EXPENSE LIMITATION AGREEMENT KEYSTONE MUTUAL FUNDS
Exhibit
(d)(4)
This EXPENSE LIMITATION AGREEMENT, is
made as of June 8, 2006 by and between Cornerstone Capital Management, LLC (the
“Adviser”) and Keystone Mutual Funds on behalf of its series Keystone Large Cap
Growth Fund (the “Fund”).
WHEREAS, the Fund is a Delaware
business trust, and will be registered under the Investment Company Act of 1940,
as amended (the “1940 Act”), as an open-end management investment company;
and
WHEREAS, the Fund and the Adviser have
entered into an investment advisory agreement dated June 8, 2006, (the
“Investment Advisory Agreement”), pursuant to which the Adviser provides
investment management services to the Fund for compensation based on the value
of the Fund’s average daily net assets; and
WHEREAS, the Fund 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 normally be subject;
NOW THEREFORE, the parties hereto agree
as follows:
1.
Expense Limitation.
1.1. Applicable
Expense Limit. The Adviser, in its capacity as investment adviser of the
Fund, agrees to waive its fee and/or reimburse expenses to the extent necessary
so that the total annual operating expenses for the Fund do not exceed the
Operating Expense Limit (as defined in Section 1.2 below). For purposes of this
Agreement, total annual operating expenses for the Fund generally consist of
costs not specifically borne by the Adviser, the Fund’s administrator, or the
Fund’s principal underwriter, including, but not limited to, investment advisory
fees, administrative fees, fees for necessary professional services, any
amortization of organizational expenses, costs associated with regulatory
compliance, maintaining legal existence, and investor relations (“Fund Operating
Expenses”), but excluding: interest; taxes; transaction costs (such as brokerage
commissions); extraordinary expenses, including, but not limited to, litigation
and indemnification costs, expenses of a reorganization, restructuring or merger
of the Fund or acquisition of all or substantially all of the assets of another
fund, expenses of holding, and soliciting proxies for a meeting of members of
the Fund (except to the extent relating to routine items), expenses of
converting to a new custodian, transfer agent or other service provider; other
expenses not incurred in the ordinary course of the Fund’s business; and/or
expenses of any counsel or other persons or services retained by the Fund’s
trustees who are not “interested persons,” as that term is defined in the 1940
Act, of the Adviser. To the extent the 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.
1.2. Operating
Expense Limit. The maximum Operating Expense Limit in any fiscal year or
period with respect to the Fund shall be the amount specified in Schedule A
based on a percentage of the Fund’s month-end net assets.
1.3. Duration of
Operating Expense Limit. The Operating Expense Limit with respect to the
Fund shall remain in effect until June 1, 2007. The Adviser may extend, but may
not during the term of this Agreement shorten, the duration of the Operating
Expense Limit without the consent of the Fund. Such an extension must continue
at the same Operating Expense Limit amount specified on Schedule A, unless
otherwise agreed by the parties hereto.
1.4. Method of
Computation. To determine the Adviser’s obligation with respect to the
Excess Amount, each month the Fund Operating Expenses for the Fund shall be
annualized. If the annualized Fund Operating Expenses for any month of the Fund
exceeds the Operating Expense Limit of the Fund, the Adviser shall remit to the
Fund an amount equal to such Excess Amount, either by fee waiver or
reimbursement of 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 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.
2.
Reimbursement of Fee Waivers and Expense Reimbursements.
2.1.
Reimbursement. If on the last business day of any month during which the
Investment Advisory Agreement is in effect, the estimated annualized Fund
Operating Expenses of the Fund for that month is less than the Operating Expense
Limit, the Adviser shall be entitled to reimbursement by the Fund of the fees
waived or reduced and other payments remitted by the Adviser to the Fund
pursuant to Section 1 hereof (the “Reimbursement Amount”) during any of the
previous thirty-six (36) months, to the extent that the annualized Fund
Operating Expenses plus the amount so reimbursed equals, for such month, the
Operating Expense Limit provided in Schedule A, 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 business 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 the
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.
This Agreement shall have an initial
period as set forth in Section 1.3 above, and shall apply for each fiscal year
thereafter so long as it is in effect. Thereafter, this Agreement shall
automatically renew for one-year terms unless the Adviser provides written
notice to the Fund of the termination of this Agreement, which notice shall be
received by the Fund at least thirty (30) days’ prior to the end of the
then-current term. In addition, this Agreement shall terminate upon termination
of the Investment Advisory Agreement, or it may be terminated by the Fund,
without payment of any penalty, upon thirty (30) days’ prior written notice to
the other party at its principal place of business.
This Agreement is applicable only to
the Fund and shall not be applicable to any other series of Keystone Mutual
Funds hereafter created.
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
Fund to take any action contrary to the Fund’s governing documents, or any
applicable statutory or regulatory requirement to which it is subject or by
which it is bound, or to relieve or deprive the Fund’s Board of Trustees of its
responsibility for and control of the conduct of the affairs of the
Fund.
4.3.
Definitions. Any question of interpretation of any term or provision of
this Agreement, including but not limited to the investment management fee, the
computations of net asset value, and the allocation of expenses, having a
counterpart in or otherwise derived from the terms and provisions of the 1940
Act or the Investment Advisory Agreement, shall have the same meaning as and be
resolved by reference to the 1940 Act or such Investment Advisory
Agreement.
4.4 Limitation
of Liability. The Adviser agrees that it shall look only to
the assets of the Fund for performance of this Agreement and for payment of any
claim it may have hereunder, and that neither any other series of the Trust
hereafter created, nor any of the Trust's trustees, officers, employees, agents,
or shareholders, whether past, present or future, shall be personally liable
therefore.
IN WITNESS WHEREOF, the parties have
caused this Agreement to be signed by their respective officers thereunto duly
authorized as of the day and year first above written.
| KEYSTONE MUTUAL FUNDS | ||
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By:
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| Name: | ||
| Title: | ||
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| CORNERSTONE CAPITAL MANAGEMENT, LLC | ||
| By: | ||
| Name: | ||
| Title: | ||
SCHEDULE
A OPERATING EXPENSE LIMIT
Amended
as of August 20, 2009
|
Name
of Fund
|
Maximum
Operating Expense Limit
|
|
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Keystone
Large Cap Growth Fund (Class A)
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1.50%
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Keystone
Large Cap Growth Fund (Class C)
|
2.20%
|
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Keystone
Large Cap Growth Fund (Class I)
|
1.20%
|
