5
EXPENSE LIMITATION AGREEMENT
USALLIANZ VARIABLE INSURANCE PRODUCTS FUND OF FUNDS TRUST
EXPENSE LIMITATION AGREEMENT, effective as of April 29, 2005, by and
between USALLIANZ ADVISERS, LLC (the "Investment Adviser") and USALLIANZ
VARIABLE INSURANCE PRODUCTS FUND OF FUNDS TRUST (the "Trust"), a Delaware
business trust, on behalf of each of the funds, listed on Exhibit A (each, a
"Fund").
WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open end-diversified management company
of the series type, and each Fund is a series of the Trust; and
WHEREAS, the Trust and the Investment Adviser have entered into an
Investment Management Agreement (the "Management Agreement"), pursuant to which
the Investment Adviser will render 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 and the Investment 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 to which the Fund would
normally be subject during its start-up period.
NOW, THEREFORE, the parties hereto agree as follows:
1. EXPENSE LIMITATION.
1.1 APPLICABLE EXPENSE LIMIT. To the extent that the aggregate
expenses of every character incurred by the Fund in any fiscal
year, including but not limited to investment advisory fees of
the Investment Adviser (but excluding interest, taxes,
brokerage commissions and other expenditures which are
capitalized in accordance with generally accepted accounting
principles and other extraordinary 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 Investment Adviser.
1.2 OPERATING EXPENSE LIMIT. The Operating Expense Limit for each
Fund's full year of operations shall be a percentage of such
Fund's average daily net assets as described in Exhibit A or,
in each subsequent fiscal year following the end of the first
year of operations, shall be such other rate as may be agreed
to in writing by the parties.
1.3 METHOD OF COMPUTATION. To determine the Investment Adviser's
liability with respect to the Excess Amount, each month the
Fund Operating Expenses shall be annualized as of the last day
of the month for each Fund. If the annualized Fund Operating
Expenses for any month exceed the Operating Expense Limit, the
Investment Adviser shall first waive or reduce its advisory
fee for such month by an amount sufficient to reduce the
annualized Fund Operating Expenses to an amount no higher than
the Operating Expense Limit. If the amount of the waived or
reduced advisory fee for any such month is insufficient to pay
the Excess Amount, the Investment Adviser shall also remit to
a Fund an amount that, together with the waived or reduced
advisory fee, is sufficient to pay such Excess Amount.
1.4 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 advisory fees waived or reduced and other
payments remitted by the Investment Adviser to a Fund with
respect to the previous fiscal year shall equal the Excess
Amount.
2. REIMBURSEMENT OF FEE WAIVERS AND EXPENSE REIMBURSEMENTS.
2.1 REIMBURSEMENT. If in any fiscal year in which the Investment
Advisory Agreement is still in effect, the estimated aggregate
Fund Operating Expenses for the fiscal year are less than the
Operating Expense Limit for that year, the Investment Adviser
shall be entitled to reimbursement by a Fund, in whole or in
part as provided below, of the advisory fees waived or reduced
and other payments remitted by the Investment Adviser and all
other payments remitted by the Investment Adviser to a Fund,
pursuant to Section 1 hereof, during any of the previous three
(3) fiscal years less any reimbursement previously paid by
such Fund to the Investment Adviser, pursuant to Sections 2.2
hereof, with respect to such waivers, reductions and payments.
The Reimbursement Amount shall not include any additional
charges or fees whatsoever, including, e.g., interest
accruable on the Reimbursement Amount.
2.2 METHOD OF COMPUTATION. To determine a Fund's payments, if any,
to reimburse the Investment Adviser for all or any portion of
the Reimbursement Amount, each month the Fund Operating
Expenses for each Fund shall be annualized as of the last day
of the month. If the annualized Fund Operating Expenses for
any month are less than the Operating Expense Limit, a Fund,
only with the prior approval of the Board, shall pay to the
Investment Adviser an amount sufficient to increase the
annualized Fund Operating Expenses to an amount no greater
than the Operating Expense Limit, provided that such amount
paid to the Investment Adviser will in no event exceed the
total Reimbursement Amount. If the annualized Fund Operating
Expenses for a Fund are greater than the Operating Expense
Limit for one or more months in a quarter and less the
remaining month(s), the calculation described in this section
will be made on a monthly basis and the net amount of the
monthly calculations will be reported to the Board. In no
event will a Fund be obligated to pay any fees waived or
expenses reimbursed by the Investment Adviser with respect to
the other Funds of the Trust.
2.3 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 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.
This Agreement shall continue in effect for a period of one year from
the date of its execution and from year to year thereafter provided
such continuance is specifically approved by a majority of the trustees
of the Trust who (i) are not "interested persons" of the Trust or any
other party to this Agreement, as defined in the 1940 Act, and (ii)
have no direct or indirect financial interest in the operation of this
Agreement ("Non-Interested Trustees"), provided however, that the
reimbursements described in Section 2 will not continue for more than
three years after a Fund's commencement of operations. The Adviser may
upon 30 days' written notice to the Trust terminate, in whole or in
part, its obligation under Section 1 to reduce its fees with respect to
a Fund in any period no earlier than the end of the first year of
operations and following the date specified in such notice (or change
the percentage specified in Section 1), but no such change shall affect
the obligation (including the amount of the obligation) of a Fund to
repay any Excess Amounts eligible for repayment pursuant to this
agreement.
4. MISCELLANEOUS.
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 a Fund to take any action contrary to the
Trust's Agreement and 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 each
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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
USALLIANZ VARIABLE INSURANCE PRODUCTS FUND OF FUNDS TRUST
By: /s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx
Vice President
USALLIANZ ADVISERS, LLC
By: /s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx
President
EXHIBIT A
TO THE EXPENSE LIMITATION AGREEMENT BETWEEN
USALLIANZ VARIABLE INSURANCE PRODUCTS FUND OF FUNDS TRUST
AND
USALLIANZ ADVISERS, LLC
APRIL 29, 2005
NAME OF FUND EXPENSE LIMITATION
USAZ Fusion Balanced Fund .30%
USAZ Fusion Moderate Fund .30%
USAZ Fusion Growth Fund .30%
