EXPENSE LIMITATION AGREEMENT
CM ADVISERS FAMILY OF FUNDS
This Agreement is made and entered into this 7th day of May, 2003, by and
between the CM Advisers Fund (the "Fund"), a series of shares of the CM Advisers
Family of Funds, a Delaware statutory trust (the "Trust") and Van Den Xxxx
Management, Inc. d/b/a CM Fund Advisers, a California corporation (the
"Adviser").
WHEREAS, the Trust is a Delaware statutory trust organized under the
Certificate of Trust ("Trust Instrument"), dated November 22, 2002 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
WHEREAS, the Fund is a series of the Trust; and
WHEREAS, the Fund and the Adviser have entered into an Investment Advisory
Agreement dated May 7, 2003, ("Advisory Agreement"), pursuant to which the
Adviser provides investment advisory services to the Fund; and
WHEREAS, the Fund and the Adviser have determined that it is appropriate
and in the best interests of the Fund and its shareholders to limit the expenses
of the Fund, and, therefore, have entered into this Agreement, in order to
maintain the Fund's expense ratios within the Operating Expense Limit, as
defined below.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Expense Limitation.
(a) Applicable Expense Limit. To the extent that the aggregate expenses of
every character, including but not limited to investment 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 0000 Xxx) incurred by the Fund in any fiscal year
("Fund Operating Expenses"), exceed the Operating Expense Limit, as
defined in Section 1(b) below, such excess amount (the "Excess
Amount") shall be the liability of the Adviser.
(b) Operating Expense Limit. The Fund's maximum Operating Expense Limit in
any year shall be 2.00% of the average daily net assets of the Fund.
(c) 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
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the annualized Fund Operating Expenses for any month exceeds the
Operating Expense Limit of the Fund, the Adviser shall first waive or
reduce its investment advisory fee for such month by an amount
sufficient to reduce the annualized Fund Operating Expenses to an
amount no higher than the Operating Expense Limit. If the amount of
the waived or reduced investment advisory fee for any such month is
insufficient to pay the Excess Amount, the Adviser may also remit to
the Fund an amount that, together with the waived or reduced
investment advisory fee, is sufficient to pay such Excess Amount.
(d) 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 investment
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 be effective on May 12, 2003 ("Effective Date") with respect
to the Fund and shall continue in effect until the last day of February, 2004,
and from year to year thereafter provided each such continuance is specifically
approved by a majority of the Trustees of the Trust who (i) are not "interested
persons" of the Trust or any other party to this Agreement, as defined in the
1940 Act, and (ii) have no direct or indirect financial interest in the
operation of this Agreement ("Non-Interested Trustees"). Nevertheless, this
Agreement may be terminated by either party hereto, without payment of any
penalty, upon written notice ninety (90) days prior to the end of the
then-current term of the Agreement to the other party at its principal place of
business; provided that, in the case of termination by the Trust, such action
shall be authorized by resolution of a majority of the Non-Interested Trustees
of the Trust or by a vote of a majority of the outstanding voting securities of
the Trust. Any termination pursuant to this paragraph 2 shall become effective,
unless otherwise specifically agreed upon, on the last day of the then-current
term of the Agreement.
3. Miscellaneous.
(a) 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.
(b) 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 By-Laws, 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 Funds.
(c) Definitions. Any question of interpretation of any term or provision
of this Agreement, including but not limited to the investment
advisory fee, the computations of net asset values, and the allocation
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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 authorized and their respective
corporate seals to be hereunto affixed, as of the day and year first above
written.
CM ADVISERS FUND, A SERIES OF THE
CM ADVISERS FAMILY OF FUNDS
/s/ Xxxxxx Van Den Xxxx
By: Xxxxxx Van Den Xxxx
Title: President
VAN DEN XXXX MANAGEMENT, INC.
D/B/A CM FUND ADVISERS,
/s/ Xxxxxx Van Den Xxxx
By: Xxxxxx Van Den Xxxx
Title: President
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