MUTUAL FUND SERIES TRUST OPERATING EXPENSES LIMITATION AND SECURITY AGREEMENT KF GRIFFIN BLUE CHIP AND COVERED CALL FUND
MUTUAL FUND SERIES TRUST
OPERATING EXPENSES LIMITATION
AND SECURITY AGREEMENT
XX XXXXXXX BLUE CHIP AND COVERED CALL FUND
THIS OPERATING EXPENSES LIMITATION AND SECURITY AGREEMENT (the “Agreement”) is effective as of September 30, 2013, by and between MUTUAL FUND SERIES TRUST, an Ohio business trust (the “Trust”), on behalf of the XX Xxxxxxx Blue Chip and Covered Call Fund (the “Fund”), a series of the Trust, and Xxxxxxxxxxxx, Fields & Co., L.L.C. (the “Adviser”), the adviser of the Fund.
WITNESSETH:
WHEREAS, the Adviser renders advice and services to the Fund pursuant to the terms and provisions of a Management Agreement between the Trust and the Adviser dated September 30, 2013 (the “Management Agreement”); and
WHEREAS, the Fund is responsible for, and has assumed the obligation for, payment of certain expenses pursuant to the Management Agreement that have not been assumed by the Adviser; and
WHEREAS, the Adviser desires to limit the Fund’s Operating Expenses (as that term is defined in Paragraph 2 of this Agreement) pursuant to the terms and provisions of this Agreement, and the Trust (on behalf of the Fund) desires to allow the Adviser to implement those limits; and
WHEREAS, as a condition to the continuation of its contractual relationship with the Adviser, the Trust has required that the Adviser grant to the Trust a continuing security interest in and to designated accounts established with Gemini Fund Services or its successor and assigns (the “Securities Intermediary”);
NOW THEREFORE, in consideration of the covenants and the mutual promises hereinafter set forth, the parties, intending to be legally bound hereby, mutually agree as follows:
1.
Limit on Operating Expenses. The Adviser hereby agrees to limit the Fund’s current Operating Expenses to an annual rate, expressed as a percentage of the Fund’s average annual net assets, to the amounts listed in Appendix A (the “Annual Limit”). In the event that the current Operating Expenses of the Fund, as accrued each month, exceed the Annual Limit, the Adviser will pay to the Fund, on a monthly basis, the excess expense within the first ten business days of the month following the month in which such Operating Expenses were incurred (each payment, a “Fund Reimbursement Payment”).
2.
Definition. For purposes of this Agreement, the term “Operating Expenses” with respect to the 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 detailed in the Management Agreement and other expenses described in the Management Agreement, but does not include any front-end or contingent deferred loads, any Rule 12b-l fees, taxes, leverage interest, brokerage commissions, expenses incurred in connection with any merger or reorganization, dividend expense on securities sold short, underlying fund fees and expenses or extraordinary expenses such as litigation.
3.
Reimbursement of Fees and Expenses. The Adviser retains its right to receive reimbursement of any excess expense payments paid by it pursuant to this Agreement from the Fund, at such time or times as the Adviser may determine in its sole discretion, for any of the expenses advanced by the Adviser, which the Fund is obligated to pay, provided the repayment is made within the three fiscal years following the fiscal year in which the expenses were incurred, and the Fund is able to make the repayment without exceeding its current expense limitations and the repayment is approved by the Board of Trustees, such approval not to be unreasonably withheld or delayed.
4.
Security Interest. The Adviser, for value received, hereby pledges, assigns, sets over and grants to the Trust a continuing security interest in and to the following: Account No. established with the Securities Intermediary (the “Collateral Account”), including any replacement account established with any successor, together with all dividends, interest, stock-splits, distributions, profits and all cash and non-cash proceeds thereof and any and all other rights as may now or hereafter derive or accrue there from (collectively, the “Collateral”) to secure the payment of any required Fund Reimbursement Payment or Liquidation Expenses (as defined in Paragraph 5 of this Agreement) for the Fund. For so long as this Agreement is in effect, any redemptions of Collateral shall require the approval of the Board of Trustees of the Trust (the “Board”).
5.
Collateral Event. In the event that either (a) the Adviser does not make a Fund Reimbursement Payment due in connection with a particular calendar month by the tenth business day of the following calendar month or (b) the Board enacts a resolution calling for the liquidation of a Fund (either (a) or (b), a “Collateral Event”), then, during the existence of such Collateral Event, the Board shall have absolute discretion to redeem any shares or other Collateral held in the Collateral Account and utilize the proceeds from such redemptions or such other Collateral to make any required Fund Reimbursement Payment, or to cover any costs or expenses which the Board, in its sole and absolute discretion, estimates will be required in connection with the liquidation of the Fund (the “Liquidation Expenses”). Pursuant to the terms of Paragraph 6 of this Agreement, upon authorization from the Board, no further instructions shall be required from the Adviser for the Securities Intermediary to transfer any Collateral from the Collateral Account to any Fund. The Adviser acknowledges that in the event the Collateral available in the Collateral Account is insufficient to cover the full cost of any Fund Reimbursement Payment or Liquidation Expenses, any Fund shall retain the right to receive from the Adviser any costs properly due and owing in excess of the value of the Collateral.
6.
Control Agreement; Appointment of Attorney-in-Fact. The Adviser agrees to execute and deliver to the Board, in form and substance satisfactory to the Board, a Control Agreement by, between and among the Trust, the Adviser and the Securities Intermediary pursuant to and consistent with Section 8-106(c) of the New York Uniform Commercial Code. Without limiting the foregoing, the Adviser hereby irrevocably constitutes and appoints the Trust, through any officer thereof, with full power of substitution, as Adviser's true and lawful Attorney-in-Fact, with full irrevocable power and authority in place and stead of the Adviser and in the name of the Adviser or in the Trust's own name, from time to time, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate actions and to execute and deliver any and all documents and instruments which the Board deems necessary to accomplish the purpose of this Agreement, which power of attorney is coupled with an interest and shall be irrevocable; provided that, the Trust shall only exercise such power of attorney during the existence of a Collateral Event. Without limiting the generality of the foregoing, the Trust shall have the right and power during the existence of any Collateral Event to receive, endorse and collect all checks and other orders for the payment of money made payable to the Adviser representing any interest payment, dividend, or other distribution payable in respect of/to the Collateral, or any part thereof, and to give full discharge for the same. During the existence of such Collateral Event, the Board, in its discretion, may direct the Adviser or Adviser's agent to transfer the Collateral in certificated or uncertificated form into the name and account of the Trust or its designee.
7.
Covenants. So long as this Agreement shall remain in effect, the Adviser represents and covenants as follows:
(a)
No later than October 1, 2013, or such later date that the Fund commences operations or as may otherwise be agreed upon by the parties, the Adviser shall invest at least $25,000.00 dollars in the Collateral Account.
(b)
To the fullest extent permitted by law, the Adviser agrees not to challenge any action taken by the Board or the Trust in executing the terms of this Agreement.
8.
Term. This Agreement shall become effective on the date specified herein and shall remain in effect until at least January 31, 2015, unless sooner terminated as provided in Paragraph 9 of this Agreement.
9.
Termination. This Agreement may be terminated at any time, and without payment of any penalty, by the Board, on behalf of one or more Funds, upon sixty (60) days’ written notice to the Adviser. This Agreement may not be terminated by the Adviser without the consent of the Board. This Agreement will automatically terminate, with respect to a Fund listed in Appendix A if the Management Agreement for that Fund is terminated, with such termination effective upon the effective date of Management Agreement’s termination for the Fund.
10.
Assignment. This Agreement and all rights and obligations hereunder may not be assigned without the written consent of the other party.
11.
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 this Agreement shall not be affected thereby.
12.
Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York without giving effect to the conflict of laws principles thereof; provided that nothing herein shall be construed to preempt, or to be inconsistent with, any federal law, regulation or rule, including the Investment Company Act of 1940 and the Investment Advisers Act of 1940 and any rules and regulations promulgated thereunder.
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.
XXXXXXXXXXXX, FIELDS & CO., L.L.C. | |
on behalf of the Fund |
|
|
|
By: /s/Xxxxx Xxxxxxxx | By: /s/Xxxxx X. Xxxxxx |
Name: Xxxxx Xxxxxxxx | Name: Xxxxx X. Xxxxxx |
Title: Trustee | Title: President |
Appendix A
Fund | Operating Expense Limit |
XX Xxxxxxx Blue Chip and Covered Call Fund | 1.50% |
|
|
