Exhibit 2
EXPENSE REIMBURSEMENT AGREEMENT
Agreement made this 9th day of June 1997 between Alamo Growth Fund,
Inc., a Maryland corporation (the "Fund"), and Alamo Advisers, Inc., a Texas
corporation (the "Adviser").
W I T N E S S E T H:
WHEREAS the Fund proposes to enter into an Investment Advisory
Agreement (the "Advisory Agreement") with the Adviser simultaneously with the
execution of this Agreement;
WHEREAS it would be mutually advantageous to the Fund and the Adviser
to limit the expenses borne by the Fund during its start-up; and
WHEREAS the Adviser is willing to bear certain expenses of the Fund,
so long as the Advisory Agreement remains in effect.
NOW, THEREFORE, the Fund and the Adviser agree as follows:
1. Definitions.
a. "Average Net Assets" of the Fund for any year shall mean
the average of the net asset values of the Fund determined as of the close
of each business day of such year.
b. "Expense Ratio" shall mean, for any year, the ratio of
the Fund's Operating Expenses to the Average Net Assets of the Fund for
that year.
c. "Operating Expenses" shall mean the total expenses of
the Fund, including operating expenses, such as office expenses,
accounting fees, legal fees, custodial fees and employment expenses;
advisory fee, as provided in the Investment Advisory Agreement;
registration expenses, such as the cost of registration of the Fund with
the Securities and Exchange Commission and with the various state agencies;
and miscellaneous expenses, such as printing costs, insurance premiums and
all other expenses of operation of the Fund, excluding only brokerage
commissions, interest and taxes.
2. Expense Limitation. If for any fiscal year of the Fund ending
before December 31, 1999, the Expense Ratio of the Fund exceeds 2.5 percent,
then the Adviser will reimburse the Fund an amount which will cause the Expense
Ratio for such fiscal year not to exceed 2.5 percent. Reimbursement may be made
by waiving the Adviser's advisory fee, payment to the Fund or both, at the
option of the Adviser.
3. Termination. This Agreement may be terminated at any time,
without payment of any penalty, by the board of directors of the Fund or by a
vote of the majority of the outstanding voting securities of the Fund upon
giving sixty (60) days' written notice to the Adviser. This Agreement may be
terminated by the Adviser at any time upon the giving of 60 days' written notice
to the Fund. This Agreement shall automatically terminate upon the termination
of the Advisory Agreement.
4. Entire Agreement. This Agreement constitutes the entire
agreement and understanding of the parties with respect to its subject matter,
and supersedes all other prior negotiations, understandings and agreements
between the parties concerning the subject matter hereof.
5. Assignment. This Agreement may not be assigned by either party
without the prior written consent of the other party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be execute don the day first above written.
ALAMO ADVISERS, INC.
By: By:
Secretary President
ALAMO GROWTH FUND, INC.
By: By:
Secretary President
