EXHIBIT (2)(k)(3)
EXPENSE LIMITATION AND REIMBURSEMENT AGREEMENT
AGREEMENT made as of the 26th day of May, 2004 by and between
X.X Xxxxxx Multi-Strategy Fund, L.L.C., a Delaware limited liability company
(the "Fund"), and X.X. Xxxxxx Alternative Asset Management, Inc., a Delaware
corporation ("JPMAAM"):
W I T N E S S E T H:
WHEREAS, the Fund has registered under the Investment Company
Act of 1940 (the "1940 Act") as a non-diversified, closed-end, management
investment company; and
WHEREAS, JPMAAM serves as the investment manager of the Fund
pursuant to an agreement between the Fund and JPMAAM dated May 26, 2004 (the
"Investment Management Agreement");
NOW, THEREFORE, the parties to this Agreement agree as
follows:
1. JPMAAM (or an affiliate of JPMAAM) agrees to waive
the fees payable to it under the Investment Management Agreement or to reimburse
the ordinary operating expenses of the Fund, as set out in the Fund's Amended
and Restated Limited Liability Company Agreement dated May 26, 2004, (excluding
interest, brokerage commissions, other transaction-related expenses and any
extraordinary expenses of the Fund as well as any performance-based incentive
allocations payable by the Fund) ("Operating Expenses") that exceed 2.30% on an
annualized basis of the Fund's net assets as of the end of each month (the
"Expense Limitation").
2. This Agreement will have an initial term ending March
31, 2005, and will automatically renew for one-year terms. This Agreement will
remain in effect until terminated by JPMAAM or by the Fund. Either party may
terminate this Agreement upon thirty (30) days' written notice to the other
party. This Agreement will terminate automatically: (1) upon the termination of
the Investment Management Agreement unless a new Investment Management Agreement
with JPMAAM (or an affiliate of JPMAAM) to replace the terminated agreement
becomes effective upon such termination or (2) if JPMAAM (or any affiliate of
JPMAAM) terminates the Investment Management Agreement without the consent of
the Fund (other than a termination resulting from an "assignment," as defined by
the 1940 Act and the rules under the Act, of the Investment Management
Agreement).
3. The Fund agrees to carry forward, for a period not to
exceed three (3) years from the end of the fiscal year in which a waiver or
reimbursement is made by JPMAAM, any Operating Expenses in excess of the Expense
Limitation that are paid or assumed by JPMAAM (or an affiliate of JPMAAM) under
this Agreement ("Excess Operating Expenses") and to repay JPMAAM (or an
affiliate of JPMAAM) in the amount of such Excess Operating Expenses as set out
in this Agreement. Such repayment will be made as promptly as possible, but only
to the extent it does not cause the Operating Expenses for any year to exceed
the Expense Limitation. If this Agreement is terminated by the Fund or if this
Agreement terminates
because the Fund terminates or fails to renew for any additional term the
Investment Management Agreement, the Fund agrees to repay to JPMAAM in
accordance with this Agreement any Excess Operating Expenses not previously
repaid and, subject to the 1940 Act, such repayment will be made to JPMAAM not
later than thirty (30) days after the termination of this Agreement and without
regard to the Expense Limitation.
4. This Agreement will be construed in accordance with
the laws of the state of New York and the applicable provisions of the 1940 Act.
To the extent the applicable law of the State of New York, or any of the
provisions in this Agreement, conflict with the applicable provisions of the
1940 Act, the applicable provisions of the 1940 Act will control.
5. This Agreement constitutes the entire agreement
between the parties to this Agreement with respect to the matters described in
this Agreement.
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IN WITNESS WHEREOF, the parties to this Agreement have
executed this Agreement as of the date first written above.
X.X. Xxxxxx Multi-Strategy Fund, L.L.C.
By: Xxxxxxx Associates, L.L.C.,
its Managing Member
By: /s/ Xx. Xxxxxx X. Xxxxxxx
-----------------------------
Name: Xx. Xxxxxx X. Xxxxxxx
Title: Chairman and Sole Member
X.X. XXXXXX ALTERNATIVE ASSET MANAGEMENT, INC.
By: /s/ Xxxx Xxxxxxx
--------------------------------
Name: Xxxx Xxxxxxx
Title: President and Chief Executive Officer
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