EXPENSE LIMITATION AGREEMENT
EXPENSE LIMITATION AGREEMENT, effective as of November 29, 2010 by and between
Xxxxx Xxxx Investment Advisors, Inc. (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 and August 10,
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 January 27, 2009 (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 ratios 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 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 2.3 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 or pursuant to any prior agreement that provided for
reimbursement to the Adviser in the manner contemplated herein (a "Prior
Agreement"). 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
or pursuant to a Prior Agreement, 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. REIMBURSEMENT UNDER PRIOR AGREEMENTS. Notwithstanding Section 2.1, the
Adviser shall not be entitled to reimbursement of amounts waived or fees
reduced pursuant to a Prior Agreement unless Fund Operating Expenses are less
than the maximum annual operating expense limit established by the Prior
Agreement.
2.3. BOARD APPROVAL. No reimbursement shall be paid to the Adviser with respect
to any Fund pursuant to this Section 2 unless the Trust's Board of Trustees has
determined in advance that the payment of such reimbursement to the Adviser is
in the best interests of such Fund and its shareholders.
2.4. 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.
2.5. 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 all Funds until
November 29, 2011 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 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
/s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx
Vice President and Secretary
XXXXX XXXX INVESTMENT ADVISORS, INC.
/s/ Xxxx Xxxxxx
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By: Xxxx Xxxxxx
Title: CCO
SCHEDULE A
TO THE EXPENSE LIMITATION AGREEMENT
EFFECTIVE NOVEMBER, 29, 2010 BETWEEN
THE ADVISORS' INNER CIRCLE FUND II
AND
XXXXX XXXX INVESTMENT ADVISORS, INC.
MAXIMUM ANNUAL OPERATING EXPENSE LIMITS
This Agreement relates to the following Funds of the Trust:
NAME OF FUND MAXIMUM ANNUAL OPERATING EXPENSE LIMIT
INVESTOR CLASS SHARES
Clear River Fund 1.20%
