ACCESSOR FUNDS, INC.
ACCESSOR ALLOCATION FUNDS
SECOND EXPENSE GUARANTEE AGREEMENT
SECOND EXPENSE GUARANTEE AGREEMENT ("Agreement") made this 22nd day of
December, 2003 between Accessor Funds, Inc., ("Accessor Funds") and ACCESSOR
CAPITAL MANAGEMENT LP ("ACM"), the investment adviser to the Funds.
WHEREAS Accessor Funds offers interests in fifteen separate series,
nine of which represent a portfolio of securities with specific investment
objectives and policies (the "Underlying Funds") and six series referred to as
the Accessor Allocation Funds (the "Allocation Funds"), each of which invest in
mixes of shares of the Underlying Funds and operate as a so-called "fund of
funds";
WHEREAS Accessor Funds received an order of exemption ("Order") to
permit the Underlying Funds to bear the normal and ordinary expenses of
operating ("Operating Expenses") the Allocation Funds, the conditions of which
limit the ability of the Underlying Funds to bear all of the Allocation Funds'
Operating Expenses;
WHEREAS Accessor Funds and ACM entered into an Expense Guarantee
Agreement on December 22, 2000 for a three year period, which Agreement
terminated on December 21, 2003; and
WHEREAS ACM is willing to enter into a Second Expense Guarantee
Agreement under the following conditions;
NOW THEREFORE, Accessor Funds and ACM agree as follows:
1. Each Allocation Fund will pay (i) the 10 basis points management fee
to ACM; (ii) up to 10 basis points of Operating Expenses and (iii) if
applicable, the distribution and service fees as set forth in the
applicable prospectus pursuant to the Distribution Plan.
2. For the Allocation Funds' fiscal years ended December 31, 2004, 2005
and 2006, ACM agrees to pay all of the Operating Expenses of the
Allocation Funds to the extent the Allocation Funds do not pay for the
Operating Expenses or the Underlying Funds do not pay the expenses of
the Allocation Funds pursuant to the terms and conditions of the
Order.
3. Operating Expenses shall include all customary normal and ordinary
expenses of operating the Allocation Funds, but shall not include
non-recurring, extraordinary expenses such as the fees and costs of
actions, suits or proceedings and any penalties, damages or payments
in settlement in connection therewith, which the Allocation Funds may
incur directly, or may incur as a result of their legal obligation to
provide indemnification to their officers, directors and agents; the
fees and costs of any governmental investigation and any fines or
penalties in connection therewith; and any federal, state or local
tax, or related interest penalties or additions to tax, incurred, for
example, as a result of the Allocation Funds' failure to distribute
all of their earnings, failure to qualify under subchapter M of the
Internal Revenue Code, or failure to file in a timely manner any
required tax returns or other filings.
ACCESSOR FUNDS, INC.
By___________________________________
Xxxxxxxxx X. Xxxxxxxxx
Secretary
ACCESSOR CAPITAL MANAGEMENT LP
By: Accessor Capital Corporation
Its Managing General Partner
By____________________________________
J. Xxxxxxx Xxxxxxx III
President
