FORM OF LETTER AGREEMENT
Exhibit (d)(2)
[ ], 2017
FORM OF LETTER AGREEMENT
Highland Global Allocation Fund II (the “Trust”)
000 Xxxxxxxx Xxxxx, Xxxxx 000
Dallas, Texas 75201
Re: Expense Limitation and Recoupment Agreement
Ladies and Gentlemen:
This Letter Agreement documents (i) an undertaking by Highland Capital Management Fund Advisors, L.P. (the “Adviser”) to limit the total operating expenses of the Trust, and (ii) our agreement regarding the extent to which the Adviser will, under certain circumstances, receive payment from the Trust as recoupment of certain amounts paid, waived or reimbursed by the Adviser to the Trust in fulfillment of the undertaking described above. This Letter Agreement shall terminate (i) in the event the Investment Advisory Agreement between the Trust and the Adviser terminates, (ii) at the sole discretion of the Trust’s Board of Trustees on 30 days’ prior written notice to the Adviser, or (iii) upon mutual agreement between the Adviser and the Trust’s Board of Trustees.
Effective as of [ ] and until at least [ ], the Adviser hereby undertakes to limit the total annual operating expenses (exclusive of fees paid by the Trust pursuant to its distribution plan under Rule 12b-1 under the Investment Company Act of 1940, as amended (the “1940 Act”), taxes, such as deferred tax expenses, dividend expenses on short sales, interest payments, brokerage commissions and other transaction costs, acquired fund fees and expenses and extraordinary expenses (collectively, the “Excluded Expenses”)) of the Fund to 0.90% of average daily net assets attributable to any class of the Trust (the “Expense Cap”).
The Trust hereby agrees that it will be obligated to pay the Adviser all amounts previously paid, waived or reimbursed by the Adviser pursuant to the Expense Cap, provided that the amount of such additional payment in any year, together with all other expenses (excluding the Excluded Expenses) of the Trust, in the aggregate, would not cause the Trust’s total annual operating expenses in any such year to exceed the amount of the Expense Cap or any other agreed upon expense limitation for that year, and provided further that no additional payments by the Trust will be made with respect to amounts paid, waived or reimbursed by the Adviser more than thirty-six (36) months from the date such amounts were paid, waived or reimbursed by the Adviser. The Adviser may not recoup any amounts previously paid, waived or reimbursed hereunder before payment of the Trust’s operating expenses for the year in which the Adviser intends to recoup such amounts.
Any payments by the Trust under this Letter Agreement shall be in addition to all amounts otherwise payable to the Adviser as an advisory fee or any other fee for services to the Trust under the Investment Advisory Agreement or any other agreement with the Trust, as applicable.
Exhibit (d)(2)
A copy of the Declaration of Trust of the Trust is on file with the Secretary of The Commonwealth of Massachusetts and notice is hereby given that this instrument is executed on behalf of the Trust by an officer of the Trust in his or her capacity as an officer of the Trust and not individually and that the obligations of or arising out of this instrument are not binding on any of the trustees, officers or shareholders individually, but are binding only upon the assets or property of the Trust.
This Letter Agreement shall be governed by, and construed in accordance with, the laws of the Commonwealth of Massachusetts without giving effect to the conflict of laws principles thereof; provided that nothing herein shall be construed to preempt, or to be inconsistent with, any federal law, regulation or rule, including the 1940 Act, and the Investment Advisers Act of 1940, as amended, and any rules and regulations promulgated thereunder.
| Sincerely, | ||
| Highland Capital Management Fund Advisors, L.P. | ||
| By: Strand Advisors XVI, Inc., its general partner | ||
| By: |
| |
| Name: | Xxxxx Xxxxxxxxxx | |
| Title: | Treasurer | |
| ACKNOWLEDGED AND ACCEPTED | ||
| By: |
| |
| Name: | Xxxxxx Xxxxxx | |
| Title: | Assistant Treasurer | |
