EXHIBIT 99.(H)(6)
FORM OF EXPENSE LIMITATION AGREEMENT
HSBC INVESTOR FUNDS
EXPENSE LIMITATION AGREEMENT, effective as of February 28, 2003 by and
between HSBC Asset Management (Americas) Inc. (the "Investment Manager") and the
HSBC Investor Funds (the "Trust"), on behalf of each series of the Trust set
forth in Schedule A (each a "Fund," and collectively, the "Funds").
WHEREAS, the Trust is a Massachusetts Business Trust, and is registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), as an
open-end management company of the series type, and each Fund is a series of the
Trust; and
WHEREAS, the Trust and the Investment Manager have entered into an
Investment Management Agreement (the "Management Agreements"), pursuant to which
the Investment Manager provides investment management services to each Fund for
compensation based on the value of the average daily net assets of each such
Fund; and
WHEREAS, the Trust and the Investment Manager have determined that it is
appropriate and in the best interests of each Fund and its shareholders to
maintain the expenses of each Fund at a level below the level to which each such
Fund may normally be subject;
NOW THEREFORE, the parties hereto agree as follows:
II. Expense Limitation.
A. Applicable Expense Limit. To the extent that the ordinary operating
expenses incurred by a Fund in any fiscal year, including but not limited to
investment management fees of the Investment Manager and amounts payable
pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act
("Fund Operating Expenses"), but excluding interest, taxes, brokerage
commissions, extraordinary expenses such as litigation, and other expenses not
incurred in the ordinary course of such Fund's business, 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.
B. Operating Expense Limit. The maximum Operating Expense Limit in any year
with respect to each Fund shall be the amount specified in Schedule A based on a
percentage of the average daily net assets of each Fund.
C. Duration of Operating Expense Limit. The Operating Expense Limit with
respect to each Fund shall remain in effect until the date specified for that
Fund on Schedule B. The Investment Manager may extend, but may not during the
term of this Agreement shorten, the duration of the Operating Expense Limit for
any Fund without the consent of the Trust by delivering a revised Schedule B to
the Trust reflecting such extension. Such an extension must continue at the same
Operating Expense Limit amount specified on Schedule A.
D. Method of Computation. To determine the Investment Manager's obligation
with respect to the Excess Amount, each day the Fund Operating Expenses for each
Fund shall be estimated and accrued. Each day, the Fund shall also calculate a
year-to-date Operating Expense Limit Amount, based on each Fund's year to date
average net assets and its Annual Expense Limit. If the total year to date
expenses exceed the year to date Operating Expense Limit Amount, the Fund shall
record a receivable from the Investment Manager in an amount equal to the year
to date Excess Amount less any such receivables previously recorded for the
fiscal period. Shortly after the end of each month, the Fund shall deliver to
the Investment Manager a statement indicating the Excess Amount owed to the Fund
for the month and the Investment Manager will remit to the Fund an amount that,
together with any waived or reduced investment management fee, is sufficient to
pay that monthly Excess Amount.
E. 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 the
Fund or Funds with respect to the previous fiscal year shall equal the Excess
Amount.
III. Reimbursement of Fee Waivers and Expense Reimbursements.
A. Reimbursement. If on any day during which the Management Agreement is in
effect, the estimated annualized Fund Operating Expenses of such Fund for that
day are less than the Operating Expense Limit, the Investment Manager shall be
entitled to reimbursement by such Fund of the investment management fees waived
or reduced and other payments remitted by the Investment Manager to such Fund
pursuant to Section 1 hereof (the "Reimbursement Amount") during any of the
previous thirty-six (36) months, to the extent that the Fund's annualized
Operating Expenses plus the amount so reimbursed 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 Reimbursement Amount
and will not include any amounts previously reimbursed.
B. 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 a Fund for
the prior fiscal year (including any reimbursement payments hereunder with
respect to such fiscal year) do not exceed the Operating Expense Limit.
IV. Term and Termination of Agreement.
This Agreement shall terminate upon termination of the Investment
Management Agreement, or it may be terminated by either party hereto, without
payment of any penalty, upon ninety (90) days' prior written notice to the other
party at its principal place of business.
V. Miscellaneous.
A. 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.
B. Interpretation. Nothing herein contained shall be deemed to require the
Company or the Funds to take any action contrary to the Company's Declaration of
Trust or By-Laws, or any applicable statutory or regulatory requirement to which
it is subject or by which it is bound, or to relieve or deprive the
Company's Board of Trustees of its responsibility for and control of the conduct
of the affairs of the Company or the Funds.
C. 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.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective officers thereunto duly authorized and their respective
corporate seals to be hereunto affixed, as of the day and year first above
written.
HSBC INVESTOR FUNDS
ON BEHALF OF
EACH OF ITS SERIES
By:
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Name:
Title:
HSBC ASSET MANAGEMENT (AMERICAS) INC.
By:
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Name:
Title:
SCHEDULE A
OPERATING EXPENSE LIMITS
This Agreement relates to the following Funds of the Trust:
Maximum Operating
Expense Limit
(as a percentage of
Name of Fund average net assets)
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HSBC Investor Bond Fund Class A Shares: 1.10%
Class B Shares: 1.85%
Class C Shares: 1.85%
HSBC Investor U.S. Treasury Money Market Fund Class A Shares: 0.80%
Class B Shares: 1.40%
Class C Shares: 1.40%
Class D Shares: 0.65%
Class Y Shares: 0.40%
HSBC Investor Opportunity Fund Class A Shares: 1.65%
Class B Shares: 2.40%
Class C Shares: 2.40%
HSBC Investor Balanced Fund Class A Shares: 1.20%
Class B Shares: 1.95%
Class C Shares: 1.95%
Class Y Shares: 0.95%
HSBC Investor California Tax-Free Money Market Fund Class A Shares: 0.80%
Class B Shares: 1.40%
Class C Shares: 1.40%
Class D Shares: 0.65%
Class Y Shares: 0.40%
HSBC Investor Overseas Equity Fund Class A Shares: 1.85%
Class B Shares: 2.60%
Class C Shares: 2.60%
HSBC Investor Money Market Fund Class I Shares: 0.20%
SCHEDULE B
DURATION OF OPERATING EXPENSE LIMITS
The duration of each Operating Expense Limit shall be as follows:
Date on Which
Operating Expense
Name of Fund Limit Terminates
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HSBC Investor Bond Fund March 1, 2004
HSBC Investor U.S. Treasury Money Market Fund March 1, 2004
HSBC Investor Opportunity Fund March 1, 2004
HSBC Investor Balanced Fund March 1, 2004
HSBC Investor California Tax-Free Money Market Fund March 1, 2004
HSBC Investor Overseas Equity Fund March 1, 2004
HSBC Investor Money Market Fund March 1, 2004
