Exhibit (h)(3)
EXPENSE WAIVER & REIMBURSEMENT AGREEMENT
As Amended on August 11, 2004
THIS AGREEMENT is entered into as of the 11h day of August, 2004 by and
between Ashport Mutual Funds and StateTrust Capital, LLC (together the
"Parties"). This Agreement replaces in its entirety the written agreement
entitled "Expense Waiver and Reimbursement Agreement", previously entered into
by and between the Parties on or about December 12, 2001.
WHEREAS, Ashport Mutual Funds (the "Trust") is a statutory business trust
organized under the laws of the state of Massachusetts and is 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, StateTrust Capital, 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 also provides, or arranges for the provision of,
certain other administrative services to each Fund listed on Schedule 1 to this
Agreement pursuant to a written agreement for such services; and
WHEREAS, the Advisor has agreed that from time to time it may waive some
or all of its investment advisory and/or management fees and/or reimburse the
Fund(s) for certain ongoing expenses in order to assist the Fund(s) to maintain
the overall total annual operating expense ratios for each Fund as set forth on
Schedule 1 to this Agreement. The expense ratios set forth in Schedule 1 may be
amended from time to time by agreement of the Parties; 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 any
such waived fees and/or reimbursed expenses paid or foregone by the Advisor on
behalf of one or more Funds.
NOW THEREFORE, the Parties, 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:
1. The Advisor agrees to reduce all or a portion of it's management fee
and, if necessary, to reimburse or pay directly certain other
expenses (to the extent permitted by the Internal Revenue Code of
1986, as amended) associated with operating the Funds to the extent
necessary to enable each Fund to maintain the annualized total
operating expense ratios for each Fund as set forth on Schedule 1 to
this Agreement.
2. Under no circumstance shall the Advisor reimburse Fund(s) for
brokerage fees and commissions, interest and other borrowing
expenses, taxes, legal expenses incurred as a result of actions
against the Fund(s), and/or extraordinary expenses incurred by the
Fund(s).
3. 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
Support. 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) 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 the maximum level as
set forth on Schedule 1 to this Agreement, then it shall make
payment to the Advisor and make appropriate accounting entries into
the books and records of the applicable Fund(s). The fund accounting
agent shall keep records of Expense Support claims paid to the
Advisor and shall present a written report of any such payments to
the Board for its review each quarter.
4. Expenses not recovered by the Advisor pursuant to Paragraph 3 above
within the time frames set forth therein shall be forfeit and
uncollectable by the Advisor.
5. This Agreement shall become effective as of the date first written
above and shall continue in full force and effect until November 30,
2004. Thereafter, this Agreement shall automatically renew for
successive one year periods until terminated by either Party. Either
Party may terminate this Agreement by giving written notice to the
other party not more than ninety (90) or fewer than thirty (30) days
prior to November 30 of any year in which this Agreement remains in
effect.
The Advisor may petition the Board to terminate this Agreement at
any time, and the Board may grant such petition by affirmative vote
of a majority of the "Independent" Trustees of the Trust. The Trust
may terminate this Agreement at any time by affirmative vote of a
majority of the "Independent" Trustees of the Trust or by
affirmative vote of a majority of the outstanding voting securities
of the Trust, as such term is defined in the 1940 Act.
6. 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. This Agreement may not be assigned, in whole
or in part, by either Party. This Agreement shall immediately
terminate in the event of any assignment or attempted assignment.
7. 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.
8. 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.
9. This Agreement shall be construed in accordance with, and governed
by, the laws of the State of Florida, without regard to such
jurisdiction's conflict-of-law statutes, and by the 1940 Act. In the
event that the laws of Florida conflict with those of the 1940, the
1940 Act shall prevail.
10. 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:
If to the Trust: If to the Adviser:
Ashport Mutual Funds StateTrust Capital, LLC
000 Xxxxxxxx Xxxxxx 000 Xxxxxxxx Xxxxxx
Xxxxx, XX Xxxxx, XX
Xxxxx Vurgait Xxxxxxx Xxxxxx
President President
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
ASHPORT MUTUAL FUNDS
By: /s/Xxxxx Vurgait
Xxxxx Vurgait
Title: President
STATETRUST CAPITAL, LLC
By: /s/Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxx
Title: Chief Operating Officer
Schedule 1
Ashport Mutual Funds
As of August 11, 2004
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Total Expense Ratio Cap,
Name of Fund Share Classes Offered Each Share Class
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Class A 3.00%
Large Cap Fund Class C 3.75%
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Class A 3.00%
Mid-Small Cap Fund Class C 3.75%
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Class A 3.00%
Global Fixed Income Fund Class C 3.75%
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