Exhibit 4.1
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STANDARD TERMS
TO
TRUST AGREEMENT
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National Financial Securities Corporation
Trust Certificates
June 2000 Edition
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TABLE OF CONTENTS
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RECITALS..................................................................................................... 4
STANDARD PROVISIONS.......................................................................................... 4
ARTICLE I.................................................................................................... 4
Section 1.01. Defined Terms.............................................................................. 4
Accounting Date......................................................................................... 4
Administrative Agent.................................................................................... 4
Administrative Cost..................................................................................... 4
Administrative Cost Rate................................................................................ 5
Advance................................................................................................. 5
Affiliate............................................................................................... 5
Asset Proceeds Account.................................................................................. 5
Available Distribution.................................................................................. 5
Beneficial Owner........................................................................................ 5
Benefit Plan Affidavit.................................................................................. 5
Benefit Plan Opinion.................................................................................... 5
Book-Entry Certificates................................................................................. 6
Business Day............................................................................................ 6
Certificate............................................................................................. 6
Certificate Principal Balance........................................................................... 6
Certificate Register" and "Certificate Registrar........................................................ 6
Class................................................................................................... 6
Closing Date............................................................................................ 6
Code.................................................................................................... 6
Corporate Trust Office.................................................................................. 6
Custodian............................................................................................... 6
Cut-off Date............................................................................................ 7
Deposited Assets........................................................................................ 7
Depository.............................................................................................. 7
Depository Participant.................................................................................. 7
Distribution Date....................................................................................... 7
Due Period.............................................................................................. 7
Eligible Account........................................................................................ 7
ERISA................................................................................................... 7
Fiscal Year............................................................................................. 8
Holders or Certificateholders........................................................................... 8
Net Rate................................................................................................ 8
Non-Recoverable Advance................................................................................. 8
Officer................................................................................................. 8
Opinion of Counsel...................................................................................... 8
Pass-Through Rate....................................................................................... 8
Paying Agent............................................................................................ 8
Percentage Interest..................................................................................... 8
Permitted Investments................................................................................... 9
Person.................................................................................................. 10
Plan.................................................................................................... 10
Plan Asset Regulations.................................................................................. 10
Plan Investor........................................................................................... 10
Private Certificate..................................................................................... 10
Purchase Price.......................................................................................... 10
Purchaser............................................................................................... 10
Qualified Institutional Buyer........................................................................... 11
Qualified Substitute Underlying Security................................................................ 11
Rating.................................................................................................. 11
Record Date............................................................................................. 11
Redeeming Purchase...................................................................................... 11
Redemption Account...................................................................................... 11
Redemption Date......................................................................................... 11
Redemption Price........................................................................................ 11
Reserve Fund............................................................................................ 12
Rule 144A............................................................................................... 12
Rule 144A Agreement..................................................................................... 12
Rule 144A Certificates.................................................................................. 12
Principal Balance....................................................................................... 12
Sales Agreement......................................................................................... 12
Securities Act.......................................................................................... 12
Seller.................................................................................................. 12
Senior Percentage....................................................................................... 12
Series.................................................................................................. 12
Standard Terms.......................................................................................... 12
Terminating Purchase.................................................................................... 12
Termination Account..................................................................................... 12
Termination Price....................................................................................... 13
Transferee Agreement.................................................................................... 13
Trust................................................................................................... 13
Trust Agreement......................................................................................... 13
Trust Estate............................................................................................ 13
Trustee................................................................................................. 13
UCC..................................................................................................... 13
Underlying Security Indenture........................................................................... 13
Underlying Security or Underlying Securities............................................................ 13
Underlying Security Event of Default.................................................................... 13
Underlying Security Issuer.............................................................................. 14
Underlying Security Trustee............................................................................. 14
Underlying Security Schedule............................................................................ 14
Unpaid Principal Balance................................................................................ 14
Voting Rights........................................................................................... 14
ARTICLE II................................................................................................... 15
Section 2.01. Trust Assets............................................................................... 15
Section 2.02. Acceptance by the Trustee.................................................................. 15
Section 2.03. Purchase or Substitution of Underlying Securities by the Seller or the Depositor........... 16
Section 2.04. Representations and Warranties of the Depositor............................................ 18
ARTICLE III.................................................................................................. 19
Section 3.01. Asset Proceeds Account..................................................................... 19
Section 3.02. Advances by Trustee........................................................................ 21
ARTICLE IV................................................................................................... 21
Section 4.01. Statements to Certificateholders........................................................... 21
Section 4.02. Compliance with Withholding Requirements................................................... 22
Section 4.03. Reports of Certificate Principal Balances to The Depository Trust Depositor................ 22
Section 4.04. Preparation of Regulatory Reports.......................................................... 23
ARTICLE V.................................................................................................... 24
Section 5.01. The Certificates........................................................................... 24
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Section 5.02. Book-Entry Certificates................................................................... 24
Section 5.03. Registration of Transfer and Exchange of Certificates..................................... 25
Section 5.04. Restrictions on Transfer.................................................................. 26
Section 5.05. Mutilated, Destroyed, Lost or Stolen Certificates......................................... 28
Section 5.06. Persons Deemed Owners..................................................................... 28
Section 5.07. Appointment of Paying Agent............................................................... 29
ARTICLE VI.................................................................................................. 29
Section 6.01. Liability of the Depositor................................................................ 29
Section 6.02. Merger or Consolidation of the Depositor.................................................. 29
Section 6.03. Limitation on Liability of the Depositor and Others....................................... 29
ARTICLE VII................................................................................................. 30
Section 7.01. Duties of Trustee......................................................................... 30
Section 7.02. Certain Matters Affecting the Trustee..................................................... 31
Section 7.03. Trustee Not Liable for Certificates or Underlying Securities.............................. 33
Section 7.04. Trustee May Own Certificates.............................................................. 34
Section 7.05. Trustee's Fees and Expenses............................................................... 34
Section 7.06. Eligibility Requirements for Trustee...................................................... 34
Section 7.07. Resignation and Removal of the Trustee.................................................... 34
Section 7.08. Successor Trustee......................................................................... 35
Section 7.09. Merger or Consolidation of Trustee........................................................ 36
Section 7.10. Appointment of Co-Trustee or Separate Trustee............................................. 36
Section 7.11. Appointment of Custodians................................................................. 37
Section 7.12. Trustee May Enforce Claims Without Possession of Certificates............................. 37
ARTICLE VIII................................................................................................ 38
Section 8.01. Redemption................................................................................ 38
Section 8.02. Termination............................................................................... 38
Section 8.03. Procedure for Redemption or Termination................................................... 38
ARTICLE IX.................................................................................................. 40
Section 9.01. Designation of Trust Estate as Grantor Trust.............................................. 40
Section 9.02 Prohibited Activities..................................................................... 41
ARTICLE X................................................................................................... 41
Section 10.01. Amendment of Trust Agreement.............................................................. 41
Section 10.02. Counterparts.............................................................................. 42
Section 10.03. Limitation on Rights of Certificateholders................................................ 42
Section 10.04. Notices................................................................................... 44
Section 10.05. Severability of Provisions................................................................ 44
Section 10.06. Sale of Underlying Securities............................................................. 44
Section 10.07. Notice to Rating Agency................................................................... 45
Exhibit A Form of Trust Agreement
Exhibit B Form of Rule 144A Agreement - QIB Certification
Exhibit C Form of Transferee Agreement
Exhibit D Form of Benefit Plan Affidavit
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RECITALS
National Financial Securities Corporation (the "Depositor") has entered
into a Trust Agreement with a banking association or corporation as trustee (the
"Trustee") which Trust Agreement provides for the issuance of trust certificates
("Certificates") that in the aggregate evidence the entire interest in one or
more certificates or securities evidencing a debt obligation or ownership
interest therein and other property owned by the Trust created by such Trust
Agreement. These Standard Terms are a part of, and are incorporated by reference
into, the Trust Agreement.
STANDARD PROVISIONS
NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations and warranties made in the Trust Agreement and as hereinafter
set forth, the Depositor, the Trustee and, if applicable, the Administrative
Agent agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms. Except as otherwise specified herein or in
a Trust Agreement or as the context may otherwise require, whenever used in this
Agreement, the following words and phrases shall have the meanings specified in
this Article. Capitalized words and phrases used herein but not defined herein
shall, when applied to a Trust, have the meanings set forth in the Underlying
Security Indenture relating to such Trust as in effect on the date of this
Agreement. Unless otherwise specified, all calculations described herein shall
be made on the basis of a 360-day year consisting of twelve 30-day months.
"Accounting Date": With respect to each Distribution Date, the second
Business Day immediately preceding
such Distribution Date].
"Administrative Agent": The Person, if any, designated as such in the
Trust Agreement to perform certain administrative functions with respect to the
Trust as set forth in the Trust Agreement.
"Administrative Cost":: The costs and expenses payable with respect to
the Trustee, Administrator, if any, or others, as set forth in the Trust
Agreement.
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"Administrative Cost Rate":": The rate, if any, set forth in the Trust
Agreement. If no such rate is set forth in the Trust Agreement, the
"Administrative Cost Rate" will be 0.00%.
"Advance": As to any Underlying Security, any advance of principal and
interest or expenses made by the
Trustee.
"Affiliate": Any person or entity controlling, controlled by or under
common control with the Depositor or Trustee. "Control" means the power to
direct the management and policies of a person or entity, directly or
indirectly, whether through ownership of voting securities, by contract or
otherwise. "Controlling" and "controlled" shall have meanings correlative to the
foregoing.
"Asset Proceeds Account": The account or accounts created and
maintained for a Trust pursuant to Section 3.02 hereof.
"Available Distribution": Unless otherwise provided in the Trust
Agreement, on each Distribution Date the Available Distribution shall equal the
sum of the following:
(a) payments or distributions due during the preceding Due
Period, to the extent paid by the Underlying Security Issuer or
advanced by the Trustee; and
(b) all other payments received by the Trust in connection with
any Deposited Assets during the related Due Period, less unreimbursed
Advances with respect to the Deposited Assets;
minus the Trustee Fee and Non-Recoverable Advances to the extent required to be
reimbursed.
"Beneficial Owner": With respect to a Book-Entry Certificate, the
Person who is registered as owner of that Certificate in the books of the
Depository for that Certificate or in the books of a Person maintaining an
account with such Depository.
"Benefit Plan Affidavit": An affidavit substantially in the form of
Exhibit D hereto.
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"Benefit Plan Opinion": An Opinion of Counsel satisfactory to the
Trustee (and upon which the Depositor and the Trustee are authorized to rely) to
the effect that the proposed transfer will not (a) cause the assets of the Trust
to be regarded as plan assets for purposes of the Plan Asset Regulations, (b)
give rise to any fiduciary duty under ERISA, on the part of the Depositor or the
Trustee, or (c) result in, or be treated as, a prohibited transaction under
Sections 406 or 407 of ERISA or Section 4975 of the Code.
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Obtaining a Benefit Plan Opinion shall not be a cost or expense of the Depositor
or the Trustee.
"Book-Entry Certificates": The Classes of Certificates, if any,
specified as such in the Trust Agreement for a Series.
"Business Day": Any day that is not a Saturday, Sunday, holiday, or
other day on which commercial banking institutions in the city and state in
which the Corporate Trust Office (and the office of the Custodian, if any) are
located are authorized or obligated by law or executive order to be closed.
"Certificate": Any Certificate designated in the Trust Agreement.
"Certificate Principal Balance": With respect to each Class of
Certificates, on any Distribution Date, the aggregate principal amount, if any,
of such Class of Certificates immediately prior to such Distribution Date (or in
the case of the first Distribution Date, an amount equal to the aggregate
initial principal amount of such Class of Certificates as of the Closing Date)
net of the amounts to be applied on such Distribution Date to reduce the
aggregate principal amount of such Class of Certificates in accordance with the
Trust Agreement.
"Certificate Register" and "Certificate Registrar": The register
maintained and the registrar appointed pursuant to Section 5.01 hereof.
"Class": Collectively, all of the Certificates bearing the same
designation.
"Closing Date": The date on which Certificates are issued by a Trust as
set forth in the related Trust Agreement.
"Code": The Internal Revenue Code of 1986, as amended.
"Corporate Trust Office": The principal corporate trust office of the
Trustee at which at any particular time its corporate trust business shall be
administered.
"Custodian": The Trustee or the agent for the Trustee identified in the
Trust Agreement which shall hold all or a portion of the Deposited Assets, or
documents relating thereto, with respect to a Series.
"Cut-off Date": The date specified as such in the Trust Agreement.
"Deposited Assets": The debt obligations assigned or pledged to the
Trustee and certain other assets transferred to the Trustee by the Depositor as
described in the Trust Agreement.
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"Depository": The Depository Trust Company, or any successor
organization or any other organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended, and
the regulations of the Securities and Exchange Commission thereunder.
"Depository Participant": A broker, dealer, bank, other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"Distribution Date": The dates or dates set forth in the Trust
Agreement.
"Due Period": With respect to any Distribution Date, the period set
froth in the Trust Agreement.
"Eligible Account": Either (a) an account or accounts maintained with a
federal or state chartered depository institution or trust company the long-term
or short-term unsecured debt obligations of which (or, in the case of a
depository institution or trust company that is the principal subsidiary of a
holding company, the long-term or short-term unsecured debt obligations of such
holding company) are rated by the Rating Agency in one of its two highest
long-term rating categories or one of its two highest short-term ratings with
respect to obligations maturing in less than 30 days or in highest short-term
rating with respect to obligations maturing in more than 30 days at the time any
amounts are held in deposit therein, or (b) a trust account or accounts
maintained with a federal or state chartered depository institution or trust
company, acting in the capacity of a trustee, in a manner acceptable to the
Rating Agency in respect of mortgage pass-through certificates rated in one of
its two highest rating categories. Eligible Accounts may be interest-bearing
accounts or the funds therein may be invested in Permitted Investments. If
otherwise qualified by this definition, accounts maintained with the Trustee may
constitute Eligible Accounts.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"Fiscal Year": Unless otherwise provided in the Trust Agreement, the
fiscal year of the Trust shall be the calendar year.
"Holders" or "Certificateholders": The holders of the Certificates, as
shown on the Certificate Register maintained by the Trustee.
"Net Rate": Unless otherwise provided in the Trust Agreement, with
respect to each Underlying Security, the coupon or interest rate of that
Underlying Security less the Administrative Cost Rate applicable thereto.
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"Non-Recoverable Advance": Any Advance or proposed Advance that the
Trustee has determined not to be recoverable in accordance with Section 3.02
hereof.
"Officer": When used with respect to the Trustee, any senior vice
president, any vice president, any assistant vice president, any assistant
treasurer, any trust officer, any assistant secretary in the Corporate Trust
Office of the Trustee, or any other officer of the Trustee customarily
performing functions similar to those performed by the persons who at the time
shall be such officers, and also to whom with respect to a particular corporate
trust matter such matter is referred because of such officer's knowledge of and
familiarity with the particular subject. With respect to any other Person, the
chairman of the board, the president, a vice president (however designated), the
treasurer or controller.
"Opinion of Counsel": A written opinion of counsel, who may be counsel
for the Depositor, acceptable to the Trustee. Except with the consent of each
Rating Agency, no Opinion of Counsel may be delivered by in-house counsel of the
entity required to deliver such opinion.
"Pass-Through Rate": With respect to the Certificates, as to each
Distribution Date, the rate specified as such in the Trust Agreement.
"Paying Agent": The paying agent appointed pursuant to Section 5.07
hereof.
"Percentage Interest": With respect to any Certificate to which
principal is assigned as of the Closing Date, the portion of the Class evidenced
by such Certificate, expressed as a percentage, the numerator of which is the
initial Certificate Principal Balance of such Certificate and the denominator of
which is the aggregate Certificate Principal Balance of all of the Certificates
of such Class as of the Closing Date. With respect to any Certificate to which a
principal balance is not assigned as of the Closing Date, the portion of the
Class evidenced by such Certificate, expressed as a percentage, as stated on the
face of such Certificate.
"Permitted Investments": Permitted Investments shall consist of the
following:
(a) direct obligations of, or obligations fully guaranteed as
to principal and interest by, the United States or any agency or
instrumentality thereof, provided such obligations are backed by the
full faith and credit of the United States;
(b) senior debt obligations and mortgage participation
certificates of Xxxxxx Xxx (formerly the Federal National Mortgage
Association) or Xxxxxxx Mac (formerly the Federal Home Loan Mortgage
Corporation);
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(c) repurchase obligations (the collateral for which is held
by a third party or the Trustee) with respect to any security described
in clauses (a) or (b) above, provided that the long-term or short-term
unsecured debt obligations of the party agreeing to repurchase such
obligations are at the time rated by the Rating Agency in one of its
two highest long-term unsecured debt rating categories or one of its
two highest short-term unsecured debt ratings with respect to
obligations maturing in less than 30 days or in its highest short-term
unsecured rating with respect to obligations maturing in 30 days or
more;
(d) money market funds rated in the highest long-term rating
category;
(e) certificates of deposit, time deposits and bankers'
acceptances of any bank or trust company (including the Trustee)
incorporated under the laws of the United States or any state, provided
that the long-term unsecured debt obligations of such bank or trust
company at the date of acquisition thereof (or, in the case of the
principal depository institution in a depository institution holding
company, the long-term unsecured debt obligations of the depository
institution holding company) have been rated by the Rating Agency in
one of its two highest long-term unsecured debt rating categories;
(f) commercial paper (having original maturities of not more
than 365 days) of any corporation incorporated under the laws of the
United States or any state thereof which on the date of acquisition has
been rated by the Rating Agency in its highest short-term unsecured
debt rating available (i.e., "P-1" by Xxxxx'x Investors Service, "A-1+"
by Standard & Poor's Ratings Services, a Division of The XxXxxx-Xxxx
Companies, Inc. and "F-1+" by Fitch IBCA, Inc.); and
(g) any other demand, money market or time deposit or
obligation, or interest-bearing or other security or investment as
would not affect the then current rating of the Certificates by any
Rating Agency;
provided, however, that no investment described above shall constitute a
Permitted Investment if such investment evidences either the right to receive
(i) only interest with respect to the obligations underlying such instrument or
(ii) both principal and interest payments derived from obligations underlying
such instrument if the interest and principal payments with respect to such
instrument provide a yield to maturity at par greater than 120% of the yield to
maturity at par of the underlying obligations; and provided further, that no
investment described above shall constitute a Permitted Investment unless such
investment matures no later than the Business Day immediately preceding the
Distribution Date on which the funds invested therein are required to be
distributed (or, in the case of an investment that is an obligation of the
institution in which the account is maintained, no later than such Distribution
Date).
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"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.
"Plan": Any employee benefit plan or retirement arrangement, including
individual retirement accounts and annuities, Xxxxx plans and collective
investment funds in which such plans, accounts, annuities or arrangements are
invested, that are described in or subject to the Plan Asset Regulations, ERISA
or corresponding provisions of the Code.
"Plan Asset Regulations": The Department of Labor regulations set forth
in 29 X.X.X.xx. 2510.3-101, as amended from time to time.
"Plan Investor": Any Plan, any Person acting on behalf of a Plan or any
Person using the assets of a Plan.
"Private Certificate": Any Class of Certificates not distributed
through a public offering designated as such in the Trust Agreement.
"Purchase Price": With respect to any Underlying Security purchased
from the Trust, an amount equal to the Unpaid Principal Balance of such
Underlying Security, plus accrued and unpaid interest thereon to the date that
the purchase occurs.
"Purchaser": The Person that purchases an Underlying Security from the
Trust pursuant to Section 2.03 hereof.
"Qualified Institutional Buyer": Any "qualified institutional buyer" as
defined in clause (a)1 of Rule 144A.
"Qualified Substitute Underlying Security": An Underlying Security
substituted by the Depositor or a Seller for a removed Underlying Security which
must, on the date of such substitution, (a) have an Unpaid Principal Balance not
less than the Unpaid Principal Balance of the removed Underlying Security, (b)
have a coupon or interest rate not less than the coupon or interest rate of the
removed Underlying Security, (c) have a Net Rate equal to the Net Rate of the
removed Underlying Security, (d) have a remaining term to maturity not greater
than (and not more than one year less than) that of the removed Underlying
Security, and (e) comply with each representation and warranty set forth in
Section 2.04 and, if the Seller is effecting the substitution, comply with each
representation and warranty set forth in the Sales Agreement.
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"Rating Agency": Any nationally recognized statistical rating agency,
or its successor, specified in the Trust Agreement that on the Closing Date
rated one or more Classes of the Certificates at the request of the Depositor.
If such agency or a successor is no longer in existence, the "Rating Agency"
shall be such nationally recognized statistical rating agency, or other
comparable Person, designated by the Depositor, notice of which designation
shall be given to the Trustee. References herein to any long-term rating
category of a Rating Agency shall mean such rating category without regard to
any plus or minus or numerical designation.
"Record Date": Unless otherwise provided in the Trust Agreement, with
respect to each Distribution Date, the last Business Day of the month
immediately preceding the month in which such Distribution Date occurs.
"Redeeming Purchase": The purchase of all of the Certificates issued by
a Trust pursuant to Section 8.01 hereof.
"Redemption Account": An escrow account maintained by the Trustee into
which any Trust funds not distributed on a Distribution Date on which a
Redeeming Purchase is made are deposited. The Redemption Account shall be an
Eligible Account.
"Redemption Date": The date, if any, specified in the Trust Agreement
for a Series.
"Redemption Price": An amount equal to (a) the Certificate Principal
Balance of the Certificates and accrued and unpaid interest due thereon to the
Accounting Date preceding the Distribution Date fixed for redemption and (b)
unreimbursed Advances and Non-Recoverable Advances.
"Reserve Fund": Unless otherwise provided in the Trust Agreement, any
fund in the Trust Estate other than the Asset Proceeds Account.
"Rule 144A": Rule 144A promulgated by the Certificates and Exchange
Commission, as the same may be amended from time to time.
"Rule 144A Agreement": An agreement substantially in the form of
Exhibit B hereto.
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"Rule 144A Certificates": Any Class of Certificates designated as such
in the Trust Agreement.
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"Principal Balance": For any Underlying Security as of any date of
determination, the principal balance thereof as of the Cut-off Date, reduced by
the principal portion of all Distributions due on or before such determination
date,.
"Sales Agreement": The agreement relating to the purchase of the
Underlying Security by the Depositor.
"Securities Act": The Securities Act of 1933, as amended.
"Seller": With respect to each Underlying Security, the Person that
executed a Sales Agreement applicable thereto.
"Senior Percentage": The percentage, if any, calculated as set forth in
the Trust Agreement.
"Series": A group of Certificates issued by a separate Trust.
"Standard Terms": These Standard Terms, as amended or supplemented,
incorporated by reference in a Trust Agreement .
"Terminating Purchase": The purchase of all Underlying Securities owned
by a Trust pursuant to Section 9.02 hereof.
"Termination Account": An escrow account maintained by the Trustee into
which any Trust funds not distributed on the Distribution Date on which the
earlier of (a) a Terminating Purchase or (b) the final payment or other
liquidation of the last Underlying Security remaining in the Trust is deposited.
The Termination Account shall be an Eligible Account.
"Termination Price": 100% of the Unpaid Principal Balance of each
Underlying Security remaining in the Trust on the day of such purchase, plus
accrued interest thereon at the coupon or interest rate through the Accounting
Date preceding repurchase plus any unreimbursed Advances of other than principal
and interest.
"Transferee Agreement": An agreement substantially in the form of
Exhibit C hereto.
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"Trust": The trust formed pursuant to a Trust Agreement.
"Trust Agreement": The Trust Agreement among the Depositor and the
Trustee relating to the issuance of Certificates, and into which these Standard
Terms are incorporated by reference.
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"Trust Estate": The segregated pool of assets sold and assigned to the
Trustee by the Depositor pursuant to the conveyance clause of any Trust.
"Trustee": The bank or trust company identified as the Trustee in the
Trust Agreement.
"UCC": The Uniform Commercial Code as in effect in the jurisdiction
that governs the interpretation of the substantive provisions of the Trust
Agreement.
"Underlying Security Indenture": The agreement between the Underlying
Security Issuer and the Underlying Indenture Trustee pursuant to which an
Underlying Security has been issued.
"Underlying Security" or "Underlying Securities" The publicly or
privately issued, fixed income debt security or a pool of such debt securities,
as appropriate, transferred to the Trustee.
"Underlying Security Event of Default": Any event of default with
respect to an Underlying Security as set forth in the related Underlying
Security Indenture
"Underlying Security Issuer": The corporation, trust, banking
organization, insurance company or other entity that issues the Underlying
Securities that are Transferred to the Trust.
"Underlying Security Trustee": The trustee under the Underlying
Securities Indenture.
"Underlying Security Schedule": The list of Underlying Securities sold
by the Depositor to the Trust, which schedule is attached to the Trust
Agreement, and which shall set forth for each Underlying Security the following
information:
(a) the CUSIP, PPN or other identifying number;
(b) the Underlying Security Issuer's name;
(c) the original principal balance; and
(d) the Principal Balance as of the Cut-off Date;
together with such additional information as may be reasonably requested by the
Trustee.
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"Unpaid Principal Balance": With respect to any Underlying Security,
the outstanding principal balance payable by the Underlying Security Issuer
under the terms of the Underlying Securities and the related Underlying
Securities Indenture.
"Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. Unless otherwise provided in
the Trust Agreement, (a) if any Class of Certificates does not have a
Certificate Principal Balance or has an initial Certificate Principal Balance
that is less than or equal to 1% of the aggregate Certificate Principal Balance
of all the Certificates, then 1% of Voting Rights shall be allocated to each
Class of such Certificates having no Certificate Principal Balance or a
Certificate Principal Balance equal to or less than 1% of the aggregate
Certificate Principal Balance of all Certificates, and the balance of Voting
Rights shall be allocated among the remaining Classes of Certificates in
proportion to their respective Certificate Principal Balances following the most
recent Distribution Date, and (b) if no Class of Certificates has an initial
Certificate Principal Balance less than 1% of the aggregate Certificate
Principal Balance, then all of the Voting Rights shall be allocated among all
the Classes of Certificates in proportion to their respective Certificate
Principal Balances following the most recent Distribution Date. Voting Rights
allocated to each Class of Certificates shall be allocated in proportion to the
respective Percentage Interests of the Holders thereof.
ARTICLE II
TRUST ESTATE
Section 2.01. Trust Assets. Pursuant to a Trust Agreement, the
Depositor has sold to the Trustee without recourse all the right, title and
interest of the Depositor in and to the Underlying Securities, any and all
rights, privileges and benefits accruing to the Depositor under the Sales
Agreement with respect to the Underlying Securities (except any rights of the
Depositor to fees and indemnification by the Seller under such Agreement),
including the rights and remedies with respect to the enforcement of any and all
representations, warranties and covenants under such agreements and all other
agreements and assets included or to be included in the Trust for the benefit of
the Certificateholders as set forth in the conveyance clause of the Trust
Agreement. Such assignment includes all of the Depositor's rights to
distributions on the Underlying Securities due after the Cut-off Date, and all
other payments of principal (and interest) made on or after the Cut-off Date
that are reflected in the initial aggregate Certificate Principal Balance of the
Certificates for a Trust.
Section 2.02. Acceptance by the Trustee.
(a) By its execution of the Trust Agreement, the Trustee acknowledges
and declares that it or the Custodian holds and will hold or has agreed to hold
all documents or instruments delivered to it from time to time with respect to
an Underlying Security and
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all other assets included in the definition of "Trust Estate" in the related
Trust Agreement in trust for the exclusive use and benefit of all present and
future Certificateholders. The Trustee represents and warrants that to the best
of its knowledge, (i) it acquired the Underlying Securities on behalf of the
Trust from the Depositor in good faith, for value, and without actual notice or
actual knowledge of any adverse claim, lien, charge, encumbrance or security
interest (including, without limitation, federal tax liens or liens arising
under ERISA) (it being understood that the Trustee has not undertaken searches
(lien records or otherwise) of any public records), (ii) except as permitted in
the Trust Agreement, it has not and will not, in any capacity, assert any claim
or interest in the Underlying Securities and will hold (or its agent will hold)
such Underlying Securities and the proceeds thereof in trust pursuant to the
terms of the Trust Agreement, and (iii) it has not encumbered or transferred its
right, title or interest in any Underlying Security.
(b) With respect to each certificate representing an Underlying
Security, the Trustee (or Custodian) shall, on the Closing Date, deliver to the
Depositor a certification certifying that it is either (i) in possession of a
certificate evidencing such Underlying Security, or (ii) it has received
confirmation from a depository or a direct or indirect participant thereof that
such Underlying Security is beneficially owned by the Trustee for the benefit of
the Certificateholders
Section 2.03. Purchase or Substitution of Underlying Securities by the
Seller or the Depositor.
(a) Seller Breach. Upon discovery or notice of any breach by a Seller
-------------
of any representation, warranty or covenant under the Sales Agreement which
defect or breach materially and adversely affects the value of any Underlying
Security or the interest of the Trust therein (it being understood that any such
defect or breach shall be deemed to have materially and adversely affected the
value of the related Underlying Security or the interest of the Trust therein if
the Trust incurs a loss as a result of such defect or breach), the Trustee shall
promptly request that the Seller of such Underlying Security cure such defect or
breach, and if such Seller does not cure such defect or breach in all material
respects within 90 days from the date on which it is notified of the defect or
breach, to enforce such Seller's obligation under the Sales Agreement to
purchase such Underlying Security from the Trustee. In lieu of purchasing any
such Underlying Security as provided above, if so provided in the Sales
Agreement, the Seller may cause such Underlying Security to be removed from the
Trust and substitute one or more Qualified Substitute Underlying Securities in
the manner and subject to the limitations set forth in Section 2.03(d). It is
understood and agreed that enforcement of the obligation of the Seller to cure,
purchase or substitute for any Underlying Security as to which a material defect
in a constituent document exists or as to which such a breach has occurred and
is continuing shall constitute the sole remedy respecting such defect or breach
available to the Trustee on behalf of the Certificateholders.
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(b) Depositor Breach. Within 90 days of the earlier of discovery or
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receipt of notice by the Depositor of the breach of any of its representations
or warranties set forth in Section 2.04 hereof with respect to any Underlying
Security, which breach materially and adversely affects the value of the related
Underlying Security or the interest of the Trust therein (it being understood
that any such defect or breach shall be deemed to have materially and adversely
affected the value of the related Underlying Security or the interest of the
Trust therein if the Trust incurs a loss as a result of such defect or breach),
the Depositor shall (i) cure such breach in all material respects, (ii) purchase
the Underlying Security from the Trustee, or (iii) remove such Underlying
Security from the Trust and substitute one or more Qualified Substitute
Underlying Securities in the manner and subject to the limitations set forth in
Section 2.03(d) hereof.
(c) Purchase Price. Except as otherwise provided in the Trust
--------------
Agreement, the purchase of any Underlying Security from the Trust pursuant to
this Section 2.03 shall be effected for its Purchase Price. The Purchase Price
shall be deposited in the Asset Proceeds Account and distributed to the
Certificateholders unless otherwise provided in the Trust Agreement.
(d) Substitution. Unless otherwise provided in the Trust Agreement,
------------
the right to substitute a Qualified Substitute Underlying Security for any
removed Underlying Security that is an asset of the Trust shall be limited to
the two-year period beginning on the Closing Date.
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As to any removed Underlying Security for which the Depositor
or a Seller substitutes one or more Qualified Substitute Underlying Securities,
the Depositor or the Seller, as the case may be, shall effect such substitution
by delivering to the Trustee for each Qualified Substitute Underlying Security,
the certificate (or a beneficial ownership therein), and such other documents
and agreements, with all necessary endorsements thereon, as are required to be
delivered to the Trustee pursuant to Section 2.01, together with a certificate
of an officer of the Depositor to the effect that each such Qualified Substitute
Underlying Security complies with the terms of the Trust Agreement.
Distributions due with respect to Qualified Substitute Underlying Securities in
the month of substitution are not part of the Trust and will be retained by the
Depositor or the Seller, as the case may be. For the month of substitution,
distributions to Certificateholders will reflect the Distributions due on such
removed Underlying Security on or before the first day of the month in which the
substitution occurs, and the Depositor or the Seller, as the case may be, shall
thereafter be entitled to retain all amounts subsequently received in respect of
such removed Underlying Security. The Trustee shall amend the Underlying
Security Schedule to reflect the removal of such removed Underlying Security
from the terms of the Trust Agreement and the substitution of the Qualified
Substitute Underlying Security or Securities. Upon such substitution, such
Qualified Substitute Underlying Security or Securities shall be subject to the
terms of the Trust Agreement in all respects, including, in the case of a
substitution effected by a Seller, the representations and warranties included
in the Sales Agreement, and in the case of a substitution effected by the
Depositor, the representations and warranties set forth in Section 2.04 hereof,
in each case as of the date of substitution. The Trustee shall, within five
Business Days of its receipt of the documents referred to above, effect the
reconveyance of such removed Underlying Security to the Depositor or the Seller,
as the case may be, in accordance with the procedures specified above.
If, for any month in which the Depositor or a Seller
substitutes one or more Qualified Substitute Underlying Securities for one or
more removed Underlying Securities, the Trustee determines that the amount of
the aggregate Unpaid Principal Balance of all such Qualified Substitute
Underlying Securities as of the date of substitution is less than the aggregate
Unpaid Principal Balance of all such removed Underlying Securities (after
application of Distributions due in the month of substitution) (the
"Substitution Shortfall"), the Depositor or the Seller, as the case may be, will
deliver or cause to be delivered to the Trustee for deposit from its own funds
into the Asset Proceeds Account an amount equal to such Substitution Shortfall.
Section 2.04. Representations and Warranties of the Depositor. The
Depositor hereby represents and warrants to the Trustee that as of the Closing
Date or as of such other date specifically provided herein:
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(a) The Depositor has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware with
full power and authority (corporate and other) to own its properties and conduct
its business as now conducted by it and to enter into and perform its
obligations under the Trust Agreement, and has duly qualified to do business as
a foreign corporation and is in good standing under the laws of each
jurisdiction which requires such qualification wherein it owns or leases
material properties, except where the failure to so qualify would not have a
material adverse effect on the Depositor;
(b) The Trust Agreement has been duly authorized by all necessary
corporate action on the part of the Depositor, has been duly executed and
delivered by the depositor and, assuming due authorization, execution and
delivery by the Trustee, constitutes a legal, valid and binding agreement of the
Depositor, enforceable against it in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and to general principles of equity
regardless of whether enforcement is sought in a proceeding in equity or at law;
(c) Neither the execution and delivery by the Depositor of the Trust
Agreement, nor the consummation by the Depositor of the transactions therein
contemplated, nor compliance by the Depositor with the provisions thereof, will
(i) conflict with or result in a breach of, or constitute a default under, any
of the provisions of the articles of incorporation or by-laws of the Depositor
or any law, governmental rule or regulation or any judgment, decree or order
binding on the Depositor or any of its properties, or any of the provisions of
any indenture, mortgage, deed of trust, contract or other instrument to which
the Depositor is a party or by which it is bound, or (ii) result in the creation
of any lien, charge, or encumbrance upon any of its properties pursuant to the
terms of any such indenture, mortgage, deed of trust, contract or other
instrument;
(d) There are no actions, suits or proceedings against, or
investigations of, the Depositor pending, or, to the knowledge of the Depositor,
threatened, before any court, administrative agency or other tribunal (i)
asserting the invalidity of the Trust Agreement or (ii) seeking to prevent the
issuance of the Certificates or the consummation of any of the transactions
contemplated by the Trust Agreement;
(e) The Depositor is the owner of, or holder of a perfected first
priority security interest in, each Underlying Security;
(f) The Depositor has acquired its ownership of, or security interest
in, each such Underlying Security in good faith, for value, without notice of
any adverse claim, lien, charge, encumbrance or security interest;
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(g) Except for the sale to the Trustee, the Depositor has not
encumbered, transferred or assigned any interest or participation in each such
Underlying Security (or, if any such interest or participation has been
assigned, it has been released); and
(h) The Depositor has full right to sell, transfer and assign the
Trust Estate to the Trustee.
It is understood and agreed that the representations and
warranties set forth in this Section 2.04 shall survive delivery of the
respective Underlying Securities to the Trustee and shall inure to the benefit
of the Trustee notwithstanding any restrictive or qualified endorsement or
assignment. Upon the discovery by the Depositor or the Trustee of a breach of
the foregoing representations and warranties, the party discovering such breach
shall give prompt written notice to the other party to the Trust Agreement, and
in no event later than two Business Days from the date of such discovery. It is
understood and agreed that the obligations of the Depositor set forth in Section
2.03(b) to cure, substitute for or repurchase an Underlying Security constitute
the sole remedies available to the Certificateholders or to the Trustee on their
behalf respecting a breach of the representations and warranties contained in
this Section 2.04. It is further understood and agreed that the Depositor shall
be deemed not to have made the representations and warranties in this Section
2.04 with respect to, and to the extent of, representations and warranties made,
as to the matters covered in this Section 2.04, by any Seller in the related
Sales Agreement assigned to the Trustee.
ARTICLE III
ADMINISTRATION OF THE TRUST
Section 3.01. Asset Proceeds Account.
(a) Deposits. The Trustee shall establish and maintain one or more
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accounts (collectively, the "Asset Proceeds Account") held in trust for the
benefit of the Certificateholders. Each Asset Proceeds Account shall be an
Eligible Account. On each Distribution Date, the Trustee shall deposit into the
Asset Proceeds Account the following amounts, to the extent not previously
deposited therein:
(i) the amounts received as Distributions on the Underlying
Securities;
(ii) Advances, if any are required;
(iii) the amount required to effect a Terminating Purchase
pursuant to Section 9.02; and
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(iv) the amount required to be deposited from any Reserve
Fund, if and as provided in the Trust Agreement.
(b) Withdrawal. On each Distribution Date, the Trustee shall withdraw
----------
all monies in the Asset Proceeds Account in the following order of priority for
the purposes indicated:
(i) to reimburse the Trustee for any Advance previously made
that has been determined to be a Non-Recoverable Advance;
(ii) to reimburse the Depositor for expenses incurred by or
reimbursable to it pursuant to Section 6.03;
(iii) to refund any overpayment of the Purchase Price of an
Underlying Security;
(iv) to pay the Certificateholders the amount of the Available
Distribution as provided in the Trust Agreement; and
(v) to reimburse the Trustee for Advances not previously
reimbursed.
In addition, upon the termination of the Trust, the Trustee shall make
a final withdrawal to clear and terminate the Asset Proceeds Account and
distribute any amounts to the Depositor.
(c) Accounting. The Trustee shall keep and maintain separate
----------
accounting, on an Underlying Security by Underlying Security basis, for the
purpose of justifying any payment to and from the Asset Proceeds Account.
(d) Investment. The Depositor shall direct the Trustee in writing
----------
(which may be in the form of standing instructions) as to the investment of
funds (which shall be invested in Permitted Investments) in the Asset Proceeds
Account. Net investment income on funds in the Asset Proceeds Account shall be
released to the [Trustee][Depositor] as part of its compensation no later than
the fifth Business Day of the month following the month in which the related
Distribution Date occurs, unless provided in the Trust Agreement that such net
investment income be applied to the distributions on the Certificates.
Section 3.02. Advances by Trustee.
(a) To the extent that Distributions are not received on the
Underlying Securities, the Trustee shall be obligated to make Advances with
respect to such Underlying Securities to the extent that the Trustee determines,
in good faith, that an
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Advance made hereunder is recoverable from subsequent payments by the Obligor
with respect to such Underlying Security.
(b) Any Advance made by the Trustee under this Section 3.02 which the
Trustee shall ultimately determine in its good faith judgment to be not
recoverable from subsequent payments by the Obligor shall be a Non-Recoverable
Advance. The determination by the Trustee that it has made a Non-Recoverable
Advance shall be evidenced by a Non-Recoverability Certificate of the Trustee
promptly delivered to the Depositor and the Certificateholders setting forth the
reasons for such determination. Following the receipt of such Non-Recoverability
Certificate, the Trustee shall be entitled to reimbursement for such
Non-Recoverable Advance as provided herein.
ARTICLE IV
REPORTING/REMITTING TO SECURITYHOLDERS
Section 4.01. Statements to Certificateholders. On or before each
Distribution Date, the Trustee shall prepare a statement as to such distribution
and deliver such statement by mail to each Certificateholder, setting forth:
(a) the amount of such distribution to the Holders of Certificates of
such Class to be applied to reduce the Certificate Principal Balance thereof;
(b) the amount of such distribution to the Holders of Certificates of
such Class allocable to interest, and the Pass-Through Rate applicable to each
Class;
(c) the amount of the Trustee Fee to be paid to the Trustee on such
Distribution Date; and such other customary information as the Trustee deems
necessary or desirable, or which a Certificateholder reasonably requests, to
enable Certificateholders to prepare their tax returns;
(d) the aggregate amount of outstanding Advances, together with Non-
Recoverable Advances, if any, at the close of business on such Distribution
Date;
(e) the aggregate Principal Balance of the Underlying Securities as of
such Distribution Date;
(f) the aggregate Certificate Principal Balance of each Class of
Securities after giving effect to the distribution to be made on such
Distribution Date;
(g) the aggregate amount of interest remaining unpaid, if any, for
each Class of Securities, after giving effect to the distribution made on such
Distribution Date; and
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(h) the aggregate amount of withdrawals, if any, from any Reserve Fund
and the amount, if any, available thereunder.
In the case of information furnished pursuant to clauses (a)
and (b) above, the amounts shall be expressed, with respect to any Certificate,
as a dollar amount per $25 denomination; provided, however, that if any Class of
Securities does not have a Certificate Principal Balance, then the amounts shall
be expressed as a dollar amount per 10% Percentage Interest.
Within a reasonable period of time after the end of each
calendar year, the Trustee shall prepare and furnish a statement containing the
information set forth in clauses (a) through (c) above, to each Person who at
any time during the calendar year was a Holder that constituted a retail
investor or other Holder that requests such statement, aggregated for such
calendar year or portion thereof during which such Person was a
Certificateholder. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Trustee pursuant to any requirements of the Code as from time to
time are in force.
Section 4.02. Compliance with Withholding Requirements. Notwithstanding
any other provisions of the Trust Agreement, the Trustee shall comply with all
federal withholding requirements respecting payments to Certificateholders of
interest or original issue discount on the Securities that the Trustee
reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. In the event the
Trustee does withhold any amount from interest or original issue discount
payments or Advances thereof to any Certificateholder pursuant to federal
withholding requirements, the Trustee shall indicate with any payment to such
Certificateholders the amount withheld.
Section 4.03. Reports of Certificate Principal Balances to The
Depository Trust Depositor. If and for so long as any Certificate is held by The
Depository Trust Depositor, on the second Business Day before each Distribution
Date, the Trustee shall give oral notice to The Depository Trust Depositor (and
shall promptly thereafter confirm in writing) the following: (a) the amount to
be reported pursuant to clause (a) and (b) of each statement provided to Holders
of Securities pursuant to Section 4.01 in respect of the next succeeding
distribution, (b) the Record Date for such distribution, (c) the Distribution
Date for such distribution and (d) the aggregate Certificate Principal Balance
of each Class of Securities to be reported pursuant to clause (h) of the first
paragraph of Section 4.01 in such month.
Section 4.04. Preparation of Regulatory Reports.
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(a) Subject to the provisions of subsections (b) and (c) of this
Section 4.04, the Trustee shall prepare or cause to be prepared, on behalf of
the Trust, such supplementary and periodic information, documents and reports
(such information, documents or reports are referred to hereinafter as "Periodic
Reports") as may be required pursuant to Section 12(g) or Section 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), by the rules
and regulations of the Securities and Exchange Commission (the "SEC") thereunder
or as a condition to approval of any application for relief ("Application for
Relief") hereinafter referred to and, in connection therewith, shall prepare
such applications and requests for exemption and other relief from such
provisions as it may deem appropriate. The Trustee shall execute all such
Periodic Reports and Applications for Relief delivered as provided above and
shall file the same with the SEC and other required filing offices, if any, on
behalf of the Trust.
(b) Within 30 days after the beginning of the first fiscal year of the
Trust during which the obligation to file Periodic Reports pursuant to the
Exchange Act shall have been suspended, the Trustee shall prepare, or cause to
be prepared, a notice on SEC Form 15 ("Form 15"); provided, however, that the
Trustee shall be under no obligation to prepare such notice if the number of
Certificateholders exceeds [750]. The Trustee shall file any notice on Form 15
with the SEC in accordance with the provisions of Rule 15d-6 under the Exchange
Act.
(c) Notwithstanding any other provision of this Agreement, the Trustee
has not assumed, and shall not by its performance hereunder be deemed to have
assumed, any of the duties or obligations of the Depositor or any other Person
with respect to (i) the registration of the Certificates pursuant to the
Securities Act, (ii) the issuance or sale of the Certificates, or (iii)
compliance with the provisions of the Securities Act, the Exchange Act, or any
applicable federal or state securities or other laws including, without
limitation, any requirement to update the registration statement or prospectus
relating to the Certificates in order to render the same not materially
misleading to investors.
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ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates. The Certificates shall be designated in
the Trust Agreement. Unless otherwise specified in the Trust Agreement, the
Certificates in the aggregate will represent the entire beneficial ownership
interest in the Trust Estate. On the Closing Date, the aggregate Certificate
Principal Balance of the Certificates will equal the aggregate Principal Balance
of the Underlying Securities as of the Cut-off Date. The Certificates will be
substantially in the forms annexed to the Trust Agreement. Unless otherwise
provided in the Trust Agreement, the Certificates of each Class will be issuable
in registered form, in denominations of authorized Percentage Interests as
described in the definition thereof. Each Certificate will share ratably in all
rights of the related Class.
Upon original issue, the Certificates shall be executed and delivered
by the Trustee and the Trustee shall cause the Certificates to be authenticated
by the Certificate Registrar to or upon the order of the Depositor upon receipt
by the Trustee of the documents specified in Section 2.01. The Certificates
shall be executed and attested by manual or facsimile signature on behalf of the
Trustee by an authorized Officer. Certificates bearing the manual or facsimile
signatures of individuals who were at any time the proper Officers of the
Trustee shall bind the Trustee, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and delivery
of such Certificates or did not hold such offices at the date of such
Certificates. No Certificate shall be entitled to any benefit under this
Agreement or be valid for any purpose, unless there appears on such Certificate
a certificate of authentication as set forth on such certificate executed and
attested by manual signature on behalf of the Trustee by a duly authorized
Officer of the Trustee, and such certificate of authentication shall be
conclusive evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their execution.
Section 5.02. Book-Entry Certificates.
(a) The Book-Entry Certificates will be represented initially by one or
more certificates registered in the name designated by the Depository. The
Depositor and the Trustee may for all intents and purposes (including the making
of payments on the Book-Entry Certificates) deal with the Depository as the
authorized representative of the Beneficial Owners of the Book-Entry
Certificates for as long as those Certificates are registered in the name of the
Depository. The rights of Beneficial Owners of the Book-Entry Certificates shall
be limited to those established by law and agreements between such Beneficial
Owners and the Depository and Depository Participants. The Beneficial Owners of
the Book-Entry Certificates shall not be entitled to certificates for the
Book-Entry Certificates as to which they are the Beneficial Owners, except as
provided in
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subsection (c) below. Requests and directions from, and votes of, the
Depository, as Holder, shall not be deemed to be inconsistent if they are made
with respect to different Beneficial Owners. Without the consent of the
Depositor, the Master Servicer and the Trustee, a Book-Entry Certificate may not
be transferred by the Depository except to another Depository that agrees to
hold the Book-Entry Certificate for the account of the respective Depository
Participants and Beneficial Owners.
(b) Neither the Depositor nor the Trustee will have any liability to any
person for any aspect of the records relating to or payment made on account of
Beneficial Owners of the Book-Entry Certificates held by the Depository, for
monitoring or restricting any transfer of beneficial ownership in a Book-Entry
Certificate or for maintaining, supervising or reviewing any records relating to
such Beneficial Owners.
(c) The Book-Entry Certificates will be issued in fully registered,
certificated form to Beneficial Owners of Book-Entry Certificates or their
nominees, rather than to the Depository or its nominee, only if (i) the
Depositor advises the Trustee in writing that the Depository is no longer
willing or able to discharge properly its responsibilities as depository with
respect to the Book-Entry Certificates, and the Depositor is unable to locate a
qualified successor within 30 days, (ii) the Underlying Security Issuer is no
longer subject to the reporting requirements under the Exchange Act at any time
when the Trust is subject to the information requirements of the Exchange Act,
or (iii) the Depositor, at its option, elects to terminate the book-entry system
operating through the Depository. Upon the occurrence of either such event, the
Trustee shall notify the Depository, which in turn will notify all Beneficial
Owners of Book-Entry Certificates through Depository Participants, of the
availability of certificated Certificates. Upon surrender by the Depository of
the certificates representing the Book-Entry Certificates and receipt of
instructions for re-registration, the Trustee will reissue the Book-Entry
Certificates as certificated Certificates to the Beneficial Owners identified in
writing by the Depository. Such certificated Certificates shall not constitute
Book-Entry Certificates.
Section 5.03. Registration of Transfer and Exchange of Certificates. The
Trustee shall cause to be kept at its Corporate Trust Office a Certificate
Register in which, subject to such reasonable regulations as it may prescribe,
the Trustee shall provide for the registration of Certificates and of transfers
and exchanges of Certificates as herein provided. The Trustee will initially
serve as Certificate Registrar for the purpose of registering Certificates and
transfers and exchanges of Certificates as herein provided.
Subject to Section 5.04, upon surrender for registration of transfer of any
Certificate at the Corporate Trust Office of the Trustee or at any other office
or agency of the Trustee maintained for such purpose, the Trustee shall execute
and the Certificate Registrar shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class of a like aggregate Percentage Interest.
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At the option of the Certificateholders, each Certificate may be exchanged
for other Certificates of the same Class with the same and authorized
denominations and a like aggregate Percentage Interest, upon surrender of such
Certificate to be exchanged at any such office or agency. Whenever any
Certificates are so surrendered for exchange, the Trustee shall execute and
cause the Certificate Registrar to authenticate and deliver the Certificates
which the Certificateholder making the exchange is entitled to receive. Every
Certificate presented or surrendered for transfer or exchange shall (if so
required by the Trustee) be duly endorsed by, or be accompanied by a written
instrument of transfer in the form satisfactory to the Trustee duly executed by,
the Holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
All Certificates surrendered for transfer and exchange shall be destroyed
by the Certificate Registrar.
The Trustee will cause the Certificate Registrar (unless the Trustee is
acting as Certificate Registrar) to provide notice to the Trustee of each
transfer of a Certificate, and will provide the Trustee and Master Servicer with
an updated copy of the Certificate Register on January 1 and July 1 of each
year.
Section 5.04. Restrictions on Transfer.
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(a) Securities Law Compliance. No transfer of any Private Certificate
-------------------------
shall be made unless that transfer is made pursuant to an effective registration
statement under the Securities Act and effective registration or qualification
under applicable state securities laws, or is made in a transaction that does
not require such registration or qualification. Any Holder of a Private
Certificate shall, and, by acceptance of such Certificate, does agree to,
indemnify the Depositor and the Trustee against any liability that may result if
any transfer of such Certificates by such Holder is not exempt from registration
under the Securities Act and all applicable state securities laws or is not made
in accordance with such federal and state laws. Neither the Depositor nor the
Trustee is obligated to register or qualify any Private Certificate under the
Securities Act or any other securities law or to take any action not otherwise
required under this Agreement to permit the transfer of such Certificates
without such registration or qualification. The Trustee shall not register any
transfer of a Private Certificate unless and until the prospective transferee
provides the Trustee with a Transferee Agreement or, if the Certificate to be
transferred is a Rule 144A Certificate, a Rule 144A Agreement certifying to
facts which, if true, would mean that the proposed transferee is a Qualified
Institutional Buyer, and unless and until the transfer otherwise complies with
the provisions of this Section 5.04. If a proposed transfer does not involve a
Rule 144A Certificate or the transferee of a Rule 144A Certificate does not
certify to facts which, if true, would mean that the transferee is a Qualified
Institutional Buyer, the Trustee shall require that the transferor and
transferee certify as to the factual basis for the registration exemption(s)
relied upon, and if the transfer is made within two years of the acquisition
thereof by a non-Affiliate of the Depositor from the Depositor or an Affiliate
of the Depositor or the Trustee also may require an Opinion of Counsel that such
transfer may be made without registration or qualification under the Securities
Act and applicable state securities laws, which Opinion of Counsel shall not be
obtained at the expense of the Depositor or the Trustee. Notwithstanding the
foregoing, no Rule 144A Agreement, Transferee Agreement or Opinion of Counsel
shall be required in connection with the initial transfer of the Private
Certificates and no Opinion of Counsel shall be required in connection with the
transfer of the Private Certificates by a broker or dealer, if such broker or
dealer was the initial transferee.
The Trustee, on behalf of the Depositor shall provide to any Holder of
a Rule 144A Certificate and any prospective transferee designated by such Holder
information regarding the related Certificates and the Trust Estate and such
other information as shall be necessary to satisfy the condition to eligibility
set forth in Rule 144A(d)(4) for transfer of any such Certificate without
registration thereof under the Securities Act pursuant to the registration
exemption provided by Rule 144A.
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(b) ERISA Compliance.
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(i) Book-Entry Subordinated Certificates. No Certificate that (i) is
a Book-Entry Certificate and (ii) is subordinated in right to payment to
the Certificates of any other Class due to the allocation of losses (a
"Book-Entry Subordinated Certificate") shall be transferred to a transferee
that acknowledges that it is a Plan Investor unless such transferee
provides the Trustee with a Benefit Plan Opinion. The transferee of a Book-
Entry Subordinated Certificate that does not provide the Trustee with a
Benefit Plan Opinion will be deemed, by virtue of its acquisition of such
Certificate, to have represented that it is not a Plan Investor.
(ii) Certificated Subordinated Certificates. No Certificate that (i)
is not a Book-Entry Certificate and (ii) is subordinated in right to
payment to the Certificates of any other Class due to the allocation of
losses (a "Certificated Subordinated Certificate") shall be transferred
unless the prospective transferee provides the Trustee with a properly
completed Benefit Plan Affidavit, together with a Benefit Plan Opinion if
required in order to comply with such Affidavit.
Section 5.05. Mutilated, Destroyed, Lost or Stolen Certificates. If (a) any
mutilated Certificate is surrendered to the Trustee or the Certificate
Registrar, or the Trustee and the Certificate Registrar receive evidence to
their satisfaction of the destruction, loss or theft of any Certificate, and (b)
there is delivered to the Trustee and the Certificate Registrar such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of actual knowledge by the Trustee or the Certificate Registrar that
such Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of the same Class and
of like tenor and Percentage Interest. Upon the issuance of any new Certificate
under this Section, the Trustee may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the
Certificate Registrar) connected therewith. Any replacement Certificate issued
pursuant to this Section shall constitute complete and indefeasible evidence of
ownership in the Trust, as if originally issued, whether or not the destroyed,
lost or stolen Certificate shall be found at any time.
Section 5.06. Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Trustee, the Certificate Registrar
and any agent of any of them may treat the person in whose name any Certificate
is registered as the owner of such Certificate for the purpose of receiving
distributions and for all other purposes whatsoever, and neither the Trustee,
the Certificate Registrar nor any agent of any of them shall be affected by
notice to the contrary.
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Section 5.07. Appointment of Paying Agent. The Trustee may appoint a Paying
Agent for the purpose of making distributions to Certificateholders. The Trustee
shall cause such Paying Agent to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee that such
Paying Agent will hold all sums held by it for the payment to Certificateholders
in an Eligible Account in trust for the benefit of the Certificateholders
entitled thereto until such sums shall be paid to the Certificateholders. All
funds remitted by the Trustee to any such Paying Agent for the purpose of making
distributions shall be paid to Certificateholders on each Distribution Date and
any amounts not so paid shall be returned on such Distribution Date to the
Trustee.
ARTICLE VI
THE DEPOSITOR
Section 6.01. Liability of the Depositor. The Depositor shall be liable in
accordance herewith only to the extent of the obligations specifically imposed
by the Trust Agreement and undertaken by the Depositor under the Trust
Agreement.
Section 6.02. Merger or Consolidation of the Depositor. Subject to the
following paragraph, the Depositor will keep in full effect its corporate
existence, rights and franchises under the laws of the jurisdiction of its
organization, and will obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of the Trust Agreement, the Certificates
or any of the Underlying Securities and to perform its respective duties under
the Trust Agreement.
The Depositor may be merged or consolidated with or into any Person, or
transfer all or substantially all of their respective assets to any Person, in
which case any Person resulting from any merger or consolidation to which the
Depositor shall be a party, or any Person succeeding to the business of the
Depositor, shall be the successor of the Depositor without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
Section 6.03. Limitation on Liability of the Depositor and Others. Neither
the Depositor nor any of the directors, officers, employees or agents of either
entity shall be under any liability to the Trust or the Certificateholders and
all such Persons shall be held harmless for any action taken or for refraining
from the taking of any action in good faith pursuant to the Trust Agreement, or
for errors in judgment; provided, however, that this provision shall not protect
any such Person against any breach of warranties or representations made herein
or against any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or negligence in the performance of duties or by reason
of reckless disregard of obligations and duties hereunder. The Depositor and any
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of the directors, officers, employees or agents of either may rely in good faith
on any document of any kind which, prima facie, is properly executed and
submitted by any Person respecting any matters arising hereunder. The Depositor
shall not be under any obligation to appear in, prosecute or defend any legal
action unless such action is related to its respective duties under the Trust
Agreement and which in its opinion does not involve it in any expense or
liability, except as provided in Section [10.01](b); provided, however, that the
Depositor may in its discretion undertake any such action that it deems
necessary or desirable with respect to the Trust Agreement and the rights and
duties of the parties thereto and the interests of the Certificateholders
thereunder if the Certificateholders offer to the Depositor reasonable security
or indemnity against the costs, expenses and liabilities that may be incurred
therein or thereby.
ARTICLE VII
CONCERNING THE TRUSTEE
Section 7.01. Duties of Trustee. The Trustee undertakes to perform such
duties and only such duties as are specifically set forth in the Trust
Agreement. During an Underlying Security Event of Default of which the Trustee
has notice, the Trustee shall exercise such of the rights and powers vested in
it by the Trust Agreement, and use the same degree of care and skill in their
exercise as a prudent man would exercise or use under the circumstances in the
conduct of such person's own affairs. The Trustee shall provide notice to the
Certificateholders within fifteen (15) days of its receipt of notice that an
Underlying Security Event of Default has occurred.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of the Trust Agreement, shall examine them to determine whether they
conform to the requirements of the Trust Agreement; provided, however, that the
Trustee shall be under no duty to recalculate, verify or recompute the
information provided to it hereunder by the Depositor. If any such instrument is
found not to conform to the requirements of the Trust Agreement in a material
manner, the Trustee shall take action as it deems appropriate to have the
instrument corrected, and if the instrument is not corrected to the Trustee's
satisfaction, the Trustee will provide notice thereof to the Certificateholders.
No provision of the Trust Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; provided, however, that:
(a) The Trustee shall not be personally liable for an error of judgment
made in good faith by an Officer of the Trustee, unless it shall be proved that
the Trustee was negligent in ascertaining the pertinent facts;
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(b) The Trustee shall not be personally liable with respect to any action
taken, suffered or omitted to be taken by it in good faith in accordance with
the direction of Holders of Certificates entitled to at least 25% of the Voting
Rights relating to the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under the Trust Agreement; and
(c) Any determination of negligence or bad faith of the Trustee shall be
made only upon a finding that there is clear and convincing evidence (and not
upon the mere preponderance of evidence) thereof in a proceeding before a court
of competent jurisdiction in which the Trustee has had an opportunity to defend
Section 7.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 7.01 hereof:
(i) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate of auditors or any
other certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties. Further, the Trustee may accept a copy of the vote of the Board of
Directors of any party certified by its clerk or assistant clerk or
secretary or assistant secretary as conclusive evidence of the authority of
any person to act in accordance with such vote, and such vote may be
considered as in full force and effect until receipt by the Trustee of
written notice to the contrary;
(ii) The Trustee may, in the absence of bad faith on its part, rely
upon a certificate of an Officer of the appropriate Person whenever in the
administration of the Trust Agreement the Trustee shall deem it desirable
that a matter be proved or established (unless other evidence be herein
specifically prescribed) prior to taking, suffering or omitting any action
hereunder;
(iii) The Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such written
advice or Opinion of Counsel;
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(iv) The Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by the Trust Agreement or to institute,
conduct or defend any litigation thereunder or in relation thereto at the
request, order or direction of any of the Certificateholders, pursuant to
the provisions of the Trust Agreement, unless such Certificateholders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or thereby;
(v) The Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it
by the Trust Agreement;
(vi) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing to do so by
Holders of Certificates entitled to at least 25% of the Voting Rights;
provided, however, that if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by it
in the making of such investigation is, in the opinion of the Trustee, not
assured to the Trustee by the security afforded to it by the terms of the
Trust Agreement, the Trustee may require indemnity against such expense or
liability as a condition to taking any such action.;
(vii) The Trustee may execute any of the trusts or powers under the
Trust Agreement or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney appointed
with due care by it under the Trust Agreement;
(viii) Whenever the Trustee is authorized herein to require acts or
documents in addition to those required to be provided it in any matter, it
shall be under no obligation to make any determination whether or not such
additional acts or documents should be required unless obligated to do so
under Section 7.01;
(ix) The permissive right or authority of the Trustee to take any
action enumerated in this Agreement shall not be construed as a duty or
obligation; and
(x) The Trustee shall not be deemed to have notice of any matter
unless one of its Officers has actual knowledge thereof or unless written
notice thereof is received by the Trustee at the Corporate Trust Office and
such notice references the applicable Certificates generally, the Seller,
the Trust or this Agreement.
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(b) All rights of action under the Trust Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
other proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in its name for the benefit of all
the Holders of such Certificates, subject to the provisions of the Trust
Agreement.
Section 7.03. Trustee Not Liable for Certificates or Underlying Securities.
The recitals contained in the Trust Agreement and in the Certificates (other
than the signature and authentication of the Trustee on the Certificates) shall
be taken as the statements of the Depositor, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations or
warranties as to the validity or sufficiency of the Trust Agreement or of the
Certificates (other than the signature and authentication of the Trustee on the
Certificates) or of any Underlying Security or related document. The Trustee
shall not be accountable for the use or application by the Depositor of any of
the Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Depositor in respect of the Underlying
Securities or deposited in or withdrawn from the Asset Proceeds Account in
accordance with the Trust Agreement other than any funds held by or on behalf of
the Trustee in accordance with Sections 3.01 and 3.02.
Section 7.04. Trustee May Own Certificates. The Trustee in its individual
capacity or any other capacity may become the owner or pledgee of Certificates
with the same rights it would have if it were not Trustee.
Section 7.05. Trustee's Fees and Expenses. Pursuant to the Trust Agreement
or a separate fee agreement, the Trustee shall be entitled to (i) reasonable
compensation (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) for all services rendered by
it in the execution of the trusts created under the Trust Agreement and in the
exercise and performance of any of the powers and duties thereunder of the
Trustee and (ii) reimbursement for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any of the
provisions of the Trust Agreement (including but not limited to the reasonable
compensation and the expenses and disbursements of its counsel and of all
persons not regularly in its employ) except any such expense, disbursement or
advance as may arise from its negligence or bad faith.
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Section 7.06. Eligibility Requirements for Trustee. The Trustee shall at
all times be a corporation or national banking association that is not an
Affiliate of the Depositor organized and doing business under the laws of any
state or the United States of America, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by federal or state
authority. If such corporation publishes reports of its conditions at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of conditions so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in Section 7.07.
Section 7.07. Resignation and Removal of the Trustee. The Trustee may at
any time resign and be discharged from the trusts created pursuant to a Trust
Agreement by giving written notice thereof to the Depositor, the Rating Agencies
and to all Certificateholders. Upon receiving such notice of resignation, the
Depositor shall promptly appoint a successor trustee by written instrument, in
duplicate, which instrument shall be delivered to the resigning Trustee and to
the successor trustee. A copy of such instrument shall be delivered to the
Certificateholders by the Depositor. If no successor trustee shall have been so
appointed and have accepted appointment within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 7.06 and shall fail to resign after written request
therefor by the Depositor, or if any time the Trustee shall become incapable of
acting, or shall be adjudged bankrupt or insolvent, or a receiver of the Trustee
or of its property shall be appointed, or any public officer shall take charge
or control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then the Depositor may remove the
Trustee and appoint a successor trustee by written instrument, in duplicate,
which instrument shall be delivered to the Trustee so removed and to the
successor trustee. A copy of such instrument shall be delivered to the
Certificateholders by the Depositor.
The Holders of Certificates entitled to at least 51% of the Voting Rights
may at any time remove the Trustee and appoint a successor trustee by written
instrument or instruments, in triplicate, signed by such Holders or their
attorneys-in-fact duly authorized, one complete set of which instruments shall
be delivered to the Depositor, one complete set to the Trustee so removed and
one complete set to the successor trustee so
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appointed. A copy of such instrument shall be delivered to the
Certificateholders by the Depositor.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor trustee as
provided in Section 7.08 hereof.
Section 7.08. Successor Trustee. Any successor trustee appointed as
provided in Section 7.07 shall execute, acknowledge and deliver to the Depositor
and to the predecessor trustee an instrument accepting such appointment under
the Trust Agreement and thereupon the resignation or removal of the predecessor
trustee shall become effective and such successor trustee, without any further
act, deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor thereunder, with the like effect as if
originally named as trustee therein. The predecessor trustee shall deliver to
the successor trustee all related documents and statements held by it under the
Trust Agreement and the Depositor and the predecessor trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
for more fully and certainly vesting and confirming in the successor trustee all
such rights, powers, duties and obligations.
No successor trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 7.06 hereof.
Upon acceptance of appointment by a successor trustee as provided in
this Section, the Depositor shall mail notice of the succession of such trustee
under the Trust Agreement to all Holders of Certificates at their addresses as
shown in the Certificate Register. If the Depositor fails to mail such notice
within 10 days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Depositor.
Section 7.09. Merger or Consolidation of Trustee. Any corporation into
which the Trustee may be merged or converted or with which it may be
consolidated or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to the business of the Trustee, shall be the successor of the Trustee
under the Trust Agreement provided such corporation shall be eligible under the
provisions of Section 7.06, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 7.10. Appointment of Co-Trustee or Separate Trustee. For the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust or property securing the same may at the time be located, the
Depositor and the
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Trustee acting jointly shall have the power and shall execute and deliver all
instruments to appoint one or more Persons acceptable to the Trustee to act as
co-trustee or co-trustees, jointly with the Trustee, or separate trustee or
trustees, of all or any part of the Trust, and to vest in such Person or
Persons, in such capacity, such title to the Trust, or any part thereof, and,
subject to the other provisions of this Section 7.10, such powers, duties,
obligations, rights and trusts as the Depositor and the Trustee may consider
necessary or desirable. If the Depositor shall not have joined in such
appointment within 15 days after the receipt by it of a request so to do, the
Trustee alone shall have the power to make such appointment. No co-trustee or
separate trustee(s) hereunder shall be required to meet the terms of eligibility
as a successor trustee under Section 7.06 hereof and no notice to Holders of
Certificates of the appointment of co-trustee(s) or separate trustee(s) shall be
required under Section 7.08 hereof.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 7.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed, the Trustee shall be incompetent
or unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust or any
portion thereof in any such jurisdiction) shall be exercised and performed by
such separate trustee or co-trustee at the direction of the Trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to the Trust Agreement and the
conditions of this Article VII. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Trustee or
separately, as may be provided therein, subject to all the provisions of the
Trust Agreement, specifically including every provision of the Trust Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of the
Trust Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
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Section 7.11. Appointment of Custodians. The Trustee may appoint one or
more Custodians to hold all or a portion of the Trust Estate as agent for the
Trustee, by entering into a custodial agreement. The appointment of any
Custodian may at any time be terminated and a substitute custodian appointed
therefor by the Trustee. Subject to Article VII, the Trustee agrees to comply
with the terms of each custodial agreement and to enforce the terms and
provisions thereof against the Custodian for the benefit of the
Certificateholders. Each Custodian shall be a depository institution or trust
company subject to supervision by federal or state authority, shall have
combined capital and surplus of at least $10,000,000 and shall be qualified to
do business in the jurisdiction in which it holds any asset constituting part of
the Trust Estate. Any such Custodian may not be an affiliate of the Depositor or
any Seller with respect to the applicable Trust.
Section 7.12. Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under the Trust Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto and any such proceeding instituted by the Trustee
shall be brought in its own name or in its capacity as Trustee. Any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders in respect of which such judgment has
been recovered.
ARTICLE VIII
REDEMPTION OF SECURITIES AND TERMINATION OF TRUST
Section 8.01. Redemption. Unless otherwise provided in the Trust
Agreement, the Depositor may, at its option, make or cause a Person to make a
Redeeming Purchase of the Certificates for the Redemption Price on any
Distribution Date on or after the earlier of (a) the Distribution Date on which,
after taking into account distributions of principal to be made on such
Distribution Date, the aggregate Certificate Principal Balance of the
Certificates is equal to or less than 10% of the initial aggregate Certificate
Principal Balance of such Certificates, or (b) the Redemption Date. No Person
may cause the Trustee to make a Redeeming Purchase unless the Trustee shall have
first received cash from such Person in an amount equal to the Redemption Price.
Unclaimed funds otherwise distributable to Certificateholders on a Distribution
Date on which a Redeeming Purchase is made are to be deposited in the Redemption
Account.
Section 8.02. Termination. Whether or not the Certificates have been
redeemed, unless otherwise provided in the Trust Agreement, the Depositor, may,
at its option, make or cause a Person to make a Terminating Purchase for the
Termination Price on any Distribution Date upon which a Redeeming Purchase may
be made. Upon such Terminating Purchase or the final payment or other
liquidation (or any advance with
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respect thereto) of the last Underlying Security remaining in the Trust, the
respective obligations and responsibilities under the Trust Agreement of the
Depositor and the Trustee (other than the obligations of the Trustee to make
payments to Certificateholders as hereafter) shall terminate upon payment to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required hereunder to be so paid and upon deposit of unclaimed funds otherwise
distributable to Certificateholders in the Termination Account. Notwithstanding
the foregoing, in no event shall the Trust created hereby continue beyond 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.
James's, living on the date hereof.
Section 8.03. Procedure for Redemption or Termination. The Depositor
shall advise the Trustee of its election to cause a Redeeming Purchase or
Terminating Purchase no later than the Distribution Date in the month preceding
the Distribution Date on which the Redeeming Purchase or Terminating Purchase
will occur. Notice of the Distribution Date on which any such redemption or
termination shall occur (the "Final Distribution Date") shall be given promptly
by the Trustee by letter to Certificateholders mailed (a) in the event such
notice is given in connection with a Redeeming Purchase or Terminating Purchase,
not earlier than the 15th day and not later than the last day of the month
preceding the month of such final distribution or (b) otherwise during the month
of such final distribution on or before the Remittance Date in such month, in
each case specifying (i) the Final Distribution Date and that final payment of
the Certificates will be made upon presentation and surrender of Certificates at
the office of the Trustee therein designated on that date, (ii) the amount of
any such final payment and (iii) that the Record Date otherwise applicable to
such Final Distribution Date is not applicable, payments being made only upon
presentation and surrender of the Certificates at the office of the Trustee. The
Trustee shall give such notice to the Certificate Registrar at the time such
notice is given to Certificateholders. In the event such notice is given in
connection with a Redeeming Purchase or Terminating Purchase, the purchaser
shall deliver to the Trustee for deposit in the Asset Proceeds Account on the
Business Day immediately preceding the Final Distribution Date an amount in next
day funds equal to the Redemption Price or Termination Price, as the case may
be.
Upon presentation and surrender of the Certificates on a Distribution
Date by Certificateholders, the Trustee shall distribute to Certificateholders
(A) the amount otherwise distributable on such Distribution Date, if not in
connection with a Redeeming Purchase or Terminating Purchase, or (B) if in
connection with a Redeeming Purchase or Terminating Purchase, an amount
determined as follows: With respect to each Certificate with an outstanding
Certificate Principal Balance, the outstanding Certificate Principal Balance
thereof, plus interest thereon through the Accounting Date preceding the
Distribution Date fixed for redemption or termination and any previously unpaid
interest. The Trustee also shall pay itself the amount of any unreimbursed
Advances.
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Upon the deposit of the Redemption Price in the Asset Proceeds Account,
the Trustee (or the Custodian) shall retain possession of the Trust Estate and
shall release the Certificates to the person effecting the Redeeming Purchase.
Upon the deposit of the Termination Price in the Asset Proceeds Account, the
Trustee, and any Custodian acting as its agent, shall promptly release to the
purchaser the Underlying Securities, and the Trustee shall execute all
assignments, endorsements and other instruments without recourse necessary to
effectuate such transfer. The Trust shall terminate immediately following the
deposit of funds in the Termination Account as provided below.
In the event that all of the Certificateholders shall not surrender
their Certificates within six months after the Final Distribution Date specified
in the above-mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders to surrender their Certificates and
receive the final distribution with respect thereto, net of the cost of such
second notice. If within one year after the second notice all the Certificates
shall not have been surrendered for cancellation, the Trustee may take
appropriate steps, or may appoint an agent to take appropriate steps, to contact
the remaining Certificateholders concerning surrender of their Certificates, and
the cost thereof shall be paid out of the amounts otherwise payable on such
Certificates. Any funds payable to Certificateholders that are not distributed
on the Final Distribution Date shall be deposited in a Redemption Account or
Termination Account, as the case may be, each of which shall be an Eligible
Account, to be held for the benefit of Certificateholders not presenting and
surrendering their Certificates in the aforesaid manner, and shall be disposed
of in accordance with this Section.
ARTICLE IX
TAX PROVISIONS
Section 9.01. Designation of Trust Estate as Grantor Trust.
Unless otherwise specified in the Trust Agreement, the Trustee shall
have received an Opinion of Counsel to the effect that the Trust Estate shall be
treated as a grantor trust for United States federal income tax purposes. In
order to maintain the grantor trust status, the Trustee will perform the various
tax administration functions on behalf of the Trust Estate and act as agent of
each Series as set forth in this Section 9.01.
(a) The Trustee shall pay any and all tax-related expenses
(not including taxes) with respect to the Trust Estate, including but
not limited to any professional fees or expenses related to audits or
any administrative or judicial proceedings with respect to a Series
that involves the Internal Revenue Service or state tax authorities.
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(b) The Trustee shall prepare all of the federal and state tax
and information returns required for the Trust. The Trustee shall sign
and file any such returns. The expenses of preparing and filing tax and
information returns will be borne by the Trustee.
(c) The Trustee, acting as agent of the Trust Estate, shall
perform on behalf of the Trust Estate all reporting and other tax
compliance duties that are the responsibility of the Trust under the
Code or compliance guidance issued by the Internal Revenue Service or
any state or local taxing authority. Among its other duties, the
Trustee shall provide the Holders with such information or reports as
are required by the Code.
(d) The Trustee and the Holders shall take any action or cause
the Trust to take any action necessary to create or maintain the status
of the Trust Estate as a grantor trust for federal income tax purposes
and shall assist each other as necessary to create or maintain such
status.
(e) The Trustee and the Holders shall not take any action or
cause the Trust to take any action that could endanger the status of
the Trust Estate as a grantor trust for federal income tax purposes,
unless the Trustee has received an Opinion of Counsel (at the expense
of the party seeking to take such action) to the effect that the
contemplated action will not endanger such status.
Section 9.02 Prohibited Activities.
Neither the Trustee nor the Depositor shall authorize (or, in the case
of the Trustee, permit) any modification of any material term of the Underlying
Securities, any other assets of the Trust Estate (including, but not limited to,
the coupon or interest rate, the principal balance, the remaining term to
maturity, or any other term affecting the amount or timing of distributions or
payments on the Certificates or the Underlying Securities).
The Trustee shall not (a) sell, dispose of, or substitute the
Underlying Securities except for the sale or disposition of the Underlying
Securities upon the termination of the related Trust Estate or of the Trust as
described herein or (b) acquire any additional assets or (c) cause the Trust or
the Trust Estate to engage in any action not contemplated by this Trust
Agreement, unless it has received an Opinion of Counsel, which shall not be at
the expense of the Trustee, that any such sale, disposition, substitution,
acquisition or action will not affect adversely the status of the Trust Estate
as a grantor trust under the Code.
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ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01. Amendment of Trust Agreement. The Trust Agreement may be
amended or supplemented from time to time by the Depositor and the Trustee
without the consent of any of the Certificateholders to (a) cure any ambiguity,
(b) correct or supplement any provisions herein which may be inconsistent with
any other provisions herein, (c) modify, eliminate or add to any of its
provisions to such extent as shall be necessary or appropriate to maintain the
qualification of the Trust (or certain assets thereof) as a grantor trust under
the Code at all times that any Certificates are outstanding or (d) make any
other provisions with respect to matters or questions arising under the Trust
Agreement or matters arising with respect to the Trust which are not covered by
the Trust Agreement which shall not be inconsistent with the provisions of the
Trust Agreement, provided that such action shall not adversely affect in any
material respect the interests of any Certificateholder. Any such amendment or
supplement shall be deemed not to adversely affect in any material respect any
Certificateholder if there is delivered to the Trustee written notification from
each Rating Agency that rated the applicable Certificates at the request of the
Depositor to the effect that such amendment or supplement will not cause that
Rating Agency to reduce the then current rating assigned to such Certificates.
The Trust Agreement may also be amended from time to time by the
Depositor and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Trust Agreement or of modifying in any manner the rights of the Holders of
Certificates; provided, however, that no such amendment shall (A) reduce in any
manner the amount of, or delay the timing of, payments received on any
Underlying Security which are required to be distributed on any Certificate
without the consent of the Holder of such Certificate, (B) adversely affect in
any material respect the interests of the Holders of any Class of Certificates
in a manner other than as described in (A), without the consent of the Holders
of Certificates of such Class evidencing at least 66% of the Voting Rights of
such Class, or (C) reduce the aforesaid percentage of Certificates the Holders
of which are required to consent to any such amendment, without the consent of
such Holders of all Certificates then outstanding. For purposes of the giving or
withholding of consents pursuant to this Section 10.01, Certificates registered
in the name of the Depositor or an Affiliate shall be entitled to Voting Rights
with respect to matters affecting such Certificates.
Promptly after the execution of any such amendment the Trustee shall
furnish a copy of such amendment to each Certificateholder.
-41-
It shall not be necessary for the consent of Certificateholders under
this Section 10.01 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 the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Section 10.02. Counterparts. The Trust Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 10.03. Limitation on Rights of Certificateholders. The death or
incapacity of any Certificateholder shall not operate to terminate the Trust
Agreement or the Trust, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
No Certificateholder shall have any right to vote (except as expressly
provided for herein) or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth, or contained in the terms of the Certificates, be
construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to the Trust Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue of any provision of
the Trust Agreement to institute any suit, action or proceeding in equity or at
law upon or under or with respect to the Trust Agreement, unless such Holder
previously shall have given to the Trustee a written notice of default and of
the continuance thereof, as hereinbefore provided, and unless also the Holders
of Certificates entitled to at least 25% of the Voting Rights shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee under the Trust Agreement and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 15 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue of any
provision of the Trust Agreement to affect, disturb or prejudice the rights of
the Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under the Trust
-42-
Agreement, except in the manner therein provided and for the equal, ratable and
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section, each and every Certificateholder and the Trustee
shall be entitled to such relief as can be given either at law or in equity.
Section 10.04. Notices. All demands and notices under the Trust
Agreement shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by first class mail, postage prepaid, or by
express delivery service, to (a) in the case of the Depositor, [ ]
with a copy to Hunton & Xxxxxxxx, Riverfront Plaza, East Tower, 000 Xxxx Xxxx
Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxxx (telecopy number
(000) 000-0000), or such other address or telecopy number as may hereafter be
furnished to each party to the Trust Agreement in writing by the Depositor and
(b) in the case of the Trustee, at its address and telecopy number set forth in
the Trust Agreement, or such other address or telecopy number as may hereafter
be furnished to each party to the Trust Agreement in writing by the Trustee. Any
notice required or permitted to be mailed to a Certificateholder shall be given
by first-class mail, postage prepaid, or by express delivery service, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in the Trust Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder receives
such notice. A copy of any notice required to be telecopied hereunder also shall
be mailed to the appropriate party in the manner set forth above. A copy of any
notice given hereunder to any other party shall be delivered to the Trustee.
Section 10.05. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of the Trust Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of the Trust Agreement and shall in no way affect the
validity or enforceability of the other provisions of the Trust Agreement or of
the Certificates or the rights of the Holders thereof.
Section 10.06. Sale of Underlying Securities. It is the express intent
of the Depositor and the Trustee that the conveyance of the Underlying
Securities by the Depositor to the Trustee pursuant to each Trust Agreement be
construed as a sale of the Underlying Securities by the Depositor to the
Trustee. It is, further, not the intention of the Depositor and the Trustee that
such conveyance be deemed a pledge of the Underlying Securities by the Depositor
to the Trustee to secure a debt or other obligation of the Depositor. However,
in the event that, notwithstanding the intent of the parties, the Underlying
Securities are held to continue to be property of the Depositor then (a) the
Trust Agreement also shall be deemed to be a security agreement within the
meaning of Article 9 of the UCC; (b) the conveyance by the Depositor provided
for in the Trust Agreement shall be deemed to be a grant by the Depositor to the
Trustee of a security interest in all of the Depositor's right, title and
interest in and to the Underlying Securities
-43-
and all amounts payable to the holders of the Underlying Securities in
accordance with the terms thereof and all proceeds of the conversion, voluntary
or involuntary, of the foregoing into cash, instruments, securities or other
property, including without limitation all amounts, other than investment
earnings, from time to time held or invested in Asset Proceeds Account, whether
in the form of cash, instruments, securities or other property; (c) the
possession by the Trustee or its agent of the Underlying Securities and such
other items of property as constitute instruments, money, negotiable documents
or chattel paper shall be deemed to be in the "control" or "possession by the
secured party" for purposes of perfecting the security interest pursuant to
Section 9-115(4) or 9-305 of the UCC (as applicable); and (d) notifications to
persons holding such property, and acknowledgments, receipts or confirmations
from persons holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of the Trustee for the purpose of perfecting
such security interest under applicable law. The Depositor and the Trustee
shall, to the extent consistent with the Trust Agreement, take such actions as
may be necessary to ensure that, if the Trust Agreement were deemed to create a
security interest in the Underlying Securities, such security interest would be
deemed to be a perfected security interest of first priority under applicable
law and will be maintained as such throughout the term of the Trust Agreement.
Section 10.07. Notice to Rating Agency.
-44-
(a) The Trustee shall use its best efforts promptly to provide notice
to the Rating Agency with respect to each of the following of which it has
actual knowledge:
(i) any material change or amendment to the Trust Agreement
or any agreement assigned to the Trust;
(ii) the resignation, termination or merger of the Depositor
or the Trustee;
(iii) the purchase or substitution of Underlying Securities
pursuant to Section 2.03;
(v) the final payment to Certificateholders;
(vi) any change in the location the Asset Proceeds Account;
or
(vi) any event that would result in the inability of the
Trustee to make Advances regarding delinquent Underlying Securities.
(b) In addition, the Trustee shall promptly furnish to each Rating
Agency at its address set forth in the Trust Agreement copies of each
report to Certificateholders described in Section 4.01.
(c) Any notice pursuant to this Section 10.07 shall be in writing and
shall be deemed to have been duly given if personally delivered or mailed by
first class mail, postage prepaid or by express delivery service to each Rating
Agency at the address specified in the Trust Agreement.
-45-
Exhibit A to Standard Terms to Trust Agreement
----------------------------------------------
__________________________________________
NFSC TRUST, 200[ ]-[ ]
200[ ]-[ ] TRUST CERTIFICATES
____________________
TRUST AGREEMENT
between
NATIONAL FINANCIAL SECURITIES CORPORATION,
as Depositor,
and
[ ],
as Trustee
DATED AS OF
[ ], 200[ ]
__________________________________________
-46-
TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT..................................................................................... 1
CONVEYANCE................................................................................................ 1
Section 1. Standard Terms................................................................................ 2
-------------
Section 2. Defined Terms................................................................................. 2
-------------
Section 3. Aggregate Principal Amount; Terms............................................................. 4
---------------------------------
Section 4. Denominations................................................................................. 4
-------------
Section 5. Distributions................................................................................. 4
-------------
Section 6. Underlying Security........................................................................... 5
-------------------
Section 7. Termination Event............................................................................. 6
-----------------
Section 8. [Reserve Fund]................................................................................ 6
------------
Section 9. Form of Trust Certificate..................................................................... 7
-------------------------
Section 10. Schedules..................................................................................... 7
---------
Section 11. Opinions...................................................................................... 7
--------
(i)
TRUST AGREEMENT
THIS TRUST AGREEMENT, dated as of [____] 1, 200[0] (this "Agreement"), is
hereby executed by and between NATIONAL FINANCIAL SECURITIES CORPORATION, a
Delaware corporation (the "Depositor") and [ ], a [national banking
association], as trustee (the "Trustee"), under this Agreement and the Standard
Terms to Trust Agreement, June 2000 edition (the "Standard Terms"), all the
provisions of which are incorporated herein and shall be a part of this
Agreement as if set forth herein in full (this Agreement with the Standard Terms
so incorporated, the "Trust Agreement").
PRELIMINARY STATEMENT
The Board of Directors of the Depositor has duly authorized the formation
of a trust, to be designated as the "NFSC 200[ ]-[ ] (the "Trust") to issue a
Series of securities with an initial aggregate principal amount of $[________]
to be known as the 200[ ]-[ ] Trust Certificates (the "Trust Certificates"). The
Trust Certificates consist of a single class, which evidences the entire
beneficial ownership in the Trust.
CONVEYANCE
To provide for the distribution of the principal of and interest on the
Trust Certificates in accordance with their terms, all of the sums distributable
under this Trust Agreement with respect to the Trust Certificates and the
performance of the covenants contained in this Trust Agreement, the Depositor
hereby bargains, sells, conveys, assigns and transfers to the Trustee, in trust,
without recourse and for the exclusive benefit of the Holders of the Trust
Certificates, all of the Depositor's right, title and interest in and to any and
all benefits accruing to the Depositor from: (a) the Underlying Security listed
on Schedule I hereto that the Depositor is causing to be delivered to the
Trustee herewith (and all Qualified Substitute Underlying Securities substituted
therefor as provided by Section 2.03 of the Standard Terms), together with all
payments due thereon after [_____] 1, 200[ ]; (b) the Sales Agreement, (c) the
Asset Proceeds Account for the Trust Certificates, whether in the form of cash,
instruments, securities or other properties; and (d) proceeds of all the
foregoing (including, but not by way of limitation, all cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit
accounts, distributions, rights to payment of any and every kind, and other
forms of obligations and receivables that at any time constitute all or part or
are included in the proceeds of any of the foregoing) to pay the Trust
Certificates as specified herein (items (a) through (d) above shall be
collectively referred to herein as the "Trust Estate").
[The Depositor hereby pledges to the Trust and grants to the Trustee,
on behalf of the Holders, a first priority security interest in and to (a) the
Reserve Fund and all amounts as are deposited and maintained therein from time
to time pursuant to this Trust Agreement, excluding however, any earnings
thereon; and (b) all proceeds of the foregoing of every kind and nature
whatsoever, including, without limitation, proceeds of proceeds, and the
conversion, voluntary or involuntary, of any of the foregoing into cash
Exhibit 5- Page 1
or other liquidated property in trust, subject to the limitation set forth above
with respect to earnings, to have and to hold in trust to secure the Trust
Certificates. The Reserve Fund will not be designated as an asset of the Trust,
but will be pledged to the Trust for the benefit of the Holders. The owner of
the Reserve Fund will be the Depositor.]
The Trustee acknowledges the sales, assignments and pledges created by the
foregoing paragraphs, accepts the trust hereunder in accordance with the
provisions hereof and agrees to perform the duties set forth herein or required
by the Standard Terms to the end that the interests of the Holders of the Trust
Certificates may be adequately and effectively protected. By its execution of
this Agreement, the Trustee acknowledges and declares that it holds and will
hold or has agreed to hold all documents delivered to it from time to time with
respect to the Underlying Securities and all assets included in the definition
of "Trust Estate" herein in trust for the exclusive use and benefit of all
present and future Holders.
Standard Terms.
--------------
The Depositor and the Trustee acknowledge that the Standard Terms prescribe
certain obligations of the Depositor and the Trustee with respect to the Trust
Certificates. The Depositor and the Trustee agree to observe and perform such
prescribed duties, responsibilities and obligations, and acknowledge that,
except to the extent inconsistent with the provisions of this Agreement, the
Standard Terms are and shall be a part of this Agreement to the same extent as
if set forth herein in full.
Defined Terms.
-------------
With respect to the Trust Certificates and in addition to the definitions
set forth in the Standard Terms, the following provisions shall govern the
defined terms set forth below. To the extent the meanings assigned to the
defined terms set forth below are inconsistent with the meanings assigned to
such terms in the Standard Terms, the meanings assigned herein shall control.
"Accrued Interest": On each Distribution Date, [six months'] interest on
the Certificate Principal Balance of the Trust Certificates, calculated at the
applicable Pass-Through Rate.
"Administrative Cost": The sum of [ ].
"Administrative Cost Rate": [__]% per annum.
"Book-Entry Trust Certificates": The Trust Certificates not issued to
Institutional Accredited Investors on the Closing Date.
"Business Day": Any day that is not a Saturday, Sunday, holiday, or other
day on which commercial banking institutions in the City of New York or the city
and state in
Exhibit 5- Page 2
which the Corporate Trust Office are located are authorized or obligated by law
or executive order to be closed.
"Closing Date": [ ], 200[ ].
"Cut-off Date": [ ] 1, 200[ ].
"Distribution Amount": On each Distribution Date, an amount equal to the
sum of:
(i) the Accrued Interest for the Trust Certificates on such
Distribution Date; and
(ii) (A) the Scheduled Principal received on the Underlying
Security during the Due Period preceding such Distribution Date, and (B)
any of the foregoing amounts remaining unpaid from a previous Distribution
Date.
"Due Period": [ ].
"Pass-Through Rate": [_______________].
"Rating Agency": [Standard & Poor's Ratings Group, a division of The
XxXxxx-Xxxx Company Inc., (26 Broadway, New York, New York 10004)][Fitch IBCA,
Inc.(One Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 10004).] [References in the
Standard Terms to the "Rating Agency" shall be deemed to be the Rating Agencies
unless the context indicates otherwise.]
"Redemption Date": [_____________].
["Reserve Fund": An Eligible Account established for the payment of [ ], as
set forth in Section 8(a) hereof.]
"Sales Agreement": The Sales Agreement, dated [__________], 1998, by and
between [ ] and the Depositor regarding the sale of the Underlying Security.
"Scheduled Principal": With respect to each Due Period, the amount of
principal scheduled to be paid on the Underlying Security,[ in accordance with
the amounts set forth on Schedule III hereto.
------------
"Termination Event": An event described in Section 7 hereof.
"Trustee": [ ], in its capacity as Trustee hereunder, its successor in
interest or any successor trustee appointed as herein provided.
"Trustee Fee Rate": [____]% per annum.
"Underlying Security": The trust certificate listed on Schedule I hereto issued
----------
by [ ].
Exhibit 5- Page 3
"Underlying Security Indenture": The indenture relating to the Underlying
Security, dated as of [ ], together with any amendment and supplement
thereto, by and between, the Underlying Security Trustee and [ ].
"Underlying Security Trustee": [ ].
Aggregate Principal Amount; Terms.
---------------------------------
The aggregate principal amount of Trust Certificates that may be executed
and delivered under this Trust Agreement is limited to $[__________], except for
Trust Certificates executed and delivered upon registration of transfer of, in
exchange for or in lieu of, other Trust Certificates pursuant to Section 5.04 of
the Standard Terms.
Except after the occurrence of Termination Event, the Trust Certificates
shall be registered as one or more certificates in the name of the Depositor or
its nominee, and beneficial interests shall be held by the Beneficial Owners
through the book-entry facilities of the Depository. Upon the occurrence of a
Termination Event, the Trust Certificates shall be issued in fully registered,
certificated form.
Denominations.
-------------
The Trust Certificates issued in Book-Entry form will be held in minimum
denominations of $25 and integral multiples of $25 in excess thereof, except
that one Book-Entry Certificate may be in a different denomination. The Trust
Certificates issued in fully registered, certificated form will be held in
minimum denominations of $25 and integral multiples of $25 in excess thereof.
Distributions.
-------------
On each Distribution Date, the Trustee (or the Paying Agent on behalf of
the Trustee) shall withdraw from the Asset Proceeds Account the Available
Distribution for that Distribution Date (after giving effect to any transfer
specified in Section 3.01(b) of the Standard Terms) and shall distribute such
withdrawn amounts in the following manner:
(i) to the Trustee, all unpaid fees and expenses of such Person and
their respective agents for the related Due Period;
[(ii) to the Reserve Fund, any amounts required to be paid or
reimbursed to, or deposited therewith in accordance with Section 8
hereof];
(iii) to the Certificateholders, to the payment of Accrued Interest;
(iv) to the Certificateholders, to the payment of Scheduled
Principal; and
Exhibit 5- Page 4
(vi) to the [Depositor]
All distributions or allocations made to the Certificateholders on each
Distribution Date shall be allocated in the proportion that the Certificate
Principal Balance of each such Trust Certificate bears to the aggregate
Certificate Principal Balance.
Payments to the Holders of each Trust Certificate on any Distribution Date
will be made to the Holders of record of the respective Trust Certificate on the
related Record Date. With respect to the Trust Certificate that are Book-Entry
Certificates registered in the name of the Depository or its nominee, the
Trustee shall make all distributions or allocations on such Trust Certificates
by wire transfers of immediately available funds to the Depository or its
nominee. In the case of Trust Certificates that are not Book-Entry Certificates,
payment shall be made either (1) by check mailed to the address of each
Certificateholder as it appears in the Certificate Register on the Record Date
immediately prior to such Distribution Date or (2) by wire transfer of
immediately available funds to the account of a Holder at a bank or other entity
having appropriate facilities therefor, if such Holder shall have so notified
the Trustee in writing by the Record Date immediately prior to such Distribution
Date and such Holder is the registered owner of Trust Certificates for which the
aggregate initial Certificate Principal Balance or Notional Principal Balance is
equal to or in excess of $1,000,000. The Trustee may charge the Holder a fee for
any payment made by wire transfer.
Underlying Security.
-------------------
In the event that the Trustee receives a request from the Underlying
Security Trustee or the Underlying Security for its consent to any amendment,
modification or waiver of the Underlying Security, the Underlying Security
Indenture or any other document thereunder or relating thereto, or receives any
other solicitation for any action with respect to the Underlying Security, the
Trustee shall mail a notice of such proposed amendment, modification, waiver or
solicitation to each Certificateholder of record as of such date within fifteen
(15) days of receipt thereof. 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 only in accordance with the direction of the majority of the Voting Rights
actually voted by the Certificateholders as of the date set forth in the notice
distributed by the Trustee; provided, however, that, notwithstanding anything to
the contrary, the Trustee shall at no time vote or consent to any matter (i)
unless such vote or consent would not (based on an opinion of counsel) alter the
status of the Trust as a grantor trust for federal income tax purposes, (ii)
that would alter the timing or amount of any payment on the Underlying Security,
including, without limitation, any demand to accelerate the Underlying Security,
except in the event of an Underlying Security Event of Default or an event that
with the passage of time would become an Underlying Security Event of Default,
or (iii) that would result in the exchange or substitution of any of the
outstanding Underlying Security pursuant to a plan for the refunding or
refinancing of such Underlying Security except in the event of a default under
the Underlying Security and only with the consent of Certificateholders
representing 100% of the Voting Rights.
Exhibit 5- Page 5
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.
Termination Event.
-----------------
If, at any time when the Trust is subject to the reporting requirements
of the Exchange Act the Underlying Securities Issuer ceases to be subject to
such periodic reporting requirements, or the Underlying Securities Issuer fails
to make such periodic reports available to the Trustee, the Trustee shall notify
the Certificateholders of such event and declare a "Termination Event" to have
occurred.
Upon the declaration of a Termination Event, the Trustee shall terminate
the book-entry registration of the Trust Certificates and notify the Underlying
Security Trustee of such action. If the Underlying Security Issuer fails to
resume supplying its periodic reports under the Exchange Act within [90] days of
such termination and notice, the Trustee shall [either (i) arrange for the sale
of the Underlying Security for an amount at least equal to the Redemption Price
or (ii)] allow the Depositor to terminate the Trust in accordance with Section
8.02 of the Standard Terms.
[Reserve Fund.]
------------
[The Trustee shall establish a Reserve Fund for the payment of [ ]. The
Reserve Fund initially shall be funded with cash in an amount equal to $[_____].
Following the Closing Date, the Depositor may, from time to time substitute
other property for the property then pledged; provided, that the Rating Agencies
confirm in writing that such substitution, reduction or cancellation will not
adversely affect the current ratings assigned to the Trust Certificates. In the
event of any Convertibility Shortfalls, the Trustee shall draw the amount of
such Convertibility Shortfall from the Reserve Fund until the amount thereof is
reduced to zero, and to pay such amount on the Trust Certificates in accordance
with Section 5 hereof. Any earnings on the Reserve Fund shall be payable
[monthly] to the Depositor. Any amounts remaining in the Reserve Fund upon
termination of the Trust shall be paid to the Depositor.]
Form of Trust Certificate.
-------------------------
The Trust Certificates shall be substantially in the form attached as
Exhibit A hereto.
Schedules.
---------
Schedules I and II are attached hereto and incorporated herein by reference
as contemplated herein or by the Standard Terms.
Exhibit 5- Page 6
Opinions.
--------
The Depositor hereby requests and authorizes its counsel in this
transaction, to issue on behalf of the Depositor such legal opinions to the
Trustee and the Rating Agency as may be (i) required by any and all documents,
certificates or agreements executed in connection with the Trust, or (ii)
requested by the Trustee, Rating Agency, or their respective counsels.
The Trustee hereby requests and authorizes its counsel to issue on behalf
of the Trustee such legal opinions to the Depositor and the Rating Agency as may
be required by any and all documents, certificates or agreements executed in
connection with the establishment of the Trust and the issuance of the Trust
Certificates.
Exhibit 5- Page 7
IN WITNESS WHEREOF, the Depositor and the Trustee have caused this
Trust Agreement to be duly executed by their respective officers thereunto duly
authorized and all as of the 1st day of [_______], 200[ ].
NATIONAL FINANCIAL SECURITIES
CORPORATION,
a Delaware corporation
By:_____________________________
Name:___________________________
Its:____________________________
[ ],
not in its individual capacity
but solely as Trustee of the
Trust
By:_____________________________
Name:___________________________
Its:____________________________
Exhibit 5- Page 8
LIST OF SCHEDULES AND EXHIBITS
------------------------------
SCHEDULE I: Underlying Security Schedule
SCHEDULE II: Principal Payment Schedule for Underlying Security
EXHIBIT A: Form of Trust Certificate
Exhibit 5- Page 9
Schedule I to Trust Agreement
-----------------------------
[Transaction Specific]
Exhibit 5- Page 1
Schedule II to Trust Agreement
------------------------------
[Transaction Specific]
Exhibit 5-Page 1
Exhibit A to Trust Agreement
----------------------------
Form of Trust Certificate
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE 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.
NFSC TRUST 20__-_
TRUST CERTIFICATES
PER ANNUM INTEREST RATE __% PRINCIPAL BALANCE OF THE TRUST
CERTIFICATES AS OF THE CLOSING DATE:
DENOMINATION $ $______________
DATE OF TRUST AGREEMENT AGGREGATE PRINCIPAL BALANCE OF THE
AS OF _____ 1, 20__ UNDERLYING SECURITIES ON
______ 1, 20__ $
CLOSING DATE ____ __, 20__ TRUSTEE:
FIRST
DISTRIBUTION DATE CUSIP NO.
____ __, 20__
NO. 1
NFSC TRUST 20__-_
TRUST CERTIFICATES
evidencing a beneficial ownership interest in a Trust that consists of
[description of underlying securities] (collectively, the "Assets") formed and
sold by
NATIONAL FINANCIAL SECURITIES CORPORATION
THIS TRUST CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
NATIONAL FINANCIAL SECURITIES CORPORATION, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. NEITHER THIS TRUST CERTIFICATE NOR THE UNDERLYING ASSETS ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
THIS CERTIFIES THAT:
[_______________________]
is the registered owner of the Percentage Interest evidenced by this Trust
Certificate in the Trust Certificates issued by NFSC Trust 20__-_ (the "Trust"),
which was created pursuant to a Trust Agreement, dated as specified above (the
"Series Agreement"), among National Financial Securities Corporation ("NFSC")
and the Trustee, a summary of certain of the pertinent provisions of which is
set forth hereinafter. The Series Agreement incorporates by reference NFSC's
Standard Terms to Trust Agreement (June 2000 Edition) (together with the Series
Agreement, the "Trust Agreement"). The Trust consists primarily of the Assets.
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned to them in the Trust Agreement. This Trust 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 Trust Certificate, by
virtue of the acceptance hereof, assents and by which such Holder is bound.
Distributions of principal of and interest on this Trust Certificate
(including the final distribution on this Trust Certificate) will be made
[semiannually on each ___________ and ___________,] or, if such day is not a
Business Day, the Business Day immediately following (a "Distribution Date"),
[to the Person in whose name this Trust Certificate is registered at the close
of business on the last Business Day of the month immediately preceding the
month of such distribution, (the related "Record Date")]. All sums distributed
on this Trust Certificate are payable in the coin or currency of the United
States of America as at the time of payment is legal tender for the payment of
public and private debts.
The interest due on the Trust Certificates for any Distribution Date
will equal ___% per annum. Principal and interest will be distributed on this
Trust Certificate in the manner specified in the Trust Agreement. Distributions
allocated to the Trust Certificates will be allocated among the Trust
Certificates pro rata based upon their respective percentage interests, with a
final distribution to be made upon retirement of this Trust Certificate as set
forth in the Trust Agreement.
This Trust Certificate is one of a duly authorized issue of Trust
Certificates designated as the National Financial Securities Corporation, NFSC
Trust 20__-_ (herein called the "Trust Certificates") and representing the
percentage interest in the Trust Certificates specified on the face hereof equal
to the quotient, expressed as a percentage, obtained by dividing the
denomination of this Trust Certificate specified on the face hereof by the
initial aggregate principal balance of all Trust Certificates. The Trust
Certificates will evidence in the aggregate 100% of the beneficial ownership of
the Trust.
The Certificates are limited in right of payment to collections and
recoveries respecting the Assets, all as more specifically set forth in the
Trust Agreement. So long as this Trust Certificate is registered in the name of
a Clearing Agency or its nominee, the Trustee will make payments of principal
and interest on this
-2-
Trust Certificate by wire transfers of immediately available funds to the
Clearing Agency or its nominee. Otherwise, all distributions made on any Trust
Certificate pursuant to the Trust Agreement will be made by or on behalf of the
Trustee on each Distribution Date to the Holder of such Trust Certificate as of
the related Record Date (i) by check mailed to such Holder at its address
reflected in the Certificate Register as of the related Record Date or (ii) if
such Holder is the Holder of Trust Certificates with aggregate initial
denominations of at least $1,000,000, by wire transfer of immediately available
funds to the account of such Holder, upon receipt by the Trustee of a written
request of such Holder accompanied by the appropriate wiring instructions at or
before the Closing Date or, in the case of any wire instructions delivered after
the Closing Date, at least five Business Days prior to the related Record Date.
A fee may be charged by the Trustee to a Holder of Trust Certificates for any
distribution made to such Holder by wire transfer. Notwithstanding the above,
the final distribution on this Trust Certificate will be made after due notice
by the Trustee of the pendency of such distribution and only upon presentation
and surrender of this Trust Certificate at the office or agency of the Trustee
specified in the final distribution notice to Certificateholders.
The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of NFSC
and the Trustee and the rights of the Holders under the Trust Agreement at any
time by NFSC and the Trustee, with the consent of the Holders of Trust
Certificates evidencing at least a majority of the Voting Rights. Any such
consent by the Holder of this Trust Certificate shall be conclusive and binding
on such Holder and upon all future Holders of this Trust Certificate and of any
Trust Certificate issued upon the transfer or exchange hereof or in lieu
herefor, regardless of whether notation of such consent is made upon this Trust
Certificate. The Trust Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of the Trust
Certificates.
As provided in the Trust Agreement and subject to any limitations on
transfer of this Trust Certificate by a Clearing Agency or its nominee and
certain limitations set forth in the Trust Agreement, the transfer of this Trust
Certificate is registrable in the Certificate Register upon surrender of this
Trust Certificate for registration of transfer at the principal Corporate Trust
Office of the Trustee or such other offices or agencies appointed by the Trustee
for that purpose or such other locations, if any, provided in the Trust
Agreement, duly endorsed by, or accompanied by an assignment in the form
attached hereto or other written instrument of transfer in form satisfactory to
the Trustee and the Certificate Registrar duly executed by the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Trust Certificates in authorized denominations will be issued to the designated
transferee or transferees.
[Subject to the terms of the Trust Agreement, the Trust Certificates
will be registered as one or more certificates held by a Clearing Agency or its
nominee and beneficial interests will be held by Beneficial Owners through the
book-entry facilities of such Clearing Agency or its nominee in minimum
denominations of $1,000 and integral multiples of $1 in excess thereof.]
As provided in the Trust Agreement and subject to certain limitations
therein set forth, Trust Certificates are exchangeable for new Trust
Certificates in authorized denominations as requested by the Holder surrendering
the same. No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
transfer or exchange of Trust Certificates.
NFSC, the Trustee and the Certificate Registrar and any agent of NFSC,
the Trustee or the Certificate Registrar may treat the Person in whose name this
Trust Certificate is registered as the owner hereof for all purposes, and
neither NFSC, the Trustee, the Certificate Registrar nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Trust Agreement and the Trust created
thereby shall terminate upon payment to the Holders of all amounts held by or on
behalf of the Trustee and required to be paid to them
-3-
pursuant to the Trust Agreement following the earlier of (a) the final payment
or other liquidation of the last Asset remaining in the Trust or (b) a
Terminating Purchase pursuant to the terms of the Trust Agreement. Pursuant to
the terms of the Trust Agreement, (i) [NFSC] may make a Terminating Purchase or
cause a Terminating Purchase to be made on or after the Distribution Date on
which [termination provisions].
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Trust Certificate shall not
represent entitlement to any benefit under the Trust Agreement or be valid for
any purpose.
THIS TRUST CERTIFICATE AND THE TRUST AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK.
The Trustee has executed this Trust Certificate on behalf of the Trust
not in its individual capacity but solely as Trustee under the Trust Agreement
and the Trustee shall be liable hereunder only in respect of the assets of the
Trust.
-4-
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under its official seal.
Dated: ____ __, 20__ ________________________________________, NOT IN
ITS INDIVIDUAL CAPACITY, BUT SOLELY AS TRUSTEE
BY ___________________________
AUTHORIZED OFFICER
ATTEST
-----------------------------
AUTHORIZED OFFICER
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE TRUST CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED TRUST AGREEMENT.
________________________________________, AS
CERTIFICATE REGISTRAR
BY _____________________________
AUTHORIZED OFFICER
ABBREVIATIONS
The following abbreviations, when used in this Trust Certificate, shall be
construed as though they were written out in full according to applicable laws
or regulations:
TEN COM--as tenants in common UNIF GIFT MIN ACT--.....Custodian.. .
TEN ENT--as tenants by the (Cus) (Minor)
entireties Under Uniform Gifts to Minors
JT TEN--as joint tenants with Act .... .... ....
rights of survivor- (State)
ship and not as Tenants
in Common
Additional abbreviations may also be used though not
in the above list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
_______________________________________________________________________________
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE _______________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address of assignee)
the within Trust Certificate and does hereby irrevocably constitute and appoint
____________ (Attorney) to transfer the said Trust Certificate in the
Certificate Register of the within-named Trust, with full power of substitution
in the premises.
Dated: _________________ ________________________________
NOTICE: The signature to this
assignment must correspond with
the name as written upon the face
of this Certificate in every
particular without alteration or
enlargement or any change
whatever.
___________________________________________
SIGNATURE GUARANTEED: The signature
must be guaranteed by a commercial bank
or trust company or by a member firm
of the New York Stock Exchange or another
national securities exchange. Notarized or
witnessed signatures are not acceptable.
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds, to____________________________________________________________
for the account of _______________________________, account number
__________________, or, if mailed by check, to ____________________________.
Applicable reports and statements should be mailed to
____________________________________________. This information is provided by
__________________________________________________, the assignee named above, or
___________________________, as its agent.
Exhibit B to Standard Terms to Trust Agreement
----------------------------------------------
Form of Rule 144A Agreement - QIB Certification
NATIONAL FINANCIAL SECURITIES CORPORATION, NFSC TRUST 2000-_
TRUST CERTIFICATES
________________
(DATE)
[Name and Address of
the Trustee]
National Financial Securities Corporation
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
In connection with the purchase on the date hereof of the captioned
securities (the "Purchased Certificates"), the undersigned (the "Transferee")
hereby certifies and covenants to the transferor, National Financial Securities
Corporation ("NFSC"), the Trustee and the Trust as follows:
1. The Transferee is a "qualified institutional buyer" as that term
is defined in Rule 144A ("Rule 144A") promulgated under the Securities Act of
1933, as amended (the "1933 Act") and has completed the form of certification to
that effect attached hereto as Annex A1 (if the Transferee is not a registered
investment company) or Annex A2 (if the Transferee is a registered investment
company). The Transferee is aware that the sale to it is being made in reliance
on Rule 144A.
2. The Transferee understands that the Purchased Certificates have
not been registered under the 1933 Act or registered or qualified under any
state securities laws and that no transfer may be made unless the Purchased
Certificates are registered under the 1933 Act and under applicable state law or
unless an exemption from such registration is available. The Transferee further
understands that neither NFSC, the Trustee nor the Trust is under any obligation
to register the Purchased Certificates or make an exemption from such
registration available.
3. The Transferee is acquiring the Purchased Certificates for its
own account or for the account of a "qualified institutional buyer" (as defined
in Rule 144A, a "QIB"), and understands that such Purchased Certificates may be
resold, pledged or transferred only (a) to a person reasonably believed to be
such a QIB that purchases for its own account or for the account of a QIB to
whom notice is given that the resale, pledge or transfer is being made in
reliance on Rule 144A, or (b) pursuant to another exemption from registration
under the 1933 Act and under applicable state securities laws. In addition, such
transfer may be subject to additional restrictions, as set forth in Section 5.04
of the Standard Terms to the Trust Agreement (the "Standard Terms") referred to
below. By its execution of this agreement, the Transferee agrees that it will
not resell, pledge or transfer any of the Purchased Certificates to anyone
otherwise than in strict compliance with Rule 144A, or pursuant to another
exemption from registration under the 1933 Act and all applicable state
securities laws, and in strict compliance with the transfer restrictions set
forth in Section 5.04 of the Standard Terms. The Transferee will not attempt to
transfer any or all of the Purchased Certificates pursuant to Rule 144A unless
the Transferee offers and sells such Certificates only to QIBs or to offerees or
purchasers that the Transferee and any person acting on behalf of the Transferee
reasonably believe (as described in paragraph (d)(l) of Rule 144A) is a QIB.
4. The Transferee has been furnished with all information that it
requested regarding (a) the Purchased Certificates and distributions thereon and
(b) the Trust Agreement referred to below.
5. If applicable, the Transferee has complied, will comply in all
material respects with applicable regulatory guidelines relating to the
ownership of mortgage derivative products.
All capitalized terms used but not otherwise defined herein have the
respective meanings assigned thereto in the Trust Agreement, dated as of
_____________ 1, 20__, which incorporates by reference the Standard Terms
thereto (June 2000 Edition), among NFSC and ____________________, as Trustee,
pursuant to which the Purchased Certificates were issued.
IN WITNESS WHEREOF, the undersigned has caused this Rule 144A
Agreement to be executed by its duly authorized representative as of the day and
year first above written.
[TRANSFEREE]
By:
Name: ________________________________
Title: ________________________________
Annex A1 to Exhibit B
TRANSFEREES OTHER THAN REGISTERED INVESTMENT COMPANIES
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Transferee.
2. The Transferee is a "qualified institutional buyer" as that term
is defined in Rule 144A ("Rule 144A") promulgated under the Securities Act of
1933, as amended (the "1933 Act"), because (a) the Transferee owned and/or
invested on a discretionary basis at least $____________ in securities [Note to
reviewer -the amount in the previous blank must be at least $100,000,000 unless
the Transferee is a dealer, in which case the amount filled in the previous
blank must be at least $10,000,000.] (except for the excluded securities
referred to in paragraph 3 below) as of _______________ [specify a date on or
since the end of the Transferee's most recently ended fiscal year] (such amount
being calculated in accordance with Rule 144A) and (b) the Transferee meets the
criteria listed in the category marked below.
_____ Corporation, etc. The Transferee is an organization described in
Section 501(c)(3) of the Internal Revenue Code of 1986, as
amended, a corporation (other than a bank as defined in Section
3(a)(2) of the 1933 Act or a savings and loan association or
other similar institution referenced in Section 3(a)(5)(A) of the
Act), a partnership, or a Massachusetts or similar business
trust.
_____ Bank. The Transferee (a) is a national bank or banking
institution as defined in Section 3(a)(2) of the 1933 Act and is
organized under the laws of a state, territory or the District of
Columbia. The business of the Transferee is substantially
confined to banking and is supervised by the appropriate state or
territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its latest
annual financial statements as of a date not more than 16 months
preceding the date of this certification in the case of a U.S.
bank, and not more than 18 months preceding the date of this
certification in the case of a foreign bank or equivalent
institution, a copy of which financial statements is attached
hereto.
_____ Savings and Loan. The Transferee is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution referenced in
Section 3(a)(5)(A) of the 1933 Act. The Transferee is supervised
and examined by a state or federal authority having supervisory
authority over any such institutions or is a foreign savings and
loan association or equivalent institution and has an audited net
worth of at least $25,000,000 as demonstrated in its latest
annual financial statements as of a date not more than 16 months
preceding the date of this certification in the case of a U.S.
savings and loan association or similar institution, and not more
than 18 months preceding the date of this certification in the
case of a foreign savings and loan association or equivalent
institution, a copy of which financial statements is attached
hereto.
_____ Broker-dealer. The Transferee is a dealer registered pursuant to
Section 15 of the Certificates Exchange Act of 1934, as amended
(the "1934 Act").
_____ Insurance Company. The Transferee is an insurance company as
defined in Section 2(13) of the 1933 Act, whose primary and
predominant business activity is the writing of insurance or the
reinsuring of risks underwritten by insurance companies and which
is subject to supervision by the insurance commissioner or a
similar official or agency of a state, territory or the District
of Columbia.
_____ State or Local Plan. The Transferee is a plan established and
maintained by a state, its political subdivisions, or any agency
or instrumentality of a state or its political subdivisions, for
the benefit of its employees.
_____ ERISA Plan. The Transferee is an employee benefit plan within
the meaning of Title I of the Employee Retirement Income
Certificate Act of 1974, as amended.
_____ Investment Adviser. The Transferee is an investment adviser
registered under the Investment Advisers Act of 1940, as
amended.
_____ Other. The Transferee qualifies as a "qualified institutional
buyer" as defined in Rule 144A on the basis of facts other than
those listed in any of the entries above. If this response is
marked, the Transferee must certify on additional pages, to be
attached to this certification, to facts that satisfy the
Servicer that the Transferee is a "qualified institutional
buyer" as defined in Rule 144A.
3. The term "securities" as used herein does not include (a)
securities of issuers that are affiliated with the Transferee, (b) securities
constituting the whole or part of an unsold allotment to or subscription by the
Transferee, if the Transferee is a dealer, (c) bank deposit notes and
certificates of deposit, (d) loan participations, (e) repurchase agreements, (f)
securities owned but subject to a repurchase agreement and (g) currency,
interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Transferee, the Transferee
used the cost of such securities to the Transferee and did not include any of
the securities referred to in the preceding paragraph. Further, in determining
such aggregate amount, the Transferee may have included securities owned by
subsidiaries of the Transferee, but only if such subsidiaries are consolidated
with the Transferee in its financial statements prepared in accordance with
generally accepted accounting principles and if the investments of such
subsidiaries are managed under the Transferee's direction. However, such
securities were not included if the Transferee is a majority-owned, consolidated
subsidiary of another enterprise and the Transferee is not itself a reporting
company under the 1934 Act.
5. The Transferee acknowledges that it is familiar with Rule 144A
and understands that the Transferor and other parties related to the Purchased
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Transferee may be made in reliance on Rule
144A.
6. Will the Transferee be purchasing _____ _____
the Purchased Certificates only YES NO
for the Transferee's own account?
If the answer to the foregoing question is "NO", the Transferee agrees
that, in connection with any purchase of securities sold to the Transferee for
the account of a third party (including any separate account) in reliance on
Rule 144A, the Transferee will only purchase for the account of a third party
that at the time is a "qualified institutional buyer" within the meaning of Rule
144A. In addition, the Transferee agrees that the Transferee will not purchase
securities for a third party unless the Transferee has obtained a current
representation letter from such third party or taken other appropriate steps
contemplated by Rule 144A to conclude that such third party independently meets
the definition of "qualified institutional buyer" set forth in Rule 144A.
7. The Transferee will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Transferee's purchase of the Purchased
Certificates will constitute a reaffirmation of this certification as of the
date of such purchase. In addition, if the Transferee is a bank or savings and
loan as provided above, the Transferee agrees that it will furnish to such
parties updated annual financial statements promptly after they become
available.
IN WITNESS WHEREOF, the undersigned has caused this certificate to be
executed by its duly authorized representative this ____ day of ___________,
20___.
______________________________
Print Name of Transferee
By:___________________________
Name:_________________________
Title:________________________
Date:_________________________
Annex A2 to Exhibit B
REGISTERED INVESTMENT COMPANIES
1. As indicated below, the undersigned is the President, Chief Financial
Officer or Senior Vice President of the entity purchasing the Purchased
Certificates (the "Transferee") or, if the Transferee is part of a Family of
Investment Companies (as defined in paragraph 3 below), is an officer of the
related investment adviser (the "Adviser").
2. The Transferee is a "qualified institutional buyer" as that term is
defined in Rule 144A ("Rule 144A") promulgated under the Securities Act of 1933,
as amended (the "1933 Act"), because (a) the Transferee is an investment company
(a "Registered Investment Company") registered under the Investment Company Act
of 1940, as amended (the "1940 Act") and (b) as marked below, the Transferee
alone, or the Transferee's Family of Investment Companies, owned at least
$___________ [Note to reviewer - the amount in the previous blank must be at
least $100,000,000] in securities (other than the excluded securities referred
to in paragraph 4 below) as of ________________ [specify a date on or since the
end of the Transferee's most recently ended fiscal year]. For purposes of
determining the amount of securities owned by the Transferee or the Transferee's
Family of Investment Companies, the cost of such securities to the Transferee or
the Transferee's Family of Investment Companies was used.
_____ The Transferee owned $____________ in securities (other than the
excluded securities referred to in paragraph 4 below) as of the end
of the Transferee's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
_____ The Transferee is part of a Family of Investment Companies which
owned in the aggregate $____________ in securities (other than the
excluded securities referred to in paragraph 4 below) as of the end
of the Transferee's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two
or more Registered Investment Companies except for a unit investment trust whose
assets consist solely of shares of one or more Registered Investment Companies
(provided that each series of a "series company," as defined in Rule 18f-2 under
the 1940 Act, shall be deemed to be a separate investment company) that have the
same investment adviser (or, in the case of a unit investment trust, the same
depositor) or investment advisers (or depositors) that are affiliated (by virtue
of being majority-owned subsidiaries of the same parent or because one
investment adviser is a majority-owned subsidiary of the other).
4. The term "securities" as used herein does not include (a) securities
of issuers that are affiliated with the Transferee or are part of the
Transferee's Family of Investment Companies, (b) bank deposit notes and
certificates of deposit, (c) loan participations, (d) repurchase agreements, (e)
securities owned but subject to a repurchase agreement and (f) currency,
interest rate and commodity swaps.
5. The Transferee is familiar with Rule 144A and understands that the
parties to which this certification is being made are relying and will continue
to rely on the statements made herein because one or more sales to the
Transferee will be in reliance on Rule 144A. In addition, the Transferee will
only purchase for the Transferee's own account.
6. The undersigned will notify the parties to which this certification
is made of any changes in the information and conclusions herein. Until such
notice, the Transferee's purchase of the Purchased Certificates will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.
Exhibit 6- Page 1
IN WITNESS WHEREOF, the undersigned has caused this certificate to be
executed by its duly authorized representative this ____ of ____________, 20___.
______________________________
[Print Name of Transferee or
Adviser]
By: __________________________
Name: ________________________
Title: _______________________
______________________________
IF AN ADVISER:
[Print Name of Transferee]
Date: ___________, 20__
Exhibit 6- Page 2
Exhibit C to Standard Terms to Trust Agreement
----------------------------------------------
Form of Transferee Agreement
NATIONAL FINANCIAL SECURITIES CORPORATION, NFSC TRUST 2000-_
TRUST CERTIFICATES
---------------
[Name of Transferee]
----------------
(DATE)
[NAME AND ADDRESS OF TRUSTEE]
National Financial Securities Corporation
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Re: NFSC Trust 20__-_
Trust Certificates, representing a [___% Percentage Interest]
[$ denomination]
Ladies and Gentlemen:
The undersigned (the "Transferee") proposes to purchase all or some of the
Trust Certificates (the "Purchased Certificates"), issued by the Trust
established pursuant to a trust agreement, dated as of ____________ (the "Series
Agreement"), among National Financial Securities Corporation ("NFSC") and
__________________, as Trustee, which incorporates by reference NFSC's Standard
Terms to Trust Agreement (June 2000 Edition) (the "Standard Terms," and,
collectively with the Series Agreement, the "Agreement"). In doing so the
Transferee hereby acknowledges and agrees as follows:
Section 1. Definitions. Each capitalized term used herein and not otherwise
-----------
defined herein shall have the meaning ascribed to it in the Agreement.
Section 2. Representations and Warranties of the Transferee. In connection
------------------------------------------------
with the proposed transfer of the Purchased Certificates, the Transferee
represents and warrants to NFSC, the Trustee and the Trust as follows:
(a) The Transferee is purchasing the Purchased Certificates for its own
account as principal for investment purposes and not with a view to the
distribution of the Purchased Certificates, in whole or in part, in violation of
Section 5 of the Securities Act of 1933, as amended (the "Act").
(b) The Transferee has knowledge in financial and business matters and
is capable of evaluating the merits and risks of an investment in the Purchased
Certificates; the Transferee has sought such accounting, legal and tax advice as
it has considered necessary to make an informed investment decision; and the
Transferee is able to bear the economic risk of an investment in the Purchased
Certificates and can afford a complete loss of such investment.
(c) The Transferee confirms that NFSC has made available to the
Transferee the opportunity to ask questions of, and receive answers from, NFSC
concerning the Trust, the purchase by the Transferee of the Purchased
Certificates and all matters relating thereto, and to obtain additional
information relating thereto that NFSC possesses or can acquire without
unreasonable effort or expense.
(d) The Transferee is an "accredited investor" as defined in paragraph
(1), (2), (3) or (7) of Rule 501(a) under the Act.
Exhibit 6- Page 3
Section 3. Covenants of the Transferee. In consideration of the proposed
transfer, the Transferee covenants with each of NFSC, the Trustee and the Trust
as follows:
(a) The Transferee will not make a public offering of the Purchased
Certificates, and will not reoffer or resell the Purchased Certificates in a
manner that would render the issuance and sale of the Purchased Certificates,
whether considered together with the resale or otherwise, a violation of the Act
or any state securities or "Blue Sky" laws or require registration pursuant
thereto.
(b) The Transferee agrees that, in its capacity as a holder of the
Purchased Certificates, it will assert no claim or interest in the underlying
securities by reason of owning the Purchased Certificates other than with
respect to amounts that may be properly and actually payable to the Transferee
pursuant to the terms of the Trust and the Purchased Certificates.
(c) The Transferee hereby agrees to abide by the terms of the Agreement
that will be applicable to it as a Certificateholder, including, without
limitation, the provisions contained in Section 5.04 of the Agreement.
(d) If applicable, the Transferee will comply in all material respects
with applicable regulatory guidelines relating to the ownership of mortgage
derivative products.
Section 4. Transfer of Purchased Certificates.
(a) The Transferee understands that the Purchased Certificates have not
been registered under the Act or any state securities laws and that no transfer
may be made unless the Purchased Certificates are registered under the Act and
under applicable state law or unless an exemption from such registration is
available. If requested by the Trustee, the Transferee and the Holder of
Purchased Certificates who desires to effect this transfer have certified to the
Trustee, and NFSC as to the factual basis for the registration or qualification
exemption relied upon. The Transferee further understands that neither NFSC, the
Trustee nor the Trust is under any obligation to register the Purchased
Certificates or make an exemption from such registration available.
(b) In the event that the transfer is to be made within three years of
the date the Purchased Certificates were acquired by a non-Affiliate of NFSC
from NFSC or an Affiliate of NFSC, the Trustee may require an Opinion of Counsel
(which shall not be an expense of NFSC or the Trustee) that such transfer is not
required to be registered under the Act or state securities laws.
(c) Any Certificateholder desiring to effect a transfer shall, and does
hereby agree to, indemnify NFSC and the Trustee against any liability that may
result if the transfer is not exempt under federal or applicable state
securities laws.
(d) The transfer of the Purchased Certificates may be subject to
additional restrictions, as set forth in Section 5.04 of the Standard Terms of
the Trust Agreement, a copy of which is attached hereto as Annex A.
All capitalized terms used but not otherwise defined herein have the
respective meanings assigned thereto in the Trust Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Transferee
Certification and Agreement to be validly executed by its duly authorized
representative this ____ day of ________, 20__.
By: ________________________
Name: ______________________
Its: _______________________
Exhibit 6- Page 4
Annex A to Exhibit C
ATTACH COPY OF SECTION 5.04 OF THE
STANDARD TERMS TO TRUST AGREEMENT
Exhibit 6- Page 5
Exhibit D to Standard Terms to Trust Agreement
----------------------------------------------
Form of Benefit Plan Affidavit
Re: National Financial Securities Corporation
NFSC Trust 20__-_ (the "Trust")
Trust Certificates
STATE OF ___________ )
) ss:
CITY/COUNTY OF _________ )
Under penalties of perjury, I, the undersigned, declare that, to the best
of my knowledge and belief, the following representations are true, correct, and
complete.
1. That I am a duly authorized officer of __________________________, a
_________ corporation (the "Purchaser"), whose taxpayer identification number is
__________, and on behalf of which I have the authority to make this affidavit.
2. That the Purchaser is acquiring $_________ principal amount of Trust
Certificates ("the Purchased Certificates"), representing an interest in the
Trust.
3. The Purchaser either:
(i) (A) is not a plan ("Plan") described in or subject to the
Department of Labor regulations set forth in 29 C.F.R. ss. 2510.3-101 (the
"Plan Asset Regulations"), a person acting on behalf of a Plan, or a person
using the assets of a Plan and (B) either (I) is not an insurance company
or (II) is an insurance company, in which case none of the funds used by
the Purchaser in connection with its purchase of the Purchased Certificates
constitute plan assets as defined in the Plan Asset Regulations ("Plan
Assets") and its purchase of the Purchased Certificates shall not result in
the certificates issued by or the assets of the Trust being deemed to be
Plan Assets;
(ii) is an insurance company and (A) the Purchaser is acquiring the
Purchased Certificates with funds held in an "insurance company general
account" (as defined in Section V(e) of Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60"), as published in 60 Fed. Reg. 35925 (July
12, 1995)), (B) there is no Plan with respect to which the amount of such
general account's reserves and liabilities for all contracts held by or on
behalf of such Plan and all other Plans maintained by the same employer, or
its affiliates (as defined in Section V(a)(1) of PTCE 95-60), or by the
same employee organization exceeds or will exceed 10% of the total of all
reserves and liabilities of such general account (as such amounts are
determined under Section I(a) of PTCE 95-60) at the date of acquisition,
(C) the purchase of the Purchased Certificates is not part of an agreement,
arrangement, or understanding designed to benefit a party in interest, and
(D) the conditions of Prohibited Transaction Exemption __________ [INSERT
SPECIFIC UNDERWRITER'S EXEMPTION OR PTE 83-1] (except for the conditions
stated in section II(A)(2) and (3) thereof) are met; or
(iii) has provided a "Benefit Plan Opinion," obtained at the
Purchaser's expense, satisfactory to NFSC and the Trustee. A Benefit Plan
Opinion is an opinion of counsel to the effect that the proposed transfer
will not (a) cause the assets of the Trust to be regarded as Plan Assets,
(b) give rise to a fiduciary duty under the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), on the part of NFSC or the
Trustee, or (c) be treated as, or result in, a prohibited transaction under
Section 406 or 407 of ERISA or Section 4975 of the Code.
Exhibit 6- Page 6
Capitalized terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Trust Agreement, dated as of ____________
__, 20__, which incorporates by reference the Standard Terms thereto (June 2000
Edition), among NFSC, and _________________________, as Trustee.
IN WITNESS WHEREOF, the Purchaser has caused this instrument to be duly
executed on its behalf, by its duly authorized officer this ____ day of
___________, 20__.
____________________________
[Name of Purchaser]
By: ________________________
Name: ______________________
Its: _______________________
Personally appeared before me ________________, known or proved to me to be
the same person who executed the foregoing instrument and to be a
_________________________ of the Purchaser, and acknowledged to me that he
executed the same as his or her free act and deed and as the free act and deed
of the Purchaser.
Subscribed and sworn before me
this ______ day of ___________, ____
___________________________________
Notary Public
My commission expires: ______________________________
Exhibit 6- Page 7
