UNDERWRITING AGREEMENT
THIS AGREEMENT is made as of August 21, 1998, by and between
Upright Growth Fund, a portfolio of Upright Investments Trust of Delaware
Business Trust ("FUND"),and Maxus Securities Corp., an Ohio corporation
("Underwriter").
WHEREAS, the Fund is an investment company registered under the
Investment Company Act of 1940, as amended (the "Act"); and
WHEREAS, Underwriter is a broker-dealer registered with the Securities
and Exchange Commission and a member of the National Association of Securities
Dealers, Inc., (the "NASD"); and
WHEREAS, the Fund and Underwriter are desirous of entering into an
agreement providing for the distribution by Underwriter of shares of beneficial
interest (the "Shares") of the Upright Growth Fund series of shares of the
Upright Investments Trust (the "Series").
NOW, THEREFORE, in consideration of the promises and agreements of the
parties contained herein, the parties agree as follows:
1. Appointment. The Fund hereby appoints Underwriter as its agent for
the distribution of the Shares in the states where such a requirement exists.
The services of the Distributor to the Fund under this Agreement are not to be
deemed exclusive, and Distributor shall be free to render similar services or
other services to others so long as its services hereunder are not impaired
thereby. Underwriter hereby accepts such appointment under the terms of this
Agreement. Notwithstanding any other provision hereof, the Trust may terminate,
suspend or withdraw the offering of Shares of any Series whenever, in its sole
discretion, it deems such action to be desirable.
2. Sale and Repurchase of Shares.
(a) Underwriter, as agent for the Fund, will sell Shares
to the public Against orders therefor in the at the regular public price
currently determined by the Fund in the manner described in their offering
Prospectuses, all such sales to comply with the provisions of the Act and the
rules and regulations of the Securities and Exchange Commission promulgated
thereunder.
(b) Underwriter will also have the right to take, as agent
for the Fund, all actions, which, in Underwriter's judgement, are necessary to
carry into, effect the distribution of the Shares.
(c) The net asset value of the Shares of each Series (or
Class of a Series shall be determined in the manner provided in the Registration
Statement, and when determined shall be applicable to transactions as provided
for in the Registration Statement. The net asset value of the Shares of each
Series (or each Class of a Series) Shall be calculated by the Upright Financial
Corp. (Administrator) or by another entity on behalf of the Upright Growth Fund.
Underwriter shall have no duty to inquire into or liability for the accuracy of
the net asset value per share is calculated.
(d) On every sale, the Fund shall receive the applicable
net asset Value of the shares promptly, but in no event later than the third
business day following the date on which Underwriter shall have received an
order for the purchase of the Shares. (e) Upon receipt of purchase instructions,
Underwriter will transmit Such instructions to the Fund or its transfer agent
for registration of the Shares purchased.
(f) Nothing in the Agreement shall prevent Underwriter or
any Affiliated person (as defined in the Act) of Underwriter from acting as
underwriter or distributor for any other person, firm or corporation (including
other investment companies) or in any way limit or restrict Underwriter or any
such affiliated person from buying, selling or trading any securities for its or
their own account or for the accounts of others for whom it or they may be
acting; provided, however, that Underwriter expressly represents that it will
undertake no activities which, in its judgment, will adversely affect the
performance of its obligations to the Fund under this Agreement.
(g) Underwriter, as agent of and for the account of the
Fund, may Repurchase the Shares at such prices and upon such terms and
conditions as shall be specified in the Registration Statement. At the end of
each business day, the Underwriter shall notify the Fund and the Fund's transfer
agent of the number of shares redeemed, and the identity of the shareholders or
dealers offering Shares for repurchase. Upon such notice, the Fund's Transfer
Agent shall pay the Underwriter the net asset value of the redeemed shares in
cash or in the form of a credit against monies due the Fund from the Underwriter
as proceeds from the sale of Shares. The Fund reserves the right to suspend such
repurchase right upon written notice to the Underwriter. The Underwriter further
agrees to act as agent for the Fund to receive and transmit promptly to the
Fund's transfer agent, shareholder and dealer requests for redemption of Shares.
3. Sales of Shares by the Fund. The Fund reserves the right To issue or
sell any Shares directly to the public at any time.
4. Basis of Sale of Shares. Underwriter does not agree to sell
any specific number of Shares. Underwriter, as agent for the Fund, undertakes to
sell Shares on a best effort basis only against orders therefor.
5. Compliance with NASD and Government Rules.
(a) Underwriter will conform to the Rules of Fair Practice
of the NASD and the securities laws of any jurisdiction in which it sells,
(b) Underwriter agrees to furnish to the Trust sufficient
copies of any Agreements, plans or other materials it intends to use in
connection with sales of Shares in adequate time for the Fund to file and clear
them with the proper authorities before they are put in use, and not to use them
until so filed and cleared.
(c) Underwriter may enter into selected dealer agreement with
registered and qualified dealers and other financial institutions of its choice
for the sale of Shares (the "Selected Dealers"), provided that the Fund shall
approve the form of such agreements and provided further that, in entering into
any such agreement. Shares sold to Selected Dealers by the Distributor shall be
for resale by such dealers only at the prices as set forth herein. With respect
to Shares sold by any Selected Dealer, the Distributor is authorized to direct
the Transfer Agent to receive instructions directly from the Selected Dealer on
behalf of the Distributor as to the registration of Shares in the names of
investors and to confirm the issuance of such Shares to such investors. The
Distributor is also authorized to instruct the Transfer Agent to receive payment
directly from a Selected Dealer on behalf of the Distributor for the purchase
price of the Shares. In such event, the Transfer Agent will obtain from the
Selected Dealer and maintain a record of such registration and payments.
(d) Underwriter, at its own expense, will qualify as dealer or
broker, or Otherwise, under all applicable State or federal laws required in
order that Shares may be sold in such States as may be mutually agreed upon by
the parties, except for expenses described in Exhibit A hereto, which will be
paid by the Administrator. Underwriter shall pay its brokers or selected dealers
commissions on sales of Fund shares made by or through them, except that no
commission need be paid when the sale price does not include a per share load.
(e) Underwriter and selected dealer shall not make, or
permit any representative, broker or dealer to make, in connection with any sale
or solicitation of a sale of the Shares, any representations concerning the
Shares except those contained in the then current prospectus and statement of
additional information covering the Shares and in printed information approved
by the Fund as information supplemental to such prospectus and statement of
additional information. Copies of the then effective prospectus and statement of
additional information and any such printed supplemental information will be
supplied by the Fund to Underwriter in reasonable quantities upon request.
6. Records to be Supplied by Fund_. The Fund shall furnish to
Underwriter copies of all information, financial statements and other papers
which Underwriter may reasonably request for use in connection with the
distribution of the Shares
7. Expenses to be Borne by Fund_. The Fund will bear the following
expenses:
(a) preparation, setting in type, printing of sufficient
copies of the prospectus and statement of additional information for
distribution to shareholders, and the distribution to shareholders of the
prospectus and statement of additional information;
(b) preparation, printing and distribution of reports and
other communications to shareholders;
(c) registration of the Shares under the federal securities
law;
(d) qualification of the Shares for sale in the jurisdictions
designated by Underwriter;
(e) maintaining facilities for the issue and transfer of the
Shares;
(f) supplying information, prices and other data to be
furnished by the Fund under this Agreement; and
(g) any original issue taxes or transfer taxes applicable to
the sale or delivery of the Shares of certificates therefor.
8. Indemnification
(a) The Fund agrees to indemnify, defend and hold the
Underwriter, its officers, and directors, and any person who controls the
Underwriter within the meaning of Section 15 or 1933 Act (the "1933 Act") or
Section 20 of the Securities Exchange Act of 1934, as amended (the "1934 Act"),
free and harmless from and against any and all claims, demands or liabilities
and expenses (including the cost of investigating or defending such claims,
demands or liabilities and any counsel fees incurred in connection therewith)
which the Underwriter, its officers, directors or any such controlling persons
may incur under the 1933 Act, the 1934 Act, or under common law or otherwise,
arising out of or based upon any untrue statement of a material fact contained
in the Registration Statement or Prospectus or arising out of or based upon any
alleged omission to state a material fact required to be stated in either
thereof or necessary to make the statements in either thereof not misleading,
except insofar as such claims, demands, liabilities or expenses arise out of or
are based upon any such untrue statement or omission or alleged untrue statement
or omission made in reliance upon and in conformity with information furnished
in writing by the Underwriter to the Fund for use in the Registration Statement.
The Underwriter agrees to comply with all of the applicable terms and provisions
of the 0000 Xxx.
(b) The Underwriter agrees to indemnify, defend, and hold the
Fund, its officers, trustees, employees shareholders and agents, and any person
who controls the Fund within the meaning of Section 15 of the 1933 Act of
Section 20 of the 1934 Act, free and harmless from and against any and all
claims, demands, liabilities and expenses (including the cost of investigating
or defending against such claims, demands or liabilities and any counsel fees
incurred in connection therewith) which the Fund, its trustees, officers,
employees, shareholders and agents, or any such controlling person may incur
under the 1933 Act, the 1934 Act or under common law or otherwise arising out of
or based upon any untrue statement of a material fact contained in information
furnished in writing by the Underwriter to the Fund for use in the Registration
Statement, or arising out of or based upon any omission or alleged omission to
state a material fact in connection with such information required to be stated
in the Registration Statement necessary to make such information not misleading.
(c) A party seeking indemnification hereunder (the Indemnitee)
shall give prompt written notice to the party from whom indemnification is
sought ("Indemnitor") of a written assertion or claim of any threatened or
pending legal proceeding which may be subject to indemnity under this Section;
provided, however, that failure to notify the Indemnitor of such written
assertion or claim shall not relieve the indemnitor of any liability arising
from this Section. The Indemnitor shall be entitled, if it so elects, to assume
the defense of any suit brought to enforce a claim subject to this Agreement and
such defense shall be conducted by counsel chosen by the Indemnitor and
satisfactory to the Indemnitee; provided, however, that if the defendants
include both the Indemnitee and the Indemnitor, and the Indemnitee shall have
reasonably concluded that there may be one or more legal defenses available to
it which are different from or additional to those available to the Indemnitor
("conflict of interest"), the Indemnitor shall have the right to select separate
counsel to defend such claim on behalf of the Indemnitee. In the event that the
Indemnitor elects to assume the defense of any suit pursuant to the preceding
sentence and retains counsel satisfactory to the Indemnitee, the Indemnitee
shall bear the fees and expenses of additional counsel retained by it except for
reasonable investigation costs which shall be borne by the Indemnitor. If the
Indemnitor (i) does not elect to assume the defense of a claim, (ii) elects to
assume the defense of a claim but chooses counsel that is not satisfactory to
the Indemnitee or (iii) has no right to assume the defense of a claim because of
a conflict of interest, the Indemnitor shall advance or reimburse the
Indemnitee, at the election of the Indemnitee, reasonable fees and disbursements
of any counsel retained by Indemnitee, including reasonable investigation costs.
9. Termination and Amendment of this Agreement. This Agreement shall
automatically terminate, without the payment of any penalty, in the event of its
assignment. This Agreement may be amended only if such amendment is approved (i)
by Underwriter, (ii) either by action of the Board of Trustees of the Fund or at
a meeting of the Shareholders of the Fund by the affirmative vote of a majority
of the outstanding Shares, and (iii) by a majority of the Trustees of the Fund
who are not interested persons of the Trust or of Underwriter, by vote cast in
person at a meeting called for the purpose of voting on such approval. Either
the Fund or Underwriter may at any time terminate this Agreement on sixty (60)
days' written notice delivered or mailed by registered mail, postage prepaid, to
the other party.
10. Effective Period of This Agreement. This Agreement shall take
effect upon its execution and shall remain in full force and effect for a period
of two years from the date of its execution (unless terminated automatically as
set forth in paragraph 10 and from year to year thereafter), subject to annual
approval (i) by Underwriter, (ii) by the Board of Trustees of the Fund or a vote
of a majority of the outstanding Shares, and (iii) by a majority of the Trustees
of the Fund who are not interested persons of the Fund or of Underwriter, by
vote cast in person at a meeting called for the purpose of voting on such
approval.
11. Limitation of Fund's Liability. The Term "The Upright Growth Funds"
means and refers to the Fund from time to time serving under the Fund's
Declaration of Trust as the same may subsequently thereto have been, or
subsequently hereto be, amended. It is expressly agreed that the obligations of
the Fund hereunder shall not be binding upon any of the Trustees, Shareholders,
nominees, officers, agents or employees of the Fund, personally, but bind only
the trust property of the Fund, as provided in the Declaration of Trust of the
Upright Investments Trust. The execution and delivery of this Agreement have
been authorized by the Trustees and Shareholders of the Fund and signed by the
officers of the Fund, acting as such, and neither such authorization by such
Trustees and Shareholders nor such execution and delivery by such officers shall
be deemed to have been made by any of them individually or to impose any
liability on them personally, but shall bind only the trust property of the Fund
as provided in its Declaration of Trust. A copy of the Agreement and Declaration
of Trust of the Fund is on file with the SEC.
12. Successor Investment Company. Unless this Agreement has been
terminated in accordance with Paragraph 10, the terms and provisions of this
Agreement shall become automatically applicable to any investment company which
is a successor to the Fund as a result of a reorganization, recapitalization or
change of domicile.
13. Severability. In the event any provision of this Agreement is
determined to be void or unenforceable, such determination
shall not affect the remainder of this Agreement, which shall
continue to be in force.
14. Questions of Interpretation.
(a) This Agreement shall be governed by the laws of the State
of Ohio.
(b) Any question of interpretation of any term or provision of
this Agreement having a counterpart in or otherwise derived from a term or
provision of the Act shall be resolved by reference to such term or provision of
the Act and to interpretation thereof, if any, by the United States courts or in
the absence of any controlling decision of any such court, by rules, regulations
or orders of the Securities and Exchange Commission issued pursuant to said Act.
In addition, where the effect of a requirement of the Act, reflected in any
provision of this Agreement is revised by rule, regulation or order of the
Securities and Exchange Commission, such provision shall be deemed to
incorporate the effect of such rule, regulation or order.
15. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that for this purpose the
address of the Upright Growth Fund shall be 000 Xxxx Xx. Xxxxxxxx Xxx.,
Xxxxxxxxxx, XX 00000 and of the Underwriter shall be 0000 Xxxx Xxxxx Xxxxxx,
Xxxxx 0000, Xxxxxxxxx, Xxxx 00000.
16. Counterparts. This Agreement may be in one or more counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
17. Binding Effect. Each of the undersigned expressly warrants and
represents that he has the full power and authority to sign this Agreement on
behalf of the party indicated, and that his signature will operate to bind the
party indicated to the foregoing terms.
18. Force Majeure. If Underwriter shall be delayed in its performance
of services or prevented entirely or in part from performing services due to
causes or events beyond its control, including and without limitation, acts of
God, interruption of power or other utility, transportation or communication
services, acts of civil or military authority, sabotages, national emergencies,
explosion, flood, accident, earthquake or other catastrophe, fire, strike or
other labor problems, legal action, present or future law, governmental order,
rule or regulation, or shortages or suitable parts, materials, labor or
transportation, such delay or non-performance shall be excused and a reasonable
time for performance in connection with the Agreement shall be extended to
include the period of such delay or non-performance.
IN WITNESS WHEREOF, the Fund and Underwriter have each caused this
Agreement to be signed on its behalf, all as of the day and year first above
written.
ATTEST: Upright Growth Fund
/S/ Chaur Xxx Xxx By: /S/ Xxxxx Y.S. Chiueh
ATTEST: Maxus Securities Corp.
_________________________ By: /S/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
President
UNDERWRITING AGREEMENT
EXHIBIT A
The following is a list of the states in which Maxus Securities Corp.
will act as underwriter for Upright Growth Fund, and the amount of expenses that
Upright Financial Corp. ("Administrator") will pay on behalf of Maxus Securities
Corp.
State Expenses *
New Jersey
New York
In addition to the above fees an annual fee of $350 will be charged to write
checks to the various brokers selling the fund.
* The calculation of this expense is the state registration fee dividend by 2.
