EXHIBIT 4.1
SERIES SUPPLEMENT
CORPORATE BACKED TRUST CERTIFICATES
MOTOROLA DEBENTURE-BACKED SERIES 2002-14 TRUST
between
XXXXXX ABS CORPORATION,
as Depositor
and
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
CORPORATE BACKED TRUST CERTIFICATES
Dated as of July 19, 2002
Table of Contents
Page
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Section 1. Incorporation of Standard Terms...................................................................1
Section 2. Definitions.......................................................................................1
Section 3. Designation of Trust and Certificates.............................................................7
Section 4. Trust Certificates...............................................................................10
Section 5. Distributions....................................................................................10
Section 6. Trustee's Fees...................................................................................14
Section 7. Optional Exchange; Optional Call.................................................................14
Section 8. Notices of Events of Default.....................................................................17
Section 9. Miscellaneous....................................................................................17
Section 10. Governing Law....................................................................................21
Section 11. Counterparts.....................................................................................21
Section 12. Termination of the Trust.........................................................................21
Section 13. Sale of Underlying Securities; Optional Exchange.................................................21
Section 14. Amendments.......................................................................................22
Section 15. Voting of Underlying Securities, Modification of Indenture.......................................22
Section 16. Additional Depositor Representation..............................................................23
SCHEDULE I MOTOROLA DEBENTURE-BACKED SERIES 2002-14
UNDERLYING SECURITIES SCHEDULE
EXHIBIT A-1 FORM OF TRUST CERTIFICATE CLASS A-1
EXHIBIT A-2 FORM OF TRUST CERTIFICATE CLASS A-2
EXHIBIT B FORM OF WARRANT AGENT AGREEMENT
EXHIBIT C FORM OF INVESTMENT LETTER
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SERIES SUPPLEMENT
CORPORATE BACKED TRUST CERTIFICATES
MOTOROLA DEBENTURE-BACKED SERIES 2002-14 TRUST
SERIES SUPPLEMENT, Motorola Debenture-Backed Series 2002-14 Trust, dated
as of July 19, 2002 (the "Series Supplement"), by and between XXXXXX ABS
CORPORATION, as Depositor (the "Depositor"), and U.S. BANK TRUST NATIONAL
ASSOCIATION, as Trustee (the "Trustee").
W I T N E S S E T H:
WHEREAS, the Depositor desires to create the Trust
designated herein (the "Trust") by executing and delivering this Series
Supplement, which shall incorporate the terms of the Standard Terms for Trust
Agreements, dated as of January 16, 2001 (the "Standard Terms" and, together
with this Series Supplement, the "Trust Agreement"), by and between the
Depositor and the Trustee, as modified by this Series Supplement;
WHEREAS, the Depositor desires to deposit into the Trust the
Underlying Securities set forth on Schedule I attached hereto (the "Underlying
Securities Schedule") the general terms of which are described in the
Prospectus Supplement under the heading "Description of the Deposited Assets -
Underlying Securities;"
WHEREAS, in connection with the creation of the Trust and the
deposit therein of the Underlying Securities, it is desired to provide for the
issuance of trust certificates evidencing undivided interests in the Trust and
call warrants related thereto; and
WHEREAS, the Trustee has joined in the execution of the
Standard Terms and this Series Supplement to evidence the acceptance by the
Trustee of the Trust.
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual covenants expressed herein, it is hereby agreed by and between the
Depositor and the Trustee as follows:
Section 1. Incorporation of Standard Terms. Except as otherwise provided
herein, all of the provisions of the Standard Terms are hereby incorporated
herein by reference in their entirety, and this Series Supplement and the
Standard Terms shall form a single agreement between the parties. In the event
of any inconsistency between the provisions of this Series Supplement and the
provisions of the Standard Terms, the provisions of this Series Supplement
will control with respect to the Motorola Debenture-Backed Series 2002-14
Certificates and the transactions described herein.
Section 2. Definitions.
(a) Except as otherwise specified herein or as the context may otherwise
require, the following terms shall have the respective meanings set forth
below for all purposes under this Series Supplement. (Section 2(b) below sets
forth terms listed in the Standard Terms which are
not applicable to this Series.) Capitalized terms used but not defined herein
shall have the meanings assigned to them in the Standard Terms.
"Available Funds" shall have the meaning specified in the
Standard Terms.
"Business Day" shall mean any day other than (i) Saturday and
Sunday or (ii) a day on which banking institutions in New York City, New York
are authorized or obligated by law or executive order to be closed for
business or (iii) a day that is not a business day for the purposes of the
Indenture.
"Calculation Agent" shall mean Xxxxxx ABS Corporation or such
affiliate thereof as shall be designated by Xxxxxx ABS Corporation.
"Call Date" shall mean any Business Day that any Call Warrant
holder designates as a Call Date occurring (i) on or after July 19, 2007, (ii)
after the Underlying Securities Issuer announces that it will redeem
(including as a result of an optional redemption), prepay or otherwise make an
unscheduled payment on the Underlying Securities, (iii) after the Trustee
notifies the Certificateholders of any proposed sale of the Underlying
Securities pursuant to the provisions of this Series Supplement or (iv) on
which a tender offer for some or all of the Underlying Securities is
consummated.
"Call Notice" shall have the meaning specified in Section 1.1
of the Warrant Agent Agreement.
"Call Price" shall mean, for each related Call Date, (i) in the
case of the Class A-1 Certificates, 100% of the outstanding Certificate
Principal Balance of the Class A-1 Certificates being purchased pursuant to
the exercise of the Call Warrants, plus any accrued and unpaid interest on
such amount to but excluding the Call Date and (ii) in the case of the Class
A-2 Certificates being purchased pursuant to the exercise of the Call
Warrants, $0.
"Call Warrants" shall have the meaning specified in Section 3
hereof.
"Called Certificates" shall have the meaning specified in
Section 1.1 (b) of the Warrant Agent Agreement.
"Certificates" shall have the meaning set forth in Section 3
hereof.
"Class A-1 Allocation" shall mean the sum of the present values
(discounted at the rate of 8.375% per annum) of (i) any unpaid interest due or
to become due on the Class A-1 Certificates and (ii) the outstanding
Certificate Principal Balance of the Class A-1 Certificates (in each case
assuming that the Class A-1 Certificates were paid when due and were not
redeemed or prepaid prior to their stated maturity).
"Class A-1 Certificates" shall mean the Certificates, in the
form attached hereto as Exhibit A-1, to be issued by the Trust representing a
proportionate undivided beneficial ownership interest in certain distributions
to be made by the Trust and having the characteristics described herein and in
the Certificates.
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"Class A-2 Allocation" shall mean the present value (discounted
at the rate of 8.375% per annum) of any unpaid principal amounts due or to
become due on the Class A-2 Certificates (assuming that the Class A-2
Certificates were paid when due and were not redeemed or prepaid prior to
their stated maturity).
"Class A-2 Certificates" shall mean the Certificates, in the
form attached hereto as Exhibit A-2, to be issued by the Trust representing a
proportionate undivided beneficial ownership interest in certain distributions
to be made by the Trust and having the characteristics described herein and in
the Certificates.
"Closing Date" shall mean July 19, 2002.
"Code" The Internal Revenue Code of 1986, as amended, and
Treasury Regulations promulgated thereunder.
"Collection Period" shall mean, (i) with respect to each
November Distribution Date, the period beginning on the day after the May
Distribution Date of such year and ending on such November Distribution Date,
inclusive and, (ii) with respect to each May Distribution Date, the period
beginning on the day after the November Distribution Date of the prior year
and ending on such May Distribution Date, inclusive; provided, however, that
clauses (i) and (ii) shall be subject to Section 9(f) hereof.
"Corporate Trust Office" shall mean the office of U.S. Bank
Trust National Association located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000.
"Currency" shall mean United States Dollars.
"Depository" shall mean The Depository Trust Company, its
nominees and their respective successors.
"Distribution Date" shall mean May 15th and November 15th of
each year (or if such date is not a Business Day, the next succeeding Business
Day), commencing on November 15th, 2002, and ending on the earlier of the
Final Scheduled Distribution Date and any date on which all Underlying
Securities are redeemed pursuant to the Indenture or prepaid or liquidated in
whole for any reason other than at their maturity.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"Event of Default" shall mean (i) a default in the payment of
any interest on any Underlying Securities after the same becomes due and
payable (subject to any applicable grace period), (ii) a default in the
payment of the principal of or any installment of principal of any Underlying
Securities when the same becomes due and payable, and (iii) any other event
specified as an "Event of Default" in the Indenture.
"Exchange Act" shall mean the Securities and Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.
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"Final Scheduled Distribution Date" shall mean November 15,
2028, or, if such day is not a Business Day, the next succeeding Business Day.
"Indenture" shall mean the Indenture dated as of May 1, 1995,
between the Underlying Securities Issuer and Underlying Securities Trustee,
pursuant to which the Underlying Securities were issued.
"Interest Accrual Period" shall mean for any Distribution Date,
the period from and including the preceding Distribution Date (or in the case
of the first Interest Accrual Period, from and including the Closing Date) to
but excluding the current Distribution Date.
"Liquidation Price" shall mean the price at which the Trustee
sells the Underlying Securities.
"Maturity Date" shall have the meaning specified in Schedule I
hereto.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Optional Call" shall mean the call of the Certificates by the
Warrant Holder, in whole or in part, resulting from the exercise of Call
Warrants by the Warrant Holder, pursuant to Section 7(e) hereof.
"Optional Exchange" shall mean the exchange of the Certificates
by the Trust for the Underlying Securities pursuant to Section 7(a) and 7(b)
hereof.
"Optional Exchange Date" shall mean any date on which
Underlying Securities subject to Optional Exchange are distributed to a
Certificateholder.
"Ordinary Expenses" shall mean the Trustee's ordinary expenses
and overhead in connection with its services as Trustee, including the items
referred to in the definition of Ordinary Expenses in the Standard Terms.
"Prepaid Ordinary Expenses" shall be zero for this Series.
"Prospectus Supplement" shall mean the Prospectus Supplement,
dated July 10, 2002, relating to the Certificates.
"QIB" shall have the meaning set forth in Section 3(e) hereof.
"Rating Agency" shall mean Moody's and S&P.
"Record Date" shall mean, with respect to each Distribution
Date, the day immediately preceding the related Distribution Date.
"Required Percentage-Amendment" shall be 66-2/3% of the
aggregate Voting Rights, unless the subject amendment requires the vote of
holders of only one class of Certificates pursuant to the Standard Terms, in
which case 66-2/3% of the Certificate Principal Balance of such Class.
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"Required Percentage-Direction of Trustee" shall be 66-2/3% of
the aggregate Voting Rights.
"Required Percentage-Remedies" shall be 66-2/3% of the
aggregate Voting Rights.
"Required Percentage-Removal" shall be 66-2/3% of the aggregate
Voting Rights.
"Required Rating" shall mean, in the case of Moody's, the
rating assigned to the Underlying Securities by Moody's as of the Closing
Date, and, in the case of S&P, the rating assigned to the Underlying
Securities by S&P as of the Closing Date.
"Resale Restriction Termination Date" shall have the meaning
set forth in Section 3(e) hereof.
"Rule 144A" shall have the meaning set forth in Section 3(e)
hereof.
"S&P" shall mean Standard & Poor's Ratings Services, a division
of The XxXxxx-Xxxx Companies, Inc.
"Securities Act" shall mean the United States Securities Act of
1933, as amended.
"Series" shall mean Motorola Debenture-Backed Series 2002-14.
"Special Distribution Date" shall have the meaning specified in
Section 5 hereof.
"Trustee Fee" shall mean the amount paid to the Trustee by the
Depositor on the Closing Date.
"Trust Property" shall mean the Underlying Securities described
on Schedule I hereto, the Certificate Account and any additional Underlying
Securities sold to the Trust pursuant to Section 3(d) hereof.
"Underlying Securities" shall mean $32,875,000 aggregate
principal amount of 6 1/2% Debentures due November 15, 2028, issued by the
Underlying Securities Issuer, as set forth in Schedule I attached hereto
(subject to Section 3(d) hereof).
"Underlying Securities Issuer" shall mean Motorola, Inc.
"Underlying Securities Trustee" shall mean Xxxxxx Trust and
Savings Bank.
"Underwriters" shall mean Xxxxxx Brothers Inc. and Prudential
Securities Incorporated.
"Voting Rights" shall, in the entirety, be allocated among all
Class A-1 Certificateholders and Class A-2 Certificateholders in proportion to
the then outstanding Certificate Principal Balances of their respective
Certificates.
"Warrant Agent" shall mean initially, U.S. Bank Trust National
Association.
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"Warrant Agent Agreement" shall mean that certain Warrant Agent
Agreement, dated as of the date hereof, between the Depositor and U.S. Bank
Trust National Association, as Warrant Agent and as Trustee, as the same may
be amended from time to time.
"Warrant Holder" shall mean the holder of a Call Warrant.
(b) The terms listed below are not applicable to this Series.
"Accounting Date"
"Administrative Fees"
"Advance"
"Allowable Expense Amounts"
"Basic Documents"
"Calculation Agent"
"Call Premium Percentage"
"Credit Support"
"Credit Support Instrument"
"Credit Support Provider"
"Cut-off Date"
"Eligible Expense"
"Eligible Investment"
"Exchange Rate Agent"
"Fixed Pass-Through Rate"
"Floating Pass-Through Rate"
"Guaranteed Investment Contract"
"Letter of Credit"
"Limited Guarantor"
"Limited Guaranty"
"Minimum Wire Denomination"
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"Notional Amount"
"Pass-Through Rate"
"Place of Distribution"
"Purchase Price"
"Required Premium"
"Required Principal"
"Requisite Reserve Amount"
"Retained Interest"
"Sale Procedures"
"Sub-Administration Account"
"Sub-Administration Agreement"
"Sub-Administration Agent"
"Surety Bond"
"Swap Agreement"
"Swap Counterparty"
"Swap Distribution Amount"
"Swap Guarantee"
"Swap Guarantor"
"Swap Receipt Amount"
"Swap Termination Payment"
Section 3. Designation of Trust and Certificates. The Trust created
hereby shall be known as the "Corporate Backed Trust Certificates, Motorola
Debenture-Backed Series 2002-14 Trust." The Certificates evidencing certain
undivided ownership interests therein shall be known as "Corporate Backed
Trust Certificates, Motorola Debenture-Backed Series 2002-14." The
Certificates shall consist of the Class A-1 Certificates and the Class A-2
Certificates (together, the "Certificates"). The Trust is also issuing call
warrants with respect to the Certificates ("Call Warrants").
7
(a) The Certificates shall initially be held through the Depository in
book-entry form and shall be substantially in the forms attached hereto as
Exhibits A-1 and A-2. The Class A-1 Certificates shall be issued in
denominations of $25. The Class A-2 Certificates shall be issued in minimum
denominations of $100,000 and integral multiples of $1 in excess thereof;
provided, however, that on any Call Date on which a Warrant Holder shall
concurrently exchange Called Certificates for a distribution of Underlying
Securities in accordance with the provisions of Section 7 hereof, Called
Certificates may be issued in other denominations. Except as provided in the
Standard Terms and in paragraph (d) in this Section, the Trust shall not issue
additional Certificates or additional Call Warrants or incur any indebtedness.
(b) The Class A-1 Certificates have an initial aggregate certificate
principal balance (the "Certificate Principal Balance") of $25,514,925 and the
Class A-2 Certificates have an initial aggregate Certificate Principal Balance
of $7,360,075.
(c) The holders of the Class A-1 Certificates will be entitled to receive
on each Distribution Date the interest, if any, received on the Underlying
Securities, to the extent necessary to pay interest at a rate of 8.375% per
annum on the outstanding Certificate Principal Balance of the Class A-1
Certificates. The Class A-2 Certificates will not bear interest. On the
Distribution Date occurring in November 2002, the Trustee will cause the Trust
to pay to the Depositor the amount of interest accrued and paid on the
Underlying Securities from May 15, 2002, to but not including the Closing
Date; provided, however, that in the event an Optional Exchange shall occur
prior to the Distribution Date in November 2002, a pro rata portion of such
amount shall be paid to the Depositor on the Optional Exchange Date, in
accordance with the provisions of Section 7(c)(vii) hereof. If Available Funds
are insufficient to pay such amount, the Trustee will pay the Depositor its
pro rata share, based on the ratio the amount owed to the Depositor bears to
all amounts owed on the Certificates in respect of accrued interest, of any
proceeds from the recovery on the Underlying Securities.
(d) The Depositor may sell to the Trustee additional Underlying
Securities on any date hereafter upon at least 3 Business Days' notice to the
Trustee (or such shorter period as shall be mutually satisfactory to the
Depositor and the Trustee) and upon (i) satisfaction of the Rating Agency
Condition and (ii) delivery of an Opinion of Counsel to the effect that the
sale of such additional Underlying Securities will not cause the Trust to be
taxed as an association or publicly traded partnership taxable as a
corporation for federal income tax purposes. Each condition to be satisfied
with respect to a sale of Underlying Securities on or prior to the Closing
Date shall be satisfied with respect to a sale of additional Underlying
Securities no later than the date of sale thereof, each representation and
warranty set forth in the Standard Terms to be made on the Closing Date shall
be made on such date of sale, and from and after such date of sale, all
Underlying Securities held by the Trustee shall be held on the same terms and
conditions. Upon such sale to the Trustee, the Trustee shall deposit such
additional Underlying Securities in the Certificate Account, and shall
authenticate and deliver to the Depositor, on its order, Class A-1
Certificates and Class A-2 Certificates in the same proportion as the original
Class A-1 Certificates and Class A-2 Certificates, with an aggregate
Certificate Principal Balance equal to the principal amount of such additional
Underlying Securities, and the Call Warrants related thereto as described
herein. Any such additional Class A-1 Certificates and Class A-2 Certificates
authenticated and delivered shall have the same terms and rank pari passu with
the
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corresponding classes of Certificates previously issued in accordance with
this Series Supplement.
(e) No Class A-2 Certificate may be offered, resold, assigned or
otherwise transferred (including by pledge or hypothecation) at any time prior
to (x) the date which is two years or such shorter period of time as permitted
by Rule 144(k) under the Securities Act, after the later of the original issue
date of such Class A-2 Certificates and the last date on which the Depositor
or any "affiliate" (as defined in Rule 144 under the Securities Act) of the
Depositor was the owner of such Class A-2 Certificates (or any predecessor
thereto), or (y) such later date, if any, as may be required by a change in
applicable securities laws (the "Resale Restriction Termination Date") unless
such offer, resale, assignment or transfer is (i) to the Trust, (ii) pursuant
to an effective registration statement under the Securities Act, (iii) to a
qualified institutional buyer (a "QIB"), as such term is defined in Rule 144A
promulgated under the Securities Act ("Rule 144A"), in accordance with Rule
144A or (iv) pursuant to another available exemption from registration
provided under the Securities Act, and, in each of cases (i) through (iv), in
accordance with any applicable securities laws of any state of the United
States and other jurisdictions. Prior to any offer, resale, assignment or
transfer of any Class A-2 Certificates in the manner described in clause (iii)
above, the prospective transferee and the prospective transferor shall be
required to deliver to the Trustee an executed copy of an Investment Letter
with respect to the Class A-2 Certificates to be transferred substantially in
the form of Exhibit C hereto. Prior to any offer, resale, assignment or
transfer of any Class A-2 Certificates in the manner described in clause (iv)
above, the prospective transferee and the prospective transferor shall be
required to deliver to the Trustee documentation certifying that the offer,
resale, assignment or transfer complies with the provisions of said clause
(iv). In addition to the foregoing, each prospective transferee of any Class
A-2 Certificates in the manner contemplated by clause (iii) above shall
acknowledge, represent and agree as follows:
(1) The transferee (x) is a QIB, (y) is aware that the sale to it
is being made in reliance on Rule 144A and (z) is acquiring
such Class A-2 Certificates or Call Warrants, as applicable,
for its own account or for the account of a QIB.
(2) The transferee understands that the Class A-2 Certificates or
Call Warrants, as applicable, are being offered in a
transaction not involving any public offering in the United
States within the meaning of the Securities Act, and that the
Class A-2 Certificates or Call Warrants, as applicable, have
not been and will not be registered under the Securities Act.
(3) The transferee agrees that (A) if in the future it decides to
offer, resell, pledge or otherwise transfer the Class A-2
Certificates or Call Warrants, as applicable, prior to the
Resale Restriction Termination Date, such Class A-2
Certificates or Call Warrants, as applicable, shall only be
offered, resold, assigned or otherwise transferred (i) to the
Trust, (ii) pursuant to an effective registration statement
under the Securities Act, (iii) to a QIB, in accordance with
Rule 144A or (iv) pursuant to another available exemption from
registration provided under the Securities Act, and, in each of
cases (i) through (iv), in accordance with any applicable
securities laws of any state of the United States and other
jurisdictions and (B) the transferee will, and each subsequent
holder is required to, notify any
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subsequent purchaser of such Class A-2 Certificates or Call
Warrants, as applicable, from it of the resale restrictions
referred to in clause (A) above.
(f) The Class A-2 Certificates will, unless otherwise agreed by the
Depositor and the Trustee, bear a legend substantially to the following
effect:
"THIS CLASS A-2 CERTIFICATE (OR ITS PREDECESSOR) HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT
WHILE A REGISTRATION UNDER SUCH ACT IS IN EFFECT OR PURSUANT TO
AN EXEMPTION THEREFROM UNDER SUCH ACT. THE CLASS A-2
CERTIFICATE REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF THE SERIES SUPPLEMENT.
EACH PURCHASER OF THIS CLASS A-2 CERTIFICATE IS HEREBY NOTIFIED
THAT THE SELLER OF THIS CLASS A-2 CERTIFICATE MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER."
Section 4. Trust Certificates. The Trustee hereby acknowledges receipt,
on or prior to the Closing Date, of:
(a) the Underlying Securities set forth on Schedule I hereto; and
(b) all documents required to be delivered to the Trustee pursuant to
Section 2.01 of the Standard Terms.
Section 5. Distributions.
(a) Except as otherwise provided in Section 3(c), 5(b), 5(c) and 5(h) on
each applicable Distribution Date (or such later date as specified in Section
9(f)), the Trustee shall apply Available Funds in the Certificate Account as
follows:
(i) The Trustee will pay the interest portion of Available
Funds (subject to Section 5(c) below):
(1) first, to the Trustee, as reimbursement for any
Extraordinary Trust Expenses incurred by the Trustee in
accordance with Section 6(b) below and approved by 100% of the
Certificateholders; and
(2) second, to the holders of the Class A-1 Certificates,
as interest at the rate of 8.375% per annum on the outstanding
Certificate Principal Balance of the Class A-1 Certificates.
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(ii) the Trustee will pay the principal portion of Available
Funds:
(1) first, to the Trustee, as reimbursement for any
remaining Extraordinary Trust Expenses incurred by the Trustee
in accordance with Section 6(b) below and approved by 100% of
the Certificateholders; and
(2) second, to the holders of the Class A-1 Certificates
and the Class A-2 Certificates, the remaining available
principal portion of Available Funds (in an aggregate amount
not to exceed the outstanding Certificate Principal Balance of
the Class A-1 Certificates and Class A-2 Certificates) pro rata
in the proportion that the outstanding Certificate Principal
Balance of the Class A-1 Certificates bears to the outstanding
Certificate Principal Balance of the Class A-2 Certificates.
(iii) any Available Funds remaining in the Certificate Account
after the payments set forth in clauses 5(a)(i) and 5(a)(ii) above
shall be paid to the Trustee as reasonable compensation for services
rendered to the Depositor, up to $1,000.
(iv) the Trustee will pay any Available Funds remaining in the
Certificate Account after the distributions in clauses 5(a)(i)
through 5(a)(iii) above to the holders of the Class A-1 Certificates
and Class A-2 Certificates pro rata in proportion to their original
Certificate Principal Balances.
Any portion of the Available Funds (i) that does not constitute principal of,
or interest on, the Underlying Securities, (ii) that is not received in
connection with a redemption, prepayment or liquidation of the Underlying
Securities and (iii) for which allocation by the Trustee is not otherwise
contemplated by this Series Supplement, shall be remitted by the Trustee to
the Depositor.
(b) Notwithstanding any other provision hereof (other than Section 3(c))
if the Underlying Securities are prepaid or liquidated in whole or in part for
any reason other than if the Underlying Securities Issuer discontinues filing
the periodic reports required under the Exchange Act or at their maturity, the
Trustee shall apply Available Funds in the manner described in Section 5(f) in
the following order of priority:
(i) first, to the Trustee, as reimbursement for any Extraordinary
Trust Expenses incurred by the Trustee in accordance with Section 6(b)
below and approved by 100% of the Certificateholders;
(ii) second, to the holders of the Class A-1 Certificates, an amount
equal to any accrued and unpaid interest thereon;
(iii) third, to the holders of the Class A-1 Certificates and Class
A-2 Certificates, pro rata in the proportion that the outstanding
Certificate Principal Balance of the Class A-1 Certificates bears to the
outstanding Certificate Principal Balance of the Class A-2 Certificates;
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(iv) fourth, to the Trustee, as reasonable compensation for services
rendered to the Depositor, any remainder up to $1,000; and
(v) fifth, to the holders of the Class A-1 Certificates and Class
A-2 Certificates, any amount remaining after the distributions in clauses
5(b)(i) through 5(b)(iv) above, pro rata in proportion to their original
Certificate Principal Balances.
(c) Unless otherwise instructed by holders of Certificates representing a
majority of the Voting Rights, thirty (30) days after giving notice pursuant
to Section 8 hereof, the Trustee shall sell the Underlying Securities pursuant
to Section 13 hereof and deposit the Liquidation Proceeds, if any, into the
Certificate Account for distribution not later than two (2) Business Days
after the receipt of immediately available funds in accordance with Section
5(b) hereof; provided, however, that if any Warrant Holder designates any day
on or prior to the proposed sale date as a Call Date and Optional Exchange
Date pursuant to Section 7, the portion of Underlying Securities related to
such Optional Exchange shall not be sold but shall be distributed to the
Warrant Holder pursuant to Section 7 and the Warrant Agent Agreement.
(d) If the Trustee receives non-cash property in respect of the
Underlying Securities as a result of a payment default on the Underlying
Securities (including from the sale thereof), the Trustee will promptly give
notice to the Depository, or for any Certificates which are not then held by
DTC or any other depository, directly to the registered holders of the
Certificates then outstanding and unpaid to the Warrant Agent. Such notice
shall state that the Trustee shall and the Trustee shall, not later than 30
days after the receipt of such property, allocate and distribute such property
to the holders of Class A-1 Certificates and Class A-2 Certificates then
outstanding and unpaid, pro rata by outstanding Certificate Principal Balance
(after deducting the costs incurred in connection therewith) in accordance
with Section 5(b) hereof. Property other than cash will be liquidated by the
Trustee, and the proceeds thereof distributed in cash, only to the extent
necessary to avoid distribution of fractional securities to
Certificateholders. In-kind distribution of such property to
Certificateholders, based on the market value of such property as of the date
of distribution to Certificateholders, will be deemed to reduce the
Certificate Principal Balance of Certificates on a dollar-for-dollar basis.
(e) Subject to Section 9(f) hereof, to the extent Available Funds are
insufficient to make scheduled interest or principal payments on any class of
Certificates on any Distribution Date, any shortfall will be carried over and
will be distributed on the next Distribution Date (or date referred to in
Section 5(f) hereof) on which sufficient funds are available to pay such
shortfall.
(f) If a payment with respect to the Underlying Securities is made to the
Trustee (i) after the payment date of the Underlying Securities on which such
payment was due or (ii) after the Underlying Securities are prepaid or
liquidated in whole or in part for any reason other than at their maturity,
then the Trustee will distribute any such amounts received on the next
occurring Business Day (a "Special Distribution Date") as if the funds had
constituted Available Funds on the Distribution Date immediately preceding
such Special Distribution Date; provided, however, that the Record Date for
such Special Distribution Date shall be the Business Day prior to the day on
which the related payment was received from the Underlying Securities Trustee.
12
(g) Notwithstanding Section 3.12 of the Standard Terms, if the Underlying
Securities Issuer discontinues filing periodic reports required under the
Exchange Act, the Depositor shall within a reasonable time instruct the
Trustee to (i) notify the Warrant Agent that the Underlying Securities are
proposed to be sold and that any Call Warrants and related Optional Exchange
rights must be exercised no later than the date specified in the notice (which
shall be not less than ten Business Days after the date of such notice) and
(ii) to the extent that the Warrant Holders fail to exercise their Call
Warrants and related Optional Exchange rights on or prior to such date, to
sell the Underlying Securities and distribute the proceeds of such sale to the
Certificateholders in accordance with the following order of priority: first,
to the Trustee, as reimbursement for any Extraordinary Trust Expenses incurred
by the Trustee pursuant to the instruction of all of the Certificateholders;
and second, any remainder to the holders of the Class A-1 Certificates and the
Class A-2 Certificates pro rata in proportion to the ratio of the Class A-1
Allocation to the Class A-2 Allocation, as determined by the Calculation
Agent; provided, however, the Depositor shall not instruct the Trustee to sell
the Underlying Securities (or provide a notice of such instruction to the
Warrant Agent) pursuant to this clause unless the Underlying Securities Issuer
has either (x) stated in writing that it intends permanently to cease filing
reports required under the Exchange Act or (y) failed to file any required
reports for one full calendar year.
(h) (i) If the Trustee receives notice of a tender offer for
some or all of the Underlying Securities, the Trustee shall, within
one Business Day, notify the Warrant Agent and forward to the
Warrant Agent copies of all materials received by the Trustee in
connection therewith. If the Trustee receives a Call Notice from any
Warrant Holder no later than five Business Days prior to the
expiration of the tender offer acceptance period that such Warrant
Holder desires to exercise all or a portion of its Call Warrants in
connection with the consummation of any such tender offer, then the
Trustee shall tender, in compliance with the tender offer
requirements, an amount of Underlying Securities equal to the amount
of Underlying Securities that would be distributable to the Warrant
Holder with respect to an Optional Exchange of the Called
Certificates called by such Warrant Holder; provided that any
Optional Call or Optional Exchange undertaken in connection with any
such tender offer shall be subject to the provisions of Section 7
hereof.
(ii) The Call Date and Optional Exchange Date for any exercise
of Call Warrants in connection with a tender offer shall be deemed
to be the Business Day on which such Underlying Securities are
accepted for payment and paid for.
(iii) The Call Price shall be deducted from the tender offer
proceeds and paid to the holders of the Class A-1 Certificates and
Class A-2 Certificates pro rata in accordance with the provisions of
Section 7(d)(v), and the excess of the tender offer proceeds over
the Call Price shall be paid to the exercising Warrant Holders pro
rata in respect to their proportionate exercises of Call Warrants
or, if the Call Price exceeds the tender offer proceeds the amount
of such excess shall be paid by the exercising Warrant Holders pro
rata in respect to their proportionate exercises of Call Warrants.
(iv) If fewer than all tendered Underlying Securities are
accepted for payment and paid for, (A) the amount of Call Warrants
exercised shall be reduced to an amount that corresponds to a number
of Class A-1 and Class A-2 Certificates that could
13
be exchanged in an Optional Exchange for the Underlying Securities
accepted for payment and paid for (without regard to any
restrictions on the amount to be exchanged, so long as such
restrictions would have been satisfied had all tendered Underlying
Securities been accepted for payment and paid for); (B) each Warrant
Holder's exercise shall be reduced by its share (proportionate to
the amount specified in its exercise notice) of the amount of
Underlying Securities not accepted for payment and paid for; (C) the
Call Price shall be determined after giving effect to the reduction
specified in clause (B); (D) the Call Warrants that relate to the
reduction specified in clause (B) shall remain outstanding; and (E)
the excess of the tender offer proceeds over the Call Price shall be
allocated in proportion to the amount of Call Warrants deemed
exercised as set forth in clause (A) above or, if the Call Price
exceeds the tender offer proceeds the amount of such excess shall be
paid by the exercising Warrant Holders pro rata in respect to their
proportionate exercises of Call Warrants.
(v) If the tender offer is terminated by the Underlying
Securities Issuer or any other tender offeror without consummation
thereof or if all tenders by the Trust of Underlying Securities are
otherwise rejected, then (1) the Call Notices will be of no further
force and effect, and (2) any Call Warrants relating to such Call
Notices will not be exercised and will remain outstanding.
Section 6. Trustee's Fees.
(a) As compensation for its services hereunder, the Trustee shall be
entitled to the Trustee Fee and any amounts payable under clause 5(a)(iii) and
(5)(b)(iv) above. The Trustee Fee shall be paid by the Depositor and not from
Trust Property. The Trustee shall bear all Ordinary Expenses. Failure by the
Depositor to pay such amount shall not entitle the Trustee to any payment or
reimbursement from the Trust, nor shall such failure release the Trustee from
the duties it is required to perform under the Trust Agreement.
(b) Extraordinary Expenses shall not be paid out of the Trust Property
unless all the holders of the Class A-1 Certificates and Class A-2
Certificates then outstanding have directed the Trustee to incur such
Extraordinary Expenses. The Trustee may incur other Extraordinary Expenses if
any lesser percentage of the Certificateholders requesting such action
pursuant hereto reimburse the Trustee for the cost thereof from their own
funds in advance. If Extraordinary Expenses are not approved unanimously as
set forth in the first sentence of this Section 6(b), such Extraordinary
Expenses shall not be an obligation of the Trust, and the Trustee shall not
file any claim against the Trust therefor notwithstanding failure of
Certificateholders to reimburse the Trustee.
Section 7. Optional Exchange; Optional Call.
(a) On any (i) Distribution Date (ii) date on which a tender offer for
some or all of the Underlying Securities is consummated or (iii) any date on
which the Underlying Securities are to be redeemed by the Underlying
Securities Issuer, any holder of Class A-1 Certificates and Class A-2
Certificates and the related Call Warrants, if Call Warrants related to such
Certificates are outstanding, may exchange such Certificates and, if
applicable, Call Warrants, for a distribution of Underlying Securities
representing the same percentage of the Underlying Securities as such
14
Certificates represent of all outstanding Certificates. On any Call Date, any
Warrant Holder may exchange Called Certificates for a distribution of
Underlying Securities representing the same percentage of Underlying
Securities as such Called Certificates represent of all outstanding
Certificates; provided, however, that any such exchange shall either (x)
result from an exercise of all Call Warrants owned by such Warrant Holder or
(y) occur on a Call Date on which such Warrant Holder, alone or together with
one or more other Warrant Holders, shall exchange Called Certificates relating
to Underlying Securities having an aggregate principal amount equal to or in
excess of the product of (i) 0.1 and (ii) the aggregate principal amount of
the Underlying Securities deposited into the Trust on the Closing Date.
(b) The following conditions shall apply to any Optional Exchange.
(i) A notice specifying the number of Certificates being surrendered
and the Optional Exchange Date shall be delivered to the Trustee no less
than 5 days (or such shorter period acceptable to the Trustee) but not
more than 30 days before the Optional Exchange Date; provided, however,
that for an Optional Exchange to occur on a Call Date, unless otherwise
specified therein, the Call Notice shall be deemed to be the notice
required hereunder.
(ii) Certificates and, if applicable, the Call Warrants, shall be
surrendered to the Trustee no later than 10:00 a.m. (New York City time)
on the Optional Exchange Date; provided that for an Optional Exchange to
occur on a Call Date, payment of the Call Price to the Warrant Agent
pursuant to Section 1.1(a)(iii) of the Warrant Agent Agreement shall
satisfy the requirement to surrender Certificates.
(iii) Class A-1 Certificates and Class A-2 Certificates representing
a like percentage of all Class A-1 Certificates and Class A-2
Certificates shall be surrendered.
(iv) The Trustee shall have received an opinion of counsel stating
that the Optional Exchange would not cause the Trust to be treated as an
association or publicly traded partnership taxable as a corporation for
federal income tax purposes.
(v) If the Certificateholder is the Depositor or any Affiliate of
the Depositor, (1) the Trustee shall have received a certification from
the Certificateholder that any Certificates being surrendered have been
held for at least six months, and (2) the Certificates being surrendered
may represent no more than 5% (or 25% in the case of Certificates
acquired by the Underwriters but never distributed to investors) of the
then outstanding Certificates.
(vi) The Trustee shall not be obligated to determine whether an
Optional Exchange complies with the applicable provisions for exemption
under Rule 3a-7 of the Investment Company Act of 1940, as amended, or the
rules or regulations promulgated thereunder.
(vii) The provisions of Section 4.07 of the Standard Terms shall not
apply to an Optional Exchange pursuant to this Section 7(c). This Section
7(c) shall not provide any person with a lien against, an interest in or
a right to specific performance with respect to the Underlying
Securities; provided that satisfaction of the conditions set forth in
this
15
Section 7(c) shall entitle the Certificateholder or Warrant Holder, as
applicable, to a distribution thereof.
(viii) The aggregate principal amount of Certificates exchanged in
connection with any Optional Exchange pursuant to this Section shall be
in an amount that will entitle the Certificateholders thereof to
Underlying Securities in an even multiple of the minimum denomination of
such Underlying Securities.
(ix) In the event such Optional Exchange shall occur prior to the
Distribution Date in November, 2002, the Certificateholders shall have
paid to the Trustee, for distribution to the Depositor, on the Optional
Exchange Date an amount equal to the sum obtained by multiplying the
amount of accrued interest on the Underlying Securities from May 15, 2002
through, but excluding, the Closing Date by a fraction, the numerator of
which shall be the number of Certificates being exchanged on such
Optional Exchange Date and the denominator of which shall be the total
number of Certificates.
(c) Concurrently with the execution of this Series Supplement, the
Trustee, on behalf of the Trust, shall execute the Warrant Agent Agreement and
the Call Warrants, dated as of the date hereof and substantially in the form
of Exhibit B hereto, initially evidencing all of the Call Warrants. The
Trustee shall perform the Trust's obligations under the Warrant Agent
Agreement and the Call Warrants in accordance with their respective terms.
(d) Call Warrants may be exercised by the Warrant Holder in whole or in
part on any Call Date. In addition to the conditions set forth in Section 1.1
of the Warrant Agent Agreement, the following conditions shall apply to any
Optional Call.
(i) An opinion of counsel to the Warrant Holder shall have been
delivered to the Rating Agencies, in form satisfactory to the Rating
Agencies, indicating that payment of the Call Price shall not be
recoverable as a preferential transfer or fraudulent conveyance under the
United States Bankruptcy Code. Such opinion may contain customary
assumptions and qualifications.
(ii) The Warrant Holder shall have provided a certificate of
solvency to the Trustee.
(iii) Upon receipt of a Call Notice, the Trustee shall provide a
conditional call notice to the Depository not less than 3 Business Days
prior to the Call Date.
(iv) Delivery of a Call Notice does not give rise to an obligation
on the part of the Warrant Holder to pay the Call Price. If, by 10:00
a.m. (New York City time) on the Call Date, the Warrant Holder has not
paid the Call Price (except in connection with a Call Notice relating to
a tender offer for the Underlying Securities), then the Call Notice shall
automatically expire and none of the Warrant Holder, the Warrant Agent or
the Trustee shall have any obligation with respect to the Call Notice.
The expiration of a Call Notice shall in no way affect the Warrant
Xxxxxx's right to deliver a Call Notice at a later date. The Call Price
for a call in connection with a tender offer shall be deducted from the
proceeds of a tender offer by the Trust pursuant to Section 5(g)(iii).
16
(v) Subject to receipt of the Call Price, the Trustee shall pay the
Call Price to the Certificateholders on the Call Date. The Call Price for
Class of Certificates in respect of partial calls shall be allocated pro
rata to the Certificateholders of such Class.
(vi) The Trustee shall not consent to any amendment or modification
of this Agreement (including the Standard Terms) which would adversely
affect the Warrant Holders (including, without limitation, any alteration
of the timing or amount of any payment of the Call Price or any other
provision of this Agreement in a manner adverse to the Warrant Holders)
without the prior written consent of 100% of the Warrant Holders. For
purposes of this clause, no amendment, modification or supplement
required to provide for any purchase by the Trustee of additional
Underlying Securities and authentication and delivery by the Trustee of
additional certificates and call warrants pursuant to Section 3(d) shall
be deemed to adversely affect the Warrant Holders.
(vii) The Trustee shall not be obligated to determine whether an
Optional Call complies with the applicable provisions for exemption under
Rule 3a-7 of the Investment Company Act of 1940, as amended, or the rules
or regulations promulgated thereunder.
(e) This Section 7 shall not provide the Warrant Holder with a lien
against, an interest in or a right to specific performance with respect to the
Underlying Securities.
(f) The rights of the Certificateholders under the Trust Agreement and
the Certificates are limited by the terms, provisions and conditions of the
Trust Agreement, the Warrant Agent Agreement and the Call Warrants with
respect to the exercise of the Call Warrants by the Warrant Holder. The
Certificateholders, by their acceptance of Certificates, covenant and agree to
tender any and all Called Certificates to the Trustee upon the Warrant
Holder's exercise of Call Warrants and payment of the Call Price for such
Certificates in accordance with the provisions hereof and of the Warrant Agent
Agreement.
Section 8. Notices of Events of Default.
As promptly as practicable after, and in any event within 30
days after, the occurrence of any Event of Default actually known to the
Trustee, the Trustee shall give notice of such Event of Default to the
Depository, or, if any Certificates are not then held by DTC or any other
depository, directly to the registered holders of such Certificates and to the
Warrant Agent. However, except in the case of an Event of Default relating to
the payment of principal of or interest on any of the Underlying Securities,
the Trustee will be protected in withholding such notice if in good faith it
determines that the withholding of such notice is in the interest of the
Certificateholders.
Section 9. Miscellaneous.
(a) The provisions of Section 4.04, Advances, of the Standard Terms shall
not apply to the Motorola Debenture-Backed Series 2002-14 Certificates.
(b) The provisions of Section 4.07, Optional Exchange, of the Standard
Terms shall not apply to the Motorola Debenture-Backed Series 2002-14
Certificates.
17
(c) The Trustee shall simultaneously forward reports to
Certificateholders pursuant to Section 4.03 of the Standard Terms and to the
New York Stock Exchange.
(d) Except as expressly provided herein, the Certificateholders shall not
be entitled to terminate the Trust or cause the sale or other disposition of
the Underlying Securities.
(e) The provisions of Section 3.07(d) of the Standard Terms shall not
apply to the Motorola Debenture-Backed Series 2002-14 Certificates.
(f) If the Trustee has not received payment with respect to a Collection
Period on the Underlying Securities on or prior to the related Distribution
Date, such distribution will be made promptly upon receipt of such payment. No
additional amounts shall accrue on the Certificates or be owed to
Certificateholders as a result of such delay; provided, however, that any
additional interest owed and paid by the Underlying Securities Issuer as a
result of such delay shall be paid to the Class A-1 Certificateholders pro
rata in proportion to their respective entitlements to such delayed payments.
(g) The outstanding Certificate Principal Balance of the Certificates
shall not be reduced by the amount of any Realized Losses (as defined in the
Standard Terms).
(h) The Trust may not engage in any business or activities other than in
connection with, or relating to, the holding, protecting and preserving of the
Trust Property and the issuance of the Certificates and the Call Warrants, and
other than those required or authorized by the Trust Agreement or incidental
and necessary to accomplish such activities. The Trust may not issue or sell
any certificates or other obligations other than the Certificates and the Call
Warrants or otherwise incur, assume or guarantee any indebtedness for money
borrowed. Notwithstanding Section 3.05 of the Standard Terms, funds on deposit
in the Certificate Account shall not be invested. Section 2.01(f) of the
Standard Terms shall be superseded by this provision.
(i) Notwithstanding anything in the Trust Agreement to the contrary, the
Trustee may be removed upon 60 days prior written notice delivered by the
holders of Class A-1 Certificates and Class A-2 Certificates representing the
Required Percentage-Removal.
(j) In the event that the Internal Revenue Service challenges the
characterization of the Trust as a grantor trust, the Trustee shall then file
such forms as the Depositor may specify to establish the Trust's election
pursuant to Section 761 of the Code to exclude the Trust from the application
of Subchapter K of the Code and is hereby empowered to execute such forms on
behalf of the Certificateholders.
(k) Notwithstanding anything in the Standard Terms to the contrary, the
Trustee, upon written direction by the Depositor, will execute the
Certificates.
(l) In relation to Section 7.01(f) of the Standard Terms, any periodic
reports filed by the Trustee pursuant to the Exchange Act in accordance with
the customary practices of the Depositor, need not contain any independent
reports.
(m) Notwithstanding anything in the Trust Agreement to the contrary, the
Trustee will have no recourse to the Underlying Securities.
18
(n) The Trustee shall promptly notify each Rating Agency upon its
obtaining actual knowledge of the occurrence of a Defeasance (as defined in
the Indenture) with respect to the Underlying Securities Issuer.
(o) The Trust will not merge or consolidate with any other entity without
confirmation from each Rating Agency that such merger or consolidation will
not result in the qualification, reduction or withdrawal of its then-current
rating on the Certificates.
(p) All directions, demands and notices hereunder or under the Standard
Terms shall be in writing and shall be delivered as set forth below (unless
written notice is otherwise provided to the Trustee).
If to the Depositor, to:
Xxxxxx ABS Corporation
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Credit Trading
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Trustee or the Warrant Agent, to:
U.S. Bank Trust National Association
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Rating Agencies, to:
Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Attention: CBO/CLO Monitoring Department
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
19
and to:
Standard & Poor's Ratings Services
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Finance Surveillance Group
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the New York Stock Exchange, to:
New York Stock Exchange, Inc.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Copies of all directions, demands and notices required to be given to the
Certificateholders hereunder or under the Standard Terms will also be given to
the Warrant Holders in writing as set forth in this Section 9, and copies of
all directions, demands and notices required to be given to the Trustee
hereunder or under the Standard Terms will also be given to the Warrant Agent
in writing as set forth in this Section 9.
(q) The provisions of Section 2.01(d)(iii) of the Standard Terms shall
not apply to the Motorola Debenture-Backed Series 2002-14 Certificates and the
following shall be deemed to be inserted in its place:
"at the time of delivery of the Underlying Securities, the
Depositor owns such Underlying Securities, has the right to
transfer its interest in such Underlying Securities and such
Underlying Securities are free and clear of any lien, pledge,
encumbrance, right, charge, claim or other security interest;
and"
(r) A Plan (as herein defined) fiduciary, whether or not a
Certificateholder at such time, may request in writing that the Trustee
provide such Plan fiduciary with such information as shall be necessary for it
to determine whether any of the Call Warrant holders is (i) a "party in
interest" (within the meaning of ERISA, Section 3(14)); or (ii) a
"disqualified person" within the meaning of Internal Revenue Code ("Code")
Section 4975(e)(2) with respect to any employee benefit plan or Plan
identified to the Trustee by such Plan fiduciary at the time such request is
made in order for the Plan fiduciary to determine whether an investment in the
Certificates by such Plan is or would be permissible under ERISA or the Code.
Any such written request of a Plan fiduciary shall be accompanied by a
certification of the Plan fiduciary, opinion of counsel experienced in such
issues, and such other documentation as the Trustee may require, in order to
establish that such disclosure is necessary for the Plan fiduciary to
determine compliance with ERISA and the Code, as well as a confidentiality
agreement, whereby the Plan fiduciary agrees not to disclose the identity of
any Call Warrant holders except to any legal or other experts as
20
necessary to make such determination. The holder of a Call Warrant shall upon
reasonable request of the Trustee, in order for the Trustee to satisfy its
obligations to a Plan fiduciary, provide the Trustee with any one or more of
the following, in the sole discretion of the Call Warrant holder: (i) a
certificate that each of the Call Warrant holders is not (x) a "party in
interest" (within the meaning of ERISA, Section 3(14)) with respect to any
"employee benefit plan" as defined in ERISA, Section 3(3); or (y) a
"disqualified person" within the meaning of Code Section 4975(e)(2) with
respect to a "Plan" as defined in Code Section 4975(e)(1) except in each case
with respect to plans sponsored by the Call Warrant holder or its affiliates
which cover employees of the Call Warrant holder and/or such affiliates; (ii)
a certificate that each of the Call Warrant holders is not such a "party in
interest" or "disqualified person" with respect to any employee benefit plan
or Plan identified to the Trustee by such Plan fiduciary at the time such
request is made; or (iii) a written consent to the limited disclosure of the
respective Call Warrant holder's identity to a specific Plan fiduciary solely
for purposes of allowing the Trustee to satisfy its obligations to a Plan
fiduciary.
Section 10. Governing Law. THIS SERIES SUPPLEMENT AND THE TRANSACTIONS
DESCRIBED HEREIN SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED
WITHIN THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CHOICE OF LAWS
PROVISIONS THEREOF.
Section 11. Counterparts. This Series Supplement may be executed in any
number of counterparts, each of which shall be deemed to be an original, and
all such counterparts shall constitute but one and the same instrument.
Section 12. Termination of the Trust. The Trust shall terminate upon the
earliest to occur of (i) the payment in full at maturity or sale by the Trust
after a payment default or an acceleration or other early payment of the
Underlying Securities and the distribution in full of all amounts due to the
Class A-1 Certificateholders and Class A-2 Certificateholders; (ii) the
exercise of all outstanding Call Warrants by the Warrant Holder; (iii) the
Final Scheduled Distribution Date and (iv) the expiration of 21 years from the
death of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
Ambassador of the United States to the Court of St. Xxxxx, living on the date
hereof.
Section 13. Sale of Underlying Securities; Optional Exchange. In the
event of a sale of the Underlying Securities pursuant to Section 5(c) hereof
or pursuant to the instructions of the Warrant Agent under Section 1.2 of the
Warrant Agent Agreement, the Trustee shall solicit bids for the sale of the
Underlying Securities with settlement thereof on or before the third (3rd)
Business Day after such sale from three leading dealers in the relevant
market. Any of the following dealers (or their successors) shall be deemed to
qualify as leading dealers: (1) Credit Suisse First Boston Corporation, (2)
Xxxxxxx, Xxxxx & Co., (3) Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx Incorporated,
(4) UBS Warburg LLC, (5) Xxxxxxx Xxxxx Xxxxxx Inc., and (6) except in the case
of a sale related to the exercise of Call Warrants by the Depositor or any
Affiliate thereof, Xxxxxx Brothers Inc. The Trustee shall not be responsible
for the failure to obtain a bid so long as it has made reasonable efforts to
obtain bids. If a bid for the sale of the Underlying Securities has been
accepted by the Trustee but the sale has failed to settle on the proposed
settlement date, the Trustee shall request new bids from such leading dealers.
In the event of an
21
Optional Exchange, the Trustee shall only deliver the Underlying Securities to
the purchaser of such Underlying Securities or sell the Underlying Securities
pursuant to this Section 13, as the case may be, against payment in same day
funds deposited into the Certificate Account.
Section 14. Amendments. Notwithstanding anything in the Trust Agreement
to the contrary, in addition to the other restrictions on modification and
amendment contained therein, the Trustee shall not enter into any amendment or
modification of the Trust Agreement which would adversely affect in any
material respect the interests of the holders of any class of Certificates
without the consent of the holders of 100% of such class of Certificates;
provided, however, that no such amendment or modification will be permitted
which would cause the Trust to be taxed as an association or publicly traded
partnership taxable as a corporation for federal income tax purposes. Unless
otherwise agreed, the Trustee shall provide five Business Days written notice
to each Rating Agency before entering into any amendment or modification of
the Trust Agreement pursuant to this Section 14.
Section 15. Voting of Underlying Securities, Modification of Indenture.
(a) The Trustee, as holder of the Underlying Securities, has the right to
vote and give consents and waivers in respect of the Underlying Securities as
permitted by the Depository and except as otherwise limited by the Trust
Agreement. In the event that the Trustee receives a request from the
Depository, the Underlying Securities Trustee or the Underlying Securities
Issuer for its consent to any amendment, modification or waiver of the
Underlying Securities, the Indenture or any other document thereunder or
relating thereto, or receives any other solicitation for any action with
respect to the Underlying Securities, the Trustee shall mail a notice of such
proposed amendment, modification, waiver or solicitation to each
Certificateholder of record as of such date. The Trustee shall request
instructions from the Certificateholders as to whether or not to consent to or
vote to accept such amendment, modification, waiver or solicitation. The
Trustee shall consent or vote, or refrain from consenting or voting, in the
same proportion (based on the relative outstanding Certificate 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)
cause the Trust to be taxed as an association or publicly traded partnership
taxable as a corporation under the Code, (ii) which would alter the timing or
amount of any payment on the Underlying Securities, including, without
limitation, any demand to accelerate the Underlying Securities, except in the
event of a default under the Underlying Securities or an event which with the
passage of time would become an event of default under the Underlying
Securities and with the unanimous consent of holders of all outstanding Class
A-1 Certificates, Class A-2 Certificates and all Warrant Holders, or (iii)
which would result in the exchange or substitution of any of the outstanding
Underlying Securities pursuant to a plan for the refunding or refinancing of
such Underlying Securities except in the event of a default under the
Indenture and only with the consent of Certificateholders representing 100% of
the Class A-1 Certificates, 100% of the Class A-2 Certificates and 100% of the
Warrant Holders. The Trustee shall have no liability for any failure to act
resulting from Certificateholders' late return of, or failure to return,
directions requested by the Trustee from the Certificateholders.
22
(b) In the event that an offer is made by the Underlying Securities
Issuer to issue new obligations in exchange and substitution for any of the
Underlying Securities, pursuant to a plan for the refunding or refinancing of
the outstanding Underlying Securities or any other offer is made for the
Underlying Securities, the Trustee shall notify the Class A-1
Certificateholders, Class A-2 Certificateholders and the Warrant Holders of
such offer promptly. Subject to the rights of the Warrant Holders to exercise
Call Warrants in connection with a tender offer or Change of Control Offer for
the Underlying Securities, the Trustee must reject any such offer unless the
Trustee is directed by the affirmative vote of the holders of 100% of the
Class A-1 Certificates, Class A-2 Certificates and Call Warrants to accept
such offer and the Trustee has received the tax opinion described above. If
pursuant to the preceding sentence, the Trustee accepts any such offer the
Trustee shall promptly notify the Rating Agencies.
(c) If an event of default under the Indenture occurs and is continuing,
and if directed by a majority of the outstanding Class A-1 Certificateholders
and Class A-2 Certificateholders, the Trustee shall vote the Underlying
Securities in favor of directing, or take such other action as may be
appropriate to direct, the Underlying Securities Trustee to declare the unpaid
principal amount of the Underlying Securities and any accrued and unpaid
interest thereon to be due and payable.
(d) Subject to the rights of the Warrant Holders pursuant to Section 5(h)
hereof, the Trustee shall not tender Underlying Securities on behalf of the
Trust in connection with a Change of Control Offer, regardless of any vote or
direction of the Certificateholders to the contrary.
Section 16. Additional Depositor Representation. It is the express intent
of the parties hereto that the conveyance of the Underlying Securities by the
Depositor to the Trustee be, and be construed as, a sale of the Underlying
Securities by the Depositor and not a pledge of any Underlying Securities by
the Depositor to secure a debt or other obligation of the Depositor. In the
event that, notwithstanding the aforementioned intent of the parties, any
Underlying Securities are held to be property of the Depositor, then, it is
the express intent of the parties that such conveyance be deemed a pledge of
such Underlying Securities by the Depositor to the Trustee to secure a debt or
other obligation of the Depositor, pursuant to Section 10.07 of the Standard
Terms. In connection with any such grant of a security interest in the
Underlying Securities (including any such grant in connection with any sale of
additional Underlying Securities pursuant to Section 3(d)), the Depositor
hereby represents and warrants to Trustee as follows:
(i) In the event the Underlying Securities are held to be property of
the Depositor, then the Trust Agreement creates a valid and
continuing security interest (as defined in the applicable Uniform
Commercial Code) 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.
(ii) The Underlying Securities have been credited to a trust account (the
"Securities Account") of the Trustee, or its authorized agent, in
accordance with Section 2.01 of the Standard Terms. The Trustee, as
securities intermediary for the Securities
23
Account, has agreed to treat the Underlying Securities as "financial
assets" within the meaning of the Uniform Commercial Code.
(iii) 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.
(iv) Depositor has received all consents and approvals required by the
terms of the Underlying Securities to the transfer to the Trustee of
its interest and rights in the Underlying Securities as contemplated
by the Trust Agreement.
(v) Depositor has taken all steps necessary to cause the Trustee, as
securities intermediary for the Securities Account, to identify on
its records that the Trustee, as the trustee of the Trust, is the
Person having a security entitlement against the securities
intermediary in the Securities Account.
(vi) 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.
(vii) The Securities Account is not in the name of any Person other than
the Trust. Depositor has not consented to the compliance by the
Trustee, as securities intermediary, with entitlement orders of any
Person other than the Trustee, as trustee of the Trust.
24
IN WITNESS WHEREOF, the parties hereto have caused this
Series Supplement to be duly executed by their respective authorized officers
as of the date first written above.
XXXXXX ABS CORPORATION,
as Depositor
By:
----------------------------------
Name: Xxxx Xxxxxxx
Title: Senior Vice President
U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity
but solely as Trustee on behalf
of the Corporate Backed Trust Certificates
Motorola Debenture-Backed Series 2002-14
Trust
By:
----------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: Vice President
25
SCHEDULE I
MOTOROLA DEBENTURE-BACKED SERIES 2002-14
UNDERLYING SECURITIES SCHEDULE
Underlying Securities: 6 1/2% Debentures due November 15, 2028
Issuer: Motorola, Inc.
CUSIP Number: 000000XX0
Principal Amount Deposited: $32,875,000.
Original Issue Date: November 23, 1998.
Principal Amount of
Underlying Securities
Originally Issued: $445,000,000.
Maturity Date: November 15, 2028.
Interest Rate: 6 1/2% per annum.
Interest Payment Dates: May 15th and November 15th.
Record Dates: May 1st and November 1st.
II-1
EXHIBIT A-1
FORM OF TRUST CERTIFICATE CLASS A-1
A-1-1
EXHIBIT A-2
FORM OF TRUST CERTIFICATE CLASS A-2
A-2-1
EXHIBIT B
FORM OF WARRANT AGENT AGREEMENT
B-1
EXHIBIT C
FORM OF INVESTMENT LETTER
QUALIFIED INSTITUTIONAL BUYER
Dated:[_______________]
U.S. Bank Trust National Association,
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx ABS Corporation
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
In connection with its proposed purchase of ________________
aggregate principal amount of Corporate Backed Trust Certificates, Motorola
Debenture-Backed Series 2002-14 Trust Class A-2 Certificates (the
"Securities"), the undersigned purchaser (the "Purchaser") confirms that:
1. The Purchaser understands that substantial risks are involved in an
investment in the Securities. The Purchaser represents that in making its
investment decision to acquire the Securities, 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, Xxxxxx ABS Corporation, as depositor (the "Depositor"), or
U.S. Bank Trust National Association, as trustee (the "Trustee"), or any
of your or their affiliates, except as expressly
contained in written information, if any. 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
Securities, 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 Securities.
2. The Purchaser (A) is a "Qualified Institutional Buyer" (as defined in
Rule 144A under the Securities Act of 1933, as amended (the "1933 Act"))
and (B) is acquiring the Call Warrants for its own account or for the
account of an investor of the type described in clause (A) above as to
each of which the Purchaser exercises sole investment discretion. The
Purchaser is purchasing the Securities 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 1933 Act or
the securities or blue sky laws of any state.
C-1
3. The Purchaser understands that the Securities have not been and will not
be registered under the 1933 Act or under the securities or blue sky laws
of any state, and that (i) if it decides to resell, pledge or otherwise
transfer any Security, such resale, pledge or other transfer must comply
with the provisions of Section 3(e) of the Series Supplement relating to
the Securities and (ii) it will, and each subsequent holder will be
required to, notify any purchaser of any Security from it of the resale
restrictions referred to in clause (i) above.
4. The Purchaser understands that each of the Securities will bear a legend
substantially to the following effect, unless otherwise agreed by the
Depositor and the Trustee:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE
DISPOSED OF EXCEPT WHILE A REGISTRATION UNDER SUCH ACT IS IN EFFECT
OR PURSUANT TO AN EXEMPTION THEREFROM UNDER SUCH ACT. THE SECURITY
REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN COMPLIANCE WITH THE
CONDITIONS SPECIFIED HEREIN OR IN THE SERIES SUPPLEMENT."
5. The Purchaser understands that no subsequent transfer of the Securities
is permitted unless (A) such transfer is of a Security with the
applicable minimum denomination and (B) the Purchaser causes the proposed
transferee to provide to the Depositor and the Trustee, such
documentation as may be required pursuant to Section 3(e) of this Series
Supplement, including if required a letter substantially in the form
hereof.
6. The Purchaser is a person or entity (a "Person") who is either
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, or (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 Security
is effectively connected with such Person's conduct of a trade
or business within the United States within the meaning of the
Internal Revenue Code of 1986, as amended (the "Code"), and its
ownership of any interest in such Security will not result in
any withholding obligation with respect to any payments with
respect to the Securities 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 the
Underlying Securities Issuer (as defined in the Prospectus
Supplement)
C-2
entitled to vote, (2) that is a controlled foreign corporation
related to the Underlying Securities Issuer 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.
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, and (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 appropriate
certification for all partners or members attached). 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.
7. The Purchaser agrees that if at some time in the future it wishes to
transfer or exchange any of the Securities, it will not transfer or
exchange any of the Securities unless such transfer or exchange is
in accordance with the terms of the Warrant Agent Agreement, Series
Supplement and other documents applicable to the Security. The
Purchaser understands that any purported transfer of the Securities
(or any interest therein) in contravention of any of the
restrictions and conditions in the agreements, as applicable, shall
be void, and the purported transferee in such transfer shall not be
recognized by any Person as a holder of such Securities, for any
purpose.
C-3
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,
By:
-----------------------------------------
Name:
Title:
[Medallion Stamp to be affixed here]
C-4
