Exhibit 99.2(k)(ii)
EXPENSE LIMITATION AGREEMENT
MOUNT YALE OPPORTUNITY FUND, LLC
This EXPENSE LIMITATION AGREEMENT, is made as of **[ ],
2004 by and between Mount Yale Asset Management, LLC (the "Adviser") and Mount
Yale Opportunity Fund, LLC (the "Fund").
WHEREAS, the Company is a Delaware limited liability company, and is
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as a closed-end management investment company; and
WHEREAS, the Company and the Adviser have entered into an investment
advisory agreement dated **[ ], 2004, as amended (the "Investment
Advisory Agreement"), pursuant to which the Adviser provides investment
management services to the Company for compensation based on the value of the
Company's month-end net assets; and
WHEREAS, the Company and the Adviser have entered into an
administration agreement dated **[ ], 2004, as amended (the "Administration
Agreement"), pursuant to which the Adviser, in its capacity as administrator,
provides administrative services to the Company for compensation based on the
value of the Company's month-end net assets; and
WHEREAS, the Company and the Adviser have determined that it is
appropriate and in the best interests of the Company and its members to maintain
the expenses of the Company at a level below the level to which the Company may
normally be subject;
NOW THEREFORE, the parties hereto agree as follows:
1. EXPENSE LIMITATION.
1.1. APPLICABLE EXPENSE LIMIT. The Adviser, in its capacity as
investment adviser and/or administrator of the Company, agrees to waive its fees
and/or reimburse expenses to the extent necessary so that the total annual
operating expenses for the Company do not exceed the Operating Expense Limit (as
defined in Section 1.2 below). For purposes of this Agreement, total annual
operating expenses for the Company generally consist of costs not specifically
borne by the Adviser (in its capacity as investment adviser and/or administrator
to the Company), or the Company's principal underwriter, including, but not
limited to, investment advisory fees, administrative fees, fees for necessary
professional services, any amortization of organizational expenses, costs
associated with regulatory compliance, maintaining legal existence, and investor
relations ("Fund Operating Expenses"), but excluding: interest; taxes;
transaction costs (such as brokerage commissions); extraordinary expenses,
including, but not limited to, litigation and indemnification costs, expenses of
a reorganization, restructuring or merger of the Company or acquisition of all
or substantially all of the assets of another fund, expenses of holding, and
soliciting proxies for a meeting of members of the Company (except to the extent
relating to routine items), expenses of converting to a new custodian, transfer
agent or other service provider; other expenses not incurred in the ordinary
course of the Company's business; and/or expenses of any counsel or other
persons or services retained by the Company's managers who are not "interested
persons," as that term is defined in the 1940 Act, of the Adviser. To the extent
the Company Operating Expenses exceed the
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Operating Expense Limit (as defined in Section 1.2 below), such excess amount
(the "Excess Amount") shall be the liability of the Adviser.
1.2. OPERATING EXPENSE LIMIT. The maximum Operating Expense Limit in
any fiscal year or period with respect to the Company shall be the amount
specified in Schedule A based on a percentage of the Company's month-end net
assets.
1.3. DURATION OF OPERATING EXPENSE LIMIT. The Operating Expense Limit
with respect to the Company shall remain in effect until **[December 31, 2005].
The Adviser may extend, but may not during the term of this Agreement shorten,
the duration of the Operating Expense Limit without the consent of the Company.
Such an extension must continue at the same Operating Expense Limit amount
specified on Schedule A, unless otherwise agreed by the parties hereto.
1.4. METHOD OF COMPUTATION. To determine the Adviser's obligation with
respect to the Excess Amount, each month the Company Operating Expenses for the
Company shall be annualized. If the annualized Fund Operating Expenses for any
month of the Company exceeds the Operating Expense Limit of the Company, the
Adviser shall remit to the Company an amount equal to such Excess Amount.
1.5. 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 fees waived or reduced and
other payments remitted by the Adviser to the Company with respect to the
previous fiscal year shall equal the Excess Amount.
2. REIMBURSEMENT OF FEE WAIVERS AND EXPENSE REIMBURSEMENTS.
2.1. REIMBURSEMENT. If on the last business day of any month during
which the Investment Advisory Agreement is in effect, the estimated annualized
Fund Operating Expenses of the Company for that month is less than the Operating
Expense Limit, the Adviser shall be entitled to reimbursement by the Company of
the fees waived or reduced and other payments remitted by the Adviser to the
Company pursuant to Section 1 hereof (the "Reimbursement Amount") during any of
the previous thirty-six (36) months, to the extent that the annualized Fund
Operating Expenses plus the amount so reimbursed equals, for such month, the
Operating Expense Limit provided in Schedule A, provided that such amount paid
to the Adviser will in no event exceed the total Reimbursement Amount and will
not include any amounts previously reimbursed.
2.2. YEAR-END ADJUSTMENT. If necessary, on or before the last business
day of the first month of each fiscal year, an adjustment payment shall be made
by the appropriate party in order that the actual Fund Operating Expenses of the
Company for the prior fiscal year (including any reimbursement payments
hereunder with respect to such fiscal year) do not exceed the Operating Expense
Limit.
3. TERM AND TERMINATION OF AGREEMENT.
This Agreement shall have an initial period as set forth in Section 1.3
above, and shall apply for each fiscal year thereafter so long as it is in
effect. Thereafter, this Agreement shall automatically renew for one-year terms
unless the Adviser provides written notice to the Company of the termination of
this Agreement, which notice shall be received by the Company at least thirty
(30) days' prior to the end of the then-current term. In addition, this
Agreement shall terminate upon termination of the Investment
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Advisory Agreement, or it may be terminated by the Company, without payment of
any penalty, upon thirty (30) days' prior written notice to the other party at
its principal place of business.
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 Company to take any action contrary to the Company's limited
liability company operating agreement, or any applicable statutory or regulatory
requirement to which it is subject or by which it is bound, or to relieve or
deprive the Company's Board of Managers of its responsibility for and control of
the conduct of the affairs of the Company.
4.3. DEFINITIONS. Any question of interpretation of any term or
provision of this Agreement, including but not limited to the investment
management fee, the computations of net asset value, and the allocation of
expenses, having a counterpart in or otherwise derived from the terms and
provisions of the 1940 Act or the Investment Advisory Agreement, shall have the
same meaning as and be resolved by reference to the 1940 Act or such Investment
Advisory Agreement.
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.
MOUNT YALE OPPORTUNITY FUND, LLC
By:
---------------------------------
Name:
Title:
MOUNT YALE ASSET MANAGEMENT, LLC
By:
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Name:
Title:
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SCHEDULE A OPERATING EXPENSE LIMIT
Maximum Operating Expense Limit
Name of Company (as a percentage of month-end net assets)
--------------- -----------------------------------------
Mount Yale Opportunity 3.00%
Fund, LLC
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