XXXXXXX XXXXX INVESTMENT TRUST
EXPENSE LIMITATION AGREEMENT
THIS AGREEMENT is made and entered into effective as of February 28, 2008 by and
between Xxxxxxx Xxxxx Investment Trust, a Massachusetts business trust (the
"Trust"), on behalf of The Chesapeake Growth Fund, (the "Fund"), and Xxxxxxx
Xxxxx Asset Management, L.P., a Pennsylvania limited partnership (the
"Adviser").
WHEREAS, the Trust is a Massachusetts business trust organized under the
Declaration of Trust ("Trust Instrument"), dated January 22, 1995 and is
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end management investment company of the series type; and
WHEREAS, the Fund is a series of the Trust; and
WHEREAS, the Trust, on behalf of the Fund, and the Adviser have entered into an
Investment Advisory Agreement ("Advisory Agreement"), pursuant to which the
Adviser provides investment advisory services to the Fund; 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 limit the expenses of the
Fund, and, therefore, have determined to enter into this Agreement, in order to
maintain the Fund's expense ratios 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.
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(a) APPLICABLE EXPENSE LIMIT. To the extent that the aggregate expenses
of every character, including but not limited to investment advisory
fees of the Adviser (but excluding (i) interest, (ii) taxes, (iii)
brokerage commissions, (iv) other expenditures which are capitalized
in accordance with generally accepted accounting principles, (v)
other extraordinary expenses not incurred in the ordinary course of
the Fund's business, (vi) dividend expense on short sales, and (vii)
expenses that the Fund has incurred but did not actually pay because
of an expense offset arrangement, if applicable, incurred by the
Fund in any fiscal year ("Fund Operating Expenses"), that exceed the
Operating Expense Limit, as defined in Section 1(b) below, such
excess amount (the "Excess Amount") shall be the liability of the
Adviser. The Operating Expense Limits described in this Agreement
also exclude any "acquired fund fees and expenses" as that term is
described in the prospectus of the Fund.
(b) OPERATING EXPENSE LIMIT. The Fund's maximum operating expense limits
(each an "Operating Expense Limit") in any year shall be that
percentage of the average daily net assets of the Fund as set forth
on SCHEDULE A attached hereto and incorporated by this reference.
(c) METHOD OF COMPUTATION. To determine the Adviser's liability with
respect to the Excess Amount, each month the Fund Operating Expenses
for the 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 the Fund, the Adviser shall first waive
or reduce its investment advisory fee for such month by an amount
sufficient to reduce the
KC-1577828-2 1 Expense Limitation Agreement
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 Adviser shall also remit to the Fund 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
Adviser to the Fund with respect to the previous fiscal year shall
equal the Excess Amount.
2. REIMBURSEMENT OF FEE WAIVERS AND EXPENSE REIMBURSEMENTS.
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(a) REIMBURSEMENT. If in any year 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, the Adviser, shall be entitled to reimbursement
by such Fund, in whole or in part as provided below, of the fees
waived or reduced by the Adviser and other payments remitted by the
Adviser to such Fund pursuant to Section 1 hereof. The total amount
of reimbursement to which the Adviser may be entitled
("Reimbursement Amount") shall equal, at any time, the sum of all
fees previously waived or reduced by the Adviser and all other
payments remitted by the Adviser 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 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.
(b) METHOD OF COMPUTATION. To determine the Fund's accrual, if any, to
reimburse the Adviser for the Reimbursement Amount, each month the
Fund Operating Expenses of the Fund shall be annualized as of the
last day of the month. If the annualized Fund Operating Expenses of
the Fund for any month are less than the 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 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, when the annualized Fund Operating
Expenses of the Fund are below the Operating Expense Limit, a
liability will be accrued daily for these amounts.
(c) 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 the Fund for the prior fiscal year (including any
reimbursement payments hereunder with respect to such fiscal year)
does not exceed the Operating Expense Limit.
(d) LIMITATION OF LIABILITY. The Adviser shall look only to the assets
of the Fund for which it waived or reduced fees or remitted payments
for reimbursement under this Agreement and for payment of any claim
hereunder, and neither the Fund, nor any of the Trust's directors,
officers, employees, agents, or shareholders, whether past, present
or future shall be personally liable therefor.
KC-1577828-2 2 Expense Limitation Agreement
3. TERM, MODIFICATION AND TERMINATION OF AGREEMENT.
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This Agreement shall continue in effect until the expiration date set
forth on SCHEDULE A (the "Expiration Date"). With regard to the Operating
Expense Limits, the Trust's Board of Trustees and the Adviser may
terminate or modify this Agreement prior to the Expiration Date only by
mutual written consent. This Agreement shall terminate automatically upon
the termination of the Advisory Agreement; provided, however, that the
obligation of the Trust to reimburse the Adviser with respect to the Fund
shall survive the termination of this Agreement unless the Trust and the
Adviser agree otherwise.
4. MISCELLANEOUS.
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(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 Fund to take any action contrary to the Trust's
Declaration of Trust or bylaws, 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 Fund.
(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 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.
KC-1577828-2 3 Expense Limitation Agreement
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.
XXXXXXX XXXXX INVESTMENT TRUST
/s/ X. Xxxxxxxxx Xxxxxxx
X. Xxxxxxxxx Xxxxxxx, Chairman
XXXXXXX XXXXX ASSET MANAGEMENT L.P.
/s/ X. Xxxxxxxxx Xxxxxxx
X. Xxxxxxxxx Xxxxxxx, Chairman
KC-1577828-2 4 Expense Limitation Agreement
SCHEDULE A
TO THE
EXPENSE LIMITATION AGREEMENT
BETWEEN
XXXXXXX XXXXX INVESTMENT TRUST (THE "TRUST")
AND
XXXXXXX XXXXX ASSET MANAGEMENT L.P. (THE "ADVISER")
DATED AS OF FEBRUARY 28, 2008
FUND OPERATING EXPENSE LIMIT EFFECTIVE DATE EXPIRATION DATE
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The Chesapeake Growth Fund
Institutional Class Shares 1.39% March 1, 2008 February 28, 2009
Class A Shares 1.64% March 1, 2008 February 28, 2009
KC-1577828-2 A-1 Expense Limitation Agreement
