EXHIBIT 4.1
TRUST AGREEMENT
between
CORPORATE ASSET BACKED CORPORATION,
as Depositor
and
THE BANK OF NEW YORK,
as Trustee and Option Agent
CABCO
Series 2002-1 Trust (AOL Time Warner Inc.)
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
AND AGREEMENT PROVISIONS*
Trust Indenture
Act Section Agreement Section
----------- -----------------
310(a)(1) 7.14(a)
(a)(2) 7.14(a)
(a)(3) 7.13
(a)(4) 7.1(f)
(a)(5) 7.14(a)
(b) 7.14(b)
(c) Not Applicable
311(a) 7.4
(b) 7.4
(c) Not Applicable
312(a) 3.7(a), 3.8(a)
(b) 3.8(b)
(c) 3.8(c)
313(a) 7.6
(b) 7.6
(c) 7.6
(d) 7.6
314(a) 4.1(a), 4.1(b)
315(a) 7.1(a), 7.1(b),
7.1(c)
(b) 7.1(g)
(d) 7.1(c)
(e) 7.1(j)
316(a)(1) 7.5(a)
316(a)(2) Not Applicable
316(b) 6.3(c)
316(c) 3.7(b)
317(a) Not Applicable
317(b) 6.4
318(a) 10.12
--------
* This reconciliation and tie shall not, for any purpose, be deemed to be
part of the within agreement.
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TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE....................... 1
Section 1.1. Definitions................................................... 1
Section 1.2. Other Definitional Provisions................................. 9
Section 1.3. Incorporation by Reference of Trust Indenture Act............. 9
ARTICLE II ORGANIZATION.................................................... 9
Section 2.1. Creation of Trust; Trust Assets and Obligations............... 9
Section 2.2. Name of Trust................................................. 11
Section 2.3. Business of Trust............................................. 11
Section 2.4. Trust Office.................................................. 11
Section 2.5. Purposes and Powers........................................... 11
Section 2.6. Appointment of Trustee........................................ 12
Section 2.7. Declaration of Trust.......................................... 12
Section 2.8. Liability of Certificateholders............................... 12
Section 2.9. Title to Trust Property....................................... 12
Section 2.10. Situs of Trust................................................ 12
Section 2.11. Representations and Warranties of Depositor................... 13
Section 2.12. Tax Treatment................................................. 14
Section 2.13. Retained Interest............................................. 14
Section 2.14. Additional Underlying Securities and Certificates............. 14
Section 2.15. Call Options, Exercise of Call Options and Exchange of
Certificates for Underlying Securities........................ 15
Section 2.16. Mergers....................................................... 19
Section 2.17. Grant of Security Interest.................................... 19
ARTICLE III THE CERTIFICATES............................................... 21
Section 3.1. The Certificates.............................................. 21
Section 3.2. Form of the Certificates...................................... 22
Section 3.3. Execution, Authentication and Delivery........................ 22
Section 3.4. Registration of Certificates; Registration of Transfer
and Exchange of Certificates.................................. 22
Section 3.5. Mutilated, Destroyed, Lost or Stolen Certificates............. 23
Section 3.6. Persons Deemed Certificateholders............................. 24
Section 3.7. Access to List of Certificateholders' Names and
Addresses..................................................... 24
Section 3.8. Preservation of Information; Communications to
Certificateholders............................................ 25
Section 3.9. Legend on Global Certificates................................. 25
Section 3.10. Definitive Certificates....................................... 26
Section 3.11. [Reserved].................................................... 26
Section 3.12. Transfer Restrictions on Class B-1 Certificates............... 26
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Section 3.13. Actions by Certificateholders................................. 29
Section 3.14. Additional Legends............................................ 30
ARTICLE IV EXCHANGE ACT REPORTING BY TRUSTEE............................... 31
Section 4.1. Exchange Act Reporting By Trustee............................. 31
ARTICLE V ACTIONS BY TRUSTEE............................................... 32
Section 5.1. Prior Notice to Certificateholders and Option Agent
with Respect to Certain Matters............................... 32
Section 5.2. Action by Trustee with Respect to Certain Matters............. 32
Section 5.3. Majority Control.............................................. 33
ARTICLE VI APPLICATION OF TRUST FUNDS; CERTAIN DUTIES...................... 33
Section 6.1. Establishment of Collection Account and Securities
Account....................................................... 33
Section 6.2. Application of Trust Funds.................................... 34
Section 6.3. Certain Provisions Applicable to all Distributions to
Certificateholders............................................ 36
Section 6.4. Appointment of Paying Agent................................... 36
Section 6.5. Method of Payment............................................. 37
Section 6.6. Reports to Certificateholders................................. 37
Section 6.7. Accounting and Information to Certificateholders,
Internal Revenue Service and Others........................... 38
Section 6.8. Signature on Returns.......................................... 38
Section 6.9. No Implied Duties of the Depositor............................ 38
ARTICLE VII THE TRUSTEE.................................................... 39
Section 7.1. Duties of Trustee; Notice of Defaults......................... 39
Section 7.2. Rights of Trustee............................................. 40
Section 7.3. Acceptance of Trusts and Duties............................... 40
Section 7.4. Preferential Collection of Claims Against Trustee............. 42
Section 7.5. Action Upon Instruction by Certificateholders................. 42
Section 7.6. Furnishing of Documents; Reports to Certificateholders
and DTC....................................................... 43
Section 7.7. Representations and Warranties of Trustee..................... 43
Section 7.8. Reliance; Advice of Counsel................................... 45
Section 7.9. Trustee May Own Certificates.................................. 45
Section 7.10. Compensation and Indemnity.................................... 45
Section 7.11. Replacement of Trustee........................................ 46
Section 7.12. Merger or Consolidation of Trustee............................ 47
Section 7.13. Appointment of Co-Trustee or Separate Trustee................. 47
Section 7.14. Eligibility Requirements for Trustee.......................... 49
Section 7.15. Voting of the Underlying Securities Other than in the
Case of an Underlying Securities Event of Default............. 49
Section 7.16. Trustee's Enforcement and Voting of Underlying
Securities Upon an Underlying Securities Event of
Default....................................................... 51
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ARTICLE VIII TERMINATION OF AGREEMENT...................................... 53
Section 8.1. Termination of Agreement...................................... 53
ARTICLE IX AMENDMENTS...................................................... 54
Section 9.1. Allocation of Voting Rights................................... 54
Section 9.2. Amendments Without Consent of Certificateholders.............. 54
Section 9.3. Amendments With Consent of Certificateholders................. 54
Section 9.4. Form of Amendments............................................ 55
ARTICLE X MISCELLANEOUS.................................................... 55
Section 10.1. Certificateholders Have No Legal Title to Trust
Property...................................................... 55
Section 10.2. Limitations on Rights of Others............................... 55
Section 10.3. Notices....................................................... 56
Section 10.4. Tax Classification Election................................... 56
Section 10.5. Severability.................................................. 56
Section 10.6. Counterparts.................................................. 56
Section 10.7. Successors and Assigns........................................ 57
Section 10.8. No Petition Covenant.......................................... 57
Section 10.9. No Recourse................................................... 57
Section 10.10 Headings...................................................... 57
Section 10.11 Governing Law................................................. 57
Section 10.12 Conflict with Trust Indenture Act............................. 58
iv
Exhibit A -- Series 2002-1 Underlying Securities Schedule
Exhibit B -- Terms of the Certificates
Exhibit C -- Form of Class A-1 Certificate
Exhibit D -- Form of Class B-1 Certificate
Exhibit E -- Form of Investment Letter for Class B-1 Certificates
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TRUST AGREEMENT
TRUST AGREEMENT, dated as of June 21, 2002 (this "Agreement"), between
Corporate Asset Backed Corporation, as depositor (the "Depositor"), and The Bank
of New York, as trustee (the "Trustee") for CABCO Series 2002-1 Trust (AOL Time
Warner Inc.) (the "Trust") and as option agent (in such capacity, the "Option
Agent") for the holders of the Certificates from time to time with respect to
the Call Options described below.
The Trust is issuing $50,000,000 in initial aggregate certificate
principal balance of class A-1 callable certificates (the "Class A-1
Certificates"), entitled to distributions of principal, premium (if any) and
interest, and $50,000,000 in initial aggregate Certificate Notional Amount of
class B-1 callable certificates (the "Class B-1 Certificates") entitled to
distributions of interest only (the "Class B-1 Certificates", and collectively
with the Class A-1 Certificates, the "Certificates").
AGGREGATE AGGREGATE
CERTIFICATE PRINCIPAL CERTIFICATE NOTIONAL ANNUAL PASS-
TITLE OF SECURITY BALANCE AMOUNT THROUGH RATE
----------------- ------- ------ ------------
Class A-1 $50,000,000 N/A 7.625%
Certificates
Class B-1 N/A $50,000,000 0.075%
Certificates
The Trust is acquiring the securities described in Exhibit A, excluding
the Retained Interest. The Certificates, in the aggregate, will evidence the
entire beneficial ownership of the assets of the Trust, including such
securities, subject to the liabilities of the Trust, if any. The Certificates
are subject to the Call Options.
In consideration of the mutual agreements herein contained, each party
agrees that the following terms and provisions shall govern the Certificates and
the Trust, for the benefit of all the other parties and the Certificateholders
and Option Holders to the extent provided herein.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions.
Except as otherwise specified herein or as the context may otherwise
require, the following terms have the respective meanings set forth below for
all purposes of this Agreement.
"Affiliate" means, with respect to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
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"Agreement" means this Trust Agreement.
"Available Funds" means, with respect to any Distribution Date and any
other date on which Underlying Securities are redeemed pursuant to the
Underlying Securities Indenture, or purchased, repurchased, prepaid or
liquidated in whole or in part, an amount (including any non-cash property)
equal to all amounts received on or with respect to the Underlying Securities
and on deposit in the Collection Account on such Distribution Date or other
date, as applicable.
"Available Information Event" means that the Underlying Securities Issuer
has suspended its Exchange Act reporting at a time when the Exchange Act
reporting requirements applicable to the Trust have not been suspended or
terminated.
"Benefit Plan Investor" means (a) an employee benefit plan (as defined in
Section 3(3) of ERISA) whether or not it is subject to the provisions of Title I
of ERISA, (b) a plan described in Section 4975(e)(1) of the Code, or (c) any
entity whose underlying assets include plan assets by reason of a plan's
investment in the entity.
"Business Day" means any day other than (i) a Saturday, a Sunday or a day
on which banking institutions in the City of New York are authorized or
obligated by law or executive order to be closed for business, or (ii) a day
that is not a business day for purposes of the Underlying Securities.
"Call Date" has the meaning specified in the Call Option Agreements.
"Call Notice" has the meaning specified in the Call Option Certificates.
"Call Option Agreement" means each of the Class A-1 Call Option Agreement
and the Class B-1 Call Option Agreement.
"Call Option Certificates" means the physical certificates evidencing the
Call Options, substantially in the forms attached as exhibits to the Call Option
Agreements.
"Call Options" means the call options with respect to the Class A-1
Certificates and the Class B-1 Certificates granted to the Depositor by UBS
Warburg LLC under the Call Option Agreements.
"Call Price" has the meaning specified in each Call Option Agreement.
"Called Certificates" has the meaning set forth in Section 2.15(c).
"Certificates" has the meaning specified in the preamble to this
Agreement.
"Certificate Notional Amount" means, initially, with respect to the Class
B-1 Certificates and each Certificate of such Class, the amount identified as
the initial Certificate Notional Amount with respect to such Class (in Section
3.1(b)) or Certificate, as applicable, and thereafter, such initial amount as
reduced by the aggregate of all amounts allocable to principal
2
previously distributed to Class A-1 Certificateholders, and as increased
pursuant to Section 2.14, if applicable.
"Certificate Owner" means any Person who is the beneficial owner of an
interest in any Certificate.
"Certificate Principal Balance" means, initially, with respect to the
Class A-1 Certificates and each Certificate of such Class, the amount identified
as the initial Certificate Principal Balance with respect to such Class (in
Section 3.1(b)) or Certificate, as applicable, and, thereafter, such initial
amount as reduced by the aggregate of all amounts allocable to principal
previously distributed to Class A-1 Certificateholders, and as increased
pursuant to Section 2.14, if applicable.
"Certificate Register" and "Certificate Registrar" have the respective
meanings specified in Section 3.4.
"Certificateholder" means each Person in whose name a Certificate is
registered on the Certificate Register.
"Class" means Certificates having the same terms and conditions and the
same relative rights and interests.
"Class A-1 Call Option Agreement" means the agreement among the Depositor,
UBS Warburg LLC and the Option Agent dated as of June 21, 2002, pursuant to
which the Class A-1 Options are issued.
"Class A-1 Certificates" has the meaning specified in the preamble to this
Agreement.
"Class A-1 Option" has the meaning specified in the Class A-1 Call Option
Agreement.
"Class B-1 Call Option Agreement" means the agreement among the Depositor,
UBS Warburg LLC and the Option Agent dated as of June 21, 2002, pursuant to
which the Class B-1 Options are issued.
"Class B-1 Certificates" has the meaning specified in the preamble to this
Agreement.
"Class B-1 Option" has the meaning specified in the Class B-1 Call Option
Agreement.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act.
"Closing Date" means June 21, 2002.
"Code" means the Internal Revenue Code of 1986.
3
"Collection Account" means the collection account established pursuant to
Section 6.1.
"Commission" means the Securities and Exchange Commission.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered,
which office is initially located at The Bank of New York, 0 Xxxx Xxxxx, Xxx
Xxxx, XX 00000, or the principal corporate trust office of any successor Trustee
as designated by such successor Trustee by notice to the Certificateholders and
each Rating Agency, or, in either case, such other office as the Trustee may
designate from time to time by notice to the Certificateholders and each Rating
Agency.
"Depositor" means Corporate Asset Backed Corporation, a Delaware
corporation, and any permitted successor or assignee.
"Depositor Order" means a written order signed by an authorized officer of
the Depositor.
"Distribution Date" means each May 1 and November 1 (or if any of those
dates is not a Business Day, the next succeeding Business Day) commencing
November 1, 2002, and ending on the earlier of the Final Distribution Date and
the date on which the Trust is terminated under this Agreement.
"DTC" means The Depository Trust Company and any successor.
"Eligible Trust Account" means a segregated account with (a) the corporate
trust department of the Trustee or (b) a trust company or corporation with trust
powers organized under the laws of the United States of America or any one of
the states thereof or the District of Columbia (or any domestic branch of a
foreign bank), having corporate trust powers and acting as trustee for funds
deposited in such account, so long as any of the securities of such depository
institution shall have a credit rating from each Rating Agency in one of its
four highest rating categories, and in the case of each of clauses (a) and (b)
that is identified and held separate and apart from the general assets of the
Trustee, and that contains only property held by the Trustee as fiduciary.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Executive Officer" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, President,
any Vice President, the Secretary or the Treasurer of such corporation and, with
respect to any partnership, any general partner thereof.
"Final Distribution Date" means May 1, 2032.
4
"Grant" means to sell, convey, assign, transfer, create, xxxxx x xxxx upon
and a security interest in and right to set-off against, deposit, set over and
confirm to the Trustee pursuant to this Agreement, and the terms "Granted" and
"Granting" have meanings correlative to the foregoing. A Grant of any Underlying
Securities or of any instrument shall include all rights, powers and options
(but none of the obligations) of the Granting party thereunder, including the
immediate and continuing right to claim for, collect, receive and give receipt
for principal, premium, if any, and interest payments in respect of such
Underlying Securities and all other moneys payable thereunder, to give and
receive notices and other communications, to make waivers or other agreements,
to exercise all rights and options, and generally to do and receive anything
that the Granting party was entitled to do or receive thereunder or with respect
thereto prior to the Grant.
"Initial Purchaser" means UBS Warburg LLC, in its capacity as initial
purchaser of the Class B-1 Certificates under the Purchase Agreement.
"Investment Company Act" means the Investment Company Act of 1940, as
amended.
"Moody's" means Xxxxx'x Investors Service, Inc., and any successor.
"Option Agent" means The Bank of New York, in its capacity as Option Agent
under each Call Option and each Call Option Agreement, and any successor in such
capacity as described in Section 2.1(b).
"Option Holder" means a holder of a Call Option.
"Opinion of Counsel" means one or more written opinions of counsel, who
may be employees of or counsel to the Depositor or any of its Affiliates, and
who shall be reasonably satisfactory to the Trustee, which opinion or opinions
shall be addressed to the Trustee and shall be in form and substance reasonably
satisfactory to the Trustee.
"Outstanding" means, as of any date of determination, all Certificates
theretofore authenticated and delivered under this Agreement except:
(a) Certificates previously cancelled by the Certificate Registrar
or delivered to the Certificate Registrar for cancellation;
(b) Certificates or portions thereof the payment for which money in
the necessary amount has been theretofore irrevocably deposited with the Trustee
in trust for the Certificateholders of such Certificates; and
(c) Certificates in exchange for or in lieu of which other
Certificates have been authenticated and delivered pursuant to this Agreement,
or the replacement Certificates thereof recovered by the Trustee pursuant to
Section 3.5(b) when a Protected Purchaser presents proof satisfactory to the
Trustee that it holds the original Certificates and is a Protected Purchaser;
5
provided that in determining whether the Certificateholders have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Certificates owned by or pledged to the Depositor, the Trustee in its individual
capacity, or any Affiliate of either of the foregoing Persons shall be
disregarded and for purposes of determining the requisite Certificate Principal
Balance of Certificates shall be deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Certificates that the Trustee actually knows to be so owned shall be so
disregarded. In order to give effect to the foregoing provision, the Depositor
shall promptly give or cause to be given written notice to the Trustee of any
Certificates to its knowledge owned by or pledged to the Depositor or any
Affiliate, and shall refrain (and use commercially reasonable efforts to cause
its Affiliates to refrain) from giving any such request, demand, authorization,
direction, notice, consent or waiver.
"Paying Agent" has the meaning specified in Section 6.4.
"Person" means any individual, corporation, estate, limited liability
company, partnership, joint venture, association, joint stock company, trust
(including any trust beneficiary), unincorporated organization or government or
any agency or political subdivision thereof.
"Placement Agency Agreement" means a placement agency agreement dated June
14, 2002, between UBS Warburg LLC and the Depositor in terms of which UBS
Warburg LLC agrees to act as placement agent for the Depositor in the sale of
the Call Options on a "best efforts" basis.
"Placement Agent" means UBS Warburg LLC, in its capacity as Placement
Agent under the Placement Agency Agreement.
"Proceeding" means any suit in equity, action at law or other judicial or
administrative proceeding.
"Protected Purchaser" has the meaning specified in the Uniform Commercial
Code as in effect in the State of New York.
"Purchase Agreement" means the purchase agreement dated June 14, 2002,
between the Initial Purchaser and the Depositor in terms of which the Initial
Purchaser agrees to purchase from the Depositor, and the Depositor agrees to
sell to the Initial Purchaser, the Class B-1 Certificates.
"QIB" has the meaning specified in Section 3.12(e).
"Rating Agency" means each of Moody's and Standard & Poor's.
"Rating Agency Condition" means with respect to any specified action, that
each Rating Agency shall have been given 10 days' prior notice of such action
and that such Rating Agency shall have notified the Trustee in writing that such
action will not result in a reduction or withdrawal of the then-current rating
of any Class of the Certificates.
6
"Record Date" means, with respect to each Distribution Date, the 15th
calendar day prior to such Distribution Date, whether or not a Business Day.
"Responsible Officer" means, with respect to the Trustee, any officer
within the Corporate Trust Office of the Trustee, including any Senior Vice
President, Vice President, Assistant Vice President, Secretary, Assistant
Secretary or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"Retained Interest" means, (a) with respect to the Underlying Securities
Granted to the Trustee on the Closing Date, the interest accrued on such
Underlying Securities from and including April 8, 2002, to but excluding the
Closing Date, and (b) with respect to additional Underlying Securities Granted
to the Trustee pursuant to the provisions of Section 2.14 on any other date,
interest accrued from and including the later of (x) April 8, 2002, and (y) the
immediately preceding Underlying Securities Payment Date, to but excluding the
date of the Grant of such additional Underlying Securities.
"Rule 144A" has the meaning specified in Section 3.12(e).
"Securities Account" means the securities account established pursuant to
Section 2.17.
"Securities Intermediary" means The Bank of New York, maintaining the
Securities Account in its capacity as securities intermediary within the meaning
of Section 8-102 of the UCC, and any qualified successor.
"Standard & Poor's" means Standard & Poor's Ratings Services, a division
of The XxXxxx-Xxxx Companies, Inc., and any successor.
"Termination Date" has the meaning set forth in Section 8.1.
"TIA" means the Trust Indenture Act of 1939, as amended.
"Treasury Regulations" means regulations, including proposed or temporary
regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" means the trust created pursuant to this Agreement.
"Trust Assets" means the Underlying Securities, any proceeds thereof, the
Collection Account, and any other assets of the Trust from time to time.
"Trustee" means the Trustee specified in this Agreement and any successor
qualifying under Section 7.14.
7
"UCC" means the Uniform Commercial Code as in effect from time to time in
the State of New York.
"Underlying Securities" has the meaning set forth in Section 2.1 and
includes any additional Underlying Securities Granted to the Trustee pursuant to
the provisions of Section 2.14.
"Underlying Securities Event of Default" means the occurrence of an event
of default under the Underlying Securities Indenture, and the failure of the
Underlying Securities Issuer to pay the Whole Amount Due after demand by the
Trustee made pursuant to Section 7.16(a) or otherwise to cure such default in
accordance with the provisions of the Underlying Securities Indenture.
"Underlying Securities Guarantors" means each of America Online, Inc.,
Time Warner Inc., Time Warner Companies, Inc. and Xxxxxx Broadcasting System,
Inc.
"Underlying Securities Indenture" means the indenture among the Underlying
Securities Issuer, the Underlying Securities Guarantors and the Underlying
Securities Indenture Trustee.
"Underlying Securities Indenture Trustee" means JPMorgan Chase Bank and
any successor provided for in the Underlying Securities Indenture.
"Underlying Securities Issuer" means the issuer of the Underlying
Securities and any successor provided for in the Underlying Securities
Indenture.
"Underlying Securities Payment Date" means each May 1 and November 1
commencing November 1, 2002, and any other date on which Underlying Securities
are redeemed pursuant to the Underlying Securities Indenture, or repurchased,
prepaid or liquidated in whole or in part or on which any unscheduled payment is
made on the Underlying Securities.
"Underwriters" means UBS Warburg LLC and RBC Xxxx Xxxxxxxx Inc., each in
its capacity as Underwriter under the Underwriting Agreement.
"Underwriting Agreement" means the underwriting agreement between the
Depositor and the Underwriters, dated June 14, 2002 pursuant to which the
Underwriters agree to purchase from the Depositor, and the Depositor agrees to
sell to the Underwriters, the Class A-1 Certificates.
"Voting Rights" means the voting rights attaching to each Class of
Certificates, as specified in Article IX of this Agreement.
"Whole Amount Due" has the meaning assigned to such term in Section
7.16(a) hereof.
8
Section 1.2. Other Definitional Provisions.
All references in this Agreement to Articles, Sections, subsections and
Exhibits are to Articles, Sections, subsections and Exhibits to this Agreement
unless otherwise specified. All terms defined in this Agreement shall have the
defined meanings when used in any certificate, notice, Call Option, Certificate
or other document made or delivered pursuant hereto, unless otherwise defined
therein. Whenever used in this Agreement, except as otherwise expressly provided
or unless the context otherwise requires, any noun or pronoun shall be deemed to
include the plural as well as the singular and to cover both genders.
Section 1.3. Incorporation by Reference of Trust Indenture Act.
Whenever this Agreement refers to a provision of the TIA, such provision
is incorporated by reference in and made a part of this Agreement. The following
TIA terms used in this Agreement have the following meanings:
"indenture securities" means the Certificates.
"obligor" on the Certificates means the Trustee on behalf of the Trust
and, to the extent specified in this Agreement, the Depositor.
All other TIA terms used in this Agreement that are defined by the TIA,
including by reference to another statute, or defined by a Commission rule have
the respective meanings assigned to them by such definitions.
ARTICLE II
ORGANIZATION
Section 2.1. Creation of Trust; Trust Assets and Obligations.
(a) A Trust is hereby created under the laws of the State of New York for
the benefit of the Certificateholders. The assets of the Trust shall consist of:
(i) the securities described in Exhibit A, exclusive of the Retained
Interest, which are being Granted, transferred and sold to the Trustee by
the Depositor simultaneously with the execution of this Agreement, and any
additional Underlying Securities Granted to the Trustee pursuant to
Section 2.14 (in which event Exhibit A shall be amended to reflect the
amount and date of such Grant), and
(ii) all right, title and interest in and to distributions on the
securities described in Exhibit A after the date of this Agreement,
exclusive of the Retained Interest, including any distributions on any
additional Underlying Securities Granted to the Trustee pursuant to
Section 2.14.
The securities described in Exhibit A, exclusive of the Retained
Interest, as amended after the Closing Date to reflect any subsequent Grant of
additional Underlying Securities, are referred to in this Agreement as the
"Underlying Securities". The Trustee shall
9
hold the assets of the Trust for the benefit of the Certificateholders, subject
to the obligations of the Trust, if any.
(b) The parties acknowledge that UBS Warburg LLC, as the initial
purchaser, and then sole holder, of the Certificates, has granted the Call
Options to the Depositor under the Call Option Agreements, and the Depositor
intends to sell the Call Options, through UBS Warburg LLC as Placement Agent
under the Placement Agency Agreement, to one or more third party investors. By
its purchase of a Certificate, (i) each Certificateholder agrees to assume the
obligation to perform the related Call Option on the terms and conditions
contained in the applicable Call Option Agreement, permitting the Option Holder
or its assignee to purchase such Certificate at the Call Price and at the times
specified in such Call Option Agreement and (ii) each Certificateholder that
purchases a Class A-1 Certificate directly from the Underwriters, in the case of
the Class A-1 Certificates, or the Initial Purchaser, in the case of the Class
B-1 Certificates, agrees to make the "integration election" set forth in Section
2.12 below. By its purchase of a Certificate, each Certificateholder further
agrees (x) to appoint The Bank of New York as its agent ("Option Agent") to act
on its behalf with respect to the related Call Option under this Agreement and
the applicable Call Option Agreement, and (y) that upon any transfer of a
Certificate, the transferor of the Certificate shall be released from its
obligation to perform the related Call Option, and the transferor's appointment
of The Bank of New York as its agent with respect thereto shall thereupon
terminate. Under the terms of the Call Options, each single Call Option relating
to $25.00 in Certificate Principal Balance of Class A-1 Certificates or $25.00
in Certificate Notional Amount of Class B-1 Certificates, respectively, may be
assigned by the holder thereof in whole but not in part by transfer in
accordance with the terms thereof to any person other than to the Depositor. The
Call Options are not obligations of or securities issued by the Trust, and are
enforceable by each Option Holder against the Certificateholders and the Option
Agent to the extent set forth in the Call Option Agreements; provided, however,
that each Certificateholder agrees, by accepting a Certificate, that following
an exercise of a Call Option in compliance with the Call Option Agreement, the
Trustee shall treat the Option Holder as the Certificateholder thereof, and
distribute the Underlying Securities to the Option Holder, as provided in
Section 2.15 hereof.
(c) The Depositor, concurrently with the execution and delivery
hereof, does hereby Grant to the Trustee, on behalf and for the benefit of the
Certificateholders and without recourse, all the right, title and interest of
the Depositor in, to and under the Underlying Securities, now existing or
hereafter acquired and all other assets included or to be included in the Trust
for the benefit of the Certificateholders. The Grant will include all interest,
premium (if any) and principal received by or on behalf of the Depositor of, on
or with respect to any Underlying Securities due after the Closing Date,
exclusive of the Retained Interest, which has not been Granted to the Trustee.
(d) In connection with the Grant referred to in the preceding
paragraph, on the Closing Date, the Depositor shall deliver the Underlying
Securities to the Trustee through the facilities of DTC, and the Trustee shall
accept delivery of the Underlying Securities and shall credit the Underlying
Securities to a trust account of the Trustee, or its authorized agent.
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(e) The Grant of such Underlying Securities by the Depositor
accomplished hereby is absolute and is intended by the parties hereto as a sale.
Section 2.2. Name of Trust.
The name of the Trust is CABCO Series 2002-1 Trust (AOL Time Warner Inc.).
Section 2.3. Business of Trust.
Subject to Section 2.5, the Trustee may conduct the business of the Trust,
make and execute contracts and other instruments on behalf of the Trust and xxx
and be sued on behalf of the Trust or in the name of the Trust, subject to the
terms of this Agreement. In order to effectuate the purpose of the Trust, on the
Closing Date the Trustee shall, on behalf of the Trust, (a) acquire from the
Depositor the Underlying Securities for the benefit of the Certificateholders;
(b) issue the Certificates to or upon the order of the Depositor for sale
pursuant to the Underwriting Agreement (in the case of the Class A-1
Certificates) or pursuant to the Purchase Agreement (in the case of the Class
B-1 Certificates); and (c) enter into such other agreements, execute such other
documents and take such other actions as the Depositor may direct in conjunction
with the issuance of the Certificates.
Section 2.4. Trust Office.
The office of the Trust shall be in care of the Trustee at the Corporate
Trust Office, or at such other address as the Trustee may designate by written
notice to the Certificateholders, the Rating Agencies and the Depositor. All
Certificates may be surrendered for registration of transfer or exchange at the
Corporate Trust Office as provided in Section 3.4 and all notices and demands to
or upon the Trustee in respect of the Certificates and this Agreement may be
served on the Trustee at the Corporate Trust Office. The Trustee shall give
prompt written notice to the Depositor, the Rating Agencies and to the
Certificateholders of any change in the location of the Certificate Register or
any such office or agency.
Section 2.5. Purposes and Powers.
The purpose of the Trust is to engage in the following activities:
(a) to acquire from the Depositor, and thereafter to hold, the
Underlying Securities;
(b) to issue the Certificates;
(c) to distribute to the Certificateholders as provided in Articles
VI and VIII hereof amounts, if any, received by the Trust on, or in respect of,
the Underlying Securities;
(d) to distribute to the Certificateholders the proceeds of the
exercise of Call Options by the Option Holders and to distribute to the Option
Holders any Underlying Securities for which the Called Certificates are
exchanged; and
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(e) to engage in those limited activities, upon appropriate
direction of the Depositor, including entering into agreements that are
necessary, suitable or convenient to accomplish the foregoing or are incidental
thereto or connected therewith, provided that they are not inconsistent with the
intended classification of the Trust as a grantor trust for federal income tax
purposes.
The Trust is hereby authorized to engage in the foregoing activities. The
Trust shall not (a) engage in any activity not required by the terms of this
Agreement, or (b) issue or sell any certificates or other obligations other than
the Certificates and additional Certificates issued pursuant to Section 2.14, or
incur, assume or guaranty any indebtedness. After the Closing Date, and subject
to Sections 5.2 and 5.3 below, the Trust shall not purchase or otherwise acquire
any assets except as provided by Section 2.14, or, subject to Section 7.15 and,
in the case of an Underlying Securities Event of Default, Section 7.16, agree to
any modification of the terms of the Underlying Securities. The Trust shall not
take any action that is inconsistent with its intended classification as a
grantor trust for federal income tax purposes.
Section 2.6. Appointment of Trustee.
The Depositor hereby appoints the Trustee as trustee of the Trust
effective as of the date hereof, to have all the rights, powers and duties set
forth herein.
Section 2.7. Declaration of Trust.
The Trustee hereby declares that it shall hold the Trust Assets in trust
upon and subject to the conditions set forth in this Agreement for the use and
benefit of the Certificateholders, subject to the obligations of the Trust, if
any. The Underlying Securities and their proceeds shall be held in a segregated
account of the Trustee that is identified and held separate and apart from the
general assets of the Trustee and that contains only property held by the
Trustee as fiduciary.
Section 2.8. Liability of Certificateholders.
No Certificateholder shall have any personal liability for any liability
or obligation of the Trust.
Section 2.9. Title to Trust Property.
Legal title to the Trust Assets shall be vested at all times in the
Trustee.
Section 2.10. Situs of Trust.
The Trust shall be located and administered in the State of New York. All
bank accounts maintained by the Trustee on behalf of the Trust shall be located
in and governed by the laws of the State of New York. The Trust shall have no
employees; provided, however, that nothing herein shall restrict or prohibit the
Trustee from having employees within or without the State of New York. Payments
shall be received by the Trust only in New York, and payments shall be made by
the Trust only from New York. The principal office of the Trust shall be the
Corporate Trust Office in New York.
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Section 2.11. Representations and Warranties of Depositor.
The Depositor hereby represents and warrants to the Trustee that:
(a) The Depositor has been duly organized and is validly existing as
a corporation in good standing under the laws of the State of Delaware, with
power and authority to own its properties and to conduct its business as such
properties are presently owned and such business is presently conducted.
(b) The Depositor has obtained all necessary licenses and approvals
in all jurisdictions in which its ownership or lease of property or the conduct
of its business requires such qualification, except where failure to obtain such
qualification would have no material adverse effect on the Depositor's ability
to perform its obligations hereunder.
(c) The Depositor has the power and authority to execute and deliver
this Agreement and to carry out its terms; and the execution, delivery and
performance of this Agreement have been duly authorized by the Depositor by all
necessary corporate action. This Agreement, upon its execution and delivery by
the Depositor and assuming due authorization, execution and delivery by the
Trustee and Option Agent, will constitute a valid, legal and binding obligation
of the Depositor, enforceable against it in accordance with the terms hereof,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other laws relating to or affecting
the rights of creditors generally, and by general equity principles (regardless
of whether such enforcement is considered a proceeding in equity or at law).
(d) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms of this Agreement do not conflict
with, result in any breach of any of the terms and provisions of or constitute
(with or without notice or lapse of time) a default under, the certificate of
incorporation or by-laws of the Depositor, or any indenture, trust agreement or
agreement or other instrument to which the Depositor is a party or by which it
is bound, or result in the creation or imposition of any lien upon any of its
properties pursuant to the terms of any such indenture or trust agreement, other
agreement or other instrument (other than pursuant to this Agreement), or
violate any law or, to the best of the Depositor's knowledge, any order, rule or
regulation applicable to the Depositor of any court or of any federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Depositor or any of its properties.
The Depositor hereby represents and warrants to the Trustee with
respect to the Granted Underlying Securities that:
(a) The Depositor is duly authorized to deliver the Underlying
Securities to the Trustee;
(b) The Underlying Securities so delivered are genuine;
(c) At the time of delivery of the Underlying Securities, the
Depositor owns such Underlying Securities, has the right to transfer such
Underlying Securities and such
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Underlying Securities are free and clear of any lien, pledge, encumbrance,
right, charge, claim or other security interest; and
(d) Such delivery is irrevocable and free of any continuing claim by
the Depositor.
To the Depositor's knowledge, the information set forth on Exhibit A
attached hereto is true and correct in all material respects as of the date
hereof.
The representations and warranties of the Depositor set forth in
this Section 2.11 shall survive delivery of the Granted Underlying Securities to
the Trustee and shall inure to the benefit of the Trustee for the benefit of the
Certificateholders.
Section 2.12. Tax Treatment.
The Depositor and the Trustee, by entering into this Agreement, and each
Certificateholder and Certificate Owner, by acquiring a Certificate or interest
therein, (a) express their intention that the Trust (i) be classified as a
"grantor trust" under Subpart E, Part I of Subchapter J of the Code and
corresponding provisions of applicable state and local tax laws and not an
association taxable as a corporation for federal income tax purposes and (ii)
shall constitute a fixed investment trust for federal income tax purposes under
Treasury Regulation Section 301.7701-4, and (b) unless otherwise required by
appropriate taxing authorities, agree to treat the Certificates as representing
undivided beneficial ownership interests in the assets of the Trust, subject to
the obligations of the Trust (if any), for the purposes of federal income taxes,
state and local income and franchise taxes and any other taxes imposed upon,
measured by, or based upon gross or net income. Each initial Certificateholder
and Certificate Owner, unless it owns Class B-1 Certificates and all of the
Class B-1 Options, also agrees to elect and the Trustee in filing the federal
income information tax returns of the Trust agrees, except as otherwise required
under the Code or the Treasury Regulations, to treat its pro rata portion of the
Underlying Securities and the Call Options as integrated, and the combined
payments as payments on a single synthetic debt instrument in accordance with
Treasury Regulation Section 1.1275-6. Further, the provisions of this Agreement
shall be interpreted to further this intention of the parties.
Section 2.13. Retained Interest.
On the first Distribution Date after the Closing Date, the Trust shall pay
to the Depositor the Retained Interest on the securities identified in Exhibit
A, the right to payment of which is retained by the Depositor and is not
deposited in the Trust. On the first Distribution Date after the Grant to the
Trust of any Additional Underlying Securities, the Trust shall pay to the
Depositor the Retained Interest on such Additional Underlying Securities, the
right to payment of which shall be retained by the Depositor and not deposited
in the Trust.
Section 2.14. Additional Underlying Securities and Certificates.
The Depositor may transfer and sell to the Trust after the Closing Date,
securities of the issue described in Exhibit A, to be held as additional
Underlying Securities in connection with the issuance of additional Certificates
under this Section 2.14, upon at least three (3)
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Business Days' written notice to the Trustee, and subject to (a) satisfaction of
the Rating Agency Condition and (b) delivery of an Opinion of Counsel to the
effect that the sale of such additional Underlying Securities and the issuance
of additional Certificates as provided in this Section 2.14 would not adversely
affect the intended classification of the Trust as a grantor trust for federal
income tax purposes. Such transfer, sale and issuance shall be evidenced by a
cross-receipt between the Depositor and the Trustee. Upon such transfer and sale
to the Trust, (a) the Trustee shall authenticate and deliver to the Depositor,
or its order, (i) Class A-1 Certificates and (ii) Class B-1 Certificates in the
same relative proportions as the Class A-1 Certificates and the Class B-1
Certificates issued on the Closing Date, and with an aggregate initial
Certificate Principal Balance and Certificate Notional Amount, respectively,
equal to the aggregate principal amount of such additional Underlying
Securities, provided that the aggregate Certificate Principal Balance of
additional Class A-1 Certificates and the aggregate Certificate Notional Amount
of Class B-1 Certificates shall in each case be greater than or equal to
$5,000,000, (b) UBS Warburg LLC, as the initial purchaser from the Depositor,
and then sole holder, of the Certificates shall grant a Call Option in respect
of each Certificate to the Depositor, and the Option Agent shall execute and
deliver to the Depositor, and the Trustee shall acknowledge, such Call Options
on such additional Certificates, and (c) the Depositor shall use reasonable
commercial endeavors (directly or through UBS Warburg LLC), immediately after
the grant of such Call Options, to sell such Call Options to the same entities
that then hold the Call Options on the existing Certificates, and in the same
proportions as those entities hold the existing Call Options, or to any other
persons that are designated by those entities, or the Depositor shall ensure
that the issuance of the additional Certificates and the related Call Options
shall not affect the right of the holders of the existing Call Options to
exercise their Call Options at any time. Each condition to be satisfied with
respect to a sale of Underlying Securities on the Closing Date shall be
satisfied with respect to a sale of additional Underlying Securities on the date
of sale thereof, each representation and warranty set forth in this Agreement to
be made on the Closing Date shall be deemed made (with respect to such
additional Underlying Securities, if applicable) on such date of sale, and from
and after such date of sale, all additional Underlying Securities held by the
Trustee shall be held on the same terms and conditions as the Underlying
Securities Granted on the Closing Date. Any such additional Class A-1
Certificates and Class B-1 Certificates authenticated and delivered shall have
the same terms and rank pari passu with Certificates of the corresponding
Classes of Certificates previously issued in accordance with this Agreement, and
any such additional Call Options shall have the same terms as the Call Options
previously granted in accordance with the Call Option Agreements.
Section 2.15. Call Options, Exercise of Call Options and Exchange of
Certificates for Underlying Securities.
(a) Concurrently with the execution of this Agreement, The Bank of
New York, as Option Agent, shall execute the Call Option Agreements and the Call
Options, dated as of the date hereof, initially evidencing all of the Call
Options.
(b) Pursuant to the Call Option Agreements, the Option Agent must
notify the Trustee immediately upon its receipt of a Call Notice. If the number
of Class A-1 Certificates or Class B-1 Certificates, respectively, specified in
such Call Notice is less than the outstanding number of Class A-1 Certificates
or Class B-1 Certificates, respectively, the Trustee shall select the Class A-1
Certificates or Class B-1 Certificates, respectively, to be purchased
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under the Call Options as follows: the Class A-1 Certificates or Class B-1
Certificates, respectively, selected by the Trustee shall be a pro rata portion
of the Class A-1 Certificates or Class B-1 Certificates, respectively, held by
each Certificateholder, provided that purchases of a fraction of a single Class
A-1 Certificate or a single Class B-1 Certificate shall not be made and the
Trustee shall round up or down the number of Certificates to be purchased from
each Class A-1 Certificateholder or Class B-1 Certificateholder to avoid such
fractional purchases.
(c) Unless the Call Options are exercised in connection with a
tender offer, upon a Call Date with respect to the exercise of Call Options,
upon notification to the Trustee by the Option Agent of the receipt of the Call
Price by the Option Agent and the satisfaction of the conditions specified in
the Call Option Agreements, the Class A-1 Certificates and the Class B-1
Certificates acquired pursuant to the exercise of the Call Options (in each
case, such Class A-1 Certificates and Class B-1 Certificates the "Called
Certificates") shall simultaneously with the delivery thereof to the Person
exercising such Call Options automatically be exchanged by the Trustee for
Underlying Securities having an aggregate principal amount equal to the
aggregate Certificate Principal Balance of such Class A-1 Certificates. Such
delivery and exchange shall be deemed to have occurred upon the Call Date unless
the Call Price in respect of all the Called Certificates has not been paid by
the Option Holder to the Option Agent. The parties acknowledge that, pursuant to
the Call Option Agreements, the Call Notice shall automatically expire (i) if
the Call Option is being exercised other than in connection with a tender offer,
and the Option Holder has not paid the Call Price to the Option Agent by 10:00
a.m. (New York City time) on the Call Date, or (ii) in the case of a tender
offer, if the Trustee has not received payment of the Call Price from the
Underlying Securities Issuer or other purchaser by 10:00 a.m. (New York City
time) on the later of (A) the date specified for settlement in the Call Notice,
or (B) the earlier to occur of the date immediately following the date on which
the tender offer is consummated or the date on which it expired unconsummated,
and that, in such event, none of the Option Holder, the Option Agent or the
Trustee shall have any obligation with respect to the Call Notice, and the
expiration of a Call Notice shall in no way affect the Option Holder's right to
deliver a Call Notice at a later date.
(d) The Called Certificates shall be cancelled by the Certificate
Registrar, shall be deemed no longer to be Outstanding and shall cease accruing
interest immediately after the exchange described in Section 2.15(c), whether or
not presented or surrendered by the applicable Certificateholders to the
Certificate Registrar for cancellation in accordance with the provisions of
Section 3.4(d), and without the requirement of any further action by the holders
thereof.
(e) Unless the Call Options are exercised in connection with a
tender offer, following payment of the Call Price, the Option Agent shall remit
the Call Price to the Trustee, and subject to the following sentence, the
Trustee shall distribute the Call Price to Certificateholders of Called
Certificates. However, Certificateholders holding Called Certificates in
definitive physical form (other than DTC) shall not be entitled to be paid the
Call Price for such Called Certificates until such Called Certificates have been
presented and surrendered to the Trustee. If any Certificateholder shall not
surrender its Call Certificates that are in definitive physical form for
cancellation within six months after the Call Date, the Trustee shall give a
second written notice to such remaining Certificateholders to surrender their
Called Certificates that are in definitive physical form for cancellation and
receive the final distribution
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with respect thereto. If within one year after the second notice any of the
Called Certificates that are in definitive physical form 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 applicable
Certificateholders concerning surrender of their Called Certificates that are in
definitive physical form, and the cost thereof shall be paid out of the Call
Price in respect of such Called Certificates.
(f) Each Certificateholder, by its acceptance of such Certificate,
(i) irrevocably appoints and authorizes the Option Agent to carry out as
attorney-in-fact of such Certificateholder the actions provided by this
Agreement or the Call Option Agreements to be carried out by such
Certificateholder or by the Option Agent as such attorney-in-fact, (ii) agrees
to assume and be bound by the terms and provisions of the related Call Option
and covenants and agrees to perform its obligations under such Call Option, and
(iii) consents to the provisions of the Call Option Agreements.
(g) Upon any transfer of a Certificate, the transferee shall assume
and be bound by the terms of the related Call Option and the Call Option
Agreements (without the requirement of any further action on the part of such
transferee), and the transferor shall be released from its obligations under the
related Call Option and such agreement, and the transferor's appointment of The
Bank of New York as its Option Agent with respect thereto shall thereupon
terminate (in each case without the requirement of any further action on the
part of such transferor).
(h) This Section 2.15 shall not provide the Option Holder with a
lien against, an interest in or a right to specific performance with respect to
the Underlying Securities; provided that satisfaction of the conditions set
forth in Section 2.15(c) shall entitle the Certificateholders or the Option
Holders, as applicable, to a distribution of the Underlying Securities.
(i) The rights of the Certificateholders under this Agreement and
the Certificates are subject to the terms, provisions and conditions of this
Agreement, the Call Option Agreements and the Call Options.
(j) (i) If the Trustee receives any announcement or proposal of an
amendment to the Underlying Securities Indenture or the Underlying Securities or
a notice of redemption of, tender offer for or other unscheduled repayment on or
repurchase of some or all of the Underlying Securities, the Trustee shall within
two Business Days notify the Option Agent and send to the Option Agent copies of
all materials received by the Trustee in connection therewith. If in connection
with a tender offer for the Underlying Securities the Trustee receives a Call
Notice from any Option Holder, no later than seven Business Days prior to the
expiration of the tender offer acceptance period, that such Option Holder
desires to exercise Call Options in connection with the consummation of any such
tender offer, then the Trustee shall tender, in compliance with the tender offer
requirements, a principal amount of Underlying Securities equal to the amount of
Certificates subject to such Call Options; provided, that the Trustee shall not
so tender unless the tender offer price shall equal or exceed the applicable
Call Price.
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(ii) The Call Date for any exercise of Call Options in connection
with a tender offer shall be deemed to be the Business Day on which such
Underlying Securities are accepted for payment and paid for, if such payment
occurs on or before 1:00 p.m., and the following Business Day if such payment
occurs after 1:00 p.m.
(iii) On the Call Date, the Call Price shall be deducted from the
tender offer proceeds and paid to Certificateholders by the Trustee on behalf of
the Option Agent, and the excess of the tender offer proceeds over the Call
Price shall be paid to the exercising Option Holders pro rata in respect to
their proportionate exercises of Call Options.
(iv) If fewer than all tendered Underlying Securities are accepted
for payment and paid for, (A) the number of Call Options exercised shall be
reduced so that the Certificate Principal Balance and Certificate Notional
Amount of the applicable called Class A-1 and Class B-1 Certificates,
respectively, corresponds to the principal amount of Underlying Securities
accepted for payment and paid for; (B) each Option Holder's exercise shall be
reduced by its share (proportionate to the amount specified in its Call Notice)
of the principal amount of Underlying Securities not accepted for payment and
paid for, (C) the Call Price shall be determined after giving effect to the
reductions specified in clauses (A) and (B); (D) the Call Options not exercised
shall remain outstanding; and (E) the excess of the tender offer proceeds over
the Call Price shall be allocated in proportion to the number of Call Options
deemed exercised as set forth in clause (A) above.
(v) If (A) the tender offer is terminated by the Underlying
Securities Issuer or any other tender offeror without consummation thereof, if
(B) all tenders by the Trust of Underlying Securities are otherwise rejected or
if (C) the Trustee shall not have received payment of the tender price from the
Underlying Securities Issuer or other purchaser of the Underlying Securities in
immediately available funds by 10:00 a.m. on the later of (x) the date specified
for settlement in the Call Notice, or (y) the earlier to occur of the date
immediately following the date on which the tender offer is consummated or the
date on which it expires unconsummated, then (1) the Call Notices will be of no
further force and effect, and (2) any Call Options for which Call Notices were
given will be deemed not exercised and will remain outstanding.
(vi) The parties acknowledge that under the Call Option Agreements,
if Underlying Securities are redeemed in part by the Underlying Securities
Issuer and the Option Holders do not exercise Class A-1 Options and Class B-1
Options with respect to all the Underlying Securities redeemed in such partial
redemption, the number of Class A-1 Options and Class B-1 Options held by each
Option Holder shall be reduced proportionately so that the aggregate amount of
Certificates callable by the exercise of Call Options shall equal the amount of
outstanding Certificates after giving effect to such partial redemption.
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Section 2.16. Mergers.
The Trust shall not dissolve, liquidate, merge or consolidate with any
other trust, corporation, company or entity or sell any of its assets, except as
expressly provided herein, or acquire all or substantially all of the assets or
capital stock or other ownership interest of any other corporation, company or
entity.
Section 2.17. Grant of Security Interest.
(a) It is the express intent of the parties hereto that the
conveyance of the Underlying Securities by the Depositor to the Trustee be, and
be construed as, a sale of the Underlying Securities by the Depositor and not a
pledge of the Underlying Securities by the Depositor to secure a debt or other
obligation of the Depositor.
(b) In the event that, notwithstanding the aforementioned intent of
the parties, any Underlying Securities are held to be property of the Depositor,
then (i) it is the express intent of the parties that such conveyance be deemed
a pledge of such Underlying Securities by the Depositor to the Trustee to secure
a debt or other obligation of the Depositor and (ii)(A) this Agreement shall be
deemed to be a security agreement within the meaning of Articles 8 and 9 of the
UCC; (B) the conveyance provided for in Section 2.1(a) shall be deemed to be a
Grant by the Depositor to the Trustee of a security interest in all the
Depositor's right, title and interest in and to such Underlying Securities and
all amounts payable to the holders of such Underlying Securities in accordance
with the terms hereof and all proceeds of the conversion, voluntary or
involuntary, of the foregoing into cash, instruments, securities or other
property including all amounts from time to time held or invested in the
Collection Account, whether in the form of cash, instruments, securities or
other property; (C) the obligations secured by such security agreement shall be
deemed to be all the Depositor's obligations under this Agreement including the
obligation to provide to the Certificateholders the benefits of this Agreement
relating to the Underlying Securities and the Trust; and (D) notifications to
persons holding such property, and acknowledgements, receipts or confirmations
from persons holding such property shall be deemed notifications to,
acknowledgements, 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.
In such event, the Depositor will be deemed to have hereby Granted to the
Trustee a security interest in the Underlying Securities and all other property
described in (ii)(B) of the preceding paragraph, for the purpose of securing to
the Trustee the performance by the Depositor of the obligations described in
clause (ii)(C) of the preceding paragraph.
(c) [Reserved].
(d) In connection with any such deemed grant of a security interest
in the Underlying Securities (including additional Underlying Securities
transferred to the Trustee pursuant to Section 2.14),
(i) the Depositor hereby represents and warrants as follows:
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(A) In the event the Underlying Securities are held to
be property of the Depositor, then this Agreement
creates a valid and continuing security interest (as
defined in the UCC) in the Underlying Securities in
favor of the Trustee, which security interest is prior
to all other liens, and is enforceable as such as
against creditors of, and purchasers from, the
Depositor. Under the UCC as in effect on the date of
this Agreement, if this Agreement were deemed to create
a security interest, the procedures specified in this
Agreement would be sufficient to maintain a first
priority lien on the Underlying Securities for so long
as the Underlying Securities remain outstanding.
(B) Immediately prior to the transfer of the Underlying
Securities to the Trust, Depositor owned and had good
and marketable title to the Underlying Securities free
and clear of any lien, claim or encumbrance of any
Person.
(C) Depositor has not assigned, pledged, sold, granted a
security interest in or otherwise conveyed any interest
in the Underlying Securities (or, if any such interest
has been assigned, pledged or otherwise encumbered, it
has been released). Depositor has not authorized the
filing of and is not aware of any financing statements
against Depositor that includes a description of the
Underlying Securities. Depositor is not aware of any
judgment or tax lien filings against Depositor.
(D) Depositor has not consented to the compliance by the
Securities Intermediary with entitlement orders of any
Person other than the Trustee, as trustee of the Trust.
and
(ii) the Trustee hereby represents and warrants as follows:
(A) It has taken all steps necessary to cause the
Securities Intermediary for the Securities Account to
identify on its records that the Trustee, as the trustee
for the Trust, is the Person having a security
entitlement against the Securities Intermediary in the
Securities Account.
(B) The Underlying Securities have been credited to a
trust account (the "Securities Account") of the Trustee,
or its authorized agent, in accordance with Section 6.1.
The Trustee, as Securities Intermediary for the
Securities Account, has agreed to treat the Underlying
Securities as "financial assets" within the meaning of
the UCC.
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(C) The Securities Account is not in the name of any
Person other than the Trustee.
ARTICLE III
THE CERTIFICATES
Section 3.1. The Certificates.
(a) The Certificates shall be issued in two Classes and shall have
the terms set forth in this Agreement. The Certificates shall be issued in
substantially the forms set forth in Exhibits C and D to this Agreement,
respectively, with such changes as shall be approved by the Depositor and the
Trustee, such approval to be manifested by the execution and authentication
thereof by the Trustee. The Certificates shall evidence the entire undivided
beneficial ownership of the assets of the Trust, subject to the liabilities of
the Trust (if any), and amounts distributable in respect of the Certificates
shall be payable solely from payments or property received by the Trustee on or
in respect of the Underlying Securities, after satisfaction of such liabilities
(if any).
(b) The Certificates shall consist of the Class A-1 Certificates and
the Class B-1 Certificates, and, within each class, all Certificates will be
pari passu in priority of payments and otherwise. The right of the holders of
the Class B-1 Certificates to receive distributions allocable to interest will
rank pari passu with the right of the Class A-1 Certificates to receive
distributions allocable to interest, each of the Class A-1 Certificates shall be
issued in denominations of $25.00 and integral multiples of $25.00 in excess
thereof and each of the Class B-1 Certificates shall be issued with a
Certificate Notional Amount of $25.00 and integral multiples of $25.00 in excess
thereof. Purchases and redemptions of a fraction of a single Class A-1
Certificate or a single Class B-1 Certificate shall not be permitted.
The Class A-1 Certificates shall have an initial aggregate
Certificate Principal Balance of $50,000,000. The Class B-1 Certificates shall
have an initial aggregate Certificate Notional Amount of $50,000,000. Each of
the Certificateholders of the Class A-1 Certificates shall be entitled to a
distribution of principal (and any premium) on the Final Distribution Date (or
any Underlying Securities Payment Date on which principal or premium is paid),
to the extent of principal payments made on the Underlying Securities (including
any premium) on such date.
(c) The holders of the Class A-1 Certificates shall be entitled to
receive on each Distribution Date the interest, if any, received on the
Underlying Securities, to the extent necessary to distribute interest at a
pass-through rate of 7.625% per annum on the Outstanding Certificate Principal
Balance of the Class A-1 Certificates. The holders of the Class B-1 Certificates
shall be entitled to receive on each Distribution Date the interest, if any,
received on the Underlying Securities, to the extent necessary to distribute
interest at a pass-through rate of 0.075% per annum on the Outstanding
Certificate Notional Amount of the Class B-1 Certificates.
21
Section 3.2. Form of the Certificates.
(a) The Class A-1 Certificates shall initially be issued in one or
more global Certificates in fully registered form, in the name of Cede & Co.,
nominee of DTC, substantially in the form set forth in Exhibit C. The Class B-1
Certificates shall initially be issued in the form of one or more definitive
Certificates in registered form, in the names and denominations specified by the
Initial Purchaser, substantially in the form set forth in Exhibit D. The
Trustee, upon receipt of a Depositor Order to that effect, shall cause such
Certificates to be executed and authenticated as provided in Section 3.3
concurrently with the sale of the Underlying Securities to the Trust upon
written order of the Depositor. Each Certificate shall bear upon its face the
designation so selected for the Class to which it belongs, and may have such
letters, numbers or other marks of identification as the Depositor and the
Trustee may determine. All Certificates of the same Class shall be identical in
all respects except for the denominations thereof and, if applicable, the name
of the registered Certificateholder and the number of the Certificate. All
Certificates and all Classes issued under this Agreement shall be in all
respects equally and ratably entitled to the benefits of this Agreement, without
preference, priority or distinction on account of the actual time or times of
authentication and delivery, all in accordance with the terms and provisions of
this Agreement.
(b) The terms of the Forms of Certificates set forth in Exhibits C
and D to this Agreement shall form part of this Agreement.
Section 3.3. Execution, Authentication and Delivery.
The Certificates shall be executed on behalf of the Trust by manual or
facsimile signature of a Responsible Officer of the Trustee, pursuant to a
written order signed by the Depositor, and authenticated by a Responsible
Officer of the Trustee. Certificates bearing the manual or facsimile signatures
of individuals who were, at the time when such signatures shall have been
affixed, authorized to execute or authenticate Certificates on behalf of the
Trust, shall be valid and binding obligations of the Trust, notwithstanding that
such individuals or any of them shall have ceased to be so authorized prior to
the authentication and delivery of such Certificates or did not hold such
offices at the date of authentication and delivery of such Certificates. No
Certificate shall entitle its holder to any benefit under this Agreement, or
shall be valid for any purpose, unless there shall appear on such Certificate a
certificate of authentication substantially in the form set forth in Exhibit C
or D, as applicable, executed by the Trustee by manual signature. Such
authentication shall constitute conclusive evidence that such Certificate shall
have been duly authenticated and delivered hereunder. All Certificates shall be
dated the date of their authentication.
Section 3.4. Registration of Certificates; Registration of Transfer and
Exchange of Certificates.
(a) The Certificate Registrar shall keep or cause to be kept, at the
office or agency of the Trust maintained pursuant to Section 2.4, a register
(the "Certificate Register") in which, subject to such reasonable regulations as
it may prescribe, the registrar appointed by the Depositor (the "Certificate
Registrar") shall provide for the registration of Certificates and of transfers
and exchanges of Certificates as provided herein; provided,
22
however, that no Certificate may be subdivided upon transfer or exchange such
that the denomination of any resulting Certificate is other than the authorized
denominations for the relevant Class specified in Section 3.1(b). The initial
Certificate Registrar shall be the Trustee. Upon any resignation of a
Certificate Registrar, the Trustee shall promptly appoint a successor or, if it
elects not to make such an appointment, assume the duties of Certificate
Registrar.
(b) Upon surrender for registration of transfer of any Certificate
at the Corporate Trust Office maintained pursuant to Section 2.4, the Trustee
shall execute on behalf of the Trust, and shall authenticate and deliver in the
name of the designated transferee or transferees, as provided in Section 3.3,
one or more new Certificates of the same Class, in authorized denominations and
of a like aggregate Certificate Principal Balance or Certificate Notional
Amount, dated the date of authentication by the Trustee.
(c) At the option of a Certificateholder, Certificates may be
exchanged for other Certificates of the same Class, in authorized denominations
and of a like aggregate Certificate Principal Balance or Certificate Notional
Amount, upon surrender of the Certificates to be exchanged at the office or
agency of the Trust maintained pursuant to Section 2.4. Whenever any
Certificates are so surrendered for exchange, the Trustee shall execute on
behalf of the Trust, and shall authenticate and deliver in the name of the
Certificateholder, one or more new Certificates dated the date of authentication
by the Trustee. Such Certificates shall be delivered to the Certificateholder
making the exchange.
(d) Every Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
form reasonably satisfactory to the Trustee and the Certificate Registrar, duly
executed by the Certificateholder or its attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer and exchange shall be
cancelled and subsequently destroyed by the Trustee or the Certificate Registrar
in accordance with its customary practice.
(e) No service charge shall be made for any registration of transfer
or exchange of Certificates, but the Trustee or the Certificate Registrar may
require the payment by the Certificateholder of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
(f) The provisions of Sections 7.1, 7.3, 7.8 and 7.10 shall apply to
the Trustee in its role as Certificate Registrar, for so long as the Trustee
shall act as Certificate Registrar.
Section 3.5. Mutilated, Destroyed, Lost or Stolen Certificates.
(a) If (i) any mutilated Certificate is surrendered to the
Certificate Registrar, or the Certificate Registrar receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate, and (ii)
there is delivered to the Certificate Registrar, the Trustee and the Depositor
such security or indemnity as may be required by them to hold each of them
harmless, then, in the absence of notice to the Certificate Registrar or the
Trustee that such Certificate has been acquired by a Protected Purchaser, the
Trustee shall execute on behalf of the Trust, and shall authenticate and
deliver, in exchange for or in lieu of any such mutilated,
23
destroyed, lost or stolen Certificate, a replacement Certificate of the same
Class and a like aggregate Certificate Principal Balance or Certificate Notional
Amount; provided, however, that if any such mutilated, destroyed, lost or stolen
Certificate shall have become or within seven days shall be due and payable,
then instead of issuing a replacement Certificate the Trustee may pay such
mutilated, destroyed, lost or stolen Certificate when so due or payable.
(b) If, after the delivery of a replacement Certificate or payment
in respect of a mutilated, destroyed, lost or stolen Certificate pursuant to
Section 3.5(a), a Protected Purchaser of the original Certificate in lieu of
which such replacement Certificate was issued presents for payment such original
Certificate, the Trustee shall be entitled to recover such replacement
Certificate or payment from the Person to whom it was delivered or any Person
taking such replacement Certificate from such Person to whom such replacement
Certificate was delivered or any assignee of such Person, except a Protected
Purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Trustee in connection therewith.
(c) In connection with the issuance of any replacement Certificate
under this Section 3.5, the Trustee may require the payment by the
Certificateholder of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other reasonable expenses
(including the fees and expenses of the Trustee and the Certificate Registrar)
connected therewith.
(d) Any Certificate issued pursuant to this Section 3.5 in
replacement of any mutilated, destroyed, lost or stolen Certificate shall
represent ownership of a beneficial interest in the Trust Assets, and shall be
entitled to all the benefits of this Agreement equally and proportionately with
any and all other Certificates duly issued hereunder.
(e) The provisions of this Section 3.5 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Certificates.
Section 3.6. Persons Deemed Certificateholders.
Prior to due presentation of a Certificate for registration of transfer,
the Trustee, the Certificate Registrar, the Depositor and their respective
employees, officers, agents and Affiliates may treat the Person in whose name
the Certificate is registered in the Certificate Register as the
Certificateholder of such Certificate for the purpose of receiving distributions
pursuant to Articles VI and VIII and for all other purposes whatsoever, and none
of the Trustee, the Certificate Registrar, the Depositor and their respective
employees, officers, agents and Affiliates shall be affected by any notice to
the contrary.
Section 3.7. Access to List of Certificateholders' Names and Addresses.
(a) The Depositor shall furnish or cause to be furnished to the
Trustee on the Record Date before each Distribution Date, and at such other
times as the Trustee may request in writing, a list, in such form as the Trustee
may reasonably require, to the extent such information is in the possession or
control of the Depositor, of the names and addresses of the Certificateholders
as of such Record Date; provided, however, that so long as the Trustee is the
24
Certificate Registrar, the Depositor shall not be required to furnish such list
to the Trustee. If the Trustee is the Certificate Registrar, upon written
request by the Depositor, the Trustee shall furnish or cause to be furnished to
the Depositor, within fifteen (15) days after receipt of such request, a list,
in such form as the Depositor may reasonably require, of the names and addresses
of the Certificateholders as of the most recent Record Date. Each
Certificateholder, by receiving and holding a Certificate, shall be deemed to
have agreed not to hold any of the Depositor or the Trustee accountable by
reason of the disclosure of its name and address, regardless of the source from
which such information was derived.
(b) For purposes of determining the identity of Certificateholders
entitled to vote or in connection with any notice or other communication to be
provided to Certificateholders pursuant to this Agreement with respect to any
consent or other action to be taken by Certificateholders, the Trustee shall
establish a record date for such consent or other action and give each
Certificateholder notice of such record date not less than fifteen (15) calendar
days in advance of such record date to the extent possible. Such record date
shall be the later of thirty (30) days prior to the first solicitation of such
consent or other action and the date of the most recent list of
Certificateholders, if any, furnished to the Trustee pursuant to Section 3.7(a).
Section 3.8. Preservation of Information; Communications to
Certificateholders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Certificateholders contained in the
most recent list furnished to the Trustee as provided in Section 3.7(a), if any,
and the names and addresses of Certificateholders received by the Trustee in its
capacity as Certificate Registrar. The Trustee may destroy any list furnished to
or prepared by it as provided in such Section 3.7(a) upon receipt or preparation
of a new list.
(b) Certificateholders shall have the right to communicate pursuant to
Section 312(b) of the TIA with other Certificateholders with respect to their
rights under this Agreement or the Certificates, and the Trustee shall take such
action, from time to time, as may be required by the provisions of Section
312(b) of the TIA.
(c) The Depositor, the Trustee and the Certificate Registrar shall have
the protection provided by Section 312(c) of the TIA.
Section 3.9. Legend on Global Certificates.
Each global Certificate for a Class A-1 Certificate shall bear the
following legend:
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF
THE TRUST AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED
IN THE NAME OF THE NOMINEE OF THE DEPOSITORY TRUST COMPANY
("DTC"), CEDE & CO. THIS CERTIFICATE IS EXCHANGEABLE FOR
CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC
OR ITS NOMINEE ONLY
25
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE TRUST AGREEMENT
AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC OR BY A
NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC TO THE TRUST OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF DTC'S NOMINEE,
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.
Section 3.10. Definitive Certificates.
If (a) DTC or the Depositor advises the Trustee that DTC is no longer
willing or able to continue as depositary, and the Depositor does not appoint a
qualified successor within 90 days; or (b) an Available Information Event
occurs, then, in any such case, the Trustee shall notify DTC of the occurrence
of any such event and of its intent to make definitive Certificates available,
and shall request the surrender by DTC to the Trustee of the global Certificate
or Certificates evidencing the Certificates and shall notify all DTC
participants with interest in the Class A-1 Certificates of the availability of
definitive certificates through DTC. Upon such surrender, accompanied by
registration instructions from DTC, the Trustee shall execute and authenticate
the definitive Certificates in accordance with the instructions of DTC. Neither
the Certificate Registrar nor the Trustee shall be liable for any delay in
delivery of such instructions and each may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of definitive
Certificates, the Trustee shall recognize the registered holders of the
definitive Certificates as Certificateholders and shall notify the Underlying
Securities Issuer that the Underlying Securities are held pursuant to this Trust
Agreement and that the holders of the Certificates constitute record holders of
the Underlying Securities.
Section 3.11. [Reserved].
Section 3.12. Transfer Restrictions on Class B-1 Certificates.
(a) No Certificateholder or Certificate Owner may, in any transaction
or series of transactions, directly or indirectly (each of the following, a
"transfer"), (i) sell, assign
26
or otherwise in any manner dispose of all or any part of its interest in any
Class B-1 Certificate issued to it, whether by act, deed, merger or otherwise,
or (ii) mortgage, pledge or create a lien or security interest in such
beneficial interest, unless such transfer satisfies the conditions set forth in
this Section 3.12. No purported transfer of any legal, equitable or beneficial
interest in any Class B-1 Certificate or any portion thereof that is not made in
accordance with this Section 3.12 shall be given effect by or be binding upon
the Trust, the Depositor or the Trustee and any such purported transfer shall be
null and void ab initio and vest in the transferee no rights against the Trust,
the Depositor or the Trustee.
(b) By its acceptance of a Class B-1 Certificate or beneficial interest
therein, each Certificateholder or Certificate Owner with respect to such
Certificate will be deemed to have represented and agreed that transfer of such
Certificate or interest is restricted and agrees that it shall transfer such
Certificate or interest only in accordance with the terms of this Agreement and
such Certificate and in compliance with applicable law.
(c) The Class B-1 Certificates may not be purchased or held by (a) a
Benefit Plan Investor or (b) any Person acting on behalf of a Benefit Plan
Investor, unless (i) the purchaser is an insurance company, (ii) it is not a
Person who has discretionary authority or control with respect to the assets of
the Issuer or a Person who provides investment advice for a fee (direct or
indirect) to or with respect to such assets, or an affiliate of such a Person,
(iii) the sole source of the funds being used to effect its purchase of such
Class B-1 Certificates is its general account, (iv) on the date it purchases any
such Class B-1 Certificates, less than 25% of the assets of its general account
(as determined by such insurance company) constitute plan assets, (v) the
acquisition and holding of such Class B-1 Certificates will not constitute a
nonexempt prohibited transaction in violation of section 406 of ERISA and
section 4975 of the Internal Revenue Code, and (vi) if, as of any later date on
which any Person purchases any of such Class B-1 Certificates, 25% or more of
the assets of such general account constitute plan assets or if such company
becomes a Person who has discretionary authority or control with respect to the
assets of the Issuer or a Person who provides investment advice for a fee
(direct or indirect) to or with respect to such assets, or an affiliate of such
a Person, then such insurance company will dispose of such Class B-1
Certificates then held in its general account promptly and in any event by the
end of the next calendar quarter.
(d) In addition to any other legends provided for herein, each Class
B-1 Certificate issued hereunder will contain the following legend:
NO EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF ERISA)
WHETHER OR NOT IT IS SUBJECT TO TITLE I OF ERISA, NO PLAN (AS
DESCRIBED IN SECTION 4975(e)(1) OF THE CODE) AND NO ENTITY
WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY
SUCH PLAN'S INVESTMENT IN THE ENTITY (EACH, A "PLAN"), OR ANY
PERSON ACTING ON BEHALF OF ANY PLAN, MAY PURCHASE OR HOLD A
CERTIFICATE OR ANY INTEREST THEREIN, UNLESS (I) THE PURCHASER
IS AN INSURANCE
27
COMPANY, (II) IT IS NOT A PERSON WHO HAS DISCRETIONARY
AUTHORITY OR CONTROL WITH RESPECT TO THE ASSETS OF THE TRUST
OR A PERSON WHO PROVIDES INVESTMENT ADVICE FOR A FEE (DIRECT
OR INDIRECT) TO OR WITH RESPECT TO SUCH ASSETS, OR AN
AFFILIATE OF SUCH A PERSON, (III) THE SOLE SOURCE OF THE FUNDS
BEING USED TO EFFECT ITS PURCHASE OF SUCH CERTIFICATES IS ITS
GENERAL ACCOUNT, (IV) ON THE DATE IT PURCHASES ANY SUCH
CERTIFICATES, LESS THAN 25% OF THE ASSETS OF ITS GENERAL
ACCOUNT (AS DETERMINED BY SUCH INSURANCE COMPANY) CONSTITUTE
PLAN ASSETS, (V) THE ACQUISITION AND HOLDING OF SUCH
CERTIFICATES WILL NOT CONSTITUTE A NONEXEMPT PROHIBITED
TRANSACTION IN VIOLATION OF SECTION 406 OF ERISA AND SECTION
4975 OF THE INTERNAL REVENUE CODE, AND (VI) IF, AS OF ANY
LATER DATE ON WHICH ANY PERSON PURCHASES ANY OF SUCH
CERTIFICATES, 25% OR MORE OF THE ASSETS OF SUCH GENERAL
ACCOUNT CONSTITUTE PLAN ASSETS OR IF SUCH COMPANY BECOMES A
PERSON WHO HAS DISCRETIONARY AUTHORITY OR CONTROL WITH RESPECT
TO THE ASSETS OF THE TRUST OR A PERSON WHO PROVIDES INVESTMENT
ADVICE FOR A FEE (DIRECT OR INDIRECT) TO OR WITH RESPECT TO
SUCH ASSETS, OR AN AFFILIATE OF SUCH A PERSON, THEN SUCH
INSURANCE COMPANY WILL DISPOSE OF SUCH CERTIFICATES THEN HELD
IN ITS GENERAL ACCOUNT PROMPTLY, AND IN ANY EVENT BY THE END
OF THE NEXT CALENDAR QUARTER.
(e) The Class B-1 Certificates may not be transferred other than to a
qualified institutional buyer (a "QIB") that is purchasing for its own account
or the account of another QIB. No transfer of a Class B-1 Certificate shall be
valid or effective unless such transfer is being made in a transaction that is
exempt from the registration requirements of the Securities Act under Rule 144A
("Rule 144A") (except in the case of the initial transfer from the Depositor)
and any applicable blue sky laws, and the proposed transferee shall have
delivered to the Depositor and the Trustee an investment representation letter
substantially in the form attached as Exhibit E hereto or such other written
statement as the Depositor or the Trustee shall prescribe. Each certificate, if
any, evidencing such Class B-1 Certificate issued upon any such transfer, other
than in a public offering pursuant to an effective registration statement shall
bear the restrictive legend set forth in below.
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Except as otherwise provided in the immediately preceding
paragraph, each Class B-1 Certificate initially issued, and each Class B-1
Certificate issued to any subsequent transferee of any such certificate, will
contain the following legend in addition to any other legends provided for
herein:
"THIS CLASS B-1 CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE
SECURITIES LAW. NO TRANSFER OF THIS CLASS B-1 CERTIFICATE
SHALL BE VALID OR EFFECTIVE UNLESS SUCH TRANSFER IS TO A
"QUALIFIED INSTITUTIONAL BUYER" PURSUANT TO RULE 144A UNDER
THE ACT AND PRIOR TO THE TRANSFER SUCH HOLDER(S) SHALL HAVE
DELIVERED TO THE DEPOSITOR AND THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS RELATING TO THE
RESTRICTIONS ON TRANSFERS OF THIS CERTIFICATE (THE FORM OF
WHICH LETTER MAY BE OBTAINED FROM THE TRUSTEE)."
Section 3.13. Actions by Certificateholders.
Subject to Section 6.3(c), (a) no Class B-1 Certificateholders shall have
the right hereunder to institute any Proceeding against the Underlying
Securities Issuer in respect of the Underlying Securities and (b) no Class A-1
Certificateholder or Class A-1 Certificate Owner may institute any Proceeding
against the Underlying Securities Issuer with respect to the Underlying
Securities unless:
(a) such Certificateholder or Certificate Owner previously has given to
the Trustee written notice of a continuing breach of the Underlying Securities;
(b) Certificateholders or Certificate Owners evidencing not less than
25% of the Outstanding Class A-1 Certificates have requested in writing that the
Trustee institute the proceeding in its own name as Trustee;
(c) the Trustee has for 15 days not instituted the Proceeding; and
(d) no direction inconsistent with the written request has been given
to the Trustee during the 15-day period by Class A-1 Certificateholders
evidencing more than a majority of the Outstanding Class A-1 Certificates.
The Trustee will not be required to take any action however, unless the Trustee
has been offered reasonable indemnity for its costs, expenses and liabilities by
such Class A-1 Certificateholders or Class A-1 Certificate Owners.
29
Section 3.14. Additional Legends.
Each Class A-1 Certificate and each Class B-1 Certificate, whether issued
in global form or definitive physical form shall bear a legend substantially in
accordance with the following:
BY ACQUIRING OR ACCEPTING ANY INTEREST IN THIS CERTIFICATE,
YOU ACKNOWLEDGE THAT THIS CERTIFICATE IS SUBJECT TO A PURCHASE
OPTION GRANTED TO CORPORATE ASSET BACKED CORPORATION, A
DELAWARE CORPORATION (THE "DEPOSITOR"), BY UBS WARBURG LLC
UNDER THE [CLASS A-1][CLASS B-1] CALL OPTION AGREEMENT, DATED
AS OF JUNE 21, 2002 (THE "CALL OPTION AGREEMENT"), AMONG THE
DEPOSITOR, AS THE SOLE INITIAL OPTION HOLDER, UBS WARBURG LLC,
AS THE INITIAL PURCHASER FROM THE DEPOSITOR, AND SOLE HOLDER
AT THE TIME OF SUCH GRANT, OF THE [CLASS A-1][CLASS B-1]
CERTIFICATES, AND THE BANK OF NEW YORK, A NEW YORK BANKING
CORPORATION, ACTING AS OPTION AGENT FOR THE [CLASS A-1][CLASS
B-1] CERTIFICATEHOLDERS WITH RESPECT TO THE [CLASS A-1][CLASS
B-1] OPTIONS (THE "OPTION AGENT"), WHICH OBLIGATIONS HAVE BEEN
ASSUMED BY EACH SUBSEQUENT HOLDER OF SUCH [CLASS A-1][CLASS
B-1] CERTIFICATES; YOU AGREE TO ASSUME THE OBLIGATION OF YOUR
TRANSFEROR TO PERFORM SUCH [CLASS A-1][CLASS B-1] OPTION; AND
YOU ACKNOWLEDGE THAT YOUR TRANSFEROR HAS BEEN RELEASED FROM
ITS OBLIGATION TO PERFORM SUCH [CLASS A-1][CLASS B-1] OPTION.
THE CALL OPTION AGREEMENT PERMITS THE HOLDER OF THE RELATED
[CLASS A-1][CLASS B-1] OPTION TO PURCHASE THIS CERTIFICATE
FROM YOU, WITHOUT YOUR CONSENT, AT THE TIMES AND ON THE
CONDITIONS SPECIFIED IN THE CALL OPTION AGREEMENT AT THE CALL
PRICE SPECIFIED IN THAT AGREEMENT. THE [CLASS A-1][CLASS B-1]
OPTION MAY BE TRANSFERRED FROM TIME TO TIME. UPON THE EXERCISE
OF THE RELATED [CLASS A-1][CLASS B-1] OPTION IN THE MANNER
SPECIFIED IN THE CALL OPTION AGREEMENT, [THE][THIS] [CLASS
A-1][CLASS B-1] CERTIFICATE WILL BE TRANSFERRED TO[, AND
REGISTERED IN
30
THE NAME OF,] THE RELEVANT [CLASS A-1][CLASS B-1] OPTION
HOLDER BY THE TRUSTEE, AND YOU WILL BE PAID THE CALL PRICE FOR
THIS CERTIFICATE IN ACCORDANCE WITH THE TERMS OF THE CALL
OPTION AGREEMENT, WITHOUT THE REQUIREMENT OF ANY FURTHER
ACTION BY YOU, EXCEPT THAT IF THE CLASS A-1 CERTIFICATES ARE
HELD IN DEFINITIVE FORM AT SUCH TIME YOU WILL NOT RECEIVE SUCH
CALL PRICE UNLESS AND UNTIL YOU SURRENDER THIS CERTIFICATE.
ARTICLE IV
EXCHANGE ACT REPORTING BY TRUSTEE
Section 4.1. Exchange Act Reporting By Trustee.
The Trustee shall:
(a) on behalf of the Trust, prepare, execute and file with the
Commission in accordance with the rules and regulations prescribed by the
Commission, (A) a Current Report on Form 8-K attaching this Agreement and the
Exhibits hereto forthwith after the issuance of the Certificates; (B) a Current
Report on Form 8-K, within fifteen (15) days after each Distribution Date or
other event requiring the filing of such report, and (C) an Annual Report on
Form 10-K, for so long as such reports are required to be filed on behalf of the
Trust with the Commission pursuant to Section 13 or 15(d) of the Exchange Act.
The Trustee shall be entitled to consult with the Depositor in connection with
the performance of its duties under this Section 4.1(a) and the Depositor shall
cooperate with the Trustee at the request of the Trustee in connection with the
Trustee's performance of such duties.
(b) if the Underlying Securities Issuer's Exchange Act reporting
requirements remain suspended after an Available Information Event and after
following the procedures set forth in Section 3.10(b) of this Trust Agreement,
at a time when the Exchange Act reporting requirements applicable to the Trust
have not been suspended or terminated, prepare and file with the Commission,
annual reports, information, documents and other reports of the type required to
be filed under Form 8-K under the Exchange Act with respect to the Underlying
Securities Issuer, to the extent such reports are then available to the Trustee,
for as long as such reports with respect to the Underlying Securities Issue are
required to be filed on behalf of the Trust under the Exchange Act. Such reports
shall include quarterly and annual financial statements and other information of
the type required to be filed on Form 8-K under the Exchange Act with respect to
the Underlying Securities Issuer. The Trustee shall request the information
required to prepare such reports from the Underlying Securities Issuer, but
shall not be required to make any other attempts to obtain the information if it
is not voluntarily provided by the Underlying Securities Issuer.
31
(c) At any time when the Trust is not subject to Section 13 or 15(d) of
the Exchange Act, upon request to the Trustee by a Certificateholder or a
prospective purchaser from a Certificateholder of the information required by
Rule 144A(d)(4)(i) of the Securities Act, the Trustee shall furnish such
information to such Certificateholder or prospective purchaser, provided, that
for purposes of this Section 4.1(c), the information required by Rule
144A(d)(4)(i) shall be interpreted to mean information of the same type as the
Trustee was previously required to file under Section 13 or 15(d) of the
Exchange Act.
ARTICLE V
ACTIONS BY TRUSTEE
Section 5.1. Prior Notice to Certificateholders and Option Agent with
Respect to Certain Matters.
(a) Subject to Section 7.16 hereunder, the Trustee shall not take
action with respect to the following matters, unless (i) the Trustee shall have
notified the Class A-1 Certificateholders and Option Agent in writing of the
proposed action at least 30 days before the taking of such action, (ii) no
Certificateholders shall have notified the Trustee in writing prior to the 30th
day after such notice is given that such Certificateholders have withheld
consent or provided alternative direction, and, if any such Certificateholders
have so withheld consent or provided alternative direction, a majority of the
Voting Rights of all the Certificates, as specified in Section 5.3, shall have
notified the Trustee in writing prior to such 30th day that they have consented
to such action, and (iii) the Rating Agency Condition is satisfied:
(A) the initiation of any claim or lawsuit by the Trust (other
than a commencement of a Proceeding under Section 7.16) or the
compromise of any action, claim or lawsuit brought by or
against the Trust; or
(B) any amendment to this Agreement under Section 9.3.
(b) The Trustee shall not have the power to commence a voluntary
proceeding in bankruptcy relating to the Trust without the unanimous prior
approval of all Class A-1 Certificateholders and the delivery to the Trustee by
each such Certificateholder of a certificate certifying that each such
Certificateholder reasonably believes that the Trust is insolvent.
Section 5.2. Action by Trustee with Respect to Certain Matters.
Subject to Section 7.15 and, in the case of an Underlying Securities Event
of Default that has occurred and is continuing, Section 7.16, the Trustee shall
not agree to any amendment, modification or supplement to the Underlying
Securities.
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Section 5.3. Majority Control.
Except as expressly provided herein, any action that may be taken or
consent that may be given or withheld by the Certificateholders under this
Agreement may be taken, given or withheld by Certificateholders evidencing a
majority of the Voting Rights of all the Certificates.
ARTICLE VI
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
Section 6.1. Establishment of Collection Account and Securities Account.
(a) The Trustee shall establish and maintain in the name of the Trust
Eligible Trust Accounts known as the Collection Account and the Securities
Account, bearing an additional designation clearly indicating that the funds
deposited therein are held for the benefit of the Certificateholders, subject to
the obligations of the Trust, if any. The Trustee, directly or through its
agents, shall make reasonable efforts to collect all scheduled payments under
the Trust Assets and will follow, or cause to be followed, any collection
procedures that it would follow with respect to comparable financial assets that
it holds for its own account, provided that these procedures shall be consistent
with this Agreement and any related instrument governing the Underlying
Securities and any other Trust Asset.
(b) The Trustee shall possess all right, title and interest in and to
all funds on deposit from time to time in the Collection Account and the
Securities Account and in all proceeds thereof. The Collection Account and the
Securities Account shall be under the sole dominion and control of the Trustee
for the benefit of the Certificateholders, subject to the obligations of the
Trust, if any. If at any time the Collection Account or the Securities Account
ceases to be an Eligible Trust Account, the Trustee shall within 5 Business Days
(or such longer period, not to exceed 30 calendar days, to which each Rating
Agency may consent) establish a new Collection Account or Securities Account, as
applicable, as an Eligible Trust Account and shall transfer any funds in the
existing Collection Account or Securities Account, as applicable, to such new
Collection Account or new Securities Account, as applicable.
(c) The Collection Account shall be a non-interest bearing account.
Pending application pursuant to Sections 6.2 hereof, moneys held in the
Collection Account shall be held uninvested.
(d) The Securities Intermediary hereby agrees that any Trust Asset
credited to the Securities Account shall be treated as a "financial asset"
within the meaning of Section 8-102(a)(9) of the UCC.
(e) If at any time the Securities Intermediary shall receive any order
from the Trustee directing the transfer or redemption of any Trust Asset on
deposit in the Securities Account, the Securities Intermediary shall comply with
such entitlement order without further consent by the Depositor or any other
Person. The Securities Intermediary shall take all instructions (including
without limitation all notifications and entitlement orders) with respect to the
Securities Account solely from the Trustee.
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(f) The Securities Intermediary hereby confirms and agrees that:
(i) There are no other agreements entered into between the
Securities Intermediary and the Depositor with respect to the Securities
Account;
(ii) It has not entered into, and until the termination of this
Agreement will not enter into, any agreement with any other Person relating to
the Securities Account and/or any financial assets credited thereto pursuant to
which it has agreed to comply with entitlement orders (as defined in Section
8-102(a)(8) of the UCC) of such other Person; and
(iii) It has not entered into, and until the termination of the
Agreement will not enter into, any agreement with the Depositor or the Trustee
purporting to limit or condition the obligation of the Securities Intermediary
to comply with entitlement orders as set forth in this Section 6.1.
Section 6.2. Application of Trust Funds.
(a) The Trustee shall credit to the Collection Account all moneys or
property received by the Trust that constitute payments on, or proceeds from
redemption or sale (including issuer and third party tender offers and other
repurchases) of, the Underlying Securities. Any non-cash property received will
be liquidated by the Trustee in the manner determined by the Trustee and using
commercially reasonable efforts only to the extent necessary to avoid
distribution of fractional securities or other fractional property to
Certificateholders, and the proceeds thereof will be credited to the Collection
Account.
(b) Except as otherwise specified in subsections (c) and (e) below, the
Trustee shall, subject to its right pursuant to Section 7.16(a) to payment of
its reasonable expenses related to any proceeding in respect of a failure by the
Underlying Securities Issuer to pay the Whole Amount Due, distribute the
Available Funds as follows:
(i) pro rata to the Certificateholders of the Class A-1
Certificates and Class B-1 Certificates, from all amounts received on the
Underlying Securities in respect of interest, the interest distributable with
respect to such Class, if any, on any Distribution Date as determined in
accordance with Section 3.1(c);
(ii) to the Certificateholders of the Class A-1 Certificates pro
rata by Certificate Principal Balance, all amounts received in respect of
principal in respect of the Underlying Securities, on the Final Distribution
Date.
If the Trust receives payments in respect of premium on the Underlying
Securities at a time when Certificates that are not Called Certificates remain
Outstanding, the Trustee shall immediately thereafter distribute the Available
Funds in respect of premium received, all to the Class A-1 Certificateholders,
pro rata by Certificate Principal Balance.
(c) If the Underlying Securities Issuer (or any third party tender
offeror) redeems, tenders for or makes other repurchases of some or all of the
Underlying Securities Issuer, then a corresponding portion of the Certificates
will be redeemed, as set forth
34
below. On the third Business Day after the Trustee receives the proceeds of any
full or partial redemption, tender for or repurchase of the Underlying
Securities, or any other unscheduled payment, the Trustee shall, subject to its
right pursuant to Section 7.16(a) to payment of its reasonable expenses related
to any proceeding in respect of a failure by the Underlying Securities Issuer to
pay the Whole Amount Due, make distributions in respect of such proceeds to
Certificateholders whose Certificates are redeemed as follows:
(i) to the Class A-1 Certificateholders and Class B-1
Certificateholders, a distribution of the amounts received in respect of
interest accrued but not paid at the pass-through rate of 7.625% per annum on
the Outstanding Certificate Principal Balance of the Class A-1 Certificates on
such day and 0.075% per annum on the Outstanding Certificate Notional Amount of
the Class B-1 Certificates on such day;
(ii) to the Class A-1 Certificateholders, a distribution of the
amounts received in respect of principal, pro rata by their Certificate
Principal Balances on such day; and
(iii) to the Class A-1 Certificateholders, a distribution of the
amounts, if any, received in respect of premium on the Underlying Securities,
pro rata by the Certificate Principal Balances of the Class A-1 Certificates
(and no amounts in respect of premium shall be distributed to the holders of the
Class B-1 Certificates).
If less than all of the Underlying Securities are redeemed, tendered
for or otherwise repurchased or prepaid, the Trustee shall select Class A-1
Certificates and Class B-1 Certificates for redemption pro rata based on the
Certificate Principal Balance and Certificate Notional Amount, respectively, of
each such Class, provided that purchases of a fraction of a single Class A-1
Certificate or Class B-1 Certificate shall not be made, and the Trustee shall
round up or down the number of Class A-1 Certificates or Class B-1 Certificates
to be purchased from each Class A-1 or Class B-1 Certificateholder to avoid such
fractional purchases.
(d) If the Trustee is unable to distribute Available Funds on a
Distribution Date because a payment with respect to the Underlying Securities
was not made to the Trustee on the date on which such payment was due, and such
payment is subsequently made to the Trustee, subject to subsection (e) below,
then the Trustee shall make the distribution that should have been made on the
Distribution Date on the first Business Day following the date on which such
payment is made to the Trustee. The Certificateholders will not receive any
interest or any other compensation in respect of late payments unless paid by
the issuer of the Underlying Securities, in which case the Trustee will
distribute any such interest or other compensation upon its receipt. The Trustee
will make distributions on a Distribution Date to the extent it receives funds
before 1:00pm. If any Available Funds are received by the Trustee after 1:00
p.m. on a Distribution Date, the Trustee shall use its reasonable efforts in the
processing of payments on any such date.
(e) If, prior to the Final Distribution Date, the Trustee receives
money or other property in respect of the Underlying Securities as a result of
an Underlying Securities Event of Default, the Trustee shall allocate and
distribute such moneys or other property (including any premium paid thereon) to
the holders of the Class A-1 Certificates, pro rata by
35
Certificate Principal Balance. The Trustee will make such distribution after
payment of any payment obligations of the Trust.
(f) It is understood that payments in the nature of prepayment or
redemption penalties, late payment charges, default interest or reinvestment
income which may be received by the Trustee shall be deposited by the Trustee in
the Collection Account for distribution to the Class A-1 Certificateholders as
additional interest, and shall not be retained by the Trustee for its own
account.
Section 6.3. Certain Provisions Applicable to all Distributions to
Certificateholders.
(a) If any withholding tax is imposed on any distribution (or
allocations of income) by the Trust to a Certificateholder, such tax shall
reduce the amount otherwise distributable to the Certificateholder. The Trustee
is hereby authorized and directed to retain from amounts otherwise distributable
to the Certificateholders sufficient funds for the payment of any tax that is
legally required to be withheld by the Trust (but such authorization shall not
prevent the Trustee if indemnified to its satisfaction, from contesting any such
tax in appropriate proceedings and withholding payment of such tax, if permitted
by law, pending the outcome of such proceedings). The amount of any withholding
tax imposed with respect to a Certificateholder shall be treated as cash
distributed to such Certificateholder at the time it is withheld by the Trust
and remitted to the appropriate taxing authority. If the Trustee determines that
withholding tax is payable with respect to a distribution (such as a
distribution to a Certificateholder that is a non-U.S. Person), the Trustee may
in its sole discretion withhold such amounts in accordance with this Section
6.3(a). If a Certificateholder wishes to apply for a refund of any such
withholding tax, the Trustee shall reasonably cooperate with such
Certificateholder in making such claim so long as such Certificateholder agrees
to reimburse the Trustee for any out-of-pocket expenses incurred. The Trustee
shall not be liable to any Person for withholding or failing to withhold any
such withholding tax. In the event that withholding taxes should have been
imposed on any distribution by the Trust to a Certificateholder but was not so
withheld at the time of the payment, the Trustee is hereby also authorized and
directed to obtain from amounts otherwise distributable currently and in the
future to the respective Certificateholder to pay amounts that should have been
withheld by the Trust and any penalties and interest due.
(b) [Reserved].
(c) Notwithstanding any other provisions in this Agreement, the right
of any Certificateholder to receive a distribution of principal, interest, and
premium, if any, allocable to a Certificate and to institute suit for the
enforcement of any such distribution shall not be impaired without the consent
of such Certificateholder.
Section 6.4. Appointment of Paying Agent.
The Trustee may appoint one or more paying agents (each, a "Paying
Agent") with respect to the Certificates. Any such Paying Agent shall be
authorized to make distributions to Certificateholders from the Collection
Account pursuant to the provisions of this Agreement
36
and shall report the amounts of such distributions to the Trustee. Any Paying
Agent shall have the revocable power to withdraw funds from such Collection
Account for the purpose of making such distributions. The Trustee in its sole
discretion may revoke such power and remove the Paying Agent. The initial Paying
Agent(s) shall be the Trustee and any co-paying agent chosen by the Depositor
and reasonably acceptable to the Trustee, including, if and so long as any Class
of Certificates is listed on any securities exchange and such exchange so
requires, a co-paying agent in any city required by the rules of such exchange.
Any Paying Agent shall be permitted to resign as a Paying Agent upon 30 days'
notice to the Trustee. If the Trustee shall resign as a Paying Agent, the
Trustee shall appoint a successor or additional Paying Agent. The Trustee shall
cause each Paying Agent and each successor or additional Paying Agent to execute
and deliver to the Trustee an instrument in which such Paying Agent or successor
or additional Paying Agent shall agree with the Trustee that (a) it will hold
all sums, if any, held by it for distribution to the Certificateholders in trust
for the benefit of the Certificateholders entitled thereto until such sums shall
be distributed to such Certificateholders or returned to the Trustee, and (b) it
will give the Trustee notice of any default by the Underlying Securities Issuer
(if such default is known to such Paying Agent). The Paying Agent shall return
all unclaimed funds to the Trustee and upon removal shall also return all funds
in its possession to the Trustee. The provisions of Sections 7.1, 7.3, 7.8 and
7.10 shall apply to the Trustee also in its roles as Paying Agent, for so long
as the Trustee shall act as Paying Agent. Any reference in this Agreement to the
Paying Agent shall include any co-paying agent unless the context requires
otherwise. Notwithstanding anything contained herein to the contrary, the
appointment of a Paying Agent pursuant to this Section 6.4 shall not release the
Trustee from the duties, obligations, responsibilities or liabilities arising
under this Agreement other than with respect to funds paid to such Paying Agent.
Section 6.5. Method of Payment.
Distributions required to be made to Certificateholders on any
Distribution Date shall be made to each Certificateholder of record on the
immediately preceding Record Date either by wire transfer, in immediately
available funds, to the account of such Certificateholder at a bank or other
entity having appropriate facilities therefor, if such Certificateholder shall
have provided to the Certificate Registrar appropriate written instructions at
least five Business Days prior to such Record Date, or, if not, by check mailed
to such Certificateholder at the address of such Certificateholder appearing in
the Certificate Register.
Section 6.6. Reports to Certificateholders.
On the Business Day next following each Distribution Date, the Trustee
shall forward or cause to be forwarded to the Depositor, each Certificateholder,
the Option Agent and the New York Stock Exchange (or, if the Class A-1
Certificates are no longer listed on the New York Stock Exchange, to any
exchange or securities trading system on which the Class A-1 Certificates are
then listed or quoted), a statement setting forth:
(a) the amount of the distribution on such Distribution Date to
Certificateholders of each Class allocable to principal of and premium, if any,
and interest on the Certificates of each such Class, and the amount of aggregate
unpaid interest accrued as of such Distribution Date;
37
(b) the aggregate stated principal amount of the Underlying Securities,
the current rating assigned by each Rating Agency thereto and the current
interest rate thereon at the close of business on such Distribution Date; and
(c) the aggregate Certificate Principal Balance of the Class A-1
Certificates and the Aggregate Certificate Notional Amount of Class B-1
Certificates at the close of business on such Distribution Date.
In the case of information furnished pursuant to subclause (a) above, the
amounts shall be expressed as a dollar amount per minimum authorized
denomination of each class of Certificates. Within a reasonable period of time
after the end of each calendar year, the Trustee shall furnish to each person
who at any time during such calendar year was a Certificateholder a statement
containing the information set forth in subclauses (a) and (b) above, aggregated
for such calendar year or the applicable 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 are
from time to time in effect. In the case of the rating furnished pursuant to
subclause (b) above, the Trustee may rely on an information agent such as
Bloomberg L.P.
Section 6.7. Accounting and Information to Certificateholders, Internal
Revenue Service and Others.
The Trustee shall (a) maintain (or cause to be maintained) the books of
the Trust on a calendar year basis on the accrual method of accounting, (b)
deliver to each Certificateholder, as may be required by the Code and applicable
Treasury Regulations or otherwise, such information reasonably available to the
Trustee as may be required to enable each Certificateholder to prepare its
federal income tax returns, (c) file such tax returns relating to the Trust and
make such elections as may from time to time be required or appropriate under
any applicable state or federal statute or rule or regulation thereunder, (d)
cause such tax returns to be signed in the manner required by law and (e)
collect or cause to be collected any withholding tax as described in and in
accordance with subsection 6.3(a) with respect to income or distributions to
Certificateholders. The Trustee shall be authorized to retain an agent for the
purpose of performing its obligations under the preceding clauses (a), (b) and
(c), but no expense of any such agent shall be an expense of the Trust,
notwithstanding that such expenses shall not have been paid by the Depositor
pursuant to its separate fee agreement with the Trustee.
Section 6.8. Signature on Returns.
Subject to applicable law, the Trustee shall sign on behalf of the Trust
any and all tax returns of the Trust.
Section 6.9. No Implied Duties of the Depositor.
No implied covenants or obligations shall be read into this Agreement
against the Depositor. The Depositor shall not be under any obligation
whatsoever to appear in, prosecute or defend any action, suit or other
proceeding in respect of the Underlying Securities or other Trust Assets or the
Certificates that is not incidental to its responsibilities under this Agreement
38
or that in its opinion may involve it in any expense or liability unless
indemnification satisfactory to it is provided.
ARTICLE VII
THE TRUSTEE
Section 7.1. Duties of Trustee; Notice of Defaults.
(a) The Trustee shall not be liable except for the performance by the
Trustee of such duties, and only such duties, as are specifically set forth in
this Agreement, including the administration of the Trust in the interest of the
Certificateholders, subject to and in accordance with the provisions of this
Agreement. No implied covenants or obligations shall be read into this Agreement
against the Trustee.
(b) In the absence of bad faith on its part, the Trustee may
conclusively rely upon certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement in determining the truth of the
statements and the correctness of the opinions contained therein; provided,
however, that the Trustee shall have examined such certificates or opinions so
as to determine compliance of the same with the requirements of this Agreement.
(c) The Trustee (or any director, officer, employee or agent thereof)
shall not be relieved from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct or bad faith, except
that:
(i) this Section 7.1(c) shall not limit the effect of Section
7.1(a) or (b);
(ii) the Trustee (or any such director, officer, employee or
agent thereof) shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Officers of the Trustee, unless
it is proved that the Trustee or such Responsible Officer was negligent
in ascertaining the pertinent facts;
(iii) the Trustee (or any such director, officer, employee or
agent thereof) shall not be liable with respect to any action it takes
or omits to take in good faith in accordance with a direction received
by it pursuant to Section 5.1, 5.3 or 7.5; and
(iv) the Trustee (or any such director, officer, employee or
agent thereof) shall not be liable for any loss or diminution in value
of Underlying Securities sold by it under this Agreement in good faith
in accordance with its terms.
(d) Moneys received by the Trustee hereunder shall be deposited in the
Collection Account, and the Trustee shall not be liable to pay any interest
thereon.
(e) The Trustee shall not take any action that (i) is inconsistent with
the purposes of the Trust set forth in Section 2.3, (ii) would, to the actual
knowledge of a
39
Responsible Officer of the Trustee, result in the Trust's being characterized as
other than a grantor trust for federal income tax purposes, or (iii) the Trustee
should reasonably be expected to know would adversely affect the intended
classification of the Trust as a grantor trust for federal income tax purposes
(in this connection, the Trustee shall be protected in assuming that the
performance of its express duties hereunder, including any actions taken at the
direction of the Depositor, is in accordance with this Agreement). The Depositor
shall not direct the Trustee to take any action that would violate the
provisions of this Section 7.1(e).
(f) The Trustee (except as specifically provided herein) shall have the
legal power to exercise all of the rights, powers and privileges of holders of
the Underlying Securities and other Trust Assets. However, the Trustee (except
as specifically provided herein) shall not be under any obligation whatsoever to
appear in, prosecute or defend any action, suit or other proceeding in respect
of the Underlying Securities or other Trust Assets that is not incidental to its
responsibilities under this Agreement or that in its opinion may involve it in
any expense or liability unless indemnification satisfactory to it is provided.
(g) Section 315(e) of the TIA is hereby excluded from operation in
respect of this Agreement.
(h) If the Underlying Securities Issuer announces its intention to
tender for or otherwise make an unscheduled payment on or repurchase of the
Underlying Securities, or if a third party announces its intention to tender for
the Underlying Securities, the Trustee shall not accept such tender offer or
unscheduled payment or repurchase offer, other than upon the unanimous vote of
the Class A-1 Certificateholders, except to the extent specified in Section
2.15(j).
(i) The Trustee shall perform, execute, acknowledge and deliver or
cause to be performed, executed, acknowledged and delivered all such further
acts, instruments and assurances as may be required by the Option Agent in order
to enable it to carry out or perform its duties under the Call Option
Agreements.
Section 7.2. Rights of Trustee. The Trustee is authorized and directed to
execute and deliver the documents referred to in Article II to which the Trust
is to be a party, in such written form as the Depositor shall approve by
Depositor Order. In addition to the foregoing, the Trustee is authorized and
shall be obligated to take all actions required of the Trust pursuant to such
documents.
Section 7.3. Acceptance of Trusts and Duties.
Except as otherwise provided in this Article VII, in accepting the Trust
hereby created, the Trustee acts solely as Trustee hereunder and not in its
individual capacity and all Persons having any claim against the Trustee by
reason of the transactions contemplated by this Agreement shall look only to the
Trust Assets for payment or satisfaction thereof. The Trustee accepts the trusts
hereby created and agrees to perform its duties hereunder with respect to such
trusts but only upon the terms of this Agreement. The Trustee also agrees to
disburse all moneys actually received by it constituting part of the Trust
Assets upon the terms of this Agreement. The Trustee (and any director, officer,
employee or agent of the Trustee) shall not be liable or
40
accountable under the Trust Agreement under any circumstances, except (i) for
its own negligent action, its own negligent failure to act or its own willful
misconduct or bad faith (except that the foregoing shall not limit the effect of
subsections 7.1(a) or (b), or (ii) in the case of the inaccuracy of any
representation or warranty contained in Section 7.7). In particular, but not by
way of limitation (and subject to the exceptions set forth in the preceding
sentence):
(a) the Trustee shall at no time have any responsibility or liability
for or with respect to the legality, validity and enforceability of any
Underlying Securities or other Trust Assets, or the perfection and priority of
any security interest created by any Underlying Securities or the maintenance of
any such perfection and priority, or for or with respect to the sufficiency of
the Trust Assets or their sufficiency to generate the payments to be distributed
to Certificateholders under this Agreement, including the terms and conditions
of any Underlying Securities or other Trust Assets; the validity of the
assignment of any Underlying Securities or other Trust Assets to the Trust or of
any intervening assignment; the completeness of any Underlying Securities or
other Trust Assets; the performance or enforcement of any Underlying Securities
or other Trust Assets; the compliance by the Depositor with any warranty or
representation made under any agreement or document or the accuracy of any such
warranty or representation or any action of the Depositor taken in the name of
the Trustee;
(b) under no circumstances shall the Trustee be liable for indebtedness
or other payment or distribution obligations evidenced by or arising under this
Agreement, including the Certificate Principal Balance or Certificate Notional
Amount of and distributions on the Certificates;
(c) the Trustee shall not be responsible for or in respect of and makes
no representation as to the validity or sufficiency of any provision of this
Agreement, the accuracy or completeness of any offering documents for the
Certificates or for the due execution hereof by the Depositor or for the form,
character, genuineness, sufficiency, value or validity of any of the Underlying
Securities, the Certificates (other than the certificate of authentication on
the Certificates), the Call Options or any related documents, and the Trustee
shall in no event assume or incur any liability, duty or obligation to any
Certificateholder, other than as expressly provided for in this Agreement;
(d) the Trustee shall not be liable for the default or misconduct of
the Depositor or any other party (other than itself, as provided in this
Agreement) under this Agreement or otherwise;
(e) except as described in Section 7.16 in connection with an
Underlying Securities Event of Default, the Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this Agreement or to
make any investigation of related matters or to institute, conduct or defend any
litigation under or in relation to this Agreement at the request, order or
direction of any of the Certificateholders, unless the Certificateholders have
offered the Trustee reasonable security or indemnity against the costs, expenses
and liabilities which may be incurred by the Trustee. The right of the Trustee
to perform any discretionary act enumerated in this Agreement shall not be
construed as a duty, and the Trustee shall not be answerable for other than its
misconduct, bad faith or negligence in the performance of any such act;
41
(f) the Trustee shall not incur any liability to any Certificateholder
if, by reason of any provision of any present or future law, or regulation
thereunder, or any governmental authority, or by reason of any act of God or war
or other circumstance beyond the control of the relevant party, the Trustee
shall be prevented or forbidden from doing or performing any act or thing that
the terms of this Agreement provide shall be done or performed; and the Trustee
shall not incur any liability to any Certificateholder by reason of any
non-performance or delay, caused as aforesaid, in the performance of any act or
thing which the terms of this Agreement provide shall or may be done or
performed, or by reason of any exercise of, or failure to exercise, any
discretion provided for in this Agreement; and
(g) the rights, protections, immunities and benefits given to the
Trustee hereunder are extended to, and enforceable by, the Trustee in each of
its capacities hereunder.
Section 7.4. Preferential Collection of Claims Against Trustee.
The Trustee shall comply with Section 311(a) of the TIA, excluding any
creditor relationship listed in Section 311(b) of the TIA. A Trustee who has
resigned or been removed shall be subject to Section 311(a) of the TIA to the
extent required by that Section.
Section 7.5. Action Upon Instruction by Certificateholders.
(a) Subject to Sections 5.3 and 9.3 and in accordance with the terms of
this Agreement, the Certificateholders may by written instruction direct the
Trustee in the management of the Trust. Subject to Sections 7.3(e), 7.5(c) and
7.15, such direction may be exercised at any time by written instruction of the
Certificateholders pursuant to Section 5.3.
(b) Notwithstanding the foregoing, the Trustee shall not be required to
take any action under this Agreement if the Trustee shall have reasonably
determined, or shall have been advised by counsel, that such action is likely to
result in liability on the part of the Trustee or is contrary to the terms of
this Agreement or is otherwise contrary to law, or if the Trustee shall not have
received indemnity satisfactory to it as provided in Section 7.3(e). No
provision of this Agreement shall require the Trustee to expend or risk funds or
otherwise incur any financial liability in the performance of any of its rights
or powers under this Agreement, if the Trustee shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured or provided to it.
(c) Whenever the Trustee is unable to decide between alternative
courses of action permitted or required by the terms of this Agreement, or is
unsure as to the application, intent, interpretation or meaning of any provision
of this Agreement, the Trustee shall promptly give notice (in such form as shall
be appropriate under the circumstances) to the Class A-1 Certificateholders
(with a copy to the Option Agent) requesting instruction as to the course of
action to be adopted, and, to the extent the Trustee acts in good faith in
accordance with any instruction received in accordance with Section 5.3, or
otherwise in accordance with the instructions of the Depositor or the
Certificateholders in accordance with this Agreement, the Trustee shall not be
liable on account of such action to any Person. If the Trustee shall not have
received appropriate instructions within ten days of such notice (or within such
shorter period of
42
time as reasonably may be specified in such notice or may be necessary under the
circumstances) it may, but shall be under no duty to, take or refrain from
taking such action which is consistent, in its view, with this Agreement, and as
it shall deem to be in the best interests of the Certificateholders, and the
Trustee shall have no liability to any Person for any such action or inaction.
Section 7.6. Furnishing of Documents; Reports to Certificateholders and
DTC.
(a) The Trustee shall furnish to the Certificateholders, with a copy to
the New York Stock Exchange (or, if the Class A-1 Certificates are no longer
listed on the New York Stock Exchange, to any exchange or securities trading
system on which the Class A-1 Certificates are then listed or quoted), promptly
upon receipt of a written request therefor, duplicates or copies of all reports,
notices, requests, demands, certificates, financial statements and any other
instruments furnished to the Trustee under this Agreement. In addition, if
required by Section 313(a) of the TIA, within 60 days after December 31 of each
year, the Trustee shall mail to (i) each Certificateholder as required by
Section 313(c) of the TIA and (ii) the Depositor, a brief report dated as of
such date that complies with Section 313(a) of the TIA. A copy of any report
delivered pursuant to this Section 7.6(a) shall, at the time of its mailing to
Certificateholders and the Depositor, be filed by the Trustee with the
Commission and the New York Stock Exchange (or, if the Class A-1 Certificates
are no longer listed on the New York Stock Exchange, to any exchange or
securities trading system on which the Class A-1 Certificates are then listed or
quoted).
(b) The Trustee shall within 90 days of an event described in Section
313(b) of the TIA mail to (i) each Certificateholder as required by Section
313(c) of the TIA and (ii) the Depositor, a brief report dated as of such date
that complies with Section 313(b) of the TIA. A copy of any report delivered
pursuant to this Section 7.6(b) shall, at the time of its mailing to
Certificateholders and the Depositor, be filed by the Trustee with the
Commission and the New York Stock Exchange (or, if the Class A-1 Certificates
are no longer listed on the New York Stock Exchange, to any exchange or
securities trading system on which the Class A-1 Certificates are then listed or
quoted).
(c) Annual unaudited reports setting forth the amounts of payments on
the Certificates, and whether such amounts are principal, premium or interest
shall be prepared by the Trustee and sent to the Certificateholders.
Section 7.7. Representations and Warranties of Trustee.
The Trustee hereby represents and warrants, for the benefit of the
Certificateholders, that:
(a) it is a banking corporation duly incorporated, validly existing and
in good standing under the laws of the State of New York;
(b) it has full power, authority and legal right to execute, deliver,
and perform its obligations under, this Agreement, and has taken all necessary
action to authorize the execution, delivery and performance by it of this
Agreement;
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(c) the Trustee maintains its books and records with respect to its
Securities Accounts in the State of New York;
(d) the Trustee has not granted any lien on the Trust Assets nor are
the Trust Assets subject to any lien on properties of the Trustee in its
individual capacity; the Trustee has no actual knowledge and has not received
actual notice of any lien on the Trust Assets (other than any liens of the
Trustee in favor of the beneficiaries of the Trust Agreement); other than the
interests of the Certificateholders, the books and records of the Trustee do not
identify any Person as having an interest in the Trust Assets;
(e) the Trustee makes no representation as to (i) the validity,
legality, sufficiency or enforceability of any of the Trust Assets or (ii) the
collectability, insurability, effectiveness or suitability of any of the Trust
Assets;
(f) the execution, delivery and performance by it of this Agreement (i)
will not violate any provision of any law or regulation governing the powers of
the Trustee or any order, writ, judgment or decree of any court, arbitrator or
governmental authority applicable to the Trustee or any of its assets and (ii)
will not violate any provision of the corporate charter or by-laws of the
Trustee;
(g) this Agreement has been duly executed and delivered by the Trustee
and constitutes the legal, valid and binding agreement of the Trustee,
enforceable against the Trustee in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization, or
other similar laws affecting the enforcement of creditors' rights in general and
by general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law; and
(h) the execution, delivery and performance by the Trustee of this
Agreement will not require the authorization, consent or approval of, the giving
of notice to, the filing or registration with, or the taking of any other action
in respect of, any governmental authority or agency regulating the banking and
corporate trust activities of banks or trust companies in the jurisdiction in
which the Trust was formed.
The Trustee and the Securities Intermediary hereby represent and warrant
that:
(a) The Securities Account is a "securities account" within the meaning
of Section 8-501 of the UCC and contains only property held by the Securities
Intermediary as fiduciary. The Securities Intermediary is acting in the capacity
of a "securities intermediary" within the meaning of Section 8-102(a)(14) of the
UCC;
(b) The Granted Underlying Securities have been (i) delivered to the
Securities Intermediary pursuant to the Agreement; (ii) credited to the
Securities Account; and (iii) registered in the name of the Securities
Intermediary or its nominee, indorsed to the Securities Intermediary or in blank
or credited to another securities account maintained in the name of the
Securities Intermediary. In no case will any Underlying Securities or other
financial assets credited to the Securities Account be registered in the name of
the Depositor, payable to the order of the Depositor or specially indorsed to
the Depositor except to the extent the foregoing have been specially indorsed to
the Securities Intermediary or in blank; and
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(c) The Securities Account is an account to which financial assets are
or may be credited, and the Securities Intermediary shall treat the Trustee as
entitled to exercise the rights that comprise any financial asset credited to
the account.
Section 7.8. Reliance; Advice of Counsel.
(a) The Trustee shall incur no liability to anyone in acting upon any
signature, instrument, notice, resolution, request, consent, order, certificate,
report, opinion, bond, facsimile transmission or other document or paper
reasonably believed by it to be genuine and reasonably believed by it to be
signed by the proper party or parties and need not investigate any fact or
matter in any such document. The Trustee may accept a certified copy of a
resolution of the board of directors or other governing body of any corporate
party as conclusive evidence that such resolution has been duly adopted by such
body and that the same is in full force and effect. As to any fact or matter the
method of the determination of which is not specifically prescribed herein, the
Trustee may for all purposes hereof rely on a certificate, signed by the
president or any vice president or by the treasurer or other authorized officers
of the relevant party, as to such fact or matter, and such certificate shall
constitute full protection to the Trustee for any action taken or omitted to be
taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereby created and
in the performance of its duties and obligations under this Agreement, the
Trustee: (i) may act directly or through its agents, attorneys, custodians or
nominees (including the granting of a power of attorney to Responsible Officers
of the Trustee to execute and deliver this Agreement, any Certificate or other
documents related thereto on behalf of the Trustee) pursuant to agreements
entered into with any of them, and the Trustee shall not be liable for the
conduct or misconduct of such agents, attorneys, custodians or nominees if such
agents, attorneys, custodians or nominees shall have been selected by the
Trustee in good faith and with reasonable care and (ii) may consult with
counsel, accountants and other skilled professionals to be selected in good
faith and with reasonable care and employed by it. The Trustee shall not be
liable for anything done, suffered or omitted in good faith by it in accordance
with the opinion or advice of any such accountants or other such persons and not
contrary to this Agreement.
Section 7.9. Trustee May Own Certificates.
The Trustee in its individual or any other capacity shall be permitted to
become the owner or pledgee of Certificates and may deal with the Depositor in
the same manner as it would have if it were not the Trustee, subject to the
limitations on the rights of the Trustee, if it is holding the Certificates in
its individual capacity, in voting on any demand, authorization, direction,
notice, consent or waiver hereunder, set forth in the definition of
"Outstanding" in Section 1.1.
Section 7.10. Compensation and Indemnity.
The Bank of New York shall be entitled to receive from the Depositor, as
compensation for acting as Trustee hereunder and acting as Option Agent under
the Call Option Agreements, fees pursuant to a separate agreement between The
Bank of New York and the Depositor, and shall be reimbursed by the Depositor for
all reasonable expenses, disbursements
45
and advances incurred or made as Trustee (including the reasonable compensation,
disbursements and expenses of its counsel and other persons not regularly in its
employ). The Depositor shall indemnify and hold harmless the Trustee and its
successors, assigns, agents, directors, officers and employees against any and
all loss, liability or reasonable expense (including attorney's fees) incurred
by it in connection with any legal action relating to the administration of this
Trust and the performance of its duties thereunder. The Trustee shall notify the
Depositor promptly of any claim for which it or any such Person may seek
indemnity. Failure by the Trustee to so notify the Depositor shall not relieve
the Depositor of its obligations hereunder. The Depositor need not reimburse any
expense or indemnify against any loss, liability or expense that is incurred by
the Trustee through the Trustee's own misconduct, negligence or bad faith in the
performance of the Trustee's duties under this Agreement. The Depositor agrees
that the provisions of this Section 7.10 shall apply to The Bank of New York
acting in its individual capacity hereunder in the same manner as they apply to
the Trustee. The indemnities contained in this Section 7.10 shall survive the
resignation or termination of the Trustee or the termination of this Agreement.
Failure by the Depositor to pay, reimburse or indemnify the Trustee shall
not entitle the Trustee to any payment, reimbursement or indemnification from
the Trust, nor shall such failure release the Trustee from the duties it is
required to perform under this Agreement. Any unpaid, unreimbursed or
unindemnified amounts shall not be borne by the Trust and shall not constitute a
claim against the Trust (except to the extent that the Trustee is entitled to
recover such amount pursuant to the provisions of Section 7.16(a)).
Section 7.11. Replacement of Trustee.
(a) The Trustee may resign at any time and be discharged from the
trusts hereby created by giving 30 days' prior written notice thereof to the
Depositor. The Depositor shall appoint a successor Trustee by delivering a
written instrument, in duplicate, to the resigning Trustee and the successor
Trustee. If no successor Trustee shall have been 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. The Depositor shall remove the Trustee if:
(i) the Trustee shall cease to be eligible in accordance with
the provisions of Section 7.14 and shall fail to resign after written
request therefor by the Depositor;
(ii) the Trustee shall be adjudged bankrupt or insolvent;
(iii) a receiver or other public officer shall be appointed or
take charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation;
(iv) the Trustee shall fail to carry out its duties hereunder;
or
(v) the Trustee shall otherwise be incapable of acting.
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(b) If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Depositor shall promptly appoint a
successor Trustee by written instrument, in duplicate (one copy of which
instrument shall be delivered to the outgoing Trustee so removed and one copy to
the successor Trustee) and shall pay all fees and expenses owed to the outgoing
Trustee.
(c) Unless the Trust has been completely liquidated and the proceeds of
the liquidation distributed to Certificateholders, any resignation or removal of
the Trustee and appointment of a successor Trustee pursuant to any of the
provisions of this Section 7.11 shall not become effective until a written
acceptance of appointment is delivered by the successor Trustee to the outgoing
Trustee and the Depositor and all fees and expenses due to the outgoing Trustee
are paid; provided that with respect to any of the events specified in Section
7.11(a), the payment of the fees and expenses due to the outgoing Trustee shall
not be a condition for the removal of such Trustee and the appointment of a
successor Trustee. Any successor Trustee appointed pursuant to this Section 7.11
must be eligible to act in such capacity in accordance with Section 7.14 and,
following compliance with the preceding sentence, shall become fully vested with
all the rights, powers, duties and obligations of its predecessor under this
Agreement, with like effect as if originally named as Trustee. The Depositor
shall provide notice within five (5) Business Days of the resignation or removal
of the Trustee to each Rating Agency and each Certificateholder.
(d) The predecessor Trustee shall upon payment of its fees and expenses
deliver to the successor Trustee all documents and statements and moneys held by
it under this Agreement. The Depositor and the predecessor Trustee shall execute
and deliver such instruments and do such other things as may reasonably be
required for fully and certainly vesting and confirming in the successor Trustee
all such rights, powers, duties and obligations.
(e) Upon acceptance of appointment by a successor Trustee pursuant to
this Section 7.11, the Depositor shall mail notice of the successor of such
Trustee to all Certificateholders and each Rating Agency.
Section 7.12. 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 all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided that
such corporation is eligible pursuant to Section 7.14, and without the execution
or filing of any instrument or any further act on the part of any of the parties
hereto; provided, however, that the Trustee shall mail notice of such merger or
consolidation to the Depositor and each Rating Agency.
Section 7.13. Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust Assets may at the time be located, the Depositor and
the Trustee acting jointly shall
47
have the power and shall execute and deliver all instruments to appoint one or
more Persons approved by the Trustee and the Depositor to act as co-trustee,
jointly with the Trustee, or as separate trustee or trustees, of all or any part
of the Trust Assets, and to vest in such Person in such capacity such title to
the Trust Assets, or any part thereof, and, subject to the other provisions of
this Section 7.13, 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 fifteen (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 under this Agreement
shall be required to meet the terms of eligibility as a successor trustee
pursuant to Section 7.14 and no notice of the appointment of any co-trustee or
separate trustee shall be required pursuant to Section 7.11.
(b) Each separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(i) all rights, power, duties and obligations conferred or
imposed upon the Trustee shall be conferred upon and exercised or
performed by the Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee
is not authorized to act separately without the Trustee joining in such
act), 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 Assets or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such separate
trustee or co-trustee, but solely at the direction of the Trustee;
(ii) no separate trustee or co-trustee under this Agreement
shall be personally liable by reason of any act or omission of any
other trustee under this Agreement; and
(iii) the Depositor and the Trustee acting jointly may at any
time accept the resignation of, or may remove, any separate trustee or
co-trustee.
(c) 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 this 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 this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Each
such instrument shall be filed with the Trustee and a copy thereof given to the
Depositor.
(d) Any separate trustee or co-trustee may at any time appoint the
Trustee as 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 this
Agreement on its behalf and in its name.
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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.
Section 7.14. Eligibility Requirements for Trustee.
(a) The Trustee shall at all times satisfy the requirements of Section
310(a) of the TIA. The Trustee shall at all times be a bank that is not an
Affiliate of the Depositor (but may have normal banking relationships with the
Depositor or the Underlying Securities Issuer and its respective Affiliates),
which (i) is organized and doing business under the laws of any State or the
United States; (ii) is authorized under such laws to exercise corporate trust
powers; (iii) has a combined capital and surplus of at least $50,000,000; (iv)
is subject to supervision or examination by federal or state authority; and (v)
has (or has a parent which has) a long-term unsecured debt rating of at least
BBB- by Standard & Poor's and at least Baa3 by Moody's. If such corporation
shall publish reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purpose of this Section 7.14, 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 condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section
7.14, the Trustee shall resign immediately in the manner and with the effect
specified in Section 7.11.
(b) The Trustee shall comply with Section 310(b) of the TIA; provided
that if the exclusion requirements set forth in Section 310(b)(1) of the TIA are
met, any other trust agreement under which other securities are outstanding that
evidence beneficial ownership interests in obligations of any Underlying
Securities Issuer shall be excluded from the operation of Section 310(b)(1) of
the TIA.
Section 7.15. Voting of the Underlying Securities Other than in the Case
of an Underlying Securities Event of Default.
The Trustee shall not consent to any amendment, modification or supplement
to the Underlying Securities except as permitted by this Agreement.
(a) The Trustee shall exercise any voting or consent rights with
respect to the Underlying Securities as set forth in Sections 7.15(b), (c) or
(d) below. The Trustee shall not, however, exercise such rights if the exercise
thereof (or the action with respect to which such rights are so elicited) would
adversely affect the intended classification of the Trust as a grantor trust for
federal income tax purposes.
(b) The Trustee may, subject to the provisions of Section 7.15(c) and,
in the case of an Underlying Securities Event of Default, Section 7.16, vote and
give consents and waivers in respect of the Underlying Securities as permitted
by DTC. In the event that the Trustee receives a request from DTC or the
Underlying Securities Indenture Trustee or the Underlying Securities Issuer for
its consent to any amendment, modification or waiver of the Underlying
Securities, the Underlying Securities Indenture or any other documents relating
to the Underlying Securities, or receives any other solicitation for any action
with respect to the
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Underlying Securities, the Trustee shall mail a notice of such proposed
amendment, modification, waiver or solicitation to each Option Holder with
respect to Class A-1 Certificates, and ten (10) Business Days after notice is
mailed to holders of the Call Options on Class A-1 Certificates, to each Class
A-1 Certificateholder of record as of such date. The Trustee shall request
instructions from the Class A-1 Certificateholders as to whether or not to
consent to or vote to accept such amendment, modification, waiver or
solicitation, and, subject to Section 7.15(c) and to the provisions herein
relating to the exercise by an Option Holder with respect to Class A-1
Certificates, the Trustee will vote a principal amount of the Underlying
Securities equal to the Certificate Principal Balance of the Outstanding Class
A-1 Certificates whose holders have given the Trustee instructions to vote.
Provided and to the extent that no Option Holder with respect to Class A-1
Certificates has given notice of its exercise of Call Options on Class A-1
Certificates and has paid the Call Price within such ten (10) Business Day
period, the Trustee shall consent or vote, or refrain from consenting or voting,
with respect to such amendment, modification, waiver or solicitation in the
proportion in which the holders of the Outstanding Class A-1 Certificates
instruct the Trustee to vote as of the date determined by the Trustee prior to
the date on which such consent or vote is required. However, if an Option Holder
with respect to Class A-1 Certificates has given notice of its exercise of Call
Options and has paid the Call Price within such ten (10) Business Day period,
the Trustee shall, with respect to such amendment, modification, waiver or
solicitation, vote a principal amount of the Underlying Securities equal to the
Certificate Principal Balance of the Outstanding Class A-1 Certificates subject
to such Call Options as directed by the Option Holder, and not as directed by
the applicable Class A-1 Certificateholders.
(c) Notwithstanding anything to the contrary herein, the Trustee shall
at no time vote or consent to any matter:
(i) unless such vote or consent (or the action with respect to
which such vote or consent is solicited) would not, based on an Opinion
of Counsel, adversely affect the intended classification of the Trust
as a grantor trust for federal income tax purposes; or
(ii) that would amend the Underlying Securities Indenture or
Underlying Securities to alter the timing or amount of any payment on
the Underlying Securities, except at the direction of the holders of
all the Outstanding Class A-1 Certificates or, if and to the extent
that any Option Holder with respect to Class A-1 Certificates has given
notice of its exercise of Call Options and has paid the Call Price, of
that Option Holder; or
(iii) that would result in the exchange or substitution of any
of the outstanding Underlying Securities pursuant to a plan for the
refunding or refinancing of such Underlying Securities, except at the
direction of the holders of all the Outstanding Class A-1 Certificates
or, if and to the extent that any Option Holder with respect to the
Class A-1 Certificates has given notice of its exercise of Call Options
and has paid the Call Price, of that Option Holder.
The Trustee shall have no liability for any failure to act resulting from
any Certificateholder's or Option Holder's late return of, or failure to return,
directions requested by
50
the Trustee from the Class A-1 Certificateholders or Option Holders with respect
to Class A-1 Certificates.
(d) Subject to Section 2.15, if an offer is made by the Underlying
Securities Issuer to issue new obligations in exchange and substitution for any
of the Underlying Securities, pursuant to a plan for the refunding or
refinancing of the Underlying Securities, or any other offer is made for the
Underlying Securities, the Trustee shall mail a notice of such offer to each
Option Holder with respect to the Class A-1 Certificates, and if the Option
Holders do not exercise their Call Options within ten (10) Business Days after
notice is mailed to holders of the Call Options on the Class A-1 Certificates,
to each Class A-1 Certificateholder of record as of such date. Provided and to
the extent that no Option Holder has given notice of its exercise of Call
Options and has paid the Call Price within such ten (10) Business Day period,
the Trustee must reject any such offer unless directed to accept it by holders
of 100% of the Outstanding Class A-1 Certificates, in which case the Trustee
will accept the offer provided that the Trustee has received an Opinion of
Counsel to the effect that any such exchange will not adversely affect the
intended classification of the Trust as a grantor trust for federal income tax
purposes and will not result in a deemed exchange of the Underlying Securities
or the Certificates for federal income tax purposes. However, if an Option
Holder with respect to Class A-1 Certificates has given notice of its exercise
of Call Options on the Class A-1 Certificates and has paid the Call Price within
such ten (10) Business Day period, the Trustee shall, with respect to such
offer, accept the offer for a principal amount of the Underlying Securities
equal to the Certificate Principal Balance of the Outstanding Class A-1
Certificates subject to such Call Options as directed by the Option Holder.
Section 7.16. Trustee's Enforcement and Voting of Underlying Securities
Upon an Underlying Securities Event of Default
(a) If (i) default is made in the payment of any installment of
interest on the Underlying Securities when the same becomes due and payable, and
such default continues unremedied for the period specified in the Underlying
Securities Indenture (or, if no such period is specified, upon such default); or
(ii) default is made in the payment of the principal or premium (if any) of or
any installment of the principal or premium (if any) of any Underlying
Securities when the same becomes due and payable, and such default continues
unremedied for the period specified in the Underlying Securities Indenture (or,
if no such period is specified, upon such default), and the Underlying
Securities Issuer shall, upon demand of the Trustee, fail to pay forthwith to
the Trustee, for the benefit of the Certificateholders, the whole amount then
due and payable on the Underlying Securities for principal or premium (if any)
and interest, with interest upon the overdue principal, premium and interest at
the rate borne by the Underlying Securities as provided for in the Underlying
Securities Indenture, and in addition thereto such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee and
its agents and counsel, to the extent permitted by law and the terms of the
Underlying Securities (such amount, the "Whole Amount Due") the Trustee shall
promptly thereafter proceed against the Underlying Securities Issuer on behalf
of the Certificateholders to enforce the Underlying Securities or otherwise
protect the interests of the Certificateholders (including, in the Trustee's
discretion, voting to accelerate the Underlying Securities). If any Underlying
Securities Event of Default (other than of the type described in clauses (i) and
(ii) above) occurs
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and is continuing, then, subject to Section 7.1(f), the Trustee may proceed
against the Underlying Securities Issuer on behalf of the Certificateholders.
Notwithstanding the foregoing, the holders of the Class A-1 Certificates
representing a majority of the Voting Rights shall be entitled to direct the
Trustee in any proceeding, subject to the receipt by the Trustee of indemnity
satisfactory to it, and may instruct the Trustee to stop the proceeding against
the Underlying Securities Issuer and to sell the Underlying Securities instead,
in the manner determined by the Trustee and using commercially reasonable
efforts. The Trustee shall be entitled to recover its reasonable expenses of any
such proceeding in respect of a failure by the Underlying Securities Issuer to
pay the Whole Amount Due from the proceeds of the Trust Assets, and to secure
such obligation to pay such expenses, the Trustee shall have a lien prior to the
Certificates on all Trust Assets for the amount of such expenses.
(b) If there is an Underlying Securities Event of Default and such
Underlying Securities Event of Default is known to the Trustee, the Trustee
shall give notice to the Class A-1 Certificateholders and the Option Agent in
the manner and to the extent provided in Section 313(c) of the TIA within five
(5) Business Days after the Trustee has actual knowledge of the occurrence of
such Underlying Securities Event of Default. Such notice shall identify the
Underlying Securities and set forth (i) the date and nature of such event of
default (ii) if applicable, the amount of interest, principal or premium in
default, and (iii) any other information that the Trustee may deem appropriate.
(c) If, following an Underlying Securities Event of Default, the
Trustee receives money or other property in respect of the Underlying Securities
(including from the sale thereof) or actual notice that money or other property
will be received, the Trustee will promptly give notice to the registered
holders of the Outstanding Class A-1 Certificates that remain unpaid and to the
Option Agent. Such notice shall state that the Trustee shall, not later than 30
days after the receipt of such moneys or other property, allocate and distribute
such moneys or other property to the holders of the Class A-1 Certificates then
Outstanding and unpaid (after deducting the costs incurred in connection
therewith) in accordance with Section 6.2(e). Non-cash property shall be
distributed in-kind except that, to the extent necessary to avoid distribution
of fractional securities or other fractional property to Class A-1
Certificateholders, non-cash property will be liquidated by the Trustee in the
manner determined by the Trustee and using commercially reasonable efforts, and
the proceeds thereof distributed in cash.
(d) If an Underlying Securities Event of Default occurs and is
continuing, in its discretion or if directed by holders of Outstanding Class A-1
Certificates representing a majority of the Voting Rights of the Outstanding
Class A-1 Certificates, the Trustee shall vote the Underlying Securities in
favor of directing, or take such other action as may be appropriate to direct,
the trustee of the Underlying Securities Indenture Trustee to accelerate the
Underlying Securities by declaring the unpaid principal balance and any premium
of the Underlying Securities plus any accrued and unpaid interest thereon to be
due and payable.
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ARTICLE VIII
TERMINATION OF AGREEMENT
Section 8.1. Termination of Agreement.
(a) This Agreement (other than Section 7.10) shall terminate and the
Trust shall dissolve, wind-up and terminate and be of no further force or effect
30 days after the final distribution by the Trustee of all moneys or other
property or proceeds of the Trust Assets in accordance with the terms of Article
VI of this Agreement (the date of such termination, the "Termination Date"). The
bankruptcy, liquidation, dissolution, death or incapacity of any
Certificateholder shall not (A) operate to terminate this Agreement or the
Trust, (B) 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 all or any part of the Trust or the Trust Assets or
(C) otherwise affect the rights, obligations and liabilities of the parties
hereto.
(b) Neither the Depositor nor any Certificateholder in its capacity as
such shall be entitled to revoke or terminate the Trust. Notwithstanding the
foregoing sentence, a Certificateholder that is also an Option Holder may
exercise any Call Option in accordance with its terms and exchange Certificates
acquired pursuant to such exercise for the Underlying Securities pursuant to
Section 2.15 hereof whether or not such exercise would result in the early
termination of the Trust pursuant to the terms of this Agreement.
(c) Notice of termination of the Trust, specifying the date upon which
the Certificateholders shall surrender their Certificates to the Trustee for
payment of the final distribution and cancellation, shall be given by the
Trustee by letter to the Certificateholders mailed in accordance with Section
10.3 below stating: (i) the date upon or with respect to which final
distributions on the Certificates shall be made upon presentation and surrender
of the Certificates at the office of the Trustee therein designated; (ii) the
amount of any such final distributions; (iii) that the Record Date, if any,
otherwise applicable to such Distribution Date is not applicable, distributions
being made only upon presentation and surrender of the Certificates at the
office of the Trustee therein specified; (iv) the office where Definitive
Certificates should be surrendered to the Trustee; and (v) that after such date,
no further periodic distributions shall accrue on the Certificates. The Trustee
shall give such notice to the Certificate Registrar (if other than the Trustee)
and the Depositor at the time such notice is given to Certificateholders. Upon
presentation and surrender of the Certificates, the Trustee shall cause to be
distributed to Certificateholders amounts distributable on such Distribution
Date pursuant to Section 6.2.
(d) If any Certificateholder shall not surrender its Certificates for
cancellation within six months after the date specified in the written notice
described in Section 8.1(c) above, the Trustee shall give a second written
notice to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
one year after the second notice any of 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 funds and other assets that shall remain
subject to this Agreement.
53
ARTICLE IX
AMENDMENTS
Section 9.1. Allocation of Voting Rights.
Except as otherwise provided herein, so long as the Certificates remain
Outstanding, the Class A-1 Certificateholders shall have 1 (one) vote for each
$25.00 of Certificate Principal Balance of Class A-1 Certificates held by them
and the Class B-1 Certificateholders shall not have any Voting Rights, except
with respect to any amendment to this Agreement that would materially adversely
affect the Class B-1 Certificateholders, in which case the Class B-1
Certificateholders shall have 1 (one) vote for each $25 of Certificate Notional
Amount of Class B-1 Certificates held by them.
Section 9.2. Amendments Without Consent of Certificateholders.
This Agreement may be amended by the Depositor and the Trustee without the
consent of any of the Certificateholders (but with prior notice to the Rating
Agency), to (a) cure any error or ambiguity, (b) correct or supplement any
provision in this Agreement that may be or is inconsistent with any other
provision in this Agreement, (c) add to the covenants, restrictions or
obligations of the Depositor or the Trustee for the benefit of the
Certificateholders, (d) provide for the appointment of a successor Trustee with
respect to the Trust Assets and add to or change any provisions that shall be
necessary to facilitate the administration of the trusts hereunder by more than
one trustee pursuant to Article VII, and (e) add, change or eliminate any other
provisions of this Agreement in any manner that shall not, as evidenced by an
Opinion of Counsel, (i) adversely affect in any material respect the interests
of the Certificateholders or Option Holders or (ii) adversely affect the
intended classification of the Trust as a grantor trust for federal income tax
purposes, or result in a sale or exchange of any Certificate for tax purposes,
provided that the Trustee has received written confirmation from each Rating
Agency that the Rating Agency Condition will be satisfied if such amendment is
made and (f) to comply with any requirements imposed by the Code.
Section 9.3. Amendments With Consent of Certificateholders.
This Agreement may be amended from time to time by the Depositor and the
Trustee with the consent of Class A-1 Certificateholders whose Class A-1
Certificates evidence more than a majority of the Voting Rights as of the close
of business on the record date for such consent as established by the Trustee
(which consent, whether given pursuant to this Section 9.3 or pursuant to any
other provision of this Agreement, shall be conclusive and binding on such
Person and on all future holders of Certificates and of any Certificates issued
upon the transfer thereof or in exchange thereof or in lieu thereof whether or
not notation of such consent is made upon the Certificates), and upon
satisfaction of the Rating Agency Condition, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement, or of modifying in any manner the rights of the
Certificateholders; provided that if the amendment would materially adversely
affect any Class of Certificateholders or the rating of any Class of
Certificates, such amendment must be approved by a majority of the Voting Rights
of each such Class, and provided further, however, that no such amendment shall
(a) reduce in
54
any manner the amount of, or alter the timing of, collections of payments on
Trust Assets or distributions or payments that are required to be made on any
Certificate, (b) reduce the aforesaid percentage of Voting Rights required to
consent to any such amendment, (c) as evidenced by an Opinion of Counsel,
adversely affect the intended classification of the Trust as a grantor trust for
federal income tax purposes, (d) cause the termination of the Trust, without, in
each case, the consent of all Class A-1 Certificateholders, or (e) change any
provisions relating to the Call Options that would adversely affect the Option
Holders without the consent of all of the Option Holders.
Section 9.4. Form of Amendments.
(a) Promptly after the execution of any amendment, supplement or
consent pursuant to Section 9.1, 9.2 or 9.3, the Trustee shall furnish a copy of
such amendment, supplement or consent to each Certificateholder and to each
Rating Agency.
(b) It shall not be necessary for the consent of Certificateholders
pursuant to Section 9.2 or 9.3 to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents (and any other
consents of Certificateholders provided for in this Agreement) and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable requirements as the Trustee may prescribe.
(c) Prior to the execution of any amendment to this Agreement, the
Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating
that the execution of such amendment is authorized or permitted by this
Agreement and all conditions provided for in this Trust Agreement relating to
such amendment have been complied with. The Trustee may, but shall not be
obligated to, enter into any such amendment that affects the Trustee's own
rights, duties or immunities under this Agreement or otherwise.
ARTICLE X
MISCELLANEOUS
Section 10.1. Certificateholders Have No Legal Title to Trust Property.
The Certificateholders shall not have legal title to any part of the Trust
Assets. The Certificateholders shall be entitled to receive distributions with
respect to their beneficial ownership interests in the Trust Assets only in
accordance with Articles VI and VIII. No transfer, by operation of law or
otherwise, of any right, title or interest in the Trust Assets shall operate to
terminate this Agreement or the trusts hereunder or entitle any transferee to an
accounting or to the transfer to it of legal title to any part of the Trust
Assets.
Section 10.2. Limitations on Rights of Others.
The provisions of this Agreement are solely for the benefit of the
Trustee, the Depositor, the Option Agent, the Certificateholders and the holders
of the Call Options, and nothing in this Agreement, whether express or implied,
shall be construed to give to any other
55
Person any legal or equitable right, remedy or claim in the Trust Assets or
under or in respect of this Agreement or any covenants, conditions or provisions
contained herein.
Section 10.3. Notices.
(a) All demands, notices and communications upon or to the Depositor or
the Trustee or any Rating Agency under this Agreement shall be in writing,
personally delivered, sent by electronic facsimile (with hard copy to follow via
first class mail) or mailed by certified mail-return receipt requested, and
shall be deemed to have been duly given upon receipt (i) in the case of the
Depositor, to the Depositor at the following address: Corporate Asset Backed
Corporation, 000 Xxxxx Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxx, Xxx Xxxx 00000,
Attention: Xxxxxx X. Xxxxx; (ii) in the case of the Trust or the Trustee, to the
Trustee at its Corporate Trust Office; (iii) in the case of the Option Agent, to
the Option Agent c/o the Trustee at its Corporate Trust Office; (iv) in the case
of any Rating Agency, at the applicable address specified by such Rating Agency
from time to time; and (v) in the case of any other Person, to such other Person
at such other address as shall be designated by such Person in a written notice
to the other parties to this Agreement.
(b) Any notice required or permitted to be given to a Certificateholder
shall be given by first-class mail, postage prepaid, at the address of such
Certificateholder as shown in the Certificate Register. Any notice so mailed
within the time prescribed in this Agreement shall be conclusively presumed to
have been duly given, whether or not the Certificateholder receives such notice.
Section 10.4. Tax Classification Election.
In the event that the Trust is not classified as a grantor trust for
federal income tax purposes, the Trustee shall file such forms as may be
required, or as the Depositor may specify, for the Trust to elect pursuant to
Section 761 of the Code to be excluded from the application of Subchapter K of
the Code. By their acceptance of the Certificates, the Certificateholders
authorize the Trustee to execute such forms on their behalf as may be required
to make such election and acknowledge that they will be able to determine their
taxable income with respect to the Certificates accurately without regard to the
provisions of Subchapter K of the Code.
Section 10.5. Severability.
If any one or more of the covenants, agreements, provisions or terms of
this 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 this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Certificateholders
thereof.
Section 10.6. Counterparts.
This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute one and the same instrument.
56
Section 10.7. Successors and Assigns.
All covenants and agreements contained herein shall be binding upon the
Depositor, the Trustee, and each Certificateholder and their respective
successors and permitted assigns, and such covenants shall inure to the benefit
of such persons and the Option Agent and the holders of the Call Options, all as
herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by a Certificateholder shall bind the successors and
assigns of such Certificateholder.
Section 10.8. No Petition Covenant.
Notwithstanding any prior termination of this Agreement, the Trustee and
The Bank of New York acting in its individual capacity hereunder, each
Certificateholder and each Certificate Owner shall not, prior to the date which
is one year and one day after the termination of this Agreement, and the payment
in full of all debt or other securities of the Trust or the Depositor, or any
trust created by the Depositor that issues certificates rated at the request of
the Depositor by a nationally recognized rating agency, acquiesce in, petition
or otherwise invoke or cause the Trust or the Depositor to invoke the process of
any court or governmental authority for the purpose of commencing or sustaining
a case against the Trust or the Depositor under any federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Trust or the
Depositor or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Trust or the Depositor.
Section 10.9. No Recourse.
Each Certificateholder by accepting a Certificate acknowledges that such
Certificateholder's Certificates represent beneficial interests in the Trust
only and do not represent interests in or obligations of the Depositor, the
Trustee, any Option Holder or any Affiliate of any of them and no recourse may
be had against such parties or their assets, except as may be expressly set
forth or contemplated in this Agreement or the Certificates, and each
Certificateholder's recourse is limited to the Underlying Securities and the
proceeds thereof. The Trustee shall have no recourse to the Underlying
Securities.
Section 10.10. Headings.
The headings of the various Articles and Sections herein are for
convenience of reference only and shall not define or limit any of the terms or
provisions hereof.
Section 10.11. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK, WITHOUT REFERENCE TO ANY CONFLICT OF LAW PROVISION, OTHER THAN
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW.
57
Section 10.12. Conflict with Trust Indenture Act.
(a) If any provision of this Agreement limits, qualifies or conflicts
with a provision of the TIA that is required to be included in this Agreement by
any of the provisions of the TIA, such imposed provision shall control. If any
provision of this Agreement modifies or excludes any provision of the TIA that
may be so modified or excluded, the latter provision shall be deemed to apply to
this Agreement as so modified or excluded, as the case may be.
(b) The provisions of Sections 310 through 317 of the TIA that impose
duties on any Person (including the provisions automatically deemed included
herein unless expressly excluded by this Agreement) are a part of and govern
this Agreement, whether or not physically contained herein.
58
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement
to be executed by their respective duly authorized officers or authorized
signatories as of the date first above written.
CORPORATE ASSET BACKED CORPORATION, as sole initial Option Holder
By:/s/ Xxxxxx Xxxxxxxxxx
---------------------------------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Vice President
THE BANK OF NEW YORK, as Option Agent and Attorney-in-Fact for
the Option Holders
By:/s/ Xxxxxxx Xxxx-Soon
---------------------------------------------------------
Name: Xxxxxxx Xxxx-Soon
Title: Assistant Vice-President
59
EXHIBIT A
TO TRUST AGREEMENT
SERIES 2002-1 UNDERLYING SECURITIES SCHEDULE
Underlying Securities Issuer: AOL Time Warner Inc.
Underlying Securities: 7.700% Debentures due 2032
Underlying Securities Trustee: JPMorgan Chase Bank.
Issue Date: April 8, 2002
Maturity Date: May 1, 2032
Currency: US dollars
Denominations: $1,000 and multiples of $1,000
Aggregate Principal Amount Issued: $2,000,000,000
Public Offering Price: 99.376%
Aggregate Principal Amount Outstanding $2,000,000,000
Type of Security corporate unsecured debt
Common Code 014616438
ISIN Number: US00184 AAG04
CUSIP No.: 00184 AAG0
Stated Interest Rate: 7.700% per annum
Interest Accrual Periods: Interest shall accrue semi-annually on May 1 and November 1 of each
year.
Interest Payment Dates: Each May 1 and November 1
Mode of Payment: Fixed Rate Security
Principal Amount of
Underlying Securities Deposited
Under Trust Agreement: $50,000,000
Exhibit A-1
Ratings: Baa1 by Moody's and BBB+ by Standard & Poor's
Guarantors: Each of America Online, Inc., Time Warner Inc., Time Warner
Companies, Inc. and Xxxxxx Broadcasting System, Inc.
Guarantees: Each of America Online and Time Warner guarantees (a) the full and
punctual payment of principal, interest and any other monetary
obligations of AOL Time Warner on the AOL Time Warner debentures,
when due, and (b) the full and punctual performance within
applicable grace periods of all other obligations of AOL Time
Warner under the AOL Time Warner indenture and the AOL Time Warner
debentures. Additionally, Time Warner Companies and Xxxxxx
Broadcasting System guarantee Time Warner's guarantee of the AOL
Time Warner debentures under substantially the same terms as the
guarantees of America Online and Time Warner of the AOL Time Warner
debentures.
Priority: The Underlying Securities are senior unsecured obligations of the
Underlying Securities Issuer and will rank equally and ratably with
all other senior unsecured and unsubordinated indebtedness of the
Underlying Securities Issuer. The guarantees of the Underlying
Securities are senior obligations of America Online, Inc., Time
Warner Inc., Time Warner Companies, Inc. and Xxxxxx Broadcasting
System, Inc., as applicable, and are their direct unsecured
obligations ranking equally with all other unsecured and
unsubordinated obligations of America Online, Time Warner, Time
Warner Companies and Xxxxxx Broadcasting System, respectively.
Each of the Guarantors is a holding company and the Underlying
Securities and the guarantees will be effectively subordinated to
all existing and future liabilities, including indebtedness, of the
subsidiaries of AOL Time Warner, America Online, Time Warner, Time
Warner Companies. and Xxxxxx Broadcasting System, respectively.
Optional Redemption: The Underlying Securities Issuer has the right to redeem the
Underlying Securities in whole or in part at any time and from time
to time, on at least 30 days' but not more than 60 days' prior
notice mailed to holders of the Underlying Securities and published
in a leading newspaper having general circulation in Luxembourg, so
long as the Underlying Securities are listed on the
Exhibit X-0
Xxxxxxxxxx Stock Exchange, at a redemption price equal to the greater of (i)
100% of the principal amount of the Underlying Securities to be
redeemed and (ii) the sum of the present values of the remaining
scheduled principal and interest payments that would be due after
the redemption date on the Underlying Securities to be redeemed,
discounted to the redemption date on a semi-annual basis at a
specified benchmark U.S. Treasury security rate plus 35 basis
points, together in either case with any accrued interest to the
date of redemption that has not been paid.
Exchange Listing: Luxembourg Stock Exchange
Underlying Securities Indenture: Indenture among AOL Time Warner Inc., as issuer, America Online,
Inc., as guarantor, Time Warner Inc., as guarantor, Time Warner
Companies, Inc. as guarantor, Xxxxxx Broadcasting System, Inc., as
guarantor and JPMorgan Chase Bank, as Trustee.
The Underlying Securities will be held by the Trustee as book-entry credits to
an account of the Trustee or its agent at The Depository Trust Company, New
York, New York ("DTC").
Exhibit A-3
EXHIBIT B
TO TRUST AGREEMENT
TERMS OF THE CERTIFICATES
I. Terms of the Certificates.
Aggregate Certificate Principal Balance of
Class A-1 Certificates: $50,000,000
Aggregate Certificate Notional Amount of Class
B-1 Certificates $50,000,000
Authorized Denomination (Class A-1 and Class
B-1 Certificates): $25.00 and integral multiples thereof
Ratings: The Class A-1 Certificates will be rated Baa1 by Xxxxx'x Investors
Service, Inc. and BBB+ by Standard & Poor's Rating Services, a
division of The XxXxxx-Xxxx Companies, Inc.
Interest Accrual Period: Semi-Annually
Distribution Dates: May 1 and November 1, commencing November 1, 2002 and ending on May 1, 2032
(or, if any of these dates is not a Business Day, the next succeeding Business
Day).
Pass-Through Rate: In respect of the Class A-1 Certificates, 7.625% per annum. In
respect of the Class B-1 Certificates, 0.075% per annum
Final Distribution Date: May 1, 2032
Record Dates: With respect to any Distribution Date, the 15th calendar day
preceding such Distribution Date, whether or not a Business Day.
Denominations; Specified Currency: The Certificates will be denominated and payable in U.S. dollars.
Class Seniority or Subordination N/A
Closing Date: June 21, 2002
Initial Certificate Registrar: The Bank of New York
Exhibit B-1
Corporate Trust Office: The Bank of New York
0 Xxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust Department
Exhibit B-2
EXHIBIT C
TO TRUST AGREEMENT
FORM OF CLASS A-1 CALLABLE CERTIFICATE
CABCO SERIES 2002-1 TRUST (AOL TIME WARNER INC.)
CLASS A-1 CALLABLE CERTIFICATE
$50,000,000
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE TRUST
AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE NOMINEE
OF THE DEPOSITORY TRUST COMPANY ("DTC"), CEDE & CO. THIS CERTIFICATE IS
EXCHANGEABLE FOR CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC
OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE TRUST
AGREEMENT AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC OR BY A NOMINEE OF
DTC TO DTC OR ANOTHER NOMINEE OF DTC.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO
THE TRUST 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.
BY ACQUIRING OR ACCEPTING ANY INTEREST IN THIS CERTIFICATE, YOU ACKNOWLEDGE THAT
THIS CERTIFICATE IS SUBJECT TO A PURCHASE OPTION GRANTED TO CORPORATE ASSET
BACKED CORPORATION, A DELAWARE CORPORATION (THE "DEPOSITOR"), BY UBS WARBURG LLC
UNDER THE CLASS A-1 CALL OPTION AGREEMENT, DATED AS OF JUNE 21, 2002 (THE "CALL
OPTION AGREEMENT"), AMONG THE DEPOSITOR, AS THE SOLE INITIAL OPTION HOLDER, UBS
WARBURG LLC, AS THE INITIAL PURCHASER FROM THE DEPOSITOR, AND SOLE HOLDER AT THE
TIME OF SUCH GRANT, OF THE CLASS A-1 CERTIFICATES, AND THE BANK OF NEW YORK, A
NEW YORK BANKING CORPORATION, ACTING AS OPTION AGENT FOR THE CLASS A-1
CERTIFICATEHOLDERS WITH RESPECT TO THE CLASS A-1 OPTIONS (THE "OPTION AGENT"),
WHICH OBLIGATIONS HAVE BEEN ASSUMED BY EACH SUBSEQUENT HOLDER OF SUCH CLASS A-1
CERTIFICATES; YOU AGREE TO ASSUME THE OBLIGATION OF YOUR TRANSFEROR TO PERFORM
SUCH CLASS A-1 OPTION; AND YOU ACKNOWLEDGE THAT YOUR TRANSFEROR HAS BEEN
RELEASED FROM ITS OBLIGATION TO PERFORM SUCH CLASS A-1 OPTION. THE CALL OPTION
AGREEMENT PERMITS THE HOLDER OF THE RELATED CLASS A-1 OPTION TO PURCHASE THIS
CERTIFICATE FROM YOU, WITHOUT YOUR CONSENT, AT THE TIMES AND ON THE
Exhibit C-1
CONDITIONS SPECIFIED IN THE CALL OPTION AGREEMENT AT THE CALL PRICE SPECIFIED IN
THAT AGREEMENT. THE CLASS A-1 OPTION MAY BE TRANSFERRED FROM TIME TO TIME. UPON
THE EXERCISE OF THE RELATED CLASS A-1 OPTION IN THE MANNER SPECIFIED IN THE CALL
OPTION AGREEMENT, THE CLASS A-1 CERTIFICATE WILL BE TRANSFERRED TO THE RELEVANT
CLASS A-1 OPTION HOLDER BY THE TRUSTEE, AND YOU WILL BE PAID THE CALL PRICE FOR
THIS CERTIFICATE IN ACCORDANCE WITH THE TERMS OF THE CALL OPTION AGREEMENT,
WITHOUT THE REQUIREMENT OF ANY FURTHER ACTION BY YOU, EXCEPT THAT IF THE CLASS
A-1 CERTIFICATES ARE HELD IN DEFINITIVE FORM AT SUCH TIME YOU WILL NOT RECEIVE
SUCH CALL PRICE UNLESS AND UNTIL YOU SURRENDER THIS CERTIFICATE.
This Certificate does not represent an interest in or obligation of the
Depositor, the Trustee or any of their Affiliates, except to the extent
described herein.
Exhibit C-2
CERTIFICATE NUMBER 1 $50,000,000
CUSIP No.: 000000000 Initial Certificate Principal Balance
CABCO SERIES 2002-1 TRUST (AOL TIME WARNER INC.)
CLASS A-1 CALLABLE CERTIFICATE
7.625% PASS-THROUGH RATE
evidencing a beneficial ownership interest in the Trust, as defined below, the
assets of which include $50,000,000 aggregate principal amount of the AOL Time
Warner Inc. 7.700% Debentures due 2032 (the "Underlying Securities") and all
payments received thereon, exclusive of the Retained Interest.
THIS CERTIFIES THAT CEDE & Co. is the registered owner of a
nonassessable, fully-paid, beneficial ownership interest in CABCO Series 2002-1
Trust (AOL Time Warner Inc.) (the "Trust") formed by Corporate Asset Backed
Corporation, as depositor (the "Depositor").
The Trust was created pursuant to a Trust Agreement, dated as of June
21, 2002 (as amended and supplemented from time to time, the "Trust Agreement"),
between the Depositor and The Bank of New York, as trustee (the "Trustee") and
option agent (the "Option Agent"). A summary of certain of the pertinent
provisions of the Trust Agreement is set forth below. To the extent not
otherwise defined herein, the capitalized terms used herein have the meanings
assigned to them in the Trust Agreement.
This Certificate is issued under and is subject to the terms,
provisions and conditions of the Trust Agreement, to which Trust Agreement the
Certificateholder by virtue of the acceptance hereof assents and by which such
Certificateholder is bound. The assets of the Trust include the Underlying
Securities and all proceeds of the Underlying Securities, but do not include the
Retained Interest. Capitalized terms used but not defined herein have the
meanings specified in the Trust Agreement.
Subject to the terms and conditions of the Trust Agreement (including
the availability of funds for distributions and any applicable grace period or
cure period), and all other obligations of the Trust (if any), there shall be
distributed on the dates specified in the Trust Agreement, to the Person in
whose name this Certificate is registered at the close of business on the Record
Date specified in the Trust Agreement, such Certificateholder's pro rata portion
of the distributions in respect of the Class A-1 Certificates to be distributed
to Certificateholders on each such date.
The distributions in respect of this Certificate are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts.
It is the intent of the Depositor and the Certificateholders that the
Trust will be classified as a grantor trust under subpart E, Part I of
subchapter J for purposes of the Internal Revenue Code of 1986. Except as
otherwise required by appropriate taxing authorities, the Depositor and the
Trustee, by executing the Trust Agreement, and each Certificateholder, by
acceptance of a
Exhibit C-3
Certificate, agrees to treat, and to take no action inconsistent with the
treatment of, the Certificate for such tax purposes as interests in a grantor
trust, and the provisions of the Trust Agreement shall be interpreted to further
this intention of the parties.
Distributions on this Certificate shall be made as provided in the
Trust Agreement by the Trustee by wire transfer or check mailed to the
Certificateholder of record in the Certificate Register without the presentation
or surrender of this Certificate or the making of any notation hereon. Except as
otherwise provided in the Trust Agreement and notwithstanding the above, the
final distribution on this Certificate shall be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office maintained for such purpose by the
Trustee at its Corporate Trust Office.
This Certificate does not represent an obligation of, or an interest
in, the Depositor, the Trustee or any Affiliates of either of them and no
recourse may be had against such parties or their assets, except as may be
expressly set forth or contemplated herein or in the Trust Agreement. In
addition, this Certificate is not guaranteed by any governmental agency or
instrumentality and is limited in right of payment to certain collections with
respect to the Trust Assets, all as more specifically set forth herein and in
the Trust Agreement.
This Certificate does not purport to summarize the Trust Agreement and
reference is hereby made to the Trust Agreement for information with respect to
the rights, benefits, obligations and duties evidenced thereby. A copy of the
Trust Agreement may be examined by any Certificateholder upon request during
normal business hours at the Corporate Trust Office of the Trustee, located at
the office of The Bank of New York, 0 Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 and
at such other places, if any, designated by the Trustee.
Reference is hereby made to the further terms of this Certificate set
forth on the reverse hereof, which further terms shall for all purposes have the
same effect as if set forth at this place.
This Certificate shall be construed in accordance with the laws of the
State of New York without reference to any conflict of law provision, other than
Section 5-1401 of the General Obligations Law, and the obligations, rights and
remedies of the parties hereunder shall be determined in accordance with such
laws.
Unless the certificate of authentication hereon shall have been
executed by a Responsible Officer of the Trustee by manual signature, this
Certificate shall not entitle the Certificateholder hereof to any benefit under
the Trust Agreement or be valid for any purpose.
Exhibit C-4
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust, has caused
this Certificate to be duly executed by its manual signature as of the date set
forth below.
CABCO SERIES 2002-1 TRUST (AOL TIME WARNER INC.)
By: THE BANK OF NEW YORK,
not in its individual capacity but solely as
Trustee
By:
--------------------------------------------
Responsible Officer
Name:
Title:
Dated: June 21, 2002
This is one of the Certificates referred to in the within-mentioned
Trust Agreement.
By: THE BANK OF NEW YORK,
not in its individual capacity but solely as
Authenticating Agent
By:
-------------------------------------------
Responsible Officer of Trustee
Name:
Title:
Dated: June 21, 2002
Exhibit C-5
[FORM OF REVERSE OF CLASS A-1 CALLABLE CERTIFICATE]
The Trust Agreement permits the amendment thereof, in certain
circumstances, without the consent of the Certificateholders.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registerable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies of the Certificate Registrar maintained by
the Trustee at its Corporate Trust Office, accompanied by a written instrument
of transfer in form satisfactory to the Trustee and the Certificate Registrar
duly executed by the Certificateholder hereof or such Certificateholder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations of the same Class and a like aggregate Certificate
Principal Balance will be issued to the designated transferee. The initial
Certificate Registrar appointed under the Trust Agreement is the Trustee.
This Certificate is issuable only in registered form in the authorized
denominations specified in the Trust Agreement. As provided in the Trust
Agreement and subject to certain limitations therein set forth, at the option of
a Certificateholder, Certificates are exchangeable for new Certificates of
authorized denominations of the same Class and a like aggregate Certificate
Principal Balance as requested by the Certificateholder surrendering the same;
provided, however, that no Certificate may be subdivided such that the
denomination of any resulting Certificate is other than the authorized
denominations specified in the Trust Agreement.
No service charge shall be made for any registration of transfer or
exchange, but the Trustee or the Certificate Registrar may require payment of a
sum sufficient to cover any tax or governmental charge payable in connection
therewith.
The Depositor, Trustee, Certificate Registrar and any agent of the
Depositor, Trustee or the Certificate Registrar may treat the person in whose
name this Certificate is registered as the owner hereof for all purposes, and
none of the Depositor, Trustee, Certificate Registrar or any such agent shall be
affected by any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement
shall terminate and the Trust created thereby shall dissolve, wind-up and
terminate and be of no further force or effect 30 days after the final
distribution by the Trustee of all moneys or other property or proceeds of the
Trust Assets in accordance with the terms of the Trust Agreement.
Neither the Depositor nor any Certificateholder shall be entitled to
revoke or terminate the Trust.
Exhibit C-6
Schedule 1
[Schedule 1, not repeated here, shall be identical to Exhibits A and B attached
to the Trust Agreement]
Exhibit C-7
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
--------------------------------------------------------------------------------
(Please print or typewrite name and address, including postal zip code, of
assignee)
--------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
--------------------------------------------------------------------------------
Attorney to transfer said Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.
Dated:
*/
--------------------
Signature Guaranteed:
-------------------- */
-------------
*/ NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member of the New York Stock Exchange or a commercial bank or
trust company.
Exhibit C-8
EXHIBIT D
TO TRUST AGREEMENT
FORM OF CLASS B-1 CALLABLE CERTIFICATE
CABCO SERIES 2002-1 TRUST (AOL TIME WARNER INC.)
CLASS B-1 CALLABLE CERTIFICATE
0.075% PASS-THROUGH RATE
NO EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF ERISA) WHETHER OR NOT IT
IS SUBJECT TO TITLE I OF ERISA, NO PLAN (AS DESCRIBED IN SECTION 4975(e)(1) OF
THE CODE) AND NO ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON
OF ANY SUCH PLAN'S INVESTMENT IN THE ENTITY (EACH, A "PLAN"), OR ANY PERSON
ACTING ON BEHALF OF ANY PLAN, MAY PURCHASE OR HOLD A CERTIFICATE OR ANY INTEREST
THEREIN, UNLESS (I) THE PURCHASER IS AN INSURANCE COMPANY, (II) IT IS NOT A
PERSON WHO HAS DISCRETIONARY AUTHORITY OR CONTROL WITH RESPECT TO THE ASSETS OF
THE TRUST OR A PERSON WHO PROVIDES INVESTMENT ADVICE FOR A FEE (DIRECT OR
INDIRECT) TO OR WITH RESPECT TO SUCH ASSETS, OR AN AFFILIATE OF SUCH A PERSON,
(III) THE SOLE SOURCE OF THE FUNDS BEING USED TO EFFECT ITS PURCHASE OF SUCH
CERTIFICATES IS ITS GENERAL ACCOUNT, (IV) ON THE DATE IT PURCHASES ANY SUCH
CERTIFICATES, LESS THAN 25% OF THE ASSETS OF ITS GENERAL ACCOUNT (AS DETERMINED
BY SUCH INSURANCE COMPANY) CONSTITUTE PLAN ASSETS, (V) THE ACQUISITION AND
HOLDING OF SUCH CERTIFICATES WILL NOT CONSTITUTE A NONEXEMPT PROHIBITED
TRANSACTION IN VIOLATION OF SECTION 406 OF ERISA AND SECTION 4975 OF THE
INTERNAL REVENUE CODE, AND (VI) IF, AS OF ANY LATER DATE ON WHICH ANY PERSON
PURCHASES ANY OF SUCH CERTIFICATES, 25% OR MORE OF THE ASSETS OF SUCH GENERAL
ACCOUNT CONSTITUTE PLAN ASSETS OR IF SUCH COMPANY BECOMES A PERSON WHO HAS
DISCRETIONARY AUTHORITY OR CONTROL WITH RESPECT TO THE ASSETS OF THE TRUST OR A
PERSON WHO PROVIDES INVESTMENT ADVICE FOR A FEE (DIRECT OR INDIRECT) TO OR WITH
RESPECT TO SUCH ASSETS, OR AN AFFILIATE OF SUCH A PERSON, THEN SUCH INSURANCE
COMPANY WILL DISPOSE OF SUCH CERTIFICATES THEN HELD IN ITS GENERAL ACCOUNT
PROMPTLY, AND IN ANY EVENT BY THE END OF THE NEXT CALENDAR QUARTER.
THIS CLASS B-1 CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAW. NO TRANSFER OF THIS
CLASS B-1 CERTIFICATE SHALL BE VALID OR EFFECTIVE UNLESS SUCH TRANSFER IS TO A
"QUALIFIED INSTITUTIONAL BUYER" PURSUANT TO RULE 144A UNDER THE ACT AND PRIOR TO
THE TRANSFER SUCH HOLDER(S) SHALL HAVE DELIVERED TO THE DEPOSITOR AND THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS RELATING TO THE
RESTRICTIONS ON TRANSFERS OF THIS CERTIFICATE (THE FORM OF WHICH LETTER MAY BE
OBTAINED FROM THE TRUSTEE).
Exhibit D-1
BY ACQUIRING OR ACCEPTING ANY INTEREST IN THIS CERTIFICATE, YOU ACKNOWLEDGE THAT
THIS CERTIFICATE IS SUBJECT TO A PURCHASE OPTION GRANTED TO CORPORATE ASSET
BACKED CORPORATION, A DELAWARE CORPORATION (THE "DEPOSITOR"), BY UBS WARBURG LLC
UNDER THE CLASS B-1 CALL OPTION AGREEMENT, DATED AS OF JUNE 21, 2002 (THE "CALL
OPTION AGREEMENT"), AMONG THE DEPOSITOR, AS THE SOLE INITIAL OPTION HOLDER, UBS
WARBURG LLC, AS THE INITIAL PURCHASER FROM THE DEPOSITOR, AND SOLE HOLDER AT THE
TIME OF SUCH GRANT, OF THE CLASS B-1 CERTIFICATES, AND THE BANK OF NEW YORK, A
NEW YORK BANKING CORPORATION, ACTING AS OPTION AGENT FOR THE CLASS B-1
CERTIFICATEHOLDERS WITH RESPECT TO THE CLASS B-1 OPTIONS (THE "OPTION AGENT"),
WHICH OBLIGATIONS HAVE BEEN ASSUMED BY EACH SUBSEQUENT HOLDER OF SUCH CLASS B-1
CERTIFICATES; YOU AGREE TO ASSUME THE OBLIGATION OF YOUR TRANSFEROR TO PERFORM
SUCH CLASS B-1 OPTION; AND YOU ACKNOWLEDGE THAT YOUR TRANSFEROR HAS BEEN
RELEASED FROM ITS OBLIGATION TO PERFORM SUCH CLASS B-1 OPTION. THE CALL OPTION
AGREEMENT PERMITS THE HOLDER OF THE RELATED CLASS B-1 OPTION TO PURCHASE THIS
CERTIFICATE FROM YOU, WITHOUT YOUR CONSENT, AT THE TIMES AND ON THE CONDITIONS
SPECIFIED IN THE CALL OPTION AGREEMENT AT THE CALL PRICE SPECIFIED IN THAT
AGREEMENT. THE CLASS B-1 OPTION MAY BE TRANSFERRED FROM TIME TO TIME. UPON THE
EXERCISE OF THE RELATED CLASS B-1 OPTION IN THE MANNER SPECIFIED IN THE CALL
OPTION AGREEMENT, THIS CLASS B-1 CERTIFICATE WILL BE TRANSFERRED TO, AND
REGISTERED IN THE NAME OF, THE RELEVANT CLASS B-1 OPTION HOLDER BY THE TRUSTEE,
AND YOU WILL BE PAID THE CALL PRICE FOR THIS CERTIFICATE IN ACCORDANCE WITH THE
TERMS OF THE CALL OPTION AGREEMENT, WITHOUT THE REQUIREMENT OF ANY FURTHER
ACTION BY YOU.
This Certificate does not represent an interest in or obligation of the
Depositor, the Trustee or any of their Affiliates, except to the extent
described herein.
Exhibit D-2
CERTIFICATE NUMBER 1 $50,000,000
CUSIP No.: ____________ Initial Certificate Notional Amount
CABCO SERIES 2002-1 TRUST (AOL TIME WARNER INC.)
CLASS B-1 CALLABLE CERTIFICATE
0.075% PASS-THROUGH RATE
evidencing a beneficial ownership interest in the Trust, as defined below, the
assets of which include $50,000,000 aggregate principal amount of the (AOL Time
Warner Inc.) 7.700% Debentures due 2032 (the "Underlying Securities") and all
payments received thereon, exclusive of the Retained Interest.
THIS CERTIFIES THAT _____________________is the registered owner of a
nonassessable, fully-paid, beneficial ownership interest in CABCO Series 2002-1
Trust (AOL Time Warner Inc.) (the "Trust") formed by Corporate Asset Backed
Corporation, as depositor (the "Depositor").
The Trust was created pursuant to a Trust Agreement, dated as of June
21, 2002 (as amended and supplemented from time to time, the "Trust Agreement"),
between the Depositor and The Bank of New York, as trustee (the "Trustee") and
Option Agent. A summary of certain of the pertinent provisions of the Trust
Agreement is set forth below. To the extent not otherwise defined herein, the
capitalized terms used herein have the meanings assigned to them in the Trust
Agreement.
This Certificate is issued under and is subject to the terms,
provisions and conditions of the Trust Agreement, to which Trust Agreement the
Certificateholder by virtue of the acceptance hereof assents and by which such
Certificateholder is bound. The assets of the Trust include the Underlying
Securities and all proceeds of the Underlying Securities, but do not include the
Retained Interest. Capitalized terms used but not defined herein have the
meanings specified in the Trust Agreement.
Subject to the terms and conditions of the Trust Agreement (including
the availability of funds for distributions and any applicable grace period or
cure period), and all other obligations of the Trust (if any), there shall be
distributed on the dates specified in the Trust Agreement, to the Person in
whose name this Certificate is registered at the close of business on the Record
Date specified in the Trust Agreement, such Certificateholder's pro rata portion
of the distributions in respect of the Class B-1 Certificates to be distributed
to Certificateholders on each such date.
The distributions in respect of this Certificate are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts.
It is the intent of the Depositor and the Certificateholders that the
Trust will be classified as a grantor trust under subpart E, Part I of
subchapter J for purposes of the Internal Revenue Code of 1986. Except as
otherwise required by appropriate taxing authorities, the Depositor and
Exhibit D-3
the Trustee, by executing the Trust Agreement, and each Certificateholder, by
acceptance of a Certificate, agrees to treat, and to take no action inconsistent
with the treatment of, the Certificate for such tax purposes as interests in a
grantor trust, and the provisions of the Trust Agreement shall be interpreted to
further this intention of the parties.
Distributions on this Certificate shall be made as provided in the
Trust Agreement by the Trustee by wire transfer or check mailed to the
Certificateholder of record in the Certificate Register without the presentation
or surrender of this Certificate or the making of any notation hereon. Except as
otherwise provided in the Trust Agreement and notwithstanding the above, the
final distribution on this Certificate shall be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office maintained for such purpose by the
Trustee at its Corporate Trust Office.
This Certificate does not represent an obligation of, or an interest
in, the Depositor, the Trustee or any Affiliates of either of them and no
recourse may be had against such parties or their assets, except as may be
expressly set forth or contemplated herein or in the Trust Agreement. In
addition, this Certificate is not guaranteed by any governmental agency or
instrumentality and is limited in right of payment to certain collections with
respect to the Trust Assets, all as more specifically set forth herein and in
the Trust Agreement.
This Certificate does not purport to summarize the Trust Agreement and
reference is hereby made to the Trust Agreement for information with respect to
the rights, benefits, obligations and duties evidenced thereby. A copy of the
Trust Agreement may be examined by any Certificateholder upon request during
normal business hours at the Corporate Trust Office of the Trustee, located at
the office of The Bank of New York, 0 Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 and
at such other places, if any, designated by the Trustee.
Reference is hereby made to the further terms of this Certificate set
forth on the reverse hereof, which further terms shall for all purposes have the
same effect as if set forth at this place.
This Certificate shall be construed in accordance with the laws of the
State of New York, without reference to any conflict of law provision, other
than Section 5-1401 of the General Obligations Law, and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
Unless the certificate of authentication hereon shall have been
executed by a Responsible Officer of the Trustee by manual signature, this
Certificate shall not entitle the Certificateholder hereof to any benefit under
the Trust Agreement or be valid for any purpose.
Exhibit D-4
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust, has caused
this Certificate to be duly executed by its manual signature as of the date set
forth below.
CABCO SERIES 2002-1 TRUST (AOL TIME WARNER INC.)
By: THE BANK OF NEW YORK,
not in its individual capacity but solely as
Trustee
By:
--------------------------------------------
Responsible Officer
Name:
Title:
Dated: June 21, 2002
This is one of the Certificates referred to in the within-mentioned
Trust Agreement.
By: THE BANK OF NEW YORK,
not in its individual capacity but solely as
Authenticating Agent
By:
--------------------------------------------
Responsible Officer of Trustee
Name:
Title:
Dated: June 21, 2002
Exhibit D-5
[FORM OF REVERSE OF CLASS B-1 CALLABLE CERTIFICATE]
The Trust Agreement permits the amendment thereof, in certain
circumstances, without the consent of the Certificateholders.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registerable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies of the Certificate Registrar maintained by
the Trustee at its Corporate Trust Office, accompanied by a written instrument
of transfer in form satisfactory to the Trustee and the Certificate Registrar
duly executed by the Certificateholder hereof or such Certificateholder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations of the same Class and a like aggregate Certificate
Principal Balance will be issued to the designated transferee. The initial
Certificate Registrar appointed under the Trust Agreement is the Trustee.
This Certificate is issuable only in registered form in the authorized
denominations specified in the Trust Agreement. As provided in the Trust
Agreement and subject to certain limitations therein set forth, at the option of
a Certificateholder, Certificates are exchangeable for new Certificates of
authorized denominations of the same Class and a like aggregate Certificate
Principal Balance as requested by the Certificateholder surrendering the same;
provided, however, that no Certificate may be subdivided such that the
denomination of any resulting Certificate is other than the authorized
denominations specified in the Trust Agreement.
No service charge shall be made for any registration of transfer or
exchange, but the Trustee or the Certificate Registrar may require payment of a
sum sufficient to cover any tax or governmental charge payable in connection
therewith.
The Depositor, Trustee, Certificate Registrar and any agent of the
Depositor, Trustee or the Certificate Registrar may treat the person in whose
name this Certificate is registered as the owner hereof for all purposes, and
none of the Depositor, Trustee, Certificate Registrar or any such agent shall be
affected by any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement
shall terminate and the Trust created thereby shall dissolve, wind-up and
terminate and be of no further force or effect 30 days after final distribution
by the Trustee of all moneys or other property or proceeds of the Trust Assets
in accordance with the terms of the Trust Agreement.
Neither the Depositor nor any Certificateholder shall be entitled to
revoke or terminate the Trust.
Exhibit D-6
Schedule 1
[Schedule 1, not repeated here, shall be identical to Exhibits A and B attached
to the Trust Agreement]
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
--------------------------------------------------------------------------------
(Please print or typewrite name and address, including postal zip code, of
assignee)
--------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
--------------------------------------------------------------------------------
Attorney to transfer said Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.
Dated:
*/
--------------------
Signature Guaranteed:
*/
--------------------
-------------
*/ NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member of the New York Stock Exchange or a commercial bank or
trust company.
Exhibit D-7
EXHIBIT E
[FORM OF INVESTMENT LETTER]
INVESTMENT LETTER
QUALIFIED INSTITUTIONAL BUYER
[Insert date]
The Bank of New York, as Trustee
0 Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Corporate Asset Backed Corporation, as Depositor
000 Xxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
In connection with its proposed purchase of Class B-1 Certificates (the
"Certificates") of the CABCO Series 2002-1 Trust (AOL Time Warner Inc.) (the
"Issuer") more particularly described in Schedule A hereto, the undersigned
purchaser (the "Purchaser") confirms that:
1. The Purchaser understands that substantial risks are involved in an
investment in the Certificates. The Purchaser represents that in making
its investment decision to acquire the Certificates, the Purchaser has
not relied on representations, warranties, opinions, projections,
financial or other information or analysis, if any, supplied to it by
any person, including you, Corporate Asset Backed Corporation, as
depositor (the "Depositor"), or The Bank of New York, as trustee (the
"Trustee"), or any of your or its affiliates. The Purchaser has such
knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of an investment in the
Certificates, and the Purchaser is able to bear the substantial
economic risks of such an investment. The Purchaser has relied upon its
own tax, legal and financial advisors in connection with its decision
to purchase the Certificates.
2. The Purchaser (A) is a "Qualified Institutional Buyer" (as defined in
Rule 144A under the Securities Act of 1933, as amended (the "Securities
Act")) and (B) is acquiring the Certificates for its own account or for
the account of one or more investors of the type described in clause
(A) above as to each of which the Purchaser exercises sole investment
discretion. The Purchaser is purchasing the Certificates for investment
purposes and not with a view to or for the offer or sale in connection
with, a public distribution, or in any other manner that would violate
the Securities Act or the securities or blue sky laws of any state.
3. The Purchaser understands that the Certificates have not been and will
not be registered under the Securities Act or under the securities or
blue sky laws of any state, and (i) that if it decides to resell,
pledge or otherwise transfer any Certificate, such Certificate may be
resold, pledged or transferred without registration only to an entity
that has delivered to the Depositor and the
Exhibit E-1
Trustee a certification that it is a Qualified Institutional Buyer that
is purchasing (1) for its own account or (2) for the account of another
Qualified Institutional Buyer, that it or such other Qualified
Institutional Buyer is aware that the resale, pledge or transfer is
being made in reliance on said Rule 144A and (ii) that it and each
subsequent holder will be required to notify any purchaser of any
Certificate from it of the resale restrictions referred to in clause
(i) above.
4. The Purchaser (A) is not a Benefit Plan Investor or is not acting on
behalf of a Benefit Plan Investor or (B) is a Benefit Plan Investor or
is acting on behalf of a Benefit Plan Investor but (i) is an insurance
company, (ii) does not have discretionary authority or control with
respect to the assets of the Issuer and does not provide investment
advice for a fee (direct or indirect) to or with respect to such
assets, nor is an affiliate of a person that has such discretionary
authority or control, (iii) the sole source of the funds being used to
purchase the Certificates is its general account, (iv) on the date
hereof, less than 25% of the assets of its general account (as
determined by such insurance company) constitute "plan assets", and (v)
the acquisition and holding of the Certificates will not constitute a
nonexempt prohibited transaction in violation of section 406 of ERISA
and section 4975 of the Internal Revenue Code.
5. The Purchaser understands that if it is an insurance company it will
have to dispose of any Certificates being held in its general account
promptly, and in any event by the end of the calendar quarter
immediately following the date on which (i) 25% or more of the assets
of its general account constitute plan assets or (ii) it has
discretionary authority or control with respect to the assets of the
Issuer or provides investment advice for a fee (direct or indirect) to
or with respect to such assets, or is an affiliate of a person that has
such discretionary authority or control.
6. The Purchaser understands that the Certificates will bear legends
substantially to the following effect, unless otherwise agreed by the
Depositor and the Trustee:
"THIS CLASS B-1 CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE
SECURITIES LAW. NO TRANSFER OF THIS CLASS B-1 CERTIFICATE
SHALL BE VALID OR EFFECTIVE UNLESS SUCH TRANSFER IS TO A
"QUALIFIED INSTITUTIONAL BUYER" PURSUANT TO RULE 144A UNDER
THE ACT AND PRIOR TO THE TRANSFER SUCH HOLDER(S) SHALL HAVE
DELIVERED TO THE DEPOSITOR AND THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS RELATING TO THE
RESTRICTIONS ON TRANSFERS OF THIS CERTIFICATE (THE FORM OF
WHICH LETTER MAY BE OBTAINED FROM THE TRUSTEE)."
"NO EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF
ERISA) WHETHER OR NOT IT IS SUBJECT TO TITLE I OF ERISA, NO
PLAN (AS DESCRIBED IN SECTION 4975(e)(1) OF THE CODE) AND NO
ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON
OF ANY SUCH PLAN'S INVESTMENT IN THE ENTITY (EACH, A "PLAN"),
OR ANY PERSON ACTING ON
Exhibit E-2
BEHALF OF ANY PLAN, MAY PURCHASE OR HOLD A CERTIFICATE OR ANY
INTEREST THEREIN, UNLESS (I) THE PURCHASER IS AN INSURANCE
COMPANY, (II) IT IS NOT A PERSON WHO HAS DISCRETIONARY
AUTHORITY OR CONTROL WITH RESPECT TO THE ASSETS OF THE TRUST
OR A PERSON WHO PROVIDES INVESTMENT ADVICE FOR A FEE (DIRECT
OR INDIRECT) TO OR WITH RESPECT TO SUCH ASSETS, OR AN
AFFILIATE OF SUCH A PERSON, (III) THE SOLE SOURCE OF THE FUNDS
BEING USED TO EFFECT ITS PURCHASE OF SUCH CERTIFICATES IS ITS
GENERAL ACCOUNT, (IV) ON THE DATE IT PURCHASES ANY SUCH
CERTIFICATES, LESS THAN 25% OF THE ASSETS OF ITS GENERAL
ACCOUNT (AS DETERMINED BY SUCH INSURANCE COMPANY) CONSTITUTE
PLAN ASSETS, (V) THE ACQUISITION AND HOLDING OF SUCH
CERTIFICATES WILL NOT CONSTITUTE A NONEXEMPT PROHIBITED
TRANSACTION IN VIOLATION OF SECTION 406 OF ERISA AND SECTION
4975 OF THE INTERNAL REVENUE CODE, AND (VI) IF, AS OF ANY
LATER DATE ON WHICH ANY PERSON PURCHASES ANY OF SUCH
CERTIFICATES, 25% OR MORE OF THE ASSETS OF SUCH GENERAL
ACCOUNT CONSTITUTE PLAN ASSETS OR IF SUCH COMPANY BECOMES A
PERSON WHO HAS DISCRETIONARY AUTHORITY OR CONTROL WITH RESPECT
TO THE ASSETS OF THE TRUST OR A PERSON WHO PROVIDES INVESTMENT
ADVICE FOR A FEE (DIRECT OR INDIRECT) TO OR WITH RESPECT TO
SUCH ASSETS, OR AN AFFILIATE OF SUCH A PERSON, THEN SUCH
INSURANCE COMPANY WILL DISPOSE OF SUCH CERTIFICATES THEN HELD
IN ITS GENERAL ACCOUNT PROMPTLY, AND IN ANY EVENT BY THE END
OF THE NEXT CALENDAR QUARTER."
"BY ACQUIRING OR ACCEPTING ANY INTEREST IN A CLASS B-1
CERTIFICATE, YOU ACKNOWLEDGE THAT THE CLASS B-1 CERTIFICATE IS
SUBJECT TO A PURCHASE OPTION GRANTED TO CORPORATE ASSET BACKED
CORPORATION, A DELAWARE CORPORATION (THE "DEPOSITOR"), BY UBS
WARBURG LLC UNDER THE CLASS B-1 CALL OPTION AGREEMENT, DATED
AS OF JUNE 21, 2002 (THE "CALL OPTION AGREEMENT"), AMONG THE
DEPOSITOR, AS THE SOLE INITIAL OPTION HOLDER, UBS WARBURG LLC,
AS THE INITIAL PURCHASER FROM THE DEPOSITOR, AND SOLE HOLDER
AT THE TIME OF SUCH GRANT, OF THE CLASS B-1 CERTIFICATES, AND
THE BANK OF NEW YORK, A NEW
Exhibit E-3
YORK BANKING CORPORATION, ACTING AS OPTION AGENT FOR THE CLASS
B-1 CERTIFICATEHOLDERS WITH RESPECT TO THE CLASS B-1 OPTIONS
(THE "OPTION AGENT"), WHICH OBLIGATIONS HAVE BEEN ASSUMED BY
EACH SUBSEQUENT HOLDER OF SUCH CLASS B-1 CERTIFICATES; YOU
AGREE TO ASSUME THE OBLIGATION OF YOUR TRANSFEROR TO PERFORM
SUCH CLASS B-1 OPTION; AND YOU ACKNOWLEDGE THAT YOUR
TRANSFEROR HAS BEEN RELEASED FROM ITS OBLIGATION TO PERFORM
SUCH CLASS B-1 OPTION. THE CALL OPTION AGREEMENT PERMITS THE
HOLDER OF THE RELATED CLASS B-1 OPTION TO PURCHASE THIS
CERTIFICATE FROM YOU, WITHOUT YOUR CONSENT, AT THE TIMES AND
ON THE CONDITIONS SPECIFIED IN THE CALL OPTION AGREEMENT AT
THE CALL PRICE SPECIFIED IN THAT AGREEMENT. THE CLASS B-1
OPTION MAY BE TRANSFERRED FROM TIME TO TIME. UPON THE EXERCISE
OF THE RELATED CLASS B-1 OPTION IN THE MANNER SPECIFIED IN THE
CALL OPTION AGREEMENT, THE CLASS B-1 CERTIFICATE WILL BE
TRANSFERRED TO, AND REGISTERED IN THE NAME OF, THE RELEVANT
CLASS B-1 OPTION HOLDER BY THE TRUSTEE, AND YOU WILL BE PAID
THE CALL PRICE FOR THE CERTIFICATE IN ACCORDANCE WITH THE
TERMS OF THE CALL OPTION AGREEMENT, WITHOUT THE REQUIREMENT OF
ANY FURTHER ACTION BY YOU, EXCEPT THAT IF THE CLASS B-1
CERTIFICATES ARE HELD IN DEFINITIVE FORM AT SUCH TIME YOU WILL
NOT RECEIVE SUCH CALL PRICE UNLESS AND UNTIL YOU SURRENDER
THIS CERTIFICATE."
7. The Purchaser understands that no subsequent transfer of the
Certificates is permitted unless (A) such transfer is of a Certificate
with the applicable minimum denomination and (B) the Purchaser causes
the proposed transferee to provide to the Depositor and the Trustee, a
letter substantially in the form of this letter, or such other written
statement as the Trustee shall prescribe.
8. The Purchaser is a person or entity (a "Person") who is one of the
following
A. (1) a citizen or resident of the United States, (2) a
corporation, partnership or other entity organized in or under
the laws of the United States or any political subdivision
thereof, (3) an estate the income of which is includible in
gross income for federal income tax purposes regardless of
source, or (4) a trust if a court within the United States is
able to exercise primary supervision of the administration of
the trust and one or more United States persons have the
authority to control all substantial decisions of the trust,
or
B. a Person not described in (A), whose ownership of such
Certificate is effectively connected with such Person's
conduct of a trade or business within the United States
Exhibit E-4
within the meaning of the Internal Revenue Code of 1986, as
amended (the "Code"), and its ownership of any interest in
such Certificate will not result in any withholding obligation
with respect to any payments with respect to the Certificates
by any Person (other than withholding, if any, under Section
1446 of the Code), or
C. a Person not described in (A) or (B) above, who is not a
Person: (1) that owns, directly or indirectly, 10% or more of
the total combined voting power of all classes of stock in AOL
Time Warner Inc. entitled to vote, (2) that is a controlled
foreign corporation related to AOL Time Warner Inc. within the
meaning of Section 864(d)(4) of the Code, or (3) that is a
bank extending credit pursuant to a loan agreement entered
into in the ordinary course of its trade or business, or
D. a Person not described in (A), (B) or (C) above, who is fully
eligible for the benefits of the "Interest" provision of the
income tax treaty between such Person's jurisdiction and the
United States and under the "Interest" provision of such
income tax treaty, any interest income received by such Person
from sources within the United States is wholly exempt from
tax by the United States.
The Purchaser agrees that (I) if it is a Person described in clause (A)
above, it will furnish to the Depositor and the Trustee a properly
executed IRS Form W-9, and (II) if it is a Person described in clause
(B) above, it will furnish to the Depositor and the Trustee a properly
executed IRS Form W-8ECI, (III) if it is a Person described in clause
(C) above, it will furnish to the Depositor and the Trustee a properly
executed IRS Form W-8BEN (or, if the Purchaser is treated as a
partnership for federal income tax purposes, a properly executed IRS
Form W-8IMY with all required supporting documentation including (but
not limited to) appropriate certification for all partners or members
attached) and (IV) if it is a Person described in clause (D) above, it
will furnish to the Depositor and the Trustee a properly executed IRS
Form W-8BEN, with Part II completed. The Purchaser also agrees that it
will provide a new IRS form upon the expiration or obsolescence of any
previously delivered form, and that it will provide such other
certifications, representations or Opinions of Counsel as may be
requested by the Depositor and the Trustee.
9. The Purchaser agrees that if at some time in the future it wishes to
transfer or exchange any of the Certificates, it will not transfer or
exchange any of the Certificates unless such transfer or exchange is in
accordance with the terms of the Trust Agreement pursuant to which the
Certificate was issued. The Purchaser understands that any purported
transfer of the Certificates (or any interest therein) in contravention
of any of the restrictions and conditions in the Trust Agreement shall
be void, and the purported transferee in such transfer shall not be
recognized by any Person as a holder of such Certificates, for any
purpose.
Capitalized terms used but not defined in this letter are used with the
respective meanings specified in the Trust Agreement dated as of June
21, 2002, between Corporate Asset Backed Corporation, as Depositor and
The Bank of New York, as Trustee and Option Agent.
[SIGNATURE PAGE FOLLOWS]
Exhibit E-5
You and the Trustee are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
[INSERT NAME OF PURCHASER].
By:
------------------------------
Name:
-------------------------------
Title:
-------------------------------
Exhibit E-6
Schedule A
CLASS B-1 CERTIFICATES
TRUST NAME OF PASS-THROUGH TOTAL DATE OF CERTIFICATE
SECURITIES UNDERLYING RATE ON CLASS CERTIFICATE TRUST NOTIONAL AMOUNT OF
SERIES NUMBER SECURITIES B-1 CERTIFICATES NOTIONAL AGREEMENT* CLASS B-1
ISSUER AMOUNT OF CERTIFICATES
CLASS B-1 PURCHASED
CERTIFICATES
2002-1 AOL Time 0.075% $50,000,000 June 21, 2002 [insert applicable
Warner Inc. notional amount
purchased]
* Initial Closing Date
Exhibit E-7
