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EXHIBIT (h)(4)
EXPENSE LIMITATION AGREEMENT
THIS AGREEMENT, dated as of August 1, 2001, is made and entered into by
and between The Coventry Group, a Massachusetts business trust (the "Trust"), on
behalf of The Shelby Large Cap Fund (the "Fund"), and SMC Capital, Inc. (the
"Adviser").
WHEREAS, the Adviser has been appointed the investment adviser of the
Fund pursuant to an Investment Advisory Agreement dated August 1, 2001 between
the Trust, on behalf of the Fund, and the Adviser (the "Advisory Agreement");
and
WHEREAS, the Trust and the Adviser desire to enter into the
arrangements described herein relating to certain expenses of the Fund;
NOW, THEREFORE, the Trust and the Adviser hereby agree as follows:
1. Until further notice from the Adviser to the Trust, the Adviser
agrees, subject to Section 2 hereof, to reduce the fees payable to it under the
Advisory Agreement (but not below zero) and/or reimburse other expenses of the
Fund, during the fiscal year ending March 31, 2002, to the extent necessary to
limit the total operating expenses of each class of shares of the Fund,
exclusive of brokerage costs, interest, taxes and dividend and extraordinary
expenses, to the amount of the "Maximum Operating Expense Limit" applicable to
each such class of shares of the Fund as set forth on the attached Schedule A.
2. The Fund agrees to pay to the Adviser the amount of fees (including
any amounts foregone through limitation or reimbursed pursuant to Section 1
hereof) that, but for Section 1 hereof, would have been payable by the Fund to
the Adviser pursuant to the Advisory Agreement (the "Deferred Fees"), subject to
the limitations provided in this Section. Such repayment shall be made monthly,
but only if the operating expenses of the Fund (exclusive of brokerage costs,
interest, taxes and dividend and extraordinary expenses), without regard to such
repayment, are at an annual rate (as a percentage of the average daily net
assets of the Fund) equal to or less than the "Maximum Operating Expense Limit"
for each respective class of shares of the Fund, as set forth on Schedule A.
Furthermore, the amount of Deferred Fees paid by the Fund in any month shall be
limited so that the sum of (a) the amount of such payment and (b) the other
operating expenses of the Fund (exclusive of brokerage costs, interest, taxes
and extraordinary expenses) do not exceed the above-referenced "Maximum
Operating Expense Limit" for each respective class of shares of the Fund.
Deferred Fees with respect to any fiscal year of the Fund shall not be
payable by the Fund to the extent that the amounts payable by the Fund pursuant
to the preceding paragraph during the period ending three years after the end of
such fiscal year are not sufficient to pay such Deferred Fees. In no event will
the Fund be obligated to pay any fees waived or deferred by the Adviser with
respect to any other series of the Trust.
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3. A copy of the Agreement and Declaration of Trust establishing the
Trust is on file with the Secretary of The Commonwealth of Massachusetts, and
notice is hereby given that this Agreement is executed by the Trust on behalf of
the Fund by an officer of the Trust as an officer and not individually and that
the obligations of or arising out of this Agreement are not binding upon any of
the Trustees, officers or shareholders individually but are binding only upon
the assets and property belonging to the Fund.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
THE COVENTRY GROUP SMC CAPITAL, INC.
By: By:
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Name: Name:
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Title: Title:
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SCHEDULE A
OPERATING EXPENSE LIMITS
Maximum Operating
Fund Name Expense Limit*
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THE SHELBY LARGE CAP FUND
Class A Shares 1.65%
Class B Shares 2.40%
Class Y Shares 1.40%
* Expressed as a percentage of the Fund's average daily net assets.
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