DISTRIBUTION AGREEMENT
DISTRIBUTION
AGREEMENT
This
Agreement, made as of August 1, 2005 by and between TrendStar Investment Trust,
a Delaware business trust (the "Fund"), TrendStar Advisors, LLC, a Delaware
limited liability company (“TrendStar”), and Unified Financial Securities, Inc.,
an Indiana corporation (the "Distributor").
WHEREAS,
the
Distributor is a broker-dealer registered with the Securities and Exchange
Commission (the “Commission”) and a member of the National Association of
Securities Dealers, Inc. (the "NASD"); and
WHEREAS,
the
Fund is registered as an open-end management investment company under the
Investment Company Act of 1940, as amended (the "Act"); and
WHEREAS,
the
Fund currently offers shares of the Fund (the “Shares”) in one or more separate
series ( each a “Portfolio” and together the “Portfolios”), and
WHEREAS,
TrendStar is an investment advisory firm registered as such with the Commission
; and
WHEREAS,
TrendStar provides certain investment advisory and administrative services
to
the Fund under separate written agreements for each such service;
and
WHEREAS,
pursuant to its agreement with the Fund to provide certain administrative
services, TrendStar may from time to time engage third parties to provide
certain of those services to the Fund in the capacity of a sub-contractor,
so
long as such engagement is expressly approved by the Board of Trustees of the
Fund; and
WHEREAS,
TrendStar wishes to retain Distributor to provide statutory principal
underwriting services to the Fund, all as more specifically described in this
Agreement, and Unified is willing to furnish such services; and
WHEREAS,
the
Board of Trustees of the Fund has approved such engagement and has consented
to
allow the Fund be a party this Agreement for the limited purposes set forth
in
this Agreement.
NOW,
THEREFORE,
in
consideration of the promises and agreements of the parties contained herein,
the parties agree as follows:
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1.
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Appointment.
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TrendStar,
with the express consent of the Fund's Board of Trustees, hereby engages the
Distributor as the Fund's exclusive agent for the distribution of the Shares,
and the Distributor hereby accepts such appointment under the terms of this
Agreement. While this Agreement is in force, the Fund shall not sell any Shares
except on the terms set forth in this Agreement. Notwithstanding any other
provision hereof, the Fund may terminate, suspend or withdraw the offering
of
Shares whenever, in its sole discretion, it deems such action to be
desirable.
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2.
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Sale
and Repurchase of Shares.
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(a)
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The
Distributor will have the right, as agent for the Fund, to enter
into
dealer agreements with responsible investment dealers, and to sell
Shares
to such investment dealers against orders therefor at the public
offering
price (as defined in subparagraph 2(d) hereof) stated in the Fund's
effective Registration Statement on Form N-1A under the Act and the
Securities Act of 1933, as amended, including the then current prospectus
and statement of additional information (the "Registration Statement").
Upon receipt of an order to purchase Shares from a dealer with whom
the
Distributor has a dealer agreement, the Distributor will promptly
cause
such order to be filled by the
Fund.
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(b)
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The
Distributor will also have the right, as agent for the Fund, to sell
such
Shares to the public against orders therefor at the public offering
price.
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(c)
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The
Distributor will also have the right to take, as agent for the Fund,
all
actions which, in the Distributor's reasonable judgment, are necessary
to
carry into effect the distribution of the
Shares.
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(d)
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The
public offering price for the Shares of each Portfolio shall be
the
respective net asset value of the Shares of that Portfolio then
in effect,
plus any applicable sales charge determined in the manner set forth
in the
Registration Statement or as permitted by the Act and the rules
and
regulations of the Commission promulgated thereunder. In no event
shall
any applicable sales charge exceed the maximum sales charge permitted
by
the Rules of the NASD.
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(e)
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The
net asset value of the Shares of each Portfolio 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 Portfolio
shall be
calculated by TrendStar or its authorized designee on behalf of
the Fund.
The UnderwriterDistributor
shall have no duty to inquire into or liability for the accuracy
of the
net asset value per Share as
calculated.
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(f)
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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 the UnderwriterDistributor
shall have received an order for the purchase of the
Shares.
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(g)
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Upon
receipt of purchase instructions, the UnderwriterDistributor
will transmit such instructions to the Fund or its authorized transfer
agent for registration of the Shares
purchased.
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(h)
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Nothing
in this Agreement shall prevent the UnderwriterDistributor
or
any affiliated person (as defined in the Act) of the UnderwriterDistributor
from acting as the underwriterDistributor
or
distributor for any other person, firm or corporation (including
other
investment companies) or in any way limit or restrict the UnderwriterDistributor
or
any such affiliated person from buying, selling or trading any
securities
for its or their own account or for the accounts of others from
whom it or
they may be acting; provided, however, that the UnderwriterDistributor
expressly represents that it will undertake no activities which,
in its
reasonable judgment, will adversely affect the performance of its
obligations to TrendStar or the Fund under this
Agreement.
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(i)
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The
UnderwriterDistributor,
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.
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3.
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Sale
of Shares by the Fund.
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The
Fund
reserves the right to issue any Shares at any time directly to the holders
of
Shares ("Shareholders"), to sell Shares to its Shareholders or to other persons
at not less than net asset value and to issue Shares in exchange for
substantially all the assets of any corporation or trust or for the shares
of
any corporation or trust.
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4.
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Basis
of Sale of Shares.
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The
UnderwriterDistributor
does not
agree to sell any specific number of Shares. The UnderwriterDistributor,
as
agent for the Fund, undertakes to sell Shares on a best efforts basis only
against orders therefor.
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5.
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Rules
of NASD, etc.
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(a)
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The
UnderwriterDistributor
will conform its activities to the Rules of the NASD and the securities
laws of the Commission and any jurisdiction in which it sells,
directly or
indirectly, any Shares.
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(b)
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The
UnderwriterDistributor
will require each dealer with whom the UnderwriterDistributor
has a dealer agreement to conform to the applicable provisions
hereof and
the Registration Statement with respect to the public offering
price of
the Shares, and neither the UnderwriterDistributor
nor any such dealers shall withhold the placing of purchase orders
so as
to make a profit thereby.
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(c)
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The
UnderwriterDistributor
agrees to furnish to TrendStar and the Fund sufficient copies of
any
agreements, plans or other materials it intends to use in connection
with
any sales of Shares in reasonably adequate time for the Distributor,
on
behalf of 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.
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| (d) |
The
UnderwriterDistributor,
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.
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| (e) |
The
UnderwriterDistributor
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 TrendStar to the UnderwriterDistributor
in
reasonable quantities upon request.
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6.
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Records
to be Supplied by
TrendStar.
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TrendStar,
on behalf of the Fund, shall furnish to the UnderwriterDistributor
copies
of all information, financial statements and other papers which the UnderwriterDistributor
may
reasonably request for use in connection with the distribution of the Shares,
and this shall include, but shall not be limited to, one certified copy,
upon
request by the UnderwriterDistributor,
of all
financial statements prepared for the Fund by independent public
accountants.
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7.
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Fees
and Expenses.
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| (a) |
The
Fund will not bear any costs or expenses incurred with respect to
distribution of shares except to the extent the Fund is permitted
to do so
by applicable law.
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| (b) |
The
Distributor may from time to time employ or associate with such person
or
persons as may be appropriate to assist the Distributor in the performance
of this Agreement. Such person or persons may be officers and employees
who are employed or designated as officers by both the Distributor,
TrendStar and the Fund. The Distributor shall pay the compensation
of such
person or persons for such employment and no obligation will be incurred
by or on behalf of the Fund in such
respect.
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8.
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Indemnification
of TrendStar and the
Fund.
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The
UnderwriterDistributor
agrees
to indemnify and hold harmless TrendStar and the Fund and each person who
has
been, is, or may hereafter be a trustee, director, officer, employee,
shareholder or control person of such entities against any loss, damage or
expense (including the reasonable costs of investigation) reasonably incurred
by
any of them in connection with any claim or in connection with any action,
suit
or proceeding to which any of them may be a party, which arises out of or
is
alleged to arise out of or is based upon any untrue statement or alleged
untrue
statement of a material fact, or the omission or alleged omission to state
a
material fact necessary to make the statements not misleading, on the part
of
the UnderwriterDistributor
or any
agent or employee of the UnderwriterDistributor
or any
other person for whose acts the UnderwriterDistributor
is
responsible, unless such statement or omission was made in reliance upon
written
information furnished by TrendStar or the Fund. The UnderwriterDistributor
likewise
agrees to indemnify and hold harmless TrendStar and the Fund and each such
person in connection with any claim or in connection with any action, suit
or
proceeding which arises out of or is alleged to arise out of the UnderwriterDistributor's
failure to exercise reasonable care and diligence with respect to its services,
if any, rendered in connection with investment, reinvestment, automatic
withdrawal and other plans for Shares. The term "expenses" for purposes of
this
and the next paragraph includes amounts paid in satisfaction of judgments
or in
settlements which are made with the UnderwriterDistributor's
consent. The foregoing rights of indemnification shall be in addition to
any
other rights to which TrendStar or the Fund or each such person may be entitled
as a matter of law.
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9.
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Indemnification
of the UnderwriterDistributor.
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TrendStar
and the Fund each agrees to indemnify and hold harmless the UnderwriterDistributor
and each
person who has been, is, or may hereafter be a director, officer, employee,
shareholder or control person of the UnderwriterDistributor
against
any loss, damage or expense (including the reasonable costs of investigation)
reasonably incurred by any of them in connection with the matters to which
this
Agreement relates, except a loss resulting from willful misfeasance, bad
faith
or negligence, including clerical errors and mechanical failures, on the
part of
any of such persons in the performance of the UnderwriterDistributor's
duties
or from the reckless disregard by any of such persons of the
UnderwriterDistributor's
obligations and duties under this Agreement, for all of which exceptions
the
UnderwriterDistributor
shall be
liable to the Fund.
In
order
that the indemnification provisions contained in this Paragraph 9 shall
apply,
it is understood that if in any case TrendStar or the Fund may be asked
to
indemnify the UnderwriterDistributor
or any
other person or hold the UnderwriterDistributor
or any
other person harmless, TrendStar or the Fund, as applicable, shall be fully
and
promptly advised of all pertinent facts concerning the situation in question,
and it is further understood that the UnderwriterDistributor
will use
all reasonable care to identify and notify TrendStar or the Fund, as applicable,
promptly concerning any situation which presents or appears likely to present
the probability of such a claim for indemnification against TrendStar or
the
Fund, as applicable. The Fund and TrendStar shall each have the option
to defend
the UnderwriterDistributor
and any
such person against any claim which may be the subject of this indemnification,
and in the event that either party so elects, it will so notify the UnderwriterDistributor,
and
thereupon TrendStar or the Fund, as applicable, shall take over complete
defense
of the claim, and neither the UnderwriterDistributor
nor any
such person shall in such situation initiate further legal or other expenses
for
which it shall seek indemnification under this Paragraph 9. The UnderwriterDistributor
shall in
no case confess any claim or make any compromise in any case in which TrendStar
or the Fund, as applicable, will be asked to indemnify the UnderwriterDistributor
or any
such person except with the Fund's written consent.
Notwithstanding
any other provision of this Agreement, the UnderwriterDistributor
shall be
entitled to receive and act upon advice of counsel (who may be counsel
for the
Fund or its own counsel) and shall be without liability for any action
reasonably taken or thing reasonably done pursuant to such advice, provided
that
such action is not in violation of applicable federal or state laws or
regulations.
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10.
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Termination
and Amendment of this
Agreement.
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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 the UnderwriterDistributor,
(ii) by
action of TrendStar with the affirmative consent of the Board of Trustees
of the
Fund, (iii) at a meeting of the Shareholders of the Fund by the affirmative
vote
of a majority of the outstanding Shares, and (iv) by a majority of the
Trustees
of the Fund who are not interested persons of the Fund or of the UnderwriterDistributor
by vote
cast in person at a meeting called for the purpose of voting on such
approval.
Either
of
TrendStar, the Fund or the UnderwriterDistributor
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.
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11.
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Effective
Period of this
Agreement.
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This
Agreement shall take effect on the date referenced above, and shall remain
in
full force and effect until September 30, 2006 (unless terminated automatically
as set forth in Paragraph 10), and from year to year thereafter, subject
to
annual approval (i) by the UnderwriterDistributor,
(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 the UnderwriterDistributor
by vote
cast in person at a meeting called for the purpose of voting on such
approval.
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12.
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New
Portfolios.
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The
terms
and provisions of this Agreement shall become automatically applicable
to any
additional Portfolios of the Fund established during the initial or renewal
term
of this Agreement.
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13.
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Successor
Investment
Fund.
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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
reorganization, recapitalization or change of domicile.
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14.
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Limitation
of Liability.
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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. The
execution and delivery of this Agreement have been authorized by TrendStar
and
the Trustees of the Fund and signed by an officer of TrendStar and the Fund,
acting as such, and neither such authorization by such Trustees nor such
execution and delivery by such officer 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 Fund.
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15.
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Severability.
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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.
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16.
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Questions
of Interpretation.
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(a)
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This
Agreement shall be governed by the laws of the State of
Indiana.
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(b)
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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.
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17.
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Notices.
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Any
notices under this Agreement shall be in writing, addressed and delivered
or
mailed postage paid to the other party, with a copy to the Fund’s counsel, at
such address as such other party may designate for the receipt of such notice.
Such notice will be effective upon receipt. Until further notice to the other
party, it is agreed that the address of each party for this purpose shall
be:
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(a)
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If
to TrendStar or the Fund, to:
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0000
Xxxxxxx Xxxx., Xxxxx 000
Xxxxxxxx
Xxxx, XX 00000
Attn:
President
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(b)
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If
to the Distributor, to:
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Unified
Financial Securities, Inc.
000
Xxxxx Xxxxxxxxxxxx Xxxxxx
Xxxxxxxxxxxx,
XX 00000
Attn:
President
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18.
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Execution
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This
Agreement may be executed by one or more counterparts, each of which shall
be
deemed an original, but all of which together will constitute one in the
same
instrument.
IN
WITNESS WHEREOF, TrendStar, the Fund and the UnderwriterDistributor
have
each caused this Agreement to be signed in duplicate on their behalf, all
as of
the day and year first above written.
| TRENDSTAR ADVISORS, LLC | ||||||
| By: | Date | |||||
| Print Name: | ||||||
| Title: | ||||||
| TRENDSTAR INVESTMENT TRUST | ||||||
| By: | Date | |||||
| Print Name: | ||||||
| Title: | ||||||
| UNIFIED FINANCIAL SECURITIES, INC. | ||||||
| By: | Date | |||||
| Print Name: | ||||||
| Title: | ||||||
