Exhibit 2(k)(ix)
FORM OF EXPENSE LIMITATION AGREEMENT
THIS EXPENSE LIMITATION AGREEMENT, effective as of March 1, 2001, is made
by and between ING Pilgrim Investments, LLC (the "Investment Manager") and
Pilgrim Senior Income Fund (the "Fund").
WHEREAS, the Fund is a Delaware business trust, and is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management company; and
WHEREAS, the Fund and the Investment Manager have entered into an
Investment Management Agreement dated December 15, 2000 ("Management
Agreement"), pursuant to which the Investment Manager provides investment
management services to the Fund for compensation based on the value of the
average daily assets of the Fund; and
WHEREAS, the Fund and the Investment Manager 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
would otherwise be subject;
NOW, THEREFORE, the parties hereto agree as follows:
1. EXPENSE LIMITATION.
1.1. APPLICABLE EXPENSE LIMIT. To the extent that the ordinary operating
expenses incurred by a class of the Fund in any fiscal year, including but not
limited to investment management fees payable to the Investment Manager, but
excluding interest, taxes, brokerage commissions, leverage expenses (as defined
below), other investment-related costs, extraordinary expenses such as
litigation, other expenses not incurred in the ordinary course of the Fund's
business, and 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 Investment Manager ("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 Manager.
1.2. OPERATING EXPENSE LIMIT. The maximum Operating Expense Limit in any
fiscal year with respect to each class of the Fund shall be the amount specified
in SCHEDULE A based on a percentage of the average daily net assets of such
class of the Fund.
1.3. METHOD OF COMPUTATION. To determine the Investment Manager's
obligation with respect to the Excess Amount, each day the Fund Operating
Expenses for each class of a Fund shall be annualized. If the annualized Fund
Operating Expenses for any day of a class of a Fund exceed the Operating Expense
Limit for that class, the Investment Manager shall remit to the appropriate
class of the Fund an amount that, together with any waived or reduced investment
management fee, is sufficient to pay that day's Excess Amount. The Fund may
offset amounts owed pursuant to this Agreement against the advisory fee payable
to the Investment Manager.
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 investment management fees
waived or reduced and other payments remitted by the Investment Manager to each
class of the Fund with respect to the previous fiscal year shall equal the
Excess Amount.
2. RECOUPMENT OF FEE WAIVERS AND EXPENSE REIMBURSEMENTS.
2.1. RECOUPMENT. If on any day during which the Management Agreement is in
effect, the estimated annualized Fund Operating Expenses of a class of a Fund
for that day are less than the Operating Expense Limit, the Investment Manager
shall be entitled to recoup from such class of the Fund the investment
management fees waived or reduced and other payments remitted by the Investment
Manager to such class of the Fund pursuant to Section 1 hereof (the "Recoupment
Amount") during any of the previous thirty-six (36) months, to the extent that
such class' annualized Operating Expenses plus the amount recouped equals, for
such day, the Operating Expense Limit provided in SCHEDULE A, provided that such
amount paid to the Investment Manager will in no event exceed the total
Recoupment Amount and will not include any amounts previously recouped.
2.2. 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 of each class
of the Fund for the prior fiscal year (including any recoupment 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 term through February 28, 2002.
Thereafter, this Agreement shall automatically renew for one-year terms unless
the Investment Manager provides written notice of the termination of this
Agreement to the Fund at least 30 days prior to the end of the then-current
term. In addition, this Agreement shall terminate upon termination of the
Management Agreement, or it may be terminated by the Fund, without payment of
any penalty, upon ninety (90) days' prior written notice to the Investment
Manager at its principal place of business.
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 or to take any action contrary to the Fund's Declaration of Fund or
Bylaws, 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.
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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 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.
4.4. AMENDMENTS. This Agreement may be amended only by a written agreement
signed by each of the parties hereto.
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.
PILGRIM SENIOR INCOME FUND
By:
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Xxxxxx X. Xxxxxx
Senior Vice President
ING PILGRIM INVESTMENTS, LLC
By:
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Xxxxxxx X. Xxxxxx III
Senior Vice President
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SCHEDULE A
OPERATING EXPENSE LIMITS
This Agreement relates to the following Funds:
Maximum Operating Expense Limit
Name of Fund (as a percentage of average net assets)
------------ ------- ------- ------- -------
Class A Class B Class C Class Q
------- ------- ------- -------
Pilgrim Senior Income Fund 1.35% 1.85% 1.85% 1.35%
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