EXPENSE LIMITATION AGREEMENT
HUSSMAN ECONOMETRICS ADVISORS, INC.
0000 Xxxxxxxx Xxxxx Xxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
September 10, 2002
HUSSMAN INVESTMENT TRUST
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxx 00000
Dear Sirs:
Hussman Econometrics Advisors, Inc. confirms our agreement with you as
follows:
1. You are an open-end, diversified management investment company
registered under the Investment Company Act of 1940 (the "Act") and are
authorized to issue shares of separate series (funds), with each fund having its
own investment objective, policies and restrictions. You propose to engage in
the business of investing and reinvesting the assets of each of your funds in
accordance with applicable limitations. Pursuant to an Investment Advisory
Agreement dated as of September 10, 2002 (the "Advisory Agreement"), you have
employed us to manage the investment and reinvestment of such assets.
2. We hereby agree that, notwithstanding any provision to the contrary
contained in the Advisory Agreement, we shall limit as provided herein the
aggregate ordinary operating expenses incurred by your Hussman Strategic Total
Return Fund (the "Fund"), including but not limited to the fees ("Advisory
Fees") payable to us under the Advisory Agreement (the "Limitation"). Under the
Limitation, we agree that, through December 31, 2005, such expenses shall not
exceed a percentage (the "Percentage Expense Limitation") of the average daily
net assets of the Fund equal to 0.90% on an annualized basis. To determine our
liability for the Fund's expenses in excess of the
Percentage Expense Limitation, the amount of allowable fiscal-year-to-date
expenses shall be computed daily by prorating the Percentage Expense Limitation
based on the number of days elapsed within the fiscal year of the Fund, or
limitation period, if shorter the ("Prorated Limitation"). The Prorated
Limitation shall be compared to the expenses of the Fund recorded through the
current day in order to produce the allowable expenses to be recorded for the
current day (the "Allowable Expenses"). If Advisory Fees and other expenses of
the Fund for the current day exceed the Allowable Expenses, Advisory Fees for
the current day shall be reduced by such excess ("Unaccrued Fees"). In the event
such excess exceeds the amount due as Advisory Fees, we shall be responsible to
the Fund to pay or absorb the additional excess ("Other Expenses Exceeding
Limit"). If there are cumulative Unaccrued Fees or cumulative Other Expenses
Exceeding Limit, these amounts shall be paid to us by you subject to the
following conditions: (1) no such payment shall be made to us with respect to
Unaccrued Fees or Other Expenses Exceeding Limit that arose more than three
years prior to the proposed date of payment, and (2) such payment shall be made
only to the extent that it does not cause the Fund's aggregate expenses, on an
annualized basis, to exceed the Percentage Expense Limitation.
3. Nothing in this Agreement shall be construed as preventing us from
voluntarily limiting, waiving or reimbursing your expenses outside the contours
of this Agreement during any time period before or after December 31, 2005, nor
shall anything herein be construed as requiring that we limit, waive or
reimburse any of your expenses incurred after December 31, 2005, or, except as
expressly set forth herein, prior to such date.
4. This Agreement shall become effective on the date hereof and supercedes
any expense limitation agreement previously entered into with respect to the
Fund. This Agreement may be terminated by either party hereto upon not less than
60 days' prior written notice to the other party, provided, however, that (1) we
may not terminate this Agreement without the approval of your Board of Trustees,
and (2) this Agreement will terminate automatically if, as and when we cease to
serve as investment adviser of the
Fund. Upon the termination or expiration hereof, we shall have no claim against
you for any amounts not reimbursed to us pursuant to the provisions of paragraph
2.
5. This Agreement shall be construed in accordance with the laws of the
State of Maryland, provided, however, that nothing herein shall be construed as
being inconsistent with the Act.
If the foregoing is in accordance with your understanding, will you kindly
so indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
HUSSMAN ECONOMETRICS ADVISORS, INC.
By: /s/ Xxxx X. Xxxxxxx
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Agreed to and accepted as of
the date first set forth above.
HUSSMAN INVESTMENT TRUST
By: /s/ Xxxx X. Xxxxxxx
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