EXPENSE WAIVER AND
REIMBURSEMENT AGREEMENT
AGREEMENT made this 1st day of July, 2003, between The Merger Fund VL, a
Delaware statutory trust (the "Fund"), and Westchester Capital Management, Inc.,
a New York corporation (the "Adviser").
WHEREAS, the Adviser has entered into an Investment Advisory Agreement with
the Fund, dated July 1, 2003 pursuant to which the Adviser provides, or arranges
for the provision of, investment advisory and management services to the Fund,
and for which it is compensated based on the average daily net assets of the
Fund; and
WHEREAS, the Fund and the Adviser have determined that it is appropriate
and in the best interests of the Fund and its shareholders to limit the total
annual expenses of the Fund to 1.40%;
NOW, THEREFORE, the parties hereto agree as follows:
1. Expense Waiver and Reimbursement by the Adviser. The Adviser agrees to
reduce all or a portion of its management fee and, if necessary, to
bear certain other expenses (to the extent permitted by the Internal
Revenue Code of 1986, as amended) associated with operating the Fund
to the extent necessary to limit the annualized expenses of the Fund
to 1.40% of the Fund's average daily net assets.
2. Duty of Fund to Reimburse. Subject to approval by the Board of
Trustees of the Fund, the Fund agrees to reimburse the Adviser on a
monthly basis such reduced or waived management fees, and any expenses
borne pursuant to paragraph 1, in later periods; provided, however,
that the Fund is not obligated to reimburse any such reduced or waived
management fees, or expenses borne pursuant to paragraph 1, more than
three years after the end of the fiscal year in which the fee was
reduced or waived or the expense was borne. The Fund's Board of
Trustees shall review quarterly any reimbursement paid to the Adviser
with respect to the Fund in such quarter.
3. Assignment. No assignment of this Agreement shall be made by the
Adviser without the prior consent of the Fund.
4. Duration and Termination. This Agreement shall be effective for the
ten-year period from July 1, 2003 through July 30, 2004, and shall
continue in effect from year to year thereafter upon mutual agreement
of the Fund and the Adviser. This Agreement shall automatically
terminate upon the termination of the Investment Advisory Agreement
between the Adviser and the Fund. The termination of this Agreement in
no way relieves the Fund of its obligations under paragraph 2.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first-above written.
The Merger Fund VL Westchester Capital Management, Inc.
By: /s/ Xxxxxxxxx X. Xxxxx By: /s/ Xxxxxxxxx X. Xxxxx
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Name: Xxxxxxxxx X. Xxxxx Name: Xxxxxxxxx X. Xxxxx
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Title: President Title: President
