Expense Waivers Clause Samples
An Expense Waivers clause establishes that one party agrees to forgo reimbursement for certain costs or expenses that would otherwise be payable under the agreement. Typically, this clause specifies which types of expenses are covered by the waiver, such as administrative fees or travel costs, and may outline any conditions or limitations on the waiver. Its core practical function is to reduce the financial burden on the other party, streamline cost allocation, and prevent disputes over minor or anticipated expenses.
Expense Waivers. If in any fiscal year the total expenses of a Fund incurred by, or allocated to, the Fund, excluding taxes, interest, brokerage commissions and other portfolio transaction expenses, other expenditures that are capitalized in accordance with generally accepted accounting principles, extraordinary expenses and amounts accrued or paid under a Rule 12b-1 Plan of the Fund and including only the fees provided for in Paragraph 4 and those provided for pursuant to the Fund’s advisory agreement (“includible expenses”), exceed the applicable voluntary expense waivers, if any, set forth in the Prospectus, Funds Management shall waive or reimburse that portion of the excess derived by multiplying the excess by a fraction, the numerator of which shall be the percentage at which the fee payable pursuant to this Agreement is calculated under Paragraph 4, and the denominator of which shall be the sum of such percentage plus the percentage at which the fee payable pursuant to the Fund's advisory agreement is calculated (the “Applicable Ratio”), but only to the extent of the fee hereunder for the fiscal year. If the fees payable under this Agreement and/or the Fund’s advisory agreement contributing to such excess portion are calculated at more than one percentage rate, the Applicable Ratio shall be calculated separately for and applied separately to the portions of excess attributable to, the period to which a particular percentage rate applied. At the end of each month of the Trust’s fiscal year, the Trust shall review the includible expenses accrued during that fiscal year to the end of that period and shall estimate the includible expenses for the balance of that fiscal year. If as a result of that review and estimation it appears likely that the includible expenses will exceed the limitations referred to in this Paragraph for a fiscal year with respect to the Fund, the monthly fee set forth in Paragraph 4 payable to Funds Management for such month shall be reduced, subject to a later adjustment, by an amount equal to the Applicable Ratio times the estimated excess pro rated over the remaining months of the fiscal year (including the month just ended). For purposes of computing the excess, if any, the value of the Fund’s net assets shall be computed in the manner specified in Paragraph 4, and any reimbursements required to be made by Funds Management shall be made once a year promptly after the end of the Trust’s fiscal year.