AMENDED AND RESTATED EXPENSE WAIVER AND REIMBURSEMENT AGREEMENT
THIS AGREEMENT is made this 1st day of October, 2003, between The Arbitrage
Funds, a Delaware trust (the "Trust") and Water Island Capital, LLC, a Delaware
limited liability company (hereinafter called the "Adviser").
W I T N E S S E T H
WHEREAS, the Adviser has entered into an Investment Advisory Agreement with
the Trust, pursuant to which the Adviser agrees to provide, or arrange for the
provision of, investment advisory and management services to the Trust; and
WHEREAS, the Trust and the Adviser believe that capping the total expenses,
excluding taxes, interest and dividends on short positions, of shares of The
Arbitrage Fund (the "Fund") of the Trust will enable the Fund to target niches
within the load and no-load product market and will benefit the Fund;
NOW, THEREFORE, the parties hereto do hereby agree as follows:
1. EXPENSE WAIVER AND REIMBURSEMENT BY THE ADVISER. The Adviser agrees to waive
all or a portion of its management fee and, if necessary, to bear certain other
expenses, excluding taxes, interest and dividends on short positions, associated
with operating the Fund to the extent necessary to limit the Fund's annualized
expenses to the annual rate of 1.95% and 1.70% of the Fund's average daily net
assets allocable to its Class R shares and Class I shares, respectively, for the
period from the date of this Agreement until August 31, 2012.
2. DUTY OF FUND TO REIMBURSE. The Fund agrees to reimburse the Adviser such
waived fees (but not expenses borne) in later years provided, however, that the
Fund is not obligated to pay any such waived fees more than three years after
the end of the fiscal year in which the fee was waived.
3. ASSIGNMENT. No assignment of this Agreement shall be made by the Adviser
without the prior consent of the Trust.
4. DURATION AND TERMINATION. This Agreement shall be effective for the period
from the date of this Agreement until August 31, 2012, and shall continue in
effect thereafter unless terminated by either of the parties hereto upon written
notice to the other of not less than five days. This Agreement shall
automatically terminate upon the termination of the Investment Advisory
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
THE ARBITRAGE FUNDS WATER ISLAND CAPITAL, LLC
By __________________________ By __________________________
Name: Xxxx X. Xxxxxx Name: Xxxx X. Xxxxxx
Title: President Title: President
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