FORM OF
EXPENSE LIMITATION AGREEMENT
EXPENSE LIMITATION AGREEMENT, made as of the __th day of ________,
2000, between and among Pacific Global Fund, Inc., a Maryland corporation doing
business as Pacific Advisors Fund Inc. (the "Corporation"), on behalf of the
Multi-Cap Value Fund (the "Fund"), and Pacific Global Investment Management
Company, a California corporation (the "Manager").
W I T N E S S E T H:
WHEREAS, the Corporation, on behalf of the Fund, and the Investment
Manager have entered into an Investment Management Agreement, dated ________ __,
2002 (the "Management Agreement"), pursuant to which the Investment Manager will
render investment management and advisory services to the Fund for compensation
based on the value of the average daily net assets of the Fund; and
WHEREAS, the Corporation, and the Manager have determined that it is
appropriate and in the best interests of the Fund and its shareholders to
maintain Fund expenses at a level below the level 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. For each Class of the Fund, to the
extent that the Class Operating Expenses in any fiscal year exceed the
applicable Class Operating Expense Limit, such excess amount (the "Class Excess
Amount") shall be the liability of the Manager. As used herein, "Class Operating
Expenses" shall mean the aggregate expenses of every character incurred by the
Fund in any fiscal year, including but not limited to investment advisory fees
of the Manager (but excluding interest, taxes, brokerage commissions, and other
expenditures which are capitalized in accordance with generally accepted
accounting principles, other extraordinary expenses not incurred in the ordinary
course of the Fund's business, and repayments pursuant to Section 2 hereof)
attributable to such Class in accordance with the Corporation's Multi-Class Plan
pursuant to Rule 18f-3 under the 1940 Act, as such Plan is in effect from time
to time (the "Multi-Class Plan").
1.2 CLASS OPERATING EXPENSE LIMIT. The Class Operating Expense
Limit for the Fund's Class A Shares shall equal 2.50% of the average daily net
assets of the Fund attributable to Class A Shares. The Class Operating Expense
Limit for the Fund's Class C Shares shall equal 3.25% of the average daily net
assets of the Fund attributable to Class C Shares.
1.3 METHOD OF COMPUTATION.
1.3.1 FEE WAIVER. Fee Waivers will be determined separately
for each Class as follows. For each Class, as of the first day of each
fiscal quarter, the annual Class Operating Expenses for the Fund's
current fiscal year shall be estimated by adding (a) the Class
Operating Expenses actually incurred as of the first day of such
quarter to (b) an estimate of the Class Operating Expenses for the
remainder of such fiscal year. If such estimate exceeds the applicable
Class Operating Expense Limit, the Manager shall waive or reduce its
investment management fees for each month of such quarter with respect
to such Class by an amount sufficient to reduce the estimated Class
Operating Expenses for such quarter to an amount no higher than the
applicable Class Operating Expense Limit. If a waiver of all of the
investment management fees with respect to such Class for such quarter
will not reduce the estimated Class Operating Expenses below the
applicable Class Operating Expense Limit, the Manager will reimburse
the Fund, for the benefit of such Class, for the difference in
accordance with Section 1.3.2 herein.
1.3.2 EXPENSE REIMBURSEMENT. Expense reimbursement payments
will be determined separately for each Class as follows. For each
Class, as of the last day of each fiscal quarter, the Investment
Manager shall determine the actual year-to-date Class Operating
Expenses and the actual year-to-date average daily net assets of the
Fund attributable to such Class. If at that time the actual
year-to-date Class Operating Expenses (net of any fee waiver or
reduction) exceed the year-to-date portion of the applicable Class
Operating Expense Limit, the Manager shall pay to the Fund, for the
account of such Class, an amount sufficient to reduce the year-to-date
Class Operating Expenses (net of any fee waiver or reduction) to the
year-to-date portion of the applicable Class Operating Expense Limit.
Each payment due under this Section 1.3.2 shall be due no later than 30
days after the end of the relevant fiscal quarter.
1.4 YEAR-END ADJUSTMENT. Each year, if necessary, within 30 days
after the completion of the audit of the Company's financial statements for such
fiscal year, an adjustment payment shall be made by the appropriate party in
order that the amount of the investment management fees waived or reduced and
other payments remitted by the Managers to the Fund with respect to each Class
with respect to such fiscal year shall equal the applicable Class Excess Amount.
1.5 TERMINATION OF FEE WAIVER AND EXPENSE REIMBURSEMENTS. At any
time upon 90 days notice to the Fund, the Manager may terminate its obligations
to make fee waivers and pay expense reimbursement payments pursuant to Section 1
hereof.
2 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 Directors of the
Corporation who (i) are not "interested persons" of the Corporation or any other
party to this Agreement, as defined in the Act, and (ii) have no direct or
indirect financial interest in the operation of this Agreement ("Non-Interested
Directors"). Nevertheless, this Agreement may be terminated by either party
hereto, without payment of any penalty, upon 90 days' prior written notice to
the other party at its principal place of business; provided that, in the case
of termination by the Fund, such action shall be authorized by resolution of a
majority of the Non-Interested Directors of the Corporation or a vote of a
majority of the outstanding voting securities of the Fund.
3 MISCELLANEOUS.
3.1 NOTICES. Any notice under this Agreement shall be given in
writing, addressed and delivered, or mailed postpaid, (a) if to the Manager, to
Pacific Global Investment Management Company, 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx
000, Xxxxxxxx, XX 00000, and (b) if to the Corporation, at the foregoing office
of the Investment Manager.
3.2 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.
3.3 INTERPRETATION. Nothing herein contained shall be deemed to
require the Fund or the Corporation to take any action contrary to the its
Articles of Incorporation 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 Board of Directors of its responsibility for and control of the
conduct of the affairs of the Corporation or the Fund.
3.4 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, shall have the same meaning as and be
resolved by reference to such Agreement.
3.5 GOVERNING LAW. Except insofar as the 1940 Act or other federal
laws or regulations may be controlling, this Agreement shall be governed by, and
construed and enforced in accordance with the laws of the State of Maryland.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
by their respective officers thereunto duly authorized and their respective
corporate seals to be hereunto affixed, as of the day and year first above
written.
ATTEST: PACIFIC GLOBAL FUND, INC.
d/b/a PACIFIC ADVISORS FUND INC.
ON BEHALF OF THE MULTI-CAP VALUE
FUND
By:
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Secretary
ATTEST: PACIFIC GLOBAL INVESTMENT
MANAGEMENT COMPANY
By:
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Secretary
