EXHIBIT (h)12
XXXXX STREET FUNDS, INC.
November 13, 0000
Xxxxx Xxxxxx Advisors, LLC
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
The Northwestern Mutual Life Insurance Company
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Northwestern Mutual Investment Services, LLC
000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
RE: AGREEMENT TO WAIVE FEES CHARGED TO XXXXX STREET FUNDS, INC.
Gentlemen:
This letter constitutes an agreement by and among Xxxxx Street Advisors,
LLC ("MSA"), The Northwestern Mutual Life Insurance Company ("NML"),
Northwestern Mutual Investment Services, LLC ("NMIS") and Xxxxx Street Funds,
Inc. ("MSF") as follows:
For each fiscal year of MSF beginning on or after April 1, 2004, and
ending on or before March 31, 2006, MSA, NML and NMIS agree to waive their fees
to the extent necessary so that Net Total Operating Expenses of each Class of
each Fund of MSF, after the waiver, do not exceed the amount indicated as the
maximum Net Total Operating Expenses (the "Expense Cap") in the then-effective
prospectus for MSF (the "Prospectus"). These fee waivers shall occur in the
following order for each Fund of MSF: First, MSA shall waive its investment
advisory fee, provided that such waiver is allocated among the Classes of the
Fund in proportion to the relative net asset values of such Classes (a "Pro-Rata
Waiver"). Second, NML shall waive its Administration Agreement fee, provided
that such waiver is allocated among the Classes of the Fund in proportion to the
relative net asset values of such Classes. Third, NMIS shall waive its
Distribution Plan/Agreement (Rule 12b-1) fees. Fourth, NMIS shall waive its
Shareholder Services Agreement fees. Finally, to the extent necessary to prevent
the Net Total Operating Expenses of any Class of any Fund from exceeding the
Expense Cap for such Class after each of the foregoing waivers, MSA shall pay or
reimburse MSF's expenses. All such waivers, payments and reimbursements shall be
pro-rata between the Classes except to the extent provided in the following
paragraph.
To the extent that the Net Total Operating Expense ratios of the Classes
of a particular Fund cannot both be reduced simultaneously to the maximum Net
Total Operating Expense ratio set forth in the Prospectus through the use of a
Pro-Rata Waiver by MSA, NML or NMIS, then NMIS agrees to waive its Distribution
Plan/Agreement and/or Shareholder Services Agreement fees for the appropriate
Class of such Fund so as to reach the Expense Cap for that Class of such Fund.
In such circumstances, NMIS shall first waive its Distribution Plan/Agreement
fees and then its Shareholder Services Agreement fees, to the extent necessary
for such Class to reach the Expense Cap for the fiscal year.
Very truly yours,
XXXXX STREET FUNDS, INC.
By: /s/XXXX X. XXXX
---------------
Name: Xxxx X. Xxxx
Title: President
Agreed to and accepted:
Xxxxx Street Advisors, LLC
By: /s/XXXX X. XXXX
---------------
Name: Xxxx X. Xxxx
Title: President
THE NORTHWESTERN MUTUAL LIFE INSURANCE
COMPANY
By: /s/XXXXXXX X. XXXXXXXXX
-----------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President (Annuity and Accumulation Products)
NORTHWESTERN MUTUAL INVESTMENT SERVICES, LLC
By: /s/XXXXXXX X. XXXXXXXXX
-----------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President, Variable Annuities
