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EXHIBIT 2(k)(2)
PAYING AGENT AGREEMENT
This PAYING AGENT AGREEMENT dated as of this [ ] day of March
1998 by and between The Bank of New York, a New York banking corporation (the
"Paying Agent"), and DECS Trust III (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 January 22, 1998, as amended and
restated as of March [ ], 1998 (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 the U.S. treasury
securities (the "Treasury Securities"), to enter into and hold forward purchase
contracts with one or more existing shareholders of Herbalife International,
Inc. (individually, a "Contract" and collectively, the "Contracts") and to
issue DECS to the public in accordance with the terms and conditions of the
Trust Agreement;
WHEREAS the Trustees desire to engage the services of the
Paying Agent to assume certain responsibilities and to perform certain duties
as the transfer agent, registrar and paying agent with respect to the DECS upon
the terms and conditions of this Agreement; and
WHEREAS the Paying Agent is qualified and willing to assume
such responsibilities and to perform such duties, 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:
ARTICLE I
DEFINITIONS
1.1 Definitions. Capitalized terms not otherwise defined
herein shall have the respective meanings specified in the Trust Agreement.
ARTICLE II
PAYING AGENT
2.1 Appointment of Paying Agent and Acceptance. The
Trust Agreement provides that The Bank of New York shall act as the initial
Paying Agent. The Bank of New York hereby accepts such appointment and agrees
to act in accordance with its standard procedures and the provisions of the
Trust Agreement and the provisions set forth in this Article II as Paying Agent
with respect to the DECS. Without limiting the generality of the foregoing,
The Bank of New York, as Paying Agent, agrees that it shall establish and
maintain the Trust Account, subject to the provisions of Section 2.3 hereof.
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2.2 Certificates and Notices. The Trustees shall deliver
to the Paying Agent the certificates and notices required to be delivered to
the Paying Agent pursuant to the Trust Agreement, and the Paying Agent shall
mail or publish such certificates or notices as required by the Trust
Agreement, but the Paying Agent shall have no responsibility to confirm or
verify the accuracy of certificates or notices of the Trustees so delivered.
2.3 Payments and Investments. The Paying Agent shall
make payments out of the Trust Account as provided in Section 3.3 of the Trust
Agreement. The Paying Agent on behalf of the Trust shall effect the
transactions set forth in Sections 2.6, 2.7, 2.8, 3.5 and 8.3 of the Trust
Agreement upon instructions to do so from the Administrator (except that with
respect to its obligations under Section 8.3 of the Trust Agreement, the Paying
Agent shall act without instructions from the Administrator) and shall invest
moneys on deposit in the Trust Account in the Temporary Investments in
accordance with Section 3.5 of the Trust Agreement. Except as otherwise
specifically provided herein or in the Trust Agreement, the Paying Agent shall
not have the power to sell, transfer or otherwise dispose of any Temporary
Investment prior to the maturity thereof, or to acquire additional Temporary
Investments. The Paying Agent shall hold any Temporary Investments to its
maturity and shall apply the proceeds thereof paid upon maturity to the payment
of the next succeeding Quarterly Distribution. All such Temporary Investments
shall be selected by the Trustees from time to time or pursuant to standing
instructions from the Trustees, and the Paying Agent shall have no liability to
the Trust or any Holder or any other Person with respect to any such Temporary
Investment.
2.4 Instructions from Administrator. The Paying Agent
shall execute all instructions received from an officer of the Administrator,
except to the extent that they conflict with or are contrary to the terms of
the Trust Agreement or this Agreement.
ARTICLE III
TRANSFER AGENT AND REGISTRAR
3.1 Original Issue of Certificates. On the date DECS
sold pursuant to the Underwriting Agreement are originally issued, certificates
for such DECS shall be issued by the Trust, and, at the request of the
Trustees, registered in such names and such denominations as the Underwriters
shall have previously requested of the Trustees, executed manually or in
facsimile by the Managing Trustee and countersigned by the Paying Agent. At no
time shall the aggregate number of DECS represented by such countersigned
certificates exceed the number of then outstanding DECS except as permitted by
Section 3.4 hereof.
3.2 Registry of Holders. The Paying Agent shall maintain
a registry of the Holders of the DECS.
3.3 Registration of Transfer of DECS. DECS shall be
registered for transfer or exchange, and new certificates shall be issued, in
the name of the designated transferee or transferees, upon surrender of the old
certificates in form deemed by the Paying Agent properly endorsed for transfer
with (a) all necessary endorsers' signatures guaranteed in such manner and form
as the Paying Agent may require by a guarantor reasonably believed by the
Paying Agent to be responsible, (b) such assurances as the Paying Agent shall
deem necessary or appropriate to
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evidence the genuineness and effectiveness of each necessary endorsement and
(c) satisfactory evidence of compliance with all applicable laws relating to
the collection of taxes or funds necessary for the payment of such taxes.
3.4 Lost Certificates. If there shall be delivered to
the Paying Agent (a) evidence to its satisfaction of the destruction, loss or
theft of any certificate for DECS and (b) such security or indemnity as may be
required by it to hold it and any of its agents harmless, then, in the absence
of notice to the Paying Agent that such certificate has been acquired by a bona
fide purchaser, the Managing Trustee shall execute and upon its request the
Paying Agent shall countersign and deliver, in lieu of any such destroyed, lost
or stolen certificate, a new certificate of like tenor bearing a number not
contemporaneously outstanding. Any request by the Managing Trustee to the
Paying Agent to issue a replacement or new certificate pursuant to this Section
3.4 shall be deemed to be a representation and warranty by the Trust to the
Paying Agent that such issuance will comply with provisions of law, the Trust
Agreement and the resolutions adopted by the Trustees with respect to lost
securities. If, after the delivery of such new certificate, a bona fide
purchaser of the original certificate in lieu of which such new certificate was
issued presents for payment such original certificate, the Trust and the Paying
Agent shall be entitled to recover such new certificate from the person to whom
it was delivered or any transferee thereof, except a bona fide purchaser, and
shall be entitled to recover upon the security or indemnity provided therefor
to the extent of any loss, damage, cost or expense incurred by the Trust or the
Paying Agent in connection therewith. Upon the issuance of any new certificate
under this Section 3.4, the Trust and the Paying Agent may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Paying Agent) connected therewith.
3.5 Transfer Books. The Paying Agent shall maintain the
transfer books listing the Holders of the DECS. In case of any written request
or demand for the inspection of the transfer books of the Trust or any other
books in the possession of the Paying Agent, the Paying Agent will notify the
Trustees and secure instructions as to permitting or refusing such inspection.
The Paying Agent reserves the right, however, to exhibit the transfer books or
other books to any person in case it is advised by its counsel that its failure
to do so would be unlawful.
3.6 Disposition of Canceled Certificates, Records. The
Paying Agent shall retain certificates which have been canceled in transfer or
in exchange and accompanying documentation in accordance with applicable rules
and regulations of the Commission for six calendar years from the date of such
cancellation, and shall make such records available during this period at any
time, or from time to time, for reasonable periodic, special, or other
examinations by representatives of the Commission and the Board of Governors of
the Federal Reserve System. Thereafter such records shall not be destroyed by
the Paying Agent but will be safely stored for possible future reference. In
case of any request or demand for the inspection of the register of the Trust
or any other books in the possession of the Paying Agent, the Paying Agent will
notify the Trustees and secure instructions as to permitting or refusing such
inspection. The Paying Agent reserves the right, however, to exhibit the
register or other records to any person in case it is advised by its counsel
that its failure to do so would (i) be unlawful, or
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(ii) expose it to liability, unless the Trustees shall have offered
indemnification satisfactory to the Paying Agent.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE TRUST
The Trust represents and warrants to the Paying Agent that:
(a) the Trust is a validly existing trust under the laws
of the State of Delaware and the Trustees have full
power under the Trust Agreement to execute and
deliver this Agreement and to authorize, create and
issue the DECS;
(b) this Agreement has been duly and validly authorized,
executed and delivered by the Trust and constitutes
the valid and binding agreement of the Trust,
enforceable against the Trust in accordance with its
terms, subject as to such enforceability to
bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting
creditors' rights and to general equitable
principles;
(c) the form of the certificate evidencing the DECS
complies with all applicable laws of the State of
Delaware and the State of New York;
(d) the DECS have been duly and validly authorized,
executed and delivered by the Trust and are validly
issued;
(e) the DECS have been registered under the Securities
Act of 1933, the Trust has been registered under the
Investment Company Act, and no further action by or
before any governmental body or authority of the
United States or of any state thereof is required in
connection with the execution and delivery of this
Agreement or the issuance of the DECS;
(f) the execution and delivery of this Agreement and the
issuance and delivery of the DECS do not and will not
conflict with, violate, or result in a breach of, the
terms, conditions or provisions of, or constitute a
default under, the Trust Agreement, any law or
regulation, any order or decree of any court or
public authority having jurisdiction over the Trust,
or any mortgage, indenture, contract, agreement or
undertaking to which the Trust is a party or by which
it is bound; and
(g) no taxes are payable upon or in respect of the
execution of this Agreement or the issuance of the
DECS.
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ARTICLE V
DUTIES AND RIGHTS
5.1 Duties.
(a) The Paying Agent is acting solely as agent for the
Trust hereunder and owes no fiduciary duties to any
other Person by reason of this Agreement.
(b) In the absence of bad faith, gross negligence or
willful misfeasance on its part in the performance of
its duties hereunder or its reckless disregard of its
duties and obligations hereunder, the Paying Agent
shall not be liable for any action taken, suffered,
or omitted in the performance of its duties under
this Agreement or in accordance with any direction or
request of the Managing Trustee not inconsistent with
the provisions of this Agreement. The Paying Agent
shall under no circumstances be liable for any
punitive, exemplary, indirect or consequential
damages hereunder.
5.2. Rights.
(a) The Paying Agent may rely and shall be protected in
acting or refraining from acting upon any
communication authorized hereby and upon any written
instruction, notice, request, direction, consent,
report, certificate, share certificate or other
instrument, paper or document reasonably believed by
it to be genuine. The Paying Agent shall not be
liable for acting upon any telephone communication
authorized hereby which the Paying Agent believes in
good faith to have been given by the Trustees.
(b) The Paying Agent may consult with legal counsel and
the 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.
(c) The Paying Agent may perform its duties and exercise
its rights hereunder either directly or by or through
agents or attorneys appointed with due care by it
hereunder.
5.3 Disclaimer. The Paying Agent makes no
representations as to (a) the first two recitals of this Agreement or (b) the
validity or adequacy of the DECS.
5.4 Compensation, Expenses and Indemnification.
(a) The Paying Agent shall receive for all services
rendered by it under this Agreement and, upon the
prior written approval of the Trustees, for all
expenses, disbursements and advances incurred or made
by the Paying Agent in accordance with any provision
of this Agreement (including the reasonable
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compensation and the expenses and disbursements of
its agents and counsel), the compensation set forth
in Section 3.1 of the Administration Agreement.
(b) The Trust shall indemnify the Paying Agent for and
hold it harmless against any loss, liability, claim
or expense (including the costs of investigation,
preparation for and defense of legal and/or
administrative proceedings relating to a claim
against it and reasonable attorneys' fees and
disbursements) arising out of or in connection with
the performance of its obligations under this
Agreement, provided such loss, liability or expense
is not the result of gross negligence, willful
misfeasance or bad faith on its part in the
performance of its duties hereunder or its reckless
disregard of its duties or obligations hereunder,
including the costs and expenses of defending itself
against any claim or liability in connection with its
exercise or performance of any of its duties or
obligations hereunder and thereunder. The
indemnification provided by this Section 5.4(b) shall
survive the termination of this Agreement.
ARTICLE VI
MISCELLANEOUS
6.1 Term of Agreement.
(a) The term of this Agreement is unlimited unless
terminated as provided in this Section 6.1 or unless
the Trust is terminated, in which case this Agreement
shall terminate ten days after the date of
termination of the Trust. This Agreement may be
terminated by either party hereto 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
6.1(a) unless a successor Paying Agent shall have
been appointed and shall have accepted the duties of
the Paying Agent. The termination of the
Administration Agreement or the resignation or
removal of the Custodian shall cause the termination
of this Agreement simultaneously therewith. If,
within 30 days after notice by the Paying Agent of
termination of this Agreement, no successor Paying
Agent shall have been selected and accepted the
duties of the Paying Agent, the Paying Agent may
apply to a court of competent jurisdiction for the
appointment of a successor Paying Agent.
(b) Except as otherwise provided in this paragraph (b),
the respective rights and duties of the Trust and the
Paying Agent under this Agreement shall cease upon
termination of this Agreement. The Trust's
representations, warranties, covenants and
obligations to the Paying Agent under Sections 4 and
5.4 hereof shall survive the termination hereof.
Upon termination of the Agreement, the Paying Agent
shall, at the Trust's request, promptly deliver to
the Trust or to any successor Paying Agent as
requested by the Trust (i) copies of all books and
records maintained by it and (ii) any funds deposited
with the Paying Agent by the Trust.
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6.2 Communications. Except for communications authorized
to be made by telephone pursuant to this Agreement, all notices, requests and
other communications to any party hereunder shall be in writing (including
telecopy or similar writing) and given to such person at its address or
telecopy number set forth below:
If to the Trust, DECS Trust III
addressed: c/o Puglisi & Associates
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Telephone: 000-000-0000
Telecopier: 000-000-0000
with a copy to the Administrator if the duties of the Administrator are being
performed by a Person other than the Person performing the obligations of the
Paying Agent.
If to the Paying Agent, The Bank of New York
addressed: 000 Xxxxxxx Xxxxxx, Xxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxx
Telephone: 000-000-0000
Telecopier: 000-000-0000
or such other address or telecopy number as such party may hereafter specify
for such purposes by notice to the other party. Each such notice, request or
communication shall be effective when delivered at the address specified
herein. Communications shall be given on behalf of the Trust by the Trustees
(or by the Administrator, provided that the Trust shall not have delivered to
the Paying Agent an instrument in writing revoking the authorization of the
Administrator to act for it pursuant hereto) and on behalf of the Paying Agent
by a Senior Vice President or Vice President of the Paying Agent assigned to
its Corporate Trust Department.
6.3 Entire Agreement. This Agreement contains the entire
agreement between the parties relating to the subject matter hereof, and there
are no other representations, endorsements, promises, agreements or
understandings, oral, written or inferred, between the parties relating to the
subject matter hereof.
6.4 No Third Party Beneficiaries. Nothing herein,
express or implied, shall give to any Person, other than the Trustees, the
Paying Agent and their respective successors and assigns, any benefit of any
legal or equitable right, remedy or claim hereunder.
6.5 Amendment; Waiver.
(a) This Agreement shall not be deemed or construed to be
modified, amended, rescinded, canceled or waived, in
whole or in part, except by a written instrument
signed by a duly authorized representative of the
party to be charged. The Trust shall notify the
Paying Agent of any change in the Trust Agreement
prior to the effective date of any such change.
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(b) Failure of either party hereto to exercise any right
or remedy hereunder in the event of a breach hereof
by the other party shall not constitute a waiver of
any such right or remedy with respect to any
subsequent breach.
6.6 Successors and Assigns. Any corporation into which
the Paying Agent 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 Paying Agent shall be a party, shall be the
successor Paying Agent 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 Trust has given its prior
written consent to the Paying Agent with respect to any such merger,
conversion or consolidation. This Agreement shall be binding upon, inure to
the benefit of, and be enforceable by, the respective successors of each of the
Trust and the Paying Agent. This Agreement shall not be assignable by either
the Trust or the Paying Agent without the prior written consent of the other
party.
6.7 Severability. If any clause, provision or section
hereof shall be ruled invalid or unenforceable by any court of competent
jurisdiction, the invalidity or unenforceability of such clause, provision or
section shall not affect any of the remaining clauses, provisions or sections
hereof.
6.8 Execution in 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.
6.9 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York, without
giving effect to principles of conflicts of law.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the date first above written.
DECS TRUST III
___________________________________
Xxxxxx X. Xxxxxxx
as Managing Trustee
THE BANK OF NEW YORK
By:________________________________
Name: Xxxx X. Xxxxx
Title: Assistant Vice President