EXHIBIT K(5)
FUND EXPENSE AGREEMENT
Agreement dated as of September __, 1997 among D.M.S. Endowment, LLC,
▇▇▇▇▇▇ Partners, LLC, ▇.▇. ▇▇▇▇▇▇▇, LLC and USN College Marketing, L.P. (each, a
"Contracting Stockholder" and, collectively, the "Contracting Stockholders"),
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., Inc. ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and The Bank of New York (the
"Service Provider"), in its capacities as administrator, custodian and
collateral agent for ▇▇▇▇▇▇ STRYPES Trust (the "Trust").
WHEREAS, the Trust is a business trust organized 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 September , 1997 (the "Trust Agreement");
and
WHEREAS, the Contracting Stockholders 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 of the Custodian Agreement, Section 5.4(b)
of the Paying Agent Agreement and Section 7.6 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. The Contracting Stockholders jointly and severally agree to pay
to the Service Provider in Federal (same day) funds at the Closing Time the Up-
front Fee Amount, the Offering Expense Amount, the Organizational Expense 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 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 each
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 Stockholders, 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 each 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 each Contracting Stockholder in writing
promptly following the incurring of any Additional Expense. Such
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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 paragraph (b) of this Section 3,
▇▇▇▇▇▇▇ ▇▇▇▇▇ agrees to pay to the Service Provider from time to time the amount
of any Additional Expense. 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 Stockholders jointly and severally agree to reimburse
▇▇▇▇▇▇▇ ▇▇▇▇▇ from time to time for the amount of any Additional Expense paid by
▇▇▇▇▇▇▇ ▇▇▇▇▇ pursuant to paragraph (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 Stockholders 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 Stockholders 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,
▇▇▇▇▇▇▇ ▇▇▇▇▇ shall pay the amount of such Additional Expense, and the
Contracting Stockholders shall reimburse ▇▇▇▇▇▇▇ ▇▇▇▇▇ for the amount so paid,
subject to later adjustment and credit if such dispute is resolved in favor of
▇▇▇▇▇▇▇ ▇▇▇▇▇ or the Contracting Stockholders, as the case may be.
4. CONDITION TO PAYMENT. The obligations of the Contracting Stockholders
under Sections 2 and 3 hereof and the obligations of ▇▇▇▇▇▇▇ ▇▇▇▇▇ under Section
3 hereof shall be subject to the condition that the Structured Yield Product
Exchangeable for Stock/SM/ (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 each Contracting Stockholder in New York Clearing House
(next-day) funds such Contracting Stockholder's pro rata share of the amount of
such excess.
________________________________
(SM) Service ▇▇▇▇ of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., Inc.
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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 each Contracting Stockholder
in New York Clearing House (next-day) funds such Contracting Stockholder's pro
rata share of (i) 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) 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 (or cause to be prepared and maintained)
adequate books and records showing all receipts and disbursements of funds in
connection therewith. ▇▇▇▇▇▇▇ ▇▇▇▇▇ and each 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 8.3 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
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 each 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 Stockholders: D.M.S. Endowment, LLC
[address]
Telecopier: ( )
Attention:
▇▇▇▇▇▇ Partners, LLC
[address]
Telecopier: ( )
Attention:
▇.▇. ▇▇▇▇▇▇▇, LLC
[address]
Telecopier: ( )
Attention:
USN College Marketing, L.P.
[address]
Telecopier: ( )
Attention:
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
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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.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their authorized representatives the date first above written.
D.M.S. ENDOWMENT, LLC
By:___________________________
Name:
Title:
▇▇▇▇▇▇ PARTNERS, LLC
By:___________________________
Name:
Title:
▇.▇. ▇▇▇▇▇▇▇, LLC
By:___________________________
Name:
Title:
USN COLLEGE MARKETING, L.P.
By:___________________________
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO., INC.
By:___________________________
Name:
Title:
THE BANK OF NEW YORK
By:___________________________
Name:
Title:
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