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Exhibit 23H(3)-
Expense Recapture
Agreement
THIS
AGREEMENT is entered into as of this 29th day of September, 2003 by and
between TrendStar Investment Trust and TrendStar Advisors, LLC, each with its principal
place of business at 0000 Xxxxxxx Xxxx., Xxxxx 000, Xxxxxxxx Xxxx, XX 00000.
WHEREAS,
TrendStar Investment Trust (the "Trust") is a statutory business trust
organized under the laws of the state of Delaware and registered with the Securities
and Exchange Commission (the "Commission") as an open-end management
investment company of the series type under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS,
the Trust is authorized to offer an indefinite number of series of shares (each a "Fund" and
together the "Funds") and to further divide such Funds into various classes;
and
WHEREAS,
the Trust currently offers the Funds and share classes thereof listed on Schedule 1 to
this Agreement, as such schedule may be amended from time to time by agreement of the
parties; and
WHEREAS,
TrendStar Advisors, LLC (the "Advisor") is a limited liability company
organized under the laws of the state of Delaware and is registered with the Commission
as an investment adviser under the Investment Advisers Act of 1940, as amended (the
"Advisers Act"); and
WHEREAS,
the Advisor serves as investment advisor to each Fund listed on Schedule 1 to this
Agreement pursuant to a written agreement for such services; and
WHEREAS,
the Advisor has paid certain organizational expenses of the Trust in order to organize
the Trust and effect the registration of the Trust and its shares with the Commission;
and
WHEREAS,
the Advisor has voluntarily agreed that from time to time it may waive some or all of
its investment advisory fees and/or reimburse the Fund(s) for certain ongoing expenses
in order to assist the Funds to maintain targeted overall expense ratios; and
WHEREAS,
the Trust and Advisor desire to enter into an agreement whereby the Advisor may be
afforded the opportunity to recover in future periods organizational expenses, waived
fees and/or reimbursed expenses paid or foregone by the Advisor on behalf of one or more
Funds.
NOW
THEREFORE, the parties to this Agreement, for good and adequate consideration, the
receipt and sufficiency of which is acknowledged by each, and intending to be legally
bound thereby, agree as follows:
Any action taken by the Advisor to waive any
portion of its investment advisory fee with respect to one or
more Funds, or to pay or reimburse certain expenses of one or
more Funds, at any time now or in the future, shall be at the
sole discretion of the Advisor, and nothing contained in this
Agreement is intended or shall be construed as imposing any
contractual requirement upon the Advisor to engage in such
waivers and/or reimbursements. Under no circumstance shall the Advisor
reimburse any Fund for brokerage fees and commissions, interest
and other borrowing expenses, taxes and extraordinary expenses
incurred by the Fund. Whenever the Advisor waives a portion of its
investment advisory fee and/or reimburses or pays an expense of
one or more Funds (hereinafter referred to as an "Expense
Support") during a month, the Advisor will keep a record of
such Expense Support and shall report the same to the
Trust’s Fund Accounting Agent. The Fund Accounting Agent
will maintain separate records of such Expense Reports. For a
period of thirty-six (36) months, beginning on the first day of
the month following the month in which the Expense Support
occurred, the Advisor may seek to recover such Expense Support by
giving written notice to the Fund Accounting Agent. The Fund
Accounting Agent shall perform a calculation to determine the
extent of the impact on the applicable Fund(s) expenses ratio of
honoring the recovery request. If the Fund Accounting Agent
determines that honoring the request will not cause the
applicable Fund’s calculated Total Annual Operating Expense
ratio to exceed 1.40%, then it shall make payment to the Advisor
and make appropriate accounting entries into the books and
records of the applicable Fund(s). It is agreed and understood by the parties that
the Advisor has paid all organizational expenses of the Trust up
to and including the date of this Agreement. The Advisor has
maintained records of such expenditures, which shall be reported
to the Trust’s Fund Accounting Agent. The Fund Accounting
Agent will maintain separate records of such Expense Reports. For
a period of twelve (12) months, beginning on the first day of the
month in which the Trust is declared effective by the Securities
and Exchange Commission, the Advisor may seek to recover such
organizational expenses by giving written notice to the Fund
Accounting Agent. The Fund Accounting Agent shall perform a
calculation to determine the extent of the impact on the
applicable Fund(s) expenses ratio of honoring the recovery
request. If the Fund Accounting Agent determines that honoring
the request will not cause the applicable Fund’s calculated
Total Annual Operating Expense ratio to exceed 1.40%, then it
shall make payment to the Advisor an d make appropriate
accounting entries into the books and records of the applicable
Fund(s). Expenses not recovered by the Advisor pursuant
to Paragraphs 3 or 4 above within the time frames set forth
therein shall be forfeit and uncollectable by the Advisor. This Agreement may be terminated at any time
upon thirty days written notice by any party delivered to the
other, and may be terminated at any time by affirmative vote of a
majority of the "Independent" Trustees of the Trust,
upon a finding that continue such Agreement would not be in the
best interests of the Trust’s shareholders. No provision of this Agreement may be changed,
waived, discharged, or terminated orally, but only by a written
instrument signed by the party against which enforcement of the
change, waiver, discharge or termination is sought. No material
amendment of this Agreement shall be effective until approved by
vote of the holders of a majority of the Fund’s outstanding
voting securities (as defined in the 1940 Act). The captions in this Agreement are included for
convenience of reference only and in no way define or limit any
of the provisions hereof or otherwise affect their construction
or effect. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the
remainder of the Agreement shall not be affected thereby. This
Agreement shall be binding on, and shall inure to the benefit of,
the parties hereto and their respective successors. This Agreement may be executed in counterparts
by the parties hereto, each of which shall constitute an
original, and all of which, together, shall constitute one
Agreement. This Agreement shall be construed in accordance
with, and governed by, the laws of the State of Kansas, without
regard to such jurisdiction’s conflict-of-law statutes. Except as otherwise provided in this Agreement,
any notice or other communication required by or permitted to be
given in connection with this Agreement will be in writing and
will be delivered in person or sent by first class mail, postage
prepaid or by prepaid overnight delivery service to the
respective parties as follows:
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