As filed with the Securities and Exchange Commission on April 1, 1998
1933 Act Registration No. 33-
1940 Act Registration No. 811-
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /x/
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /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
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 Securities
Act of 1933 or until the Registration Statement shall become effective on such
date as the Commission, acting pursuant to Section 8(a) may determine.
The Registrant hereby declares an indefinite registration of its shares of
beneficial interest pursuant to Rule 24f-2 under the Investment Company Act of
1940, as amended.
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CROSS REFERENCE SHEET
(as required by Rule 495)
UPRIGHT INVESTMENTS TRUST
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N-1A ITEM NO. LOCATION
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<S> <C> <C>
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 Other Services Management of the Fund
Item 17. Brokerage Allocation and Other Practices Portfolio Transactions
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
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Part C
Information required to be included in Part C is set forth under the appropriate
Item, so numbered, in Part C to this Registration Statement.
<PAGE>
Prospectus dated June , 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 and transfer
agent 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 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 1-973-533-9199.
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.
<PAGE>
TABLE OF CONTENTS
Page
Fees and Expenses....................................[ ]
Investment Objectives and Policies...................[ ]
Performance..........................................[ ]
Management of the Fund...............................[ ]
Net Asset Value......................................[ ]
How to Purchase Shares...............................[ ]
How to Redeem Shares.................................[ ]
Dividends and Distributions..........................[ ]
Tax Information......................................[ ]
General Information..................................[ ]
FEES AND EXPENSES
Shareholder Transaction Expenses. There is a sales charge of 3% when you
purchase shares of the Fund. There is no charge when shareholders sell their
shares of the Fund. In addition, the Fund does not charge an ongoing sales
charge, referred to as a 12b-1 fee.
Annual Fund Operating Expenses. These are expenses paid out of the Fund's assets
for services such as management of the Fund, maintaining shareholder records and
furnishing shareholder statements. The following are projections that are
calculated as a percentage of average net assets:
Management Fees.................................... 1%
Other Expenses..................................... .95%
Total Fund Operating Expenses................ 1.95%
The table below is intended to assist you in understanding the various costs and
expenses that an investor in the fund will bear directly or indirectly. The 5%
annual rate of return used in the example below is only for illustration and is
not intended to be indicative of the future performance of the Fund, which may
be more or less than the assumed rate. Future expenses may be more or less that
those shown. You can refer to the sections "How to Purchase Shares" and
"Management of Fund" for more information on transaction and operating expenses
of the Fund.
Example
You would pay the following expenses on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each period:
1 Year 3 Years 5 Years
------ ------- -------
$49 $89
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.
<PAGE>
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; Liquidity Risk, that the market for the securities may
fluctuate dramatically affect the value of the Fund's investments; and
Management Risk, that the strategy or determinations that the adviser makes will
fail to achieve the intended objectives. 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, and the lack of operating history
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.
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.
<PAGE>
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 1.00% of its average daily net assets. This 1% 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. Mr. Chiueh has served as an investment adviser for eight years but has not
previously managed mutual fund assets.
The Adviser also provides administrative and transfer agency 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 .95% of the Fund's average daily
net assets.
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.
NET ASSET VALUE
The Fund is open for business on each day that the New York Stock Exchange
(NYSE) is open. The Fund's share price or net asset value per share (NAV) is
normally determined as of 4:00 p.m., eastern time. The Fund's share price 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. For sales of the Fund, the sales charge is applied to the
NAV for the fund offering price. Since the Fund does not charge a redemption
fee, the NAV is the redemption price of shares of the Fund.
<PAGE>
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 (973) 533-9199.
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 1-973-533-1818 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 Upright Financial Corporation
615 West Mount Pleasant Avenue
Livingston, New Jersey 07039
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 $50,000 3% 3.09%
$50,000-99,999 2.5% 2.56%
$100,000-249,999 2.25% 2.30%
$250,000-499,999 1.75% 1.78%
<PAGE>
$500,000-749,000 1.5% 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.
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 and accepted. You may redeem your shares
by mail. Redemptions from retirement accounts must be in writing.
Redemption proceeds are mailed with five business days after an order is
received 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.
<PAGE>
DIVIDENDS AND DISTRIBUTIONS
The Fund distributes substantially all of its net income and net capital gains
to shareholders. 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.
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 leverage the assets of the fund by
borrowing money and using it to purchase additional securities. Leverage
increases both the opportunity for higher returns and the investment risk. The
Fund may borrow money only from banks and only if, immediately after the
borrowing, the value of its net assets (including borrowings), less liabilities
(excluding borrowings but including securities borrowed in connection with short
sales) is at least 300% of the amount of the borrowing, plus all other
outstanding borrowings. If, for any reason, the Fund fails to meet the asset
coverage test, it will be required to reduce borrowings within three business
days to the extent necessary to meet the test. The requirement may make it
necessary to sell a portion of the Fund's portfolio securities at a time when it
is disadvantageous to do so.
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. The amount of money
borrowed by a Fund for leverage may generally not exceed one-third of the Fund's
assets (including the amount borrowed).
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
<PAGE>
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%) 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.
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 may exceed 100%. 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 are 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; and (2)
the Fund may not invest more than 25% of its total assets in one industry.
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.
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.
<PAGE>
The expenses borne by the Fund include all organizational expenses, brokerage
commissions for portfolio transactions, taxes (if any), the advisory fee,
administration fee, extraordinary expenses of printing and mailing proxy
statements, 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.
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
This Statement of Additional Information is not a prospectus but should
be read in conjunction with the Fund's Prospectus dated May __, 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.
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, Administrator, Transfer Agent
Upright Financial Corporation
615 West Mt. Pleasant Avenue
Livingston, NJ 07039
Custodian
Fifth Third Bank Corporation
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Independent Accountants
Tait, Weller & Baker
Eight Penn Center Plaza, Suite 800
Philadelphia, PA
<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:
(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;
<PAGE>
(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 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.
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.
<PAGE>
PORTFOLIO TRANSACTIONS
The 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.
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.
*David Y.S. Chiueh (40), Trustee and President of the Fund, founded Upright
Financial Corporation in 1990 and serves as Chief 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. His address is 615 West Mt. Pleasant Avenue, Livingston, New Jersey 07039
*Chaur Nan Yeh (50), Trustee and Vice President of the Fund. Mr. Yeh serves a
research analyst with Upright Financial Corporation. He has served as Vice
President of FMY Services, Inc. since 1987. He is employed as a supervisory
engineer of the New York Power Authority and has served in this position since
1986. He received a Masters Degree in Engineering from New York University in
1975. His address is 615 West Mt. Pleasant Avenue, Livingston, New Jersey 07039
Wellman Wu (56), Trustee of the Fund. Mr. Wu is the president of Kam Kuo Food
Corporation in New Jersey. He has served as president since 1996. Prior to that
position, 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.
<PAGE>
Bing B. Chen (41), Trustee of the Fund. Mr. Chen serves as president of the
Great China Chartering & Agency Corp. Prior to December, 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.
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>
<CAPTION>
Trustees Aggregate Pension or Retirement Estimated Annual Total Compensation
compensation from Benefits Benefits Upon From the Fund
the Fund Retirement From the
Fund
<S> <C> <C> <C> <C>
David Chiueh 0 0 0 0
Clement 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
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 monthly average net assets of such
Fund for such calendar month equal to 1% on assets of the Fund. For the
administrative services provided to the Fund, the Fund pays a monthly fee equal
to .95% 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
___, 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
<PAGE>
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, yields and other performance information may be
quoted numerically or in a table, graph, or similar illustration.
YIELD. The Fund may advertise performance in terms of a 30-day yield quotation.
The 30-day yield quotation is computed by dividing the net investment income per
share earned during the period by the maximum offering price per share on the
last day of the period, according to the following formula:
6
Yield = 2[(a-b/cd + 1) - 1]
Where: a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursement)
c = the average daily number of shares outstanding during the period
that were entitled to receive dividends
d = the maximum offering price per share on the last day of the period
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.
<PAGE>
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.
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
<PAGE>
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.
AUDITOR. Tait, Weller & Baker, Eight Penn Center Plaza, Suite 800, Philadelphia,
PA 19103 Philadelphia, PA, 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:
not applicable
(b) Exhibits:
Except as noted, the following exhibits are being filed herewith:
1. Declaration of Trust of Registrant dated March 4, 1998.
2. By-Laws of Registrant
3. Not applicable.
4. Form of Specimen Share Certificate
5. Investment Advisory Agreement between Upright Financial Corporation
and Registrant.
6. Not Applicable
7. Not applicable.
8. Custody Agreement between Registrant and Fifth Third Bank
To be filed by amendment
9. (b) Administration Agreement between Registrant and Upright Financial
Corp.
9. (c) Transfer Agency Agreement between Registrant and Upright
Financial Corp.
To be filed by amendment
10. Opinion and Consent of counsel to be filed by amendment.
11. Consent of Independent Public Accountant to be filed by amendment.
12. Not applicable.
13. Mutual Fund Subscription Purchase Agreement to be filed by amendment.
<PAGE>
14. Not applicable.
15. Not applicable.
16. Not applicable.
17. (a) Power of Attorney to be filed by amendment.
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
The Fund is self distributing.
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.
<PAGE>
(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
and distributor are held at:
Item 31. Management Services.
Item 32. Undertakings.
The Registrant undertakes to file an amendment to the Registration
Statement with financial statements which need not be certified, withing
four to six months from the effective date of the Registrant's Registration
Statement under the Securities Act of 1933.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this registration statement pursuant to Rule
485(a) under the Securities Act of 1933 and the Investment Company Act of 1940,
as amended has duly caused this 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 ___ day of, 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 Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated:
Signature Date
/s/
- ---------------------------------
Trustee and President of the Fund
<PAGE>
EXHIBIT INDEX
-------------
Exhibit
Number Document Title
1. Declaration of Trust
2. By-laws
3. Investment Advisory Agreement
4. Administration Agreement
CERTIFICATE OF TRUST
OF
UPRIGHT INVESTMENTS TRUST
This Certificate of Trust ("Certificate") is filed in accordance with the
provisions of the Delaware Business Trust Act ( 12 Del. Code Ann. Tit. 12
Section 3810 et seg.) and sets forth the following:
1. The name of the trust is: Upright Investments Trust ("Trust").
2. The business address of the registered office of the Trust and of the
registered agent of the Trust is:
The Corporation Trust Company
Corporation Trust Center
1209 Orange Street
Wilmington, Delaware 19801
3. This Certificate is effective upon filing.
4. The Trust is a Delaware business trust registered under the Investment
Company Act of 1940. Notice is hereby given that the Trust shall consist of one
or more series. The debts, liabilities, obligations and expenses incurred,
contracted for or otherwise existing with respect to a particular series of the
Trust shall be enforceable against the assets of such series only, and not
against the assets of the Trust generally or any other series.
IN WITNESS WHEREOF, the undersigned, being the initial Trustees, have
executed this Certificate on this 4th day of March, 1998.
/s/ illegible
----------------------------
as
Trustee and not individually
/s/ illegible
----------------------------
as
Trustee and not individually
/s/ David Y.S. Chiueh
----------------------------
as
Trustee and not individually
<PAGE>
DECLARATION OF TRUST OF UPRIGHT INVESTMENTS
TABLE OF CONTENTS
Article I: The Trust
1.1 Name
1.2 Definitions
1.3 Trust Nature and Purpose
Article II: Shares
2.1 Shares of Beneficial Interest
2.2 Establishment and Abolishment of Series
2.3 Ownership of Share
2.4 Assets and Liabilities of Shares
2.5 Investment in the Trust
2.6 Status of Share and Limitation of Personal Liability
2.7 No Pre-emptive Rights; Derivative Suits
2.8 Transfer
2.9 Termination of Sales
Article III: Redemptions and Net Asset Value
3.1 Redemption by Shareholder
3.2 Redemption by Trust
3.3 Net Asset Value
Article IV: Trustees
4.1 Management of The Trust
4.2 Number and Qualification
4.3 Term and Election
4.4 Resignation and Removal
4.5 Vacancies and Appointment of Trustees
4.6 Ownership of Assets of the Trust
Article V: Powers of Trustees
5.1 Powers
5.2 Expense
5.3 Action by the Trustees
Article VI: Investment Advisor, Administrator Underwriter, and Transfer Agent
6.1 Investment Advisory and Other Arrangements
6.2 Underwriter, Administrator, and Transfer Agent
6.3 Parties to Contract
<PAGE>
Article VII: Shareholder's Meetings and Voting power
7.1 Meetings
7.2 Voting Powers
7.3 Record Date for Meetings
7.4 Quorum and Required Vote
7.5 Action by Written Consent
7.6 Inspection of Records
Article VIII: Limitation of Liability and Indemnification
8.1 Limitations of Liability
8.2 Indemnification
8.3 Trustee's Good Faith Action, Expert Advice, No Bind or Surety
8.4 Shareholder
8.5 Liability of Third Persons Dealing with Trustees
Article IX: Duration; Termination of Trust; Amendment; Mergers; Etc.
9.1 Duration
9.2 Termination of Trust
9.3 Amendment Procedure
9.4 Merger, Consolidation and Sale of Assets
Article X: Miscellaneous
10.1 Governing Law
10.2 Counterparts, References, Headings
10.3 Provisions in Conflict with Law or Regulations
10.4 Fiscal Year
<PAGE>
DECLARATION OF TRUST
OF
UPRIGHT INVESTMENTS
This DECLARATION OF TRUST of UPRIGHT INVESTMENTS is made on the 4th day of
March , 1998 by the Trustees hereunder.
WHEREAS, the Trustees desire to establish a business trust under the law of
Delaware for the purpose of carrying on the business of an open-end investment
company, and
WHEREAS, this Trust is authorized to issue its shares of beneficial
interest in separate series, all in accordance with the provisions set forth in
this Declaration of Trust;
NOW, THEREFORE, the Trustee hereby declares that they will hold all cash,
securities and other assets which they may from time to time acquire in any
manner as Trustees hereunder, IN TRUST, and that they will manage and dispose of
the same for the benefit of the holders of interests in the Trust and subject to
the following terms and condition.
ARTICLE I: THE TRUST
Section 1.1 Name. This Trust shall be known as "UPRIGHT INVESTMENTS" and
the Trustees shall conduct the business of the Trust under that name or any
other name or names as they may from time to time determine.
Section 1.2 Definitions. Whenever used herein, unless otherwise required by
the context or specifically proceeded below:
(a) The "Trust" shall mean the Delaware business trust established by this
Declaration of Trust, as amended from time to time;
(b) "Trustee" or "Trustees" shall mean each signatory to this Declaration
of Trust so long as such signatory shall continue in office in accordance with
the term hereof, and all other individuals who at the time in question have been
duly elected or appointed and qualified in accordance with Article IV hereof and
are then in office;
<PAGE>
(c) The terms "Person," "Commission," "Interested Person," "Principal
Underwriter" and "Vote of a Majority of the outstanding Voting Securities" shall
have the meanings given them in the 1940 Act;
(d) "Declaration of Trust" or "Declaration" shall mean this Declaration of
Trust as amended or restated from time to time;
(e) "By-Laws" shall mean the By-Laws of the Trust as amended from time to
time;
(f) "Shares" mean the shares of beneficial interest described in Article II
hereof and include fractions of Shares as well as whole Shares;
(g) "Shareholder" means a record owner of Shares;
(h) "Series" shall mean any of the separate series established and
designated under or in accordance with the provisions of Article II.
Section 1.3 Trust Nature and Purpose. The Trust is a business trust of the
type referred to in the Delaware Business Trust Act, Chapter 38 of the Delaware
Code (the "DBTA") The Trust is not intended to be, shall not be deemed to be,
and shall not be treated as, a general or a limited partnership, joint venture,
corporation or joint stock company, nor shall the Trustees or shareholders or
any of them for any propose be deemed to be, or be treated in any way whatsoever
as through they were, liable or responsible hereunder as partners or joint
ventures. The purpose of the Trust is to conduct, operate and carry on the
business of an open-end management investment registered company and provide
investors a continuous source of managed investment in securities.
ARTICLES II: SHARES
Section 2.1 Shares of Beneficial Interest. The beneficial interest in the
Trust shall be divided into Shares of one or more separate and distinct Series
and/or classes as the Trustees shall from time to time create and establish.
Each Share of a Series will represent an equal proportionate interest in the
Series with each other Share of the same Series, none having priority or
preference over another.
The Trustees shall have full power and authority, in their sole discretion
and without Shareholder approval, to create and establish any Series by setting
the preference. conversion or other rights, voting powers, restrictions,
limitations or dividends, and qualifications or terms and conditions of, or
rights to require redemption of, any unissued Shares and to take such other
action with respect to the Shares as the Trustees deem desirable and which is
otherwise in accordance with this Declaration of Trust.
The number of Shares authorized shall be unlimited, and the Shares so
authorized may be represented in part by fractional Shares. The Trustees may
from time to time and
<PAGE>
without shareholder approval divide or combine the Shares of any Series into a
greater or lesser number without thereby changing the proportionate beneficial
interest in the Series.
Section 2.2 Establishment and Abolishment of Series. The establishment of
any Series shall be effective upon the adoption of a resolution by the Trustees
setting forth such establishment and designating the relative rights and
preferences of the Shares of such Series. At any time that there are no Shares
outstanding of any particular Series previously established and designated, the
Trustees may abolish such Series and the establishment and designation thereof.
Section 2.3 Ownership of Shares. The ownership of Shares shall be recorded
in the books of the Trust or a transfer or similar agent. No certificates
certifying the ownership of Shares shall be issued except as the Trustees may
otherwise determine from time to time. The Trustees may make such rules as they
consider appropriate for the issuance of Share certificates, the transfer of
Shares and similar matters. The record books of the Trust as kept by the Trust
or any transfer or similar agent, as the case may be, shall be conclusive as to
the Shareholders of each Series and as to the number of Shares of each Series
held from time to time by each Shareholder.
Section 2.4 Assets and Liabilities of Shares. All consideration received by
the Trust for the issue or sale of Shares of a particular Series, together with
all assets in which such consideration is invested or reinvested all income,
earnings, profits, and proceeds thereof, including any proceeds derived from the
sale, exchange or liquidation of such assets, and any funds or payments derived
from any reinvestment of such proceeds in whatever form the same may be, shall
be referred to as "assets belonging to "that Series. In addition, any assets,
income, earnings, profits, and proceeds thereof funds or payments which are not
readily identifiable as belonging to any particular Series shall be allocated by
the Trustees between and among one or more of the Series in such manner as they,
in their sole discretion, deem fair and equitable. Each such allocation shall be
conclusive and binding upon the Shareholders of all Series for all purposes, and
shall be referred to as assets belonging to that Series. The assets belonging to
a particular Series shall be so recorded upon the books of the Trust, and shall
be held by the Trustees in Trust for the benefit of the holders of Shares of
that Series. The assets belonging to each particular Series shall be charged
with the liabilities of that Series and all expenses, costs, charges and
reserves attributable to that Series. Any general liabilities, expenses. cost,
charges or reserves of the Trust which are not readily identifiable as arising
from any particular Series shall be allocated and charged by the Trustees
between or among any one or more of the Series in such manner as the Trustees,
in their sole discretion, deem fair and equitable, and shall be referred to as
"liabilities belonging to "that Series. Each such allocation shall be conclusive
and binding upon the Shareholders of all Series for all purposes. Any creditor
of any Series may look only to the assets of that Series to satisfy such
creditor's debt.
<PAGE>
Section 2.5 Investment In The Trust. The Trustees may issue Shares on such
terms and for such consideration, which may consist of cash or tangible or
intangible property or a combination thereof, as they may from time to time
authorize. Such Shares, when so issued, shall be fully paid and non-assessable.
Trustees may, in their sole discretion, impose a sales charge upon investment in
the Trust.
Section 2.6 Status of Shares and Limitation of Personal Liability. Shares
shall be deemed to be personal property giving only the rights provided in this
instrument. Every Shareholder by virtue of having become a Shareholder shall be
held to have expressly assented and agreed to the terms hereof and to have
become a party hereto. The death of a Shareholder during the existence of the
Trust shall not operate to terminate the Trust, nor entitle the representative
of any deceased Shareholder to an accounting or to take any action in court or
elsewhere against the Trust or the Trustees, but entitles such representative
only to the rights of said deceased Shareholder under this Trust. Ownership of
Shares shall not entitle the Shareholder to any title in or to the whole or any
part of the Trust property or right to call for a partition or division of the
same or for an accounting, nor shall the ownership of Shares constitute the
Shareholders as partners. Neither the Trust nor the Trustees, nor any officer,
employee or agent of the Trust shall have any power to bind personally any
Shareholders, nor, except as specifically provided herein, to call upon any
Shareholder for the payment of any sum of money or assessment whatsoever other
than such as the Shareholder may at any time personally agree to pay.
Section 2.7 No Pre-emptive Rights; Derivative Suits. Shareholders shall
have no preemptive or other right to subscribe to any additional Shares or other
securities issued by the Trust or any series thereof. No action may be brought
by a Shareholder on behalf of the Trust unless Shareholders owning no less than
10% of the then outstanding Shares join in the bringing of such action.
Section 2.8 Transfer. All Shares of each particular Series shall be
transferable.
Section 2.9 Termination of Sales. The Trustees shall have the authority to
terminate the sales of any Series at any time or for such periods as the
Trustees may from time to time decide.
ARTICLE III : REDEMPTIONS AND NET ASSET VALUE
Section 3.1 Redemption by Shareholder. Each Shareholder of Shares of the
Trust or any series shall have the right at such times as may be permitted by
the Trust to require the Trust to redeem all or any part of his or her Shares of
that series or Trust at a redemption price equal to the net asset value per
Shares of the Trust or series next determined in accordance with Section 3.3
after the Shares are properly tendered for
<PAGE>
redemption, subject to any contingent deferred sales charge in effect at time of
redemption. Payment of the redemption price shall be in cash; provided, however,
that if the Trustees determine, which determination shall be conclusive, that
conditions exist which make payment wholly in cash unwise or undesirable, the
Trust may, subject to the requirements of the 1940 Act, make payment wholly or
partly in securities or other assets belonging to the Trust or series of which
the Shares being redeemed are part of the value of such securities or assets
used in such determination of net asset value.
Notwithstanding the foregoing, the Trust may postpone payment of the
redemption price and may suspend the right of the Shareholders of Shares of the
Trust or series to require the Trust to redeem Shares or the Trust of series
during any period or at any time when and to the extent permissible under the
1940 Act.
The Trust may elect, pursuant to Rule 18f-1 under the 1940 Act, to pay in
cash all requests for redemption by any Shareholder, limited in amount with
respect to each Shareholder during any ninety-day period to the less of (i)
$250,000, or (ii) 1% of the net asset value of the Trust at the beginning of
such period.
Section 3.2 Redemption by Trust. The Trustees may cause the Trust to redeem
at net asset value the Shares of any Shareholder in any Series if the net asset
value of the Shares in such Series is less than minimum amount as a result of
Shareholder redemptions. Maintenance of Shareholder accounts of a minimum amount
may from time to time be determined by the Trustees and set forth in the then
current Prospectus of the Trust. No such redemption shall be affected unless the
Trust has given the holder at least sixty (60) days notice of its intention to
redeem such Shares and an opportunity to purchase a sufficient number of
additional Shares to bring the aggregate current net asset value of the holder's
Shares in the particular series above minimum amount . Upon redemption of Shares
pursuant to this Section, the Trust shall promptly cause payment of the full
redemption price to be made to the holder of the Shares so redeemed. The Trust
may reject any purchase order, refuse to transfer such Shares and compel
redemption of Shares if, in its opinion, any such rejected action would prevent
the Trust from becoming a personal holding company as defined by the Internal
Revenue Code of 1986, as amended.
Section 3.3 Net Asset Value. The net asset value per Share of any series
shall be (i) in the case of a series whose Shares are not divided into classes,
the quotient obtained by dividing the value of the net assets of that series
(being the value of the assets belonging to that series less the liabilities
belonging to that series) by the total number of Shares of that series
outstanding, and (ii) in the case of a class of Shares of a series whose Shares
are divided into classes, the quotient obtained by dividing the value of the net
assets of the that series allocable to such class (being the value of the assets
belonging to that series allocable to such class less the liabilities belonging
to such class) by the total number of Shares of such class outstanding; all
determined in accordance with the methods and procedures, including without
limitation those with respect to rounding, established by the Trustees from time
to lime.
The Net Asset Value per share shall be determined on such days and at such
times as the Trustees may determine. Such determination shall be made with
respect to securities for which market quotations are readily available, at the
market value of such securities;
<PAGE>
and with respect to other securities and assets, at the fair value as determined
in good faith by the Trustees, provided, however, that the Trustees, without
Shareholder approval, may alter the method of appraising portfolio securities
insofar as permitted under the 1940 Act or insofar as permitted by any order of
the Commission applicable to the Series. The Trustees may delegate any of their
powers and duties under this Section 3 with respect to appraisal of assets and
liabilities. At any time, the Trustees may cause the Net Asset Value per Share
last determined to be determined again in similar manner and may fix the time
when such redetermined value shall become effective.
ARTICLE IV: TRUSTEES
Section 4.1 Management of The Trust. The business and affairs of the Trust
shall be managed by the Trustees, and they shall have all powers necessary and
desirable to carry out that responsibility.
Section 4.2 Number and Qualification. The number of Trustees shall
initially be three and shall thereafter be fixed from time to time by written
instrument signed by majority of the Trustees so fixed then in office, provided,
however, that the number of Trustees at a number not less than one nor more than
ten, however, that at all times at least forty percent (40%) of Trustees shall
not be Interest persons as defined in the 1940 Act. A Trustee shall be an
individual at least 21 years of age who is not under legal disability. A Trustee
need not be a Shareholder, a citizen of the United States.
Section 4.3 Term and Election. Each Trustee named herein, or elected or
appointed prior to the first meeting of the shareholders, shall (except in the
event of resignations or removals or vacancies pursuant to Section 4.4 or 4.5
hereof) hold office until the next meeting of shareholders called for the
purpose of electing Trustees and the election and qualification of his or her
successor.. Beginning with the Trustees elected at the first meeting of
Shareholders, each Trustee shall hold office during the lifetime of this Trust
and until its termination as hereinafter provided unless such Trustee resigns or
is removed as provided in Section 4.4 below.
Section 4.4 Resignation and Removal. Any Trustee may resign or retire as a
Trustee (without need for prior or subsequent accounting) by an instrument in
writing signed by him and delivered or mailed to the Chairman, if any, the
President or the Secretary, and such resignation or retirement shall be
effective upon such delivery, or at a later date according to the terms of the
instrument. Any Trustee may be removed with or without cause at any time:
<PAGE>
(1) by written instrument signed by at least two-thirds of the number of
trustees prior to such removal, specifying the date upon which such removal
shall become effective or (2) by vote of shareholders holding not less than
two-thirds of Shares outstanding, cast in person or by proxy at any meeting
called for that purpose.
Upon the resignation or removal of a Trustee, or his or her otherwise
ceasing to be a Trustee, he or she shall execute and deliver such documents as
the remaining Trustees shall require for the purpose of conveying to the Trust
or the remaining Trustees any Trust Property held in the name of the resigning
or removed Trustee. Upon the death of any Trustee or upon removal or resignation
due to any Trustee's incapacity to serve as trustee, his or her legal
representative shall execute and deliver on his or her behalf such documents as
the remaining Trustees shall require as provided in the preceding sentence.
Section 4.5 Vacancies and Appointment of Trustees. In case of the
declination, death, resignation, retirement, removal, incapacity, or inability
of any of the Trustees, or in case a vacancy shall, by reason of an increase in
number or for any other reason exist, the remaining Trustees shall fill such
vacancy by appointing such other person as they, in their discretion, shall see
fit consistent with the limitations under the 1940 Act. No such vacancy shall
operate to annul this Declaration or to revoke any existing trust created
pursuant to the terms of this Declaration.
The appointment shall be effective upon the written acceptance of the
person named therein to serve as a trustee and agreement by such person to be
bound by the provisions of this Declaration of Trust, except that any such
appointment in anticipation of a vacancy occurring by reason of retirement,
resignation, or increase in number of Trustees to be effective at a later date
shall become effective only at or after the effective date of the retirement,
resignation or increase in number of Trustees.
Section 4.6 Ownership of Assets of the Trust. The assets of the Trust shall
be held separate and apart from any assets now or hereafter held in any capacity
other than as Trustee thereunder by the Trustees. All of the assets of the Trust
shall at all times be considered as vested in the Trustees. No Shareholder shall
be deemed to have a several ownership in any individual asset of the Trust or
any right of partition or possession thereof, but each Shareholder of a
Portfolio or class of shares of the Trust shall have a proportionate undivided
beneficial interest in the assets belonging to the Portfolio or class of shares
of the Trust held by the shareholders of such Portfolio or class of shares in
the Trust.
ARTICLE V: POWERS OF TRUSTEES
Section 5.1 Powers. The Trustees shall have exclusive and absolute control
over management of the business and affairs of the Trust, but subject to the
provision of this Declaration or Bylaws of the trust. The Trustees, in all
instances, shall act as principals,
<PAGE>
and are and shall be free from the control of the Shareholders. The Trustees
should have all powers necessary or convenient to carry out that responsibility
and the purpose of the trust. The trustees may perform all acts as in their sole
discretion are proper for conducting the business and affairs of the Trust. The
enumeration of any specific power herein shall not be construed as limiting the
aforesaid power. The Trustees shall have power and authority:
(a) To invest and reinvest cash and other property, and to hold cash or
other property uninvested without in any event being bound or limited by any
present or future law or custom in regard to investments by Trustees;
(b) To sell exchange, lend, pledge, mortgage, hypothecate, write options on
and lease any or all of the assets of the Trust;
(c) To borrow money from a bank for temporary or for investment purposes.
The Trustees shall not pledge, mortgage or hypothecate the assets of the Trust
except that, to secure borrowings, it may pledge securities.
(d) To elect and remove such officers and appoint and terminate such agents
as they consider appropriate;
(e) To employ a bank or trust company as custodian of any assets of the
Trust subject it any conditions set forth in this Declaration of Trust or in the
Bylaws, if any;
(f) To retain a transfer agent and shareholder servicing agent, or both;
(g) To employ an Investment Advisor or Investment Advisers to perform
services pursuant to investment advisory or management contract(s) as
hereinafter provided;
(h) To provide for the distribution of interests of the Trust either
through a Principal Underwriter (hereinafter defined) in the manner herein,
provided for or by the Trust itself, or both;
(i) To make distributions of income and of capital gains to Shareholders in
the manner hereinafter provided for;
(j) To set record dates in the manner hereinafter provided for;
(k) To establish, from time to time, a minimum Share purchase requirement,
and to require the redemption of the Shares of any Shareholder whose investment
is less than an established minimum selected by the Trustees, upon notice to
each such shareholder;
(l) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to executive and deliver
powers of attorney to such person or persons as the Trustees shall deem proper,
granting to such person or persons such power and discretion with relation to
securities or property as the Trustees shall deem proper;
(m) To exercise power and rights of subscription or otherwise which in any
manner arise out of ownership of securities;
(n) To hold any security or property in a form not in indicating any trust,
whether in bearer, unregistered or other negotiable form, or either in the name
of the Trust or in the name of a custodian or a nominee or nominees, subject in
either case to proper safeguards approved by the Trustees;
(o) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporate nor concern, any security of which is
held in the Trust; to consent to any contract, lease, mortgage, purchase, or
sale of property by such corporation or concern; and to pay calls or
subscriptions with respect to any security held in the Trust;
<PAGE>
(p) To compromise, arbitrate, or otherwise adjust claims in favor of or
against the Trust or any matter in controversy including, but not limited to,
claims for taxes;
(q) To enter into joint ventures, general or limited partnerships and any
other combination or associations;
(r) To endorse or guarantee the payment of any notes or other obligations
of any person; to make contracts of guaranty or suretyship, or otherwise assume
liability for payment thereof; and to mortgage and pledge the Trust property or
any part thereof to secure any of or all such obligations;
(s) Entirely from Trust property, to purchase and pay for such insurance as
they may deem necessary or appropriate for the conduct of the Trust, including,
without limitation, insurance policies insuring the assets of the Trust, and
payment of distributions and principal on its portfolio investments, and
insurance policies insuring the Shareholders, Trustees, officers, employees,
agents, Investment Advisers or managers, Principal Underwriters or independent
contractors of the Trust, individually or jointly, against all claims and
liabilities of every nature arising by reason of holding, being or having held
any such office or position, or by reason of any action alleged to have been
taken or omitted by any such person as Shareholder, Trustee, officer, employee,
agent, Investment Advisor or manager, Principal Underwriter or independent
contractors, including any action taken or omitted that may be determined to
constitute negligence, whether or not the Trust would have the power to
indemnify such person against such liability;
(t) To pay pensions for faithful service, as deemed appropriate by the
Trustees, and to adopt, establish and carry out pension, profit-sharing, share
bonus, share purchase, savings, thrift and other retirement, incentive and
benefit plans, trusts and provisions, including the purchasing of life insurance
and annuity contracts as means of providing such retirement and other benefits,
for any or all of the Trustees, officers, employees and agents of the Trust;
(u) To adopt Bylaw not inconsistent with this Declaration of Trust
providing for the conduct of the business of the Trust and to amend and repeal
them to the extent that they do not reserve that right to the Shareholders.
Section 5.2 Expense. The Trustees are authorized to pay or cause to be paid
all expense which in the opinion of the Trustees are necessary or incidental to
carry out any of the purposes of this Declaration. The Trustees shall be
entitled to reasonable compensation from the trust for services as Trustees and
may fix the compensation of all officers employees . The Trustee may pay
themselves such compensation for special services, including, legal and
brokerage services, as they in good faith may deem reasonable (subject to any
limitations in the 1940 Act.) and reimbursement for expenses reasonably incurred
by themselves on behalf of the Trust.
Section 5.3 Action by the Trustees. Except as otherwise provided by
the 1940 Act or other applicable law, this Declaration of Trust or By- Law, any
action to be taken by the Trustees on behalf of the Trust or any series may be
taken by a majority of the Trustees present at a meeting of Trustees. The
Trustees may participate in a meeting by means of a conference telephone or
similar communications equipment if all persons participating in the meeting can
hear each other at same time. At any meeting of the
<PAGE>
Trustees, a majority of the Trustees shall constitute a quorum. Meetings of the
Trustees may be called orally or in writing by any Trustee. Notice of the time,
date and place of all meetings of the Trustees shall be given by the party
calling the meeting to each Trustee by telephone or telegram sent to his home or
business address at least 24 hours in advance of the meeting or by written
notice mailed to his home or business address at least 72 hours in advance of
the meeting. Notice need not be given to any Trustee who attends the meeting
without objecting to the lack of notice or who executes a written waiver of
notice with respect to the meeting, either before or after holding the meeting.
Subject to the requirements of the 1940 Act, the Trustees by majority vote may
delegate to any trustee their authority to approve particular matters or take
particular actions on behalf of the Trust.
ARTICLE VI: INVEST ADVISOR, ADMINISTRATOR
UNDERWRITER, AND TRANSFER AGENT.
Section 6.1 Investment Advisor and Other Arrangements. The Trustees may in
their discretion, from time to time, enter into contracts or agreements for
investment advisory services, administrative services (including transfer and
dividend disbursing agency services), underwriter services, fiduciary (including
custodian) services, placement agent services, Holder servicing and distribution
services, or other services, whereby the other party to such contract or
agreement shall undertake to furnish the Trustees such services as the Trustees
shall, from time to time, consider desirable and all upon such terms and
conditions as the Trustees may in their discretion determine. Notwithstanding
any provisions of this Declaration of Trust, the Trustees may authorize the
Investment Adviser(s) (subject to such general adopt) to effect on behalf of the
Trustees purchases, sales or exchanges of portfolio securities and other
investment instruments of the Trust selected by such Investment Adviser without
further consultation with the Trustees or may authorize any officer, agent, or
Trustee to effect such purchases, sales or exchanges pursuant to instructions or
recommendations of the Investment Adviser (and all without further action by the
Trustees). Any such purchases, sales and exchanges shall be deemed to have been
authorized by all of the Trustees.
The Trustees may, subject to applicable requirements of the 1940 Act,
including those relating to shareholder approval, authorize the Investment
Adviser to employ one or more sub-advisers from time to time to perform such of
the acts and services of the Investment Adviser, and upon such terms and
conditions, as may be agreed upon between the Investment Adviser and any such
sub-adviser.
Upon the termination of any contract with Upright Financial Corp., or any
corporation affiliated with Upright Financial Corp., acting as investment
adviser or manager, the Trustees are hereby required to promptly change the name
of the Trust to a name which does not include " Upright" or any approximation or
abbreviation thereof, unless the prior written consent of the Upright Financial
Corp. is obtained.
<PAGE>
Section 6.2 Underwriter, Administrator, and Transfer Agent . The Trust may
enter into a written contract or contracts with an underwriter or underwriters
or a distributor or distributors whereby the Trust may either agree to sell
shares to the other party or parties to the contract or appoint such other party
or parties its sales agent or agents for such shares and with such other
provisions as the Trustees may deem reasonable and proper., and the Trustees may
in their discretion from time to time enter into transfer agency shareholder
service contract(s), and or administration contracts in each case with such
terms and conditions, and providing for such compensation, as the Trustees may
in their discretion deem advisable.
Section 6.3 Parties to Contract. Any contract or agreement of the character
described in Section 6.1 of this Article VI or in the By-Laws of the Trust may
be entered into with any Corporation, Firm, Partnership, Trust, or Association,
although one or more of the Trustees or officers of the Trust or any Shareholder
may be an officer, director, trustee, shareholder, or member of such other party
to the contract or agreement, and no such contract or agreement shall be
invalidated or rendered violable by reason of the existence of any such
relationship, nor shall any person holding such relationship be liable merely by
reason of such relationship for any loss or expense to the Trust under or by
reason of such contract or agreement or accountable for any profit realized
directly or indirectly therefrom, provided that the contract or agreement when
entered into was reasonable and fair and not inconsistent with the provisions of
this Article VI or the By-Laws. Any Trustee or officer of the Trust or any
Shareholder may be the other party to contracts or agreements entered into
pursuant to Section 6.1 ; 6.2 hereof or the By-laws of the Trust, and any
Trustee or officer of the Trust or any Shareholder may be financially interested
or otherwise affiliated with Persons who are parties to any or all of the
contracts or agreements mentioned in this Section 6.3.
ARTICLE: VII SHAREHOLDER'S MEETINGS
AND VOTING POWER
Section 7.1 Meetings. No annual or regular meetings of Shareholders is
required. Special meetings of Shareholders may be called by the Trustees from
time to time for the purpose of taking action upon any matter requiring the vote
or authority of the Shareholders as herein provided or upon any other matter
deemed by the Trustees to be necessary or desirable . The Trustees shall
promptly call and give notice of a meeting of Shareholders for the purpose of
voting upon removal of any Trustee of the Trust when requested to do so in
writing by Shareholders holding not less than 10% of the Shares of the Trust
then outstanding. Written notice of any meeting of Shareholders shall be given
or caused to be given by the Trustees by mailing by electronic transmission to
Shareholder at his or her registered address, at least ten days before such
meeting.
Section 7.2 Voting Powers. The Shareholders shall have power to vote only
(i) for the election of Trustees as provided in Article IV Section 4.3 (ii) to
the same extent as
<PAGE>
the stockholders of a Delaware business corporation as to whether or not a court
action, proceeding or claim should or should not be brought or maintained
derivatively or as a class action on behalf of the Trust or the Shareholders,
(iii) with respect to the termination or reorganization of the Trust or any
Series to the extent and as provided in Article IX, Section 9.2; 9.4 , and (iv)
with respect to any investment advisory contract as contemplated by section 6.1
hereof, (v)with respect to such additional matters relating to the Trust as may
be required by this Declaration of Trust, the By-Laws or any registration of the
Trust with the Commission(or any successor agency) or any state, or as the
Trustees may consider necessary or desirable. Each whole Share shall be entitled
to one vote as to any matter in which it is entitled to vote and each fractional
Share shall be entitled to a proportionate fractional vote. There shall be no
cumulative voting in the election of Trustees. Shares may be voted in person or
by proxy. A proxy with respect to Shares held in the name of two or more persons
shall be valid if executed by any one of them unless at or prior to exercise of
the proxy the Trust receives a specific written notice to the contrary from any
one of them. A proxy purporting to be executed by or on behalf of a Shareholders
shall be deemed valid unless challenged at or prior to its exercise and the
burden of proving invalidity shall rest on the challenge.
Section 7.3 Record Date for Meetings. For the purpose if determining the
Shareholders who are entitled to notice of any meeting and to vote at any
meeting, or to participate in any distribution, or for the purpose of any other
action, the Trustees may from time to time fix a date, not more than 90 calendar
days prior to the date of any meeting of the Shareholders or payment of
distributions or other action, as the case may be, as a record date for the
determination of the persons to be treated as Shareholders of record for such
purposes.
Section 7.4 Quorum and Required Vote. A majority of the Shares entitled to
vote shall be a quorum for the transaction of business at a Shareholders'
meeting, but any lesser number shall be sufficient for adjournments. Any
adjourned session or sessions may be held, within a reasonable time after the
date set for the original meeting without the necessity of further notice. A
majority of the shares voted, at a meeting of which a quorum is present shall
decide any questions and a plurality shall elect a Trustee, except when a
different vote is required or permitted by any provision of the 1940 Act or
other applicable law or by this declaration of Trust or the By-Laws.
Section 7.5 Action by written Consent. Any action taken by Shareholders may
be taken without a meeting if a majority of Shareholders entitled to vote on the
matter (or such larger proportion thereof as shall be required by any express
provision of law or the Declaration of Trust or the Bylaws) consent to the
action in writing and such written consents are filed with the records of the
meetings of shareholders. Such consent shall be treated for purposes as a vote
taken at a meeting of Shareholders.
Section 7.6 Inspection of Records. The records of the Trust shall be open
to inspection by Shareholders to the same extent as is required for stockholders
of a Delaware business corporation under the Delaware General Corporation Law.
<PAGE>
ARTICLE VIII: LIMITATION OF LIABILITY AND
INDEMNIFICATION
Section 8.1 Limitation of Liability. Provided they have exercised
reasonable care and have acted under the reasonable belief that their actions
are in the best interest of the Trust, the Trustees shall not be responsible for
or liable in any event for neglect or wrongdoing of any Trustee or any other
officer, agent, employee or Investment Adviser, Principal Underwriter, transfer
agent or custodian of the Trust, but nothing contained herein shall protect any
Trustee against any liability to which he would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office. Every note, bond, contract,
instrument, certificate or undertaking and every other act or thing whatsoever
executed or done by or on behalf of the Trust or the Trustees or any of them in
connection with the Trust shall be conclusively deemed to have been executed or
done only in or with respect to their or his capacity as Trustees or Trustee,
and such Trustees or Trustee shall not be personally liable thereon.
All persons extending credit to, contracting with or having any claim
against the Trust shall look only to the assets of the Trust or a Series thereof
for payment under such credit, contract or claim; and neither the Shareholders
nor the Trustees nor the Trustees nor any of the Trust's officers, employees or
agents, whether past, present or future, shall be personally liable therefor.
Section 8.2 Indemnification.
(A) Subject to the exceptions and limitations contained in Section 8.2 (B)
below:
(i) every person who is, or has been, a Trustee or officer of the Trust
(including person who serve at the Trust's request as directors, officers or
Trustees of another organization in which the Trust has any interest as a
shareholder, creditor or otherwise) (hereinafter referred to as a "Covered
person") shall be indemnified by the Trust or any Series to the fullest extent
permitted by law, against liability and against all expenses reasonably incurred
or paid by him in connection with a claim, action, suit or proceeding in which
he becomes involved, as a party or otherwise, by virtue of his being or having
been a Trustee or officer of the Trust, and against amounts paid or incurred by
him in the settlement thereof;
(ii) the words "claim," "action", "suit", or "proceeding" shall apply to
all claims, actions , suits or proceedings(civil, criminal or other, including
appeals), actual or threatened while in office or thereafter, and the words
"liability" and "expenses" shall include, without limitation, attorneys'fees,
costs, judgments, amounts paid in settlement, fines, penalties and other
liabilities;
(B) No indemnification shall be provided thereunder to a Covered Person:
(i) who shall have been adjudicated by a court or body before which the
proceeding was brought (a) to be liable to the Trust or its Shareholders by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his office, or (b) not to have acted in
good faith in the reasonable belief that his action was in the best interest of
the Trust; or
(ii) in the event of a settlement, unless there has been a determination
that such Trustee or officer did not engage in willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his office,
(a) by the court or other body approving the settlement; or
(b) by at least a majority of those Trustees who are neither Interested
Persons of the Trust nor are parties to the matter based upon a review of
readily available facts (as opposed to a full trial-type inquiry); or
(c) by written opinion of independent legal counsel based upon a review of
readily available facts (as opposed to a full trial-type inquiry);
provided, however, that any Shareholder may, by appropriate legal
proceedings, challenge any such determination by the Trustees or by independent
counsel.
(C) The rights of indemnification herein provided may be insured against by
policies maintained by the Trust, shall be several, shall not be exclusive of or
affect any other rights to which any Covered Person may now or hereafter be
entitled, shall continue as to a person who has ceased to be such Trustee or
officer and shall inure to the benefit of the heirs, executors and
administrators of such person. Nothing contained herein shall affect any rights
to indemnification to which Trust personnel and any other persons, other than
Trustees and officers, may be entitled by contract or otherwise under law.
(D) Expenses in connection with the preparation and presentation of a defense to
any claim, action, suit or proceeding of the character described subsection (a)
of this Section 8.2; provided, however, that either (i) such Covered Person
shall have provided appropriate security for such undertaking, or (ii) the Trust
shall be insured against losses arising out of any such advance payments, or
(iii) either a majority of the Trustees who are neither Interested Persons of
the Trust nor parties to the matter, or independent legal counsel in a written
opinion, shall have determined, based upon a review of readily available facts
(as opposed to a trial-type inquiry or full investigation), that there is reason
to believe that such Covered Person will be entitled to indemnification under
this Section 8.2.
Section 8.3. Trustee's Good Faith Action, Expert Advice, No Bond or Surety.
The Exercise by the Trustee of their powers and discretions thereunder shall be
binding upon everyone interested. A Trustee shall be liable for his own willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the office of Trustee, and for nothing else, and
shall not be liable for errors of Judgment or mistakes of fact or law. The
Trustees may take advice of counsel or other experts with respect to the meaning
and operation of this Declaration of Trust, and shall be under no liability for
any act or omission in accordance with such advice or for failing to follow such
advice. The Trustees shall not be required to give any bond as such, nor any
surety if a bond is required.
Section 8.4 Shareholder. In case any Shareholder or former Shareholder of
any Series of the Trust shall be held to be personally liable solely by reason
of his being or
<PAGE>
having been a Shareholder and not because of his acts or omissions or for some
other reason, the Shareholder or former Shareholder (or his heirs, executors,
administrators or other legal representatives or in the case of a corporation or
other entity, its corporate or other general successor or assigns) shall be
entitled to be held harmless from and indemnified against all loss and expense
arising from such liability from the assets belonging to the respective Series.
A Series shall, upon request by a Shareholder thereof, assume the defense of any
claim made against the Shareholder for any act or obligation of the Series and
satisfy any judgment thereon.
Section 8.5. Liability of Third Persons Dealing with Trustees. No person
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees or to see t the
application of any payments made or property transferred to the Trust or upon
its order.
ARTICLE IX: DURATION; TERMINATION OF TRUST;
AMENDMENT ; MERGERS; ETC.
Section 9.1 Duration. The Trust created hereby shall continue perpetually
pursuant to Section 3808 of DBTA, unless terminated as provided.
Section 9.2 Termination of Trust. The Trust may be termination (i) by the
affirmative vote of the Shareholders of not less than two-thirds of the Shares
in the Trust at any meeting of the Shareholders, or (ii) by an instrument in
writing, without a meeting, signed by a majority of the Trustees and consented
to by the Shareholders of not less than two-third of such Shares. Upon
termination of the Trust thereof, after paying or otherwise providing for all
charges, taxes, expenses and liabilities, whether due or accrued or anticipated,
as may be determined by the Trustees, the Trust shall, in accordance with such
procedures as the Trustees consider appropriate, reduce the remaining assets of
the Trust to distributable form in cash or other securities, or any combination
thereof, and distribute the proceeds to the Shareholders of the Trust in the
manner set forth by resolution of the Trustees. The Trustees shall thereafter
file a certificate of cancellation in accordance with Section 3010 of the DBTA.
Section 9.3 Amendment Procedure. The Declaration of Trust may be amended at
any time, so long as such amendment is not in contravention of applicable law,
including the 1940 Act, by an instrument in writing signed by a majority of the
then Trustees.
Section 9.4 Merger, Consolidation and Sale of Assets. The Trust, or any one
or more series, may merger or consolidate with any other corporation,
association, trust or other organization or may sell, lease or exchange all or
substantially all of its property, including its good will, upon such terms and
conditions and for such consideration when and as authorized by no less than a
majority of the Trustees and by a Majority Shares Vote of the Trust or such
series, as the case may be, or by an instrument or instruments in writing
without a meeting, consented to by the Shareholders of not less than 50% of the
<PAGE>
total Shares of the Trust or such series, as the case may be, and any such
merger, consolidation, sale, lease or exchange shall be deemed for all purposes
to have been accomplished under and pursuant to the statutes of the State of
Delaware. In accordance with Section 3815(f) of DBTA, an agreement of merger or
consolidation may effect any amendment to the Declaration or By-Laws or effect
the adoption of a new declaration of trust or by-laws of the trust if the Trust
is the surviving or resulting business trust. A certificate of merger or
consolidation of the Trust shall be signed by a majority of the Trustees.
ARTICLE X: MISCELLANEOUS
Section 10.1 Governing Law. This Declaration is executed by all of the
Trustees and delivered with reference to DBTA and the laws of the State of
Delaware, and the rights of all parties and the validity and construction of
every provision hereof shall be subject to and construed according to DBTA and
the laws of the State of Delaware (unless and to the extent otherwise provided
for and /or preempted by the 1940 Act or other applicable federal securities
laws); provided, however, that there shall not be applicable to the Trust, the
Trustees or this Declaration (a) the provisions of Section 3540 of Title 12 of
the Delaware Code or (b) any provisions of the laws (statutory or common) of the
State of Delaware (other than the DBTA ) pertaining to trusts which are
inconsistent with the rights, duties, powers, limitations or liabilities of the
Trustees set forth or referenced in this Declaration.
Section 10.2 Counterparts, References, Headings. The original or a copy of
this Declaration of Trust and of each amendment hereto shall be kept in the
office of the Trust where it may be inspected by any shareholder. Anyone dealing
with the Trust may rely on a certificate by an officer or Trustee of the Trust
as to whether or not any such amendments have been made and as to any matters in
connection with the Trust thereunder, and with the same effect as if it were the
original, may rely on a copy certified by an officer or Trustee of the Trust to
be a copy of this Declaration of Trust or any such amendments. In this
Declaration of Trust or in any such amendment, references to this Declaration of
Trust, and all expressions like "herein, " "hereof "and "thereunder," shall be
deemed to refer to this Declaration of Trust as a whole and as amended or
affected by any such amendment, and masculine pronouns shall be deemed to
include the feminine and the neuter, as the context shall require. Headings are
placed herein for convenience of reference only, and in case of any conflict,
the text of this instrument, rather than the headings, shall control. This
instrument may be executed in any number of counterparts, each of which shall be
deemed an original.
Section 10.3 Provisions in Conflict with Law or Regulations.
<PAGE>
(a) The provisions of this Declaration are severable, and if the Trustees
shall determine, with the advice of counsel, that any of such provisions is in
conflict with the 1940 Act, the DBTA, or with other applicable laws and
regulations, the conflicting provisions shall be deemed never to have
constituted a part of this Declaration; provided, however, that such
determination shall not affect any of the remaining provisions of this
Declaration or render invalid or improper any action taken or omitted prior to
such determination.
(b) If any provision of this Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of this
Declaration in any jurisdiction.
Section 10.4. Fiscal Year. The fiscal year of the Trust shall end on a date
specified by the Trustees; provided, however, that the Trustees may, without
Shareholder approval, change the fiscal year of the Trust.
IN WITNESS WHEREOF, the undersigned, being the Trustees of the Trust, have
executed this instrument as of the date first written above.
__________________________________ _____ _____, 1998
Wellman Wu, Trustee
__________________________________ _____ _____, 1998
Bing B. Chen, Trustee
__________________________________ _____ _____, 1998
David Y.S. Chiueh, Trustee
__________________________________ ______ _____, 1998
Clement Yen, Trustee
__________________________________ ______ _____, 1998
Trustee
BY-LAWS
OF
UPRIGHT INVESTMENTS TRUST
ARTICLE I
AGREEMENT AND DECLARATION OF TRUST AND PRINCIPAL OFFICE
Section 1.1. Agreement and Declaration of Trust. These By-Laws shall be
subject to the Declaration of Trust dated March 4, 1998, as from time to time in
effect or supplemented (the "Trust Agreement"), of Upright Investments Trust,
the Delaware business trust established by the Trust Agreement (the "Trust").
Section 1.2. Principal and Registered Offices of the Trust. A registered
office of the Trust shall be located in Wilmington, Delaware. The principal
office of the Trust shall be located in New Jersey, Livingston.
ARTICLE II
SHAREHOLDER'S MEETINGS
Section 2.1. Place if Meeting. All special meetings of the shareholders
shall be held at the principal place of business of the Trust or at such other
place in the United States as the Trustees may designate.
Section 2.2. Meetings. A meeting of the shareholders of the Trust shall be
held whenever called by the Trustees and whenever election of a Trustee or
Trustees by shareholders is required by the provisions of Section 16(a) of the
Investment Company Act of 1940, as amended (the "1940 Act") for that purpose.
The Trustees shall promptly call and give notice of a meeting of shareholders
for the purpose of voting upon removal of any Trustee of the Trust when
requested to do so in writing by shareholders holding not less than 10% of the
shares then outstanding.
Section 2.3. Record Dates. For the purpose of determining the shareholders
who are entitled to vote or act at any meeting or any adjournment thereof, or
who are entitled to receive payment of any dividend or of any other
distribution, the Trustees may from time to time fix a time, which shall be not
more than 90 nor less than ten days before the date of any meeting of
shareholders or the date for the payment of any dividend or of any other
distribution, as the record date for determining the shareholders having the
right to notice of and to vote at such meeting and any adjournment thereof or
the right to receive such dividend or distribution, and in such case only
shareholders of record on such record date shall have such right,
notwithstanding any transfer of shares on the books of the Trust after the
record date; or without fixing such record date the Trustees may for any such
purposes close the register or transfer books for all or any part of such
period.
<PAGE>
ARTICLE III
OFFICERS
Section 3.1. Officers. The officers of the Trust shall be a Chairman of the
Trustees, a President, a Treasurer, a Secretary and such other officers,
including Vice Presidents, if any, as the Trustees from time to time may in
their discretion elect. The Trust may also have such agents as the Trustees from
time to time in their discretion may appoint. The Chairman of the Trustees shall
be a Trustee and may but need not be a shareholder; and any other officer may be
but none need be a Trustee or shareholder. Any two or more offices may be held
by the same person.
Section 3.2. Election. The Chairman of the Trustees, the President,
the Treasurer and the Secretary shall be elected annually by the Trustees. Other
officers, if any, may be elected or appointed by the Trustees at any time.
Vacancies in any office may be filled at any time in accordance with the Trust
Agreement.
Section 3.3. Tenure. The Chairman of the Trustees, the President, the
Treasurer and the Secretary shall hold office until their respective successors
are chosen and qualified, or in each case until he or she sooner dies, resigns,
is removed or becomes disqualified. Each other officer shall hold office and
each agent shall retain authority at the pleasure of the Trustees.
Section 3.4. Resignations and Removals. Any officer of the Trust may resign
by filing a written resignation with the President or with the Trustees or with
the Secretary, which shall take effect on being so filed at such time as may be
therein specified. The Trustees may at any meeting remove any officer.
Section 3.5. Powers. Subject to the other provisions of these By-Laws, each
officer shall have, in addition to the duties and powers herein and in the Trust
Agreement set forth, such duties and powers as are commonly incident to the
office occupied by him or her as if the Trust were organized as a Delaware
Business Trust and such other duties and powers as the Trustees may from time to
time designate.
Section 3.6. Chairman; President. Unless the Trustees otherwise provide,
the Chairman of the Trustees, or if there is none, or in the absence of the
Chairman, the President shall preside at all meetings of the shareholders and of
the Trustees. The President shall be the chief executive officer and, if so
designated by the Trustees, the chief financial officer.
Section 3.7. Treasurer. The Treasurer shall be the principal financial and
accounting officer of the Trust. He shall deliver all funds and securities of
the Trust which may come into his hands to such bank or trust company. He shall
have the custody of the seal of the Trust. He shall make annual reports in
writing of the business conditions of the Trust, which reports shall be
preserved upon its records, and he shall furnish such other reports regarding
the business and conditions as the Trustees may from time to time require. The
Treasurer shall perform such duties additional to the foregoing as the Trustees
may from time to time designate.
Section 3.8. Secretary. The Secretary shall record in books kept for the
purpose all votes and proceedings of the Trustees and the shareholders at their
respective meetings.
<PAGE>
Section 3.9. Vice President. Each Vice President of the Trust shall perform
such duties as the Trustees may from time to time designate.
ARTICLE IV
TRUSTEES' MEETINGS
Section 4.1. Trustees. The business and affairs of the Trust shall be
managed by the Trustees, and they shall have all powers necessary and desirable
to carry out the responsibility, so far as such powers are not inconsistent with
applicable law, the Declaration of Trust, or with these By-Laws.
Section 4.2. Executive and Other Committees. The Trustees may elect from
their own number an executive committee to consist of not less than three nor
more than five members which shall have the power and duty to conduct the
current and ordinary business of the Trust, including the purchase and sale of
securities, while the Trustees are not in session, and such other powers and
duties as the Trustees may from time to time delegate to such committee. The
Trustees may also elect from their own number other committees from time to
time, the number composing such committees and the powers conferred upon the
same to be determined by vote of the Trustees.
Section 4.3. Regular Meeting. Regular meetings of the Trustees may be held
without call or notice at such places and at such times as the Trustees may from
time to time determine, provided that any Trustee who is absent when such
determination is made shall be given notice if the determination.
Section 4.4. Special Meetings. Special meetings of the Trustees may be held
at any time and at any place designated in the call of the meeting when called
by the Chairman of the Trustees, the President or the Treasurer or by two or
more Trustees, sufficient notice thereof being given to each Trustee by the
Secretary or an Assistant Secretary or by the officer of the Trustee of a
special meeting.
Section 4.5. Notice. It shall be sufficient notice to a Trustee of a
special meeting to sent notice by mail at least 72 hours or by telegram at least
24 hours before the meeting addressed to the Trustee at his or her usual or last
known business or residence address or to given notice to him or her in person
or by telephone at least 24 hours before the meeting. Notice of a meeting need
not be given to any Trustee if a written waiver of notice, executed by him or
her before or after the meeting, is filed with the records of the meeting, or to
any Trustee who attends the meeting without protesting prior thereto or at its
commencement the lack of notice to him or her. Neither notice of a meeting nor a
waiver of a notice need specify the purposes of the meeting.
Section 4.6. Quorum. At any meeting of the Trustees a majority of the
Trustees then in office shall constitute a quorum. Any meeting may be adjourned
from time to time by a majority of the votes cast upon the question, whether or
not a quorum is present, and the meeting may be held as adjourned without
further notice.
Section 4.7. Special Action. When all the Trustees shall be present at any
meeting, however called, or wherever held, or shall assent to the holding of the
meeting without
<PAGE>
notice, or after the meeting shall sign a written assent thereto on the record
of such meeting, the acts of such meeting shall be valid as if such meeting had
been regularly held.
Section 4.8. Action by Consent. Any action by the Trustees may be taken
without a meeting if a written consent thereto is signed by all the Trustees and
filed with the records of the Trustees meetings, or by telephone meeting. Such
consent shall be treated as a vote of the Trustees for all purposes.
Section 4.9. Participation by Telephone. One or more of the Trustees or of
any committee of the Trustees may participate in a meeting thereof by telephone
or similar communications equipment, allowing all persons participating in the
meeting to hear each other at the same time. Participation by such means shall
constitute presence in person at a meeting.
ARTICLE V
CUSTODY OF SECURITIES
Section 5.1. Employment of a Custodian. The Corporation shall place and at
all times maintain in the custody of a Custodian (including any sub-custodian
for the Custodian) all funds, securities and similar investments owned by the
Corporation. The Custodian (and any sub-custodian) shall be a bank having not
less than $2,000,000 aggregate capital, surplus and undivided profits and shall
be appointed from time to time by the Board of Directors, which shall fix its
remuneration.
Section 5.2. Action Upon Termination of Custodian. Agreement. Upon
termination of a Custodian Agreement or inability of the Custodian to continue
to serve, the Board of Trustees shall promptly appoint a successor custodian,
but in the event that no successor custodian can be found who has the required
qualifications and is willing to serve, the Board of Trustees shall call as
promptly as possible a special meeting to determine whether the Trust shall
function without a custodian or shall be liquidated. If so directed by vote of
the Trustees of a majority of the Trust, the Custodian shall deliver and pay
over all property of the Trust held by it as specified in such vote.
Section 5.3. Other Arrangements. The Trust may make such other arrangements
for the custody of its assets (including deposit arrangements) as may be
required by any applicable law, rule or regulation.
ARTICLE VI
REPORTS
Section 6.1. General. The Trustees and officers shall render reports at the
time and in the manner required by the Trust Agreement or any applicable law.
Officers and Committees shall render such additional reports as they may deem
desirable or as may from time to time be required by the Trustees.
<PAGE>
ARTICLE VII
SEAL
Section 7.1. General. The seal of the Trust shall be circular in form
bearing the inscription, with the word "Delaware", together with the name of the
Trust and the year of its organization cut or engraved thereon, but, unless
otherwise required by the Trustees, the seal shall not be necessary to be placed
on, and its absence shall not impair the validity of , any document, instrument
or other paper executed and delivered by or on behalf of the Trust.
ARTICLE VIII
EXECUTION OF PAPERS
Section 8.1. General. Except as the Trustees may generally or in particular
cases authorize the execution of documents in some other manner, all deeds,
leases, contracts, notes and other obligations made by the Trustees shall be
signed by the President, any Vice President, or by the Treasurer and need not
bear the seal of the Trust.
ARTICLE IX
AMENDMENTS
Section 9.1. Amendment by Shareholders. New By-Laws may be amended or
repealed by the affirmative vote or written consent of a majority of the
outstanding shares entitled to vote, except as otherwise provided by applicable
law or by the Declaration of Trust or these By-Laws.
Section 9.2. Amendment by Trustees. Subject to the right of shareholders as
provided in Section 9.1 of this Article to adopt, amend or repeal By-Laws, and
except as otherwise provided by applicable law or by the Declaration of Trust,
these By-Laws may be adopted, amended, or repealed by the Board of Trustees.
INVESTMENT ADVISORY AGREEMENT
This Investment Advisory and Management Agreement ("Agreement"), is made
and entered into this_______day of _______, 1998 by and between Upright
Investments, 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 pf 1940 (the "1940 Act") and has
registered its sharesof 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 terein 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
<PAGE>
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.
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
redemptions 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 wiht 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 promopting 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% per annum of the daily net assets of the Fund. The Advisor
shall reduce such fee, if the expenses borne by 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
Advisor will waive its fee or reimburse Fund for any excess up to the 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
<PAGE>
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.
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
transacation or th 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
spectifically 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 wihtout the consent of
the Advisor. This Agreement may also be terminated at any time, without the
payment of penalty, by the
<PAGE>
Fund or by the Advisor on sixty (60) days' written notice addressed to the other
party at its principal place of business.
10. 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.
11. 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.
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 shal not be affected thereby. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their 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 ro 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
_________________________ By_______________________________
Attest: Upright Financial Corporation
_________________________ By_______________________________
ADMINISTRATION AGREEMENT
THIS ADMINISTRATION AGREEMENT is made and entered into this_______day of
_______, 1998 by and between Upright Investments, 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 a
transfer agent, including but not limited to : receive orders for the purchase
or redemption of share, prepare and transmit payments for dividends and
distributions declared by the Fund, calculate daily net asset value of the Fund,
mail transaction confirmation statements daily to investors, mail reports to
shareholder, computer, prepare and furnish all necessary reports to governmental
authorities: Form 1099 and other appropriate forms. 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 which it maintains for the Fund are the property of the Fund and further
agrees to surrender promptly to the Fund any of such records upon the Fund's
request. The
<PAGE>
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.
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: 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
0.95% of the Fund's average daily net assets for the first $50 million of
average daily net assets and 0.85% 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
<PAGE>
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.
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
<PAGE>
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.
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 their 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
_________________________ By______________________________
Attest: Upright Financial Corporation
__________________________ By______________________________
