1
Exhibit (k)(1)
CGSH Draft of 1/6/99
ADMINISTRATION AGREEMENT
This ADMINISTRATION AGREEMENT dated as of this ____ day of __, 1999 by
and between The Bank of New York, a New York banking corporation (the
"Administrator"), and DECS Trust IV (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 December 17, 1998, as amended and
restated as of ________ , 1999 (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 a forward purchase contract (the
"Contract") with Hyundai Electronics America and to issue DECS 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 may lawfully be delegated to the
2
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), and (ii) preparing and,
as necessary, mailing, filing or publishing, or, as appropriate, directing the
Paying Agent or causing 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.;
(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 Contract and the Treasury
Securities;
2
3
(g) 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
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. 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
or (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. 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.
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,
3
4
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 __________, 1999, between the Administrator, as custodian, and the
Trust, (iii) as paying agent under the Paying Agent Agreement, dated as of
__________, 1999, between the Administrator, as paying agent, and the Trust, and
(iv) as collateral agent under the Collateral Agreement, dated as of ________,
1999, among the Administrator, as collateral agent, Hyundai Electronics America
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 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
4
5
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 the Collateral Agreement, (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 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
6
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 Contract 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: DECS Trust IV
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, Xxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxxx
Telephone: 000-000-0000
Telecopier: 212-816-
6
7
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 law 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, 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.
7
8
IN WITNESS WHEREOF, the parties have hereunto executed this
Administration Agreement as of the day and year first above written.
DECS TRUST IV
-----------------------------------
Xxxxxx X. Xxxxxxx
as Managing Trustee
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
THE BANK OF NEW YORK
By:
-------------------------------
Name: Xxxxx Xxxxxxx
Title: Assistant Vice president
8
