1
MERCURY HW FUNDS
INTERIM
EXPENSE CAP AGREEMENT
Agreement made this ____ day of October, 2001, by and between HOTCHKIS
AND WILEY CAPITAL MANAGEMENT, LLC, as investment adviser (the "Advisor"), and
the MERCURY HW FUNDS (the "Funds" and each series individually, a "Fund").
WHEREAS, the Advisor wishes to limit expenses of each Fund listed below
and commit to those limits for a period of time, and
WHEREAS, shareholders of each such Fund benefit from any expense limits
agreed to by the Advisor.
NOW, THEREFORE, the Funds and the Advisor agree to expense limits on
the annual operating expenses of each Fund, as follows:
Expense Limit
(as a percentage of
Fund average net assets)
---- -------------------
Class I Class A Class B Class C
------- ------- ------- -------
Large Cap Value 0.95% 1.20% N/A N/A
Mid-Cap Value 1.15% 1.40% 2.15% 2.15%
Small Cap Value 1.25% 1.50% N/A N/A
The Advisor agrees to continue the foregoing expense limits through June 30,
2002 and thereafter may change any of them only upon 30 days' prior notice to
the applicable Fund's shareholders.
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IN WITNESS WHEREOF, the parties hereto have caused the foregoing
instrument to be executed by duly authorized persons and their seals to be
hereunto affixed, all as of the day and year first above written.
MERCURY HW FUNDS
By ____________________________________
ATTEST:
________________________________
HOTCHKIS AND WILEY
CAPITAL MANAGEMENT, LLC
By ____________________________________
ATTEST:
________________________________
