BRAZOS MUTUAL FUNDS OPERATING EXPENSES LIMITATION AGREEMENT
THIS OPERATING EXPENSES LIMITATION
AGREEMENT (the “Agreement”) is effective as of December 1, 2008 by and between
Brazos Mutual Funds, a Delaware statutory trust (the “Trust”), on behalf of each
series and class listed in Appendix A (each, a “Portfolio and, collectively the
“Portfolios”), which may be amended from time to time, as attached hereto, each
a series of the Trust, and the Advisor of the Portfolios, BRAZOS CAPITAL
MANAGEMENT, L.P. (the “Advisor”).
WITNESSETH:
WHEREAS, the Advisor renders advice and
services to the Portfolios pursuant to the terms and provisions of the
Investment Advisory Agreements dated June 25, 1999, as amended, between the
Trust and the Advisor, on behalf of the Micro Cap Portfolio, Small Cap
Portfolio, and Growth Portfolio; and the Investment Advisory Agreement dated
October 14, 1999, as amended, between the Trust and the Advisor, on behalf of
the Mid Cap Portfolio (each an “Investment Advisory Agreement,” and
collectively, the “Investment Advisory Agreements”); and
WHEREAS, each Portfolio is responsible
for, and has assumed the obligation for, payment of certain expenses pursuant to
its Investment Advisory Agreement that have not been assumed by the Advisor;
and
WHEREAS, the Advisor desires to limit
each Portfolio’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
Trust (on behalf of the Portfolios) 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, intended
to be legally bound hereby, mutually agree as follows:
1. Limit on Operating
Expenses. The Advisor hereby agrees to waive all or a portion
of its agreed to advisory fees with respect to the Portfolios under each
Portfolio’s respective Investment Advisory Agreement, and/or reimburse the
Portfolios for Operating Expenses each incurs (if necessary) to the extent
necessary to ensure that the total Operating Expenses of the Portfolios do not
exceed the amounts listed in Appendix A (the
“Annual Limits”) with respect to each Portfolio and each Class, through March
30, 2010. Annual Limits can be altered only with a majority vote of
the Board of Trustees of the Trust.
2. Definition. For
purposes of this Agreement, the term “Operating Expenses” with respect to a
Portfolio and Class is defined to include all expenses necessary or appropriate
for the operation of a Portfolio, including the Advisor’s investment advisory or
management fee detailed in the Investment Advisory Agreement, any Rule 12b-1
fees and other expenses described in the Investment Advisory Agreement, but does
not include any front-end or contingent deferred loads, taxes, leverage
interest, dividends or interest on short positions, other interest expenses,
brokerage commissions, Acquired Fund Fees and Expenses, and expenses incurred in
connection with any merger or reorganization, or extraordinary expenses such as
indemnification and litigation. For purposes of this Paragraph 2,
“Acquired Fund Fees and Expenses” means the indirect fees and expenses that a
Portfolio incurs from investing in the shares of other registered or
unregistered investment companies.
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3. Reimbursement of Fees and
Expenses. The Advisor retains its right to receive
reimbursement of any fee waiver and/or expense payments paid by it pursuant to
this Agreement, made in the prior three years, provided that after giving effect
to such reimbursement, total Operating Expenses (excluding all front-end or
contingent deferred loads, taxes, leverage interest, dividends or interest on
short positions, other interest expenses, brokerage commissions, Acquired Fund
Fees and Expenses, and expenses incurred in connection with any merger or
reorganization, or extraordinary expenses such as indemnification and
litigation, and other costs incurred in connection with the purchase and sale of
securities and extraordinary items) of the Portfolios do not exceed the Annual
Limits listed in Appendix A with
respect to each Portfolio and each Class. If the actual expense ratio
is less than the Annual Limit and the Advisor has recouped any eligible previous
payments, the Portfolio will be charged only such lower expenses.
4. Term. This
Agreement shall become effective on the date specified herein and shall remain
in effect until the termination date indicated on Appendix A, 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 Trustees of the Trust, on behalf of the Portfolios, upon sixty (60)
days written notice to the Advisor. This Agreement may not be
terminated by the Advisor without the consent of the Board of Trustees of the
Trust, which consent will not be unreasonably withheld. This
Agreement will automatically terminate, with respect to each Portfolio listed in
Appendix A, if
the Investment Advisory Agreement for that Portfolio is terminated, with such
termination effective upon the effective date of the Investment Advisory
Agreement’s termination for that Portfolio. No shareholder approval
is required to terminate or amend this agreement.
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. Other
Agreements. This Agreement supersedes any prior Operating
Expense Limitation Agreement between the parties relating to the periods covered
by this Agreement
9. Governing
Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware 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, as amended and the
Investment Advisers Act of 1940, as amended and any rules and regulations
promulgated thereunder.
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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.
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BRAZOS
CAPITAL MANAGEMENT, L.P.
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By: /s/ Xxxxx X.
Xxxxx
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By: /s/ Xxxxx X.
Xxxxxxx
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Print
Name: Xxxxx X.
Xxxxx
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Print
Name: Xxxxx X.
Xxxxxxx
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Title:
President
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Title:
Partner
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Appendix
A
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Operating
Expense Limit
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Portfolio
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Class N
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Class Y
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Termination Date
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Brazos
Micro Cap Portfolio
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1.90%
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1.60%
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Xxxxx
00, 0000
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Xxxxxx
Small Cap Portfolio
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1.65%
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1.35%
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March
30, 2010
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Brazos
Mid Cap Portfolio
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1.55%
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1.20%
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Xxxxx
00, 0000
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Xxxxxx
Growth Portfolio
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1.55%
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1.20%
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March
30, 2010
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Dated:
March ___, 2009
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