EXPENSE LIMITATION AGREEMENT
EXPENSE LIMITATION AGREEMENT (the "Agreement"), effective as of
________, 2002 by and between Xxxxxxx Xxxxx & Company, L.L.C., an Illinois
limited liability company (the "Advisor") and Xxxxxxx Xxxxx Funds (the "Trust"),
on behalf of the Xxxxxxx Xxxxx Institutional International Growth Fund series of
the Trust (the "Fund").
WHEREAS, the Trust is a Delaware business trust, and is registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), as an
open-end management company of the series type, and the Fund is a series of the
Trust;
WHEREAS, the Trust and the Advisor have entered into a Management
Agreement dated December 15, 1999 ("Advisory Agreement"), pursuant to which the
Advisor provides investment management 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 Advisor 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 the level to which the Fund
may otherwise be subject;
NOW THEREFORE, the parties hereto agree as follows:
1. EXPENSE LIMITATION.
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1.1 Applicable Expense Limit. To the extent that the ordinary
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operating expenses incurred by the Fund for the period ending December 31, 2002
or for the period January 1, 2003 through April 30, 2003, including but not
limited to investment advisory fees of the Advisor, but excluding interest,
taxes, brokerage commissions, other investment-related costs and extraordinary
expenses, such as litigation and other 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 Advisor to the extent set forth in this
Agreement.
1.2 Operating Expense Limit. The Operating Expense Limit in any
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year with respect to the Fund shall be 1.10% (annualized) of the average daily
net assets of the Fund.
1.3 Duration of Operating Expense Limit. The Operating Expense
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Limit with respect to the Fund shall remain in effect during the term of this
Agreement.
1.4 Method of Computation. To determine the Advisor's obligation
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with respect to the Excess Amount, each day the Fund Operating Expenses for the
Fund shall be annualized. If the annualized Fund Operating Expenses for any day
of the Fund exceed the Operating Expense Limit of the Fund, the Advisor shall
waive or reduce its investment advisory fee or absorb the other Fund expenses in
an amount sufficient to pay that day's Excess Amount. The Trust may offset
amounts owed to the Fund pursuant to this Agreement against the advisory fee
payable to the Advisor. Furthermore, to the extent that the Excess Amount
exceeds such waived or reduced investment advisory fees, the Advisor shall, if
required pursuant to the securities laws or
regulations of any state in which the Fund's shares are qualified for sale, or
may, voluntarily, reimburse the Fund for any operating expenses.
2. REIMBURSEMENT OF FEE WAIVERS AND EXPENSE REIMBURSEMENTS.
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If on any day during which the Advisory Agreement is in effect, the
estimated annualized Fund Operating Expenses of the Fund for that day are less
than the Operating Expense Limit, the Advisor shall be entitled to reimbursement
by the Fund of the investment advisory fees waived or reduced, and any other
expense reimbursements or similar payments remitted by the Adviser to the Fund
pursuant to Section 1 hereof (the "Reimbursement Amount") during the period
ending December 31, 2002 or the period January 1, 2003 through April 30, 2003,
to the extent that the Fund's annualized Operating Expenses plus the amount so
reimbursed equals, for such day, the Operating Expense Limit, provided that such
amount paid to the Advisor will in no event exceed the total Reimbursement
Amount and will not include any amounts previously reimbursed.
3. TERM AND TERMINATION OF AGREEMENT.
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This Agreement shall terminate upon the earlier of termination of the
Advisory Agreement or on April 30, 2003. The obligation of the Advisor under
Section 1 of this Agreement and of the Trust under Section 2 of this Agreement
shall survive the termination of the Agreement solely as to expenses and
obligations incurred prior to the date of such termination.
4. MISCELLANEOUS.
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4.1 Captions. The captions in this Agreement are included for
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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
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require the Trust or the Fund to take any action contrary to the Trust's
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 the Fund.
4.3 Definitions. Any question of interpretation of any term or
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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 Advisory Agreement or the 1940 Act, shall have the same
meaning as and be resolved by reference to such Advisory Agreement or the 1940
Act.
4.4 Amendments. This Agreement may be amended only by a written
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agreement signed by each of the parties hereto.
4.5 Limitation of Liability. This Agreement is executed by or on
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behalf of the Trust, and Advisor is hereby expressly put on notice of the
limitation of shareholder liability as set forth
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in the Agreement and Declaration of Trust, as amended, of the Trust and agrees
that the obligations assumed by the Trust pursuant to this Agreement shall be
limited in all cases to the Trust and its assets, and Advisor shall not seek
satisfaction of any such obligations from the trustees, officers or shareholders
of the Trust.
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.
XXXXXXX XXXXX FUNDS
By:____________________________
Name:__________________________
Title:_________________________
XXXXXXX XXXXX & COMPANY, L.L.C.
By:____________________________
Name:__________________________
Title:_________________________
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