EXPENSE LIMITATION AGREEMENT
This Agreement is made and entered into effective as of December 17, 2004,
by and between the Xxxxxx Focus Fund and the Xxxxxx Dividend Fund (each a "Fund"
and collectively the "Funds"), each a series of shares of the Xxxxxx Investment
Trust, a Delaware statutory trust (the "Trust"), and T2 Partners Management LP,
a Delaware limited partnership (the "Advisor").
WHEREAS, the Trust is a Delaware statutory trust organized under the
Certificate of Trust ("Trust Instrument"), dated April 22, 2004 and is
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end investment company of the series type; and
WHEREAS, the Funds are series of the Trust; and
WHEREAS, the Funds and the Advisor have entered into an Investment Advisory
Agreement dated December 17, 2004, ("Advisory Agreement"), pursuant to which the
Advisor provides investment advisory services to the Funds; and
WHEREAS, the Funds and the Advisor have determined that it is appropriate
and in the best interests of the Funds and its shareholders to limit the
expenses of the Funds, and, therefore, have entered into this Agreement, in
order to maintain each Fund's expense ratio within the Operating Expense Limit,
as defined below.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Expense Limitation.
(a) Applicable Expense Limit. To the extent that the aggregate expenses of
every character (but excluding interest, taxes, brokerage commissions,
investment advisory and/or variable performance incentive fees paid to the
Advisor, other expenditures which are capitalized in accordance with generally
accepted accounting principles, other extraordinary expenses not incurred in the
ordinary course of the Funds' business, and amounts, if any, payable pursuant to
a plan adopted in accordance with Rule 12b-1 under the 0000 Xxx) incurred by the
Funds in any fiscal year ("Fund Operating Expenses"), exceed the Operating
Expense Limit, as defined in Section 1(b) below, such excess amount (the "Excess
Amount") shall be the liability of the Advisor.
(b) Operating Expense Limit. The maximum operating expense limit
("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.
(c) 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 exceeds the Operating Expense Limit of a Fund,
the Advisor 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 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.
(d) 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. Term and Termination of Agreement.
This Agreement with respect to the Funds shall continue in effect until the
last day of August, 2005, and 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"). Nevertheless, this Agreement may be terminated by either party
hereto, without payment of any penalty, upon written notice ninety (90) days
prior to the end of the then-current term of the Agreement to the other party at
its principal place of business; provided that, in the case of termination by
the Trust, such action shall be authorized by resolution of a majority of the
Non-Interested Trustees of the Trust or by a vote of a majority of the
outstanding voting securities of the Trust. Any termination pursuant to this
paragraph 2 shall become effective, unless otherwise specifically agreed upon,
on the last day of the then-current term of the Agreement.
3. Miscellaneous.
(a) 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.
(b) 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.
(c) 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
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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.
Xxxxxx Focus Fund and Xxxxxx Dividend Fund,
each a series of XXXXXX INVESTMENT TRUST
/s/ Xxxx X. Xxxxxxx
___________________________________
By: Xxxx X. Xxxxxxx
Title: Trustee
T2 PARTNERS MANAGEMENT LP
/s/ Xxxxxxx X. Xxxxxx
___________________________________
By: Xxxxxxx X. Xxxxxx
Title: Managing Partner
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SCHEDULE A
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OPERATING EXPENSE LIMITS
This Agreement relates to the following Funds of the Trust:
Maximum Operating
Name of Fund Expense Limit
------------ ----------------
Xxxxxx Focus Fund 0.45%
Xxxxxx Dividend Fund 0.45%
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