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Draft of November 7, 1995
ADMINISTRATION AGREEMENT
This ADMINISTRATION AGREEMENT dated as of this ____ day of
November 1995 by and between The Bank of New York, a New York banking
corporation (the "Administrator"), and Xxxxxxx X. Xxxxxx, III, Xxxxx X. X'Xxxxx
and Xxxxxx X. Xxxxxxx (collectively, the "Trustees"), not in their individual
capacities but solely as Trustees of AJL PEPS Trust (the "Trust"), a trust
organized under the laws of the State of New York under and by virtue of an
Amended and Restated Trust Agreement, dated as of November __, 1995 (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 (the
"Investment Company Act"), formed to purchase and hold certain U.S. treasury
securities (the "Treasury Securities"), to enter into and hold a forward
contract with each of two existing shareholders (the "Selling Shareholders") of
Amway Japan Limited (individually, a "Contract," collectively, the "Contracts")
and to issue Premium Exchangeable Participating Shares ("PEPS") in accordance
with the terms and conditions of the Trust Agreement;
WHEREAS, the Trustees desire 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 Trustees 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 Trustees, 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:
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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 Trustees hereby engage the Administrator,
and the Administrator hereby agrees to be so engaged, to provide the services
hereinafter enumerated.
2.2 Services of Administrator. Subject to the supervision of
the Trustees, the Administrator shall effect the matters set forth further in
Sections 2.3, 2.4, 2.5 and 2.6 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 Contracts
or the Treasury Securities except as provided in Sections 2.5 and 2.6 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) instruct the Paying Agent to pay out of the Net Proceeds
of the sale of the PEPS the fees and expenses of the Trust incurred in
connection with the offering of the PEPS as specified in Schedule I
hereto;
(b) instruct the Paying Agent to pay out of the Net Proceeds
of the sale of the PEPS 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 to effect the transactions set
forth in Sections 2.3, 2.4, 2.5 and 2.6 of the Trust Agreement and to
otherwise perform the duties of the Paying Agent referred to in the
Trust Agreement;
(d) with the approval of the Trustees, engage legal and other
professional advisors, subject to clause (iii) above;
(e) receive all demands, bills and invoices for expenses
incurred by or on behalf of the Trust and pay the
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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 the Trustees and The Bank of New York (the "Fund Expense
Agreement") but in no event out of any assets of the Trust;
(f) (i) prepare and mail, file or publish, or, as appropriate,
direct the Paying Agent to prepare and mail, file or publish, any
notices, proxies, reports and other communications required to be
mailed or published pursuant to the Trust Agreement and the Investment
Company Act, (ii) keep all the books and records of the Trust (other
than those to be kept by the Paying Agent), and (iii) prepare (or cause
to be prepared) and, as necessary, file (or cause to be filed) any and
all reports, returns and other documents as required under 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.;
(g) 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, institute and prosecute,
in accordance with the instructions of the Trustees, legal or other
appropriate proceedings to enforce any and all rights and remedies of
the Trust;
(h) receive and review on behalf of the Trust all notices,
reports, certificates and other documents regarding the Contracts and
the Treasury Securities;
(i) make 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
(j) in conjunction with the Trustees, determine and publish,
in such manner as the Trustees shall direct in writing, the Trust's net
asset value in accordance with the Trust's policy as set forth in the
Prospectus.
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
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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 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
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.
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 November __, 1995, between the Administrator, as
custodian, and the Trustees, as paying agent under the Paying Agent Agreement,
dated as of November __, 1995, between the Administrator, as paying agent, and
the Trustees, and as collateral agent under the Collateral Agreements, dated as
of November __, 1995, among the Administrator, as collateral agent, the Selling
Shareholders and the Trustees, and for the payment of Trust expenses pursuant to
Section 2.2(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 assets of the Trust for the payment
of any such amounts.
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.
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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 any
provision of this Agreement, the Trust Agreement, or the Investment
Company Act, and after notice of such violation, shall not cure such
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 any Collateral Agreement or (iv) upon the resignation or removal
of the Custodian.
(c) This Agreement may be terminated by either party hereto
without penalty upon 60 days' prior written notice
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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 shall
survive the termination of this Agreement.
ARTICLE V
RECORDS AND REPORTS
5.1 Books and Records; Inspection and Copying. The
Administrator shall keep appropriate, and reasonably detailed and accurate,
books and records 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
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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: AJL PEPS Trust
c/o Xxxxxx X. Xxxxxxx
Managing Trustee
Xxxxxxx & Associates
0000 Xxxxx Xxxx Xxxx, Xxxxx 0
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: Xxxxxxxx X. Xxxxxxx
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.
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6.6 Indemnification. The Trustees 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, 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 counterpart
with all counterparts constituting 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.
TRUSTEES
________________________________
Xxxxxxx X. Xxxxxx, III,
as Trustee
________________________________
Xxxxx X. X'Xxxxx,
as Trustee
________________________________
Xxxxxx X. Xxxxxxx,
as Trustee
THE BANK OF NEW YORK
By ___________________________
Name:
Title:
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