Exhibit (h)(6)
REALTY FUNDS, INC.
OPERATING EXPENSES LIMITATION AGREEMENT
THIS OPERATING EXPENSES LIMITATION AGREEMENT (the "Agreement") is
effective as of the 6th day of September, 2007, by and between Realty Funds,
Inc., a Maryland corporation (the "Company"), on behalf of each of the funds
listed on Appendix A (each a "Fund," and collectively, the "Funds") and XShares
Advisors LLC (the "Advisor").
WITNESSETH:
WHEREAS, the Advisor renders advice and services to the Funds pursuant
to the terms and provisions of an Investment Advisory Agreement between the
Company and the Advisor dated as of the 6th day of September, 2007 (the
"Investment Advisory Agreement"); and
WHEREAS, Advisor desires to limit each Fund's Operating Expenses (as
that term is defined in paragraph 2 of this Agreement) pursuant to the terms and
provisions of this Agreement, and the Company (on behalf of each Fund) desires
to allow the Advisor to implement those limits;
NOW THEREFORE, in consideration of the covenants and the mutual
promises hereinafter set forth, the parties, intending to be legally bound
hereby, mutually agree as follows:
1. LIMIT ON OPERATING EXPENSES. The Advisor hereby agrees to limit each
Fund's current Operating Expenses to an annual rate, expressed as a percentage
of each Fund's respective average annual net assets to the amounts listed in
Appendix A (the "Annual Limits"). In the event that the current Operating
Expenses of a Fund, as accrued each month, exceed its Annual Limit, the Advisor
will pay to the Fund, on a monthly basis, the excess expense within a reasonable
time after being notified that an excess expense payment is due.
2. DEFINITION. For purposes of this Agreement, the term "Operating
Expenses" with respect to each Fund, is defined to include all expenses
necessary or appropriate for the operation of each Fund, including the Advisor's
investment advisory or management fee detailed in the Investment Advisory
Agreement and other expenses described in the Investment Advisory Agreement, but
does not include any front-end or contingent deferred loads, acquired fund fees
and expenses, taxes, leverage interest, brokerage commissions, expenses incurred
in connection with any merger or reorganization, or extraordinary expenses such
as litigation.
3. REIMBURSEMENT OF FEES AND EXPENSES. The Advisor retains its right to
receive reimbursement of any excess expense payments paid by it pursuant to this
Agreement made in the prior three fiscal years, to the extent that such
reimbursement would not exceed the Fund's Annual Limit, if applicable, for such
fiscal year.
4. TERM. This Agreement shall become effective on the date specified
herein and shall remain in effect, until December 31, 2008, and thereafter
indefinitely, unless sooner terminated as provided in Paragraph 5 of this
Agreement.
5. TERMINATION. This Agreement may be terminated at any time, and
without payment of any penalty, by the Board of Directors of the Company (the
"Board"), on behalf of each Fund, upon sixty (60) days' written notice to the
Advisor. The Advisor agrees and intends that this commitment will renew
automatically on the first day of each January for a 12 month term unless the
Advisor provides the Board of Directors with notice of termination of this
commitment prior to the expiration of its then current term. This Agreement will
automatically terminate if the Investment Advisory Agreement is terminated, with
such termination effective upon the effective date of the Investment Advisory
Agreement's termination.
6. ASSIGNMENT. This Agreement and all rights and obligations hereunder
may not be assigned without the written consent of the other party.
7. SEVERABILITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute or rule, or shall be otherwise
rendered invalid, the remainder of this Agreement shall not be affected thereby.
8. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Maryland without giving effect to the
conflict of laws principles thereof; provided that nothing herein shall be
construed to preempt, or to be inconsistent with, any federal law, regulation or
rule, including the Investment Company Act of 1940, and the Investment Advisers
Act of 1940, and any rules and regulation promulgated thereunder.
[SIGNATURE PAGE TO FOLLOW]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested by their duly authorized officers, all on the day and
year first above written.
REALTY FUNDS, INC. XSHARES ADVISORS LLC
on behalf of
each of the Funds listed on Appendix A
By: /s/ Xxxxxxx X. Xxxxxxxxx By: /s/ Xxxxx XxXxxxxxx
------------------------ -------------------
Name: Xxxxxxx X. Xxxxxxxxx Name: Xxxxx XxXxxxxxx
Title: President Title: Chief Financial Officer
Exhibit (h)(6)
APPENDIX A
Fund Operating Expense Limit
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Adelante Shares RE Growth(TM) Exchange-Traded Fund 0.58%
Adelante Shares RE Value(TM) Exchange-Traded Fund 0.58%
Adelante Shares RE Classics(TM) Exchange-Traded Fund 0.58%
Adelante Shares RE Kings(TM) Exchange-Traded Fund 0.58%
Adelante Shares RE Yield Plus(TM) Exchange-Traded Fund 0.58%
Adelante Shares RE Shelter(TM) Exchange-Traded Fund 0.58%
Adelante Shares RE Composite(TM) Exchange-Traded Fund 0.58%
