Exhibit 4.1
TRUST AGREEMENT
between
CORPORATE ASSET BACKED CORPORATION,
as Depositor
and
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee and Option Agent
CABCO
Series 2004-1 Trust (▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital I)
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
AND AGREEMENT PROVISIONS*
Trust Indenture
Act Section Agreement Section
----------- -----------------
310(a)(1) 7.14(a)
(a)(2) 7.14(a)
(a)(3) 7.13
(a)(4) 7.1(f)
(a)(5) 7.14(a)
(b) 7.14(b)
(c) Not Applicable
311(a) 7.4
(b) 7.4
(c) Not Applicable
312(a) 3.7(a), 3.8(a)
(b) 3.8(b)
(c) 3.8(c)
313(a) 7.6
(b) 7.6
(c) 7.6
(d) 7.6
314(a) 4.1(a), 4.1(b)
315(a) 7.1(a), 7.1(b), 7.1(c)
(b) 7.1(g)
(d) 7.1(c)
(e) 7.1(j)
316(a)(1) 7.5(a)
316(a)(2) Not Applicable
316(b) 6.3(c)
316(c) 3.7(b)
317(a) Not Applicable
317(b) 6.4
----------------------
* This reconciliation and tie shall not, for any purpose, be deemed to be part
of the within agreement.
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Trust Indenture
Act Section Agreement Section
----------- -----------------
318(a) 10.12
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TABLE OF CONTENTS
PAGE
----
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions.............................................................................. 1
Section 1.2. Other Definitional Provisions............................................................ 9
Section 1.3. Incorporation by Reference of Trust Indenture Act........................................ 9
ARTICLE II
ORGANIZATION
Section 2.1. Creation of Trust; Trust Assets and Obligations.......................................... 9
Section 2.2. Name of Trust............................................................................ 11
Section 2.3. Business of Trust........................................................................ 11
Section 2.4. Trust Office............................................................................. 11
Section 2.5. Purposes and Powers...................................................................... 11
Section 2.6. Appointment of Trustee................................................................... 12
Section 2.7. Declaration of Trust..................................................................... 12
Section 2.8. Liability of Certificateholders.......................................................... 12
Section 2.9. Title to Trust Property.................................................................. 12
Section 2.10. Situs of Trust........................................................................... 12
Section 2.11. Representations and Warranties of Depositor.............................................. 12
Section 2.12. Tax Treatment............................................................................ 14
Section 2.13. Retained Interest........................................................................ 14
Section 2.14. Additional Underlying Securities and Certificates........................................ 14
Section 2.15. Call Options, Exercise of Call Options and Exchange of Certificates for Underlying
Securities............................................................................. 15
Section 2.16. Mergers.................................................................................. 18
Section 2.17. Grant of Security Interest............................................................... 18
ARTICLE III
THE CERTIFICATES
Section 3.1. The Certificates......................................................................... 20
Section 3.2. Form of the Certificates................................................................. 21
Section 3.3. Execution, Authentication and Delivery................................................... 22
Section 3.4. Registration of Certificates; Registration of Transfer and Exchange of Certificates...... 22
Section 3.5. Mutilated, Destroyed, Lost or Stolen Certificates........................................ 23
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Section 3.6. Persons Deemed Certificateholders........................................................ 24
Section 3.7. Access to List of Certificateholders' Names and Addresses................................ 24
Section 3.8. Preservation of Information; Communications to Certificateholders........................ 25
Section 3.9. Legend on Global Certificates............................................................ 25
Section 3.10. Definitive Certificates.................................................................. 26
Section 3.11. Definitive Certificates After Available Information Event................................ 26
Section 3.12. Transfer Restrictions on Class B-1 Certificates.......................................... 26
Section 3.13. Actions by Certificateholders............................................................ 29
Section 3.14. Additional Legends....................................................................... 29
ARTICLE IV
EXCHANGE ACT REPORTING BY TRUSTEE
Section 4.1. Exchange Act Reporting .................................................................. 31
ARTICLE V
ACTIONS BY TRUSTEE
Section 5.1. Prior Notice to Certificateholders and Option Agent with Respect to Certain Matters...... 32
Section 5.2. Action by Trustee with Respect to Certain Matters........................................ 32
Section 5.3. Majority Control......................................................................... 33
ARTICLE VI
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
Section 6.1. Establishment of Collection Account and Securities Account............................... 33
Section 6.2. Application of Trust Funds............................................................... 34
Section 6.3. Certain Provisions Applicable to all Distributions to Certificateholders................. 36
Section 6.4. Appointment of Paying Agent.............................................................. 37
Section 6.5. Method of Payment........................................................................ 38
Section 6.6. Reports to Certificateholders............................................................ 38
Section 6.7. Accounting and Information to Certificateholders, Internal Revenue Service and Others.... 38
Section 6.8. Signature on Returns..................................................................... 39
Section 6.9. No Implied Duties of the Depositor....................................................... 39
ARTICLE VII
THE TRUSTEE
Section 7.1. Duties of Trustee; Notice of Defaults.................................................... 39
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Section 7.2. Rights of Trustee........................................................................ 41
Section 7.3. Acceptance of Trusts and Duties.......................................................... 41
Section 7.4. Preferential Collection of Claims Against Trustee........................................ 42
Section 7.5. Action Upon Instruction by Certificateholders............................................ 42
Section 7.6. Furnishing of Documents; Reports to Certificateholders and DTC........................... 43
Section 7.7. Representations and Warranties of Trustee................................................ 44
Section 7.8. Reliance; Advice of Counsel.............................................................. 45
Section 7.9. Trustee May Own Certificates............................................................. 46
Section 7.10. Compensation and Indemnity............................................................... 46
Section 7.11. Replacement of Trustee................................................................... 46
Section 7.12. Merger or Consolidation of Trustee....................................................... 47
Section 7.13. Appointment of Co-Trustee or Separate Trustee............................................ 48
Section 7.14. Eligibility Requirements for Trustee..................................................... 49
Section 7.15. Voting of the Underlying Securities Other than in the Case of an Underlying Securities
Event of Default....................................................................... 49
Section 7.16. Trustee's Enforcement and Voting of Underlying Securities Upon an Underlying
Securities Event of Default............................................................ 51
ARTICLE VIII
TERMINATION OF AGREEMENT
Section 8.1. Termination of Agreement................................................................. 52
ARTICLE IX
AMENDMENTS
Section 9.1. Allocation of Voting Rights.............................................................. 53
Section 9.2. Amendments Without Consent of Certificateholders......................................... 54
Section 9.3. Amendments With Consent of Certificateholders............................................ 54
Section 9.4. Form of Amendments....................................................................... 55
ARTICLE X
MISCELLANEOUS
Section 10.1. Certificateholders Have No Legal Title to Trust Property................................. 55
Section 10.2. Limitations on Rights of Others.......................................................... 55
Section 10.3. Notices.................................................................................. 55
Section 10.4. Tax Classification Election.............................................................. 56
Section 10.5. Severability............................................................................. 56
Section 10.6. Counterparts............................................................................. 56
Section 10.7. Successors and Assigns................................................................... 56
Section 10.8. No Petition Covenant..................................................................... 57
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Section 10.9. No Recourse.............................................................................. 57
Section 10.10. Headings................................................................................. 57
Section 10.11. Governing Law............................................................................ 57
Section 10.12. Conflict with Trust Indenture Act........................................................ 57
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Exhibit A -- Series 2004-1 Underlying Securities Schedule
Exhibit B -- Terms of the Certificates
Exhibit C -- Form of Class A-1 Certificate
Exhibit D -- Form of Class B-1 Certificate
Exhibit E -- Form of Investment Letter for Class B-1 Certificates
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TRUST AGREEMENT
TRUST AGREEMENT, dated as of March 8, 2004 (this "Agreement"),
between Corporate Asset Backed Corporation, as depositor (the "Depositor"), and
U.S. Bank Trust National Association, as trustee (the "Trustee") for CABCO
Series 2004-1 Trust (▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital I) (the "Trust") and as option agent
(in such capacity, the "Option Agent") for the holders of the Certificates from
time to time with respect to the Call Options described below.
The Trust is issuing $62,500,000 in initial aggregate
certificate principal balance of class A-1 callable certificates (the "Class A-1
Certificates"), entitled to distributions of principal, premium (if any) and
interest, and $62,500,000 in initial aggregate Certificate Notional Amount of
class B-1 callable certificates (the "Class B-1 Certificates") entitled to
distributions of interest only (the "Class B-1 Certificates", and collectively
with the Class A-1 Certificates, the "Certificates").
AGGREGATE AGGREGATE
CERTIFICATE PRINCIPAL CERTIFICATE NOTIONAL ANNUAL
TITLE OF SECURITY BALANCE AMOUNT PASS-THROUGH RATE
----------------- --------------------- -------------------- -----------------
Class A-1 Certificates $62,500,000 N/A 6.00%
Class B-1 Certificates N/A $62,500,000 0.345%
The Trust is acquiring the securities described in Exhibit A,
excluding the Retained Interest. The Certificates, in the aggregate, will
evidence the entire beneficial ownership of the assets of the Trust, including
such securities, subject to the liabilities of the Trust, if any. The
Certificates are subject to the Call Options.
In consideration of the mutual agreements herein contained,
each party agrees that the following terms and provisions shall govern the
Certificates and the Trust, for the benefit of all the other parties and the
Certificateholders and Option Holders to the extent provided herein.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions.
Except as otherwise specified herein or as the context may
otherwise require, the following terms have the respective meanings set forth
below for all purposes of this Agreement.
"Affiliate" means, with respect to any specified Person, any
other Person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
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"Agreement" means this Trust Agreement.
"Available Funds" means, with respect to any Distribution Date
and any other date on which Underlying Securities are redeemed pursuant to the
Underlying Securities Trust Agreement, or purchased, repurchased, prepaid or
liquidated in whole or in part, an amount (including any non-cash property)
equal to all amounts received on or with respect to the Underlying Securities
and on deposit in the Collection Account on such Distribution Date or other
date, as applicable.
"Available Information Event" means that the Underlying
Securities Guarantor has suspended its Exchange Act reporting at a time when the
Exchange Act reporting requirements applicable to the Trust have not been
suspended or terminated.
"Benefit Plan Investor" means (a) an employee benefit plan (as
defined in Section 3(3) of ERISA) whether or not it is subject to the provisions
of Title I of ERISA, (b) a plan described in Section 4975(e)(1) of the Code, or
(c) any entity whose underlying assets include plan assets by reason of a plan's
investment in the entity.
"Business Day" means any day other than (i) a Saturday, a
Sunday or a day on which banking institutions in the City of New York are
authorized or obligated by law or executive order to be closed for business, or
(ii) a day that is not a business day for purposes of the Underlying Securities.
"Call Date" has the meaning specified in the Call Option
Agreements.
"Call Notice" has the meaning specified in the Call Option
Certificates.
"Call Option Agreement" means each of the Class A-1 Call
Option Agreement and the Class B-1 Call Option Agreement.
"Call Option Certificates" means the physical certificates
evidencing the Call Options, substantially in the forms attached as exhibits to
the Call Option Agreements.
"Call Options" means the call options with respect to the
Class A-1 Certificates and the Class B-1 Certificates granted to the Depositor
by UBS Securities LLC under the Call Option Agreements.
"Call Price" has the meaning specified in each Call Option
Agreement.
"Called Certificates" has the meaning set forth in Section
2.15(c).
"Certificates" has the meaning specified in the preamble to
this Agreement.
"Certificate Notional Amount" means, initially, with respect
to the Class B-1 Certificates and each Certificate of such Class, the amount
identified as the initial Certificate Notional Amount with respect to such Class
(in Section 3.1(b)) or Certificate, as applicable, and thereafter, such initial
amount as reduced by the aggregate of all amounts allocable to principal
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previously distributed to Class A-1 Certificateholders, and as increased
pursuant to Section 2.14, if applicable.
"Certificate Owner" means any Person who is the beneficial
owner of an interest in any Certificate.
"Certificate Principal Balance" means, initially, with respect
to the Class A-1 Certificates and each Certificate of such Class, the amount
identified as the initial Certificate Principal Balance with respect to such
Class (in Section 3.1(b)) or Certificate, as applicable, and, thereafter, such
initial amount as reduced by the aggregate of all amounts allocable to principal
previously distributed to Class A-1 Certificateholders, and as increased
pursuant to Section 2.14, if applicable.
"Certificate Register" and "Certificate Registrar" have the
respective meanings specified in Section 3.4.
"Certificateholder" means each Person in whose name a
Certificate is registered on the Certificate Register.
"Class" means Certificates having the same terms and
conditions and the same relative rights and interests.
"Class A-1 Call Option Agreement" means the agreement among
the Depositor, UBS Securities LLC and the Option Agent dated as of March 8,
2004, pursuant to which the Class A-1 Options are issued.
"Class A-1 Certificates" has the meaning specified in the
preamble to this Agreement.
"Class A-1 Option" has the meaning specified in the Class A-1
Call Option Agreement.
"Class B-1 Call Option Agreement" means the agreement among
the Depositor, UBS Securities LLC and the Option Agent dated as of March 8,
2004, pursuant to which the Class B-1 Options are issued.
"Class B-1 Certificates" has the meaning specified in the
preamble to this Agreement.
"Class B-1 Option" has the meaning specified in the Class B-1
Call Option Agreement.
"Clearing Agency" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act.
"Closing Date" means March 8, 2004.
"Code" means the Internal Revenue Code of 1986, as amended.
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"Collection Account" means the collection account established
pursuant to Section 6.1.
"Commission" means the Securities and Exchange Commission.
"Corporate Trust Office" means the principal office of the
Trustee at which at any particular time its corporate trust business shall be
administered, which office is initially located at U.S. Bank Trust National
Association, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, or the principal
corporate trust office of any successor Trustee as designated by such successor
Trustee by notice to the Certificateholders and each Rating Agency, or, in
either case, such other office as the Trustee may designate from time to time by
notice to the Certificateholders and each Rating Agency.
"Depositor" means Corporate Asset Backed Corporation, a
Delaware corporation, and any permitted successor or assignee.
"Depositor Order" means a written order signed by an
authorized officer of the Depositor.
"Distribution Date" means each February 15 and August 15 (or
if any of those dates is not a Business Day, the next succeeding Business Day)
commencing August 15, 2004, and ending on the earlier of the Final Distribution
Date and the date on which the Trust is terminated under this Agreement.
"DTC" means The Depository Trust Company and any successor.
"Eligible Trust Account" means a segregated account with (a)
the corporate trust department of the Trustee or (b) a trust company or
corporation with trust powers organized under the laws of the United States of
America or any one of the states thereof or the District of Columbia (or any
domestic branch of a foreign bank), having corporate trust powers and acting as
trustee for funds deposited in such account, so long as any of the securities of
such depository institution shall have a credit rating from each Rating Agency
in one of its four highest rating categories, and in the case of each of clauses
(a) and (b) that is identified and held separate and apart from the general
assets of the Trustee, and that contains only property held by the Trustee as
fiduciary.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Executive Officer" means, with respect to any corporation,
the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer,
President, any Vice President, the Secretary or the Treasurer of such
corporation and, with respect to any partnership, any general partner thereof.
"Final Distribution Date" means February 15, 2034.
4
"Grant" means to sell, convey, assign, transfer, create, ▇▇▇▇▇
▇ ▇▇▇▇ upon and a security interest in and right to set-off against, deposit,
set over and confirm to the Trustee pursuant to this Agreement, and the terms
"Granted" and "Granting" have meanings correlative to the foregoing. A Grant of
any Underlying Securities or of any instrument shall include all rights, powers
and options (but none of the obligations) of the Granting party thereunder,
including the immediate and continuing right to claim for, collect, receive and
give receipt for principal, premium, if any, and interest payments in respect of
such Underlying Securities and all other moneys payable thereunder, to give and
receive notices and other communications, to make waivers or other agreements,
to exercise all rights and options, and generally to do and receive anything
that the Granting party was entitled to do or receive thereunder or with respect
thereto prior to the Grant.
"Initial Purchaser" means UBS Securities LLC, in its capacity
as initial purchaser of the Class B-1 Certificates under the Purchase Agreement.
"Investment Company Act" means the Investment Company Act of
1940, as amended.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., and any
successor.
"Option Agent" means U.S. Bank Trust National Association, in
its capacity as Option Agent under each Call Option and each Call Option
Agreement, and any successor in such capacity as described in Section 2.1(b).
"Option Holder" means a holder of a Call Option.
"Opinion of Counsel" means one or more written opinions of
counsel, who may be employees of or counsel to the Depositor or any of its
Affiliates, and who shall be reasonably satisfactory to the Trustee, which
opinion or opinions shall be addressed to the Trustee and shall be in form and
substance reasonably satisfactory to the Trustee.
"Outstanding" means, as of any date of determination, all
Certificates theretofore authenticated and delivered under this Agreement
except:
(a) Certificates previously cancelled by the Certificate
Registrar or delivered to the Certificate Registrar for cancellation;
(b) Certificates or portions thereof the payment for
which money in the necessary amount has been theretofore irrevocably deposited
with the Trustee in trust for the Certificateholders of such Certificates; and
(c) Certificates in exchange for or in lieu of which
other Certificates have been authenticated and delivered pursuant to this
Agreement, or the replacement Certificates thereof recovered by the Trustee
pursuant to Section 3.5(b) when a Protected Purchaser presents proof
satisfactory to the Trustee that it holds the original Certificates and is a
Protected Purchaser;
provided that in determining whether the Certificateholders have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Certificates owned by or pledged to
5
the Depositor, the Trustee in its individual capacity, or any Affiliate of
either of the foregoing Persons shall be disregarded and for purposes of
determining the requisite Certificate Principal Balance of Certificates shall be
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Certificates that the Trustee
actually knows to be so owned shall be so disregarded. In order to give effect
to the foregoing provision, the Depositor shall promptly give or cause to be
given written notice to the Trustee of any Certificates to its knowledge owned
by or pledged to the Depositor or any Affiliate, and shall refrain (and use
commercially reasonable efforts to cause its Affiliates to refrain) from giving
any such request, demand, authorization, direction, notice, consent or waiver.
"Paying Agent" has the meaning specified in Section 6.4.
"Person" means any individual, corporation, estate, limited
liability company, partnership, joint venture, association, joint stock company,
trust (including any trust beneficiary), unincorporated organization or
government or any agency or political subdivision thereof.
"Placement Agency Agreement" means a placement agency
agreement dated March 1, 2004, between UBS Securities LLC and the Depositor in
terms of which UBS Securities LLC agrees to act as placement agent for the
Depositor in the sale of the Call Options on a "best efforts" basis.
"Placement Agent" means UBS Securities LLC, in its capacity as
Placement Agent under the Placement Agency Agreement.
"Proceeding" means any suit in equity, action at law or other
judicial or administrative proceeding.
"Protected Purchaser" has the meaning specified in the Uniform
Commercial Code as in effect in the State of New York.
"Purchase Agreement" means the purchase agreement dated March
1, 2004, between the Initial Purchaser and the Depositor in terms of which the
Initial Purchaser agrees to purchase from the Depositor, and the Depositor
agrees to sell to the Initial Purchaser, the Class B-1 Certificates.
"QIB" has the meaning specified in Section 3.12(e).
"Rating Agency" means each of Moody's and Standard & Poor's.
"Rating Agency Condition" means with respect to any specified
action, that each Rating Agency shall have been given 10 days' prior notice of
such action and that such Rating Agency shall have notified the Trustee in
writing that such action will not result in a reduction or withdrawal of the
then-current rating of any Class of the Certificates.
"Record Date" means, with respect to each Distribution Date,
the 15th calendar day prior to such Distribution Date, whether or not a Business
Day.
6
"Responsible Officer" means, with respect to the Trustee, any
officer within the Corporate Trust Office of the Trustee, including any Senior
Vice President, Vice President, Assistant Vice President, Secretary, Assistant
Secretary or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"Retained Interest" means, (a) with respect to the Underlying
Securities Granted to the Trustee on the Closing Date, the interest accrued on
such Underlying Securities from and including February 20, 2004, to but
excluding the Closing Date, and (b) with respect to additional Underlying
Securities Granted to the Trustee pursuant to the provisions of Section 2.14 on
any other date, interest accrued from and including the later of (x) February
20, 2004, and (y) the immediately preceding Underlying Securities Payment Date,
to but excluding the date of the Grant of such additional Underlying Securities.
"Rule 144A" has the meaning specified in Section 3.12(e).
"SEC Reporting Failure" " means that (i) an Available
Information Event has occurred, and either (x) the suspension of Exchange Act
reporting by the Underlying Securities Guarantor continues for a period of at
least one year, or (y) the Underlying Securities Guarantor announces or takes
measures that demonstrate, in connection with such suspension or at any time
thereafter, that it will no longer be a reporting company under the Exchange
Act; (ii) the Class A-1 Certificates have been be removed from the DTC
book-entry system; (iii) definitive certificates representing the Class A-1
Certificates have been issued to the beneficial owners of the Class A-1
Certificates; and (iv) the Underlying Securities Guarantor has not resumed
filing Exchange Act reports within 60 days of such distribution.
"Securities Account" means the securities account established
pursuant to Section 2.17.
"Securities Intermediary" means U.S. Bank Trust National
Association, maintaining the Securities Account in its capacity as securities
intermediary within the meaning of Section 8-102 of the UCC, and any qualified
successor.
"Standard & Poor's" means Standard & Poor's Ratings Services,
a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and any successor.
"Termination Date" has the meaning set forth in Section 8.1.
"TIA" means the Trust Indenture Act of 1939, as amended.
"Treasury Regulations" means regulations, including proposed
or temporary regulations, promulgated under the Code. References herein to
specific provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" means the trust created pursuant to this Agreement.
7
"Trust Assets" means the Underlying Securities, any proceeds
thereof, the Collection Account, and any other assets of the Trust from time to
time.
"Trustee" means the Trustee specified in this Agreement and
any successor qualifying under Section 7.14.
"UCC" means the Uniform Commercial Code as in effect from time
to time in the State of New York.
"Underlying Securities" has the meaning set forth in Section
2.1 and includes any additional Underlying Securities Granted to the Trustee
pursuant to the provisions of Section 2.14.
"Underlying Securities Event of Default" means the occurrence
of an event of default under the Underlying Securities Trust Agreement, and the
failure of the Underlying Securities Issuer to pay the Whole Amount Due after
demand by the Trustee made pursuant to Section 7.16(a) or otherwise to cure such
default in accordance with the provisions of the Underlying Securities Trust
Agreement.
"Underlying Securities Guarantor" means The ▇▇▇▇▇▇▇ ▇▇▇▇▇
Group, Inc.
"Underlying Securities Issuer" means the issuer of the
Underlying Securities and any successor provided for in the Underlying
Securities Trust Agreement.
"Underlying Securities Payment Date" means each February 15
and August 15 commencing August 15, 2004, and any other date on which Underlying
Securities are redeemed or repurchased, prepaid or liquidated in whole or in
part or on which any unscheduled payment is made on the Underlying Securities.
"Underlying Securities Trust Agreement" means the Trust
Agreement dated February 20, 2004, among the Underlying Securities Guarantor and
the Underlying Securities Trustee.
"Underlying Securities Trustee" means The Bank of New York
(Delaware).
"Underwriter" means UBS Securities LLC in its capacity as
Underwriter under the Underwriting Agreement.
"Underwriting Agreement" means the underwriting agreement
between the Depositor and the Underwriter, dated March 1, 2004 pursuant to which
the Underwriter agree to purchase from the Depositor, and the Depositor agrees
to sell to the Underwriter, the Class A-1 Certificates.
"Voting Rights" means the voting rights attaching to each
Class of Certificates, as specified in Article IX of this Agreement.
"Whole Amount Due" has the meaning assigned to such term in
Section 7.16(a) hereof.
8
Section 1.2. Other Definitional Provisions.
All references in this Agreement to Articles, Sections,
subsections and Exhibits are to Articles, Sections, subsections and Exhibits to
this Agreement unless otherwise specified. All terms defined in this Agreement
shall have the defined meanings when used in any certificate, notice, Call
Option, Certificate or other document made or delivered pursuant hereto, unless
otherwise defined therein. Whenever used in this Agreement, except as otherwise
expressly provided or unless the context otherwise requires, any noun or pronoun
shall be deemed to include the plural as well as the singular and to cover both
genders.
Section 1.3. Incorporation by Reference of Trust Indenture
Act.
Whenever this Agreement refers to a provision of the TIA, such
provision is incorporated by reference in and made a part of this Agreement. The
following TIA terms used in this Agreement have the following meanings:
"indenture securities" means the Certificates.
"obligor" on the Certificates means the Trustee on behalf of
the Trust and, to the extent specified in this Agreement, the Depositor.
All other TIA terms used in this Agreement that are defined by
the TIA, including by reference to another statute, or defined by a Commission
rule have the respective meanings assigned to them by such definitions.
ARTICLE II
ORGANIZATION
Section 2.1. Creation of Trust; Trust Assets and Obligations.
(a) A Trust is hereby created under the laws of the State
of New York for the benefit of the Certificateholders. The assets of the Trust
shall consist of:
(i) the securities described in Exhibit A,
exclusive of the Retained Interest, which are being Granted,
transferred and sold to the Trustee by the Depositor simultaneously
with the execution of this Agreement, and any additional Underlying
Securities Granted to the Trustee pursuant to Section 2.14 (in which
event Exhibit A shall be amended to reflect the amount and date of such
Grant), and
(ii) all right, title and interest in and to
distributions on the securities described in Exhibit A after the date
of this Agreement, exclusive of the Retained Interest, including any
distributions on any additional Underlying Securities Granted to the
Trustee pursuant to Section 2.14.
The securities described in Exhibit A, exclusive of the
Retained Interest, as amended after the Closing Date to reflect any subsequent
Grant of additional Underlying Securities, are referred to in this Agreement as
the "Underlying Securities". The Trustee shall hold
9
the assets of the Trust for the benefit of the Certificateholders, subject to
the obligations of the Trust, if any.
(b) The parties acknowledge that UBS Securities LLC, as
the initial purchaser, and then sole holder, of the Certificates, has granted
the Call Options to the Depositor under the Call Option Agreements, and the
Depositor intends to sell the Call Options, through UBS Securities LLC as
Placement Agent under the Placement Agency Agreement, to one or more third party
investors. By its purchase of a Certificate, (i) each Certificateholder agrees
to assume the obligation to perform the related Call Option on the terms and
conditions contained in the applicable Call Option Agreement, permitting the
Option Holder or its assignee to purchase such Certificate at the Call Price and
at the times specified in such Call Option Agreement and (ii) each
Certificateholder that purchases a Class A-1 Certificate directly from the
Underwriter, in the case of the Class A-1 Certificates, or the Initial
Purchaser, in the case of the Class B-1 Certificates, agrees to make the
"integration election" set forth in Section 2.12 below. By its purchase of a
Certificate, each Certificateholder further agrees (x) to appoint U.S. Bank
Trust National Association as its agent ("Option Agent") to act on its behalf
with respect to the related Call Option under this Agreement and the applicable
Call Option Agreement, and (y) that upon any transfer of a Certificate, the
transferor of the Certificate shall be released from its obligation to perform
the related Call Option, and the transferor's appointment of U.S. Bank Trust
National Association as its agent with respect thereto shall thereupon
terminate. Under the terms of the Call Options, each single Call Option relating
to $25.00 in Certificate Principal Balance of Class A-1 Certificates or $25.00
in Certificate Notional Amount of Class B-1 Certificates, respectively, may be
assigned by the holder thereof in whole but not in part by transfer in
accordance with the terms thereof to any person other than to the Depositor. The
Call Options are not obligations of or securities issued by the Trust, and are
enforceable by each Option Holder against the Certificateholders and the Option
Agent to the extent set forth in the Call Option Agreements; provided, however,
that each Certificateholder agrees, by accepting a Certificate, that following
an exercise of a Call Option in compliance with the Call Option Agreement, the
Trustee shall treat the Option Holder as the Certificateholder thereof, and
distribute the Underlying Securities to the Option Holder, as provided in
Section 2.15 hereof.
(c) The Depositor, concurrently with the execution and
delivery hereof, does hereby Grant to the Trustee, on behalf and for the benefit
of the Certificateholders and without recourse, all the right, title and
interest of the Depositor in, to and under the Underlying Securities, now
existing or hereafter acquired and all other assets included or to be included
in the Trust for the benefit of the Certificateholders. The Grant will include
all interest, premium (if any) and principal received by or on behalf of the
Depositor of, on or with respect to any Underlying Securities due after the
Closing Date, exclusive of the Retained Interest, which has not been Granted to
the Trustee.
(d) In connection with the Grant referred to in the
preceding paragraph, on the Closing Date, the Depositor shall deliver the
Underlying Securities to the Trustee through the facilities of DTC, and the
Trustee shall accept delivery of the Underlying Securities and shall credit the
Underlying Securities to a trust account of the Trustee, or its authorized
agent.
(e) The Grant of such Underlying Securities by the
Depositor accomplished hereby is absolute and is intended by the parties hereto
as a sale.
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Section 2.2. Name of Trust.
The name of the Trust is CABCO Series 2004-1 Trust (▇▇▇▇▇▇▇
▇▇▇▇▇ Capital I).
Section 2.3. Business of Trust.
Subject to Section 2.5, the Trustee may conduct the business
of the Trust, make and execute contracts and other instruments on behalf of the
Trust and ▇▇▇ and be sued on behalf of the Trust or in the name of the Trust,
subject to the terms of this Agreement. In order to effectuate the purpose of
the Trust, on the Closing Date the Trustee shall, on behalf of the Trust, (a)
acquire from the Depositor the Underlying Securities for the benefit of the
Certificateholders; (b) issue the Certificates to or upon the order of the
Depositor for sale pursuant to the Underwriting Agreement (in the case of the
Class A-1 Certificates) or pursuant to the Purchase Agreement (in the case of
the Class B-1 Certificates); and (c) enter into such other agreements, execute
such other documents and take such other actions as the Depositor may direct in
conjunction with the issuance of the Certificates.
Section 2.4. Trust Office.
The office of the Trust shall be in care of the Trustee at the
Corporate Trust Office, or at such other address as the Trustee may designate by
written notice to the Certificateholders, the Rating Agencies and the Depositor.
All Certificates may be surrendered for registration of transfer or exchange at
the Corporate Trust Office as provided in Section 3.4 and all notices and
demands to or upon the Trustee in respect of the Certificates and this Agreement
may be served on the Trustee at the Corporate Trust Office. The Trustee shall
give prompt written notice to the Depositor, the Rating Agencies and to the
Certificateholders of any change in the location of the Certificate Register or
any such office or agency.
Section 2.5. Purposes and Powers.
The purpose of the Trust is to engage in the following
activities:
(a) to acquire from the Depositor, and thereafter to
hold, the Underlying Securities;
(b) to issue the Certificates;
(c) to distribute to the Certificateholders as provided
in Articles VI and VIII hereof amounts, if any, received by the Trust on, or in
respect of, the Underlying Securities;
(d) to distribute to the Certificateholders the proceeds
of the exercise of Call Options by the Option Holders and to distribute to the
Option Holders any Underlying Securities for which the Called Certificates are
exchanged; and
(e) to engage in those limited activities, upon
appropriate direction of the Depositor, including entering into agreements that
are necessary, suitable or convenient to accomplish the foregoing or are
incidental thereto or connected therewith, provided that they are
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not inconsistent with the intended classification of the Trust as a grantor
trust for federal income tax purposes.
The Trust is hereby authorized to engage in the foregoing
activities. The Trust shall not (a) engage in any activity not required by the
terms of this Agreement, or (b) issue or sell any certificates or other
obligations other than the Certificates and additional Certificates issued
pursuant to Section 2.14, or incur, assume or guaranty any indebtedness. After
the Closing Date, and subject to Sections 5.2 and 5.3 below, the Trust shall not
purchase or otherwise acquire any assets except as provided by Section 2.14, or,
subject to Section 7.15 and, in the case of an Underlying Securities Event of
Default, Section 7.16, agree to any modification of the terms of the Underlying
Securities. The Trust shall not take any action that is inconsistent with its
intended classification as a grantor trust for federal income tax purposes.
Section 2.6. Appointment of Trustee.
The Depositor hereby appoints the Trustee as trustee of the
Trust effective as of the date hereof, to have all the rights, powers and duties
set forth herein.
Section 2.7. Declaration of Trust.
The Trustee hereby declares that it shall hold the Trust
Assets in trust upon and subject to the conditions set forth in this Agreement
for the use and benefit of the Certificateholders, subject to the obligations of
the Trust, if any. The Underlying Securities and their proceeds shall be held in
a segregated account of the Trustee that is identified and held separate and
apart from the general assets of the Trustee and that contains only property
held by the Trustee as fiduciary.
Section 2.8. Liability of Certificateholders.
No Certificateholder shall have any personal liability for any
liability or obligation of the Trust.
Section 2.9. Title to Trust Property.
Legal title to the Trust Assets shall be vested at all times
in the Trustee.
Section 2.10. Situs of Trust.
The Trust shall be located and administered in the State of
New York. All bank accounts maintained by the Trustee on behalf of the Trust
shall be located in and governed by the laws of the State of New York. The Trust
shall have no employees; provided, however, that nothing herein shall restrict
or prohibit the Trustee from having employees within or without the State of New
York. The principal office of the Trust shall be the Corporate Trust Office in
New York.
Section 2.11. Representations and Warranties of Depositor.
The Depositor hereby represents and warrants to the Trustee
that:
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(a) The Depositor has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with power and authority to own its properties and to conduct its
business as such properties are presently owned and such business is presently
conducted.
(b) The Depositor has obtained all necessary licenses and
approvals in all jurisdictions in which its ownership or lease of property or
the conduct of its business requires such qualification, except where failure to
obtain such qualification would have no material adverse effect on the
Depositor's ability to perform its obligations hereunder.
(c) The Depositor has the power and authority to execute
and deliver this Agreement and to carry out its terms; and the execution,
delivery and performance of this Agreement have been duly authorized by the
Depositor by all necessary corporate action. This Agreement, upon its execution
and delivery by the Depositor and assuming due authorization, execution and
delivery by the Trustee and Option Agent, will constitute a valid, legal and
binding obligation of the Depositor, enforceable against it in accordance with
the terms hereof, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, receivership, moratorium or other laws relating to
or affecting the rights of creditors generally, and by general equity principles
(regardless of whether such enforcement is considered a proceeding in equity or
at law).
(d) The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms of this Agreement do not
conflict with, result in any breach of any of the terms and provisions of or
constitute (with or without notice or lapse of time) a default under, the
certificate of incorporation or by-laws of the Depositor, or any indenture,
trust agreement or agreement or other instrument to which the Depositor is a
party or by which it is bound, or result in the creation or imposition of any
lien upon any of its properties pursuant to the terms of any such indenture or
trust agreement, other agreement or other instrument (other than pursuant to
this Agreement), or violate any law or, to the best of the Depositor's
knowledge, any order, rule or regulation applicable to the Depositor of any
court or of any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Depositor or any of
its properties.
The Depositor hereby represents and warrants to the Trustee
with respect to the Granted Underlying Securities that:
(i) The Depositor is duly authorized to deliver
the Underlying Securities to the Trustee;
(ii) The Underlying Securities so delivered are
genuine;
(iii) At the time of delivery of the Underlying
Securities, the Depositor owns such Underlying Securities, has the
right to transfer such Underlying Securities and such Underlying
Securities are free and clear of any lien, pledge, encumbrance, right,
charge, claim or other security interest; and
(iv) Such delivery is irrevocable and free of any
continuing claim by the Depositor.
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To the Depositor's knowledge, the information set forth on
Exhibit A attached hereto is true and correct in all material respects as of the
date hereof.
The representations and warranties of the Depositor set forth
in this Section 2.11 shall survive delivery of the Granted Underlying Securities
to the Trustee and shall inure to the benefit of the Trustee for the benefit of
the Certificateholders.
Section 2.12. Tax Treatment.
The Depositor and the Trustee, by entering into this
Agreement, and each Certificateholder and Certificate Owner, by acquiring a
Certificate or interest therein, (a) express their intention that the Trust (i)
be classified as a "grantor trust" under Subpart E, Part I of Subchapter J of
the Code and corresponding provisions of applicable state and local tax laws and
not an association taxable as a corporation for federal income tax purposes and
(ii) shall constitute a fixed investment trust for federal income tax purposes
under Treasury Regulation Section 301.7701-4, and (b) unless otherwise required
by appropriate taxing authorities, agree to treat the Certificates as
representing undivided beneficial ownership interests in the assets of the
Trust, subject to the obligations of the Trust (if any), for the purposes of
federal income taxes, state and local income and franchise taxes and any other
taxes imposed upon, measured by, or based upon gross or net income. Each initial
Certificateholder and Certificate Owner, unless it owns Class B-1 Certificates
and all of the Class B-1 Options, also agrees to elect and the Trustee in filing
the federal income information tax returns of the Trust agrees, except as
otherwise required under the Code or the Treasury Regulations, to treat its pro
rata portion of the Underlying Securities and the Call Options as integrated,
and the combined payments as payments on a single synthetic debt instrument in
accordance with Treasury Regulation Section 1.1275-6. Further, the provisions of
this Agreement shall be interpreted to further this intention of the parties.
Section 2.13. Retained Interest.
On the first Distribution Date after the Closing Date, the
Trust shall pay to the Depositor the Retained Interest on the securities
identified in Exhibit A, the right to payment of which is retained by the
Depositor and is not deposited in the Trust. On the first Distribution Date
after the Grant to the Trust of any Additional Underlying Securities, the Trust
shall pay to the Depositor the Retained Interest on such Additional Underlying
Securities, the right to payment of which shall be retained by the Depositor and
not deposited in the Trust.
Section 2.14. Additional Underlying Securities and
Certificates.
The Depositor may transfer and sell to the Trust after the
Closing Date, securities of the issue described in Exhibit A, to be held as
additional Underlying Securities in connection with the issuance of additional
Certificates under this Section 2.14, upon at least three (3) Business Days'
written notice to the Trustee, and subject to (a) satisfaction of the Rating
Agency Condition and (b) delivery of an Opinion of Counsel to the effect that
the sale of such additional Underlying Securities and the issuance of additional
Certificates as provided in this Section 2.14 would not adversely affect the
intended classification of the Trust as a grantor trust for federal income tax
purposes. Such transfer, sale and issuance shall be evidenced by a cross-receipt
between the Depositor and the Trustee. Upon such transfer and sale to the Trust,
(a) the Trustee shall
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authenticate and deliver to the Depositor, or its order, (i) Class A-1
Certificates and (ii) Class B-1 Certificates in the same relative proportions as
the Class A-1 Certificates and the Class B-1 Certificates issued on the Closing
Date, and with an aggregate initial Certificate Principal Balance and
Certificate Notional Amount, respectively, equal to the aggregate principal
amount of such additional Underlying Securities, provided that the aggregate
Certificate Principal Balance of additional Class A-1 Certificates and the
aggregate Certificate Notional Amount of Class B-1 Certificates shall in each
case be greater than or equal to $6,250,000, (b) UBS Securities LLC, as the
initial purchaser from the Depositor, and then sole holder, of the Certificates
shall grant a Call Option in respect of each Certificate to the Depositor, and
the Option Agent shall execute and deliver to the Depositor, and the Trustee
shall acknowledge, such Call Options on such additional Certificates, and (c)
the Depositor shall use reasonable commercial endeavors (directly or through UBS
Securities LLC), immediately after the grant of such Call Options, to sell such
Call Options to the same entities that then hold the Call Options on the
existing Certificates, and in the same proportions as those entities hold the
existing Call Options, or to any other persons that are designated by those
entities, or the Depositor shall ensure that the issuance of the additional
Certificates and the related Call Options shall not affect the right of the
holders of the existing Call Options to exercise their Call Options at any time.
Each condition to be satisfied with respect to a sale of Underlying Securities
on the Closing Date shall be satisfied with respect to a sale of additional
Underlying Securities on the date of sale thereof, each representation and
warranty set forth in this Agreement to be made on the Closing Date shall be
deemed made (with respect to such additional Underlying Securities, if
applicable) on such date of sale, and from and after such date of sale, all
additional Underlying Securities held by the Trustee shall be held on the same
terms and conditions as the Underlying Securities Granted on the Closing Date.
Any such additional Class A-1 Certificates and Class B-1 Certificates
authenticated and delivered shall have the same terms and rank pari passu with
Certificates of the corresponding Classes of Certificates previously issued in
accordance with this Agreement, and any such additional Call Options shall have
the same terms as the Call Options previously granted in accordance with the
Call Option Agreements.
Section 2.15. Call Options, Exercise of Call Options and
Exchange of Certificates for Underlying Securities.
(a) Concurrently with the execution of this Agreement,
U.S. Bank Trust National Association, as Option Agent, shall execute the Call
Option Agreements and the Call Options, dated as of the date hereof, initially
evidencing all of the Call Options.
(b) Pursuant to the Call Option Agreements, the Option
Agent must notify the Trustee immediately upon its receipt of a Call Notice. If
the number of Class A-1 Certificates or Class B-1 Certificates, respectively,
specified in such Call Notice is less than the outstanding number of Class A-1
Certificates or Class B-1 Certificates, respectively, the Trustee shall select
the Class A-1 Certificates or Class B-1 Certificates, respectively, to be
purchased under the Call Options as follows: the Class A-1 Certificates or Class
B-1 Certificates, respectively, selected by the Trustee shall be a pro rata
portion of the Class A-1 Certificates or Class B-1 Certificates, respectively,
held by each Certificateholder, provided that purchases of a fraction of a
single Class A-1 Certificate or a single Class B-1 Certificate shall not be made
and the Trustee shall round up or down the number of Certificates to be
purchased from each Class A-1 Certificateholder or Class B-1 Certificateholder
to avoid such fractional purchases.
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(c) Unless the Call Options are exercised in connection
with a tender offer, upon a Call Date with respect to the exercise of Call
Options, upon notification to the Trustee by the Option Agent of the receipt of
the Call Price by the Option Agent and the satisfaction of the conditions
specified in the Call Option Agreements, the Class A-1 Certificates and the
Class B-1 Certificates acquired pursuant to the exercise of the Call Options (in
each case, such Class A-1 Certificates and Class B-1 Certificates the "Called
Certificates") shall simultaneously with the delivery thereof to the Person
exercising such Call Options automatically be exchanged by the Trustee for
Underlying Securities having an aggregate principal amount equal to the
aggregate Certificate Principal Balance of such Class A-1 Certificates. Such
delivery and exchange shall be deemed to have occurred upon the Call Date unless
the Call Price in respect of all the Called Certificates has not been paid by
the Option Holder to the Option Agent. The parties acknowledge that, pursuant to
the Call Option Agreements, the Call Notice shall automatically expire (i) if
the Call Option is being exercised other than in connection with a tender offer,
and the Option Holder has not paid the Call Price to the Option Agent by 10:00
a.m. (New York City time) on the Call Date, or (ii) in the case of a tender
offer, if the Trustee has not received payment of the Call Price from the
Underlying Securities Issuer or other purchaser by 10:00 a.m. (New York City
time) on the later of (A) the date specified for settlement in the Call Notice,
or (B) the earlier to occur of the date immediately following the date on which
the tender offer is consummated or the date on which it expired unconsummated,
and that, in such event, none of the Option Holder, the Option Agent or the
Trustee shall have any obligation with respect to the Call Notice, and the
expiration of a Call Notice shall in no way affect the Option Holder's right to
deliver a Call Notice at a later date.
(d) The Called Certificates shall be cancelled by the
Certificate Registrar, shall be deemed no longer to be Outstanding and shall
cease accruing interest immediately after the exchange described in Section
2.15(c), whether or not presented or surrendered by the applicable
Certificateholders to the Certificate Registrar for cancellation in accordance
with the provisions of Section 3.4(d), and without the requirement of any
further action by the holders thereof.
(e) Unless the Call Options are exercised in connection
with a tender offer, following payment of the Call Price, the Option Agent shall
remit the Call Price to the Trustee, and subject to the following sentence, the
Trustee shall distribute the Call Price to Certificateholders of Called
Certificates. However, Certificateholders holding Called Certificates in
definitive physical form (other than DTC) shall not be entitled to be paid the
Call Price for such Called Certificates until such Called Certificates have been
presented and surrendered to the Trustee. If any Certificateholder shall not
surrender its Call Certificates that are in definitive physical form for
cancellation within six months after the Call Date, the Trustee shall give a
second written notice to such remaining Certificateholders to surrender their
Called Certificates that are in definitive physical form for cancellation and
receive the final distribution with respect thereto. If within one year after
the second notice any of the Called Certificates that are in definitive physical
form shall not have been surrendered for cancellation, the Trustee may take
appropriate steps, or may appoint an agent to take appropriate steps, to contact
the applicable Certificateholders concerning surrender of their Called
Certificates that are in definitive physical form, and the cost thereof shall be
paid out of the Call Price in respect of such Called Certificates.
(f) Each Certificateholder, by its acceptance of such
Certificate, (i) irrevocably appoints and authorizes the Option Agent to carry
out as attorney-in-fact of such Certificateholder the actions provided by this
Agreement or the Call Option Agreements to be carried out by such
16
Certificateholder or by the Option Agent as such attorney-in-fact, (ii) agrees
to assume and be bound by the terms and provisions of the related Call Option
and covenants and agrees to perform its obligations under such Call Option, and
(iii) consents to the provisions of the Call Option Agreements.
(g) Upon any transfer of a Certificate, the transferee
shall assume and be bound by the terms of the related Call Option and the Call
Option Agreements (without the requirement of any further action on the part of
such transferee), and the transferor shall be released from its obligations
under the related Call Option and such agreement, and the transferor's
appointment of U.S. Bank Trust National Association as its Option Agent with
respect thereto shall thereupon terminate (in each case without the requirement
of any further action on the part of such transferor).
(h) This Section 2.15 shall not provide the Option 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 2.15(c) shall entitle the Certificateholders or
the Option Holders, as applicable, to a distribution of the Underlying
Securities.
(i) The rights of the Certificateholders under this
Agreement and the Certificates are subject to the terms, provisions and
conditions of this Agreement, the Call Option Agreements and the Call Options.
(j) (i) If the Trustee receives any announcement or
proposal of an amendment to the Underlying Securities Indenture or the
Underlying Securities or a notice of redemption of, tender offer for or other
unscheduled repayment on or repurchase of some or all of the Underlying
Securities, the Trustee shall within two Business Days notify the Option Agent
and send to the Option Agent copies of all materials received by the Trustee in
connection therewith. If in connection with a tender offer for the Underlying
Securities the Trustee receives a Call Notice from any Option Holder, no later
than seven Business Days prior to the expiration of the tender offer acceptance
period, that such Option Holder desires to exercise Call Options in connection
with the consummation of any such tender offer, then the Trustee shall tender,
in compliance with the tender offer requirements, a principal amount of
Underlying Securities equal to the amount of Certificates subject to such Call
Options; provided, that the Trustee shall not so tender unless the tender offer
price shall equal or exceed the applicable Call Price.
(ii) The Call Date for any exercise of Call
Options 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, if
such payment occurs on or before 1:00 p.m., and the following Business Day if
such payment occurs after 1:00 p.m.
(iii) On the Call Date, the Call Price shall be
deducted from the tender offer proceeds and paid to Certificateholders by the
Trustee on behalf of the Option Agent, and the excess of the tender offer
proceeds over the Call Price shall be paid to the exercising Option Holders pro
rata in respect to their proportionate exercises of Call Options.
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(iv) If fewer than all tendered Underlying
Securities are accepted for payment and paid for, (A) the number of Call Options
exercised shall be reduced so that the Certificate Principal Balance and
Certificate Notional Amount of the applicable called Class A-1 and Class B-1
Certificates, respectively, corresponds to the principal amount of Underlying
Securities accepted for payment and paid for; (B) each Option Holder's exercise
shall be reduced by its share (proportionate to the amount specified in its Call
Notice) of the principal amount of Underlying Securities not accepted for
payment and paid for, (C) the Call Price shall be determined after giving effect
to the reductions specified in clauses (A) and (B); (D) the Call Options not
exercised shall remain outstanding; and (E) the excess of the tender offer
proceeds over the Call Price shall be allocated in proportion to the number of
Call Options deemed exercised as set forth in clause (A) above.
(v) If (A) the tender offer is terminated by the
Underlying Securities Issuer or any other tender offeror without consummation
thereof, if (B) all tenders by the Trust of Underlying Securities are otherwise
rejected or if (C) the Trustee shall not have received payment of the tender
price from the Underlying Securities Issuer or other purchaser of the Underlying
Securities in immediately available funds by 10:00 a.m. on the later of (x) the
date specified for settlement in the Call Notice, or (y) the earlier to occur of
the date immediately following the date on which the tender offer is consummated
or the date on which it expires unconsummated, then (1) the Call Notices will be
of no further force and effect, and (2) any Call Options for which Call Notices
were given will be deemed not exercised and will remain outstanding.
(vi) The parties acknowledge that under the Call
Option Agreements, if Underlying Securities are redeemed in part by the
Underlying Securities Issuer and the Option Holders do not exercise Class A-1
Options and Class B-1 Options with respect to all the Underlying Securities
redeemed in such partial redemption, the number of Class A-1 Options and Class
B-1 Options held by each Option Holder shall be reduced proportionately so that
the aggregate amount of Certificates callable by the exercise of Call Options
shall equal the amount of outstanding Certificates after giving effect to such
partial redemption.
Section 2.16. Mergers.
The Trust shall not dissolve, liquidate, merge or consolidate
with any other trust, corporation, company or entity or sell any of its assets,
except as expressly provided herein, or acquire all or substantially all of the
assets or capital stock or other ownership interest of any other corporation,
company or entity.
Section 2.17. Grant of Security Interest.
(a) 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 the Underlying Securities by the Depositor to secure a debt or
other obligation of the Depositor.
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(b) In the event that, notwithstanding the aforementioned
intent of the parties, any Underlying Securities are held to be property of the
Depositor, then (i) it is the express intent of the parties that such conveyance
be deemed a pledge of such Underlying Securities by the Depositor to the Trustee
to secure a debt or other obligation of the Depositor and (ii)(A) this Agreement
shall be deemed to be a security agreement within the meaning of Articles 8 and
9 of the UCC; (B) the conveyance provided for in Section 2.1(a) shall be deemed
to be a Grant by the Depositor to the Trustee of a security interest in all the
Depositor's right, title and interest in and to such Underlying Securities and
all amounts payable to the holders of such Underlying Securities in accordance
with the terms hereof and all proceeds of the conversion, voluntary or
involuntary, of the foregoing into cash, instruments, securities or other
property including all amounts from time to time held or invested in the
Collection Account, whether in the form of cash, instruments, securities or
other property; (C) the obligations secured by such security agreement shall be
deemed to be all the Depositor's obligations under this Agreement including the
obligation to provide to the Certificateholders the benefits of this Agreement
relating to the Underlying Securities and the Trust; and (D) notifications to
persons holding such property, and acknowledgements, receipts or confirmations
from persons holding such property shall be deemed notifications to,
acknowledgements, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of the Trustee for the purpose of perfecting
such security interest under applicable law.
In such event, the Depositor will be deemed to have hereby
Granted to the Trustee a security interest in the Underlying Securities and all
other property described in (ii)(B) of the preceding paragraph, for the purpose
of securing to the Trustee the performance by the Depositor of the obligations
described in clause (ii)(C) of the preceding paragraph.
(c) [Reserved].
(d) In connection with any such deemed grant of a
security interest in the Underlying Securities (including additional Underlying
Securities transferred to the Trustee pursuant to Section 2.14),
(i) the Depositor hereby represents and warrants
as follows:
(A) In the event the Underlying
Securities are held to be property of the Depositor, then this
Agreement creates a valid and continuing security interest (as
defined in the UCC) 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. Under the UCC as in effect on
the date of this Agreement, if this Agreement were deemed to
create a security interest, the procedures specified in this
Agreement would be sufficient to maintain a first priority
lien on the Underlying Securities for so long as the
Underlying Securities remain outstanding;
(B) 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;
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(C) 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;
(D) Depositor has not consented to the
compliance by the Securities Intermediary with entitlement
orders of any Person other than the Trustee, as trustee of the
Trust; and
(ii) the Trustee hereby represents and warrants
as follows:
(A) It has taken all steps necessary to
cause the Securities Intermediary for the Securities Account
to identify on its records that the Trustee, as the trustee
for the Trust, is the Person having a security entitlement
against the Securities Intermediary in the Securities Account;
(B) The Underlying Securities have been
credited to a trust account (the "Securities Account") of the
Trustee, or its authorized agent, in accordance with Section
6.1. The Trustee, as Securities Intermediary for the
Securities Account, has agreed to treat the Underlying
Securities as "financial assets" within the meaning of the
UCC; and
(C) The Securities Account is not in
the name of any Person other than the Trustee.
ARTICLE III
THE CERTIFICATES
Section 3.1. The Certificates.
(a) The Certificates shall be issued in two Classes and
shall have the terms set forth in this Agreement. The Certificates shall be
issued in substantially the forms set forth in Exhibits C and D to this
Agreement, respectively, with such changes as shall be approved by the Depositor
and the Trustee, such approval to be manifested by the execution and
authentication thereof by the Trustee. The Certificates shall evidence the
entire undivided beneficial ownership of the assets of the Trust, subject to the
liabilities of the Trust (if any), and amounts distributable in respect of the
Certificates shall be payable solely from payments or property received by the
Trustee on or in respect of the Underlying Securities, after satisfaction of
such liabilities (if any).
(b) The Certificates shall consist of the Class A-1
Certificates and the Class B-1 Certificates, and, within each class, all
Certificates will be pari passu in priority of payments and otherwise. The right
of the holders of the Class B-1 Certificates to receive distributions allocable
to interest will rank pari passu with the right of the Class A-1 Certificates to
receive distributions
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allocable to interest, each of the Class A-1 Certificates shall be issued in
denominations of $25.00 and integral multiples of $25.00 in excess thereof and
each of the Class B-1 Certificates shall be issued with a Certificate Notional
Amount of $25.00 and integral multiples of $25.00 in excess thereof. Purchases
and redemptions of a fraction of a single Class A-1 Certificate or a single
Class B-1 Certificate shall not be permitted.
The Class A-1 Certificates shall have an initial aggregate
Certificate Principal Balance of $62,500,000. The Class B-1 Certificates shall
have an initial aggregate Certificate Notional Amount of $62,500,000. Each of
the Certificateholders of the Class A-1 Certificates shall be entitled to a
distribution of principal (and any premium) on the Final Distribution Date (or
any Underlying Securities Payment Date on which principal or premium is paid),
to the extent of principal payments made on the Underlying Securities (including
any premium) on such date.
(c) The holders of the Class A-1 Certificates shall be
entitled to receive on each Distribution Date the interest, if any, received on
the Underlying Securities, to the extent necessary to distribute interest at a
pass-through rate of 6.00% per annum on the Outstanding Certificate Principal
Balance of the Class A-1 Certificates. The holders of the Class B-1 Certificates
shall be entitled to receive on each Distribution Date the interest, if any,
received on the Underlying Securities, to the extent necessary to distribute
interest at a pass-through rate of 0.345% per annum on the Outstanding
Certificate Notional Amount of the Class B-1 Certificates.
(d) If the Underlying Securities Issuer defers the
payment of interest on the Underlying Securities, interest on the Class A-1 and
Class B-1 will continue to accrue during any such deferral period at a rate of
6.00% per annum on the Class A-1 Certificates and 0.345% per annum on the Class
B-1 Certificates. Any additional interest paid by the Underlying Securities
Issuer as a result of such delay or deferral will be distributed to the holders
of the certificates pro rata based on the ratio of the amount of deferred
interest distributions payable on the Class A-1 Certificates at the pass-through
rate of 6.00% on their Certificate Principal Balances to the amount of deferred
interest distributions payable on the Class B-1 Certificates at the pass-through
rate of 0.345% on their Certificate Notional Amounts. For the avoidance of
doubt, if the Underlying Securities Issuer pays interest on such deferred
interest at the rate of 6.345% per annum, each class of certificates will
likewise receive interest on such deferred interest at the rate of 6.345% per
annum.
Section 3.2. Form of the Certificates.
(a) The Class A-1 Certificates shall initially be issued
in one or more global Certificates in fully registered form, in the name of Cede
& Co., nominee of DTC, substantially in the form set forth in Exhibit C. The
Class B-1 Certificates shall initially be issued in the form of one or more
definitive Certificates in registered form, in the names and denominations
specified by the Initial Purchaser, substantially in the form set forth in
Exhibit D. The Trustee, upon receipt of a Depositor Order to that effect, shall
cause such Certificates to be executed and authenticated as provided in Section
3.3 concurrently with the sale of the Underlying Securities to the Trust upon
written order of the Depositor. Each Certificate shall bear upon its face the
designation so selected for the Class to which it belongs, and may have such
letters, numbers or other marks of identification as the Depositor and the
Trustee may determine. All Certificates of the same Class shall be identical in
all respects except for the denominations thereof and, if applicable, the name
21
of the registered Certificateholder and the number of the Certificate. All
Certificates and all Classes issued under this Agreement shall be in all
respects equally and ratably entitled to the benefits of this Agreement, without
preference, priority or distinction on account of the actual time or times of
authentication and delivery, all in accordance with the terms and provisions of
this Agreement.
(b) The terms of the Forms of Certificates set forth in
Exhibits C and D to this Agreement shall form part of this Agreement.
Section 3.3. Execution, Authentication and Delivery.
The Certificates shall be executed on behalf of the Trust by
manual or facsimile signature of a Responsible Officer of the Trustee, pursuant
to a written order signed by the Depositor, and authenticated by a Responsible
Officer of the Trustee. Certificates bearing the manual or facsimile signatures
of individuals who were, at the time when such signatures shall have been
affixed, authorized to execute or authenticate Certificates on behalf of the
Trust, shall be valid and binding obligations of the Trust, notwithstanding that
such individuals or any of them shall have ceased to be so authorized prior to
the authentication and delivery of such Certificates or did not hold such
offices at the date of authentication and delivery of such Certificates. No
Certificate shall entitle its holder to any benefit under this Agreement, or
shall be valid for any purpose, unless there shall appear on such Certificate a
certificate of authentication substantially in the form set forth in Exhibit C
or D, as applicable, executed by the Trustee by manual signature. Such
authentication shall constitute conclusive evidence that such Certificate shall
have been duly authenticated and delivered hereunder. All Certificates shall be
dated the date of their authentication.
Section 3.4. Registration of Certificates; Registration of
Transfer and Exchange of Certificates.
(a) The Certificate Registrar shall keep or cause to be
kept, at the office or agency of the Trust maintained pursuant to Section 2.4, a
register (the "Certificate Register") in which, subject to such reasonable
regulations as it may prescribe, the registrar appointed by the Depositor (the
"Certificate Registrar") shall provide for the registration of Certificates and
of transfers and exchanges of Certificates as provided herein; provided,
however, that no Certificate may be subdivided upon transfer or exchange such
that the denomination of any resulting Certificate is other than the authorized
denominations for the relevant Class specified in Section 3.1(b). The initial
Certificate Registrar shall be the Trustee. Upon any resignation of a
Certificate Registrar, the Trustee shall promptly appoint a successor or, if it
elects not to make such an appointment, assume the duties of Certificate
Registrar.
(b) Upon surrender for registration of transfer of any
Certificate at the Corporate Trust Office maintained pursuant to Section 2.4,
the Trustee shall execute on behalf of the Trust, and shall authenticate and
deliver in the name of the designated transferee or transferees, as provided in
Section 3.3, one or more new Certificates of the same Class, in authorized
denominations and of a like aggregate Certificate Principal Balance or
Certificate Notional Amount, dated the date of authentication by the Trustee.
22
(c) At the option of a Certificateholder, Certificates
may be exchanged for other Certificates of the same Class, in authorized
denominations and of a like aggregate Certificate Principal Balance or
Certificate Notional Amount, upon surrender of the Certificates to be exchanged
at the office or agency of the Trust maintained pursuant to Section 2.4.
Whenever any Certificates are so surrendered for exchange, the Trustee shall
execute on behalf of the Trust, and shall authenticate and deliver in the name
of the Certificateholder, one or more new Certificates dated the date of
authentication by the Trustee. Such Certificates shall be delivered to the
Certificateholder making the exchange.
(d) Every Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form reasonably satisfactory to the Trustee and the
Certificate Registrar, duly executed by the Certificateholder or its attorney
duly authorized in writing. Each Certificate surrendered for registration of
transfer and exchange shall be cancelled and subsequently destroyed by the
Trustee or the Certificate Registrar in accordance with its customary practice.
(e) No service charge shall be made for any registration
of transfer or exchange of Certificates, but the Trustee or the Certificate
Registrar may require the payment by the Certificateholder 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.
(f) The provisions of Sections 7.1, 7.3, 7.8 and 7.10
shall apply to the Trustee in its role as Certificate Registrar, for so long as
the Trustee shall act as Certificate Registrar.
Section 3.5. Mutilated, Destroyed, Lost or Stolen
Certificates.
(a) If (i) any mutilated Certificate is surrendered to
the Certificate Registrar, or the Certificate Registrar receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate, and (ii)
there is delivered to the Certificate Registrar, the Trustee and the Depositor
such security or indemnity as may be required by them to hold each of them
harmless, then, in the absence of notice to the Certificate Registrar or the
Trustee that such Certificate has been acquired by a Protected Purchaser, the
Trustee shall execute on behalf of the Trust, and shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a replacement Certificate of the same Class and a like
aggregate Certificate Principal Balance or Certificate Notional Amount;
provided, however, that if any such mutilated, destroyed, lost or stolen
Certificate shall have become or within seven days shall be due and payable,
then instead of issuing a replacement Certificate the Trustee may pay such
mutilated, destroyed, lost or stolen Certificate when so due or payable.
(b) If, after the delivery of a replacement Certificate
or payment in respect of a mutilated, destroyed, lost or stolen Certificate
pursuant to Section 3.5(a), a Protected Purchaser of the original Certificate in
lieu of which such replacement Certificate was issued presents for payment such
original Certificate, the Trustee shall be entitled to recover such replacement
Certificate or payment from the Person to whom it was delivered or any Person
taking such replacement Certificate from such Person to whom such replacement
Certificate was delivered or any assignee of such Person, except a Protected
Purchaser, and shall be entitled to recover upon the
23
security or indemnity provided therefor to the extent of any loss, damage, cost
or expense incurred by the Trustee in connection therewith.
(c) In connection with the issuance of any replacement
Certificate under this Section 3.5, the Trustee may require the payment by the
Certificateholder of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other reasonable expenses
(including the fees and expenses of the Trustee and the Certificate Registrar)
connected therewith.
(d) Any Certificate issued pursuant to this Section 3.5
in replacement of any mutilated, destroyed, lost or stolen Certificate shall
represent ownership of a beneficial interest in the Trust Assets, and shall be
entitled to all the benefits of this Agreement equally and proportionately with
any and all other Certificates duly issued hereunder.
(e) The provisions of this Section 3.5 are exclusive and
shall preclude (to the extent lawful) all other rights and remedies with respect
to the replacement or payment of mutilated, destroyed, lost or stolen
Certificates.
Section 3.6. Persons Deemed Certificateholders.
Prior to due presentation of a Certificate for registration of
transfer, the Trustee, the Certificate Registrar, the Depositor and their
respective employees, officers, agents and Affiliates may treat the Person in
whose name the Certificate is registered in the Certificate Register as the
Certificateholder of such Certificate for the purpose of receiving distributions
pursuant to Articles VI and VIII and for all other purposes whatsoever, and none
of the Trustee, the Certificate Registrar, the Depositor and their respective
employees, officers, agents and Affiliates shall be affected by any notice to
the contrary.
Section 3.7. Access to List of Certificateholders' Names and
Addresses.
(a) The Depositor shall furnish or cause to be furnished
to the Trustee on the Record Date before each Distribution Date, and at such
other times as the Trustee may request in writing, a list, in such form as the
Trustee may reasonably require, to the extent such information is in the
possession or control of the Depositor, of the names and addresses of the
Certificateholders as of such Record Date; provided, however, that so long as
the Trustee is the Certificate Registrar, the Depositor shall not be required to
furnish such list to the Trustee. If the Trustee is the Certificate Registrar,
upon written request by the Depositor, the Trustee shall furnish or cause to be
furnished to the Depositor, within fifteen (15) days after receipt of such
request, a list, in such form as the Depositor may reasonably require, of the
names and addresses of the Certificateholders as of the most recent Record Date.
Each Certificateholder, by receiving and holding a Certificate, shall be deemed
to have agreed not to hold any of the Depositor or the Trustee accountable by
reason of the disclosure of its name and address, regardless of the source from
which such information was derived.
(b) For purposes of determining the identity of
Certificateholders entitled to vote or in connection with any notice or other
communication to be provided to Certificateholders pursuant to this Agreement
with respect to any consent or other action to be taken by Certificateholders,
the Trustee shall establish a record date for such consent or other action and
24
give each Certificateholder notice of such record date not less than fifteen
(15) calendar days in advance of such record date to the extent possible. Such
record date shall be the later of thirty (30) days prior to the first
solicitation of such consent or other action and the date of the most recent
list of Certificateholders, if any, furnished to the Trustee pursuant to Section
3.7(a).
Section 3.8. Preservation of Information; Communications to
Certificateholders.
(a) The Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of the Certificateholders
contained in the most recent list furnished to the Trustee as provided in
Section 3.7(a), if any, and the names and addresses of Certificateholders
received by the Trustee in its capacity as Certificate Registrar. The Trustee
may destroy any list furnished to or prepared by it as provided in such Section
3.7(a) upon receipt or preparation of a new list.
(b) Certificateholders shall have the right to
communicate pursuant to Section 312(b) of the TIA with other Certificateholders
with respect to their rights under this Agreement or the Certificates, and the
Trustee shall take such action, from time to time, as may be required by the
provisions of Section 312(b) of the TIA.
(c) The Depositor, the Trustee and the Certificate
Registrar shall have the protection provided by Section 312(c) of the TIA.
Section 3.9. Legend on Global Certificates.
Each global Certificate for a Class A-1 Certificate shall bear
the following legend:
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE
MEANING OF THE TRUST AGREEMENT HEREINAFTER REFERRED
TO AND IS REGISTERED IN THE NAME OF THE NOMINEE OF
THE DEPOSITORY TRUST COMPANY ("DTC"), CEDE & CO. THIS
CERTIFICATE IS EXCHANGEABLE FOR CERTIFICATES
REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR
ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE TRUST AGREEMENT AND MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY DTC OR BY A NOMINEE
OF DTC TO DTC OR ANOTHER NOMINEE OF DTC.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC TO THE TRUST OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
DTC'S NOMINEE, CEDE & CO., OR IN SUCH OTHER NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND
25
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.
Section 3.10. Definitive Certificates.
If (a) DTC or the Depositor advises the Trustee that DTC is no
longer willing or able to continue as depositary, and the Depositor does not
appoint a qualified successor within 90 days; or (b) an Available Information
Event occurs, then, in any such case, the Trustee shall notify DTC of the
occurrence of any such event and of its intent to make definitive Certificates
available, and shall request the surrender by DTC to the Trustee of the global
Certificate or Certificates evidencing the Certificates and shall notify all DTC
participants with interest in the Class A-1 Certificates of the availability of
definitive certificates through DTC. Upon such surrender, accompanied by
registration instructions from DTC, the Trustee shall execute and authenticate
the definitive Certificates in accordance with the instructions of DTC. Neither
the Certificate Registrar nor the Trustee shall be liable for any delay in
delivery of such instructions and each may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of definitive
Certificates, the Trustee shall recognize the registered holders of the
definitive Certificates as Certificateholders and shall notify the Underlying
Securities Issuer that the Underlying Securities are held pursuant to this Trust
Agreement and that the holders of the Certificates constitute record holders of
the Underlying Securities.
Section 3.11. Definitive Certificates After Available
Information Event.
If an Available Information Event occurs, then not later than
30 days after notice to the Trustee by the Depositor of such event, the Trustee
shall cause the removal of the Certificates from the DTC book-entry system as
set forth in Section 3.10 of this Agreement and shall notify the Underlying
Securities Guarantor that the Certificateholders constitute record holders of
the Underlying Securities for purposes of the Exchange Act.
Section 3.12. Transfer Restrictions on Class B-1 Certificates.
(a) No Certificateholder or Certificate Owner may, in any
transaction or series of transactions, directly or indirectly (each of the
following, a "transfer"), (i) sell, assign or otherwise in any manner dispose of
all or any part of its interest in any Class B-1 Certificate issued to it,
whether by act, deed, merger or otherwise, or (ii) mortgage, pledge or create a
lien or security interest in such beneficial interest, unless such transfer
satisfies the conditions set forth in this Section 3.12. No purported transfer
of any legal, equitable or beneficial interest in any Class B-1 Certificate or
any portion thereof that is not made in accordance with this Section 3.12 shall
be given effect by or be binding upon the Trust, the Depositor or the Trustee
and any such purported transfer shall be null and void ab initio and vest in the
transferee no rights against the Trust, the Depositor or the Trustee.
26
(b) By its acceptance of a Class B-1 Certificate or
beneficial interest therein, each Certificateholder or Certificate Owner with
respect to such Certificate will be deemed to have represented and agreed that
transfer of such Certificate or interest is restricted and agrees that it shall
transfer such Certificate or interest only in accordance with the terms of this
Agreement and such Certificate and in compliance with applicable law.
(c) The Class B-1 Certificates may not be purchased or
held by (a) a Benefit Plan Investor or (b) any Person acting on behalf of a
Benefit Plan Investor, unless (i) the purchaser is an insurance company, (ii) it
is not a Person who has discretionary authority or control with respect to the
assets of the Issuer or a Person who provides investment advice for a fee
(direct or indirect) to or with respect to such assets, or an affiliate of such
a Person, (iii) the sole source of the funds being used to effect its purchase
of such Class B-1 Certificates is its general account, (iv) on the date it
purchases any such Class B-1 Certificates, less than 25% of the assets of its
general account (as determined by such insurance company) constitute plan
assets, (v) the acquisition and holding of such Class B-1 Certificates will not
constitute a nonexempt prohibited transaction in violation of section 406 of
ERISA and section 4975 of the Internal Revenue Code, and (vi) if, as of any
later date on which any Person purchases any of such Class B-1 Certificates, 25%
or more of the assets of such general account constitute plan assets or if such
company becomes a Person who has discretionary authority or control with respect
to the assets of the Issuer or a Person who provides investment advice for a fee
(direct or indirect) to or with respect to such assets, or an affiliate of such
a Person, then such insurance company will dispose of such Class B-1
Certificates then held in its general account promptly and in any event by the
end of the next calendar quarter.
(d) In addition to any other legends provided for herein,
each Class B-1 Certificate issued hereunder will contain the following legend:
NO EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3)
OF ERISA) WHETHER OR NOT IT IS SUBJECT TO TITLE I OF
ERISA, NO PLAN (AS DESCRIBED IN SECTION 4975(e)(1) OF
THE CODE) AND NO ENTITY WHOSE UNDERLYING ASSETS
INCLUDE "PLAN ASSETS" BY REASON OF ANY SUCH PLAN'S
INVESTMENT IN THE ENTITY (EACH, A "PLAN"), OR ANY
PERSON ACTING ON BEHALF OF ANY PLAN, MAY PURCHASE OR
HOLD A CERTIFICATE OR ANY INTEREST THEREIN, UNLESS
(I) THE PURCHASER IS AN INSURANCE COMPANY, (II) IT IS
NOT A PERSON WHO HAS DISCRETIONARY AUTHORITY OR
CONTROL WITH RESPECT TO THE ASSETS OF THE TRUST OR A
PERSON WHO PROVIDES INVESTMENT ADVICE FOR A FEE
(DIRECT OR INDIRECT) TO OR WITH RESPECT TO SUCH
ASSETS, OR AN AFFILIATE OF SUCH A PERSON, (III) THE
SOLE SOURCE OF THE FUNDS BEING USED TO EFFECT ITS
PURCHASE OF SUCH CERTIFICATES IS ITS GENERAL ACCOUNT,
(IV) ON THE DATE IT PURCHASES ANY SUCH
27
CERTIFICATES, LESS THAN 25% OF THE ASSETS OF ITS
GENERAL ACCOUNT (AS DETERMINED BY SUCH INSURANCE
COMPANY) CONSTITUTE PLAN ASSETS, (V) THE ACQUISITION
AND HOLDING OF SUCH CERTIFICATES WILL NOT CONSTITUTE
A NONEXEMPT PROHIBITED TRANSACTION IN VIOLATION OF
SECTION 406 OF ERISA AND SECTION 4975 OF THE INTERNAL
REVENUE CODE, AND (VI) IF, AS OF ANY LATER DATE ON
WHICH ANY PERSON PURCHASES ANY OF SUCH CERTIFICATES,
25% OR MORE OF THE ASSETS OF SUCH GENERAL ACCOUNT
CONSTITUTE PLAN ASSETS OR IF SUCH COMPANY BECOMES A
PERSON WHO HAS DISCRETIONARY AUTHORITY OR CONTROL
WITH RESPECT TO THE ASSETS OF THE TRUST OR A PERSON
WHO PROVIDES INVESTMENT ADVICE FOR A FEE (DIRECT OR
INDIRECT) TO OR WITH RESPECT TO SUCH ASSETS, OR AN
AFFILIATE OF SUCH A PERSON, THEN SUCH INSURANCE
COMPANY WILL DISPOSE OF SUCH CERTIFICATES THEN HELD
IN ITS GENERAL ACCOUNT PROMPTLY, AND IN ANY EVENT BY
THE END OF THE NEXT CALENDAR QUARTER.
(e) The Class B-1 Certificates may not be transferred
other than to a qualified institutional buyer (a "QIB") that is purchasing for
its own account or the account of another QIB. No transfer of a Class B-1
Certificate shall be valid or effective unless such transfer is being made in a
transaction that is exempt from the registration requirements of the Securities
Act under Rule 144A ("Rule 144A") (except in the case of the initial transfer
from the Depositor) and any applicable blue sky laws, and the proposed
transferee shall have delivered to the Depositor and the Trustee an investment
representation letter substantially in the form attached as Exhibit E hereto or
such other written statement as the Depositor or the Trustee shall prescribe.
Each certificate, if any, evidencing such Class B-1 Certificate issued upon any
such transfer, other than in a public offering pursuant to an effective
registration statement shall bear the restrictive legend set forth in below.
Except as otherwise provided in the immediately preceding
paragraph, each Class B-1 Certificate initially issued, and each Class B-1
Certificate issued to any subsequent transferee of any such certificate, will
contain the following legend in addition to any other legends provided for
herein:
"THIS CLASS B-1 CERTIFICATE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR ANY STATE SECURITIES LAW. NO TRANSFER OF
THIS CLASS B-1 CERTIFICATE SHALL BE VALID OR
EFFECTIVE UNLESS SUCH TRANSFER IS TO A "QUALIFIED
28
INSTITUTIONAL BUYER" PURSUANT TO RULE 144A UNDER THE
ACT AND PRIOR TO THE TRANSFER SUCH HOLDER(S) SHALL
HAVE DELIVERED TO THE DEPOSITOR AND THE TRUSTEE A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS
RELATING TO THE RESTRICTIONS ON TRANSFERS OF THIS
CERTIFICATE (THE FORM OF WHICH LETTER MAY BE OBTAINED
FROM THE TRUSTEE)."
Section 3.13. Actions by Certificateholders.
Subject to Section 6.3(c), (a) no Class B-1 Certificateholders
shall have the right hereunder to institute any Proceeding against the
Underlying Securities Issuer in respect of the Underlying Securities and (b) no
Class A-1 Certificateholder or Class A-1 Certificate Owner may institute any
Proceeding against the Underlying Securities Issuer with respect to the
Underlying Securities unless:
(a) such Certificateholder or Certificate Owner
previously has given to the Trustee written notice of a continuing breach of the
Underlying Securities;
(b) Certificateholders or Certificate Owners evidencing
not less than 25% of the Outstanding Class A-1 Certificates have requested in
writing that the Trustee institute the proceeding in its own name as Trustee;
(c) the Trustee has for 15 days not instituted the
Proceeding; and
(d) no direction inconsistent with the written request
has been given to the Trustee during the 15-day period by Class A-1
Certificateholders evidencing more than a majority of the Outstanding Class A-1
Certificates.
The Trustee will not be required to take any action however, unless the Trustee
has been offered reasonable indemnity for its costs, expenses and liabilities by
such Class A-1 Certificateholders or Class A-1 Certificate Owners.
Section 3.14. Additional Legends.
Each Class A-1 Certificate and each Class B-1 Certificate,
whether issued in global form or definitive physical form shall bear a legend
substantially in accordance with the following:
BY ACQUIRING OR ACCEPTING ANY INTEREST IN THIS
CERTIFICATE, YOU ACKNOWLEDGE THAT THIS CERTIFICATE IS
SUBJECT TO A PURCHASE OPTION GRANTED TO CORPORATE
ASSET BACKED CORPORATION, A DELAWARE CORPORATION (THE
"DEPOSITOR"), BY UBS SECURITIES LLC UNDER THE [CLASS
A-1][CLASS B-1] CALL OPTION AGREEMENT, DATED AS OF
MARCH 8, 2004 (THE
29
"CALL OPTION AGREEMENT"), AMONG THE DEPOSITOR, AS THE
SOLE INITIAL OPTION HOLDER, UBS SECURITIES LLC, AS
THE INITIAL PURCHASER FROM THE DEPOSITOR, AND SOLE
HOLDER AT THE TIME OF SUCH GRANT, OF THE [CLASS
A-1][CLASS B-1] CERTIFICATES, AND U.S. BANK TRUST
NATIONAL ASSOCIATION, A NATIONAL BANKING ASSOCIATION,
ACTING AS OPTION AGENT FOR THE [CLASS A-1][CLASS B-1]
CERTIFICATEHOLDERS WITH RESPECT TO THE [CLASS
A-1][CLASS B-1] OPTIONS (THE "OPTION AGENT"), WHICH
OBLIGATIONS HAVE BEEN ASSUMED BY EACH SUBSEQUENT
HOLDER OF SUCH [CLASS A-1][CLASS B-1] CERTIFICATES;
YOU AGREE TO ASSUME THE OBLIGATION OF YOUR TRANSFEROR
TO PERFORM SUCH [CLASS A-1][CLASS B-1] OPTION; AND
YOU ACKNOWLEDGE THAT YOUR TRANSFEROR HAS BEEN
RELEASED FROM ITS OBLIGATION TO PERFORM SUCH [CLASS
A-1][CLASS B-1] OPTION. THE CALL OPTION AGREEMENT
PERMITS THE HOLDER OF THE RELATED [CLASS A-1][CLASS
B-1] OPTION TO PURCHASE THIS CERTIFICATE FROM YOU,
WITHOUT YOUR CONSENT, AT THE TIMES AND ON THE
CONDITIONS SPECIFIED IN THE CALL OPTION AGREEMENT AT
THE CALL PRICE SPECIFIED IN THAT AGREEMENT. THE
[CLASS A-1][CLASS B-1] OPTION MAY BE TRANSFERRED FROM
TIME TO TIME. UPON THE EXERCISE OF THE RELATED [CLASS
A-1][CLASS B-1] OPTION IN THE MANNER SPECIFIED IN THE
CALL OPTION AGREEMENT, [THE][THIS] [CLASS A-1][CLASS
B-1] CERTIFICATE WILL BE TRANSFERRED TO[, AND
REGISTERED IN THE NAME OF,] THE RELEVANT [CLASS
A-1][CLASS B-1] OPTION HOLDER BY THE TRUSTEE, AND YOU
WILL BE PAID THE CALL PRICE FOR THIS CERTIFICATE IN
ACCORDANCE WITH THE TERMS OF THE CALL OPTION
AGREEMENT, WITHOUT THE REQUIREMENT OF ANY FURTHER
ACTION BY YOU, EXCEPT THAT IF THE CLASS A-1
CERTIFICATES ARE HELD IN DEFINITIVE FORM AT SUCH TIME
YOU WILL NOT RECEIVE SUCH CALL PRICE UNLESS AND UNTIL
YOU SURRENDER THIS CERTIFICATE.
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ARTICLE IV
EXCHANGE ACT REPORTING
Section 4.1. Exchange Act Reporting.
The Depositor shall:
(a) on behalf of the Trust, prepare and file or cause the
Trustee (in accordance with instructions from the Depositor as to form and
substance) to prepare and file with the Commission in accordance with rules and
regulations prescribed by the Commission, following the execution thereof by the
Depositor, copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe), if any,
that the Depositor on behalf of the Trust may be required to file with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act with respect to
the Trust;
(b) on behalf of the Trust, prepare and file or cause the
Trustee (in accordance with instructions from the Depositor as to form and
substance) to prepare and file with the Commission, in accordance with rules and
regulations prescribed by the Commission, such additional information, documents
and reports, including such certificates of independent public accountants, if
any, contemplated by the Securities Act, the Exchange Act or the rules or
interpretations of the Commission thereunder, with respect to compliance by the
Trust with the conditions and covenants of this Trust Agreement, if any, as may
be required to be filed with the Commission from time to time by such rules and
regulations.
(c) supply to the Trustee (and the Trustee shall transmit by
mail to all Certificateholders described in TIA Section 313(c), in the manner
and to the extent provided therein) such summaries of any information, documents
and reports required to be filed by the Trustee pursuant to clauses (a) and (b)
of this Section 4.1, if any, as may be required by rules and regulations
prescribed from time to time by the Commission; and
(d) after an Available Information Event, on behalf of the
Trust, prepare, execute and file or cause the Trustee to prepare, execute and
file with the Commission following the execution thereof by the Depositor,
reports of the kind referred to in clause (a) of this Section 4.1 with respect
to the Underlying Securities Guarantor, to the extent such reports are then
available to the Depositor, for as long as the Depositor on behalf of the Trust
is required to file such reports under the Exchange Act. Such reports shall
include quarterly and annual financial statements and other information of the
type required to be filed on Form 8-K under the Exchange Act with respect to the
Underlying Securities Guarantor. A copy of each such report shall be provided to
the Trustee at least ten (10) Business Days prior to the date required for
filing.
(e) The Depositor shall deliver to the Trustee, on or before
February 15th of each year, an Officer's Certificate signed by an Executive
Officer of the Depositor stating that:
(i) a review of the activities of the Depositor
during such fiscal year and of the performance under this Agreement has
been made under such Executive Officer's supervision; and
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(ii) (ii) to the best of such Executive Officer's
knowledge, based on such review, the Depositor has fulfilled all of its
obligations under this Agreement throughout such year, or, if there has
been a default in the fulfillment of any such obligation, specifying
each such default known to such Executive Officer and the nature and
status thereof. A copy of such certificate may be obtained by any
Certificateholder by a request in writing to the Depositor addressed to
the Corporate Trust Office of the Trustee.
ARTICLE V
ACTIONS BY TRUSTEE
Section 5.1. Prior Notice to Certificateholders and Option
Agent with Respect to Certain Matters.
(a) Subject to Section 7.16 hereunder, the Trustee shall
not take action with respect to the following matters, unless (i) the Trustee
shall have notified the Class A-1 Certificateholders and Option Agent in writing
of the proposed action at least 30 days before the taking of such action, (ii)
no Certificateholders shall have notified the Trustee in writing prior to the
30th day after such notice is given that such Certificateholders have withheld
consent or provided alternative direction, and, if any such Certificateholders
have so withheld consent or provided alternative direction, a majority of the
Voting Rights of all the Certificates, as specified in Section 5.3, shall have
notified the Trustee in writing prior to such 30th day that they have consented
to such action, and (iii) the Rating Agency Condition is satisfied:
(A) the initiation of any claim or lawsuit by
the Trust (other than a commencement of a Proceeding
under Section 7.16) or the compromise of any action,
claim or lawsuit brought by or against the Trust; or
(B) any amendment to this Agreement under
Section 9.3.
(b) The Trustee shall not have the power to commence a
voluntary proceeding in bankruptcy relating to the Trust without the unanimous
prior approval of all Class A-1 Certificateholders and the delivery to the
Trustee by each such Certificateholder of a certificate certifying that each
such Certificateholder reasonably believes that the Trust is insolvent.
Section 5.2. Action by Trustee with Respect to Certain
Matters.
Subject to Section 7.15 and, in the case of an Underlying
Securities Event of Default that has occurred and is continuing, Section 7.16,
the Trustee shall not agree to any amendment, modification or supplement to the
Underlying Securities.
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Section 5.3. Majority Control.
Except as expressly provided herein, any action that may be
taken or consent that may be given or withheld by the Certificateholders under
this Agreement may be taken, given or withheld by Certificateholders evidencing
a majority of the Voting Rights of all the Certificates.
ARTICLE VI
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
Section 6.1. Establishment of Collection Account and
Securities Account.
(a) The Trustee shall establish and maintain in the name
of the Trust Eligible Trust Accounts known as the Collection Account and the
Securities Account, bearing an additional designation clearly indicating that
the funds deposited therein are held for the benefit of the Certificateholders,
subject to the obligations of the Trust, if any. The Trustee, directly or
through its agents, shall make reasonable efforts to collect all scheduled
payments under the Trust Assets and will follow, or cause to be followed, any
collection procedures that it would follow with respect to comparable financial
assets that it holds for its own account, provided that these procedures shall
be consistent with this Agreement and any related instrument governing the
Underlying Securities and any other Trust Asset.
(b) The Trustee shall possess all right, title and
interest in and to all funds on deposit from time to time in the Collection
Account and the Securities Account and in all proceeds thereof. The Collection
Account and the Securities Account shall be under the sole dominion and control
of the Trustee for the benefit of the Certificateholders, subject to the
obligations of the Trust, if any. If at any time the Collection Account or the
Securities Account ceases to be an Eligible Trust Account, the Trustee shall
within 5 Business Days (or such longer period, not to exceed 30 calendar days,
to which each Rating Agency may consent) establish a new Collection Account or
Securities Account, as applicable, as an Eligible Trust Account and shall
transfer any funds in the existing Collection Account or Securities Account, as
applicable, to such new Collection Account or new Securities Account, as
applicable.
(c) The Collection Account shall be a non-interest
bearing account. Pending application pursuant to Sections 6.2 hereof, moneys
held in the Collection Account shall be held uninvested.
(d) The Securities Intermediary hereby agrees that any
Trust Asset credited to the Securities Account shall be treated as a "financial
asset" within the meaning of Section 8-102(a)(9) of the UCC.
(e) If at any time the Securities Intermediary shall
receive any order from the Trustee directing the transfer or redemption of any
Trust Asset on deposit in the Securities Account, the Securities Intermediary
shall comply with such entitlement order without further consent by the
Depositor or any other Person. The Securities Intermediary shall take all
instructions (including without limitation all notifications and entitlement
orders) with respect to the Securities Account solely from the Trustee.
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(f) The Securities Intermediary hereby confirms and
agrees that:
(i) There are no other agreements entered into
between the Securities Intermediary and the Depositor with respect to
the Securities Account;
(ii) It has not entered into, and until the
termination of this Agreement will not enter into, any agreement with
any other Person relating to the Securities Account and/or any
financial assets credited thereto pursuant to which it has agreed to
comply with entitlement orders (as defined in Section 8-102(a)(8) of
the UCC) of such other Person; and
(iii) It has not entered into, and until the
termination of the Agreement will not enter into, any agreement with
the Depositor or the Trustee purporting to limit or condition the
obligation of the Securities Intermediary to comply with entitlement
orders as set forth in this Section 6.1.
Section 6.2. Application of Trust Funds.
(a) The Trustee shall credit to the Collection Account
all moneys or property received by the Trust that constitute payments on, or
proceeds from redemption or sale (including issuer and third party tender offers
and other repurchases) of, the Underlying Securities. Any non-cash property
received will be liquidated by the Trustee in the manner determined by the
Trustee and using commercially reasonable efforts only to the extent necessary
to avoid distribution of fractional securities or other fractional property to
Certificateholders, and the proceeds thereof will be credited to the Collection
Account.
(b) Except as otherwise specified in subsections (c) and
(e) below, the Trustee shall, subject to its right pursuant to Section 7.16(a)
to payment of its reasonable expenses related to any proceeding in respect of a
failure by the Underlying Securities Issuer to pay the Whole Amount Due,
distribute the Available Funds as follows:
(i) pro rata to the Certificateholders of the
Class A-1 Certificates and Class B-1 Certificates, from all amounts
received on the Underlying Securities in respect of interest, the
interest distributable with respect to such Class, if any, on any
Distribution Date as determined in accordance with Section 3.1(c);
(ii) to the Certificateholders of the Class A-1
Certificates pro rata by Certificate Principal Balance, all amounts
received in respect of principal in respect of the Underlying
Securities, on the Final Distribution Date.
If the Trust receives payments in respect of premium on the Underlying
Securities at a time when Certificates that are not Called Certificates remain
Outstanding, the Trustee shall immediately thereafter distribute the Available
Funds in respect of premium received, all to the Class A-1 Certificateholders,
pro rata by Certificate Principal Balance.
(c) If the Underlying Securities Issuer (or any third
party tender offeror) redeems, tenders for or makes other repurchases of some or
all of the Underlying Securities Issuer, then a corresponding portion of the
Certificates will be redeemed, as set forth below. On the third Business Day
after the Trustee receives the proceeds of any full or partial redemption,
tender for or
34
repurchase of the Underlying Securities, or any other unscheduled payment, the
Trustee shall, subject to its right pursuant to Section 7.16(a) to payment of
its reasonable expenses related to any proceeding in respect of a failure by the
Underlying Securities Issuer to pay the Whole Amount Due, make distributions in
respect of such proceeds to Certificateholders whose Certificates are redeemed
as follows:
(i) to the Class A-1 Certificateholders and
Class B-1 Certificateholders, a distribution of the amounts received in
respect of interest accrued but not paid at the pass-through rate of
6.00% per annum on the Outstanding Certificate Principal Balance of the
Class A-1 Certificates on such day and 0.345% per annum on the
Outstanding Certificate Notional Amount of the Class B-1 Certificates
on such day;
(ii) to the Class A-1 Certificateholders, a
distribution of the amounts received in respect of principal, pro rata
by their Certificate Principal Balances on such day; and
(iii) to the Class A-1 Certificateholders, a
distribution of the amounts, if any, received in respect of premium on
the Underlying Securities, pro rata by the Certificate Principal
Balances of the Class A-1 Certificates (and no amounts in respect of
premium shall be distributed to the holders of the Class B-1
Certificates).
If less than all of the Underlying Securities are
redeemed, tendered for or otherwise repurchased or prepaid, the Trustee shall
select Class A-1 Certificates and Class B-1 Certificates for redemption pro rata
based on the Certificate Principal Balance and Certificate Notional Amount,
respectively, of each such Class, provided that purchases of a fraction of a
single Class A-1 Certificate or Class B-1 Certificate shall not be made, and the
Trustee shall round up or down the number of Class A-1 Certificates or Class B-1
Certificates to be purchased from each Class A-1 or Class B-1 Certificateholder
to avoid such fractional purchases.
(d) If the Trustee is unable to distribute Available
Funds on a Distribution Date because a payment with respect to the Underlying
Securities was not made to the Trustee on the date on which such payment was
due, and such payment is subsequently made to the Trustee, subject to subsection
(e) below, then the Trustee shall make the distribution that should have been
made on the Distribution Date on the first Business Day following the date on
which such payment is made to the Trustee. Except as provided in Section 3.1(d),
the Certificateholders will not receive any interest or any other compensation
in respect of late payments unless paid by the issuer of the Underlying
Securities, in which case the Trustee will distribute any such interest or other
compensation upon its receipt. The Trustee will make distributions on a
Distribution Date to the extent it receives funds before 1:00pm. If any
Available Funds are received by the Trustee after 1:00 p.m. on a Distribution
Date, the Trustee shall use its reasonable efforts in the processing of payments
on any such date.
(e) If, prior to the Final Distribution Date, the Trustee
receives money or other property in respect of the Underlying Securities as a
result of an Underlying Securities Event of Default, the Trustee shall allocate
and distribute such moneys or other property (including any premium paid
thereon) to the holders of the Class A-1 Certificates, pro rata by Certificate
Principal
35
Balance. The Trustee will make such distribution after payment of any payment
obligations of the Trust. No distribution will be made to holders of the Class
B-1 Certificates.
(f) If an SEC Reporting Failure occurs and the Underlying
Securities Guarantor does not resume filing Exchange Act reports within 60 days
of the distribution of definitive Class A-1 Certificates pursuant to Section
3.11 and the Option Holders do not elect to exercise their call rights on or
before such 60th day, then the Depositor shall instruct the Trustee to sell the
Underlying Securities to one or more unaffiliated purchasers and allocate the
proceeds of such sale in the following order of priority:
(i) to the Trustee, reimbursement for any extraordinary
expenses incurred by the Trustee in accordance with this Agreement pursuant to
instructions of not less than 100% of the holders of the Class A-1 Certificates,
and
(ii) any remainder shall be allocated as follows:
(A) proceeds in respect of interest will be allocated to
the Certificateholders holding the Class A-1
Certificates and the Class B-1 Certificates pro rata
based on the interest accrued but not paid through
the date of distribution on the Certificate Principal
Balance of the Class A-1 Certificates and the
Certificate Notional Amount of the Class B-1
Certificates, respectively.
(B) proceeds in respect of principal, and premium, if
any, will be allocated to the Certificateholders
holding the Class A-1 Certificates.
(C) no amounts received in respect of principal or
premium will be distributed to the Certificateholders
holding the Class B-1 Certificates.
(g) It is understood that payments in the nature of
prepayment or redemption penalties, late payment charges, default interest or
reinvestment income which may be received by the Trustee shall be deposited by
the Trustee in the Collection Account for distribution to the Class A-1
Certificateholders as additional interest, and shall not be retained by the
Trustee for its own account.
Section 6.3. Certain Provisions Applicable to all
Distributions to Certificateholders.
(a) If any withholding tax is imposed on any distribution
(or allocations of income) by the Trust to a Certificateholder, such tax shall
reduce the amount otherwise distributable to the Certificateholder. The Trustee
is hereby authorized and directed to retain from amounts otherwise distributable
to the Certificateholders sufficient funds for the payment of any tax that is
legally required to be withheld by the Trust (but such authorization shall not
prevent the Trustee if indemnified to its satisfaction, from contesting any such
tax in appropriate proceedings and withholding payment of such tax, if permitted
by law, pending the outcome of such proceedings). The amount of any withholding
tax imposed with respect to a Certificateholder shall be treated as cash
distributed to such Certificateholder at the time it is withheld by the Trust
and remitted to the appropriate taxing authority. If the Trustee determines that
withholding tax is payable with respect to a distribution (such as a
distribution to a Certificateholder that is a
36
non-U.S. Person), the Trustee may in its sole discretion withhold such amounts
in accordance with this Section 6.3(a). If a Certificateholder wishes to apply
for a refund of any such withholding tax, the Trustee shall reasonably cooperate
with such Certificateholder in making such claim so long as such
Certificateholder agrees to reimburse the Trustee for any out-of-pocket expenses
incurred. The Trustee shall not be liable to any Person for withholding or
failing to withhold any such withholding tax. In the event that withholding
taxes should have been imposed on any distribution by the Trust to a
Certificateholder but was not so withheld at the time of the payment, the
Trustee is hereby also authorized and directed to obtain from amounts otherwise
distributable currently and in the future to the respective Certificateholder to
pay amounts that should have been withheld by the Trust and any penalties and
interest due.
(b) [Reserved].
(c) Notwithstanding any other provisions in this
Agreement, the right of any Certificateholder to receive a distribution of
principal, interest, and premium, if any, allocable to a Certificate and to
institute suit for the enforcement of any such distribution shall not be
impaired without the consent of such Certificateholder.
Section 6.4. Appointment of Paying Agent.
The Trustee may appoint one or more paying agents (each, a
"Paying Agent") with respect to the Certificates. Any such Paying Agent shall be
authorized to make distributions to Certificateholders from the Collection
Account pursuant to the provisions of this Agreement and shall report the
amounts of such distributions to the Trustee. Any Paying Agent shall have the
revocable power to withdraw funds from such Collection Account for the purpose
of making such distributions. The Trustee in its sole discretion may revoke such
power and remove the Paying Agent. The initial Paying Agent(s) shall be the
Trustee and any co-paying agent chosen by the Depositor and reasonably
acceptable to the Trustee, including, if and so long as any Class of
Certificates is listed on any securities exchange and such exchange so requires,
a co-paying agent in any city required by the rules of such exchange. Any Paying
Agent shall be permitted to resign as a Paying Agent upon 30 days' notice to the
Trustee. If the Trustee shall resign as a Paying Agent, the Trustee shall
appoint a successor or additional Paying Agent. The Trustee shall cause each
Paying Agent and each successor or additional Paying Agent to execute and
deliver to the Trustee an instrument in which such Paying Agent or successor or
additional Paying Agent shall agree with the Trustee that (a) it will hold all
sums, if any, held by it for distribution to the Certificateholders in trust for
the benefit of the Certificateholders entitled thereto until such sums shall be
distributed to such Certificateholders or returned to the Trustee, and (b) it
will give the Trustee notice of any default by the Underlying Securities Issuer
(if such default is known to such Paying Agent). The Paying Agent shall return
all unclaimed funds to the Trustee and upon removal shall also return all funds
in its possession to the Trustee. The provisions of Sections 7.1, 7.3, 7.8 and
7.10 shall apply to the Trustee also in its roles as Paying Agent, for so long
as the Trustee shall act as Paying Agent. Any reference in this Agreement to the
Paying Agent shall include any co-paying agent unless the context requires
otherwise. Notwithstanding anything contained herein to the contrary, the
appointment of a Paying Agent pursuant to this Section 6.4 shall not release the
Trustee from the duties, obligations, responsibilities or liabilities arising
under this Agreement other than with respect to funds paid to such Paying Agent.
37
Section 6.5. Method of Payment.
Distributions required to be made to Certificateholders on any
Distribution Date shall be made to each Certificateholder of record on the
immediately preceding Record Date either by wire transfer, in immediately
available funds, to the account of such Certificateholder at a bank or other
entity having appropriate facilities therefor, if such Certificateholder shall
have provided to the Certificate Registrar appropriate written instructions at
least five Business Days prior to such Record Date, or, if not, by check mailed
to such Certificateholder at the address of such Certificateholder appearing in
the Certificate Register.
Section 6.6. Reports to Certificateholders.
On the Business Day next following each Distribution Date, the
Trustee shall forward or cause to be forwarded to the Depositor, each
Certificateholder, the Option Agent and the New York Stock Exchange (or, if the
Class A-1 Certificates are no longer listed on the New York Stock Exchange, to
any exchange or securities trading system on which the Class A-1 Certificates
are then listed or quoted), a statement setting forth:
(a) the amount of the distribution on such Distribution
Date to Certificateholders of each Class allocable to principal of and premium,
if any, and interest on the Certificates of each such Class, and the amount of
aggregate unpaid interest accrued as of such Distribution Date;
(b) the aggregate stated principal amount of the
Underlying Securities, the current rating assigned by each Rating Agency thereto
and the current interest rate thereon at the close of business on such
Distribution Date; and
(c) the aggregate Certificate Principal Balance of the
Class A-1 Certificates and the Aggregate Certificate Notional Amount of Class
B-1 Certificates at the close of business on such Distribution Date.
In the case of information furnished pursuant to subclause (a)
above, the amounts shall be expressed as a dollar amount per minimum authorized
denomination of each class of Certificates. Within a reasonable period of time
after the end of each calendar year, the Trustee shall furnish to each person
who at any time during such calendar year was a Certificateholder a statement
containing the information set forth in subclauses (a) and (b) above, aggregated
for such calendar year or the applicable portion thereof during which such
person was a Certificateholder. Such obligation of the Trustee shall be deemed
to have been satisfied to the extent that substantially comparable information
shall be provided by the Trustee pursuant to any requirements of the Code as are
from time to time in effect. In the case of the rating furnished pursuant to
subclause (b) above, the Trustee may rely on an information agent such as
Bloomberg L.P.
Section 6.7. Accounting and Information to Certificateholders,
Internal Revenue Service and Others.
The Trustee shall (a) maintain (or cause to be maintained) the
books of the Trust on a calendar year basis on the accrual method of accounting,
(b) deliver to each Certificateholder, as
38
may be required by the Code and applicable Treasury Regulations or otherwise,
such information reasonably available to the Trustee as may be required to
enable each Certificateholder to prepare its federal income tax returns, (c)
file such tax returns relating to the Trust and make such elections as may from
time to time be required or appropriate under any applicable state or federal
statute or rule or regulation thereunder, (d) cause such tax returns to be
signed in the manner required by law and (e) collect or cause to be collected
any withholding tax as described in and in accordance with subsection 6.3(a)
with respect to income or distributions to Certificateholders. The Trustee shall
be authorized to retain an agent for the purpose of performing its obligations
under the preceding clauses (a), (b) and (c), but no expense of any such agent
shall be an expense of the Trust, notwithstanding that such expenses shall not
have been paid by the Depositor pursuant to its separate fee agreement with the
Trustee.
Section 6.8. Signature on Returns.
Subject to applicable law, the Trustee shall sign on behalf of
the Trust any and all tax returns of the Trust.
Section 6.9. No Implied Duties of the Depositor.
No implied covenants or obligations shall be read into this
Agreement against the Depositor. The Depositor shall not be under any obligation
whatsoever to appear in, prosecute or defend any action, suit or other
proceeding in respect of the Underlying Securities or other Trust Assets or the
Certificates that is not incidental to its responsibilities under this Agreement
or that in its opinion may involve it in any expense or liability unless
indemnification satisfactory to it is provided.
ARTICLE VII
THE TRUSTEE
Section 7.1. Duties of Trustee; Notice of Defaults.
(a) The Trustee shall not be liable except for the
performance by the Trustee of such duties, and only such duties, as are
specifically set forth in this Agreement, including the administration of the
Trust in the interest of the Certificateholders, subject to and in accordance
with the provisions of this Agreement. No implied covenants or obligations shall
be read into this Agreement against the Trustee.
(b) In the absence of bad faith on its part, the Trustee
may conclusively rely upon certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement in determining the truth of the
statements and the correctness of the opinions contained therein; provided,
however, that the Trustee shall have examined such certificates or opinions so
as to determine compliance of the same with the requirements of this Agreement.
(c) The Trustee shall not be relieved from liability for
its own negligent action, its own negligent failure to act or its own willful
misconduct or bad faith, except that:
39
(i) this Section 7.1(c) shall not limit the
effect of Section 7.1(a) or (b);
(ii) the Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer or
Officers of the Trustee, unless it is proved that the Trustee or such
Responsible Officer was negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 5.1, 5.3 or 7.5;
and
(iv) the Trustee shall not be liable for any loss
or diminution in value of Underlying Securities sold by it under this
Agreement in good faith in accordance with its terms.
(d) Moneys received by the Trustee hereunder shall be
deposited in the Collection Account, and the Trustee shall not be liable to pay
any interest thereon.
(e) The Trustee shall not take any action that (i) is
inconsistent with the purposes of the Trust set forth in Section 2.3, (ii)
would, to the actual knowledge of a Responsible Officer of the Trustee, result
in the Trust's being characterized as other than a grantor trust for federal
income tax purposes, or (iii) the Trustee should reasonably be expected to know
would adversely affect the intended classification of the Trust as a grantor
trust for federal income tax purposes (in this connection, the Trustee shall be
protected in assuming that the performance of its express duties hereunder,
including any actions taken at the direction of the Depositor, is in accordance
with this Agreement). The Depositor shall not direct the Trustee to take any
action that would violate the provisions of this Section 7.1(e).
(f) The Trustee (except as specifically provided herein)
shall have the legal power to exercise all of the rights, powers and privileges
of holders of the Underlying Securities and other Trust Assets. However, the
Trustee (except as specifically provided herein) shall not be under any
obligation whatsoever to appear in, prosecute or defend any action, suit or
other proceeding in respect of the Underlying Securities or other Trust Assets
that is not incidental to its responsibilities under this Agreement or that in
its opinion may involve it in any expense or liability unless indemnification
satisfactory to it is provided.
(g) Section 315(e) of the TIA is hereby excluded from
operation in respect of this Agreement.
(h) If the Underlying Securities Issuer announces its
intention to tender for or otherwise make an unscheduled payment on or
repurchase of the Underlying Securities, or if a third party announces its
intention to tender for the Underlying Securities, the Trustee shall not accept
such tender offer or unscheduled payment or repurchase offer, other than upon
the unanimous vote of the Class A-1 Certificateholders, except to the extent
specified in Section 2.15(j).
(i) The Trustee shall perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further acts, instruments and
40
assurances as may be required by the Option Agent in order to enable it to carry
out or perform its duties under the Call Option Agreements.
Section 7.2. Rights of Trustee.
The Trustee is authorized and directed to execute and deliver
the documents referred to in Article II to which the Trust is to be a party, in
such written form as the Depositor shall approve by Depositor Order. In addition
to the foregoing, the Trustee is authorized and shall be obligated to take all
actions required of the Trust pursuant to such documents.
Section 7.3. Acceptance of Trusts and Duties.
Except as otherwise provided in this Article VII, in accepting
the Trust hereby created, the Trustee acts solely as Trustee hereunder and not
in its individual capacity and all Persons having any claim against the Trustee
by reason of the transactions contemplated by this Agreement shall look only to
the Trust Assets for payment or satisfaction thereof. The Trustee accepts the
trusts hereby created and agrees to perform its duties hereunder with respect to
such trusts but only upon the terms of this Agreement. The Trustee also agrees
to disburse all moneys actually received by it constituting part of the Trust
Assets upon the terms of this Agreement. The Trustee (and any director, officer,
employee or agent of the Trustee) shall not be liable or accountable under the
Trust Agreement under any circumstances, except (i) for its own negligent
action, its own negligent failure to act or its own willful misconduct or bad
faith (except that the foregoing shall not limit the effect of subsections
7.1(a) or (b), or (ii) in the case of the inaccuracy of any representation or
warranty contained in Section 7.7). In particular, but not by way of limitation
(and subject to the exceptions set forth in the preceding sentence):
(a) the Trustee shall at no time have any responsibility
or liability for or with respect to the legality, validity and enforceability of
any Underlying Securities or other Trust Assets, or the perfection and priority
of any security interest created by any Underlying Securities or the maintenance
of any such perfection and priority, or for or with respect to the sufficiency
of the Trust Assets or their sufficiency to generate the payments to be
distributed to Certificateholders under this Agreement, including the terms and
conditions of any Underlying Securities or other Trust Assets; the validity of
the assignment of any Underlying Securities or other Trust Assets to the Trust
or of any intervening assignment; the completeness of any Underlying Securities
or other Trust Assets; the performance or enforcement of any Underlying
Securities or other Trust Assets; the compliance by the Depositor with any
warranty or representation made under any agreement or document or the accuracy
of any such warranty or representation or any action of the Depositor taken in
the name of the Trustee;
(b) under no circumstances shall the Trustee be liable
for indebtedness or other payment or distribution obligations evidenced by or
arising under this Agreement, including the Certificate Principal Balance or
Certificate Notional Amount of and distributions on the Certificates;
(c) the Trustee shall not be responsible for or in
respect of and makes no representation as to the validity or sufficiency of any
provision of this Agreement, the accuracy or completeness of any offering
documents for the Certificates or for the due execution hereof by the
41
Depositor or for the form, character, genuineness, sufficiency, value or
validity of any of the Underlying Securities, the Certificates (other than the
certificate of authentication on the Certificates), the Call Options or any
related documents, and the Trustee shall in no event assume or incur any
liability, duty or obligation to any Certificateholder, other than as expressly
provided for in this Agreement;
(d) the Trustee shall not be liable for the default or
misconduct of the Depositor or any other party (other than itself, as provided
in this Agreement) under this Agreement or otherwise;
(e) except as described in Section 7.16 in connection
with an Underlying Securities Event of Default, the Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Agreement or to make any investigation of related matters or to institute,
conduct or defend any litigation under or in relation to this Agreement at the
request, order or direction of any of the Certificateholders, unless the
Certificateholders have offered the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which may be incurred by the
Trustee. The right of the Trustee to perform any discretionary act enumerated in
this Agreement shall not be construed as a duty, and the Trustee shall not be
answerable for other than its misconduct, bad faith or negligence in the
performance of any such act;
(f) the Trustee shall not incur any liability to any
Certificateholder if, by reason of any provision of any present or future law,
or regulation thereunder, or any governmental authority, or by reason of any act
of God or war or other circumstance beyond the control of the relevant party,
the Trustee shall be prevented or forbidden from doing or performing any act or
thing that the terms of this Agreement provide shall be done or performed; and
the Trustee shall not incur any liability to any Certificateholder by reason of
any non-performance or delay, caused as aforesaid, in the performance of any act
or thing which the terms of this Agreement provide shall or may be done or
performed, or by reason of any exercise of, or failure to exercise, any
discretion provided for in this Agreement; and
(g) the rights, protections, immunities and benefits
given to the Trustee hereunder are extended to, and enforceable by, the Trustee
in each of its capacities hereunder.
Section 7.4. Preferential Collection of Claims Against
Trustee.
The Trustee shall comply with Section 311(a) of the TIA,
excluding any creditor relationship listed in Section 311(b) of the TIA. A
Trustee who has resigned or been removed shall be subject to Section 311(a) of
the TIA to the extent required by that Section.
Section 7.5. Action Upon Instruction by Certificateholders.
(a) Subject to Sections 5.3 and 9.3 and in accordance
with the terms of this Agreement, the Certificateholders may by written
instruction direct the Trustee in the management of the Trust. Subject to
Sections 7.3(e), 7.5(c) and 7.15, such direction may be exercised at any time by
written instruction of the Certificateholders pursuant to Section 5.3.
(b) Notwithstanding the foregoing, the Trustee shall not
be required to take any action under this Agreement if the Trustee shall have
reasonably determined, or shall have been
42
advised by counsel, that such action is likely to result in liability on the
part of the Trustee or is contrary to the terms of this Agreement or is
otherwise contrary to law, or if the Trustee shall not have received indemnity
satisfactory to it as provided in Section 7.3(e). No provision of this Agreement
shall require the Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights or powers under this
Agreement, if the Trustee shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured or provided to it.
(c) Whenever the Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement, or is unsure as to the application, intent, interpretation or meaning
of any provision of this Agreement, the Trustee shall promptly give notice (in
such form as shall be appropriate under the circumstances) to the Class A-1
Certificateholders (with a copy to the Option Agent) requesting instruction as
to the course of action to be adopted, and, to the extent the Trustee acts in
good faith in accordance with any instruction received in accordance with
Section 5.3, or otherwise in accordance with the instructions of the Depositor
or the Certificateholders in accordance with this Agreement, the Trustee shall
not be liable on account of such action to any Person. If the Trustee shall not
have received appropriate instructions within ten days of such notice (or within
such shorter period of time as reasonably may be specified in such notice or may
be necessary under the circumstances) it may, but shall be under no duty to,
take or refrain from taking such action which is consistent, in its view, with
this Agreement, and as it shall deem to be in the best interests of the
Certificateholders, and the Trustee shall have no liability to any Person for
any such action or inaction.
Section 7.6. Furnishing of Documents; Reports to
Certificateholders and DTC.
(a) The Trustee shall furnish to the Certificateholders,
with a copy to the New York Stock Exchange (or, if the Class A-1 Certificates
are no longer listed on the New York Stock Exchange, to any exchange or
securities trading system on which the Class A-1 Certificates are then listed or
quoted), promptly upon receipt of a written request therefor, duplicates or
copies of all reports, notices, requests, demands, certificates, financial
statements and any other instruments furnished to the Trustee under this
Agreement. In addition, if required by Section 313(a) of the TIA, within 60 days
after December 31 of each year, the Trustee shall mail to (i) each
Certificateholder as required by Section 313(c) of the TIA and (ii) the
Depositor, a brief report dated as of such date that complies with Section
313(a) of the TIA. A copy of any report delivered pursuant to this Section
7.6(a) shall, at the time of its mailing to Certificateholders and the
Depositor, be filed by the Trustee with the Commission and the New York Stock
Exchange (or, if the Class A-1 Certificates are no longer listed on the New York
Stock Exchange, to any exchange or securities trading system on which the Class
A-1 Certificates are then listed or quoted).
(b) The Trustee shall within 90 days of an event
described in Section 313(b) of the TIA mail to (i) each Certificateholder as
required by Section 313(c) of the TIA and (ii) the Depositor, a brief report
dated as of such date that complies with Section 313(b) of the TIA. A copy of
any report delivered pursuant to this Section 7.6(b) shall, at the time of its
mailing to Certificateholders and the Depositor, be filed by the Trustee with
the Commission and the New York Stock Exchange (or, if the Class A-1
Certificates are no longer listed on the New York Stock Exchange, to any
exchange or securities trading system on which the Class A-1 Certificates are
then listed or quoted).
43
(c) Annual unaudited reports setting forth the amounts of
payments on the Certificates, and whether such amounts are principal, premium or
interest shall be prepared by the Trustee and sent to the Certificateholders.
Section 7.7. Representations and Warranties of Trustee.
The Trustee hereby represents and warrants, for the benefit of
the Certificateholders, that:
(a) it is a banking corporation duly incorporated,
validly existing and in good standing under the laws of the United States of
America;
(b) it has full power, authority and legal right to
execute, deliver, and perform its obligations under, this Agreement, and has
taken all necessary action to authorize the execution, delivery and performance
by it of this Agreement;
(c) the Trustee maintains its books and records with
respect to its Securities Accounts in the State of New York;
(d) the Trustee has not granted any lien on the Trust
Assets nor are the Trust Assets subject to any lien on properties of the Trustee
in its individual capacity; the Trustee has no actual knowledge and has not
received actual notice of any lien on the Trust Assets (other than any liens of
the Trustee in favor of the beneficiaries of the Trust Agreement); other than
the interests of the Certificateholders, the books and records of the Trustee do
not identify any Person as having an interest in the Trust Assets;
(e) the Trustee makes no representation as to (i) the
validity, legality, sufficiency or enforceability of any of the Trust Assets or
(ii) the collectability, insurability, effectiveness or suitability of any of
the Trust Assets;
(f) the execution, delivery and performance by it of this
Agreement (i) will not violate any provision of any law or regulation governing
the powers of the Trustee or any order, writ, judgment or decree of any court,
arbitrator or governmental authority applicable to the Trustee or any of its
assets and (ii) will not violate any provision of the corporate charter or
by-laws of the Trustee;
(g) this Agreement has been duly executed and delivered
by the Trustee and constitutes the legal, valid and binding agreement of the
Trustee, enforceable against the Trustee in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization, or
other similar laws affecting the enforcement of creditors' rights in general and
by general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law; and
(h) the execution, delivery and performance by the
Trustee of this Agreement will not require the authorization, consent or
approval of, the giving of notice to, the filing or registration with, or the
taking of any other action in respect of, any governmental authority or agency
regulating the banking and corporate trust activities of banks or trust
companies in the jurisdiction in which the Trust was formed.
44
The Trustee and the Securities Intermediary hereby represent
and warrant that:
(a) The Securities Account is a "securities account"
within the meaning of Section 8-501 of the UCC and contains only property held
by the Securities Intermediary as fiduciary. The Securities Intermediary is
acting in the capacity of a "securities intermediary" within the meaning of
Section 8-102(a)(14) of the UCC;
(b) The Granted Underlying Securities have been (i)
delivered to the Securities Intermediary pursuant to the Agreement; (ii)
credited to the Securities Account; and (iii) registered in the name of the
Securities Intermediary or its nominee, indorsed to the Securities Intermediary
or in blank or credited to another securities account maintained in the name of
the Securities Intermediary. In no case will any Underlying Securities or other
financial assets credited to the Securities Account be registered in the name of
the Depositor, payable to the order of the Depositor or specially indorsed to
the Depositor except to the extent the foregoing have been specially indorsed to
the Securities Intermediary or in blank; and
(c) The Securities Account is an account to which
financial assets are or may be credited, and the Securities Intermediary shall
treat the Trustee as entitled to exercise the rights that comprise any financial
asset credited to the account.
Section 7.8. Reliance; Advice of Counsel.
(a) The Trustee shall incur no liability to anyone in
acting upon any signature, instrument, notice, resolution, request, consent,
order, certificate, report, opinion, bond, facsimile transmission or other
document or paper reasonably believed by it to be genuine and reasonably
believed by it to be signed by the proper party or parties and need not
investigate any fact or matter in any such document. The Trustee may accept a
certified copy of a resolution of the board of directors or other governing body
of any corporate party as conclusive evidence that such resolution has been duly
adopted by such body and that the same is in full force and effect. As to any
fact or matter the method of the determination of which is not specifically
prescribed herein, the Trustee may for all purposes hereof rely on a
certificate, signed by the president or any vice president or by the treasurer
or other authorized officers of the relevant party, as to such fact or matter,
and such certificate shall constitute full protection to the Trustee for any
action taken or omitted to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts
hereby created and in the performance of its duties and obligations under this
Agreement, the Trustee: (i) may act directly or through its agents, attorneys,
custodians or nominees (including the granting of a power of attorney to
Responsible Officers of the Trustee to execute and deliver this Agreement, any
Certificate or other documents related thereto on behalf of the Trustee)
pursuant to agreements entered into with any of them, and the Trustee shall not
be liable for the conduct or misconduct of such agents, attorneys, custodians or
nominees if such agents, attorneys, custodians or nominees shall have been
selected by the Trustee in good faith and with reasonable care and (ii) may
consult with counsel, accountants and other skilled professionals to be selected
in good faith and with reasonable care and employed by it. The Trustee shall not
be liable for anything done, suffered or omitted in good faith by it in
accordance with the opinion or advice of any such accountants or other such
persons and not contrary to this Agreement.
45
Section 7.9. Trustee May Own Certificates.
The Trustee in its individual or any other capacity shall be
permitted to become the owner or pledgee of Certificates and may deal with the
Depositor in the same manner as it would have if it were not the Trustee,
subject to the limitations on the rights of the Trustee, if it is holding the
Certificates in its individual capacity, in voting on any demand, authorization,
direction, notice, consent or waiver hereunder, set forth in the definition of
"Outstanding" in Section 1.1.
Section 7.10. Compensation and Indemnity.
U.S. Bank Trust National Association shall be entitled to
receive from the Depositor, as compensation for acting as Trustee hereunder and
acting as Option Agent under the Call Option Agreements, fees pursuant to a
separate agreement between U.S. Bank Trust National Association and the
Depositor, and shall be reimbursed by the Depositor for all reasonable expenses,
disbursements and advances incurred or made as Trustee (including the reasonable
compensation, disbursements and expenses of its counsel and other persons not
regularly in its employ). The Depositor shall indemnify and hold harmless the
Trustee and its successors, assigns, agents, directors, officers and employees
against any and all loss, liability or reasonable expense (including attorney's
fees) incurred by it in connection with any legal action relating to the
administration of this Trust and the performance of its duties thereunder. The
Trustee shall notify the Depositor promptly of any claim for which it or any
such Person may seek indemnity. Failure by the Trustee to so notify the
Depositor shall not relieve the Depositor of its obligations hereunder. The
Depositor need not reimburse any expense or indemnify against any loss,
liability or expense that is incurred by the Trustee through the Trustee's own
misconduct, negligence or bad faith in the performance of the Trustee's duties
under this Agreement. The Depositor agrees that the provisions of this Section
7.10 shall apply to U.S. Bank Trust National Association acting in its
individual capacity hereunder in the same manner as they apply to the Trustee.
The indemnities contained in this Section 7.10 shall survive the resignation or
termination of the Trustee or the termination of this Agreement.
Failure by the Depositor to pay, reimburse or indemnify the
Trustee shall not entitle the Trustee to any payment, reimbursement or
indemnification from the Trust, nor shall such failure release the Trustee from
the duties it is required to perform under this Agreement. Any unpaid,
unreimbursed or unindemnified amounts shall not be borne by the Trust and shall
not constitute a claim against the Trust (except to the extent that the Trustee
is entitled to recover such amount pursuant to the provisions of Section
7.16(a)).
Section 7.11. Replacement of Trustee.
(a) The Trustee may resign at any time and be discharged
from the trusts hereby created by giving 30 days' prior written notice thereof
to the Depositor. The Depositor shall appoint a successor Trustee by delivering
a written instrument, in duplicate, to the resigning Trustee and the successor
Trustee. If no successor Trustee shall have been appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee. The Depositor shall remove the Trustee if:
46
(i) the Trustee shall cease to be eligible in
accordance with the provisions of Section 7.14 and shall fail to resign
after written request therefor by the Depositor;
(ii) the Trustee shall be adjudged bankrupt or
insolvent;
(iii) a receiver or other public officer shall be
appointed or take charge or control of the Trustee or of its property
or affairs for the purpose of rehabilitation, conservation or
liquidation;
(iv) the Trustee shall fail to carry out its
duties hereunder; or
(v) the Trustee shall otherwise be incapable of
acting.
(b) If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, the Depositor shall promptly
appoint a successor Trustee by written instrument, in duplicate (one copy of
which instrument shall be delivered to the outgoing Trustee so removed and one
copy to the successor Trustee) and shall pay all fees and expenses owed to the
outgoing Trustee.
(c) Unless the Trust has been completely liquidated and
the proceeds of the liquidation distributed to Certificateholders, any
resignation or removal of the Trustee and appointment of a successor Trustee
pursuant to any of the provisions of this Section 7.11 shall not become
effective until a written acceptance of appointment is delivered by the
successor Trustee to the outgoing Trustee and the Depositor and all fees and
expenses due to the outgoing Trustee are paid; provided that with respect to any
of the events specified in Section 7.11(a), the payment of the fees and expenses
due to the outgoing Trustee shall not be a condition for the removal of such
Trustee and the appointment of a successor Trustee. Any successor Trustee
appointed pursuant to this Section 7.11 must be eligible to act in such capacity
in accordance with Section 7.14 and, following compliance with the preceding
sentence, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor under this Agreement, with like effect as if
originally named as Trustee. The Depositor shall provide notice within five (5)
Business Days of the resignation or removal of the Trustee to each Rating Agency
and each Certificateholder.
(d) The predecessor Trustee shall upon payment of its
fees and expenses deliver to the successor Trustee all documents and statements
and moneys held by it under this Agreement. The Depositor and the predecessor
Trustee shall execute and deliver such instruments and do such other things as
may reasonably be required for fully and certainly vesting and confirming in the
successor Trustee all such rights, powers, duties and obligations.
(e) Upon acceptance of appointment by a successor Trustee
pursuant to this Section 7.11, the Depositor shall mail notice of the successor
of such Trustee to all Certificateholders and each Rating Agency.
Section 7.12. Merger or Consolidation of Trustee.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation
47
to which the Trustee shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided that such corporation is eligible
pursuant to Section 7.14, and without the execution or filing of any instrument
or any further act on the part of any of the parties hereto; provided, however,
that the Trustee shall mail notice of such merger or consolidation to the
Depositor and each Rating Agency.
Section 7.13. Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this
Agreement, at any time, for the purpose of meeting any legal requirement of any
jurisdiction in which any part of the Trust Assets may at the time be located,
the Depositor and the Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the Trustee and the Depositor to act as co-trustee, jointly with the Trustee, or
as separate trustee or trustees, of all or any part of the Trust Assets, and to
vest in such Person in such capacity such title to the Trust Assets, or any part
thereof, and, subject to the other provisions of this Section 7.13, such powers,
duties, obligations, rights and trusts as the Depositor and the Trustee may
consider necessary or desirable. If the Depositor shall not have joined in such
appointment within fifteen (15) days after the receipt by it of a request so to
do, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee under this Agreement shall be required to meet
the terms of eligibility as a successor trustee pursuant to Section 7.14 and no
notice of the appointment of any co-trustee or separate trustee shall be
required pursuant to Section 7.11.
(b) Each separate trustee and co-trustee shall, to the
extent permitted by law, be appointed and act subject to the following
provisions and conditions:
(i) all rights, power, duties and obligations
conferred or imposed upon the Trustee shall be conferred upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed,
the Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust Assets or any portion
thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(ii) no separate trustee or co-trustee under this
Agreement shall be personally liable by reason of any act or omission
of any other trustee under this Agreement; and
(iii) the Depositor and the Trustee acting jointly
may at any time accept the resignation of, or may remove, any separate
trustee or co-trustee.
(c) Any notice, request or other writing given to the
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this
48
Agreement and the conditions of this Article VII. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject to
all the provisions of this Agreement, specifically including every provision of
this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Each such instrument shall be filed with
the Trustee and a copy thereof given to the Depositor.
(d) Any separate trustee or co-trustee may at any time
appoint the Trustee as its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 7.14. Eligibility Requirements for Trustee.
(a) The Trustee shall at all times satisfy the
requirements of Section 310(a) of the TIA. The Trustee shall at all times be a
bank that is not an Affiliate of the Depositor (but may have normal banking
relationships with the Depositor or the Underlying Securities Issuer and its
respective Affiliates), which (i) is organized and doing business under the laws
of any State or the United States; (ii) is authorized under such laws to
exercise corporate trust powers; (iii) has a combined capital and surplus of at
least $50,000,000; (iv) is subject to supervision or examination by federal or
state authority; and (v) has (or has a parent which has) a long-term unsecured
debt rating of at least BBB- by Standard & Poor's and at least Baa3 by Moody's.
If such corporation shall publish reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purpose of this Section 7.14, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 7.14, the Trustee shall resign immediately in the
manner and with the effect specified in Section 7.11.
(b) The Trustee shall comply with Section 310(b) of the
TIA; provided that if the exclusion requirements set forth in Section 310(b)(1)
of the TIA are met, any other trust agreement under which other securities are
outstanding that evidence beneficial ownership interests in obligations of any
Underlying Securities Issuer shall be excluded from the operation of Section
310(b)(1) of the TIA.
Section 7.15. Voting of the Underlying Securities Other than
in the Case of an Underlying Securities Event of Default.
The Trustee shall not consent to any amendment, modification
or supplement to the Underlying Securities except as permitted by this
Agreement.
(a) The Trustee shall exercise any voting or consent
rights with respect to the Underlying Securities as set forth in Sections
7.15(b), (c) or (d) below. The Trustee shall not, however, exercise such rights
if the exercise thereof (or the action with respect to which such rights
49
are so elicited) would adversely affect the intended classification of the Trust
as a grantor trust for federal income tax purposes.
(b) The Trustee may, subject to the provisions of Section
7.15(c) and, in the case of an Underlying Securities Event of Default, Section
7.16, vote and give consents and waivers in respect of the Underlying Securities
as permitted by DTC. In the event that the Trustee receives a request from DTC
or the Underlying Securities Trustee or the Underlying Securities Issuer for its
consent to any amendment, modification or waiver of the Underlying Securities,
the Underlying Securities Indenture or any other documents relating to the
Underlying Securities, 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 Option Holder
with respect to Class A-1 Certificates and each Class A-1 Certificateholder of
record as of such date. The Trustee shall request instructions from the Class
A-1 Certificateholders as to whether or not to consent to or vote to accept such
amendment, modification, waiver or solicitation, and, subject to Section
7.15(c), the Trustee will vote a principal amount of the Underlying Securities
equal to the Certificate Principal Balance of the Outstanding Class A-1
Certificates whose holders have given the Trustee instructions to vote.
(c) Notwithstanding anything to the contrary herein, the
Trustee shall at no time vote or consent to any matter:
(i) unless such vote or consent (or the action
with respect to which such vote or consent is solicited) would not,
based on an Opinion of Counsel, adversely affect the intended
classification of the Trust as a grantor trust for federal income tax
purposes; or
(ii) that would amend the Underlying Securities
Indenture or Underlying Securities to alter the timing or amount of any
payment on the Underlying Securities, except at the direction of the
holders of all the Outstanding Class A-1 Certificates and all the
Option Holders; or
(iii) that 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 at the direction of the holders of all the
Outstanding Class A-1 Certificates and all the Option Holders.
The Trustee shall have no liability for any failure to act
resulting from any Certificateholder's or Option Holder's late return of, or
failure to return, directions requested by the Trustee from the Class A-1
Certificateholders or Option Holders with respect to Class A-1 Certificates.
(d) Subject to Section 2.15, if 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 Underlying Securities, or any other offer is
made for the Underlying Securities, the Trustee shall mail a notice of such
offer to each Option Holder with respect to the Class A-1 Certificates and to
each Class A-1 Certificateholder of record as of such date and must reject any
such offer unless directed to accept it by holders of 100% of the Outstanding
Class A-1 Certificates and 100% of the Option Holders, in which case the Trustee
will
50
accept the offer provided that the Trustee has received an Opinion of Counsel to
the effect that any such exchange will not adversely affect the intended
classification of the Trust as a grantor trust for federal income tax purposes
and will not result in a deemed exchange of the Underlying Securities or the
Certificates for federal income tax purposes. However, if an Option Holder with
respect to Class A-1 Certificates has given notice of its exercise of Call
Options on the Class A-1 Certificates and has paid the Call Price within such
ten (10) Business Day period, the Trustee shall, with respect to such offer,
accept the offer for a principal amount of the Underlying Securities equal to
the Certificate Principal Balance of the Outstanding Class A-1 Certificates
subject to such Call Options as directed by the Option Holder.
Section 7.16. Trustee's Enforcement and Voting of Underlying
Securities Upon an Underlying Securities Event of Default.
(a) If (i) default is made in the payment of any
installment of interest on the Underlying Securities when the same becomes due
and payable, and such default continues unremedied for the period specified in
the Underlying Securities Indenture (or, if no such period is specified, upon
such default); or (ii) default is made in the payment of the principal or
premium (if any) of or any installment of the principal or premium (if any) of
any Underlying Securities when the same becomes due and payable, and such
default continues unremedied for the period specified in the Underlying
Securities Indenture (or, if no such period is specified, upon such default),
and the Underlying Securities Issuer shall, upon demand of the Trustee, fail to
pay forthwith to the Trustee, for the benefit of the Certificateholders, the
whole amount then due and payable on the Underlying Securities for principal or
premium (if any) and interest, with interest upon the overdue principal, premium
and interest at the rate borne by the Underlying Securities as provided for in
the Underlying Securities Indenture, and in addition thereto such further amount
as shall be sufficient to cover the costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the Trustee
and its agents and counsel, to the extent permitted by law and the terms of the
Underlying Securities (such amount, the "Whole Amount Due") the Trustee shall
promptly thereafter proceed against the Underlying Securities Issuer on behalf
of the Certificateholders to enforce the Underlying Securities or otherwise
protect the interests of the Certificateholders (including, in the Trustee's
discretion, voting to accelerate the Underlying Securities). If any Underlying
Securities Event of Default (other than of the type described in clauses (i) and
(ii) above) occurs and is continuing, then, subject to Section 7.1(f), the
Trustee may proceed against the Underlying Securities Issuer on behalf of the
Certificateholders; provided, however, that the Trustee shall not take any
action as a result of any Underlying Securities Event of Default (other than of
the type described in clauses (i) and (ii) above) that would entitle the Trustee
to any reimbursement out of the assets of the Trust without the approval of the
holders of the Class A-1 Certificates representing a majority of the Voting
Rights. Notwithstanding the foregoing, the holders of the Class A-1 Certificates
representing a majority of the Voting Rights shall be entitled to direct the
Trustee in any proceeding, subject to the receipt by the Trustee of indemnity
satisfactory to it, and may instruct the Trustee to stop the proceeding against
the Underlying Securities Issuer and to sell the Underlying Securities instead,
in the manner determined by the Trustee and using commercially reasonable
efforts. The Trustee shall be entitled to recover its reasonable expenses of any
such proceeding in respect of a failure by the Underlying Securities Issuer to
pay the Whole Amount Due from the proceeds of the Trust Assets, and to secure
such obligation to pay such expenses, the Trustee shall have a lien prior to the
Certificates on all Trust Assets for the amount of such expenses.
51
(b) If there is an Underlying Securities Event of Default
and such Underlying Securities Event of Default is known to the Trustee, the
Trustee shall give notice to the Class A-1 Certificateholders and the Option
Agent in the manner and to the extent provided in Section 313(c) of the TIA
within five (5) Business Days after the Trustee has actual knowledge of the
occurrence of such Underlying Securities Event of Default. Such notice shall
identify the Underlying Securities and set forth (i) the date and nature of such
event of default, (ii) if applicable, the amount of interest, principal or
premium in default, and (iii) any other information that the Trustee may deem
appropriate.
(c) If, following an Underlying Securities Event of
Default, the Trustee receives money or other property in respect of the
Underlying Securities (including from the sale thereof) or actual notice that
money or other property will be received, the Trustee will promptly give notice
to the registered holders of the Outstanding Class A-1 Certificates that remain
unpaid and to the Option Agent. Such notice shall state that the Trustee shall,
not later than 30 days after the receipt of such moneys or other property,
allocate and distribute such moneys or other property to the holders of the
Class A-1 Certificates then Outstanding and unpaid (after deducting the costs
incurred in connection therewith) in accordance with Section 6.2(e). Non-cash
property shall be distributed in-kind except that, to the extent necessary to
avoid distribution of fractional securities or other fractional property to
Class A-1 Certificateholders, non-cash property will be liquidated by the
Trustee in the manner determined by the Trustee and using commercially
reasonable efforts, and the proceeds thereof distributed in cash.
(d) If an Underlying Securities Event of Default occurs
and is continuing, in its discretion or if directed by holders of Outstanding
Class A-1 Certificates representing a majority of the Voting Rights of the
Outstanding Class A-1 Certificates, 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 accelerate the
Underlying Securities by declaring the unpaid principal balance and any premium
of the Underlying Securities plus any accrued and unpaid interest thereon to be
due and payable.
Section 7.17. Annual Statement.
The Trustee shall deliver to the Depositor, on or before February 15th
of each year, an annual statement signed by a Responsible Officer of the Trustee
to the effect that the Trustee has fulfilled its obligations under this Trust
Agreement throughout the preceding year with respect to the Certificates. A copy
of such certificate may be obtained by any Certificateholder by a request in
writing to the Trustee addressed to the Corporate Trust Office of the Trustee.
ARTICLE VIII
TERMINATION OF AGREEMENT
Section 8.1. Termination of Agreement.
(a) This Agreement (other than Section 7.10) shall
terminate and the Trust shall dissolve, wind-up and terminate and be of no
further force or effect 30 days after the final distribution by the Trustee of
all moneys or other property or proceeds of the Trust Assets in
52
accordance with the terms of Article VI of this Agreement (the date of such
termination, the "Termination Date"). The bankruptcy, liquidation, dissolution,
death or incapacity of any Certificateholder shall not (A) operate to terminate
this Agreement or the Trust, (B) entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of all or any part of the
Trust or the Trust Assets or (C) otherwise affect the rights, obligations and
liabilities of the parties hereto.
(b) Neither the Depositor nor any Certificateholder in
its capacity as such shall be entitled to revoke or terminate the Trust.
Notwithstanding the foregoing sentence, a Certificateholder that is also an
Option Holder may exercise any Call Option in accordance with its terms and
exchange Certificates acquired pursuant to such exercise for the Underlying
Securities pursuant to Section 2.15 hereof whether or not such exercise would
result in the early termination of the Trust pursuant to the terms of this
Agreement.
(c) Notice of termination of the Trust, specifying the
date upon which the Certificateholders shall surrender their Certificates to the
Trustee for payment of the final distribution and cancellation, shall be given
by the Trustee by letter to the Certificateholders mailed in accordance with
Section 10.3 below stating: (i) the date upon or with respect to which final
distributions on the Certificates shall be made upon presentation and surrender
of the Certificates at the office of the Trustee therein designated; (ii) the
amount of any such final distributions; (iii) that the Record Date, if any,
otherwise applicable to such Distribution Date is not applicable, distributions
being made only upon presentation and surrender of the Certificates at the
office of the Trustee therein specified; (iv) the office where Definitive
Certificates should be surrendered to the Trustee; and (v) that after such date,
no further periodic distributions shall accrue on the Certificates. The Trustee
shall give such notice to the Certificate Registrar (if other than the Trustee)
and the Depositor at the time such notice is given to Certificateholders. Upon
presentation and surrender of the Certificates, the Trustee shall cause to be
distributed to Certificateholders amounts distributable on such Distribution
Date pursuant to Section 6.2.
(d) If any Certificateholder shall not surrender its
Certificates for cancellation within six months after the date specified in the
written notice described in Section 8.1(c) above, the Trustee shall give a
second written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within one year after the second notice any of the Certificates
shall not have been surrendered for cancellation, the Trustee may take
appropriate steps, or may appoint an agent to take appropriate steps, to contact
the remaining Certificateholders concerning surrender of their Certificates, and
the cost thereof shall be paid out of the funds and other assets that shall
remain subject to this Agreement.
ARTICLE IX
AMENDMENTS
Section 9.1. Allocation of Voting Rights.
Except as otherwise provided herein, so long as the
Certificates remain Outstanding, the Class A-1 Certificateholders shall have 1
(one) vote for each $25.00 of Certificate
53
Principal Balance of Class A-1 Certificates held by them and the Class B-1
Certificateholders shall not have any Voting Rights, except with respect to any
amendment to this Agreement that would materially adversely affect the Class B-1
Certificateholders, in which case the Class B-1 Certificateholders shall have 1
(one) vote for each $25.00 of Certificate Notional Amount of Class B-1
Certificates held by them.
Section 9.2. Amendments Without Consent of Certificateholders.
This Agreement may be amended by the Depositor and the Trustee
without the consent of any of the Certificateholders (but with prior notice to
the Rating Agency), to (a) cure any error or ambiguity, (b) correct or
supplement any provision in this Agreement that may be or is inconsistent with
any other provision in this Agreement, (c) add to the covenants, restrictions or
obligations of the Depositor or the Trustee for the benefit of the
Certificateholders, (d) provide for the appointment of a successor Trustee with
respect to the Trust Assets and add to or change any provisions that shall be
necessary to facilitate the administration of the trusts hereunder by more than
one trustee pursuant to Article VII, and (e) add, change or eliminate any other
provisions of this Agreement in any manner that shall not, as evidenced by an
Opinion of Counsel, (i) adversely affect in any material respect the interests
of the Certificateholders or Option Holders or (ii) adversely affect the
intended classification of the Trust as a grantor trust for federal income tax
purposes, or result in a sale or exchange of any Certificate for tax purposes,
provided that the Trustee has received written confirmation from each Rating
Agency that the Rating Agency Condition will be satisfied if such amendment is
made and (f) to comply with any requirements imposed by the Code.
Section 9.3. Amendments With Consent of Certificateholders.
This Agreement may be amended from time to time by the
Depositor and the Trustee with the consent of Class A-1 Certificateholders whose
Class A-1 Certificates evidence more than a majority of the Voting Rights as of
the close of business on the record date for such consent as established by the
Trustee (which consent, whether given pursuant to this Section 9.3 or pursuant
to any other provision of this Agreement, shall be conclusive and binding on
such Person and on all future holders of Certificates and of any Certificates
issued upon the transfer thereof or in exchange thereof or in lieu thereof
whether or not notation of such consent is made upon the Certificates), and upon
satisfaction of the Rating Agency Condition, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement, or of modifying in any manner the rights of the
Certificateholders; provided that if the amendment would materially adversely
affect any Class of Certificateholders or the rating of any Class of
Certificates, such amendment must be approved by a majority of the Voting Rights
of each such Class, and provided further, however, that no such amendment shall
(a) reduce in any manner the amount of, or alter the timing of, collections of
payments on Trust Assets or distributions or payments that are required to be
made on any Certificate, (b) reduce the aforesaid percentage of Voting Rights
required to consent to any such amendment, (c) as evidenced by an Opinion of
Counsel, adversely affect the intended classification of the Trust as a grantor
trust for federal income tax purposes, (d) cause the termination of the Trust,
without, in each case, the consent of all Class A-1 Certificateholders, or (e)
change any provisions relating to the Call Options that would adversely affect
the Option Holders without the consent of all of the Option Holders.
54
Section 9.4. Form of Amendments.
(a) Promptly after the execution of any amendment,
supplement or consent pursuant to Section 9.1, 9.2 or 9.3, the Trustee shall
furnish a copy of such amendment, supplement or consent to each
Certificateholder and to each Rating Agency.
(b) It shall not be necessary for the consent of
Certificateholders pursuant to Section 9.2 or 9.3 to approve the particular form
of any proposed amendment or consent, but it shall be sufficient if such consent
shall approve the substance thereof. The manner of obtaining such consents (and
any other consents of Certificateholders provided for in this Agreement) and of
evidencing the authorization of the execution thereof by Certificateholders
shall be subject to such reasonable requirements as the Trustee may prescribe.
(c) Prior to the execution of any amendment to this
Agreement, the Trustee shall be entitled to receive and rely upon an Opinion of
Counsel stating that the execution of such amendment is authorized or permitted
by this Agreement and all conditions provided for in this Trust Agreement
relating to such amendment have been complied with. The Trustee may, but shall
not be obligated to, enter into any such amendment that affects the Trustee's
own rights, duties or immunities under this Agreement or otherwise.
ARTICLE X
MISCELLANEOUS
Section 10.1. Certificateholders Have No Legal Title to Trust
Property.
The Certificateholders shall not have legal title to any part
of the Trust Assets. The Certificateholders shall be entitled to receive
distributions with respect to their beneficial ownership interests in the Trust
Assets only in accordance with Articles VI and VIII. No transfer, by operation
of law or otherwise, of any right, title or interest in the Trust Assets shall
operate to terminate this Agreement or the trusts hereunder or entitle any
transferee to an accounting or to the transfer to it of legal title to any part
of the Trust Assets.
Section 10.2. Limitations on Rights of Others.
The provisions of this Agreement are solely for the benefit of
the Trustee, the Depositor, the Option Agent, the Certificateholders and the
holders of the Call Options, and nothing in this Agreement, whether express or
implied, shall be construed to give to any other Person any legal or equitable
right, remedy or claim in the Trust Assets or under or in respect of this
Agreement or any covenants, conditions or provisions contained herein.
Section 10.3. Notices.
(a) All demands, notices and communications upon or to
the Depositor or the Trustee or any Rating Agency under this Agreement shall be
in writing, personally delivered, sent by electronic facsimile (with hard copy
to follow via first class mail) or mailed by certified mail-return receipt
requested, and shall be deemed to have been duly given upon receipt (i) in the
55
case of the Depositor, to the Depositor at the following address: Corporate
Asset Backed Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇; (ii) in the case of the Trust or the Trustee,
to the Trustee at its Corporate Trust Office; (iii) in the case of the Option
Agent, to the Option Agent c/o the Trustee at its Corporate Trust Office; (iv)
in the case of any Rating Agency, at the applicable address specified by such
Rating Agency from time to time; and (v) in the case of any other Person, to
such other Person at such other address as shall be designated by such Person in
a written notice to the other parties to this Agreement.
(b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage prepaid, at the
address of such Certificateholder as shown in the Certificate Register. Any
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
Section 10.4. Tax Classification Election.
In the event that the Trust is not classified as a grantor
trust for federal income tax purposes, the Trustee shall file such forms as may
be required, or as the Depositor may specify, for the Trust to elect pursuant to
Section 761 of the Code to be excluded from the application of Subchapter K of
the Code. By their acceptance of the Certificates, the Certificateholders
authorize the Trustee to execute such forms on their behalf as may be required
to make such election and acknowledge that they will be able to determine their
taxable income with respect to the Certificates accurately without regard to the
provisions of Subchapter K of the Code.
Section 10.5. Severability.
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Certificateholders
thereof.
Section 10.6. Counterparts.
This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument.
Section 10.7. Successors and Assigns.
All covenants and agreements contained herein shall be binding
upon the Depositor, the Trustee, and each Certificateholder and their respective
successors and permitted assigns, and such covenants shall inure to the benefit
of such persons and the Option Agent and the holders of the Call Options, all as
herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by a Certificateholder shall bind the successors and
assigns of such Certificateholder.
56
Section 10.8. No Petition Covenant.
Notwithstanding any prior termination of this Agreement, the
Trustee and U.S. Bank Trust National Association acting in its individual
capacity hereunder, each Certificateholder and each Certificate Owner shall not,
prior to the date which is one year and one day after the termination of this
Agreement, and the payment in full of all debt or other securities of the Trust
or the Depositor, or any trust created by the Depositor that issues certificates
rated at the request of the Depositor by a nationally recognized rating agency,
acquiesce in, petition or otherwise invoke or cause the Trust or the Depositor
to invoke the process of any court or governmental authority for the purpose of
commencing or sustaining a case against the Trust or the Depositor under any
federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Trust or the Depositor or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Trust or the
Depositor.
Section 10.9. No Recourse.
Each Certificateholder by accepting a Certificate acknowledges
that such Certificateholder's Certificates represent beneficial interests in the
Trust only and do not represent interests in or obligations of the Depositor,
the Trustee, any Option Holder or any Affiliate of any of them and no recourse
may be had against such parties or their assets, except as may be expressly set
forth or contemplated in this Agreement or the Certificates, and each
Certificateholder's recourse is limited to the Underlying Securities and the
proceeds thereof. The Trustee shall have no recourse to the Underlying
Securities.
Section 10.10. Headings.
The headings of the various Articles and Sections herein are
for convenience of reference only and shall not define or limit any of the terms
or provisions hereof.
Section 10.11. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ANY CONFLICT OF LAW PROVISION,
OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW.
Section 10.12. Conflict with Trust Indenture Act.
(a) If any provision of this Agreement limits, qualifies
or conflicts with a provision of the TIA that is required to be included in this
Agreement by any of the provisions of the TIA, such imposed provision shall
control. If any provision of this Agreement modifies or excludes any provision
of the TIA that may be so modified or excluded, the latter provision shall be
deemed to apply to this Agreement as so modified or excluded, as the case may
be.
(b) The provisions of Sections 310 through 317 of the TIA
that impose duties on any Person (including the provisions automatically deemed
included herein unless expressly
57
excluded by this Agreement) are a part of and govern this Agreement, whether or
not physically contained herein.
58
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be executed by their respective duly authorized officers or
authorized signatories as of the date first above written.
CORPORATE ASSET BACKED CORPORATION, as
Depositor
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Authorized Signatory
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee, and in its individual
capacity, as Option Agent and as
Securities Intermediary
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Responsible Officer
EXHIBIT A
TO TRUST AGREEMENT
SERIES 2004-1 UNDERLYING SECURITIES SCHEDULE
Underlying Securities Issuer: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital I
Underlying Securities: 6.345% Capital Securities
Interest Deferral: Each Underlying Security represents an
undivided preferred beneficial interest in
the assets of the Underlying Securities
Issuer. The Underlying Securities Issuer
used the proceeds from the sale of its
Underlying Securities and its common
securities to purchase 6.345% junior
subordinated debentures due February 15,
2034 (the "GS junior subordinated
debentures") issued by The ▇▇▇▇▇▇▇ Sachs
Group Inc. The Underlying Securities Issuer
will pass through to the holders of the
Underlying Securities as distributions the
interest payments it receives from The
▇▇▇▇▇▇▇ ▇▇▇▇▇ Group, Inc. on the GS junior
subordinated debentures.
Underlying Securities Trustee: The Bank of New York (Delaware)
Issue Date: February 20, 2004
Maturity Date: February 15, 2034
Currency: US dollars
Denominations: $1,000 and multiples of $1,000
Aggregate Principal Amount Issued: $2,750,000,000
Public Offering Price: 100%
Aggregate Principal Amount $2,750,000,000
Outstanding:
Type of Security: Capital Securities
Common Code: 018675684
ISIN Number: US38143VAA70
CUSIP No.: ▇▇▇▇▇▇▇▇▇
Exhibit A-1
Stated Interest Rate: 6.345% per annum
Interest deferral: The ▇▇▇▇▇▇▇ Sachs Group, Inc. may defer the
payment of interest on the GS junior
subordinated debentures at any time and in
each case for up to 10 semi-annual
consecutive interest periods, provided that
(i) no extension period may extend beyond
the stated maturity date of the GS junior
subordinated debentures; and (ii) The
▇▇▇▇▇▇▇ ▇▇▇▇▇ Group, Inc. is not in default
under the subordinated debt indenture
governing the GS junior subordinated
debentures. If there is a deferral, the
Underlying Securities Issuer also will defer
distributions on the Underlying Securities.
Before any extension period ends, The
▇▇▇▇▇▇▇ Sachs Group, Inc. may elect to
extend the period further. At the end of any
extension period and the payment of all
interest then accrued and unpaid, The
▇▇▇▇▇▇▇ ▇▇▇▇▇ Group, Inc. may elect to begin
a new extension period. There is no
limitation on the number of extension
periods.
Interest Accrual Periods: Interest shall accrue semi-annually on
February 15 and August 15 of each year.
Distribution Dates: Distributions on the GS Capital Securities
will be cumulative from February 20, 2004
and will be payable semi-annually in arrears
on February 15 and August 15 of each year,
beginning August 15, 2004
Mode of Payment: Fixed Rate Security
Principal Amount of $62,500,000
Underlying Securities Deposited
Under Trust Agreement:
Ratings: A1 by Moody's and A- by Standard & Poor's
Guarantor: The ▇▇▇▇▇▇▇ ▇▇▇▇▇ Group, Inc.
Guarantees: The ▇▇▇▇▇▇▇ Sachs Group, Inc. will fully and
unconditionally guarantee, on a subordinated
basis, payments of amounts due on the
Underlying Securities but will not guarantee
payment of distributions or amount payable
on redemption or liquidation of the
Underlying Securities when the Underlying
Securities Issuer does not have funds
available to make payments.
Priority: Ranked equally with common securities of the
Underlying Securities Issuer.
Exhibit A-2
Securities Issuer.
Optional Redemption: The ▇▇▇▇▇▇▇ ▇▇▇▇▇ Group, Inc. may redeem the
Underlying Securities, in whole at any time
or in part from time to time, provided that
no partial redemption may occur when
distributions are deferred. The redemption
price will be the total liquidation amount
of the Underlying Securities being redeemed,
plus accumulated but unpaid distributions up
to and including the redemption date.
In addition, The ▇▇▇▇▇▇▇ Sachs Group, Inc.
may elect to redeem the Underlying
Securities, in whole but not in part, at any
time upon the occurrence of (i) changes in
U.S. federal income tax laws or regulations
that could have adverse tax consequences for
The ▇▇▇▇▇▇▇ ▇▇▇▇▇ Group, Inc. or the
Underlying Securities Issuer; or (ii)
changes in laws or regulations that pose
more than an insubstantial risk that ▇▇▇▇▇▇▇
Sachs Capital I will be required to register
as an "investment company" under the
Investment Company Act of 1940. In each
case, the redemption price will be equal to
the total liquidation amount of the
Underlying Securities being redeemed, plus a
make-whole amount, plus accumulated and
unpaid distributions up to and including the
redemption date. The make-whole amount will
be smaller if the redemption is due to a tax
or regulatory event than if it is not.
Exchange Listing: New York Stock Exchange
Underlying Securities Trust The Underlying Securities have been issued
Agreement: pursuant to a Trust Agreement, dated as of
January 20, 2004, among The ▇▇▇▇▇▇▇ ▇▇▇▇▇
Group, Inc., as depositor of the Underlying
Securities Issuer, and the Bank of New York
(Delaware), as trustee.
The Underlying Securities will be held by the Trustee as book-entry credits to
an account of the Trustee or its agent at The Depository Trust Company, New
York, New York ("DTC").
Exhibit A-3
EXHIBIT B
TO TRUST AGREEMENT
TERMS OF THE CERTIFICATES
I. Terms of the Certificates.
Aggregate Certificate Principal
Balance of Class A-1 Certificates: $62,500,000
Aggregate Certificate Notional
Amount of Class B-1 Certificates: $62,500,000
Authorized Denomination $25.00 and integral multiples thereof
(Class A-1 and Class
B-1 Certificates):
Ratings: The Class A-1 Certificates will be rated A1
by ▇▇▇▇▇'▇ Investors Service, Inc. and A- by
Standard & Poor's Rating Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
Interest Accrual Period: Semi-Annually
Distribution Dates: February 15 and August 15, commencing August
15, 2004 and ending on February 15, 2034
(or, if any of these dates is not a Business
Day, the next succeeding Business Day).
If The ▇▇▇▇▇▇▇ Sachs Group, Inc. defers the
payment of interest on the GS junior
subordinated debentures at any time, the
Underlying Securities Issuer also will defer
distributions on the Underlying Securities.
If The ▇▇▇▇▇▇▇ ▇▇▇▇▇ Group, Inc. does this,
then interest distributions on the Class A-1
and Class B-1 Certificates will stop being
made until the Underlying Securities Issuer
pays interest on the GS capital securities
again.
Pass-Through Rate: In respect of the Class A-1 Certificates,
6.00% per annum. In respect of the Class B-1
Certificates, 0.345% per annum
Final Distribution Date: February 15, 2034
Record Dates: With respect to any Distribution Date, the
15th calendar day preceding such
Distribution Date, whether or not a Business
Day.
Exhibit B-1
Denominations; Specified Currency: The Certificates will be denominated and
payable in U.S. dollars.
Class Seniority or Subordination: N/A
Closing Date: March 8, 2004
Initial Certificate Registrar: U.S. Bank Trust National Association
Corporate Trust Office: U.S. Bank Trust National Association
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇
Attention: Corporate Trust Department
Exhibit B-2
EXHIBIT C
TO TRUST AGREEMENT
FORM OF CLASS A-1 CALLABLE CERTIFICATE
CABCO SERIES 2004-1 TRUST (▇▇▇▇▇▇▇ SACHS CAPITAL I)
CLASS A-1 CALLABLE CERTIFICATE
$62,500,000
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE TRUST
AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE NOMINEE
OF THE DEPOSITORY TRUST COMPANY ("DTC"), CEDE & CO. THIS CERTIFICATE IS
EXCHANGEABLE FOR CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC
OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE TRUST
AGREEMENT AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC OR BY A NOMINEE OF
DTC TO DTC OR ANOTHER NOMINEE OF DTC.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO
THE TRUST 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.
BY ACQUIRING OR ACCEPTING ANY INTEREST IN THIS CERTIFICATE, YOU ACKNOWLEDGE THAT
THIS CERTIFICATE IS SUBJECT TO A PURCHASE OPTION GRANTED TO CORPORATE ASSET
BACKED CORPORATION, A DELAWARE CORPORATION (THE "DEPOSITOR"), BY UBS SECURITIES
LLC UNDER THE CLASS A-1 CALL OPTION AGREEMENT, DATED AS OF MARCH 8, 2004 (THE
"CALL OPTION AGREEMENT"), AMONG THE DEPOSITOR, AS THE SOLE INITIAL OPTION
HOLDER, UBS SECURITIES LLC, AS THE INITIAL PURCHASER FROM THE DEPOSITOR, AND
SOLE HOLDER AT THE TIME OF SUCH GRANT, OF THE CLASS A-1 CERTIFICATES, AND U.S.
BANK TRUST NATIONAL ASSOCIATION, A NATIONAL BANKING ASSOCIATION, ACTING AS
OPTION AGENT FOR THE CLASS A-1 CERTIFICATEHOLDERS WITH RESPECT TO THE CLASS A-1
OPTIONS (THE "OPTION AGENT"), WHICH OBLIGATIONS HAVE BEEN ASSUMED BY EACH
SUBSEQUENT HOLDER OF SUCH CLASS A-1 CERTIFICATES; YOU AGREE TO ASSUME THE
OBLIGATION OF YOUR TRANSFEROR TO PERFORM SUCH CLASS A-1 OPTION; AND YOU
ACKNOWLEDGE THAT YOUR TRANSFEROR HAS BEEN RELEASED FROM ITS OBLIGATION TO
PERFORM SUCH CLASS A-1 OPTION. THE CALL OPTION AGREEMENT PERMITS THE HOLDER OF
THE RELATED CLASS A-1 OPTION TO PURCHASE THIS CERTIFICATE FROM YOU, WITHOUT YOUR
CONSENT, AT THE
Exhibit C-1
TIMES AND ON THE CONDITIONS SPECIFIED IN THE CALL OPTION AGREEMENT AT THE CALL
PRICE SPECIFIED IN THAT AGREEMENT. THE CLASS A-1 OPTION MAY BE TRANSFERRED FROM
TIME TO TIME. UPON THE EXERCISE OF THE RELATED CLASS A-1 OPTION IN THE MANNER
SPECIFIED IN THE CALL OPTION AGREEMENT, THE CLASS A-1 CERTIFICATE WILL BE
TRANSFERRED TO THE RELEVANT CLASS A-1 OPTION HOLDER BY THE TRUSTEE, AND YOU WILL
BE PAID THE CALL PRICE FOR THIS CERTIFICATE IN ACCORDANCE WITH THE TERMS OF THE
CALL OPTION AGREEMENT, WITHOUT THE REQUIREMENT OF ANY FURTHER ACTION BY YOU,
EXCEPT THAT IF THE CLASS A-1 CERTIFICATES ARE HELD IN DEFINITIVE FORM AT SUCH
TIME YOU WILL NOT RECEIVE SUCH CALL PRICE UNLESS AND UNTIL YOU SURRENDER THIS
CERTIFICATE.
This Certificate does not represent an interest in or obligation of the
Depositor, the Trustee or any of their Affiliates, except to the extent
described herein.
Exhibit C-2
CERTIFICATE NUMBER 1 $62,500,000
CUSIP No.: ▇▇▇▇▇▇▇▇▇ Initial Certificate Principal Balance
CABCO SERIES 2004-1 TRUST (▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL I)
CLASS A-1 CALLABLE CERTIFICATE
6.00% PASS-THROUGH RATE
evidencing a beneficial ownership interest in the Trust, as defined below, the
assets of which include $62,500,000 aggregate principal amount of the ▇▇▇▇▇▇▇
Sachs Capital I 6.345% Capital Securities (the "Underlying Securities") and all
payments received thereon, exclusive of the Retained Interest.
THIS CERTIFIES THAT CEDE & Co. is the registered owner of a
nonassessable, fully-paid, beneficial ownership interest in CABCO Series 2004-1
Trust (▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital I) (the "Trust") formed by Corporate Asset Backed
Corporation, as depositor (the "Depositor").
The Trust was created pursuant to a Trust Agreement, dated as of March
8, 2004 (as amended and supplemented from time to time, the "Trust Agreement"),
between the Depositor and U.S. Bank Trust National Association, as trustee (the
"Trustee") and option agent (the "Option Agent"). A summary of certain of the
pertinent provisions of the Trust Agreement is set forth below. To the extent
not otherwise defined herein, the capitalized terms used herein have the
meanings assigned to them in the Trust Agreement.
This Certificate is issued under and is subject to the terms,
provisions and conditions of the Trust Agreement, to which Trust Agreement the
Certificateholder by virtue of the acceptance hereof assents and by which such
Certificateholder is bound. The assets of the Trust include the Underlying
Securities and all proceeds of the Underlying Securities, but do not include the
Retained Interest. Capitalized terms used but not defined herein have the
meanings specified in the Trust Agreement.
Subject to the terms and conditions of the Trust Agreement (including
the availability of funds for distributions and any applicable grace period or
cure period), and all other obligations of the Trust (if any), there shall be
distributed on the dates specified in the Trust Agreement, to the Person in
whose name this Certificate is registered at the close of business on the Record
Date specified in the Trust Agreement, such Certificateholder's pro rata portion
of the distributions in respect of the Class A-1 Certificates to be distributed
to Certificateholders on each such date.
The distributions in respect of this Certificate are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts.
It is the intent of the Depositor and the Certificateholders that the
Trust will be classified as a grantor trust under subpart E, Part I of
subchapter J for purposes of the Internal Revenue Code of 1986. Except as
otherwise required by appropriate taxing authorities, the Depositor and the
Trustee, by executing the Trust Agreement, and each Certificateholder, by
acceptance of a Certificate, agrees to treat, and to take no action inconsistent
with the treatment of, the Certificate
Exhibit C-3
for such tax purposes as interests in a grantor trust, and the provisions of the
Trust Agreement shall be interpreted to further this intention of the parties.
Distributions on this Certificate shall be made as provided in the
Trust Agreement by the Trustee by wire transfer 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 as
otherwise provided in the Trust Agreement and notwithstanding the above, the
final distribution on this Certificate shall 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 office maintained for such purpose by the
Trustee at its Corporate Trust Office.
This Certificate does not represent an obligation of, or an interest
in, the Depositor, the Trustee or any Affiliates of either of them and no
recourse may be had against such parties or their assets, except as may be
expressly set forth or contemplated herein or in the Trust Agreement. In
addition, this Certificate is not guaranteed by any governmental agency or
instrumentality and is limited in right of payment to certain collections with
respect to the Trust Assets, all as more specifically set forth herein and in
the Trust Agreement.
This Certificate does not purport to summarize the Trust Agreement and
reference is hereby made to the Trust Agreement for information with respect to
the rights, benefits, obligations and duties evidenced thereby. A copy of the
Trust Agreement may be examined by any Certificateholder upon request during
normal business hours at the Corporate Trust Office of the Trustee, located at
the office of U.S. Bank Trust National Association, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ and at such other places, if any, designated by the Trustee.
Reference is hereby made to the further terms of this Certificate set
forth on the reverse hereof, which further terms shall for all purposes have the
same effect as if set forth at this place.
This Certificate shall be construed in accordance with the laws of the
State of New York without reference to any conflict of law provision, other than
Section 5-1401 of the General Obligations Law, and the obligations, rights and
remedies of the parties hereunder shall be determined in accordance with such
laws.
Unless the certificate of authentication hereon shall have been
executed by a Responsible Officer of the Trustee by manual signature, this
Certificate shall not entitle the Certificateholder hereof to any benefit under
the Trust Agreement or be valid for any purpose.
Exhibit C-4
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust, has caused
this Certificate to be duly executed by its manual signature as of the date set
forth below.
CABCO SERIES 2004-1 TRUST (▇▇▇▇▇▇▇ ▇▇▇▇▇
CAPITAL I)
By: U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Trustee
By:______________________________________
Responsible Officer
Name:
Title:
Dated: March 8, 2004
This is one of the Certificates referred to in the within-mentioned
Trust Agreement.
By: U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Authenticating Agent
By:______________________________________
Responsible Officer of Trustee
Name:
Title:
Dated: March 8, 2004
Exhibit C-5
[FORM OF REVERSE OF CLASS A-1 CALLABLE CERTIFICATE]
The Trust Agreement permits the amendment thereof, in certain
circumstances, without the consent of the Certificateholders.
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 at its Corporate Trust Office, accompanied by a written instrument
of transfer in form satisfactory to the Trustee and the Certificate Registrar
duly executed by the Certificateholder hereof or such Certificateholder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations of the same Class and a like aggregate Certificate
Principal Balance will be issued to the designated transferee. The initial
Certificate Registrar appointed under the Trust Agreement is the Trustee.
This Certificate is issuable only in registered form in the authorized
denominations specified in the Trust Agreement. As provided in the Trust
Agreement and subject to certain limitations therein set forth, at the option of
a Certificateholder, Certificates are exchangeable for new Certificates of
authorized denominations of the same Class and a like aggregate Certificate
Principal Balance as requested by the Certificateholder surrendering the same;
provided, however, that no Certificate may be subdivided such that the
denomination of any resulting Certificate is other than the authorized
denominations specified in the Trust Agreement.
No service charge shall be made for any registration of transfer or
exchange, but the Trustee or the Certificate Registrar may require payment of a
sum sufficient to cover any tax or governmental charge payable in connection
therewith.
The Depositor, Trustee, Certificate Registrar and any agent of the
Depositor, Trustee or the Certificate Registrar may treat the person in whose
name this Certificate is registered as the owner hereof for all purposes, and
none of the Depositor, Trustee, Certificate Registrar or any such agent shall be
affected by any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement
shall terminate and the Trust created thereby shall dissolve, wind-up and
terminate and be of no further force or effect 30 days after the final
distribution by the Trustee of all moneys or other property or proceeds of the
Trust Assets in accordance with the terms of the Trust Agreement.
Neither the Depositor nor any Certificateholder shall be entitled to
revoke or terminate the Trust.
Exhibit C-6
Schedule 1
[Schedule 1, not repeated here, shall be identical to Exhibits A and B attached
to the Trust Agreement]
Exhibit C-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 typewrite 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 Registrar,
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. Such signature must be
guaranteed by a member of the New York Stock Exchange or a commercial bank or
trust company.
Exhibit C-8
EXHIBIT D
TO TRUST AGREEMENT
FORM OF CLASS B-1 CALLABLE CERTIFICATE
CABCO SERIES 2004-1 TRUST (▇▇▇▇▇▇▇ SACHS CAPITAL I)
CLASS B-1 CALLABLE CERTIFICATE
0.345% PASS-THROUGH RATE
NO EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF ERISA) WHETHER OR NOT IT
IS SUBJECT TO TITLE I OF ERISA, NO PLAN (AS DESCRIBED IN SECTION 4975(e)(1) OF
THE CODE) AND NO ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON
OF ANY SUCH PLAN'S INVESTMENT IN THE ENTITY (EACH, A "PLAN"), OR ANY PERSON
ACTING ON BEHALF OF ANY PLAN, MAY PURCHASE OR HOLD A CERTIFICATE OR ANY INTEREST
THEREIN, UNLESS (I) THE PURCHASER IS AN INSURANCE COMPANY, (II) IT IS NOT A
PERSON WHO HAS DISCRETIONARY AUTHORITY OR CONTROL WITH RESPECT TO THE ASSETS OF
THE TRUST OR A PERSON WHO PROVIDES INVESTMENT ADVICE FOR A FEE (DIRECT OR
INDIRECT) TO OR WITH RESPECT TO SUCH ASSETS, OR AN AFFILIATE OF SUCH A PERSON,
(III) THE SOLE SOURCE OF THE FUNDS BEING USED TO EFFECT ITS PURCHASE OF SUCH
CERTIFICATES IS ITS GENERAL ACCOUNT, (IV) ON THE DATE IT PURCHASES ANY SUCH
CERTIFICATES, LESS THAN 25% OF THE ASSETS OF ITS GENERAL ACCOUNT (AS DETERMINED
BY SUCH INSURANCE COMPANY) CONSTITUTE PLAN ASSETS, (V) THE ACQUISITION AND
HOLDING OF SUCH CERTIFICATES WILL NOT CONSTITUTE A NONEXEMPT PROHIBITED
TRANSACTION IN VIOLATION OF SECTION 406 OF ERISA AND SECTION 4975 OF THE
INTERNAL REVENUE CODE, AND (VI) IF, AS OF ANY LATER DATE ON WHICH ANY PERSON
PURCHASES ANY OF SUCH CERTIFICATES, 25% OR MORE OF THE ASSETS OF SUCH GENERAL
ACCOUNT CONSTITUTE PLAN ASSETS OR IF SUCH COMPANY BECOMES A PERSON WHO HAS
DISCRETIONARY AUTHORITY OR CONTROL WITH RESPECT TO THE ASSETS OF THE TRUST OR A
PERSON WHO PROVIDES INVESTMENT ADVICE FOR A FEE (DIRECT OR INDIRECT) TO OR WITH
RESPECT TO SUCH ASSETS, OR AN AFFILIATE OF SUCH A PERSON, THEN SUCH INSURANCE
COMPANY WILL DISPOSE OF SUCH CERTIFICATES THEN HELD IN ITS GENERAL ACCOUNT
PROMPTLY, AND IN ANY EVENT BY THE END OF THE NEXT CALENDAR QUARTER.
THIS CLASS B-1 CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAW. NO TRANSFER OF THIS
CLASS B-1 CERTIFICATE SHALL BE VALID OR EFFECTIVE UNLESS SUCH TRANSFER IS TO A
"QUALIFIED INSTITUTIONAL BUYER" PURSUANT TO RULE 144A UNDER THE ACT AND PRIOR TO
THE TRANSFER SUCH HOLDER(S) SHALL HAVE DELIVERED TO THE DEPOSITOR AND THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS RELATING TO THE
RESTRICTIONS ON TRANSFERS OF THIS CERTIFICATE (THE FORM OF WHICH LETTER MAY BE
OBTAINED FROM THE TRUSTEE).
Exhibit D-1
BY ACQUIRING OR ACCEPTING ANY INTEREST IN THIS CERTIFICATE, YOU ACKNOWLEDGE THAT
THIS CERTIFICATE IS SUBJECT TO A PURCHASE OPTION GRANTED TO CORPORATE ASSET
BACKED CORPORATION, A DELAWARE CORPORATION (THE "DEPOSITOR"), BY UBS SECURITIES
LLC UNDER THE CLASS B-1 CALL OPTION AGREEMENT, DATED AS OF MARCH 8, 2004 (THE
"CALL OPTION AGREEMENT"), AMONG THE DEPOSITOR, AS THE SOLE INITIAL OPTION
HOLDER, UBS SECURITIES LLC, AS THE INITIAL PURCHASER FROM THE DEPOSITOR, AND
SOLE HOLDER AT THE TIME OF SUCH GRANT, OF THE CLASS B-1 CERTIFICATES, AND U.S.
BANK TRUST NATIONAL ASSOCIATION, A NATIONAL BANKING ASSOCIATION, ACTING AS
OPTION AGENT FOR THE CLASS B-1 CERTIFICATEHOLDERS WITH RESPECT TO THE CLASS B-1
OPTIONS (THE "OPTION AGENT"), WHICH OBLIGATIONS HAVE BEEN ASSUMED BY EACH
SUBSEQUENT HOLDER OF SUCH CLASS B-1 CERTIFICATES; YOU AGREE TO ASSUME THE
OBLIGATION OF YOUR TRANSFEROR TO PERFORM SUCH CLASS B-1 OPTION; AND YOU
ACKNOWLEDGE THAT YOUR TRANSFEROR HAS BEEN RELEASED FROM ITS OBLIGATION TO
PERFORM SUCH CLASS B-1 OPTION. THE CALL OPTION AGREEMENT PERMITS THE HOLDER OF
THE RELATED CLASS B-1 OPTION TO PURCHASE THIS CERTIFICATE FROM YOU, WITHOUT YOUR
CONSENT, AT THE TIMES AND ON THE CONDITIONS SPECIFIED IN THE CALL OPTION
AGREEMENT AT THE CALL PRICE SPECIFIED IN THAT AGREEMENT. THE CLASS B-1 OPTION
MAY BE TRANSFERRED FROM TIME TO TIME. UPON THE EXERCISE OF THE RELATED CLASS B-1
OPTION IN THE MANNER SPECIFIED IN THE CALL OPTION AGREEMENT, THIS CLASS B-1
CERTIFICATE WILL BE TRANSFERRED TO, AND REGISTERED IN THE NAME OF, THE RELEVANT
CLASS B-1 OPTION HOLDER BY THE TRUSTEE, AND YOU WILL BE PAID THE CALL PRICE FOR
THIS CERTIFICATE IN ACCORDANCE WITH THE TERMS OF THE CALL OPTION AGREEMENT,
WITHOUT THE REQUIREMENT OF ANY FURTHER ACTION BY YOU.
This Certificate does not represent an interest in or obligation of the
Depositor, the Trustee or any of their Affiliates, except to the extent
described herein.
Exhibit D-2
CERTIFICATE NUMBER 1 $62,500,000
CUSIP No.: ▇▇▇▇▇▇▇▇▇ Initial Certificate Notional Amount
CABCO SERIES 2004-1 TRUST (▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL I)
CLASS B-1 CALLABLE CERTIFICATE
0.345% PASS-THROUGH RATE
evidencing a beneficial ownership interest in the Trust, as defined below, the
assets of which include $62,500,000 aggregate principal amount of the (▇▇▇▇▇▇▇
Sachs Capital I) 6.345% Capital Securities (the "Underlying Securities") and all
payments received thereon, exclusive of the Retained Interest.
THIS CERTIFIES THAT _____________________is the registered owner of a
nonassessable, fully-paid, beneficial ownership interest in CABCO Series 2004-1
Trust (▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital I) (the "Trust") formed by Corporate Asset Backed
Corporation, as depositor (the "Depositor").
The Trust was created pursuant to a Trust Agreement, dated as of March
8, 2004 (as amended and supplemented from time to time, the "Trust Agreement"),
between the Depositor and U.S. Bank Trust National Association, as trustee (the
"Trustee") and Option Agent. A summary of certain of the pertinent provisions of
the Trust Agreement is set forth below. To the extent not otherwise defined
herein, the capitalized terms used herein have the meanings assigned to them in
the Trust Agreement.
This Certificate is issued under and is subject to the terms,
provisions and conditions of the Trust Agreement, to which Trust Agreement the
Certificateholder by virtue of the acceptance hereof assents and by which such
Certificateholder is bound. The assets of the Trust include the Underlying
Securities and all proceeds of the Underlying Securities, but do not include the
Retained Interest. Capitalized terms used but not defined herein have the
meanings specified in the Trust Agreement.
Subject to the terms and conditions of the Trust Agreement (including
the availability of funds for distributions and any applicable grace period or
cure period), and all other obligations of the Trust (if any), there shall be
distributed on the dates specified in the Trust Agreement, to the Person in
whose name this Certificate is registered at the close of business on the Record
Date specified in the Trust Agreement, such Certificateholder's pro rata portion
of the distributions in respect of the Class B-1 Certificates to be distributed
to Certificateholders on each such date.
The distributions in respect of this Certificate are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts.
It is the intent of the Depositor and the Certificateholders that the
Trust will be classified as a grantor trust under subpart E, Part I of
subchapter J for purposes of the Internal Revenue Code of 1986. Except as
otherwise required by appropriate taxing authorities, the Depositor and the
Trustee, by executing the Trust Agreement, and each Certificateholder, by
acceptance of a
Exhibit D-3
Certificate, agrees to treat, and to take no action inconsistent with the
treatment of, the Certificate for such tax purposes as interests in a grantor
trust, and the provisions of the Trust Agreement shall be interpreted to further
this intention of the parties.
Distributions on this Certificate shall be made as provided in the
Trust Agreement by the Trustee by wire transfer 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 as
otherwise provided in the Trust Agreement and notwithstanding the above, the
final distribution on this Certificate shall 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 office maintained for such purpose by the
Trustee at its Corporate Trust Office.
This Certificate does not represent an obligation of, or an interest
in, the Depositor, the Trustee or any Affiliates of either of them and no
recourse may be had against such parties or their assets, except as may be
expressly set forth or contemplated herein or in the Trust Agreement. In
addition, this Certificate is not guaranteed by any governmental agency or
instrumentality and is limited in right of payment to certain collections with
respect to the Trust Assets, all as more specifically set forth herein and in
the Trust Agreement.
This Certificate does not purport to summarize the Trust Agreement and
reference is hereby made to the Trust Agreement for information with respect to
the rights, benefits, obligations and duties evidenced thereby. A copy of the
Trust Agreement may be examined by any Certificateholder upon request during
normal business hours at the Corporate Trust Office of the Trustee, located at
the office of U.S. Bank Trust National Association, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ and at such other places, if any, designated by the Trustee.
Reference is hereby made to the further terms of this Certificate set
forth on the reverse hereof, which further terms shall for all purposes have the
same effect as if set forth at this place.
This Certificate shall be construed in accordance with the laws of the
State of New York, without reference to any conflict of law provision, other
than Section 5-1401 of the General Obligations Law, and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
Unless the certificate of authentication hereon shall have been
executed by a Responsible Officer of the Trustee by manual signature, this
Certificate shall not entitle the Certificateholder hereof to any benefit under
the Trust Agreement or be valid for any purpose.
Exhibit D-4
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust, has caused
this Certificate to be duly executed by its manual signature as of the date set
forth below.
CABCO SERIES 2004-1 TRUST (▇▇▇▇▇▇▇ ▇▇▇▇▇
CAPITAL I)
By: U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Trustee
By:_________________________________________
Responsible Officer
Name:
Title:
Dated: March 8, 2004
This is one of the Certificates referred to in the within-mentioned
Trust Agreement.
By: U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Authenticating Agent
By:_________________________________________
Responsible Officer of Trustee
Name:
Title:
Dated: March 8, 2004
Exhibit D-5
[FORM OF REVERSE OF CLASS B-1 CALLABLE CERTIFICATE]
The Trust Agreement permits the amendment thereof, in certain
circumstances, without the consent of the Certificateholders.
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 at its Corporate Trust Office, accompanied by a written instrument
of transfer in form satisfactory to the Trustee and the Certificate Registrar
duly executed by the Certificateholder hereof or such Certificateholder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations of the same Class and a like aggregate Certificate
Principal Balance will be issued to the designated transferee. The initial
Certificate Registrar appointed under the Trust Agreement is the Trustee.
This Certificate is issuable only in registered form in the authorized
denominations specified in the Trust Agreement. As provided in the Trust
Agreement and subject to certain limitations therein set forth, at the option of
a Certificateholder, Certificates are exchangeable for new Certificates of
authorized denominations of the same Class and a like aggregate Certificate
Principal Balance as requested by the Certificateholder surrendering the same;
provided, however, that no Certificate may be subdivided such that the
denomination of any resulting Certificate is other than the authorized
denominations specified in the Trust Agreement.
No service charge shall be made for any registration of transfer or
exchange, but the Trustee or the Certificate Registrar may require payment of a
sum sufficient to cover any tax or governmental charge payable in connection
therewith.
The Depositor, Trustee, Certificate Registrar and any agent of the
Depositor, Trustee or the Certificate Registrar may treat the person in whose
name this Certificate is registered as the owner hereof for all purposes, and
none of the Depositor, Trustee, Certificate Registrar or any such agent shall be
affected by any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement
shall terminate and the Trust created thereby shall dissolve, wind-up and
terminate and be of no further force or effect 30 days after final distribution
by the Trustee of all moneys or other property or proceeds of the Trust Assets
in accordance with the terms of the Trust Agreement.
Neither the Depositor nor any Certificateholder shall be entitled to
revoke or terminate the Trust.
Exhibit D-6
Schedule 1
[Schedule 1, not repeated here, shall be identical to Exhibits A and B attached
to the Trust Agreement]
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 typewrite 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 Registrar,
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. Such signature must be
guaranteed by a member of the New York Stock Exchange or a commercial bank or
trust company.
Exhibit D-7
EXHIBIT E
[FORM OF INVESTMENT LETTER]
INVESTMENT LETTER
QUALIFIED INSTITUTIONAL BUYER
[Insert date]
U.S. Bank Trust National Association, as Trustee
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Corporate Asset Backed Corporation, as Depositor
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
In connection with its proposed purchase of Class B-1 Certificates (the
"Certificates") of the CABCO Series 2004-1 Trust (▇▇▇▇▇▇▇ Sachs Capital I) (the
"Issuer") 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 Certificates. The Purchaser represents that in making
its investment decision to acquire the Certificates, the Purchaser has
not relied on representations, warranties, opinions, projections,
financial or other information or analysis, if any, supplied to it by
any person, including you, Corporate Asset Backed Corporation, as
depositor (the "Depositor"), or U.S. Bank Trust National Association,
as trustee (the "Trustee"), or any of your or its affiliates. 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 Certificates, 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 Certificates.
2. The Purchaser (A) is a "Qualified Institutional Buyer" (as defined in
Rule 144A under the Securities Act of 1933, as amended (the "Securities
Act")) and (B) is acquiring the Certificates for its own account or for
the account of one or more investors of the type described in clause
(A) above as to each of which the Purchaser exercises sole investment
discretion. The Purchaser is purchasing the Certificates for investment
purposes and not with a view to or for the offer or sale in connection
with, a public distribution, or in any other manner that would violate
the Securities Act or the securities or blue sky laws of any state.
Exhibit E-1
3. The Purchaser understands that the Certificates have not been and will
not be registered under the Securities Act or under the securities or
blue sky laws of any state, and (i) that if it decides to resell,
pledge or otherwise transfer any Certificate, such Certificate may be
resold, pledged or transferred without registration only to an entity
that has delivered to the Depositor and the Trustee a certification
that it is a Qualified Institutional Buyer that is purchasing (1) for
its own account or (2) for the account of another Qualified
Institutional Buyer, that it or such other Qualified Institutional
Buyer is aware that the resale, pledge or transfer is being made in
reliance on said Rule 144A and (ii) that it and each subsequent holder
will be required to notify any purchaser of any Certificate from it of
the resale restrictions referred to in clause (i) above.
4. The Purchaser (A) is not a Benefit Plan Investor or is not acting on
behalf of a Benefit Plan Investor or (B) is a Benefit Plan Investor or
is acting on behalf of a Benefit Plan Investor but (i) is an insurance
company, (ii) does not have discretionary authority or control with
respect to the assets of the Issuer and does not provide investment
advice for a fee (direct or indirect) to or with respect to such
assets, nor is an affiliate of a person that has such discretionary
authority or control, (iii) the sole source of the funds being used to
purchase the Certificates is its general account, (iv) on the date
hereof, less than 25% of the assets of its general account (as
determined by such insurance company) constitute "plan assets", and (v)
the acquisition and holding of the Certificates will not constitute a
nonexempt prohibited transaction in violation of section 406 of ERISA
and section 4975 of the Internal Revenue Code.
5. The Purchaser understands that if it is an insurance company it will
have to dispose of any Certificates being held in its general account
promptly, and in any event by the end of the calendar quarter
immediately following the date on which (i) 25% or more of the assets
of its general account constitute plan assets or (ii) it has
discretionary authority or control with respect to the assets of the
Issuer or provides investment advice for a fee (direct or indirect) to
or with respect to such assets, or is an affiliate of a person that has
such discretionary authority or control.
6. The Purchaser understands that the Certificates will bear legends
substantially to the following effect, unless otherwise agreed by the
Depositor and the Trustee:
"THIS CLASS B-1 CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE
SECURITIES LAW. NO TRANSFER OF THIS CLASS B-1 CERTIFICATE
SHALL BE VALID OR EFFECTIVE UNLESS SUCH TRANSFER IS TO A
"QUALIFIED INSTITUTIONAL BUYER" PURSUANT TO RULE 144A UNDER
THE ACT AND PRIOR TO THE TRANSFER SUCH HOLDER(S) SHALL HAVE
DELIVERED TO THE DEPOSITOR AND THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS RELATING TO THE
RESTRICTIONS ON TRANSFERS OF THIS CERTIFICATE (THE FORM OF
Exhibit E-2
WHICH LETTER MAY BE OBTAINED FROM THE TRUSTEE)."
"NO EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF
ERISA) WHETHER OR NOT IT IS SUBJECT TO TITLE I OF ERISA, NO
PLAN (AS DESCRIBED IN SECTION 4975(e)(1) OF THE CODE) AND NO
ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON
OF ANY SUCH PLAN'S INVESTMENT IN THE ENTITY (EACH, A "PLAN"),
OR ANY PERSON ACTING ON BEHALF OF ANY PLAN, MAY PURCHASE OR
HOLD A CERTIFICATE OR ANY INTEREST THEREIN, UNLESS (I) THE
PURCHASER IS AN INSURANCE COMPANY, (II) IT IS NOT A PERSON WHO
HAS DISCRETIONARY AUTHORITY OR CONTROL WITH RESPECT TO THE
ASSETS OF THE TRUST OR A PERSON WHO PROVIDES INVESTMENT ADVICE
FOR A FEE (DIRECT OR INDIRECT) TO OR WITH RESPECT TO SUCH
ASSETS, OR AN AFFILIATE OF SUCH A PERSON, (III) THE SOLE
SOURCE OF THE FUNDS BEING USED TO EFFECT ITS PURCHASE OF SUCH
CERTIFICATES IS ITS GENERAL ACCOUNT, (IV) ON THE DATE IT
PURCHASES ANY SUCH CERTIFICATES, LESS THAN 25% OF THE ASSETS
OF ITS GENERAL ACCOUNT (AS DETERMINED BY SUCH INSURANCE
COMPANY) CONSTITUTE PLAN ASSETS, (V) THE ACQUISITION AND
HOLDING OF SUCH CERTIFICATES WILL NOT CONSTITUTE A NONEXEMPT
PROHIBITED TRANSACTION IN VIOLATION OF SECTION 406 OF ERISA
AND SECTION 4975 OF THE INTERNAL REVENUE CODE, AND (VI) IF, AS
OF ANY LATER DATE ON WHICH ANY PERSON PURCHASES ANY OF SUCH
CERTIFICATES, 25% OR MORE OF THE ASSETS OF SUCH GENERAL
ACCOUNT CONSTITUTE PLAN ASSETS OR IF SUCH COMPANY BECOMES A
PERSON WHO HAS DISCRETIONARY AUTHORITY OR CONTROL WITH RESPECT
TO THE ASSETS OF THE TRUST OR A PERSON WHO PROVIDES INVESTMENT
ADVICE FOR A FEE (DIRECT OR INDIRECT) TO OR WITH RESPECT TO
SUCH ASSETS, OR AN AFFILIATE OF SUCH A PERSON, THEN SUCH
INSURANCE COMPANY WILL DISPOSE OF SUCH CERTIFICATES THEN HELD
IN ITS GENERAL ACCOUNT PROMPTLY, AND IN ANY EVENT BY THE END
OF THE NEXT CALENDAR QUARTER."
"BY ACQUIRING OR ACCEPTING ANY INTEREST IN A CLASS B-1
CERTIFICATE, YOU ACKNOWLEDGE THAT THE CLASS B-1 CERTIFICATE IS
SUBJECT TO A PURCHASE
Exhibit E-3
OPTION GRANTED TO CORPORATE ASSET BACKED CORPORATION, A
DELAWARE CORPORATION (THE "DEPOSITOR"), BY UBS SECURITIES LLC
UNDER THE CLASS B-1 CALL OPTION AGREEMENT, DATED AS OF March
8, 2004 (THE "CALL OPTION AGREEMENT"), AMONG THE DEPOSITOR, AS
THE SOLE INITIAL OPTION HOLDER, UBS SECURITIES LLC, AS THE
INITIAL PURCHASER FROM THE DEPOSITOR, AND SOLE HOLDER AT THE
TIME OF SUCH GRANT, OF THE CLASS B-1 CERTIFICATES, AND U.S.
BANK TRUST NATIONAL ASSOCIATION, A NATIONAL BANKING
ASSOCIATION, ACTING AS OPTION AGENT FOR THE CLASS B-1
CERTIFICATEHOLDERS WITH RESPECT TO THE CLASS B-1 OPTIONS (THE
"OPTION AGENT"), WHICH OBLIGATIONS HAVE BEEN ASSUMED BY EACH
SUBSEQUENT HOLDER OF SUCH CLASS B-1 CERTIFICATES; YOU AGREE TO
ASSUME THE OBLIGATION OF YOUR TRANSFEROR TO PERFORM SUCH CLASS
B-1 OPTION; AND YOU ACKNOWLEDGE THAT YOUR TRANSFEROR HAS BEEN
RELEASED FROM ITS OBLIGATION TO PERFORM SUCH CLASS B-1 OPTION.
THE CALL OPTION AGREEMENT PERMITS THE HOLDER OF THE RELATED
CLASS B-1 OPTION TO PURCHASE THIS CERTIFICATE FROM YOU,
WITHOUT YOUR CONSENT, AT THE TIMES AND ON THE CONDITIONS
SPECIFIED IN THE CALL OPTION AGREEMENT AT THE CALL PRICE
SPECIFIED IN THAT AGREEMENT. THE CLASS B-1 OPTION MAY BE
TRANSFERRED FROM TIME TO TIME. UPON THE EXERCISE OF THE
RELATED CLASS B-1 OPTION IN THE MANNER SPECIFIED IN THE CALL
OPTION AGREEMENT, THE CLASS B-1 CERTIFICATE WILL BE
TRANSFERRED TO, AND REGISTERED IN THE NAME OF, THE RELEVANT
CLASS B-1 OPTION HOLDER BY THE TRUSTEE, AND YOU WILL BE PAID
THE CALL PRICE FOR THE CERTIFICATE IN ACCORDANCE WITH THE
TERMS OF THE CALL OPTION AGREEMENT, WITHOUT THE REQUIREMENT OF
ANY FURTHER ACTION BY YOU, EXCEPT THAT IF THE CLASS B-1
CERTIFICATES ARE HELD IN DEFINITIVE FORM AT SUCH TIME YOU WILL
NOT RECEIVE SUCH CALL PRICE UNLESS AND UNTIL YOU SURRENDER
THIS CERTIFICATE."
7. The Purchaser understands that no subsequent transfer of the
Certificates is permitted unless (A) such transfer is of a Certificate
with the applicable minimum denomination and (B) the Purchaser causes
the proposed transferee to provide to the Depositor and the Trustee, a
letter substantially in the form of this letter, or such other written
statement as the Trustee shall prescribe.
Exhibit E-4
8. The Purchaser is a person or entity (a "Person") who is one of the
following
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
Certificate 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
Certificate will not result in any withholding obligation with
respect to any payments with respect to the Certificates 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
▇▇▇▇▇▇▇ ▇▇▇▇▇ Group, Inc. entitled to vote, (2) that is a
controlled foreign corporation related to ▇▇▇▇▇▇▇ Sachs
Capital I within the meaning of Section 864(d)(4) of the Code,
or (3) that is a bank extending credit pursuant to a loan
agreement entered into in the ordinary course of its trade or
business, or
D. a Person not described in (A), (B) or (C) above, who is fully
eligible for the benefits of the "Interest" provision of the
income tax treaty between such Person's jurisdiction and the
United States and under the "Interest" provision of such
income tax treaty, any interest income received by such Person
from sources within the United States is wholly exempt from
tax by the United States.
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, (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 all required supporting documentation including (but
not limited to) appropriate certification for all partners or members
attached) and (IV) if it is a Person described in clause (D) above, it
will furnish to the Depositor and the Trustee a properly executed IRS
Form W-8BEN, with Part II completed. 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.
9. The Purchaser agrees that if at some time in the future it wishes to
transfer or exchange any of the Certificates, it will not transfer or
exchange any of the Certificates unless such transfer or exchange is in
accordance with the terms of the Trust Agreement pursuant to
Exhibit E-5
which the Certificate was issued. The Purchaser understands that any
purported transfer of the Certificates (or any interest therein) in
contravention of any of the restrictions and conditions in the Trust
Agreement shall be void, and the purported transferee in such transfer
shall not be recognized by any Person as a holder of such Certificates,
for any purpose.
Capitalized terms used but not defined in this letter are used with the
respective meanings specified in the Trust Agreement dated as of March
8, 2004, between Corporate Asset Backed Corporation, as Depositor and
U.S. Bank Trust National Association, as Trustee and Option Agent.
[SIGNATURE PAGE FOLLOWS]
Exhibit E-6
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,
[INSERT NAME OF PURCHASER].
By:______________________________________
Name:____________________________________
Title:___________________________________
Exhibit E-7
Schedule A
CLASS B-1 CERTIFICATES
TOTAL
CERTIFICATE
TRUST NAME OF NOTIONAL CERTIFICATE NOTIONAL
SECURITIES UNDERLYING PASS-THROUGH AMOUNT OF AMOUNT OF CLASS B-1
SERIES SECURITIES RATE ON CLASS CLASS B-1 DATE OF TRUST CERTIFICATES
NUMBER ISSUER B-1 CERTIFICATES CERTIFICATES AGREEMENT* PURCHASED
--------- ---------- ---------------- ------------ -------------- ------------------
2004-1 Goldman 0.345% $62,500,000 March 8, 2004 [insert applicable
Sachs notional amount
Capital I purchased]
* Initial Closing Date
Exhibit E-8