FEE WAIVER/EXPENSE REIMBURSEMENT AGREEMENT
THIS FEE WAIVER/EXPENSE REIMBURSEMENT AGREEMENT (the "Agreement"),
effective as of April 5, 2001, is entered into by and among Fund Asset
Management L.P., doing business as Mercury Advisors ("FAM"), acting in its
capacity as the adviser of each series (each, a "Portfolio") of the Quantitative
Master Series Trust (the "Trust"), and as the administrator of each series
(each, a "Fund") of Mercury Index Funds, Inc. (the "Corporation"), the Trust, on
behalf of each Portfolio and the Corporation, on behalf of each Fund.
WHEREAS, each Fund invests all of its assets in a corresponding Portfolio;
WHEREAS, the Board of Directors of the Corporation, the Board of Trustees
of the Trust and FAM have agreed that FAM will waive a portion of it advisory
and administrative fees and/or reimburse the expenses of either the Fund or the
Portfolio to the extent necessary to ensure that the net total operating
expenses incurred by each Fund (excluding 12b-1 fees) do not exceed specified
amounts;
WHEREAS, FAM understands and intends that each Fund will rely on this
Agreement in preparing a registration statement on Form N-1A and in accruing
Fund expenses for purposes of calculating net asset value and for other
purposes, and expressly permits each Fund to do so; and
WHEREAS, shareholders of each Fund will benefit from the ongoing waivers
and/or expense reimbursements by incurring lower Fund operating expenses than
they would absent such waivers and/or expense reimbursements.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, FAM agrees to waive a portion of
its advisory and administrative fees and/or reimburse the expenses of either the
Fund or the Portfolio to the extent necessary to ensure that the net total
operating expenses incurred by each Fund (excluding 12b-1 fees) do not exceed
the following amounts: (i) 0.40% of the Mercury S&P 500 Index Fund; (ii) 0.50%
of the Mercury Small Cap Index Fund; (iii) 0.35% of the Mercury Aggregate Bond
Index Fund; and (iii) 0.65% of the Mercury International Index Fund. The
relative amounts of the fees waived or the expenses reimbursed by FAM will be
determined by FAM in its discretion, so long as the net total operating expenses
incurred by a Fund (excluding 12b-1 fees) do not exceed the amounts stated
above, provided that any waiver of advisory fees by FAM with respect to a
Portfolio will be uniform in respect of each feeder of that Portfolio.
This contractual fee waiver/expense reimbursement shall be effective for
each Fund's current fiscal year and for fiscal years thereafter unless the Board
of Directors of the Corporation, Board of Trustees of the Trust and FAM agree
otherwise not less than 30 days prior to the end of the then current fiscal
year.
IN WITNESS WHEREOF, FAM, the Trust and the Corporation have agreed to this
Fee Waiver/Expense Reimbursement Agreement as of the day and year first above
written.
FUND ASSET MANAGEMENT, L.P.,
By: Princeton Services, Inc.,
its general partner
By:
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Name:
Title:
QUANTITATIVE MASTER SERIES TRUST,
on behalf of each Portfolio
By:
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Name:
Title:
MERCURY INDEX FUNDS, INC.,
on behalf of each Fund
By:
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Name:
Title:
