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EXHIBIT 99-h.6
EXPENSE AGREEMENT
AGREEMENT made as of the 14th day of December, 2000 between LEND LEASE
REAL ESTATE INVESTMENTS, INC. a Delaware corporation ("REI"), and LEND LEASE
XXXXXXXX ROVERS S.A., a Belgian limited liability company ("Xxxxxxxx Rovers").
WHEREAS, Lend Lease Funds (the "Trust") is a Delaware 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 Lend
Lease European Real Estate Securities Fund (the "Fund") is a series of the
Trust;
WHEREAS, the Trust and REI have entered into an Advisory Agreement
("Management Agreement"), pursuant to which REI provides investment management
services to the Fund for compensation based on the value of the average daily
net assets of the Fund; and
WHEREAS, REI and Xxxxxxxx Rovers have entered into a Sub-Advisory
Agreement dated as of the date hereof (the "Sub-Advisory Agreement"), pursuant
to which Xxxxxxxx Rovers provides investment advisory services to the Fund for
compensation based on the value of the average daily net assets of the Fund; and
WHEREAS, the Trust, REI and Xxxxxxxx Rovers 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 normally be subject;
NOW THEREFORE, the parties hereto agree as follows:
1. EXPENSE LIMITATION; RECOUPMENT.
(a) To the extent that the ordinary operating expenses incurred by a
class of the Fund in any fiscal year, including but not limited to investment
management fees of REI, but excluding interest, taxes, brokerage commissions,
other investment-related costs, extraordinary expenses such as litigation, other
expenses not incurred in the ordinary course of such Fund's business, and
expenses of any counsel or other persons or services retained by the Trust's
trustees who are not "interested persons," as that term is defined in the 1940
Act, of REI or Xxxxxxxx Rovers ("Fund Operating Expenses"), exceed the Operating
Expense Limit, as defined below, such excess amount (the "Excess Amount") shall
be the liability of REI, but shall be subject to allocation as describe in
Section 2 below. The "Operating Expense Limit" in any fiscal year with respect
to each class of the Fund shall be as follows (based on a percentage of the
average daily net assets of such class of the Fund):
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Class Operating Expense Limit (in basis points)
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Class A Shares 165
Class K Shares 140
Class Y Shares 110
(b) To determine REI's obligation with respect to the Excess Amount,
each day the Fund Operating Expenses for each class of the Fund shall be
annualized. If the annualized Fund Operating Expenses for any day of a class of
the Fund exceed the Operating Expense Limit of for that class of the Fund, REI
shall remit to the appropriate class of the Fund an amount that, together with
the waived or reduced investment management fee, is 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 REI.
(c) If on any day during which the Management Agreement is in effect,
the estimated annualized Fund Operating Expenses of a class of the Fund for that
day are less than the Operating Expense Limit, REI shall be entitled to recoup
from the Fund the investment management fees waived or reduced and other
payments remitted by REI to such class of the Fund pursuant to Section 1 hereof
(the "Recoupment Amount") during any of the previous thirty-six (36) months, to
the extent that such class' annualized Operating Expenses plus the amount so
recouped equals, for such day, the Operating Expense Limit for such class,
provided that such amount paid to REI will in no event exceed the total
Recoupment Amount and will not include any amounts previously recouped.
(d) 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 (i) the amount of the investment management fees waived or reduced
and other payments remitted by REI to each class of the Fund with respect to the
previous fiscal year shall equal the Excess Amount; and (ii) the actual Fund
Operating Expenses of each class of each the Fund for the prior fiscal year
(including any recoupment payments hereunder with respect to such fiscal year)
do not exceed the Operating Expense Limit.
2. ALLOCATION BETWEEN REI AND XXXXXXXX ROVERS.
(a) For so long as the fee payable to Xxxxxxxx Rovers under the
Sub-Advisory Agreement is equal to 50% of the advisory fee payable to REI by the
Fund, Xxxxxxxx Rovers shall waive or reduce its sub-advisory fee and/or remit to
REI on such terms as REI may specify from time to time an amount that is
sufficient to pay 50% of any Excess Amount paid to the Fund by REI pursuant to
Section 1 of this Agreement, provided that Xxxxxxxx Rovers's obligation to waive
or reduce its sub-advisory fee and to pay 50% of the Excess Amount shall not in
any year exceed $250,000 (the "Annual Cap"). REI may offset amounts owed to REI
pursuant to this Section 2(a) against the sub-advisory fee paid to Xxxxxxxx
Rovers.
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(b) REI shall promptly remit to Xxxxxxxx Rovers 50% of any amount
recouped by REI pursuant to Section 1(c) of this Agreement, provided, however,
that if at any time the Annual Cap has been in effect for any year, the
obligation of REI to remit recouped amounts with respect to such year shall
cease when recoupments paid to Xxxxxxxx Rovers with respect to such year are
equal to the Annual Cap, using a "first-in, first-out" system. REI may offset
amounts owed to Xxxxxxxx Rovers pursuant to this Section 2(b) against amounts
owed to REI by Xxxxxxxx Rovers pursuant to Section 2(a).
(c) The Trust and REI will provide Xxxxxxxx Rovers with reasonable
access to the books and records of each for purposes of confirming the amounts
contributed and recouped under this Agreement.
3. TERM OF AGREEMENT. This Agreement shall have an initial term through
the initial term of the Management Agreement. After such initial term, this
Agreement shall automatically renew for one-year terms unless (a) REI provides
notice to the Trust and Xxxxxxxx Rovers of its termination at least thirty days
prior to the end of the then current term, (b) Xxxxxxxx Rovers provides notice
to the Trust and REI of its termination at least thirty days prior to the end of
the then current term; provided, however, that this Agreement shall terminate
automatically upon termination of the Management Agreement and Section 2 shall
terminate automatically upon termination of the Sub-Advisory Agreement. In
addition, the Trust may terminate this Agreement without penalty upon ninety
days notice to REI and Xxxxxxxx Rovers.
4. MISCELLANEOUS.
(a) Notices. All notices or other communications given under
this Agreement shall be made by guaranteed overnight delivery, telecopy or
certified mail; notice is effective when received. Notice shall be given to the
parties at the following addresses:
REI: Lend Lease Real Estate Investments, Inc.
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxxxx, XX 00000-0000
Attention: Contract Compliance Officer
Xxxxxxxx Rovers: Lend Lease Xxxxxxxx Rovers X.X.
Xxxxxxxx Xx Xx Xxxxx 000
0000 Xxxxxxxx Xxxxxxx
Attention: W. Xxxxxx Xxxxxxxx
Trust: Lend Lease Funds
000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx X
Xxxxxxxxx, XX 00000
Attention: President
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(b) Severability. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise, the
remainder shall not be thereby affected.
(c) Applicable Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of Delaware.
(d) Counterparties. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
(e) Entire Agreement. This Agreement states the entire
agreement of the parties hereto, and is intended to be the complete and
exclusive statement of the terms hereof. It may not be added to or changed
orally, and may not be modified or rescinded except by a writing signed by the
parties hereto and in accordance with the Investment Company Act of 1940, as
amended, when applicable.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first set forth above.
LEND LEASE REAL ESTATE
INVESTMENTS, INC.
By: /s/ Xxx Xxxxx-Xxxxxxx
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LEND LEASE XXXXXXXX ROVERS S.A.
By: /s/ W. Xxxxxx Xxxxxxxx
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Acknowledged:
LEND LEASE FUNDS, on behalf of its series
LEND LEASE EUROPEAN REAL ESTATE
SECURITIES FUND
By: /s/ M.A. Xxxxxx
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