EXPENSE LIMITATION AGREEMENT
USALLIANZ VARIABLE INSURANCE PRODUCTS TRUST
EXPENSE LIMITATION AGREEMENT, effective as of May 1, 2004, by and
between USALLIANZ ADVISERS, LLC (the "Investment Adviser") and USALLIANZ
VARIABLE INSURANCE PRODUCTS TRUST (the "Trust"), a Delaware business trust, on
behalf of each of the funds, listed on Exhibit A (each, a "Fund").
WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open end-diversified management company
of the series type, and each Fund is a series of the Trust; and
WHEREAS, the Trust and the Investment Adviser have entered into an
Investment Management Agreement (the "Management Agreement"), pursuant to which
the Investment Adviser will render investment advisory services to the Fund for
compensation based on the value of the average daily net assets of the Fund; and
WHEREAS, the Trust and the Investment Adviser have determined that it
is appropriate and in the best interests of the Fund and its shareholders to
maintain the expenses of the Fund at a level below to which the Fund would
normally be subject during its start-up period.
NOW, THEREFORE, the parties hereto agree as follows:
1. Expense Limitation.
1.1 Applicable Expense Limit. To the extent that the aggregate expenses of
every character incurred by the Fund in any fiscal year, including but not
limited to investment advisory fees of the Investment Adviser (but
excluding interest, taxes, brokerage commissions and other expenditures
which are capitalized in accordance with generally accepted accounting
principles and other extraordinary expenses not incurred in the ordinary
course of the Fund's business) ("Fund Operating Expenses"), exceed the
Operating Expense Limit, as defined in Section 1.2 below, such excess
amount (the "Excess Amount") shall be the liability of the Investment
Adviser.
1.2 Operating Expense Limit. The Operating Expense Limit for each Fund's full
year of operations shall be a percentage of such Fund's average daily net
assets as described in Exhibit A or, in each subsequent fiscal year
following the end of the first year of operations, shall be such other rate
as may be agreed to in writing by the parties.
1.3 Method of Computation. To determine the Investment Adviser's liability with
respect to the Excess Amount, each month the Fund Operating Expenses shall
be annualized as of the last day of the month for each Fund. If the
annualized Fund Operating Expenses for any month exceed the Operating
Expense Limit, the Investment Adviser shall first waive or reduce its
advisory fee for such month by an amount sufficient to reduce the
annualized Fund Operating Expenses to an amount no higher than the
Operating Expense Limit. If the amount of the waived or reduced advisory
fee for any such month is insufficient to pay the Excess Amount, the
Investment Adviser shall also remit to a Fund an amount that, together with
the waived or reduced advisory fee, is sufficient to pay such Excess
Amount.
1.4 Year-End Adjustment. If necessary, on or before the last day of the first
month of each fiscal year, an adjustment payment shall be made by the
appropriate party in order that the amount of the advisory fees waived or
reduced and other payments remitted by the Investment Adviser to a Fund
with respect to the previous fiscal year shall equal the Excess Amount.
2. Reimbursement of Fee Waivers and Expense Reimbursements.
2.1 Reimbursement. If in any fiscal year in which the Investment Advisory
Agreement is still in effect, the estimated aggregate Fund Operating
Expenses for the fiscal year are less than the Operating Expense Limit for
that year, the Investment Adviser shall be entitled to reimbursement by a
Fund, in whole or in part as provided below, of the advisory fees waived or
reduced and other payments remitted by the Investment Adviser and all other
payments remitted by the Investment Adviser to a Fund, pursuant to Section
1 hereof, during any of the previous three (3) fiscal years less any
reimbursement previously paid by such Fund to the Investment Adviser,
pursuant to Sections 2.2 hereof, with respect to such waivers, reductions
and payments. The Reimbursement Amount shall not include any additional
charges or fees whatsoever, including, e.g., interest accruable on the
Reimbursement Amount.
2.2 Method of Computation. To determine a Fund's payments, if any, to reimburse
the Investment Adviser for all or any portion of the Reimbursement Amount,
each month the Fund Operating Expenses for each Fund shall be annualized as
of the last day of the month. If the annualized Fund Operating Expenses for
any month are less than the Operating Expense Limit, a Fund, only with the
prior approval of the Board, shall pay to the Investment Adviser an amount
sufficient to increase the annualized Fund Operating Expenses to an amount
no greater than the Operating Expense Limit, provided that such amount paid
to the Investment Adviser will in no event exceed the total Reimbursement
Amount. If the annualized Fund Operating Expenses for a Fund are greater
than the Operating Expense Limit for one or more months in a quarter and
less the remaining month(s), the calculation described in this section will
be made on a monthly basis and the net amount of the monthly calculations
will be reported to the Board. In no event will a Fund be obligated to pay
any fees waived or expenses reimbursed by the Investment Adviser with
respect to the other Funds of the Trust.
2.3 Year-End Adjustment. If necessary, on or before the last day of the first
month of each fiscal year, an adjustment payment shall be made by the
appropriate party in order that the actual Fund Operating Expenses for the
prior fiscal year (including any reimbursement payments hereunder with
respect to such fiscal year) do not exceed the Operating Expense Limit.
3. Term and Termination of Agreement.
This Agreement shall continue in effect for a period of one year from the
date of its execution and from year to year thereafter provided such
continuance is specifically approved by a majority of the trustees of the
Trust who (i) are not "interested persons" of the Trust or any other party
to this Agreement, as defined in the 1940 Act, and (ii) have no direct or
indirect financial interest in the operation of this Agreement
("Non-Interested Trustees"), provided however, that the reimbursements
described in Section 2 will not continue for more than three years after a
Fund's commencement of operations. The Adviser may upon 30 days' written
notice to the Trust terminate, in whole or in part, its obligation under
Section 1 to reduce its fees with respect to a Fund in any period no
earlier than the end of the first year of operations and following the date
specified in such notice (or change the percentage specified in Section 1),
but no such change shall affect the obligation (including the amount of the
obligation) of a Fund to repay any Excess Amounts eligible for repayment
pursuant to this agreement.
4. Miscellaneous.
4.1 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.
4.2 Interpretation. Nothing herein contained shall be deemed to require the
Trust or a Fund to take any action contrary to the Trust's Agreement and
Declaration of Trust or By-Laws, 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 or each Fund.
4.3 Definitions. Any question of interpretation of any term or provision of
this Agreement, including but not limited to the investment advisory fee,
the computations of net asset values, and the allocation of expenses,
having a counterpart in or otherwise derived from the terms and provisions
of the Management Agreement or the 1940 Act, shall have the same meaning as
and be resolved by reference to such Management Agreement or the 1940 Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
USALLIANZ VARIABLE INSURANCE PRODUCTS TRUST
By: ____________________________________
Xxxxxxx Xxxxxx
Vice President
USALLIANZ ADVISERS, LLC
By: ____________________________________
Xxxxxxxxxxx Xxxxxxxxx
President
EXHIBIT A
to the Expense Limitation Agreement Between
USALLIANZ VARIABLE INSURANCE PRODUCTS TRUST
and
USALLIANZ ADVISERS, LLC
May 1, 2004
Name of Fund Expense Limitation
USAZ AIM Basic Value Fund 1.20%
USAZ AIM Blue Chip Fund 1.20%
USAZ AIM Dent Demographic Trends Fund 1.30%
USAZ AIM International Equity Fund 1.45%
USAZ Xxxxx NY Venture Fund 1.20%
USAZ Dreyfus Founders Growth and Income Fund 1.20%
USAZ Dreyfus Premier Small Cap Value Fund 1.35%
USAZ Xxxxxxxxxxx Emerging Growth Fund 1.35%
USAZ Xxxxxxxxxxx Emerging Technologies Fund 1.35%
USAZ Xxxxxxxxxxx Global Fund 1.45%
USAZ Xxxxxxxxxxx International Growth Fund 1.45%
USAZ Xxxxxxxxxxx Main Street Fund 1.20%
USAZ PIMCO NFJ Small Cap Value Fund 1.35%
USAZ PIMCO PEA Growth and Income Fund 1.20%
USAZ PIMCO PEA Renaissance Fund 1.30%
USAZ PIMCO PEA Value Fund 1.20%
USAZ Xxx Xxxxxx Aggressive Growth Fund 1.30%
USAZ Xxx Xxxxxx Xxxxxxxx Fund 1.20%
USAZ Xxx Xxxxxx Emerging Growth Fund 1.20%
USAZ Xxx Xxxxxx Equity and Income Fund 1.20%
USAZ Xxx Xxxxxx Global Franchise Fund 1.45%
USAZ Xxx Xxxxxx Growth and Income Fund 1.20%
USAZ Xxx Xxxxxx Growth Fund 1.30%
USAZ Money Market Fund 0.87%
