XXXX XXXXXXX INVESTMENT MANAGEMENT SERVICES, LLC
000 Xxxxxxxx Xxxxxx [XXXX XXXXXXX XXXX]
Xxxxxx, XX 00000
September 2, 2005
To the Trustees of:
Xxxx Xxxxxxx Funds II
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Re: Expense Limitation Agreement
With reference to the Advisory Agreement proposed to be entered into by
and between Xxxx Xxxxxxx Investment Management Services, LLC (the "Adviser") and
Xxxx Xxxxxxx Funds II (the "Trust"), on behalf of each series of the Trust
(each, a "Fund" and collectively, the "Funds"), we hereby notify you as follows:
1. The Adviser agrees to waive its management fee for each Fund and, to
the extent necessary, bear other expenses, as set forth in Appendices A, B and C
hereto.
2. We understand and intend that you will rely on this undertaking in
overseeing the preparation and filing of the Registration Statements on Form
N-1A for the Trust and the Funds with the Securities and Exchange Commission and
in accruing each Fund's expenses for purposes of calculating its net asset value
per share and for other purposes permitted under Form N-1A and/or the 1940 Act,
and we expressly permit you so to rely.
Very truly yours,
XXXX XXXXXXX INVESTMENT MANAGEMENT SERVICES, LLC
By: Xxxx Xxxxxxx Life Insurance Company (U.S.A.), its managing member
By: ______________________________
Xxxx X. XxxXxxx XXX
Chairman
Accepted and agreed to by:
XXXX XXXXXXX FUNDS II,
On behalf of the series of the Trust
By: __________________________
Xxxxx X. Xxxxxxxxx
President
APPENDIX A
ADVISORY FEE REIMBURSEMENT - LIFESTYLE FUNDS ONLY
CLASS SPECIFIC EXPENSE LIMITATIONS
(CLASSES A, B, C, R3, R4 AND R5)
The expense reimbursement set forth in this Appendix A shall apply to the
following classes of shares of each Lifestyle Fund (each a "Lifestyle Class").
Class A
Class B
Class C
Class R3
Class R4
Class R5
"Expenses" means the following the expenses attributable to a Lifestyle
Class: (i) blue sky state registration fees and (ii) printing and postage.
The Adviser agrees to make payment to a Lifestyle Class of a Lifestyle
Fund in an amount equal to the amount by which the Expenses of the Lifestyle
Class of the Lifestyle Fund exceed 0.09% of average annual net assets (on an
annualized basis) attributable to the Lifestyle Class of the Lifestyle Fund.
This expense reimbursement shall continue in effect until November 1, 2006
and thereafter until terminated by the Adviser on notice to the Trust.
A-1
APPENDIX B
ADVISORY FEE REIMBURSEMENT
CLASS SPECIFIC EXPENSE LIMITATION
(CLASS 3)
The expense reimbursement set forth in this Appendix B shall apply to
Class 3 shares of each Fund ("Class 3 Shares").
"Expenses" means the following expenses attributable to Class 3 Shares of
each Fund : (i) blue sky state registration fees, (ii) printing and postage and
(iii) transfer agency fees.
The Adviser agrees to make payment to Class 3 Shares of each Fund in an
amount equal to the Expenses of Class 3 shares of the Fund.
This expense reimbursement shall continue in effect until November 1, 2006
and thereafter until terminated by the Adviser on notice to the Trust.
B-1
APPENDIX C
ADVISORY FEE WAIVER
(ALL PORTFOLIOS EXCEPT THE LIFESTYLE FUNDS)
For purposes of this Appendix C:
"Expenses" means all the expenses of a Fund excluding: (i) taxes, (ii)
portfolio brokerage commissions, (iii) interest, (iv) litigation and
indemnification expenses and other extraordinary expenses not incurred in the
ordinary course of the Trust's business, (v) advisory fees; (vi) Rule 12b-1
fees; (vii) transfer agency fees; (viii) blue sky fees; (ix) fees under any
agreements or plans of the Trust dealing with services for shareholders and
others with beneficial interests in shares of the Trust; and (x) printing and
postage.
"Expense Limit" means the percentage of a Fund's average annual net assets
on an annualized basis set forth below.
The Adviser agrees to reduce its advisory fee for a Fund of the Trust, or
if necessary make payment to a Fund, in an amount equal to the amount by which
the Expenses of such Fund exceed the Expense Limit for such Fund set forth in
the table below. This expense reimbursement shall continue in effect until
terminated by the Adviser on notice to the Trust.
The Expense Limit for each of the Funds for the purposes of the Appendix C
shall be as follows:
FUND EXPENSE LIMIT
-------------------------------------------------------- -------------
International Equity Index Fund 0.05%
500 Index Fund 0.05%
Small Cap Index Fund 0.075%
Mid Cap Index Fund 0.075%
Total Stock Market Index Fund 0.075%
Bond Index Fund 0.075%
International Opportunities Fund 0.75%
International Small Cap Fund 0.75%
Global Fund 0.75%
Global Bond Fund 0.75%
International Value Fund 0.75%
Overseas Equity Fund 0.75%
International Stock Fund 0.75%
Pacific Rim Fund 0.75%
Emerging Small Company Fund 0.06%
All other Funds except those noted above and except the 0.50%
Lifestyle Funds
C-1
