EXPENSE LIMITATION AGREEMENT
T.O. XXXXXXXXXX FOCUSED TREND FUND
EXPENSE LIMITATION AGREEMENT, effective as of September 28, 2000 by and
between T.O. Xxxxxxxxxx Company, Inc. (the "Adviser") and T.O. Xxxxxxxxxx Trust
(the "Trust"), on behalf of the T.O. Xxxxxxxxxx Focused Trend Fund (the "Fund").
WHEREAS, the Trust is a Massachusetts business trust organized under an
Agreement and Declaration of Trust ("Declaration of Trust"), and is registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), as an
open-end management company of the series type, and the Fund is a series of the
Trust; and
WHEREAS, the Trust and the Adviser have entered into an Advisory Agreement
dated as of September 25, 2000 (the "Advisory Agreement"), pursuant to which the
Adviser provides investment advisory services to the Fund, which may be amended
from time to time, for compensation based on the value of the average daily net
assets of the Fund; and
WHEREAS, the Trust and the Adviser have determined that it is appropriate
and in the best interests of the Fund and its shareholders to maintain the
expenses of the Fund, and, therefore, have entered into this Expense Limitation
Agreement (the "Agreement"), in order to maintain the operating expenses of the
Fund at 1.95%;
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 the 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 the Fund shall be 1.95% of the Fund's average daily net
assets.
1.3 Method of Computation. To determine the Adviser's liability with
respect to the Excess Amount, each month the Fund Operating Expenses for the
Fund shall be annualized as of the last day of the month. If the annualized Fund
Operating Expenses for any month of the Fund exceed the Operating Expense Limit
of the 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, 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; if any,
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 with respect to
the previous fiscal year shall equal the Excess Amount.
2. Term and Termination of Agreement.
---------------------------------
This Agreement with respect to the Fund shall continue in effect through
October 31, 2001. This Agreement shall terminate automatically upon the
termination of the 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 Fund 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 of the Trust or the Fund.
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 Agreement or the
1940 Act, shall have the same meaning as and be resolved by reference to such
Advisory Agreement 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.
T.O. XXXXXXXXXX TRUST
On Behalf of its
T.O. Xxxxxxxxxx Focused Trend Fund
By: /s/ Xxxxxx Xxxxxx, Jr.
---------------------------------
Xxxxxx Xxxxxx, Jr.
President and Treasurer
T.O. XXXXXXXXXX COMPANY, INC.
By: /s/ Xxxxxx Xxxxxx, Jr.
---------------------------------
Xxxxxx Xxxxxx, Jr.
President
