Exhibit (k)(5)
FORM OF
FUND EXPENSE AGREEMENT
Agreement dated as of December [ ], 2001 between Xxxxxxx Xxxxx
Xxxxxx Inc. ("Xxxxxxx Xxxxx Barney") and The Bank of New York (the "Service
Provider"), in its capacities as administrator, custodian, paying agent and
collateral agent for Equity Securities Trust II (the "Trust").
WHEREAS the Trust is a statutory business trust organized
under the Business Trust Act of the State of Delaware pursuant to a Declaration
of Trust dated as of October 30, 2001, as amended and restated as of December
[ ], 2001 (the "Trust Agreement"); and
WHEREAS Xxxxxxx Xxxxx Xxxxxx desires to make provision for the
payment of certain initial and ongoing 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. (a) Capitalized terms used herein and not
defined herein shall have the meanings ascribed thereto in the Trust Agreement.
(b) The following terms shall have the following meanings:
"Additional Expense" means the Ordinary Expense the incurring
of which will require the Service Provider to provide the Additional Expense
Notice pursuant to Section 3(a) hereof and any Ordinary Expense incurred
thereafter.
"Additional Expense Notice" means the notice required to be
given by the Service Provider to Xxxxxxx Xxxxx Barney pursuant to Section
3(a)(i) hereof.
"Closing Date" shall have the meaning ascribed thereto in the
Underwriting Agreement.
"Ordinary Expense" of the Trust means any expense of the Trust
other than any expense 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.
"Up-front Fee Amount" means the amount set forth as such on
Schedule I hereto payable as a one-time payment to the Service Provider in
respect of its collective services as Administrator, Custodian, Paying Agent and
Collateral Agent for the entire term of the Trust.
"Up-front Expense Amount" means the amount set forth as such
on Schedule I hereto payable as a one-time payment to the Service Provider in
respect of Ordinary Expenses anticipated to be incurred by the Administrator on
behalf of the Trust, pursuant to the Administration Agreement, during the term
of the Trust.
2. Agreement to Pay Up-front Fees and Expenses. Xxxxxxx Xxxxx
Xxxxxx agrees to pay to the Service Provider in New York Clearing House funds on
the Closing Date the Up-front Fee Amount and the Up-front Expense Amount.
3. Agreement to Pay Additional Expenses. (a) Prior to
incurring any Ordinary Expense on behalf of the Trust that, together with all
prior Ordinary Expenses incurred by the Administrator on behalf of the Trust,
would cause the aggregate amount of Ordinary Expenses of the Trust to exceed the
Up-front Expense Amount, the Administrator shall provide to Xxxxxxx Xxxxx Barney
(i) prompt written notice to the effect that the aggregate amount of Ordinary
Expenses of the Trust will exceed the Up-front Expense Amount, and (ii) an
accounting, in such detail as shall be reasonably acceptable to Xxxxxxx Xxxxx
Xxxxxx, of all Ordinary Expenses incurred on behalf of the Trust through the
date of the Additional Expense Notice.
(b) From and after the date of the Additional Expense Notice,
the Service Provider agrees that it will not, without the prior written consent
of Xxxxxxx Xxxxx Barney, incur on behalf of the Trust (i) any single expense in
excess of $3,000 or (ii) in any calendar quarter, expenses aggregating in excess
of $15,000. Subject to the foregoing, the Service Provider shall give notice to
Xxxxxxx Xxxxx Xxxxxx in writing promptly following the incurring of any
Additional Expense. Such notice shall be accompanied by any demand, xxxx,
invoice or other similar document in respect of such Additional Expense.
(c) Subject to the first sentence of paragraph (b) of this
Section 3, Xxxxxxx Xxxxx Xxxxxx agrees to pay to the Service Provider from time
to time the amount of any Additional Expense. Payment by Xxxxxxx Xxxxx Barney of
any Additional Expense shall be made in New York Clearing House funds by the
later of (i) five Business Days after the receipt by Xxxxxxx Xxxxx Xxxxxx of
written notice from the Service Provider of the incurring thereof or (ii) the
due date for the payment of such Additional Expense.
(d) Xxxxxxx Xxxxx Barney may contest in good faith the
reasonableness of any Additional Expense and the parties shall attempt to
resolve amicably the disagreement; provided that if the parties cannot resolve
the dispute by the due date hereunder with respect to such Additional Expense,
subject to the first sentence of paragraph (b) of this Section 3, Xxxxxxx Xxxxx
Xxxxxx shall pay the amount of such Additional Expense, subject to later
adjustment and credit if such dispute is resolved in favor of Xxxxxxx Xxxxx
Barney.
4. Condition to Payment. The obligations of Xxxxxxx Xxxxx
Xxxxxx hereunder shall be subject to the condition that the Trust's Equity Trust
Securities shall have been issued and paid for on the Closing Date.
5. Trust Termination; Refund of Unused Expense Funds. If at
the termination of the Trust in accordance with Section 8.3 of the Trust
Agreement the aggregate amount of Ordinary Expenses incurred by the Service
Provider on behalf of the Trust through the date of termination shall be less
than the Up-front Expense Amount, the Service Provider shall, promptly following
the date of such termination, pay to Xxxxxxx Xxxxx Barney in New York Clearing
House funds the amount of such excess.
6. Termination of Administration Agreement. If the
Administration Agreement is terminated in accordance with Section 4.1 thereof,
the Service Provider shall promptly pay to Xxxxxxx Xxxxx Xxxxxx (i) the ratable
portion of its Up-front Fee Amount for the period from the date of the
termination of the Administration Agreement to the Exchange Date and (ii) any
unexpended portion of the Up-front Expense Amount.
7. Statements and Reports. The Service Provider shall collect
and safekeep all demands, bills, invoices or other written communications
received from third parties in connection with any Ordinary Expenses and
Additional Expenses and shall prepare and maintain adequate books and records
showing all receipts and disbursements of funds in connection therewith. Xxxxxxx
Xxxxx Barney 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.
8. 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.
9. No Assignment. No party to this Agreement may assign its
rights or delegate its duties hereunder without the prior written consent of the
other party.
10. Amendments. The Service Provider agrees that it will not
consent to any amendment to any of the Administration Agreement, the Custodian
Agreement, the Paying Agent Agreement or the Collateral Agreement without the
prior written consent of Xxxxxxx Xxxxx Xxxxxx.
11. 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 modification is in
writing and is signed by all the parties to this Agreement.
12. 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 Barney shall be furnished to Cleary,
Gottlieb, Xxxxx & Xxxxxxxx, Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxxx X. Check, provided that in each case 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.
13. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.
14. Governing Law. This Agreement shall be governed by and be
construed in accordance with the laws of the State of New York.
15. Force Majeure. The Service Provider shall not be liable
for any claims, losses, liabilities, damages or expenses (including attorneys'
fees and expenses) due to forces beyond the reasonable control of the Service
Provider, including without limitation strikes, work stoppages, acts of war or
terrorism, insurrection, revolution, nuclear or natural catastrophes or acts of
God, and interruptions, loss or malfunctions of utilities, communications or
computer (software and hardware) services; provided that this provision shall
not protect the Service Provider against any liability to which it would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties hereunder.
16. Counterparts. This Agreement may be signed in counterpart
with all of such counterparts constituting one and the same instrument.
SCHEDULE I
to Fund Expense Agreement
Up-front Fee Amount: $[ ]
Up-front Expense Amount: $[ ]
