EXHIBIT 4.1
COMCERTZ ABS TRUST CERTIFICATES
STANDARD TERMS FOR
TRUST AGREEMENTS
U.S. Bank Trust National Association, as Trustee
Comcertz ABS Corporation, as Depositor
These Standard Terms for Trust Agreements, dated [o] ("Standard Terms"),
may be incorporated by reference in one or more Trust Agreements, each of which
together with such incorporated Standard Terms shall constitute a Trust
Agreement (each a "Trust Agreement") relating to a particular series of Comcertz
ABS Trust Certificates described in the Prospectus dated [o] and the applicable
Prospectus Supplement. Any such Trust Agreement may be in the form of Exhibit A
hereto or such other form as Comcertz ABS Corporation (the "Depositor") and the
Trustee may approve, such approval to be evidenced by their execution thereof.
All terms defined herein shall have meanings solely with respect to the
particular Trust Agreement in which these Standard Terms are incorporated.
Incorporation of these Standard Terms into a Trust Agreement is for convenience
only to avoid the necessity of physically including the Standard Terms in such
Trust Agreement, and each trust created by a Trust Agreement shall be a legally
separate and distinct trust from any other trust created by any other Trust
Agreement into which these Standard Terms may also be incorporated. These
Standard Terms shall by themselves be of no force and effect, and shall only
have effect as and to the extent incorporated by reference in a Trust Agreement.
Execution hereof by the Trustee and the Depositor is for purposes of
identification only and the absence of such execution shall not affect the
validity of any Trust Agreement or these Standard Terms to the extent
incorporated therein. The Trust Agreement into which these Standard Terms are
incorporated by reference, including the Terms Schedule attached thereto and
made a part thereof and these Standard Terms so incorporated by reference
therein, as amended, modified or supplemented from time to time, shall together
constitute a single Trust Agreement and are referred to herein as the "Trust
Agreement." In the event of a conflict between any Trust Agreement, including
the Terms Schedule attached thereto, and these Standard Terms, the Trust
Agreement shall control.
ARTICLE I
DEFINITIONS; CONSTRUCTION
Section 1.01. Definitions. Except as otherwise specified herein or as the
context may otherwise require, the following terms have the respective meanings
set forth below for all purposes of these Standard Terms:
"Account": As defined in Section 3.06.
"Affected Underlying Securities": With respect to any Liquidation Event,
the Underlying Securities affected by an Underlying Security Default,
Disqualified Underlying Securities, or Underlying Securities related to a
Disqualified Transaction.
"Affected Transaction": As defined in the Swap Agreement.
"Affiliate": With respect to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control," when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Alternative Non-Plan ERISA Restrictions": The restrictions on transfer of
Certificates set forth in Section 5.11(d)(1).
1
"Authenticating Agent": As defined in Section 5.10.
"Available Funds": With respect to any Distribution Date, (i) all amounts
received by the Trustee on or with respect to the Underlying Securities or other
Trust Property plus (ii) all investment income from Permitted Investments plus
(iii) all Swap Amounts, if any, paid to the Trustee by the Swap Counterparty
pursuant to the Swap Agreement, or by the Swap Guarantor pursuant to the Swap
Guarantee, minus (iv) all amounts paid or payable to the Swap Counterparty by
the Trustee pursuant to the Swap Agreement, minus (v) any amounts reimbursable
to the Trustee under Section 10.02(ix), in each case on deposit in the
Certificate Account, and available for distribution, on such Distribution Date.
"Base Rate": LIBOR, Commercial Paper Rate, Treasury Rate, Federal Funds
Rate, CD Rate or such other Base Rate specified in the Terms Schedule.
"Benefit Plan": The meaning specified in Section 5.11(d).
"Book-Entry Certificate": A Certificate represented by a Global Security.
"Business Day": As specified in the Terms Schedule.
"Calculation Agent": As specified in the Terms Schedule, if any.
"Call Date": As defined in Section 5.13.
"Call Option": As specified in the Terms Schedule.
"Call Price": As defined in Section 5.13.
"Callable Series": A Series so designated in the Terms Schedule which
grants one or more specified persons the right to purchase all or a portion of
the Certificates of any given Series.
"CD Rate": For each Interest Reset Period, the rate as of the second
Business Day prior to the Interest Reset Date for such Interest Reset Period (a
"CD Rate Determination Date") for negotiable certificates of deposit having the
Index Maturity designated in the Terms Schedule as published in H.15(519) under
the heading "CDs (Secondary Market)." In the event that such rate is not
published prior to 3:00 p.m., New York City time, on the CD Rate Calculation
Date pertaining to such CD Rate Determination Date, then the "CD Rate" for such
Interest Reset Period will be the rate on such CD Rate Determination Date for
negotiable certificates of deposit of the Index Maturity designated in the Terms
Schedule as published in Composite Quotations under the heading "Certificates of
Deposit." If by 3:00 p.m., New York City time, on such CD Rate Calculation Date
such rate is not yet published in either H.15(519) or Composite Quotations, then
the "CD Rate" for such Interest Reset Period will be calculated by the
Calculation Agent for such CD Rate Certificate and will be the arithmetic mean
of the secondary market offered rates as of 10:00 a.m., New York City time, on
such CD Rate Determination Date, of three leading nonbank dealers in negotiable
U.S. dollar certificates of deposit in The City of New York selected by the
Calculation Agent for such CD Rate Certificate for negotiable certificates of
deposit of major United States money center banks of the highest credit standing
(in the market for negotiable certificates of deposit) with a remaining maturity
closest to the Index Maturity designated in the Terms Schedule in a denomination
of $5,000,000; provided, however, that if the dealers selected as aforesaid by
such Calculation Agent are not quoting offered rates as mentioned in this
sentence, the "CD Rate" for such Interest Reset Period will be the same as the
CD Rate for the immediately preceding Interest Reset Period (or, if there was no
such Interest Reset Period, the Initial Pass-Through Rate).
"CD Rate Calculation Date": With respect to any CD Rate Determination
Date, the first to occur of (a) the tenth calendar day after such CD Rate
Determination Date or, if such day is not a Business Day, the next succeeding
Business Day or (b) the second Business Day preceding the date any distribution
of interest is required to be made following the applicable Interest Reset Date.
"CD Rate Certificates": Floating Rate Certificates with a Base Rate equal
to CD Rate.
"Clearstream, Luxembourg": Clearstream Banking, societe anonyme.
"Certificate": A certificate in the form attached as Exhibit B, evidencing
a Registered Certificate.
"Certificate Account": As defined in Section 3.05.
2
"Certificate Event of Default": Any "Event of Default" applicable to the
Certificates as specified in the Terms Schedule.
"Certificate Principal Balance": With respect to a Certificate that is
Outstanding, as determined at any time, the maximum amount that the Holder
thereof is entitled to receive as distributions allocable to principal payments
on the Underlying Securities.
"Certificate Register" and "Certificate Registrar": As respectively
defined in Section 5.03.
"Certificateholder" or "Holder": The Person in whose name a Certificate is
registered in the Certificate Register on the applicable Record Date.
"Certificates": The securities authorized by, and authenticated and
delivered under, the Trust Agreement and evidenced by a certificate in the form
or forms attached hereto as Exhibit B.
"Composite Quotations": The daily statistical release entitled "Composite
3:30 p.m. Quotations for U.S. Government Securities" published by the Federal
Reserve Bank of New York.
"Class": A separately denominated class of the Certificates of any Series,
entitled to specified distributions of the Trust Property.
"Code": The Internal Revenue Code of 1986, as amended, and Treasury
Regulations promulgated thereunder.
"Commercial Paper Rate": For each Interest Reset Period, a rate determined
by the Calculation Agent for such Commercial Paper Rate Certificate as of the
second Business Day prior to the Interest Reset Date for such Interest Reset
Period (a "Commercial Paper Rate Determination Date") and equal to the Money
Market Yield on such Commercial Paper Rate Determination Date of the rate for
commercial paper having the Index Maturity specified in the Terms Schedule, as
such rate shall be published in H.15(519) under the heading "Commercial Paper."
In the event that such rate is not published prior to 3:00 p.m., New York City
time, on the Commercial Paper Rate Calculation Date (as defined below)
pertaining to such Commercial Paper Rate Determination Date, then the
"Commercial Paper Rate" for such Interest Reset Period shall be the Money Market
Yield on such Commercial Paper Rate Determination Date of the rate for
commercial paper of the specified Index Maturity as published in Composite
Quotations under the heading "Commercial Paper." If by 3:00 p.m., New York City
time, on such Commercial Paper Rate Calculation Date such rate is not yet
published in either H.15(519) or Composite Quotations, then the "Commercial
Paper Rate" for such Interest Reset Period shall be the Money Market Yield of
the arithmetic mean of the offered rates, as of 11:00 a.m., New York City time,
on such Commercial Paper Rate Determination Date of three leading dealers of
commercial paper in The City of New York selected by the Calculation Agent for
such Commercial Paper Rate Certificate for commercial paper of the specified
Index Maturity placed for an industrial issuer whose bonds are rated "AA" or the
equivalent by a nationally recognized rating agency; provided, however, that if
the dealers selected as aforesaid by such Calculation Agent are not quoting
offered rates as mentioned in this sentence, the "Commercial Paper Rate" for
such Interest Reset Period will be the same as the Commercial Paper Rate for the
immediately preceding Interest Reset Period (or, if there was no such Interest
Reset Period, the Initial Pass-Through Rate).
"Commercial Paper Rate Calculation Date": With respect to any Commercial
Paper Rate Determination Date, the first to occur of (a) the tenth calendar day
after such Commercial Paper Rate Determination Date or, if such day is not a
Business Day, the next succeeding Business Day or (b) the second Business Day
preceding the date any distribution of interest is required to be made following
the applicable Interest Reset Date.
"Commercial Paper Rate Certificates": Floating Rate Certificates with a
Base Rate equal to Commercial Paper Rate.
"Commission": The Securities and Exchange Commission, or any successor
agency.
"Concentrated Underlying Security": Any Underlying Security that on the
Original Issue Date constitutes 10% or more of the total Underlying Securities
held by the Trust with respect to a Series of Certificates.
"Corporate Trust Office": The Trustee's offices at [o], or such other
addresses as the Trustee may designate from time to time by notice to the
Holders, the Depositor, the Swap Counterparty and the Swap Guarantor.
3
"Credit Support": With respect to any Series (or any Class within such
Series), any combination of insurance policies, letters of credit, financial
guaranty, surety bond, reserve accounts and other types of rights or assets
designed to support or ensure the servicing and distribution of amounts due in
respect of the Trust Property, which in each case is specified as such in the
applicable Terms Schedule.
"Credit Support Provider": With respect to any Series (or any Class within
such Series), the bank, financial guarantor, surety company or other financial
institution issuing a letter of credit, financial guaranty, surety bond or other
instrument that serves as Credit Support with respect to such Series or Class,
which in each case is specified as such in the applicable Terms Schedule.
"Currency": Dollars or Foreign Currency.
"Definitive Registered Certificate": A Registered Certificate in
definitive, certificated form without coupons attached.
"Deposited Assets": Collectively, the Underlying Securities, the Swap
Agreement, if any, the Credit Support, if any, Permitted Investments, if any,
and any other assets deposited with the Trust.
"Deposited Asset Provider": The relevant person who sold the applicable
Deposited Assets to the Depositor.
"Depositary": DTC or, if so provided in the Terms Schedule, Euroclear or
Clearstream, Luxembourg; or another depositary specified in the Terms Schedule.
"Depositor": Comcertz ABS Corporation, a Delaware corporation, and any of
its successors or assigns.
"Depositor Order" or "Depositor Requests": A written order or request,
respectively, signed in the name of the Depositor by any of its Chief Executive
Officer, Chief Financial Officer, Chief Operating Officer, President, a Vice
President, its Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary and delivered to the Trustee. "Determination Date": A date which is
specified in the Terms Schedule and on which the amount of distributions
allocable to the Certificates shall be determined.
"Disqualified Credit Support": Any Credit Support with respect to which
(i) the related Credit Support Provider ceases to be an Eligible Issuer and no
means of replacing such Credit Support Provider or otherwise satisfying the
Depositor's reporting obligations under the Exchange Act regarding the related
Credit Support is described in the Terms Schedule; (ii) whether or not the
Credit Support Provider was initially an Eligible Issuer, it becomes impossible
or impractical for the Depositor to satisfy its reporting obligations under the
Exchange Act regarding the related Credit Support. For purposes of the
foregoing, a Credit Support Provider which is fully guaranteed by a guarantor
who is an Eligible Issuer will be considered an Eligible Issuer.
"Disqualified Transaction": Any Transaction under a Swap Agreement with
respect to which (i) the Swap Counterparty ceases to be an Eligible Issuer and
no means of replacing such Swap Counterparty or otherwise satisfying the
Depositor's reporting obligations under the Exchange Act regarding such
Transaction is described in the Terms Schedule; or (ii) whether or not the
related Swap Counterparty was initially an Eligible Issuer, it becomes
impossible or impractical for the Depositor to satisfy its reporting obligations
under the Exchange Act regarding such Transaction. For purposes of the
foregoing, a Swap Counterparty which is fully guaranteed by a guarantor who is
an Eligible Issuer will be considered an Eligible Issuer.
"Disqualified Underlying Security": Any (i) Concentrated Underlying
Security, the issuer of which ceases to be an Eligible Issuer or (ii) any
Underlying Security other than a Concentrated Underlying Security, the issuer of
which ceases to be an Eligible Issuer or a Reporting Issuer, in each case where
no additional means of providing current information regarding such Underlying
Security Issuer is described in the Terms Schedule. For purposes of the
foregoing, an Underlying Security Issuer which is fully guaranteed by a
guarantor who is an Eligible Issuer will be considered an Eligible Issuer.
"Distribution Date": As specified in the Terms Schedule.
4
"Dollar" or "$" or "USD": Such currency of the United States as at the
time of payment is legal tender for the payment of public and private debts.
"DTC": The Depository Trust Company, a limited purpose trust company
organized under the laws of the State of New York, its successors and assigns.
"Early Termination Date": As defined in the Swap Agreement.
"Eligible Account": A non-interest bearing account, held in either the
United States or the United Kingdom, in the name of the Trustee for the benefit
of the Trust that is a segregated account or segregated accounts maintained with
a Federal or State chartered depositary institution or trust company (which may
be the Trustee) the short-term and long-term unsecured debt obligations of which
(or, in the case of a depositary institution or trust company that is the
principal subsidiary of a holding company, the short-term and long-term
unsecured debt obligations of such holding company) are rated P-i and Aaa by
Xxxxx'x, A-1+ and AAA by S&P, and, if rated by Fitch, F-1+ and AAA by Fitch at
the time any amounts are held on deposit therein including when such amounts are
initially deposited and all times subsequent.
"Eligible Issuer": (i) the United States government, (ii) any corporation,
limited partnership, trust, limited liability company or other organization,
banking organization or insurance company, in each case which meets the market
capitalization and other requirements for a primary issuance of common stock on
Form S-3 under the Securities Act and is subject to the informational
requirements of the Exchange Act, and which, in accordance therewith, files
reports and other information with the Securities and Exchange Commission (or
another applicable agency pursuant to Section 12(i) of the Exchange Act) or
(iii) the Federal National Mortgage Association, Federal Home Loan Mortgage
Corporation or other government sponsored enterprise that has a comparable
market capitalization and which makes information publicly available comparable
to that of Exchange Act reporting companies.
"ERISA": The Employee Retirement Income Underlying Security Act of 1974,
as amended, including any successor or amendatory statutes.
"ERISA Benefit Plan": As specified in Section 5.11(d).
"Euro": As defined in Section 5.08.
"Euroclear": Euroclear Bank S.A./N.V., as operator of the Euroclear
System.
["Excess Expense Event": As defined in Section 9.05(a).]
"Exchange Act": The Securities Exchange Act of 1934, as amended.
"Exchangeable Series": A series of Certificates that permit the Holders
thereof to exchange the Certificates pursuant to an Optional Exchange.
"Exchange Rate Agent": Unless otherwise specified in the Terms Schedule,
[o] or an Affiliate or agent of [o] designated by [o].
"Executive Officer": With respect to any corporation, the Chief Executive
Officer, Chief Operating Officer, Chief Financial Officer, President, any Vice
President, the Secretary, any Assistant Secretary, the Treasurer or any
Assistant Treasurer of such corporation; with respect to any partnership, any
general partner xxxxxxx.
"Extraordinary Trust Expense": As defined in Section 10.05(b).
"Federal Funds Rate": For each Interest Reset Period, the effective rate
on the Interest Reset Date for such Interest Reset Period (a "Federal Funds Rate
Determination Date") for Federal Funds as published in H.15(519) under the
heading "Federal Funds (Effective)." In the event that such rate is not
published prior to 3:00 p.m., New York City time, on the Federal Funds Rate
Calculation Date (as defined below) pertaining to such Federal Funds Rate
Determination Date, the "Federal Funds Rate" for such Interest Reset Period
shall be the rate on such Federal Funds Rate Determination Date as published in
Composite Quotations under the heading "Federal Funds/Effective Rate." If by
3:00 p.m., New York City time, on such Federal Funds Rate Calculation Date such
rate is not yet published in either H.15(519) or Composite Quotations, then the
"Federal Funds Rate" for such Interest Reset
5
Period shall be the rate on such Federal Funds Rate Determination Date made
publicly available by the Federal Reserve Bank of New York which is equivalent
to the rate which appears in H.15(519) under the heading "Federal Funds
(Effective)"; provided, however, that if such rate is not made publicly
available by the Federal Reserve Bank of New York by 3:00 p.m., New York City
time, on such Federal Funds Rate Calculation Date, the "Federal Funds Rate" for
such Interest Reset Period will be the same as the Federal Funds Rate in effect
for the immediately preceding Interest Reset Period (or, if there was no such
Interest Reset Period, the Initial Pass-Through Rate). Unless otherwise
specified in the Terms Schedule, in the case of a Federal Funds Rate Certificate
that resets daily, the Pass-Through Rate on such Certificate for the period from
and including a Monday to but excluding the succeeding Monday will be reset by
the Calculation Agent for such certificate on such second Monday (or, if not a
Business Day, on the next succeeding Business Day) to a rate equal to the
average of the Federal Funds Rate in effect with respect to each such day in
such week.
"Federal Funds Rate Calculation Date": With respect to any Federal Funds
Rate Determination Date, the next succeeding Business Day.
"Federal Funds Rate Certificates": Floating Rate Certificates with a Base
Rate equal to Federal Funds Rate.
"Fitch": Fitch Ratings.
"Fixed Pass-Through Rate": A fixed Pass-Through Rate specified in the
Terms Schedule.
"Fixed Rate Certificates": Certificates with a Fixed Pass-Through Rate.
"Floating Rate Certificates": Certificates with a Variable Pass-Through
Rate.
"Foreign Currency": A currency issued by the government of any country
other than the United States or a composite currency the value of which is
determined by reference to the values of the currencies of any group of
countries.
"Global Security": A Certificate in global form issued to the Depositary
and (in the case of a Registered Certificate) registered in the name of the
Depositary or its nominee.
"H.15(519)": The publication entitled "Statistical Release H.15(519),
Selected Interest Rates," or any successor publications, published by the Board
of Governors of the Federal Reserve System.
"Independent": When used with respect to any specified Person means that
the Person (1) is in fact independent of the Depositor, the Swap Counterparty
and the Swap Guarantor and of any Affiliate of any of the foregoing Persons, (2)
does not have any direct or indirect financial interest in the Depositor, the
Swap Counterparty or the Swap Guarantor, or in any Affiliate of any of the
foregoing Persons which is material with respect to such Person and (3) is not
connected with the Depositor, the Swap Counterparty or the Swap Guarantor, as an
officer, employee, promoter, partner, director or person performing similar
functions.
"Index Maturity": The period of maturity of the instrument or obligation
from which the Base Rate is calculated specified in the Terms Schedule.
"Initial Pass-Through Rate": Rate applicable to the Certificates from its
Original Issue Date to the first Interest Reset Date as set forth on the face
thereof, the Terms Schedule.
"Initial Swap Rate Accrual Period": The period from and including the
Original Issue Date to but excluding the next Swap Payment Date.
"Initial Underlying Security Accrual Period": The period from and
including the Original Issue Date to but excluding the next Underlying Security
Payment Date.
"Insolvency Law": As defined in Section 10.14.
"Investment Company Act": The United States Investment Company Act of
1940, as amended, and applicable rules and regulations thereunder.
6
"LIBOR": Unless otherwise specified in the Terms Schedule, a rate
determined for each Interest Reset Period by the Calculation Agent for any LIBOR
Certificate as follows:
(i) On the second London Banking Day prior to the Interest Reset Date for
such Interest Reset Period (a "LIBOR Determination Date"), the Calculation Agent
for such LIBOR Certificate will determine the arithmetic mean of the offered
rates for deposits in U.S. dollars for the period of the Index Maturity
specified in the Terms Schedule, commencing on such Interest Reset Date, which
appear on the Reuters Screen LIBOR Page at approximately 11:00 a.m., London
time, on such LIBOR Determination Date. "Reuters Screen LIBOR Page" means the
display designated as page "LIBOR" on the Reuters Monitor Money Rates Service
(or such other page may replace the LIBOR page on that service for the purpose
of displaying London interbank offered rates of major banks). If at least two
such offered rates appear on the Reuters Screen LIBOR Page, "LIBOR" for such
Interest Reset Period will be the arithmetic mean of such offered rates as
determined by the Calculation Agent for such LIBOR Certificate.
(ii) If fewer than two offered rates appear on the Reuters Screen LIBOR
Page on such LIBOR Determination Date, the Calculation Agent for such LIBOR
Certificate will request the principal London offices of each of four major
banks in the London interbank market selected by such Calculation Agent to
provide such Calculation Agent with its offered quotations for deposits in U.S.
dollars for the period of the specified Index Maturity, commencing on such
Interest Reset Date, to prime banks in the London interbank market at
approximately 11:00 a.m., London time, on such LIBOR Determination Date and in a
principal amount equal to an amount of not less than $1,000,000 that is
representative of a single transaction in such market at such time. If at least
two such quotations are provided, "LIBOR" for such Interest Reset Period will be
the arithmetic mean of such quotations. If fewer than two such quotations are
provided, "LIBOR" for such Interest Reset Period will be the arithmetic mean of
rates quoted by three major banks in The City of New York selected by the
Calculation Agent for such LIBOR Certificate at approximately 11:00 a.m., New
York City time, on such LIBOR Determination Date for loans in U.S. dollars to
leading European banks, for the period of the specified Index Maturity,
commencing on such Interest Reset Date, and in a principal amount equal to an
amount of not less than $1,000,000 that is representative of a single
transaction in such market at such time; provided, however, that if fewer than
three banks selected as aforesaid by such Calculation Agent are quoting rates as
specified in this sentence, "LIBOR" for such Interest Reset Period will be the
same as LIBOR for the immediately preceding Interest Reset Period (or, if there
was no such Interest Reset Period, the Initial Pass-Through Rate). If LIBOR with
respect to any LIBOR Certificate is indexed to the offered rates for deposits in
a currency other than U.S. dollars, the Terms Schedule will set forth the method
for determining such rate.
"LIBOR Certificates": Floating Rate Certificates with a Base Rate equal to
LIBOR.
"Liquidation Event": Any of the events described in Section 9.02.
"Maximum Reimbursable Amount": As specified in the Terms Schedule (or any
other amount specified by the party agreeing to indemnify the Trustee).
"Money Market Yield": A yield calculated in accordance with the following
formula:
Money Market Yield = D x 360 x 100
-------------
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper
quoted on a bank discount basis and expressed as a decimal, and "M" refers to
the actual number of days in the specified Index Maturity.
"Moody's": Xxxxx'x Investors Service, Inc.
"Notional Amount": A notional amount specified in the Terms Schedule with
respect to any Class of Certificates with respect to which distributions of
interest or other distributions are determined but which does not represent a
Certificate Principal Balance.
"Officers' Certificate": A certificate signed by any one (or, if specified
in the Trust Agreement, more than one) Executive Officer of the applicable
Person, and delivered to the Trustee.
7
"Opinion of Counsel": A written opinion of counsel, who may, except as
otherwise expressly provided in the Trust Agreement, be counsel for the
Depositor, acceptable to the Trustee.
"Optional Exchange": An exchange of Certificates for the Underlying
Securities in accordance with Section 5.12.
"Optional Exchange Date": As defined in Section 5.12.
"Original Issue Date": As specified in the Terms Schedule.
"Outstanding": As of any date of determination, all Certificates
theretofore authenticated and delivered under the Trust Agreement, except:
(i) Certificates theretofore canceled by the Certificate Registrar or
delivered to the Trustee for cancellation; and
(ii) Certificates in exchange for or in lieu of which other Certificates
have been authenticated and delivered pursuant to the Trust Agreement, unless
proof satisfactory to the Trustee is presented that any such Certificates are
held by a bona fide purchaser in whose hands such Certificates represent
interests in the Trust.
"Pass-Through Rate": The Fixed Pass-Through Rate or Variable Pass-Through
Rate applicable to the Certificates as specified in the Terms Schedule.
"Paying Agent": As defined in Section 5.09.
"Permitted Investments": All investments made by the Trustee pursuant to
Section 3.06 shall be made in any one or more of the following; provided,
however, that the total return specified by the terms of each such obligation or
security is at least equal to the purchase price thereof; and provided, further,
that each such obligation or security shall be held in the name of the Trustee
on behalf of the Trust; and provided, further, that such obligation or security
shall be in the same currency as the currency of the Certificates:
(i) direct obligations of, and obligations fully guaranteed by, the United
States, the Federal Home Loan Mortgage Corporation, the Federal National
Mortgage Association, the Federal Farm Credit System or any agency or
instrumentality of the United States the obligations of which are explicitly
backed by the full faith and credit of the United States of America; provided
that obligations of, or guaranteed by, the Federal Home Loan Mortgage
Corporation, the Federal National Mortgage Association or the Federal Farm
Credit System shall be Permitted Investments only if, at the time, and during
the course, of investment, it has at least the credit rating of P-1 or Aaa by
Xxxxx'x, A-1+ or AAA by S&P, and, if rated by Fitch, F-1+ or AAA by Fitch;
(ii) demand and time deposits in, certificates of deposit of, or banker's
acceptances issued by any depositary institution or trust company (including the
Trustee or any agent of the Trustee acting in their respective commercial
capacities) incorporated under the laws of the United States or any State and
subject to supervision and examination by Federal and/or State banking
authorities so long as the commercial paper and/or the short-term debt
obligations of such depositary institution or trust company at the time of, and
during the course of, such investment or contractual commitment providing for
such investment have at least the credit rating of P-1 or Aaa by Xxxxx'x, A-l+
or AAA by S&P, and, if rated by Fitch, F-1+ or AAA by Fitch (or, in the case of
a depositary institution which is the principal subsidiary of a holding company,
the commercial paper or other short-term debt obligations of such holding
company have a credit rating of P-i or Aaa by Xxxxx'x, A-1+ or AAA by S&P, and,
if rated by Fitch, F-l+ or AAA by Fitch;
(iii) commercial paper having a maturity of not more than 180 days and
having at the time, and during the course, of such investment at least the
credit rating of P-1 by Xxxxx'x, A-1+ by S&P, and, if rated by Fitch, F-l+ by
Fitch; and (iv) repurchase agreements with respect to (a) any security described
in clause (i) above or (b) any other security issued or guaranteed by an agency
or instrumentality of the United States with an entity having the credit rating
of P-1 or Aaa by Xxxxx'x, A-1+ or AAA by S&P, and, if rated by Fitch, F-1+ or
AAA by Fitch. Copies of any repurchase agreement entered into will be delivered
to the Rating Agencies, if any.
In no event shall a Permitted Investment at any time constitute (a) a swap
agreement as defined in the United States Bankruptcy Code, 11 U.S.C. ss. 101 et
seq., (b) an interest-only or principal-only security or (c) a
8
liability of the Trust in excess of the principal amount invested by the
Trustee. Permitted Investments shall include, without limitation, those
investments for which the Trustee or an Affiliate of the Trustee provides
services.
"Person": Any individual, corporation, partnership, joint venture,
association, joint stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or political subdivision
thereof.
"Predecessor Certificate": With respect to any particular Certificate,
every previous Certificate evidencing all or a portion of the same interest as
that evidenced by such particular Certificate; and, for the purpose of this
definition, any Certificate authenticated and delivered under Section 5.04 in
lieu of a lost, destroyed or stolen Certificate shall be deemed to evidence the
same interest as the lost, destroyed or stolen Certificate.
"Proceeding": Any suit in equity, action at law or other judicial or
administrative proceeding.
"Rating Agencies": As specified in the Terms Schedule.
"Rating Agency Condition": With respect to any specified action or
determination, receipt by the Trustee of a confirmation from each Rating Agency
then rating the Certificates that such specified action or determination will
not result in the reduction or withdrawal of their then-current ratings on the
Certificates.
"Realized Losses": Losses attributable to principal, premium (if any) and
interest realized on an Underlying Security.
"Record Date": As specified in the Terms Schedule.
"Redenomination Date": As defined in Section 5.08.
"Registered Certificate": Any Certificate in registered form ownership of
which is evidenced by the Certificate Register.
"Reporting Issuer": A domestic corporation, limited partnership, trust,
limited liability company or other domestic organization, domestic banking
organization or domestic insurance company which is subject to the information
requirements of the Exchange Act and which, in accordance therewith, files
reports and other information with the Securities and Exchange Commission (or
another applicable agency pursuant to Section 12(1) of the Exchange Act).
"Required Percentage": With respect to any matter requiring a vote of
Holders of Certificates, the specified percentage (computed on the basis of
Outstanding Certificate Principal Balance or Notional Amount, as applicable) of
certificates of a designated class or group of classes within such series
(either voting as separate classes or as a single class) applicable to such
matter, all as specified in the Terms Schedule.
"Responsible Officer": With respect to the Trustee, any officer within the
Corporate Trust Office of the Trustee, including any Vice President, Assistant
Vice President, Secretary, Assistant Secretary or any other officer of the
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also, with respect to a particular matter, any
other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
"Retained Interest": If applicable, with respect to any Underlying
Security or other Trust Property, an ownership interest therein and a right to a
portion of the payments thereon by the obligor thereof, as specified in the
Terms Schedule, held by the Person so specified in such Terms Schedule.
"S&P": Standard & Poor's Ratings Service, a division of The XxXxxx-Xxxx
Companies, Inc.
"Scheduled Final Distribution Date": As specified in the Terms Schedule.
"Securities Act": The Securities Act of 1933, as amended, and the
applicable rules and regulations thereunder.
"Selling Agent": Unless otherwise specified in the Terms Schedule,
Commerzbank Capital Markets Corp. or any Affiliate of the foregoing designated
by it.
9
"Series": All of the Certificates issued by a particular Trust.
"Special Depositor Wind-up Event": As defined in Section 9.06.
"Specified Currency": Unless otherwise specified in the Terms Schedule,
United States Dollars.
"State": Any one of the 50 states of the United States or the District of
Columbia.
"Strip Certificates": Certificates entitled to (1) principal
distributions, with disproportionate, nominal or no interest distributions, or
(2) interest distributions, with disproportionate, nominal or no principal
distributions.
"Swap Agreement": The ISDA Master Agreement (including the Schedule
thereto and Confirmation or Confirmations thereunder and any ISDA Credit Support
Annex forming a part thereof), if any, to which the Trust is a party identified
in the Terms Schedule. In the event that the Trust shall enter into more than
one ISDA Master Agreement, "Swap Agreement" shall mean each such ISDA Master
Agreement specified in the Terms Schedule.
"Swap Amount": With respect to each Swap Payment Date, an amount, payable
by, or on behalf of, the Swap Counterparty, equal to the accrued interest or
other payment obligation calculated with reference to the Swap Notional Amount
for the immediately preceding Swap Rate Accrual Period at the Swap Rate.
"Swap Calculation Agent": The "Calculation Agent" as defined in the Swap
Agreement.
"Swap Counterparty": [Commerzbank AG], unless another Person is identified
in the Terms Schedule as the counterparty of the Trust under the Swap Agreement;
unless a successor Person shall have become the Swap Counterparty pursuant to
the applicable terms of the Swap Agreement, whether by assignment or otherwise,
and thereafter "Swap Counterparty" shall mean such Person. In the event that the
Trust shall enter into more than one Swap Agreement, "Swap Counterparty" shall
mean each counterparty of the Trust specified in the Terms Schedule.
"Swap Default": The occurrence of an "Event of Default" (as defined in the
Swap Agreement) under the Swap Agreement.
"Swap Guarantee": The guarantee (if any) identified in the Terms Schedule
of the obligations of the Swap Counterparty under the Swap Agreement. If the
Terms Schedule does not specify a swap guarantee, references to the Swap
Guarantee and the Swap Guarantor herein shall be deemed deleted.
"Swap Guarantor": The guarantor who issues and is identified in the Swap
Guarantee (if a Swap Guarantee is identified in the Terms Schedule), and, if a
successor Person shall have become the Swap Guarantor pursuant to the Swap
Guarantee, "Swap Guarantor" shall mean such successor Person.
"Swap Notional Amount": As specified in the Terms Schedule.
"Swap Payment Date": As specified in the Terms Schedule.
"Swap Rate": As specified in the Terms Schedule.
"Swap Rate Accrual Period": The Initial Swap Rate Accrual Period and each
period from and including a Swap Payment Date to but excluding the next
succeeding Swap Payment Date.
"Termination Event": As defined in the Swap Agreement.
"Termination Payment": Any amounts payable under the Swap Agreement in
accordance with its terms, whether to or by the Trust, as the case may be, in
consequence of an early termination of one or more Transactions under the Swap
Agreement.
"Terms Schedule": The schedule or schedules (which may be in the form of
Schedules I, II and III attached to Exhibit A hereto) which contains information
with respect to the particular terms of the Certificates, as well as the Swap
Agreement, the Underlying Securities and any other Trust Property.
"TIA": The Trust Indenture Act of 1939, as amended.
"Transaction": As defined in the Swap Agreement.
10
"Transfer": To sell, convey, assign, transfer, create, xxxxx x xxxx upon
and a security interest in and right of setoff against, deposit, set over,
contribute and confirm to the Trustee pursuant to the Trust Agreement; and the
terms "Transferred" and "Transferring" have the meanings correlative to the
foregoing. A Transfer of any Underlying Securities or of any other instrument
shall include all rights, powers and options (but none of the obligations) of
the Transferring party thereunder, including the first priority and continuing
right to claim for, collect, receive and give receipt for principal, premium, if
any, and interest payments in respect of such Underlying Securities and all
other moneys payable thereunder, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights and
options, to bring Proceedings in the name of the Transferring party or
otherwise, and generally to do and receive anything that the Transferring party
is or may be entitled to do or receive thereunder or with respect thereto.
"Treasury Rate": For each Interest Reset Period, the rate for the auction
held on the Treasury Rate Determination Date for such Interest Reset Period of
direct obligations of the United States ("Treasury bills") having the Index
Maturity specified in the Terms Schedule, as such rate shall be published in
H.15(519) under the heading "U.S. Government Certificates-Treasury bills-auction
average (investment)" or, in the event that such rate is not published prior to
3:00 p.m., New York City time, on the Treasury Rate Calculation Date (as defined
below) pertaining to such Treasury Rate Determination Date, the auction average
rate (expressed as a bond equivalent on the basis of a year of 365 or 366 days,
as applicable, and applied on a daily basis) on such Treasury Rate Determination
Date as otherwise announced by the United States Department of the Treasury. In
the event that the results of the auction of Treasury bills having the specified
Index Maturity are not published or reported as provided above by 3:00 p.m., New
York City time, on such Treasury Rate Calculation Date, or if no such auction is
held on such Treasury Rate Determination Date, then the "Treasury Rate" for such
Interest Reset Period shall be calculated by the Calculation Agent for such
Treasury Rate Certificate and shall be a yield to maturity (expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as applicable, and applied
on a daily basis) of the arithmetic mean of the secondary market bid rates, as
of approximately 3:30 p.m., New York City time, on such Treasury Rate
Determination Date, of three leading primary United States government securities
dealers selected by such Calculation Agent for the issue of Treasury bills with
a remaining maturity closest to the specified Index Maturity; provided, however,
that if the dealers selected as aforesaid by such Calculation Agent are not
quoting bid rates as mentioned in this sentence, then the "Treasury Rate" for
such Interest Reset Period will be the same as the Treasury Rate for the
immediately preceding Interest Reset Period (or, if there was no such Interest
Reset Period, the Initial Pass-Through Rate).
"Treasury Rate Calculation Date": With respect to any Treasury Rate
Determination Date, the first to occur of (a) the tenth calendar day after such
Treasury Rate Determination Date or, if such a day is not a Business Day, the
next succeeding Business Day or (b) the second Business Day preceding the date
any distribution of interest is required to be made following the applicable
Interest Reset Date.
"Treasury Rate Certificates": Floating Rate Certificates with a Base Rate
equal to Treasury Rate.
"Treasury Rate Determination Date": With respect to any Interest Reset
Period, the day of the week in which the Interest Reset Date for such Interest
Reset Period falls on which Treasury bills would normally be auctioned. Treasury
bills are normally sold at auction on Monday of each week, unless that day is a
legal holiday, in which case the auction is normally held on the following
Tuesday, except that such auction may be held on the preceding Friday. If, as
the result of a legal holiday, an auction is so held on the preceding Friday,
such Friday will be the Treasury Rate Determination Date pertaining to the
Interest Reset Period commencing in the next succeeding week. Unless otherwise
specified in the Terms Schedule, if an auction date shall fall on any day that
would otherwise be an Interest Reset Date for a Treasury Rate Certificate, then
such Interest Reset Date shall instead be the Business Day immediately following
such auction date.
"Treaty": As defined in Section 5.08.
"Trigger Amount": As specified in the Terms Schedule.
"Trust": The trust created by the Trust Agreement.
"Trust Administrator": As defined in Section 3.09.
"Trust Administrator Termination Events": Unless otherwise specified in
the Terms Schedule, the occurrence of any of the following:
11
(i) any failure by a trust administrator to remit to the trustee any funds
in respect of collections on the Underlying Securities and Credit Support, if
any, as required under the Trust Agreement, that continues unremedied for five
days after the giving of written notice of such failure to the Trust
Administrator by the Trustee or the Depositor, or to the Trust Administrator,
the Depositor and the Trustee by the Holders of such Certificates evidencing not
less than 25% of the Voting Rights;
(ii) any failure by a Trust Administrator duly to observe or perform in
any material respect any of its other covenants or obligations under the Trust
Agreement which continues unremedied for thirty days after the giving of written
notice of such failure to the Trust Administrator by the Trustee or the
Depositor, or to the Trust Administrator, the Depositor and the Trustee by the
Holders evidencing not less than 25% of the Voting Rights; and
(iii) events of insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings and certain actions by or on behalf of a
Trust Administrator indicating its insolvency or inability to pay its
obligations.
"Trust Agreement": As defined in the preamble hereto.
"Trust Property": As defined in Section 3.01.
"Trust Wind-up Event": As defined in Section 9.01.
"Trustee": U.S. Bank Trust National Association, or any co-trustee
appointed pursuant to Section 10.10, until a successor Person shall have become
the Trustee pursuant to the applicable terms of the Trust Agreement, and
thereafter "Trustee" shall mean such successor Person.
"Trustee Fee Letter": A letter agreement between the Trustee and the
Depositor dated on or before the Original Issue Date setting forth the fees and
expenses of the Trust and the Trustee which are subject to reimbursement by the
Depositor.
"Trustee Fees": The amount or amounts set forth in the Trustee Fee Letter.
"UCC": The Uniform Commercial Code as in effect in the relevant
jurisdiction or, with respect to the State of Louisiana, the equivalent body of
statutory and common law.
"Underlying Securities": As specified in the Terms Schedule.
"Underlying Security Accrual Period": The Initial Underlying Security
Accrual Period and each period from and including an Underlying Security Payment
Date to but excluding the next succeeding Underlying Security Payment Date.
"Underlying Security Amount": With respect to each Underlying Security
Payment Date, an amount equal to the accrued interest and/or other payment
obligation calculated with reference to the applicable Underlying Security for
the immediately preceding applicable Underlying Security Accrual Period at the
applicable Underlying Security Rate.
"Underlying Security Default": Unless otherwise specified in the Terms
Schedule, (i) the failure to pay an installment of principal of, or any amount
of interest due on, the Underlying Securities after the due date, and after the
expiration of any applicable grace period or cure period (provided, however,
that, if a Credit Support exists, then failure to pay may be modified in the
Terms Schedule) and (ii) the occurrence of any event of default relating to
bankruptcy or insolvency of the Underlying Security Issuer under the Underlying
Securities and/or the Underlying Security Indenture, as applicable. An
Underlying Security Default will be deemed to have occurred for all purposes of
the Trust Agreement notwithstanding any subsequent payment (after the default
and after any applicable grace period) of such overdue principal or interest.
"Underlying Security Indenture": The indenture, fiscal agency agreement,
or other agreement with respect to an Underlying Security which sets forth the
covenants and agreements of the Underlying Security Issuer in connection with
issuance of the Underlying Security.
"Underlying Security Issuer": As specified in the Terms Schedule.
"Underlying Security Payment Date": As specified in the Terms Schedule.
12
"Underlying Security Rate": As specified in the Terms Schedule.
"Underlying Security Trustee": As specified in the Terms Schedule, if
applicable.
"Underwriter": Each Person acting as underwriter, dealer, placement agent
or any similar capacity in connection with the initial distribution of the
Certificates.
"Underwriting Agreement": The agreement between each Underwriter and the
Trust relating to the distribution of the Certificates.
"United States": The United States of America (including the States and
the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction.
"U.S. Person": A citizen or resident of the United States, a corporation,
partnership or other entity created or organized in or under the laws of the
United States or any political subdivision thereof, an estate the income of
which is subject to United States federal income taxation regardless of its
source or a trust if (i) a U.S. court is able to exercise primary supervision
over the trust's administration and (ii) one or more U.S. persons have the
authority to control all of the trust's substantial decisions.
"Variable Pass-Through Rate": A variable Pass-Through Rate calculated by
reference to a Base Rate specified in the Terms Schedule.
"Voting Rights": With respect to any Certificate, the portion of the
voting rights of all the Certificates allocated in the manner described in the
Terms Schedule.
Certain additional defined terms have the meanings assigned thereto in
other terms hereof.
Section 1.02. Rules of Construction. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles
as in effect in the United States from time to time;
(iii) "or" is not exclusive;
(iv) the words "herein," "hereof," "hereunder" and other words of
similar import refer to the Trust Agreement as a whole and not to any
particular Article, section or other subdivision;
(v) "including" means including without limitations; and (vi) words
in the singular include the plural and words in the plural include the
singular.
Section 1.03. Article and Section References. All article and section
references used in the Trust Agreement, unless otherwise provided, are to
articles and sections in the Trust Agreement. Any reference to "this Section"
appearing within a particular paragraph of a section is a reference to such
section as a whole.
ARTICLE II
DECLARATION OF TRUST; ENTRY INTO SWAP AGREEMENT; ISSUANCE OF CERTIFICATES
Section 2.01. Creation and Declaration of Trust; Assignment of Underlying
Securities.
(a) The Depositor, concurrently with the execution and delivery of
the Trust Agreement, Transfers to the Trustee, on behalf and for the benefit of
the Holders and without recourse, all the right, title and interest of the
Depositor, including any security interest therein, in, to and under (i) the
Underlying Securities, (ii) the Certificate Account, including all income from
the investment of funds in the Certificate Account, (iii) all payments on or
under and all proceeds of any of the foregoing (including all proceeds of the
conversion thereof, voluntary or involuntary, into cash or other liquid
property, all cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, insurance proceeds,
condemnation awards, causes of action, rights to payment of any and every kind
and other forms of obligations, receivables, instruments and other
13
property which at any time constitute all or part of or are included in the
proceeds of any of the foregoing) and (iv) all other assets included or to be
included in the Trust Property; in each case except for any specified Retained
Interest.
(b) In connection with the Transfer referred to in the preceding
paragraph, the Depositor shall, not later than the Original Issue Date, (i)
deposit the Underlying Securities with the Trustee by physical delivery of such
Underlying Securities, duly endorsed, to the Trustee or cause the Underlying
Securities to be registered by book-entry in the name of the Trustee provided
that the book-entry depositary will be an agency of the United States, DTC or
another book-entry institution acceptable to the Depositor and (ii) with respect
to each such Underlying Security, deliver or cause to be delivered to the
Trustee all documents necessary to transfer such Underlying Security to the
Trustee.
(c) The Guarantor shall deliver the Swap Guarantee to the Trustee
for the benefit of the Holders.
(d) The Transfer of the Underlying Securities by the Depositor
accomplished by the Trust Agreement is absolute (other than with respect to any
Retained Interest) and is intended by the parties thereto as a sale as further
provided in Section 3.04.
Section 2.02. Entry into Swap Agreement and Underwriting Agreement. If so
specified in the Terms Schedule, concurrently with the execution of the Trust
Agreement, the Trust shall (i) execute and deliver the Swap Agreement and each
Transaction thereunder, if any, (ii) accept the Swap Guarantee, if any, and
(iii) enter into any Underwriting Agreement with each Underwriter. It shall be a
condition to the effectiveness of the Trust Agreement that the Swap Agreement be
effective as of the date of the Trust Agreement. The Trustee shall, on behalf of
the Trust, perform the obligations of the Trust under the Swap Agreement in
accordance with its terms and shall make demands under the Swap Guarantee
immediately upon obtaining notice of a payment default under the Swap Agreement
by the Swap Counterparty. The Trustee and the Depositor agree, and each Holder
by acquiring its Certificates shall be deemed to agree, that the Swap Agreement
does not represent an ownership interest in the Trust or its assets and that
none of them shall treat the Swap Agreement as an ownership interest for the
Trust for any purpose. Except as expressly set forth in this Trust Agreement and
in the Swap Agreement, the receipt by the Trustee of the Underlying Securities
and the execution by the Trustee of the Swap Agreement shall not constitute and
is not intended to result in an assumption by the Trustee or any Holder of any
obligation of the issuer of the Underlying Securities or the Swap Counterparty
or any other Person in connection with the Underlying Securities or the Swap
Agreement or under any agreements or instruments relating to any of them.
Section 2.03. Acceptance by Trustee. The Trustee will acknowledge receipt
by it of (i) the Underlying Securities and the related documents referred to in
Section 2.01, now existing or hereafter acquired, (ii) the Swap Agreement, (ii)
the Swap Guarantee and (iv) the documents specified in the Swap Agreement (in
Part 3 of the Schedule to the Master Agreement), and declares that it will hold
such assets and all other assets comprising the Trust Property in trust, for the
exclusive use and benefit of all present and future Holders and for the purposes
and subject to the terms and conditions set forth in the Trust Agreement,
including the Trustee's obligations, as and when they may arise, (I) to pay any
amount due from the Trust under the Swap Agreement, which obligations shall be
and hereby are designated to be secured, under the terms of the Swap Agreement,
by a pledge of all of the Trust Property, (II) to pay Extraordinary Trust
Expenses and (III) to make distributions to the Holders in accordance with
Section 4.01.
Section 2.04. Representations and Warranties of the Depositor. The
Depositor represents and warrants to the Trustee that as of the Original Issue
Date or as of such other date otherwise specifically provided in the Trust
Agreement:
(i) the Depositor is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware;
(ii) to the Depositor's knowledge after the inquiry, there are not
any liens or encumbrances on the Underlying Securities immediately prior
to the time of Transfer except those created by the Trust Agreement;
(iii) the execution and delivery of the Trust Agreement by the
Depositor and its performance of and compliance with the terms thereof
will not violate the Depositor's articles of
14
incorporation or By-laws or constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, or
result in the breach or acceleration of, any material contract, agreement
or other instrument to which the Depositor is a party or by which the
Depositor or any of its assets is bound;
(iv) to the Depositor's knowledge after due inquiry, the Depositor
has the full power and authority to enter into and consummate all
transactions contemplated by the Trust Agreement, has duly authorized the
execution, delivery and performance of the Trust Agreement and has duly
executed and delivered the Trust Agreement. The Trust Agreement, upon its
execution and delivery by the Depositor and assuming due authorization,
execution and delivery by the Trustee, will constitute a valid, legal and
binding obligation of the Depositor, enforceable against it in accordance
with the terms thereof, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, receivership, moratorium or other
laws relating to or affecting the rights of creditors generally, and by
general equity principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law); and
(v) to the Depositor's knowledge after due inquiry, the Depositor is
not in violation, and the execution and delivery of the Trust Agreement by
the Depositor and its performance and compliance with the terms of the
Trust Agreement will not constitute a violation, of any order decree of
any court or any order or regulation of any Federal, State, municipal or
governmental agency having jurisdiction over the Depositor or its
properties, which violation would reasonably be expected to have a
material and adverse effect on the duties and obligations of the Depositor
under the Trust Agreement.
It is understood and agreed that the representations and warranties of the
Depositor set forth in this Section shall survive delivery of the respective
documents to the Trustee and shall inure to the benefit of the Trustee on behalf
of the Holders notwithstanding any restrictive or qualified endorsement or
assignment. Upon discovery by any of the Depositor, the Swap Guarantor, or the
Trustee of a breach of any of the foregoing representations and warranties which
materially and adversely affects the interests of the Holders, the party
discovering such breach shall give prompt written notice thereof to the other
parties.
Section 2.05. Breach of Representation or Warranty. Upon the earlier of
discovery by the Depositor or receipt of notice by the Depositor of a breach of
any representation or warranty of the Depositor set forth in Section 2.04 that
materially and adversely affects the rights of the Holders to receive
distributions under the Trust Agreement when due and payable, the Depositor
shall notify the Rating Agencies of such breach. The Depositor shall cure such
breach in all material respects within ten Business Days of the earlier of
discovery by the Depositor or receipt of notice by the Depositor of such breach.
Section 2.06. Agreement to Authenticate and Deliver Certificates. The
Trustee agrees and acknowledges that it will, concurrently with the Transfer to
and receipt by it of the Underlying Securities and the Swap Guarantee and
delivery to it by the Depositor of the executed Trust Agreement and by the Swap
Counterparty of the executed Swap Agreement, cause to be executed, authenticated
and delivered to or upon the order of the Depositor, in exchange for the
Underlying Securities and such other assets constituting the Trust Property,
Certificates duly executed and authenticated by or on behalf of the Trustee in
authorized denominations evidencing ownership of the entire Trust Property, all
in accordance with the terms and subject to the conditions of Section 5.02.
ARTICLE III
TRUST POWERS; ADMINISTRATION OF THE TRUST PROPERTY
Section 3.01. Trust Property. (a) The "Trust Property" with respect to a
Trust will consist of: (i) the related Underlying Securities and all payments on
or collections in respect of such Underlying Securities due after a specified
"Cut-off Date" set forth in the Terms Schedule; (ii) all the Trustee's right,
title and interest under any Swap Agreement and any related Swap Guarantee;
(iii) all the Trustee's right, title and interest in any related Credit Support,
if any; (iv) all Permitted Investments and all funds from time to time deposited
in certain segregated accounts held by the Trustee in trust and for the benefit
of the Holders representing interests in such Trust; and (v) any other asset
described in the Terms Schedule as constituting a portion of such Trust
Property, in each case exclusive of any Retained Interest.
15
(b) The Trust Property for a given Series of Certificates and the related
Trust will not constitute Trust Property for any other Series of Certificates
and the related Trust and the Certificates of each Class of a given Series
possess an equal and ratable undivided ownership interest in such Trust
Property. The Terms Schedule may, however, specify that certain assets
constituting a part of the Trust Property relating to any given Series may be
beneficially owned solely by or deposited solely for the benefit of one Class or
a group of Classes within such Series. In such event, the other Classes of such
Series will not possess any beneficial ownership interest in those specified
assets constituting a part of the Trust Property.
Section 3.02. Administration of the Trust. (a) The Trustee shall
administer the Trust Property for the benefit of the Holders. In engaging in
such activities, the Trustee shall follow or cause to be followed collection
procedures in accordance with the terms of the Trust Agreement, the Underlying
Securities, the Swap Agreement, the indemnification offered by the Depositor
pursuant to Section 10.05(b) and the Swap Guarantee. The duties of the Trustee
shall be performed in accordance with applicable local, State and Federal law.
(b) Subject to Article X, the Trustee is hereby authorized to perform, and
from time to time hereafter, shall perform only those acts which are described
in the Trust Agreement as obligations of the Trustee. Notwithstanding the
generality of the foregoing, the Trustee is hereby specifically authorized to do
the following on behalf of the Trust: to issue the certificates evidencing
Certificates; to execute and deliver and perform its obligations and exercise
its rights under the Swap Agreement; to establish and maintain the Certificate
Account hereunder; to accept delivery of the Underlying Securities and the Swap
Agreement; to pledge the assets of the Trust (including the Underlying
Securities) to secure the obligations of the Trust including obligations under
the Swap Agreement; to sell the Underlying Securities through the Selling Agent
in accordance with Section 9.03; to make Permitted Investments pursuant to
Section 3.06; to liquidate the Trust pursuant to Article IX and to make
distributions pursuant to Article IV.
(c) Notwithstanding anything to the contrary herein, the Trust shall not
engage in any business or activities other than receiving the Underlying
Securities and any Credit Support or other Trust Property and entering into the
Swap Agreement as provided herein, holding the Underlying Securities, the Swap
Agreement and any Credit Support (or other Trust Property), issuing certificates
evidencing Certificates, making Permitted Investments in accordance with Section
3.06 and performing its obligations hereunder and under the Swap Agreement;
provided, however, that during its existence the Trust shall not engage in any
business or activity which will cause it to be or become an open-end investment
company, certificate investment trust or face-amount certificate company that is
or is required to be registered under Section 8 of the Investment Company Act,
or to be or become a closed-end investment company required to be registered,
but not registered, under the Investment Company Act.
(d) The Trustee shall not cause or permit the Trust to merger or
consolidate with any other entity and shall not sell, assign, pledge or
otherwise transfer the Underlying Securities, the Swap Agreement, any Credit
Support or other Trust Property, or any interest of the Trust therein, to any
Person or Persons, except to a successor trustee as provided in Section 10.07,
through the Selling Agent in accordance with Section 9.03, in accordance with
Section 10.02(a)(x), as required under any Swap Agreement or as otherwise
expressly permitted hereunder. This section shall not be construed to prohibit
transfers of the Certificates.
(e) The Trustee shall have the legal power to exercise all of the rights,
powers and privileges of holders of the Underlying Securities in which the
Certificates evidence an interest; provided, however, that the exercise of such
powers shall be subject to the provisions of this Section 3.02, Article X and
the other provisions hereof. However, neither the Trustee (except as
specifically provided herein or in the TIA) nor the Depositor shall be under any
obligation whatsoever to appear in, prosecute or defend any action, suit or
other proceeding in respect of Underlying Securities or Certificates.
(f) Except for actions expressly authorized by the Trust Agreement, the
Trustee shall not take actions reasonably likely to (nor fail to take actions,
if such failure would be reasonably likely to) (i) impair the interests of the
Trust in any Underlying Security, any Credit Support, the Swap Agreement or the
Swap Guarantee (or any other Trust Property); (ii) impair the value of any
Underlying Security, any Credit Support, the Swap Agreement or the Swap
Guarantee (or any other Trust Property); (iii) alter the classification of a
Trust for U.S. federal income tax purposes or (iv) cause or permit the Trust to
merge or consolidate with any other party.
(g) Except as expressly provided in the Trust Agreement, the Trustee shall
have no power to vary the corpus of the Trust Property including by (i)
accepting any substitute obligation or asset for an Underlying Security
16
or any Credit Support, (ii) entering into any amendment or modification of the
Swap Agreement or the Underlying Securities, (iii) accepting any substitute
guarantee for the Swap Guarantee, (iv) adding any other investment, obligation
or security to the Trust Property, (v) withdrawing from the Trust Property any
Underlying Securities or Credit Support, (vi) terminating the Swap Agreement
except in accordance with its terms or (vii) rejecting or otherwise failing to
accept the continuing benefits of the Swap Guarantee.
Section 3.03. Collection of Certain Underlying Security Payments. The
Trustee shall make reasonable efforts to collect all payments required to be
made pursuant to the terms of the Underlying Securities in a manner consistent
with the terms of the Trust Agreement and such Underlying Securities.
Section 3.04. Sale. The parties hereto agree and intend that the Transfer
of Underlying Securities, the Swap Agreement and all proceeds of any of the
foregoing shall be treated as a sale and purchase by the Trust and not a loan or
a pledge to secure a loan. If for any reason such Transfer is deemed to be a
loan or a pledge to secure a loan, the parties intend that the Trust Agreement
shall be a security agreement pursuant to which there shall be deemed to have
been granted to the Trustee a security interest in all right, title and interest
in the Underlying Securities, the Swap Agreement and all proceeds of any of the
Trust Property granted in favor of the Swap Counterparty pursuant to the Swap
Agreement and to the obligation of the Trust to pay Extraordinary Trust
Expenses. If the Trust terminates prior to the satisfaction of the claims of any
Holder under any Certificate, the security interest created hereby shall
continue in full force and effect and the Trustee shall be deemed to be the
collateral agent for the benefit of such Holder, subject to the prior security
interest of the Swap Counterparty under the Swap Agreement and to the terms of
the Trust Agreement.
Section 3.05. Certificate Account. (a) The Trustee shall establish and
maintain one or more Eligible Accounts (collectively, the "Certificate
Account"), held in trust for the benefit of the Holders, subject to the security
interest in all of the Trust Property granted in favor of the Swap Counterparty
pursuant to the Swap Agreement and the obligation of the Trust to pay
Extraordinary Trust Expenses. The Trustee, on behalf of the Holders, shall
possess all right, title and interest in all funds on deposit from time to time
in the Certificate Account and in all proceeds thereof, subject to the security
interest in all of the Trust Property granted in favor of the Swap Counterparty
pursuant to the Swap Agreement and the obligation of the Trust to pay
Extraordinary Trust Expenses. The Certificate Account shall be under the sole
dominion and control of the Trustee. The Trustee shall deposit or cause to be
deposited in the Certificate Account all amounts collected with respect to the
Underlying Securities, Swap Agreement and the Swap Guarantee including:
(i) all payments received by the Trustee on account of principal of
the Underlying Securities;
(ii) all payments received by the Trustee on account of interest (if
any) on the Underlying Securities;
(iii) all payments received by the Trustee on account of premium (if
any) on the Underlying Securities;
(iv) all Swap Amounts and all other payments, if any, received by
the Trustee on account of the Swap Agreement;
(v) all payments under the Credit Support;
(vi) any payments under any other assets deposited with the Trust;
(vii) the Certificate Principal Balance, if applicable;
(viii) all payments received by the Trustee on account of the Swap
Guarantee; and (vii) it is understood and agreed that payments in the
nature of prepayment or redemption penalties, late payment charges or
assumption fees which may be received by the Trustee shall be deposited by
the Trustee in the Certificate Account and shall not be retained by the
Trustee for its own account.
If, at any time, a formerly Eligible Account no longer fulfills the
definition of Eligible Account, the Trustee shall within five Business Days or
by the next Distribution Date, whichever comes earlier, establish a new
Certificate Account meeting the conditions specified above and transfer any cash
and any investments on deposit in
17
the Certificate Account to such new Certificate Account, and from the date such
new Certificate Account is established, it shall be the Certificate Account.
(b) The Trustee shall give notice to the Depositor and the Rating
Agencies of the location of each Eligible Account constituting the Certificate
Account prior to any change thereof.
Section 3.06. Investment of Funds in the Accounts. The Depositor, on
behalf of the Trust, may direct in writing the Trustee or any depositary
institution maintaining the Certificate Account, if any, and any other
segregated account the contents of which are held for the benefit of the Trust
(each, an "Account") to invest the funds therein in one or more Permitted
Investments bearing interest or sold at a discount, which shall be held to
maturity unless payable on demand. If the Depositor does not provide any
investment directions to the Trustee, then the Trustee shall invest funds held
in any Account in the Permitted Investments specified in clause (i) of the
definition thereof upon receipt of such funds. Such funds shall be invested in
Permitted Investments that will mature at least one calendar day prior to the
next Distribution Date; provided, however, that, unless otherwise specified in
the Terms Schedule, the total number of obligors in respect of Permitted
Investments, Underlying Securities, Swap Agreements, Credit Support and other
Deposited Assets shall not exceed ten.
Section 3.07. Retained Interest. The Retained Interest, if any, in any
Underlying Security or other Trust Property shall initially be held by the
Person so specified in the Terms Schedule and to the extent specified therein.
The Retained Interest will be established on an asset-by-asset basis. With
respect to each Underlying Security, unless otherwise specified in the Terms
Schedule, the Retained Interest shall be deducted by the Trustee from applicable
collections in respect of such Underlying Security or other Trust Property.
Unless otherwise provided in the Terms Schedule, collections in respect of
Retained Interest shall not be deposited in the Certificate Account and shall
not constitute a part of the Trust, but shall instead be distributed to the
holder of such Retained Interest; provided, however, that the Terms Schedule
with respect to which there is a Retained Interest may provide that commingled
amounts received in respect of Underlying Securities and the related Retained
Interest may initially be deposited in separate and discrete accounts
established by the Trustee. Unless otherwise provided in the applicable
prospectus supplement and in the Terms Schedule, any partial recovery of
interest on a Deposited Asset, after deduction of all applicable administration
fees, will be allocated between the Retained Interest (if any) and interest
distributions to Holders on a pari passu basis.
Section 3.08. Access to Certain Documentation. The Trustee shall provide
to any Federal, State or local regulatory authority that may exercise authority
over the Depositor, the Swap Counterparty, the Swap Guarantor or any Holder
access to the documentation regarding the Underlying Securities, the Swap
Agreement and the Swap Guarantee required by applicable laws and regulations.
Such access shall be afforded without charge, but only upon reasonable request
and during normal business hours at the offices of the Trustee designated by it.
In addition, access to the documentation regarding the Underlying Securities,
the Swap Agreement and the Swap Guarantee will be provided to the Depositor, the
Swap Counterparty, the Swap Guarantor or any Holder upon reasonable request
during normal business hours at the offices of the Trustee designated by it at
the expense of the Person requesting such access.
Section 3.09. Trust Administrator.
(a) If specified in the Terms Schedule, the Trustee shall appoint a
Trust Administrator for the Trust (the "Trust Administrator"). The entity
serving as the Trust Administrator may be the Trustee, the Depositor,
[Commerzbank Capital Markets Corp.], an affiliate of any of them, the Deposited
Asset Provider or any third party and may have other normal business
relationships with the trustee, Comcertz ABS Corporation, their affiliates or
the Deposited Asset Provider. The Trust Administrator shall perform such duties,
shall have such obligations and shall be entitled to such compensation each as
is specified in the Terms Schedule and/or such other trust administrator
agreement by and between the Trustee and the Trust Administrator.
(b) If any document in respect of any of the Deposited Assets is
found to be missing or defective in any material respect, the trustee (or such
custodian) will immediately notify the Trust Administrator, if any, and
Depositor, and the Trust Administrator, if any, and the trustee will immediately
notify the relevant person who sold the applicable Deposited Asset to Depositor
(a "Deposited Asset Provider"). If and to the extent specified in the applicable
prospectus supplement and the Terms Schedule attached hereto, the Deposited
Asset Provider cannot cure such omission or defect within 60 days after receipt
of notice, the Deposited Asset Provider will be obligated, within 90 days of
receipt of notice, to repurchase the related Deposited Asset from the trustee at
the
18
Purchase Price (as defined below) or provide a substitute for the Deposited
Asset. The Trust Administrator, if any, or otherwise the trustee is obligated to
use its best efforts to enforce such obligation, provided, however, that,
neither such Trust Administrator nor Depositor will be obligated to repurchase
or substitute for such Deposited Asset if the Deposited Asset Provider defaults
on its obligation. Unless otherwise specified in the applicable Prospectus
Supplement and the Terms Schedule attached hereto, when applicable, this
repurchase or substitution obligation constitutes the sole remedy available to
the certificateholders or the trustee for omission of, or a material defect in,
or failure to provide, a constituent document.
(c) The Trustee is not accountable for the use or application by or
on behalf of any Trust Administrator of any funds paid to the Trust
Administrator or its designee in respect of such Certificates or the Deposited
Assets, or deposited into or withdrawn from the related Certificate Account or
any other account by or on behalf of the Trust Administrator.
(d) The Trust Administrator may resign from its obligations and
duties under the Trust Agreement with respect to any series of Certificates only
if such resignation, and the appointment of a successor, will not result in a
withdrawal or downgrading of the rating of any class of Certificates of such
series, or upon a determination that its duties under the Trust Agreement with
respect to such series are no longer permissible under applicable law. No
resignation will become effective until the trustee or a successor has assumed
the Trust Administrator's obligations and duties under the Trust Agreement with
respect to such series.
(e) Neither a Trust Administrator, the Depositor nor any director,
officer, employee, or agent of the Trust Administrator or the Depositor will
incur any liability to the related Trust or Holders for any action taken, or for
refraining from taking any action, in good faith pursuant to the trust agreement
or for errors in judgment; provided, however, that none of the Trust
Administrator, the Depositor nor any such person will be protected against any
liability that would otherwise be imposed by reason of willful misfeasance, bad
faith or gross negligence in the performance of duties thereunder or by reason
of reckless disregard of obligations and duties thereunder. The trust agreement
will further provide that, unless otherwise provided in the Terms Schedule, a
Trust Administrator, the Depositor and any director, officer, employee or agent
of the Trust Administrator or the Depositor will be entitled to indemnification
by the Trust and will be held harmless against any loss, liability or expense
incurred in connection with any legal action relating to the trust agreement or
the certificates, other than any loss, liability or expense incurred by reason
of willful misfeasance, bad faith or gross negligence in the performance of
duties thereunder or by reason of reckless disregard of obligations and duties
thereunder. In addition, the Trust Agreement will provide that neither a Trust
Administrator nor the Depositor will be under any obligation to appear in,
prosecute or defend any legal action which is not incidental to their respective
responsibilities under the trust agreement or which in its opinion may cause it
to incur any expense or liability. Each of the Trust Administrator or the
Depositor may, however, in its discretion undertake any action which it may deem
necessary or desirable with respect to the Trust Agreement and the rights and
duties of the parties thereto and the interests of the Holders thereunder.
(f) Any person into which a Trust Administrator may be merged or
consolidated, or any person resulting from any merger or consolidation to which
a Trust Administrator is a part, or any person succeeding to the business of a
Trust Administrator, will be the successor of the Trust Administrator under the
trust agreement with respect to the certificates of any given series.
Section 3.10. Trust Administrator and Trustee Advances.
(a) Either the Trust Administrator or Trustee may, to the extent of
and pursuant to the Terms Schedule, and pursuant to this Section, but shall have
no obligation to make advances with respect to collections on the Deposited
Assets or in favor of the Holders.
(b) Unless otherwise provided in the applicable Prospectus
Supplement and the Terms Schedule, advances of a Trust Administrator's or
Trustee's funds will be reimbursable only out of related recoveries on the
Deposited Assets (and amounts received under any form of credit support) for
such series with respect to which such advances were made (as to any Deposited
Assets, "Related Proceeds"); provided, however, that any advance will be
reimbursable from any amounts in the Certificate Account for the series to the
extent that the Trust Administrator or Trustee shall determine, in its sole
judgment, that the advance (a "Nonrecoverable Advance") is not ultimately
recoverable from Related Proceeds. If advances have been made by the Trust
Administrator or Trustee from excess funds in the Certificate Account for any
series, the Trust Administrator or Trustee will replace
19
the funds in such Certificate Account on any future Distribution Date to the
extent that funds in the Certificate Account on the Distribution Date are less
than payments required to be made to certificateholders on such date. If so
specified in the applicable Prospectus Supplement and the Terms Schedule, the
obligations, if any, of a Trust Administrator or Trustee to make advances may be
secured by a cash advance reserve fund or a surety bond. If applicable,
information regarding the characteristics of, and the identity of any obligor
on, any such surety bond, will be set forth in the applicable Prospectus
Supplement and the Terms Schedule.
Section 3.11. Trust Administrator Termination Event Remedies. Unless
otherwise specified in the applicable prospectus supplement and the Terms
Schedule, so long as a Trust Administrator Termination Event under the trust
agreement with respect to a given series of Certificates remains unremedied, the
Depositor or the Trustee may, and at the direction of Holders of such
Certificates evidencing not less than the Required Percentage of the Voting
Rights, the Trustee will, terminate all the rights and obligations of the Trust
Administrator under the trust agreement relating to the applicable trust and in
and to the related Deposited Assets (other than any Retained Interest of such
Trust Administrator). The Trustee will then succeed to all the responsibilities,
duties and liabilities of the Trust Administrator under the trust agreement with
respect to such series (except that if the Trustee is prohibited by law from
obligating itself to make advances regarding delinquent Deposited Assets, then
the Trustee will not be so obligated) and will be entitled to similar
compensation arrangements. In the event that the Trustee is unwilling or unable
to act, it may or, at the written request of the Holders of such Certificates
evidencing not less than the Required Percentage of the Voting Rights, it will
appoint, or petition a court of competent jurisdiction for the appointment of,
an administration agent acceptable to the rating agency with a net worth at the
time of such appointment of at least $15,000,000 to act as successor to such
Trust Administrator under the trust agreement with respect to such series.
Pending such appointment, the Trustee is obligated to act in such capacity
(except that if the Trustee is prohibited by law from obligating itself to make
advances regarding delinquent Deposited Assets, then the Trustee will not be so
obligated). The Trustee and any such successor may agree upon the compensation
be paid to such successor, which in no event may be greater than the
compensation payable to such Trust Administrator under the trust agreement with
respect to such series.
ARTICLE IV
DISTRIBUTIONS AND REPORTS TO CERTIFICATEHOLDERS
Section 4.01. Distributions. On each Distribution Date for the
Certificates (including the Scheduled Final Distribution Date), the Trustee
shall distribute the pro rata portion of the Available Funds in the Certificate
Account allocable to each Holder, as further set forth in the Trust Agreement.
Distributions allocable to principal, premium (if any) and interest on the
Certificates will be made in the Specified Currency for such Certificates by or
on behalf of the trustee on each Distribution Date as specified in the Terms
Schedule and the amount of each distribution will be determined as of the close
of business on the Determination Date.
Section 4.02. Reports to Holders. (a) On each Distribution Date, the
Trustee shall forward or cause to be forwarded to the Depositor, the Rating
Agency, if any, and each Holder a statement setting forth:
(i) the amount of such distribution to Holders of such class
allocable to principal of or interest or premium, if any, on the
Certificates of such class; and the amount of aggregate unpaid interest as
of such Distribution Date;
(ii) in the case of Certificates with a Variable Pass-Through Rate,
the Pass-Through Rate applicable to such Distribution Date, as calculated
in accordance with the method specified in the Terms Schedule;
(iii) the amount of compensation received by the Trust
Administrator, if any, and the Trustee for the period relating to such
Distribution Date, and such other customary information as the Trust
Administrator, if any, or otherwise the Trustee deems necessary or
desirable to enable Holders to prepare their tax returns;
(iv) if the Terms Schedule provides for advances, the aggregate
amount of advances included in such distribution, and the aggregate amount
of unreimbursed advances at the close of business on such Distribution
Date;
20
(v) the aggregate stated principal amount or, if applicable,
notional amount of the Underlying Securities and the current interest rate
thereon at the close of business on such Distribution Date;
(vi) the aggregate Certificate Principal Balance or aggregate
Notional Amount, if applicable, of each class of Certificates (including
any class of Certificates not offered hereby) at the close of business on
such Distribution Date, separately identifying any reduction in such
aggregate Certificate Principal Balance or aggregate Notional Amount due
to the allocation of any Realized Losses or otherwise;
(vii) as to any series (or class within such series) for which
Credit Support has been obtained, the amount of coverage of each element
of Credit Support included therein as of the close of business on such
Distribution Date; and
(viii) any additional information relevant to the Holders as
specified in the Terms Schedule.
(b) In the case of information furnished with respect to the amounts
of distributions or the amounts of compensation of the Trust Administrator and
the Trustee, the amounts shall be expressed as a U.S. dollar amount (or
equivalent thereof in any other Specified Currency) per minimum denomination of
Certificates or for such other specified portion thereof. Within a reasonable
period of time after the end of each calendar year, the Trust Administrator or
the Trustee, as provided in the applicable Prospectus Supplement, shall furnish
to each person who at any time during the calendar year was a Holder a statement
containing the information set forth above with respect to the amounts of
distributions or the amounts of compensation of the Trust Administrator and the
Trustee, aggregated for such calendar year or the applicable portion thereof
during which such person was a Holder. Such obligation of the Trust
Administrator or the Trustee, as applicable, shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Trust Administrator or the Trustee, as applicable, pursuant to
any requirements of the Code as are from time to time in effect.
(c) At any time when the Trust is not subject to Section 13 or 15(d)
of the Exchange Act, upon request to the Trustee by a Holder or a prospective
purchaser from a Holder of the information required by Rule 144A(d)(4)(i) of the
Securities Act, the Trustee shall promptly notify the Depositor of such request,
and the Depositor shall promptly thereafter provide such information to the
Trustee, and the Trustee shall furnish such information to such Holder or
prospective purchaser, provided, that for purposes of this Section 4.02(c), the
information required by Rule 144A(d)(4)(i) shall be as interpreted in Release
No. 33-6862, Part D, i.e., basic, material information concerning the structure
of the Trust, the Certificates and distributions in respect thereof, and the
nature and performance of the Underlying Securities, the Swap Agreement and any
other assets of the Trust.
(d) The Trustee will deliver to Holders copies of all notices and
communications it receives from each Underlying Security Issuer, including
notice of any call of the Underlying Securities by the Underlying Security
Issuer. The Trustee will also notify the Holders of any call of the Underlying
Securities by a Swap Counterparty under the terms of a Swap Agreement.
(e) If so specified in the Terms Schedule commencing on a certain
date and on or before a specified date in each year thereafter, a firm of
independent public accountants will furnish a statement to the Trustee to the
effect that such firm has examined certain documents and records relating to the
administration of the Trust Property during the related 12-month period (or, in
the case of the first such report, the period ending on or before the date
specified in the Terms Schedule, which date shall not be more than one year
after the related original issue date with respect to such Certificates) and
that, on the basis of certain agreed upon procedures considered appropriate
under the circumstances, such firm is of the opinion that such administration
was conducted in compliance with the terms of the Trust Agreement, except for
such exceptions as such firm shall believe to be immaterial and such other
exceptions and qualifications as shall be set forth in such report.
(f) The Terms Schedule may also provide for delivery to the
Depositor and the Trustee on behalf of the Holders, on or before a specified
date in each year, of an annual statement signed by two officers of the Trustee
to the effect that the Trustee has fulfilled its obligations under the Trust
Agreement throughout the preceding year with respect to any Series of
Certificates. Copies of the annual accountants' statement, if any, and the
statement of officers of the Trustee may be obtained by Holders without charge
upon written request to the Trustee.
21
(g) If the Terms Schedule provides the Certificates are subject to
the right of one or more specified Persons to purchase all or a portion of the
Certificates of a given Series (a "Call Option") and designates such Series a
"Callable Series," then after receiving notice of the exercise of such a call
right, the Trustee will provide notice thereof as provided in the Terms
Schedule. The Trustee and the Depositor agree, and each Holder by acquiring its
Certificates shall be deemed to agree, that the Call Option does not represent
an ownership interest in the Trust or its assets and that none of them shall
treat the Call Option as an ownership interest in the Trust for any purpose.
(h) If required by TIA Section 313(a), within 60 days after December
31 of each year, the Trustee shall mail to (i) each Holder as required by TIA
Section 313(c) and (ii) the Depositor, a brief report dated as of such date that
complies with TIA Section 313(a). The Trustee also shall comply with TIA Section
313(b). A copy of any report delivered pursuant to this Section 4.02(h) shall,
at the time of its mailing to Holders and the Depositor, be filed by the Trustee
with the Commission and each stock exchange, if any, on which the Certificates
are listed. The Depositor shall notify the Trustee if and when the Certificates
are listed on any stock exchange.
Section 4.03. Calculation of Pass-Through Rates.
(a) Unless otherwise specified in the Terms Schedule, the
Pass-Through Rate applicable to the Certificates will be the equivalent rate
applicable to payments received by the Trust under the Underlying Securities or
any related Swap Agreement (as determined by the Swap Calculation Agent).
(b) Unless otherwise specified in the Terms Schedule, interest on
Fixed Rate Certificates will be computed on the basis of a 360-day year of
twelve 30-day months. With respect to a Floating Rate Certificate, accrued
interest shall be calculated by multiplying the Certificate Principal Balance of
such certificate (or, in the case of a Strip Certificate with no or a nominal
Certificate Principal Balance, the Notional Amount specified in the Terms
Schedule) by an accrued interest factor. Such accrued interest factor will be
computed by adding the interest factors calculated for each day in the period
for which accrued interest is being calculated. Unless otherwise specified in
the Terms Schedule, the interest factor (expressed as a decimal calculated to
seven decimal places without rounding) for each such day is computed by dividing
the Pass-Through Rate in effect on such day by 360, in the case of LIBOR
Certificates, Commercial Paper Rate Certificates, Federal Funds Rate
Certificates and CD Rate Certificates or by the actual number of days in the
year, in the case of Treasury Rate Certificates.
(c) If the Terms Schedule specifies a Calculation Agent, the
Calculation Agent shall calculate the Pass-Through Rate applicable to the
Certificates from time to time as specified in the Terms Schedule. All
determinations of interest by the Calculation Agent hereunder shall, in the
absence of manifest error, be conclusive for all purposes and binding on the
holders of Certificates. Each of the protections, releases, indemnities and
other terms applicable to the Trustee under Section 10.01, 10.02, 10.03 and
10.05 shall apply to the Calculation Agent in connection with its actions as
Calculation Agent for the Trust.
Section 4.04. Compliance with Tax Reporting and Withholding Requirements.
Unless otherwise specified in the Terms Schedule, the Trustee shall file or
cause to be filed, within the time limits established by law, federal and state
income tax returns and information statements as a grantor trust for each of
Trust's taxable years. The Trust's taxable year shall be the calendar year.
Notwithstanding any other provision of the Trust Agreement to the contrary, the
Trustee shall comply with all Federal withholding requirements respecting
distributions to, or receipts of amounts on behalf of, Holders and pursuant to
the Swap Agreement that the Trustee reasonably believes are applicable under the
Code. The consent of Holders shall not be required for such withholding. In the
event the Trustee does withhold any amount from interest or original issue
discount distributions thereof to any Holder pursuant to Federal withholding
requirements, the Trustee shall indicate in the statement required pursuant to
Section 4.02 the amount so withheld.
Section 4.05. Preservation of Information, Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Holders contained in the
most recent list furnished to the Trustee and the names and addresses of Holders
received by the Trustee in its capacity as Certificate Registrar. The Trustee
may destroy any list furnished to it as provided upon receipt of a new list.
(b) Holders shall have the right to communicate pursuant to TIA
Section 312(b) with other Holders with respect to their rights under this
Agreement or under the Certificates.
22
(c) Irrespective of whether the TIA shall apply to this Agreement,
the Depositor, the Trustee, the Paying Agent and the Certificate Registrar shall
have the protections provided pursuant to TIA Section 312(c).
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates. (a) The Certificates may be issued in the
form of and be represented by definitive certificates substantially in the form
of Exhibit B hereto (a "Certificate") or by one or more Global Securities.
Certificates will be issued in denominations specified in the applicable Terms
Schedule, but in no event will Certificates denominated in U.S. dollars be
issued in denominations less than $1,000 and in integral multiples of $1 in
excess thereof; provided, however, that, if in-kind distributions of Underlying
Securities shall be permitted under the Terms Schedule, the minimum
denominations of the Certificates shall not be smaller than the largest minimum
denomination of the Underlying Securities (unless otherwise expressly provided
in the Terms Schedule). The authorized denomination of Certificates having a
Specified Currency other than U.S. dollars will be set forth in the applicable
Terms Schedule. All Certificates of the same Class shall be identical in all
respects except for the denominations thereof. All Certificates issued under the
Trust Agreement shall be in all respects equally and ratably entitled to the
benefits thereof without preference, priority or distinction on account of the
actual time or times of authentication and delivery, all in accordance with the
Terms Schedule. No additional interests in the Trust other than the Certificates
shall be issued hereunder, except in accordance with Section 5.04. The
Certificates in the aggregate may be subject, to the extent provided in the
Terms Schedule, to a Call Option.
(b) The Certificates issued under a Trust Agreement may be limited to a
single class, or, if so specified in the Terms Schedule, a Series of
Certificates may include two or more Classes differing as to entitlement to
distributions of principal, interest or premium and one or more Classes may be
subordinated in certain respects to other Classes of such Series with respect to
allocation of losses arising from any defaults with respect to the Trust
Property.
Each Series and Class of Certificates may be issued as Registered
Certificates, in definitive form or as one or more Global Securities. Unless
otherwise specified in the Terms Schedule, all Certificates of a given Series
(or, if more than one Class exists, any given Class within that Series) will,
upon issuance, be represented by one or more Global Securities that will be
deposited with, or on behalf of, DTC (only for Registered Certificates
denominated and payable in U.S. dollars), Euroclear, Clearstream, Luxembourg or
another Depositary. Global Securities may be issued in registered form and in
either temporary or permanent form. Global Securities representing Registered
Certificates will be registered in the name of a nominee of the Depositary, and
will clear and settle in book-entry form only through the facilities of one or
more Depositaries. Unless and until it is exchanged in whole or in part for the
individual Certificates represented thereby, a Global Security may not be
transferred except as a whole by the Depositary for such Global Security to a
nominee of such Depositary or by a nominee of such Depositary to such Depositary
or another nominee of such Depositary or by such Depositary or any such nominee
to a successor of such Depositary or a nominee of such successor.
Section 5.02. Execution, Authentication and Delivery. (a) The Certificates
shall be executed on behalf of the Trust by the Trustee by its President, its
Treasurer, or one of its Vice Presidents, Assistant Vice Presidents or Trust
Officers. The signature of any of these officers may be manual or facsimile.
Certificates bearing the manual or facsimile signature of individuals who were
at any time the proper officers of the Trustee shall be binding, notwithstanding
that such individuals or any of them have ceased to hold such offices prior to
the authentication and delivery of such Certificates or did not hold such
offices at the date of such Certificates.
(b) The Trustee shall not be required to authenticate any
Certificates if the issuance of such Certificates pursuant to the Trust
Agreement will adversely affect the Trustee's own rights, duties or immunities
under the Trust Agreement.
(c) Each Certificate shall be dated as of the date of its
authentication.
(d) Subject to Section 5.10(c), no Certificate shall be entitled to
any benefit under the Trust Agreement or be valid or obligatory for any purpose,
unless there appears on such Certificate a certificate of authentication
substantially in the form as contained in the form of Certificate attached to
the Trust Agreement as Exhibit B executed by the Trustee by the manual signature
of one of its authorized signatories, and such certificate
23
upon any Certificate shall be conclusive evidence, and the only evidence, that
such Certificate has been duly authenticated and delivered under the Trust
Agreement and is entitled to the benefits of the Trust Agreement. Any
Certificate duly authenticated and delivered to the Depositor under the Trust
Agreement shall be fully paid and non-assessable for all purposes.
Section 5.03. Registration; Registration of Transfer and Exchange.
(a) The Trustee shall cause to be kept a register for Registered
Certificates (the registers maintained in such office and in any other office or
agency of the Trustee from which distributions are made being herein sometimes
collectively referred to as the "Certificate Register") in which, subject to
such reasonable regulations as it may prescribe, a transfer agent and registrar
(which may be the Trustee) (the "Certificate Registrar") shall provide for the
registration of Registered Certificates and the registration of transfers and
exchanges of Registered Certificates. The Trustee is hereby initially appointed
Certificate Registrar for the purpose of registering Registered Certificates and
transfers and exchanges of Registered Certificates as herein provided and the
Trustee shall remain Certificate Registrar for such purposes until the earlier
to occur of (i) the appointment by the Depositor of a different Certificate
Registrar, (ii) the resignation or termination of the Trustee and appointment of
a successor trustee in accordance with Section 10.07, in which case such
successor trustee shall assume the duties of Certificate Registrar and (iii) the
termination of the Trust and discharge of the Trustee's obligations under the
Trust Agreement in accordance with the applicable terms of Articles IX and XI;
provided, however, that the Trustee may appoint one or more Co-Certificate
Registrars. Upon any resignation of any Certificate Registrar appointed by the
Depositor pursuant to clause (i) above, the Trustee shall promptly appoint a
successor or, in the absence of such appointment, assume the duties of
Certificate Registrar.
Upon (i) the appointment by the Depositor of a Person other than the
Trustee as Certificate Registrar, (ii) the appointment of any Co-Certificate
Registrar or (iii) any change in the identity of the Certificate Registrar or
any Co-Certificate Registrar, the Depositor will in each case give each of the
Trustee and each Rating Agency, if any, written notice within three Business
Days of any such appointment or change and of the location, and any change in
the location, of the Certificate Register, and the Trustee shall have the right
to rely upon a certificate executed on behalf of the Certificate Registrar by an
Executive Officer thereof as to the names and addresses of the Holders of the
Registered Certificates and the principal amounts and numbers of such Registered
Certificates.
Upon surrender for registration of transfer of any Registered Certificate
at the office or agency of the Trustee, if the requirements of Section 8-401(1)
of the Uniform Commercial Code are met to the Trustee's satisfaction, and
subject to the transfer restrictions set forth in Section 5.11 hereof, the
Trustee shall execute, authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Registered Certificates of any
authorized denominations, of a like aggregate Certificate Principal Balance. All
transfers of Registered Certificates are subject to the approval of the Trustee
and the Trustee shall not register any transfer of Registered Certificates if
such transfer would violate any provision of the Trust Agreement.
(b) At the option of the Holder, Registered Certificates may be
exchanged for other Registered Certificates of any authorized denomination or
denominations of like tenor and aggregate Certificate Principal Balance upon
surrender of the Registered Certificates to be exchanged at the office or agency
of the Trustee maintained for such purpose. Whenever any Registered Certificates
are so surrendered for exchange, the Trustee shall execute, authenticate and
deliver the Registered Certificates that the Holder making the exchange is
entitled to receive.
All Registered Certificates issued upon any registration of transfer or
exchange of Certificates shall constitute complete and indefeasible evidence of
ownership in the Trust Property and be entitled to the same benefits under the
Trust Agreement as the Certificates surrendered upon such registration of
transfer or exchange.
(c) Every Registered Certificate presented or surrendered for
registration of transfer or exchange shall (if so required by the Trustee or the
Certificate Registrar) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar, duly executed, by the Holder thereof or his attorney duly authorized
in writing, with such signature guaranteed by a commercial bank or trust company
located, or having a correspondent located, in The City of New York or the city
in which the Corporate Trust Office is located, or by a member firm of a
national securities exchange, and such other documents as the Trustee may
require.
24
No service charge shall be made to a Holder for any registration of
transfer or exchange of Certificates, but the Trustee may require payment by the
Holders of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Certificates.
Section 5.04. Mutilated, Destroyed, Lost and Stolen Certificates. If (i)
any mutilated Certificate is presented to the Depositor and the Trustee or (ii)
the Depositor and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Certificate, and there is delivered to the
Depositor and the Trustee such security or indemnity as they may require to save
each of them and any Paying Agent harmless, and neither the Depositor nor the
Trustee receives notice that such Certificate has been acquired by a bona fide
purchaser, then, in each case, the Trustee, shall execute, authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like tenor, form, terms and principal
amount, bearing a number not contemporaneously Outstanding, so that neither gain
nor loss in interest shall result from such exchange or substitution.
Upon the issuance of any new Certificate under this Section, the Trustee
may require the payment by the Holder of a sum sufficient to cover any tax or
other governmental charge that may be imposed in respect thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Certificate issued pursuant to this Section shall constitute
complete and indefeasible evidence of ownership in the Trust Property, whether
or not the destroyed, lost or stolen Certificate shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of the Trust
Agreement equally and proportionately with any and all other Certificates, if
any, duly issued thereunder.
The terms of this Section are exclusive and shall preclude (to the extent
lawful) all other rights and remedies with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Certificates.
Section 5.05. Distributions in Respect of Certificates. (a) Any per
Certificate amount in respect of a Registered Certificate that is payable and is
punctually paid or duly provided for on any Distribution Date or any other date
shall be distributed to the Person in whose name such Registered Certificate (or
one or more Predecessor Certificates) is registered at the close of business on
the related Record Date notwithstanding the cancellation of such Registered
Certificate upon any transfer or exchange subsequent to such related Record
Date. Distributions on Registered Certificates shall be made, in accordance with
arrangements satisfactory to the Trustee, by wire transfer to an account
designated in writing by a Holder, or, in the case of distributions of
Underlying Securities in kind, by delivery of such Underlying Securities to any
DTC or other depositary account designated in writing by a Holder, or, if such
arrangements with respect to any Holder are not so made no later than 15
calendar days prior to the applicable Distribution Date, at the Corporate Trust
Office (with respect to the final distribution and distributions in kind of
Underlying Securities) or by check mailed to the address of the Person entitled
thereto as such address shall appear in the Certificate Register.
(b) Subject to the foregoing terms of this Section, each Certificate
delivered under the Trust Agreement upon transfer of or in exchange for or in
lieu of any other Certificate shall carry the rights to amounts to be
distributed that are accrued and undistributed, and to accrue, that were carried
by such other Certificate.
Section 5.06. Persons Deemed Owners. Subject to Section 5.05 and except
for the final distribution, the Depositor and the Trustee and any agent of the
Depositor or the Trustee may treat the Person in whose name any Registered
Certificate is registered as the owner of such Certificate on the related Record
Date for the purpose of receiving distributions of principal of (and premium, if
any) and (subject to Section 5.05) interest, if any, on such Certificate and for
all other purposes whatsoever, whether or not such Certificate be overdue, and
neither the Depositor, the Trustee, nor any agent of the Depositor or the
Trustee shall be affected by notice to the contrary. All distributions made to
any such Holder, or upon his order, shall be valid, and, to the extent of the
sum or sums paid, effectual to satisfy and discharge the liability for moneys
distributable upon such Certificate.
Section 5.07. Cancellation. All Certificates surrendered for payment,
redemption, transfer or exchange shall, if surrendered to any Person other than
the Trustee, be delivered to the Trustee and shall be promptly canceled by it.
No Certificates shall be authenticated in lieu of or in exchange for any
Certificates canceled as provided in this Section, except as expressly permitted
by the Trust Agreement.
25
Section 5.08. Currency of Distributions in Respect of Certificates;
Redenomination. (a) Except as provided in (b) below, distributions of the
principal of (and premium and interest, if any) on the Certificates will be made
in the Specified Currency.
(b) Except as set forth below or unless otherwise provided in the
Terms Schedule, if distributions in respect of a Certificate are required to be
made in a Specified Currency other than U.S. dollars and such currency is
unavailable due to the imposition of exchange controls or other circumstances
beyond the control of the Depositor or the Trust or their respective Affiliates,
or is no longer used by the government of the country issuing such currency or
for the settlement of transactions by public institutions of or within the
international banking community (other than under the circumstances described in
(c)), then all distributions in respect of such Certificate shall be made at a
time and in a manner determined by the Exchange Rate Agent in its sole
discretion, which may be in the Specified Currency at such time as such currency
is again available or so used or in such other currency and at such rates as the
Exchange Rate Agent shall determine.
Each of the protections, releases, indemnities and other terms applicable
to the Trustee under Section 10.01, 10.02, 10.03 and 10.05 shall apply to the
Exchange Rate Agent in connection with its actions as Exchange Rate Agent for
the Trust.
Section 5.09. Appointment of Paying Agent. (a) The Trustee may appoint one
or more paying agents (each, a "Paying Agent") with respect to the Certificates.
Any such Paying Agent shall be authorized to make distributions to Holders
pursuant to the Trust Agreement and shall report the amounts of such
distributions to the Trustee. The Trustee may remove the Paying Agent if the
Trustee determines in its sole discretion that the Paying Agent shall have
failed to perform its obligations under the Trust Agreement in any material
respect or if the Paying Agent fails to satisfy the eligibility requirements set
forth in paragraph (b) of this Section. The Paying Agent shall initially be the
Trustee and any co-paying agent chosen by the Depositor and acceptable to the
Trustee. Any Paying Agent shall be permitted to resign as Paying Agent upon 30
days written notice to the Trustee. In the event that the Trustee shall no
longer be the Paying Agent, the Trustee shall appoint a successor or additional
Paying Agent and shall provide written notice of such appointment to the Rating
Agencies, if any. The Trustee shall cause each such Paying Agent to execute and
deliver to the Trustee an instrument in which such Paying Agent shall agree with
the Trustee that it will hold all sums, if any, held by it for distribution to
the Holders in an Eligible Account in trust for the benefit of the Holders
entitled thereto until such sums shall be distributed to such Holders. The
Paying Agent shall return all unclaimed funds to the Trustee within two years
from the time such funds were first eligible to be claimed and promptly upon
removal shall also return all funds in its possession to the Trustee.
(b) The Paying Agent shall at all times be a corporation or an
association, the combined capital and surplus of which is at least $50,000,000
and the long-term debt obligations of which are rated in one of the four highest
categories assigned long-term debt obligations by each of the Rating Agencies,
and is subject to supervision of examination by Federal or State authority. If
such corporation or association publishes reports of conditions at least
annually, pursuant to combined capital and surplus of such corporation or
association shall be deemed to be its combined capital and surplus as set forth
in its most recent report of conditions so published. In the event that at any
time the Paying Agent shall cease to be eligible in accordance with the terms of
this paragraph, the Paying Agent shall release all Trust Property to the Trustee
and then resign immediately. Upon such resignation, the Trustee shall act as
Paying Agent until the appointment of a successor Paying Agent in accordance
with paragraph (c) of this Section.
(c) The terms of Sections 10.01, 10.02, 10.03, 10.05 and 10.06 shall
apply to the Trustee also in its role as Paying Agent, for so long as the
Trustee shall act as Paying Agent.
(d) Any reference in the Trust Agreement to the Paying Agent shall
include any co-paying agent unless the context requires otherwise.
Section 5.10. Authenticating Agent. (a) The Trustee may appoint any one or
more Authenticating Agents (each, an "Authenticating Agent") with respect to the
Certificates which shall be authorized to act on behalf of the Trustee in
authenticating the Certificates in connection with the issuance, delivery and
registration or transfer or exchange of the Certificates. Whenever reference is
made in the Trust Agreement to the authentication of Certificates by the Trustee
or the Trustee's certificate of authentication, such reference shall be deemed
to include authentication on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent must be acceptable to the Depositor.
26
(b) Any institution succeeding to the corporate agency business of
any Authenticating Agent shall continue to be an Authenticating Agent without
the execution or filling of any power or any further act on the part of the
Trustee or such Authenticating Agent. An Authenticating Agent may at any time
resign by giving notice of resignation to the Trustee, the Depositor and the
Rating Agencies. The Trustee may at any time terminate the agency of an
Authenticating Agent by signing notice of termination to such Authenticating
Agent and to the Depositor. Upon receiving such a notice of resignation or upon
such a termination, or in case at any time an Authenticating Agent shall cease
to be acceptable to the Trustee or the Depositor, the Trustee may appoint a
successor Authenticating Agent. Subsequent to any such removal or resignation of
the Authenticating Agent, the Trustee shall act as Authenticating Agent until a
successor Authenticating Agent, if any, is appointed. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless acceptable to the Depositor. The
Trustee agrees to pay to each Authenticating Agent from time to time reasonable
compensating for its services under this Section. The provision of Sections
10.01, 10.02 and 10.03 shall be applicable to any Authenticating Agent.
(c) Pursuant to an appointment made under this Section, the
Certificates may have endorsed thereon, in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication in substantially the
following form:
This is one of the Certificates described in the Trust Agreement.
By: ______________________________
as Authenticating Agent for the Trustee,
By: ______________________________
Authorized Signatory
Section 5.11. Issuance and Transfer Restrictions. (a) The Certificates
shall be issued on the Original Issue Date upon (i) deposit of the Underlying
Securities into the Trust by the Depositor in exchange for all the Certificates,
(ii) satisfaction of the conditions set forth in Section 2.06 and (iii) the due
authentication by the Trustee of the Certificates in the form set forth in
Exhibit B attached hereto.
(b) In the event that the Terms Schedule provides that the
Certificates will be Book-Entry Certificates, the following terms shall apply:
(i) The Certificates will be represented by one or more Global
Securities registered (in the case of Registered Certificates) in the name
of a Depositary or its nominee.
(ii) Unless otherwise provided in the Certificates or the Terms
Schedule, any Global Security representing Registered Certificates shall
be exchangeable for Certificates registered in the name of Persons other
than the Depositary or its nominee only if (i) the Depositary is no longer
willing or able to act as a depositary and the Trustee is unable to locate
a qualified successor within 30 days, or (ii) there shall have occurred
and be continuing an event specified in Section 9.01. Upon such issuance,
the Trustee shall register such Certificates in the name of, and cause the
same to be delivered to, such Person or Persons (or the nominee thereof)
consistent with Section 5.03.
(iii) Any Global Security representing Registered Certificates may
bear a legend in substantially the following form:
"This Certificate is a Global Security within the meaning of the
Trust Agreement hereinafter referred to and is registered in the
name of a Depositary or a nominee of a Depositary. This Certificate
is exchangeable for Certificates registered in the name of a person
other than the Depositary or its nominee only in the limited
circumstances described in the Trust Agreement, and may not be
transferred except as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary."
(c) (i) If the Terms Schedule provides that the "Alternative
Non-Plan ERISA Restrictions" apply, Certificates will be issued only as
definitive Registered Certificates and no transfer of
27
any Certificate evidencing a Certificate shall be made to any employee
benefit plan, domestic or foreign, whether or not subject to ERISA, or
described in Section 4975(e)(1) of the Code, or comparable terms of any
subsequent enactments, or a trustee of any such plan, or an entity whose
underlying assets include the assets of any such plan (each of the
foregoing a "Benefit Plan"), unless immediately after such transfer,
either (x) no Certificates are held by a Benefit Plan subject to the
fiduciary responsibility terms of Part 4, Subtitle B, Title I of ERISA,
described in Section 4975(e)(1) of the Code or subject to substantially
similar legal requirements (an "ERISA Benefit Plan") or (y) Certificates
representing a percentage interest of not more than 24.9% are held by
Benefit Plans (for this purpose the percentage interest shall be
calculated as if any Certificates held by the Depositor, the Trustee or
any of their affiliates (within the meaning of Department of Labor Reg.
xx.xx. 2510.3-101(f)(3)) were not outstanding). If the Terms Schedule
provides that the Alternative Non-Plan ERISA Restrictions apply, the
Underwriting Agreement shall require any prospective transferee to certify
whether or not it is (or may become) a Benefit Plan or an ERISA Benefit
Plan. In addition, each ERISA Benefit Plan and other Benefit Plan will be
required to give assurances that the acquisition and holding of
Certificates will not result in any nonexempt prohibited transaction.
(ii) If the Terms Schedule provides that the "Alternative ERISA
Plan Assets Representations" apply, the restrictions described in (c)(i)
above will not apply. Certificates will be issued in reliance on certain
exemptions from the prohibited transaction provisions of Section 406 of
ERISA and Section 4975 of the Code which may be applicable, depending in
part on the type of Plan fiduciary making the decision to acquire a
Certificate and the circumstances under which such decision is made.
Included among these exemptions are Prohibited Transaction Class Exemption
("PTCE") 91-38 (relating to investments by bank collective investment
funds), PTCE 84-14 (relating to transactions effected by a "qualified
professional asset manager"), PTCE 90-1 (relating to investments by
insurance company pooled separate accounts) and PTCE 96-23 (relating to
transactions determined by in-house asset managers). Where "Alternative
ERISA Plan Assets Representations" apply, BY ITS PURCHASE OF ANY
CERTIFICATE, THE PURCHASER THEREOF WILL BE REQUIRED TO REPRESENT AND AGREE
(OR, IF PERMITTED IN THE DISCRETION OF THE DEPOSITOR, DEEMED TO HAVE
REPRESENTED AND AGREED) EITHER THAT (A) IT IS NOT AND FOR SO LONG AS
CERTIFICATES ARE HELD WILL NOT BE AN ERISA BENEFIT PLAN, AN ENTITY WHOSE
UNDERLYING ASSETS INCLUDE THE ASSETS OF ANY ERISA PLAN, OR A GOVERNMENTAL
PLAN OR OTHER BENEFIT PLAN (OR AN ENTITY WHOSE ASSETS ARE DEEMED FOR
PURPOSES OF APPLICABLE LAW TO BE ASSETS OF A BENEFIT PLAN) WHICH IS
SUBJECT TO ANY FEDERAL, STATE, LOCAL OR FOREIGN LAW THAT IS SUBSTANTIALLY
SIMILAR TO THE PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE
CODE OR (B) ITS PURCHASE, HOLDING AND DISPOSITION OF A CERTIFICATE WILL
NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE (OR, IN THE CASE OF A GOVERNMENTAL PLAN OR OTHER
BENEFIT PLAN, ANY SUBSTANTIALLY SIMILAR FEDERAL, STATE, LOCAL OR FOREIGN
LAW) FOR WHICH AN EXEMPTION IS NOT AVAILABLE.
(iii) Unless the Alternative Non-Plan ERISA Restrictions or
Alternative ERISA Plan Assets Representations apply, no Certificate may be
transferred to any ERISA Benefit Plan. Notwithstanding the preceding
sentence, unless the Alternative Non-Plan ERISA Restrictions apply, each
person who acquires a Certificate, and each fiduciary which causes a
person to acquire a Certificate, in such fiduciary's individual capacity,
hereby agrees to indemnify and hold harmless the Depositor, the Swap
Counterparty, the Trustee and their affiliates from any cost, damage, loss
or expense incurred by them as a result of such person being or being
deemed to be an ERISA Benefit Plan.
(iv) The Depositor may specify restrictions on investment by
ERISA Benefit Plan and other Benefit Plans that are different from those
specified above or in this Section 5.11.
(d) The Trustee and the Depositor are entitled to request additional
evidence from a proposed transferee of such Certificates to ensure to
their sole satisfaction the accuracy of the representations in the items
in the Underwriting Agreement described above.
(e) If, at any time, the Trustee learns that any of the
representations or warranties provided by a potential transferee of
Certificates is false or that any agreement made therein has been
violated, any transfer of
28
a Certificate to such potential transferee shall be null and void ab
initio. The Trustee will arrange for the compulsory sale (at a price
determined by the Depositor) for any Certificate sold or otherwise
acquired in contravention of any of the transfer restrictions set forth
herein. The Trustee shall also have such other powers to effect compliance
with the terms of this Section 5.11 as it deems appropriate.
(f) If the Terms Schedule specifies that the "QIB Restriction" is
applicable, sales of the Certificates will be restricted to "qualified
institutional buyers" as defined in Rule 144A under the Securities Act,
and each purchaser of the Certificates is deemed to represent (or in the
case of definitive Certificates, shall be required to represent) for the
benefit of the Depositor, the Trustee and each Underwriter that such
purchaser is a "qualified institutional buyer."
(g) Each Certificate shall be required to bear a legend describing
the restrictions on transferability set forth in this Section 5.11
applicable thereto.
Section 5.12. Optional Exchange.
(a) In order for a Certificate of a given Exchangeable Series (or
Class within such Exchangeable Series) to be exchanged by the applicable Holder,
the Trustee must receive, at least 90 days prior to an Optional Exchange Date
(or such other longer notice period specified in the related Terms Schedule) (i)
such Certificate with the form entitled "Option to Elect Exchange" on the
reverse thereof duly completed or (ii) in the case of Registered Certificates, a
telegram, telex, facsimile transmission or letter from a member of a national
securities exchange or the National Association of Securities Dealers, Inc., the
Depositary (in accordance with its normal procedures) or a commercial bank or
trust company in the United States setting forth the name of the Holder of such
Registered Certificate, the Certificate Principal Balance or Notional Amount of
such Registered Certificate to be exchanged, the certificate number or a
description of the tenor and terms of such Registration Certificate, a statement
that the option to elect exchange is being exercised thereby and a guarantee
that the Registered Certificate to be exchanged with the form entitled "Option
to Elect Exchange" on the reverse of the Registered Certificate duly completed
will be received by such Trustee not later than five Business Days after the
date of such telegram, telex, facsimile transmission or letter. If the procedure
described in clause (ii) of the preceding sentence is followed, then such
Registered Certificate and form duly completed must be received by such Trustee
by such fifth Business Day. Any tender of a Certificate by the Holder for
exchange shall be irrevocable. The exchange option may be exercised by the
Holder of a Certificate for less than the entire Certificate Principal Balance
of such Certificate provided that the Certificate Principal Balance or Notional
Amount, as applicable, of such Certificate remaining Outstanding after
redemption is an authorized denomination and all other exchange requirements set
forth in the related Terms Schedule are satisfied. Upon such partial exchange,
such Certificate shall be canceled and a new Certificate or Certificates for the
remaining Certificate Principal Balance thereof shall be issued (which, in the
case of any Registered Certificate, shall be in the name of the Holder of such
exchanged Certificate).
(b) Unless otherwise provided in the Terms Schedule, upon the
satisfaction of the foregoing conditions and any applicable conditions with
respect to the related Trust Property, the applicable Holder will be entitled to
receive a distribution of a pro rata share of the Trust Property related to the
Exchangeable Series (and Class within such Exchangeable Series) of the
Certificate being exchanged, in the manner and to the extent described in the
Terms Schedule. Alternatively, if so specified in the Terms Schedule, the
applicable Holder, upon satisfaction of such conditions, may direct the Trustee
to sell, on behalf of such Holder, such pro rata share of the Trust Property, in
which event the Holder shall be entitled to receive the net proceeds of such
sale, less any costs and expenses incurred by such Trustee in facilitating such
sale, subject to any additional adjustments set forth in the Terms Schedule.
Notwithstanding anything herein to the contrary, (i) no exchange may be
effected by any Holder during the first six months following an investment in
the Certificates and, thereafter, an exchange notice of at least 90 days (or
such other longer notice period specified in the related Terms Schedule) will be
required for any exchange and (ii) any right of exchange shall be exercisable
only to the extent that such exchange would not be inconsistent with the
Depositor's and such Trust's continued satisfaction of the applicable
requirements for exemption under Rule 3a-7 under the Investment Company Act of
1940 and all applicable rules, regulations and interpretations thereunder. The
Terms Schedule shall set forth additional terms pertaining to any right of
exchange, including but are not limited to, the following:
29
(i) a requirement that the exchanging Holder tender to the
Trustee Certificates of each Class within such Exchangeable Series;
(ii) a minimum Certificate Principal Balance or Notional Amount,
as applicable, with respect to each Certificate being tendered for
exchange;
(iii) a requirement that the Certificate Principal Balance or
Notional Amount, as applicable, of each Certificate tendered for exchange
be an integral multiple of an amount specified in the Terms Schedule;
(iv) specified dates during which a Holder may effect such an
exchange (each, an "Optional Exchange Date"); provided, however, that no
exchange may be effected during the first six months following an
investment in the Certificates;
(v) limitations on the right of an exchanging Holder to receive
any benefit upon exchange from any Credit Support or other non-Underlying
Securities deposited in the applicable Trust;
(vi) adjustments to the value of the proceeds of any exchange
based upon the Holder's allocable share of expenses incurred but not yet
paid and the establishment of a reserve for any allocable Extraordinary
Trust Expenses as set forth in the Terms Schedule; and (vii) a requirement
that the exchanging holder obtain the consent of any Swap Counterparty to
such exchange and tender to the Swap Counterparty a termination payment
for termination of the portion of the Swap Agreement corresponding to the
portion of the Underlying Securities to be distributed by the Trustee.
If the Terms Schedule states that "Depositor Optional Exchange" is
applicable to the Certificates of a given Series, any Certificates held by the
Depositor or its affiliates from time to time will be subject to optional
exchange by the Depositor or such affiliates, but not by other Holders, for a
pro rata portion of the Trust Property of the related Trust, subject to one or
more of the conditions set forth in (b) above and as described in the Terms
Schedule, to the above limitations under Rule 3a-7 and to such other conditions
as may be specified in the Terms Schedule.
Section 5.13. Callable Certificates. If one or more specified Persons has
the right to purchase all or a portion of the Certificates of any given Series,
the Terms Schedule will designate such Series as a "Callable Series," and
specify the terms upon which any such specified Person may exercise its right to
purchase all or a portion of the Certificates. Such terms may relate to, but are
not limited to, the following:
(i) a minimum Certificate Principal Balance with respect to each
Certificate being purchased;
(ii) a requirement that the Certificate Principal Balance of
each Certificate being purchased be an integral multiple of a specified
amount;
(iii) specified dates during which such a purchase may be
effected (each, a "Call Date"); and (iv) the price at which such a
purchase may be effected (the "Call Price").
After receiving notice of the exercise of such a call right, the Trustee
will provide notice thereof as specified in the Terms Schedule. Upon the
satisfaction of any applicable conditions to the exercise of such right to
purchase of the Certificates described in such Terms Schedule, each Holder will
be entitled to receive a distribution of a pro rata share of the Call Price paid
in connection with such exercise, in the manner and to the extent described in
such Terms Schedule.
Section 5.14. Delivery of Information. The Trustee shall deliver to the
Holders copies of all notices and communications it receives from the Underlying
Security Issuer, including notice of any exercise of any Call Option with
respect to the Underlying Securities by the Underlying Security Issuer. The
Trustee shall also notify the Holders of any call of the Underlying Securities
by the Counterparty under the terms of the Swap Agreement.
ARTICLE VI
THE DEPOSITOR
30
Section 6.01. Liability of the Depositor. The Depositor shall be liable
in accordance with the Trust Agreement only to the extent of the obligation
specifically imposed thereby.
Section 6.02. Limitation on Liability of the Depositor. (a) Unless
otherwise expressly specified in the Trust Agreement, the Depositor shall not be
under any obligation to expend or risk its own funds, except to the extent of
its obligation to pay any amount payable under the [Trustee Fee Letter] [draft]
or under Section 10.05(b) hereof, or otherwise incur financial liability in the
performance of its duties thereunder or in the exercise of any of its rights or
powers if reasonable grounds exist for believing that the repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
(b) Neither the Depositor nor any of the directors, officers,
employees or agents of the Depositor shall be under any liability to the
Trustee, the Trust Property or the Holders for any action taken, or for
refraining from the taking of any action, in good faith pursuant to the Trust
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Depositor or any such person against any breach of
warranties, representations or covenants made in the Trust Agreement, or against
any specific liability imposed on the Depositor pursuant to the Trust Agreement,
or against any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or negligence in the performance of duties specifically
set forth in the Trust Agreement or by reason of reckless disregard of
obligations and duties specifically set forth in the Trust Agreement.
The Depositor shall not be under any obligation to appear in, prosecute or
defend any legal action unless such action is related to its duties under the
Trust Agreement and, in its reasonable opinion, does not involve it in any
expense or liability; provided, however, that the Depositor may in its
discretion undertake any such action which it may deem necessary or desirable
with respect to the Trust Agreement and the rights and duties of the parties
thereto and the interests of the Holders.
Section 6.03. Depositor May Purchase Certificates. The Depositor or its
Affiliates may at any time purchase Certificates in the open market or
otherwise. Certificates so purchased by the Depositor may, at the discretion of
the Depositor, be held or resold.
Section 6.04. Preparation and Filing of Exchange Act Reports; Obligations
of the Depositor. The Depositor shall:
(a) on behalf of the Trust, prepare, sign and file with the
Commission, within the time period set forth below, copies of the annual reports
and of the information, documents and other reports (or copies of such portions
of any of the foregoing as the Commission may from time to time by rules and
regulations prescribe), if any, which the Depositor on behalf of the Trust may
be required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act (collectively, "Exchange Act Reports") with respect to the Trust.
The names of such Exchange Act Reports and the dates on which they are required
to be filed with the Commission are as follows:
(i) Form 8-K, within the time requirement prescribed by the
Exchange Act if the filing of Form 8-K is necessary;
(ii) Form 10-K, within the time requirement prescribed by the
Exchange Act; and (iii) such other reports as may be required pursuant to
Section 13 or 15(d) of the Exchange Act.
(b) deliver to the Trustee within 15 days after the Depositor is
required to file the same with the Commission, such additional information,
documents and reports with respect to compliance by the Depositor with the
conditions and covenants of this Agreement, if any, as may be required to be
filed with the Commission from time to time by such rules and regulations; and
(c) deliver to the Trustee, which shall then transmit by mail to all
Holders described in TIA Section 313(c), in the manner and to the extent
provided therein, such summaries of any information, documents and reports
required to be filed by the Depositor and received pursuant to clauses (a) and
(b) of this Section 6.04, if any, as may be required by rules and regulations
prescribed from time to time by the Commission.
Section 6.05. Preferential Collection of Claims Against Depositor.
Irrespective of whether the TIA shall apply to this Agreement, the Trustee shall
comply with TIA Section 311(a), excluding any creditor relationship listed in
TIA Section 311(b). A trustee who has resigned or been removed shall be subject
to TIA Section 311(a) to the extent required by TIA Section 311(a).
31
ARTICLE VII
RIGHTS OF CERTIFICATEHOLDERS
Section 7.01. Voting Rights with Respect to Underlying Securities. (a)
Within five Business Days after receipt of notice of any meeting of, or other
occasion for the exercise of voting rights or the giving of consents by, owners
of any of the Underlying Securities, the Trustee shall give notice to the
Holders, setting forth (i) such information as is contained in such notice to
owners of Underlying Securities, (ii) a statement that the Holders will be
entitled, subject to any applicable provision of law and any applicable terms of
such Underlying Securities (and to the extent of the voting rights allocated to
the Holders), to instruct the Trustee as to the exercise of voting rights, if
any, pertaining to such Underlying Securities and (iii) a statement as to the
manner in which instructions may be given to the Trustee to give a discretionary
proxy to a person designated in the notice received by the Trustee. Such notice
shall be given by the Trustee to the Holders of record on such record date.
(b) Unless otherwise specified in the Terms Schedule the voting
rights allocable to the owners of the Underlying Securities pursuant to the
terms thereof will be allocated among the Holders pro rata, in the proportion
that the denomination of each Certificate bears to the aggregate denomination of
all Certificates; and upon the written request of the applicable Holder,
received on or before the date established by the Trustee for such purpose, the
Trustee shall endeavor, insofar as practicable and permitted under any
applicable provision of law and any applicable provision of or governing the
Underlying Securities, to vote in accordance with any nondiscretionary
instruction set forth in such written request, provided, that the Trustee shall
not vote except as specifically authorized and directed in written instructions
from the applicable Holder entitled to give such instructions.
(c) Notwithstanding Section 7.01(b), the Trustee must reject any
vote to (i) alter (based on an opinion of counsel) the status of the Trust as a
grantor trust for federal income tax purposes or (ii) alter the currency, amount
or timing of payment of, or the method or rate of accruing, any principal or
interest on the Underlying Securities underlying the Certificates held by such
Holder or (iii) consent to any redemption or prepayment of the Underlying
Securities underlying the Certificates held by such Holder or (iv) consent to
the issuance of new obligations in exchange or substitution for any Underlying
Securities pursuant to a plan or refunding of the Underlying Securities or any
other offer for the Underlying Securities; in each case unless the Trustee is
directed by the affirmative vote of all Holders to accept such amendment or
offer as the case may be and unless an event of default under the Underlying
Securities Indenture has occurred; and provided, further, that the Trustee
receives advice of nationally recognized independent tax counsel, designated by
the Depositor, that such exercise of voting rights with respect to any
Underlying Securities would not result in a "sale or other disposition" of such
Underlying Securities within the meaning of Section 1001(a) of the Code. The
Trustee will not grant any consent (other than a unanimous consent) solicited
from the owners of the Underlying Securities underlying the Certificates with
respect to the foregoing matters in (i), (ii) and (iii) above nor will it accept
or take any action in respect of any consent, proxy or instructions received
from any Holder in contravention of such provisions. In addition, if the Trustee
determines (based upon advice furnished by nationally recognized independent tax
counsel, whether at the request of any Holder or otherwise) that the exercise of
voting rights with respect to any Underlying Securities could result in a "sale
or other disposition" of such Underlying Securities within the meaning of
Section 1001(a) of the Code, the Trustee shall exercise such voting rights in a
manner that would not result in any such sale or other disposition. The Trustee
will have no responsibility to undertake on its own initiative to determine that
any exercise of voting rights will result in any such sale or other disposition
and in any event will not undertake to make such determination unless given an
indemnity reasonably satisfactory to it against the costs of such determination.
(d) The Trustee will not be liable for any failure to act resulting
from certificateholders' late return of, or failure to return, directions
requested by the Trustee from the certificateholders.
Section 7.02. Amendments and Waivers Under Swap Agreement and Swap
Guarantee. Without the need for consent of or notice to any Holder, the Trustee
shall enter into any amendment of the Swap Agreement or the Swap Guarantee
requested by the Swap Counterparty or the Swap Guarantor, respectively, to cure
any ambiguity or manifest error in, or to correct or supplement any provision
of, the Swap Agreement or the Swap Guarantee, so long as (i) the Trustee
determines that such amendment will not adversely affect the interests of the
Holders and (ii) the Trustee has received an Opinion of Counsel, at the expense
of the Swap Counterparty or the Swap Guarantor, to the effect that such
amendment will not adversely affect the interests of the Holders and will not
alter the classification of the Trust for Federal income tax purposes. The
Trustee shall not agree to any other request from the
32
Swap Counterparty or the Swap Guarantor for approval of any consent, waiver or
other modification of the Swap Agreement or the Swap Guarantee without the
consent of the Holders of the Required Percentage of Voting Rights and
compliance with clause (ii) of the preceding sentence.
ARTICLE VIII
DEFAULT ON UNDERLYING SECURITIES AND PERMITTED INVESTMENTS
Section 8.01. Realization Upon Default. (a) The Trustee, on behalf of the
Holders, shall assert claims under the Underlying Securities or the Permitted
Investments, and shall take such reasonable steps as are necessary to receive
payment or to permit recovery thereunder with respect to any default, subject in
all cases to the terms of Article X.
(b) If the Trustee is unable to obtain full recovery in respect of a
defaulted Underlying Security or Permitted Investment, the Trustee shall follow
or cause to be followed such normal practices and procedures as it deems
necessary or advisable to realize upon such defaulted Underlying Security or
Permitted Investment, subject in all cases to the terms of Article X.
(c) If there is an event of default (as defined in the Underlying
Security Indenture) with respect to any Underlying Security and such default is
known to the Trustee, the Trustee shall promptly give notice to the Holders
thereof as promptly as practicable as provided in Section 12.05 hereof, and in
the manner and to the extent provided in TIA Section 313(c)) within 90 days
after such event of default occurs.
(d) Except as otherwise expressly provided in the applicable
prospectus supplement and the Terms Schedule attached hereto, if the proceeds of
any liquidation of the defaulted Deposited Assets are less than the sum of (i)
the outstanding principal balance of the defaulted Deposited Asset, (ii)
interest accrued but unpaid thereon at the applicable interest rate and (iii)
the aggregate amount of expenses incurred by the Trust Administrator and the
trustee in connection with such proceedings to the extent reimbursable from the
assets of the trust under the trust agreement, the trust will realize a loss in
the amount of such difference.
(e) Only if and to the extent provided in the applicable prospectus
supplement and in the Terms Schedule attached hereto, the Trust Administrator or
trustee, as so provided, will be entitled to withdraw or cause to be withdrawn
from the related Certificate Account out of the net proceeds recovered on any
defaulted Deposited Asset, prior to the distribution of such proceeds to
certificateholders, amounts representing its normal administrative compensation
on the Deposited Asset, unreimbursed administrative expenses incurred with
respect to the Deposited Asset and any unreimbursed advances of delinquent
payments made with respect to the Deposited Asset.
ARTICLE IX
TRUST WIND-UP EVENTS
Section 9.01. Trust Wind-Up Events. If any of the following events (each
event, a "Trust Wind-up Event") shall occur:
(a) any Swap Default arising from any action taken or failure to
act, by the Swap Counterparty, if applicable;
(b) the occurrence of one or more Underlying Security Defaults which
either (1) results in an Underlying Security Default with respect to all
Underlying Securities held by the Trust or (2) results in a Termination Event
under the Swap Agreement with respect to which all Transactions under the Swap
Agreement are Affected Transactions;
(c) any Termination Event under the Swap Agreement with respect to
which the Swap Counterparty shall be the sole "Affected Party" (as defined in
the Swap Agreement); provided that at the time of such occurrence no Settlement
Amount would be payable by the Trust to the Swap Counterparty upon designation
of an Early Termination Date by the Trust;
33
(d) the designation of an Early Termination Date by the Swap
Counterparty under a related Swap Agreement (other than with respect to the
termination of fewer than all Transactions entered into under the Swap
Agreement);
(e) the designation of a Special Depositor Wind-Up Event described
in Section 9.06;
(f) any Excess Expense Event;
(g) with the consent or at the request of Certificateholders holding
at least 51% of the aggregate Certificate Principal Balance, any Trust
Administrator Termination Event;
(h) with the consent or at the request of Certificateholders holding
at least 51% of the aggregate Certificate Principal Balance, any Certificate
Event of Default;
(i) with the consent or at the request of Certificateholders holding
at least 51% of the aggregate Certificate Principal Balance (or without any such
consent or request if the Underlying Security Issuer declares its intention to
cease being a Reporting Issuer or if the Underlying Security Issuer for more
than a year fails to file the required reports and other information with the
Securities and Exchange Commission or another applicable agency pursuant to
Section 12(1) of the Exchange Act), any Underlying Security held by the Trust
becomes a Disqualified Underlying Security and (1) the Trust holds no other
Underlying Security which is not a Disqualified Underlying Security or (2) the
Terms Schedule provides that a Trust Wind-Up Event shall occur upon such
Underlying Security becoming a Disqualified Underlying Security;
(j) with the consent or at the request of Certificateholders holding
at least 51% of the aggregate Certificate Principal Balance, any Credit Support
held by the Trust becomes Disqualified Credit Support and the Terms Schedule
specifies that a Trust Wind-Up Event shall occur upon such Credit Support
becoming Disqualified Credit Support;
(k) with the consent or at the request of Certificateholders holding
at least 51% of the aggregate Certificate Principal Balance, any Transaction
under the Swap Agreement has become a Disqualified Transaction and (1) the Trust
is not a party to any other Transaction under the Swap Agreement which is not a
Disqualified Transaction and the Terms Schedule does not set forth provisions
for substituting a replacement Swap Counterparty, or (2) the Terms Schedule
provides that a Trust Wind-Up Event shall occur upon such Transaction becoming a
Disqualified Transaction; and
(l) any other Trust Wind-Up Event set forth in the Terms Schedule;
then the Trustee shall by notice to the Swap Counterparty terminate the Swap
Agreement (including all Transactions thereunder) if such notice is applicable
under the Swap Agreement, and the Trustee shall distribute to each Holder its
pro rata share of the Trust Property in accordance with Section 9.03 and the
Trust shall terminate. The Trustee shall also provide notice of such Trust
Wind-up Event to the Rating Agencies immediately upon discovery or receipt of
notice of such Trust Wind-Up Event. Notwithstanding any requirement that a Trust
Wind-Up Event may occur only with the consent or at the request of
Certificateholders holding at least 51% of the aggregate Certificate Principal
Balance, such Trust Wind-Up Event may occur without such consent or such request
if the Trustee determines that the proceeds from the Deposited Assets will be
sufficient to make payment in full of principal and interest on the
Certificates.
Section 9.02. Liquidation Events. The occurrence of any of the following
events shall be a "Liquidation Event":
(a) In the event that (i) an Underlying Security Default shall occur
which under the terms of the Swap Agreement results in the termination of at
least one but fewer than all Transactions under the Swap Agreement or (ii) any
Underlying Security held by the Trust becomes a Disqualified Underlying
Security, but the Trust holds one or more other Underlying Securities which are
not Disqualified Underlying Securities, and a Trust Wind-Up Event has not
otherwise occurred, then a Liquidation Event shall occur; provided, however,
that no Liquidation Event shall occur pursuant to clause (ii) unless (x) the
liquidation of the Affected Underlying Securities shall not cause a loss of
principal of or interest on the Certificates, (y) such Liquidation Event occurs
with the consent or at the request of Certificateholders holding at least 51% of
the aggregate Certificate Principal Balance or (z) the Underlying Security
Issuer declares its intention to cease being a Reporting Issuer or the
Underlying Security
34
Issuer for more than a year fails to file the required reports and other
information with the Securities and Exchange Commission or another applicable
agency pursuant to Section 12(1) of the Exchange Act. If such Liquidation Event
occurs, the Affected Underlying Securities (and, if necessary, other Trust
Property) shall be sold to the extent necessary to pay any Termination Payment
applicable to the Affected Transaction under the Swap Agreement, and the
remainder shall be distributed to the Holders in accordance with Section 9.03,
but the Trust shall continue thereafter.
(b) In the event that any Transaction under a Swap Agreement becomes
a Disqualified Transaction but the Trust holds one or more other Underlying
Securities other than the Affected Underlying Securities which are not
Disqualified Underlying Securities and a Trust Wind-Up Event has not otherwise
occurred, then a Liquidation Event shall occur if (i) the liquidation of the
Affected Underlying Securities shall not cause a loss of principal of or
interest on the Certificates or (ii) such Liquidation Event occurs with the
consent or at the request of Certificateholders holding at least 51% of the
aggregate Certificate Principal Balance. If such Liquidation Event occurs, then
the Affected Underlying Securities (and, if necessary, other Trust Property)
shall be sold to the extent necessary to pay any Termination Payment applicable
to the Disqualified Transaction under the Swap Agreement, and the remainder
shall be distributed to the Holders in accordance with Section 9.03, but the
Trust shall continue thereafter.
(c) In the event that any Credit Support becomes Disqualified Credit
Support but a Trust Wind-Up Event has not otherwise occurred, then a Liquidation
Event shall occur if (i) a termination of such Credit Support shall not cause a
loss of principal of and interest on the Certificates or (ii) such Liquidation
Event occurs with the consent or at the request of Certificateholders holding at
least 51% of the aggregate Certificate Principal Balance. If such Liquidation
Event occurs, then such Credit Support shall be terminated and any proceeds of
such termination shall be distributed pro rata to the Holders, but the Trust
shall continue thereafter.
Section 9.03. Trust Property Made Available. (a) Subject to Section 9.04,
as promptly as possible after the occurrence of a Trust Wind-up Event or
Liquidation Event, and in any case within three Business Days following such
occurrence, the Trustee shall provide notice to the Holders and the Rating
Agencies of the occurrence of a Trust Wind-up Event or Liquidation Event, the
termination of the Swap Agreement or the particular Affected Transaction(s)
thereunder, the amount of any related Termination Payment and a notice of the
rights of the Holders under Section 9.03(c). In the case of a Trust Wind-Up
Event, subject to Section 9.01, the Trustee shall also provide notice to the
Holders and the Rating Agencies of the termination of the Trust and that Holders
should surrender their Certificates to the Trustee, or deliver security or
indemnity acceptable to the Trustee, for their respective pro rata distributions
of the Underlying Securities and any other remaining Trust Property, if any.
Such notice to the Holders and the Rating Agencies shall also specify (i) the
cause of the Trust Wind-up Event, (ii) the location and hours of the Corporate
Trust Office at which Certificates should be presented and surrendered and (iii)
that each Holder must supply transfer instructions in writing with respect to
the Underlying Securities and/or other Trust Property to be distributed in cash
or in kind.
(b) Immediately upon receipt of notice from the Swap Counterparty
that the Trust will be obligated to pay a Termination Payment or upon other
notice from the Trustee that the Trust is required to sell Underlying
Securities, the Selling Agent shall undertake to sell Underlying Securities on
behalf of the Trust, unless and until the Selling Agent receives notice from the
Trustee of an exercise by the Holders of their rights under Section 9.03(c);
provided, however, that the Selling Agent may elect not to act as Selling Agent
with respect to some or all of the Underlying Securities by written notice to
that effect to the Trustee. The timing, price and other terms of any sale
conducted by the Selling Agent shall be determined by the Selling Agent in its
sole discretion, but all such sales shall be completed within 30 days or such
longer period of time as may be reasonable with respect to particular Underlying
Securities. In the case of a Liquidation Event, sales under this provision shall
be limited to the Affected Underlying Securities except where the proceeds from
the Affected Underlying Securities are insufficient to make payment of the
Termination Payment.
(c) Notwithstanding Section 9.03(b), in connection with any
Termination Payment payable by the Trust, the Holders may, acting unanimously,
deliver to the Trustee the amount of such outstanding Termination Payment
(together with, in the case of a Trust Wind-Up Event, any Extraordinary Trust
Expenses in excess of the Maximum Reimbursable Amount payable to the Trustee)
and a written instruction to discontinue sale of the Underlying Securities. If
the Selling Agent receives notice from the Trustee of the exercise by the
Holders of their rights under this Section 9.03(c), the Selling Agent shall
promptly discontinue sales of the related Underlying
35
Securities (but the Selling Agent and the Trustee shall complete the settlement
of any sale already agreed). It is expressly understood and agreed that
Underlying Securities may be sold in the time necessary for the Holders to be
notified of and act upon their rights under this Section 9.03(c).
(d) Subject to the security interest in all of the Trust Property
granted in favor of the Swap Counterparty pursuant to the Swap Agreement and the
obligation of the Trust to pay Extraordinary Trust Expenses, and as provided in
the Terms Schedule, the Underlying Securities or Affected Underlying Securities
shall be made available by the Trustee to the Holders upon the occurrence of a
Trust Wind-up Event or Liquidation Event, respectively, after expiration of any
sale period referred to in Section 9.03(b), and upon surrender, or delivery of
security or indemnity acceptable to the Trustee, by each Holder of its
Certificates at the Corporate Trust Office specified pursuant to paragraph (a)
of this Section 9.03. Upon receipt by the Trustee of (i) appropriate transfer
instructions in writing from a Holder with respect to the Underlying Securities
and (ii) such Holder's Certificates (or acceptable security or indemnity), the
Trustee shall promptly deliver Underlying Securities to such Holder in an
aggregate principal amount equal to the aggregate Certificate Principal Balance
of such Holder's Certificates in accordance with such transfer instructions by
(A) physical delivery or (B) if applicable, causing the book-entry depositary
for such Underlying Securities to credit such Underlying Securities to an
account of such Holder with such depositary or an account of a designated
participant in such depositary, provided that such book-entry depositary will be
an agency of the United States, DTC or another book-entry institution acceptable
to the Depositary. Any Transfer made in accordance with this paragraph shall
satisfy all obligations of the Trust with respect to the Holders.
(e) Unless otherwise provided in the Terms Schedule, and
notwithstanding any other provision of this Agreement (and as specified in the
Swap Agreement), in connection with early termination of a Swap Agreement or one
or more Transactions thereunder, other than as a result of Underlying Security
Default, the claim of the Swap Counterparty against the Underlying Securities
(or proceeds thereof arising from sale thereof) and any other Trust Property
will be limited to a claim pro rata with that of the Holders according to the
amount of the Termination Payment otherwise payable to the Swap Counterparty and
the Holders' aggregate Certificate Principal Balance plus accrued interest.
(f) The only distributions from the Trustee to which the Holders
shall be entitled are, subject to the security interest in all of the Trust
Property granted in favor of the Swap Counterparty pursuant to the Swap
Agreement and the obligation of the Trust to pay Extraordinary Trust Expenses,
payments on the Underlying Securities, amounts, if any, recovered under the Swap
Agreement (including Termination Payments, if any, and amounts collected
pursuant to Section 2(e) and Section 11 of the Swap Agreement) or Swap
Guarantee, received by the Trustee after the occurrence of the Trust Wind-Up
Event, and any other remaining Trust Property, if any, which in each case the
Trustee shall distribute pro rata to the Holders in the manner provided pursuant
to Section 4.01 upon satisfaction of the conditions for transfer of Underlying
Securities referred to in paragraph (b) of this Section.
(g) Except for reports and other information required to be provided
to Holders under the Trust Agreement, the obligations the Trustee and the
Depositor will terminate upon the distribution to Holders of all amounts
required to be distributed to them and the disposition of all Underlying
Securities held by the Trustee, and such distribution shall constitute full
satisfaction of all of the interests of the Holders under this Trust Agreement.
(h) In the event that the Selling Agent resigns or declines to sell
specific Underlying Securities, the Trustee shall proceed under Section
10.02(a)(x).
(i) The Selling Agent is an agent of the Trustee only and shall have
no fiduciary or other duties to the Holders, nor shall the Selling Agent have
any liability to the Trust in the absence of the Selling Agent's bad faith or
willful default. The Selling Agent shall be permitted to sell Underlying
Securities to Affiliates of the Selling Agent. The Selling Agent may (in
addition to declining to sell specific Underlying Securities as provided in
Section 9.03(b)) resign at any time by oral or written notice to the Trustee,
such resignation to take effect immediately upon notice. Except as provided in
the first sentence of this Section 9.03(i), each of the protections, releases,
indemnities and other terms applicable to the Trustee under Section 10.01,
10.02, 10.03 and 10.05 shall apply to the Selling Agent in connection with its
actions as Selling Agent for the Trust.
(j) Subject to Section 9.03(b) and Section 9.03(e), the Trustee
agrees that upon any failure of the Trust to make any payment when due under the
Swap Agreement, the Swap Counterparty shall have the right to take all action
and to pursue all remedies with respect to such property that a secured party is
permitted to take with
36
respect to collateral under the UCC, including the right to require the Trustee
promptly to sell all or any portion of the Underlying Securities in the open
market or, if the Swap Counterparty elects, to sell the Underlying Securities to
the Swap Counterparty for its fair value as determined in good faith by the Swap
Counterparty. In either case, the proceeds of sale shall be applied to any
amounts owed to the Swap Counterparty. The Trustee further agrees to take any
actions necessary to facilitate the perfection of the aforementioned security
interest of the Swap Counterparty in the property of the Trust as the Swap
Counterparty may reasonably request.
(k) No Holder shall have any liability as a seller of the Trust
Property in connection with any sale of Trust Property by the Trustee or the
Selling Agent.
Section 9.04. Limitation on Notice Requirement. The Trustee shall not be
responsible for terminating the Swap Agreement (or any individual Affected
Transaction thereunder) or giving notice of a Trust Wind-up Event unless and
until (i) the Trustee fails to receive funds due on the Underlying Securities or
under the Swap Agreement when due and such funds are not received within any
applicable grace period, (ii) receipt by the Trustee of notice from the Swap
Counterparty of the occurrence of a Swap Default or Termination Event or upon
actual knowledge of a Swap Default or Termination Event by a Responsible Officer
of the Trustee; provided, however, that the Trustee is responsible for making
due inquiry as to whether a Trust Wind-up Event occurred if it has reason to
believe that such a Trust Wind-up Event has occurred or (iii) receipt of notice
from the Underlying Security Issuer of an event constituting an Underlying
Security Default.
Section 9.05. Expense Event. (a) In the event that the Trustee incurs
Extraordinary Trust Expense in an aggregate amount exceeding the Trigger Amount
and neither the Swap Counterparty nor the Holders have provided adequate
assurance of indemnity to the Trustee in accordance with the terms of paragraph
(b) or paragraph (c), as applicable, of this Section (such event, an "Excess
Expense Event"), the Trust shall terminate as provided in Section 9.01.
(b) Promptly upon the incurrence by the Trustee of Extraordinary
Trust Expense in an aggregate amount exceeding the Trigger Amount, and in any
event within one Business Day after such incurrence, the Trustee shall provide
notice to each Holder, to the Swap Counterparty and to the Rating Agencies, if
any. Such notice shall state that an Excess Expense Event shall occur on the
seventh calendar day (or, if such day is not a Business Day, on the next
succeeding day that is a Business Day) following the provision of such notice
unless prior to such day either the Holders unanimously agree, or the Swap
Counterparty agrees, to indemnify the Trustee for Extraordinary Trust Expense in
an aggregate amount exceeding the Maximum Reimbursable Amount (or any other
amount specified by the party agreeing to indemnify the Trustee), and actually
incurred by the Trustee as of the date of such agreement, to the reasonable
satisfaction of the Trustee and its counsel; provided, however, in no event
shall the Trustee be released from its obligations under the Trust Agreement
until such seventh calendar day (or, if such day is not a Business Day, on the
next succeeding day that is a Business Day).
(c) Following an agreement to indemnify the Trustee for future
Extraordinary Trust Expense, upon the incurrence of Extraordinary Trust Expense
in excess of the Maximum Reimbursable Amount, then an "Excess Expense Event"
will occur unless adequate assurance of indemnity is given to the Trustee in the
manner specified in paragraph 9.05(b).
(d) Nothing in this Section shall be construed to excuse the
Depositor from its indemnification obligations under Section 10.05.
Section 9.06. Special Depositor Wind-Up Event. If the Depositor (or, if
applicable, its permitted assignee) owns 100% of the Certificates,
then it shall have the power to designate a distribution of the Trust Property
to the Holders and the termination of the Trust (a "Special Depositor Wind-Up
Event") pursuant to this Article IX.
ARTICLE X
CONCERNING THE TRUSTEE
Section 10.01. Duties of Trustee.
37
(a) The Trustee undertakes to perform such duties and only such
duties as are specifically set forth in the Trust Agreement. Any permissive
right of the Trustee enumerated in the Trust Agreement shall not be construed as
a duty.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of the Trust Agreement, shall examine them to determine whether they
conform to the requirements of the Trust Agreement. If any such instrument is
found not to conform to the requirements of the Trust Agreement, the Trustee
shall take action as it deems appropriate to have the instrument corrected, and
if the instrument is not corrected to the Trustee's satisfaction, the Trustee
will provide notice thereof to the Depositor, the Holders and the Rating
Agencies, if any.
(c) Upon a default by the Swap Counterparty in making any other
payment due under the Swap Agreement and upon a default by the Swap Guarantor
after the Trustee makes demand under the Swap Guarantee, the Trustee shall
exercise such of the rights and powers vested in it by the Trust Agreement, and
shall use the same degree of care and skill in their exercise as a prudent
person would exercise or use under the circumstances in the conduct of such
person's own affairs.
(d) No provision of the Trust Agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own misconduct; provided, however, that:
(i) the duties and obligations of the Trustee shall be
determined solely by the express terms of the Trust Agreement, the Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in the Trust Agreement, no
implied covenants or obligations (except for a fiduciary duty to the
beneficiaries of the Trust) shall be read into the Trust Agreement against
the Trustee and, in the absence of negligence, bad faith or willful
misconduct on the part of the Trustee, the Trustee may conclusively rely,
as to the truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to the
Trustee that conform to the requirements of the Trust Agreement;
(ii) the Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;
(iii) except with respect to actions or duties required to be
taken or performed, as applicable, by the Trustee under the express terms
of the Trust Agreement, the Trustee shall not be required to expend or
risk its own funds or otherwise incur financial liability in the
performance of any of its duties or in the exercise of any of its rights
powers under the Trust Agreement if there is reasonable ground for
believing that the repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it; provided, however,
that the Trustee agrees that the indemnification under Section 10.05 will
provide reasonable assurance against such risk or liability; and
(iv) in the event that the Paying Agent or the Certificate
Registrar shall fail to perform any obligation, duty or agreement in the
manner or on the day required to be performed by the Paying Agent or
Certificate Registrar, as the case may be, under the Trust Agreement, the
Trustee shall be obligated promptly upon its knowledge thereof to perform
such obligation, duty or agreement in the manner so required.
Section 10.02. Certain Matters Affecting the Trustee. (a) Except as
otherwise provided in Section 10.01:
(i) the Trustee may request and rely upon and shall be protected
in acting or refraining from acting upon any resolution, Officers'
Certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal,
bond or other paper or document reasonably believed by it to be genuine
and to have been signed by the proper party or parties;
38
(ii) the Trustee may consult with counsel and any advice or
Opinion of Counsel shall be full and complete authorization and protection
in respect of any action taken or suffered or omitted by it under the
Trust Agreement in good faith and in accordance with such advice or
Opinion of Counsel;
(iii) except for the duties and obligations of the Trustee
expressly created by the Trust Agreement, the Trustee shall be under no
obligation to exercise any of the trusts or powers vested in it by the
Trust Agreement or to institute, conduct or defend any litigation
thereunder or in relation thereto, at the request, order or direction of
any of the Holders, pursuant to the terms of the Trust Agreement, unless
such Holders or the Depositor shall have, to the reasonable satisfaction
of the Trustee and its counsel, offered to the Trustee reasonable security
or indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby;
(iv) the Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it
by the Trust Agreement;
(v) the Trustee shall not be bound to make any investigation
into the facts of matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, approval, bond or other paper or document believed by it to be
genuine;
(vi) the Trustee may execute any of the trusts or powers or
perform any duties under the Trust Agreement either directly or by or
through agents or attorneys or a custodian or Trust Administrator;
(vii) the Trustee shall not be personally liable for any loss
resulting from the investment of funds held in any Certificate Account
pursuant to Section 3.05;
(viii) if no Trust Administrator Termination Event has occurred
and is continuing with respect to any given series, the Trustee is
required to perform only those duties specifically required under the
trust agreement with respect to such series;
(ix) the Trustee shall not be deemed to have notice or knowledge
of any matter unless a Responsible Officer assigned to and working in the
Corporate Trust Office has actual knowledge thereof or unless written
notice thereof is received by the Trustee at the Corporate Trust Office
and such notice references the Certificates generally or the Trust
Agreement;
(x) the Trustee shall have the power to reimburse itself for any
unpaid Extraordinary Trust Expense actually incurred in accordance with
the terms and conditions of this Trust Agreement prior to the distribution
of funds or Trust Property to Holders;
(xi) the Trustee may, to the extent of and pursuant to the Terms
Schedule, and pursuant to Section 3.10 hereof, but shall have no
obligation to make advances with respect to collections on the Deposited
Assets or in favor of the Holders; and
(xii) the Trustee shall have the power to sell the Underlying
Securities and other Trust Property, in accordance with Article IX and XI,
through the Selling Agent or, if the Selling Agent shall have resigned or
declined to sell some or all of the Underlying Securities, any broker
selected by the Trustee (with the consent of the Depositor) with
reasonable care, in an amount sufficient to pay any amount due to the Swap
Counterparty under the Swap Agreement (including Termination Payments) or
reimbursable to itself in respect of unpaid Extraordinary Trust Expenses
and to use the proceeds thereof to make such payments prior to the
distribution of funds or Trust Property to Holders. Any such broker shall
be instructed by the Trustee to sell such Trust Property in a reasonable
manner designed to maximize the sale proceeds.
(b) All rights of action under the Trust Agreement or under any of
the Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
other Proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in its name for the benefit of all
the Holders, subject to the terms of the Trust Agreement.
39
Section 10.03. Limitation on Liability of Trustee. The Trustee assumes no
responsibility for the correctness of the recitals contained in the Trust
Agreement, the Certificates, the Swap Agreement and the Swap Guarantee, or in
any document issued in connection with the sale of the Certificates (other than
the signature and authentication on the Certificates). The sole obligor with
respect to the Underlying Securities is the related Underlying Security Issuer,
with respect to the Swap Agreement is the Swap Counterparty and with respect to
the Swap Guarantee, is the Swap Guarantor. Except as set forth in Section 10.12,
the Trustee makes no representations or warranties as to the validity or
sufficiency of the Trust Agreement, the Certificates (other than the signature
and authentication on the Certificates), any Underlying Security, the Swap
Agreement, the Swap Guarantee or of any related document. The Trustee shall not
be accountable for the use or application by the Depositor of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Depositor or the Swap Counterparty in
respect of the Underlying Securities. The Certificates do not represent
interests in or obligations of the Trustee and the Trustee shall not be
responsible or accountable for any tax, accounting or other treatment proposed
to be applied to the Certificates or any interest therein except as expressly
provided in the Trust Agreement.
Section 10.04. Trustee May Own Certificates. The Trustee in its individual
capacity or any other capacity may become the owner or pledgee of Certificates
with the same rights it would have if it were not Trustee.
Section 10.05. Trustee Fees and Expenses; Limited Indemnification.
(a) As compensation for its regular and customary services and in
payment of its regular and customary expenses under the Trust Agreement
(including the reasonable compensation, expenses and disbursements of its
counsel for regular and customary services hereunder) the Trustee shall be
entitled to the Trustee Fees (which shall not be limited by any provision of law
in regard to compensation or payment of a trustee of an express trust). The
Depositor agrees to pay such Trustee Fees when due in accordance with the
Trustee Fee Letter; provided, however, that, subject to paragraph (b) below, the
Depositor shall be under no obligation to make any other payment for any other
services and expenses, disbursements and advances of the Trustee.
(b) The Trustee and any director, officer, employee or agent of the
Trustee shall be indemnified by the Depositor and held harmless against any
loss, liability or expense incurred in connection with any Proceeding relating
to the Trust Agreement, the Swap Agreement or the Certificates or the
performance of any of the Trustee's duties under the Trust Agreement, other than
any loss, liability or expense (i) that constitutes a specific liability of the
Trustee under the Trust Agreement or (ii) incurred by reason of willful
misfeasance, bad faith or negligence in the performance of the Trustee's duties
thereunder or by reason of reckless disregard of the Trustee's obligations and
duties thereunder (such loss, liability or expense, other than as described in
clauses (i) and (ii) of this sentence, "Extraordinary Trust Expense"); provided,
however, that with respect to any such Proceeding, (1) the Trustee shall have
given the Depositor notice thereof promptly after the Trustee shall have
knowledge thereof; (2) while maintaining control over its own defense in any
such legal action, the Trustee shall consult with the Depositor in preparing
such defense; (3) if any Person ever alleges such willful misfeasance, bad faith
or negligence by the Trustee, the indemnification provided for in this paragraph
(b) shall nonetheless be paid upon demand, subject to later adjustment or
reimbursement, until such time as a court of competent jurisdiction enters a
final judgment as to the extent and effect of the alleged willful misfeasance,
bad faith or negligence; and (4) the Depositor shall in no event be obligated
under the Trust Agreement to indemnify the Trustee for any Extraordinary Trust
Expense to the extent that such Extraordinary Trust Expense, when aggregated
with all Extraordinary Trust Expense previously indemnified, exceeds the Maximum
Reimbursable Amount. Subject to clause (4) of the proviso to the immediately
preceding sentence, the indemnity for Extraordinary Trust Expense shall survive
the termination or discharge of the Trust Agreement and the resignation or
removal of the Trustee. In the event the Trustee is not indemnified by the
Depositor, whether due to bankruptcy, insolvency or otherwise, pursuant to the
first sentence of this paragraph, the Trustee shall nevertheless remain
obligated to perform its duties under the Trust Agreement.
(c) The Trustee and the Depositor expressly acknowledge that the
limited obligations of the Depositor to indemnify the Trustee pursuant to
paragraph (b) of this Section do not extend to amounts attributable to
compensation for services or payment of expenses of the Trustee, which amounts
are payable in full in the form of the Trustee Fee.
(d) Unless otherwise specified in the Terms Schedule, the Trustee
acknowledges that any claims of the Trustee in respect of the Trust Property
shall be subordinated to the obligation of the Trust to make payment in full of
the principal of and interest on the Certificates and that the Trustee shall not
apply any Trust
40
Property to the payment of the Trustee Fee or any amounts due to the Trustee
hereunder until the principal of and interest on the Certificates have been paid
in full.
Section 10.06. Eligibility Requirements for Trustee. (a) The Trustee shall
at all times satisfy the requirements of TIA Section 310(a) and Section
(a)(4)(i) of Rule 3a-7 under the Investment Company Act. The Trustee hereunder
shall at all times be a corporation which is not an Affiliate of the Depositor
(but may have normal banking relationships with the Depositor, the
Administrative Agent or any obligor with respect to the Underlying Securities
with respect to such Series of Certificates and their respective Affiliates)
organized and doing business under the laws of any State or the United States,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $50,000,000 and subject to supervision or
examination by Federal or State authority, and the long-term debt obligations of
which are rated in one of the four highest categories assigned long-term debt
obligations by each of the Rating Agencies. If such corporation or association
publishes reports of conditions at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section the combined capital and surplus of such corporation or
association shall be deemed to be its combined capital and surplus as set forth
in its most recent report of conditions so published. In the event that at any
time the Trustee shall cease to be eligible in accordance with the terms of this
Section, the Trustee shall resign immediately in the manner and with the effect
specified in Section 10.07.
(b) The Trustee shall comply with Section 310(b) of the TIA;
provided, however, that there shall be excluded from the operation of TIA
Section 310(b)(1), any Series under which other securities are outstanding
evidencing ownership interest in obligations of the Underlying Security Issuer
if the requirements for such exclusion set forth in TIA Section 310(b)(1) are
met.
Section 10.07. Resignation or Removal of the Trustee. (a) Subject to the
last sentence of this paragraph (a), the Trustee may at any time resign and be
discharged from the Trust by giving written notice thereof to the Depositor, the
Swap Counterparty and the Swap Guarantor and to all Holders. Upon receiving such
notice or resignation, the Depositor, with the consent of the Swap Counterparty
and the Swap Guarantor which consents shall not be unreasonably withheld, shall
as promptly as possible (and in any event within 30 days after the date of such
notice of resignation) appoint a successor trustee by written instrument, in
duplicate, which instrument shall be delivered to the resigning Trustee and to
the successor trustee. A copy of such instrument shall be delivered to the
Holders, the Swap Counterparty, the Swap Guarantor and the Rating Agencies by
the Depositor. If no such successor trustee shall have been so appointed and
have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee for the Certificates.
Upon any appointment of a successor trustee pursuant to this paragraph (a), the
resigning Trustee shall be solely liable for (i) the payment of such successor
trustee's fees and expenses and (ii) provision of adequate indemnities
satisfactory to such successor trustee (it being understood that the
indemnification obligations of the Depositor pursuant to Section 10.05(b) shall
inure to the benefit of such successor trustee, but that any Extraordinary Trust
Expense previously indemnified by the Depositor shall reduce the Maximum
Reimbursable Amount with respect to such successor trustee on a
dollar-for-dollar basis). In the event that the Trustee fails to satisfy the
conditions contained in clauses (i) and (ii) above, the Trustee may not resign
pursuant to this paragraph (a).
(b) If at any time the Trustee shall cease to be eligible in
accordance with the terms of Section 10.06 and shall fail to resign after
written request therefor by the Depositor, or if at any time the Trustee shall
become incapable of acting, or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Depositor may, with the consent of the Swap Counterparty and the Swap Guarantor
which consents shall not be unreasonably withheld, remove the Trustee and
appoint a successor trustee by written instrument, in duplicate, which
instrument shall be delivered to the Trustee so removed and to the successor
trustee. A copy of such instrument shall be delivered to the Holders, the Swap
Counterparty, the Swap Guarantor, and the Rating Agencies by the Depositor.
(c) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the terms of this Section shall not become
effective until acceptance of appointment by the successor trustee as provided
in Section 10.08.
41
(d) The Trustee acknowledges and agrees that except as provided in
this Section 10.07, it may not resign or cease to perform its obligations
hereunder for any reason (including, without limitation, any failure of the
Depositor to make payments of the Trustee Fees or other amounts payable to the
Trustee hereunder).
Section 10.08. Successor Trustee. (a) Any successor trustee appointed as
provided in Section 10.07 shall execute, acknowledge and deliver to the
Depositor, its predecessor trustee and the Rating Agencies an instrument
accepting such appointment under the Trust Agreement, and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor under the Trust Agreement, with the like effect as if originally
named as trustee in the Trust Agreement. The predecessor trustee shall deliver
to the successor trustee all documents and statements held by it under the Trust
Agreement, and the Depositor and the predecessor trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
for more fully and certainly vesting and confirming in the successor trustee all
such rights, powers, duties and obligations. No successor trustee shall accept
appointment as provided in this Section unless at the time of such acceptance
such successor trustee shall be eligible under the terms of Section 10.06.
(b) Upon acceptance of appointment by a successor trustee as
provided in this Section, the Depositor shall transmit notice of the succession
of such trustee under the Trust Agreement to all Holders in the manner provided
pursuant to Section 12.05.
Section 10.09. Merger or Consolidation of Trustee. Any corporation or
association into which the Trustee may be merged or converted or with which it
may be consolidated or any corporation or association resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation or association succeeding to the business of the Trustee, shall be
the successor of the Trustee under the Trust Agreement, provided such
corporation or association shall be eligible under the terms of Section 10.06,
without the execution or filing of any paper or any further act on the part of
any of the parties to the Trust Agreement, anything in the Trust Agreement to
the contrary notwithstanding.
Section 10.10. Appointment of Co-Trustee. (a) Notwithstanding any other
terms of the Trust Agreement, at any time, for the purpose of meeting any legal
requirements of any jurisdiction in which any party of the Trust Property may at
the time be located, the Depositor and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees, jointly
with the Trustee, of all or any part of the Trust Property, and to vest in such
Person or Persons, in such capacity, such title to the Trust Property, or any
part thereof, and, subject to the other terms of this Section, such powers,
duties, obligations, rights and trusts as the Depositor and the Trustee may
consider necessary or desirable. If the Depositor shall not have joined in such
appointment within 15 days after the receipt by it of a request so to do, the
Trustee alone shall have the power to make such appointment. No co-trustee under
the Trust Agreement shall be required to meet the terms of eligibility as a
successor trustee under Section 10.06 and no notice to Holders of the
appointment of a co-trustee or co-trustees shall be required under Section
10.08.
(b) In the case of any appointment of a co-trustee pursuant to this
Section, all rights, powers, duties and obligations conferred or imposed upon
the Trustee shall be conferred or imposed upon and exercised or performed by the
Trustee and such co-trustee jointly, except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed by the
Trustee, the Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations (including the
holding of title to such Trust Property or any portion thereof in any such
jurisdiction) shall be exercised and performed by such co-trustee at the
direction of the Trustee.
(c) Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of then co-trustees, as effectively as if
given to each of them. Every instrument appointment any co-trustee shall refer
to the Trust Agreement and the conditions of this Article X. Each co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, jointly with the Trustee
subject to all the terms of the Trust Agreement, specifically including every
provision of the Trust Agreement relating to the conduct of, affecting the
liability of, or affording protection to, the Trustee. Every such instrument
shall be filed with the Trustee.
(d) Any co-trustee may, at any time, constitute the Trustee, its
agent or attorney-in-fact, with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of the Trust
42
Agreement on its behalf and in its name. If any co-trustee shall die, become
incapable of acting, resign or be removed, all its estates, properties, rights,
remedies and trusts shall vest in and be exercised by the Trustee, to the extent
permitted by law, without the appointment of a new or successor trustee.
Section 10.11. Appointment of Office or Agency. The Certificates may be
surrendered for registration of transfer or exchange, and presented for the
final distribution with respect thereto, and notices and demands to or upon the
Trustee in respect of the Certificates and the Trust Agreement may be served at
the Corporate Trust Office.
Section 10.12. Representations and Warranties of Trustee. (a) The Trustee
represents and warrants that:
(i) the Trustee is duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation or
association;
(ii) the Trustee has full power, authority and right to execute,
deliver and perform its duties and obligations under the Trust Agreement,
the Certificates and the Swap Agreement and has taken all necessary action
to authorize the execution, delivery and performance by it (or, with
respect to the Certificates, by an Authenticating Agent on its behalf, if
applicable) of the Trust Agreement, the Certificates and the Swap
Agreement;
(iii) the execution and delivery of the Trust Agreement, the
Certificates, the Underwriting Agreement and the Swap Agreement by the
Trustee and its performance of and compliance with the terms of the Trust
Agreement, the Certificates and the Swap Agreement will not violate the
Trustee's articles of incorporation, association or other constitutive
documents or By-laws or constitute a default under, or result in the
breach or acceleration of, any material contract, agreement or other
instrument to which the Trustee is a party or which may be applicable to
the Trustee or any of its assets;
(iv) as of the Original Issue Date, each of the Trust Agreement,
the Certificates and the Swap Agreement has been duly executed and
delivered by the Trustee (or, with respect to the Certificates, by an
Authenticating Agent on its behalf, if applicable) and each of the Trust
Agreement and the Swap Agreement constitutes the legal, valid and binding
obligation of the Trustee, enforceable in accordance with its terms,
except as enforcement may be limited by the applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
rights of creditors generally and general principles of equity;
(v) the Trustee is not in violation, and the execution and
delivery of the Trust Agreement, the Swap Agreement and the Certificates
by the Trustee and its performance and compliance with respective terms of
the Trust Agreement, the Swap Agreement and the Certificates will not
constitute a violation, of any order or decree of any court or any order
or regulation of any Federal, State, municipal or governmental agency
having jurisdiction over the Trustee or its properties, which violation
would reasonably be expected to have a material adverse effect on the
condition (financial or otherwise) or operations of the Trustee or its
properties or on the performance of its duties thereunder;
(vi) there are no actions or proceedings against, or
investigations of, the Trustee pending, or, to the knowledge of the
Trustee, threatened, before any court, administrative agency or other
tribunal (A) that could reasonably be expected to prohibit its entering
into the Trust Agreement or the Swap Agreement or to render the
Certificates invalid, (B) seeking to prevent the issuance of the
Certificates or the consummation of any of the transactions contemplated
by the Trust Agreement or the Swap Agreement or (C) that could reasonably
be expected to prohibit or materially and adversely affect the performance
by the Trustee of its obligations under, or the validity or enforceability
of, the Trust Agreement, the Swap Agreement or the Certificates; and (vii)
no consent, approval, authorization or order of any court or governmental
agency or body is required for the execution, delivery and performance by
the Trustee of, or compliance by the Trustee with, the Trust Agreement,
the Swap Agreement or the Certificates, or for the consummation of the
transactions contemplated by the Trust Agreement or the Swap Agreement,
except for such consents, approvals, authorizations and orders, if any,
that have been obtained prior to the Original Issue Date.
(b) Within 30 days of the earlier of discovery by the Trustee or
receipt of notice by the Trustee of a breach of any representation or warranty
of the Trustee set forth in this Section 10.12 that materially
43
and adversely affects the interests of the Holders, the Trustee shall promptly
cure such breach in all material respects.
Section 10.13. Limitation of Powers and Duties. The Trust is constituted
solely for the purposes of acquiring and holding the Underlying Securities,
entering into the Swap Agreement, accepting the Swap Guarantee, entering into
the Underwriting Agreement and issuing the Certificates. The Trust shall not
incur any additional debt and the Trust shall not merger or consolidate with any
other entity. The Trustee is not authorized to acquire any other investments or
engage in any activities not authorized in the Trust Agreement and, in
particular, the Trustee is not authorized (i) to sell, assign, transfer,
exchange, pledge, set-off or otherwise dispose of any of the Underlying
Securities or interests therein, including to Holders (except upon termination
of the Trust in accordance with Article IX and Article XI of the Trust
Agreement) or (ii) to do anything that would cause the Trust to fail or cease to
qualify as a "grantor trust" for Federal income tax purposes.
Section 10.14. Non-Petition. Prior to the date that is one year and one
day after all distributions in respect of the Certificates have been made, none
of the Trustee, the Co-Trustee (if any) and the Depositor shall take any action
or institute any proceeding against the other under the United States Bankruptcy
Code or any other liquidation, insolvency, bankruptcy, moratorium,
reorganization or similar law ("Insolvency Law") applicable to either of them,
now or hereafter in effect, or which would be reasonably likely to cause the
other to be subject to, or seek the protection of, any such Insolvency Law.
ARTICLE XI
TERMINATION
Section 11.01. Termination of the Trust. (a) Except as otherwise provided
in Article IX, the respective obligations and responsibilities under the Trust
Agreement of the Depositor and the Trustee (other than the obligations imposed
by Section 10.05(b) and the obligations of the Trustee to provide reports and
other information under the Trust Agreement and to make distributions to Holders
as hereafter set forth) shall terminate upon the distribution to such Holders of
all amounts held in all the Accounts and required to be paid to such Holders
pursuant to the Trust Agreement; provided, however, that in no event shall the
Trust continue beyond the expiration of 21 years from the death of the last
survivor of the descendants of Queen Xxxxxxxxx XX of England, living on the date
of the Trust Agreement.
(b) Written notice of any termination shall be provided to each
Holder and the Depositor, the Swap Counterparty, the Swap Guarantor, each
Underwriter and the Rating Agencies pursuant to Section 12.05 within ten
Business Days, unless such termination occurs pursuant to the Scheduled Final
Distribution Date.
(c) On the Scheduled Final Distribution Date, the Trustee shall
distribute to each Holder presenting and surrendering its Certificates, and to
each Holder delivering such security or indemnity to the Trustee as the Trustee
may require to save the Trustee and hold the Trustee harmless, the amount
distributable on such Distribution Date pursuant to Section 4.01 in respect of
the Certificates so presented and surrendered. Any funds not distributed on such
Distribution Date shall be set aside and held in trust for the benefit of
Holders either (i) not presenting and surrendering their Certificates in the
aforesaid manner or (ii) not delivering such security or indemnity to the
Trustee. as the Trustee may require to save the Trustee and hold the Trustee
harmless, and shall be disposed of in accordance with this Section and Sections
4.01 and 5.09. Immediately following the deposit of such funds in trust
hereunder, the Trust shall terminate.
ARTICLE XII
MISCELLANEOUS TERMS
Section 12.01. Amendment of Trust Agreement.
(a) The Trust Agreement may be amended from time to time by the
Depositor and the Trustee without the consent of or notice to any of the
Holders, upon delivery by the Depositor of an Opinion of Counsel acceptable to
the Trustee to the effect that such amendment will not adversely affect in any
material respect the interests of any Holder, for any of the following purposes:
(i) to cure any ambiguity to correct or supplement any provision herein which
may be inconsistent with any other provision herein or in the Prospectus
Supplement, (ii) to add or supplement any Credit Support for the benefit of any
Holders (provided that if any such addition affects any
44
series or class of Holders differently than any other series or class of
Holders, then such addition will not, as evidenced by an Opinion of Counsel,
have a material adverse effect on the interests of any affected series or class
of Holders), (iii) to add to the covenants, restrictions or obligations of the
Depositor, the Trust Administrator, if any, or the trustee for the benefit of
the Holders, (iv) to add, change or eliminate any other provisions with respect
to matters or questions arising under Trust Agreement so long as (x) any such
addition, change or elimination will not, as evidenced by an Opinion of Counsel,
affect the tax status of the Trust or result in a sale or exchange of any
Certificate for tax purposes and (y) the Rating Agency Condition is satisfied or
(v) to comply with any requirements imposed by the Code.
(b) The Trustee shall not agree to any other waiver, amendment or
modification to the Trust Agreement without the consent of the Holders of the
Required Percentage of Voting Rights, satisfaction of the Rating Agency
Condition and receipt by the Trustee of an Opinion of Counsel that such waiver,
amendment or modification shall not affect the tax status of the Trust or result
in a sale or exchange of any Certificate for tax purposes.
(c) Notwithstanding the foregoing, except as otherwise set forth in
the Terms Schedule, no waiver, modification or amendment may (i) reduce in any
manner the amount of or alter the timing of, distributions or payments which are
required to be made on any Certificate without the consent of the Holder of such
Certificate or (ii) reduce the aforesaid Required Percentage of Voting Rights
required for the consent to any amendment without the consent of the Holders of
all Certificates covered by the Trust Agreement then Outstanding.
Section 12.02. Waiver by Holders. Unless otherwise specified in the
applicable prospectus supplement and the Terms Schedule, holders of certificates
evidencing not less than the Required Percentage of the Voting Rights of a given
series may, on behalf of all certificateholders of that series, (i) waive,
insofar as that series is concerned, compliance by the Depositor, the Trustee or
the Trust Administrator, if any, with certain restrictive provisions, if any, of
the trust agreement before the time for such compliance and (ii) waive any past
default under the trust agreement with respect to certificates of that series,
except a default in the failure to distribute amounts received as principal of
(and premium, if any) or any interest on any such certificate and except a
default in respect of a covenant or provision the modification or amendment of
which would require the consent of the Holder of each outstanding certificate
affected thereby.
Section 12.03. Counterparts. The Trust Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 12.04. Limitation on Rights of Holders. (a) The death or
incapacity of any Holder shall not operate to terminate the Trust Agreement or
the Trust Property, nor entitle such Holder's legal representatives or heirs to
claim an accounting or to take any action or proceeding in any court for a
partition or winding up of the Trust Property, nor otherwise affect the rights,
obligations and liabilities of the parties thereto or any of them.
(b) Except as otherwise expressly provided herein, no Holder shall
have any right to control the operation and management of any Trust Property, or
the obligations of the parties thereto, nor shall anything in the Trust
Agreement set forth, or contained in the terms of the Certificates, be construed
so as to constitute the Holders from time to time as partners or members of an
association; nor shall any Holder be under any liability to any third person by
reason of any action taken by the parties to the Trust Agreement pursuant to any
provision thereof.
(c) No Holder shall have any right by virtue of any provision of the
Trust Agreement to institute any suit, action or proceeding in equity or at law
upon or under or with respect to the Trust Agreement, unless, and subject to the
Terms Schedule, the holder previously has given to the Trustee written notice of
breach and unless the holders of certificates evidencing not less than the
Required Percentage of the Voting Rights have made written request upon the
Trustee to institute such proceeding in its own name as Trustee thereunder and
have offered to the Trustee reasonable indemnity, and the Trustee for fifteen
days has neglected or refused to institute any such proceeding.
Section 12.05. Governing Law. The Trust Agreement and each Certificate
issued thereunder shall be governed by and construed in accordance with the laws
of the State of New York applicable to agreements made and to be performed
entirely therein without reference to such State's principles of conflicts of
law to the extent that the
45
application of the laws of another jurisdiction would be required thereby, and
the obligations, rights and remedies of the parties thereunder shall be
determined in accordance with such laws.
Section 12.06. Notices. All directions, demands and notices under the
Trust Agreement shall be in writing and shall be delivered to the offices of the
Trustee specified in the offering documents dated as of the Original Issue Date.
Unless otherwise provided in the Terms Schedule, any notice required to be given
to a holder of a Registered Certificate will be given by facsimile to such
number as may be provided to the Trustee or be mailed to the last address of
such holder set forth in the applicable Certificate Register. Any notice so
mailed within the time prescribed in the Trust Agreement shall be conclusively
presumed to have been duly given when mailed, whether or not the Holder receives
such notice. Notices given by facsimile will be effective upon confirmation
(including electronic confirmation) of effective transmission.
Section 12.07. Severability of Terms. If any one or more of the covenants,
agreements or terms of the Trust Agreement shall be for any reason whatsoever
held invalid, then such covenants, agreements or terms shall be deemed severable
from the remaining covenants, agreements or terms of the Trust Agreement and
shall in no way affect the validity or enforceability of the other terms of the
Trust Agreement or of the Certificates or the rights of the Holders thereof.
Section 12.08. Notice to Rating Agencies. The Trustee shall use its best
efforts promptly to provide notice to the Rating Agencies with respect to each
of the following of which it has actual knowledge:
(i) any material change or amendment to the Trust Agreement;
(ii) the occurrence of any Swap Default or Termination Event;
(iii) the resignation or termination of the Trustee;
(iv) the final payment to Holders of the Certificates;
(v) any change in the location of the Certificate Account; and
(vi) any Underlying Security Default.
In addition, the Trustee shall promptly furnish to the Rating Agencies
copies of each report to Holders described in Section 4.02. Any such notice
pursuant to this Section shall be in writing and shall be deemed to have been
duly given if personally delivered or mailed by first class mail, postage
prepaid, or by express delivery service to the Rating Agencies at the addresses
set forth in the Terms Schedule.
Section 12.09. Perfection of Swap Counterparty Security Interest. At the
request of the Swap Counterparty, the Trustee will assist the Swap Counterparty
in the perfection of the security interest in the Trust Property described in
Section 3.04 and granted by the Trust to the Counterparty under the Swap
Agreement.
Section 12.10. No Recourse. Each Holder by accepting a Certificate
acknowledges that such Holder's Certificates represent beneficial interests in
the Trust only and do not represent interests in or obligations of the
Depositor, the Trustee, the Swap Counterparty, the Swap Guarantor or any
Affiliate of the foregoing Persons and no recourse may be had against such
Persons or their respective assets, except as may be expressly set forth in the
Trust Agreement, the Swap Agreement or the Certificates.
Section 12.11. Conflict With Trust Indenture Act.
(a) If any provision hereof limits, qualifies or conflicts with
another provision hereof that is required to be included in this Agreement by
any of the provisions of the TIA, such required provision shall control.
(b) The provisions of the TIA Sections 310 through 317 that impose
duties on any Person (including the provisions automatically deemed included
herein unless expressly excluded by this Agreement) are a part of and govern
this Agreement, whether or not physically contained herein.
(c) Except as expressly provided in this Agreement, all provisions
specifically referencing the TIA shall be inapplicable until such time as this
Agreement is qualified under the TIA.
46
IN WITNESS WHEREOF, the Depositor and the Trustee have caused this
instrument to be duly executed by their respective officers thereunto duly
authorized as of the date first above written.
COMCERTZ ABS CORPORATION
By: ______________________________
Name:
Title:
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee on behalf of the Trust
identified in Schedule I to the Trust
Agreement dated today's date, and not in
its individual capacity
By: _______________________________
Name:
Title:
47
EXHIBIT A
TRUST AGREEMENT
TRUST AGREEMENT made as of the date set forth in Schedule I attached
hereto, which Schedule together with Schedules II and III attached hereto, are
made a part hereof and are hereinafter referred to collectively as the "Terms
Schedule." The terms of the Standard Terms for Trust Agreements, dated [__],
200[__] (the "Standard Terms"), executed by U.S. Bank Trust National
Association, as trustee (the "Trustee"), and COMCERTZ ABS CORPORATION (the
"Depositor") are, except to the extent otherwise expressly stated, hereby
incorporated by reference herein in their entirety with the same force and
effect as though set forth herein. Capitalized terms used herein and not defined
shall have the meanings defined in the Standard Terms. References to "herein",
"hereunder", "this Trust Agreement" and the like shall include the Terms
Schedule attached hereto and the Standard Terms so incorporated by reference.
WHEREAS, the Depositor and the Trustee desire to establish the Trust
identified in Schedule I attached hereto (the "Trust") for the primary purposes
of (i) holding the Underlying Securities, (ii) entering into any Swap Agreement
with the Swap Counterparty and (iii) issuing the Certificates;
WHEREAS, the Depositor desires that the respective beneficial interests in
the Trust be divided into transferable fractional shares, such shares to be
represented by the Certificates;
WHEREAS, the Depositor desires to appoint the Trustee as trustee of the
Trust and the Trustee desires to accept such appointment;
WHEREAS, the Depositor shall transfer, convey and assign to the Trust
without recourse, and the Trust shall acquire, all of the Depositor's right,
title and interest in and under the Underlying Securities and other property
identified in Schedule II to the Trust Agreement (the "Trust Property"); and
WHEREAS, the Trust agrees to acquire the Trust Property specified herein
in consideration for Certificates having an initial Certificate Principal
Balance identified in Schedule I attached hereto, subject to the terms and
conditions specified in the Trust Agreement;
NOW THEREFORE, the Depositor hereby appoints the Trustee as trustee
hereunder and hereby requests the Trustee to receive the Underlying Securities
from the Depositor and to issue in accordance with the instructions of the
Depositor Certificates having an initial Certificate Principal Balance
identified in Schedule I attached hereto, and the Trustee accepts such
appointment and, for itself and its successors and assigns, hereby declares that
it shall hold all the estate, right, title and interest in any property
contributed to the trust account established hereunder (except property to be
applied to the payment or reimbursement of or by the Trustee for any fees or
expenses which under the terms hereof is to be so applied) in trust for the
benefit of all present and future Holders of the fractional shares of beneficial
interest issued hereunder, namely, the Holders, and subject to the terms and
provisions hereof and of the Standard Terms.
48
IN WITNESS WHEREOF, each of the undersigned has executed this instrument
as of the date set forth in the Terms Schedule attached hereto.
U.S. BANK TRUST NATIONAL ASSOCIATION
as Trustee on behalf of the Trust
identified in Schedule I hereto, and not
in its individual capacity
By: _______________________________
Name:
Title:
COMCERTZ ABS CORPORATION
By: _______________________________
Name:
Title:
49
Attachments: Terms Schedule (consisting of Schedules I, II and III)
Schedule I
(Terms of Trust and Certificates)
Trust: Comcertz ABS Trust Series 200[__]-[__]
Date of Trust Agreement:
Trustee:
Initial Certificate Principal Balance:
Issue Price:
Cut-off Date:
Original Issue Date:
Specified Currency:
Business Day:
Initial Pass-Through Rate:
Pass-Through Rate: [If Fixed Rate Certificates, specify
the applicable fixed rate]
[If Floating Rate Certificates, specify
the applicable Base Rate, Spread and
Spread Multiplier]
Interest Reset Period:
Rating:
Rating Agencies:
Scheduled Final Distribution Date:
[Swap Agreement:] [The ISDA Agreement referred to in
Schedule III]
[Swap Counterparty:] [Party A to the Swap Agreement referred
to in Schedule III]
[Swap Guarantee:] [Any guarantee of Swap Counterparty's
obligations under the Swap Agreement
[Swap Guarantee:] specified in Schedule III]
[Swap Guarantor:] [The obligor under the Swap Guarantee]
[Swap Notional Amount:] [The Notional Amount specified in
Schedule III]
[Swap Payment Date:] [Each Payment Date specified in
Schedule III for Party A]
[Swap Rate:]
Distribution Date:
50
Record Date:
Form: [Global/Definitive Registered]
Minimum Denomination:
Depositary:
Alternative Non-Plan ERISA Restrictions: [Apply] [Do Not Apply]
Alternative ERISA Plan Assets [Apply] [Do Not Apply]
Representations:
QIB Restriction: [Applicable] [Not Applicable]
Additional Trust Wind-Up Event:
Exchangeable Series Terms:
Terms of Retained Interest:
Call Option Terms:
Required Percentage:
[Certificate Events of Default]: [missed interest/principal on the
Underlying Securities][other]
Underlying Security Default: [If different from Trust Agreement,
specify. Subject to confirmation from
rating agencies, failure to pay may be
modified if a Credit Support exists and
the occurrence of a waiver, deferral,
restructuring, rescheduling, exchange
or other adjustment with respect to the
Underlying Security such that the Swap
Counterparty reasonably determines that
the economic terms of the Underlying
Security are materially different or
the Underlying Security represents
materially greater credit or other
risks may be an Underlying Security
Default.]
Optional Exchange Terms:
Trigger Amount: [ $50,000 ]
Maximum Reimbursable Amount: [ o ]
[Maximum Number of Obligors:] [If the total number of obligors in
respect of Permitted Investments,
Underlying Securities, Swap Agreements,
Credit Support and other Deposited
Assets will exceed ten, specify the
number.]
Other Terms:
51
Schedule II
(Terms of Trust Property)
Underlying Securities
---------------------
Underlying Securities............... [A [ o ]%] [floating rate] [publicly
traded debt security due [ o ] [A pool
of publicly issued [debt securities of
various issuers] [United States treasury
securities] debt securities of various
United States government sponsored
entities] [debt securities of various
foreign government issuers], exclusive
of the Retained Interest [in/having] an
aggregate principal amount of [$][ o ].
Underlying Security Issuer ......... [Specify issuer] [Pool of various
domestic corporations, limited liability
companies, banking organizations and
insurance companies.] [Asset-backed
securities.] [A [ o ]%]-[floating rate]
[United States treasury securities]
[debt securities of various United
States government sponsored entities]
[Pool of various foreign private
issuers.], exclusive of the Retained
Interest] [in/having] an aggregate
principal amount of [$][ o ].
[Foreign Government Guarantor]......
[Specify guarantor, if any.]
[GSE Issuer]........................ [Specify issuer] [Pool of various U.S.
government sponsored entity issuers].
[Concentrated Underlying Securities] [[ o ]% of the total Underlying
Securities.] [Describe material
covenants in relation to any Underlying
Securities (including a Foreign
Government Security) that represents ten
percent or more of the total Underlying
Securities with respect to any series of
certificates]
Underlying Securities Original Issue [ o ].
Date................................
Underlying Securities Final Payment [ o ].
Date................................
Amortization........................ [Describe amortization schedule, if
any].
Denominations; Underlying
Securities Currency................. The Underlying Securities are
denominated and payable in [U.S.
dollars] [ o ] and are available in
minimum denominations of [$][ o ] and
[multiples thereof] [multiples of
[$][ o ]].
Underlying Securities Payment Dates. [ o ], commencing [ o ].
Underlying Securities Rate.......... [ % per annum.] [A [Weighted Average]
rate per annum equal to [specify
interest rate formula for debt
security].]
Underlying Securities Interest
Accrual Periods..................... [Monthly] [Quarterly] [Semi-annually].
Priority............................ [Describe senior or subordinated status
of any of Underlying Securities].
Security............................ [Describe existence of any security for
obligations or state that Underlying
Securities are unsecured].
Redemption/Put/Other Features....... [Describe existence of any redemption,
put or other material features
applicable to the Underlying
Securities].
Form of Security.................... Book-entry debt securities with DTC
[listed on the [New York] [American]
Stock Exchange [specify other listing]].
[Underlying Securities Trustee]..... [ o ]. The Underlying Securities have
been issued pursuant to an indenture
between
52
_______________ and the issuer of the
Underlying Securities].
[Fiscal and Paying Agent]........... [ o ] [The Underlying Securities have
been issued pursuant to a fiscal and
paying agency agreement, between
_______________ and the issuer of the
Underlying Securities] [specify other
agreement].
Ratings............................. [ o ] by [ o ] [and [ o ] by [ o ]].
Credit Support
[Credit Support]..... [Description of any combination of
insurance policies, letters of credit,
financial guaranty, surety bond, reserve
accounts and other types of rights or
assets designed to support or ensure the
servicing and distribution of amounts
due in respect of the Trust Property.]
[Credit Support Provider]........... [Description of the bank, financial
guarantor, surety company or other
financial institution issuing a letter
of credit, financial guaranty, surety
bond or other instrument that serves as
Credit Support.]
53
Schedule III
(Swap Terms)
54
