Exhibit (k)(1)
FORM OF
ADMINISTRATION AGREEMENT
This ADMINISTRATION AGREEMENT dated as of this December [ ],
2001 by and between The Bank of New York, a New York banking corporation (the
"Administrator"), and Equity Securities Trust II (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 October 30,
2001, as amended and restated as of December [ ], 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
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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)
withholding 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 November 14, 2001, between the Administrator,
as custodian, and the Trust, (iii) as paying agent under the Paying Agent
Agreement, dated as of December [ ], 2001, between the Administrator, as paying
agent, and the Trust, and (iv) as collateral agent under the Collateral
Agreements, dated as of December [ ], 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 II
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 December [ ], 2001
between The Bank of New York and Equity Securities Trust II, 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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