EXHIBIT 10.1
CLASS A-1 CALL OPTION AGREEMENT
CLASS A-1 CALL OPTION AGREEMENT, dated as of June 21, 2002 (this
"Agreement"), among CORPORATE ASSET BACKED CORPORATION, a Delaware corporation
(the "Depositor"), as the sole initial Option Holder (as defined below), UBS
WARBURG LLC ("UBSW"), as the initial purchaser from the Depositor, and initial
and sole holder at the time of execution of this Agreement, of the Class A-1
Certificates (as defined below), and THE BANK OF NEW YORK, a New York banking
corporation, as the agent appointed by UBSW to act on behalf of UBSW and its
successors under this Agreement and the Trust Agreement (as defined below), with
respect to the options granted by UBSW to the Depositor under this Agreement.
The Bank of New York, acting for UBSW and any subsequent transferee of a Class
A-1 Certificate as agent with respect to such options as set forth in more
detail below, is referred to herein as the "Option Agent."
WITNESSETH:
WHEREAS, the Depositor has established the CABCO Series 2002-1 Trust
(AOL Time Warner Inc.) (the "Trust") as a common law trust under the laws of the
State of New York pursuant to the Trust Agreement, dated as of June 21, 2002
(the "Trust Agreement"), between the Depositor and The Bank of New York, as
Trustee and Option Agent; and
WHEREAS, the Trust issued certificates to the Depositor in two
classes evidencing in the aggregate the beneficial interests in all the assets
of the Trust; and
WHEREAS, the Depositor is selling all the Class A-1 Callable
Certificates issued by the Trust (the "Class A-1 Certificates") to UBSW and RBC
Xxxx Xxxxxxxx Inc. ("RBC Xxxx Xxxxxxxx," and together with UBSW, the
"Underwriters"), as underwriters, pursuant to the Underwriting Agreement, dated
June 14, 2002 (the "Underwriting Agreement"), between the Depositor and the
Underwriters for resale to investors, and is selling all the Class B-1 Callable
Certificates issued by the Trust (the "Class B-1 Certificates") to UBSW, as
initial purchaser, under the Purchase Agreement, dated June 14, 2002, between
the Depositor and UBSW; and
WHEREAS, to effectuate the issuance of the Class A-1 Options, RBC
Xxxx Xxxxxxxx instructed UBSW to purchase on its behalf, the Class A-1
Certificates to be purchased by RBC Xxxx Xxxxxxxx and to issue the Class A-1
Options as set forth in this Agreement.
WHEREAS, as partial consideration for its purchase of each Class A-1
Certificate, UBSW intends to grant (on its behalf and on behalf of RBC Xxxx
Xxxxxxxx) to the Depositor an option to repurchase that Class A-1 Certificate
upon the terms and subject to the conditions set forth in this Agreement; and
WHEREAS, each option relating to a single Class A-1 Certificate is
referred to herein as a "Class A-1 Option," or the "related Class A-1 Option,"
as the context shall require; and
WHEREAS, ownership of the Class A-1 Options granted hereunder shall
be evidenced by one or more option certificates issued hereunder in definitive
physical form, each of which option certificates shall be substantially in the
form attached as Exhibit C, and each of which
option certificates in definitive physical form shall evidence the number of
Class A-1 Options set forth on its face; and
WHEREAS, the Trust Agreement provides that each subsequent purchaser
of a Class A-1 Certificate agrees, by such purchase, to assume the obligation to
perform the related Class A-1 Option, and further agrees to appoint The Bank of
New York as its agent to act on its behalf with respect thereto under this
Agreement and the Trust Agreement; and
WHEREAS, upon each such transfer of a Class A-1 Certificate (and the
automatic assumption of the obligations under the related Class A-1 Option by
the transferee), the transferor of the Class A-1 Certificate shall be released
from its obligation to perform the related Class A-1 Option, and the
transferor's appointment of The Bank of New York as its agent with respect
thereto shall terminate; and
WHEREAS, as partial consideration for its purchase of each Class B-1
Certificate, UBSW intends to grant to the Depositor an option (each, a "Class
B-1 Option") to repurchase that Class B-1 Certificate upon the terms and subject
to the conditions set forth in the Class B-1 Call Option Agreement, dated as of
June 21, 2002 (the "Class B-1 Option Agreement"), among the Depositor, as the
sole initial holder of the Class B-1 Options, UBSW, as the initial purchaser
from the Depositor, and initial and sole holder at the time of execution of such
agreement, of the Class B-1 Certificates, and The Bank of New York, acting as
option agent for the holders of the Class B-1 Certificates from time to time,
which Class B-1 Options shall be granted on terms (other than Call Price)
substantially similar to those contained in this Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
Definitions
Section 1.1 Definitions.
(a) As used in this Agreement, unless the context otherwise
requires, the following terms have the following respective meanings:
"Affiliate" has the meaning specified in the Trust Agreement.
"Agreement" has the meaning specified in the preamble to this
Agreement.
"Business Day" has the meaning specified in the Trust Agreement.
"Call Date" means, with respect to any Class A-1 Option, the date on
which settlement of that Class A-1 Option occurs pursuant to Section 2.2(d).
"Call Notice" has the meaning specified in Section 2.2(b).
"Call Options" means, collectively, the Class A-1 Options and the
Class B-1 Options.
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"Call Price" means, with respect to each Class A-1 Option, an amount
equal to the sum of (i) the outstanding certificate principal balance on the
Call Date of the Class A-1 Certificate subject to such Class A-1 Option, plus
(ii) any accrued and unpaid interest on such Class A-1 Certificate through the
Call Date, plus (iii) if the Call Date occurs prior to June 21, 2007, as a
result of the delivery of a notice of redemption of, tender offer for or other
unscheduled repayment on or repurchase of some or all of the Underlying
Securities, an amount equal to the sum of the present values of the Remaining
Scheduled Interest Payments on each $25 principal amount of the Underlying
Securities due after the Call Date and prior to June 21, 2007, discounted to the
Call Date on a semiannual basis (assuming a 360-day year consisting of twelve
30-day months) at the Treasury Rate with respect to such Call Date, plus 35
basis points.
"Certificate Notional Amount" has the meaning specified in the Trust
Agreement.
"Certificate Principal Balance" has the meaning specified in the
Trust Agreement.
"Certificate Register" has the meaning specified in the Trust
Agreement.
"Certificateholder" means each Person in whose name a Certificate is
registered on the Certificate Register.
"Certificates" means the Class A-1 Certificates and the Class B-1
Certificates.
"Class A-1 Call Option Certificate" has the meaning specified in
Section 2.1.
"Class A-1 Certificates" has the meaning specified in the recitals
to this Agreement.
"Class A-1 Option" has the meaning specified in the recitals to this
Agreement.
"Class B-1 Certificates" has the meaning specified in the recitals
to this Agreement.
"Class B-1 Option" has the meaning specified in the recitals to this
Agreement.
"Class B-1 Option Agreement" has the meaning specified in the
recitals to this Agreement.
"Depositor" has the meaning specified in the preamble to this
Agreement.
"Option Agent" means The Bank of New York, in its capacity as option
agent appointed under this Agreement, or any successor in such capacity.
"Option Holder" means, initially, the Depositor, and thereafter with
respect to each Class A-1 Option, the Person to whom such Class A-1 Option has
been transferred as provided herein.
"Person" means any individual, corporation, estate, limited
liability company, partnership, joint venture, association, joint stock company,
trust (including any trust beneficiary), unincorporated organization or
government or any agency or political subdivision thereof.
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"Protected Purchaser" has the meaning specified in the Uniform
Commercial Code as is in effect in the State of New York.
"Rating Agency" has the meaning specified in the Trust Agreement.
"Remaining Scheduled Interest Payments" means, with respect to any
Call Date, the remaining scheduled payments of interest on the Underlying
Securities that would be due after such Call Date and prior to June 21, 2007
(without taking into account any actual or proposed redemption of, tender offer
for, or other unscheduled repayment or repurchase of the Underlying Securities
for which settlement is made after the Call Date); provided, however, that, if
such Call Date is not an interest payment date with respect to the Underlying
Securities, the amount of the next succeeding scheduled interest payment on the
Underlying Securities will be reduced by the amount of interest accrued on the
Underlying Securities to such Call Date.
"Responsible Officer" has the meaning specified in the Trust
Agreement.
"Securities Act" has the meaning specified in Section 2.4(a).
"Transfer" means, with respect to any Class A-1 Option, the
assignment by the Option Holder of such Class A-1 Option, and "Transferee" and
"Transferor" shall have correlative meanings.
"Transfer Confirmation" has the meaning specified in Section 2.4(c).
"Treasury Rate" means, with respect to any Call Date, a benchmark
U.S. Treasury security rate used to discount future cash flows in connection
with an exercise of Call Options, determined by the Option Agent using the same
methodology that the trustee for the Underlying Securities is required to use
upon a redemption of the Underlying Securities, as such methodology is set forth
in the offering documents for the Underlying Securities, provided that each
reference to the Redemption Date in such provisions shall be deemed to be a
reference to the relevant Call Date.
"Trust" has the meaning specified in the recitals to this Agreement.
"Trust Agreement" has the meaning specified in the recitals to this
Agreement.
"Trustee" means the Trustee from time to time under the Trust
Agreement.
"UBSW" has the meaning specified in the preamble to this Agreement.
"Underlying Securities" means the $50,000,000 principal amount of
7.700% Debentures due 2032 issued by AOL Time Warner Inc., unconditionally
guaranteed by America Online, Inc. and Time Warner Inc. (whose guarantee is in
turn guaranteed by Time Warner Companies, Inc. and Xxxxxx Broadcasting System,
Inc.), deposited in the Trust, exclusive of interest accrued from and including
April 8, 2002, to but excluding the Closing Date (which interest has been
retained by the Depositor), unless the context otherwise requires.
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"Underlying Securities Default" means an Event of Default (as
defined in the Underlying Securities Indenture) under the Underlying Securities,
or any event that, with the giving of notice or passage of time, or both, would
be an Event of Default (as defined in the Underlying Securities Indenture).
"Underlying Securities Indenture" has the meaning specified in the
Trust Agreement.
"Underwriting Agreement" has the meaning specified in the recitals
to this Agreement.
(b) Capitalized terms used but not defined in this Agreement are
used with the respective meanings specified in the Trust Agreement.
Section 1.2 Interpretive Provisions.
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the singular,
and nouns and pronouns of each gender include each of the other genders;
(b) all accounting terms not otherwise defined in this
Agreement have the meanings assigned to them in accordance with generally
accepted accounting principles in the United States;
(c) whenever the words "include," "includes" or "including"
are used in this Agreement, they shall be deemed to be followed by the words
"without limitation";
(d) any reference in this Agreement to any statute, regulation
or agreement is a reference to such statute, regulation or agreement as
supplemented or amended from time to time;
(e) the Article and Section headings in this Agreement are for
convenience only and shall not affect the construction of this Agreement;
(f) when a reference is made in this Agreement to Articles,
Sections, Exhibits or Schedules, such reference is to Articles or Sections of,
or Exhibits or Schedules to, this Agreement; and
(g) all references to a specific time are references to New
York City time.
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ARTICLE II
THE CLASS A-1 OPTIONS
Section 2.1 Grant of Class A-1 Options; Option Holders Are
Beneficiaries.
UBSW, as the initial purchaser from the Depositor, and initial and
sole Certificateholder at the time of execution of this Agreement, of the Class
A-1 Certificates, hereby grants to the Depositor the Class A-1 Options. To
evidence such grant, the Option Agent is hereby directed to concurrently issue
to the Depositor an option certificate in definitive registered physical form (a
"Class A-1 Call Option Certificate") in the Depositor's name in substantially
the form attached as Exhibit C, evidencing two million (2,000,000) Class A-1
Options, and to register the Depositor's ownership of such Class A-1 Options in
the register referred to in Section 2.4(e).
Each Option Holder shall be an express beneficiary of this
Agreement, entitled to enforce this Agreement directly in its own name against
the Option Agent and the Certificateholders holding Class A-1 Certificates.
Section 2.2 Manner of and Conditions to Exercise.
(a) Subject to the terms and conditions of this Agreement, each
Class A-1 Option may be exercised by the relevant Option Holder on any Business
Day occurring (i) at any time on or after June 21, 2007; or (ii) at any time,
whether before or after June 21, 2007, after the occurrence of (A) an Underlying
Securities Default, (B) the Underlying Securities Issuer's announcement of, or
commencement of the formal solicitation of consents to, any amendment to the
Underlying Securities Indenture or the Underlying Securities that changes the
maturity or the scheduled payment date of any principal, interest or other
amount on the Underlying Securities, or reduces the principal amount of or the
interest rate on the Underlying Securities, or changes the currency in which the
principal or interest of the Underlying Securities is payable, or impairs the
right of a holder of the Underlying Securities to institute suit for the
enforcement of any such payment on or after the maturity of the Underlying
Securities, or (C) the delivery by the Underlying Securities Issuer (or any
third party tender offeror, in the case of a tender offer) of a notice of
redemption of, a tender offer for, or other unscheduled repayment on or
repurchase of, some or all of the Underlying Securities held by the Trust. The
parties acknowledge that, under the Trust Agreement, if the Trustee receives any
announcement or proposal of an amendment to the Underlying Securities Indenture
or the Underlying Securities or a notice of a redemption of, tender offer for or
other unscheduled repayment on or repurchase of any Underlying Securities, the
Trustee will be required to deliver a copy of that document to the Option Agent
within two Business Days. The Option Agent agrees to send a copy of each such
document received from the Trustee to the Option Holders on the same day it is
received from the Trustee.
(b) An Option Holder may exercise any Class A-1 Option only upon
satisfaction of each of the following conditions:
(i) Not later than 30 days prior to the proposed Call Date,
the Class A-1 Option Holder shall deliver a notice substantially in
the form attached as Exhibit A (each, a "Call Notice") to each of
the Option Agent and the Trustee specifying the number of
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Class A-1 Options being exercised, the proposed Call Date with
respect to such Class A-1 Options, and the account to which the
Trustee shall deliver the Underlying Securities deliverable pursuant
to Section 2.15 of the Trust Agreement upon exchange of the Class
A-1 Certificates purchased as a result of such exercise; provided,
however, that with respect to any exercise of a Class A-1 Option
pursuant to Section 2.2(a)(ii)(A), (B) or (C), the Call Notice shall
be delivered to the Option Agent and the Trustee not later than
seven Business Days prior to the proposed Call Date.
(ii) Simultaneously with such exercise, the Option Holder
shall exercise Class B-1 Options with respect to a number of Class
B-1 Certificates equal to the number of Class A-1 Options being
exercised.
(iii) The aggregate Certificate Principal Balance of the Class
A-1 Certificates subject to the Class A-1 Options exercised by such
Option Holder on such Call Date shall be an integral multiple of
$1,000.
(iv) (A) As a result of the exercise, the aggregate
Certificate Principal Balance of the Class A-1 Certificates and the
aggregate Certificate Notional Amount of Class B-1 Certificates,
respectively, purchased by the Option Holder is in each case not
less than $5,000,000 (or, if less, the aggregate outstanding
Certificate Principal Balance of all the outstanding Class A-1
Certificates or aggregate outstanding Certificate Notional Amount of
all the outstanding Class B-1 Certificates, as applicable), and (B)
after giving effect to such exercise and the related exchange of
Certificates for Underlying Securities pursuant to Section 2.15 of
the Trust Agreement, (I) unless the Option Holder has exercised all
Call Options held by it, the remaining aggregate Certificate
Principal Balance of Class A-1 Certificates and Certificate Notional
Amount of Class B-1 Certificates subject to options held by such
Option Holder that have not been exercised is in each case not less
than $5,000,000, and (II) the remaining aggregate Certificate
Principal Balance of Class A-1 Certificates and Certificate Notional
Amount of Class B-1 Certificates, if greater than zero, is in each
case not less than $5,000,000.
(v) (A) Unless the Option Holder has exercised the Class A-1
Options in connection with a tender offer, the Option Holder shall
have made payment of the Call Price under all of the exercised Call
Options to the Option Agent, by wire transfer in immediately
available funds, no later than 10:00 a.m. on the proposed Call Date,
and (B) if the Option Holder has exercised the Class A-1 Options in
connection with a tender offer, the Trustee shall have received
payment of the tender price from the Underlying Securities Issuer or
other purchaser of the Underlying Securities relating to the
Certificates subject to all of the exercised Call Options (or with
respect to the portion of the Call Options deemed exercised, if less
than all Underlying Securities tendered by the Trustee pursuant to
Section 2.15 of the Trust Agreement have been purchased), in
immediately available funds, no later than 10:00 a.m. on the later
of (i) the Call Date specified in the Call Notice, or (ii) the
earlier to occur of the date immediately following the date on which
the tender offer is consummated or the date on which it expires
unconsummated.
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If Call Options are held or exercised by two or more Affiliates,
then all Call Options held or exercised by such Affiliates on the same date will
be treated as being held or exercised by a single Option Holder for purposes of
satisfying the conditions listed in clauses (b)(i) through (b)(v) above.
(c) The Option Agent shall notify the Trustee immediately upon its
receipt of a Call Notice. If the number of Class A-1 Certificates specified in
such Call Notice is less than the outstanding number of Class a-1 Certificates,
the Trustee shall select the Class A-1 Certificates to be purchased by the
Option Holder. The Class A-1 Certificates so selected shall be a pro rata
portion of the Class A-1 Certificates held by each Certificateholder, provided
that purchases of a fraction of a single Class A-1 Certificate will not be made,
and the Trustee shall round up or down the number of Class A-1 Certificates to
be purchased from each Certificateholder to avoid such fractional purchases.
(d) On the date specified in the applicable Call Notice, upon
satisfaction of the conditions specified in Section 2.2(b), the Option Agent
shall (x) notify the Trustee of its receipt of the Call Price and the
satisfaction of such conditions and (y) instruct the Trustee to (i) register the
Class A-1 Certificates selected as provided in Section 2.2(c) in the name of the
Option Holder (or, in the case of called Class A-1 Certificates held in
book-entry form, cause such Class A-1 Certificates to be transferred to the
account of the Option Holder) and (ii) exchange the called Class A-1
Certificates, together with the Class B-1 Certificates called pursuant to the
Class B-1 Options on the same Call Date, for an aggregate principal amount of
Underlying Securities equal to the aggregate outstanding Certificate Principal
Balance of such Class A-1 Certificates as provided in Section 2.15 of the Trust
Agreement; and (z) (I) unless the Call Options were exercised in connection with
a tender offer, remit the amount of the Call Price received from the Option
Holders to the Trustee and instruct the Trustee to pay to each Certificateholder
from whom the Class A-1 Certificates were purchased the Call Price in respect of
such Class A-1 Certificates, or (II) if the Call Options were exercised in
connection with a tender offer, pay to the Option Holder the difference between
the tender offer proceeds and the Call Price. The parties acknowledge that the
Call Price for a call in connection with a tender offer shall be deducted from
the proceeds of a tender offer received by the Trustee, and paid to the holders
of the called Certificates, pursuant to Section 2.15(j) of the Trust Agreement.
(e) Delivery of a Call Notice does not give rise to an obligation on
the part of the Option Holder to pay the Call Price. The Call Notice shall
automatically expire (i) if the Call Option is being exercised other than in
connection with a tender offer, and the Option Holder has not paid the Call
Price to the Option Agent by 10:00 a.m. on the Call Date, or (ii) in the case of
a tender offer, if the Trustee has not received payment of the tender offer
proceeds from the Underlying Securities Issuer or other purchaser by 10:00 a.m.
on the later of (A) the date specified for settlement in the Call Notice, or (B)
the earlier to occur of the date immediately following the date on which the
tender offer is consummated or the date on which it expired unconsummated.
Furthermore, if any Class A-1 Call Options are exercised in connection with a
tender offer and fewer than all the Underlying Securities are tendered by the
Trustee as provided in Section 2.15 of the Trust Agreement, or fewer than all
the Underlying Securities tendered by the Trustee pursuant to Section 2.15 of
the Trust Agreement are accepted for payment and paid for under the tender
offer, then the number of Class A-1 Call Options deemed exercised will be
reduced so that the Certificate Principal Balance of the Class A-1 Certificates
subject to such
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exercised Class A-1 Call Options is equal to the principal amount of Underlying
Securities tendered by the Trustee that are accepted for payment and paid for,
and the Class A-1 Call Options deemed not exercised will remain outstanding. In
addition, if the tender offer is terminated by the person making the tender
offer before any Underlying Securities are accepted for payment and paid for, or
if all tenders by the Trustee of Underlying Securities are rejected, then the
applicable Call Notice will be of no further force and effect, and any related
Class A-1 Call Options will be deemed not exercised and will remain outstanding.
If a Call Notice shall expire for any reason provided for in this Section
2.2(e), none of the Option Holder, the Option Agent, the Trustee or any
Certificateholder shall have any obligation with respect to the Call Notice, and
the expiration of a Call Notice shall in no way affect the Option Holder's right
to deliver a Call Notice at a later date.
Section 2.3 Legends on Certificates.
Each Class A-1 Certificate shall bear a legend notifying any
Certificate Holder of the existence and terms of the Class A-1 Option to which
that Class A-1 Certificate is subject, in substantially the following form:
BY ACQUIRING OR ACCEPTING ANY INTEREST IN THIS CERTIFICATE, YOU
ACKNOWLEDGE THAT THIS CERTIFICATE IS SUBJECT TO A PURCHASE OPTION
GRANTED TO CORPORATE ASSET BACKED CORPORATION, A DELAWARE
CORPORATION (THE "DEPOSITOR"), BY UBS WARBURG LLC UNDER THE CLASS
A-1 CALL OPTION AGREEMENT, DATED AS OF JUNE 21, 2002 (THE "CALL
OPTION AGREEMENT"), AMONG THE DEPOSITOR, AS THE SOLE INITIAL OPTION
HOLDER, UBS WARBURG LLC, AS THE INITIAL PURCHASER FROM THE
DEPOSITOR, AND SOLE HOLDER AT THE TIME OF SUCH GRANT, OF THE CLASS
A-1 CERTIFICATES, AND THE BANK OF NEW YORK, A NEW YORK BANKING
CORPORATION, ACTING AS OPTION AGENT FOR THE CLASS A-1
CERTIFICATEHOLDERS WITH RESPECT TO THE CLASS A-1 OPTIONS (THE
"OPTION AGENT"), WHICH OBLIGATIONS HAVE BEEN ASSUMED BY EACH
SUBSEQUENT HOLDER OF SUCH CLASS A-1 CERTIFICATES; YOU AGREE TO
ASSUME THE OBLIGATION OF YOUR TRANSFEROR TO PERFORM SUCH CLASS A-1
OPTION; AND YOU ACKNOWLEDGE THAT YOUR TRANSFEROR HAS BEEN RELEASED
FROM ITS OBLIGATION TO PERFORM SUCH CLASS A-1 OPTION. THE CALL
OPTION AGREEMENT PERMITS THE HOLDER OF THE RELATED CLASS A-1 OPTION
TO PURCHASE THIS CERTIFICATE FROM YOU, WITHOUT YOUR CONSENT, AT THE
TIMES AND ON THE CONDITIONS SPECIFIED IN THE CALL OPTION AGREEMENT
AT THE CALL PRICE SPECIFIED IN THAT AGREEMENT. THE CLASS A-1 OPTION
MAY BE TRANSFERRED FROM TIME TO TIME. UPON THE EXERCISE OF THE
RELATED CLASS A-1 OPTION IN THE MANNER SPECIFIED IN THE CALL OPTION
AGREEMENT, THE CLASS A-1
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CERTIFICATE WILL BE TRANSFERRED TO THE RELEVANT CLASS A-1 OPTION
HOLDER BY THE TRUSTEE, AND YOU WILL BE PAID THE CALL PRICE FOR THIS
CERTIFICATE IN ACCORDANCE WITH THE TERMS OF THE CALL OPTION
AGREEMENT, WITHOUT THE REQUIREMENT OF ANY FURTHER ACTION BY YOU,
EXCEPT THAT IF THE CLASS A-1 CERTIFICATES ARE HELD IN DEFINITIVE
FORM AT SUCH TIME YOU WILL NOT RECEIVE SUCH CALL PRICE UNLESS AND
UNTIL YOU SURRENDER THIS CERTIFICATE.
Section 2.4 Transfer of Class A-1 Options.
(a) Each of the parties to this Agreement acknowledges that the
Class A-1 Options are being issued in a transaction exempt from registration
under the U.S. Securities Act of 1933, as amended (the "Securities Act") and
that the Class A-1 Options have not been and will not be registered under the
Securities Act or any applicable state securities law of any state and may not
be offered, sold, pledged or otherwise transferred except in a transaction
registered pursuant to the Securities Act or exempt from registration under the
Securities Act, and otherwise in accordance with the terms of this Agreement.
(b) Promptly following the sale of the Class A-1 Certificates to
UBSW pursuant to the Underwriting Agreement and the related grant of the Class
A-1 Options to the Depositor as provided in Section 2.1, and in any event within
45 days thereafter, the Depositor shall sell 100% of the Class A-1 Options to
one or more unaffiliated third parties through UBSW as agent pursuant to the
Placement Agency Agreement, dated June 14, 2002, between the Depositor and UBSW.
Subject to the terms and conditions set forth in this Article II, each Option
Holder may Transfer some or all of the Class A-1 Options it holds to one or more
other Persons at any time and from time to time, provided that under no
circumstances may any Class A-1 Option be re-Transferred to the Depositor.
(c) The Transfer of any Class A-1 Option shall be effected by the
delivery of the relevant Class A-1 Call Option Certificate to the Transferee, or
to the Option Agent for registration in the name of the Transferee as set forth
in Section 2.4(e) hereof, in each case with a form of assignment executed by the
Transferor and the execution and delivery by the Transferor, the Transferee and
the Option Agent of a confirmation substantially in the form attached as Exhibit
B (a "Transfer Confirmation").
(d) Each Class A-1 Option may be Transferred only in full. No
fractional interest in a Class A-1 Option may be Transferred, and no interest in
a Class A-1 Option may be transferred except in connection with a Transfer of
all the rights and obligations of the Option Holder under and in respect of the
Class A-1 Option.
(e) The Option Agent shall keep a register in which it shall provide
for the registration of the Class A-1 Options and the registration of transfers
of the Class A-1 Options. The Option Agent shall record in such register (w) the
name and registered address of each Option Holder, (x) the number of Class A-1
Options held by each Option Holder, (y) the Transfer of any Class A-1 Options,
and (z) the number of Class A-1 Options exercised by each
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Option Holder and the number of Call Options cancelled as provided in Section
2.5. The Trustee and the Option Agent may treat the Person in whose name any
Class A-1 Option is registered on such register as the owner of that Class A-1
Option for all purposes, and the Trustee and the Option Agent shall not be
affected by any notice to the contrary.
Section 2.5 Pro Rata Reduction of Class A-1 Options Upon Partial
Redemption of Underlying Securities.
If Underlying Securities are redeemed in part by the Underlying
Securities Issuer and the Option Holders do not exercise Call Options with
respect to all the Underlying Securities redeemed in such partial redemption,
the number of Class A-1 Options held by each Option Holder shall be reduced
proportionately so that the aggregate amount of Class A-1 Certificates callable
by the exercise of Class A-1 Options shall equal the outstanding Certificate
Principal Balance of outstanding Class A-1 Certificates after giving effect to
such partial redemption. The Option Agent shall make such adjustments to its
records as shall be necessary to reflect such reductions and shall notify each
Option Holder of such adjustments.
Section 2.6 Expiration.
The Class A-1 Options shall expire, and the right to exercise the
Class A-1 Options shall terminate, on the earlier to occur of (a) the
termination of the Trust Agreement, and (b) the liquidation of the Trust.
Section 2.7. Mutilated, Destroyed, Lost or Stolen Class A-1 Call
Option Certificates.
(a) If (i) any Class A-1 Call Option Certificate that has been
mutilated is surrendered to the Option Agent, or the Option Agent receives
evidence to its satisfaction of the destruction, loss or theft of any Class A-1
Call Option Certificate, and (ii) there is delivered to the Option Agent such
security or indemnity as may be required by it to hold it harmless, then, in the
absence of notice to the Option Agent that such Class A-1 Call Option
Certificate has been acquired by a Protected Purchaser, the Option Agent shall
execute on behalf of the Certificateholders holding Class A-1 Certificates, and
shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Class A-1 Call Option Certificate, a
replacement Class A-1 Call Option Certificate in respect of a like aggregate
Certificate Principal Balance of Class A-1 Certificates.
(b) If, after the delivery of a replacement Class A-1 Call Option
Certificate in respect of a mutilated, destroyed, lost or stolen Class A-1 Call
Option Certificate pursuant to Section 2.7(a), a Protected Purchaser of the
original Class A-1 Call Option Certificate in lieu of which such replacement
Class A-1 Call Option Certificate was issued exercises such original Class A-1
Call Option Certificate, the Option Agent shall be entitled to recover such
replacement Class A-1 Call Option Certificate from the Person to whom it was
delivered or any Person taking such replacement Class A-1 Call Option
Certificate from such Person to whom such replacement Class A-1 Call Option
Certificate was delivered or any assignee of such Person, except a Protected
Purchaser, and shall be entitled to recover upon the security or indemnity
provided
11
therefor to the extent of any loss, damage, cost or expense incurred by the
Option Agent in connection with such exercise.
(c) In connection with the issuance of any replacement Class A-1
Call Option Certificate under this Section 2.7, the Option Agent may require the
payment by the holder of the Class A-1 Call Option Certificate of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other reasonable expenses (including the fees and
expenses of the Option Agent) connected therewith.
(d) Any Class A-1 Call Option Certificate issued pursuant to this
Section 2.7 in replacement of any mutilated, destroyed, lost or stolen Class A-1
Call Option Certificate shall be entitled to all the benefits of this Agreement
equally and proportionately with any and all other Class A-1 Call Option
Certificates duly issued hereunder.
(e) The provisions of this Section 2.7 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement of mutilated, destroyed, lost or stolen Class A-1 Call Option
Certificates.
Section 2.8. Representations and Warranties of UBSW.
UBSW represents and warrants to and agrees with the Depositor and
the Option Agent as of the date of this Agreement and as of the time of delivery
of the Class A-1 Call Option Certificates by the Option Agent to the Depositor
that each of the execution of this Agreement, and the grant of the Class A-1
Options and the direction to the Option Agent to issue the Class A-1 Call Option
Certificates in the manner provided for in Section 2.1 of this Agreement, has
been duly authorized by UBSW.
Section 2.9. Representations and Warranties of the Depositor.
The Depositor represents and warrants to and agrees with UBSW and
the Option Agent as of the date of this Agreement and as of the time of delivery
of the Class A-1 Call Option Certificates by the Option Agent to the Depositor
that each of the execution of this Agreement and the receipt by the Depositor of
the Class A-1 Options, is within the corporate power and authority of the
Depositor.
ARTICLE III
OPTION AGENT
Section 3.1 Limitation on Liability.
The Option Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in connection with
its administration of the Class A-1 Options in reliance upon any instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement or other paper or
12
document in good faith believed by it to be genuine and to be signed, executed
and, where necessary, verified and acknowledged, by the proper Person or
Persons.
Section 3.2 Duties of Option Agent.
The Option Agent undertakes only the specific duties and obligations
imposed under this Agreement upon the following terms and conditions, by all of
which the Depositor, each Option Holder and each Certificateholder shall be
bound:
(a) The Option Agent may consult with legal counsel (who may be
legal counsel for the Depositor or any of its Affiliates), and the opinion of
such counsel shall be full and complete authorization and protection to the
Option Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion, provided the Option Agent shall have exercised
reasonable care in the selection by it of such counsel.
(b) Whenever in the performance of its duties under this Agreement,
the Option Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Depositor or the Trustee prior to taking or
suffering any action under this Agreement, such fact or matter may be deemed to
be conclusively proved and established by a Depositor Order or a certificate
signed by a Responsible Officer of the Trustee and delivered to the Option
Agent; and such certificate shall be full authorization to the Option Agent for
any action taken or suffered in good faith by it under this Agreement in
reliance upon such certificate.
(c) The Option Agent shall be liable under this Agreement only for
its own negligence, willful misconduct or bad faith.
(d) The Option Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Depositor only.
(e) The Option Agent shall not have any responsibility in respect of
and makes no representation as to the validity of the Class A-1 Options or the
execution and delivery of this Agreement (except the due execution of this
Agreement by the Option Agent); nor shall it be responsible for any breach by
the Trustee or any Option Holder of any covenant or condition contained in this
Agreement; nor shall it by any act under this Agreement be deemed to make any
representation or warranty as to the Certificates or the Underlying Securities.
(f) The Option Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties under this Agreement
from the Chairman of the Board, the Chief Executive Officer, the Chief Financial
Officer, the Chief Operating Officer, the President, a Vice President, a Senior
Vice President, a Managing Director, the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary of the Depositor, and any Responsible
Officer of the Trustee, and to apply to such officers for advice or instructions
in connection with its duties, and it shall not be liable for any action taken
or suffered to be taken by it in good faith in accordance with instructions of
any such officer.
13
(g) The Option Agent and any shareholder, director, officer or
employee of the Option Agent may buy, sell or deal in any of the Class A-1
Options, the Class B-1 Options or the Certificates or otherwise act as fully and
freely as though it were not Option Agent under this Agreement, so long as such
persons do so in full compliance with all applicable laws and, to the extent
applicable, the Trust Agreement. Nothing in this Agreement shall preclude The
Bank of New York from acting in any other capacity for the Trust, the Depositor
or for any other legal entity.
(h) The Option Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty under this Agreement either
itself or by or through its attorneys or agents.
(i) The Option Agent shall act solely as the agent of the Option
Holders under this Agreement. The Option Agent shall not be liable except for
the failure to perform such duties as are specifically set forth in this
Agreement, and no implied covenants or obligations shall be read into this
Agreement against the Option Agent, whose duties shall be determined solely by
the express provisions of this Agreement. The Option Agent shall not be deemed
to be a fiduciary of any other person.
(j) The Option Agent shall not be under any obligation or duty to
institute, appear in or defend any action, suit or legal proceeding in respect
of this Agreement, unless first indemnified to its satisfaction, but this
provision shall not affect the power of the Option Agent to take such action as
the Option Agent may consider proper, whether with or without such indemnity.
The Option Agent shall promptly notify the Depositor and the Trustee in writing
of any claim made or action, suit or proceeding instituted against it arising
out of or in connection with this Agreement.
Section 3.3 Change of Option Agent.
(a) The Option Agent may resign and be discharged from its duties
under this Agreement upon thirty days' notice in writing mailed to the Depositor
and the Trustee by registered or certified mail, and to the Option Holders by
first-class mail at the expense of the Depositor; provided that no such
resignation or discharge shall become effective until a successor Option Agent
shall have been appointed under this Agreement. The Depositor may remove the
Option Agent upon three Business Days' notice in writing, mailed to the Option
Agent and to the Option Holders by first-class mail; provided that no such
removal shall become effective until a successor Option Agent shall have been
appointed under this Agreement.
(b) If the Option Agent shall resign or be removed or shall
otherwise become incapable of acting, the Depositor shall promptly appoint a
successor to the Option Agent. If the Depositor shall fail to make such
appointment of a permanent successor within a period of thirty (30) days after
such removal or within sixty (60) days after notification in writing of such
resignation or incapacity by the resigning or incapacitated Option Agent or by
the Option Holder, then the Option Agent or any registered Option Holder may
apply to any court of competent jurisdiction for the appointment of such a
successor.
14
(c) Any entity which may be merged or consolidated with or which
shall otherwise succeed to substantially all of the trust or agency business of
the Option Agent shall be deemed to be the successor Option Agent without any
further action.
(d) The Option Agent shall at all times be a bank that is not an
Affiliate of the Depositor (but may have normal banking relationships with the
Depositor or the Underlying Securities Issuer and its respective Affiliates),
which (i) is organized and doing business under the laws of any State or the
United States; (ii) is authorized under such laws to exercise corporate trust
powers; (iii) has a combined capital and surplus of at least $50,000,000; (iv)
is subject to supervision or examination by federal or state authority; and (v)
has (or has a parent which has) a long-term unsecured debt rating of at least
BBB- by Standard & Poor's Ratings Services, a Division of The XxXxxx-Xxxx
Companies, Inc. and at least Baa3 by Xxxxx'x Investors Service, Inc., or their
respective successors, if any. If the bank publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purpose of this Section 3.3(d),
the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Option Agent shall cease to be eligible in
accordance with the provisions of this Section 3.3(d), the Option Agent shall
resign immediately in the manner and with the effect specified in Section
3.3(a).
ARTICLE IV
MISCELLANEOUS
Section 4.1 Remedies.
The remedies at law of the Option Holder in the event of any default
or threatened default by a Certificate Holder in the performance of or
compliance with any of the terms of this Agreement are not and will not be
adequate and, to the full extent permitted by law, such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained in this Agreement or by an injunction against a violation of any of
the terms of this Agreement or otherwise.
Section 4.2 Limitation on Liabilities of Option Holder.
Nothing contained in these Class A-1 Options shall be construed as
imposing any obligation on any Option Holder to exercise any Class A-1 Option or
to purchase any of the Class A-1 Certificates.
Section 4.3 Notices.
All notices and other communications under this Agreement shall be
in writing and shall be delivered, or mailed by registered or certified mail,
return receipt requested, by a nationally recognized overnight courier, postage
prepaid, addressed (a) if to any Option Holder, at the registered address of
such Option Holder as set forth in the register kept by the Option Agent
pursuant to Section 2.4(e), or (b) if to the Option Agent, to The Bank of New
York, 0 Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust, or to
such other address notice of which the Option Agent shall have given to the
Option Holder and the Trustee, or (c) if
15
to the Trust or the Trustee, to the Corporate Trust Office specified in the
Trust Agreement. Any such notice shall be effective on the Business Day
following the date on which it is provided to a nationally recognized overnight
courier and on the fifth Business Day following the day on which it is deposited
in the mails, in each case as provided above. Subject to Section 2.2(a), the
Option Agent shall promptly forward to each Option Holder a copy of any notice
or other communication received by it under this Agreement.
Section 4.4 Amendment.
(a) This Agreement may be amended from time to time by the Depositor
and the Option Agent without the consent of any Option Holder, upon receipt of
an opinion of counsel satisfactory to the Option Agent that the execution of the
amendment is authorized or permitted by this Agreement and all conditions
provided for in this Agreement relating to such amendment have been complied
with and that such amendment would not alter the status of the Trust as a
grantor trust under the Internal Revenue Code of 1986, as amended, for any of
the following purposes: (i) to cure any ambiguity or to correct or supplement
any provision in this Agreement that may be defective or inconsistent with any
other provision in this Agreement or to provide for any other terms or modify
any other provisions with respect to matters or questions arising under this
Agreement that shall not adversely affect in any material respect the interests
of any Option Holder or any holder of a Class A-1 Certificate or alter the terms
on which the Class A-1 Options are exercisable or the amounts payable upon
exercise of an Class A-1 Option or (ii) to evidence and provide for the
acceptance of appointment under this Agreement of a successor Option Agent.
(b) This Agreement may also be modified or amended from time to time
by the Depositor and the Option Agent with the consent of Option Holders holding
662/3% of the Class A-1 Options, upon receipt of an opinion of counsel
satisfactory to the Option Agent that the execution of the amendment is
authorized or permitted by this Agreement and all conditions provided for in
this Agreement relating to such amendment have been complied with, for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement or the Class A-1 Options or modifying in any
manner the rights of the Option Holders; provided, however, that no such
amendment shall (i) adversely affect in any material respect the interests of
the holders of the Class A-1 Certificates without (x) the consent of all the
holders of the Class A-1 Certificates and (y) written confirmation from each of
the Rating Agencies that such amendment will not result in a downgrading or
withdrawal of its rating of the Class A-1 Certificates, if then rated by the
Rating Agencies; (ii) alter the terms on which the Class A-1 Options are
exercisable or the amounts payable upon exercise of an Class A-1 Option without
the consent of the holders of all the Class A-1 Certificates and all the Class
A-1 Options; or (iii) reduce the modify the vote required by clause (i) or (ii)
of this proviso without the consent of the holders of 100% of the Class A-1
Certificates. Notwithstanding any other provision of this Agreement, this
Section 4.4(b) shall not be amended without the consent of 100% of the Class A-1
Option Holders.
(c) Promptly after the execution of any amendment or modification to
this Agreement, the Option Agent shall furnish a copy of such amendment or
modification to each Option Holder, to the Trustee and to the Rating Agencies.
It shall not be necessary for the consent of the Option Holders or the Class A-1
Certificates to approve the particular form of any
16
proposed amendment or modification, but it shall be sufficient if such consent
shall approve the substance of such amendment or modification. The manner of
obtaining and evidencing the authorization of the execution of such consents
shall be subject to such reasonable regulations as the Option Agent may
prescribe.
Section 4.5 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REFERENCE TO ANY CONFLICT OF LAW PROVISIONS, OTHER
THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW.
Section 4.6 Judicial Proceedings.
Any judicial proceeding brought against any party with respect to
this Agreement may be brought in any court of competent jurisdiction in the
County of New York, State of New York or of the United States of America for the
Southern District of New York and, by execution and delivery of this Agreement
or acceptance of a Class A-1 Certificate, as applicable, each party (a) accepts,
generally and unconditionally, the nonexclusive jurisdiction of such courts and
any related appellate court, and agrees that such party shall be bound by any
judgment rendered thereby in connection with this Agreement, subject to any
rights of appeal, and (b) irrevocably waives any objection that such party may
now or hereafter have as to the venue of any such suit, action or proceeding
brought in such a court or that such court is an inconvenient forum.
Section 4.7 Nonpetition Covenant.
Each of the Option Agent and each Option Holder agrees that it shall
not (and, in the case of the Option Holder, that it shall not direct the Option
Agent to), until the date which is one year and one day after the payment in
full of all securities issued by the Trust, the Depositor or other trusts
formed, established or settled by the Depositor, acquiesce, petition or
otherwise invoke or cause the Trust, the Depositor, or any such other trust to
invoke the process of the United States of America or any State or other
political subdivision of the United States or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government for the purpose of commencing or sustaining a case by or against
the Trust, the Depositor or any such other trust under a federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Trust, the Depositor or any such other trust or all or any part of the property
or assets of the Trust, the Depositor or any such other trust or ordering the
winding up or liquidation of the affairs of the Trust, the Depositor or any such
other trust.
Section 4.8 No Recourse.
Each of the Option Agent and each Option Holder agrees that it shall
not have any recourse to the Trust for any amounts due under this Agreement.
This Section 4.8 shall not affect any rights or remedies that an Option Holder
may have against the Option Agent or the Certificateholders hereunder.
Section 4.9 New Issuances.
17
The Depositor agrees that it shall not cause the Trust to issue
additional Certificates unless it obtains from the holders of such Certificates
options on substantially the same terms as the Class A-1 Options and the Class
B-1 Options, as the case may be, and either (x) it resells such options to the
then-current holders of the Class A-1 Options and the Class B-1 Options, in
proportion to their holdings of Class A-1 Options and Class B-1 Options, as
applicable, or to such Persons' designees, or (y) takes such measures as shall
be necessary to ensure that the issuance of such additional Certificates does
not impair the right of the holder of any Class A-1 Option to exercise such
Class A-1 Option on the terms set forth in this Agreement.
18
EXHIBIT 10.1
IN WITNESS WHEREOF, the parties hereto have caused this Class A-1
Call Option Agreement to be executed by their duly authorized officers as of the
first date specified above.
CORPORATE ASSET BACKED CORPORATION,
as sole initial Option Holder
By: /s/ Xxxxxx Xxxxxxxxxx
--------------------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Vice President
UBS WARBURG LLC
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Director
Fixed Income Syndicate
By: /s/ Xxxx X. XxXxxx
--------------------------------------------
Name: Xxxx X. XxXxxx
Title: Managing Director
Fixed Income Syndicate
THE BANK OF NEW YORK, as Option Agent and
Attorney-in-Fact for the Option Holders
By: /s/ Xxxxxxx Xxxx-Soon
--------------------------------------------
Name: Xxxxxxx Xxxx-Soon
Title: Assistant Vice-President
EXHIBIT 10.1
EXHIBIT A
[Form of Call Notice]
CLASS A-1 CALL NOTICE
To: The Bank of New York, as Option Agent
0 Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust
This Call Notice is delivered pursuant to the Class A-1 Call Option
Agreement, dated as of June 21, 2002 (the "Class A-1 Call Option Agreement"),
among Corporate Asset Backed Corporation, a Delaware corporation (the
"Depositor"), as the sole initial Option Holder, UBS Warburg LLC, as the initial
purchaser from the Depositor, and initial and sole holder, at the time of
execution of the Class A-1 Call Option Agreement, of the Class A-1 Certificates,
and The Bank of New York, a New York banking corporation, acting as Option Agent
for the holders of Class A-1 Certificates from time to time (the "Option
Agent").
The undersigned registered holder of ____ Class A-1 Options hereby
exercises Class A-1 Options for the purchase of Class A-1 Certificates upon and
subject to the terms specified in the Class A-1 Call Option Agreement.
Subject to the satisfaction of the conditions specified in the Class
A-1 Call Option Agreement, the Call Date in respect of the Class A-1 Options so
exercised shall be: ___________________ (which date shall be at least 30 days
after the date of delivery of this Call Notice or, if this Call Notice is
delivered with respect to any exercise of an Class A-1 Option pursuant to
Section 2.2(a)(ii)(B) or (C), at least 7 Business Days after the date of
delivery of this Call Notice).
The undersigned hereby agrees that (i) if the Call Option is being
exercised other than in connection with a tender offer, and the undersigned has
paid the Call Price to the Option Agent by 10:00 a.m. (New York City time) on
the Call Date, or (ii) in the case of a tender offer, if the Trustee has
received payment of the Call Price from the Underlying Securities Issuer or
other purchaser by 10:00 a.m. (New York City time) on the later of (A) the date
specified for settlement in the Call Notice, or (B) the earlier to occur of the
date immediately following the date on which the tender offer is consummated or
the date on which it expires unconsummated, the undersigned will have purchased
the Class A-1 Certificates deliverable pursuant to such Class A-1 Options at the
time such payment is made. The aggregate Call Price in respect of such Class A-1
Options shall be _________________) (insert number calculated in accordance with
the definition of "Call Price" in the Class A-1 Call Option Agreement).
The undersigned requests that the Underlying Securities deliverable
in exchange for the Class A-1 Certificates purchased in such exercise be
transferred to the following account in accordance with the following
instructions:__________________________________________________________________
_______________________________________________________________________________
(insert information required for transfer of Underlying Securities).
2
All capitalized terms used but not defined in this Call Notice shall
have the meanings assigned to such terms in the Class A-1 Call Option Agreement,
and this Call Notice is subject to the terms and conditions of that Agreement.
Dated:
[NAME OF OPTION HOLDER]
By
----------------------------
Name:
Title:
3
EXHIBIT B
[Form of Transfer Confirmation]
CLASS A-1 TRANSFER CONFIRMATION
This Transfer Confirmation is delivered pursuant to the Class A-1
Call Option Agreement, dated as of June 21, 2002 (the "Class A-1 Call Option
Agreement"), among Corporate Asset Backed Corporation, a Delaware corporation
(the "Depositor"), as the sole initial Option Holder, UBS Warburg LLC, as the
initial purchaser from the Depositor, and initial and sole holder, at the time
of execution of the Class A-1 Call Option Agreement, of the Class A-1
Certificates, and The Bank of New York, a New York banking corporation, acting
as Option Agent for the holders of Class A-1 Certificates from time to time (the
"Option Agent").
[Name of Transferor] (the "Transferor") and [Name of Transferee]
(the "Transferee") hereby instruct the Option Agent to register a transfer (the
"Transfer") of _________ [Must be whole number] Class A-1 Options on the books
of the Option Agent maintained for such purpose.
As a condition to such Transfer, the Transferee hereby represents
and warrants to, and agrees with, the Transferor, the Option Agent and the
Trustee referred to in the Class A-1 Call Option Agreement, for the benefit of
the Trust referred to therein, that:
(1) The Transferee acknowledges that the Class A-1 Options
have not been and will not be registered under the Securities Act of 1933, as
amended (the "Securities Act"), or any state securities laws, and may not be
offered or sold in the United States except in accordance with an exemption
under the Securities Act.
(2) The Transferee is a "qualified institutional buyer" within
the meaning of Rule 144A under the Securities Act;
(3) [With respect to any initial Transfer from the Depositor
only: Such information regarding the Class A-1 Options, the Trust and the Class
A-1 Certificates as the Transferee has required is, or has been made, available
to it and it has been afforded the opportunity to ask questions and receive
answers concerning the terms and conditions of the Class A-1 Options, and to
obtain such additional information as the Transferor possesses or can acquire
without unreasonable effort or expense that is necessary to verify the accuracy
of such information;]
(4) The Transferee agrees that the Class A-1 Options may be
offered, resold, pledged or otherwise transferred only (A) to a person who the
seller reasonably believes is a "qualified institutional buyer" within the
meaning of Rule 144A under the Securities Act that purchases for its own account
or for the account of a qualified institutional buyer, pursuant to an exemption
from registration under the Securities Act, and in compliance with applicable
state securities laws, and (B) in compliance with the securities laws of each
other applicable jurisdiction;
(5) Neither the Transferee, nor any person acting on its
behalf, has offered the Class A-1 Options for sale, or solicited any offer to
buy the Class A-1 Options by means of any form of general solicitation or
general advertising, including but not limited to the methods described in Rule
502(c) under the Securities Act or in any other manner that would render the
issuance and sale of the Class A-1 Options a violation of the Securities Act or
require registration pursuant to the Securities Act;
(6) The Transferee will notify, and cause each subsequent transferee
of the Class A-1 Options to agree to notify, each subsequent holder of the Class
A-1 Options of the restrictions referred to in paragraph (4) above.
The address to which any notices addressed to the Transferee should
be addressed is as follows: _______________________________________.
All capitalized terms used but not defined in this Transfer
Confirmation are used with the meanings specified in the Class A-1 Call Option
Agreement, and this Transfer Confirmation is subject to the terms and conditions
of that Agreement.
This Transfer Confirmation shall be governed by and construed in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties have signed their names as of the
date set forth below.
[NAME OF TRANSFEROR],
as Transferor
By
----------------------------
Name:
Title:
[NAME OF TRANSFEROR],
as Transferor
By
----------------------------
Name:
Title:
THE BANK OF NEW YORK, as
Option Agent
By
----------------------------
Name:
Title:
2
EXHIBIT C
Option Certificate
for
CLASS A-1 OPTIONS
relating to Class A-1 Certificates issued by
CABCO SERIES 2002-1 TRUST (AOL TIME WARNER INC.)
THESE CALL OPTIONS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EXEMPTION UNDER SUCH ACT. THE CALL OPTIONS REPRESENTED HEREBY MAY
BE TRANSFERRED ONLY IN COMPLIANCE WITH THE CONDITIONS SPECIFIED IN THE CALL
OPTION AGREEMENT (AS DEFINED BELOW).
Class A-1 Call Options
[-] Call Options
(Each Call Option relates to $25 principal amount of Class A-1 Certificates)
No. O-[-] June -, 2002
In connection with CABCO Series 2002-1 Trust (AOL Time Warner Inc.)
(the "Trust"), a trust created under the laws of the State of New York pursuant
to the Trust Agreement, dated as of June 21, 2002 (the "Trust Agreement"),
between Corporate Asset Backed Corporation, a Delaware corporation (the
"Depositor") and The Bank of New York, a New York banking corporation, as
trustee (the "Trustee") and option agent, for value received, this Option
Certificate certifies that [-] or registered assigns, is entitled to purchase,
in whole or part, [-] 7.625% Class A-1 Certificates issued by CABCO Series
2002-1 Trust (AOL Time Warner Inc.) on any Call Date designated by the holder of
these options (these "Call Options") at a purchase price equal to the Call
Price, all subject to the terms and conditions of the Class A-1 Call Option
Agreement, dated as of June 21, 2002 (the "Call Option Agreement"), among the
Depositor, as the sole initial Option Holder, UBS Warburg LLC, as the initial
purchaser from the Depositor, and sole holder at the time of execution of the
Call Option Agreement, of the Class A-1 Certificates, and the Option Agent.
Certain capitalized terms used in this Option Certificate are
defined in the Call Option Agreement and capitalized terms used but not defined
herein or therein shall have the respective meanings set forth in the Trust
Agreement.
Each of (i) the Option Holder, by its acceptance hereof, and (ii)
the Option Agent agrees, that, without affecting any rights or remedies that the
Option Holder may have against the Option Agent or any Certificateholders under
the Call Option Agreement, it shall not have any recourse to the Trust for any
amount due under these Class A-1 Options.
THE BANK OF NEW YORK,
as Option Agent
By:_______________________________
Authorized Signatory
2
Exhibit D
FORM OF ASSIGNMENT
[To be executed only upon transfer of these Class A-1 Options]
For value received, the undersigned registered holder of these Class
A-1 Options hereby sells, assigns and transfers unto _____________ Class A-1
Options [Must be whole number] to purchase Class A-1 Certificates, and appoints
an Attorney to make such transfer on the books of the Option Agent maintained
for such purpose, with full power of substitution in the premises. The
undersigned hereby certifies that it has executed, together with its transferee
and the Option Agent, a Class A-1 Transfer Confirmation in the form attached to
the Class A-1 Call Option Agreement in connection with such transfer.
Dated:
(Signature must conform in all respects to name of holder as
specified on the face of these Call Options)
(Street Address)
(City State) (Zip Code)
Signed in the presence of:
3
