EXECUTION VERSION
EXPENSE LIMITATION AGREEMENT
EXPENSE LIMITATION AGREEMENT, effective as of December 19, 2014 by and between
Xxxxxx Capital US LLC (the "Adviser") and Xxxxxx Series Trust (the "Trust")
(the "Agreement"), on behalf of the series of the Trust set forth in Schedule A
attached hereto (each a "Fund," and collectively, the "Funds").
WHEREAS, the Trust is a Delaware statutory trust and is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company of the series type, and each Fund is a series of
the Trust;
WHEREAS, the Trust and the Adviser have entered into an Investment Advisory
Agreement dated December 19, 2014 (the "Advisory Agreement"), pursuant to which
the Adviser provides investment advisory services to each Fund for compensation
based on the value of the average daily net assets of the Funds;
WHEREAS, the Trust and the Adviser have determined that it is appropriate and
in the best interests of each Fund and its shareholders to maintain the
expenses of each Fund at a level at or below the level to which each Fund would
normally be subject in order to maintain each Fund's expense ratio at the
Maximum Annual Operating Expense Limit (as hereinafter defined) specified in
Schedule A hereto;
NOW THEREFORE, the parties hereto agree as follows:
1. EXPENSE LIMITATION.
1.1. APPLICABLE EXPENSE LIMIT. To the extent that the aggregate expenses of
every character incurred by a Fund in any fiscal year, including but not limited
to investment advisory fees of the Adviser (but excluding any class-specific
expenses, interest, taxes, brokerage commissions and other costs and expenses
relating to the securities that are purchased and sold by the Fund, acquired
fund fees and expenses, other expenditures which are capitalized in accordance
with generally accepted accounting principles, and other non-routine expenses
not incurred in the ordinary course of such Fund's business) generated by that
Fund ("Fund Operating Expenses"), exceed the Maximum Annual Operating Expense
Limit, as defined in Section 1.2 below, such excess amount (the "Excess Amount")
shall be the liability of the Adviser.
1.2. MAXIMUM ANNUAL OPERATING EXPENSE LIMIT. The Maximum Annual Operating
Expense Limit with respect to the Fund shall be the amount specified in
Schedule A based on a percentage of the average daily net assets of the Fund.
The Maximum Annual Operating Expense Limit for the Fund contemplates that
certain expenses for the Fund may be paid through the use of all or a portion
of brokerage commissions (or markups or markdowns) generated by the Fund.
1.3. METHOD OF COMPUTATION. To determine the Adviser's liability with respect
to the Excess Amount, each month the Fund Operating Expenses for each Fund
shall be annualized as of the last day of the month. If the annualized Fund
Operating Expenses for any month of a Fund exceed the Maximum Annual Operating
Expense Limit of such Fund, the Adviser shall first
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EXECUTION VERSION
waive or reduce its investment advisory fee for such month by an amount
sufficient to reduce the annualized Fund Operating Expenses to an amount no
higher than the Maximum Annual Operating Expense Limit. If the amount of the
waived or reduced investment advisory fee for any such month is insufficient to
pay the Excess Amount, the Adviser may also remit to the appropriate Fund or
Funds an amount that, together with the waived or reduced investment advisory
fee, is sufficient to pay such Excess Amount.
1.4. YEAR-END ADJUSTMENT. If necessary, on or before the last day of the first
month of each fiscal year (or the termination of this Agreement if sooner), an
adjustment payment shall be made by the appropriate party in order that the
amount of the investment advisory fees waived or reduced and other payments
remitted by the Adviser to the Fund or Funds with respect to the previous
fiscal year shall equal the Excess Amount for such fiscal year.
2. REIMBURSEMENT OF FEE WAIVERS AND EXPENSE REIMBURSEMENTS.
2.1. REIMBURSEMENT. If in any year in which the Advisory Agreement is still in
effect and the estimated aggregate Fund Operating Expenses of such Fund for the
fiscal year are less than the Maximum Annual Operating Expense Limit for that
year, the Adviser shall be entitled to reimbursement by such Fund, in whole or
in part as provided below, of the investment advisory fees waived or reduced and
other payments remitted by the Adviser to such Fund pursuant to Section 1
hereof. The total amount of reimbursement to which the Adviser may be entitled
("Reimbursement Amount") shall equal, at any time, the sum of all investment
advisory fees previously waived or reduced by the Adviser and all other payments
remitted by the Adviser to the Fund, pursuant to Section 1 hereof, during any of
the previous three (3) fiscal years, less any reimbursement previously paid by
such Fund to the Adviser, pursuant to this Section 2.1, with respect to such
waivers, reductions, and payments. The Reimbursement Amount shall not include
any additional charges or fees whatsoever, including, for example, interest
accruable on the Reimbursement Amount. To the extent any reimbursement is made
pursuant to this Section 2.1, such reimbursement shall not cause the Fund
Operating Expenses to exceed the Maximum Annual Operating Expense Limit that was
in place at the time the Adviser waived or reduced its advisory fees or
reimburse other expenses of the Fund.
2.2. BOARD NOTIFICATION. The Fund shall provide to the Board a quarterly
report of any reimbursements paid to the Adviser pursuant to this agreement.
2.3. METHOD OF COMPUTATION. To determine each Fund's accrual, if any, to
reimburse the Adviser for the Reimbursement Amount, each month the Fund
Operating Expenses of each Fund shall be annualized as of the last day of the
month. If the annualized Fund Operating Expenses of a Fund for any month are
less than the Maximum Annual Operating Expense Limit of such Fund, such Fund
shall accrue into its net asset value an amount payable to the Adviser
sufficient to increase the annualized Fund Operating Expenses of that Fund to
an amount no greater than the Maximum Annual Operating Expense Limit of that
Fund, provided that such amount paid to the Adviser will in no event exceed the
total Reimbursement Amount. For accounting purposes, amounts accrued pursuant
to this Section 2 shall be a liability of the Fund for purposes of determining
the Fund's net asset value.
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EXECUTION VERSION
2.4. PAYMENT AND YEAR-END ADJUSTMENT. Amounts accrued pursuant to this
Agreement shall be payable to the Adviser as of the last day of each month. 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 Fund Operating Expenses of the Fund for the prior fiscal year (including
any reimbursement payments hereunder with respect to such fiscal year) do not
exceed the Maximum Annual Operating Expense Limit for such fiscal year.
3. TERM AND TERMINATION OF AGREEMENT.
This Agreement shall continue in effect with respect to the Fund until the date
indicated on Schedule A ("Initial Term End Date") and shall thereafter continue
in effect with respect to each Fund from year to year for successive one-year
periods, provided that this Agreement may be terminated, without payment of any
penalty, with respect to a Fund:
(i) by the Trust, for any reason and at any time;
(ii) by the Adviser, for any reason, upon ninety (90) days' prior written notice
to the Trust at its principal place of business, such termination to be
effective as of the close of business on Initial Term End Date or as of the
close of business on the last day of the then-current one-year period; or at
such earlier time provided that such termination is approved by majority vote of
the Trustees and the Independent Trustees voting separately; and
(iii) by either party effective upon the effective date of the termination of
the Advisory Agreement for any reason.
4. MISCELLANEOUS.
4.1. CAPTIONS. The captions in this Agreement are included for convenience of
reference only and in no other way define or delineate any of the provisions
hereof or otherwise affect their construction or effect.
4.2. INTERPRETATION. Nothing herein contained shall be deemed to require the
Trust or the Fund to take any action contrary to the Trust's Agreement and
Declaration of Trust or by-laws, as amended from time to time, or any
applicable statutory or regulatory requirement to which it is subject or by
which it is bound, or to relieve or deprive the Trust's Board of Trustees of
its responsibility for and control of the conduct of the affairs of the Trust
or the Funds. The parties to this Agreement acknowledge and agree that all
litigation arising hereunder, whether direct or indirect, and of any and every
nature whatsoever shall be satisfied solely out of the assets of the affected
Fund and that no Trustee, officer or holder of shares of beneficial interest of
the Fund shall be personally liable for any of the foregoing liabilities. The
Agreement and Declaration of Trust and by-laws describe in detail the
respective responsibilities and limitations on liability of the Trustees,
officers, and holders of shares of beneficial interest.
4.3. DEFINITIONS. Any question of interpretation of any term or provision of
this Agreement, including but not limited to the investment advisory fee, the
computations of net asset values, and the allocation of expenses, having a
counterpart in or otherwise derived from the terms and
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EXECUTION VERSION
provisions of the Advisory Agreement or the 1940 Act, shall have the same
meaning as and be resolved by reference to such Advisory Agreement or the 0000
Xxx.
4.4. ENFORCEABILITY. Any term or provision of this Agreement which is invalid
or unenforceable in any jurisdiction shall, as to such jurisdiction be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms or provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.
4.5. GOVERNING LAW AND JURISDICTION. This Agreement shall be governed by and
construed in accordance with the substantive laws of the State of Delaware
without giving effect to the conflicts of law principles thereof, and the
parties consent to the jurisdiction of courts, both state or federal, in
Delaware, with respect to any dispute under this Agreement.
4.6. AMENDMENT. This Agreement may not be amended except pursuant to a writing
signed by the parties hereto and in accordance with the 1940 Act, when
applicable.
4.7. 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.
4.8. ENTIRE AGREEMENT. This Agreement, including any schedules hereto (each of
which is incorporated herein and made a part hereof by these references),
represents the entire agreement and understanding of the parties hereto, and
shall supersede any prior agreements.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective officers thereunto duly authorized, as of the day and year
first above written.
XXXXXX SERIES TRUST,
on behalf of the series of the Trust set forth in Schedule A
/s/ Xxxxxxx Xxxxxxx
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Name: Xxxxxxx Xxxxxxx
Title: President
XXXXXX CAPITAL US LLC
/s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: Director, Xxxxxx Capital Group Limited,
Sole Member of Xxxxxx Capital US LLC
EXECUTION VERSION
SCHEDULE A
MAXIMUM ANNUAL OPERATING EXPENSE LIMITS
This Agreement relates to the following Funds of the Trust:
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NAME OF FUND SHARE CLASS MAXIMUM ANNUAL INITIAL TERM
OPERATING EXPENSE END DATE
LIMIT
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Xxxxxx Global Equity
Portfolio Institutional 0.76% February 29, 2016
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Xxxxxx Global Equity
Portfolio Investor 0.76% February 29, 2016
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A-1
