Exhibit (13)(f)
EXPENSE LIMITATION AGREEMENT
THE XXXXXX MANAGED INCOME TRUST
EXPENSE LIMITATION AGREEMENT, effective as of October 6, 2006 by and
among Xxxxxx Investors' Service, Inc. (the "Adviser"), Xxxxxx Investors' Service
Distributors, Inc. (the "Distributor") and The Xxxxxx Managed Income Trust (the
"Trust"), a Massachusetts business trust, on behalf of each series of the Trust
set forth in Schedule A attached hereto (each, a "Fund").
WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management company, and is
organized as a business trust under the laws of the Commonwealth of
Massachusetts, and each Fund is a series of the Trust;
WHEREAS, the Adviser and the Trust, on behalf of each Fund, are parties
to investment advisory agreements (the "Advisory Agreements"), pursuant to which
the Adviser provides investment advisory services to each Fund in consideration
of compensation based on the value of the average daily net assets of such Fund
(the "Advisory Fee"); and
WHEREAS, the Distributor and the Trust, on behalf of each Fund, are
parties to Rule 12b-1 Plans pursuant to which the Distributor engages in
marketing and distribution activities on behalf of each Fund in consideration of
compensation based on the value of the average daily net assets of such Fund;
and
WHEREAS, the Adviser and the Distributor have voluntarily determined
that it is appropriate and in the best interests of each Fund and its
shareholders to maintain the expenses of each Fund set forth in Schedule A at
specified levels. The Trust, the Adviser and the Distributor therefore have
entered into this Expense Limitation Agreement (the "Agreement") in order to
maintain the expense ratio of each Fund no higher than the level specified in
Schedule A attached hereto (the "Operating Expense Limit") for the period
beginning on the date hereof on the terms and conditions set forth in this
Agreement.
NOW THEREFORE, in consideration of the mutual covenants set forth
herein and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. Expense Limitation.
1.1 Contractual Expense Limit. During the Term (as defined in Section 2.1), the
Adviser and the Distributor each agrees to waive all or a portion of the
Advisory Fee and amounts, if any, payable pursuant to plans adopted in
accordance with Rule 12b-1 under the 1940 Act to the extent necessary so that
the total expenses of every character incurred by the applicable Fund (excluding
interest, taxes, brokerage commissions, other expenditures which are capitalized
in accordance with generally accepted accounting principles, and other
extraordinary expenses not incurred in the ordinary course of such Fund's
business (i.e., litigation)), and after giving affect to any custodial fee
reimbursement or waiver ("Operating Expenses") exceed the Operating Expense
Limit. During the Term, to the extent that a Fund's Operating Expenses in any
fiscal year (after waiver of the Advisory Fees and Rule 12b-1 fees) exceed the
Operating Expense Limit, such excess amount (the "Excess Amount") shall be the
liability of the Adviser. The parties agree that to the extent that a Fund's
Operating Expenses in any fiscal year do not exceed the Operating Expense Limit,
the Advisory Fee and Rule 12b-1 fees shall be payable by such Fund in the
following order:
o first, the Adviser shall be entitled to receive the Advisory Fee up to the
amount payable under the Advisory Agreement; and
o thereafter, the Distributor shall be entitled to receive the Rule
12b-1 fee up to the amount payable under such Fund's Rule 12b-1 Plan.
1.2 Operating Expense Limit. The Operating Expense Limit in any year with
respect to each Fund shall be the amount from time to time specified in Schedule
A based on a percentage of the average daily net assets of such Fund.
1.3 Method of Computation. To determine the Adviser's and the Distributor's
obligations hereunder, each Fund's Operating Expenses shall be annualized as of
the last day of each month. If a Fund's annualized Operating Expenses for any
month exceed such Fund's Operating Expense Limit, the Adviser and/or the
Distributor shall waive or reduce the Advisory Fees and/or Rule 12b-1 fees for
such month by an amount and, if necessary, the Adviser shall remit an amount to
the Fund sufficient to reduce such Fund's annualized Operating Expenses to an
amount no higher than such Fund's Operating Expense Limit; provided, however,
that any waiver or reduction of the Advisory Fees shall be applied equally
across all classes, if any, of the Fund.
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 and Rule 12b-1
fees waived or reduced and other payments remitted by the Adviser to the Fund
with respect to the previous fiscal year shall equal the Excess Amount.
1.5 Voluntary Fee Waiver/Expense Reimbursement. Nothing herein shall preclude
the Adviser and/or the Distributor from either voluntarily waiving Advisory Fees
or Rule 12b-1 fees, as applicable, it is entitled to from any class or series of
the Trust or voluntarily reimbursing expenses of any class or series of the
Trust, including the Funds set forth in Schedule A, as the Adviser or the
Distributor, as applicable, in its discretion deems reasonable or appropriate.
Any such voluntary waiver or voluntary expense reimbursement may be modified or
terminated by the Adviser or the Distributor, as applicable, at any time in its
sole and absolute discretion without the approval of the Trust's Board of
Trustees.
2. Term; Termination.
2.1 Term. The term ("Term") of the Operating Expense Limit with respect to a
Fund shall begin on the date hereof (or the date on which a Fund is added to
Schedule A, if later) and end after the close of business on April 30th of the
immediately succeeding calendar year (or such other date as agreed to in writing
between the Adviser, the Distributor and the Trust with respect to a Fund)
unless the Fee Waiver is earlier terminated in accordance with Section 2.2;
provided, however, that with respect to the Xxxxxx Current Income Fund, the
initial Term shall end on April 30, 2008. The Term of the Fee Waiver with
respect to a Fund may be continued from year to year thereafter provided that
each such continuance is specifically approved by the Adviser, the Distributor
and the Trust with respect to such Fund (including with respect to the Trust, by
a majority of the Trustees of the Trust who are not "interested persons," as
defined in the 1940 Act, of the Adviser and the Distributor). None of the
Adviser, the Distributor or the Trust shall be obligated to extend the Fee
Waiver with respect to any Fund.
2.2 Termination. The Operating Expense Limit with respect to a Fund shall
terminate upon:
(i) the first May 1st after the failure of such Operating Expense Limit
to be continued in accordance with Section 2.1;
(ii) the termination of such Fund's Advisory Agreement or Distribution
Plan, unless otherwise agreed by the Adviser, the Distributor and
the Trust; and
(iii) a writing duly executed by the Adviser, the Distributor
and the Trust with respect to such Fund terminating the
Operating Expense Limit.
3. Miscellaneous.
3.1 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.
3.2 Interpretation. Nothing herein contained shall be deemed to require the
Trust to take any action contrary to the Trust's Declaration of Trust or Bylaws,
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.
3.3 Limitation of Liability. The obligations and expenses incurred, contracted
for or otherwise existing with respect to a Fund shall be enforced against the
assets of such Fund or applicable class thereof and not against the assets of
any other class or any other Fund or series of the Trust. It is understood and
expressly stipulated that neither the shareholders of a Fund nor the Trustees of
the Trust shall be personally liable hereunder.
3.4 Definitions. Any question of interpretation of any term or provision of this
Agreement, including but not limited to the computations of average daily net
assets or of any Advisory Fee or Rule 12b-1 fee, and the allocation of expenses,
having a counterpart in or otherwise derived from the terms and provisions of
the Advisory Agreement, the Rule 12b-1 Plan or the 1940 Act, shall have the same
meaning as and be resolved by reference to the Advisory Agreement or Rule 12b-1
Plan or 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 the 1940 Act. In addition, if 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, that provision will be deemed
to incorporate the effect of that rule, regulation or order. Otherwise the
provisions of this Agreement will be interpreted in accordance with the
substantive laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
by their respective officers as of the day and year first above written.
XXXXXX INVESTORS' SERVICE, INC.
By:/s/ Xxxxx . Xxxxxxx
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Name:Xxxxx X. Xxxxxxx
Title:Chief Executive Officer
XXXXXX INVESTORS' SERVICE DISTRIBUTORS, INC.
By:A. M. Xxxxx III
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Name:A. M. Xxxxx III
Title:President
THE XXXXXX MANAGED INCOME TRUST
By:Xxxxxx Xxxxxxxx
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Name:Xxxxxx Xxxxxxxx
Title:Vice President
SCHEDULE A
OPERATING EXPENSE LIMITS
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This Agreement relates to the following Fund(s):
Operating Expense Limit
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(as a percentage of average
daily net assets)
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Xxxxxx Current Income Fund 0.95%
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Xxxxxx U. S. Government Near Term Fund 0.95%
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