RNC MUTUAL FUND GROUP, INC.
OPERATING EXPENSES AGREEMENT
THIS OPERATING EXPENSES AGREEMENT (the "Agreement") is effective as of
October 1, 1998, by and between RNC MUTUAL FUND GROUP, INC., a California
corporation (the "Group"), on behalf of each series of the Group listed in
Appendix A, as may be amended from time to time (each a "Fund" and collectively
the "Funds"), and the Manager of each of the Funds, RNC CAPITAL MANAGEMENT LLC.
WITNESSETH:
WHEREAS, the Manager renders advice and services to the Funds pursuant to
the terms and provisions of an Investment Management Agreement between the Group
and the Manager dated [___________________] (the "Investment Management
Agreement"); and
WHEREAS, the Funds are responsible for, and have assumed the obligation
for, payment of certain expenses pursuant to Subparagraph 7(b) of the Investment
Management Agreement that have not been assumed by the Manager; and
WHEREAS, the Manager desires to limit the Funds' respective Operating
Expenses (as that term is defined in Paragraph 2 of this Agreement) pursuant to
the terms and provisions of this Agreement, and the Group (on behalf of the
Funds) desires to allow the Manager 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 Manager hereby agrees to limit
each Fund's Operating Expenses to the respective annual rate of
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total Operating Expenses specified for that Fund in APPENDIX A of this
Agreement.
2. DEFINITION. For purposes of this Agreement, the term "Operating
Expenses" with respect to a Fund is defined to include all expenses
necessary or appropriate for the operation of the Fund including the
Manager's investment advisory or management fee under Paragraph 8 of the
Investment Management Agreement, and other expenses described in Paragraph
7 of the Investment Management Agreement, but does not include any Rule
12b-1 fees, front-end or contingent deferred loads, taxes, 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 Manager, under Subparagraph
8(d) of the Investment Management Agreement, retains its right to receive
reimbursement of reductions of its investment management fee and Operating
Expenses paid by it that are not its responsibility under Paragraph 7 of
the Investment Management Agreement.
4. TERM. This Agreement shall become effective on the date specified
herein and shall remain in effect for a period of one (1) year, unless
sooner terminated as provided in Paragraph 5 of this Agreement. This
Agreement shall continue in effect thereafter for additional periods not
exceeding one (1) year so long as such continuation is approved for each
Fund at least annually by the Board of Directors of the Group (and
separately by the disinterested Directors of the Group).
5. TERMINATION. This Agreement may be terminated by the Group on
behalf of any one or more of the Funds at any time without payment
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of any penalty or by the Board of Directors of the Group, upon sixty (60)
days' written notice to the Manager. The Manager may decline to renew this
Agreement by written notice to the Group at least thirty (30) days before
its annual expiration date.
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. CAPTIONS. The captions in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction of effect.
9. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of California 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.
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. RNC MUTUAL FUND GROUP, INC. RNC CAPITAL MANAGEMENT LLC
By: By:
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Title: Title:
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APPENDIX A
Fund Operating Expense Limit
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+ RNC Equity Fund 1.65%
+ RNC Money Market Fund 0.90%
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