EXHIBIT NO. 22(h)(5)(a)
OPERATING EXPENSE AGREEMENT
This OPERATING EXPENSE AGREEMENT (the "Agreement") is effective as of the
1st day of November, 2004, by and between New Century Portfolios, a
Massachusetts business trust (the "Trust"), on behalf of each series of the
Trust listed on Schedule A hereto, as such Schedule may be supplemented or
amended from time to time (each series is hereinafter referred to individually
as a "Fund," and collectively as the "Funds") and Weston Financial Group, Inc.,
a Massachusetts corporation (the "Adviser").
WITNESSETH
WHEREAS, the Adviser is an investment adviser registered as such with the
United States Securities and Exchange Commission; and
WHEREAS, the Adviser renders investment advice and related services to each
Fund pursuant to the terms and provisions of certain Investment Advisory
Agreements entered into between the Trust and the Adviser on behalf of each Fund
(each an "Investment Advisory Agreement"); and
WHEREAS, the Funds are responsible for the payment of certain expenses that
have not been assumed by the Adviser; and
WHEREAS, the Adviser desires to limit each respective Fund's Operating
Expenses (as that term is defined in Paragraph 2 of this Agreement) with respect
to each respective class of shares pursuant to the terms and provisions of this
Agreement, and the Trust (on behalf of the Funds) 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 each
Fund's Operating Expenses to the respective annual rate of total
Operating Expenses specified for that Fund and each respective class
of shares on Schedule A of this Agreement by reducing, as necessary,
the investment advisory fees payable to the Adviser by a Fund under an
Investment Advisory Agreement and/or reimbursing other Operating
Expenses of such Fund.
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 payable under the
Investment Advisory Agreement, net 12b-1 distribution fees paid for
the distribution of shares of a Fund, and other expenses described in
the Investment Advisory Agreement, but does not include any portfolio
security acquisition costs such as Rule 12b-
1 fees, front-end or contingent deferred loads, and does not include
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 a Fund's Operating Expenses to exceed the limit
set forth on Schedule A.
4. TERM. This Agreement shall become effective on the date first
specified above and shall remain in effect until October 31, 2005,
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 each 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 any one or more of the Funds, 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. Section 11.1 of the Trust's Declaration of
Trust dated February 1, 1990, as amended from time to time, contains a
provision limiting the personal liability of the Trustees and the
beneficial shareholders of the Trust. The Adviser acknowledges that it
has been given notice of such limitation, and the Adviser hereby
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agrees that it will abide by such limitation in respect of any claim
it may assert against the Trust, and that it will not assert a claim
against the Trustees, officers, employees, agents, or beneficial
shareholders of the Trust, but will assert any such claim only against
the 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 SECURITIES CORPORATION
I. XXXXXXX XXXXXXXX
-----------------------------------
Name: I. Xxxxxxx Xxxxxxxx
Title: President
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SCHEDULE A
OPERATING
FUND NAME EXPENSE LIMIT
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New Century Capital Portfolio 1.50%
New Century Balanced Portfolio 1.50%
New Century Aggressive Portfolio 1.50%
New Century International Portfolio 1.50%
New Century Alternative Strategies Portfolio 1.50%
Date: November 1, 2004
