[ROYCE & ASSOCIATES, INC. LETTERHEAD]
April 28, 2000
The Royce Fund
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Re: Fee Waiver and Expense Reimbursement - Royce Opportunity Fund
(Institutional Service Class)
Gentlemen:
Reference is made to the Investment Advisory Agreement dated November 1,
1996 (the "Agreement") by and between The Royce Fund (the "Fund") on behalf of
Royce Opportunity Fund (the "Series") and Royce & Associates, Inc. (the
"Adviser").
Notwithstanding the provisions of Section 4 (Compensation of the Adviser)
of the Agreement, the Adviser hereby waives compensation for services provided
by it under the Agreement for each of the calendar years ending December 31,
2000-2004 in an amount, if any, necessary so that the Series' "Annual Operating
Expenses" for its Institutional Service Class of shares (the "Class") are not
more than 1.49% of the Class' average net assets for any such calendar year.
If, after giving effect to the provisions of the preceding sentence, the Adviser
is not entitled to receive any compensation for any such calendar year with
respect to the Class, then the Adviser will reimburse the Series with respect to
the Class to the extent necessary to cause the Series' Annual Operating Expenses
for the Class to be not more than 1.49% of the Class' average net assets for
that calendar year. The Adviser's obligations to reimburse the Series with
respect to the Class hereunder will not apply for any period when the Adviser is
not rendering services to such Series under the Agreement.
The Series' "Annual Operating Expenses" for the Class means and will
consist only of the following operating expenses of the Series for the Class
that are, under generally accepted accounting principles, accruable and
deductible from the Series' assets with respect to the Class for the calendar
year involved: (i) investment advisory fees, if any; (ii) Rule 12b-1
distribution fees, if any; and (iii) custodian fees, shareholder servicing fees,
administrative and office facilities expenses, professional fees, trustees' fees
and any other operating expenses of the Series with respect to the Class that
are recorded or includable in the Series' statement of operations in accordance
with generally accepted accounting principles. Notwithstanding the provisions
of the immediately preceding sentence, the Series' "Annual Operating Expenses"
for the Class do not include interest and dividends on securities sold short,
amortization of organization expenses, taxes, brokerage commissions, litigation
and indemnification expenses or any costs or expenses of or for the Series with
respect to the Class that are "extraordinary" as determined under generally
accepted accounting principles (see Accounting Principles Board Opinion No. 30).
Very truly yours,
ROYCE & ASSOCIATES, INC.
By: /s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx,
President
ACCEPTED:
THE ROYCE FUND
By: /s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx,
President
