OPERATING EXPENSES LIMITATION AGREEMENT
Exhibit (g)(1)
361 Social Infrastructure Fund
OPERATING EXPENSES LIMITATION AGREEMENT
THIS OPERATING EXPENSES LIMITATION AGREEMENT (the “Agreement”) is dated as of December 20, 2019, by and between 361 SOCIAL INFRASTRUCTURE FUND, a Delaware statutory trust (the “Fund”), and the investment advisor of the Fund, 361 Infrastructure Partners, LLC (the “Advisor”).
WITNESSETH:
WHEREAS, the Advisor renders advice and services to the Fund pursuant to the terms and provisions of an Investment Advisory Agreement between the Trust and the Advisor dated December 20, 2019 (the “Investment Advisory Agreement”); and
WHEREAS, the Fund is responsible for, and has assumed the obligation for, payment of certain expenses of the Fund pursuant to the Investment Advisory Agreement that have not been assumed by the Advisor; and
WHEREAS, the Advisor desires to limit the Fund’s Operating Expenses (as defined in Paragraph 2 herein) of the Fund (or as applicable each class of the Fund set forth in Appendix A (each a “Class”)), for the Expense Limitation Period (as defined in Paragraph 2 herein) pursuant to the terms and provisions of this Agreement, and the Fund desires to allow the Advisor to implement those limits;
NOW THEREFORE, in consideration of the covenants and the mutual promises hereinafter set forth, the parties, intended to be legally bound hereby, mutually agree as follows:
| 1. | Limit on Operating Expenses. |
| a. | The Advisor hereby agrees to limit current Operating Expenses of the Fund (or as applicable each Class of the Fund), to an annual rate, expressed as a percentage of average annual net assets, to the amounts listed in Appendix A (the “Annual Limit”) with respect to the Fund (or Class, as applicable). In the event that the current Operating Expenses for the Fund (or Class, as applicable), as accrued each month, exceed the Annual Limit, the Advisor will pay to the Fund (for the benefit of such Class, as applicable) on a monthly basis, the excess expense within 30 days of being notified that an excess expense payment is due. Such payment may include waiving all or a portion of the Advisor’s investment advisory fee. |
| 2. | Definition. For purposes of this Agreement, with respect to the Fund (and each Class of shares thereof): |
| a. | The term “Operating Expenses” is defined to include all expenses necessary or appropriate for the operation of the Fund (or Class, as applicable), including the Advisor’s investment advisory or management fee detailed in the Investment Advisory Agreement and any Rule 12b-1 fees and other expenses described as Fund expenses in the Investment Advisory Agreement, but does not include taxes, leverage interest, brokerage commissions, dividend and interest expenses on short sales, acquired fund fees and expenses (as determined in accordance with SEC Form N-2), expenses incurred in connection with any merger or reorganization, or extraordinary expenses such as litigation expenses. |
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| b. | The term “Expense Limitation Period” is defined as the period of time commencing on the Effective Date (as defined in Paragraph 4 herein) and ending at the end of the fourth (4th) month following the Fund’s current fiscal year end, and each subsequent one (1) year period for which this Agreement is renewed pursuant to Paragraph 4 hereof. |
| 3. | Reimbursement of Fees and Expenses. Any payments to the Fund by the Advisor (with respect to a Class, as applicable) (each a “Subsidy”) pursuant to this Agreement are subject to reimbursement by the Fund (or Class, as applicable) to the Advisor for a period ending three (3) full fiscal years from the date of the Subsidy, if so requested by the Advisor. The reimbursement may be paid by the Fund (or Class, as applicable) if the aggregate amount of the Fund’s (or Class’) Operating Expenses for the fiscal year in which the request for reimbursement is made, taking into account the reimbursement, does not exceed the Annual Limit in place at the time of the Subsidy or the current limitation on the Fund’s (or Class’) Operating Expenses, if less. In no case will the reimbursement amount exceed the total amount of Subsidies made by the Advisor with respect to the Fund (or Class, as applicable) pursuant to this Agreement and no reimbursement will include any amounts previously reimbursed. No reimbursement may be paid prior to the Fund’s payment of current Operating Expenses. Notwithstanding anything to the contrary herein, the provisions of this Paragraph 3 shall survive the termination of this Agreement, provided that the Investment Advisory Agreement has not been terminated. In such event, the Annual Limits for purposes of this Paragraph 3 shall continue to be the amounts listed in Appendix A. |
| 4. | Term. This Agreement shall become effective with respect to the Fund (or Class, as applicable), on the date specified in Appendix A (the “Effective Date”) and shall remain in effect through the end of the Fund’s Expense Limitation Period, and shall automatically renew for the Fund for an additional one year period following the end of the Fund’s Expense Limitation Period, unless sooner terminated as provided in Paragraph 5 of this Agreement. |
| 5. | Termination. This Agreement may be terminated at any time with respect to any Fund or Class, and without payment of any penalty, by the Board of Trustees of the Fund, upon sixty (60) days’ written notice to the Advisor. This Agreement may be terminated by the Advisor with respect to any Fund or Class, effective at the end of its then current term, without payment of any penalty upon at least sixty (60) days’ written notice prior to the end of any Expense Limitation Period of the Fund, subject to the consent of the Board of Trustees of the Trust, which consent will not be unreasonably withheld. This Agreement will automatically terminate if the Investment Advisory Agreement is terminated, with such termination effective upon the effective date of the Investment Advisory Agreement’s termination. |
| 6. | Assignment. This Agreement and all rights and obligations hereunder may not be assigned without the written consent of the other party. |
| 7. | Severability. If any provision of this Agreement shall be held or made invalid by a court decision, statute or rule, or shall be otherwise rendered invalid, the remainder of this Agreement shall not be affected thereby. |
| 8. | Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware 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 Investment Company Act of 1940 and the Investment Advisers Act of 1940, and any rules and regulations promulgated thereunder. |
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and attested by their duly authorized officers, all on the day and year first above written.
| 361 SOCIAL INFRASTRUCTURE FUND | 361 INFRASTRUCTURE PARTNERS, LLC | ||||
| By: | /s/ Xxxx Dam | By: | /s/ Xxxxxx Xxxxxxxx | ||
| Print Name: | Xxxx Dam | Print Name: | Xxxxxx Xxxxxxxx | ||
| Title: | Treasurer | Title: | CEO | ||
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Appendix A
| Fund (and Class, as applicable) | Annual Operating Expense Limit | Effective Date |
| 361 Social Infrastructure Fund | ||
| Institutional Class | 2.00% | 3/01/2020 |
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