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FORM OF
OPERATING EXPENSES AGREEMENT
FFP NEW HORIZONS FUND, INC.
THIS OPERATING EXPENSES AGREEMENT (the "Agreement") is effective as of
January 1, 1999 by and between FFP NEW HORIZONS FUND, INC., (the "Fund
Group"), a Maryland corporation, on behalf of each portfolio of the Fund
Group listed in Appendix A, as may be amended from time to time (each a
"Fund" and collectively the "Funds"), and the Adviser of each of the Funds,
FFP Advisory Services, Inc. (the "Adviser").
WITNESSETH:
WHEREAS, the Adviser renders advice and services to the Funds pursuant to the
terms and provisions of an Investment Advisory Agreement between the Fund
Group and the Adviser dated December 16, 1998, (the "Investment Advisory
Agreement"); and
WHEREAS, the Funds are responsible for, and have assumed the obligation for,
payment of certain expenses pursuant the Investment Advisory Agreement that
have not been assumed by the Adviser; and
WHEREAS, the Adviser realizes that the initial success of the Adviser in
managing the Funds is determined by the investment return of the Funds and
that excessive expenses during the initial period of the Funds would
negatively impact that return, and
WHEREAS, the Adviser desires to limit the Funds' respective Operating
Expenses (as that term is defined in Paragraph 2 of this Agreement) pursuant
to the terms and provisions of this Agreement, and the Fund Group (on behalf
of the Funds) desires to allow the Adviser to implement those limits;
NOW THEREFORE, in consideration of the covenants and the mutual promises
hereinafter set forth, the parties, intending to be legally bound hereby,
mutually agree as follows:
1. LIMIT ON OPERATING EXPENSES. To minimize the negative impact of
expenses on the Funds, the Adviser hereby agrees to limit each Fund's
Operating Expenses to the respective annual rate of total Operating Expenses
specified for that Fund in Appendix A of this Agreement.
2. DEFINITION. For purposes of this Agreement, the term "Operating
Expenses" with respect to a Fund is defined to include all expenses necessary
or appropriate for the operation of the Fund including the Adviser's
investment Advisory or management fee under Paragraph 8 of the Investment
Advisory Agreement, and other expenses described in Section IX of the
Investment Advisory Agreement, but does not include any front-end or
contingent deferred
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loads, taxes, interest, brokerage commissions, expenses incurred in connection
with any merger or reorganization or extraordinary expenses such as litigation.
3. REIMBURSEMENT OF FEES AND EXPENSES. The Adviser retains its right to
receive reimbursement of reductions of its investment Advisory fee and
Operating Expenses paid by it that are not its responsibility under the
Investment Advisory Agreement.
4. TERM. This Agreement shall become effective on the date specified
herein and shall remain in effect for a period of two (2) years, unless
sooner terminated as provided in Paragraph 5 of this Agreement. This
Agreement shall continue in effect thereafter for additional periods not
exceeding sixteen (16) months so long as such continuation is approved for
each Fund at least annually by the Board of Directors of the Fund Group (and
separately by the disinterested Directors of the Fund Group).
5. TERMINATION. This Agreement may be terminated by the Fund Group on
behalf of any one or more of the Funds at any time without payment of any
penalty or by the Board of Directors of the Fund Group, upon sixty (60) days'
written notice to the Adviser. The Adviser may decline to renew this
Agreement by written notice to the Fund Group at least thirty (30) days
before its annual expiration date.
6. ASSIGNMENT. This Agreement and all rights and obligations hereunder may
not be assigned without the written consent of the other party.
7. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute or rule, or shall be otherwise rendered
invalid, the remainder of this Agreement shall not be affected thereby.
8. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Missouri without giving effect to
the conflict of laws principles thereof; provided that nothing herein shall
be construed to preempt, or to be inconsistent with, any federal law,
regulation or rule, including the Investment Company Act of 1940, as amended
and the Investment Advisers Act of 1940, as amended and any rules and
regulations promulgated thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and attested by their duly authorized officers, all on the day and
year first above written.
FFP NEW HORIZONS FUND, INC.
By:
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Title: FFP ADVISORY SERVICES, INC.
------------------------- By:
Attest: -----------------------------
------------------------ Title:
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Attest:
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