Exhibit 4
EXPENSE REIMBURSEMENT AGREEMENT
Agreement made this ______ day of 1997 between
Alamo Growth Fund, Inc., a Maryland corporation (the "Fund"), and Alamo
Advisers, Inc., a Texas corporation (the "Adviser").
W I T N E S S E T H:
WHEREAS the Fund proposes to enter into an Investment Advisory
Agreement (the "Advisory Agreement") with the Adviser simultaneously with the
execution of this Agreement;
WHEREAS it would be mutually advantageous to the Fund and the Adviser
to limit the expenses borne by the Fund during its start-up; and
WHEREAS the Fund desires to reimburse the Adviser for any expenses of
the Fund borne by the Adviser.
NOW, THEREFORE, the Fund and the Adviser agree as follows:
1. Definitions.
a. "Average Net Assets" of the Fund for any year shall mean
the average of the net asset values of the Fund determined as of the close
of each business day of such year.
b. "Expense Ratio" shall mean, for any year, the ratio of the
Fund's Operating Expenses to the Average Net Assets of the Fund for that
year.
c. "Operating Expenses" shall mean the total expenses of the
Fund, including operating expenses, such as office expenses, accounting
fees, legal fees, custodial fees and employment expenses; advisory fee, as
provided in the Investment Advisory Agreement; registration expenses, such
as the cost of registration of the Fund with the Securities and Exchange
Commission and with the various state agencies; and miscellaneous expenses,
such as printing costs, insurance premiums and all other expenses of
operation of the Fund, excluding only brokerage commissions, interest and
taxes.
2. Expense Limitation. If for any fiscal year of the Fund ending
before December 31, 1999, the Expense Ratio of the Fund exceeds 2.5 percent,
then the Adviser will reimburse the Fund an amount which will cause the Expense
Ratio for such fiscal year not to exceed 2.5 percent. Reimbursement may be made
by waiving the Adviser's advisory fee, payment to the Fund or both, at the
option of the Adviser. All such reimbursements, regardless of form, shall be
treated as non-interest bearing advances from the Adviser to the Fund, to be
repaid by the Fund as provided below. The obligation to make such repayment
shall survive the termination of this Agreement.
3. Repayment of Expense Reimbursement. When the Expense Ratio of
the Fund is less than 2.0 percent, the Fund shall repay the Adviser for any
amounts advanced by the Adviser to reduce the Fund's Expense Ratio; provided,
however, that such repayments shall be limited in any year to an amount that
will not cause the Fund's Expense Ratio to exceed 2.0 percent.
4. Termination. This Agreement may be terminated at any time,
without payment of any penalty, by the board of directors of the Fund or by a
vote of the majority of the outstanding voting securities of the Fund upon
giving sixty (60) days' written notice to the Adviser. This Agreement may be
terminated by the Adviser at any time upon the giving of 60 days' written notice
to the Fund. This Agreement shall automatically terminate upon the termination
of the Advisory Agreement.
5. Assignment. This Agreement may not be assigned by either party
without the prior written consent of the other party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on the day first above written.
ALAMO ADVISERS, INC.
By: By:
Secretary President
ALAMO GROWTH FUND, INC.
By: By:
Secretary President
