EXHIBIT K(1)
ADMINISTRATION AGREEMENT
This ADMINISTRATION AGREEMENT dated as of this day of September, 1997,
by and between The Bank of New York, a New York banking corporation (the
"Administrator"), and Xxxxxx STRYPES Trust (such trust and the trustees thereof
acting in their capacity as such being referred to herein as the "Trust"), 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").
W I T N E S S E T H
WHEREAS, the Trust is a non-diversified, closed-end management investment
company, as defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act"), formed to purchase and hold certain zero-coupon U.S.
Government securities (the "U.S. Treasury Securities"), to enter into and hold a
forward purchase contract (the "Contract") with The Bank of New York, as agent
and custodian for and on behalf of the Trust, and D.M.S. Endowment, LLC, Xxxxxx
Partners, LLC, X.X. Xxxxxxx, LLC and USN College Marketing, L.P. (the
"Contracting Stockholders"), each being a stockholder of Xxxxxx Communications,
Inc., and to issue Structured Yield Product Exchangeable for Stock(SM) (the
"STRYPES") 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 Trustees 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:
_____________________
(SM) Service xxxx of Xxxxxxx Xxxxx & Co., Inc.
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, as amended; (ii) have the power of the Trustees to sell
the U.S. 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 to the Trust:
(a) pay, or cause the Paying Agent to pay, out of moneys paid to the
Administrator pursuant to the Fund Expense Agreement, dated as of September ,
1997, among the Contracting Stockholders, Xxxxxxx Xxxxx & Co., Inc. ("Xxxxxxx
Xxxxx") and the Administrator (the "Fund Expense Agreement"), but in no event
out of the Trust Estate, the fees and expenses of the Trust incurred in
connection with the offering of the STRYPES as specified in Schedule I hereto;
(b) pay, or cause the Paying Agent to pay, out of moneys paid to the
Administrator pursuant to the Fund Expense Agreement, but in no event out of the
Trust Estate, the fees and expenses of the Trust incurred in connection with the
organization of the Trust as specified in Schedule II hereto;
(c) instruct the Paying Agent on behalf of the Trust to take the
actions set forth in Sections 2.6, 2.7 and 2.8 of the Trust Agreement and to
otherwise perform the duties of the Paying Agent referred to in the Trust
Agreement;
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(d) with the approval of the Trustees, engage legal and other
professional advisors, other than the Trust's independent accountants as
provided in clause 2.2 (iii) above, to perform services on behalf of the Trust;
(e) pay all demands, bills and invoices for expenses incurred by or
on behalf of the Trust, or cause the Paying Agent to pay the same, out of moneys
paid to the Administrator pursuant to the Fund Expense Agreement, but in no
event out of the Trust Estate and give notice to Xxxxxxx Xxxxx and the
Contracting Stockholders pursuant to the Fund Indemnity Agreement dated as of
September , 1997 (the "Fund Indemnity Agreement"), among the Trust, the
Contracting Stockholders, and Xxxxxxx Xxxxx of any claim for Indemnification
Expenses (as defined in the Fund Indemnity Agreement) or any threatened claim
for Indemnification Expenses;
(f) (i) cause the legal and other professional advisors engaged
pursuant to Section 2.2(d) to prepare and mail, file or publish, or, as
appropriate, direct the Paying Agent to prepare and mail, file or publish, any
notices, proxies, reports, statements and other communications required to be
mailed or published pursuant to the Trust Agreement and the Investment Company
Act,
(ii) keep (or cause to be kept) all the books and records of
the Trust (other than those to be kept by the Paying Agent), and
(iii) cause the legal and other professional advisors engaged
pursuant to Section 2.2(d) to prepare and, as necessary, file any and all
reports, returns and other documents as required under the Investment Company
Act, the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
the Internal Revenue Code of 1986, as amended, 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 and other documents 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 and other documents;
(g) at the request of the Trust and upon being furnished with such
reasonable security and indemnity against any related expense or liability as
the Administrator may require, institute and prosecute, in accordance with the
instructions of the Trust, legal or other appropriate proceedings to enforce any
and all rights and remedies of the Trust;
(h) review on behalf of the Trust all notices, reports, certificates
and other documents regarding the Contract and the U.S. Treasury Securities;
(i) make or cause 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
Trust;
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(j) in conjunction with the Trust, determine and publish (or cause to
be determined and published), in such manner as the Trust 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;
(k) on or prior to the tenth Business Day preceding the Exchange
Date, notify the Depositary and publish (or cause to be published) a notice in
The Wall Street Journal or another daily newspaper of national circulation
stating whether shares of Xxxxxx Common Stock or cash will be delivered in
exchange for the STRYPES on the Exchange Date;
(l) not less than nine calendar days (14 calendar days if the Tax
Event Cash Settlement Option is exercised) nor more than 30 calendar days prior
to the related Tax Event Acceleration Date, provide written notice of the
Contracting Stockholders' election to accelerate the Contract upon the
occurrence of a Tax Event to Holders of record of the STRYPES and, at or prior
to the mailing of such notice, publish (or cause to be published) a public
announcement to such effect in The Wall Street Journal or another daily
newspaper of national circulation; and
(m) within ten Business Days following the occurrence of an event
that requires an adjustment to the Exchange Rate Formula (or if the
Administrator is not aware of such occurrence, as soon as practicable after
becoming so aware), provide written notice to the Holders of the occurrence of
such event and a statement in reasonable detail setting forth the adjusted
Exchange Rate Formula and the method by which the adjustment to the Exchange
Rate Formula was determined.
2.3 CERTAIN RIGHTS OF THE ADMINISTRATOR. 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 Trust or of any Trustee or
(iii) in connection with the performance of its duties under Section 2.2(j)
hereof, for good faith reliance upon information furnished by third parties
selected by the Administrator with due care. 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 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).
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Without limiting the generality of the preceding sentence, the Administrator (i)
may select and employ independent accountants acceptable to the Trustees (other
than the independent public accountants referred to in clause (iii) of the first
sentence 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, semi-
annual and periodical reports, notices of meetings and proxy statements, annual
reports to holders of STRYPES and other documents required under the Investment
Company Act or the Exchange Act. 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.
2.4 POWER OF ATTORNEY. The Trust hereby appoints the Administrator,
acting through any duly appointed officer, its attorney-in-fact and agent for
the purpose of performing the duties prescribed in Sections 2.2(f)(iii) and
2.2(i).
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. For services to be rendered by the Administrator
pursuant to this Agreement, as custodian under the Custodian Agreement, dated as
of September , 1997, between the Administrator, as custodian, and the Trust,
and as collateral agent under the Security and Pledge Agreement, dated as of
September , 1997, among the Administrator, as collateral agent, the
Contracting Stockholders and the Trust, as paying agent, transfer agent and
registrar (the "Paying Agent") under the Paying Agent Agreement, dated as of
September , 1997, between the Paying Agent and the Trust, and for the payment
of Trust expenses pursuant to Section 2.2(a), (b) and (e) 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 Trust Estate for the payment of any such amounts.
3.2 ADDITIONAL SERVICES. If and to the extent that the Trust shall
request the Administrator to render services for the Trust, other than those to
be rendered by the
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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 Trust from time to time.
ARTICLE IV.
TERMINATION
4.1 TERMINATION.
(a) This Agreement shall terminate immediately upon written notice of
termination from the Trust to the Administrator if any of the following events
shall occur:
(i) If the Administrator shall violate any provision of this
Agreement, the Trust Agreement, or the Investment Company Act, and after notice
of such violation, shall not cure such violation 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 Trust.
(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 the Security and Pledge Agreement, (iv) upon termination of the
Custodian Agreement or (v) upon the resignation or removal of the Custodian.
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(c) The Trust 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
Trust 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 Trust 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 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 of all its activities pursuant to this Agreement. The Trust
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 the
Trust all information it receives and compiles with respect to the Contract and
the U.S. 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; SUCCESSORS AND ASSIGNS. 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. This Agreement shall be binding
on and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
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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. 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 6.3):
The Trust: Xxxxxx STRYPES Trust
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
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Except as otherwise specifically provided herein, all notices, reports and
other communications provided for hereunder shall be in writing and, 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, 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 or registered 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).
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6.4 APPLICABLE 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.
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, 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, and any reasonable expense (including
the reasonable 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) incurred in connection with any such loss,
damages, cost, liability or claim, provided that the Administrator shall not be
indemnified and held harmless from and against any such loss, damages, cost,
liability, claim or reasonable expense 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. Notwithstanding
the foregoing, it is understood that (i) the Trust shall not, in respect of the
legal expenses of the Administrator in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) and (ii) the
Trust shall not be liable for any settlement of any proceeding effected without
the written consent of the Trust, but if settled with such consent or if there
be a final judgment for the third party claimant, the Trust agrees to indemnify
the Administrator from and against any loss or liability by reason of such
settlement or judgment.
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 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 hereunto executed this Administration
Agreement as of the day and year first above written.
XXXXXX STRYPES TRUST
By:____________________________
Xxxxxx X. Xxxxxxx,
as Managing Trustee
THE BANK OF NEW YORK
By:_________________________
Name:
Title:
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SCHEDULE I
Item Amount
---- ------
NYSE Listing Fees $
Printing (other than STRYPES Certificates)
Legal Fees
Blue Sky Fees
Miscellaneous --------
Total
Sch-I-1
SCHEDULE II
Item Amount
---- ------
STRYPES Certificates $
Fees and Expenses of Special Delaware
Counsel to the Trust ------
Total
Sch-II-1
