Exhibit 4
PREFERREDPLUS 7.75% TRUST CERTIFICATES SERIES WCM-1
SERIES SUPPLEMENT
between
XXXXXXX XXXXX DEPOSITOR, INC.,
as Depositor,
and
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee and Securities Intermediary
Dated as of June _, 2001
SERIES SUPPLEMENT, dated as of June 1, 2001 (the "Supplement"), by
and between XXXXXXX XXXXX DEPOSITOR, INC., a Delaware corporation, as Depositor,
UNITED STATES TRUST COMPANY OF NEW YORK, a New York corporation, as Trustee and
Securities Intermediary.
W I T N E S S E T H:
WHEREAS, the Depositor desires to create the Trust designated
herein (the "Trust") by executing and delivering this Supplement, which shall
incorporate the terms of the Standard Terms for Trust Agreements, dated as of
February 20, 1998 (the "Standard Terms" and, together with this Supplement, the
"Trust Agreement"), by and between the Depositor and the Trustee and Securities
Intermediary, as modified by this Supplement;
WHEREAS, the Depositor desires to deposit the Underlying
Securities set forth on Schedule I attached hereto into the Trust;
WHEREAS, in connection with the creation of the Trust and the
deposit therein of the Underlying Securities, it is desired to provide for the
issuance of the Certificates evidencing undivided interests in the Trust and
Call Rights; and
WHEREAS, the Trustee has joined in the execution of the Standard
Terms and this Supplement to evidence the acceptance by the Trustee of the
Trust;
WHEREAS, the Securities Intermediary has joined in the execution
of the Standard Terms and this Supplement to evidence the acceptance by the
Securities Intermediary of its obligations thereunder and hereunder;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants expressed herein, it is hereby agreed by and between the
Depositor and the Trustee and Securities Intermediary as follows:
Section 1. Incorporation of Standard Terms. All of the provisions
of the Standard Terms, a copy of which is attached hereto as Exhibit A, are
hereby incorporated herein by reference in their entirety and this Supplement
and the Standard Terms shall form a single agreement among the parties. In the
event of any inconsistency between the provisions of this Supplement and the
provisions of the Standard Terms, the provisions of this Supplement will control
with respect to the transactions described herein.
Section 2. Definitions. Except as otherwise specified herein or as
the context may otherwise require, the following terms shall have the respective
meanings set forth below for all purposes under this Supplement (Section 2(b)
hereof sets forth terms listed in the Standard Terms that are not applicable to
this Series). Capitalized terms used but not defined herein shall have the
meanings assigned to them in the Standard Terms.
"Allocation Ratio": The allocation amongst the Certificateholders
in accordance with their pro rata interests in the Certificates.
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"Authorized Denomination": With respect to Certificates, an
aggregate stated amount of $1,000.
"Business Day": Any day that is not a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies in the
City of New York are authorized or obligated by law, regulation or executive
order to close and that also is specified as a Business Day with respect to the
Underlying Securities.
"Call Date": Any Business Day that a Call Holder designates as a
Call Date (i) on or after August 15, 2006 or (ii) before August 15, 2006 after
the announcement of any redemption or other unscheduled payment of the
Underlying Securities or receipt of notice of the termination of the Trust;
provided that if a Call Right is to be exercised after the announcement of any
redemption or other unscheduled payment of the Underlying Securities and prior
to such redemption or other unscheduled payment, then the Call Date designated
by the Call Holder must be the second Business Day prior to such redemption or
other unscheduled payment.
"Call Holder": The holder of a Call Right.
"Call Price": (i) Prior to August 15, 2006, $26.25 per Certificate
being called and (ii) on or after August 15, 2006, $25 per Certificate being
called, in each case plus any accrued and unpaid interest on each Certificate
being called to the Call Date.
"Call Right": The right, but not the obligation, pursuant to the
Warrant Agreement and any related Warrant Certificates (as defined in the
Warrant Agreement) of one or more Call Holders to purchase from the
Certificateholders on a Call Date, upon not less than 30 days (or not less than
5 days in the case of an announcement of any redemption or other unscheduled
payment of the Underlying Securities or receipt of notice of termination of the
Trust) but not more than 60 days prior to the Call Date, some or all of the
Certificates for the Call Price.
"Certificates": The 3,228,120 trust certificates issued in a
stated amount of $25 each and entitled to receive on each Distribution Date
until the Final Scheduled Distribution Date distributions at a rate of 7.75% per
annum on their stated amount.
"Closing Date": June 1, 2001.
"Collection Period": (i) With respect to each August 15
Distribution Date, the period beginning on the day after the February 15
Distribution Date of the current year and ending on such August 15 Distribution
Date, inclusive, except for the August 15, 2001 Distribution Date, as to which
the Collection Period shall be the period beginning on the Cut-off Date and
ending on such August 15, 2001 Distribution Date, inclusive, and (ii) with
respect to each February 15 Distribution Date, the period beginning on the day
after the August 15 Distribution Date of the previous year and ending on such
February 15 Distribution Date, inclusive; provided, however, that clauses (i)
and (ii) shall be subject to Section 9(c) hereof.
"Corporate Trust Office": The office of the Trustee located at 000
Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate
Trust Department; provided, however, that the office at which certificated
securities are delivered for registration of
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transfer, cancellation or exchange shall be the office of the Trustee, located
at 000 Xxxxxxxx, Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
"Cut-off Date": June 1, 2001.
"Depository": The Depository Trust Company, its nominees and their
respective successors.
"Distribution Date": August 15 and February 15 of each year (or if
such date is not a Business Day, the next succeeding Business Day), commencing
on August 15, 2001 and ending on the Final Scheduled Distribution Date.
"Distribution Election": Upon notice of the event set forth in
clause (a) of Section 3.04 of the Standard Terms, the Trustee shall exercise the
remedy set forth in clause (i) of such Section; upon notice of the event set
forth in clause (b) or (c) of Section 3.04 of the Standard Terms, the Trustee
shall exercise the remedy set forth in clause (ii) of such Section and shall, 10
days prior to the exercise of such remedy, provide written notice thereof to the
Call Holders.
"Eligible Investments": As defined in the Standard Terms;
provided, however, that (i) the minimum required rating for long-term
instruments will be equal to the lower of the rating of the Underlying
Securities or the Trust Certificates, and (ii) the rating of any short-term
instruments will be A-1+ by S&P and P1 by Xxxxx'x; and provided, further, that
any such investment matures no later than the Business Day prior to the next
succeeding Distribution Date.
"Escrow Agent": As will be set forth in the Escrow Agreement.
"Escrow Agreement": The escrow agreement to be entered into on the
Call Date among a given Call Holder, the Trustee and the Escrow Agent pursuant
to Section 14(c)(iii)(2) hereof.
"Event of Default": (i) A default in the payment of any interest
on any Underlying Security after the same becomes due and payable (subject to
any applicable grace period), (ii) a default in the payment of the principal of
or any installment of principal of any Underlying Security when the same becomes
due and payable and (iii) any other event specified as an event of default in
the Underlying Securities Indenture. For a summary of certain events of default
in the Underlying Securities Indenture, please refer to the Prospectus
Supplement.
"Final Scheduled Distribution Date": August 15, 2028 (or if such
date is not a Business Day, the next succeeding Business Day).
"Fixed Pass-Through Rate": 7.75% per annum.
"Optional Exchange Date": Any Distribution Date.
"Ordinary Expenses": The compensation due to the Trustee for
Ordinary Expenses as defined in the Standard Terms, which, with respect to
Ordinary Expenses other than those referred to in clause (iii) of such
definition and other than the costs of converting to
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XXXXX format the periodic reports required for the Trust under the Exchange Act,
shall be fixed at $2,000 per annum (payable in semi-annual installments of
$1,000).
"Pass-Through Rate": The Fixed Pass-Through Rate.
"Prepaid Ordinary Expenses": Zero (0).
"Prospectus Supplement": The Prospectus Supplement dated May 30,
2001 relating to the Certificates.
"Rating Agency": Xxxxx'x and S&P.
"Record Date": The Business Day immediately preceding each
Distribution Date.
"Series": PREFERREDPLUS 7.75% Trust Certificates Series WCM-1.
"Underlying Securities": The $90,000,000 aggregate principal
amount of 6.95% Debentures due August 15, 2028 issued by the Underlying
Securities Issuer, as described in Schedule I hereto.
"Underlying Securities Indenture": As set forth in Schedule I.
"Underlying Securities Issuer": WorldCom, Inc., a Georgia
corporation.
"Warrant Agreement": The Warrant Agreement, dated as of June 1,
2001, by and between the Trust and the Warrant Agent (as defined in the Warrant
Agreement).
(b) The terms listed below are not applicable to this Series.
"Accounting Date"
"Administration Account"
"Administrative Agent"
"Administration Agreement"
"Administrative Agent Termination Event"
"Advance"
"Calculation Agent"
"Eligible Expense"
"Exchange Rate Agent"
"Floating Pass-Through Rate"
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"Letter of Credit"
"Limited Guarantor"
"Limited Guaranty"
"Notional Amount"
"Related Assets"
"Reserve Account"
"Requisite Reserve Amount"
"Retained Interest"
"Surety Bond"
"Swap Agreement"
"Swap Counterparty"
"Swap Distribution Amount"
"Swap Guarantee"
"Swap Guarantor"
"Swap Receipt Amount"
"Swap Termination Payment"
Section 3. Designation of Trust and Certificates. (a) The Trust
created hereby shall be known as the "PREFERREDPLUS Trust Series WCM-1. The
Certificates evidencing certain undivided ownership interests therein shall be
known as the "PREFERREDPLUS 7.75% Trust Certificates Series WCM-1.
(b) The Certificates shall be held through the Depository in
book-entry form and shall be substantially in the form attached hereto as
Exhibit B. The Certificates shall be issued in authorized denominations of $25
(the "Authorized Denomination") and integral multiples thereof. Except as
provided in the Standard Terms, the Trust shall not issue additional
Certificates or incur any indebtedness; provided, however, from time to time,
upon obtaining prior written confirmation by each Rating Agency that such action
will not result in a downgrading or withdrawal of its rating of the
Certificates, the Depositor may, without the consent of the Certificateholders,
increase the amount of the Underlying Securities in the Trust and the Trust may
issue a corresponding amount of additional Certificates in accordance with
Section 5.12(a) of the Standard Terms except that clauses (v), (vi) and (vii) of
Section 5.12(a) shall not apply to this Series.
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(c) On each Distribution Date, commencing on August 15, 2001 and
ending on the Final Scheduled Distribution Date or such earlier date if the
Underlying Securities are redeemed prior to the Final Scheduled Distribution
Date, the Certificates will be entitled to receive distributions at a rate of
7.75% per annum on the stated amount of the Certificates.
(d) On the Final Scheduled Distribution Date, the Certificates
will be entitled to a distribution of the aggregate principle amount of such
Underlying Securities.
(e) Any reference to the principal amount of the Certificates
shall be construed as a reference to the stated amount of the Certificates,
unless otherwise indicated.
Section 4. Satisfaction of Conditions to Initial Execution and
Delivery of Trust Certificates. The Trustee hereby acknowledges receipt, on or
prior to the Closing Date, of:
(i) the Underlying Securities set forth on Schedule I hereto; and
(ii) all documents set forth in Section 5.12 of the Standard Terms
except that clauses (v), (vi) and (vii) of Section 5.12(a) shall not
apply to this Series.
Section 5. Distributions. (a) On each Distribution Date, the
Trustee shall apply solely to the extent of Available Funds in the Certificate
Account as follows:
(i) first, to the Trustee, reimbursement for any approved
Extraordinary Trust Expenses incurred by the Trustee in accordance with
Section 6(b) hereof and approved by not less than 100% of the
Certificateholders;
(ii) second, to the Certificateholders, distributions accrued
during the related Collection Period at the rate of 7.75% per annum on
the stated amount of such Certificates and distributable on such
Certificates on such Distribution Date;
(iii) third, to the Certificateholders, if available, any
additional distribution owed and paid by the Underlying Securities
Issuer as a result of a delay in the receipt by the Trustee of any
payment on the Underlying Securities;
(iv) fourth, to the Certificateholders, on the Final Scheduled
Distribution Date only, a distribution of the aggregate principal
amount of the Underlying Securities;
(v) fifth, to the extent there remain Available Funds in the
Certificate Account, to any creditors of the Trust in satisfaction of
liabilities thereto; and
(vi) sixth, to the extent there remain Available Funds in the
Certificate Account, to Xxxxxxx Xxxxx Capital Services, Inc. and if no
Available Funds remain in the Certificate Account then no distribution
will be made pursuant to this Section 5(a)(vi).
Subject to Section 9(c) hereof, to the extent Available Funds are insufficient
to make any required distributions due to the Certificates on any Distribution
Date, any shortfall will be carried over and will be distributed on the next
Distribution Date on which sufficient funds are available on the Available Funds
to pay such shortfall. Neither Xxxxxxx Xxxxx & Co. nor any of
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its Affiliates will have any claim against the Trust pursuant to Section
5(a)(vi) if the Trust fails to make a distribution on a Distribution Date to
such person because no Available Funds remain in the Certificate Account on such
Distribution Date.
(b) On the Optional Exchange Date, if applicable, the Trustee
shall distribute to Xxxxxxx Xxxxx & Co. or any of its Affiliates, other than the
Depositor, or any other Person exercising an optional exchange pursuant to
Section 7 hereof, as the case may be, Underlying Securities in accordance with
Section 7 hereof.
Section 6. Trustee's Fees; Escrow Agent's Fees. (a) Payment to the
Trustee of Ordinary Expenses shall be as set forth in a separate agreement
between the Trustee and the Depositor. The Trustee agrees that in the event
Ordinary Expenses are not paid in accordance with such agreement, it shall (i)
not have any claim or recourse against the Trust or the property of the Trust
with respect thereto and (ii) continue to perform all of its services as set
forth herein unless it elects to resign as Trustee in accordance with Section
7.08 of the Standard Terms.
(b) Extraordinary Trust Expenses shall not be paid out of the
Deposited Assets unless (i) the Trustee is satisfied that it will have adequate
security or indemnity in respect of such costs, expenses and liabilities, and
(ii) all the Certificateholders of Certificates then outstanding have voted to
require the Trustee to incur such Extraordinary Trust Expenses. If Extraordinary
Trust Expenses are not approved unanimously as set forth in clause (ii), such
Extraordinary Trust Expenses shall not be an obligation of the Trust, and the
Trustee shall not file any claim against the Trust therefor notwithstanding
failure of Certificateholders to reimburse the Trustee. In addition, if the
conditions in (i) and (ii) are not both satisfied, the Trustee shall not be
obligated to incur any Extraordinary Trust Expense.
(c) In the event that one or more Call Holders is required to
deposit the Call Price with the Escrow Agent on the Exercise Date pursuant to
Section 14(c)(iii)(2) hereof, the Depositor and the Escrow Agent shall enter
into an agreement reasonably acceptable to both parties thereto whereby the
Depositor shall pay to the Escrow Agent a fee in consideration for its services
under the Escrow Agreement or Escrow Agreements, as applicable.
Section 7. Optional Exchange. (a) Xxxxxxx Xxxxx & Co. or any of
its Affiliates (other than the Depositor), if it holds Certificates, or any
other Person (other than the Depositor) holding Certificates with an aggregate
stated amount of $5 million or more acquired pursuant to the exercise of Call
Rights held by it, may notify the Trustee, not less than 30 days but not more
than 60 days prior to any Optional Exchange Date, that:
(i) such Person intends to tender an Authorized Denomination of
Certificates that it holds to the Trustee on such Optional Exchange
Date in exchange for a proportional amount of Underlying Securities;
(ii) such exchange will not cause the Trust or Depositor to fail
to satisfy the applicable requirements for exemption under Rule 3a-7
under the Investment Company Act of 1940, as amended;
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(iii) such exchange will not affect the characterization of the
Trust as a "grantor trust" under the Code,
(iv) in the case of an exchange of less than all outstanding
Certificates, such exchange will not cause a failure to satisfy the
minimum requirements for the Certificates to remain listed on the New
York Stock Exchange, unless the Person tendering such Certificates will
hold all remaining outstanding Certificates upon completion of the
exchange for such Certificates pursuant to this Section 7;
(v) such exchange will not be made with respect to Certificates
subject to outstanding Call Rights held by any Person other than the
Person exercising such exchange; and
(vi) in the case of an exchange by a person other xxxx Xxxxxxx
Xxxxx & Co. or any of its Affiliates (other than the Depositor), such
exchange will be made with respect to an aggregate stated amount of
Certificates equal to the aggregate stated amount of Certificates
acquired by such Person pursuant to the exercise of Call Rights held by
it.
Upon tender of such Certificates on such Optional Exchange Date, the Trustee
will deliver to the Person tendering such Certificates an amount of Underlying
Securities having a principal amount equal to the aggregate principal amount of
Underlying Securities then held by the Trust times the aggregate stated amount
of Certificates being tendered divided by the aggregate stated amount of
Certificates then outstanding.
(b) The requirements set forth in paragraphs (a)(ii), (a)(v) and
(a)(vi) of Section 4.07 of the Standard Terms do not apply to an Optional
Exchange pursuant to this Section 7.
(c) Any costs associated with the exercise of the rights granted
under paragraph (a) of this Section 7 will be borne by the Person exercising
such rights and not by the Trust.
Section 8. Events of Default. Within 30 days of its receipt of
notice of the occurrence of an Event of Default, the Trustee will give notice to
the Certificateholders, transmitted by mail, of all such uncured or unwaived
Events of Default actually known to it. However, unless there is an Event of
Default relating to the payment of principal of or interest on any of the
Underlying Securities, the Trustee will be protected in withholding such notice
if in good faith it determines that the withholding of such notice is in the
interest of the Certificateholders.
Section 9. Miscellaneous. (a) The provisions of Section 4.04,
Advances, of the Standard Terms shall not apply to the Certificates.
(b) The Certificateholders shall not be entitled to terminate the
Trust or cause the sale or other disposition of the Underlying Securities;
provided, however, that Certificateholders holding all, but not less than all,
of the outstanding Certificates may exercise their rights under Section 13(b)
with respect to all such Certificates.
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(c) If the Trustee has not received payment with respect to a
Collection Period on the Underlying Securities on or prior to the related
Distribution Date, such distribution will be made promptly upon receipt of such
payment. No additional amounts shall accrue on the Certificates or be owed to
Certificateholders as a result of such delay; provided, however, that any
additional interest owed and paid by the Underlying Securities Issuer as a
result of such delay shall be paid to the Certificateholders, proportionately to
the ratio of their respective entitlements to interest payments.
(d) The outstanding principal balance of the Certificates shall
not be reduced by the amount of any Realized Loss.
(e) The Trust may not engage in any business or activities other
than in connection with, or relating to, the holding, protecting and preserving
of the Deposited Assets and the issuance of the Certificates, and other than
those required or authorized by the Trust Agreement or incidental and necessary
to accomplish such activities. The Trust may not issue or sell any certificates
or other obligations other than the Certificates or otherwise incur, assume or
guarantee any indebtedness for money borrowed.
(f) The Trust may not consolidate, amalgamate, merge with or into,
or be replaced by or convey, transfer or lease its properties and assets
substantially as an entirety to, any another entity or permit any other entity
to consolidate, amalgamate, merge with or into, or replace the Trust.
(g) Except as expressly provided in the Trust Agreement, the Trust
may not sell the Underlying Securities.
(h) If the Trustee resigns or is removed as Trustee in accordance
with Section 7.08 of the Trust Agreement, in addition to providing the Depositor
with written notice, the Trustee shall also provide the Rating Agencies with
written notice.
(i) Xxxxxxx Xxxxx & Co. shall act as the Market Agent and shall
serve in such capacity in accordance with the terms of the Market Agent
Agreement attached hereto as Exhibit C.
(j) Notwithstanding anything in the Trust Agreement to the
contrary, the Trustee may be removed upon 60 days prior written notice delivered
by Certificateholders holding Certificates that represent the Required
Percentage-Removal, and such removal shall take effect upon the appointment of a
successor Trustee and its acceptance of such appointment as provided in the
Trust Agreement.
Section 10. Notices. All directions, demands and notices hereunder
or under the Standard Terms shall be in writing and shall be delivered as set
forth below (unless written notice is otherwise provided to the Trustee).
If to the Depositor, to:
Xxxxxxx Xxxxx Depositor, Inc.
c/x Xxxxxxx Xxxxx & Co.
10
World Financial Center
New York, NY 10281
Attention: Xxxxx X. Xxxxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Trustee, to:
United States Trust Company of New York
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
-PREFERREDPLUS Trust Series WCM-1
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Securities Intermediary, to:
United States Trust Company of New York
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
- PREFERREDPLUS Trust Series WCM-1
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Rating Agencies, to:
Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: CBO/CLO Monitoring Department
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and to:
Standard & Poor's
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Finance Surveillance Group
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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Section 11. Governing Law. This Supplement and the transactions
described herein shall be construed in accordance with and governed by the law
of the State of New York.
Section 12. Counterparts. This Supplement may be executed in any
number of counterparts, each of which shall be deemed to be an original, and all
such counterparts shall constitute but one and the same instrument.
Section 13. Termination of the Trust. (a) The Trust shall
terminate upon the earlier of (i) the payment in full at maturity or sale by the
Trust after a payment default on the Underlying Securities and the distribution
in full of all amounts due to the Certificateholders, (ii) the distribution to
the Certificateholders of all Underlying Securities in accordance with the
Distribution Election, (iii) the exchange of all outstanding Certificates for
Underlying Securities pursuant to one or more Optional Exchanges, (iv) the Final
Scheduled Distribution Date and (v) the holders of all, but not less than all,
of the Certificates exercising their election in Section 13(b) below.
(b) Certificateholders who hold all, but not less than all, of the
outstanding Certificates may, upon prior written notice to the Rating Agencies,
elect to terminate the Trust at any time; provided that (i) the exercise of such
termination right would not cause the Trust or the Depositor to fail to satisfy
the applicable requirements for exemption under Rule 3a-7 under the Investment
Company Act of 1940, as amended and (ii) if and for so long as the call warrants
remain outstanding, all of the Call Holders have consented to such termination.
(c) To the extent that the provisions of this Section 13 conflict
with Section 10.01 of the Standard Terms, the latter shall control.
Section 14. Sale of Underlying Securities; Call Right
(a) In the case of Extraordinary Trust Expenses approved by 100%
of the Certificateholders of a given Class, pursuant to Section 6(b) hereof, the
Trustee may sell all or a portion of the Underlying Securities to pay such
Extraordinary Trust Expenses.
(b) (i) Upon the redemption of the Underlying Securities in whole,
but not in part, (A) on the stated maturity date of such Underlying Securities
or (B) at the option of the Underlying Securities Issuer upon at least 30 days,
but not more than 60 days, prior notice, the redemption proceeds will be
distributed pro rata to the holders of the Underlying Securities, including the
Trust. Upon receiving such redemption proceeds, the Trust shall distribute the
proceeds pro rata to the Certificateholders entitled to such proceeds upon the
date such proceeds are received in immediately available funds by the Trust if
such proceeds are received prior to 3:00 p.m. local time at the office of the
Trustee and otherwise on the next Business Day. (ii) Upon the redemption of the
Underlying Securities in part at the option of the Underlying Securities Issuer
upon at least 30 days, but not more than 60 days, prior notice, the redemption
proceeds will be distributed pro rata to the holders of the Underlying
Securities, including the Trust. Upon any such redemption in part, the Trustee
shall select by lot (or by such other reasonable procedure as may be established
by the Trustee) a stated amount of Certificates equal to the aggregate stated
amount of Certificates then outstanding multiplied by the aggregate principal
amount of Underlying Securities subject to redemption and then held by the Trust
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divided by the aggregate principal amount of Underlying Securities then held by
the Trust (the "Redemption Amount"); provided that the Redemption Amount may be
reduced by the aggregate stated amount of Trust Certificates called pursuant to
the exercise of Call Rights prior to such redemption in accordance with the
terms of the Warrant Agreement. Upon receiving the redemption proceeds
distributed to the Trust, the Trustee shall distribute the proceeds pro rata to
the Certificateholders entitled to such proceeds upon the date such proceeds are
received in immediately available funds by the Trust if such proceeds are
received prior to 3:00 p.m. local time at the office of the Trustee and
otherwise on the next Business Day.
(c) The Call Terms are as follows:
(i) The initial holder of the Call Rights is an affiliate of
Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated
and such affiliate may transfer the Call Rights, in whole or in part,
to one or more third parties in privately negotiated transactions;
(ii) A Call Holder that has met the exercise requirements set
forth in paragraph (c)(iii) of this Section 14 may, on the Call Date,
exercise its option to purchase, in whole or in part, an Authorized
Denomination of Certificates at the Call Price;
(iii) In order to exercise its Call Right on a Call Date, a Call
Holder must, not less than 30 days (or not less than five days in the
case of an announcement of any redemption or other unscheduled payment
of the underlying securities or receipt of notice of termination of the
Trust) but not more than 60 days prior to such Call Date:
(1) notify the Trustee in writing of its intention to
exercise such Call Right (which notice is irrevocable),
(2) deposit the Call Price with the Escrow Agent (the "Escrow
Deposit") to be held in escrow pursuant to an Escrow Agreement
reasonably satisfactory to the Trustee and substantially in the
form attached hereto as Exhibit D (to be entered into immediately
preceding delivery of the Call Price by such Call Holder to the
Escrow Agent) until such Call Price is paid by the Trustee to the
Certificateholders in accordance with paragraph (d) of this
Section 14,
(3) provide the Trustee with any other documents customary
for a transaction of this nature, including a certificate of the
Call Holder certifying the solvency of such Call Holder on such
date; provided that the Call Holder need not provide any such
solvency certificate if the rating of the senior, unsecured
long-term debt of the Call Holder, or the Call Holder's credit
support provider, if applicable, by Moody's and S&P is in one of
the investment grade categories of Xxxxx'x and S&P, respectively,
on such date.
(d) In connection with any exercise of the Call Rights, the
Trustee shall select by lot (or by such other reasonable procedure as may be
established by the Trustee) a stated amount of the outstanding Certificates to
be surrendered by the Certificateholders thereof to the Trustee upon any such
exercise, deliver such Certificates to the exercising Call Holder and the
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proceeds of the Call Price shall be distributed pro rata among such
Certificateholders on the Call Date in accordance with the provisions of the
Warrant Agreement.
Section 15. Amendments. Notwithstanding anything in the Trust
Agreement to the contrary, in addition to the other restrictions on modification
and amendment contained herein, the Trustee shall not enter into any amendment
or modification of the Trust Agreement that would adversely affect in any
material respect the interests of the Certificateholders or the Call Holders
without the consent of 100% of such Certificateholders or Call Holders, as the
case may be; provided, however, that no such amendment or modification will be
permitted if the Trustee has been advised by the Depositor that such amendment
or modification would alter the status of the Trust as a "grantor trust" for
federal income tax purposes. Further, no amendment shall be permitted pursuant
to paragraphs (vi), (vii) and (x) of Section 11.0 1 (a) of the Standard Terms
without prior written confirmation by each Rating Agency that such amendment
will not result in a downgrading or withdrawal of its rating of the
Certificates. The Trustee may consult with counsel and shall be entitled to rely
upon an Opinion of Counsel for purposes of determining compliance with the
provisions of this Section 15.
Section 16. Voting of Underlying Securities, Modification of
Indenture. The Trustee, as holder of the Underlying Securities, has the right to
vote and give consents and waivers in respect of the Underlying Securities as
permitted by the Depository and except as otherwise limited by the Trust
Agreement. In the event that the Trustee receives a request from the Depository,
the Underlying Securities trustee or the Underlying Securities Issuer for its
consent to any amendment, modification or waiver of the Underlying Securities,
the Underlying Securities Indenture or any other document thereunder or relating
thereto, or receives any other solicitation for any action with respect to the
Underlying Securities, the Trustee shall mail a notice of such proposed
amendment, modification, waiver or solicitation to each Certificateholder of
record as of such date. The Trustee shall request instructions from the
Certificateholders as to whether or not to consent to or vote to accept such
amendment, modification, waiver or solicitation. The Trustee shall consent or
vote, or refrain from consenting or voting, in the same proportion (based on the
relative outstanding principal balances of the Certificates) as the Certificates
of the Trust were actually voted or not voted by the Certificateholders thereof
as of a date determined by the Trustee prior to the date on which such consent
or vote is required; provided, however, that, notwithstanding anything in the
Trust Agreement to the contrary, the Trustee shall at no time vote on or consent
to any matter (i) unless such vote or consent would not (based on an Opinion of
Counsel) alter the status of the Trust as a "grantor trust" for federal income
tax purposes or result in the imposition of tax upon the Certificateholders, or
(ii) that would alter the timing or amount of any payment on the Underlying
Securities, including, without limitation, any demand to accelerate the
Underlying Securities, except in the event of a default under the Underlying
Securities or an event that with the passage of time would become an event of
default under the Underlying Securities and with the consent of 100% of the
Certificateholders, 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 in the event of a
default under the Underlying Securities Indenture and only with the consent of
100% of the Certificateholders and 100% of the Call Holders. The Trustee shall
have no liability for any failure to act resulting from Certificateholders' or
Call Holders' late return of, or failure to return, directions requested by the
Trustee from the Certificateholders and Call Holders.
14
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
outstanding Underlying Securities or any other offer is made for the Underlying
Securities, the Trustee shall notify the Certificateholders, the Call Holders
and the Rating Agencies of such offer promptly. The Trustee must reject any such
offer unless the Trustee is directed by the affirmative vote of 100% of the
Certificateholders and 100% of the Call Holders to accept such offer, the
Trustee has received the tax opinion described above and if the Trustee is so
directed, the Trustee shall promptly notify the Rating Agencies of such
direction accompanied by evidence of the affirmative vote of such
Certificateholders and Call Holders.
If an event of default under the Underlying Securities Indenture
occurs and is continuing, and if directed by 100% of the Certificateholders, the
Trustee shall vote the Underlying Securities in favor of directing, or take such
other action as may be appropriate to direct, the Underlying Securities trustee
to declare the unpaid principal amount of the Underlying Securities and any
accrued and unpaid interest thereon to be due and payable.
Section 17. Call Right Documentation. Simultaneously with the
execution hereof, the Depositor hereby directs the Trustee, in the name of and
on behalf of the Trust, to enter into a Warrant Agreement and any related
Warrant Certificates (as defined in the Warrant Agreement) evidencing the Call
Rights and to make representations contained therein on behalf of the Trust. At
the direction of the Depositor, the Trustee shall execute such further documents
as may be required to evidence any transfer of any or all of the rights,
interests or obligations under the Warrant Agreement and any related Warrant
Certificates.
Section 18. Third Party Beneficiary. The Escrow Agent and each
Call Holder shall be third party beneficiaries of this Trust Agreement.
Section 19. Nonpetition Covenant. Solely with respect to the Trust
and the Series and for no other purpose, Section 11.07 of the Standard terms is
hereby deleted and replaced with the following:
Section 11.07. Nonpetition Covenant. Notwithstanding any
prior termination of this Trust Agreement, each of the Trustee
(including any Administrative Agent, Authenticating Agent and Paying
Agent) and the Depositor agrees that it shall not, until the date which
is one year and one day after the termination of the PREFERREDPLUS
Trust Series WCM-1, acquiesce, petition or otherwise invoke or cause
the Trust to invoke the process of the United States, any State or
other political subdivision thereof or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government for the purpose of commencing or sustaining a
case by or against the Trust under a Federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of
such Trust or all or any part of the property or assets of such Trust
or ordering the winding up or liquidation of the affairs of such Trust.
15
IN WITNESS WHEREOF, the parties hereto have caused this Supplement
to be duly executed by their respective authorized officers as of the date first
written above.
Xxxxxxx Xxxxx Depositor, Inc.,
as Depositor
By:
-------------------------------------------
Name: Xxxxx X. Xxxxxxxxxxx
Title: President
United States Trust Company of New York,
as Trustee
By:
-------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
United States Trust Company of New York,
as Securities Intermediary
By:
-------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
16
SCHEDULE I
PREFERREDPLUS 7.75% TRUST CERTIFICATES, SERIES WCM-1
UNDERLYING SECURITIES SCHEDULE
Underlying Securities: $90,000,000 6.95% Debentures (principal amount
$1,000 per debenture) due August 15, 2028 of
the Underlying Securities Issuer.
Underlying Securities Indenture: The indenture dated as of March 1, 1997, as
supplemented, executed by AT&T Corp., Inc. and
the Underlying Securities Trustee.
Underlying Securities Issuer: WorldCom, Inc., a Georgia corporation.
Underlying Securities Trustee: The Chase Manhattan Bank, as successor to
Mellon Bank N.A.
Underlying Securities
CUSIP Number: 00000XXX0
Underlying Securities
Original Issue Date: August 11, 1998
Underlying Securities
Original Amount Issued: $1,750,000,000 6.95% Debentures due August 15,
2028 (principal amount $1,000 per debenture)
Underlying Securities
Listing: NYSE
Underlying Securities
Commission Filing Number: 333-45067
Underlying Securities
Maturity Date: August 15, 2028
Underlying Securities
Principal Payment Date: August 15, 2028
Interest Rate: 6.95% per annum.
Underlying Securities
Interest Dates: August 15 and February 15.
Underlying Securities
Record Dates: February 1 and August 1.
Underlying Securities
Collateral: None.
Underlying Securities
Amortization: None.
Underlying Securities Semi-annual.
Accrual Periods:
Underlying Securities The Underlying Securities are denominated and
Authorized Denomination payable in U.S. dollars and are available in
and Specified Currency: minimum denominations of $1,000 and integral
multiples thereof.
Underlying Securities "A3" by Moody's and "BBB+" by S&P.
Rating as of Closing:
Underlying Securities Form: Book-entry security with DTC.
Underlying Securities In certain circumstances summarized in the
Redemption: Prospectus Supplement, the Underlying
Securities are redeemable at the option of the
Underlying Securities Issuer, in whole or in
part, at any time or from time to time, on at
least 30 days, but not more than 60 days,
prior notice. The redemption price will be
equal to the greater of (i) 100% of the
principal amount of the Underlying Securities
to be redeemed or (ii) the sum of the present
values of the remaining scheduled payments
discounted, on a semiannual basis (assuming a
360-day year of twelve 30-day months), at a
rate equal to the sum of the treasury rate
plus 20 basis points. Accrued and unpaid
interest will be payable to the redemption
date.
EXHIBIT A
Standard Terms for Trust Agreements
(begins on next page)
EXHIBIT B
Form of Certificate
(begins on next page)
EXHIBIT C
Market Agent Agreement
(begins on next page)
EXHIBIT D
Form of Escrow Agreement
(begins on next page)
