1
Exhibit (k)(5)
FUND EXPENSE AGREEMENT
This FUND EXPENSE AGREEMENT dated as of this___ day of May, 1998, among
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated and
▇▇▇▇▇▇▇, Sachs & Co. (collectively, the "Underwriters"), the ▇▇▇▇▇▇ Children
Trust, a trust made by ▇▇▇ ▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ and
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ as Donors under the Indenture of Trust dated January 21,
1980, as amended, and for which ▇▇▇ ▇▇▇▇▇▇, ▇▇. and ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ act as
Co-Trustees (such trust and the co-trustees thereof acting in their capacities
as such being hereinafter referred to as the "Contracting Stockholder"), ▇▇▇▇▇▇▇
▇▇▇▇▇ & Co., Inc. ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and The Bank of New York (the "Service
Provider"), in its capacities as administrator, custodian, paying agent and
collateral agent for Dollar General STRYPES Trust (the "Trust").
WHEREAS, the Trust is a business trust created pursuant to the Business
Trust Act of the State of Delaware (Chapter 38, Title 12, of the Delaware Code,
12 Del.C. (Sections 3801 et seq.)), under and by virtue of an Amended and
Restated Trust Agreement dated as of May 1, 1998 (the "Trust Agreement"); and
WHEREAS, the Underwriters, the Contracting Stockholder and ▇▇▇▇▇▇▇ ▇▇▇▇▇
desire 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 ▇▇▇▇▇▇▇ ▇▇▇▇▇ pursuant to Section 3(a) hereof.
"Closing Time" shall have the meaning ascribed thereto in the Purchase
Agreement.
"Offering Expense Amount" means the amount set forth as such on Schedule I
hereto as the fees and expenses of the Trust incurred in connection with the
offering of the STRYPES.
"Ordinary Expense" of the Trust means any expense of the Trust other than
any expense of the Trust arising under Sections 2.2(g) and 6.6 of the
Administration Agreement, Section 15
2
of the Custodian Agreement, Section 5.4(b) of the Paying Agent Agreement and
Section 7.06 of the Trust Agreement.
"Organizational Expense Amount" means the amount set forth as such on
Schedule II hereto as the fees and expenses of the Trust incurred in connection
with the organization of the Trust.
"Up-front Fee Amount" means the amount set forth as such on Schedule III
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
IV 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 OFFERING, ORGANIZATIONAL AND
UP-FRONT EXPENSES. (a) The Underwriters severally agree to pay to the Service
Provider in Federal (same day) funds at the Closing Time the Offering Expense
Amount, the Organizational Expense Amount and the Up-Front Fee Amount.
(b) The Contracting Stockholder agrees to pay to the Service Provider in
Federal (same day) funds at the Closing Time 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 and all Ordinary
Expenses set forth on Schedule IV hereto which are anticipated but have not yet
been 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 ▇▇▇▇▇▇▇ ▇▇▇▇▇ and to the
Contracting Stockholder (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 ▇▇▇▇▇▇▇ ▇▇▇▇▇ and the Contracting Stockholder, 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 ▇▇▇▇▇▇▇
▇▇▇▇▇ and the Contracting Stockholder, incur on behalf of the Trust (i) any
single expense in excess of $2,500 or (ii) in any calendar quarter expenses
aggregating in excess of $5,000. Subject to the foregoing, the Service Provider
shall give notice to ▇▇▇▇▇▇▇ ▇▇▇▇▇ and the Contracting Stockholder in writing
promptly following the incurring of any Additional Expense. Such notice to
▇▇▇▇▇▇▇ ▇▇▇▇▇ shall be accompanied by any demand, ▇▇▇▇, invoice or other similar
document in respect of such Additional Expense.
(c) Subject to the first sentence of subsection (b) of this Section 3,
▇▇▇▇▇▇▇ ▇▇▇▇▇ agrees to pay to the Service Provider from time to time the amount
of any Additional Expense.
2
3
Payment by ▇▇▇▇▇▇▇ ▇▇▇▇▇ of any Additional Expense shall be made in New York
Clearing House (next-day) funds by the later of (i) five Business Days after the
receipt by ▇▇▇▇▇▇▇ ▇▇▇▇▇ from the Service Provider of notice of the incurring
thereof or (ii) two Business Days prior to the due date for the payment of such
Additional Expense.
(d) The Contracting Stockholder agrees to reimburse ▇▇▇▇▇▇▇ ▇▇▇▇▇ from
time to time for the amount of any Additional Expense paid by ▇▇▇▇▇▇▇ ▇▇▇▇▇
pursuant to subsection (c) of this Section 3. ▇▇▇▇▇▇▇ ▇▇▇▇▇ shall be reimbursed
for any such Additional Expense in New York Clearing House (next-day) funds by
the later of (i) five Business Days after the receipt by the Contracting
Stockholder from the Service Provider of notice of the incurring thereof or (ii)
two Business Days prior to the due date for the payment of such Additional
Expense.
(e) ▇▇▇▇▇▇▇ ▇▇▇▇▇ or the Contracting Stockholder 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 subsection (b) of this Section 3, ▇▇▇▇▇▇▇ ▇▇▇▇▇
shall pay the amount of such Additional Expense, and the Contracting Stockholder
shall reimburse ▇▇▇▇▇▇▇ ▇▇▇▇▇ for the amount so paid, subject to later
adjustment and credit if such dispute is resolved in favor of ▇▇▇▇▇▇▇ ▇▇▇▇▇ or
the Contracting Stockholder, as the case may be.
4. CONDITION TO PAYMENT. The obligations of the Underwriters under Section
2(a) hereof, the obligations of the Contracting Stockholder under Sections 2(b)
and 3 hereof and the obligations of ▇▇▇▇▇▇▇ ▇▇▇▇▇ under Section 3 hereof shall
be subject to the condition that the Structured Yield Product Exchangeable for
StockSM (the "STRYPES") issued by the Trust shall have been issued and paid for
at the Closing Time.
5. TRUST DISSOLUTION; REFUND OF UNUSED EXPENSE FUNDS. If at the
dissolution 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 dissolution shall be less than the
Up-front Expense Amount, the Service Provider shall, promptly following the date
of such dissolution, pay to the Contracting Stockholder in New York Clearing
House (next-day) 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, (i) the Service Provider shall promptly pay to the Underwriters in New
York Clearing House (next-day) funds the portion of the Service Provider's
Up-front Fee Amount ratable for the period from the date of the termination of
the Administration Agreement to the Exchange Date and (ii) the Service Provider
shall promptly pay to the Contracting Stockholder in New York Clearing House
(next-day) Funds 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
----------
(SM) Service ▇▇▇▇ of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., Inc.
3
4
maintain (or cause to be prepared and maintained) adequate books and records
showing all receipts and disbursements of funds in connection therewith. ▇▇▇▇▇▇▇
▇▇▇▇▇ and the Contracting Stockholder 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
dissolution of the Trust in accordance with Section 8.03 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
parties.
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 ▇▇▇▇▇▇▇ ▇▇▇▇▇ and the Contracting Stockholder.
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 directed as follows
(or to such other address for a particular party as shall be specified by such
party in a like notice given pursuant to this Section 12):
The Service Provider: The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇: ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., Inc.
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
The Contracting Stockholder: ▇▇▇▇▇▇ Children Trust
c/o Dollar General Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇, ▇▇.
The Underwriters: ▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
4
▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier: (212) _____________
Attention: Syndicate Operations
A copy of any communication to ▇▇▇▇▇▇▇ ▇▇▇▇▇ shall be furnished to ▇▇▇▇▇▇▇ ▇▇▇▇▇
& Co., Inc., World Financial Center, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
telecopier (▇▇▇) ▇▇▇-▇▇▇▇, Attention: Associate General Counsel, provided that
the failure to furnish such copy shall not affect the effectiveness of any such
communication. Except as otherwise specifically provided herein, all notices and
other communications provided for hereunder shall be in writing and shall be
deemed to have been duly given if either (i) personally delivered (including
delivery by courier service or by Federal Express or any other nationally
recognized overnight delivery service for next day delivery) to the offices set
forth above, in which case they shall be deemed received on the first Business
Day by which delivery shall have been made to said offices, (ii) transmitted by
any standard form of telecommunication to the offices set forth above, in which
case they shall be deemed received on the first Business Day by which a standard
confirmation that such transmission occurred is received by the transmitting
party (unless such confirmation states that such transmission occurred after
5:00 P.M. on such first Business Day, in which case delivery shall be deemed to
have been received on the immediately succeeding Business Day), or (iii) sent by
certified mail, return receipt requested to the offices set forth above, in
which case they shall be deemed received when receipted for unless
acknowledgment of receipt is refused (in which case delivery shall be deemed to
have been received on the first Business Day on which such acknowledgment is
refused).
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 CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE.
15. COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which shall be an original and all of which shall constitute but one and
the same instrument.
5
6
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their authorized representatives the date first above written.
▇▇▇▇▇▇ CHILDREN TRUST
By:
-----------------------------------
▇▇▇ ▇▇▇▇▇▇, ▇▇., as Co-Trustee
By:
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, as Co-Trustee
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO., INC.
By:
-----------------------------------
Name:
Title:
THE BANK OF NEW YORK
By:
-----------------------------------
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇▇▇▇▇▇▇, SACHS & CO.
By: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By:
-----------------------------------
Authorized Signatory
6
7
7
8
SCHEDULE I
Item Amount
---- ------
NYSE Listing Fees $
Printing (other than STRYPES Certificates)
Legal Fees
Blue Sky Fees
Initial Legal Review
Miscellaneous
-----------
Total $
8
9
SCHEDULE II
Item Amount
---- ------
STRYPES Certificates $
Fees and Expenses of Special Delaware
Counsel to the Trust
---------
Total $
9
10
SCHEDULE III
Item Amount
---- ------
Initial Acceptance Fee $
Administrative Agent Fee
-----------
Total $
10
11
SCHEDULE IV
Item Amount
---- ------
Ongoing NYSE Listing Fees $
Administrative Agent's Accountants
Initial and Ongoing Auditor of the Trust
Mailing of Reports to Shareholders
Trustees Fees
Preparation and Filing of Annual Tax
Returns of the Trust
Ongoing Legal Fees of Trust Counsel
Out of Pocket/Miscellaneous
-----------
Total $
11