Exhibit (k)(1)
FORM OF
ADMINISTRATION AGREEMENT
This ADMINISTRATION AGREEMENT dated as of this October [-], 2001 by
and between The Bank of New York, a New York banking corporation (the
"Administrator"), and Equity Securities Trust I (such trust and the trustees
thereof acting in their capacity as such being referred to herein as the
"Trust"), a statutory business trust organized under the Business Trust Act of
the State of Delaware pursuant to a Declaration of Trust dated as of April 11,
2000 as amended and restated as of October [ ], 2001 (the "Trust Agreement").
WITNESSETH
WHEREAS the Trust is a non-diversified, closed-end management
investment company, as defined in the Investment Company Act of 1940 (the
"Investment Company Act"), formed to purchase and hold certain U.S. treasury
securities (the "Treasury Securities"), to enter into and hold the forward
contracts with respect to the stock of Cablevision Systems Corporation (the
"Company") (individually, a "Contract" and collectively, the "Contracts") and to
issue Equity Trust Securities in accordance with the terms and conditions of the
Trust Agreement;
WHEREAS the Trust desires to engage the services of the
Administrator to assume certain duties and responsibilities of the Trust under
the Trust Agreement and the Investment Company Act and to undertake certain
services on behalf of and subject to the supervision of the Trust as provided
herein; and
WHEREAS the Administrator is qualified and willing to assume such
duties and responsibilities and to undertake to render such services, subject to
the supervision of the Trust, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.1. Definitions. Capitalized terms not otherwise defined herein
shall have the respective meanings specified in the Trust Agreement.
ARTICLE II
ENGAGEMENT OF ADMINISTRATOR
2.1. Engagement. The Trust hereby engages the Administrator, and
the Administrator hereby agrees to be so engaged, to provide or cause the
provision of the services hereinafter enumerated.
2.2. Services of Administrator. Subject to the supervision of the
Trust, the Administrator shall on behalf of the Trust take the actions set forth
in Sections 2.6, 2.7 and 2.8 of
the Trust Agreement, to the extent such responsibilities can lawfully be
delegated to the Administrator; provided, however, that the Administrator shall
not (i) render investment advisory services to the Trust as defined in the
Investment Company Act or the Investment Advisers Act of 1940; (ii) have the
power of the Trustees to sell the Treasury Securities except as provided in
Section 2.8 of the Trust Agreement; or (iii) have the power to select the
independent public accountants for the Trust. Additionally, the Administrator
shall be responsible for rendering the following services:
(a) instructing the Paying Agent on behalf of the Trust to take the
actions set forth in Sections 2.6, 2.7, 2.8 and 3.5 of the Trust Agreement and
to otherwise perform the duties of the Paying Agent referred to in the Trust
Agreement;
(b) with the approval of the Trustees, engaging legal and other
professional advisors, other than the Trust's independent accountants as
provided in clause 2.2 (iii) above;
(c) receiving all demands, bills and invoices for expenses incurred
by or on behalf of the Trust and pay the same, or cause the Paying Agent to pay
the same, out of moneys paid to the Administrator pursuant to the Fund Expense
Agreement dated the date hereof between Xxxxxxx Xxxxx Xxxxxx Inc. and The Bank
of New York (the "Fund Expense Agreement") but in no event out of any assets of
the Trust, and give notice to Xxxxxxx Xxxxx Barney Inc. pursuant to the Fund
Indemnity Agreement dated the date hereof between Xxxxxxx Xxxxx Xxxxxx Inc. and
the Trust (the "Fund Indemnity Agreement") of any claim for Indemnification
Expenses (as defined in the Fund Indemnity Agreement) or any threatened claim
for Indemnification Expenses;
(d) (i) keeping or causing to be kept all the books and records of
the Trust (other than those to be kept by the Paying Agent), (ii) preparing and,
as necessary, mailing, filing or publishing, or, as appropriate, directing the
Paying Agent or cause the legal and other professional advisors engaged pursuant
to Section 2.2(b) to prepare and, as necessary, mail, file or publish any and
all notices, proxies, reports, tax returns and other communications and
documents as required under the Trust Agreement, the Investment Company Act, the
Securities Exchange Act of 1934, or the Code, or, as reasonably requested by the
Trustees, under any other applicable laws, rules or regulations or otherwise;
provided, however, that responsibility for the adequacy and accuracy of any such
reports, returns, etc. shall be that of the Trustees and provided, further, that
the Administrator shall have no liability for the adequacy or accuracy of such
reports, returns, etc., and (iii) witholding amounts described in Section 8.2(b)
of the Trust Agreement;
(e) at the request of the Trustees and upon being furnished with
such reasonable security and indemnity against any related expense or liability
as the Administrator may require, instituting and prosecuting, in accordance
with the instructions of the Trustees, legal or other appropriate proceedings to
enforce any and all rights and remedies of the Trust;
(f) receiving and reviewing on behalf of the Trust all notices,
reports, certificates and other documents regarding the Contracts and the
Treasury Securities;
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(g) making or causing to be made all necessary arrangements with
respect to meetings of Trustees and meetings of Holders, including, without
limitation, the preparation of notices, proxies and minutes, subject to the
approval of the Trustees; and
(h) in conjunction with the Trustees, determining and publishing, in
such manner as the Trustees shall direct in writing, the Trust's net asset value
in accordance with Section 8.2(c) of the Trust Agreement and the Trust's policy
as set forth in the Prospectus.
2.3. Certain Rights of the Administrator; Force Majeure. In
connection with the performance of its duties under this Agreement, the
Administrator shall not be liable to the Trust, the Trustees or any Holder (i)
for any action taken or for refraining from taking any action hereunder except
in the case of its willful misfeasance, bad faith, gross negligence or the
reckless disregard of its duties hereunder, (ii) with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
directions of the Trustees or of any Trustee, (iii) in connection with the
performance of its duties under Section 2.2(h) hereof, for good faith reliance
upon information furnished by third parties selected by the Administrator with
due care or (iv) for any claims, losses, liabilities, damages or expenses
(including attorneys' fees and expenses) due to forces beyond the reasonable
control of the Administrator, including without limitation strikes, work
stoppages, acts of war or terrorism, insurrection, revolution, nuclear or
natural catastrophes or acts of God, and interruptions, loss or malfunctions of
utilities, communications or computer (software and hardware) services; provided
that this provision shall not protect the Administrator against any liability to
which it would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties hereunder. The Administrator
shall under no circumstances be liable for any punitive, exemplary, indirect or
consequential damages. The Administrator may consult with counsel and the
written advice of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon. The Administrator may perform its duties
and exercise its rights hereunder either directly or by or through agents or
attorneys appointed with due care by it but shall be liable for the acts and
omissions of such persons to the same extent as if the functions had been
performed by the Administrator itself (except as to the extent that the Trustees
shall have directed the Administrator to retain such persons, in which event the
Administrator shall not be liable for such persons' acts or omissions). Without
limiting the generality of the preceding sentence, the Administrator (i) may
select and employ independent public accountants acceptable to the Trustees
(other than the independent public accountants referred to in clause (iii) of
Section 2.2 of this Agreement and Section 2.5(d) of the Trust Agreement) to keep
the financial books and records of the Trust, to prepare the financial
statements of the Trust and to prepare Trust tax returns, and (ii) may select
and engage attorneys acceptable to the Trustees to prepare annual, semiannual
and periodical reports, notices of meetings and proxy statements, annual reports
to Holders and other documents required under the Investment Company Act or the
Securities Exchange Act of 1934. The Administrator shall not be liable and shall
be fully protected in acting upon any writing or document reasonably believed by
it to be genuine and to have been given, signed or made by the proper person or
persons and shall not be held to have any notice of any change of authority of
any person until receipt of written notice thereof from a Trustee.
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2.4. Power of Attorney. The Trustees hereby appoint the
Administrator, acting through any duly appointed officer, the attorney-in-fact
and agent of the Trust for the purpose of performing the duties prescribed in
Sections 2.2(d)(ii) and 2.2(g) hereof.
2.5. Delivery of Certain Documents. The Trust will deliver to the
Administrator, promptly following the execution hereof: (a) a complete conformed
copy of the registration statement of the Trust under the Securities Act and the
Investment Company Act, including all amendments, exhibits and schedules
thereto; and (b) the XXXXX access codes (Central Index Key, CIK Confirmation
Code, Password and Password Modification Access Code) employed to file such
registration statement.
ARTICLE III
COMPENSATION OF ADMINISTRATOR
3.1. Compensation. (a) For services to be rendered by the
Administrator (i) pursuant to this Agreement, (ii) as custodian under the
Custodian Agreement, dated as of October 2, 2001, between the Administrator, as
custodian, and the Trust, (iii) as paying agent under the Paying Agent
Agreement, dated as of October [ ], 2001, between the Administrator, as paying
agent, and the Trust, and (iv) as collateral agent under the Collateral
Agreements, dated as of October [ ], 2001, among the Administrator, as
collateral agent, each of the Counterparties and the Trust, and for the payment
of Trust expenses pursuant to Section 2.2(c) hereof, the Administrator shall
receive only such fees and expenses as shall be paid to it pursuant to the terms
of the Fund Expense Agreement and shall have no recourse to the assets of the
Trust for the payment of any such amounts.
(b) In connection with the performance of the services referred to
in Section 3.1(a) hereof, the Administrator, as such or in any other capacity,
shall not be required to advance, expend or risk its own funds or otherwise
incur or become exposed to financial liability in the performance of its duties
hereunder or under the other agreements referred to in Section 3.1(a) hereof.
3.2. Additional Services. If and to the extent that the Trustees
shall request the Administrator to render services for the Trust, other than
those to be rendered by the Administrator hereunder, and if the Administrator
agrees to render such services, such additional services shall be compensated
separately on terms to be agreed upon between the Administrator and the Trustees
from time to time.
ARTICLE IV
TERMINATION
4.1. Termination.
(a) This Agreement shall terminate immediately upon written notice
of termination from the Trustees to the Administrator if any of the following
events shall occur:
(i) If the Administrator shall violate or default in the performance
of any provision of this Agreement, the Trust Agreement, or the Investment
Company Act, and
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after notice of such violation or default, shall not cure such violation
or default within 30 days; or
(ii) If the Administrator shall be adjudged bankrupt or insolvent by
a court of competent jurisdiction, or an order shall be made by a court of
competent jurisdiction for the appointment of a receiver, liquidator, or
trustee of the Administrator, or of all or substantially all of its
property by reason of the foregoing, or approving any petition filed
against the Administrator for its reorganization, and such adjudication or
order shall remain in force or unstayed for a period of 30 days; or
(iii) If the Administrator shall institute proceedings for voluntary
bankruptcy, or shall file a petition seeking reorganization under the
federal bankruptcy laws, or for relief under any law for the relief of
debtors, or shall consent to the appointment of a receiver of the
Administrator or of all or substantially all of its property, or shall
make a general assignment for the benefit of its creditors, or shall admit
in writing its inability to pay its debts generally as they become due; or
(iv) Upon the voluntary or involuntary dissolution of the
Administrator, or unless the Trust shall have given its prior written
consent thereto, the merger or consolidation of the Administrator with any
other entity.
If any of the events specified in clauses (ii), (iii) or (iv) of
this Section 4.1(a) shall occur, the Administrator shall give immediate written
notice thereof to the Trustees.
(b) Notwithstanding anything to the contrary contained herein, this
Agreement shall terminate immediately (i) upon termination of the Trust
Agreement, (ii) upon termination of the Paying Agent Agreement, (iii) upon
termination of all Collateral Agreements, (iv) upon termination of the Custodian
Agreement or (v) upon the resignation or removal of the Custodian.
(c) The Trustees may remove the Administrator, or the Administrator
may resign, and thereby terminate this Agreement without penalty upon 60 days'
prior written notice to the other party hereto; provided that neither party
hereto may terminate this Agreement pursuant to this Section 4.1(c) unless a
successor Administrator shall have been appointed and shall have accepted the
duties of the Administrator. If, within 30 days after notice by the
Administrator to the Trustees of termination of this Agreement, no successor
Administrator shall have been selected and accepted the duties of the
Administrator, the Administrator may apply to a court of competent jurisdiction
for the appointment of a successor Administrator.
4.2. Effect of Termination. The Administrator shall forthwith upon
termination of this Agreement deliver to the Trustees any records or other
property of the Trust then in the possession or custody of the Administrator.
Any obligation to indemnify the Administrator pursuant to Section 6.6 hereof
shall survive the termination of this Agreement.
ARTICLE V
RECORDS AND REPORTS
5.1. Books and Records; Inspection and Copying. The Administrator
shall keep, or cause to be kept, appropriate, and reasonably detailed and
accurate, books and records
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of all its activities pursuant to this Agreement. The Trustees shall have the
right to inspect such books and records during the Administrator's normal
business hours upon reasonable request, and to make copies of the same at the
expense of the Trust.
5.2. Access to Information. The Administrator shall make available
to each of the Trustees all information it receives and compiles with respect to
the Contracts and the Treasury Securities, the moneys available to the Trust,
the financial condition of the Trust and all other relevant matters concerning
the Trust.
ARTICLE VI
MISCELLANEOUS
6.1. Binding Effect. Any corporation into which the Administrator
may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Administrator shall be a party, shall be the successor Administrator hereunder
and under the Trust Agreement without the execution or filing of any paper,
instrument or further act to be done on the part of the parties hereto, provided
that such corporation meets the requirements set forth in the Trust Agreement
and provided further that the Trustees have given their prior written consent to
the Administrator with respect to any such merger, conversion or consolidation.
This Agreement shall be binding on and inure to the benefit of the parties
hereto and their respective successors and permitted assigns.
6.2. Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to the matters contained herein and supersedes
all prior agreements or understandings, whether oral or written. This Agreement
shall not be amended, changed, modified, or discharged, in whole or in part,
except by an instrument in writing signed by both parties hereto, or their
respective successors or permitted assigns.
6.3. Notices. Any notice, report or other communication required or
permitted to be given hereunder shall be in writing, and shall, unless some
other method of giving such notice, report or other communication is accepted by
the party to whom it is to be given or is required by the Trust Agreement or the
Investment Company Act, be given by being mailed by U.S. first class mail,
certified or registered, return receipt requested, postage prepaid, to the
following addresses of the parties hereto:
The Trust: Equity Securities Trust I
C/o Puglisi & Associates
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Telephone: 000-000-0000
Telecopier: 000-000-0000
The Administrator: The Bank of New York
0 Xxxx Xxxxx, 00xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxxx
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Telephone: 000-000-0000
Telecopier: 000-000-0000
Any party may at any time give written notice to the other party
that it wishes to change its address for the purposes of this Section 6.3.
6.4. Applicable Law. The provisions of this Agreement shall be
construed and interpreted in accordance with the laws of the State of New York
as at the time in effect except to the extent such law is preempted by federal
law.
6.5. Non-assignability. This Agreement and the rights and
obligations of the parties hereunder may not be assigned or delegated by either
party without the prior written consent of the other party.
6.6. Indemnification. The Trust shall indemnify and hold the
Administrator harmless from and against any loss, damages, cost or expense
(including the costs of investigation, preparation for and defense of legal
and/or administrative proceedings related to a claim against it and reasonable
attorneys' fees and disbursements), liability or claim incurred by reason of any
inaccuracy in information furnished to the Administrator by the Trustees, or any
act or omission in the course of, connected with or arising out of any services
to be rendered hereunder, except for loss, liability claim or expense arising
under Section 5.1(c) of the Paying Agent Agreement dated October [ ], 2001
between The Bank of New York and Equity Securities Trust I, provided that the
Administrator shall not be indemnified and held harmless from and against any
such loss, damages, cost, expense, liability or claim incurred by reason of its
willful misfeasance, bad faith, or gross negligence in the performance of its
duties, or its reckless disregard of its duties and obligations hereunder.
6.7. Provisions of Law to Control. This Agreement shall be subject
to the applicable provisions of the Investment Company Act and the rules and
regulations of the Commission thereunder. To the extent that any provisions
herein contained conflict with any applicable provisions of the Investment
Company Act or such rules and regulations, the latter shall control.
6.8. Counterparts. This Agreement may be signed in counterparts
with all counterparts constituting one and the same instrument.
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