EXHIBIT 10.7
EXPENSE AGREEMENT
AGREEMENT dated as of April 30, 1999 by and between New England Zenith
Fund, a Massachusetts business trust (the "Trust"), and New England Investment
Management, Inc., a Massachusetts corporation (the "Adviser").
WHEREAS, the Adviser is the investment adviser of several series of shares
of beneficial interest (the "Series") of the Trust pursuant to separate advisory
agreements relating to each Series; and
WHEREAS, the Adviser was recently appointed the investment adviser of two
of these Series, which Series are newly-organized; and
WHEREAS, the Trust and the Adviser desire to enter into the arrangements
described herein relating to the payment of certain expenses of the Trust;
NOW, THEREFORE, the Trust and the Adviser hereby agree as follows:
1. Until further notice from the Adviser to the Trust, the Adviser will
waive such portion of the fees payable to it under the Advisory Agreement
relating to each Series listed in this Section 1, or pay such portion of the
other operating expenses (including amortization of organization expenses and
excluding any brokerage costs, interest, taxes or extraordinary expenses)
("Operating Expenses") incurred in the operation of each Series, as is necessary
to reduce the total Operating Expenses of each Series to the following annual
percentages of the average daily net assets of each Series:
Series Percentage
------ ----------
Xxxxx Equity Growth Series 0.90
Xxxxx Venture Value Series 0.90
Xxxxxxx Xxxxx Xxxxxx Value Series 0.90
Xxxxxx Xxxxxx Balanced Series 0.85
MFS Investors Series 0.90
MFS Research Managers Series 0.90
Xxxxxx Xxxxxxx International Magnum Equity Series 1.30
Salomon Brothers Strategic Bond Opportunities Series 0.85
Salomon Brothers U.S. Government Series 0.70
2. Each Series agrees to repay to the Adviser the amount of fees waived
and expenses borne by the Adviser with respect to such Series pursuant to
Section 1 of this Agreement, subject to the limitations provided in this Section
2. Such repayment shall be made monthly, but only if the Operating Expenses of
the Series in question, without regard to such repayment, are at an annual rate
(as a percentage of that Series's average daily net assets) based on that
Series' then-current fiscal year that is less than the percentage rate for such
Series set forth in Section 1. Furthermore, the amount repaid by a Series in
any month shall be limited so that the sum of (a) the amount of such repayment
and (b) the other Operating Expenses of the Series do not exceed the annual rate
(as a percentage of that Series's average daily net assets) for such Series set
forth in Section 1.
Amounts of fees waived and expenses borne by the Adviser with respect to a
Series pursuant to Section 1 during any fiscal year of such Series shall not be
repayable if the amounts repayable by such Series pursuant to the immediately
preceding two sentences during the period ending two years (three years in the
case of MFS Investors Series and MFS Research Managers Series) after the end of
such fiscal year are not sufficient to completely repay such amounts of fees
waived and expenses borne. In no event will any Series be obligated to repay
any fees waived or expenses borne by the Adviser with respect to any other
Series.
3. The Adviser may by notice in writing to the Trust terminate its
obligation under Section 1 to waive fees or bear expenses with respect to any
Series in any period following the date specified in such notice (or change the
percentage specified in Section 1 with respect to such Series), but no such
change shall affect the obligation (including the amount of the obligation) of
the Series to repay amounts of fees waived or expenses borne by the Adviser
during periods prior to the date specified in such notice.
4. A copy of the Agreement and Declaration of Trust establishing the
Trust is on file with the Secretary of The Commonwealth of Massachusetts, and
notice is hereby given that this Agreement is executed with respect to each
Series listed in Section 1 hereof on behalf of the Trust by officers of the
Trust as officers and not individually and that the obligations arising out of
this Agreement are not binding upon any of the trustees, officers or
shareholders of the Fund individually but are binding only upon the assets and
property of the Fund belonging to the respective Series.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
NEW ENGLAND ZENITH FUND
By: /s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
Senior Vice President
NEW ENGLAND INVESTMENT
MANAGEMENT, INC.
By: /s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
Senior Vice President
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