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Exhibit 2.k.(v)
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 CVS 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 Xxxxx, 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 Sachs pursuant to Section 3(a)(i) hereof.
"First Time of Delivery" shall have the meaning ascribed thereto in
the Underwriting Agreement.
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"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 Xxxxx 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 Sachs (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, 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 Sachs, incur on behalf of the Trust (i) any single expense in excess of
$1,000 or (ii) in any calendar period, expenses
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aggregating in excess of $3,000. Subject to the foregoing, the Service Provider
shall give notice to Xxxxxxx Xxxxx 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 agrees to pay to the Service Provider from time to time the
amount of any Additional Expense. Payment by Xxxxxxx Sachs 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 from the Service Provider of
notice of the incurring thereof or (ii) the due date for the payment of such
Additional Expense.
(d) Xxxxxxx Sachs 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 shall pay the amount
of such Additional Expense subject to later adjustment and credit if such
dispute is resolved in favor of Xxxxxxx Sachs.
4. Condition to Payment. Xxxxxxx Xxxxx' 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 Sachs in New York Clearing House funds
the amount of such excess.
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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 Xxxxx 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 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.
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 of the Administration Agreement, the Custodian Agreement, the
Paying Agent Agreement or the Collateral Agreement without the prior written
consent of Xxxxxxx Xxxxx.
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.
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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, SACHS & CO.
By____________________________
Address:
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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By____________________________
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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