<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 12, 1997
Elmwood Funding Limited
(Exact Name of Registrant as Specified in Charter)
Cayman Islands 1-12809 N/A
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Ident. No.)
P.O. Box 1984
Elizabethan Square
George Town, Grand Cayman
Cayman Islands, British West Indies
(Address of Principal Executive Offices)
Registrant's Telephone Number, including area code: (345) 949-8244
N/A
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. Other Events
On April 25, 1997 Elmwood Funding Limited ("Elmwood") transferred
$16,500,000 principal amount of 8.25% Notes due September 15, 2006 (the
"Underlying Securities") issued by E.I. du Pont de Nemours and Company (the
"Underlying Securities Issuer") to the Bond-backed Investment Certificates
Trust, Series 1997-Du Pont (the "Trust") established by Elmwood, which issued
Bond-backed Investment Certificates, Series 1997-Du Pont (the "Certificates")
pursuant to a Trust Agreement consisting of a Standard Terms for Trust
Agreements, dated as of March 14, 1997 between Elmwood and United States Trust
Company of New York, as trustee and a Series Supplement thereto, dated as of May
12, 1997. The Certificates were purchased by Citicorp Securities Inc. and Dean
Witter Reynolds Inc. (the "Underwriters") from Elmwood pursuant to an
underwriting agreement dated as of March 25, 1997, as supplemented by the second
supplement thereto dated April 25, 1997, between Elmwood and the Underwriters.
ITEM 7. Financial Statements and Exhibits
(a) Financial Statements - Not Applicable
(b) Pro Forma Financial Information - Not Applicable
(c) Exhibits
Item 601(a)
of Regulation S-K
Exhibit No. Description
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4.1 Series Supplement dated as of May 12, 1997 between Elmwood
Funding Limited, as Depositor, and United States Trust
Company of New York, as Trustee, together with a Standard
Terms for Trust Agreements dated as of March 14, 1996
between Elmwood Funding Limited, as Depositor, and United
States Trust Company of New York, as Trustee.
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ELMWOOD FUNDING LIMITED
/s/
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Name: Derrie Boggess
Title: Director
July 3, 1997
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INDEX TO EXHIBITS
Exhibit No. Description
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4.1 Series Supplement dated as of May 12, 1997 between Elmwood
Funding Limited, as Depositor, and United States Trust
Company of New York, as Trustee, together with a Standard
Terms for Trust Agreements dated as of March 14, 1996
between Elmwood Funding Limited, as Depositor, and United
States Trust Company of New York, as Trustee.
<PAGE>
EXHIBIT 4.1
[Execution Copy]
BOND-BACKED INVESTMENT CERTIFICATES
SERIES SUPPLEMENT
Series 1997-Du Pont
SERIES SUPPLEMENT, Series 1997-Du Pont, dated as of May 12, 1997 (the
"SERIES SUPPLEMENT"), by and between ELMWOOD FUNDING LIMITED, a Cayman Islands
company as Depositor (the "DEPOSITOR"), and UNITED STATES TRUST COMPANY OF NEW
YORK, as Trustee (the "TRUSTEE").
W I T N E S S E T H:
WHEREAS, the Depositor desires to create the Trust designated herein
(the "TRUST") by executing and delivering this Series Supplement, which shall
incorporate the terms of the Standard Terms for Trust Agreements, dated as of
March 14, 1997 (the "STANDARD TERMS"; together with this Series Supplement, the
"TRUST AGREEMENT"), by and between the Depositor and the Trustee, as modified by
this Series Supplement;
WHEREAS, the Depositor desires to deposit the Underlying Securities
set forth on Schedule I attached hereto (the "UNDERLYING SECURITIES SCHEDULE")
into the Trust;
WHEREAS, in connection with the creation of the Trust and the deposit
therein of the Underlying Securities, it is desired to provide for the issuance
of trust certificates (the "CERTIFICATES"), the Retained Interest (the "RETAINED
INTEREST"), the Call Right (the "CALL RIGHT") and the Optional Exchange Right
(the "OPTIONAL EXCHANGE RIGHT") evidencing undivided interests in the Trust; and
WHEREAS, the Trustee has joined in the execution of the Standard Terms
and this Series Supplement to evidence the acceptance by the Trustee of the
Trust;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants expressed herein, it is hereby agreed by and between the
Depositor and the Trustee as follows:
Section 1. Incorporation of Standard Terms. All of the provisions of
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the Standard Terms, a copy of which is attached hereto as Exhibit A, are hereby
incorporated herein by reference in their entirety, and this Series Supplement
and the Standard Terms shall form a single agreement between the parties. In
the event of any inconsistency between the provisions of this Series
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Supplement and the provisions of the Standard Terms, the provisions of this
Series Supplement will control with respect to the transactions described
herein.
Section 2. Definitions. Except as otherwise specified herein or as
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the context may otherwise require, the following terms shall have the respective
meanings set forth below for all purposes under this Series Supplement.
Capitalized terms used but not defined herein shall have the meanings assigned
to them in the Standard Terms (provided that not all capitalized terms defined
in the Standard Terms are applicable to this Series Supplement).
"CALL DATE" shall mean any Distribution Date occurring on or after the
Distribution Date in March 1999.
"CALL PRICE" shall mean the aggregate outstanding Certificate
Principal Balance, together with unpaid interest thereon accrued at the
Certificate Rate to but excluding the Distribution Date as of which the Call
Right is exercised.
"CALL RIGHT" shall mean the right (but not the obligation) of the
holder thereof to purchase all, but not less than all, of the outstanding
Certificates on any Call Date at a price equal to the Call Price, all in
accordance with Section 7 hereof.
"CERTIFICATE INTEREST" for the Certificates for any Distribution Date
means interest on the outstanding principal balance of the Certificates accrued
for the related Interest Accrual Period, computed (on the basis of a year of 360
days and twelve 30-day months) at a rate per annum equal to the Certificate
Rate.
"CERTIFICATE RATE" shall mean: 7.50%.
"COLLECTION PERIOD" shall mean the period from but excluding any
Distribution Date to and including the next succeeding Distribution Date, except
that (a) the first Collection Period shall commence on but exclude the Original
Issue Date and (b) the final Collection Period shall end on and include the
Final Scheduled Distribution Date.
"CORPORATE TRUST OFFICE" shall mean the corporate trust office of
United States Trust Company of New York, located on the date hereof at 114 West
47th Street, 25th Floor, New York, New York 10036.
"CSI" shall mean Citicorp Securities, Inc.
"CURRENCY" shall mean United States dollars.
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"CUT-OFF DATE" shall mean March 15, 1997.
"DEPOSITOR ADMINISTRATIVE EXPENSES" shall mean fees and expenses
payable by the Depositor to its administrator pursuant to the Administration
Agreement dated as of September 27, 1996 between the Depositor and Deutsche
Morgan Grenfell (Cayman) Limited, which fees and expenses include (a) a one-time
arrangement fee, (b) an annual fee and (c) reasonable out-of-pocket expenses
incurred by the administrator in connection with the administration of the
Depositor in accordance with such administration agreement.
"DEPOSITORY" shall mean The Depository Trust Company.
"DISTRIBUTION DATE" shall mean March 15 and September 15 of each year
(or if such date is not a Business Day, the next succeeding Business Day),
commencing on September 15, 1997 and ending on the earlier of the Final
Scheduled Distribution Date and the Optional Exchange Date.
"DUFF" shall mean Duff & Phelps Credit Rating Co.
"ELIGIBLE INVESTMENTS" shall be as defined in the Standard Terms;
provided that (a) the minimum required rating for long-term instruments will be
equal to the rating of the Underlying Securities (or, in the case of a split
rating, equal to the higher or highest rating of the Underlying Securities) and
(b) the rating of any short-term instruments will be at least A-1 by S&P and P1
by Moody's.
"EVENT OF DEFAULT" shall mean (a) a default in the payment of any
interest on any Underlying Security after the same becomes due and payable
(subject to any applicable grace period), (b) a default in the payment of any
principal of any Underlying Security when the same becomes due and payable
(whether at stated maturity, by prepayment, repurchase or redemption or
otherwise, but subject to any applicable grace period) or (c) a default, event
of default or other similar condition or event (however described) under the
Underlying Securities Indenture resulting in any Underlying Securities becoming,
or becoming capable at such time of being declared, due and payable before such
Underlying Securities would otherwise have been due and payable.
"FINAL SCHEDULED DISTRIBUTION DATE" shall mean September 15, 2006.
"INTEREST ACCRUAL PERIOD" shall mean, with respect to any specified
Distribution Date, the period from and including the immediately preceding
Distribution Date to but excluding such specified Distribution Date, except that
(a) the first Interest Accrual Period shall commence on and include the Original
Issue
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Date and (b) the final Interest Accrual Period shall end on but exclude the
Final Scheduled Distribution Date.
"INTEREST STRIP" shall mean, on any Distribution Date, interest on the
outstanding principal balance of the Certificates accrued for the related
Interest Accrual Period, computed (on the basis of a year of 360 days and twelve
30-day months) at rate per annum equal to .75%; provided that, for the first
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Distribution Date, the Interest Strip will also include all interest accrued on
the Underlying Securities for the period from and including the Cut-Off Date to
but excluding the Original Issue Date.
"MOODY'S" shall mean Moody's Investors Service, Inc.
"OPTIONAL EXCHANGE DATE" means any Business Day designated for the
exercise of the Optional Exchange Right by the holder thereof.
"OPTIONAL EXCHANGE RIGHT" shall mean the right (but not the
obligation) of the holder thereof to require that the Trustee redeem all or a
specified portion of the outstanding Certificates on any Business Day, all in
accordance with Section 8 hereof.
"OPTIONAL REDEMPTION" shall mean the redemption by the Trust of all or
a specified portion of the outstanding Certificates pursuant to Section 8
hereof.
"ORDINARY EXPENSES" shall mean the compensation due the Trustee for
Ordinary Expenses (as defined in the Standard Terms), payable in accordance with
the fee letter dated as of May 12, 1997 between the Depositor and the Trustee,
which compensation shall be payable by the holder of the Retained Interest. The
Trustee will be permitted to deduct its compensation from periodic distributions
on the Interest Strip.
"ORIGINAL ISSUE DATE" shall mean May 12, 1997.
"PROSPECTUS SUPPLEMENT" shall mean the Prospectus Supplement, dated
April 14, 1997, relating to the Certificates.
"RATING AGENCIES" shall mean Moody's and Duff.
"RECORD DATE" shall mean, with respect to each Distribution Date, the
third Business Day immediately preceding such Distribution Date.
"REQUIRED PRINCIPAL" for the Certificates for any Distribution Date
means the amount received on the Underlying Securities attributable to principal
payments thereon during the related Collection Period.
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"REQUIRED RATING" shall mean, in the case of Moody's, the rating
assigned to the Underlying Securities by Moody's as of the Original Issue Date,
and, in the case of Duff, the rating assigned to the Underlying Securities by
Duff as of the Original Issue Date.
"RETAINED INTEREST" shall mean the right to receive the Interest Strip
on each Distribution Date. Collections in respect of the Retained Interest
shall be deposited in the Certificate Account for the Series 1997-Du Pont
Certificates.
"S&P" shall mean Standard & Poor's Ratings Services.
"SERIES" shall mean Series 1997-Du Pont.
"TRUST PROPERTY" shall mean the Underlying Securities described on
Schedule I hereto.
"UNDERLYING SECURITIES INDENTURE" shall mean the instrument identified
as such on Schedule I hereto.
"UNDERLYING SECURITIES ISSUER" shall mean E.I. du Pont de Nemours and
Company.
Section 3. Designation of Trust, Certificates, etc. (a) The Trust
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created hereby shall be known as the "Bond-backed Investment Certificates Trust,
Series 1997-Du Pont". The Certificates evidencing certain undivided ownership
interests in such Trust shall be known as "Bond-backed Investment Certificates,
Series 1997-Du Pont". The Retained Interest evidencing certain undivided
ownership interests in the Underlying Securities (as described on Schedule II
hereto) shall be known as the "Series 1997-Du Pont Retained Interest". The Call
Right evidencing certain undivided ownership interests in the Certificates (as
described on Schedule III) shall be known as the "Series 1997-Du Pont Call
Right". The Optional Exchange Right evidencing certain undivided ownership
interests in the Underlying Securities (as described on Schedule IV hereto)
shall be known as the "Series 1997-Du Pont Optional Exchange Right". Together,
the Certificates, the Retained Interest, the Call Right and the Optional
Exchange Right represent all beneficial ownership interests in such Trust.
(b) The Certificates shall be held through the Depository in book-
entry form and shall be substantially in the form attached hereto as Exhibit B.
The Certificates shall be issued in minimum denominations of $1,000 and integral
multiples of $1,000 in excess thereof. Except as provided in the Standard
Terms, the Trust shall not issue additional Certificates or incur any
indebtedness.
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(c) The Retained Interest will be uncertificated and shall be as
described in Schedule II attached hereto. The Retained Interest will be issued
to CSI or an affiliate of CSI and may, upon notice to the Trustee, be
transferred by the holder thereof (in whole but not in part) to another Person
at the sole option of the transferor without the consent of the
Certificateholders or any other Person. The beneficial ownership interest in
the Retained Interest will be recorded on the records of the Trustee. On each
Distribution Date, payments will be made on the Retained Interest by wire
transfer to the account of the holder thereof on the related Record Date as
specified in written instructions to the Trustee.
(d) The Call Right will be uncertificated and shall be as described in
Schedule III attached hereto. The Call Right will be issued to CSI or an
affiliate of CSI and may, upon notice to the Trustee, be transferred by the
holder thereof (in whole but not in part) to another Person at the sole option
of the transferor without the consent of the Certificateholders or any other
Person. The beneficial ownership interest in the Call Right will be recorded on
the records of the Trustee.
(e) The Optional Exchange Right will be uncertificated and shall be as
described in Schedule IV attached hereto. The Optional Exchange Right will be
issued to CSI or an affiliate of CSI and may, upon notice to the Trustee, be
transferred by the holder thereof (in whole but not in part) to another Person
at the sole option of the transferor without the consent of the
Certificateholders or any other Person. The beneficial ownership interest in
the Optional Exchange Right will be recorded on the records of the Trustee.
Section 4. Satisfaction of Conditions to Initial Execution and
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Delivery of Trust Certificates. The Trustee hereby acknowledges receipt, on or
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prior to the Original Issue Date, of:
(i) the Underlying Securities set forth on the Underlying Securities
Schedule; and
(ii) all documents required to be delivered to the Trustee pursuant to
Section 2.01 of the Standard Terms.
Section 5. Distributions. (a) On each Distribution Date, the Trustee
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shall apply Available Funds in the Certificate Account as follows:
(i) first, to the Certificateholders and the holder of the Retained
Interest in payment of Certificate Interest and the Interest Strip,
respectively, pro rata according to the respective amounts thereof then due
and payable; and
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(ii) second, to the Certificateholders, in payment of Required
Principal (if any).
(b) If the Trustee has not received payment with respect to a
Collection Period on the Underlying Securities on or prior to the related
Distribution Date, such distribution will be made promptly upon receipt of
payment on the Underlying Securities. No additional amounts shall accrue on the
Certificates or be owed to Certificateholders as a result of such delay;
provided that any additional interest owed and paid by the Underlying Securities
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Issuer as a result of such delay shall be paid to the Certificateholders and the
holder of the Retained Interest, pro rata according to the respective amounts of
Certificate Interest and the Interest Strip remaining unpaid on the related
Distribution Date.
(c) Amounts recovered in respect of the Underlying Securities
following a payment default by the Underlying Securities Issuer under the
Underlying Securities Indenture shall be distributed, first, to the
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Certificateholders in payment of Required Principal (if any) and, second, to the
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Certificateholders and the holder of the Retained Interest in payment of
Certificate Interest (in the case of the Certificateholders) and the Interest
Strip (in the case of the holder thereof), respectively, pro rata according to
the respective amounts thereof then due and payable.
(d) On any Distribution Date as of which the Call Right is exercised,
the Trustee shall apply the proceeds received from such exercise of the Call
Right as follows:
(i) first, to the Certificateholders whose Certificates have been
purchased in connection with such exercise in payment of Certificate
Interest then due and payable on the Certificates so purchased; and
(ii) second, to the Certificateholders whose Certificates have been
purchased in connection with such exercise in payment of the outstanding
principal balance of the Certificates so purchased.
Section 6. Fees. (a) As compensation for its services hereunder, the
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Trustee shall be entitled to Ordinary Expenses. Ordinary Expenses will be paid
to the Trustee by the holder of the Retained Interest which, for convenience,
may be retained out of the Interest Strip on each Distribution Date.
(b) As compensation for the duties it performs hereunder, (i) the
Depositor shall be entitled to Depositor Administration Expenses and (ii)
interest earned on amounts invested pursuant to Section 3.05 of the Standard
Terms shall be paid, on each Distribution Date, to the Depositor. The Depositor
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Administration Expenses will be paid to the Trustee by the holder of the
Retained Interest which, for convenience, may be retained out of the Interest
Strip on each Distribution Date.
(c) Extraordinary Trust Expenses shall not be paid out of the Trust
Property unless (i) such Extraordinary Trust Expenses relate to a time when the
Underlying Securities Issuer was in default on any payment obligation under the
Underlying Securities Indenture, or (ii) Certificateholders representing 100% of
the aggregate Voting Rights of the Certificates have voted to require the
Trustee to incur such Extraordinary Trust Expenses.
(d) Prepaid Ordinary Expenses shall be zero for this Series.
Section 7. Call Right. (a) On any Call Date, the
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Certificates may be purchased in their entirety by the holder of the Call Right
at the Call Price. Having acquired the Certificates pursuant to its exercise of
the Call Right, the holder of the Call Right will be entitled to receive any
amounts distributable on the Certificates on each Distribution Date occurring
from and after such Call Date.
(b) The holder of the Call Right must provide notice to the Trustee (a
"CALL REQUEST") not less than 10 Business Days prior to the relevant Call Date
that it intends to exercise the Call Right on such Call Date.
(c) The Call Right shall not be exercised unless the value of the
Certificates being purchased pursuant to the Call Right exceeds the Call Price.
Section 8. Optional Exchange. (a) The holder of the Optional
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Exchange Right will be entitled to require the Trustee, on any Business Day, to
effect an Optional Redemption of one or more Certificates; provided that any
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such exercise is subject to the conditions that, on the Business Day on which
the Optional Redemption occurs, (i) the holder of the Optional Exchange Right is
also the holder of the Call Right and the Retained Interest, (ii) the holder of
the Optional Exchange Right is also the holder of Certificates in an outstanding
aggregate principal amount at least equal to the outstanding aggregate principal
amount of Certificates to be redeemed and (iii) the outstanding aggregate
principal amount of Certificates to be redeemed shall be an amount equal to an
authorized denomination of the Underlying Securities. No exercise of an
Optional Exchange Right shall prevent the holder from any later exercise thereof
on any subsequent Business Day.
(b) The holder of the Optional Exchange right must provide notice to
the Trustee (an "OPTIONAL EXCHANGE REQUEST")
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not less than four Business Days prior to the Business Day on which it intends
to exercise the Optional Exchange Right, which notice shall (i) specify the
outstanding aggregate principal amount of Certificates to be redeemed (the
"SUBJECT CERTIFICATES"), (ii) confirm that the holder of the Optional Exchange
Right is also the holder of the Call Right and the Retained Interest and (iii)
confirm the holder of the Optional Exchange Right is also the holder of
Certificates in an outstanding aggregate principal amount at least equal to the
outstanding aggregate principal amount of the Subject Certificates.
(c) On the Optional Exchange Date, (i) the Trustee will immediately
liquidate all investments (if any) made by the Trustee pursuant to Section 3.05
of the Standard Terms to the extent such proceeds would otherwise be
distributable to the holders of the Subject Certificates and (ii) the Subject
Certificates will be redeemed by the Trustee in exchange for (x) delivery by the
Trustee to the holder of the Optional Exchange Right of Underlying Securities in
an outstanding aggregate principal amount equal to the outstanding aggregate
principal amount of the Subject Certificates and (y) payment by the Trustee to
such holder of Available Funds in the Certificate Account that are attributable
to the Subject Certificates (including investments (if any) made by the Trustee
pursuant to Section 3.05 of the Standard Terms that would otherwise be
distributable to the holders of the Subject Certificates).
(d) Following the receipt of an Optional Exchange Request with respect
to all outstanding Certificates, all interest earned on amounts invested
pursuant to Section 3.05 of the Standard Terms shall be paid to the Depositor on
the related Optional Exchange Date. No Optional Exchange Request with respect
to all outstanding Certificates shall be effective unless the holder of the
Optional Exchange Right satisfies the claims of all creditors of the Bond-backed
Investment Certificates Trust, Series 1997-Du Pont.
(e) On the Optional Exchange Date, the aggregate outstanding principal
amount of the Certificates shall be reduced by the aggregate outstanding
principal amount of the Subject Certificates so redeemed.
(f) The Trustee shall not be obligated to determine whether an
Optional Redemption complies with the provisions of the Investment Company Act
of 1940, as amended, or the rules or regulations promulgated thereunder.
Section 9. Events of Default. (a) Within 30 days after a responsible
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officer of the corporate trust department of the Trustee receives written notice
of, or otherwise obtains actual knowledge of, occurrence of an Event of Default,
the
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Trustee will give notice to the Certificateholders, the holder of the Call
Right, the holder of the Retained Interest and the holder of the Optional
Exchange Right, transmitted by mail.
(b) Except in the case of an Event of Default relating to the payment
of principal of or interest on any of the Underlying Securities, the Trustee
will be protected in withholding such notice if in good faith it determines that
the withholding of such notice is in the interest of the Certificateholders, the
holder of the Call Right, the holder of the Retained Interest and the holder of
the Optional Exchange Right.
Section 10. Voting. (a) At all times, 100% of all Voting Rights shall
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be allocated among all Certificateholders in proportion to the then outstanding
principal balances of their respective Certificates; provided that any exercise
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of Voting Rights that would adversely affect in any material respect the
Retained Interest, the Call Right or the Optional Exchange Right shall require
the consent of the holder thereof. The Trustee shall provide notice of any
opportunity to exercise Voting Rights to the holders of each of the Retained
Interest, the Call Right and the Optional Exchange Right.
(b) The Required Percentage-Amendment of Voting Rights of those
Certificates that are materially adversely affected by any modification or
amendment of the Trust Agreement necessary to consent to such modification or
amendment shall be 66 2/3%, if each Rating Agency shall have notified the
Depositor and the Trustee in writing that such modification or amendment will
not result in a reduction or withdrawal of the then current rating of the
Certificates, and otherwise 100%.
(c) In addition to the other restrictions on modification and
amendment contained in the Standard Terms, the Trustee shall not agree to or
enter into any amendment or modification of the Trust Agreement which would
adversely affect in any material respect (i) the Retained Interest without the
consent of the holder thereof, (ii) the Call Right without the consent of the
holder thereof or (iii) the Optional Exchange Right without the consent of all
the Certificateholders and of the holders of the Retained Interest and the Call
Right; provided that no such amendment or modification will be permitted which
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would alter the status of the Trust as a grantor trust for Federal Income tax
purposes.
(d) In addition to the other restrictions on modification and
amendment contained in the Standard Terms, the Trustee shall not agree to or
enter into any amendment or modification of the Retained Interest, the Call
Right or the Optional Exchange Right without the consent of the holder thereof
or which would adversely affect in any material respect the
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interests of the Certificateholders without the consent of Certificateholders
representing 66 2/3% of the aggregate Voting Rights of those Certificates that
are materially adversely affected by such modification or amendment and without
confirmation by each Rating Agency that such amendment will not result in a
downgrading or withdrawal of its rating of the Certificates; provided that (i)
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no such amendment or modification will be permitted which would alter the status
of the Trust as a grantor trust for Federal Income tax purposes and (ii) any
amendment or modification of the Trust Agreement or the Call Right which would
alter the timing or amount of any payment of the Call Price shall require the
consent of Certificateholders representing 100% of the aggregate Voting Rights
of the Certificates.
(e) Any determination that an exercise of Voting Rights, or a
modification or amendment of the Trust Agreement, would adversely in effect in
any material respect the Retained Interest, the Call Right or the Optional
Exchange Right made by the holder thereof shall be conclusive and binding for
all purposes so long as such determination is made in good faith and on any
commercially reasonable basis.
Section 11. Miscellaneous.
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(a) The Trustee shall forward reports to Certificateholders pursuant
to Section 4.03 of the Standard Terms to the New York Stock Exchange, Inc.
(b) Except as expressly provided herein, the Certificateholders shall
not be entitled to terminate the Trust or cause the sale or other disposition of
the Underlying Securities, if and for so long as the Retained Interest remains
outstanding, without the consent of the holder of the Retained Interest.
(c) Except as expressly provided herein, the Certificateholders shall
not be entitled to terminate the Trust or cause the sale or other disposition of
the Underlying Securities, if and for so long as the Call Right remains
outstanding, without the consent of the holder thereof.
(d) The following provisions of the Standard Terms shall not apply to
the Series 1997-Du Pont Certificates: Section 3.06 (Maintenance of Credit
Support); and Section 4.04 (Advances).
(e) The outstanding principal balance of the Certificates shall not be
reduced by the amount of any Realized Loss (as defined in the Standard Terms).
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(f) Notwithstanding anything in Section 9.01(a) of the Standard Terms
to the contrary, the Trust and the obligations of the Depositor and the Trustee
created by the Trust Agreement with respect to the Certificates shall not
terminate until (i) the distribution in full of all amounts due to
Certificateholders at maturity and (ii) the settlement in full by the Trust of
all payments and deliveries required in connection with any exercise of the
Optional Exchange Right.
Section 12. Notices. All directions, demands and notices hereunder
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or under the Standard Terms shall be in writing and shall be delivered as set
forth below (unless written notice is otherwise provided to the Trustee).
If to the Depositor, to:
Elmwood Funding Limited
399 Park Avenue
New York, New York 10043
Attention: Mr. Gary Davis
Telephone: (212) 291-0007
Facsimile: (212) 291-1291
With a copy to the Directors:
c/o Deutsche Morgan
Grenfell (Cayman) Limited
P.O. Box 1984
George Town
Grand Cayman
Cayman Islands
British West Indies
Telephone: (809) 949-8244
Facsimile: (809) 949-8178
If to the Trustee, to:
United States Trust Company of New York
114 West 47th Street, 25th Floor
New York, New York 10036
Attention: Bond-backed Investment Certificates, Series 1997--Du
Pont,
Elmwood Funding Limited
Telephone: (212) 852-1623
Facsimile: (212) 852-1625
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If to the Rating Agencies, to:
Moody's Investors Service, Inc.
99 Church Street 21W
New York, New York 10007
Attention: CBO/CLO Monitoring Department
Telephone: (212) 553-1494
Facsimile: (212) 553-0355
and to:
Duff & Phelps Credit Rating Co.
17 State Street
12th Floor
New York, NY 10004
Attention:
Telephone: (212) 908-0237
Facsimile: (212) 908-0289
If to the New York Stock Exchange, to:
New York Stock Exchange, Inc.
20 Broad Street
New York, New York 10005
Attention: Michael Hyland
Telephone: (212) 656-5868
Facsimile: (212) 656-6919
Section 13. Governing Law. THIS SERIES SUPPLEMENT AND THE
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TRANSACTIONS DESCRIBED HEREIN SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND
PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CHOICE OF
LAWS PROVISIONS THEREOF.
Section 14. Counterparts. This Series Supplement may be executed in
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any number of counterparts, each of which shall be deemed to be an original, and
all such counterparts shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Series
Supplement to be duly executed by their respective authorized officers as of the
date first written above.
ELMWOOD FUNDING LIMITED,
as Depositor
By:_____________________________
Name:
Title:
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UNITED STATES TRUST COMPANY
OF NEW YORK,
as Trustee
By:_____________________________
Name:
Title:
<PAGE>
SCHEDULE I
SERIES 1997-DU PONT
UNDERLYING SECURITIES SCHEDULE
Underlying Securities: 8.25% Notes due September 15, 2006
Underlying Securities Issuer: E.I. du Pont de Nemours and
Company, a Delaware corporation
Underlying
Securities Indenture: Supplemental Indenture dated as of
September 28, 1990 to Indenture
dated as of October 3, 1988, as
supplemented by a Supplemental
Indenture dated as of November 15,
1988
CUSIP Number: 263534 AW 9
Principal Amount Deposited: $16,500,000
Original Issue Date: September 23, 1991
Principal Amount of
Underlying Securities
Originally Issued: $300,000,000
Maturity Date: September 15, 2006
Principal Payment Date: September 15, 2006
Interest Rate: 8.25% per annum
Interest Payment Dates: March 15 and September 15,
commencing March 15, 1992
Redemption Dates: None
Redemption Prices: None
Priority: According to the Prospectus relating to
the Underlying Securities, the Underlying
Securities are general unsecured
obligations of the Underlying Securities
Issuer, which rank on a parity with all
other unsecured and unsubordinated
indebtedness of the Underlying Securities
Issuer.
Security: None
<PAGE>
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Rating as of
Original Issue Date: "Aa3" by Moody's and "AA-" by S&P
Form of
Underlying Securities: Book-entry debt security with DTC
Retained Interest: As described on Schedule II to the Series
Supplement
Call Right: As described on Schedule III to the
Series Supplement
Optional Exchange Right: As described on Schedule IV to the Series
Supplement
<PAGE>
SCHEDULE II
SERIES 1997-DU PONT
DESCRIPTION OF THE RETAINED INTEREST
The holder of the Retained Interest will have the right to receive,
solely from collections on the Underlying Securities, the Interest Strip on each
Distribution Date. The rights of the holder of the Retained Interest to the
Interest Strip from payments received on the Underlying Securities is of equal
priority with the rights of Certificateholders to receive distributions of
interest.
The Retained Interest will be issued to Citicorp Securities, Inc.
("CSI") or an affiliate of CSI and may, upon notice to the Trustee, be
transferred by the holder thereof (in whole but not in part) to another Person
at the sole option of the transferor without the consent of the
Certificateholders or any other Person. The beneficial ownership interest in
the Retained Interest will be recorded on the records of the Trustee. On each
Distribution Date, payments will be made on the Retained Interest by wire
transfer to the account of holder thereof on the related Record Date as
specified in written instructions to the Trustee.
<PAGE>
SCHEDULE III
SERIES 1997-DU PONT
DESCRIPTION OF THE CALL RIGHT
The Call Right represents the right by the holder thereof to purchase
all, but not less than all, of the outstanding Certificates on any Distribution
Date occurring on or after the Distribution Date in March 1999, (the "CALL
DATE") at a price equal to the aggregate Certificate Principal Balance, together
with unpaid interest thereon accrued to but excluding the Distribution Date as
of which the Call Right is exercised (the "CALL PRICE").
The holder of the Call Right must provide notice to the Trustee (a
"CALL REQUEST") not less than 10 Business Days prior to the relevant Call Date
that it intends to exercise the Call Right on such Call Date.
Upon its acquisition of the Certificates pursuant to its exercise of
the Call Right, the holder of the Call Right will be entitled to receive any
amounts distributable on the Certificates on each Distribution Date occurring
from and after such Call Date.
The Call Right will not be exercised unless the value of the
Certificates being purchased upon exercise of the Call Right exceeds the Call
Price.
The Call Right will be issued to Citicorp Securities, Inc. ("CSI") or
an affiliate of CSI and may, upon notice to the Trustee, be transferred by the
holder thereof (in whole but not in part) to another Person at the sole option
of the transferor without the consent of the Certificateholders or any other
Person. The beneficial ownership interest in the Call Right will be recorded on
the records of the Trustee.
<PAGE>
SCHEDULE IV
SERIES 1997-DU PONT
DESCRIPTION OF THE OPTIONAL EXCHANGE RIGHT
The holder of the Optional Exchange Right will be entitled to require
the Trustee, on any Business Day, to effect an Optional Redemption of one or
more Certificates; provided that any such exercise is subject to the conditions
--------
that, on the Business Day on which the Optional Redemption occurs, (i) the
holder of the Optional Exchange Right is also the holder of the Call Right and
the Retained Interest, (ii) the holder of the Optional Exchange Right is also
the holder of Certificates in an outstanding aggregate principal amount at least
equal to the outstanding aggregate principal amount of Certificates to be
redeemed and (iii) the outstanding aggregate principal amount of Certificates to
be redeemed shall be an amount equal to an authorized denomination of the
Underlying Securities. No exercise of an Optional Exchange Right shall prevent
the holder from any later exercise thereof on any subsequent Business Day.
The holder of the Optional Exchange right must provide notice to the
Trustee (an "OPTIONAL EXCHANGE REQUEST") not less than four Business Days prior
to the Business Day on which it intends to exercise the Optional Exchange Right,
which notice shall (i) specify the outstanding aggregate principal amount of
Certificates to be redeemed (the "SUBJECT CERTIFICATES"), (ii) confirm that the
holder of the Optional Exchange Right is also the holder of the Call Right and
the Retained Interest and (iii) confirm the holder of the Optional Exchange
Right is also the holder of Certificates in an outstanding aggregate principal
amount at least equal to the outstanding aggregate principal amount of the
Subject Certificates.
On the Optional Exchange Date, the Subject Certificates will be
redeemed by the Trustee in exchange for (x) delivery by the Trustee to the
holder of the Optional Exchange Right of Underlying Securities in an outstanding
aggregate principal amount equal to the outstanding aggregate principal amount
of the Subject Certificates and (y) payment by the Trustee to such holder of
Available Funds in the Certificate Account that are attributable to the Subject
Certificates (including investments (if any) made by the Trustee pursuant to
Section 3.05 of the Standard Terms that would otherwise be distributable to the
holders of the Subject Certificates).
No Optional Exchange Request with respect to all outstanding
Certificates shall be effective unless the holder of the Optional Exchange Right
satisfies the claims of all creditors of the Bond-backed Investment Certificates
Trust, Series 1997-Du Pont.
The Optional Exchange Right will be issued to Citicorp Securities,
Inc. ("CSI") or an affiliate of CSI and may, upon
<PAGE>
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notice to the Trustee, be transferred by the holder thereof (in whole but not in
part) to another Person at the sole option of the transferor without the consent
of the Certificateholders or any other Person. The beneficial ownership
interest in the Optional Exchange Right will be recorded on the records of the
Trustee.
<PAGE>
EXHIBIT A
Standard Terms for Trust Agreements
(begins on next page)
<PAGE>
EXHIBIT A
STANDARD TERMS FOR TRUST AGREEMENTS
between
ELMWOOD FUNDING LIMITED,
as Depositor
and
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
Dated as of March 14, 1997
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND ASSUMPTIONS
1.01. Definitions................................................... 1
1.02. Rules of Construction......................................... 17
1.03. Compliance Certificates and Opinions; Record Date............. 18
ARTICLE II
DECLARATION OF TRUSTS; ISSUANCE OF CERTIFICATES;
PURPOSE AND CLASSIFICATION OF TRUSTS
2.01. Creation and Declaration of Trusts; Assignment of Underlying
Securities..................................................... 19
2.02. Acceptance by Trustee......................................... 21
2.03. Representations and Warranties of the Depositor............... 21
2.04. Breach of Representation, Warranty or Covenant................ 22
2.05. Agreement to Authenticate and Deliver Certificates............ 23
ARTICLE III
ADMINISTRATION OF EACH TRUST
3.01. Administration of each Trust.................................. 23
3.02. Collection of Certain Underlying Security Payments............ 23
3.03. Certificate Account........................................... 23
3.04. Liquidation of the Underlying Securities...................... 25
3.05. Investment of Funds in the Accounts........................... 25
3.06. Maintenance of Credit Support................................. 26
3.07. Realization Upon Defaulted Underlying Securities.............. 26
3.08. Retained Interest............................................. 27
3.09. Access to Certain Documentation............................... 27
3.10. Reports by the Depositor...................................... 28
3.11. Charges and Expenses.......................................... 29
ARTICLE IV
DISTRIBUTIONS AND REPORTS TO CERTIFICATEHOLDERS
4.01. Distributions................................................. 29
4.02. Distributions on Certificates................................. 29
4.03. Reports to Certificateholders................................. 30
4.04. Advances...................................................... 32
4.05. Allocation of Realized Losses and Trust Expenses.............. 33
4.06. Compliance with Withholding Requirements...................... 33
4.07. Optional Exchange............................................. 34
<PAGE>
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ARTICLE V
THE CERTIFICATES
5.01. The Certificates.............................................. 35
5.02. Execution, Authentication and Delivery........................ 36
5.03. Temporary Certificates........................................ 37
5.04. Registration; Registration of Transfer and Exchange........... 38
5.05. Mutilated, Destroyed, Lost and Stolen Certificates............ 40
5.06. Persons Deemed Owners......................................... 41
5.07. Cancellation.................................................. 41
5.08. Global Securities............................................. 42
5.09. Notices to Depository......................................... 43
5.10. Definitive Certificates....................................... 43
5.11. Conditions of Authentication and Delivery of New Series....... 44
5.12. Appointment of Paying Agent................................... 45
5.13. Authenticating Agent.......................................... 46
5.14. Voting Rights with Respect to Underlying Securities........... 47
5.15. Actions by Certificateholders................................. 48
5.16. Events of Default............................................. 49
5.17. Judicial Proceedings Instituted by Trustee; Trustee May Bring
Suit........................................................... 49
5.18. Control by Certificateholders................................. 49
5.19. Waiver of Past Defaults....................................... 49
5.20. Right of Certificateholders to Receive Payments Not to Be
Impaired....................................................... 50
5.21. Remedies Cumulative........................................... 50
ARTICLE VI
THE DEPOSITOR
6.01. Liability of the Depositor.................................... 51
6.02. Limitation on Liability of the Depositor...................... 51
6.03. Depositor May Purchase Certificates........................... 52
6.04. Merger or Consolidation of the Depositor...................... 52
6.05. No Liability of the Depositor with Respect to the Underlying
Securities; Certificateholders to Proceed Directly Against the
Underlying Securities Issuer(s)................................ 52
ARTICLE VII
CONCERNING THE TRUSTEE
7.01. Duties of Trustee............................................. 53
7.02. Between Trustee and Sub-Administrative Agents................. 56
7.03. Certain Matters Affecting the Trustee......................... 57
7.04. Trustee Not Liable for Recitals in Certificates or Underlying
Securities..................................................... 59
7.05. Trustee May Own Certificates.................................. 59
<PAGE>
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7.06. Trustee's Fees and Expenses................................... 59
7.07. Eligibility Requirements for Trustee.......................... 60
7.08. Resignation or Removal of the Trustee; Appointment of Successor
Trustee........................................................ 61
7.09. Appointment of Office or Agency............................... 62
7.10. Representations and Warranties of Trustee..................... 62
7.11. Indemnification of Trustee by the Depositor; Contribution..... 64
7.12. No Liability of the Trustee with Respect to the Underlying
Securities; Certificateholders to Proceed Directly Against the
Underlying Securities Issuer(s)................................ 65
7.13. The Depositor To Furnish Trustee with Names and Addresses of
Certificateholders............................................. 65
7.14. Preservation of Information................................... 66
7.15. Reports by Trustee............................................ 66
7.16. Trustee's Application for Instructions from the Depositor..... 66
ARTICLE VIII
MARKET AGENT
8.01. Market Agent.................................................. 67
ARTICLE IX
TERMINATION
9.01. Termination upon Liquidation of All Underlying Securities..... 67
ARTICLE X
MISCELLANEOUS PROVISIONS
10.01. Amendment.................................................... 68
10.02. Limitation on Rights of Certificateholders................... 69
10.03. Governing Law................................................ 71
10.04. Notices...................................................... 71
10.05. Notice to Rating Agencies.................................... 71
10.06. Severability of Provisions................................... 72
10.07. Grant of Security Interest................................... 72
10.08. Nonpetition Covenant......................................... 74
10.09. No Recourse.................................................. 74
10.10. Article and Section References............................... 74
10.11. Counterparts................................................. 74
10.12. Trust Indenture Act Controls................................. 74
<PAGE>
STANDARD TERMS FOR TRUST AGREEMENTS dated as of March 14, 1997, among
ELMWOOD FUNDING LIMITED, a Cayman Islands company, as Depositor, and UNITED
STATES TRUST COMPANY OF NEW YORK, a New York corporation, as Trustee.
PRELIMINARY STATEMENT
The Depositor and the Trustee have duly authorized the execution and
delivery of these Standard Terms for Trust Agreements (the "STANDARD TERMS") to
provide for one or more Series (and one or more Classes within each such Series)
of Certificates, issuable from time to time as provided in these Standard Terms.
Each such Series (inclusive of any Classes specified within such
Series) of Certificates will be issued only under a separate Series Supplement
to these Standard Terms, duly executed and delivered by the Depositor and the
Trustee. With respect to each Series of Certificates, these Standard Terms and
all amendments hereof and, unless the context otherwise requires, the related
Series Supplement and all amendments thereto shall be known as the "TRUST
AGREEMENT".
All representations, covenants and agreements made herein by each of
the Depositor and the Trustee are for the benefit and security of the
Certificateholders and, to the extent provided in the applicable Series
Supplement, for the benefit and security of any Credit Support Provider or any
other party as specified therein.
The Depositor is entering into these Standard Terms, and the Trustee
is accepting the trust created hereby, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged.
ARTICLE I
DEFINITIONS AND ASSUMPTIONS
Section 1.01. Definitions. Except as otherwise specified herein or
-----------
in the applicable Series Supplement or as the context may otherwise require, the
following terms have the respective meanings set forth below for all purposes of
this Trust Agreement.
"ACCOUNT": As defined in Section 3.05.
"ACCOUNTING DATE": With respect to any Series, if applicable, as
defined in the related Series Supplement.
"ADVANCE": As defined in Section 4.04.
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"AFFILIATE": With respect to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"CONTROL", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "CONTROLLING" and "CONTROLLED" have meanings correlative to the
foregoing.
"ALLOWABLE EXPENSE AMOUNT": With respect to any Series, as defined in
the related Series Supplement.
"AUTHENTICATING AGENT": As defined in Section 5.13.
"AVAILABLE FUNDS": Unless otherwise specified in the applicable
Series Supplement, for any Distribution Date in respect of a given Series or
Class, the sum of (i) all amounts actually received on or with respect to the
Underlying Securities (including Liquidation Proceeds and investment income on
amounts in the Accounts) with respect to such Series during the related
Collection Period, (ii) all amounts received pursuant to any Credit Support
Instruments with respect to such Series for such Distribution Date and (iii) all
other amounts, if any, specified by the applicable Series Supplement.
"BASIC DOCUMENTS": With respect to any Series, if applicable, as
defined in the related Series Supplement.
"BENEFICIAL OWNER": With respect to Certificates held through a
Depository, the beneficial owner of a Certificate. For purposes only of Section
5.15, the Trustee shall be obligated to treat a Person who claims to be a
beneficial owner of a Certificate as a "BENEFICIAL OWNER" within the meaning of
the Series Supplement only if such Person has first delivered to the Trustee,
(i) a certificate or other writing executed by such Person stating the full name
and address of such Person, the principal distribution amount of the Certificate
with respect to which such Person claims to be the Beneficial Owner, and the
participant in the Depository ("SUCH PERSON'S PARTICIPANT") through which such
Person holds its beneficial ownership interest in the Certificates and (ii) a
certificate or other writing executed by such Person's Participant confirming
that such Person's Participant holds on its own books and records Certificates
for the account of such Beneficial Owner and identifying the principal
distribution amount held for such Beneficial Owner.
"BUSINESS DAY": Any day that is not a Saturday, a Sunday or a legal
holiday or a day on which banking institutions or trust companies in The City of
New York are authorized or obligated by law, regulation or executive order to
close and that is also a Business Day specified with respect to the Underlying
Securities.
<PAGE>
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"CALL PREMIUM PERCENTAGE": With respect to any Series (or Class with
such Series), if applicable, as defined in the related Series Supplement.
"CERTIFICATE ACCOUNT": As defined in Section 3.03.
"CERTIFICATE OWNERS": As defined in Section 5.08.
"CERTIFICATE PRINCIPAL BALANCE": With respect to an Outstanding
Certificate, as determined at any time, the maximum amount that the Holder
thereof is entitled to receive as distributions allocable to principal payments
on the Underlying Securities. The Certificate Principal Balance, if any, of any
Class within a given Series (other than those Classes, if any, specified in the
related Series Supplement), as of any date of determination, shall be equal to
the aggregate initial Certificate Principal Balance thereof less the sum of (i)
all amounts allocable to prior distributions made to such Class in respect to
principal of the Underlying Securities, (ii) any reductions attributable to
Certificates surrendered in exchange for Underlying Securities, as and to the
extent provided in the applicable Series Supplement and (iii) any reductions in
the Certificate Principal Balance thereof deemed to have occurred in connection
with allocations of (A) Realized Losses in respect of principal of the
Underlying Securities and (B) expenses of the Trust if any only to the extent
specified in the applicable Series Supplement, each as allocated to such Class
pursuant to the applicable Series Supplement.
"CERTIFICATE RATE": With respect to any Series (or Class within such
Series) of Certificates (except certain Discount Certificates and Certificates
entitled to nominal or no interest distributions) the annual rate at which
interest accrues on the Certificates of such Series (or Class), which may be a
fixed rate or a floating rate of interest, determined upon the basis and in the
manner specified in the related Series Supplement.
"CERTIFICATE REGISTER" and "CERTIFICATE REGISTRAR": As respectively
defined in Section 5.04.
"CERTIFICATEHOLDER": Any Holder of a Certificate.
"CERTIFICATES": Any trust certificates authorized by, executed
pursuant to and authenticated and delivered under, this Trust Agreement.
"CLASS": With respect to any Series, any one of the classes of
Certificates of such Series, each consisting of
Certificates having identical terms.
"CLEARING AGENCY": An organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act.
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"CLOSING DATE": With respect to any Series, the day on which
Certificates of such Series are first executed,
authenticated and delivered.
"CODE": The Internal Revenue Code of 1986, as amended, and Treasury
Regulations promulgated thereunder.
"COLLECTION PERIOD": With respect to any Distribution Date for a
Series (or Class within such Series), the period specified in the related Series
Supplement.
"COMMISSION": The Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act or, if at any time after the
execution and delivery of this Trust Agreement such Commission is not existing
and performing the duties now assigned to it, then the body then performing such
duties.
"CONCENTRATED UNDERLYING SECURITIES": Any Underlying Securities that
constitute 10% or more of the total Underlying Securities with respect to a
Series of Certificates.
"CORPORATE TRUST OFFICE": The principal corporate trust office of the
Trustee located at the address set forth in the related Series Supplement or
such other addresses as the Trustee may designate from time to time by notice to
the Holders and the Depositor, or the principal corporate trust office of any
successor Trustee (or such other addresses as a successor Trustee may designate
from time to time by notice to the Holders and the Depositor).
"CREDIT SUPPORT": With respect to any Series (or any Class within
such Series), a letter of credit, surety bond, swap agreement, put or call
option or other asset intended to support or ensure the timely or ultimate
distributions of amounts due in respect of all or certain of the Underlying
Securities for such Series or Class, which in each case is specified as such in
the related Series Supplement.
"CREDIT SUPPORT INSTRUMENT": The instrument or document pursuant to
which the Credit Support for a given Series (or any Class within such Series) is
provided, as specified in the applicable Series Supplement.
"CREDIT SUPPORT PROVIDER": With respect to any Series (or any Class
with such Series), the Person, if any, that will provide any Credit Support with
respect to all or a portion of the Underlying Securities for such Series or
Class as specified in the applicable Series Supplement.
"CUT-OFF DATE": With respect to any Series, the date specified as
such in the related Series Supplement. For purposes of this Trust Agreement,
any Underlying Security acquired by the Depositor after the applicable Cut-off
Date but prior to the applicable Closing Date and included in the related Trust
as of
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such Closing Date shall be deemed to have been Outstanding as of such Cut-off
Date and references to the principal balance of such Underlying Security as of
such Cut-off Date shall be deemed to be to the principal balance of such
Underlying Security as of the date on which it was acquired by the Depositor.
"DEFINITIVE CERTIFICATES": As defined in Section 5.08.
"DELIVERY OFFICE": Unless otherwise specified in the applicable
Series Supplement, the office of the Trustee located at 111 Broadway, Lower
Level, New York, New York 10006 or such other addresses as the Trustee may
designate from time to time by notice to the Holders and the Depositor, or the
office of any successor Trustee at which certificated securities are delivered
for registration of transfer, cancellation or exchange (or such other addresses
as a successor Trustee may designate from time to time by notice to the Holders
and the Depositor).
"DEPOSITOR": Elmwood Funding Limited, a Cayman Islands company, and,
if a successor Person shall have become the Depositor pursuant to any applicable
provisions of this Trust Agreement, "DEPOSITOR" shall mean such successor
Person. With respect to any provisions of this Trust Agreement that relate to
the provisions of the Trust Indenture Act, "DEPOSITOR" shall include any obligor
on the Certificates as the term obligor is defined in the Trust Indenture Act.
"DEPOSITOR ORDER" or "DEPOSITOR REQUEST": A written order or request,
respectively, signed in the name of the
Depositor by any of its Directors.
"DEPOSITORY": With respect to the Certificates of any Series (or
Class within such Series) issuable in whole or in part in the form of one or
more Global Securities, the Person designated as Depository by the Depositor
pursuant to Section 5.01 until a successor Depository shall have become such
pursuant to the applicable provisions of this Trust Agreement, and thereafter
"DEPOSITORY" shall mean or include each Person who is then a Depository
hereunder, and if at any time there is more than one such Person, "DEPOSITORY"
as used with respect to the Certificates of any such Series or Class shall mean
the Depository with respect to the Certificates of that Series or Class.
"DEPOSITORY AGREEMENT": If applicable, the agreement pursuant to
which the Depository will agree to act as Depository with respect to any Series
(or Class within such Series) of Certificates in accordance with Section 5.08.
"DISCOUNT CERTIFICATE": Any Certificate that is issued with "original
issue discount" within the meaning of Section 1273(a) of the Code and any other
Certificate designated by the Depositor as issued with original issue discount
for United States Federal income tax purposes.
<PAGE>
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"DISTRIBUTION DATE": With respect to any Series (or Class within such
Series) of Certificates, each date specified as a "Distribution Date" for such
Series (or Class) in the related Series Supplement.
"DOLLAR" or "$" or "USD": Such currency of the United States as at
the time of payment is legal tender for the payment of public and private debts.
"ELIGIBLE ACCOUNT": Either (i) an account or accounts maintained with
a Federal or State chartered depository institution or trust company the long
term unsecured obligations of which are rated by the Rating Agency the higher of
(x) at least the then current long-term rating of the Certificates or (y) in one
of its two highest long-term rating categories (unless otherwise specified in
the Series Supplement) at the time any amounts are held in deposit therein or
(ii) a trust account(s) maintained as a segregated account(s) and held by a
Federal or State chartered depository institution or trust company in trust for
the benefit of the Certificateholders; provided, however, that such depository
institution or trust company has a long-term rating in one of the four highest
categories by the Rating Agency.
"ELIGIBLE EXPENSE": With respect to any Series, as specified in the
related Series Supplement.
"ELIGIBLE INVESTMENTS": With respect to any Series, unless otherwise
specified in the related Series Supplement, any one or more of the following
obligations or securities; provided, however, that the total stated return
specified by the terms of each such obligation or security is at least equal to
the purchase price thereof; and provided, further, that no such instrument may
carry the symbol "r" in its rating:
(i) direct obligations of, and obligations fully guaranteed by, the
United States, the Federal Home Loan Mortgage Corporation, the Federal
National Mortgage Association, the Federal Farm Credit System or any agency
or instrumentality of the United States the obligations of which are backed
by the full faith and credit of the United States of America; provided,
however, that obligations of, or guaranteed by, the Federal Home Loan
Mortgage Corporation, the Federal National Mortgage Association or the
Federal Farm Credit System shall be Eligible Investments only if, at the
time of investment, such investment has the rating specified in such Series
Supplement for Eligible Investments;
(ii) demand and time deposits in, certificates of deposit of, or
banker's acceptances issued by any depository institution or trust company
(including the Trustee or any agent of the Trustee acting in their
respective commercial capacities) incorporated under the laws of the United
States or any State and subject to supervision and examination by
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Federal and/or State banking authorities so long as the commercial paper
and/or the short-term debt obligations of such depository institution or
trust company (or, in the case of a depository institution which is the
principal subsidiary of a holding company, the commercial paper or other
short-term debt obligations of such holding company) at the time of such
investment or contractual commitment providing for such investment have the
rating specified in such Series Supplement for Eligible Investments;
provided, however, that such rating shall be no lower than the rating on
the Underlying Securities at the time of purchase of the investments;
(iii) repurchase agreements with respect to (a) any security
described in clause (i) above or (b) any other security issued or
guaranteed by an agency or instrumentality of the United States, with an
entity having the credit rating specified in such Series Supplement for
Eligible Investments;
(iv) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States or any State
that have the rating specified in such Series Supplement for Eligible
Investments at the time of such investment or contractual commitment
providing for such investment; provided, however, that such rating shall be
no lower than the rating on the Underlying Securities; and provided,
further, that securities issued by any particular corporation will not be
Eligible Investments to the extent that investment therein will cause the
then outstanding principal amount of securities issued by such corporation
and held as part of the Trust for such Series to exceed 10% of the
aggregate outstanding principal balances and amounts of all the Underlying
Securities and Eligible Investments held as part of the Trust for such
Series;
(v) commercial paper having at the time of such investment the rating
specified in the Series Supplement for Eligible Investments; and
(vi) a Guaranteed Investment Contract if and only if specified in the
related Series Supplement, provided that the Rating Agency Condition is
met.
"EVENT OF DEFAULT": With respect to any Series (or Class within such
Series) of Certificates, as specified in the related Series Supplement.
"EXCHANGE ACT": The Securities Exchange Act of 1934, as amended.
"EXECUTIVE OFFICER": With respect to any Series, a member of the
board of directors of any specified Person or any president or vice president of
such specified Person, except as otherwise provided in the related Series
Supplement.
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"EXTRAORDINARY TRUST EXPENSE": Unless otherwise specified in the
related Series Supplement, any and all costs, expenses or liabilities arising
out of the establishment, existence or administration of the Trust, other than
(i) Ordinary Expenses, and (ii) costs and expenses payable by a particular
Certificateholder, the Trustee or the Depositor pursuant to this Trust
Agreement.
"FINAL SCHEDULED DISTRIBUTION DATE": With respect to any Certificate,
the date on which all the unpaid principal of (and premium, if any, on) and
interest on such Certificate is scheduled, without giving effect to any
prepayment, exchange or early termination, to become due and payable as provided
therein and in the applicable Series Supplement.
"FIXED CERTIFICATE RATE": With respect to any Fixed Rate Certificate,
as defined in the related Series Supplement.
"FIXED RATE CERTIFICATE": A Certificate that provides for a payment
of interest at a Fixed Certificate Rate.
"FLOATING CERTIFICATE RATE": With respect to any Floating Rate
Certificate, as defined in the related Series Supplement.
"FLOATING RATE CERTIFICATE": A Certificate that provides for the
payment of interest at a Floating Certificate Rate determined periodically by
reference to a formula specified pursuant to Section 5.01 and the related Series
Supplement.
"GLOBAL SECURITY": A Certificate evidencing all or part of a Series
(or Class within such Series) of Certificates, issued to the Depository for such
Series or Class in accordance with Section 5.08 and bearing the legend
prescribed therein.
"GRANT": To sell, convey, assign, transfer, create, grant a lien upon
and a security interest in and right of set-off against, deposit, set over and
confirm to the Trustee pursuant to these Standard Terms and a related Series
Supplement; and the terms "GRANTED" and "GRANTING" have the meanings correlative
to the foregoing. A Grant of any Underlying Securities or of any other
instrument shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal,
premium, if any, and interest payments in respect of such Underlying Securities
and all other moneys payable thereunder, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights and
options, to bring Proceedings in the name of the Granting party or otherwise,
and generally to do and receive anything that the Granting party is or may be
entitled to do or receive thereunder or with respect thereto.
<PAGE>
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"GUARANTEED INVESTMENT CONTRACT": With respect to any Series (or
Class within such Series), a guaranteed investment contract or surety bond
provided for in the related Series Supplement, Granted as part of the Trust or
to the Trustee for the benefit of the Certificateholders for such Series,
providing for the investment of funds in a related Account or related Accounts
and insuring a minimum or a fixed rate of return on the investment of such
funds, which contract or surety bond shall be an obligation of an insurance
company or other entity whose rating is no lower than the rating on the
Underlying Securities and shall satisfy any other requirements specified in such
Series Supplement.
"HOLDER": The Person in whose name a Certificate is registered in the
Certificate Register on the applicable Record Date.
"INDEPENDENT": When used with respect to any specified Person means
that the Person (1) is in fact independent of the Depositor and of any
Affiliate, (2) does not have any direct or indirect material financial interest
in the Depositor or in any Affiliate and (3) is not connected with the Depositor
as an officer, employee, promoter, underwriter, trustee, partner, director or
person performing similar functions.
"INITIAL ACCRUED INTEREST": With respect to any Series, shall mean,
with respect to each Underlying Security, the amount of interest which accrued
thereon from the Underlying Security Interest Payment Date of such Underlying
Security next preceding the deposit of such Underlying Security hereunder (or,
in the event that such Underlying Security Interest Payment Date is the first
Underlying Security Interest Payment Date to occur after the original issuance
of such Underlying Security, from the dated date thereof) to, but excluding, the
Closing Date.
"LETTER OF CREDIT": With respect to any Series or Class within such
Series, the letter of credit, if any, providing for the payment of all or a
portion of amounts due in respect of such Series or Class, issued to the Trustee
for the benefit of the Holders of such Series or Class, issued by the related
Credit Support Provider, all as specified in the related Series Supplement.
"LIMITED GUARANTOR": With respect to the Underlying Securities
relating to any series (or Class within such Series), a Person specified in the
related Series Supplement as providing a guarantee or insurance policy or other
credit enhancement supporting the distributions in respect of such Series (or
Class) as and to the extent specified in such Series Supplement.
"LIMITED GUARANTY": With respect to any Series or Class within such
Series, any guarantee of or insurance policy or other comparable form of credit
enhancement with respect to amounts required to be distributed in respect of
such Series or Class or payments under all or certain of the Underlying
<PAGE>
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Securities relating to such Series or Class, executed and delivered by a limited
Guarantor in favor of the Trustee, for the benefit of the Certificateholders, as
specified in the related Series Supplement.
"LIQUIDATION PROCEEDS": The amounts received by the Trustee in
connection with (i) the liquidation of a defaulted Underlying Security or
collateral, if any, related thereto or (ii) the repurchase, substitution or sale
of a Underlying Security.
"MARKET AGENT": The market agent or market agents appointed pursuant
to Section 8.01, and its or their successors or assigns.
"MARKET AGENT AGREEMENT": With respect to any Series, the Market
Agent Agreement, dated as of the Closing Date, between the Trustee and the
Market Agent, the form of which will be attached to the Series Supplement, and
any similar agreement with a successor Market Agent, in each case as from time
to time amended or supplemented.
"MINIMUM WIRE DENOMINATION": With respect to any Series, the amount
specified as the "Minimum Wire Denomination" in the related Series Supplement.
"MOODY'S": Moody's Investors Service Inc. and any successors thereto.
"NOTIONAL AMOUNT": With respect to any Class of Certificates, if
applicable, the initial notional amount specified in the related Series
Supplement on which distributions of interest may be determined at the
applicable Certificate Rate, as the same may be adjusted as specified in such
Series Supplement.
"OFFICER'S CERTIFICATE": A certificate signed by any (or, if
specified in these Standard Terms or any Series Supplement, more than one)
Executive Officer of the Depositor, and delivered to the Trustee.
"OPINION OF COUNSEL": A written opinion of counsel, who may, except
as otherwise expressly provided in this Trust Agreement, be counsel for the
Depositor acceptable to the Trustee, except that any opinion of counsel relating
to the qualification of any account required to be maintained pursuant to this
Trust Agreement as an Eligible Account must be an opinion of counsel who is in
fact Independent of the Depositor.
"OPTIONAL EXCHANGE DATE": With respect to any Series (or Class with
such Series), as defined, if applicable, in the related Series Supplement.
"ORDINARY EXPENSES": Unless otherwise provided in a Series
Supplement, the Trustee's customary fee for its services
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as Trustee, including but not limited to (i) the costs and expenses of
preparing, sending and receiving all reports, statements, notices, returns,
filings, solicitation of consent or instructions, or other communications
required by this Trust Agreement, (ii) the costs and expenses of holding and
making ordinary collection or payments on the assets of the Trust and of
determining and making distributions, (iii) the costs and expenses of the
Trust's or Trustee's counsel, accountants and other experts for ordinary or
routine consultation or advice in connection with the establishment,
administration and termination of the Trust, and (iv) any other costs and
expenses that are, or reasonably should have been, expected to be incurred in
the ordinary course of administration of the Trust.
"OUTSTANDING": With respect to Certificates of a specified Series (or
Class within such Series), as of any date of determination, all such
Certificates theretofore executed, authenticated and delivered under these
Standard Terms and the related Series Supplement except:
(i) Certificates theretofore cancelled by the Registrar or delivered
to the Certificate Registrar for cancellation; and
(ii) Certificates in exchange for or in lieu of which other
Certificates have been executed, authenticated and delivered pursuant to
this Trust Agreement, unless proof satisfactory to the Trustee is presented
that any such Certificates are held by a bona fide purchaser in whose hands
such Certificates are valid obligations of the Trust;
provided, however, that in determining whether the Holders of the required
percentage of the aggregate Voting Rights of the Certificates have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Certificates beneficially owned by the Depositor, the Trustee, or any Affiliate
thereof shall be disregarded and deemed not to be Outstanding, and the Voting
Rights to which its Holder would otherwise be entitled shall not be taken into
account in determining whether the requisite percentage of aggregate Voting
Rights necessary to effect any such consent or take any such action has been
obtained except that, in determining whether the Trustee shall be protected in
relying upon any such request, demand, authorization, direction, notice, consent
or waiver, only Certificates with respect to which the Depositor has provided
the Trustee an Officer's Certificate stating that such Certificates so owned
shall be so disregarded. Certificates so owned that have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Certificates and that the pledgee is not, to the knowledge of the Trustee, the
Depositor, or any Affiliate of any thereof. The principal amount or notional
amount, as applicable, of a Discount Certificate that shall be deemed to be
Outstanding for the determination referred to in the foregoing proviso shall be
the Certificate Principal
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Balance or Certificate Notional Amount, as applicable, with respect thereto as
of the date of such determination.
"PARTICIPANT": A broker, dealer, bank, other financial institution or
other Person for whom from time to time a Depository effects book-entry
transfers and pledges of securities deposited with the Depository.
"PAYING AGENT": As defined in Section 5.12.
"PERCENTAGE INTEREST": With respect to a Certificate of any Series or
Class within a Series, the portion of such Series or Class evidenced by such
Certificate, expressed as a percentage, equal to the product of (x) a fraction,
the numerator of which is the initial Certificate Principal Balance or Notional
Amount, as applicable, represented by such Certificate and the denominator of
which is the aggregate initial Certificate Principal Balance or Notional Amount,
as applicable, of all the Certificates of such Series or Class and (y) 100.
"PERSON": Any individual, limited liability company, corporation,
partnership, joint venture, association, joint stock company, trust (including
any beneficiary thereof), unincorporated organization or government or any
agency or political subdivision thereof.
"PREDECESSOR CERTIFICATE": With respect to any particular
Certificate, every previous Certificate evidencing all or a portion of the same
interest as that evidenced by such particular Certificate; and for the purpose
of this definition, any Certificate executed, authenticated and delivered under
Section 5.05 in lieu of a lost, destroyed or stolen Certificate shall be deemed
to evidence the same interest as the lost, destroyed or stolen Certificate.
"PREPAID ORDINARY EXPENSES": Unless otherwise specified in the Series
Supplement, the amount (if any) paid by the Depositor to the Trustee on or
before the Closing Date to cover Ordinary Expenses, as specified in the related
Series Supplement.
"PROCEEDING": Any suit in equity, action at law or other judicial or
administrative proceeding.
"RATING AGENCY": With respect to any Series (or Class within such
Series), each nationally recognized statistical rating organization specified in
the related Series Supplement that initially rates the Certificates of such
Series (or Class).
"RATING AGENCY CONDITION": With respect to any action or occurrence,
unless otherwise specified in the applicable Series Supplement, that each Rating
Agency shall have been given 10 days (or such shorter period acceptable to each
Rating Agency) prior notice thereof and that each Rating Agency shall have
notified the Depositor and the Trustee in writing that such
<PAGE>
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action or occurrence will not result in a reduction or withdrawal of the then
current rating of any Certificate of the applicable Series.
"REALIZED LOSSES": With respect to any defaulted and liquidated
Underlying Security, the excess, if any, of (x) the principal amount of such
Underlying Security plus accrued and unpaid interest thereon, plus expenses
incurred by the Trustee in connection with the practices and procedures referred
to in Section 3.07(b) to the extent reimbursable under these Standard Terms and
the related Series Supplement, over (y) Liquidation Proceeds with respect
thereto.
"RECORD DATE": With respect to any Distribution Date for any Series
(or Class within such Series) of Certificates, the date specified in the related
Series Supplement.
"REQUIRED INTEREST": Unless otherwise specified in the related Series
Supplement, with respect to the Outstanding Certificates of any Series or any
Class thereof, the accrued and undistributed interest on the Certificate
Principal Balance or Notional Amount of such Outstanding Certificates, computed
at the applicable Certificate Rate.
"REQUIRED PERCENTAGE-AMENDMENT": Unless otherwise specified in the
related Series Supplement, if a Rating Agency Condition is specified in the
related Series Supplement and such Rating Agency Condition is met, or, if a
Rating Agency Condition is not so specified in the related Series Supplement,
66-2/3% of the aggregate Voting Rights of Certificates of such Series, and 100%
otherwise.
"REQUIRED PERCENTAGE-DEFINITIVE CERTIFICATES": Unless otherwise
specified in the related Series Supplement, 66-2/3% of the aggregate Voting
Rights of Certificates of such Series.
"REQUIRED PERCENTAGE-DIRECTION OF TRUSTEE": Unless otherwise
specified in the related Series Supplement, 66-2/3% of the aggregate Voting
Rights of Certificates of such Series.
"REQUIRED PERCENTAGES-REMEDIES": Unless otherwise specified in the
related Series Supplement, 66-2/3% of the aggregate Voting Rights of
Certificates of such Series.
"REQUIRED PERCENTAGE-REMOVAL OF TRUSTEE": Unless otherwise specified
in the related Series Supplement, more than 50% of the aggregate Voting Rights
of Certificates of such Series.
"REQUIRED PERCENTAGE-WAIVER": Unless otherwise specified in the
related Series Supplement, 66-2/3% of the aggregate Voting Rights of
Certificates of such Series.
"REQUIRED PREMIUM": If applicable, unless otherwise specified in the
related Series Supplement, with respect to the
<PAGE>
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Certificates of any Series or any Class thereof, an amount equal to the product,
as determined on any Distribution Date with respect to such Series and Class, of
(i) the Required Principal for such Series and Class and (ii) the Call Premium
Percentage for such Series and Class.
"REQUIRED PRINCIPAL": As determined for any Distribution Date for a
given Series (or Class within such Series), unless otherwise specified in the
related Series Supplement, the amounts on deposit in the Certificate Account
allocable to principal payments on the Underlying Securities (including from
Credit Support, if any, and Advances, if any, but excluding amounts in respect
of principal payments to the extent that Advances with respect thereto were
distributed as Required Principal on a prior Distribution Date) and required to
be distributed in respect of the Certificates of such Series (or Class) in
accordance with the terms of such Certificates and such related Series
Supplement.
"REQUIRED RATING": With respect to any Series (or Class within such
Series), the rating category (or categories) specified in the Series Supplement
that, as a condition to the issuance of such Series or Class, is (or are) the
lowest category (or categories) in which the Certificates of such Series or
Class may be categorized by the Rating Agency.
"REQUISITE RESERVE AMOUNT": As of any date with respect to any Series
(or Class within such Series) of Certificates, the amount, if any, required to
be maintained in the Reserve Account, if any, for such Series or Class as
specified in or determined pursuant to the related Series Supplement.
"RESERVE ACCOUNT": An Eligible Account, if any, created and
maintained pursuant to Section 3.06.
"RESPONSIBLE OFFICER": With respect to the Trustee, any officer
within the Corporate Trust Office of the Trustee, including any Managing
Director, Senior Vice President, Vice President, Assistant Vice President,
Assistant Treasurer or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also, with respect to a particular matter, any other officer to whom such matter
is referred because of such officer's actual knowledge of and familiarity with
the particular subject.
"RETAINED INTEREST": If applicable, with respect to any Underlying
Security, an ownership interest in and a right to a portion of the payments
thereon by the obligor thereof, as specified in the related Series Supplement,
held by the Person so specified in such Series Supplement.
"SALE PROCEDURES": Unless otherwise specified in the Series
Supplement, shall mean that, with respect to any sale of one or more Underlying
Securities, the Market Agent, on behalf of
<PAGE>
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the Trust, shall sell such Underlying Security or Underlying Securities to the
highest bidders among not less than two solicited bidders for such Underlying
Securities (one of which bidders may include Citicorp Securities, Inc. or any
affiliate thereof; provided, however, that neither Citicorp Securities, Inc. nor
any of its affiliates will be under any obligation to bid, and which bidders
need not be limited to recognized broker dealers). In the sole judgment of the
Market Agent, bids may be evaluated on the basis of bids for a single Underlying
Security, a portion of the Underlying Securities or all of the Underlying
Securities being sold or any other basis selected in good faith by the Market
Agent.
"S&P": Standard & Poor's Ratings Services and any successor thereof.
"SERIES": A separate series of Certificates issued pursuant to these
Standard Terms and a related Series Supplement, which series may be divided into
two or more Classes, as provided in such Series Supplement.
"SERIES SUPPLEMENT": An agreement incorporating these Standard Terms
that authorizes the issuance of a particular Series (and each Class within such
Series) of Certificates.
"SUB-ADMINISTRATION ACCOUNT": As defined in Section 7.02.
"SUB-ADMINISTRATION AGREEMENT": The written contract, if any, between
the Trustee and a Sub-Administrative Agent and any successor Trustee or Sub-
Administrative Agent relating to the administration of certain Underlying
Securities as provided in Section 7.02.
"SUB-ADMINISTRATION AGENT": Any Person with which the Trustee has
entered into a Sub-Administration Agreement and which meets the qualifications
of a Sub-Administrative Agent pursuant to Section 7.02.
"SURETY BOND": If so specified in the Series Supplement, with respect
to any Series (or Class within such Series) of Certificates, the surety bond
providing for the distribution under certain circumstances specified in such
Series Supplement of amounts to the Certificateholders of such Series (or
Class), which surety bond will be issued to the Trustee for the benefit of such
Certificateholders by the related Credit Support Provider, all as specified in
such Series Supplement.
"SWAP AGREEMENT": If so specified in the Series Supplement with
respect to any Series, the ISDA Master Agreement dated as of the Closing Date by
and between the Trust and the Swap Counterparty, as the same may be amended or
supplemented by Confirmations from time to time as provided herein and therein.
<PAGE>
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"SWAP COUNTERPARTY": If so specified in the Series Supplement, with
respect to any Series, shall be specified in the Series Supplement.
"SWAP DISTRIBUTION AMOUNT": If so specified in the Series Supplement
with respect to any Series, all amounts then due and owing to the Swap
Counterparty pursuant to the Swap Agreement, other than Swap Termination
Payments.
"SWAP GUARANTEE": If so specified in the Series Supplement with
respect to any Series, the Guarantee issued by the Swap Guarantor in favor of
the Trust.
"SWAP GUARANTOR": If so specified in the Series Supplement with
respect to any Series, the guarantor specified as such in the Series Supplement.
"SWAP RECEIPT AMOUNT": If so specified in the Series Supplement with
respect to any Series, all amounts due and owing to the Trust pursuant to the
Swap Agreement, other than Swap Termination Payments.
"SWAP TERMINATION PAYMENT": If so specified in the Series Supplement
with respect to any Series, the amount payable by the Swap Counterparty to the
Trust, or by the Trust to the Swap Counterparty, pursuant to Section 6(e) of the
Swap Agreement.
"TRUST": With respect to any Series, the segregated asset or pool of
assets subject hereto, constituting the trust created hereby and by the related
Series Supplement and to be administered hereunder and thereunder, consisting of
those Underlying Securities and the Credit Support, if applicable, and all sums
distributed in respect thereof that are specified as being part of the Trust for
such Series in the related Series Supplement, all for the benefit of the
Certificateholders of such Series as of any particular time.
"TRUST AGREEMENT": With respect to each Series of Certificates, these
Standard Terms and all amendments hereof and, unless the context otherwise
requires, the related Series Supplement and all amendments thereto.
"TRUSTEE": With respect to any Series, the Person so specified in the
applicable Series Supplement, until a successor Person shall have become the
Trustee pursuant to the applicable provisions of these Standard Terms and the
applicable Series Supplement, and thereafter "TRUSTEE" shall mean such successor
Person.
"TRUST INDENTURE ACT": The Trust Indenture Act of 1939, as amended,
as the same is in force and effect as of the date hereof.
<PAGE>
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"TRUST PROPERTY": Unless otherwise specified in the related Series
Supplement, the Underlying Securities.
"UNDERLYING SECURITIES ISSUER": With respect to an Underlying
Security, the issuer thereof (including, if applicable, the guarantor of the
Underlying Security) as identified in Appendix A to the Series Supplement.
"UNDERLYING SECURITY" or "UNDERLYING SECURITIES": With respect to any
Series, the asset or assets Granted as part of the Trust for such Series or
acquired (or, in the case of an agreement, entered into) by the Trustee for the
benefit of the Holders of such Series, and, if and to the extent provided in the
applicable Series Supplement, for the benefit of any Credit Support Provider,
all as identified in the Schedule A to the related Series Supplement. The
Underlying Securities for any such Series or the related Trust shall not
constitute Underlying Securities for any other Series or any other Trust.
"UNDERLYING SECURITY INTEREST PAYMENT DATE": With respect to an
Underlying Security, each date specified in Schedule A to the Series Supplement
as a date on which interest is scheduled, as of the Closing Date, to be payable
by or on behalf of the Underlying Securities Issuer on such Underlying Security
in accordance with its terms.
"UNDERLYING SECURITY PAYMENT DATE": A Scheduled Underlying Security
Payment Date and any other date on which interest, principal and/or redemption
premium is payable on an Underlying Security in accordance with its terms.
"UNIFORM COMMERCIAL CODE": The Uniform Commercial Code as in effect
in the relevant jurisdiction or, with respect to the State of Louisiana, the
equivalent body of statutory and common law.
"UNITED STATES": The United States of America (including the States),
its territories, its possessions and other areas subject to its jurisdiction.
"VOTING RIGHTS": With respect to any Series (or Class within such
Series) of Certificates, the portion of the aggregate voting rights of the
Certificates of such Series or Class which shall be allocated to any Certificate
as specified in the applicable Series Supplement.
Section 1.02. Rules of Construction. Unless the context otherwise
---------------------
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles as in
effect in the United States from time to time;
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(iii) "or" is not exclusive;
(iv) the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Trust Agreement as a whole and not to any
particular Article, Section or other subdivision;
(v) "including" means including without limitation; and
(vi) words in the singular include the plural and words in the plural
include the singular.
Section 1.03. Compliance Certificates and Opinions; Record Date. (a)
-------------------------------------------------
Upon any application or request by the Depositor to the Trustee to take any
action under any provision of this Trust Agreement other than the initial
issuance of the Certificates, the Depositor shall furnish to the Trustee an
Officer's Certificate stating that, in the opinion of the signer thereof, all
conditions precedent, if any, provided for in this Trust Agreement relating to
the proposed action have been complied with and an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent, if any, have
been complied with, except that in the case of any such application or request
as to which the furnishing of such documents is specifically required by any
provision of this Trust Agreement relating to such particular application or
request, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Trust Agreement (other than a
certificate provided pursuant to Section 3.10(d)) shall include:
(1) a statement that the individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he or she has
made such examination or investigation as is necessary to enable him or her
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether, in the opinion of such individual, such
condition or covenant has been complied with.
(b) The Depositor may at its option by delivery of an Officer's
Certificate to the Trustee set a record date to determine the Holders of any
subclass of Certificates entitled to give any consent, request, demand,
authorization, direction,
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notice, waiver or other act. Notwithstanding Section 316(c) of the Trust
Indenture Act, such record date shall be the record date specified in such
Officer's Certificate, which shall be a date not more than 30 days prior to the
first solicitation of Certificateholders in connection therewith. If such a
record date is fixed, such consent, request, demand, authorization, direction,
notice, waiver or other act may be given before or after such record date, but
only the Holders of record of Certificates of the applicable subclass at the
close of business on such record date shall be deemed to be Certificateholders
of such subclass for the purposes of determining whether Holders of the
requisite aggregate Principal Amount of Outstanding Certificates of such
subclass have authorized or agreed or consented to such consent, request,
demand, authorization, direction, notice, waiver or other act, and for that
purpose the aggregate Principal Amount of the Outstanding Certificates of such
subclass shall be computed as of such record date; provided, however, that no
such consent, request, demand, authorization, direction, notice, waiver or other
act by the Holders of Certificates of such subclass on such record date shall be
deemed effective unless it shall become effective pursuant to the provisions of
this Trust Agreement not later than one year after the record date.
ARTICLE II
DECLARATION OF TRUSTS; ISSUANCE OF CERTIFICATES;
PURPOSE AND CLASSIFICATION OF TRUSTS
Section 2.01. Creation and Declaration of Trusts; Assignment of
-------------------------------------------------
Underlying Securities. (a) The Depositor, concurrently with the execution and
- ---------------------
delivery hereof, does hereby agree to Grant to the Trustee, on behalf and for
the benefit of the Certificateholders of each given Series of Certificates and
without recourse, all the right, title and interest of the Depositor, including
any security interest therein for the benefit of the Depositor, in, to and under
the Underlying Securities attributable to each such Series (except for the
Underlying Securities attributable to such Series which are not Granted by the
Depositor, as specified in Schedule A to the applicable Series Supplement), now
existing or hereafter acquired, in each case as identified on the applicable
Schedule A, and all other assets included or to be included in the respective
Trust for the benefit of the Certificateholders of each such Series. Each such
Grant will include all interest, premium (if any) and principal received by or
on behalf of the Depositor of, on or with respect to any such Underlying
Securities due after the applicable Cut-off Date, and, unless otherwise
specified in the Series Supplement, will exclude (i) all interest, premium (if
any) and principal of, on or with respect to any such Underlying Securities due
on or before the applicable Cut-off Date and (ii) any Retained Interest in any
such Underlying Security. With respect to any Concentrated Underlying Security,
Schedule A to the applicable Series
<PAGE>
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Supplement shall include information regarding the payment terms of the
Concentrated Underlying Security, the Retained Interest, if any, with respect
thereto, the maturity or terms thereof, the rating, if any, thereof and any
other material information with respect thereto.
(b) In connection with each Grant referred to in the preceding
paragraph, the Depositor shall, not later than the applicable Closing Date,
either (i) deposit the Underlying Securities for a given Series (except for the
Underlying Securities attributable to such Series which are to be acquired from
a Person other than the Depositor, as specified on the Underlying Securities
Schedule to the applicable Series Supplement) with the Trustee by physical
delivery of such Underlying Securities, duly endorsed, together with any
documents necessary to transfer ownership of such Underlying Securities, to the
Trustee or (ii) have delivered such Underlying Securities to a Clearing Agency,
in which event (A) the Trustee has accepted delivery of such Underlying
Securities through such Clearing Agency, and (B) the Underlying Securities have
been credited to a trust account of the Trustee, or its authorized agent, and
the Trustee shall have the right to hold and maintain such Underlying Securities
on deposit with such Clearing Agency for all purposes of this Trust Agreement.
(c) Unless otherwise specified in the applicable Series Supplement,
the Grant of such Underlying Securities by the Depositor for a given Series
accomplished hereby and by such Series Supplement is absolute and is intended by
the parties hereto as a sale.
(d) In the case of each delivery of Underlying Securities to the
Trustee, the Depositor shall be deemed thereby to represent and warrant to the
Trustee that:
(i) the Depositor is duly authorized to so deliver such Underlying
Securities;
(ii) the Underlying Securities so delivered are genuine;
(iii) at the time of delivery of the Underlying Securities, such
Underlying Securities are free and clear of any lien, pledge, encumbrance,
right, charge, claim or other security interest (other than the lien
created by the Trust Agreement); and
(iv) such delivery is irrevocable and free of any continuing claim by
the Depositor except such as the Depositor may have as a Certificateholder
of a Certificate.
The above representations and warranties shall survive the delivery of
such Underlying Securities and the Certificates in respect thereof. The
Depositor shall further be deemed by such delivery to have made the
representations that, to the
<PAGE>
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Depositor's knowledge but without having made any independent inquiry, as of the
Closing Date, no default or event of default with respect to the Underlying
Securities has occurred and is continuing. Recourse for any breach by the
Depositor of any of the foregoing representations (other than clause (i) or (iv)
above or as to any lien, pledge, encumbrance, right, charge, claim or other
security interest not created by the Depositor other than pursuant to the Trust
Agreement) shall be limited to funds obtained from the enforcement of a
corresponding claim or obligation, if any, on the part of the seller of such
Underlying Securities to the Depositor.
(e) It is the intention of all of the parties hereto that the transfer
of the Trust Property hereunder and under any Series Supplement shall constitute
a sale and the Trust created hereunder and thereunder shall constitute a fixed
investment trust for federal income tax purposes under Treasury Regulation
Section 301.7701-4, and all parties hereto and thereto agree to treat the Trust,
any distributions therefrom and the beneficial interest in the Certificates
consistently with such characterization. The provisions of this Trust Agreement
shall be interpreted consistently with such characterization.
(f) Any Trust created hereunder shall not engage in any business or
activities other than in connection with, or relating to, the holding,
protecting and preserving of the Trust Property and the issuance of the
Certificates, and other than those required or authorized by this Trust
Agreement or incidental to and necessary to accomplish such activities. Any
Trust created hereunder shall not issue or sell any certificates or other
obligations other than the Certificates or otherwise incur, assume or guarantee
any indebtedness for money borrowed.
Section 2.02. Acceptance by Trustee. With respect to each Series,
---------------------
the Trustee will acknowledge receipt by it, or by a custodian on its behalf, of
the related Underlying Securities, now existing or hereafter acquired, and
declares that it will hold such Underlying Securities and documents and all
other documents delivered to it pursuant to this Trust Agreement, and that it
will hold all such assets and such other assets (including Underlying Securities
acquired from a Person other than the Depositor) comprising the Trust for a
given Series of Certificates, in trust for the exclusive use and benefit of all
present and future Certificateholders of such Series and for the purposes and
subject to the terms and conditions set forth in this Trust Agreement.
Section 2.03. Representations and Warranties of the Depositor. The
-----------------------------------------------
Depositor hereby represents and warrants to the Trustee that as of the Closing
Date or as of such other date specifically provided herein or in the applicable
Series Supplement:
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(i) the Depositor is a corporation duly organized, validly existing
and in good standing under the laws of the Cayman Islands;
(ii) with respect to each Series Supplement, to the Depositor's
knowledge but without having made any independent inquiry, the information
set forth in the Underlying Security Schedule with respect to each
Underlying Security is true and correct in all material respects at the
date or dates, respecting which, such information is furnished;
(iii) the execution and delivery of this Trust Agreement by the
Depositor and its performance of and compliance with the terms of this
Trust Agreement will not violate the Depositor's Memorandum and Articles of
Association or constitute a default (or an event which, with notice or
lapse of time, or both, would constitute a default) under, or result in the
breach or acceleration of, any material contract, agreement or other
instrument to which the Depositor is a party or which may be applicable to
the Depositor or any of its assets;
(iv) the Depositor has the full power and authority to enter into and
consummate all transactions contemplated by this Trust Agreement, has duly
authorized the execution, delivery and performance of this Trust Agreement
and has duly executed and delivered this Trust Agreement. This Trust
Agreement, upon its execution and delivery by the Depositor and assuming
due authorization, execution and delivery by the Trustee, will constitute a
valid, legal and binding obligation of the Depositor, enforceable against
it in accordance with the terms hereof, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, receivership, moratorium
or other laws relating to or affecting the rights of creditors generally,
and by general equity principles (regardless of whether such enforcement is
considered a proceeding in equity or at law); and
(v) any additional representations and warranties, if any, that may be
specified in the applicable Series Supplement.
It is understood and agreed that the representations and warranties of
the Depositor set forth in this Section 2.03 shall survive delivery of the
respective documents to the Trustee and shall inure to the benefit of the
Trustee on behalf of the Certificateholders notwithstanding any restrictive or
qualified endorsement or assignment. Upon discovery by any of the Depositor or
the Trustee of a breach of any of the foregoing representations and warranties
which materially and adversely affects the interests of the Certificateholders,
the party discovering such breach shall give prompt written notice thereof to
the other party.
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Section 2.04. Breach of Representation, Warranty or Covenant. Within
----------------------------------------------
90 days of the earlier of discovery by the Depositor or receipt of notice by the
Depositor of a breach of any representation or warranty of the Depositor set
forth in Section 2.03 that materially and adversely affects the interests of the
Certificateholders of a given Series of Certificates, the Depositor shall cure
such breach in all material respects.
Section 2.05. Agreement to Authenticate and Deliver Certificates.
--------------------------------------------------
With respect to each Series of Certificates and the related Trust, the Trustee
hereby agrees and acknowledges that it will, concurrently with the Grant to and
receipt by it of the related Underlying Securities, cause to be executed,
authenticated and delivered to or upon the written order of the Depositor, in
exchange for the Underlying Securities and such other assets constituting the
Trust for a given Series, Certificates duly authenticated by or on behalf of the
Trustee in authorized denominations evidencing ownership of the entire Trust for
such Series, all in accordance with the terms and subject to the conditions of
Sections 5.02 and 5.13.
ARTICLE III
ADMINISTRATION OF EACH TRUST
Section 3.01. Administration of each Trust. (a) The Trustee shall
----------------------------
administer the Underlying Securities for each given Trust for the benefit of the
Certificateholders of the related Series. In engaging in such activities, the
Trustee shall follow or cause to be followed collection procedures in accordance
with the terms of these Standard Terms and the applicable Series Supplement, the
respective Underlying Securities and any applicable Credit Support Instruments.
With respect to each Trust, and subject only to the above-described standards
and the terms of these Standard Terms, the related Series Supplement and the
respective Underlying Securities and applicable Credit Support Instruments, if
any, the Trustee shall have full power and authority, acting alone or through
Sub-Administrative Agents as provided in Section 7.02, to do or cause to be done
any and all things in connection with such administration which it deems
necessary to comply with the terms of these Standard Terms and the applicable
Series Supplement.
(b) The duties of the Trustee shall be performed in accordance with
applicable local, State and Federal law.
Section 3.02. Collection of Certain Underlying Security Payments.
--------------------------------------------------
With respect to any Series or Class of Certificates, the Trustee shall make
reasonable efforts to collect all payments required to be made pursuant to the
terms of the Underlying Securities in a manner consistent with the terms of this
Trust Agreement, such Underlying Securities and any related Credit Support
Instruments.
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Section 3.03. Certificate Account. (a) For each Series of
-------------------
Certificates, the Trustee shall establish and maintain one or more Eligible
Accounts (collectively, the "CERTIFICATE ACCOUNT"), held in trust for the
benefit of the Certificateholders of such Series. The Trustee on behalf of such
Certificateholders shall possess all right, title and interest in all funds on
deposit from time to time in each Certificate Account and in all proceeds
thereof. With respect to each Series of Certificates, the Certificate Account
shall be under the sole dominion and control of the Trustee for the benefit of
the related Certificateholders. With respect to each Series of Certificates,
not later than the close of business on the Business Day on which the Trustee
receives such amounts in the form of immediately available funds (so long as
such funds are received by the Trustee by 3:00 p.m. New York City time, and on
the next Business Day otherwise), the Trustee shall deposit or cause to be
deposited in the Certificate Account all amounts received by it with respect to
the Underlying Securities, any Credit Support and all Liquidation Proceeds
related to such Series including:
(i) all payments on account of principal of such Underlying
Securities;
(ii) all payments on account of interest on such Underlying
Securities;
(iii) all payments on account of premium (if any) on such Underlying
Securities;
(iv) any payments in respect of any such Credit Support;
(v) any Advances made as required pursuant to Section 4.04; and
(vi) any interest or investment income earned on funds deposited in
the related Accounts.
Unless otherwise specified in the applicable Series Supplement, it is
understood and agreed that payments in the nature of prepayment or redemption
penalties, late payment charges, default interest or reinvestment income which
may be received by the Trustee shall be deposited by the Trustee in the
Certificate Account and shall not be retained by the Trustee for its own
account.
If, at any time, the Certificate Account for any Series ceases to be
an Eligible Account, the Trustee shall within five Business Days (or such longer
period, not to exceed 30 calendar days, as to which the Rating Agency Condition
is met) establish a new Certificate Account meeting the conditions specified
above and the Trustee shall within five Business Days transfer any cash and any
investments on deposit in the Certificate Account to such new Certificate
Account, and from the date such new Certificate
<PAGE>
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Account is established, it shall be the Certificate Account for such Series.
(b) The Trustee shall give notice to the Depositor of the location of
each Eligible Account constituting the Certificate Account and prior to any
change thereof if such Eligible Account is or will be located at an institution
other than United States Trust Company of New York.
Section 3.04. Liquidation of the Underlying Securities. (a) If
----------------------------------------
specified in the applicable Series Supplement, upon the occurrences of specified
events, the Trustee shall direct the Market Agent to sell the Underlying
Securities in compliance with the Sale Procedures and to deposit the Liquidation
Proceeds therefrom into the Certificate Account pursuant to Section 3.03(a)
hereof.
(b) If the Trustee is notified by the Depositor that the Underlying
Securities Issuer of any Concentrated Underlying Securities has ceased to be a
reporting company under the Exchange Act, the Trustee shall direct the Market
Agent to sell all of such Concentrated Underlying Securities in compliance with
the Sale Procedures and to deposit the Liquidation Proceeds therefrom into the
Certificate Account pursuant to Section 3.03(a) hereof to be distributed to the
Holders in accordance with Section 4.02 hereof.
Section 3.05. Investment of Funds in the Accounts. The Trustee on
-----------------------------------
behalf of the Trust may direct any depository institution maintaining the
Certificate Account or the Reserve Account, if any, for the applicable Series
and any other segregated Eligible Account the contents of which are held for the
benefit of Certificateholders of such Series (each, an "ACCOUNT") to invest the
funds therein at the specific written direction of the Depositor in one or more
Eligible Investments bearing interest or sold at a discount, which shall be held
to maturity unless payable on demand and which funds shall not be reinvested
upon the maturity or demand for payment of such Eligible Investment. If the
Depositor does not provide any investment directions by 10:00 a.m. on any
Business Day, funds held in any Account will be invested in the Eligible
Investments specified in clause (ii) of the definition thereof until receipt of
investment directions to the contrary. Investments of such funds shall be
invested in Eligible Investments that will mature so that such funds will be
available for distribution on the next Distribution Date. Except as otherwise
provided in the applicable Series Supplement, any earnings with respect to such
Eligible Investments shall be paid to, and any losses with respect to such
Eligible Investments shall be solely for the account of, the Certificateholders
(and, if applicable, the Retained Interest holder) pro rata in proportion to
their interest in the invested funds. In the event amounts on deposit in an
Account are at any time invested in an Eligible Investment payable on demand,
the Trustee shall:
<PAGE>
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(x) consistent with any notice required to be given thereunder, demand
that payment thereon be made on the last day such Eligible Investment may
otherwise mature hereunder in an amount equal to the lesser of (1) all
amounts then payable thereunder and (2) the amount required to be withdrawn
on such date; and
(y) demand same day payment of all amounts due thereunder upon a
determination by the Trustee that such Eligible Investment would not
constitute an Eligible Investment in respect of funds thereafter on deposit
in any Account.
Neither the Trustee nor the Depositor shall in any way be held liable by reason
of any insufficiency in any Account resulting from any loss on any Eligible
Investment made in accordance with this Trust Agreement.
Section 3.06. Maintenance of Credit Support. (a) On the applicable
-----------------------------
Closing Date, the Trustee at the written direction of the Depositor or, if so
specified in the applicable Series Supplement, the Depositor shall, to the
extent specified in the applicable Series Supplement, establish and maintain, or
enter into, as applicable, in the name of the Trustee, either as a part of the
related Trust or outside it, for the benefit of the Certificateholders of the
related Series, the Credit Support specified in the applicable Series
Supplement. To the extent specified in the applicable Series Supplement, the
Depositor will make or cause to be made any initial deposit to the Certificate
Account or any Reserve Account (which shall be an Eligible Account) for the
related Series as of the Closing Date. Unless the Series Supplement for a given
Series provides otherwise, if a Reserve Account exists for such Series,
collections with respect to the Underlying Securities for such Series not
distributed to the Certificateholders of such Series shall be deposited in the
Reserve Account. The Reserve Account, if any, shall be an asset of the
Depositor (and the income earned on any amounts held in the Reserve Account
shall be allocable to the Depositor, who agrees to include any such income in
its gross income for all federal, state and local income and franchise tax
purposes) and will not be a part of or otherwise be includible in the Trust but
will be held for the benefit of the Certificateholders.
(b) Amounts on deposit in the Reserve Account and amounts available
pursuant to any other Credit Support for such Series shall be applied by the
Trustee to make distributions of principal of and premium (if any) and interest
on the Certificates of such Series as required pursuant to Section 4.01 and the
applicable Series Supplement to the extent that funds are not otherwise
available for such purpose. If specified in such Series Supplement, immediately
after each Distribution Date, amounts on deposit in the Reserve Account for such
Series in excess of a specified amount shall be paid to the Person so specified
in such Series Supplement.
<PAGE>
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Section 3.07. Realization Upon Defaulted Underlying Securities. (a)
------------------------------------------------
The Trustee, on behalf of the Certificateholders, shall assert claims under each
applicable Credit Support Instrument, and shall take such reasonable steps as
are necessary to receive payment or to permit recovery thereunder with respect
to any defaulted Underlying Securities, subject in all cases to the provisions
of Article VII hereof.
(b) Unless otherwise provided in the related Series Supplement, if the
Trustee, as applicable, is unable to obtain full recovery in respect of a
defaulted Underlying Security and any related Credit Support Instrument pursuant
to Section 3.07(a), the Trustee shall follow or cause to be followed such normal
practices and procedures as it deems necessary or advisable to realize upon such
defaulted Underlying Security and such Credit Support Instrument, subject in all
cases to the provisions of Article VII hereof.
(c) If the Liquidation Proceeds of a defaulted Underlying Security are
less than the sum of (i) the outstanding principal balance of the defaulted
Underlying Security, (ii) interest accrued but unpaid thereon at the applicable
interest rate and (iii) the aggregate amount of expenses incurred by the Trustee
in connection with the practices and procedures referred to in paragraph (b) of
this Section 3.07 to the extent reimbursable under these Standard Terms and the
related Series Supplement, the Trust for the applicable Series shall recognize a
Realized Loss equal to the amount of such difference. Any such reimbursed
Realized Loss shall be allocated pursuant to Section 4.05 among the
Certificateholders of such Series in the manner and priority set forth in the
related Series Supplement.
Section 3.08. Retained Interest. The Retained Interest, if any, in
-----------------
any Underlying Security shall initially be held by the Person so specified in
the related Series Supplement as and to the extent specified therein. With
respect to each Underlying Security, unless otherwise specified in the related
Series Supplement, the Retained Interest shall be deducted by the Trustee from
applicable collections in respect of such Underlying Security. Unless otherwise
provided in the applicable Series Supplement, collections in respect of Retained
Interest shall not be deposited in the Certificate Account for the applicable
Series and shall not constitute a part of the Trust for such Series, but shall
instead be distributed to the holder of such Retained Interest; provided,
however, that the Series Supplement for any Series with respect to which there
is a Retained Interest may provide that, notwithstanding the terms contained
herein, commingled amounts received in respect of assets inclusive of Underlying
Securities and Retained Interest may initially be deposited in a separate and
discrete account established by the Trustee and such Series Supplement may
provide for additional terms relating thereto. Unless otherwise provided in the
applicable Series Supplement, after deduction of all applicable fees as provided
for in this Trust Agreement, on each Distribution Date the Trustee shall
allocate on a pari passu
<PAGE>
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basis any partial recovery on an Underlying Security between (a) the Retained
Interest, if any, and (b) distributions to Certificateholders of the applicable
Series.
Section 3.09. Access to Certain Documentation. The Trustee shall
-------------------------------
provide to any Federal, State or local regulatory authority that may exercise
authority over any Certificateholder access to the documentation in the
Trustee's possession regarding the Underlying Securities required by applicable
laws and regulations. Such access shall be afforded without charge, but only
upon reasonable written request and during normal business hours at the offices
of the Trustee designated by it. In addition, access to the documentation in
the Trustee's possession regarding the Underlying Securities related to a given
Series (or Class within such Series) will be provided to any Certificateholder
of such Series (or Class) upon reasonable written request during normal business
hours at the offices of the Trustee designated by it at the expense of the
Certificateholder requesting such access.
Section 3.10. Reports by the Depositor. The Depositor shall:
------------------------
(a) file with the Trustee, within 30 days after the Depositor is
required to file the same with the Commission, copies of the annual reports and
of the information, documents and other reports (or copies of such portions of
any of the foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Depositor is required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if
the Depositor is not required to file information, documents or reports pursuant
to either of such sections, then to file with the Trustee and the Commission, in
accordance with rules and regulations prescribed by the Commission, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Exchange Act in respect of a security
listed and registered on a national securities exchange as may be prescribed in
such rules and regulations;
(b) file with the Trustee and the Commission, in accordance with the
rules and regulations prescribed by the Commission, such additional information,
documents and reports with respect to compliance by the Depositor with the
conditions and covenants provided for in this Trust Agreement, as may be
required by such rules and regulations, certificates or opinions of independent
accountants, conforming to the requirements of Section 314(e) of the Trust
Indenture Act;
(c) transmit to all Certificateholders, in the manner and to the
extent provided in Section 313(c) of the Trust Indenture Act, such summaries of
any information, documents and reports required to be filed by the Company
pursuant to subsections (a) and (b) of this Section 3.10 as may be required by
rules and regulations prescribed by the Commission; and
<PAGE>
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(d) furnish to the Trustee, not less often than annually, a
certificate from the principal executive, financial or accounting officer of the
Depositor as to his or her knowledge of the Depositor's compliance with all
conditions and covenants under this Trust Agreement. For purposes of this
paragraph (d) such compliance shall be determined without regard to any period
of grace or requirement of notice provided under this Trust Agreement.
Any reports, statements, documents or other information required to be furnished
by the Depositor to the Trustee pursuant to these Standard Terms or any Series
Supplement shall be deemed to have been delivered to the Trustee if the Trustee
is in possession of such reports, statements, documents or other information at
the time they are to be furnished pursuant to these Standard Terms or any Series
Supplement.
Section 3.11. Charges and Expenses. Except as otherwise provided in
--------------------
this Trust Agreement or the related Series Supplement, no amounts in the nature
of fees or charges shall be payable by or withheld from the Trust, the Depositor
or any other person. There shall be no recourse or claim against the Trust or
the property of the Trust for all or any part of any fees or charges payable to
any person.
ARTICLE IV
DISTRIBUTIONS AND REPORTS TO CERTIFICATEHOLDERS
Section 4.01. Distributions. (a) On each Distribution Date for a
-------------
given Series of Certificates, the Trustee shall apply Available Funds in the
Certificate Account for such Series in the manner and priority set forth in the
Series Supplement for such Series. In any event, however, any amounts collected
during any period shall be distributed to the Certificateholders in Dollars no
later than the Distribution Date immediately following the receipt thereof.
(b) All distributions on the Certificates shall be payable in Dollars
only from Available Funds, and no provision of this Trust Agreement shall be
deemed to create any obligation on the part of the Trustee or the Depositor to
make any distribution from any other source.
Section 4.02. Distributions on Certificates. (a) Distributions on
-----------------------------
any Certificate that are payable and are punctually paid or duly provided for on
any Distribution Date shall be distributed to the Person in whose name such
Certificate (or one or more Predecessor Certificates) is registered at the close
of business on the related Record Date notwithstanding the cancellation of such
Certificate upon any transfer or exchange subsequent to such related Record
Date.
<PAGE>
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The distribution of interest and principal on Certificates (in
Dollars) shall be made:
(i) if the Certificateholder is a Depository, to the Depository, which
shall credit the relevant Participant's account at such Depository in
accordance with the policies and procedure of the Depository, or
(ii) if the Certificateholder is not a Depository, at the Corporate
Trust Office (except as otherwise specified pursuant to Section 5.01) or,
at the option of the Trustee, by check mailed to the address of the Person
entitled thereto as such address shall appear in the Certificate Register
or, if provided pursuant to Section 5.01 and in accordance with
arrangements satisfactory to the Trustee, at the option of the Holder by
wire transfer to an account designated by the Holder. Notwithstanding the
foregoing paragraph, with respect to a Certificateholder of Certificates
not held in a Depository and having at least the Minimum Wire Denomination,
such payment shall be made by wire transfer of immediately available funds
to the account designated by such Certificateholder in a written request
received by the Trustee not later than 10 days prior to such Distribution
Date; provided, however, that if a wire transfer cannot be made for any
reason, payment shall be made by check. The Trustee shall not be required
to send federal funds wires until any corresponding payments which were not
same day funds when received by it have become same day funds.
(b) Each Certificate delivered under this Trust Agreement upon
transfer of or in exchange for or in lieu of any other Certificate shall carry
the rights to interest accrued and undistributed, and to accrue, that were
carried by such other Certificate.
(c) All computations of interest due with respect to any Certificate
of any Series or Class within such Series shall be made as specified in the
Series Supplement applicable to that particular Series or Class of Certificates.
(d) With respect to any computations or calculations to be made under
these Standard Terms, the applicable Series Supplement and the Certificates,
except as otherwise provided, (i) all percentages resulting from any calculation
of accrued interest will be rounded, if necessary, to the nearest 1/100,000 of
1% (.0000001), with five one-millionths of a percentage point rounded upward,
and (ii) all currency amounts will be rounded to the nearest one-hundredth of a
unit (with .005 of a unit being rounded upward).
(e) Unless specified otherwise in a Series Supplement, the final
distribution of principal and/or premium shall be made upon presentation and
surrender of such Certificates at the Corporate Trust Office.
<PAGE>
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Section 4.03. Reports to Certificateholders. Unless otherwise
-----------------------------
specified in the applicable Series Supplement, on the fifth Business Day
following each such Distribution Date the Trustee shall forward or cause to be
forwarded to the Depositor, each Certificateholder of such Series, to each
Rating Agency rating such Series and such other Persons as may be specified in
such Series Supplement, a statement setting forth:
(i) the amounts received by the Trustee as of the last such statement
in respect of principal, interest and premium on the Underlying Securities
and the Swap Receipt Amount, if any;
(ii) the Swap Distribution Amount, if any, for such date;
(iii) the amount of the distribution on such Distribution Date to
Certificateholders of each Class of such Series allocable to principal of
and premium, if any, and interest on the Certificates of each such Class,
and the amount of aggregate unpaid interest accrued as of such Distribution
Date;
(iv) in the case of each Class of Floating Rate Certificates of such
Series, the respective Floating Certificate Rate applicable to each such
Class on such Distribution Date, as calculated in accordance with the
method specified in such Certificates and the related Series Supplement;
(v) such other customary information as the Trustee deems necessary or
desirable, (or that any such Certificateholder reasonably requests in
writing) to enable such Certificateholders to prepare their tax returns;
(vi) if the Series Supplement provides for Advances, the aggregate
amount of Advances, if any, included in such distribution, and the
aggregate amount of unreimbursed Advances, if any, at the close of business
on such Distribution Date;
(vii) the aggregate stated principal amount and, if applicable,
notional amount of the Underlying Securities related to such Series, the
current rating assigned by the Rating Agency thereon and the current
interest rate or rates thereon at the close of business on such
Distribution Date;
(viii) the aggregate Certificate Principal Balance (or Notional
Amount, if applicable) of each Class of such Series at the close of
business on such Distribution Date, separately identifying any reduction in
such aggregate Certificate Principal Balance (or Notional Amount) due to
the allocation of any Realized Losses on such Distribution Date or
otherwise; and
<PAGE>
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(ix) as to any Series (or any Class within such Series) for which
Credit Support has been obtained, the amount or notional amount of coverage
of each element of Credit Support (and rating, if any, thereof) included
therein as of the close of business on such Distribution Date.
In the case of information furnished pursuant to subclauses (i), (ii), (iii) and
(v) above, the amounts shall be expressed as a dollar amount per minimum
denomination of Certificates or for such other specified portion thereof.
Within a reasonable period of time after the end of each calendar year, the
Trustee shall furnish to each Person who at any time during each such calendar
year was a Certificateholder a statement containing the information set forth in
subclauses (i), (ii), (iii) and (v) above, aggregated for such calendar year or
the applicable portion thereof during which such person was a Certificateholder.
Such obligation of the Trustee shall be deemed to have been satisfied to the
extent that substantially comparable information shall be provided by the
Trustee pursuant to any requirements of the Code as are from time to time in
effect. The Trustee shall supply to Certificateholders who so request in
writing at such Certificateholder's expense all materials received by the
Trustee from the Underlying Securities Issuer.
Section 4.04. Advances. (a) Unless otherwise specified in the
--------
applicable Series Supplement, the Trustee shall have no obligation to make
Advances (as defined below) with respect to the Underlying Securities or in
favor of the Holders of any Series (or Class within such Series) of
Certificates.
(b) However, as and to the extent provided in the Series Supplement
for a given Series, and subject to the terms of paragraphs (b) and (c) of this
Section 4.04, on or prior to each Distribution Date, the Trustee shall advance
or cause to be advanced in immediately available funds for deposit in the
Certificate Account for such Series an advance (each, an "ADVANCE") in an amount
equal, unless otherwise specified in the related Series Supplement, to the
aggregate of distributions of principal, premium (if any) and interest due on
the Underlying Securities for such Series (or Class) during the related
Collection Period, to the extent remaining unpaid at the time of such Advance.
In satisfaction of its obligation to make such Advances, the Trustee shall make
such Advances from its own funds. The Trustee may recover Advances from late
collections received by the Trustee on the applicable Underlying Securities,
proceeds from any applicable Credit Support, if any, and Liquidation Proceeds
with respect to the Underlying Securities for such Series or Class, as specified
in the related Series Supplement, as to which any such unreimbursed Advance was
made.
(c) Notwithstanding any provision herein to the contrary, no Advance
shall be required to be made hereunder if the Trustee reasonably believes that
it will be unable to recover such Advance from related late collections, Credit
Support proceeds, if any, or Liquidation Proceeds with respect to the
<PAGE>
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applicable Underlying Securities. It is further understood and agreed that the
Trustee shall not be obligated to make any Advances in respect of reductions in
the amount of collections on the Underlying Securities due to bankruptcy
proceedings with respect to the Underlying Securities or the obligors thereof.
(d) Notwithstanding any provision herein to the contrary, unless
otherwise provided in the Series Supplement for a given Series, any Advances
made in respect of any Underlying Securities related to such Series (or Class
within such Series) that are subsequently deemed by the Trustee to be
nonrecoverable from related late collections, Credit Support proceeds, if any,
or Liquidation Proceeds may be reimbursed to the Trustee through the application
of amounts on deposit in the Certificate Account for such Series allocable to
any of such Underlying Securities prior to the distributions of interest,
premium (if any) and principal with respect to the Certificates of such Series
or Class.
Section 4.05. Allocation of Realized Losses and Trust Expenses. With
------------------------------------------------
respect to any Series of Certificates, the manner and priority of the allocation
of Realized Losses, Eligible Expenses, Allowable Expense Amounts and
Extraordinary Trust Expenses, if any, on any Distribution Date among the
Classes, if any, of such Series shall be as set forth in the related Series
Supplement.
Section 4.06. Compliance with Withholding Requirements. (a)
----------------------------------------
Notwithstanding any other provision of this Trust Agreement to the contrary, the
Trustee shall comply with all Federal withholding requirements respecting
distributions to Certificateholders of interest or original issue discount that
the Trustee believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding.
(b) Each Certificateholder will provide the Trustee (and, so long as
the Certificates are held at a Depository in the form of Global Certificates,
each Beneficial Owner of the Certificates will provide such Depository and the
Trustee) with evidence that there should not be any withholding tax assessed for
Federal income tax purposes in respect of distributions to such
Certificateholder, such evidence to take the form of a statement, on a duly
executed and up-to-date Internal Revenue Service Form W-8 (or successor form),
Form W-9 (or successor Form), or Form 4224 (or successor form), as applicable,
that identifies the Beneficial Owner of the Certificate; provided, however, that
for so long as the Certificates are held at a Depository in the form of Global
Certificates, the Certificateholder shall have no obligation to provide the
Trustee with any such evidence except to the extent it has received such
evidence from Beneficial Owners of the Certificates. The Trustee shall not be
required to accept any such Internal Revenue Service forms if it believes that
they are not accurate (but the Trustee shall not be required to make any
independent investigation to determine their accuracy).
<PAGE>
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(c) If any tax or other governmental charge shall become payable by or
on behalf of the Trustee, including any tax or governmental charge required to
be withheld from any payment by the Trustee under the provisions of any
applicable law or regulation with respect to any Underlying Securities or the
Certificates, such tax or governmental charge shall be payable by the
Certificateholder and may be withheld by the Trustee. The consent of
Certificateholder shall not be required for such withholding. In the event the
Trustee does withhold any amount from interest or original issue discount
distributions or Advances thereof to any Certificateholder pursuant to Federal
withholding requirements, the Trustee shall indicate in the statement required
pursuant to Section 4.03 the amount so withheld.
(d) The Depositor and the Trustee shall have the right to refuse the
surrender, registration of transfer or exchange of any certificate with respect
to which such tax or other governmental charge shall be payable until such
payment shall have been made by the Certificateholder.
Section 4.07. Optional Exchange. (a) The terms and conditions, if
-----------------
any, upon which Certificates of any Series (or Class within such Series) may be
exchanged for a pro rata portion of the Underlying Securities of the related
Trust will be specified in the related Series Supplement; provided, however,
that any right of exchange shall be exercisable only to the extent that the
Depositor provides upon the Trustee's request an Opinion of Counsel that (i)
such exchange would not be inconsistent with the Depositor's and the Trustee's
continued satisfaction of the applicable requirements for exemption under Rule
3a-7 (or other applicable rule or exemption) under the Investment Company Act of
1940, as amended, and all applicable rules, regulations and interpretations
thereunder and (ii) such exchange would not affect the characterization of the
Trust as a "grantor trust" for federal income tax purposes. Such terms may
relate to, but are not limited to, the following:
(1) a requirement that the exchanging Holder tender to the Trustee
Certificates of each Class within such Series;
(2) a minimum Certificate Principal Balance or Notional Amount, as
applicable, with respect to Certificates being tendered for exchange by a
single Holder:
(3) a requirement that the Certificate Principal Balance or Notional
Amount, as applicable, of each certificate tendered for exchange be an
integral multiple of an amount specified in such Series Supplement;
(4) specified dates during which a Holder may effect such an exchange
(each, an Optional Exchange Date);
<PAGE>
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(5) limitations on the right of an exchanging Holder to receive any
benefit upon exchange from any Credit Support or Underlying Securities
which are not debt securities; and
(6) adjustments to the value of the proceeds of any exchange based
upon required prepayment of future expense allocations and the
establishment of a reserve for any anticipated Extraordinary Trust
Expenses.
(b) Unless otherwise provided in the applicable Series Supplement, no
Certificate may be exchanged pursuant to the preceding paragraph unless the
Trustee has received at least 30 days but not more than 45 days prior to an
Optional Exchange Date in accordance with delivery instructions specified in the
applicable Series Supplement a telegram, telex, facsimile transmission or letter
from a member of a national securities exchange or the National Association of
Securities Dealers, Inc., the Depository (in accordance with its normal
procedures) or a commercial bank or trust company in the United States setting
forth the name of the Holder of such Certificate, the Certificate Principal
Balance or Notional Amount of such Certificate to be exchanged and the
Certificate number or a description of the tenor and the terms of such
Certificate, a statement that the option to elect exchange is being exercised
thereby and an assurance that the Certificate to be exchanged with the form
entitled "Option to Elect Exchange" on the reverse of the Certificate duly
completed will be received by such Trustee not later than five Business Days
after the date at such telegram, telex, facsimile transmission or letter, and
such Certificate and form duly completed must be received by such Trustee by
such fifth Business Day. Any tender of a Certificate by the Holder thereof for
exchange shall be irrevocable. Unless otherwise provided in the applicable
Series Supplement, the exchange option may be exercised pursuant to this Section
by the Holder of a Certificate for less than the Certificate Principal Balance
or Notional Amount of such Certificate as long as the Certificate Principal
Balance or Notional Amount remaining Outstanding after such exchange is an
authorized denomination and all other exchange requirements set forth in the
related Series Supplement are satisfied upon such partial exchange such
Certificate shall be cancelled and a new Certificate or Certificates for the
remaining Certificate Principal Balance or Notional Amount thereof shall be
issued (which shall be in the name of the Holder of such exchanged Certificate).
(c) Upon the completion of any such Optional Exchange, the Trustee
shall give prompt written notice thereof to each Rating Agency.
<PAGE>
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ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates. (a) The Certificates of any Series
----------------
(or Class within such Series) shall be issued in fully registered form without
coupons and shall be substantially in the form of the exhibit with respect
thereto attached to the applicable Series Supplement.
The Certificates may be issued in one or more Series, each of which
series may, subject to the provisions of the Code and the intended status of
each Series Trust to constitute a fixed investment trust for federal income tax
purposes, be issued in one or more Classes, with such further particular
designation added or incorporated in such title for the Certificates of any
particular Series or Class within such Series as the Depositor may determine.
Each Certificate shall bear upon its face the designation so selected for the
Series and Class to which it belongs. All Certificates of the same Series and
Class shall be identical in all respects except for the denominations thereof.
All Certificates of all Classes within any one Series at any time Outstanding
shall be identical except for differences among the Certificates of the
different Classes within such Series specified in the applicable Series
Supplement. Except as otherwise provided in a Series Supplement, all
Certificates of a particular Series (and all Classes within such Series) issued
under this Trust Agreement shall be in all respects equally and ratably entitled
to the benefits hereof without preference, priority or distinction on account of
the actual time or times of authentication and delivery, all in accordance with
the terms and provisions of this Trust Agreement.
(b) Each Series (and all Classes within such Series) of Certificates
shall be created by a Series Supplement authorized by the Depositor and the
Trustee and establishing the terms and provisions of such Series. The several
Series may, subject to the provisions of the Code and the intended status of
each Series Trust to constitute a fixed investment trust for federal income tax
purposes, differ as between Series and any given Class may vary as between the
other Classes within any given Series.
Section 5.02. Execution, Authentication and Delivery. (a) The
--------------------------------------
Certificates shall be executed by the Trustee by a corporate trust officer
thereof, under its corporate seal, which may be in facsimile form and imprinted
or otherwise reproduced thereon. The signature of any of these officers may be
manual or facsimile. Certificates bearing the manual or facsimile signature of
individuals who were at any time the proper officers of the Trustee shall be
binding, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Certificates
or did not hold such offices at the date of such Certificates.
<PAGE>
- 37 -
(b) Each Certificate shall be dated as of the later of the date
specified in the related Series Supplement and the date of its authentication.
(c) No Certificate shall be entitled to any benefit under this Trust
Agreement or be valid or obligatory for any purpose, unless there appears on
such Certificate a certificate of authentication substantially in one of the
forms provided for herein executed by the Trustee by the manual signature of one
of its authorized signatories, and such certificate upon any Certificate shall
be conclusive evidence, and the only evidence, that such Certificate has been
duly authenticated and delivered hereunder and is entitled to the benefits of
this Trust Agreement.
Section 5.03. Temporary Certificates. Pending the preparation of
----------------------
Definitive Certificates of any Series (or Class within each such Series), the
Trustee shall execute and, upon receipt of Depositor Order, authenticate and
deliver temporary Certificates which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the Definitive Certificates in lieu of which they
are issued, in registered form and with such appropriate insertions, omissions,
substitutions and other variations as may be authorized by such Depositor Order.
Any such temporary Certificate may be in global form, representing all or a
portion of the Outstanding Certificates of such Series or Class. Every such
temporary Certificate shall be executed, authenticated and delivered by the
Trustee upon the same conditions and in substantially the same manner, and with
the same effect, as the Definitive Certificate or Definitive Certificates in
lieu of which is issued.
If temporary Certificates of any Series (or Class within such Series)
are issued, the Trustee will cause Definitive Certificates of such Series or
Class to be prepared without unreasonable delay. After the preparation of
Definitive Certificates of such Series or Class, the temporary Certificates of
such Series or Class shall be exchangeable for Definitive Certificates of such
Series or Class upon surrender of the temporary Certificates of such Series or
Class at the Delivery Office of the Trustee, without charge to the Holder,
except as provided in Section 5.04 in connection with a transfer. Upon
surrender for cancellation of any one or more temporary Certificates of any
Series or Class within such Series, the Trustee shall execute, authenticate and
deliver in exchange therefore Definitive Certificates with a like Certificate
Principal Balance or Notional Amount, as applicable, of the same Series (or
Class within such Series) of authorized denominations and of like tenor. Until
so exchanged, temporary Certificates of any Series (or Class within such Series)
shall in all respects be entitled to the same benefits under this Trust
Agreement as Definitive Certificates of such Series or Class, except as
otherwise specified in the applicable Series Supplement with
<PAGE>
- 38 -
respect to the payment of interest on Global Securities in temporary form.
Upon any exchange of a portion of a temporary Global Security for a
definitive Global Security or for the individual Definitive Certificates
represented thereby pursuant to this Section 5.03 or Section 5.04, the temporary
Global Security shall be endorsed by the Trustee to reflect the reduction of the
aggregate Certificate Principal Balance or Notional Amount, as applicable,
evidenced thereby, whereupon the aggregate Certificate Principal Balance or
Notional Amount, as applicable, of such temporary Global Security shall be
reduced for all purposes by the amount so exchanged and endorsed.
Section 5.04. Registration; Registration of Transfer and Exchange.
---------------------------------------------------
(a) The Trustee shall cause to be kept a register for each Series of Registered
Certificates (the "CERTIFICATE REGISTER") in which a transfer agent and
registrar (which may be the Trustee) (the "CERTIFICATE REGISTRAR") shall provide
for the registration of Certificates and the registration of transfers and
exchanges of Certificates. The Trustee is hereby initially appointed
Certificate Registrar for the purpose of registering Certificates and transfers
and exchanges of Certificates as herein provided; provided, however, that the
Trustee may appoint one or more co-Certificate Registrars. Upon any resignation
of any Certificate Registrar, the Depositor shall promptly appoint a successor
or, in the absence of such appointment, assume the duties of Certificate
Registrar.
If a Person other than the Trustee is appointed by the Depositor as
Certificate Registrar, the Depositor will give the Trustee prompt written notice
of the appointment of a Certificate Registrar and of the location, and any
change in the location, of the Certificate Register, and the Trustee shall have
the right to rely upon a certificate executed on behalf of the Certificate
Registrar by an Executive Officer thereof as to the names and addresses of the
Holders and the principal amounts and numbers of the Certificates held by each
Holder.
(b) Upon surrender for registration of transfer any Certificate of any
Series (or Class within such Series) at the office or agency of the Trustee, if
the requirements of Section 8-401(1) of the Uniform Commercial Code are met to
the Depositor's satisfaction, the Trustee shall execute, authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Certificates of any authorized denominations, of a like Series, Class and
aggregate Certificate Principal Balance or Notional Amount, as applicable.
(c) Notwithstanding any other provisions of this Section, unless and
until it is exchanged in whole or in part for the individual Certificates
represented thereby, a Global Security representing all or a portion of the
Certificates of a Series (or Class within such Series) may not be transferred
except as a whole by the Depository for such Series or Class to a
<PAGE>
- 39 -
nominee of such Depository or by a nominee of such Depository to such Depository
or another nominee of such Depository or by such Depository or any such nominee
to a successor Depository for such Series or Class or a nominee of such
successor Depository.
(d) At the option of the Holder, Certificates of any Series (or Class
within such Series) (other than a Global Security, except as set forth below)
may be exchanged for other Certificates of the same Series or Class of any
authorized denomination or denominations of like tenor and aggregate Certificate
Principal Balance or Notional Amount, as applicable, upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee maintained
for such purpose.
(e) If at the time the Depository for the Certificates of a Series (or
Class within such Series) notifies the Depositor that it is unwilling or unable
to continue as Depository for the Certificates of such Series or Class or if at
any time the Depository for the Certificates of such Series or Class shall no
longer be eligible under Section 5.08(b), the Depositor shall appoint a
successor Depository with respect to the Certificates of such Series or Class.
If a successor Depository for the Certificates of such Series or Class is not
appointed by the Depositor within 90 days after the Depositor receives such
notice or becomes aware of such ineligibility, the Depositor's election pursuant
to Section 5.01 shall no longer be effective with respect to the Certificates of
such Series or Class and the Trustee shall execute and, upon receipt of a
Depositor Order for the authentication and delivery of individual Certificates
of such Series or Class, authenticate and deliver individual Certificates of
such Series or Class in an aggregate Certificate Principal Balance or Notional
Amount, as applicable, equal to the aggregate Certificate Principal Balance or
Notional Amount, as applicable, of the Global Security or Securities
representing Certificates of such Series or Class in exchange for such Global
Security or Securities.
(f) The Depositor may at any time and in its sole discretion determine
that individual Certificates of any Series (or Class within such Series) issued
in the form of one or more Global Securities shall no longer be represented by
such Global Security or Securities. In such event the Trustee shall execute
and, upon receipt of a Depositor Order for the authentication and delivery of
individual Certificates of such Series or Class, authenticate and deliver
individual Certificates of such Series or Class in an aggregate Certificate
Principal Balance or Notional Amount, as applicable, equal to the aggregate
Certificate Principal Balance or Notional Amount, as applicable, of the Global
Security or Securities representing Certificates of such Series or Class in
exchange for such Global Security or Securities.
(g) If specified by the Depositor pursuant to Section 5.01 with
respect to a Series (or Class within such Series) of Certificates, the
Depository for such Series may
<PAGE>
- 40 -
surrender a Global Security for such Series or Class in exchange in whole or in
part for individual Certificates of such Series or Class on such terms as are
acceptable to the Depositor and such Depository. Thereupon, the Trustee shall
execute and, upon receipt of a Depositor Order, authenticate and deliver,
without service charge,
(i) to each Person specified by such Depository a new individual
Certificate or Certificates of the same Series or Class, of any authorized
denomination as requested by such Person in an aggregate Certificate
Principal Balance or Notional Amount, as applicable, equal to and in
exchange for such Person's beneficial interest in the Global Security; and
(ii) to such Depository a new Global Security in a denomination equal
to the difference, if any, between the aggregate Certificate Principal
Balance or Notional Amount, as applicable, of the surrendered Global
Security and the aggregate Certificate Principal Balance or Notional
Amount, as applicable, of individual Certificates delivered to Holders
thereof.
In any exchange provided for in any of the preceding three paragraphs,
the Trustee shall execute and, upon receipt of a Depositor Order, authenticate
and deliver individual Certificates in registered form in authorized
denominations.
Upon the exchange of a Global Security for individual Certificates,
such Global Security shall be cancelled by the Trustee. Individual Certificates
issued in exchange for a Global Security pursuant to this Section 5.04 shall be
registered in such names and in such authorized denominations as the Depository
for such Global Security, pursuant to instructions from its Participants, any
indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Certificates to the Person in whose names such Certificates
are so registered.
(h) All Certificates issued upon any registration of transfer or
exchange of Certificates shall constitute complete and indefeasible evidence of
ownership in the Trust related to such Certificates and be entitled to the same
benefits under this Trust Agreement as the Certificates surrendered upon such
registration of transfer or exchange.
(i) Every Certificate presented or surrendered for registration of
transfer or exchange shall (if so required by the Depositor, the Trustee or the
Certificate Registrar) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Depositor, the Trustee or the
Certificate Registrar, duly executed, by the Holder thereof or his attorney duly
authorized in writing, with such signature guaranteed by a brokerage firm or
financial institution that is a member of a Securities Approved Medallion
Program such as
<PAGE>
- 41 -
Securities Transfer Agents Medallion Program (STAMP), Stock Exchange Medallion
Program (SEMP) or New York Stock Exchange Inc. Medallion Signature Program
(MSP).
(j) No service charge shall be made to a Holder for any registration
of transfer or exchange of Certificates, but the Trustee may require payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Certificates, other than exchanges pursuant to Section 5.03 not involving any
transfer.
Section 5.05. Mutilated, Destroyed, Lost and Stolen Certificates. If
--------------------------------------------------
(i) any mutilated Certificate is surrendered to the Trustee at the Delivery
Office or (ii) the Depositor and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate, and there is
delivered to the Depositor and the Trustee such security or indemnity as they
may require to hold each of them and any Paying Agent harmless, and neither the
Depositor nor the Trustee receives notice that such Certificate has been
acquired by a bona fide purchaser, then the Trustee shall execute and, upon
receipt of a Depositor Order, shall authenticate and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of the same Series or Class of like tenor, form, terms and principal
amount, bearing a number not contemporaneously Outstanding.
Upon the issuance of any new Certificate under this Section, the
Trustee may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in respect thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Certificate of any Series or Class issued pursuant to this
Section shall constitute complete and indefeasible evidence of ownership in the
Trust related to such Series, whether or not the destroyed, lost or stolen
Certificate shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Trust Agreement equally and proportionately with any
and all other Certificates of that Series or Class duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Certificates.
Section 5.06. Persons Deemed Owners. (a) The Depositor, the Trustee
---------------------
and any agent of the Depositor or the Trustee may treat the Person in whose name
any Certificate is registered as the owner of such Certificate for the purpose
of receiving distributions of principal of (and premium, if any) and (subject to
Section 4.02) interest, if any, on such Certificate and for all other purposes
whatsoever, whether or not such
<PAGE>
- 42 -
Certificate be overdue, and neither the Depositor or the Trustee, nor any agent
of the Depositor or the Trustee shall be affected by notice to the contrary.
(b) None of the Depositor, the Trustee or any of their agents will
have any responsibility or liability for any aspect of the records relating to
or distributions made on account of beneficial ownership interests in a Global
Security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
Section 5.07. Cancellation. Unless otherwise specified pursuant to
------------
Section 5.01 for Certificates of any Series, all Certificates surrendered for
payment, redemption, transfer or exchange shall, if surrendered to any Person
other than the Trustee, be delivered to the Trustee and shall be promptly
cancelled by the Trustee. No Certificates shall be authenticated in lieu of or
in exchange for any Certificates cancelled as provided in this Section, except
as expressly permitted by this Trust Agreement.
Section 5.08. Global Securities. (a) If the Series Supplement
-----------------
pursuant to Section 5.01 provides that a Series (or Class within such Series) of
Certificates shall be represented by one or more Global Securities, then the
Trustee shall execute and, upon receipt of a Depositor Order, authenticate and
deliver one or more Global Securities that (i) shall represent an aggregate
initial Certificate Principal Balance or Notional Amount, as applicable, equal
to the aggregate initial Certificate Principal Balance or Notional Amount, as
applicable, of the Certificates of such Series or Class to be represented by
such one or more Global Securities, (ii) shall be registered in the name of the
Depository for such Global Security or Securities or the nominee of such
Depository, (iii) shall be delivered by the Trustee to such Depository or
pursuant to such Depository's instruction and (iv) shall bear a legend
substantially to the following effect: "Unless and until it is exchanged in
whole or in part for the individual Certificates represented hereby, this Global
Security may not be transferred except as a whole by the Depository to a nominee
of the Depository or by a nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository."
No Holder of a Certificate of such Series or Class will receive a
Definitive Certificate representing such Holder's interest in such Certificate
or Certificates, except as provided in Section 5.10. Unless and until
definitive, fully registered Certificates (the "DEFINITIVE CERTIFICATES") have
been issued to Holders of such Series or Class pursuant to Section 5.10:
(i) the provisions of this Section 5.08 shall be in full force and
effect;
(ii) the Certificate Registrar and the Trustee shall be entitled to
deal with the Depository for all purposes of
<PAGE>
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this Trust Agreement (including the distribution of principal of, and
premium, if any, and interest on the Certificates and the giving of
instructions or directions hereunder) as the sole Registered Holder of the
Certificates of such Series or Class, and shall have no obligation to the
owners of beneficial interests in such Series or Class (collectively, the
"CERTIFICATE OWNERS");
(iii) to the extent that the provisions of this Section 5.08 conflict
with any other provisions of this Trust Agreement, the provisions of this
Section 5.08 shall control;
(iv) the rights of Certificate Owners of such Series or class shall be
exercised only through the Depository and shall be limited to those
established by law and agreements between such Certificate Owners and the
Depository or its Participants; and
(v) whenever this Trust Agreement requires or permits actions to be
taken based upon instructions or directions of Registered Holders of
Certificates of such Series or Class evidencing a specified percentage of
the aggregate Voting Rights of such Series or Class, the Depository shall
be deemed to represent such percentage only to the extent that it has
received instructions to such effect from Certificate Owners of such Series
or Class or Participants in such Depository's system owning or
representing, respectively, such required percentage of the beneficial
interest in the Certificates of such Series or Class and has delivered such
instructions to the Trustee.
(b) Each Depository designated pursuant to Section 5.01 for a Global
Security must, at the time of its designation and at all times while it serves
as such Depository, be a clearing agency registered under the Exchange Act and
any other applicable statute or regulation.
Section 5.09. Notices to Depository. Whenever a notice or other
---------------------
communication to the Holders of a Series or Class within such Series represented
by one or more Global Securities is required under this Trust Agreement, unless
and until Definitive Certificates for such Series or Class shall have been
issued to such Certificate Owners pursuant to Section 5.10, the Trustee shall
give all such notices and communications specified herein to be given to Holders
of the Certificates of such Series to the Depository, and shall have no
obligation to the Certificate Owners.
Section 5.10. Definitive Certificates. If in respect of a Series (or
-----------------------
Class within such Series) represented by one or more Global Securities (i) the
Depositor advises the Trustee in writing that the Depository is no longer
willing or able to properly discharge its responsibilities with respect to the
Certificates of such Series or Class and the Depositor is unable
<PAGE>
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to locate a qualified successor, (ii) the Depositor at its option advises the
Trustee in writing that it elects to terminate the book-entry system of such
Series or Class through the Depository or (iii) Certificate Owners representing
beneficial interests aggregating at least a majority (or such other Required
Percentage-Definitive Certificates that may be specified in a Series Supplement)
of the Voting Rights of the Certificates of such Series or Class advise the
Depository in writing that the continuation of a book-entry system for such
Series or Class through the Depository is no longer in the best interests of the
Certificates Owners of such Series or Class, then the Depository shall notify
all Certificate Owners or Participants in the Depository's system with respect
to such Series or Class and the Trustee of the occurrence of any such event and
of the availability of Definitive Certificates for such Series or Class to
Certificate Owners of such Series or Class requesting the same.
Upon surrender to the Trustee of the Global Securities of such Series
or Class by the Depository, accompanied by registration instructions, the
Trustee shall execute, authenticate the Definitive Certificates of such Series
or Class in accordance with the instructions of the Depository. None of the
Depositor, the Certificate Registrar or the Trustee shall be liable for any
delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions. Upon the issuance of Definitive
Certificates of Series or Class, the Trustee shall recognize the holders of the
Definitive Certificates of such Series or Class as Holders.
Section 5.11. Conditions of Authentication and Delivery of New
------------------------------------------------
Series. Certificates of a new Series may be issued at any time and from time to
time after the execution and delivery of these Standard Terms and the related
Series Supplement. The Trustee shall execute, authenticate and deliver such
Certificates upon delivery by the Depositor to the Trustee of a Depositor Order
and the following:
(1) The delivery of the Underlying Securities in accordance with
Section 2.01(b);
(2) An Officer's Certificate of the Depositor, dated as of the Closing
Date, to the effect that all of the requirements of this Section 5.11 have
been satisfied, and that the Depositor is not in breach of this Trust
Agreement and that the issuance of the Certificates will not result in any
breach of any of the terms, conditions, or provisions of, or constitute a
default under, the Depositor's Memorandum and Articles of Association, or
any indenture, mortgage, deed of transfer or other agreement or instrument
to which the Depositor is a party or by which it or its property is bound
or any order of any court or administrative agency entered in any
Proceeding to which the Depositor is a party or by which it or its property
may be bound or to which it or its property may be subject;
<PAGE>
- 45 -
(3) A Series Supplement consistent with the applicable provisions of
these Standard Terms;
(4) All agreements, instruments or other documents called for by the
applicable Series Supplement as a condition to the issuance of the
Certificates of such Series;
(5) If applicable, a fully executed copy of the Swap Agreement,
together with all documents and opinions required to be delivered to the
Trust upon execution thereof pursuant to the terms thereof; and
(6) Written instructions by the Depositor to the Trustee directing the
Trustee to enter into and perform any obligations under the Swap Agreement,
if applicable, and/or the Market Agent Agreement, if applicable.
If all the Certificates of a Series are not to be originally issued at
the same time, then the documents required to be delivered pursuant to this
Section 5.11 must be delivered only once, prior to the authentication and
delivery of the first Certificate of such Series; provided, however, that any
subsequent Depositor Order to the Trustee to authenticate Certificates of such
Series upon original issuance shall constitute a representation and warranty by
the Depositor that, as of the date of such request, the statements made in this
Section 5.11 shall be true and correct as if made on such date.
Section 5.12. Appointment of Paying Agent. The Trustee may appoint
---------------------------
one or more paying agents (each, a "PAYING AGENT") with respect to the
Certificates of any Series. Any such Paying Agent shall be authorized to make
distributions to Certificateholders of such Series from the Certificate Account
for such Series pursuant to the provisions of the applicable Series Supplement
and shall report the amounts of such distributions to the Trustee. Any Paying
Agent shall have the revocable power to withdraw funds from such Certificate
Account for the purpose of making the distributions referred to above. The
Trustee may revoke such power and remove the Paying Agent if the Trustee
determines in its sole discretion that the Paying Agent shall have failed to
perform its obligations under this Trust Agreement in any material respect. The
Paying Agent shall initially be the Trustee and any co-paying agent chosen by
the Trustee and acceptable to the Depositor, including, if and so long as any
Series or Class within such Series is listed on the Luxembourg Stock Exchange
and such exchange so requires, a co-paying agent in Luxembourg or another
European city. Any Paying Agent shall be permitted to resign as Paying Agent
upon 30 days' notice to the Trustee. In the event that the Trustee shall no
longer be the Paying Agent, the Trustee shall appoint a successor or additional
Paying Agent. The Trustee shall cause each successor to act as Paying Agent to
execute and deliver to Trustee an instrument in which such successor or
additional Paying Agent shall agree with the Trustee that it will hold all
<PAGE>
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sums, if any, held by it for distribution to the Certificate-holders in trust
for the benefit of the Certificateholders entitled thereto until such sums shall
be distributed to such Certificateholders and will agree to such other matters
as are required by Section 317(b) of the Trust Indenture Act. The Paying Agent
shall return all unclaimed funds to the Trustee and upon removal shall also
return all funds in its possession to the Trustee. The provisions of Sections
7.01, 7.03, 7.04 and 7.06 shall apply to the Trustee also in its role as Paying
Agent, for so long as the Trustee shall act as Paying Agent. Any reference in
this Trust Agreement to the Paying Agent shall include any co-paying agent
unless the context requires otherwise. Notwithstanding anything contained
herein to the contrary, the appointment of a Paying Agent pursuant to this
Section 5.12 shall not release the Trustee from the duties, obligations,
responsibilities or liabilities arising under this Trust Agreement other than
with respect to funds paid to such Paying Agent.
Section 5.13. Authenticating Agent. (a) The Trustee may appoint one
--------------------
or more Authenticating Agents (each, an "AUTHENTICATING AGENT") with respect to
the Certificates of any Series which shall be authorized to act on behalf of the
Trustee in authenticating such Certificates in connection with the issuance,
delivery and registration of transfer or exchange of such Certificates.
Whenever reference is made in this Trust Agreement to the authentication of
Certificates by the Trustee or the Trustee's certificate of authentication, such
reference shall be deemed to include authentication on behalf of the Trustee by
an Authenticating Agent and a certificate of authentication executed on behalf
of the Trustee by an Authenticating Agent. Each Authenticating Agent must be
acceptable to the Depositor. Notwithstanding anything contained herein to the
contrary, the appointment of an Authenticating Agent pursuant to this Section
5.13 shall not release the Trustee from the duties, obligations,
responsibilities or liabilities arising under this Trust Agreement.
(b) Any institution succeeding to the corporate agency business of any
Authenticating Agent shall continue to be an Authenticating Agent without the
execution or filing of any power or any further act on the part of the Trustee
or such Authenticating Agent. An Authenticating Agent may at any time resign by
giving notice of resignation to the Trustee and to the Depositor. The Trustee
may at any time terminate the agency of an Authenticating Agent by giving notice
of termination to such Authenticating Agent and to the Depositor. Upon
receiving such a notice of resignation or upon such a termination, or in case at
any time an Authenticating Agent shall cease to be acceptable to the Trustee or
the Depositor, the Trustee promptly may appoint a successor Authenticating
Agent. Any successor Authenticating Agent upon acceptance of its appointment
hereunder shall become vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be
<PAGE>
- 47 -
appointed unless acceptable to the Depositor. The Trustee agrees to pay to each
Authenticating Agent from time to time reasonable compensation for its services
under this Section. The provisions of Section 7.01, 7.03 and 7.04 shall be
applicable to any Authenticating Agent.
(c) Pursuant to an appointment made under this Section, the
Certificates may have endorsed thereon, in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication in substantially the
following form:
"This is one of the Certificates described in the Standard Terms and
the related Series Supplement.
NAME OF TRUSTEE,
not in its individual
capacity but solely as
Trustee,
By:___________________________
Authorized Officer"
Section 5.14. Voting Rights with Respect to Underlying Securities.
---------------------------------------------------
(a) Within five Business Days after receipt of notice of any meeting of, or
other occasion for the exercise of voting rights or the giving of consents
("VOTING RIGHTS") by, owners of any of the Underlying Securities, the Trustee
shall give notice to the Certificateholders, setting forth (i) such information
as is contained in such notice to owners of Underlying Securities, (ii) a
statement that the Certificateholders will be entitled, subject to any
applicable provision of law and any applicable provisions of such Underlying
Securities (and to the extent of the voting rights allocated to the
Certificateholders pursuant to Section 5.14(b)), to instruct the Trustee as to
the exercise of voting rights, if any, pertaining to such Underlying Securities
and (iii) a statement as to the manner in which instructions may be given to the
Trustee to give a discretionary proxy to a person designated in the notice
received by the Trustee. Such notice shall be given by the Trustee to the
Certificateholders of record on such Record Date.
Upon the written request of the applicable Certificateholder, received
on or before the date established by the Trustee for such purpose, the Trustee
shall endeavor, insofar as practicable and permitted under any applicable
provision of law and any applicable provision of or governing the Underlying
Securities, to vote in accordance with any nondiscretionary instruction set
forth in such written request. The Trustee shall not vote except as
specifically authorized and directed in written instructions from the applicable
Certificateholder entitled to give such instructions. Notwithstanding the
foregoing, if the Trustee determines (based upon advice furnished
<PAGE>
- 48 -
by nationally recognized independent tax counsel, whether at the request of any
Certificateholder or otherwise) that the exercise of voting rights with respect
to any Underlying Securities could result in a "sale or other disposition" of
such Underlying Securities within the meaning of Section 1001(a) of the Internal
Revenue Code of 1986, as amended, the Trustee shall exercise such voting rights
in a manner that would not result in any such sale or other disposition. The
Trustee will have no responsibility to undertake on its own initiative to
determine that any exercise of voting rights will result in any such sale or
other disposition.
(b) Unless otherwise specified in the applicable Series Supplement,
the voting rights allocable to the owners of the Underlying Securities pursuant
to the terms thereof shall be allocated among the Certificateholders pro rata,
in the proportion that the denomination of each Certificate bears to the
aggregate denomination of all Certificates.
(c) By accepting delivery of a Certificate, whether upon original
issuance or subsequent transfer, exchange or replacement thereof, and without
regard to whether ownership is beneficial or otherwise, the Certificateholder
agrees so long as it is an owner of such Certificate that it shall not grant any
consent (i) to any conversion of the timing of payment of, or the method or rate
of accruing, interest on the Underlying Securities underlying the Certificates
held by such Certificateholder or (ii) to any redemption or prepayment of the
Underlying Securities underlying the Certificates held by such
Certificateholder. The Trustee shall not grant any consent solicited from the
owners of the Underlying Securities underlying the Certificates with respect to
the matters set forth in this Section nor shall it accept or take any action in
respect of any consent, proxy or instructions received from any
Certificateholder in contravention of the provisions of this Section.
Section 5.15. Actions by Certificateholders. (a) Wherever in this
-----------------------------
Trust Agreement a provision is made that an action may be taken or a notice,
demand or instruction given by Certificateholders or Beneficial Owners, such
action, notice or instruction may be taken or given by any Certificateholder or
Beneficial Owner.
(b) Each Certificateholder or Beneficial Owner shall have the right to
assert any rights and privileges of a Certificateholder or Beneficial Owner, and
shall have the right to proceed directly and individually against any Person to
enforce any remedies hereunder and shall not be required to act in concert with
any other Certificateholder or Beneficial Owner or any other Person.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Certificateholder or Beneficial Owner of a Certificate
shall bind such Certificateholder or Beneficial Owner and every subsequent
Certificateholder or Beneficial Owner of such Certificate or any
<PAGE>
- 49 -
Certificate issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, suffered or omitted to
be done by the Certificateholder or Beneficial Owner or the Trustee in reliance
thereon, whether or not notation of such action is made upon such Certificate.
(d) Certificateholders of Certificates are beneficial owners of the
right to receive principal payments and interest payments to which such
Certificates relate and, as such, will have the right following an event of
default with respect to any Underlying Security to proceed directly against the
Underlying Securities Issuer(s). Such Certificateholders are not required to
join other Certificateholders of Certificates, the Depositor or the Trustee in
order to proceed against the Underlying Securities Issuer(s).
Section 5.16. Events of Default. If any Event of Default shall occur
-----------------
and be continuing with respect to any Class of Certificates, then, and in each
and every case, the Trustee shall exercise any rights in respect of the related
Underlying Securities as provided in the applicable Series Supplement.
Section 5.17. Judicial Proceedings Instituted by Trustee; Trustee May
-------------------------------------------------------
Bring Suit. If there shall be a failure to make payment of the principal of or
- ----------
premium, if any, or interest on any Underlying Security, then the Trustee, in
its own name, and as trustee of an express trust, as holder of such Underlying
Security, shall be, to the extent permitted by and in accordance with the terms
of the Underlying Security, subject to the limitations on acceleration and the
exercise of remedies set forth therein, entitled and empowered to institute any
suits, actions or proceedings at law, in equity or otherwise, including the
power to make a demand on the trustee in respect of such Underlying Security, if
provided for, to take action to enforce the Underlying Security for the
collection of the sums so due and unpaid on such Underlying Security and may
prosecute any such claim or proceeding to judgment or final decree with respect
to the whole amount of any such sums so due and unpaid.
Section 5.18. Control by Certificateholders. The Holders of
-----------------------------
Certificates of any Class holding Certificates representing not less than the
Required Percentage-Direction of Trustee of the aggregate Voting Rights of the
Outstanding Certificates of such Class shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee under this
Trust Agreement, including any right of the Trustee as holder of the Underlying
Securities; provided, that:
(1) such direction shall not be in conflict with any rule of law or
with this Trust Agreement and would not involve the Trustee in personal
liability or expense;
<PAGE>
- 50 -
(2) the Trustee shall not determine that the action so directed would
be unjustly prejudicial to the Holders of Certificates of such Class not
taking part in such direction;
(3) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
Section 5.19. Waiver of Past Defaults. The Holders of the Required
-----------------------
Percentage-Waiver of Certificates of any Series may direct the Trustee to vote
such percentage of the Underlying Securities held by the Trustee as corresponds
to the percentage of the aggregate Principal Amount of the Certificates of such
Series held by such Holders to waive any past Event of Default thereunder with
respect to such Series of Certificates and its consequences or may instruct the
Trustee to waive any past default under this Trust Agreement and its
consequences, except a default:
(1) in the payment of the principal of or premium, if any, or interest
on the Underlying Securities;
(2) in respect of a covenant or provision hereof which under Article
VIII hereof cannot be modified or amended without the consent of the Holder
of each Outstanding Certificate affected; or
(3) specified in the applicable Series Supplement, if any, unless the
applicable Series Supplement provides otherwise.
Upon any such direction, the Trustee shall vote such percentage of the
Underlying Securities of the corresponding Series held by the Trustee as
corresponds to the percentage of the aggregate Principal Amount of the
Outstanding Certificates of such Series held by Holders who directed the Trustee
to waive such default or Event of Default thereunder. Upon any waiver that is
effective under the terms of such Class of Underlying Securities to waive such
default or Event of Default, such default or Event of Default shall cease to
exist with respect to this Trust Agreement, and, in the case of a default, any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Trust Agreement and any direction given by the Trustee on behalf
of such Certificateholders or in respect of any Underlying Securities shall be
annulled with respect thereto; but no such waiver shall extend to any subsequent
or other default or Event of Default or impair any right consequent thereon.
Section 5.20. Right of Certificateholders to Receive Payments Not to
------------------------------------------------------
Be Impaired. Anything in this Trust Agreement to the contrary notwithstanding,
- -----------
the right of any Certificateholder to receive distributions of payments required
pursuant to Section 4.01 hereof on the Certificates when due, or to institute
<PAGE>
- 51 -
suit for enforcement of any such payment on or after the applicable Distribution
Date or other date specified herein for the making of such payment, shall not be
impaired or affected without the consent of such Certificateholder.
Section 5.21. Remedies Cumulative. Every remedy given hereunder to
-------------------
the Trustee or to any of the Certificateholders shall not be exclusive of any
other remedy or remedies, and every such remedy shall be cumulative and in
addition to every other remedy given hereunder or now or hereafter given by
statute, law, equity or otherwise.
ARTICLE VI
THE DEPOSITOR
Section 6.01. Liability of the Depositor. The Depositor shall be
--------------------------
liable in accordance herewith only to the extent of the obligations specifically
imposed by these Standard Terms and the related Series Supplement.
Section 6.02. Limitation on Liability of the Depositor. (a) The
----------------------------------------
Depositor shall not be under any obligation to expend or risk its own funds or
otherwise incur financial liability in the performance of its duties hereunder
or under a Series Supplement or in the exercise of any of its rights or power if
reasonable grounds exist for believing that the repayment or such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it.
(b) Neither the Depositor nor any of its directors, officers,
employees or agents shall be under any liability to any Trust or the
Certificateholders of any Series for any action taken, or for refraining from
the taking of any action, in good faith pursuant to this Trust Agreement, or for
errors in judgment; provided, however, that this provision shall not protect the
Depositor against any breach of representations, warranties or covenants made
herein, or against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder.
(c) The Depositor shall not be under any obligation to appear in,
prosecute or defend any legal action unless such action is related to its
respective duties under this Trust Agreement and, in its opinion, does not
involve it in any expense or liability; provided, however, that the Depositor
may in its discretion undertake any such action which it may deem necessary or
desirable with respect to this Trust Agreement and the rights and duties of the
parties hereto and the interests of the Certificateholders hereunder. The
Depositor shall be under no obligation whatsoever to appear in, prosecute or
defend any
<PAGE>
- 52 -
action, suit or other proceeding in respect of any Underlying Securities.
(d) The Depositor shall not be liable to any Certificateholder for any
action or non-action by it in reliance upon the advice of or information from
legal counsel, accountants, any Certificateholder of a Certificate or any other
person believed by it in good faith to be competent to give such advice or
information, including, without limitation, the Calculation Agent, the Market
Agent or the other party to this Trust Agreement. The Depositor may rely and
shall be protected in acting upon any written notice, request, direction or
other document believed by it to be genuine and to have been signed or presented
by the proper party or parties.
(e) The Depositor shall not incur any liability to any
Certificateholder if, by reason of any provision of any present or future law,
or regulation thereunder, or any governmental authority, or by any reason of any
act of God or war or other circumstance beyond the control of the relevant
party, the Depositor shall be prevented or forbidden from doing or performing
any act or thing which the terms of this Trust Agreement provide shall be done
or performed; and the Depositor shall not incur any liability to any
Certificateholder by reason of any non-performance or delay, caused as
aforesaid, in the performance of any act or thing which the terms of this Trust
Agreement provide shall or may be done or performed, or by reason of any
exercise of, or failure to exercise, any discretion provided for in this Trust
Agreement.
Section 6.03. Depositor May Purchase Certificates. The Depositor may
-----------------------------------
at any time purchase Certificates in the open market or otherwise. Certificates
so purchased by the Depositor may, at the discretion of the Depositor, be held
or resold. Certificates beneficially owned by the Depositor will be disregarded
for purposes of determining whether the required percentage of the aggregate
Voting Rights has given any request, demand, authorization, direction, notice,
consent or waiver hereunder.
Section 6.04. Merger or Consolidation of the Depositor. Nothing in
----------------------------------------
this Trust Agreement shall prevent any consolidation or merger of the Depositor
with or into any other corporation, or any consolidation or merger of any other
corporation with or into the Depositor or any sale or transfer of all or
substantially all of the property and assets of the Depositor to any other
Person lawfully entitled to acquire the same; provided, however, that, so long
as Certificates are outstanding hereunder, the Depositor covenants and agrees
that any such consolidation, merger, sale or transfer shall be upon the
condition that the due and punctual performance and observance of all the terms,
covenants and conditions of this Trust Agreement to be kept or performed by the
Depositor shall be assumed by the Person (if other than the Depositor) formed by
or resulting from any such consolidation or merger, or which shall
<PAGE>
- 53 -
have received the transfer of all or substantially all of the property and
assets of the Depositor, just as fully and effectually as if successor Person
had been the original party of the first part hereto; and in the event of any
such sale or transfer the predecessor Depositor may be dissolved, wound up and
liquidated at any time thereafter.
Section 6.05. No Liability of the Depositor with Respect to the
-------------------------------------------------
Underlying Securities; Certificateholders to Proceed Directly Against the
- -------------------------------------------------------------------------
Underlying Securities Issuer(s). (a) The sole obligor with respect to any
- -------------------------------
Underlying Security is the Underlying Securities Issuer(s). The Depositor shall
not have any obligation on or with respect to the Underlying Securities; and its
obligations with respect to Certificates shall be solely as set forth in this
Trust Agreement.
(b) The Depositor is not authorized to proceed against the Underlying
Securities Issuer in the event of a default or to assert the rights and
privileges of Certificateholders of Certificates and has no duty in respect
thereof.
ARTICLE VII
CONCERNING THE TRUSTEE
Section 7.01. Duties of Trustee. (a) The Trustee undertakes to
-----------------
perform such duties and only such duties as are specifically set forth in these
Standard Terms and the related Series Supplement. In case an Event of Default
has occurred and is continuing, the Trustee shall exercise such of the rights
and powers vested in it by this Trust Agreement, and shall use the same degree
of care and skill in their exercise, as a prudent man would exercise or use
under the circumstances in the conduct of such person's own affairs. The
Trustee shall exercise those rights in a manner consistent with the status of
any Trust created hereunder as a fixed investment trust for federal income tax
purposes. The Trustee shall not have any power to vary the investment of any
Certificateholders of any Series or to accept any assets (other than proceeds of
the Underlying Securities) other than the Underlying Securities transferred to
it on the Closing Date of any Series. Any permissive right of the Trustee
enumerated in this Trust Agreement shall not be construed as a duty and shall be
interpreted consistently with the status of the Trust as a fixed investment
trust.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Trust Agreement, shall examine them to determine whether they
conform to the requirements of this Trust Agreement. If any such instrument is
found not to conform to the requirements of this Trust Agreement, the Trustee
shall take action as it deems appropriate to have the instrument corrected, and
if the
<PAGE>
- 54 -
instrument is not corrected to the Trustee's satisfaction, the Trustee will
provide notice thereof to the Depositor and Certificateholders.
(c) No provision of this Trust Agreement shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act or its own misconduct; provided, however, that:
(i) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Trust Agreement, the Trustee shall
not be liable except for the performance of such duties and obligations as
are specifically set forth in this Trust Agreement, no implied covenants or
obligations shall be read into this Trust Agreement against the Trustee
and, in the absence of bad faith on the part of the Trustee, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee that conform to the requirements of this
Trust Agreement;
(ii) the Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of Holders of the Required Percentage-
Direction of Trustee of the aggregate Voting Rights of a given Series (or
Class or group of Classes within such Series), as specified in the
applicable Series Supplement relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this Trust
Agreement;
(iv) the Trustee shall not be required to expend or risk its own funds
or otherwise incur financial liability in the performance of any of its
duties hereunder or in the exercise of any of its rights or powers if there
is reasonable ground for believing that the repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured
to it;
(v) except for actions expressly authorized by this Trust Agreement,
the Trustee shall take no actions reasonably likely to impair the interests
of the Trust in any Underlying Security now existing or hereafter acquired
or to impair the value of any Underlying Security now existing or hereafter
acquired;
<PAGE>
- 55 -
(vi) except as expressly provided in this Trust Agreement, the Trustee
shall have no power to vary the corpus of the Trust including by (A)
accepting any substitute obligation or asset for an Underlying Security
initially assigned to the Trustee under Section 2.01, (B) adding any other
investment, obligation or security to the Trust or (C) withdrawing from the
Trust any Underlying Securities;
(vii) in the event that the Paying Agent or the Registrar shall fail
to perform any obligation, duty or agreement in the manner or on the day
required to be performed by the Paying Agent or Registrar, as the case may
be, under this Trust Agreement, the Trustee shall be obligated promptly
upon its knowledge thereof to perform such obligation, duty or agreement in
the manner so required;
(viii) the Trustee shall not be liable to any Certificateholder for
any action or non-action by it in reliance upon the advice of or
information from legal counsel, accountants, any Certificateholder of a
Certificate or any other person believed by it in good faith to be
competent to give such advice or information, including, without
limitation, the Calculation Agent, the Market Agent or the other party to
this Trust Agreement. The Trustee may rely and shall be protected in
acting upon any written notice, facsimile transmission, request, direction
or other document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ix) the Trustee shall not incur any liability to any
Certificateholder if, by reason of any provision of any present or future
law, or regulation thereunder, or any governmental authority, or by any
reason of any act of God or war or other circumstance beyond the control of
the relevant party, the Trustee shall be prevented or forbidden from doing
or performing any act or thing which the terms of this Trust Agreement
provide shall be done or performed; and the Trustee shall not incur any
liability to any Certificateholder by reason of any non-performance or
delay, caused as aforesaid, in the performance of any act or thing which
the terms of this Trust Agreement provide shall or may be done or
performed, or by reason of any exercise of, or failure to exercise, any
discretion provided for in this Trust Agreement;
(x) the Trustee shall be under no obligation whatsoever to appear in,
prosecute or defend any action, suit or other proceeding in respect of any
Underlying Securities;
(xi) whenever in the administration of this Trust Agreement the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the Trustee
(unless other
<PAGE>
- 56 -
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, conclusively rely upon an Officers' Certificate; and
(xii) the Trustee may consult with counsel of its selection and, in
the absence of bad faith or willful misconduct, the advice of such counsel
or any Opinion of Counsel selected by the Trustee with due care shall be
full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in reliance thereon.
(d) As promptly as practicable after, and in any event within 10 days
after, the occurrence of any default (as such term is defined below) hereunder
with respect to any Class of Certificates, the Trustee shall transmit by mail to
the Depositor and the Holders of Certificates of such Class in accordance with
Section 313(c) of the Trust Indenture Act, notice of such default hereunder
known to the Trustee, unless such default shall have been cured or waived;
provided, however, that, except in the case of a default in the payment of the
principal of or premium, if any, or interest on any Underlying Security, the
Trustee shall be protected in withholding such notice if and so long as a trust
committee of Responsible Officers of the Trustee in good faith determine that
the withholding of such notice is in the interests of the Holders of the
Certificates of such Class. For the purpose of this Section, the term "DEFAULT"
means, with respect to any Class of Certificates, any event that is, or after
notice or lapse of time or both would become, an Event of Default with respect
to such Class of Certificates.
(e) Within five Business Days after the receipt by the Trustee of a
written application by any three or more Certificateholders stating that the
applicants desire to communicate with other Certificateholders with respect to
their rights under this Trust Agreement or under the Certificates, and
accompanied by a copy of the form of proxy or other communication which such
applicants propose to transmit, and by reasonable proof that each such applicant
has owned its Certificates for a period of at least six months preceding the
date of such application, the Trustee shall, at its election, either:
(i) afford to such applicants access to all information so furnished
to or received by the Trustee; or
(ii) inform such applicants as to the approximate number of
Certificateholders according to the most recent information so furnished to
or received by the Trustee, and as to the approximate cost of mailing to
such Certificateholders the form of proxy or other communication, if any,
specified in such application.
If the Trustee shall elect not to afford to such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to all such Certificateholders
<PAGE>
- 57 -
copies of the form of proxy or other communication which is specified in such
request, with reasonable promptness after a tender to the Trustee of the
material to be mailed and of payment, or provision for the payment, of the
reasonable expenses of such mailing.
Section 7.02. Between Trustee and Sub-Administrative Agents. (a)
---------------------------------------------
Unless otherwise provided in a Series Supplement, the Trustee may enter into
Sub-Administration Agreements with one or more Sub-Administrative Agents in
order to delegate certain of its administrative obligations with respect to a
related Series under this Trust Agreement to such Sub-Administrative Agents;
provided, however, that (i) such delegation shall not release the Trustee from
the duties, obligations, responsibilities or liabilities arising under this
Trust Agreement; (ii) the Rating Agency Condition shall have been satisfied with
respect to the entering into of any such agreement and (iii) such agreements are
consistent with the terms of these Standard Terms and, with respect to
Certificates of any Series, the related Series Supplement. With respect to any
Series (or Class within such Series) of Certificates, each Sub-Administration
Agreement shall impose on the Sub-Administrative Agent requirements conforming
to the provisions set forth in Section 3.01 and provide for administration of
the related Trust and all or certain specified Underlying Securities for such
Series consistent with the terms of this Trust Agreement. Additional
requirements relating to the scope and contents of any Sub-Administration
Agreement may be provided in the applicable Series Supplement. The Trustee
shall deliver to the Depositor copies of all Sub-Administration Agreements which
it enters into, and any amendments or modifications thereof, promptly upon the
Trustee's execution and delivery of any such instruments.
(b) The Trustee shall be entitled to terminate any Sub-Administration
Agreement which it enters into and the rights and obligations of any Sub-
Administrative Agent under any Sub-Administration Agreement in accordance with
the terms and conditions of any such Sub-Administration Agreement. In the event
of a termination of any Sub-Administration Agreement, the Trustee shall
simultaneously reassume direct responsibility for all obligations delegated in
such Sub-Administration Agreement without any act or deed on the part of the
applicable Sub-Administrative Agent, the Trustee shall administer directly the
related Underlying Securities or shall enter into a Sub-Administration Agreement
with a successor Sub-Administrative Agent which so qualifies under Section 7.02.
(c) Unless otherwise provided in the applicable Series Supplement, in
the event a Sub-Administrative Agent is administering one or more Underlying
Securities pursuant to a Sub-Administration Agreement, the Sub-Administrative
Agent shall be required immediately to direct the Trustee to deposit into an
Eligible Account established by such Sub-Administrative Agent (a "SUB-
ADMINISTRATION ACCOUNT") any amounts collected with respect thereto, and all
such amounts shall be deposited into the related
<PAGE>
- 58 -
Certificate Account not later than the Business Day after receipt thereof.
Section 7.03. Certain Matters Affecting the Trustee. (a) Except as
-------------------------------------
otherwise provided in this Article VII:
(i) the Trustee may request and rely upon and shall be protected in
acting or refraining from acting upon any resolution, Officer's
Certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, facsimile transmission, request,
consent, order, appraisal, bond or other paper or document reasonably
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(ii) the Trustee may consult with counsel and any Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and in
accordance with such Opinion of Counsel;
(iii) the Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Trust Agreement or to institute,
conduct or defend any litigation hereunder or in relation hereto, at the
request, order or direction of any of the Certificateholders, pursuant to
the provisions of this Trust Agreement, unless such Certificateholders
shall have offered to the Trustee reasonable security or indemnity against
the costs, expenses and liabilities which may be incurred therein or
thereby;
(iv) the Trustee shall not be personally liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this
Trust Agreement;
(v) the Trustee shall not be bound to make any investigation into the
facts of matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, facsimile transmission, request,
consent, order, appraisal, approval, bond or other paper or document
believed by it to be genuine, unless requested in writing to do so by
Holders of the Required Percentage-Direction of Trustee of the aggregate
Voting Rights of the affected Series (or Class or Classes within any such
Series), as specified by the applicable Series Supplement; provided,
however, that if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the making of
such investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms of this
Trust Agreement, the Trustee may require reasonable indemnity against such
expense or liability as a condition to taking any such action;
<PAGE>
- 59 -
(vi) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian; and
(vii) the Trustee shall not be personally liable for any loss
resulting from the investment of funds held in any Certificate Account or
Reserve Account in accordance with Section 3.05.
(b) All rights of action under this Trust Agreement or under any of
the Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates of any Series (or Class within such
Series), or the production thereof at the trial or other Proceeding relating
thereto, and any such suit, action or proceeding instituted by the Trustee shall
be brought in its name for the benefit of all the Holders of such Certificates,
subject to the provisions of this Trust Agreement.
Section 7.04. Trustee Not Liable for Recitals in Certificates or
--------------------------------------------------
Underlying Securities. The Trustee assumes no responsibility for the
- ---------------------
correctness of the recitals contained herein and in the Certificates or in any
document issued in connection with the sale of the Certificates (other than the
signature and authentication on the Certificates). Except as set forth in
Section 7.10, the Trustee makes no representations or warranties as to the
validity or sufficiency of this Trust Agreement or of the Certificates of any
Series (other than the signature and authentication on the Certificates) or of
any Underlying Security or related document. The Trustee shall not be
accountable for the use or application by the Depositor, of any of the
Certificates or of the proceeds of such Certificates.
Section 7.05. Trustee May Own Certificates. The Trustee in its
----------------------------
individual capacity or any other capacity may become the owner or pledgee of
Certificates with the same rights it would have if it were not Trustee;
provided, however, that in determining whether the required percentage of
aggregate Voting Rights shall have consented to any action hereunder requiring
the consent of the Certificateholders, the Trustee's interest shall be excluded.
Section 7.06. Trustee's Fees and Expenses. (a) The applicable Series
---------------------------
Supplement shall specify the amount and circumstances of the Trustee's
compensation and the source thereof.
(b) If the Prepaid Ordinary Expenses set forth in the Series
Supplement is greater than zero, the Trustee acknowledges that the Depositor has
paid to the Trustee an amount equal to the Prepaid Ordinary Expenses, and the
Trustee agrees that the payment of such amount shall constitute full and final
satisfaction of and payment for all Ordinary Expenses.
<PAGE>
- 60 -
(c) If the Prepaid Ordinary Expenses set forth in the Series
Supplement is zero, the Series Supplement may indicate that Ordinary Expenses
will be paid for by the Trust, in which case the Trustee shall be paid on a
periodic basis by the Trust or the Retained Interest at the rate or amount and
on the terms provided for in the Series Supplement. The Trustee agrees that its
right to receive such payments from the Trust shall constitute full and final
satisfaction of and payment for all Ordinary Expenses and that the Trustee shall
have no claim on payment of Ordinary Expenses from any other source, including
the Depositor.
(d) If the Prepaid Ordinary Expenses set forth in the Series
Supplement is zero, the Series Supplement may provide that the Depositor shall
pay to the Trustee from time to time a fee for its services and expenses as
Trustee as set forth in the Series Supplement payable at the times set forth
therein. The Trustee agrees that its right to receive such payments from the
Depositor shall constitute full and final satisfaction of and payment for all
Ordinary Expenses and that the Trustee shall have no claim for payment of
Ordinary Expenses from the Trust. The Trustee further agrees that,
notwithstanding any failure by the Depositor to make such periodic payments of
the Ordinary Expenses, the Trustee shall continue to perform its obligations
under this Trust Agreement. The Depositor's obligations to pay Ordinary
Expenses under this Trust Agreement shall be extinguished and of no further
effect upon the payment of Ordinary Expenses due and owing on the termination of
the Trust pursuant to Section 9.01 hereof.
(e) Subject to subsection 7.06(f), all Extraordinary Expenses, to the
extent not paid by a third party are, and shall be, obligations of the Trust and
when due and payable shall be satisfied solely by the Trust.
(f) The Trustee shall not take any action, including appearing in,
instituting or conducting any action or suit hereunder or in relation hereto and
is not indemnifiable under Section 7.11 hereof which, in the Trustee's opinion,
would or might cause it to incur costs, expenses or liabilities that are
Extraordinary Expenses unless (i) the Trustee is satisfied that it will have
adequate security or indemnity in respect of such costs, expenses and
liabilities, (ii) the Trustee has been instructed to do so by Certificateholders
representing not less than the Required Percentage-Remedies of the aggregate
principal amount of Certificates then outstanding, and (iii) the
Certificateholders, pursuant to the instructions given under clause (ii) above,
have agreed that such costs, expenses or liabilities shall either be (x) paid by
the Trustee from the Trust, in the case of a vote of 100% of the aggregate
principal amount of Certificates then outstanding, or (y) paid by those
Certificateholders who have agreed to bear the entire amount of such costs,
expenses or liabilities, on a pro rata basis among such Certificateholders.
<PAGE>
- 61 -
Section 7.07. Eligibility Requirements for Trustee. (a) The Trustee
------------------------------------
hereunder shall at all times be a corporation or an association which is not an
Affiliate of the Depositor (but may have normal banking relationships with the
Depositor and its Affiliates) organized and doing business under the laws of any
State or the United States, authorized under such laws to exercise corporate
trust powers which shall be eligible to act as a trustee under Section 310(a) of
the Trust Indenture Act, having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by Federal or State
authority. If such corporation or association publishes reports of conditions
at least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section the
combined capital and surplus of such corporation or association shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
conditions so published. In the event that at any time such Trustee shall cease
to be eligible in accordance with the provisions of this Section, such Trustee
shall resign immediately in the manner and with the effect specified in Section
7.08.
(b) In determining whether the Trustee has a conflicting interest with
respect to any Class of Certificates under Section 310(b) of the Trust Indenture
Act and this Section, each other Class of Certificate will be treated as having
been issued under an indenture other than this Trust Agreement.
Section 7.08. Resignation or Removal of the Trustee; Appointment of
-----------------------------------------------------
Successor Trustee. (a) The Trustee may at any time resign as Trustee hereunder
- -----------------
by written notice of its election so to do, delivered to the Depositor, and such
resignation shall take effect upon the appointment of a successor Trustee and
its acceptance of such appointment as hereinafter provided; provided, however,
that in the event of such resignation, the Trustee shall (a) assist the
Depositor in finding a successor Trustee acceptable to the Depositor and (b)
negotiate in good faith concerning any prepaid but unaccrued fees.
(b) The Depositor or Holders of the Required Percentage-Removal of
Trustee of Certificates may at any time remove the Trustee as Trustee hereunder
by written notice delivered to the Trustee in the manner provided in Section
10.04 hereof, and such removal shall take effect upon the appointment of the
successor trustee and its acceptance of such appointment as provided in the
succeeding paragraph; provided, however, that in the event of such removal, the
Depositor shall negotiate in good faith with the Trustee in order to agree
regarding payment of the termination costs of the Trustee resulting from such
removal.
(c) Upon the designation of a successor Trustee, following either
resignation or removal of the Trustee, the Trustee shall deliver to the
successor Trustee all records relating to the Certificates in the form and
manner then
<PAGE>
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maintained by the Trustee, which shall include a hard copy thereof upon written
request of the successor Trustee.
(d) If at any time the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property of affairs for the purpose of
rehabilitation, conservation or liquidation, the Depositor shall petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee. In the event the Trustee resigns or is
removed, the Trustee shall reimburse the Depositor for any fees or charges
previously paid to the Trustee in respect of duties not yet performed under this
Trust Agreement which remain to be performed by a successor Trustee.
(e) In case at any time the Trustee acting hereunder notifies the
Depositor that it elects to resign or the Depositor or Holders of the Required
Percentage-Removal of Trustee of Certificates notifies or notify the Trustee
that it or they elects or elect to remove the Trustee as Trustee, the Depositor
shall, within 90 days after the delivery of the notice of resignation or
removal, appoint a successor Trustee, which shall satisfy the requirements for a
trustee under Section 7.07. If no successor Trustee has been appointed within
90 days after the Trustee has given written notice of its election to resign or
the Depositor or Holders of the Required Percentage-Removal of Trustee of
Certificates have given written notice to the Trustee of its or their election
to remove the Trustee, as the case may be, the Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee. Every
successor Trustee shall execute and deliver to its predecessor and to the
Depositor an instrument in writing accepting its appointment hereunder, and
thereupon such successor Trustee, without any further act or deed, shall become
fully vested with all the rights, powers, duties and obligations of its
predecessor and for all purposes shall be the Trustee under this Trust
Agreement, and such predecessor, upon payment of all sums due it and on the
written request of the Depositor, shall execute and deliver an instrument
transferring to such successor all rights, obligations and powers of such
predecessor hereunder, and shall duly assign, transfer and deliver all right,
title and interest in the Underlying Securities and parts thereof to such
successor. Any successor Trustee shall promptly give notice of its appointment
to the Certificateholders of Certificates for which it is successor Trustee in
the manner provided in Section 10.04 hereof.
(f) Any corporation into or with which the Trustee may be merged,
consolidated or converted shall be the successor of such Trustee without the
execution or filing of any document or any further act.
Section 7.09. Appointment of Office or Agency. As specified in a
-------------------------------
Series Supplement, the Trustee shall appoint an office or agency in The City of
New York where the Certificates
<PAGE>
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may be surrendered for registration of transfer or exchange, and presented for
the final distribution with respect thereto, and where notices and demands to or
upon the Trustee in respect of the Certificates of the related Series and this
Trust Agreement may be served.
Section 7.10. Representations and Warranties of Trustee. The Trustee
-----------------------------------------
represents and warrants that:
(i) the Trustee is duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation or
association;
(ii) neither the execution nor the delivery by the Trustee of this
Trust Agreement, nor the consummation by it of the transactions
contemplated hereby nor compliance by it with any of the terms or
provisions hereof will contravene any Federal or New York law, governmental
rule or regulation governing the banking or trust powers of the Trustee or
any judgment or order binding on it, or violate its charter documents or
by-laws or constitute a default under (or an event which, without notice or
lapse of time or both, would constitute a default) under, or result in the
breach or acceleration of any material contract, indenture, mortgage,
agreement or instrument to which it is a party or by which any of its
properties may be bound.
(iii) the Trustee has full power, authority and right to execute,
deliver and perform its duties and obligations as set forth herein and in
each Series Supplement to which it is a party and has taken all necessary
action to authorize the execution, delivery and performance by it of this
Trust Agreement;
(iv) this Trust Agreement has been duly executed and delivered by the
Trustee and constitutes the legal, valid and binding obligation of the
Trustee, enforceable in accordance with its terms, except as enforcement
may be limited by the applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally and
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law);
(v) the Trustee is not in violation, and the execution and delivery of
the Trust Agreement by the Trustee and its performance and compliance with
the terms thereof will not constitute a violation, of any order or decree
of any court or any order or regulation of any federal, state, municipal or
governmental agency having jurisdiction over the Trustee or its properties,
which violation would reasonably be expected to have a material adverse
effect on the condition (financial or otherwise) or operations of the
Trustee or its properties or on the performance of its duties hereunder;
<PAGE>
- 64 -
(vi) there are no actions or proceedings against, or investigations
of, the Trustee pending, or, to the knowledge of the Trustee, threatened,
before any court, administrative agency or other tribunal (A) that could
reasonably be expected to prohibit its entering into the Trust Agreement,
(B) seeking to prevent the issuance of the Certificates contemplated by the
Trust Agreement or (C) that could reasonably affect the performance by the
Trustee of its obligations under, or the validity or enforceability against
the Trustee of, the Trust Agreement; and
(vii) no consent, approval, authorization or order of any court,
governmental agency or body is required for the execution, delivery and
performance by the Trustee of, or compliance by the Trustee with, the Trust
Agreement, or for the consummation of the transactions contemplated by the
Trust Agreement, except for such consents, approvals, authorizations and
orders, if any, that have been obtained prior to the Closing Date.
The representations and warranties of the Trustee set forth in this Section 7.10
shall survive the receipt of Underlying Securities by the Trustee and shall
survive the delivery of the Trust Agreement by the Trustee to the Depositor.
Section 7.11. Indemnification of Trustee by the Depositor;
--------------------------------------------
Contribution. (a) The Depositor agrees, to the extent the Trustee is not
- ------------
reimbursed pursuant to Section 7.06 hereof, to indemnify the Trustee against,
and hold it harmless from, any loss, expense or liability incurred in connection
with any legal action relating to this Trust Agreement or the Certificates or
the performance of any of the Trustee's duties hereunder, other than any loss,
liability or expense (i) that constitutes a specific liability of the Trustee
under this Trust Agreement or (ii) incurred by reason of wilful misfeasance, bad
faith or negligence in the performance of the Trustee's duties hereunder or by
reason of reckless disregard of the Trustee's obligations and duties hereunder
or as a result of a breach of the Trustee's obligations and duties hereunder.
(b) If the indemnification provided for in the preceding paragraph is
invalid or unenforceable in accordance with its terms, then the Depositor shall
contribute to the amount paid or payable by the Trustee as a result of such
liability in such proportion as is appropriate to reflect the relative benefits
received by the Depositor on one hand and the Trustee as Trustee on the other
hand. For this purpose (i) the benefits received by the Depositor shall be the
aggregate amount received by it upon the sale of such Certificates, less the
costs and expenses of such sale, including the cost of acquisition of the
Underlying Securities or parts thereof evidenced thereby, and (ii) the benefits
received by the Trustee as Trustee shall be the aggregate amount of fees
received by it as Trustee, less costs and expenses incurred by it as Trustee in
relation to such Certificates. If, however, the allocation provided by the
<PAGE>
- 65 -
immediately preceding two sentences is not permitted by applicable law, then the
Depositor shall contribute to such amount paid or payable by the Trustee in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Depositor on the one hand and the Trustee on the other
in connection with the actions or omissions which resulted in such liability, as
well as any other relevant equitable considerations.
(c) In case any claim shall be made or action brought against the
Trustee for any reason for which indemnity may be sought against the Depositor
as provided above, the Trustee may promptly notify the Depositor in writing
setting forth the particulars of such claim or action and the Depositor may
assume the defense thereof. In the event that the Depositor assumes the
defense, the Trustee shall have the right to retain separate counsel in any such
action but shall bear the fees and expenses of such counsel unless (i) the
Depositor shall have specifically authorized the retaining of such counsel or
(ii) the parties to such suit include the Trustee and the Depositor, and the
Trustee has been advised in writing by such counsel that one or more legal
defenses may be available to it which may not be available to the Depositor, in
which case the Depositor shall not be entitled to assume the defense of such
suit notwithstanding its obligation to bear the reasonable fees and expenses of
such counsel.
(d) The term "LIABILITY", as used in this Section 7.11, shall include
any losses, claims, damages, expenses (including without limitation the
Trustee's reasonable costs and expenses) in defending itself against any losses,
claims or investigations of any nature whatsoever.
(e) The obligations of the Depositor under this Section 7.11 shall be
in addition to any liability which the Depositor may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of the
Trustee, and to each person, if any, who controls the Trustee within the meaning
of the Exchange Act.
(f) Notwithstanding anything to the contrary contained in this Section
7.11, the Depositor shall not be liable for settlement of any such claim by the
Trustee entered into without the prior written consent of the Depositor, which
consent shall not be unreasonably withheld.
(g) The indemnity provided in this Section shall survive the
termination or discharge of this Trust Agreement.
Section 7.12. No Liability of the Trustee with Respect to the
-----------------------------------------------
Underlying Securities; Certificateholders to Proceed Directly Against the
- -------------------------------------------------------------------------
Underlying Securities Issuer(s). (a) The sole obligor with respect to any
- -------------------------------
Underlying Security is the Underlying Securities Issuer(s). The Trustee shall
not have any obligation on or with respect to the Underlying Securities; and
<PAGE>
- 66 -
its obligations with respect to Certificates shall be solely as set forth in
this Trust Agreement.
(b) The Trustee is not authorized to proceed against the Underlying
Securities Issuer in the event of a default or to assert the rights and
privileges of Certificateholders of Certificates and has no duty in respect
thereof except as expressly provided herein.
Section 7.13. The Depositor To Furnish Trustee with Names and
-----------------------------------------------
Addresses of Certificateholders. The Depositor will furnish to the Trustee
- -------------------------------
within 15 days after each Record Date with respect to any Distribution Date, and
at such other times as the Trustee may request in writing, within 30 days after
receipt by the Depositor of any such request, a list, in such form as the
Trustee may reasonably require, of all information in the possession or control
of the Depositor as to the names and addresses of the Certificateholders, in
each case as of a date not more than 15 days prior to the time such list is
furnished; provided, however, that so long as the Trustee is the sole Registrar,
no such list need be furnished.
Section 7.14. Preservation of Information. The Trustee shall
---------------------------
preserve, in as current a form as is reasonably practicable, the names and
addresses of Certificateholders contained in the most recent list furnished to
the Trustee as provided in Section 7.13, and the names and addresses of
Certificateholders received by the Trustee in its capacity as Registrar, if so
acting. The Trustee may destroy any list furnished to it as provided in Section
7.13, upon receipt of a new list so furnished.
Section 7.15. Reports by Trustee. If required, within 60 days after
------------------
December 31 of each year, commencing with the year 1997, the Trustee shall
transmit to the Certificateholders, as provided in Section 313(c) of the Trust
Indenture Act, a brief report dated as of such December 31, if required by
Section 313(a) of the Trust Indenture Act.
Section 7.16. Trustee's Application for Instructions from the
-----------------------------------------------
Depositor. Any application by the Trustee for written instructions from the
- ---------
Depositor may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under this Trust Agreement and
the date on and/or after which such action shall be taken or such omission shall
be effective, if, but only if, the obligations of the Trustee with respect to
such proposed action or omission are not set forth reasonably clearly in these
Standard Terms and the related Series Supplement. The Trustee shall not be
liable for any action taken by, or omission of, the Trustee in accordance with a
proposal included in such application on or after the date specified in such
application (which date shall not be less than 10 Business Days after the date
an officer of the Depositor actually receives such application, unless any such
officer shall have consented in writing to any earlier date) unless, prior to
<PAGE>
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taking any such action (or the effective date in the case of an omission), the
Trustee shall have received written instructions in response to such application
specifying the action to be taken or omitted; provided, however, that this
provision shall not protect the Trustee from liability for any action or
omission constituting willful misconduct, bad faith or negligence.
ARTICLE VIII
MARKET AGENT
Section 8.01. Market Agent. (a) If specified for a specific Series,
------------
on the Closing Date the Trustee shall enter into a Market Agent Agreement with
Citicorp Securities, Inc., as the initial Market Agent, in the form attached to
the related Series Supplement. The Market Agent shall serve as such under the
terms and provisions hereof and of the Market Agent Agreement. The Market
Agent, including any successor appointed pursuant hereto, shall be a member of
the National Association of Securities Dealers, Inc., have capitalization of at
least $25,000,000, and be authorized by law to perform all the duties imposed
upon it by this Trust Agreement and the Market Agent Agreement. The Market
Agent may be removed at any time by the Trustee, acting at the written direction
of the Depositor; provided, however, that such removal shall not take effect
until the appointment of a successor Market Agent. The Market Agent may resign
upon 30 days' written notice delivered to the Trustee. The Depositor shall use
its best efforts to appoint a successor Market Agent that is a qualified
institution, effective as of the effectiveness of any such resignation or
removal.
ARTICLE IX
TERMINATION
Section 9.01. Termination upon Liquidation of All Underlying
----------------------------------------------
Securities. (a) The respective obligations and responsibilities under this
- ----------
Trust Agreement of the Depositor and the Trustee (other than the obligations of
the Trustee to make distributions to Holders of the Certificates of any given
Series as hereafter set forth and to provide information reports and information
tax reporting) shall terminate upon the distribution to such Holders of all
amounts held in all the Accounts for such Series and required to be paid to such
Holders pursuant to this Trust Agreement on the Distribution Date coinciding
with the final payment on or other liquidation (which may include redemption or
other purchase thereof by the applicable Underlying Securities Issuer) (or any
Advance with respect thereto) of the last Underlying Security remaining in the
Trust for such Series or the disposition of all property acquired upon
liquidation of any such Underlying Security; provided, however, that in no event
shall the trust created hereby continue beyond the expiration of 21 years from
the death of the last survivor of the descendants
<PAGE>
- 68 -
of Joseph P. Kennedy, the late ambassador of the United States to the Court of
St. James, living on the date hereof.
(b) Written notice of any termination shall be provided as set forth
in Section 10.04.
(c) Upon presentation and surrender of the Certificates by the
Certificateholders on the Final Scheduled Distribution Date, or the Distribution
Date coinciding with or next following the earlier to occur of the occurrences
specified in 9.01(a), with respect to the applicable Series of Certificates, the
Trustee shall distribute to each Holder presenting and surrendering its
Certificates (i) the amount otherwise distributable on such Distribution Date in
accordance with Section 4.01 in respect of the Certificates so presented and
surrendered, or (ii) as specified in the applicable Series Supplement, if in
connection with the Trustee's sale of all the remaining Underlying Securities.
Any funds not distributed on such Distribution Date shall be set aside and held
in trust for the benefit of Certificateholders not presenting and surrendering
their Certificates in the aforesaid manner, and shall be disposed of in
accordance with this Section 9.01 and Section 4.01 hereof. Immediately
following the deposit of funds in trust hereunder, the Trust for such Series
shall terminate. Subject to applicable escheat laws, the Trustee shall pay to
the Depositor any cash that remains unclaimed, together with interest, if any,
thereon, held by the Trustee on the date two years after such termination.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01. Amendment. (a) This Trust Agreement may be amended
---------
from time to time by the Depositor and the Trustee without the consent of any of
the Certificateholders for any of the following purposes: (i) to cure any
ambiguity or to correct or supplement any provision 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 Trust Agreement which shall not adversely affect the
interests of the Holders in any material respect; (ii) to evidence and provide
for the acceptance of appointment hereunder of a change in Trustee as Trustee
for a Series of Certificates subsequent to the Closing Date for such Series, and
to add to or change any of the provisions of this Trust Agreement as shall be
necessary to provide for or facilitate the administration of the separate Trusts
hereunder by more than one trustee, pursuant to the requirements of Section 5.01
hereof; or (iii) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Certificate of one or more
Series or to add or change any of the provisions of this Trust Agreement as
shall be necessary to provide for or facilitate the administration of the trusts
hereunder; provided, however, that in the case of any
<PAGE>
- 69 -
amendment the Rating Agency Condition shall be satisfied with respect to such
amendment and that no such amendment shall cause any Trust created hereunder to
fail to qualify as a "grantor trust" for U.S. Federal income tax purposes.
(b) Without limiting the generality of the foregoing, with respect to
any Series this Trust Agreement may also be modified or amended from time to
time by the Depositor and the Trustee with the consent of the Holders of
Certificates representing the Required Percentage-Amendment of the aggregate
Voting Rights of those Certificates to which such modification or amendment
relates for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Trust Agreement or of modifying in any
manner the rights of the Holders of Certificates; provided, however, that no
such amendment shall (i) reduce in any manner the amount of, or delay the timing
of, payments received on Underlying Securities which are required to be
distributed on any Certificate without the consent of the Holders of such
Certificates, (ii) adversely affect in any material respect the interests of the
Holders of any Series (or Class within such Series) of Certificates in a manner
other than as described in (i), without the consent of the Holders of
Certificates of such Series or Class evidencing not less than the Required
Percentage-Amendment of the aggregate Voting Rights of such Series or Class or
(iii) reduce the percentage of aggregate Voting Rights required by (ii), as
described in (ii), without the consent of the Holders of all Certificates of
such Series or Class then Outstanding.
Notwithstanding any other provision of this Trust Agreement, for
purposes of the giving or withholding of consents pursuant to this Section
10.01, Certificates registered in the name of the Depositor or the Trustee or
any affiliate thereof shall be entitled to Voting Rights with respect to matters
affecting such Certificates; and provided, further, that in the event the Rating
Agency Condition is not satisfied with respect to such modification or
amendment, the Required Percentage-Amendment shall be increased to require an
aggregate percentage of the aggregate Voting Rights in the amount specified in
the applicable Series Supplement. Notwithstanding any other provision of this
Trust Agreement, this Section 10.01(b) shall not be amended without the
unanimous consent of the Holders of all such Certificates.
(c) Promptly after the execution of any such amendment or
modification, the Trustee shall furnish a copy of such amendment or modification
to each Certificateholder of the affected Series or Class and to the Rating
Agency. It shall not be necessary for the consent of Certificateholders 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 by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
<PAGE>
- 70 -
Section 10.02. Limitation on Rights of Certificateholders. (a) The
------------------------------------------
death or incapacity of any Certificateholder shall not operate to terminate this
Trust Agreement or the Trust, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the applicable Trust,
nor otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.
(b) No Certificateholder of a given Series shall have any right to
vote (except as expressly provided for herein) or in any manner otherwise
control the operation and management of any Trust, or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Certificates, be construed so as to constitute the Certificateholders
from time to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken by the parties to this Trust Agreement pursuant to any provision
hereof.
(c) No Certificateholder of a given Series shall have any right by
virtue of any provision of this Trust Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Trust
Agreement, unless (i) such Holder previously shall have given to the Trustee a
written notice of breach and of the continuance thereof, (ii) the Holders of
Certificates of such Series evidencing not less than the Required Percentage-
Remedies of the aggregate Voting Rights of such Series shall have made written
request upon the Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, (iii) the Trustee, for 15 days after its receipt of
such notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding, and (iv) no direction
inconsistent with such written request has been given to the Trustee during such
15-day period by Certificateholders evidencing not less than the Required
Percentage-Remedies of the aggregate Voting Rights of such Series. It is
understood and agreed that the Trustee shall not be obligated to make any
investigation of matters arising under this Trust Agreement or to institute,
conduct or defend any litigation hereunder or in relation hereto at the request,
order or direction of any Certificateholders unless such Certificateholders have
offered to the Trustee the reasonable indemnity referred to above. It is
further understood and agreed, and expressly covenanted by each
Certificateholder of each Series with every other Certificateholder of such
Series and the Trustee, that no one or more Holders of Certificates of such
Series shall have any right in any manner whatever by virtue of any provision of
this Trust Agreement to affect, disturb or prejudice the rights of the Holders
of any other of the Certificates of such Series, or to obtain or seek to obtain
priority over or preference to any other
<PAGE>
- 71 -
such Holder, or to enforce any right under this Trust Agreement, except in the
manner herein provided and for the equal, ratable and common benefit of all
Certificateholders of such Series. For the protection and enforcement of the
provisions of this Section, each and every Certificateholder and the Trustee
shall be entitled to such relief as can be given either at law or in equity.
Section 10.03. Governing Law. THIS TRUST AGREEMENT 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 WITHIN THE STATE OF NEW YORK AND
WITHOUT GIVING EFFECT 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.
Section 10.04. Notices. (a) All directions, demands and notices
-------
hereunder shall be in writing and shall be delivered as set forth in the
applicable Series Supplement.
(b) Any notice required to be provided to a Holder shall be given by
first class mail, postage prepaid, at the last address of such Holder as shown
in the Certificate Register. Any notice so mailed within the time prescribed in
this Trust Agreement shall be conclusively presumed to have been duly given when
mailed, whether or not the Certificateholder receives such notice.
(c) Any and all notices to be given to the Depositor shall be deemed
to have been duly given if sent by facsimile transmission to the Depositor at
P.O. Box 1984, Elizabethan Square, George Town, Grand Cayman, Cayman Islands,
British West Indies. The Depositor may change this information by written
notice to the Trustee.
(d) Any and all notices to be given to the Trustee shall be deemed to
have been duly given if sent by facsimile transmission to the Trustee at 114
West 47th Street, 25th Floor, New York, New York 10036, Attention: Trust
Certificates, Elmwood Funding Limited, referencing the designation of the
applicable Series of Certificates, facsimile transmission number (212) 852-1625,
telephone confirmation number (212) 852-1623. The Trustee may change this
information by notice to the Depositor.
(e) Any and all notices to be given to the Swap Counterparty, if any,
will be specified in the Series Supplement.
Section 10.05. Notice to Rating Agencies. (a) The Trustee shall use
-------------------------
its best efforts promptly to provide notice to each Rating Agency with respect
to each of the following of which it has actual knowledge:
(i) any change or amendment to this Trust Agreement;
<PAGE>
- 72 -
(ii) the resignation or termination of the Trustee;
(iii) the final payment to Holders of the Certificates of any Class;
(iv) any change in the location of the Certificate Account; and
(v) any event that would result in the inability of the Trustee to
make Advances.
(b) In addition, the Trustee shall promptly furnish to each Rating
Agency copies of each report to Certificateholders described in Section 4.02.
(c) Any such notice pursuant to this Section shall be in writing and
shall be deemed to have been duly given if personally delivered or mailed by
first class mail, postage prepaid, or by express delivery service to each Rating
Agency at the address specified below or in the applicable Series Supplement.
(d) (i) Any and all notices to be given to Moody's shall be deemed to
have been duly given if sent by facsimile transmission to Moody's at Moody's
Investors Service, Inc., 99 Church Street, New York, New York 10007, Attention:
CBO/CLO Monitoring Department, facsimile transmission number (212) 553-0355,
telephone confirmation number (212) 553-1494. Moody's may change this
information by notice to the Depositor and the Trustee.
(ii) Any and all notices to be given to S&P shall be deemed to have
been duly given if sent by facsimile transmission to S&P at Standard & Poor's
Rating Group, 26 Broadway, New York, New York 10004, Attention: Structured
Finance Surveillance Group, facsimile transmission number (212) 208-0030,
telephone confirmation number (212) 208-1191. S&P may change this information
by notice to the Depositor and the Trustee.
Section 10.06. Severability of Provisions. If any one or more of the
--------------------------
covenants, agreements, provisions or terms of this Trust Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Trust Agreement and shall in no way affect the
validity or enforceability of the other provisions of this Trust Agreement or of
the Certificates or the rights of the Holders thereof.
Section 10.07. Grant of Security Interest. (a) It is the express
--------------------------
intent of the parties hereto that each conveyance of any Underlying Securities
by the Depositor to the Trustee be, and be construed as, a sale of the
Underlying Securities by the Depositor and not a pledge of any Underlying
Securities by the Depositor to secure a debt or other obligation of the
Depositor.
<PAGE>
- 73 -
(b) In the event that, notwithstanding the aforementioned intent of
the parties, any Underlying Securities are held to be property of the Depositor,
then, (x) it is the express intent of the parties that such conveyance be deemed
a pledge of such Underlying Securities by the Depositor to the Trustee to secure
a debt or other obligation of the Depositor and (y)(1) this Trust Agreement
shall also be deemed to be a security agreement within the meaning of Articles 8
and 9 of the Uniform Commercial Code as in effect from time to time in the State
of New York, or such other State as may be specified in the related Series
Supplement; (2) the conveyance provided for in Section 2.01 hereof shall be
deemed to be a grant by the Depositor to the Trustee of a security interest in
all the Depositor's right, title and interest in and to such Underlying
Securities and all amounts payable to the holders of such Underlying Securities
in accordance with the terms hereof and all proceeds of the conversion,
voluntary or involuntary, of the foregoing into cash, instruments, securities or
other property including all amounts from time to time held or invested in the
applicable Certificate Account, whether in the form of cash, instruments,
securities or other property; (3) the obligations secured by such security
agreement shall be deemed to be all the Depositor's obligations under this Trust
Agreement, including the obligation to provide to the Certificateholders the
benefits of this Trust Agreement relating to such Underlying Securities and the
applicable Trust; and (4) notifications to persons holding such property, and
acknowledgements, receipts or confirmations from persons holding such property,
shall be deemed notifications to, or acknowledgements, receipts or confirmations
from, financial intermediaries, bailees or agents (as applicable) of the Trustee
for the purpose of perfecting such security interest under applicable law.
Accordingly, the Depositor hereby grants to the Trustee a security
interest in the Underlying Securities and all other property described in clause
(y)(2) of the preceding paragraph, for the purpose of securing to the Trustee
the performance by the Depositor of the obligations described in clause (y)(3)
of the preceding paragraph. Notwithstanding the foregoing, the parties hereto
intend the Grant pursuant to Section 2.01 to be a true, absolute and
unconditional sale of the Underlying Securities and assets constituting the
applicable Trust by the Depositor to the Trustee.
(c) The Depositor and the Trustee shall, to the extent consistent with
this Trust Agreement, take such actions as may be necessary to ensure that, if
this Trust Agreement were deemed to create a security interest in the Underlying
Securities, such security interest would be deemed to be a perfected security
interest of first priority under applicable law and will be maintained as such
for so long as any of the Underlying Securities remain outstanding. Without
limiting the generality of the foregoing, the Trustee shall file, or shall cause
to be filed, all filings necessary to maintain the effectiveness of any original
filings necessary under the Uniform Commercial Code as
<PAGE>
- 74 -
in effect in any jurisdiction to perfect the Trustee's security interest in or
lien on the Underlying Securities, including (x) continuation statements and (y)
such other statements as may be occasioned by (1) any change of name of the
Depositor or the Trustee, (2) any change of location of the place of business or
the chief executive office of the Depositor or (3) any transfer of any interest
of the Depositor in any Underlying Security.
Section 10.08. Nonpetition Covenant. Notwithstanding any prior
--------------------
termination of this Trust Agreement, each of the Trustee (including any Sub-
Administrative Agent, Authenticating Agent, Calculation Agent and Paying Agent)
and the Depositor agrees that it shall not, until the date which is one year and
one day after such termination, acquiesce, petition or otherwise invoke or cause
the Trust 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 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 or all or any part of the property or assets
of the Trust or ordering the winding up or liquidation of the affairs of the
Trust.
Section 10.09. No Recourse. Neither the Trustee (including any Sub-
-----------
Administrative Agent, Authenticating Agent, Calculation Agent, or Paying Agent)
nor the Depositor shall have any recourse to the Underlying Securities, except
as specifically provided in the related Series Supplement.
Section 10.10. Article and Section References. All article and
------------------------------
section references used in these Standard Terms, unless otherwise provided, are
to articles and sections in these Standard Terms.
Section 10.11. Counterparts. These Standard Terms may be executed
------------
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute one and the
same instrument.
Section 10.12. Trust Indenture Act Controls. This Trust Agreement is
----------------------------
subject to the provisions of the Trust Indenture Act and shall, to the extent
applicable, be governed by such provisions. The Trustee agrees to take all
actions within its control to prevent these Standard Terms, as supplemented by
any Series Supplements, from failing to qualify under the Trust Indenture Act.
<PAGE>
- 75 -
IN WITNESS WHEREOF, the Depositor and the Trustee have caused their
names to be signed hereto by their respective officers thereunto duly
authorized, in each case as of the day and year first above written.
ELMWOOD FUNDING LIMITED,
as Depositor
By:_____________________________
Name:
Title:
UNITED STATES TRUST COMPANY OF
NEW YORK,
as Trustee
By:_____________________________
Name:
Title:
<PAGE>
- 76 -
Reconciliation and tie between the Trust Agreement, dated as of March
14, 1997, and the Trust Indenture Act of 1939, as amended. This reconciliation
does not constitute part of the Trust Agreement.
Trust Indenture Act Trust
of 1939 Section Agreement Section
--------------- -----------------
310(a)(1) 7.07
(a)(2) 7.07
(a)(5) 7.07
312(a) 7.14
313(a) 7.16
314(a) 3.10
(b) 3.11(d)
(c)(1) 1.03
(c)(2) 1.03
(e) 1.03
315(a)(1) 7.01
315(a)(2) 7.03
315(b) 7.01(d)
315(d) 7.01(c)
316(a)(1)(A) 5.18
(a)(1)(B) 5.19
(b) 5.20
(c) 1.03(b)
317(a)(1) 5.17
(b) 5.12
318(a) 10.12
<PAGE>
SERIES SUPPLEMENT
[NAME OF] CERTIFICATES,
SERIES 199[__]-[SERIES DESIGNATION]
between
ELMWOOD FUNDING LIMITED,
as Depositor
and
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
[NAME OF] CERTIFICATES
Dated as of [Month __, 199_]
<PAGE>
TABLE OF CONTENTS
SCHEDULE I SERIES 199[__]-[SERIES DESIGNATION] UNDERLYING
SECURITIES SCHEDULE
SCHEDULE II DESCRIPTION OF THE RETAINED INTEREST
SCHEDULE III DESCRIPTION OF THE CALL WARRANT
EXHIBIT A STANDARD TERMS FOR TRUST AGREEMENTS
EXHIBIT B FORM OF TRUST CERTIFICATE
<PAGE>
[NAME OF] CERTIFICATES
SERIES SUPPLEMENT
SERIES 199[__]-[SERIES DESIGNATION]
SERIES SUPPLEMENT, SERIES 199[__]-[SERIES DESIGNATION], dated as of
[Month __, 199_] (the "SERIES SUPPLEMENT"), by and between ELMWOOD FUNDING
LIMITED, a Cayman Islands company as Depositor (the "DEPOSITOR"), and UNITED
STATES TRUST COMPANY OF NEW YORK, as Trustee (the "TRUSTEE").
W I T N E S S E T H:
WHEREAS, the Depositor desires to create the Trust designated herein
(the "TRUST") by executing and delivering this Series Supplement, which shall
incorporate the terms of the Standard Terms for Trust Agreements, dated as of
March 14, 1997 (the "STANDARD TERMS"; together with this Series Supplement, the
"TRUST AGREEMENT"), by and between the Depositor and the Trustee, as modified by
this Series Supplement;
WHEREAS, the Depositor desires to deposit the Underlying Securities
set forth on Schedule I attached hereto (the "UNDERLYING SECURITIES SCHEDULE")
into the Trust;
WHEREAS, in connection with the creation of the Trust and the deposit
therein of the Underlying Securities, it is desired to provide for the issuance
of trust certificates (the "CERTIFICATES"), the Retained Interest (the "RETAINED
INTEREST") and the Call Warrant (the "CALL WARRANT") evidencing undivided
interests in the Trust; and
WHEREAS, the Trustee has joined in the execution of the Standard Terms
and this Series Supplement to evidence the acceptance by the Trustee of the
Trust;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants expressed herein, it is hereby agreed by and between the
Depositor and the Trustee as follows:
Section 1. Incorporation of Standard Terms. All of the provisions of
-------------------------------
the Standard Terms, a copy of which is attached hereto as Exhibit A, are hereby
incorporated herein by reference in their entirety and this Series Supplement
and the Standard Terms shall form a single agreement between the parties. In
the event of any inconsistency between the provisions of this Series Supplement
and the provisions of the Standard Terms, the provisions of this Series
Supplement will control with respect to the transactions described herein.
<PAGE>
- 2 -
Section 2. Definitions. Except as otherwise specified herein or as
-----------
the context may otherwise require, the following terms shall have the respective
meanings set forth below for all purposes under this Series Supplement.
Capitalized terms used but not defined herein shall have the meanings assigned
to them in the Standard Terms.
* * *
Section 3. Designation of Trust and Certificates. (a) The Trust
-------------------------------------
created hereby shall be known as the "[NAME OF] Certificates Trust, Series
199[__]-[SERIES DESIGNATION]", the Certificates evidencing certain undivided
ownership interests therein shall be known as "[NAME OF] Certificates, Series
199[__]-[SERIES DESIGNATION]", the Retained Interest evidencing certain
undivided ownership interests in the remainder of the Underlying Securities (as
described on Schedule II hereto) shall be known as the "Series 199[__]-[SERIES
DESIGNATION] Retained Interest" and the Call Warrant evidencing certain
undivided ownership interests in the remainder of the Underlying Securities (as
described on Schedule III hereto) shall be known as the "Series 199[__]-[SERIES
DESIGNATION] Call Warrant".
(b) The Certificates shall be held through the Depository in book-
entry form and shall be substantially in the form attached hereto as Exhibit B.
The Certificates shall be issued in minimum denominations of $1,000 and integral
multiples of $1,000 in excess thereof. Except as provided in the Standard
Terms, the Trust shall not issue additional Certificates or incur any
indebtedness.
(c) The Retained Interest will be uncertificated and shall be as
described in Schedule II attached hereto. The Retained Interest will be issued
to the Depositor and may be transferred by the Depositor to another party at the
sole option of the Depositor without the consent of the Certificateholders or
any other party. The beneficial ownership interest in the Retained Interest
will be recorded on the records of the Trustee. On each Distribution Date,
payments will be made on the Retained Interest by wire transfer to the
account(s) of holder(s) thereof on the related Record Date as specified in
written instructions to the Trustee. Notwithstanding any other provision of
this Agreement, the Trustee shall not agree to any amendment or modification of
this Agreement (including the Standard Terms) which would adversely affect in
any material respect the holder of the Retained Interest without the consent of
the holder of the Retained Interest.
Section 4. Satisfaction of Conditions to Initial Execution and
---------------------------------------------------
Delivery of Trust Certificates. The Trustee hereby acknowledges receipt, on or
- ------------------------------
prior to the Closing Date, of:
(i) the Underlying Securities set forth on the Underlying Securities
Schedule; and
<PAGE>
- 3 -
(ii) all documents required to be delivered to the Trustee pursuant to
Section 2.01 of the Standard Terms.
Section 5. Distributions. (a) On each Distribution Date other than
-------------
the Redemption Date, the Trustee shall apply Available Funds in the Certificate
Account as follows (subject to Section 5(c) below):
(i) first, to the Certificateholders and the holder of the Retained
Interest, proportionately to the ratio of their respective entitlements to
interest, the Required Interest and the Interest Strip, respectively; and
(ii) second, to the Certificateholders, Required Principal, if any.
(b) On the Redemption Date, if applicable, the Trustee shall apply
Available Funds in the Certificate Account as follows:
(i) first, to the Certificateholders and the holder of the Retained
Interest, proportionately to the ratio of their respective entitlements to
interest, the Required Interest and the Interest Strip, respectively;
(ii) second, to the Certificateholders, Required Principal;
(iii) third, to any creditors of the Trust in satisfaction of
liabilities thereto; and
(iv) fourth, to the Warrantholder, any remaining amounts.
(c) Amounts recovered in respect of the Underlying Securities
following a default by the Underlying Securities Issuer under the Underlying
Securities Indenture shall, to the extent allocable to interest, be distributed
in accordance with the provisions of Section 5(a)(i), and, to the extent
allocable to principal, in accordance with the provisions of Section 5(a)(ii).
Section 6. Trustee's Fees. (a) As compensation for its services
--------------
hereunder, the Trustee shall be entitled to Ordinary Expenses. The Ordinary
Expenses will be paid to the Trustee by the holder of the Retained Interest
which, for convenience, may be retained out of the Interest Strip on each
Distribution Date.
(b) Extraordinary Expenses shall not be paid out of the Trust Property
unless (i) such Extraordinary Expenses relate to a time when the Underlying
Securities Issuer was in default of any payment obligation under the Underlying
Securities Indenture, or (ii) Certificateholders representing 100% of the
aggregate Voting Rights of the Certificates have voted to require the Trustee to
incur such Extraordinary Expenses.
<PAGE>
- 4 -
Section 7. Events of Default. Within 30 days of the occurrence of an
-----------------
Event of Default, the Trustee will give notice to the Certificateholders, the
Warrantholder and the holder of the Retained Interest, transmitted by mail, of
all such uncured or unwaived Events of Default known to it.
Section 8. Miscellaneous.
-------------
(a) The Trustee shall forward reports to Certificateholders pursuant
to Section 4.03 of the Standard Terms to the New York Stock Exchange.
(b) In any conflict between the provisions of the Prospectus
Supplement and this Agreement (including the Standard Terms), the provisions of
the Prospectus Supplement shall prevail. Any affirmative statement of rights or
obligations of Certificateholders or the parties hereto included in the
Prospectus Supplement shall be deemed to be included herein.
(c) If the Trustee has not received payment with respect to a
Collection Period on the Underlying Securities on or prior to the related
Distribution Date, such distribution will be made promptly upon receipt of such
payment. No additional amounts shall accrue on the Certificates or be owed to
Certificateholders as a result of such delay; provided, however, that any
additional interest owed and paid by the Underlying Securities Issuer as a
result of such delay shall be paid to the Certificateholders and the holder of
the Retained Interest, proportionately to the ratio of their respective
entitlements to interest.
(d) In any conflict between the provisions of this Series Supplement
and the Standard Terms, the provisions of this Series Supplement shall control.
(e) The outstanding principal balance of the Certificates shall not be
reduced by the amount of any Realized Loss (as defined in the Standard Terms).
Section 9. Notices. All directions, demands and notices hereunder or
-------
under the Standard Terms shall be in writing and shall be delivered as set forth
below (unless written notice is otherwise provided to the Trustee).
If to the Depositor, to:
Elmwood Funding Limited
399 Park Avenue
New York, New York 10043
Attention: Mr. Gary Davis
Telephone: (212) 291-0007
Facsimile: (212) 291-1291
<PAGE>
- 5 -
With a copy to the Directors:
c/o Deutsche Morgan
Grenfell (Cayman) Limited
P.O. Box 1984
George Town
Grand Cayman
Cayman Islands
British West Indies
Telephone: (809) 949-8244
Facsimile: (809) 949-8178
If to the Trustee, to:
United States Trust Company of New York
114 West 47th Street
25th Floor
New York, New York 10036
Attention: Trust Certificates
Elmwood Funding Limited
Referencing: The designation of the applicable Series of Certificates
Attention: (212) 852-1623
Facsimile: (212) 852-1625
If to the Rating Agencies, to:
Moody's Investors Service, Inc.
99 Church Street 21W
New York, New York 10007
Attention: CBO/CLO Monitoring Department
Telephone: (212) 553-1494
Facsimile: (212) 553-0355
and to:
Standard & Poor's
26 Broadway
New York, New York 10004
Attention: Structured Finance Surveillance Group
Telephone: (212) 208-1191
Facsimile: (212) 208-0030
If to the New York Stock Exchange, to:
New York Stock Exchange, Inc.
20 Broad Street
New York, New York 10005
Attention: Michael Hyland
Telephone: (212) 656-5868
Facsimile: (212) 656-7094
Section 10. Governing Law. THIS SERIES SUPPLEMENT AND THE
-------------
TRANSACTIONS DESCRIBED HEREIN SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK
<PAGE>
- 6 -
APPLICABLE TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO THE CHOICE OF LAWS PROVISIONS THEREOF.
Section 11. Counterparts. This Series Supplement may be executed in
------------
any number of counterparts, each of which shall be deemed to be an original, and
all such counterparts shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Series
Supplement to be duly executed by their respective authorized officers as of the
date first written above.
ELMWOOD FUNDING LIMITED,
as Depositor
By:_____________________________
Name:
Title:
UNITED STATES TRUST COMPANY OF
NEW YORK,
as Trustee
By:_____________________________
Name:
Title:
<PAGE>
SCHEDULE I
[NAME OF] CERTIFICATES,
SERIES 199[__]-[SERIES DESIGNATION]
UNDERLYING SECURITIES SCHEDULE
Underlying Securities: [__.__]% Debentures due [DATE], subject to the
Retained Interest and the Call Warrant
Underlying Securities Issuer: [_____________]
Underlying
Securities Indenture: [_____________]
CUSIP Number: [__________]
Principal Amount Deposited: $[Amount]
Original Issue Date: [DATE]
Principal Amount of
Underlying Securities
Originally Issued: $[Amount]
Maturity Date: [DATE]
Principal Payment Date: [DATE]
Interest Rate: [__.__]% per annum
Interest Payment Dates: [Date] and [Date], commencing [Date]
Initial Accrued Interest: $[Amount]
Redemption Dates: None
Redemption Prices: None
Priority: Based upon the Prospectus relating to the
Underlying Securities, the Underlying Securities
rank on a parity with all other unsecured and
unsubordinated indebtedness of the Underlying
Securities Issuer
Security: None
Rating as of Closing: "[___]" by Moody's and "[___]" by S&P.
<PAGE>
- 2 -
Form of
Underlying Securities: Book-entry debt security with DTC
Retained Interest: As described on Schedule II hereto
<PAGE>
SCHEDULE II
[NAME OF] CERTIFICATES,
SERIES 199[__]-[SERIES DESIGNATION]
DESCRIPTION OF THE RETAINED INTEREST
The holder of the Retained Interest will retain the right with respect
to the Underlying Securities to receive (i) on the [First Month] Distribution
Date occurring in 199__, the Initial Accrued Interest, and (ii) on each
Distribution Date, from payments received on the Underlying Securities, a
distribution equal to [__.__]% per annum of the principal amount of the
Underlying Securities (the "INTEREST STRIP"). The rights of the holder of the
Retained Interest to the Interest Strip are of equal priority with the rights of
the Certificateholders to receive distributions of interest.
The Retained Interest will be issued to [__________] and may be
transferred by [__________] to another party at the sole option of [__________]
without the consent of the Certificateholders or any other party but upon
written notice to the Trustee. The beneficial ownership interest in the
Retained Interest will be recorded on the records of the Trustee. On each
Distribution Date, payments will be made on the Retained Interest by wire
transfer to the account of the holder thereof on the related Record Date as
specified in written instructions to the Trustee. The Trustee shall not agree
to any amendment or modification of the Standard Terms or the Series Supplement
which would adversely affect in any material respect the holder of the Retained
Interest without the consent of the holder of the Retained Interest.
<PAGE>
EXHIBIT A
Standard Terms for Trust Agreements
(begins on next page)
<PAGE>
EXHIBIT B
Form of Certificate
No. ___ $[Amount]
CUSIP NO. _________
SEE REVERSE FOR CERTAIN DEFINITIONS
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE REPRESENTS A FRACTIONAL UNDIVIDED INTEREST IN THE
TRUST AND DOES NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN, AND IS NOT
GUARANTEED BY THE DEPOSITOR OR THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE TRUST ASSETS ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR ANY OTHER PERSON.
[NAME OF] CERTIFICATES TRUST,
SERIES 199[__][SERIES DESIGNATION]
[NAME OF] CERTIFICATES,
SERIES 199[__]-[SERIES DESIGNATION]
$[AMOUNT] PRINCIPAL BALANCE
[__.__]% CERTIFICATE RATE
evidencing a fractional undivided beneficial ownership interest in the Trust, as
defined below, the property of which consists principally of $[Amount] aggregate
principal amount of [__.__]% Debentures due [DATE] of [__________] (the
"UNDERLYING SECURITY ISSUER") and all payments received thereon (the "TRUST
PROPERTY"), deposited in trust by Elmwood Funding Limited (the "DEPOSITOR").
THIS CERTIFIES THAT CEDE & CO. is the registered owner of $[Amount] DOLLARS
nonassessable, fully-paid, fractional undivided interest in the [NAME OF]
Certificates Trust, Series 199[__]-[SERIES DESIGNATION], formed by the
Depositor.
The Trust was created pursuant to a Standard Terms for Trust
Agreements, dated as of March 14, 1997 (the "STANDARD TERMS"), between the
Depositor and [Name of Trustee], a New York banking corporation, not in its
individual capacity but solely as
<PAGE>
- 2 -
Trustee (the "TRUSTEE"), as supplemented by the Series Supplement, Series
199[__]-[SERIES DESIGNATION], dated as of [Month __, 199_] (the "SERIES
SUPPLEMENT" and, together with the Standard Terms, the "TRUST AGREEMENT"),
between the Depositor and the Trustee. This Certificate does not purport to
summarize the Trust Agreement and reference is hereby made to the Trust
Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby and the rights, duties and
obligations of the Trustee with respect hereto. A copy of the Trust Agreement
may be obtained from the Trustee by written request sent to the Corporate Trust
Office. Capitalized terms used but not defined herein have the meanings
assigned to them in the Trust Agreement.
This Certificate is one of the duly authorized Certificates designated
as the "[NAME OF] Certificates, Series 199[__]-[SERIES DESIGNATION]" (herein
called the "CERTIFICATES"). This Certificate is issued under and is subject to
the terms, provisions and conditions of the Trust Agreement, to which Trust
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound. The Trust Property consists of: (i)
Underlying Securities described in the Trust Agreement; (ii) all payments on or
collections in respect of the Underlying Securities accrued on or after [Month
__, 199_] (the "CLOSING DATE") together with any proceeds thereof, subject to
the Retained Interest; and (iii) all funds from time to time deposited with the
Trustee relating to the Certificates and any investments thereof, together with
any and all income, proceeds and payments with respect thereto.
Subject to the terms and conditions of the Trust Agreement (including
the availability of funds for distributions) and until the obligation created by
the Trust Agreement shall have terminated in accordance therewith, distributions
will be made on each Distribution Date, to the Person in whose name this
Certificate is registered on the applicable Record Date, in an amount equal to
such Certificateholder's fractional undivided interest in the amount required to
be distributed to the Holders of the Certificates on such Distribution Date.
The Record Date applicable to any Distribution Date is the close of business on
the day immediately preceding such Distribution Date (whether or not a Business
Day). If a payment with respect to the Underlying Securities is made to the
Trustee after the date on which such payment was due, then the Trustee will
distribute any such amounts received on the next occurring Business Day (a
"SPECIAL DISTRIBUTION DATE").
Each Certificateholder, by its acceptance of a Certificate, covenants
and agrees that such Certificateholder will not at any time institute against
the Trust, or join in any institution against the Trust of, any bankruptcy
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Certificates or the Trust
Agreement.
<PAGE>
- 3 -
Distributions made on this Certificate will be made as provided in the
Trust Agreement by the Trustee by wire transfer in immediately available funds,
or check mailed to the Certificateholder of record in the Certificate Register
without the presentation or surrender of this Certificate or the making of any
notation hereon, except that with respect to Certificates registered on the
Record Date in the name of the nominee of the Clearing Agency (initially, such
nominee shall be Cede & Co.), payments will be made by wire transfer in
immediately available funds to the account designated by such nominee. Except
as otherwise provided in the Trust Agreement and notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the Delivery Office or such other location as
may be specified in such notice.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this Certificate shall not
entitle the Holder hereof to any benefit under the Trust Agreement or be valid
for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE HOLDER HEREOF SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
<PAGE>
- 4 -
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed as of the date set forth below.
[NAME OF] CERTIFICATES
TRUST, SERIES 199[__]-[SERIES DESIGNATION],
By: [NAME OF TRUSTEE] not in its individual
capacity but solely as Trustee,
By:___________________________
Authorized Officer
Dated: [Month __, 199_]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the [NAME OF] Certificates, Series 199[__]-[SERIES
DESIGNATION], described in the Trust Agreement referred to herein.
[NAME OF TRUSTEE],
not in its individual
capacity but solely as
Trustee,
Date: [Month __, 199_] By:___________________________
Authorized Officer
<PAGE>
(REVERSE OF CERTIFICATE)
The Certificates are limited in right of distribution to certain
payments and collections respecting the Underlying Securities, all as more
specifically set forth herein and in the Trust Agreement. The registered Holder
hereof, by its acceptance hereof, agrees that it will look solely to the [Trust
Property] (to the extent of its rights therein) for distributions hereunder.
The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Depositor and the Trustee and the rights of the Certificateholders under the
Trust Agreement at any time by the Depositor and the Trustee with the consent of
the Holders of Certificates evidencing greater than 66-2/3% of the aggregate
Voting Rights of the Certificates subject to certain provisions set forth in the
Trust Agreement. Any such consent by the Holder of this Certificate (or any
predecessor Certificate) shall be conclusive and binding on such Holder and upon
all future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Trust Agreement also permits
the amendment thereof, in certain limited circumstances, without the consent of
the Holders of any of the Certificates.
The Certificates are issuable in fully registered form only in minimum
original principal amounts of $1,000 and integral multiples of $1,000 in excess
thereof.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies of the Certificate Registrar maintained by
the Trustee in the Borough of Manhattan, The City of New York, duly endorsed by
or accompanied by an assignment in the form below and by such other documents as
required by the Trust Agreement, and thereupon one or more new Certificates of
the same class in authorized denominations evidencing the same principal amount
will be issued to the designated transferee or transferees. The initial
Certificate Registrar appointed under the Trust Agreement is [Name of Trustee].
No service charge will be made for any registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
The Depositor and the Trustee and any agent of the Depositor or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes,
<PAGE>
- 2 -
and neither the Depositor, the Trustee, nor any such agent shall be affected by
any notice to the contrary.
It is the intention of the parties to the Trust Agreement that the
Trust created thereunder shall constitute a fixed investment trust for federal
income tax purposes under Treasury Regulation Section 301.7701-4, and the
Certificateholder agrees to treat the Trust, any distributions therefrom and its
beneficial interest in the Certificates consistently with such characterization.
The Trust may not engage in any business or activities other than in
connection with, or relating to, the holding, protecting and preserving of the
Trust Property and the issuance of the Certificates, and other than those
required or authorized by the Trust Agreement or incidental and necessary to
accomplish such activities. The Trust may not issue or sell any certificates or
other obligations other than the Certificates or otherwise incur, assume or
guarantee any indebtedness for money borrowed.
The Trust and the obligations of the Depositor and the Trustee created
by the Trust Agreement with respect to the Certificates shall terminate upon the
earliest to occur of (i) the distribution in full of all amounts due to
Certificateholders and retirement of the Underlying Securities, (ii) the
distribution in full of all amounts due to Certificateholders on any Redemption
Date, and (iii) the expiration of 21 years from the death of the last survivor
of the descendants of Joseph P. Kennedy, the late Ambassador of the United
States to the Court of St. James, living on the date hereof.
An employee benefit plan subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), including an individual retirement
account or Keogh plan (any such plan or account, a "PLAN") may purchase
Certificates if either (i) the Underwriter is able to confirm the existence of
at least 100 independent purchasers or (ii) the Plan can represent that its
purchase of the Certificates would not be prohibited under ERISA or the Code.
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
- --------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
- --------------------------------------------------------------------------------
the within Certificate, and all rights thereunder,
hereby irrevocably constituting and appointing
- --------------------------------------------------------------------------------
Attorney to transfer said Certificate on the books of the Certificate Register,
with full power of substitution in the premises.
Dated:
_______________________*
Signature Guaranteed:
_______________________*
*NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a brokerage firm or financial institution that is a member of a
Securities Approved Medallion Program such as Securities Transfer Agents
Medallion Program (STAMP), Stock Exchange Medallion Program (SEMP) or New York
Stock Exchange Inc. Medallion Signature Program (MSP).
<PAGE>
EXHIBIT B
Form of Certificate
No. ___ $16,500,000
CUSIP NO. 290026 AB 9
SEE REVERSE FOR CERTAIN DEFINITIONS
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE REPRESENTS A FRACTIONAL UNDIVIDED INTEREST IN THE
TRUST AND DOES NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN, AND IS NOT
GUARANTEED BY THE DEPOSITOR OR THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE TRUST ASSETS ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR ANY OTHER PERSON.
BOND-BACKED INVESTMENT CERTIFICATES TRUST,
SERIES 1997-DU PONT
BOND-BACKED INVESTMENT CERTIFICATES,
SERIES 1997-DU PONT
$16,500,000 PRINCIPAL BALANCE
7.50% CERTIFICATE RATE
evidencing a fractional undivided beneficial ownership interest in the Trust, as
defined below, the property of which consists principally of $16,5000,000
aggregate principal amount of 8.25% Notes due September 15, 2006 of E.I. du Pont
de Nemours and Company (the "UNDERLYING SECURITY ISSUER") and all payments
received thereon (the "TRUST PROPERTY"), deposited in trust by Elmwood Funding
Limited (the "DEPOSITOR").
THIS CERTIFIES THAT CEDE & CO. is the registered owner of $16,500,000 DOLLARS
nonassessable, fully-paid, fractional undivided interest in the Bond-backed
Investment Certificates Trust, Series 1997-Du Pont, formed by the Depositor.
<PAGE>
- 2 -
The Trust was created pursuant to a Standard Terms for Trust
Agreements, dated as of March 14, 1997 (the "STANDARD TERMS"), between the
Depositor and United States Trust Company of New York, not in its individual
capacity but solely as Trustee (the "TRUSTEE"), as supplemented by the Series
Supplement, Series 1997-Du Pont, dated as of May 12, 1997 (the "SERIES
SUPPLEMENT" and, together with the Standard Terms, the "TRUST AGREEMENT"),
between the Depositor and the Trustee. This Certificate does not purport to
summarize the Trust Agreement and reference is hereby made to the Trust
Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby and the rights, duties and
obligations of the Trustee with respect hereto. A copy of the Trust Agreement
may be obtained from the Trustee by written request sent to the Corporate Trust
Office. Capitalized terms used but not defined herein have the meanings
assigned to them in the Trust Agreement.
This Certificate is one of the duly authorized Certificates designated
as the "Bond-backed Investment Certificates, Series 1997-Du Pont" (herein called
the "CERTIFICATES"). This Certificate is issued under and is subject to the
terms, provisions and conditions of the Trust Agreement, to which Trust
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound. The Trust Property consists of: (i)
Underlying Securities described in the Trust Agreement; (ii) all payments on or
collections in respect of the Underlying Securities accrued on or after the
Original Issue Date together with any proceeds thereof, subject to the Retained
Interest, the Call Right and the Optional Exchange Right; and (iii) all funds
from time to time deposited with the Trustee relating to the Certificates and
any investments thereof, together with any and all income, proceeds and payments
with respect thereto.
Subject to the terms and conditions of the Trust Agreement (including
the availability of funds for distributions) and until the obligation created by
the Trust Agreement shall have terminated in accordance therewith, distributions
will be made on each Distribution Date, to the Person in whose name this
Certificate is registered on the applicable Record Date, in an amount equal to
such Certificateholder's fractional undivided interest in the amount required to
be distributed to the Holders of the Certificates on such Distribution Date.
The Record Date applicable to any Distribution Date is the close of business on
the third Business Day immediately preceding such Distribution Date (whether or
not a Business Day).
Each Certificateholder, by its acceptance of a Certificate, covenants
and agrees it will not, until the date which is one year and one day after
termination of the Trust, acquiesce, petition or otherwise invoke or cause the
Trust to
<PAGE>
- 3 -
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 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 or all or any part of the property or assets of the Trust or
ordering the winding up or liquidation of the affairs of the Trust.
Distributions made on this Certificate will be made as provided in the
Trust Agreement by the Trustee by wire transfer in immediately available funds,
or check mailed to the Certificateholder of record in the Certificate Register
without the presentation or surrender of this Certificate or the making of any
notation hereon, except that with respect to Certificates registered on the
Record Date in the name of the nominee of the Clearing Agency (initially, such
nominee shall be Cede & Co.), payments will be made by wire transfer in
immediately available funds to the account designated by such nominee. Except
as otherwise provided in the Trust Agreement and notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the Corporate Trust Office or such other
location as may be specified in such notice.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this Certificate shall not
entitle the Holder hereof to any benefit under the Trust Agreement or be valid
for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE HOLDER HEREOF SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
<PAGE>
- 4 -
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed as of the date set forth below.
BOND-BACKED INVESTMENT CERTIFICATES
TRUST, SERIES 1997-DU PONT
By: UNITED STATES TRUST COMPANY OF NEW
YORK not in its individual capacity but
solely as Trustee,
By:___________________________
Authorized Officer
Dated: May 12, 1997
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Bond-backed Investment Certificates, Series 1997-Du
Pont, described in the Trust Agreement referred to herein.
UNITED STATES TRUST COMPANY
OF NEW YORK, not in its individual
capacity but solely as
Trustee,
Date: By:___________________________
Authorized Officer
<PAGE>
(REVERSE OF CERTIFICATE)
The Certificates are limited in right of distribution to certain
payments and collections respecting the Underlying Securities, all as more
specifically set forth herein and in the Trust Agreement. The registered Holder
hereof, by its acceptance hereof, agrees that it will look solely to the Trust
Property (to the extent of its rights therein) for distributions hereunder.
The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Depositor and the Trustee and the rights of the Certificateholders under the
Trust Agreement at any time by the Depositor and the Trustee with the consent of
the Holders of Certificates evidencing greater than 66-2/3% of the aggregate
Voting Rights of the Certificates, subject to certain provisions set forth in
the Trust Agreement. Any such consent by the Holder of this Certificate (or any
predecessor Certificate) shall be conclusive and binding on such Holder and upon
all future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Trust Agreement also permits
the amendment thereof, in certain limited circumstances, without the consent of
the Holders of any of the Certificates.
The Certificates are issuable in fully registered form only in minimum
original principal amounts of $1,000 and integral multiples of $1,000 in excess
thereof.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies of the Certificate Registrar maintained by
the Trustee in the Borough of Manhattan, The City of New York, duly endorsed by
or accompanied by an assignment in the form below and by such other documents as
required by the Trust Agreement, and thereupon one or more new Certificates of
the same class in authorized denominations evidencing the same principal amount
will be issued to the designated transferee or transferees. The initial
Certificate Registrar appointed under the Trust Agreement is United States Trust
Company of New York.
No service charge shall be made for any registration of transfer or
exchange of this Certificate, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of this Certificate,
other than an exchange pursuant to Section 5.03 of the Trust Agreement not
involving any transfer.
<PAGE>
- 2 -
The Depositor, the Trustee and any agent of the Depositor or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner of this Certificate for the purpose of receiving distributions of
principal of (and premium, if any) and interest, if any, on this Certificate and
for all other purposes whatsoever, whether or not this Certificate be overdue,
and neither the Depositor or the Trustee, nor any agent of the Depositor or the
Trustee shall be affected by notice to the contrary.
It is the intention of the parties to the Trust Agreement that the
Trust created thereunder shall constitute a grantor trust for federal income tax
purposes and the Certificateholder agrees to treat the Trust, any distributions
therefrom and its beneficial interest in the Certificates consistently with such
characterization.
The Trust may not engage in any business or activities other than in
connection with, or relating to, the holding, protecting and preserving of the
Trust Property and the issuance of the Certificates, and other than those
required or authorized by the Trust Agreement or incidental and necessary to
accomplish such activities. The Trust may not issue or sell any certificates or
other obligations other than the Certificates or otherwise incur, assume or
guarantee any indebtedness for money borrowed.
The Trust and the obligations of the Depositor and the Trustee created
by the Trust Agreement with respect to the Certificates shall terminate upon the
earliest to occur of (i) the distribution in full of all amounts due to
Certificateholders at maturity, (ii) the settlement in full by the Trust of all
payments and deliveries required in connection with any exercise of the Optional
Exchange Right, and (iii) the expiration of 21 years from the death of the last
survivor of the descendants of Joseph P. Kennedy, the late Ambassador of the
United States to the Court of St. James, living on the date hereof.
An employee benefit plan subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), including an individual retirement
account or Keogh plan (any such plan or account, a "PLAN") may purchase
Certificates if the Underwriter is able to confirm the existence of at least 100
independent purchasers of beneficial interests in this Certificate.
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
____________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
____________________________________________________________
the within Certificate, and all rights thereunder,
hereby irrevocably constituting and appointing
____________________________________________________________
Attorney to transfer said Certificate on the books of the Certificate Register,
with full power of substitution in the premises.
Dated:
_______________________*
Signature Guaranteed:
_______________________*
*NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a brokerage firm or financial institution that is a member of a
Securities Approved Medallion Program such as Securities Transfer Agents
Medallion Program (STAMP), Stock Exchange Medallion Program (SEMP) or New York
Stock Exchange Inc. Medallion Signature Program (MSP).
<PAGE>
No. R-1 $16,500,000
CUSIP NO. 290026 AB 9
SEE REVERSE FOR CERTAIN DEFINITIONS
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE REPRESENTS A FRACTIONAL UNDIVIDED INTEREST IN THE
TRUST AND DOES NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN, AND IS NOT
GUARANTEED BY THE DEPOSITOR OR THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE TRUST ASSETS ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR ANY OTHER PERSON.
BOND-BACKED INVESTMENT CERTIFICATES TRUST,
SERIES 1997-DU PONT
BOND-BACKED INVESTMENT CERTIFICATES,
SERIES 1997-DU PONT
$16,500,000 PRINCIPAL BALANCE
7.50% CERTIFICATE RATE
evidencing a fractional undivided beneficial ownership interest in the Trust, as
defined below, the property of which consists principally of $16,500,000
aggregate principal amount of 8.25% Notes due September 15, 2006 of E.I. du Pont
de Nemours and Company (the "UNDERLYING SECURITY ISSUER") and all payments
received thereon (the "TRUST PROPERTY"), deposited in trust by Elmwood Funding
Limited (the "DEPOSITOR").
THIS CERTIFIES THAT CEDE & CO. is the registered owner of $16,500,000 DOLLARS
nonassessable, fully-paid, fractional undivided interest in the Bond-backed
Investment Certificates Trust, Series 1997-Du Pont, formed by the Depositor.
The Trust was created pursuant to a Standard Terms for Trust
Agreements, dated as of March 14, 1997 (the "STANDARD TERMS"), between the
Depositor and United States Trust Company of New York, not in its individual
capacity but solely as Trustee
<PAGE>
- 2 -
(the "TRUSTEE"), as supplemented by the Series Supplement, Series 1997-Du Pont,
dated as of May 12, 1997 (the "SERIES SUPPLEMENT" and, together with the
Standard Terms, the "TRUST AGREEMENT"), between the Depositor and the Trustee.
This Certificate does not purport to summarize the Trust Agreement and reference
is hereby made to the Trust Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and obligations of the Trustee with respect hereto. A
copy of the Trust Agreement may be obtained from the Trustee by written request
sent to the Corporate Trust Office. Capitalized terms used but not defined
herein have the meanings assigned to them in the Trust Agreement.
This Certificate is one of the duly authorized Certificates designated
as the "Bond-backed Investment Certificates, Series 1997-Du Pont" (herein called
the "CERTIFICATES"). This Certificate is issued under and is subject to the
terms, provisions and conditions of the Trust Agreement, to which Trust
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound. The Trust Property consists of: (i)
Underlying Securities described in the Trust Agreement; (ii) all payments on or
collections in respect of the Underlying Securities accrued on or after the
Original Issue Date together with any proceeds thereof, subject to the Retained
Interest, the Call Right and the Optional Exchange Right; and (iii) all funds
from time to time deposited with the Trustee relating to the Certificates and
any investments thereof, together with any and all income, proceeds and payments
with respect thereto.
Subject to the terms and conditions of the Trust Agreement (including
the availability of funds for distributions) and until the obligation created by
the Trust Agreement shall have terminated in accordance therewith, distributions
will be made on each Distribution Date, to the Person in whose name this
Certificate is registered on the applicable Record Date, in an amount equal to
such Certificateholder's fractional undivided interest in the amount required to
be distributed to the Holders of the Certificates on such Distribution Date.
The Record Date applicable to any Distribution Date is the close of business on
the third Business Day immediately preceding such Distribution Date (whether or
not a Business Day).
Each Certificateholder, by its acceptance of a Certificate, covenants
and agrees it will not, until the date which is one year and one day after
termination of the Trust, acquiesce, petition or otherwise invoke or cause the
Trust 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 under
a Federal or state bankruptcy, insolvency or similar law or appointing a
receiver, liquidator, assignee, trustee, custodian,
<PAGE>
- 3 -
sequestrator or other similar official of the Trust or all or any part of the
property or assets of the Trust or ordering the winding up or liquidation of the
affairs of the Trust.
Distributions made on this Certificate will be made as provided in the
Trust Agreement by the Trustee by wire transfer in immediately available funds,
or check mailed to the Certificateholder of record in the Certificate Register
without the presentation or surrender of this Certificate or the making of any
notation hereon, except that with respect to Certificates registered on the
Record Date in the name of the nominee of the Clearing Agency (initially, such
nominee shall be Cede & Co.), payments will be made by wire transfer in
immediately available funds to the account designated by such nominee. Except
as otherwise provided in the Trust Agreement and notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the Corporate Trust Office or such other
location as may be specified in such notice.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this Certificate shall not
entitle the Holder hereof to any benefit under the Trust Agreement or be valid
for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE HOLDER HEREOF SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
<PAGE>
- 4 -
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed as of the date set forth below.
BOND-BACKED INVESTMENT CERTIFICATES
TRUST, SERIES 1997-DU PONT
By: UNITED STATES TRUST COMPANY
OF NEW YORK not in its individual
capacity but solely as Trustee,
By:___________________________
Authorized Officer
Dated: May 12, 1997
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Bond-backed Investment Certificates, Series 1997-Du
Pont, described in the Trust Agreement referred to herein.
UNITED STATES TRUST COMPANY
OF NEW YORK, not in its individual
capacity but solely as
Trustee,
Date: May 12, 1997 By:___________________________
Authorized Officer
<PAGE>
(REVERSE OF CERTIFICATE)
The Certificates are limited in right of distribution to certain
payments and collections respecting the Underlying Securities, all as more
specifically set forth herein and in the Trust Agreement. The registered Holder
hereof, by its acceptance hereof, agrees that it will look solely to the Trust
Property (to the extent of its rights therein) for distributions hereunder.
The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Depositor and the Trustee and the rights of the Certificateholders under the
Trust Agreement at any time by the Depositor and the Trustee with the consent of
the Holders of Certificates evidencing greater than 66-2/3% of the aggregate
Voting Rights of the Certificates, subject to certain provisions set forth in
the Trust Agreement. Any such consent by the Holder of this Certificate (or any
predecessor Certificate) shall be conclusive and binding on such Holder and upon
all future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Trust Agreement also permits
the amendment thereof, in certain limited circumstances, without the consent of
the Holders of any of the Certificates.
The Certificates are issuable in fully registered form only in minimum
original principal amounts of $1,000 and integral multiples of $1,000 in excess
thereof.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies of the Certificate Registrar maintained by
the Trustee in the Borough of Manhattan, The City of New York, duly endorsed by
or accompanied by an assignment in the form below and by such other documents as
required by the Trust Agreement, and thereupon one or more new Certificates of
the same class in authorized denominations evidencing the same principal amount
will be issued to the designated transferee or transferees. The initial
Certificate Registrar appointed under the Trust Agreement is United States Trust
Company of New York.
No service charge shall be made for any registration of transfer or
exchange of this Certificate, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of this Certificate,
other than an exchange pursuant to Section 5.03 of the Trust Agreement not
involving any transfer.
The Depositor, the Trustee and any agent of the Depositor or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner of this Certificate for
<PAGE>
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the purpose of receiving distributions of principal of (and premium, if any) and
interest, if any, on this Certificate and for all other purposes whatsoever,
whether or not this Certificate be overdue, and neither the Depositor or the
Trustee, nor any agent of the Depositor or the Trustee shall be affected by
notice to the contrary.
It is the intention of the parties to the Trust Agreement that the
Trust created thereunder shall constitute a grantor trust for federal income tax
purposes and the Certificateholder agrees to treat the Trust, any distributions
therefrom and its beneficial interest in the Certificates consistently with such
characterization.
The Trust may not engage in any business or activities other than in
connection with, or relating to, the holding, protecting and preserving of the
Trust Property and the issuance of the Certificates, and other than those
required or authorized by the Trust Agreement or incidental and necessary to
accomplish such activities. The Trust may not issue or sell any certificates or
other obligations other than the Certificates or otherwise incur, assume or
guarantee any indebtedness for money borrowed.
The Trust and the obligations of the Depositor and the Trustee created
by the Trust Agreement with respect to the Certificates shall terminate upon the
earliest to occur of (i) the distribution in full of all amounts due to
Certificateholders at maturity, (ii) the settlement in full by the Trust of all
payments and deliveries required in connection with any exercise of the Optional
Exchange Right, and (iii) the expiration of 21 years from the death of the last
survivor of the descendants of Joseph P. Kennedy, the late Ambassador of the
United States to the Court of St. James, living on the date hereof.
An employee benefit plan subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), including an individual retirement
account or Keogh plan (any such plan or account, a "PLAN") may purchase
Certificates if the Underwriter is able to confirm the existence of at least 100
independent purchasers of beneficial interests in this Certificate.
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ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
____________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
____________________________________________________________
the within Certificate, and all rights thereunder,
hereby irrevocably constituting and appointing
____________________________________________________________
Attorney to transfer said Certificate on the books of the Certificate Register,
with full power of substitution in the premises.
Dated:
_______________________*
Signature Guaranteed:
_______________________*
*NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a brokerage firm or financial institution that is a member of a
Securities Approved Medallion Program such as Securities Transfer Agents
Medallion Program (STAMP), Stock Exchange Medallion Program (SEMP) or New York
Stock Exchange Inc. Medallion Signature Program (MSP).
