EXPENSE LIMITATION AGREEMENT
This Agreement is made by and between Investors Xxxx Series Fund, Inc.,
a Maryland corporation (the "Company") on behalf of each of its series as listed
on Schedule A (each a "Portfolio" or collectively, "Portfolios"), and Investors
Xxxx Advisor, LLC, a Delaware limited liability company ("IMA").
R E C I T A LS
WHEREAS, the Company is registered as an open-end management investment
company under the Investment Company Act of 1940 (the "1940 Act"); and
WHEREAS, the Company and IMA have entered into an Investment Advisory
Agreement dated ________________, 2003 (the "Advisory Agreement") and the
Company and IMA have entered into an Administrative Services Agreement dated
___________, 2003 (the "Administrative Services Agreement") pursuant to which
Xxxxx & Xxxxxx, Inc. provides services to the Company for compensation based on
the value of the average daily net assets of each Portfolio; and
WHEREAS, the Company and IMA have determined that it is appropriate and
in the best interests of the Company and its shareholders to maintain the
expenses of each Portfolio at a level below the level to which each Portfolio
may otherwise be subject.
NOW THEREFORE, in consideration of the mutual covenants contained in
this Agreement, the parties agree as follows:
1. Expense Limitation.
1.1 Portfolio Operating Expenses; Excess Amount. To the extent that the
"Annual Portfolio Operating Expenses" (within the meaning of Item 3 of Form
N-1A) incurred by each Portfolio in any fiscal year, but excluding brokerage and
other investment-related costs, interest, taxes, dues, fees and other charges of
governments and their agencies including the cost of qualifying each Portfolio's
shares for sale in any jurisdiction, extraordinary expenses such as litigation
(including legal and audit fees and other costs in contemplation of or incident
thereto) and indemnification and other expenses not incurred in the ordinary
course of each Portfolio's business ("Portfolio Operating Expenses"), exceed the
Operating Expense Limit (as defined in Section 1.2 below), IMA shall be
obligated to reimburse each Portfolio for such excess amount (the "Excess
Amount").
1.2. Operating Expense Limit. The Operating Expense Limit in any fiscal
year with respect to each Portfolio shall be the amount, expressed as a
percentage of the average daily net assets of each Portfolio, set forth in
Schedule A.
1.3. Method of Computation. To determine IMA's obligation with respect
to the Excess Amount, each day the Portfolio Operating Expenses for each
Portfolio shall be annualized. If the annualized Portfolio Operating Expenses
for any day of a Portfolio exceed the Operating Expense Limit for the Portfolio,
IMA shall remit to the respective Portfolio an amount that, together with any
offset of waived or reduced advisory or administrative services fees, is
sufficient to pay that day's Excess Amount. Each Portfolio may offset amounts
owed to the Portfolio pursuant to this Agreement against the fees payable to IMA
pursuant to the Advisory Agreement or Xxxxx & Babson, Inc. pursuant to the
Administrative Services Agreement.
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 services fees waived or
reduced and other payments remitted by Xxxxx & Xxxxxx, Inc. or IMA to the
respective Portfolio with respect to the previous fiscal year shall equal the
Excess Amount.
2. Recoupment of Fee Waivers and Expense Reimbursements.
2.1. Recoupment. If on any day during which this Agreement is in
effect, the estimated annualized Portfolio Operating Expenses of a Portfolio for
that day are less than the Operating Expense Limit, IMA shall be entitled to
recoup from the Portfolio the services fees waived or reduced and other payments
remitted by IMA to the respective Portfolio pursuant to Section 1 of this
Agreement (the "Recoupment Amount") during any of the previous thirty-six (36)
months, to the extent that the respective Portfolio's annualized Portfolio
Operating Expenses plus the amount so recouped equals, for such day, the
Operating Expense Limit provided in Schedule A, provided that such amount paid
to IMA will in no event exceed the total Recoupment Amount and will not include
any amounts previously recouped. In no event may any fees waived or expenses
reimbursed during the initial two years of this Agreement ever be recouped.
2.2. 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 actual Portfolio Operating Expenses of the
respective Portfolio for the prior fiscal year (including any recoupment
payments with respect to such fiscal year) do not exceed the Operating Expense
Limit.
3. Term and Termination of Agreement. This Agreement shall become
effective on __________________, 2003 and shall continue for an initial period
of two years. Thereafter, this Agreement may be terminated by the Company at any
time, without the payment of any penalty, or by IMA upon 60 days' prior written
notice to the Company. In addition, this Agreement shall automatically terminate
upon the termination of the Advisory Agreement, unless such termination of the
Advisory Agreement occurs in connection with a transfer of the advisory
relationship to an affiliate of IMA.
4. Notice. Any notice under this Agreement shall be in writing,
addressed, delivered or mailed, postage prepaid, to the other party at such
address as such other party may designate in writing for receipt of such notice.
5. Interpretation; Governing Law. This Agreement shall be subject to
and interpreted in accordance with all applicable provisions of law including,
but not limited to, the 1940 Act, and the rules and regulations promulgated
under the 1940 Act. To the extent that the provisions of this Agreement conflict
with any such applicable provisions of law, the latter shall control. The laws
of the State of Maryland shall otherwise govern the construction, validity and
effect of this Agreement.
6. Amendments. This Agreement may be amended only by a written
agreement signed by each of the parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers as of _____________________, 2003.
INVESTORS XXXX SERIES FUND, INC.
By: _________________________________
Name:
Title:
INVESTORS XXXX ADVISOR, LLC
By: _________________________________
Name:
Title:
Schedule A
Portfolio Operating Expense Limit
Mid Cap Equity Portfolio .90%
Large Cap Growth Portfolio .90%
Large Cap Value Portfolio .90%
Growth & Income Portfolio .90%
Balanced Portfolio .90%
Intermediate Fixed Income Portfolio .80%
Money Market Portfolio .50%
Global Fixed Income Portfolio 1.00%
Small Cap Equity Portfolio 1.05%
