Exhibit 2.k.(vi)
FUND INDEMNITY AGREEMENT
FUND INDEMNITY AGREEMENT, dated as of ___ __, 1997, between Xxxxxxx,
Xxxxx & Co. ("Xxxxxxx Sachs") and Xxxxxxx X. Xxxxxx III, Xxxxx X. X'Xxxxx and
Xxxxxx X. Xxxxxxx (collectively, the "Trustees"), not in their individual
capacities but solely as trustees of Reader's Digest Automatic Common Exchange
Security Trust (the "Trust").
WHEREAS the Trust is a trust formed under the laws of the State of New
York pursuant to a Trust Agreement, as amended and restated as of ___ __, 1997
(the "Trust Agreement"); and
WHEREAS, Xxxxxxx Sachs, as sponsor under the Trust Agreement, desires
to make provision for the payment of certain indemnification expenses of the
Trust;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained in this Agreement, the parties agree as follows:
1. Definitions. Capitalized terms used herein and not defined herein
shall have the meanings ascribed thereto in the Trust Agreement.
2. Agreement to Pay Expenses. Xxxxxxx Xxxxx agrees to pay to the Trust,
and hold the Trust harmless from, any expenses of the Trust arising under
Sections 2.2(e) and 6.6 of the Administration Agreement, Section 15 of the
Custodian Agreement, Section 5.4(b) of the Paying Agent Agreement and Section
7.6 of the Trust Agreement (collectively, "Indemnification Expenses"). Subject
to paragraph 4 hereof, payment hereunder by Xxxxxxx Sachs shall be made in New
York Clearing House funds no later than five Business Days after the receipt by
Xxxxxxx Xxxxx, pursuant to paragraph 3 hereof, of written notice of any claim
for Indemnification Expenses.
3. Notice of Receipt of Claim. The Trustees shall give notice to, or
cause notice to be given to, Xxxxxxx Sachs in writing of any claim for
Indemnification Expenses or any threatened claim for Indemnification Expenses
immediately upon their acquiring knowledge thereof. Such written notice shall be
accompanied by any demand, xxxx, invoice or other communication received from
any third party claimant (a "Claimant") in respect of such Indemnification
Expense.
4. Right to Contest. The Trustees agree that Xxxxxxx Sachs may, and
Xxxxxxx Xxxxx is authorized on behalf of the Trustees and the Trust to, contest
in good faith with any Claimant any amount contained in any claim for
Indemnification Expense, provided, that if, within such time period as Xxxxxxx
Sachs shall determine to be reasonable, Xxxxxxx Xxxxx and such Claimant are
unable to resolve amicably any disagreement regarding such claim for
Indemnification Expense, Xxxxxxx Sachs shall retain counsel reasonably
satisfactory to the Trustees to represent the Trustees in any resulting
proceeding and shall pay the fees and disbursements of such counsel related to
such proceeding. It is understood that Xxxxxxx Xxxxx shall not, in respect of
the legal expenses of any indemnified party in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel).
Xxxxxxx Sachs shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if there be a
final judgment for the Claimant, Xxxxxxx Xxxxx agrees to indemnify the Trustees
and the Trust from and against any loss or liability by reason of such
settlement or judgment.
5. Statements and Reports. The Trustees shall collect and safekeep all
demands, bills, invoices or other written communications received from third
parties in connection with any claim for Indemnification Expenses and shall
prepare and maintain adequate books and records showing all receipts and
disbursements of funds in connection therewith. Xxxxxxx Sachs shall have the
right to inspect and to copy, at its expense, all such documents, books and
records at all reasonable times and from time to time during the term of this
Agreement.
6. Term of Contract. This Agreement shall continue in effect until the
termination of the Trust in accordance with Section 8.3 of the Trust Agreement.
7. No Assignment. No party to this Agreement may assign its rights or
delegate its duties hereunder without the prior written consent of the other
parties, except that the Trust may delegate any and all duties hereunder to the
Administrator to the extent permitted by law.
8. Entire Agreement. This Agreement contains the entire agreement among
the parties with respect to the matters contained herein and supersedes all
prior agreements or understandings. No amendment or modification of this
Agreement shall be valid unless the amendment or
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modification is in writing and is signed by all the parties to this
Agreement.
9. Notices. All notices, demands, reports, statements, approvals or
consents given by any party under this Agreement shall be in writing and shall
be delivered in person or by telecopy or other facsimile communication or sent
by first-class U.S. mail, registered or certified, postage prepaid, to the
appropriate party at its address on the signature pages hereof or at such other
address subsequently notified to the other parties hereto. A copy of any
communication to Xxxxxxx Xxxxx shall be furnished to Xxxxxxx, Sachs & Co., 00
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention: Registration Department,
provided that the failure to furnish such copy shall not affect the
effectiveness of any such communication. Any party may change its address for
purposes hereof by delivering a written notice of the change to the other
parties. All notices, given under this Agreement shall be deemed received (a) in
the case of hand delivery, on the day of delivery, (b) in the case of telecopy
or other facsimile communication, on the day of transmission, and (c) in the
case of mailing, on the third day after such notice was deposited in the mail.
10. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns.
11. Governing Law. This Agreement shall be governed by and be construed
in accordance with the laws of the State of New York.
12. Counterparts. This Agreement may be signed in counterparts with all
of such counterparts constituting one and the same instrument.
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IN WITNESS WHEREOF, the parties have caused this Fund Indemnity
Agreement to be executed by their authorized representatives the date first
above written.
XXXXXXX, XXXXX & CO.
By______________________________
Address:
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
TRUSTEES
__________________________________
Name: Xxxxxxx X. Xxxxxx III
Address: Department of Economics
University of Delaware
Xxxxxx, Xxxxxxxx 00000
__________________________________
Name: Xxxxx X. X'Xxxxx
Address: Center for Economic
Education and
Entrepreneurship
University of Delaware
Xxxxxx, Xxxxxxxx 00000
__________________________________
Name: Xxxxxx X. Xxxxxxx
Address: Department of Finance
University of Delaware
Xxxxxx, Xxxxxxxx 00000
