EXPENSE LIMITATION AGREEMENT BROWN CAPITAL MANAGEMENT MUTUAL FUNDS
EXPENSE LIMITATION AGREEMENT
XXXXX CAPITAL MANAGEMENT MUTUAL FUNDS
THIS EXPENSE
LIMITATION AGREEMENT (“Expense Limitation Agreement”), is entered into
effective as of July 14, 2011 by and between Xxxxx Capital Management, LLC (the
“Advisor”) and Xxxxx Capital Management Mutual Funds (the “Trust”), 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 Delaware statutory trust organized under the Agreement and Declaration
of Trust (“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; and
WHEREAS, the Trust and the Advisor have entered into an Investment Advisory Agreement relating
to the Funds (the “Advisory Agreement”) pursuant to which the Advisor
provides investment advisory services to each Fund listed in Schedule A,
which may be amended from time to time, for compensation based on the value of the
average daily net assets of each such Fund; and
WHEREAS, the Trust and the Advisor
have determined that it is appropriate and in the best interests of each Fund and
its shareholders to maintain the expenses of each Fund, and, therefore, have entered
into this Expense Limitation Agreement, in order to maintain each Fund’s expense
ratios at the levels specified Schedule A attached hereto; and
NOW THEREFORE, the parties hereto agree that the Expense Limitation Agreement provides 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 Advisor (but excluding interest,
taxes, brokerage commissions, acquired fund fees and expenses, other expenditures
which are capitalized in accordance with generally accepted accounting principles,
other extraordinary expenses not incurred in the ordinary course of such Fund’s
business, and amounts, if any, payable pursuant to a plan adopted in accordance
with Rule 12b-1 under the 1940 Act) (“Fund Operating Expenses”), exceed
the Operating Expense Limit, as defined in Section 1.2 below, such excess amount
(the “Excess Amount”) shall be the liability of the Advisor. Additionally,
in determining the Fund Operating Expenses, expenses that a Fund would have incurred
but did not actually pay because of expense offset or brokerage/services arrangements
shall be added to the aggregate expenses so as not to benefit the Advisor.
1.2. Operating Expense Limit. The maximum Operating Expense Limit in any year 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.
1.3. Method of Computation. To
determine the Advisor’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 Operating Expense Limit of such Fund, the Advisor shall first waive or
reduce its investment advisory fee for such
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month by an amount sufficient to reduce the annualized Fund Operating Expenses to an amount no higher than the 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 Advisor 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 Advisor 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 during which the total assets
of a Fund are greater than the “Threshold” set forth in Schedule A, and
in which the Advisory Agreement is still in effect, the estimated aggregate Fund
Operating Expenses of such Fund for the fiscal year are less than the Operating
Expense Limit for that year, subject to quarterly approval by the Trust’s Board
of Trustees as provided in Section 2.2 below, the Advisor 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 Advisor to such Fund pursuant
to Section 1 hereof. The total amount of reimbursement to which the Advisor may
be entitled (the “Reimbursement Amount”) shall equal, at any time, the
sum of all investment advisory fees previously waived or reduced by the Advisor
and all other payments remitted by the Advisor 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 Advisor, pursuant to Sections 2.2 or 2.3 hereof,
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 Approval. No reimbursement
shall be paid to the Advisor with respect to any Fund pursuant to this provision in any fiscal quarter, unless the Trust’s Board of Trustees has determined
that the payment of such reimbursement is in the best interests of such Fund and its shareholders. The Trust’s Board of Trustees shall determine quarterly in
advance whether any reimbursement may be paid to the Advisor with respect to any Fund in such quarter.
2.3. Method of Computation. To determine each Fund’s
payments, if any, to reimburse the Advisor 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 Operating Expense Limit of such Fund, such Fund, only with the
prior approval of the Trust’s Board of Trustees, shall pay to the Advisor an
amount sufficient to increase the annualized Fund Operating Expenses of that Fund
to an amount no greater than the Operating Expense Limit of that Fund, provided
that such amount paid to the Advisor will in no event exceed the total Reimbursement
Amount.
2.4. 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 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 Operating Expense Limit.
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3. Term and Termination of
Agreement.
This
Agreement with respect to each of the Funds shall commence on December 1,
2011 and continue in effect until the last day of July 2013, and
shall continue from year to year thereafter provided each such
continuance is specifically approved by a majority of the Trustees of
the Trust who (i) are not “interested persons” of the Trust
or any other party to this Agreement, as defined in the 1940 Act, and
(ii) have no direct or indirect financial interest in the operation
of this Agreement (“Non-Interested
Trustees”).
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.
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 1940 Act.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by their respective officers thereunto duly authorized and their respective corporate seals to be hereunto affixed, as of the day and year first above written.
| XXXXX CAPITAL MANAGEMENT MUTUAL FUNDS ON | |
| BEHALF OF EACH OF ITS SERIES LISTED IN SCHEDULE | |
| A | |
| By:__________________________ | |
| XXXXX CAPITAL MANAGEMENT, LLC. | |
| By:__________________________ |
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SCHEDULE A
OPERATING EXPENSE LIMITS
This Agreement relates to the following Funds
of the Trust:
| Maximum | ||||||
| Name of Fund | Operating | |||||
| Expense Limit | Threshold | |||||
| The Xxxxx Capital Management Small Company Fund | 1.25 | % | $20 Million | |||
| The Xxxxx Capital Management International Equity Fund | 1.75 | % | $20 Million | |||
| The Xxxxx Capital Management Mid-Cap Fund | 0.90 | % | $15 Million | |||
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