EXHIBIT 4.5.1
SERIES SUPPLEMENT
CORPORATE BACKED CALLABLE TRUST CERTIFICATES
X.X. XXXXXX DEBENTURE-BACKED SERIES 2006-1 TRUST
between
SELECT ASSET INC.,
as Depositor,
and
U.S. BANK NATIONAL ASSOCIATION,
as Trustee,
CORPORATE BACKED CALLABLE TRUST CERTIFICATES
Dated as of November 9, 2006
Table of Contents
Page
Section 1. Incorporation of Standard Terms........................1
Section 2. Definitions............................................1
Section 3. Designation of Trust and Certificates..................4
Section 4. Trust Certificates.....................................4
Section 5. Distributions..........................................5
Section 6. Miscellaneous..........................................6
Section 7. Governing Law..........................................7
Section 8. Counterparts...........................................7
Section 9. Amendments.............................................7
SCHEDULE I X.X. XXXXXX DEBENTURE-BACKED SERIES 2006-1 UNDERLYING
SECURITIES SCHEDULE
EXHIBIT A-1 FORM OF TRUST CERTIFICATE CLASS A-1
EXHIBIT A-2 FORM OF TRUST CERTIFICATE CLASS A-2
EXHIBIT B FORM OF WARRANT AGENT AGREEMENT
EXHIBIT C FORM OF INVESTMENT LETTER
i
SERIES SUPPLEMENT
CORPORATE BACKED CALLABLE TRUST CERTIFICATES
X.X. XXXXXX DEBENTURE-BACKED SERIES 2006-1
SERIES SUPPLEMENT, X.X. Xxxxxx Debenture-Backed Series 2006-1 Trust,
dated as of November 9, 2006 (the "Series Supplement"), by and between Select
Asset Inc., as Depositor (the "Depositor"), and U.S. Bank National Association,
as Trustee (the "Trustee").
W I T N E S S E T H:
WHEREAS, the Depositor desires to create the Trust designated herein
(the "Trust") by executing and delivering this Series Supplement, which shall
incorporate the terms of the Standard Terms for Trust Agreements, dated as of
the date hereof (the "Standard Terms" and, together with this Series Supplement,
the "Trust Agreement" in respect of the Trust), by and between the Depositor and
the Trustee, as modified by this Series Supplement;
WHEREAS, the Depositor desires to deposit into the Trust the
Underlying Securities described on Schedule I attached hereto, the general terms
of which are described in the Prospectus Supplement under the heading
"Description of the Deposited Assets--Underlying Securities;"
WHEREAS, in connection with the creation of the Trust and the
deposit therein of the Underlying Securities, it is desired to provide for the
issuance of trust certificates evidencing undivided interests in the Trust; and
WHEREAS, the Trustee has joined in the execution of the Standard
Terms and this Series Supplement to evidence the acceptance by the Trustee of
the Trust.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants expressed herein, it is hereby agreed by and between the
Depositor and the Trustee as follows:
Section 1. Incorporation of Standard Terms. Except as otherwise
provided herein, all of the provisions of the Standard Terms are hereby
incorporated herein by reference in their entirety, and this Series Supplement
and the Standard Terms shall form a single agreement between the parties. In the
event of any inconsistency between the provisions of this Series Supplement and
the provisions of the Standard Terms, the provisions of this Series Supplement
will control with respect to the X.X. Xxxxxx Debenture-Backed Series 2006-1
Certificates and the transactions described herein.
Section 2. Definitions.
(a) Except as otherwise specified herein or as the context may
otherwise require, the following terms shall have the respective meanings set
forth below for all purposes under this Series Supplement. Capitalized terms
used but not defined herein shall have the meanings
1
assigned to them in the Standard Terms. Terms defined in the Standard Terms but
not used herein shall not, unless otherwise indicated, apply to this Series
Supplement.
"Allocation Discount Rate" shall mean (x) in the case of the P&I
Class and the calculation of the P&I Class Allocation with respect thereto,
7.00% per annum, and (y) in the case of the IO Strip Class and the calculation
of the IO Strip Class Allocation with respect thereto, 7.00% per annum.
"Call Date" shall have the meaning set forth in the Warrant Agent
Agreement.
"Call Price" shall mean the purchase price of an Underlying Security
to be paid by the holder of a Call Warrant to the Trust in connection with its
exercise of a Call Warrant as specified in the Warrant Agent Agreement pursuant
to which the applicable Call Warrant was issued.
"Certificate Principal Balance" shall have the meaning specified in
Section 3 hereof.
"Certificates" shall have the meaning specified in Section 3 hereof.
"Class A-1 Certificates" shall mean the Certificates, in the form
attached hereto as Exhibit A-1, to be issued by the Trust representing a
proportionate undivided beneficial ownership interest in certain distributions
to be made by the Trust and having the characteristics described herein and in
the Certificates. The Class A-1 Certificates shall be a P&I Class for purposes
of the Trust Agreement.
"Class A-2 Certificates" shall mean the Certificates, in the form
attached hereto as Exhibit A-2, to be issued by the Trust representing a
proportionate undivided beneficial ownership interest in certain distributions
to be made by the Trust and having the characteristics described herein and in
the Certificates. The Class A-2 Certificates shall be an IO Strip Class for
purposes of the Trust Agreement.
"Class A-2 Rate" shall have the meaning set forth in Section 3
hereof.
"Closing Date" shall mean November 9, 2006.
"Collection Period" shall mean, (i) with respect to each March
Distribution Date, the period beginning on the day after the September
Distribution Date of the prior year (or in the case of the first Collection
Period, the Closing Date) and ending on such March Distribution Date, inclusive,
and (ii) with respect to each September Distribution Date, the period beginning
on the day after the March Distribution Date of such year and ending on such
September Distribution Date, inclusive; provided, however, that clauses (i) and
(ii) shall be subject to Section 4.01(j) of the Standard Terms.
"Depository" shall mean The Depository Trust Company, its nominees
and their respective successors.
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"Distribution Date" shall mean March 1 and September 1 of each year
(or if such date is not a Business Day, the next succeeding Business Day),
commencing on the Initial Distribution Date, and ending on the earlier of the
Final Scheduled Distribution Date and any date on which all Underlying
Securities are redeemed, prepaid or liquidated in whole for any reason other
than at their maturity.
"Final Scheduled Distribution Date" shall mean the Distribution Date
in March 2097.
"Initial Distribution Date" shall mean the Distribution Date in
March 2007.
"Maturity Date" shall have the meaning specified in Schedule I
hereto.
"Prepaid Ordinary Expenses" shall be zero for this Series.
"Prospectus Supplement" shall mean the final Prospectus Supplement,
dated October 27, 2006, relating to the offering of the Class A-1 Certificates.
"Rating Agencies" shall mean Xxxxx'x and S&P.
"Securities Intermediary" shall mean initially, U.S. Bank National
Association.
"Series" shall mean Corporate Backed Callable Trust Certificates,
X.X. Xxxxxx Debenture-Backed Series 2006-1.
"Trust Property" shall mean the Underlying Securities described on
Schedule I hereto, the Certificate Account and any additional Underlying
Securities sold to the Trust pursuant to Section 2.01(g) of the Standard Terms.
"Underlying Securities" shall mean $27,500,000 aggregate principal
amount of 7 5/8% Debentures due 2097 issued by the Underlying Securities
Issuer, as set forth in Schedule I attached hereto.
"Underlying Securities Guarantor" shall mean X.X. Xxxxxx Company,
Inc.
"Underlying Securities Events of Default" shall mean, any event of
default on the Underlying Securities under the Underlying Securities Issuance
Agreement.
"Underlying Securities Issuance Agreement" shall mean the Indenture,
dated as of April 1, 1994, between the Underlying Securities Issuer and U. S.
Bank National Association, as successor to First Trust of California, National
Association, successor trustee to Bank of America National Association Trust and
Saving Association and predecessor trustee to U.S. Bank, as supplemented and
pursuant to which the Underlying Securities were issued.
"Underlying Securities Issuer" shall mean X.X. Xxxxxx Corporation,
Inc.
"Underlying Securities Trustee" shall mean U. S. Bank National
Association, as successor to First Trust of California, National Association.
"Underwriter" shall mean Xxxxxx Brothers Inc.
3
"Warrant Agent Agreement" shall mean that certain Warrant Agent
Agreement, dated as of the date hereof, between the Depositor and U.S. Bank
National Association, as Warrant Agent and as Trustee, as the same may be
amended from time to time.
Section 3. Designation of Trust and Certificates. The Trust created hereby
shall be known as the "Corporate Backed Callable Trust Certificates, X.X. Xxxxxx
Debenture-Backed Series 2006-1 Trust." The Certificates evidencing certain
undivided ownership interests therein shall be known as "Corporate Backed
Callable Trust Certificates, X.X. Xxxxxx Debenture-Backed Series 2006-1." The
Certificates shall consist of the Class A-1 Certificates and the Class A-2
Certificates (together, the "Certificates").
(a) The Class A-1 Certificates shall be held through the Depository in
book-entry form and shall be substantially in the form attached hereto as
Exhibit A-1. The Class A-2 Certificates shall initially be held through the
Depository in book-entry form and, as set forth in Section 5.04(l) of the
Standard Terms, shall be held subsequent to the Closing Date in physical form or
through the Depository in book-entry form and shall be substantially in the form
attached hereto as Exhibit A-2. The Class A-1 Certificates shall be issued in
denominations of $25. The Class A-2 Certificates shall be issued in minimum
notional denominations of $100,000 and in integral multiples of $1 in excess
thereof; provided, however, that on any Call Date on which a Warrant Holder
shall purchase Underlying Securities in connection with the exercise of a Call
Warrant in accordance with the provisions of Section 4.08 of the Standard Terms,
Certificates may be issued in other denominations. Except as provided in the
Standard Terms, the Trust shall not issue additional Certificates or incur any
indebtedness.
(b) The Class A-1 Certificates shall consist initially of 1,100,000
Certificates having an initial aggregate certificate principal balance (the
"Certificate Principal Balance") of $27,500,000. The Class A-2 Certificates,
which are an IO Strip Class of Certificates, shall have an initial aggregate
Notional Amount of $27,500,000.
(c) The holders of the Class A-1 Certificates will be entitled to receive
on each Distribution Date the interest, if any, received on the Underlying
Securities, to the extent necessary to pay interest at a rate of 7.00% per annum
(the "Class A-1 Rate") on the outstanding Certificate Principal Balance of the
Class A-1 Certificates. The holders of the Class A-2 Certificates will be
entitled to receive on each Distribution Date the interest, if any, received on
the Underlying Securities, to the extent necessary to pay interest at a rate of
0.625% per annum (the "Class A-2 Rate") on the outstanding Notional Amount
thereof.
Section 4. Trust Certificates. The Trustee hereby acknowledges receipt, on
or prior to the Closing Date, of:
(a) the Underlying Securities set forth on Schedule I hereto and the
related Warrant Agent Agreement; and
(b) all documents required to be delivered to the Trustee pursuant to
Section 2.01 of the Standard Terms.
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Section 5. Distributions.
(a) Except as otherwise provided in Section 5(b) hereof, and in Sections
4.01(c), 4.01(d), 4.01(g), 4.01(h) and 4.01(i) of the Standard Terms, on each
applicable Distribution Date, on each Distribution Date, the Trustee shall apply
Available Funds in the Certificate Account as follows:
(i) The Trustee will pay the interest portion of Available Funds:
(1) first, to the Trustee, as reimbursement for any
Extraordinary Trust Expenses incurred by the Trustee in accordance
with Section 7.06(b) of the Standard Terms and approved by 100% of
the Certificateholders; and
(2) second, to the holders of the Class A-1 Certificates and
the Class A-2 Certificates, accrued and unpaid interest on each such
Class (as determined in accordance with Section 3(c)) pro rata in
proportion to their entitlements thereto.
(ii) the Trustee will pay the principal portion of Available Funds:
(1) first, to the Trustee, as reimbursement for any remaining
Extraordinary Trust Expenses incurred by the Trustee in accordance
with Section 7.06(b) of the Standard Terms and approved by 100% of
the Certificateholders; and
(2) second, to the holders of the Class A-1 Certificates, an
amount equal to the Certificate Principal Balance of the Class A-1
Certificates (the Class A-2 Certificates are not entitled to
distributions of principal).
(iii) any Available Funds remaining in the Certificate Account after
the payments set forth in clauses 5(a)(i) and 5(a)(ii) above shall be paid
to the Trustee as reasonable compensation for services rendered to the
Depositor, up to $1,000.
(iv) the Trustee will pay any Available Funds remaining in the
Certificate Account after the distributions in clauses 5(a)(i) through
5(a)(iii) above to the holders of the Class A-1 Certificates and Class A-2
Certificates pro rata in accordance with the ratio of the P&I Class
Allocation to the IO Strip Class Allocation.
Any funds received in respect of the Underlying Securities from the Underlying
Securities Guarantor shall be included in Available Funds on the related
Distribution Date or Special Distribution Date. Any portion of the Available
Funds (i) that does not constitute principal of, or interest on, the Underlying
Securities, (ii) that is not received in connection with (A) an exercise of a
Call Warrant related to the Underlying Securities or (B) a tender offer,
redemption, prepayment or liquidation of the Underlying Securities and (iii) for
which allocation by the Trustee is not otherwise contemplated by this Series
Supplement, shall be remitted by the Trustee to the holders of the Class A-1
Certificates and the holders of the Class A-2 Certificates in accordance with
the ratio of the P&I Class Allocation to the IO Strip Class Allocation.
(b) Notwithstanding the foregoing, if the Underlying Securities:
5
(i) are purchased from the Trust in connection with an exercise of a
Call Warrant relating to the Underlying Securities, the Trustee shall
apply the Call Price to the payment of the redemption price of the Class
A-1 and/or Class A-2 Certificates in accordance with the provisions of
Section 6 hereof;
(ii) are redeemed, prepaid or liquidated, in whole or in part, due
to the occurrence of an Underlying Securities Event of Default or an SEC
Reporting Failure, Available Funds will be allocated to the holders of the
Class A-1 Certificates and the holders of the Class A-2 Certificates in
accordance with the ratio of the P&I Class Allocation to the IO Strip
Class Allocation; and
(iii) are redeemed, prepaid or liquidated in whole or in part for
any reason other than due to (A) an exercise of a Call Warrant related to
the Underlying Securities or (B) the occurrence of an Event of Default, an
SEC Reporting Failure, or the Final Scheduled Distribution Date, the
Trustee shall apply Available Funds in the manner described in Section
4.01(g) of the Standard Terms in the following order of priority:
(1) first, to the Trustee, as reimbursement for any Extraordinary
Trust Expenses incurred by the Trustee in accordance with
Section 7.06(b) of the Standard Terms and approved by 100% of
the Certificateholders;
(2) second, to the holders of the Class A-1 Certificates and the
holders of the Class A-2 Certificates, an amount equal to any
accrued and unpaid interest thereon pro rata in proportion to
their entitlements thereto;
(3) third, to the holders of the Class A-1 Certificates, pro rata
in proportion to their outstanding Certificate Principal
Balances;
(4) fourth, to the Trustee, as reasonable compensation for
services rendered to the Depositor, any remainder up to
$1,000; and
(5) fifth, to the holders of the Class A-1 Certificates and the
Class A-2 Certificates pro rata in proportion to the ratio of
the P&I Class Allocation to the IO Strip Class Allocation.
Section 6. Mandatory Redemption Upon Exercise of Call Warrants. On any
Call Date on which a Call Warrant Holder purchases Underlying Securities from
the Trust in connection with an exercise of a Call Warrant, a principal amount
of Class A-1 Certificates and a Notional Amount of Class A-2 Certificates equal,
in each case, to the principal amount of the Underlying Securities so purchased
shall be redeemed at a redemption price equal to (i) with respect to each Class
A-1 Certificate being redeemed, its par value (i.e., an amount equal to $25 per
Class A-1 Certificate) plus any accrued and unpaid interest to the Call Date,
and (ii) with respect to each Class A-2 Certificate being redeemed, the present
value of all amounts payable on such Notional Amount of Class A-2 Certificates
for the period from the related Call Date to the Final Scheduled Distribution
Date using a discount rate of 8.25% per annum (assuming no delinquencies,
deferrals, redemptions or prepayments on such called Underlying Securities) plus
accrued and unpaid interest to the date of redemption on the Notional Amount of
such Class A-2 Certificates; provided that the exercising Call Warrant holder
pays the Call Price to the Trustee
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on or prior to such Call Date. In the event that less than all of the Underlying
Securities are purchased at any time, the Trustee or DTC will select the Class
A-1 Certificates and Class A-2 Certificates to be redeemed by lot from first,
the Class A-1 Certificates to be redeemed by lot from among all of the Class A-1
Certificates then outstanding and, second, if the aggregate principal amount of
Underlying Securities purchased exceeds the aggregate principal balance of the
Class A-1 Certificates outstanding as of the Call Date, the Class A-2
Certificates to be redeemed by lot from among all of the Class A-2 Certificates
then outstanding.
Section 7. Miscellaneous.
(a) All directions, demands and notices hereunder shall be in writing and
shall be delivered as set forth in the Standard Terms (unless written notice is
otherwise provided to the Trustee).
Section 8. Governing Law. THIS SERIES SUPPLEMENT AND THE TRANSACTIONS
DESCRIBED HEREIN SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED WITHIN
THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CHOICE OF LAWS PROVISIONS
THEREOF.
Section 9. Counterparts. This Series Supplement may be executed in any
number of counterparts, each of which shall be deemed to be an original, and all
such counterparts shall constitute but one and the same instrument.
Section 10. Amendments. Notwithstanding anything in the Trust Agreement to
the contrary, in addition to the other restrictions on modification and
amendment contained therein, the Trustee shall not enter into any amendment or
modification of the Trust Agreement which would adversely affect in any material
respect the interests of the holders of any class of Certificates without the
consent of the holders of 100% of such class of Certificates; provided, however,
that no such amendment or modification will be permitted which would cause the
Trust to be taxed as an association or publicly traded partnership taxable as a
corporation for federal income tax purposes. Unless otherwise agreed, the
Trustee shall provide five Business Days written notice to each Rating Agency
before entering into any amendment or modification of the Trust Agreement
pursuant to this Section 10.
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IN WITNESS WHEREOF, the parties hereto have caused this Series
Supplement to be duly executed by their respective authorized officers as of the
date first written above.
SELECT ASSET INC.,
as Depositor
By: /s/ Xxxxxxx Xxxxxx
----------------------------------
Name: Xxxxxxx Xxxxxx
Title:
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Trustee on behalf of the Corporate
Backed Callable Trust Certificates, X.X.
Xxxxxx Debenture-Backed Series 2006-1 Trust
By: /s/ Xxxxx X. X'Xxxx
----------------------------------
Name: Xxxxx X. X'Xxxx
Title: Assistant Vice President
8
SCHEDULE I
X.X. XXXXXX DEBENTURE-BACKED SERIES 2006-1 TRUST
UNDERLYING SECURITIES SCHEDULE
Underlying Securities: 7 5/8% Debentures due March 1, 2097
Issuer: X.X. Xxxxxx Corporation, Inc.
Underlying Securities Guarantor: X.X. Xxxxxx Company, Inc.
CUSIP Number: 000000XX0
Principal Amount Deposited: $27,500,000
Original Issue Date: February 20, 1997
Principal Amount of
Underlying Securities
Originally Issued: $500,000,000
Maturity Date: March 1, 2097
Interest Rate: 7 5/8%
Interest Payment Dates: March 1 and September 1
I-1
EXHIBIT A-1
FORM OF TRUST CERTIFICATE CLASS A-1
CLASS A-1 CERTIFICATE
NUMBER 1 1,100,000 $25 PAR CERTIFICATES
CUSIP NO. 21988S 20 9
SEE REVERSE FOR CERTAIN DEFINITIONS
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE REPRESENTS A PROPORTIONATE UNDIVIDED BENEFICIAL OWNERSHIP
INTEREST IN THE TRUST AND DOES NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN,
AND IS NOT GUARANTEED BY THE DEPOSITOR OR THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE TRUST ASSETS ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR ANY OTHER PERSON.
THE CERTIFICATEHOLDER, BY ITS ACCEPTANCE OF THIS CERTIFICATE, COVENANTS AND
AGREES TO TENDER ANY AND ALL CERTIFICATES SELECTED FOR REDEMPTION TO THE TRUSTEE
UPON THE WARRANT HOLDER'S EXERCISE OF CALL WARRANTS AND PAYMENT OF THE CALL
PRICE FOR THE RELATED UNDERLYING SECURITIES IN ACCORDANCE WITH THE PROVISIONS
HEREOF AND OF THE WARRANT AGENT AGREEMENT.
A-1-1
SELECT ASSET INC.
1,100,000 $25 PAR
CORPORATE BACKED CALLABLE TRUST CERTIFICATES,
X.X. XXXXXX DEBENTURE-BACKED SERIES 2006-1
7.00% INTEREST RATE
evidencing a proportionate undivided beneficial ownership interest in the Trust,
as defined below, the property of which consists principally of $27,500,000
aggregate principal amount of 7 5/8% Debentures due 2097, issued by X.X. Xxxxxx
Corporation, Inc (the "Underlying Securities Issuer") and all payments received
thereon (the "Trust Property"), deposited in trust by Select Asset Inc. (the
"Depositor").
THIS CERTIFIES THAT CEDE & CO. is the registered owner of 1,100,000 Class
A-1 Certificates issued by the Corporate Backed Trust Certificates, X.X. Xxxxxx
Debenture-Backed Series 2006-1 Trust (the "Trust"), having an aggregate
Certificate Principal Balance of $27,500,000, representing a nonassessable,
fully-paid, proportionate undivided beneficial ownership interest in the X.X.
Xxxxxx Debenture-Backed Series 2006-1 Trust, formed by the Depositor.
The Trust was created pursuant to a Standard Terms for Trust Agreements,
dated as of November 9, 2006 (the "Standard Terms"), between the Depositor and
U.S. Bank National Association, not in its individual capacity but solely as
Trustee (the "Trustee"), as supplemented by the Series Supplement in respect of
the Corporate Backed Callable Trust Certificates, X.X. Xxxxxx Debenture-Backed
Series 2006-1 Trust, dated as of November 9, 2006 (the "Series Supplement" and,
together with the Standard Terms, the "Trust Agreement"), between the Depositor
and the Trustee. This Certificate does not purport to summarize the Trust
Agreement and reference is hereby made to the Trust Agreement for information
with respect to the interests, rights, benefits, obligations, proceeds and
duties evidenced hereby and the rights, duties and obligations of the Trustee
with respect hereto. A copy of the Trust Agreement may be obtained from the
Trustee by written request sent to the Corporate Trust Office. Capitalized terms
used but not defined herein have the meanings assigned to them in the Trust
Agreement.
This Certificate is one of the duly authorized Certificates designated as
the "Corporate Backed Callable Trust Certificates, X.X. Xxxxxx Debenture-Backed
Series 2006-1, Class A-1" (herein called the "Certificates"). This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Trust Agreement, to which Trust Agreement the Holder of this Certificate by
virtue of the acceptance hereof assents and by which such Holder is bound. The
Trust Property consists of: (i) Underlying Securities described in the Trust
Agreement, and (ii) all payments on or collections in respect of the Underlying
Securities accrued on or after November 9, 2006, together with any and all
income, proceeds and payments with respect thereto; provided, however, that any
income from the investment of Trust funds in certain permitted investments
("Eligible Investments") does not constitute Trust Property.
A-1-2
Subject to the terms and conditions of the Trust Agreement (including the
availability of funds for distributions) and until the obligation created by the
Trust Agreement shall have terminated in accordance therewith, distributions
will be made on each Distribution Date, to the Person in whose name this
Certificate is registered on the applicable Record Date, in an amount equal to
such Certificateholder's proportionate undivided beneficial ownership interest
in the amount required to be distributed to the Holders of the Certificates on
such Distribution Date. The Record Date applicable to any Distribution Date is
the close of business on the day immediately preceding such Distribution Date
(whether or not a Business Day). If a payment with respect to the Underlying
Securities is made to the Trustee after the date on which such payment was due,
then the Trustee will distribute any such amounts received on the next occurring
Business Day.
Each Certificateholder, by its acceptance of a Certificate, covenants and
agrees that such Certificateholder will not, until the date which is one year
and one day after the termination of the Trust, institute against the Trust, or
join in any institution against the Trust of, any bankruptcy proceedings under
any United States Federal or state bankruptcy or similar law in connection with
any obligations relating to the Certificates or the Trust Agreement.
Distributions made on this Certificate will be made as provided in the
Trust Agreement by the Trustee by wire transfer in immediately available funds,
or check mailed to the Certificateholder of record in the Certificate Register
without the presentation or surrender of this Certificate or the making of any
notation hereon, except that with respect to Certificates registered on the
Record Date in the name of the nominee of the Clearing Agency (initially, such
nominee shall be Cede & Co.), payments will be made by wire transfer in
immediately available funds to the account designated by such nominee. Except as
otherwise provided in the Trust Agreement and notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the Corporate Trust Office or such other
location as may be specified in such notice.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee, by manual signature, this Certificate shall not entitle
the Holder hereof to any benefit under the Trust Agreement or be valid for any
purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE HOLDER HEREOF SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
A-1-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed as of the date set forth below.
CORPORATE BACKED CALLABLE TRUST
CERTIFICATES, X.X. XXXXXX DEBENTURE-BACKED
SERIES 2006-1 TRUST
By: U.S. Bank National Association not in
its individual capacity but solely as
Trustee,
By:
-----------------------------
Authorized Signatory
Dated: November 9, 2006
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Corporate Backed Callable Trust Certificates, X.X. Xxxxxx
Debenture-Backed Series 2006-1, described in the Trust Agreement referred to
herein.
U.S. Bank National Association
not in its individual capacity but solely as Trustee,
By:
---------------------------
Authorized Signatory
A-1-4
(REVERSE OF CERTIFICATE)
The Certificates are limited in right of distribution to certain payments and
collections respecting the Underlying Securities, all as more specifically set
forth herein and in the Trust Agreement. The registered Holder hereof, by its
acceptance hereof, agrees that it will look solely to the Trust Property (to the
extent of its rights therein) for distributions hereunder.
The Trust Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the Trustee and the rights of the Certificateholders under the
Trust Agreement at any time by the Depositor and the Trustee with the consent of
the Holders of Class A-1 Certificates in the manner set forth in the Series
Supplement and the Standard Terms. Any such consent by the Holder of this
Certificate (or any predecessor Certificate) shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange hereof or in lieu
hereof whether or not a notation of such consent is made upon this Certificate.
The Trust Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
The Certificates are issuable in fully registered form only in denominations of
$100,000.
As provided in the Trust Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registerable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies of the Certificate Registrar maintained by the Trustee in
the Borough of Manhattan, the City of New York, duly endorsed by or accompanied
by an assignment in the form below and by such other documents as required by
the Trust Agreement, and thereupon one or more new Certificates of the same
class in authorized denominations evidencing the same principal amount will be
issued to the designated transferee or transferees. The initial Certificate
Registrar appointed under the Trust Agreement is U.S. Bank National Association.
No service charge will be made for any registration of transfer or exchange, but
the Trustee may require exchange of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.
The Depositor and the Trustee and any agent of the Depositor or the Trustee may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trustee, nor any such
agent shall be affected by any notice to the contrary.
It is the intention of the parties to the Trust Agreement that the Trust created
thereunder shall constitute a fixed investment trust for federal income tax
purposes under Treasury Regulation Section 301.7701-4, and the Certificateholder
agrees to treat the Trust, any distributions therefrom and its beneficial
interest in the Certificates consistently with such characterization.
The Trust and the obligations of the Depositor and the Trustee created by the
Trust Agreement with respect to the Certificates shall terminate upon the
earliest to occur of (i) the payment in full at maturity or sale by the Trust
after a payment default on or an acceleration or other early payment of the
Underlying Securities and the distribution in full of all amounts due to the
Class A-1 Certificateholders and Class A-2 Certificateholders; (ii) the exercise
of all outstanding Call
A-1-5
Warrants by the Warrant Holders; (iii) the Final Scheduled Distribution Date and
(iv) the expiration of 21 years from the death of the last survivor of the
descendants of Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to
the Court of St. Xxxxx, living on the date hereof.
An employee benefit plan subject to the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), a plan described in Section 4975(e) of the Code,
an entity whose underlying assets include plan assets by reason of any such
plan's investment in the entity, including an individual retirement account or
Xxxxx plan (any such, a "Plan") may purchase and hold Certificates if the Plan
can represent and warrant that its purchase and holding of the Certificates
would not be prohibited under ERISA or the Code.
A-1-6
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
(Please print or type name and address, including postal zip code, of assignee)
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing ______________________ Attorney to transfer said
Certificate on the books of the Certificate Register, with full power of
substitution in the premises.
Dated:
*
Signature Guaranteed:
*
*NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Signatures must be guaranteed by
an "eligible guarantor institution" meeting the requirements of the Certificate
Registrar, which requirements include membership or participation in the
Security Transfer Agent Medallion Program ("STAMP") or such other "signature
guarantee program" as may be determined by the Certificate Registrar in addition
to, or in substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.
A-1-7
EXHIBIT A-2
FORM OF TRUST CERTIFICATE CLASS A-2
CLASS A-2 CERTIFICATE
NUMBER 1 CUSIP NO. 21988S AA 8
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS CLASS A-2 CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION UNDER
SUCH ACT IS IN EFFECT OR PURSUANT TO AN EXEMPTION THEREFROM UNDER SUCH ACT. THE
CLASS A-2 CERTIFICATE REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN ACCORDANCE
WITH THE TERMS OF THE SERIES SUPPLEMENT.
EACH PURCHASER OF THIS CLASS A-2 CERTIFICATE IS HEREBY NOTIFIED THAT
THE SELLER OF THIS CLASS A-2 CERTIFICATE MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.
THE NOTIONAL AMOUNT OF THIS CLASS A-2 CERTIFICATE IS AS SET FORTH
HEREIN. ACCORDINGLY, THE NOTIONAL AMOUNT OF THIS CLASS A-2 CERTIFICATE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE REPRESENTS A PROPORTIONATE UNDIVIDED BENEFICIAL
OWNERSHIP INTEREST IN THE TRUST AND DOES NOT EVIDENCE AN OBLIGATION OF, OR AN
INTEREST IN, AND IS NOT GUARANTEED BY THE DEPOSITOR OR THE TRUSTEE OR ANY OF
THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE OR THE TRUST ASSETS ARE
INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR ANY OTHER PERSON.
THE CERTIFICATEHOLDER, BY ITS ACCEPTANCE OF THIS CERTIFICATE,
COVENANTS AND AGREES TO TENDER ANY AND ALL
A-2-1
CERTIFICATES SELECTED FOR REDEMPTION TO THE TRUSTEE UPON THE WARRANT HOLDER'S
EXERCISE OF CALL WARRANTS AND PAYMENT OF THE CALL PRICE FOR THE RELATED
UNDERLYING SECURITIES IN ACCORDANCE WITH THE PROVISIONS HEREOF AND OF THE
WARRANT AGENT AGREEMENT.
A-2-2
SELECT ASSET INC.
CORPORATE BACKED CALLABLE TRUST CERTIFICATES,
X.X. XXXXXX DEBENTURE-BACKED SERIES 2006-1
$27,500,000 NOTIONAL AMOUNT
0.625% INTEREST RATE
evidencing a proportionate undivided beneficial ownership interest in the Trust,
as defined below, the property of which consists principally of $27,500,000
aggregate principal amount of 7 5/8% Debentures due 2097, issued by X.X. Xxxxxx
Corporation, Inc. and all payments received thereon (the "Trust Property"),
deposited in trust by Select Asset Inc. (the "Depositor").
THIS CERTIFIES THAT CEDE & CO. is the registered owner of Class A-2
Certificates issued by the Corporate Backed Callable Trust Certificates, X.X.
Xxxxxx Debenture-Backed Series 2006-1 Trust (the "Trust"), having an aggregate
Notional Amount of $27,500,000, representing a nonassessable, fully-paid,
proportionate undivided beneficial ownership interest in the Trust, formed by
the Depositor.
The Trust was created pursuant to a Standard Terms for Trust
Agreements, dated as of November 9, 2006 (the "Standard Terms"), between the
Depositor and U.S. Bank National Association, not in its individual capacity but
solely as Trustee (the "Trustee"), as supplemented by the Series Supplement,
Corporate Backed Callable Trust Certificates, X.X. Xxxxxx Debenture-Backed
Series 2006-1 Trust, dated as of November 9, 2006 (the "Series Supplement" and,
together with the Standard Terms, the "Trust Agreement"), between the Depositor
and the Trustee. This Certificate does not purport to summarize the Trust
Agreement and reference is hereby made to the Trust Agreement for information
with respect to the interests, rights, benefits, obligations, proceeds and
duties evidenced hereby and the rights, duties and obligations of the Trustee
with respect hereto. A copy of the Trust Agreement may be obtained from the
Trustee by written request sent to the Corporate Trust Office. Capitalized terms
used but not defined herein have the meanings assigned to them in the Trust
Agreement.
This Certificate is one of the duly authorized Certificates
designated as the "Corporate Backed Callable Trust Certificates, X.X. Xxxxxx
Debenture-Backed Series 2006-1, Class A-2" (herein called the "Certificates").
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Trust Agreement the Holder of this
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound. The Trust Property consists of: (i) Underlying Securities described in
the Trust Agreement, and (ii) all payments on or collections in respect of the
Underlying Securities accrued on or after November 9, 2006, together with any
and all income, proceeds and payments with respect thereto; provided, however,
that any income from the investment of Trust funds in certain permitted
investments ("Eligible Investments") does not constitute Trust Property.
Subject to the terms and conditions of the Trust Agreement
(including the availability of funds for distributions) and until the obligation
created by the Trust Agreement
A-2-3
shall have terminated in accordance therewith, distributions of interest will be
made on this Certificate on each Distribution Date.
Subject to the terms and conditions of the Trust Agreement
(including the availability of funds for distributions) and until the obligation
created by the Trust Agreement shall have terminated in accordance therewith,
distributions will be made on each Distribution Date, to the Person in whose
name this Certificate is registered on the applicable Record Date, in an amount
equal to such Certificateholder's proportionate undivided beneficial ownership
interest in the amount required to be distributed to the Holders of the
Certificates on such Distribution Date.
The Record Date applicable to any Distribution Date is the close of
business on the day immediately preceding such Distribution Date (whether or not
a Business Day). If a payment with respect to the Underlying Securities is made
to the Trustee after the date on which such payment was due, then the Trustee
will distribute any such amounts received on the next occurring Business Day.
Each Certificateholder, by its acceptance of a Certificate,
covenants and agrees that such Certificateholder will not, until the date which
is one year and one day after the termination of the Trust, institute against
the Trust, or join in any institution against the Trust of, any bankruptcy
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Certificates or the Trust
Agreement.
Distributions made on this Certificate will be made as provided in
the Trust Agreement by the Trustee by wire transfer in immediately available
funds, or check mailed to the Certificateholder of record in the Certificate
Register without the presentation or surrender of this Certificate or the making
of any notation hereon, except that with respect to Certificates registered on
the Record Date in the name of the nominee of the Clearing Agency (initially,
such nominee shall be Cede & Co.), payments will be made by wire transfer in
immediately available funds to the account designated by such nominee. Except as
otherwise provided in the Trust Agreement and notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the Corporate Trust Office or such other
location as may be specified in such notice.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this Certificate shall not
entitle the Holder hereof to any benefit under the Trust Agreement or be valid
for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE HOLDER HEREOF SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
A-2-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed as of the date set forth below.
CORPORATE BACKED CALLABLE TRUST
CERTIFICATES, X.X. XXXXXX
DEBENTURE-BACKED SERIES 2006-1 TRUST
By: U.S. Bank National Association
not in its individual capacity but
solely as Trustee,
By:
---------------------------------
Authorized Signatory
Dated: November 9, 2006
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Corporate Backed Callable Trust Certificates, X.X. Xxxxxx
Debenture-Backed Series 2006-1, described in the Trust Agreement referred to
herein.
U.S. Bank National Association
not in its individual capacity but solely as Trustee,
By:
---------------------------
Authorized Signatory
A-2-5
(REVERSE OF CERTIFICATE)
The Certificates are limited in right of distribution to certain
payments and collections respecting the Underlying Securities, all as more
specifically set forth herein and in the Trust Agreement. The registered Holder
hereof, by its acceptance hereof, agrees that it will look solely to the Trust
Property (to the extent of its rights therein) for distributions hereunder.
The Trust Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the Trustee and the rights of the
Certificateholders under the Trust Agreement at any time by the Depositor and
the Trustee with the consent of the holders of Class A-2 Certificates in the
manner set forth in the Series Supplement and the Standard Terms. Any such
consent by the Holder of this Certificate (or any predecessor Certificate) shall
be conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Trust Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.
The Certificates are issuable in fully registered form only in
denominations of $100,000 and in integral multiples of $1 in excess thereof,
provided, however, that the Certificates will only be transferable in an
aggregate Notional Amount equal to or greater than $100,000.
As provided in the Trust Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registerable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies of the Certificate Registrar maintained
by the Trustee in the Borough of Manhattan, the City of New York, duly endorsed
by or accompanied by an assignment in the form below and by such other documents
as required by the Trust Agreement, and thereupon one or more new Certificates
of the same class in authorized denominations evidencing the same Notional
Amount will be issued to the designated transferee or transferees. The initial
Certificate Registrar appointed under the Trust Agreement is U.S. Bank National
Association.
No service charge will be made for any registration of transfer or
exchange, but the Trustee may require exchange of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
The Depositor and the Trustee and any agent of the Depositor or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Trustee, nor any
such agent shall be affected by any notice to the contrary.
It is the intention of the parties to the Trust Agreement that the
Trust created thereunder shall constitute a fixed investment trust for federal
income tax purposes under Treasury Regulation Section 301.7701-4, and the
Certificateholder agrees to treat the Trust, any distributions therefrom and its
beneficial interest in the Certificates consistently with such characterization.
A-2-6
The Trust and the obligations of the Depositor and the Trustee
created by the Trust Agreement with respect to the Certificates shall terminate
upon the earliest to occur of (i) the payment in full at maturity or sale by the
Trust after a payment default on or an acceleration or other early payment of
the Underlying Securities and the distribution in full of all amounts due to the
Class A-1 Certificateholders and Class A-2 Certificateholders; (ii) the exercise
of all outstanding Call Warrants by the Warrant Holders; (iii) the Final
Scheduled Distribution Date and (iv) the expiration of 21 years from the death
of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
Ambassador of the United States to the Court of St. Xxxxx, living on the date
hereof.
An employee benefit plan subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), a plan described in Section 4975(e)
of the Code, an entity whose underlying assets include plan assets by reason of
any such plan's investment in the entity, including an individual retirement
account or Xxxxx plan (any such, a "Plan") may purchase and hold Certificates if
the Plan can represent and warrant that its purchase and holding of the
Certificates would not be prohibited under ERISA or the Code.
A-2-7
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
(Please print or type name and address, including postal zip code, of assignee)
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing ____________________ Attorney to transfer said
Certificate on the books of the Certificate Register, with full power of
substitution in the premises.
Dated:
*
Signature Guaranteed:
*
*NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Signatures must be guaranteed by
an "eligible guarantor institution" meeting the requirements of the Certificate
Registrar, which requirements include membership or participation in the
Security Transfer Agent Medallion Program ("STAMP") or such other "signature
guarantee program" as may be determined by the Certificate Registrar in addition
to, or in substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.
A-2-8
EXHIBIT B
FORM OF WARRANT AGENT AGREEMENT
WARRANT AGENT AGREEMENT
SELECT ASSET INC. WARRANTS
Series 2006-1 Trust
WARRANT AGENT AGREEMENT, dated as of November 9, 2006 (the
"Warrant Agent Agreement"), by and between SELECT ASSET INC., as Warrant
Originator (the "Warrant Originator"), and U.S. Bank National Association, as
Warrant Agent (the "Warrant Agent").
W I T N E S S E T H:
In consideration of the mutual covenants expressed herein, the
Warrant Originator and the Warrant Agent have duly authorized the execution and
delivery of this Warrant Agent Agreement to provide for the issuance of Call
Warrants, issuable as provided herein.
ARTICLE I
DEFINITIONS
Capitalized terms used herein but not defined herein have the
meanings set forth in the Trust Agreement. As used herein, unless the context
otherwise requires, the following terms have the following respective meanings:
"Standard Terms": As defined in Section 2.1 hereof.
"Business Day": As defined in the Trust Agreement.
"Call Date": Any Business Day that any Holder of Call Warrants
designates as a Call Date occurring on or after the Scheduled Call Commencement
Date, or prior thereto, on any Business Day (i) following an announcement by the
Underlying Securities Issuer of any redemption, prepayment or unscheduled
payment of principal on the Underlying Securities (but on or before the date any
such redemption, prepayment or unscheduled payment is made), (ii) following
notification from the Trustee to Certificateholders of an Event of Default or an
SEC Reporting Failure (but on or before the date of any proposed sale of the
Underlying Securities pursuant to Section 3.11 or 4.1(i) of the Standard Terms)
or (iii) during the period following an announcement by the Underlying
Securities Issuer or an Affiliate thereof of any proposed tender offer for some
or all of the Underlying Securities (but on or before the date such tender offer
expires or is consummated).
"Call Notice": As defined in Section 3.1(a)(ii) hereof.
"Call Price": With respect to each Call Warrant being
exercised, an amount equal to the sum of (i) $1,000 (correlating to the
aggregate principal balance of Class A-1 Certificates that will be redeemed with
the proceeds of the exercise of the Call Warrant); (ii) accrued and unpaid
interest to the date of redemption on the principal balance of such Class A-1
Certificates; (iii) the present value of all amounts payable on $1,000 Notional
Amount of Class A-2 Certificates for the period from the related Call Date to
the Final Scheduled Distribution
Date using a discount rate of 8.25% per annum, assuming no delinquencies,
deferrals, redemptions or prepayments on the Called Underlying Securities and
(iv) accrued and unpaid interest to the date of redemption on the Notional
Amount of such Class A-2 Certificates.
"Call Warrants": As defined in Section 2.2 hereof.
"Called Underlying Securities": As defined in Section 3.1(b)
hereof.
"Certificated Call Warrant": A definitive physical Call
Warrant in fully registerable form.
"Depositor": As defined in the recitals.
"Depositor Order": As defined in the Trust Agreement.
"Depository": The Depository Trust Company
"Global Call Warrant": Means a definitive, fully registered
Call Warrant deposited with the Warrant Agent as custodian for, and registered
in the name of, a nominee of the Depository.
"Investor Representation Letter": A letter substantially in
the form of Exhibit A attached hereto, duly completed as appropriate.
"Issue Date": November 9, 2006
"Participant": A broker, dealer, bank, other financial
institution or other Person for whom, from time to time, a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"Person": Any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or government
or any agency or political subdivision thereof.
"Purchaser": Any Person who acquires a Call Warrant
represented by an interest in a Global Call Warrant or Certificated Call
Warrant.
"QIB": As defined in Section 4.1 hereof.
"Rating Agencies": Standard & Poor's Ratings Services, a
division of The McGraw Hill Companies, Inc. and Xxxxx'x Investors Service, Inc.
and any successor thereto.
"Registered Warrant Amount": The Warrant Amount represented by
the Global Call Warrants.
"Responsible Officer": With respect to the Trustee, any
officer within the Corporate Trust Office of the Trustee with direct
responsibility for administration of this Agreement and the Trust Agreement,
including any Vice President, Assistant Vice President, Assistant Treasurer or
any other officer of the Trustee customarily performing functions similar
B-2
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 actual knowledge of and familiarity with the
particular subject.
"Rule 144A": As defined in Section 4.1 hereof.
"Securities Act": The United States Securities Act of 1933, as
amended.
"Scheduled Call Commencement Date": The fifth anniversary of
the Issue Date.
"Trust": As defined in the recitals.
"Trust Agreement": As defined in Section 2.1 hereof.
"Trustee": As defined in Section 2.1 hereof, or any successor
thereto under the Trust Agreement.
"Warrant Agent": As defined in the recitals, or any successor
thereto under this Warrant Agent Agreement.
"Warrant Agent Agreement": As defined in the recitals.
"Warrant Holder": As defined in Section 3.1(a) hereof.
"Warrant Originator": As defined in the recitals.
ARTICLE II
CREATION OF CALL WARRANTS
SECTION 2.01. The Trust.
(a) Select Asset Inc. (the "Depositor") and U.S. Bank National
Association, not in its individual capacity but solely as Trustee (the
"Trustee"), will form the Corporate Backed Callable Trust Certificates, X.X.
Xxxxxx Debenture-Backed Series 2006-1 Trust (the "Trust") pursuant to the
Standard Terms for Trust Agreements, dated as of November 9, 2006 (the "Standard
Terms"), as supplemented by the Series Supplement thereto, dated as of the date
hereof (the "Series Supplement" and, together with the Standard Terms, the
"Trust Agreement") in respect of the Corporate Backed Callable Trust
Certificates, X.X. Xxxxxx Debenture-Backed Series 2006-1 Certificates.
(b) The sole asset of the Trust will be $27,500,000 aggregate
principal amount of 7?% Debentures (the "Underlying Securities") issued by X.X.
Xxxxxx Corporation, Inc. (the "Underlying Securities Issuer").
B-3
SECTION 2.02. The Warrants.
(a) The Call Warrants shall consist initially of 27,500 call
warrants with respect to the Underlying Securities, each relating to $1,000
principal amount of Underlying Securities (the "Call Warrants").
(b) The Call Warrants shall initially be issued as one or more
Global Call Warrants in definitive, fully registered form without coupons, and
DTC shall be the Depository. Upon issuance, the Global Call Warrants shall
initially be deposited with the Trustee in its capacity as custodian on behalf
of DTC. Such Global Call Warrants shall initially be registered in the name of
Cede & Co. or another nominee designated by DTC. Global Call Warrants shall
clear and settle in book-entry only form through the facilities of the
Depository. Unless and until it is exchanged in whole or in part for
Certificated Call Warrants, a Global Call Warrant may not be transferred except
as a whole by the Depository for such Global Call Warrant to a nominee of such
Depository, or by a nominee of such Depository to such Depository or another
nominee of such Depository, or by such Depository or any such nominee to a
successor of such Depository or a nominee of such successor. The Registered
Warrant Amount of Call Warrants may from time to time be increased or decreased
by adjustments made on the records of the Trustee, as custodian for DTC for such
Global Call Warrant, as provided in this Section.
ARTICLE III
EXERCISE OF CALL WARRANTS
SECTION 3.01. Manner of Exercise.
(a) Call Warrants may be exercised by any holder thereof
(each, a "Warrant Holder") on any Call Date. The Warrant Holder shall represent
and agree to the following conditions that apply to any exercise of Call
Warrants:
(i) Each exercise of Call Warrants shall relate to at
least 500 Call Warrants (or $500,000 aggregate principal
amount of Underlying Securities).
(ii) A written notice (each, a "Call Notice")
specifying the number of Call Warrants being exercised and the
related Call Date shall be delivered to the Warrant Agent and
the Trustee at least five but not more than 30 Business Days
before such Call Date.
(iii) Except in the case of any exercise of Global
Call Warrants, the Warrant Holder shall surrender the Call
Warrants with respect to the Called Underlying Securities to
the Warrant Agent at its office specified in Section 7.3
hereof no later than 10:00 a.m. (New York City time) on such
Call Date.
(iv) Except as otherwise provided herein, in
connection with a Call Notice relating to a tender offer for,
or redemption of, Underlying Securities, the Warrant Holder
shall have made payment to the Warrant Agent, by wire transfer
or other immediately available funds acceptable to the Warrant
Agent, in the
B-4
amount of the Call Price, no later than 10:00 a.m. (New York
City time) on the Call Date.
(v) The Warrant Holder shall be solvent at the time
of any exercise of the Call Warrants.
(b) Upon exercise of Call Warrants, any Warrant Holder shall
be entitled to delivery of the Called Underlying Securities. The "Called
Underlying Securities" shall be the Underlying Securities with a principal
amount equal to $1,000 per Call Warrant exercised on the related Call Date.
(c) The Warrant Agent shall notify the Trustee immediately
upon its receipt of a Call Notice and upon receipt of payment of the Call Price.
The Warrant Agent shall transfer the amount of any paid Call Price to the
Trustee in immediately available funds, for deposit in the Certificate Account
and application pursuant to the Trust Agreement on the applicable Call Date
(and, pending such transfer, shall hold such amount for the benefit of the
Warrant Holder in a segregated trust account).
(d) Delivery of a Call Notice does not give rise to an
obligation on the part of the Warrant Holder to pay the Call Price. If, by 10:00
a.m. (New York City time) on the Call Date, the Warrant Holder has not paid the
Call Price, except in connection with a Call Notice relating to a tender offer
for, or redemption of, Underlying Securities, then the Call Notice shall
automatically expire and none of the Warrant Holder, the Warrant Agent or the
Trustee shall have any obligation with respect to the Call Notice. The
expiration of a Call Notice shall in no way affect the Warrant Xxxxxx's right to
deliver a Call Notice at a later date. The Call Price for a call in connection
with a tender offer or redemption shall be deducted from the proceeds of a
tender offer or a redemption by the Trust, deposited in Available Funds and
distributed to Certificateholders pursuant to Series Supplement.
SECTION 3.02 Transfer of Called Underlying Securities.
(a) As soon as practicable after each surrender of the Call
Warrants on the Call Date and upon satisfaction of all other requirements
described in Section 3.1 hereof and upon satisfaction of all other requirements
described in the Call Warrants, the Warrant Agent shall instruct the Trustee to
cause the Called Underlying Securities represented by the number of Call
Warrants being exercised to be registered on the book-entry system of the
related depository in the registered name or names furnished by the Warrant
Holder, or, as applicable, transfer the Called Underlying Securities to the
Warrant Holder.
(b) If such exercise is of less than all the outstanding Call
Warrants, (i) with respect to the Certificated Call Warrants, the Warrant Agent
shall authenticate new Call Warrants, of like tenor, representing the
outstanding Certificated Call Warrants and the Warrant Agent shall deliver such
Certificated Call Warrant to the Holders thereof and (ii) with respect to Global
Call Warrants registered with a Depository, the Warrant Agent shall modify the
schedule thereto accordingly to reflect the outstanding Call Warrants
represented by one or more Global Call Warrant for such Holders possessing a
beneficial interest therein.
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(c) If any Call Warrant is exercised in connection with a
partial redemption of the Underlying Securities, the Trustee shall, to the
extent possible, deliver to the exercising Warrant Holder, Underlying Securities
that have been selected for redemption.
SECTION 3.03. Cancellation and Destruction of Call Warrants.
All Call Warrants surrendered to the Warrant Agent for the purpose of exercise
pursuant to Section 3.1 hereof and actually exercised, or for the purpose of
transfer or exchange pursuant to Article V, shall be canceled by the Warrant
Agent, and no Call Warrant (other than that reflecting any such transfer or
exchange) shall be issued in lieu thereof. The Warrant Agent shall destroy all
canceled Call Warrants.
SECTION 3.04. No Rights as Holder of Trust Securities
Conferred by Call Warrants. The Call Warrants shall not entitle the Warrant
Holder to any of the rights of a holder of any securities which may be issued by
the Trust, including, without limitation, the right to receive the payment of
any amount on or in respect of any such securities or to enforce any of the
covenants of the Trust Agreement applicable to any holders of such securities.
SECTION 3.05. No Rights of Trustee in Call Warrants; Delivery
of Underlying Securities. The Trustee, as holder of the Underlying Securities,
(a) shall have no right, title or interest in the Call Warrants created
hereunder and (b) shall hereinafter accept delivery of the Underlying Securities
from the Depositor subject to the terms of this Warrant Agent Agreement, which
restricted acceptance shall be acknowledged in a writing evidencing receipt by
the Trustee as holder of such Underlying Securities.
SECTION 3.06. Pro Rata Reduction of Call Warrants if Partial
Redemption of Underlying Securities. If Underlying Securities are redeemed in
part by the Underlying Securities Issuer and the Warrant Holders do not exercise
their Call Warrants in connection with such partial redemption, the number of
Call Warrants held by each Warrant Holder shall be reduced proportionately so
that the aggregate principal amount of Underlying Securities callable by Call
Warrants shall equal the amount of outstanding Underlying Securities held by the
Trustee after giving effect to such partial redemption; provided, that, in no
event shall partial Call Warrants be issued in the event of any such
proportionate reduction. The Warrant Agent shall make such adjustments to its
records as shall be necessary to reflect such reductions, shall round the
adjusted number of Call Warrants downward, as appropriate, to ensure that each
Call Warrant relates to Underlying Securities having a principal amount of
$1,000 and shall notify each Warrant Holder of such adjustments.
SECTION 3.07. Selection of Called Underlying Securities in the
event of a Call in Connection with a Partial Redemption. If a Warrant Holder
exercises Call Warrants in connection with a partial redemption of the
Underlying Securities, the Trustee shall, to the extent possible, select Called
Underlying Securities for transfer to the Warrant Holder that have been selected
by the Underlying Securities Issuer for redemption. If more than one Warrant
Holder exercises Call Warrants in such circumstances, such Called Underlying
Securities that have been selected for redemption shall be allocated among such
Warrant Holders in proportion to the number of Call Warrants exercised by each.
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ARTICLE IV
RESTRICTIONS ON TRANSFER
SECTION 4.01. Restrictive Legends. No Call Warrant may be
offered, resold, assigned or otherwise transferred (including by pledge or
hypothecation) unless such offer, resale, assignment or transfer is to a
qualified institutional buyer (a "QIB"), as such term is defined in Rule 144A
promulgated under the Securities Act ("Rule 144A"), in accordance with Rule 144A
(or in the case of the initial sale by the Warrant Originator, in reliance on
Section 4(2) under the Securities Act) acquiring the Call Warrants for its own
account or for the account of a QIB. Prior to any offer, resale, assignment or
transfer of any Certificated Call Warrant, the prospective transferee shall be
required to deliver to the Warrant Agent an executed copy of a Investor
Representation Letter with respect to any Call Warrant to be transferred
substantially in the form of Exhibit A attached hereto. Each Call Warrant
(including each Call Warrant issued upon the transfer of any Call Warrant) shall
be issued with a legend in substantially the following form (unless the Warrant
Agent shall have received an opinion of counsel reasonably satisfactory to the
Warrant Originator and the Warrant Agent that such legend is no longer required
to ensure compliance with the Securities Act):
"THIS CALL WARRANT (OR ITS PREDECESSOR) HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION UNDER
SUCH ACT IS IN EFFECT OR TO A QUALIFIED INSTITUTIONAL BUYER (AS SUCH TERM IS
DEFINED IN RULE 144A PROMULGATED UNDER THE SECURITIES ACT) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT. THE CALL WARRANT REPRESENTED HEREBY
MAY BE TRANSFERRED ONLY IN COMPLIANCE WITH THE CONDITIONS SPECIFIED IN THE CALL
WARRANTS.
EACH PURCHASER OF THIS CALL WARRANT IS HEREBY NOTIFIED THAT
THE SELLER OF THIS CALL WARRANT MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER."
SECTION 4.02. Representation of Warrant Holder. Each Purchaser
of a Call Warrant shall represent and agree, or in the case of a Global Call
Warrant be deemed to represent and agree, as follows:
(a) In connection with the purchase of the Call Warrants:
(i) The Purchaser represents that in making its
investment decision to acquire the Call Warrants, the
Purchaser has not relied on representations, warranties,
opinions, projections, financial or other information or
analysis, if any, supplied to it by any person, including the
Warrant Originator or Warrant Agent, or any of their
respective affiliates, except as expressly contained in
written information, if any.
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(ii) The Purchaser has such knowledge and experience
in financial and business matters as to be capable of
evaluating the merits and risks of an investment in the Call
Warrants, and the Purchaser is able to bear the substantial
economic risks of such an investment. The Purchaser has relied
upon its own tax, legal and financial advisors in connection
with its decision to purchase the Call Warrants.
(iii) The Purchaser (A) is a QIB and (B) is acquiring
the Call Warrants for its own account or for the account of an
investor of the type described in clause (A) above as to each
of which the Purchaser exercises sole investment discretion.
The Purchaser is purchasing the Call Warrants for investment
purposes and not with a view to, or for, the offer or sale in
connection with, a public distribution or in any other manner
that would violate the Securities Act or the securities or
blue sky laws of any state.
(iv) The Purchaser understands that the Call Warrants
have not been and will not be registered under the Securities
Act or under the securities or blue sky laws of any state, and
that (x) if it decides to resell, pledge or otherwise transfer
any Security, such resale, pledge or other transfer must
comply with the provisions of the Warrant Agent Agreement
relating to the Call Warrants (including, without limitation,
the provisions of Section 4.1 of the Warrant Agent Agreement)
and (y) it will, and each subsequent holder will be required
to, notify any purchaser of any Call Warrant from it of the
resale restrictions referred to in clause (x) above.
(v) The Purchaser understands that each of the Call
Warrants will bear a legend described in Section 4.1 of the
Warrant Agent Agreement unless otherwise agreed by the Warrant
Originator and the Warrant Agent.
(vi) The Purchaser understands that no subsequent
transfer of the Call Warrants is permitted unless (A) such
transfer is of at least 500 Call Warrants (or Call Warrants
relating to $500,000 aggregate principal amount of Underlying
Securities) and (B) the Purchaser causes the proposed
transferee to provide to the Depositor and the Trustee such
documentation as may be required pursuant to Section 4.1 of
the Warrant Agent Agreement, or such other written statement
as the Warrant Agent shall reasonably prescribe.
(vii) The Purchaser is a person or entity (a
"Person") who is either:
(A) a citizen or resident of the United States,
(2) a corporation, partnership or other
entity organized in or under the laws of the
United States or any political subdivision
thereof, (3) an estate the income of which
is includible in gross income for federal
income tax purposes regardless of source, or
(4) a trust if a court within the United
States is able to exercise primary
supervision of the administration of the
trust and one or more United States persons
have the authority to control all
substantial decisions of the trust, or
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(B) a Person not described in (A), whose
ownership of such Call Warrant is
effectively connected with such Person's
conduct of a trade or business within the
United States within the meaning of the
Internal Revenue Code of 1986, as amended
(the "Code"), and its ownership of any
interest in such Call Warrant will not
result in any withholding obligation with
respect to any payments with respect to the
Call Warrants by any Person (other than
withholding, if any, under Section 1446 of
the Code), or
(C) a Person not described in (A) or (B) above,
who is not a Person: (1) that owns, directly
or indirectly, 10% or more of the total
combined voting power of all classes of
stock in the Underlying Securities Issuer
(as defined in the Prospectus Supplement)
entitled to vote, (2) that is a controlled
foreign corporation related to the
Underlying Securities Issuer within the
meaning of Section 864(d)(4) of the Code, or
(3) that is a bank extending credit pursuant
to a loan agreement entered into in the
ordinary course of its trade or business.
(viii) The Purchaser agrees that (I) if it is a
Person described in clause (A) above, it will furnish to the
Depositor and the Trustee a properly executed IRS Form W-9,
and (II) if it is a Person described in clause (B) above, it
will furnish to the Depositor and the Trustee a properly
executed IRS Form W-8ECI, and (III) if it is a Person
described in clause (C) above, it will furnish to the
Depositor and the Trustee a properly executed IRS Form W-8BEN
(or, if the Purchaser is treated as a partnership for federal
income tax purposes, a properly executed IRS Form W-8IMY with
appropriate certification for all partners or members
attached). The Purchaser also agrees that it will provide a
new IRS form upon the expiration or obsolescence of any
previously delivered form, and that it will provide such other
certifications, representations or Opinions of Counsel as may
be requested by the Depositor and the Trustee.
(ix) The Purchaser agrees that if at some time in the
future it wishes to transfer or exchange any of the Call
Warrants, it will not transfer or exchange any of the Call
Warrants unless such transfer or exchange is in accordance
with the terms of this Agreement and other documents
applicable to the Call Warrant. The Purchaser understands that
any purported transfer of the Call Warrants (or any interest
therein) in contravention of any of the restrictions and
conditions in the agreements, as applicable, shall be void,
and the purported transferee in such transfer shall not be
recognized by any Person as a holder of such Call Warrants,
for any purpose.
SECTION 4.03. Notice of Proposed Transfer. Prior to any
transfer of any Certificated Call Warrant or portion thereof (other than to a
Participant in compliance with Rule 144A), the Warrant Holder will give five (5)
Business Days (or such lesser period acceptable to
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the Warrant Agent) prior written notice to the Warrant Agent of such Warrant
Xxxxxx's intention to effect such transfer. Each transfer must relate to a whole
number of Call Warrants.
ARTICLE V
REGISTRATION AND TRANSFER OF CALL WARRANTS, ETC.
SECTION 5.01. Warrant Register; Ownership of Call Warrants.
The Warrant Agent will keep a register in which the Warrant Agent will provide
for the registration of Call Warrants and the registration of transfers of Call
Warrants representing numbers of Call Warrants. The Warrant Agent may treat the
Person in whose name any Call Warrant is registered on such register as the
owner thereof for all purposes, and the Warrant Agent shall not be affected by
any notice to the contrary.
SECTION 5.02. Transfer and Exchange of Call Warrants.
(a) The Warrant Agent shall register the transfer or exchange
of any Global Call Warrant without requiring any additional certification.
(b) Beneficial interests in a Global Call Warrant may be
transferred in accordance with the rules and procedures of DTC and any other
applicable Depositories.
(c) Exchange of Global Call Warrant for Certificated Call
Warrant. Global Call Warrants shall be exchangeable for Certificated Call
Warrants only if (i) the Depository advises the Depositor in writing that it is
no longer willing or able to properly discharge its responsibilities with
respect to the Call Warrants and the Depositor is unable to locate a qualified
successor within 60 calendar days or (ii) the Depositor, at its option, advises
the Warrant Originator or the Warrant Agent in writing that it elects to
terminate the book-entry system through the Depository. Any Global Call Warrant
that is exchangeable pursuant to the preceding sentence will be exchangeable for
Certificated Call Warrants of like tenor and Warrant Amount, as applicable, in
any authorized denomination or denominations and registered in the names of such
Person or Persons as the Depository shall direct. Upon such exchange, the
Warrant Agent shall execute and authenticate such Certificated Call Warrants and
register the same in the name of, and deliver the same to, such Person or
Persons consistent with the provisions hereof.
If a Holder of a beneficial interest in a Call Warrant
represented by a Global Call Warrant wishes to exchange its interest in such
Global Call Warrant for a Certificated Call Warrant, or to transfer its interest
in such Global Call Warrant to a Person who wishes to take delivery thereof in
the form of one or more Certificated Call Warrants, such Holder may exchange,
transfer or cause the transfer of such Call Warrant upon receipt by the Warrant
Agent of:
(i) instructions given in accordance with the
Depository's procedures from a Participant directing the
Warrant Agent to reduce the principal amount of the Global
Call Warrant with instructions to issue Certificated Call
Warrants and
(ii) an Investor Representation Letter certifying
that the transfer is being made to a QIB in accordance with
Rule 144A under the Securities Act,
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the Warrant Agent shall instruct the Depository to reduce the
principal amount of the Global Call Warrant; and the Warrant Agent
shall authenticate and deliver Certificated Call Warrants in principal
amounts equal to the related reduction in principal amount of the
Global Call Warrant.
(d) Exchange of Certificated Call Warrant for Global Call
Warrant. If a Holder of Certificated Call Warrant wishes at any time to exchange
its interest in such Certificated Call Warrant for a corresponding beneficial
interest in the Global Warrant, or to transfer its interest in such Certificated
Call Warrant to a Person who wishes to take delivery thereof in the form of a
corresponding beneficial interest in the Global Call Warrant, upon receipt by
the Warrant Agent of:
(i) such Certificated Call Warrant properly endorsed
for such transfer and written instructions from such Warrant
Holder directing that the corresponding Global Call Warrant be
credited with a beneficial interest equal to the principal
amount of such Certificated Call Warrant,
(ii) a written order containing information regarding
the participant account with the Depositor to be credited with
such increase and any other information required by the
Depositor, and
(iii) an Investor Representation Letter certifying
that the transfer is being made to a QIB in accordance with
Rule 144A under the Securities Act,
the Warrant Agent shall cancel the Certificated Call Warrant,
record the transfer in accordance with the instructions of the Warrant
Holder and instruct the Depository to credit or cause to be credited to
the securities account of the transferee beneficial interests in the
Call Warrants equal to the principal amount of the related canceled
Certificated Call Warrants.
SECTION 5.03. Replacement of Call Warrants. Upon receipt of
evidence reasonably satisfactory to the Warrant Agent of the loss, theft,
destruction or mutilation of any Call Warrant and, in the case of any such loss,
theft or destruction of any Call Warrant, upon delivery of an indemnity bond in
such reasonable amount as the Warrant Agent may determine, or, in the case of
any such mutilation, upon the surrender of such Call Warrant for cancellation to
the Warrant Agent, the Warrant Agent shall execute and deliver in lieu thereof,
a new Call Warrant of like tenor bearing a number not contemporaneously
outstanding.
SECTION 5.04. Execution and Delivery of Call Warrants by
Trustee. The Warrant Agent hereby agrees (subject to compliance with Article IV)
to execute and deliver any new Call Warrants issued in accordance with Section
3.2 or this Article V.
ARTICLE VI
WARRANT AGENT
SECTION 6.01. Limitation on Liability. The Warrant Agent shall
be protected and shall incur no liability for or in respect of any action taken,
suffered or omitted by
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it in connection with its administration of the Call Warrants in reliance upon
any instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement or other
paper or document in good faith believed by it to be genuine and to be signed,
executed and, where necessary, verified and acknowledged, by the proper Person
or Persons.
SECTION 6.02. Duties of Warrant Agent. The Warrant Agent
undertakes only the specific duties and obligations imposed hereunder upon the
following terms and conditions, by all of which the Depositor, the Trust, the
Trustee and each Warrant Holder shall be bound:
(a) The Warrant Agent may consult with legal counsel (who may
be legal counsel for the Warrant Originator), and the opinion of such counsel
shall be full and complete authorization and protection to the Warrant Agent as
to any action taken or omitted by it in good faith and in accordance with such
opinion, provided the Warrant Agent shall have exercised reasonable care in the
selection by it of such counsel.
(b) Whenever in the performance of its duties hereunder, the
Warrant Agent shall deem it necessary or desirable that any fact or matter be
proved or established prior to taking or suffering any action hereunder, such
fact or matter may be deemed to be conclusively proved and established by a
Depositor Order or a certificate signed by the Trustee and delivered to the
Warrant Agent; and such certificate shall be full authorization to the Warrant
Agent for any action taken or suffered in good faith by it hereunder in reliance
upon such certificate.
(c) The Warrant Agent shall be liable hereunder only for its
own negligence, willful misconduct or bad faith.
(d) The Warrant Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained herein or be required to
verify the same.
(e) The Warrant Agent shall not have any responsibility in
respect of and makes no representation as to the validity of the Call Warrants
or the execution and delivery thereof (except the due execution hereof by the
Warrant Agent); nor shall it be responsible for any breach by any party of any
covenant or condition contained in the Call Warrants; nor shall it by any act
thereunder be deemed to make any representation or warranty as to the Called
Underlying Securities to be purchased thereunder.
(f) The Warrant Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
the Principal Executive Officer, Principal Financial Officer, President, Senior
Vice President, a Vice President, a Managing Director, a Director, Treasurer, an
Assistant Treasurer, Controller, an Assistant Controller, Secretary or an
Assistant Secretary of the Warrant Originator , and to apply to such officers
for advice or instructions in connection with its duties, and it shall not be
liable for any action taken or suffered to be taken by it in good faith in
accordance with instructions of any such officer.
(g) The Warrant Agent and any shareholder, director, officer
or employee of the Warrant Agent may buy, sell or deal in any of the Call
Warrants or otherwise act as fully and
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freely as though it were not Warrant Agent hereunder, so long as such persons do
so in full compliance with all applicable laws. Nothing herein shall preclude
the Warrant Agent from acting in any other capacity for any other legal entity.
(h) The Warrant Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents.
(i) The Warrant Agent shall act solely as the agent of the
Warrant Holders hereunder. The Warrant Agent shall not be liable except for the
failure to perform such duties as are specifically set forth herein, and no
implied covenants or obligations shall be read into the Call Warrants against
the Warrant Agent, whose duties shall be determined solely by the express
provisions thereof. The Warrant Agent shall not be deemed to be a fiduciary.
(j) The Warrant Agent shall not be under any obligation or
duty to institute, appear in or defend any action, suit or legal proceeding in
respect hereof, unless first indemnified to its satisfaction, but this provision
shall not affect the power of the Warrant Agent to take such action as the
Warrant Agent may consider proper, whether with or without such indemnity. The
Warrant Agent shall promptly notify the Warrant Originator in writing of any
claim made or action, suit or proceeding instituted against it arising out of or
in connection with the Call Warrants.
SECTION 6.03. Change of Warrant Agent. The Warrant Agent may
resign and be discharged from its duties hereunder upon thirty (30) days notice
in writing mailed to the Warrant Originator by registered or certified mail, and
to the Warrant Holders by first-class mail at the expense of the Warrant
Originator; provided, that, no such resignation or discharge shall become
effective until a successor Warrant Agent shall have been appointed hereunder.
The Warrant Originator may remove the Warrant Agent or any successor Warrant
Agent upon thirty (30) days notice in writing, mailed to the Warrant Agent or
successor Warrant Agent, as the case may be, and to the Warrant Holders by
first-class mail; provided, further, that no such removal shall become effective
until a successor Warrant Agent shall have been appointed hereunder. If the
Warrant Agent shall resign or be removed or shall otherwise become incapable of
acting, the Warrant Originator shall promptly appoint a successor to the Warrant
Agent, which may be designated as an interim Warrant Agent. If an interim
Warrant Agent is designated, the Warrant Originator shall then appoint a
permanent successor to the Warrant Agent, which may be the interim Warrant
Agent. If the Warrant Originator shall fail to make such appointment of a
permanent successor within a period of thirty (30) days after such removal or
within sixty (60) days after notification in writing of such resignation or
incapacity by the resigning or incapacitated Warrant Agent or by the Warrant
Holder, then the Warrant Agent or registered Warrant Holder may apply to any
court of competent jurisdiction for the appointment of such a successor. Any
successor to the Warrant Agent appointed hereunder must be rated in one of the
four highest rating categories by the Rating Agencies. Any entity which may be
merged or consolidated with or which shall otherwise succeed to substantially
all of the trust or agency business of the Warrant Agent shall be deemed to be
the successor Warrant Agent without any further action.
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SECTION 6.04. Warrant Agent Transfer Fee. The Warrant Agent
will assess a fee of $50.00 upon the issue of any new Call Warrant, such fee to
be assessed upon the new Call Warrant Holder.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Remedies. The remedies at law of the Warrant
Holder in the event of any default or threatened default by the Warrant Agent in
the performance of or compliance with any of the terms of the Call Warrants are
not and will not be adequate and, to the full extent permitted by law, such
terms may be specifically enforced by a decree for the specific performance of
any agreement contained herein or by an injunction against a violation of any of
the terms thereof or otherwise.
SECTION 7.02. Limitation on Liabilities of Warrant Holder.
Nothing contained in this Warrant Agent Agreement or the Call Warrants shall be
construed as imposing any obligation on the Warrant Holder to purchase any of
the Underlying Securities except in accordance with the terms hereof or thereof.
SECTION 7.03. Notices. All notices and other communications
under this Warrant Agent Agreement shall be in writing and shall be delivered,
or mailed by registered or certified mail, return receipt requested, by a
nationally recognized overnight courier, postage prepaid, addressed (a) if to
any Warrant Holder, at the registered address of such Warrant Holder as set
forth in the register kept by the Warrant Agent or (b) if to the Warrant Agent,
to 000 Xxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate
Trust or to such other address notice of which the Warrant Agent shall have
given to the Warrant Holder and the Trustee or (c) if to the Warrant Originator
to Select Asset Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; provided,
that, the exercise of any Call Warrants shall be effective in the manner
provided in Article III. The Warrant Agent shall forward to the Warrant Holder
any notices received by it hereunder by facsimile within one Business Day of
receipt thereof.
SECTION 7.04. Amendment.
(a) This Warrant Agent Agreement may be amended from time to
time by the Warrant Originator and the Warrant Agent without the consent of any
Warrant Holder, upon receipt of an opinion of counsel satisfactory to the
Warrant Agent that the provisions hereof have been satisfied and that such
amendment would not cause the Trust to be taxed as an association or publicly
traded partnership taxable as a Corporation under the Code, for any of the
following purposes: (i) to cure any ambiguity or to correct or supplement any
provision herein which may be defective or inconsistent with any other provision
herein or to provide for any other terms or modify any other provisions with
respect to matters or questions arising under the Call Warrants which shall not
adversely affect in any material respect the interests of the Warrant Holders or
any holder of a Certificate; provided, however, that no amendment altering the
timing or amount of any payment of the Call Price shall be effected without the
consent of each Warrant Holder; or (ii) to evidence and provide for the
acceptance of appointment hereunder of a Warrant Agent other than U.S. Bank
National Association.
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(b) Without limiting the generality of the foregoing, any Call
Warrant may also be modified or amended from time to time by the Warrant Agent
with the consent of Warrant Holders of 66-2/3% of the outstanding Call Warrants,
upon receipt of an opinion of counsel satisfactory to the Warrant Agent that the
provisions hereof (including, without limitation, the following proviso) have
been satisfied, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Call Warrants or of modifying
in any manner the rights of the Warrant Holders; provided, however, that no such
amendment shall alter the terms on which Call Warrants are exercisable or the
amounts payable upon exercise of a Call Warrant without the consent of the
Trustee and 100% of the affected Warrant Holders. Notwithstanding any other
provision hereof or of the Call Warrants, this Section 7.4(b) shall not be
amended without the consent of 100% of the affected Warrant Holders.
(c) Promptly after the execution of any such amendment or
modification, the Warrant Agent shall furnish a copy of such amendment or
modification to each Warrant Holder, to the Trustee and to the Rating Agencies.
It shall not be necessary for the consent of Warrant Holders to approve the
particular form of any proposed amendment, but it shall be sufficient if such
consent shall approve the substance thereof. The manner of obtaining such
consents and of evidencing the authorization of the execution thereof shall be
subject to such reasonable regulations as the Warrant Agent may prescribe. Any
consent by a Warrant Holder (or any predecessor Warrant Holder) shall be
conclusive and binding on such Warrant Holder and upon all future Warrant
Holders of the same Call Warrant and of any Call Warrant issued upon the
transfer thereof or in exchange thereof or in lieu thereof, whether or not
notation of such consent is made upon the Call Warrant.
SECTION 7.05. Expiration. The right to exercise the Call
Warrants shall expire on the earliest to occur of (a) the cancellation thereof,
(b) the termination of the Trust Agreement, or (c) the liquidation, disposition,
or maturity of all of the Underlying Securities.
SECTION 7.06. Descriptive Headings. The headings in this
Warrant Agent Agreement are for purposes of reference only and shall not limit
or otherwise affect the meaning hereof.
SECTION 7.07. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED
BY, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT
OF LAWS.
SECTION 7.08. Judicial Proceedings; Waiver of Jury. Any
judicial proceeding brought against the Warrant Originator or the Warrant Agent
with respect to this Warrant Agent Agreement may be brought in any court of
competent jurisdiction in the County of New York, State of New York or of the
United States of America for the Southern District of New York and, by execution
and delivery of the Call Warrants, the Warrant Agent (a) accepts, generally and
unconditionally, the nonexclusive jurisdiction of such courts and any related
appellate court, and irrevocably agrees that the Warrant Originator and the
Warrant Agent shall be bound by any judgment rendered thereby in connection with
this Warrant Agent Agreement or the Call Warrants, subject to any rights of
appeal, and (b) irrevocably waives any objection that the Warrant Originator or
the Warrant Agent may now or hereafter have as to the venue of
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any such suit, action or proceeding brought in such a court or that such court
is an inconvenient forum.
SECTION 7.09. Nonpetition Covenant; No Recourse. Each of (i)
the Warrant Holder by its acceptance thereof, and (ii) the Warrant Agent agrees
that it shall not (and, in the case of the Warrant Holder, that it shall not
direct the Warrant Agent to), until the date which is one year and one day after
the payment in full of the Class A-1 Certificates and the Class A-2
Certificates, acquiesce, petition or otherwise invoke or cause the Trustee, the
Warrant Originator, or any such other entity to invoke the process of the United
States of America, any State or other political subdivision thereof or any
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government for the purpose of commencing or
sustaining a case by or against the Trustee, the Warrant Originator or any such
other entity under a federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Trust, the Depositor or any such other entity or
all or any part of the property or assets of Trustee, the Warrant Originator or
any such other entity or ordering the winding up or liquidation of the affairs
of the Trustee, the Warrant Originator or any such other entity. Each of (i) the
Warrant Holder, by its acceptance thereof, and (ii) the Warrant Agent agrees
that it shall not have any recourse to the Trustee or the Warrant Originator.
[Remainder of this page intentionally left blank.]
B-16
IN WITNESS WHEREOF, the parties hereto have caused their names
to be signed hereto by their respective duly authorized officers as of the date
first above written.
SELECT ASSET INC.,
as Warrant Originator
By: _____________________________________
Name:
Title:
U.S. BANK NATIONAL
ASSOCIATION, as Warrant
Agent
By: _____________________________________
Name:
Title:
B-17
EXHIBIT C
FORM OF INVESTMENT LETTER
QUALIFIED INSTITUTIONAL BUYER AND ACCREDITED INVESTOR
Dated:
U.S. Bank National Association,
as Trustee
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Brothers Inc.,
as Initial Purchaser
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Select Asset Inc.,
as Depositor
000 Xxxxxxx Xxxxxx
New York, New York 10019
Ladies and Gentlemen:
In connection with our proposed purchase of $______________
aggregate Notional Amount of Class A-2 Certificates (the "Class A-2
Certificates") representing an interest in the Corporate Backed Callable Trust
Certificates, X.X. Xxxxxx Debenture-Backed Series 2006-1 Trust (the "Trust"),
the undersigned, by executing this letter (the "Purchaser") confirms that:
1. The Purchaser understands that substantial risks are involved in an
investment in the Class A-2 Certificates. The Purchaser represents
that, in making its investment decision to acquire the Class A-2
Certificates, the Purchaser has not relied on representations,
warranties, opinions, projections, financial or other information or
analysis, if any, supplied to it by any person or entity, including
the Initial Purchaser, the Depositor or the Trustee or any of their
affiliates, except as expressly contained in written information, if
any. The Purchaser is purchasing the Class A-2 Certificates for
investment purposes and not with a view to, or for, the offer or
sale in connection with a public distribution or in any other manner
that would violate the Securities Act or the securities or blue sky
laws of any state of the United States. The Purchaser has such
knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of purchasing any of the
Class A-2 Certificates. The Purchaser is aware that it may be
required to bear the substantial economic risk of an investment in
the Class A-2 Certificates for an indefinite period of time and such
Purchaser is able to bear such risk for an indefinite period. The
Purchaser has relied upon its own tax, legal and financial advisors
in connection with its decision to purchase the Class A-2
Certificates.
C-1
2. The Purchaser is not an "affiliate" (as defined in Rule 144 under
the Securities Act) of the Depositor and is either:
(i) (A) a "Qualified Institutional Buyer" (a "QIB"), within the
meaning of Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act" and "Rule 144A") and has delivered to you the
certification contained herein as to the fact that it is a QIB and
(B) acquiring the Class A-2 Certificates for its own account, for
the account of an Accredited Investor (as defined in Rule 501(a)
under the Securities Act), or for the account of a QIB as to each of
which the Purchaser exercises sole investment discretion. The
Purchaser is aware that the Class A-2 Certificates are being sold to
it in reliance on the exemption from the provisions of Section 5 of
the Securities Act provided by Rule 144A; or
(ii) an Accredited Investor and, if the Class A-2 Certificates are
to be purchased for one or more accounts ("investor accounts") for
which it is acting as fiduciary or agent, each such investor account
is an Accredited Investor on a like basis or a QIB; in the normal
course of its business, such Purchaser invests in or purchases
securities similar to the Class A-2 Certificates.
3. The Purchaser acknowledges that neither the Depositor nor the
Initial Purchaser, or any person representing the Depositor or the
Initial Purchaser, has made any representation to such purchaser
with respect to the Trust, the Underlying Securities or the offering
or sale of any Class A-2 Certificates.
4. The Purchaser understands that the Class A-2 Certificates are being
offered in a transaction not involving any public offering in the
United States within the meaning of the Securities Act, that the
Class A-2 Certificates have not been and will not be registered
under the Securities Act or under the securities or blue sky laws of
any state, and that (i) if in the future it decides to offer,
resell, pledge or otherwise transfer the Class A-2 Certificates,
such Class A-2 Certificates shall only be offered, resold, assigned
or otherwise transferred (A) to the Trust, (B) pursuant to an
effective registration statement under the Securities Act, (C) to a
QIB, in accordance with Rule 144A or (D) to any person or entity
(including an Accredited Investor within the meaning of Rule 501(a)
under the Securities Act) pursuant to another available exemption
from registration provided under the Securities Act, and, in each of
cases (A) through (D), in accordance with any applicable securities
laws of any state of the United States and other jurisdictions and
(ii) the purchaser will, and each subsequent holder is required to,
notify any subsequent purchaser of such Class A-2 Certificates from
it of the resale restrictions referred to in clause (i) above. Upon
the transfer of Class A-2 Certificates held in the form of global
certificates to an Accredited Investor, the transferor's interest in
such global certificates shall be exchanged for a Class A-2
Certificate in definitive form. Thereafter, upon transfer of a
definitive Class A-2 Certificate to a QIB, such Class A-2
Certificate may be exchanged for a beneficial interest in a global
certificate.
5. The Purchaser understands that each Class A-2 Certificate will,
unless otherwise agreed to by the Depositor and the Trustee, bear a
legend substantially to the following effect:
C-2
"THIS CLASS A-2 CERTIFICATE (OR ITS PREDECESSOR) HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT
WHILE A REGISTRATION UNDER SUCH ACT IS IN EFFECT OR PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT. THE CLASS
A-2 CERTIFICATE REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF THE SERIES SUPPLEMENT.
EACH PURCHASER OF THIS CLASS A-2 CERTIFICATE IS HEREBY
NOTIFIED THAT THE SELLER OF THIS CLASS A-2 CERTIFICATE MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF
THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER."
6. The Purchaser understands that no subsequent transfer of the Class
A-2 Certificates is permitted unless (A) such transfer is of a Class
A-2 Certificate with a denomination of at least $100,000 and (B) it
causes its proposed transferee to provide to the Trustee and the
Initial Purchaser a letter substantially in the form of Exhibit C to
the Series Supplement and otherwise satisfactory to the Trustee and
Initial Purchaser, as applicable, or such other written statement as
the Depositor shall prescribe.
7. The Purchaser agrees that if at some time in the future it wishes to
transfer or exchange any of the Class A-2 Certificates, it will not
transfer or exchange any of the Class A-2 Certificates unless such
transfer or exchange is in accordance with Section 5.04 of the Trust
Agreement. The Purchaser understands that any purported transfer of
the Class A-2 Certificates (or any interest therein) in
contravention of any of the restrictions and conditions in the Trust
Agreement, as applicable, shall be void, and the purported
transferee in such transfer shall not be recognized by the Trust or
any other Person as a Certificateholder, as the case may be, for any
purpose.
8. The purchaser (i) acknowledges that the Depositor, the Initial
Purchaser, the Trustee and others will rely upon the truth and
accuracy of the foregoing acknowledgments, representations and
agreements and agrees that the Depositor, the Initial Purchaser and
the Trustee are irrevocably authorized to produce this letter or a
copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered
hereby, and (ii) agrees that, if any of the acknowledgments,
representations, warranties and agreements made or deemed to have
been made by such purchaser's purchase of the Class A-2 Certificates
are no longer accurate, such purchaser shall promptly notify the
Depositor and the Initial Purchaser. If the purchaser is acquiring
any Class A-2 Certificates as a fiduciary or agent for one or more
investor accounts, it represents that it has sole investment
discretion with respect to each such account and it has full power
to make the foregoing acknowledgments, representations
C-3
and agreements on behalf of each such account and that each such
investor account is eligible to purchase the Class A-2 Certificates.
You are entitled to rely upon this letter and are irrevocably authorized
to produce this letter or a copy hereof to any interested party in any
administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.
Very truly yours,
By:
--------------------------
Name:
Title:
C-4
