<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 16, 1997
SECURITIES ACT FILE NO. 333-33707
INVESTMENT COMPANY ACT FILE NO. 811-08337
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM N-2
[X] REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[X] PRE-EFFECTIVE AMENDMENT NO. 2
[_] POST-EFFECTIVE AMENDMENT NO.
AND/OR
[X] REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
[X] AMENDMENT NO. 2
(CHECK APPROPRIATE BOX OR BOXES)
---------------
SNYDER STRYPES TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
---------------
C/O PUGLISI & ASSOCIATES
850 LIBRARY AVENUE
SUITE 204
NEWARK, DELAWARE 19715
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (302) 738-6680
RL&F SERVICE CORP.
ONE RODNEY SQUARE
10TH FLOOR
10TH AND KING STREETS
WILMINGTON, DELAWARE 19801
(NAME AND ADDRESS OF AGENT FOR SERVICE)
---------------
COPIES TO:
NORMAN D. SLONAKER, THOMAS H. MCCORMICK, ESQ. MICHAEL W. BLAIR,
ESQ. SHAW, PITTMAN, POTTS & ESQ.
BROWN & WOOD LLP THROWBRIDGE DEBEVOISE & PLIMPTON
ONE WORLD TRADE CENTER 2300 N STREET, N.W. 875 THIRD AVENUE
NEW YORK, NEW YORK WASHINGTON, D.C. 20037 NEW YORK, NEW YORK
10048-0557 10022
---------------
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as practicable after
the effective date of this Registration Statement.
If any securities being registered on this form will be offered on a delayed
or continuous basis in reliance on Rule 415 under the Securities Act of 1933,
as amended, other than securities offered in connection with a dividend
reinvestment plan, check the following box. [_]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
1. FINANCIAL STATEMENTS
Independent Auditors' Report
Statement of Assets, Liabilities and Capital as of September 12, 1997
2. EXHIBITS
<TABLE>
<C> <S>
(a)(1) Trust Agreement*
(2) Form of Amended and Restated Trust Agreement
(3) Certificate of Trust*
(b) Not applicable
(c) Not applicable
(d)(1) Form of Specimen certificate for STRYPES (included in Exhibit 2(a)(2))
(2) Portions of the Amended and Restated Trust Agreement of the Registrant
defining the rights of Holders of STRYPES (a)
(e) Not applicable
(f) Not applicable
(g) Not applicable
(h)(1) Form of Purchase Agreement
(2) Form of Registration Agreement
(i) Not applicable
(j) Form of Custodian Agreement
(k)(1) Form of Administration Agreement
(2) Form of Paying Agent Agreement
(3) Form of Forward Purchase Contract
(4) Form of Security and Pledge Agreement
(5) Form of Fund Expense Agreement
(6) Form of Fund Indemnity Agreement
(l) Opinion and Consent of Brown & Wood llp, counsel to the Trust**
(m) Not applicable
(n)(1) Tax Opinion and Consent of Brown & Wood llp, counsel to the Trust**
(2) Consent of Deloitte & Touche llp, independent auditors for the Trust
(o) Not applicable
(p) Form of Subscription Agreement
(q) Not applicable
(r) Financial Data Schedule
</TABLE>
- --------
(a) Reference is made to Article III (Section 3.2), Article IV, Article V and
Article VIII (Sections 8.1 and 8.6) of the Trust's Amended and Restated
Trust Agreement filed as Exhibit (a)(2) to this Registration Statement.
* Previously filed.
C-1
<PAGE>
ITEM 25. MARKETING ARRANGEMENTS
See Exhibits (h)(1) and (h)(2) to this Registration Statement.
ITEM 26. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses to be incurred in connection with the offering described in
this Registration Statement will be paid by the Contracting Stockholders.
ITEM 27. PERSON CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
The Trust will be internally managed and will not have an investment
adviser. The information in the Prospectus under the caption "Management
Arrangements" is incorporated herein by reference.
ITEM 28. NUMBER OF HOLDERS OF SECURITIES
There will be one record holder of the STRYPES as of the effective date of
this Registration Statement.
ITEM 29. INDEMNIFICATION
Section 7.6 of the Amended and Restated Trust Agreement, Section 6 of the
Purchase Agreement and Section 4 of the Registration Agreement provide for
indemnification.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "1933 Act"), may be permitted to trustees, officers
and controlling persons of the Registrant, pursuant to the foregoing
provisions or otherwise, the Registrant has been advised that in the opinion
of the Securities and Exchange Commission (the "Commission") such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a trustee, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by
such trustee, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1933 Act and will be governed by the
final adjudication of such issue.
ITEM 30. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
The Trust is internally managed and does not have an investment adviser.
ITEM 31. LOCATION OF ACCOUNTS AND RECORDS
All accounts, books and other documents required to be maintained by Section
31(a) of the Investment Company Act of 1940, as amended, and the rules
promulgated thereunder are maintained at the offices of the Registrant (850
Library Avenue, Suite 204, Newark, Delaware 19715), its custodian (101 Barclay
Street, New York, New York 10286) and its paying agent (101 Barclay Street,
New York, New York 10286).
ITEM 32. MANAGEMENT SERVICES
Not applicable.
ITEM 33. UNDERTAKINGS
(a) The Registrant hereby undertakes to suspend the offering of the shares
covered hereby until it amends its prospectuses contained herein if (1)
subsequent to the effective date of this Registration Statement, its net asset
value per share declines more than 10 percent from its net asset value per
share as of the effective date of
C-2
<PAGE>
the Registration Statement or (2) the net asset value per share increases to
an amount greater than its net proceeds as stated in the prospectuses
contained herein.
(b) The Registrant hereby undertakes that (i) for purpose of determining any
liability under the 1933 Act, the information omitted from the form of
prospectuses filed as part of this Registration Statement in reliance upon
Rule 430A and contained in a form of prospectus filed by the registrant under
Rule 497(h) under the 1933 Act shall be deemed to be part of this registration
statement as of the time it was declared effective; (ii) for the purpose of
determining any liability under the 1933 Act, each post-effective amendment
that contains a form of prospectus shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the offering of the
securities at that time shall be deemed to be the initial bona fide offering
thereof.
C-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Pre-
Effective Amendment to its Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Newark, State of
Delaware, on the 16th day of September, 1997.
Snyder STRYPES Trust
By: /s/ Donald J. Puglisi
----------------------------------
Donald J. Puglisi
Managing Trustee
Pursuant to the requirements of the Securities Act of 1933, this Pre-
Effective Amendment to the Registrant's Registration Statement has been signed
below by the following persons, in the capacities and on the date indicated.
NAME TITLE DATE
---- ----- ----
/s/ Donald J. Puglisi Managing Trustee September 16, 1997
- -------------------------------------
DONALD J. PUGLISI
William R. Latham III* Trustee
- -------------------------------------
WILLIAM R. LATHAM III
James B. O'Neill* Trustee
- -------------------------------------
JAMES B. O'NEILL
*By: /s/ Donald J. Puglisi September 16, 1997
- -------------------------------------
(DONALD J. PUGLISI, ATTORNEY-IN-FACT)
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION PAGE
------- ----------- ----
<C> <S> <C>
(a)(1) Trust Agreement*
(2) Form of Amended and Restated Trust Agreement
(3) Certificate of Trust*
(b) Not applicable
(c) Not applicable
(d)(1) Form of Specimen certificate for STRYPES (included in Exhibit
2(a)(2))
(2) Portions of the Declaration of Trust of the Registrant defining
the rights of Holders of STRYPES (a)
(e) Not applicable
(f) Not applicable
(g) Not applicable
(h)(1) Form of Purchase Agreement
(2) Form of Registration Agreement
(i) Not applicable
(j) Form of Custodian Agreement
(k)(1) Form of Administration Agreement
(2) Form of Paying Agent Agreement
(3) Form of Forward Purchase Contract
(4) Form of Security and Pledge Agreement
(5) Form of Fund Expense Agreement
(6) Form of Fund Indemnity Agreement
(l) Opinion and Consent of Brown & Wood llp, counsel to the Trust
(m) Not applicable
(n)(1) Tax Opinion and Consent of Brown & Wood llp, counsel to the
Trust
(2) Consent of Deloitte & Touche llp, independent auditors for the
Trust
(o) Not applicable
(p) Form of Subscription Agreement
(q) Not applicable
(r) Financial Data Schedule
</TABLE>
- --------
(a) Reference is made to Article III (Section 3.2), Article IV, Article V and
Article VIII (Sections 8.1 and 8.6) of the Trust's Amended and Restated
Trust Agreement filed as Exhibit (a)(2) to this Registration Statement.
* Previously filed.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0001043385
<NAME> SNYDER STRYPES TRUST
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> SEP-12-1997
<PERIOD-END> SEP-12-1997
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 0
<ASSETS-OTHER> 100
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 100
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 100
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 100
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
EXHIBIT (a)(2)
================================================================================
AMENDED AND RESTATED
TRUST AGREEMENT
CONSTITUTING
SNYDER STRYPES TRUST
Dated as of September 15, 1997
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
ARTICLE I
DEFINITIONS
<S> <C> <C>
SECTION 1.1 DEFINITIONS.............................................. 2
ARTICLE II
TRUST DECLARATION; PURPOSES, POWERS
AND DUTIES OF THE TRUSTEES; ADMINISTRATION
SECTION 2.1 NAME.................................................... 7
SECTION 2.2 OFFICE.................................................. 7
SECTION 2.3 RATIFICATION AND APPROVAL OF ACTION OF THE
TRUSTEES................................................ 7
SECTION 2.4 DECLARATION OF TRUST; PURPOSES OF THE TRUST............. 7
SECTION 2.5 GENERAL POWERS AND DUTIES OF THE TRUSTEES............... 7
SECTION 2.6 PORTFOLIO ACQUISITION................................... 9
SECTION 2.7 PORTFOLIO ADMINISTRATION................................ 9
SECTION 2.8 MANNER OF SALES......................................... 12
SECTION 2.9 LIMITATIONS ON TRUSTEES' POWERS......................... 12
ARTICLE III
ACCOUNTS AND PAYMENTS
SECTION 3.1 THE TRUST ACCOUNT....................................... 13
SECTION 3.2 DISTRIBUTIONS TO HOLDERS................................ 13
SECTION 3.3 SEGREGATION............................................. 13
SECTION 3.4 INVESTMENTS............................................. 14
ARTICLE IV
REDEMPTION
SECTION 4.1 REDEMPTION.............................................. 14
ARTICLE V
ISSUANCE OF CERTIFICATES;
REGISTRY; TRANSFER OF STRYPES
SECTION 5.1 FORM OF CERTIFICATE..................................... 14
</TABLE>
i
<PAGE>
<TABLE>
<S> <C> <C>
SECTION 5.2 TRANSFER OF STRYPES; ISSUANCE, TRANSFER AND
INTERCHANGE OF CERTIFICATES.............................. 15
SECTION 5.3 REPLACEMENT OF CERTIFICATES.............................. 15
SECTION 5.4 LIMITATION ON LIABILITY.................................. 16
SECTION 5.5 GENERAL PROVISIONS REGARDING THE STRYPES................. 16
ARTICLE VI
EXECUTION OF THE CONTRACT
SECTION 6.1 EXECUTION OF THE CONTRACT................................ 16
ARTICLE VII
TRUSTEES
SECTION 7.1 TRUSTEES................................................ 16
SECTION 7.2 VACANCIES............................................... 17
SECTION 7.3 POWERS.................................................. 17
SECTION 7.4 MEETINGS................................................ 17
SECTION 7.5 RESIGNATION AND REMOVAL................................. 18
SECTION 7.6 LIABILITY............................................... 18
SECTION 7.7 COMPENSATION............................................ 18
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 MEETINGS OF HOLDERS.................................... 19
SECTION 8.2 BOOKS AND RECORDS; REPORTS............................. 19
SECTION 8.3 DISSOLUTION............................................ 20
SECTION 8.4 AMENDMENT AND WAIVER................................... 21
SECTION 8.5 ACCOUNTANTS............................................ 22
SECTION 8.6 NATURE OF HOLDER'S INTEREST............................ 22
SECTION 8.7 DELAWARE LAW TO GOVERN................................. 23
SECTION 8.8 NOTICES................................................ 23
SECTION 8.9 SEVERABILITY........................................... 23
SECTION 8.10 COUNTERPARTS........................................... 23
SECTION 8.11 SUCCESSORS AND ASSIGNS................................. 23
</TABLE>
ii
<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT
This Amended and Restated Trust Agreement, dated as of September , 1997
(the "Trust Agreement"), by and among ML IBK Positions, Inc., as sponsor (the
"Sponsor"), Donald J. Puglisi, William R. Latham III and James B. O'Neill, as
trustees (the "Trustees"), and the Holders (as defined herein), constituting
Snyder STRYPES Trust (the "Trust").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Theresa M. Cetina, as depositor (the "Depositor") and Donald J.
Puglisi, William R. Latham III and James B. O'Neill, as trustees (the
"Trustees"), have previously entered into a Trust Agreement dated as of August
5, 1997 (the "Original Agreement"), creating Snyder STRYPES Trust;
WHEREAS, the Depositor has transferred her interest in Snyder STRYPES Trust
to the Sponsor;
WHEREAS, the Trustees hereby ratify and approve the transfer of the
interest of the Depositor in Snyder STRYPES Trust to the Sponsor;
WHEREAS, the parties hereto desire to amend and restate the Original
Agreement in certain respects; and
WHEREAS, the Trust has previously issued one STRYPES to the Sponsor in
consideration of the aggregate purchase price therefor of $100;
NOW, THEREFORE, the parties hereto agree to amend and restate the Original
Agreement as provided herein. Upon the execution and delivery of counterpart
signature pages hereto by the parties hereto, the Original Agreement will be
automatically amended and restated in its entirety to read as provided herein.
<PAGE>
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. Whenever used in this Trust Agreement, the
-----------
following words and phrases shall have the meanings listed below. Any reference
to any agreement shall be a reference to such agreement as supplemented or
amended from time to time.
"ACCELERATION AMOUNT NOTICE" - An Acceleration Amount Notice as defined in
the Contract.
"ACCELERATION VALUE" - The Acceleration Value as defined in the Contract.
"ADMINISTRATION AGREEMENT" - The Administration Agreement between the
Administrator and the Trust, substantially in the form of Exhibit E hereto, and
any substitute agreement therefor entered into pursuant to Section 2.5(a)
hereof.
"ADMINISTRATOR" - The Bank of New York, or its successor as permitted under
Section 6.1 of the Administration Agreement or appointed pursuant to Section
2.5(a) hereof.
"AGGREGATE ACCELERATION VALUE" - The Aggregate Acceleration Value as
defined in the Contract.
"BUSINESS DAY" - Any day that is not a Saturday, a Sunday or a day on which
the New York Stock Exchange, The NASDAQ National Market, or banking institutions
or trust companies in The City of New York are authorized or obligated by law or
executive order to close.
"CASH SETTLEMENT OPTION" - The option of each Contracting Stockholder
described in Section 2.5 of the Contract to settle its obligation to deliver
shares of Snyder Common Stock contained in Section 2.1 of the Contract, in whole
or in part, through a cash payment on the Settlement Date.
"CERTIFICATE" - Any certificate evidencing the ownership of STRYPES
substantially in the form of Exhibit A hereto.
"CLOSING DATE" - The Closing Date as defined in the Contract.
"CODE" - The Internal Revenue Code of 1986, as amended from time to time;
each reference herein to any section of the Code or any regulation thereunder
shall constitute a reference to any successor provision thereto.
"COLLATERAL AGENT" - The Bank of New York or its successor as permitted
under the Security and Pledge Agreement.
2
<PAGE>
"COMMENCEMENT DATE" - The day on which the Purchase Agreement is executed.
"COMMISSION" - The United States Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or if at any time
after the execution of this Trust Agreement such Commission is not existing or
performing the duties now assigned to it, then the body performing such duties
on such date.
"COMPANY" - Snyder Communications, Inc., a Delaware corporation.
"COMPANY SUCCESSOR" - Any surviving entity or subsequent surviving entity
of the Company.
"CONTRACT" - The Forward Purchase Contract among the Trust, the Collateral
Agent, as agent and custodian for and on behalf of the Trust, and the
Contracting Stockholders, substantially in the form of Exhibit C hereto.
"CONTRACT CONSIDERATION" - The Contract Consideration as defined in the
Contract.
"CONTRACTING STOCKHOLDER" - Each person named as a "Seller" in the
Contract.
"CUSTODIAN" - The Bank of New York or its successor as permitted under
paragraph 11 of the Custodian Agreement or appointed pursuant to Section 2.5(a)
hereof.
"CUSTODIAN AGREEMENT" - The Custodian Agreement, dated as of September 10,
1997, between the Custodian and the Trust, and any substitute agreement therefor
entered into pursuant to Section 2.5(a) hereof.
"DATE OF DELIVERY" - A Date of Delivery as defined in the Contract.
"DEPOSITARY" - The Depository Trust Company, or any successor thereto.
"DISTRIBUTION DATE" - Each , , and
of each year, commencing , 1997, to and including , 2000 (or if any
such date is not a Business Day, then the first Business Day thereafter).
"EARLY SETTLEMENT DATE" - The Early Settlement Date as defined in the
Contract.
"EVENT OF DEFAULT" - An Event of Default as defined in the Security and
Pledge Agreement.
"EXCHANGE" - The delivery by the Trustees to the Holders of shares of
Snyder Common Stock (or, if one or more Contracting Stockholders elects to
exercise the Cash
3
<PAGE>
Settlement Option under the Contract, the amount of cash or combination of cash
and Snyder Common Stock with an equal value, as specified in the Contract as
payable in respect thereof) in mandatory exchange for the STRYPES on the
Exchange Date.
"EXCHANGE ACT" - The Securities Exchange Act of 1934, as amended from time
to time; each reference herein to any section of such Act or any rule or
regulation thereunder shall constitute a reference to any successor provision
thereto.
"EXCHANGE DATE" - _______ __, 2000.
"FIRM CONSIDERATION AMOUNT" - The Firm Consideration Amount as defined in
the Contract.
"FIRM PAYMENT DATE" - The Firm Payment Date as defined in the Contract.
"HOLDER" - The registered owner of any STRYPES as recorded on the books of
the Paying Agent.
"INDEMNITY AGREEMENT" - The Fund Indemnity Agreement among the Trust,
Merrill Lynch and the Contracting Stockholders, substantially in the form of
Exhibit D hereto.
"INDEPENDENT DEALERS" - Independent Dealers as defined in the Contract.
"INVESTMENT COMPANY ACT" - The Investment Company Act of 1940, as amended
from time to time; each reference herein to any section of such Act or any rule
or regulation thereunder shall constitute a reference to any successor provision
thereto.
"LIQUIDATION VALUE" - The aggregate proceeds received by the Trust from the
sale of the U.S. Treasury Securities pursuant to Section 2.8(a) hereof.
"MANAGING TRUSTEE" - The Trustee designated the Managing Trustee by
resolution of the Trustees.
"MARKETABLE SECURITIES" - Any securities listed on a U.S. national
securities exchange or reported by The NASDAQ National Market.
"MERRILL LYNCH" - Merrill Lynch & Co., Inc.
"OPTION CONSIDERATION AMOUNT" - The Option Consideration Amount as defined
in the Contract.
"ORIGINAL AGREEMENT" - The meaning specified in the recitals hereof.
"PARTICIPANT" - A Person having an account with the Depositary.
4
<PAGE>
"PAYING AGENT" - The Bank of New York or its successor as permitted under
Section 6.6 of the Paying Agent Agreement or appointed pursuant to Section
2.5(a) hereof.
"PAYING AGENT AGREEMENT" - The Paying Agent Agreement between the Paying
Agent and the Trust, substantially in the form of Exhibit F hereto, and any
substitute agreement therefor entered into pursuant to Section 2.5(a) hereof.
"PERSON" - An individual, partnership, corporation (including a business
trust), limited liability company, joint stock company, trust, unincorporated
association, joint venture or other entity, or a government or any political
subdivision or agency or instrumentality thereof.
"PROSPECTUS" - The prospectus of the Trust relating to the offering of the
STRYPES and constituting a part of the Registration Statement, as first filed
with the Commission pursuant to Rule 497(b) or (h) under the Securities Act, and
as subsequently amended or supplemented by the Trust.
"PURCHASE AGREEMENT" - The Purchase Agreement among the Trust, the
Contracting Stockholders and the Underwriters relating to the issue and sale of
the STRYPES, as described in the Prospectus.
"QUARTERLY DISTRIBUTION" - $______ (or, in the case of the period from and
including ______ __, 1997 to and including ______ __, 1997, $_______).
"RECORD DATE" - Each , , and of each year,
commencing ____ __, 1997.
"REGISTRATION STATEMENT" - The Registration Statement on Form N-2
(Registration Nos. 333-33707; 811-08337) of the Trust, as amended.
"REORGANIZATION EVENT" - A Reorganization Event as defined in the Contract.
"SECURITIES ACT" - The Securities Act of 1933, as amended from time to
time; each reference herein to any section of such Securities Act or any rule or
regulation thereunder shall constitute a reference to any successor provision
thereto.
"SECURITY AND PLEDGE AGREEMENT" - The Security and Pledge Agreement among
the Collateral Agent, the Contracting Stockholders and the Trust, securing the
obligations of the Contracting Stockholders under the Contract, substantially in
the form of Exhibit B hereto.
"SETTLEMENT DATE" - The Settlement Date as defined in the Contract.
"SNYDER COMMON STOCK" - Shares of common stock of the Company to be
exchanged by the Trustees for the STRYPES on the Exchange Date; provided that,
in the event of a reclassification referred to in clause (iv) of Section
5
<PAGE>
3.1(a) of the Contract, the term "Snyder Common Stock" shall mean the other
common stock of the Company issued pursuant thereto.
"STRYPES" - Structured Yield Product Exchangeable for Stock(SM),
representing a proportionate share of beneficial ownership in the Trust
evidencing a Holder's undivided interest in the Trust and right to receive a pro
rata distribution upon liquidation of the Trust Estate.
"TAX EVENT" - A Tax Event as defined in the Contract.
"TAX EVENT ACCELERATION AMOUNT" - The Tax Event Acceleration Amount as
defined in the Contract.
"TAX EVENT ACCELERATION DATE" - A Tax Event Acceleration Date as defined in
the Contract.
"TAX EVENT CASH SETTLEMENT" - The option of each Contracting Stockholder
described in Section 2.5 of the Contract to settle its obligation to deliver
shares of Snyder Common Stock contained in Section 7.3 of the Contract, in whole
or in part, through a cash payment on the Tax Event Acceleration Date.
"TEMPORARY INVESTMENTS" - Direct short-term U.S. government obligations, as
specified from time to time by the Trustees or through standing instructions
from the Trustees to the Administrator or the Paying Agent.
"TRANSFER AGENT AND REGISTRAR" - American Stock Transfer & Trust Company,
as transfer agent and registrar for the Snyder Common Stock.
"TRUST ACCOUNT" - The account created pursuant to Section 3.1 hereof.
"TRUST ESTATE" - The Contract and the U.S. Treasury Securities held at any
time by the Trust, together with any Temporary Investments held at any time
pursuant to Section 3.4 hereof, and any proceeds thereof or therefrom and any
other moneys held at any time in the Trust Account.
"UNDERWRITERS" - The several Underwriters named in the Purchase Agreement.
"U.S. TREASURY SECURITIES" - The meaning specified in Section 2.6(b)
hereof.
____________________________
(SM) Service mark of Merrill Lynch & Co., Inc.
6
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ARTICLE II
TRUST DECLARATION; PURPOSES, POWERS
AND DUTIES OF THE TRUSTEES; ADMINISTRATION
SECTION 2.1 NAME. The Trust is named "Snyder STRYPES Trust," as such
----
name may be modified from time to time by the Trustees following written notice
to the Holders. The Trust's activities may be conducted under the name of the
Trust or any other name deemed advisable by the Trustees.
SECTION 2.2 OFFICE. The address of the principal office of the Trust is
------
c/o Puglisi & Associates, 850 Library Avenue, Suite 204, Newark, Delaware 19715.
On ten Business Days written notice to the Holders the Trustees may designate
another principal office.
SECTION 2.3 RATIFICATION AND APPROVAL OF ACTION OF THE TRUSTEES. The
---------------------------------------------------
Sponsor hereby ratifies and approves any and all actions taken by the Trustees
on behalf of the Trust on or prior to the date hereof in connection with the
registration of the Trust under the Investment Company Act, in connection with
the registration of the offer and sale of the STRYPES under the Securities Act,
or otherwise incident to, or connected with, or necessary to accomplish, the
foregoing or the offer and sale of the STRYPES by the Underwriters and the
operation of the Trust as described in the Prospectus.
SECTION 2.4 DECLARATION OF TRUST; PURPOSES OF THE TRUST. The Sponsor
-------------------------------------------
hereby creates the Trust in order that it may acquire the U.S. Treasury
Securities, enter into the Contract, issue and sell to the Sponsor and the
several Underwriters the STRYPES, hold the Trust Estate in trust for the use and
benefit of all present and future Holders and otherwise carry out the terms and
conditions of this Trust Agreement, all for the purpose of achieving the
investment objectives set forth in the Prospectus. The Trustees hereby declare
that they will accept and hold the Trust Estate in trust for the use and benefit
of all present and future Holders. The Depositor has heretofore deposited with
the Trustees the sum of $1 to accept and hold in trust hereunder until the
issuance and sale of the STRYPES to the several Underwriters, whereupon such sum
shall be donated to an organization satisfying the requirements of Section
170(c)(2) of the Code selected by unanimous consent of the Trustees.
SECTION 2.5 GENERAL POWERS AND DUTIES OF THE TRUSTEES. In furtherance
-----------------------------------------
of the provisions of Section 2.4 hereof, the Sponsor authorizes and directs the
Trustees, on behalf of the Trust:
(a) to enter into and perform (and, in accordance with Section 8.4(a)
hereof, amend), the Contract, the Security and Pledge Agreement, the
Purchase Agreement, the Indemnity Agreement, the Custodian Agreement, the
Administration Agreement, the Paying Agent Agreement and the Subscription
Agreement and to perform all obligations of the Trustees (including the
obligation to provide indemnity
7
<PAGE>
hereunder and thereunder) and enforce all rights and remedies of the Trust
under each of such agreements; and if any of the Custodian Agreement, the
Administration Agreement, the Security and Pledge Agreement and the Paying
Agent Agreement terminates, or the agent of the Trust thereunder resigns or
is discharged, to appoint a substitute agent and enter into a new agreement
with such substitute agent containing provisions substantially similar to
those contained in the agreement being terminated; provided that in any
such new agreement (i) the Custodian and the Paying Agent shall each be a
commercial bank or trust company organized and existing under the laws of
the United States of America or any state therein, shall have full trust
powers and shall have minimum capital, surplus and retained earnings of not
less than $100,000,000; and (ii) the Administrator and the Collateral Agent
shall each be a reputable financial institution eligible and qualified in
all respects to carry out its obligations under the Administration
Agreement or the Security and Pledge Agreement, as the case may be;
(b) to hold the Trust Estate in trust, to create and administer the
Trust Account, to direct payments received by the Trust to the Trust
Account and to make payments out of the Trust Account as set forth in
Article III hereof;
(c) to issue and sell to the Underwriters an aggregate of up to
4,600,000 STRYPES (including those STRYPES subject to the over-allotment
option of the several Underwriters provided for in the Purchase Agreement)
pursuant to the Purchase Agreement and as contemplated by the Prospectus;
provided, however, that subsequent to the determination of the public
offering price per STRYPES and related underwriting discount for the
STRYPES to be sold to the several Underwriters but prior to the sale of the
STRYPES to the several Underwriters, the STRYPES originally issued to the
Sponsor shall be split into a greater number of STRYPES so that immediately
following such split the value of each STRYPES held by the Sponsor will
equal the aforesaid public offering price per STRYPES;
(d) to select independent public accountants and, subject to the
provisions of Section 8.5 hereof, to engage such independent public
accountants;
(e) to engage legal counsel and, to the extent required by Section 2.7
hereof, to engage professional advisors and pay reasonable compensation
thereto;
(f) to defend any action commenced against the Trustees or the Trust
and to prosecute any action which the Trustees deem necessary to protect
the Trust and the rights and interests of Holders, and to pay the costs
thereof;
(g) to delegate any or all of its powers and duties hereunder as
contemplated by the Custodian Agreement, the Paying Agent Agreement and the
Administration Agreement, to the extent permitted by applicable law; and
(h) to adopt the fundamental policies set forth in the Prospectus, to
adopt and amend a code of regulations, and take any and all such other
actions as necessary
8
<PAGE>
or advisable to carry out the purposes of the Trust, subject to the
provisions hereof and applicable law, including, without limitation, the
Investment Company Act.
SECTION 2.6 PORTFOLIO ACQUISITION. In furtherance of the provisions of
---------------------
Section 2.4 hereof, the Sponsor further specifically authorizes and directs the
Trustees, acting on behalf of the Trust:
(a) to enter into the Contract with respect to the shares of Snyder
Common Stock subject thereto with the Contracting Stockholders on the
Commencement Date for settlement on the date or dates provided thereunder
and, subject to satisfaction of the conditions set forth in the Contract,
to pay to each Contracting Stockholder the Firm Consideration Amount and
any Option Consideration Amount thereunder. Such payments shall be made
with the proceeds of the sale of the STRYPES, net of (1) the underwriting
discount, (2) the purchase price paid for the U.S. Treasury Securities as
provided in paragraph (b) below, and (3) an amount in cash equal to the
difference between the aggregate amount of all Quarterly Distributions to
be made on the STRYPES and the aggregate proceeds to be received from the
U.S. Treasury Securities upon maturity; and, subject to the adjustments and
exceptions set forth in the Contract, the Contract shall entitle the Trust
to receive from each Contracting Stockholder on the Settlement Date the
shares of Snyder Common Stock subject thereto (or, if such Contracting
Stockholder elects to exercise the Cash Settlement Option under the
Contract, in whole or in part, an amount of cash or combination of cash and
Snyder Common Stock with an equal value) so that the Trust may execute the
Exchange with the Holders; and
(b) to purchase for settlement on the Firm Payment Date, and on any
Date of Delivery, as appropriate, with the proceeds of the sale the
STRYPES, net of the underwriting discount, U.S. Treasury securities from
such brokers or dealers as the Trustees shall designate in writing to the
Administrator having the terms set forth on Schedule I hereto ("U.S.
Treasury Securities").
SECTION 2.7 PORTFOLIO ADMINISTRATION. In furtherance of the provisions
------------------------
of Section 2.4 hereof, the Sponsor further specifically authorizes and directs
the Trustees:
(a) DETERMINATION OF DILUTION ADJUSTMENTS. Upon receipt of any notice
pursuant to Section 6.4(a) of the Contract of an event requiring an
adjustment to the Exchange Rate Formula, or upon otherwise acquiring
knowledge of such an event, to calculate the required adjustment and
furnish notice thereof to the Collateral Agent and the Administrator or to
request from the Administrator such further information as may be necessary
to calculate or effect the required adjustment;
(b) SELECTION OF INDEPENDENT INVESTMENT BANK. At such times and for
such purposes provided in the Contract, to select and retain a nationally
recognized investment banking firm to determine the market value of such
property as provided in the Contract, and to deliver to the Contracting
Stockholders notice pursuant to Section 8.1 of the Contract identifying the
firm proposed to be selected
9
<PAGE>
and retained, and to consult with the Contracting Stockholders on such
selection and retention as provided in such Section 8.1;
(c) ACCELERATION UPON EVENT OF DEFAULT. Upon receipt of any notice
pursuant to Section 6.4(b) of the Contract that an Event of Default has
occurred, or upon otherwise acquiring notice that an Event of Default has
occurred, to request quotations from Independent Dealers, compute the
Acceleration Value and the Aggregate Acceleration Value and deliver an
Acceleration Amount Notice, in each case with respect to the Contract, all
as described in Section 7.1 of the Contract;
(d) SALE OF U.S. TREASURY SECURITIES UPON TAX EVENT ACCELERATION.
Upon receipt of any notice from the Contracting Stockholders that they are
exercising their option pursuant to Section 7.3 of the Contract to
accelerate the settlement of their obligations thereunder upon the
occurrence of a Tax Event, to (i) to select three United States government
securities primary dealers in The City of New York to provide bids for the
purchase of the U.S. Treasury Securities then held by the Trust as provided
in Section 2.8(a) hereof, (ii) to sell the U.S. Treasury Securities then
held by the Trust at the highest bid received as provided in Section 2.8(a)
hereof and (iii) to provide notice to the Collateral Agent and the
Contracting Stockholders of the Liquidation Value and the Tax Event
Acceleration Amount, all as described in Section 7.3 of the Contract;
(e) DETERMINATION OF CONTRACT CONSIDERATION. To calculate, at such
times and in such manner as provided in the Contract, the aggregate number
of shares of Snyder Common Stock (or, if the Cash Settlement Option under
the Contract is exercised, in whole or in part, the amount of cash or
combination of cash and Snyder Common Stock with an equal value) required
to be delivered by each Contracting Stockholder under Sections 2.1, 2.3,
2.4 and 2.5 of the Contract or, if a Reorganization Event shall have
occurred, the amount of cash and/or the aggregate number of units of any
Marketable Security required to be delivered by each Contracting
Stockholder on the Early Settlement Date, all as provided in Section 7.2 of
the Contract or, if the Contracting Stockholders shall have exercised their
option to accelerate the settlement of their obligations under the Contract
upon the occurrence of a Tax Event, the amount of cash and the aggregate
number of shares of Snyder Common Stock (or, if the Tax Event Cash
Settlement Option under the Contract is exercised, in whole or in part, the
amount of cash or combination of cash and Snyder Common Stock with an equal
value) required to be delivered by each Contracting Stockholder on the Tax
Event Acceleration Date, all as provided in Section 7.3 of the Contract,
and to furnish notice of the amounts so determined to the Collateral Agent
and the Contracting Stockholders; and
(f) DISTRIBUTION OF CONTRACT CONSIDERATION ON EXCHANGE DATE. Unless
an Event of Default or a Reorganization Event shall have occurred or the
Contracting Stockholders shall have exercised their option to accelerate
the settlement of their obligations under the Contract upon the occurrence
of a Tax Event (in which events distribution of the Contract Consideration
shall be
10
<PAGE>
governed by Section 8.3 below) or one or more of the Contracting
Stockholders elects to exercise the Cash Settlement Option, in whole, with
respect to the shares of Snyder Common Stock otherwise deliverable under
the Contract (in which event the cash received in respect thereof shall be
distributed pro rata to the Holders of STRYPES on the Exchange Date):
(i) DETERMINATION OF FRACTIONAL SHARES. To determine, on
the Exchange Date: (A) for each Holder of STRYPES, such Holder's pro
rata share of the total number of shares of Snyder Common Stock
delivered to the Trust on the Settlement Date under the Contract; and
(B) the number of fractional shares of Snyder Common Stock, if any,
allocable to each Holder and in the aggregate;
(ii) CASH FOR FRACTIONAL SHARES. To sell, in the principal
market therefor, on the Exchange Date, a number of shares of Snyder
Common Stock equal to the aggregate number of fractional shares, if
any, determined pursuant to clause (i)(B) above;
(iii) DELIVERY OF SHARES. To deliver the remaining shares
of Snyder Common Stock to the Transfer Agent and Registrar on the
Exchange Date, with instructions that such shares of Snyder Common
Stock be re-registered and re-issued as follows:
(A) for and in the name of each Holder (other than the
Depositary) who holds STRYPES in definitive form, the Transfer
Agent and Registrar shall be instructed to issue definitive
certificates representing a number of shares of Snyder Common
Stock equal to such Holder's pro rata share of the total number
of shares of Snyder Common Stock delivered to the Trust on the
Settlement Date under the Contract, rounded down to the nearest
integral number; and
(B) the Transfer Agent and Registrar shall be instructed to
transfer all remaining shares of Snyder Common Stock to the
account of the Custodian held through the Depositary, who shall
then be instructed to transfer and credit such shares of Snyder
Common Stock to each Participant who holds STRYPES, with each
Participant receiving its pro rata share of the total shares of
Snyder Common Stock delivered to the Trust on the Settlement Date
under the Contract, reduced by the aggregate cash value of any
fractional shares of Snyder Common Stock allocable to such
Participant;
(iv) DISTRIBUTION OF CASH IN RESPECT OF FRACTIONAL SHARES. To
distribute on the Exchange Date to each Holder of STRYPES to which a
fractional share of Snyder Common Stock is allocable as determined
pursuant to clause (i)(B) above such Holder's pro rata portion of the
proceeds
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<PAGE>
obtained from the liquidation of all fractional shares of Snyder
Common Stock pursuant to clause (ii) above (net of any brokerage or
related expenses); and
(v) RECORD DATE. The distributions described in this
paragraph (f) shall be made to Holders of record as of the close of
business on the Business Day preceding the Exchange Date.
SECTION 2.8 MANNER OF SALES. (a) Upon receipt of any notice from the
---------------
Contracting Stockholders that they are exercising their option pursuant to
Section 7.3 of the Contract to accelerate the settlement of their obligations
thereunder upon the occurrence of a Tax Event, the Trustees on the second
Business Day immediately preceding the Tax Event Acceleration Date shall solicit
cash bids, for settlement on the Business Day immediately preceding the Tax
Event Acceleration Date, from three (or such fewer number of dealers as may be
providing such bids) of the United States government securities primary dealers
in The City of New York listed on Schedule 2.8(a) hereto selected by the
Trustees after consultation with the Contracting Stockholders (which may include
the Administrator or its affiliates) for the purchase by the quoting dealer of
all U.S. Treasury Securities then held by the Trust. If for any reason the
Trustees are unable to obtain the required bid on the second Business Day
preceding the Tax Event Acceleration Date, the Trustees shall attempt to obtain
such bid daily until they are able to obtain the required bid. The Trustees
shall accept the highest bid received that will result in the greatest amount of
proceeds from the sale of the U.S. Treasury Securities then held by the Trust
and shall sell all such U.S. Treasury Securities at that highest bid and the
proceeds from such sale shall be held by the Paying Agent in the Trust Account.
The Trustees shall not be held liable in any way for failure to obtain such
required bid in accordance with this Section 2.8(a).
(b) Any sale of Trust property permitted under Section 8.3(c) hereof shall
be made through such executing brokers or to such dealers as the Trustees,
seeking best price and execution for the Trust, shall designate in writing to
the Paying Agent, taking into account such factors as price, commission, size of
order, difficulty of execution and brokerage skill required.
SECTION 2.9 LIMITATIONS ON TRUSTEES' POWERS. The Trustees, acting on
-------------------------------
behalf of the Trust, are not permitted:
(a) to purchase or hold any securities or instruments except for the
U.S. Treasury Securities, the Contract, shares of Snyder Common
Stock acquired pursuant to the Contract, the Temporary
Investments contemplated by Section 3.4 hereof, and, in the event
of a Reorganization Event, Marketable Securities;
(b) to dispose of the Contract prior to the Exchange Date;
(c) to issue any securities or instruments except for the STRYPES, or
to issue any STRYPES other than the STRYPES sold to the Sponsor
and
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<PAGE>
the STRYPES to be sold pursuant to the Purchase Agreement and
until such STRYPES have been so purchased and paid for in full;
(d) to make short sales or purchases on margin;
(e) to write put or call options;
(f) to borrow money;
(g) to underwrite securities;
(h) to purchase or sell real estate, commodities or commodities
contracts;
(i) to purchase restricted securities;
(j) to make loans; or
(k) to take any action, or direct or permit the Administrator, the
Paying Agent or the Custodian to take any action, that would vary
the investment of the Holders within the meaning of Treasury
Regulation Section 301.7701-4(c), or otherwise take any action or
direct or permit any action to be taken that would or could cause
the Trust not to be a "grantor trust" under the Code.
ARTICLE III
ACCOUNTS AND PAYMENTS
SECTION 3.1 THE TRUST ACCOUNT. The Trustees shall, upon issuance of the
-----------------
STRYPES, establish with the Paying Agent an account to be called the "Trust
Account". All moneys received by the Trustees in respect of the Contract, the
U.S. Treasury Securities and any Temporary Investments held pursuant to Section
3.4 hereof, all moneys received from the sale of the STRYPES to the Sponsor, and
any proceeds from the sale of the STRYPES to the Underwriters after the purchase
of the Contract and the U.S. Treasury Securities shall be credited to the Trust
Account.
SECTION 3.2 DISTRIBUTIONS TO HOLDERS. On or shortly after each
------------------------
Distribution Date the Trustees shall distribute to each Holder of record at the
close of business on the preceding Record Date, at the post office address of
the Holder appearing on the books of the Trust or Paying Agent or by any other
means mutually agreed upon by the Holder and the Trustees, an amount equal to
such Holder's pro rata share of the Quarterly Distribution computed as of the
close of business on such Distribution Date.
SECTION 3.3 SEGREGATION. All moneys and other assets deposited or
-----------
received by the Trustees hereunder shall be held by them in trust as part of the
Trust Estate until required to be disbursed or otherwise disposed of in
accordance with the provisions of
13
<PAGE>
this Trust Agreement, and the Trustees shall handle such moneys and other assets
in such manner as shall constitute the segregation and holding in trust within
the meaning of the Investment Company Act.
SECTION 3.4 INVESTMENTS. To the extent necessary to enable the Paying
-----------
Agent to make the next succeeding Quarterly Distribution, any moneys deposited
with or received by the Trustees in the Trust Account shall be invested as soon
as possible by the Paying Agent in Temporary Investments maturing no later than
the Business Day preceding the next following Distribution Date. Except as
otherwise specifically provided herein or in the Paying Agent 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 Investment to
its maturity and shall apply the proceeds thereof upon maturity to the payment
of the next succeeding Quarterly Distribution. All such Temporary Investments
shall be selected from time to time by the Trustees or pursuant to standing
instructions from the Trustees to the Administrator, and the Administrator
and/or Paying Agent shall have no liability to the Trust or any Holder or any
other Person with respect to any such Temporary Investment. Any interest or
other income received on any moneys in the Trust Account shall, upon receipt
thereof, be deposited into the Trust Account. Notwithstanding the foregoing,
not more than 5% of the assets of the Trust may be held at any time in the form
of cash and Temporary Investments, and the Trustees shall distribute cash, or
liquidate Temporary Investments and distribute the proceeds thereof, if, when
and to the extent needed to maintain compliance with the foregoing restriction.
ARTICLE IV
REDEMPTION
SECTION 4.1 REDEMPTION. The Trustees shall have no right or obligation
----------
to redeem STRYPES.
ARTICLE V
ISSUANCE OF CERTIFICATES;
REGISTRY; TRANSFER OF STRYPES
SECTION 5.1 FORM OF CERTIFICATE. Each Certificate evidencing STRYPES
-------------------
shall be countersigned manually or in facsimile by the Managing Trustee and
executed manually by the Paying Agent in substantially the form of Exhibit A
hereto with the blanks appropriately filled in, shall be dated the date of
execution and delivery by the Paying Agent and shall represent a fractional
undivided interest in the Trust, the numerator of which fraction shall be the
number of STRYPES set forth on the face of such Certificate and the denominator
of which shall be the total number of STRYPES outstanding at that time. All
STRYPES shall be issued in registered form and shall be numbered serially.
Pending the preparation of definitive Certificates, the Trustees may execute and
the Paying Agent shall authenticate and deliver temporary Certificates (printed,
lithographed, typewritten or otherwise reproduced, in each case in form
satisfactory to the Paying Agent). Temporary
14
<PAGE>
Certificates shall be issuable as registered Certificates substantially in the
form of the definitive Certificates but with such omissions, insertions and
variations as may be appropriate for temporary Certificates, all as may be
determined by the Trustees with the concurrence of the Paying Agent. Every
temporary Certificate shall be executed by the Managing Trustee and be
authenticated by the Paying Agent upon the same conditions and in substantially
the same manner, and with like effect, as the definitive Certificates. Without
unreasonable delay the Managing Trustee shall execute and shall furnish
definitive Certificates and thereupon temporary Certificates may be surrendered
in exchange therefor without charge at each office or agency of the Paying Agent
and the Paying Agent shall authenticate and deliver in exchange for such
temporary Certificates definitive Certificates for a like aggregate number of
STRYPES. Until so exchanged, the temporary Certificates shall be entitled to
the same benefits hereunder as definitive Certificates.
SECTION 5.2 TRANSFER OF STRYPES; ISSUANCE, TRANSFER AND INTERCHANGE OF
----------------------------------------------------------
CERTIFICATES. STRYPES may be transferred by the Holder thereof by presentation
- ------------
and surrender of properly endorsed Certificates at the office of the Paying
Agent, accompanied by such documents executed by the Holder or his authorized
attorney as the Paying Agent deems necessary to evidence the authority of the
person making the transfer. Certificates issued pursuant to this Trust
Agreement are interchangeable for one or more other Certificates evidencing an
equal aggregate number of STRYPES and all Certificates issued as may be
requested by the Holder and deemed appropriate by the Paying Agent shall be
issued in denominations of one STRYPES or any multiple thereof. The Paying
Agent may deem and treat the person in whose name any STRYPES shall be
registered upon the books of the Paying Agent as the owner of such STRYPES for
all purposes hereunder and the Paying Agent shall not be affected by any notice
to the contrary. The transfer books maintained by the Paying Agent for the
purposes of this Section 5.2 shall include the name and address of the record
owners of the STRYPES and shall be closed in connection with the dissolution of
the Trust pursuant to Section 8.3 hereof. A sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any such
transfer shall be paid to the Paying Agent by the Holder. A Holder may be
required to pay a fee for each new Certificate to be issued pursuant to the
preceding paragraph in such amount as may be specified by the Paying Agent and
approved by the Trustees. All Certificates cancelled pursuant to this Trust
Agreement may be voided by the Paying Agent in accordance with the usual
practice of the Paying Agent or in accordance with the instructions of the
Trustees; provided, however, that the Paying Agent shall not be required to
destroy cancelled Certificates. The Paying Agent may adopt other reasonable
rules and regulations for the registration, transfer and tender of STRYPES as it
may, in its discretion, deem necessary.
SECTION 5.3 REPLACEMENT OF CERTIFICATES. In case any Certificate shall
---------------------------
become mutilated or be destroyed, stolen or lost, the Paying Agent shall execute
and deliver a new Certificate in exchange and substitution therefor upon the
Holder's furnishing the Paying Agent with proper identification and satisfactory
indemnity, complying with such other reasonable regulations and conditions as
the Paying Agent may prescribe and paying such expenses and charges, including
any bonding fee, as the Paying Agent may incur or reasonably impose; provided
that if the Trust has dissolved or is in the process of dissolving,
15
<PAGE>
the Paying Agent, in lieu of issuing such new Certificate, may, upon the terms
and conditions set forth herein, make the distributions set forth in Section
8.3(c) hereof. Any mutilated Certificate shall be duly surrendered and
cancelled before any duplicate Certificate shall be issued in exchange and
substitution therefor. Upon issuance of any duplicate Certificate pursuant to
this Section 5.3, the original Certificate claimed to have been lost, stolen or
destroyed shall become null and void and of no effect, and any bona fide
purchaser thereof shall have only such rights as are afforded under Article 8 of
the Uniform Commercial Code to a Holder presenting a Certificate for transfer in
the case of an overissue.
SECTION 5.4 LIMITATION ON LIABILITY. Pursuant to (S)3803(a) of the
-----------------------
Delaware Business Trust Act, 12 Del. C. (S)3801, et seq., the Holders of the
------- -- ---
STRYPES shall be entitled to the same limitation of personal liability extended
to stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware.
SECTION 5.5 GENERAL PROVISIONS REGARDING THE STRYPES.
----------------------------------------
(A) The consideration received by the Trust for the issuance of the
STRYPES shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(B) Upon issuance of the STRYPES as provided in this Trust Agreement,
the STRYPES so issued shall be deemed to be validly issued, fully paid and non-
assessable.
(C) Every person, by virtue of having become a Holder in accordance
with the terms of this Trust Agreement, shall be deemed to have expressly
assented and agreed to the terms of, and shall be bound by, this Trust
Agreement.
ARTICLE VI
EXECUTION OF THE CONTRACT
SECTION 6.1 EXECUTION OF THE CONTRACT. The Contract shall be
-------------------------
countersigned manually or in facsimile by the Managing Trustee and executed
manually by the Contracting Stockholders and the Collateral Agent and shall be
dated the date of execution and delivery by the Contracting Stockholders.
ARTICLE VII
TRUSTEES
SECTION 7.1 TRUSTEES. The Trust shall have three Trustees. One Trustee
--------
shall be the Managing Trustee and, as such, is authorized to execute documents
and instruments on behalf of the Trust. The Managing Trustee will be appointed
by resolution of the Trustees. Each Trustee shall serve until the next regular
annual or special meeting of Holders called for the purpose of electing Trustees
and, then, until such Trustee's successor
16
<PAGE>
is duly elected and qualified. Holders may not cumulate their votes in the
election of Trustees. Each Trustee shall not be considered to have qualified
for the office unless such Trustee shall agree to be bound by the terms of this
Trust Agreement and shall evidence his consent by executing this Trust Agreement
or a supplement hereto.
SECTION 7.2 VACANCIES. Any vacancy in the office of a Trustee may be
---------
filled in compliance with Sections 10 and 16 of the Investment Company Act by
the vote, within 30 days, of the remaining Trustees; provided that if required
by Section 16 of the Investment Company Act, the Trustees shall forthwith cause
to be held as promptly as possible and in any event within 60 days (unless the
Commission by order shall extend such period) a meeting of Holders for the
purpose of electing Trustees in compliance with Sections 10 and 16 of the
Investment Company Act. Until a vacancy in the office of any Trustee is filled
as provided above, the remaining Trustees in office, regardless of their number,
shall have the powers granted to the Trustees and shall discharge all the duties
imposed upon the Trustees by this Trust Agreement. Election shall be by the
affirmative vote of Holders of a majority of the STRYPES entitled to vote
present in person or by proxy at a special meeting of Holders called for the
purpose of electing any Trustee. Each individual Trustee shall be at least 21
years of age and shall not be under any legal disability. No Trustee who is an
"interested person", as defined in the Investment Company Act, may assume office
if it would cause the composition of the Trustees of the Trust not to be in
compliance with the percentage limitations on interested persons in Section 10
of the Investment Company Act. Trustees need not be Holders. Notice of the
appointment or election of a successor Trustee shall be mailed promptly after
acceptance of such appointment by the successor Trustee to each Holder.
SECTION 7.3 POWERS. The Trust will be managed solely by the Trustees,
------
who will, subject to the provisions of Article II hereof, have complete and
exclusive control over the management, conduct and operation of the Trust's
business, and shall have the rights, powers and authority of a board of
directors of a corporation organized under Delaware law. The Trustees shall
have fiduciary responsibility for the safekeeping and use of all funds and
assets of the Trust and shall not employ, or permit another to employ, such
funds or assets in any manner except for the exclusive benefit of the Trust and
except in accordance with the terms of this Trust Agreement. Subject to the
continuing supervision of the Trustees and as permitted by applicable law, the
functions of the Trust shall be performed by the Custodian, the Paying Agent,
the Administrator and such other entities engaged to perform such functions as
the Trustees may determine, including, without limitation, any or all
administrative functions.
SECTION 7.4 MEETINGS. Meetings of the Trustees shall be held from time
--------
to time upon the call of any Trustee on not less than 48 hours notice (which may
be waived by any or all of the Trustees in writing either before or after such
meeting or by attendance at the meeting unless the Trustee attends the meeting
for the express purpose of objecting to the transaction of any business on the
ground that the meeting has not been lawfully called or convened). The Trustees
shall act either by majority vote of the Trustees present at a meeting at which
at least a majority of the Trustees then in office are present or by a unanimous
written consent of the Trustees without a meeting. Except as otherwise required
17
<PAGE>
under the Investment Company Act, all or any of the Trustees may participate in
a meeting of the Trustees by means of a conference telephone call or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to such
communications equipment shall constitute presence in person at such meeting.
SECTION 7.5 RESIGNATION AND REMOVAL. Any Trustee may resign and be
-----------------------
discharged of the trust created by the Trust Agreement by executing an
instrument in writing resigning as Trustee, filing the same with the
Administrator and sending notice thereof to the remaining Trustees, and such
resignation shall become effective immediately unless otherwise specified
therein. Any Trustee may be removed in the event of incapacity by vote of the
remaining Trustees and for any reason by written declaration or vote of the
Holders of more than 66 2/3% of the outstanding STRYPES, notice of which vote
shall be given to the remaining Trustees and the Administrator. The
resignation, removal or failure to reelect any Trustee shall not cause the
termination of the Trust.
SECTION 7.6 LIABILITY. The Trustees shall not be liable to the Trust or
---------
any Holder for any action taken or for refraining from taking any action except
in the case of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties of their office. Specifically, without limitation, the
Trustees shall not be responsible for or in respect of the recitals herein or
the validity or sufficiency of this Trust Agreement or for the due execution
hereof by any other Person, or for or in respect of the validity or sufficiency
of STRYPES or Certificates representing STRYPES and shall in no event assume or
incur any liability, duty or obligation to any Holder or to any other Person,
other than as expressly provided for herein. The Trustees may employ agents,
attorneys, administrators, accountants and auditors, and shall not be answerable
for the default or misconduct of any such Persons if such Persons shall have
been selected with reasonable care. Action in good faith may include action
taken in good faith in accordance with an opinion of counsel. In no event shall
any Trustee be personally liable for any expenses with respect to the Trust.
Each Trustee shall be indemnified by the Trust with respect to any claim,
liability or loss arising out of or in connection with such Trustee's acting as
Trustee of the Trust and with respect to all reasonable costs and expenses
(including the reasonable costs of investigation, preparation for and defense of
legal and/or administrative proceedings relating to a claim against such Trustee
and reasonable attorneys' fees and disbursements) incurred in connection with
any such claim, liability or loss, except in the case of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties of his office.
Notwithstanding the foregoing, it is understood that the Trust shall not, in
respect of the legal expenses of any Trustee 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).
SECTION 7.7 COMPENSATION. Each Trustee, other than a Trustee who is a
------------
director, officer or employee of the Sponsor, any Underwriter, or the
Administrator or any affiliate thereof, shall receive a one-time, up-front fee
of $10,800, in respect of its annual fee and anticipated out-of-pocket expenses.
In addition, the Managing Trustee shall receive an additional one-time, up-front
fee of $3,600 for serving in such capacity. The Trustees will not receive any
pension or retirement benefits. In the event of the resignation or removal of
18
<PAGE>
a Trustee, such Trustee shall remit to the Trust the portion of its fee ratable
for the period from the day of such resignation or removal through the Exchange
Date.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 MEETINGS OF HOLDERS. The Trustees shall not hold annual or
-------------------
regular meetings of Holders except as set forth herein. A special meeting may be
called at any time by the Trustees or upon petition of Holders of more than 50%
of the STRYPES outstanding (unless substantially the same matter was voted on
during the preceding 12 months), and shall be called as required by the
Investment Company Act and the rules and regulations thereunder, including,
without limitation, when requested by the Holders of not less than 10% of the
STRYPES outstanding for the purposes of voting upon the question of the removal
of any Trustee or Trustees. The Trustees shall establish, and notify the Holders
in writing of, the record date for each such meeting which shall be not less
than 10 nor more than 50 days before the meeting date. Holders at the close of
business on the record date will be entitled to vote at the meeting. The
Administrator shall, as soon as possible after any such record date (or prior to
such record date if appropriate), mail by first class mail to each Holder a
notice of meeting and a proxy statement and form of proxy in the form approved
by the Trustees and complying with the Investment Company Act and the rules and
regulations thereunder. Except as otherwise specified herein, in the Prospectus
(including, without limitation, changes to the Trust's fundamental policies set
forth in the prospectus) or in any provision of the Investment Company Act and
the rules and regulations thereunder, any action may be taken by vote of Holders
of a majority of the STRYPES outstanding present in person or by proxy if
Holders of a majority of STRYPES outstanding on the record date are so
represented. Each STRYPES shall have one vote and may be voted in person or by
duly executed proxy. Any proxy may be revoked by notice in writing, by a
subsequently dated proxy or by voting in person at the meeting, and no proxy
shall be valid after eleven months following the date of its execution.
SECTION 8.2 BOOKS AND RECORDS; REPORTS. (a) The Trustees shall keep a
--------------------------
certified copy or duplicate original of this Trust Agreement on file at the
office of the Trust and the office of the Administrator available for inspection
at all reasonable times during its usual business hours by any Holder. The
Trustees shall keep proper books of record and account for all the transactions
under this Trust Agreement at the office of the Trust and the office of the
Administrator, and such books and records shall be open to inspection by any
Holder at all reasonable times during usual business hours. The Trustees shall
retain all books and records in compliance with Section 31 of the Investment
Company Act and the rules and regulations thereunder.
(b) With each payment to Holders the Paying Agent shall set forth, either
in the instruments by means of which payment is made or in a separate statement,
the amount being paid from the Trust Account expressed as a dollar amount per
STRYPES and the other information required under Section 19 of the Investment
Company Act and the rules and regulations thereunder. The Trustees shall
prepare and file or distribute reports as required
19
<PAGE>
by Section 30 of the Investment Company Act and the rules and regulations
thereunder. The Trustees shall prepare and file such reports as may from time
to time be required to be filed or distributed to Holders under any applicable
state or Federal statute or rule or regulation thereunder, and shall file such
tax returns as may from time to time be required under any applicable state or
Federal statute or rule or regulation thereunder. One of the Trustees shall be
designated by resolution of the Trustees to make the filings and give the
notices required by Rule 17g-1 under the Investment Company Act.
(c) In calculating the net asset value of the Trust as required by the
Investment Company Act, (i) the U.S. Treasury Securities will be valued at the
mean between the last current bid and asked prices or, if quotations are not
available, as determined in good faith by the Trustees, (ii) short-term
investments having a maturity of 60 days or less will be valued at cost with
accrued interest or discount earned included in interest receivable and (iii)
the Contract will be valued at the mean of the bid prices received by the
Administrator from at least three independent broker-dealer firms unaffiliated
with the Trust to be named by the Trustees who are in the business of making
bids on financial instruments similar to the Contract and with terms comparable
thereto.
SECTION 8.3 DISSOLUTION. (a) The Trust created hereby shall dissolve,
-----------
and its affairs be wound up, upon the earliest of (i) the date 90 days after the
execution of this Trust Agreement if (x) the STRYPES have not theretofore been
issued or (y) the net worth of the Trust is not at least $100 at such time, (ii)
the date five Business Days after the Closing Date, and (iii) the date which is
21 years less 91 days after the death of the last survivor of all of the
descendants of Joseph P. Kennedy living on the date hereof. The Trust is
irrevocable, the Sponsor has no right to withdraw any assets constituting a
portion of the Trust Estate, and the dissolution of the Sponsor shall not
operate to dissolve the Trust. The death or incapacity of any Holder shall not
operate to terminate this Trust Agreement, nor entitle his legal representatives
or heirs to claim an accounting or to take any action or proceeding in any court
for a partition or winding up of the Trust, and shall not otherwise affect the
rights, obligations and liabilities of the parties hereto.
(b) Written notice of any dissolution shall be sent to Holders specifying
the record date for any distribution to Holders, the amount distributable
(including, if applicable, the number of shares of Snyder Common Stock or, if a
Reorganization Event shall have occurred, the number of units of any Marketable
Security) with respect to each STRYPES and the time of dissolution as determined
by the Trustees, upon which the books maintained by the Paying Agent pursuant to
Section 5.2 hereof shall be closed. Any such notice shall be provided by mail,
sent to each Holder at such Holder's address as it appears on the books of the
Paying Agent, first class, postage prepaid not less than 9 days prior to the
date on which such distribution is to be made. At or prior to the mailing of
such notice, the Administrator shall publish a public announcement in The Wall
Street Journal or another daily newspaper of national circulation.
(c) Subject to any applicable provisions of law, for purposes of
dissolution under Sections 8.3(a)(ii) and (iii) hereof, within five Business
Days after such dissolution, the Trustees shall effect the sale of any remaining
property of the Trust (other than any Snyder
20
<PAGE>
Common Stock or Marketable Securities received pursuant to the Contract and
cash), and the Paying Agent shall distribute pro rata as soon as practicable
thereafter to each Holder, upon surrender for cancellation of its Certificates,
its interest in the Trust Estate. Together with the distribution to the
Holders, the Trustees shall furnish the Holders with a final statement as of the
date of the distribution of the amount distributable with respect to each
STRYPES.
(d) Notwithstanding anything to the contrary contained herein, no
fractional units of any security (including Snyder Common Stock) will be
distributed to Holders pursuant to Section 8.3(c) hereof upon dissolution of the
Trust. All fractional units to which Holders would otherwise be entitled upon
dissolution of the Trust will be aggregated and liquidated by the Trustees and,
in lieu of the fractional unit to which a Holder would otherwise have been
entitled in respect of the total number of STRYPES held by such Holder, such
Holder will receive its pro rata portion of the proceeds from such liquidation
(net of any brokerage or related expenses).
SECTION 8.4 AMENDMENT AND WAIVER. (a) This Trust Agreement may be
--------------------
amended from time to time by the Trustees for any purpose prior to the issuance
and sale to the Underwriters of the STRYPES and thereafter without the consent
of any of the Holders (i) to cure any ambiguity or to correct or supplement any
provision contained herein or therein which may be defective or inconsistent
with any other provision contained herein or therein; (ii) to change any
provision hereof or thereof as may be required by applicable law or the
Commission or any successor governmental agency exercising similar authority; or
(iii) to make such other provisions in regard to matters or questions arising
hereunder or thereunder as shall not materially adversely affect the interests
of the Holders (as determined in good faith by the Trustees, who may rely on an
opinion of counsel).
(b) This Trust Agreement may also be amended from time to time by the
Trustees (or the performance of any of the provisions of the Trust Agreement may
be waived) with the consent by the required vote of the Holders in accordance
with Section 8.1 hereof; provided that this Trust Agreement may not be amended
(i) without the consent by vote of the Holders of all STRYPES then outstanding,
so as to increase the number of STRYPES issuable hereunder above the number of
STRYPES specified in Section 2.5(c) hereof or such lesser number as may be
outstanding at any time during the term of this Trust Agreement, (ii) to reduce
the interest in the Trust represented by STRYPES without the consent of the
Holders of such STRYPES, (iii) if such amendment is prohibited by the Investment
Company Act or other applicable law or (iv) without the consent by vote of the
Holders of all STRYPES then outstanding, if such amendment would effect a change
in Section 2.4 or 2.9 hereof or in the voting requirements set forth in Section
8.1 hereof or this Section 8.4.
(c) Any of the agreements referred to in Section 2.5(a) hereof may be
amended from time to time by the Trustees and the other parties thereto for any
purpose without the consent of any of the Holders.
(d) Promptly after the execution of any amendment, the Trustees shall
furnish written notification of the substance of such amendment to each Holder.
21
<PAGE>
(e) Notwithstanding subsections (a) and (b) of this Section 8.4, no
amendment hereof shall permit the Trust, the Trustees, the Administrator, the
Paying Agent or the Custodian to take any action or direct or permit any Person
to take any action that (i) would vary the investment of Holders within the
meaning of Treasury Regulation Section 301.7701-4(c), or (ii) would or could
cause the Trust, or direct or permit any action to be taken that would or could
cause the Trust, not to be a "grantor trust" under the Code.
SECTION 8.5 ACCOUNTANTS. (a) The Trustees shall, in accordance with
-----------
Section 30 of the Investment Company Act, file annually with the Commission such
information, documents and reports as investment companies having securities
registered on a national securities exchange are required to file annually
pursuant to Section 13(a) of the Exchange Act and the rules and regulations
issued thereunder. The Trustees shall transmit to the Holders, at least semi-
annually, the reports required by Section 30(d) of the Investment Company Act
and the rules and regulations thereunder, including, without limitation, a
balance sheet accompanied by a statement of the aggregate value of investments
on the date of such balance sheet, a list showing the amounts and values of such
investments owned on the date of such balance sheet, and a statement of income
for the period covered by the report. Financial statements contained in such
annual reports shall be accompanied by a certificate of independent public
accounts based upon an audit not less in scope or procedures than that which
independent public accountants would ordinarily make for the purpose of
complying with generally accepted auditing standards and shall contain such
information as the Commission may prescribe. Each such report shall state that
such independent public accountants have verified investments owned, either by
actual examination or by receipt of a certificate from the Custodian.
(b) The independent public accountants referred to in subsection (a) above
shall be selected at a meeting held within 30 days before or after the beginning
of the fiscal year by the vote, cast in person, of a majority of the Trustees
who are not "interested persons" as defined in the Investment Company Act and
such selection shall be submitted for ratification at the first meeting of
Holders to be held as set forth in Section 8.1 hereof, and thereafter as
required by the Investment Company Act and the rules and regulations thereunder.
The employment of any independent public accountant for the Trust shall be
conditioned upon the right of the Holders by a vote of the lesser of (i) 67% or
more of the STRYPES present at a special meeting of Holders, if Holders of more
than 50% of STRYPES outstanding are present or represented by proxy at such
meeting or (ii) more than 50% of the STRYPES outstanding to terminate such
employment at any time without penalty.
(c) The foregoing provisions of this Section 8.5 are in addition to any
applicable requirements of the Investment Company Act and the rules and
regulations thereunder.
SECTION 8.6 NATURE OF HOLDER'S INTEREST. Each Holder holds at any given
---------------------------
time a beneficial interest in the Trust Estate, but does not have any right to
take title or possession of any portion of the Trust Estate. Each Holder
expressly waives any right he may have under any rule of law, or the provisions
of any statute, or otherwise, to require the Trustees at any time to account, in
any manner other than as expressly provided in this Trust Agreement, for the
shares of Snyder Common Stock, the Contract, the U.S.
22
<PAGE>
Treasury Securities or other assets or moneys from time to time received, held
and applied by the Trustees hereunder. No Holder shall have any right except as
provided herein to control or determine the operation and management of the
Trust or the obligations of the parties hereto. Nothing set forth herein or in
the Certificates representing STRYPES shall be construed to constitute the
Holders from time to time as partners or members of an association.
SECTION 8.7 DELAWARE LAW TO GOVERN. This Trust Agreement is executed and
----------------------
delivered in the State of Delaware, and all laws or rules of construction of the
State of Delaware, without regard to principles of conflict of laws, shall
govern the rights of the parties hereto and the Holders and the construction,
validity and effect of the provisions hereof.
SECTION 8.8 NOTICES. Any notice, demand, direction or instruction to be
-------
given to the Sponsor hereunder shall be in writing and shall be duly given if
mailed or delivered to ML IBK Positions, Inc. at World Financial Center, North
Tower, New York, New York 10281, or at such other address as shall be specified
by the Sponsor to the other parties hereto in writing. Any notice, demand,
direction or instruction to be given to the Trust and the Trustees hereunder
shall be in writing and shall be duly given if mailed or delivered to the Trust
c/o The Bank of New York at 101 Barclay Street, New York, New York 10286, and to
each Trustee at such Trustee's address set forth beneath its signature below, or
such other address as shall be specified to the other parties hereto by such
party in writing. Any notice to be given to a Holder shall be duly given if
mailed, first class postage prepaid, or by such other substantially equivalent
means as the Trustees may deem appropriate, or delivered to such Holder at the
address of such Holder appearing on the registry of the Paying Agent.
SECTION 8.9 SEVERABILITY. If any one or more of the covenants,
------------
agreements, provisions or terms of this Trust Agreement shall be for any reason
whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
and terms of this Trust Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Trust Agreement or of the
Certificates, or the rights of the Holders thereof.
SECTION 8.10 COUNTERPARTS. This Trust 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.
SECTION 8.11 SUCCESSORS AND ASSIGNS. Whenever in this Trust Agreement
----------------------
any of the parties hereto is named or referred to, the successors and assigns of
such party shall be deemed to be included, and all covenants and agreements in
this Trust Agreement by the Sponsor and Trustees shall bind and inure to the
benefit of their respective successors and assigns, whether or not so expressed.
23
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to
be duly executed.
ML IBK POSITIONS, INC.
By:___________________________
Name:
Title:
TRUSTEES:
_______________________________________
Name: Donald J. Puglisi
Address: 850 Library Avenue, Suite 204
Newark, Delaware 19715
_______________________________________
Name: William R. Latham III
Address: 850 Library Avenue, Suite 204
Newark, Delaware 19715
_______________________________________
Name: James B. O'Neill
Address: 850 Library Avenue, Suite 204
Newark, Delaware 19715
24
<PAGE>
Schedule I
U.S. TREASURY SECURITIES
All terms specified are for stripped principal or interest components of
U.S. Treasury debt obligations.
<TABLE>
<CAPTION>
Maturity Par Amount CUSIP No.
- ------------------ -------------------- -----------------------------------
<S> <C> <C>
</TABLE>
25
<PAGE>
Exhibit A
SNYDER STRYPES TRUST
NO. ____________________ STRYPES(SM) CUSIP NO. _______
THIS CERTIFIES THAT ________ IS THE RECORD OWNER OF _______ FULLY PAID AND NON-
ASSESSABLE STRYPES, PAR VALUE $.10 PER STRYPES, OF SNYDER STRYPES TRUST
CONSTITUTING FRACTIONAL UNDIVIDED BENEFICIAL INTERESTS IN SNYDER STRYPES TRUST,
A TRUST CREATED UNDER THE LAWS OF THE STATE OF DELAWARE PURSUANT TO AN AMENDED
AND RESTATED TRUST AGREEMENT (THE "TRUST AGREEMENT") AMONG ML IBK POSITIONS,
INC., THE TRUSTEES NAMED THEREIN AND THE HOLDERS (AS DEFINED THEREIN). THIS
CERTIFICATE IS ISSUED UNDER AND IS SUBJECT TO THE TERMS, PROVISIONS AND
CONDITIONS OF THE TRUST AGREEMENT, AS THE SAME MAY BE AMENDED FROM TIME TO TIME,
TO WHICH THE HOLDER OF THIS CERTIFICATE BY VIRTUE OF THE ACCEPTANCE HEREOF
ASSENTS AND IS BOUND, A COPY OF WHICH TRUST AGREEMENT IS AVAILABLE AT THE OFFICE
OF THE TRUST'S PAYING AGENT, THE BANK OF NEW YORK, 101 BARCLAY STREET NEW YORK,
NEW YORK 10286. THIS CERTIFICATE IS TRANSFERABLE AND INTERCHANGEABLE BY THE
REGISTERED OWNER IN PERSON OR BY HIS DULY AUTHORIZED ATTORNEY AT THE OFFICE OF
THE PAYING AGENT UPON SURRENDER OF THIS CERTIFICATE PROPERLY ENDORSED OR
ACCOMPANIED BY A WRITTEN INSTRUMENT OF TRANSFER AND ANY OTHER DOCUMENTS THAT THE
PAYING AGENT MAY REQUIRE FOR TRANSFER, IN FORM SATISFACTORY TO THE PAYING AGENT
AND PAYMENT OF THE FEES AND EXPENSES PROVIDED IN THE TRUST AGREEMENT.
THIS CERTIFICATE IS NOT VALID UNLESS MANUALLY COUNTERSIGNED BY THE PAYING
AGENT.
WITNESS THE FACSIMILE SIGNATURE OF THE MANAGING TRUSTEE.
DATED:
SNYDER STRYPES TRUST
By:_______________________________
Donald J. Puglisi
Managing Trustee
COUNTERSIGNED:
THE BANK OF NEW YORK
as Paying Agent
By: ______________________________
Authorized Signature
______________________
(SM) Service Mark of Merrill Lynch & Co., Inc.
A-1
<PAGE>
THIS CERTIFICATE IS ISSUED UNDER AND IS SUBJECT TO THE TERMS, PROVISIONS AND
CONDITIONS OF THE AMENDED AND RESTATED TRUST AGREEMENT AMONG ML IBK POSITIONS,
INC., THE TRUSTEES NAMED THEREIN AND THE HOLDERS (AS DEFINED THEREIN) TO WHICH
THE HOLDER OF THIS CERTIFICATE BY VIRTUE OF THE ACCEPTANCE HEREOF ASSENTS AND IS
BOUND.
The following abbreviations, when used in the inscription on the face of
this Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM--as tenants in common UNIF GIFT MIN ACT--___Custodian___
TEN ENT--as tenants by the entireties (Cust) (Minor)
JT TEN-- as joint tenants with right under Uniform Gifts to
of survivorship and not as Minors Act _________
tenants in common (State)
Additional abbreviations also may be used though not in the above list.
For value received, _______________________ hereby sell, assign and transfer
unto
Please insert social securities or
other identifying number of assignee
____________________________________
____________________________________
_______________________________________________________________________________
(Please Print or Typewrite Name and Address, Including Zip Code, of Assignee)
______________ STRYPES of fractional undivided beneficial interest represented
by the within Certificate, and do hereby irrevocably constitute and appoint
_________ Attorney to transfer the said STRYPES on the books of the within-named
Trust with full power of substitution in the premises.
Dated: ______________________
_____________________________________
NOTICE: The Signature to this assignment must correspond with the name as
written upon the face of the Certificate in every particular,
without alteration or enlargement or any change whatever.
Signature Guaranteed:__________________________________
The Signature(s) should be guaranteed by an eligible guarantor
institution (banks, stockbrokers, savings and loan associations
and credit unions with membership in an approved signature
guarantee medallion program), pursuant to S.E.C. Rule 17Ad-15.
A-2
<PAGE>
Exhibit (H)(1)
______________________________________________________________________________
______________________________________________________________________________
SNYDER STRYPES TRUST
(a Delaware business trust)
PURCHASE AGREEMENT
------------------
Dated: September __, 1997
______________________________________________________________________________
______________________________________________________________________________
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
SECTION 1. Representations and Warranties.......................................... 4
------------------------------
(a) Representations and Warranties by the Trust............................. 4
(i) Compliance with Registration Requirements....................... 4
(ii) Independent Accountants......................................... 5
(iii) Financial Statement............................................. 5
(iv) No Material Adverse Change in Business.......................... 5
(v) Good Standing of the Trust; No Subsidiaries..................... 5
(vi) Registration Under the 1940 Act................................. 6
(vii) Outstanding STRYPES............................................. 6
(viii) Authorization of Agreement...................................... 6
(ix) Authorization and Description of the Securities................. 6
(x) Authorization of Fundamental Agreements......................... 6
(xi) Compliance with Acts............................................ 7
(xii) Description of Trust Agreement and Fundamental
Agreements...................................................... 7
(xiii) Absence of Defaults and Conflicts............................... 7
(xiv) Absence of Proceedings.......................................... 8
(xv) No Investment Restrictions, etc................................. 8
(xvi) Exhibits........................................................ 8
(xvii) Absence of Further Requirements................................. 8
(xviii) Title to Property............................................... 8
(b) Representations and Warranties by the Contracting
Stockholders............................................................ 9
(i) Authority....................................................... 9
(ii) Delivery of Snyder Common Stock................................. 9
(iii) Authorization of Agreement...................................... 9
(iv) Authorization of the Forward Purchase Contract and the
Security and Pledge Agreement................................... 9
(v) Absence of Defaults and Conflicts............................... 10
(vi) Absence of Further Requirements................................. 10
(vii) Trust Registration Statement and Prospectus..................... 11
(viii) Snyder Registration Statement and Prospectus.................... 11
(c) Officer's Certificates.................................................. 12
SECTION 2. Sale and Delivery to Underwriters; Closing.............................. 12
------------------------------------------
(a) Initial Securities...................................................... 12
(b) Option Securities....................................................... 12
(c) Payment................................................................. 13
(d) Denominations; Registration............................................. 13
SECTION 3. Covenants............................................................... 13
---------
(a) Covenants of the Trust.................................................. 13
(i) Compliance with Securities Regulations and
Commission Requests............................................... 13
(ii) Filing of Amendments.............................................. 14
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
(iii) Delivery of Trust Registration Statements...................... 14
(iv) Delivery of Trust Prospectuses................................. 14
(v) Continued Compliance with Securities Laws...................... 15
(vi) Blue Sky Qualifications........................................ 15
(vii) Rule 158....................................................... 15
(viii) Use of Proceeds................................................ 16
(ix) Listing........................................................ 16
(x) Reporting Requirements......................................... 16
(b) Covenants of the Contracting Stockholders.............................. 16
(i) Restriction on Sale of Securities.............................. 16
(ii) Purpose Statement.............................................. 17
SECTION 4. Payment of Expenses.................................................... 17
-------------------
(a) Expenses Payable by the Contracting Stockholders....................... 17
(b) Termination of Agreement............................................... 17
(c) Allocation of Expenses................................................. 17
SECTION 5. Conditions............................................................. 17
----------
(a) Conditions of Underwriters' Obligations................................ 17
(1) Effectiveness of Trust Registration Statement.................. 18
(2) Effectiveness of Snyder Registration Statement................. 18
(3) Opinion of Counsel for the Trust............................... 18
(4) Opinion of Special Delaware Counsel for the Trust.............. 18
(5) Opinion of Counsel for the Underwriters........................ 19
(6) Opinion of Counsel for Snyder.................................. 19
(7) Opinion of Counsel for the Contracting Stockholders............ 19
(8) Managing Trustee's Certificate................................. 19
(9) Snyder and Partnership Officers' Certificate................... 20
(10) Certificates of Contracting Stockholders....................... 20
(11) Snyder Accountant's Comfort Letter............................. 20
(12) Snyder Bring-down Comfort Letter............................... 21
(13) Approval of Listing............................................ 21
(14) No Objection................................................... 21
(15) Lock-up Agreements............................................. 21
(16) Fundamental Agreements......................................... 21
(17) Inducement Letters............................................. 21
(18) Conditions to Purchase of Option Securities.................... 21
(19) Additional Documents........................................... 23
(b) Termination of Agreement............................................... 23
SECTION 6. Indemnification........................................................ 23
---------------
(a) Indemnification of the Underwriters and the Trust by the
Contracting Stockholders............................................... 23
(b) Indemnification of the Trust........................................... 25
(c) Actions against Parties; Notification.................................. 25
(d) Settlement without Consent if Failure to Reimburse..................... 26
(e) Conditions of Indemnification by the Contracting Stockholders.......... 26
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
SECTION 7. Contribution........................................................... 26
------------
SECTION 8. Representations, Warranties and Agreements to Survive Delivery......... 28
--------------------------------------------------------------
SECTION 9. Termination of Agreement............................................... 28
------------------------
(a) Termination; General................................................. 28
(b) Liabilities.......................................................... 28
SECTION 10. Default by One or More Underwriters.................................. 28
------------------------------------
SECTION 11. Notices.............................................................. 29
-------
SECTION 12. Parties.............................................................. 29
-------
SECTION 13. GOVERNING LAW AND TIME............................................... 30
----------------------
SECTION 14. Effect of Headings................................................... 30
------------------
</TABLE>
iii
<PAGE>
Snyder STRYPES Trust
(a Delaware business trust)
STRYPES/sm/
Exchangeable for Shares of Common Stock of Snyder Communications, Inc.
PURCHASE AGREEMENT
------------------
September __, 1997
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
GOLDMAN, SACHS & CO.
MORGAN STANLEY & CO. INCORPORATED
MONTGOMERY SECURITIES
BEAR, STEARNS & CO. INC.
as Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Snyder STRYPES Trust (such trust and the trustees thereof acting in their
capacities as such being referred to herein as the "Trust"), a statutory
business trust organized under the Business Trust Act (the "Delaware Act") of
the State of Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. C.
(Sections 3801 et seq.)), and D.M.S. Endowment, LLC, Sutton Partners, LLC, A.O.
Roberts, LLC and USN College Marketing, L.P. (each, a "Contracting Stockholder"
and, collectively, the "Contracting Stockholders"), confirm their respective
agreements with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch"), Goldman, Sachs & Co., Morgan Stanley & Co.
Incorporated, Montgomery Securities, Bear, Stearns & Co. Inc. and each of the
other Underwriters named in Schedule A hereto (collectively, the "Underwriters",
which term shall also include any underwriter substituted as provided in Section
10 hereof), for whom Merrill Lynch, Goldman, Sachs & Co.,
_________________________
(SM) Service mark of Merril Lynch & Co., Inc.
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Morgan Stanley & Co. Incorporated, Montgomery Securities and Bear, Stearns & Co.
Inc. are acting as representatives (in such capacity, the "Representatives"),
with respect to (i) the issue and sale by the Trust and the purchase by the
Underwriters, acting severally and not jointly, of the respective numbers of the
Trust's STRYPES/sm/ (each, a "STRYPES") set forth in Schedule A hereto, and (ii)
the grant by the Trust to the Underwriters, acting severally and not jointly, of
the option described in Section 2(b) hereof to purchase all or any part of
600,000 additional STRYPES to cover over-allotments, if any. The aforesaid
4,000,000 STRYPES (the "Initial Securities") to be purchased by the Underwriters
pursuant to this Agreement and all or any part of the 600,000 STRYPES subject to
the option described in Section 2(b) hereof (the "Option Securities") are
hereinafter called, collectively, the "Securities." The Securities are to be
issued pursuant to an Amended and Restated Trust Agreement, dated as of
September __, 1997, among the trustees of the Trust (the "Trustees") and ML IBK
Positions, Inc., as Sponsor (the "Trust Agreement").
The Trust, Snyder Communications, Inc., a Delaware corporation ("Snyder"),
Snyder Communications, L.P., a Delaware limited partnership (the "Partnership"),
and the Underwriters are concurrently entering into an agreement, dated the date
hereof (the "Registration Agreement"), relating to the registration of shares of
common stock, par value $.001 per share (the "Snyder Common Stock"), of Snyder
deliverable upon exchange of the STRYPES. The STRYPES will be exchanged for a
specified number of shares of Snyder Common Stock or, in certain circumstances,
cash, or a combination of cash and Snyder Common Stock, with an equal value,
upon conclusion of the term of the Trust on __________, 2000 (the "Exchange
Date") or upon earlier dissolution of the Trust in certain circumstances.
The Trust and the Contracting Stockholders understand that the Underwriters
propose to make a public offering of the Securities as soon as the
Representatives deem advisable after this Agreement has been executed and
delivered.
The Trust has filed with the Securities and Exchange Commission (the
"Commission") (i) a notification on Form N-8A (the "Notification") of
registration of the Trust as an investment company; and (ii) a registration
statement on Form N-2 (Nos. 333-33707 and 811-08337) for the registration of the
Securities under the Securities Act of 1933, as amended (the "1933 Act"), and
Pre-Effective Amendments No. 1 and No. 2 thereto, including a preliminary
prospectus relating to the offering of the Securities. Promptly after execution
and delivery of this Agreement, the Trust will either (i) prepare and file a
prospectus in accordance with the provisions of Rule 430A ("Rule 430A") of the
rules and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations") and paragraph (h) of Rule 497 ("Rule 497(h)") of the 1933 Act
Regulations or (ii) if the Trust has elected to rely upon Rule 434 ("Rule 434")
of the 1933 Act Regulations, prepare and file a term sheet (a "Trust Term
Sheet") in accordance with the provisions of Rule 434 and Rule 497(h). The
information included in such prospectus or in such Trust Term Sheet, as the case
may be, that was omitted from such registration statement (as so amended) at the
time it became effective but that is deemed to be part of such registration
statement (as so amended) at the time it became effective (i) pursuant to
paragraph (b) of Rule 430A is referred to as "Rule 430A Information" or (ii)
pursuant to paragraph (d) of Rule 434
__________________________
/sm/ Service mark of Merrill Lynch & Co., Inc.
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is referred to as "Rule 434 Information." Any prospectus relating to the
offering of the Securities used before such registration statement (as so
amended) became effective, and any prospectus relating to the offering of the
Securities that omitted, as applicable, the Rule 430A Information or the Rule
434 Information, that was used after such effectiveness and prior to the
execution and delivery of this Agreement, in each case excluding any Snyder
preliminary prospectus (as defined below) attached thereto, is herein called a
"Trust preliminary prospectus." Such registration statement (as so amended),
including the exhibits thereto and the schedules thereto, if any, at the time it
became effective and including the Rule 430A Information and the Rule 434
Information, as applicable, is herein called the "Trust Registration Statement."
Any registration statement filed by the Trust pursuant to Rule 462(b) of the
1933 Act Regulations is herein referred to as the "Trust Rule 462(b)
Registration Statement," and after such filing the term "Trust Registration
Statement" shall include the Trust Rule 462(b) Registration Statement. The
final prospectus relating to the offering of the Securities, excluding any
Snyder Prospectus (as defined below) attached thereto, in the form first
furnished to the Underwriters for use in connection with the offering of the
Securities is referred to herein as the "Trust Prospectus." If Rule 434 is
relied on, the term "Trust Prospectus" shall refer to the Trust preliminary
prospectus dated __________, 1997 together with the Trust Term Sheet and all
references in this Agreement to the date of the Trust Prospectus shall mean the
date of the Trust Term Sheet. For purposes of this Agreement, all references to
the Trust Registration Statement, any Trust preliminary prospectus, the Trust
Prospectus or any Trust Term Sheet or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the Commission pursuant
to its Electronic Data Gathering, Analysis and Retrieval system ("EDGAR").
Snyder has filed with the Commission a registration statement on Form S-1
(No. 333-33691), covering the resale under the 1933 Act of the shares of Snyder
Common Stock deliverable upon exchange of the Securities, and Pre-Effective
Amendments No. 1 and No. 2 thereto, including the related preliminary prospectus
or prospectuses. Each prospectus, based on the prospectus included in such
registration statement, used before such registration statement became effective
is herein called a "Snyder preliminary prospectus." Such registration statement,
including the exhibits thereto and the schedules thereto, if any, at the time it
became effective, is herein called the "Snyder Registration Statement." Any
registration statement filed by Snyder pursuant to Rule 462(b) of the 1933 Act
Regulations is herein referred to as the "Snyder Rule 462(b) Registration
Statement," and after such filing the term "Snyder Registration Statement" shall
include the Snyder Rule 462(b) Registration Statement. The final prospectus,
based on the prospectus included in the Snyder Registration Statement, in the
form first furnished to the Underwriters for use in connection with the offering
of the Securities is herein called the "Snyder Prospectus." For purposes of this
Agreement, all references to the Snyder Registration Statement, any Snyder
preliminary prospectus, the Snyder Prospectus or any amendment or supplement to
any of the foregoing shall be deemed (i) to include the copy filed with the
Commission pursuant to EDGAR and (ii) to exclude any prospectus or other portion
of Snyder's registration statement on Form S-1 (No. 333-33691) relating to the
offer and sale by Snyder and certain stockholders of Snyder of up to
shares of Snyder Common Stock in concurrent U.S. and international offerings,
but shall include any prospectus or other portion of such registration statement
relating to the Snyder Common Stock deliverable upon exchange of the STRYPES.
Concurrently with the execution and delivery of this Agreement, the Trust,
the Contracting Stockholders and The Bank of New York ("BONY"), as collateral
agent, will enter
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into a forward purchase contract (the "Forward Purchase Contract"), pursuant to
which the Contracting Stockholders will agree to sell and the Trust will agree
to purchase, immediately prior to the Exchange Date, the aggregate number of
shares of Snyder Common Stock required by the Trust to exchange all of the
Securities on the Exchange Date as described in the Trust Prospectus, subject to
the Contracting Stockholders' rights to satisfy their respective obligations
thereunder in whole or in part through cash payment based upon the value of the
shares of Snyder Common Stock otherwise deliverable (the "Forward Purchase").
Each Contracting Stockholder's obligations under the Forward Purchase Contract
will be secured by a pledge of collateral pursuant to the terms of a security
and pledge agreement (the "Security and Pledge Agreement") among the Contracting
Stockholders, the Trust and BONY, as collateral agent.
The public offering of the Securities is expected to close concurrently
with offerings of shares of Snyder Common Stock described in the Snyder
Registration Statement pursuant to a U.S. Purchase Agreement and an
International Purchase Agreement (the "U.S. Purchase Agreement" and the
"International Purchase Agreement," respectively).
SECTION 1. Representations and Warranties.
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(a) Representations and Warranties by the Trust. The Trust represents and
warrants to each Underwriter as of the date hereof, as of the Closing Time
referred to in Section 2(c) hereof, and as of each Date of Delivery (if any)
referred to in Section 2(b) hereof, and agrees with each Underwriter, as
follows:
(i) Compliance with Registration Requirements. Each of the Trust
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Registration Statement and any Trust Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Trust Registration Statement or any Trust Rule 462(b)
Registration Statement pursuant to Section 8(d) of the 1933 Act, or order
pursuant to Section 8(e) of the Investment Company Act of 1940, as amended
(the "1940 Act"), has been issued and no proceedings for either such
purpose have been instituted or are pending or, to the knowledge of the
Trust, are contemplated by the Commission, and any request on the part of
the Commission for additional information has been complied with.
At the respective times the Trust Registration Statement, any Trust
Rule 462(b) Registration Statement and any post-effective amendments
thereto became effective and at the Closing Time (and, if any Option
Securities are purchased, at the Date of Delivery), the Notification, the
Trust Registration Statement, the Trust Rule 462(b) Registration Statement
and any amendments and supplements thereto complied and will comply in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations and the 1940 Act and the rules and regulations of the
Commission under the 1940 Act (the "1940 Act Regulations"), and did not and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading. Neither the Trust Prospectus nor any
amendments or supplements thereto, at the time the Trust Prospectus or any
such amendment or supplement was issued and at the Closing Time (and, if
any Option Securities are purchased, at the Date of Delivery), included or
will include an untrue
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statement of a material fact or omitted or will omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If Rule 434 is
used, the Trust will comply with the requirements of Rule 434. The
representations and warranties in this subsection shall not apply to
statements in or omissions from the Trust Registration Statement (or any
amendments or supplements thereto) or the Trust Prospectus (or any
amendments or supplements thereto) made in reliance upon and in conformity
with information furnished to the Trust in writing by any Underwriter
through the Representatives expressly for use in the Trust Registration
Statement (or any amendments or supplements thereto) or Trust Prospectus
(or any amendments or supplements thereto).
Each Trust preliminary prospectus and the prospectus relating to the
offering of the Securities filed as part of the Trust Registration
Statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 497 under the 1933 Act, complied when so filed in all
material respects with the 1933 Act Regulations and the 1940 Act
Regulations, and, if applicable, each Trust preliminary prospectus and the
Trust Prospectus delivered to the Underwriters for use in connection with
the offering of the Securities was identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
(ii) Independent Accountants. The accountants who certified
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certain financial statements and supporting schedules included in the Trust
Registration Statement are independent public accountants as required by
the 1933 Act and the 1933 Act Regulations.
(iii) Financial Statement. The statement of assets, liabilities and
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capital included in the Trust Registration Statement and the Trust
Prospectus, together with the notes thereto, present fairly the financial
position of the Trust at the date indicated; said financial statement has
been prepared in conformity with generally accepted accounting principles.
(iv) No Material Adverse Change in Business. Since the respective
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dates as of which information is given in the Trust Registration Statement
and the Trust Prospectus, except as otherwise stated therein or
contemplated thereby, (A) there has been no material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs,
business prospects, management, investment objectives or investment
policies of the Trust, whether or not arising in the ordinary course of
business (a "Material Adverse Effect") and (B) there have been no
transactions entered into by the Trust, other than those in the ordinary
course of business, which are material with respect to the Trust.
(v) Good Standing of the Trust; No Subsidiaries. The Trust has
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been duly created and is validly existing as a business trust in good
standing under the Delaware Act with power and authority to own its
properties and to conduct its business as described in the Trust Prospectus
and to enter into and perform its obligations under this Agreement, the
Trust Agreement and the Forward Purchase Contract; the Trust is and
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will, under current law, be classified for United States federal income tax
purposes as a grantor trust and not as an association taxable as a
corporation; and the Trust has no subsidiaries.
(vi) Registration Under the 1940 Act. The Trust is registered with
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the Commission as a non-diversified, closed-end management investment
company under the 1940 Act. No order of suspension or revocation of such
registration has been issued or proceedings therefor initiated or, to the
knowledge of the Trust, threatened by the Commission. No person is serving
or acting as an officer or trustee of the Trust, except in accordance with
the provisions of the 1940 Act.
(vii) Outstanding STRYPES. All of the outstanding STRYPES have been
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duly and validly authorized and issued and are fully paid and non-
assessable undivided beneficial interests in the assets of the Trust; and
the form of certificate used to evidence the STRYPES is in due and proper
form and complies with all provisions of applicable law.
(viii) Authorization of Agreement. This Agreement has been duly
--------------------------
authorized, executed and delivered by the Trust. The performance of this
Agreement and the consummation of the transactions contemplated in this
Agreement and the Trust Registration Statement (including the issuance and
sale of the Securities and the use of the proceeds from the sale of the
Securities as described in the Prospectus under the caption "Use Of
Proceeds") and compliance by the Trust with its obligations under this
Agreement have been duly authorized by the Trust.
(ix) Authorization and Description of the Securities. The
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Securities have been duly authorized by the Trust for issuance and sale to
the Underwriters pursuant to this Agreement and, when issued and delivered
by the Trust pursuant to this Agreement against payment of the purchase
price therefor as provided herein, will be validly issued and fully paid
and non-assessable undivided beneficial interests in the assets of the
Trust; the STRYPES conform to all statements relating thereto contained in
the Trust Prospectus and such description conforms to the rights set forth
in the instruments defining the same; no holder of the Securities will be
subject to personal liability by reason of being such a holder; and the
issuance of the Securities is not subject to the preemptive or other
similar rights of any securityholder of the Trust.
(x) Authorization of Fundamental Agreements. Each of the Forward
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Purchase Contract, the Security and Pledge Agreement, the Administration
Agreement, to be dated September __, 1997, between the Trust and BONY (the
"Administration Agreement"), the Custodian Agreement, dated September __,
1997, between the Trust and BONY (the "Custodian Agreement"), the Paying
Agent Agreement, to be dated September __, 1997, between the Trust and BONY
(the "Paying Agent Agreement") and the Fund Indemnity Agreement, to be
dated September __, 1997, among the Trust, Merrill Lynch & Co., Inc. and
the Contracting Stockholders (the "Fund Indemnity Agreement") (the Forward
Purchase Contract, the Security and Pledge Agreement, the Administration
Agreement, the Custodian Agreement, the Paying Agent Agreement and the Fund
Indemnity Agreement are collectively referred to herein as the "Fundamental
Agreements"), has been duly authorized by the Trust and, at the Closing
Time, will have been duly executed and delivered by the Trust and (assuming
the due authorization, execution and delivery by the other parties thereto)
will constitute a valid and binding agreement of the Trust, enforceable
against the Trust in accordance with its terms, except as the enforcement
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thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights
generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(xi) Compliance with Acts. The Trust Agreement and the Fundamental
--------------------
Agreements comply with all applicable provisions of the 1933 Act and the
1940 Act, and all approvals of such documents required under the 1940 Act
by the holders of the STRYPES and the Trustees have been obtained and are
in full force and effect.
(xii) Description of Trust Agreement and Fundamental Agreements.
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The Trust Agreement and the Fundamental Agreements will conform in all
material respects to the respective statements relating thereto contained
in the Trust Prospectus and, to the extent forms thereof were filed as
exhibits to the Trust Registration Statement, will be in substantially the
respective forms so filed.
(xiii) Absence of Defaults and Conflicts. The execution, delivery
---------------------------------
and performance by the Trust of this Agreement and each Fundamental
Agreement and the consummation of the transactions contemplated herein,
therein and in the Trust Registration Statement (including the issuance and
sale of the Securities and the delivery of shares of Snyder Common Stock
pursuant thereto, the consummation of the Forward Purchase and the use of
the proceeds from the sale of the Securities as described in the Trust
Prospectus under the caption "Use of Proceeds") and compliance by the Trust
with its obligations hereunder, under the Securities and under each
Fundamental Agreement do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute a
breach of, or default or Repayment Event (as defined below) under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Trust pursuant to, any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease
or other agreement or instrument to which the Trust is a party or by which
it may be bound, or to which any of the property or assets of the Trust is
subject (collectively, "Agreements and Instruments") (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will such action result
in any violation of the provisions of the Trust Agreement or the trust
certificate of the Trust filed with the State of Delaware on August 5, 1997
or any applicable law, statute, rule or regulation of any government or
government instrumentality having jurisdiction over the Trust or any of its
assets, properties or operations (other than any state securities or "blue
sky" law, statute, rule or regulation, as to which no representation or
warranty is made), or any applicable judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Trust or any of its assets or properties
(except for such violations of any law, statute, rule, regulation,
judgment, order, writ or decree that would not result in a Material Adverse
Effect). As used herein, a "Repayment Event" means any event or condition
which gives the holder of any note, debenture or other evidence of
indebtedness of the Trust (or any person
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acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the
Trust.
(xiv) Absence of Proceedings. There is no action, suit,
----------------------
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending with respect
to which the Trust has received service of process, or, to the knowledge of
the Trust, threatened, against or affecting the Trust, which is required to
be disclosed in the Trust Registration Statement (other than as disclosed
therein), or which might, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect, or which might,
individually or in the aggregate, reasonably be expected to materially and
adversely affect the properties or assets thereof or the consummation of
the transactions contemplated in this Agreement or the Fundamental
Agreements (including the issuance and sale of the Securities and the
delivery of shares of Snyder Common Stock pursuant thereto and the
consummation of the Forward Purchase) or the performance by the Trust of
its obligations hereunder or thereunder; the aggregate of all pending legal
or governmental proceedings (with respect to which the Trust has received
service of process) to which the Trust is a party or of which any of its
property or assets is the subject which are not described in the Trust
Registration Statement, including ordinary routine litigation incidental to
the business, could not reasonably be expected to result in a Material
Adverse Effect.
(xv) No Investment Restrictions, etc. There are no material
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restrictions, limitations or regulations with respect to the ability of the
Trust to invest its assets as described in the Trust Prospectus, other than
as described therein.
(xvi) Exhibits. There are no contracts or documents which are
--------
of a character required to be described in the Trust Registration Statement
or the Trust Prospectus or to be filed as exhibits thereto which have not
been so described or filed as required.
(xvii) Absence of Further Requirements. No declaration or filing
-------------------------------
with, or authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the Trust to own and use its assets and to
conduct its business in the manner described in the Trust Prospectus or for
the performance by the Trust of its obligations under this Agreement, the
Trust Agreement or any Fundamental Agreement or the consummation by the
Trust of the transactions contemplated herein or therein (including the
issuance and sale of the Securities and the delivery of shares of Snyder
Common Stock pursuant thereto and the consummation of the Forward
Purchase), except such as have been already obtained or as may be required
under the 1933 Act or the 1933 Act Regulations or state securities laws.
(xviii) Title to Property. The Trust has good title to all
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properties owned by it, in each case, free and clear of all mortgages,
pledges, liens, security interests, claims, restrictions or encumbrances of
any kind except such as (A) are described in the Trust Prospectus or (B) do
not, singly or in the aggregate, materially affect the value of such
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property and do not interfere with the use made and proposed to be made of
such property by the Trust.
(b) Representations and Warranties by the Contracting Stockholders. Each
Contracting Stockholder severally represents and warrants to each of the
Underwriters and the Trust as of the date hereof, as of the Closing Time
referred to in Section 2(c) hereof, and as of each Date of Delivery (if any)
referred to in Section 2(b) hereof, and agrees with each of the Underwriters and
the Trust, as follows:
(i) Authority. Such Contracting Stockholder has the full right,
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power and authority to enter into this Agreement, the Fund Expense
Agreement, the Fund Indemnity Agreement, the Forward Purchase Contract and
the Security and Pledge Agreement to pledge and assign the shares of Snyder
Common Stock to be pledged and assigned by such Contracting Stockholder
pursuant to the Security and Pledge Agreement, and to sell, transfer and
deliver the shares of Snyder Common Stock to be sold by such Contracting
Stockholder pursuant to the Forward Purchase Contract.
(ii) Delivery of Snyder Common Stock. Such Contracting Stockholder
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is the sole registered owner of and has, and at the Closing Time (and, if
any Option Securities are purchased, at the Date of Delivery) will have,
all rights in and to the shares of Snyder Common Stock to be pledged and
assigned by such Contracting Stockholder pursuant to the Security and
Pledge Agreement, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity, other than those created
pursuant to the Security and Pledge Agreement. If immediately prior to the
Exchange Date such Contracting Stockholder delivers to the Trust shares of
Snyder Common Stock pursuant to the Forward Purchase Contract, upon
delivery by such Contracting Stockholder to the Trust of the shares of
Snyder Common Stock to be sold by such Contracting Stockholder pursuant to
the Forward Purchase Contract, assuming the Trust purchased for value in
good faith and without notice of any adverse claim, the Trust will have
acquired all rights in and to such shares of Snyder Common Stock, free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim
or equity. The sale, transfer and delivery of shares of Snyder Common
Stock by such Contracting Stockholder to the Trust as contemplated by the
Forward Purchase Contract is not, and at the time of delivery of such
shares will not be, subject to any right of first refusal or similar rights
of any person pursuant to any contract to which such Contracting
Stockholder is a party or by which it is bound.
(iii) Authorization of Agreement. This Agreement has been duly
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authorized, executed and delivered by such Contracting Stockholder. The
execution and delivery of this Agreement and the sale and delivery of the Snyder
Common Stock to be sold by such Contracting Stockholder and the consummation of
the transactions contemplated herein and in the Trust Registration Statement and
compliance by such Contracting Stockholder with its obligations hereunder have
been duly authorized by each Contracting Stockholder that is not an individual
and do not and will not, whether with or without the giving of notice or passage
of time or both, result in the creation or imposition of any tax, lien, charge
or encumbrance upon the Snyder Common Stock to be sold by such Contracting
Stockholder, nor will such action result in any violation of the provisions of
the charter or by-laws or other organizational instrument of such Contracting
Stockholder, if applicable, or, to the best of such Contracting Stockholder's
knowledge, any applicable treaty, law, statute, rule, regulation, judgement,
order, writ or decree of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over such Contracting Stockholder or
any of its properties.
(iv) Authorization of the Forward Purchase Contract and the
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Security and Pledge Agreement. Each of the Forward Purchase Contract and
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the Security and Pledge Agreement has been duly authorized by such
Contracting Stockholder and, at the Closing Time, will have been duly
executed and delivered by such Contracting Stockholder and (assuming the
due authorization, execution and delivery by the other parties thereto)
will constitute a valid and binding agreement of such Contracting
Stockholder, enforceable against such Contracting Stockholder in accordance
with its terms, except as the
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enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law). Amounts received by such
Contracting Stockholder at Closing Time and at each Date of Delivery, if
any, pursuant to the Forward Purchase Contract will not be used by such
Contracting Stockholder for the purpose, whether immediate, incidental or
ultimate, of buying or carrying a margin stock, as such terms are defined
in Regulation G promulgated by the Board of Governors of the Federal
Reserve System.
(v) Absence of Defaults and Conflicts. The execution, delivery and
---------------------------------
performance by such Contracting Stockholder of this Agreement, the Forward
Purchase Contract and the Security and Pledge Agreement and the
consummation by such Contracting Stockholder of the transactions
contemplated herein and therein and compliance by such Contracting
Stockholder with its obligations hereunder and thereunder do not and will
not, whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default or Stockholder
Repayment Event (as defined below) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets
of such Contracting Stockholder pursuant to, any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or any other
agreement or instrument to which such Contracting Stockholder is a party or
by which it may be bound, or to which any of the property or assets of such
Contracting Stockholder is subject (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not, singly or in the
aggregate, materially and adversely affect the ability of such Contracting
Stockholder to perform its obligations under this Agreement, the Forward
Purchase Contract or the Security and Pledge Agreement), nor will such
action result in any violation of any applicable law, statute, rule or
regulation of any government or government instrumentality having
jurisdiction over such Contracting Stockholder or any of its assets,
properties or operations (other than any state securities or "blue sky"
law, statute, rule or regulation, as to which no representation and
warranty is made), or any applicable judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over such Contracting Stockholder or any of its assets,
properties or operations (except in all cases for such violations that
would not, singly or in the aggregate, materially and adversely affect the
ability of such Contracting Stockholder to perform its obligations under
this Agreement, the Forward Purchase Contract or the Security and Pledge
Agreement). As used herein, a "Stockholder Repayment Event" with respect
to any Contracting Stockholder means any event or condition which gives the
holder of any note, debenture or other evidence of indebtedness (or any
person acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by such
Contracting Stockholder.
(vi) Absence of Further Requirements. No declaration or filing with,
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or authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the execution,
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delivery or performance by such Contracting Stockholder of this Agreement,
the Forward Purchase Contract or the Security and Pledge Agreement or the
consummation by such Contracting Stockholder of the transactions
contemplated herein or therein, except such as have been already obtained
or as may be required under the 1933 Act or the 1933 Act Regulations or
state securities laws.
(vii) Trust Registration Statement and Prospectus. At the
-------------------------------------------
respective times the Trust Registration Statement, any Trust Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), the Notification, the Trust
Registration Statement, the Trust Rule 462(b) Registration Statement and
any amendments and supplements thereto complied and will comply in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations and the 1940 Act and the 1940 Act Regulations, and did not and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading. Neither the Trust Prospectus nor any
amendments or supplements thereto, at the time the Trust Prospectus or any
such amendment or supplement was issued and at the Closing Time (and, if
any Option Securities are purchased, at the Date of Delivery), included or
will include an untrue statement of a material fact or omitted or will omit
to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading. The representations and warranties in this subsection shall not
apply to statements in or omissions from the Trust Registration Statement
(or any amendments or supplements thereto) or the Trust Prospectus (or any
amendments or supplements thereto) made in reliance upon and in conformity
with information furnished to the Trust in writing by any Underwriter
through the Representatives expressly for use in the Trust Registration
Statement (or any amendments or supplements thereto) or Trust Prospectus
(or any amendments or supplements thereto).
Each Trust preliminary prospectus and the prospectus relating to the
offering of the Securities filed as part of the Trust Registration
Statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 497 under the 1933 Act, complied when so filed in all
material respects with the 1933 Act Regulations and the 1940 Act
Regulations.
(viii) Snyder Registration Statement and Prospectus. The Snyder
--------------------------------------------
Registration Statement, any Snyder Rule 462(b) Registration Statement or
any post-effective amendments thereto, at the respective times the Snyder
Registration Statement, any Snyder Rule 462(b) Registration Statement or
any post-effective amendments thereto became effective, did not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading. The Snyder Prospectus or any amendment or supplement
thereto, at the time the Snyder Prospectus was issued, at the time any such
amended or supplemented prospectus was issued or at the Closing Time (and,
if any Option Securities are purchased, at the Date of Delivery), did not
and will not include an untrue statement of a material fact and did not and
will not omit to state a material fact necessary in order
11
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to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The representations and warranties
in this subsection shall apply only to statements in or omissions from the
Snyder Registration Statement (or any amendment thereto) or the Snyder
Prospectus (or any amendment or supplement thereto) made in reliance upon
and in conformity with information furnished to Snyder in writing by such
Contracting Stockholder expressly for use in the Snyder Registration
Statement (or any amendment thereto) or the Snyder Prospectus (or any
amendment or supplement thereto).
(ix) Security and Pledge Agreement. The representations and
-----------------------------
warranties of such Contracting Stockholder set forth in Section 8(a) of the
Security and Pledge Agreement are true and correct on and as of the date
hereof with the same effect as though such representations and warranties
had been set forth in full in this Agreement.
(c) Officer's Certificates. Any certificate signed by any Trustee of the
Trust delivered to the Representatives or counsel for the Underwriters shall be
deemed a representation and warranty by the Trust to the Underwriters as to the
matters covered thereby. Any certificate signed by or on behalf of any
Contracting Stockholder delivered to the Representatives or counsel to the
Underwriters or to the Trust or counsel to the Trust shall be deemed a
representation and warranty by such Contracting Stockholder to the Underwriters
or the Trust, as the case may be, as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
------------------------------------------
(a) Initial Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Trust agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Trust, at
the price per STRYPES set forth in Schedule B, the number of Initial Securities
set forth in Schedule A opposite the name of such Underwriter, plus any
additional number of Initial Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Trust hereby grants an option to the Underwriters, severally and
not jointly, to purchase up to an additional [600,000] STRYPES at the price per
STRYPES set forth in Schedule B. The option hereby granted will expire 30 days
after the date hereof and may be exercised in whole or in part from time to time
only for the purpose of covering over-allotments which may be made in connection
with the offering and distribution of the Initial Securities upon notice by the
Representatives to the Trust setting forth the number of Option Securities as to
which the several Underwriters are then exercising the option and the time and
date of payment and delivery for such Option Securities. Any such time and date
of delivery (a "Date of Delivery") shall be determined by the Representatives,
but shall not be later than seven full business days (or, in the case of any
exercise of said option by notice given after the Closing Time (as hereinafter
defined), earlier than two full business days) after the exercise of said
option, nor in any event prior to the Closing Time. If the option is exercised
as to all or any portion of the Option Securities, each
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of the Underwriters, acting severally and not jointly, will purchase that
proportion of the total number of Option Securities then being purchased which
the number of Initial Securities set forth in Schedule A opposite the name of
such Underwriter bears to the total number of Initial Securities, subject in
each case to such adjustments as the Representatives in their discretion shall
make to eliminate any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Brown
& Wood LLP, One World Trade Center, New York, New York 10048 or at such other
place as shall be agreed upon by the Representatives and the Trust, at 9:00 A.M.
(Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M.
(Eastern time) on any given day) business day after the date hereof, or such
other time not later than ten business days after such date as shall be agreed
upon by the Representatives and the Trust (such time and date of payment and
delivery being herein called "Closing Time"). In addition, in the event that
any or all of the Option Securities are purchased by the Underwriters, payment
of the purchase price for, and delivery of certificates for, such Option
Securities shall be made at the above-mentioned offices, or at such other place
as shall be agreed upon by the Representatives and the Trust, on each Date of
Delivery as specified in the notice from the Representatives to the Trust.
Payment shall be made to the Trust by wire transfer of immediately
available funds to a bank account designated by the Trust, against delivery to
the Representatives for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Securities which it has agreed to purchase. Merrill Lynch, individually and not
as representative of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Initial Securities or the Option
Securities, if any, to be purchased by any Underwriter whose funds have not been
received by the Closing Time or the relevant Date of Delivery, as the case may
be, but such payment shall not relieve such Underwriter from its obligations
hereunder.
(d) Denominations; Registration. Certificates for the Initial Securities
and the Option Securities, if any, shall be in such denominations and registered
in such names as the Representatives may request in writing at least one full
business day before the Closing Time or the relevant Date of Delivery, as the
case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
SECTION 3. Covenants.
---------
(a) Covenants of the Trust. The Trust covenants with each Underwriter as
follows:
(i) Compliance with Securities Regulations and Commission Requests.
The Trust, subject to Section 3(a)(ii), will comply with the requirements
of Rule 430A or Rule 434, as applicable, and will notify the
Representatives immediately, and confirm the notice in writing, (A) when
any post-effective amendment to the Trust Registration
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<PAGE>
Statement shall become effective, or any supplement to the Trust Prospectus
or any amended Trust Prospectus shall have been filed, (B) of the receipt
of any comments from the Commission, (C) of any request by the Commission
for any amendment to the Trust Registration Statement or any amendment or
supplement to the Trust Prospectus or for additional information, and (D)
of the issuance by the Commission of any stop order suspending the
effectiveness of the Trust Registration Statement or of any order
preventing or suspending the use of any Trust preliminary prospectus or any
order pursuant to Section 8(e) of the 1940 Act, or of the suspension of the
qualification of the Securities for offering or sale in any jurisdiction,
or of the initiation or threatening of any proceedings for any of such
purposes. The Trust will promptly effect the filings necessary pursuant to
Rule 497(h) and will take such steps as it deems necessary to ascertain
promptly whether the form of prospectus transmitted for filing under Rule
497(h) was received for filing by the Commission and, in the event that it
was not, it will promptly file such prospectus. The Trust will make every
reasonable effort to prevent the issuance of any stop order pursuant to
Section 8(d) of the 1933 Act or any order pursuant to Section 8(e) of the
1940 Act and, if any such order is issued, to obtain the lifting thereof at
the earliest possible moment.
(ii) Filing of Amendments. The Trust will give the Representatives
notice of its intention to file or prepare any amendment to the Trust
Registration Statement (including any filing under Rule 462(b)), any Trust
Term Sheet or any amendment, supplement or revision to either the
prospectus relating to the offering of the Securities included in the Trust
Registration Statement at the time it became effective or to the Trust
Prospectus, whether pursuant to the 1933 Act, the 1940 Act or otherwise,
will furnish the Representatives with copies of any such documents a
reasonable amount of time prior to such proposed filing or use, as the case
may be, and will not file or use any such document to which the
Representatives or counsel for the Underwriters shall reasonably object.
(iii) Delivery of Trust Registration Statements. The Trust has
furnished or will deliver to the Representatives and counsel for the
Underwriters, without charge, signed copies of the Trust Registration
Statement as originally filed and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein) and signed
copies of all consents and certificates of experts, and will also deliver
to the Representatives, without charge, a conformed copy of the Trust
Registration Statement as originally filed and of each amendment thereto
(without exhibits) for each of the Underwriters. If applicable, the copies
of the Trust Registration Statement and each amendment thereto furnished to
the Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(iv) Delivery of Trust Prospectuses. The Trust has delivered to each
Underwriter, without charge, as many copies of each Trust preliminary
prospectus as such Underwriter reasonably requested, and the Trust hereby
consents to the use of such copies for purposes permitted by the 1933 Act.
The Trust will furnish to each Underwriter, without charge, during the
period when the Trust Prospectus is required to
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<PAGE>
be delivered under the 1933 Act or the 1934 Act, such number of copies of
the Trust Prospectus (as amended or supplemented) as such Underwriter may
reasonably request. If applicable, the Trust Prospectus and any amendments
or supplements thereto furnished to the Underwriters will be identical to
the electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(v) Continued Compliance with Securities Laws. The Trust will comply
with the 1933 Act and the 1933 Act Regulations, the 1934 Act and the 1934
Act Regulations, and the 1940 Act and the 1940 Act Regulations so as to
permit the completion of the distribution of the Securities as contemplated
in this Agreement and in the Trust Prospectus. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with
sales of the Securities, any event shall occur or condition shall exist as
a result of which it is necessary, in the opinion of counsel for the
Underwriters or for the Trust, to amend the Trust Registration Statement or
amend or supplement the Trust Prospectus in order that the Trust Prospectus
will not include any untrue statements of a material fact or omit to state
a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of
either such counsel, at any such time to amend the Trust Registration
Statement or amend or supplement the Trust Prospectus in order to comply
with the requirements of the 1933 Act or the 1933 Act Regulations or the
1940 Act or the 1940 Act Regulations, the Trust will promptly prepare and
file with the Commission, subject to Section 3(a)(ii), such amendment or
supplement as may be necessary to correct such statement or omission or to
make the Trust Registration Statement or the Trust Prospectus comply with
such requirements, and the Trust will furnish to the Underwriters such
number of copies of such amendment or supplement as the Underwriters may
reasonably request.
(vi) Blue Sky Qualifications. The Trust will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities for offering
and sale under the applicable securities laws of such states and other
jurisdictions of the United States as the Representatives may designate and
to maintain such qualifications in effect for a period of not less than one
year from the later of the effective date of the Trust Registration
Statement and any Trust Rule 462(b) Registration Statement; provided,
however, that the Trust shall not be obligated to file any general consent
to service of process or to qualify as a foreign trust or association or as
a dealer in securities in any jurisdiction in which it is not so qualified
or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. In each jurisdiction
in which the Securities have been so qualified, the Trust will file such
statements and reports as may be required by the laws of such jurisdiction
to continue such qualification in effect for a period of not less than one
year from the effective date of the Trust Registration Statement and any
Trust Rule 462(b) Registration Statement.
(vii) Rule 158. The Trust will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon
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<PAGE>
as practicable an earnings statement for the purposes of, and to provide
the benefits contemplated by, the last paragraph of Section 11(a) of the
1933 Act.
(viii) Use of Proceeds. The Trust will use the net proceeds received
by it from the sale of the Securities in the manner specified in the Trust
Prospectus under "Use of Proceeds."
(ix) Listing. The Trust will use its best efforts to effect and
maintain the listing of the Securities on the New York Stock Exchange.
(x) Reporting Requirements. The Trust, during the period when the
Trust Prospectus is required to be delivered under the 1933 Act or the 1934
Act, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act
and the 1934 Act Regulations and all documents required to be filed with
the Commission pursuant to the 1940 Act within the time periods required by
the 1940 Act and the 1940 Act Regulations.
(b) Covenants of the Contracting Stockholders. Each Contracting
Stockholder covenants with each Underwriter and the Trust as follows:
(i) Restriction on Sale of Securities. During a period of 90 days
----------------------------------
from the date of the Trust Prospectus, such Contracting Stockholder will
not, without the prior written consent of the Merrill Lynch, (x) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant
to purchase or otherwise transfer or dispose of, directly or indirectly,
any shares of Snyder Common Stock or any securities convertible into or
exercisable or exchangeable for Snyder Common Stock or file any
registration statement under the 1933 Act with respect to any of the
foregoing or (y) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly,
the economic consequence of ownership of the Snyder Common Stock, whether
any such swap or transaction described in clause (x) or (y) above is to be
settled by delivery of Snyder Common Stock or such other securities, in
cash or otherwise; provided that any Contracting Stockholder may, at any
--------
time after 30 days from the date of the Closing Time, pledge as security
for borrowed money (1) up to _____% of the shares of Snyder Common Stock
then owned by such Contracting Stockholder to any commercial banking
institution that is a member of the Federal Reserve System or any
institutional lender that makes loans secured by margin securities in the
ordinary course of business having combined capital and surplus in excess
of $500,000,000 (a "Pledgee") as long as such Pledgee shall have agreed in
writing to be bound by the obligations and restrictions applicable to the
Snyder Common Stock under this Section 3(b)(i) and Merrill Lynch shall have
received an agreement substantially in the form of Exhibit G hereto signed
by such Pledgee. The foregoing sentence shall not apply to the execution
and delivery by such Contracting Stockholder of the Forward Purchase
Contract or the consummation by such Contracting Stockholder of the
transactions contemplated therein or the sale of the other Snyder Common
Stock registered under the Snyder Registration Statement.
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(ii) Purpose Statement. At or prior to Closing Time, such Contracting
-----------------
Stockholder will deliver to the Trust a duly executed purpose statement on
Form F. R. G-3 of the Board of Governors of the Federal Reserve System.
SECTION 4. Payment of Expenses. (a) Expenses Payable by the Contracting
-------------------
Stockholders. The Contracting Stockholders, jointly and severally, will pay all
expenses incident to the performance by the Trust and each Contracting
Stockholder of their respective obligations under this Agreement and the
Registration Agreement, including (i) the preparation, printing and filing of
the Notification and the Trust Registration Statement (including financial
statements and exhibits) as originally filed and of each amendment thereto, (ii)
the preparation, printing and delivery to the Underwriters of this Agreement,
the Forward Purchase Contract and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the
Securities, (iii) the preparation, issuance and delivery of the certificates for
the Securities to the Underwriters, (iv) the fees and disbursements of the
Trust's counsel, accountants and other advisors, (v) the fees and disbursements
of the Contracting Stockholders' counsel and other advisors, (vi) the
qualification of the Securities under securities laws in accordance with the
provisions of Section 3(a)(vi) hereof, including filing fees and the reasonable
fees and disbursements of the counsel for the Underwriters in connection
therewith and in connection with the preparation of the Blue Sky Survey and any
supplement thereto, (vii) the printing and delivery to the Underwriters of
copies of each Trust preliminary prospectus, any Trust Term Sheets and of the
Trust Prospectus and any amendments or supplements thereto, (viii) the
preparation, printing and delivery to the Underwriters of copies of the Blue Sky
Survey and any supplement thereto, (ix) the fees and expenses of any transfer
agent or registrar for Securities, (x) the filing fees incident to, and the
reasonable fees and disbursements of counsel to the Underwriters in connection
with, securing any required review by the National Association of Securities
Dealers, Inc. (the "NASD") of the terms of the sale of the Securities and (xi)
the fees and expenses incurred in connection with the listing of the Securities
on the New York Stock Exchange.
(b) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Contracting Stockholders, jointly and severally, shall
reimburse the Underwriters for all of their out-of-pocket expenses, including
the reasonable fees and disbursements of counsel for the Underwriters.
(c) Allocation of Expenses. The provisions of this Section 4 shall not
affect any agreement that the Contracting Stockholders may make for the sharing
of the costs and expenses to be borne by them pursuant to this Section 4.
SECTION 5. Conditions.
----------
(a) Conditions of Underwriters' Obligations. The obligations of the
several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Trust and the Contracting Stockholders
contained in Sections 1(a) and 1(b) hereof, respectively, to the accuracy of the
representations and warranties of Snyder and the Partnership contained in the
Registration Agreement, to the accuracy of the statements in certificates of any
Trustee
17
<PAGE>
of the Trust, any officer of Snyder or the Partnership or by or on behalf of any
Contracting Stockholder delivered pursuant to the provisions hereof, to the
performance by the Trust and the Contracting Stockholders of their respective
covenants and other obligations hereunder, to the performance by Snyder and the
Partnership of their respective covenants and other obligations under the
Registration Agreement, and to the following further conditions:
(1) Effectiveness of Trust Registration Statement. The Trust
Registration Statement, including any Trust Rule 462(b) Registration
Statement, has become effective and at Closing Time no stop order
suspending the effectiveness of the Trust Registration Statement pursuant
to Section 8(d) of the 1933 Act, or order pursuant to Section 8(e) of the
1940 Act, shall have been issued and no proceedings therefor shall have
been initiated or threatened by the Commission, and any request on the part
of the Commission for additional information shall have been complied with
to the reasonable satisfaction of counsel to the Underwriters. A
prospectus containing the Rule 430A Information shall have been filed with
the Commission in accordance with Rule 497(h) (or a post-effective
amendment providing such information shall have been filed and declared
effective in accordance with the requirements of Rule 430A) or, if the
Trust has elected to rely upon Rule 434, a Trust Term Sheet shall have been
filed with the Commission in accordance with Rule 497(h).
(2) Effectiveness of Snyder Registration Statement. The Snyder
Registration Statement, including any Snyder Rule 462(b) Registration
Statement, has become effective and at Closing Time no stop order
suspending the effectiveness of the Snyder Registration Statement shall
have been issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission, and any request on the part of the Commission
for additional information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriters.
(3) Opinion of Counsel for the Trust. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
Closing Time, of Brown & Wood llp, counsel for the Trust, in form and
substance reasonably satisfactory to counsel for the Underwriters, together
with signed or reproduced copies of such opinion for each of the other
Underwriters, to the effect set forth in Exhibit A hereto. In giving such
opinion such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York and the federal
law of the United States, upon the opinions of counsel satisfactory to the
Representatives. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper,
upon certificates of the Trustees and certificates of public officials.
(4) Opinion of Special Delaware Counsel for the Trust. At Closing
Time, the Representatives shall have received the favorable opinion, dated
as of Closing Time, of Richards, Layton & Finger, special Delaware counsel
for the Trust, in form and substance reasonably satisfactory to counsel for
the Underwriters, together with signed or reproduced copies of such opinion
for each of the other Underwriters, to the effect set forth in Exhibit B
hereto. Such counsel may also state that, insofar as such opinion
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<PAGE>
involves factual matters, they have relied, to the extent they deem proper,
upon certificates of the Trustees and certificates of public officials.
(5) Opinion of Counsel for the Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
Closing Time, of Debevoise & Plimpton, counsel for the Underwriters, in
form and substance reasonably satisfactory to the Representatives, together
with signed or reproduced copies of such opinion for each of the other
Underwriters, to the effect set forth in Exhibit C hereto. In giving such
opinion such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York, the federal law
of the United States and the General Corporation Law and Revised Uniform
Limited Partnership Act of the State of Delaware, upon the opinions of
counsel satisfactory to the Representatives. Such counsel may also state
that, insofar as such opinion involves factual matters, they have relied,
to the extent they deem proper, upon certificates of officers of Snyder and
its subsidiaries and certificates of public officials.
(6) Opinion of Counsel for Snyder. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
Closing Time, of Shaw, Pittman, Potts & Trowbridge, counsel for Snyder, in
form and substance reasonably satisfactory to counsel for the Underwriters,
together with signed or reproduced copies of such opinion for each of the
other Underwriters, to the effect set forth in Exhibit D hereto. In giving
such opinion such counsel may rely, as to all matters governed by the laws
of jurisdictions other than the law of the State of New York, the federal
law of the United States and the General Corporation Law and the Revised
Uniform Limited Partnership Act of the State of Delaware, upon the opinions
of counsel satisfactory to the Representatives. Such counsel may also
state that, insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of officers of
Snyder and its subsidiaries and certificates of public officials.
(7) Opinion of Counsel for the Contracting Stockholders. At Closing
Time, the Representatives shall have received the favorable opinion, dated
as of Closing Time, of Shaw, Pittman, Potts & Trowbridge, counsel for the
Contracting Stockholders, in form and substance reasonable satisfactory to
counsel for the Underwriters, together with signed or reproduced copies of
such opinion for each of the other Underwriters, to the effect set forth in
Exhibit E hereto. In giving such opinion such counsel may rely, as to all
matters governed by the laws of jurisdictions other than the law of the
State of New York, the federal law of the United States and the General
Corporation Law, the Revised Uniform Limited Partnership Act and the
Limited Liability Company Act of the State of Delaware, upon the opinions
of counsel satisfactory to the Representatives. Such counsel may also state
that, insofar as such opinion involves factual matters, they have relied,
to the extent they deem proper, upon certificates of the Contracting
Stockholders or officers of Snyder and its subsidiaries and certificates of
public officials.
(8) Managing Trustee's Certificate. At Closing Time, there shall not
have been, since the date hereof or since the respective dates as of which
information is given in the Trust Prospectus, any material adverse change
in the condition, financial or
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<PAGE>
otherwise, or in the earnings, business affairs, business prospects,
management, investment objectives or investment policies of the Trust,
whether or not arising in the ordinary course of business, and the
Representatives shall have received a certificate of the Managing Trustee,
dated as of Closing Time, to the effect that (i) there has been no such
material adverse change, (ii) the representations and warranties in Section
1(a) hereof are true and correct with the same force and effect as though
expressly made at and as of Closing Time, (iii) the Trust has complied with
all agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to Closing Time, and (iv) no stop order suspending
the effectiveness of the Trust Registration Statement pursuant to Section
8(d) of the 1933 Act, or order pursuant to Section 8(e) of the 1940 Act,
has been issued and no proceedings for that purpose have been instituted or
are pending or are contemplated by the Commission.
(9) Snyder and Partnership Officers' Certificate. At Closing Time,
there shall not have been, since the date hereof or since the respective
dates as of which information is given in the Snyder Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of Snyder and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, and the Representatives shall have received a
certificate of each of (i) the Chairman of the Board, President or a Vice
President of Snyder and of the chief financial or chief accounting officer
of Snyder and (ii) the President or a Vice President of the Partnership and
of the chief financial or chief accounting officer of the Partnership, in
each case dated as of Closing Time, to the effect that (i) there has been
no such material adverse change, (ii) the representations and warranties of
Snyder and the Partnership contained in Section 1(a) of the Registration
Agreement are true and correct with the same force and effect as though
expressly made at and as of Closing Time, (iii) Snyder or the Partnership,
as the case may be, has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to Closing
Time pursuant to the Registration Agreement, and (iv) no stop order
suspending the effectiveness of the Snyder Registration Statement has been
issued and no proceedings for that purpose have been instituted or, to the
best of their knowledge, are pending or are contemplated by the Commission.
(10) Certificates of Contracting Stockholders. At Closing Time, the
Representatives shall have received a certificate by or on behalf of each
Contracting Stockholder, dated as of Closing Time, to the effect that (i)
the representations and warranties of such Contracting Stockholder
contained in Section 1(b) hereof are true and correct with the same force
and effect as though expressly made at and as of Closing Time and (ii) such
Contracting Stockholder has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to Closing
Time.
(11) Snyder Accountant's Comfort Letter. At the time of the execution
of this Agreement, the Representatives shall have received from each of
Arthur Andersen LLP a letter dated such date, in form and substance
satisfactory to counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the
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<PAGE>
other Underwriters, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information
contained in the Snyder Registration Statement and the Snyder Prospectus.
(12) Snyder Bring-down Comfort Letter. At Closing Time, the
Representatives shall have received from each of Arthur Andersen LLP a
letter, dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished by them pursuant to Section
5(a)(11) hereof, except that the "specified date" referred to shall be a
date not more than three business days prior to Closing Time.
(13) Approval of Listing. At Closing Time, the Securities shall have
been approved for listing on the New York Stock Exchange, subject only to
official notice of issuance.
(14) No Objection. The NASD shall not have raised any objection with
respect to the fairness and reasonableness of the underwriting terms and
arrangements.
(15) Lock-up Agreements. At the date of this Agreement, the
Representatives shall have received an agreement substantially in the form
of Exhibit F hereto signed by each of the persons and entities listed on
Schedule C hereto.
(16) Fundamental Agreements. Each Fundamental Agreement shall have
been executed and delivered by all parties thereto, and each Contracting
Stockholder shall have delivered to the Collateral Agent the number of
shares of Snyder Common Stock required by the Security and Pledge Agreement
to be initially pledged and assigned by such Contracting Stockholder
thereunder in accordance with the requirements of the Security and Pledge
Agreement.
(17) Inducement Letters. At Closing Time, the Representatives shall
have received an agreement substantially in the form of Exhibit H hereto
signed by each of the members and partners of the Contracting
Stockholders.
(18) Conditions to Purchase of Option Securities. In the event that
the Underwriters exercise their option provided in Section 2(b) hereof to
purchase all or any portion of the Option Securities, the representations
and warranties of the Trust and the Contracting Stockholders contained
herein, the representations and warranties of Snyder and the Partnership
contained in the Registration Agreement and the statements in any
certificates furnished by the Trust, Snyder, the Partnership or the
Contracting Stockholders hereunder shall be true and correct as of each
Date of Delivery and, at the relevant Date of Delivery, the Representatives
shall have received:
(A) Managing Trustee's Certificate. A certificate, dated such Date
------------------------------
of Delivery, of the Managing Trustee confirming that the certificate
delivered at Closing Time pursuant to Section 5(a)(8) hereof is true
and correct as of such Date of Delivery.
21
<PAGE>
(B) Officers' Certificates. Certificates, dated such Date of
----------------------
Delivery, of the President or a Vice President of Snyder and of the
chief financial or chief accounting officer of Snyder and of the
President or a Vice President of the Partnership and of the chief
financial or chief accounting officer of the Partnership confirming
that the respective certificates delivered at Closing Time pursuant to
Section 5(a)(9) hereof are true and correct as of such Date of
Delivery.
(C) Certificates of Contracting Stockholders. Certificates, dated
----------------------------------------
such Date of Delivery, by or on behalf of each Contracting Stockholder
confirming that the certificate delivered by or on behalf of such
Contracting Stockholder at Closing Time pursuant to Section 5(a)(10)
hereof is true and correct as of such Date of Delivery.
(D) Opinion of Counsel for the Trust. The favorable opinion of Brown
--------------------------------
& Wood llp, counsel for the Trust, in form and substance satisfactory
to counsel for the Underwriters, dated such Date of Delivery, relating
to the Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion delivered pursuant to
Section 5(a)(3) hereof.
(E) Opinion of Special Delaware Counsel for the Trust. The favorable
-------------------------------------------------
opinion of Richards, Layton & Finger, special Delaware counsel for the
Trust, in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the opinion delivered pursuant to Section 5(a)(4)
hereof.
(F) Opinion of Counsel for the Underwriters. The favorable opinion
---------------------------------------
of Debevoise & Plimpton, counsel for the Underwriters, in form and
substance satisfactory to the Representatives, dated such Date of
Delivery, relating to the Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the opinion
delivered pursuant to Section 5(a)(5) hereof.
(G) Opinion of Counsel for Snyder. The favorable opinion of Shaw,
-----------------------------
Pittman, Potts & Trowbridge, counsel for Snyder, in form and substance
satisfactory to counsel for the Underwriters, dated such Date of
Delivery, to the same effect as the opinion delivered pursuant to
Section 5(a)(6) hereof.
(H) Opinion of Counsel for the Contracting Stockholders. The
----------------------------------------------------
favorable opinion of Shaw, Pittman, Potts & Trowbridge, counsel for
the Contracting Stockholders, in form and substance satisfactory to
counsel for the Underwriters, dated such Date of Delivery, to the same
effect as the opinion delivered pursuant to Section 5(a)(7) hereof.
(I) Snyder Bring-down Comfort Letter. A letter from each of Arthur
--------------------------------
Andersen LLP, in form and substance satisfactory to counsel for the
Underwriters and dated
22
<PAGE>
such Date of Delivery, substantially the same in form and substance as
the letter furnished to the Underwriters pursuant to Section 5(a)(12)
hereof, except that the "specified date" in the letter furnished
pursuant to this paragraph shall be a date not more than five days
prior to such Date of Delivery.
(19) Additional Documents. At Closing Time and at each Date of
Delivery, counsel for the Underwriters shall have been furnished with such
documents and opinions as they may require for the purpose of enabling them
to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
contained herein or in the Registration Agreement; and all proceedings
taken by the Trust in connection with the issuance and sale of the
Securities as herein contemplated shall be satisfactory in form and
substance to the Representatives and counsel for the Underwriters.
(b) Termination of Agreement. If any condition specified in subsection (a)
of this Section shall not have been fulfilled when and as required to be
fulfilled, this Agreement, or, in the case of any condition to the purchase of
Option Securities on a Date of Delivery which is after the Closing Time, the
obligations of the Underwriters to purchase the relevant Option Securities, may
be terminated by the Representatives by notice to the Trust and the Contracting
Stockholders at any time at or prior to Closing Time or such Date of Delivery,
as the case may be, and such termination shall be without liability of any party
to any other party except as provided in Section 4 and except that Sections 1,
6, 7 and 8 shall survive any such termination and remain in full force and
effect.
SECTION 6. Indemnification.
---------------
(a) Indemnification of the Underwriters and the Trust by the Contracting
Stockholders. Subject to Section 6(e) below, the Contracting Stockholders,
jointly and severally, agree to indemnify and hold harmless each Underwriter,
the Trust and each person, if any, who controls any Underwriter or the Trust
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act,
as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Trust Registration
Statement (or any amendment thereto), including the Rule 430A Information
and the Rule 434 Information, if applicable, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact
contained in any Trust preliminary prospectus or the Trust Prospectus (or
any amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
23
<PAGE>
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Snyder Registration
Statement (or any amendment thereto), or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
Snyder preliminary prospectus or the Snyder Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(iii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, referred to under (i) or (ii) above;
provided that (subject to Section 6(d) below) any such settlement is
effected with the written consent of the Contracting Stockholders; and
(iv) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by the Representatives),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or
omission, referred to under (i) or (ii) above, to the extent that any such
expense is not paid under (i), (ii) or (iii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with (A) written information furnished to the Trust by
any Underwriter through the Representatives expressly for use in the Trust
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any Trust
preliminary prospectus or the Trust Prospectus (or any amendment or supplement
thereto) or (B) written information furnished to Snyder or any Contracting
Stockholder by any Underwriter through the Representatives expressly for use in
the Snyder Registration Statement (or any amendment thereto) or any Snyder
preliminary prospectus or the Snyder Prospectus (or any amendment or supplement
thereto); provided, further, that this indemnity agreement shall not apply to
any loss, liability, claim, damage or expense of any Underwriter or person, if
any, who controls such Underwriter within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act with respect to any Snyder preliminary
prospectus to the extent that any such loss, liability, claim, damage or expense
of any Underwriter results solely from the fact that such Underwriter sold
Securities to a person as to whom the Contracting Stockholders shall establish
that there was not sent by commercially reasonable means, at or prior to the
written confirmation of such sale, a copy of the Snyder Prospectus in any case
where such delivery is required by the 1933 Act, if Snyder has previously
furnished copies thereof in sufficient quantity to such Underwriter and the
loss, claim, damage or liability
24
<PAGE>
of such Underwriter results from an untrue statement or omission of a material
fact contained in the Snyder preliminary prospectus that was corrected in the
Snyder Prospectus.
(b) Indemnification of the Trust and the Contracting Stockholders. Each
Underwriter severally agrees to indemnify and hold harmless the Trust, each
Contracting Stockholder, each person, if any, who controls the Trust or any
Contracting Stockholder within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a)(i) or (a)(ii)
of this Section, as incurred, but only with respect to (A) untrue statements or
omissions, or alleged untrue statements or omissions, made in the Trust
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any Trust
preliminary prospectus or the Trust Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Trust by such Underwriter through the Representatives expressly for use
in the Trust Registration Statement (or any amendment thereto) or such Trust
preliminary prospectus or the Trust Prospectus (or any amendment or supplement
thereto) or (B) untrue statements or omissions, or alleged untrue statements or
omissions, made in the Snyder Registration Statement (or any amendment thereto)
or any Snyder preliminary prospectus or the Snyder Prospectus (or any amendment
or supplement thereto) in reliance upon and in conformity with written
information furnished to Snyder or any Contracting Stockholder by such
Underwriter through the Representatives expressly for use in the Snyder
Registration Statement (or any amendment thereto) or any Snyder preliminary
prospectus or the Snyder Prospectus (or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder which it may have otherwise than
on account of this indemnity agreement. In the case of parties indemnified
pursuant to Section 6(a) above, counsel to the indemnified parties shall be
selected by Merrill Lynch, and, in the case of parties indemnified pursuant to
Section 6(b) above, counsel to the indemnified parties shall be selected by the
Contracting Stockholders. An indemnifying party may participate at its own
expense in the defense of any such action; provided, however, that counsel to
the indemnifying party shall not (except with the consent of the indemnified
party) also be counsel to the indemnified party. In no event shall the
indemnifying parties be liable for fees and expenses of more than one counsel
(in addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section 6 or Section 7 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a
25
<PAGE>
statement as to or an admission of fault, culpability or a failure to act by or
on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(iii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
(e) Conditions of Indemnification by the Contracting Stockholders. The
obligations and liabilities of the Contracting Stockholders under Section 6(a)
hereof with respect to untrue statements or omissions or alleged untrue
statements or omissions made in the Snyder Registration Statement (or any
amendment thereto), or any Snyder preliminary prospectus or the Snyder
Prospectus (or any amendment or supplement thereto), other than in reliance upon
and in conformity with written information furnished to Snyder by the
Contracting Stockholders expressly for use in the Snyder Registration Statement
(or any amendment thereto) or such Snyder preliminary prospectus or the Snyder
Prospectus (or any amendment or supplement thereto), shall be subject to the
following terms and conditions:
(i) the indemnified party shall have previously requested
indemnification for the loss, liability, claim, damage or expense arising
out of such untrue statements or omissions or alleged untrue statements or
omissions from Snyder under Section 4(a) of the Registration Agreement;
(ii) the Contracting Stockholders shall have received notice of the
indemnified party's request for indemnification from Snyder; and
(iii) Snyder shall have failed to pay or reimburse such indemnified
party, within 60 days from the date such request was made, in accordance
with such request.
SECTION 7. Contribution. If the indemnification provided for in Section 6
------------
is for any reason unavailable to or insufficient to hold harmless an indemnified
party in respect of any losses, liabilities, claims, damages or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Trust and the
Contracting Stockholders on the one hand and the Underwriters on the other hand
from the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Trust and the
Contracting Stockholders on the one hand and of the Underwriters on the other
hand in connection with the statements or omissions which
26
<PAGE>
resulted in such losses, liabilities, claims, damages or expenses, as well as
any other relevant equitable considerations.
The relative benefits received by the Trust and the Contracting
Stockholders on the one hand and the Underwriters on the other hand in
connection with the offering of the Securities pursuant to this Agreement shall
be deemed to be such that the Underwriters shall be responsible for that portion
of the aggregate amount of such losses, liabilities, claims, damages and
expenses represented by the percentage that the total underwriting discount
received by the Underwriters as set forth on the cover of the Trust Prospectus,
or, if Rule 434 is used, the corresponding location on the Trust Term Sheet,
bears to the aggregate initial public offering price of the Securities as set
forth on such cover and the Contracting Stockholders jointly shall be
responsible for the balance. The relative fault of the Trust and the
Contracting Stockholders on the one hand and the Underwriters on the other hand
shall be determined by reference to, among other things, whether any such untrue
or alleged untrue statement of a material fact or omission or alleged omission
to state a material fact relates to information supplied by the Trust or the
Contracting Stockholders on the one hand or by the Underwriters on the other
hand and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
The Trust, the Contracting Stockholders and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
Section 7. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
7 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each person, if any, who controls the Trust or any Contracting Stockholder
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as the Trust or such Contracting
Stockholder, as the case may be. The Underwriters' respective obligations to
contribute
27
<PAGE>
pursuant to this Section 7 are several in proportion to the number of Securities
set forth opposite their respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
--------------------------------------------------------------
All representations, warranties and agreements contained in this Agreement or in
certificates of the Trust, Snyder, the Partnership or any Contracting
Stockholder submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of the
Underwriters or controlling persons, or by or on behalf of the Trust or the
Contracting Stockholders, and shall survive delivery of the Securities to the
Underwriters.
SECTION 9. Termination of Agreement.
------------------------
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Trust and the Contracting Stockholders, at any time
at or prior to Closing Time (i) if there has been, since the time of execution
of this Agreement or since the respective dates as of which information is given
in the Trust Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs, business prospects,
management, investment objectives or investment policies of the Trust, whether
or not arising in the ordinary course of business, or (ii) if there has been,
since the time of execution of this Agreement, or since the respective dates as
of which information is given in the Snyder Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of Snyder and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (iii)
if there has occurred any material adverse change in the financial markets in
the United States, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the
Representatives, impracticable to market the Securities or to enforce contracts
for the sale of the Securities, or (iv) if trading in the Securities or in the
Snyder Common Stock has been suspended or limited by the Commission or the New
York Stock Exchange, or if trading generally on the American Stock Exchange or
the New York Stock Exchange or in the Nasdaq National Market has been suspended
or limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the NASD or any other governmental authority, or
(v) if a banking moratorium has been declared by either federal or New York
authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section
9, such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6,
7 and 8 shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More Underwriters. If one or more of the
-----------------------------------
Underwriters shall fail at Closing Time or a Date of Delivery to purchase the
Securities which it or they are obligated to purchase under this Agreement (the
"Defaulted Securities"), the Representatives shall have the right, within 24
hours thereafter, to make arrangements for one
28
<PAGE>
or more of the non-defaulting Underwriters, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities in such amounts
as may be agreed upon and upon the terms herein set forth; if, however, the
Representatives shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the non-
defaulting Underwriters shall be obligated, severally and not jointly, to
purchase the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of
all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number
of Securities to be purchased on such date, this Agreement or, with respect
to any Date of Delivery which occurs after the Closing Time, the obligation
of the Underwriters to purchase and of the Trust to sell the Option
Securities to be purchased and sold on such Date of Delivery, shall
terminate without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section 10 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Trust to sell the relevant Option Securities,
as the case may be, either the Representatives or the Trust shall have the right
to postpone Closing Time or the relevant Date of Delivery, as the case may be,
for a period not exceeding seven days in order to effect any required changes in
the Trust Registration Statement or Trust Prospectus or in any other documents
or arrangements. As used herein, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 10.
SECTION 11. Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at North Tower, World
Financial Center, New York, New York 10281, attention Syndicate Operations;
notices to the Trust shall be directed to it c/o Puglisi & Associates, 850
Library Avenue, Suite 204, Newark, Delaware 19715, attention of Donald J.
Puglisi; and notices to the Contracting Stockholders shall be directed to them
c/o Daniel M. Snyder, Snyder Communications, Inc., 6903 Rockledge Drive,
Bethesda, MD 20817.
SECTION 12. Parties. This Agreement shall each inure to the benefit of and
-------
be binding upon the Underwriters, the Trust and the Contracting Stockholders and
their respective successors. Nothing expressed or mentioned in this Agreement
is intended or shall be construed to give any person, firm or corporation, other
than the parties hereto and their respective successors and the controlling
persons referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the parties hereto and their
29
<PAGE>
respective successors, and said controlling persons and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation.
No purchaser of Securities from any Underwriter shall be deemed to be a
successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
----------------------
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings. The Article and Section headings herein
------------------
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
30
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Trust and the Contracting Stockholders a
counterpart hereof, whereupon this instrument, along with all counterparts, will
become a binding agreement among the Underwriters, the Trust and the Contracting
Stockholders in accordance with its terms.
Very truly yours,
SNYDER STRYPES TRUST
___________________________________
Donald J. Puglisi, as Managing Trustee
D.M.S. ENDOWMENT, LLC
By_________________________________
Name:
Title:
SUTTON PARTNERS, LLC
By_________________________________
Name:
Title:
A.O. ROBERTS, LLC
By_________________________________
Name:
Title:
USN COLLEGE MARKETING, L.P.
By_________________________________
Name:
Title:
<PAGE>
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
GOLDMAN, SACHS & CO.
MORGAN STANLEY & CO. INCORPORATED
MONTGOMERY SECURITIES
BEAR, STEARNS & CO. INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By__________________________________
Authorized Signatory
For themselves and as Representatives of the other Underwriters named in
Schedule A hereto.
32
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Number of
Initial
Name of Underwriter Securities
------------------- ----------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.................................
Goldman, Sachs & Co.......................................
Morgan Stanley & Co. Incorporated.........................
Montgomery Securities.....................................
Bear, Stearns & Co. Inc...................................
------------
Total........................................ 4,000,000
============
</TABLE>
Sch A-1
<PAGE>
SCHEDULE B
SNYDER STRYPES TRUST
STRYPES/(SM)/
1. The initial public offering price of the Securities shall be
$______ per STRYPES.
2. The purchase price for the Securities to be paid by the
Underwriters shall be $_____ per STRYPES, being an amount equal to the
initial public offering price set forth above less $___ per STRYPES.
3. The "Threshold Appreciation Price" with respect to the Securities
shall be $_____.
_____________________
(SM) Service mark of Merrill Lynch & Co., Inc.
<PAGE>
SCHEDULE C
D.M.S. Endowment, LLC
Sutton Partners, LLC
A.O. Roberts, LLC
USN College Marketing, L.P.
Daniel M. Snyder
Michelle D. Snyder
Dr. A.O. Roberts
Fred Drasner
Sch C-1
<PAGE>
EXHIBIT A
FORM OF OPINION OF THE TRUST'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(a)(3)
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Act, and all filings
required under the laws of the State of Delaware with respect to the
creation and valid existence of the Trust as a business trust have
been made.
2. Under the Delaware Act and the Declaration, the Trust has the
requisite power and authority to own property and conduct its business
as described in the Trust Prospectus.
3. Under the Delaware Act and the Declaration, the Trust has the
requisite power and authority to (i) execute and deliver, and to
perform its obligations under, the Purchase Agreement and the
Fundamental Agreements, and (ii) issue and perform its obligations
under the STRYPES.
4. Under the Delaware Act and the Declaration, the execution and delivery
by the Trust of the Purchase Agreement and the Fundamental Agreements
have been duly authorized by the requisite trust action on the part of
the Trust.
5. Each of the Fundamental Agreements has been duly executed and
delivered by the Trust and (assuming the due authorization, execution
and delivery thereof by the other parties thereto) constitutes a valid
and binding agreement of the Trust, enforceable against the Trust in
accordance with its terms, except as enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally and
except as enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
6. The STRYPES, the Trust Agreement and the Fundamental Agreements
conform in all material respects as to legal matters to the
descriptions thereof contained in the Trust Prospectus.
7. The Trust is registered with the Commission as a non-diversified,
closed-end management investment company under the 1940 Act; and, to
the best of our knowledge, no order of suspension or revocation of
such registration has been issued or proceedings therefor initiated or
threatened by the Commission.
8. The Trust Registration Statement has been declared effective under the
1933 Act; the required filing of the Trust Prospectus pursuant to Rule
497(h) was made in
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the manner and within the time period required by Rule 497(h); and, to
the best of our knowledge, no stop order suspending the effectiveness
of the Trust Registration Statement pursuant to Section 8(d) of the
1933 Act, or order pursuant to Section 8(e) of the 1940 Act, has been
issued and no proceedings for either such purpose have been instituted
or are pending or threatened by the Commission.
9. The Trust Registration Statement, as of its effective date, and the
Trust Prospectus, as of its issue date (in each case other than the
financial statements and supporting schedules and other financial data
included therein or omitted therefrom, as to which we express no
opinion) complied as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and the 1940
Act and the rules and regulations promulgated by the Commission
thereunder.
10. The execution, delivery and performance by the Trust of the Purchase
Agreement and each Fundamental Agreement and the consummation by the
Trust of the transactions contemplated therein and in the Trust
Registration Statement (including the issuance and sale of the STRYPES
and the delivery of the Reference Property in exchange therefor, the
consummation of the Forward Purchase and the use of the proceeds from
the sale of the STRYPES as described in the Trust Prospectus under the
caption "Use of Proceeds") and compliance by the Trust with its
obligations under the Purchase Agreement, the STRYPES and each
Fundamental Agreement do not and will not, whether with or without the
giving of notice or lapse of time or both, conflict with or constitute
a breach of, or default or Repayment Event under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Trust pursuant to, any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or any
other agreement or instrument, known to us, to which the Trust is a
party or by which it may be bound, or to which any of the property or
assets of the Trust is subject (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not result in a
Material Adverse Effect), nor will such action result in any violation
of the provisions of the Declaration or the Trust Certificate, or any
applicable law, statute, rule, regulation, judgment, order, writ or
decree, known to us, of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Trust or any
of its assets or properties.
11. To the best of our knowledge, there is no action, suit, proceeding,
inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending or
threatened against or affecting the Trust, which is required to be
disclosed in the Trust Registration Statement (other than as disclosed
therein), or which might, individually or in the aggregate, reasonably
be expected to result in a Material Adverse Effect, or which might,
individually or in the aggregate, reasonably be expected to materially
and adversely affect the properties or assets of the Trust or the
consummation by the Trust of the
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transactions contemplated in the Purchase Agreement or the Fundamental
Agreements (including the issuance and sale of the STRYPES and the
delivery of the Reference Property in exchange therefor and the
consummation of the Forward Purchase) or the performance by the Trust
of its obligations thereunder.
12. No declaration or filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency (other than under the 1933 Act and
the 1933 Act Regulations, which have been obtained, or as may be
required under the securities or blue sky laws of the various states,
as to which we express no opinion) is necessary or required for the
Trust to own or use its assets and to conduct its business in the
manner described in the Trust Prospectus or for the performance by the
Trust of its obligations under the Purchase Agreement or any
Fundamental Agreement or the consummation by the Trust of the
transactions contemplated therein (including the issuance and sale of
the STRYPES and the delivery of the Reference Property in exchange
therefor and the consummation of the Forward Purchase).
We have participated in conferences with the Trustees and representatives
of the Trust, officers and representatives of Snyder and the Contracting
Stockholders, representatives of the independent accountants of the Trust and
Snyder, and the Underwriters at which the contents of the Trust Registration
Statement and Prospectus and related matters were discussed and, although we are
not passing upon or assuming responsibility for the accuracy, completeness or
fairness of the statements contained or incorporated by reference in the Trust
Registration Statement and the Trust Prospectus and have made no independent
check or verification thereof, on the basis of the foregoing, nothing has come
to our attention that would lead us to believe (i) that the Trust Registration
Statement (except for financial statements and schedules and other financial
data included therein or omitted therefrom, as to which we make no statement),
at the time such Trust Registration Statement became effective or at the date of
the Purchase Agreement, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or, (ii) that the Trust Prospectus
(except for financial statements and schedules and other financial data included
therein or omitted therefrom, as to which we make no statement), at the time the
Trust Prospectus was issued or at the Closing Time, included or includes an
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
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EXHIBIT B
FORM OF OPINION OF THE TRUST'S DELAWARE COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(a)(4)
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Act, and all filings
required under the laws of the State of Delaware with respect to the
creation and valid existence of the Trust as a business trust have
been made.
2. Under the Delaware Act and the Trust Agreement, the Trust has the
requisite trust power and authority to own property and conduct its
business, all as described in the Trust Prospectus.
3. The Trust Agreement constitutes a valid and binding obligation of ML
IBK Positions, Inc. and the Trustees, and is enforceable against ML
IBK Positions, Inc. and the Trustees in accordance with its terms,
except as enforcement may be limited by (i) bankruptcy, insolvency,
moratorium, receivership, reorganization, liquidation and other
similar laws relating to or affecting the rights and remedies of
creditors generally, (ii) principles of equity (regardless of whether
considered and applied in a proceeding in equity or at law), (iii) the
law of fraudulent transfer, (iv) public policy, (v) applicable law
relating to fiduciary duties, and (vi) judicial imposition of an
implied covenant of good faith and fair dealing.
4. Under the Delaware Act and the Trust Agreement, the Trust has the
requisite trust power and authority to (i) execute and deliver, and to
perform its obligations under, the Purchase Agreement, the Forward
Purchase Contract, the Security and Pledge Agreement and the
Fundamental Agreements, and (ii) issue and perform its obligations
under the Securities.
5. Under the Delaware Act and the Trust Agreement, the execution and
delivery by the Trust of the Purchase Agreement, the Forward Purchase
Contract, the Security and Pledge Agreement and the Fundamental
Agreements have been duly authorized by the requisite trust action on
the part of the Trust.
6. The Securities have been duly authorized by the Trust Agreement and
are duly and validly issued and, subject to the qualifications set
forth in this paragraph (6), fully paid and nonassessable undivided
beneficial interests in the assets of the Trust and are entitled to
the benefits provided by the Trust Agreement. The holders of the
Securities, as beneficial owners of the Trust, will be entitled to the
same limitation on personal liability extended to stockholders of
private corporations for profit organized under the General
Corporation Law of the State of Delaware. [Such counsel may note that
the Holders of the Securities may be obligated to make payments as set
forth in the Trust Agreement.]
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7. Under the Delaware Act and the Trust Agreement, the issuance of the
Securities is not subject to preemptive rights.
8. The issuance and sale by the Trust of the Securities, the execution,
delivery and performance by the Trust of the Purchase Agreement, the
Forward Purchase Contract, the Security and Pledge Agreement and the
Fundamental Agreements, the consummation by the Trust of the
transactions contemplated thereby and compliance by the Trust with its
obligations thereunder do not violate (i) any of the provisions of the
Trust Certificate or the Trust Agreement or (ii) any applicable
Delaware law or administrative regulation thereunder.
9. Except as previously made or obtained, as the case may be, no filing
with, or authorization, approval, consent or order of, any Delaware
court or governmental authority or agency is required to be made or
obtained by the Trust solely in connection with the execution or
delivery by the Trust of the Purchase Agreement, the Forward Purchase
Contract, the Security and Pledge Agreement or the Fundamental
Agreements, or the consummation by the Trust of the transactions
contemplated thereby (including the issuance and sale of the
Securities).
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<PAGE>
EXHIBIT C
FORM OF OPINION OF THE UNDERWRITER'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(a)(5)
1. The Company is validly existing as a corporation in good standing
under the laws of the State of Delaware.
2. The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Snyder Prospectus and to enter into and perform its obligations under
the Registration Agreement.
3. The Registration Agreement has been duly authorized, executed and
delivered by the Company and the Partnership. The performance by the
Company and the Partnership of their respective obligations under the
Registration Agreement and the consummation of the transactions
contemplated therein and compliance by the Company and the Partnership
with their obligations under the Registration Agreement have been duly
authorized by the Company and the Partnership, respectively.
4. The Snyder Registration Statement was declared effective under the
1933 Act on September [ ], 1997, the Snyder Prospectus was filed
with the Commission pursuant to Rule 424(b) of the 1933 Act
Regulations on September [ ], 1997 and, to our knowledge, no stop
order suspending the effectiveness of the Snyder Registration
Statement has been issued and no proceeding for that purpose is
pending or threatened by the Commission.
5. The Snyder Registration Statement and the Snyder Prospectus as of
their respective effective or issue dates (except for the financial
statements and the notes thereto and the supporting schedules and
other financial data included therein, as to which we express no
opinion) compiled as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations.
6. The form of certificate used to evidence the Snyder Common Stock
complies in all material respects with the requirements of the General
Corporation Law of the State of Delaware, any applicable requirements
of the Certificate of Incorporation
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and Bylaws of the Company and the requirements of the New York Stock
Exchange.
7. The information in the Snyder Prospectus under "Description of Capital
Stock -- Common Stock", insofar as it purports to summarize the terms
of the Snyder Common Stock, has been reviewed by us and is accurate
and fair in all material respects.
We have not ourselves checked the accuracy and completeness of, or
otherwise verified, and are not passing upon and assume no responsibility for
the accuracy or completeness of, the statements contained in the Snyder
Registration Statement or the Snyder Prospectus, except to the limited extent
stated in paragraph 7 above. In the course of our review and discussion of the
contents of the Snyder Registration Statement and the Snyder Prospectus with
certain officers and employees of the Company and its verification, no facts
have come to our attention which cause us to believe that the Snyder
Registration Statement (other than the financial statements and schedules and
other financial information contained therein, as to which we express no belief)
at the time it became effective contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements contained therein not misleading, or that the Snyder
Prospectus (other than the financial statements and schedules and other
financial information contained therein, as to which we express no belief)
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
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EXHIBIT D
FORM OF OPINION OF THE COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(a)(6)
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
2. The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Snyder Prospectus and to enter into and perform its obligations under
the Registration Agreement.
3. The Company is in good standing in each jurisdiction that issued a
Company Good Standing Certificate.
4. The authorized, issued and outstanding capital stock of the Company is
as set forth in the Snyder Prospectus in the column entitled "Actual"
under the caption "Capitalization" (except for subsequent issuances,
if any, pursuant to the U.S. Purchase Agreement and the International
Purchase Agreement or pursuant to reservations, agreements or employee
benefit plans referred to in the Snyder Prospectus or pursuant to the
exercise of convertible securities or options referred to in the
Snyder Prospectus); the shares of issued and outstanding capital stock
of the Company, including the shares of Snyder Common Stock owned by
the Contracting Stockholders, have been duly authorized and validly
issued and are fully paid and non-assessable and no holder of the
Snyder Common Stock is or will be subject to personal liability by
reason of being such a holder; and none of the outstanding shares of
capital stock of the Company, including the shares of Snyder Common
Stock owned by the Contracting Stockholders, was issued in violation
of any preemptive rights under the General Corporation Law of the
State of Delaware.
5. Each Subsidiary is validly existing as a corporation or partnership,
as the case may be, in good standing under the laws of the
jurisdiction of incorporation, has corporate or partnership, as the
case may be, power and authority to own, lease and operate its
properties and to conduct its business as described in the Snyder
Prospectus and is duly qualified as a foreign corporation or
partnership, as the case may be, to transact business and is in good
standing in each jurisdiction that issued a Subsidiary Good Standing
Certificate.
6. All of the issued and outstanding capital stock of each Subsidiary has
been duly authorized and validly issued, is fully paid and non-
assessable and, based upon our review of the capital stock records of
the Subsidiaries, is owned by the Company
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directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity. All
of the partnership interests are authorized under the partnership
agreement and, based upon our review of the Partnership's records, are
owned by Snyder Marketing Services, Inc. as the corporate general
partner and by the Company as the sole limited partner, free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim
or equity. None of the outstanding shares of capital stock of any
Subsidiary was issued in violation of the preemptive or similar rights
of any securityholder of such Subsidiary.
7. The Registration Agreement has been duly authorized, executed and
delivered by the Company and the Partnership. The performance by the
Company and the Partnership of their respective obligations under the
Registration Agreement and the consummation of the transactions
contemplated therein and compliance by the Company and the Partnership
with their obligations under the Registration Agreement have been duly
authorized by the Company and the Partnership, respectively.
8. The Snyder Registration Statement was declared effective under the
1933 Act on September [_] 1997, the Snyder Prospectus was filed with
the Commission pursuant to Rule 424(b) of the 1933 Act Regulations on
September [_], 1997 and, to our knowledge, no stop order suspending
the effectiveness of the Snyder Registration Statement has been issued
and no proceeding for that purpose is pending or threatened by the
Commission.
9. The Snyder Registration Statement and the Snyder Prospectus as of
their respective effective or issue dates (except for the financial
statements and the notes thereto and the supporting schedules and
other financial data included therein, as to which we express no
opinion) comply as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations.
10. The form of certificate used to evidence the Snyder Common Stock
complies in all material respects with the requirements of the General
Corporation Law of the State of Delaware, any applicable requirements
of the Certificate of Incorporation and Bylaws of the Company and the
requirements of the New York Stock Exchange.
11. To our knowledge, except as set forth in the Snyder Prospectus, there
is not pending any action, suit, proceeding, inquiry or investigation
to which the Company or any subsidiary is a party, or to which the
property of the Company or any subsidiary is subject, before or
brought by any court or governmental agency or body, domestic or
foreign which might reasonably be expected to result in a Material
Adverse Effect, or which might reasonably be expected to materially
and adversely affect the properties or assets of the Company and its
subsidiaries considered as one enterprise, or the consummation of the
transactions contemplated
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<PAGE>
in the Registration Agreement or the performance by the Company or the
Partnership of their respective obligations thereunder.
12. The information in the Snyder Prospectus under "Risk Factors -
Government Regulation," "Risk Factors - Shares Eligible For Future
Sale, STRYPES Offering and Registration Rights," "Risk Factors -
Effect of Certain Charter and Bylaw Provisions," "Business -
Government Regulation," "Business - Properties," "Business - Legal
Proceedings," "Description of Capital Stock," "Shares Eligible for
Future Resale," and "Considerations for Non-United States Holders" and
in the Snyder Registration Statement under Item 14 and Item 15, to the
extent that it describes matters of law, summaries of legal matters,
the Company's Certificate of Incorporation or Bylaws, or legal
proceedings, or legal conclusions, has been reviewed by us and is
correct in all material respects.
13. To our knowledge, there are no statutes or regulations that are
required to be described in the Snyder Prospectus that are not
described as required.
14. The descriptions in the Snyder Prospectus of contracts and other legal
documents to which the Company or any subsidiary is a party are
accurate in all material respects. To our knowledge, there are no
franchises, contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments required to be described or referred to in
the Snyder Registration Statement or the Snyder Prospectus or to be
filed as exhibits to the Snyder Registration Statement other than
those described or referred to in the Snyder Registration Statement or
the Snyder Prospectus or filed as exhibits to the Snyder Registration
Statement, and the descriptions thereof or references thereto are
accurate in all material respects.
15. To our knowledge, neither the Company nor any Subsidiary is in
violation of its charter or bylaws and the Partnership is not in
violation of its partnership agreement, and, to our knowledge, no
default by the Company or any Subsidiary exists in the due performance
or observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument that is
described or referred to in the Snyder Registration Statement or the
Snyder Prospectus or filed as an exhibit to the Snyder Registration
Statement.
16. No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any domestic court or
governmental authority or agency (other than under the 1933 Act and
the 1933 Act Regulations and the Securities Exchange Act of 1934,
which have been obtained, or as may be required under the securities
or blue sky laws of the various states, as to which we express no
opinion) is necessary or required in connection with the due
authorization, execution and delivery of the Registration Agreement by
the Company and the Partnership, or for the performance by the Company
or the Partnership of its obligations thereunder.
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17. The execution, delivery and performance of the Registration Agreement
by the Company and the Partnership, and the consummation of the
transactions contemplated therein by the Company and the Partnership,
and the compliance by the Company and the Partnership with their
respective obligations under the Registration Agreement, do not and
will not, whether with or without the giving of notice or lapse of
time or both, conflict with or constitute a breach of, or default or
Repayment Event (as defined in Section 1(a)(x) of the Registration
Agreement under or, to our knowledge, result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any Subsidiary under any indenture, mortgage,
deed of trust, note agreement or other agreement or instrument to
which the Company or any Subsidiary is a party or by which any of them
or their properties is or may be bound, or to which any of them or
their properties may be subject, that is filed as an exhibit to the
Snyder Registration Statement or which is otherwise known to us,
except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a Material Adverse Effect, nor will
such action result in any violation of the provisions of the charter
or bylaws or partnership agreement, as the case may be, of the Company
or any Subsidiary or any applicable law, statute, rule, regulation
(other than the blue sky or securities laws or regulations of the
various states, as to which we express no opinion), judgment, order,
writ or decree, known to us, of any government, government
instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any Subsidiary or any of their respective
properties, assets or operations.
18. To our knowledge, other than as described in the Snyder Prospectus,
there are no persons with registration rights or other similar rights
to have any securities registered pursuant to the Snyder Registration
Statement or otherwise registered by the Company under the 1933 Act
(other than rights which have been waived or satisfied).
19. The Company is not an "investment company" or an entity "controlled"
by an "investment company" as such terms are defined in the Investment
Company Act of 1940, as amended.
Because the primary purpose of our professional engagement was not to
establish or confirm factual matters or financial or accounting matters and
because of the wholly or partially non-legal character of many of the statements
contained in the Snyder Registration Statement or the Snyder Prospectus, we are
not passing upon and do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Snyder Registration
Statement or the Snyder Prospectus and we make no representation that we have
independently verified the accuracy, completeness or fairness of such
statements. Without limiting the foregoing, we assume no responsibility for,
and have not independently verified, the accuracy, completeness or fairness of
the financial statements and the notes thereto and the schedules and other
financial data included in the Snyder Registration Statement and we have not
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<PAGE>
examined the accounting or financial records from which such financial
statements, notes, schedules and data are derived.
However, on the basis of our participation, as counsel to the Company,
with representatives of the Company and its subsidiaries in the preparation of
the Snyder Registration Statement and the Snyder Prospectus, and our
participation with representatives of the Company, its independent public
accountants and the Underwriters at meetings in which the contents of the Snyder
Registration Statement and the Snyder Prospectus and related matters were
discussed and the examination by us of such corporate records, statutes,
documents and questions of law as we deemed necessary, but without independent
verification by us of the accuracy, completeness and fairness of the statements
contained in the Snyder Registration Statement and the Snyder Prospectus, and
without commenting as to the financial statements and the notes thereto and the
schedules and other financial data included therein, nothing has come to our
attention that would lead us to believe that the Snyder Registration Statement,
at the time it became effective under the 1933 Act, contained an untrue
statement of material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Snyder Prospectus, or any amendment or supplement thereto (except for
the financial statements and the notes thereto and the schedules and other
financial data included therein or omitted therefrom, as to which we make no
statement), as of its date or as of the Closing Time, included or includes an
untrue statement of material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
As used in this Exhibit D the terms "Material Adverse Effect,"
"Subsidiary," and "Subsidiaries" shall have the meanings ascribed to them in the
Registration Agreement. The term "Company Good Standing Certificate" shall
mean, with respect to each jurisdiction in which the Company must qualify as a
foreign corporation to transact business, a certificate of a duly qualified
public official of such jurisdiction stating that the Company is in good
standing in such jurisdiction.
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EXHIBIT E
FORM OF OPINION OF THE CONTRACTING STOCKHOLDERS' COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(a)(7)
1. D.M.S. Endowment, LLC has been duly organized and is validly existing
as a limited liability company in good standing under the laws of the
jurisdiction of its organization and has power and authority to enter
into and perform its obligations under the Purchase Agreement, the
Forward Purchase Contract and the Security and Pledge Agreement.
2. Sutton Partners, LLC has been duly organized and is validly existing
as a limited liability company in good standing under the laws of the
jurisdiction of its organization and has power and authority to enter
into and perform its obligations under the Purchase Agreement, the
Forward Purchase Contract and the Security and Pledge Agreement.
3. A.O. Roberts, LLC has been duly organized and is validly existing as a
limited liability company in good standing under the laws of the
jurisdiction of its organization and has power and authority to enter
into and perform its obligations under the Purchase Agreement, the
Forward Purchase Contract and the Security and Pledge Agreement.
4. USN College Marketing, L.P. has been duly organized and is validly
existing as a limited partnership in good standing under the laws of
the jurisdiction of its organization and has power and authority to
enter into and perform its obligations under the Purchase Agreement,
the Forward Purchase Contract and the Security and Pledge Agreement.
5. The Purchase Agreement has been duly authorized, executed and
delivered by each Contracting Stockholder.
6. Each of the Forward Purchase Contract and the Security and Pledge
Agreement has been duly authorized, executed and delivered by each
Contracting Stockholder and (assuming the due authorization, execution
and delivery thereof by the other parties thereto) constitutes a valid
and binding agreement of each Contracting Stockholder, enforceable
against each Contracting Stockholder in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws
affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity or at law).
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7. The execution, delivery and performance by the Contracting
Stockholders of the Purchase Agreement, Forward Purchase Contract and
the Security and Pledge Agreement and the consummation by the
Contracting Stockholders of the transactions contemplated therein and
compliance by the Contracting Stockholders with their respective
obligations thereunder have been duly authorized by all necessary
action on the part of the Contracting Stockholders and do not and will
not, whether with or without the giving of notice or lapse of time or
both, conflict with or constitute a breach of, or default or
Stockholder Repayment Event (as defined in Section 1(b)(v) of the
Purchase Agreement) under, or result in the creation or imposition of
any tax, lien, charge or encumbrance upon any property or assets of
any Contracting Stockholder (including the shares of Snyder Common
Stock owned by the Contracting Stockholders) pursuant to, any
contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, license, lease or other agreement or instrument,
known to us, to which any Contracting Stockholder is a party or by
which it may be bound, or to which any of the property or assets of
any Contracting Stockholder is subject (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not,
singly or in the aggregate, materially and adversely affect the
ability of the Contracting Stockholders to perform their respective
obligations under the Purchase Agreement, Forward Purchase Contract or
the Security and Pledge Agreement), nor will such action result in any
violation of the provisions of the limited liability company agreement
or limited partnership agreement, as the case may be, of any
Contracting Stockholder, or any applicable law, statute, rule,
regulation, judgment, order, writ or decree, known to us, of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over any Contracting Stockholder or any of its
assets, properties or operations (except for such violations that
would not, singly or in the aggregate, materially and adversely affect
the ability of the Contracting Stockholders to perform their
respective obligations under the Purchase Agreement, Forward Purchase
Contract or the Security and Pledge Agreement).
8. No declaration or filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency (other than under the 1933 Act and
the 1933 Act Regulations, which have been obtained, or as may be
required under the securities or blue sky laws of the various states,
as to which we express no opinion) is necessary or required in
connection with the due authorization, execution and delivery by the
Contracting Stockholders of the Purchase Agreement, the Fund Indemnity
Agreement, the Fund Expense Agreement, the Forward Purchase Contract
or the Security and Pledge Agreement or the performance by the
Contracting Stockholders of their respective obligations thereunder;
and each Contracting Stockholder has the full right, power and
authority to pledge and assign the shares of Snyder Common Stock to be
pledged and assigned by such Contracting Stockholder pursuant to the
Security and Pledge Agreement and to sell, transfer and deliver the
shares of Snyder Common Stock to be sold by such Contracting
Stockholder pursuant to the Forward Purchase Contract.
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9. To the best of our knowledge, each Contracting Stockholder has all
rights in and to the shares of Snyder Common Stock to be pledged and
assigned by such Contracting Stockholder pursuant to the Security and
Pledge Agreement, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity, other than those created
pursuant to the Security and Pledge Agreement; and the shares of
Snyder Common Stock pledged by the Contracting Stockholders as of the
date hereof have been duly and validly assigned, delivered and pledged
by the Contracting Stockholders under the Security and Pledge
Agreement and such Security and Pledge Agreement, together with such
assignment, delivery and pledge, creates, as security for the
performance of the obligations of the Contracting Stockholders under
the Forward Purchase Contract, a valid first priority and perfected
security interest in such shares of Snyder Common Stock prior to other
liens.
10. If immediately prior to the Exchange Date any Contracting Stockholder
delivers to the Trust shares of Snyder Common Stock pursuant to the
Forward Purchase Contract, upon delivery by such Contracting
Stockholder to the Trust of the shares of Snyder Common Stock pursuant
to the Forward Purchase Contract, the Trust will be the sole
registered owner of the shares of Snyder Common Stock so delivered
and, assuming the Trust purchased for value in good faith and without
notice of any adverse claim, the Trust, assuming compliance with the
Security and Pledge Agreement, will have acquired all rights in and to
such shares of Snyder Common Stock, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity.
11. Upon the occurrence of an Event of Default specified in the Security
and Pledge Agreement, the rights of the Collateral Agent with respect
to the Collateral, as set forth in the Security and Pledge Agreement,
shall immediately become exercisable in accordance with the terms of
the Security and Pledge Agreement, and such rights will not be subject
to any stay pursuant to Section 362(a) of Title 11 of the United
States Code.
Because the primary purpose of our professional engagement was not to
establish or confirm factual matters or financial or accounting matters and
because of the wholly or partially non-legal character of many of the statements
contained in the Trust Registration Statement or the Trust Prospectus, we are
not passing upon and do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Trust Registration
Statement or the Trust Prospectuses and we make no representation that we have
independently verified the accuracy, completeness or fairness of such
statements. Without limiting the foregoing, we assume no responsibility for, and
have not independently verified, the accuracy, completeness or fairness of the
financial statements and the notes thereto and the schedules and other financial
data included in the Trust Registration Statement and we have not examined the
accounting or financial records from which such financial statements, notes,
schedules and data are derived.
However, on the basis of our participation, as counsel to the Company, with
representatives of the Company and its subsidiaries in the preparation of the
Trust Registration Statement and the Trust Prospectuses, and our participation
with representatives of the Company,
E-3
<PAGE>
its independent public accountants and the Underwriters at meetings in which the
contents of the Trust Registration Statement and the Trust Prospectuses and
related matters were discussed and the examination by us of such corporate
records, statutes, documents and questions of law as we deemed necessary, but
without independent verification by us of the accuracy, completeness and
fairness of the statements contained in the Trust Registration Statement and the
Trust Prospectuses, and without commenting as to the financial statements and
the notes thereto and the schedules and other financial data included therein,
nothing has come to our attention that would lead us to believe that the Trust
Registration Statement, at the time it became effective under the 1933 Act,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or that the Trust Prospectus or any amendment or supplement
thereto (except for the financial statements and the notes thereto and the
schedules and other financial data included therein or omitted therefrom, as to
which we make no statement), as of its date or as of the Closing Time, included
or includes an untrue statement of a material fact or omitted or omits to state
a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
E-4
<PAGE>
EXHIBIT F
FORM OF LOCK-UP FROM CONTRACTING
STOCKHOLDERS PURSUANT TO SECTION 5(a)(15)
September , 1997
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
GOLDMAN, SACHS & CO.
MORGAN STANLEY & CO. INCORPORATED
MONTGOMERY SECURITIES
BEAR, STEARNS & CO. INC.
as Representatives of the several
Underwriters to be named in the
within-mentioned Purchase Agreement
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Re: Proposed Public Offering by Snyder STRYPES Trust
Dear Sirs:
The undersigned, a stockholder [and an officer and/or director]* of
Snyder Communications, Inc., a Delaware corporation (the "Company"), understands
that Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch") and Goldman, Sachs & Co., Morgan Stanley & Co. Incorporated,
Montgomery Securities and Bear, Stearns & Co. Inc. propose to enter into a
Purchase Agreement (the "Purchase Agreement") with the Company and the other
parties named therein providing for the public offering of STRYPES (the
"Securities") of Snyder STRYPES Trust (the "Trust"), exchangeable for the
Company's common stock, par value $.001 per share (the "Common Stock"). In
recognition of the benefit that such an offering will confer upon the
undersigned as a stockholder [and an officer and/or director]* of the Company,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the undersigned agrees with each Underwriter to
be named in the Purchase Agreement that, during a period of 90 days from the
date of the Purchase Agreement, the undersigned will not, without the prior
written consent of Merrill Lynch, directly or
______________________
Delete or revise bracketed language as appropriate.
F-1
<PAGE>
indirectly, (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant for the sale of, or otherwise dispose of or transfer any shares
of the Company's Common Stock or any securities convertible into or exchangeable
or exercisable for Common Stock, whether now owned or hereafter acquired by the
undersigned or with respect to which the undersigned has or hereafter acquires
the power of disposition, or file any registration statement under the
Securities Act of 1933, as amended, with respect to any of the foregoing or (ii)
enter into any swap or any other agreement or any transaction that transfers, in
whole or in part, directly or indirectly, the economic consequence of ownership
of the Common Stock, whether any such swap or transaction is to be settled by
delivery of Common Stock or other securities, in cash or otherwise.
[Notwithstanding the foregoing, the undersigned may, at any time after
30 days from the date of the Closing Time (as defined in the Purchase
Agreement), pledge as security for borrowed money [up to 50% of]* the shares of
Common Stock then owned by the undersigned to any commercial banking institution
that is a member of the Federal Reserve System or any institutional lender that
makes loans secured by margin securities in the ordinary course of business
having combined capital and surplus in excess of $500,000,000 (a "Pledgee") as
long as such Pledgee shall have agreed in writing to be bound by the obligations
and restrictions applicable to the Common Stock under Section 3(b)(i) of the
Purchase Agreement and the Representatives shall have received an agreement
substantially in the form of Exhibit D to the Purchase Agreement signed by such
Pledgee.]**
Very truly yours,
Signature:
Print Name:
_______________________
* Include in the case of lock-up agreement of Daniel M. Snyder and Michelle
D. Snyder.
** Include in the case of lock-up agreement of Daniel M. Snyder and Michelle
D. Snyder and USN College Marketing, L.P. or its partners.
F-2
<PAGE>
EXHIBIT G
FORM OF LOCK-UP FROM PLEDGEE PURSUANT TO SECTION 5(a)(15)
[month and day], 199_
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
GOLDMAN, SACHS & CO.
MORGAN STANLEY & CO. INCORPORATED
MONTGOMERY SECURITIES
BEAR, STEARNS & CO. INC.
as Representatives of the several
Underwriters named in the
within-mentioned Purchase Agreement
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Re: Public Offering by Snyder Communications, Inc.
Dear Sirs:
The undersigned, a pledgee of shares (the "Pledged Shares") of Common
Stock, par value $.001 per share, of Synder Communications, Inc., a Delaware
corporation (the "Company"), understands that Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and Goldman, Sachs
& Co., Morgan Stanley & Co. Incorporated, Montgomery Securities and Bear,
Stearns & Co. Inc. have entered into a Purchase Agreement, dated September [ ],
1997 (the "Purchase Agreement"), with the Company and the other parties named
therein providing for the public offering of STRYPES of Synder STRYPES Trust
(the "Trust") exchangeable for shares of the Company's Common Stock. For good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned agrees with each Underwriter named in the
Purchase Agreement that, during a period of 90 days from the date of the
Purchase Agreement, the undersigned will not, without the prior written consent
of Merrill Lynch, directly or indirectly, (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant for the sale of, or otherwise
dispose of or transfer any Pledged Shares or any securities convertible into or
exchangeable or exercisable for any Pledged Shares, whether now owned or
hereafter acquired by the undersigned or with respect to which the
G-1
<PAGE>
undersigned has or hereafter acquires the power of disposition, or file any
registration statement under the Securities Act of 1933, as amended, with
respect to any of the foregoing or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of any Pledged Shares,
whether any such swap or transaction is to be settled by delivery of any Pledged
Shares or other securities, in cash or otherwise.
Very truly yours,
[name of Pledgee]
By:
----------------------------------
Name:
Title:
G-2
<PAGE>
EXHIBIT (H)(2)
______________________________________________________________________________
______________________________________________________________________________
SNYDER COMMUNICATIONS, INC.
(a Delaware corporation)
REGISTRATION AGREEMENT
----------------------
Dated: September __, 1997
______________________________________________________________________________
______________________________________________________________________________
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
REGISTRATION AGREEMENT........................................................................................... 1
SECTION 1. Representations and Warranties........................................................ 3
------------------------------
(a) Representations and Warranties by the Company and the
Partnership........................................................................... 3
(i) Compliance with Registration Requirements........................................ 3
-----------------------------------------
(ii) Independent Accountants......................................................... 4
-----------------------
(iii) Financial Statements........................................................... 4
--------------------
(iv) No Material Adverse Change in Business.......................................... 5
--------------------------------------
(v) Good Standing of the Company..................................................... 5
----------------------------
(vi) Good Standing of Subsidiaries................................................... 5
-----------------------------
(vii) Capitalization................................................................. 6
--------------
(viii) Authorization................................................................. 6
-------------
(ix) Authorization and Description of Securities..................................... 6
-------------------------------------------
(x) Absence of Defaults and Conflicts................................................ 6
---------------------------------
(xi) Absence of Labor Dispute........................................................ 7
------------------------
(xii) Absence of Proceedings......................................................... 7
----------------------
(xiii) Accuracy of Exhibits.......................................................... 8
--------------------
(xiv) Possession of Intellectual Property............................................ 8
-----------------------------------
(xv) Absence of Further Requirements................................................. 8
-------------------------------
(xvi) Possession of Licenses and Permits............................................. 8
----------------------------------
(xvii) Title to Property............................................................. 8
-----------------
(xviii) Investment Company Act....................................................... 9
----------------------
(xix) Environmental Laws............................................................. 9
------------------
(xx) Registration Rights............................................................. 9
-------------------
(xxi) Certain Contracts............................................................. 10
-----------------
(xxii) Compliance with Laws.......................................................... 10
--------------------
(xxiii) Taxes......................................................................... 10
-----
(xxiv) Insurance..................................................................... 10
---------
(b) Officer's Certificates.................................................... 10
SECTION 2. Covenants of the Company and the Partnership.......................................... 10
--------------------------------------------
(a) Compliance with Securities Regulations and Commission
Requests.............................................................................. 10
(b) Filing of Amendments.................................................................. 11
(c) Delivery of Snyder Registration Statements............................................ 11
(d) Delivery of Snyder Prospectuses....................................................... 11
(e) Continued Compliance with Securities Laws............................................. 12
(f) Blue Sky Qualifications............................................................... 12
(g) Rule 158.............................................................................. 12
(h) Restriction on Sale of Securities..................................................... 13
(i) Reporting Requirements................................................................ 13
SECTION 3. Payment of Expenses................................................................... 13
-------------------
(a) Expenses.............................................................................. 13
(b) Allocation of Expenses................................................................ 14
SECTION 4. Indemnification....................................................................... 14
------------
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
(a) Indemnification of Underwriters and the Trust....................................... 15
(b) Indemnification of Company, Directors and Officers.................................. 17
(c) Actions against Parties; Notification............................................... 17
(d) Settlement without Consent if Failure to Reimburse.................................. 17
(e) Other Agreements with Respect to Indemnification.................................... 18
SECTION 5. Contribution........................................................................ 18
------------
SECTION 6. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery............................................................................................ 19
--------
SECTION 7. Termination......................................................................... 20
------------
SECTION 8. Notices............................................................................. 20
-------
SECTION 9. Parties............................................................................. 20
-------
SECTION 10. GOVERNING LAW....................................................................... 20
-------------
SECTION 11. Effect of Headings.................................................................. 20
------------------
SCHEDULE A.............................................................................................Sch A - 1
</TABLE>
ii
<PAGE>
SNYDER COMMUNICATIONS, INC.
(a Delaware corporation)
REGISTRATION AGREEMENT
----------------------
September __, 1997
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Goldman, Sachs & Co.
Morgan Stanley & Co. Incorporated
Montgomery Securities
Bear, Stearns & Co. Inc.
as Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281
SNYDER STRYPES TRUST
c/o Puglisi & Associates
850 Library Avenue
Suite 204
Newark, Delaware 19715
Ladies and Gentlemen:
Snyder Communications, Inc., a Delaware corporation (the "Company"), and
Snyder Communications, L.P., a Delaware limited partnership (the "Partnership"),
confirm their respective agreements with Snyder STRYPES Trust, a Delaware
business trust (the "Trust"), and with Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Goldman, Sachs & Co.,
Morgan Stanley & Co. Incorporated, Montgomery Securities, Bear, Stearns & Co.
Inc. and each of the other Underwriters named in Schedule A hereto
(collectively, the "Underwriters", which term shall also include any
underwriter substituted as
1
<PAGE>
provided in Section 10 of the Purchase Agreement (as defined below)), for whom
Merrill Lynch, Goldman, Sachs & Co., Morgan Stanley & Co. Incorporated,
Montgomery Securities, Bear, Stearns & Co., Inc. are acting as representatives
(in such capacity, the "Representatives"), in connection with a transaction
characterized by the Representatives as involving the proposed issue and sale by
the Trust to the Underwriters, acting severally and not jointly, pursuant to a
purchase agreement, dated the date hereof (the "Purchase Agreement"), among the
Trust, D.M.S. Endowment, LLC, Sutton Partners, LLC, A.O. Roberts, LLC and USN
College Marketing, L.P. (each, a "Contracting Stockholder" and, collectively,
the "Contracting Stockholders"), and the Underwriters, of an aggregate of
4,000,000 of the Trust's STRYPES(SM) (each, a "STRYPES"), exchangeable for
shares of common stock, par value $.001 per share, of the Company (the "Snyder
Common Stock") upon conclusion of the term of the Trust on __________, 2000 (the
"Exchange Date"), and, at the option of the Underwriters, all or any part of
600,000 additional STRYPES to cover over-allotments, if any. The aforesaid
4,000,000 STRYPES (the "Initial Securities") to be purchased by the Underwriters
and all or any part of the 600,000 STRYPES subject to the option described in
Section 2(b) of the Purchase Agreement (the "Option Securities") are hereinafter
called, collectively, the "Securities." Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to them in the Purchase
Agreement.
The Company has been advised that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Agreement and the Purchase Agreement have been executed and delivered. The
Company acknowledges that it has been advised that the execution and delivery of
this Agreement is a condition to the execution and delivery of the Purchase
Agreement by the Underwriters and the Trust, and that, in consideration of the
execution and delivery of the Purchase Agreement by the Underwriters and the
Trust, the Company is willing to make the representations, warranties and
covenants herein contained.
The Trust has filed with the Securities and Exchange Commission (the
"Commission") (i) a notification on Form N-8A (the "Notification") of
registration of the Trust as an investment company; and (ii) a registration
statement on Form N-2 (Nos. 333-33707 and 811-08337) for the registration of the
Securities under the Securities Act of 1933, as amended (the "1933 Act"), and
Pre-Effective Amendments No. 1 and No. 2 thereto, including a preliminary
prospectus relating to the offering of the Securities. Promptly after execution
and delivery of this Agreement, the Trust will either (i) prepare and file a
prospectus in accordance with the provisions of Rule 430A ("Rule 430A") of the
rules and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations") and paragraph (h) of Rule 497 ("Rule 497(h)") of the 1933 Act
Regulations or (ii) if the Trust has elected to rely upon Rule 434 ("Rule 434")
of the 1933 Act Regulations, prepare and file a term sheet (a "Trust Term
Sheet") in accordance with the provisions of Rule 434 and Rule 497(h). The
information included in such prospectus or in such Trust Term Sheet, as the case
may be, that was omitted from such registration statement (as so amended) at the
time it became effective but that is deemed to be part of such registration
statement (as so amended) at the time it became effective (i) pursuant to
paragraph (b) of Rule 430A is referred to as "Rule 430A Information" or (ii)
pursuant to paragraph (d) of Rule 434 is referred to as "Rule 434 Information."
Any prospectus relating to the offering of the Securities used before such
registration statement (as so amended) became effective, and any prospectus
relating to the offering of the Securities that omitted, as applicable, the Rule
430A Information or the Rule 434 Information, that was used after such
effectiveness and prior to the execution and delivery of this Agreement, in each
case excluding any Snyder preliminary prospectus (as defined below) attached
thereto, is herein called a "Trust preliminary prospectus." Such registration
statement (as so amended), including the exhibits thereto and the schedules
thereto, if any, at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, as applicable, is herein called the
"Trust Registration Statement." Any registration statement filed by the Trust
pursuant to Rule 462(b) of the 1933 Act Regulations is herein referred to as the
"Trust Rule 462(b) Registration Statement," and after such filing the term
"Trust Registration Statement" shall include the Trust Rule 462(b) Registration
Statement. The final prospectus relating to the offering of the Securities,
excluding any Snyder Prospectus (as defined below) attached thereto, in the form
first furnished to the Underwriters for use in connection with the offering of
the Securities is referred to herein as the "Trust Prospectus." If Rule 434 is
relied on, the term "Trust Prospectus" shall refer to the Trust preliminary
prospectus dated ___________, 1997 together with the Trust Term Sheet and all
references in this Agreement to the date of the Trust Prospectus shall mean the
date of the Trust Term Sheet. For purposes of this Agreement, all references to
the Trust Registration Statement, any Trust preliminary prospectus, the Trust
Prospectus or any Trust Term Sheet or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the Commission pursuant
to its Electronic Data Gathering, Analysis and Retrieval system ("EDGAR").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-33691) covering the
registration under the Securities Act of 1933, as amended (the "1933 Act"), of
the shares of Snyder Common Stock deliverable upon exchange of the Securities,
including the related preliminary prospectus or prospectuses. Each prospectus,
based on the prospectus included in such registration statement, used before
such registration statement became effective is herein called a "Snyder
preliminary prospectus." Such registration statement, including the exhibits
thereto and the schedules thereto, if any, at the time it became effective, is
herein called the "Snyder Registration Statement." Any registration statement
filed pursuant to Rule 462(b) of the rules and regulations of the Commission
under the 1933 Act (the "1933 Act Regulations") is herein referred to as the
"Snyder Rule 462(b) Registration Statement," and after such filing the term
"Snyder Registration Statement" shall include the Snyder Rule 462(b)
Registration Statement. The final prospectus, based on the prospectus included
in the Snyder Registration Statement, in the form first furnished to the
Underwriters for use in connection with the offering of the Securities is herein
called the "Snyder Prospectus." For purposes of this Agreement, all references
to the Snyder Registration Statement, any Snyder preliminary prospectus, the
Snyder Prospectus or any amendment or supplement to any of the
________________________
(SM) Service mark of Merrill Lynch & Co., Inc.
2
<PAGE>
foregoing shall be deemed to (i) include the copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval system
("EDGAR") and (ii) to exclude any prospectus of other portion of Snyder's
registration statement of Form S-1 (No. 333-33691) relating to the offer and
sale by Snyder and certain stockholders of Snyder of up to _____________ shares
of Snyder Common Stock in concurrent U.S. and international offerings, but shall
include any prospectus or other portion of such registration statement relating
to the Snyder Common Stock deliverable upon exchange of the STRYPES.
Concurrently with the execution and delivery of the Purchase Agreement, the
Representatives have indicated that the Trust will enter into a forward purchase
contract (the "Forward Purchase Contract") with the Contracting Stockholders
pursuant to which the Contracting Stockholders will agree to sell and the Trust
will agree to purchase, immediately prior to the Exchange Date, the shares of
Snyder Common Stock required by the Trust to exchange all of the Securities on
the Exchange Date as described in the Trust Prospectus, subject to the
Contracting Stockholders' rights to satisfy their respective obligations
thereunder in whole or in part through a cash payment based on the value of the
Snyder Common Stock otherwise deliverable.
The public offering of the Securities is expected to close concurrently
with offerings of shares of Snyder Common Stock described in the Snyder
Registration Statement pursuant to a U.S. Purchase Agreement and an
International Purchase Agreement (the "U.S. Purchase Agreement" and the
"International Purchase Agreement", respectively).
SECTION 1. Representations and Warranties.
------------------------------
(a) Representations and Warranties by the Company and the Partnership.
Each of the Company and the Partnership, jointly and severally, represents and
warrants to each Underwriter and to the Trust as of the date hereof, as of the
Closing Time referred to in Section 2(c) of the Purchase Agreement, and as of
each Date of Delivery (if any) referred to in Section 2(b) of the Purchase
Agreement, and agrees with each Underwriter and the Trust as follows:
(i) Compliance with Registration Requirements. Each of the Snyder
-----------------------------------------
Registration Statement and any Snyder Rule 462(b) Registration Statement
has become effective under the 1933 Act and no stop order suspending the
effectiveness of the Snyder Registration Statement or any Snyder Rule
462(b) Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to the
knowledge of the Company or the Partnership, are contemplated by the
Commission, and any request on the part of the Commission for additional
information has been complied with.
At the respective times the Snyder Registration Statement, any Snyder
Rule 462(b) Registration Statement and any post-effective amendments
thereto became effective and at the Closing Time (and, if any Option
Securities are purchased, at the Date of Delivery), the Snyder Registration
Statement, the Snyder Rule 462(b) Registration Statement and any amendments
and supplements thereto complied and will comply in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and did
not and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading. Neither the Snyder Prospectus nor
any amendments or supplements thereto, at the time the Snyder
3
<PAGE>
Prospectus or any amendments or supplements thereto were issued and at the
Closing Time (and, if any Option Securities are purchased, at the Date of
Delivery), included or will include an untrue statement of a material fact
or omitted or will omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading. If Rule 434 is used, the Company will comply
with the requirements of Rule 434 and the Snyder Prospectus shall not be
"materially different", as such term is used in Rule 434, from the
prospectus included in the Snyder Registration Statement at the time it
became effective. The representations and warranties in this subsection
shall not apply to statements in or omissions from the Snyder Registration
Statement or the Snyder Prospectus made in reliance upon and in conformity
with (A) information furnished to the Company in writing by any Underwriter
through the Representatives expressly for use in the Snyder Registration
Statement or the Snyder Prospectus, (B) information furnished to the
Company in writing by the Trust expressly for use in the Snyder
Registration Statement or the Snyder Prospectus or (C) information
furnished to the Company in writing by any Contracting Stockholder
expressly for use in the Snyder Registration Statement or the Snyder
Prospectus.
Each Snyder preliminary prospectus and the Snyder Prospectus filed as
part of the Snyder Registration Statement as originally filed or as part of
any amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each Snyder preliminary prospectus and the Snyder
Prospectus delivered to the Underwriters for use in connection with the
offering of the Securities was identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the
extent permitted by Regulation S-T.
(ii) Independent Accountants. The accountants who certified the
-----------------------
financial statements and supporting schedules included in the Snyder
Registration Statement are independent public accountants as required by
the 1933 Act and the 1933 Act Regulations.
(iii) Financial Statements. The financial statements included in the
--------------------
Snyder Registration Statement and the Snyder Prospectus, together with the
related schedules and notes, present fairly the financial position of the
Company and its consolidated subsidiaries and of American List Corporation,
respectively, in each case at the dates indicated and the statement of
operations, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries and of American List Corporation, respectively,
in each case for the periods specified; said financial statements have been
prepared in conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods involved.
The supporting schedules included in the Snyder Registration Statement
present fairly in accordance with GAAP the information required to be
stated therein. The selected financial data and the summary financial
information included in the Snyder Prospectus present fairly the
information shown therein and have been compiled on a basis consistent with
that of the audited financial statements included in the Snyder
Registration Statement. The financial statements have
4
<PAGE>
been prepared in accordance with the Commission's rules and guidelines with
respect to combined financial statements and have been properly compiled on
the bases described therein. The pro forma financial data included in the
Snyder Registration Statement and the Snyder Prospectus present fairly the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the bases described therein,
and the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions
and circumstances referred to therein.
(iv) No Material Adverse Change in Business. Since June 30, 1997 or
--------------------------------------
such later dates as of which information is given in the Snyder
Registration Statement and the Snyder Prospectus, except as otherwise
stated therein, (A) there has been no material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business (a
"Material Adverse Effect"), (B) there have been no transactions entered
into by the Company or any of its subsidiaries, other than those in the
ordinary course of business, which are material with respect to the Company
and its subsidiaries considered as one enterprise, and (C) there has been
no dividend or distribution of any kind declared, paid or made by the
Company or any subsidiary on any class of its capital stock or any
partnership interest, as the case may be.
(v) Good Standing of the Company. The Company has been duly
----------------------------
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Snyder Prospectus and to enter into and perform its
obligations under this Agreement; and the Company is duly qualified as a
foreign corporation to transact business and is in good standing in each
other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
(vi) Good Standing of Subsidiaries. Each subsidiary of the Company
-----------------------------
listed on Exhibit 21 to the Snyder Registration Statement (each, a
"Subsidiary" and, collectively, the "Subsidiaries") has been duly organized
and is validly existing as a corporation or partnership, as the case may
be, in good standing under the laws of the jurisdiction of its
incorporation or organization, as the case may be, has corporate or
partnership, as the case may be, power and authority to own, lease and
operate its properties and to conduct its business as described in the
Snyder Prospectus and is duly qualified as a foreign corporation or
partnership, as the case may be, to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good standing
would not result in a Material Adverse Effect; all of
5
<PAGE>
the issued and outstanding capital stock of each corporate Subsidiary has
been duly authorized and validly issued, is fully paid and non-assessable
and is owned by the Company directly or indirectly through subsidiaries,
and all of the partnership interests of the Partnership have been duly
authorized and validly issued and are owned by the Company, directly or
indirectly through Snyder Marketing Services, Inc., in each case free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim
or equity; none of the outstanding shares of capital stock or partnership
interests, as the case may be, of any Subsidiary was issued in violation of
the preemptive or similar rights of any securityholder of such Subsidiary.
The only subsidiaries of the Company are (a) the subsidiaries listed on
Exhibit 21 to the Snyder Registration Statement and (b) certain other
subsidiaries which, considered in the aggregate as a single subsidiary, do
not constitute a "significant subsidiary" as defined in Rule 1-02 of
Regulation S-X.
(vii) Capitalization. The authorized, issued and outstanding capital
--------------
stock of the Company is as set forth in the Snyder Prospectus in the column
entitled "Actual" under the caption "Capitalization" (except for subsequent
issuances, if any, pursuant to the U.S. Purchase Agreement and the
International Purchase Agreement, pursuant to reservations, agreements or
employee benefit plans referred to in the Snyder Prospectus or pursuant to
the exercise of convertible securities or options referred to in the Snyder
Prospectus). The shares of issued and outstanding capital stock of the
Company, including the shares of Snyder Common Stock owned by the
Contracting Stockholders, have been duly authorized and validly issued and
are fully paid and non-assessable; none of the outstanding shares of
capital stock of the Company, including the shares of Snyder Common Stock
owned by the Contracting Stockholders, was issued in violation of the
preemptive or other similar rights of any securityholder of the Company.
(viii) Authorization. This Agreement has been duly authorized,
-------------
executed and delivered by the Company and the Partnership. The performance
of this Agreement and the consummation of the transactions contemplated in
this Agreement and the Registration Statement, and compliance by the
Company and the Partnership with its obligations under this Agreement have
been duly authorized by the Company and the Partnership, respectively.
(ix) Authorization and Description of Securities. The Snyder Common
-------------------------------------------
Stock conforms to all statements relating thereto contained in the Snyder
Prospectus and such description conforms to the rights set forth in the
instruments defining the same; no holder of Snyder Common Stock will be
subject to personal liability by reason of being such a holder; and the
issuance of the Snyder Common Stock is not subject to the preemptive or
other similar rights of any securityholder of the Company.
(x) Absence of Defaults and Conflicts. Neither the Company nor any
---------------------------------
of the Subsidiaries is in violation of its charter or by-laws or
partnership agreement, as the case may be, or in default in the performance
or observance of any obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, deed of trust, loan
6
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or credit agreement, note, lease or other agreement or instrument to which
the Company or any of the Subsidiaries is a party or by which any of them
may be bound, or to which any of the property or assets of the Company or
any of the Subsidiaries is subject (collectively, "Agreements and
Instruments"), except for such defaults that would not result in a Material
Adverse Effect; and the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated herein and
compliance by the Company and the Partnership with their respective
obligations hereunder have been duly authorized by all necessary corporate
or partnership, as the case may be, action and do not and will not, whether
with or without the giving of notice or passage of time or both, conflict
with or constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Company or any Subsidiary
pursuant to, the Agreements and Instruments (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not
result in a Material Adverse Effect), nor will such action result in any
violation of the provisions of the charter or by-laws or partnership
agreement, as the case may be, of the Company or any Subsidiary or any
applicable law, statute, rule, regulation, judgment, order, writ or decree
of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any Subsidiary or any of
their assets, properties or operations. As used herein, a "Repayment
Event" means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on such
holder's behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company or any
Subsidiary.
(xi) Absence of Labor Dispute. No labor dispute with the employees
------------------------
of the Company or any Subsidiary exists or, to the knowledge of the Company
or the Partnership is imminent, and neither the Company nor the Partnership
is aware of any existing or imminent labor disturbance by the employees of
any of its principal suppliers, manufacturers, customers or contractors,
which, in either case, might reasonably be expected to result in a Material
Adverse Effect.
(xii) Absence of Proceedings. There is no action, suit, proceeding,
----------------------
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company or the Partnership, threatened, against or affecting the
Company or any subsidiary, which is required to be disclosed in the Snyder
Registration Statement (other than as disclosed therein), or which might
reasonably be expected to result in a Material Adverse Effect, or which
might reasonably be expected to materially and adversely affect the
properties or assets thereof or the consummation of the transactions
contemplated hereunder or the performance by the Company or the Partnership
of its obligations hereunder; and the aggregate of all pending legal or
governmental proceedings to which the Company or any subsidiary is a party
or of which any of their respective properties or assets is the subject
which are not described in the Snyder Registration Statement, including
ordinary routine litigation incidental to the business, could not
reasonably be expected to result in a Material Adverse Effect.
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<PAGE>
(xiii) Accuracy of Exhibits. There are no contracts or documents
--------------------
which are required to be described in the Snyder Registration Statement or
the Snyder Prospectus or to be filed as exhibits thereto which have not
been so described and filed as required.
(xiv) Possession of Intellectual Property. The Company and the
-----------------------------------
Subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
now operated by them, and neither the Company nor the Partnership has
received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest of the
Company or any of the Subsidiaries therein, and which infringement or
conflict (if the subject of any unfavorable decision, ruling or finding) or
invalidity or inadequacy, singly or in the aggregate, would result in a
Material Adverse Effect.
(xv) Absence of Further Requirements. No filing with, or
-------------------------------
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required by or on behalf of the Company or the Partnership
for the performance by the Company or the Partnership of its obligations
hereunder, except such as have been already obtained or as may be required
under the 1933 Act or the 1933 Act Regulations and foreign or state
securities or blue sky laws.
(xvi) Possession of Licenses and Permits. The Company and the
----------------------------------
Subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them; the Company and the
Subsidiaries are in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would not,
singly or in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except when
the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and neither the Company nor any of the
Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xvii) Title to Property. The Company and the Subsidiaries have good
-----------------
and marketable title to all real property owned by the Company and the
Subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Snyder Prospectus, including those disclosed in the
8
<PAGE>
financial statements and the related notes included therein, or (b) do not,
singly or in the aggregate, materially affect the value of such property
and do not interfere with the use made and proposed to be made of such
property by the Company or any of the Subsidiaries; and all of the leases
and subleases material to the business of the Company and its subsidiaries,
considered as one enterprise, and under which the Company or any of its
subsidiaries holds properties described in the Snyder Prospectus, are in
full force and effect, and neither the Company nor the Partnership has any
notice of any material claim of any sort that has been asserted by anyone
adverse to the rights of the Company or any Subsidiary under any of the
leases or subleases mentioned above, or affecting or questioning the rights
of the Company or such Subsidiary to the continued possession of the leased
or subleased premises under any such lease or sublease.
(xviii) Investment Company Act. The Company is not an "investment
----------------------
company" or an entity "controlled" by an "investment company" as such terms
are defined in the Investment Company Act of 1940, as amended (the "1940
Act").
(xix) Environmental Laws. Except as described in the Snyder
------------------
Registration Statement and except as would not, singly or in the aggregate,
result in a Material Adverse Effect, (a) neither the Company nor any of the
Subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common
law or any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land surface
or subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous Materials") or to
the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (b) the Company and the Subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements, (c)
there are no pending or threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings relating to any
Environmental Law against the Company or any of the Subsidiaries and (d)
there are no events or circumstances that might reasonably be expected to
form the basis of an order for clean-up or remediation, or an action, suit
or proceeding by any private party or governmental body or agency, against
or affecting the Company or any of the Subsidiaries relating to Hazardous
Materials or any Environmental Laws.
(xx) Registration Rights. Except as described in the Snyder
-------------------
Registration Statement and the Snyder Prospectus, there are no persons with
registration rights or other similar rights to have any securities
registered pursuant to the Snyder Registration Statement or otherwise
registered by the Company under the 1933 Act.
9
<PAGE>
(xxi) Certain Contracts. Each of the Company's contracts with AT&T
-----------------
Communications, Inc. ("AT&T") have been duly executed and delivered by each
of the Partnership or the Company, as the case may be, and, to the
knowledge of the Company and the Partnership, by AT&T and are in full force
and effect. There does not exist any default, event or condition that,
after notice or lapse of time or both, could give rise under any such
contract to any claim by any person against the Company or any subsidiary
or would constitute a default thereunder on the part of the Company or any
subsidiary or any other party thereto.
(xxii) Compliance with Laws. Each of the Company and the
--------------------
Subsidiaries is in compliance with all applicable laws, statutes,
ordinances, rules or regulations of any applicable jurisdiction, the
enforcement of which, singly or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect.
(xxiii) Taxes. Each of the Company and the Subsidiaries has filed
-----
all material federal, state, local and foreign income and franchise tax
returns required to be filed by it and has paid all taxes shown as due
thereon, other than taxes which are being contested in good faith or state
withholding taxes and for both of which adequate reserves have been
established in accordance with GAAP; and neither the Company nor the
Partnership has knowledge of any tax deficiency which has been or might be
asserted or threatened against the Company or any Subsidiary other than
those for which adequate reserves have been established in accordance with
GAAP. Adequate charges, accruals and reserves have been provided for in
the financial statements referred to in Section 1(a)(iii) hereof in respect
of all material federal, state, local and foreign taxes for all periods as
to which the tax liability of the Company or any Subsidiary has not been
finally determined or remains open to examination by applicable taxing
authorities.
(xxiv) Insurance. Each of the Company and the Subsidiaries carries
---------
or is entitled to the benefits of insurance in such amounts and covering
such risks as it reasonably believes are sufficient to cover potential
losses or damages, and all such insurance is in full force and effect.
(b) Officer's Certificates. Any certificate signed by any officer of the
Company or the Partnership and delivered to the Representatives or counsel for
the Underwriters or to the Trust or counsel for the Trust in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Company or the Partnership, as the case may be, to each Underwriter and to the
Trust, as the case may be, as to the matters covered thereby.
SECTION 2. Covenants of the Company and the Partnership. Each of the
--------------------------------------------
Company and the Partnership, jointly and severally, covenants with each
Underwriter and with the Trust as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 2(b) hereof, will comply with the requirements of
Rule 430A or Rule 434, as applicable, and will notify the Representatives and
the Trust immediately, and confirm the notice
10
<PAGE>
in writing, (i) when any post-effective amendment to the Snyder Registration
Statement, shall become effective, or any supplement to the Snyder Prospectus or
any amended Snyder Prospectus shall have been filed, (ii) of the receipt of any
comments from the Commission, (iii) of any request by the Commission for any
amendment to the Snyder Registration Statement or any amendment or supplement to
the Snyder Prospectus or for additional information, and (iv) of the issuance by
the Commission of any stop order suspending the effectiveness of the Snyder
Registration Statement or of any order preventing or suspending the use of any
Snyder preliminary prospectus, or of the suspension of the qualification of the
shares of Snyder Common Stock deliverable upon exchange of the Securities for
offering or sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly effect the
filings necessary pursuant to Rule 424(b) and will take such steps as it deems
necessary to ascertain promptly whether the form of prospectus transmitted for
filing under Rule 424(b) was received for filing by the Commission and, in the
event that it was not, it will promptly file such prospectus. The Company will
make every reasonable effort to prevent the issuance of any stop order and, if
any stop order is issued, to obtain the lifting thereof at the earliest possible
moment.
(b) Filing of Amendments. The Company will give the Representatives and
the Trust notice of the Company's intention to file or prepare any amendment to
the Snyder Registration Statement (including any filing under Rule 462(b)), any
Snyder Term Sheet or any amendment, supplement or revision to either the
prospectus included in the Snyder Registration Statement at the time it became
effective or to the Snyder Prospectus, will furnish the Representatives and the
Trust with copies of any such documents a reasonable amount of time prior to
such proposed filing or use, as the case may be, and will not file or use any
such document to which the Representatives or the Trust or counsel for the
Underwriters or counsel for the Trust shall object.
(c) Delivery of Snyder Registration Statements. The Company has furnished
or will deliver to the Representatives and the Trust and counsel for the
Underwriters and the Trust, without charge, signed copies of the Snyder
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein) and
signed copies of all consents and certificates of experts, and will also deliver
to the Representatives and the Trust, without charge, a conformed copy of the
Snyder Registration Statement as originally filed and of each amendment thereto
(without exhibits) for each of the Underwriters and the Trust. The copies of
the Snyder Registration Statement and each amendment thereto furnished to the
Underwriters and the Trust will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(d) Delivery of Snyder Prospectuses. The Company has delivered to each
Underwriter, without charge, as many copies of each Snyder preliminary
prospectus as such Underwriter reasonably requested, and the Company and the
Partnership hereby consent to the use of such copies for purposes permitted by
the 1933 Act. The Company will furnish to each Underwriter, without charge,
during the period when the Snyder Prospectus is required to be delivered under
the 1933 Act or the Securities Exchange Act of 1934, as amended (the "1934
Act"), such number
11
<PAGE>
of copies of the Snyder Prospectus (as amended or supplemented) as such
Underwriter may reasonably request. The Snyder Prospectus and any amendments or
supplements thereto furnished to the Underwriters and the Trust will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply with
the 1933 Act and the 1933 Act Regulations so as to permit the completion of the
distribution of the Securities as contemplated in the Purchase Agreement and in
the Snyder Prospectus. If at any time when a prospectus is required by the 1933
Act to be delivered in connection with sales of the Securities, any event shall
occur or condition shall exist as a result of which it is necessary, in the
opinion of counsel for the Underwriters, counsel for the Trust or for the
Company, to amend the Snyder Registration Statement or amend or supplement any
Snyder Prospectus in order that the Snyder Prospectus will not include any
untrue statements of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any such time to amend
the Snyder Registration Statement or amend or supplement any Snyder Prospectus
in order to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, the Company will promptly prepare and file with the Commission,
subject to Section 3(b) hereof, such amendment or supplement as may be necessary
to correct such statement or omission or to make the Snyder Registration
Statement or the Snyder Prospectus comply with such requirements, and the
Company will furnish to the Underwriters and the Trust such number of copies of
such amendment or supplement as the Underwriters and the Trust may reasonably
request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the shares of Snyder Common Stock
issuable in exchange for the Securities for offering and sale under the
applicable securities laws of such states and other jurisdictions of the United
States as the Representatives may designate and to maintain such qualifications
in effect through the Exchange Date; provided, however, that the Company shall
not be obligated to file any general consent to service of process or to qualify
as a foreign corporation or as a dealer in securities in any jurisdiction in
which it is not so qualified or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so subject. In
each jurisdiction in which the shares of Snyder Common Stock issuable in
exchange for Securities have been so qualified, the Company will file such
statements and reports as may be required by the laws of such jurisdiction to
continue such qualification in effect through the Exchange Date.
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
12
<PAGE>
(h) Restriction on Sale of Securities. During a period of 90 days from
the date of the Snyder Prospectus, neither the Company nor the Partnership will,
without the prior written consent of the Representatives, (i) directly or
indirectly, offer, pledge, sell, contract to sell, sell any option or contract
to purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase or otherwise transfer or dispose of any share of Snyder
Common Stock or any securities convertible into or exercisable or exchangeable
for Snyder Common Stock or file any registration statement under the 1933 Act
with respect to any of the foregoing or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Snyder Common Stock,
whether any such swap or transaction described in clause (i) or (ii) above is to
be settled by delivery of Snyder Common Stock or such other securities, in cash
or otherwise. The foregoing sentence shall not apply to (A) the Snyder Common
Stock deliverable upon exchange of the Securities or the other Snyder Common
Stock registered under the Snyder Registration Statement, (B) any options to
purchase shares of Snyder Common Stock granted or shares of Snyder Common Stock
sold pursuant to any employee benefit plan of the Company whether existing at
the date of this Agreement or adopted subsequent hereto and the filing of any
registration statement on Form S-8 related thereto or (C) any option or warrant
to purchase shares of Snyder Common Stock or shares of Snyder Common Stock
issued or sold in connection with an acquisition by the Company and the filing
of any registration statement on Form S-4 in connection therewith as long as all
executive officers, directors and other affiliates of the person being acquired
have agreed in writing to be bound by the obligations and restrictions of the
foregoing sentence of this Section 2(h).
(i) Reporting Requirements. The Company, during the period when the
Snyder Prospectus is required to be delivered under the 1933 Act or the 1934
Act, will file all documents required to be filed with the Commission pursuant
to the 1934 Act within the time periods required by the 1934 Act and the rules
and regulations of the Commission thereunder.
SECTION 3. Payment of Expenses.
-------------------
(a) Expenses. The Company and the Partnership, jointly and severally, will
pay all expenses incident to the performance of its obligations under this
Agreement, including (i) the preparation, printing and filing of the Snyder
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation, printing
(or reproduction) and delivery to the Underwriters and the Trust of this
Agreement, and (iii) the fees and disbursements of the Company's counsel,
accountants and other advisors, (iv) the qualification of the shares of Snyder
Common Stock deliverable upon exchange of the Securities under securities laws
in accordance with the provisions of Section 2(f) hereof, including filing fees
and the reasonable fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of the Blue Sky
Survey and any supplement thereto, (v) the printing and delivery to the
Underwriters of copies of each Snyder preliminary prospectus and of the Snyder
Prospectus and any amendments or supplements thereto, (vi) the preparation,
printing and delivery to the Underwriters of copies of the Blue Sky Survey and
any supplement thereto, and (vii) the filing fees incident to, and the
reasonable fees and disbursements of counsel to the Underwriters
13
<PAGE>
in connection with, the review by the National Association of Securities
Dealers, Inc. of the terms of the offering and sale of the shares of Snyder
Common Stock deliverable upon exchange of the Securities.
(b) Allocation of Expenses. The provisions of this Section 3 shall not
affect any agreement that the Company, the Partnership and the Contracting
Stockholders may make for the sharing of such costs and expenses.
SECTION 4. Indemnification.
---------------
(a) Indemnification of Underwriters and the Trust. Subject to the
provisions set forth in this Section 4(a), the Company and the Partnership,
jointly and severally, agree to indemnify and hold harmless each Underwriter,
the Trust and each person, if any, who controls any Underwriter or the Trust
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act,
as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Snyder Registration
Statement (or any amendment thereto) or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
Snyder preliminary prospectus or the Snyder Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact made in the Trust Registration
Statement (or any amendment thereto) or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact made in any Trust
preliminary prospectus or the Trust Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided that the indemnity agreement contained in this clause (ii) shall
only apply to any loss, liability, claim, damage or expense to the extent
arising out of any untrue statement or omission, or alleged untrue
statement or omission, made in reliance upon and in conformity with written
information furnished to the Trust by the Company expressly for use in the
Trust Registration Statement (or any amendment thereto) or any Trust
preliminary prospectus or the Trust Prospectus (or any amendment or
supplement thereto).
14
<PAGE>
(iii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, referred to under (i) and (ii) above;
provided that (subject to Section 4(d) below) any such settlement is
effected with the written consent of the Company and the Partnership; and
(iv) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by the Underwriters or the
Trust, as the case may be), reasonably incurred in investigating, preparing
or defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, referred to under (i) or (ii) above,
to the extent that any such expense is not paid under (i), (ii) or (iii)
above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with (A) written information furnished to the Company by
any Underwriter through Merrill Lynch expressly for use in the Snyder
Registration Statement (or any amendment thereto), or any Snyder preliminary
prospectus or the Snyder Prospectus (or any amendment or supplement thereto),
(B) written information furnished to the Company by the Trust expressly for use
in the Snyder Registration Statement (or any amendment thereto), or any Snyder
preliminary prospectus or the Snyder Prospectus (or any amendment or supplement
thereto) or (C) written information furnished to the Company by the Contracting
Stockholders expressly for use in the Snyder Registration Statement (or any
amendment thereto), or any Snyder preliminary prospectus or the Snyder
Prospectus (or any amendment or supplement thereto); provided, further, that
this indemnity agreement shall not apply to any loss, liability, claim, damage
or expense of any Underwriter or person, if any, who controls such Underwriter
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
with respect to any Snyder preliminary prospectus to the extent that any such
loss, liability, claim, damage or expense of any Underwriter results solely from
the fact that such Underwriter sold Securities to a person as to whom the
Company or the Partnership, as the case may be, shall establish that there was
not sent by commercially reasonable means, at or prior to the written
confirmation of such sale, a copy of the Snyder Prospectus in any case where
such delivery is required by the 1933 Act, if the Company has previously
furnished copies thereof in sufficient quantity to such Underwriter and the
loss, claim, damage or liability of such Underwriter results from an untrue
statement or omission of a material fact contained in the Snyder preliminary
prospectus that was corrected in the Snyder Prospectus.
(b) Indemnification of Company, Directors, Officers. Each Underwriter
severally agrees to indemnify and hold harmless the Company, its directors, each
of its officers who signed the Snyder Registration Statement, and each person,
if any, who controls the Company within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act against any and all loss,
15
<PAGE>
liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Snyder Registration Statement (or any amendment thereto), or any Snyder
preliminary prospectus or the Snyder Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by any Underwriter through Merrill Lynch expressly for use in the
Snyder Registration Statement (or any amendment thereto) or such Snyder
preliminary prospectus or the Snyder Prospectus (or any amendment or supplement
thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 4(a) above,
counsel to the indemnified parties shall be selected by Merrill Lynch; and, in
the case of parties indemnified pursuant to Section 4(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 4 or Section
5 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested in accordance with this Agreement an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 4(a)(iii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
16
<PAGE>
(e) Other Agreements with Respect to Indemnification. The provisions of
this Section shall not affect any agreements between the Company and the
Partnership with respect to indemnification.
SECTION 5. Contribution. If the indemnification provided for in Section 4
------------
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then the parties hereto intend that the Company
and the Partnership, jointly and severally, on the one hand and the Underwriters
and the Trust on the other hand, in accordance with the applicable provisions of
Section 4(a) hereof, shall contribute to the aggregate amount of such losses,
liabilities, claims, damages and expenses incurred by such indemnified party, as
incurred, (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, the Partnership and the Contracting
Stockholders on the one hand and the Underwriters and the Trust on the other
hand from the offering of the Securities pursuant to the Purchase Agreement or
(ii) if the allocation provided by clause (i) is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company, the Partnership and the Contracting Stockholders on the one hand and
the Underwriters and the Trust on the other hand in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the offering of the Securities pursuant
to the Purchase Agreement shall be deemed to be such that the Underwriters and
the Trust shall be responsible for that portion of the aggregate amount of such
losses, liabilities, claims, damages and expenses represented by the percentage
that the total underwriting discount received by the Underwriters, as set forth
on the cover of the Trust Prospectus, or, if Rule 434 is used, the corresponding
location on the Trust Term Sheet, bears to the aggregate initial public offering
price of the Securities as set forth on such cover and the Company and the
Partnership, jointly and severally, shall be responsible for the balance.
The relative fault of the Company, the Partnership and the Contracting
Stockholders on the one hand and the Underwriters and the Trust on the other
hand shall be determined by reference to, among other things, whether any such
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company, the Partnership or the Contracting Stockholders on the one hand or by
the Underwriters or the Trust on the other hand and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
Notwithstanding the provisions of this Section 5, the Underwriters and the
Trust shall not be required to contribute any amount in excess of the amount by
which the total price at which the Securities underwritten by the Underwriters
and distributed to the public were offered to the public exceeds the amount of
any damages which the Underwriters and the Trust have otherwise been required to
pay by reason of any such untrue or alleged untrue statement or omission or
alleged omission.
17
<PAGE>
The Company, the Partnership, the Underwriters and the Trust agree that it
would not be just and equitable if contribution pursuant to this Section 5 were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
Section 5. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
5 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 5, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as the Underwriter; each
person, if any, who controls the Trust within the meaning of Section 15 of the
1933 Act shall have the same rights to contribution as the Trust; and each
director of the Company, each officer of the Company who signed the Snyder
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 5 are several in
proportion to the number of Securities set forth opposite their respective names
on Schedule A hereto and not joint.
The provisions of this Section shall not affect any agreements between the
Company and the Partnership with respect to contribution.
SECTION 6. Representations, Warranties and Agreements to Survive Delivery.
--------------------------------------------------------------
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or the Partnership submitted pursuant to
the Purchase Agreement, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the Underwriters or
controlling persons, or by or on behalf of the Trust or controlling persons or
by or on behalf of the Company or the Partnership, and shall survive delivery of
the Securities to the Underwriters pursuant to the Purchase Agreement.
SECTION 7. Termination. In the event that the Underwriters terminate the
-----------
Purchase Agreement as provided in Section 5, Section 9 or Section 10 thereof,
the Underwriters shall promptly give the Company and the Partnership notice
thereof and this Agreement shall simultaneously terminate, except that the
provisions of Section 3, the indemnity agreements set forth in Section 4, the
contribution provisions set forth in Section 5, and the provisions of Section 6
shall remain in effect.
18
<PAGE>
SECTION 8. Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Representatives shall be directed to: Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, North Tower, World Financial Center, New
York, New York 10281, attention of Syndicate Operations; notices to the Trust
shall be directed to it c/o Puglisi & Associates, 850 Library Avenue, Suite 204,
Newark, Delaware 19715, attention of Donald J. Puglisi; notices to the Company
and the Partnership shall be directed to it at Snyder Communications, Inc., Two
Democracy Center, 6903 Rockledge Drive, Fifteenth Floor, Bethesda, Maryland
20817, attention of A. Clayton Perfall.
SECTION 9. Parties. This Agreement shall inure to the benefit of and be
-------
binding upon the Underwriters, the Trust, the Company and the Partnership and
their respective successors. Nothing expressed or mentioned in this Agreement
is intended or shall be construed to give any person, firm or corporation, other
than the Underwriters, the Trust, the Company and the Partnership and their
respective successors and the controlling persons and officers and directors
referred to in Sections 4 and 5 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of the
Underwriters, the Trust, the Company and the Partnership and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from the Underwriters shall be deemed
to be a successor by reason merely of such purchase.
SECTION 10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
-------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 11. Effect of Headings. The Article and Section headings herein
------------------
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
19
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the Underwriters, the Trust, the Company and the Partnership in accordance with
its terms.
Very truly yours,
SNYDER COMMUNICATIONS, INC.
By ________________________________________
Name:
Title:
SNYDER COMMUNICATIONS, L.P.
By ________________________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
GOLDMAN, SACHS & CO.
MORGAN STANLEY & CO. INCORPORATED
MONTGOMERY SECURITIES
BEAR, STEARNS & CO. INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By ______________________________________
Authorized Signatory
For themselves and as Representatives of the other Underwriters named in
Schedule A hereto.
20
<PAGE>
SNYDER STRYPES TRUST
By ____________________________________
Donald J. Puglisi,
as Managing Trustee
21
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Number
of Initial
Name of Underwriter Securities
- ----------------------------------------- -------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated...........................
Goldman, Sachs & Co....................
Montgomery Securities..................
Morgan Stanley & Co. Incorporated......
Bear, Stearns & Co. Inc................
----------
Total..................................
==========
</TABLE>
Sch A - 1
22
<PAGE>
EXHIBIT (J)
CUSTODIAN AGREEMENT
This CUSTODIAN AGREEMENT dated as of this 10th day of September, 1997, by
and between The Bank of New York, a New York banking corporation (the
"Custodian"), and Snyder STRYPES Trust (such trust and the trustees thereof
acting in their capacity as such being referred to herein as the "Trust"), a
business trust organized 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 September 15, 1997 (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 D.M.S. Endowment, LLC, Sutton
Partners, LLC, A.O. Roberts, LLC and USN College Marketing, L.P., each being a
stockholder of Snyder Communications, Inc., 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 Custodian to
perform certain custodial duties for the Trust; and
WHEREAS, the Custodian is willing to assume such duties, 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:
1. DEFINITIONS. Capitalized terms not otherwise defined herein shall
have the respective meanings specified in the Trust Agreement.
__________________
(SM) Service mark of Merrill Lynch & Co., Inc.
<PAGE>
2. APPOINTMENT OF CUSTODIAN; TRANSFER OF ASSETS. The Trust hereby
constitutes and appoints the Custodian, and the Custodian accepts such
appointment, as agent of the Trust and as custodian of all of the property,
including but not limited to, the Contract, the U.S. Treasury Securities, the
Temporary Investments, any cash and any other property at any time owned or held
by the Trust (collectively, the "Assets"). The Trust hereby deposits the Assets
with the Custodian and the Custodian hereby accepts such into its custody, and
the Trust shall deliver to the Custodian all of the Assets, including all
monies, securities and other property received by the Trust at any time during
the period of this Agreement, subject to the following terms and conditions.
The Custodian hereby agrees that it shall hold the Assets in a segregated
custody account, separate and distinct from all other accounts, in accordance
with Section 17(f) of, and in such manner as shall constitute the segregation
and holding in trust within the meaning of, the Investment Company Act and the
rules and regulations thereunder. The Trust authorizes the Custodian, for any
Assets held hereunder, to use the services of any United States securities
depository permitted to perform such services for registered investment
companies and their custodians under Rule 17f-4 under the Investment Company Act
and which has been approved by the Trust, including but not limited to, The
Depository Trust Company and the Federal Reserve Book Entry System. The
Custodian shall be under no duty or obligation to inspect, review or examine any
Assets to determine that they are genuine, enforceable, or appropriate for the
represented purpose or that they are other than what they purport to be on their
face.
3. ASSET DISPOSITION; EXAMINATIONS. The Custodian shall have no power or
authority to assign, hypothecate, pledge or otherwise dispose of the Assets,
except pursuant to a written direction in accordance with paragraph 4 below and
then only for the account of the Trust. The Assets shall be subject to no lien
or charge of any kind in favor of the Custodian for itself or for any other
Person claiming through the Custodian. The Custodian shall permit actual
examination of the Assets by the Trust's independent public accountant at the
end of each annual and semi-annual fiscal period of the Trust and at least one
other time during the fiscal year of the Trust chosen by such independent public
accountant and shall permit the inspection of the Assets by the Commission
through its employees or agents during the normal business hours of the
Custodian upon reasonable request.
4. AUTHORIZED ACTIONS. The Custodian shall take such reasonable actions
with respect to the Assets as directed in writing by the Trust or by any officer
of the Administrator duly authorized by the Trustees to give written
instructions on behalf of the Trust and named in such certified resolutions of
the Trustees, as may be received by the Custodian from time to time.
5. CUSTODIAN'S ACTIONS TAKEN IN GOOD FAITH. In connection with the
performance of its duties under this Agreement, the Custodian shall have no
duties or obligations other than those specifically set forth herein or in the
Trust Agreement or as may subsequently be agreed in writing by the parties
hereto and shall be under no liability to the
2
<PAGE>
Trust or any Holder for any action taken in good faith in reliance on any paper,
order, certification, list, demand, request, consent, affidavit, notice,
opinion, direction, endorsement, assignment, resolution, draft or other
document, prima facie properly executed, or for the disposition of the Assets
pursuant to the Trust Agreement or in respect of any action taken or suffered
under the Trust Agreement in good faith, in accordance with an opinion of
counsel or at the direction of the Trust pursuant hereto; provided that this
provision shall not protect the Custodian against any liability to which it
would otherwise be subject by reason of its willful misfeasance or gross
negligence in the performance of its duties, or its reckless disregard of its
obligations and duties hereunder.
Notwithstanding any other provision of this Agreement, the Custodian shall
under no circumstances be liable for any punitive, exemplary, indirect or
consequential damages.
6. TRUST AGREEMENT VALIDITY. The Custodian shall not be responsible for
the validity or sufficiency of the Trust Agreement or the due execution thereof,
or for the form, character, genuineness, sufficiency, value or validity of any
of the Assets and the Custodian shall in no event assume or incur any liability,
duty or obligation to any Holder or to the Trust, other than as expressly
provided for herein. The Custodian shall not be responsible for or in respect
of the validity of any signature by or on behalf of the Trust.
7. LITIGATION OBLIGATIONS, COSTS AND INDEMNITY. The Custodian shall not
be under any obligation to appear in, prosecute or defend any action which in
its opinion may involve it in expense or liability, unless it shall be furnished
with such reasonable security and indemnity against such expense or liability as
it may require, and any reasonable pecuniary costs of the Custodian from such
actions shall be expenses which are reimbursable pursuant to paragraph 13
hereof.
8. TAXES; TRUST EXPENSES. In no event shall the Custodian be personally
liable for any taxes or other governmental charges imposed upon or in respect of
the Assets or upon the monies, securities or other properties included therein.
The Custodian shall be reimbursed and indemnified by the Trust for all such
taxes and charges, for any tax or charge imposed against the Trust and for any
reasonable expenses, including reasonable counsel fees, interest, penalties and
additions to tax which the Custodian may sustain or incur with respect to such
taxes or charges.
9. CUSTODIAN RESIGNATION, SUCCESSION. (a) The Custodian may resign by
executing an instrument in writing resigning as Custodian and delivering the
same to the Trust, not less than 60 days before the date specified in such
instrument when, subject to clause (b) of this paragraph 9, such resignation is
to take effect. Upon receiving such notice of resignation, the Trust shall use
its reasonable efforts promptly to appoint a successor Custodian in the manner
and meeting the qualifications provided in the Trust Agreement, by written
instrument or instruments delivered to the resigning Custodian and the successor
Custodian.
3
<PAGE>
(b) In case no successor Custodian shall have been appointed within 30
days after notice of resignation has been received by the Trust, the resigning
Custodian may forthwith apply to a court of competent jurisdiction for the
appointment of a successor Custodian. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribed, appoint a successor
Custodian.
10. CUSTODIAN REMOVAL. The Trust may remove the Custodian upon 60 days
prior written notice to the Custodian and appoint a successor Custodian. In
case at any time the Custodian shall not meet the requirements set forth in the
Trust Agreement or shall become incapable of acting or if a court having
jurisdiction shall enter a decree or order for relief in respect of the
Custodian in an involuntary case, or the Custodian shall commence a voluntary
case, under any applicable bankruptcy, insolvency, or other similar law now or
hereafter in effect, or any receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) for the Custodian or for any substantial part
of its property shall be appointed, or the Custodian shall make any general
assignment for the benefit of creditors, or shall generally fail to pay its
debts as they become due, the Trust may remove the Custodian immediately and
appoint a successor Custodian. The termination of the Administration Agreement
or the Paying Agent Agreement shall cause the removal of the Custodian
simultaneously therewith.
11. TRANSFERS TO SUCCESSOR CUSTODIAN. Upon the request of any successor
Custodian, the Custodian hereunder shall, upon payment of all amounts due it,
execute and deliver an instrument acknowledged by it transferring to such
successor Custodian all the rights and powers of the resigning Custodian; and
the resigning Custodian shall transfer, deliver and pay over to the successor
Custodian the Assets at the time held by it hereunder, if any, together with all
necessary instruments of transfer and assignment or other documents properly
executed necessary to effect such transfer and such of the records or copies
thereof maintained by the resigning Custodian in the administration hereof as
may be requested by the successor Custodian, and shall thereupon be discharged
from all duties and responsibilities hereunder. Any resignation or removal of
the Custodian shall become effective upon such acceptance of appointment by the
successor Custodian. The indemnification of the resigning Custodian provided
for hereunder shall survive any resignation, discharge or removal of the
Custodian hereunder.
12. CUSTODIAN MERGER, CONSOLIDATION. Any corporation into which the
Custodian 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 Custodian shall be a party, shall be the successor Custodian 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.
4
<PAGE>
13. COMPENSATION; EXPENSES. The Custodian shall receive compensation for
performing the usual, ordinary, normal and recurring services under this
Custodian Agreement and, with the prior written approval of the Trust,
reimbursement for any and all reasonable expenses and disbursements incurred
hereunder, as provided in Section 3.1 of the Administration Agreement.
14. SECTION 17(f) QUALIFICATION. The Custodian hereby represents that it
is qualified to act as a custodian under Section 17(f) of the Investment Company
Act.
15. INDEMNIFICATION. The Trust shall indemnify and hold the Custodian
harmless from and against any loss, damages, liability or claim incurred by
reason of any inaccuracy in information furnished to the Custodian by the Trust,
or any act or omission in the course of, connected with or arising out of any
services to be rendered hereunder, and any reasonable cost or 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, liability or claim, provided that the Custodian shall not be
indemnified and held harmless from and against any such loss, damages,
liability, claim or reasonable cost or expense arising from 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 Custodian 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 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 Custodian from and against any loss or liability by reason of such
settlement or judgment. Neither the Federal Reserve Book Entry System nor The
Depository Trust Company shall be deemed to be agents of the Custodian.
16. RIGHTS OF SET-OFF; BANKER'S LIEN. The Custodian hereby waives all
rights of set-off or banker's lien it may have with respect to the Assets held
by it as Custodian hereunder.
17. TERMINATION. This Agreement shall terminate upon the earlier of the
dissolution of the Trust or the appointment of a successor Custodian.
18. CHOICE OF 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.
5
<PAGE>
19. NOTICES. All notices and other communications 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 19):
The Trust: Snyder STRYPES Trust
c/o Puglisi & Associates
850 Library Avenue, Suite 204
Newark, Delaware 19715
Telephone: (302) 738-6680
Telecopier: (302) 738-7210
The Custodian: The Bank of New York
101 Barclay Street
New York, New York 10286
Attn: Betty Cocozza
Telephone: (212) 815-5366
Telecopier: (212) 815-7157
Except as otherwise specifically provided herein, all notices and other
communications provided for hereunder shall be in writing and 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).
20. NO THIRD PARTY BENEFICIARIES. Nothing herein, express or implied,
shall give to any Person, other than the Trust, the Custodian and their
respective successors and assigns, any benefit of any legal or equitable right,
remedy or claim hereunder.
21. AMENDMENTS; TRUST AGREEMENT CHANGES; WAIVER. This Agreement shall not
be deemed or construed to be modified, amended, rescinded, cancelled or waived,
in whole or in part, except by a written instrument signed by a duly authorized
6
<PAGE>
representative of the party to be charged. The Trust shall notify the Custodian
of any change in the Trust Agreement prior to the effective date of any such
change. 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.
22. 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.
7
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
SNYDER STRYPES TRUST
By /s/ Donald J. Puglisi
------------------------------
Donald J. Puglisi,
as Managing Trustee
THE BANK OF NEW YORK
By /s/ Betty A. Cocozza
-------------------------------
Name: Betty A. Cocozza
Title: Assistant Vice President
8
<PAGE>
EXHIBIT K(1)
ADMINISTRATION AGREEMENT
This ADMINISTRATION AGREEMENT dated as of this day of September, 1997,
by and between The Bank of New York, a New York banking corporation (the
"Administrator"), and Snyder STRYPES Trust (such trust and the trustees thereof
acting in their capacity as such being referred to herein as the "Trust"), a
business trust organized 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 September , 1997 (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 D.M.S. Endowment, LLC, Sutton
Partners, LLC, A.O. Roberts, LLC and USN College Marketing, L.P. (the
"Contracting Stockholders"), each being a stockholder of Snyder Communications,
Inc., 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:
_____________________
(SM) Service mark of Merrill Lynch & Co., Inc.
<PAGE>
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 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 2.8 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 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 September ,
1997, among the Contracting Stockholders, Merrill Lynch & Co., Inc. ("Merrill
Lynch") 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 2.6, 2.7 and 2.8 of the Trust Agreement and to
otherwise perform the duties of the Paying Agent referred to in the Trust
Agreement;
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(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 Merrill Lynch and the
Contracting Stockholders pursuant to the Fund Indemnity Agreement dated as of
September , 1997 (the "Fund Indemnity Agreement"), among the Trust, the
Contracting Stockholders, and Merrill Lynch of any claim for Indemnification
Expenses (as defined in the Fund Indemnity Agreement) or any threatened claim
for Indemnification Expenses;
(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;
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(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 8.2(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 Snyder 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 Tax
Event Cash Settlement Option is exercised) nor more than 30 calendar days prior
to the related Tax Event Acceleration Date, provide written notice of the
Contracting Stockholders' election to accelerate the Contract upon the
occurrence of a Tax Event to Holders of record of the 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).
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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 2.5(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, 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 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 EDGAR 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. For services to be rendered by the Administrator
pursuant to this Agreement, as custodian under the Custodian Agreement, dated as
of September , 1997, between the Administrator, as custodian, and the Trust,
and as collateral agent under the Security and Pledge Agreement, dated as of
September , 1997, among the Administrator, as collateral agent, the
Contracting Stockholders and the Trust, as paying agent, transfer agent and
registrar (the "Paying Agent") under the Paying Agent Agreement, dated as of
September , 1997, 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.
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
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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:
(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.
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<PAGE>
(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.
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.
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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: Snyder STRYPES Trust
c/o Puglisi & Associates
850 Library Avenue, Suite 204
Newark, Delaware 19715
Telephone: (302) 738-6680
Telecopier: (302) 738-7210
The Administrator: The Bank of New York
101 Barclay Street
New York, New York 10286
Attn: Betty Cocozza
Telephone: (212) 815-5366
Telecopier: (212) 815-7157
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).
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<PAGE>
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 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.
SNYDER STRYPES TRUST
By:____________________________
Donald J. Puglisi,
as Managing Trustee
THE BANK OF NEW YORK
By:_________________________
Name:
Title:
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SCHEDULE I
<TABLE>
<CAPTION>
Item Amount
- ---- ------
<S> <C>
NYSE Listing Fees $
Printing (other than STRYPES Certificates)
Legal Fees
Blue Sky Fees
Miscellaneous --------
Total
</TABLE>
Sch-I-1
<PAGE>
SCHEDULE II
<TABLE>
<CAPTION>
Item Amount
- ---- ------
<S> <C>
STRYPES Certificates $
Fees and Expenses of Special Delaware
Counsel to the Trust ------
Total
</TABLE>
Sch-II-1
<PAGE>
EXHIBIT K(2)
PAYING AGENT AGREEMENT
This PAYING AGENT AGREEMENT dated as of this day of September, 1997,
by and between The Bank of New York, a New York banking corporation (the "Paying
Agent"), and Snyder STRYPES Trust (such trust and the trustees thereof acting in
their capacity as such being referred to herein as the "Trust"), a business
trust organized pursuant to the Business Trust Act (the "Delaware 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 September , 1997 (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 with The Bank of New York, as agent and custodian for
and on behalf of the Trust, and D.M.S. Endowment, LLC, Sutton Partners, LLC,
A.O. Roberts, LLC and USN College Marketing, L.P., each being a stockholder of
Snyder Communications, Inc., and to issue Structured Yield Product Exchangeable
for Stock/(SM)/ (the "STRYPES") to the public in accordance with the terms and
conditions of the Trust Agreement;
WHEREAS, the Trust desires to engage the services of the Paying Agent to
assume certain responsibilities and to perform certain duties as the paying
agent, transfer agent and registrar with respect to the STRYPES 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
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:
_____________
/(SM)/ Service mark of Merrill Lynch & Co., Inc.
<PAGE>
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 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
STRYPES. 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.
2.2 CERTIFICATES AND NOTICES. The Trust 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 Trust so delivered.
2.3 PAYMENTS AND INVESTMENTS. The Paying Agent shall make payments out of
the Trust Account as provided for in Section 3.2 of the Trust Agreement. The
Paying Agent on behalf of the Trust shall take the actions set forth in Sections
2.6, 2.7, 2.8, 3.4 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 Temporary Investments in accordance with Section 3.4 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 Investment 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 Trust from time to time or
pursuant to standing instructions from the Trust, 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.
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2.4 INSTRUCTIONS FROM ADMINISTRATOR. The Paying Agent shall receive and
execute all instructions from the Administrator, except to the extent 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 the STRYPES sold pursuant
to the Purchase Agreement are originally issued, certificates for the STRYPES
shall be issued by the Trust, and, at the written request of the Trust,
registered in such names and such denominations as the Underwriters shall have
previously requested of the Trust, executed manually or in facsimile by the
Managing Trustee and countersigned by the Paying Agent. At no time shall the
aggregate number of STRYPES represented by such countersigned certificates
exceed the number of then outstanding STRYPES, except as permitted by
Section 3.4.
3.2 REGISTRY OF HOLDERS. The Paying Agent shall maintain a registry of
the Holders of the STRYPES.
3.3 REGISTRATION OF TRANSFER OF THE STRYPES. The STRYPES 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 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
(i) evidence to its satisfaction of the destruction, loss or theft of any
certificate for a STRYPES and (ii) 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, and 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
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<PAGE>
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 STRYPES. 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 Trust 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 CANCELLED CERTIFICATES; RECORDS. The Paying Agent
shall retain certificates which have been cancelled in transfer or in exchange
and accompanying documentation in accordance with applicable rules and
regulations of the Securities and Exchange Commission (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. 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
Trust and seek to 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 (ii) expose it to liability,
unless the Trust 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 business trust under the Delaware
Act and has full power under the Trust Agreement to execute and deliver this
Agreement and to authorize, create and issue the STRYPES;
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<PAGE>
(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 STRYPES complies with
all applicable laws of the State of Delaware and the State of New York;
(d) the STRYPES have been duly and validly authorized, executed and
delivered by the Trust and are validly issued;
(e) the offer and sale of the STRYPES subject to the Purchase
Agreement has been registered under the Securities Act and 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 STRYPES;
(f) the execution and delivery of this Agreement and the issuance and
delivery of the STRYPES 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 STRYPES.
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
<PAGE>
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 Managing Trustee.
(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 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.
(d) 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 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 Paying
Agent itself.
5.3 DISCLAIMER. The Paying Agent makes no representation as to (a) the
first two recitals of this Agreement or (b) the validity, sufficiency,
marketability or adequacy of the STRYPES.
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 Trust, for all reasonable expenses, disbursements
and advances incurred or made by the Paying Agent in accordance with any
provision of this Agreement (including the reasonable compensation and the
reasonable 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 or claim arising out of or in connection
with the performance of its obligations under this Agreement and any reasonable
cost or expense (including the reasonable 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) incurred in
connection with any such loss, liability or claim, provided such loss,
liability, claim or reasonable cost 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. Notwithstanding the foregoing, it is understood that (i) the Trust
shall not, in respect of the legal expenses of the Paying Agent 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
6
<PAGE>
shall not be liable for any settlement of any proceeding effected without the
written 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
Paying Agent from and against any loss or liability by reason of such settlement
or judgment. 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
dissolved, in which case this Agreement shall terminate ten days after the date
of dissolution 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. Notwithstanding the
foregoing, the termination of the Trust Agreement, the Collateral Agreement, the
Administration Agreement or the Custodian 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) The respective rights and duties of the Trust and the Paying
Agent under this Agreement shall cease upon termination of this Agreement,
except as otherwise provided in this paragraph (b) and except that Section 5.4
hereof shall survive the termination of this Agreement. Upon termination of this
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.
6.2 COMMUNICATIONS. All notices, requests and other communications 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 6.2):
7
<PAGE>
The Trust: Snyder STRYPES Trust
c/o Puglisi & Associates
850 Library Avenue
Suite 204
Newark, Delaware 19715
Telephone: (302) 738-6680
Telecopier: (302) 738-7210
The Paying Agent: The Bank of New York
101 Barclay Street
New York, New York 10286
Attn: Betty Cocozza
Telephone: (212) 815-5366
Telecopier: (212) 815-7157
A copy of any notice, request or other communication given by any party
under this Agreement shall be directed 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. Except for communications authorized to be
made by telephone pursuant to this Agreement, each such notice, request or
communication shall be in writing and 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 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). Communications shall be given by
the Trust (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 Relationship Manager.
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.
8
<PAGE>
6.4 NO THIRD PARTY BENEFICIARIES. Nothing herein, express or implied,
shall give to any Person, other than the Trust, 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, cancelled 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.
(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 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,
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 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.
9
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
SNYDER STRYPES TRUST
By: __________________________
Donald J. Puglisi,
as Managing Trustee
THE BANK OF NEW YORK
By: __________________________
Name:
Title:
10
<PAGE>
Exhibit K(3)
______________________________________________________________________________
______________________________________________________________________________
SNYDER STRYPES TRUST
FORWARD PURCHASE CONTRACT
-------------------------
Dated: September __, 1997
_____________________________________________________________________________
______________________________________________________________________________
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
I. DEFINITIONS..................................................... 2
1.1. Definitions................................................ 2
"Acceleration Amount"...................................... 2
"Acceleration Amount Notice"............................... 2
"Acceleration Date"........................................ 2
"Acceleration Value"....................................... 2
"Administrator"............................................ 3
"Affiliate"................................................ 3
"Agreement"................................................ 3
"Aggregate Acceleration Value"............................. 3
"Bankruptcy Code".......................................... 3
"Business Day"............................................. 3
"Cash Payment Amount"...................................... 3
"Closing".................................................. 3
"Closing Date"............................................. 3
"Closing Price"............................................ 3
"Collateral"............................................... 3
"Collateral Agent"......................................... 3
"Contract Commitment"...................................... 3
"Contract Consideration"................................... 4
"control".................................................. 4
"Date of Delivery"......................................... 4
"Debt"..................................................... 4
"Early Settlement Date".................................... 4
"Event of Default"......................................... 4
"Exchange Amount".......................................... 4
"Exchange Rate Formula".................................... 4
"Exchange Date"............................................ 5
"Exchange Price............................................ 5
"Extraordinary Cash Dividend".............................. 5
"Firm Consideration Amount"................................ 5
"Firm Contract Commitment"................................. 5
"Firm Payment Date"........................................ 5
"Independent Dealers"...................................... 5
"Initial Price"............................................ 5
"Initial STRYPES".......................................... 5
"Liquidation Value"........................................ 5
"Maximum Contract Consideration"........................... 6
"NYSE"..................................................... 6
"Option Consideration Amount".............................. 6
"Option Contract Commitment"............................... 6
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
"Option STRYPES"................................................. 6
"Permitted Activities"........................................... 6
"Person"......................................................... 6
"Purchase Agreement"............................................. 6
"Purchaser"...................................................... 6
"Purchaser Repayment Event"...................................... 6
"Reorganization Event"........................................... 6
"Securities Act"................................................. 6
"Security and Pledge Agreement".................................. 7
"Seller" and "Sellers"........................................... 7
"Seller Repayment Event"......................................... 7
"Settlement Date"................................................ 7
"Share Components"............................................... 7
"Snyder Communications".......................................... 7
"Snyder Common Stock"............................................ 7
"Snyder Communications Successor"................................ 7
"STRYPES"........................................................ 7
"Tax Event"...................................................... 7
"Tax Event Acceleration Amount".................................. 7
"Tax Event Acceleration Date".................................... 7
"Tax Event Acceleration Notice".................................. 8
"Tax Event Date"................................................. 8
"Threshold Appreciation Price"................................... 8
"Total Firm Contract Commitment"................................. 8
"Total Option Contract Commitment"............................... 8
"Trading Day".................................................... 8
"Transaction Value".............................................. 8
"Trust Agreement"................................................ 8
"Underwriters"................................................... 8
II. CONTRACT CONSIDERATION OR CASH SETTLEMENT............................. 8
2.1. Sale and Purchase................................................ 8
2.2. Consideration.................................................... 9
2.3. Delivery of Contract Consideration............................... 10
2.4. No Fractional Shares............................................. 11
2.5. Cash Settlement Option........................................... 11
2.6. Conditions to Purchaser's Obligations............................ 11
III. EXCHANGE RATE FORMULA ADJUSTMENTS..................................... 12
3.1. (a) Adjustment for Subdivisions, Splits, Combinations or
Reclassifications........................................... 12
(b) Adjustment for Issuance of Certain Rights or Warrants....... 13
(c) Adjustment for Distributions................................ 14
(d) Issuance in Payment of Dividend............................. 14
(e) General; Exchange Price Adjustment.......................... 14
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
IV. REPRESENTATIONS AND WARRANTIES OF THE SELLERS............. 15
V. REPRESENTATIONS AND WARRANTIES OF PURCHASER............... 17
VI. COVENANTS................................................. 18
6.1. Collateral.......................................... 18
6.5. Taxes............................................... 21
6.6. Tax Treatment....................................... 21
6.7. Certain Notices..................................... 22
6.8. Limitations on Trading During Certain Days.......... 23
6.9. Further Assurances.................................. 23
VII. ACCELERATION OF DELIVERY.................................. 23
7.1. Liquidation of Agreement Upon Event
of Default.......................................... 23
7.2. Snyder Communications Reorganization
Event; Delivery..................................... 24
7.3. Acceleration Upon Tax Event......................... 25
VIII.MISCELLANEOUS............................................. 26
8.1 Adjustments to Exchange Rate Formula; Selection of
Independent Firm.................................... 26
8.2. Notices............................................. 26
8.3. Governing Law; Consent to Jurisdiction.............. 27
8.4. WAIVER OF JURY TRIAL................................ 27
8.5. Headings; Entire Agreement.......................... 28
8.6. Amendments; Waivers................................. 28
8.7. Termination......................................... 28
8.8. Successors, Assigns................................. 28
8.9. No Third Party Rights............................... 28
8.10. Application of Bankruptcy Code...................... 28
8.11. Counterparts........................................ 28
</TABLE>
iii
<PAGE>
FORWARD PURCHASE CONTRACT
This Forward Purchase Contract is made as of this ____ day of September __,
1997 among Snyder STRYPES 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.)) (such trust and the trustees
thereof acting in their capacity as such being referred to herein as the
"Purchaser"), The Bank of New York, a New York banking corporation, as agent and
custodian for and on behalf of the Purchaser (the "Collateral Agent") and as
Administrator (as defined herein), and D.M.S. Endowment, LLC, a Delaware limited
liability company, Sutton Partners, LLC, a Delaware limited liability company,
A.O. Roberts, LLC, a Delaware limited liability company, and USN College
Marketing, L.P., a Delaware limited partnership (each, a "Seller" and,
collectively, the "Sellers").
WHEREAS, the Purchaser has filed with the Securities and Exchange
Commission a registration statement on Form N-2 (File Nos. 333-33707 and 811-
08337) and [Pre-Effective Amendments No. 1, No. 2 and No. 3] thereto
contemplating the offering of up to 4,600,000 of its Structured Yield Product
Exchangeable for Stock/(SM)/ (the "STRYPES"), the terms of which contemplate
that, on , 2000 (the "Exchange Date"), each such STRYPES will be mandatorily
exchanged for a specified number of shares of the Common Stock, par value $.001
per share (the "Snyder Common Stock"), of Snyder Communications, Inc., a
Delaware corporation ("Snyder Communications"), or, in certain circumstances,
cash, or a combination of cash and Snyder Common Stock, with an equal value.
WHEREAS, the Purchaser has agreed, pursuant to a purchase agreement dated
the date hereof (the "Purchase Agreement") among the Purchaser, the Sellers and
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman, Sachs & Co., Morgan
Stanley & Co. Incorporated, Montgomery Securities, Bear, Stearns & Co. Inc. and
each of the other Underwriters named in Schedule A thereto (collectively, the
"Underwriters", which term shall also include any underwriter substituted as
provided in Section 10 of the Purchase Agreement), for which Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Goldman, Sachs & Co., Morgan Stanley & Co.
Incorporated, Montgomery Securities and Bear, Stearns & Co. Inc. are acting as
representatives, to issue and sell to the Underwriters, acting severally and not
jointly, an aggregate of 4,000,000 STRYPES (the "Initial STRYPES") and, at the
Underwriters' option, all or any part of 600,000 additional STRYPES (the "Option
STRYPES") to cover over-allotments, if any.
WHEREAS, the STRYPES are to be issued pursuant to an Amended and Restated
Trust Agreement, dated as of September 15, 1997 (the "Trust Agreement"), among
the trustees of the Purchaser and ML IBK Positions, Inc., as Sponsor.
___________________________
/(SM)/ Service mark of Merrill Lynch & Co., Inc.
<PAGE>
WHEREAS, in exchange for certain consideration to be paid by the Purchaser
hereunder, the Purchaser and the Sellers desire to provide for the future
acquisition, sale and delivery of that number of shares of Snyder Common Stock
(or, in the event there shall occur a Reorganization Event (as defined herein),
cash and/or Marketable Securities (as defined herein) in lieu thereof) required
by the Purchaser in order to exchange all of the STRYPES on the Exchange Date,
at the price established under this Agreement.
WHEREAS, the Sellers collectively own at least 4,600,000 shares of Snyder
Common Stock.
WHEREAS, pursuant to a Security and Pledge Agreement to be dated as of
September __, 1997 (the "Security and Pledge Agreement"), among the Purchaser,
the Sellers, and the Collateral Agent, an aggregate of 4,000,000 shares of
Snyder Common Stock initially will be delivered to the Collateral Agent in order
to secure the Sellers' delivery and other obligations hereunder.
WHEREAS, the Sellers and the Purchaser desire that ownership of the
Contract Consideration (as defined herein) (including, without limitation,
voting rights and rights to receive any dividends, interest, distributions and
other payments in respect thereof) remain in the Sellers unless and until such
Contract Consideration is delivered to the Purchaser pursuant to the provisions
of this Agreement and the Security and Pledge Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained, the parties hereto, intending to be legally bound,
hereby mutually covenant and agree as follows:
I.
Definitions
-----------
1.1. Definitions. For all purposes of this Agreement, except as otherwise
-----------
expressly provided or unless the context otherwise requires, the following
terms, when used herein, shall have the following meanings:
"Acceleration Amount" has the meaning specified in Section 7.1 hereof.
"Acceleration Amount Notice" has the meaning specified in Section 7.1
hereof.
"Acceleration Date" means the date on which an Event of Default shall
have occurred with respect to any Seller.
"Acceleration Value" has the meaning specified in Section 7.1 hereof.
2
<PAGE>
"Administrator" means The Bank of New York, the Administrator for the
Purchaser under the Administration Agreement to be dated as of September
__, 1997, or any successor thereto.
"Affiliate" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with
such Person or is a partner in, or a director or officer of, such Person.
"Agreement" means this Forward Purchase Contract and any schedules and
exhibits hereto.
"Aggregate Acceleration Value" has the meaning specified in Section
7.1 hereof.
"Bankruptcy Code" means title 11 of the United States Code.
"Business Day" means any day that is not a Saturday, a Sunday or a day
on which the NYSE, The NASDAQ National Market, or banking institutions or
trust companies in The City of New York are authorized or obligated by law
or executive order to close.
"Cash Payment Amount" has the meaning specified in Section 2.5 hereof.
"Closing" has the meaning specified in Section 2.3 hereof.
"Closing Date" means the date of the Closing.
"Closing Price" means, with respect to any security on any date of
determination, the closing sale price (or, if no closing price is reported,
the last reported sale price) of such security on the NYSE on such date or,
if such security is not listed for trading on the NYSE on any such date, as
reported in the composite transactions for the principal United States
securities exchange on which such security is so listed, or, if such
security is not listed on a United States national or regional securities
exchange, as reported by the National Association of Securities Dealers,
Inc. Automated Quotation System, or, if such security is not so reported,
the last quoted bid price for such security in the over-the-counter market
as reported by the National Quotation Bureau or similar organization, or,
if such bid price is not available, the market value of the shares of such
security on such date as determined by a nationally recognized independent
investment banking firm retained for this purpose by the Administrator.
"Collateral" has the meaning ascribed thereto in the Security and
Pledge Agreement.
"Collateral Agent" means the financial institution identified as such
in the introductory paragraph of this Agreement, or any successor thereto.
"Contract Commitment" has the meaning specified in Section 2.1(a)
hereof.
3
<PAGE>
"Contract Consideration" means, with respect to any Seller, (i) in the
case of a Closing under Section 2.1 hereof, the aggregate number of shares
of Snyder Common Stock deliverable by such Seller on the Settlement Date as
provided in Section 2.1, assuming that such Seller has not elected to
exercise the option contained in Section 2.5 to deliver cash in lieu of
such Snyder Common Stock; (ii) in the case of a Closing under Section 7.1
hereof, the aggregate number of shares of Snyder Common Stock deliverable
by such Seller on the Acceleration Date as provided in Section 7.1 hereof;
(iii) in the case of a Closing under Section 7.2 hereof, the amount of cash
and/or the aggregate number of units of any Marketable Security deliverable
by such Seller on the Early Settlement Date as provided in Section 7.2
hereof; and (iv) in the case of a Closing under Section 7.3 hereof, the
amount of cash and the aggregate number of shares of Snyder Common Stock
deliverable by such Seller on the Tax Event Acceleration Date as provided
in Section 7.3 hereof, assuming that such Seller has not elected to
exercise the option contained in Section 2.5 to deliver cash in lieu of
such Snyder Common Stock.
"control" (including the terms "controlled by" or "under common
control with") means, as to any Person, the possession, direct or indirect,
of the power to vote ten percent or more of the securities having ordinary
voting power for the election of directors of such Person or to direct or
cause the direction of the management and policies of such Person, whether
through ownership of voting securities or by contract or otherwise.
"Date of Delivery" has the meaning specified in Section 2.1(b) hereof.
"Debt" means, without duplication, (i) indebtedness for borrowed
money, (ii) obligations evidenced by bonds, debentures, notes or other
similar instruments, (iii) obligations to pay the deferred purchase price
of property or services, (iv) obligations as lessee under leases which
shall have been or should be, in accordance with generally accepted
accounting principles, recorded as capital leases, and (v) obligations
under direct or indirect guaranties in respect of, and obligations
(contingent or otherwise) to purchase or otherwise acquire, or otherwise to
assure a creditor against loss in respect of, indebtedness or obligations
of others of the kinds referred to in clauses (i) through (iv) above.
"Early Settlement Date" has the meaning specified in Section 7.2
hereof.
"Event of Default" means an Event of Default as defined in the
Security and Pledge Agreement.
"Exchange Amount" means the number of shares of Snyder Common Stock
determined as of 10:00 A.M. (New York City time) on the second Business Day
preceding the Exchange Date in accordance with the Exchange Rate Formula.
"Exchange Rate Formula" means the following formula, subject to
adjustment as a result of certain dilution events relating to the Snyder
Common Stock as provided for in Article III: (a) if the Exchange Price is
greater than or equal to the Threshold
4
<PAGE>
Appreciation Price, shares of Snyder Common Stock, (b) if the
Exchange Price is less than the Threshold Appreciation Price but is greater
than the Initial Price, a fractional share of Snyder Common Stock so that
the value thereof (determined based on the Exchange Price) equals the
Initial Price and (c) if the Exchange Price is less than or equal to the
Initial Price, one share of Snyder Common Stock.
"Exchange Date" has the meaning specified in the first recital in this
Agreement.
"Exchange Price" means, subject to adjustment as provided for in
Section 3.1(e), the average Closing Price per share of Snyder Common Stock
on the 20 Trading Days immediately prior to, but not including, the second
Trading Day preceding the Exchange Date.
"Extraordinary Cash Dividend" means, with respect to any consecutive
12-month period, the amount, if any, by which the aggregate amount of all
cash dividends on the Snyder Common Stock occurring in such 12-month period
(excluding any such dividends occurring in such period for which a prior
adjustment to the Exchange Rate Formula was previously made under Section
3.1) exceeds on a per share basis 10% of the average of the Closing Prices
per share of the Snyder Common Stock over such 12-month period; provided
that, for purposes of the foregoing definition, the amount of cash
dividends paid on a per share basis shall be appropriately adjusted to
reflect the occurrence during such period of any event described in Section
3.1 (a), (b) or (c).
"Firm Consideration Amount" has the meaning specified in Section
2.2(a) hereof.
"Firm Contract Commitment" has the meaning specified in Section 2.1(a)
hereof.
"Firm Payment Date" has the meaning specified in Section 2.2(a)
hereof.
"Independent Dealers" has the meaning specified in Section 7.1 hereof.
"Initial Price" means $__________.
"Initial STRYPES" has the meaning specified in the second recital in
this Agreement.
"Liquidation Value" means the aggregate proceeds received by the
Purchaser from the sale of zero-coupon U.S. Government securities pursuant
to Section 2.8(a) of the Trust Agreement upon receipt of notice from the
Sellers that they are exercising their option contained in Section 7.3
hereof to accelerate the settlement of their obligations hereunder.
"Marketable Securities" means any securities listed on a U.S. national
securities exchange or reported by The NASDAQ National Market.
5
<PAGE>
"Maximum Contract Consideration" has the meaning specified in Section
6.1 hereof.
"NYSE" means the New York Stock Exchange, Inc.
"Option Consideration Amount" has the meaning specified in Section
2.2(b) hereof.
"Option Contract Commitment, the distribution of" has the meaning
specified in Section 2.1(b) hereof.
"Option STRYPES" has the meaning specified in the second recital in
this Agreement.
"Permitted Activities" means, with respect to any Seller, activities
of such Seller directly related to: (i) the ownership of the Collateral
pledged by such Seller, (ii) the receipt of the Firm Consideration Amount
and the Option Consideration Amount; (iii) the receipt pursuant to Section
5 of the Security and Pledge Agreement of dividends, interest,
distributions and other payments in respect of the Collateral pledged by
such Seller; (iv) the investment and reinvestment of amounts received
pursuant to (ii) and (iii) above or amounts received from any such
investment or reinvestment (which may include loans to Affiliates); (v) the
distribution of a dividend or other distribution of amounts received
pursuant to (ii), (iii) and (iv), or the distribution of any of its
properties other than the Collateral; and (vi) the payment of such Seller's
expenses related to the foregoing and the conduct of its business in
accordance with the provisions of its limited liability company agreement
or limited partnership agreement, as the case may be. The term "Permitted
Activities" also means, with respect to USN College Marketing, L.P., a
limited partnership ("USN"), (A) the distribution or payment, to any
partner of USN, of dividends, capital returns or other distributions, in
cash or in kind, of any assets or property of USN, including but not
limited to shares of stock of Snyder Communications and any dividends or
other property held by USN on account thereof or deriving therefrom
(including without limitation from the ownership, sale, transfer,
assignment, devise, bequeath, giving, pledging, encumbering, hypothecation
or other disposal of any or all of USN's right, title or interest in any
share or shares of stock of Snyder Communications), in all such cases which
are not related to the Collateral or the STRYPES, and (B) the ownership,
sale, transfer, assignment, devise, bequeath, giving, pledging,
encumbering, hypothecation or other disposal of any or all of USN's rights,
title or interest in any share or shares of stock of Snyder Communications
not related to the Collateral or the STRYPES.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government
or any political subdivision or agency or instrumentality thereof.
"Purchase Agreement" has the meaning specified in the second recital
in this Agreement.
"Purchaser" has the meaning specified in the introductory paragraph of
this Agreement.
"Purchaser Repayment Event" means any event or condition which gives
the holder of any note, debenture or other evidence of indebtedness (or any
Person acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the
Purchaser.
"Reorganization Event" has the meaning specified in Section 7.2
hereof.
"Securities Act" means the Securities Act of 1933, as amended.
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<PAGE>
"Security and Pledge Agreement" has the meaning specified in the sixth
recital in this Agreement.
"Seller" and "Sellers" have the meanings specified in the introductory
paragraph of this Agreement.
"Seller Repayment Event" means, with respect to any Seller, any event
or condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any Person acting on such holder's behalf) the
right to require the repurchase, redemption or repayment of all or a
portion of such indebtedness by such Seller or any Affiliate of such
Seller.
"Settlement Date" has the meaning specified in Section 2.3 hereof.
"Share Components" means the numbers of shares of Snyder Common Stock
specified in clauses (a) and (c) of the Exchange Rate Formula.
"Snyder Communications" has the meaning specified in the first recital
in this Agreement.
"Snyder Common Stock" has the meaning specified in the first recital
in this Agreement; provided that, in the event of a reclassification
referred to in clause (iv) of Section 3.1(a), the term "Snyder Common
Stock" shall mean the other common stock of Snyder Communications issued
pursuant thereto.
"Snyder Communications Successor" means any surviving entity or
subsequent surviving entity of Snyder Communications.
"STRYPES" has the meaning specified in the first recital in this
Agreement.
"Tax Event" means that the Sellers jointly shall have delivered to the
Purchaser an opinion from a nationally recognized independent tax counsel
experienced in such matters to the effect that, as a result of (a) any
amendment to, or change in the laws (or any regulations thereunder) of the
United States or any taxing authority thereof or therein or (b) any
amendment to, clarification of, or change in, an interpretation or
application of such laws or regulations by any legislative body, court,
governmental agency or regulatory authority, enacted or promulgated, or
which interpretation is issued or which action is taken, on or after
_________, 1997, there is more than an insubstantial risk that, by reason
of the Sellers having entered into this Agreement, the Sellers would be
required to recognize gain for United States Federal income tax purposes
with respect to shares of Snyder Common Stock deliverable hereunder on a
date earlier than the Settlement Date.
"Tax Event Acceleration Amount" has the meaning specified in Section
7.3 hereof.
"Tax Event Acceleration Date" has the meaning specified in Section 7.3
hereof.
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<PAGE>
"Tax Event Acceleration Notice" has the meaning specified in Section
7.3 hereof.
"Tax Event Date" has the meaning specified in Section 7.3 hereof.
"Threshold Appreciation Price" means $__________.
"Total Firm Contract Commitment" means the sum of the Firm Contract
Commitments of the Sellers.
"Total Option Contract Commitment" has the meaning specified in
Section 2.1(b) hereof.
"Trading Day" means, with respect to any security the Closing Price of
which is being determined, a day on which such security (i) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (ii)
has traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of such security.
"Transaction Value" means, with respect to any Reorganization Event,
the sum of (x) for any cash received in such Reorganization Event, the
amount of cash received per share of Snyder Common Stock, (y) for any
property other than cash or securities received in such Reorganization
Event, an amount equal to the market value on the date the Reorganization
Event is consummated of such property received per share of Snyder Common
Stock as determined by a nationally recognized independent investment
banking firm retained for this purpose by the Administrator and (z) for any
securities received in such Reorganization Event, an amount equal to the
average Closing Price per unit of such securities on the 20 Trading Days
immediately prior to, but not including, the second Trading Day preceding
the Early Settlement Date, multiplied by the number of such securities
received for each share of Snyder Common Stock.
"Trust Agreement" has the meaning specified in the third recital in
this Agreement.
"Underwriters" has the meaning specified in the second recital in this
Agreement.
II.
Contract Consideration or Cash Settlement
-----------------------------------------
2.1. Sale and Purchase. (a) On the basis of the representations and
-----------------
warranties herein contained and subject to the terms and conditions herein set
forth, each Seller, severally and not jointly, agrees to sell, assign, transfer,
convey and deliver to the Purchaser on the Settlement Date, and the Purchaser
agrees to acquire from each Seller, severally and not jointly, on the Settlement
Date, the aggregate number of shares of Snyder Common Stock equal to the
8
<PAGE>
product of the Exchange Amount and such Seller's Contract Commitment. The term
"Contract Commitment" initially means, with respect to any Seller, such Seller's
Firm Contract Commitment and shall be increased by each Option Contract
Commitment of such Seller as provided in Section 2.1(b) below. The term "Firm
Contract Commitment" means, with respect to each Seller, the number set forth
opposite such Seller's name below:
<TABLE>
<CAPTION>
Firm Contract
Name of Seller Commitment
-------------- -------------
<S> <C> <C>
D.M.S. Endowment, LLC.............................
Sutton Partners, LLC..............................
A.O. Roberts, LLC.................................
USN College Marketing, L.P........................
-------------
Total Firm Contract Commitment............... 4,000,000
=============
</TABLE>
(b) In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Sellers,
severally and not jointly, hereby grant an option to the Purchaser to increase
the respective Contract Commitments of the Sellers by up to 600,000 in the
aggregate (the "Total Option Contract Commitment"). The option granted hereby
will expire 30 days after the date hereof and may be exercised in whole or in
part from time to time for the sole purpose of obtaining the aggregate number of
shares of Snyder Common Stock that would be required to be delivered by the
Purchaser upon exchange of any Option STRYPES issued by the Purchaser upon
exercise by the Underwriters of the option described in Section 2(b) of the
Purchase Agreement. The Purchaser may exercise the option granted hereby by
delivering to the Sellers, upon receipt by the Purchaser of notice that the
Underwriters are exercising their option to purchase Option STRYPES, prompt
notice of such exercise by the Underwriters, stating the number of Option
STRYPES as to which the Underwriters are then exercising the option and the time
and date of payment and delivery for such Option STRYPES (any such time and date
of delivery, a "Date of Delivery"). Upon delivery of any such notice as
aforesaid, each Seller's Contract Commitment shall be increased automatically by
a number equal to that portion of the total number of Option STRYPES then being
purchased by the Underwriters which such Seller's Firm Contract Commitment bears
to the Total Firm Contract Commitment, such number by which such Seller's
Contract Commitment shall so increase being referred to an "Option Contract
Commitment" of such Seller.
2.2. Consideration. (a) The consideration to be paid by the Purchaser for
-------------
each Seller's obligation hereunder to deliver (or cause to be delivered) the
Contract Consideration in respect of such Seller's Firm Contract Commitment
shall be an amount in cash (the "Firm Consideration Amount") equal to the
product of $___________ and such Seller's Firm Contract Commitment. Upon the
terms and subject to the conditions of this Agreement, the Purchaser shall
deliver to each Seller such Seller's Firm Consideration Amount at the offices of
Brown &
9
<PAGE>
Wood llp, One World Trade Center, New York, New York 10048, or at such other
place as shall be agreed upon by the Purchaser and the Sellers, at 9:00 A.M.
(New York City time) on the third (fourth, if the pricing of the STRYPES
offering occurs after 4:30 P.M. (New York City time) on any given day) Business
Day after the date hereof, or such other time not later than ten Business Days
after such date as shall be agreed upon by the Purchaser and the Sellers (such
time and date of payment being herein called the "Firm Payment Date").
(b) The consideration to be paid by the Purchaser in exchange for each
Seller's obligation hereunder to deliver (or cause to be delivered) the Contract
Consideration in respect of any Option Contract Commitment of such Seller shall
be an amount in cash (the "Option Consideration Amount") equal to the product of
such Option Contract Commitment and the Option Unit Consideration set forth in
an Option Unit Pricing Agreement substantially in the form of Exhibit A hereto.
The Option Unit Pricing Agreement may take the form of an exchange of any
standard form of written telecommunication among the Purchaser and the Sellers.
From and after the date of execution and delivery of any Option Unit Pricing
Agreement, this Agreement shall be deemed to incorporate such Option Unit
Pricing Agreement. Upon the terms and subject to the conditions of this
Agreement, the Purchaser shall deliver to each Seller such Seller's Option
Consideration Amount on the related Date of Delivery at the offices of Brown &
Wood llp, One World Trade Center, New York, New York 10048, or at such other
place as shall be agreed upon by the Purchaser and the Sellers.
(c) Payment of the Firm Consideration Amount and the Option Consideration
Amount to each Seller shall be made by Fedwire transfer of immediately available
funds to an account designated by such Seller, or such other form of payment
specified by such Seller, against delivery by such Seller to the Collateral
Agent of the number of shares of Snyder Common Stock necessary to comply with
such Seller's obligations under Section 6.1 hereof.
2.3. Delivery of Contract Consideration. Consummation of the acquisition,
----------------------------------
sale and delivery of the Contract Consideration to be sold, assigned,
transferred, conveyed and delivered by each Seller, severally and not jointly,
and acquired by the Purchaser, pursuant to this Agreement (the "Closing") shall
take place (i) in the case of an acquisition, sale and delivery pursuant to
Section 2.1 hereof, on the Business Day immediately preceding the Exchange Date
(the "Settlement Date"), (ii) in the case of an acquisition, sale and delivery
pursuant to Section 7.1 hereof, upon delivery of the Snyder Common Stock to the
Purchaser pursuant to Section 6(a) of the Security and Pledge Agreement, (iii)
in the case of an acquisition, sale and delivery pursuant to Section 7.2 hereof,
on the Early Settlement Date and (iv) in the case of an acquisition, sale and
delivery pursuant to Section 7.3 hereof, on the Tax Event Acceleration Date.
Delivery of the Contract Consideration shall be made at the offices of the
Administrator at 101 Barclay Street, New York, New York 10286, or at such other
place as shall be agreed upon by the Purchaser and the Sellers. Certificates
representing the shares of Snyder Common Stock (or units of any Marketable
Security deliverable pursuant to Section 7.2 hereof) in registered form that are
part of the Contract Consideration shall be registered in the Purchaser's name
or in the name of a depositary or a nominee of a depositary as requested by the
Purchaser, unless such shares of Snyder Common Stock (or units of any Marketable
Security) are represented by one or more global certificates registered in the
name of a depositary or a nominee of a depositary or are book entry securities,
in which event the Purchaser's interest in
10
<PAGE>
such securities shall be noted in a manner reasonably satisfactory to the
Purchaser and its counsel. Marketable Securities that are part of the Contract
Consideration delivered to the Purchaser shall be transferable by the Purchaser,
following receipt from the relevant Seller, without any restrictions not
generally applicable to all holders of such Marketable Securities (other than
restrictions created by the Purchaser or the Collateral Agent).
2.4. No Fractional Shares or Units. (a) No fractional shares or scrip
-----------------------------
representing fractional shares of Snyder Common Stock shall be delivered on the
Settlement Date. Instead of any fractional share of Snyder Common Stock which
would otherwise be deliverable by any Seller on the Settlement Date, such Seller
shall make a cash payment in respect of such fractional share in an amount equal
to the value of such fractional share based upon the Exchange Price.
(b) No fractional units or scrip representing fractional units of any
Marketable Security shall be delivered on the Early Settlement Date. Instead of
any fractional unit of any Marketable Security which would otherwise be
deliverable by any Seller on the Early Settlement Date, such Seller shall make a
cash payment in respect of such fractional unit in an amount equal to the value
of such fractional unit based upon the average Closing Price per unit of such
Marketable Security on the 20 Trading Days immediately prior to, but not
including, the second Trading Day preceding the Early Settlement Date.
2.5. Cash Settlement Option. Notwithstanding the provisions of Sections
----------------------
2.1, 2.2, 2.3, 2.4 and 7.3 hereof, but subject to the provisions of Section 7.1
hereof, each Seller shall have the option, exercisable in its sole discretion by
notice given to the Purchaser as provided below, to settle the obligations of
such Seller contained in Sections 2.1 and 7.3 hereof to deliver shares of Snyder
Common Stock, in whole or in part, through a cash payment on the Settlement Date
or the Tax Event Acceleration Date, as the case may be, in lieu of delivery of
such shares of Snyder Common Stock. The amount of such cash settlement payment
(the "Cash Payment Amount") to be made by the relevant Seller shall be
determined as of 10:00 A.M. (New York City time) on the Settlement Date or the
Tax Event Acceleration Date, as the case may be, and shall equal the average
Closing Price per share of Snyder Common Stock on the 20 Trading Days
immediately prior to, but not including, the second Trading Day preceding the
Exchange Date or the Tax Event Acceleration Date, as the case may be, multiplied
by the number of shares of Snyder Common Stock in respect of which an election
to exercise the cash settlement option is made. The Cash Payment Amount shall
be calculated to the nearest 1/100th of a dollar or, if there is not a nearest
1/100th of a dollar, then to the next higher 1/100th of a dollar. Notice of a
Seller's irrevocable election to exercise its cash settlement option shall be
given to the Purchaser, in the case of an election in respect of shares of
Snyder Common Stock otherwise deliverable pursuant to Section 2.1 on the
Settlement Date, not more than 45 nor less than 26 Business Days prior to the
Settlement Date and, in the case of an election in respect of shares of Snyder
Common Stock otherwise deliverable pursuant to Section 7.3 on the Tax Event
Acceleration Date, not more than 30 nor less than 15 calendar days prior to the
Tax Event Acceleration Date.
2.6. Conditions to Purchaser's Obligations. (a) The Purchaser's obligation
-------------------------------------
to deliver the Firm Consideration Amounts on the Firm Payment Date is
conditioned upon (x) the
11
<PAGE>
representations and warranties of the Sellers contained in paragraphs (i),
(iii)(b), (iv), (v) and (vi) of Article IV hereof being true and correct as of
the Firm Payment Date, (y) the Security and Pledge Agreement having been
executed by the parties thereto and the delivery of the Collateral thereunder
having been made and (z) the Purchaser having received legal opinions of Shaw,
Pittman, Potts & Trowbridge, counsel for the Sellers, in form and substance
satisfactory to the Purchaser, each dated the Firm Payment Date, as to certain
bankruptcy matters in respect of each Seller.
(b) The Purchaser's obligation to deliver any Option Consideration Amounts
on any Date of Delivery is conditioned upon (x) the purchase and sale of the
related Option STRYPES pursuant to the Purchase Agreement having been
consummated as contemplated therein, (y) the representations and warranties of
the Sellers contained in paragraphs (i), (iii)(b), (iv), (v) and (vi) of Article
IV hereof being true and correct as of such Date of Delivery and (z) the
Security and Pledge Agreement having been executed by the parties thereto and
the delivery of the Collateral thereunder having been made.
(c) If any condition specified in this Section 2.6 shall not have been
fulfilled when and as required to be fulfilled, this Agreement, or in the case
of any condition to the delivery of any Option Consideration Amounts on a Date
of Delivery which is after the Firm Payment Date, the obligation of the
Purchaser to deliver such Option Consideration Amounts on such Date of Delivery
(and obligations of the Purchaser and the Sellers with respect to the future
acquisition, sale and delivery of the aggregate number of shares of Snyder
Common Stock in respect of the related Option Contract Commitments), may be
terminated by the Purchaser by notice to the Sellers at any time at or prior to
the Firm Payment Date or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party, except
that Sections 8.3 and 8.4 shall survive any such termination and remain in full
force and effect.
III.
Exchange Rate Formula Adjustments
---------------------------------
3.1. (a) Adjustment for Subdivisions, Splits, Combinations or
----------------------------------------------------
Reclassifications. If Snyder Communications shall, after the date hereof:
- -----------------
(i) pay a stock dividend or make a distribution with respect
to Snyder Common Stock in shares of such stock;
(ii) subdivide or split the outstanding shares of Snyder Common
Stock into a greater number of shares;
(iii) combine the outstanding shares of Snyder Common Stock into
a smaller number of shares; or
12
<PAGE>
(iv) issue by reclassification of shares of Snyder Common Stock
any shares of common stock of Snyder Communications;
then, in any such event, the Exchange Rate Formula shall be adjusted so that the
Purchaser will receive on the Closing Date, the number of shares of Snyder
Common Stock (or, in the case of a reclassification referred to in clause (iv)
above, the number of shares of other common stock of Snyder Communications
issued pursuant thereto) which the Purchaser would have owned or been entitled
to receive immediately following any event described above had the Sellers'
obligations hereunder been satisfied immediately prior to such event or any
record date with respect thereto. Each such adjustment shall become effective
at the opening of business on the Business Day next following the record date
for determination of holders of Snyder Common Stock entitled to receive such
dividend or distribution in the case of a dividend or distribution and shall
become effective immediately after the effective date in the case of a
subdivision, split, combination or reclassification. Each such adjustment shall
be made successively.
(b) Adjustment for Issuance of Certain Rights or Warrants. If Snyder
-----------------------------------------------------
Communications shall, after the date hereof, issue rights or warrants to all
holders of Snyder Common Stock entitling them to subscribe for or purchase
shares of Snyder Common Stock (other than rights to purchase Snyder Common Stock
pursuant to a plan for the reinvestment of dividends or interest), at a price
per share less than the then current market price of the Snyder Common Stock,
then in each case the Exchange Rate Formula shall be adjusted by multiplying
each of the Share Components in the Exchange Rate Formula in effect immediately
prior to the date of issuance of such rights or warrants by a fraction, the
numerator of which shall be the number of shares of Snyder Common Stock
outstanding on the date of issuance of such rights or warrants, immediately
prior to such issuance, plus the number of additional shares of Snyder Common
Stock offered for subscription or purchase pursuant to such rights or warrants,
and the denominator of which shall be the number of shares of Snyder Common
Stock outstanding on the date of issuance of such rights or warrants,
immediately prior to such issuance, plus the number of additional shares of
Snyder Common Stock which the aggregate offering price of the total number of
shares of Snyder Common Stock so offered for subscription or purchase pursuant
to such rights or warrants would purchase at such current market price, which
shall be determined by multiplying such total number of shares by the exercise
price of such rights or warrants and dividing the product so obtained by such
current market price. Such adjustment shall become effective at the opening of
business on the Business Day next following the record date for the
determination of stockholders entitled to receive such rights or warrants. To
the extent that shares of Snyder Common Stock are not delivered after the
expiration of such rights or warrants, or if such rights or warrants are not
issued, the Exchange Rate Formula shall be readjusted to the Exchange Rate
Formula which would then be in effect had such adjustments for the issuance of
such rights or warrants been made upon the basis of delivery of only the number
of shares of Snyder Common Stock actually delivered. Each such adjustment shall
be made successively. For purposes of this subparagraph (b), the term "current
market price" shall mean the average Closing Price per share of Snyder Common
Stock on the 20 Trading Days immediately prior to the date such rights or
warrants are issued; provided, however, if any event that would result in
another adjustment of the Exchange Rate Formula pursuant to this Section 3.1
occurs during such 20-day period, the current market price as determined
pursuant to the foregoing shall be appropriately adjusted to reflect the
occurrence of such event.
13
<PAGE>
(c) Adjustment for Distributions. If Snyder Communications shall, after
----------------------------
the date hereof, pay a dividend or make a distribution to all holders of Snyder
Common Stock of evidences of its indebtedness or other assets (excluding any
stock dividends or distributions described in clause (i) of Section 3.1(a) above
or any cash dividends that do not constitute Extraordinary Cash Dividends) or
shall issue to all holders of Snyder Common Stock rights or warrants to
subscribe for or purchase any of its securities (excluding any rights to
purchase shares of Snyder Common Stock pursuant to a plan for the reinvestment
of dividends or interest and any rights or warrants referred to in Section
3.1(b) above), then in each such case, the Exchange Rate Formula shall be
adjusted by multiplying each of the Share Components in the Exchange Rate
Formula in effect on the record date referred to below by a fraction, the
numerator of which shall be the market price per share of Snyder Common Stock on
the record date for the determination of stockholders entitled to receive such
dividend or distribution or such rights or warrants, and the denominator of
which shall be such market price per share of Snyder Common Stock less the fair
market value (as determined by a nationally recognized independent investment
banking firm retained for this purpose by the Administrator, whose determination
shall be conclusive) as of such record date of the portion of the assets or
evidences of indebtedness to be distributed or of such subscription rights or
warrants applicable to one share of Snyder Common Stock. Each such adjustment
shall become effective on the opening of business on the Business Day next
following the record date for the determination of stockholders entitled to
receive such dividend or distribution or such rights or warrants. To the extent
that such dividend or distribution is not so paid or made, the Exchange Rate
Formula shall be readjusted to the Exchange Rate Formula which would then be in
effect if such dividend or distribution had not occurred. Each such adjustment
shall be made successively. For purposes of this subsection (c), the term
"market price" shall mean the average Closing Price per share of Snyder Common
Stock on the 20 Trading Days immediately prior to such record date for the
determination of stockholders entitled to receive such dividend or distribution
or such rights or warrants; provided, however, if any event that would result in
another adjustment of the Exchange Rate Formula pursuant to this Section 3.1
occurs during such 20-day period, the market price as determined pursuant to the
foregoing shall be appropriately adjusted to reflect the occurrence of such
event.
(d) Issuance in Payment of Dividend. Any shares of Snyder Common Stock
-------------------------------
issuable in payment of a dividend shall be deemed to have been issued
immediately prior to the close of business on the record date for such dividend
for purposes of calculating the number of outstanding shares of Snyder Common
Stock under subsection (b) above.
(e) General; Exchange Price Adjustment. All adjustments to the Exchange
----------------------------------
Rate Formula shall be calculated to the nearest 1/10,000th of a share of Snyder
Common Stock (or if there is not a nearest 1/10,000th of a share to the next
lower 1/10,000th of a share). No adjustment in the Exchange Rate Formula shall
be required unless such adjustment would require an increase or decrease of at
least one percent therein; provided, however, that any adjustments which by
reason of this subsection (e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. If an adjustment
is made to the Exchange Rate Formula pursuant to subsection (a), (b) or (c) of
this Section 3.1, an adjustment shall also be made to the Exchange Price solely
to determine which of clauses (a), (b) or (c) of the Exchange Rate Formula will
apply on the Exchange Date. The required adjustment to the Exchange Price
14
<PAGE>
shall be made by multiplying each of the Closing Prices used in determining the
Exchange Price by a fraction, the numerator of which shall be the Share
Component in clause (c) of the Exchange Rate Formula immediately after such
adjustment pursuant to subsection (a), (b) or (c) and the denominator of which
shall be the Share Component in clause (c) of the Exchange Rate Formula
immediately before such adjustment. Each such adjustment shall be made
successively. This subsection (e) shall be so used to adjust the definition of
Exchange Price only as such term is used for the first time in each of clauses
(a), (b) and (c) of the Exchange Rate Formula.
IV.
Representations and Warranties of the Sellers
---------------------------------------------
Each Seller severally represents and warrants to the Purchaser as of the
date hereof, as of the Firm Payment Date, as of each Date of Delivery (if any)
and as of the Closing Date as follows:
(i) Such Seller has the full right, power and authority to enter
into and perform its obligations under this Agreement and the Security and
Pledge Agreement, including, without limitation, to pledge and assign the shares
of Snyder Common Stock to be pledged and assigned by such Seller pursuant to the
Security and Pledge Agreement, and to sell, transfer and deliver the Contract
Consideration to be sold by such Seller pursuant to this Agreement.
(ii) This Agreement and the Security and Pledge Agreement have been
duly authorized, executed and delivered by such Seller and (assuming the due
authorization, execution and delivery by the other parties thereto) constitute
valid and binding agreements of such Seller, enforceable against such Seller in
accordance with their respective terms, except as the enforcement hereof and
thereof may be limited by bankruptcy, insolvency (including, without limitation,
all laws relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally and except as
enforcement hereof and thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law). Neither the Firm Consideration Amount received by such Seller on the Firm
Payment Date nor any Option Consideration Amount received by such Seller on any
Date of Delivery will be used by such Seller for the purpose, whether immediate,
incidental or ultimate, of buying or carrying a margin stock, as such terms are
defined in Regulation G promulgated by the Board of Governors of the Federal
Reserve System.
(iii) (a) At the date hereof, such Seller is the registered owner
of and has all rights in and to the shares of Snyder Common Stock to be
delivered, pledged and assigned by such Seller pursuant to the Security and
Pledge Agreement, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity and (b) to the extent such Seller elects to
deliver the Contract Consideration at Closing, upon delivery of such Contract
Consideration against payment therefor pursuant to this Agreement, assuming the
Purchaser purchased for value in good faith and without notice of any adverse
claim, the Purchaser will have acquired all rights in and to such Contract
Consideration, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity (except for any security interest,
15
<PAGE>
mortgage, pledge, lien, encumbrance, claim or equity created by the Purchaser or
the Collateral Agent). The sale, transfer and delivery of the Contract
Consideration by such Seller as contemplated by this Agreement is not, and at
the time of delivery of such Contract Consideration will not be, subject to any
right of first refusal or similar rights of any person pursuant to any contract
to which such Seller or any Affiliate of such Seller is a party or by which it
or any of them is bound.
(iv) No declaration or filing with, or authorization, approval,
consent, license, order, registration, qualification or decree of, any court or
governmental authority or agency is necessary or required for the execution,
delivery or performance by such Seller of this Agreement or the Security and
Pledge Agreement or the consummation by such Seller of the transactions
contemplated herein and therein, except such as have been already obtained or as
may be required under the Securities Act or the rules and regulations
promulgated thereunder or state securities laws.
(v) The execution, delivery and performance by such Seller of this
Agreement and the Security and Pledge Agreement and the consummation by such
Seller of the transactions contemplated herein and therein and compliance by
such Seller with its obligations hereunder and thereunder do not and will not,
whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Seller Repayment Event
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of such Seller or any Affiliate of such
Seller pursuant to, any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreement or instrument to which such
Seller or any Affiliate of such Seller is a party or by which it or any of them
is bound, or to which any of the property or assets of such Seller or any
Affiliate of such Seller is subject (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not, singly or in the
aggregate, materially and adversely affect the ability of such Seller to perform
its obligations under this Agreement or the Security and Pledge Agreement), nor
will such action result in any violation of the provisions of any applicable
law, statute, rule or regulation of any government or government instrumentality
having jurisdiction over such Seller or any Affiliate of such Seller or any of
their assets, properties or operations (other than any state securities or "blue
sky" law, statute, rule or regulation, as to which no representation and
warranty is made), or any applicable judgment, order, writ or decree of any
government, government instrumentality or domestic court having jurisdiction
over such Seller or any Affiliate of such Seller or any of their assets,
properties or operations (except in all cases for violations that would not,
singly or in the aggregate, materially and adversely affect the ability of such
Seller to perform its obligations under this Agreement or the Security and
Pledge Agreement).
(vi) Such Seller is not an "investment company" within the meaning
of the Investment Company Act of 1940, as amended, required to be registered
thereunder.
(vii) Such Seller has no subsidiaries.
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V.
Representations and Warranties of Purchaser
-------------------------------------------
The Purchaser represents and warrants to each Seller as of the date hereof,
as of the Firm Payment Date, as of each Date of Delivery (if any) and, with
respect to the representations and warranties contained in paragraph (i) and
(ii) below only, as of the Closing Date, as follows:
(i) The Purchaser has been duly created and is validly existing as
a business trust in good standing under the laws of the State of Delaware with
power and authority to enter into and perform its obligations under this
Agreement and the Security and Pledge Agreement. Through the date hereof, the
Purchaser's activities have been limited to (a) registering the Purchaser under
the Investment Company Act of 1940, as amended, (b) registering the offer and
sale of the STRYPES under the Securities Act and (c) such other activities that
are necessarily incident to, or connected with, or necessary to accomplish, the
foregoing and the offer and sale of the STRYPES and the operation of the
Purchaser as described in the Purchaser's Prospectus dated ______________, 1997,
relating to the STRYPES.
(ii) This Agreement and the Security and Pledge Agreement have been
duly authorized, executed and delivered by the Purchaser and (assuming the due
authorization, execution and delivery by the other parties thereto) constitute
valid and binding agreements of the Purchaser, enforceable against the Purchaser
in accordance with their respective terms, except as the enforcement hereof and
thereof may be limited by bankruptcy, insolvency (including, without limitation,
all laws relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally and except as
enforcement hereof and thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law).
(iii) No declaration or filing with, or authorization, approval,
consent, license, order, registration, qualification or decree of, any court or
governmental authority or agency is necessary or required for the execution,
delivery or performance by the Purchaser of this Agreement or the Security and
Pledge Agreement or the consummation by the Purchaser of the transactions
contemplated herein and therein, except such as have been already obtained or as
may be required under the Securities Act or the rules and regulations
promulgated thereunder or state securities laws.
(iv) The execution, delivery and performance by the Purchaser of
this Agreement and the Security and Pledge Agreement and the consummation by the
Purchaser of the transactions contemplated herein and therein and compliance by
the Purchaser with its obligations hereunder and thereunder do not and will not,
whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Purchaser Repayment Event
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Purchaser pursuant to, any
contract, indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or any other agreement or instrument to which the Purchaser is a party or
by which the Purchaser is bound, or to which any of the property or assets of
the Purchaser is subject (except for such conflicts, breaches or
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defaults or liens, charges or encumbrances that would not, singly or in the
aggregate, materially and adversely affect the ability of the Purchaser to
perform its obligations under this Agreement or the Security and Pledge
Agreement), nor will such action result in any violation of the provisions of
the Trust Agreement of the Purchaser, or any applicable law, statute, rule, or
regulation of any government or government instrumentality having jurisdiction
over the Purchaser or any of its assets or properties (other than any state
securities or "blue sky" law, statute, rule or regulation, as to which no
representation and warranty is made), or any applicable judgment, order, writ or
decree of any government, government instrumentality or domestic court having
jurisdiction over the Purchaser or any of its assets, properties or operations
(except in all cases for violations that would not, singly or in the aggregate,
materially and adversely affect the ability of the Purchaser to perform its
obligations under this Agreement or the Security and Pledge Agreement).
VI.
Covenants
---------
6.1. Collateral. Each Seller shall cause to be held by the Collateral
----------
Agent at all times during the term of this Agreement an aggregate number of
shares of Snyder Common Stock at least equal to the maximum number of shares of
Snyder Common Stock that would be required to be delivered by such Seller on the
Settlement Date pursuant to Section 2.1 hereof, assuming that such Seller has
not elected to exercise its option to settle its obligations under such Section
2.1 through cash payment on the Settlement Date pursuant to Section 2.5 hereof;
provided, however, that, from and after the effective date for any
Reorganization Event, such Seller shall cause to be held by the Collateral
Agent, in lieu of the shares of Snyder Common Stock, an aggregate amount of cash
and/or an aggregate amount of Marketable Securities at least equal to the
maximum amount of cash and/or maximum amount of Marketable Securities that would
be required to be delivered by such Seller on the Early Settlement Date pursuant
to Section 7.2 hereof (such aggregate number of shares of Snyder Common Stock
or, in the event there shall have occurred a Reorganization Event, such
aggregate amounts of cash and/or Marketable Securities being referred to herein
as such Seller's "Maximum Contract Consideration").
6.2. Affirmative Covenants. During the term of this Agreement, each Seller
---------------------
covenants and agrees that it will:
(a) Comply in all material respects with all applicable laws, rules,
regulations and orders, such compliance to include, without limitation, paying
before the same become delinquent all taxes, assessments and governmental
charges imposed upon it or upon its property, including the Collateral pledged
by such Seller, except to the extent contested in good faith.
(b) Furnish to the Purchaser as soon as possible and in any event within
twenty days after the president or any vice president of such Seller's managing
member or general partner, as the case may be, shall become aware of the
occurrence of each failure by such Seller to comply with or perform any
agreement or obligation contained in Sections 6.1, 6.2, 6.3 or 6.4 of this
Agreement or Sections 2(b), 7(a) or 7(b) of the Security and Pledge Agreement
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continuing on the date of such statement, a statement of the president or any
vice president of such Seller's managing member or general partner, as the case
may be, describing such failure and setting forth details of such failure and
the action which such Seller has taken and proposes to take with respect
thereto.
(c) Preserve and maintain its existence, rights (contractual and
statutory), powers, franchises and qualifications, and limit its activities to
those specifically authorized in its limited liability company agreement or
limited partnership agreement, as the case may be.
(d) At any reasonable time and from time to time, upon reasonable notice,
prior to the occurrence of an Event of Default with respect to such Seller, and
upon any notice after the occurrence of an Event of Default with respect to such
Seller until such Seller's Collateral is delivered to such Seller to the extent
required in accordance with Section 11 of the Security and Pledge Agreement,
permit the Purchaser or representatives thereof to examine and make copies of
and abstracts from the records and books of account of, and visit the offices
of, such Seller, and to discuss the affairs, finances and accounts of such
Seller with any of the officers or directors of such Seller's managing member or
general partner, as the case may be.
(e) Keep proper books of record and account, in which full and correct
entries shall be made of all financial transactions and the assets and business
of such Seller, including the Collateral pledged by such Seller, in accordance
with appropriate accounting principles consistently applied.
6.3. Negative Covenants. During the term of this Agreement, each Seller
------------------
covenants and agrees that it will not:
(a) Except for Permitted Activities and the transactions otherwise
contemplated by this Agreement and the Security and Pledge Agreement, sell,
assign, transfer, exchange or otherwise dispose of, or grant any option with
respect to, or create, incur or suffer to exist any lien, security interest or
other charge or encumbrance, or any other type of preferential arrangement, upon
or with respect to any of its properties, including the Collateral pledge by
such Seller, whether now owned or hereafter acquired, or assign any right to
receive income, in each case to secure or to provide for the payment of any Debt
of any Person.
(b) Create or suffer to exist any Debt of such Seller, other than the Debt
created under this Agreement and the Security and Pledge Agreement.
(c) Except for Permitted Activities and the transactions otherwise
contemplated by this Agreement and the Security and Pledge Agreement, declare or
make any dividend payment or other distribution of assets, properties, cash,
rights, obligations or securities on account of any limited liability company or
limited partner interest in such Seller, or purchase, redeem or otherwise
acquire for value any such interest in such Seller or any warrants, rights or
options to acquire any such interest, now or hereafter outstanding.
(d) Except for the transactions contemplated by this Agreement and the
Security and Pledge Agreement, merge or consolidate with or into, or convey,
transfer, lease or otherwise
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dispose of (whether in one transaction or in a series of transactions) all or
substantially all of its assets, including the Collateral pledged by such Seller
(whether now owned or hereafter acquired) to, or acquire all or substantially
all of the assets of, any Person.
(e) Except for Permitted Activities and the transactions otherwise
contemplated by this Agreement and the Security and Pledge Agreement, own any
property, incur any liabilities, make any investment or conduct any business
other than the ownership of the Collateral pledged by such Seller, this
Agreement and the Security and Pledge Agreement, and the incurrence of the
obligations pursuant to this Agreement and the Security and Pledge Agreement.
6.4. Separate Corporate Existence. Each Seller acknowledges that the
----------------------------
Purchaser is entering into the transactions contemplated by this Agreement and
the Security and Pledge Agreement in reliance upon such Seller's identity as a
legal entity that is separate from any Affiliate of such Seller. Therefore,
from and after the date of execution and delivery of this Agreement, each Seller
covenants and agrees to take all reasonable steps, including, without
limitation, all steps that the Purchaser may from time to time reasonably
request, to maintain such Seller's identity as a separate legal entity and to
make it manifest to third parties that such Seller is an entity with assets and
liabilities distinct from those of its Affiliates and not just a division of any
such Affiliate. Without limiting the generality of the foregoing and in
addition to the other covenants set forth herein, each Seller covenants and
agrees to:
(a) conduct any business in other than its own name and, to the extent
such Seller has any full-time employees, require that all full-time employees of
such Seller identify themselves as such and not as employees of any Affiliate
(including, without limitation, by means of providing appropriate employees with
business or identification cards identifying such employees as such Seller's
employees) ;
(b) compensate all employees, consultants and agents, if any, directly,
from such Seller's bank accounts, for services provided to such Seller by such
employees, consultants and agents, except to the extent that any employee,
consultant or agent of such Seller is also an employee, consultant or agent of
any Affiliate(s) and the compensation of such employee, consultant or agent is
allocated between such Seller and such Affiliate(s) on a basis which reflects
the services rendered to such Seller and such Affiliate(s);
(c) have no stationery, invoices or checks other than in its own name;
(d) conduct all transactions with each Affiliate strictly on an arm's-
length basis, allocate all overhead expenses (including, without limitation,
telephone and other utility charges) for items shared between such Seller and
such Affiliate on the basis of actual use to the extent practicable and, to the
extent such allocation is not practicable, on a basis reasonably related to
actual use;
(e) observe all requisite formalities as a distinct entity, and ensure
that all appropriate actions are duly authorized in accordance with the such
Seller's limited liability company agreement or limited partnership agreement,
as the case may be, and all applicable laws and statutes; without limiting the
generality of the foregoing, such Seller's limited liability company
20
<PAGE>
agreement or limited partnership agreement, as the case may be, shall at all
times provide that action to file a voluntary petition under the Bankruptcy Code
or consent to the entry of an order for relief in an involuntary case under the
Bankruptcy Code as now or hereafter in effect may be authorized only by
unanimous consent of the board of directors of such Seller's members or general
partner, as the case may be, [(including the consent of the "Independent
Director" (as such term is defined in the charter of such managing member or
general partner) and of the non-managing members or limited partners, as the
case may be;
(f) maintain such Seller's books and records separate from those of each
Affiliate and otherwise readily identifiable as its own assets rather than
assets of any Affiliate;
(g) to the extent it prepares financial statements, prepare its financial
statements separately from those of each Affiliate and insure that any
consolidated statements of any Affiliate that include such Seller have notes
clearly indicating that such Seller is a separate entity and that the Collateral
pledged by such Seller will be available first and foremost to satisfy the
claims of the Purchaser pursuant to this Agreement;
(h) except as herein specifically otherwise provided, not commingle funds
or other assets of such Seller, including the Collateral pledged by such Seller,
with those of any Affiliate and not maintain bank accounts or other depository
accounts to which any Affiliate is an account party, into which any Affiliate
makes deposits or from which any Affiliate has the power to make withdrawals;
(i) not permit any Affiliate to pay any of such Seller's operating
expenses (except pursuant to allocation arrangements that comply with the
requirements of this Section 5.4); and
(j) except for the master or blanket policies covering such Seller and any
Affiliate(s) or the property of such Seller and any Affiliate(s), the costs of
which are allocated between such Seller and such Affiliate(s) on a reasonable
basis, not permit such Seller to be named as an insured on the insurance policy
covering the property of any Affiliate or enter into an agreement with the
holder of such policy whereby in the event of a loss in connection with such
property, proceeds are paid to such Seller.
6.5. Taxes. Each Seller shall pay any and all documentary, stamp, transfer
-----
or similar taxes and charges that may be payable in respect of the execution and
delivery by such Seller of this Agreement and the transfer and delivery by such
Seller of the Contract Consideration pursuant hereto.
6.6. Tax Treatment. The Purchaser and each Seller hereby agree to treat,
-------------
for United States Federal, state and local tax purposes, this Agreement as a
pre-paid forward contract, which does not constitute, in whole or in part,
indebtedness, pursuant to which the Purchaser
21
<PAGE>
is obligated to purchase at the Closing the Contract Consideration which such
Seller is obligated to deliver at that time (subject to such Seller's right to
deliver cash in lieu of the Contract Consideration as provided in Section 2.5
hereof). Notwithstanding the foregoing, as used in this Section 6.6, the term
"forward contract" does not mean a "forward contract" as referred to in either
Section 101(49)(B)(iii) of the Bankruptcy Code or Section 1259(d)(1) of the
Internal Revenue Code of 1986, as amended.
6.7. Certain Notices. (a) In case at any time while any of the STRYPES are
---------------
outstanding any Seller receives written notice in its capacity as a holder of
shares of Snyder Common Stock that:
(i) Snyder Communications shall declare a dividend (or any
other distribution) on or in respect of the Snyder Common Stock to which
Section 3.1(a) or (c) hereof shall apply (other than any cash dividends, if
any, paid from time to time by Snyder Communications that do not constitute
Extraordinary Cash Dividends);
(ii) Snyder Communications shall authorize the issuance to all
holders of Snyder Common Stock of rights or warrants to subscribe for or
purchase shares of Snyder Common Stock or of any other subscription rights
or warrants;
(iii) there shall occur any conversion or reclassification of
Snyder Common Stock (other than a subdivision or combination of outstanding
shares of Snyder Common Stock) or any consolidation, merger or
reorganization to which Snyder Communications is a party and for which
approval of any stockholders of Snyder Communications is required, or the
sale or transfer of all or substantially all of the assets Snyder
Communications; or
(iv) there shall occur the voluntary or involuntary
dissolution, liquidation or winding up of Snyder Communications or Snyder
Communications shall commence or have commenced against it a case under the
Bankruptcy Code;
then such Seller shall promptly notify the Purchaser and the Administrator of
such fact and of (x) the date, if known by such Seller, on which a record is to
be taken for the purpose of such dividend, distribution or grant of rights or
warrants, or, if a record is not to be taken, the date as of which the holders
of Snyder Common Stock of record to be entitled to such dividend, distribution
or grant of rights or warrants are to be determined, or (y) the date, if known
by such Seller, on which such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up has become, or is expected to
become, effective or on which such bankruptcy case was commenced.
(b) Immediately upon the occurrence of any Event of Default with respect
to any Seller, or upon any Seller's obtaining knowledge that an Event of Default
shall have occurred with respect to another Seller, such Seller shall promptly
notify the Purchaser of such occurrence and of all facts relating to such
occurrence of which such Seller is aware.
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6.8. Limitations on Trading During Certain Days. Each of the Sellers and
------------------------------------------
the Purchaser hereby agrees that it will not, and it will cause each of its
Affiliates not to, buy or sell any shares of Snyder Common Stock for their own
account during the 20 Trading Days immediately prior to, but not including, the
second Trading Day preceding the Exchange Date or any Early Settlement Date.
6.9. Further Assurances. From time to time on and after the date hereof
------------------
through the Closing Date, the Purchaser and each of the Sellers shall use its
best efforts to take, or cause to be taken, all action and to do, or cause to be
done, all things necessary, proper and advisable to consummate and make
effective as promptly as practicable the transactions contemplated by this
Agreement in accordance with the terms and conditions hereof, including (i)
using best efforts to remove any legal impediment to the consummation of such
transactions and (ii) the execution and delivery of all such deeds, agreements,
assignments and further instruments of transfer and conveyance necessary, proper
or advisable to consummate and make effective the transactions contemplated by
this Agreement in accordance with the terms and conditions hereof.
VII.
Acceleration of Delivery
------------------------
7.1. Liquidation of Agreement Upon Event of Default. If an Event of
----------------------------------------------
Default shall occur with respect to any Seller, then (i) an Acceleration Date
shall be deemed to have occurred simultaneously with the occurrence of such
Event of Default, (ii) the Sellers' rights under Section 2.5 shall terminate
immediately and (iii) there shall become immediately deliverable and payable by
each Seller (and immediately deliverable by the Collateral Agent under the
Security and Pledge Agreement to the Purchaser) a number of shares of Snyder
Common Stock having an aggregate value (determined based on the average Closing
Price per share of Snyder Common Stock on the 20 Trading Days immediately prior
to, but not including, the second Trading Day preceding the Acceleration Date)
equal to the Aggregate Acceleration Value multiplied by a fraction, the
numerator of which shall be such Seller's Firm Contract Commitment and the
denominator of which shall be the Total Firm Contract Commitment (the
"Acceleration Amount"). The "Aggregate Acceleration Value" means the product
obtained by multiplying: (i) the quotient obtained by dividing (A) the
Acceleration Value by (B) 1,000 by (ii) the sum of the Contract Commitments of
the Sellers; except that, if no quotations for the determination of the
Acceleration Value are obtained as described below, the Aggregate Acceleration
Value shall be the value (based on the average Closing Price per share of Snyder
Common Stock on the 20 Trading Days immediately prior to, but not including, the
second Trading Day preceding the Acceleration Date) of the aggregate number of
shares of Snyder Common Stock that would be required to be delivered by the
Sellers on such date under this Agreement if the Exchange Date were redefined
for all purposes of this Agreement (including, without limitation, for purposes
of Section 2.4 hereof) to be the Acceleration Date.
The "Acceleration Value" means an amount determined on the basis of
quotations from four of the nationally recognized independent investment banking
firms listed on Schedule 7.1 hereto selected by the Administrator (the
"Independent Dealers") as follows. Each quotation will
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<PAGE>
be for the amount that would be paid to the relevant Independent Dealer in
consideration of an agreement between the Purchaser and such Independent Dealer
that would have the effect of preserving the Purchaser's right to receive the
payments and deliveries that the Purchaser would, but for the occurrence of the
Event of Default, have been entitled to receive after the Acceleration Date
under Article II hereof (taking into account any adjustments to the Exchange
Rate Formula that may have been effected on or prior to the Acceleration Date),
provided that, for purposes of determining the payments and deliveries to which
the Purchaser is entitled under Article II hereof, the sum of the Contract
Commitments of the Sellers shall be deemed to equal 1,000. On or as soon as
reasonably practicable following the Acceleration Date, the Administrator will
request each Independent Dealer to provide its quotation as soon as reasonably
practicable, but in any event within two Business Days. The Administrator shall
compute the Acceleration Value upon receipt of each Independent Dealer's
quotation, provided that if, at the close of business on the fourth Business Day
following the Acceleration Date, the Administrator shall have received
quotations from fewer than four of the Independent Dealers, the Administrator
shall compute the Acceleration Value using the quotations, if any, it shall have
received at or prior to such time. If four quotations are provided, the
Acceleration Value shall be the arithmetic mean of the two quotations remaining
after disregarding the highest and lowest quotations. (For this purpose, if
more than one quotation has the same highest or lowest value, then one of such
quotations shall be disregarded.) If two or three quotations are provided, the
Acceleration Value shall be the arithmetic mean of such quotations. If one
quotation is provided, the Acceleration Value shall be equal to such quotation.
If no quotations are provided, the Acceleration Value will not be determined and
the Aggregate Acceleration Value shall be determined as provided above.
As promptly as reasonably practicable after receipt of the quotations on
which the Acceleration Value is based (or, as the case may be, after failure to
receive any such quotations within the time period prescribed above) the
Purchaser shall deliver to the Collateral Agent and the Sellers a notice (the
"Acceleration Amount Notice") specifying the Acceleration Amount required to be
delivered by each Seller. The Purchaser and each Seller agree that the
Purchaser will not be entitled to recover any amounts not expressly provided for
herein as a consequence of an Event of Default.
7.2. Snyder Communications Reorganization Event; Delivery.
----------------------------------------------------
Notwithstanding the provisions of Sections 2.1, 2.3 and 2.5 hereof, if (i) any
consolidation or merger of Snyder Communications, or any Snyder Communications
Successor, with or into another corporation (other than (x) a consolidation or
merger in which Snyder Communications is the continuing corporation and in which
the Snyder Common Stock outstanding immediately prior to the consolidation or
merger is not exchanged for cash, securities or other property of Snyder
Communications or another entity or (y) a statutory merger effected solely for
the purpose of changing the state of incorporation of Snyder Communications or
any Snyder Communications Successor), (ii) any sale, transfer, lease or
conveyance to another corporation of the property of Snyder Communications or
any Snyder Communications Successor as an entirety or substantially as an
entirety, (iii) any statutory exchange of securities of Snyder Communications or
any Snyder Communications Successor with another corporation (other than in
connection with a merger or acquisition) or (iv) any liquidation, dissolution,
or winding up of Snyder Communications or any Snyder Communications Successor
(other than any liquidation, dissolution or winding up constituting an Event of
Default) (any such event described in clause (i), (ii), (iii) or (iv), a
"Reorganization Event") shall occur, each Seller's obligations
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under Section 2.1 hereof shall be automatically accelerated and each Seller
shall deliver to the Purchaser, on the tenth Business Day after the effective
date for such Reorganization Event (the "Early Settlement Date"), an amount of
cash (calculated to the nearest 1/100th of a dollar or, if there is not a
nearest 1/100th of a dollar, then to the next higher 1/100th of a dollar) equal
to the product of such Seller's Contract Commitment and (a) if the Transaction
Value is greater than or equal to the Threshold Appreciation Price, ______
multiplied by the Transaction Value, (b) if the Transaction Value is less than
the Threshold Appreciation Price but greater than the Initial Price, the Initial
Price, or (c) if the Transaction Value is less than or equal to the Initial
Price, the Transaction Value. Notwithstanding the foregoing, if any Marketable
Securities are received by holders of Snyder Common Stock in a Reorganization
Event, then each Seller may, at its option, in lieu of delivering cash as
described above, deliver an equivalent amount (based on the value determined in
accordance with clause (z) of the definition of "Transaction Value") of
Marketable Securities, but not exceeding, as a percentage of the total
consideration required to be delivered, the percentage of the total Transaction
Value attributable to such Marketable Securities.
7.3. Acceleration Upon Tax Event. Notwithstanding anything to the
---------------------------
contrary contained herein, the Sellers shall have the joint option, exercisable
in their sole discretion at any time from and after the date (the "Tax Event
Date") on which a Tax Event shall occur, to accelerate the settlement of their
obligations hereunder, in whole but not in part. In the event that the Sellers
elect to exercise such joint option, each Seller shall be irrevocably obligated
to deliver to the Purchaser on a date fixed by the Sellers for accelerated
settlement (the "Tax Event Acceleration Date") (x) an amount in cash equal to
(1) the difference between (A) the sum of (i) all accumulated and unpaid
distributions on the STRYPES then outstanding to the Tax Event Acceleration
Date, (ii) the sum of all distributions on the STRYPES then outstanding due
after the Tax Event Acceleration Date and on or prior to the Exchange Date and
(iii) $__________, and (B) the Liquidation Value, multiplied by (2) a fraction,
the numerator of which shall be such Seller's Firm Contract Commitment and the
denominator of which shall be the Total Firm Contract Commitment and (y) subject
to such Seller's right to settle its obligation under this clause (y) through
cash payment on the Tax Event Acceleration Date pursuant to Section 2.5 hereof,
the number of shares of Snyder Common Stock that would be required to be
delivered by such Seller under this Agreement if the Exchange Date were
redefined for all purposes of this Agreement (including, without limitation, for
purposes of Section 2.4 hereof) to be the Tax Event Acceleration Date (the
amounts described in clauses (x) and (y) above being collectively referred to as
the "Tax Event Acceleration Amount"). The Sellers may exercise the acceleration
option contained in this Section 7.3 by notice (the "Tax Event Acceleration
Notice") to the Purchaser, the Administrator and the Collateral Agent, given on
behalf of all of the Sellers in accordance with Section 8.2 hereof and Section
10(b) of the Security and Pledge Agreement not more than 30 and not less than 10
calendar days prior to the Tax Event Acceleration Date, as specified therein;
provided that if any or all of the Sellers intend to exercise their cash
settlement option pursuant to Section 2.5 hereof, then such Tax Event
Acceleration Notice shall be given not more than 30 and not less than 15
calendar days prior to the Tax Event Acceleration Date, as provided in such
Section 2.5, and shall specifically identify each Seller electing to exercise
its cash settlement option and state the number of shares of Snyder Common Stock
in respect of which such election is made. The Tax Event Acceleration Notice
shall be in the form of Exhibit B hereto and shall be signed by all of the
Sellers. The Sellers' election to exercise the
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option contained in this Section 7.3 shall be irrevocable once made. As
promptly as reasonably practicable after receipt of the bid on which the
Liquidation Value is based, the Purchaser shall deliver to the Administrator,
the Collateral Agent and the Sellers a notice specifying the Liquidation Value
and the Tax Event Acceleration Amount required to be delivered by each Seller on
the Tax Event Acceleration Date.
VIII.
Miscellaneous
-------------
8.1. Adjustments to Exchange Rate Formula; Selection of Independent Firm.
-------------------------------------------------------------------
The Purchaser shall be responsible for the effectuation and calculation of any
adjustment to Exchange Rate Formula and any amount deliverable pursuant to
Sections 2.1, 2.4, 2.5 hereof and Article 7 hereof. The Purchaser shall provide
the Sellers reasonable opportunity to review the calculations pertaining to any
adjustment of the Exchange Rate Formula. As soon as practicable, but in no
event later than 11:30 A.M. (New York City time) on the Business Day immediately
preceding the Closing Date, the Purchaser shall provide the Sellers with a
statement showing the Purchaser's calculation of the Exchange Price, the
Exchange Amount and, assuming no subsequent adjustments to the Exchange Rate
Formula shall be required pursuant to Article III hereof, the Contract
Consideration or Cash Payment Amount, as applicable, to be delivered by each
Seller on the Closing Date. As soon as practicable, but in no event later than
10:00 A.M. (New York City time) on the Closing Date, the Purchaser shall provide
the Sellers with a statement showing the Purchaser's final calculations of the
amounts deliverable pursuant to Sections 2.1, 2.4, 2.5, 7.2 and 7.3 hereof. If
any Seller disagrees with any such calculation or determination, the Contract
Consideration or any Cash Payment Amount, _____________ or such other
independent accounting or investment banking firm agreed upon by such Seller and
the Purchaser shall be retained to make such calculation, which shall be binding
upon the Purchaser and such Seller and the Closing shall occur as promptly as
practicable after such calculation has been provided to the Purchaser and such
Seller. The fees and expenses of such firm shall be borne by the relevant
Seller. If, pursuant to the terms and conditions of this Agreement, the
Administrator shall be required to retain a nationally recognized independent
investment banking firm for any purpose provided herein (other than for purposes
of determining the Acceleration Value pursuant to Section 7.1 hereof), such
nationally recognized independent investment banking firm shall be selected and
retained by the Administrator only after giving the Sellers 30 days prior notice
(or such shorter notice as may be reasonably practicable) of the identity of
such firm and after consultation with the Sellers, and the Administrator shall
not select any firm that is not reasonably acceptable to the Sellers. The fees
and expenses of any such nationally recognized independent investment banking
firm retained by the Administrator shall be borne by the Sellers.
8.2. Notices. All notices and other communications 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 8.2): notices to
the Purchaser shall be directed to it in care of the Administrator at 101
Barclay Street, New York, New York 10286, telecopy number (212) 815-7157,
attention of Betty Cocozza, with a copy to Richard Bourgerie, Esq., Emmet,
Marvin & Martin, 120 Broadway, New York, New York 10271, telecopy number (212)
238-3100; notices to the Sellers shall be directed to them in care of:
_______________, ____________, telecopy
26
<PAGE>
number ( ) ________, attention of _____________. Except as otherwise
specifically provided herein, all notices and other communications provided for
hereunder shall be in writing and 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 specified in the preceding sentence, 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 in the preceding sentence, 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 mail, return receipt requested, to the offices
set forth in the preceding sentence, 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).
8.3. Governing Law; Consent to Jurisdiction. THIS AGREEMENT SHALL BE
--------------------------------------
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE. For
the purpose of any suit, action or proceeding arising out of or relating to this
Agreement, the parties hereto hereby expressly and irrevocably consent and
submit to the non-exclusive jurisdiction of any United States Federal or New
York State court sitting in the Borough of Manhattan, City and State of New
York, and expressly and irrevocably waive, to the extent permitted under
applicable law, any immunity from the jurisdiction thereof and any claim or
defense in such suit, action or proceeding based on a claim of improper venue,
forum non conveniens or any similar basis to which it might otherwise be
entitled.
8.4. WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE
--------------------
PARTIES HERETO HEREBY WAIVE AND COVENANT THAT THEY WILL NOT ASSERT (WHETHER AS
PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN
RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING OUT OF OR
BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF, IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING OR WHETHER IN CONTRACT OR TORT OR OTHERWISE. EACH
PARTY HERETO ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY EACH OTHER PARTY HERETO
THAT THE PROVISIONS OF THIS SECTION CONSTITUTE A MATERIAL INDUCEMENT UPON WHICH
SUCH OTHER PARTY HERETO HAS RELIED, IS RELYING AND WILL RELY IN ENTERING INTO
THIS AGREEMENT AND ANY DOCUMENT RELATED THERETO. EACH PARTY HERETO MAY FILE AN
ORIGINAL COUNTERPART OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF ANY OTHER PARTY HERETO TO THE WAIVER OF ITS RIGHTS TO TRIAL BY JURY.
27
<PAGE>
8.5. Headings; Entire Agreement. The paragraph headings and table of
--------------------------
contents have been inserted as a reference only and are not a part of this
Agreement and shall not affect the meaning or construction of any provisions
hereof. Except as expressly set forth herein, this Agreement and the Security
and Pledge Agreement constitute the entire agreement among the parties with
respect to the subject matter hereof and supersede all prior agreements,
understandings and negotiations, both written and oral, among the parties with
respect to the subject matter hereof.
8.6. Amendments; Waivers. Any provision of this Agreement may be amended
-------------------
or waived prior to the Closing if, and only if, such amendment or waiver is in
writing and signed, in the case of an amendment, by the Purchaser and each of
the Sellers or, in the case of a waiver, by the party against whom the waiver is
to be effective. No failure or delay by either party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
8.7. Termination. Notwithstanding anything to the contrary contained in
-----------
this Agreement, if the purchase and sale of the Initial STRYPES pursuant to the
Purchase Agreement is not consummated as contemplated therein, this Agreement
shall automatically terminate, and such termination shall be without liability
of any party to any other party, except that Sections 8.3 and 8.4 shall survive
any such termination and remain in full force and effect.
8.8. Successors, Assigns. The provisions of this Agreement shall be
-------------------
binding upon and accrue to the benefit of the parties hereto and their
respective successors and permitted assigns. Notwithstanding the foregoing,
neither this Agreement nor any right, remedy, obligation or liability arising
hereunder or by reason hereof shall be assignable by any party hereto without
the prior written consent of the other parties hereto.
8.9. No Third Party Rights. This Agreement is not intended and shall not
---------------------
be construed to create any rights in any person other than the Sellers and the
Purchaser and no person shall assert any rights as third party beneficiary
hereunder.
8.10. Application of Bankruptcy Code. The parties hereto acknowledge and
------------------------------
agree that (i) the Collateral Agent is a "financial institution" within the
meaning of Sections 101(22) and 555 of the Bankruptcy Code, (ii) the Collateral
Agent is acting as agent and custodian for the Purchaser in connection with this
Agreement, and (iii) the Purchaser is a "customer" of the Collateral Agent
within the meaning of said Sections 101(22) and 555. The parties hereto further
acknowledge and agree that this Agreement is a "securities contract", as such
term is defined in Section 741(7) of the Bankruptcy Code, and is entitled to the
protection of Section 555 of the Bankruptcy Code.
8.11. Counterparts. This Agreement may be signed in any number of
------------
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
28
<PAGE>
IN WITNESS WHEREOF, the parties have signed this Agreement as of the date
and year first above written.
SNYDER STRYPES TRUST D.M.S. ENDOWMENT, LLC
By: , as
[Managing Member]
By: ______________________________ By: ____________________________
Name: Donald J. Puglisi, Name:
as Managing Trustee Title:
THE BANK OF NEW YORK, SUTTON PARTNERS, LLC
as Collateral Agent
By: , as
[Managing Member]
By: ______________________________ By: _____________________________
Name: Name:
Title: Title:
THE BANK OF NEW YORK, A.O. ROBERTS, LLC
as Administrator
By: , as
[Managing Member]
By: _______________________________ By: ____________________________
Name: Name:
Title: Title:
USN COLLEGE MARKETING, L.P.
By: , as
General Partner
By: ____________________________
Name:
Title:
29
<PAGE>
Exhibit A
SNYDER STRYPES TRUST
(a Delaware business trust)
Option Unit Pricing Agreement
-----------------------------
____________, 1997
D.M.S. Endowment, LLC
[address]
Sutton Partners, LLC
[address]
A.O. Roberts, LLC
[address]
USN College Marketing, L.P.
[address]
Ladies and Gentlemen:
Reference is made to the Forward Purchase Contract, dated as of September
__, 1997 (the "Forward Purchase Contract"), among Snyder STRYPES Trust (the
"Purchaser"), The Bank of New York, as agent and custodian for and on behalf of
the Purchaser, and each of you (collectively, the "Sellers"), relating to the
future purchase by the Purchaser of the Contract Consideration from the Sellers.
The Underwriters have exercised their option, pursuant to Section 2(b) of the
Purchase Agreement, to purchase an aggregate of __________ Option STRYPES. In
connection with such exercise, the Purchaser has agreed to issue and sell to the
Underwriters, severally and not jointly, ______________ Option STRYPES. Payment
for and delivery of such Option STRYPES will be made at __________________ on
__________, 1997 (the "Date of Delivery").
Pursuant to subsection (b) of Section 2.1 of the Forward Purchase Contract,
the Purchaser and the Sellers hereby agree that the Option Unit Consideration to
be used in calculating the Option Consideration Amounts payable by the Purchaser
to the Sellers on the Date of Delivery as consideration for each Seller's
obligation to deliver (or cause to be delivered) the Contract
<PAGE>
Consideration in respect of the Option Contract Commitment created hereby shall
be $___________.*
Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Forward Purchase Contract.
___________________________
* The Option Unit Consideration shall be an amount equal to the initial
public offering price per Option STRYPES, net of (1) the underwriting
discount per Option STRYPES and (2) the cost per Option STRYPES of the
zero-coupon U.S. Government securities to be purchased by the Purchaser to
provide for the quarterly distributions on the Option STRYPES to which this
Option Unit Pricing Agreement relates. The selection of the zero-coupon
U.S. Government securities to be purchased in respect of any Option STRYPES
shall be made in a manner and on a basis consistent with the selection of
the zero-coupon U.S. Government securities purchased in respect of the
Initial STRYPES.
A-2
<PAGE>
If the foregoing is in accordance with our agreement, please sign and
return to Purchaser a counterpart hereof, whereupon this instrument, along with
all counterparts, will become a binding agreement between the Purchaser and each
Seller in accordance with its terms.
Very truly yours,
SNYDER STRYPES TRUST
By: _______________________________
Name: Donald J. Puglisi,
as Managing Trustee
CONFIRMED AND ACCEPTED, as of
the date first above written:
D.M.S. ENDOWMENT, LLC
By: , as
[Managing Member]
By: __________________________
Name:
Title:
SUTTON PARTNERS, LLC
By: , as
[Managing Member]
By: __________________________
Name:
Title:
A.O. ROBERTS, LLC
By: , as
[Managing Member]
By: __________________________
Name:
Title:
<PAGE>
USN COLLEGE MARKETING, L.P.
By: , as
General Partner
By: __________________________
Name:
Title:
A-4
<PAGE>
Exhibit B
SNYDER STRYPES TRUST
(a Delaware business trust)
Tax Event Acceleration Notice
-----------------------------
, 199
----------- --
Snyder STRYPES Trust
c\o Puglisi & Associates
850 Library Avenue
Suite 204
Newark, Delaware 19715
The Bank of New York
101 Barclay Street
New York, New York 10286
Ladies and Gentlemen:
In accordance with Section 7.3 of the Forward Purchase Contract dated
September , 1997 (the "Contract"), among Snyder STRYPES 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.)) (the "Purchaser"), The Bank of New York, a New York banking corporation,
as agent and custodian for and on behalf of the Purchaser and as administrator
for the Trust, and D.M.S. Endowment, LLC, a Delaware limited liability company,
Sutton Partners, LLC, a Delaware limited liability company, A.O. Roberts, LLC, a
Delaware limited liability company, and USN College Marketing, L.P., a Delaware
limited partnership (each, a "Seller" and, collectively, the "Sellers"), the
undersigned hereby notify you that a Tax Event (as defined in the Contract) has
occurred and that the undersigned hereby irrevocably elect to exercise the
acceleration option contained in Section 7.3 of the Contract and specify
, 199 as the Tax Event Acceleration Date (as defined in the
- --------------- --
Contract).
<PAGE>
The following Sellers irrevocably elect to exercise their cash settlement option
pursuant to Section 2.5 of the Contract as set forth below:
Name of Seller No. of shares of Snyder Common Stock
- -------------- ------------------------------------
D.M.S. Endowment, LLC
Sutton Partners, LLC
A.O. Roberts, LLC
USN College Marketing, L.P.
------------------------------------
Total
Enclosed herewith is an opinion of tax counsel referred to in the definition
of Tax Event in the Contract.
Very truly yours,
D.M.S. ENDOWMENT, LLC
By: , as
[Managing Member]
By:
Name:
Title:
SUTTON PARTNERS, LLC
By: , as
[Managing Member]
By:
Name:
Title:
A.O. ROBERTS, LLC
By: , as
[Managing Member]
By:
Name:
Title:
USN COLLEGE MARKETING, L.P.
By: , as
General Partner
By:
Name:
Title:
IMPORTANT - This notice must be signed by all of the Sellers to be effective.
----
B-2
<PAGE>
EXHIBIT K (4)
______________________________________________________________________________
______________________________________________________________________________
SNYDER STRYPES TRUST
SECURITY AND PLEDGE AGREEMENT
-----------------------------
Dated: September __, 1997
______________________________________________________________________________
______________________________________________________________________________
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
1. DEFINITIONS............................................................. 2
(a) Terms Defined in this Security and Pledge Agreement................ 2
Authorized Representative.......................................... 2
Bankruptcy Event................................................... 2
Collateral......................................................... 2
Collateral Agent................................................... 2
Collateral Amount.................................................. 2
Collateral Event of Default........................................ 2
Delivery........................................................... 2
Event of Default................................................... 3
Forward Purchase Contract.......................................... 3
Lien............................................................... 3
Pledgor and Pledgors............................................... 3
Responsible Officer................................................ 3
Secured Amounts.................................................... 3
Securities Account................................................. 4
Securities Intermediary............................................ 4
Security and Pledge Agreement...................................... 4
Security Entitlement............................................... 4
Snyder Communications.............................................. 4
Snyder Common Stock................................................ 4
Transfer Restriction............................................... 4
Trust.............................................................. 4
Trust Agreement.................................................... 4
Trustee or Trustees................................................ 5
Uniform Commercial Code............................................ 5
(b) Uniform Commercial Code............................................ 5
(c) Terms Defined in Forward Purchase Contract......................... 5
2. REQUIRED COLLATERAL..................................................... 5
(a) Initial Delivery by Pledgors to Collateral Agent................... 5
(b) Collateral Requirement............................................. 5
3. GRANT OF SECURITY INTEREST.............................................. 5
4. ADMINISTRATION OF COLLATERAL............................................ 6
(a) Collateral Adequacy................................................ 6
(b) Additional Collateral.............................................. 6
(c) Examination of Collateral.......................................... 7
(d) Release of Excess Collateral....................................... 7
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
(e) Maintenance of Collateral........................................ 7
(f) Investment of Cash Collateral.................................... 8
(g) Delivery of Contract Consideration............................... 8
5. DISTRIBUTIONS IN RESPECT OF COLLATERAL................................ 9
6. REMEDIES UPON EVENTS OF DEFAULT....................................... 10
(a) Delivery Upon Event of Default................................... 10
(b) Power of Attorney................................................ 10
(c) Waivers by Pledgors.............................................. 10
(d) Rights and Remedies Under the Uniform Commercial Code............ 10
7. OTHER PROVISIONS REGARDING THE COLLATERAL............................. 11
(a) No Disposition................................................... 11
(b) Further Protections.............................................. 11
(c) Delay in Enforcement; No Waiver.................................. 11
8. REPRESENTATIONS AND WARRANTIES........................................ 11
(a) Representations and Warranties of Pledgors....................... 11
(b) Representations and Warranties of Collateral Agent............... 12
9. THE COLLATERAL AGENT.................................................. 13
(a) Appointment of Collateral Agent.................................. 13
(b) Duties of Collateral Agent....................................... 13
(c) Reliance......................................................... 13
(d) Liability of Collateral Agent.................................... 13
(e) Risk of Funds.................................................... 14
(f) Use of Sub-Agents or Attorneys................................... 14
(g) Recitals and Statements.......................................... 14
(h) Knowledge........................................................ 14
(i) Merger........................................................... 14
(j) Resignation of Collateral Agent.................................. 15
(k) Removal.......................................................... 15
(l) Appointment of Successor......................................... 15
(m) Acceptance by Successor.......................................... 15
10. MISCELLANEOUS......................................................... 16
(a) Amendments, Etc.................................................. 16
(b) Notices and Other Communications................................. 16
(c) Waivers.......................................................... 17
(d) Non-Assignment................................................... 17
(e) Waiver of Jury Trial............................................. 17
(f) Governing Law.................................................... 18
(g) Headings......................................................... 18
(h) Entire Agreement................................................. 18
(i) Counterparts..................................................... 18
(j) Force Majeure.................................................... 18
(k) Binding Effect................................................... 18
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
(l) Separability..................................................... 18
11. TERMINATION OF SECURITY AND PLEDGE AGREEMENT.......................... 18
12. APPLICATION OF BANKRUPTCY CODE........................................ 19
13. NO PERSONAL LIABILITY OF TRUSTEES..................................... 19
</TABLE>
iii
<PAGE>
SECURITY AND PLEDGE AGREEMENT
This Security and Pledge Agreement is made as of September __, 1997 among
Snyder STRYPES Trust, a business trust organized 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.)) (such trust and the trustees thereof acting in
their capacity as such being referred to herein as the "Trust"), D.M.S.
Endowment, LLC, a Delaware limited liability company ("D.M.S."), Sutton
Partners, LLC, a Delaware limited liability company ("Sutton"), A.O. Roberts,
LLC, a Delaware limited liability company ("Roberts"), USN College Marketing,
L.P., a Delaware limited partnership ("USN") (D.M.S., Sutton, Roberts and USN
being referred to herein individually as a "Pledgor" and collectively as the
"Pledgors"), and The Bank of New York, a New York banking corporation, as agent
and custodian for and on behalf of the Trust (the "Collateral Agent").
WHEREAS, the Trust has filed with the Securities and Exchange Commission a
registration statement on Form N-2 (File Nos. 333-33707 and 811-08337) and Pre-
Effective Amendments No. 1, No. 2 and No. 3 thereto contemplating the offering
of up to 4,600,000 of its Structured Yield Product Exchangeable for Stock/SM/
(the "STRYPES"), the terms of which contemplate that, on , 2000 (the "Exchange
Date"), each such STRYPES will be mandatorily exchanged for a specified number
of shares of Common Stock, par value $.001 per share (the "Snyder Common
Stock"), of Snyder Communications, Inc., a Delaware corporation ("Snyder
Communications"), or, in certain circumstances, cash, or a combination of cash
and Snyder Common Stock, with an equal value.
WHEREAS, the STRYPES are to be issued pursuant to an Amended and Restated
Trust Agreement, dated as of September 15, 1997 (the "Trust Agreement"), among
the trustees of the Trust and ML IBK Positions, Inc., as Sponsor.
WHEREAS, in order to obtain the shares of Snyder Common Stock that would be
required by the Trust in order to exchange all of the STRYPES on the Exchange
Date, the Trust has entered into a Forward Purchase Contract, dated as of
September __, 1997 (the "Forward Purchase Contract"), with the Collateral Agent
and the Pledgors providing for the future acquisition, sale and delivery of the
aggregate number of shares of Snyder Common Stock that would be required by the
Trust in order to exchange all of the STRYPES on the Exchange Date, assuming
that none of the Pledgors has elected to exercise its option to deliver cash in
lieu of Snyder Common Stock.
WHEREAS, the Trust and the Pledgors desire that ownership of the Contract
Consideration (including, without limitation, voting rights and rights to
receive any dividends, interest, distributions and other payments in respect
thereof) remain in the Pledgors unless and until delivery, if any, of such
Contract Consideration to the Trust pursuant to the provisions hereof and of the
Forward Purchase Contract.
_____________________
(SM) Service mark of Merrill Lynch & Co., Inc.
<PAGE>
WHEREAS, the Pledgors have initially Delivered an aggregate of ________
shares of Snyder Common Stock to the Collateral Agent, which has agreed to hold
such shares pursuant to the terms hereof.
WHEREAS, the Trust and the Pledgors desire that the obligations of each
Pledgor under the Forward Purchase Contract shall be secured pursuant to the
terms hereof.
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Definitions.
-----------
(a) Terms Defined in this Security and Pledge Agreement. For all purposes
---------------------------------------------------
of this Security and Pledge Agreement, except as otherwise expressly provided or
unless the context otherwise requires, the following terms, when used herein,
shall have the following meanings:
"Authorized Representative" means, with respect to any Pledgor, any
representative as to whom such Pledgor shall have delivered notice to the
Collateral Agent that such representative is authorized to act hereunder on
behalf of such Pledgor.
"Bankruptcy Event" has the meaning specified in Schedule B.
"Collateral" means all the cash, securities and other property Delivered to
the Collateral Agent hereunder or pursuant to the Forward Purchase Contract in
respect of each Pledgor's Collateral Amount and held by the Collateral Agent,
including, without limitation, cash, securities or other property purchased with
cash Delivered by any Pledgor pursuant to Section 4(f) or otherwise obtained by
the Collateral Agent in respect of the foregoing.
"Collateral Agent" means the financial institution identified as such in
the introductory paragraph hereof, or any successor appointed in accordance with
Section 9(l).
"Collateral Amount" shall mean, with respect to any Pledgor at any time,
such Pledgor's Maximum Contract Consideration.
"Collateral Event of Default" means, with respect to any Pledgor at any
time, the failure of the Collateral pledged by such Pledgor to equal such
Pledgor's Collateral Amount if such failure is not remedied on or before the
third Business Day after notice of such failure is given to such Pledgor.
"Delivery" means (i) with respect to shares of Snyder Common Stock, the
delivery of such shares, free and clear of all Liens (other than a Lien created
or permitted by this Security and Pledge Agreement or a Lien created by the
Collateral Agent or the Trust), to the Collateral Agent at such location in The
City of New York as it shall direct, registered in the name of the Collateral
Agent or its nominee and accompanied by any required transfer tax stamps; (ii)
with respect to cash or Marketable Securities, the delivery of such cash or
Marketable Securities, free
2
<PAGE>
and clear of all Liens (other than a Lien created or permitted by this Security
and Pledge Agreement or a Lien created by the Collateral Agent or the Trust),
(A) to the Collateral Agent at such location in The City of New York as it shall
direct, in suitable form for delivery and transfer, accompanied by duly executed
instruments of transfer or assignment in blank and accompanied by any required
transfer tax stamps, or (B) to an account of the Collateral Agent in a clearing
system (or with a Securities Intermediary) acceptable to the Collateral Agent
and (iii) with respect to any securities the ownership of which is recorded in
book-entry form by a Federal Reserve Bank, delivery to the Collateral Agent of
(a) a listing of such securities by title (or series), unpaid principal amount
and maturity date and (b) such steps as are necessary for the Collateral Agent
or its Securities Intermediary to become the holder of a Security Entitlement
with respect to such securities through the Securities Account. The term
"Deliver" used as a verb has a corresponding meaning.
"Event of Default" means, with respect to any Pledgor, the occurrence of:
(i) a Bankruptcy Event or (ii) a Collateral Event of Default.
"Forward Purchase Contract" has the meaning specified in the third recital
in this Security and Pledge Agreement.
"Lien" means any lien, mortgage, security interest, pledge, charge,
encumbrance, claim or equity of any kind.
"Pledgor" and "Pledgors" have the meanings specified in the introductory
paragraph of this Security and Pledge Agreement.
"Responsible Officer" means, when used with respect to the Collateral
Agent, any vice president, assistant vice president, trust officer, assistant
treasurer or assistant secretary located in the division or department of the
Collateral Agent responsible for performing the obligations of the Collateral
Agent under this Security and Pledge Agreement, or in any other division or
department of the Collateral Agent performing operations substantially
equivalent to those performed by such division or department pursuant hereto, or
any other officer of the Collateral Agent or any successor Collateral Agent
customarily performing functions similar to those performed by any of the
aforesaid officers, and also means, with respect to any matter relating to this
Security and Pledge Agreement or the Collateral, any other officer to whom such
matter is referred because of his knowledge of and familiarity with the
particular subject.
"Secured Amounts" means, with respect to any Pledgor, the amounts at any
time payable or obligations to be performed by such Pledgor to or for the
benefit of the Trust pursuant to the Forward Purchase Contract and this Security
and Pledge Agreement, including, without limitation, (i) the delivery of such
Pledgor's Contract Consideration on the Closing Date pursuant to Section 2.1,
7.1, 7.2 or 7.3 of the Forward Purchase Contract and/or, if such Pledgor has
elected to exercise its option to settle its obligations under Sections 2.1,
2.2, 2.3, 2.4 or 7.3 of the Forward Purchase Contract in whole or in part by
making the cash settlement payment pursuant to Section 2.5 of the Forward
Purchase Contract in lieu of delivering shares of Snyder Common Stock, the
delivery of such cash settlement payment pursuant to Section 2.5 of the Forward
Purchase Contract and (ii) the delivery to the Trust of all or any portion of
the
3
<PAGE>
Collateral required to be delivered to the Trust by such Pledgor pursuant to
Section 6.1 of the Forward Purchase Contract at the respective times specified
therein.
"Securities Account" means the account of the Collateral Agent identified
as such to the relevant Pledgor by notice from the Collateral Agent.
"Securities Intermediary" has the meaning ascribed thereto in the Uniform
Commercial Code.
"Security and Pledge Agreement" means this Security and Pledge Agreement
and any schedules and exhibits hereto.
"Security Entitlement" has the meaning ascribed thereto in the Uniform
Commercial Code.
"Snyder Communications" has the meaning specified in the first recital in
this Security and Pledge Agreement.
"Snyder Common Stock" has the meaning specified in the first recital in
this Security and Pledge Agreement; provided that, in the event of a
reclassification referred to in clause (iv) of Section 3.1(a) of the Forward
Purchase Contract, the term "Snyder Common Stock" shall mean the other common
stock of Snyder Communications issued pursuant thereto.
"Transfer Restriction" means, with respect to any item of Collateral, any
condition to or restriction on the ability of the holder thereof to sell, assign
or otherwise transfer such item of Collateral or to enforce the provisions
thereof or of any document related thereto whether set forth in such item of
Collateral itself or in any document related thereto, including, without
limitation, (i) any requirement that any sale, assignment or other transfer or
enforcement of such item of Collateral be consented to or approved by any
Person, including, without limitation, the issuer thereof or any other obligor
thereon, (ii) any limitations on the type or status, financial or otherwise, of
any purchaser, pledgee, assignee or transferee of such item of Collateral, (iii)
any requirement of the delivery of any certificate, consent, agreement, opinion
of counsel, notice or any other document of any Person to the issuer of, any
other obligor on or any registrar or transfer agent for, such item of
Collateral, prior to the sale, pledge, assignment or other transfer or
enforcement of such item of Collateral and (iv) any registration or
qualification requirement for such item of Collateral pursuant to any federal or
state securities law; provided that (x) the required delivery of any assignment
from the seller, pledgor, assignor or transferor of such item of Collateral,
together with any evidence of the corporate or other authority of such Person,
or (y) any registration or qualification requirement for such item of Collateral
pursuant to any federal or state securities law which is generally applicable to
all holders of such item of Collateral, shall not constitute a "Transfer
Restriction."
"Trust" has the meaning specified in the introductory paragraph of this
Security and Pledge Agreement.
"Trust Agreement" has the meaning specified in the second recital in this
Security and Pledge Agreement.
4
<PAGE>
"Trustee" or "Trustees" means any trustee or trustees of the Trust
identified on the signature pages to the Trust Agreement, or any successor as
such trustee or trustees.
"Uniform Commercial Code" means the Uniform Commercial Code in effect in
the State of New York or, in connection with Delivery of any security referred
to in clause (ii) of the definition of the term Delivery, deemed to be in effect
pursuant to U.S. law and regulations applicable thereto.
(b) Uniform Commercial Code. Unless otherwise defined herein or in the
-----------------------
Forward Purchase Contract, all terms defined in Article 8 or Article 9 of the
Uniform Commercial Code are used herein as therein defined.
(c) Terms Defined in Forward Purchase Contract. Capitalized words and
------------------------------------------
phrases used herein and not otherwise defined herein are used herein as defined
in the Forward Purchase Contract.
2. Required Collateral.
-------------------
(a) Initial Delivery by Pledgors to Collateral Agent. Each Pledgor has
------------------------------------------------
Delivered to the Collateral Agent certificates representing the number of shares
of Snyder Common Stock set forth opposite such Pledgor's name on Schedule A
hereto, which represents such Pledgor's Collateral Amount as of the date hereof.
(b) Collateral Requirement. Each Pledgor shall Deliver, or cause to be
----------------------
Delivered, to the Collateral Agent cash, securities and other property such that
the Collateral pledged by such Pledgor hereunder is at all times at least equal
to such Pledgor's Collateral Amount. The Collateral Agent shall hold such
amounts of cash, securities and/or other property as from time to time may be
Delivered, or caused to be Delivered, to the Collateral Agent by any Pledgor as
Collateral pending delivery pursuant to the Forward Purchase Contract as
expressly provided herein in order to perfect the continuing first priority
security interest in such Collateral granted to the Collateral Agent, as agent
of and for the benefit of the Trust.
3. Grant of Security Interest.
--------------------------
(a) As security for the prompt and complete payment and performance when
due of the Secured Amounts with respect to such Pledgor, each Pledgor hereby
pledges, assigns, grants and conveys unto the Collateral Agent, as agent of and
for the benefit of the Trust, a continuing first priority security interest
under the Uniform Commercial Code or other applicable law in and to, and a
general first lien upon and right of set off against, all of such Pledgor's
right, title and interest in and to, the cash, securities and other property of
such Pledgor which are Delivered to the Collateral Agent on behalf of the Trust
and to any other assets in possession of the Collateral Agent as security
pursuant to and in accordance with the provisions of this Security and Pledge
Agreement, all certificates or instruments representing or evidencing any or all
of the foregoing, and all principal, interest and payments and distributions or
dividends, cash or other property and proceeds from time to time received,
receivable or otherwise distributed in respect of, or in exchange for, any or
all of the foregoing (whether such proceeds arise before or after the
commencement of any proceeding under any applicable bankruptcy, insolvency or
other similar law, by or against such Pledgor with respect to such Pledgor)
(except
5
<PAGE>
for the cash dividends, interest and payments required to be distributed to such
Pledgor in accordance with Section 5 hereof) and, subject to Section 5 hereof,
all powers and rights of such Pledgor now or hereafter acquired by such Pledgor,
including rights of enforcement, under or with respect to any or all of the
foregoing.
(b) Each Pledgor shall, at its expense and in such manner and form as the
Trust or the Collateral Agent may reasonably require, give, execute, deliver,
file and record any financing statement, notice, instrument, document, agreement
or other papers, and shall take all other action, that may be necessary or
desirable in order to create, preserve, perfect, substantiate or validate any
security interest in the Collateral granted by such Pledgor pursuant hereto or
to enable the Collateral Agent to exercise and enforce its rights and the rights
of the Trust hereunder with respect to such security interest. Upon the request
of the Collateral Agent, each Pledgor will execute and deliver to the Collateral
Agent financing statements conforming to the Uniform Commercial Code in effect
in any state or jurisdiction deemed appropriate by the Collateral Agent, and
such other documents as may be required in order to perfect the security
interest, all in a form the Collateral Agent reasonably deems to be acceptable.
Upon the request of the Collateral Agent, each Pledgor also agrees to execute
and deliver to the Collateral Agent for filing by the Collateral Agent
continuation statements conforming to the Uniform Commercial Code in effect in
any state or jurisdiction deemed appropriate by the Collateral Agent and in a
form the Collateral Agent reasonably deems to be acceptable. If any Pledgor
fails to deliver to the Collateral Agent financing statements or continuation
statements that the Collateral Agent requests, the Collateral Agent may, to the
extent permitted by law and without limiting its other rights under this
Security and Pledge Agreement, execute and file in such Pledgor's name, as such
Pledgor's attorney-in-fact, such documents and such Pledgor does hereby
designate the Collateral Agent as its attorney-in-fact to execute and file any
such financing statement or continuation statement.
4. Administration of Collateral.
----------------------------
(a) Collateral Adequacy. As soon as practicable after becoming aware of
-------------------
an event that requires an adjustment to the Exchange Rate Formula, the
Collateral Agent shall determine whether the Collateral pledged by each Pledgor
is at least equal to such Pledgor's Collateral Amount. If the Collateral Agent
determines that the Collateral pledged by any Pledgor is less than such
Pledgor's Collateral Amount, the Collateral Agent shall promptly notify such
Pledgor of such determination by telephone call to an Authorized Representative
of such Pledgor followed by a written confirmation of such call.
(b) Additional Collateral. A Pledgor shall Deliver, or cause to be
---------------------
Delivered, to the Collateral Agent such additional cash, securities and other
property of such Pledgor in the manner described in this Section 4(b) as are
necessary to satisfy the Collateral requirement set forth in Section 2(b)
hereof. Concurrently with the Delivery of any additional cash, securities or
other property as Collateral hereunder, the Pledgor pledging such additional
Collateral shall deliver (i) a certificate of an Authorized Representative of
such Pledgor substantially in the form of Exhibit A hereto and dated the date of
such Delivery, (A) identifying the additional items of Collateral being
Delivered and (B) certifying that with respect to such additional items of
Collateral the representations and warranties contained in such Exhibit A hereto
are true and correct on and as of the date thereof and (ii) an opinion, dated
the date of such delivery, of counsel addressed to the Collateral Agent
confirming the representations contained in the second
6
<PAGE>
sentence of paragraph 2(b) of Exhibit A hereto. Each Pledgor hereby covenants
and agrees to take all actions required under Section 3(b) and any other actions
necessary to create for the benefit of the Collateral Agent a valid, first
priority perfected security interest in, and a first lien upon, any such
additional Collateral pledged by such Pledgor.
(c) Examination of Collateral. Upon Delivery of any cash, securities or
-------------------------
other property by a Pledgor as Collateral under this Security and Pledge
Agreement, the Collateral Agent shall examine such cash, securities or property
and any opinions and certificates delivered pursuant to Section 4(b) or
otherwise pursuant to the terms hereof in connection therewith to determine that
they comply as to form with the requirements of this Security and Pledge
Agreement.
(d) Release of Excess Collateral. Unless an Event of Default with respect
----------------------------
to such Pledgor or a failure by such Pledgor to meet any of its obligations
under Sections 2 or 4 hereof has occurred and is continuing, a Pledgor may
obtain the release from the Lien hereof of any Collateral pledged by such
Pledgor in excess of such Pledgor's Collateral Amount, upon delivery to the
Collateral Agent of a written notice from an Authorized Representative of such
Pledgor indicating the items of Collateral to be released. Such Collateral
shall be released only after the Collateral Agent shall have determined that the
Collateral pledged by such Pledgor at the time of such proposed release, after
giving effect to the proposed release, shall at least equal such Pledgor's
Collateral Amount.
(e) Maintenance of Collateral. The Collateral shall be maintained by the
-------------------------
Collateral Agent in a separate non-commingled account and the Collateral Agent
shall use reasonable care with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession and shall accord the Collateral
treatment substantially equal to that which it accords its own property, it
being understood that the Collateral Agent in its capacity as such shall not,
except as specifically set forth herein or contemplated hereby, have any
responsibility for (a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities or other matters relative to any Collateral,
whether or not the Collateral Agent has or is deemed to have knowledge of such
matters, (b) taking any necessary steps to preserve rights against parties with
respect to any Collateral or (c) investing or reinvesting any of the Collateral.
The Collateral Agent shall have no right of offset against the Collateral with
respect to any amounts owed to the Collateral Agent, whether or not arising
under this Security and Pledge Agreement, and the Collateral Agent hereby waives
any such right of offset that it may otherwise have. Except as specifically
provided in this Security and Pledge Agreement, the Collateral Agent covenants
and agrees that it will not sell, assign, transfer, exchange or otherwise
dispose of, or grant any option with respect to, any of the Collateral, nor will
it create, incur or permit to exist any Lien or Transfer Restriction on or with
respect to any of the Collateral, any interest therein, or any proceeds thereof.
Any securities to be held by the Collateral Agent shall be held by the
Collateral Agent as Delivered, or caused to be Delivered, to it by the relevant
Pledgor (registered in the name of the Collateral Agent or its nominee or
endorsed in blank, as the case may be) or as obtained by the Collateral Agent
pursuant to Section 4(f), if applicable.
In the event of (i) any adjustment to the Exchange Rate Formula resulting
from the application of the provisions of Section 3.1 of the Forward Purchase
Contract or (ii) any
7
<PAGE>
Reorganization Event, the Collateral Agent shall take all measures reasonably
designed to assure that the Collateral is maintained by the Collateral Agent as
provided in this Security and Pledge Agreement and facilitating the operation of
Section 5 of this Security and Pledge Agreement, including, without limitation,
transmitting certificates representing the shares of Snyder Common Stock (x) in
the case of a reclassification referred to in clause (iv) of Section 3.1(a) of
the Forward Purchase Contract, to Snyder Communications or its transfer agent
for the preparation of new certificates to be returned to the Collateral Agent
and maintained by it as required by this Security and Pledge Agreement or (y) in
the case of a Reorganization Event, to the exchange agent for such
Reorganization Event for the delivery of the cash, securities and/or other
property to be received in exchange therefor and returned to the Collateral
Agent and maintained by it as required by this Security and Pledge Agreement.
(f) Investment of Cash Collateral. The Collateral Agent shall, in
-----------------------------
accordance with the written instructions of each Pledgor, invest and reinvest
all cash Collateral pledged by such Pledgor in United States Treasury Bills with
maturities of 7 days or less but in any case maturing not later than the second
Business Day prior to the Early Settlement Date and all such securities so
obtained and amounts obtained in respect thereof shall be held as Collateral
pledged by such Pledgor for all purposes hereof.
(g) Delivery of Contract Consideration. (i) On the Settlement Date, the
----------------------------------
Collateral Agent shall deliver to the Trust, in respect of each Pledgor's
obligations under Section 2.1 of the Forward Purchase Contract, an aggregate
number of shares of Snyder Common Stock then pledged by such Pledgor and held by
the Collateral Agent hereunder equal to the number of shares of Snyder Common
Stock then required to be delivered by such Pledgor under Section 2.1 of the
Forward Purchase Contract, except to the extent such Pledgor has made a proper
election, pursuant to Section 2.5 thereof, to settle its obligations under
Section 2.1 thereof in whole through a cash payment. Upon such delivery, the
Trust shall hold such delivered shares of Snyder Common Stock free and clear of
all Liens (other than Liens created by the Collateral Agent or the Trust) and
Transfer Restrictions (other than Transfer Restrictions created by the
Collateral Agent or the Trust).
(ii) On the Early Settlement Date (if any), the Collateral Agent shall
deliver to the Trust, in respect of each Pledgor's obligations under Section 7.2
of the Forward Purchase Contract, an aggregate amount of cash and/or an
aggregate number or amount of Marketable Securities then pledged by such Pledgor
and held by the Collateral Agent hereunder equal to the amount or number of cash
and/or Marketable Securities then required to be delivered by such Pledgor under
Section 7.2 of the Forward Purchase Contract. Upon such delivery, the Trust
shall hold such cash and/or Marketable Securities free and clear of all Liens
(other than Liens created by the Collateral Agent or the Trust) and Transfer
Restrictions (other than Transfer Restrictions created by the Collateral Agent
or the Trust).
(iii) On the Tax Event Acceleration Date (if any), the Collateral Agent
shall deliver to the Trust, in respect of each Pledgor's obligations under
Section 7.3 of the Forward Purchase Contract, an aggregate number of shares of
Snyder Common Stock then pledged by such Pledgor and held by the Collateral
Agent hereunder equal to the number of shares of Snyder Common Stock then
required to be delivered by such Pledgor under Section 7.3 of the Forward
Purchase Contract, except to the extent such Pledgor has made a proper election,
pursuant to Section 2.5 thereof, to settle its obligation to deliver such shares
of Snyder Common Stock under Section
8
<PAGE>
7.3 in whole through a cash payment. Upon such delivery, the Trust shall hold
such delivered shares of Snyder Common Stock free and clear of all Liens (other
than Liens created by the Collateral Agent or the Trust) and Transfer
Restrictions (other than Transfer Restrictions created by the Collateral Agent
or the Trust).
(iv) If after effecting the delivery, if any, required by subsection (i),
(ii) or (iii) of this Section 4(g), as applicable, all of the obligations of a
Pledgor under Articles II and VII of the Forward Purchase Contract (including
any obligation to pay the Cash Payment Amount pursuant to Section 2.5 thereof)
have been discharged or sufficient funds have been deposited with the
Administrator for the discharge thereof, any remaining cash, securities and
other property then pledged by such Pledgor and held by the Collateral Agent
shall be released and Delivered to such account or place as such Pledgor shall
have specified by notice to the Collateral Agent.
5. Distributions in Respect of Collateral.
--------------------------------------
(a) Unless an Event of Default with respect to a Pledgor or a failure by
a Pledgor to meet any of its obligations under Sections 2 or 4 hereof has
occurred and is continuing, such Pledgor shall be entitled to receive for its
own account all dividends, interest, distributions and other payments relating
to all of the Collateral pledged by such Pledgor. The Collateral Agent agrees to
release from the Lien hereof all such payments received by it and to remit the
same to the relevant Pledgor on the Business Day received or as soon as
practicable thereafter; provided that such payments shall be so released and
remitted only after the Collateral Agent shall have determined that the
Collateral pledged by such Pledgor at the time of such proposed release and
remittance, after giving effect to the proposed release and remittance, shall at
least equal such Pledgor's Collateral Amount. At any time when a Pledgor is not
entitled to receive any such payments hereunder, the Collateral Agent shall
retain such payments (and any such payments which are received by such Pledgor
shall be received in trust for the benefit of the Trust, shall be segregated
from other funds of such Pledgor and shall forthwith be paid over to the
Collateral Agent), and the Collateral Agent shall hold all such payments so
retained by, or paid over to, the Collateral Agent as Collateral hereunder. The
security interest of the Collateral Agent shall continue in any such payment so
retained by, or paid over to, the Collateral Agent.
(b) Unless an Event of Default with respect to a Pledgor or a failure by
a Pledgor to meet any of its obligations under Sections 2 or 4 hereof has
occurred and is continuing, until delivery pursuant to Section 4(g) hereof, such
Pledgor shall have the right, from time to time, to vote and to give consents,
ratifications and waivers with respect to the Collateral pledged by such
Pledgor, and the Collateral Agent shall, upon receiving a written request from
such Pledgor, deliver to such Pledgor or as specified in such request such
proxies, powers of attorney, consents, ratifications and waivers in respect of
any of the Collateral pledged by such Pledgor which is registered in the name of
the Collateral Agent or its nominee as shall be specified in such request and be
in form and substance reasonably satisfactory to the Collateral Agent.
If an Event of Default with respect to a Pledgor or a failure by a
Pledgor to meet any of its obligations under Sections 2 or 4 hereof shall have
occurred and be continuing, until delivery pursuant to Section 4(g) hereof, the
Collateral Agent may, and at the direction of the Managing Trustee shall, to the
extent permitted by law (and such Pledgor shall take all such action as may be
necessary or appropriate to give effect to such right), vote and give consents,
9
<PAGE>
ratifications and waivers, and take any other action with respect to any or all
of the Collateral pledged by such Pledgor with the same force and effect as if
the Collateral Agent were the absolute and sole owner thereof.
6. Remedies Upon Events of Default.
-------------------------------
(a) Delivery Upon Event of Default. If an Event of Default with respect
------------------------------
to any Pledgor shall have occurred and be continuing, the Collateral Agent
shall, in respect of each Pledgor, deliver to the Trust on the date the
Acceleration Amount Notice relating to such Event of Default is received by the
Collateral Agent or as soon as practicable thereafter an aggregate number of the
shares of Snyder Common Stock then pledged by such Pledgor and held by the
Collateral Agent hereunder equal to the number of shares of Snyder Common Stock
then required to be delivered by such Pledgor under Section 7.1 of the Forward
Purchase Contract, whereupon the Trust shall hold such shares of Snyder Common
Stock free and clear of all Liens (other than Liens created by the Collateral
Agent or the Trust) and Transfer Restrictions (other than Transfer Restrictions
created by the Collateral Agent or the Trust), including any equity or right of
redemption of any Pledgor which may be waived, and each Pledgor, to the extent
permitted by law, hereby specifically waives all rights of redemption, stay or
appraisal which it has or may have under any law now existing or hereafter
adopted.
(b) Power of Attorney. Upon any delivery of all or any part of any
-----------------
Collateral pledged by a Pledgor duly made under the power of delivery given
hereunder or under judgment or decree in any judicial proceedings for
foreclosure or otherwise for the enforcement of this Security and Pledge
Agreement, the Collateral Agent is hereby irrevocably appointed the true and
lawful attorney of such Pledgor, in the name and stead of such Pledgor, to make
all necessary deeds, bills of sale and instruments of assignment, transfer or
conveyance of the property thus delivered. For that purpose the Collateral Agent
may execute all such documents and instruments. This power of attorney shall be
deemed coupled with an interest, and each Pledgor hereby ratifies and confirms
all that its attorneys acting under such power, or such attorneys' successors or
agents, shall lawfully do by virtue of this Security and Pledge Agreement. If so
requested by the Collateral Agent or by the Trustees, such Pledgor shall further
ratify and confirm any such delivery by executing and delivering to the
Collateral Agent or to the Trustees at the expense of such Pledgor all proper
deeds, instruments of assignment, conveyance of transfer and releases as may be
designated in any such request.
(c) Waivers by Pledgors. Each Pledgor waives any presentment, demand,
-------------------
protest or, to the extent permitted by applicable law, notice in connection with
this Security and Pledge Agreement.
(d) Rights and Remedies Under the Uniform Commercial Code. In the event
-----------------------------------------------------
that the Secured Amounts with respect to any Pledgor are not paid and performed
when due, in addition to all other rights and remedies provided for herein or
otherwise available to the Collateral Agent and the Trust, the Collateral Agent
may, and at the direction of the Managing Trustee shall, exercise all of the
rights and remedies of a secured party under the Uniform Commercial Code
(whether or not the Uniform Commercial Code applies to the Collateral) and all
other applicable law with respect to all or any part of the Collateral.
10
<PAGE>
7. Other Provisions Regarding the Collateral.
-----------------------------------------
Until all obligations of each Pledgor under Articles II and VII of the
Forward Purchase Contract have been performed in full, the parties hereto
covenant and agree as follows:
(a) No Disposition. Each Pledgor covenants and agrees that it will not
--------------
sell, assign, transfer, exchange or otherwise dispose of, or grant any option
with respect to, any of the Collateral, nor will it create, incur or permit to
exist any Lien on or with respect to any of the Collateral, any interest
therein, or any proceeds thereof, other than Liens created by this Security and
Pledge Agreement and Liens created by the Collateral Agent or the Trust.
(b) Further Protections. Each Pledgor will pay in a timely fashion all
-------------------
taxes, assessments, fees or charges of any nature that are imposed in respect of
the Collateral pledged by such Pledgor as a result of such Pledgor's ownership
thereof or any action or omission on the part of such Pledgor. Each Pledgor
will give written notice to the Trust and the Collateral Agent of, and defend
the Collateral pledged by such Pledgor against, any suit, action or proceeding
against the Collateral pledged by such Pledgor or which could adversely affect
the security interests granted hereunder.
(c) Delay in Enforcement; No Waiver. To the extent consistent with the
-------------------------------
Uniform Commercial Code and applicable law, the Collateral Agent can choose to
delay or not to enforce any of its rights under this Security and Pledge
Agreement without losing such rights. If the Collateral Agent chooses not to
exercise or enforce any of its rights, each Pledgor agrees that the Collateral
Agent is not waiving the right to enforce such rights at a later time or any of
its other rights. Any waiver of the Collateral Agent's rights under this
Security and Pledge Agreement must be in writing.
8. Representations and Warranties.
------------------------------
(a) Representations and Warranties of Pledgors. On a continuing basis
------------------------------------------
during the term of this Security and Pledge Agreement, each Pledgor represents
and warrants to the Collateral Agent and to the Trust as follows:
(i) such Pledgor has full power and authority to execute and
deliver this Security and Pledge Agreement and to perform and observe the
provisions hereof, except as performance may be limited by bankruptcy,
insolvency, reorganization, moratorium, or other similar laws now or
hereafter in effect relating to creditors' rights, and general principles
of equity (regardless of whether the enforceability of such performance is
considered in a proceeding in equity or at law);
(ii) the execution, delivery and performance of this Security and
Pledge Agreement by such Pledgor has been duly authorized by all necessary
action on the part of such Pledgor and does not contravene any requirement
of law, such Pledgor's limited liability company agreement or limited
partnership agreement, as the case may be, or any material transactional
restriction or material agreement binding on or affecting such Pledgor or
any of its assets;
11
<PAGE>
(iii) this Security and Pledge Agreement has been duly and properly
executed and delivered by such Pledgor and constitutes a legal, valid and
binding agreement of such Pledgor enforceable against such Pledgor in
accordance with its terms, except as the enforcement of rights and remedies
may be limited by bankruptcy, insolvency, reorganization, moratorium, or
other similar laws now or hereafter in effect relating to creditors'
rights, and general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law);
(iv) no Transfer Restrictions (other than Transfer Restrictions
created by this Security and Pledge Agreement and Transfer Restrictions
created by the Collateral Agent or the Trust) exist with respect to or
otherwise apply to the assignment of, or transfer by such Pledgor of
possession of, any items of Collateral to the Collateral Agent hereunder,
or the subsequent sale or transfer of such items of Collateral by the
Collateral Agent pursuant to the terms hereof;
(v) except for the rights of the Trust and of the Collateral Agent
on the Trust's behalf established under this Security and Pledge Agreement
and the Forward Purchase Contract, such Pledgor has good and marketable
title to the Collateral pledged by it under this Security and Pledge
Agreement, free and clear of all Liens (other than the Lien created by this
Security and Pledge Agreement and any Lien created by the Collateral Agent
or the Trust) and Transfer Restrictions (other than Transfer Restrictions
created by this Security and Pledge Agreement and Transfer Restrictions
created by the Collateral Agent or the Trust) and has the right to pledge
such Collateral as provided in this Security and Pledge Agreement;
(vi) such Pledgor is not in default under any agreement by which the
Collateral pledged by it may be bound and no litigation, arbitration or
administrative proceeding of which such Pledgor has received notice or
service of process is pending, which default, litigation, arbitration or
administrative proceeding is material to the Collateral pledged by it in
the context of this Security and Pledge Agreement;
(vii) upon Delivery of the Collateral to the Collateral Agent
hereunder, the Collateral Agent will obtain a valid first priority and
perfected and enforceable security interest in, and a first lien on, such
Collateral subject to no other Lien; and none of such Collateral is or
shall be pledged by such Pledgor as collateral for any other purpose; and
(viii) such Pledgor is presently solvent and able to pay, and paying,
its debts as they come due, and anticipates that it will continue to be
able to pay its debts as they come due for the foreseeable future.
(b) Representations and Warranties of Collateral Agent. On a continuing
--------------------------------------------------
basis during the term of this Security and Pledge Agreement, the Collateral
Agent represents and warrants to each Pledgor and to the Trust as follows:
(i) the Collateral Agent is a banking corporation, duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all corporate powers and all
material governmental licenses, authorizations, consents
12
<PAGE>
and approvals required to enter into, and perform its obligations under,
this Security and Pledge Agreement;
(ii) the execution, delivery and performance by the Collateral Agent
of this Security and Pledge Agreement have been duly authorized by all
necessary corporate action on the part of the Collateral Agent (no action
by the shareholders of the Collateral Agent being required) and do not and
will not violate, contravene or constitute a default under any provision of
applicable law or regulation or of the charter or by-laws of the Collateral
Agent or of any material agreement, judgment, injunction, order, decree or
other instrument binding upon the Collateral Agent; and
(iii) this Security and Pledge Agreement has been duly and properly
executed and delivered by the Collateral Agent and constitutes a legal,
valid and binding agreement of the Collateral Agent enforceable against the
Collateral Agent in accordance with its terms, except as the enforcement of
rights and remedies may be limited by bankruptcy, insolvency,
reorganization, moratorium, or other similar laws now or hereafter in
effect relating to creditors' rights, and general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
9. The Collateral Agent.
--------------------
(a) Appointment of Collateral Agent. The Trust hereby appoints and
-------------------------------
designates the Collateral Agent as its agent and custodian for the purposes set
forth herein, and the Collateral Agent does hereby accept such appointment under
the terms and conditions set forth herein.
(b) Duties of Collateral Agent. The Collateral Agent undertakes to
--------------------------
perform only such duties as are expressly set forth herein. The duties and
responsibilities of the Collateral Agent hereunder shall be determined solely by
the express provisions of this Security and Pledge Agreement, and no other or
further duties or responsibilities shall be implied.
(c) Reliance. Subject to the limitations, covenants and provisions
--------
hereof, the Collateral Agent may rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon the face of any note,
notice, resolution, consent, certificate, affidavit, letter, telegram,
statement, order or other document furnished to it hereunder by the Trust or any
Pledgor and believed by it to be genuine and to have been signed or presented by
the proper party or parties, and shall have no responsibility for determining
the accuracy thereof.
(d) Liability of Collateral Agent. Neither the Collateral Agent nor any
-----------------------------
of its directors, officers or employees shall be liable for any action taken or
omitted by it hereunder except in the case of its gross negligence, bad faith,
willful misconduct or its failure to use reasonable care with respect to the
custody, safekeeping and physical preservation of the Collateral in its
possession. The Collateral Agent may consult with counsel of its own choice,
including in-house counsel, and shall have full and complete authorization and
protection for any action taken or omitted by it hereunder in good faith and in
accordance with the opinion of such counsel. The Collateral Agent shall not be
liable with respect to any action taken, suffered or omitted by it in good faith
(i) reasonably believed by it to be authorized or within the discretion or
rights or powers conferred on it by this Security and Pledge Agreement or (ii)
in accordance with any direction or request of the Trustees. In no event shall
the Collateral Agent be
13
<PAGE>
personally liable for any taxes or other governmental charges imposed upon or in
respect of (i) the Collateral or (ii) the income or other distributions thereon.
Except as specifically provided herein, the Collateral Agent shall not be
responsible for the validity, sufficiency, collectibility or marketability of
any Collateral Delivered to or held by it hereunder or for the validity or
sufficiency of the Forward Purchase Contract or the Lien (or the priority
thereof) on the Collateral purported to be created hereby. In no event shall
the Collateral Agent be liable for punitive, exemplary, indirect or
consequential damages. Except as specifically set forth herein or contemplated
hereby, the Collateral Agent shall have no duty (a) to see to any recording,
filing or depositing of this Security and Pledge Agreement or any agreement
referred to herein or therein or any financing statement or continuation
statement evidencing a security interest, or to see to the maintenance of any
such recording or filing or depositing or to any rerecording, refiling or
redepositing of any thereof, (b) to see to any insurance or (c) to see to the
payment or discharge of any tax, assessment, or other governmental charge or any
lien or encumbrance of any kind owing with respect to, assessed or levied
against, any part of the Collateral. The Collateral Agent shall not be
accountable for the use or application by the Trust of any of the proceeds of
the Collateral.
(e) Risk of Funds. No provision of this Security and Pledge Agreement
-------------
shall require the Collateral Agent to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.
(f) Use of Sub-Agents or Attorneys. The Collateral Agent may perform any
------------------------------
duties hereunder either directly or by or through agents or attorneys, provided
that the Collateral Agent shall remain liable to fulfill all of such duties to
the same extent, and with the same protections, as if the Collateral Agent was
performing them itself.
(g) Recitals and Statements. The Collateral Agent shall not be
-----------------------
responsible for the correctness of the recitals and statements herein which are
made by the Trust and the Pledgors or for any statement or certificate delivered
by any Pledgor pursuant hereto.
(h) Knowledge. The Collateral Agent shall not be deemed to have knowledge
---------
of any Event of Default (except a Collateral Event of Default), unless and until
a Responsible Officer of the Collateral Agent shall have actual knowledge
thereof or shall have received written notice thereof.
(i) Merger. Any corporation or association into which the Collateral
------
Agent may be converted or merged, or with which it may be consolidated, or to
which it may sell or transfer its agency business and assets as a whole or
substantially as a whole, or any corporation or association resulting from any
such conversion, sale, merger, consolidation or transfer to which it is a party,
anything herein to the contrary notwithstanding, shall be and become a successor
Collateral Agent hereunder and vested with all of the title to the Collateral
and all of the powers, discretions, immunities, privileges and other matters as
was its predecessor without, the execution or filing of any instrument or any
further act, deed or conveyance on the part of any of the parties hereto,
provided that such corporation or association meets the requirements set forth
in Section 9(l)(2) hereof and in the Trust Agreement.
14
<PAGE>
(j) Resignation of Collateral Agent. The Collateral Agent may resign and
-------------------------------
be discharged from its duties or obligations hereunder by giving thirty (30)
days prior notice in writing of such resignation to the Trust and each Pledgor.
Such resignation shall take effect upon the appointment of a successor
Collateral Agent by the Trust. If, within 30 days after notice by the
Collateral Agent to the Trust and the Pledgors of the Collateral Agent's
resignation, no successor Collateral Agent shall have been appointed and
accepted the duties of the Collateral Agent as provided herein, the Collateral
Agent may apply to a court of competent jurisdiction for the appointment of a
successor Collateral Agent.
(k) Removal. The Collateral Agent may be removed at any time by an
-------
instrument or concurrent instruments in writing delivered to the Collateral
Agent and to each Pledgor and signed by the Trust.
(l) Appointment of Successor.
------------------------
(1) If the Collateral Agent hereunder shall resign or be removed, or
be dissolved or shall be in the course of dissolution or liquidation or
otherwise become incapable of action hereunder, or if it shall be taken
under the control of any public officer or officers or of a receiver
appointed by a court, a successor may be appointed by the Trust by an
instrument or concurrent instruments in writing signed by the Trust or by
its attorneys in fact fully authorized. A copy of such instrument or
concurrent instruments shall be sent by registered mail to each Pledgor.
(2) Every such temporary or permanent successor Collateral Agent
appointed pursuant to the provisions hereof shall be a trust company or
bank in good standing, having a reported capital and surplus of not less
than $100,000,000 and capable of holding the Collateral in the State of New
York, if there be such an institution willing, qualified and able to accept
the duties of the Collateral Agent hereunder upon customary terms.
(m) Acceptance by Successor. Every temporary or permanent successor
-----------------------
Collateral Agent appointed hereunder shall execute, acknowledge and deliver to
its predecessor and also to each Pledgor an instrument in writing accepting such
appointment hereunder, whereupon such successor, without any further act, deed
or conveyance, shall become fully vested with all the estates, properties,
rights, powers, duties and obligations of its predecessors. Such predecessor
shall, nevertheless, on the written request of its successor or any Pledgor,
execute and deliver an instrument transferring to such successor all the
estates, properties, rights and powers of such predecessor hereunder. Every
predecessor Collateral Agent shall deliver all Collateral held by it as the
Collateral Agent hereunder to its successor. Should any instrument in writing
from any Pledgor be required by a successor Collateral Agent for more fully and
certainly vesting in such successor the estates, properties, rights, powers,
duties and obligations hereby vested or intended to be vested in the
predecessor, any and all such instruments in writing shall, at the request of
the temporary or permanent successor Collateral Agent, be forthwith executed,
acknowledged and delivered by such Pledgor.
15
<PAGE>
10. Miscellaneous.
-------------
(a) Amendments, Etc. Any amendment or modification of any provision of
----------------
this Security and Pledge Agreement shall be in writing with the express written
consent of the parties hereto. Any terms and conditions of this Security and
Pledge Agreement may be waived in writing at any time by the party or parties
entitled to the benefits of such terms and conditions. Any waiver shall be
effective only for the specific purpose for which given and for the specific
time period, if any, contemplated therein. A waiver of any of the terms and
conditions of this Security and Pledge Agreement on one occasion shall not
constitute a waiver of the other terms and conditions of this Security and
Pledge Agreement, or of such terms and conditions on any other occasion.
(b) Notices and Other Communications. All notices and other
--------------------------------
communications 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 10(b)):
Pledgors: D.M.S. Endowment, LLC
[Address]
Attention:
Telephone: ( )
Telecopier: ( )
Sutton Partners, LLC
[Address]
Attention:
Telephone: ( )
Telecopier: ( )
A.O. Roberts, LLC
[Address]
Attention:
Telephone: ( )
Telecopier: ( )
USN College Marketing, L.P.
[Address]
Attention:
Telephone: ( )
Telecopier: ( )
16
<PAGE>
Collateral Agent: The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: Betty Cocozza
Telephone: (212) 815-5366
Telecopier: (212) 815-7157
Trust: c/o Puglisi & Associates
850 Library Avenue
Suite 204
Newark, Delaware 19715
Attention: Donald J. Puglisi
Telephone: 302-738-6680
Telecopier: 302-738-7210
Except as otherwise specifically provided herein, all notices and other
communications provided for hereunder shall be in writing and 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 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).
(c) Waivers. No failure or delay by any party hereto in exercising any
-------
rights, power or privilege hereunder shall operate as a waiver thereof.
(d) Non-Assignment. No party hereto shall have the right to assign their
--------------
rights or obligations hereunder to any other person without the other parties'
prior written consent.
(e) Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE
---------------------
PARTIES HERETO HEREBY WAIVE AND COVENANT THAT THEY WILL NOT ASSERT (WHETHER AS
PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN
RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING OUT OF OR
BASED UPON THIS SECURITY AND PLEDGE AGREEMENT OR THE SUBJECT MATTER HEREOF, IN
EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING OR WHETHER IN CONTRACT OR
TORT OR OTHERWISE. EACH PARTY HERETO HEREBY ACKNOWLEDGES THAT IT HAS BEEN
INFORMED THAT THE PROVISIONS OF THIS SECTION CONSTITUTE
17
<PAGE>
A MATERIAL INDUCEMENT UPON WHICH THE OTHER PARTIES HERETO HAVE RELIED, ARE
RELYING AND WILL RELY IN ENTERING INTO THIS SECURITY AND PLEDGE AGREEMENT AND
ANY DOCUMENT RELATED THERETO. EACH PARTY HERETO MAY FILE AN ORIGINAL
COUNTERPART OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF
THE OTHER PARTIES HERETO TO THE WAIVER OF THEIR RESPECTIVE RIGHTS TO TRIAL BY
JURY.
(f) Governing Law. This Security and Pledge Agreement shall be governed by
-------------
and construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed wholly within such State; provided that as
to Collateral located in any jurisdiction other than the State of New York, the
Collateral Agent on behalf of the Trust shall have all of the rights to which a
secured party is entitled under the laws of such other jurisdiction. For the
purpose of any suit, action or proceeding arising out of or relating to this
Security and Pledge Agreement, the parties hereto hereby expressly and
irrevocably consent and submit to the non-exclusive jurisdiction of any United
States Federal or New York State court sitting in the Borough of Manhattan, City
and State of New York, and expressly and irrevocably waive, to the extent
permitted under applicable law, any immunity from the jurisdiction thereof and
any claim or defense in such suit, action or proceeding based on a claim of
improper venue, forum non conveniens or any similar basis to which it might
otherwise be entitled.
(g) Headings. The headings herein are for the convenience of reference
--------
only and shall not affect the meaning or construction of any provision hereof.
(h) Entire Agreement. This Security and Pledge Agreement and the Forward
----------------
Purchase Contract contains the entire agreement between the parties relating to
the subject matter hereof and supersede all oral statements and prior writings
with respect thereto.
(i) Counterparts. This Security and Pledge Agreement may be executed in
------------
any number of counterparts, each of which when so executed and delivered shall
be deemed for all purposes an original, but all such counterparts shall
constitute but one and the same instrument.
(j) Force Majeure. None of the Pledgors, the Collateral Agent or the Trust
-------------
shall be responsible for delays or failures in performance resulting from acts
beyond its control. Such acts shall include but not be limited to acts of God,
strikes, lockouts, riots, acts of war, epidemics, governmental regulations
superimposed after the fact, fire, power failures, earthquakes or other
disasters.
(k) Binding Effect. This Security and Pledge Agreement shall be binding
--------------
upon the respective parties hereto and their heirs, executors, successors and
assigns. All the covenants and agreements herein contained by or on behalf of
any Pledgor and the Collateral Agent shall be enforceable by and inure to the
benefit of the Trust and its successors and assigns.
(l) Separability. To the extent permitted by law, the unenforceability or
------------
invalidity of any provision or provisions of this Security and Pledge Agreement
shall not render any other provision or provisions herein contained
unenforceable or invalid.
11. Termination of Security and Pledge Agreement. This Security and Pledge
--------------------------------------------
Agreement and the rights hereby granted by each Pledgor in the Collateral
pledged by such Pledgor shall
18
<PAGE>
cease, terminate and be void upon fulfillment of all of the obligations of such
Pledgor under Articles II and VII of the Forward Purchase Contract, and such
Pledgor shall have no further liability hereunder upon such termination. Any
Collateral pledged by a Pledgor remaining at the time of such termination shall
be fully released and discharged from the Lien hereof and delivered to such
Pledgor by the Collateral Agent, all at the expense of such Pledgor.
12. Application of Bankruptcy Code. The parties hereto acknowledge and agree
------------------------------
that the Collateral Agent is a "financial institution" within the meaning of
Section 101(22) of the Bankruptcy Code and is acting hereunder as agent and
custodian for the Trust in connection with the Forward Purchase Contract and
that the Trust is a "customer" of the Collateral Agent within the meaning of
said Section 101(22). The parties hereto further acknowledge and agree that the
term "forward contract", as such term is used in the Forward Purchase Contract,
does not mean a "forward contract" as referred to in either Section
101(49)(B)(iii) of the Bankruptcy Code or Section 1259(d)(1) of the Internal
Revenue Code of 1986, as amended.
13. No Personal Liability of Trustees. By executing this Security and Pledge
---------------------------------
Agreement, none of the Trustees assumes any personal liability hereunder.
19
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Security and Pledge
Agreement to be executed by their respective officers or representatives
thereunto duly authorized as of the day and year first above written.
D.M.S. ENDOWMENT, LLC
By: ____________________________________
Name:
Title:
Tax ID No. _____________________________
SUTTON PARTNERS, LLC
By: ____________________________________
Name:
Title:
Tax ID No. _____________________________
A.O. ROBERTS, LLC
By: ____________________________________
Name:
Title:
Tax ID No. _____________________________
USN COLLEGE MARKETING, L.P.
By: ____________________________________
Name:
Title:
Tax ID No. _____________________________
<PAGE>
THE BANK OF NEW YORK,
as Collateral Agent
By: ____________________________________
Name:
Title:
SNYDER STRYPES TRUST
________________________________________,
Donald J. Puglisi, as Managing Trustee
21
<PAGE>
SCHEDULE A
----------
<TABLE>
<CAPTION>
Number of
Name of Pledgor Shares
--------------- ---------
<S> <C>
D.M.S. Endowment, LLC....................................
Sutton Partners, LLC.....................................
A.O. Roberts, LLC........................................
USN College Marketing, L.P...............................
------------
Total..........................................
============
</TABLE>
Sch A-1
<PAGE>
SCHEDULE B
----------
Bankruptcy Events
-----------------
A "Bankruptcy Event" shall have occurred with respect to any Pledgor upon
the occurrence at any time of any of the following events:
1. Such Pledgor shall commence a voluntary case or other proceeding
seeking a liquidation, reorganization or other relief with respect to itself or
its debts under the Bankruptcy Code or any other bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall take any corporate action to
authorize any of the foregoing; or
2. An involuntary case or other proceeding shall be commenced against
such Pledgor seeking liquidation, reorganization or other relief with respect to
it or its debts under the Bankruptcy Code or any other bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or all or
substantially all of such Pledgor's assets shall become subject to the
jurisdiction of a bankruptcy court; or an order for relief or similar decree
shall be entered against such Pledgor under the Bankruptcy Code or any other
bankruptcy, insolvency or other similar law now or hereafter in effect.
Sch B-1
<PAGE>
EXHIBIT A
---------
CERTIFICATE FOR ADDITIONAL COLLATERAL
The undersigned, ________________, [title] of [D.M.S. Endowment, LLC]
[Sutton Partners, LLC] [A.O. Roberts, LLC] [USN College Marketing, L.P.] (the
"Pledgor"), hereby certifies, pursuant to Section 4(b) of the Security and
Pledge Agreement, dated as of September , 1997, among the Pledgor, The Bank of
New York, as Collateral Agent, and Snyder STRYPES Trust (the "Security and
Pledge Agreement"; terms defined in the Security and Pledge Agreement being used
herein as defined therein), that:
1. The Pledgor is delivering the following securities, obligations or
other property to the Collateral Agent to be held by the Collateral Agent as
additional Collateral (the "Additional Collateral"):
[Specify Additional Collateral]
2. The Pledgor hereby represents and warrants to the Collateral Agent
that:
(a) Consents to Transfer. No Transfer Restrictions exist with respect
to or otherwise apply to the assignment of, or transfer by the Pledgor of
possession of, any items of Additional Collateral to the Collateral Agent
under the Security and Pledge Agreement, or the subsequent sale or transfer
of such items of Additional Collateral by the Collateral Agent pursuant to
the terms of the Security and Pledge Agreement.
(b) Title to Collateral; Perfected Security Interest. The Pledgor has
good and marketable title to the Additional Collateral, free of all Liens
(other than the Lien created by the Security and Pledge Agreement) and
Transfer Restrictions. Upon Delivery of the Additional Collateral to the
Collateral Agent, the Collateral Agent will obtain a valid, first priority
perfected security interest in, and a first lien upon, such Additional
Collateral subject to no other Lien. None of such Additional Collateral is
or shall be pledged by the Pledgor as collateral for any other purpose.
This Certificate may be relied upon by the Trust as fully and to the same
extent as if this Certificate had been specifically addressed to the Trust.
Ex A-1
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this Certificate this
_______ day of _______________ , 199__.
______________________________
Name:
Title:
<PAGE>
EXHIBIT K(5)
FUND EXPENSE AGREEMENT
Agreement dated as of September __, 1997 among D.M.S. Endowment, LLC,
Sutton Partners, LLC, A.O. Roberts, LLC and USN College Marketing, L.P. (each, a
"Contracting Stockholder" and, collectively, the "Contracting Stockholders"),
Merrill Lynch & Co., Inc. ("Merrill Lynch") and The Bank of New York (the
"Service Provider"), in its capacities as administrator, custodian and
collateral agent for Snyder STRYPES Trust (the "Trust").
WHEREAS, the Trust is a business trust organized 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 September , 1997 (the "Trust Agreement");
and
WHEREAS, the Contracting Stockholders and Merrill Lynch desire to make
provisions for the payment of certain initial and on-going expenses of the
Trust;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained in this Agreement, the parties agree as follows:
1. DEFINITIONS. (a) Capitalized terms used herein and not defined
herein shall have the meanings ascribed thereto in the Trust Agreement.
(b) The following terms shall have the following meanings:
"Additional Expense" means the Ordinary Expense the incurring of which will
require the Service Provider to provide the Additional Expense Notice pursuant
to Section 3(a) hereof and any Ordinary Expense incurred thereafter.
"Additional Expense Notice" means the notice required to be given by the
Service Provider to Merrill Lynch pursuant to Section 3(a) hereof.
"Closing Time" shall have the meaning ascribed thereto in the Purchase
Agreement.
"Offering Expense Amount" means the amount set forth as such on Schedule I
hereto as the fees and expenses of the Trust incurred in connection with the
offering of the STRYPES.
<PAGE>
"Ordinary Expense" of the Trust means any expense of the Trust other than
any expense of the Trust arising under Sections 2.2(g) and 6.6 of the
Administration Agreement, Section 15 of the Custodian Agreement, Section 5.4(b)
of the Paying Agent Agreement and Section 7.6 of the Trust Agreement.
"Organizational Expense Amount" means the amount set forth as such on
Schedule II hereto as the fees and expenses of the Trust incurred in connection
with the organization of the Trust.
"Up-front Fee Amount" means the amount set forth as such on Schedule III
hereto payable as a one-time payment to the Service Provider in respect of its
collective services as Administrator, Custodian, Paying Agent and Collateral
Agent for the entire term of the Trust.
"Up-front Expense Amount" means the amount set forth as such on Schedule IV
hereto payable as a one-time payment to the Service Provider in respect of
Ordinary Expenses anticipated to be incurred by the Administrator on behalf of
the Trust, pursuant to the Administration Agreement, during the term of the
Trust.
2. AGREEMENT TO PAY UP-FRONT FEES AND OFFERING, ORGANIZATIONAL AND UP-
FRONT EXPENSES. The Contracting Stockholders jointly and severally agree to pay
to the Service Provider in Federal (same day) funds at the Closing Time the Up-
front Fee Amount, the Offering Expense Amount, the Organizational Expense Amount
and the Up-front Expense Amount.
3. AGREEMENT TO PAY ADDITIONAL EXPENSES. (a) Prior to incurring any
Ordinary Expense on behalf of the Trust that, together with all prior Ordinary
Expenses incurred by the Administrator on behalf of the Trust and all Ordinary
Expenses set forth on Schedule IV hereto which are anticipated but have not yet
been incurred by the Administrator on behalf of the Trust, would cause the
aggregate amount of Ordinary Expenses of the Trust to exceed the Up-front
Expense Amount, the Administrator shall provide to Merrill Lynch and to each
Contracting Stockholder (i) prompt written notice to the effect that the
aggregate amount of Ordinary Expenses of the Trust will exceed the Up-front
Expense Amount, and (ii) an accounting, in such detail as shall be reasonably
acceptable to Merrill Lynch and the Contracting Stockholders, of all Ordinary
Expenses incurred on behalf of the Trust through the date of the Additional
Expense Notice.
(b) From and after the date of the Additional Expense Notice, the Service
Provider agrees that it will not, without the prior written consent of Merrill
Lynch and each Contracting Stockholder, incur on behalf of the Trust (i) any
single expense in excess of $2,500 or (ii) in any calendar quarter expenses
aggregating in excess of $5,000. Subject to the foregoing, the Service Provider
shall give notice to Merrill Lynch and each Contracting Stockholder in writing
promptly following the incurring of any Additional Expense. Such
2
<PAGE>
notice to Merrill Lynch shall be accompanied by any demand, bill, invoice or
other similar document in respect of such Additional Expense.
(c) Subject to the first sentence of paragraph (b) of this Section 3,
Merrill Lynch agrees to pay to the Service Provider from time to time the amount
of any Additional Expense. Payment by Merrill Lynch of any Additional Expense
shall be made in New York Clearing House (next-day) funds by the later of (i)
five Business Days after the receipt by Merrill Lynch from the Service Provider
of notice of the incurring thereof or (ii) two Business Days prior to the due
date for the payment of such Additional Expense.
(d) The Contracting Stockholders jointly and severally agree to reimburse
Merrill Lynch from time to time for the amount of any Additional Expense paid by
Merrill Lynch pursuant to paragraph (c) of this Section 3. Merrill Lynch shall
be reimbursed for any such Additional Expense in New York Clearing House (next-
day) funds by the later of (i) five Business Days after the receipt by the
Contracting Stockholders from the Service Provider of notice of the incurring
thereof or (ii) two Business Days prior to the due date for the payment of such
Additional Expense.
(e) Merrill Lynch or the Contracting Stockholders may contest in good
faith the reasonableness of any Additional Expense and the parties shall attempt
to resolve amicably the disagreement; provided that if the parties cannot
resolve the dispute by the due date hereunder with respect to such Additional
Expense, subject to the first sentence of paragraph (b) of this Section 3,
Merrill Lynch shall pay the amount of such Additional Expense, and the
Contracting Stockholders shall reimburse Merrill Lynch for the amount so paid,
subject to later adjustment and credit if such dispute is resolved in favor of
Merrill Lynch or the Contracting Stockholders, as the case may be.
4. CONDITION TO PAYMENT. The obligations of the Contracting Stockholders
under Sections 2 and 3 hereof and the obligations of Merrill Lynch under Section
3 hereof shall be subject to the condition that the Structured Yield Product
Exchangeable for Stock/SM/ (the "STRYPES") issued by the Trust shall have been
issued and paid for at the Closing Time.
5. TRUST DISSOLUTION; REFUND OF UNUSED EXPENSE FUNDS. If at the
dissolution of the Trust in accordance with Section 8.3 of the Trust Agreement
the aggregate amount of Ordinary Expenses incurred by the Service Provider on
behalf of the Trust through the date of dissolution shall be less than the Up-
front Expense Amount, the Service Provider shall, promptly following the date of
such dissolution, pay to each Contracting Stockholder in New York Clearing House
(next-day) funds such Contracting Stockholder's pro rata share of the amount of
such excess.
________________________________
(SM) Service mark of Merrill Lynch & Co., Inc.
3
<PAGE>
6. TERMINATION OF ADMINISTRATION AGREEMENT. In the event of the
termination of the Administration Agreement in accordance with Section 4.1
thereof, the Service Provider shall promptly pay to each Contracting Stockholder
in New York Clearing House (next-day) funds such Contracting Stockholder's pro
rata share of (i) the portion of the Service Provider's Up-front Fee Amount
ratable for the period from the date of the termination of the Administration
Agreement to the Exchange Date and (ii) any unexpended portion of the Up-front
Expense Amount.
7. STATEMENTS AND REPORTS. The Service Provider shall collect and
safekeep all demands, bills, invoices or other written communications received
from third parties in connection with any Ordinary Expenses and Additional
Expenses and shall prepare and maintain (or cause to be prepared and maintained)
adequate books and records showing all receipts and disbursements of funds in
connection therewith. Merrill Lynch and each Contracting Stockholder shall have
the right to inspect and to copy, at its expense, all such documents, books and
records at all reasonable times and from time to time during the term of this
Agreement.
8. TERM OF CONTRACT. This Agreement shall continue in effect until the
dissolution of the Trust in accordance with Section 8.3 of the Trust Agreement.
9. NO ASSIGNMENT. No party to this Agreement may assign its rights or
delegate its duties hereunder without the prior written consent of the other
parties.
10. AMENDMENTS. The Service Provider agrees that it will not consent to
any amendment of the Administration Agreement, the Custodian Agreement, the
Paying Agent Agreement or the Collateral Agreement without the prior written
consent of Merrill Lynch and each Contracting Stockholder.
11. ENTIRE AGREEMENT. This Agreement contains the entire agreement among
the parties with respect to the matters contained herein and supersedes all
prior agreements or understandings. No amendment or modification of this
Agreement shall be valid unless the amendment or modification is in writing and
is signed by all the parties to this Agreement.
12. 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 12):
The Service Provider: The Bank of New York
101 Barclay Street
New York, New York 10286
Telecopier: (212) 815-7157
Attention: Betty Cocozza
Merrill Lynch: Merrill Lynch & Co., Inc.
4
<PAGE>
North Tower
New York, New York 10281-1329
Telecopier: (212) 449-3150
Attention: Douglas W. Squires
The Contracting Stockholders: D.M.S. Endowment, LLC
[address]
Telecopier: ( )
Attention:
Sutton Partners, LLC
[address]
Telecopier: ( )
Attention:
A.O. Roberts, LLC
[address]
Telecopier: ( )
Attention:
USN College Marketing, L.P.
[address]
Telecopier: ( )
Attention:
A copy of any communication to Merrill Lynch shall be furnished to Merrill Lynch
& Co., Inc., World Financial Center, North Tower, New York, New York 10281-1334,
telecopier (212) 449-9813, Attention: Associate General Counsel, provided that
the failure to furnish such copy shall not affect the effectiveness of any such
communication. Except as otherwise specifically provided herein, all notices
and other communications provided for hereunder shall be in writing and 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
5
<PAGE>
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 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).
13. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.
14. GOVERNING 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.
15. 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
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their authorized representatives the date first above written.
D.M.S. ENDOWMENT, LLC
By:___________________________
Name:
Title:
SUTTON PARTNERS, LLC
By:___________________________
Name:
Title:
A.O. ROBERTS, LLC
By:___________________________
Name:
Title:
USN COLLEGE MARKETING, L.P.
By:___________________________
Name:
Title:
MERRILL LYNCH & CO., INC.
By:___________________________
Name:
Title:
THE BANK OF NEW YORK
By:___________________________
Name:
Title:
7
<PAGE>
EXHIBIT K(6)
FUND INDEMNITY AGREEMENT
Agreement, dated as of September , 1997, among D.M.S. Endowment, LLC,
Sutton Partners, LLC, A.O. Roberts, LLC and USN College Marketing, L.P. (each, a
"Contracting Stockholder" and, collectively, the "Contracting Stockholders"),
Merrill Lynch & Co., Inc. ("Merrill Lynch") and Snyder STRYPES Trust (such trust
and the trustees thereof acting in their capacity as such being referred to
herein as the "Trust").
WHEREAS, the Trust is a business trust organized 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 September , 1997 (the "Trust Agreement");
and
WHEREAS, the Contracting Stockholders and Merrill Lynch desire to make
provision for the payment of certain indemnification expenses of the Trust;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained in this Agreement, the parties agree as follows:
1. DEFINITIONS. Capitalized terms used herein and not defined herein
shall have the meanings ascribed thereto in the Trust Agreement.
2. AGREEMENT TO PAY EXPENSES. Merrill Lynch agrees to pay to the Trust,
and hold the Trust harmless from, any expenses of the Trust arising under
Sections 2.2(g) and 6.6 of the Administration Agreement, Section 15 of the
Custodian Agreement, Section 5.4(b) of the Paying Agent Agreement and Section
7.6 of the Trust Agreement (collectively, "Indemnification Expenses").
Notwithstanding the foregoing, it is understood that (i) Merrill Lynch shall
not, in respect of the legal expenses of any indemnified party 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) Merrill Lynch shall not be liable for any settlement of
any proceeding effected without the written consent of Merrill Lynch and each
Contracting Stockholder, but if settled with such consent or if there be a final
judgment for the Claimant (as defined herein), Merrill Lynch agrees to indemnify
the Trustees and the Trust from and against any loss or liability by reason of
such settlement or judgment. Payment hereunder by Merrill Lynch shall be made
in New York Clearing House (next-day) funds no later than five Business Days
after the receipt by Merrill Lynch, pursuant to paragraph 4 hereof, of written
notice of any claim for Indemnification Expenses.
<PAGE>
3. AGREEMENT TO REIMBURSE FOR PAYMENTS MADE. The Contracting
Stockholders jointly and severally agree to reimburse Merrill Lynch from time to
time for the amount of any Indemnification Expenses paid by Merrill Lynch
pursuant to paragraph 2 hereof. Merrill Lynch shall be reimbursed for any such
Indemnification Expenses in New York Clearing House (next-day) funds no later
than five Business Days after the receipt by the Contracting Stockholders,
pursuant to paragraph 4 hereof, of written notice of any claim for
Indemnification Expenses.
4. NOTICE OF RECEIPT OF CLAIM. The Trust shall give notice to, or cause
notice to be given to, Merrill Lynch and each Contracting Stockholder in writing
of any claim for Indemnification Expenses or any threatened claim for
Indemnification Expenses immediately upon the Trust acquiring knowledge thereof.
Such written notice to Merrill Lynch shall be accompanied by any demand, bill,
invoice or other communication received from any third party claimant (a
"Claimant") in respect of such Indemnification Expense.
5. STATEMENTS AND REPORTS. The Trust shall collect and safekeep all
demands, bills, invoices or other written communications received from third
parties in connection with any claim for Indemnification Expenses and shall
prepare and maintain adequate books and records showing all receipts and
disbursements of funds in connection therewith. Merrill Lynch and each
Contracting Stockholder shall have the right to inspect and to copy, at its
expense, all such documents, books and records at all reasonable times and from
time to time during the term of this Agreement.
6. TERM OF CONTRACT. This Agreement shall continue in effect until the
dissolution of the Trust in accordance with Section 8.3 of the Trust Agreement.
7. NO ASSIGNMENT. No party to this Agreement may assign its rights or
delegate its duties hereunder without the prior written consent of the other
parties, except that the Trust may delegate any and all duties hereunder to the
Administrator to the extent permitted by law.
8. ENTIRE AGREEMENT. This Agreement contains the entire agreement among
the parties with respect to the matters contained herein and supersedes all
prior agreements or understandings. No amendment or modification of this
Agreement shall be valid unless the amendment or modification is in writing and
is signed by all parties to this Agreement.
9. 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 9):
2
<PAGE>
The Trust: Snyder STRYPES Trust
c/o Puglisi & Associates
850 Library Avenue, Suite 204
Newark, Delaware 19715
Telecopier: (302) 738-7210
Attention: Donald J. Puglisi
Merrill Lynch: Merrill Lynch & Co., Inc.
North Tower
New York, New York 10281-1329
Telecopier: (212) 449-3150
Attention: Douglas W. Squires
The Contracting Stockholders: D.M.S. Endowment, LLC
[address]
Telecopier: ( )
Attention:
Sutton Partners, LLC
[address]
Telecopier: ( )
Attention:
A.O. Roberts, LLC
[address]
Telecopier: ( )
Attention:
USN College Marketing, L.P.
[address]
Telecopier: ( )
Attention:
A copy of any communication to Merrill Lynch shall be furnished to Merrill Lynch
& Co., Inc., World Financial Center, North Tower, New York, New York 10281-1334,
telecopier (212) 449-9813, Attention: Associate General Counsel, provided that
the failure to furnish
3
<PAGE>
such copy shall not affect the effectiveness of any such communication. Except
as otherwise specifically provided herein, all notices and other communications
provided for hereunder shall be in writing and 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 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).
10. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.
11. GOVERNING 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.
12. 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.
4
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their authorized representatives the date first above written.
MERRILL LYNCH & CO., INC.
By______________________________________
Name:
Title:
SNYDER STRYPES TRUST
________________________________________
Donald J. Puglisi, as Managing Trustee
D.M.S. ENDOWMENT, LLC
By______________________________________
Name:
Title:
SUTTON PARTNERS, LLC
By______________________________________
Name:
Title:
A.O. ROBERTS, LLC
By______________________________________
Name:
Title:
USN COLLEGE MARKETING, L.P.
By______________________________________
Name:
Title:
5
<PAGE>
EXHIBIT L
Brown & Wood LLP
One World Trade Center
New York, New York 10048-0557
Telephone: (212) 839-5300
Facsimile: (212) 839-5599
September 16, 1997
Snyder STRYPES Trust
c/o Puglisi & Associates
850 Library Avenue, Suite 204
Newark, Delaware 19711
Ladies and Gentlemen:
We have acted as counsel for Snyder STRYPES Trust, a Delaware business
trust (the "Trust"), in connection with the registration of STRYPES, par value
$0.10 per STRYPES (the "STRYPES"), under the Securities Act of 1933, as amended,
pursuant to a registration statement on Form N-2 to be filed with the Securities
and Exchange Commission on the date hereof (the "Registration Statement").
As counsel for the Trust, we are familiar with the proceedings taken by the
Trust in connection with the authorization, issuance and sale of the STRYPES.
In addition, we have examined and are familiar with the Certificate of Trust of
the Trust, the Amended and Restated Trust Agreement of the Trust and such other
documents as we have deemed relevant to the matters referred to in this opinion.
Based upon the foregoing, we are of the opinion that the STRYPES, upon
issuance and sale in the manner referred to in the Registration Statement for
consideration not less
<PAGE>
than the par value thereof, will be legally issued, fully paid and non-
assessable STRYPES of the Trust.
In rendering this opinion, we have relied as to matters of Delaware law
upon an opinion of Richards, Layton & Finger rendered to the Trust.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name in the Prospectus constituting
a part thereof.
Very truly yours,
/s/ Brown & Wood LLP
<PAGE>
EXHIBIT N(1)
Brown & Wood LLP
One World Trade Center
New York, New York 10048-0557
Telephone: (212) 839-5300
Facsimile: (212) 839-5599
September 16, 1997
Snyder STRYPES Trust
c/o Puglisi & Associates
850 Library Avenue
Suite 204
Newark, Delaware 19715
Re: Registration Statement on Form N-2
Registration Nos. 333-33707 and 811-08337
-----------------------------------------
Ladies and Gentlemen:
We have acted as tax counsel to the Snyder STRYPES Trust (the "Trust") in
connection with the registration of its Structured Yield Product Exchangeable
for Stock (the "STRYPES"). In connection therewith, we have prepared the
discussion set forth under the caption "Certain United States Federal Income Tax
Considerations" (the "Discussion") in the Prospectus (the "Prospectus") that is
part of Amendment No. 2 to the Registration Statement on Form N-2 (Registration
Nos. 333-33707 and 811-08337) filed by the Trust with the Securities and
Exchange Commission on September 16, 1997.
We hereby confirm our opinion as set forth in the Discussion. In rendering
our opinion, we have examined (i) the Amended and Restated Trust Agreement
constituting Snyder STRYPES Trust, (ii) the Contract and (iii) the Security and
Pledge Agreement, each in the form filed as an exhibit to the Registration
Statement, and have assumed that the obligations contemplated thereunder will be
performed in accordance with their terms.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the caption "Certain
United States Federal Income Tax Considerations" in the Prospectus. The issuance
of such consent does not concede that we are an "expert" for the purposes of the
Securities Act of 1933.
Very truly yours,
/s/ Brown & Wood LLP
1
<PAGE>
Exhibit (N)(2)
INDEPENDENT AUDITORS' CONSENT
- -----------------------------
We consent to the inclusion in this Pre-Effective Amendment No. 2 to
Registration Statement Nos. 333-33707 and 811-08337 of Snyder STRYPES Trust (the
"Trust") on Form N-2 of our report dated September 16, 1997 relating to the
audit of the statement of assets, liabilities and capital of the Trust and to
the reference to us under the heading "Experts" in the Prospectus, which is a
part of this Registration Statement.
/s/ DELOITTE & TOUCHE LLP
New York, New York
September 16, 1997
<PAGE>
EXHIBIT P
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT is entered into as of the 10th day of September
1997, between the Snyder STRYPES Trust, a business trust organized 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.)) (such trust and the trustees
thereof acting in their capacity as such being referred to herein as the
"Trust"), and ML IBK Positions, Inc. (the "Purchaser").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. PURCHASE AND SALE OF THE STRYPES
1.1 SALE AND ISSUANCE OF UNITS. Subject to the terms and conditions of
this Agreement, the Trust agrees to sell to the Purchaser, and the Purchaser
agrees to purchase from the Trust, one Structured Yield Product Exchangeable for
Stock/(SM)/, representing an undivided beneficial interest in the Trust (a
"STRYPES"), at a purchase price of $100.
1.2 CLOSING. The purchase and sale of the STRYPES shall take place at the
offices of Brown & Wood llp, One World Trade Center, New York, New York 10048 at
9:00 a.m., New York City time, on September 11, 1997, or at such other time
("Closing Date") and place as the Trust and the Purchaser mutually agree upon.
At or after the Closing, the Trust shall deliver to the Purchaser a certificate
representing the STRYPES purchased by the Purchaser, registered in the name of
the Purchaser or its nominee. Payment for the STRYPES shall be made on the
Closing Date by the Purchaser by bank wire transfer or by delivery of a
certified or official bank check, in either case in immediately available funds,
of an amount equal to the purchase price of the STRYPES purchased by the
Purchaser.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER. The
Purchaser hereby represents and warrants to, and covenants for the benefit of,
the Trust that:
2.1 PURCHASE ENTIRELY FOR OWN ACCOUNT. This Agreement is made by the
Trust with the Purchaser in reliance upon the Purchaser's representation to the
Trust, which by the Purchaser's execution of this Agreement the Purchaser hereby
confirms, that the STRYPES are being acquired for investment for the Purchaser's
own account, and not as a nominee or agent and not with a view to the resale or
distribution by the Purchaser of any of the STRYPES, and that the Purchaser has
no present intention of selling, granting any
_______________________
/(SM)/ Service mark of Merrill Lynch & Co., Inc.
1
<PAGE>
participation in, or otherwise distributing the STRYPES, in either case in
violation of any securities registration requirement under applicable law, but
subject nevertheless, to any requirement of law that the disposition of its
property shall at all times be within its control. By executing this Agreement,
the Purchaser further represents that the Purchaser does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participation to such person or to any third person, with respect to any of the
STRYPES.
2.2 INVESTMENT EXPERIENCE. The Purchaser acknowledges that it can bear
the economic risk of the investment for an indefinite period of time and has
such knowledge and experience in financial and business matters (and
particularly in the business in which the Trust operates) as to be capable of
evaluating the merits and risks of the investment in the STRYPES. The Purchaser
is an "accredited investor" as defined in Rule 501(a) of Regulation D under the
Securities Act of 1933, as amended (the "Securities Act").
2.3 RESTRICTED SECURITIES. The Purchaser understands that the STRYPES are
characterized as "restricted securities" under the United States securities laws
inasmuch as they are being acquired from the Trust in a transaction not
involving a public offering and that under such laws and applicable regulations
such STRYPES may be resold without registration under the Securities Act only in
certain circumstances. In this connection, the Purchaser represents that it
understands the resale limitations imposed by the Securities Act and is
generally familiar with the existing resale limitations imposed by Rule 144.
2.4 FURTHER LIMITATIONS ON DISPOSITION. The Purchaser further agrees not
to make any disposition directly or indirectly of all or any portion of the
STRYPES unless and until:
(a) There is then in effect a registration statement under the
Securities Act covering such proposed disposition and such disposition is
made in accordance with such registration statement; or
(b) The Purchaser shall have furnished the Trust with an opinion of
counsel, reasonably satisfactory to the Trust, that such disposition will
not require registration of such STRYPES under the Securities Act.
Notwithstanding the provisions of subsections (a) and (b) above, no such
registration statement or opinion of counsel shall be necessary for a transfer
by the Purchaser to any affiliate of the Purchaser, if the transferee agrees in
writing to be subject to the terms hereof to the same extent as if it were the
original Purchaser hereunder.
2.5 LEGENDS. It is understood that the certificate evidencing the STRYPES
may bear either or both of the following legends:
2
<PAGE>
(a) "These securities have not been registered under the Securities
Act of 1933, as amended. They may not be sold, offered for sale, pledged or
hypothecated in the absence of a registration statement in effect with
respect to the securities under such Act or an opinion of counsel
reasonably satisfactory to the Trustees of Snyder STRYPES Trust that such
registration is not required."
(b) Any legend required by the laws of any other applicable
jurisdiction.
The Purchaser and the Trust agree that the legend contained in the
paragraph (a) above shall be removed at a holder's request when it is no longer
necessary to ensure compliance with federal securities laws.
2.6 SPLIT OF STRYPES. The Purchaser consents to the split of the
Purchaser's STRYPES. Subsequent to the determination of the public offering
price per STRYPES and related underwriting discount for the STRYPES to be sold
to the Underwriters (as defined in the Amended and Restated Trust Agreement of
the Trust dated as of September 15, 1997, by ML IBK Positions, Inc., as sponsor,
and the trustees named therein) but prior to the sale of the STRYPES to the
Underwriters, the STRYPES purchased hereby shall be split into a greater number
of STRYPES so that immediately following such split the value of each STRYPES
held by the Purchaser will equal the aforesaid public offering price per
STRYPES.
2.7 ENTIRE AGREEMENT. This Agreement contains the entire agreement among
the parties with respect to the matters contained herein and supersedes all
prior agreements or understandings. No amendment or modification of this
Agreement shall be valid unless the amendment or modification is in writing and
is signed by all parties to this Agreement.
2.8 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.
2.9 GOVERNING 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 and to be performed wholly within such state.
3
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
SNYDER STRYPES TRUST
By __________________________________
Donald J. Puglisi, as Managing Trustee
ML IBK POSITIONS, INC.
By ___________________________________
Name: Mark McAndrews
Title: Vice President
4
