Exhibit (h)(3)
EXPENSE LIMITATION AGREEMENT
This EXPENSE LIMITATION AGREEMENT is made as of the 25th day of April,
2003 by and among BT ADVISOR FUNDS, a Massachusetts Business trust (the "Trust")
and BT INVESTMENT PORTFOLIOS, a New York trust (the "Portfolio Trust"), DEUTSCHE
ASSET MANAGEMENT, INC., a Delaware corporation (the "Advisor"), and INVESTMENT
COMPANY CAPITAL CORPORATION, a Maryland corporation (the "Administrator"), with
respect to the following:
WHEREAS, the Advisor serves as the Portfolio Trust's Investment Advisor
pursuant to an Investment Advisory Agreement dated April 25, 2003, and the
Administrator serves as the Trust's and Portfolio Trusts' Administrator pursuant
to Administration and Services Agreements dated July 1, 2001 (collectively, the
"Agreements").
NOW, in consideration of the mutual covenants herein contained and
other good and valuable consideration, the receipt whereof is hereby
acknowledged, the parties hereto agree as follows:
1. The Advisor and Administrator agree to waive their fees and/or
reimburse expenses to the extent necessary so that the
ordinary annual operating expenses for each of the Trust's
series or classes set forth on Exhibit A, as may be amended
from time to time, (each a "Fund") do not exceed the
percentage of average daily net assets set forth on Exhibit A
for an initial two year period from the date of this contract
(the "Initial Period") and thereafter as set forth in Item 2.
For the purposes of this Agreement, ordinary operating
expenses for a Fund generally consist of costs not
specifically borne by the Advisor, Administrator or a Fund's
principal underwriter, including investment advisory fees,
administration and services fees, fees for necessary
professional services, amortization of organizational expenses
and costs associated with regulatory compliance and
maintaining legal existence and shareholder relations, but
excluding: (a) transactions costs (such as brokerage
commissions and dealer and underwriter spreads); (b) interest
charges on fund borrowings; (c) taxes; (d) litigation and
indemnification costs; and (e) extraordinary expenses.
Extraordinary expenses are those that are unusual or expected
to recur only infrequently, including, but not limited to (i)
expenses of the reorganization, restructuring or merger of a
Fund or class or the acquisition of all or substantially all
of the assets of another fund or class; (ii) expenses of
holding, and soliciting proxies for, a meeting of shareholders
of a Fund or class (except to the extent relating to routine
items such as the election of trustees or the approval of
independent public accountants); and (iii) expenses of
converting to a new custodian, transfer agent or other service
provider.
2. This Agreement, after the Initial Period shall continue in
effect as to each Fund for successive 16 month periods from
such Fund's fiscal year end, provided such continuance is
specifically approved at least annually by the vote of a
majority of the Board of Trustees of the Trust and the
Portfolio Trust. Upon the termination of any of the
Agreements, this Agreement shall automatically terminate with
respect to the affected Fund.
3. Any question of interpretation of any term or provision of
this Agreement having a counterpart in or otherwise derived
from a term or provision of the Investment Company Act of
1940, as amended (the "1940 Act") shall be resolved by
reference to such term or provision of 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 said Act. In
addition, where 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, such provision shall be
deemed to incorporate the effect of such rule, regulation or
order. Otherwise the provisions of this Agreement shall be
interpreted in accordance with the laws of Massachusetts.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers as of the day and year first
above written.
BT ADVISOR FUNDS, and
BT INVESTMENT PORTFOLIOS
Attest: By:
------------------------------------ -------------------------------
Name: Name:
Title:
DEUTSCHE ASSET MANAGEMENT, INC.
Attest: By:
----------------------------------- -------------------------------
Name: Name:
Title:
INVESTMENT COMPANY CAPITAL CORPORATION
Attest: By:
----------------------------------- -------------------------------
Name: Name:
Title:
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Exhibit A
Ordinary Fund Operating Expenses
(as a percentage of average
Fund daily net assets)
EAFE Equity Index Fund Premier 0.40%
U.S. Bond Index Fund Premier 0.15%
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