EXHIBIT 99.h.3.
Operating Exp. Agmt. - NC Alt. Strat.
46274v3
OPERATING EXPENSE AGREEMENT
New Century Alternative Strategies Portfolio
This OPERATING EXPENSE AGREEMENT (the "Agreement") is effective as of the
1st day of May, 2002, by and between New Century Portfolios, a Massachusetts
business trust (hereinafter called the "Trust"), on behalf of the series of the
Trust listed in Appendix A hereto (hereinafter referred to as the "Fund") and
Weston Financial Group, Inc., a corporation organized under the laws of the
Commonwealth of Massachusetts (hereinafter called the "Adviser").
WITNESSETH
WHEREAS, the Adviser is an investment adviser registered as such with the
U.S. Securities and Exchange Commission; and
WHEREAS, the Adviser renders investment advice and related services to the
Fund pursuant to the terms and provisions of an Investment Advisory Agreement
entered into between the Adviser and the Trust, on behalf of the Fund (the
"Investment Advisory Agreement"); and
WHEREAS, the Fund is responsible for the payment of certain expenses that
have not been assumed by the Adviser; and
WHEREAS, the Adviser desires to limit the Fund's Operating Expenses (as
that term is defined in Paragraph 2 of this Agreement) with respect to each
respective class of shares and pursuant to the terms and provisions of this
Agreement, and the Trust (on behalf of the Fund) desires to allow the Adviser to
implement those limits:
NOW THEREFORE, in consideration of the covenants and the mutual promises
hereinafter set forth, the parties hereto, intending to be legally bound hereby,
mutually agree as follows:
1. LIMIT ON OPERATING EXPENSES. The Adviser hereby agrees to limit the
Fund's Operating Expenses to the annual rate of total Operating
Expenses specified for the Fund and each respective class of shares in
Appendix A of this Agreement by reducing, as necessary, the investment
advisory fees payable to the Adviser by the Fund under the Investment
Advisory Agreement and/or reimbursing other Operating Expenses of the
Fund.
2. DEFINITION. For purposes of this Agreement, the term "Operating
Expenses" with respect to the 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 payable under the
Investment Advisory Agreement and other expenses described in the
Investment Advisory Agreement, but does not include any Rule 12b-1
fees, front-end or contingent deferred loads, taxes, interest,
dividend expenses, brokerage commissions, expenses incurred in
connection with any merger or reorganization or extraordinary expenses
such as litigation.
3. REIMBURSEMENT OF FEES AND EXPENSES. The Adviser hereby retains the
right to receive reimbursement of reductions of its investment
management fees and the Operating Expenses paid or reimbursed by it in
accordance with Paragraph 1, above, for a period ending three years
after the end of the fiscal year in which such fee or expense was
waived or reimbursed, as applicable, provided that such payment to the
Adviser does not cause the Fund's Operating Expenses to exceed the
limit set forth on Appendix A.
4. TERM. This Agreement shall become effective on the date specified
herein and shall remain in effect until October 31, 2003, unless
sooner terminated as provided in Paragraph 5 of this Agreement. This
Agreement shall continue in effect thereafter for additional periods
not exceeding one (1) year so long as continuation is approved for the
Fund at least annually by the Board of Trustees of the Trust (and
separately by the disinterested Trustees of the Trust).
5. TERMINATION. This Agreement may be terminated at any time, and without
payment of any penalty, by either the Trust or by the Board of
Trustees of the Trust, on behalf of the Fund, upon sixty (60) days'
written notice to the Adviser. The Adviser may decline to renew this
Agreement by written notification to the Trust at least thirty (30)
days before its annual expiration date.
6. ASSIGNMENT. This Agreement and all rights and obligations hereunder
may not be assigned without the written consent of the other party.
7. 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 the Agreement shall not be affected
thereby.
8. CAPTIONS. The captions in the 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.
9. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Massachusetts without
giving effect to the conflict of laws principles thereof; provided
that nothing herein shall be construed to preempt, or be inconsistent
with, and federal law, relation 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.
10. LIMITATION ON LIABILITY. The Declaration of Trust dated February 1,
1990, as amended from time to time, establishing the Trust, which is
hereby referred to and a copy of which is on file with the Secretary
of the Commonwealth of Massachusetts, provides that the name New
Century Portfolios means the Trustees from time to time serving (as
Trustees but not personally) under the Declaration of Trust. It is
expressly acknowledged and agreed that the obligations of the Trust
hereunder shall not be binding upon any of the shareholders, Trustees,
officers, employees or agents of the Trust, personally, but shall bind
only the trust property of the Trust, as provided in its Declaration
of Trust. The execution and delivery of this Agreement have been
authorized by the Trustees of the Trust and signed by the President of
the Trust, acting as such, and neither such authorization by such
Trustees nor such execution and delivery by such officer shall be
deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the trust
property of the Trust as provided in its Declaration of Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested by their duly authorized officers, all on the day and
year first above written.
NEW CENTURY PORTFOLIOS
/S/ XXXXX X. XXXXXXX
-----------------------
Name: Xxxxx X. Xxxxxxx
Title: President
WESTON FINANCIAL GROUP, INC.
/S/ I. XXXXXXX XXXXXXXX
-----------------------
Name: I. Xxxxxxx Xxxxxxxx
Title: President
APPENDIX A
Operating
Fund Name Expense Limit
New Century Alternative Strategies Portfolio 1.50%
