SALIENT ADVISORS, L.P.
SALIENT
ADVISORS, L.P.
January
29, 2010
To the
Trustees of:
Salient
Absolute Return Institutional Fund
Salient
Absolute Return Master Fund
0000 Xxx
Xxxxxx Xxxxx 000
Houston,
Texas 77027
Re: Expense
Limitation Agreement
With
reference to the Investment Advisory Agreements entered into by Salient
Advisors, L.P. (the "Advisor") with each of Salient Absolute Return Fund (the
“SAR Fund”), Salient Absolute Return Institutional Fund (the “Institutional
Fund” and together with the SAR Fund, the “Feeder Funds”) and Salient Absolute
Return Master Fund (the “Master Fund”) on the 29th day
of January 2010, and with reference to the Services Agreement entered into by
the Advisor and SAR Fund on the 29th day
of January, 2010, and the Administrative Services Agreement entered into by the
Advisor and the Institutional Fund on the 29th day
of January, 2010, we hereby notify you as follows:
1. Through January 31, 2011, the Advisor
agrees to waive and/or reimburse the Master Fund for its management fee and, to
the extent necessary, bear other expenses, to limit the total annualized
expenses (excluding Master Fund borrowing and investement-related costs and fees
and expenses of underlying funds) of the SAR Fund to the amount of 2.5% of net
assets attributable to shares of the SAR Fund.
2. Through January 31, 2011, the Advisor
agrees to waive and/or reimburse the Master Fund for its management fee and, to
the extent necessary, bear other expenses, to limit the total annualized
expenses (excluding Master Fund borrowing and investment-related costs and fees
and expenses of underlying funds) of the Institutional Fund to the amount of
2.0% of net assets attributable to shares of the Institutional
Fund.
3. The Advisor shall be permitted to recover
expenses it has borne subsequent to the effective date of this agreement
(whether through reduction of its management fee or otherwise) in later periods
to the extent that a Feeder Fund's expenses fall below the annual rates set
forth above. Provided, however, that a Feeder Fund is not obligated
to pay any such deferred fees more than one year after the end of the fiscal
year in which the fee was deferred.
4. During the periods covered by this letter
agreement, the expense limitation arrangement set forth above for each of the
Feeder Funds may only be modified by a majority vote of the "non-interested"
trustees of the Funds (as defined under the Investment Company act of 1940, as
amended (the "1940 Act") affected.
5. We understand and intend that you will
rely on this undertaking in preparing and filing the Registration Statements on
Form N-2 for the above referenced Funds with the Securities and Exchange
Commission, in accruing each Fund's expenses for purposes of calculating its net
asset value per share and for other purposes permitted under Form N-2 and/or the
1940 Act, and
expressly permit you to do so.
| Very truly yours, | ||
| SALIENT ADVISORS, L.P. | ||
|
By:
|
/s/
X. Xxxx Xxxxxxx
|
|
|
X.
Xxxx Xxxxxxx
|
||
|
Managing
Director
|
||
ACCEPTED
AND AGREED TO ON BEHALF OF:
Salient
Absolute Return Master Fund
Salient
Absolute Return Institutional Fund
|
By:
|
/s/
Xxxxxx Xxxxxxxxx
|
|
Xxxxxx
Xxxxxxxxx
|
|
|
Secretary
|
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