Exhibit 99.B(23)(h)(vi)
EXPENSE LIMITATION AGREEMENT
XXXXX VALUE FUND, INC.
EXPENSE LIMITATION AGREEMENT, effective as of December 7, 2004 by and among
Xxxxx Asset Management, Inc. (the "Adviser"), Ladenburg Xxxxxxxx Fund Management
LLC (the "Manager"), Ladenburg Xxxxxxxx & Co., Inc. (the "Distributor") and
Xxxxx Value Fund, Inc. (the "Fund"), on behalf of each class of shares of the
Fund set forth in SCHEDULE A attached hereto.
WHEREAS, the Fund is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end management company, incorporated
under the laws of the State of Maryland on February 28, 1997;
WHEREAS, the Fund and the Adviser have entered into an Advisory Agreement
dated March 10, 1998 (the "Advisory Agreement"), pursuant to which the Adviser
provides investment advisory services to the Fund, which may be amended from
time to time, for compensation based on the value of the average daily net
assets of the Fund;
WHEREAS, the Fund and the Manager have entered into a Management Agreement
dated August 12, 2002 (the "Management Agreement"), pursuant to which the
Manager provides investment management services to the Fund, which may be
amended from time to time, for compensation based on the value of the average
daily net assets of the Fund;
WHEREAS, the Fund and the Distributor are parties to the Fund's Rule 12b-1
Plan relating to Class A shares, pursuant to which the Distributor engages in
marketing and distribution activities on behalf of the Fund, which may be
amended from time to time, for compensation based on the value of the average
daily net assets of the Fund;
WHEREAS, the Adviser, the Manager and the Distributor have voluntarily
determined that it is appropriate and in the best interests of the Fund and its
shareholders to maintain the expenses of each class of the Fund set forth in
SCHEDULE A at specified levels. The Fund, the Adviser, the Manager and the
Distributor therefore have entered into this Expense Limitation Agreement (the
"Agreement") in order to maintain the expense ratio of each class of the Fund at
the level specified in SCHEDULE A attached hereto for the period beginning on
the date hereof and ending on April 30, 2006; and
WHEREAS, the Fund is prepared to repay the Adviser, the Manager and the
Distributor such waived advisory, management and Rule12b-1 fees and reimbursed
expenses if the Fund subsequently achieves a sufficient level of assets.
NOW THEREFORE, in consideration of the mutual covenants set forth herein
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. EXPENSE LIMITATION.
1.1 APPLICABLE EXPENSE LIMIT. During the Term (as defined in Section 2),
the Manager, the Adviser and the Distributor each agrees to waive all or a
portion of their respective management fee, advisory fee and amounts, if any,
payable pursuant to plans adopted in accordance with Rule 12b-1 under the 1940
Act to the extent necessary so that the total expenses of every character
incurred by the applicable class of shares of the Fund (excluding interest,
taxes, brokerage commissions, other expenditures which are capitalized in
accordance with generally accepted accounting principles, and other
extraordinary expenses not incurred in the ordinary course of the Fund's
business (I.E., litigation)) ("Class Operating Expenses") exceed the Operating
Expense Limit (as defined in Section 1.2 below). During the Term, to the extent
that Class Operating Expenses incurred by the applicable class of shares of the
Fund in any fiscal year (after waiver of advisory fees of the Adviser,
management fees of the Manager and Rule 12b-1 fees payable to the Distributor)
exceed the Operating Expense Limit, such excess amount (the "Excess Amount")
shall be the liability of the Manager, and the Distributor (in its capacity as
an indirect owner of the Manager) shall on behalf of the Manager make payments
to the Fund of any and all Excess Amounts. The parties agree that to the extent
Class Operating Expenses applicable to a class in any fiscal year do not exceed
the Operating Expense Limit, the management fee, advisory fee and Rule 12b-1
fees shall be payable by the Fund in the following order:
- first, the Distributor shall be entitled to receive the Rule 12b-1 fee
up to the amount payable under the Fund's Rule 12b-1 Plan applicable to
such class of shares; and
- thereafter, the Manager and the Adviser shall each be entitled to
receive a proportionate amount of their respective management fee and
advisory fee up to the amounts payable under the Management Agreement or
the Advisory Agreement, as applicable.
1.2 OPERATING EXPENSE LIMIT. The maximum Operating Expense Limit in any
year with respect to each class of the Fund shall be the amount specified in
SCHEDULE A based on a percentage of the average daily net assets of each class
of the Fund.
1.3 REIMBURSEMENT. The Manager shall keep a record of the amounts of
advisory fees, management fees and Rule 12b-1 fees waived and Excess Amounts
reimbursed pursuant to Section 1.1 hereof ("Prior Expenses"). Subject to the
last sentence of this Section 1.3, if at any future date Class Operating
Expenses of a class of shares of the Fund are less than the Operating Expense
Limit for such class, the Manager, the Adviser and the Distributor shall each be
entitled to payment by the applicable class of the Fund of the amount of such
Prior Expenses, without interest thereon, except to the extent that such payment
will cause Class Operating Expenses of such class of the Fund to exceed the
Operating Expense Limit for that class. If Class Operating Expenses of a class
of the Fund subsequently exceed the Operating Expense Limit for that class, the
payment of Prior Expenses shall be suspended. If subsequent payment of Prior
Expenses shall be resumed to the extent that Class Operating Expenses do not
exceed the Operating Expense Limit, the Operating Expense Limit in Section 1.1
shall (unless previously terminated in accordance with the terms hereof) apply.
The Adviser, the Manager and the Distributor may
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each seek reimbursement only for Prior Expenses waived or paid by it during the
two fiscal years prior to such reimbursement; PROVIDED, HOWEVER, that such Prior
Expenses may only be reimbursed hereunder to the extent they were waived or paid
after the date of this Agreement (or any similar prior agreement). The
provisions of this Agreement shall survive the termination of this Agreement to
the extent necessary to permit any such reimbursement.
1.4 LIMITATION OF LIABILITY. The obligations and expenses incurred,
contracted for or otherwise existing with respect to the Fund shall be enforced
against the assets of the Fund or applicable class thereof and not against the
assets of any other class. It is understood and expressly stipulated that
neither the holders of shares of the Fund nor the directors of the Fund shall be
personally liable hereunder.
1.5 METHOD OF COMPUTATION. To determine the Adviser's, the Manager's and
the Distributor's obligations hereunder, each month the Fund Operating Expenses
for the Fund shall be annualized as of the last day of the month. If the
annualized Fund Operating Expenses for any month of the Fund exceed the
Operating Expense Limit of the Fund, the Adviser, the Manager and/or the
Distributor shall waive or reduce their advisory, management fees and/or Rule
12b-1 fees for such month by an equal amount, and if necessary the Manager shall
remit an amount to the appropriate class or classes of the Fund, sufficient to
reduce the annualized Fund Operating Expenses to an amount no higher than the
Operating Expense Limit; PROVIDED, HOWEVER, that any waiver or reduction of the
advisory and management fees is applied equally across the classes of the Fund
is and incurred equally by the Adviser and the Manager.
1.6 YEAR-END ADJUSTMENT. If necessary, on or before the last day of the
first month of each fiscal year, an adjustment payment shall be made by the
appropriate party in order that the amount of the advisory and management fees
waived or reduced and other payments remitted by the Manager to the Fund with
respect to the previous fiscal year shall equal the Excess Amount.
2. TERM; TERMINATION. The term ("Term") of the Applicable Expense Limit under
this Agreement shall begin on the date hereof and end on April 30, 2005. The
Term of this Agreement shall be continued from year to year unless the Adviser,
the Manager and the Distributor unanimously agree not to so continue the Term of
this Agreement by giving the Fund not less than 5 days prior notice. This
Agreement shall terminate automatically with respect to the Fund and to the
Adviser, the Manager or the Distributor upon the termination of the Advisory
Agreement, the Management Agreement or the Rule 12b-1 plan, respectively. The
Fund can terminate this Agreement by giving the other parties not less than 5
days prior written notice of termination.
3. MISCELLANEOUS.
3.1 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.
3.2 INTERPRETATION. Nothing herein contained shall be deemed to require
the Fund to take any action contrary to the Fund's charter or bylaws, or any
applicable statutory or regulatory
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requirement to which it is subject or by which it is bound, or to relieve or
deprive the Fund's Board of Directors of its responsibility for and control of
the conduct of the affairs of the Fund.
3.3 DEFINITIONS. Any question of interpretation of any term or provision
of this Agreement, including but not limited to the advisory, management or Rule
12b-1 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, Management Agreement, Rule 12b-1 Plan or the 1940 Act,
shall have the same meaning as and be resolved by reference to such Agreement or
Plan or the 1940 Act and to interpretations thereof, if any, by the United
States Courts or in the absence of any controlling decision of any such Court,
by rules, regulations or orders of the Securities and Exchange Commission
("SEC") issued pursuant to the 1940 Act. In addition, if the effect of a
requirement of the 1940 Act reflected in any provision of this Agreement is
revised by rule, regulation or order of the SEC, that provision will be deemed
to incorporate the effect of that rule, regulation or order. Otherwise the
provisions of this Agreement will be interpreted in accordance with the
substantive laws of the State of New York.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective officers as of the day and year first above written.
Xxxxx Value Fund, Inc.
By: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
Chairman
Xxxxx Asset Management, Inc.
By: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
President
Ladenburg Xxxxxxxx Fund Management LLC
By: /s/ Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx
Member of the Board of Managers
Ladenburg Xxxxxxxx & Co., Inc.
By: /s/ Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx
Its: Vice President
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SCHEDULE A
OPERATING EXPENSE LIMITS
This Agreement relates to the following classes of the Xxxxx Value Fund:
MAXIMUM OPERATING
EXPENSE LIMIT
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Xxxxx Value Fund -- Class A shares 1.75%
