EXHIBIT 4.1
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Core Investment Grade Bond Trust
Trust Agreement
Among
Core Bond Products LLC,
as Depositor,
The Bank of New York,
as Trustee,
and
Banc of America Securities LLC,
as Administrative Agent
Dated as of o, 2002
Pass-Through Certificates, Series 2002-1
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS; CONSTRUCTION.....................................................................1
Section 1.01. Definitions............................................................................1
Section 1.02. Rules of Construction..................................................................8
Section 1.03. Article and Section References.........................................................8
ARTICLE II DECLARATION OF TRUST; ISSUANCE OF CERTIFICATES................................................9
Section 2.01. Creation and Declaration of Trust; Assignment of Underlying Notes......................9
Section 2.02. Entry into Purchase Agreement..........................................................9
Section 2.03. Acceptance by Trustee..................................................................9
Section 2.04. Agreement to Execute, Authenticate and Deliver Certificates............................9
ARTICLE III TRUST POWERS; ADMINISTRATION OF THE TRUST PROPERTY...........................................10
Section 3.01. Trust Property........................................................................10
Section 3.02. Administration of the Trust...........................................................10
Section 3.03. Collection of Certain Underlying Note Payments........................................11
Section 3.04. Sale..................................................................................11
Section 3.05. Certificate Account...................................................................11
Section 3.06. Investment of Funds in the Accounts...................................................12
Section 3.07. Access to Certain Documentation.......................................................12
Section 3.08. Removal of Underlying Notes Upon a Downgrade Event, Non-Filing Event or Default Event.12
Section 3.09. Sale Procedures Following a Downgrade Event, Non-Filing Event or Default Event........13
Section 3.10. Administrative Agent Provisions.......................................................14
ARTICLE IV DISTRIBUTIONS AND REPORTS TO CERTIFICATEHOLDERS..............................................16
Section 4.01. Distributions.........................................................................16
Section 4.02. Reports to Certificateholders.........................................................17
Section 4.03. Compliance with Tax Reporting and Withholding Requirements............................18
Section 4.04. Preservation of Information, Communications to Holders................................19
Section 4.05. Exchange Act Reports..................................................................19
ARTICLE V THE CERTIFICATES.............................................................................19
Section 5.01. The Certificates......................................................................19
Section 5.02. Execution, Authentication and Delivery................................................20
Section 5.03. Registration; Registration of Transfer and Exchange...................................20
Section 5.04. Mutilated, Destroyed, Lost and Stolen Certificates....................................21
Section 5.05. Distributions in Respect of Certificates..............................................22
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Section 5.06. Persons Deemed Owners.................................................................22
Section 5.07. Cancellation..........................................................................23
Section 5.08. Currency of Distributions in Respect of Certificates..................................23
Section 5.09. Appointment of Paying Agent...........................................................23
Section 5.10. Authenticating Agent..................................................................24
Section 5.11. Issuance Matters......................................................................25
ARTICLE VI THE DEPOSITOR................................................................................26
Section 6.01. Representations and Warranties of the Depositor.......................................26
Section 6.02. Breach of Representation or Warranty..................................................27
Section 6.03. Liability of the Depositor............................................................28
Section 6.04. Limitation on Liability of the Depositor..............................................28
Section 6.05. Depositor May Purchase Certificates...................................................28
Section 6.06. Preparation and Filing of Exchange Act Reports; Obligations of the Depositor..........28
Section 6.07. Preferential Collection of Claims Against Depositor...................................29
ARTICLE VII RIGHTS OF CERTIFICATEHOLDERS.................................................................29
Section 7.01. Voting Rights with Respect to Underlying Notes........................................29
Section 7.02. Direction of Remedies.................................................................30
Section 7.03. Meetings of Certificateholders........................................................30
Section 7.04. Assignment............................................................................30
ARTICLE VIII CONCERNING THE TRUSTEE.......................................................................31
Section 8.01. Duties of Trustee.....................................................................31
Section 8.02. Certain Matters Affecting the Trustee.................................................32
Section 8.03. Limitation on Liability of Trustee....................................................33
Section 8.04. Trustee May Own Certificates..........................................................33
Section 8.05. Trustee Fees and Expenses; Limited Indemnification....................................33
Section 8.06. Eligibility Requirements for Trustee..................................................34
Section 8.07. Resignation or Removal of the Trustee.................................................34
Section 8.08. Successor Trustee.....................................................................35
Section 8.09. Merger or Consolidation of Trustee....................................................36
Section 8.10. Appointment of Co-Trustee.............................................................36
Section 8.11. Presentment and Surrender at Corporate Trust Office...................................37
Section 8.12. Representations and Warranties of Trustee.............................................37
Section 8.13. Limitation of Powers and Duties.......................................................38
ARTICLE IX TERMINATION..................................................................................38
Section 9.01. Termination of the Trust..............................................................38
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ARTICLE X MISCELLANEOUS TERMS..........................................................................39
Section 10.01. Amendment of this Agreement...........................................................39
Section 10.02. Counterparts..........................................................................40
Section 10.03. Limitation on Rights of Certificateholders............................................40
Section 10.04. Governing Law.........................................................................40
Section 10.05. Notices...............................................................................40
Section 10.06. Severability of Terms.................................................................41
Section 10.07. Notice to Rating Agencies.............................................................41
Section 10.08. No Recourse...........................................................................41
Section 10.09. Conflict With Trust Indenture Act.....................................................41
Section 10.10. Intention of Parties..................................................................42
SCHEDULE I........ Underlying N ote Schedule
EXHIBIT A Form of Certificate
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TRUST AGREEMENT
This Trust Agreement, dated as of [ ], 2002, is by and among
The Bank of New York, a New York corporation, as Trustee, Core Bond Products
LLC, a Delaware limited liability company, as Depositor, and Banc of America
Securities LLC, as Administrative Agent, relates to the issuance of
Pass-Through Certificates, Series 2002-1 (the "Certificates") of Core
Investment Grade Bond Trust (the "Trust").
PRELIMINARY STATEMENT
The Depositor and the Trustee have duly authorized the execution and
delivery of this Agreement to provide for the issuance of the Certificates.
All representations, covenants and agreements made herein by each of
the Depositor and the Trustee are for the benefit and security of the
Certificateholders.
The Depositor is entering into this Agreement, and the Trustee is
accepting the trust created hereby, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged.
ARTICLE I
DEFINITIONS; CONSTRUCTION
Section 1.01. Definitions. Except as otherwise specified herein or as
the context may otherwise require, the following terms have the respective
meanings set forth below for all purposes of this Agreement:
"Account": As defined in Section 3.06.
"Administrative Agent": An entity acting on behalf of the
Certificateholders for the purposes specified in Sections 3.08 and 3.09, which
initially shall be Banc of America Securities LLC.
"Affiliate": With respect to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this
definition, "control", when used with respect to any specified Person, means
the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Authenticating Agent": As defined in Section 5.10.
"Available Funds": With respect to any Regular Distribution Date, (i)
all amounts received by the Trustee on or with respect to the Underlying Notes
or other Trust Property from but excluding the previous Regular Distribution
Date to and including such Regular Distribution Date, plus (ii) all investment
income from Eligible Investments, in each case on deposit in the
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Certificate Account, and available for distribution, on such Regular
Distribution Date, minus any amounts so received by the Trustee and previously
distributed on a Special Distribution Date.
"Book-Entry Certificate": A Certificate represented by a Global
Certificate.
"Business Day": Any day, other than a Saturday, Sunday or other day
on which commercial banks are obligated or authorized by law, executive order
or regulation to be closed in The City of New York.
"Certificate" or "Certificates": Any of the certificates, defined as
Certificates in the preamble hereto, that are executed, authenticated and
delivered under this Agreement, and includes Global Certificates and
Certificated Certificates.
"Certificate Account": As defined in Section 3.05.
"Certificate Principal Balance": With respect to a Certificate that
is Outstanding, as determined at any time, the maximum amount that the Holder
thereof is entitled to receive as distributions allocable to payments of
principal of the Underlying Notes (without taking into account any premiums
payable on the optional redemption of the Underlying Notes).
"Certificate Register" and "Certificate Registrar": As respectively
defined in Section 5.03.
"Certificated Certificate": Any Certificate in definitive, physical
form registered in the name of a Person other than the Depositary or its
nominee.
"Certificateholder" and "Holder": The Person in whose name a
Certificate is registered in the Certificate Register as of any relevant date.
"Closing Date": The date on which the Certificates are originally
executed, authenticated and delivered under this Agreement.
"Code": The Internal Revenue Code of 1986, as amended, and Treasury
Regulations promulgated thereunder.
"Commission": The Securities and Exchange Commission, or any
successor agency.
"Corporate Trust Office": The Trustee's offices at 0 Xxxx Xxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other addresses as the Trustee may
designate from time to time by written notice to the Holders and the
Depositor.
"Currency": Dollars.
"DTC": The Depository Trust Company, a limited purpose trust company
organized under the laws of the State of New York, and any of its successors
or assigns.
"Default Event": As defined in Section 3.08(a).
"Depositary": DTC initially, or such other depositary appointed by
the Depositor.
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"Depositor": Core Bond Products LLC, a Delaware limited liability
company, and any of its successors or assigns.
"Depositor Order" or "Depositor Requests": A written order or
request, respectively, signed in the name of the Depositor by any of its
Executive Officers and delivered to the Trustee.
"Distribution Date": Each Regular Distribution Date and Special
Distribution Date.
"Dollar" or "$" or "USD": Such currency of the United States as at
the time of payment is legal tender for the payment of public and private
debts.
"Downgrade Event": As defined in Section 3.08(a).
"Eligible Account": A non-interest bearing account held in the name
of the Trustee in trust for the benefit of the Certificateholders that is
either (i) a segregated account or segregated accounts maintained with a
Federal or State chartered depository institution or trust company the
short-term and long-term unsecured debt obligations of which (or, in the case
of a depository institution or trust company that is the principal subsidiary
of a holding company, the short-term and long-term unsecured debt obligations
of such holding company) are rated P-1 and Aaa by Moody's, A-1+ and AAA by
S&P, and, if rated by Fitch, D-1+ and AAA by Fitch at the time any amounts are
held on deposit therein, including when such amounts are initially deposited
and all times subsequent or (ii) a segregated trust account or segregated
accounts maintained as a segregated account or as segregated accounts and held
by the Trustee in its Corporate Trust Office in trust for the benefit of the
Certificateholders.
"Eligible Investments": One or more of the following investments made
by the Trustee pursuant to Section 3.06:
(i) direct obligations of, and obligations fully guaranteed by, the
United States, the Federal Home Loan Mortgage Corporation, the
Federal National Mortgage Association, the Federal Farm Credit System
or any agency or instrumentality of the United States the obligations
of which are explicitly backed by the full faith and credit of the
United States of America; provided that obligations of, or guaranteed
by, the Federal Home Loan Mortgage Corporation, the Federal National
Mortgage Association or the Federal Farm Credit System shall be
Eligible Investments only if, at the time, and during the course, of
investment, it has at least the credit rating of P-1 or Aaa by
Moody's, A-1+ or AAA by S&P, and, if rated by Fitch, D-1+ or AAA by
Fitch;
(ii) demand and time deposits in, certificates of deposit of, or
banker' acceptances issued by any depository institution or trust
company (including the Trustee or any agent of the Trustee acting in
their respective commercial capacities) incorporated under the laws
of the United States or any State and subject to supervision and
examination by Federal and/or State banking authorities so long as
the commercial paper and/or the short-term debt obligations of such
depository institution or trust company at the time of, and during
the course of, such investment or contractual commitment providing
for such investment have at least the credit rating of P-1 or Aaa by
Moody's, A-1+ or AAA by S&P, and, if rated by Fitch, D-1+ or AAA by
Fitch (or, in the case of a depository institution which is the
principal subsidiary of a holding company, the commercial paper
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or other short-term debt obligations of such holding company have a
credit rating of P-i or Aaa by Moody's, A-1+ or AAA by S&P, and, if
rated by Fitch, D-1+ or AAA by Fitch;
(iii) commercial paper having a maturity of not more than 180 days
and having at the time, and during the course, of such investment at
least the credit rating of P-1 by Moody's, A-1+ by S&P, and, if rated
by Fitch, D-1+ by Fitch; and
(iv) repurchase agreements with respect to (a) any security described
in clause (i) above or (b) any other security issued or guaranteed by
an agency or instrumentality of the United States with an entity
having the credit rating of P-1 or Aaa by Moody's, A-1+ or AAA by
S&P, and, if rated by Fitch, D-1+ or AAA by Fitch (it being
understood that copies of any repurchase agreement entered into will
be delivered to the Rating Agencies, if any).
provided, however, that the total return specified by the terms of each such
obligation or security is at least equal to the purchase price thereof;
provided, further, that each such obligation or security must mature at least
one Business Day prior to the next required distribution to Certificateholders
of the funds used to invest in such obligation or security; provided, further,
that each such obligation or security shall be held in the name of the Trustee
in trust for the benefit of Certificateholders; and provided, further, that an
Eligible Investment shall not consist of (a) a swap agreement as defined in
the United States Bankruptcy Code, 11 U.S.C. S 101 et seq., (b) an
interest-only or principal-only security or (c) a liability of the Trust in
excess of the principal amount invested by the Trustee. Eligible Investments
shall include, without limitation, those investments described above for which
the Trustee or an Affiliate of the Trustee provides services.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act": The Securities Exchange Act of 1934, as amended.
"Executive Officer": With respect to any corporation or limited
liability company, the Chief Executive Officer, Chief Operating Officer, Chief
Financial Officer, President, any Vice President, the Treasurer or any
Assistant Treasurer, and the Secretary or any Assistant Secretary of such
corporation or limited liability company, as the case may be.
"Exempted Company": Companies not required to register the public
offering and sale of their securities under the Securities Act.
"Extraordinary Trust Expense": As defined in Section 8.05(b).
"Final Scheduled Distribution Date": o.
"Fitch": Fitch, Inc.
"Fractional Undivided Interest" means the fractional undivided
beneficial ownership interests in the assets of the Trust evidenced by an
Outstanding Certificate that is equal to the
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Certificate Principal Balance of such Certificate divided by the aggregate
Certificate Principal Balance of all Outstanding Certificates.
"Global Certificates": A Certificate in global form bearing the
legend specified in Section 5.11(c) that is deposited with the Trustee on
behalf of the Depositary and registered in the name of the Depositary or its
nominee.
"Initial Underlying Note Accrual Period": The period from and
including the Closing Date to but excluding the initial Underlying Note
Interest Payment Date.
"Investment Company Act": The Investment Company Act of 1940, as
amended.
"Maximum Reimbursable Amount": As specified in Section 8.05(b).
"Moody's": Xxxxx'x Investors Service, Inc.
"Non-Filing Event": As defined in Section 3.08(a).
"Officer's Certificate": A certificate signed by one or more
Executive Officers of the Depositor, as specified in this Agreement, and
delivered to the Trustee.
"Opinion of Counsel": A written opinion of counsel, who may, except
as otherwise expressly provided in this Agreement, be counsel for the
Depositor, reasonably acceptable to the Trustee.
"Outstanding": As of any date of determination, all Certificates
theretofore authenticated and delivered under this Agreement, except:
(i) Certificates theretofore canceled by the Certificate Registrar
or delivered to the Trustee for cancellation; and
(ii) Certificates in exchange for or in lieu of which other
Certificates have been authenticated and delivered pursuant to this
Agreement, unless proof satisfactory to the Trustee is presented that
any such Certificates are held by a bona fide purchaser in whose
hands such Certificates represent beneficial ownership interests in
the assets of the Trust; and
(iii) Certificates whose Certificate Principal Balance has been
reduced to zero in accordance with the terms of this Agreement.
"Paying Agent": As defined in Section 5.09.
"Person": Any individual, corporation, partnership, joint venture,
association, joint stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or political
subdivision thereof.
"Predecessor Certificate": With respect to any particular
Certificate, every previous Certificate evidencing all or a portion of the
same undivided beneficial ownership interests as
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those evidenced by such particular Certificate; and, for the purpose of this
definition, any Certificate authenticated and delivered under Section 5.04 in
lieu of a lost, destroyed or stolen Certificate shall be deemed to evidence
the same undivided beneficial ownership interests as the lost, destroyed or
stolen Certificate.
"Proceeding": Any suit in equity, action at law or other judicial or
administrative action or proceeding.
"Purchase Agreement": The agreement between the Underwriter and the
Depositor relating to the distribution of the Certificates.
"Rating Agencies": Xxxxx'x, S&P and Fitch.
"Rating Agencies Condition": Any action or occurrence affecting the
Certificates or the Underlying Notes which would not cause the Rating Agencies
to reduce or withdraw the then current rating of any Certificates.
"Record Date": With respect to a distribution of interest to
Certificateholders on a Regular Distribution Date other than the Final
Scheduled Distribution Date, the fifteenth calendar day (whether or not a
Business Day) immediately preceding such Distribution Date; and with respect
to a distribution on a Special Distribution Date other than a Special
Distribution Date resulting from the optional redemption of Underlying Notes,
the calendar day (whether or not a Business Day) immediately preceding the
date on which the Trustee received the related payment.
"Regular Distribution Date": Any date, other than a Special
Distribution Date, on which payments are received by the Trustee in respect of
the Underlying Notes or, if that date is not a Business Day, the next
succeeding Business Day.
"Removal Event": A Downgrade Event, a Non-Filing Event and/or a
Default Event.
"Responsible Officer": With respect to the Trustee or the
Administrative Agent, as the context requires, any Vice President, Assistant
Vice President, Secretary, Assistant Secretary or any other officer of the
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also, with respect to a particular matter,
any other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
"Securities Act": The Securities Act of 1933, as amended.
"Special Distribution Date": As defined in Section 4.01(b).
"State": Any one of the 00 xxxxxx xx xxx Xxxxxx Xxxxxx or the
District of Columbia.
"S&P": Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc.
"TIA": The Trust Indenture Act of 1939, as amended.
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"Transfer": To sell, convey, assign, transfer, create, grant a pledge
or other lien upon and a security interest in and right of setoff against,
deposit, set over, contribute and confirm to the Trustee pursuant to this
Agreement; and the terms "Transferred" and "Transferring" have the meanings
correlative to the foregoing. A Transfer of any Underlying Notes or of any
other instrument shall include all rights, powers and options (but none of the
obligations) of the Transferring party thereunder, including the first
priority and continuing right to claim for, collect, receive and give receipt
for principal, premium, if any, and interest payments in respect of such
Underlying Notes and all other moneys payable thereunder, to give and receive
notices and other communications, to make waivers or other agreements, to
exercise all rights and options, to bring Proceedings in the name of the
Transferring party or otherwise, and generally to do and receive anything that
the Transferring party is or may be entitled to do or receive thereunder or
with respect thereto.
"Trust": Core Investment Grade Bond Trust, the trust created by this
Agreement.
"Trust Expenses": As defined in Section 8.05(a).
"Trust Property": As defined in Section 3.01.
"Trustee": The Bank of New York, a New York corporation, or any
co-trustee appointed pursuant to Section 8.10, until a successor Person shall
have become the Trustee pursuant to the applicable terms of the Trust
Agreement, and thereafter "Trustee" shall mean such successor Person.
"Trustee Fees": As defined in Section 8.05(a).
"UCC": The Uniform Commercial Code as in effect in the relevant
jurisdiction or, with respect to the State of Louisiana, the equivalent body
of statutory and common law.
"Underlying Issuer": Each issuer of Underlying Notes.
"Underlying Notes": The Underlying Notes specified on Schedule I,
subject to removal from the assets of the Trust upon the occurrence of a
Removal Event or to the optional redemption of Underlying Notes by the related
Underlying Issuer.
"Underlying Note Accrual Period": The Initial Underlying Note Accrual
Period and each period from and including an Underlying Note Interest Payment
Date to but excluding the next succeeding Underlying Note Interest Payment
Date.
"Underlying Note Agreement": The indenture, fiscal agency agreement
or other agreement under or pursuant to which a particular Underlying Note is
issued by the related Underlying Issuer.
"Underlying Note Amount": With respect to each Underlying Note
Interest Payment Date, an amount equal to the accrued interest and/or other
payment obligation calculated with reference to the related Underlying Note
for the immediately preceding applicable Underlying Note Accrual Period at the
applicable Underlying Note Rate.
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"Underlying Note Interest Payment Date": As specified in Schedule I.
"Underlying Note Rate": As specified in Schedule I.
"Underwriter": Banc of America Securities LLC.
"United States": The United States of America (including the States),
its territories, its possessions and other areas subject to its jurisdiction.
"U.S. Person": A citizen or resident of the United States, a
corporation, partnership or other entity created or organized in or under the
laws of the United States or any political subdivision thereof, an estate the
income of which is subject to United States federal income taxation regardless
of its source or a trust if (i) a U.S. court is able to exercise primary
supervision over the trust's administration and (ii) one or more U.S. persons
have the authority to control all of the trust's substantial decisions.
Certain additional defined terms have the meanings assigned thereto
in other terms hereof.
Section 1.02. Rules of Construction. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles as in effect in the United States from time to time;
(iii) "or" is not exclusive;
(iv) the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision;
(v) "including" means including without limitation; and
(vi) words in the singular include the plural and words in the
plural include the singular.
Section 1.03. Article and Section References. All Article and Section
references used in this Agreement, unless otherwise provided, are to Articles
and sections in this Agreement. Any reference to "this Section" appearing
within a particular paragraph of a Section is a reference to such Section as a
whole.
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ARTICLE II
DECLARATION OF TRUST; ISSUANCE OF CERTIFICATES
Section 2.01. Creation and Declaration of Trust; Assignment of
Underlying Notes.
(a) The Depositor, concurrently with the execution and delivery of this
Agreement, Transfers to the Trustee, on behalf and for the benefit of the
Certificateholders and without recourse, all the right, title and interest of
the Depositor, including any security interest therein, in, to and under (i)
the Underlying Notes, (ii) the Certificate Account, including all income from
the investment of funds in the Certificate Account, (iii) all payments on or
under and all proceeds of any of the foregoing (including all proceeds of the
conversion thereof, voluntary or involuntary, into cash or other liquid
property, all cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, insurance proceeds,
condemnation awards, causes of action, rights to payment of any and every kind
and other forms of obligations, receivables, instruments and other property
which at any time constitute all or part of or are included in the proceeds of
any of the foregoing) and (iv) all other assets included or to be included in
the Trust Property.
(b) In connection with the Transfer referred to in Section 2.01(a),
the Depositor shall, on the Closing Date, either (i) deposit the Underlying
Notes with the Trustee by physical delivery of such Underlying Notes, duly
endorsed and accompanied by all necessary Transfer documents, to the Trustee
or (ii) cause the Underlying Notes represented by global securities to be
transferred to the Trustee on the books and records of the applicable
Depositary and its participants.
(c) The Depositor's Transfer of the Underlying Notes to the Trustee
accomplished by this Agreement is absolute and is intended by the parties
hereto as a sale as further provided in Section 3.04.
Section 2.02. Entry into Purchase Agreement. Prior to the execution
of this Agreement, the Depositor shall have entered into the Purchase
Agreement with the Underwriter.
Section 2.03. Acceptance by Trustee. The Trustee acknowledges its
receipt of the Underlying Notes and the related documents referred to in
Section 2.01 and declares that it will hold such assets and all other assets
comprising the Trust Property in trust for the exclusive benefit of all
present and future Certificateholders and for the purposes and subject to the
terms and conditions set forth in this Agreement, including the Trustee's
obligations to make distributions to the Certificateholders in accordance with
Section 4.01.
Section 2.04. Agreement to Execute, Authenticate and Deliver
Certificates. The Trustee agrees and acknowledges that it will, concurrently
with its receipt of the Underlying Notes and delivery to it by the Depositor
of this Agreement execute, cause to be executed, authenticate and deliver to
or upon the order of the Depositor, in exchange for the Underlying Notes and
such other assets constituting the Trust Property, Certificates duly executed
and authenticated by or on behalf of the Trustee in authorized denominations
evidencing beneficial ownership of the entire Trust Property, all in
accordance with the terms and conditions of this Agreement.
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ARTICLE III
TRUST POWERS; ADMINISTRATION OF THE TRUST PROPERTY
Section 3.01. Trust Property. The "Trust Property" will consist of
(i) the Underlying Notes and all payments on or collections in respect of such
Underlying Notes and (ii) all Eligible Investments and all funds from time to
time deposited in certain segregated accounts held by the Trustee in trust for
the benefit of the Certificateholders.
Section 3.02. Administration of the Trust. (a) Except as otherwise
specified herein, the Trustee shall administer the Trust Property for the
benefit of the Certificateholders. In administering the Trust Property, the
Trustee shall follow the collections procedures specified in the Underlying
Notes and shall perform all other duties set forth herein. The duties of the
Trustee shall be performed in accordance with applicable U.S. Federal, State
and local law.
(b) Subject to Article VIII, the Trustee is hereby authorized to
perform, and from time to time hereafter, shall perform only those acts which
are described in this Agreement as obligations of the Trustee. Notwithstanding
the generality of the foregoing, the Trustee is hereby specifically authorized
to do the following on behalf of the Trust: to accept delivery of the
Underlying Notes; to issue the Certificates; to establish and maintain the
Certificate Account hereunder; to pledge the Trust Property to secure the
obligations of the Trust; to make Eligible Investments pursuant to Section
3.06; and to make distributions pursuant to Article IV.
(c) Notwithstanding anything to the contrary herein, the Trustee
shall not permit the Trust to engage in any business or activities other than
receiving and holding the Underlying Notes or other Trust Property as provided
herein in trust for the benefit of Certificateholders, issuing the
Certificates, making Eligible Investments in accordance with Section 3.06 and
distributions pursuant to Article IV and performing its duties set forth
herein; provided, however, that the Trustee shall not permit the Trust to
engage in any business or activity which will cause it to be required to be
registered under the Investment Company Act or which would cause the Trust to
be taxed as an association or publicly traded partnership taxable as a
corporation or otherwise alter the classification of the Trust for U.S.
Federal income tax purposes.
(d) The Trustee shall not Transfer the Underlying Notes or other
Trust Property, or any interest of the Trust therein, to any Person or
Persons, except to a successor trustee as provided in Section 8.08 or as
otherwise expressly permitted hereunder. This Section 3.02(d) shall not be
construed to prohibit Transfers of the Certificates. In addition, the Trustee
shall not acquire any asset or make any investment except as contemplated
within the definition of Trust Property or as specified in Section 3.08 or
3.09.
(e) The Trustee shall be legally entitled to exercise all of the
rights, powers and privileges as a registered holder or beneficial owner of
the Underlying Notes, subject to the provisions of this Agreement. However,
neither the Trustee (except as specifically provided herein or in the TIA) nor
the Depositor shall be under any obligation whatsoever to appear in, prosecute
or defend any Proceeding in respect of Underlying Notes or Certificates.
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(f) The Trustee shall not take any action that is reasonably likely
to (i) impair the interests of the Trust in any Underlying Notes or any other
Trust Property, (ii) impair the value of any Underlying Notes or any other
Trust Property, (iii) require the Trust to be registered under the Investment
Company Act or (iv) cause the Trust to be taxed as a corporation or publicly
traded partnership taxable as a corporation or otherwise alter the
classification of the Trust for U.S. Federal income tax purposes, and the
Trustee shall not fail to take any action that is reasonably likely to avoid
any of the matters referred to in clause (i), (ii), (iii) or (iv) above.
Section 3.03. Collection of Certain Underlying Note Payments. The
Trustee shall use its best efforts to collect all payments required to be made
by each Underlying Issuer pursuant to the terms of its Underlying Notes in a
manner consistent with the terms of such Underlying Notes.
Section 3.04. Sale. The parties hereto agree and intend that the
Transfer of Underlying Notes to the Trust by the Depositor and all proceeds
thereof shall be treated as a sale and purchase by the Trust and not as a loan
or a pledge to secure a loan. If for any reason such Transfer is deemed to be
as a loan or a pledge to secure a loan, the parties intend that this Agreement
shall be a security agreement pursuant to which there shall be deemed to have
been granted to the Trustee a security interest in all right, title and
interest in and to the Underlying Notes and to the obligation to the Trustee
for Trust Expenses specified herein. If the Trust terminates prior to the
satisfaction of the claims of any Certificateholder under any Certificate, the
security interest created hereby shall continue in full force and effect and
the Trustee shall be deemed to be the collateral agent for the benefit of such
Certificateholder.
Section 3.05. Certificate Account. (a) The Trustee shall establish
and maintain one or more Eligible Accounts (collectively, the "Certificate
Account"), held in trust for the benefit of the Certificateholders, subject to
the obligation to the Trustee for the payment of Trust Expenses as specified
herein. The Trustee, on behalf of the Certificateholders, shall possess all
right, title and interest in and to all funds on deposit from time to time in
the Certificate Account and in all proceeds thereof, subject to the obligation
to the Trustee for the payment of Trust Expenses as specified herein. The
Certificate Account shall be under the sole dominion and control of the
Trustee. The Trustee shall deposit or cause to be deposited in the Certificate
Account all amounts collected with respect to the Underlying Notes, including:
(i) all payments received by the Trustee on account of
principal of the Underlying Notes;
(ii) all payments received by the Trustee on account of premium
(if any) on the Underlying Notes;
(iii) all payments received by the Trustee on account of
interest on the Underlying Notes;
(iv) all proceeds received by the Trustee from the sale of
Underlying Notes following the occurrence of a Removal Event,
subject to the provisions of Sections 3.08 and 3.09; and
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(v) payments in the nature of penalties, late payment charges
or assumption fees received by the Trustee in respect of any
Underlying Notes.
If, at any time, a formerly Eligible Account no longer fulfills the
definition of Eligible Account, the Trustee shall, within five Business Days
(or such longer period, not to exceed 30 calendar days, as to which the Rating
Agency Condition is met), establish a new Certificate Account meeting the
conditions specified above and the Trustee shall, within five Business Days,
transfer any cash and any investments on deposit in the Certificate Account to
such new Certificate Account, and from the date such new Certificate Account
is established it shall be the Certificate Account.
(b) The Trustee shall give notice to the Depositor of the location of
each Eligible Account constituting the Certificate Account prior to any change
thereof.
Section 3.06. Investment of Funds in the Accounts. The Depositor, on
behalf of the Trust, may direct in writing the Trustee or any depositary
institution maintaining the Certificate Account, if any, and any other
segregated account the contents of which are held for the benefit of the Trust
(each, an "Account") to invest the funds therein in one or more Eligible
Investments bearing interest or sold at a discount, which shall be held to
maturity unless payable on demand. If the Depositor does not provide any
investment directions to the Trustee, then the Trustee shall invest funds held
in any Account in the Eligible Investments specified in clause (i) of the
definition thereof after receipt of such funds.
Section 3.07. Access to Certain Documentation. The Trustee shall
provide to any U.S. Federal, State or local regulatory authority that may
exercise authority over the Depositor or any Certificateholder access to the
documentation regarding the Underlying Notes required by applicable laws and
regulations. Such access shall be afforded without charge, but only upon
reasonable request and during normal business hours at the offices of the
Trustee designated by it. In addition, access to the documentation regarding
the Underlying Notes will be provided to the Depositor or any
Certificateholder upon request during normal business hours at the Corporate
Trust Office of the Trustee at the expense of the Person requesting such
access.
Section 3.08. Removal of Underlying Notes Upon a Downgrade Event,
Non-Filing Event or Default Event. (a) If (i) the rating of any Underlying
Note is downgraded below "BBB-" by S&P or "Baa3" by Xxxxx'x or is withdrawn by
either S&P or Xxxxx'x (each, a "Downgrade Event"), (ii) any Underlying Issuer
other than an Exempted Company discontinues filing periodic reports with the
Commission required under the Exchange Act and the obligations of such Issuer
are not correspondingly unconditionally guaranteed or assumed by an entity
that files periodic reports with the Commission required under the Exchange
Act (a "Non-Filing Event") or (iii) the Trustee receives written notice that
an "event of default" with respect to any Underlying Note has occurred (a
"Default Event"), then the Trustee, within two Business Days following the
date it receives actual knowledge of such Removal Event, will remove the
related Underlying Notes from the Trust Property and notify Certificateholders
in accordance with Section 4.02(b). Within five Business Days following the
removal of such Underlying Notes from the Trust Property, the Trustee, subject
to Section 3.08(b), will distribute such Underlying Notes to the
Certificateholders on a pro rata basis (based on their Fractional Undivided
Interests) and the Certificate Principal Balance of each Certificate will be
reduced by an amount equal to
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the pro rata share of the principal amount of the Underlying Notes so removed.
In such cases, (i) the Trustee will decrease the Certificate Principal Balance
of a Global Certificate to reflect such reduction or (ii) Holders of
Certificated Certificates will be required to deliver the same to the
Corporate Trust Office of the Trustee, whereupon the Trustee will execute,
authenticate and deliver to such Holders (without any service charge) new
Certificated Certificates of authorized denominations for the remaining
Certificate Principal Balance and will deliver a pro rata share of such
Underlying Notes or the sale proceeds specified in Sections 3.08(b) and (c)
and 3.09, as required, to such Holders.
(b) If, following a Removal Event, (i) it would be impracticable for
the Trustee to distribute the related Underlying Notes to the
Certificateholders or (ii) prior to any distribution of the related Underlying
Notes, an individual Certificateholder shall direct the Trustee in writing to
deliver its pro rata share of such Underlying Notes to the Administrative
Agent for sale, then the Trustee shall deliver the related Underlying Notes to
the Administrative Agent. The Administrative Agent shall, in the case
described in clause (i) above, use its reasonable efforts to sell the entire
principal amount of the related Underlying Notes and will deliver the gross
proceeds received in connection with that sale to the Trustee for distribution
to all of the Certificateholders on a pro rata basis (based on their
Fractional Undivided Interests) and, in the case described in clause (ii)
above, use its reasonable efforts to sell each such Holder's pro rata share of
the related Underlying Notes and deliver the net proceeds received in
connection with such sale to the Trustee for distribution to each applicable
Certificateholder. Any such sale and distribution of net proceeds will be made
in accordance with Section 3.09.
(c) If the Trustee cannot distribute the related Underlying Notes
that are to be distributed to Certificateholders as a result of the failure to
satisfy the minimum authorized denominations of such Underlying Notes, the
Trustee will deliver such Underlying Notes to the Administrative Agent for
sale on behalf of the related Certificateholders. Upon sale, the
Administrative Agent will promptly deliver the gross proceeds to the Trustee
for distribution to the applicable Certificateholders.
Section 3.09. Sale Procedures Following a Downgrade Event, Non-Filing
Event or Default Event. In connection with any sale of any Underlying Notes
required pursuant to Section 3.08, the Administrative Agent will, on behalf of
the Trustee, use its reasonable efforts to sell such Underlying Notes to the
highest of not less than three solicited bidders (which bidders may include
Banc of America Securities LLC and its Affiliates); provided, however, that
neither the Administrative Agent nor any of its Affiliates shall be obligated
to bid for such Underlying Notes; and provided, further, that at least three
bids must be received from independent financial institutions with invested
assets of at least $100 million that deal in assets of the same type as such
Underlying Notes. In the sole judgment of the Administrative Agent, bids may
be evaluated on the basis of bids for all or a portion of the Underlying Notes
to be sold or any other basis selected in good faith by the Administrative
Agent. The proceeds of such sale will be allocated in the following order of
priority: (i) to the Administrative Agent for its fee relating to its services
for the sale of Underlying Notes pursuant to Section 3.08(b)(ii) equal to the
product of the (1) the aggregate principal amount of the Underlying Notes so
sold and (2) 0.05% and (ii) to the Certificateholders in the manner specified
in Section 3.08.
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Section 3.10. Administrative Agent Provisions. (a) The Administrative
Agent undertakes to perform such duties and only such duties that are
applicable to it as specifically set forth in this Agreement, and no implied
covenants or obligations shall be read into this Agreement against the
Administrative Agent. Any permissive right of the Administrative Agent
enumerated in this Agreement shall not be construed as a duty.
(b) Neither the Administrative Agent nor any of its directors,
officers, employees or agents shall be liable, for any losses, costs or
damages or otherwise, to the Trustee or the Certificateholders under any
circumstances for any act or omission except for its willful misconduct, bad
faith or gross negligence in the performance of duties specifically set forth
in this Agreement; it being understood that:
(i) the duties and obligations of the Administrative Agent
shall be determined solely by the express terms of this Agreement
and, in the absence of gross negligence, bad faith or willful
misconduct on the part of the Administrative Agent, the
Administrative Agent may conclusively rely upon any certificates or
opinions furnished to the Administrative Agent as to the truth and
correctness of any statements contained therein;
(ii) the Administrative Agent shall not be personally liable
for an error of judgment made in good faith by a Responsible Officer
or Responsible Officers of the Administrative Agent, unless it shall
be proved that the Administrative Agent was grossly negligent in
ascertaining the pertinent facts; and
(iii) except with respect to actions or duties required to be
taken or performed, as applicable, by the Administrative Agent under
the express terms of this Agreement, the Administrative Agent shall
not be required to expend or risk its own funds or otherwise incur
financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers under this Agreement.
(c) Except as otherwise provided in Section 3.10(b):
(i) the Administrative Agent may request and rely upon and
shall be protected in acting or refraining from acting upon any
resolution, Officers' Certificate, certificate of auditors or any
other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document
reasonably believed by it to be genuine and to have been signed by
the proper party or parties;
(ii) the Administrative Agent may consult with counsel and any
advice or Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or
suffered or omitted by it under this Agreement in good faith and in
accordance with such advice or Opinion of Counsel;
(iii) the Administrative Agent shall be under no obligation to
institute, conduct or defend any Proceeding hereunder or in relation
thereto, at the request, order or direction of any of the
Certificateholders or otherwise;
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(iv) the Administrative Agent shall not be personally liable
for any action taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or rights
or powers conferred upon it by this Agreement;
(v) the Administrative Agent shall not be bound to make any
investigation into the facts of matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, approval, bond or other paper or
document believed by it to be genuine;
(vi) the Administrative Agent may execute any of the powers or
perform any duties under this Agreement either directly or by or
through Affiliates; and
(vii) the Administrative Agent shall not be deemed to have
notice or actual knowledge of any matter unless written notice
thereof is received by the Administrative Agent at its office at
_____________________.
(d) The Administrative Agent may at any time resign and be discharged
from its obligations and duties hereunder by giving written notice thereof to
the Depositor. Upon receiving such notice of resignation, the Depositor shall
as promptly as possible (and in any event within 45 calendar days after the
date of such notice of resignation) appoint a successor Administrative Agent
by written instrument, in duplicate, which instrument shall be delivered to
the resigning Administrative Agent and to the successor Administrative Agent.
A copy of such instrument shall be delivered to the Certificateholders by the
Depositor. If no such successor Administrative Agent shall have been so
appointed and have accepted appointment within 45 calendar days after the
giving of such notice of resignation, the resigning Administrative Agent may
petition any court of competent jurisdiction for the appointment of a
successor Administrative Agent.
(e) The Depositor may remove the Administrative Agent at any time;
provided that the Depositor, in connection with any such removal, appoints a
successor Administrative Agent by written instrument, in duplicate, which
instrument shall be delivered to the Administrative Agent so removed and to
the successor Administrative Agent. A copy of such instrument shall be
delivered to the Certificateholders by the Depositor.
(f) Any resignation or removal of the Administrative Agent and
appointment of a successor Administrative Agent pursuant to any of the terms
of this Section 3.10(d) or (e) shall not become effective until acceptance of
appointment by the successor Administrative Agent as provided in Section
3.10(g).
(g) Any successor Administrative Agent appointed as provided in
Section 3.10(d) or (e) shall execute, acknowledge and deliver to the Depositor
and its predecessor Administrative Agent an instrument accepting such
appointment under this Agreement, and thereupon the resignation or removal of
the predecessor Administrative Agent shall become effective and such successor
Administrative Agent, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of the
predecessor Administrative Agent under this Agreement, with the like effect as
if originally named as Administrative Agent in this Agreement. The predecessor
Administrative Agent shall deliver to the successor Administrative
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Agent all documents and statements held by it under this Agreement, and the
Depositor and the predecessor Administrative Agent shall execute and deliver
such instruments and do such other things as may reasonably be required for
more fully and certainly vesting and confirming in the successor
Administrative Agent all such rights, powers, duties and obligations. Upon
acceptance of appointment by a successor Administrative Agent as provided in
this clause (g), the Depositor shall transmit notice of the succession of such
Administrative Agent under this Agreement to all Certificateholders.
(h) Any corporation or association into which the Administrative
Agent may be merged or converted or with which it may be consolidated, or any
corporation or association resulting from any merger, conversion or
consolidation to which the Administrative Agent shall be a party, or any
corporation or association succeeding to the business of the Administrative
Agent, shall be the successor of the Administrative Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties to this Agreement, anything in this Agreement to the
contrary notwithstanding.
ARTICLE IV
DISTRIBUTIONS AND REPORTS TO CERTIFICATEHOLDERS
Section 4.01. Distributions. (a) On each Regular Distribution Date
for the Certificates, the Trustee shall distribute the Available Funds in the
Certificate Account to (i) Certificateholders on the Record Date for a Regular
Distribution Date other than the Final Scheduled Distribution Date or (ii)
Certificateholders against presentation and surrender of their Certificates on
the Final Scheduled Distribution Date, in the following order of priority:
(i) the Trustee will distribute the interest portion of
Available Funds:
(1) first, to the Trustee, as payment of any Trust Expenses in
accordance with Section 8.05(a); and
(2) second, to the Certificateholders on a pro rata basis
(based on their Fractional Undivided Interests); and
(ii) the Trustee will distribute the principal portion of
Available Funds to the Certificateholders on a pro rata basis (based
on their Fractional Undivided Interests).
On the Final Scheduled Distribution Date, the Certificate Principal
Balance of each Certificate will be reduced on a pro rata basis (based on its
Fractional Undivided Interest) with respect to payment of the principal amount
of the Underlying Notes that are maturing. In such cases, (i) the Trustee will
decrease the Certificate Principal Balance of a Global Certificate to reflect
the maturing Underlying Notes or (ii) Holders of Certificated Certificates
will be required to deliver the same to the Corporate Trust Office of the
Trustee, whereupon the Trustee will execute, authenticate and deliver to such
Holders (without any service charge) new Certificated Certificates of
authorized denominations for any remaining Certificate Principal Balance and
will also deliver the principal and any premium and interest so received on
the maturing Underlying Notes.
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(b) If the Trustee receives a payment of principal of or premium or
interest on an Underlying Note (i) after the due date for such payment as
specified in such Underlying Note or (ii) upon the optional redemption of such
Underlying Note, in whole or in part, by the related Underlying Issuer prior
to the stated maturity of such Underlying Note, then the Trustee will
distribute the amounts so received on the next succeeding Business Day (each,
a "Special Distribution Date") to (i) Certificateholders on the Record Date
for a Special Distribution Date resulting from the circumstances specified in
clause (i) above or (ii) Certificateholders against presentation and surrender
of their Certificates on a Special Distribution Date resulting from the
circumstances specified in clause (ii) above, in the manner specified in
Sections 4.01(a)(i)(2) and 4.01(a)(ii). In the case described in clause (ii)
above, the Certificate Principal Balance of each Certificate will be reduced
on a pro rata basis (based on its Fractional Undivided Interest) with respect
to the principal amount of each Underlying Note redeemed by the related
Underlying Issuer prior to its stated maturity. In such cases, (i) the Trustee
will decrease the Certificate Principal Balance of a Global Certificate to
reflect such redemption or (ii) Holders of Certificated Certificates will be
required to deliver the same to the Corporate Trust Office of the Trustee,
whereupon the Trustee will execute, authenticate and deliver to such Holders
(without any service charge) new Certificated Certificates of authorized
denominations for the remaining Certificate Principal Balance and will also
deliver to such Holders the principal and any premium and interest so received
on the Underlying Notes so redeemed.
Section 4.02. Reports to Certificateholders. (a) On the Business Day
next succeeding each Distribution Date, the Trustee shall forward or cause to
be forwarded to the Depositor and each Certificateholder a statement setting
forth:
(i) the amount of distributions to Certificateholders
allocable to principal or interest portion of Available Funds;
(ii) the aggregate Certificate Principal Balance at the
close of business on such Distribution Date;
(iii) the amount received by the Trustee on the related
Underlying Notes for the applicable Underlying Note Accrual
Period; and
(iv) the aggregate principal amount of the Underlying
Notes as of such Distribution Date and the weighted average
interest rate per annum applicable to the Underlying Notes for
the next succeeding Underlying Note Accrual Period.
In the case of information furnished pursuant to clause (i) above,
any amount shall be expressed as a Dollar amount per minimum denomination of
Certificates or for such other specified portion thereof. Within a reasonable
period of time after the end of each calendar year, the Trustee shall furnish
to each Person who at any time during each such calendar year was a
Certificateholder a statement containing the information set forth in clause
(i) above, aggregated for such calendar year or the applicable portion thereof
during which such Person was a Certificateholder, which statement shall
contain sufficient information to allow Certificateholders to calculate their
U.S. Federal income tax liability with respect to the Certificates. Such
obligation of the Trustee shall be deemed to have been satisfied to the extent
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that substantially comparable information shall have been provided by the
Trustee pursuant to any requirements of the Code as are from time to time in
effect.
(b) If there is a Removal Event with respect to any Underlying Note
or Underlying Issuer and such Removal Event is actually known to the Trustee,
the Trustee shall promptly give notice to the Certificateholders thereof as
promptly as practicable in the manner and to the extent provided in TIA
Section 313(c). Such notice will set forth (i) the identity of the Underlying
Issuer of the relevant Underlying Notes, (ii) the date and nature of such
Removal Event, including whether such Removal Event relates to the failure of
such Underlying Issuer to pay the principal of or premium, if any, or interest
on such Underlying Notes, (iii) the aggregate principal amount of such
Underlying Notes and the aggregate principal amount and weighted average
interest rate per annum applicable to the remaining Underlying Notes, (iv) the
Certificate Principal Balance of each Certificate after the removal of such
Underlying Notes from the Trust Property, (v) the requirement that Holders of
Certificated Certificates must deliver the same to the Trustee at its
Corporate Trust Office to reflect a reduced Certificate Principal Balance in
exchange for such Underlying Notes or the proceeds therefrom in accordance
with Sections 3.08 and 3.09 and (vi) the current rating of the Certificates by
each applicable Rating Agency after taking such Removal Event into account.
(c) The Trustee will promptly deliver to the Certificateholders
copies of all notices and communications it receives from each Underlying
Issuer, including notice of the optional redemption of any Underlying Notes by
the related Underlying Issuer.
(d) There shall be delivered to the Depositor on or before each
[MONTH/DAY] an annual statement signed by two Responsible Officers of the
Trustee to the effect that the Trustee has fulfilled its obligations under
this Agreement throughout the preceding calendar year with respect to the
Certificates. Copies of such annual statement may be obtained by
Certificateholders without charge upon written request to the Trustee.
(e) If required by TIA Section 313(a), within 60 days after December
31 of each year, the Trustee shall mail a brief report dated as of such date
that complies with TIA Section 313(a) to (i) each Certificateholder as
required by TIA Section 313(c) and (ii) the Depositor. The Trustee also shall
comply with TIA Section 313(b). A copy of any report delivered pursuant to
this Section 4.02(e) shall, at the time of its mailing to Certificateholders
and the Depositor, be filed by the Trustee with the Commission.
Section 4.03. Compliance with Tax Reporting and Withholding
Requirements. The Trustee shall file or cause to be filed, within the time
limits established by law, U.S. Federal and State income tax returns and
information statements as a trust, the Certificateholders of which are treated
as the owners thereof under Section 671 of the Code, for each of the Trust's
taxable years. The Trust's taxable year shall be the calendar year.
Notwithstanding any other provision of this Agreement to the contrary, the
Trustee shall comply with all U.S. Federal withholding requirements (including
any applicable exceptions thereto) respecting distributions to, or receipts of
amounts on behalf of, Certificateholders. The consent of Certificateholders
shall not be required for any such withholding. In the event that the Trustee
does withhold any amount from any distribution to any Certificateholder
pursuant to U.S. Federal withholding requirements, the Trustee shall indicate
the amount so withheld in the statement required pursuant to Section 4.02.
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Section 4.04. Preservation of Information, Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Certificateholders contained in
the most recent list furnished to the Trustee by the Certificate Registrar and
the names and addresses of Certificateholders received by the Trustee in its
capacity as Certificate Registrar, if applicable. The Trustee may destroy any
list furnished to it by the Certificate Registrar as provided upon receipt of
a new list.
(b) Certificateholders shall have the right to communicate pursuant
to TIA Section 312(b) with other Certificateholders with respect to their
rights under this Agreement or under the Certificates.
(c) Irrespective of whether the TIA shall apply to this Agreement,
the Depositor, the Trustee and the Certificate Registrar shall have the
protections provided pursuant to TIA Section 312(c).
Section 4.05. Exchange Act Reports. The Trustee will promptly deliver
to Certificateholders copies of any reports filed with the Commission by the
Depositor in respect of the Certificates under the Exchange Act.
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates. (a) There is hereby created a series
of Certificates to be distinguished and known as Core Investment Grade Bond
Trust, Pass-Through Certificates, Series 2002-1. Each Certificate represents a
Fractional Undivided Interest in the assets of the Trust. The aggregate
Certificate Principal Balance of the Certificates shall initially be equal to
$[ ]. Certificates will be denominated in Dollars and issued in minimum
denominations of $1,000. No additional interests in the Trust other than the
Certificates shall be issued hereunder, except in accordance with Section
5.04.
(b) The Certificates will initially be issued as one or more Global
Certificates in definitive, fully registered form without coupons,
substantially in the form set forth in Exhibit A, and DTC will be the
Depositary. Upon issuance, the Global Certificates will initially be deposited
with the Trustee on behalf of DTC. Such Global Certificates shall initially be
registered in the name of Cede & Co. or another nominee designated by DTC.
Global Certificates will clear and settle in book-entry only form through the
facilities of one or more Depositaries. Unless and until it is exchanged in
whole or in part for Certificates, a Global Certificate may not be transferred
except as a whole by the Depositary for such Global Certificate to a nominee
of such Depositary or by a nominee of such Depositary to such Depositary or
another nominee of such Depositary or by such Depositary or any such nominee
to a successor of such Depositary or a nominee of such successor. The
Certificate Principal Balance of any Global Certificate 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 Certificate, as provided in Section
5.01(d) hereof.
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(c) With respect to any transfer or exchange of Certificated
Certificates, the Certificate Registrar shall register the transfer or
exchange of any such Certificate without requiring any additional
certification.
(d) Interests of beneficial owners in a Global Certificate may be
transferred in accordance with the rules and procedures of DTC and any other
applicable Depositaries. In connection with any exchange of beneficial
ownership interests in a Global Certificate for Certificated Certificates
pursuant to Section 5.11(b), the Certificate Registrar shall reflect on its
books and records the date of such exchange and a decrease in the Certificate
Principal Balance of such Global Certificate in an amount equal to the
Certificate Principal Balance of the beneficial ownership interests in such
Global Certificate being exchanged for Certificated Certificates.
Section 5.02. Execution, Authentication and Delivery. (a) The
Certificates shall be executed on behalf of the Trust by the Trustee by one of
its Responsible Officers. The signature of a Responsible Officer may be manual
or facsimile. Certificates bearing the manual or facsimile signature of an
individual who was, at any time, a Responsible Officer shall be valid,
notwithstanding that such individual ceased to be a Responsible Officer prior
to the execution, authentication and delivery of such Certificates or was not
a Responsible Officer at the date of such Certificates.
(b) Each Certificate shall be dated as of the date of its
authentication.
(c) Subject to Section 5.10(e), no Certificate shall be entitled to
any benefit under this Agreement or be valid or obligatory for any purpose,
unless there appears on such Certificate a certificate of authentication
substantially in the form as contained in the form of Certificate attached to
this Agreement as Exhibit A executed by the Trustee by the signature of one of
its authorized signatories, which signature may be manual or facsimile, and
such certificate upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly authenticated and delivered
under this Agreement and is entitled to the benefits of this Agreement.
Section 5.03. Registration; Registration of Transfer and Exchange.
(a) The Trustee shall keep or cause to be kept, at its Corporate Trust Office,
a register (the "Certificate Register") for the Certificates in which, subject
to such reasonable regulations as it may prescribe, a transfer agent and
registrar (which may be the Trustee) (the "Certificate Registrar") shall
provide for the registration of Certificates and the registration of transfers
and exchanges of Certificates. The Trustee is hereby initially appointed
Certificate Registrar for the purpose of registering Certificates and
transfers and exchanges of Certificates as herein provided and the Trustee
shall remain Certificate Registrar for such purposes until the earlier to
occur of (i) the appointment by the Depositor of a different Certificate
Registrar, (ii) the resignation or termination of the Trustee and appointment
of a successor trustee in accordance with Sections 8.07 and 8.08, in which
case such successor trustee shall assume the duties of Certificate Registrar
and (iii) the termination of the Trust and discharge of the Trustee's
obligations under this Agreement in accordance with Article IX; provided,
however, that the Trustee and the Depositor may appoint one or more
Co-Certificate Registrars. Upon the resignation of any Certificate Registrar
appointed by the
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Depositor pursuant to clause (i) above, the Trustee shall promptly appoint a
successor Certificate Registrar or, in the absence of such appointment, assume
the duties of Certificate Registrar.
Upon (i) the appointment by the Depositor of a Certificate Registrar
other than the Trustee, (ii) the appointment by the Depositor of any
Co-Certificate Registrar or (iii) any change in the identity of the
Certificate Registrar or any Co-Certificate Registrar, the Depositor will, in
each case, give the Trustee written notice within three Business Days of any
such appointment or change and of the location, and any change in the
location, of the Certificate Register, and the Trustee shall have the right to
rely upon a certificate executed on behalf of the Certificate Registrar by an
Executive Officer thereof as to the names and addresses of the Holders of the
Certificates and the Certificate Principal Balance and number of each
Certificate.
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office of the Trustee, if the requirements of Section 8-401(1)
of the UCC are met to the Trustee's satisfaction, the Trustee shall execute,
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of any authorized denomination of a
like tenor and aggregate Certificate Principal Balance.
(b) At the option of the Holder, Certificates may be exchanged for
other Certificates of any authorized denomination or denominations of like
tenor and aggregate Certificate Principal Balance upon surrender of the
Certificates to be exchanged at the Corporate Trust Office of the Trustee.
Whenever any Certificates are so surrendered for exchange, the Trustee shall
execute, authenticate and deliver the requested Certificates that the Holder
making the exchange is entitled to receive.
(c) Every Certificate surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar,
duly executed, by the Holder thereof or his/her attorney duly authorized in
writing, with such signature guaranteed by a commercial bank or trust company
located, or having a correspondent located, in The City of New York or the
city in which the Corporate Trust Office is located, or by a member firm of a
national securities exchange, and such other documents as the Trustee may
reasonably require.
All Certificates issued upon any registration of transfer or exchange
of Certificates shall constitute complete and indefeasible evidence of
ownership in the Trust Property and be entitled to the same benefits under
this Agreement as the Certificates surrendered upon such registration of
transfer or exchange.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Certificates, but the Trustee may require payment by
the Holders of a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any registration of transfer or
exchange of Certificates other than an exchange contemplated in Section
3.08(a) or 4.01(b) not involving any transfer.
Section 5.04. Mutilated, Destroyed, Lost and Stolen Certificates. If
(i) any mutilated Certificate is presented to the Depositor and the Trustee or
(ii) the Depositor and the Trustee receive evidence to their satisfaction of
the destruction, loss or theft of any Certificate, and there
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is delivered to the Depositor and the Trustee such security or indemnity as
they may reasonably require to save each of them harmless, and neither the
Depositor nor the Trustee receives notice that such Certificate has been
acquired by a bona fide purchaser, then, in each case, the Trustee shall
execute, authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of any
authorized denomination or denominations of like tenor and Certificate
Principal Balance, bearing a number not contemporaneously Outstanding, so that
neither gain nor loss in interest shall result from such exchange or
substitution.
Upon the issuance of any new Certificate under this Section 5.04, the
Trustee may require the payment by the Holder of a sum sufficient to cover any
tax or other governmental charge that may be imposed in respect thereto and
any other reasonable expenses (including the reasonable fees and expenses of
the Trustee) connected therewith.
Every new Certificate issued pursuant to this Section 5.04 shall
constitute complete and indefeasible evidence of ownership in the Trust
Property, whether or not the destroyed, lost or stolen Certificate shall be at
any time enforceable by anyone, and shall be entitled to all the benefits of
this Agreement equally and proportionately with any and all other
Certificates, if any, duly issued thereunder.
The terms of this Section 5.04 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Certificates.
Section 5.05. Distributions in Respect of Certificates. (a)
Distributions on a Certificate that is payable on a Regular Distribution Date
other than the Final Scheduled Distribution Date or a Special Distribution
Date other than a Special Distribution Date resulting from the optional
redemption of Underlying Notes shall be made to the Person in whose name such
Certificate (or one or more Predecessor Certificates) is registered at the
close of business on the Record Date immediately preceding such Regular
Distribution Date or Special Distribution Date, as the case may be.
Distributions on Certificates on such Regular Distribution Date or Special
Distribution Date, as the case may be, shall be made by check mailed to the
address of the Holder entitled thereto as such address shall appear in the
Certificate Register. Distributions on Certificates on the Final Scheduled
Distribution Date, on a Special Distribution Date resulting from the optional
redemption of Underlying Notes or upon a Removal Event shall be made in
same-day funds against presentation and surrender of such Certificates to the
Trustee at its Corporate Trust Office. Notwithstanding the foregoing, payments
on Global Certificates shall be made in same-day funds on the applicable
Distribution Date.
(b) Subject to the terms of this Agreement to the contrary, each
Certificate delivered under this Agreement upon transfer of or in exchange for
or in lieu of any other Certificate shall carry the rights to amounts to be
distributed that are accrued and undistributed, and to accrue, that were
carried by such other Certificate.
Section 5.06. Persons Deemed Owners. Subject to Section 5.05, prior
to due presentment of a Certificate for registration of transfer, the
Depositor, the Trustee and any agent of the Depositor or the Trustee may treat
the Person in whose name any Certificate is registered
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as the owner of such Certificate for the purpose of receiving distributions on
such Certificate and for all other purposes whatsoever, whether or not such
Certificate be overdue, and none of the Depositor, the Trustee or any agent of
the Depositor or the Trustee shall be affected by notice to the contrary.
None of the Depositor, the Trustee or any agent of the Depositor or
the Trustee will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Global Certificate or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
Notwithstanding the foregoing, with respect to any Global
Certificate, nothing herein shall prevent the Depositor, the Trustee or any
agent of the Depositor or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by any Depositary, as a
Holder, with respect to such Global Certificate or impair, as between such
Depositary and owners of beneficial interests in such Global Certificate, the
operation of customary practices governing the exercise of the rights of such
Depositary (or its nominee) as Holder of such Global Certificate.
Section 5.07. Cancellation. All Certificates presented and
surrendered for payment, transfer or exchange shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee and shall be
promptly canceled by it. No Certificates shall be authenticated in lieu of or
in exchange for any Certificates canceled as provided in this Section 5.07.
Section 5.08. Currency of Distributions in Respect of Certificates.
Distributions on the Certificates will be made in Dollars.
Section 5.09. Appointment of Paying Agent. (a) The Trustee may
appoint one or more paying agents (each, a "Paying Agent") with respect to the
Certificates. Any such Paying Agent shall be authorized to make distributions
to Certificateholders pursuant to this Agreement and shall report the amounts
of such distributions to the Trustee. The Trustee may remove the Paying Agent
if the Trustee determines in its sole discretion that the Paying Agent shall
have failed to perform its obligations under this Agreement in any material
respect or if the Paying Agent fails to satisfy the eligibility requirements
set forth in paragraph (b) of this Section 5.09. The Paying Agent shall
initially be the Trustee and any co-Paying Agent chosen by the Depositor and
acceptable to the Trustee. Any Paying Agent shall be permitted to resign as
Paying Agent upon 30 calendar days' written notice to the Trustee. In the
event that the Trustee shall no longer be the Paying Agent and the Depositor
has not appointed a co-Paying Agent, the Trustee shall appoint a successor or
additional Paying Agent. The Trustee shall cause each such Paying Agent to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee that it will hold all sums, if any, held by it
for distribution to the Certificateholders in an Eligible Account in trust for
the benefit of the Certificateholders entitled thereto until such sums shall
be distributed to such Certificateholders. The Paying Agent shall return all
unclaimed funds to the Trustee within two years from the time such funds were
first eligible to be claimed.
(b) The Paying Agent shall at all times be a corporation or an
association the combined capital and surplus of which is at least $50,000,000
and the long-term debt obligations
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of which are rated in one of the four highest categories assigned long-term
debt obligations by each of the Rating Agencies and shall be subject to
supervision or examination by U.S. Federal or State authority. If such
corporation or association publishes reports of conditions at least annually,
pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then the combined capital and surplus of such corporation
or association shall be deemed to be its combined capital and surplus as set
forth in its most recent report of conditions so published. In the event that
at any time the Paying Agent shall cease to be eligible in accordance with the
terms of this Section 5.09(b), the Paying Agent shall release all Trust
Property to the Trustee and then resign immediately. Upon such resignation,
the Trustee shall act as Paying Agent until the appointment of a successor
Paying Agent in accordance with Section 5.09(a).
(c) The terms of Sections 8.01, 8.02, 8.03, 8.05 and 8.06 shall apply
to the Trustee also in its role as Paying Agent, for so long as the Trustee
shall act as Paying Agent.
Section 5.10. Authenticating Agent. (a) The Trustee may appoint any
one or more Authenticating Agents (each, an "Authenticating Agent") with
respect to the Certificates which shall be authorized to act on behalf of the
Trustee in authenticating the Certificates in connection with the issuance,
delivery and registration or transfer or exchange of the Certificates.
Whenever reference is made in this Agreement to the authentication of
Certificates by the Trustee or the Trustee's unit of authentication, such
reference shall be deemed to include authentication on behalf of the Trustee
by an Authenticating Agent. Each Authenticating Agent must be acceptable to
the Depositor.
(b) Any institution succeeding to the corporate agency business of
any Authenticating Agent shall continue to be an Authenticating Agent without
the execution or filling of any power or any further act on the part of the
Trustee or such Authenticating Agent. An Authenticating Agent may at any time
resign by giving notice of resignation to the Trustee and the Depositor. The
Trustee may at any time terminate the agency of an Authenticating Agent by
signing and delivery a written notice of termination to such Authenticating
Agent and to the Depositor. Upon receiving such a notice of resignation or
upon such a termination, or in case at any time an Authenticating Agent shall
cease to be acceptable to the Trustee or the Depositor, the Trustee may
appoint a successor Authenticating Agent. Subsequent to any such removal or
resignation of the Authenticating Agent, the Trustee shall act as
Authenticating Agent until a successor Authenticating Agent, if any, is
appointed. Any successor Authenticating Agent, upon acceptance of its
appointment hereunder, shall become vested with all the rights, powers and
duties of its predecessor hereunder, with like effect as if originally named
as an Authenticating Agent.
(c) The Trustee agrees to pay to each Authenticating Agent from time
to time reasonable compensation for its services under this Section 5.10.
(d) The provision of Sections 8.01, 8.02 and 8.03 shall be applicable
to any Authenticating Agent.
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(e) Pursuant to an appointment made under this Section 5.10, the
Certificates may have endorsed thereon, in lieu of the Trustee's certificate
of authentication, an alternate certificate of authentication in substantially
the following form:
This is one of the Certificates referred to in the within-mentioned
Trust Agreement.
----------------------------------------
as Authenticating Agent for the Trustee,
By
-------------------------------------
Authorized Signatory
Section 5.11. Issuance Matters. (a) The Certificates shall be issued
on the Closing Date upon (i) deposit of the Underlying Notes into the Trust by
the Depositor in exchange for all the Certificates and (ii) the due
authentication by the Trustee of the Certificates in the form set forth in
Exhibit A attached hereto.
(b) Any Global Certificate representing Certificates shall be
exchangeable for Certificated Certificates only if (i) the Depositary notifies
the Depositor that it is unwilling or unable to continue as depositary for the
Global Certificates or the Depositor determines that the Depositary is unable
to continue as depositary, and the Depositor thereupon fails to appoint a
successor Depositary within 60 calendar days or (ii) the Depositor, in its
sole discretion, at any time determines not to have Certificates represented
by Global Certificates. Any Global Certificate that is exchangeable pursuant
to the preceding sentence will be exchangeable for Certificated Certificates
of like tenor and Certificated Principal Balance, in any authorized
denomination or denominations and registered in the names of such Person or
Persons as the Depositary shall direct. Upon such exchange, the Trustee shall
execute and authenticate such Certificated Certificates and register the same
in the name of, and deliver the same to, such Person or Persons consistent
with Section 5.02.
(c) Any Global Certificate representing Certificates shall bear a
legend in substantially the following form:
"This Certificate is a Global Certificate within the meaning of
the Trust Agreement hereinafter referred to and is registered
in the name of the Depositary or the nominee of a Depositary.
This Certificate is exchangeable for Certificates registered in
the name of a Person other than the Depositary or its nominee
only in the limited circumstances described in the Trust
Agreement, and may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of
the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a
successor of the Depositary or a nominee of such successor."
(d) Each Person that purchases a Certificate on behalf of an employee
benefit plan or other plan that is subject to the provisions of ERISA Section
406 or Section 4975 of the Code will be deemed to represent that:
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(i) the plan is so represented in this regard by a QPAM or
INHAM (as those terms are defined in Prohibited Transaction Class
Exemption ("PTE") 84-14 and PTE 96-23, respectively) and will be so
represented for so long as such plan holds this Certificate, and
that the other conditions of PTE 84-14 or PTE 96-23 are and will at
all times be satisfied,
(ii) the conditions to the applicability of XXX 00-0, XXX 00-00
or PTE 91-38 are and will at all times be satisfied, or
(iii) the conditions of another applicable exemption are and
will at all times be satisfied,
such that in the case of clause (i), (ii) or (iii) above the applicable
exemption applies to the purchase, continued holding and disposition of such
Certificate, as well as to the underlying transactions of the Trust.
ARTICLE VI
THE DEPOSITOR
Section 6.01. Representations and Warranties of the Depositor. (a)
The Depositor represents and warrants to the Trustee that as of the Closing
Date:
(i) the Depositor is a limited liability company duly formed,
validly existing and in good standing under the laws of the State of
Delaware;
(ii) the execution, delivery and performance of this Agreement
by the Depositor will not violate the Depositor's Limited Liability
Company Agreement or constitute a default under, or result in the
breach or acceleration of, any contract, agreement or other
instrument to which the Depositor is a party or by which the
Depositor or any of its assets is bound;
(iii) to the Depositor's knowledge, the Depositor has the full
power and authority to enter into and consummate all transactions
contemplated by this Agreement, has duly authorized the execution,
delivery and performance of this Agreement and has duly executed and
delivered this Agreement; and this Agreement, assuming due
authorization, execution and delivery by the Trustee, will
constitute a valid and legally binding obligation of the Depositor,
enforceable against it in accordance with the terms hereof, except
as such enforcement may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other laws relating to
or affecting the rights of creditors generally or by general equity
principles (regardless of whether such enforcement is considered in
a proceeding in equity or at law); and
(iv) to the Depositor's knowledge, the Depositor is not in
violation, and the execution, delivery and performance of this
Agreement by the Depositor will not constitute a violation, of any
order decree of any court or any order or regulation of any U.S.
Federal or State governmental agency having jurisdiction over the
Depositor or any
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of its assets, which violation would reasonably be expected to
materially and adversely affect the Depositor's duties and
obligations under this Agreement.
(b) It is the express intent of the parties hereto that the
conveyance of the Underlying Notes by the Depositor to the Trustee be, and be
construed as, a sale of the Underlying Notes by the Depositor and not a pledge
of any Underlying Notes by the Depositor to secure a debt or other obligation
of the Depositor. In the event that, notwithstanding the aforementioned intent
of the parties, any Underlying Notes are held to be property of the Depositor,
then it is the express intent of the parties that such conveyance be deemed a
pledge of such Underlying Notes by the Depositor to the Trustee to secure a
debt or other obligation of the Depositor. In connection with the grant of a
security interest in any Underlying Notes, the Depositor hereby represents and
warrants to the Trustee that as of the Closing Date:
(i) In the event such Underlying Notes are held to be property
of the Depositor, then this Agreement creates a valid and continuing
security interest (as defined in the UCC) in such Underlying Notes
in favor of the Trustee, which security interest is prior to all
other liens, claims or other encumbrances and is enforceable as such
against creditors of, and purchasers from, the Depositor;
(ii) Such Underlying Notes have been credited to the
Certificate Account and the Trustee has agreed to treat such
Underlying Notes as "financial assets" within the meaning of the
UCC;
(iii) Immediately prior to the conveyance of such Underlying
Notes to the Trust, the Depositor owned and had good and marketable
title to such Underlying Notes free and clear of any lien, claim or
other encumbrance of any Person;
(iv) The Depositor has received all consents and approvals
required by the terms of such Underlying Notes to the conveyance to
the Trustee of its interest and rights in such Underlying Notes as
contemplated by this Agreement; (v) The Depositor has taken all
steps necessary to cause the Trustee to identify on its records that
the Trustee, as the trustee of the Trust, is the Person having a
security entitlement in the Certificate Account;
(vi) The Depositor has not assigned, pledged, granted a
security interest in, sold or otherwise conveyed any interest in
such Underlying Notes (or, if any such interest has been assigned,
pledged or otherwise encumbered, it has been released); the
Depositor has not authorized the filing of and is not aware of any
financing statements against the Depositor that includes a
description of such Underlying Notes; and the Depositor is not aware
of any judgment or tax lien filings against the Depositor; and
(vii) The Certificate Account is not in the name of any Person
other than the Trustee; and the Depositor has not consented to the
compliance by the Trustee with entitlement orders of any Person
other than the Trustee, as trustee of the Trust.
Section 6.02. Breach of Representation or Warranty. Upon the
Depositor's discovery of a breach of any representation or warranty of the
Depositor set forth in Section 6.01 that
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materially and adversely affects the rights of the Certificateholders, the
Depositor shall notify the Trustee of such breach and shall use its reasonable
efforts to cure such breach in all material respects within five Business Days
of its discovery.
Section 6.03. Liability of the Depositor. The Depositor shall be
liable in accordance with this Agreement only to the extent of the obligations
specifically imposed upon it under this Agreement.
Section 6.04. Limitation on Liability of the Depositor. (a) Unless
otherwise expressly specified in this Agreement, the Depositor shall not be
under any obligation to expend or risk its own funds, except to the extent of
its obligation to pay any amount payable under Section 8.05(b) hereof, or
otherwise incur financial liability in the performance of its duties
thereunder or in the exercise of any of its rights or powers if reasonable
grounds exist for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not assured to it.
(b) Neither the Depositor nor any of its directors, officers,
employees or agents shall be liable, for any losses, costs or damages or
otherwise, to the Trustee or the Certificateholders for any act or omission
except for its willful misconduct, bad faith or gross negligence in the
performance of duties specifically set forth in this Agreement.
The Depositor shall not be under any obligation to appear in,
prosecute or defend any Proceeding; provided, however, that the Depositor may
in its discretion undertake any such Proceeding which it may deem necessary or
desirable with respect to this Agreement.
(c) The sole obligor with respect to any Underlying Note is the
Underlying Issuer thereof. The Depositor shall not have any obligation on or
with respect to the Underlying Notes. The Depositor, in its capacity as the
depositor of the Underlying Notes into the Trust under this Agreement, is not
authorized to proceed against the Underlying Issuer of any Underlying Note
upon the occurrence of a Default Event or otherwise or to assert the rights
and privileges of Certificateholders (except to the extent otherwise a
Certificateholder) and has no duty in respect thereof.
Section 6.05. Depositor May Purchase Certificates. The Depositor or
its Affiliates may at any time purchase Certificates in the open market or
otherwise. Certificates so purchased by the Depositor may, at the discretion
of the Depositor, be held or resold.
Section 6.06. Preparation and Filing of Exchange Act Reports;
Obligations of the Depositor. The Depositor shall:
(a) on behalf of the Trust, prepare, sign and file with the
Commission, within the time period set forth below, copies of the annual
reports and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe), if any, which the Depositor on behalf of the
Trust may be required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act (collectively, "Exchange Act Reports") with respect
to the Trust. The names of such Exchange Act Reports and the dates on which
they are required to be filed with the Commission are as follows:
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(i) Form 8-K, within the time requirement prescribed by the
Exchange Act if the filing of Form 8-K is necessary;
(ii) Form 10-K, within the time requirement prescribed by the
Exchange Act; and
(iii) such other reports as may be required pursuant to Section
13 or 15(d) of the Exchange Act.
(b) deliver to the Trustee, within 15 calendar days after the
Depositor is required to file the same with the Commission, such additional
information, documents and reports with respect to compliance by the Depositor
with the conditions and covenants of this Agreement, if any, as may be
required to be filed with the Commission from time to time by such rules and
regulations; and
(c) deliver to the Trustee, which shall then transmit by mail to all
Holders described in TIA Section 313(c), in the manner and to the extent
provided therein, such summaries of any information, documents and reports
required to be filed by the Depositor and received pursuant to clauses (a) and
(b) of this Section 6.06, if any, as may be required by rules and regulations
prescribed from time to time by the Commission.
Section 6.07. Preferential Collection of Claims Against Depositor.
Irrespective of whether the TIA shall apply to this Agreement, the Trustee
shall comply with TIA Section 311(a), excluding any creditor relationship
listed in TIA Section 311(b). A trustee who has resigned or been removed shall
be subject to TIA Section 311(a) to the extent required by TIA Section 311(a).
ARTICLE VII
RIGHTS OF CERTIFICATEHOLDERS
Section 7.01. Voting Rights with Respect to Underlying Notes. (a)
Within five Business Days after receipt of notice of any meeting of, or other
occasion for the exercise of voting rights or the giving of consents or
waivers by, registered holders of any of the Underlying Notes, the Trustee
shall give notice to the Certificateholders setting forth (i) a record date
established therefor by the Trustee, (ii) such information as is contained in
such notice to registered holders of such Underlying Notes, (iii) a statement
that the Certificateholders as of such record date will be entitled, subject
to any applicable provision of law and any applicable terms of such Underlying
Notes, to direct the Trustee as to the exercise of voting rights or giving of
consents or waivers, if any, that the Trustee, as the registered holder of
such Underlying Notes, is entitled to exercise or give, as the case may be,
and (iv) a statement as to the manner in which instructions may be given to
the Trustee.
(b) The voting, consent or waiver rights allocable to the registered
holders of Underlying Notes pursuant to the terms thereof will be allocated
among the Certificateholders on a pro rata basis (based on their respective
Fractional Undivided Interest) as of a record date established therefor by the
Trustee; and upon the written direction of the Certificateholders, received on
or before the record date established by the Trustee for such purpose, the
Trustee
- 29 -
shall, insofar as practicable and permitted under any applicable provision of
law and any applicable provision of the related Underlying Notes, vote the
principal amount of Underlying Notes that coincides with each such
Certificateholder's Certificate Principal Balance in accordance with any
nondiscretionary instruction set forth in the written direction of each such
Certificateholder.
(c) Absent written directions of Certificateholders, the Trustee may
not vote in favor of or consent to or waive any matter in respect of the
Underlying Notes.
Section 7.02. Direction of Remedies. (a) The Holders of a majority in
aggregate Certificate Principal Balance of the Outstanding Certificates shall
have the right to direct any Proceeding for any remedy in respect of any
Underlying Note available to the Trustee as the registered holder of such
Underlying Note. The Certificateholders also have the right to direct the
Trustee to direct any Proceeding for any remedy available to the applicable
trustee of the Underlying Note Agreement under which any Underlying Note is
issued.
Notwithstanding anything to the contrary contained herein, upon
request of any Certificateholder, the Trustee, on behalf of such
Certificateholder, shall enforce any of its rights under U.S. Federal or State
securities laws as the purchaser of Underlying Notes from the related
Underlying Issuers.
The Trustee is required to notify all Certificateholders of any
notice of default received from the related trustee in respect of any
Underlying Note.
Section 7.03. Meetings of Certificateholders. Certificateholders may
exercise any voting right, give any consent or direct the Trustee at a
separate meeting of Certificateholders convened for that purpose or by written
consent. The Trustee will mail to each Holder of Certificates a notice of any
meeting at which the Holders are entitled to vote or consent or notice of any
matter upon which action by written consent of those Certificateholders is to
be taken. Each such notice will include a statement setting forth the
following information:
(i) the date of the meeting or the date by which the action is
to be taken;
(ii) a description of any resolution proposed for adoption at
the meeting on which the Certificateholders are entitled to vote or
consent or of the matter upon which written consent is sought; and
Section 7.04. Assignment. The Trustee, as the registered holder of
the Underlying Notes, hereby assigns to the Certificateholders its rights
under the U. S. federal securities laws as the purchaser of the Underlying
Notes, including any civil liability available to a purchaser of securities
under Rule 10b-5 of the Exchange Act and Sections 11 and 12(a)(2) of the
Securities Act.
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ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01. Duties of Trustee. (a) The Trustee undertakes to
perform such duties and only such duties as are specifically set forth in this
Agreement. Any permissive right of the Trustee enumerated in this Agreement
shall not be construed as a duty.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
furnished to the Trustee which are specifically required to be furnished
pursuant to any provision of this Agreement, shall examine them to determine
whether they conform to the requirements of this Agreement. If any such
instrument is found not to conform to the requirements of this Agreement, the
Trustee shall take action as it deems appropriate to have the instrument
corrected, and if the instrument is not corrected to the Trustee's
satisfaction, the Trustee will provide notice thereof to the Depositor and the
Certificateholders.
(c) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own misconduct; provided, however, that:
(i) the duties and obligations of the Trustee shall be
determined solely by the express terms of this Agreement, the
Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this
Agreement, no implied covenants or obligations (except for a
fiduciary duty to the beneficiaries of the Trust) shall be read into
this Agreement against the Trustee and, in the absence of
negligence, bad faith or willful misconduct on the part of the
Trustee, the Trustee may conclusively rely upon any certificates or
opinions furnished to the Trustee as to the truth and correctness of
any statements contained therein;
(ii) the Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee
was negligent in ascertaining the pertinent facts;
(iii) except with respect to actions or duties required to be
taken or performed, as applicable, by the Trustee under the express
terms of this Agreement, the Trustee shall not be required to expend
or risk its own funds or otherwise incur financial liability in the
performance of any of its duties or in the exercise of any of its
rights or powers under this Agreement if there is reasonable ground
for believing that the repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it;
provided, however, that the Trustee agrees that the indemnification
under Section 8.05 will provide reasonable assurance against such
risk or liability; and
(iv) in the event that the Paying Agent or the Certificate
Registrar shall fail to perform any obligation, duty or agreement in
the manner or on the day required to be performed by the Paying
Agent or Certificate Registrar, as the case may be, under this
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Agreement, the Trustee shall be obligated promptly upon its
knowledge thereof to perform such obligation, duty or agreement in
the manner so required.
Section 8.02. Certain Matters Affecting the Trustee. (a) Except as
otherwise provided in Section 8.01:
(i) the Trustee may request and rely upon and shall be
protected in acting or refraining from acting upon any resolution,
Officers' Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document
reasonably believed by it to be genuine and to have been signed by
the proper party or parties;
(ii) the Trustee may consult with counsel and any advice or
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by
it under this Agreement in good faith and in accordance with such
advice or Opinion of Counsel;
(iii) except for the duties and obligations of the Trustee
expressly created by this Agreement, the Trustee shall be under no
obligation to exercise any of the trusts or powers vested in it by
this Agreement or to institute, conduct or defend any Proceeding
hereunder or in relation thereto, at the request, order or direction
of any of the Certificateholders, pursuant to the terms of this
Agreement, unless such Certificateholders or the Depositor shall
have offered to the Trustee reasonable security or indemnity against
the costs, expenses and liabilities which may be incurred therein or
thereby;
(iv) the Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to
be authorized or within the discretion or rights or powers conferred
upon it by this Agreement;
(v) the Trustee shall not be bound to make any investigation
into the facts of matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, appraisal, approval, bond or other paper or document believed
by it to be genuine;
(vi) the Trustee may execute any of the trusts or powers or
perform any duties under this Agreement either directly or by or
through agents, attorneys or custodians;
(vii) the Trustee shall not be personally liable for any loss
resulting from the investment of funds held in any Certificate
Account pursuant to Section 3.05; and
(viii) the Trustee shall not be deemed to have notice or actual
knowledge of any matter unless (1) a Responsible Officer assigned to
and working in the Corporate Trust Office has actual knowledge
thereof or (2) written notice thereof is received by the Trustee at
the Corporate Trust Office.
(b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the
- 32 -
Certificates, or the production thereof at the trial or other Proceeding
relating thereto, and any Proceeding instituted by the Trustee shall be
brought in its name for the benefit of all the Holders, subject to the terms
of this Agreement.
Section 8.03. Limitation on Liability of Trustee. The Trustee assumes
no responsibility for the correctness of the recitals contained in this
Agreement, the Certificates or any document issued in connection with the sale
of the Certificates (other than the signature and authentication on the
Certificates). The sole obligor with respect to the Underlying Notes is the
related Underlying Issuer. Except as set forth in Section 8.12, the Trustee
makes no representations or warranties as to the validity or sufficiency of
this Agreement, the Certificates (other than the signature and authentication
on the Certificates), any Underlying Note or any related document. The Trustee
shall not be accountable for the use or application by the Depositor of any of
the Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Depositor in respect of the Underlying
Notes. The Certificates do not represent interests in or obligations of the
Trustee, and the Trustee shall not be responsible or accountable for any tax,
accounting or other treatment proposed to be applied to the Certificates or
any interest therein.
Section 8.04. Trustee May Own Certificates. The Trustee, in its
individual capacity or in any other capacity, may become the owner or pledgee
of Certificates with the same rights it would have if it were not Trustee.
Section 8.05. Trustee Fees and Expenses; Limited Indemnification. (a)
As compensation for its regular and customary services and in payment of its
regular and customary expenses (including those of its counsel), the Trustee
shall be entitled to $_____ per annum (the "Trustee Fees"), which amount shall
be paid solely from the Trust Expenses designated by the Trustee on each
Regular Distribution Date. On each Regular Distribution Date, the Trustee will
designate as trust expenses an amount equal to the product of (1) the
aggregate Certificate Principal Balance of all Certificates Outstanding on the
Business Day immediately preceding such Regular Distribution Date and (2) o%.
In the event that actual expenses of the Trust exceed the amounts designated
as trust expenses in accordance with the preceding sentence by the Trustee,
excess expenses of the Trust not to exceed $50,000 on any Regular Distribution
Date shall be paid by the Depositor, as reimbursed by Bank of America
Corporation. The amounts designated as trust expenses in accordance with the
second preceding sentence and the excess expenses of the Trust exceeding
$50,000 on any Regular Distribution Date are referred to herein collectively
as the "Trust Expenses." Trust Expenses will be allocated on a pro rata basis
among Certificateholders and deducted from each Certificateholder's allocable
share of interest collections received by the Trustee on the applicable
Regular Distribution Date.
(b) The Trustee and any director, officer, employee or agent of the
Trustee shall be indemnified by the Depositor and held harmless against any
loss, liability or expense incurred in connection with any Proceeding relating
to this Agreement or the Certificates or the performance of any of the
Trustee's duties under this Agreement, other than any loss, liability or
expense (i) that constitutes a specific liability of the Trustee under this
Agreement or (ii) incurred by reason of willful misconduct, bad faith or
negligence in the performance of the Trustee's duties hereunder or as a result
of a breach or reckless disregard of the Trustee's obligations and duties
hereunder (such loss, liability or expense, other than as described in clauses
(i) and (ii) of this sentence, "Extraordinary Trust Expense"); provided,
however, that with respect to any such
- 33 -
Proceeding, (1) the Trustee shall have given the Depositor notice thereof
promptly after the Trustee shall have knowledge thereof; (2) while maintaining
control over its own defense in any such Proceeding, the Trustee shall consult
with the Depositor in preparing such defense; (3) if any Person ever alleges
such willful misconduct, bad faith or negligence by the Trustee, the
indemnification provided for in this Section 8.05(b) shall nonetheless be paid
upon demand, subject to later adjustment or reimbursement, until such time as
a court of competent jurisdiction enters a final judgment as to the extent and
effect of the alleged willful misconduct, bad faith or negligence; and (4) the
Depositor shall in no event be obligated under this Agreement to indemnify the
Trustee for any Extraordinary Trust Expense to the extent that such
Extraordinary Trust Expense, when aggregated with all Extraordinary Trust
Expenses previously indemnified, exceeds $[ ] (the "Maximum Reimbursable
Amount"). In the event the Trustee is not indemnified by the Depositor in
accordance with this Section 8.05(b), the Trustee shall nevertheless remain
obligated to perform its duties under this Agreement.
(c) The Trustee and the Depositor expressly acknowledge that the
limited obligations of the Depositor to indemnify the Trustee pursuant to
Section 8.05(b) do not extend to amounts attributable to compensation for
services or payment of expenses of the Trustee, which amounts are payable in
full in accordance with Section 8.05(a).
Section 8.06. Eligibility Requirements for Trustee. (a) The Trustee
shall at all times satisfy the requirements of TIA Section 310(a) and Section
(a)(4)(i) of Rule 3a-7 under the Investment Company Act. The Trustee hereunder
shall at all times be a corporation which is not an Affiliate of the Depositor
(but may have normal banking relationships with the Depositor or any obligor
with respect to the Underlying Notes and their respective Affiliates)
organized and doing business under the laws of any State or the United States,
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000 and subject to
supervision or examination by U.S. Federal or State banking authorities, and
the long-term debt obligations of which are rated in one of the four highest
categories assigned long-term debt obligations by each of the Rating Agencies.
If such corporation or association publishes reports of conditions at least
annually, pursuant to law or to the requirements of the aforesaid supervising
or examining authority, then the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of conditions so published. In
the event that at any time the Trustee shall cease to be eligible in
accordance with the terms of this Section 8.06, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.07.
(b) The Trustee shall comply with Section 310(b) of the TIA;
provided, however, that there shall be excluded from the operation of TIA
Section 310(b)(1) other outstanding debt securities of the Underlying Issuer
if the requirements for such exclusion set forth in TIA Section 310(b)(1) are
met.
Section 8.07. Resignation or Removal of the Trustee. (a) Subject to
the last sentence of this Section 8.07(a), the Trustee may at any time resign
and be discharged from its obligations and duties hereunder by giving written
notice thereof to the Depositor and to all Certificateholders. Upon receiving
such notice of resignation, the Depositor shall as promptly as possible (and
in any event within 45 calendar days after the date of such notice of
resignation) appoint a successor Trustee by written instrument, in duplicate,
which instrument shall be
- 34 -
delivered to the resigning Trustee and to the successor Trustee. A copy of
such instrument shall be delivered to the Certificateholders by the Depositor.
If no such successor Trustee shall have been so appointed and have accepted
appointment within 45 calendar days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee for the Certificates.
Upon any appointment of a successor Trustee pursuant to this Section 8.07(a),
the resigning Trustee shall be solely liable for (i) the payment of such
successor Trustee's fees and expenses and (ii) provision of adequate
indemnities satisfactory to such successor Trustee (it being understood that
the indemnification obligations of the Depositor pursuant to Section 8.05(b)
shall inure to the benefit of such successor Trustee, but that any
Extraordinary Trust Expense previously indemnified by the Depositor shall
reduce the Maximum Reimbursable Amount with respect to such successor Trustee
on a dollar-for-dollar basis). In the event that the Trustee fails to satisfy
the conditions contained in clauses (i) and (ii) above, the Trustee may not
resign pursuant to this Section 8.07(a).
(b) If at any time the Trustee shall cease to be eligible in
accordance with the terms of Section 8.06 and shall fail to resign after
written request therefor by the Depositor, or if at any time the Trustee shall
become incapable of acting, or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then
the Depositor may remove the Trustee and appoint a successor Trustee by
written instrument, in duplicate, which instrument shall be delivered to the
Trustee so removed and to the successor Trustee. A copy of such instrument
shall be delivered to the Certificateholders by the Depositor.
(c) Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the terms of this Section 8.07 shall not
become effective until acceptance of appointment by the successor Trustee as
provided in Section 8.08.
Section 8.08. Successor Trustee. (a) Any successor Trustee appointed
as provided in Section 8.07 shall execute, acknowledge and deliver to the
Depositor and its predecessor Trustee an instrument accepting such appointment
under this Agreement, and thereupon the resignation or removal of the
predecessor Trustee shall become effective and such successor Trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of the predecessor Trustee under this
Agreement, with the like effect as if originally named as Trustee in this
Agreement. The predecessor Trustee shall deliver to the successor Trustee all
documents and statements held by it under this Agreement, and the Depositor
and the predecessor Trustee shall execute and deliver such instruments and do
such other things as may reasonably be required for more fully and certainly
vesting and confirming in the successor Trustee all such rights, powers,
duties and obligations. No successor Trustee shall accept appointment as
provided in this Section 8.08 unless at the time of such acceptance such
successor Trustee shall be eligible under the terms of Section 8.06.
(b) Upon acceptance of appointment by a successor Trustee as provided
in this Section 8.08, the Depositor shall transmit notice of the succession of
such Trustee under this Agreement to all Certificateholders.
- 35 -
Section 8.09. Merger or Consolidation of Trustee. Any corporation or
association into which the Trustee may be merged or converted or with which it
may be consolidated or any corporation or association resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation or association succeeding to the business of the Trustee,
shall be the successor of the Trustee under this Agreement, provided such
corporation or association shall be eligible under the terms of Section 8.06,
without the execution or filing of any paper or any further act on the part of
any of the parties to this Agreement, anything in this Agreement to the
contrary notwithstanding.
Section 8.10. Appointment of Co-Trustee. (a) Notwithstanding any
other terms of this Agreement, at any time, for the purpose of meeting any
legal requirements of any jurisdiction in which any party of the Trust
Property may at the time be located, the Depositor and the Trustee acting
jointly shall have the power and shall execute and deliver all instruments to
appoint one or more Persons approved by the Trustee to act as co-Trustee or
co-Trustees, jointly with the Trustee, of all or any part of the Trust
Property, and to vest in such Person or Persons, in such capacity, such title
to the Trust Property, or any part thereof, and, subject to the other terms of
this Section 8.10, such powers, duties, obligations, rights and trusts as the
Depositor and the Trustee may consider necessary or desirable. If the
Depositor shall not have joined in such appointment within 30 calendar days
after the receipt by it of a request so to do, the Trustee alone shall have
the power to make such appointment. No co-Trustee under this Agreement shall
be required to meet the terms of eligibility as a successor Trustee under
Section 8.06 and no notice to Certificateholders of the appointment of a
co-Trustee or co-Trustees shall be required under Section 8.08.
(b) In the case of any appointment of a co-Trustee pursuant to this
Section 8.10, all rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or performed
by the Trustee and such co-Trustee jointly, except to the extent that under
any law of any jurisdiction in which any particular act or acts are to be
performed by the Trustee, the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to such Trust Property or any
portion thereof in any such jurisdiction) shall be exercised and performed by
such co-Trustee at the direction of the Trustee.
(c) Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of the co-Trustees, as effectively as if
given to each of them. Every instrument appointment any co-Trustee shall refer
to this Agreement and the conditions of this Article VIII. Each co-Trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, jointly with the
Trustee subject to all the terms of this Agreement, specifically including
every provision of this Agreement relating to the conduct of, affecting the
liability of, or affording protection to, the Trustee. Every such instrument
shall be filed with the Trustee.
(d) Any co-Trustee may, at any time, constitute the Trustee, its
agent or attorney-in-fact, with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of this Agreement
on its behalf and in its name. If any co-Trustee shall die, become incapable
of acting, resign or be removed, all its estates, properties, rights,
- 36 -
remedies and trusts shall vest in and be exercised by the Trustee, to the
extent permitted by law, without the appointment of a new or successor
Trustee.
Section 8.11. Presentment and Surrender at Corporate Trust Office.
The Certificates may be surrendered for registration of transfer or exchange,
and presented and surrendered on the Final Scheduled Distribution Date, on a
Special Distribution Date resulting from the optional redemption of Underlying
Notes or upon a Removal Event, and notices and demands to or upon the Trustee
in respect of the Certificates and this Agreement may be served, at the
Corporate Trust Office of the Trustee.
Section 8.12. Representations and Warranties of Trustee. (a) The
Trustee represents and warrants that:
(i) the Trustee is duly organized, validly existing and in good
standing under the laws of the State of New York;
(ii) the Trustee has full power, authority and right to
execute, authenticate, deliver and perform its duties and
obligations under this Agreement and the Certificates and has taken
all necessary action to authorize the execution, authentication,
delivery and performance by it (or, with respect to the
Certificates, by an Authenticating Agent on its behalf, if
applicable) of this Agreement and the Certificates;
(iii) the execution, authentication and delivery of this
Agreement, the Certificates and the Purchase Agreement by the
Trustee and its performance of and compliance with the terms of this
Agreement and the Certificates will not violate the Trustee's
charter or by-laws or constitute a default under, or result in the
breach or acceleration of, any contract, agreement or other
instrument to which the Trustee is a party or which may be
applicable to the Trustee or any of its assets;
(iv) as of the Closing Date, each of this Agreement and the
Certificates has been duly executed, authenticated and delivered by
the Trustee (or, with respect to the Certificates, by an
Authenticating Agent on its behalf, if applicable) and this
Agreement constitutes the valid and legally binding obligation of
the Trustee, enforceable in accordance with its terms, except as
enforcement may be limited by the applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of
creditors generally or by general principles of equity;
(v) the Trustee is not in violation, and the execution,
authentication and delivery of this Agreement and the Certificates
by the Trustee and its performance and compliance with respective
terms of this Agreement and the Certificates will not constitute a
violation, of any order or decree of any court or any order or
regulation of any U.S. Federal, State, municipal or governmental
agency having jurisdiction over the Trustee or any of its assets,
which violation would reasonably be expected to have a material
adverse effect on the business, prospects, condition (financial or
otherwise) or operations of the Trustee or on the performance of its
duties thereunder;
(vi) there are no Proceedings against, or investigations of,
the Trustee pending, or, to the knowledge of the Trustee,
threatened, before any court, administrative agency
- 37 -
or other tribunal (a) that could reasonably be expected to prohibit
its entering into this Agreement or to render the Certificates
invalid, (b) seeking to prevent the issuance of the Certificates or
the consummation of any of the transactions contemplated by this
Agreement or (c) that could reasonably be expected to prohibit or
materially and adversely affect the performance by the Trustee of
its obligations under, or the validity or enforceability of, this
Agreement or the Certificates; and
(vii) no consent, approval, authorization or order of any court
or governmental agency or body is required for the execution,
authentication, delivery and performance by the Trustee of, or
compliance by the Trustee with, this Agreement or the Certificates,
or for the consummation of the transactions contemplated by this
Agreement, except for such consents, approvals, authorizations and
orders, if any, that have been obtained prior to the Closing Date.
(b) Within 30 calendar days of the discovery by the Trustee of a
breach of any of its representations or warranties set forth in this Section
8.12, the Trustee shall promptly cure such breach.
Section 8.13. Limitation of Powers and Duties. The Trust is
constituted solely for the purposes of acquiring and holding the Underlying
Notes, entering into the Purchase Agreement, issuing the Certificates and
engaging in activities incidental to the foregoing. The Trust may not incur
any additional debt other than the debt that does not constitute a claim
against the Trust Property. The Trustee is not authorized to acquire any other
investments or engage in any activities not authorized in this Agreement and,
in particular, the Trustee is not authorized (i) to Transfer any of the
Underlying Notes or interests therein to any Person except as contemplated in
Section 3.08 or 3.09 or (ii) to do anything that would cause the Trust to (1)
be required to be registered under the Investment Company Act or (2) cause the
Trust to be taxed as a corporation or a publicly traded partnership taxable as
a corporation or otherwise alter the classification of the Trust for U.S.
Federal income tax purposes.
ARTICLE IX
TERMINATION
Section 9.01. Termination of the Trust. (a) The respective
obligations and responsibilities under this Agreement of the Depositor and the
Trustee (other than the obligations of the Trustee to provide reports and
other information under this Agreement and to make distributions to
Certificateholders as herein set forth) shall terminate upon the distribution
to such Holders of all amounts required to be paid by the Underlying Issuers
of their respective Underlying Notes then constituting a part of the Trust
Property; provided, however, that in no event shall the Trust continue beyond
the expiration of 21 years from the death of the last survivor of the
descendants of Xxxxxx X. Xxxxxxx Xx., the late Ambassador to the Court of St.
Xxxxx.
(b) Written notice of any termination shall be provided to each
Certificateholder and the Depositor within ten Business Days of such
termination, unless such termination occurs on the Final Scheduled
Distribution Date.
- 38 -
(c) On the Final Scheduled Distribution Date, unless the Certificates
are no longer Outstanding, the Trustee shall distribute to each Holder
presenting and surrendering its Certificates, the amount distributable on the
Final Scheduled Distribution Date pursuant to Section 4.01 in respect of the
Certificates so presented and surrendered. Any funds not distributed on the
Final Scheduled Distribution Date shall be set aside and held in trust by the
Trustee for the benefit of Certificateholders that fail to present and
surrender their Certificates on the Final Scheduled Distribution Date and
shall be disposed of upon such presentation and surrender, subject to Sections
4.01 and 5.09. Immediately following the deposit of such funds in trust
hereunder, the Trust shall terminate.
ARTICLE X
MISCELLANEOUS TERMS
Section 10.01. Amendment of this Agreement. (a) This Agreement may be
amended from time to time by the Depositor and the Trustee without the consent
of any of the Certificateholders for any of the following purposes: (i) to
cure any ambiguity or to correct or supplement any provision in this Agreement
which may be defective or inconsistent with any other provision in this
Agreement; (ii) to add to the covenants, restrictions or obligations of the
Depositor for the benefit of the Certificateholders, (iii) to add, change or
eliminate any other provisions with respect to matters or questions arising
under this Agreement, provided, however, that (a) any such addition, change or
elimination would not, as evidenced by an Opinion of Counsel (1) require the
Trust to be registered under the Investment Company Act, (2) cause the Trust
to be taxed as a corporation or a publicly traded partnership taxable as a
corporation or otherwise alter the classification of the Trust for U.S.
Federal income tax purposes or (3) result in a sale or exchange of any
Certificate for tax purposes and (b) the Trustee shall have received written
confirmation that the Rating Agency Condition shall be satisfied with respect
to such addition, change or elimination; (iv) to comply with any requirements
imposed by the Code; (v) to amend the definition Maximum Reimbursable Amount
so as to increase, but not decrease, the amount contained in such definition
or to otherwise amend or waive the terms of Section 8.05(b) in any manner
which shall not adversely affect the Certificateholders in any material
respect; or (vi) to evidence and provide for the acceptance of appointment
under this Agreement by a successor Trustee.
(b) Promptly after the execution of any such amendment or
modification, the Trustee shall furnish a copy of such amendment to each
Certificateholder.
(c) Notwithstanding the foregoing, no amendment to this Agreement
pursuant to Section 10.01(a) shall be permitted unless the Trustee first
receives an Opinion of Counsel, provided at the expense of the party
requesting such amendment, that such amendment would not (1) require the Trust
to be registered under the Investment Company Act, (2) cause the Trust to be
taxed as a corporation or a publicly traded partnership taxable as a
corporation or otherwise alter the classification of the Trust for U.S.
Federal income tax purposes or (3) result in a sale or exchange of any
Certificate for tax purposes.
(d) Notwithstanding the foregoing, this Agreement may also be amended
from time to time by the Depositor and the Trustee with the consent of
Certificateholders representing a
- 39 -
majority of the aggregate Certificate Principal Balances of the Outstanding
Certificates on the date of such determination for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the
Certificateholders; provided, however, that, the consent of 100% of the
aggregate Certificate Principal Balances of all Outstanding Certificates on
the date of such determination shall be required in the event any such
amendment would (i) reduce in any manner the amount, delay the timing or
otherwise alter the pass-through nature of payments received on Underlying
Notes that are required to be distributed on any Certificate, (ii) reduce the
Certificate Principal Balance of the Certificates except upon payment on the
Final Scheduled Distribution Date or upon the occurrence of a Removal Event or
the optional redemption of Underlying Notes, (iii) result in a qualification,
downgrade or withdrawal of a rating of the Certificates by any of the Rating
Agencies , (iv) (1) require the Trust to be registered under the Investment
Company Act, (2) cause the Trust to be taxed as a corporation or a publicly
traded partnership taxable as a corporation or otherwise alter the
classification of the Trust for U.S. Federal income tax purposes or (3) result
in a sale or exchange of any Certificate for tax purposes or (v) reduce the
aforesaid required percentages required for the consent to any amendment with
the consent of the Certificateholders.
Section 10.02. Counterparts. This Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one
and the same instrument.
Section 10.03. Limitation on Rights of Certificateholders. (a) The
death or incapacity of any Certificateholder shall not (1) operate to
terminate this Agreement or the Trust Property, (2) entitle such
Certificateholder's legal representatives or heirs to claim an accounting or
to take any Proceeding in any court for a partition or winding up of the Trust
Property or (3) otherwise affect the rights, obligations and liabilities of
the parties thereto or any of them.
(b) Except as otherwise expressly provided herein, no
Certificateholder shall have any right to control the operation and management
of any Trust Property, or the obligations of the parties thereto, nor shall
anything in this Agreement set forth, or contained in the terms of the
Certificates, be construed so as to constitute the Certificateholders from
time to time as partners or members of an association. In addition, no
Certificateholder shall be under any liability to any third person by reason
of any action taken by the parties to this Agreement pursuant to any provision
thereof.
Section 10.04. Governing Law. This Agreement and each Certificate
shall be governed by and construed in accordance with the laws of the State of
New York.
Section 10.05. Notices. All directions, demands and notices under
this Agreement shall be in writing and shall be delivered to the offices of
the Trustee at [ ] and to the Administrative Agent at [ ].
Any notice required to be given to a Holder of a Certificate will be sent by
first class mail, postage prepaid, to the last address of such Holder set
forth in the Certificate Register or will be given by facsimile to such number
as may be provided to the Trustee and the Administrative Agent. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given when mailed, whether or
- 40 -
not the Certificateholder receives such notice. Notices given by facsimile
will be effective upon confirmation (including electronic confirmation) of
effective transmission.
Section 10.06. Severability of Terms. If any one or more of the
covenants, agreements or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, agreements or terms shall be
deemed severable from the remaining covenants, agreements or terms of this
Agreement and shall in no way affect the validity or enforceability of the
other terms of this Agreement or of the Certificates or the rights of the
Holders thereof.
Section 10.07. Notice to Rating Agencies. The Trustee shall use its
best efforts promptly to provide notice to the Rating Agencies with respect to
each of the following events as to which it has actual knowledge:
(i) any material change or amendment to this Agreement;
(ii) the resignation or termination of the Trustee;
(iii) any change in the location of the Certificate Account;
(iv) any Removal Event; and
(v) the final distribution to Holders of the Certificates.
In addition, the Trustee shall promptly furnish to the Rating Agencies copies
of each report to Certificateholders described in Section 4.02. Any such
notice pursuant to this Section 10.07 shall be in writing and shall be deemed
to have been duly given if personally delivered or mailed by first class mail,
postage prepaid, or by express delivery service to the Rating Agencies.
Section 10.08. No Recourse. Each Holder, by its acceptance of a
Certificate or a beneficial interest or participation therein; acknowledges
that such Holder's Certificate represents a beneficial ownership interest in
the assets of the Trust only and does not represent an interest in or
obligation of the Depositor, the Trustee or any Affiliate of the Depositor or
the Trustee and no recourse may be had against such Persons or their
respective assets.
Section 10.09. Conflict With Trust Indenture Act. (a) If any
provision hereof limits, qualifies or conflicts with another provision hereof
that is required to be included in this Agreement by any of the provisions of
the TIA, such required provision shall control.
(b) The provisions of the TIA Sections 310 through 317 that impose
duties on any Person (including the provisions automatically deemed included
herein unless expressly excluded by this Agreement) are a part of and govern
this Agreement, whether or not physically contained herein.
(c) Except as expressly provided in this Agreement, all provisions
specifically referencing the TIA shall be inapplicable unless and until such
time as this Agreement is qualified under the TIA.
- 41 -
Section 10.10. Intention of Parties. The parties hereto intend that
the Trust be classified for U.S. federal income tax purposes as a grantor
trust under Subpart E, Part I of Subchapter J of the Internal Revenue Code of
1986, as amended, and not as a trust or association taxable as a corporation
or as a partnership. Each Certificateholder, by its acceptance of its
Certificate or a beneficial interest or participation therein, agrees to treat
the Trust as a grantor trust for all U.S. Federal, State and local income tax
purposes. The powers granted and obligations undertaken pursuant to this
Agreement shall be so construed so as to further such intent.
- 42 -
IN WITNESS WHEREOF, the Depositor and the Trustee have caused this
instrument to be duly executed by their respective officers thereunto duly
authorized as of the date first above written.
CORE BOND PRODUCTS LLC, as Depositor
By:
----------------------------------------
Name:
Title:
THE BANK OF NEW YORK, as Trustee
By:
----------------------------------------
Name:
Title:
BANC OF AMERICA SECURITIES LLC,
as Administrative Agent
By:
----------------------------------------
Name:
Title:
- 43 -
SCHEDULE I
Underlying Note Schedule
---------------------------------------------------------------------------------------------------------------------
Underlying
Series of Note
Underlying Underlying Underlying Principal Interest Maturity Xxxxx'x S&P
CUSIP Issuer Notes Note Rate Amount Payment Dates Date Rating Rating
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
- 44 -
EXHIBIT A
FORM OF CERTIFICATE
[FACE OF CERTIFICATE]
EACH PURCHASER THAT PURCHASES THIS CERTIFICATE ON BEHALF OF AN EMPLOYEE
BENEFIT PLAN OR OTHER PLAN THAT IS SUBJECT TO THE PROVISIONS OF SECTION 406 OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION
4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, WILL BE DEEMED TO
REPRESENT THAT EITHER (A) THE PLAN IS SO REPRESENTED IN THIS REGARD BY A QPAM
OR INHAM (AS THOSE TERMS ARE DEFINED IN PROHIBITED TRANSACTION CLASS EXEMPTION
("PTE") 84-14 AND PTE 96-23, RESPECTIVELY) AND WILL BE SO REPRESENTED FOR SO
LONG AS SUCH PLAN HOLDS THIS CERTIFICATE, AND THAT THE OTHER CONDITIONS OF PTE
84-14 OR PTE 96-23 ARE AND WILL AT ALL TIMES BE SATISFIED, (B) THE CONDITIONS
TO THE APPLICABILITY OF PTE 90-1, PTE 95-60 OR PTE 91-38 ARE AND WILL AT ALL
TIMES BE SATISFIED OR (C) THE CONDITIONS OF ANOTHER APPLICABLE EXEMPTION ARE
AND WILL AT ALL TIMES BE SATISFIED, SUCH THAT IN THE CASE OF EITHER (A), (B)
OR (C), THE APPLICABLE EXEMPTION APPLIES TO THE PURCHASE, CONTINUED HOLDING
AND DISPOSITION OF THIS CERTIFICATE, AS WELL AS TO THE UNDERLYING TRANSACTIONS
OF THE TRUST REFERRED TO HEREIN.
A-1
[Include if this Certificate is a Global Certificate:
This Certificate is a Global Certificate within the meaning of the
Trust Agreement hereinafter referred to and is registered in the name of the
Depositary or a nominee of the Depositary. This Certificate is exchangeable
for Certificates registered in the name of a Person other than the Depositary
or its nominee only in the limited circumstances described in the Trust
Agreement, and may not be transferred except as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary or by the Depositary or any such nominee
to a successor of the Depositary or a nominee of such successor.]
[Include if this Certificate is a Global Certificate and DTC is the
Depositary:
Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to the
Trustee or its agent for registration of transfer, exchange or payment, and
any certificate issued in exchange for this certificate or any portion hereof
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.]
REGISTERED CERTIFICATE PRINCIPAL BALANCE: $_______
No. ______
CUSIP No. ___________
ISIN US _____________
Common Code No. ____________
Core Investment Grade Bond Trust
Pass-Through Certificate, Series 2002-1
Issuance Date: ____________, 2002
Final Scheduled Distribution Date: o, 2012
Evidencing a Fractional Undivided Interest in Core Investment Grade Bond Trust
THIS CERTIFIES THAT _______________, for value received, is the
registered owner (the "Holder") of $__________ (___________ dollars) in
Certificate Principal Balance, subject to change as specified in Schedule 1
hereto, in Core Investment Grade Bond Trust (the "Trust") created pursuant to
a Trust Agreement, dated as of [ ], 2002 (the "Trust Agreement"), among The
Bank of New York, as trustee (the "Trustee"), Core Bond Products LLC, as
depositor (the "Depositor"), and Banc of America Securities LLC, as
administrative agent (the "Administrative Agent"), a summary of certain of the
pertinent provisions of which is set forth below. To the extent not otherwise
defined herein, the capitalized terms used herein have the meanings assigned
to them in the Trust Agreement.
A-2
This Certificate is one of the duly authorized Certificates
designated as "Pass-Through Certificates, Series 2002-1" (the "Certificates").
This Certificate is issued under and is subject to the terms, provisions, and
conditions of the Trust Agreement. By virtue of its acceptance hereof, the
Holder assents to and agrees to be bound by the provisions of the Trust
Agreement.
This Certificate evidences a Fractional Undivided Interest in the
Trust Property. Subject to the terms and conditions of the Trust Agreement,
until the obligations created by the Trust Agreement shall have terminated in
accordance therewith, Certificateholders will be entitled to receive on the
related Distribution Date distributions in an amount equal to their Fractional
Undivided Interest in the amounts received by the Trustee and required to be
distributed to Certificateholders on such Distribution Date pursuant to the
terms of the Trust Agreement.
Except as otherwise provided in the Trust Agreement and
notwithstanding the foregoing, distributions payable on the Final Schedule
Distribution Date, on a Special Distribution Date resulting from the optional
redemption of Underlying Notes or upon a Removal Event will be made only upon
presentation and surrender of this Certificate at the Corporate Trust Office
of the Trustee.
Each Certificateholder, by its acceptance of this Certificate or a
beneficial interest herein, agrees to treat the Trust as a trust, the
certificateholders of which are treated as the owners thereof under Section
671 of the Code, for U.S. Federal income tax purposes.
THE TRUST AGREEMENT AND THIS CERTIFICATE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual or facsimile signature, this Certificate shall not be
entitled to any benefit under the Trust Agreement or be valid for any purpose.
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 rights, benefits, obligations and duties evidenced thereby. A
copy of the Trust Agreement may be examined during normal business hours at
the Corporate Trust Office of the Trustee, located initially at 0 Xxxx Xxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, and at such other places, if any,
designated by the Trustee, by any Certificateholder upon request.
Reference is hereby made to the further terms of this Certificate set
forth on the reverse hereof, which further terms shall for all purposes have
the same effect as if set forth at this place.
A-3
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust, and not in
its individual capacity, has caused this Certificate to be duly executed.
CORE INVESTMENT GRADE BOND TRUST
By: THE BANK OF NEW YORK, as Trustee
By:
-----------------------------------------
Authorized Signatory
DATED:
[SEAL]
Trustee's Certificate of Authentication:
This is one of the Certificates referred to in the within-mentioned
Trust Agreement.
Date: THE BANK OF NEW YORK, as Trustee
By:
------------------------------
Authorized Signatory
A-4
[REVERSE OF CERTIFICATE]
Core Investment Grade Bond Trust
Pass-Through Certificate, Series 2002-1
The Trust Agreement permits the amendment thereof, in certain
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Trust Agreement and subject to certain limitations
herein and 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 Corporate Trust Office, accompanied by a
written instrument of transfer in form and substance satisfactory to the
Trustee duly completed and executed by the Holder hereof or such Holder'
attorney duly authorized in writing, and thereupon one or more new
Certificates of authorized denominations evidencing the same aggregate
Certificate Principal Balance will be issued to the designated transferee.
As provided in the Trust Agreement and subject to certain limitations
herein and therein set forth, this Certificate is exchangeable for new
Certificates of authorized denominations representing the same aggregate
Certificate Principal Balance, as requested by the Holder surrendering the
same. The Trustee may require payment of a sum sufficient to cover any tax or
governmental charges payable in connection therewith and any expenses
reasonably incurred by the Trustee, except as otherwise specified in the Trust
Agreement.
The Certificates are issuable only in registered form without coupons
in minimum denominations of $1,000.
Prior to due presentment for registration of transfer, the Depositor,
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 none of the Depositor, the Trustee or any such agent shall be
affected by any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement
and the Trust created thereby will terminate upon the payment to
Certificateholders of all amounts required to be paid to them pursuant to the
Trust Agreement.
Notwithstanding anything contained in the Trust Agreement to the
contrary, the Trust Agreement has been accepted by the Trustee, not in its
individual capacity but solely as Trustee. In no event shall the Trustee have
any liability for the representations, warranties, covenants, agreements or
other obligations of the Depositor thereunder or in any of the certificates,
notices or agreements of the Depositor delivered pursuant thereto, as to all
of which recourse shall be had solely to the assets of the Depositor, and,
except as specified in Section 8.05 of the Trust Agreement, under no
circumstances shall the Trustee be personally liable for the payment of any
indebtedness or expenses of the Trust. This Certificate does not represent an
interest in or obligation of the Trustee and the Trustee shall not be
responsible or accountable for any tax, accounting or other treatment proposed
to be applied to the Certificates or any interest therein except as expressly
provided in the Trust Agreement.
A-5
[Include if this Certificate is a Global Certificate]
Schedule 1
SCHEDULE OF CHANGES IN OUTSTANDING CERTIFICATE PRINCIPAL BALANCE
The following notations in respect of changes in the outstanding
Certificate Principal Balance of this Global Certificate have been made in
respect of a Removal Event or a Special Distribution Date resulting from the
optional redemption of Underlying Notes :
Date Initial Certificate Change in Outstanding New Certificate Notation
Principal Balance Certificate Principal Balance Principal Balance Made by
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