Re: Expense Limitation Letter Agreement and Voluntary Expense Limitation Notice
Xxxx Xxxxxxx Advisers, LLC
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
![(JOHN HANCOCK LOGO)](https://www.sec.gov/Archives/edgar/data/45291/000095012311017989/b84529a1b8452903.gif)
December 7, 2010
To the Trustees of
Xxxx Xxxxxxx Funds
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Xxxx Xxxxxxx Funds
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Re: | Expense Limitation Letter Agreement and Voluntary Expense Limitation Notice |
With reference to each of the Advisory Agreements entered into by and between Xxxx Xxxxxxx
Advisers, LLC (the “Adviser”) and each of the trusts listed in Appendix A to this letter
(each, a “Trust” and collectively, the “Trusts”), on behalf of each of their respective series
listed in Appendix A (each, a “Fund” and collectively, the “Funds”), we hereby notify you
as follows:
1. The Adviser agrees to contractually waive its advisory fees and, to the extent necessary,
reimburse other expenses of each Fund as set forth in Appendix B, Appendix C and
Appendix D hereto.
2. The Adviser agrees to voluntarily waive its advisory fees and, to the extent necessary,
reimburse other expenses of each Fund as set forth in Appendix E and Appendix F
hereto.
3. We understand and intend that the Trusts will rely on this undertaking in overseeing the
preparation and filing of Post-effective Amendments to the Registration Statement on Form N-1A for
the Trusts and the Funds with the Securities and Exchange Commission, in accruing each Fund’s
expenses for purposes of calculating its net and gross asset value per share, and for other
purposes permitted under Form N-1A and/or the Investment Company Act of 1940, as amended, and we
expressly permit the Trusts so to rely.
Very truly yours, XXXX XXXXXXX ADVISERS, LLC |
||||
By: | /s/ Xxxxxxx X. Xxxx | |||
Xxxxxxx X. Xxxx | ||||
Chief Financial Officer | ||||
Agreed and Accepted
on behalf of each applicable Trust listed in Appendix A
on behalf of each applicable Trust listed in Appendix A
By:
|
/s/ Xxxxxxx Xxxxx
Chief Financial Officer |
A copy of the document establishing each Trust is filed with the Secretary of The Commonwealth of
Massachusetts. This Agreement is executed by the officer not as an individual and is not binding
upon any of the Trustees, officers or shareholders of the Trusts individually but only upon the
assets of the Funds.
APPENDIX A
TRUSTS and Funds
TRUSTS and Funds
XXXX XXXXXXX XXXX TRUST
Government Income Fund
High Yield Fund
Investment Grade Bond Fund
Government Income Fund
High Yield Fund
Investment Grade Bond Fund
XXXX XXXXXXX CALIFORNIA TAX-FREE INCOME FUND
California Tax-Free Income Fund
California Tax-Free Income Fund
XXXX XXXXXXX CAPITAL SERIES
Classic Value Fund
U. S. Global Leaders Growth Fund
Classic Value Fund
U. S. Global Leaders Growth Fund
XXXX XXXXXXX CURRENT INTEREST
Money Market Fund
Money Market Fund
XXXX XXXXXXX INVESTMENT TRUST
Balanced Fund
Global Opportunities Fund
Large Cap Equity Fund
Small Cap Intrinsic Value Fund
Sovereign Investors Fund
Balanced Fund
Global Opportunities Fund
Large Cap Equity Fund
Small Cap Intrinsic Value Fund
Sovereign Investors Fund
XXXX XXXXXXX INVESTMENT TRUST II
Financial Industries Fund
Regional Bank Fund
Small Cap Equity Fund
Financial Industries Fund
Regional Bank Fund
Small Cap Equity Fund
XXXX XXXXXXX INVESTMENT TRUST III
Greater China Opportunities Fund
Greater China Opportunities Fund
XXXX XXXXXXX MUNICIPAL SECURITIES TRUST
High Yield Municipal Bond Fund
Tax-Free Bond Fund
High Yield Municipal Bond Fund
Tax-Free Bond Fund
XXXX XXXXXXX SERIES TRUST
Mid Cap Equity Fund
Mid Cap Equity Fund
XXXX XXXXXXX SOVEREIGN BOND FUND
Bond Fund
Bond Fund
XXXX XXXXXXX STRATEGIC SERIES
Strategic Income Fund
Strategic Income Fund
XXXX XXXXXXX TAX-EXEMPT SERIES FUND
Massachusetts Tax-Free Income Fund
New York Tax-Free Income Fund
Massachusetts Tax-Free Income Fund
New York Tax-Free Income Fund
X-0
XXXXXXXX X
Fund Level Contractual Expense Limitations
For purposes of this Appendix:
“Expenses” means all the expenses of a Fund excluding: (i) taxes; (ii) portfolio brokerage
commissions; (iii) interest; (iv) litigation and indemnification expenses and other extraordinary
expenses not incurred in the ordinary course of the Fund’s business; (v) acquired fund fee expenses
paid indirectly; (vi) short dividend expense; (vii) Rule 12b-1 fees; (viii) transfer agency fees;
and (ix) fees under any agreements or plans of the Fund dealing with services for shareholders and
others with beneficial interests in shares of the Trust.
“Expense Limit” means the percentage of a Fund’s average annual net assets (on an annualized basis)
set forth below.
The Adviser agrees to waive advisory fees and, to the extent necessary, reimburse other expenses of
the Fund, in an amount equal to the amount by which the Expenses of such Fund exceed the Expense
Limit for such Fund set forth in the table below.
The Expense Limit for each of the Funds indicated below for the purposes of this Appendix shall be
as follows:
Expiration Date of | ||||
Fund | Annual Expense Limit | Expense Limit | ||
None
|
B-1
APPENDIX C
Class Level Contractual Expense Limitations
For purposes of this Appendix:
“Expenses” means all the expenses of a class of shares of the Fund (including those expenses of the
Fund attributable to such class) but excluding: (i) taxes; (ii) portfolio brokerage commissions;
(iii) interest; (iv) litigation and indemnification expenses and other extraordinary expenses not
incurred in the ordinary course of the Fund’s business; (v) acquired fund fee expenses paid
indirectly; (vi) short dividend expense; and (vii) fees under any agreements or plans of the Fund
dealing with services for shareholders and others with beneficial interests in shares of the Fund.
“Expense Limit” means the percentage of average annual net assets (on an annualized basis)
attributable to a class of shares of the Fund set forth below.
The Adviser agrees to waive advisory fees and, to the extent necessary, reimburse expenses or make
payment to a specific class of shares of the Fund (up to the amount of the expenses relating solely
to such class of shares), in an amount equal to the amount by which the Expenses of such class of
shares exceed the Expense Limit for such class set forth in the table below.
The Expense Limit for the classes of shares of the Fund indicated below for the purposes of this
Appendix shall be as follows:
Expiration | ||||||||||||||||||||||||||||||||||||
Classes | Date of | |||||||||||||||||||||||||||||||||||
Fund | A | B | C | I | R1 | R3 | R4 | R5 | Expense Limit | |||||||||||||||||||||||||||
Balanced Fund |
N/A | N/A | N/A | N/A | 1.63 | % | 1.53 | % | 1.23 | % | 0.93 | % | 2/29/2012 | 1 | ||||||||||||||||||||||
Classic Value Fund |
1.33 | % | 2.08 | % | 2.08 | % | 0.94 | % | 1.83 | % | 1.73 | % | 1.43 | % | 1.13 | % | 2/29/2012 | 1 | ||||||||||||||||||
Financial
Industries Fund |
1.50 | % | 2.20 | % | 2.20 | % | 1.02 | % | X/X | X/X | X/X | X/X | 0/00/0000 | 0 | ||||||||||||||||||||||
Xxxxxxx Xxxxx
Opportunities Fund |
N/A | N/A | N/A | 1.53 | % | N/A | N/A | N/A | N/A | 2/29/2012 | 1 | |||||||||||||||||||||||||
Large Cap Equity
Fund |
N/A | N/A | N/A | N/A | 1.61 | % | 1.51 | % | 1.21 | % | 0.91 | % | 2/29/2012 | 1 | ||||||||||||||||||||||
Mid Cap Equity Fund |
1.45 | %2 | 2.15 | %2 | 2.15 | %2 | 0.99 | %2 | N/A | N/A | N/A | N/A | 2/29/2012 | 2 | ||||||||||||||||||||||
Small Cap Equity
Fund |
1.64 | % | 2.34 | % | 2.34 | % | 1.09 | % | N/A | N/A | N/A | N/A | 2/29/2012 | 1 | ||||||||||||||||||||||
U.S. Global Leaders
Growth Fund |
1.30 | % | 2.05 | % | 2.05 | % | 0.85 | % | N/A | N/A | N/A | N/A | 2/29/2012 | 1 | ||||||||||||||||||||||
Strategic Income
Fund |
N/A | N/A | N/A | N/A | 1.23 | % | 1.13 | % | 0.83 | % | 0.53 | % | 9/30/2011 | |||||||||||||||||||||||
Government Income
Fund |
1.09 | % | 1.84 | % | 1.84 | % | X/X | X/X | X/X | X/X | X/X | 9/30/2011 | ||||||||||||||||||||||||
Investment Grade
Bond Fund |
0.98 | % | 1.73 | % | 1.73 | % | 0.57 | % | X/X | X/X | X/X | X/X | 0/00/0000 | |||||||||||||||||||||||
Xxxxxxxxxxxxx
Tax-Free Income
Fund |
0.95 | % | 1.65 | % | 1.65 | % | X/X | X/X | X/X | X/X | X/X | 0/00/0000 | ||||||||||||||||||||||||
Xxx Xxxx Tax-Free
Income Fund |
0.94 | % | 1.64 | % | 1.64 | % | X/X | X/X | X/X | X/X | X/X | 9/30/2011 |
1 | At the December 5-7, 2010 meeting of the Board of Trustees of the Trusts, the Adviser notified the Board of, and the Board approved, the extension of the expiration date of the fee waiver and expense reimbursement arrangements for the Funds as listed above to February 29, 2012, each effective upon the current expiration date of February 28, 2011. | |
2 | At the December 5-7, 2010 meeting of the Board of Trustees of the Trusts, the Adviser notified the Board of, and the Board approved, the extension of the expiration date (to February 29, 2012) and the increasing of the Expense Limit of the fee waiver and expense reimbursement arrangements of Class A, Class B, Class C and Class I shares of Mid Cap Equity Fund (from 1.38% to 1.45% for Class A shares, 2.05% to 2.15% for Class B shares, 2.05% to 2.15% for Class C shares and 0.95% to 0.99% for Class I shares), effective upon the current expiration date of February 28, 2011. |
C-1
APPENDIX D
Fund Level Contractual Investment Management Fee Waivers
The Adviser agrees to limit Xxxx Xxxxxxx Money Market Fund’s management fee to a maximum annual
rate of 0.40% of the Fund’s average daily net assets. The limitation will continue until at least
July 31, 2011.
The Adviser agrees to limit Xxxx Xxxxxxx Government Income Fund’s management fee to a maximum
annual rate of 0.55% of the Fund’s average daily net assets. The limitation will continue until at
least September 30, 2011.
D-1
APPENDIX E
Fund Level Voluntary Limit on Total Operating Expenses
For purposes of this Appendix:
“Expenses” means all the expenses of a Fund excluding: (i) taxes; (ii) portfolio brokerage
commissions; (iii) interest; (iv) litigation and indemnification expenses and other extraordinary
expenses not incurred in the ordinary course of the Fund’s business; (v) acquired fund fee expenses
paid indirectly; (vi) short dividend expense; (vii) Rule 12b-1 fees; (viii) transfer agency fees;
and (ix) fees under any agreements or plans of the Fund dealing with services for shareholders and
others with beneficial interests in shares of the Trust.
“Expense Limit” means the percentage of a Fund’s average annual net assets (on an annualized basis)
set forth below.
The Adviser agrees to waive advisory fees and, to the extent necessary, reimburse other expenses of
the Fund, in an amount equal to the amount by which the Expenses of such Fund exceed the Expense
Limit for such Fund set forth in the table below.
The Expense Limit for each of the Funds indicated below for the purposes of this Appendix shall be
as follows:
Expiration Date of | ||||||||
Fund | Annual Expense Limit | Expense Limit* | ||||||
Mid Cap Equity Fund |
0.95 | % | Voluntary | |||||
U.S. Global Leaders Growth Fund |
0.82 | % | Voluntary |
* | These fee waivers and/or expense reimbursements are voluntary and may be amended or terminated at any time by the Adviser on notice to the Trust. |
E-1
APPENDIX F
Class Level Voluntary Limit on Total Operating Expenses
For Xxxx Xxxxxxx Money Market Fund, the Adviser and its affiliates may voluntarily waive a portion
of their fees (including, but not limited to, distribution and service (Rule 12b-1) fees) and/or
reimburse certain expenses to the extent necessary to assist the Fund in attempting to avoid a
negative yield. These fee waivers and/or expense reimbursements are voluntary and may be amended
or terminated at any time by the Adviser on notice to the Trust.
F-1