SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / /
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Pre-Effective Amendment No. 1 / X /
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Post-Effective Amendment No. / /
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 1 / X /
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(Check appropriate box or boxes.)
Alpha Analytics Investment Trust - File Nos. 333-65407 and 811-8061
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(Exact Name of Registrant as Specified in Charter)
1901 Avenue of the Stars, Suite 1100, Los Angeles, CA 90067
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (310) 556-4660
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Robert E. Gipson, Alpha Analytics Investment Trust,
1901 Avenue of the Stars, Suite 1100, Los Angeles, CA 90067
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(Name and Address of Agent for Service)
With copy to:
Donald S. Mendelsohn, Brown, Cummins & Brown Co., L.P.A.
3500 Carew Tower, Cincinnati, Ohio 45202
Approximate Date of Proposed Public Offering: December 23, 1998. It is proposed
that this filing will become effective:
/ / immediately upon filing pursuant to paragraph (b)
/ / on _________________ pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/ / on (date) pursuant to paragraph (a)(1)
/ / 75 days after filing pursuant to paragraph (a)(2)
/ / on (date) pursuant to paragraph (a)(2) of Rule 485. If appropriate, check
the following box:
/ / this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a)
may determine.
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Alpha Analytics Investment Trust
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CROSS REFERENCE SHEET
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FORM N-1A
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ALPHA ANALYTICS VALUE FUND
ALPHA ANALYTICS SMALL CAP QUANT FUND
ITEM SECTION IN COMBINED PROSPECTUS
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1........................Cover Page
2........................Summary of Fund Expenses
3........................Performance Information
4........................The Fund, Investment Objective and Strategies and
Risk Considerations,
Operation of the Fund, General Information
5........................Operation of the Fund
5A.......................None
6........................Cover Page, Dividends and Distributions, Taxes,
General Information, How to Redeem Shares
7........................Cover Page, How to Invest in the Fund, Share Price
Calculation, Operation of the Fund, How to Redeem
Shares
8........................How to Redeem Shares
9........................None
13........................Investment Objective and Strategies and Risk
Considerations
15........................General Information
SECTION IN STATEMENT OF
ITEM ADDITIONAL INFORMATION
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10........................Cover Page
11........................Table of Contents
12........................None
13........................Additional Information About Fund Investments and
Risk Considerations, Investment Limitations
14........................Trustees and Officers
15........................Description of the Trust
16........................The Investment Adviser, Custodian, Transfer Agent,
Accountants, Trustees and Officers
17........................Portfolio Transactions and Brokerage
18........................Description of the Trust
19........................Determination of Share Price
20........................None
21........................Distributor
22........................Investment Performance
23........................Financial Statements
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PROSPECTUS _______________, 1998
ALPHA ANALYTICS INVESTMENT TRUST
ALPHA ANALYTICS VALUE FUND
ALPHA ANALYTICS SMALL CAP QUANT FUND
1901 Avenue of the Stars, Suite 1100
Los Angeles, CA 90067
For Information, Shareholder Services and Requests:
(888) ___-____
ALPHA ANALYTICS VALUE FUND: The investment objective of Alpha Analytics Value
Fund is to provide long term capital appreciation. The Fund seeks to achieve its
objective by pursuing a relative value philosophy, investing in stocks of
companies that possess above-average financial characteristics in terms of
balance sheet strength and profitability measures and that are attractively
priced relative to the market and to the prices at which such stocks have sold
on a historical basis. The Fund's sub- adviser uses fundamental analysis to
select quality companies that are selling at the low end of their historical
relative valuation levels based on price/earnings, price/book, price/sales, and
price/cash flow analysis.
ALPHA ANALYTICS SMALL CAP QUANT FUND: The investment objective of Alpha
Analytics Small Cap Quant Fund is to provide long term capital appreciation. The
Fund seeks to achieve its objective by investing in stocks which have
characteristics empirically associated with growth in share price. The Fund's
adviser uses a computer-driven quantitative investment model developed by the
Fund's portfolio manager to evaluate stocks based on value and momentum
indicators.
The Funds are "no-load," which means that investors incur no sales
charges, commissions or deferred sales charges on the purchase or redemption of
their shares. Shareholders are charged a redemption fee in some cases. Each Fund
is one of the mutual funds comprising Alpha Analytics Investment Trust, an
open-end management investment company.
This Prospectus provides the information a prospective investor ought
to know before investing and should be retained for future reference. A
Statement of Additional Information dated ___________________, 1998 has been
filed with the Securities and Exchange Commission (the "SEC"), is incorporated
herein by reference, and can be obtained without charge by calling the Fund at
the phone number listed above. The SEC maintains a Web Site (http://www.sec.gov)
that contains the Statement of Additional Information, material incorporated by
reference, and other information regarding Alpha Analytics Investment Trust.
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 ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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SUMMARY OF FUND EXPENSES
The tables below are provided to assist an investor in understanding
the direct and indirect expenses that an investor may incur as a shareholder in
each Fund. The expense information is based on estimated amounts for the current
fiscal year. The expenses are expressed as a percentage of average net assets.
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE FUND PERFORMANCE
OR EXPENSES, BOTH OF WHICH MAY VARY.
Shareholders should be aware that each Fund is a no-load fund and,
accordingly, a shareholder does not pay any sales charge or commission upon
purchase or redemption of shares of the Fund. The Funds do impose a redemption
fee on shares redeemed less than one year from the date of purchase. Unlike most
other mutual funds, the Funds do not pay directly for transfer agency, pricing,
custodial, auditing or legal services, nor do they pay directly any general
administrative or other significant operating expenses. The Adviser pays all of
the expenses of each Fund except brokerage, taxes, interest, fees and expenses
of non-interested person trustees and extraordinary expenses.
ALPHA ALPHA
ANALYTICS ANALYTICS
SHAREHOLDER TRANSACTION EXPENSES VALUE FUND SMALL CAP
QUANT FUND
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Sales Load Imposed on Purchases None None
Sales Load Imposed on Reinvested Dividends None None
Deferred Sales Load None None
Maximum Redemption Fees
(as a % of redemption amount)(1) 2.00% 2.00%
Exchange Fees None None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees (after fee waiver)(2) 1.30% 1.30%
12b-1 Charges None None
Other Expenses(3) 0.00% 0.00%
Total Fund Operating Expenses
(after fee waiver)(2) 1.30% 1.30%
(1) Each Fund charges a redemption fee of 2% on shares redeemed less than 90
days, and 1% on shares redeemed between 91 and 364 days, from the date of
purchase.
(2) Each Fund's total operating expenses are equal to the management fee paid to
the Adviser because the Adviser pays all of the Fund's operating expenses
(except as described below). Through November 30, 1999, the Adviser has agreed
to waive 0.20% of average net assets from its fees so that the management fee of
each Fund will be 1.30% of average daily net assets. Without fee waiver, the
management fee of each Fund would be 1.50% of average daily net assets.
(3) Each Fund estimates that other expenses (fees and expenses of the trustees
who are not "interested persons" as defined in the Investment Company Act) will
be less than of .01% of average net assets for the first fiscal year.
Example As a shareholder in a Fund, you would pay the following expenses on a
$1,000 investment, assuming (1) a 5% annual return and (2) redemption at the end
of each time period:
1 YEAR 3 YEARS
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Alpha Analytics Value Fund $13 $41
Alpha Analytics Small Cap Quant Fund $13 $41
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THE FUNDS
Alpha Analytics Value Fund and Alpha Analytics Small Cap Quant Fund
(each a "Fund" or collectively the "Funds") were organized as series of Alpha
Analytics Investment Trust, an Ohio business trust (the "Trust") on August 18,
1998. This prospectus offers shares of each Fund and each share represents an
undivided, proportionate interest in a Fund. The investment adviser to each Fund
is Alpha Analytics Investment Group, LLC (the "Adviser"). The Adviser has
retained Cambiar Investors, Inc. to serve as sub-adviser to the Alpha Analytics
Value Fund (the "Sub-Adviser").
Neither Fund will invest in companies which derive more than 4% of
their gross revenues from the manufacture of tobacco products; or own directly
more than a 4% interest in or operate nuclear power plants or derive more than
4% of gross revenues from sales to the nuclear power industry.
INVESTMENT OBJECTIVE AND STRATEGIES
ALPHA ANALYTICS VALUE FUND: The investment objective of Alpha Analytics Value
Fund (the "Value Fund") is to provide long term capital appreciation. The Fund
seeks to achieve its objective by pursuing a relative value philosophy, i.e., by
investing in stocks of companies that possess above-average financial
characteristics in terms of balance sheet strength and profitability measures
and that are attractively priced relative to the market and to the prices at
which such stocks have sold on a historical basis. The Sub-Adviser uses
fundamental analysis to select quality companies that are selling at the low end
of their historical relative valuation levels based on price/earnings,
price/book, price/sales, and price/cash flow analysis.
In addition to using these quantitative factors, the Sub-Adviser seeks
to identify companies experiencing positive developments not yet recognized by
the market and having the potential to increase 50% in market value within 12 to
18 months (although it is not always realized). It is anticipated that the Value
Fund will invest primarily in equity securities of well established U.S.
companies that are relatively large in terms of revenues, assets and market
capitalization. A security may be sold if positive developments are realized
(for example, a target price is achieved), if the price moves too far too fast,
if the security becomes overweighted or if positive developments fail to unfold.
Market timing is not a part of the Sub-Adviser's investment strategy.
ALPHA ANALYTICS SMALL CAP QUANT FUND: The investment objective of Alpha
Analytics Small Cap Quant Fund (the "Small Cap Quant Fund") is to provide long
term capital appreciation. The Fund seeks to achieve its objective by investing
in stocks which have characteristics empirically associated with growth in share
price. The Adviser uses a computer-driven quantitative investment model
developed by the Fund's portfolio manager to evaluate stocks based on value and
momentum indicators. The Adviser believes that it will be able to maximize
expected return while minimizing risks by purchasing stocks selected by the
model. A security may be sold when it achieves its targeted price, or when it
declines significantly in value from its peak or purchase price, with respect to
the market. The Adviser may deviate from the model for liquidity needs.
It is anticipated that the Fund will invest primarily in equity
securities of U.S. companies with smaller market capitalizations. Under normal
circumstances, at least 65% of the Small Cap Quant Fund's assets will be
invested in smaller capitalization stocks, defined by the Adviser as those
stocks with market capitalization of less than $1.5 billion. By investing in
smaller capitalization companies,
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the Fund will be subject to the risks associated with such companies. Smaller
capitalization companies may experience higher growth rates and higher failure
rates than do larger capitalization companies. Companies in which the Fund is
likely to invest may have limited product lines, markets or financial resources
and may lack management depth. The trading volume of securities of smaller
capitalization companies is normally less than that of larger capitalization
companies, and therefore may disproportionately affect their market price,
tending to make them rise more in response to buying demand and fall more in
response to selling pressure than is the case with larger capitalization
companies. Shareholders should be aware that the share price of the Fund may be
volatile because of its emphasis on smaller capitalization companies.
GENERAL: Although each Fund intends to invest primarily in common stocks, each
Fund may invest in other types of securities and utilize various investment
techniques. See "Investment Policies and Techniques and Risk Considerations" on
page __ for a more detailed discussion of each Fund's investment practices. For
temporary defensive purposes under abnormal market or economic conditions, each
Fund may hold all or a portion of its assets in money market instruments
(including money market funds) or U.S. government repurchase agreements. Each
Fund may also invest in such instruments at any time to maintain liquidity or
pending selection of investments in accordance with its policies. If a Fund
acquires securities of a money market fund, the shareholders of the Fund will be
subject to additional management fees.
As all investment securities are subject to inherent market risks and
fluctuations in value due to earnings, economic and political conditions and
other factors, neither Fund can give any assurance that its investment objective
will be achieved. Shareholders should be aware that the Adviser is a newly
formed company and has not previously managed assets organized as a mutual fund,
and that the Small Cap Quant Fund's portfolio manager has no portfolio
management experience. In addition, it should be noted that the Funds have no
operating history. Rates of total return quoted by a Fund may be higher or lower
than past quotations, and there can be no assurance that any rate of total
return will be maintained.
HOW TO INVEST IN THE FUNDS
Each Fund is "no-load" and shares of each Fund are sold directly to
investors on a continuous basis, subject to a minimum initial investment of
$5,000 ($2,000 for an IRA or other tax sheltered retirement plans) and minimum
subsequent investments of $250. These minimums may be waived or reduced by the
Adviser for accounts participating in an automatic investment program. Investors
choosing to purchase or redeem their shares through a broker/dealer or other
institution may be charged a fee by that institution. Investors choosing to
purchase or redeem shares directly from a Fund will not incur charges on
purchases or redemptions, except as described below under "How To Redeem Shares
- - - Redemption Fee".
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INITIAL PURCHASE
BY MAIL - You may purchase shares of a Fund by completing and signing
the investment application form which accompanies this Prospectus and mailing
it, in proper form, together with a check (subject to the above minimum amounts)
made payable to the appropriate fund, and sent to American Data Services, Inc.,
the Funds' transfer agent (the "Transfer Agent") at the P.O. Box listed below.
If you prefer overnight delivery, use the overnight address listed below.
U.S. Mail: Overnight:
Alpha Analytics Funds Alpha Analytics Funds
c/o American Data Services, Inc. c/o American Data Services, Inc.
P.O. Box 5536 Hauppauge Corporate Center
Hauppauge, New York 11788-0132 150 Motor Parkway
Hauppauge, New York 11788-5108
Your purchase of shares of a Fund will be effected at the next share
price calculated after receipt of your investment.
BY WIRE - You may also purchase shares of a Fund by wiring federal
funds from your bank, which may charge you a fee for doing so. If money is to be
wired, you must call the Transfer Agent at 888-_______ to set up your account
and obtain an account number. You should be prepared at that time to provide the
information on the application. Then, you should provide your bank with the
following information for purposes of wiring your investment:
Star Bank, N.A. Cinti/Trust for: ALPHA ANALYTICS VALUE FUND
ABA #0420-0001-3 D.D.A.#___________________
Attn: Mutual Fund ALPHA ANALYTICS SMALL CAP
Account Name _________________ QUANT FUND
(write in shareholder name) D.D.A.#___________________
For the Account # ____________
(write in account number)
You are required to mail a signed application to the Custodian at the
above address in order to complete your initial wire purchase. Wire orders will
be accepted only on a day on which the Fund, Custodian and Transfer Agent are
open for business. A wire purchase will not be considered made until the wired
money is received and the purchase is accepted by the Fund. Any delays which may
occur in wiring money, including delays which may occur in processing by the
banks, are not the responsibility of the Fund or the Transfer Agent. There is
presently no fee for the receipt of wired funds, but the right to charge
shareholders for this service is reserved by the Fund.
ADDITIONAL INVESTMENTS
You may purchase additional shares of any Fund at any time (subject to
minimum investment requirements) by mail, wire, or automatic investment. Each
additional mail purchase request must contain your name, the name of your
account(s), your account number(s), and the name of the Fund. Checks should be
made payable to the appropriate fund and should be sent to the address listed
above. A bank wire should be sent as outlined above.
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AUTOMATIC INVESTMENT PLAN
You may make regular investments in a Fund with an Automatic Investment
Plan by completing the appropriate section of the account application and
attaching a voided personal check. Investments may be made monthly to allow
dollar-cost averaging by automatically deducting [$150] or more from your bank
checking account. You may change the amount of your monthly purchase at any
time. Please contact the Transfer Agent to obtain withdrawal dates and the date
your request must be received to be included in the next withdrawal.
TAX SHELTERED RETIREMENT PLANS
Since the Funds are oriented to longer term investments, shares of the
Funds may be an appropriate investment medium for tax sheltered retirement
plans, including: individual retirement plans (IRAs); simplified employee
pensions (SEPs); SIMPLE plans; 401(k) plans; qualified corporate pension and
profit sharing plans (for employees); tax deferred investment plans (for
employees of public school systems and certain types of charitable
organizations); and other qualified retirement plans. You should contact the
Transfer Agent for the procedure to open an IRA or SEP plan, as well as more
specific information regarding these retirement plan options. Consultation with
an attorney or tax adviser regarding these plans is advisable. Custodial fees
for an IRA will be paid by the shareholder by redemption of sufficient shares of
the Fund from the IRA unless the fees are paid directly to the IRA custodian.
You can obtain information about the IRA custodial fees from the Transfer Agent.
OTHER PURCHASE INFORMATION
Dividends begin to accrue after you become a shareholder. The Funds do
not issue share certificates. All shares are held in non-certificate form
registered on the books of each of the Funds and the Funds' Transfer Agent for
the account of the shareholder. The rights to limit the amount of purchases and
to refuse to sell to any person are reserved by the Funds. If your check or wire
does not clear, you will be responsible for any loss incurred by the Funds. If
you are already a shareholder, the Funds can redeem shares from any identically
registered account in the Funds as reimbursement for any loss incurred. You may
be prohibited or restricted from making future purchases in the Funds.
HOW TO REDEEM SHARES
All redemptions will be made at the net asset value determined after
the redemption request has been received by the Transfer Agent in proper order.
Shareholders may receive redemption payments in the form of a check or federal
wire transfer. The proceeds of the redemption may be more or less than the
purchase price of your shares, depending on the market value of the Fund's
securities at the time of your redemption. Presently there is no charge for wire
redemptions; however, the Funds reserve the right to charge for this service.
Any charges for wire redemptions will be deducted from the shareholder's Fund
account by redemption of shares. Investors choosing to purchase or redeem their
shares through a broker/dealer or other institution may be charged a fee by that
institution.
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BY MAIL - You may redeem any part of your account in a Fund at no
charge by mail. Your request should be addressed to:
Alpha Analytics Funds
c/o American Data Services, Inc.
P.O. Box 5536
Hauppauge, New York 11788-0132
"Proper order" means your request for a redemption must include your
letter of instruction, including the Fund name, account number, account name(s),
the address and the dollar amount or number of shares you wish to redeem. This
request must be signed by all registered share owner(s) in the exact name(s) and
any special capacity in which they are registered. For all redemptions, the
Funds require that signatures be guaranteed by a bank or member firm of a
national securities exchange. Signature guarantees are for the protection of
shareholders. At the discretion of each of the Funds or American Data Services,
Inc., a shareholder, prior to redemption, may be required to furnish additional
legal documents to insure proper authorization.
BY TELEPHONE - You may redeem any part of your account in a Fund by
calling the Transfer Agent 888-_______. You must first complete the Optional
Telephone Redemption and Exchange section of the investment application to
institute this option. The Fund, the Transfer Agent and the Custodian are not
liable for following redemption or exchange instructions communicated by
telephone that they reasonably believe to be genuine. However, if they do not
employ reasonable procedures to confirm that telephone instructions are genuine,
they may be liable for any losses due to unauthorized or fraudulent
instructions. Procedures employed may include recording telephone instructions
and requiring a form of personal identification from the caller.
The telephone redemption and exchange procedures may be terminated at
any time by the Funds or the Transfer Agent. During periods of extreme market
activity it is possible that shareholders may encounter some difficulty in
telephoning the Funds, although neither the Funds nor the Transfer Agent has
ever experienced difficulties in receiving and in a timely fashion responding to
telephone requests for redemptions or exchanges. If you are unable to reach the
Funds by telephone, you may request a redemption or exchange by mail.
REDEMPTION FEE - Shares held less than 90 days, and shares held between
91 and 364 days, and redeemed [(including exchanges]) from a Fund are subject to
a short term redemption fee equal to 2.0% and 1.0%, respectively, of the net
asset value of shares redeemed. Solely for purposes of calculating the one-year
holding period, each Fund uses the "first-in, first out" (FIFO) method. That is,
the date of any redemption or exchange will be compared to the earliest purchase
date. If this holding period is less than one year, the applicable fee will be
assessed. The fee will be prorated if a portion of the shares being redeemed or
exchanged has been held for more than one year, or the shares are subject to
more than one fee level. Shares acquired through reinvested dividend or capital
gain distributions are exempt from the fee.
ADDITIONAL INFORMATION - If you are not certain of the requirements for
a redemption please call the Transfer Agent at 888 ___-____. Redemptions
specifying a certain date or share price cannot be accepted and will be
returned. You will be mailed the proceeds on or before the fifth business day
following the redemption. However, payment for redemption made against shares
purchased by check
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will be made only after the check has cleared, which normally may take up to
fifteen days. Also, when the New York Stock Exchange is closed (or when trading
is restricted) for any reason other than its customary weekend or holiday
closing or under any emergency circumstances, as determined by the Securities
and Exchange Commission, the Funds may suspend redemptions or postpone payment
dates.
Because the Funds incur certain fixed costs in maintaining shareholder
accounts, each Fund reserves the right to require any shareholder to redeem all
of his or her shares in the Fund on 30 days' written notice if the value of his
or her shares in the Fund is less than $5,000 due to redemption, or such other
minimum amount as the Fund may determine from time to time. An involuntary
redemption constitutes a sale. You should consult your tax adviser concerning
the tax consequences of involuntary redemptions. A shareholder may increase the
value of his or her shares in the Fund to the minimum amount within the 30 day
period. Each share of each Fund is subject to redemption at anytime if the Board
of Trustees determines in its sole discretion that failure to so redeem may have
materially adverse consequences to all or any of the shareholders of the Funds.
SHARE PRICE CALCULATION
The value of an individual share in each Fund (the net asset value) is
calculated by dividing the total value of the Fund's investments and other
assets (including accrued income), less any liabilities (including estimated
accrued expenses), by the number of shares outstanding, rounded to the nearest
cent. Net asset value per share is determined as of the close of the New York
Stock Exchange (4:00 p.m., Eastern time) on each day that the exchange is open
for business, and on any other day on which there is sufficient trading in the
Fund's securities to materially affect the net asset value.
The net asset value per share of the Fund will fluctuate.
Securities which are traded on any exchange or on the NASDAQ
over-the-counter market are valued at the last quoted sale price. Lacking a last
sale price, a security is valued at its last bid price except when, in the
Adviser's opinion, the last bid price does not accurately reflect the current
value of the security. All other securities for which over-the-counter market
quotations are readily available are valued at their last bid price. When market
quotations are not readily available, when the Adviser determines the last bid
price does not accurately reflect the current value or when restricted
securities are being valued, such securities are valued as determined in good
faith by the Adviser, subject to review of the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market
quotations, but may be valued on the basis of prices furnished by a pricing
service when the Adviser believes such prices accurately reflect the fair market
value of such securities. A pricing service utilizes electronic data processing
techniques based on yield spreads relating to securities with similar
characteristics to determine prices for normal institutional-size trading units
of debt securities without regard to sale or bid prices. When prices are not
readily available from a pricing service, or when restricted or illiquid
securities are being valued, securities are valued at fair value as determined
in good faith by the Adviser, subject to review of the Board of Trustees. Short
term investments in fixed income securities with maturities of less than 60 days
when acquired, or which subsequently are within 60 days of maturity, are valued
by using the amortized cost method of valuation, which the Board has determined
will represent fair value.
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DIVIDENDS AND DISTRIBUTIONS
Each Fund intends to distribute substantially all of its net investment
income as dividends to its shareholders on an annual basis, and intends to
distribute its net long term capital gains and its net short term capital gains
at least once a year.
Income dividends and capital gain distributions are automatically
reinvested in additional shares at the net asset value per share on the
distribution date. An election to receive a cash payment of dividends and/or
capital gain distributions may be made in the application to purchase shares or
by separate written notice to the Transfer Agent. Shareholders will receive a
confirmation statement reflecting the payment and reinvestment of dividends and
summarizing all other transactions. If cash payment is requested, a check
normally will be mailed within five business days after the payable date. If you
withdraw your entire account, all dividends accrued to the time of withdrawal,
including the day of withdrawal, will be paid at that time. You may elect to
have distributions on shares held in IRAs and 403(b) plans paid in cash only if
you are 59 1/2 years old or permanently and totally disabled or if you otherwise
qualify under the applicable plan.
TAXES
Each Fund intends to qualify each year as a "regulated investment
company" under Subchapter M of the Internal Revenue Code of 1986, as amended. By
so qualifying, a Fund will not be subject to federal income taxes to the extent
that it distributes substantially all of its net investment income and any
realized capital gains.
For federal income tax purposes, dividends paid by each Fund from
ordinary income are taxable to shareholders as ordinary income, but may be
eligible in part for the dividends received deduction for corporations. Pursuant
to the Tax Reform Act of 1986 (the "Tax Reform Act"), all distributions of net
short term capital gains to individuals are taxed at the same rate as ordinary
income. All distributions of net capital gains to corporations are taxed at
regular corporate rates. Any distributions designated as being made from net
realized long term capital gains are taxable to shareholders as long term
capital gains regardless of the holding period of the shareholder.
Each Fund will mail to each shareholder after the close of the calendar
year a statement setting forth the federal income tax status of distributions
made during the year. Dividends and capital gains distributions may also be
subject to state and local taxes. Shareholders are urged to consult their own
tax advisers regarding specific questions as to federal, state or local taxes
and the tax effect of distributions and withdrawals from the Fund.
On the application or other appropriate form, each of the Funds will
request the shareholder's certified taxpayer identification number (social
security number for individuals) and a certification that the shareholder is not
subject to backup withholding. Unless the shareholder provides this information,
each Fund will be required to withhold and remit to the U.S. Treasury 31% of the
dividends, distributions and redemption proceeds payable to the shareholder.
Shareholders should be aware that, under regulations promulgated by the Internal
Revenue Service, a Fund may be fined $50 annually for each account for which a
certified taxpayer identification number is not provided. In the event that such
a fine is imposed with respect to a specific account in any year, the applicable
Fund may make a corresponding charge against the account.
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OPERATION OF THE FUNDS
Each Fund is a diversified series of Alpha Analytics Investment Trust,
an open-end management investment company organized as an Ohio business trust on
August 18, 1998. The Board of Trustees supervises the business activities of the
Funds. Like other mutual funds, the Funds retain various organizations to
perform specialized services. The Trust retains Alpha Analytics Investment
Group, LLC, 1901 Avenue of the Stars, Suite 1100, Los Angeles, CA 90067 (the
"Adviser") to manage the assets of each Fund. The Adviser was established in
July 1998 and is controlled by Robert E. Gipson. Mr. Gipson is an attorney (of
counsel at Gipson, Hoffman & Pancione), an officer of Corporate Management
Group, Inc. (a business and financial consulting company) and serves as an
officer or director of various public and non-public companies. The Advisor is
responsible for determining the securities to be held or sold by each Fund, and
the portion of each Fund's assets to be held uninvested, subject always to the
Fund's investment objective, policies and restrictions, and subject further to
such policies and instructions as the Board of Trustees may establish.
Each Fund is authorized to pay the Adviser a fee equal to an annual
average rate of 1.50% of the Fund's average daily net assets. Through November
30, 1999, the Adviser has agreed to waive a portion of its fees so that the
total expenses of each Fund will be 1.30% of average daily net assets. The
Adviser pays all of the operating expenses of each Fund except brokerage, taxes,
interest, fees and expenses of non-interested person trustees and extraordinary
expenses. In this regard, it should be noted that most investment companies pay
their own operating expenses directly, while the Funds' expenses, except those
specified above, are paid by the Adviser.
John M. Gipson, Vice President of the Adviser, is primarily responsible
for the day-to-day management of the Small Cap Quant Fund's portfolio. Mr.
Gipson received his Ph.D. in theoretical physics from Yale University in 1982.
He subsequently persued a career in science. Since January 1992, he was worked
as the senior scientist for NVI, Inc. at NASA's Goddard Spaceflight Center, and
has resigned effective February 1, 1999. He has been an active and successful
individual investor. Mr. Gipson joined the Adviser at its formation in 1998.
The Adviser has entered into a Sub-Advisory Agreement with Cambiar
Investors, Inc., 8400 East Prentice Avenue, Suite 460, Englewood, CA 80111
("Cambiar") to serve as the sub-adviser of the Value Fund. Cambiar, a Colorado
corporation, was formed in 1973. It is a wholly-owned subsidiary of United Asset
Management Corporation, a holding company established in 1980 for the purpose of
acquiring and owning firms engaged primarily in institutional investment
management. Cambiar provides investment management services to corporations,
foundations, endowments, pension and profit-sharing plans, trusts, estates and
other institutions and individuals. As of December 1, 1998, Cambiar had over
$____ billion in assets under management. The investment decisions of the Value
Fund are made by a committee of Cambiar, which is primarily responsible for the
day-to-day management of the Fund's portfolio. The Adviser has agreed to pay
Cambiar a sub-advisory fee equal to an annual average rate of 0.50% of the
average daily net assets of the Value Fund.
Each Fund retains American Data Services, Inc., 150 Motor Parkway,
Hauppauge, New York 11788-5108 (the "Administrator") to manage the Funds'
business affairs and provide the Funds with administrative services, including
all regulatory reporting and necessary office equipment, personnel and
facilities. Each Fund also retains American Data Services, Inc. (the "Transfer
Agent") to serve as transfer agent, dividend paying agent and shareholder
service agent. For its services as Administrator and Transfer Agent, American
Data Services, Inc. receives a monthly fee from the Adviser based on assets and
the number of shareholder accounts serviced, subject to an annual minimum fee of
$42,000.
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<PAGE>
Each Fund retains ADS Distributors, Inc., P.O. Box 5536, Hauppauge, New
York 11788-0132 (the "Distributor") to act as the principal distributor of the
Funds' shares. The services of the Administrator, Transfer Agent and Distributor
are operating expenses paid by the Adviser.
Consistent with the Rules of Fair Practice of the National Association
of Securities Dealers, Inc., and subject to its obligation of seeking best
qualitative execution, the Adviser may give consideration to sales of shares of
a Fund as a factor in the selection of brokers and dealers to execute portfolio
transactions. The Adviser (not the Funds) may pay certain financial institutions
(which may include banks, brokers, securities dealers and other industry
professionals) a fee for providing distribution related services and/or for
performing certain administrative functions for Fund shareholders to the extent
these institutions are allowed to do so by applicable statute, rule or
regulation.
HISTORICAL PERFORMANCE OF SUB-ADVISER TO VALUE FUND
Set forth below are certain performance data provided by the
Sub-Adviser relating to the composite of separately managed accounts of clients
of the Sub-Adviser. The composite is entirely composed of those accounts with
the same investment objective as the Value Fund and managed using substantially
similar, though not in all cases identical, investment strategies, techniques
and policies as those contemplated for use by the Sub-Adviser in managing the
Value Fund. The performance data for the managed accounts is net of all fees and
expenses. The investment returns of the Value Fund may differ from those of the
separately managed accounts because such separately managed accounts will have
fees and expenses that differ from those of the Value Fund. Further, the
separately managed accounts are not subject to investment limitations,
diversification requirements, and other restrictions imposed by the 1940 Act and
Internal Revenue Code; such conditions, if applicable, may have lowered the
returns for the separately managed accounts. The results presented are not
intended to predict or suggest the return to be experienced by the Value Fund or
the return an investor might achieve by investing in the Value Fund.
CAMBIAR INVESTORS, INC. -- COMPOSITE RETURNS
FOR INDIVIDUAL YEARS ENDED DECEMBER 31
(PERCENTAGE RETURNS NET OF MANAGEMENT FEES)
CALENDAR YEARS CAMBIAR INVESTORS, INC. S&P 500 INDEX
- - -------------- ----------------------- -------------
1975 ................................ 34.80% 37.20 %
1976 ................................ 32.40% 23.80 %
1977 ................................ 14.40% (7.20)%
1978 ................................ 22.50% 6.60 %
1979 ................................ 24.00% 18.40 %
1980 ................................ 25.50% 32.40 %
1981 ................................ 9.80% (4.90)%
1982 ................................ 33.30% 21.60 %
1983 ................................ 22.60% 22.40 %
1984 ................................ 2.90% 6.10 %
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<PAGE>
1985................................. 29.30% 31.57 %
1986................................. 23.67% 18.21 %
1987................................. 6.10% 5.17 %
1988................................. 17.11% 16.50 %
1989................................. 23.23% 31.43 %
1990................................. 2.83% (3.19)%
1991................................. 31.51% 30.55 %
1992................................. 9.56% 7.68 %
1993................................. 13.66% 10.00 %
1994................................. 1.00% 1.33 %
1995................................. 33.54% 37.50 %
1996................................. 23.92% 23.25 %
1997................................. 33.69% 33.36 %
Cumulative (1/1/75-12/31/97)......... 6,517.30% 3,299.40 %
1-year period ended 12/31/97
(average annual)................ 33.69% 33.36 %
5-year period ended 12/31/97
(average annual)................ 20.49% 20.30 %
10-year period ended 12/31/97
(average annual)................ 18.44% 18.04 %
23-Year Mean (1/1/75-12/31/97)....... 20.50% 17.40 %
Value of $1 invested during (1/1/75-12/31/97) $65.17 $32.99
Notes:
1. The annualized return is calculated from monthly data, allowing for
compounding. This methodology of calculating returns is different than the
SEC Standard, which may produce different results.
2. The cumulative return means that $1 invested in the account on January 1,
1975 had grown to $65.17 by December 31, 1997.
3. The 23-year mean is the arithmetic average of the annual returns for the
calendar years listed. 4. The S&P 500 Index is an unmanaged index which
assumes reinvestment of dividends and is generally considered representative
of securities similar to those invested in by the Adviser for the purpose of
the composite performance numbers set forth above.
5. During the period shown (1/1/75-12/31/97), fees on the Adviser's individual
accounts ranged from 0.25% to 2.0% (25 basis points to 200 basis points).
The Adviser's returns presented above are net of the maximum fee of 2.0%.
Net returns to investors vary depending on the management fee.
INVESTMENT POLICIES AND TECHNIQUES AND RISK CONSIDERATIONS
This section contains general information about various types of securities
and investment techniques that the Funds may purchase or employ. The Statement
of Additional Information provides more information.
EQUITY SECURITIES. Equity securities include common stock, rights and warrants.
Common stocks, the most familiar type, represent an equity (ownership) interest
in a corporation. Warrants are options to purchase equity securities at a
specified price for a specific time period. Rights are similar to warrants, but
normally have a short duration and are distributed by the issuer to its
shareholders. Although equity securities have a history of long-term growth in
value, their prices fluctuate based on changes in a company's financial
condition and on overall market and economic conditions.
- 14 -
<PAGE>
Each Fund may invest up to 25% of its assets in foreign equity securities by
purchasing American Depository Receipts ("ADRs"). ADRs are certificates
evidencing ownership of shares of a foreign- based issuer held in trust by a
bank or similar financial institution. They are alternatives to the direct
purchase of the underlying securities in their national markets and currencies.
The Small Cap Quant Fund may also purchase the equity securities of Canadian
companies listed on Canadian exchanges. To the extent that a Fund does invest in
foreign securities, such investments may be subject to special risks. 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 than 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.
Investments in equity securities are subject to inherent market risks and
fluctuations in value due to earnings, economic conditions and other factors
beyond the control of the Adviser. As a result, the return and net asset value
of a Fund will fluctuate. Securities in a Fund's portfolio may not increase as
much as the market as a whole and some undervalued securities may continue to be
undervalued for long periods of time. Although profits in some Fund holdings may
be realized quickly, it is not expected that most investments will appreciate
rapidly.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. Each Fund may purchase securities
on a when- issued or delayed delivery basis. Delivery of and payment for these
securities may take place as long as a month or more after the date of the
purchase commitment. The value of these securities is subject to market
fluctuation during this period and no income accrues to the Fund until
settlement takes place. The Fund maintains with the Custodian a segregated
account containing high grade liquid securities in an amount at least equal to
these commitments. In when-issued and delayed delivery transactions, the Fund
relies on the seller to complete the transaction. The seller's failure to
complete the transaction may cause the Fund to miss a price or yield considered
to be advantageous. [A Fund may engage in these types of purchases in order to
buy securities that fit within its investment objective at attractive prices,
not to increase its investment leverage.]
REPURCHASE AGREEMENTS. Each Fund may invest in repurchase agreements fully
collateralized by U.S. Government obligations. A repurchase agreement is a
short-term investment in which the purchaser (i.e., the Fund) acquires ownership
of a U.S. Government obligation (which may be of any maturity) and the seller
agrees to repurchase the obligation at a future time at a set price, thereby
determining the yield during the purchaser's holding period (usually not more
than seven days from the date of purchase). Any repurchase transaction in which
the Fund engages will require full collateralization of the seller's obligation
during the entire term of the repurchase agreement. In the event of a bankruptcy
or other default of the seller, the Fund could experience both delays in
liquidating the underlying security and losses in value. However, each Fund
intends to enter into
- 15 -
<PAGE>
repurchase agreements only with Star Bank, N.A. (the Fund's Custodian), other
banks with assets of $1 billion or more and registered securities dealers
determined by the Adviser (subject to review by the Board of Trustees) to be
creditworthy. The Adviser monitors the creditworthiness of the banks and
securities dealers with which the Fund engages in repurchase transactions.
SHORT SALES. The Small Cap Quant Fund may sell a security short in anticipation
of a decline in the market value of the security. When the Fund engages in a
short sale, it sells a security which it does not own. To complete the
transaction, the Fund must borrow the security in order to deliver it to the
buyer. The Fund must replace the borrowed security by purchasing it at the
market price at the time of replacement, which may be more or less than the
price at which the Fund sold the security. The Fund will incur a loss as a
result of the short sale if the price of the security increases between the date
of the short sale and the date on which the Fund replaces the borrowed security.
The Fund will realize a profit if the security declines in price between those
dates.
In connection with its short sales, the Small Cap Quant Fund will be
required to maintain a segregated account with the Custodian of cash or high
grade liquid assets equal to the market value of the securities sold less any
collateral deposited with its broker. The Fund will limit its short sales so
that no more than 10% of its net assets (less all its liabilities other than
obligations under the short sales) will be deposited as collateral and allocated
to the segregated account. However, the segregated account and deposits will not
necessarily limit the Fund's potential loss on a short sale, which is unlimited.
FUTURES AND OPTIONS. The Small Cap Quant Fund may buy and write put and call
options, and may invest in futures contracts, provided the Fund's investment in
each does not exceed 5% of its assets. The Statement of Additional Information
provides information about these securities and the risks involved.
BORROWING. Each Fund may borrow up to one third of the value of its total assets
as a temporary measure for extraordinary or emergency purposes (including to
meet redemption requests). Neither Fund will purchase any securities while
borrowings representing more than 5% of its assets are outstanding.
GENERAL INFORMATION
FUNDAMENTAL POLICIES. The investment limitations set forth in the Statement
of Additional Information as fundamental policies may not be changed without the
affirmative vote of the majority of the outstanding shares of the applicable
Fund. The investment objective of each Fund may be changed without the
affirmative vote of a majority of the outstanding shares of the Fund. Any such
change may result in the Fund having an investment objective different from the
objective which the shareholders considered appropriate at the time of
investment in the Fund.
PORTFOLIO TURNOVER. Neither of the Funds intends to purchase or sell
securities for short term trading purposes. However, if the objective of a Fund
would be better served, short-term profits or losses may be realized from time
to time. It is anticipated that the portfolio turnover will not exceed 50%
annually for the Value Fund and 200% annually for the Small Cap Quant Fund. The
brokerage commissions incurred by the Small Cap Quant Fund will generally be
higher than those incurred by a fund with a lower portfolio turnover rate. The
Small Cap Quant Fund's higher turnover rate may result in the realization, for
federal tax purposes, of more net capital gains, and any distributions derived
from such gains may be ordinary income.
- 16 -
<PAGE>
SHAREHOLDER RIGHTS. Any Trustee of the Trust may be removed by vote of the
shareholders holding not less than two-thirds of the outstanding shares of the
Trust. The Trust does not hold an annual meeting of shareholders. When matters
are submitted to shareholders for a vote, each shareholder is entitled to one
vote for each whole share he owns and fractional votes for fractional shares he
owns. All shares of a Fund have equal voting rights and liquidation rights.
Prior to the offering made by this Prospectus, Robert E. Gipson and Corporate
Management Group Retirement Plan purchased for investment all of the outstanding
shares of each Fund and each may be deemed to control the Funds.
Each Fund acknowledges that it is solely responsible for the information or
any lack of information about it in this joint Prospectus and in the joint
Statement of Additional Information, and no other Fund is responsible therefor.
There is a possibility that one Fund might be deemed liable for misstatements or
omissions regarding another Fund in this Prospectus or in the joint Statement of
Additional Information; however, the Funds deem this possibility slight.
PERFORMANCE INFORMATION
Each Fund may periodically advertise "average annual total return." The
"average annual total return" of a Fund refers to the average annual compounded
rate of return over the stated period that would equate an initial amount
invested at the beginning of a stated period to the ending redeemable value of
the investment. The calculation of "average annual total return" assumes the
reinvestment of all dividends and distributions.
Each Fund may also advertise performance information (a "non-standardized
quotation") which is calculated differently from "average annual total return."
A non-standardized quotation of total return may be a cumulative return which
measures the percentage change in the value of an account between the beginning
and end of a period, assuming no activity in the account other than reinvestment
of dividends and capital gains distributions. A non-standardized quotation may
also be an average annual compounded rate of return over a specified period,
which may be a period different from those specified for "average annual total
return." In addition, a non-standardized quotation may be an indication of the
value of a $10,000 investment (made on the date of the initial public offering
of the Fund's shares) as of the end of a specified period. A non-standardized
quotation will always be accompanied by the Fund's "average annual total return"
as described above.
Each Fund may also include in advertisements data comparing performance with
other mutual funds as reported in non-related investment media, published
editorial comments and performance rankings compiled by independent
organizations and publications that monitor the performance of mutual funds
(such as Lipper Analytical Services, Inc., Morningstar, Inc., Fortune or
Barron's). Performance information may be quoted numerically or may be presented
in a table, graph or other illustration. In addition, Fund performance may be
compared to well-known indices of market performance including the Standard &
Poor's (S&P) 500 Index and the Dow Jones Industrial Average.
- 17 -
<PAGE>
THE ADVERTISED PERFORMANCE DATA OF EACH FUND IS BASED ON HISTORICAL
PERFORMANCE AND IS NOT INTENDED TO INDICATE FUTURE PERFORMANCE. RATES OF TOTAL
RETURN QUOTED BY A FUND MAY BE HIGHER OR LOWER THAN PAST QUOTATIONS, AND THERE
CAN BE NO ASSURANCE THAT ANY RATE OF TOTAL RETURN WILL BE MAINTAINED. THE
PRINCIPAL VALUE OF AN INVESTMENT IN EACH FUND WILL FLUCTUATE SO THAT A
SHAREHOLDER'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE
SHAREHOLDER'S ORIGINAL INVESTMENT.
INVESTMENT ADVISER INVESTMENT SUB-ADVISER
ALPHA ANALYTICS INVESTMENT GROUP, LLC (TO THE VALUE FUND)
c/o Corporate Management Group, Inc. Cambiar Investors, Inc.
1901 Avenue of the Stars, Suite 1100 8400 East Prentice Avenue, Suite 460
Los Angeles, CA 90067 Englewood, CO 80111
LEGAL COUNSEL ADMINISTRATOR
Brown, Cummins & Brown Co., L.P.A. American Data Services, Inc.
3500 Carew Tower, 441 Vine Street 150 Motor Parkway
Cincinnati, OH 45202 Hauppauge, New York 11788-5108
CUSTODIAN DISTRIBUTOR
Star Bank, N.A. ADS Distributors, Inc.
425 Walnut Street, M.L. 6118 150 Motor Parkway
Cincinnati, Ohio 45202 Hauppauge, New York 11788-5108
Transfer Agent (all purchases and INDEPENDENT AUDITORS
all redemption requests) McCurdy & Associates, CPA's
American Data Services, Inc. 27955 Clemens Road
P.O. Box 5536 Westlake, Ohio 44145
Hauppauge, New York 11788-0132
No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offering contained in this Prospectus, and if given or made, such
information or representations must not be relied upon as being authorized by a
Fund. This Prospectus does not constitute an offer by any of the Funds to sell
its shares in any state to any person to whom it is unlawful to make such offer
in such state.
- 18 -
<PAGE>
TABLE OF CONTENTS
PAGE
SUMMARY OF FUND EXPENSES .................................................. 2
Shareholder Transaction Expenses ...................................... 2
THE FUNDS ................................................................. 3
INVESTMENT OBJECTIVE AND STRATEGIES ....................................... 3
HOW TO INVEST IN THE FUNDS ................................................ 4
Initial Purchase ...................................................... 5
Additional Investments ................................................ 5
Tax Sheltered Retirement Plans ........................................ 6
Other Purchase Information ............................................ 6
HOW TO REDEEM SHARES ...................................................... 6
By Mail ............................................................... 7
By Telephone .......................................................... 7
Redemption Fee ........................................................ 7
Additional Information ................................................ 7
SHARE PRICE CALCULATION ................................................... 8
DIVIDENDS AND DISTRIBUTIONS ............................................... 9
TAXES ..................................................................... 9
OPERATION OF THE FUNDS .................................................... 10
HISTORICAL PERFORMANCE .................................................... 11
INVESTMENT POLICIES AND TECHNIQUES AND RISK CONSIDERATIONS ................ 12
Equity Securities ..................................................... 12
When-Issued and Delayed Delivery Securities ........................... 13
Repurchase Agreements ................................................. 13
Short Sales ........................................................... 13
Futures and Options ................................................... 14
Borrowing ............................................................. 14
GENERAL INFORMATION ....................................................... 14
Fundamental Policies .................................................. 14
Portfolio Turnover .................................................... 14
Shareholder Rights ............................................... 14
PERFORMANCE INFORMATION ................................................... 15
- 19 -
<PAGE>
ALPHA ANALYTICS INVESTMENT TRUST
ALPHA ANALYTICS VALUE FUND
ALPHA ANALYTICS SMALL CAP QUANT FUND
STATEMENT OF ADDITIONAL INFORMATION
____________________, 1998
This Statement of Additional Information is not a prospectus. It should be
read in conjunction with the Prospectus of Alpha Analytics Value Fund and Alpha
Analytics Small Cap Quant Fund dated ________________, 1998. A copy of the
Prospectus can be obtained by writing the Transfer Agent, American Data
Services, Inc., at P.O. Box 5536, Hauppauge, New York 11788-0132, or by calling
1-888-_______.
- 20 -
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
-----------------------------------
TABLE OF CONTENTS
-----------------
PAGE
----
DESCRIPTION OF THE TRUST .................................................. 1
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK
CONSIDERATIONS ........................................................... 1
INVESTMENT LIMITATIONS .................................................... 5
INVESTMENT ADVISORY ARRANGEMENTS .......................................... 8
TRUSTEES AND OFFICERS ..................................................... 8
PORTFOLIO TRANSACTIONS AND BROKERAGE ...................................... 9
DETERMINATION OF SHARE PRICE .............................................. 10
INVESTMENT PERFORMANCE .................................................... 11
CUSTODIAN ................................................................. 12
TRANSFER AGENT ............................................................ 12
ACCOUNTANTS ............................................................... 12
DISTRIBUTOR ............................................................... 12
- 21 -
<PAGE>
DESCRIPTION OF THE TRUST
Alpha Analytics Value Fund (the "Value Fund") and Alpha Analytics Small
Cap Quant Fund (the "Small Cap Quant Fund") (each a "Fund" or collectively, the
"Funds") were organized as series of Alpha Analytics Investment Trust (the
"Trust"). The Trust is an open-end investment company established under the laws
of Ohio by an Agreement and Declaration of Trust dated August 18, 1998 (the
"Trust Agreement") and has no prior history. The Trust Agreement permits the
Trustees to issue an unlimited number of shares of beneficial interest of
separate series without par value.
Each share of a series represents an equal proportionate interest in
the assets and liabilities belonging to that series with each other share of
that series and is entitled to such dividends and distributions out of income
belonging to the series as are declared by the Trustees. The shares do not have
cumulative voting rights or any preemptive or conversion rights, and the
Trustees have the authority from time to time to divide or combine the shares of
any series into a greater or lesser number of shares of that series so long as
the proportionate beneficial interest in the assets belonging to that series and
the rights of shares of any other series are in no way affected. In case of any
liquidation of a series, the holders of shares of the series being liquidated
will been titled to receive as a class a distribution out of the assets, net of
the liabilities, belonging to that series. Expenses attributable to any series
are borne by that series. Any general expenses of the Trust not readily
identifiable as belonging to a particular series are allocated by or under the
direction of the Trustees in such manner as the Trustees determine to be fair
and equitable. No shareholder is liable to further calls or to assessment by the
Trust without his or her express consent.
For information concerning the purchase and redemption of shares of the
Fund, see "How to Invest in the Fund" and "How to Redeem Shares" in the Funds'
Prospectus. For a description of the methods used to determine the share price
and value of a Fund's assets, see "Share Price Calculation" in the Funds'
Prospectus.
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK CONSIDERATIONS
This section contains a more detailed discussion of some of the
investments the Funds may make and some of the techniques they may use, as
described in the Prospectus (see "Investment Objectives and Strategies" and
"Investment Policies and Techniques and Risk Considerations").
A. AMERICAN DEPOSITORY RECEIPTS (ADRS). ADRs are subject to risks
-----------------------------------
similar to those associated with direct investment in foreign securities. For
example, 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.
- 1 -
<PAGE>
B. OPTION TRANSACTIONS. Up to 5% of the Small Cap Quant Fund's net
-------------------
assets may be invested 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.
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 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.
C. FUTURES CONTRACTS. When the Small Cap Quant Fund purchases a futures
-----------------
contract, it agrees to purchase a specified underlying instrument at a specified
future date. When the Fund sells a futures contract, it agrees to sell the
underlying instrument at a specified future date. The price at which the
purchase and sale will take place is fixed when the Fund enters into the
contract. Some currently available futures contracts are based on specific
securities, such as U.S. Treasury bonds or notes, and some are based on indices
of securities, such as the Standard & Poor's 500 Composite Stock Price Index
("S&P 500"). Futures can be held until their delivery dates, or can be closed
out before then if a liquid secondary market is available.
-2-
<PAGE>
The value of a futures contract tends to increase and decrease in
tandem with the value of its underlying instrument. Therefore, purchasing
futures contracts will tend to increase a Funds's exposure to positive and
negative price fluctuations in the underlying instrument, much as if it had
purchased the underlying instrument directly. When the Small Cap Quant Fund
sells a futures contract, by contrast, the value of its futures position will
tend to move in a direction contrary to the market. Selling futures contracts,
therefore, will tend to offset both positive and negative market price changes,
much as if the underlying instrument had been sold. Successful use of futures
contracts will depend on the Adviser's ability to predict the future direction
of stock prices or interest rates and incorrect predictions by the Adviser may
have an adverse effect on the Fund. In this regard, it should be noted that the
skills and techniques necessary to arrive at such predictions are different from
those needed to predict price changes in individual stocks.
D. BORROWING. Because the Funds' investments will fluctuate in value,
---------
whereas the interest obligations on borrowed funds may be fixed, during times of
borrowing, the Funds' net asset value may tend to increase more when its
investments increase in value, and decrease more when its investments decrease
in value. In addition, interest costs on borrowings may fluctuate with changing
market interest rates and may partially offset or exceed the return earned on
the borrowed funds. Also, during times of borrowing under adverse market
conditions, the Funds might have to sell portfolio securities to meet interest
or principal payments at a time when fundamental investment considerations would
not favor such sales.
INVESTMENT LIMITATIONS
FUNDAMENTAL. The investment limitations described below have been
-----------
adopted by the Trust with respect to each Fund and are fundamental
("Fundamental"), i.e., they may not be changed without the affirmative vote of a
majority of the outstanding shares of each Fund. As used in the Prospectus and
the Statement of Additional Information, the term "majority" of the outstanding
shares of the Fund means the lesser of (1) 67% or more of the outstanding shares
of the Fund present at a meeting, if the holders of more than 50% of the
outstanding shares of the Fund are present or represented at such meeting; or
(2) more than 50% of the outstanding shares of the Fund. Other investment
practices which may be changed by the Board of Trustees without the approval of
shareholders to the extent permitted by applicable law, regulation or regulatory
policy are considered non-fundamental ("Non- Fundamental").
1. BORROWING MONEY. The Funds will not borrow money, except (a) from a
---------------
bank, provided that immediately after such borrowing there is an asset coverage
of 300% for all borrowings of the Fund; or (b) from a bank or other persons for
temporary purposes only, provided that such temporary borrowings are in an
amount not exceeding 5% of the Fund's total assets at the time when the
borrowing is made. This limitation does not preclude the Fund from entering into
reverse repurchase transactions, provided that the Fund has an asset coverage of
300% for all borrowings and repurchase commitments of the Fund pursuant to
reverse repurchase transactions.
2. SENIOR SECURITIES. The Funds will not issue senior securities. This
------------------
limitation is not applicable to activities that may be deemed to involve the
issuance or sale of a senior security by the Fund, provided that the Fund's
engagement in such activities is consistent with or permitted by the Investment
Company Act of 1940, as amended, the rules and regulations promulgated
thereunder or interpretations of the Securities and Exchange Commission or its
staff.
-3-
<PAGE>
3. UNDERWRITING. The Funds will not act as underwriter of securities
------------
issued by other persons. This limitation is not applicable to the extent that,
in connection with the disposition of portfolio securities (including restricted
securities), the Fund may be deemed an underwriter under certain federal
securities laws.
4. REAL ESTATE. The Funds will not purchase or sell real estate. This
-----------
limitation is not applicable to investments in marketable securities which are
secured by or represent interests in real estate. This limitation does not
preclude the Fund from investing in mortgage-related securities or investing in
companies engaged in the real estate business or that have a significant portion
of their assets in real estate (including real estate investment trusts).
5. COMMODITIES. The Funds will not purchase or sell commodities unless
-----------
acquired as a result of ownership of securities or other investments. This
limitation does not preclude the Fund from purchasing or selling options or
futures contracts, from investing in securities or other instruments backed by
commodities or from investing in companies which are engaged in a commodities
business or have a significant portion of their assets in commodities.
6. LOANS. The Funds will not make loans to other persons, except (a) by
-----
loaning portfolio securities, (b) by engaging in repurchase agreements, or (c)
by purchasing nonpublicly offered debt securities. For purposes of this
limitation, the term "loans" shall not include the purchase of a portion of an
issue of publicly distributed bonds, debentures or other securities.
7. CONCENTRATION. Neither Fund will invest 25% or more of its total
-------------
assets in a particular industry. This limitation is not applicable to
investments in obligations issued or guaranteed by the U.S. government, its
agencies and instrumentalities or repurchase agreements with respect thereto.
With respect to the percentages adopted by the Trust as maximum
limitations on its investment policies and limitations, an excess above the
fixed percentage will not be a violation of the policy or limitation unless the
excess results immediately and directly from the acquisition of any security or
the action taken. This paragraph does not apply to the borrowing policy set
forth in paragraph 1 above.
Notwithstanding any of the foregoing limitations, any investment
company, whether organized as a trust, association or corporation, or a personal
holding company, may be merged or consolidated with or acquired by the Trust,
provided that if such merger, consolidation or acquisition results in an
investment in the securities of any issuer prohibited by said paragraphs, the
Trust shall, within ninety days after the consummation of such merger,
consolidation or acquisition, dispose of all of the securities of such issuer so
acquired or such portion thereof as shall bring the total investment therein
within the limitations imposed by said paragraphs above as of the date of
consummation.
NON-FUNDAMENTAL. The following limitations have been adopted by the
---------------
Trust with respect to the Fund and are Non-Fundamental (see "Investment
Restrictions" above).
1. PLEDGING. The Funds will not mortgage, pledge, hypothecate or in any
--------
manner transfer, as security for indebtedness, any assets of the Fund
except as may be necessary in connection with borrowings described in limitation
(1) above. Margin deposits, security interests, liens and collateral
arrangements with respect to transactions involving options, futures contracts,
short sales and other permitted investments and techniques are not deemed to be
a mortgage, pledge or hypothecation of assets for purposes of this limitation.
-4-
<PAGE>
2. BORROWING. Neither Fund will purchase any security while borrowings
---------
representing more than 5% of its total assets are outstanding.
3. MARGIN PURCHASES. Neither Fund will purchase securities or evidences
----------------
of interest thereon on "margin." This limitation is not applicable to short term
credit obtained by a Fund for the clearance of purchases and sales or redemption
of securities, or to arrangements with respect to transactions involving
options, futures contracts, short sales and other permitted investments and
techniques.
4. SHORT SALES. The Alpha Analytics Value Fund will not effect short
-----------
sales of securities.
5. OPTIONS. The Alpha Analytics Value Fund will not purchase or sell
-------
puts, calls, options or straddles.
6. ILLIQUID INVESTMENTS. Neither Fund will invest in securities for
--------------------
which there are legal or contractual restrictions on resale and other illiquid
securities.
7. LOANS OF PORTFOLIO SECURITIES. Neither Fund will make loans of
-----------------------------
portfolio securities (the Funds have no current intention to loan portfolio
securities).
INVESTMENT ADVISORY ARRANGEMENTS
Investment Adviser. The investment adviser to each Fund is Alpha
Analytics Investment Group LLC, 1901 Avenue of the Stars, Suite 1100, Los
Angeles, CA 90067 (the "Adviser"). Robert E. Gipson is a Trustee and the
President of the Trust. He is also the President and managing member of the
Adviser and, as such, controls the Adviser. As a result, he is an affiliate of
the Trust and the Adviser.
Under the terms of each Fund's management agreement (each an
"Agreement" or collectively the "Agreements"), the Adviser manages each Fund's
investments subject to approval of the Board of Trustees and pays all of the
expenses of each Fund except brokerage, taxes, interest, fees and expenses of
the non-interested person trustees and extraordinary expenses. As compensation
for its management services and agreement to pay the Fund's expenses, each Fund
is obligated to pay the Adviser a fee computed and accrued daily and paid
monthly at an annual rate of 1.50% of the average daily net assets of the Fund.
The Adviser may waive all or part of its fee, at any time, and at its sole
discretion, but such action shall not obligate the Adviser to waive any fees in
the future.
The Adviser retains the right to use the name "Alpha Analytics" or any
variation thereof in connection with another investment company or business
enterprise with which the Adviser is or may become associated. The Trust's right
to use the name "Alpha Analytics" in connection with each Fund automatically
ceases ninety days after termination of the respective Agreement and may be
withdrawn by the Adviser on ninety days written notice.
The Adviser may make payments to banks or other financial institutions
that provide shareholder services and administer shareholder accounts. The
Glass-Steagall Act prohibits banks from engaging in the business of
underwriting, selling or distributing securities. Although the scope
-5-
<PAGE>
of this prohibition under the Glass-Steagall Act has not been clearly defined by
the courts or appropriate regulatory agencies, management of the Funds believes
that the Glass-Steagall Act should not preclude a bank from providing such
services. However, state securities laws on this issue may differ from the
interpretations of federal law expressed herein and banks and financial
institutions may be required to register as dealers pursuant to state law. If a
bank were prohibited from continuing to perform all or a part of such services,
management of the Funds believes that there would be no material impact on any
Fund or its shareholders. Banks may charge their customers fees for offering
these services to the extent permitted by applicable regulatory authorities, and
the overall return to those shareholders availing themselves of the bank
services will be lower than to those shareholders who do not. Each Fund may from
time to time purchase securities issued by banks which provide such services;
however, in selecting investments for the Funds, no preference will be shown for
such securities.
SUB-ADVISER. Cambiar Investors, Inc., ("Cambiar") is the Sub-adviser to
-----------
the Value Fund. Cambiar is a wholly-owned subsidiary of United Asset Management
Corporation, a holding company. Under the terms of the Sub-Advisory Agreement,
the Sub-adviser receives a fee from the Adviser computed and accrued daily and
paid monthly at an annual rate of 0.50% of the average daily net assets of the
Fund.
Subject always to the control of the Board of Trustees, the
Sub-Adviser, at its expense, furnishes continuously an investment program for
the Value Fund. The Sub-Adviser must use its best judgement to make investment
decisions on behalf of the Value Fund, place all orders for the purchase and
sale of portfolio securities and execute all agreements related thereto. The
Sub-Adviser makes its officers and employees available to the Adviser from time
to time at reasonable times to review investment policies of the Value Fund and
to consult with the Adviser regarding the investment affairs of the Fund. The
Sub-Adviser maintains books and records with respect to the securities
transactions of the Value Fund and renders to the Adviser such periodic and
special reports as the Adviser or the Trustees may request. The Sub-Adviser pays
all expenses incurred by it in connection with its activities under this
Agreement other than the cost (including taxes and brokerage commissions, if
any) of securities and investments purchased for the Value Fund.
-6-
<PAGE>
TRUSTEES AND OFFICERS
The names of the Trustees and executive officers of the Trust are shown
below. Each Trustee who is an "interested person" of the Trust, as defined in
the Investment Company Act of 1940, is indicated by an asterisk.
<TABLE>
<CAPTION>
===========================================================================================================
NAME, AGE AND ADDRESS POSITION PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS
- - -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Robert E. Gipson* President Vice President of Sundance Group, Inc., a holding
Age: 52 and Trustee company, from 1993 to present; Chairman of National
1901 Avenue of the Stars Mercantile Bancorp from June 1997 to present; Director of
Suite 1100 National Mercantile Bancorp from October 1996 to
Los Angeles, CA 90067 present; Of Counsel at Gipson, Hoffman & Pancione from
July 1997 to present; Officer at Gipson, Hoffman &
Pancione from December 1983 to July 1997;
Owner/Officer of Corporate Management Group, Inc., a
business and financial consulting company, from August
1988 to present.
- - -----------------------------------------------------------------------------------------------------------
Jack P. McNally* Secretary, Vice President of Corporate Management Group, Inc. from
Age: 43 Treasurer 1989 to present.
1901 Avenue of the Stars and Trustee
Suite 1100
Los Angeles, CA 90067
- - -----------------------------------------------------------------------------------------------------------
Donald J. Alschuler Trustee Partner of Donlyn Company, a private investment
Age: 63 company, from 1962 to present; Vice President of Lyndon
13104 Nimrod Place Distribution Services, Inc., a warehousing and distribution
Los Angeles, CA 90049 company, from 1988 to 1998; Chairman of Wisdom, Inc., a
business advisory services company, from 1991 to present;
President of Modern Service Office Supply Co., Inc., an office
products marketer and distributor, from 1963 to 1993.
- - -----------------------------------------------------------------------------------------------------------
Michelle M. Schoeffel Trustee Chief Executive Officer and Chairwoman of Pacific
Age: 38 American Securities, a broker/dealer, from January 1998 to
550 South Hope Street present; Vice President of Mellon Private Asset
Suite 1025 Management from November 1993 to April 1997.
Los Angeles, CA 90071
- - -----------------------------------------------------------------------------------------------------------
Felice R. Cutler Trustee Partner at the Law Offices of Cutler & Cutler from 1966 to
Age: 61 1998; Director of Aegis Consumer Funding Group, Inc., a
813 Greenway Drive consumer finance company, from 1996 to 1998; Trustee of
Beverly Hills, CA 90210 Astra Institutional Securities Trust and Astra Institutional
Trust from 1995 to 1997; Director and Trustee of Pilgrim
Group Family of Funds from 1986 to 1995.
===========================================================================================================
</TABLE>
Trustee fees are Trust expenses and each series of the Trust pays a
portion of the Trustee fees. The following table estimates the Trustees'
compensation for the first fiscal period of the Trust ending July 31, 1999.
==========================================================================
TOTAL COMPENSATION
FROM TRUST (THE TRUST IS
NAME NOT IN A FUND COMPLEX)
- - --------------------------------------------------------------------------
Robert E. Gipson $0
- - --------------------------------------------------------------------------
Jack P. McNally $0
- - --------------------------------------------------------------------------
Donald J. Alschuler $6,000
- - --------------------------------------------------------------------------
Michelle M. Schoeffel $6,000
- - --------------------------------------------------------------------------
Felice R. Cutler $6,000
==========================================================================
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to policies established by the Board of Trustees of the Trust,
the Adviser is responsible for each Fund's portfolio decisions and the placing
of each Fund's portfolio transactions. In placing portfolio transactions, the
Adviser seeks the best qualitative execution for each Fund, taking into account
such factors as price (including the applicable brokerage commission or dealer
spread), the execution capability, financial responsibility and responsiveness
of the broker or dealer and the brokerage and research services provided by the
broker or dealer. The Adviser generally seeks favorable prices and commission
rates that are reasonable in relation to the benefits received.
-7-
<PAGE>
The Adviser is specifically authorized to select brokers or dealers who
also provide brokerage and research services to the Funds and/or the other
accounts over which the Adviser exercises investment discretion and to pay such
brokers or dealers a commission in excess of the commission another broker or
dealer would charge if the Adviser determines in good faith that the commission
is reasonable in relation to the value of the brokerage and research services
provided. The determination may be viewed in terms of a particular transaction
or the Adviser's overall responsibilities with respect to the Trust and to other
accounts over which it exercises investment discretion.
Research services include supplemental research, securities and
economic analyses, statistical services and information with respect to the
availability of securities or purchasers or sellers of securities and analyses
of reports concerning performance of accounts. The research services and other
information furnished by brokers through whom the Funds effect securities
transactions may also be used by the Adviser in servicing all of its accounts.
Similarly, research and information provided by brokers or dealers serving other
clients may be useful to the Adviser in connection with its services to the
Funds. Although research services and other information are useful to the Funds
and the Adviser, it is not possible to place a dollar value on the research and
other information received. It is the opinion of the Board of Trustees and the
Adviser that the review and study of the research and other information will not
reduce the overall cost to the Adviser of performing its duties to the Funds
under the Agreement.
Over-the-counter transactions will be placed either directly with
principal market makers or with broker-dealers, if the same or a better price,
including commissions and executions, is available. Fixed income securities are
normally purchased directly from the issuer, an underwriter or a market maker.
Purchases include a concession paid by the issuer to the underwriter and the
purchase price paid to a market maker may include the spread between the bid and
asked prices.
To the extent that the Trust and another of the Adviser's clients seek
to acquire the same security at about the same time, the Trust may not be able
to acquire as large a position in such security as it desires or it may have to
pay a higher price for the security. Similarly, the Trust may not be able to
obtain as large an execution of an order to sell or as high a price for any
particular portfolio security if the other client desires to sell the same
portfolio security at the same time. On the other hand, if the same securities
are bought or sold at the same time by more than one client, the resulting
participation in volume transactions could produce better executions for the
Trust. In the event that more than one client wants to purchase or sell the same
security on a given date, the purchases and sales will normally be made by
random client selection.
DETERMINATION OF SHARE PRICE
The price (net asset value) of the shares of each Fund is determined as
of 4:00 p.m., Eastern time on each day the Trust is open for business and on any
other day on which there is sufficient trading in the Fund's securities to
materially affect the net asset value. The Trust is open for business on every
day except Saturdays, Sundays and the following holidays: New Year's Day, Martin
Luther King, Jr. Day, President's Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas. For a description of the methods
used to determine the net asset value (share price), see "Share Price
Calculation" in the Prospectus.
-8-
<PAGE>
INVESTMENT PERFORMANCE
"Average annual total return," as defined by the Securities and
Exchange Commission, is computed by finding the average annual compounded rates
of return for the period indicated that would equate the initial amount invested
to the ending redeemable value, according to the following formula:
P(1+T)n=ERV
Where: P = a hypothetical $1,000 initial investment
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the applicable
period of the hypothetical $1,000 investment made at the
beginning of the applicable period.
The computation assumes that all dividends and distributions are reinvested at
the net asset value on the reinvestment dates and that a complete redemption
occurs at the end of the applicable period.
In addition to providing average annual total return, the Funds may
also provide nonstandardized quotations of total return for differing periods
and may provide the value of a $10,000 investment (made on the date of the
initial public offering of the Funds' shares) as of the end of a specified
period.
Each Fund's investment performance will vary depending upon market
conditions, the composition of the Fund's portfolio and operating expenses of
the Fund. These factors and possible differences in the methods and time periods
used in calculating non-standardized investment performance should be considered
when comparing the Fund's performance to those of other investment companies or
investment vehicles. The risks associated with each Fund's investment objective,
policies and techniques should also be considered. At any time in the future,
investment performance may be higher or lower than past performance, and there
can be no assurance that any performance will continue.
From time to time, in advertisements, sales literature and information
furnished to present or prospective shareholders, the performance of any of the
Funds may be compared to indices of broad groups of unmanaged securities
considered to be representative of or similar to the portfolio holdings of the
Funds or considered to be representative of the stock market in general. The
Funds may use the Standard & Poor's 500 Stock Index or the Dow Jones Industrial
Average.
In addition, the performance of any of the Funds may be compared to
other groups of mutual funds tracked by any widely used independent research
firm which ranks mutual funds by overall performance, investment objectives and
assets, such as Lipper Analytical Services, Inc. or Morningstar, Inc. The
objectives, policies, limitations and expenses of other mutual funds in a group
may not be the same as those of any of the Funds. Performance rankings and
ratings reported periodically in national financial publications such as
Barron's and Fortune also may be used.
-9-
<PAGE>
CUSTODIAN
Star Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45202, is
Custodian of the Funds' investments. The Custodian acts as the Funds'
depository, safekeeps its portfolio securities, collects all income and other
payments with respect thereto, disburses funds at the Funds' request and
maintains records in connection with its duties.
TRANSFER AGENT
American Data Services, Inc. ("ADS"), P.O. Box 5536, Hauppauge, New
York 11788-0132, acts as the Funds' transfer agent and, in such capacity,
maintains the records of each shareholder's account, answers shareholders'
inquiries concerning their accounts, processes purchases and redemptions of the
Funds' shares, acts as dividend and distribution disbursing agent and performs
other accounting and shareholder service functions. In addition, ADS, in its
capacity as Fund Administrator, provides the Funds with certain monthly reports,
record-keeping and other management- related services. For a description of the
fees paid by the Adviser on behalf of the Funds for these administrative
services, see "Operation of the Funds" in the Funds' Prospectus.
ACCOUNTANTS
The firm of McCurdy & Associates, CPA's, 27955 Clemens Road, Westlake,
Ohio 44145, has been selected as independent public accountants for the Trust
for the fiscal year ending July 31, 1999. McCurdy & Associates performs an
annual audit of the Funds' financial statements and provides financial, tax and
accounting consulting services as requested.
DISTRIBUTOR
ADS Distributors, Inc. (the "Distributor"), P.O. Box 5536, Hauppauge,
New York 11788-0132, is the exclusive agent for distribution of shares of the
Funds. The Distributor is obligated to sell the shares of the Funds on a best
efforts basis only against purchase orders for the shares. Shares of the Funds
are offered to the public on a continuous basis. The Distributor is an
affiliated company of ADS, the Funds' transfer agent.
<PAGE>
FINANCIAL STATEMENTS
-10-
<PAGE>
ALPHA ANALYTICS INVESTMENT TRUST
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 22, 1998
<TABLE>
<CAPTION>
Alpha Analytics
Alpha Analytics Small Cap
Value Fund Quant Fund
---------- ----------
<S> <C> <C>
ASSETS:
Cash in Bank $51,000 $51,000
------- -------
Total Assets $51,000 $51,000
------- -------
LIABILITIES: $ 0 $ 0
------- -------
Total Liabilities $ 0 $ 0
------- -------
NET ASSETS $51,000 $51,000
------- -------
NET ASSETS CONSIST OF:
Capital Paid In $51,000 $51,000
------- -------
OUTSTANDING SHARES
Unlimited Number of Shares
Authorized Without Par Value 5,100 5,100
NET ASSET VALUE PER SHARE $ 10.00 $ 10.00
MAXIMUM REDEMPTION PRICE PER SHARE $ 9.80 $ 9.80
(Net asset value x 98%)
</TABLE>
See Accountants' Audit Report
<PAGE>
ALPHA ANALYTICS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
December 22, 1998
1. ORGANIZATION Alpha Analytics Investment Trust (the "Trust") is an open-end
management investment company organized as a business trust under the laws
of the State of Ohio by a Declaration of Trust dated August 18, 1998. The
Declaration of Trust provides for an unlimited number of authorized shares
of beneficial interest without par value, which may, without shareholder
approval, be divided into an unlimited number of series of such shares, and
which presently consist of two series of shares for the Alpha Analytics
Value Fund and the Alpha Analytics Small Cap Quant Fund (the "Funds"). The
investment objective of both Funds is to provide long term capital
appreciation.
The Funds use an independent custodian and transfer agent. No transactions
other than those relating to organizational matters and the sale of 5,100
Shares of the Alpha Analytics Value Fund and 5,100 Shares of the Alpha
Analytics Small Cap Quant Fund have taken place to date.
2. RELATED PARTY TRANSACTIONS As of December 22, 1998, all of the outstanding
shares of the Funds were owned by Corporate Management Group Retirement
Plan and Robert E. Gipson and spouse. A shareholder who beneficially owns,
directly or indirectly, more than 25% of the Funds' voting securities may
be deemed a "control person" (as defined in the 1940 Act) of the Fund.
Alpha Analytics Investment Group, LLC, the Fund's investment adviser, is
registered an an investment adviser under the Investment Advisers Act of
1940. Robert Gipson is an owner and officer of Alpha Analytics Investment
Group, LLC, Corporate Management Group, Inc. and an officer and director of
the Fund.
The adviser receives from each Fund as compensation for its services to the
Funds, an annual fee of 1.5% of each Funds' net assets. The fee is paid
monthly and calculated on the basis of that month's net asseets. Through
November 30, 1999 the adviser has agreed to waive a portion of its fees so
that total expenses of each Fund will be 1.30% of average daily net assets.
The adviser pays all of the operating expenses of each Fund except
brokerage, taxes, interest, fees and expenses of non-interested person
trustees, and extraordinary expenses.
The adviser has entered into a sub-advisory agreement with Cambiar
Investors, Inc. for the Value Fund. Cambiar Investors, Inc. is an unrelated
party.
<PAGE>
ALPHA ANALYTICS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS (CONT'D)
December 22, 1998
3. CAPITAL STOCK AND DISTRIBUTION
At December 22, 1998, an unlimited number of shares were authorized and
paid in capital amounted to $51,000 for each Fund. Transactions in capital
stock were as follows:
Shares Sold:
Alpha Analytics Value Fund 5,100
Alpha Analytics Small Cap Quant Fund 5,100
Shares Redeemed:
Alpha Analytics Value Fund 0
-----
Alpha Analytics Small Cap Quant Fund 0
-----
Net Increase:
Alpha Analytics Value Fund 5,100
-----
Alpha Analytics Small Cap Quant Fund 5,100
-----
Shares Outstanding:
Alpha Analytics Value Fund 5,100
-----
Alpha Analytics Small Cap Quant Fund 5,100
-----
-1-
<PAGE>
To The Shareholders and Trustees
The Alpha Analytics Investment Trust:
We have audited the accompanying statement of assets and liabilities of the
Alpha Analytics Investment Trust (comprised of the Alpha Analytics Value Fund
and Alpha Analytics Small Cap Quant Fund) as of December 22, 1998. This
financial statement is the responsibility of the Company's management. Our
responsibility is to express an opinion on this financial statement based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of assets and liabilities is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement of assets and
liabilities. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
statement of assets and liabilities presentation. Our procedures included
confirmation of cash held by the custodian as of December 22, 1998, by
correspondence with the custodian. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the statement of assets and liabilities referred to above
presents fairly, in all material respects, the financial position of the Alpha
Analytics Value Fund and Alpha Analytics Small Cap Quant Fund as of December 22,
1998, in conformity with generally accepted accounting principles.
McCurdy & Associates CPA's, Inc.
Westlake, Ohio
December 22, 1998
<PAGE>
ALPHA ANALYTICS INVESTMENT TRUST
PART C. OTHER INFORMATION
-----------------
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
- - -------- ---------------------------------
(a) Financial Statements
Included in Part A: None
Included in Part B: Statement and Assets and Liabilities as
of December 22,1998 and Report of Independent Public Accountants
for the Alpha Analytics Value Fund and the Alpha Analytics Small
Cap Quant Fund.
(b) Exhibits
(1) Copy of Registrant's Agreement and Declaration of Trust,
which was filed as an Exhibit to Registrant's Registration
Statement, is hereby incorporated by reference.
(2) Copy of Registrant's By-Laws, which was filed as an Exhibit
to Registrant's Registration Statement, is hereby
incorporated by reference.
(3) Voting Trust Agreements - None.
(4) Specimen of Share Certificates - None.
(5) (a) Copy of Registrant's Management Agreement with its
Adviser, Alpha Analytics Investment Group LLC, for the
Small Cap Quant Fund is filed herewith.
(b) Copy of Registrant's Management Agreement with its
Adviser, Alpha Analytics Investment Group LLC, for the
Value Fund is filed herewith.
(c) Copy of Sub-Advisory Agreement between Alpha Analytics
Investment Group LLC and Cambiar Investors, Inc. is filed
herewith.
(6) Copy of Registrant's Underwriting Agreement with ADS
Distributors, Inc. is filed herewith.
(7) Bonus, Profit Sharing, Pension or Similar Contracts for the
benefit of Directors or Officers - None.
-2-
<PAGE>
(8) Copy of Registrant's Agreement with the Custodian, Star
Bank, N.A., is filed herewith.
(9) Copy of Administrative Services Agreement with American
Data Services, Inc. is filed herewith.
(10) Opinion and Consent of Brown, Cummins & Brown Co., L.P.A.,
which was filed as an Exhibit to Registrant's Registration
Statement, is hereby incorporated by reference.
(11) Consent of Independent Public Accountants is filed
herewith.
(12) Financial Statements Omitted from Item 23 - None.
(13) Copy of Letters of Initial Stockholders are filed herewith.
(14) Model Plan used in Establishment of any Retirement Plan -
None.
(15) Copy of 12b-1 Distribution Expense Plan - None.
(16) Schedule for Computation of Each Performance Quotation -
None.
(17) Financial Data Schedule is filed herewith.
(18) Rule 18f-3 Plan - None.
(19) Powers of Attorney for Registrant (and certificate with
respect thereto), Trustees and Officers are filed herewith.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE REGISTRANT
- - -------- -----------------------------------------------------------------
As of December 11, 1998, the Corporate Management Group Retirement Plan
owned a majority of the outstanding shares of the Alpha Analytics Value Fund and
the Alpha Analytics Small Cap Quant Fund, and Robert E. Gipson, as trustee of
the retirement plan, he may be deemed to control the Registrant. Mr. Gipson is
also the managing and controlling member of the Alpha Analytics Investment Group
LLC (the Registrant's Adviser), a California limited liability company, and the
sole shareholder of Corporate Management Group, Inc., a California corporation.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES (AS OF DECEMBER 22, 1998)
- - -------- ---------------------------------------------------------
TITLE OF CLASS NUMBER OF RECORD HOLDERS
-------------- ------------------------
Alpha Analytics Value Fund 2
Alpha Analytics Small Cap Quant Fund 2
-3-
<PAGE>
ITEM 27. INDEMNIFICATION
- - -------- ---------------
(a) Article VI of the Registrant's Declaration of Trust
provides for indemnification of officers and Trustees
as follows:
Section 6.4 Indemnification of Trustees, Officers,
etc. Subject to and except as otherwise provided in the
Securities Act of 1933, as amended, and the 1940 Act, the
Trust shall indemnify each of its Trustees and officers
(including persons who serve at the Trust's request as
directors, officers or trustees of another organization
in which the Trust has any interest as a shareholder,
creditor or otherwise (hereinafter referred to as a
"Covered Person") against all liabilities, including but
not limited to amounts paid in satisfaction of judgments,
in compromise or as fines and penalties, and expenses,
including reasonable accountants' and counsel fees,
incurred by any Covered Person in connection with the
defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court
or administrative or legislative body, in which such
Covered Person may be or may have been involved as a
party or otherwise or with which such person may be or
may have been threatened, while in office or thereafter,
by reason of being or having been such a Trustee or
officer, director or trustee, and except that no Covered
Person shall be indemnified against any liability to the
Trust or its Shareholders to which such Covered Person
would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of such
Covered Person's office.
Section 6.5 Advances of Expenses. The Trust shall
advance attorneys' fees or other expenses incurred by a
Covered Person in defending a proceeding to the full
extent permitted by the Securities Act of 1933, as
amended, the 1940 Act, and Ohio Revised Code Chapter
1707, as amended. In the event any of these laws conflict
with Ohio Revised Code Section 1701.13(E), as amended,
these laws, and not Ohio Revised Code Section 1701.13(E),
shall govern.
Section 6.6 Indemnification Not Exclusive, etc.
The right of indemnification provided by this Article VI
shall not be exclusive of or affect any other rights to
which any such Covered Person may be entitled. As used in
this Article VI, "Covered Person" shall include such
person's heirs, executors and administrators. Nothing
contained in this article shall affect any rights to
indemnification to which personnel of the Trust, other
than Trustees and officers, and other persons may be
entitled by contract or otherwise under law, nor the
power of the Trust to purchase and maintain liability
insurance on behalf of any such person.
-4-
<PAGE>
The Registrant may not pay for insurance which protects the
Trustees and officers against liabilities rising from action
involving willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of
their offices.
(b) The Registrant may maintain a standard mutual fund and
investment advisory professional and directors and officers
liability policy. The policy, if maintained, would provide
coverage to the Registrant, its Trustees and officers, and could
cover its Advisers, among others. Coverage under the policy
would include losses by reason of any act, error,
omission, misstatement, misleading statement, neglect
or breach of duty.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers
and controlling persons of the Registrant pursuant to the
provisions of Ohio law and the Agreement and Declaration of the
Registrant or the By-Laws of the Registrant, 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 Trust 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
- - -------- ----------------------------------------------------
A. Alpha Analytics Investment Group LLC ("AAIG"), 1901
Avenue of the Stars, Suite 1100, Los Angeles, CA
90067 is a registered investment adviser.
(1) AAIG has engaged in no other business during the past two
fiscal years.
(2) Information with respect to the substantial business
activities of Robert E. Gipson, the managing member AAIG, is
described in Part B and is hereby incorporated by reference.
ITEM 29. PRINCIPAL UNDERWRITERS
- - -------- ----------------------
(a) ADS Distributors, Inc., the Registrant's distributor, acts as
distributor for Amerindo Technology Fund, The Canandagua Funds,
and America Asia Allocation Growth Fund.
(b) Information with respect to each director and officer of ADS
Distributors, Inc. is incorporated by reference to Schedule A of
Form BD filed by it under the Securities Exchange Act of 1934
(File No. 8-49995).
-5-
<PAGE>
(c) Not applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
- - -------- --------------------------------
Accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules
promulgated thereunder will be maintained by the Registrant at 1901
Avenue of the Stars, Suite 1100, Los Angeles, CA 90067 and/or by the
Registrant's Custodian, Star Bank, N.A., 425 Walnut Street,
Cincinnati, Ohio 45202, and/or by the Registrant's Transfer Agent,
American Data Services, Inc., Hauppauge Corporate Center, 150 Motor
Parkway, Hauppauge, New York 11760.
ITEM 31. MANAGEMENT SERVICES NOT DISCUSSED IN PARTS A OR B
- - -------- -------------------------------------------------
None.
ITEM 32. UNDERTAKINGS
- - -------- ------------
(a) Not Applicable.
(b) The Registrant hereby undertakes to furnish each person to whom
a prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.
-6-
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cincinnati, State of Ohio on the 23rd day of
December, 1998.
Alpha Analytics Investment Trust
By: /s/__________________________
Donald S. Mendelsohn
Attorney-in-Fact
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.
*By: /s/__________________________
Robert E. Gipson* Donald S. Mendelsohn
President and Trustee Attorney-in-Fact
December 23, 1998
Jack P. McNally*
Treasurer and Trustee
Michelle M. Schoeffel*
Trustee
- - --------------------
Felice R. Cutler
Trustee
- - --------------------
Donald J. Alschuler
Trustee
-7-
<PAGE>
EXHIBIT INDEX
-------------
PAGE
----
1. Management Agreement for the Small Cap Quant Fund............EX-99.B5.1
2. Management Agreement for the Value Fund......................EX-99.B5.2
3. Sub-Advisory Agreement.......................................EX-99.B5.3
4. Underwriting Agreement.........................................EX-99.B6
5. Custodian Agreement............................................EX-99.B8
6. Administrative Services Agreement..............................EX-99.B9
7. Consent of Independent Public Accountants.....................EX-99.B11
8. Letters of Initial Stockholders...............................EX-99.B13
9. Financial Data Schedule...........................................EX-27
10. Powers of Attorney............................................EX-99.POA
-8-
MANAGEMENT AGREEMENT
TO: Alpha Analytics Investment Group, LLC
1901 Avenue of the Stars, Suite 1100
Los Angeles, CA 90067
Dear Sirs:
Alpha Analytics Investment Trust (the "Trust") herewith confirms our
agreement with you.
The Trust has been organized to engage in the business of an investment
company. The Trust currently offers two series of shares to investors, one of
which is the Alpha Analytics Small Cap Quant Fund (the "Fund").
You have been selected to act as the sole investment adviser of the
Fund and to provide certain other services, as more fully set forth below, and
you are willing to act as such investment adviser and to perform such services
under the terms and conditions hereinafter set forth. Accordingly, the Trust
agrees with you as follows effective upon the date of the execution of this
Agreement.
1. ADVISORY SERVICES
-----------------
You will regularly provide the Fund with such investment advice as
you in your discretion deem advisable and will furnish a continuous investment
program for the Fund consistent with the Fund's investment objectives and
policies. You will determine the securities to be purchased for the Fund, the
portfolio securities to be held or sold by the Fund and the portion of the
Fund's assets to be held uninvested, subject always to the Fund's investment
objectives, policies and restrictions, as each of the same shall be from time to
time in effect, and subject further to such policies and instructions as the
Board may from time to time establish. You will advise and assist the officers
of the Trust in taking such steps as are necessary or appropriate to carry out
the decisions of the Board and the appropriate committees of the Board regarding
the conduct of the business of the Fund as it relates to your responsibilities
otherwise provided for in this Agreement. You may delegate any or all of the
responsibilities, rights or duties described in this paragraph 1 to one or more
sub- advisers who shall enter into agreements with you and the Trust, which
agreements shall be approved and ratified by the Board.
2. ALLOCATION OF CHARGES AND EXPENSES
----------------------------------
You will pay all operating expenses of the Fund, including the
compensation and expenses of any employees of the Fund and of any other persons
rendering any services to the Fund; clerical and shareholder service staff
salaries; office space and other office expenses; fees and expenses incurred by
the Fund in connection with membership in investment company organizations;
legal, auditing and accounting expenses; expenses of registering shares under
federal and state securities laws, including expenses incurred by the Fund in
connection with the organization and initial registration of shares of the Fund;
insurance expenses; fees and expenses of the custodian, transfer agent, dividend
disbursing agent, shareholder service agent, plan agent, administrator,
accounting and pricing services agent and underwriter of the Fund; expenses,
including clerical expenses, of issue, sale, redemption or repurchase of shares
of the Fund; the cost of preparing and distributing reports and
-9-
<PAGE>
notices to shareholders, the cost of printing or preparing prospectuses and
statements of additional information for delivery to the Fund's current and
prospective shareholders; the cost of printing or preparing stock certificates
or any other documents, statements or reports to shareholders; expenses of
shareholders' meetings and proxy solicitations; advertising, promotion and other
expenses incurred directly or indirectly in connection with the sale or
distribution of the Fund's shares excluding expenses which the Fund is
authorized to pay pursuant to Rule 12b-1 under the Investment Company Act of
1940, as amended (the "1940 Act"); and all other operating expenses not
specifically assumed by the Fund.
The Fund will pay all brokerage fees and commissions, taxes,
interest, fees and expenses of the non-interested person trustees and such
extraordinary or non-recurring expenses as may arise, including litigation to
which the Fund may be a party and indemnification of the Trust's trustees and
officers with respect thereto. The Fund will also pay expenses which it is
authorized to pay pursuant to Rule 12b-1 under the 1940 Act. You may obtain
reimbursement from the Fund, at such time or times as you may determine in your
sole discretion, for any of the expenses advanced by you, which the Fund is
obligated to pay, and such reimbursement shall not be considered to be part of
your compensation pursuant to this Agreement.
3. COMPENSATION OF THE ADVISER
---------------------------
For all of the services to be rendered and payments to be made as
provided in this Agreement, as of the last business day of each month, the Fund
will pay you a fee at the annual rate of 1.50% of the average value of its daily
net assets.
The average value of the daily net assets of the Fund shall be
determined pursuant to the applicable provisions of the Declaration of Trust of
the Trust or a resolution of the Board, if required. If, pursuant to such
provisions, the determination of net asset value of the Fund is suspended for
any particular business day, then for the purposes of this paragraph, the value
of the net assets of the Fund as last determined shall be deemed to be the value
of the net assets as of the close of the business day, or as of such other time
as the value of the Fund's net assets may lawfully be determined, on that day.
If the determination of the net asset value of the Fund has been suspended for a
period including such month, your compensation payable at the end of such month
shall be computed on the basis of the value of the net assets of the Fund as
last determined (whether during or prior to such month).
4. EXECUTION OF PURCHASE AND SALE ORDERS
-------------------------------------
In connection with purchases or sales of portfolio securities for
the account of the Fund, it is understood that you will arrange for the placing
of all orders for the purchase and sale of portfolio securities for the account
with brokers or dealers selected by you, subject to review of this selection by
the Board from time to time. You will be responsible for the negotiation and the
allocation of principal business and portfolio brokerage. In the selection of
such brokers or dealers and the placing of such orders, you are directed at all
times to seek for the Fund the best qualitative execution, taking into account
such factors as price (including the applicable brokerage commission or dealer
spread), the execution capability, financial responsibility and responsiveness
of the broker or dealer and the brokerage and research services provided by the
broker or dealer.
-10-
<PAGE>
You should generally seek favorable prices and commission rates
that are reasonable in relation to the benefits received. In seeking best
qualitative execution, you are authorized to select brokers or dealers who also
provide brokerage and research services to the Fund and/or the other accounts
over which you exercise investment discretion. You are authorized to pay a
broker or dealer who provides such brokerage and research services a commission
for executing a Fund portfolio transaction which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if you determine in good faith that the amount of the commission is
reasonable in relation to the value of the brokerage and research services
provided by the executing broker or dealer. The determination may be viewed in
terms of either a particular transaction or your overall responsibilities with
respect to the Fund and to accounts over which you exercise investment
discretion. The Fund and you understand and acknowledge that, although the
information may be useful to the Fund and you, it is not possible to place a
dollar value on such information. The Board shall periodically 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 to
the Fund.
Consistent with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., and subject to seeking best qualitative
execution as described above, you may give consideration to sales of shares of
the Fund as a factor in the selection of brokers and dealers to execute Fund
portfolio transactions.
Subject to the provisions of the 1940 Act, and other applicable
law, you, any of your affiliates or any affiliates of your affiliates may retain
compensation in connection with effecting the Fund's portfolio transactions,
including transactions effected through others. If any occasion should arise in
which you give any advice to clients of yours concerning the shares of the Fund,
you will act solely as investment counsel for such client and not in any way on
behalf of the Fund. Your services to the Fund pursuant to this Agreement are not
to be deemed to be exclusive and it is understood that you may render investment
advice, management and other services to others, including other registered
investment companies.
5. LIMITATION OF LIABILITY OF ADVISER
----------------------------------
You may rely on information reasonably believed by you to be
accurate and reliable. Except as may otherwise be required by the 1940 Act or
the rules thereunder, neither you nor your shareholders, members, officers,
directors, employees, agents, control persons or affiliates of any thereof shall
be subject to any liability for, or any damages, expenses or losses incurred by
the Trust in connection with, any error of judgment, mistake of law, any act or
omission connected with or arising out of any services rendered under, or
payments made pursuant to, this Agreement or any other matter to which this
Agreement relates, except by reason of willful misfeasance, bad faith or gross
negligence on the part of any such persons in the performance of your duties
under this Agreement, or by reason of reckless disregard by any of such persons
of your obligations and duties under this Agreement.
Any person, even though also a director, officer, employee, member,
shareholder or agent of you, who may be or become an officer, director, trustee,
employee or agent of the Trust, shall be deemed, when rendering services to the
Trust or acting on any business of the Trust (other than services or business in
connection with your duties hereunder), to be rendering such services to or
acting solely for the Trust and not as a director, officer, employee, member,
shareholder or agent of you, or one under your control or direction, even though
paid by you.
-11-
<PAGE>
6. DURATION AND TERMINATION OF THIS AGREEMENT
------------------------------------------
This Agreement shall take effect on the date of its execution, and
shall remain in force for a period of two (2) years from the date of its
execution, and from year to year thereafter, subject to annual approval by (i)
the Board or (ii) a vote of a majority of the outstanding voting securities of
the Fund, provided that in either event continuance is also approved by a
majority of the trustees who are not interested persons of you or the Trust, by
a vote cast in person at a meeting called for the purpose of voting such
approval.
If the shareholders of the Fund fail to approve the Agreement in
the manner set forth above, upon request of the Board, you will continue to
serve or act in such capacity for the Fund for the period of time pending
required approval of the Agreement, of a new agreement with you or a different
adviser or other definitive action; provided that the compensation to be paid by
the Fund to you for your services to and payments on behalf of the Fund will be
equal to the lesser of your actual costs incurred in furnishing such services
and payments or the amount you would have received under this Agreement for
furnishing such services and payments.
This Agreement may, on sixty days written notice, be terminated
with respect to the Fund, at any time without the payment of any penalty, by the
Board, by a vote of a majority of the outstanding voting securities of the Fund,
or by you. This Agreement shall automatically terminate in the event of its
assignment.
7. USE OF NAME
-----------
The Trust and you acknowledge that all rights to the name "Alpha
Analytics" or any variation thereof belong to you, and that the Trust is being
granted a limited license to use such words in its Fund name or in any class
name. In the event you cease to be the adviser to the Fund, the Trust's right to
the use of the name "Alpha Analytics" in connection with the Fund shall
automatically cease on the ninetieth day following the termination of this
Agreement. The right to the name may also be withdrawn by you during the term of
this Agreement upon ninety (90) days' written notice by you to the Trust.
Nothing contained herein shall impair or diminish in any respect, your right to
use the name "Alpha Analytics" in the name of, or in connection with, any other
business enterprises with which you are or may become associated. There is no
charge to the Trust for the right to use this name.
8. AMENDMENT OF THIS AGREEMENT
---------------------------
No provision of this Agreement may be changed, waived, discharged
or terminated orally, and no amendment of this Agreement shall be effective
until approved by the Board, including a majority of the trustees who are not
interested persons of you or of the Trust, cast in person at a meeting called
for the purpose of voting on such approval, and (if required under
interpretations of the 1940 Act by the Securities and Exchange Commission or its
staff) by vote of the holders of a majority of the outstanding voting securities
of the series to which the amendment relates.
9. LIMITATION OF LIABILITY TO TRUST PROPERTY
-----------------------------------------
The term "Alpha Analytics Investment Trust" means and refers to the
Trustees from time to time serving under the Trust's Declaration of Trust as the
same may subsequently thereto have
-12-
<PAGE>
been, or subsequently hereto be, amended. It is expressly agreed that the
obligations of the Trust hereunder shall not be binding upon any of the
trustees, shareholders, nominees, officers, agents or employees of the Trust
personally, but bind only the trust property of the Trust, as provided in the
Declaration of Trust of the Trust. The execution and delivery of this Agreement
have been authorized by the trustees and shareholders of the Trust and signed by
officers of the Trust, acting as such, and neither such authorization by such
trustees and shareholders nor such execution and delivery by such officers shall
be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the trust property of
the Trust as provided in its Declaration of Trust. A copy of the Agreement and
Declaration of Trust of the Trust is on file with the Secretary of the State of
Ohio.
10. SEVERABILITY
------------
In the event any provision of this Agreement is determined to be
void or unenforceable, such determination shall not affect the remainder of this
Agreement, which shall continue to be in force.
11. QUESTIONS OF INTERPRETATION
---------------------------
(a) This Agreement shall be governed by the laws of the State
of Ohio.
(b) For the purpose of this Agreement, the terms "majority of
the outstanding voting securities," "control" and "interested person" shall have
their respective meanings as defined in the 1940 Act and rules and regulations
thereunder, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under the 1940 Act; and the term "brokerage
and research services" shall have the meaning given in the Securities Exchange
Act of 1934.
(c) Any question of interpretation of any term or provision of
this Agreement having a counterpart in or otherwise derived from a term or
provision of the 1940 Act shall be resolved by reference to such term or
provision of the 1940 Act and to interpretation thereof, if any, by the United
States courts or in the absence of any controlling decision of any such court,
by the Securities and Exchange Commission or its staff. In addition, where the
effect of a requirement of the 1940 Act, reflected in any provision of this
Agreement, is revised by rule, regulation, order or interpretation of the
Securities and Exchange Commission or its staff, such provision shall be deemed
to incorporate the effect of such rule, regulation, order or interpretation.
12. NOTICES
-------
Any notices under this Agreement shall be in writing, addressed and
delivered or mailed postage paid to the other party at such address as such
other party may designate for the receipt of such notice. Until further notice
to the other party, it is agreed that the address of the Trust is 1901 Avenue of
the Stars, Suite 1100, Los Angeles, CA 90067, the address of the manager is 1901
Avenue of the Stars, Suite 1100, Los Angeles, CA 90067.
13. COUNTERPARTS
------------
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
-13-
<PAGE>
14. BINDING EFFECT
--------------
Each of the undersigned expressly warrants and represents that he
has the full power and authority to sign this Agreement on behalf of the party
indicated, and that his signature will operate to bind the party indicated to
the foregoing terms.
15. CAPTIONS
--------
The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
If you are in agreement with the foregoing, please sign the form of
acceptance on the accompanying counterpart of this letter and return such
counterpart to the Trust, whereupon this letter shall become a binding contract
upon the date thereof.
Yours very truly,
ATTEST:
Alpha Analytics Investment Trust
By:/s/______________________ By:/s/__________________________
Jack McNally, Secretary Robert E. Gipson, President
Dated: December 8, 1998
ACCEPTANCE
----------
The foregoing Agreement is hereby accepted.
ATTEST:
Alpha Analytics Investment
Group, LLC
By:/s/____________________ By:/s/___________________________
Jack McNally, Vice President Robert E. Gipson, President
Dated: December 8, 1998
-14-
MANAGEMENT AGREEMENT
TO: Alpha Analytics Investment Group, LLC
1901 Avenue of the Stars, Suite 1100
Los Angeles, CA 90067
Dear Sirs:
Alpha Analytics Investment Trust (the "Trust") herewith confirms our
agreement with you.
The Trust has been organized to engage in the business of an investment
company. The Trust currently offers two series of shares to investors, one of
which is the Alpha Analytics Value Fund (the "Fund").
You have been selected to act as the sole investment adviser of the
Fund and to provide certain other services, as more fully set forth below, and
you are willing to act as such investment adviser and to perform such services
under the terms and conditions hereinafter set forth. Accordingly, the Trust
agrees with you as follows effective upon the date of the execution of this
Agreement.
1. ADVISORY SERVICES
-----------------
You will regularly provide the Fund with such investment advice as
you in your discretion deem advisable and will furnish a continuous investment
program for the Fund consistent with the Fund's investment objectives and
policies. You will determine the securities to be purchased for the Fund, the
portfolio securities to be held or sold by the Fund and the portion of the
Fund's assets to be held uninvested, subject always to the Fund's investment
objectives, policies and restrictions, as each of the same shall be from time to
time in effect, and subject further to such policies and instructions as the
Board may from time to time establish. You will advise and assist the officers
of the Trust in taking such steps as are necessary or appropriate to carry out
the decisions of the Board and the appropriate committees of the Board regarding
the conduct of the business of the Fund as it relates to your responsibilities
otherwise provided for in this Agreement. You may delegate any or all of the
responsibilities, rights or duties described in this paragraph 1 to one or more
sub- advisers who shall enter into agreements with you and the Trust, which
agreements shall be approved and ratified by the Board.
2. ALLOCATION OF CHARGES AND EXPENSES
----------------------------------
You will pay all operating expenses of the Fund, including the
compensation and expenses of any employees of the Fund and of any other persons
rendering any services to the Fund; clerical and shareholder service staff
salaries; office space and other office expenses; fees and expenses incurred by
the Fund in connection with membership in investment company organizations;
legal, auditing and accounting expenses; expenses of registering shares under
federal and state securities laws, including expenses incurred by the Fund in
connection with the organization and initial registration of shares of the Fund;
insurance expenses; fees and expenses of the custodian, transfer agent, dividend
disbursing agent, shareholder service agent, plan agent, administrator,
accounting and pricing services agent and underwriter of the Fund; expenses,
including clerical expenses, of issue, sale, redemption or repurchase of shares
of the Fund; the cost of preparing and distributing reports and notices to
shareholders, the cost of printing or preparing prospectuses and statements of
additional
-15-
<PAGE>
information for delivery to the Fund's current and prospective shareholders; the
cost of printing or preparing stock certificates or any other documents,
statements or reports to shareholders; expenses of shareholders' meetings and
proxy solicitations; advertising, promotion and other expenses incurred directly
or indirectly in connection with the sale or distribution of the Fund's shares
excluding expenses which the Fund is authorized to pay pursuant to Rule 12b-1
under the Investment Company Act of 1940, as amended (the "1940 Act'); and all
other operating expenses not specifically assumed by the Fund.
The Fund will pay all brokerage fees and commissions, taxes,
interest, fees and expenses of the non-interested person trustees and such
extraordinary or non-recurring expenses as may arise, including litigation to
which the Fund may be a party and indemnification of the Trust's trustees and
officers with respect thereto. The Fund will also pay expenses which it is
authorized to pay pursuant to Rule 12b-1 under the 1940 Act. You may obtain
reimbursement from the Fund, at such time or times as you may determine in your
sole discretion, for any of the expenses advanced by you, which the Fund is
obligated to pay, and such reimbursement shall not be considered to be part of
your compensation pursuant to this Agreement.
3. COMPENSATION OF THE ADVISER
--------------------------
For all of the services to be rendered and payments to be made as
provided in this Agreement, as of the last business day of each month, the Fund
will pay you a fee at the annual rate of 1.50% of the average value of its daily
net assets.
The average value of the daily net assets of the Fund shall be
determined pursuant to the applicable provisions of the Declaration of Trust of
the Trust or a resolution of the Board, if required. If, pursuant to such
provisions, the determination of net asset value of the Fund is suspended for
any particular business day, then for the purposes of this paragraph, the value
of the net assets of the Fund as last determined shall be deemed to be the value
of the net assets as of the close of the business day, or as of such other time
as the value of the Fund's net assets may lawfully be determined, on that day.
If the determination of the net asset value of the Fund has been suspended for a
period including such month, your compensation payable at the end of such month
shall be computed on the basis of the value of the net assets of the Fund as
last determined (whether during or prior to such month).
4. EXECUTION OF PURCHASE AND SALE ORDERS
In connection with purchases or sales of portfolio securities for
the account of the Fund, it is understood that you will arrange for the placing
of all orders for the purchase and sale of portfolio securities for the account
with brokers or dealers selected by you, subject to review of this selection by
the Board from time to time. You will be responsible for the negotiation and the
allocation of principal business and portfolio brokerage. In the selection of
such brokers or dealers and the placing of such orders, you are directed at all
times to seek for the Fund the best qualitative execution, taking into account
such factors as price (including the applicable brokerage commission or dealer
spread), the execution capability, financial responsibility and responsiveness
of the broker or dealer and the brokerage and research services provided by the
broker or dealer.
You should generally seek favorable prices and commission rates
that are reasonable in relation to the benefits received. In seeking best
qualitative execution, you are authorized to select
-16-
<PAGE>
brokers or dealers who also provide brokerage and research services to the Fund
and/or the other accounts over which you exercise investment discretion. You are
authorized to pay a broker or dealer who provides such brokerage and research
services a commission for executing a Fund portfolio transaction which is in
excess of the amount of commission another broker or dealer would have charged
for effecting that transaction if you determine in good faith that the amount of
the commission is reasonable in relation to the value of the brokerage and
research services provided by the executing broker or dealer. The determination
may be viewed in terms of either a particular transaction or your overall
responsibilities with respect to the Fund and to accounts over which you
exercise investment discretion. The Fund and you understand and acknowledge
that, although the information may be useful to the Fund and you, it is not
possible to place a dollar value on such information. The Board shall
periodically 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 to the Fund.
Consistent with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., and subject to seeking best qualitative
execution as described above, you may give consideration to sales of shares of
the Fund as a factor in the selection of brokers and dealers to execute Fund
portfolio transactions.
Subject to the provisions of the 1940 Act, and other applicable
law, you, any of your affiliates or any affiliates of your affiliates may retain
compensation in connection with effecting the Fund's portfolio transactions,
including transactions effected through others. If any occasion should arise in
which you give any advice to clients of yours concerning the shares of the Fund,
you will act solely as investment counsel for such client and not in any way on
behalf of the Fund. Your services to the Fund pursuant to this Agreement are not
to be deemed to be exclusive and it is understood that you may render investment
advice, management and other services to others, including other registered
investment companies.
5. LIMITATION OF LIABILITY OF ADVISER
----------------------------------
You may rely on information reasonably believed by you to be
accurate and reliable. Except as may otherwise be required by the 1940 Act or
the rules thereunder, neither you nor your shareholders, members, officers,
directors, employees, agents, control persons or affiliates of any thereof shall
be subject to any liability for, or any damages, expenses or losses incurred by
the Trust in connection with, any error of judgment, mistake of law, any act or
omission connected with or arising out of any services rendered under, or
payments made pursuant to, this Agreement or any other matter to which this
Agreement relates, except by reason of willful misfeasance, bad faith or gross
negligence on the part of any such persons in the performance of your duties
under this Agreement, or by reason of reckless disregard by any of such persons
of your obligations and duties under this Agreement.
Any person, even though also a director, officer, employee, member,
shareholder or agent of you, who may be or become an officer, director, trustee,
employee or agent of the Trust, shall be deemed, when rendering services to the
Trust or acting on any business of the Trust (other than services or business in
connection with your duties hereunder), to be rendering such services to or
acting solely for the Trust and not as a director, officer, employee, member,
shareholder or agent of you, or one under your control or direction, even though
paid by you.
6. DURATION AND TERMINATION OF THIS AGREEMENT
------------------------------------------
This Agreement shall take effect on the date of its execution, and
shall remain in force for a period of two (2) years from the date of its
execution, and from year to year thereafter, subject to annual approval by (i)
the Board or (ii) a vote of a majority of the outstanding voting securities of
the Fund, provided that in either event continuance is also approved by a
majority of the trustees who are not interested persons of you or the Trust, by
a vote cast in person at a meeting called for the purpose of voting such
approval.
-17-
<PAGE>
If the shareholders of the Fund fail to approve the Agreement in
the manner set forth above, upon request of the Board, you will continue to
serve or act in such capacity for the Fund for the period of time pending
required approval of the Agreement, of a new agreement with you or a different
adviser or other definitive action; provided that the compensation to be paid by
the Fund to you for your services to and payments on behalf of the Fund will be
equal to the lesser of your actual costs incurred in furnishing such services
and payments or the amount you would have received under this Agreement for
furnishing such services and payments.
This Agreement may, on sixty days written notice, be terminated
with respect to the Fund, at any time without the payment of any penalty, by the
Board, by a vote of a majority of the outstanding voting securities of the Fund,
or by you. This Agreement shall automatically terminate in the event of its
assignment.
7. USE OF NAME
-----------
The Trust and you acknowledge that all rights to the name "Alpha
Analytics" or any variation thereof belong to you, and that the Trust is being
granted a limited license to use such words in its Fund name or in any class
name. In the event you cease to be the adviser to the Fund, the Trust's right to
the use of the name "Alpha Analytics" in connection with the Fund shall
automatically cease on the ninetieth day following the termination of this
Agreement. The right to the name may also be withdrawn by you during the term of
this Agreement upon ninety (90) days' written notice by you to the Trust.
Nothing contained herein shall impair or diminish in any respect, your right to
use the name "Alpha Analytics" in the name of, or in connection with, any other
business enterprises with which you are or may become associated. There is no
charge to the Trust for the right to use this name.
8. AMENDMENT OF THIS AGREEMENT
---------------------------
No provision of this Agreement may be changed, waived, discharged
or terminated orally, and no amendment of this Agreement shall be effective
until approved by the Board, including a majority of the trustees who are not
interested persons of you or of the Trust, cast in person at a meeting called
for the purpose of voting on such approval, and (if required under
interpretations of the 1940 Act by the Securities and Exchange Commission or its
staff) by vote of the holders of a majority of the outstanding voting securities
of the series to which the amendment relates.
9. LIMITATION OF LIABILITY TO TRUST PROPERTY
-----------------------------------------
The term "Alpha Analytics Investment Trust" means and refers to the
Trustees from time to time serving under the Trust's Declaration of Trust as the
same may subsequently thereto have been, or subsequently hereto be, amended. It
is expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the trustees, shareholders, nominees, officers, agents or
employees of the Trust personally, but bind only the trust property of the
Trust, as provided in the Declaration of Trust of the Trust. The execution and
delivery of this Agreement have been authorized by the trustees and shareholders
of the Trust and signed by officers of the Trust, acting as such, and neither
such authorization by such trustees and shareholders nor such execution and
delivery by such officers shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the trust property of the Trust as provided in its Declaration of
Trust. A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of the State of Ohio.
-18-
<PAGE>
10. SEVERABILITY
------------
In the event any provision of this Agreement is determined to be
void or unenforceable, such determination shall not affect the remainder of this
Agreement, which shall continue to be in force.
11. QUESTIONS OF INTERPRETATION
---------------------------
(a) This Agreement shall be governed by the laws of the State
of Ohio.
(b) For the purpose of this Agreement, the terms "majority of
the outstanding voting securities," "control" and "interested person" shall have
their respective meanings as defined in the 1940 Act and rules and regulations
thereunder, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under the 1940 Act; and the term "brokerage
and research services" shall have the meaning given in the Securities Exchange
Act of 1934.
(c) Any question of interpretation of any term or provision of
this Agreement having a counterpart in or otherwise derived from a term or
provision of the 1940 Act shall be resolved by reference to such term or
provision of the 1940 Act and to interpretation thereof, if any, by the United
States courts or in the absence of any controlling decision of any such court,
by the Securities and Exchange Commission or its staff. In addition, where the
effect of a requirement of the 1940 Act, reflected in any provision of this
Agreement, is revised by rule, regulation, order or interpretation of the
Securities and Exchange Commission or its staff, such provision shall be deemed
to incorporate the effect of such rule, regulation, order or interpretation.
12. NOTICES
-------
Any notices under this Agreement shall be in writing, addressed and
delivered or mailed postage paid to the other party at such address as such
other party may designate for the receipt of such notice. Until further notice
to the other party, it is agreed that the address of the Trust is 1901 Avenue of
the Stars, Suite 1100, Los Angeles, CA 90067, the address of the manager is 1901
Avenue of the Stars, Suite 1100, Los Angeles, CA 90067.
13. COUNTERPARTS
------------
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
14. BINDING EFFECT
--------------
Each of the undersigned expressly warrants and represents that he
has the full power and authority to sign this Agreement on behalf of the party
indicated, and that his signature will operate to bind the party indicated to
the foregoing terms.
15. CAPTIONS
--------
The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
-19-
<PAGE>
If you are in agreement with the foregoing, please sign the form of
acceptance on the accompanying counterpart of this letter and return such
counterpart to the Trust, whereupon this letter shall become a binding contract
upon the date thereof.
Yours very truly,
ATTEST:
Alpha Analytics Investment Trust
By:/s/______________________ By:/s/________________________
Jack McNally, Secretary Robert E. Gipson, President
Dated: December 8, 1998
ACCEPTANCE
----------
The foregoing Agreement is hereby accepted.
ATTEST:
Alpha Analytics Investment Group,
LLC
By:/s/______________________ By:/s/________________________
Jack McNally, Vice President Robert E. Gipson, President
Dated: December 8, 1998
-20-
ALPHA ANALYTICS INVESTMENT GROUP, LLC
SUB-ADVISER AGREEMENT
SUB-ADVISER AGREEMENT executed as of December 8, 1998 between ALPHA ANALYTICS
INVESTMENT GROUP, LLC (the "Adviser") and CAMBIAR INVESTORS, INC. (the "Sub-
Adviser").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is agreed as
follows:
1. SERVICES TO BE RENDERED BY SUB-ADVISER TO THE TRUST
(a) Subject always to the control of the Trustees of Alpha Analytics
Investment Trust (the "Trust"), an Ohio business trust, the Sub-Adviser,
at its expense, will furnish continuously an investment program for the
Alpha Analytics Value Fund (the "Fund"), a series of shares of the
Trust. The Sub-Adviser will use its best judgement to make investment
decisions on behalf of the Fund, place all orders for the purchase and
sale of portfolio securities and execute all agreements related thereto.
In the performance of its duties, the Sub-Adviser will comply with the
provisions of the Agreement and Declaration of Trust and By-laws of the
Trust and the objective and policies of the Fund, as set forth in the
then-current Registration Statement of the Trust filed with the
Securities and Exchange Commission ("SEC") and any applicable federal
and state laws, and will comply with other policies which the Trustees
of the Trust (the "Trustees") or the Adviser, as the case may be, may
from time to time determine and which are furnished to the Sub-Adviser.
The Sub-Adviser shall make its officers and employees available to the
Adviser from time to time at reasonable times to review investment
policies of the Fund and to consult with the Adviser regarding the
investment affairs of the Fund. The Sub-Adviser will provide the Trust's
custodian with such information relating to the Trust as may be required
under the terms of the then-current custody agreement between the Trust
and the custodian. In the performance of its duties hereunder, the
Sub-Adviser is and shall be an independent contractor and, unless
otherwise expressly provided or authorized, shall have no authority to
act for or represent the Trust in any way or otherwise be deemed to be
an agent of the Trust.
(b) The Sub-Adviser will maintain books and records with respect to the
securities transactions of the Fund and shall render to the Adviser such
periodic and special reports as the Adviser or the Trustees may request.
The Sub-Adviser agrees that all records which it maintains for the Trust
are the property of the Trust and it will promptly surrender any of such
records to the Trust upon the Trust's request. The Sub- Adviser further
agrees to preserve, for the periods prescribed by Rule 31a-2 under the
Investment Company Act of 1940, as amended ("1940 Act"), any such
records as are required to be maintained by the Sub-Adviser with respect
to the Trust by Rule 31a-1 under the 1940 Act.
(c) During the term of this Agreement, the Sub-Adviser will pay all expenses
incurred by it in connection with its activities under this Agreement
other than the cost of securities and investments purchased for the Fund
(including taxes and brokerage commissions, if any).
-21-
<PAGE>
2. BROKERAGE
In placing orders with brokers and/or dealers, the Sub-Adviser is
directed at all times to seek best qualitative execution for purchases
and sales on behalf of the Fund, taking into account such factors as
price (including the applicable brokerage commission or dealer spread),
the execution capability, financial responsibility and responsiveness of
the broker or dealer and the brokerage and research services provided by
the broker or dealer. Sub-Adviser should generally seek favorable prices
and commission rates that are reasonable in relation to the benefits
received. Subject to such conditions as may be imposed by the Trust's
Board of Trustees, the Sub-Adviser may pay commissions to brokers and/or
dealers that are higher than might be charged by another qualified
broker to obtain brokerage and/or research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) considered by the Sub-Adviser to be useful
or desirable in the performance of the Sub-Adviser's duties hereunder,
if the Sub-Adviser determines in good faith that the amount of the
commission is reasonable in relation to the value of the brokerage and
research services provided by the executing broker or dealer. The
determination may be viewed in terms of either a particular transaction
or Sub-Adviser's overall responsibilities with respect to the Fund and
to accounts over which Sub-Adviser exercises investment discretion. The
Fund and the Sub-Adviser understand and acknowledge that, although the
information may be useful to the Fund and the Sub-Adviser, it is not
possible to place a dollar value on such information. The Board shall
periodically 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 to the Fund.
Consistent with the Rules of Fair Practice of the National Association
of Securities Dealers, Inc., and subject to seeking best qualitative
execution as described above, the Sub-Adviser may give consideration to
sales of shares of the Fund as a factor in the selection of brokers and
dealers to execute Fund portfolio transactions.
Subject to the foregoing and to such conditions as may be imposed by the
Adviser or the Trust's Board of Trustees and the provisions of the 1940
Act, Exchange Act, and other applicable law, nothing herein shall
prohibit the Sub-Adviser from selecting brokers and/or dealers who are
"affiliated persons" of the Sub-Adviser, the Adviser or the Trust. On
occasions when the Sub-Adviser deems the purchase or sale of a security
to be in the best interest of the Fund as well as other customers, the
Sub-Adviser may, to the extent permitted by applicable laws and
regulations, but shall not be obligated to, aggregate the securities to
be so sold or purchased in order to obtain the best execution and lower
brokerage commissions, if any. In such event, allocation of the
securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Sub-Adviser in the manner it considers
to be the most equitable and consistent with its fiduciary obligations
to the Fund and, if applicable, to such other customers.
If any occasion should arise in which the Sub-Adviser gives any advice
to clients of Sub- Adviser concerning the shares of the Fund,
Sub-Adviser will act solely as investment counsel for such client and
not in any way on behalf of the Fund.
-22-
<PAGE>
3. OTHER AGREEMENTS
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, member, director, officer
or employee of, or be otherwise interested in, the Sub-Adviser, and in
any person controlled by or under common control with the Sub-Adviser,
and that the Sub-Adviser and any person controlled by or under common
control with the Sub- Adviser may have an interest in the Trust. It is
also understood that the Sub-Adviser and persons controlled by or under
common control with the Sub-Adviser have and may have advisory,
management service or other contracts with other organizations and
persons, and may have other interests and businesses.
4. COMPENSATION TO BE PAID BY THE ADVISER TO THE SUB-ADVISER
The Adviser will pay to the Sub-Adviser as compensation for the
Sub-Adviser's services rendered, a fee, determined as described in
Schedule A which is attached hereto and made a part hereof. Such fee
shall be paid by the Adviser and not by the Trust.
5. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement (including Schedule A attached hereto)
may be changed, waived, discharged or terminated orally, and no
amendment of this Agreement (including Schedule A attached hereto) shall
be effective until approved by the Board, including a majority of the
trustees who are not interested persons of the Adviser, the Sub-Adviser
or the Trust, cast in person at a meeting called for the purpose of
voting on such approval, and (if required under interpretations of the
1940 Act by the Securities and Exchange Commission or its staff) by vote
of the holders of a majority of the outstanding voting securities of the
series to which the amendment relates.
6. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT
(a) Unless terminated as herein provided, this Agreement shall remain in
full force and effect for a period of two years from the date of its
execution, and shall continue in full force and effect for
successive periods of one year thereafter, but only so long as such
continuance is specifically approved at least annually (i) by the
Trustees or by the affirmative vote of a majority of the outstanding
voting securities of the Fund, and (ii) by a vote of a majority of
the Trustees who are not interested persons of the Trust or of the
Adviser or of any Sub-Adviser, by vote cast in person at a meeting
called for the purpose of voting on such approval; provided,
however, that if the continuance of this Agreement is submitted to
the shareholders of the Fund for their approval and such
shareholders fail to approve such continuance of this Agreement as
provided herein, the Sub-Adviser may continue to serve hereunder in
a manner consistent with the 1940 Act and the rules and regulations
thereunder.
(b) This Agreement may be terminated at any time without the payment of
any penalty (i) by the Adviser, (ii) by vote of the Trustees, (iii)
by vote of a majority of the outstanding voting securities of the
Fund or (iv) by the Sub-Adviser, in each case on sixty days' written
notice.
(c) This Agreement shall terminate automatically, without the payment of
any penalty, in the event of its assignment or in the event that the
Management Agreement with the Adviser shall have terminated for any
reason.
(d) In the event of termination of this Agreement, the Fund will no
longer use the name "Cambiar Investors, Inc." in materials relating
to the Fund except as may be required by the 1940 Act and the rules
and regulations thereunder. All rights to the name "Alpha Analytics"
belong to the Adviser.
-23-
<PAGE>
7. CERTAIN DEFINITIONS
For the purposes of this Agreement, the terms "vote of a majority of the
outstanding voting securities," "control," "interested person" and
"assignment" shall have their respective meanings defined in the 1940
Act and rules and regulations thereunder, subject, however, to such
exemptions as may be granted by the SEC under said Act; the term
"specifically approve at least annually" shall be construed in a manner
consistent with the 1940 Act and the rules and regulations thereunder;
and the term "brokerage and research services" shall have the meaning
given in the Exchange Act and the rules and regulations thereunder.
8. NON-LIABILITY OF SUB-ADVISER
Neither the Sub-Adviser nor its shareholders, officers, directors,
employees, agents, control persons or affiliates of any thereof, shall
be liable for any error of judgment or mistake of law or for any loss
suffered by any Fund in connection with the matters to which this
Agreement relates except a loss resulting from a breach of fiduciary
duty with respect to the receipt of compensation for services or a loss
resulting from willful misfeasance, bad faith or gross negligence on its
part in the performance of its duties or from reckless disregard by it
of its obligations and duties under this Agreement, except as otherwise
may be required by the 1940 Act.
9. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS
A copy of the Trust's Agreement and Declaration of Trust is on file with
the Secretary of the State of Ohio, and notice is hereby given that this
instrument is executed by the Trustees as Trustees and not individually
and that the obligations of this instrument are not binding upon any of
the Trustees, officers or shareholders individually but are binding only
upon the assets and property of the Fund.
10. SEVERABILITY
In the event any provision of this Agreement is determined to be void or
unenforceable, such determination shall not affect the remainder of this
Agreement, which shall continue to be in force.
11. QUESTIONS OF INTERPRETATION
(a) This Agreement shall be governed by the laws of the State of
Ohio.
(b) Any question of interpretation of any term or provision of this
Agreement having a counterpart in or otherwise derived from a
term or provision of the 1940 Act shall be resolved by reference
to such term or provision of the Act and to interpretation
thereof, if any, by the United States courts or in the absence of
any controlling decision of any such court, by the Securities and
Exchange Commission or its staff. In addition, where the effect
of a requirement of the 1940 Act, reflected in any provision of
this Agreement is revised by rule, regulation, order or
interpretation of the Securities and Exchange Commission or its
staff, such provision shall be deemed to incorporate the effect
of such rule, regulation, order or interpretation.
-24-
<PAGE>
12. NOTICES
Any notices under this Agreement shall be in writing, addressed and
delivered or mailed postage paid to the other party at such address as
such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that the address of the
Trust and the Adviser is 1901 Avenue of the Stars, Suite 123, Los
Angeles, CA 90067, and the address of the Sub-Adviser is 8400 East
Prentice Avenue, Suite 460, Englewood, CO 80111.
13. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
14. BINDING EFFECT
Each of the undersigned expressly warrants and represents that he has
the full power and authority to sign this Agreement on behalf of the
party indicated, and that his signature will operate to bind the party
indicated to the foregoing terms.
15. CAPTIONS
The captions in this Agreement are included for convenience of reference
only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
-25-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this instrument to be signed by
their officers designated below, all as of the day and year first above written.
ALPHA ANALYTICS INVESTMENT GROUP, LLC
By:/s/ ROBERT E. GIPSON
--------------------
Robert E. Gipson
President
CAMBIAR INVESTORS, INC.
By:/s/ TERRELL J. BUTZ
---------------------
Terrell J. Butz
Vice President
By signature below, the Trust acknowledges, as of the day and year first above
written, that the Sub- Adviser Agreement has been approved by the Trust as
required by the 1940 Act.
ALPHA ANALYTICS INVESTMENT TRUST
By:/s/ ROBERT E. GIPSON
--------------------
Robert E. Gipson
President
-26-
<PAGE>
SCHEDULE A
DATED DECEMBER 8, 1998
The Manager will pay to the Sub-Adviser as full compensation for the
Sub-Adviser's services rendered, a fee computed daily and paid quarterly at an
annual rate of 0.50% of the average daily net assets of the Fund.
The average daily net assets of the Fund shall be determined by taking an
average of all of the determinations of net asset value during each month at the
close of business on each business day during such month while this Agreement is
in effect. Net asset value shall be calculated in the manner specified in the
Trust's Prospectus.
The fee for each quarter shall be payable within ten (10) business days after
the end of the quarter.
If the Sub-Adviser shall serve for any period less than a full month, the
foregoing compensation shall be prorated according to the proportion which such
period bears to a full month.
-27-
- - --------------------------------------------------------------------------------
UNDERWRITING AGREEMENT
BETWEEN
ALPHA ANALYTICS INVESTMENT TRUST
AND
ADS DISTRIBUTORS, INC.
[GRAPHIC OMITTED]
<PAGE>
UNDERWRITING AGREEMENT
----------------------
AGREEMENT made the 7th day of December 1998, by and between Alpha Analytics
Investment Trust., an Ohio Business Trust, and ADS Distributors, Inc., a Florida
corporation (the "Underwriter").
1. The Underwriter will receive orders from purchasers for and the Fund will
sell, issue and deliver from time to time to such purchasers, such part of
the authorized shares of capital stock of the Fund remaining un-issued as
from time to time shall be effectively registered under the Securities Act
of 1933, as amended (the "33 Act"), at prices determined as hereinafter
provided and on the terms hereinafter set forth, all subject to applicable
Federal and State laws and regulations and to the charter of the Fund.
2. The Underwriter shall present all orders received by it for shares of
capital stock of the Fund to the Fund by telegraphic or written purchase
orders and each such order shall be subject to the acceptance or rejection
by the Fund in its sole discretion
2.1 Notwithstanding any other provision hereof, whenever in the judgment of
the Fund such action is warranted by market, economic or political
conditions or by abnormal circumstances of any kind, the Fund may suspend
the offer of shares in effect and may, without liability under the provision
of this Agreement, decline to accept or confirm any orders or make any sales
of shares or capital stock under this Agreement until such time as the Fund
shall deem it advisable to resume the offering of such shares, provided that
as soon as practicable after the taking of any such action a special meeting
of the Board of Directors shall be called to be held as soon as practicable
thereafter to determine whether or not such action shall then continue to be
effective, and the period during, or the circumstance under, which such
action shall continue or cease to be effective. During any period during
which the offer of shares shall be suspended or the Fund shall decline to
acceptor confirm any such orders or make any such sales, the Fund shall be
under no obligation to confirm or accept any such orders or make any such
sale at any price.
2.2 The Fund will use its best efforts to keep effectively registered under
the 33 Act for sale as herein contemplated such shares of its capital stock
as the Underwriter shall reasonably request and as the Securities and
Exchange Commission (the "SEC") shall permit to be so registered.
3. Sales by the Underwriter shall be made as agent for the Fund and all such
sales be made to or though qualified dealers or others in such manner, not
inconsistent with the provisions hereof and the then effective registration
statement of the Fund under the 33 Act, (and related prospectus), as the
Underwriter may determine from time to time.
<PAGE>
4. All shares of capital stock offered for sale or sold by the Underwriter
shall be so offered or sold at a price per share (the "Offering Price")
equal to the net asset value per share (determined as authorized from time
to time by the Board of Directors of the Fund pursuant to its charter).
4.1 For the purpose of determining the offering price, the net asset value
of any such shares shall be so determined in accordance with the then
current offering prospectus. The Fund, or its authorized agent, will
promptly furnish to the Underwriter a statement of the Offering Price as
often as such net asset value is determined and such statement shall at the
request of the Underwriter show the basis of computation of the Offering
Price.
4.2 Orders presented by the Underwriter for shares, if accepted by the Fund,
shall be accepted and confirmed by it or its duly authorized agent at the
Offering Price in effect at the time of its receipt of such order at its
principal office.
4.3 The Underwriter will not in any event (a) offer for sale or sell shares
of capital stock in excess of the number then effectively registered under
the 33 Act, and available for sale, or (b) offer for sale or sell any shares
in violation of any applicable Federal or State law, rule or regulation.
5. The Fund will execute any and all documents and furnish any and all
information which may be reasonably necessary in connection with the
qualification of its shares of capital stock in such states as the
Underwriter may reasonably request (it being understood that the Fund shall
not be required without its consent to qualify to do business in any
jurisdiction or to comply with any requirement which in its opinion is
unduly burdensome). The Underwriter, at its own expense, will effect all
qualifications as dealer or broker.
6. The Fund will furnish to the Underwriter from time to time such information
with respect to its shares as the Underwriter may reasonably request for use
in connection with the sale of shares. The Underwriter will not use or
distribute or authorize the use, distribution or dissemination by its
dealers or others in connection with such sale of any literature,
advertising or selling aids in any form or through any medium, written or
oral, without prior written specific approval thereof by the Fund.
7. Nothing herein contained shall limit the right of the Fund, in its absolute
discretion, to issue or sell shares of its capital stock for such other
considerations (whether in connection with the acquisition of assets or
shares or securities of another corporation or entity or with the merger or
consolidation of any other corporation into or with the Fund, or otherwise)
as and to the extent permitted by its charter and any applicable laws, or to
issue or sell any such shares directly to the shareholders of the Fund, upon
such terms and conditions and for such consideration, if any, as may be
determined by the Board of Directors, whether pursuant to the distribution
of subscription or purchase rights to such holders or by way of dividends or
otherwise.
<PAGE>
8. At the request of the Fund, the Underwriter agrees to act as agent for the
Fund for the repurchase or redemption of shares of the Fund at such prices
as the Fund from time to time shall prescribe.
9. In selling or reacquiring shares, the Underwriter agrees to conform to the
requirements of all state and Federal laws relating to such sale or
reacquisition, as the case may be, and will indemnify and hold the Fund
harmless from any damage or expense on account of any wrongful act by the
Underwriter or any employee, representative or agent of the Underwriter. The
Underwriter will observe and be bound by all the provisions of the charter
of the Fund and any fundamental policies adopted by the Fund pursuant to the
Investment Company Act of 1940, as amended (the "40 Act"), notice of which
has been given to the Underwriter.
10. Neither the Underwriter, any dealer nor any other person is authorized by
the Fund to give any information or to make any representation other than
those contained (a) in the latest effective registration statement (and
related prospectus) filed with the SEC under the 33 Act as such registration
statement (and prospectus) may be amended from time to time, or (b) in any
statement expressly authorized by the Fund for use in connection with any
sale or reacquisition of capital stock for the account of the Fund.
11. In Consideration of the agreements on the part of the Underwriter herein
contained, the Underwriter shall receive payment in the amount of $10,000
per annum, billed monthly, plus reimbursement of all reasonable
out-of-pocket expenses incurred at the request of the Fund in fulfillment of
its responsibilities in this Agreement.
12. The term "Alpha Analytics Investment Trust" means and refers to the Trustees
from time to time serving under the Trust's Declaration of Trust as the same
may subsequently thereto have been or subsequently hereto be, amended. It is
expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the trustees, shareholders, nominees, officers, agents
or employees of the Trust personally, but bind only the trust property of
the Trust, as provided in the Declaration of Trust of the Trust. The
execution and delivery of this Agreement have been authorized by the
trustees and shareholders of the Trust and signed by the officers of the
Trust, acting as such, and neither such authorization by such trustees and
shareholders nor such execution and delivery by such officers shall be
deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the trust property
of the Trust as provided in its Declaration of Trust. A copy of the
Agreement and Declaration of Trust of the Trust is on file with the
Secretary of State of Ohio.
<PAGE>
13. This Agreement shall continue in effect until such time as there remain no
unsold balance of shares of capital stock effectively registered under the
33 Act; provided, however, that (a) this Agreement shall continue in effect
for a period more than two years from the date hereof only so long as such
continuance is specifically approved at least annually by the Board of
Directors or a majority of the outstanding voting securities of the Fund,
and (b) either party hereto may terminate this Agreement on any date by
giving the other party at least ninety (90) days prior written notice of
such termination specifying the date fixed therefor..
13.1 This Agreement shall automatically terminate in the event of its
assignment by the Underwriter, the term "assignment" having the meaning
defined in Section 2(a)(4) of the 40 Act.
14. Any notice under this Agreement shall be in writing addressed and delivered
by mail, postage prepaid, to the party to whom addressed at the address
given below, or at such other address as such party shall theretofore have
designated (by notice given to the other party as herein provided) in
writing for the receipt of such notice:
TO THE FUND: TO THE UNDERWRITER:
Robert E. Gipson Michael Miola
President Treasurer
Alpha Analytics Investment Trust ADS Distributors, Inc.
1901 Avenue of the Stars, Suite 123 c/o American Data Services, Inc.
Los Angeles, CA 90067 150 Motor Parkway, Suite 109
Hauppauge, NY 11788
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
ALPHA ANALYTICS INVESTMENT TRUST ADS DISTRIBUTORS, INC.
By:/s/___________________________ By:/s/_________________________
Robert E. Gipson, President Michael Miola, Treasurer
CUSTODY AGREEMENT
BETWEEN
STAR BANK, N.A.
AND
----------------------
ALPHA ANALYTICS INVESTMENT TRUST
-29-
<PAGE>
TABLE OF CONTENTS
Definitions 1
ARTICLE II - Appointment; Acceptence; and Furnishing of Documents
II. A. Appointment of Custodian 5
II. B. Acceptance of Custodian 5
II. C. Documents to be Furnished 5
II. D. Notice of Appointment of Dividend and Transfer Agent 5
ARTICLE III - Receipt of Trust Assets
III. A. Delivery of Moneys 6
III. B. Delivery of Securities 6
III. C. Payments for Shares 6
III. D. Duties Upon Receipt 7
ARTICLE IV - Disbursement of Trust Assets
IV. A. Declaration of Dividends by Trust 7
IV. B. Segregation of Redemption Proceeds 7
IV. C. Disbursements of Custodian 8
IV. D. Payment of Custodian Fees 8
ARTICLE V - Custody of Trust Assets
V. A. Separate Accounts for Each Fund 8
V. B. Segregation of Non-Cash Assets 9
V. C. Securities in Bearer and Registered Form 9
V. D. Duties of Custodian as to Securities 9
V. E. Certain Actions Upon Written Instructions 10
V. F. Custodian to Deliver Proxy Materials 11
V. G. Custodian to Deliver Tender Offer Information 11
V. H. Custodian to Deliver Security and Transaction Information 12
ARTICLE VI - Purchase and Sale of Securities
VI. A. Purchase of Securities 12
VI. B. Sale of Securities 13
VI. C. Delivery Versus Payment for Purchases and Sales 14
VI. D. Payment on Settlement Date 14
VI. E. Segregated Accounts 14
VI. F. Advances for Settlement 16
-30-
<PAGE>
ARTICLE VII - Trust Indebtedness
VII. A. Borrowings 17
VII. B. Advances 18
ARTICLE VIII - Concerning the Custodian
VIII. A. Limitations on Liability of Custodian 18
VIII. B. Actions not Required by Custodian 20
VIII. C. No Duty to Collect Amounts Due From Dividend and Transfer Agent 21
VIII. D. No Enforcement Actions 21
VIII. E. Authority to Use Agents and Sub-Custodians 22
VIII. F. No Duty to Supervise Investments 22
VIII. G. All Records Confidential 23
VIII. H. Compensation of Custodian 23
VIII. I. Reliance Upon Instructions 23
VIII. J. Books and Records 24
VIII. K. Internal Accounting Control Systems 24
VIII. L. No Management of Assets by Custodian 24
VIII. M. Assistance to Trust 25
ARTICLE IX - Termination
IX. A. Termination 25
IX. B. Failure to Designate Successor Custodian 26
ARTICLE X - Force Majeure
ARTICLE XI - Miscellaneous
XI. A. Designation of Authorized Persons 27
XI. B. Limitation of Personal Liability 27
XI. C. Authorization By Board 28
XI. D. Custodian's Consent to Use of Its Name 28
XI. E. Notices to Custodian 29
XI. F. Notices to Trust 29
XI. G. Amendments In Writing 29
XI. H. Successors and Assigns 29
XI. I. Governing Law 29
XI. J. Jurisdiction 30
XI. K. Counterparts 30
XI. L. Headings 30
-31-
<PAGE>
APPENDIX A
APPENDIX B
APPENDIX C
APPENDIX D
APPENDIX E
-32-
<PAGE>
CUSTODY AGREEMENT
This agreement (the "Agreement") is entered into as of the 23rd day of
December, 1998, by and between Alpha Analytics Investment Trust, an Ohio
business trust (the "Trust") and Star Bank, National Association, (the
"Custodian"), a national banking association having its principal office at 425
Walnut Street, Cincinnati, Ohio, 45202.
WHEREAS, the Trust and the Custodian desire to enter into this
Agreement to provide for the custody and safekeeping of the assets of the Trust
as required by the Act (as hereafter defined).
THEREFORE, in consideration of the mutual promises hereinafter set
forth, the Trust and the Custodian agree as follows:
DEFINITIONS
- - -----------
The following words and phrases, when used in this Agreement, unless
the context otherwise requires, shall have the following meanings:
ACT - the Investment Company Act of 1940, as amended.
---
1934 ACT - the Securities and Exchange Act of 1934, as amended.
--------
AUTHORIZED PERSON - any person, whether or not any such person is an
-----------------
officer or employee of the Trust, who is duly authorized by the Board of
Trustees of the Trust to give Oral Instructions and Written Instructions on
behalf of the Trust or any Fund, and named in Appendix A attached hereto and as
amended from time to time by resolution of the Board of Trustees, certified by
an Officer, and received by the Custodian.
BOARD OF TRUSTEES - the Trustees from time to time serving under the
-----------------
Trust's Agreement and Declaration of Trust, as from time to time amended.
BOOK-ENTRY SYSTEM - a federal book-entry system as provided in Subpart
-----------------
O of Treasury Circular No. 300, 31 CFR 306, in Subpart B of 31 CFT Part 350, or
in such book-entry regulations of federal agencies as are substantially in the
form of Subpart O.
<PAGE>
BUSINESS DAY - any day recognized as a settlement day by The New York
------------
Stock Exchange, Inc. and any other day for which the Trust computes the net
asset value of Shares of any fund.
DEPOSITORY - The Depository Trust Company ("DTC"), a limited purpose
----------
trust company, its successor(s) and its nominee(s). Depository shall include any
other clearing agency registered with the SEC under Section 17A of the 1934 Act
which acts as a system for the central handling of Securities where all
Securities of any particular class or series of an issuer deposited within the
system are treated as fungible and may be transferred or pledged by bookkeeping
entry without physical delivery of the Securities provided that the Custodian
shall have received a copy of a resolution of the Board of Trustees, certified
by an Officer, specifically approving the use of such clearing agency as a
depository for the Funds.
DIVIDEND AND TRANSFER AGENT - the dividend and transfer agent
---------------------------
appointed, from time to time, pursuant to a written agreement between the
dividend and transfer agent and the Trust.
FOREIGN SECURITIES - a) securities issued and sold primarily outside of
------------------
the United States by a foreign government, a national of any foreign country, or
a trust or other organization incorporated or organized under the laws of any
foreign country or; b) securities issued or guaranteed by the government of the
United States, by any state, by any political subdivision or agency thereof, or
by any entity organized under the laws of the United States or of any state
thereof, which have been issued and sold primarily outside of the United States.
FUND - each series of the Trust listed in Appendix B and any additional
----
series added pursuant to Proper Instructions. A series is individually referred
to as a "Fund" and collectively referred to as the "Funds."
MONEY MARKET SECURITY - debt obligations issued or guaranteed as to
---------------------
principal and/or interest by the government of the United States or agencies or
instrumentalities thereof, commercial paper, obligations (including certificates
of deposit, bankers' acceptances, repurchase agreements and reverse repurchase
agreements with respect to the same), and time deposits of domestic banks and
thrift institutions whose deposits are insured by the Federal Deposit Insurance
Corporation, and short-term corporate obligations where the purchase and sale of
such securities normally require settlement in federal funds or their equivalent
on the same day as such purchase and sale, all of which mature in not more than
thirteen (13) months.
NASD - the National Association of Securities Dealers, Inc.
----
OFFICER - the Chairman, President, Secretary, Treasurer, any Vice
-------
President, Assistant Secretary or Assistant Treasurer of the Trust.
ORAL INSTRUCTIONS - instructions orally transmitted to and received by
-----------------
the Custodian from an Authorized Person (or from a person that the Custodian
reasonably believes in good faith to be an Authorized Person) and confirmed by
Written Instructions in such a manner that such Written Instructions are
received by the Custodian on the Business Day immediately following receipt of
such Oral Instructions.
PROPER INSTRUCTIONS - Oral Instructions or Written Instructions. Proper
-------------------
Instructions may be continuing Written Instructions when deemed appropriate by
both parties.
PROSPECTUS - the Trust's then currently effective prospectus and
----------
Statement of Additional Information, as filed with and declared effective from
time to time by the Securities and Exchange Commission.
SECURITY OR SECURITIES - Money Market Securities, common stock,
----------------------
preferred stock, options, financial futures, bonds, notes, debentures, corporate
debt securities, mortgages, bank certificates of deposit, bankers' acceptances,
mortgage-backed securities or other obligations and any certificates, receipts,
warrants, or other instruments or documents representing rights to receive,
purchase, or subscribe for the same or evidencing or representing any other
rights or interest therein, or any similar property or assets, including
securities of any registered investment company, that the Custodian has the
facilities to clear and to service.
-3-
<PAGE>
SEC - the Securities and Exchange Commission of the United States of
---
America.
SHARES - with respect to a Fund, the units of beneficial interest
------
issued by the Trust on account of such Fund.
TRUST - the business trust organized under the laws of Ohio which is an
-----
open-end diversified management investment company registered under the Act.
WRITTEN INSTRUCTIONS - communications in writing actually received by
--------------------
the Custodian from an Authorized Person. A communication in writing includes a
communication by facsimile, telex or between electro-mechanical or electronic
devices (where the use of such devices have been approved by resolution of the
Board of Trustees and the resolution is certified by an Officer and delivered to
the Custodian). All written communications shall be directed to the Custodian,
attention: Mutual Fund Custody Department.
ARTICLE II
APPOINTMENT; ACCEPTANCE; AND FURNISHING OF DOCUMENTS
II. A. APPOINTMENT OF CUSTODIAN. The Trust hereby constitutes and
------------------------
appoints the Custodian as custodian of all Securities and cash owned by the
Trust at any time during the term of this Agreement.
II. B. ACCEPTANCE OF CUSTODIAN. The Custodian hereby accepts
-----------------------
appointment as such custodian and agrees to perform the duties thereof as
hereinafter set forth.
II. C. DOCUMENTS TO BE FURNISHED. The following documents, including
-------------------------
any amendments thereto, will be provided contemporaneously with the execution of
the Agreement, to the Custodian by the Trust:
1. A copy of the Declaration of Trust of the Trust certified by
the Secretary.
2. A copy of the By-Laws of the Trust certified by the Secretary.
3. A copy of the resolution of the Board of Trustees of the Trust
appointing the Custodian, certified by the Secretary.
4. A copy of the then current Prospectus.
5. A Certificate of the President and Secretary of the Trust
setting forth the names and signatures of all Authorized Persons.
II. D. NOTICE OF APPOINTMENT OF DIVIDEND AND TRANSFER AGENT. The Trust
----------------------------------------------------
agrees to notify the Custodian in writing of the appointment, termination or
change in appointment of any Dividend and Transfer Agent.
-4-
<PAGE>
ARTICLE III
RECEIPT OF TRUST ASSETS
III. A. DELIVERY OF MONEYS. During the term of this Agreement, the
------------------
Trust will deliver or cause to be delivered to the Custodian all moneys to be
held by the Custodian for the account of any Fund. The Custodian shall be
entitled to reverse any deposits made on any Fund's behalf where such deposits
have been entered and moneys are not finally collected within 30 days of the
making of such entry.
III. B. DELIVERY OF SECURITIES. During the term of this Agreement, the
----------------------
Trust will deliver or cause to be delivered to the Custodian all Securities to
be held by the Custodian for the account of any Fund. The Custodian will not
have any duties or responsibilities with respect to such Securities until
actually received by the Custodian. The Custodian is hereby authorized by the
Trust, acting on behalf of the Fund, to actually deposit any assets of the Fund
in the Book-Entry System or in a Depository, provided, however, that the
Custodian shall always be accountable to the Trust for the assets of the Fund so
deposited. Assets deposited in the Book-Entry System or the Depository will be
represented in accounts which include only assets held by the Custodian for
customers, including but not limited to accounts in which the Custodian acts in
a fiduciary or representative capacity.
III. C. PAYMENTS FOR SHARES. As and when received, the Custodian shall
-------------------
deposit to the account(s) of a Fund any and all payments for Shares of that Fund
issued or sold from time to time as they are received from the Trust's
distributor or Dividend and Transfer Agent or from the Trust itself.
III. D. DUTIES UPON RECEIPT. The Custodian shall not be responsible for
-------------------
any Securities, moneys or other assets of any Fund until actually received.
-5-
<PAGE>
ARTICLE IV
DISBURSEMENT OF TRUST ASSETS
IV. A. DECLARATION OF DIVIDENDS BY TRUST. The Trust shall furnish to
---------------------------------
the Custodian a copy of the resolution of the Board of Trustees of the
Trust, certified by the Trust's Secretary, either (i) setting forth the date of
the declaration of any dividend or distribution in respect of Shares of any Fund
of the Trust, the date of payment thereof, the record date as of which the Fund
shareholders entitled to payment shall be determined, the amount payable per
share to Fund shareholders of record as of that date, and the total amount to be
paid by the Dividend and Transfer Agent on the payment date, or (ii) authorizing
the declaration of dividends and distributions in respect of Shares of a Fund on
a daily basis and authorizing the Custodian to rely on Written Instructions
setting forth the date of the declaration of any such dividend or distribution,
the date of payment thereof, the record date as of which the Fund shareholders
entitled to payment shall be determined, the amount payable per share to Fund
shareholders of record as of that date, and the total amount to be paid by the
Dividend and Transfer Agent on the payment date.
On the payment date specified in the resolution or Written Instructions
described above, the Custodian shall segregate such amounts from moneys held for
the account of the Fund so that they are available for such payment.
IV. B. Segregation of Redemption Proceeds. Upon receipt of Proper
Instructions so directing it, the Custodian shall segregate amounts necessary
for the payment of redemption proceeds to be made by the Dividend and Transfer
Agent from moneys held for the account of the Fund so that they are available
for such payment.
IV. C. Disbursements of Custodian. Upon receipt of a Certificate
directing payment and setting forth the name and address of the person to whom
such payment is to be made, the amount of such payment, the name of the Fund
from which payment is to be made, and the purpose for which payment is to be
made, the Custodian shall disburse amounts as and when directed from the assets
of that Fund. The Custodian is authorized to rely on such directions and shall
be under no obligation to inquire as to the propriety of such directions.
IV. D. Payment of Custodian Fees. Upon receipt of Written Instructions
directing payment, the Custodian shall disburse moneys from the assets of the
Trust in payment of the Custodian's fees and expenses as provided in Article
VIII hereof.
-6-
<PAGE>
ARTICLE V
CUSTODY OF TRUST ASSETS
V. A. SEPARATE ACCOUNTS FOR EACH FUND. As to each Fund, the Custodian
-------------------------------
shall open and maintain a separate bank account or accounts in the United States
in the name of the Trust coupled with the name of such Fund, subject only to
draft or order by the Custodian acting pursuant to the terms of this Agreement,
and shall hold all cash received by it from or for the account of the Fund,
other than cash maintained by the Fund in a bank account established and used by
the Fund in accordance with Rule 17f-3 under the Act. Moneys held by the
Custodian on behalf of a Fund may be deposited by the Custodian to its credit as
Custodian in the banking department of the Custodian. Such moneys shall be
deposited by the Custodian in its capacity as such, and shall be withdrawable by
the Custodian only in such capacity.
V. B. SEGREGATION OF NON-CASH ASSETS. All Securities and non-cash
------------------------------
property held by the Custodian for the account of a Fund (other than Securities
maintained in a Depository or Book-entry System) shall be physically segregated
from other Securities and non-cash property in the possession of the Custodian
(including the Securities and non-cash property of the other Funds) and shall be
identified as subject to this Agreement.
V. C. SECURITIES IN BEARER AND REGISTERED FORM. All Securities held
----------------------------------------
which are issued or issuable only in bearer form, shall be held by the Custodian
in that form; all other Securities held for the Fund may be registered in the
name of the Custodian, any sub-custodian appointed in accordance with this
Agreement, or the nominee of any of them. The Trust agrees to furnish to the
Custodian appropriate instruments to enable the Custodian to hold, or deliver in
proper form for transfer, any Securities that it may hold for the account of any
Fund and which may, from time to time, be registered in the name of a Fund.
-7-
<PAGE>
V. D. DUTIES OF CUSTODIAN AS TO SECURITIES. Unless otherwise instructed
------------------------------------
by the Trust, with respect to all Securities held for the Trust, the Custodian
shall on a timely basis (concerning items 1 and 2 below, as defined in the
Custodian's Standards of Service Guide, as amended from time to time, annexed
hereto as Appendix D):
1.) Collect all income due and payable with respect to such
Securities;
2.) Present for payment and collect amounts payable upon all
Securities which may mature or be called, redeemed, or retired,
or otherwise become payable;
3.) Surrender interim receipts or Securities in temporary
form for Securities in definitive form; and
4.) Execute, as Custodian, any necessary declarations or
certificates of ownership under the Federal income tax laws or
the laws or regulations of any other taxing authority, including
any foreign taxing authority, now or hereafter in effect.
V. E. CERTAIN ACTIONS UPON WRITTEN INSTRUCTIONS. Upon receipt of a
-----------------------------------------
Written Instructions and not otherwise, the Custodian shall:
1.) Execute and deliver to such persons as may be designated
in such Written Instructions proxies, consents, authorizations,
and any other instruments whereby the authority of the Trust as
beneficial owner of any Securities may be exercised;
2.) Deliver any Securities in exchange for other Securities
or cash issued or paid in connection with the liquidation,
reorganization, refinancing, merger, consolidation, or
recapitalization of any corporation, or the exercise of any
conversion privilege;
-8-
<PAGE>
3.) Deliver any Securities to any protective committee,
reorganization committee, or other person in connection with the
reorganization, refinancing, merger, consolidation,
recapitalization, or sale of assets of any corporation, and
receive and hold under the terms of this Agreement such
certificates of deposit, interim receipts or other instruments or
documents as may be issued to it to evidence such delivery;
4.) Make such transfers or exchanges of the assets of any
Fund and take such other steps as shall be stated in the Written
Instructions to be for the purpose of effectuating any duly
authorized plan of liquidation, reorganization, merger,
consolidation or recapitalization of the Trust; and
5.) Deliver any Securities held for any Fund to the
depository agent for tender or other similar offers.
V. F. CUSTODIAN TO DELIVER PROXY MATERIALS. The Custodian shall
------------------------------------
promptly deliver to the Trust all notices, proxy material and executed but
unvoted proxies pertaining to shareholder meetings of Securities held by any
Fund. The Custodian shall not vote or authorize the voting of any Securities or
give any consent, waiver or approval with respect thereto unless so directed by
Written Instructions.
V. G. CUSTODIAN TO DELIVER TENDER OFFER INFORMATION. The Custodian
---------------------------------------------
shall promptly deliver to the Trust all information received by the Custodian
and pertaining to Securities held by any Fund with respect to tender or exchange
offers, calls for redemption or purchase, or expiration of rights as described
in the Standards of Service Guide attached as Appendix D. If the Trust desires
to take action with respect to any tender offer, exchange offer or other similar
transaction, the Trust shall notify the Custodian at least five Business Days
prior to the date on which the Custodian is to take such action. The Trust will
provide or cause to be provided to the Custodian all relevant information for
any Security which has unique put/option provisions at least five Business Days
prior to the beginning date of the tender period.
-9-
<PAGE>
V. H. Custodian to Deliver Security and Transaction Information. On
each Business Day that the Federal Reserve Bank is open, the Custodian shall
furnish the Trust with a detailed statement of monies held for the Fund under
this Agreement and with confirmations and a summary of all transfers to or from
the account of the Fund. At least monthly and from time to time, the Custodian
shall furnish the Trust with a detailed statement of the Securities held for the
Fund under this Agreement. Where Securities are transferred to the account of
the Fund without physical delivery, the Custodian shall also identify as
belonging to the Fund a quantity of Securities in a fungible bulk of Securities
registered in the name of the Custodian (or its nominee) or shown on the
Custodian's account on the books of the Book-Entry System or the Depository.
With respect to information provided by this section, it shall not be necessary
for the Custodian to provide notice as described by Article XI Section F.
Notices to Trust; it shall be sufficient to communicate by such means as shall
be mutually agreeable to the Trust and the Custodian.
ARTICLE VI
PURCHASE AND SALE OF SECURITIES
VI. A. Purchase of Securities. Promptly after each purchase of
Securities by the Trust, the Trust shall deliver to the Custodian (i) with
respect to each purchase of Securities which are not Money Market Securities,
Written Instructions, and (ii) with respect to each purchase of Money Market
Securities, Proper Instructions, specifying with respect to each such purchase
the;
1.) name of the issuer and the title of the Securities,
2.) the number of shares, principal amount purchased (and
accrued interest, if any) or other units purchased,
3.) date of purchase and settlement,
4.) purchase price per unit,
5.) total amount payable,
6.) name of the person from whom, or the broker through
which, the purchase was made,
7.) the name of the person to whom such amount is payable,
and
8.) the Fund for which the purchase was made.
-10-
<PAGE>
The Custodian shall, against receipt of Securities purchased by or for the
Trust, pay out of the moneys held for the account of such Fund the total amount
specified in the Written Instructions, or Oral Instructions, if applicable, to
the person named therein. The Custodian shall not be under any obligation to pay
out moneys to cover the cost of a purchase of Securities for a Fund, if in the
relevant Fund custody account there is insufficient cash available to the Fund
for which such purchase was made. With respect to any repurchase agreement
transaction for the Funds, the Custodian shall assure that the collateral
reflected on the transaction advice is received by the Custodian.
VI. B. SALE OF SECURITIES. Promptly after each sale of Securities by a
------------------
Fund, the Trust shall deliver to the Custodian (i) with respect to each sale of
Securities which are not Money Market Securities, Written Instructions, and (ii)
with respect to each sale of Money Market Securities, Proper Instructions,
specifying with respect to each such sale the:
1.) name of the issuer and the title of the Securities,
2.) number of shares, principal amount sold (and accrued
interest, if any) or other units sold,
3.) date of sale and settlement,
4.) sale price per unit,
5.) total amount receivable,
6.) name of the person to whom, or the broker through which,
the sale was made,
7.) name of the person to whom such Securities are to be
delivered, and
8.) Fund for which the sale was made.
-11-
<PAGE>
The Custodian shall deliver the Securities against receipt of the total amount
specified in the Written Instructions, or Oral Instructions, if applicable.
VI. C. DELIVERY VERSUS PAYMENT FOR PURCHASES AND SALES. Purchases and
-----------------------------------------------
sales of Securities effected by the Custodian will be made on a delivery versus
payment basis. The Custodian may, in its sole discretion, upon receipt of
Written Instructions, elect to settle a purchase or sale transaction in some
other manner, but only upon receipt of acceptable indemnification from the Fund.
VI. D. PAYMENT ON SETTLEMENT DATE. On contractual settlement date, the
--------------------------
account of the Fund will be charged for all purchased Securities settling on
that day, regardless of whether or not delivery is made. Likewise, on
contractual settlement date, proceeds from the sale of Securities settling that
day will be credited to the account of the Fund, irrespective of delivery.
VI. E. SEGREGATED ACCOUNTS. The Custodian shall, upon receipt of Proper
-------------------
Instructions so directing it, establish and maintain a segregated account or
accounts for and on behalf of a Fund. Cash and/or Securities may be transferred
into such account or accounts for specific purposes, to-wit:
1.) in accordance with the provision of any agreement among
the Trust, the Custodian, and a broker-dealer registered under
the 1934 Act, and also a member of the NASD (or any futures
commission merchant registered under the Commodity Exchange Act),
relating to compliance with the rules of the Options Clearing
Corporation and of any registered national securities exchange,
the Commodity Futures Trading Commission, any registered contract
market, or any similar organization or organizations requiring
escrow or other similar arrangements in connection with
transactions by the Fund;
-12-
<PAGE>
2.) for purposes of segregating cash or Securities in
connection with options purchased, sold, or written by the Fund
or commodity futures contracts or options thereon purchased or
sold by the Fund;
3.) for the purpose of compliance by the Fund with the
procedures required for reverse repurchase agreements, firm
commitment agreements, standby commitment agreements, short
sales, or any other securities by Act Release No. 10666, or any
subsequent release or releases or rule of the SEC relating to the
maintenance of segregated accounts by registered investment
companies;
4.) for the purpose of segregating collateral for loans of
Securities made by the Fund; and
5.) for other proper corporate purposes, but only upon
receipt of, in addition to Proper Instructions, a copy of a
resolution of the Board of Trustees, certified by an Officer,
setting forth the purposes of such segregated account.
Each segregated account established hereunder shall be established and
maintained for a single Fund only. All Proper Instructions relating to a
segregated account shall specify the Fund involved.
VI. F. ADVANCES FOR SETTLEMENT. Except as otherwise may be agreed upon
-----------------------
by the parties hereto, the Custodian shall not be required to comply with any
Written Instructions to settle the purchase of any Securities on behalf of a
Fund unless there is sufficient cash in the account(s) pertaining to such Fund
at the time or to settle the sale of any Securities from such an account(s)
unless such Securities are in deliverable form. Notwithstanding the foregoing,
if the purchase price of such Securities exceeds the amount of cash in the
account(s) at the time of such purchase, the Custodian may, in its sole
discretion, advance the amount of the difference in order to settle the purchase
of such Securities. The amount of any such advance shall be deemed a loan from
the Custodian to the Trust payable on demand and bearing interest accruing from
the date such loan is made up to but not including the date such loan is repaid
at the rate per annum customarily charged by the Custodian on similar loans.
-13-
<PAGE>
ARTICLE VII
TRUST INDEBTEDNESS
VII. A. BORROWINGS. In connection with any borrowings by the Trust, the
----------
Trust will cause to be delivered to the Custodian by a bank or broker requiring
Securities as collateral for such borrowings (including the Custodian if the
borrowing is from the Custodian), a notice or undertaking in the form currently
employed by such bank or broker setting forth the amount of collateral. The
Trust shall promptly deliver to the Custodian Written Instructions specifying
with respect to each such borrowing: (a) the name of the bank or broker, (b) the
amount and terms of the borrowing, which may be set forth by incorporating by
reference an attached promissory note duly endorsed by the Trust, or a loan
agreement, (c) the date, and time if known, on which the loan is to be entered
into, (d) the date on which the loan becomes due and payable, (e) the total
amount payable to the Trust on the borrowing date, and (f) the description of
the Securities securing the loan, including the name of the issuer, the title
and the number of shares or other units or the principal amount. The Custodian
shall deliver on the borrowing date specified in the Written Instructions the
required collateral against the lender's delivery of the total loan amount then
payable, provided that the same conforms to that which is described in the
Written Instructions. The Custodian shall deliver, in the manner directed by the
Trust, such Securities as additional collateral, as may be specified in Written
Instructions, to secure further any transaction described in this Article VII.
The Trust shall cause all Securities released from collateral status to be
returned directly to the Custodian and the Custodian shall receive from time to
time such return of collateral as may be tendered to it.
The Custodian may, at the option of the lender, keep such collateral in
its possession, subject to all rights therein given to the lender because of the
loan. The Custodian may require such reasonable conditions regarding such
collateral and its dealings with third-party lenders as it may deem appropriate.
-14-
<PAGE>
VII. B. ADVANCES. With respect to any advances of cash made by the
--------
Custodian to or for the benefit of a Fund for any purpose which results in the
Fund incurring an overdraft at the end of any Business Day, such advance shall
be repayable immediately upon demand made by the Custodian at any time.
ARTICLE VIII
CONCERNING THE CUSTODIAN
VIII. A. LIMITATIONS ON LIABILITY OF CUSTODIAN. Except as otherwise
-------------------------------------
provided herein, the Custodian shall not be liable for any loss or damage,
including counsel fees, resulting from its action or omission to act or
otherwise, except for any such loss or damage arising out of its negligence or
willful misconduct. The Trust, on behalf of the Fund and only from assets of the
Fund (or insurance purchased by the Trust with respect to its liabilities on
behalf of the Fund hereunder), shall defend, indemnify and hold harmless the
Custodian and its directors, officers, employees and agents with respect to any
loss, claim, liability or cost (including reasonable attorneys' fees) arising or
alleged to arise from or relating to the Trust's duties hereunder or any other
action or inaction of the Trust or its Trustees, officers, employees or agents,
except such as may arise from the negligent action, omission, willful misconduct
or breach of this Agreement by the Custodian, its directors, officers, employees
or agents.. The Custodian shall defend, indemnify and hold harmless the Trust
and its trustees, officers, employees or agents with respect to any loss, claim,
liability or cost (including reasonable attorneys' fees) arising or alleged to
arise from or relating to the Custodian's duties as specifically set forth in
this agreement with respect to the Fund hereunder or any other action
-15-
<PAGE>
or inaction of the Custodian or its directors, officers, employees, agents,
nominees, or Sub-Custodians as to the Fund, except such as may arise from the
negligent action, omission or willful misconduct of the Trust, its trustees,
officers, employees, or agents. The Custodian may, with respect to questions of
law apply for and obtain the advice and opinion of counsel to the Trust at the
expense of the Fund, or of its own counsel at its own expense, and shall be
fully protected with respect to anything done or omitted by it in good faith in
conformity with the advice or opinion of counsel to the Trust, and shall be
similarly protected with respect to anything done or omitted by it in good faith
in conformity with advice or opinion of its counsel, unless counsel to the Fund
shall, within a reasonable time after being notified of legal advice received by
the Custodian, have a differing interpretation of such question of law. The
Custodian shall be liable to the Trust for any proximate loss or damage
resulting from the use of the Book-Entry System or any Depository arising by
reason of any negligence, misfeasance or misconduct on the part of the Custodian
or any of its employees, agents, nominees or Sub-Custodians, but not for any
special, incidental, consequential, or punitive damages; provided, however, that
nothing contained herein shall preclude recovery by the Trust, on behalf of the
Fund, of principal and of interest to the date of recovery on Securities
incorrectly omitted from the Fund's account or penalties imposed on the Trust,
in connection with the Fund, for any failures to deliver Securities. In any case
in which one party hereto may be asked to indemnify the other or hold the other
harmless, the party from whom indemnification is sought (the "Indemnifying
Party") shall be advised of all pertinent facts concerning the situation in
question, and the party claiming a right to indemnification (the "Indemnified
Party") will use reasonable care to identify and notify the Indemnifying Party
promptly concerning any situation which presents or appears to present a claim
for indemnification against the Indemnifying Party. The Indemnifying Party shall
have the option to defend the
-16-
<PAGE>
Indemnified Party against any claim which may be the subject of the
indemnification, and in the event the Indemnifying Party so elects, such defense
shall be conducted by counsel chosen by the Indemnifying Party and satisfactory
to the Indemnified Party and the Indemnifying Party will so notify the
Indemnified Party and thereupon such Indemnifying Party shall take over the
complete defense of the claim and the Indemnifying Party shall sustain no
further legal or other expenses in such situation for which indemnification has
been sought under this paragraph, except the expenses of any additional counsel
retained by the Indemnified Party. In no case shall any party claiming the right
to indemnification confess any claim or make any compromise in any case in which
the other party has been asked to indemnify such party (unless such confession
or compromise is made with such other party's prior written consent. The
provisions of this section VIII. A. shall survive the termination of this
Agreement.
VIII. B. Actions not Required by Custodian. Without limiting the
generality of the foregoing, the Custodian, acting in the capacity of Custodian
hereunder, shall be under no obligation to inquire into, and shall not be liable
for:
1.) The validity of the issue of any Securities purchased by
or for the account of any Fund, the legality of the purchase
thereof, or the propriety of the amount paid therefor;
2.) The legality of the sale of any Securities by or for the
account of any Fund, or the propriety of the amount for which the
same are sold;
3.) The legality of the issue or sale of any Shares of any
Fund, or the sufficiency of the amount to be received therefor;
4.) The legality of the redemption of any Shares of any
Fund, or the propriety of the amount to be paid therefor;
5.) The legality of the declaration or payment of any
dividend by the Trust in respect of Shares of any Fund;
6.) The legality of any borrowing by the Trust on behalf of
the Trust or any Fund, using Securities as collateral;
7.) Whether the Trust or a Fund is in compliance with the
1940 Act, the regulations thereunder, the provisions of the
Trust's charter documents or by-laws, or its investment
objectives and policies as then in effect.
-17-
<PAGE>
VIII. C. NO DUTY TO COLLECT AMOUNTS DUE FROM DIVIDEND AND TRANSFER
---------------------------------------------------------
AGENT. The Custodian shall not be under any duty or obligation to take action to
- - -----
effect collection of any amount due to the Trust from any Dividend and Transfer
Agent of the Trust nor to take any action to effect payment or distribution by
any Dividend and Transfer Agent of the Trust of any amount paid by the Custodian
to any Dividend and Transfer Agent of the Trust in accordance with this
Agreement.
VIII. D. NO ENFORCEMENT ACTIONS. Notwithstanding Section D of Article
----------------------
V, the Custodian shall not be under any duty or obligation to take action, by
legal means or otherwise, to effect collection of any amount, if the Securities
upon which such amount is payable are in default, or if payment is refused after
due demand or presentation, unless and until (i) it shall be directed to take
such action by Written Instructions and (ii) it shall be assured to its
satisfaction (including prepayment thereof) of reimbursement of its costs and
expenses in connection with any such action.
VIII. E. AUTHORITY TO USE AGENTS AND SUB-CUSTODIANS. The Trust
------------------------------------------
acknowledges and hereby authorizes the Custodian to hold Securities through its
various agents described in Appendix C annexed hereto. In addition, the Trust
acknowledges that the Custodian may appoint one or more financial institutions,
as agent or agents or as sub-custodian or sub-custodians, including, but not
limited to, banking institutions located in foreign countries, for the purpose
of holding Securities and moneys at any time owned by the Fund. The Custodian
shall not be relieved of any obligation or liability under this Agreement in
connection with the appointment or activities of such agents or sub-custodians.
Any such agent or sub-custodian shall be qualified to serve as such for assets
of investment companies registered under the Act. The Funds shall reimburse the
Custodian for all costs incurred by the Custodian in connection with opening
accounts with any such agents or sub-custodians. Upon request, the Custodian
shall promptly forward to the Trust any documents it receives from any agent or
sub-custodian appointed hereunder which may assist trustees of registered
investment companies to fulfill their responsibilities under Rule 17f-5 of the
Act.
VIII. F. NO DUTY TO SUPERVISE INVESTMENTS. The Custodian shall not be
--------------------------------
under any duty or obligation to ascertain whether any Securities at any time
delivered to or held by it for the account of the Trust are such as properly may
be held by the Trust under the provisions of the Declaration of Trust and the
Trust's By-Laws.
-18-
<PAGE>
VIII. G. ALL RECORDS CONFIDENTIAL. The Custodian shall treat all
------------------------
records and other information relating to the Trust and the assets of all Funds
as confidential and shall not disclose any such records or information to any
other person unless (i) the Trust shall have consented thereto in writing or
(ii) such disclosure is compelled by law.
VIII. H. COMPENSATION OF CUSTODIAN. The Custodian shall be entitled to
-------------------------
receive and the Trust agrees to pay to the Custodian, for the Fund's account
from the Fund's assets only, such compensation as shall be determined pursuant
to Appendix E attached hereto, or as shall be determined pursuant to amendments
to Appendix E as approved by the Custodian and the Trust. The Custodian shall be
entitled to charge against any money held by it for the accounts of the Fund the
amount of any loss, damage, liability or expense, including counsel fees, for
which it shall be entitled to reimbursement under the provisions of this
Agreement as determined by agreement of the Custodian and the Trust or by the
final order of any court or arbitrator having jurisdiction and as to which all
rights of appeal shall have expired. The expenses which the Custodian may charge
against the account of a Fund include, but are not limited to, the expenses of
agents or Sub-Custodians incurred in settling transactions involving the
purchase and sale of Securities of the Fund.
VIII. I. RELIANCE UPON INSTRUCTIONS. The Custodian shall be entitled to
--------------------------
rely upon any Proper Instructions if such reliance is made in good faith. The
Trust agrees to forward to the Custodian Written Instructions confirming Oral
Instructions in such a manner so that such Written Instructions are received by
the Custodian, whether by hand delivery, telex, facsimile or otherwise, on the
same Business Day on which such Oral Instructions were given. The Trust agrees
that the failure of the Custodian to receive such confirming instructions shall
in no way affect the validity of the transactions or enforceability of the
transactions hereby authorized by the Trust. The Trust agrees that the Custodian
shall incur no liability to the Trust for acting upon Oral Instructions given to
the Custodian hereunder concerning such transactions.
-19-
<PAGE>
VIII. J. BOOKS AND RECORDS. The Custodian will (i) set up and maintain
-----------------
proper books of account and complete records of all transactions in the accounts
maintained by the Custodian hereunder in such manner as will meet the
obligations of the Fund under the Act, with particular attention to Section 31
thereof and Rules 3la-1 and 3la-2 thereunder and those records are the property
of the Trust, and (ii) preserve for the periods prescribed by applicable Federal
statute or regulation all records required to be so preserved. All such books
and records shall be the property of the Trust, and shall be available, upon
request, for inspection by duly authorized officers, employees or agents of the
Trust and employees of the SEC.
VIII. K. INTERNAL ACCOUNTING CONTROL SYSTEMS. The Custodian shall send
-----------------------------------
to the Trust any report received on the systems of internal accounting control
of the Custodian, or its agents or sub-custodians, as the Trust may reasonably
request from time to time.
VIII. L. NO MANAGEMENT OF ASSETS BY CUSTODIAN. The Custodian performs
------------------------------------
only the services of a custodian and shall have no responsibility for the
management, investment or reinvestment of the Securities or other assets from
time to time owned by any Fund. The Custodian is not a selling agent for Shares
of any Fund and performance of its duties as custodian shall not be deemed to be
a recommendation to any Fund's depositors or others of Shares of the Fund as an
investment. The Custodian shall have no duties or obligations whatsoever except
such duties and obligations as are specifically set forth in this Agreement, and
no covenant or obligation shall be implied in this Agreement against the
Custodian.
VIII. M. ASSISTANCE TO TRUST. The Custodian shall take all reasonable
-------------------
action, that the Trust may from time to time request, to assist the Trust in
obtaining favorable opinions from the Trust's independent accountants, with
respect to the Custodian's activities hereunder, in connection with the
preparation of the Fund's Form N- IA, Form N-SAR, or other annual reports to the
SEC.
VIII. N. GRANT OF SECURITY INTEREST. The Trust hereby pledges to and
--------------------------
grants the Custodian a security interest in the assets of any Fund to secure the
payment of any liabilities of the Fund to the Custodian for money borrowed from
the Custodian. This pledge is in addition to any other pledge of collateral by
the Trust to the Custodian.
-20-
<PAGE>
ARTICLE IX
TERMINATION
IX. A. TERMINATION. Either party hereto may terminate this Agreement
-----------
for any reason by giving to the other party a notice in writing specifying the
date of such termination, which shall be not less than ninety (90) days after
the date of giving of such notice. If such notice is given by the Trust, it
shall be accompanied by a copy of a resolution of the Board of Trustees of the
Trust, certified by the Secretary of the Trust, electing to terminate this
Agreement and designating a successor custodian or custodians each of which
shall be a bank or trust company having not less than $100,000,000 aggregate
capital, surplus, and undivided profits. In the event such notice is given by
the Custodian, the Trust shall, on or before the termination date, deliver to
the Custodian a copy of a resolution of the Board of Trustees of the Trust,
certified by the Secretary, designating a successor custodian or custodians to
act on behalf of the Trust. In the absence of such designation by the Trust, the
Custodian may designate a successor custodian which shall be a bank or trust
company having not less than $100,000,000 aggregate capital, surplus, and
undivided profits. Upon the date set forth in such notice this Agreement shall
terminate, and the Custodian, provided that it has received a notice of
acceptance by the successor custodian, shall deliver, on that date, directly to
the successor custodian all Securities and monies then owned by the Fund and
held by it as Custodian. Upon termination of this Agreement, the Trust shall pay
to the Custodian on behalf of the Trust such compensation as may be due as of
the date of such termination. The Trust agrees on behalf of the Trust that the
Custodian shall be reimbursed for its reasonable costs in connection with the
termination of this Agreement.
-21-
<PAGE>
IX. B. FAILURE TO DESIGNATE SUCCESSOR CUSTODIAN. If a successor
----------------------------------------
custodian is not designated by the Trust, or by the Custodian in accordance with
the preceding paragraph, or the designated successor cannot or will not serve,
the Trust shall, upon the delivery by the Custodian to the Trust of all
Securities (other than Securities held in the Book-Entry System which cannot be
delivered to the Trust) and moneys then owned by the Trust, be deemed to be the
custodian for the Trust, and the Custodian shall thereby be relieved of all
duties and responsibilities pursuant to this Agreement, other than the duty with
respect to Securities held in the Book-Entry System, which cannot be delivered
to the Trust, which shall be held by the Custodian in accordance with this
Agreement.
ARTICLE X
FORCE MAJEURE
Neither the Custodian nor the Trust shall be liable for any failure or
delay in performance of its obligations under this Agreement arising out of or
caused, directly or indirectly, by circumstances beyond its reasonable control,
including, without limitation, acts of God; earthquakes; fires; floods; wars;
civil or military disturbances; sabotage; strikes; epidemics; riots; labor
disputes; acts of civil or military authority; governmental actions; or
inability to obtain labor, material, equipment or transportation; provided,
however, that the Custodian, in the event of a failure or delay, shall use its
best efforts to ameliorate the effects of any such failure or delay.
ARTICLE XI
MISCELLANEOUS
XI. A. DESIGNATION OF AUTHORIZED PERSONS. Appendix A sets forth the
---------------------------------
names and the signatures of all Authorized Persons as of this date, as certified
by the Secretary of the Trust. The Trust agrees to furnish to the Custodian a
new Appendix A in form similar to the attached Appendix A, if any present
Authorized Person ceases to be an Authorized Person or if any other or
additional Authorized Persons are elected or appointed. Until such new Appendix
A shall be received, the Custodian shall be fully protected in acting under the
provisions of this Agreement upon Oral Instructions or signatures of the then
current Authorized Persons as set forth in the last delivered Appendix A.
-22-
<PAGE>
XI. B. LIMITATION OF PERSONAL LIABILITY. No recourse under any
--------------------------------
obligation of this Agreement or for any claim based thereon shall be had against
any organizer, shareholder, officer, trustee, past, present or future as such,
of the Trust or of any predecessor or successor, either directly or through the
Trust or any such predecessor or successor, whether by virtue of any
constitution, statute or rule of law or equity, or by the enforcement of any
assessment or penalty or otherwise; it being expressly agreed and understood
that this Agreement and the obligations thereunder are enforceable solely
against the assets of the Trust, and that no such personal liability whatever
shall attach to, or is or shall be incurred by, the organizers, shareholders,
officers, or trustees of the Trust or of any predecessor or successor, or any of
them as such, because of the obligations contained in this Agreement or implied
therefrom and that any and all such liability is hereby expressly waived and
released by the Custodian as a condition of, and as a consideration for, the
execution of this Agreement.
XI. C. AUTHORIZATION BY BOARD. The obligations set forth in this
----------------------
Agreement as having been made by the Trust have been made by the Board of
Trustees, acting as such Trustees for and on behalf of the Trust, pursuant to
the authority vested in them under the laws of the State of Ohio, the
Declaration of Trust and the By-Laws of the Trust. This Agreement has been
executed by Officers of the Trust as officers, and not individually, and the
obligations contained herein are not binding upon any of the Trustees, Officers,
agents or holders of shares, personally, but bind only the Trust and then only
to the extent of the assets of the Trust.
XI. D. CUSTODIAN'S CONSENT TO USE OF ITS NAME. The Trust shall obtain
--------------------------------------
the Custodian's consent prior to the publication and/or dissemination or
distribution, of the Prospectus and any other documents (including advertising
material) specifically mentioning the Custodian (other than merely by name and
address).
-23-
<PAGE>
XI. E. NOTICES TO CUSTODIAN. Any notice or other instrument in writing,
--------------------
authorized or required by this Agreement to be given to the Custodian, shall be
sufficiently given if addressed to the Custodian and mailed or delivered to it
at its offices at Star Bank Center, 425 Walnut .Street, M. L. 6118, Cincinnati,
Ohio 45202, attention Mutual Fund Custody Department, or at such other place as
the Custodian may from time to time designate in writing.
XI. F. NOTICES TO TRUST. Any notice or other instrument in writing,
----------------
authorized or required by this Agreement to be given to the Trust shall be
sufficiently given when delivered to the Trust or on the second Business Day
following the time such notice is deposited in the U.S. mail postage prepaid and
addressed to the Trust at its office at 1901 Avenue of the Stars, Suite 1231,
Los Angeles, California 90067 or at such other place as the Trust may from time
to time designate in writing.
XI. G. AMENDMENTS IN WRITING. This Agreement, with the exception of the
---------------------
Appendices, may not be amended or modified in any manner except by a written
agreement executed by both parties with the same formality as this Agreement,
and authorized and approved by a resolution of the Board of Trustees of the
Trust.
XI. H. SUCCESSORS AND ASSIGNS. This Agreement shall extend to and shall
----------------------
be binding upon the parties hereto, and their respective successors and assigns;
provided, however, that this Agreement shall not be assignable by the Trust or
by the Custodian, and no attempted assignment by the Trust or the Custodian
shall be effective without the written consent of the other party hereto.
XI. I. GOVERNING LAW. This Agreement shall be construed in accordance
-------------
with the laws of the State of Ohio.
XI. J. JURISDICTION. Any legal action, suit or proceeding to be
------------
instituted by either party with respect to this Agreement shall be brought by
such party exclusively in the courts of the State of Ohio or in the courts of
the United States for the Southern District of Ohio, and each party, by its
execution of this Agreement, irrevocably (i) submits to such jurisdiction and
(ii) consents to the service of any process or pleadings by first class U.S.
mail, postage prepaid and return receipt requested, or by any other means from
time to time authorized by the laws of such jurisdiction.
-24-
<PAGE>
XI. K. COUNTERPARTS. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
XI. L. HEADINGS. The headings of paragraphs in this Agreement are for
--------
convenience of reference only and shall not affect the meaning or construction
of any provision of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective Officers, thereunto duly authorized as of the day
and year first above written.
WITNESS: TRUST:
Alpha Analytics Investment Trust
Virginia Solomen By: /S/ ROBERT E. GIPSON
- - --------------------- -------------------------
WITNESS: CUSTODIAN:
Star Bank, N.A.
Gabrielle Jackson By: S/S LYNNETTE C. GIBSON
- - ---------------------- ----------------------
Lynnette C. Gibson
Vice President
-25-
<PAGE>
APPENDIX B
Series of the Trust
Alpha Analytics Small Cap Quant Fund
Alpha Analytics Value Fund
-27-
<PAGE>
APPENDIX C
Agents of the Custodian
The following agents are employed currently by Star Bank, N.A. for
securities processing and control ...
The Depository Trust Company (New York)
7 Hanover Square
New York, NY 10004
The Federal Reserve Bank
Cincinnati and Cleveland Branches
Bankers Trust Company
16 Wall Street
New York, NY 10005
(For Foreign Securities and certain non-DTC eligible Securities)
-28-
<PAGE>
APPENDIX D
STANDARDS OF SERVICE GUIDE
STAR BANK, N.A.
STANDARDS OF SERVICE GUIDE
Star Bank, N.A. is committed to providing superior quality service to
all customers and their agents at all times. We have compiled this guide as a
tool for our clients to determine our standards for the processing of security
settlements, payment collection, and capital change transactions. Deadlines
recited in this guide represent the times required for Star Bank to guarantee
processing. Failure to meet these deadlines will result in settlement at our
client's risk. In all cases, Star Bank will make every effort to complete all
processing on a timely basis.
Star Bank is a direct participant of the Depository Trust Company, a
direct member of the Federal Reserve Bank of Cleveland, and utilizes the Bankers
Trust Company as its agent for ineligible and foreign securities.
For corporate reorganizations, Star Bank utilizes SEI's Reorg Source,
Financial Information, Inc., XCITEK, DTC Important Notices, and the Wall Street
Journal.
For bond calls and mandatory puts, Star Bank utilizes SEI's Bond
Source, Kenny Information Systems, Standard & Poor's Corporation, and DTC
Important Notices. Star Bank will not notify clients of optional put
opportunities.
Any securities delivered free to Star Bank or its agents must be
received three (3) business days prior to any payment or settlement in order for
the Star Bank standards of service to apply.
Should you have any questions regarding the information contained in
this guide, please feel free to contact your account representative.
THE INFORMATION CONTAINED IN THIS STANDARDS OF SERVICE GUIDE IS SUBJECT TO
CHANGE. SHOULD ANY CHANGES BE MADE STAR BANK WILL PROVIDE YOU WITH AN UPDATED
COPY OF ITS STANDARDS OF SERVICE GUIDE.
-29-
<PAGE>
<TABLE>
<CAPTION>
STAR BANK SECURITY SETTLEMENT STANDARDS
- - ------------------------------------------------------------------------------------------------------------------------
TRANSACTION TYPE INSTRUCTIONS DEADLINES* DELIVERY INSTRUCTIONS
- - ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
DTC - Clearing House Funds 11:00 A.M. on Settlement Date DTC Participant #2219
For Account#_____________
DTC - Same Day Funds Settlement 12:30 P.M. on Settlement Date DTC Participant #2219
For Account #____________
Federal Reserve Bank of Cinti/Trust
Federal Reserve Book Entry 1:00 P.M. on Settlement Date for Star Bank, N.A. ABA# 042000013
For Account #_____________
Federal Reserve Bank of Cinti/Spec
Federal Reserve Book Entry 1:00 P.M. on Settlement Date for Star Bank, N.A. ABA# 042000013
(Repurchase Agreement For Account #_____________
Collateral Only)
PTC Securities 12:00 P.M. on Settlement Date PTC For Account BTRST/CUST
(GNMA Book Entry) (for Deliveries by 5:00 P.M. Sub Account: Star Bank, N.A. #090334
on Settlement Date minus 1
10:00 A.M. EST on Settlement Date Bankers Trust Company
Physical Securities (for Deliveries, by 4:00 P.M. on 16 Wall Street 4th Floor, Window 43
Settlement Date minus 1) for Star Bank Account #090334
Bankers Trust Company
CEDEL/EURO-CLEAR 4:00 P.M. on Settlement Date minus 3 Euroclear # 91648
For Star Bank Account #090334
Star Bank,N.A. Cinti/Trust ABA#
042000013
Cash Wire Transfer 3:00 P.M. Credit Account #9901877
Further Credit to ___________
Account # _______________
<FN>
* All times listed are Cincinnati time.
</FN>
</TABLE>
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<PAGE>
STAR BANK PAYMENT STANDARDS
- - --------------------------------------------------------------------------------
SECURITY TYPE INCOME PRINCIPAL
- - --------------------------------------------------------------------------------
Equities Payable Date + 1
Municipal Bonds* Payable Date Payable Date
Corporate Bonds* Payable Date + 1 Payable Date
Federal Reserve Bank Book Entry* Payable Date Payable Date
CMOs *
DTC Payable Date + 1 Payable Date + 1
Bankers Trust Payable Date + 2 Payable Date + 2
SBA Loan Certificates When Received When Received
Unit Investment Trust Certificates* Payable Date + 1 Payable Date + 1
Certificates of Deposit* Payable Date + 1 Payable Date + 1
Limited Partnerships When Received When Received
Foreign Securities When Received When Received
*Variable Rate Securities
Federal Reserve Bank Book Entry Payable Date Payable Date
DTC Payable Date + 1 Payable Date + 1
Bankers Trust Payable Date + 2 Payable Date + 2
NOTE: If a payable date falls on a weekend or bank holiday, payment
will be made on the immediately following business day.
-31-
<PAGE>
<TABLE>
<CAPTION>
STAR BANK CORPORATE REORGANIZATION STANDARDS
- - -------------------------------------------------------------------------------------------------------------------------
DEADLINE FOR CLIENT
TYPE OF ACTION NOTIFICATION TO CLIENT INSTRUCTIONS TRANSACTION
TO STAR BANK POSTING
- - -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Rights, Warrants, Later of 10 business days prior to 5 business days prior to expiration Upon receipt
and Optional Mergers expiration or receipt of notice
Mandatory Puts with Later of 10 business days prior to 5 business days prior to expiration Upon receipt
Option to Retain expiration or receipt of notice
Class Actions 10 business days prior to expiration 5 business days prior to expiration Upon receipt
date
Voluntary Tenders,
Exchanges, Later of 10 business days prior to 5 business days prior to expiration Upon receipt
and Conversions expiration or receipt of notice
Mandatory Puts, Defaults,
Liquidations, Bankruptcies, At posting of funds or securities
Stock Splits, Mandatory received None Upon receipt
Exchanges
Full and Partial Calls Later of 10 business days prior to None Upon receipt
expiration or receipt of notice
<FN>
NOTE: Fractional shares/par amounts resulting from any of the above
will be sold.
</FN>
</TABLE>
-32-
<PAGE>
STAR BANK, N.A.
PROPOSED DOMESTIC USTODY FEE SCHEDULE FOR ALPHA ANALYTIC INVESTMENT TRUST
Star Bank, N.A., as Custodian, will receive monthly compensation for services
according to the terms of the following Schedule:
I. PORTFOLIO TRANSACTION FEES:
---------------------------
(a) For each repurchase agreement transaction $ 7.00
(b) For each portfolio transaction processed through
DTC or Federal Reserve $ 9.00
(c) For each portfolio transaction processed through
our New York custodian $25.00
(d) For each GNMA/amortized Security Purchase $16.00
(e) For each ENMA Prin/Int Paydown, GNMA Sales $ 8.00
(f) For each option/future contract written,
exercised or expired $40.00
(g) For each Cedel/Euro clear transaction $80.00
(h) For each Disbursement (Fund expenses only) $ 5.00
A transaction is a purchase/sale of a security, free receipt/free delivery
(excludes initial conversion), maturity, tender or exchange:
II. MARKET VALUE FEE
----------------
Based upon an annual rate of: Million
-------
.0003 (3 Basis Points) on First $20
.0002 (2 Basis Points) on Next $20
.00015 (1.5 Basis Points) on Balance
III. MONTHLY MINIMUM FEE-PER FUND $400.00
----------------------------
IV. OUT-OF-POCKET EXPENSES
----------------------
The only out-of-pocket expenses charged to your account will be shipping
fees or transfer fees.
V. IRA DOCUMENTS
-------------
Per Shareholder/year to hold each IRA Document $ 8.00
VI. EARNINGS CREDITS
----------------
On a monthly basis any earnings credits generated from uninvested custody
balances will be applied against any cash management service fees
generated. Earnings credits are based on a Cost of Funds Tiered Earnings
Credit Rate.
-33-
<PAGE>
STAR BANK
PROPOSED CASH MANAGEMENT FEE SCHEDULE FOR ALPHA ANALYTIC INVESTMENT TRUST
<TABLE>
<CAPTION>
SERVICES UNIT COST ($) MONTHLY COST ($)
- - -------- ------------- ----------------
<S> <C> <C>
D.D.A. Account Maintenance 15.00
Deposits .42 --
Deposited Items .109
Checks Paid .159
Balance Reporting-P.C. Access 50.00 1st Acct
35.00 each add'l
ACH Transaction .105
ACH Monthly Maintenance 40.00
ACH Additions, Deletions, Changes 6.00
ACH Stop Payment 5.00
ACH Debits .12
Deposited Items Returned 6.00
International Items Returned 10.00
NSF Returned Checks 25.00
Stop Payments 22.00
Data Transmission per account 115.00
Drafts Cleared .179
Lockbox Maintenance 60.00
Lockbox items Processed .34
Miscellaneous Lockbox items .12
Positive Pay .06
Issued Items .015
Invoicing for Service Charge 15.00
Wires Incoming
Domestic 11.00
International 11.00
Wires Outgoing
Domestic International
Repetitive 14.00 Repetitive 35.00
Non-Repetitive 13.00 Non-Repetitive 40.00
PC-Initiated Wires:
Domestic International
Repetitive 10.00 Repetitive 25.00
Non-Repetitive 11.00 Non-Repetitive 25.00
Customer Initiated 9.00
<FN>
UNCOLLECTED CHARGE -- STAR BANK PRIME RATE AS OF FIRST OF MONTH PLUS 4%
OTHER AVAILABLE CASH MANAGEMENT SERVICES ARE PRICED SEPARATELY.
Revised July 1, 1998
</FN>
</TABLE>
- - --------------------------------------------------------------------------------
ADMINISTRATIVE SERVICE AGREEMENT
BETWEEN
ALPHA ANALYTICS INVESTMENT TRUST
AND
AMERICAN DATA SERVICES, INC.
[GRAPHIC OMITTED]
- - --------------------------------------------------------------------------------
<PAGE>
- - --------------------------------------------------------------------------------
INDEX
- - --------------------------------------------------------------------------------
1. DUTIES OF THE ADMINISTRATOR............................................... 3
2. COMPENSATION OF THE ADMINISTRATOR......................................... 4
3. RESPONSIBILITY AND INDEMNIFICATION........................................ 4
4. LIMITATION OF LIABILITY TO TRUST PROPERTY.................................. 5
5. REPORTS................................................................... 5
6. ACTIVITIES OF THE ADMINISTRATOR........................................... 6
7. RECORDS................................................................... 6
8. CONFIDENTIALITY........................................................... 6
9. DURATION AND TERMINATION OF THE AGREEMENT................................. 6
10. ASSIGNMENT............................................................... 6
11. NEW YORK LAWS TO APPLY................................................... 6
12. AMENDMENTS TO THIS AGREEMENT.............................................. 7
13. MERGER OF AGREEMENT....................................................... 7
14. NOTICES................................................................... 7
SCHEDULE A.................................................................... 8
- - ----------
(A) ADMINISTRATIVE SERVICE FEE:............................................... 8
FEE INCREASES............................................................. 8
(B) EXPENSES.................................................................. 8
(C) STATE REGISTRATION (BLUE SKY) SURCHARGE:.................................. 9
(D) SPECIAL REPORTS........................................................... 9
(E) SERVICE DEPOSIT........................................................... 9
SCHEDULE B....................................................................10
- - ----------
2
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT made the 7th day of December 1998, by and between Alpha Analytics
Investment Trust., an Ohio Business Trust, having its principal office and place
of business at 1901 Avenue of the Stars, Los Angeles, California (the "Fund"),
and American Data Services, Inc., a New York corporation having its principal
office and place of business at the Hauppauge Corporate Center, 150 Motor
Parkway, Suite 109, Hauppauge, New York 11788 (the "Administrator").
BACKGROUND
WHEREAS, the Fund is a diversified open-end management investment
company registered with the United States Securities and Exchange Commission
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Administrator is a corporation experienced in
providing administrative services to mutual funds and possesses facilities
sufficient to provide such services; and
WHEREAS, the Fund desires to avail itself of the experience,
assistance and facilities of the Administrator and to have the Administrator
perform for the Fund certain services appropriate to the operations of the Fund
and the Administrator is willing to furnish such services in accordance with the
terms hereinafter set forth.
TERMS
NOW, THEREFORE, in consideration of the promises and mutual
covenants hereinafter contained, the Fund and the Administrator hereby agree to
the following:
1. DUTIES OF THE ADMINISTRATOR.
The Administrator will provide the Fund with the necessary office
space, communication facilities and personnel to perform the following services
for the Fund:
(a) Monitor all regulatory (1940 Act and IRS) and prospectus
restrictions for compliance;
(b) Prepare and coordinate the printing of semi-annual and annual
financial statements;
(c) Prepare selected management reports for performance and compliance
analyses as agreed upon by the Fund and Administrator from time to
time;
(d) Prepare selected financial data required for directors' meetings as
agreed upon by the Fund and the Administrator from time to time and
coordinate directors meeting agendas with outside legal counsel to
the Fund;
(e) Determine income and capital gains available for distribution and
calculate distributions required to meet regulatory, income, and
excise tax requirements, to be reviewed by the Fund's independent
public accountants;
(f) Prepare the Fund's federal, state, and local tax returns to be
reviewed by the Fund's independent public accountants;
3
<PAGE>
(g) Prepare and maintain the Fund's operating expense budget to
determine proper expense accruals to be charged to the Fund in
order to calculate it's daily net asset value;
(h) 1940 ACT filings -
In conjunction with the Fund's outside legal counsel the
Administrator will:
-- Prepare the Fund's Form N-SAR reports;
-- Update all financial sections of the Fund's Statement of
Additional Information and coordinate its completion;
-- Update all financial sections of the Fund's prospectus and
coordinate its completion;
-- Update all financial sections of the Fund's proxy statement and
coordinate its completion;
-- Prepare an annual update to Fund's 24f-2 filing (if applicable);
(i) Monitor services provided by the Fund's custodian bank as well as
any other service providers to the Fund;
(j) Provide appropriate financial schedules (as requested by the Fund's
independent public accountants or SEC examiners), coordinate the
Fund's annual or SEC audit, and provide office facilities as may be
required;
(k) Attend management and board of directors meetings as requested;
(l) The preparation and filing (filing fee to be paid by the Fund) of
applications and reports as necessary to register or maintain the
Funds registration under the securities or "Blue Sky" laws of the
various states selected by the Fund or its Distributor.
The Administrator shall, for all purposes herein, be deemed to be an independent
contractor and shall, unless otherwise expressly provided or authorized, have no
authority to act for or represent the Fund in any way or otherwise be deemed an
agent of the Fund.
2. COMPENSATION OF THE ADMINISTRATOR.
In consideration of the services to be performed by the Administrator
as set forth herein for each portfolio listed in Schedule B, the Administrator
shall be entitled to receive compensation and reimbursement for all reasonable
out-of-pocket expenses. The Fund agrees to pay the Administrator the fees and
reimbursement of out-of-pocket expenses as set forth in the fee schedule
attached hereto as Schedule A.
3. RESPONSIBILITY AND INDEMNIFICATION.
(a) The Administrator shall be held to the exercise of reasonable care
in carrying out the provisions of the Agreement, but shall be without liability
to the Fund for any action taken or omitted by it in good faith without
negligence, bad faith, willful misconduct or reckless disregard of its duties
hereunder. It shall be entitled to rely upon and may act upon the accounting
records and reports generated by the Fund, advice of the Fund, or of counsel for
the Fund and upon statements of the Fund's independent accountants, and shall be
without liability for any action reasonably taken or omitted pursuant to such
records and reports or advice, provided that such action is not, to the
knowledge of the Administrator, in violation of applicable federal or state laws
or regulations, and provided further that such action is taken without
negligence, bad faith, willful misconduct or reckless disregard of its duties.
4
<PAGE>
(b) The Administrator shall not be liable to the Fund for any error of
judgment or mistake of law or for any loss arising out of any act or omission by
the Administrator in the performance of its duties hereunder except as
hereinafter set forth. Nothing herein contained shall be construed to protect
the Administrator against any liability to the Fund or its security holders to
which the Administrator shall otherwise be subject by reason of willful
misfeasance, bad faith, negligence in the performance of its duties on behalf of
the Fund, reckless disregard of the Administrator's obligations and duties under
this Agreement or the willful violation of any applicable law.
(c) Except as may otherwise be provided by applicable law, neither the
Administrator nor its stockholders, officers, directors, employees or agents
shall be subject to, and the Fund shall indemnify and hold such persons harmless
from and against, any liability for and any damages, expenses or losses incurred
by reason of the inaccuracy of information furnished to the Administrator by the
Fund or its authorized agents or in connection with any error in judgment or
mistake of law or any act or omission in the course of, connected with or
arising out of any services to be rendered hereunder, except by reason of
willful misfeasance, bad faith or negligence in the performance of its duties,
by reason of reckless disregard of the Administrator's obligations and duties
under this Agreement or the willful violation of any applicable law.
4. LIMITATION OF LIABILITY TO TRUST PROPERTY
The term "Alpha Analytics Investment Trust" means and refers to the
Trustees from time to time serving under the Trust's Declaration of Trust as the
same may subsequently thereto have been or subsequently hereto be, amended. It
is expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the trustees, shareholders, nominees, officers, agents or
employees of the Trust personally, but bind only the trust property of the
Trust, as provided in the Declaration of Trust of the Trust. The execution and
delivery of this Agreement have been authorized by the trustees and shareholders
of the Trust and signed by the officers of the Trust, acting as such, and
neither such authorization by such trustees and shareholders nor such execution
and delivery by such officers shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the trust property of the Trust as provided in its Declaration of
Trust. A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of State of Ohio.
5. REPORTS.
(a) The Fund shall provide to the Administrator on a quarterly basis a
report of a duly authorized officer of the Fund representing that all
information furnished to the Administrator during the preceding quarter was
true, complete and correct to the best of its knowledge. The Administrator shall
not be responsible for the accuracy of any information furnished to it by the
Fund, and the Fund shall hold the Administrator harmless in regard to any
liability incurred by reason of the inaccuracy of such information.
(b) The Administrator shall provide to the Board of Directors of the
Fund, on a quarterly basis, a report, in such a form as the Administrator and
the Fund shall from time to time agree, representing that, to its knowledge, the
Fund was in compliance with all requirements of applicable federal and state
law, including without limitation, the rules and regulations of the Securities
and Exchange Commission and the Internal Revenue Service, or specifying any
instances in which the Fund was not so in compliance. Whenever, in the course of
performing its duties under this Agreement, the Administrator determines, on the
basis of information supplied to the Administrator by the Fund, that a violation
of applicable law has occurred, or that, to its knowledge, a possible violation
of applicable law may have occurred or, with the passage of time, could occur,
the Administrator shall promptly notify the Fund and its counsel of such
violation.
5
<PAGE>
6. ACTIVITIES OF THE ADMINISTRATOR.
The Administrator shall be free to render similar services to others so
long as its services hereinunder are not impaired thereby.
7. RECORDS.
The records maintained by the Administrator shall be the property of
the Fund, and shall be surrendered to the Fund, at the expense of the Fund,
promptly upon request by the Fund, provided that all service fees and expenses
charged by the Administrator in the performance of its duties hereunder have
been fully paid to the satisfaction of the Administrator, in the form in which
such accounts and records have been maintained or preserved. The Administrator
agrees to maintain a back-up set of accounts and records of the Fund (which
back-up set shall be updated on at least a weekly basis) at a location other
than that where the original accounts and records are stored. The Administrator
shall assist the Fund's independent auditors, or, upon approval of the Fund, any
regulatory body, in any requested review of the Fund's accounts and records. The
Administrator shall preserve the accounts and records as they are required to be
maintained and preserved by Rule 31a-1.
8. CONFIDENTIALITY.
The Administrator agrees that it will, on behalf of itself and its
officers and employees, treat all transactions contemplated by this Agreement,
and all other information germane thereto, as confidential and such information
shall not be disclosed to any person except as may be authorized by the Fund.
9. DURATION AND TERMINATION OF THE AGREEMENT.
This Agreement shall become effective as of the date hereof and shall
remain in force for a period of three (3) years, provided however, that both
parties to this Agreement have the option to terminate the Agreement, upon
ninety (90) days prior written notice.
Should the Fund exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be borne by
the Fund. Additionally, the Administrator reserves the right to charge for any
other reasonable expenses associated with such termination.
10. ASSIGNMENT.
This Agreement shall extend to and shall be binding upon the parties
hereto and their respective successors and assigns; provided, however, that this
Agreement shall not be assignable by the Fund without the prior written consent
of the Administrator, or by the Administrator without the prior written consent
of the Fund.
11. NEW YORK LAWS TO APPLY
The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the State of New York as at the time in effect and
the applicable provisions of the 1940 Act. To the extent that the applicable law
of the State of New York, or any of the provisions herein, conflict with the
applicable provisions of the 1940 Act, the latter shall control.
6
<PAGE>
12. AMENDMENTS TO THIS AGREEMENT.
This Agreement may be amended by the parties hereto only if such
amendment is in writing and signed by both parties.
13. MERGER OF AGREEMENT
This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject matter
hereof whether oral or written.
14. NOTICES.
All notices and other communications hereunder shall be in writing,
shall be deemed to have been given when delivered in person or by certified
mail, return receipt requested, and shall be given to the following addresses
(or such other addresses as to which notice is given):
To the Fund: To the Administrator:
Robert E. Gipson Michael Miola
President President
Alpha Analytics Investment Trust American Data Services, Inc.
1901 Avenue of the Stars, Suite 123 150 Motor Parkway, Suite 109
Los Angeles, CA 90067 Hauppauge, NY 11788
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
ALPHA ANALYTICS INVESTMENT TRUST AMERICAN DATA SERVICES, INC.
By:/s/___________________________ By:/s/_________________________
Robert E. Gipson, President Michael Miola, President
7
<PAGE>
SCHEDULE A
----------
(A) ADMINISTRATIVE SERVICE FEE:
For the services rendered by the Administrator in its capacity as
administrator, as specified in Paragraph 1. DUTIES OF THE ADMINISTRATOR., the
Fund shall pay the Administrator within ten (10) days after receipt of an
invoice from the Administrator at the beginning of each month, a fee equal to
the greater of:
NOTE: The following fees are per portfolio serviced.
MINIMUM FEE:
CALCULATED FEE WILL BE BASED UPON PRIOR MONTH AVERAGE NET ASSETS:
(No prorating partial months)
EACH PORTFOLIO
--------------
Under $5 million ............................. $1,500
From $5 million to $10 million................ 1,750
From $10 million to $20 million............... 2,000
From $20 million on........................... 2,500
OR,
NET ASSET CHARGE:
1/12th of 0.012% (12 basis points) of average net assets of
portfolio for month.
FEE INCREASES
-------------
On each annual anniversary date of this Agreement, the fees enumerated above
will be increased by the change in the Consumer Price Index for the Northeast
region (CPI) for the twelve-month period ending with the month preceding such
annual anniversary date.
(B) EXPENSES.
The Fund shall reimburse the Administrator for any out-of-pocket
expenses , exclusive of salaries, advanced by the Administrator in connection
with but not limited to the printing or filing of documents for the Fund,
travel, telephone, quotation services, facsimile transmissions, stationery and
supplies, record storage, postage, telex, and courier charges, incurred in
connection with the performance of its duties hereunder. The Administrator shall
provide the Fund with a monthly invoice of such expenses and the Fund shall
reimburse the Administrator within fifteen (15) days after receipt thereof.
8
<PAGE>
(C) STATE REGISTRATION (BLUE SKY) SURCHARGE:
The fees enumerated in paragraph (a) above include the initial state
registration, renewal and maintenance of registrations (as detailed in Paragraph
1(l) DUTIES OF THE ADMINISTRATOR) for three (3) states. Each additional state
registration requested will be subject to the following fees:
Initial registration ............... $295.00
Registration renewal ............... $150.00
Sales reports (if required) ........ $ 25.00
(D) SPECIAL REPORTS.
All reports and /or analyses requested by the Fund, its auditors, legal
counsel, portfolio manager, or any regulatory agency having jurisdiction over
the Fund, that are not in the normal course of fund administrative activities as
specified in Section 1 of this Agreement shall be subject to an additional
charge, agreed upon in advance, based upon the following rates:
Labor:
Senior staff - $150.00/hr.
Junior staff - $ 75.00/hr.
Computer time - $ 45.00/hr.
(E) SERVICE DEPOSIT.
The Fund will remit to the Administrator upon execution of this
Agreement a security deposit equal to one (1) month's minimum fee under this
Agreement, computed in accordance with the number of portfolios listed in
Schedule B of this Agreement. The Fund will have the option to have the security
deposit applied to the last month's service fee, or applied to any new contract
between the Fund and the Administrator.
However, if the Fund elects or is forced to terminate this Agreement for any
reason what-so-ever (including, but not limited to, the voluntary or involuntary
termination of the Fund, liquidation of the Fund's assets, the sale or merger of
the Fund or it's assets to any successor entity) prior to the termination date
of this Agreement as specified in Paragraph 8 of this Agreement, the Fund will
forfeit the Security Deposit paid to the Administrator upon execution of this
Agreement
9
<PAGE>
SCHEDULE B
----------
PORTFOLIOS TO BE SERVICED UNDER THIS AGREEMENT:
ALPHA ANALYTICS VALUE FUND
ALPHA ANALYTICS SMALL CAP QUANT FUND
10
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of this
Pre-effective Amendment No. 1 to the Registration Statement for the Alpha
Analytics Investment Trust of our audit report of the statement of assets and
liabilities of the Trust and all references to our firm included in or made a
part of this Amendment.
McCurdy & Associates CPA's, Inc.
December 22, 1998
-35-
December 22, 1998
Alpha Analytics Investment Trust
1901 Avenue of the Stars
Suite 1100
Los Angeles, California 90067
Gentlemen:
The undersigned hereby purchases 5,000 shares of the Alpha Analytics
Small Cap Quant Fund at $10.00 per share, and 5,000 shares of the Alpha
Analytics Value Fund at $10.00 per share, representing a total investment of
$100,000 in the shares of the series of Alpha Analytics Investment Trust. The
undersigned hereby represents that (i) such purchase is for investment purposes,
and (ii) the undersigned has no present intention of redeeming or selling said
shares.
CORPORATE MANAGEMENT GROUP RETIREMENT PLAN
/s/
---------------------------------------------
By: Robert E. Gipson, Trustee
<PAGE>
December 22, 1998
Alpha Analytics Investment Trust
1901 Avenue of the Stars
Suite 1231
Los Angeles, California 90067
Gentlemen:
The undersigned hereby purchase 100 shares of the Alpha Analytics Small
Cap Quant Fund at $10.00 per share, and 100 shares of the Alpha Analytics Value
Fund at $10.00 per share, representing a total investment of $2,000 in the
shares of the series of Alpha Analytics Investment Trust. The undersigned hereby
represents that (i) such purchase is for investment purposes, and (ii) the
undersigned has no present intention of redeeming or selling said shares.
/s/
-----------------------------------
Robert E. Gipson
/s/
-----------------------------------
Penelope H. Gipson
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
ALPHA ANALYTICS VALUE FUND
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> JUL-31-1999
<PERIOD-START> DEC-15-1998
<PERIOD-END> JUL-31-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 51,000
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 51,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 5,100
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 5,100
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
ALPHA ANALYTICS SMALL CAP QUANT FUND
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> JUL-31-1999
<PERIOD-START> DEC-15-1998
<PERIOD-END> JUL-31-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 51,000
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 51,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 5,100
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 5,100
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, ALPHA ANALYTICS INVESTMENT TRUST, a business trust organized
under the laws of the State of Ohio (hereinafter referred to as the "Trust"),
periodically files amendments to its Registration Statement with the Securities
and Exchange Commission under the provisions of the Securities Act of 1933 and
the Investment Company Act of 1940, as amended; and
WHEREAS, the undersigned is the President and a Trustee of the Trust;
NOW, THEREFORE, the undersigned hereby constitutes and appoints JAMES
R. CUMMINS and DONALD S. MENDELSOHN, and each of them, his attorneys for him and
in his name, place and stead, and in his office and capacity in the Trust, to
execute and file any Amendment or Amendments to the Trust's Registration
Statement, hereby giving and granting to said attorneys full power and authority
to do and perform all and every act and thing whatsoever requisite and necessary
to be done in and about the premises as fully to all intents and purposes as he
might or could do if personally present at the doing thereof, hereby ratifying
and confirming all that said attorneys may or shall lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 9th
day of December, 1998.
/s/_______________________
Robert E. Gipson
President and Trustee
STATE OF CALIFORNIA )
) ss:
COUNTY OF LOS ANGELES )
My Commission Expires: 4/15/00
On December 9, 1998, before me, Virginia Solomen, Notary Public,
personally appeared ROBERT E. GIPSON, personally known to me to be the person
whose name is subscribed to the within instrument and acknowledged to me that he
executed the same in his authorized capacity and that by his signature on the
instrument the person, or the entity upon behalf of which the person acted,
executed the instrument.
-38-
<PAGE>
WITNESS my hand and official seal.
/s/ VIRGINIA SOLOMEN
- - --------------------------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, ALPHA ANALYTICS INVESTMENT TRUST, a business trust organized
under the laws of the State of Ohio (hereinafter referred to as the "Trust"),
periodically files amendments to its Registration Statement with the Securities
and Exchange Commission under the provisions of the Securities Act of 1933 and
the Investment Company Act of 1940, as amended; and
WHEREAS, the undersigned is Secretary, Treasurer and a Trustee of the
Trust;
NOW, THEREFORE, the undersigned hereby constitutes and appoints JAMES
R. CUMMINS and DONALD S. MENDELSOHN, and each of them, his attorneys for him and
in his name, place and stead, and in his office and capacity in the Trust, to
execute and file any Amendment or Amendments to the Trust's Registration
Statement, hereby giving and granting to said attorneys full power and authority
to do and perform all and every act and thing whatsoever requisite and necessary
to be done in and about the premises as fully to all intents and purposes as he
might or could do if personally present at the doing thereof, hereby ratifying
and confirming all that said attorneys may or shall lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
9th day of December, 1998.
/s/______________________________
Jack P. McNally
Secretary, Treasurer and Trustee
STATE OF CALIFORNIA )
) ss:
COUNTY OF LOS ANGELES )
My Commission Expires: 4/15/00
On December 9, 1998, before me, Virginia Solomen, Notary Public,
personally appeared JACK P. McNALLY, personally known to me to be the person
whose name is subscribed to the within instrument and acknowledged to me that he
executed the same in his authorized capacity and that by his signature on the
instrument the person, or the entity upon behalf of which the person acted,
executed the instrument.
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<PAGE>
WITNESS my hand and official seal.
s/s Virginia Solomen
____________________________
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<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, ALPHA ANALYTICS INVESTMENT TRUST, a business trust organized
under the laws of the State of Ohio (hereinafter referred to as the "Trust"),
periodically files amendments to its Registration Statement with the Securities
and Exchange Commission under the provisions of the Securities Act of 1933 and
the Investment Company Act of 1940, as amended; and
WHEREAS, the undersigned is a Trustee of the Trust;
NOW, THEREFORE, the undersigned hereby constitutes and appoints JAMES
R. CUMMINS and DONALD S. MENDELSOHN, and each of them, her attorneys for her and
in her name, place and stead, and in her office and capacity in the Trust, to
execute and file any Amendment or Amendments to the Trust's Registration
Statement, hereby giving and granting to said attorneys full power and authority
to do and perform all and every act and thing whatsoever requisite and necessary
to be done in and about the premises as fully to all intents and purposes as she
might or could do if personally present at the doing thereof, hereby ratifying
and confirming all that said attorneys may or shall lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set her hand this 15th
day of December, 1998.
/s/
-----------------------------------
Michelle M. Schoeffel
Trustee
STATE OF CALIFORNIA )
) ss:
COUNTY OF LOS ANGELES )
My Commission Expires: 4/15/00
On December 15,1998, before me,Virginia Solomen, Notary Public,
personally appeared MICHELLE M. SCHOEFFEL, personally known to me to be the
person whose name is subscribed to the within instrument and acknowledged to me
that she executed the same in her authorized capacity and that by her signature
on the instrument the person, or the entity upon behalf of which the person
acted, executed the instrument.
-46-
<PAGE>
WITNESS my hand and official seal.
Virginia Solomen
___________________________________________
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<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, ALPHA ANALYTICS INVESTMENT TRUST, a business trust organized
under the laws of the State of Ohio (hereinafter referred to as the "Trust"),
periodically files amendments to its Registration Statement with the Securities
and Exchange Commission under the provisions of the Securities Act of 1933 and
the Investment Company Act of 1940, as amended; and
NOW, THEREFORE, the undersigned hereby constitutes and appoints JAMES
R. CUMMINS and DONALD S. MENDELSOHN, and each of them, his attorneys for him and
in his name, place and stead, and in his office and capacity in the Trust, to
execute and file any Amendment or Amendments to the Trust's Registration
Statement, hereby giving and granting to said attorneys full power and authority
to do and perform all and every act and thing whatsoever requisite and necessary
to be done in and about the premises as fully to all intents and purposes as he
might or could do if personally present at the doing thereof, hereby ratifying
and confirming all that said attorneys may or shall lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the Trust has caused its name to be subscribed
hereto by the President this 9th day of December, 1998.
ATTEST: ALPHA ANALYTICS INVESTMENT TRUST
/s/__________________________ By:/s/_______________________________
Jack P. McNally, Secretary Robert E. Gipson, President
STATE OF CALIFORNIA )
) ss:
COUNTY OF LOS ANGELES )
My Commission Expires: 4/15/00
On December 9th, 1998, before me, Virginia Solomen, Notary Public,
personally appeared ROBERT E. GIPSON, President and JACK P. McNALLY, Secretary,
personally known to me to be the persons whose names are subscribed to the
within instrument and acknowledged to me that they executed the same in their
authorized capacities and that by their signatures on the instrument the
persons, or the entity upon behalf of which the persons acted, executed the
instrument.
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<PAGE>
WITNESS my hand and official seal.
Virginia Solomen
____________________________________________
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CERTIFICATE
The undersigned, Secretary of Alpha Analytics Investment Trust, hereby
certifies that the following resolution was duly adopted by a majority of the
Board of Trustees at a meeting held on November 23, 1998, and is in full force
and effect:
"WHEREAS, Alpha Analytics Investment Trust, a business trust
organized under the laws of the State of Ohio (hereinafter
referred to as the "Trust"), periodically files amendments to
its Registration Statement with the Securities and Exchange
Commission under the provisions of the Securities Act of 1933
and the Investment Company Act of 1940, as amended;
NOW, THEREFORE, the undersigned hereby constitutes and
appoints JAMES R. CUMMINS and DONALD S. MENDELSOHN, and each
of them, its attorneys for it and in its name, place and
stead, to execute and file any Amendment or Amendments to the
Trust's Registration Statement, hereby giving and granting to
said attorneys full power and authority to do and perform all
and every act and thing whatsoever requisite and necessary to
be done in and about the premises as fully to all intents and
purposes as it might or could do if personally present at the
doing thereof, hereby ratifying and confirming all that said
attorneys may or shall lawfully do or cause to be done by
virtue hereof."
Dated: November 23, 1998 /S/JACK P. MCNALLY
----------------
Jack P. McNally, Secretary
Alpha Analytics Investment Trust
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