EX-99.d(5)
EXPENSE LIMITATION AGREEMENT
EXPENSE LIMITATION AGREEMENT ("Agreement"), effective as of January 1,
2006, by and between Xxxxxx Xxxx Investment Funds, a Massachusetts business
trust (the "Trust"), on behalf of the Xxxxxx Xxxx Global High Yield Bond Fund
(the "Fund"), and Xxxxxx Xxxx Investment Management, LLC, a corporation
organized under the laws of the State of Delaware (the "Adviser").
W I T N E S S E T H:
WHEREAS, the Trust, on behalf of the Fund, and the Adviser have entered
into an Investment Advisory Agreement, effective November 1, 2002 ("Advisory
Agreement"), pursuant to which the Adviser renders investment management
services to the Fund for compensation based on the value of the average daily
net assets of the Fund; and
WHEREAS, the Trust and the Adviser have determined that it is
appropriate and in the best interests of the Fund and its shareholders to
maintain Fund expenses at a level below that to which the Fund would normally be
subject during the term of this Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1. EXPENSE LIMIT.
1.1. LIMITATION. To the extent that the aggregate expense of every
character incurred by the Fund during the term of this Agreement
including, but not limited to, investment management fees of the
Adviser (but excluding interest, taxes, brokerage commissions, and
other expenditures which are capitalized in accordance with generally
accepted accounting principles, and other extraordinary expenses not
incurred in the ordinary course of the Fund's business) ("Fund
Operating Expenses"), exceeds the "Expense Limit," which is 1.25% and
1.00% of the average daily net assets of the Class A and Class I
shares, respectively of the Fund, such excess amount ("Excess Amount")
shall be the liability of the Adviser.
1.2. METHOD OF COMPUTATION. To determine the Adviser's liability
for the Excess Amount, at each month end the fiscal year to date Fund
Operating Expenses accrued shall be compared with the fiscal year to
date Expense Limit. If at the end of any month the Fund Operating
Expenses exceed the Expense Limit, the Adviser shall first waive or
reduce its investment management fee for such month, as appropriate, to
the extent necessary to pay such Excess Amount. In the event the Excess
Amount exceeds the amount of the investment management fee for such
month, the Adviser, in addition to waiving its entire investment
management fee for such month, shall also remit to the Fund the
difference between the Excess Amount and the amount due as the
investment management fee.
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1.3. YEAR-END ADJUSTMENT. If necessary, on or before the last day
of the first month following the termination of this Agreement, or as
soon as practicable thereafter, an adjustment payment shall be made by
the appropriate party in order to ensure that the actual Fund Operating
Expenses for the period covered by this Agreement (including any
reimbursement payments made under Section 2 of this Agreement) do not
exceed the Expense Limit.
2. REIMBURSEMENT OF FEE WAIVERS AND EXPENSE REIMBURSEMENTS.
2.1. REIMBURSEMENT. If, in any year in which the Advisory
Agreement remains in effect, estimated aggregate Fund Operating
Expenses for the fiscal year are less than the Expense Limit for that
year, the Adviser shall be entitled to reimbursement by the Fund, in
whole or in part as provided below, of the investment management fees
waived or reduced, and other payments remitted by the Adviser to the
Fund pursuant to Section 1 hereof. The total amount of reimbursement to
which the Adviser may be entitled ("Reimbursement Amount") shall equal,
at any time, the sum of all investment management fees waived or
reduced by the Adviser, and all other payments, if any, remitted by the
Adviser to the Fund pursuant to Section 1 hereof, commencing with the
effective date of this Agreement and continuing through each of the
next three (3) fiscal years, less any reimbursement paid from time to
time by the Fund to the Adviser pursuant to this Agreement with respect
to such waivers, reductions, and payments. The Reimbursement Amount,
and any portion thereof, shall not include any additional charges or
fees whatsoever including, but not limited to, interest accruable on
the Reimbursement Amount.
2.2. METHOD OF COMPUTATION. To determine the amount of the Fund's
payment, if any, to reimburse the Adviser for the Reimbursement Amount,
at each month end the fiscal year to date Fund Operating Expenses
accrued shall be compared with the fiscal year to date Expense Limit.
If at the end of any month the Fund Operating Expenses are less than
the Expense Limit, the Fund shall pay to the Adviser an amount
sufficient to increase the annualized Fund Operating Expenses to an
amount no greater than the Expense Limit, provided that such amount
paid to the Adviser will in no event exceed the Reimbursement Amount.
2.3. YEAR-END ADJUSTMENT. If necessary, on or before the last day
of the first month of each succeeding fiscal year, or as soon as
practicable thereafter, an adjustment payment shall be made by the
appropriate party in order to ensure that the actual Fund Operating
Expenses for the prior fiscal year (including any reimbursement
payments made hereunder with respect to such fiscal year) do not exceed
the Expense Limit.
3. TERMINATION OF AGREEMENT. This Agreement shall continue in effect
until the earlier of (a) the termination of the Advisory Agreement; or
(b) February 28, 2007.
4. MISCELLANEOUS.
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4.1. NOTICES. Any notice under this Agreement shall be given in
writing, addressed and delivered, or mailed postpaid, (a) if to the
Adviser, to Xxxxxx Xxxx Investment Management, LLC, 000 Xxxxxxx Xxxxxx,
Xxx Xxxx, XX 00000; and (b) if to the Trust, at the foregoing office of
the Adviser.
4.2. 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.
4.3. INTERPRETATION. Nothing herein contained shall be deemed to
require the Trust to take any action contrary to its Master Trust
Agreement 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 Board of Trustees of its responsibility for and
control of the conduct of the affairs of the Trust.
4.4. 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 Advisory Agreement, shall
have the same meaning as and be resolved by reference to such Advisory
Agreement.
4.5. AMENDMENT. This Agreement may be amended or modified only
upon the written consent of the parties hereto.
4.6. GOVERNING LAW. Except insofar as the Investment Company Act
of 1940, as amended, or other federal laws and regulations may be
controlling, this Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
by their respective officers thereunto duly authorized, as of the day and year
first above written.
Xxxxxx Xxxx Investment Funds, on behalf of
Xxxxxx Xxxx Global High Yield Bond Fund
By: /s/ XXXX WHILESMITH
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Title: Secretary
Xxxxxx Xxxx Investment Management, LLC.
By: /s/ XXXXX XXXXXX
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Title: Vice President
Approved December 14, 2005
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