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Exhibit (k)(1)
ADMINISTRATION AGREEMENT
This ADMINISTRATION AGREEMENT dated as of this ____ day of May, 1998, by
and between The Bank of New York, a New York banking corporation (the
"Administrator"), and Dollar General STRYPES Trust (such trust and the trustees
thereof acting in their capacity as such being referred to herein as the
"Trust"), a business trust created 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 May 1, 1998 (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 the Xxxxxx Children Trust (the
"Contracting Stockholder"), a stockholder of Dollar General Corporation, 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:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. Capitalized terms not otherwise defined herein shall have
the respective meanings specified in the Trust Agreement.
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(SM) Service xxxx of Xxxxxxx Xxxxx & Co., Inc.
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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 2.06, 2.07 and 2.08 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 2.08 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
__________ __, 1998, among the Underwriters, the Contracting Stockholder,
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 2.06, 2.07 and 2.08 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, 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 Stockholder pursuant to the Fund
Indemnity Agreement dated as of __________ __, 1998 (the "Fund Indemnity
Agreement"), among the Trust, the Contracting Stockholder and Xxxxxxx
Xxxxx of any claim for Indemnification Expenses (as defined in the Fund
Indemnity Agreement) or any threatened claim for Indemnification Expenses;
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(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;
(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 8.02(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 Dollar General 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
Contracting Stockholder elects to pay all or any portion of the Optional
Acceleration Amount in cash) nor more than 30 calendar days prior to the
related Optional Acceleration Date, provide written notice to Holders of
record of the STRYPES stating the following and containing such other
information as the Administrator deems advisable: (a) the Optional
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Acceleration Date, (b) the Optional Acceleration Percentage, (c) the
Optional Acceleration Value, (d) the Optional Acceleration Amount, (e)
whether the Contracting Stockholder will pay the Optional Acceleration
Amount by delivery of shares of Dollar General Common Stock, cash or a
combination thereof and, if payable in whole or in part in Dollar General
Common Stock, will also state the number of shares of Dollar General
Common Stock to be delivered to the Trust and the Current Market Price
used to calculate such number of shares, and (f) the amount of cash and/or
Dollar General Common Stock and U.S. Treasury Securities to be distributed
in respect of each 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). 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 2.05(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
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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. (a) For services to be rendered by the Administrator
pursuant to this Agreement, as custodian under the Custodian Agreement, dated as
of __________ __, 1998, between the Administrator, as custodian, and the Trust,
and as collateral agent under the Security and Pledge Agreement, dated as of
__________ __, 1998, among the Administrator, as collateral agent, the
Contracting Stockholder and the Trust, as paying agent, transfer agent and
registrar (the "Paying Agent") under the Paying Agent Agreement, dated as of
__________ __, 1998, 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.
(b) In connection with the performance of the services referred to
in Section 3(a), 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(a).
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 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:
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(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.
(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.
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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.
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: Dollar General 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
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New York, New York 10286
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).
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
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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.
DOLLAR GENERAL 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
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NYSE Listing Fees $
Printing (other than STRYPES Certificates)
Legal Fees
Blue Sky Fees
Initial Legal Review
Miscellaneous
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Total $
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SCHEDULE II
Item Amount
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STRYPES Certificates $
Fees and Expenses of Special Delaware
Counsel to the Trust
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Total $
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