EXPENSE LIMITATION AGREEMENT
EXPENSE LIMITATION AGREEMENT, effective as of May 30, 2014 by and between UBS
X'Xxxxxx LLC (the "Adviser") and X'Xxxxxx EQUUS (the "Fund") (the "Agreement").
WHEREAS, the Fund is a Delaware statutory trust organized under an Agreement
and Declaration of Trust, dated February 3, 2014 and is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as a closed-end,
non-diversified management investment company;
WHEREAS, the Fund and the Adviser have entered into an Investment Advisory
Agreement dated May 30, 2014 (the "Advisory Agreement"), pursuant to which the
Adviser provides investment advisory services to the Fund for compensation
based on the value of the average daily net assets of the Fund;
WHEREAS, the Fund and the Adviser have determined that it is appropriate and in
the best interests of the Fund and its shareholders to maintain the expenses of
the Fund at a level below the level to which the Fund would normally be
subject;
NOW THEREFORE, the parties hereto agree as follows:
1. EXPENSE LIMITATION.
1.1. APPLICABLE EXPENSE LIMIT. The Adviser agrees to waive its fees and/or
reimburse the Fund's expenses in order to keep the Fund's "Other Fund Operating
Expenses" (as shown in the Fee Table in the Fund's Prospectus), exclusive of
interest from borrowing, brokerage commissions, legal fees in connection with
due diligence on Fund portfolio transactions, taxes and other non-routine
expenses not incurred in the ordinary course of the Fund's business, from
exceeding the Maximum Other Fund Operating Expense Limit, as defined in Section
1.2 below. Any Other Fund Operating Expenses incurred by the Fund in excess of
the Maximum Other Fund Operating Expense Limit (the "Excess Amount") shall be
the liability of the Adviser. For the avoidance of doubt, the Adviser may be
separately reimbursed for such liability from one or more of its affiliates.
1.2. MAXIMUM OTHER FUND OPERATING EXPENSE LIMIT. The Maximum Other Fund
Operating Expense Limit with respect to the Fund shall be the amount specified
in Schedule A based on a percentage of the average daily net assets of the
Fund.
1.3. METHOD OF COMPUTATION. To determine the Adviser's liability with respect
to the Excess Amount, each month the Other Fund Operating Expenses for the Fund
shall be annualized as of the last day of the month. If the annualized Other
Fund Operating Expenses for any month of the Fund exceed the Maximum Other Fund
Operating Expense Limit of the Fund, the Adviser shall either: (a) waive or
reduce its investment advisory fee for such month by an amount sufficient to
reduce the annualized Other Fund Operating Expenses to an amount no higher than
the Maximum Other Fund Operating Expense Limit; (b) remit to the Fund an
amount
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that is sufficient to pay such Excess Amount; or (c) any combination of (a) and
(b) that results in the annualized Other Fund Operating Expenses for such month
to no longer exceed the Maximum Other Fund Operating Expense Limit of the
Fund.
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 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 Adviser or an affiliate serves
as investment manager to the Fund and the estimated aggregate Other Fund
Operating Expenses of the Fund for the previous fiscal year are less than the
Maximum Other Fund Operating Expense Limit for such year, the Adviser shall be
entitled to reimbursement by the 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 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 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, during any of the previous three (3)
fiscal years, less any reimbursement previously paid by the 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. BOARD NOTIFICATION. The Board shall be provided a quarterly report of any
reimbursements paid to the Adviser pursuant to this agreement.
2.3. METHOD OF COMPUTATION. To determine the amount , if any, to be accrued by
the Fund to pay Reimbursement Amounts owed to the Adviser pursuant to Section
2.1 for any year, each month the Other Fund Operating Expenses of the Fund
shall be annualized as of the last day of the month. If the annualized Other
Fund Operating Expenses of the Fund for any month are less than the Maximum
Other Fund 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 Other Fund Operating Expenses of the Fund to an amount no greater
than the Maximum Other Fund Operating Expense Limit of the 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.
2.4. 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 Other Fund Operating Expenses of the Fund for the prior fiscal year
(including any reimbursement payments hereunder with respect to such fiscal
year) do not exceed the Maximum Other Fund Operating Expense Limit.
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3. TERM AND TERMINATION OF AGREEMENT.
This Agreement shall continue in effect with respect to the Fund until the date
indicated on Schedule A ("Initial Term End Date") 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
the Fund:
(i) by the Trust, for any reason and at any time; or
(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 non-interested (as defined in
the 0000 Xxx) 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 Fund 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 Fund. 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 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.
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.
4.3. 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.
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4.4. PRIOR AGREEMENTS.
This Agreement supersedes all prior agreements between the Trust and the Adviser
in relation to the subject matter hereof with respect to the Fund listed in
Schedule A, attached hereto.
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.
X'XXXXXX EQUUS
/s/ Xxxxxx X. Xxxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxxx
Title: Vice President and Secretary
UBS X'XXXXXX LLC
/s/ Xxxxxx Xxxxxxxxxx
Name: Xxxxxx Xxxxxxxxxx
Title: Manager, General Counsel
/s/ Xxxxxxxx X. Xxxxx
Name: Xxxxxxxx X. Xxxxx
Title: Manager, COO
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SCHEDULE A
MAXIMUM OTHER FUND OPERATING EXPENSE LIMIT
NAME OF FUND MAXIMUM OTHER FUND
OPERATING EXPENSE LIMIT
X'Xxxxxx EQUUS 0.65%
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