EXHIBIT (h)(3)
EXPENSE LIMITATION AGREEMENT
THE XXXXXX MANAGED INCOME TRUST
EXPENSE LIMITATION AGREEMENT, effective as of April 30, 2009 by and among
Xxxxxx Investors' Service, Inc. (the "Adviser"), Xxxxxx Investors' Service
Distributors, Inc. (the "Distributor") and The Xxxxxx Managed Income Trust (the
"Trust"), a Massachusetts business trust, on behalf of each series of the Trust
set forth in Schedule A attached hereto (each, a "Fund").
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end management company, and is organized
as a business trust under the laws of the Commonwealth of Massachusetts, and
each Fund is a series of the Trust;
WHEREAS, the Adviser and the Trust, on behalf of each Fund, are parties to
investment advisory agreements (the "Advisory Agreements"), pursuant to which
the Adviser provides investment advisory services to each Fund in consideration
of compensation based on the value of the average daily net assets of such Fund
(the "Advisory Fee"); and
WHEREAS, the Distributor and the Trust, on behalf of each Fund, are parties
to Rule 12b-1 Plans pursuant to which the Distributor engages in marketing and
distribution activities on behalf of each Fund in consideration of compensation
based on the value of the average daily net assets of such Fund; and
WHEREAS, the Adviser and the Distributor have voluntarily determined that
it is appropriate and in the best interests of each Fund and its shareholders to
maintain the expenses of each Fund set forth in Schedule A at specified levels.
The Trust, the Adviser and the Distributor therefore have entered into this
Expense Limitation Agreement (the "Agreement") in order to maintain the expense
ratio of each Fund no higher than the level specified in Schedule A attached
hereto (the "Operating Expense Limit") for the period beginning on the date
hereof on the terms and conditions set forth in this Agreement.
NOW THEREFORE, in consideration of the mutual covenants set forth herein and
other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. Expense Limitation.
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1.1 Contractual Expense Limit. During the Term (as defined in Section 2.1),
the Adviser and the Distributor each agrees to waive all or a portion of the
Advisory Fee and amounts, if any, payable pursuant to plans adopted in
accordance with Rule 12b-1 under the 1940 Act to the extent necessary so that
the total expenses of every character incurred by the applicable Fund (excluding
interest, taxes, brokerage commissions, other expenditures which are capitalized
in accordance with generally accepted accounting principles, and other
extraordinary expenses not incurred in the ordinary course of such
Fund's business (i.e., litigation)), and after giving affect to any custodial
fee reimbursement or waiver ("Operating Expenses") exceed the Operating Expense
Limit. During the Term, to the extent that a Fund's Operating Expenses in any
fiscal year (after waiver of the Advisory Fees and Rule 12b-1 fees) exceed the
Operating Expense Limit, such excess amount (the "Excess Amount") shall be the
liability of the Adviser.
1.2 Operating Expense Limit. The Operating Expense Limit in any year with
respect to each Fund shall be the amount from time to time specified in Schedule
A based on a percentage of the average daily net assets of such Fund.
1.3 Method of Computation. To determine the Adviser's and the Distributor's
obligations hereunder, each Fund's Operating Expense Limitation is computed by
the custodian daily and compared to the actual expenses recorded. The
calculation is the average daily net assets times the Operating Expense
Limitation divided by 365 times the number of days since the beginning of the
year. If cumulative expenses exceed the Operating Expense Limit, then the 12b-1
fees, followed by the Advisory Fees if necessary, are waived to reduce expenses
to the Operating Expense Limit. If waivers are not sufficient, then a receivable
due from the Adviser is recorded.
1.4 Voluntary Fee Waiver/Expense Reimbursement. Nothing herein shall
preclude the Adviser and/or the Distributor from either voluntarily waiving
Advisory Fees or Rule 12b-1 fees, as applicable, it is entitled to from any
class or series of the Trust or voluntarily reimbursing expenses of any class or
series of the Trust, including the Funds set forth in Schedule A, as the Adviser
or the Distributor, as applicable, in its discretion deems reasonable or
appropriate. Any such voluntary waiver or voluntary expense reimbursement may be
modified or terminated by the Adviser or the Distributor, as applicable, at any
time in its sole and absolute discretion without the approval of the Trust's
Board of Trustees.
2. Term; Termination.
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2.1 Term. The term ("Term") of the Operating Expense Limit with respect to
a Fund shall begin on the date hereof (or the date on which a Fund is added to
Schedule A, if later) and end after the close of business on April 30th of the
immediately succeeding calendar year (or such other date as agreed to in writing
between the Adviser, the Distributor and the Trust with respect to a Fund)
unless the Fee Waiver is earlier terminated in accordance with Section 2.2. The
Term of the Fee Waiver with respect to a Fund may be continued from year to year
thereafter provided that each such continuance is specifically approved by the
Adviser, the Distributor and the Trust with respect to such Fund (including with
respect to the Trust, by a majority of the Trustees of the Trust who are not
"interested persons," as defined in the 1940 Act, of the Adviser and the
Distributor). None of the Adviser, the Distributor or the Trust shall be
obligated to extend the Fee Waiver with respect to any Fund.
2.2 Termination. The Operating Expense Limit with respect to a Fund shall
terminate upon:
(i) the first May 1st after the failure of such Operating Expense
Limit to be continued in accordance with Section 2.1;
(ii) the termination of such Fund's Advisory Agreement or
Distribution Plan, unless otherwise agreed by the Adviser, the Distributor
and the Trust; and
(iii) a writing duly executed by the Adviser, the Distributor and the
Trust with respect to such Fund terminating the Operating Expense Limit.
3. Miscellaneous.
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3.1 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.
3.2 Interpretation. Nothing herein contained shall be deemed to require the
Trust to take any action contrary to the Trust's Declaration of Trust or Bylaws,
or any applicable statutory or regulatory requirement to which it is subject or
by which it is bound, or to relieve or deprive the Trust's Board of Trustees of
its responsibility for and control of the conduct of the affairs of the Trust.
3.3 Limitation of Liability. The obligations and expenses incurred,
contracted for or otherwise existing with respect to a Fund shall be enforced
against the assets of such Fund or applicable class thereof and not against the
assets of any other class or any other Fund or series of the Trust. It is
understood and expressly stipulated that neither the shareholders of a Fund nor
the Trustees of the Trust shall be personally liable hereunder.
3.4 Definitions. Any question of interpretation of any term or provision of
this Agreement, including but not limited to the computations of average daily
net assets or of any Advisory Fee or Rule 12b-1 fee, and the allocation of
expenses, having a counterpart in or otherwise derived from the terms and
provisions of the Advisory Agreement, the Rule 12b-1 Plan or the 1940 Act, shall
have the same meaning as and be resolved by reference to the Advisory Agreement
or Rule 12b-1 Plan or the 1940 Act and to interpretations thereof, if any, by
the United States Courts or in the absence of any controlling decision of any
such Court, by rules, regulations or orders of the Securities and Exchange
Commission ("SEC") issued pursuant to the 1940 Act. In addition, if the effect
of a requirement of the 1940 Act reflected in any provision of this Agreement is
revised by rule, regulation or order of the SEC, that provision will be deemed
to incorporate the effect of that rule, regulation or order. Otherwise the
provisions of this Agreement will be interpreted in accordance with the
substantive laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective officers as of the day and year first above written.
XXXXXX INVESTORS' SERVICE, INC.
By:/s/ Xxxxxx Xxxxxxxx
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Name:Xxxxxx Xxxxxxxx
Title:Vice President
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XXXXXX INVESTORS' SERVICE DISTRIBUTORS, INC.
By:/s/A. M. Xxxxx III
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Name:A. M. Xxxxx III
Title:President
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THE XXXXXX MANAGED INCOME TRUST
By:/s/Xxxxx X. Xxxxxxx
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Name:Xxxxx X. Xxxxxxx
Title:President
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SCHEDULE A
OPERATING EXPENSE LIMITS
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This Agreement relates to the following Fund(s):
Operating Expense Limit
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(as a percentage of average
daily net assets)
Xxxxxx Current Income Fund 1.00%
Xxxxxx Total Return Bond Fund 0.95%
