EXPENSE LIMITATION AGREEMENT
EXPENSE LIMITATION AGREEMENT, effective as of May 31, 2006 by and between
Horizon Advisers, an unincorporated division of Xxxxxxx Bank (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 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 May 31, 2000 as amended and restated as of May 21, 2001 (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 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, 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 payable
pursuant to any plan adopted in accordance with Rule 12b-1 under the 0000 Xxx)
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.
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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. TERM AND TERMINATION OF AGREEMENT.
This Agreement shall continue in effect with respect to all Funds until May 31,
2006 and shall thereafter continue in effect with respect to each Fund from year
to year provided such continuance is specifically approved by a majority of the
Trustees of the Trust who are not "interested persons" of the Trust or any other
party to this Agreement, as defined in the 1940 Act ("Non-Interested Trustees").
Nevertheless, this Agreement may be terminated by either party hereto, without
payment of any penalty, upon ninety (90) days' prior written notice to the other
party at its principal place of business; provided that, in the case of
termination by the Adviser, 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.
3. MISCELLANEOUS.
3.1. 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.
3.2. 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.
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3.3. 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.
3.4. 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/ XXX XXXXXX
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Name: Xxx Xxxxxx
Title: Vice President and Secretary
XXXXXXX BANK, ON BEHALF OF HORIZON ADVISERS, AN UNINCORPORATED DIVISION OF
XXXXXXX BANK
/s/ XXXXX XXXXXXXX
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Name: Xxxxx Xxxxxxxx
Title: Vice President
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SCHEDULE A
MAXIMUM ANNUAL OPERATING EXPENSE LIMITS
This Agreement relates to the following Funds of the Trust:
NAME OF FUND MAXIMUM ANNUAL OPERATING EXPENSE LIMIT
Treasury Securities Money Market Fund
Trust Class 0.58%
Institutional Sweep Class 0.83%
Class A Shares 1.08%
Strategic Income Bond Fund
Trust Class 0.75%
Class A 1.00%
Class C 1.75%
Burkenroad Fund
Class A 1.40%
Class D 1.65%
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