Exhibit (h.7)
TEMPORARY EXPENSE LIMITATION AND
REIMBURSEMENT AGREEMENT
This AGREEMENT is made this __th day of _______________, 2009, between THE
XXXXXX AND RYGEL INVESTMENT GROUP, a Massachusetts business trust (the "Trust")
and PAYDEN/KDS INVESTMENT ADVISERS LLC, a Delaware limited liability company
(hereinafter called the "Adviser").
WITNESSETH
WHEREAS, the Adviser has entered into an Investment Management Agreement
with the Trust, pursuant to which the Adviser agrees to provide, or arrange for
the provision of, investment advisory and management services to certain series
of the Trust; and
WHEREAS, the Trust and the Adviser believe that capping the total expenses
of shares of each class of each series of the Trust listed in Appendix A to this
Agreement (each a "Fund") is in the best interests of the Fund;
NOW, THEREFORE, the parties hereto do hereby agree as follows:
1. LIMIT ON OPERATING EXPENSES. The Adviser hereby agrees to limit each
Fund's Operating Expenses to the respective annual rate of total Operating
Expenses specified for that class of that Fund in Appendix A of this Agreement
(an "Expense Cap").
2. DEFINITION. For purposes of this Agreement, the term "Operating
Expenses" with respect to a Fund is defined to include all expenses necessary or
appropriate for the operation of the Fund, including the Adviser's investment
advisory or management fee as described in the Investment Management Agreement,
but does not include any front-end or contingent deferred loads, taxes,
interest, brokerage commissions, acquired fund fees or expenses, or
extraordinary expenses such as litigation.
3. REIMBURSEMENT OF FEES AND EXPENSES. The Adviser, pursuant to the
Investment Management Agreement, retains its right to receive reimbursement of
reductions of its investment advisory fee and Operating Expenses paid by it that
are not its responsibility as described in the Investment Management Agreement.
4. RECOUPMENT BALANCE. Any fee reduced by the Adviser, or Operating
Expenses paid by it (collectively, "subsidies"), pursuant to this Agreement may
be reimbursed by a Fund to the Adviser no later than the end of the third fiscal
year following the year to which the subsidy relates if the aggregate expenses
for that period do not exceed an Expense Cap in effect at the time the subsidies
were incurred or any more restrictive limitation to which the Adviser has agreed
(subsidies available for reimbursement to the Adviser under this paragraph are
collectively referred to as the "Recoupment Balance") and the Board of Trustees
approves the reimbursement. The Adviser generally shall seek reimbursement on a
rolling three-year basis whereby the oldest subsidies are recouped first. The
Adviser may not request or receive reimbursement of the Recoupment Balance
before payment of the Fund's operating expenses for the current year and cannot
cause the Fund to exceed an Expense Cap or any other agreed upon expense
limitation for that year in making such reimbursement. The Adviser agrees not to
request or seek reimbursement of subsidized Operating Expenses that are no
longer eligible for reimbursement.
5. TERM. This Agreement shall continue in effect until February 27, 2010
unless sooner terminated in accordance with Section 6 herein.
6. TERMINATION. This Agreement may be terminated at any time by the Trust
on behalf of any one or more of the Funds or by the Board of Trustees of the
Trust, upon sixty (60) days' written notice to the Adviser without payment of
any penalty and shall automatically terminate upon the termination of the
Investment Management Agreement.
7. ASSIGNMENT. This Agreement and all rights and obligations hereunder may
not be assigned without the written consent of the other party.
8. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute or rule, or shall be otherwise rendered
invalid, the remainder of this Agreement shall not be affected thereby.
9. CAPTIONS. The captions in this Agreement are included for convenience of
reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction of effect.
10. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Massachusetts without giving effect to
the conflict of laws principles thereof; provided that nothing herein shall be
construed to preempt, or to be inconsistent with, any federal law, regulation or
rule, including the Investment Company Act of 1940, as amended, and the
Investment Advisers Act of 1940, as amended, and any rules and regulations
promulgated thereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
THE XXXXXX AND RYGEL INVESTMENT GROUP PAYDEN/KDS INVESTMENT ADVISERS LLC
By: By:
--------------------------------- ------------------------------------
Name: Name:
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Title: Title:
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SCHEDULE A
The annualized expenses of each of the following Funds will be limited to the
following annual rate of average daily net assets shown below:
Fund Annualized Expenses
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Xxxxxx/Xxxxxxx Cash Balance Plan Fund (Retirement Class) 1.75%
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