FEE WAIVER AND EXPENSE CAP AGREEMENT
Xxxx Xxxxx Fund Adviser, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Xxxx Xxxxx Xxxxxxx Street Trust, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Re: Batterymarch U.S. Small Capitalization Equity Portfolio Fee Waiver and
Expense Cap Agreement
Ladies and Gentlemen:
Xxxx Xxxxx Fund Adviser, Inc. ("LMFA") hereby agrees that it or an
affiliate will waive its compensation (and, to the extent necessary, bear other
expenses) through July 31, 2008, to the extent that expenses of the Batterymarch
U.S. Small Capitalization Equity Portfolio (the "Fund") (exclusive of taxes,
interest, brokerage and extraordinary expenses) would exceed an annual rate of
0.95% for Institutional Class and 1.20% for Financial Intermediary Class.
For purposes of determining any such waiver or expense reimbursement,
expenses of a class of the Fund shall not reflect the application of any
custodial, transfer agency or other credits or expense offset arrangements that
may reduce the portfolio's expenses or arrangements with any broker-dealer to
apply a portion of the commission or xxxx-up on any portfolio trade to the
payment of any of the portfolio's other expenses.
If on any day during which LMFA is the investment manager, the
estimated annualized operating expenses of the Fund for that day are less than
the operating expense limit described above, LMFA shall be entitled to
reimbursement by the Fund of the investment management fees waived and other
payments remitted by LMFA on behalf of the Fund pursuant to this expense
limitation (the "Reimbursement Amount") during any of the previous thirty-six
(36) months, to the extent that the Fund's annualized operating expenses plus
the amount so reimbursed is less than or equals, for such day, the operating
expense limit provided for above, provided further that such amount paid to LMFA
will in no event exceed the total Reimbursement Amount and will not include any
amounts previously reimbursed.
In addition, Batterymarch Financial Management, Inc. ("Batterymarch")
hereby agrees with LMFA and the Fund that it will waive its compensation or bear
expenses with respect to the Fund in proportion to the portion of the management
fee that it receives from LMFA prior to waivers. As an illustration, if
Batterymarch receives 90% of the total management fee paid by the Fund, then
Batterymarch will bear 90% of any waiver of compensation or expense
reimbursement.
In the event the Fund is reorganized, merged or combined with another
fund, the parties will consider the impact that such transaction will have on
their respective obligations hereunder, including without limitation LMFA's
obligation to waive its compensation and any potential obligation the Fund may
have to reimburse LMFA for any Reimbursement Amounts.
We understand that you will rely on this agreement in accruing the
Fund's expenses for purposes of calculating its net asset value per share, and
for other purposes, including the preparation and filing of the Securities and
Exchange Commission Form N-1A Registration Statement for the Fund, and we
expressly permit you to do so.
Xxxx Xxxxx Fund Adviser, Inc. Batterymarch Financial Management, Inc.
By: /s/ Xxxxx X. Xxxxxxxxx By: /s/ Xxxxxxx Xxxxx
-------------------------------- ------------------------------------
Xxxxx X. Xxxxxxxxx Xxxxxxx Xxxxx
Vice President and Chief President and Chief Financial Officer
Financial Officer
Agreed and Accepted:
Batterymarch U.S. Small Capitalization Equity Portfolio
By: /s/ Xxxxx X. Karpinskii
-----------------------
Xxxxx X. Xxxxxxxxx
Vice President and Chief
Financial Officer
