EXPENSE LIMITATION AGREEMENT
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HUSSMAN ECONOMETRICS ADVISORS, INC.
0000 Xxxxxxxx Xxxxx Xxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
_________________, 2000
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 ___________, 2000 (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 expenses of every character incurred by your Hussman Strategic Growth
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, 2001, such expenses shall not
exceed a percentage (the "Percentage Expense Limitation") of the average daily
net assets of the Fund equal to 2% 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 for the additional excess ("Other Expenses Exceeding Limit"). If
cumulative Unaccrued Fees or cumulative Other Expenses Exceeding Limit remain at
December 31, 2001, these amounts shall be paid to us in the future, provided
that (1) no such payment shall be made to us after December 31, 2003, (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, and (3) no such payment shall be made to us to the extent that the
aggregate of such payments would exceed the amount of organizational and
offering expenses (as defined by the Financial Accounting Standards Board)
recorded by you for financial reporting purposes on or before December 31, 2001.
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, 2001, nor
shall anything herein be construed as requiring that we limit, waive or
reimburse any of your expenses incurred after December 31, 2001, or, except as
expressly set forth herein, prior to such date.
4. This Agreement shall become effective on the date hereof and remain in
effect until December 31, 2001. This Agreement may be terminated by either party
hereto upon not less than 60 days' prior written notice to the other party. 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: ______________________________
Agreed to and accepted as of
the date first set forth above.
HUSSMAN INVESTMENT TRUST
By: ________________________
