Exhibit 99.6
CorTS(R) SUPPLEMENT 2006-1
between
STRUCTURED PRODUCTS CORP.,
as Trustor
and
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee and Securities Intermediary
CorTS(R) Trust V For IBM Debentures
TABLE OF CONTENTS
Page
Section 1. Certain Defined Terms......................................................................1
Section 2. Creation and Declaration of Trust; Sale of Underlying Securities; Acceptance by
Trustee....................................................................................6
Section 3. Designation................................................................................6
Section 4. Date of the Certificates...................................................................7
Section 5. CorTS Principal Balance and Denominations; I/O Certificates; Additional Underlying
Securities.................................................................................7
Section 6. Currency of the Certificates...............................................................8
Section 7. Form of Securities.........................................................................8
Section 8. Call Warrants.............................................................................10
Section 9. Certain Provisions of Base Trust Agreement Not Applicable.................................11
Section 10. Distributions.............................................................................11
Section 11. Termination of Trust......................................................................15
Section 12. Limitation of Powers and Duties...........................................................16
Section 13. Compensation of Trustee...................................................................17
Section 14. Modification or Amendment.................................................................17
Section 15. Accounting................................................................................18
Section 16. No Investment of Amounts Received on Underlying Securities................................18
Section 17. No Event of Default.......................................................................18
Section 18. Notices...................................................................................18
Section 19. Access to Certain Documentation...........................................................19
Section 20. Advances..................................................................................19
Section 21. Withholding Taxes.........................................................................19
Section 22. Ratification of Agreement.................................................................19
Section 23. Counterparts..............................................................................19
Section 24. Governing Law.............................................................................19
Section 25. Establishment of Certificate Account......................................................20
Section 26. Certificates of Compliance................................................................20
Section 27. Appointment of Co-Trustee.................................................................20
Section 28. Securities Provisions for I/O Certificates................................................20
Section 29. Reporting Obligations.....................................................................21
Section 30. Statement of Intent.......................................................................21
Section 31. Filing of Partnership Returns.............................................................21
Section 32. "Financial Assets" Election...............................................................22
Section 33. Trustee's Entitlement Orders..............................................................22
Section 34. Conflict with Other Agreements............................................................22
Section 35. Additional Trustee and Securities Intermediary Representations............................22
Section 36. [Reserved]................................................................................23
Section 37. Report to Certificateholders..............................................................23
Exhibit A -- Identification of the Underlying Securities as of Closing Date
Exhibit B -- Terms of the CorTS as of Closing Date
Exhibit C -- Form of CorTS
Exhibit D -- Form of Call Warrant
Exhibit E -- Terms of the I/O Certificates
Exhibit F -- Form of the I/O Certificates
Exhibit G -- Allocation Percentages
CorTS(R) SUPPLEMENT 2006-1, dated as of September 29, 2006, 2006
(this "Series Supplement"), between STRUCTURED PRODUCTS CORP., a
Delaware corporation, as trustor (the "Trustor"), and U.S. BANK
TRUST NATIONAL ASSOCIATION, a national banking association, as
trustee (the "Trustee") and as securities intermediary (the
"Securities Intermediary").
PRELIMINARY STATEMENT
Pursuant to the Base Trust Agreement, dated as of September 19, 2006 (the
"Base Trust Agreement" and, as supplemented pursuant to this Series Supplement,
the "Agreement"), between the Trustor and the Trustee, such parties may at any
time and from time to time enter into a series supplement supplemental to the
Base Trust Agreement for the purpose of creating a trust. Section 5.13 of the
Base Trust Agreement provides that the Trustor may at any time and from time to
time direct the Trustee to authenticate and deliver, on behalf of any such
trust, a new Series of trust certificates. Each trust certificate of such new
Series of trust certificates will represent a fractional undivided beneficial
interest in such trust subject to the terms hereof. Certain terms and conditions
applicable to each such Series are to be set forth in the related series
supplement to the Base Trust Agreement.
Pursuant to this Series Supplement, the Trustor and the Trustee shall
create and establish a new trust to be known as CorTS(R) Trust V For IBM
Debentures, and a new Series of trust certificates to be issued thereby, which
certificates shall be known as the CorTS(R) Callable Trust Certificates, and the
Trustor and the Trustee shall herein specify certain terms and conditions in
respect thereof.
The CorTS - Callable Trust Certificates shall be Fixed Rate Certificates
issued in two Classes, the CorTS Certificates (the "CorTS") and the I/O
Certificates (the "I/O Certificates" and, together with the CorTS, the
"Certificates") The Trust also is issuing call options with respect to
$41,200,000 principal amount of Underlying Securities (the "Call Warrants").
On behalf of and pursuant to the authorizing resolutions of the Board of
Directors of the Trustor, an authorized officer of the Trustor has authorized
the execution, authentication and delivery of the Certificates, and has
authorized the Base Trust Agreement and this Series Supplement in accordance
with the terms of Section 5.13 of the Base Trust Agreement.
Section 1. Certain Defined Terms. a) All terms used in this Series
Supplement that are defined in the Base Trust Agreement, either directly or by
reference therein, have the meanings assigned to such terms therein, except to
the extent such terms are defined or modified in this Series Supplement or the
context requires otherwise. The Base Trust Agreement also contains rules as to
usage which shall be applicable hereto. The Trustor shall constitute the
Depositor for purposes of the Base Trust Agreement. Any reference herein to a
"beneficial interest" in a security also shall mean a security entitlement with
respect to such security, and any reference herein to a "beneficial owner" or
"beneficial holder" of a security also shall mean the holder of a security
entitlement with respect to such security.
(b) Pursuant to Article I of the Base Trust Agreement, the meaning of
certain defined terms used in the Base Trust Agreement shall, when applied to
the trust certificates of a particular Series, be as defined in Article I but
with such additional provisions and modifications as are specified in the
related series supplement. With respect to the Certificates, the following
definitions shall apply:
"761 Election": Shall have the meaning set forth in Section 30 of this
Series Supplement.
"Acceleration": Means the acceleration of the maturity of the Underlying
Securities after the occurrence of any default on the Underlying Securities
other than a Payment Default.
"Agreement": Shall have the meaning specified in the Preliminary Statement
to this Series Supplement.
"At-the-Money": Shall have the meaning set forth in Section 10(j)(C) of
this Series Supplement.
"Bankruptcy Event": Shall have the meaning given to such term in the Call
Warrant.
"Base Trust Agreement": Shall have the meaning specified in the
Preliminary Statement to this Series Supplement.
"Business Day": Means any day other than a Saturday, Sunday or a day on
which banking institutions in New York, New York are authorized or obligated by
law, executive order or governmental decree to be closed.
"Call Warrant": Shall have the meaning specified in the Preliminary
Statement to this Series Supplement.
"Certificate Account": Means, with respect to this Series, the Eligible
Account, which shall be a securities account established and maintained by the
Securities Intermediary in the Trustee's name, to which the Underlying
Securities and all payments made on or with respect to the related Underlying
Securities shall be credited.
"Certificateholder" or "Holder": Means, with respect to any Certificate,
the holder thereof.
"Closing Date": Means September 29, 2006.
"CorTS Allocation Percentage": Means, as of any date, the percentage under
the column "CorTS Allocation Percentage" on Exhibit G hereto opposite the
Scheduled Allocation Date which immediately precedes or coincides with such
date.
"CorTS Certificateholders": Means the Holders of the CorTS.
"CorTS Fixed Payment": Means a portion of each equal semiannual
installment of interest payable on the Underlying Securities on each June 1 and
December 1 or, if any such day is not a Business Day, then the immediately
following Business Day, except that the final installment of interest will be
payable on December 1, 2096, commencing on December 1, 2006 through and
including December 1, 2096, such that the CorTS receive interest distributions
at a rate per annum equal to 6.40% on their Certificate Principal Balance.
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"CorTS Maturity Date": Means December 1, 2096, subject to adjustment as
provided in Section 10(g) of this Series Supplement.
"Collection Period": Means the period from (but excluding) the preceding
Distribution Date (or, in the case of the first Distribution Date, from and
including the Closing Date), through and including the current Distribution
Date.
"Commission": Means the Securities and Exchange Commission.
"Corporate Trust Office": Means U.S. Bank Trust National Association, ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust or
such other corporate trust office as the Trustee shall designate in writing to
the Trustor and the Certificateholders.
"Depositary": Means DTC.
"Distribution Date": Means any Scheduled Distribution Date, the CorTS
Maturity Date or any Special Distribution Date.
"DTC": Means The Depository Trust Company.
"Euroclear": Means Euroclear Bank S.A./N.V., as operator of Euroclear (or
any successor thereto).
"Exchange Act" Means the Securities Exchange Act of 1934, as amended.
"I/O Allocation Percentage": Means, as of any date, the percentage under
the column "I/O Allocation Percentage" on Exhibit G hereto opposite the
Scheduled Allocation Date which immediately precedes or coincides with such
date.
"I/O Certificateholders": Means the Holders of the I/O Certificates.
"I/O Fixed Payment": Means, for each of a portion of each equal semiannual
installment of interest payable on the Underlying Securities on each June 1 and
December 1 or, if any such day is not a Business Day, then the immediately
following Business Day, except that the final installment of interest will be
payable on December 1, 2096, commencing on December 1, 2006 through and
including December 1, 2096, such that the I/O Certificates receive interest
distributions at a rate per annum equal to 0.725% on their Notional Amount.
"I/O Maturity Date": Means December 1, 2096, subject to adjustment as
provided in Section 10(g) of this Series Supplement.
"I/O Payment Amount": Means the present value of any scheduled interest
distributions due from the Warrant Exercise Date (assuming that the I/O
Certificates are paid when due and are not redeemed prior to the I/O Maturity
Date and excluding accrued and unpaid interest thereon to the Warrant Exercise
Date) on the I/O Certificates with a Notional Amount equal to the principal
amount of the Underlying Securities to be purchased by the Warrantholders
following an exercise of the Call Warrants or to be liquidated following an SEC
Reporting Failure, discounted to the Warrant Exercise Date on a semiannual basis
at a rate of 6.40% per annum.
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"Interest Collections": Means, with respect to any Distribution Date, all
payments received by the Trustee, during the Collection Period ending on such
Distribution Date, in respect of (i) interest on the Underlying Securities and
(ii) penalties or other amounts required to be paid because of late payments on
the Underlying Securities.
"In-the-Money": Shall have the meaning set forth in Section 10(j)(C) of
this Series Supplement.
"Notional Amount": Means the notional amount set forth on an I/O
Certificate, as such amount may be reduced pursuant to Section 8(b) and (d) and
Section 10(g); provided that the aggregate notional amount of all I/O
Certificates issued on the Closing Date shall equal the principal amount of the
Underlying Securities owned by the Trustee on behalf of the Trust on the Closing
Date.
"Payment Default": Means a default by the Underlying Issuer in the payment
of any amount due on the Underlying Securities after the same becomes due and
payable (and the expiration of any applicable grace period on the Underlying
Securities).
"Place of Distribution": Means New York, New York.
"Rating Agency": Means each of ▇▇▇▇▇'▇ Investors Service, Inc.
("Moody's"), and Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. ("S&P"), and any successor to either of the
foregoing. References to "the Rating Agency" in the Agreement shall be deemed to
be each such credit rating agency.
"Record Date": Means, with respect to any Distribution Date, the day
immediately preceding such Distribution Date.
"Regulation AB" Means Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from
time to time, and subject to such clarification and interpretation as have been
provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or
by the staff of the Commission, or as may be provided by the Commission or its
staff from time to time.
"Sale Agreement": Means the Sale Agreement, dated as of the Closing Date,
between the Seller and the Trustee.
"Scheduled Distribution Date": Means the 1st day of each June and December
or, if any such day is not a Business Day, then the immediately following
Business Day, except that the final Scheduled Distribution Date shall be
December 1, 2096, commencing December 1, 2006 through and including December 1,
2096; provided, however, in each case, that payment on each Scheduled
Distribution Date shall be subject to prior payment of interest or principal, as
applicable, on the Underlying Securities.
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"SEC Reporting Failure": Shall have the meaning given to such term in
Section 10(j)(A) of this Series Supplement.
"Securities Act": Means the Securities Act of 1933, or any similar federal
statute, and the rules and regulations of the Commission thereunder, all as the
same shall be in effect at the time.
"Seller": Means Citigroup Global Markets Inc., together with its
successors and permitted assigns.
"Special Distribution Date": Means the date on which the Trustee makes a
distribution of the proceeds received in connection with a recovery on, or a
liquidation of, the Underlying Securities, following a Underlying Securities
Default or an SEC Reporting Failure, as applicable.
"Specified Currency": Means United States Dollars.
"Trust": Means CorTS(R) Trust V For IBM Debentures.
"Trust Assets": Means (i) the Underlying Securities, (ii) all payments on
or collections in respect of the Underlying Securities accrued on or after the
Closing Date and (iii) all proceeds of the foregoing.
"Trust Termination Event": Means the earlier of (a) the payment in full at
maturity or upon early redemption of all of the Certificates, (b) the
distribution of the proceeds received upon a recovery on the Underlying
Securities (after deducting the costs incurred in connection therewith) after a
Payment Default or an Acceleration thereof (or other default with respect to the
Underlying Securities), (c) the sale by the Trustee in accordance with the Call
Warrants of all the Underlying Securities and the distribution in full of all
amounts due to Certificateholders, or (d) the liquidation of the Underlying
Securities in accordance with Section 10(j) of this Series Supplement in the
event of an SEC Reporting Failure.
"Underlying Issuer": Means International Business Machines Corporation.
"Underlying Securities": Means, as of the Closing Date, $41,200,000
aggregate principal amount of 7.125% Debentures, issued by the Underlying
Issuer, sold to the Trustee on behalf of the Trust by the Seller and identified
on Exhibit A hereto. Additional Underlying Securities may also be sold to the
Trustee on behalf of the Trust from time to time pursuant to Section 5 of this
Series Supplement. The Underlying Securities will constitute Term Assets for
purposes of the Base Trust Agreement.
"Underlying Securities Default": Means a Payment Default or an
Acceleration with respect to the Underlying Securities.
"Underlying Securities Payment Date": The first day of each June and
December, commencing on December 1, 2006 and ending on December 1, 2096;
provided, however, that if any Underlying Securities Payment Date would
otherwise fall on a day that is not a Business Day, such Underlying Securities
Payment Date will be the following Business Day.
5
"Underlying Securities Trustee": Means the trustee for the Underlying
Securities.
"Voting Rights": Shall have the meaning given to such term in the Base
Trust Agreement. The CorTS Certificateholders shall have 100% of the total
Voting Rights with respect to the Certificates, which Voting Rights shall be
allocated among all Holders of CorTS in proportion to the principal balances
held by such Holders on any date of determination.
"Warrant Agent Agreement": Means the Warrant Agent Agreement, dated as of
the date hereof, between the Trustor and U.S. Bank Trust National Association,
as Warrant Agent and as Trustee, as the same may be amended or modified from
time to time.
"Warrant Exercise Date": Shall have the meaning given to such term in the
Call Warrant.
"Warrant Exercise Notice Date": Shall have the meaning given to such term
in the Call Warrant.
"Warrant Exercise Purchase Price": Shall have the meaning given to such
term in the Call Warrant.
"Warrantholder": Shall have the meaning given to such term in the Call
Warrant.
Section 2. Creation and Declaration of Trust; Sale of Underlying
Securities; Acceptance by Trustee.
a) The Trust, of which the Trustee is the trustee, is hereby created under
the laws of the State of New York for the benefit of the holders of the
Certificates. The Trust shall be irrevocable.
(b) The Trustor, concurrently with the execution and delivery hereof and
pursuant to Section 2.1 of the Base Trust Agreement, has caused the Seller to
sell to the Trustee the Underlying Securities.
(c) The Trustor hereby directs the Trustee to purchase the Underlying
Securities from the Seller pursuant to the Sale Agreement. The Trustee shall pay
the purchase price for the Underlying Securities by delivering to, or at the
direction of, the Seller all of the Certificates and the Call Warrants on the
Closing Date and making the payments specified in Section 10(1) of this Series
Supplement. The Seller will sell, transfer, assign, set over and otherwise
convey to the Trustee on behalf and for the benefit of the holders of the
Certificates and the Trust, without recourse, the Underlying Securities.
(d) The Trustee hereby (i) acknowledges the sale to it of the Underlying
Securities pursuant to the Sale Agreement and receipt by it of the Underlying
Securities, (ii) accepts the trust created hereunder in accordance with the
provisions hereof and of the Base Trust Agreement but subject to the Trustee's
obligation, as and when the same may arise, to make any payment or other
distribution of the assets of the Trust as may be required pursuant to this
Series Supplement, the Call Warrants, the Base Trust Agreement and the
Certificates, and (iii) agrees to perform the duties herein or therein required
and any failure to receive reimbursement of expenses and disbursements under
Section 13 hereof shall not release the Trustee from its duties herein or
therein. The Trustee shall credit such Underlying Securities to the Certificate
Account.
6
Section 3. Designation. There is hereby created a Series of trust
certificates to be issued pursuant to the Base Trust Agreement and this Series
Supplement to be known as the "CorTS(R) Callable Trust Certificates." The
Certificates shall be issued in two classes, in the amount set forth in Section
5 and with the additional terms set forth in Exhibit B and E to this Series
Supplement. The CorTS and the I/O Certificates shall be issued in substantially
the forms set forth in Exhibit C and F to this Series Supplement with such
necessary or appropriate changes as shall be approved by the Trustor and the
Trustee, such approval to be manifested by the execution and authentication
thereof by the Trustee. The Certificates shall evidence undivided beneficial
ownership interests in the assets of the Trust, subject to the liabilities of
the Trust and shall be payable solely from payments or property received by the
Trustee on or in respect of the Trust Assets. The CorTS, except as set forth in
Section 10, will represent the entire beneficial ownership interest in the
principal and redemption premium, if any, of the Underlying Securities, and will
represent a beneficial ownership interest in the interest received on the
Underlying Securities equal to the CorTS Fixed Payments. The I/O Certificates
will represent a beneficial ownership interest in the interest received on the
Underlying Securities equal to the I/O Fixed Payments and, to the extent set
forth in Section 10, will represent a beneficial ownership interest in the
principal and redemption premium, if any, of the Underlying Securities. The
CorTS and the I/O Certificates will rank pari passu with respect to their
respective beneficial ownership interest in the interest payments on the
Underlying Securities and will share proportionately in such interest based upon
the accrued and unpaid CorTS Fixed Payments, and the accrued and unpaid I/O
Fixed Payments.
Section 4. Date of the Certificates. The Certificates that are
authenticated and delivered by the Trustee to the Seller upon Trustor Order on
the Closing Date shall be dated the Closing Date. All other Certificates that
are authenticated after the Closing Date for any other purpose under the
Agreement shall be dated the date of their authentication.
Section 5. CorTS Principal Balance and Denominations; I/O Certificates;
Additional Underlying Securities. On the Closing Date, 1,648,000 CorTS with a
Certificate Principal Balance of $41,200,000 shall be authenticated and
delivered under the Base Trust Agreement and this Series Supplement. In
addition, on the Closing Date, I/O Certificates with a Notional Amount of
$41,200,000 shall be authenticated and delivered under the Base Trust Agreement
and this Series Supplement. The Certificate Principal Balance of the CorTS and
the Notional Amount of the I/O Certificates shall each initially equal the
initial principal amount of Underlying Securities sold to the Trustee and
deposited in the Trust. Such Certificate Principal Balance and Notional Amounts
shall be calculated without regard to CorTS and I/O Certificates, respectively,
authenticated and delivered upon registration of, transfer of, or in exchange
for, or in lieu of, other CorTS or I/O Certificates pursuant to Sections 5.3,
5.4 or 5.5 of the Base Trust Agreement. There may be sold to the Trustee on
behalf of the Trust additional Underlying Securities on any date hereafter upon
at least five (5) Business Days notice to the Trustee and upon (i) satisfaction
of the Rating Agency Condition and (ii) delivery of an Opinion of Counsel to the
effect that the sale of such additional Underlying Securities will not
materially increase the likelihood that the Trust would fail to qualify as a
grantor trust under the Code and, in any event, that the Trust will not fail to
qualify as either a grantor trust or partnership (other than a publicly traded
partnership treated as a corporation) under the Code. Each condition to be
satisfied with respect to a sale of Underlying Securities on or prior to the
Closing Date shall be satisfied with respect to a sale of additional Underlying
Securities no later than the date of sale thereof, each representation and
warranty set forth in the Agreement to be made on the Closing Date shall be made
on such date of sale with respect to the additional Underlying Securities, and
from and after such date of sale, all Underlying Securities held by the Trustee
on behalf of the Trust shall be held on the same terms and conditions. Upon such
sale to the Trustee, the Trustee shall credit such additional Underlying
Securities to the Certificate Account, and shall authenticate and deliver as
instructed by the Trustor, CorTS in a Certificate Principal Balance and I/O
Certificates in a Notional Amount equal to the principal amount of such
additional Underlying Securities. Any such additional CorTS and I/O Certificates
authenticated and delivered shall rank pari passu with any CorTS or I/O
Certificates, respectively, previously issued in accordance with this Series
Supplement, and any such Underlying Securities will be subject to Call Warrants
as set forth in Section 8 hereof. The Trustee shall notify existing
Certificateholders of the sale of any such additional Underlying Securities to
the Trust and the issuance of any such additional CorTS and I/O Certificates not
more than 10 days after such sale.
7
Section 6. Currency of the Certificates. All distributions on the
Certificates will be made in the Specified Currency.
Section 7. Form of Securities. c) The Trustee shall execute and deliver
the Certificates in the form of one or more global certificates registered in
the name of DTC or its nominee.
(b) I/O Certificates that are Rule 144A Certificates initially shall be
represented by one or more certificates in registered, global form without
interest coupons (collectively, the "Restricted Global Certificate"). The
Restricted Global Certificate shall be deposited with, or on behalf of, DTC, and
initially registered in the name of Cede & Co., as nominee for DTC. I/O
Certificates that are Regulation S Certificates initially shall be represented
by one or more temporary global certificates in registered, global form without
interest coupons (collectively, the "Regulation S Temporary Global
Certificate"). The Regulation S Temporary Global Certificate shall be deposited
on behalf of the subscribers thereof with a custodian for DTC. The Regulation S
Temporary Global Certificate shall be registered in the name of a nominee of DTC
for credit to the subscribers' respective accounts at Euroclear or Clearstream
Banking.
Within a reasonable period of time after the expiration of the period of
40 days commencing on the day after the later of (i) the commencement of the
offering made hereby and (ii) the Closing Date (such period through and
including such 40th day, the "Restricted Period"), the Regulation S Temporary
Global Certificates shall be exchanged for one or more permanent global
certificates (collectively, the "Permanent Regulation S Global Certificate" and,
together with the Regulation S Temporary Global Certificate, the "Regulation S
Global Certificate" (the Regulation S Global Certificate and the Restricted
Global Certificate, collectively, being the "Global Certificates")), upon
delivery to DTC of certification of compliance with the transfer restrictions
applicable to the I/O Certificates and pursuant to Regulation S. During the
Restricted Period, beneficial interests in the Regulation S Temporary Global
Certificate may be held only through Euroclear or Clearstream Banking (as
indirect participants in DTC), unless transferred to a person that takes
delivery through the Restricted Global Certificate in accordance with the
certification requirements described below. Beneficial interests in the
Restricted Global Certificate may not be exchanged for beneficial interests in
the Regulation S Global Certificate at any time except in the limited
circumstances described below.
8
Except as set forth below, the Global Certificates may be transferred, in
whole and not in part, only to another nominee of DTC or to a successor of DTC
or its nominee. Beneficial interests in the Global Certificates may not be
exchanged for Certificates in certificated form except in the limited
circumstances described below.
Rule 144A Certificates (including beneficial interests in the Restricted
Global Certificate) shall be subject to certain restrictions on transfer and
shall bear a restrictive legend as set forth on Exhibit F hereto. In addition,
transfer of beneficial interests in the Global Certificates shall be subject to
the applicable rules and procedures of DTC and its direct or indirect
participants (including, if applicable, those of Euroclear and Clearstream
Banking), which may change from time to time.
No Certificateholder shall be entitled to receive a certificate
representing such Certificateholder's interest, except as set forth herein.
Unless and until definitive Certificates are issued under the limited
circumstances described herein, all references to actions by Certificateholders
with respect to any such Certificates shall refer to action to be taken by DTC
upon instructions from its Participants.
Under the rules, regulations and procedures creating and effecting DTC and
its operations, DTC shall take action permitted to be taken by a
Certificateholder under the Agreement only at the direction of one or more
Participants to whose DTC account such Certificates are credited.
(c) Prior to the expiration of the Restricted Period, a beneficial
interest in a Regulation S Temporary Global Certificate may be transferred to a
person who takes delivery in the form of an interest in the corresponding
Restricted Global Certificate only upon receipt by the Trustee of a written
certification from the transferor in the form required by the Trustee to the
effect that such transfer is being made (i) (a) to a person whom the transferor
reasonably believes is a QIB in a transaction meeting the requirements of Rule
144A or (b) pursuant to another exemption from the registration requirements
under the Securities Act (such certification being accompanied by an opinion of
counsel regarding the availability of such exemption) and (ii) in accordance
with all applicable securities laws of any state of the United States or any
other jurisdiction.
Beneficial interests in the Restricted Global Certificate may be
transferred to a person who takes delivery in the form of an interest in the
Regulation S Global Certificate, whether before or after the expiration of the
Restricted Period, only if the transferor first delivers to the Trustee a
written certificate to the effect that such transfer is being made in accordance
with Rule 903 or 904 of Regulation S or Rule 144A (if available) and that, if
such transfer occurs prior to the expiration of the Restricted Period, the
interest transferred shall be held immediately thereafter through Euroclear or
Clearstream Banking.
9
Any beneficial interest in one of the Global Certificates that is
transferred to a person who takes delivery in the form of an interest in another
Global Certificate shall, upon transfer, cease to be an interest in such Global
Certificate and become an interest in such other Global Certificate and,
accordingly, shall thereafter be subject to all transfer restrictions and other
procedures applicable to beneficial interests in such other Global Certificate
for as long as it remains such an interest.
Transfers involving an exchange of a beneficial interest in the Regulation
S Global Certificate for a beneficial interest in the Restricted Global
Certificate or vice versa shall be effected in DTC by means of an instruction
originated by the Trustee through the DTC/Deposit Withdrawal at Custodian
("DWAC") system. Accordingly, in connection with such transfer, appropriate
adjustments shall be made to reflect a decrease in the principal amount of the
Regulation S Global Certificate and a corresponding increase in the principal
amount of the Restricted Global Certificate or vice versa, as applicable.
(d) Definitive certificates shall be issued to owners of Certificates or
their nominees, respectively, rather than to DTC or its nominee, only if (i) the
Trustor advises the Trustee in writing that DTC is no longer willing or able to
discharge properly its responsibilities as Clearing Agency with respect to the
Certificates and the Trustor is unable to locate a qualified successor or (ii)
to the extent permitted by law, the Trustor, at its option, elects to terminate
the book-entry system with respect to the Certificates through DTC.
Upon the occurrence of any event described in the immediately preceding
paragraph, the Trustee is required to notify all Participants of the
availability through DTC of definitive certificates. Upon surrender by DTC of
the definitive certificates representing the Certificates and receipt of
instructions for re-registration, the Trustee shall reissue such Certificates as
definitive certificates issued in the respective principal amounts owned by the
individual owners of such Certificates, and thereafter the Trustee will
recognize the holders of such definitive certificates as Certificateholders
under the Trust Agreement.
Section 8. Call Warrants. d) Concurrently with the execution of this
Series Supplement, the Trustee, on behalf of the Trust, shall execute the
Warrant Agent Agreement and one or more Call Warrants, dated as of the date
hereof and substantially in the form of Exhibit D hereto, initially evidencing
all of the Call Warrants. The Trustee shall perform the Trust's obligations
under the Warrant Agent Agreement and the Call Warrants in accordance with their
respective terms. In addition, the Trustee shall execute and deliver Call
Warrants, substantially in the form of Exhibit D hereto, with respect to any
additional Underlying Securities sold to the Trustee on behalf of the Trust
pursuant to Section 5 of this Series Supplement.
(b) The Trustee shall notify the Certificateholders upon receipt of (i)
any notice, pursuant to the provision of the Call Warrants, of a Warrantholder's
exercise of its Call Warrants and (ii) notice from the Warrant Agent that it has
received the Warrant Exercise Purchase Price with respect to such exercised Call
Warrants on the Warrant Exercise Notice Date. Such notice from the Trustee shall
state (i) the Warrant Exercise Date, (ii) that such exercise of the Call Warrant
is unconditional and irrevocable, (iii) that the Trustee will select by lot for
redemption a principal amount of CorTS equal to the principal amount of
Underlying Securities to be purchased and that such redemption of the CorTS will
occur on the Warrant Exercise Date at a price equal to $25 per CorTS plus
accrued and unpaid interest thereon to the date of redemption plus, in the case
of a Warrant Exercise Date referred to in clause (i)(C) of the definition
thereof, $1.00 per CorTS, and (iv) that on the date of redemption, so long as
the I/O Certificates are outstanding, the I/O Certificateholders will be paid
the I/O Payment Amount plus accrued and unpaid interest, if any, to the Warrant
Exercise Date on the Notional Amount of the I/O Certificates to be reduced and
that following such payment on the I/O Certificates the Notional Amount of the
I/O Certificates will be reduced by the principal amount of Underlying
Securities purchased.
10
(c) Upon the exercise of any Call Warrant in accordance with the terms of
the Call Warrants, the Trustee, after receipt of the Warrant Exercise Purchase
Price and the Call Warrants being exercised, shall deliver or cause to be
delivered upon the written direction of the Warrant Agent, by 1:00 p.m. (New
York City time) on the related Warrant Exercise Date, the Underlying Securities
as specified in the exercised Call Warrant by instructing the Depositary to
credit such Underlying Securities to the account of the exercising Warrantholder
or its nominee, provided that the Trustee shall have received notice of the
exercise of such Call Warrant from the Warrant Agent in accordance with the
terms of the Call Warrants and shall have received from the Warrant Agent an
amount, in immediately available funds in a form acceptable to the Trustee,
equal to the Warrant Exercise Purchase Price for such Underlying Securities by
12:00 p.m. (New York City time) on the related Warrant Exercise Date.
(d) Upon receipt from the Warrant Agent of the Warrant Exercise Purchase
Price pursuant to the Call Warrants being exercised, the Trustee shall credit
the amount of the Warrant Exercise Purchase Price to the Certificate Account on
or before the related Warrant Exercise Date and pay to the CorTS
Certificateholders and the I/O Certificateholders the amount described in
Section 8(b)(iii) and (iv) above. The CorTS to be redeemed will be selected by
the Trustee or DTC by lot and will be paid for on the Warrant Exercise Date, the
I/O Payment Amount will be made and the Notional Amount of the I/O Certificates
will be reduced pro rata based upon the Notional Amount of I/O Certificates held
by an I/O Certificateholder.
Section 9. Certain Provisions of Base Trust Agreement Not Applicable. The
provisions of Sections 2.3, 3.1.(b), 3.2, 3.3, 3.4, 3.5, 3.6, 3.8, 3.10, 3.11,
3.12, 3.13, 3.14, 3.15, 3.16, 3.18, 4.3, 4.5, 5.16, 5.17, 6.1(f), (g) and (h),
6.4, 6.5, 6.6, 6.7. and 9.1 and Article VII of the Base Trust Agreement and any
provision of the Base Trust Agreement, which imposes obligations on, or creates
rights in favor of, the Trustee or the Certificateholders as a result of or in
connection with an "Event of Default" or "Administrative Agent Termination
Event" shall be inapplicable with respect to the Certificates. In addition,
there is no "Administrative Agent", "Calculation Agent", or "Cut-off Date"
specified herein, and all references to "Administrative Agent", "Calculation
Agent" or "Cut-off Date" in the Base Trust Agreement, therefore shall be
inapplicable with respect to the Certificates.
Section 10. Distributions.
(a) On each Scheduled Distribution Date, the Trustee shall distribute to
the CorTS Certificateholders the related CorTS Fixed Payment and to the I/O
Certificateholders the related I/O Fixed Payment, in each case, to the extent of
Interest Collections. Subject to the exercise of the Call Warrants (in which
case the provisions of Section 8 of this Series Supplement shall apply) and the
terms of this Section 10, on the CorTS Maturity Date the Trustee shall
distribute to the CorTS Certificateholders the principal balance of the CorTS
(in the amount of $41,200,000), to the extent the principal of the Underlying
Securities is received by the Trustee on such date, and shall distribute all
other amounts held in the Trust pursuant to Section 10(k) of this Series
Supplement. If any payment with respect to the Trust Assets as described in this
Section 10(a) is made to the Trustee after the Scheduled Distribution Date on
which such payment was due, the Trustee shall distribute such amount received on
the Business Day following such receipt.
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(b) In the event of a Payment Default, the Trustee shall solicit bids for
the cash sale of the Underlying Securities with settlement thereof on or before
the third (3rd) Business Day after such sale from three leading dealers in the
relevant market and the Warrantholders and shall accept the highest firm bid
received from such dealers or Warrantholders. Any of the following dealers shall
be deemed to qualify as leading dealers: (1) Credit Suisse Securities (USA) LLC,
(2) ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., (3) ▇▇▇▇▇▇ Brothers Inc., (4) ▇▇▇▇▇▇▇ Lynch, Pierce,
▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, (5) UBS Securities LLC and (6) Citigroup Global
Markets Inc.; provided, however, that no bid from Citigroup Global Markets Inc.
or any affiliate thereof shall be accepted unless such bid equals the then fair
market value of such Underlying Securities. The Trustee shall not be responsible
for the failure to obtain a bid so long as it has made reasonable efforts to
obtain bids. If a bid for the sale of the Underlying Securities has been
accepted by the Trustee but the sale has failed to settle on the proposed
settlement date, the Trustee shall request new bids from such leading dealers
and the Warrantholders.
(c) Any proceeds received by the Trustee in respect of the Underlying
Securities as a result of an Acceleration and corresponding payment on the
Underlying Securities, or as the result of the liquidation of the Underlying
Securities following a Payment Default on the Underlying Securities, shall
(subject to clause (l) of this Section 10) be distributed to the CorTS
Certificateholders and the I/O Certificateholders such that the percentage of
such proceeds received by the CorTS Certificateholders equals the CorTS
Allocation Percentage as of the Record Date for such distribution and the
percentage of such proceeds received by the I/O Certificateholders equals the
I/O Allocation Percentage as of the Record Date for such distribution until the
aggregate amount so distributed to the CorTS Certificateholders and I/O
Certificateholders equals the sum of the principal amount of the Underlying
Securities plus accrued and unpaid interest thereon to date of distribution plus
the I/O Payment Amount as of the date of distribution, and the Call Warrants
will, if In-the-Money, be deemed to be exercised and will be cash settled for an
amount equal to any remaining proceeds. If the Call Warrants are not
In-the-Money, they will expire worthless. Such proceeds will be distributed as
described above in full satisfaction of the claim of the CorTS and the I/O
Certificates and the Call Warrants. The Trustee will promptly give notice as
provided in Section 18(c) to the Depositary, or for any Certificates which are
not then held by DTC or any other depository, directly to the registered holders
of the Certificates then outstanding and unpaid. Such notice shall state (i) the
identity of the issue of Underlying Securities, (ii) the date and nature of such
Payment Default or Acceleration, (iii) the amount of the interest or principal
in default, (iv) the CorTS affected by the Payment Default or Acceleration, and
(v) any other information which the Trustee may deem appropriate. No amount will
be distributed to the Trustor in respect of the Underlying Securities (other
than amounts which may be distributable to the Trustor as a holder of any
Certificates).
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(d) Distributions to the Certificateholders on each Distribution Date will
be made to the Certificateholders of record on the Record Date.
(e) All distributions to CorTS Certificateholders shall be allocated pro
rata among the CorTS based on their respective principal balances as of the
Record Date. All distributions to I/O Certificateholders shall be allocated pro
rata among the I/O Certificates based on their respective Notional Amounts as of
the Record Date.
(f) Notwithstanding any provision of the Agreement to the contrary, to the
extent funds are available, the Trustee will initiate payment in immediately
available funds by 10:00 A.M. (New York City time) on each Distribution Date of
all amounts payable to each Certificateholder with respect to any Certificate
held by such Certificateholder or its nominee (without the necessity for any
presentation or surrender thereof or any notation of such payment thereon) in
the manner and at the address as each Certificateholder may from time to time
direct the Trustee in writing fifteen (15) days prior to such Distribution Date
(or, if later, such notice may be given on the date such Certificate was
acquired by such Certificateholder) requesting that such payment will be so made
and designating the bank account to which such payments shall be so made. The
Trustee shall be entitled to rely on the last instruction delivered by the
Certificateholder pursuant to this Section 10(f) unless a new instruction is
delivered fifteen (15) days prior to a Distribution Date.
(g) Upon receipt by the Trustee of a notice that all or a portion of the
Underlying Securities are to be redeemed, the Trustee shall select by lot for
redemption a principal amount of CorTS and reduce the Notional Amount of the I/O
Certificates equal to the principal amount of the Underlying Securities to be
redeemed on the Underlying Securities Redemption Distribution Date. The Trustee
shall promptly give notice of such redemption to the Warrantholders. Notice of
such redemption shall also be given by the Trustee to the registered
Certificateholders not less than ten (10) days prior to the Underlying
Securities Redemption Distribution Date by mail to each registered
Certificateholder at such registered Certificateholder's last address on the
register maintained by the Trustee; provided, however, that the Trustee shall
not be required to give any notice of redemption prior to the third Business Day
after the date it receives notice of such redemption.
Upon the occurrence of a redemption of the Underlying Securities by the
Underlying Issuer, redemption proceeds (to the extent of funds available) will
be allocated in the following order of priority: (i) CorTS selected by lot for
redemption, in an aggregate principal amount equal to the principal amount of
the Underlying Securities to be redeemed, will be redeemed at a price equal to
$25 per CorTS plus accrued and unpaid interest thereon; (ii) I/O
Certificateholders will receive accrued and unpaid interest on the I/O
Certificates on the Notional Amount of the I/O Certificates to be reduced; (iii)
the I/O Certificateholders will receive an amount equal to the I/O Payment
Amount; and (iv) Call Warrants proportionate to the amount of Underlying
Securities to be redeemed will, if In-the-Money, be deemed to be exercised and
will be cash settled for an amount equal to any remaining redemption proceeds
after the payments made pursuant to clauses (i) through (iii) above, or, if the
Call Warrants are not In-the-Money, such Call Warrants shall expire worthless.
13
All payments to I/O Certificateholders and reductions to the notional
amount of I/O Certificates pursuant to clauses (ii) and (iii) above shall be
made on a pro rata basis based upon the Notional Amount of I/O Certificates held
by an I/O Certificateholder.
(h) [Reserved].
(i) [Reserved].
(j) (A) If the Trust is no longer permitted under Item 1100(c)(2) of
Regulation AB to refer to periodic reports filed by the Underlying Issuer under
the Exchange Act and the Trustor determines in its sole discretion, after
consultation with the Commission, that under applicable securities laws, rules
or regulations the Trust must be liquidated or the Underlying Securities
distributed (an "SEC Reporting Failure"), then the Trustee shall liquidate any
remaining Underlying Securities and distribute any proceeds thereof to the
Certificateholders. The Trustee shall notify each Rating Agency of any such
liquidation of the Trust. The distribution of liquidation proceeds will be
allocated between the CorTS Certificateholders and the I/O Certificateholders
such that the percentage received by the CorTS Certificateholders of the total
distribution equals the CorTS Allocation Percentage as of the Record Date for
such distribution and the percentage received by the I/O Certificateholders of
the total distribution equals the I/O Allocation Percentage as of the Record
Date of such distribution. In connection with the occurrence of an SEC Reporting
Failure, to the extent permitted by applicable law, the Trustee or the Trustor
shall notify the Warrantholders promptly after consultation with the Commission
as described above.
(B) Notwithstanding the foregoing, the Call Warrants will become
immediately exercisable upon the occurrence of an SEC Reporting Failure (whether
such SEC Reporting Failure occurs before or after September 29, 2011), and, if
In-the-Money or At-the-Money, will be deemed to be exercised without further
action by the Warrantholders and will be cash-settled concurrently with the
distribution to CorTS Certificateholders and I/O Certificateholders. If the Call
Warrants are In-the-Money or At-the-Money and are cash-settled, the allocation
between the CorTS and the I/O Certificates described in paragraph (A) above
shall not apply, the Underlying Securities will be liquidated as set forth below
and the CorTS will receive liquidation proceeds in an amount equal to $25 per
CorTS plus accrued and unpaid interest thereon, the I/O Certificates will
receive liquidation proceeds in an amount equal to accrued and unpaid interest
thereon plus the I/O Payment Amount and any remaining proceeds will be paid to
the Warrantholders.
(C) If an SEC Reporting Failure occurs, the Trustee shall solicit
bids for the sale of the Underlying Securities with settlement thereof on or
before the third (3rd) Business Day after such sale from three leading dealers
in the relevant market and the Warrantholders, and may solicit additional bids
from such other parties as the Trustor deems appropriate and shall accept the
highest firm bid received in connection with such solicitation. The Call
Warrants will be deemed to be "In-the-Money" if the highest firm bid received
with respect to all Underlying Securities owned by the Trustee on behalf of the
Trust exceeds (and will be deemed to be "At-the-Money" if such bid equals) the
sum of 100% of the principal amount of such Underlying Securities plus accrued
and unpaid interest thereon plus (ii) the I/O Payment Amount, and cash
settlement shall be made in an amount equal to such excess, if any (but only if
the Underlying Securities are actually sold at a price equal to the amount of
such bid). Any of the following dealers shall be deemed to qualify as leading
dealers: (1) Credit Suisse Securities (USA) LLC, (2) ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., (3)
▇▇▇▇▇▇ Brothers Inc., (4) ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated,
(5) UBS Securities LLC and (6) Citigroup Global Markets Inc.; provided, however,
that no bid from Citigroup Global Markets Inc. or any affiliate thereof shall be
accepted unless such bid equals the then fair market value of such Underlying
Securities. The Trustee shall not be responsible for the failure to obtain a bid
so long as it has made reasonable efforts to obtain bids. If a bid for the sale
of the Underlying Securities has been accepted by the Trustee but the sale has
failed to settle on the proposed settlement date, the Trustee shall request new
bids from such leading dealers as soon as reasonably practicable.
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(D) Notwithstanding the foregoing, if an SEC Reporting Failure
occurs on or after September 29, 2011, Warrantholders will continue to have the
right to exercise the Call Warrants in accordance with Section 8 so long as the
Call Warrants are exercised prior to the liquidation of the Underlying
Securities. Any payments to CorTS Certificateholders and I/O Certificateholders
in connection with such exercise shall be made as set forth in Section 8.
(k) The rights of the Certificateholders to receive distributions in
respect of the Certificates, and all interests of the Certificateholders in such
distributions, shall be as set forth in this Series Supplement. Notwithstanding
anything in the Agreement to the contrary, to the extent there remains on
deposit monies or property in the Trust after all required payments and
distributions have been made in accordance with this Series Supplement
(including without limitation Section 8 and this Section 10), such remaining
monies or property shall be distributed to the Certificateholders on a pro rata
basis based on the Allocation Percentages on the date the final CorTS Fixed
Payment and I/O Fixed Payment was made. The Trustee shall in no way be
responsible or liable to the Certificateholders nor shall any Certificateholder
in any way be responsible or liable to any other Certificateholder in respect of
amounts previously distributed on the Certificates based on their respective
principal balances or Notional Amount, as the case may be.
(l) On the Closing Date, as partial payment for the Underlying Securities,
the Trustee shall deliver to, or at the direction of, the Seller, pursuant to
the Sale Agreement, all of the Certificates and the Call Warrants. On December
1, 2006, as payment of the balance of the purchase price for the Underlying
Securities, as provided in the Sale Agreement, the Trustee shall pay to the
Seller from the scheduled interest distributions received on the Underlying
Securities on such date, the amount of the interest accrued on the Underlying
Securities from June 1, 2006 to but not including the Closing Date, which amount
equals $962,191.67. In the event such amounts are not received by the Trustee on
such date or otherwise are insufficient to pay such amount of accrued interest
to the Seller, notwithstanding any other provision of this Agreement, the Seller
shall have a claim for the unpaid portion of such amount and shall share pari
passu with the Certificateholders to the extent of such claim in the proceeds
from the sale or recovery of the Underlying Securities.
Section 11. Termination of Trust. e) The Trust shall terminate upon the
occurrence of any Trust Termination Event.
15
(b) Except for any reports and other information required to be provided
to Certificateholders hereunder and under the Base Trust Agreement and except as
otherwise specified herein and therein, the obligations of the Trustee will
terminate upon the distribution to Certificateholders of all amounts required to
be distributed to them and the disposition of all Underlying Securities held by
the Trustee on behalf of the Trust. The Trust shall thereupon terminate, except
for surviving rights of indemnity.
Section 12. Limitation of Powers and Duties. f) The Trustee shall
administer the Trust and the Underlying Securities solely as specified herein
and in the Base Trust Agreement.
(b) The Trust is constituted solely for the purpose of (i) acquiring and
holding the Underlying Securities, (ii) issuing the Certificates and Call
Warrants, (iii) entering into and performing its obligations and enforcing its
rights under the Agreement, this Series Supplement and the Call Warrants and
(iv) taking the other actions required hereunder. The Trustee is not authorized
to acquire any other investments or engage in any activities not authorized
herein and, in particular, unless expressly provided in the Agreement, the
Trustee is not authorized (i) to sell, assign, transfer, exchange, pledge,
set-off or otherwise dispose of any of the Underlying Securities, once acquired,
or interests therein, including to Certificateholders, (ii) to merge or
consolidate the Trust with any other entity, or (iii) to do anything that would
materially increase the likelihood that the Trust will fail to qualify as a
grantor trust for United States federal income tax purposes. In addition, the
Trustee has no power to create, assume or incur indebtedness or other
liabilities in the name of the Trust other than as contemplated herein and in
the Base Trust Agreement.
(c) The parties acknowledge that the Trustee, as the holder of the
Underlying Securities, has the right to vote and give consents and waivers in
respect of the Underlying Securities and enforce the other rights, if any, of a
holder of the Underlying Securities, except as otherwise limited by the Base
Trust Agreement or this Series Supplement. In the event that the Trustee
receives a request from the Underlying Securities Trustee, the Underlying Issuer
or, if applicable, the Depositary with respect to the Underlying Securities, for
the Trustee's consent to any amendment, modification or waiver of the Underlying
Securities, or any document relating thereto, or receives any other solicitation
for any action with respect to the Underlying Securities, the Trustee shall
within two (2) Business Days mail a notice of such proposed amendment,
modification, waiver or solicitation to each CorTS Certificateholder and I/O
Certificateholder of record as of the date of such request. The Trustee shall
request instructions from the CorTS Certificateholders as to what action to take
in response to such request and shall be protected in taking no action if no
direction is received. Except as otherwise provided herein, the Trustee shall
consent or vote, or refrain from consenting or voting, in the same proportion
(based on the relative principal balances of the CorTS) as if the CorTS were
actually voted or not voted by the Holders thereof as of the date determined by
the Trustee prior to the date such vote or consent is required; provided,
however, that, notwithstanding anything to the contrary in the Base Trust
Agreement or this Series Supplement, the Trustee shall at no time vote in favor
of or consent to any matter (i) which would alter the timing or amount of any
payment on the Underlying Securities (including, without limitation, any demand
to accelerate the Underlying Securities) or (ii) which would result in the
exchange, substitution, or tender of any Underlying Security whether or not
pursuant to a plan for the refunding or refinancing of such Underlying Security,
except in each case with the unanimous consent of the Certificateholders, and
subject to the requirement that such vote or consent would not materially
increase the likelihood that the Trust will fail to qualify as a grantor trust
for United States federal income tax purposes, and, in any event, that the Trust
will not fail to qualify as either a grantor trust or partnership (other than a
publicly traded partnership treated as a corporation) under the Code, such
determination to be based solely on an Opinion of Counsel. The Trustee shall not
be obligated to follow any instruction that would cause the Trust to violate the
terms of any agreement or other obligation to which the Trust is a party,
including the Warrant Agent Agreement. The Trustee shall have no liability for
any failure to act or to refrain from acting resulting from the
Certificateholders' late return of, or failure to return, directions requested
by the Trustee from the Certificateholders.
16
(d) Notwithstanding any provision of the Agreement to the contrary, the
Trustee may require from the Certificateholders prior to taking any action at
the direction of the Certificateholders, an indemnity agreement of a
Certificateholder or any of its Affiliates to provide for security or indemnity
against the costs, expenses and liabilities the Trustee may incur by reason of
any such action. An unsecured indemnity agreement, if acceptable to the Trustee,
shall be deemed to be sufficient to satisfy such security or indemnity
requirement.
(e) Notwithstanding any provision of the Agreement to the contrary, the
Trustee shall act as the sole Authenticating Agent, Paying Agent and Certificate
Registrar.
Section 13. Compensation of Trustee. Each of the Trustee and U.S. Bank
National Association, as co-trustee (the "co-trustee"), shall be entitled to
receive from the Trustor as compensation for its services hereunder, trustee's
fees pursuant to a separate agreement among the Trustee, the co-trustee, and the
Trustor, and shall be reimbursed for all reasonable expenses, disbursements and
advances incurred or made by it (including the reasonable compensation,
disbursements and expenses of its counsel and other persons not regularly in its
employ). The Trustor shall indemnify and hold harmless each of the Trustee and
the co-trustee, and its successors, assigns, agents and servants against any and
all loss, liability or reasonable expense (including attorneys' fees) incurred
by it in connection with the administration of this trust and the performance of
its duties thereunder. The Trustee and the co-trustee shall notify the Trustor
promptly of any claim for which they may seek indemnity. Failure by the Trustee
or the co-trustee to so notify the Trustor shall not relieve the Trustor of its
obligations hereunder. The Trustor need not reimburse any expense or indemnify
against any loss, liability or expense incurred by the Trustee or the co-trustee
through the Trustee's or the co-trustee's own willful misconduct, gross
negligence or bad faith. The indemnities contained in this Section 13 shall
survive the resignation or termination of the Trustee or the co-trustee, or the
termination of this Agreement.
Failure by the Trustor to pay, reimburse or indemnify the Trustee or the
co-trustee shall not entitle the Trustee or the co-trustee to any payment,
reimbursement or indemnification from the Trust, nor shall such failure release
either the Trustee or the co-trustee from the duties it is required to perform
under this Series Supplement. Any unpaid, unreimbursed or unindemnified amounts
shall not be borne by the Trust and shall not constitute a claim against the
Trust, but shall be borne by each of the Trustee and the co-trustee in its
individual capacity, and the Trustee and the co-trustee shall have no recourse
against the Trust with respect thereto.
17
The Trustee hereby agrees that it shall not receive any additional
compensation for the performance of its duties, as warrant agent under the
Warrant Agent Agreement.
Section 14. Modification or Amendment. g) The Trustee shall not enter into
any modification or amendment of the Base Trust Agreement or this Series
Supplement unless such modification or amendment is in accordance with Section
10.1 of the Base Trust Agreement. Pursuant to Section 5 of this Series
Supplement, there may be sold to the Trustee on behalf of the Trust additional
Underlying Securities from time to time without violation or trigger of this
Section 14. Notwithstanding anything to the contrary contained in Section
10.1(a) of the Base Trust Agreement, the Base Trust Agreement or this Series
Supplement may not be amended or modified for the purposes contained in items
(v) through (viii) in Section 10.1 of the Base Trust Agreement unless the
Trustee has received written confirmation from each Rating Agency that such
amendment will not cause such Rating Agency to reduce or withdraw the then
current rating of the CorTS.
(b) As referenced in Section 10.1(b) of the Base Trust Agreement, the
Required Percentage--Amendment required if the Rating Agency Condition is not
satisfied with respect to a modification or amendment shall be 100%.
Section 15. Accounting. Notwithstanding Section 3.16 of the Base Trust
Agreement, no such accounting reports shall be required. Pursuant to Section 4.2
of the Base Trust Agreement, the Trustee shall cause the statements to be
prepared and forwarded as provided therein.
Section 16. No Investment of Amounts Received on Underlying Securities.
All amounts received on or with respect to the Underlying Securities shall be
held uninvested by the Trustee and shall be credited to the Certificate Account.
Section 17. No Event of Default. There shall be no Events of Default
defined with respect to the Certificates.
Section 18. Notices. h) All directions, demands and notices hereunder and
under the Base Trust Agreement shall be in writing and shall be deemed to have
been duly given when received if personally delivered or mailed by first class
mail, postage prepaid or by express delivery service or by certified mail,
return receipt requested or delivered in any other manner specified herein, (i)
in the case of the Trustor, to Structured Products Corp., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Secretary, or such other
address as may hereafter be furnished to the Trustee in writing by the Trustor,
and (ii) in the case of the Trustee, to U.S. Bank Trust National Association,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate
Trust, facsimile number (▇▇▇) ▇▇▇-▇▇▇▇, or such other address as may hereafter
be furnished to the Trustor in writing by the Trustee.
18
(b) For purposes of delivering notices to the Rating Agency under Section
10.7 of the Base Trust Agreement, or otherwise, such notices shall be mailed or
delivered as provided in such Section 10.7, to: Standard & Poor's Ratings
Services, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; and ▇▇▇▇▇'▇ Investors
Service, Inc., Structured Derivative Products, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇; or such other address as the Rating Agency may designate in writing
to the parties hereto.
(c) In the event a Payment Default or an Acceleration occurs, the Trustee
shall promptly give notice to the Depositary or, for any Certificates which are
not then held by the Depositary or any other depository, directly to the
registered holders of the Certificates thereof. Such notice shall set forth (i)
the identity of the issue of Underlying Securities, (ii) the date and nature of
such Payment Default or Acceleration, (iii) the amount of the interest or
principal in default, (iv) the Certificates affected by the Payment Default or
Acceleration, and (v) any other information which the Trustee may deem
appropriate.
(d) Notwithstanding any provisions of the Agreement to the contrary, the
Trustee shall deliver all notices or reports required to be delivered to or by
the Trustee or the Trustor to the Certificateholders without charge to such
Certificateholders.
(e) The Trustee shall, in connection with any required delivery of any
document or notice to the Certificateholders (whether or not such delivery is
required pursuant to the Agreement), provide such document or notice to the
Warrantholders concurrently with the delivery thereof to the Certificateholders.
Section 19. Access to Certain Documentation. Access to documentation
regarding the Underlying Securities will be afforded without charge to any
Certificateholder so requesting pursuant to Section 3.17 of the Base Trust
Agreement. Additionally, the Trustee shall provide at the request of any
Certificateholder without charge to such Certificateholder the name and address
of each Certificateholder of Certificates hereunder as recorded in the
Certificate Register for purposes of contacting the other Certificateholders
with respect to their rights hereunder or for the purposes of effecting
purchases or sales of the Certificates, subject to the transfer restrictions set
forth herein.
Section 20. Advances. There is no Administrative Agent specified herein;
hence no person (including the Trustee) shall be permitted or obligated to make
Advances as described in Section 4.3 of the Base Trust Agreement.
Section 21. Withholding Taxes. The Trustee shall withhold, and remit to
the Internal Revenue Service, a 30% U.S. federal withholding tax (or other
required amount) on the payments made in respect of the Certificates to non-U.S.
Persons who are Certificateholders unless the non-U.S. Person establishes an
exemption from such withholding tax satisfactory to the Trustor and the Trustee.
The Trustee shall not have any obligations to comply with the provisions of this
Section 21 if the Trustee does not have actual knowledge that Certificates are
held by non-U.S. Persons.
Section 22. Ratification of Agreement. With respect to the Series issued
hereby, the Base Trust Agreement, as supplemented by this Series Supplement, is
in all respects ratified and confirmed, and the Base Trust Agreement as so
supplemented by this Series Supplement shall be read, taken and construed as one
and the same instrument. To the extent there is any inconsistency between the
terms of the Base Trust Agreement and this Series Supplement, the terms of this
Series Supplement shall govern.
19
Section 23. Counterparts. This Series Supplement may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all of such counterparts shall together constitute but one and the
same instrument.
Section 24. Governing Law. This Series Supplement and each Certificate
issued hereunder shall be governed by and construed in accordance with the laws
of the State of New York applicable to agreements made and to be performed
entirely therein without reference to such State's principles of conflicts of
law to the extent that the application of the laws of another jurisdiction would
be required thereby, and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws. The State of New
York is the securities intermediary's jurisdiction of the Securities
Intermediary for purposes of Article 8 of the UCC.
Section 25. Establishment of Certificate Account. The Securities
Intermediary and the Trustee hereby represent and warrant that:
(a) The Certificate Account for the Trust is a "securities account" within
the meaning of Section 8-501 of the UCC and is held only in the name of the
Trustee on behalf of the Trust. 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) All Underlying Securities have been credited to the Certificate
Account by the Securities Intermediary; and
(c) The Certificate 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 Certificate Account.
Section 26. Certificates of Compliance.
(a) The Trustor shall deliver to the Trustee on or prior to March 31 of
each year prior to a Trust Termination Event the Officer's Certificate as to
compliance as required by Section 6.1(b) of the Base Trust Agreement.
(b) The Trustee shall provide, at the Trustor's direction and expense, (i)
reports on assessments of compliance with servicing criteria and (ii)
attestation reports on assessments of compliance with servicing criteria
prepared by a nationally recognized registered public accounting firm that
satisfies the requirements of Rule 2-01 of Regulation S-X under the Exchange Act
(who may also render services to the Trustor) sufficient for the Trustor on
behalf of the Trust to satisfy the Trust's obligations that, pursuant to Rules
13a-18 and 15d-18 of the Exchange Act and Item 1122(b) of Regulation AB, attests
to, and reports on, the assessment of compliance performed by the Trustee and
delivered to the Trustor.
Section 27. Appointment of Co-Trustee. The Trustor and the Trustee hereby
appoint U.S. Bank National Association, a national banking association, as
co-trustee under the Agreement. Any action required to be taken by the Trustee
may be taken by U.S. Bank National Association, as co-trustee, in full
satisfaction of the obligations of the Trustee, provided, however, the
Underlying Securities shall be transferred to the Trustee, and the Trustee shall
pay the full purchase price thereof in accordance with the terms hereof and the
Sale Agreement. By its acceptance of this Series Supplement, U.S. Bank National
Association hereby accepts its appointment as co-trustee under the Agreement.
20
Section 28. Securities Provisions for I/O Certificates. I/O Certificates
sold in the United States or to U.S. Persons (as defined in Regulation S under
the Securities Act) shall be offered solely to persons that are "qualified
institutional buyers" as defined in Rule 144A under the Securities Act in
accordance with Rule 144A. Each purchaser of the I/O Certificates that is a U.S.
Person will be deemed to have represented that it constitutes a "qualified
institutional buyer" as defined in Rule 144A under the Securities Act.
At any time when the Trust is not subject to Section 13 or 15(d) of the
United States Securities Exchange Act of 1934, as amended, upon the request of
any I/O Certificateholder, the Trustee on behalf of the Trust shall promptly
furnish to such I/O Certificateholder or to a prospective purchaser of any I/O
Certificate designated by such I/O Certificateholder, as the case may be, the
information which the Trustor determines to be required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act ("Rule 144A Information") in order
to permit compliance by such I/O Certificateholder with Rule 144A in connection
with the resale of such I/O Certificate by such I/O Certificateholder; provided,
however, that the Trust shall not be required to provide audited financial
statements more than once a year or to furnish Rule 144A Information in
connection with any request made on or after the date that is two years from the
later of (i) the date such I/O Certificate (or any predecessor I/O Certificate)
was acquired from the Trust or (ii) the date such I/O Certificate (or any
predecessor I/O Certificate) was last acquired from an "affiliate" of the Trust
within the meaning of Rule 144, in each case as determined by the Trustor.
I/O Certificates sold to non-U.S. Persons shall be sold solely in
accordance with Regulation S under the Securities Act.
Section 29. Reporting Obligations. The Trustor shall advise and reasonably
cooperate with the Trustee as to what information, if any, is required by Rule
144A(d)(4) under the Securities Act and the Trustee shall be entitled to rely on
such advice of the Trustor.
Section 30. Statement of Intent. It is the intention of the parties hereto
that, for 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, the Trust shall be treated as a grantor trust, but failing that, as a
partnership (other than a publicly traded partnership treated as a corporation).
The parties hereto agree that, unless otherwise required by appropriate tax
authorities, the Trust shall file or cause to be filed annual or other necessary
returns, reports and other forms consistent with such intended characterization.
In the event that the Trust is characterized by appropriate tax authorities as a
partnership for federal income tax purposes, each Certificateholder, by its
acceptance of its Certificate, agrees to report its respective share of the
items of income, deductions, and credits of the Trust on its respective returns
(making such elections as to individual items as may be appropriate) in
accordance with Treasury Regulations Section 1.761-2(b) (the "761 Election") and
in a manner consistent with the exclusion of the Trust from partnership tax
accounting. The terms of the Agreement shall be interpreted to further these
intentions of the parties. In mutual consideration for each Certificateholder's
purchase of a Certificate, each such Certificateholder is deemed to agree not to
delegate (for a period of more than one year) authority to purchase, sell to
exchange its Certificate to any person.
21
Each Certificateholder (and each beneficial owner of a Certificate) by
acceptance of its Certificate (or its beneficial interest therein) agrees,
unless otherwise required by appropriate tax authorities, to file its own tax
returns and reports in a manner consistent with the characterization indicated
above.
Section 31. Filing of Partnership Returns. In the event that the Trust is
characterized (by appropriate tax authorities) as a partnership for United
States federal income tax purposes, and the 761 Election is ineffective, the
Trustor agrees to reimburse the Trust for any expenses associated with the
filing of partnership returns (or returns related thereto).
Section 32. "Financial Assets" Election. The Securities Intermediary
hereby agrees that the Underlying Securities and any other property credited to
the Certificate Account shall be treated as a "financial asset" within the
meaning of Section 8-102(a)(9) of the UCC.
Section 33. Trustee's Entitlement Orders. If at any time the Securities
Intermediary shall receive any entitlement order from the Trustee with respect
to the Underlying Securities, the Certificate Account, or any property credited
to the Certificate Account, the Securities Intermediary shall comply with such
entitlement order without further consent by the Trustor or any other Person.
The Securities Intermediary shall take all instructions (including without
limitation all notifications and entitlement orders) with respect to the
Certificate Account solely from the Trustee.
Section 34. Conflict with Other Agreements. The Securities Intermediary
hereby confirms and agrees that:
(a) There are no other agreements entered into between the Securities
Intermediary and the Trustor with respect to the Certificate Account. The
Certificate Account and all property credited to the Certificate Account is not
subject to, and the Securities Intermediary hereby waives, any lien, security
interest, right of set off, or encumbrance in favor of the Securities
Intermediary or any Person claiming though the Securities Intermediary (other
than the Trustee);
(b) It has not entered into, and until the termination of the Agreement
will not enter into, any agreement with any other Person relating to the
Certificate Account and/or any financial assets credited thereto pursuant to
which it has agreed to comply with entitlement orders of any Person other than
the Trustee; and
(c) It has not entered into, and until the termination of the Agreement
will not enter into, any agreement with any Person purporting to limit or
condition the obligation of the Securities Intermediary to comply with
entitlement orders as set forth in Section 32 hereof.
Section 35. Additional Trustee and Securities Intermediary
Representations. The Trustee and the Securities Intermediary each hereby
represents and warrants as follows:
(a) [Reserved];
22
(b) The Trustee and the Securities Intermediary each has not granted any
lien on the Underlying Securities nor are the Underlying Securities subject to
any lien on properties of the Trustee or the Securities Intermediary in its
individual capacity; the Trustee and the Securities Intermediary each has no
actual knowledge and has not received actual notice of any lien on the
Underlying Securities (other than any lien of the Trustee for the benefit of the
beneficiaries of the Trust Agreement); other than the interests of the Trustee
and the Certificateholders and the interests of the Warrantholders, the books
and records of the Trustee and the Securities Intermediary each do not identify
any Person as having an interest in the Underlying Securities; and
(c) The Trustee and the Securities Intermediary each makes no
representation as to (i) the validity, legality, sufficiency or enforceability
of any of the Underlying Securities or (ii) the collectability, insurability,
effectiveness or suitability of any of the Underlying Securities.
Section 36. [Reserved].
Section 37. Report to Certificateholders. Section 4.2 of the Base Trust
Agreement is hereby amended by deleting the following line from paragraph (v):
"the current rating assigned by the Rating Agency thereon."
23
IN WITNESS WHEREOF, the parties hereto have caused this Series Supplement
to be executed by their respective duly authorized officers as of the date first
above written.
STRUCTURED PRODUCTS CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Authorized Signatory
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
By: /s/ ▇▇▇▇▇ ▇'▇▇▇▇
---------------------------------
Responsible Officer
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Securities Intermediary
By: /s/ ▇▇▇▇▇ ▇'▇▇▇▇
---------------------------------
Responsible Officer
ACCEPTED AND ACKNOWLEDGED BY:
U.S. BANK NATIONAL ASSOCIATION,
as Co-Trustee
By: /s/ ▇▇▇▇▇ ▇'▇▇▇▇
---------------------------------
Responsible Officer
EXHIBIT A
IDENTIFICATION OF THE UNDERLYING SECURITIES AS OF CLOSING DATE
Underlying Issuer: International Business Machines Corporation
Underlying Securities: 7.125% Debentures due December 1, 2096
Original Principal Amount
Issued: $850,000,000
CUSIP No.: 459200 AP6
Stated Interest Rate: 7.125% per annum
Interest Payment Dates: June 1 and December 1
Maturity Date: December 1, 2096
Redemption: The Underlying Issuer has the right to
redeem the Underlying Securities in whole or
in part, at any time, at a price equal to
the greater of (i) 100% of the principal
amount of the Underlying Securities being
redeemed or (ii) the present value of the
remaining scheduled payments of principal
and interest discounted to the redemption
date on a semiannual basis (assuming a
360-day year consisting of twelve 30-day
months) at a certain treasury benchmark rate
plus 0.15%, plus in each case, accrued
interest thereon to the redemption date.
Minimum Denomination: $1,000
Currency of Denomination: U.S. dollars
Form: Book-Entry
Underlying Securities
Prospectus Date: Prospectus supplement dated December 3, 1996
related to a prospectus dated December 3,
1996
Underlying Securities
Registration Statement: 33-65119
Principal Amount of
Underlying Securities Deposited
Under Trust Agreement: $41,200,000
The Underlying Securities will be held by the Trustee on behalf of the
Trust as security entitlements credited to an account of the Trustee at the
Securities Intermediary. The Securities Intermediary will hold the Underlying
Securities through DTC.
A-1
EXHIBIT B
TERMS OF THE CORTS AS OF CLOSING DATE
Number of CorTS 1,648,000
Aggregate Principal Amount
of CorTS: $41,200,000
Authorized Denomination: $25 and integral multiples thereof
Rating: A+/A1
Rating Agencies: Standard & Poor's Ratings Services, and
▇▇▇▇▇'▇ Investors Service, Inc.
Closing Date: September 29, 2006
Distribution Dates: Any Scheduled Distribution Date, the CorTS
Maturity Date or any Special Distribution
Date.
Interest Rate: 6.40% per annum
CorTS Maturity Date: December 1, 2096
Record Date: With respect to any Distribution Date, the
day immediately preceding such Distribution
Date.
Trustee's Fees: The Trustee's fees shall be payable by the
Trustor pursuant to a separate fee agreement
between the Trustee and the Trustor.
Initial Certificate Registrar: U.S. Bank Trust National Association
Corporate Trust Office: U.S. Bank Trust National Association ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ Attention: Corporate Trust Department,
Regarding CorTS(R) Trust V For IBM
Debentures
EXHIBIT C
FORM OF CorTS
THIS CorTS REPRESENTS AN UNDIVIDED BENEFICIAL INTEREST IN THE TRUST AND DOES NOT
EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN, AND IS NOT GUARANTEED BY THE
TRUSTOR OR THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CorTS
NOR THE TRUST ASSETS ARE INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR ANY
OTHER PERSON.
UNLESS THIS CorTS IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC") OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CorTS 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.
CERTIFICATE NUMBER CorTS
CUSIP: 12618Y 20 3 Certificate Principal Balance
CorTS(R)
evidencing an undivided beneficial interest in the Trust, as defined below, the
assets of which include 7.125% Debentures, due December 1, 2096, issued by
International Business Machines Corporation.
This CorTS does not represent an interest in or obligation of the Trustor or any
of its affiliates.
THIS CERTIFIES THAT Cede & Co. is the registered owner of a nonassessable,
fully-paid, fractional undivided beneficial interest in CorTS(R) Trust V For IBM
Debentures (the "Trust") formed by Structured Products Corp., as trustor (the
"Trustor").
The Trust was created pursuant to a Base Trust Agreement, dated as of
September 19, 2006 (as amended and supplemented, the "Agreement"), between the
Trustor and U.S. Bank Trust National Association, a national banking
association, not in its individual capacity but solely as Trustee (the
"Trustee"), as supplemented by the CorTS(R) Supplement 2006-1, dated as of
September 29, 2006 (the "Series Supplement" and, together with the Agreement,
the "Trust Agreement"), between the Trustor and the Trustee. This CorTS does not
purport to summarize the Trust Agreement and reference is hereby made to the
Trust Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby and the rights, duties and
obligations of the Trustee with respect hereto. A copy of the Trust Agreement
may be obtained from the Trustee by written request sent to the Corporate Trust
Office. Capitalized terms used but not defined herein have the meanings assigned
to them in the Trust Agreement.
This CorTS is one of the duly authorized Certificates designated as
"CorTS(R) Callable Trust Certificates" (herein called the "CorTS"). This CorTS
is issued under and is subject to the terms, provisions and conditions of the
Trust Agreement, to which Trust Agreement the Holder of this CorTS by virtue of
the acceptance hereof assents and by which such Holder is bound. The assets of
the Trust include the Underlying Securities and all proceeds of the Underlying
Securities. Additional Underlying Securities may be sold to the Trustee on
behalf of the Trust and additional CorTS may be authenticated and delivered from
time to time as provided in the Trust Agreement, which additional CorTS shall
rank pari passu with all other CorTS issued in accordance with the Series
Supplement.
Under the Trust Agreement, there shall be distributed on the dates
specified in the Trust Agreement (a "Distribution Date"), to the person in whose
name this CorTS is registered at the close of business on the related Record
Date, such CorTS Certificateholder's fractional undivided interest in the amount
of distributions of the Trust Assets to be distributed to CorTS
Certificateholders on such Distribution Date.
The distributions in respect of this CorTS 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 as set forth in the Series
Supplement.
The Underlying Securities held by the Trust are subject to the rights of
the Warrantholders, as provided for in the Series Supplement, and each
Certificateholder, by accepting its CorTS, acknowledges such rights and the
possibility of an early redemption of the CorTS in accordance with the terms of
the Series Supplement.
It is the intent of the Trustor, the CorTS Certificateholders and the I/O
Certificateholders that the Trust will be classified as a grantor trust under
subpart E, Part I of subchapter J of the Internal Revenue Code of 1986, as
amended, and failing that, as a partnership (other than a publicly traded
partnership treated as a corporation). In the event that the Trust is
characterized by appropriate tax authorities as a partnership for federal income
tax purposes, each Certificateholder, by its acceptance of its Certificate,
agrees to report its respective share of the items of income, deductions, and
credits of the Trust on its respective returns (making such elections as to
individual items as may be appropriate) in accordance with Treasury Regulations
Section 1.761-2(b) (i.e., in a manner consistent with the exclusion of the Trust
from partnership tax accounting). In mutual consideration for each
Certificateholder's purchase of a CorTS, each such Certificateholder is deemed
to agree not to delegate (for a period of more than one year) authority to
purchase, sell or exchange its Certificate to any person. Except as otherwise
required by appropriate taxing authorities, the Trustor and the Trustee, by
executing the Trust Agreement, and each CorTS Certificateholder, by acceptance
of a CorTS, agrees to treat, and to take no action inconsistent with such
intentions and the provisions of the Trust Agreement shall be interpreted to
further these intentions of the parties.
Each CorTS Certificateholder, by its acceptance of a CorTS, covenants and
agrees that such CorTS Certificateholder shall not, prior to the date which is
one year and one day after the termination of the Trust Agreement, acquiesce,
petition or otherwise invoke or cause the Trustor or the Trust to invoke the
process of any court or governmental authority for the purpose of commencing or
sustaining a case against the Trustor or the Trust under any federal or state
bankruptcy, insolvency, reorganization or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Trustor or the Trust or any substantial part of its property, or ordering
the winding up or liquidation of the affairs of the Trustor or the Trust.
The Trust Agreement permits the amendment thereof, in certain
circumstances, without the consent of the Holders of any of the CorTS.
Unless the certificate of authentication hereon shall have been executed
by an authorized officer of the Trustee by manual signature, this CorTS shall
not entitle the Holder hereof to any benefit under the Trust Agreement or be
valid for any purpose.
A copy of the Trust Agreement is available upon request and all of its
terms and conditions are hereby incorporated by reference and made a part
hereof.
THIS CORTS SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Trustee has caused this CorTS to be duly executed
by its manual or facsimile signature.
U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Trustee and Authenticating Agent
By:
-------------------------------------
Authorized Signatory
EXHIBIT D
FORM OF CALL WARRANT
CorTS(R) TRUST V FOR IBM DEBENTURES
Call Warrant
Dated as of [---], 2006
--------------------------------------------------------------------------------
THIS CALL WARRANT HAS NOT BEEN, AND THE WARRANTS REPRESENTED HEREBY HAVE NOT
BEEN, REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION UNDER
SUCH ACT IS IN EFFECT OR PURSUANT TO AN EXEMPTION THEREFROM UNDER SUCH ACT. THIS
CALL WARRANT AND ANY WARRANT REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN
COMPLIANCE WITH THE CONDITIONS SPECIFIED IN THIS CALL WARRANT AND MAY NOT BE
TRANSFERRED TO CITIGROUP GLOBAL MARKETS INC. OR STRUCTURED PRODUCTS CORP.
CorTS(R) TRUST V FOR IBM DEBENTURES
Call Warrant
_________ Warrants; Each Warrant Relating to $1,000 principal amount of
Underlying Securities
No. ______ [---], 200[-]
CorTS(R) Trust V For IBM Debentures (the "Trust"), a trust created under
the laws of the State of New York pursuant to a Base Trust Agreement, dated as
of September 19, 2006 (the "Agreement"), between Structured Products Corp. (the
"Trustor") and U.S. Bank Trust National Association, a national banking
association, not in its individual capacity but solely as Trustee (the
"Trustee"), as supplemented by the CorTS(R) Supplement 2006-1, dated as of
September 29, 2006 (the "Series Supplement" and, together with the Agreement,
the "Trust Agreement"), between the Trustor and the Trustee, for value received,
hereby certifies that ____________________ or registered assigns, is entitled to
purchase $___________ principal amount of the assets set forth on Schedule 1
hereto in whole or in part on any Warrant Exercise Date (as defined below)
designated by the holder of this instrument (this "Call Warrant") at a purchase
price equal to the Warrant Exercise Purchase Price (as defined below), all
subject to the terms and conditions set forth below.
D-1
Certain capitalized terms used in this Call Warrant are defined in Article
IV hereof; capitalized terms used but not defined herein shall have the
respective meanings set forth in the Trust Agreement; references to an "Exhibit"
are, unless otherwise specified, to one of the Exhibits attached to this Call
Warrant and references to a "Section" are, unless otherwise specified, to one of
the sections of this Call Warrant.
Article I
Exercise of Warrants
Section I.1 Manner of Exercise. (a) This Call Warrant may be exercised by
the holder hereof (each, a "Warrantholder"), in whole or in part, on any Warrant
Exercise Date, set forth in the prior written notice to the Warrant Agent and
the Trustee delivered at any time on or before the Business Day that is at least
fifteen (15) days before such Warrant Exercise Date (such Business Day upon
which such notice is delivered to the Warrant Agent, the "Warrant Exercise
Notice Date"), by surrender of this Call Warrant to the Warrant Agent at its
office set forth in Section VI.3 hereof no later than 11:00 a.m. (New York City
time) on such Warrant Exercise Date; provided that at the time such holder
delivers such notice to the Warrant Agent, such holder shall have made payment
to the Warrant Agent, by wire transfer or other immediately available funds
acceptable to the Warrant Agent, in the amount of the applicable Warrant
Exercise Purchase Price, in a manner such that funds are available to the
Warrant Agent no later than 11:00 a.m. (New York City time) on the Warrant
Exercise Notice Date, and such holder shall, on the Warrant Exercise Date, be
entitled to delivery of the Underlying Securities with a principal amount equal
to $1,000 per Call Warrant purchased hereunder in accordance with this Article
I; provided further that the Warrantholder may not exercise this Call Warrant at
any time when such Warrantholder is insolvent, and in connection therewith, such
Warrantholder shall be required to certify that it is solvent at the time of
exercise and settlement, by completing the Form of Subscription attached to this
Call Warrant and delivering such completed Form of Subscription to the Trustee
on or prior to the Warrant Exercise Date.
(b) The Warrant Agent shall notify the Trustee immediately upon receipt by
the Warrant Agent of a notice by the holder of this Call Warrant and upon
receipt of payment of the applicable Warrant Exercise Purchase Price from such
holder on the Warrant Exercise Notice Date pursuant to clause (a) of this
Section I.1. The Warrant Agent shall transfer each payment made by the holder
hereof pursuant to clause (a) of this Section I.1 to the Trustee in immediately
available funds, for application pursuant to the Trust Agreement no later than
12:00 p.m. (New York City time) on the applicable Warrant Exercise Date. Pending
transfer of the Warrant Exercise Purchase Price to the Trustee on the applicable
Warrant Exercise Date, the Warrant Agent shall hold the Warrant Exercise
Purchase Price in a segregated trust account for the benefit of the
Certificateholders.
(c) If the Warrant Agent receives the Warrant Exercise Purchase Price from
the Warrantholder as provided in clause (a) of this Section I.1 by 11:00 a.m.
(New York City time) on the Warrant Exercise Notice Date, the notice of exercise
given on such Warrant Exercise Notice Date shall be irrevocable and
unconditional. If, by 11:00 a.m. (New York City time) on the Warrant Exercise
Notice Date, the Warrant Agent has not received the Warrant Exercise Purchase
Price from the Warrantholder as provided in clause (a) of this Section I.1, then
the notice of exercise given on such Warrant Exercise Notice Date shall be
deemed to be invalid and none of the holder of such Call Warrant, the Warrant
Agent and the Trustee shall have any obligations with respect to such notice by
the holder of such Call Warrant. The expiration of a notice by the holder of
this Call Warrant shall in no way affect a holder of a Call Warrant's right to
subsequently deliver a notice which satisfies the terms of the Trust Agreement.
D-2
(d) Upon the occurrence of a redemption of the Underlying Securities by
the Underlying Issuer (whether such redemption occurs before or after September
29, 2011), Call Warrants proportionate to the amount of Underlying Securities to
be redeemed will, (i) if In-the-Money, be deemed to be exercised on a pro rata
basis for each holder of Call Warrants, and will be cash-settled for an amount
equal to any remaining redemption proceeds after the payments made pursuant to
clause (i) through (iii) in Section 10(g) of the Trust Agreement, or (ii) if not
In-the-Money, expire worthless on a pro rata basis for each Warrantholder as the
result of which the number of outstanding Warrants held by each Warrantholder is
reduced proportionately so that the amount of Underlying Securities callable by
the exercise of Call Warrants equals the amount of Underlying Securities still
owned by the Trustee on behalf of the Trust.
(e) The Call Warrants will become immediately exercisable upon the
occurrence of an SEC Reporting Failure (whether such SEC Reporting Failure
occurs before or after September 29, 2011) and, if the Call Warrants are (i)
In-the-Money or At-the-Money, shall be deemed to be exercised without further
action by the Warrantholders and cash settled concurrently with the distribution
to Certificateholders, as provided in Section 10(j) of the Trust Agreement, or
(ii) not In-the-Money or At-the-Money, to the extent the Warrantholders fail to
exercise their Call Warrants, shall expire worthless.
(f) In the event that the Trustee receives money in respect of the
Underlying Securities as a result of a Payment Default on, or an Acceleration
of, the Underlying Securities, the Call Warrants, if (i) In-the-Money, shall be
deemed to be exercised without further action by the Warrantholders and cash
settled concurrently with the distribution to Certificateholders, as provided in
Section 10(c) of the Trust Agreement, or (ii) not In-the-Money, shall expire
worthless.
Section I.2 Transfer of Underlying Securities. As soon as practicable
after each surrender of this Call Warrant, in whole or in part, and no later
than 12:00 p.m. (New York City time) on the Warrant Exercise Date and upon
satisfaction of all other requirements described in this Call Warrant, the
Warrant Agent shall instruct the Trustee to cause Underlying Securities
proportionate to the number of Warrants being exercised hereunder to be
registered on the book-entry system of the related depositary in the registered
name or names furnished by the holder, and, in case such exercise is in part
only, a new Call Warrant of like tenor, representing the remaining outstanding
Warrants of the holder, shall be delivered by the Warrant Agent to the holder
hereof. The Trustee shall cause the delivery of such portion of the Underlying
Securities to the holder or its nominee no later than 1:00 p.m. (New York City
time) on the applicable Warrant Exercise Date in accordance with Section 8(c) of
the Trust Agreement.
Section I.3 Cancellation and Destruction of Call Warrant. All Call
Warrants surrendered to the Warrant Agent for the purpose of exercise (in whole
or in part) pursuant to Section I.1 and actually exercised, or for the purpose
of transfer or exchange pursuant to Article III, shall be cancelled by the
Warrant Agent, and no Call Warrant shall be issued in lieu thereof (other than
that reflecting any such transfer or exchange). The Warrant Agent shall destroy
all cancelled Call Warrants.
D-3
Section I.4 No Rights as Holder of Underlying Securities Conferred by
Warrants. Prior to the exercise hereof, this Call Warrant shall not entitle the
holder hereof to any of the rights of a holder of the Underlying Securities,
including, without limitation, the right to receive the payment of any amount on
or in respect of the Underlying Securities or to enforce any of the covenants of
the Trust Agreement.
Article II
Restrictions on Transfer
Section II.1 Restrictive Legends. Except as otherwise permitted by this
Article II, each Call Warrant (including each Call Warrant issued upon the
transfer of any Call Warrant) shall be issued with a legend in substantially the
following form:
"This Call Warrant has not been, and the Warrants represented hereby have
not been, registered under the Securities Act of 1933, as amended, and may not
be transferred, sold or otherwise disposed of except while a registration under
such Act is in effect or pursuant to an exemption therefrom under such Act. This
Call Warrant and any Warrant represented hereby may be transferred only in
compliance with the conditions specified in this Call Warrant and may not be
transferred to Citigroup Global Markets Inc. or Structured Products Corp."
Section II.2 Notice of Proposed Transfer; Opinions of Counsel. Prior to
any transfer of any Call Warrant or portion thereof, the holder hereof will give
five (5) Business Days (or such lesser period acceptable to the Warrant Agent)
prior written notice to the Warrant Agent of such holder's intention to effect
such transfer and to comply in all other respects with this Section II.2. Each
transfer of a portion of a Call Warrant must be for a whole number of Warrants.
(a) If such transfer of Call Warrants is being made pursuant to Rule 144A
under the Securities Act, as a condition precedent to the proposed transfer, the
prospective transferee must certify that it is a "qualified institutional buyer"
as such term is defined in Rule 144A under the Securities Act; and
(b) If such transfer of Call Warrants is not being made pursuant to Rule
144A, each notice of a proposed transfer (i) shall describe the manner and
circumstances of the proposed transfer in sufficient detail to enable counsel
for the holder to render the opinions referred to below, and (ii) shall
designate counsel for the holder giving such notice. The holder giving such
notice will submit a copy thereof to the counsel designated in such notice. If
(A) in the opinion of such counsel for the holder the proposed transfer may be
effected without registration of such Call Warrant under the Securities Act
(such opinion stating the basis for such determination) and (B) such opinion is
in form and substance reasonably satisfactory to the Trustor and the Warrant
Agent, such holder shall thereupon be entitled to transfer such Call Warrant in
accordance with the terms of the notice delivered by such holder to the Warrant
Agent. No such opinion of counsel shall be required in the event the transfer is
being made to a "qualified institutional buyer" as defined in Rule 144A under
the Securities Act as contemplated in clause (a) of this Section II.2.
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Each instrument representing such Call Warrant or portion thereof issued
upon or in connection with such transfer shall bear the restrictive legend
required by Section II.1, unless the Warrant Agent shall have received an
opinion of counsel reasonably satisfactory to the Warrant Agent and the Trustor
that such legend is no longer required to ensure compliance with the Securities
Act.
Article III
Registration and Transfer of Call Warrants, etc.
Section III.1 Warrant Register; Ownership of Call Warrants. The Warrant
Agent will keep a register in which the Warrant Agent will provide for the
registration of Call Warrants and the registration of transfers of Call Warrants
representing whole numbers of Warrants. The Trustee and the Warrant Agent may
treat the Person in whose name any Call Warrant is registered on such register
as the owner thereof for all purposes, and the Trustee and the Warrant Agent
shall not be affected by any notice to the contrary.
Section III.2 Transfer and Exchange of Call Warrants. Upon surrender of
any Call Warrant for registration of transfer or for exchange to the Warrant
Agent, the Warrant Agent shall (subject to compliance with Article II) execute
and deliver, and cause the Trustee, on behalf of the Trust, to execute and
deliver, in exchange therefor, a new Call Warrant of like tenor and evidencing a
like whole number of Warrants, in the name of such holder or as such holder
(upon payment by such holder of any applicable transfer taxes or government
charges) may direct.
Section III.3 Replacement of Call Warrants. Upon receipt of evidence
reasonably satisfactory to the Warrant Agent of the loss, theft, destruction or
mutilation of any Call Warrant and, in the case of any such loss, theft or
destruction of any Call Warrant, upon delivery of an indemnity bond in such
reasonable amount as the Warrant Agent may determine, or, in the case of any
such mutilation, upon the surrender of such Call Warrant for cancellation to the
Warrant Agent, the Warrant Agent shall execute and deliver, and cause the
Trustee, on behalf of the Trust, to execute and deliver, in lieu thereof, a new
Call Warrant of like tenor bearing a number not contemporaneously outstanding.
Section III.4 Execution and Delivery of Call Warrants by Trustee. The
Trustee, on behalf of the Trust, hereby agrees (subject to compliance with
Article II) to execute and deliver such new Call Warrants issued in accordance
with Section I.2 or this Article III as the Warrant Agent shall request in
accordance herewith.
Article IV
Definitions
As used herein, unless the context otherwise requires, the following terms
have the following respective meanings:
D-5
"Bankruptcy Event": Means the Underlying Issuer (1) is dissolved (other
than pursuant to a consolidation, amalgamation or merger); (2) admits in writing
its inability generally to pay its debts as they become due; (3) makes a general
assignment, arrangement or composition with or for the benefit of its creditors;
(4) institutes or has instituted against it a proceeding seeking a judgment of
insolvency or bankruptcy or any other relief under any bankruptcy or insolvency
law or other similar law affecting creditors' rights, or a petition is presented
for its winding up or liquidation, and, in the case of any such proceeding or
petition instituted or presented against it, (5) has a resolution passed for its
winding up, official management or liquidation (other than pursuant to a
consolidation, amalgamation or merger); (6) seeks or becomes subject to the
appointment of an administrator, provisional liquidator, conservator, receiver,
trustee, custodian or other similar official for it or for all or substantially
all its assets; (7) has a secured party take possession of all or substantially
all its assets or has a distress, execution, attachment, sequestration or other
legal process levied, enforced or sued on or against all or substantially all
its assets; or (8) causes or is subject to any event with respect to it which,
under the applicable laws of any jurisdiction, has an analogous effect to any of
the events specified in clauses (1) to (7) (inclusive).
"Business Day": Shall have the meaning given to such term in the Trust
Agreement.
"Call Warrant": Means this instrument.
"Closing Date": Shall have the meaning given such term in the Trust
Agreement.
"I/O Fixed Payment": Shall have the meaning given to such term in the
Trust Agreement.
"I/O Payment Amount": Shall have the meaning given to such term in the
Trust Agreement.
"Person": Means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Rating Agency": Means each of ▇▇▇▇▇'▇ Investors Service, Inc.
("Moody's"), and Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. ("S&P"), and any successor to either of the
foregoing. References to "the Rating Agency" in the this Call Warrant shall be
deemed to be each such credit rating agency.
"Responsible Officer": Shall have the meaning given to such term in the
Trust Agreement.
"Securities Act": Means the Securities Act of 1933, or any similar federal
statute, and the rules and regulations of the Commission thereunder, all as the
same shall be in effect at the time.
"SEC Reporting Failure": Shall have the meaning given to such term in the
Trust Agreement.
D-6
"Trust": Shall have the meaning given to such term in the introduction to
this Call Warrant.
"Trust Agreement": Means the Base Trust Agreement, dated as of September
19, 2006, between the Trustor and the Trustee, as supplemented by the CorTS(R)
Supplement 2006-1, dated as of September 29, 2006, between the Trustor and the
Trustee, incorporating by reference the definitions and assumptions thereto, as
the same may be amended or modified from time to time.
"Trustee": Shall have the meaning given to such term in the introduction
to this Call Warrant, or any successor thereto under the Trust Agreement.
"Trustor": Shall have the meaning given to such term in the introduction
to this Call Warrant, or any successor thereto under the Trust Agreement.
"Trustor Order": Shall have the meaning given to such term in the Trust
Agreement.
"Warrant": Means the right to purchase, on a pro rata basis, an aggregate
of $1,000 in par amount of the Underlying Securities.
"Warrant Agent": Means U.S. Bank Trust National Association, a national
banking association, in its capacity as warrant agent hereunder, or any
successor thereto hereunder.
"Warrant Exercise Date": Means any Business Day on or after the earlier of
(i) September 29, 2011, (ii) the date on which an SEC Reporting Failure occurs,
(iii) the commencement of a publicly announced tender offer for all or a portion
of the Underlying Securities by the Underlying Issuer or any of its affiliates
(but on or before the date such tender offer expires or is consummated), or (iv)
the occurrence of a Bankruptcy Event.
"Warrant Exercise Notice Date" Shall have the meaning given to such term
in Section I.1(a) of this Call Warrant.
"Warrant Exercise Purchase Price": Means an amount paid by the
Warrantholder on each Warrant Exercise Notice Date equal to the sum of (i) the
principal amount of the Underlying Securities being purchased pursuant to the
exercise of the Call Warrants plus accrued and unpaid interest thereon to and
including the Warrant Exercise Date, and (ii) the I/O Payment Amount, and (iii)
in the case of a Warrant Exercise Date referred to in clause (iii) of the
definition thereof, an amount equal to 4% of the principal amount of the
Underlying Securities being purchased pursuant to the exercise of the Call
Warrants.
Article V
Warrant Agent
Section V.1 Limitation on Liability. The Warrant Agent shall be protected
and shall incur no liability for or in respect of any action taken, suffered or
omitted by it in connection with its administration of the Call Warrants in
reliance upon any instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement or other paper or document in good faith believed by it to be genuine
and to be signed, executed and, where necessary, verified and acknowledged, by
the proper Person or Persons.
D-7
Section V.2 Duties of Warrant Agent. The Warrant Agent undertakes only the
specific duties and obligations imposed hereunder upon the following terms and
conditions, by all of which the Trustor, the Trust, the Trustee and each holder
of a Call Warrant shall be bound:
(a) The Warrant Agent may consult with legal counsel (who may be legal
counsel for the Trustor), and the opinion of such counsel shall be full and
complete authorization and protection to the Warrant Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion,
provided the Warrant Agent shall have exercised reasonable care in the selection
by it of such counsel.
(b) Whenever in the performance of its duties hereunder, the Warrant Agent
shall deem it necessary or desirable that any fact or matter be proved or
established by the Trustor or the Trustee prior to taking or suffering any
action hereunder, such fact or matter may be deemed to be conclusively proved
and established by a Trustor Order or a certificate signed by a Responsible
Officer of the Trustee and delivered to the Warrant Agent; and such certificate
shall be full authorization to the Warrant Agent for any action taken or
suffered in good faith by it hereunder in reliance upon such certificate.
(c) The Warrant Agent shall be liable hereunder only for its own gross
negligence, willful misconduct or bad faith.
(d) The Warrant Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained herein or be required to verify the
same.
(e) The Warrant Agent shall not have any responsibility in respect of and
makes no representation as to the validity of this Call Warrant or the execution
and delivery hereof (except the due execution hereof by the Warrant Agent); nor
shall it be responsible for any breach by the Trust of any covenant or condition
contained in this Call Warrant; nor shall it by any act hereunder be deemed to
make any representation or warranty as to the Underlying Securities to be
purchased hereunder.
(f) The Warrant Agent is ▇▇▇▇▇▇ authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the Chief Executive Officer, Chief Financial Officer,
Chief Operating Officer, President, a Vice President, its Treasurer, an
Assistant Treasurer, its Secretary or an Assistant Secretary of the Trustor, and
any Responsible Officer of the Trustee, and to apply to such officers for advice
or instructions in connection with its duties, and it shall not be liable for
any action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer.
(g) The Warrant Agent and any shareholder, director, officer or employee
of the Warrant Agent may buy, sell or deal in any of the Call Warrants or other
securities of the Trust or otherwise act as fully and freely as though it were
not Warrant Agent hereunder, so long as such persons do so in full compliance
with all applicable laws. Nothing herein shall preclude the Warrant Agent from
acting in any other capacity for the Trust, the Trustor or for any other legal
entity.
D-8
(h) The Warrant Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys or agents.
(i) The Warrant Agent shall act solely as the agent of the Warrantholders
hereunder. The Warrant Agent shall not be liable except for the failure to
perform such duties as are specifically set forth herein, and no implied
covenants or obligations shall be read into this Call Warrant against the
Warrant Agent, whose duties shall be determined solely by the express provisions
hereof. The Warrant Agent shall not be deemed to be a fiduciary.
(j) The Warrant Agent shall not have any duty to calculate or determine
any adjustments with respect either to the Warrant Exercise Purchase Price or to
the kind and amount of property receivable by holders of Call Warrants upon the
exercise thereof.
(k) The Warrant Agent shall not be responsible for any failure on the part
of the Trustee to comply with any of its covenants and obligations contained
herein.
(l) The Warrant Agent shall not be under any obligation or duty to
institute, appear in or defend any action, suit or legal proceeding in respect
hereof, unless first indemnified to its satisfaction, but this provision shall
not affect the power of the Warrant Agent to take such action as the Warrant
Agent may consider proper, whether with or without such indemnity. The Warrant
Agent shall promptly notify the Trustor and the Trustee in writing of any claim
made or action, suit or proceeding instituted against it arising out of or in
connection with this Call Warrant.
(m) The Trustee will perform, execute, acknowledge and deliver or cause to
be performed, executed, acknowledged and delivered all such further acts,
instruments and assurances as may be required by the Warrant Agent in order to
enable it to carry out or perform its duties hereunder.
Section V.3 Change of Warrant Agent. The Warrant Agent may resign and be
discharged from its duties hereunder upon thirty (30) days notice in writing
mailed to the Trustor and the Trustee by registered or certified mail return
receipt requested, and to the Warrantholders by first-class mail at the expense
of the Trustor; provided that no such resignation or discharge shall become
effective until a successor Warrant Agent shall have been appointed hereunder.
The Trustor may remove the Warrant Agent or any successor Warrant Agent upon
thirty (30) days notice in writing, mailed to the Warrant Agent or successor
Warrant Agent, as the case may be, and upon fifteen (15) days notice to the
Warrantholders by first-class mail, and absent the objection of the holders of a
majority of the Warrants outstanding, within such fifteen (15) day period;
provided further that no such removal shall become effective until a successor
Warrant Agent shall have been appointed hereunder. If the Warrant Agent shall
resign or be removed or shall otherwise become incapable of acting, the Trustor
shall promptly appoint a successor to the Warrant Agent, which may be designated
as an interim Warrant Agent. If an interim Warrant Agent is designated, the
Trustor shall then appoint a permanent successor to the Warrant Agent, which may
be the interim Warrant Agent. If the Trustor shall fail to make such appointment
of a permanent successor within a period of thirty (30) days after such removal
or within sixty (60) days after notification in writing of such resignation or
incapacity by the resigning or incapacitated Warrant Agent or by the holder of a
Call Warrant, then the Warrant Agent or registered holder of any Warrant may
apply to any court of competent jurisdiction for the appointment of such a
successor. Any successor to the Warrant Agent appointed hereunder must be rated
in one of the four highest rating categories by the Rating Agencies. Any entity
which may be merged or consolidated with or which shall otherwise succeed to
substantially all of the trust or agency business of the Warrant Agent shall be
deemed to be the successor Warrant Agent without any further action.
D-9
Article VI
Miscellaneous
Section VI.1 Remedies. The remedies at law of the holder of this Call
Warrant in the event of any default or threatened default by the Warrant Agent
in the performance of or compliance with any of the terms of this Call Warrant
are not and will not be adequate and, to the fullest extent permitted by law,
such terms may be specifically enforced by a decree for the specific performance
of any agreement contained herein or by an injunction against a violation of any
of the terms hereof or otherwise.
Section VI.2 Limitation on Liabilities of Holder. Nothing contained in
this Call Warrant shall be construed as imposing any obligation on the holder
hereof to purchase any of the Underlying Securities except in accordance with
the terms hereof.
Section VI.3 Notices. Except as otherwise expressly required or permitted
pursuant to any other provision of this Call Warrant, all notices and other
communications under this Call Warrant shall be in writing and shall be
delivered, or mailed by registered or certified mail, return receipt requested,
by a nationally recognized overnight courier, postage prepaid, addressed (a) if
to any holder of any Call Warrant, at the registered address of such holder as
set forth in the register kept by the Warrant Agent, or (b) if to the Warrant
Agent, to ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Corporate Trust or to such other address notice of which the Warrant Agent shall
have given to the holder hereof and the Trustee or (c) if to the Trust or the
Trustee, to the Corporate Trust Office (as set forth in the Trust Agreement);
provided that the exercise of any Call Warrant shall be effective in the manner
provided in Article I.
Section VI.4 Amendment. (a) This Call Warrant may be amended from time to
time by the Trustor, the Trustee and the Warrant Agent without the consent of
the holder hereof, upon receipt of an opinion of counsel satisfactory to the
Warrant Agent that the provisions hereof have been satisfied and that such
amendment would not alter the status of the Trust as a grantor trust under the
Code, for any of the following purposes: (i) to cure any ambiguity or to correct
or supplement any provision herein which may be defective or inconsistent with
any other provision herein or to provide for any other terms or modify any other
provisions with respect to matters or questions arising under this Call Warrant
which shall not adversely affect in any material respect the interests of the
holder hereof or any holder of a Certificate or (ii) to evidence and provide for
the acceptance of appointment hereunder of a Warrant Agent other than U.S. Bank
Trust National Association.
D-10
(b) Without limiting the generality of the foregoing, this Call Warrant
may also be modified or amended from time to time by the Trustor, the Trustee
and the Warrant Agent with the consent of the holders of 66-2/3% of the
Warrants, upon receipt of an opinion of counsel satisfactory to the Warrant
Agent that the provisions hereof (including, without limitation, the following
proviso) have been satisfied, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Call Warrant
or of modifying in any manner the rights of the holders of this Call Warrant;
provided, however, that no such amendment shall (i) adversely affect in any
material respect the interests of holders of Certificates without the consent of
the holders of Certificates evidencing not less than the Required
Percentage-Amendment of the aggregate Voting Rights of such affected
Certificates (as such terms are defined in the Trust Agreement) and without
written confirmation from the Rating Agencies that such amendment will not
result in a downgrading or withdrawal of its rating of the CorTS; (ii) alter the
dates on which Warrants are exercisable or the amounts payable upon exercise of
a Warrant without the consent of the holders of CorTS evidencing not less than
100% of the aggregate Voting Rights of such affected CorTS and the holders of
100% of the affected Warrants or (iii) reduce the percentage of aggregate Voting
Rights required by (i) or (ii) without the consent of the holders of all such
affected CorTS. Notwithstanding any other provision of this Call Warrant, this
Section VI.4(b) shall not be amended without the consent of the holders of 100%
of the affected Warrants.
(c) Promptly after the execution of any such amendment or modification,
the Warrant Agent shall furnish a copy of such amendment or modification to each
holder of a Call Warrant, to each holder of a Certificate and to the Rating
Agencies. It shall not be necessary for the consent of holders of Warrants or
Certificates under this Section to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof shall be subject to such reasonable
regulations as the Warrant Agent may prescribe.
Section VI.5 Expiration. The right to exercise this Call Warrant shall
expire on the earliest to occur of (a) the cancellation hereof, (b) the
termination of the Trust Agreement or (c) the liquidation, disposition, or
maturity of all of the Underlying Securities.
Section VI.6 Descriptive Headings. The headings in this Call Warrant are
for purposes of reference only and shall not limit or otherwise affect the
meaning hereof.
Section VI.7 GOVERNING LAW. THIS CALL WARRANT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY,
THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF
LAWS.
Section VI.8 Judicial Proceedings; Waiver of Jury. Any judicial proceeding
brought against the Trust, the Trustee or the Warrant Agent with respect to this
Call Warrant may be brought in any court of competent jurisdiction in the County
of New York, State of New York or of the United States of America for the
Southern District of New York and, by execution and delivery of this Call
Warrant, the Trustee on behalf of the Trust and the Warrant Agent (a) accept,
generally and unconditionally, the nonexclusive jurisdiction of such courts and
any related appellate court, and irrevocably agree that the Trust, the Trustee
and the Warrant Agent shall be bound by any judgment rendered thereby in
connection with this Call Warrant, subject to any rights of appeal, and (b)
irrevocably waive any objection that the Trust, the Trustee or the Warrant Agent
may now or hereafter have as to the venue of any such suit, action or proceeding
brought in such a court or that such court is an inconvenient forum.
D-11
Section VI.9 Nonpetition Covenant; No Recourse. Each of (i) the holder of
this Call Warrant by its acceptance hereof, and (ii) the Warrant Agent agrees,
that it shall not (and, in the case of the holder, that it shall not direct the
Warrant Agent to), until the date which is one year and one day after the
payment in full of the Certificates and all other securities issued by the
Trust, the Trustor or entities formed, established or settled by the Trustor,
acquiesce, petition or otherwise invoke or cause the Trust, the Trustor, or any
such other entity to invoke the process of the United States of America, any
State or other political subdivision thereof or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government for the purpose of commencing or sustaining a case by or against
the Trust, the Trustor or any such other entity under a federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Trust, the Trustor or any such other entity or all or any part of the property
or assets of Trust, the Trustor or any such other entity or ordering the winding
up or liquidation of the affairs of the Trust, the Trustor or any such other
entity.
Section VI.10 Amendments to the Trust Agreement. The Trustee hereby agrees
not to consent to any amendments to the Trust Agreement which will adversely
affect the rights of the Warrantholders in a material manner without the consent
of the Warrantholders.
Section VI.11 Reporting Obligations. During any period in which the Trust
is not subject to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, the Trustee, on behalf of the Trust, shall promptly furnish to holders
of Call Warrants and prospective purchasers of Call Warrants designated by such
holders, upon request of such holders or prospective purchasers, the information
required to be delivered pursuant to Rule 144A(d)(4) of the Securities Act of
1933, as amended, to permit compliance with Rule 144A in connection with the
resale of Call Warrants; provided, however, that the Trust shall not (a) be
required to provide audited financial statements of the Trust or (b) be required
to furnish Rule 144A Information in connection with any request made on or after
the date that is two years from the later of (i) the date such Call Warrant (or
any predecessor Call Warrant) was acquired from the Trust or (ii) the date such
Call Warrant (or any predecessor Call Warrant) was last acquired from an
"affiliate" of the Trust within the meaning of Rule 144. The Trustor shall
advise and reasonably cooperate with the Trustee as to what information, if any,
is required by Rule 144A(d)(4) under the Securities Act and the Trustee shall be
entitled to rely on such advice of the Trustor.
D-12
Each of (i) the holder of this Call Warrant, by its acceptance hereof, and
(ii) the Warrant Agent agrees, that it shall not have any recourse to the
Underlying Securities or against the Trust.
U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Trustee and Authenticating Agent
By:
------------------------------------------
Authorized Signatory
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Warrant Agent
By:
------------------------------------------
Authorized Signatory
D-13
FORM OF SUBSCRIPTION
[To be executed only upon exercise of Warrants]
To CorTS(R) Trust V For IBM Debentures
U.S. Bank Trust National Association, as Trustee
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust
The undersigned registered holder of the within Call Warrant, having
previously given notice thereof in accordance with the terms of the Call
Warrant, hereby irrevocably exercises Warrant(s) for, and purchases pursuant
thereto, the Underlying Securities receivable upon such exercise, and herewith
makes payment of the Warrant Exercise Purchase Price for a principal amount of
$1,000 of Underlying Securities per Warrant therefor, and requests that such
Underlying Securities be transferred to __________ [insert information required
for transfer of Underlying Securities]. In connection therewith, the undersigned
hereby certifies that it is solvent as of the date hereof, as required by
Section I.1 of the Call Warrant.
Dated:
(Signature must conform in all respects to name of holder as specified on
the face of Warrant)
(Street Address)
(City)(State)(Zip Code)
D-14
FORM OF ASSIGNMENT
[To be executed only upon transfer of Call Warrant]
For value received, the undersigned registered holder of the within Call
Warrant hereby sells, assigns and transfers unto __________ the __________
Warrant(s) [Must be whole number] to purchase Underlying Securities to which
such Call Warrant relates, and appoints __________ attorney to make such
transfer on the books of the Warrant Agent maintained for such purpose, with
full power of substitution in the premises.
Dated:
(Signature must conform in all respects to name of holder as specified on
the face of Warrant)
(Street Address)
(City)(State)(Zip Code)
Signed in the presence of:
D-15
Schedule 1
To the Call Warrant
$_________ aggregate principal amount of 7.125% Debentures, due December
1, 2096 issued by International Business Machines Corporation.
D-16
EXHIBIT E
TERMS OF THE I/O CERTIFICATES AS OF CLOSING DATE
Aggregate Notional Amount of I/O Certificates: $41,200,000
Authorized Denomination: $100,000 and integral
multiples of $1,000 in
excess thereof
Rating: A+/A1
Rating Agencies: Standard & Poor's Ratings
Services, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc. and ▇▇▇▇▇'▇ Investors
Service, Inc.
Closing Date: September 29, 2006
Distribution Dates for
the I/O Certificates: As applicable, any
Scheduled Distribution
Date or any Special
Distribution Date.
Interest Rate: 0.725% per annum
I/O Maturity Date: December 1, 2096
Record Date: With respect to any
Distribution Date, the day
immediately preceding such
Distribution Date.
Trustee's Fees: The Trustee's fees shall be
payable by the Trustor
pursuant to a separate fee
agreement between the
Trustee and the Trustor.
Initial Certificate Registrar: U.S. Bank Trust National
Association
Corporate Trust Office: U.S. Bank Trust National
Association
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust
Department, Regarding
CorTS(R) Trust V For IBM
Debentures
E-1
EXHIBIT F
FORM OF I/O CERTIFICATE
THIS I/O CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND HAS NOT
BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY
REGULATORY AUTHORITY OF ANY STATE. THIS I/O CERTIFICATE HAS BEEN OFFERED AND
SOLD PRIVATELY. AS A RESULT, THE I/O CERTIFICATE IS SUBJECT TO RESTRICTIONS ON
TRANSFER. PERSONS THAT ARE (A) U.S. PERSONS (AS DEFINED IN REGULATION S UNDER
THE SECURITIES ACT) OR ACQUIRING ANY I/O CERTIFICATE IN THE UNITED STATES MUST
BE QUALIFIED INSTITUTIONAL BUYERS AS DEFINED IN RULE 144A PROMULGATED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED AND (B) NON-U.S. PERSONS OR ACQUIRING THEIR
I/O CERTIFICATES OUTSIDE THE UNITED STATES MUST DO SO IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT.
THIS I/O CERTIFICATE REPRESENTS AN UNDIVIDED BENEFICIAL INTEREST IN THE TRUST
AND DOES NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN, AND IS NOT GUARANTEED
BY THE TRUSTOR OR THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER
THIS I/O CERTIFICATE NOR THE TRUST ASSETS ARE INSURED OR GUARANTEED BY ANY
GOVERNMENTAL AGENCY OR ANY OTHER PERSON.
UNLESS THIS I/O CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC") OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY I/O 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.
CERTIFICATE NUMBER
CUSIP: 12618Y AA 2 Notional Amount
CORTS(R)-I/O CERTIFICATES
evidencing an undivided beneficial interest in the Trust, as defined
below, the assets of which include 7.125% Debentures, due December 1, 2096,
issued by International Business Machines Corporation.
F-1
This I/O Certificate does not represent an interest in or obligation of
the Trustor or any of its affiliates.
THIS CERTIFIES THAT Cede & Co. is the registered owner of a nonassessable,
fully-paid, fractional undivided beneficial interest in CorTS(R) Trust V For IBM
Debentures (the "Trust") formed by Structured Products Corp., as trustor (the
"Trustor").
The Trust was created pursuant to a Base Trust Agreement, dated as of
September 19, 2006 (as amended and supplemented, the "Agreement"), between the
Trustor and U.S. Bank Trust National Association, a national banking
association, not in its individual capacity but solely as Trustee (the
"Trustee"), as supplemented by the CorTS(R) Supplement 2006-1, dated as of
September 29, 2006 (the "Series Supplement" and, together with the Agreement,
the "Trust Agreement"), between the Trustor and the Trustee. This I/O
Certificate does not purport to summarize the Trust Agreement and reference is
hereby made to the Trust Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and obligations of the Trustee with respect hereto. A
copy of the Trust Agreement may be obtained from the Trustee by written request
sent to the Corporate Trust Office. Capitalized terms used but not defined
herein have the meanings assigned to them in the Trust Agreement.
This I/O Certificate is one of the duly authorized Certificates designated
as "CorTS(R)-I/O Certificates" (herein called the "I/O Certificate" or "I/O
Certificates"). This Certificate is issued under and is subject to the terms,
provisions and conditions of the Trust Agreement, to which Trust Agreement the
Holder of this I/O Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound. The assets of the Trust include the Underlying
Securities and all proceeds of the Underlying Securities. Additional Underlying
Securities may be sold to the Trustee on behalf of the Trust and additional I/O
Certificates may be authenticated and delivered from time to time as provided in
the Trust Agreement, which additional I/O Certificates shall rank pari passu
with all other I/O Certificates issued in accordance with the Series Supplement.
Under the Trust Agreement, there shall be distributed on the dates
specified in the Trust Agreement (a "Distribution Date"), to the person in whose
name this I/O Certificate is registered at the close of business on the related
Record Date, such I/O Certificateholder's fractional undivided beneficial
interest in the amount of interest distributions of the Trust Assets to be
distributed to I/O Certificateholders on such Distribution Date. The I/O
Certificates will mature on December 1, 2096.
The distributions in respect of this I/O 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 as set forth in the Series
Supplement.
The Underlying Securities owned by the Trustee on behalf of the Trust are
subject to rights of the Warrantholders, as provided for in the Series
Supplement, and each Certificateholder, by accepting its I/O Certificate,
acknowledges such rights and the possibility of an early redemption of the I/O
Certificates in accordance with the terms of the Series Supplement.
F-2
It is the intent of the Trustor, the CorTS Certificateholders and the I/O
Certificateholders that the Trust will be classified as a grantor trust under
subpart E, Part I of subchapter J of the Internal Revenue Code of 1986, as
amended, and failing that, as a partnership (other than a publicly traded
partnership treated as a corporation). In the event that the Trust is
characterized by appropriate tax authorities as a partnership for federal income
tax purposes, each Certificateholder, by its acceptance of its Certificate,
agrees to report its respective share of the items of income, deductions, and
credits of the Trust on its respective returns (making such elections as to
individual items as may be appropriate) in accordance with Treasury Regulations
Section 1.761-2(b) (i.e., in a manner consistent with the exclusion of the Trust
from partnership tax accounting). In mutual consideration for each
Certificateholder's purchase of a Certificate, each such Certificateholder is
deemed to agree not to delegate (for a period of more than one year) authority
to purchase, sell or exchange its Certificate to any person. Except as otherwise
required by appropriate taxing authorities, the Trustor and the Trustee, by
executing the Trust Agreement, and each I/O Certificateholder, by acceptance of
a I/O Certificate, agrees to take no action inconsistent with such intentions
and the provisions of the Trust Agreement shall be interpreted to further these
intentions of the parties.
Each I/O Certificateholder, by its acceptance of an Certificate, covenants
and agrees that such I/O Certificateholder shall not, prior to the date which is
one year and one day after the termination of the Trust Agreement, acquiesce,
petition or otherwise invoke or cause the Trustor or the Trust to invoke the
process of any court or governmental authority for the purpose of commencing or
sustaining a case against the Trustor or the Trust under any federal or state
bankruptcy, insolvency, reorganization or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Trustor or the Trust or any substantial part of its property, or ordering
the winding up or liquidation of the affairs of the Trustor or the Trust.
The Trust Agreement permits the amendment thereof, in certain
circumstances, without the consent of the Holders of any of the I/O
Certificates.
Unless the certificate of authentication hereon shall have been executed
by an authorized officer of the Trustee by manual signature, this I/O
Certificate shall not entitle the Holder hereof to any benefit under the Trust
Agreement or be valid for any purpose.
A copy of the Trust Agreement is available upon request and all of its
terms and conditions are hereby incorporated by reference and made a part
hereof.
THIS I/O CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
F-3
IN WITNESS WHEREOF, the Trustee has caused this I/O Certificate to be duly
executed by its manual or facsimile signature.
U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Trustee and Authenticating Agent
By:
--------------------------------------
Authorized Signatory
F-4
EXHIBIT G
ALLOCATION PERCENTAGES
Scheduled CorTS I/O
Allocation Date Allocation Percentage Allocation Percentage
December 1, 2006 89.86% 10.14%
June 1, 2007 89.86% 10.14%
December 1, 2007 89.86% 10.14%
June 1, 2008 89.86% 10.14%
December 1, 2008 89.86% 10.14%
June 1, 2009 89.86% 10.14%
December 1, 2009 89.86% 10.14%
June 1, 2010 89.86% 10.14%
December 1, 2010 89.87% 10.13%
June 1, 2011 89.87% 10.13%
December 1, 2011 89.87% 10.13%
June 1, 2012 89.87% 10.13%
December 1, 2012 89.87% 10.13%
June 1, 2013 89.87% 10.13%
December 1, 2013 89.87% 10.13%
June 1, 2014 89.88% 10.12%
December 1, 2014 89.88% 10.12%
June 1, 2015 89.88% 10.12%
December 1, 2015 89.88% 10.12%
June 1, 2016 89.88% 10.12%
December 1, 2016 89.88% 10.12%
June 1, 2017 89.89% 10.11%
December 1, 2017 89.89% 10.11%
June 1, 2018 89.89% 10.11%
December 1, 2018 89.89% 10.11%
June 1, 2019 89.89% 10.11%
December 1, 2019 89.90% 10.10%
June 1, 2020 89.90% 10.10%
December 1, 2020 89.90% 10.10%
June 1, 2021 89.90% 10.10%
December 1, 2021 89.91% 10.09%
June 1, 2022 89.91% 10.09%
December 1, 2022 89.91% 10.09%
June 1, 2023 89.91% 10.09%
December 1, 2023 89.92% 10.08%
June 1, 2024 89.92% 10.08%
December 1, 2024 89.92% 10.08%
June 1, 2025 89.93% 10.07%
December 1, 2025 89.93% 10.07%
June 1, 2026 89.93% 10.07%
December 1, 2026 89.94% 10.06%
G-1
June 1, 2027 89.94% 10.06%
December 1, 2027 89.94% 10.06%
June 1, 2028 89.95% 10.05%
December 1, 2028 89.95% 10.05%
June 1, 2029 89.95% 10.05%
December 1, 2029 89.96% 10.04%
June 1, 2030 89.96% 10.04%
December 1, 2030 89.97% 10.03%
June 1, 2031 89.97% 10.03%
December 1, 2031 89.98% 10.02%
June 1, 2032 89.98% 10.02%
December 1, 2032 89.99% 10.01%
June 1, 2033 89.99% 10.01%
December 1, 2033 90.00% 10.00%
June 1, 2034 90.00% 10.00%
December 1, 2034 90.01% 9.99%
June 1, 2035 90.01% 9.99%
December 1, 2035 90.02% 9.98%
June 1, 2036 90.03% 9.97%
December 1, 2036 90.03% 9.97%
June 1, 2037 90.04% 9.96%
December 1, 2037 90.05% 9.95%
June 1, 2038 90.05% 9.95%
December 1, 2038 90.06% 9.94%
June 1, 2039 90.07% 9.93%
December 1, 2039 90.08% 9.92%
June 1, 2040 90.09% 9.91%
December 1, 2040 90.09% 9.91%
June 1, 2041 90.10% 9.90%
December 1, 2041 90.11% 9.89%
June 1, 2042 90.12% 9.88%
December 1, 2042 90.13% 9.87%
June 1, 2043 90.14% 9.86%
December 1, 2043 90.15% 9.85%
June 1, 2044 90.16% 9.84%
December 1, 2044 90.17% 9.83%
June 1, 2045 90.18% 9.82%
December 1, 2045 90.19% 9.81%
June 1, 2046 90.21% 9.79%
December 1, 2046 90.22% 9.78%
June 1, 2047 90.23% 9.77%
December 1, 2047 90.24% 9.76%
June 1, 2048 90.26% 9.74%
December 1, 2048 90.27% 9.73%
June 1, 2049 90.29% 9.71%
December 1, 2049 90.30% 9.70%
G-2
June 1, 2050 90.32% 9.68%
December 1, 2050 90.33% 9.67%
June 1, 2051 90.35% 9.65%
December 1, 2051 90.36% 9.64%
June 1, 2052 90.38% 9.62%
December 1, 2052 90.40% 9.60%
June 1, 2053 90.42% 9.58%
December 1, 2053 90.44% 9.56%
June 1, 2054 90.46% 9.54%
December 1, 2054 90.48% 9.52%
June 1, 2055 90.50% 9.50%
December 1, 2055 90.52% 9.48%
June 1, 2056 90.54% 9.46%
December 1, 2056 90.57% 9.43%
June 1, 2057 90.59% 9.41%
December 1, 2057 90.61% 9.39%
June 1, 2058 90.64% 9.36%
December 1, 2058 90.67% 9.33%
June 1, 2059 90.69% 9.31%
December 1, 2059 90.72% 9.28%
June 1, 2060 90.75% 9.25%
December 1, 2060 90.78% 9.22%
June 1, 2061 90.81% 9.19%
December 1, 2061 90.84% 9.16%
June 1, 2062 90.88% 9.12%
December 1, 2062 90.91% 9.09%
June 1, 2063 90.95% 9.05%
December 1, 2063 90.98% 9.02%
June 1, 2064 91.02% 8.98%
December 1, 2064 91.06% 8.94%
June 1, 2065 91.10% 8.90%
December 1, 2065 91.14% 8.86%
June 1, 2066 91.18% 8.82%
December 1, 2066 91.23% 8.77%
June 1, 2067 91.27% 8.73%
December 1, 2067 91.32% 8.68%
June 1, 2068 91.37% 8.63%
December 1, 2068 91.42% 8.58%
June 1, 2069 91.47% 8.53%
December 1, 2069 91.52% 8.48%
June 1, 2070 91.58% 8.42%
December 1, 2070 91.64% 8.36%
June 1, 2071 91.70% 8.30%
December 1, 2071 91.76% 8.24%
June 1, 2072 91.82% 8.18%
December 1, 2072 91.89% 8.11%
G-3
June 1, 2073 91.95% 8.05%
December 1, 2073 92.02% 7.98%
June 1, 2074 92.10% 7.90%
December 1, 2074 92.17% 7.83%
June 1, 2075 92.25% 7.75%
December 1, 2075 92.33% 7.67%
June 1, 2076 92.41% 7.59%
December 1, 2076 92.49% 7.51%
June 1, 2077 92.58% 7.42%
December 1, 2077 92.67% 7.33%
June 1, 2078 92.77% 7.23%
December 1, 2078 92.86% 7.14%
June 1, 2079 92.97% 7.03%
December 1, 2079 93.07% 6.93%
June 1, 2080 93.18% 6.82%
December 1, 2080 93.29% 6.71%
June 1, 2081 93.40% 6.60%
December 1, 2081 93.52% 6.48%
June 1, 2082 93.65% 6.35%
December 1, 2082 93.77% 6.23%
June 1, 2083 93.91% 6.09%
December 1, 2083 94.04% 5.96%
June 1, 2084 94.19% 5.81%
December 1, 2084 94.33% 5.67%
June 1, 2085 94.48% 5.52%
December 1, 2085 94.64% 5.36%
June 1, 2086 94.80% 5.20%
December 1, 2086 94.97% 5.03%
June 1, 2087 95.15% 4.85%
December 1, 2087 95.33% 4.67%
June 1, 2088 95.51% 4.49%
December 1, 2088 95.71% 4.29%
June 1, 2089 95.91% 4.09%
December 1, 2089 96.12% 3.88%
June 1, 2090 96.33% 3.67%
December 1, 2090 96.56% 3.44%
June 1, 2091 96.79% 3.21%
December 1, 2091 97.03% 2.97%
June 1, 2092 97.28% 2.72%
December 1, 2092 97.54% 2.46%
June 1, 2093 97.81% 2.19%
December 1, 2093 98.09% 1.91%
June 1, 2094 98.38% 1.62%
December 1, 2094 98.68% 1.32%
June 1, 2095 98.99% 1.01%
December 1, 2095 99.31% 0.69%
June 1, 2096 99.65% 0.35%
December 1, 2096 100.00% 0.00%
G-4