Exhibit (d)(2)
EXPENSE LIMITATION AGREEMENT
XXXXXXX CAPITAL MUTUAL FUNDS
This EXPENSE LIMITATION AGREEMENT, is made as of November 21, 2006 by and
between Xxxxxxx Capital Advisors, LLC (the "Adviser") and Xxxxxxx Capital Mutual
Funds on behalf of its series Xxxxxxx Capital Mid Cap Fund (the "Fund").
WHEREAS, the Fund is a Delaware business trust, and will be registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), as an
open-end management investment company; and
WHEREAS, the Adviser bore the costs and expenses of creating and organizing
the Xxxxxxx Capital Mutual Funds and the Fund, the costs and expenses of
initially registering the Fund and its shares with the Securities and Exchange
Commission and other related costs and expenses (collectively, "Organizational
Expenses"); and
WHEREAS, the Fund and the Adviser have entered into an investment advisory
agreement dated as of November 21, 2006, (the "Investment Advisory Agreement"),
pursuant to which the Adviser provides investment management services to the
Fund for compensation based on the value of the Fund's average daily net assets;
and
WHEREAS, the Fund and the Adviser have determined that it is appropriate
and in the best interests of the Fund and its shareholders to maintain the
expenses of the Fund at a level below the level to which the Fund may normally
be subject;
NOW THEREFORE, the parties hereto agree as follows:
1. EXPENSE LIMITATION
1.1. APPLICABLE EXPENSE LIMIT. To the extent that the annual Fund Operating
Expenses (defined below) in any fiscal year exceed the Operating Expense Limit
(as defined in Section 1.2 below), the Adviser shall be obligated to reimburse
the Fund for such excess amount (the "Excess Amount"). For purposes of this
Agreement, annual Fund Operating Expenses shall mean the Fund's annual operating
expenses (within the meaning set forth in Item 3 of Form N-1A, or any successor
provision or form) for any fiscal year that are not specifically borne by the
Adviser, the Fund's administrator or the Fund's principal underwriter pursuant
to express provisions in the written agreement between each such entity and the
Fund, including, but not limited to, investment advisory fees, administrative
fees, custodial fees, fund and shareholder accounting fees, Rule 12b-1
distribution and shareholder serving fees, fees and costs for necessary legal,
auditing, accounting and other professional services and costs associated with
regulatory compliance. Annual Fund Operating Expenses shall not include
interest, taxes, transaction costs (such as brokerage commissions and expenses
relating to dividends on short sales), fees and expenses of any counsel or other
persons or services retained by the Fund's independent trustees, or
extraordinary or non-recurring Fund expenses (including, but not limited to,
litigation and indemnification costs, expenses of any reorganization,
restructuring or merger of the Fund or acquisition of all or substantially all
of the assets of another fund, expenses associated with special meetings of Fund
shareholders, expenses of converting to a new custodian, transfer agent or other
service provider or any other expenses not incurred in the ordinary course of
the Fund's business).
This Agreement is applicable only to the Fund and shall not be applicable
to any other series of Xxxxxxx Capital Mutual Funds hereafter created.
1.2. OPERATING EXPENSE LIMIT. The Operating Expense Limit in any fiscal
year with respect to the Fund shall be the amount, expressed as a percentage of
the average daily net assets of the Fund set forth in Schedule A.
1.3. METHOD OF COMPUTATION. To determine the Adviser's obligation with
respect to the Excess Amount, each day the Fund Operating Expenses for the Fund
shall be annualized. If the annualized Fund Operating Expenses for any day
exceed the Operating Expense Limit, the Adviser shall remit to the Fund an
amount that, together with any offset, waived or reduced advisory fees, is
sufficient to pay that day's 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 with
respect to the previous fiscal year shall equal the Excess Amount.
1.5 FEE WAIVER AND EXPENSE REIMBURSEMENT LIMIT. Notwithstanding the
foregoing, the Adviser's fee waiver and expense reimbursement obligation to the
Fund pursuant to this Agreement with respect to any fiscal year shall not exceed
the investment advisory fees earned by the Adviser from the Fund during such
fiscal year pursuant to the Investment Advisory Agreement.
2. RECOUPMENT OF FEE WAIVERS, EXPENSE REIMBURSEMENTS AND ORGANIZATIONAL
EXPENSES
2.1. RECOUPMENT. On any day during which this Agreement is in effect, to
the extent that the Operating Expense Limit exceeds the estimated annualized
Fund Operating Expenses for that day (the "Excess Amount"), the Adviser shall be
entitled to recoup from the Fund any unrecouped investment advisory fees waived
or reduced and other payments remitted by the Adviser to the Fund pursuant to
Section 1 of this Agreement (the "Recoupment Amount") during any of the previous
thirty-six (36) months (for this purpose, any waivers, reductions or payments
shall be deemed to be recouped by the Adviser in the same order in which such
amounts were initially waived, reduced or paid) in the amount of such excess. To
the extent that the Excess Amount exceeds the Recoupment Amount, the Adviser
shall also be entitled to recoup any unrecouped Organizational Expenses.
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 Fund Operating Expenses for the prior
fiscal year (including any recoupment payments pursuant to Section 2.1 with
respect to such fiscal year) do not exceed the Operating Expense Limit.
3. TERM AND TERMINATION OF AGREEMENT
The initial term of this Agreement shall be coextensive with the initial
term of the Investment Advisory Agreement. Thereafter, this Agreement shall
automatically renew for successive one-year terms, but only so long as such
continuance is specifically approved at least annually (i) by the Board of
Trustees or by the vote of a majority (as defined in the 0000 Xxx) of the
outstanding voting securities of the Fund, and (ii) by the vote of a majority of
the Fund's trustees who are not parties to this Agreement or "interested
persons" (as defined in the 0000 Xxx) of the Adviser or the Fund cast in person
at a meeting called for the purpose of voting on such approval. In addition,
this Agreement shall automatically terminate upon the termination of the
Investment Advisory Agreement.
4. MISCELLANEOUS
4.1 NOTICES. 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.
4.2 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 Delaware shall otherwise govern the construction, validity and effect
of this Agreement.
4.3 AMENDMENTS. This Agreement may be amended only by a written agreement
signed by each of the parties.
4.4 LIMITATION OF LIABILITY. The Adviser agrees that it shall look only to
the assets of the Fund for performance of this Agreement and for payment of any
claim it may have hereunder, and that neither any other series of the Trust
hereafter created, nor any of the Trust's trustees, officers, employees, agents,
or shareholders, whether past, present or future, shall be personally liable
therefore.
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.
XXXXXXX CAPITAL MUTUAL FUNDS
By:
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Name:
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Title:
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XXXXXXX CAPITAL ADVISORS, LLC
By:
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Name:
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Title:
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SCHEDULE A OPERATING EXPENSE LIMIT
Name of Fund Maximum Operating Expense Limit
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Xxxxxxx Capital Mid Cap Fund 1.50%
