EXPENSE LIMITATION AGREEMENT
----------------------------
SURGEONS ASSET MANAGEMENT, LLC
000 X. XXXXX XXXXX XXXXXX
XXXXXXX, XX 00000-0000
Effective September 1, 2006
SURGEON DIVERSIFIED INVESTMENT FUND
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxx 00000
Dear Ladies and Gentlemen:
Surgeons Asset Management, LLC confirms our agreement with you as follows:
1. You are an open-end management investment company registered under the
Investment Company Act of 1940 (the "Act") and are authorized to issue shares of
separate series (the funds), with each fund having its own investment objective,
policies and restrictions. Pursuant to an Investment Management Contract dated
effective as of September 1, 2006 (the "Management Contract"), you have employed
us to supervise and oversee the investment and reinvestment of the assets of the
Surgeons Diversified Investment Fund (the "Fund").
2. We hereby agree that, notwithstanding any provision to the contrary
contained in the Management Contract, we shall limit as provided herein the
aggregate ordinary operating expenses incurred by the Fund (the "Limitation"),
including but not limited to the fees ("Management Fees") payable to us under
the Management Contract. Under this Limitation, we agree that, through the term
of this Agreement, such expenses shall not exceed a percentage (the "Percentage
Expense Limitation") of the average daily net assets of the Fund equal to 1.35%
on an annualized basis. To determine our liability for the Fund's expenses in
excess of the Percentage Expense Limitation, the amount of allowable
fiscal-year-to-date expenses shall be computed daily by prorating the Percentage
Expense Limitation based on the number of days elapsed within the fiscal year of
the Fund, or limitation period, if shorter the ("Prorated Limitation"). The
Prorated Limitation shall be compared to the expenses of the Fund recorded
through the current day in order to produce the allowable expenses to be
recorded for the current day (the "Allowable Expenses"). If Management Fees and
other expenses of the Fund for the current day exceed the Allowable Expenses,
Management Fees for the current day shall be reduced by such excess ("Unaccrued
Fees"). In the event such excess exceeds the amount due as Management Fees, we
shall be responsible to the Fund to pay or absorb the additional excess ("Other
Expenses Exceeding Limit"). If there are cumulative Unaccrued Fees or cumulative
Other Expenses Exceeding Limit, these amounts shall be paid to us by you subject
to the following conditions: (1) no such payment shall be made to us with
respect to Unaccrued Fees or Other Expenses Exceeding Limit that arose more than
three years prior to the proposed date of payment, and (2) such payment shall be
made only to the extent that it does not cause the Fund's aggregate expenses, on
an annualized basis, to exceed any Percentage Expense Limitation in effect on
the proposed date of payment.
3. Nothing in this Agreement shall be construed as preventing us from
voluntarily limiting, waiving or reimbursing your expenses outside the contours
of this Agreement during any time period before or after the term of this
Agreement, nor shall anything herein be construed as requiring that we limit,
waive or reimburse any of your expenses incurred after the term of this
Agreement, or, except as expressly set forth herein, prior to such date.
4. This Agreement shall become effective on the date hereof and supercedes
any expense limitation agreement previously entered into with respect to the
Fund. This Agreement may be terminated by either party hereto upon not less than
60 days' prior written notice to the other party, provided, however, that (1) we
may not terminate this Agreement without the approval of your Board of Trustees,
and (2) this Agreement will terminate automatically if, as and when we cease to
serve as investment adviser of the Fund. Upon the termination or expiration
hereof, we shall have no claim against you for any amounts not reimbursed to us
pursuant to the provisions of paragraph 2.
5. The initial term of this Agreement will run from the date of this
Agreement until August 31, 2009. Thereafter, this Agreement shall automatically
renew for a term of one year unless otherwise terminated pursuant to the terms
of this Agreement.
6. This Agreement shall be construed in accordance with the laws of the
State of Ohio, provided, however, that nothing herein shall be construed as
being inconsistent with the Act.
If the foregoing is in accordance with your understanding, will you kindly
so indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
SURGEONS ASSET MANAGEMENT, LLC
By:
----------------------------------
Gay X. Xxxxxxx, Comptroller
Agreed to and accepted as of the date first set forth above.
SURGEONS DIVERSIFIED INVESTMENT FUND
By:
---------------------------------
Xxxxxxx X. Xxx, President
