EXPENSE LIMITATION AGREEMENT
EXPENSE LIMITATION AGREEMENT, effective as of __________ __, 2011 by and
between STW Fixed Income Management LLC (the "Adviser") and The Advisors' Inner
Circle Fund II (the "Trust") (the "Agreement"), on behalf of each series of the
Trust set forth in Schedule A attached hereto (each a "Fund," and collectively,
the "Funds").
WHEREAS, the Trust is a Massachusetts voluntary association (commonly known as
a business trust) organized under an Agreement and Declaration of Trust, dated
July 24, 1992, as amended and restated as of February 18, 2004 (the
"Declaration of Trust"), and is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management 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 ___________ __, 2011 (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 each such
Fund;
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 below the level to which each such 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 for
such Fund 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 12b-1 fees,
shareholder servicing fees, interest, taxes, brokerage commissions, acquired
fund fees and expenses, other expenditures which are capitalized in accordance
with generally accepted accounting principles, and other extraordinary expenses
not incurred in the ordinary course of such Fund's business) and expenses for
which payment has been made through the use of all or a portion of brokerage
commissions (or markups or markdowns) 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 each Fund shall be the amount specified in
Schedule A based on a percentage of the average daily net assets of each Fund.
That Maximum Annual Operating Expense Limit for each Fund contemplates that
certain expenses for each Fund may be paid through the use of all or a portion
of brokerage commissions (or markups or markdowns) generated by that 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 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, 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.
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, subject to approval by the Trust's Board of Trustees as provided in
Section 2.2 below, 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, with respect to such waivers, reductions, and payments. The
Reimbursement Amount shall not include any additional charges or fees
whatsoever, including, e.g., interest accruable on the Reimbursement Amount.
2.2. Board Notification. The Board shall be provided 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.
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 a 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.
3. Term and Termination of Agreement.
This Agreement shall continue in effect with respect to each Fund until the
date indicated on Schedule A ("Initial Term End Date") and shall thereafter
continue in effect from year to year for successive one-year periods, provided
that this Agreement may be terminated, without payment of any penalty, with
respect to any such Fund:
(i) by the Trust, for any reason and at any time; and
(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 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.
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 Funds to take any action contrary to the Trust's Declaration of
Trust or By-Laws, 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 Trust's Declaration of Trust, as amended from
time to time, is on file in the Office of the Secretary of State of the
Commonwealth of Massachusetts. Such Declaration of Trust describes 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
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.
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.
THE ADVISORS INNER CIRCLE FUND II,
on behalf of each series of the Trust set forth in Schedule A
_______________________________
Xxxxxx X. Xxxxxxxx
Vice President and Secretary
STW FIXED INCOME MANAGEMENT LLC.
Principal
SCHEDULE A
MAXIMUM ANNUAL OPERATING EXPENSE LIMITS
This Agreement relates to the following Funds of the Trust:
Name of Fund Maximum Annual Initial Term
Operating Expense Limit End Date
STW Short Duration Investment-Grade Bond Fund
Institutional Shares 0.46% November 29, 2014
STW Core Investment-Grade Bond Fund
Institutional Shares 0.46% November 29, 2014
STW Long Duration Investment-Grade Bond Fund
Institutional Shares 0.46% November 29, 2014
STW Broad Tax-Aware Value Bond Fund
Institutional Shares 0.46% November 29, 2014
