FUND EXPENSE AGREEMENT
Agreement dated as of ______, 1997 between Salomon
Brothers Inc ("Salomon") and The Bank of New York (the "Service
Provider"), in its capacities as administrator, custodian, paying
agent and collateral agent for DECS Trust (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 November 21, 1995,
as amended and restated as of _____, 1997 (the "Trust Agreement");
and
WHEREAS Salomon 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 Salomon 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. Salomon
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 Salomon (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 Salomon, 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 Salomon, 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 Salomon 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, Salomon agrees to pay to the Service Provider
from time to time the amount of any Additional Expense. Payment
by Salomon 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 Salomon of written notice from the Service
Provider of the incurring thereof or (ii) the due date for the
payment of such Additional Expense.
(d) Salomon 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, Salomon shall pay
the amount of such Additional Expense, subject to later
adjustment and credit if such dispute is resolved in favor of
Salomon.
4. Condition to Payment. The obligations of Salomon
hereunder shall be subject to the condition that the Trust's DECS
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 Salomon in New York Clearing House
funds the amount of such excess.
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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 Salomon
(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.
Salomon 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
Salomon.
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. 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.
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15. Counterparts. This Agreement may be signed in
counterpart with all of such counterparts constituting one and
the same instrument.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed by their authorized representatives the
date first above written.
SALOMON BROTHERS INC
By:_________________________
Address: Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
THE BANK OF NEW YORK
By:_________________________
Address: 000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxx
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SCHEDULE I
to Fund Expense Agreement
Up-front Fee Amount: $130,000
Up-front Expense Amount: $110,000
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