Exhibit (d) (5)
EXPENSE LIMITATION AGREEMENT
EXPENSE LIMITATION AGREEMENT, effective as of May 7, 1999 by and between
Xxxxx Xxxxxx Management Company, an Illinois corporation (the "Adviser") and
Xxxxx Xxxxxx Investment Trust (the "Trust"), on behalf of the Xxxxx Xxxxxx
CorePortfolio Fund series of the Trust (the "Fund").
WHEREAS, the Trust is a Massachusetts business trust, and is registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), as an
open-end management company of the series type, and the Fund is a series of the
Trust; and
WHEREAS, the Trust and the Adviser have entered into an Investment Advisory
and Management Agreement, most recently amended on May 7, 1999 ("Advisory
Agreement"), pursuant to which the Adviser provides investment management
services to the Fund for compensation based on the value of the average daily
net assets of the Fund; and
WHEREAS, the Trust and the Adviser have determined that it is appropriate
and in the best interests of the Fund and its shareholders to maintain the
expenses of the Fund at a level below the level to which the Fund may otherwise
be subject; and
WHEREAS, the Adviser has agreed to pay, on behalf of the Trust, the
organizational expenses of the Fund up to the amount of Fifteen Thousand Dollars
($15,000) ("Organizational Expenses"), which expenses the Trust has agreed to
repay to the Adviser so long as such repayment does not unduly increase the
expenses of the Fund;
NOW THEREFORE, the parties hereto agree as follows:
1. EXPENSE LIMITATION.
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1.1 Applicable Expense Limit. To the extent that the ordinary operating
expenses incurred by the Fund in any fiscal year, including but not limited to
investment advisory fees of the Adviser, but excluding interest, taxes,
brokerage commissions, other investment-related costs and extraordinary
expenses, such as litigation and other expenses not incurred in the ordinary
course of the Fund's business ("Fund Operating Expenses"), exceed the Operating
Expense Limit, as defined in Section 1.2 below, such excess amount (the "Excess
Amount") shall be the liability of the Adviser to the extent set forth in this
Agreement.
1.2 Operating Expense Limit. The Operating Expense Limit in any year with
respect to the Fund shall be 0.75% of the average daily net assets of the Fund.
1.3 Duration of Operating Expense Limit. The Operating Expense Limit with
respect to the Fund shall remain in effect during the term of this Agreement.
1.4 Method of Computation. To determine the Adviser's obligation with
respect to the Excess Amount, each day the Fund Operating Expenses for the Fund
shall be annualized. If the annualized Fund Operating Expenses for any day of
the Fund exceed the Operating Expense Limit of the Fund, the Adviser shall waive
or reduce its investment advisory fee, in an amount sufficient to pay that day's
Excess Amount. The Trust may offset amounts owed to the Fund pursuant to this
Agreement against the advisory fee payable to the Adviser. Furthermore, to the
extent that the Excess Amount exceeds such waived or reduced investment advisory
fees, the Adviser shall, if required pursuant to the securities laws or
regulations of any state in which the Fund's shares are qualified for sale, or
may, voluntarily, reimburse the Fund for any operating expenses.
1.5 Year-End Adjustment. If necessary, on or before the last day of the
first month of each fiscal year, an adjustment payment shall be made by the
appropriate party in order that the amount of the investment advisory fees
waived or reduced and other payments remitted by the Adviser to the Fund with
respect to the previous fiscal year shall equal the Excess Amount.
1.6 Organizational Expenses. The Adviser shall pay the Organizational
Expenses of the Fund, up to the amount of fifteen thousand dollars ($15,000).
2. REIMBURSEMENT OF FEE WAIVERS AND EXPENSE REIMBURSEMENTS.
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2.1 Reimbursement. If on any day during which the Advisory Agreement is in
effect, the estimated annualized Fund Operating Expenses of the Fund for that
day are less than the Operating Expense Limit, the Adviser shall be entitled to
reimbursement by the Fund of the investment advisory fees waived or reduced, the
Organizational Expenses, and any other expense reimbursements or similar
payments remitted by the Adviser to the Fund pursuant to Section 1 hereof (the
"Reimbursement Amount") during any of the previous five (5) years, to the extent
that the Fund's annualized Operating Expenses plus the amount so reimbursed
equals, for such day, the Operating Expense Limit, provided that such amount
paid to the Adviser will in no event exceed the total Reimbursement Amount and
will not include any amounts previously reimbursed.
2.2 Year-End Adjustment. If necessary, on or before the last day of the
first month of each fiscal year, an adjustment payment shall be made by the
appropriate party in order that the actual Fund Operating Expenses of a Fund for
the prior fiscal year (including any reimbursement payments hereunder with
respect to such fiscal year) do not exceed the Operating Expense Limit.
3. TERM AND TERMINATION OF AGREEMENT.
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This Agreement may be terminated by the Trust or, after August 1, 2003, by
the Investment Manager, without payment of any penalty, upon sixty (60) days'
prior written notice to the Trust at its principal place of business. In any
event, the Agreement shall terminate upon the termination of the Advisory
Agreement. The obligation of the Adviser under Section 1.5 of this Agreement and
of the Trust under Section 2 of this Agreement shall survive the termination of
the Agreement solely as to expenses and obligations incurred prior to the date
of such termination.
4. MISCELLANEOUS.
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4.1 Captions. The captions in this Agreement are included for convenience
of reference only and in no other way define or delineate any of the provisions
hereof or otherwise affect their construction or effect.
4.2 Interpretation. Nothing herein contained shall be deemed to require
the Trust or the Funds to take any action contrary to the Trust's Declaration of
Trust or By-Laws, or any applicable statutory or regulatory requirement to which
it is subject or by which it is bound, or to relieve or deprive the Trust's
Board of Trustees of its responsibility for and control of the conduct of the
affairs of the Trust or the Fund.
4.3 Definitions. Any question of interpretation of any term or provision
of this Agreement, including but not limited to the investment advisory fee, the
computations of net asset values, and the allocation of expenses, having a
counterpart in or otherwise derived from the terms and provisions of the
Management Agreement or the 1940 Act, shall have the same meaning as and be
resolved by reference to such Management Agreement or the 1940 Act.
4.4 Amendments. This Agreement may be amended only by a written agreement
signed by each of the parties hereto.
4.5 Limitation of Liability. This Agreement is executed by or on behalf of
the Trust, and Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Agreement and Declaration of Trust, as
amended, of the Trust and agrees that the obligations assumed by the Trust
pursuant to this Agreement shall be limited in all cases to the Trust and its
assets, and Adviser shall not seek satisfaction of any such obligations from the
Trustees, Officers or shareholders of the Trust.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective officers thereunto duly authorized and their respective
corporate seals to be hereunto affixed, as of the day and year first above
written.
XXXXX XXXXXX INVESTMENT TRUST
ON BEHALF OF ITS
XXXXX XXXXXX COREPORTFOLIO FUND
By:
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Name:
Title:
XXXXX XXXXXX MANAGEMENT COMPANY
By:
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Name:
Title:
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