Expense Event Clause Samples
The "Expense Event" clause defines specific circumstances or occurrences that trigger the obligation for one party to reimburse or pay for certain expenses. Typically, this clause outlines what constitutes an expense event, such as travel for business purposes, attending required meetings, or incurring costs related to project execution. By clearly identifying when expenses are eligible for reimbursement, the clause ensures both parties understand their financial responsibilities and helps prevent disputes over which costs are covered.
Expense Event. (a) An "Excess Expense Event" will occur, and a Trust Wind-Up Event shall occur under Section 9.02, in the event that the Trustee incurs Extraordinary Trust Expense in an aggregate amount exceeding the Trigger Amount, unless the Swap Counterparty or, if specified as permitted under the Trust Agreement, the Unitholders provide adequate assurance of indemnity to the Trustee in accordance with the terms of subsection (b) or (c), as applicable.
(b) Promptly upon the incurrence by the Trustee of Extraordinary Trust Expense in an aggregate amount exceeding the Trigger Amount, and in any event within one Business Day after such incurrence, the Trustee shall provide notice to each Swap Counterparty, the Depositor and the Rating Agencies, if any. If the Trust Agreement so specifies, the Trustee shall also provide notice to the Unitholders. Such notice shall state that an Excess Expense Event shall occur on the fifth Business Day following the provision of such notice unless prior to such day the Swap Counterparty agrees to indemnify the Trustee for Extraordinary Trust Expense in an aggregate amount exceeding the Maximum Reimbursable Amount, and actually incurred by the Trustee as of the date of such agreement, to the reasonable satisfaction of the Trustee and its counsel; provided, however, in no event shall the Trustee be released from its obligations under the Trust Agreement until such fifth Business Day. If the Trust Agreement so specifies, the Unitholders, by unanimous agreement, may provide such indemnification.
(c) Following an agreement to indemnify the Trustee for future Extraordinary Trust Expense, upon the incurrence of Extraordinary Trust Expense in excess of the Maximum Reimbursable Amount, then an "Excess Expense Event" will occur unless adequate assurance of indemnity is given to the Trustee in the manner specified in paragraph 9.03(b).
(d) Nothing in this Section shall be construed to excuse the Depositor from its indemnification obligations under Section 10.05.