S&C Draft of May 8, 1998
FUND EXPENSE AGREEMENT
FUND EXPENSE AGREEMENT, dated as of May __, 1998, between
Xxxxxxx, Xxxxx & Co. ("Xxxxxxx Sachs") and _____________ (the "Service
Provider"), in its capacities as custodian, paying agent and collateral agent
for Xxxxx Xxxxxx 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
May __, 1998 (the "Trust Agreement"); and
WHEREAS, Xxxxxxx Sachs, as sponsor under the Trust
Agreement, desires to make provisions for the payment of certain initial and
on-going 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 pursuant to Section 3(a)(i)
hereof.
"First Time of Delivery" 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 Section 6.6 of the
Administration Agreement, Section 15 of the Custodian Agreement, Section 5.4(b)
of the Paying Agent Agreement, or 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 Sachs
agrees to pay to the Service Provider in Federal (same day) funds at the First
Time of Delivery 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
(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 Sachs,
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, incur on behalf of the Trust (i) any single expense in excess
of $1,000 or (ii) in any calendar period, expenses aggregating in excess of
$3,000. Subject to the foregoing, the Service Provider shall give notice to
Xxxxxxx Sachs 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 Sachs agrees to pay to the Service Provider from time to
time the amount of any Additional Expense. Payment by Xxxxxxx Xxxxx 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 Sachs from the Service
Provider of notice
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of the incurring thereof or (ii) the due date for the payment of such
Additional Expense.
(d) Xxxxxxx Xxxxx 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 Sachs
shall pay the amount of such Additional Expense subject to later adjustment and
credit if such dispute is resolved in favor of Xxxxxxx Xxxxx.
4. Condition to Payment. Xxxxxxx Sachs' obligations under
paragraphs 2 and 3 hereof shall be subject to the condition that the Trust's
Automatic Common Exchange Securities shall have been issued and paid for at the
First Time of Delivery.
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 Expenses Amount, the Service Provider shall, promptly
following the date of such termination, pay to Xxxxxxx Xxxxx in New York
Clearing House funds the amount of such excess.
6. Termination of Administration Agreement. In the event of
the termination of the Administration Agreement in accordance with Section 4.1
thereof, the Service Provider shall promptly pay to Xxxxxxx Sachs the portion
of its Up-front Fee Amount ratable for the period from the date of the
termination of the Administration Agreement to the Exchange Date together with
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 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.
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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 of the Administration Agreement, the Custodian
Agreement, the Paying Agent Agreement or the Collateral Agreement without the
prior written consent of Xxxxxxx Sachs.
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.
15. 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
Expense Agreement to be executed by their authorized representatives the date
first above written.
XXXXXXX, XXXXX & CO.
By
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Address:
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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By
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Address:
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SCHEDULE I
Directors & Officers Insurance $ 82,500
Fidelity Bond $ 7,000
Tax on Directors & Officers
Insurance and Fidelity Bond $ 4,000
Trustees Fees $ 36,000
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Acceptance Fee $ 5,000
Annual Administrative Fee $125,000
External Counsel Fees $100,000
Accounting Fees $100,000
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Total $459,500
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