Exhibit (a)(2)
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AMENDED AND RESTATED
TRUST AGREEMENT
CONSTITUTING
CONTIFINANCIAL STRYPES TRUST
Dated as of March 26, 1997
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS................................................... 2
ARTICLE II
TRUST DECLARATION; PURPOSES, POWERS
AND DUTIES OF THE TRUSTEES; ADMINISTRATION
SECTION 2.1 NAME.......................................................... 7
SECTION 2.2 OFFICE........................................................ 7
SECTION 2.3 RATIFICATION AND APPROVAL OF ACTION OF EITHER OR BOTH OF THE
DEPOSITOR AND THE INITIAL TRUSTEE............................. 7
SECTION 2.4 DECLARATION OF TRUST; PURPOSES OF THE TRUST................... 7
SECTION 2.5 GENERAL POWERS AND DUTIES OF THE TRUSTEES..................... 7
SECTION 2.6 PORTFOLIO ACQUISITION......................................... 9
SECTION 2.7 PORTFOLIO ADMINISTRATION...................................... 9
SECTION 2.8 MANNER OF SALES............................................... 12
SECTION 2.9 LIMITATIONS ON TRUSTEES' POWERS............................... 13
ARTICLE III
ACCOUNTS AND PAYMENTS
SECTION 3.1 THE TRUST ACCOUNT............................................. 13
SECTION 3.2 DISTRIBUTIONS TO HOLDERS...................................... 14
SECTION 3.3 SEGREGATION................................................... 14
SECTION 3.4 INVESTMENTS................................................... 14
ARTICLE IV
REDEMPTION
SECTION 4.1 REDEMPTION.................................................... 14
ARTICLE V
ISSUANCE OF CERTIFICATES;
REGISTRY; TRANSFER OF STRYPES
SECTION 5.1 FORM OF CERTIFICATE........................................... 15
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SECTION 5.2 TRANSFER OF STRYPES; ISSUANCE, TRANSFER AND INTERCHANGE OF
CERTIFICATES.................................................. 15
SECTION 5.3 REPLACEMENT OF CERTIFICATES................................... 16
SECTION 5.4 LIMITATION ON LIABILITY....................................... 16
SECTION 5.5 GENERAL PROVISIONS REGARDING THE STRYPES...................... 16
ARTICLE VI
EXECUTION OF THE CONTRACT
SECTION 6.1 EXECUTION OF THE CONTRACT..................................... 17
ARTICLE VII
TRUSTEES
SECTION 7.1 TRUSTEES...................................................... 17
SECTION 7.2 VACANCIES..................................................... 17
SECTION 7.3 POWERS........................................................ 17
SECTION 7.4 MEETINGS...................................................... 18
SECTION 7.5 RESIGNATION AND REMOVAL....................................... 18
SECTION 7.6 LIABILITY..................................................... 18
SECTION 7.7 COMPENSATION.................................................. 19
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 MEETINGS OF HOLDERS........................................... 19
SECTION 8.2 BOOKS AND RECORDS; REPORTS.................................... 20
SECTION 8.3 DISSOLUTION................................................... 20
SECTION 8.4 AMENDMENT AND WAIVER.......................................... 21
SECTION 8.5 ACCOUNTANTS................................................... 22
SECTION 8.6 NATURE OF HOLDER'S INTEREST................................... 23
SECTION 8.7 DELAWARE LAW TO GOVERN........................................ 23
SECTION 8.8 NOTICES....................................................... 23
SECTION 8.9 SEVERABILITY.................................................. 24
SECTION 8.10 COUNTERPARTS.................................................. 24
SECTION 8.11 SUCCESSORS AND ASSIGNS........................................ 24
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AMENDED AND RESTATED TRUST AGREEMENT
This Amended and Restated Trust Agreement, dated as of March 26, 1997 (the
"Trust Agreement"), by and among ML IBK Positions, Inc. and Bear, Xxxxxxx & Co.
Inc., as sponsors (the "Sponsors"), Xxxxxx X. Xxxxxxx, Xxxxxxx X. Xxxxxx XXX and
Xxxxx X. X'Xxxxx, as trustees (the "Trustees"), and the Holders (as defined
herein), constituting ContiFinancial STRYPES Trust (the "Trust").
W I T N E S S E T H:
WHEREAS, Xxxx X. Xxxx, as depositor (the "Depositor") and Xxxxxxx X.
Xxxxxxxx, as trustee (the "Initial Trustee"), have previously entered into a
Trust Agreement dated as of March 14, 1996 (the "Original Agreement"), creating
XYZ STRYPES Trust;
WHEREAS, the Depositor has transferred his interest in XYZ STRYPES Trust to
the Sponsors;
WHEREAS, the Trustees hereby ratify and approve the transfer of the
interest of the Depositor in XYZ STRYPES Trust to the Sponsors;
WHEREAS, pursuant to an Instrument of Appointment, Acceptance, and
Resignation, dated as of February __, 1997 (the "Instrument"), the Initial
Trustee appointed the Trustees as successor trustees to the Initial Trustee, the
Trustees accepted such appointment, and the Initial Trustee thereupon resigned
as trustee of the Trust;
WHEREAS, the Sponsors hereby waive the thirty (30) day notice requirement
of Section 5 of the Original Agreement and ratify and approve the actions taken
pursuant to the Instrument;
WHEREAS, the parties hereto desire to amend and restate the Original
Agreement in certain respects; and
WHEREAS, the Trust has previously issued one STRYPES to each of the
Sponsors in consideration of the aggregate purchase price therefor of $100,000,
or $50,000 per STRYPES, in satisfaction of the requirements of Section 14(a)(1)
under the Investment Company Act (as hereinafter defined);
NOW, THEREFORE, the parties hereto agree to amend and restate the Original
Agreement as provided herein. Upon the execution and delivery of counterpart
signature pages hereto by the parties hereto, the Original Agreement will be
automatically amended and restated in its entirety to read as provided herein.
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. Whenever used in this Trust Agreement, the
following words and phrases shall have the meanings listed below. Any reference
to any agreement shall be a reference to such agreement as supplemented or
amended from time to time.
"ACCELERATION AMOUNT NOTICE" - An Acceleration Amount Notice as defined in
the Contract.
"ACCELERATION VALUE" - The Acceleration Value as defined in the Contract.
"ADMINISTRATION AGREEMENT" - The Administration Agreement between the
Administrator and the Trust, substantially in the form of Exhibit E hereto, and
any substitute agreement therefor entered into pursuant to Section 2.5(a)
hereof.
"ADMINISTRATOR" - The Chase Manhattan Bank or its successor as permitted
under Section 6.1 of the Administration Agreement or appointed pursuant to
Section 2.5(a) hereof.
"AGGREGATE ACCELERATION VALUE" - The Aggregate Acceleration Value as
defined in the Contract.
"BUSINESS DAY" - Any day that is not a Saturday, a Sunday or a day on which
the New York Stock Exchange, The NASDAQ National Market, or banking institutions
or trust companies in The City of New York are authorized or obligated by law or
executive order to close.
"CASH SETTLEMENT OPTION" - The option of the Contracting Stockholder
described in Section 2.5 of the Contract to settle the Contract for a cash
payment on the Settlement Date.
"CERTIFICATE" - Any certificate evidencing the ownership of STRYPES
substantially in the form of Exhibit A hereto.
"CLOSING DATE" - The Closing Date as defined in the Contract.
"CODE" - The Internal Revenue Code of 1986, as amended from time to time;
each reference herein to any section of the Code or any regulation thereunder
shall constitute a reference to any successor provision thereto.
"COLLATERAL AGENT" - The Chase Manhattan Bank or its successor as permitted
under the Security and Pledge Agreement.
"COMMENCEMENT DATE" - The day on which the Purchase Agreement is executed.
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"COMMISSION" - The United States Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or if at any time
after the execution of this Trust Agreement such Commission is not existing or
performing the duties now assigned to it, then the body performing such duties
on such date.
"COMPANY" - ContiFinancial Corporation, a Delaware corporation.
"COMPANY REORGANIZATION EVENT" - A Reorganization Event with respect to the
Company or any Company Successor (other than a statutory merger effected solely
for the purpose of changing, and the sole effect of which is to so change, the
state of incorporation of the Company or such Company Successor).
"COMPANY SUCCESSOR" - Any surviving entity or subsequent surviving entity
of the Company.
"CONTRACT" - The Forward Purchase Contract among the Trust, the Collateral
Agent, as agent and custodian for and on behalf of the Trust, and the
Contracting Stockholder, substantially in the form of Exhibit C hereto.
"CONTRACT CONSIDERATION" - The Contract Consideration as defined in the
Contract.
"CONTRACTING STOCKHOLDER" - The person named as "Seller" in the Contract.
"CUSTODIAN" - The Chase Manhattan Bank or its successor as permitted under
paragraph 11 of the Custodian Agreement or appointed pursuant to Section 2.5(a)
hereof.
"CUSTODIAN AGREEMENT" - The Custodian Agreement, dated as of March 26,
1997, between the Custodian and the Trust, and any substitute agreement therefor
entered into pursuant to Section 2.5(a) hereof.
"DATE OF DELIVERY" - A Date of Delivery as defined in the Contract.
"DEPOSITARY" - The Depository Trust Company, or any successor thereto.
"DISTRIBUTION DATE" - Each February 15, May 15, August 15 and November 15
of each year, commencing May 15, 1997, to and including May 15, 2000 (or if any
such date is not a Business Day, then the first Business Day thereafter).
"EARLY SETTLEMENT DATE" - The Early Settlement Date as defined in the
Contract.
"EVENT OF DEFAULT" - An Event of Default as defined in the Security and
Pledge Agreement.
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"EXCHANGE" - The delivery by the Trustees to the Holders of Reference
Property (or, if the Contracting Stockholder elects to exercise the Cash
Settlement Option under the Contract, the amount of cash with an equal value, as
specified in the Contract as payable in respect thereof) in mandatory exchange
for the STRYPES on the Exchange Date.
"EXCHANGE ACT" - The Securities Exchange Act of 1934, as amended from time
to time; each reference herein to any section of such Act or any rule or
regulation thereunder shall constitute a reference to any successor provision
thereto.
"EXCHANGE DATE" - May 15, 2000.
"FIRM CONSIDERATION AMOUNT" - The Firm Consideration Amount as defined in
the Contract.
"FIRM PAYMENT DATE" - The Firm Payment Date as defined in the Contract.
"HOLDER" - The registered owner of any STRYPES as recorded on the books of
the Paying Agent.
"INDEMNITY AGREEMENT" - The Fund Indemnity Agreement among the Trust,
Xxxxxxx Xxxxx and the Contracting Stockholder, substantially in the form of
Exhibit D hereto.
"INDEPENDENT DEALERS" - Independent Dealers as defined in the Contract.
"INVESTMENT COMPANY ACT" - The Investment Company Act of 1940, as amended
from time to time; each reference herein to any section of such Act or any rule
or regulation thereunder shall constitute a reference to any successor provision
thereto.
"LIQUIDATION VALUE" - The aggregate proceeds received by the Trust from the
sale of the U.S. Treasury Securities pursuant to Section 2.8(a) hereof.
"MANAGING TRUSTEE" - The Trustee designated the Managing Trustee by
resolution of the Trustees.
"XXXXXXX XXXXX" - Xxxxxxx Xxxxx & Co., Inc.
"OPTION CONSIDERATION AMOUNT" - The Option Consideration Amount as defined
in the Contract.
"ORIGINAL AGREEMENT" - The meaning specified in the recitals hereof.
"PARTICIPANT" - A Person having an account with the Depositary.
"PAYING AGENT" - ChaseMellon Shareholder Services, L.L.C. or its successor
as permitted under Section 6.6 of the Paying Agent Agreement or appointed
pursuant to Section 2.5(a) hereof.
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"PAYING AGENT AGREEMENT" - The Paying Agent Agreement between the Paying
Agent and the Trust, substantially in the form of Exhibit F hereto, and any
substitute agreement therefor entered into pursuant to Section 2.5(a) hereof.
"PERSON" - An individual, partnership, corporation (including a business
trust), limited liability company, joint stock company, trust, unincorporated
association, joint venture or other entity, or a government or any political
subdivision or agency or instrumentality thereof.
"PROSPECTUS" - The prospectus of the Trust relating to the offering of the
STRYPES and constituting a part of the Registration Statement, as first filed
with the Commission pursuant to Rule 497(b) or (h) under the Securities Act, and
as subsequently amended or supplemented by the Trust.
"PURCHASE AGREEMENT" - The Purchase Agreement among the Trust, the
Contracting Stockholder and the Underwriters relating to the issue and sale of
the STRYPES, as described in the Prospectus.
"QUARTERLY DISTRIBUTION" - $______ (or, in the case of the period from
and including April __, 1997 to and including May 14, 1997, $_______).
"RECORD DATE" - Each February 1, May 1, August 1, and November 1 of each
year, commencing May 1, 1997.
"REFERENCE PROPERTY" - The Reference Property as defined in the Contract.
"REFERENCE SECURITY" - A Reference Security as defined in the Contract.
"REGISTRATION STATEMENT" - The Registration Statement on Form N-2
(Registration Nos. 333-1787; 811-7565) of the Trust, as amended.
"REORGANIZATION EVENT" - A Reorganization Event as defined in the Contract.
"SECURITIES ACT" - The Securities Act of 1933, as amended from time to
time; each reference herein to any section of such Act or any rule or regulation
thereunder shall constitute a reference to any successor provision thereto.
"SECURITY AND PLEDGE AGREEMENT" - The Security and Pledge Agreement among
the Collateral Agent, the Contracting Stockholder and the Trust, securing the
obligations of the Contracting Stockholder under the Contract, substantially in
the form of Exhibit B hereto.
"SETTLEMENT DATE" - The Settlement Date as defined in the Contract.
"STRYPES" - Structured Yield Product Exchangeable for Stock-SM-
representing a proportionate share of beneficial ownership in the Trust
evidencing a Holder's undivided
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interest in the Trust and right to receive a pro rata distribution upon
liquidation of the Trust Estate.
"TAX EVENT" - A Tax Event as defined in the Contract.
"TAX EVENT ACCELERATION AMOUNT" - The Tax Event Acceleration Amount as
defined in the Contract.
"TAX EVENT ACCELERATION DATE" - A Tax Event Acceleration Date as defined in
the Contract.
"TAX EVENT CASH SETTLEMENT OPTION" - The Tax Event Cash Settlement Option
as defined in the Contract to settle the Contract for a cash payment on the
Tax Event Acceleration Date.
"TEMPORARY INVESTMENTS" - Direct short-term U.S. government obligations, as
specified from time to time by the Trustees or through standing instructions
from the Trustees to the Administrator or the Paying Agent.
"TRANSFER AGENT AND REGISTRAR" - With respect to any Reference Security at
any time, the Person then acting as Transfer Agent and Registrar for such
Reference Security.
"TRUST ACCOUNT" - The account created pursuant to Section 3.1 hereof.
"TRUST ESTATE" - The Contract and the U.S. Treasury Securities held at any
time by the Trust, together with any Temporary Investments held at any time
pursuant to Section 3.4 hereof, and any proceeds thereof or therefrom and any
other moneys held at any time in the Trust Account.
"UNDERWRITERS" - The several Underwriters named in the Purchase Agreement.
"U.S. TREASURY SECURITIES" - The meaning specified in Section 2.6(b)
hereof.
__________________
(SM)Service mark of Xxxxxxx Xxxxx & Co., Inc.
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ARTICLE II
TRUST DECLARATION; PURPOSES, POWERS
AND DUTIES OF THE TRUSTEES; ADMINISTRATION
SECTION 2.1 NAME. The Trust is named "ContiFinancial STRYPES Trust," as
such name may be modified from time to time by the Trustees following written
notice to the Holders. The Trust's activities may be conducted under the name
of the Trust or any other name deemed advisable by the Trustees.
SECTION 2.2 OFFICE. The address of the principal office of the Trust is
c/o Puglisi & Associates, 000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000.
On ten Business Days written notice to the Holders the Trustees may designate
another principal office.
SECTION 2.3 RATIFICATION AND APPROVAL OF ACTION OF EITHER OR BOTH OF THE
DEPOSITOR AND THE INITIAL TRUSTEE. The Sponsors and the Trustees hereby ratify
and approve any and all actions taken by either or both of the Depositor and the
Initial Trustee on behalf of the Trust on or prior to the date hereof in
connection with the registration of the Trust under the Investment Company Act,
in connection with the registration of the offer and sale of the STRYPES under
the Securities Act, or otherwise incident to, or connected with, or necessary to
accomplish, the foregoing or the offer and sale of the STRYPES by the
Underwriters and the operation of the Trust as described in the Prospectus.
SECTION 2.4 DECLARATION OF TRUST; PURPOSES OF THE TRUST. The Sponsors
hereby create the Trust in order that it may acquire the U.S. Treasury
Securities, enter into the Contract, issue and sell to the Sponsors and the
several Underwriters the STRYPES, hold the Trust Estate in trust for the use and
benefit of all present and future Holders and otherwise carry out the terms and
conditions of this Trust Agreement, all for the purpose of achieving the
investment objectives set forth in the Prospectus. The Trustees hereby declare
that they will accept and hold the Trust Estate in trust for the use and benefit
of all present and future Holders. The Depositor has heretofore deposited with
the Initial Trustee the sum of $1 to accept and hold in trust hereunder until
the issuance and sale of the STRYPES to the several Underwriters, whereupon such
sum shall be donated to an organization satisfying the requirements of Section
170(c)(2) of the Code selected by unanimous consent of the Trustees.
SECTION 2.5 GENERAL POWERS AND DUTIES OF THE TRUSTEES. In furtherance
of the provisions of Section 2.4 hereof, the Sponsors authorize and direct the
Trustees, on behalf of the Trust:
(a) to enter into and perform (and, in accordance with Section 8.4(a)
hereof, amend), the Contract, the Security and Pledge Agreement, the
Purchase Agreement, the Indemnity Agreement, the Custodian Agreement, the
Administration Agreement and the Paying Agent Agreement and to perform all
obligations of the
7
Trustees (including the obligation to provide indemnity hereunder and
thereunder) and enforce all rights and remedies of the Trust under each of
such agreements; and if any of the Custodian Agreement, the Administration
Agreement, the Security and Pledge Agreement and the Paying Agent Agreement
terminates, or the agent of the Trust thereunder resigns or is discharged,
to appoint a substitute agent and enter into a new agreement with such
substitute agent containing provisions substantially similar to those
contained in the agreement being terminated; provided that in any such new
agreement (i) the Custodian and the Paying Agent shall each be a commercial
bank or trust company organized and existing under the laws of the United
States of America or any state therein, shall have full trust powers and
shall have minimum capital, surplus and retained earnings of not less than
$100,000,000; and (ii) the Administrator and the Collateral Agent shall
each be a reputable financial institution eligible and qualified in all
respects to carry out its obligations under the Administration Agreement or
the Security and Pledge Agreement, as the case may be;
(b) to hold the Trust Estate in trust, to create and administer the
Trust Account, to direct payments received by the Trust to the Trust
Account and to make payments out of the Trust Account as set forth in
Article III hereof;
(c) to issue and sell to the Underwriters an aggregate of up to
3,220,000 STRYPES (including those STRYPES subject to the over-allotment
option of the several Underwriters provided for in the Purchase Agreement)
pursuant to the Purchase Agreement and as contemplated by the Prospectus;
provided, however, that subsequent to the determination of the public
offering price per STRYPES and related underwriting discount for the
STRYPES to be sold to the several Underwriters but prior to the sale of the
STRYPES to the several Underwriters, the STRYPES originally issued to the
Sponsors shall be split into a greater number of STRYPES so that
immediately following such split the value of each STRYPES held by the
Sponsors will equal the aforesaid public offering price per STRYPES;
(d) to select independent public accountants and, subject to the
provisions of Section 8.5 hereof, to engage such independent public
accountants;
(e) to engage legal counsel and, to the extent required by Section
2.7 hereof, to engage professional advisors and pay reasonable compensation
thereto;
(f) to defend any action commenced against the Trustees or the Trust
and to prosecute any action which the Trustees deem necessary to protect
the Trust and the rights and interests of Holders, and to pay the costs
thereof;
(g) to delegate any or all of its powers and duties hereunder as
contemplated by the Custodian Agreement, the Paying Agent Agreement and the
Administration Agreement, to the extent permitted by applicable law; and
(h) to adopt the fundamental policies set forth in the Prospectus, to
adopt and amend a code of regulations, and take any and all such other
actions as necessary or advisable to carry out the purposes of the Trust,
subject
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to the provisions hereof and applicable law, including, without limitation,
the Investment Company Act.
SECTION 2.6 PORTFOLIO ACQUISITION. In furtherance of the provisions of
Section 2.4 hereof, the Sponsors further specifically authorize and direct the
Trustees, acting on behalf of the Trust:
(a) to enter into the Contract with respect to the Reference Property
with the Contracting Stockholder on the Commencement Date for settlement on
the date or dates provided thereunder and, subject to satisfaction of the
conditions set forth in the Contract, to pay to the Contracting Stockholder
the Firm Consideration Amount and any Option Consideration Amount
thereunder with the proceeds of the sale of the STRYPES, net of (1) the
underwriting discount, (2) the purchase price paid for the U.S. Treasury
Securities as provided in paragraph (b) below, and (3) an amount in cash
equal to the difference between the aggregate amount of all Quarterly
Distributions to be made on the STRYPES and the aggregate proceeds to be
received from the U.S. Treasury Securities upon maturity; and, subject to
the adjustments and exceptions set forth in the Contract, the Contract
shall entitle the Trust to receive from the Contracting Stockholder on the
Settlement Date a specified number or amount of each type of Reference
Security and other property constituting part of the Reference Property
(or, if the Contracting Stockholder elects to exercise the Cash Settlement
Option under the Contract, an amount of cash with an equal value) so that
the Trust may execute the Exchange with the Holders; and
(b) to purchase for settlement on the Firm Payment Date, and on any
Date of Delivery, as appropriate, with the proceeds of the sale the
STRYPES, net of the underwriting discount, U.S. Treasury securities from
such brokers or dealers as the Trustees shall designate in writing to the
Administrator having the terms set forth on Schedule I hereto ("U.S.
Treasury Securities").
SECTION 2.7 PORTFOLIO ADMINISTRATION. In furtherance of the provisions
of Section 2.4 hereof, the Sponsors further specifically authorize and direct
the Trustees:
(a) DETERMINATION OF REFERENCE PROPERTY ADJUSTMENTS. Upon receipt of
any notice pursuant to Section 6.4(a) of the Contract of an event requiring
an adjustment to the Reference Property, or upon otherwise acquiring
knowledge of such an event, to calculate the required adjustment and
furnish notice thereof to the Collateral Agent and the Administrator or to
request from the Administrator such further information as may be necessary
to calculate or effect the required adjustment;
(b) SELECTION OF SECURITIES DEALERS; INDEPENDENT INVESTMENT BANK. At
such times and for such purposes provided in the Contract, (i) to select
three recognized securities dealers in The City of New York to provide net
bids for the purchase of rights or warrants referred to in Section 3.1(b)
of
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the Contract and to deliver notice to the Collateral Agent pursuant to
Section 4(a) of the Security and Pledge Agreement identifying such firms,
and (ii) to select and retain a nationally recognized investment banking
firm to determine the market value of any Reference Property as provided in
the Contract, including, without limitation, Reference Property consisting
of property other than cash or Reference Securities, and to deliver to the
Contracting Stockholder notice pursuant to Section 8.1 of the Contract
identifying the firm proposed to be selected and retained, and to consult
with the Contracting Stockholder on such selection and retention as
provided in such Section 8.1;
(c) ACCELERATION UPON EVENT OF DEFAULT. Upon receipt of any notice
pursuant to Section 6.4(b) of the Contract that an Event of Default has
occurred, or upon otherwise acquiring notice that an Event of Default has
occurred, to request quotations from Independent Dealers, compute the
Acceleration Value and the Aggregate Acceleration Value and deliver an
Acceleration Amount Notice, in each case with respect to the Contract, all
as described in Section 7.1 of the Contract;
(d) SALE OF U.S. TREASURY SECURITIES UPON TAX EVENT ACCELERATION.
Upon receipt of any notice from the Contracting Stockholder that it is
exercising its option pursuant to Section 7.3 of the Contract to accelerate
the settlement of its obligations thereunder following the occurrence of a
Tax Event, (i) to select three United States government securities primary
dealers in The City of New York to provide bids for the purchase of the
U.S. Treasury Securities then held by the Trust as provided in Section
2.8(a) hereof, (ii) to sell the U.S. Treasury Securities then held by the
Trust at the highest bid received as provided in Section 2.8(a) hereof and
(iii) to provide notice to the Collateral Agent and the Contracting
Stockholder of the Liquidation Value and the Tax Event Acceleration Amount,
all as described in Section 7.3 of the Contract;
(e) DETERMINATION OF CONTRACT CONSIDERATION. To calculate, at such
times and in such manner as provided in the Contract, the aggregate number
or amount of each type of Reference Security and other property
constituting part of the Reference Property (or, if the Cash Settlement
Option under the Contract is exercised, the amount of cash with an equal
value) required to be delivered by the Contracting Stockholder under
Sections 2.1, 2.3, 2.4 and 2.5 of the Contract or, if a Company
Reorganization Event shall have occurred, the aggregate number or amount of
each type of Reference Security and other property constituting part of the
Reference Property that would be required to be delivered by the
Contracting Stockholder under the Contract if the Exchange Date were
redefined for all purposes of the Contract (including, without limitation,
for purposes of Section 2.4 thereof) to be the Early Settlement Date, all
as provided in Section 7.2 of the Contract or, if the Contracting
Stockholder shall have exercised its option to accelerate the settlement of
its obligations under the Contract upon the occurrence of a Tax Event, the
amount of cash and the aggregate number or amount of each type of Reference
Security and other property constituting part of the Reference Property
(or, if the Tax Event Cash Settlement Option under the Contract is
exercised, the amount of cash with an equal value) required to be delivered
by the Contracting Stockholder on the Tax Event Acceleration Date, all as
provided in
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Section 7.3 of the Contract, and to furnish notice of the amounts so
determined to the Collateral Agent and the Contracting Stockholder; and
(f) DISTRIBUTION OF CONTRACT CONSIDERATION ON EXCHANGE DATE. Unless
an Event of Default or a Company Reorganization Event shall have occurred
or the Contracting Stockholder shall have exercised its option to
accelerate the settlement of its obligations under the Contract upon the
occurrence of a Tax Event (in which events distribution of the Contract
Consideration shall be governed by Section 8.3 below) or the Contracting
Stockholder elects to exercise the Cash Settlement Option with respect to
the Reference Property otherwise deliverable under the Contract (in which
event the cash received in respect thereof shall be distributed pro rata to
the Holders of STRYPES on the Exchange Date):
(i) DETERMINATION OF FRACTIONAL UNITS OR INTERESTS. To
determine, on the Exchange Date: (A) for each Holder of STRYPES, such
Xxxxxx's pro rata share of the total amount of each type of Reference
Security and other property constituting part of the Reference
Property delivered to the Trust on the Settlement Date under the
Contract; and (B) the amount of the fractional units or interests of
any type of Reference Property, if any, allocable to each Holder and
in the aggregate;
(ii) CASH FOR FRACTIONAL UNITS OR INTERESTS. To sell, in the
principal market therefor, on the Exchange Date, an aggregate number
or amount of each type of Reference Security and other property
constituting part of the Reference Property (other than cash) equal to
the aggregate number of fractional units or interests of such type of
Reference Property, if any, determined pursuant to clause (i)(B)
above;
(iii) DELIVERY OF REFERENCE SECURITIES. To deliver the remaining
units of any Reference Security to the Transfer Agent and Registrar on
the Exchange Date, with instructions that such units be re-registered
and re-issued as follows:
(A) for and in the name of each Holder (other than the
Depositary) who holds STRYPES in definitive form, the Transfer
Agent and Registrar shall be instructed to issue definitive
certificates representing a number of units of such Reference
Security equal to such Holder's pro rata share of the total
number of units of such Reference Security delivered to the Trust
on the Settlement Date under the Contract, rounded down to the
nearest integral number; and
(B) the Transfer Agent and Registrar shall be instructed to
transfer all remaining units of such Reference Security to the
account of the Custodian held through the Depositary, who shall
then be instructed to transfer and credit such units of such
Reference Security to each Participant who holds STRYPES, with
each Participant receiving its
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pro rata share of the total number of units of such Reference
Security delivered to the Trust on the Settlement Date under the
Contract, reduced by the aggregate cash value of any fractional
units of such Reference Security allocable to such Participant;
(iv) DELIVERY OF OTHER REFERENCE PROPERTY. To distribute on
the Exchange Date to each Holder of STRYPES such Holder's pro rata
share of the total number or amount of each type of Reference Property
consisting of cash or property other than cash or a Reference Security
delivered to the Trust on the Settlement Date under the Contract
rounding down to the nearest integral number in respect of any such
property;
(v) DISTRIBUTION OF CASH IN RESPECT OF FRACTIONAL UNITS OR
INTERESTS. To distribute on the Exchange Date to each Holder of
STRYPES to which a fractional unit or interest of any particular type
of Reference Property is allocable as determined pursuant to clause
(i)(B) above such Holder's pro rata portion of the proceeds obtained
from the liquidation of all fractional units or interests of such type
of Reference Property pursuant to clause (ii) above (net of any
brokerage or related expenses); and
(vi) RECORD DATE. The distributions described in this
paragraph (f) shall be made to Holders of record as of the close of
business on the Business Day preceding the Exchange Date.
SECTION 2.8 MANNER OF SALES. (a) Upon receipt of any notice from the
Contracting Stockholder that it is exercising its option pursuant to Section 7.3
of the Contract to accelerate the settlement of its obligations thereunder
following the occurrence of a Tax Event, the Trustees on the second Business Day
immediately preceding the Tax Event Acceleration Date shall solicit cash bids,
for settlement on the Business Day immediately preceding the Tax Event
Acceleration Date, from three (or such fewer number of dealers as may be
providing such bids) of the United States government securities primary dealers
in The City of New York listed on Schedule 2.8(a) hereto selected by the
Trustees after consultation with the Contracting Stockholder (which may include
the Administrator or its affiliates or any affiliate of Xxxxxxx Xxxxx) for the
purchase by the quoting dealer of all U.S. Treasury Securities then held by the
Trust. If for any reason the Trustees are unable to obtain the required bid on
the second Business Day preceding the Tax Event Acceleration Date, the Trustees
shall attempt to obtain such bid daily until they are able to obtain the
required bid. The Trustees shall accept the highest bid received that will
result in the greatest amount of proceeds from the sale of the U.S. Treasury
Securities then held by the Trust and shall sell all such U.S. Treasury
Securities at that highest bid and the proceeds from such sale shall be held by
the Paying Agent in the Trust Account. The Trustees shall not be held liable in
any way for failure to obtain such required bid in accordance with this Section
2.8(a).
(b) Any sale of Trust property permitted under Section 8.3(c) hereof shall
be made through such executing brokers or to such dealers as the Trustees,
seeking best price and execution for the Trust, shall designate in writing to
the Paying Agent, taking into account
12
such factors as price, commission, size of order, difficulty of execution and
brokerage skill required.
SECTION 2.9 LIMITATIONS ON TRUSTEES' POWERS. The Trustees, acting on
behalf of the Trust, are not permitted:
(a) to purchase or hold any securities or instruments except for the
U.S. Treasury Securities, the Contract, any Reference Security
received pursuant to the Contract, and the Temporary Investments
contemplated by Section 3.4 hereof;
(b) to dispose of the Contract prior to the Exchange Date;
(c) to issue any securities or instruments except for the STRYPES, or
to issue any STRYPES other than the STRYPES sold to the Sponsors
and the STRYPES to be sold pursuant to the Purchase Agreement and
until such STRYPES have been so purchased and paid for in full;
(d) to make short sales or purchases on margin;
(e) to write put or call options;
(f) to borrow money;
(g) to underwrite securities;
(h) to purchase or sell real estate, commodities or commodities
contracts;
(i) to purchase restricted securities;
(j) to make loans; or
(k) to take any action, or direct or permit the Administrator, the
Paying Agent or the Custodian to take any action, that would vary
the investment of the Holders within the meaning of Treasury
Regulation Section 301.7701-4(c), or otherwise take any action or
direct or permit any action to be taken that would or could cause
the Trust not to be a "grantor trust" under the Code.
ARTICLE III
ACCOUNTS AND PAYMENTS
SECTION 3.1 THE TRUST ACCOUNT. The Trustees shall, upon issuance of the
STRYPES, establish with the Paying Agent an account to be called the "Trust
Account". All moneys received by the Trustees in respect of the Contract, the
U.S. Treasury Securities
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and any Temporary Investments held pursuant to Section 3.4 hereof, all moneys
received from the sale of the STRYPES to the Sponsors, and any proceeds from the
sale of the STRYPES to the Underwriters after the purchase of the Contract and
the U.S. Treasury Securities shall be credited to the Trust Account.
SECTION 3.2 DISTRIBUTIONS TO HOLDERS On or shortly after each
Distribution Date the Trustees shall distribute to each Holder of record at the
close of business on the preceding Record Date, at the post office address of
the Holder appearing on the books of the Trust or Paying Agent or by any other
means mutually agreed upon by the Holder and the Trustees, an amount equal to
such Holder's pro rata share of the Quarterly Distribution computed as of the
close of business on such Distribution Date.
SECTION 3.3 SEGREGATION. All moneys and other assets deposited or
received by the Trustees hereunder shall be held by them in trust as part of the
Trust Estate until required to be disbursed or otherwise disposed of in
accordance with the provisions of this Trust Agreement, and the Trustees shall
handle such moneys and other assets in such manner as shall constitute the
segregation and holding in trust within the meaning of the Investment Company
Act.
SECTION 3.4 INVESTMENTS To the extent necessary to enable the Paying
Agent to make the next succeeding Quarterly Distribution, any moneys deposited
with or received by the Trustees in the Trust Account shall be invested as soon
as possible by the Paying Agent in Temporary Investments maturing no later than
the Business Day preceding the next following Distribution Date. Except as
otherwise specifically provided herein or in the Paying Agent Agreement, the
Paying Agent shall not have the power to sell, transfer or otherwise dispose of
any Temporary Investment prior to the maturity thereof, or to acquire additional
Temporary Investments. The Paying Agent shall hold any Temporary Investment to
its maturity and shall apply the proceeds thereof upon maturity to the payment
of the next succeeding Quarterly Distribution. All such Temporary Investments
shall be selected from time to time by the Trustees or pursuant to standing
instructions from the Trustees to the Administrator, and the Administrator
and/or Paying Agent shall have no liability to the Trust or any Holder or any
other Person with respect to any such Temporary Investment. Any interest or
other income received on any moneys in the Trust Account shall, upon receipt
thereof, be deposited into the Trust Account. Notwithstanding the foregoing,
not more than 5% of the assets of the Trust may be held at any time in the form
of cash and Temporary Investments, and the Trustees shall distribute cash, or
liquidate Temporary Investments and distribute the proceeds thereof, if, when
and to the extent needed to maintain compliance with the foregoing restriction.
ARTICLE IV
REDEMPTION
SECTION 4.1 REDEMPTION. The Trustees shall have no right or obligation
to redeem STRYPES.
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ARTICLE V
ISSUANCE OF CERTIFICATES;
REGISTRY; TRANSFER OF STRYPES
SECTION 5.1 FORM OF CERTIFICATE. Each Certificate evidencing STRYPES
shall be countersigned manually or in facsimile by the Managing Trustee and
executed manually by the Paying Agent in substantially the form of Exhibit A
hereto with the blanks appropriately filled in, shall be dated the date of
execution and delivery by the Paying Agent and shall represent a fractional
undivided interest in the Trust, the numerator of which fraction shall be the
number of STRYPES set forth on the face of such Certificate and the denominator
of which shall be the total number of STRYPES outstanding at that time. All
STRYPES shall be issued in registered form and shall be numbered serially.
Pending the preparation of definitive Certificates, the Trustees may execute and
the Paying Agent shall authenticate and deliver temporary Certificates (printed,
lithographed, typewritten or otherwise reproduced, in each case in form
satisfactory to the Paying Agent). Temporary Certificates shall be issuable as
registered Certificates substantially in the form of the definitive Certificates
but with such omissions, insertions and variations as may be appropriate for
temporary Certificates, all as may be determined by the Trustees with the
concurrence of the Paying Agent. Every temporary Certificate shall be executed
by the Managing Trustee and be authenticated by the Paying Agent upon the same
conditions and in substantially the same manner, and with like effect, as the
definitive Certificates. Without unreasonable delay the Managing Trustee shall
execute and shall furnish definitive Certificates and thereupon temporary
Certificates may be surrendered in exchange therefor without charge at each
office or agency of the Paying Agent and the Paying Agent shall authenticate and
deliver in exchange for such temporary Certificates definitive Certificates for
a like aggregate number of STRYPES. Until so exchanged, the temporary
Certificates shall be entitled to the same benefits hereunder as definitive
Certificates.
SECTION 5.2 TRANSFER OF STRYPES; ISSUANCE, TRANSFER AND INTERCHANGE OF
CERTIFICATES. XXXXXXX may be transferred by the Holder thereof by presentation
and surrender of properly endorsed Certificates at the office of the Paying
Agent, accompanied by such documents executed by the Holder or his authorized
attorney as the Paying Agent deems necessary to evidence the authority of the
person making the transfer. Certificates issued pursuant to this Trust
Agreement are interchangeable for one or more other Certificates evidencing an
equal aggregate number of STRYPES and all Certificates issued as may be
requested by the Holder and deemed appropriate by the Paying Agent shall be
issued in denominations of one STRYPES or any multiple thereof. The Paying
Agent may deem and treat the person in whose name any STRYPES shall be
registered upon the books of the Paying Agent as the owner of such STRYPES for
all purposes hereunder and the Paying Agent shall not be affected by any notice
to the contrary. The transfer books maintained by the Paying Agent for the
purposes of this Section 5.2 shall include the name and address of the record
owners of the STRYPES and shall be closed in connection with the dissolution of
the Trust pursuant to Section 8.3 hereof. A sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any such
transfer shall be paid to the Paying Agent by the Holder. A Holder may be
required to pay a fee for each new Certificate to be issued pursuant to the
preceding paragraph in such
15
amount as may be specified by the Paying Agent and approved by the Trustees.
All Certificates cancelled pursuant to this Trust Agreement may be voided by the
Paying Agent in accordance with the usual practice of the Paying Agent or in
accordance with the instructions of the Trustees; provided, however, that the
Paying Agent shall not be required to destroy cancelled Certificates. The
Paying Agent may adopt other reasonable rules and regulations for the
registration, transfer and tender of STRYPES as it may, in its discretion, deem
necessary.
SECTION 5.3 REPLACEMENT OF CERTIFICATES In case any Certificate shall
become mutilated or be destroyed, stolen or lost, the Paying Agent shall execute
and deliver a new Certificate in exchange and substitution therefor upon the
Holder's furnishing the Paying Agent with proper identification and satisfactory
indemnity, complying with such other reasonable regulations and conditions as
the Paying Agent may prescribe and paying such expenses and charges, including
any bonding fee, as the Paying Agent may incur or reasonably impose; provided
that if the Trust has dissolved or is in the process of dissolving, the Paying
Agent, in lieu of issuing such new Certificate, may, upon the terms and
conditions set forth herein, make the distributions set forth in Section 8.3(c)
hereof. Any mutilated Certificate shall be duly surrendered and cancelled
before any duplicate Certificate shall be issued in exchange and substitution
therefor. Upon issuance of any duplicate Certificate pursuant to this Section
5.3, the original Certificate claimed to have been lost, stolen or destroyed
shall become null and void and of no effect, and any bona fide purchaser thereof
shall have only such rights as are afforded under Article 8 of the Uniform
Commercial Code to a Holder presenting a Certificate for transfer in the case of
an overissue.
SECTION 5.4 LIMITATION ON LIABILITY. Pursuant to Section 3803(a) of the
Delaware Business Trust Act, 12 Del. C. Section 3801, et seq., the Holders of
the STRYPES shall be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware.
SECTION 5.5 GENERAL PROVISIONS REGARDING THE STRYPES.
(A) The consideration received by the Trust for the issuance of the
STRYPES shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(B) Upon issuance of the STRYPES as provided in this Trust Agreement,
the STRYPES so issued shall be deemed to be validly issued, fully paid and
non-assessable.
(C) Every person, by virtue of having become a Holder in accordance
with the terms of this Trust Agreement, shall be deemed to have expressly
assented and agreed to the terms of, and shall be bound by, this Trust
Agreement.
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ARTICLE VI
EXECUTION OF THE CONTRACT
SECTION 6.1 EXECUTION OF THE CONTRACT. The Contract shall be
countersigned manually or in facsimile by the Managing Trustee and executed
manually by each of the Contracting Stockholder and the Collateral Agent and
shall be dated the date of execution and delivery by the Contracting
Stockholder.
ARTICLE VII
TRUSTEES
SECTION 7.1 TRUSTEES. The Trust shall have three Trustees who shall
initially be elected by the Initial Trustee. One Trustee shall be the Managing
Trustee and, as such, is authorized to execute documents and instruments on
behalf of the Trust. The Managing Trustee will be appointed by resolution of
the Trustees. Each Trustee shall serve until the next regular annual or special
meeting of Holders called for the purpose of electing Trustees and, then, until
such Trustee's successor is duly elected and qualified. Holders may not
cumulate their votes in the election of Trustees. Each Trustee shall not be
considered to have qualified for the office unless such Trustee shall agree to
be bound by the terms of this Trust Agreement and shall evidence his consent by
executing this Trust Agreement or a supplement hereto.
SECTION 7.2 VACANCIES. Any vacancy in the office of a Trustee may be
filled in compliance with Sections 10 and 16 of the Investment Company Act by
the vote, within 30 days, of the remaining Trustees; provided that if required
by Section 16 of the Investment Company Act, the Trustees shall forthwith cause
to be held as promptly as possible and in any event within 60 days (unless the
Commission by order shall extend such period) a meeting of Holders for the
purpose of electing Trustees in compliance with Sections 10 and 16 of the
Investment Company Act. Until a vacancy in the office of any Trustee is filled
as provided above, the remaining Trustees in office, regardless of their number,
shall have the powers granted to the Trustees and shall discharge all the duties
imposed upon the Trustees by this Trust Agreement. Election shall be by the
affirmative vote of Holders of a majority of the STRYPES entitled to vote
present in person or by proxy at a special meeting of Holders called for the
purpose of electing any Trustee. Each individual Trustee shall be at least 21
years of age and shall not be under any legal disability. No Trustee who is an
"interested person", as defined in the Investment Company Act, may assume office
if it would cause the composition of the Trustees of the Trust not to be in
compliance with the percentage limitations on interested persons in Section 10
of the Investment Company Act. Trustees need not be Holders. Notice of the
appointment or election of a successor Trustee shall be mailed promptly after
acceptance of such appointment by the successor Trustee to each Holder.
SECTION 7.3 POWERS. The Trust will be managed solely by the Trustees,
who will, subject to the provisions of Article II hereof, have complete and
exclusive control over the management, conduct and operation of the Trust's
business, and shall have the rights, powers and authority of a board of
directors of a corporation organized under Delaware law. The Trustees shall
have
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fiduciary responsibility for the safekeeping and use of all funds and assets of
the Trust and shall not employ, or permit another to employ, such funds or
assets in any manner except for the exclusive benefit of the Trust and except in
accordance with the terms of this Trust Agreement. Subject to the continuing
supervision of the Trustees and as permitted by applicable law, the functions of
the Trust shall be performed by the Custodian, the Paying Agent, the
Administrator and such other entities engaged to perform such functions as the
Trustees may determine, including, without limitation, any or all administrative
functions.
SECTION 7.4 MEETINGS. Meetings of the Trustees shall be held from time
to time upon the call of any Trustee on not less than 48 hours notice (which may
be waived by any or all of the Trustees in writing either before or after such
meeting or by attendance at the meeting unless the Trustee attends the meeting
for the express purpose of objecting to the transaction of any business on the
ground that the meeting has not been lawfully called or convened). The Trustees
shall act either by majority vote of the Trustees present at a meeting at which
at least a majority of the Trustees then in office are present or by a unanimous
written consent of the Trustees without a meeting. Except as otherwise required
under the Investment Company Act, all or any of the Trustees may participate in
a meeting of the Trustees by means of a conference telephone call or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to such
communications equipment shall constitute presence in person at such meeting.
SECTION 7.5 RESIGNATION AND REMOVAL. Any Trustee may resign and be
discharged of the trust created by the Trust Agreement by executing an
instrument in writing resigning as Trustee, filing the same with the
Administrator and sending notice thereof to the remaining Trustees, and such
resignation shall become effective immediately unless otherwise specified
therein. Any Trustee may be removed in the event of incapacity by vote of the
remaining Trustees and for any reason by written declaration or vote of the
Holders of more than 66 2/3% of the outstanding STRYPES, notice of which vote
shall be given to the remaining Trustees and the Administrator. The
resignation, removal or failure to reelect any Trustee shall not cause the
termination of the Trust.
SECTION 7.6 LIABILITY. The Trustees shall not be liable to the Trust or
any Holder for any action taken or for refraining from taking any action except
in the case of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties of their office. Specifically, without limitation, the
Trustees shall not be responsible for or in respect of the recitals herein or
the validity or sufficiency of this Trust Agreement or for the due execution
hereof by any other Person, or for or in respect of the validity or sufficiency
of STRYPES or Certificates representing STRYPES and shall in no event assume or
incur any liability, duty or obligation to any Holder or to any other Person,
other than as expressly provided for herein. The Trustees may employ agents,
attorneys, administrators, accountants and auditors, and shall not be answerable
for the default or misconduct of any such Persons if such Persons shall have
been selected with reasonable care. Action in good faith may include action
taken in good faith in accordance with an opinion of counsel. In no event
18
shall any Trustee be personally liable for any expenses with respect to the
Trust. Each Trustee shall be indemnified by the Trust with respect to any
claim, liability or loss arising out of or in connection with such Trustee's
acting as Trustee of the Trust and with respect to all reasonable costs and
expenses (including the reasonable costs of investigation, preparation for and
defense of legal and/or administrative proceedings relating to a claim against
such Trustee and reasonable attorneys' fees and disbursements) incurred in
connection with any such claim, liability or loss, except in the case of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties of
his office. Notwithstanding the foregoing, it is understood that the Trust
shall not, in respect of the legal expenses of any Trustee in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
the fees and expenses of more than one separate firm (in addition to any local
counsel).
SECTION 7.7 COMPENSATION. Each Trustee, other than a Trustee who is a
director, officer or employee of the Sponsors, any Underwriter, or the
Administrator or any affiliate thereof, shall receive a one-time, up-front fee
of $10,800, in respect of its annual fee and anticipated out-of-pocket expenses.
In addition, the Managing Trustee shall receive an additional one-time, up-front
fee of $3,600 for serving in such capacity. The Trustees will not receive any
pension or retirement benefits. In the event of the resignation or removal of a
Trustee, such Trustee shall remit to the Trust the portion of its fee ratable
for the period from the day of such resignation or removal through the Exchange
Date.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 MEETINGS OF HOLDERS. The Trustees shall not hold annual
or regular meetings of Holders except as set forth herein. A special meeting
may be called at any time by the Trustees or upon petition of Holders of not
less than 51% of the STRYPES outstanding (unless substantially the same
matter was voted on during the preceding 12 months), and shall be called as
required by the Investment Company Act and the rules and regulations
thereunder, including, without limitation, when requested by the Holders of
not less than 10% of the STRYPES outstanding for the purposes of voting upon
the question of the removal of any Trustee or Trustees. The Trustees shall
establish, and notify the Holders in writing of, the record date for each
such meeting which shall be not less than 10 nor more than 50 days before the
meeting date. Holders at the close of business on the record date will be
entitled to vote at the meeting. The Administrator shall, as soon as possible
after any such record date (or prior to such record date if appropriate),
mail by first class mail to each Holder a notice of meeting and a proxy
statement and form of proxy in the form approved by the Trustees and
complying with the Investment Company Act and the rules and regulations
thereunder. Except as otherwise specified herein, in the Prospectus
(including, without limitation, changes to the Trust's fundamental policies
set forth in the Prospectus) or in any provision of the Investment Company
Act and the rules and regulations thereunder, any action may be taken by vote
of Holders of a majority of the STRYPES outstanding present in person or by
proxy if Holders of a majority of STRYPES outstanding on the record date are
so represented. Each STRYPES shall have one vote and may be voted in person
or by duly executed proxy. Any proxy may be revoked by notice in writing, by
a
19
subsequently dated proxy or by voting in person at the meeting, and no proxy
shall be valid after eleven months following the date of its execution.
SECTION 8.2 BOOKS AND RECORDS; REPORTS. (a) The Trustees shall keep a
certified copy or duplicate original of this Trust Agreement on file at the
office of the Trust and the office of the Administrator available for inspection
at all reasonable times during its usual business hours by any Holder. The
Trustees shall keep proper books of record and account for all the transactions
under this Trust Agreement at the office of the Trust and the office of the
Administrator, and such books and records shall be open to inspection by any
Holder at all reasonable times during usual business hours. The Trustees shall
retain all books and records in compliance with Section 31 of the Investment
Company Act and the rules and regulations thereunder.
(b) With each payment to Holders the Paying Agent shall set forth, either
in the instruments by means of which payment is made or in a separate statement,
the amount being paid from the Trust Account expressed as a dollar amount per
STRYPES and the other information required under Section 19 of the Investment
Company Act and the rules and regulations thereunder. The Trustees shall
prepare and file or distribute reports as required by Section 30 of the
Investment Company Act and the rules and regulations thereunder. The Trustees
shall prepare and file such reports as may from time to time be required to be
filed or distributed to Holders under any applicable state or Federal statute or
rule or regulation thereunder, and shall file such tax returns as may from time
to time be required under any applicable state or Federal statute or rule or
regulation thereunder. One of the Trustees shall be designated by resolution of
the Trustees to make the filings and give the notices required by Rule 17g-1
under the Investment Company Act.
(c) In calculating the net asset value of the Trust as required by the
Investment Company Act, (i) the U.S. Treasury Securities will be valued at the
mean between the last current bid and asked prices or, if quotations are not
available, as determined in good faith by the Trustees, (ii) short-term
investments having a maturity of 60 days or less will be valued at cost with
accrued interest or discount earned included in interest receivable and (iii)
the Contract will be valued at the mean of the bid prices received by the
Administrator from at least three independent broker-dealer firms unaffiliated
with the Trust to be named by the Trustees who are in the business of making
bids on financial instruments similar to the Contract and with terms comparable
thereto.
SECTION 8.3 DISSOLUTION. (a) The Trust created hereby shall dissolve,
and its affairs be wound up, upon the earliest of (i) the date 90 days after the
execution of this Trust Agreement if (x) the STRYPES have not theretofore been
issued or (y) the net worth of the Trust is not at least $100,000 at such time,
(ii) the date five Business Days after the Closing Date, and (iii) the date
which is 21 years less 91 days after the death of the last survivor of all of
the descendants of Xxxxxx X. Xxxxxxx living on the date hereof. The Trust is
irrevocable, the Sponsors have no right to withdraw any assets constituting a
portion of the Trust Estate, and the dissolution of the Sponsors shall not
operate to dissolve the Trust. The death or incapacity of any Holder shall not
operate to terminate this Trust Agreement, nor entitle his legal representatives
or heirs to claim an accounting or to take any action or
20
proceeding in any court for a partition or winding up of the Trust, and shall
not otherwise affect the rights, obligations and liabilities of the parties
hereto.
(b) Written notice of any dissolution shall be sent to Holders specifying
the record date for any distribution to Holders, the amount distributable
(including, if applicable, the number or amount of each type of Reference
Security and other property constituting part of the Reference Property) with
respect to each STRYPES and the time of dissolution as determined by the
Trustees, upon which the books maintained by the Paying Agent pursuant to
Section 5.2 hereof shall be closed. Any such notice shall be provided by mail,
sent to each Holder at such Xxxxxx's address as it appears on the books of the
Paying Agent, first class, postage prepaid not less than __ days prior to the
date on which such distribution is to be made. At or prior to the mailing of
such notice, the Administrator shall publish a public announcement in THE WALL
STREET JOURNAL or another daily newspaper of national circulation.
(c) Subject to any applicable provisions of law, for purposes of
dissolution under Sections 8.3(a)(ii), and (iii) hereof, within five Business
Days after such dissolution, the Trustees shall effect the sale of any
remaining property of the Trust (other than any Reference Property received
pursuant to the Contract and cash), and the Paying Agent shall distribute pro
rata as soon as practicable thereafter to each Holder, upon surrender for
cancellation of its Certificates, its interest in the Trust Estate. Together
with the distribution to the Holders, the Trustees shall furnish the Holders
with a final statement as of the date of the distribution of the amount
distributable with respect to each STRYPES.
(d) Notwithstanding anything to the contrary contained herein, no
fractional units of any Reference Security, or fractional interests of any
Reference Property other than cash or a Reference Security, will be distributed
to Holders pursuant to Section 8.3(c) hereof upon dissolution of the Trust. All
fractional units or interests to which Holders would otherwise be entitled upon
dissolution of the Trust will be aggregated and liquidated by the Trustees and,
in lieu of the fractional unit or interest to which a Holder would otherwise
have been entitled in respect of the total number of STRYPES held by such
Holder, such Holder will receive its PRO RATA portion of the proceeds from such
liquidation (net of any brokerage or related expenses).
SECTION 8.4 AMENDMENT AND WAIVER. (a) This Trust Agreement may be
amended from time to time by the Trustees for any purpose prior to the issuance
and sale to the Underwriters of the STRYPES and thereafter without the consent
of any of the Holders (i) to cure any ambiguity or to correct or supplement any
provision contained herein or therein which may be defective or inconsistent
with any other provision contained herein or therein; (ii) to change any
provision hereof or thereof as may be required by applicable law or the
Commission or any successor governmental agency exercising similar authority; or
(iii) to make such other provisions in regard to matters or questions arising
hereunder or thereunder as shall not materially adversely affect the interests
of the Holders (as determined in good faith by the Trustees, who may rely on an
opinion of counsel).
(b) This Trust Agreement may also be amended from time to time by the
Trustees (or the performance of any of the provisions of the Trust Agreement may
be waived) with
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the consent by the required vote of the Holders in accordance with Section 8.1
hereof; provided that this Trust Agreement may not be amended (i) without the
consent by vote of the Holders of all STRYPES then outstanding, so as to
increase the number of STRYPES issuable hereunder above the number of STRYPES
specified in Section 2.5(c) hereof or such lesser number as may be outstanding
at any time during the term of this Trust Agreement, (ii) to reduce the interest
in the Trust represented by STRYPES without the consent of the Holders of such
STRYPES, (iii) if such amendment is prohibited by the Investment Company Act or
other applicable law or (iv) without the consent by vote of the Holders of all
STRYPES then outstanding, if such amendment would effect a change in Section
2.4 or 2.9 hereof in the voting requirements set forth in Section 8.1 hereof
or this Section 8.4.
(c) Any of the agreements referred to in Section 2.5(a) hereof may be
amended from time to time by the Trustees and the other parties thereto for
any purpose without the consent of any of the Holders.
(d) Promptly after the execution of any amendment, the Trustees shall
furnish written notification of the substance of such amendment to each Holder.
(e) Notwithstanding subsections (a) and (b) of this Section 8.4, no
amendment hereof shall permit the Trust, the Trustees, the Administrator, the
Paying Agent or the Custodian to take any action or direct or permit any Person
to take any action that (i) would vary the investment of Holders within the
meaning of Treasury Regulation Section 301.7701-4(c), or (ii) would or could
cause the Trust, or direct or permit any action to be taken that would or could
cause the Trust, not to be a "grantor trust" under the Code.
SECTION 8.5 ACCOUNTANTS (a) The Trustees shall, in accordance with
Section 30 of the Investment Company Act, file annually with the Commission such
information, documents and reports as investment companies having securities
registered on a national securities exchange are required to file annually
pursuant to Section 13(a) of the Exchange Act and the rules and regulations
issued thereunder. The Trustees shall transmit to the Holders, at least
semi-annually, the reports required by Section 30(d) of the Investment Company
Act and the rules and regulations thereunder, including, without limitation, a
balance sheet accompanied by a statement of the aggregate value of investments
on the date of such balance sheet, a list showing the amounts and values of such
investments owned on the date of such balance sheet, and a statement of income
for the period covered by the report. Financial statements contained in such
annual reports shall be accompanied by a certificate of independent public
accounts based upon an audit not less in scope or procedures than that which
independent public accountants would ordinarily make for the purpose of
complying with generally accepted auditing standards and shall contain such
information as the Commission may prescribe. Each such report shall state that
such independent public accountants have verified investments owned, either by
actual examination or by receipt of a certificate from the Custodian.
(b) The independent public accountants referred to in subsection (a) above
shall be selected at a meeting held within 30 days before or after the beginning
of the fiscal year by
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the vote, cast in person, of a majority of the Trustees who are not "interested
persons" as defined in the Investment Company Act and such selection shall be
submitted for ratification at the first meeting of Holders to be held as set
forth in Section 8.1 hereof, and thereafter as required by the Investment
Company Act and the rules and regulations thereunder. The employment of any
independent public accountant for the Trust shall be conditioned upon the right
of the Holders by a vote of the lesser of (i) 67% or more of the STRYPES present
at a special meeting of Holders, if Holders of more than 50% of STRYPES
outstanding are present or represented by proxy at such meeting or (ii) more
than 50% of the STRYPES outstanding to terminate such employment at any time
without penalty.
(c) The foregoing provisions of this Section 8.5 are in addition to any
applicable requirements of the Investment Company Act and the rules and
regulations thereunder.
SECTION 8.6 NATURE OF HOLDER'S INTEREST. Each Holder holds at any given
time a beneficial interest in the Trust Estate, but does not have any right to
take title or possession of any portion of the Trust Estate. Each Holder
expressly waives any right he may have under any rule of law, or the provisions
of any statute, or otherwise, to require the Trustees at any time to account, in
any manner other than as expressly provided in this Trust Agreement, for the
Reference Property, the Contract, the U.S. Treasury Securities or other assets
or moneys from time to time received, held and applied by the Trustees
hereunder. No Holder shall have any right except as provided herein to control
or determine the operation and management of the Trust or the obligations of the
parties hereto. Nothing set forth herein or in the Certificates representing
STRYPES shall be construed to constitute the Holders from time to time as
partners or members of an association.
SECTION 8.7 DELAWARE LAW TO GOVERN. This Trust Agreement is executed and
delivered in the State of Delaware, and all laws or rules of construction of the
State of Delaware, without regard to principles of conflict of laws, shall
govern the rights of the parties hereto and the Holders and the construction,
validity and effect of the provisions hereof.
SECTION 8.8 NOTICES Any notice, demand, direction or instruction to be
given to the Sponsors hereunder shall be in writing and shall be duly given if
mailed or delivered to ML IBK Positions, Inc. at World Financial Center, North
Tower, New York, New York 10281 and to Bear, Xxxxxxx & Co. Inc. at 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other address as shall be specified
by the Sponsors to the other parties hereto in writing. Any notice, demand,
direction or instruction to be given to the Trust and the Trustees hereunder
shall be in writing and shall be duly given if mailed or delivered to the Trust
c/o The Chase Manhattan Bank at 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000-0000, and to each Trustee at such Trustee's address set forth beneath
its signature below, or such other address as shall be specified to the other
parties hereto by such party in writing. Any notice to be given to a Holder
shall be duly given if mailed, first class postage prepaid, or by such other
substantially equivalent means as the Trustees may deem appropriate, or
delivered to such Holder at the address of such Holder appearing on the registry
of the Paying Agent.
23
SECTION 8.9 SEVERABILITY. If any one or more of the covenants,
agreements, provisions or terms of this Trust Agreement shall be for any reason
whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
and terms of this Trust Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Trust Agreement or of the
Certificates, or the rights of the Holders thereof.
SECTION 8.10 COUNTERPARTS This Trust Agreement may be executed in
several counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
SECTION 8.11 SUCCESSORS AND ASSIGNS. Whenever in this Trust Agreement
any of the parties hereto is named or referred to, the successors and assigns of
such party shall be deemed to be included, and all covenants and agreements in
this Trust Agreement by the Sponsors and Trustees shall bind and inure to the
benefit of their respective successors and assigns, whether or not so expressed.
24
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to
be duly executed.
ML IBK POSITIONS, INC.
By___________________________
Name:
Title:
BEAR, XXXXXXX & CO. INC.
By___________________________
Name:
Title:
TRUSTEES:
___________________________________
Name: Xxxxxx X. Xxxxxxx
Address: 000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
___________________________________
Name: Xxxxxxx X. Xxxxxx XXX
Address: 000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
___________________________________
Name: Xxxxx X. X'Xxxxx
Address: 000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
25
Schedule I
U.S. TREASURY SECURITIES
All terms specified are for stripped principal or interest components of
U.S. Treasury debt obligations.
Maturity Par Amount CUSIP No.
------------ ------------- ------------------------
26
EXHIBIT A
CONTIFINANCIAL STRYPES TRUST
NO. ____________________ STRYPES(SM) CUSIP NO. _______
THIS CERTIFIES THAT ________ IS THE RECORD OWNER OF _______ FULLY PAID AND
NON-ASSESSABLE STRYPES, PAR VALUE $.10 PER STRYPES, OF CONTIFINANCIAL STRYPES
TRUST CONSTITUTING FRACTIONAL UNDIVIDED BENEFICIAL INTERESTS IN CONTIFINANCIAL
STRYPES TRUST, A TRUST CREATED UNDER THE LAWS OF THE STATE OF DELAWARE PURSUANT
TO AN AMENDED AND RESTATED TRUST AGREEMENT (THE "TRUST AGREEMENT") BETWEEN ML
IBK POSITIONS, INC., BEAR, XXXXXXX & CO. INC. AND THE TRUSTEES NAMED XXXXXXX AND
THE HOLDERS (AS DEFINED THEREIN). THIS CERTIFICATE IS ISSUED UNDER AND IS
SUBJECT TO THE TERMS, PROVISIONS AND CONDITIONS OF THE TRUST AGREEMENT, AS THE
SAME MAY BE AMENDED FROM TIME TO TIME, TO WHICH THE HOLDER OF THIS CERTIFICATE
BY VIRTUE OF THE ACCEPTANCE HEREOF ASSENTS AND IS BOUND, A COPY OF WHICH TRUST
AGREEMENT IS AVAILABLE AT THE OFFICE OF THE TRUST'S PAYING AGENT, CHASEMELLON
SHAREHOLDER SERVICES, L.L.C., 000 XXXX 00XX XXXXXX, 00XX XXXXX, XXX XXXX, XXX
XXXX 00000-0000. THIS CERTIFICATE IS TRANSFERABLE AND INTERCHANGEABLE BY THE
REGISTERED OWNER IN PERSON OR BY HIS DULY AUTHORIZED ATTORNEY AT THE OFFICE OF
THE PAYING AGENT UPON SURRENDER OF THIS CERTIFICATE PROPERLY ENDORSED OR
ACCOMPANIED BY A WRITTEN INSTRUMENT OF TRANSFER AND ANY OTHER DOCUMENTS THAT THE
PAYING AGENT MAY REQUIRE FOR TRANSFER, IN FORM SATISFACTORY TO THE PAYING AGENT
AND PAYMENT OF THE FEES AND EXPENSES PROVIDED IN THE TRUST AGREEMENT.
THIS CERTIFICATE IS NOT VALID UNLESS MANUALLY COUNTERSIGNED BY THE PAYING
AGENT.
WITNESS THE FACSIMILE SIGNATURE OF THE MANAGING TRUSTEE.
DATED:
CONTIFINANCIAL STRYPES TRUST
By______________________________
Xxxxxx X. Xxxxxxx
Managing Trustee
COUNTERSIGNED:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
as Paying Agent
By ______________________________
Authorized Signature
______________________________
(SM) Service Mark of Xxxxxxx Xxxxx & Co., Inc.
A-1
THIS CERTIFICATE IS ISSUED UNDER AND IS SUBJECT TO THE TERMS, PROVISIONS AND
CONDITIONS OF THE AMENDED AND RESTATED TRUST AGREEMENT BETWEEN ML IBK POSITIONS,
INC., BEAR, XXXXXXX & CO. INC. AND THE TRUSTEES NAMED XXXXXXX AND THE HOLDERS
(AS DEFINED THEREIN) TO WHICH THE HOLDER OF THIS CERTIFICATE BY VIRTUE OF THE
ACCEPTANCE HEREOF ASSENTS AND IS BOUND.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM--as tenants in common UNIF GIFT MIN ACT--___Custodian___
TEN ENT--as tenants by the entireties (Cust) (Minor)
JT TEN-- as joint tenants with right under Uniform Gifts to
of survivorship and not as Minors Act _________
tenants in common (State)
Additional abbreviations also may be used though not in the above list.
For value received, _______________________ hereby sell, assign and transfer
unto
Please insert social securities or
other identifying number of assignee
--------------------------------
--------------------------------
(Please Print or Typewrite Name and Address, Including Zip Code, of Assignee)
_________ STRYPES of fractional undivided beneficial interest represented by
the within Certificate, and do hereby irrevocably constitute and appoint
_________ Attorney to transfer the said STRYPES on the books of the within-named
Trust with full power of substitution in the premises.
Dated: ______________________
_________________________________
NOTICE: The Signature to this assignment must correspond with the name as
written upon the face of the Certificate in every particular,
without alteration or enlargement or any change whatever.
Signature Guaranteed:_________________________________
The Signature(s) should be guaranteed by an eligible guarantor
institution (banks, stockbrokers, savings and loan associations
and credit unions with membership in an approved signature
guarantee medallion program), pursuant to S.E.C. Rule 17Ad-15.
