EXPENSE LIMITATION AGREEMENT
XXXX FAMILY OF FUNDS
EXPENSE LIMITATION AGREEMENT, effective as of July 31, 1999 by and between
X.X. Xxxx & Associates, Inc. (the "Adviser") and Xxxx Family of Funds (the
"Trust"), on behalf of each series of the Trust set forth in Schedule A attached
hereto (each a "Fund"), and collectively, the "Funds").
WHEREAS, the Trust is an Ohio business trust organized under a Declaration
of Trust ("Declaration of Trust"), and is registered under the Investment
Company Act of 1940, as amended (the "1940 At"), as an open-end management
company of the series type, and each fund is a series of the Trust; and
WHEREAS, each Fund consists of multiple classes as set forth in Schedule A
attached hereto; and
WHERAS, the Trust and the Adviser have entered into Advisory Agreements
dated April 1, 1997 and October 1, 1997 (the "Advisory Agreements"), pursuant to
which the Adviser provides investment advisory services to each Fund listed in
Schedule A, which may be amended from time to time, for compensation based on
the value of the average daily net assets of each class of each Fund; and
WHEREAS, the Trust and the Adviser have determined that it is appropriate
and in the best interests of each Fund and its shareholders to maintain the
expenses of each class of each Fund, and, therefore, have entered into this
Expense Limitation Agreement (the "Agreement"), in order to maintain the expense
ratios of each class of each Fund at the levels specified in Schedule A attached
hereto; and
NOW THEREFORE, the parties hereto agree that the Agreement provides as
follows:
1. Expense Limitation.
1.1 Applicable Expense Limit. To the extent that the aggregate expenses of
every character incurred by a Fund in any fiscal year, including but not limited
to advisory fees of the Adviser (but excluding interest, taxes, brokerage
commissions, other expenditures which are capitalized in accordance with
generally accepted accounting principles, other extraordinary expenses not
incurred in the ordinary course of such Fund's business, and amounts, if any,
payable pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940
Act, if any) ("Fund Operating Expenses"), exceed the Operating Expense Limit, as
defined in Section 1.2 below, such excess amount (the "Excess Amount") shall be
the liability of the Adviser.
1.2 Operating Expense Limit. The maximum Operating Expense Limit in any
year with respect to each class of each Fund shall be the amount specified in
Schedule A based on a percentage of the average daily net assets of each class
of each Fund.
1.3 Method of Computation. To determine the Adviser's liability with
respect to the Excess Amount, each month the Fund Operating Expenses for each
Fund shall be annualized as of the last day of the month. If the annualized Fund
Operating Expenses for any month of a Fund exceed the Operating Expense Limit of
such Fund, the Adviser shall waive or reduce its advisory fee for such month by
an amount, or remit an amount to the appropriate class or classes of the Fund or
Funds, 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 fee is applied equally across the classes of the
Fund.
1.4 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 fees waived or
reduced and other payments remitted by the Adviser to the Fund or Funds with
respect to the previous fiscal year shall equal the Excess Amount
2. Term and Termination of Agreement.
This Agreement with respect to the Funds shall continue in effect through
March 31, 2000, and from year to year thereafter provided each such continuance
is specifically approved by a majority of the Trustees of the Trust. This
Agreement shall terminate automatically with respect to the applicable Fund upon
the termination of an Advisory Agreement.
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
Trust or the Funds to take any action contrary to the Trust's Declaration of
Trust or Bylaws, or any applicable statutory or regulatory requirement to which
it is subject or by which it is bound, or to relieve or deprive the Trust's
Board of Trustees of its responsibility for and control of the conduct of the
affairs o the Trust or the Funds.
3.3 Definitions. Any question of interpretation of any term or provision of
this Agreement, including but not limited to the advisory 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 Agreements or
the 1940 Act, shall have the same meaning as and be resolved by reference to
such Advisory Agreements or the 1940 Act.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective officers thereunto duly, as of the day and year first above
written.
XXXX FAMILY OF FUNDS
ON BEHALF OF EACH OF ITS SERIES
By: /s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
President
X.X. XXXX & ASSOCIATES, INC.
By: /s/ Xxxxxx X. Xxxx
Xxxxxx X. Xxxx
President
CinLibrary/1312499.1
SCHEDULE A
OPERATING EXPENSE LIMITS
This Agreement relates to the following Funds and classes of the Trust:
Maximum Operating
Expense Limit
Large Cap Value Fund Class A shares 1.85%
Large Cap Value Fund Class C shares 2.60%
Small Cap Value Fund Class A shares 1.85%
Small Cap Value Fund Class C shares 2.60%
Balanced Fund Class A shares 1.85%
Balanced Fund Class C shares 2.60%
International Value Fund Class A shares 2.10%
International Value Fund Class C shares 2.85%
CinLibrary/1312499.1
