SERIES SUPPLEMENT
CORPORATE BACKED TRUST CERTIFICATES
ROYAL & SUN ALLIANCE BOND-BACKED SERIES 2002-11 TRUST
between
XXXXXX ABS CORPORATION,
as Depositor,
and
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee,
CORPORATE BACKED TRUST CERTIFICATES
Dated as of June 7, 2002
Table of Contents
Page
----
Section 1. Incorporation of Standard Terms..................................1
Section 2. Definitions......................................................1
Section 3. Designation of Trust and Certificates............................7
Section 4. Trust Certificates..............................................10
Section 5. Distributions...................................................10
Section 6. Trustee's Fees..................................................13
Section 7. Optional Call; Optional Exchange................................13
Section 8. Notices of Events of Default....................................17
Section 9. Miscellaneous...................................................18
Section 10. Governing Law..................................................21
Section 11. Counterparts...................................................21
Section 12. Termination of the Trust.......................................21
Section 13. Sale of Underlying Securities; Optional Exchange...............22
Section 14. Amendments.....................................................22
Section 15. Voting of Underlying Securities, Modification of Indenture.....22
Section 16. Additional Depositor Representation............................23
SCHEDULE I .........SERIES 2002-11 UNDERLYING SECURITIES SCHEDULE
EXHIBIT A-1 .........FORM OF TRUST CERTIFICATE CLASS A-1
EXHIBIT A-2 .........FORM OF TRUST CERTIFICATE CLASS A-2
EXHIBIT B .........FORM OF WARRANT AGENT AGREEMENT
EXHIBIT C .........FORM OF INVESTMENT LETTER
i
SERIES SUPPLEMENT
CORPORATE BACKED TRUST CERTIFICATES
ROYAL & SUN ALLIANCE BOND-BACKED SERIES 2002-11 TRUST
SERIES SUPPLEMENT, Royal & Sun Alliance Bond-Backed Series
2002-11, dated as of June 7, 2002 (the "Series Supplement"), by and between
XXXXXX ABS CORPORATION, as Depositor (the "Depositor"), and U.S. BANK TRUST
NATIONAL ASSOCIATION, as Trustee (the "Trustee").
W I T N E S S E T H:
WHEREAS, the Depositor desires to create the Trust designated
herein (the "Trust") by executing and delivering this Series Supplement, which
shall incorporate the terms of the Standard Terms for Trust Agreements, dated
as of January 16, 2001 (the "Standard Terms" and, together with this Series
Supplement, the "Trust Agreement"), by and between the Depositor and the
Trustee, as modified by this Series Supplement;
WHEREAS, the Depositor desires to deposit into the Trust the
Underlying Securities set forth on Schedule I attached hereto (the "Underlying
Securities Schedule") the general terms of which are described in the
Prospectus Supplement under the heading "Description of the Deposited Assets -
Underlying Securities";
WHEREAS, in connection with the creation of the Trust and the
deposit therein of the Underlying Securities, it is desired to provide for the
issuance of trust certificates evidencing undivided interests in the Trust and
call warrants related thereto; and
WHEREAS, the Trustee has joined in the execution of the Standard
Terms and this Series Supplement to evidence the acceptance by the Trustee of
the Trust.
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual covenants expressed herein, it is hereby agreed by and between the
Depositor and the Trustee as follows:
Section 1. Incorporation of Standard Terms. Except as otherwise
provided herein, all of the provisions of the Standard Terms are hereby
incorporated herein by reference in their entirety, and this Series Supplement
and the Standard Terms shall form a single agreement between the parties. In
the event of any inconsistency between the provisions of this Series
Supplement and the provisions of the Standard Terms, the provisions of this
Series Supplement will control with respect to the Royal & Sun Alliance
Bond-Backed Series 2002-11 Certificates and the transactions described herein.
Section 2. Definitions.
(a) Except as otherwise specified herein or as the context may
otherwise require, the following terms shall have the respective meanings set
forth below for all purposes under this Series Supplement. (Section 2(b) below
sets forth terms listed in the Standard Terms which are
1
not applicable to this Series.) Capitalized terms used but not defined herein
shall have the meanings assigned to them in the Standard Terms.
"Available Funds" shall have the meaning specified in the
Standard Terms.
"Business Day" shall mean any day other than (i) Saturday and
Sunday or (ii) a day on which banking institutions in New York City, New York
are authorized or obligated by law or executive order to be closed for
business or (iii) a day that is not a business day for the purposes of the
Indenture.
"Call Date" shall mean any Business Day (i) on or after June 7,
2007, (ii) after the Underlying Securities Issuer announces that it will
redeem (in whole or in part) or otherwise make an unscheduled payment on the
Underlying Securities, (iii) after the Trustee notifies the Certificateholders
of any proposed sale of the Underlying Securities pursuant to the provisions
of this Series Supplement or (iv) on which a tender offer for some or all of
the Underlying Securities is consummated.
"Call Notice" shall have the meaning specified in Section 1.1 of
the Warrant Agent Agreement.
"Call Price" shall mean, for each related Call Date, (i) in the
case of the Class A-1 Certificates, 100% of the outstanding Certificate
Principal Balance of the Class A-1 Certificates being purchased pursuant to
the exercise of the Call Warrants, plus any accrued and unpaid interest on
such amount to but excluding the Call Date and (ii) in the case of the Class
A-2 Certificates, the present value of all amounts that would otherwise have
been payable on the Class A-2 Certificates being purchased pursuant to the
exercise of the Call Warrants for the period from the related Call Date to the
Final Scheduled Distribution Date using a discount rate of 9.50% per annum,
assuming no delinquencies, deferrals, redemptions or prepayments on the
Underlying Securities shall occur after the related Call Date.
"Call Warrants" shall have the meaning specified in Section 3
hereof.
"Called Certificates" shall have the meaning specified in
Section 1.1 (b) of the Warrant Agent Agreement.
"Certificates" shall have the meaning specified in Section 3
hereof.
"Class A-1 Allocation" shall mean the sum of the present values
(discounted at the rate of 7.70% per annum) of (i) any unpaid interest due or
to become due on the Class A-1 Certificates and (ii) the outstanding
Certificate Principal Balance of the Class A-1 Certificates (in each case
assuming that the Class A-1 Certificates were paid when due and were not
redeemed prior to their stated maturity).
"Class A-1 Certificates" shall mean the Certificates, in the
form attached hereto as Exhibit A-1, to be issued by the Trust representing a
proportionate undivided beneficial ownership interest in certain distributions
to be made by the Trust and having the characteristics described herein and in
the Certificates.
2
"Class A-2 Allocation" shall mean the present value (discounted
at the rate of 7.70% per annum) of any unpaid amounts due or to become due on
the outstanding notional amount of the Class A-2 Certificates (assuming that
the Class A-2 Certificates were paid when due and were not redeemed prior to
their stated maturity).
"Class A-2 Certificates" shall mean the Certificates, in the
form attached hereto as Exhibit A-2, to be issued by the Trust representing a
proportionate undivided beneficial ownership interest in certain distributions
to be made by the Trust and having the characteristics described herein and in
the Certificates.
"Closing Date" shall mean June 7, 2002.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collection Period" shall mean, (i) with respect to each October
Distribution Date, the period beginning on the day after the April
Distribution Date of such year and ending on such October Distribution Date,
inclusive and, (ii) with respect to each April Distribution Date, the period
beginning on the day after the October Distribution Date of the prior year and
ending on such April Distribution Date, inclusive; provided, however, that
clauses (i) and (ii) shall be subject to Section 9(f) hereof.
"Corporate Trust Office" shall mean the office of U.S. Bank
Trust National Association located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000.
"Currency" shall mean United States Dollars.
"Depository" shall mean The Depository Trust Company, its
nominees and their respective successors.
"Distribution Date" shall mean April 15th and October 15th of
each year (or if such date is not a Business Day, the next succeeding Business
Day), commencing on October 15, 2002, and ending on the earlier of the Final
Scheduled Distribution Date and any date on which all Underlying Securities
are redeemed pursuant to the Indenture or prepaid or liquidated in whole for
any reason other than at their maturity.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Event of Default" shall mean (i) a default in the payment of
any interest on any Underlying Security after the same becomes due and payable
(subject to any applicable grace period), (ii) a default in the payment of the
principal of or any installment of principal of any Underlying Security when
the same becomes due and payable, and (iii) any other event specified as an
"Event of Default" in the Indenture.
"Exchange Act" shall mean the Securities and Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.
3
"Final Scheduled Distribution Date" shall mean October 15, 2029,
or, if such day is not a Business Day, the next succeeding Business Day.
"Indenture" shall mean the indenture, dated as of September 30,
1999, between the Underlying Securities Issuer, Royal & Sun Alliance Insurance
plc and the Underlying Securities Trustee, pursuant to which the Underlying
Securities were issued.
"Interest Accrual Period" shall mean for any Distribution Date,
the period from and including the preceding Distribution Date (or in the case
of the first Interest Accrual Period, from and including June 7, 2002) to but
excluding the current Distribution Date.
"Liquidation Price" shall mean the price at which the Trustee
sells the Underlying Securities.
"Maturity Date" shall have the meaning specified in Schedule I
hereto.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Optional Call" shall mean the call of the Certificates by the
Warrant Holder, in whole or in part, resulting from the exercise of Call
Warrants by the Warrant Holder, pursuant to Section 7(d) hereof.
"Optional Exchange" shall mean the exchange of the Certificates
by the Trust for the Underlying Securities pursuant to Section 7(a) hereof.
"Optional Exchange Date" shall mean any date on which Underlying
Securities subject to Optional Exchange are distributed to a
Certificateholder.
"Ordinary Expenses" shall mean the Trustee's ordinary expenses
and overhead in connection with its services as Trustee, including the items
referred to in the definition of Ordinary Expenses in the Standard Terms.
"Plan" means (a) an employee benefit plan (as defined in Section
3(3) of ERISA), (b) a plan described in Section 4975(e)(1) of the Code or (c)
any entity whose underlying assets are treated as assets of any such plan by
reason of such plan's investment in the entity.
"Prepaid Ordinary Expenses" shall be zero for this Series.
"Prospectus Supplement" shall mean the Prospectus Supplement,
dated May 30, 2002, relating to the Certificates.
"QIB" shall have the meaning set forth in Section 3(e) hereof.
"Rating Agency" shall mean Moody's and S&P.
"Record Date" shall mean, with respect to each Distribution
Date, the day immediately preceding the related Distribution Date.
4
"Required Percentage-Amendment" shall be 66-2/3% of the
aggregate Voting Rights, unless the subject amendment requires the vote of
holders of only one class of Certificates pursuant to the Standard Terms, in
which case 66-2/3% of the Voting Rights of such Class.
"Required Percentage-Direction of Trustee" shall be 66-2/3% of
the aggregate Voting Rights.
"Required Percentage-Remedies" shall be 66-2/3% of the aggregate
Voting Rights.
"Required Percentage-Removal" shall be 66-2/3% of the aggregate
Voting Rights.
"Required Rating" shall mean, in the case of Moody's, the rating
assigned to the Underlying Securities by Moody's as of the Closing Date, and,
in the case of S&P, the rating assigned to the Underlying Securities by S&P as
of the Closing Date.
"Resale Restriction Termination Date" shall have the meaning set
forth in Section 3(e) hereof.
"Rule 144A" shall have the meaning set forth in Section 3(e)
hereof.
"S&P" shall mean Standard & Poor's Ratings Services, a division
of The XxXxxx-Xxxx Companies, Inc.
"Securities Act" shall mean the United States Securities Act of
1933, as amended.
"Series" shall mean Royal & Sun Alliance Bond-Backed Series
2002-11.
"Special Distribution Date" shall have the meaning specified in
Section 5 hereof.
"Trustee Fee" shall mean the amount paid to the Trustee by the
Depositor on the Closing Date.
"Trust Property" shall mean the Underlying Securities described
on Schedule I hereto, the Certificate Account and any additional Underlying
Securities sold to the Trust pursuant to Section 3(d) hereof.
"Underlying Securities" shall mean $66,816,000 aggregate
principal amount of 8.95% Subordinated Guaranteed Bonds due October 15, 2029,
issued by the Underlying Securities Issuer, as set forth in Schedule I
attached hereto (subject to Section 3(d) hereof).
"Underlying Securities Issuer" shall mean Royal & Sun Alliance
Insurance Group plc.
"Underlying Securities Trustee" shall mean Citibank, N.A.
"Underwriters" shall mean Xxxxxx Brothers Inc., First Union
Securities, Inc., RBC Xxxx Xxxxxxxx Inc. and Prudential Securities
Incorporated.
5
"Voting Rights" shall be allocated between the holders of the
Class A-1 Certificates and the holders of the Class A-2 Certificates, pro
rata, in proportion to the ratio of the Class A-1 Allocation to the Class A-2
Allocation. The Class A-1 Voting Rights will be allocated among Class A-1
Certificateholders in proportion to the then unpaid Certificate Principal
Balances of their respective Certificates and the Class A-2 Voting Rights will
be allocated among all Class A-2 Certificateholders in proportion to the then
outstanding notional amounts of their respective Certificates.
"Warrant Agent" shall mean initially, U.S. Bank Trust National
Association.
"Warrant Agent Agreement" shall mean that certain Warrant Agent
Agreement, dated as of the date hereof, between the Depositor and U.S. Bank
Trust National Association, as Warrant Agent and as Trustee, as the same may
be amended from time to time.
"Warrant Holder" shall mean the holder of a Call Warrant.
(b) The terms listed below are not applicable to this Series.
"Accounting Date"
"Administrative Fees"
"Advance"
"Allowable Expense Amounts"
"Basic Documents"
"Calculation Agent"
"Call Premium Percentage"
"Credit Support"
"Credit Support Instrument"
"Credit Support Provider"
"Cut-off Date"
"Eligible Expense"
"Eligible Investment"
"Exchange Rate Agent"
"Fixed Pass-Through Rate"
"Floating Pass-Through Rate"
6
"Guaranteed Investment Contract"
"Letter of Credit"
"Limited Guarantor"
"Limited Guaranty"
"Minimum Wire Denomination"
"Pass-Through Rate"
"Place of Distribution"
"Purchase Price"
"Required Premium"
"Required Principal"
"Requisite Reserve Amount"
"Retained Interest"
"Sale Procedures"
"Sub-Administration Account"
"Sub-Administration Agreement"
"Sub-Administration Agent"
"Surety Bond"
"Swap Agreement"
"Swap Counterparty"
"Swap Distribution Amount"
"Swap Guarantee"
"Swap Guarantor"
"Swap Receipt Amount"
"Swap Termination Payment"
Section 3. Designation of Trust and Certificates. The Trust created
hereby shall be known as the "Corporate Backed Trust Certificates, Royal & Sun
Alliance Bond-Backed Series
7
2002-11 Trust." The Certificates evidencing certain undivided ownership
interests therein shall be known as "Corporate Backed Trust Certificates,
Royal & Sun Alliance Bond-Backed Series 2002-11." The Certificates shall
consist of the Class A-1 Certificates and the Class A-2 Certificates
(together, the "Certificates"). The Trust is also issuing call warrants with
respect to the Certificates ("Call Warrants").
(a) The Certificates shall be held through the Depository in
book-entry form and shall be substantially in the forms attached hereto as
Exhibits A-1 and A-2. The Class A-1 Certificates shall be issued in
denominations of $25. The Class A-2 Certificates shall be issued in minimum
notional denominations of $100,000 and integral multiples of $1 in excess
thereof; provided, however, that on any Call Date on which a Warrant Holder
shall concurrently exchange Called Certificates for a distribution of
Underlying Securities in accordance with the provisions of Section 7 hereof,
Called Certificates may be issued in other denominations. Except as provided
in the Standard Terms and in paragraph (d) in this Section, the Trust shall
not issue additional Certificates or additional Call Warrants or incur any
indebtedness.
(b) The Class A-1 Certificates consist of 2,672,640 Certificates
having an initial aggregate certificate principal amount (the "Certificate
Principal Balance") of $66,816,000. The Class A-2 Certificates are
interest-only Certificates, and shall have an initial aggregate notional
amount equal to the initial Certificate Principal Balance of the Class A-1
Certificates.
(c) The holders of the Class A-1 Certificates will be entitled to
receive on each Distribution Date the interest, if any, received on the
Underlying Securities, to the extent necessary to pay interest at a rate of
7.70% per annum on the outstanding Certificate Principal Balance of the Class
A-1 Certificates. The holders of the Class A-2 Certificates will be entitled
to receive on each Distribution Date the interest, if any, received on the
Underlying Securities, to the extent necessary to pay interest at a rate of
1.25% per annum on the outstanding notional amount of the Class A-2
Certificates. On the Distribution Date occuring in October 2002, the Trustee
will pay to the Depositor the amount of interest accrued and paid on the
Underlying Securities from April 15, 2002, to but not including the Closing
Date; provided, however, that in the event an Optional Exchange Date shall
occur prior to October 15, 2002, a pro rata portion of such amount shall be
paid to the Depositor on the Optional Exchange Date in accordance with the
provisions of Section 7(b)(ix) hereof. If Available Funds are insufficient to
pay such amount, the Trustee will pay the Depositor its pro rata share, based
on the ratio the amount owed to the Depositor bears to all amounts owed on the
Certificates in respect of accrued interest, of any proceeds from the recovery
on the Underlying Securities.
(d) The Depositor may sell to the Trustee additional Underlying
Securities on any date hereafter upon at least 3 Business Days' notice to the
Trustee (or such shorter period as shall be mutually satisfactory to the
Depositor and the Trustee) and upon (i) satisfaction of the Rating Agency
Condition and (ii) delivery of an Opinion of Counsel to the effect that the
sale of such additional Underlying Securities will not cause the Trust to be
taxed as an association or publicly traded partnership taxable as a
corporation for federal income tax purposes. Each condition to be satisfied
with respect to a sale of Underlying Securities on or prior to the Closing
Date shall be satisfied with respect to a sale of additional Underlying
Securities no later than the date of sale thereof, each representation and
warranty set forth in the Standard Terms to be made on the Closing Date shall
be made on such date of sale, and from and after such date of sale, all
8
Underlying Securities held by the Trustee shall be held on the same terms and
conditions. Upon such sale to the Trustee, the Trustee shall deposit such
additional Underlying Securities in the Certificate Account, and shall
authenticate and deliver to the Depositor, on its order, Class A-1
Certificates in a Certificate Principal Balance, and Class A-2 Certificates in
a notional amount, equal to the principal amount of such additional Underlying
Securities, and the Call Warrants related thereto. Any such additional Class
A-1 Certificates and Class A-2 Certificates authenticated and delivered shall
have the same terms and rank pari passu with the corresponding classes of
Certificates previously issued in accordance with this Series Supplement.
(e) No Class A-2 Certificate may be offered, resold, assigned or
otherwise transferred (including by pledge or hypothecation) at any time prior
to (x) the date which is two years or such shorter period of time as permitted
by Rule 144(k) under the Securities Act after the later of the original issue
date of such Class A-2 Certificates and the last date on which the Depositor
or any "affiliate" (as defined in Rule 144 under the Securities Act) of the
Depositor was the owner of such Class A-2 Certificates (or any predecessor
thereto) or (y) such later date, if any, as may be required by a change in
applicable securities laws (the "Resale Restriction Termination Date") unless
such offer, resale, assignment or transfer is (i) to the Trust, (ii) pursuant
to an effective registration statement under the Securities Act, (iii) to a
qualified institutional buyer (a "QIB"), as such term is defined in Rule 144A
promulgated under the Securities Act ("Rule 144A"), in accordance with Rule
144A or (iv) pursuant to another available exemption from registration
provided under the Securities Act, and, in each of cases (i) through (iv), in
accordance with any applicable securities laws of any state of the United
States and other jurisdictions. Prior to any offer, resale, assignment or
transfer of any Class A-2 Certificates in the manner described in clause (iii)
above, the prospective transferee and the prospective transferor shall be
required to deliver to the Trustee an executed copy of an Investment Letter
with respect to the Class A-2 Certificates to be transferred substantially in
the form of Exhibit C hereto. Prior to any offer, resale, assignment or
transfer of any Class A-2 Certificates in the manner described in clause (iv)
above, the prospective transferee and the prospective transferor shall be
required to deliver to the Trustee documentation certifying that the offer,
resale, assignment or transfer complies with the provisions of said clause
(iv). In addition to the foregoing, each prospective transferee of any Class
A-2 Certificates in the manner contemplated by clause (iii) above shall
acknowledge, represent and agree as follows:
(1) The transferee (x) is a QIB, (y) is aware that the sale to it
is being made in reliance on Rule 144A and (z) is acquiring
such Class A-2 Certificates for its own account or for the
account of a QIB.
(2) The transferee understands that the Class A-2 Certificates are
being offered in a transaction not involving any public
offering in the United States within the meaning of the
Securities Act, and that the Class A-2 Certificates have not
been and will not be registered under the Securities Act.
(3) The transferee agrees that (A) if in the future it decides to
offer, resell, pledge or otherwise transfer the Class A-2
Certificates prior to the Resale Restriction Termination Date,
such Class A-2 Certificates shall only be offered, resold,
assigned or otherwise transferred (i) to the Trust, (ii)
pursuant to an effective registration statement under the
Securities Act, (iii) to a QIB, in accordance with
9
Rule 144A or (iv) pursuant to another available exemption from
registration provided under the Securities Act, and, in each of
cases (i) through (iv), in accordance with any applicable
securities laws of any state of the United States and other
jurisdictions and (B) the transferee will, and each subsequent
holder is required to, notify any subsequent purchaser of such
Class A-2 Certificates from it of the resale restrictions
referred to in clause (A) above.
(f) The Class A-2 Certificates will, unless otherwise agreed by the
Depositor and the Trustee, bear a legend substantially to the following
effect:
"THIS CLASS A-2 CERTIFICATE (OR ITS PREDECESSOR) HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT
WHILE A REGISTRATION UNDER SUCH ACT IS IN EFFECT OR PURSUANT TO
AN EXEMPTION THEREFROM UNDER SUCH ACT. THE CLASS A-2
CERTIFICATE REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF THE SERIES SUPPLEMENT.
EACH PURCHASER OF THIS CLASS A-2 CERTIFICATE IS HEREBY NOTIFIED
THAT THE SELLER OF THIS CLASS A--2 CERTIFICATE MAY BE RELYING
ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER."
Section 4. Trust Certificates. The Trustee hereby acknowledges
receipt, on or prior to the Closing Date, of:
(a) the Underlying Securities set forth on Schedule I hereto; and
(b) all documents required to be delivered to the Trustee pursuant to
Section 2.01 of the Standard Terms.
Section 5. Distributions.
(a) Except as otherwise provided in Sections 3(c), 5(c), 5(d) and
5(i) on each applicable Distribution Date (or such later date as specified in
Section 9(f)), the Trustee shall apply Available Funds in the Certificate
Account as follows:
(i) The Trustee will pay the interest portion of Available
Funds:
(1) first, to the Trustee, as reimbursement for any
Extraordinary Trust Expenses incurred by the Trustee in
accordance with Section 6(b) below and approved by 100% of the
Certificateholders; and
10
(2) second, to the holders of the Class A-1 Certificates
and to the holders of the Class A-2 Certificates, interest
accrued and unpaid on each such Class, pro rata in proportion
to their entitlements thereto.
(ii) the Trustee will pay the principal portion of Available
Funds:
(1) first, to the Trustee, as reimbursement for any
remaining Extraordinary Trust Expenses incurred by the Trustee
in accordance with Section 6(b) below and approved by 100% of
the Certificateholders; and
(2) second, to the holders of the Class A-1 Certificates,
the Certificate Principal Balance of the Class A-1
Certificates.
Any portion of the Available Funds (i) that does not constitute principal of,
or interest on, the Underlying Securities, (ii) that is not received in
connection with a redemption, prepayment or liquidation of the Underlying
Securities and (iii) for which allocation by the Trustee is not otherwise
contemplated by this Series Supplement, shall be remitted by the Trustee to
the Depositor.
(b) [Reserved].
(c) Notwithstanding the foregoing, if the Underlying Securities are
redeemed, prepaid or liquidated in whole or in part for any reason other than
due to the occurrence of an Underlying Securities Event of Default, the
cessation of the Underlying Securities Issuer to file periodic reports as
required by the Exchange Act or at their maturity, the Trustee shall apply
Available Funds in the manner described in Section 5(h) in the following order
of priority:
(i) first, to the Trustee, as reimbursement for any
Extraordinary Trust Expenses incurred by the Trustee in
accordance with Section 6(b) below and approved by 100% of
the Certificateholders;
(ii) second, to the holders of the Class A-1 Certificates, an
amount equal to the principal amount of Underlying
Securities so redeemed, prepaid or liquidated plus accrued
and unpaid interest on the amount of Class A-1
Certificates so redeemed;
(iii) third, to the holders of the Class A-2 Certificates, the
present value of all amounts that would otherwise have
been payable on the Class A-2 Certificates for the period
from the date of such redemption or prepayment to the
Final Scheduled Distribution Date using a discount rate of
7.70% per annum, assuming no delinquencies, deferrals,
redemptions or prepayments on the Underlying Securities;
and
(iv) fourth, any remainder to the holders of the Class A-1
Certificates and the Class A-2 Certificates pro rata in
proportion to the ratio of the Class A-1 Allocation to the
Class A-2 Allocation.
11
(d) Notwithstanding the foregoing, if the Underlying Securities are
redeemed, prepaid or liquidated in whole or in part due to the occurrence of
an Underlying Securities Event of Default, the Trustee shall apply Available
Funds to the holders of the Class A-1 Certificates and the holders of the
Class A-2 Certificates in accordance with the ratio of the Class A-1
Allocation to the Class A-2 Allocation.
(e) Unless otherwise instructed by holders of Certificates
representing a majority of the Voting Rights, thirty (30) days after giving
notice pursuant to Section 8 hereof, the Trustee shall sell the Underlying
Securities pursuant to Section 13 hereof and deposit the Liquidation Proceeds,
if any, into the Certificate Account for distribution not later than two (2)
Business Days after the receipt of immediately available funds in accordance
with Section 5(d) hereof provided, however, that if any Warrant Holder
designates any day on or prior to the proposed sale date as a Call Date and
Optional Exchange Date pursuant to Section 7, the portion of Underlying
Securities related to such Optional Exchange shall not be sold but shall be
distributed to the Warrant Holder pursuant to Section 7 and the Warrant Agent
Agreement.
(f) If the Trustee receives non-cash property in respect of the
Underlying Securities as a result of a payment default on the Underlying
Securities (including from the sale thereof), the Trustee will promptly give
notice to the Depository, or for any Certificates which are not then held by
DTC or any other depository, directly to the registered holders of the
Certificates then outstanding and unpaid and to the Warrant Agent. Such notice
shall state that the Trustee shall and the Trustee shall, not later than 30
days after the receipt of such property, allocate and distribute such property
to the holders of Class A-1 Certificates and Class A-2 Certificates then
outstanding and unpaid (after deducting the costs incurred in connection
therewith) in accordance with Section 5(d) hereof. Property other than cash
will be liquidated by the Trustee, and the proceeds thereof distributed in
cash, only to the extent necessary to avoid distribution of fractional
securities to Certificateholders. In-kind distribution of such property to
Certificateholders, based on the market value of such property as of the date
of distribution to Certificateholders, will be deemed to reduce the
Certificate Principal Balance of the Class A-1 Certificates on a
dollar-for-dollar basis. The outstanding notional amount of the Class A-2
Certificates shall be reduced, pro rata among all Class A-2
Certificateholders, by an amount equal to the amount by which the Certificate
Principal Balance of the Class A-1 Certificates is reduced.
(g) Subject to Section 9(f) hereof, to the extent Available Funds are
insufficient to make any scheduled interest or principal payments on any class
of Certificates on any Distribution Date, any shortfall will be carried over
and will be distributed on the next Distribution Date (or date referred to in
Section 5(h) hereof) on which sufficient funds are available to pay such
shortfall.
(h) If a payment with respect to the Underlying Securities is made to
the Trustee in connection with redemption, prepayment or liquidation, in whole
or in part, of the Underlying Securities for any reason other than due to the
occurrence of an Event of Default, the cessation of the Underlying Securities
Issuer to file periodic reports as required by the Exchange Act or at their
maturity, the Trustee will distribute any such amounts received in accordance
with Section 5(c) on the next occurring Business Day (a "Special Distribution
Date") as if the funds had constituted Available Funds on the Distribution
Date immediately preceding such Special
12
Distribution Date; provided, however, that the Record Date for such Special
Distribution Date shall be one Business Day prior to the day on which the
related payment was received with respect to the Underlying Securities.
(i) Notwithstanding Section 3.12 of the Standard Terms, if the
Underlying Securities Issuer ceases to file periodic reports as required under
the Exchange Act, the Depositor shall within a reasonable time instruct the
Trustee to (i) notify the Warrant Agent that the Underlying Securities are
proposed to be sold and that any Call Warrants and related Optional Exchange
rights must be exercised no later than the date specified in the notice (which
shall be not less than ten Business Days after the date of such notice) and
(ii) to the extent that the Warrant Holders fail to exercise their Call
Warrants and related Optional Exchange rights on or prior to such date, to
sell the Underlying Securities and distribute the proceeds of such sale to the
Certificateholders in accordance with the following order of priority: first,
to the Trustee, as reimbursement for any Extraordinary Trust Expenses incurred
by the Trustee in accordance with Section 6(b) below and approved by 100% of
the Certificateholders; and second, any remainder to the holders of the Class
A-1 Certificates and the Class A-2 Certificates pro rata in proportion to the
ratio of the Class A-1 Allocation to the Class A-2 Allocation; provided,
however, the Depositor shall not instruct the Trustee to sell the Underlying
Securities (or provide a notice of such instruction to the Warrant Agent)
pursuant to this clause unless the Underlying Securities Issuer has either (x)
stated in writing that it intends permanently to cease filing reports required
under the Exchange Act or (y) failed to file any required reports for one full
calendar year.
(j) On any date on which Underlying Securities are redeemed, prepaid
or liquidated for any reason, the aggregate outstanding notional amount of the
Class A-2 Certificates shall be reduced by an amount equal to the principal
amount of the Underlying Securities so redeemed, prepaid or liquidated, the
reduction to be allocated pro rata among all Class A-2 Certificates.
Section 6. Trustee's Fees.
(a) As compensation for its services hereunder, the Trustee shall be
entitled to the Trustee Fee. The Trustee Fee shall be paid by the Depositor
and not from Trust Property. The Trustee shall bear all Ordinary Expenses.
Failure by the Depositor to pay such amount shall not entitle the Trustee to
any payment or reimbursement from the Trust, nor shall such failure release
the Trustee from the duties it is required to perform under the Trust
Agreement.
(b) Extraordinary Expenses shall not be paid out of the Trust
Property unless all the holders of the Class A-1 Certificates and Class A-2
Certificates then outstanding have directed the Trustee to incur such
Extraordinary Expenses. The Trustee may incur other Extraordinary Expenses if
any lesser percentage of the Certificateholders requesting such action
pursuant hereto reimburse the Trustee for the cost thereof from their own
funds in advance. If Extraordinary Expenses are not approved unanimously as
set forth in the first sentence of this Section 6(b), such Extraordinary
Expenses shall not be an obligation of the Trust, and the Trustee shall not
file any claim against the Trust therefor notwithstanding failure of
Certificateholders to reimburse the Trustee.
Section 7. Optional Call; Optional Exchange.
13
(a) On (A) any Distribution Date, (B) any date on which a tender
offer for some or all of the Underlying Securities is consummated or (C) any
date on which the Underlying Securities are to be redeemed by the Underlying
Securities Issuer, any holder of Class A-1 Certificates and Class A-2
Certificates and the related Call Warrants, if Call Warrants related to such
Certificates are outstanding, may exchange such Certificates and, if
applicable, Call Warrants, for a distribution of Underlying Securities
representing the same percentage of the Underlying Securities as such
Certificates represent of all outstanding Certificates. On any Call Date, any
Warrant Holder may exchange Called Certificates for a distribution of
Underlying Securities representing the same percentage of Underlying
Securities as such Called Certificates represent of all outstanding
Certificates; provided that any such exchange shall either (x) result from an
exercise of all Call Warrants owned by such Warrant Holder or (y) occur on a
Call Date on which such Warrant Holder, alone or together with one or more
other Warrant Holders, shall exchange Called Certificates relating to
Underlying Securities having an aggregate principal amount equal to or in
excess of the product of (i) 0.1 and (ii) the aggregate principal amount of
the Underlying Securities deposited into the Trust on the Closing Date.
(b) The following conditions shall apply to any Optional Exchange.
(i) A notice specifying the number of Certificates being
surrendered and the Optional Exchange Date shall be delivered to the
Trustee no less than 5 days (or such shorter period acceptable to
the Trustee) but not more than 30 days before the Optional Exchange
Date; provided that for an Optional Exchange to occur on a Call
Date, unless otherwise specified therein, the Call Notice shall be
deemed to be the notice required hereunder.
(ii) Certificates and, if applicable, the Call Warrants, shall
be surrendered to the Trustee no later than 10:00 a.m. (New York
City time) on the Optional Exchange Date; provided that for an
Optional Exchange to occur on a Call Date, payment of the Call Price
to the Warrant Agent pursuant to Section 1.1(a)(iii) of the Warrant
Agent Agreement shall satisfy the requirement to surrender
Certificates.
(iii) Class A-1 Certificates and Class A-2 Certificates
representing a like percentage of all Class A-1 Certificates and
Class A-2 Certificates shall be surrendered.
(iv) The Trustee shall have received an opinion of counsel
stating that the Optional Exchange would not cause the Trust to be
treated as an association or publicly traded partnership taxable as
a corporation for federal income tax purposes.
(v) If the Certificateholder is the Depositor or any Affiliate
of the Depositor, (1) the Trustee shall have received a
certification from the Certificateholder that any Certificates being
surrendered have been held for at least six months, and (2) the
Certificates being surrendered may represent no more than 5% (or 25%
in the case of Certificates acquired by the Underwriters but never
distributed to investors) of the then outstanding Certificates.
(vi) The Trustee shall not be obligated to determine whether an
Optional Exchange complies with the applicable provisions for
exemption under Rule 3a-7 of the
14
Investment Company Act of 1940, as amended, or the rules or
regulations promulgated thereunder.
(vii) The provisions of Section 4.07 of the Standard Terms
shall not apply to an Optional Exchange pursuant to this Section
7(b). This Section 7(b) shall not provide any person with a lien
against, an interest in or a right to specific performance with
respect to the Underlying Securities; provided that satisfaction of
the conditions set forth in this Section 7(b) shall entitle the
Certificateholder or Warrant Holder, as applicable, to a
distribution thereof.
(viii) The aggregate principal amount of Certificates exchanged
in connection with any Optional Exchange pursuant to this Section
shall be in an amount that will entitle the Certificateholders
thereof to Underlying Securities in an even multiple of the minimum
denomination of such Underlying Securities.
(ix) In the event such Optional Exchange shall occur prior to
October 15, 2002, the Certificateholders shall have paid to the
Trustee, for distribution to the Depositor, on the Optional Exchange
Date an amount equal to the sum obtained by multiplying the amount
of accrued interest on the Underlying Securities from April 15, 2002
through, but excluding, the Closing Date by a fraction, the
numerator of which shall be the number of Certificates being
exchanged on such Optional Exchange Date and the denominator of
which shall be the total number of Certificates.
(c) Concurrently with the execution of this Series Supplement, the
Trustee, on behalf of the Trust, shall execute the Warrant Agent Agreement and
the Call Warrants, dated as of the date hereof and substantially in the form
of Exhibit B hereto, initially evidencing all of the Call Warrants. The
Trustee shall perform the Trust's obligations under the Warrant Agent
Agreement and the Call Warrants in accordance with their respective terms.
(d) Call Warrants may be exercised by the Warrant Holder in whole or
in part on any Call Date. In addition to the conditions set forth in Section
1.1 of the Warrant Agent Agreement, the following conditions shall apply to
any Optional Call.
(i) An opinion of counsel to the Warrant Holder shall have been
delivered to the Rating Agencies, in form satisfactory to the Rating
Agencies, indicating that payment of the Call Price shall not be
recoverable as a preferential transfer or fraudulent conveyance
under the United States Bankruptcy Code. Such opinion may contain
customary assumptions and qualifications.
(ii) The Warrant Holder shall have provided a certificate of
solvency to the Trustee.
(iii) Upon receipt of a Call Notice, the Trustee shall provide
a conditional call notice to the Depository not less than 3 Business
Days prior to the Call Date.
(iv) Delivery of a Call Notice does not give rise to an
obligation on the part of the Warrant Holder to pay the Call Price.
If, by 10:00 a.m. (New York City time) on the Call Date, the Warrant
Xxxxxx has not paid the Call Price, except in connection with a
15
Call Notice relating to a tender offer for the Underlying
Securities; then the Call Notice shall automatically expire and none
of the Warrant Holder, the Warrant Agent or the Trustee shall have
any obligation with respect to the Call Notice. The expiration of a
Call Notice shall in no way affect the Warrant Xxxxxx's right to
deliver a Call Notice at a later date. The Call Price for a call in
connection with a tender offer shall be deducted from the proceeds
of a tender offer by the Trust pursuant to Section 7(g)(iii).
(v) Subject to receipt of the Call Price, the Trustee shall pay
the Call Price to the Certificateholders on the Call Date. The Call
Price for each Class of Certificates in respect of partial calls
shall be allocated pro rata to the Certificateholders of such Class.
(vi) The Trustee shall not consent to any amendment or
modification of this Agreement (including the Standard Terms) which
would adversely affect the Warrant Holders (including, without
limitation, any alteration of the timing or amount of any payment of
the Call Price or any other provision of this Agreement in a manner
adverse to the Warrant Holders) without the prior written consent of
100% of the Warrant Holders. For purposes of this clause, no
amendment, modification or supplement required to provide for any
purchase by the Trustee of additional Underlying Securities and
authentication and delivery by the Trustee of additional
Certificates and Call Warrants pursuant to Section 3(d) shall be
deemed to adversely affect the Warrant Holders.
(vii) The Trustee shall not be obligated to determine whether
an Optional Call complies with the applicable provisions for
exemption under Rule 3a-7 of the Investment Company Act of 1940, as
amended, or the rules or regulations promulgated thereunder.
(e) This Section 7 shall not provide the Warrant Holder with a lien
against, an interest in or a right to specific performance with respect to the
Underlying Securities; provided that satisfaction of the conditions set forth
in Section 7(b) shall entitle the Certificateholders or the Warrant Holders,
as applicable, to a distribution of the Underlying Securities.
(f) The rights of the Certificateholders under the Trust Agreement
and the Certificates are limited by the terms, provisions and conditions of
the Trust Agreement, the Warrant Agent Agreement and the Call Warrants with
respect to the exercise of the Call Warrants by the Warrant Holder. The
Certificateholders, by their acceptance of Certificates, covenant and agree to
tender any and all Called Certificates to the Trustee upon the Warrant
Holder's exercise of Call Warrants and payment of the Call Price for such
Certificates in accordance with the provisions hereof and of the Warrant Agent
Agreement.
(g) (i) If the Trustee receives notice of a tender offer for some or
all of the Underlying Securities, the Trustee shall within one Business Day
notify the Warrant Agent and forward to the Warrant Agent copies of all
materials received by the Trustee in connection therewith. If the Trustee
receives a Call Notice from any Warrant Holder no later than five Business
Days prior to the expiration of the tender offer acceptance period that such
Warrant Holder desires to exercise all or a portion of its Call Warrants in
connection with the consummation of any such tender offer, then the Trustee
shall tender, in compliance with the tender offer requirements, an amount of
Underlying Securities equal to the amount of Underlying
16
Securities that would be distributable to the Warrant Holder with respect to
an Optional Exchange of the Called Certificates called by such Warrant Holder;
provided that any Optional Call or Optional Exchange undertaken in connection
with any such tender offer shall be subject to the provisions of Section 7
hereof.
(ii) The Call Date and Optional Exchange Date for any exercise
of Call Warrants in connection with a tender offer shall be deemed
to be the Business Day on which such Underlying Securities are
accepted for payment and paid for.
(iii) The Call Price shall be deducted from the tender offer
proceeds and paid to Certificateholders in connection with Section
7(d)(v), and the excess of the tender offer proceeds over the Call
Price shall be paid to the exercising Warrant Holders pro rata in
respect to their proportionate exercises of Call Warrants or, if the
Call Price exceeds the tender offer proceeds, the amount of such
excess shall be paid by the exercising Warrant Holders pro rata in
respect to their proportionate exercises of Call Warrants.
(iv) If fewer than all tendered Underlying Securities are
accepted for payment and paid for, (A) the amount of Call Warrants
exercised shall be reduced to an amount that corresponds to a number
of Certificates that could be exchanged in an Optional Exchange for
the Underlying Securities accepted for payment and paid for (without
regard to any restrictions on the amount to be exchanged, so long as
such restrictions would have been satisfied had all tendered
Underlying Securities been accepted for payment and paid for); (B)
each Warrant Holder's exercise shall be reduced by its share
(proportionate to the amount specified in its exercise notice) of
the amount of Underlying Securities not accepted for payment and
paid for; (C) the Call Price shall be determined after giving effect
to the reduction specified in clause (B); (D) the Call Warrants that
relate to the reduction specified in clause (B) shall remain
outstanding; and (E) the excess of the tender offer proceeds over
the Call Price shall be allocated in proportion to the amount of
Call Warrants deemed exercised as set forth in clause (A) above or,
if the Call Price exceeds the tender offer proceeds the amount of
such excess shall be paid by the exercising Warrant Holders pro rata
in respect to their proportionate exercises of Call Warrants.
(v) If the tender offer is terminated by the Underlying
Securities Issuer or any other tender offeror without consummation
thereof or if all tenders by the Trust of Underlying Securities are
otherwise rejected, then (1) the Call Notices will be of no further
force and effect, and (2) any Call Warrants relating to such Call
Notices will not be exercised and will remain outstanding.
Section 8. Notices of Events of Default.
As promptly as practicable after, and in any event within 30 days
after, the occurrence of any Event of Default actually known to the Trustee,
the Trustee shall give notice of such Event of Default to the Depository, or,
if any Certificates are not then held by DTC or any other depository, directly
to the registered holders of such Certificates, and to the Warrant Agent.
However, except in the case of an Event of Default relating to the payment of
principal of or interest on any of the Underlying Securities, the Trustee will
be protected in withholding
17
such notice if in good faith it determines that the withholding of such notice
is in the interest of the Certificateholders.
Section 9. Miscellaneous.
(a) The provisions of Section 4.04, Advances, of the Standard Terms
shall not apply to the Royal & Sun Alliance Bond-Backed Series 2002-11
Certificates.
(b) The provisions of Section 4.07, Optional Exchange, of the
Standard Terms shall not apply to the Royal & Sun Alliance Bond-Backed Series
2002-11 Certificates.
(c) The Trustee shall simultaneously forward reports to
Certificateholders pursuant to Section 4.03 of the Standard Terms and to the
New York Stock Exchange.
(d) Except as expressly provided herein, the Certificateholders shall
not be entitled to terminate the Trust or cause the sale or other disposition
of the Underlying Securities.
(e) The provisions of Section 3.07(d) of the Standard Terms shall not
apply to the Royal & Sun Alliance Bond-Backed Series 2002-11 Certificates.
(f) If the Trustee has not received payment with respect to a
Collection Period on the Underlying Securities on or prior to the related
Distribution Date, such distribution will be made promptly upon receipt of
such payment. No additional amounts shall accrue on the Certificates or be
owed to Certificateholders as a result of such delay; provided, however, that
any additional interest owed and paid by the Underlying Securities Issuer as a
result of such delay shall be paid to the Class A-1 Certificateholders and
Class A-2 Certificateholders pro rata in proportion to their respective
entitlements to such delayed payments.
(g) The outstanding principal balance of the Certificates shall not
be reduced by the amount of any Realized Losses (as defined in the Standard
Terms).
(h) The Trust may not engage in any business or activities other than
in connection with, or relating to, the holding, protecting and preserving of
the Trust Property and the issuance of the Certificates and the Call Warrants,
and other than those required or authorized by the Trust Agreement or
incidental and necessary to accomplish such activities. The Trust may not
issue or sell any certificates or other obligations other than the
Certificates and the Call Warrants or otherwise incur, assume or guarantee any
indebtedness for money borrowed. Notwithstanding Section 3.05 of the Standard
Terms, funds on deposit in the Certificate Account shall not be invested.
Section 2.01(f) of the Standard Terms shall be superseded by this provision.
(i) Notwithstanding anything in the Trust Agreement to the contrary,
the Trustee may be removed upon 60 days prior written notice delivered by the
holders of Class A-1 Certificates and Class A-2 Certificates representing the
Required Percentage-Removal.
(j) In the event that the Internal Revenue Service challenges the
characterization of the Trust as a grantor trust, the Trustee shall then file
such forms as the Depositor may specify to establish the Trust's election
pursuant to Section 761 of the Code to exclude the Trust from the
18
application of Subchapter K of the Code and is hereby empowered to execute
such forms on behalf of the Certificateholders.
(k) Notwithstanding anything in the Standard Terms to the contrary,
the Trustee, upon written direction by the Depositor, will execute the
Certificates.
(l) In relation to Section 7.01(f) of the Standard Terms, any
periodic reports filed by the Trustee pursuant to the Exchange Act in
accordance with the customary practices of the Depositor, need not contain any
independent reports.
(m) Notwithstanding anything in the Trust Agreement to the contrary,
the Trustee will have no recourse to the Underlying Securities.
(n) A Plan fiduciary, whether or not a Certificateholder at such
time, may request in writing that the Trustee provide such Plan fiduciary such
information as shall be necessary for it to determine whether any of the Call
Warrant holders is (i) a "party in interest" (within the meaning of ERISA,
Section 3(14)); or (ii) a "disqualified person" within the meaning of Internal
Revenue Code ("Code") Section 4975(e)(2) with respect to any employee benefit
plan or Plan identified to the Trustee by such Plan fiduciary at the time such
request is made in order for the Plan fiduciary to determine whether an
investment in the Certificates by such Plan is or would be permissible under
ERISA or the Code. Any such written request of a Plan fiduciary shall be
accompanied by a certification of the Plan fiduciary, opinion of counsel
experienced in such issues, and such other documentation as the Trustee may
require, in order to establish that such disclosure is necessary for the Plan
fiduciary to determine compliance with ERISA and the Code, as well as a
confidentiality agreement, whereby the Plan fiduciary agrees not to disclose
the identity of any Call Warrant holders except to any legal or other experts
as necessary to make such determination. The holder of a Call Warrant shall
upon reasonable request of the Trustee, in order for the Trustee to satisfy
its obligations to a Plan fiduciary, provide the Trustee with any one or more
of the following, in the sole discretion of the Call Warrant holder: (i) a
certificate that each of the Call Warrant holders is not (x) a "party in
interest" (within the meaning of ERISA, Section 3(14)) with respect to any
"employee benefit plan" as defined in ERISA, Section 3(3); or (y) a
"disqualified person" within the meaning of Internal Revenue Code ("Code")
Section 4975(e)(2) with respect to a "Plan" as defined in Code Section
4975(e)(1) except in each case with respect to plans sponsored by the Call
Warrant holder or its affiliates which cover employees of the Call Warrant
holder and/or such affiliates; (ii) a certificate that each of the Call
Warrant holders is not such a "party in interest" or "disqualified person"
with respect to any employee benefit plan or Plan identified to the Trustee by
such Plan fiduciary at the time such request is made; or (iii) a written consent
to the limited disclosure of the respective Call Warrant holder's identity to
a specific Plan fiduciary solely for purposes of allowing the Trustee to
satisfy its obligations to a Plan fiduciary.
19
(o) The Trust will not merge or consolidate with any other entity
without confirmation from each Rating Agency that such merger or consolidation
will not result in the qualification, reduction or withdrawal of its
then-current rating on the Certificates.
(p) All directions, demands and notices hereunder or under the
Standard Terms shall be in writing and shall be delivered as set forth below
(unless written notice is otherwise provided to the Trustee).
If to the Depositor, to:
Xxxxxx ABS Corporation
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Credit Trading
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Trustee or the Warrant Agent, to:
U.S. Bank Trust National Association
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Rating Agencies, to:
Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Attention: CBO/CLO Monitoring Department
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
20
and to:
Standard & Poor's Ratings Services
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Finance Surveillance Group
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the New York Stock Exchange, to:
New York Stock Exchange, Inc.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Copies of all directions, demands and notices required to be given
to the Certificateholders hereunder or under the Standard Terms will also be
given to the Warrant Holders in writing as set forth in this Section 9, and
copies of all directions, demands and notices required to be given to the
Trustee hereunder or under the Standard Terms will also be given to the
Warrant Agent in writing as set forth in this Section 9(p).
(q) Each of the representations, covenants and agreements made herein
by each of the Depositor and the Trustee are for the benefit of the
Certificateholders and the Warrant Holders.
(r) The provisions of the Section 2.01(d)(iii) of the Standard Terms
shall not apply to the Royal & Sun Alliance Bond-Backed Series 2002-11
Certificates and the following shall be deemed to be inserted in its place:
"at the time of delivery of the Underlying Securities, the
Depositor owns such Underlying Securities, has the right to transfer its
interest in such Underlying Securities and such Underlying Securities are free
and clear of any lien, pledge, encumbrance, right, charge, claim or other
security interest; and
Section 10. Governing Law. THIS SERIES SUPPLEMENT AND THE
TRANSACTIONS DESCRIBED HEREIN SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
CHOICE OF LAWS PROVISIONS THEREOF.
Section 11. Counterparts. This Series Supplement may be executed in
any number of counterparts, each of which shall be deemed to be an original,
and all such counterparts shall constitute but one and the same instrument.
Section 12. Termination of the Trust. The Trust shall terminate upon
the earliest to occur of (i) the payment in full at maturity or sale by the
Trust after a payment default or an
21
acceleration or other early payment of the Underlying Securities and the
distribution in full of all amounts due to the Class A-1 Certificateholders
and Class A-2 Certificateholders; (ii) the exercise of all outstanding Call
Warrants by the Warrant Holder; (iii) the Final Scheduled Distribution Date
and (iv) the expiration of 21 years from the death of the last survivor of the
descendants of Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to
the Court of St. Xxxxx, living on the date hereof.
Section 13. Sale of Underlying Securities; Optional Exchange. In the
event of a sale of the Underlying Securities pursuant to Section 5(e) hereof
or pursuant to the instructions of the Warrant Agent under Section 1.2 of the
Warrant Agent Agreement, the Trustee shall solicit bids for the sale of the
Underlying Securities with settlement thereof on or before the third (3rd)
Business Day after such sale from three leading dealers in the relevant
market. Any of the following dealers (or their successors) shall be deemed to
qualify as leading dealers: (1) Credit Suisse First Boston Corporation, (2)
Xxxxxxx, Xxxxx & Co., (3) Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx Incorporated,
(4) UBS Warburg LLC, (5) Xxxxxxx Xxxxx Xxxxxx Inc., and (6) except in the case
of a sale related to the exercise of Call Warrants by the Depositor or any
Affiliate thereof, Xxxxxx Brothers Inc. The Trustee shall not be responsible
for the failure to obtain a bid so long as it has made reasonable efforts to
obtain bids. If a bid for the sale of the Underlying Securities has been
accepted by the Trustee but the sale has failed to settle on the proposed
settlement date, the Trustee shall request new bids from such leading dealers
to the Class A-1 and Class A-2 Certificateholders. In the event of an Optional
Exchange, the Trustee shall only deliver the Underlying Securities to the
purchaser of such Underlying Securities or sell the Underlying Securities
pursuant to this Section 13, as the case may be, against payment in same day
funds deposited into the Certificate Account.
Section 14. Amendments. Notwithstanding anything in the Trust
Agreement to the contrary, in addition to the other restrictions on
modification and amendment contained therein, the Trustee shall not enter into
any amendment or modification of the Trust Agreement which would adversely
affect in any material respect the interests of the holders of any class of
Certificates without the consent of the holders of 100% of such class of
Certificates; provided, however, that no such amendment or modification will
be permitted which would cause the Trust to be taxed as an association or
publicly traded partnership taxable as a corporation for federal income tax
purposes. Unless otherwise agreed, the Trustee shall provide five Business
Days written notice to each Rating Agency before entering into any amendment
or modification of the Trust Agreement pursuant to this Section 14.
Section 15. Voting of Underlying Securities, Modification of
Indenture.
(a) The Trustee, as holder of the Underlying Securities, has the
right to vote and give consents and waivers in respect of the Underlying
Securities as permitted by the Depository and except as otherwise limited by
the Trust Agreement. In the event that the Trustee receives a request from the
Depository, the Underlying Securities Trustee or the Underlying Securities
Issuer for its consent to any amendment, modification or waiver of the
Underlying Securities, the Indenture or any other document thereunder or
relating thereto, or receives any other solicitation for any action with
respect to the Underlying Securities, the Trustee shall mail a notice of such
proposed amendment, modification, waiver or solicitation to each
Certificateholder of record as of such date. The Trustee shall request
instructions from the Certificateholders as to whether or
22
not to consent to or vote to accept such amendment, modification, waiver or
solicitation. The Trustee shall consent or vote, or refrain from consenting or
voting, in the same proportion (based on the relative outstanding Certificate
Principal Balances of the Class A-1 Certificates) as the Certificates of the
Trust were actually voted or not voted by the Certificateholders thereof as of
a date determined by the Trustee prior to the date on which such consent or
vote is required; provided, however, that, notwithstanding anything in the
Trust Agreement to the contrary, the Trustee shall at no time vote on or
consent to any matter (i) unless such vote or consent would not (based on an
opinion of counsel) cause the Trust to be taxed as an association or publicly
traded partnership taxable as a corporation under the Code, (ii) which would
alter the timing or amount of any payment on the Underlying Securities,
including, without limitation, any demand to accelerate the Underlying
Securities, except in the event of a default under the Underlying Securities
or an event which with the passage of time would become an event of default
under the Underlying Securities and with the unanimous consent of holders of
all outstanding Class A-1 Certificates, Class A-2 Certificates and all Warrant
Holders, or (iii) which would result in the exchange or substitution of any of
the outstanding Underlying Securities pursuant to a plan for the refunding or
refinancing of such Underlying Securities except in the event of a default
under the Indenture and only with the consent of Certificateholders
representing 100% of the Class A-1 Certificates, 100% of the Class A-2
Certificates and 100% of the Warrant Holders. The Trustee shall have no
liability for any failure to act resulting from Certificateholders' late
return of, or failure to return, directions requested by the Trustee from the
Certificateholders.
(b) In the event that an offer is made by the Underlying Securities
Issuer to issue new obligations in exchange and substitution for any of the
Underlying Securities, pursuant to a plan for the refunding or refinancing of
the outstanding Underlying Securities or any other offer is made for the
Underlying Securities, the Trustee shall notify the Class A-1
Certificateholders, Class A-2 Certificateholders and the Warrant Holders of
such offer promptly. Subject to the rights of the Warrant Holders to exercise
Call Warrants in connection with a tender offer for the Underlying Securities,
the Trustee must reject any such offer unless the Trustee is directed by the
affirmative vote of the holders of 100% of the Class A-1 Certificates, Class
A-2 Certificates and Call Warrants to accept such offer and the Trustee has
received the tax opinion described above. If pursuant to the preceding
sentence, the Trustee accepts any such offer the Trustee shall promptly notify
the Rating Agencies.
(c) If an event of default under the Indenture occurs and is
continuing, and if directed by a majority of the outstanding Class A-1
Certificateholders and Class A-2 Certificateholders, the Trustee shall vote
the Underlying Securities in favor of directing, or take such other action as
may be appropriate to direct, the Underlying Securities Trustee to declare the
unpaid principal amount of the Underlying Securities and any accrued and
unpaid interest thereon to be due and payable.
Section 16. Additional Depositor Representation. It is the express
intent of the parties hereto that the conveyance of the Underlying Securities
by the Depositor to the Trustee be, and be construed as, a sale of the
Underlying Securities by the Depositor and not a pledge of any Underlying
Securities 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 Securities 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 Securities by the Depositor to the
23
Trustee to secure a debt or other obligation of the Depositor, pursuant to
Section 10.07 of the Standard Terms. In connection with any such grant of a
security interest in the Underlying Securities (including any such grant in
connection with any sale of additional Underlying Securities pursuant to
Section 3(d)), the Depositor hereby represents and warrants to Trustee as
follows:
(i) In the event the Underlying Securities are held to be property of
the Depositor, then the Trust Agreement creates a valid and
continuing security interest (as defined in the applicable Uniform
Commercial Code) in the Underlying Securities in favor of the
Trustee which security interest is prior to all other liens, and is
enforceable as such as against creditors of, and purchasers from,
the Depositor.
(ii) The Underlying Securities have been credited to a trust account (the
"Securities Account") of the Trustee, or its authorized agent, in
accordance with Section 2.01 of the Standard Terms. The Trustee, as
securities intermediary for the Securities Account, has agreed to
treat the Underlying Securities as "financial assets" within the
meaning of the Uniform Commercial Code. (iii) Immediately prior to
the transfer of the Underlying Securities to the Trust, Depositor
owned and had good and marketable title to the Underlying Securities
free and clear of any lien, claim or encumbrance of any Person.
(iv) Depositor has received all consents and approvals required by the
terms of the Underlying Securities to the transfer to the Trustee of
its interest and rights in the Underlying Securities as contemplated
by the Trust Agreement.
(v) Depositor has taken all steps necessary to cause the Trustee, as
securities intermediary for the Securities Account, to identify on
its records that the Trustee, as the trustee of the Trust, is the
Person having a security entitlement against the securities
intermediary in the Securities Account.
(vi) Depositor has not assigned, pledged, sold, granted a security
interest in or otherwise conveyed any interest in the Underlying
Securities (or, if any such interest has been assigned, pledged or
otherwise encumbered, it has been released). Depositor has not
authorized the filing of and is not aware of any financing
statements against Depositor that includes a description of the
Underlying Securities. Depositor is not aware of any judgment or tax
lien filings against Depositor.
(vii) The Securities Account is not in the name of any Person other than
the Trust. Depositor has not consented to the compliance by the
Trustee, as securities intermediary, with entitlement orders of any
Person other than the Trustee, as trustee of the Trust.
24
IN WITNESS WHEREOF, the parties hereto have caused this Series
Supplement to be duly executed by their respective authorized officers as of
the date first written above.
XXXXXX ABS CORPORATION,
as Depositor
By: /s/ Xxxx Xxxxxxx
----------------------------------------------
Name: Xxxx Xxxxxxx
Title: Senior Vice President
U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity
but solely as Trustee on behalf
of the Corporate Backed Trust Certificates
Royal & Sun Alliance Bond-Backed
Series 2002-11 Trust
By: /s/ Xxxxx X. Xxxxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Vice President and Assistant Secretary
25
SCHEDULE I
ROYAL & SUN ALLIANCE BOND-BACKED SERIES 2002-11
UNDERLYING SECURITIES SCHEDULE
Underlying Securities: 8.95% Subordinated Guaranteed Bonds due
October 15, 2029.
Issuer: Royal & Sun Alliance Insurance Group plc.
Guarantor: Royal & Sun Alliance Insurance plc.
CUSIP Number: 78004V AB 9.
Principal Amount Deposited: $66,816,000
Original Issue Date: September 27, 1999.
Principal Amount of
Underlying Securities
Originally Issued: $500,000,000.
Maturity Date: October 15, 2029.
Interest Rate: 8.95% per annum.
Interest Payment Dates: April 15th and October 15th.
Record Dates: April 14th and October 14th.
I-1
EXHIBIT A-1
FORM OF TRUST CERTIFICATE CLASS A-1
CLASS A-1 CERTIFICATE
NUMBER 1 2,672,640 $25 PAR CERTIFICATES
CUSIP NO. 21988 G 41 1
SEE REVERSE FOR CERTAIN DEFINITIONS
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE REPRESENTS A PROPORTIONATE UNDIVIDED BENEFICIAL
OWNERSHIP INTEREST IN THE TRUST AND DOES NOT EVIDENCE AN OBLIGATION OF, OR AN
INTEREST IN, AND IS NOT GUARANTEED BY THE DEPOSITOR OR THE TRUSTEE OR ANY OF
THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE OR THE TRUST ASSETS ARE
INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR ANY OTHER PERSON.
THE CERTIFICATEHOLDERS, BY THEIR ACCEPTANCE OF CERTIFICATES,
COVENANT AND AGREE TO TENDER ANY AND ALL CALLED CERTIFICATES TO THE TRUSTEE
UPON THE WARRANT HOLDER'S EXERCISE OF CALL WARRANTS AND PAYMENT OF THE CALL
PRICE FOR SUCH CERTIFICATES IN ACCORDANCE WITH THE PROVISIONS HEREOF AND OF
THE WARRANT AGENT AGREEMENT.
A-1-1
XXXXXX ABS CORPORATION
2,672,640 $25 PAR
CORPORATE BACKED TRUST CERTIFICATES,
ROYAL & SUN ALLIANCE BOND-BACKED SERIES 2002-11
7.70% INTEREST RATE
evidencing a proportionate undivided beneficial ownership
interest in the Trust, as defined below, the property of which consists
principally of $66,816,000 aggregate principal amount of 8.95% Subordinated
Guaranteed Bonds due 2029, issued by Royal & Sun Alliance Insurance Group plc
(the "Underlying Securities Issuer") and all payments received thereon (the
"Trust Property"), deposited in trust by Xxxxxx ABS Corporation (the
"Depositor").
THIS CERTIFIES THAT CEDE & CO. is the registered owner of an
aggregate of $66,816,000 principal amount nonassessable, fully-paid,
proportionate undivided beneficial ownership interest in the Corporate Backed
Trust Certificates, Royal & Sun Alliance Bond-Backed Series 2002-11 Trust,
formed by the Depositor.
A-1-2
The Trust was created pursuant to a Standard Terms for Trust
Agreements, dated as of January 16, 2001 (the "Standard Terms"), between the
Depositor and U.S. Bank Trust National Association, a national banking
association, not in its individual capacity but solely as Trustee (the
"Trustee"), as supplemented by the Series Supplement in respect of the Royal &
Sun Alliance Bond-Backed Series 2002-11, dated as of June 7, 2002 (the "Series
Supplement" and, together with the Standard Terms, the "Trust Agreement"),
between the Depositor and the Trustee. This Certificate does not purport to
summarize the Trust Agreement and reference is hereby made to the Trust
Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby and the rights, duties and
obligations of the Trustee with respect hereto. A copy of the Trust Agreement
may be obtained from the Trustee by written request sent to the Corporate
Trust Office. Capitalized terms used but not defined herein have the meanings
assigned to them in the Trust Agreement.
This Certificate is one of the duly authorized Certificates
designated as the "Corporate Backed Trust Certificates, Royal & Sun Alliance
Bond-Backed Series 2002-11, Class A-1" (herein called the "Certificates").
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Trust Agreement the Holder of this
Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound. The Trust Property consists of: (i) Underlying Securities
described in the Trust Agreement, and (ii) all payments on or collections in
respect of the Underlying Securities accrued on or after June 7, 2002,
together with any and all income, proceeds and payments with respect thereto;
provided, however, that any income from the investment of Trust funds in
certain permitted investments ("Eligible Investments") does not constitute
Trust Property.
Subject to the terms and conditions of the Trust Agreement
(including the availability of funds for distributions) and until the
obligation created by the Trust Agreement shall have terminated in accordance
therewith, distributions will be made on each Distribution Date, to the Person
in whose name this Certificate is registered on the applicable Record Date, in
an amount equal to such Certificateholder's proportionate undivided beneficial
ownership interest in the amount required to be distributed to the Holders of
the Certificates on such Distribution Date. The Record Date applicable to any
Distribution Date is the close of business on the day immediately preceding
such Distribution Date (whether or not a Business Day). If a payment with
respect to the Underlying Securities is made to the Trustee after the date on
which such payment was due, then the Trustee will distribute any such amounts
received on the next occurring Business Day.
Each Certificateholder, by its acceptance of a Certificate,
covenants and agrees that such Certificateholder will not at any time
institute against the Trust, or join in any institution against the Trust of,
any bankruptcy proceedings under any United States Federal or state bankruptcy
or similar law in connection with any obligations relating to the Certificates
or the Trust Agreement.
Distributions made on this Certificate will be made as provided
in the Trust Agreement by the Trustee by wire transfer in immediately
available funds, or check mailed to the Certificateholder of record in the
Certificate Register without the presentation or surrender of this Certificate
or the making of any notation hereon, except that with respect to Certificates
registered on the Record Date in the name of the nominee of the Clearing
Agency (initially, such
A-1-3
nominee shall be Cede & Co.), payments will be made by wire transfer in
immediately available funds to the account designated by such nominee. Except
as otherwise provided in the Trust Agreement and notwithstanding the above,
the final distribution on this Certificate will be made after due notice by
the Trustee of the pendency of such distribution and only upon presentation
and surrender of this Certificate at the Corporate Trust Office or such other
location as may be specified in such notice.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee, by manual signature, this Certificate
shall not entitle the Holder hereof to any benefit under the Trust Agreement
or be valid for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE HOLDER HEREOF SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
A-1-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed as of the date set forth below.
CORPORATE BACKED TRUST
CERTIFICATES, ROYAL & SUN ALLIANCE
BOND-BACKED SERIES 2002-11 TRUST
By: U.S. BANK TRUST NATIONAL ASSOCIATION
not in its individual capacity but solely as
Trustee,
By:
-----------------------------------------
Authorized Signatory
Dated: June 7, 2002
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Corporate Backed Trust Certificates, Royal &
Sun Alliance Bond-Backed Series 2002-11, described in the Trust Agreement
referred to herein.
U.S. BANK TRUST NATIONAL ASSOCIATION
not in its individual capacity but solely as
Trustee,
By:
---------------------------------
Authorized Signatory
A-1-5
(REVERSE OF CERTIFICATE)
The Certificates are limited in right of distribution to certain
payments and collections respecting the Underlying Securities, all as more
specifically set forth herein and in the Trust Agreement. The registered
Holder hereof, by its acceptance hereof, agrees that it will look solely to
the Trust Property (to the extent of its rights therein) for distributions
hereunder.
The Trust Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the Trustee and the rights of the
Certificateholders under the Trust Agreement at any time by the Depositor and
the Trustee with the consent of the Holders of Class A-1 Certificates in the
manner set forth in the Series Supplement and the Standard Terms. Any such
consent by the Holder of this Certificate (or any predecessor Certificate)
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange hereof or in lieu hereof whether or not a notation of such consent in
made upon this Certificate. The Trust Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders
of any of the Certificates.
The Certificates are issuable in fully registered form only in
denominations of $25.
As provided in the Trust Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is
registerable in the Certificate Register upon surrender of this Certificate
for registration of transfer at the offices or agencies of the Certificate
Registrar maintained by the Trustee in the Borough of Manhattan, the City of
New York, duly endorsed by or accompanied by an assignment in the form below
and by such other documents as required by the Trust Agreement, and thereupon
one or more new Certificates of the same class in authorized denominations
evidencing the same principal amount will be issued to the designated
transferee or transferees. The initial Certificate Registrar appointed under
the Trust Agreement is U.S. Bank Trust National Association.
No service charge will be made for any registration of transfer
or exchange, but the Trustee may require exchange of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with
any transfer or exchange of Certificates.
The Depositor and the Trustee and any agent of the Depositor or
the Trustee may treat the Person in whose name this Certificate is registered
as the owner hereof for all purposes, and neither the Depositor, the Trustee,
nor any such agent shall be affected by any notice to the contrary.
It is the intention of the parties to the Trust Agreement that
the Trust created thereunder shall constitute a fixed investment trust for
federal income tax purposes under Treasury Regulation Section 301.7701-4, and
the Certificateholder agrees to treat the Trust, any distributions therefrom
and its beneficial interest in the Certificates consistently with such
characterization.
The Trust and the obligations of the Depositor and the Trustee
created by the Trust Agreement with respect to the Certificates shall
terminate upon the earliest to occur of (i) the payment in full at maturity or
sale by the Trust after a payment default or an acceleration or
A-1-6
other early payment of the Underlying Securities and the distribution in full
of all amounts due to the Class A-1 Certificateholders and Class A-2
Certificateholders; (ii) the Final Scheduled Distribution Date and (iii) the
expiration of 21 years from the death of the last survivor of the descendants
of Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to the Court of
St. Xxxxx, living on the date hereof.
An employee benefit plan subject to the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), a plan described in Section
4975(e) of the Code, an entity whose underlying assets include plan assets by
reason of any such plan's investment in the entity, including an individual
retirement account or Xxxxx plan (any such, a "Plan") may purchase and hold
Certificates if the Plan can represent and warrant that its purchase and
holding of the Certificates would not be prohibited under ERISA or the Code.
A-1-7
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
(Please print or type name and address, including postal zip code, of
assignee) the within Certificate, and all rights thereunder, hereby
irrevocably constituting and appointing ______________________ Attorney to
transfer said Certificate on the books of the Certificate Register, with full
power of substitution in the premises.
Dated:
*
Signature Guaranteed:
*
*NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Signatures must be guaranteed
by an "eligible guarantor institution" meeting the requirements of the
Certificate Registrar, which requirements include membership or participation
in the Security Transfer Agent Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Certificate
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
A-1-8
EXHIBIT A-2
FORM OF TRUST CERTIFICATE CLASS A-2
CLASS A-2 CERTIFICATE
NUMBER 1 CUSIP NO. 00000XXX0
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS CLASS A-2 CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION UNDER
SUCH ACT IS IN EFFECT OR PURSUANT TO AN EXEMPTION THEREFROM UNDER SUCH ACT.
THE CLASS A-2 CERTIFICATE REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF THE SERIES SUPPLEMENT.
EACH PURCHASER OF THIS CLASS A-2 CERTIFICATE IS HEREBY NOTIFIED
THAT THE SELLER OF THIS CLASS A-2 CERTIFICATE MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.
THE NOTIONAL PRINCIPAL AMOUNT OF THIS CLASS A-2 CERTIFICATE IS
AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING NOTIONAL PRINCIPAL AMOUNT OF
THIS CLASS A-2 CERTIFICATE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON
THE FACE HEREOF.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE REPRESENTS A PROPORTIONATE UNDIVIDED BENEFICIAL
OWNERSHIP INTEREST IN THE TRUST AND DOES NOT EVIDENCE AN OBLIGATION OF, OR AN
INTEREST IN, AND IS NOT GUARANTEED BY THE DEPOSITOR OR THE TRUSTEE OR ANY OF
THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE OR THE TRUST ASSETS ARE
INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR ANY OTHER PERSON.
A-2-1
THE CERTIFICATEHOLDERS, BY THEIR ACCEPTANCE OF CERTIFICATES,
COVENANT AND AGREE TO TENDER ANY AND ALL CALLED CERTIFICATES TO THE TRUSTEE
UPON THE WARRANT HOLDER'S EXERCISE OF CALL WARRANTS AND PAYMENT OF THE CALL
PRICE FOR SUCH CERTIFICATES IN ACCORDANCE WITH THE PROVISIONS HEREOF AND OF
THE WARRANT AGENT AGREEMENT.
A-2-2
XXXXXX ABS CORPORATION
CORPORATE BACKED TRUST CERTIFICATES,
ROYAL & SUN ALLIANCE BOND-BACKED SERIES 2002-11
$66,816,000 NOTIONAL PRINCIPAL AMOUNT
1.25% INTEREST RATE
evidencing a proportionate undivided beneficial ownership interest in
the Trust, as defined below, the property of which consists principally of
$66,816,000 aggregate principal amount of 8.95% Senior Notes due October 29,
2029, issued by Royal & Sun Alliance Insurance Group plc and all payments
received thereon (the "Trust Property"), deposited in trust by Xxxxxx ABS
Corporation (the "Depositor").
THIS CERTIFIES THAT CEDE & CO. is the registered owner of an
aggregate amount of $66,816,000 notional principal amount nonassessable,
fully-paid, proportionate undivided beneficial ownership interest in the
Corporate Backed Trust Certificates, Royal & Sun Alliance Bond-Backed Series
2002-11 Trust, formed by the Depositor.
The Trust was created pursuant to a Standard Terms for Trust
Agreements, dated as of January 16, 2001 (the "Standard Terms"), between the
Depositor and U.S. Bank Trust National Association , a national banking
association, not in its individual capacity but solely as Trustee (the
"Trustee"), as supplemented by the Series Supplement, Royal & Sun Alliance
Bond-Backed Series 2002-11, dated as of June 7, 2002 (the "Series Supplement"
and, together with the Standard Terms, the "Trust Agreement"), between the
Depositor and the Trustee. This Certificate does not purport to summarize the
Trust Agreement and reference is hereby made to the Trust Agreement for
information with respect to the interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and obligations of
the Trustee with respect hereto. A copy of the Trust Agreement may be obtained
from the Trustee by written request sent to the Corporate Trust Office.
Capitalized terms used but not defined herein have the meanings assigned to
them in the Trust Agreement.
This Certificate is one of the duly authorized Certificates
designated as the "Corporate Backed Trust Certificates, Royal & Sun Alliance
Bond-Backed Series 2002-11, Class A-2" (herein called the "Certificates").
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Trust Agreement the Holder of this
Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound. The Trust Property consists of: (i) Underlying Securities
described in the Trust Agreement, and (ii) all payments on or collections in
respect of the Underlying Securities accrued on or after June 7, 2002,
together with any and all income, proceeds and payments with respect thereto;
provided, however, that any income from the investment of Trust funds in
certain permitted investments ("Eligible Investments") does not constitute
Trust Property.
Subject to the terms and conditions of the Trust Agreement
(including the availability of funds for distributions) and until the
obligation created by the Trust Agreement
A-2-3
shall have terminated in accordance therewith, distributions of interest will
be made on this Certificate on each Distribution Date.
Subject to the terms and conditions of the Trust Agreement
(including the availability of funds for distributions) and until the
obligation created by the Trust Agreement shall have terminated in accordance
therewith, distributions will be made on each Distribution Date, to the Person
in whose name this Certificate is registered on the applicable Record Date, in
an amount equal to such Certificateholder's proportionate undivided beneficial
ownership interest in the amount required to be distributed to the Holders of
the Certificates on such Distribution Date. The Record Date applicable to any
Distribution Date is the close of business on the day immediately preceding
such Distribution Date (whether or not a Business Day). If a payment with
respect to the Underlying Securities is made to the Trustee after the date on
which such payment was due, then the Trustee will distribute any such amounts
received on the next occurring Business Day.
Each Certificateholder, by its acceptance of a Certificate,
covenants and agrees that such Certificateholder will not at any time
institute against the Trust, or join in any institution against the Trust of,
any bankruptcy proceedings under any United States Federal or state bankruptcy
or similar law in connection with any obligations relating to the Certificates
or the Trust Agreement.
Distributions made on this Certificate will be made as provided
in the Trust Agreement by the Trustee by wire transfer in immediately
available funds, or check mailed to the Certificateholder of record in the
Certificate Register without the presentation or surrender of this Certificate
or the making of any notation hereon, except that with respect to Certificates
registered on the Record Date in the name of the nominee of the Clearing
Agency (initially, such nominee shall be Cede & Co.), payments will be made by
wire transfer in immediately available funds to the account designated by such
nominee. Except as otherwise provided in the Trust Agreement and
notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the Corporate
Trust Office or such other location as may be specified in such notice.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee, by manual signature, this Certificate
shall not entitle the Holder hereof to any benefit under the Trust Agreement
or be valid for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE HOLDER HEREOF SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
A-2-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed as of the date set forth below.
CORPORATE BACKED TRUST
CERTIFICATES,
ROYAL & SUN ALLIANCE BOND-BACKED
SERIES 2002-11 TRUST
By: U.S. BANK TRUST NATIONAL ASSOCIATION
not in its individual capacity but solely as
Trustee,
By:
-------------------------------------------
Authorized Signatory
Dated: June 7, 2002
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Corporate Backed Trust Certificates, Royal &
Sun Alliance Bond-Backed Series 2002-11, described in the Trust Agreement
referred to herein.
U.S. BANK TRUST NATIONAL ASSOCIATION
not in its individual capacity but solely as
Trustee,
By: .........
---------------------------------
Authorized Signatory
A-2-5
(REVERSE OF CERTIFICATE)
The Certificates are limited in right of distribution to certain
payments and collections respecting the Underlying Securities, all as more
specifically set forth herein and in the Trust Agreement. The registered
Holder hereof, by its acceptance hereof, agrees that it will look solely to
the Trust Property (to the extent of its rights therein) for distributions
hereunder.
The Trust Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the Trustee and the rights of the
Certificateholders under the Trust Agreement at any time by the Depositor and
the Trustee with the consent of the holders of Class A-2 Certificates in the
manner set forth in the Series Supplement and the Standard Terms. Any such
consent by the Holder of this Certificate (or any predecessor Certificate)
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Trust Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders
of any of the Certificates.
The Certificates are issuable in fully registered form only in
denominations of $100,000 and in integral multiples of $1 in excess thereof.
As provided in the Trust Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is
registerable in the Certificate Register upon surrender of this Certificate
for registration of transfer at the offices or agencies of the Certificate
Registrar maintained by the Trustee in the Borough of Manhattan, the City of
New York, duly endorsed by or accompanied by an assignment in the form below
and by such other documents as required by the Trust Agreement, and thereupon
one or more new Certificates of the same class in authorized denominations
evidencing the same notional principal amount will be issued to the designated
transferee or transferees. The initial Certificate Registrar appointed under
the Trust Agreement is U.S. Bank Trust National Association.
No service charge will be made for any registration of transfer
or exchange, but the Trustee may require exchange of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with
any transfer or exchange of Certificates.
The Depositor and the Trustee and any agent of the Depositor or
the Trustee may treat the Person in whose name this Certificate is registered
as the owner hereof for all purposes, and neither the Depositor, the Trustee,
nor any such agent shall be affected by any notice to the contrary.
It is the intention of the parties to the Trust Agreement that
the Trust created thereunder shall constitute a fixed investment trust for
federal income tax purposes under Treasury Regulation Section 301.7701-4, and
the Certificateholder agrees to treat the Trust, any distributions therefrom
and its beneficial interest in the Certificates consistently with such
characterization.
The Trust and the obligations of the Depositor and the Trustee
created by the Trust Agreement with respect to the Certificates shall
terminate upon the earliest to occur of (i) the
A-2-6
payment in full at maturity or sale by the Trust after a payment default on or
an acceleration or other early payment of the Underlying Securities and the
distribution in full of all amounts due to the Class A-1 and Class A-2
Certificateholders; (ii) the Final Scheduled Distribution Date and (iii) the
expiration of 21 years from the death of the last survivor of the descendants
of Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to the Court of
St. Xxxxx, living on the date hereof.
An employee benefit plan subject to the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), a plan described in Section
4975(e) of the Code, an entity whose underlying assets include plan assets by
reason of any such plan's investment in the entity, including an individual
retirement account or Xxxxx plan (any such, a "Plan") may purchase and hold
Certificates if the Plan can represent and warrant that its purchase and
holding of the Certificates would not be prohibited under ERISA or the Code.
A-2-7
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
(Please print or type name and address, including postal zip
code, of assignee) the within Certificate, and all rights thereunder, hereby
irrevocably constituting and appointing _________________ ___________ Attorney
to transfer said Certificate on the books of the Certificate Register, with
full power of substitution in the premises.
Dated:
*
Signature Guaranteed:
*
*NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Signatures must be guaranteed
by an "eligible guarantor institution" meeting the requirements of the
Certificate Registrar, which requirements include membership or participation
in the Security Transfer Agent Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Certificate
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
A-2-8
EXHIBIT B
FORM OF WARRANT AGENT AGREEMENT
CORPORATE BACKED TRUST CERTIFICATES
ROYAL & SUN ALLIANCE BOND-BACKED SERIES 2002-11 TRUST
WARRANT AGENT AGREEMENT, dated as of June 7, 2002 (the "Warrant
Agent Agreement"), by and between XXXXXX ABS CORPORATION, as Depositor (the
"Depositor"), U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee (the "Trustee")
and U.S. BANK TRUST NATIONAL ASSOCIATION, as Warrant Agent (the "Warrant
Agent").
W I T N E S S E T H:
WHEREAS, the Depositor created Corporate Backed Trust
Certificates, Royal & Sun Alliance Bond-Backed Series 2002-11 Trust (the
"Trust"), a trust created under the laws of the State of New York pursuant to
a Standard Terms for Trust Agreements, dated as of January 16, 2001 (the
"Agreement"), between Xxxxxx ABS Corporation (the "Depositor") and U.S. Bank
Trust National Association, a national banking association, not in its
individual capacity but solely as Trustee (the "Trustee"), as supplemented by
the Series Supplement 2002-11, dated as of June 7, 2002 (the "Series
Supplement" and, together with the Agreement, the "Trust Agreement"), between
the Depositor and the Trustee; and
WHEREAS, in connection with the creation of the Trust and the
deposit therein of the Underlying Securities, it is desired to provide for the
issuance of trust certificates (the "Certificates") evidencing undivided
interests in the Trust and call warrants with respect to the Certificates
("Call Warrants").
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual covenants expressed herein, it is hereby agreed by and between the
Depositor, the Warrant Agent and the Trustee that except as otherwise
specified herein or as the context may otherwise require, capitalized terms
used herein but not defined herein shall have the respective meanings set
forth below in the Series Supplement, and as follows:
Section 17. - EXERCISE OF CALL WARRANTS
(a) Manner of Exercise. (i) Call Warrants may be exercised by any
holder thereof (each, a "Warrant Holder") in whole or in part on any Call
Date. The following conditions shall apply to any exercise of Call Warrants:
(1) A notice (each, a "Call Notice") specifying the number
of Call Warrants being exercised and the Call Date shall be
delivered to the Warrant Agent and the Trustee at least 5
Business Days before such Call Date.
(2) The Warrant Holder shall surrender the Call Warrants
to the Warrant Agent at its office specified in Section 6.3
hereof no later than 10:00 a.m. (New York City time) on such
Call Date.
B-1
(3) The Warrant Holder shall have made payment to the
Warrant Agent, by wire transfer or other immediately available
funds acceptable to the Warrant Agent, in the amount of the
Call Price, no later than 10:00 a.m. (New York City time) on
the Call Date.
(4) The Warrant Holder shall exercise Call Warrants
relating to Class A-1 Certificates and Call Warrants relating
to Class A-2 Certificates which represent a like percentage of
all Class A-1 Certificates and Class A-2 Certificates.
(5) The Warrant Holder may not exercise the Call Warrants
at any time when such Warrant Holder is insolvent, and such
Warrant Holder shall be required to certify that it is solvent
at the time of exercise, by completing the Form of Subscription
attached to the Call Warrants and delivering such completed
Form of Subscription to the Trustee on or prior to the Call
Date and by delivering to the Trustee a form reasonably
satisfactory to the Trustee of the opinion and the solvency
certificate required pursuant to Section 7(d)(ii) of the Series
Supplement.
(6) The Warrant Holder shall have satisfied any other
conditions to the exercise of Call Warrants set forth in
Section 7(b) of the Series Supplement.
(ii) Upon exercise of Call Warrants, any Warrant Holder other
than the Depositor or any Affiliate of the Depositor shall be
entitled to delivery by the Trustee of the Called Certificates. The
"Called Certificates" shall be, in the case of the Class A-1
Certificates, Class A-1 Certificates having a Certificate Principal
Amount equal to $25 per Call Warrant, and in the case of the Class
A-2 Certificates, Class A-2 Certificates having a notional balance
equal to $100,000 per Call Warrant. Unless otherwise specified
therein, such Call Notice shall be deemed to be notice of an
Optional Exchange pursuant to Section 7(b) of the Series Supplement.
Any Warrant Holder which is the Depositor or any Affiliate of the
Depositor shall receive the proceeds of the sale of the Called
Underlying Securities and shall not be entitled to receive the
related Called Certificates or Called Underlying Securities. "Called
Underlying Securities" are Underlying Securities which represent the
same percentage of the Underlying Securities as the Called
Certificates represent of the Class A-1 Certificates and Class A-2
Certificates.
(iii) The Warrant Agent shall notify the Trustee immediately
upon its receipt of a Call Notice and upon receipt of payment of the
Call Price. The Warrant Agent shall transfer the amount of any paid
Call Price to the Trustee in immediately available funds, for
deposit in the Certificate Account and application pursuant to the
Trust Agreement on the applicable Call Date (and, pending such
transfer, shall hold such amount for the benefit of the Warrant
Holder in a segregated trust account).
(iv) Delivery of a Call Notice does not give rise to an
obligation on the part of the Warrant Holder to pay the Call Price.
If, by 10:00 a.m. (New York City time) on the Call Date, the Warrant
Holder has not paid the Call Price, except in connection with a Call
Notice relating to a tender offer for Underlying Securities, then
the Call Notice shall
B-2
automatically expire and none of the Warrant Holder, the Warrant
Agent or the Trustee shall have any obligation with respect to the
Call Notice. The expiration of a Call Notice shall in no way affect
the Warrant Xxxxxx's right to deliver a Call Notice at a later date.
The Call Price for a call in connection with a tender offer shall be
deducted from the proceeds of a tender offer by the Trust pursuant
to Section 7(g)(iii) of the Series Supplement.
(b) Transfer of Certificates. As soon as practicable after each
surrender of Call Warrants in whole or in part on the Call Date and upon
satisfaction of all other requirements described in the Call Warrants and in
Section 1.1 hereof, the Warrant Agent shall instruct the Trustee as follows:
(i) if Call Warrants are being exercised by any Warrant
Holder other than the Depositor or any Affiliate of the
Depositor, to cause the Called Certificates to reflect the
Warrant Holder's beneficial ownership of such Certificates and
if such Call Notice is also deemed to be a notice of Optional
Exchange, to cause a distribution of Underlying Securities to
the Warrant Holder in accordance with Section 7(a) of the
Series Supplement, provided, however, that if such a Call
Notice and Optional Exchange is in connection with a tender
offer, the Warrant Agent shall instruct the Trustee to
distribute to the exercising Warrant Holder the excess of the
tender offer proceeds over the Call Price pursuant to Section
7(g)(iii) of the Series Supplement, or
(ii) if the Call Warrants are being exercised by the
Depositor or any Affiliate of the Depositor, to cause the
Called Underlying Securities to be sold pursuant to Section 13
of the Series Supplement and to distribute the proceeds of such
sale to the Warrant Holder.
If such exercise is in part only, the Warrant Agent shall instruct
the Trustee to authenticate new Call Warrants of like tenor, representing the
outstanding Call Warrants of the Warrant Holder and the Warrant Agent shall
deliver such Call Warrants to the Warrant Holder.
In each case, the Trustee shall act in accordance with such
instructions.
(c) Cancellation and Destruction of Call Warrants. All Call Warrants
surrendered to the Warrant Agent for the purpose of exercise (in whole or in
part) pursuant to Section 1.1 and actually exercised, or for the purpose of
transfer or exchange pursuant to Article III, shall be cancelled by the
Warrant Agent, and no Call Warrant (other than that reflecting any such
transfer or exchange) shall be issued in lieu thereof. The Warrant Agent shall
destroy all cancelled Call Warrants.
(d) No Rights as Holder of Certificates Conferred by Call Warrants.
Prior to the exercise thereof, Call Warrants shall not entitle the Warrant
Holder to any of the rights of a holder of the Certificates, including,
without limitation, the right to receive the payment of any amount on or in
respect of the Certificates or to enforce any of the covenants of the Trust
Agreement.
(e) Pro Rata Reduction of Call Warrants if Partial Redemption of
Underlying Securities. If Underlying Securities are redeemed in part by the
Underlying Securities Issuer and
B-3
the Warrant Holders do not exercise their Call Rights in connection with such
partial redemption, the number of Call Warrants held by each Warrant Holder
shall be reduced proportionately so that the aggregate amount of Class A-1
Certificates callable by Call Warrants shall equal the amount of outstanding
Class A-1 Certificates after giving effect to such partial redemption and the
aggregate notional amount of Class A-2 Certificates callable by Call Warrants
shall equal the outstanding notional amount of Class A-2 Certificates after
giving effect to such partial redemption. The Warrant Agent shall make such
adjustments to its records as shall be necessary to reflect such reductions
and shall notify each Warrant Holder of such adjustments.
Section 18. - RESTRICTIONS ON TRANSFER
(a) Restrictive Legends. Except as otherwise permitted by this
Article II, each Call Warrant (including each Call Warrant issued upon the
transfer of any Call Warrant) shall be issued with a legend in substantially
the following form:
"This Call Warrant has not been registered under the Securities Act of
1933, as amended, and may not be transferred, sold or otherwise disposed
of except while a registration under such Act is in effect or pursuant to
an exemption therefrom under such Act. The Call Warrant represented
hereby may be transferred only in compliance with the conditions
specified in the Call Warrants."
(b) Notice of Proposed Transfer; Opinions of Counsel. Prior to any
transfer of any Call Warrant or portion thereof, the Warrant Holder will give
5 Business Days (or such lesser period acceptable to the Warrant Agent) prior
written notice to the Warrant Agent of such Warrant Xxxxxx's intention to
effect such transfer.
Section 19. - REGISTRATION AND TRANSFER OF CALL WARRANTS, ETC.
(a) Warrant Register; Ownership of Call Warrants. The Warrant Agent
will keep a register in which the Warrant Agent will provide for the
registration of Call Warrants and the registration of transfers of Call
Warrants representing numbers of Call Warrants. The Trustee and the Warrant
Agent may treat the Person in whose name any Call Warrant is registered on
such register as the owner thereof for all purposes, and the Trustee and the
Warrant Agent shall not be affected by any notice to the contrary.
(b) Transfer and Exchange of Call Warrants. (i) No Call Warrant may
be offered, resold, assigned or otherwise transferred (including by pledge or
hypothecation) at any time prior to (x) the date which is two years or such
shorter period of time as permitted by Rule 144(k) under the Securities Act
after the later of the original issue date of such Call Warrants and the last
date on which the Depositor or any "affiliate" (as defined in Rule 144 under
the Securities Act) of the Depositor was the owner of such Call Warrant (or
any predecessor thereto) or (y) or such later date, if any, as may be required
by a change in applicable securities laws (the "Resale Restriction Termination
Date") unless such offer, resale, assignment or transfer is (i) to the Trust,
(ii) pursuant to an effective registration statement under the Securities Act,
(iii) to a qualified institutional buyer (a "QIB"), as such term is defined in
Rule 144A promulgated under the Securities Act ("Rule 144A"), in accordance
with Rule 144A or (iv) pursuant to another available exemption from
registration provided under the Securities Act, and, in each of cases (i)
through (iv), in accordance with any applicable securities laws of any state
of the United States
B-4
and other jurisdictions. Prior to any offer, resale, assignment or transfer of
any Call Warrant in the manner described in clause (iii) above, the
prospective transferee and the prospective transferor shall be required to
deliver to the Trustee an executed copy of an Investment Letter with respect
to the Call Warrants to be transferred substantially in the form of Exhibit C
to the Series Supplement. Prior to any offer, resale, assignment or transfer
of any Call Warrants in the manner described in clause (iv) above, the
prospective transferee and the prospective transferor shall be required to
deliver to the Trustee documentation certifying that the offer, resale,
assignment or transfer complies with the provisions of said clause (iv). In
addition to the foregoing, each prospective transferee of any Call Warrants in
the manner contemplated by clause (iii) above shall acknowledge, represent and
agree as follows:
(1) The transferee (x) is a QIB, (y) is aware that the sale to it is
being made in reliance on Rule 144A and (z) is acquiring such Call
Warrant for its own account or for the account of a QIB.
(2) The transferee understands that the Call Warrant are being offered
in a transaction not involving any public offering in the United
States within the meaning of the Securities Act, and that the Call
Warrants have not been and will not be registered under the
Securities Act.
(3) The transferee agrees that (A) if in the future it decides to offer,
resell, pledge or otherwise transfer the Call Warrants prior to the
Resale Restriction Termination Date, such Call Warrants shall only
be offered, resold, assigned or otherwise transferred (i) to the
Trust, (ii) pursuant to an effective registration statement under
the Securities Act, (iii) to a QIB, in accordance with Rule 144A or
(iv) pursuant to another available exemption from registration
provided under the Securities Act, and, in each of cases (i) through
(iv), in accordance with any applicable securities laws of any state
of the United States and other jurisdictions and (B) the transferee
will, and each subsequent holder is required to, notify any
subsequent purchaser of such Call Warrants from it of the resale
restrictions referred to in clause (A) above.
(ii) Upon surrender of any Call Warrant for registration of transfer
or for exchange to the Warrant Agent, the Warrant Agent shall (subject to
compliance with Article II) execute and deliver, and cause the Trustee,
on behalf of the Trust, to execute and deliver, in exchange therefor, a
new Call Warrant of like tenor and evidencing a like number of Call
Warrants, in the name of such Warrant Holder or as such Warrant Holder
(upon payment by such Warrant Holder of any applicable transfer taxes or
government charges) may direct; provided that as a condition precedent
for transferring the Call Warrants, the prospective transferee shall
deliver to the Trustee and the Depositor an executed copy of the
Investment Letter (set forth as Exhibit C to the Series Supplement) if
the same is required pursuant to the provisions of clause (a) above.
(c) Replacement of Call Warrants. Upon receipt of evidence reasonably
satisfactory to the Warrant Agent of the loss, theft, destruction or
mutilation of any Call Warrant and, in the case of any such loss, theft or
destruction of any Call Warrant, upon delivery of an indemnity bond in such
reasonable amount as the Warrant Agent may determine, or, in the case of any
such
B-5
mutilation, upon the surrender of such Call Warrant for cancellation to the
Warrant Agent, the Warrant Agent shall execute and deliver, and cause the
Trustee, on behalf of the Trust, to execute and deliver, in lieu thereof, a
new Call Warrant of like tenor bearing a number not contemporaneously
outstanding.
(d) Execution and Delivery of Call Warrants by Trustee. The Trustee,
on behalf of the Trust, hereby agrees (subject to compliance with Article II)
to execute and deliver such new Call Warrants issued in accordance with
Section 1.2 or this Article III as the Warrant Agent shall request in
accordance herewith.
Section 20. - DEFINITIONS
As used herein, unless the context otherwise requires, the following
terms have the following respective meanings:
"Business Day": As defined in the Trust Agreement.
"Call Date": Any Business Day (i) on or after June 7, 2007, (ii) after
the Underlying Securities Issuer announces that it will redeem (in whole
or in part) or otherwise make an unscheduled payment on the Underlying
Securities, (iii) after the Trustee notifies the Certificateholders of
any proposed sale of the Underlying Securities pursuant to the provisions
of this Series Supplement or (iv) on which a tender offer for some or all
of the Underlying Securities is consummated.
"Call Notice": As defined in Section 1.1(a)(i) hereof.
"Call Price": For each related Call Date, (i) in the case of the Class
A-1 Certificates, 100% of the outstanding Certificate Principal Balance
of the Class A-1 Certificates being purchased pursuant to the exercise of
the Call Warrants, plus any accrued and unpaid interest on such amount to
but excluding the Call Date and (ii) in the case of the Class A-2
Certificates, present value of all amounts that would otherwise have been
payable on the Class A-2 Certificates being purchased pursuant to the
exercise of the Call Warrants for the period from the related Call Date
to the Final Scheduled Distribution Date using a discount rate of 9.50%
per annum, assuming no delinquencies, deferrals, redemptions or
prepayments on the Underlying Securities shall occur after the related
Call Date.
"Call Warrant": As defined in the recitals.
"Called Certificates": As defined in Section 1.1(b) hereof.
"Called Underlying Securities": As defined in Section 1.1(b) hereof.
"Closing Date": June 7, 2002.
"Depositor": As defined in the recitals.
"Depositor Order": As defined in the Trust Agreement.
"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.
"QIB": As defined in Section 3.2 hereof.
"Rating Agencies": Standard & Poor's Ratings Services and Xxxxx'x
Investors Service, Inc. and any successor thereto.
"Resale Restriction Termination Date": As defined in Section 3.2 hereof.
B-6
"Responsible Officer": As defined in the Trust Agreement.
"Rule 144A": As defined in Section 3.2.
"Securities Act": The Securities Act of 1933, or any similar federal
statute, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect at the time.
"Trust": As defined in the recitals.
"Trust Agreement": As defined in the recitals.
"Trustee": As defined in the recitals, or any successor thereto under the
Trust Agreement.
"Warrant Agent": As defined in the recitals, or any successor thereto
under this Warrant Agent Agreement.
"Warrant Agent Agreement": As defined in the recitals.
"Warrant Holder": As defined in Section 1.1(a) hereof.
Section 21. - WARRANT AGENT
(a) Limitation on Liability. The Warrant Agent shall be protected and
shall incur no liability for or in respect of any action taken, suffered or
omitted by it in connection with its administration of the Call Warrants in
reliance upon any instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement or other paper or document in good faith believed by it to be
genuine and to be signed, executed and, where necessary, verified and
acknowledged, by the proper Person or Persons.
(b) Duties of Warrant Agent. The Warrant Agent undertakes only the
specific duties and obligations imposed hereunder upon the following terms and
conditions, by all of which the Depositor, the Trust, the Trustee and each
Warrant Holder shall be bound:
(i) The Warrant Agent may consult with legal counsel (who may
be legal counsel for the Depositor), and the opinion of such counsel
shall be full and complete authorization and protection to the
Warrant Agent as to any action taken or omitted by it in good faith
and in accordance with such opinion, provided the Warrant Agent
shall have exercised reasonable care in the selection by it of such
counsel.
(ii) Whenever in the performance of its duties hereunder, the
Warrant Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Depositor or the Trustee
prior to taking or suffering any action hereunder, such fact or
matter may be deemed to be conclusively proved and established by a
Depositor Order or a certificate signed by a Responsible Officer of
the Trustee and delivered to the Warrant Agent; and such certificate
shall be full authorization to the Warrant Agent for any action
taken or suffered in good faith by it hereunder in reliance upon
such certificate.
(iii) The Warrant Agent shall be liable hereunder only for its
own negligence, willful misconduct or bad faith.
(iv) The Warrant Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained herein or be
required to verify the same, but all
B-7
such statements and recitals are and shall be deemed to have been
made by the Trust and the Depositor only.
(v) The Warrant Agent shall not have any responsibility in
respect of and makes no representation as to the validity of the
Call Warrants or the execution and delivery thereof (except the due
execution hereof by the Warrant Agent); nor shall it be responsible
for any breach by the Trust of any covenant or condition contained
in the Call Warrants; nor shall it by any act thereunder be deemed
to make any representation or warranty as to the Certificates to be
purchased thereunder.
(vi) The Warrant Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from the Chairman of the Board, the Chief Executive
Officer, Chief Financial Officer, Chief Operating Officer,
President, a Vice President, a Senior Vice President, a Managing
Director, its Treasurer, an Assistant Treasurer, its 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.
(vii) The Warrant Agent and any shareholder, director, officer
or employee of the Warrant Agent may buy, sell or deal in any of the
Call Warrants or other securities of the Trust or otherwise act as
fully and freely as though it were not Warrant Agent hereunder, so
long as such persons do so in full compliance with all applicable
laws. Nothing herein shall preclude the Warrant Agent from acting in
any other capacity for the Trust, the Depositor or for any other
legal entity.
(viii) The Warrant Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents.
(ix) The Warrant Agent shall act solely as the agent of the
Trust hereunder. The Warrant Agent shall not be liable except for
the failure to perform such duties as are specifically set forth
herein, and no implied covenants or obligations shall be read into
the Call Warrants against the Warrant Agent, whose duties shall be
determined solely by the express provisions thereof. The Warrant
Agent shall not be deemed to be a fiduciary.
(x) The Warrant Agent shall not be responsible for any failure
on the part of the Trustee to comply with any of its covenants and
obligations contained herein.
(xi) The Warrant Agent shall not be under any obligation or
duty to institute, appear in or defend any action, suit or legal
proceeding in respect hereof, unless first indemnified to its
satisfaction, but this provision shall not affect the power of the
Warrant Agent to take such action as the Warrant Agent may consider
proper, whether with or without such indemnity. The Warrant Agent
shall promptly notify the 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 the Call Warrants.
B-8
(xii) The Trustee will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and
delivered all such further acts, instruments and assurances as may
be required by the Warrant Agent in order to enable it to carry out
or perform its duties hereunder.
(c) Change of Warrant Agent. The Warrant Agent may resign and be
discharged from its duties hereunder upon thirty (30) days notice in writing
mailed to the Depositor and the Trustee by registered or certified mail, and
to the Warrant Holders by first-class mail at the expense of the Depositor;
provided that no such resignation or discharge shall become effective until a
successor Warrant Agent shall have been appointed hereunder. The Depositor may
remove the Warrant Agent or any successor Warrant Agent upon thirty (30) days
notice in writing, mailed to the Warrant Agent or successor Warrant Agent, as
the case may be, and to the Warrant Holders by first-class mail; provided
further that no such removal shall become effective until a successor Warrant
Agent shall have been appointed hereunder. If the Warrant Agent shall resign
or be removed or shall otherwise become incapable of acting, the Depositor
shall promptly appoint a successor to the Warrant Agent, which may be
designated as an interim Warrant Agent. If an interim Warrant Agent is
designated, the Depositor shall then appoint a permanent successor to the
Warrant Agent, which may be the interim Warrant 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 Warrant Agent or by the Warrant Holder, then the Warrant Agent
or registered Warrant Holder may apply to any court of competent jurisdiction
for the appointment of such a successor. Any successor to the Warrant Agent
appointed hereunder must be rated in one of the four highest rating categories
by the Rating Agencies. Any entity which may be merged or consolidated with or
which shall otherwise succeed to substantially all of the trust or agency
business of the Warrant Agent shall be deemed to be the successor Warrant
Agent without any further action.
(d) Warrant Agent Transfer Fee. The Warrant Agent will assess a fee
of $50.00 upon the issue of any new Call Warrant, such fee to be assessed upon
the new Call Warrant Holder.
Section 22. - MISCELLANEOUS
(a) Remedies. The remedies at law of the Warrant Holder in the event
of any default or threatened default by the Warrant Agent in the performance
of or compliance with any of the terms of the Call Warrants are not and will
not be adequate and, to the full extent permitted by law, such terms may be
specifically enforced by a decree for the specific performance of any
agreement contained herein or by an injunction against a violation of any of
the terms thereof or otherwise.
(b) Limitation on Liabilities of Warrant Holder. Nothing contained in
this Warrant Agent Agreement shall be construed as imposing any obligation on
the Warrant Holder to purchase any of the Certificates except in accordance
with the terms thereof.
(c) Notices. All notices and other communications under this Warrant
Agent Agreement shall be in writing and shall be delivered, or mailed by
registered or certified mail, return receipt requested, by a nationally
recognized overnight courier, postage prepaid, addressed
B-9
(a) if to any Warrant Holder, at the registered address of such Warrant Holder
as set forth in the register kept by the Warrant Agent or (b) if to the
Warrant Agent, to 000 Xxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Corporate Trust or to such other address notice of which the
Warrant Agent shall have given to the Warrant Holder and the Trustee or (c) if
to the Trust or the Trustee, to the Corporate Trust Office (as set forth in
the Trust Agreement); provided that the exercise of any Call Warrants shall be
effective in the manner provided in Article I. The Warrant Agent shall forward
to the Warrant Holder any notices received by it hereunder or pursuant to the
Trust Agreement or this Agreement by facsimile within one Business Day of
receipt thereof.
(d) Amendment. (i) This Warrant Agent Agreement may be amended from
time to time by the Depositor, the Trustee and the Warrant Agent without the
consent of any Warrant Holder, upon receipt of an opinion of counsel
satisfactory to the Warrant Agent that the provisions hereof have been
satisfied and that such amendment would not cause the Trust to be taxed as an
association or publicly traded partnership taxable as a Corporation under the
Code, for any of the following purposes: (i) to cure any ambiguity or to
correct or supplement any provision herein which may be defective or
inconsistent with any other provision herein or to provide for any other terms
or modify any other provisions with respect to matters or questions arising
under the Call Warrant which shall not adversely affect in any material
respect the interests of the Warrant Holder or any holder of a Certificate,
provided, however, that no amendment altering the timing or amount of any
payment of the Call Price shall be effected without the consent of each Warrant
Holder; or (ii) to evidence and provide for the acceptance of appointment
hereunder of a Warrant Agent other than U.S. Bank Trust National Association.
(ii) Without limiting the generality of the foregoing, the Call
Warrants may also be modified or amended from time to time by the
Depositor, the Trustee and the Warrant Agent with the consent of
Warrant Holders of 66-2/3% of each of the Call Warrants related to
the Class A-1 Certificates and the Call Warrants related to the
Class A-2 Certificates, upon receipt of an opinion of counsel
satisfactory to the Warrant Agent that the provisions hereof
(including, without limitation, the following proviso) have seen
satisfied, for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of the Call
Warrants or of modifying in any manner the rights of the Warrant
Holders; provided, however, that no such amendment shall (i)
adversely affect in any material respect the interests of holders of
Certificates without the consent of the holders of Certificates
evidencing not less than the Required Percentage--Amendment of the
aggregate Voting Rights of such affected Certificates (as such terms
are defined in the Trust Agreement) and without written confirmation
from the Rating Agencies that such amendment will not result in a
downgrading or withdrawal of its rating of the Certificates; (ii)
alter the terms on which Call Warrants are exercisable or the
amounts payable upon exercise of a Warrant without the consent of
the holders of Certificates evidencing not less than 100% of the
aggregate Voting Rights of such affected Certificates and 100% of
the affected Warrant Holders or (iii) reduce the percentage of
aggregate Voting Rights required by (i) or (ii) without the consent
of the holders of all such affected Certificates. Notwithstanding
any other provision of this Warrant, this Section 6.4(b) shall not
be amended without the consent of 100% of the affected Warrant
Holders.
B-10
(iii) Promptly after the execution of any such amendment or
modification, the Warrant Agent shall furnish a copy of such
amendment or modification to each Warrant Holder, to the Trustee and
to the Rating Agencies. It shall not be necessary for the consent of
Warrant Holders or holders of Certificates under this Section to
approve the particular form of any proposed amendment, but it shall
be sufficient if such consent shall approve the substance thereof.
The manner of obtaining such consents and of evidencing the
authorization of the execution thereof shall be subject to such
reasonable regulations as the Warrant Agent may prescribe.
(e) Expiration. The right to exercise the Call Warrants shall expire
on the earliest to occur of (a) the cancellation thereof, (b) the termination
of the Trust Agreement, or (c) the liquidation, disposition, or maturity of
all of the Underlying Securities.
(f) Descriptive Headings. The headings in this Warrant Agent
Agreement are for purposes of reference only and shall not limit or otherwise
affect the meaning hereof.
(g) GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW
OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
(h) Judicial Proceedings; Waiver of Jury. Any judicial proceeding
brought against the Trust, the Trustee or the Warrant Agent with respect to
this Warrant Agent Agreement may be brought in any court of competent
jurisdiction in the County of New York, State of New York or of the United
States of America for the Southern District of New York and, by execution and
delivery of the Call Warrants, the Trustee on behalf of the Trust and the
Warrant Agent (a) accept, generally and unconditionally, the nonexclusive
jurisdiction of such courts and any related appellate court, and irrevocably
agree that the Trust, the Trustee and the Warrant Agent shall be bound by any
judgment rendered thereby in connection with this Warrant Agent Agreement or
the Call Warrants, subject to any rights of appeal, and (b) irrevocably waive
any objection that the Trust, the Trustee or the Warrant Agent 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.
(i) Nonpetition Covenant; No Recourse. Each of (i) the Warrant Holder
by its acceptance thereof, and (ii) the Warrant Agent agrees, that it shall
not (and, in the case of the Warrant Holder, that it shall not direct the
Warrant Agent to), until the date which is one year and one day after the
payment in full of the Certificates and all other securities issued by the
Trust, the Depositor or entities formed, established or settled by the
Depositor, acquiesce, petition or otherwise invoke or cause the Trust, the
Depositor, or any such other entity to invoke the process of the United States
of America, any State or other political subdivision thereof or any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government for the purpose of commencing or
sustaining a case by or against the Trust, the Depositor or any such other
entity under a federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator
or other similar official of the Trust, the Depositor or any such other entity
or all or any part of the
B-11
property or assets of Trust, the Depositor or any such other entity or
ordering the winding up or liquidation of the affairs of the Trust, the
Depositor or any such other entity.
B-12
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective duly authorized officers as of the date
first above written.
XXXXXX ABS CORPORATION,
as Depositor
By:
-----------------------------------
Name:
Title:
U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Trustee and Authenticating Agent
By:
-----------------------------------
Name:
Title:
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Warrant Agent
By:
-----------------------------------
Name:
Title:
B-13
EXHIBIT C
FORM OF INVESTMENT LETTER
QUALIFIED INSTITUTIONAL BUYER
Dated: [_______________]
U.S. Bank Trust National Association,
as Trustee
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx ABS Corporation,
as Depositor
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Corporate Backed Trust Certificates, Royal & Sun Alliance
Bond-Backed Series 2002-11
---------------------------------------------------------
Ladies and Gentlemen:
In connection with its proposed purchase of Call Warrants (the
"Securities") more particularly described in Schedule A hereto, the
undersigned purchaser (the "Purchaser") confirms that:
1. The Purchaser understands that substantial risks are involved in an
investment in the Securities. The Purchaser represents that in making its
investment decision to acquire the Securities, the Purchaser has not
relied on representations, warranties, opinions, projections, financial
or other information or analysis, if any, supplied to it by any person,
including you, Xxxxxx ABS Corporation, as depositor (the "Depositor"), or
U.S. Bank Trust National Association, as trustee (the "Trustee"), or any
of your or their affiliates, except as expressly contained in written
information, if any. The Purchaser has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits
and risks of an investment in the Securities, and the Purchaser is able
to bear the substantial economic risks of such an investment. The
Purchaser has relied upon its own tax, legal and financial advisors in
connection with its decision to purchase the Securities.
2. The Purchaser (A) is a "Qualified Institutional Buyer" (as defined in
Rule 144A under the Securities Act of 1933, as amended (the "1933 Act"))
and (B) is acquiring the Securities for its own account or for the
account of an investor of the type described in clause (A) above as to
each of which the Purchaser exercises sole investment discretion. The
Purchaser is purchasing the Securities for investment purposes and not
with a view to, or for, the offer or sale in connection with, a public
distribution or in any other manner that would violate the 1933 Act or
the securities or blue sky laws of any state.
3. The Purchaser understands that the Securities have not been and will not
be registered under the 1933 Act or under the securities or blue sky laws
of any state, and that (i) if it decides to
C-1
resell, pledge or otherwise transfer any Security, such resale, pledge or
other transfer must comply with the provisions of Section 3.2 of the
Warrant Agent Agreement relating to the Securities and (ii) it will, and
each subsequent holder will be required to, notify any purchaser of any
Security from it of the resale restrictions referred to in clause (i)
above.
4. The Purchaser understands that the Securities will bear a legend
substantially to the following effect, unless otherwise agreed by the
Depositor and the Trustee:
"THIS CALL WARRANT HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY
NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF
EXCEPT WHILE A REGISTRATION UNDER SUCH ACT IS IN
EFFECT OR PURSUANT TO AN EXEMPTION THEREFROM UNDER
SUCH ACT. THE CALL WARRANT REPRESENTED HEREBY MAY
BE TRANSFERRED ONLY IN COMPLIANCE WITH THE
CONDITIONS SPECIFIED HEREIN OR IN THE SERIES
SUPPLEMENT."
5. The Purchaser understands that no subsequent transfer of the Securities
is permitted unless (A) such transfer is of a Security with the
applicable minimum denomination and (B) the Purchaser causes the proposed
transferee to provide to the Depositor and the Trustee such documentation
as may be required pursuant to Section 3.2 of the Warrant Agent
Agreement, including, if required, a letter substantially in the form
hereof, or such other written statement as the Depositor shall reasonably
prescribe.
6. The Purchaser is a person or entity (a "Person") who is either
A. (1) a citizen or resident of the United States, (2) a corporation,
partnership or other entity organized in or under the laws of the
United States or any political subdivision thereof, (3) an estate
the income of which is includible in gross income for federal income
tax purposes regardless of source, or (4) a trust if a court within
the United States is able to exercise primary supervision of the
administration of the trust and one or more United States persons
have the authority to control all substantial decisions of the
trust, or
B. a Person not described in (A), whose ownership of such Security is
effectively connected with such Person's conduct of a trade or
business within the United States within the meaning of the Internal
Revenue Code of 1986, as amended (the "Code"), and its ownership of
any interest in such Security will not result in any withholding
obligation with respect to any payments with respect to the
Securities by any Person (other than withholding, if any, under
Section 1446 of the Code), or
C. a Person not described in (A) or (B) above, who is not a Person: (1)
that owns, directly or indirectly, 10% or more of the total combined
voting power of all classes of stock in the Underlying Securities
Issuer (as defined in the Prospectus Supplement) entitled to vote,
(2) that is a controlled foreign corporation related to the
Underlying Securities Issuer within the meaning of Section 864(d)(4)
of the Code, or (3) that is a
C-2
bank extending credit pursuant to a loan agreement entered into in
the ordinary course of its trade or business.
The Purchaser agrees that (I) if it is a Person described in
clause (A) above, it will furnish to the Depositor and the
Trustee a properly executed IRS Form W-9, and (II) if it is a
Person described in clause (B) above, it will furnish to the
Depositor and the Trustee a properly executed IRS Form W-8ECI,
and (III) if it is a Person described in clause (C) above, it
will furnish to the Depositor and the Trustee a properly executed
IRS Form W-8BEN (or, if the Purchaser is treated as a partnership
for federal income tax purposes, a properly executed IRS Form
W-8IMY with appropriate certification for all partners or members
attached). The Purchaser also agrees that it will provide a new
IRS form upon the expiration or obsolescence of any previously
delivered form, and that it will provide such other
certifications, representations or Opinions of Counsel as may be
requested by the Depositor and the Trustee.
7. The Purchaser agrees that if at some time in the future it wishes to
transfer or exchange any of the Securities, it will not transfer or
exchange any of the Securities unless such transfer or exchange is in
accordance with the terms of the Warrant Agent Agreement and other
documents applicable to the Security. The Purchaser understands that any
purported transfer of the Securities (or any interest therein) in
contravention of any of the restrictions and conditions in the
agreements, as applicable, shall be void, and the purported transferee in
such transfer shall not be recognized by any Person as a holder of such
Securities, for any purpose.
C-3
You and the Trustee are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby.
Very truly yours,
[-----------------------]
By: ____________________________________
Name: _______________________________
Title: ________________________________
C-4
Schedule A
Securities
----------
------------------------------------------------------------------------------------------------------------------------
LABS Series Name of Principal Principal or Date of
------------ -------- ---------- ------------- -------- --------------- --------------
Number Underlying Amount of Notional Warrant
------ ----------- ---------- --------- -------- --------- --------
Securities Class A-1 Amount of Agent
---------- --------- --------- -----
Issuer Certificates Class A-2 Agreement* A1 - Number A1 - Number
------ ------------ ---------- ---------- ----------- -----------
Certificates A2 - Number A2 - Number
------------ ----------- -----------
------------------------------------------------------------------------------------------------------------------------
2002-11 Royal & Sun $66,816,000 $66,816,000** June 7, 2002 A-1: A-1:
------- ----------- ----------- ------------- ------------ --- ---
Alliance
--------
Insurance A-2: A-2:
---------- --- ---
Group plc
------------------------------------------------------------------------------------------------------------------------
* Initial Closing Date
**Notional Balance
C-5
