegation of Authority. Administrator may from time to time in its
sole discretion delegate some or all of its duties hereunder to any affiliate(s)
or other entity, which shall perform such functions as the agent of
Administrator. To the extent of such delegation, the term "Administrator" in
this Agreement shall be deemed to refer to both Administrator and such
affiliate(s) or other entity or any of them, as the context may indicate;
provided that the assignment and delegation of any of Administrator duties under
this section shall not relieve Administrator of any of its responsibilities or
liabilities under this Agreement.
11. Name of Company. The Fund may use the name "Upright" only for so
long as this Agreement or any extension, renewal or amendment hereof remains in
effect, including any similar agreement with any organization which shall have
succeeded to the business of the Advisor. At such time as such an agreement
shall no longer be in effect, the Fund will (to the extent that it lawfully can)
cease to use any name derived from Upright Financial Corp., or any successor.
<PAGE>
12. Definitions. As used in this Agreement, the terms "majority of the
outstanding voting securities," "interested person, " and "assignment "shall
have the same meanings as such terms have in the 1940 Act.
13. Severability. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and there respective
successors.
14. Miscellaneous. The captions in this Agreement are included for
convenience of reference only an din no way define or delimit nay of the
provisions hereof or otherwise affect their construction to effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
Attest: Upright Growth Fund
Chaur Nan Yeh BY /s/ David Y.S. Chiueh
- -------------------------- -----------------------------
Vice President of the Fund President
Upright Financial Corporation
Attest:
/s/ Chaur Nan Yeh BY /s/ David Y.S. Chiueh
- -------------------------- -----------------------------
Vice President of the Fund President
<PAGE>
TRANSFER AGENT AGREEMENT
THIS AGREEMENT is made and entered into this 30th day of July, 1998, by
and between Upright Finaicial Corp. ("Administrator") and Upright Investments
Trust (the "Fund") a registered investment advisor (the "Fund"), and Maxus
Information Systems, Inc. DBA Mutual Shareholder Services, an Ohio corporation
("MSS").
RECITALS:
A. The Fund is a diversified, open-end management investment company
registered with the United States Securities and Exchange Commission under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
B. The Fund desires to appoint MSS as its transfer agent and dividend
disbursing and redemption agent, and MSS desires to accept such appointment.
AGREEMENTS:
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereby agree as follows:
1. DUTIES OF MSS.
1.01 Subject to the terms and conditions set forth in this Agreement,
the Fund hereby employs and appoints MSS to act, and MSS agrees to act, as
transfer agent for the Fund's authorized and issued shares of beneficial
interest of each class of each portfolio of the Fund (the "Shares"), and as
dividend disbursing and redemption agent for the Fund.
1.02 MSS agrees that it will perform the following services:
(a) In accordance with procedures established from time to
time by agreement between the Fund and MSS, MSS shall:
(i) Receive for acceptance, orders for the purchase of
Shares, and promptly deliver payment and appropriate
documentation therefore to the Custodian of the Fund
authorized by the Board of Directors of the Fund (the
"Custodian");
(ii) Pursuant to purchase orders, issue the appropriate
number of Shares and hold such Shares in the appropriate
Shareholder account;
(iii) Receive for acceptance redemption requests and
redemption directions and deliver the appropriate
documentation therefore to the Custodian;
<PAGE>
(iv) At the appropriate time as and when it receives
monies paid to it by the Custodian with respect to any
redemption, pay over or cause to be paid over in the
appropriate manner such monies as instructed by the redeeming
Shareholders;
(v) Effect transfers of Shares by the registered owners
thereof upon receipt of appropriate instructions;
(vi) Prepare and transmit payments for dividends and
distributions declared by the Fund;
(vii) Maintain records of account for and advise the
Fund and its Shareholders as to the foregoing; and
(viii) Record the issuance of shares of the Fund and
maintain pursuant to SEC Rule 17Ad-10(e) a record of the total
number of shares of the Fund which are authorized, based upon
data provided to it by the Fund, and issued and outstanding.
MSS shall also provide the Fund on a regular basis with the
total number of shares which are authorized and issued and
outstanding and shall have no obligation, when recording the
issuance of shares, to monitor the issuance of such shares or
to take cognizance of any laws relating to the issue or sale
of such shares, which functions shall be the sole
responsibility of the Fund.
(b) In addition, MSS shall perform all of the customary
services of a transfer agent, dividend disbursing and redemption agent,
including but not limited to: maintaining all Shareholder accounts,
preparing Shareholder meeting lists, mailing proxies, receiving and
tabulating proxies, mailing Shareholder reports and prospectuses to
current Shareholders, withholding taxes on U.S. resident and
non-resident alien accounts, preparing and filing U.S. Treasury
Department Forms 1099 and other appropriate forms required with respect
to dividends and distributions by federal authorities for all
Shareholders, preparing and mailing confirmation forms and statements
of account to Shareholders for all purchases and redemptions of Shares
and other confirmable transactions in Shareholder accounts, preparing
and mailing activity statements for Shareholders, and providing
Shareholder account information and provide a system and reports which
will enable the Fund to monitor the total number of Shares sold in each
State.
Procedures applicable to certain of these services may be established
from time to time by agreement between the Fund and MSS.
2. FEES AND EXPENSES
2.01 In consideration of the services to be performed by MSS pursuant
to this Agreement, the Administrator not the Fund agrees to pay MSS the fees
set forth in the fee schedule attached hereto as Exhibit "A".
<PAGE>
2.02 In addition to the fee paid under Section 2.01 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 expenses incurred by MSS at the request or with the consent
of the Fund will be reimbursed by the Fund.
2.03 The Fund agrees to pay all fees and reimbursable expenses within
five days following the receipt of the respective billing notice. Postage for
mailing of dividends, proxies, Fund reports and other mailings to all
shareholder accounts shall be advanced to MSS by the Fund at least seven days
prior to the mailing date of such materials.
3. REPRESENTATIONS AND WARRANTIES OF MSS
MSS represents and warrants to the Fund that:
3.01 It is a corporation duly organized and existing and in good
standing under the laws of the State of Ohio.
3.02 It is duly qualified to carry on its business in the State of
Ohio.
3.03 It is empowered under applicable laws and by its charter and
by-laws to enter into and perform this Agreement.
3.04 All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement.
3.05 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.
3.06 MSS is duly registered as a transfer agent under the Securities
Act of 1934 and shall continue to be registered throughout the remainder of this
Agreement.
4. REPRESENTATIONS AND WARRANTIES OF THE FUND
The Fund represents and warrants to MSS that:
4.01 It is a Corporation duly organized and existing and in good
standing under the laws of New Jersey.
4.02 It is empowered under applicable laws and by its charter and
By-Laws to enter into and perform this Agreement.
4.03 All corporate proceedings required by said charter and By-Laws
have been taken to authorize it to enter into and perform this Agreement.
<PAGE>
4.04 It is an open-end and diversified management investment company
registered under the 1940 Act.
4.05 A registration statement under the Securities Act of 1933 is
currently or will become effective and will remain effective, and appropriate
state securities law filings as required, have been or will be made and will
continue to be made, with respect to all Shares of the Fund being offered for
sale.
5. INDEMNIFICATION
5.01 MSS shall not be responsible for, and the Fund shall indemnify and
hold MSS harmless from and against, any and all losses, damages, costs, charges,
counsel fees, payments, expenses and liability arising out of or attributable
to:
(a) All actions of MSS or its agents or subcontractors
required to be taken pursuant to this Agreement, provided that such
actions are taken in good faith and without gross negligence or willful
misconduct.
(b) The Fund's refusal or failure to comply with the terms of
this Agreement, or which arise out of the Fund's lack good faith, gross
negligence or willful misconduct or which arise out of the breach of
any representation or warranty of the Fund hereunder.
(c) The reliance on or use by MSS or its agents or
subcontractors of information, records and documents which (i) are
received by MSS or its agents or subcontractors and furnished to it by
or on behalf of the Fund, and (ii) have been prepared and/or maintained
by the Fund or any other person or firm on behalf of the Fund.
(d) The reliance on, or the carrying out by MSS or its agents
or subcontractors of, any instructions or requests of the Fund.
(e) The offer or sale of Shares in violation of any
requirement under the federal securities laws or regulations or the
securities laws or regulations of any state that such Shares be
registered in such state or in violation of any stop order or other
determination or ruling by any federal agency or any state with respect
to the offer or sale of such Shares in such state.
5.02 MSS shall indemnify and hold the Fund harmless from and against
any and all losses, damages, costs, charges, counsel fees, payments, expenses
and liability arising out of or attributable to any action or failure or
omission to act by MSS as a result of MSS's lack of good faith, gross or
ordinary negligence or willful misconduct.
<PAGE>
5.03 At any time MSS may apply to any officer of the Fund for
instructions, and may consult with legal counsel with respect to any matter
arising in connection with the services to be performed by MSS under this
Agreement, and MSS and its agents or subcontractors shall not be liable and
shall be indemnified by the Fund for any action taken or omitted by it in
reliance upon such instructions or upon the opinion of such counsel. MSS, its
agents and subcontractors shall be protected and indemnified in acting upon any
paper or document furnished by or on behalf of the Fund, reasonably believed to
be genuine and to have been signed by the proper person or persons, or upon any
instruction, information, data, records or documents provided MSS or its agents
or subcontractors by machine readable input, telex, CRT data entry or other
similar means authorized by the Fund, and shall not be held to have notice of
any change of authority of any person, until receipt of written notice thereof
from the Fund. MSS, its agents and subcontractors shall also be protected and
indemnified in recognizing stock certificates which are reasonably believed to
bear the proper manual or facsimile signatures of the officers of the Fund, and
the proper countersignature of any former transfer agent or registrar, or of a
co-transfer agent or co-registrar.
5.04 In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable for damages to the
other for any damages resulting from such failure to perform or otherwise from
such causes.
5.05 Neither party to this Agreement shall be liable to the other party
for consequential damages under any provision of this Agreement or for any act
or failure to act hereunder.
5.06 Upon the assertion of a claim for which either party may be
required to indemnify the other, the party of seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The party
who may be required to indemnify shall have the option to participate with the
party seeking indemnification the defense of such claim. The party seeking
indemnification shall in no case confess any claim or make any compromise in any
case in which the other party may be required to indemnify it except with the
other party's prior written consent.
6. COVENANTS OF THE FUND AND MSS
6.01 The Fund shall promptly furnish to MSS a certified copy of the
resolution of the Board of Directors of the Fund authorizing the appointment of
MSS and the execution and delivery of this Agreement.
6.02 MSS hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Fund for safekeeping of stock
certificates, check forms and facsimile signature imprinting devices, if any;
and for the preparation or use, and for keeping account of, such certificates,
forms and devices.
<PAGE>
6.03 MSS shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable. To the extent
required by Section 31 of the 1940 Act, as amended, and the Rules thereunder,
MSS agrees that all such records prepared or maintained by MSS relating to the
services to be performed by MSS hereunder are the property of the Fund and will
be preserved, maintained and made available in accordance with such Section and
Rules, and will be surrendered promptly to the Fund on and in accordance with
its request.
6.04 MSS and the Fund agree that all books, records, information and
data pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this Agreement shall
remain confidential, and shall not be voluntarily disclosed to any other person,
except as may be required by law.
6.05 In case of any requests or demands for the inspection of the
Shareholder records of the Fund, MSS will endeavor to notify the Fund and to
secure instructions from an authorized officer of the Fund as to such
inspection. MSS reserves the right, however, to exhibit the Shareholder records
to any person whenever it is advised by its counsel that it may be held liable
for the failure to exhibit the Shareholder records to such person, and shall
promptly notify the Fund of any unusual request to inspect or copy the
shareholder records of the Fund or the receipt of any other unusual request to
inspect, copy or produce the records of the Fund.
7. TERM OF AGREEMENT
7.01 This Agreement shall become effective as of the date hereof and
shall remain in force for a period of three years; provided, however, that each
party to this Agreement have the option to terminate the Agreement without
penalty, upon 90 days prior written notice.
7.02 Should the Fund exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be borne by
the Fund. Additionally, MSS reserves the right to charge for any other
reasonable expenses associated with such termination.
8. MISCELLANEOUS
8.01 Neither this Agreement nor any rights or obligations hereunder may
be assigned by either party without the written consent of the other party. This
Agreement shall inure to the benefit of and be binding upon the parties and
their respective permitted successors and assigns.
8.02 This Agreement may be amended or modified by a written agreement
executed by both parties and authorized or approved by a resolution of the Board
of Directors of the Fund.
<PAGE>
8.03 The provisions of this Agreement shall be construed and
interpreted in accordance with the laws of the State of Ohio as at the time in
effect and the applicable provisions of the 1940 Act. To the extent that the
applicable law of the State of Ohio, or any of the provisions here in, conflict
with the applicable provisions of the 1940 Act, the latter shall control.
8.04 This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
matter hereof whether oral or written.
8.05 All notices and other communications hereunder shall be in
writing, shall be deemed to have been given when received or when sent by telex
or facsimile, and shall be given to the following addresses (or such other
addresses as to which notice is given):
To the Fund and Administrator: To MSS:
Upright Growth Fund Maxus Information Systems, Inc.
615 W. Mount Pleasant Ave. DBA Mutual Shareholder Services
Livingston, NJ 07039 1301 East Ninth Street, 36th Floor
Cleveland, OH 44114
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
Upright Growth Fund MAXUS INFORMATION SYSTEMS, INC.
By: /s/ David Y.S. Chiuech By: /s/ Gregory B. Getts
- --------------------------- -------------------------
David Chiuech Gregory B. Getts
Its: President Its: President
Upright Financial Corp.
By: /S/ David Y.S. Chiueh
- -------------------------
It: President
<PAGE>
Exhibit A
Shareholder Servicing Fees
9.25 annual fee per shareholder with a
min of $775.00 charge per month
Blue Sky Servicing Fees (optional)
12.00 per state per month
Calculated monthly charges for a small new fund
Value Approx. Monthly Fee
No of Shareholders: 200 775
775
Less 60% discount* 465
Discounted fee 310
Annual Fee 3,720
No of Shareholders: 200 775 775 775
------ ------ ------
775 775 775
Less 80%, 70%, 60% discount* 620 543 465
------ ------ ------
Discounted fee 155 233 310
Annual Fee 1,860 2,790 3,720
* Discount calculated as follows:
Discount Net assets of Fund
80% - 250,000
70% 250,000 500,000
60% 500,000 1,000,000
50% 1,000,000 2,000,000
45% 2,000,000 3,000,000
40% 3,000,000 4,000,000
35% 4,000,000 5,000,000
30% 5,000,000 6,000,000
25% 6,000,000 7,000,000
20% 7,000,000 8,000,000
15% 8,000,000 9,000,000
10% 9,000,000 10,000,000
5% 10,000,000 11,000,000
0% 11,000,000 -
<PAGE>
CUSTODY AGREEMENT
THIS AGREEMENT, is made as of 06/27, 1998, by and between Upright
Investments Trust, a business trust organized under the laws of the State of
Delaware (the "Trust"), and THE FIFTH THIRD BANK, a banking company organized
under the laws of the State of Ohio (the "Custodian").
WITNESSETH:
WHEREAS, the Trust desires that the Securities and cash of each of the
investment portfolios identified in Exhibit A hereto (such investment portfolios
and individually referred to herein as a "Fund" and collectively as the
"Funds"), be held and administered by the Custodian pursuant to this Agreement;
and
WHEREAS, the Trust is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Custodian represents that it is a bank having the
qualifications prescribed in Section 26(a)(i) of the 1940 Act;
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Trust and the Custodian hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
1.1 "Authorized Person" means any Officer or other person duly
authorized by resolution of the Board of Trustees to give Oral Instructions and
Written Instructions on behalf of the Trust and named in Exhibit B hereto or in
such resolutions of the Board of Trustees, certified by an Officer, as may be
received by the Custodian from time to time.
1.2 "Board of Trustees" shall mean the Trustees from time to time
serving under the Trust's Agreement and Declaration of Trust, dated 03/04, 1998,
as from time to time amended.
1.3 "Book-Entry System" shall mean a federal book-entry system as
provided in Subpart O of Treasury Circular No. 300, 31 CFR 306, in Subpart B of
31 CFR Part 350, or in such book-entry regulations of federal agencies as are
substantially in the form of such Subpart O.
1.4 "Business Day" shall mean any day recognized as a settlement day by
The New York Stock Exchange, Inc. and any other day for which the Fund computes
the net asset value of the Fund.
1.5 "NASD" shall mean The National Association of Securities Dealers,
Inc.
1.6 "Officer" shall mean the President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer, or any Assistant Treasurer of
the Trust.
1.7 "Oral Instructions" shall mean instructions orally transmitted to
and accepted by the Custodian because such instructions are: (i) reasonably
believed by the Custodian to have been given by an Authorized Person, (ii)
recorded and kept among the records of the Custodian made in the ordinary course
of business and (iii) orally confirmed by the Custodian. The Trust shall cause
all Oral Instructions to be confirmed by Written Instructions. If such Written
Instructions confirming Oral Instructions are not received by the Custodian
prior to a transaction, it shall in no way affect the validity of the
transaction or the authorization thereof by the Trust. If Oral Instructions vary
from the Written Instructions which purport to confirm them, the Custodian shall
notify the Trust of such variance but such Oral Instructions will govern unless
the Custodian has not yet acted.
1.8 "Custody Account" shall mean any account in the name of the Trust,
which is provided for in Section 3.2 below.
1.9 "Proper Instructions" shall mean Oral Instructions or Written
Instructions. Proper Instructions may be continuing Written Instructions when
deemed appropriate by both parties.
<PAGE>
1.10 "Securities Depository" shall mean The Participants Trust Company
or The Depository Trust Company and (provided that Custodian shall have received
a copy of a resolution of the Board of Trustees, certified by an Officer,
specifically approving the use of such clearing agency as a depository for the
Trust) any other clearing agency registered with the Securities and Exchange
Commission under Section 17A of the Securities and Exchange Act of 1934 (the
"1934 Act"), which acts as a system for the central handling of Securities where
all Securities of any particular class or series of an issuer deposited within
the system are treated as fungible and may be transferred or pledged by
bookkeeping entry without physical delivery of the Securities.
1.11 "Securities" shall include, without limitation, common and
preferred stocks, bonds, call options, put options, debentures, notes, bank
certificates of deposit, bankers' acceptances, mortgage-backed securities, other
money market instruments or other obligations, and any certificates, receipts,
warrants or other instruments or documents representing rights to receive,
purchase or subscribe for the same, or evidencing or representing any other
rights or interests therein, or any similar property or assets that the
Custodian has the facilities to clear and to service.
1.12 "Shares" shall mean the units of beneficial interest issued by the
Trust.
1.13 "Written Instructions" shall mean (i) written communications
actually received by the Custodian and signed by one or more persons as the
Board of Trustees shall have from time to time authorized, or (ii)
communications by telex or any other such system from a person or persons
reasonably believed by the Custodian to be Authorized, or (iii) communications
transmitted electronically through the Institutional Delivery System (IDS), or
any other similar electronic instruction system acceptable to Custodian and
approved by resolutions of the Board of Trustees, a copy of which, certified by
an Officer, shall have been delivered to the Custodian.
ARTICLE II
APPOINTMENT OF CUSTODIAN
2.1 Appointment. The Trust hereby constitutes and appoints the Custodian
as custodian of all Securities and cash owned by or in the possession of the
Trust at any time during the period of this Agreement, provided that such
Securities or cash at all times shall be and remain the property of the Trust.
2.2 Acceptance. The Custodian hereby accepts appointment as such
custodian and agrees to perform the duties thereof as hereinafter set forth and
in accordance with the 1940 Act as amended. Except as specifically set forth
herein, the Custodian shall have no liability and assumes no responsibly for any
non-compliance by the Trust or a Fund of any laws, rules or regulations.
ARTICLE III
CUSTODY OF CASH AND SECURITIES
3.1 Segregation. All Securities and non-cash property held by the
Custodian for the account of the Fund, except Securities maintained in a
Securities Depository or Book-Entry System, shall be physically segregated from
other Securities and non-cash property in the possession of the Custodian and
shall be identified as subject to this Agreement.
3.2 Custody Account. The Custodian shall open and maintain in its trust
department a custody account in the name of each Fund, subject only to draft or
order of the Custodian, in which the Custodian shall enter and carry all
Securities, cash and other assets of the Fund which are delivered to it.
3.3 Appointment of Agents. In its discretion, the Custodian may appoint,
and at any time remove, any domestic bank or trust company, which has been
approved by the Board of Trustees and is qualified to act as a custodian under
the 1940 Act, as sub-custodian to hold Securities and cash of the Funds and to
carry out such other provisions of this Agreement as it may determine, and may
also open and maintain one or more banking accounts with such a bank or trust
company (any such accounts to be in the name of the Custodian and subject only
to its draft or order), provided, however, that the appointment of any such
agent shall not relieve the Custodian of any of its obligations or liabilities
under this Agreement.
3.4 Delivery of Assets to Custodian. The Fund shall deliver, or cause to
be delivered, to the Custodian all of the Fund's Securities, cash and other
assets, including (a) all payments of income, payments of principal and capital
distributions received by the Fund with respect to such Securities, cash or
other assets owned by the Fund at any time during the period of this Agreement,
and (b) all cash received by the Fund for the issuance, at any time during such
period, of Shares. The Custodian shall not be responsible for such Securities,
cash or other assets until actually received by it.
<PAGE>
3.5 Securities Depositories and Book-Entry Systems. The Custodian may
deposit and/or maintain Securities of the Funds in a Securities Depository or in
a Book-Entry System, subject to the following provisions:
(a) Prior to a deposit of Securities of the Funds in any Securities
Depository or Book-Entry System, the Fund shall deliver to the Custodian a
resolution of the Board of Trustees, certified by an Officer, authorizing and
instructing the Custodian on an on-going basis to deposit in such Securities
Depository or Book-Entry System all Securities eligible for deposit therein and
to make use of such Securities Depository or Book-Entry System to the extent
possible and practical in connection with its performance hereunder, including,
without limitation, in connection with settlements of purchases and sales of
Securities, loans of Securities, and deliveries and returns of collateral
consisting of Securities. So long as such Securities Depository or Book-Entry
System shall continue to be employed for the deposit of Securities of the Funds,
the Trust shall annually re-adopt such resolution and deliver a copy thereof,
certified by an Officer, to the Custodian.
(b) Securities of the Fund kept in a Book-Entry System or Securities
Depository shall be kept in an account ("Depository Account") of the Custodian
in such Book-Entry System or Securities Depository which includes only assets
held by the Custodian as a fiduciary, custodian or otherwise for customers.
(c) The records of the Custodian and the Custodian's account on the
books of the Book-Entry System and Securities Depository as the case may be,
with respect to Securities of a Fund maintained in a Book-Entry System or
Securities Depository shall, by book-entry, or otherwise identify such
Securities as belonging to the Fund.
(d) If Securities purchases by the Fund are to be held in a Book-Entry
System or Securities Depository, the Custodian shall pay for such Securities
upon (i) receipt of advice from the Book-Entry System or Securities Depository
that such Securities have been transferred to the Depository Account, and (ii)
the making of an entry on the records of the Custodian to reflect such payment
and transfer for the account of the Fund. If Securities sold by the Fund are
held in a Book-Entry System or Securities Depository, the Custodian shall
transfer such Securities upon (i) receipt of advice from the Book-Entry System
or Securities depository that payment for such Securities has been transferred
to the Depository Account, and (ii) the making of an entry on the records of the
Custodian to reflect such transfer and payment for the account of the Fund.
(e) Upon request, the Custodian shall provide the Fund with copies of
any report (obtained by the Custodian from a Book-Entry System or Securities
Depository in which Securities of the Fund is kept) on the internal accounting
controls and procedures for safeguarding Securities deposited in such Book-Entry
System or Securities Depository.
(f) Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Trust for any loss or damage to the Trust
resulting (i) from the use of a Book-Entry System or Securities Depository by
reason of any negligence or willful misconduct on the part of Custodian or any
sub-custodian appointed pursuant to Section 3.3 above or any of its or their
employees, or (ii) from failure of Custodian or any such sub-custodian to
enforce effectively such rights as it may have against a Book-Entry System or
Securities Depository. At its election, the Trust shall be subrogated to the
rights of the Custodian with respect to any claim against a Book-Entry System or
Securities Depository or any other person for any loss or damage to the Funds
arising from the use of such Book-Entry System or Securities Depository, if and
to the extent that the Trust has been made whole for any such loss or damage.
3.6 Disbursement of Moneys from Custody Accounts. Upon receipt of Proper
Instructions, the Custodian shall disburse moneys from a Fund Custody Account
but only in the following cases:
(a) For the purchase of Securities for the Fund but only upon compliance
with Section 4.1 of this Agreement and only (i) in the case of Securities (other
than options on Securities, futures contracts and options on futures contracts),
against the delivery to the Custodian (or any sub-custodian appointed pursuant
to Section 3.3 above) of such Securities registered as provided in Section 3.9
below in proper form for transfer, or if the purchase of such Securities is
effected through a Book-Entry System or Securities Depository, in accordance
with the conditions set forth in Section 3.5 above; (ii) in the case of options
on Securities, against delivery to the Custodian (or such sub-custodian) of such
receipts as are required by the customs prevailing among dealers in such
options; (iii) in the case of futures contracts and options on futures
contracts, against delivery to the Custodian (or such sub-custodian) of evidence
of title thereto in favor of the Trust or any nominee referred to in Section 3.9
below; and (iv) in the case of repurchase or reverse repurchase agreements
entered into between the Trust and a bank which is a member of the Federal
Reserve System or between the Trust and a primary dealer in U.S. Government
securities, against delivery of the purchased Securities either in certificate
form or through an entry crediting the Custodian's account at a Book-Entry
System or Securities Depository for the account of the Fund with such
Securities;
<PAGE>
(b) In connection with the conversion, exchange or surrender, as set
forth in Section 3.7(f) below, of Securities owned by the Fund;
(c) For the payment of any dividends or capital gain distributions
declared by the Fund;
(d) In payment of the redemption price of Shares as provided in Section
5.1 below;
(e) For the payment of any expense or liability incurred by the Trust,
including but not limited to the following payments for the account of a Fund:
interest; taxes; administration, investment management, investment advisory,
accounting, auditing, transfer agent, custodian, trustee and legal fees; and
other operating expenses of a Fund; in all cases, whether or not such expenses
are to be in whole or in part capitalized or treated as deferred expenses;
(f) For transfer in accordance with the provisions of any agreement
among the Trust, the Custodian and a broker-dealer registered under the 1934 Act
and a member of the NASD, relating to compliance with rules of The Options
Clearing Corporation and of any registered national securities exchange (or of
any similar organization or organizations) regarding escrow or other
arrangements in connection with transactions by the Trust;
(g) For transfer in accordance with the provisions of any agreement
among the Trust, the Custodian, and a futures commission merchant registered
under the Commodity Exchange Act, relating to compliance with the rules of the
Commodity Futures Trading Commission and/or any contract market (or any similar
organization or organizations) regarding account deposits in connection with
transactions by the Trust;
(h) For the funding of any uncertificated time deposit or other
interest-bearing account with any banking institution (including the Custodian),
which deposit or account has a term of one year or less; and
(i) For any other proper purposes, but only upon receipt, in addition to
Proper Instructions, of a copy of a resolution of the Board of Trustees,
certified by an Officer, specifying the amount and purpose of such payment,
declaring such purpose to be a proper corporate purpose, and naming the person
or persons to whom such payment is to be made.
3.7 Delivery of Securities from Fund Custody Accounts. Upon receipt of
Proper Instructions, the Custodian shall release and deliver Securities from a
Custody Account but only in the following cases:
(a) Upon the sale of Securities for the account of a Fund but only
against receipt of payment therefor in cash, by certified or cashiers check or
bank credit;
(b) In the case of a sale effected through a Book-Entry System or
Securities Depository, in accordance with the provisions of Section 3.5 above;
(c) To an Offeror's depository agent in connection with tender or other
similar offers for Securities of a Fund; provided that, in any such case, the
cash or other consideration is to be delivered to the Custodian;
(d) To the issuer thereof or its agent (i) for transfer into the name of
the Trust, the Custodian or any sub-custodian appointed pursuant to Section 3.3
above, or of any nominee or nominees of any of the foregoing, or (ii) for
exchange for a different number of certificates or other evidence representing
the same aggregate face amount or number of units; provided that, in any such
case, the new Securities are to be delivered to the Custodian;
(e) To the broker selling Securities, for examination in accordance with
the "street delivery" custom;
(f) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of the issuer of
such Securities, or pursuant to provisions for conversion contained in such
Securities, or pursuant to any deposit agreement, including surrender or receipt
of underlying Securities in connection with the issuance or cancellation of
depository receipts; provided that, in any such case, the new Securities and
cash, if any, are to be delivered to the Custodian;
<PAGE>
(g) Upon receipt of payment therefor pursuant to any repurchase or
reverse repurchase agreement entered into by a Fund;
(h) In the case of warrants, rights or similar Securities, upon the
exercise thereof, provided that, in any such case, the new Securities and cash,
if any, are to be delivered to the Custodian;
(i) For delivery in connection with any loans of Securities of a Fund,
but only against receipt of such collateral as the Trust shall have specified to
the Custodian in Proper Instructions;
(j) For delivery as security in connection with any borrowings by the
Trust on behalf of a Fund requiring a pledge of assets by such Fund, but only
against receipt by the Custodian of the amounts borrowed;
(k) Pursuant to any authorized plan of liquidation, reorganization,
merger, consolidation or recapitalization of the Trust or a Fund;
(l) For delivery in accordance with the provisions of any agreement
among the Trust, the Custodian and a broker-dealer registered under the 1934 Act
and a member of the NASD, relating to compliance with the rules of The Options
Clearing Corporation and of any registered national securities exchange (or of
any similar organization or organizations) regarding escrow or other
arrangements in connection with transactions by the Trust on behalf of a Fund;
(m) For delivery in accordance with the provisions of any agreement
among the Trust on behalf of a Fund, the Custodian, and a futures commission
merchant registered under the Commodity Exchange Act, relating to compliance
with the rules of the Commodity Futures Trading Commission and/or any contract
market (or any similar organization or organizations) regarding account deposits
in connection with transactions by the Trust on behalf of a Fund; or
(n) For any other proper corporate purposes, but only upon receipt, in
addition to Proper Instructions, of a copy of a resolution of the Board of
Trustees, certified by an Officer, specifying the Securities to be delivered,
setting forth the purpose for which such delivery is to be made, declaring such
purpose to be a proper corporate purpose, and naming the person or persons to
whom delivery of such Securities shall be made.
3.8 Actions Not Requiring Proper Instructions. Unless otherwise
instructed by the Trust, the Custodian shall with respect to all Securities held
for a Fund;
(a) Subject to Section 7.4 below, collect on a timely basis all income
and other payments to which the Trust is entitled either by law or pursuant to
custom in the securities business;
(b) Present for payment and, subject to Section 7.4 below, collect on a
timely basis the amount payable upon all Securities which may mature or be
called, redeemed, or retired, or otherwise become payable;
(c) Endorse for collection, in the name of the Trust, checks, drafts and
other negotiable instruments;
(d) Surrender interim receipts or Securities in temporary form for
Securities in definitive form;
(e) Execute, as custodian, any necessary declarations or certificates of
ownership under the federal income tax laws or the laws or regulations of any
other taxing authority now or hereafter in effect, and prepare and submit
reports to the Internal Revenue Service ("IRS") and to the Trust at such time,
in such manner and containing such information as is prescribed by the IRS;
(f) Hold for a Fund, either directly or, with respect to Securities held
therein, through a Book-Entry System or Securities Depository, all rights and
similar securities issued with respect to Securities of the Fund; and
(g) In general, and except as otherwise directed in Proper Instructions,
attend to all non-discretionary details in connection with sale, exchange,
substitution, purchase, transfer and other dealings with Securities and assets
of the Fund.
<PAGE>
3.9 Registration and Transfer of Securities. All Securities held for a
Fund that are issued or issuable only in bearer form shall be held by the
Custodian in that form, provided that any such Securities shall be held in a
Book-Entry System for the account of the Trust on behalf of a Fund, if eligible
therefor. All other Securities held for a Fund may be registered in the name of
the Trust on behalf of such Fund, the Custodian, or any sub-custodian appointed
pursuant to Section 3.3 above, or in the name of any nominee of any of them, or
in the name of a Book-Entry System, Securities Depository or any nominee of
either thereof; provided, however, that such Securities are held specifically
for the account of the Trust on behalf of a Fund. The Trust shall furnish to the
Custodian appropriate instruments to enable the Custodian to hold or deliver in
proper form for transfer, or to register in the name of any of the nominees
hereinabove referred to or in the name of a Book-Entry System or Securities
Depository, any Securities registered in the name of a Fund.
<PAGE>
3.10 Records. (a) The Custodian shall maintain, by Fund, complete and
accurate records with respect to Securities, cash or other property held for the
Trust, including (i) journals or other records of original entry containing an
itemized daily record in detail of all receipts and deliveries of Securities and
all receipts and disbursements of cash; (ii) ledgers (or other records)
reflecting (A) Securities in transfer, (B) Securities in physical possession,
(C) monies and Securities borrowed and monies and Securities loaned (together
with a record of the collateral therefor and substitutions of such collateral),
(D) dividends and interest received, and (E) dividends receivable and interest
accrued; and (iii) canceled checks and bank records related thereto. The
Custodian shall keep such other books and records of the Trust as the Trust
shall reasonably request, or as may be required by the 1940 Act, including, but
not limited to Section 3.1 and Rule 31a-1 and Rule 31a-2 promulgated thereunder.
(b) All such books and records maintained by the Custodian shall (i) be
maintained in a form acceptable to the Trust and in compliance with rules and
regulations of the Securities and Exchange Commission, (ii) be the property of
the Trust and at all times during the regular business hours of the Custodian be
made available upon request for inspection by duly authorized officers,
employees or agents of the Trust and employees or agents of the Securities and
Exchange Commission, and (iii) if required to be maintained by Rule 31a-1 under
the 1940 Act, be preserved for the periods prescribed in Rule 31a-2 under the
1940 Act.
3.11 Fund Reports by Custodian. The Custodian shall furnish the Trust
with a daily activity statement by Fund and a summary of all transfers to or
from the Custody Account on the day following such transfers. At least monthly
and from time to time, the Custodian shall furnish the Trust with a detailed
statement, by Fund, of the Securities and moneys held for the Trust under this
Agreement.
3.12 Other Reports by Custodian. The Custodian shall provide the Trust
with such reports, as the Trust may reasonably request from time to time, on the
internal accounting controls and procedures for safeguarding Securities, which
are employed by the Custodian or any sub-custodian appointed pursuant to Section
3.3 above.
3.13 Proxies and Other Materials. The Custodian shall cause all proxies
if any, relating to Securities which are not registered in the name of a Fund,
to be promptly executed by the registered holder of such Securities, without
indication of the manner in which such proxies are to be voted, and shall
include all other proxy materials, if any, promptly deliver to the Trust such
proxies, all proxy soliciting materials, which should include all other proxy
materials, if any, and all notices to such Securities.
3.14 Information on Corporate Actions. Custodian will promptly notify
the Trust of corporate actions, limited to those Securities registered in
nominee name and to those Securities held at a Depository or sub-Custodian
acting as agent for Custodian. Custodian will be responsible only if the notice
of such corporate actions is published by the Financial Daily Card Service, J.J.
Kenny Called Bond Service, DTC, or received by first class mail from the agent.
For market announcements not yet received and distributed by Custodian's
services, Trust will inform its custody representative with appropriate
instructions. Custodian will, upon receipt of Trust's response within the
required deadline, affect such action for receipt or payment for the Trust. For
those responses received after the deadline, Custodian will affect such action
for receipt or payment, subject to the limitations of the agent(s) affecting
such actions. Custodian will promptly notify Trust for put options only if the
notice is received by first class mail from the agent. The Trust will provide or
cause to be provided to Custodian with all relevant information contained in the
prospectus for any security which has unique put/option provisions and provide
Custodian with specific tender instructions at least ten business days prior to
the beginning date of the tender period.
ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
4.1 Purchase of Securities. Promptly upon each purchase of Securities
for the Trust, Written Instructions shall be delivered to the Custodian,
specifying (a) the name of the issuer or writer of such Securities, and the
title or other description thereof, (b) the number of shares, principal amount
(and accrued interest, if any) or other units purchased, (c) the date of
purchase and settlement, (d) the purchase price per unit, (e) the total amount
payable upon such purchase, and (f) the name of the person to whom such amount
is payable. The Custodian shall upon receipt of such Securities purchased by a
Fund pay out of the moneys held for the account of such Fund the total amount
specified in such Written Instructions to the person named therein. The
Custodian shall not be under any obligation to pay out moneys to cover the cost
of a purchase of Securities for a Fund, if in the relevant Custody Account there
is insufficient cash available to the Fund for which such purchase was made.
4.2 Liability for Payment in Advance of Receipt of Securities Purchased.
In any and every case where payment for the purchase of Securities for a Fund is
made by the Custodian in advance of receipt for the account of the Fund of the
Securities purchased but in the absence of specific Written or Oral Instructions
to so pay in advance, the Custodian shall be liable to the Fund for such
Securities to the same extent as if the Securities had been received by the
Custodian.
<PAGE>
4.3 Sale of Securities. Promptly upon each sale of Securities by a Fund,
Written Instructions shall be delivered to the Custodian, specifying (a) the
name of the issuer or writer of such Securities, and the title or other
description thereof, (b) the number of shares, principal amount (and accrued
interest, if any), or other units sold, (c) the date of sale and settlement (d)
the sale price per unit, (e) the total amount payable upon such sale, and (f)
the person to whom such Securities are to be delivered. Upon receipt of the
total amount payable to the Trust as specified in such Written Instructions, the
Custodian shall deliver such Securities to the person specified in such Written
Instructions. Subject to the foregoing, the Custodian may accept payment in such
form as shall be satisfactory to it, and may deliver Securities and arrange for
payment in accordance with the customs prevailing among dealers in Securities.
4.4 Delivery of Securities Sold. Notwithstanding Section 4.3 above or
any other provision of this Agreement, the Custodian, when instructed to deliver
Securities against payment, shall be entitled, if in accordance with generally
accepted market practice, to deliver such Securities prior to actual receipt of
final payment therefor. In any such case, the Trust shall bear the risk that
final payment for such Securities may not be made or that such Securities may be
returned or otherwise held or disposed of by or through the person to whom they
were delivered, and the Custodian shall have no liability for any of the
foregoing.
4.5 Payment for Securities Sold, etc. In its sole discretion and from
time to time, the Custodian may credit the relevant Custody Account, prior to
actual receipt of final payment thereof, with (i) proceeds from the sale of
Securities which it has been instructed to deliver against payment, (ii)
proceeds from the redemption of Securities or other assets of the Trust, and
(iii) income from cash, Securities or other assets of the Trust. Any such credit
shall be conditional upon actual receipt by Custodian of final payment and may
be reversed if final payment is not actually received in full. The Custodian
may, in its sole discretion and from time to time, permit the Trust to use funds
so credited to its Custody Account in anticipation of actual receipt of final
payment. Any such funds shall be repayable immediately upon demand made by the
Custodian at any time prior to the actual receipt of all final payments in
anticipation of which funds were credited to the Custody Account.
4.6 Advances by Custodian for Settlement. The Custodian may, in its sole
discretion and from time to time, advance funds to the Trust to facilitate the
settlement of a Trust transactions on behalf of a Fund in its Custody Account.
Any such advance shall be repayable immediately upon demand made by Custodian.
ARTICLE V
REDEMPTION OF TRUST SHARES
Transfer of Funds. From such funds as may be available for the purpose
in the relevant Custody Account, and upon receipt of Proper Instructions
specifying that the funds are required to redeem Shares of a Fund, the Custodian
shall wire each amount specified in such Proper Instructions to or through such
bank as the Trust may designate with respect to such amount in such Proper
Instructions. Upon effecting payment or distribution in accordance with proper
Instruction, the Custodian shall not be under any obligation or have any
responsibility thereafter with respect to any such paying bank.
ARTICLE VI
SEGREGATED ACCOUNTS
Upon receipt of Proper Instructions, the Custodian shall establish and
maintain a segregated account or accounts for and on behalf of each Fund, into
which account or accounts may be transferred cash and/or Securities, including
Securities maintained in a Depository Account,
(a) in accordance with the provisions of any agreement among the Trust,
the Custodian and a broker-dealer registered under the 1934 Act and a member of
the NASD (or any futures commission merchant registered under the Commodity
Exchange Act), relating to compliance with the rules of The Options Clearing
Corporation and of any registered national securities exchange (or the Commodity
Futures Trading commission or any registered contract market), or of any similar
organization or organizations, regarding escrow or other arrangements in
connection with transactions by the Trust,
(b) for purposes of segregating cash or Securities in connection with
securities options purchased or written by a Fund or in connection with
financial futures contracts (or options thereon) purchased or sold by a Fund,
(c) which constitute collateral for loans of Securities made by a Fund,
(d) for purposes of compliance by the Trust with requirements under the
1940 Act for the maintenance of segregated accounts by registered investment
companies in connection with reverse repurchase agreements and when-issued,
delayed delivery and firm commitment transactions, and
<PAGE>
(e) for other proper corporate purposes, but only upon receipt of, in
addition to Proper Instructions, a certified copy of a resolution of the Board
of Trustees, certified by an Officer, setting forth the purpose or purposes of
such segregated account and declaring such purposes to be proper corporate
purposes.
ARTICLE VII
CONCERNING THE CUSTODIAN
7.1 Standard of Care. The Custodian shall be held to the exercise of
reasonable care in carrying out its obligations under this Agreement, and shall
be without liability to the Trust for any loss, damage, cost, expense (including
attorneys' fees and disbursements), liability or claim unless such loss,
damages, cost, expense, liability or claim arises from negligence, bad faith or
willful misconduct on its part or on the part of any sub-custodian appointed
pursuant to Section 3.3 above. The Custodian's cumulative liability within a
calendar year shall be limited with respect to the Trust or any party claiming
by, through or on behalf of the Trust for the initial and all subsequent renewal
terms of this Agreement, to the lessor amount of (a) the actual damages
sustained by the Trust, (actual damages for uninvested funds shall be the
overnight Feds fund rate), or (b) to an amount not to exceed one-half of the net
fees paid to the Custodian within the prior three calendar months. The Custodian
shall be entitled to rely on and may act upon advice of counsel on all matters,
and shall be without liability for any action reasonably taken or omitted
pursuant to such advice. The Custodian shall promptly notify the Trust of any
action taken or omitted by the Custodian pursuant to advice of counsel. The
Custodian shall not be under any obligation at any time to ascertain whether the
Trust is in compliance with the 1940 Act, the regulations thereunder, the
provisions of the Trust's charter documents or by-laws, or its investment
objectives and policies as then in effect.
7.2 Actual Collection Required. The Custodian shall not be liable for,
or considered to be the custodian of, any cash belonging to the Trust or any
money represented by a check, draft or other instrument for the payment of
money, until the Custodian or its agents actually receive such cash or collect
on such instrument.
7.3 No Responsibility for title, etc. So long as and to the extent that
it is in the exercise of reasonable care, the Custodian shall not be responsible
for the title, validity or genuineness of any property or evidence of title
thereto received or delivered by it pursuant to this Agreement.
7.4 Limitation on Duty to Collect. Custodian shall not be required to
enforce collection, by legal means or otherwise, of any money or property due
and payable with respect to Securities held for the Trust if such Securities are
in default or payment is not made after due demand or presentation.
7.5 Reliance Upon Documents and Instructions. The Custodian shall be
entitled to rely upon any certificate, notice or other instrument in writing
received by it and reasonably believed by it to be genuine. The Custodian shall
be entitled to rely upon any Oral Instructions and/or any Written Instructions
actually received by it pursuant to this Agreement.
7.6 Express Duties Only. The Custodian shall have no duties or
obligations whatsoever except such duties and obligations as are specifically
set forth in this Agreement, and no covenant or obligation shall be implied in
this Agreement against the Custodian.
7.7 Cooperation. The Custodian shall cooperate with and supply necessary
information, by the Trust, to the entity or entities appointed by the Trust to
keep the books of account of the Trust and/or compute the value of the assets of
the Trust. The Custodian shall take all such reasonable actions as the Trust may
from time to time request to enable the Trust to obtain, from year to year,
favorable opinions from the Trust's independent accountants with respect to the
Custodian's activities hereunder in connection with (a) the preparation of the
Trust's report on Form N-1A and Form N-SAR and any other reports required by the
Securities and Exchange Commission, and (b) the fulfillment by the Trust of any
other requirements of the Securities and Exchange Commission.
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification. The Trust shall indemnify and hold harmless the
Custodian and any sub-custodian appointed pursuant to Section 3.3 above, and any
nominee of the Custodian or of such sub-custodian from and against any loss,
damage, cost, expense (including attorneys' fees and disbursements), liability
(including, without limitation, liability arising under the Securities Act of
1933, the 1934 Act, the 1940 Act, and any state or foreign securities and/or
banking laws) or claim arising directly or indirectly (a) from the fact that
Securities are registered in the name of any such nominee, or (b) from any
action or inaction by the Custodian or such sub-custodian (i) at the request or
direction of or in reliance on the advice of the Trust, or (ii) upon Proper
Instructions, or (c) generally, from the performance of its obligations under
this Agreement or any sub-custody agreement with a sub-custodian appointed
pursuant to Section 3.3 above or, in the case of any such sub-custodian, from
the performance of its obligations under such custody agreement, provided that
neither the Custodian nor any such sub-custodian shall be indemnified and held
harmless from and against any such loss, damage, cost, expense, liability or
claim arising from the Custodian's or such sub-custodian's negligence, bad faith
or willful misconduct.
<PAGE>
8.2 Indemnity to be Provided. If the Trust requests the Custodian to
take any action with respect to Securities, which may, in the opinion of the
custodian, result in the Custodian or its nominee becoming liable for the
payment of money or incurring liability of some other form, the Custodian shall
not be required to take such action until the Trust shall have provided
indemnity therefor to the Custodian in an amount and form satisfactory to the
Custodian.
ARTICLE IX
FORCE MAJEURE
Neither the Custodian nor the Trust shall be liable for any failure or
delay in performance of its obligations under this Agreement arising out of or
caused, directly or indirectly, by circumstances beyond its reasonable control,
including, without limitation, acts of God; earthquakes; fires; floods; wars;
civil or military disturbances; sabotage; strikes; epidemics; riots; power
failures; computer failure and any such circumstances beyond its reasonable
control as may cause interruption, loss or malfunction of utility,
transportation, computer (hardware or software) or telephone communication
service; accidents; labor disputes, acts of civil or military authority;
governmental actions; or inability to obtain labor, material, equipment or
transportation; provided, however, that the Custodian in the event of a failure
or delay shall use its best efforts to ameliorate the effects of any such
failure or delay. Notwithstanding the foregoing, the Custodian shall maintain
sufficient disaster recovery procedures to minimize interruptions.
ARTICLE X
EFFECTIVE PERIOD; TERMINATION
10.1 Effective Period. This Agreement shall become effective as of the
date first set forth above and shall continue in full force and effect until
terminated as hereinafter provided.
10.2 Termination. Either party hereto may terminate this Agreement by
giving to the other party a notice in writing specifying the date of such
termination, which shall be not less than ninety (90) days after the date of the
giving of such notice. If a successor custodian shall have been appointed by the
Board of Trustees, the Custodian shall, upon receipt of a notice of acceptance
by the successor custodian, on such specified date of termination (a) deliver
directly to the successor custodian all Securities (other than Securities held
in a Book-Entry System or Securities Depository) and cash then owned by the
Trust and held by the Custodian as custodian, and (b) transfer any Securities
held in a Book-Entry System or Securities Depository to an account of or for the
benefit of the Trust at the successor custodian, provided that the Trust shall
have paid to the Custodian all fees, expenses and other amounts to the payment
or reimbursement of which it shall then be entitled. Upon such delivery and
transfer, the Custodian shall be relieved of all obligations under this
Agreement. The Trust may at any time immediately terminate this Agreement in the
event of the appointment of a conservator or receiver for the Custodian by
regulatory authorities in the State of Ohio or upon the happening of a like
event at the direction of an appropriate regulatory agency or court of competent
jurisdiction.
10.3 Failure to Appoint Successor Custodian. If a successor custodian is
not designated by the Trust on or before the date of termination specified
pursuant to Section 10.1 above, then the Custodian shall have the right to
deliver to a bank or trust company of its own selection, which is (a) a "Bank"
as defined in the 1940 Act, (b) has aggregate capital, surplus and undivided
profits as shown on its then most recent published report of not less than $25
million, and (c) is doing business in New York, New York, all Securities, cash
and other property held by Custodian under this Agreement and to transfer to an
account of or for the Trust at such bank or trust company all Securities of the
Trust held in a Book-Entry System or Securities Depository. Upon such delivery
and transfer, such bank or trust company shall be the successor custodian under
this Agreement and the Custodian shall be relieved of all obligations under this
Agreement. If, after reasonable inquiry, Custodian cannot find a successor
custodian as contemplated in this Section 10.3, then Custodian shall have the
right to deliver to the Trust all Securities and cash then owned by the Trust
and to transfer any Securities held in a Book-Entry System or Securities
Depository to an account of or for the Trust. Thereafter, the Trust shall be
deemed to be its own custodian with respect to the Trust and the Custodian shall
be relieved of all obligations under this Agreement.
ARTICLE XI
COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to compensation as agreed upon from time
to time by the Trust and the Custodian. The fees and other charges in effect on
the date hereof and applicable to the Funds are set forth in Exhibit B attached
hereto.
<PAGE>
ARTICLE XII
LIMITATION OF LIABILITY
The Trust is a business trust organized under the state of Delaware and
under a Declaration of Trust, to which reference is hereby made a copy of which
is on file at the office of the Secretary of State of Delware as required by
law, and to any and all amendments thereto so filed or hereafter filed. The
obligations of the Trust entered into in the name of the Trust or on behalf
thereof by any of the Trustees, officers, employees or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees, officers, employees, agents or shareholders of the Trust or the Funds
personally, but bind only the assets of the Trust, and all persons dealing with
any of the Funds of the Trust must look solely to the assets of the Trust
belonging to such Fund for the enforcement of any claims against the Trust.
ARTICLE XIII
NOTICES
Unless otherwise specified herein, all demands, notices, instructions,
and other communications to be given hereunder shall be in writing and shall be
sent or delivered to The receipt at the address set forth after its name herein
below:
To the Trust:
Upright Investments Trust c/o
Upright Financial Corp.
615 Eset Mt. Pleasant Ave., Livingston, NJ 07039
Attn: David Chiueh
Telephone: (973) 533-1818
Facsimile: (973) 533-9199
To the Custodian:
The Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Attn: Area Manager - Trust Operations
Telephone: (513) 579-5300
Facsimile: (513) 579-4312
or at such other address as either party shall have provided to the other by
notice given in accordance with this Article XIII. Writing shall include
transmission by or through teletype, facsimile, central processing unit
connection, on-line terminal and magnetic tape.
ARTICLE XIV
MISCELLANEOUS
14.1 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio.
14.2 References to Custodian. The Trust shall not circulate any printed
matter which contains any reference to Custodian without the prior written
approval of Custodian, excepting printed matter contained in the prospectus or
statement of additional information or its registration statement for the Trust
and such other printed matter as merely identifies Custodian as custodian for
the Trust. The Trust shall submit printed matter requiring approval to Custodian
in draft form, allowing sufficient time for review by Custodian and its counsel
prior to any deadline for printing.
14.3 No Waiver. No failure by either party hereto to exercise and no
delay by such party in exercising, any right hereunder shall operate as a waiver
thereof. The exercise by either party hereto of any right hereunder shall not
preclude the exercise of any other right, and the remedies provided herein are
cumulative and not exclusive of any remedies provided at law or in equity.
14.4 Amendments. This Agreement cannot be changed orally and no
amendment to this Agreement shall be effective unless evidenced by an instrument
in writing executed by the parties hereto.
<PAGE>
14.5 Counterparts. This Agreement may be executed in one or more
counterparts, and by the parties hereto on separate counterparts, each of which
shall be deemed an original but all of which together shall constitute but one
and the same instrument.
14.6 Severability. If any provision of this Agreement shall be invalid,
illegal or unenforceable in any respect under any applicable law, the validity,
legality and enforceability of the remaining provisions shall not be affected or
impaired thereby.
14.7 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns; provided, however, that this Agreement shall not be assignable by
either party hereto without the written consent of the other party hereto.
14.8 Headings. The headings of sections in this Agreement are for
convenience of reference only and shall not affect the meaning or construction
of any provision of this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed and delivered in its name and on its behalf by its
representatives thereunto duly authorized, all as of the day and year first
above written.
ATTEST: Upright Investments Trust
- --------------------------- By: ______________________________
/s/ Wellman Wu /s/ David Y.S. Chiueh
Its: President
THE FIFTH THIRD BANK
ATTEST:
- --------------------------- By: ______________________________
/s/ Christine OK /s/ Tracie D. Hoffman
Its: Vice President________________
Dated: June 27, 1998
<PAGE>
EXHIBIT A
TO THE CUSTODY AGREEMENT BETWEEN
UPRIGHT INVESTMENTS TRUST AND THE FIFTH THIRD BANK
June 27, 1998
Name of Fund Date
UPRIGHT GROWTH FUND June 27, 1998
UPRIGHT INVESTMENTS TRUST
By:/s/ David Y.S. Chiueh
Its: David Y.S. Chiueh, President
THE FIFTH THIRD BANK
By: Tracie D. Hoffman
Its: Vice President
Dated: June 27, 1998
<PAGE>
EXHIBIT B
TO THE CUSTODY AGREEMENT BETWEEN
UPRIGHT INVESTMENTS TRUST AND THE FIFTH THIRD BANK
June 27, 1998
AUTHORIZED PERSONS
Set forth below are the names and specimen signatures of the persons
authorized by the Trust to Administer each Custody Account.
Name Signature
David Y.S. Chiueh /S/ David Y.S. Chieuh
Chaur-Nan Yeh /S/ Chaur-Nan Yeh
Yong-jen Lee /S/ Yong-Jen Lee
<PAGE>
SIGNATURE RESOLUTION
RESOLVED, That all of the following officers of UPRIGHT INVESTMENTS TRUST and
any of them, namely the Chairman, President, Vice President, Secretary and
Treasurer, are hereby authorized as signers for the conduct of business for an
on behalf of the Funds with THE FIFTH THIRD BANK:
- ------------------------------------ CHAIRMAN ----------------------------------
David Y.S.Chiueh /S/ David Y.S. Chiueh
- ------------------------------------ PRESIDENT ---------------------------------
Chaur-Nan Yeh /S/ Chaur Nan Yeh
- ---------------------------------- VICE PRESIDENT ------------------------------
- ---------------------------------- VICE PRESIDENT ------------------------------
- ---------------------------------- VICE PRESIDENT ------------------------------
- ---------------------------------- VICE PRESIDENT ------------------------------
David Y.S. Chiueh /S/ David Y.S. Chiueh
- ------------------------------------- TREASURER --------------------------------
Chaur-Nan Yeh /S/ Chaur Nan Yeh
- ------------------------------------- SECRETARY --------------------------------
--------------------------------
In addition, the following Assistant Treasurer is authorized to sign on behalf
of the Trust for the purpose of effecting securities transactions:
Yong-Jen Lee /S/ Yong Jen Lee
- ------------------------------ ASSISTANT TREASURER -----------------------------
The undersigned officers of Upright Investments Trust hereby certify that the
foregoing is within the parameters of a Resolution adopted by Trustees of the
Trust in a meeting held 06/27, 1998, directing and authorizing preparation
of documents and to do everything necessary to effect the Custody Agreement
between Upright Investments Trust and THE FIFTH THIRD BANK.
By: /S/ David Y.S. Chiueh
Its: President
<PAGE>
EXHIBIT C
TO THE CUSTODY AGREEMENT BETWEEN
Upright Growth Fund AND THE FIFTH THIRD BANK
June 27, 1998
MUTUAL FUND CUSTODY FEE SCHEDULE
BASIC ACCOUNT CHARGE
FUND SIZE:
Less than $25MM $.10bp
$25MM - $100MM $.75bp
$100MM - $200MM $.50bp
Greater than $200MM $.25bp
TRANSACTION FEES
DTC/FED Eligible Trades $ 9.00
Physical $25.00
Amortized Security Trades $25.00
Mutual Funds $15.00
Foreign-Euroclear & Cedel $50.00
Options, each transaction $25.00
Fifth Third Commercial Paper $ N/C
Systems
Automated Securities Workstation-(Monthly lease fee) $150.00*
$200.00 Initial Setup
MISCELLANEOUS FEES
Principal & Interest Collection (on amortized securities) $ 5.00
Lockbox Monthly Base Fee $90.00***
Commercial Checking Account-per account per month $20.00
ACH Monthly Base Fee $70.00***
ACH per transaction cost $ 0.15
Wire Transfers & Check Disbursements $ 7.00
Check Requests $ 6.00
* The workstation is optional but highly recommended
***These fees will be discounted 50% for the first 12 months.
Overdrafts will be assessed a rate of Fed Funds + 150 basis points
(These rates will not change without prior notification to the customer)
<PAGE>
