EXHIBIT 6
SERIES SUPPLEMENT
CORPORATE BACKED TRUST CERTIFICATES
PRUDENTIAL FINANCIAL NOTE-BACKED SERIES 2003-20 TRUST
between
XXXXXX ABS CORPORATION,
as Depositor,
and
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee,
CORPORATE BACKED TRUST CERTIFICATES
Dated as of December 22, 2003
Table of Contents
Page
Section 1. Incorporation of Standard Terms....................................1
Section 2. Definitions........................................................1
Section 3. Designation of Trust and Certificates..............................8
Section 4. Trust Certificates................................................11
Section 5. Distributions.....................................................11
Section 6. Trustee's Fees....................................................16
Section 7. Optional Exchange; Optional Call..................................16
Section 8. Notices of Events of Default......................................20
Section 9. Miscellaneous.....................................................21
Section 10. Governing Law....................................................24
Section 11. Counterparts.....................................................24
Section 12. Termination of the Trust.........................................24
Section 13. Sale of Underlying Securities; Optional Exchange.................25
Section 14. Amendments.......................................................25
Section 15. Voting of Underlying Securities, Modification of Indenture.......25
Section 16. Additional Depositor Representation..............................26
SCHEDULE I SERIES 2003-20 UNDERLYING SECURITIES SCHEDULE
EXHIBIT A-1 FORM OF TRUST CERTIFICATE CLASS A-1
EXHIBIT A-2 FORM OF TRUST CERTIFICATE CLASS A-2
EXHIBIT B FORM OF WARRANT AGENT AGREEMENT
EXHIBIT C FORM OF INVESTMENT LETTER
i
SERIES SUPPLEMENT
CORPORATE BACKED TRUST CERTIFICATES
PRUDENTIAL FINANCIAL NOTE-BACKED SERIES 2003-20
SERIES SUPPLEMENT, Prudential Financial Note-Backed Series 2003-20
Trust, dated as of December 22, 2003 (the "Series Supplement"), by and between
XXXXXX ABS CORPORATION, as Depositor (the "Depositor"), and U.S. BANK TRUST
NATIONAL ASSOCIATION, as Trustee (the "Trustee").
W I T N E S S E T H:
WHEREAS, the Depositor desires to create the Trust designated herein
(the "Trust") by executing and delivering this Series Supplement, which shall
incorporate the terms of the Standard Terms for Trust Agreements, dated as of
January 16, 2001 (the "Standard Terms" and, together with this Series
Supplement, the "Trust Agreement"), by and between the Depositor and the
Trustee, as modified by this Series Supplement;
WHEREAS, the Depositor desires to deposit into the Trust the
Underlying Securities described on Schedule I attached hereto, the general
terms of which are described in the Prospectus Supplement under the heading
"Description of the Deposited Assets--Underlying Securities";
WHEREAS, in connection with the creation of the Trust and the deposit
therein of the Underlying Securities, it is desired to provide for the issuance
of trust certificates evidencing undivided interests in the Trust and call
warrants related thereto; and
WHEREAS, the Trustee has joined in the execution of the Standard
Terms and this Series Supplement to evidence the acceptance by the Trustee of
the Trust.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants expressed herein, it is hereby agreed by and between the
Depositor and the Trustee as follows:
Section 1. Incorporation of Standard Terms. Except as otherwise
provided herein, all of the provisions of the Standard Terms are hereby
incorporated herein by reference in their entirety, and this Series Supplement
and the Standard Terms shall form a single agreement between the parties. In
the event of any inconsistency between the provisions of this Series Supplement
and the provisions of the Standard Terms, the provisions of this Series
Supplement will control with respect to the Prudential Financial Note-Backed
Series 2003-20 Certificates and the transactions described herein.
Section 2. Definitions.
(a) Except as otherwise specified herein or as the context may otherwise
require, the following terms shall have the respective meanings set forth below
for all purposes under this Series Supplement. (Section 2(b) below sets forth
terms listed in the Standard Terms which are
1
not applicable to this Series.) Capitalized terms used but not defined herein
shall have the meanings assigned to them in the Standard Terms.
"Accredited Investor" shall mean a Person that qualifies as an
"accredited investor" within the meaning of Rule 501(a) under the Securities
Act.
"Available Funds" shall have the meaning specified in the Standard
Terms.
"Business Day" shall mean any day other than (i) Saturday and Sunday
or (ii) a day on which banking institutions in New York City, New York are
authorized or obligated by law or executive order to be closed for business or
(iii) a day that is not a business day for the purposes of the Indenture.
"Calculation Agent" shall mean Xxxxxx ABS Corporation or such an
affiliate thereof as shall be designated by Xxxxxx ABS Corporation.
"Call Date" shall mean any Business Day that any holder of Call
Warrants designates as a Call Date occurring (i) on or after December 22, 2008,
(ii) after the Underlying Securities Issuer announces that it will redeem,
prepay or otherwise make an unscheduled payment on the Underlying Securities,
(iii) after the Trustee notifies the Certificateholders of any proposed sale of
the Underlying Securities pursuant to the provisions of this Series Supplement
or (iv) on any date on which the Underlying Securities Issuer or an affiliate
thereof consummates a tender offer for some or all of the Underlying
Securities.
"Call Notice" shall have the meaning specified in Section 1.1 of the
Warrant Agent Agreement.
"Call Price" shall mean, for each related Call Date, (i) in the case
of the Class A-1 Certificates, the sum of (x) 100% of the outstanding
Certificate Principal Balance of the Class A-1 Certificates being purchased
pursuant to the exercise of the Call Warrants, plus any accrued and unpaid
interest on such amount to, but excluding, the Call Date plus (y) in the event
a holder of a Call Warrant exercises its right to call Class A-1 Certificates
with a settlement date occurring prior to December 22, 2008, an additional
amount, equal to $1.50 per Class A-1 Certificate, and (ii) in the case of the
Class A-2 Certificates, the present value of all amounts that would otherwise
have been payable on the Class A-2 Certificates being purchased pursuant to the
exercise of the Call Warrants for the period from the related Call Date to the
Final Scheduled Distribution Date using a discount rate of 8.00% per annum,
assuming no delinquencies, deferrals, redemptions or prepayments on the
Underlying Securities shall occur after the related Call Date.
"Call Warrants" shall have the meaning specified in Section 3 hereof.
"Called Certificates" shall have the meaning specified in Section 1.1
(b) of the Warrant Agent Agreement.
"Certificate Principal Balance" shall have the meaning specified in
Section 3 hereof.
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"Certificates" shall have the meaning specified in Section 3 hereof.
"Class A-1 Allocation" shall mean the sum of the present values
(discounted at the rate of 6.00% per annum) of (i) any unpaid interest due or
to become due on the Class A-1 Certificates and (ii) the outstanding
Certificate Principal Balance of the Class A-1 Certificates (in each case
assuming that the Class A-1 Certificates were paid when due and were not
redeemed or prepaid prior to their stated maturity).
"Class A-1 Certificates" shall mean the Certificates, in the form
attached hereto as Exhibit A-1, to be issued by the Trust representing a
proportionate undivided beneficial ownership interest in certain distributions
to be made by the Trust and having the characteristics described herein and in
the Certificates.
"Class A-2 Allocation" shall mean the present value (discounted at
the rate of 6.00% per annum) of any unpaid amounts due or to become due on the
Class A-2 Certificates (assuming that the Class A-2 Certificates were paid when
due and were not redeemed or prepaid prior to their stated maturity).
"Class A-2 Certificates" shall mean the Certificates, in the form
attached hereto as Exhibit A-2, to be issued by the Trust representing a
proportionate undivided beneficial ownership interest in certain distributions
to be made by the Trust and having the characteristics described herein and in
the Certificates.
"Closing Date" shall mean December 22, 2003.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collection Period" shall mean, (i) with respect to each July
Distribution Date, the period beginning on the day after the January
Distribution Date of such year and ending on such July Distribution Date,
inclusive and (ii) with respect to each January Distribution Date, the period
beginning on the day after the July Distribution Date of the prior year and
ending on such January Distribution Date, inclusive; provided, however, that
clauses (i) and (ii) shall be subject to Section 9(f) hereof.
"Corporate Trust Office" shall mean the office of U.S. Bank Trust
National Association located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
"Currency" shall mean United States Dollars.
"Depository" shall mean The Depository Trust Company, its nominees
and their respective successors.
"Distribution Date" shall mean January 15th and July 15th of each
year (or if such date is not a Business Day, the next succeeding Business Day),
commencing on January 15, 2004, and ending on the earlier of the Final
Scheduled Distribution Date and any date on which all Underlying Securities are
redeemed, prepaid or liquidated in whole for any reason other than at their
maturity.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Event of Default" shall mean (i) a default in the payment of any
interest on the Underlying Securities after the same becomes due and payable
(subject to any applicable grace period), (ii) a default in the payment of the
principal of or any installment of principal of the Underlying Securities when
the same becomes due and payable and (iii) any other event specified as an
"Event of Default" in the Indenture.
"Exchange Act" shall mean the Securities and Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Final Scheduled Distribution Date" shall mean the Distribution Date
in July 2033.
"Indenture" shall mean the indenture among the Underlying Securities
Issuer and the Underlying Securities Trustee, as supplemented, pursuant to
which the Underlying Securities were issued.
"Liquidation Price" shall mean the price at which the Trustee sells
the Underlying Securities.
"Maturity Date" shall have the meaning specified in Schedule I
hereto.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Optional Call" shall mean the call of the Certificates by the
Warrant Holder, in whole or in part, resulting from the exercise of Call
Warrants by the Warrant Holder, pursuant to Section 7(d) hereof.
"Optional Exchange" shall mean the exchange of the Certificates by
the Trust for the Underlying Securities pursuant to Section 7(a) and 7(b)
hereof.
"Optional Exchange Date" shall mean any date on which Underlying
Securities subject to Optional Exchange are distributed to a Certificateholder.
"Ordinary Expenses" shall mean the Trustee's ordinary expenses and
overhead in connection with its services as Trustee, including the items
referred to in the definition of Ordinary Expenses in the Standard Terms.
"Plan" means (a) an employee benefit plan (as defined in Section 3(3)
of ERISA), (b) a plan described in Section 4975(e)(1) of the Code or (c) any
entity whose underlying assets are treated as assets of any such plan by reason
of such plan's investment in the entity.
"Prepaid Ordinary Expenses" shall be zero for this Series.
"Prospectus Supplement" shall mean the Prospectus Supplement, dated
December 11, 2003, relating to the Class A-1 Certificates.
4
"QIB" shall have the meaning set forth in Section 3(e) hereof.
"Rating Agencies" shall mean Moody's and S&P.
"Record Date" shall mean, with respect to each Distribution Date, the
day immediately preceding the related Distribution Date.
"Required Percentage--Amendment" shall be 66-2/3% of the aggregate
Voting Rights, unless the subject amendment requires the vote of holders of
only one class of Certificates pursuant to the Standard Terms, in which case
66-2/3% of the Voting Rights of such Class.
"Required Percentage--Direction of Trustee" shall be 66-2/3% of the
aggregate Voting Rights.
"Required Percentage--Remedies" shall be 66-2/3% of the aggregate
Voting Rights.
"Required Percentage--Removal" shall be 66-2/3% of the aggregate
Voting Rights.
"Required Rating" shall mean, in the case of Moody's, the rating
assigned to the Underlying Securities by Moody's as of the Closing Date, and,
in the case of S&P, the rating assigned to the Underlying Securities by S&P as
of the Closing Date.
"Resale Restriction Termination Date" shall have the meaning set
forth in Section 3(e) hereof.
"Rule 144A" shall have the meaning set forth in Section 3(e) hereof.
"S&P" shall mean Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc. "SEC Reporting Failure" shall mean the date
determined by the Depositor within a reasonable time following the Underlying
Securities Issuer either (x) having stated in writing that it intends
permanently to cease filing periodic reports required under the Exchange Act or
(y) having failed to file all required periodic reports for one full year.
"Securities Act" shall mean the United States Securities Act of 1933,
as amended.
"Securities Intermediary" shall mean initially, U.S. Bank Trust
National Association.
"Series" shall mean the Prudential Financial Note-Backed Series
2003-20.
"Special Distribution Date" shall have the meaning specified in
Section 5 hereof.
"Trustee Fee" shall mean the amount paid to the Trustee by the
Depositor on the Closing Date.
5
"Trust Property" shall mean the Underlying Securities described on
Schedule I hereto, the Certificate Account and any additional Underlying
Securities sold to the Trust pursuant to Section 3(d) hereof.
"UCC" shall mean the Uniform Commercial Code as in effect in the
applicable jurisdiction.
"Underlying Securities" shall mean $37,000,000 aggregate principal
amount of 5.75% Medium-Term Notes due July 15, 2033, issued by the Underlying
Securities Issuer, as set forth in Schedule I attached hereto (subject to
Section 3(d) hereof).
"Underlying Securities Issuer" shall mean Prudential Financial, Inc.
"Underlying Securities Trustee" shall mean JPMorgan Chase Bank.
"Underwriters" shall mean Xxxxxx Brothers Inc., Banc of America
Securities LLC and RBC Xxxx Xxxxxxxx Inc.
"Voting Rights" shall, in the entirety, be allocated among all Class
A-1 Certificateholders and Class A-2 Certificateholders in proportion to the
then outstanding Certificate Principal Balances of their respective
Certificates.
"Warrant Agent" shall mean initially, U.S. Bank Trust National
Association.
"Warrant Agent Agreement" shall mean that certain Warrant Agent
Agreement, dated as of the date hereof, between the Depositor and U.S. Bank
Trust National Association, as Warrant Agent and as Trustee, as the same may be
amended from time to time.
"Warrant Holder" shall mean the holder of a Call Warrant.
(b) The terms listed below are not applicable to this Series.
"Accounting Date"
"Administrative Fees"
"Advance"
"Allowable Expense Amounts"
"Basic Documents"
"Call Premium Percentage"
"Credit Support"
"Credit Support Instrument"
"Credit Support Provider"
6
"Cut-off Date"
"Eligible Expense"
"Eligible Investments"
"Exchange Rate Agent"
"Fixed Pass-Through Rate"
"Floating Pass-Through Rate"
"Guaranteed Investment Contract"
"Letter of Credit"
"Limited Guarantor"
"Limited Guaranty"
"Minimum Wire Denomination"
"Notional Amount"
"Pass-Through Rate"
"Place of Distribution"
"Purchase Price"
"Required Premium"
"Required Principal"
"Requisite Reserve Amount"
"Retained Interest"
"Sale Procedures"
"Sub-Administration Account"
"Sub-Administration Agreement"
"Sub-Administration Agent"
"Surety Bond"
"Swap Agreement"
7
"Swap Counterparty"
"Swap Distribution Amount"
"Swap Guarantee"
"Swap Guarantor"
"Swap Receipt Amount"
"Swap Termination Payment"
Section 3. Designation of Trust and Certificates. The Trust created hereby
shall be known as the "Corporate Backed Trust Certificates, Prudential
Financial Note-Backed Series 2003-20 Trust." The Certificates evidencing
certain undivided ownership interests therein shall be known as "Corporate
Backed Trust Certificates, Prudential Financial Note-Backed Series 2003-20."
The Certificates shall consist of the Class A-1 Certificates and the Class A-2
Certificates (together, the "Certificates"). The Trust is also issuing call
warrants with respect to the Certificates ("Call Warrants").
(a) The Class A-1 Certificates shall be held through the Depository in
book-entry form and shall be substantially in the form attached hereto as
Exhibit A-1. The Class A-2 Certificates shall initially be held through the
Depository in book-entry form and, as set forth in Section 3(e) below, shall be
held subsequent to the Closing Date in physical form or through the Depository
in book-entry form and shall be substantially in the form attached hereto as
Exhibit A-2. The Class A-1 Certificates shall be issued in denominations of
$25. The Class A-2 Certificates shall be issued in minimum denominations of
$100,000 and in integral multiples of $1 in excess thereof; provided, however,
that on any Call Date on which a Warrant Holder shall concurrently exchange
Called Certificates for a distribution of Underlying Securities in accordance
with the provisions of Section 7 hereof, Called Certificates may be issued in
other denominations. Except as provided in the Standard Terms and in paragraph
(d) in this Section, the Trust shall not issue additional Certificates or
additional Call Warrants or incur any indebtedness.
(b) The Class A-1 Certificates shall consist initially of 1,418,333
Certificates having an initial aggregate certificate principal balance (the
"Certificate Principal Balance") of $37,000,000. The Class A-2 Certificates,
which are principal-only Certificates, have an initial aggregate Certificate
Principal Balance of $1,541,675.
(c) The holders of the Class A-1 Certificates will be entitled to receive
on each Distribution Date the interest, if any, received on the Underlying
Securities, to the extent necessary to pay interest at a rate of 6.00% per
annum on the outstanding Certificate Principal Balance of the Class A-1
Certificates. The holders of the Class A-2 Certificates will not be entitled to
receive distributions of interest. On the Distribution Date occurring in
January 2004, the Trustee shall cause the Trust to pay to the Depositor the
amount of interest accrued and paid on the Underlying Securities from July 15,
2003, to but not including the Closing Date; provided, however, that in the
event an Optional Exchange shall occur prior to the Distribution Date in
January 2004, a pro rata portion of such amount shall be paid to the Depositor
on the Optional
8
Exchange Date in accordance with the provisions of Section 7(b)(ix) hereof. If
the Depositor is not paid any such amount on such date, it shall have a claim
for such amount. If Available Funds are insufficient to pay such amount, the
Trustee will pay the Depositor its pro rata share, based on the ratio the
amount owed to the Depositor bears to all amounts owed on the Certificates in
respect of accrued interest, of any proceeds from the recovery on the
Underlying Securities.
(d) The Depositor may sell to the Trustee additional Underlying Securities
on any date hereafter upon at least three Business Days' notice to the Trustee
(or such shorter period as shall be mutually satisfactory to the Depositor and
the Trustee) and upon (i) satisfaction of the Rating Agency Condition and (ii)
delivery of an Opinion of Counsel to the effect that the sale of such
additional Underlying Securities will not cause the Trust to be taxed as an
association or publicly traded partnership taxable as a corporation for federal
income tax purposes. Each condition to be satisfied with respect to a sale of
Underlying Securities on or prior to the Closing Date shall be satisfied with
respect to a sale of additional Underlying Securities no later than the date of
sale thereof, each representation and warranty set forth in the Standard Terms
to be made on the Closing Date shall be made on such date of sale, and from and
after such date of sale, all Underlying Securities held by the Trustee shall be
held on the same terms and conditions. Upon such sale to the Trustee, the
Trustee shall deposit such additional Underlying Securities in the Certificate
Account, and shall authenticate and deliver to the Depositor, on its order, (x)
Class A-1 Certificates and Class A-2 Certificates in the same proportion to the
additional Underlying Securities and to each other as exists with respect to
the original Class A-1 Certificates and Class A-2 Certificates, and (y) Call
Warrants related to such additional Class A-1 Certificates and Class A-2
Certificates as described herein. Any such additional Class A-1 Certificates
and Class A-2 Certificates authenticated and delivered shall have the same
terms and rank pari passu with the corresponding classes of Certificates
previously issued in accordance with this Series Supplement.
(e) No Class A-2 Certificate may be offered, resold, assigned or otherwise
transferred (including by pledge or hypothecation) at any time prior to (x) the
date which is two years or such shorter period of time as permitted by Rule
144(k) under the Securities Act, after the later of the original issue date of
such Class A-2 Certificates and the last date on which the Depositor or any
"affiliate" (as defined in Rule 144 under the Securities Act) of the Depositor
was the owner of such Class A-2 Certificates (or any predecessor thereto), or
(y) such later date, if any, as may be required by a change in applicable
securities laws (the "Resale Restriction Termination Date") unless such offer,
resale, assignment or transfer is (i) to the Trust, (ii) pursuant to an
effective registration statement under the Securities Act, (iii) to a qualified
institutional buyer (a "QIB"), as such term is defined in Rule 144A promulgated
under the Securities Act ("Rule 144A"), in accordance with Rule 144A or (iv)
pursuant to another available exemption from registration provided under the
Securities Act (including transfers to Accredited Investors), and, in each of
cases (i) through (iv), in accordance with any applicable securities laws of
any state of the United States and other jurisdictions. Prior to any offer,
resale, assignment or transfer of any Class A-2 Certificates in the manner
described in clause (iii) above, the prospective transferee and the prospective
transferor shall be required to deliver to the Trustee an executed copy of an
Investment Letter with respect to the Class A-2 Certificates to be transferred
substantially in the form of Exhibit C hereto and in the event the resale,
assignment or transfer shall involve Class A-2 Certificates then being held in
physical form, such Class A-2
9
Certificates shall be delivered to the Trustee for cancellation and the Trustee
shall instruct the Depository to increase the aggregate principal amount of the
Class A-2 Certificates held in book-entry form by an amount equal to the
aggregate principal amount of the Class A-2 Certificates so resold, assigned or
transferred and to issue a beneficial interest in such global Class A-2
Certificates to such transferee. Prior to any offer, resale, assignment or
transfer of any Class A-2 Certificates in the manner described in clause (iv)
above, the prospective transferee and the prospective transferor shall be
required to deliver to the Trustee documentation certifying that the offer,
resale, assignment or transfer complies with the provisions of said clause (iv)
and, in the event any such Class A-2 Certificate shall then be held in book
entry form and such resale, assignment or transfer shall be to an Accredited
Investor that is not a QIB, the Trustee shall instruct the Depository to
decrease the aggregate principal amount of the Class A-2 Certificates held in
book entry form and the Trustee shall authenticate and deliver one or more
Class A-2 Certificates in physical form in an aggregate principal amount equal
to the amount of Class A-2 Certificates resold, assigned or transferred. In
addition to the foregoing, each prospective transferee of any Class A-2
Certificates in the manner contemplated by clause (iii) above shall
acknowledge, represent and agree as follows:
(1) The transferee (x) is a QIB, (y) is aware that the sale to it is
being made in reliance on Rule 144A and (z) is acquiring such Class
A-2 Certificates for its own account or for the account of a QIB.
(2) The transferee understands that the Class A-2 Certificates are being
offered in a transaction not involving any public offering in the
United States within the meaning of the Securities Act, and that the
Class A-2 Certificates have not been and will not be registered under
the Securities Act.
(3) The transferee agrees that (A) if in the future it decides to offer,
resell, pledge or otherwise transfer the Class A-2 Certificates prior
to the Resale Restriction Termination Date, such Class A-2
Certificates shall only be offered, resold, assigned or otherwise
transferred (i) to the Trust, (ii) pursuant to an effective
registration statement under the Securities Act, (iii) to a QIB, in
accordance with Rule 144A or (iv) pursuant to another available
exemption from registration provided under the Securities Act
(including any transfer to an Accredited Investor), and, in each of
cases (i) through (iv), in accordance with any applicable securities
laws of any state of the United States and other jurisdictions and
(B) the transferee will, and each subsequent holder is required to,
notify any subsequent purchaser of such Class A-2 Certificates from
it of the resale restrictions referred to in clause (A) above.
(f) The Class A-2 Certificates will, unless otherwise agreed by the
Depositor and the Trustee, bear a legend substantially to the following effect:
"THIS CLASS A-2 CERTIFICATE (OR ITS PREDECESSOR) HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE
DISPOSED OF EXCEPT WHILE A REGISTRATION UNDER SUCH ACT IS
10
IN EFFECT OR PURSUANT TO AN EXEMPTION THEREFROM UNDER SUCH
ACT. THE CLASS A-2 CERTIFICATE REPRESENTED HEREBY MAY BE
TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF THE
SERIES SUPPLEMENT.
EACH PURCHASER OF THIS CLASS A-2 CERTIFICATE IS HEREBY
NOTIFIED THAT THE SELLER OF THIS CLASS A-2 CERTIFICATE MAY
BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION
5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER."
Section 4. Trust Certificates. The Trustee hereby acknowledges receipt, on
or prior to the Closing Date, of:
(a) the Underlying Securities set forth on Schedule I hereto; and
(b) all documents required to be delivered to the Trustee pursuant to
Section 2.01 of the Standard Terms.
Section 5. Distributions.
(a) Except as otherwise provided in Sections 3(c), 5(b), 5(c), 5(f) and
5(g) on each applicable Distribution Date (or such later date as specified in
Section 9(f)), the Trustee shall apply Available Funds in the Certificate
Account as follows:
(i) The Trustee will pay the interest portion of Available Funds:
(1) first, to the Trustee, as reimbursement for any
Extraordinary Trust Expenses incurred by the Trustee in accordance
with Section 6(b) below and approved by 100% of the
Certificateholders; and
(2) second, to the holders of the Class A-1 Certificates, as
interest at the rate of 6.00% per annum on the outstanding
Certificate Principal Balance of the Class A-1 Certificates.
The Class A-2 Certificates are not entitled to distributions of
interest.
(ii) the Trustee will pay the principal portion of Available Funds:
(1) first, to the Trustee, as reimbursement for any remaining
Extraordinary Trust Expenses incurred by the Trustee in accordance
with Section 6(b) below and approved by 100% of the
Certificateholders; and
(2) second, to the holders of the Class A-1 Certificates and the
Class A-2 Certificates, the remaining available principal portion of
Available Funds (in an aggregate amount not to exceed the outstanding
Certificate Principal Balance
11
of the Class A-1 Certificates and Class A-2 Certificates) pro rata in
proportion to their outstanding Certificate Principal Balances.
(iii) any Available Funds remaining in the Certificate Account
after the payments set forth in clauses 5(a)(i) and 5(a)(ii) above
shall be paid to the Trustee as reasonable compensation for services
rendered to the Depositor, up to $1,000.
(iv) the Trustee will pay any Available Funds remaining in the
Certificate Account after the distributions in clauses 5(a)(i)
through 5(a)(iii) above to the holders of the Class A-1 Certificates
and Class A-2 Certificates pro rata in proportion to their original
Certificate Principal Balances.
Any funds received in respect of the Underlying Securities from the Underlying
Securities Guarantor shall be included in Available Funds on the related
Distribution Date or Special Distribution Date. Any portion of the Available
Funds (i) that does not constitute principal of, or interest on, the Underlying
Securities, (ii) that is not received in connection with a tender offer,
redemption, prepayment or liquidation of the Underlying Securities and (iii)
for which allocation by the Trustee is not otherwise contemplated by this
Series Supplement, shall be remitted by the Trustee to the Depositor.
(b) Notwithstanding the foregoing, if the Underlying Securities are
redeemed, prepaid or liquidated in whole or in part for any reason other than
due to a SEC Reporting Failure, or their Final Scheduled Distribution Date, the
Trustee shall apply Available Funds in the manner described in Section 5(f) in
the following order of priority:
(i) first, to the Trustee, as reimbursement for any
Extraordinary Trust Expenses incurred by the Trustee in accordance
with Section 6(b) below and approved by 100% of the
Certificateholders;
(ii) second, to the holders of the Class A-1 Certificates, an
amount equal to any accrued and unpaid interest thereon;
(iii) third, to the holders of the Class A-1 Certificates and
Class A-2 Certificates, pro rata in proportion to their outstanding
Certificate Principal Balances;
(iv) fourth, to the Trustee, as reasonable compensation for
services rendered to the Depositor, any remainder up to $1,000; and
(v) fifth, to the holders of the Class A-1 Certificates and
Class A-2 Certificates, any amount remaining after the distributions
in clauses 5(b)(i) through 5(b)(iv) above, pro rata in proportion to
their original Certificate Principal Balances.
(c) Unless otherwise instructed by holders of Certificates representing a
majority of the Voting Rights, thirty (30) days after giving notice pursuant to
Section 8 hereof, the Trustee shall sell the Underlying Securities pursuant to
Section 13 hereof and deposit the Liquidation Proceeds, if any, into the
Certificate Account for distribution not later than two (2) Business Days after
the receipt of immediately available funds in accordance with Section 5(b)
hereof, provided, however, that if any Warrant Holder designates any day on or
prior to the proposed
12
sale date as a Call Date and Optional Exchange Date pursuant to Section 7, the
portion of Underlying Securities related to such Optional Exchange shall not be
sold but shall be distributed to the Warrant Holder pursuant to Section 7 and
the Warrant Agent Agreement.
(d) If the Trustee receives non-cash property in respect of the Underlying
Securities as a result of a payment default on the Underlying Securities
(including from the sale thereof), the Trustee will promptly give notice to the
Depository, or for any Certificates which are not then held by DTC or any other
depository, directly to the registered holders of the Certificates then
outstanding and unpaid and to the Warrant Agent. Such notice shall state that
the Trustee shall, and the Trustee shall, not later than 30 days after the
receipt of such property, allocate and distribute such property to the holders
of Class A-1 Certificates and Class A-2 Certificates then outstanding and
unpaid, pro rata by outstanding Certificate Principal Balance (after deducting
the costs incurred in connection therewith) in accordance with Section 5(b)
hereof. Property other than cash will be liquidated by the Trustee, and the
proceeds thereof distributed in cash, only to the extent necessary to avoid
distribution of fractional securities to Certificateholders. In-kind
distribution of such property to Certificateholders, based on the market value
of such property as of the date of distribution to Certificateholders, will be
deemed to reduce the Certificate Principal Balance of Certificates on a
dollar-for-dollar basis.
(e) Subject to Section 9(f) hereof, to the extent Available Funds are
insufficient to make scheduled interest or principal payments on any class of
Certificates on any Distribution Date, any shortfall will be carried over and
will be distributed on the next Distribution Date (or date referred to in
Section 5(f) hereof) on which sufficient funds are available to pay such
shortfall.
(f) If a payment with respect to the Underlying Securities is made to the
Trustee (i) after the payment date of the Underlying Securities on which such
payment was due or (ii) in connection with redemption, prepayment or
liquidation, in whole or in part, of the Underlying Securities for any reason
other than due to the occurrence of an SEC Reporting Failure or at their
maturity, then the Trustee will distribute any such amounts received in
accordance with the provisions of this Section 5 on the next occurring Business
Day (a "Special Distribution Date") as if the funds had constituted Available
Funds on the Distribution Date immediately preceding such Special Distribution
Date; provided, however, that the Record Date for such Special Distribution
Date shall be one Business Day prior to the day on which the related payment
was received with respect to the Underlying Securities.
(g) Notwithstanding Section 3.12 of the Standard Terms, upon the
occurrence of an SEC Reporting Failure, the Depositor shall instruct the
Trustee within a reasonable time to (i) notify the Warrant Agent that the
Underlying Securities are proposed to be sold and that any Call Warrants and
related Optional Exchange rights must be exercised no later than the date
specified in the notice (which shall be not less than 10 Business Days after
the date of such notice) and (ii) to the extent that the Warrant Holders fail
to exercise their Call Warrants and related Optional Exchange rights on or
prior to such date, to sell the Underlying Securities and distribute the
proceeds of such sale to the Certificateholders in accordance with the
following order of priority: first, to the Trustee, as reimbursement for any
Extraordinary Trust Expenses incurred by the Trustee in accordance with Section
6(b) below and approved by 100% of the Certificateholders; and second, any
remainder to the holders of the Class A-1 Certificates and the Class A-2
13
Certificates pro rata in proportion to the ratio of the Class A-1 Allocation to
the Class A-2 Allocation, as determined by the Calculation Agent.
(h) (i) If the Trustee receives notice of a tender offer for some or all
of the Underlying Securities, the Trustee shall, within one Business Day,
notify the Warrant Agent and forward to the Warrant Agent copies of all
materials received by the Trustee in connection therewith. Upon the
commencement of a tender offer from the Underlying Securities Issuer or an
affiliate thereof and if the Trustee receives a Call Notice from any Warrant
Holder no later than five Business Days prior to the expiration of the tender
offer acceptance period that such Warrant Holder desires to exercise all or a
portion of its Call Warrants in connection with the consummation of any such
tender offer, then the Trustee shall tender, in compliance with the tender
offer requirements, an amount of Underlying Securities equal to the amount of
Underlying Securities that would be distributable to the Warrant Holder with
respect to an Optional Exchange of the Called Certificates called by such
Warrant Holder; provided that any Optional Call or Optional Exchange undertaken
in connection with any such tender offer shall be subject to the provisions of
Section 7 hereof.
(ii) The Call Date and Optional Exchange Date for any exercise of
Call Warrants in connection with a tender offer shall be deemed to be the
Business Day on which such Underlying Securities are accepted for payment
and paid for.
(iii) The Call Price shall be deducted from the tender offer proceeds
and paid to the holders of the Class A-1 Certificates and Class A-2
Certificates pro rata in accordance with the provisions of Section
7(d)(v), and the excess of the tender offer proceeds over the Call Price
shall be paid to the exercising Warrant Holders pro rata in respect to
their proportionate exercises of Call Warrants or, if the Call Price
exceeds the tender offer proceeds the amount of such excess shall be paid
by the exercising Warrant Holders pro rata in respect to their
proportionate exercises of Call Warrants.
(iv) If fewer than all tendered Underlying Securities are accepted
for payment and paid for, (A) the amount of Call Warrants exercised shall
be reduced to an amount that corresponds to a number of Class A-1 and
Class A-2 Certificates that could be exchanged in an Optional Exchange for
the Underlying Securities accepted for payment and paid for (without
regard to any restrictions on the amount to be exchanged, so long as such
restrictions would have been satisfied had all tendered Underlying
Securities been accepted for payment and paid for); (B) each Warrant
Holder's exercise shall be reduced by its share (proportionate to the
amount specified in its exercise notice) of the amount of Underlying
Securities not accepted for payment and paid for; (C) the Call Price shall
be determined after giving effect to the reduction specified in clause
(B); (D) the Call Warrants that relate to the reduction specified in
clause (B) shall remain outstanding; and (E) the excess of the tender
offer proceeds over the Call Price shall be allocated in proportion to the
amount of Call Warrants deemed exercised as set forth in clause (A) above
or, if the Call Price exceeds the tender offer proceeds the amount of such
excess shall be paid by the exercising Warrant Holders pro rata in respect
to their proportionate exercises of Call Warrants.
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(v) If the tender offer is terminated by the Underlying Securities
Issuer or any other tender offeror without consummation thereof or if all
tenders by the Trust of Underlying Securities are otherwise rejected, then
(1) the Call Notices will be of no further force and effect, and (2) any
Call Warrants relating to such Call Notices will not be exercised and will
remain outstanding.
(i) (i) Within five Business Days (or such longer period as shall be
acceptable to the Trustee) of receipt of notice of an SEC Reporting Failure,
any Class A-1 Certificateholder or Class A-2 Certificateholder may direct the
Trustee to distribute all or a portion of such Certificateholder's pro rata
share of the Underlying Securities to it, in lieu of any proceeds received upon
liquidation of the Underlying Securities. The respective pro rata shares of the
Class A-1 and Class A-2 Certificateholders in the Underlying Securities shall
be determined by allocating the portion of the principal amount remaining after
reimbursement of the Trustee for any Extraordinary Trust Expenses approved by
100% of the Certificateholders to the Class A-1 Certificateholders and the
Class A-2 Certificateholders in accordance with the ratio of the Class A-1
Allocation to the Class A-2 Allocation. The pro rata share of each of the
Certificateholders in the Underlying Securities to be distributed shall be
determined based on the then unpaid Certificate Principal Balances of their
Certificates.
(ii) Within five Business Days (or such longer period as shall be
acceptable to the Trustee) of receipt of notice of an Event of Default or
any other liquidation of the Underlying Securities by the Trustee, any
Class A-2 Certificateholder may direct the Trustee to distribute all or a
portion of such Class A-2 Certificateholder's pro rata share (as
determined by the Calculation Agent in accordance with this Section 5(i))
of the Underlying Securities to it, in lieu of any proceeds received upon
liquidation of the Underlying Securities. Upon the occurrence of an Event
of Default, each Class A-2 Certificateholder's pro rata share of the
Underlying Securities shall be determined by allocating the principal
amount of the Underlying Securities to the Class A-1 Certificateholders
and the Class A-2 Certificateholders on a pro rata basis in proportion to
their outstanding Certificate Principal Balances. In the event of a
liquidation of the Underlying Securities by the Trustee for any reason
other than upon the occurrence of an Event of Default or an SEC Reporting
Failure, each Class A-2 Certificateholder's pro rata share of the
Underlying Securities shall be equal to a pro rata share (based on the
proportion of the aggregate Certificate Principal Balance of such holder's
Class A-2 Certificates to the outstanding aggregate Certificate Principal
Balance of the Class A-2 Certificates) of the principal amount of
Underlying Securities remaining after the Trustee has allocated Available
Funds in accordance with Sections 5(b)(i) and 5(b)(ii) hereof.
(iii) The amount requested to be distributed pursuant to Section
5(i)(i) or 5(i)(ii) must be in an even multiple of the minimum
denomination of the Underlying Securities and may not exceed such
requesting Certificateholder's pro rata share (as determined by the
Calculation Agent in accordance with this Section 5(i)) of the Underlying
Securities. Upon receipt of any such direction from a Class A-1
Certificateholder or Class A-2 Certificateholder, the Trustee shall not
liquidate the requested portion of Underlying Securities and instead shall
cause such Underlying Securities to be distributed to the requesting Class
A-1 Certificateholder or Class A-2 Certificateholder; provided, that the
Trustee shall not cause the distribution of any
15
Underlying Securities to any Class A-1 Certificateholder or Class A-2
Certificateholder unless, but for the requesting Class A-1
Certificateholder or Class A-2 Certificateholder's giving direction in
accordance with this Section 5(i), such Underlying Securities would be
liquidated as otherwise provided in this Agreement. Any portion of any
Class A-1 Certificateholder's or Class A-2 Certificateholder's pro rata
share of the Underlying Securities that is not distributed, based on the
failure to meet the minimum denomination requirements or otherwise, shall
be sold in accordance with the provisions of Section 5(c) or 5(g) hereof,
as applicable and the proceeds thereof distributed to such Class A-1
Certificateholder or Class A-2 Certificateholder.
(iv) All decisions and determinations of the Calculation Agent
pursuant to this Section 5(i) shall be in its sole discretion and shall,
in the absence of manifest error, be conclusive for all purposes and
irrevocably binding upon the Certificateholders.
Section 6. Trustee's Fees.
(a) As compensation for its services hereunder, the Trustee shall be
entitled to the Trustee Fee and any amounts payable under clauses 5(a)(iii) and
(5)(b)(iv) above. The Trustee Fee shall be paid by the Depositor and not from
Trust Property. The Trustee shall bear all Ordinary Expenses. Failure by the
Depositor to pay such amount shall not entitle the Trustee to any payment or
reimbursement from the Trust, nor shall such failure release the Trustee from
the duties it is required to perform under the Trust Agreement.
(b) Extraordinary Expenses shall not be paid out of the Trust Property
unless all the holders of the Class A-1 Certificates and Class A-2 Certificates
then outstanding have directed the Trustee to incur such Extraordinary
Expenses. The Trustee may incur other Extraordinary Expenses if any lesser
percentage of the Certificateholders requesting such action pursuant hereto
reimburse the Trustee for the cost thereof from their own funds in advance. If
Extraordinary Expenses are not approved unanimously as set forth in the first
sentence of this Section 6(b), such Extraordinary Expenses shall not be an
obligation of the Trust, and the Trustee shall not file any claim against the
Trust therefor notwithstanding failure of Certificateholders to reimburse the
Trustee.
Section 7. Optional Exchange; Optional Call.
(a) On (A) any Distribution Date, (B) any date on which the Underlying
Securities Issuer or an affiliate thereof consummates a tender offer for some
or all of the Underlying Securities or (C) any date on which the Underlying
Securities are to be redeemed by the Underlying Securities Issuer, any holder
of Class A-1 Certificates, Class A-2 Certificates and the related Call
Warrants, if Call Warrants related to such Certificates are outstanding, may
exchange such Certificates and, if applicable, Call Warrants, for a
distribution of Underlying Securities representing the same percentage of the
Underlying Securities as such Certificates represent of all outstanding
Certificates. On any Call Date, any Warrant Holder may exchange Called
Certificates for a distribution of Underlying Securities representing the same
percentage of Underlying Securities as such Called Certificates represent of
all outstanding Certificates; provided that any such exchange shall either (x)
result from an exercise of all Call Warrants owned by such Warrant Holder or
(y) occur on a Call Date on which such Warrant Holder, alone
16
or together with one or more other Warrant Holders, shall exchange Called
Certificates relating to Underlying Securities having an aggregate principal
amount equal to or in excess of the product of (i) 0.1 and (ii) the aggregate
principal amount of the Underlying Securities deposited into the Trust on the
Closing Date.
(b) The following conditions shall apply to any Optional Exchange.
(i) A notice specifying the number of Certificates being surrendered
and the Optional Exchange Date shall be delivered to the Trustee no less
than 5 days (or such shorter period acceptable to the Trustee) but not
more than 30 days before the Optional Exchange Date; provided that for an
Optional Exchange to occur on a Call Date, unless otherwise specified
therein, the Call Notice shall be deemed to be the notice required
hereunder.
(ii) Certificates and, if applicable, the Call Warrants, shall be
surrendered to the Trustee no later than 10:00 a.m. (New York City time)
on the Optional Exchange Date; provided that for an Optional Exchange to
occur on a Call Date, payment of the Call Price to the Warrant Agent
pursuant to Section 1.1(a)(iii) of the Warrant Agent Agreement shall
satisfy the requirement to surrender Certificates.
(iii) Class A-1 Certificates and Class A-2 Certificates representing
a like percentage (or, subject to clause (viii) below, as close as
practicable thereto) of all outstanding Class A-1 Certificates and Class
A-2 Certificates shall be surrendered.
(iv) The Trustee shall have received an opinion of counsel stating
that the Optional Exchange would not cause the Trust to be treated as an
association or publicly traded partnership taxable as a corporation for
federal income tax purposes.
(v) If the Certificateholder is the Depositor or any Affiliate of the
Depositor, (1) the Trustee shall have received a certification from the
Certificateholder that any Certificates being surrendered have been held
for at least six months, and (2) the Certificates being surrendered may
represent no more than 5% (or 25% in the case of Certificates acquired by
the Underwriters but never distributed to investors) of the then
outstanding Certificates.
(vi) The Trustee shall not be obligated to determine whether an
Optional Exchange complies with the applicable provisions for exemption
under Rule 3a-7 of the Investment Company Act of 1940, as amended, or the
rules or regulations promulgated thereunder.
(vii) The provisions of Section 4.07 of the Standard Terms shall not
apply to an Optional Exchange pursuant to this Section 7(b). This Section
7(b) shall not provide any Person with a lien against, an interest in or a
right to specific performance with respect to the Underlying Securities;
provided that satisfaction of the conditions set forth in this Section
7(b) shall entitle the Certificateholder or Warrant Holder, as applicable,
to a distribution thereof.
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(viii) The aggregate principal amount of Certificates exchanged in
connection with any Optional Exchange pursuant to this Section shall be in
an amount that will entitle the Certificateholders thereof to Underlying
Securities in an even multiple of the minimum denomination of such
Underlying Securities. In the event that the face amount of Underlying
Securities to be distributed in connection with any Optional Exchange
pursuant to Section 7(a) is not an even multiple of the minimum
denomination of the Underlying Securities, such amount shall be rounded
down to such minimum denomination. Following such a rounding, the
aggregate principal amount of Certificates accepted for exchange shall be
reduced to take into account the effect of such rounding and the
Certificateholders (and, if applicable, the relevant Warrant Holders)
requesting the Optional Exchange shall be issued Certificates in the
amount of the remainder. If such Certificates are Called Certificates,
they may be exchanged for a distribution of Underlying Securities on any
subsequent Call Date on which the other requirements of Section 7(a) are
met. For purposes of this provision, in any Optional Exchange of
Certificates for Underlying Securities on a Call Date by two or more
Certificateholders (and, if applicable, the relevant Warrant Holders), the
Trustee shall determine the effects of rounding for purposes of the second
preceding sentence with regard to the aggregate amount of Underlying
Securities to be distributed (rather than each such Certificateholder's
(and, if applicable, Warrant Holder's) individual allotment) and shall
round each Certificateholder's (and, if applicable, Warrant Holder's)
proportionate distribution in accordance with such instructions from such
parties.
(ix) In the event such Optional Exchange shall occur prior to the
Distribution Date in January 2004, the Certificateholders shall have paid
to the Trustee, for distribution to the Depositor, on the Optional
Exchange Date an amount equal to the sum obtained by multiplying the
amount of accrued interest on the Underlying Securities from July 15, 2003
through, but excluding, the Closing Date by a fraction, the numerator of
which shall be the Certificate Principal Balance of Certificates being
exchanged on such Optional Exchange Date and the denominator of which
shall be the total Certificate Principal Balance of Certificates.
(c) Concurrently with the execution of this Series Supplement, the
Trustee, on behalf of the Trust, shall execute the Warrant Agent Agreement and
the Call Warrants, dated as of the date hereof and substantially in the form of
Exhibit B hereto, initially evidencing all of the Call Warrants. The Trustee
shall perform the Trust's obligations under the Warrant Agent Agreement and the
Call Warrants in accordance with their respective terms.
(d) Call Warrants may be exercised by the Warrant Holder, in whole or in
part, on any Call Date. In addition to the conditions set forth in Section 1.1
of the Warrant Agent Agreement, the following conditions shall apply to any
Optional Call.
(i) The Warrant Holder shall have provided a certificate of solvency
to the Trustee.
(ii) Upon receipt of a Call Notice, the Trustee shall provide a
conditional call notice to the Depository not less than 3 Business Days
prior to the Call Date.
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(iii) Delivery of a Call Notice does not give rise to an obligation
on the part of the Warrant Holder to pay the Call Price. If, by 10:00 a.m.
(New York City time) on the Call Date, the Warrant Holder has not paid the
Call Price, except in connection with a Call Notice relating to a tender
offer for or redemption of the Underlying Securities, then the Call Notice
shall automatically expire and none of the Warrant Holder, the Warrant
Agent or the Trustee shall have any obligation with respect to the Call
Notice. The expiration of a Call Notice shall in no way affect the Warrant
Xxxxxx's right to deliver a Call Notice at a later date. The Call Price
for a call in connection with a tender offer or redemption shall be
deducted from the proceeds of a tender offer or redemption by the Trust
pursuant to Section 5(h)(iii) and Section 7(d)(v), as applicable.
(iv) Subject to receipt of the Call Price, the Trustee shall pay the
applicable portion of the Call Price to the Class A-1 and Class A-2
Certificateholders on the Call Date. The Call Price for each Class of
Certificates in respect of partial calls shall be allocated pro rata to
the Certificateholders of such Class.
(v) The Trustee shall not consent to any amendment or modification of
this Agreement (including the Standard Terms) which would adversely affect
the Warrant Holders (including, without limitation, any alteration of the
timing or amount of any payment of the Call Price or any other provision
of this Agreement in a manner adverse to the Warrant Holders) without the
prior written consent of 100% of the Warrant Holders. For purposes of this
clause, no amendment, modification or supplement required to provide for
any purchase by the Trustee of additional Underlying Securities and
authentication and delivery by the Trustee of additional Certificates and
Call Warrants pursuant to Section 3(d) shall be deemed to adversely affect
the Warrant Holders.
(vi) The Trustee shall not be obligated to determine whether an
Optional Call complies with the applicable provisions for exemption under
Rule 3a-7 of the Investment Company Act of 1940, as amended, or the rules
or regulations promulgated thereunder.
(e) This Section 7 shall not provide the Warrant Holder with a lien
against, an interest in or a right to specific performance with respect to the
Underlying Securities; provided that satisfaction of the conditions set forth
in Section 7(b) shall entitle the Certificateholders or the Warrant Holders, as
applicable, to a distribution of the Underlying Securities.
(f) The rights of the Certificateholders under the Trust Agreement and the
Certificates are limited by the terms, provisions and conditions of the Trust
Agreement, the Warrant Agent Agreement and the Call Warrants with respect to
the exercise of the Call Warrants by the Warrant Holder. The
Certificateholders, by their acceptance of Certificates, covenant and agree to
tender any and all Called Certificates to the Trustee upon the Warrant Holder's
exercise of Call Warrants and payment of the Call Price for such Certificates
in accordance with the provisions hereof and of the Warrant Agent Agreement.
(g) If the Trustee receives notice of a redemption by the Underlying
Securities Issuer for some or all of the Underlying Securities, the Trustee
shall, within three Business Days, notify the Warrant Agent and forward to the
Warrant Agent copies of all materials received by the
19
Trustee in connection therewith. Any Warrant Holder that desires to call
Underlying Securities in connection with a redemption by the Underlying
Securities Issuer shall send a Call Notice to the Trustee no later than seven
Business Days prior to the date such Underlying Securities are to be redeemed.
(i) The Call Date and Optional Exchange Date for any exercise of Call
Warrants in connection with a redemption by the Underlying Securities
Issuer shall be deemed to be the Business Day on which such Underlying
Securities are redeemed by the Underlying Securities Issuer.
(ii) The Call Price shall be deducted from the redemption proceeds
and paid to Certificateholders in accordance with Section 7(d)(v), and the
excess of the redemption proceeds over the Call Price shall be paid to the
exercising Warrant Holders pro rata in respect to their proportionate
exercises of Call Warrants.
(iii) If fewer than all Underlying Securities are redeemed by the
Underlying Securities Issuer and the amount of Call Warrants exercised
corresponds to a number of Class A-1 and Class A-2 Certificates that could
be exchanged in an Optional Exchange for a principal amount of Underlying
Securities that exceeds the principal amount of Underlying Securities
actually redeemed, then, unless otherwise directed by any exercising
Warrant Holder, (A) the amount of Call Warrants exercised shall be reduced
to an amount that corresponds to a number of Class A-1 and Class A-2
Certificates that could be exchanged in an Optional Exchange for the
principal amount of Underlying Securities redeemed by the Underlying
Securities Issuer (without regard to any restrictions on the amount to be
exchanged); (B) each Warrant Holder's exercise shall be reduced by its
share (proportionate to the amount specified in its exercise notice) of
the amount of such excess; (C) the Call Price shall be determined after
giving effect to the reduction specified in clause (B); (D) the Call
Warrants that relate to the reduction specified in clause (B) shall remain
outstanding; and (E) the excess of the redemption proceeds over the Call
Price shall be allocated in proportion to the amount of Call Warrants
deemed exercised as set forth in clause (A) above.
(iv) If the Underlying Securities are not redeemed by the Underlying
Securities Issuer for any reason, then (1) the Call Notices will be of no
further force and effect, and (2) any Call Warrants relating to such Call
Notices will not be exercised and will remain outstanding.
Section 8. Notices of Events of Default.
As promptly as practicable after, and in any event within 30 days
after, the occurrence of any Event of Default actually known to the Trustee,
the Trustee shall give notice of such Event of Default to the Depository, or,
if any Certificates are not then held by DTC or any other depository, directly
to the registered holders of such Certificates and to the Warrant Agent.
However, except in the case of an Event of Default relating to the payment of
principal of or interest on any of the Underlying Securities, the Trustee will
be protected in withholding such notice if in good faith it determines that the
withholding of such notice is in the interest of the Certificateholders.
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Section 9. Miscellaneous.
(a) The provisions of Section 4.04, Advances, of the Standard Terms shall
not apply to the Prudential Financial Note-Backed Series 2003-20 Certificates.
(b) The provisions of Section 4.07, Optional Exchange, of the Standard
Terms shall not apply to the Prudential Financial Note-Backed Series 2003-20
Certificates.
(c) The Trustee shall simultaneously forward reports to Certificateholders
pursuant to Section 4.03 of the Standard Terms and to the New York Stock
Exchange.
(d) Except as expressly provided herein, the Certificateholders shall not
be entitled to terminate the Trust or cause the sale or other disposition of
the Underlying Securities.
(e) The provisions of Section 3.07(d) of the Standard Terms shall not
apply to the Prudential Financial Note-Backed Series 2003-20 Certificates.
(f) If the Trustee has not received payment with respect to a Collection
Period on the Underlying Securities on or prior to the related Distribution
Date, such distribution will be made promptly upon receipt of such payment. No
additional amounts shall accrue on the Certificates or be owed to
Certificateholders as a result of such delay; provided, however, that any
additional interest owed and paid by the Underlying Securities Issuer as a
result of such delay shall be paid to the Class A-1 Certificateholders pro rata
in proportion to their respective entitlements to such delayed payments.
(g) The outstanding Certificate Principal Balance of the Certificates
shall not be reduced by the amount of any Realized Losses (as defined in the
Standard Terms).
(h) The Trust may not engage in any business or activities other than in
connection with, or relating to, the holding, protecting and preserving of the
Trust Property and the issuance of the Certificates and the Call Warrants, and
other than those required or authorized by the Trust Agreement or incidental
and necessary to accomplish such activities. The Trust may not issue or sell
any certificates or other obligations other than the Certificates and the Call
Warrants or otherwise incur, assume or guarantee any indebtedness for money
borrowed. Notwithstanding Section 3.05 of the Standard Terms, funds on deposit
in the Certificate Account shall not be invested. Section 2.01(f) of the
Standard Terms shall be superseded by this provision.
(i) Notwithstanding anything in the Trust Agreement to the contrary, the
Trustee may be removed upon 60 days prior written notice delivered by the
holders of Class A-1 Certificates and Class A-2 Certificates representing the
Required Percentage--Removal.
(j) In the event that the Internal Revenue Service challenges the
characterization of the Trust as a grantor trust, the Trustee shall then file
such forms as the Depositor may specify to establish the Trust's election
pursuant to Section 761 of the Code to exclude the Trust from the application
of Subchapter K of the Code and is hereby empowered to execute such forms on
behalf of the Certificateholders.
21
(k) Notwithstanding anything in the Standard Terms to the contrary, the
Trustee, upon written direction by the Depositor, will execute the
Certificates.
(l) In relation to Section 7.01(f) of the Standard Terms, any periodic
reports filed by the Trustee pursuant to the Exchange Act in accordance with
the customary practices of the Depositor, need not contain any independent
reports.
(m) Notwithstanding anything in the Trust Agreement to the contrary, the
Trustee will have no recourse to the Underlying Securities.
(n) A Plan (as herein defined) fiduciary, whether or not a
Certificateholder at such time, may request in writing that the Trustee provide
such Plan fiduciary with such information as shall be necessary for it to
determine whether any of the Call Warrant holders is (i) a "party in interest"
(within the meaning of ERISA, Section 3(14)); or (ii) a "disqualified person"
within the meaning of Internal Revenue Code ("Code") Section 4975(e)(2) with
respect to any employee benefit plan or Plan identified to the Trustee by such
Plan fiduciary at the time such request is made in order for the Plan fiduciary
to determine whether an investment in the Certificates by such Plan is or would
be permissible under ERISA or the Code. Any such written request of a Plan
fiduciary shall be accompanied by a certification of the Plan fiduciary,
opinion of counsel experienced in such issues, and such other documentation as
the Trustee may require, in order to establish that such disclosure is
necessary for the Plan fiduciary to determine compliance with ERISA and the
Code, as well as a confidentiality agreement, whereby the Plan fiduciary agrees
not to disclose the identity of any Call Warrant holders except to any legal or
other experts as necessary to make such determination. The holder of a Call
Warrant shall upon reasonable request of the Trustee, in order for the Trustee
to satisfy its obligations to a Plan fiduciary, provide the Trustee with any
one or more of the following, in the sole discretion of the Call Warrant
holder: (i) a certificate that each of the Call Warrant holders is not (x) a
"party in interest" (within the meaning of ERISA, Section 3(14)) with respect
to any "employee benefit plan" as defined in ERISA, Section 3(3); or (y) a
"disqualified person" within the meaning of Internal Revenue Code Section
4975(e)(2) with respect to a "Plan" as defined in Code Section 4975(e)(1)
except in each case with respect to plans sponsored by the Call Warrant holder
or its affiliates which cover employees of the Call Warrant holder and/or such
affiliates; (ii) a certificate that each of the Call Warrant holders is not
such a "party in interest" or "disqualified person" with respect to any
employee benefit plan or Plan identified to the Trustee by such Plan fiduciary
at the time such request is made; or (iii) a written consent to the limited
disclosure of the respective Call Warrant holder's identity to a specific Plan
fiduciary solely for purposes of allowing the Trustee to satisfy its
obligations to a Plan fiduciary.
(o) The Trust will not merge or consolidate with any other entity without
confirmation from each Rating Agency that such merger or consolidation will not
result in the qualification, reduction or withdrawal of its then-current rating
on the Certificates.
(p) All directions, demands and notices hereunder or under the Standard
Terms shall be in writing and shall be delivered as set forth below (unless
written notice is otherwise provided to the Trustee).
If to the Depositor, to:
22
Xxxxxx ABS Corporation
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Credit Trading
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Trustee or the Warrant Agent, to:
U.S. Bank Trust National Association
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Rating Agencies, to:
Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: CBO/CLO Monitoring Department
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and to:
Standard & Poor's Ratings Services
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Finance Surveillance Group
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the New York Stock Exchange, to:
New York Stock Exchange, Inc.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Managing Director,
Investment Banking Services/Structured Products
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(q) Copies of all directions, demands and notices required to be given to
the Certificateholders hereunder or under the Standard Terms will also be given
to the Warrant Holders in writing as set forth in this Section 9, and copies of
all directions, demands and notices
23
required to be given to the Trustee hereunder or under the Standard Terms will
also be given to the Warrant Agent in writing as set forth in this Section
9(p).
(r) Each of the representations, covenants and agreements made herein by
each of the Depositor and the Trustee are for the benefit of the
Certificateholders and the Warrant Holders.
(s) The provisions of Section 2.01(d)(iii) of the Standard Terms shall not
apply to the Prudential Financial Note-Backed Series 2003-20 Certificates and
the following shall be deemed to be inserted in its place:
"at the time of delivery of the Underlying Securities, the
Depositor owns such Underlying Securities, has the right to
transfer its interest in such Underlying Securities and such
Underlying Securities are free and clear of any lien, pledge,
encumbrance, right, charge, claim or other security interest;
and"
(t) The Trustee shall appoint a firm of independent certified public
accountants to review each of the distribution reports prepared by the Trustee
pursuant to Section 4.03 of the Standard Terms and to verify (x) that such
reports and the calculations made therein were made accurately and in
accordance with the terms of the Trust Agreement and (y) that the Depositor and
the Trustee have each fulfilled their obligations under this Trust Agreement.
The Trustee shall instruct the accountants (i) to promptly report to the
Trustee any errors in such distribution reports discovered in verifying such
calculations and (ii) to render to the Trustee an annual examination report,
prepared in compliance with established or stated criteria as set forth in the
professional standards of the American Institute of Certified Public
Accountants, within 45 days (or such longer period as may be acceptable to the
Trustee) following the end of each calendar year that specifies the
calculations made in reviewing the distribution reports prepared by the Trustee
for the previous calendar year and such accountants' associated findings.
(u) Each of the representations, covenants and agreements made herein by
each of the Depositor and the Trustee are for the benefit of the
Certificateholders and the Warrant Holders.
Section 10. Governing Law. THIS SERIES SUPPLEMENT AND THE TRANSACTIONS
DESCRIBED HEREIN SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED WITHIN
THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CHOICE OF LAWS PROVISIONS
THEREOF.
Section 11. Counterparts. This Series Supplement may be executed in any
number of counterparts, each of which shall be deemed to be an original, and
all such counterparts shall constitute but one and the same instrument.
Section 12. Termination of the Trust. The Trust shall terminate upon the
earliest to occur of (i) the payment in full at maturity or sale by the Trust
after a payment default, call or an acceleration or other early payment of the
Underlying Securities and the distribution in full of all amounts due to the
Class A-1 Certificateholders and Class A-2 Certificateholders; (ii) the
exercise of all outstanding Call Warrants by the Warrant Holder; (iii) the
final Distribution Date and (iv) the expiration of 21 years from the death of
the last survivor of the descendants of
24
Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to the Court of St.
Xxxxx, living on the date hereof.
Section 13. Sale of Underlying Securities; Optional Exchange. In the event
of a sale of the Underlying Securities pursuant to this Agreement or pursuant
to the instructions of the Warrant Agent under Section 1.2 of the Warrant Agent
Agreement, the Trustee shall solicit bids for the sale of the Underlying
Securities with settlement thereof on or before the third Business Day after
such sale from three leading dealers in the relevant market. Any of the
following dealers (or their successors) shall be deemed to qualify as leading
dealers: (1) Credit Suisse First Boston LLC, (2) Xxxxxxx, Xxxxx & Co., (3)
Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated, (4) UBS Securities LLC, (5)
Citigroup Global Markets Inc., and (6) except in the case of a sale related to
the exercise of Call Warrants by the Depositor or any Affiliate thereof, Xxxxxx
Brothers Inc. The Trustee shall not be responsible for the failure to obtain a
bid so long as it has made reasonable efforts to obtain bids. If a bid for the
sale of the Underlying Securities has been accepted by the Trustee but the sale
has failed to settle on the proposed settlement date, the Trustee shall request
new bids from such leading dealers. In the event of an Optional Exchange, the
Trustee shall only deliver the Underlying Securities to the purchaser of such
Underlying Securities or sell the Underlying Securities pursuant to this
Section 13, as the case may be, against payment in same day funds deposited
into the Certificate Account.
Section 14. Amendments. Notwithstanding anything in the Trust Agreement to
the contrary, in addition to the other restrictions on modification and
amendment contained therein, the Trustee shall not enter into any amendment or
modification of the Trust Agreement which would adversely affect in any
material respect the interests of the holders of any class of Certificates
without the consent of the holders of 100% of such class of Certificates;
provided, however, that no such amendment or modification will be permitted
which would cause the Trust to be taxed as an association or publicly traded
partnership taxable as a corporation for federal income tax purposes. Unless
otherwise agreed, the Trustee shall provide five Business Days written notice
to each Rating Agency before entering into any amendment or modification of the
Trust Agreement pursuant to this Section 14.
Section 15. Voting of Underlying Securities, Modification of Indenture.
(a) The Trustee, as holder of the Underlying Securities, has the right to
vote and give consents and waivers in respect of the Underlying Securities as
permitted by the Depository and except as otherwise limited by the Trust
Agreement. In the event that the Trustee receives a request from the
Depository, the Underlying Securities Trustee or the Underlying Securities
Issuer for its consent to any amendment, modification or waiver of the
Underlying Securities, the Indenture or any other document thereunder or
relating thereto, or receives any other solicitation for any action with
respect to the Underlying Securities, the Trustee shall mail a notice of such
proposed amendment, modification, waiver or solicitation to each
Certificateholder of record as of such date. The Trustee shall request
instructions from the Certificateholders as to whether or not to consent to or
vote to accept such amendment, modification, waiver or solicitation. The
Trustee shall consent or vote, or refrain from consenting or voting, in the
same proportion as the Voting Rights of the Trust were actually voted or not
voted by the Certificateholders thereof as of a date determined by the Trustee
prior to the date on which such consent or vote is required; provided, however,
that, notwithstanding anything in the Trust Agreement to the contrary, the
25
Trustee shall at no time vote on or consent to any matter (i) unless such vote
or consent would not (based on an opinion of counsel) cause the Trust to be
taxed as an association or publicly traded partnership taxable as a corporation
under the Code, (ii) which would alter the timing or amount of any payment on
the Underlying Securities, including, without limitation, any demand to
accelerate the Underlying Securities, except in the event of a default under
the Underlying Securities or an event which with the passage of time would
become an event of default under the Underlying Securities and with the
unanimous consent of Certificateholders representing 100% of the aggregate
Voting Rights and 100% of the Warrant Holders, or (iii) which would result in
the exchange or substitution of any of the outstanding Underlying Securities
pursuant to a plan for the refunding or refinancing of such Underlying
Securities except in the event of a default under the Indenture and only with
the consent of Certificateholders representing 100% of the aggregate Voting
Rights and 100% of the Warrant Holders. The Trustee shall have no liability for
any failure to act resulting from Certificateholders' late return of, or
failure to return, directions requested by the Trustee from the
Certificateholders.
(b) In the event that an offer is made by the Underlying Securities Issuer
to issue new obligations in exchange and substitution for any of the Underlying
Securities, pursuant to a plan for the refunding or refinancing of the
outstanding Underlying Securities or any other offer is made for the Underlying
Securities, the Trustee shall notify the Class A-1 Certificateholders, Class
A-2 Certificateholders and the Warrant Holders of such offer promptly. Subject
to the rights of the Warrant Holders to exercise Call Warrants in connection
with a tender offer for the Underlying Securities, the Trustee must reject any
such offer unless an Underlying Securities event of default has occurred and
the Trustee is directed by the affirmative vote of Certificateholders
representing 100% of the aggregate Voting Rights to accept such offer and the
Trustee has received the tax opinion described above. If pursuant to the
preceding sentence, the Trustee accepts any such offer the Trustee shall
promptly notify the Rating Agencies.
(c) If an event of default under the Indenture occurs and is continuing,
and if directed by a majority of the outstanding Class A-1 Certificateholders
and Class A-2 Certificateholders, the Trustee shall vote the Underlying
Securities in favor of directing, or take such other action as may be
appropriate to direct, the Underlying Securities Trustee to declare the unpaid
principal amount of the Underlying Securities and any accrued and unpaid
interest thereon to be due and payable.
Section 16. Additional Depositor Representation. It is the express intent
of the parties hereto that the conveyance of the Underlying Securities by the
Depositor to the Trustee be, and be construed as, a sale of the Underlying
Securities by the Depositor and not a pledge of any Underlying Securities by
the Depositor to secure a debt or other obligation of the Depositor. In the
event that, notwithstanding the aforementioned intent of the parties, any
Underlying Securities are held to be property of the Depositor, then, it is the
express intent of the parties that such conveyance be deemed a pledge of such
Underlying Securities and all proceeds thereof by the Depositor to the Trustee
to secure a debt or other obligation of the Depositor, pursuant to Section
10.07 of the Standard Terms. In connection with any such grant of a security
interest in the Underlying Securities and all proceeds thereof (including any
such grant in connection with any sale of additional Underlying Securities
pursuant to Section 3(d)), the Depositor hereby represents and warrants to
Trustee as follows:
26
(i) In the event the Underlying Securities are held to be property of the
Depositor, then the Trust Agreement creates a valid and continuing
security interest (as defined in the UCC) in the Underlying
Securities in favor of the Securities Intermediary which security
interest is prior to all other liens, and is enforceable as such as
against creditors of, and purchasers from, the Depositor.
(ii) The Underlying Securities have been credited to a trust account (the
"Securities Account") established in the name of the Trustee in
accordance with Section 2.01 of the Standard Terms. U.S. Bank Trust
National Association, as securities intermediary (the "Securities
Intermediary") has established the Securities Account and has agreed
to treat the Underlying Securities as "financial assets" within the
meaning of the UCC.
(iii) Immediately prior to the transfer of the Underlying Securities to
the Trust, the Depositor owned and had good and marketable title to
the Underlying Securities free and clear of any lien, claim or
encumbrance of any Person.
(iv) The Depositor has received all consents and approvals required by the
terms of the Underlying Securities for the transfer to the Trustee
all of the Depositor's interest and rights in the Underlying
Securities as contemplated by the Trust Agreement.
(v) The Depositor has taken all steps necessary to cause the Securities
Intermediary to identify on its records that the Trustee is the
Person owning the security entitlements credited to the Securities
Account.
(vi) Other than the security interest granted to the Trust pursuant to
this Agreement, the Depositor has not assigned, pledged, sold,
granted a security interest in or otherwise conveyed any interest in
the Underlying Securities (or, if any such interest has been
assigned, pledged or otherwise encumbered, it has been released). The
Depositor has not authorized the filing of and is not aware of any
financing statements against the Depositor that include a description
of the Underlying Securities other than any financing statement
relating to the security interest granted to the Trust hereunder. The
Depositor is not aware of any judgment or tax lien filings against
the Depositor.
(vii) The Securities Account is not in the name of any Person other than
the Trustee. The Depositor has not consented to the compliance by the
Securities Intermediary, with entitlement orders of any Person other
than the Trustee.
27
IN WITNESS WHEREOF, the parties hereto have caused this Series
Supplement to be duly executed by their respective authorized officers as of
the date first written above.
XXXXXX ABS CORPORATION,
as Depositor
By:/s/ Xxxx Xxxxxxxxxxx
---------------------------------
Name: Xxxx Xxxxxxxxxxx
Title: Senior Vice President
U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Trustee on behalf of the
Corporate Backed Trust Certificates
Prudential Financial Note-Backed
Series2003-20 Trust
By:/s/ Xxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Vice President
28
SCHEDULE I
PRUDENTIAL FINANCIAL NOTE-BACKED SERIES 2003-20
UNDERLYING SECURITIES SCHEDULE
Underlying Securities: 5.75% Medium-Term Notes, Series B
due July 15, 2033
Issuer: Prudential Financial, Inc.
CUSIP Number: 00000XXX0
Principal Amount Deposited: $37,000,000
Original Issue Date: July 7, 2003
Principal Amount of
Underlying Securities
Originally Issued: $500,000,000
Maturity Date: July 15, 2033
Interest Rate: 5.75% per annum
Interest Payment Dates: January 15th and July 15th
I-1
EXHIBIT A-1
FORM OF TRUST CERTIFICATE CLASS A-1
CLASS A-1 CERTIFICATE
NUMBER 1 1,418,333 $25 PAR CERTIFICATES
CUSIP NO. 21988K 70 1
SEE REVERSE FOR CERTAIN DEFINITIONS
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE REPRESENTS A PROPORTIONATE UNDIVIDED BENEFICIAL OWNERSHIP
INTEREST IN THE TRUST AND DOES NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST
IN, AND IS NOT GUARANTEED BY THE DEPOSITOR OR THE TRUSTEE OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE TRUST ASSETS ARE
INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR ANY OTHER PERSON.
THE CERTIFICATEHOLDERS, BY THEIR ACCEPTANCE OF CERTIFICATES, COVENANT AND AGREE
TO TENDER ANY AND ALL CALLED CERTIFICATES TO THE TRUSTEE UPON THE WARRANT
HOLDER'S EXERCISE OF CALL WARRANTS AND PAYMENT OF THE CALL PRICE FOR SUCH
CERTIFICATES IN ACCORDANCE WITH THE PROVISIONS HEREOF AND OF THE WARRANT AGENT
AGREEMENT.
A-1-1
XXXXXX ABS CORPORATION
1,418,333 $25 PAR
CORPORATE BACKED TRUST CERTIFICATES,
PRUDENTIAL FINANCIAL NOTE-BACKED SERIES 2003-20
6.00% INTEREST RATE
evidencing a proportionate undivided beneficial ownership interest in the
Trust, as defined below, the property of which consists principally of
$37,000,000 aggregate principal amount of 5.75% Medium-Term Notes, Series B due
July 15, 2033, issued by Prudential Financial, Inc. (the "Underlying Securities
Issuer") and all payments received thereon (the "Trust Property"), deposited in
trust by Xxxxxx ABS Corporation (the "Depositor").
THIS CERTIFIES THAT CEDE & CO. is the registered owner of 1,418,333 Class
A-1 Certificates issued by the Corporate Backed Trust Certificates, Prudential
Financial Note-Backed Series 2003-20 Trust (the "Trust"), having an aggregate
Certificate Principal Balance of $35,458,325, representing a nonassessable,
fully-paid, proportionate undivided beneficial ownership interest in the
Prudential Financial Note-Backed Series 2003-20 Trust, formed by the
Depositor.
The Trust was created pursuant to a Standard Terms for Trust Agreements,
dated as of January 16, 2001 (the "Standard Terms"), between the Depositor and
U.S. Bank Trust National Association, a national banking association, not in
its individual capacity but solely as Trustee (the "Trustee"), as supplemented
by the Series Supplement in respect of the Prudential Financial Note-Backed
Series 2003-20, dated as of December 22, 2003 (the "Series Supplement" and,
together with the Standard Terms, the "Trust Agreement"), between the
Depositor and the Trustee. This Certificate does not purport to summarize the
Trust Agreement and reference is hereby made to the Trust Agreement for
information with respect to the interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and obligations of
the Trustee with respect hereto. A copy of the Trust Agreement may be obtained
from the Trustee by written request sent to the Corporate Trust Office.
Capitalized terms used but not defined herein have the meanings assigned to
them in the Trust Agreement.
This Certificate is one of the duly authorized Certificates designated as
the "Corporate Backed Trust Certificates, Prudential Financial Note-Backed
Series 2003-20, Class A-1" (herein called the "Certificates"). This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Trust Agreement the Holder of this
Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound. The Trust Property consists of: (i) Underlying Securities
described in the Trust Agreement, and (ii) all payments on or collections in
respect of the Underlying Securities accrued on or after December 22, 2003,
together with any and all income, proceeds and payments with respect thereto;
provided, however, that any income from the investment of Trust funds in
certain permitted investments ("Eligible Investments") does not constitute
Trust Property.
A-1-2
Subject to the terms and conditions of the Trust Agreement (including the
availability of funds for distributions) and until the obligation created by
the Trust Agreement shall have terminated in accordance therewith,
distributions will be made on each Distribution Date, to the Person in whose
name this Certificate is registered on the applicable Record Date, in an
amount equal to such Certificateholder's proportionate undivided beneficial
ownership interest in the amount required to be distributed to the Holders of
the Certificates on such Distribution Date. The Record Date applicable to any
Distribution Date is the close of business on the day immediately preceding
such Distribution Date (whether or not a Business Day). If a payment with
respect to the Underlying Securities is made to the Trustee after the date on
which such payment was due, then the Trustee will distribute any such amounts
received on the next occurring Business Day.
Each Certificateholder, by its acceptance of a Certificate, covenants and
agrees that such Certificateholder will not at any time institute against the
Trust, or join in any institution against the Trust of, any bankruptcy
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Certificates or the Trust
Agreement.
Distributions made on this Certificate will be made as provided in the
Trust Agreement by the Trustee by wire transfer in immediately available
funds, or check mailed to the Certificateholder of record in the Certificate
Register without the presentation or surrender of this Certificate or the
making of any notation hereon, except that with respect to Certificates
registered on the Record Date in the name of the nominee of the Clearing
Agency (initially, such nominee shall be Cede & Co.), payments will be made by
wire transfer in immediately available funds to the account designated by such
nominee. Except as otherwise provided in the Trust Agreement and
notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the Corporate
Trust Office or such other location as may be specified in such notice.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee, by manual signature, this Certificate shall not
entitle the Holder hereof to any benefit under the Trust Agreement or be valid
for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE HOLDER HEREOF SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.
A-1-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed as of the date set forth below.
CORPORATE BACKED TRUST
CERTIFICATES, PRUDENTIAL FINANCIAL
NOTE-BACKED SERIES 2003-20 TRUST
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
not in its individual capacity but solely
as Trustee,
By:
------------------------------------
Authorized Signatory
Dated: December 22, 2003
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Corporate Backed Trust Certificates, Prudential Financial
Note-Backed Series 2003-20, described in the Trust Agreement referred to
herein.
U.S. BANK TRUST NATIONAL ASSOCIATION not in its individual capacity but solely
as Trustee,
By:
---------------------------------
Authorized Signatory
A-1-4
(REVERSE OF CERTIFICATE)
The Certificates are limited in right of distribution to certain payments
and collections respecting the Underlying Securities, all as more specifically
set forth herein and in the Trust Agreement. The registered Holder hereof, by
its acceptance hereof, agrees that it will look solely to the Trust Property
(to the extent of its rights therein) for distributions hereunder.
The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of
the Depositor and the Trustee and the rights of the Certificateholders under
the Trust Agreement at any time by the Depositor and the Trustee with the
consent of the Holders of Class A-1 Certificates in the manner set forth in
the Series Supplement and the Standard Terms. Any such consent by the Holder
of this Certificate (or any predecessor Certificate) shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the transfer hereof or in exchange hereof or in
lieu hereof whether or not a notation of such consent is made upon this
Certificate. The Trust Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of
the Certificates.
The Certificates are issuable in fully registered form only in
denominations of $25.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registerable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies of the Certificate Registrar maintained by
the Trustee in the Borough of Manhattan, the City of New York, duly endorsed
by or accompanied by an assignment in the form below and by such other
documents as required by the Trust Agreement, and thereupon one or more new
Certificates of the same class in authorized denominations evidencing the same
principal amount will be issued to the designated transferee or transferees.
The initial Certificate Registrar appointed under the Trust Agreement is U.S.
Bank Trust National Association.
No service charge will be made for any registration of transfer or
exchange, but the Trustee may require exchange of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with
any transfer or exchange of Certificates.
The Depositor and the Trustee and any agent of the Depositor or the
Trustee may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Depositor, the Trustee, nor
any such agent shall be affected by any notice to the contrary.
It is the intention of the parties to the Trust Agreement that the Trust
created thereunder shall constitute a fixed investment trust for federal
income tax purposes under Treasury Regulation Section 301.7701-4, and the
Certificateholder agrees to treat the Trust, any distributions therefrom and
its beneficial interest in the Certificates consistently with such
characterization.
The Trust and the obligations of the Depositor and the Trustee created by
the Trust Agreement with respect to the Certificates shall terminate upon the
earliest to occur of (i) the payment in full at maturity or sale by the Trust
after a payment default, call or an acceleration or
A-1-5
other early payment of the Underlying Securities and the distribution in full
of all amounts due to the Class A-1 Certificateholders and Class A-2
Certificateholders; (ii) the exercise of all outstanding Call Warrants by the
Warrant Holder; (iii) the final Distribution Date and (iv) the expiration of
21 years from the death of the last survivor of the descendants of Xxxxxx X.
Xxxxxxx, the late Ambassador of the United States to the Court of St. Xxxxx,
living on the date hereof.
An employee benefit plan subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), a plan described in Section
4975(e) of the Code, an entity whose underlying assets include plan assets by
reason of any such plan's investment in the entity, including an individual
retirement account or Xxxxx plan (any such, a "Plan") may purchase and hold
Certificates if the Plan can represent and warrant that its purchase and
holding of the Certificates would not be prohibited under ERISA or the Code.
A-1-6
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
(Please print or type name and address, including postal zip code, of assignee)
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing ______________________ Attorney to transfer said
Certificate on the books of the Certificate Register, with full power of
substitution in the premises.
Dated:
*
Signature Guaranteed:
*
*NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Signatures must be guaranteed
by an "eligible guarantor institution" meeting the requirements of the
Certificate Registrar, which requirements include membership or participation
in the Security Transfer Agent Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Certificate Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A-1-7
EXHIBIT A-2
FORM OF TRUST CERTIFICATE CLASS A-2
CLASS A-2 CERTIFICATE
NUMBER 1 CUSIP NO. 21988K AG 2
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS CLASS A-2 CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION UNDER
SUCH ACT IS IN EFFECT OR PURSUANT TO AN EXEMPTION THEREFROM UNDER SUCH ACT.
THE CLASS A-2 CERTIFICATE REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF THE SERIES SUPPLEMENT.
EACH PURCHASER OF THIS CLASS A-2 CERTIFICATE IS HEREBY NOTIFIED THAT
THE SELLER OF THIS CLASS A-2 CERTIFICATE MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.
THE PRINCIPAL AMOUNT OF THIS CLASS A-2 CERTIFICATE IS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS A-2
CERTIFICATE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE REPRESENTS A PROPORTIONATE UNDIVIDED BENEFICIAL
OWNERSHIP INTEREST IN THE TRUST AND DOES NOT EVIDENCE AN OBLIGATION OF, OR AN
INTEREST IN, AND IS NOT GUARANTEED BY THE DEPOSITOR OR THE TRUSTEE OR ANY OF
THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE OR THE TRUST ASSETS ARE
INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR ANY OTHER PERSON.
THE CERTIFICATEHOLDERS, BY THEIR ACCEPTANCE OF CERTIFICATES, COVENANT
AND AGREE TO TENDER ANY AND ALL CALLED
A-2-1
CERTIFICATES TO THE TRUSTEE UPON THE WARRANT HOLDER'S EXERCISE OF CALL
WARRANTS AND PAYMENT OF THE CALL PRICE FOR SUCH CERTIFICATES IN ACCORDANCE
WITH THE PROVISIONS HEREOF AND OF THE WARRANT AGENT AGREEMENT.
A-2-2
XXXXXX ABS CORPORATION
CORPORATE BACKED TRUST CERTIFICATES,
PRUDENTIAL FINANCIAL NOTE-BACKED SERIES 2003-20
$1,541,675 PRINCIPAL BALANCE
evidencing a proportionate undivided beneficial ownership interest in the
Trust, as defined below, the property of which consists principally of
$37,000,000 aggregate principal amount of 5.75% Medium-Term Notes, Series B due
July 15, 2033, issued by Prudential Financial, Inc. and all payments received
thereon (the "Trust Property"), deposited in trust by Xxxxxx ABS Corporation
(the "Depositor").
THIS CERTIFIES THAT CEDE & CO. is the registered owner of Class A-2
Certificates issued by the Corporate Backed Trust Certificates, Prudential
Financial Note-Backed Series 2003-20 Trust (the "Trust"), having an aggregate
Certificate Principal Balance of $1,541,675, representing a nonassessable,
fully-paid, proportionate undivided beneficial ownership interest in the
Prudential Financial Note-Backed Series 2003-20 Trust, formed by the
Depositor.
The Trust was created pursuant to a Standard Terms for Trust
Agreements, dated as of January 16, 2001 (the "Standard Terms"), between the
Depositor and U.S. Bank Trust National Association, a national banking
association, not in its individual capacity but solely as Trustee (the
"Trustee"), as supplemented by the Series Supplement, Prudential Financial
Note-Backed Series 2003-20, dated as of December 22, 2003 (the "Series
Supplement" and, together with the Standard Terms, the "Trust Agreement"),
between the Depositor and the Trustee. This Certificate does not purport to
summarize the Trust Agreement and reference is hereby made to the Trust
Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby and the rights, duties and
obligations of the Trustee with respect hereto. A copy of the Trust Agreement
may be obtained from the Trustee by written request sent to the Corporate
Trust Office. Capitalized terms used but not defined herein have the meanings
assigned to them in the Trust Agreement.
This Certificate is one of the duly authorized Certificates
designated as the "Corporate Backed Trust Certificates, Prudential Financial
Note-Backed Series 2003-20, Class A-2" (herein called the "Certificates").
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Trust Agreement the Holder of this
Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound. The Trust Property consists of: (i) Underlying Securities
described in the Trust Agreement, and (ii) all payments on or collections in
respect of the Underlying Securities accrued on or after December 22, 2003,
together with any and all income, proceeds and payments with respect thereto;
provided, however, that any income from the investment of Trust funds in
certain permitted investments ("Eligible Investments") does not constitute
Trust Property.
Subject to the terms and conditions of the Trust Agreement (including
the availability of funds for distributions) and until the obligation created
by the Trust Agreement
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shall have terminated in accordance therewith, distributions of interest will
be made on this Certificate on each Distribution Date.
Subject to the terms and conditions of the Trust Agreement (including
the availability of funds for distributions) and until the obligation created
by the Trust Agreement shall have terminated in accordance therewith,
distributions will be made on each Distribution Date, to the Person in whose
name this Certificate is registered on the applicable Record Date, in an
amount equal to such Certificateholder's proportionate undivided beneficial
ownership interest in the amount required to be distributed to the Holders of
the Certificates on such Distribution Date.
The Record Date applicable to any Distribution Date is the close of
business on the day immediately preceding such Distribution Date (whether or
not a Business Day). If a payment with respect to the Underlying Securities is
made to the Trustee after the date on which such payment was due, then the
Trustee will distribute any such amounts received on the next occurring
Business Day.
Each Certificateholder, by its acceptance of a Certificate, covenants
and agrees that such Certificateholder will not at any time institute against
the Trust, or join in any institution against the Trust of, any bankruptcy
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Certificates or the Trust
Agreement.
Distributions made on this Certificate will be made as provided in
the Trust Agreement by the Trustee by wire transfer in immediately available
funds, or check mailed to the Certificateholder of record in the Certificate
Register without the presentation or surrender of this Certificate or the
making of any notation hereon, except that with respect to Certificates
registered on the Record Date in the name of the nominee of the Clearing
Agency (initially, such nominee shall be Cede & Co.), payments will be made by
wire transfer in immediately available funds to the account designated by such
nominee. Except as otherwise provided in the Trust Agreement and
notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the Corporate
Trust Office or such other location as may be specified in such notice.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this Certificate shall not
entitle the Holder hereof to any benefit under the Trust Agreement or be valid
for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE HOLDER HEREOF SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
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IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed as of the date set forth below.
CORPORATE BACKED TRUST
CERTIFICATES, PRUDENTIAL FINANCIAL
NOTE-BACKED SERIES 2003-20 TRUST
By: U.S. BANK TRUST NATIONAL ASSOCIATION
not in its individual capacity but solely as
Trustee,
By:
------------------------------------
Authorized Signatory
Dated: December 22, 2003
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Corporate Backed Trust Certificates, Prudential
Financial Note-Backed Series 2003-20, described in the Trust Agreement
referred to herein.
U.S. BANK TRUST NATIONAL ASSOCIATION not in its individual capacity but solely
as Trustee,
By:
---------------------------------
Authorized Signatory
A-2-5
(REVERSE OF CERTIFICATE)
The Certificates are limited in right of distribution to certain
payments and collections respecting the Underlying Securities, all as more
specifically set forth herein and in the Trust Agreement. The registered
Holder hereof, by its acceptance hereof, agrees that it will look solely to
the Trust Property (to the extent of its rights therein) for distributions
hereunder.
The Trust Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the Trustee and the rights of the
Certificateholders under the Trust Agreement at any time by the Depositor and
the Trustee with the consent of the holders of Class A-2 Certificates in the
manner set forth in the Series Supplement and the Standard Terms. Any such
consent by the Holder of this Certificate (or any predecessor Certificate)
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Trust Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders
of any of the Certificates.
The Certificates are issuable in fully registered form only in
denominations of $100,000 and in integral multiples of $1 in excess thereof.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registerable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies of the Certificate Registrar maintained by
the Trustee in the Borough of Manhattan, the City of New York, duly endorsed
by or accompanied by an assignment in the form below and by such other
documents as required by the Trust Agreement, and thereupon one or more new
Certificates of the same class in authorized denominations evidencing the same
principal amount will be issued to the designated transferee or transferees.
The initial Certificate Registrar appointed under the Trust Agreement is U.S.
Bank Trust National Association.
No service charge will be made for any registration of transfer or
exchange, but the Trustee may require exchange of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with
any transfer or exchange of Certificates.
The Depositor and the Trustee and any agent of the Depositor or the
Trustee may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Depositor, the Trustee, nor
any such agent shall be affected by any notice to the contrary.
It is the intention of the parties to the Trust Agreement that the
Trust created thereunder shall constitute a fixed investment trust for federal
income tax purposes under Treasury Regulation Section 301.7701-4, and the
Certificateholder agrees to treat the Trust, any distributions therefrom and
its beneficial interest in the Certificates consistently with such
characterization.
The Trust and the obligations of the Depositor and the Trustee
created by the Trust Agreement with respect to the Certificates shall
terminate upon the earliest to occur of (i)
A-2-6
the payment in full at maturity or sale by the Trust after a payment default,
call or an acceleration or other early payment of the Underlying Securities
and the distribution in full of all amounts due to the Class A-1
Certificateholders and Class A-2 Certificateholders; (ii) the exercise of all
outstanding Call Warrants by the Warrant Holder; (iii) the final Distribution
Date and (iv) the expiration of 21 years from the death of the last survivor
of the descendants of Xxxxxx X. Xxxxxxx, the late Ambassador of the United
States to the Court of St. Xxxxx, living on the date hereof.
An employee benefit plan subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), a plan described in Section
4975(e) of the Code, an entity whose underlying assets include plan assets by
reason of any such plan's investment in the entity, including an individual
retirement account or Xxxxx plan (any such, a "Plan") may purchase and hold
Certificates if the Plan can represent and warrant that its purchase and
holding of the Certificates would not be prohibited under ERISA or the Code.
A-2-7
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
(Please print or type name and address, including postal zip code, of assignee)
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing ____________________ Attorney to transfer said
Certificate on the books of the Certificate Register, with full power of
substitution in the premises.
Dated:
*
Signature Guaranteed:
*
*NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Signatures must be guaranteed
by an "eligible guarantor institution" meeting the requirements of the
Certificate Registrar, which requirements include membership or participation
in the Security Transfer Agent Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Certificate Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A-2-8
EXHIBIT B
WARRANT AGENT AGREEMENT
CORPORATE BACKED TRUST CERTIFICATES
PRUDENTIAL FINANCIAL NOTE-BACKED SERIES 2003-20 TRUST
WARRANT AGENT AGREEMENT, dated as of December 22, 2003 (the
"Warrant Agent Agreement"), by and between XXXXXX ABS CORPORATION, as
Depositor (the "Depositor"), U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee
(the "Trustee") and U.S. BANK TRUST NATIONAL ASSOCIATION, as Warrant Agent
(the "Warrant Agent").
W I T N E S S E T H:
WHEREAS, the Depositor created Corporate Backed Trust Certificates,
Prudential Financial Note-Backed Series 2003-20 Trust (the "Trust"), a trust
created under the laws of the State of New York pursuant to a Standard Terms
for Trust Agreements, dated as of January 16, 2001 (the "Agreement"), between
Xxxxxx ABS Corporation (the "Depositor") and U.S. Bank Trust National
Association, a national banking association, not in its individual capacity
but solely as Trustee (the "Trustee"), as supplemented by the Series
Supplement 2003-20, dated as of December 22, 2003 (the "Series Supplement"
and, together with the Agreement, the "Trust Agreement"), between the
Depositor and the Trustee; and
WHEREAS, in connection with the creation of the Trust and the
deposit therein of the Underlying Securities, it is desired to provide for the
issuance of trust certificates (the "Certificates") evidencing undivided
interests in the Trust and call warrants with respect to the Certificates
("Call Warrants").
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants expressed herein, it is hereby agreed by and between the
Depositor, the Warrant Agent and the Trustee that except as otherwise
specified herein or as the context may otherwise require, capitalized terms
used herein but not defined herein shall have the respective meanings set
forth below in the Series Supplement, and as follows:
ARTICLE I
EXERCISE OF CALL WARRANTS
Section 1.1 Manner of Exercise. (a) Call Warrants may be exercised by
any holder thereof (each, a "Warrant Holder") in whole or in part on any Call
Date. The following conditions shall apply to any exercise of Call Warrants:
B-1
(i) A notice (each, a "Call Notice") specifying the number of
Call Warrants being exercised and the Call Date shall be delivered to
the Warrant Agent and the Trustee at least 5 Business Days before
such Call Date.
(ii) The Warrant Holder shall surrender the Call Warrants to
the Warrant Agent at its office specified in Section 7.3 hereof no
later than 10:00 a.m. (New York City time) on such Call Date.
(iii) Except as otherwise provided herein in connection with a
Call Notice relating to a tender offer for or redemption of
Underlying Securities, the Warrant Holder shall have made payment to
the Warrant Agent, by wire transfer or other immediately available
funds acceptable to the Warrant Agent, in the amount of the Call
Price, no later than 10:00 a.m. (New York City time) on the Call
Date.
(iv) The Warrant Holder may not exercise the Call Warrants at
any time when such Warrant Holder is insolvent, and such Warrant
Holder shall be required to certify that it is solvent at the time of
exercise, by completing the form of subscription ("Form of
Subscription") attached to the Call Warrants and delivering such
completed Form of Subscription to the Trustee on or prior to the Call
Date and by delivering to the Trustee a form reasonably satisfactory
to the Trustee of the solvency certificate required pursuant to
Section 7(d)(ii) of the Series Supplement.
(v) The Warrant Holder shall have satisfied any other
conditions to the exercise of Call Warrants set forth in Section 7(d)
of the Series Supplement.
(b) Upon exercise of Call Warrants, any Warrant Holder other than the
Depositor or any Affiliate of the Depositor shall be entitled to delivery by
the Trustee of the Called Certificates. The "Called Certificates" shall be, in
the case of the Class A-1 Certificates, Class A-1 Certificates having a
Certificate Principal Balance equal to $25 per Call Warrant, and in the case
of the Class A-2 Certificates, Class A-2 Certificates having a Certificate
Principal Balance equal to $25 per Call Warrant; provided, however, that
Called Certificates that are Class A-2 Certificates must meet the minimum
denomination requirements set forth in Section 3(a) of the Series Supplement.
Unless otherwise specified therein, each Call Notice shall be deemed to be
notice of an Optional Exchange pursuant to Section 7(b) of the Series
Supplement (it being expressly understood that any Optional Exchange must
comply with the provisions of Section 7(a) and 7(b) of the Series Supplement).
Any Warrant Holder which is the Depositor or any Affiliate of the Depositor
shall receive the proceeds of the sale of the Called Underlying Securities and
shall not be entitled to receive the related Called Certificates or Called
Underlying Securities. "Called Underlying Securities" are Underlying
Securities which represent the same percentage of the Underlying Securities as
the Called Certificates represent of the Class A-1 Certificates and the Class
A-2 Certificates.
(c) The Warrant Agent shall notify the Trustee immediately upon its
receipt of a Call Notice and upon receipt of payment of the Call Price. The
Warrant Agent shall
B-2
transfer the amount of any paid Call Price to the Trustee in immediately
available funds, for deposit in the Certificate Account and application
pursuant to the Trust Agreement on the applicable Call Date (and, pending such
transfer, shall hold such amount for the benefit of the Warrant Holder in a
segregated trust account).
(d) Delivery of a Call Notice does not give rise to an obligation on
the part of the Warrant Holder to pay the Call Price. If, by 10:00 a.m. (New
York City time) on the Call Date, the Warrant Holder has not paid the Call
Price, except in connection with a Call Notice relating to a tender offer for
or redemption of Underlying Securities, then the Call Notice shall
automatically expire and none of the Warrant Holder, the Warrant Agent or the
Trustee shall have any obligation with respect to the Call Notice. The
expiration of a Call Notice shall in no way affect the Warrant Xxxxxx's right
to deliver a Call Notice at a later date. The Call Price for a call in
connection with a tender offer or redemption shall be deducted from the
proceeds of a tender offer or a redemption by the Trust pursuant to Section
5(h)(i) or Section 5(h)(iii), as applicable, of the Series Supplement.
Section 1.2 Transfer of Certificates. As soon as practicable after
each surrender of Call Warrants in whole or in part on the Call Date and upon
satisfaction of all other requirements described in the Call Warrants and in
Section 1.1 hereof, the Warrant Agent shall instruct the Trustee as follows:
(a) if Call Warrants are being exercised by any Warrant Holder
other than the Depositor or any Affiliate of the Depositor, to cause
the Called Certificates to reflect the Warrant Holder's beneficial
ownership of such Certificates and if such Call Notice is also deemed
to be a notice of Optional Exchange (and the Warrant Holder otherwise
complies with the provisions of Section 7(a) and Section 7(b) of the
Series Supplement), to cause a distribution of Underlying Securities
to the Warrant Holder in accordance with Section 7(a) of the Series
Supplement, provided, however, that if such Call Notice and Optional
Exchange is in connection with a tender offer or a redemption, the
Warrant Agent shall instruct the Trustee to distribute to the
exercising Warrant Holder the excess of the tender offer or
redemption proceeds over the Call Price pursuant to Section 5(h)(iii)
or Section 7(g)(iii), as applicable, of the Series Supplement, or
(b) if the Call Warrants are being exercised by the Depositor
or any Affiliate of the Depositor, to cause the Called Underlying
Securities to be sold pursuant to Section 13 of the Series Supplement
and to distribute the proceeds of such sale to the Warrant Holder.
If such exercise is in part only, the Warrant Agent shall (i) in the
case of a Global Call Warrant, cause the Registered Warrant Amount to be
decreased to reflect the outstanding Call Warrants of the Warrant Holder and
(ii) in the case of a Certificated Call Warrant, instruct the Trustee to
authenticate new Call Warrants of like tenor, representing the outstanding
Call Warrants of the Warrant Holder, and the Warrant Agent shall deliver such
Call Warrants to the Warrant Holder.
In each case, the Trustee shall act in accordance with such
instructions.
B-3
Section 1.3 Cancellation and Destruction of Call Warrants. All Call
Warrants surrendered to the Warrant Agent for the purpose of exercise (in
whole or in part) pursuant to Section 1.1 and actually exercised, or for the
purpose of transfer or exchange pursuant to Article IV, shall be cancelled by
the Warrant Agent, and no Call Warrant (other than that reflecting any such
transfer or exchange) shall be issued in lieu thereof. The Warrant Agent shall
destroy all cancelled Call Warrants.
Section 1.4 No Rights as Holder of Certificates Conferred by Call
Warrants. Prior to the exercise thereof, Call Warrants shall not entitle the
Warrant Holder to any of the rights of a holder of the Certificates,
including, without limitation, the right to receive the payment of any amount
on or in respect of the Certificates or to enforce any of the covenants of the
Trust Agreement.
Section 1.5 Pro Rata Reduction of Call Warrants if Partial Redemption
of Underlying Securities. If Underlying Securities are redeemed in part by the
Underlying Securities Issuer and the Warrant Holders do not exercise their
Call Rights in connection with such partial redemption, the Warrant Amount or
Registered Warrant Amount, as the case may be, held by each Warrant Holder
shall be reduced proportionately so that the aggregate amount of Class A-1
Certificates callable by Call Warrants shall equal the amount of outstanding
Class A-1 Certificates after giving effect to such partial redemption and the
aggregate Certificate Principal Balance of Class A-2 Certificates callable by
Call Warrants shall equal the outstanding Certificate Principal Balance of
Class A-2 Certificates after giving effect to such partial redemption. The
Warrant Agent shall make such adjustments to its records as shall be necessary
to reflect such reductions and shall notify the Depository or each Warrant
Holder, as the case may be, of such adjustments.
ARTICLE II
THE CALL WARRANTS
Section 2.1 The Call Warrants.
(a) The Call Warrants shall initially be issued as one or more
Global Call Warrants in definitive, fully registered form without
coupons, and DTC shall be the Depository. Upon issuance, the Global
Call Warrants shall initially be deposited with the Trustee in its
capacity as custodian on behalf of DTC. Such Global Call Warrants
shall initially be registered in the name of Cede & Co. or another
nominee designated by DTC. Global Call Warrants shall clear and
settle in book-entry only form through the facilities of the
Depository. Unless and until it is exchanged in whole or in part for
Certificated Call Warrants, a Global Call Warrant may not be
transferred except as a whole by the Depository for such Global Call
Warrant to a nominee of such Depository, or by a nominee of such
Depository to such Depository or another nominee of such Depository,
or by such Depository or any such nominee to a successor of such
Depository or a nominee of such successor. The Registered Warrant
Amount of Call Warrants may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as
custodian for DTC for such Global Call Warrant, as provided in this
Section.
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(b) The Warrant Agent shall register the transfer or exchange
of any Global Call Warrant without requiring any additional
certification.
(c) Interests of beneficial owners in a Global Call Warrant may
be transferred in accordance with the rules and procedures of DTC and
any other applicable Depositories. In connection with any exchange of
beneficial ownership interests in a Global Call Warrant for
Certificated Call Warrants pursuant to Section 2.3, the Warrant Agent
shall reflect on its books and records the date of such exchange and
a decrease in the Registered Warrant Amount of such Global Call
Warrant in an amount equal to the Warrant Amount of the beneficial
ownership interests in such Global Call Warrant being exchanged for
Certificated Call Warrants.
Section 2.2 Cancellation. All Call Warrants presented and
surrendered for payment, transfer or exchange shall be delivered to the
Warrant Agent and shall be promptly canceled by it. No Call Warrants shall be
authenticated in lieu of or in exchange for any Call Warrants canceled as
provided in this Section 2.2.
Section 2.3 Certificated Call Warrants. Any Global Call Warrant
representing Call Warrants shall be exchangeable for Certificated Call
Warrants only if (i) the Depository advises the Depositor in writing that it
is no longer willing or able to properly discharge its responsibilities with
respect to the Call Warrants and the Depositor is unable to locate a qualified
successor within 60 calendar days or (ii) the Depositor, at its option,
advises the Trustee in writing that it elects to terminate the book-entry
system through the Depository. Any Global Call Warrant that is exchangeable
pursuant to the preceding sentence will be exchangeable for Certificated Call
Warrants of like tenor and Warrant Amount, as applicable, in any authorized
denomination or denominations and registered in the names of such Person or
Persons as the Depository shall direct. Upon such exchange, the Warrant Agent
shall execute and authenticate such Certificated Call Warrants and register
the same in the name of, and deliver the same to, such Person or Persons
consistent with the provisions hereof.
ARTICLE III
RESTRICTIONS ON TRANSFER
Section 3.1 Restrictive Legends. Except as otherwise permitted by
this Article III, each Call Warrant (including each Call Warrant issued upon
the transfer of any Call Warrant) shall be issued with a legend in
substantially the following form:
"THIS CALL WARRANT (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE TRANSFERRED, SOLD OR
OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION UNDER SUCH ACT IS IN
EFFECT OR PURSUANT TO AN EXEMPTION THEREFROM UNDER SUCH ACT. THE CALL
WARRANT REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN COMPLIANCE WITH THE
CONDITIONS SPECIFIED HEREIN.
EACH PURCHASER OF THIS CALL WARRANT IS HEREBY NOTIFIED THAT THE SELLER OF
THIS CALL WARRANT MAY BE RELYING ON THE EXEMPTION
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FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A THEREUNDER."
Section 3.2 Notice of Proposed Transfer. Prior to any transfer of any
Certificated Call Warrant or portion thereof, the Warrant Holder will give
five (5) Business Days (or such lesser period acceptable to the Warrant Agent)
prior written notice to the Warrant Agent of such Warrant Xxxxxx's intention
to effect such transfer.
ARTICLE IV
REGISTRATION AND TRANSFER OF CALL WARRANTS, ETC.
Section 4.1 Warrant Register; Ownership of Call Warrants. The Warrant
Agent will keep a register in which the Warrant Agent will provide for the
registration of Call Warrants and the registration of transfers of Call
Warrants representing numbers of Call Warrants. Prior to due presentment of a
Call Warrant for registration of transfer, the Depositor, the Trustee, the
Warrant Agent and any agent of the Depositor, the Trustee or the Warrant Agent
may treat the Person in whose name any Call Warrant is registered as the owner
of such Call Warrant for any purposes whatsoever, and none of the Depositor,
the Trustee, the Warrant Agent or any agent of the Depositor, the Trustee or
the Warrant Agent shall be affected by notice to the contrary.
None of the Depositor, the Trustee, the Warrant Agent or any agent
of the Depositor, the Trustee or the Warrant Agent shall have any
responsibility or liability for any aspect of the records relating to, or
payments made on account of, beneficial ownership interests of a Global Call
Warrant or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
Notwithstanding the foregoing, with respect to any Global Call
Warrant, nothing herein shall prevent the Depositor, the Trustee, the Warrant
Agent or any agent of the Depositor, the Trustee or the Warrant Agent from
giving effect to any written certification, proxy or other authorization
furnished by any Depository, as a Warrant Holder, with respect to such Global
Call Warrant or impair, as between such Depository and owners of beneficial
interests in such Global Call Warrant, the operation of customary practices
governing the exercise of the rights of such Depository (or its nominee) as
Warrant Holder of such Global Call Warrant.
Section 4.2 Transfer and Exchange of Call Warrants. (a) No Call
Warrant or any beneficial interest therein may be offered, resold, assigned or
otherwise transferred (including by pledge or hypothecation) unless such
offer, resale, assignment or transfer is to a qualified institutional buyer (a
"QIB"), as such term is defined in Rule 144A promulgated under the Securities
Act ("Rule 144A"), in accordance with Rule 144A, and in accordance with any
applicable securities laws of any state of the United States and other
jurisdictions. Prior to any offer, resale, assignment or transfer of any
Certificated Call Warrant, the prospective transferee and the prospective
transferor shall be required to deliver to the Trustee an executed copy of an
Investment Letter with respect to the Certificated Call Warrants to be
transferred substantially in the form of Exhibit A hereto. Each prospective
transferee of any Certificated Call Warrants shall acknowledge, represent and
agree (and each prospective transferee of any beneficial interest in a Global
Call Warrant shall be deemed to acknowledge, represent and agree) as follows:
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(1) The transferee (x) is a QIB, (y) is aware that the sale to it is
being made in reliance on Rule 144A and (z) is acquiring such Call
Warrants for its own account or for the account of a QIB.
(2) The transferee understands that the Call Warrants are being offered
in a transaction not involving any public offering in the United
States within the meaning of the Securities Act, and that the Call
Warrants have not been and will not be registered under the
Securities Act.
(3) The transferee agrees that (A) if in the future it decides to
offer, resell, pledge or otherwise transfer the Call Warrants prior
to the Resale Restriction Termination Date, such Call Warrants
shall only be offered, resold, assigned or otherwise transferred to
a QIB, in accordance with Rule 144A, and in accordance with any
applicable securities laws of any state of the United States and
other jurisdictions and (B) the transferee will, and each
subsequent holder is required to, notify any subsequent purchaser
of such Call Warrants from it of the resale restrictions referred
to in clause (A) above.
(b) Upon surrender of any Certificated Call Warrant for registration
of transfer or for exchange to the Warrant Agent, the Warrant Agent shall
(subject to compliance with Article III) promptly execute and deliver,
and cause the Trustee, on behalf of the Trust, to execute and deliver, in
exchange therefor, a new Certificated Call Warrant of like tenor and
evidencing a like number of Call Warrants, in the name of such Warrant
Holder or as such Warrant Holder (upon payment by such Warrant Holder of
any applicable transfer taxes or government charges) may direct; provided
that as a condition precedent for transferring the Call Warrants, the
prospective transferee shall deliver to the Trustee and the Depositor an
executed copy of the Investment Letter (set forth as Exhibit A hereto) if
the same is required pursuant to the provisions of clause (a) above.
Section 4.3 Replacement of Call Warrants. Upon receipt of evidence
reasonably satisfactory to the Warrant Agent of the loss, theft, destruction
or mutilation of any Call Warrant and, in the case of any such loss, theft or
destruction of any Call Warrant, upon delivery of an indemnity bond in such
reasonable amount as the Warrant Agent may determine, or, in the case of any
such mutilation, upon the surrender of such Call Warrant for cancellation to
the Warrant Agent, the Warrant Agent shall execute and deliver, and cause the
Trustee, on behalf of the Trust, to execute and deliver, in lieu thereof, a
new Call Warrant of like tenor bearing a number not contemporaneously
outstanding.
Section 4.4 Execution and Delivery of Call Warrants by Trustee. The
Trustee, on behalf of the Trust, hereby agrees (subject to compliance with
Article III) to execute and deliver such new Call Warrants issued in
accordance with Section 1.2 or this Article IV as the Warrant Agent shall
request in accordance herewith.
Section 4.5 Additional Call Warrants. The Trustee shall execute and
deliver, in a manner consistent with Article II hereof, additional Call
Warrants on behalf of the Trust with respect to any additional Certificates
issued by the Trust following the sale of additional
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Underlying Securities to the Trust, in accordance with the provisions
of Section 3(d) of the Series Supplement.
ARTICLE V
DEFINITIONS
As used herein, unless the context otherwise requires, the
following terms have the following respective meanings:
"Business Day": As defined in the Trust Agreement.
"Call Date": Any Business Day (i) on or after December 22, 2008,
(ii) after the Underlying Securities Issuer announces that it will redeem,
prepay or otherwise make an unscheduled payment on the Underlying Securities,
(iii) after the Trustee notifies the Certificateholders of any proposed sale
of the Underlying Securities pursuant to the provisions of the Series
Supplement or (iv) on which the Underlying Securities Issuer or an affiliate
thereof consummates a tender offer for some or all of the Underlying
Securities.
"Call Notice": As defined in Section 1.1(a)(i) hereof.
"Call Price": For each related Call Date, (i) in the case of the
Class A-1 Certificates, the sum of (x) 100% of the outstanding Certificate
Principal Balance of the Class A-1 Certificates being purchased pursuant to
the exercise of the Call Warrants, plus any accrued and unpaid interest on
such amount to, but excluding, the Call Date and (y) in the event a Call
Warrant exercises its right to call Class A-1 Certificates with a settlement
date occurring prior to December 22, 2008, an additional amount, equal to
$1.50 per Class A-1 Certificate, and (ii) in the case of the Class A-2
Certificates, the present value of all amounts that would otherwise have been
payable on the Class A-2 Certificates being purchased pursuant to the exercise
of the Call Warrants for the period from the related Call Date to the Final
Scheduled Distribution Date using a discount rate of 8.00% per annum, assuming
no delinquencies, deferrals, redemptions or prepayments on the Underlying
Securities shall occur after the related Call Date.
"Call Warrant": As defined in the recitals.
"Called Certificates": As defined in Section 1.1(b)
hereof.
"Called Underlying Securities": As defined in Section
1.1(b) hereof.
"Certificated Call Warrant": Any Call Warrant in definitive,
physical form registered in the name of a Person other than the Depository or
its nominee.
"Closing Date": December 22, 2003.
"Depositor": As defined in the recitals.
"Depositor Order": As defined in the Trust Agreement.
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"Depository": DTC initially, or such other depository
appointed by the Depositor.
"DTC": The Depository Trust Company, a limited purpose
trust company organized under the laws of the State of New York,
and any of its successors or assigns.
"Global Call Warrant": A registered Call Warrant in
the name of the Depository or its nominee.
"Person": Any individual, corporation, partnership, joint venture,
association, joint stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or political
subdivision thereof.
"QIB": As defined in Section 4.2 hereof.
"Rating Agencies": Standard & Poor's Ratings Services,
a division of The XxXxxx-Xxxx Companies, Inc. and Xxxxx'x
Investors Service, Inc. and any of their respective successors.
"Registered Warrant Amount": The Warrant Amount
represented by the Global Call Warrants.
"Responsible Officer": As defined in the Trust
Agreement.
"Rule 144A": As defined in Section 4.2.
"Securities Act": The Securities Act of 1933, or any
similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the
time.
"Trust": As defined in the recitals.
"Trust Agreement": As defined in the recitals.
"Trustee": As defined in the recitals, or any
successor thereto under the Trust Agreement.
"Warrant Agent": As defined in the recitals, or any
successor thereto under this Warrant Agent Agreement.
"Warrant Agent Agreement": As defined in the recitals.
"Warrant Amount": With respect to any Warrant Holder, the number of
Call Warrants relating to Class A-1 Certificates and Call Warrants relating to
the Class A-2 Certificates, held by such Warrant Holder.
"Warrant Holder": As defined in Section 1.1(a) hereof.
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ARTICLE VI
WARRANT AGENT
Section 6.1 Limitation on Liability. The Warrant Agent shall be
protected and shall incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its administration of the Call
Warrants in reliance upon any instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document in good faith believed by it
to be genuine and to be signed, executed and, where necessary, verified and
acknowledged, by the proper Person or Persons.
Section 6.2 Duties of Warrant Agent. The Warrant Agent undertakes
only the specific duties and obligations imposed hereunder upon the following
terms and conditions, by all of which the Depositor, the Trust, the Trustee
and each Warrant Holder shall be bound:
(a) The Warrant Agent may consult with legal counsel (who may
be legal counsel for the Depositor), and the opinion of such counsel
shall be full and complete authorization and protection to the
Warrant Agent as to any action taken or omitted by it in good faith
and in accordance with such opinion, provided the Warrant Agent shall
have exercised reasonable care in the selection by it of such
counsel.
(b) Whenever in the performance of its duties hereunder, the
Warrant Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Depositor or the Trustee prior
to taking or suffering any action hereunder, such fact or matter may
be deemed to be conclusively proved and established by a Depositor
Order or a certificate signed by a Responsible Officer of the Trustee
and delivered to the Warrant Agent; and such certificate shall be
full authorization to the Warrant Agent for any action taken or
suffered in good faith by it hereunder in reliance upon such
certificate.
(c) The Warrant Agent shall be liable hereunder only for its
own negligence, willful misconduct or bad faith.
(d) The Warrant Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained herein or be
required to verify the same, but all such statements and recitals are
and shall be deemed to have been made by the Trust and the Depositor
only.
(e) The Warrant Agent shall not have any responsibility in
respect of and makes no representation as to the validity of the Call
Warrants or the execution and delivery thereof (except the due
execution hereof by the Warrant Agent); nor shall it be responsible
for any breach by the Trust of any covenant or condition contained in
the Call Warrants; nor shall it by any act thereunder be deemed to
make any representation or warranty as to the Certificates to be
purchased thereunder.
(f) The Warrant Agent is xxxxxx authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from the Chairman of the Board, the Chief Executive
Officer, Chief Financial Officer, Chief Operating Officer, President,
a Vice President, a Senior Vice President, a Managing Director, its
Treasurer,
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an Assistant Treasurer, its Secretary or an Assistant Secretary
of the Depositor, and any Responsible Officer of the Trustee, and to
apply to such officers for advice or instructions in connection with
its duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with
instructions of any such officer.
(g) The Warrant Agent and any shareholder, director, officer or
employee of the Warrant Agent may buy, sell or deal in any of the
Call Warrants or other securities of the Trust or otherwise act as
fully and freely as though it were not Warrant Agent hereunder, so
long as such persons do so in full compliance with all applicable
laws. Nothing herein shall preclude the Warrant Agent from acting in
any other capacity for the Trust, the Depositor or for any other
legal entity.
(h) The Warrant Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents.
(i) The Warrant Agent shall act solely as the agent of the
Trust hereunder. The Warrant Agent shall not be liable except for the
failure to perform such duties as are specifically set forth herein,
and no implied covenants or obligations shall be read into the Call
Warrants against the Warrant Agent, whose duties shall be determined
solely by the express provisions thereof. The Warrant Agent shall not
be deemed to be a fiduciary.
(j) The Warrant Agent shall not be responsible for any failure
on the part of the Trustee to comply with any of its covenants and
obligations contained herein.
(k) The Warrant Agent shall not be under any obligation or duty
to institute, appear in or defend any action, suit or legal
proceeding in respect hereof, unless first indemnified to its
satisfaction, but this provision shall not affect the power of the
Warrant Agent to take such action as the Warrant Agent may consider
proper, whether with or without such indemnity. The Warrant Agent
shall promptly notify the Depositor and the Trustee in writing of any
claim made or action, suit or proceeding instituted against it
arising out of or in connection with the Call Warrants.
(l) The Trustee will perform, execute, acknowledge and deliver
or cause to be performed, executed, acknowledged and delivered all
such further acts, instruments and assurances as may be required by
the Warrant Agent in order to enable it to carry out or perform its
duties hereunder.
(m) Upon request of a Warrant Holder, the Warrant Agent shall
furnish to such Warrant Holder and/or a prospective purchaser
designated by such Warrant Holder the information required to be
delivered under Rule 144A(d)(4) under the Securities Act, to the
extent that such information is in the possession of the Warrant
Agent.
Section 6.3 Change of Warrant Agent. The Warrant Agent may resign and
be discharged from its duties hereunder upon thirty (30) days notice in
writing mailed to the Depositor and the Trustee by registered or certified
mail, and to the Warrant Holders by first-class mail at the expense of the
Depositor; provided that no such resignation or discharge shall become
effective until a successor Warrant Agent shall have been appointed hereunder.
The
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Depositor may remove the Warrant Agent or any successor Warrant Agent upon
thirty (30) days notice in writing, mailed to the Warrant Agent or successor
Warrant Agent, as the case may be, and to the Warrant Holders by first-class
mail; provided further that no such removal shall become effective until a
successor Warrant Agent shall have been appointed hereunder. If the Warrant
Agent shall resign or be removed or shall otherwise become incapable of
acting, the Depositor shall promptly appoint a successor to the Warrant Agent,
which may be designated as an interim Warrant Agent. If an interim Warrant
Agent is designated, the Depositor shall then appoint a permanent successor to
the Warrant Agent, which may be the interim Warrant Agent. If the Depositor
shall fail to make such appointment of a permanent successor within a period
of thirty (30) days after such removal or within sixty (60) days after
notification in writing of such resignation or incapacity by the resigning or
incapacitated Warrant Agent or by the Warrant Holder, then the Warrant Agent
or registered Warrant Holder may apply to any court of competent jurisdiction
for the appointment of such a successor. Any successor to the Warrant Agent
appointed hereunder must be rated in one of the four highest rating categories
by the Rating Agencies. Any entity which may be merged or consolidated with or
which shall otherwise succeed to substantially all of the trust or agency
business of the Warrant Agent shall be deemed to be the successor Warrant
Agent without any further action.
Section 6.4 Warrant Agent Transfer Fee. The Warrant Agent will assess
a fee of $50.00 upon the issue of any new Call Warrant, such fee to be
assessed upon the new Warrant Holder.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Remedies. The remedies at law of the Warrant Holder in
the event of any default or threatened default by the Warrant Agent in the
performance of or compliance with any of the terms of the Call Warrants are
not and will not be adequate and, to the full extent permitted by law, such
terms may be specifically enforced by a decree for the specific performance of
any agreement contained herein or by an injunction against a violation of any
of the terms thereof or otherwise.
Section 7.2 Limitation on Liabilities of Warrant Holder. Nothing
contained in this Warrant Agent Agreement shall be construed as imposing any
obligation on the Warrant Holder to purchase any of the Certificates except in
accordance with the terms thereof.
Section 7.3 Notices. All notices and other communications under this
Warrant Agent Agreement shall be in writing and shall be delivered, or mailed
by registered or certified mail, return receipt requested, by a nationally
recognized overnight courier, postage prepaid, addressed (a) if to any Warrant
Holder, at the registered address of such Warrant Holder as set forth in the
register kept by the Warrant Agent or (b) if to the Warrant Agent, to 000 Xxxx
Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust or to
such other address notice of which the Warrant Agent shall have given to the
Warrant Holder and the Trustee or (c) if to the Trust or the Trustee, to the
Corporate Trust Office (as set forth in the Trust Agreement); provided that
the exercise of any Call Warrants shall be effective in the manner provided in
Article I. The Warrant Agent shall forward to the Warrant Holder any notices
received by it
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hereunder or pursuant to the Trust Agreement or this Agreement by facsimile
within one Business Day of receipt thereof.
Section 7.4 Amendment. (a) This Warrant Agent Agreement may be
amended from time to time by the Depositor, the Trustee and the Warrant Agent
without the consent of any Warrant Holder, upon receipt of an opinion of
counsel satisfactory to the Warrant Agent that the provisions hereof have been
satisfied and that such amendment would not cause the Trust to be taxed as an
association or publicly traded partnership taxable as a Corporation under the
Code, for any of the following purposes: (i) to cure any ambiguity or to
correct or supplement any provision herein which may be defective or
inconsistent with any other provision herein or to provide for any other terms
or modify any other provisions with respect to matters or questions arising
under the Call Warrant which shall not adversely affect in any material
respect the interests of the Warrant Holder or any holder of a Certificate;
provided, however, that no amendment altering the timing or amount of any
payment of the Call Price shall be effected without the consent of each
Warrant Holder; or (ii) to evidence and provide for the acceptance of
appointment hereunder of a Warrant Agent other than U.S. Bank Trust National
Association.
(b) Without limiting the generality of the foregoing, the Call
Warrants may also be modified or amended from time to time by the
Depositor, the Trustee and the Warrant Agent with the consent of
Warrant Holders of 66-2/3% of each of the Call Warrants related to
the Class A-1 Certificates and the Call Warrants related to the Class
A-2 Certificates, upon receipt of an opinion of counsel satisfactory
to the Warrant Agent that the provisions hereof (including, without
limitation, the following proviso) have been satisfied, for the
purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of the Call Warrants or of
modifying in any manner the rights of the Warrant Holders; provided,
however, that no such amendment shall (i) adversely affect in any
material respect the interests of holders of Certificates without the
consent of the holders of Certificates evidencing not less than the
Required Percentage--Amendment of the aggregate Voting Rights of such
affected Certificates (as such terms are defined in the Trust
Agreement) and without written confirmation from the Rating Agencies
that such amendment will not result in a downgrading or withdrawal of
its rating of the Certificates; (ii) alter the terms on which Call
Warrants are exercisable or the amounts payable upon exercise of a
Warrant without the consent of the holders of Certificates evidencing
not less than 100% of the aggregate Voting Rights of such affected
Certificates and 100% of the affected Warrant Holders or (iii) reduce
the percentage of aggregate Voting Rights required by (i) or (ii)
without the consent of the holders of all such affected Certificates.
Notwithstanding any other provision of this Warrant Agent Agreement,
this Section 7.4(b) shall not be amended without the consent of 100%
of the affected Warrant Holders.
(c) Promptly after the execution of any such amendment or
modification, the Warrant Agent shall furnish a copy of such
amendment or modification to each Warrant Holder, to the Trustee and
to the Rating Agencies. It shall not be necessary for the consent of
Warrant Holders or holders of Certificates under this Section to
approve the particular form of any proposed amendment, but it shall
be sufficient if such consent shall approve the substance thereof.
The manner of obtaining such consents and of evidencing
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the authorization of the execution thereof shall be subject to
such reasonable regulations as the Warrant Agent may prescribe.
Section 7.5 Expiration. The right to exercise the Call Warrants shall
expire on the earliest to occur of (a) the cancellation thereof, (b) the
termination of the Trust Agreement, or (c) the liquidation, disposition, or
maturity of all of the Underlying Securities.
Section 7.6 Descriptive Headings. The headings in this Warrant Agent
Agreement are for purposes of reference only and shall not limit or otherwise
affect the meaning hereof.
Section 7.7 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED
BY, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT
OF LAWS.
Section 7.8 Judicial Proceedings; Waiver of Jury. Any judicial
proceeding brought against the Trust, the Trustee or the Warrant Agent with
respect to this Warrant Agent Agreement may be brought in any court of
competent jurisdiction in the County of New York, State of New York or of the
United States of America for the Southern District of New York and, by
execution and delivery of the Call Warrants, the Trustee on behalf of the
Trust and the Warrant Agent (a) accept, generally and unconditionally, the
nonexclusive jurisdiction of such courts and any related appellate court, and
irrevocably agree that the Trust, the Trustee and the Warrant Agent shall be
bound by any judgment rendered thereby in connection with this Warrant Agent
Agreement or the Call Warrants, subject to any rights of appeal, and (b)
irrevocably waive any objection that the Trust, the Trustee or the Warrant
Agent may now or hereafter have as to the venue of any such suit, action or
proceeding brought in such a court or that such court is an inconvenient
forum.
Section 7.9 Nonpetition Covenant; No Recourse. Each of (i) the
Warrant Holder by its acceptance thereof, and (ii) the Warrant Agent agrees,
that it shall not (and, in the case of the Warrant Holder, that it shall not
direct the Warrant Agent to), until the date which is one year and one day
after the payment in full of the Certificates and all other securities issued
by the Trust, the Depositor or entities formed, established or settled by the
Depositor, acquiesce, petition or otherwise invoke or cause the Trust, the
Depositor, or any such other entity to invoke the process of the United States
of America, any State or other political subdivision thereof or any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government for the purpose of commencing or
sustaining a case by or against the Trust, the Depositor or any such other
entity under a federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator
or other similar official of the Trust, the Depositor or any such other entity
or all or any part of the property or assets of Trust, the Depositor or any
such other entity or ordering the winding up or liquidation of the affairs of
the Trust, the Depositor or any such other entity.
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IN WITNESS WHEREOF, the parties hereto have caused their names to
be signed hereto by their respective duly authorized officers as of the date
first above written.
XXXXXX ABS CORPORATION,
as Depositor
By:
--------------------------------
Name:
Title:
U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Trustee and Authenticating Agent
By:
----------------------------------
Name:
Title:
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Warrant Agent
By:
----------------------------------
Name:
Title:
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EXHIBIT C
FORM OF INVESTMENT LETTER
QUALIFIED INSTITUTIONAL BUYER AND ACCREDITED INVESTOR
Dated:
U.S. Bank Trust National Association,
as Trustee
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Brothers Inc.,
as Initial Purchaser
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx ABS Corporation,
as Depositor
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
In connection with our proposed purchase of $______________ aggregate
principal amount of Class A-2 Certificates (the "Class A-2 Certificates")
representing an interest in the Corporate Backed Trust Certificates,
Prudential Financial Note-Backed Series 2003-20 Trust (the "Trust"), the
undersigned, by executing this letter (the "Purchaser") confirms that:
1. Reference is made to the private placement memorandum, dated
[_______], 2003, including the schedules, exhibits and annexes, if any,
thereto, as supplemented or amended to the date hereof (the "Memorandum"),
relating to the Class A-2 Certificates. Capitalized terms used herein that are
not otherwise defined shall have the meanings ascribed thereto in the
Memorandum. The Purchaser has received a copy of the Memorandum and such other
information as the Purchaser deems necessary in order to make its investment
decision and the Purchaser has been provided the opportunity to ask questions
of, and receive answers from, the Depositor and the Initial Purchaser,
concerning the terms and conditions of the offering described in the
Memorandum. The Purchaser has received and understands the information
discussed above and understands that substantial risks are involved in an
investment in the Class A-2 Certificates. The Purchaser represents that, in
making its investment decision to acquire the Class A-2 Certificates, the
Purchaser has not relied on representations, warranties, opinions,
projections, financial or other information or analysis, if any, supplied to
it by any person or entity, including the Initial Purchaser, the Depositor or
the Trustee or any of their affiliates, except as expressly contained in the
Memorandum and in the other written information, if any, discussed above. The
Purchaser acknowledges that it has read and agreed to the matters stated on
pages 2 through 4 of such Memorandum and the information under the heading
"Transfer
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Restrictions." The Purchaser is purchasing the Class A-2 Certificates for
investment purposes and not with a view to, or for, the offer or sale in
connection with a public distribution or in any other manner that would
violate the Securities Act or the securities or blue sky laws of any state of
the United States. The Purchaser has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of purchasing any of the Class A-2 Certificates. The Purchaser is aware
that it may be required to bear the substantial economic risk of an investment
in the Class A-2 Certificates for an indefinite period of time and such
Purchaser is able to bear such risk for an indefinite period. The Purchaser
has relied upon its own tax, legal and financial advisors in connection with
its decision to purchase the Class A-2 Certificates.
2. The Purchaser is not an "affiliate" (as defined in Rule 144 under
the Securities Act) of the Depositor and is either:
(i) (A) a "Qualified Institutional Buyer" (a "QIB"), (as defined in
Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"
and "Rule 144A")) and has delivered to you the certification contained herein
as to the fact that it is a QIB and (B) acquiring the Class A-2 Certificates
for its own account, for the account of an Accredited Investor (as defined in
Rule 501(a) under the Securities Act), or for the account of a QIB as to each
of which the Purchaser exercises sole investment discretion. The Purchaser is
aware that the Class A-2 Certificates are being sold to it in reliance on the
exemption from the provisions of Section 5 of the Securities Act provided by
Rule 144A; or
(ii) an Accredited Investor and, if the Class A-2 Certificates are to
be purchased for one or more accounts ("investor accounts") for which it is
acting as fiduciary or agent, each such investor account is an Accredited
Investor on a like basis or a QIB; in the normal course of its business, such
Purchaser invests in or purchases securities similar to the Class A-2
Certificates.
3. The Purchaser acknowledges that neither the Depositor nor the
Initial Purchaser, or any person representing the Depositor or the Initial
Purchaser, has made any representation to such purchaser with respect to the
Trust, the Underlying Securities or the offering or sale of any Class A-2
Certificates, other than the information contained in the Memorandum, which
has been delivered to the Purchaser and upon which the Purchaser is relying in
making an investment decision with respect to the Class A-2 Certificates.
Accordingly, the Purchaser acknowledges that no representation or warranty is
made by the Depositor or the Initial Purchaser as to the accuracy or
completeness of such materials.
4. The Purchaser understands that the Class A-2 Certificates are
being offered in a transaction not involving any public offering in the United
States within the meaning of the Securities Act, that the Class A-2
Certificates have not been and will not be registered under the Securities Act
or under the securities or blue sky laws of any state, and that (i) if in the
future it decides to offer, resell, pledge or otherwise transfer the Class A-2
Certificates, such Class A-2 Certificates shall only be offered, resold,
assigned or otherwise transferred (A) to the Trust, (B) pursuant to an
effective registration statement under the Securities Act, (C) to a QIB, in
accordance with Rule 144A or (D) to any person or entity (including an
Accredited Investor within the meaning of Rule 501(a) under the Securities
Act) pursuant to another available
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exemption from registration provided under the Securities Act, and, in each of
cases (A) through (D), in accordance with any applicable securities laws of
any state of the United States and other jurisdictions and (ii) the purchaser
will, and each subsequent holder is required to, notify any subsequent
purchaser of such Class A-2 Certificates from it of the resale restrictions
referred to in clause (i) above. Upon the transfer of Class A-2 Certificates
held in the form of global certificates to an Accredited Investor, the
transferor's interest in such global certificates shall be exchanged for a
Class A-2 Certificate in definitive form. Thereafter, upon transfer of a
definitive Class A-2 Certificate to a QIB, such Class A-2 Certificate may be
exchanged for a beneficial interest in a global certificate.
5. The Purchaser understands that each Class A-2 Certificate will,
unless otherwise agreed to by the Depositor and the Trustee, bear a legend
substantially to the following effect:
"THIS CLASS A-2 CERTIFICATE (OR ITS PREDECESSOR) HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT
BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A
REGISTRATION UNDER SUCH ACT IS IN EFFECT OR PURSUANT TO AN EXEMPTION
THEREFROM UNDER SUCH ACT. THE CLASS A-2 CERTIFICATE REPRESENTED
HEREBY MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF THE
SERIES SUPPLEMENT.
EACH PURCHASER OF THIS CLASS A-2 CERTIFICATE IS HEREBY NOTIFIED THAT
THE SELLER OF THIS CLASS A-2 CERTIFICATE MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER."
6. The Purchaser understands that no subsequent transfer of the Class
A-2 Certificates is permitted unless (A) such transfer is of a Class A-2
Certificate with a denomination of at least $100,000 and (B) it causes its
proposed transferee to provide to the Trustee and the Initial Purchaser a
letter substantially in the form of Exhibit C to the Series Supplement and
otherwise satisfactory to the Trustee and Initial Purchaser, as applicable, or
such other written statement as the Depositor shall prescribe.
7. The Purchaser agrees that if at some time in the future it wishes
to transfer or exchange any of the Class A-2 Certificates, it will not
transfer or exchange any of the Class A-2 Certificates unless such transfer or
exchange is in accordance with Section 5.04 of the Trust Agreement. The
Purchaser understands that any purported transfer of the Class A-2
Certificates (or any interest therein) in contravention of any of the
restrictions and conditions in the Trust Agreement, as applicable, shall be
void, and the purported transferee in such transfer shall not be recognized by
the Trust or any other Person as a Certificateholder, as the case may be, for
any purpose.
C-3
8. The purchaser (i) acknowledges that the Depositor, the Initial
Purchaser, the Trustee and others will rely upon the truth and accuracy of the
foregoing acknowledgments, representations and agreements and agrees that the
Depositor, the Initial Purchaser and the Trustee are irrevocably authorized to
produce this letter or a copy hereof to any interested party in any
administrative or legal proceeding or official inquiry with respect to the
matters covered hereby, and (ii) agrees that, if any of the acknowledgments,
representations, warranties and agreements made or deemed to have been made by
such purchaser's purchase of the Class A-2 Certificates are no longer
accurate, such purchaser shall promptly notify the Depositor and the Initial
Purchaser. If the purchaser is acquiring any Class A-2 Certificates as a
fiduciary or agent for one or more investor accounts, it represents that it
has sole investment discretion with respect to each such account and it has
full power to make the foregoing acknowledgments, representations and
agreements on behalf of each such account and that each such investor account
is eligible to purchase the Class A-2 Certificates.
Very truly yours,
By:
-------------------------------
Name:
Title:
C-4
