XXXXXXX XXXXX INVESTMENT TRUST
EXPENSE LIMITATION AGREEMENT
THIS AGREEMENT is made and entered into effective as of February 28, 2009 by and
between Xxxxxxx Xxxxx Investment Trust, a Massachusetts business trust (the
"Trust"), on behalf of each series portfolio of the Trust set forth on Exhibit A
attached hereto and incorporated by this reference, (each a "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 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 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.
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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 incurred under a plan of distribution adopted pursuant to
Rule 12b-1 under the 1940 Act), incurred by the Fund during the term
of this Agreement ("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 Adviser. In
determining the Fund Operating Expenses, expenses that the 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 Adviser. Additionally,
fees reimbursed to the Fund relating to brokerage/services
arrangements shall not be taken into account in determining the Fund
Operating Expenses so as to benefit the Adviser. Finally, the
Operating Expense Limit described in this Agreement excludes 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 limit
(the "Operating Expense Limit") 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.
SLD-1490378-3 1 Expense Limitation Agreement
(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 for that month 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 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 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 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 after the conclusion of the term of this Agreement, an
adjustment payment shall be made by the appropriate party in order
that the amount of the investment advisory fees reduced and other
payments remitted by the Adviser to the Fund during the term of the
Agreement shall equal the Excess Amount.
2. REIMBURSEMENT OF FEE REDUCTIONS 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
the Fund for the term of this Agreement are less than the Operating
Expense Limit, the Adviser, shall be entitled to reimbursement by
the Fund, in whole or in part as provided below, of the fees reduced
by the Adviser and other payments remitted by the Adviser to the
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 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)
years, less any reimbursement previously paid by the Fund to the
Adviser pursuant to this Section 2, with respect to such 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 for that month 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 the Fund, the 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 after the conclusion of the term of this Agreement, an
adjustment payment shall be made by the appropriate party in order
that the actual Fund Operating Expenses of the Fund for the term of
the Agreement (including any reimbursement payments hereunder with
respect to such period) do not exceed the Operating Expense Limit.
SLD-1490378-3 2 Expense Limitation Agreement
(d) LIMITATION OF LIABILITY. The Adviser shall look only to the assets
of the Fund for which it 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.
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 Limit, 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.
[Signature page follows.]
SLD-1490378-3 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
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X. Xxxxxxxxx Xxxxxxx, Chairman
XXXXXXX XXXXX ASSET MANAGEMENT L.P.
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X. Xxxxxxxxx Xxxxxxx, Chairman
SLD-1490378-3 4 Expense Limitation Agreement
SCHEDULE A
TO THE
EXPENSE LIMITATION AGREEMENT
BETWEEN
XXXXXXX XXXXX INVESTMENT TRUST
AND
XXXXXXX XXXXX ASSET MANAGEMENT L.P.
DATED AS OF FEBRUARY 28, 2009
FUND OPERATING EXPENSE LIMIT EFFECTIVE DATE EXPIRATION DATE
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The Chesapeake Core Growth Fund 1.15% March 1, 2009 February 28, 2010
SLD-1490378-3 A-1 Expense Limitation Agreement
