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): April 8, 1998
MERRILL LYNCH DEPOSITOR, INC.
(on behalf of Public STEERS(R) Series 1998 MCIC-P1 Trust)
(Exact name of registrant as specified in its charter)
Delaware 333-29015 13-3891329
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
World Financial Center,
New York, New York 10281
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 449-1000
INFORMATION TO BE INCLUDED IN REPORT
Item 1. Changes in Control of Registrant
Not Applicable.
Item 2. Acquisition or Disposition of Assets
Not Applicable.
Item 3. Bankruptcy or Receivership
Not Applicable.
<PAGE>
2
Item 4. Changes in Registrant's Certifying Accountant
Not Applicable.
Item 5. Other Events
On April 8, 1998, Public STEERS(R) Series 1998 MCIC-P1 Trust,
for which Merrill Lynch Depositor, Inc. (the "Depositor") acted as depositor,
issued $50,000,000 aggregate principal amount Trust Certificates and a call
option on the Underlying Securities (as defined in the Supplement).
In connection therewith, the Depositor entered into a Public
STEERS(R) Series 1998 MCIC-P1 Supplement, dated as of April 8, 1998 (the
"Supplement"), by and between the Depositor, United States Trust Company of New
York, as trustee (in such capacity, the "Trustee") and securities intermediary
(in such capacity, the "Securities Intermediary"). The Supplement augments the
Standard Terms for Trust Agreements, dated as of February 20, 1998 (the
"Standard Terms"), by and between the Depositor and the Trustee and Securities
Intermediary.
Item 6. Resignation of Registrant's Directors
Not Applicable.
Item 7. Financial Statements and Exhibits
(a) Financial statements of businesses acquired.
Not Applicable.
(b) Pro forma financial information.
Not Applicable.
(c) Exhibits.
<PAGE>
3
Item 601(a)
of Regulation S-K
Exhibit No. Description
- ----------- -----------
4.1 Series Supplement to the Standard Terms for
Trust Agreements, dated as of April 8, 1998
between Merrill Lynch Depositor, Inc. and United
States Trust Company of New York, as Trustee and
as Securities Intermediary.
99.1 Public STEERS(R) Series 1998 MCIC-P1 Trust
Terms Sheet dated March 25, 1998.
Item 8. Change in Fiscal Year
Not Applicable.
Item 9. Sales of Equity Securities Pursuant to Regulation S
Not Applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereto duly authorized.
MERRILL LYNCH DEPOSITOR, INC.
Date: April 15, 1998 By: /s/ Frank D. Ronan
-----------------------------
Name: Frank D. Ronan
Title: President
INDEX TO EXHIBITS
Exhibit No. Description
- ----------- -----------
4.1 Series Supplement to the Standard Terms for
Trust Agreements, dated as of April 8, 1998
between Merrill Lynch Depositor, Inc. and United
States Trust Company of New York, as Trustee and
as Securities Intermediary.
99.1 Public STEERS(R) Series 1998 MCIC-P1 Trust
Terms Sheet dated March 25, 1998.
(R) "STEERS" is a registered service mark of Merrill Lynch & Co., Inc.
PUBLIC STEERS(R) SERIES 1998 MCIC-P1 TRUST
SERIES SUPPLEMENT
between
MERRILL LYNCH DEPOSITOR, INC.,
as Depositor,
and
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee and as Securities Intermediary
Dated as of April 8, 1998
<PAGE>
SERIES 1998 MCIC-P1 SUPPLEMENT, dated as of April 8, 1998 (the
"Supplement"), by and between MERRILL LYNCH DEPOSITOR, INC., a Delaware
corporation, as Depositor, UNITED STATES TRUST COMPANY OF NEW YORK, a New York
corporation, as Trustee and Securities Intermediary.
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 Supplement, which shall
incorporate the terms of the Standard Terms for Trust Agreements, dated as of
February 20, 1998 (the "Standard Terms" and, together with this Supplement, the
"Trust Agreement"), by and between the Depositor and the Trustee and Securities
Intermediary, as modified by this Supplement;
WHEREAS, the Depositor desires to deposit the Underlying
Securities set forth on Schedule I attached hereto 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 the Certificates and the Call Rights; and
WHEREAS, the Trustee has joined in the execution of the
Standard Terms and this Supplement to evidence the acceptance by the Trustee of
the Trust;
WHEREAS, the Securities Intermediary has joined in the
execution of the Standard Terms and this Supplement to evidence the acceptance
by the Securities Intermediary of its obligations thereunder and hereunder;
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 and Securities Intermediary as follows:
Section 1. Incorporation of Standard Terms. (a) 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
Supplement and the Standard Terms shall form a single agreement among the
parties. In the event of any inconsistency between the provisions of this
Supplement and the provisions of the Standard Terms, the provisions of this
Supplement will control with respect to the transactions described herein.
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 Supplement
(Section 2(b) hereof sets forth terms listed in the Standard
<PAGE>
2
Terms that are not applicable to this Series). Capitalized terms used but not
defined herein shall have the meanings assigned to them in the Standard Terms.
"Allocation Ratio": The allocation amongst the
Certificateholders in accordance with their pro rata interests in the
Certificates.
"Bankruptcy Code": The United States Bankruptcy Code.
"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 also is specified as a Business Day with respect to the
Underlying Securities.
"Call Date": June 15, 2003 (or if such date is not a Business
Day, the next succeeding Business Day).
"Call Holder": The holder of a Call Right.
"Call Price": The price at which a Call Holder may purchase
Underlying Securities. For a given Call Holder, the Call Price shall be equal to
the aggregate principal amount of Underlying Securities as to which such Call
Holder's Call Right may be exercised.
"Call Right" and "Call Rights": The right, but not the
obligation, of one or more third parties to purchase from the Trust on June 15,
2003 Underlying Securities held by the Trust as of May 14, 2003. Each such right
shall be a Call Right and, collectively, such rights shall be the Call Rights.
"Certificates": The trust certificates issued in an aggregate
principal amount of $50,000,000, entitled to receive on each Distribution Date
until the Final Scheduled Distribution Date distributions at a rate of 7.125%
per annum on their principal amount, and entitled to receive on the Final
Scheduled Distribution Date a distribution equal to their aggregate principal
amount.
"Closing Date": April 8, 1998.
"Collection Period": (i) With respect to each June 15
Distribution Date, the period beginning on the day after the December 15
Distribution Date of the previous year and ending on such June 15 Distribution
Date, inclusive, except for the June 15, 1998 Distribution Date, as to which the
Collection Period shall be the period beginning on the Cut-off Date and ending
on such June 15, 1998 Distribution Date, inclusive, and (ii) with respect to
each December 15 Distribution Date, the period beginning on the day after the
June 15 Distribution
<PAGE>
3
Date of that year and ending on such December 15 Distribution Date, inclusive;
provided, however, that clauses (i) and (ii) shall be subject to Section 9(c)
hereof.
"Confirmation": As defined in the ISDA Master Agreement.
"Corporate Trust Office": The office of the Trustee located at
114 West 47th Street, 25th Floor, New York, New York 10036, Attention: Corporate
Trust Department; provided, however, that the office at which certificated
securities are delivered for registration of transfer, cancellation or exchange
shall be the office of the Trustee, located at 111 Broadway, Lower Level, New
York, New York 10006.
"Cut-off Date": December 15, 1997.
"Depository": The Depository Trust Company, its nominees and
their respective successors.
"Distribution Date": June 15 and December 15 of each year (or
if such date is not a Business Day, the next succeeding Business Day),
commencing on June 15, 1998 and ending on the Final Scheduled Distribution Date.
"Distribution Election": Upon notice of the events set forth
in Section 3.04 of the Standard Terms, the Trustee shall exercise the remedy set
forth in clause (i) of such Section.
"Eligible Investments": As defined in the Standard Terms;
provided, however, that (i) the minimum required rating for long-term
instruments will be equal to the lower of the rating of the Underlying
Securities or the Trust Certificates, and (ii) the rating of any short-term
instruments will be A-1+ by S&P and P1 by Moody's; and provided, further, that
any such investment matures no later than the Business Day prior to the next
succeeding Distribution Date.
"Escrow Agent": As will be set forth in the Escrow Agreement.
"Escrow Agreement" and "Escrow Agreements": The escrow
agreement to be entered into on the Exercise Date among a given Call Holder, the
Trustee and the Escrow Agent pursuant to Section 14(b)(iii)(2) hereof. Each such
agreement shall be an Escrow Agreement and, collectively, such agreements shall
be the Escrow Agreements.
"Exercise Date": May 14, 2003.
"Event of Default": (i) A default in the payment of any
interest on any Underlying Security after the same becomes due and payable
(subject to any applicable grace period), (ii) a default in the payment of the
principal of or any installment of principal of any Underlying Security when the
same becomes due and payable and (iii) any other event specified as an event
<PAGE>
4
of default in the Underlying Securities Indenture. For a summary of certain
events of default in the Underlying Securities Indenture, please refer to the
Prospectus Supplement.
"Final Scheduled Distribution Date": June 15, 2003 (or if such
date is not a Business Day, the next succeeding Business Day).
"Fixed Pass-Through Rate": 7.125% per annum.
"ISDA Master Agreement": The ISDA Master Agreement, dated as
of April 8, 1998, by and between Merrill Lynch International and the Trust.
"Optional Exchange Date": Any Distribution Date.
"Ordinary Expenses": The compensation due to the Trustee for
Ordinary Expenses as defined in the Standard Terms, which, with respect to
Ordinary Expenses other than those referred to in clause (iii) of such
definition and other than the costs of converting to EDGAR format the periodic
reports required for the Trust under the Exchange Act, shall be fixed at $2,000
per annum (payable in semi-annual installments of $1,000).
"Pass-Through Rate": The Fixed Pass-Through Rate.
"Prepaid Ordinary Expenses": Zero (0).
"Prospectus Supplement": The Prospectus Supplement, dated
April 3, 1998, relating to the Certificates.
"Put Price": The redemption price paid by the Underlying
Securities Issuer to the Trust in connection with the exercise of the Put Right.
"Put Right": The right of the Trustee, on behalf of the
Certificateholders, to require the Underlying Securities Issuer, pursuant to the
terms of the Underlying Securities Indenture, to redeem Underlying Securities on
June 15, 2003 at a redemption price equal to the principal amount of the
Underlying Securities being redeemed. The Trustee shall exercise the Put Right
only as to Underlying Securities against which no Call Right has been exercised.
"Rating Agency": Moody's and S&P.
"Record Date": The close of business on the June 1 or December
1, as the case may be, next preceding each Distribution Date.
"Series": Public STEERS(R) Trust Certificates, Series 1998
MCIC-P1.
<PAGE>
5
"Schedule": As defined in the ISDA Master Agreement.
"Underlying Securities" and "Underlying Security": The
$50,000,000 aggregate principal amount of 71/8% Debentures due June 15, 2027
issued by the Underlying Securities Issuer, as described in Schedule I hereto.
Each such Debenture shall be an Underlying Security and, collectively, such
Debentures shall be the Underlying Securities.
"Underlying Securities Issuer": MCI Communications
Corporation, a Delaware corporation.
"Underlying Securities Sale Date": Any date on which a
portion, or all, of the Underlying Securities are sold by the Trustee pursuant
to the provisions of this Trust Agreement.
(b) The terms listed below are not applicable to this Series.
"Accounting Date"
"Administration Account"
"Administrative Agent"
"Administration Agreement"
"Administrative Agent Termination Event"
"Advance"
"Calculation Agent"
"Credit Support"
"Credit Support Instrument"
"Credit Support Provider"
"Eligible Expense"
"Exchange Rate Agent"
"Floating Pass-Through Rate"
"Letter of Credit"
<PAGE>
6
"Limited Guarantor"
"Limited Guaranty"
"Notional Amount"
"Related Assets"
"Reserve Account"
"Requisite Reserve Amount"
"Retained Interest"
"Surety Bond"
"Swap Agreement"
"Swap Counterparty"
"Swap Distribution Amount"
"Swap Guarantee"
"Swap Guarantor"
"Swap Receipt Amount"
"Swap Termination Payment"
Section 3. Designation of Trust and Certificates. (a) The
Trust created hereby shall be known as the "Public STEERS(R) Series 1998 MCIC-P1
Trust". The Certificates evidencing certain undivided ownership interests
therein shall be known as the "Public STEERS(R) Trust Certificates, Series 1998
MCIC-P1".
(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 authorized denominations of
$1,000 (the "Authorized Denomination") and integral multiples thereof. Except as
provided in the Standard Terms, the Trust shall not issue additional
Certificates or incur any indebtedness.
<PAGE>
7
(c) On each Distribution Date, commencing on June 15, 1998 and
ending on the Final Scheduled Distribution Date, the Certificates will be
entitled to receive interest payments at a rate of 7.125% per annum on the
principal amount of the Certificates. Interest due on the Final Scheduled
Distribution Date will be payable on such date to Certificateholders of record
as of the close of business on June 1, 2003.
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 Schedule I hereto;
and
(ii) all documents set forth in Section 5.12 of the Standard
Terms except that clauses (v), (vi) and (vii) of Section 5.12(a) shall
not apply to this Series.
Section 5. Distributions. (a) On each Distribution Date, the
Trustee shall apply solely to the extent of Available Funds in the Certificate
Account as follows:
(i) first, to the Trustee, reimbursement for any approved
Extraordinary Trust Expenses incurred by the Trustee in accordance with
Section 6(b) hereof and approved by not less than 100% of the
Certificateholders;
(ii) second, to the Certificateholders, distributions accrued
during the related Collection Period at the rate of 7.125% per annum on
the principal amount of such Certificates and distributable on such
Certificates on such Distribution Date;
(iii) third, to the Certificateholders, if available, any
additional distribution owed and paid by the Underlying Securities
Issuer as a result of a delay in the receipt by the Trustee of any
payment on the Underlying Securities;
(iv) fourth, to the Certificateholders, on the Final Scheduled
Distribution Date only, a distribution of the principal amount of the
Certificates;
(v) fifth, to the Trustee, the Ordinary Expenses; and
(vi) sixth, to the extent there remain Available Funds in the
Certificate Account, to any creditors of the Trust in satisfaction of
liabilities thereto.
Subject to Section 9(c) hereof, to the extent Available Funds are insufficient
to make any required distributions due to the Certificates on any Distribution
Date, any shortfall will be carried over and will be distributed on the next
Distribution Date on which sufficient funds are available on the Available Funds
to pay such shortfall.
<PAGE>
8
(b) On the Optional Exchange Date, if applicable, the Trustee
shall distribute to Merrill Lynch & Co. or any of its Affiliates Underlying
Securities in accordance with Section 7 hereof.
Section 6. Trustee's Fees; Escrow Agent's Fees. (a) Payment to
the Trustee of Ordinary Expenses shall be as set forth in a separate agreement
between the Trustee and the Depositor. The Trustee agrees that in the event
Ordinary Expenses are not paid in accordance with such agreement, it shall (i)
not have any claim or recourse against the Trust or the property of the Trust
with respect thereto and (ii) continue to perform all of its services as set
forth herein unless it elects to resign as Trustee in accordance with Section
7.08 of the Standard Terms.
(b) Extraordinary Trust Expenses shall not be paid out of the
Deposited Assets unless (i) the Trustee is satisfied that it will have adequate
security or indemnity in respect of such costs, expenses and liabilities, and
(ii) all the Certificateholders of Certificates then outstanding have voted to
require the Trustee to incur such Extraordinary Trust Expenses. If Extraordinary
Trust Expenses are not approved unanimously as set forth in clause (ii), such
Extraordinary Trust Expenses shall not be an obligation of the Trust, and the
Trustee shall not file any claim against the Trust therefor notwithstanding
failure of Certificateholders to reimburse the Trustee. In addition, if the
conditions in (i) and (ii) are not both satisfied, the Trustee shall not be
obligated to incur any Extraordinary Trust Expense.
(c) In the event that one or more Call Holders is required to
deposit the Call Price with the Escrow Agent on the Exercise Date pursuant to
Section 14(b)(iii)(2) hereof, the Depositor and the Escrow Agent shall enter
into an agreement reasonably acceptable to both parties thereto whereby the
Depositor shall pay to the Escrow Agent a fee in consideration for its services
under the Escrow Agreement or Escrow Agreements, as applicable.
Section 7. Optional Exchange. (a) Merrill Lynch & Co. or any
of its Affiliates may, if it holds Certificates of a certain principal amount
and Call Rights pertaining to a like amount, notify the Trustee, not less than
30 (or such shorter period acceptable to the Trustee) but not more than 60 days
prior to a given Distribution Date, that it intends to tender such Certificates
and Call Rights to the Trustee on such Distribution Date; provided that such
tender will not be made if either (i) it would cause the Trust or Depositor to
fail to satisfy the applicable requirements for exemption under Rule 3a-7 under
the Investment Company Act of 1940 or (ii) such distribution would affect the
characterization of the Trust as a "grantor trust" under the Code. Upon such
tender, the Trustee will deliver to Merrill Lynch & Co. or any of its
Affiliates, as applicable, Underlying Securities having a principal amount equal
to the principal amount of the Trust Certificates being tendered.
<PAGE>
9
(b) The requirements set forth in paragraphs (a)(ii), (a)(v)
and (a)(vi) of Section 4.07 of the Standard Terms do not apply to an Optional
Exchange pursuant to this Section 7.
Section 8. Events of Default. Within 30 days of its receipt of
notice of the occurrence of an Event of Default, the Trustee will give notice to
the Certificateholders, transmitted by mail, of all such uncured or unwaived
Events of Default actually known to it. However, unless there is 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.
Section 9. Miscellaneous. (a) The provisions of Section 4.04,
Advances, of the Standard Terms shall not apply to the Certificates.
(b) The Certificateholders shall not be entitled to terminate
the Trust or cause the sale or other disposition of the Underlying Securities.
(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, proportionately to
the ratio of their respective entitlements to interest payments.
(d) The outstanding principal balance of the Certificates
shall not be reduced by the amount of any Realized Loss.
(e) 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 Deposited Assets 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.
(f) Notwithstanding anything in the Trust Agreement to the
contrary, the Trustee may be removed upon 60 days prior written notice delivered
by the Holders of Certificates representing the Required Percentage--Removal.
<PAGE>
10
(g) Merrill Lynch & Co. shall act as the Market Agent and
shall serve in such capacity in accordance with the terms of the Market Agent
Agreement attached hereto as Exhibit C.
Section 10. 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:
Merrill Lynch Depositor, Inc.
c/o Merrill Lynch & Co.
World Financial Center
New York, NY 10281
Attention: Frank D. Ronan
Telephone: (212) 449-6177
Facsimile: (212) 449-9054
If to the Trustee, to:
United States Trust Company of New York
114 West 47th Street
25th Floor
New York, New York 10036
Attention: Corporate Trust Department
-- Public STEERS(R), Series 1998 MCIC-P1
Telephone: (212) 852-1667
Facsimile: (212) 852-1625
If to the Securities Intermediary, to:
United States Trust Company of New York
114 West 47th Street
25th Floor
New York, New York 10036
Attention: Corporate Trust Department
-- Public STEERS(R), Series 1998 MCIC-P1
Telephone: (212) 852-1667
Facsimile: (212) 852-1625
If to the Rating Agencies, to:
<PAGE>
11
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
Section 11. Governing Law. This Supplement and the
transactions described herein shall be construed in accordance with and governed
by the law of the State of New York.
Section 12. Counterparts. This Supplement may be executed in
any number of counterparts, each of which shall be deemed to be an original, and
all such counterparts shall constitute but one and the same instrument.
Section 13. Termination of the Trust. The Trust shall
terminate upon the earliest to occur of (i) the sale of the Underlying
Securities held by the Trust after a payment default on such Underlying
Securities and the distribution in full of all amounts due to the
Certificateholders, (ii) the completion of an Optional Exchange pursuant to
Section 7 hereof and (iii) the Final Scheduled Distribution Date. To the extent
that the provisions of this Section 13 conflict with Section 10.01 of the
Standard Terms, the latter shall control.
Section 14. Sale of Underlying Securities; Call Right; Put
Right.
(a) In the case of Extraordinary Trust Expenses approved by
100% of the Certificateholders of a given Class, pursuant to Section 6(b)
hereof, the Trustee may sell all or a portion of the Underlying Securities to
pay such Extraordinary Trust Expenses.
(b) The Call Terms are as follows:
(i) The initial holder of the Call Rights is an affiliate of
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
and such affiliate may transfer the Call Rights, in whole or in part,
to one or more third parties in privately negotiated transactions;
<PAGE>
12
(ii) A Call Holder that has met the exercise requirements set
forth in paragraph (b)(iii) of this Section 14 may, on the Call Date,
purchase, in whole and not in part, a principal amount of Underlying
Securities proportionate to such Call Holder's Call Right at the Call
Price;
(iii) In order to exercise its Call Right, a Call Holder must,
on the Exercise Date,
(1) notify the Trustee in writing of its intention to
exercise such Call Right (which notice is irrevocable),
(2) deposit the Call Price with the Escrow Agent (the
"Escrow Deposit") to be held in escrow pursuant to an Escrow
Agreement reasonably satisfactory to the Trustee and
substantially in the form attached hereto as Exhibit D (to be
entered into immediately preceding delivery of the Call Price
by such Call Holder to the Escrow Agent) until such Call Price
is paid by the Trustee to the Certificateholders in accordance
with paragraph (d) of this Section 14; provided, however, such
Call Holder shall not be required to deposit the Call Price
with the Escrow Agent, if, on the Exercise Date, (a) the
rating of the senior, unsecured long-term debt of such Call
Holder, or such Call Holder's credit support provider, if
applicable, by Moody's or S&P is no less than the higher of a
"BBB-" rating by S&P and the rating assigned to the Trust
Certificates by Moody's or S&P on the Exercise Date and (b)
such Call Holder has provided to the Trustee a certificate
(the "Insolvency Certificate") of such Call Holder, certifying
that such Call Holder (i) is not insolvent, (ii) would not be
rendered insolvent as a result of the exercise of its Call
Right and (iii) has not been a debtor in a case under the
Bankruptcy Code or in any similar bankruptcy or insolvency
proceeding at any time during the 366 day period immediately
preceding the Exercise Date,
(3) provide to the Trustee one or more opinions of
counsel to such Call Holder reasonably satisfactory to the
Trustee to the effect that (a) the Call Price paid by such
Call Holder to the Trustee would not be voidable as a
preference under Section 547 of the Bankruptcy Code if such
Call Holder becomes the subject of a Chapter 7 or Chapter 11
case under the Bankruptcy Code (the "Preference Opinion"), (b)
the Escrow Deposit would not constitute part of the bankruptcy
estate if such Call Holder becomes the subject of a Chapter 7
or Chapter 11 case under the Bankruptcy Code (the "Escrow
Deposit Opinion") and (c) the Escrow Agreement may not be
terminated by such Call Holder other than pursuant to its
terms (the "Escrow Agreement Opinion"), and the Trustee may
consult with counsel for the purpose of determining whether
such opinions are reasonably satisfactory; provided, however,
such opinions of counsel shall not be
<PAGE>
13
required if such Call Holder is not required to deposit the
Exercise Price in escrow pursuant to paragraph (b)(iii)(2) of
this Section 14, and
(4) provide the Trustee with certain other documents
customary for a transaction of this nature, as advised by the
Depositor.
(c) If less than all of the Call Rights are exercised, the
Trustee will exercise the Put Right with respect to the Underlying Securities
subject to such unexercised Call Rights. To exercise the Put Right, the Trustee
shall deliver a notice of the exercise of such Put Right to the Underlying
Securities Issuer at the corporate trust office of the Underlying Securities
Trustee on May 15, 2003.
(d) In connection with both the Call Rights and the Put Right,
the Trustee shall redeem all of the outstanding Certificates on the Final
Scheduled Distribution Date and distribute the proceeds of the Call Price and
the Put Price pro rata amongst the Certificateholders in accordance with Section
4.02 of the Standard Terms.
Section 15. Amendments. Notwithstanding anything in the Trust
Agreement to the contrary, in addition to the other restrictions on modification
and amendment contained herein, the Trustee shall not enter into any amendment
or modification of the Trust Agreement that would adversely affect in any
material respect the interests of the Certificateholders or the Call Holders
without the consent of 100% of such Certificateholders or Call Holders, as the
case may be; provided, however, that no such amendment or modification will be
permitted if the Trustee has been advised by the Depositor that such amendment
or modification would alter the status of the Trust as a "grantor trust" for
federal income tax purposes. Further, no amendment shall be permitted that would
adversely affect in any material respect the interests of the Certificateholders
without confirmation by each Rating Agency that such amendment will not result
in a downgrading or withdrawal of its rating of the Certificates. The Trustee
may consult with counsel and shall be entitled to rely upon an Opinion of
Counsel for purposes of determining compliance with the provisions of this
Section 15.
Section 16. Voting of Underlying Securities, Modification of
Indenture. The Trustee, as holder of the Underlying Securities, has the right to
vote and give consents and waivers in respect of the Underlying Securities as
permitted by the Depository and except as otherwise limited by the Trust
Agreement. In the event that the Trustee receives a request from the Depository,
the Underlying Securities trustee or the Underlying Securities Issuer for its
consent to any amendment, modification or waiver of the Underlying Securities,
the Underlying Securities Indenture or any other document thereunder or relating
thereto, or receives any other solicitation for any action with respect to the
Underlying Securities, the Trustee shall mail a notice of such proposed
amendment, modification, waiver or solicitation to each Certificateholder of
record as of such date. The Trustee shall request instructions from the
Certificateholders as to whether or not to consent to or vote to accept such
amendment,
<PAGE>
14
modification, waiver or solicitation. The Trustee shall consent or vote, or
refrain from consenting or voting, in the same proportion (based on the relative
outstanding principal balances of the Certificates) as the Certificates of the
Trust were actually voted or not voted by the Certificateholders thereof as of a
date determined by the Trustee prior to the date on which such consent or vote
is required; provided, however, that, notwithstanding anything in the Trust
Agreement to the contrary, the Trustee shall at no time vote on or consent to
any matter (i) unless such vote or consent would not (based on an Opinion of
Counsel) alter the status of the Trust as a "grantor trust" for federal income
tax purposes or result in the imposition of tax upon the Certificateholders,
(ii) that would alter the timing or amount of any payment on the Underlying
Securities, including, without limitation, any demand to accelerate the
Underlying Securities, except in the event of a default under the Underlying
Securities or an event that with the passage of time would become an event of
default under the Underlying Securities and with the consent of 100% of the
Certificateholders, or (iii) that would result in the exchange or substitution
of any of the outstanding Underlying Securities pursuant to a plan for the
refunding or refinancing of such Underlying Securities except in the event of a
default under the Underlying Securities Indenture and only with the consent of
100% of the Certificateholders and 100% of the Call Holders. The Trustee shall
have no liability for any failure to act resulting from Certificateholders' or
Call Holders' late return of, or failure to return, directions requested by the
Trustee from the Certificateholders and Call Holders.
If an offer is made by the Underlying Securities Issuer to
issue new obligations in exchange and substitution for any of the Underlying
Securities, pursuant to a plan for the refunding or refinancing of the
outstanding Underlying Securities or any other offer is made for the Underlying
Securities, the Trustee shall notify the Certificateholders, the Call Holders
and the Rating Agencies of such offer promptly. The Trustee must reject any such
offer unless the Trustee is directed by the affirmative vote of 100% of the
Certificateholders and 100% of the Call Holders to accept such offer and the
Trustee has received the tax opinion described above.
If an event of default under the Underlying Securities
Indenture occurs and is continuing, and if directed by 100% of the
Certificateholders, the Trustee shall vote the Underlying Securities in favor of
directing, or take such other action as may be appropriate to direct, the
Underlying Securities trustee to declare the unpaid principal amount of the
Underlying Securities and any accrued and unpaid interest thereon to be due and
payable.
Section 17. Call Right Documentation. Simultaneous with the
execution hereof, the Depositor hereby directs the Trustee, in the name of and
on behalf of the Trust, to enter into the ISDA Master Agreement (and the related
Schedule and Confirmation thereto) evidencing the Call Rights and to make
representations contained therein on behalf of the Trust. At the direction of
the Depositor, the Trustee shall execute such further documents as may be
required to evidence any transfer of any or all of the rights, interests or
obligations under the ISDA Master Agreement.
<PAGE>
15
Section 18. Third Party Beneficiary. The Escrow Agent and each
Call Holder shall be third party beneficiaries of this Trust Agreement.
<PAGE>
16
IN WITNESS WHEREOF, the parties hereto have caused this
Supplement to be duly executed by their respective authorized officers as of the
date first written above.
Merrill Lynch Depositor, Inc.,
as Depositor
By: /s/ Frank D. Ronan
-----------------------------------
Name: Frank D. Ronan
Title: President
United States Trust Company of New York,
as Trustee
By: /s/ Andres E. Serrano
-----------------------------------
Name: Andres E. Serrano
Title: Vice President
United States Trust Company of New York,
as Securities Intermediary
By: /s/ Andres E. Serrano
-----------------------------------
Name: Andres E. Serrano
Title: Vice President
<PAGE>
I-1
SCHEDULE I
PUBLIC STEERS(R) TRUST CERTIFICATES, SERIES 1998 MCIC-P1
UNDERLYING SECURITIES SCHEDULE
Underlying Securities: $50,000,000 aggregate principal
amount of 7 1/8% Debentures due June
15, 2027 of the Underlying
Securities Issuer.
Underlying Securities Issuer: MCI Communications Corporation, a
Delaware corporation.
Underlying Securities Trustee: Citibank, N.A.
Underlying Securities
Commission Filing Number: 33-57155.
Underlying Securities Indenture: The indenture
dated as of February 17, 1995, as
amended and supplemented through the
date hereof, between the Underlying
Securities Issuer and Citibank,
N.A., as trustee.
Underlying Securities Ranking: The Underlying Securities are
unsecured and unsubordinated
indebtedness of the Underlying
Securities Issuer.
Underlying Securities Collateral: None.
Underlying Securities
Original Issue Date: June 24, 1996.
Underlying Securities
Principal Amount
Originally Issued: $500,000,000.
Underlying Securities
Maturity Date: June 15, 2027.
Underlying Securities Amortization: None.
Underlying Securities Listing: None.
Underlying Securities
Interest Rate: 7 1/8% per annum.
<PAGE>
I-2
Underlying Securities
Interest Payment Dates: June 15 and December 15.
Underlying Securities
Interest Accrual Periods: Semiannual.
Underlying Securities
Authorized Denomination
and Specified Currency: $1,000 and integral multiples
thereof.
Underlying Securities Form: Book-entry security with DTC.
Underlying Securities
CUSIP Number: 552673AU9.
Underlying Securities
Record Dates: The close of business on June 1 or
December 1, as the case may be, next
preceding each interest payment
date.
Underlying Securities
Optional Redemption: The Underlying Securities are not
redeemable at the option of the
Underlying Securities Issuer prior
to maturity. The Underlying
Securities are redeemable at the
option of each of the holders
thereof on June 15, 2003 in
increments of $1,000 at a redemption
price equal to the principal amount
to be redeemed, and the Put Right
represents a right of the Trustee,
on behalf of the Trust and for the
benefit of the Certificateholders,
to exercise this right of
redemption.
To exercise the redemption option, a
holder of Underlying Securities must
give notice of exercise of such
option by completing and executing
the "Option to Elect Redemption" in
the form attached hereto as Annex
I-A for each Underlying Security to
be redeemed and delivering each such
Underlying Security to the Company
at the corporate trust office of the
Underlying Securities Trustee (or
such other address of which the
Underlying Securities Trustee shall
from time to time notify holders of
the Underlying Securities) no later
than May 15, 2003. Exercise of such
redemption option shall be
irrevocable.
<PAGE>
I-3
Underlying Securities
Rating as of Closing: "A2" by Moody's and "A" by S&P.
<PAGE>
ANNEX I-A
Form of Option to Elect Redemption
(begins on next page)
<PAGE>
OPTION TO ELECT REDEMPTION
The undersigned hereby irrevocably request(s) and instruct(s) the
Company to redeem this Debenture (or portion hereof specified below) on June 15,
2003 and otherwise pursuant to its terms at a price equal to the principal
amount hereof to
----------------------------------------------
(Please print or typewrite name and address of the undersigned)
For this Debenture to be redeemed, the Trustee must receive at 111 Wall
Street, New York, New York, Corporate Trust Office, 5th Floor, or at such other
place or places of which the Trustee shall from time to time notify the Holders
of the Debentures, no earlier than April 16, 2003 and no later than May 15, 2003
(or, if either such day is not a Business Day, the next succeeding Business
Day), this Debenture with this "Option to Elect Redemption" form duly completed.
If less than the entire principal amount of this Debenture is to be
redeemed, specify the portion hereof (which shall be an increment of $1,000)
which the Holder elects to have redeemed: $_____, and specify the denomination
or denominations (which shall be $1,000 or any integral multiple thereof) of the
Debentures to be issued to the Holder for the portion of this Debenture not
being redeemed (in the absence of any such specification, one such Debenture
will be issued for the portion not being redeemed): $_______.
Dated: ___________, 2003
-----------------------------------
NOTICE: The signature on this Option
to Elect Redemption must correspond
with the name as written upon the
face of this Debenture in every
particular, without alteration or
enlargement or any change whatever.
<PAGE>
EXHIBIT A
Standard Terms for Trust Agreements
(begins on next page)
<PAGE>
EXHIBIT A
STANDARD TERMS FOR TRUST AGREEMENTS
between
MERRILL LYNCH DEPOSITOR, INC.,
as Depositor,
and
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee and as Securities Intermediary
TRUST CERTIFICATES
Dated as of February 20, 1998
<PAGE>
Reconciliation and tie between the Standard Terms, dated as of
February 20, 1998, and the Trust Indenture Act of 1939, as amended. This
reconciliation and tie does not constitute part of the Standard Terms.
================================================================================
Trust Indenture Act Standard
of 1939 Section Terms 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
- --------------------------------------------------------------------------------
(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) 5.19
- --------------------------------------------------------------------------------
(a)(1)(B) 5.20
- --------------------------------------------------------------------------------
(b) 5.21
- --------------------------------------------------------------------------------
(c) 1.03(b)
- --------------------------------------------------------------------------------
317(a)(1) 5.18
- --------------------------------------------------------------------------------
(b) 5.13
- --------------------------------------------------------------------------------
318(a) 11.11
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
Page
----
ARTICLE I
DEFINITIONS AND ASSUMPTIONS
<S> <C> <C>
Section 1.01. Definitions................................................................. 1
Section 1.02. Rules of Construction....................................................... 19
Section 1.03. Compliance Certificates and Opinions; Record Date........................... 20
ARTICLE II
DECLARATION OF TRUSTS; ISSUANCE OF CERTIFICATES;
PURPOSE AND CLASSIFICATION OF TRUSTS
Section 2.01. Creation and Declaration of Trusts; Assignment of Deposited Assets.......... 21
Section 2.02. Acceptance by Trustee....................................................... 23
Section 2.03. Representations and Warranties of the Depositor............................. 23
Section 2.04. Breach of Representation, Warranty or Covenant.............................. 24
Section 2.05. Agreement to Execute, Authenticate and Deliver Certificates................. 25
Section 2.06. Custody and Holding of Deposited Assets..................................... 25
ARTICLE III
ADMINISTRATION OF EACH TRUST
Section 3.01. Administration of Each Trust................................................ 26
Section 3.02. Collection of Certain Underlying Security Payments.......................... 27
Section 3.03. Certificate Accounts........................................................ 27
Section 3.04. Distribution or Sale of the Underlying Securities........................... 28
Section 3.05. Investment of Funds in the Accounts......................................... 29
Section 3.06. Maintenance of Credit Support............................................... 30
Section 3.07. Realization upon Defaulted Underlying Securities............................ 30
Section 3.08. Retained Interest........................................................... 31
Section 3.09. Access to Certain Documentation............................................. 31
Section 3.10. Reports by the Depositor.................................................... 31
Section 3.11. Charges and Expenses........................................................ 32
ARTICLE IV
DISTRIBUTIONS AND REPORTS TO CERTIFICATEHOLDERS
Section 4.01. Distributions............................................................... 32
Section 4.02. Distributions on Certificates............................................... 33
Section 4.03. Reports to Certificateholders............................................... 34
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
Section 4.04. Advances.................................................................... 35
Section 4.05. Allocation of Realized Losses and Trust Expenses............................ 36
Section 4.06. Compliance with Withholding Requirements.................................... 36
Section 4.07. Optional Exchange........................................................... 37
Section 4.08. Call Right.................................................................. 39
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates............................................................ 41
Section 5.02. Execution, Authentication and Delivery...................................... 42
Section 5.03. Temporary Certificates...................................................... 42
Section 5.04. Registration; Registration of Transfer and Exchange......................... 43
Section 5.05. Mutilated, Destroyed, Lost and Stolen Certificates.......................... 44
Section 5.06. Persons Deemed Owners....................................................... 45
Section 5.07. Cancellation................................................................ 45
Section 5.08. Global Securities........................................................... 46
Section 5.09. Notices to Depository....................................................... 47
Section 5.10. Definitive Certificates..................................................... 47
Section 5.11. Currency of Distributions................................................... 49
Section 5.12. Conditions of Execution, Authentication and Delivery of New Series.......... 49
Section 5.13. Appointment of Paying Agent................................................. 51
Section 5.14. Authenticating Agent........................................................ 52
Section 5.15. Voting Rights with Respect to Underlying Securities......................... 53
Section 5.16. Actions by Certificateholders............................................... 54
Section 5.17. Events of Default........................................................... 54
Section 5.18. Judicial Proceedings Instituted by Trustee; Trustee May Bring Suit.......... 55
Section 5.19. Control by Certificateholders............................................... 55
Section 5.20. Waiver of Past Defaults..................................................... 55
Section 5.21. Right of Certificateholders to Receive Payments Not to Be Impaired.......... 56
Section 5.22. Remedies Cumulative......................................................... 56
ARTICLE VI
THE DEPOSITOR
Section 6.01. Liability of the Depositor.................................................. 56
Section 6.02. Limitation on Liability of the Depositor.................................... 56
Section 6.03. Depositor May Purchase Certificates......................................... 57
Section 6.04. Merger or Consolidation of the Depositor.................................... 58
Section 6.05. No Liability of the Depositor with Respect to the Underlying
Securities; Certificateholders to Proceed Directly Against the
Underlying Securities Issuer(s)...................................... 58
</TABLE>
<PAGE>
<TABLE>
ARTICLE VII
THE TRUSTEE
<S> <C> <C>
Section 7.01. Duties of Trustee........................................................... 58
Section 7.02. Agreements Between Trustee and Administrative Agents........................ 62
Section 7.03. Certain Matters Affecting the Trustee....................................... 64
Section 7.04. Trustee Not Liable for Recitals in Certificates or Underlying Securities.... 65
Section 7.05. Trustee May Own Certificates................................................ 65
Section 7.06. Trustee's Fees and Expenses................................................. 65
Section 7.07. Eligibility Requirements for Trustee........................................ 66
Section 7.08. Resignation or Removal of the Trustee; Appointment of Successor
Trustee.............................................................. 67
Section 7.09. Appointment of Office or Agency............................................. 68
Section 7.10. Representations and Warranties of Trustee................................... 68
Section 7.11. Indemnification of Trustee by the Depositor; Contribution................... 70
Section 7.12. No Liability of the Trustee with Respect to the Underlying Securities;
Certificateholders to Proceed Directly Against the Underlying
Securities Issuer(s)................................................. 71
Section 7.13. The Depositor to Furnish Trustee with Names and Addresses of
Certificateholders................................................... 71
Section 7.14. Preservation of Information................................................. 72
Section 7.15. Reports by Trustee.......................................................... 72
Section 7.16. Trustee's Application for Instructions from the Depositor................... 72
ARTICLE VIII
MARKET AGENT
Section 8.01. Market Agent................................................................ 72
ARTICLE IX
SECURITIES INTERMEDIARY
Section 9.01. Resignation or Removal of the Securities Intermediary; Appointment of
Successor Securities Intermediary.................................... 73
ARTICLE X
TERMINATION
Section 10.01. Termination upon Liquidation of All Underlying Securities................. 75
</TABLE>
<PAGE>
<TABLE>
ARTICLE XI
MISCELLANEOUS PROVISIONS
<S> <C> <C>
Section 11.01. Amendment.................................................................. 76
Section 11.02. Limitation on Rights of Certificateholders................................. 77
Section 11.03. Governing Law.............................................................. 79
Section 11.04. Notices.................................................................... 79
Section 11.05. Notice to Rating Agencies.................................................. 80
Section 11.06. Severability of Provisions................................................. 81
Section 11.07. Nonpetition Covenant....................................................... 81
Section 11.08. No Recourse................................................................ 81
Section 11.09. Article and Section References............................................. 81
Section 11.10. Counterparts............................................................... 82
Section 11.11. Trust Indenture Act........................................................ 82
</TABLE>
<PAGE>
STANDARD TERMS FOR TRUST AGREEMENTS dated as of February 20,
1998 between MERRILL LYNCH DEPOSITOR, INC., a Delaware corporation, as Depositor
(the "Depositor"), and UNITED STATES TRUST COMPANY OF NEW YORK, a New York
corporation, as Trustee (in such capacity, the "Trustee") and as securities
intermediary (in such capacity, the "Securities Intermediary").
PRELIMINARY STATEMENT
The Depositor, the Trustee and the Securities Intermediary
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) will be issued under a separate Supplement to these Standard Terms,
duly executed and delivered by the Depositor, the Trustee and the Securities
Intermediary. With respect to each Series, these Standard Terms and all
amendments hereof and, unless the context otherwise requires, the related
Supplement and all amendments thereto shall be known as the "Trust Agreement".
All representations, covenants and agreements made herein by
each of the Depositor, the Trustee and the Securities Intermediary are for the
benefit and security of the Holders and, to the extent provided in the
applicable Supplement, for the benefit and security of any Credit Support
Provider or any other party as specified therein.
The Depositor and the Securities Intermediary are 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 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 Supplement.
<PAGE>
2
"Administration Account": As defined in Section 7.02.
"Administrative Agent": Any Person with which the Trustee has
entered into an Administration Agreement and that meets the qualifications of an
Administrative Agent, pursuant to Section 7.02.
"Administration Agreement": The written contract, if any,
between the Trustee and an Administrative Agent and any successor Trustee or
Administrative Agent providing that the Trustee can delegate certain of its
administrative obligations with respect to any Series hereunder.
"Administrative Agent Termination Event": With respect to any
given Series, any of the following: (i) any failure by an Administrative Agent
to remit to the Trustee any funds in respect of collections on the Underlying
Securities and Credit Support, if any, as required under this Trust Agreement,
that continues unremedied for five days after the giving of written notice of
such failure to the Administrative Agent by the Trustee or the Depositor, or to
the Administrative Agent, the Depositor and the Trustee by the Holders of not
less than 25% of the Voting Rights; (ii) any failure by an Administrative Agent
duly to observe or perform in any material respect any of its other covenants or
obligations under the Administration Agreement with respect to such Series that
continues unremedied for thirty days after the giving of written notice of such
failure to the Administrative Agent by the Trustee or the Depositor, or to the
Administrative Agent, the Depositor and the Trustee by the Holders of not less
than 25% of the Voting Rights; and (iii) events of insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings and certain
actions by or on behalf of an Administrative Agent indicating its insolvency or
inability to pay its obligations. Any additional Administrative Agent
Termination Event with respect to any given Series may be set forth in the
applicable Supplement.
"Advance": As defined in Section 4.04.
"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.
"Allocation Ratio": With respect to any Series, as defined in
the related Supplement.
"Authenticating Agent": As defined in Section 5.14.
<PAGE>
3
"Authorized Denomination": The minimum denomination in which a
Certificate may be issued, or any multiple thereof, as specified in the related
Supplement.
"Available Funds": Unless otherwise specified in the
applicable 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
earned on Account funds invested pursuant to Section 3.05) 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 Supplement less any amount held for the benefit of the Retained
Interest.
"Beneficial Owner": With respect to Certificates held through
a Depository, the beneficial owner of a Certificate. For purposes only of
Section 5.16, 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 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.
"Book-Entry Securities": Securities maintained in the form of
entries (including, without limitation, the Security Entitlements in such
Securities) in the commercial book-entry system of the Fed and held for the
Trustee, directly or indirectly, by any Trustee's Fed Member. Book-Entry
Securities shall not include, in any event, any Certificated Security (or any
Security Entitlement in any Certificated Security) held, directly or indirectly,
through a Clearing Corporation.
"Business Day": With respect to any Series, as defined in the
related Supplement.
"Calculation Agent": If applicable with respect to any Series,
as specified in the applicable Supplement.
"Call Date": The date on which the Call Right may be
exercised, as specified in the applicable Supplement.
<PAGE>
4
"Call Price": If applicable with respect to any Series, as
specified in the applicable Supplement.
"Callable Series": A Series or Class within such Series
subject to a Call Right, as specified in the applicable Supplement.
"Call Right": The right of the holder thereof (or any
successor), as named in the applicable Supplement, to purchase Certificates from
the Holders thereof or to purchase Underlying Securities from the Trust.
"Call Terms": The terms pursuant to which a Call Right may be
exercised, as set forth in the applicable Supplement.
"Certificate" and "Certificates": Any trust certificate or
trust certificates authorized by, executed pursuant to and authenticated and
delivered under, this Trust Agreement, and unless the context requires
otherwise, "Certificate" and "Certificates" shall also be deemed to refer to the
Retained Interest.
"Certificate Account": As defined in Section 3.03.
"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 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 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 Supplement, each as allocated to such Class
pursuant to the applicable Supplement.
"Certificate Register" and "Certificate Registrar": As defined
in Section 5.04.
"Certificated Security": As defined in Section 8-102(a)(4) of
the UCC.
"Certificateholder": Any holder of a Certificate or a Retained
Interest.
"Class": With respect to any Series, any one of the classes of
Certificates of such Series, each class consisting of Certificates having
identical terms.
<PAGE>
5
"Clearing Agency": An organization that (i) is registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act and (ii) is a
Clearing Corporation.
"Clearing Agency Participant": At any time, in respect of any
Clearing Agency, a securities intermediary that maintains Securities Accounts
with such Clearing Agency at such time.
"Clearing Corporation": The meaning specified in Section
8-102(a)(5) of the UCC.
"Closing Date": With respect to any Series, the day on which
Certificates of such Series are first executed, authenticated and delivered, as
specified in the related Supplement.
"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
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 Supplement or
such other address 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": As specified in the related Supplement, a
Letter of Credit, Limited Guaranty, Surety Bond, Swap Agreement, Swap Guarantee,
or other asset intended to support or ensure the timely or ultimate
distributions of amounts due in respect of a Series (or Class within such
Series).
<PAGE>
6
"Credit Support Instrument": The instrument or document
pursuant to which the Credit Support for a given Series (or Class within such
Series) is provided, as specified in the applicable Supplement.
"Credit Support Provider": With respect to any Series (or
Class within such Series), the Person, if any, that will provide any Credit
Support with respect to all or a portion of a Series or Class, as specified in
the applicable Supplement.
"Cut-off Date": With respect to any Series, the date specified
as such in the related 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
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 5.10.
"Deposited Assets": With respect to any Series, the following
assets, properties and items (together with the accounts and book-entry accounts
containing or reflecting, directly or indirectly, such assets, properties and
items), in each case, wherever located, however held and whether now existing or
hereafter acquired:
(i) all Underlying Securities and Related Assets;
(ii) all payments receivable or received in respect of the
Underlying Securities 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 the Underlying Securities and
all other monies payable thereunder;
(iii) all Financial Assets, Security Entitlements and
Investment Property in, constituting, evidenced by, resulting from or
otherwise related to, any of the Deposited Assets;
(iv) all other rights and remedies (but none of the
obligations) comprising, arising or resulting from or related to the
Grant of the Deposited Assets including, without limitation, the right
to give and receive notices and other communications, to make waivers
or other agreements, to exercise all rights and options of the
Depositor, to bring Proceedings in the name of the Depositor or
otherwise, and generally to exercise all of the rights and remedies of
the Depositor and to do and receive anything
<PAGE>
7
that the Depositor is or may be entitled to do or receive thereunder or
with respect thereto; and
(v) any other assets identified as Deposited Assets in the
related Supplement, which assets may include cash, cash equivalents,
guarantees, letters of credit, financial insurance, interest rate,
currency, equity, commodity and credit-linked swaps, caps, floors,
collars and options, forward contracts, structured securities and other
instruments and transactions that credit enhance, hedge or otherwise
support the Underlying Securities designed to assure the servicing or
timely distribution of payments to Holders.
"Depositor": Merrill Lynch Depositor, Inc., a Delaware
corporation, 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 TIA, "Depositor" shall include any obligor
on the Certificates as the term obligor is defined in the TIA.
"Depositor Order": A written order or request, respectively,
signed in the name of the Depositor by any one of its Executive Officers.
"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 so designated in the applicable Supplement,
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.
"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.
"Distribution Date": With respect to any Series (or Class
within such Series), each date specified as a "Distribution Date" for such
Series (or Class) in the related Supplement.
"Distribution Election": With respect to any Series, as
specified in the related 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.
<PAGE>
8
"Depository Securities": Securities consisting of Security
Entitlements to Certificated Securities, held by the Depository or a Clearing
Corporation or a nominee of either subject to the control of the Depository and
in bearer form or indorsed in blank by an appropriate Person or registered on
the books of the issuer thereof in the name of the Depository or its Clearing
Corporation or a nominee of either.
"DCR": Duff & Phelps Credit Rating Co. and any successor
thereto.
"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 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 Investments": With respect to any Series, unless
otherwise specified in the related 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" from S&P 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;
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 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 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
<PAGE>
9
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 Supplement for Eligible Investments;
provided, however, that such rating shall be no lower than the lower of
the rating on the Underlying Securities or the Trust Certificates at
the time of purchase of the investments;
(iii) 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 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 lower of the rating on the Underlying
Securities or the Trust Certificates; 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; and
(iv) commercial paper having at the time of such investment
the rating specified in the Supplement for Eligible Investments.
"Entitlement Holder": As defined in Section 8-102(a)(7) of the
UCC.
"Event of Default": With respect to any Series (or Class
within such Series), as specified in the related Supplement.
"Exchange Act": The Securities Exchange Act of 1934, as
amended.
"Exchange Rate Agent": As specified in the Supplement.
"Executive Officer": With respect to any limited liability
company or corporation, the chief executive officer, the chief operating
officer, the chief financial officer, the president, any vice president, the
secretary or the treasurer of such limited liability company or corporation;
with respect to any partnership, any general partner thereof.
"Extraordinary Trust Expenses": 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.
<PAGE>
10
"Fed": The Federal Reserve Bank of New York.
"Fed Member Securities Account": In respect of any Person, an
account in the name of such Person at the Fed, to which account Book-Entry
Securities held for such Person are or may be credited.
"Federal Book-Entry Regulations": (a) the Federal regulations
contained in Subpart B ("Treasury/Reserve Automated Debt Entry System (TRADES)"
governing Book-Entry Securities consisting of U.S. Treasury bonds, notes and
bills) and Subpart D ("Additional Provisions") of 31 C.F.R. Part 357, 31 C.F.R.
ss. 357.10 through ss. 357.14 and ss. 357.41 through ss. 357.44 (including
related defined terms in 31 C.F.R. ss. 357.2) and (b) to the extent
substantially identical to the federal regulations referred to in clause (a)
above (as in effect from time to time), the federal regulations governing other
Book-Entry Securities.
"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 Supplement.
"Financial Asset": As defined in Section 8-102(a)(9) of the
UCC.
"Fitch": Fitch Investors Service, L.P., and any successor
thereof.
"Fixed Pass-Through Rate": With respect to any Fixed Rate
Certificate, as defined in the related Supplement.
"Fixed Rate Certificate": A Certificate that provides for a
payment of interest at a Fixed Pass-Through Rate.
"Floating Pass-Through Rate": With respect to any Floating
Rate Certificate, as defined in the related Supplement.
"Floating Rate Certificate": A Certificate that provides for
the payment of interest at a Floating Pass-Through Rate determined periodically
by reference to a formula specified in the related Supplement.
"Global Security": A registered Certificate evidencing all or
part of a Series (or Class within such Series), issued to the Depository for
such Series or Class in accordance with Section 5.08 and bearing the legend
prescribed therein.
<PAGE>
11
"Grant": To grant, bargain, sell, warrant, alienate, remise,
demise, release, convey, assign, transfer, deposit, set over and confirm to the
Trustee pursuant to these Standard Terms and the applicable Supplement; and the
terms "Granted" and "Granting" have the meanings correlative to the foregoing.
"Holder": The Person in whose name a Certificate or Retained
Interest is registered in the Certificate Register on the applicable Record
Date. Where the context requires, "Holder" may refer to the person entitled to
exercise the Voting Rights accompanying a Certificate.
"Independent": When used with respect to any Person means that
such 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 or any
Affiliate as an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions.
"Investment Property": As defined in Section 9-115 of the UCC.
"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 Supplement.
"Limited Guarantor": With respect to any Series (or Class
within such Series), a Person specified in the related Supplement as providing a
guarantee or insurance policy or other credit enhancement supporting the
distributions in respect of such Series (or Class within such Series) as and to
the extent specified in such 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 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 Supplement.
"Liquidation Price": If applicable with respect to any Series,
the price at which the Market Agent sells the Underlying Securities on behalf of
the Trustee, as specified in the applicable Supplement.
"Liquidation Proceeds": The amounts received by the Trustee in
connection with (i) the liquidation of a defaulted Underlying Security,
collateral, if any, related thereto,
<PAGE>
12
or Related Asset or (ii) the repurchase, substitution or sale of an Underlying
Security or Related Asset.
"Market Agent": The market agent or market agents, if any,
appointed pursuant to Section 8.01, and its or their successors or assigns.
"Market Agent Agreement": With respect to any Series, the
agreement, if any, dated as of the Closing Date, between the Trustee and the
Market Agent, the form of which will be attached to the related Supplement, and
any similar agreement with a successor Market Agent, in each case as from time
to time amended or supplemented.
"Merrill Lynch & Co.": Merrill Lynch & Co., a Delaware
corporation.
"Minimum Wire Denomination": $10,000,000 or the equivalent in
any Specified Currency.
"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 Supplement
on which distributions of interest may be determined at the applicable
Pass-Through Rate, as the same may be adjusted as specified in such Supplement.
"Officer's Certificate": A certificate signed by any (or, if
specified in these Standard Terms or any 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": shall mean the exchange of Certificates
of any Series (or Class within such Series) for a pro rata portion of the
Deposited Assets of the related Trust.
"Optional Exchange Date": With respect to any Series (or Class
within such Series), as defined, if applicable, in the related Supplement.
"Optional Redemption": The right of an Underlying Securities
Issuer to redeem such Underlying Securities in accordance with the terms of the
Underlying Securities Indenture.
<PAGE>
13
"Ordinary Expenses": The Trustee's customary fee for its
services as Trustee, as set forth in the related Supplement, 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 Supplement except:
(i) Certificates theretofore cancelled by the Certificate
Registrar; and
(ii) Certificates, including Predecessor 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 any request, demand,
authorization, direction, notice, consent or waiver hereunder has been given by
the required percentage of the aggregate Voting Rights, Voting Rights
accompanying Certificates beneficially owned by the Depositor, the Trustee, or
any Affiliate thereof shall be disregarded and deemed not to be Outstanding, and
such Voting Rights 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 are 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.
"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.
<PAGE>
14
"Pass-Through Rate": With respect to any Series (or Class
within such Series) (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 Supplement.
"Paying Agent": As defined in Section 5.13.
"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": As defined in Section 5.05.
"Prepaid Ordinary Expenses": 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 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 Supplement, that initially rates the Certificates of
such Series (or Class within such Series).
"Rating Agency Condition": With respect to any action or
occurrence, unless otherwise specified in the applicable Supplement, that each
Rating Agency shall have been given 10 days (or such shorter period acceptable
to each Rating Agency) prior written notice thereof and that each Rating Agency
shall have notified the Depositor and the Trustee in writing that such action or
occurrence will not result in a reduction or withdrawal of the then current
rating of any Certificate of the applicable Series.
"Realized Loss": With respect to any defaulted and liquidated
Underlying Security, the excess, if any, of (x) the price paid by the Depositor
for such Underlying Security plus expenses incurred by the Trustee in connection
with the practices and procedures referred to in Section 3.07(b) of these
Standard Terms, to the extent reimbursable under these Standard Terms and the
related Supplement, over (y) Liquidation Proceeds with respect thereto.
"Record Date": With respect to any Distribution Date for any
Series (or Class within such Series), the date specified in the related
Supplement.
<PAGE>
15
"Related Assets": Any assets held by a Trust the return of
which is linked to one or more Underlying Securities and which, if applicable,
shall be described in the related Supplement or a schedule thereto.
"Required Percentage--Amendment": Unless otherwise specified
in the related Supplement, if a Rating Agency Condition is specified in such
Supplement and such Rating Agency Condition is met, or, if a Rating Agency
Condition is not so specified in such Supplement, 66-2/3% of the aggregate
Voting Rights of such Series, and 100% otherwise.
"Required Percentage--Direction of Trustee": Unless otherwise
specified in the related Supplement, 66-2/3% of the aggregate Voting Rights of
such Series.
"Required Percentage--Remedies": Unless otherwise specified in
the related Supplement, 66-2/3% of the aggregate Voting Rights of such Series.
"Required Percentage--Removal of Securities Intermediary":
Unless otherwise specified in the related Supplement, more than 50% of the
aggregate Voting Rights of such Series.
"Required Percentage--Removal of Trustee": Unless otherwise
specified in the related Supplement, more than 50% of the aggregate Voting
Rights of a Series.
"Required Percentage--Waiver": Unless otherwise specified in
the related Supplement, 66-2/3% of the aggregate Voting Rights of a Series.
"Required Principal": As determined for any Distribution Date
for a given Series (or Class within such Series), unless otherwise specified in
the related 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 Supplement.
"Requisite Reserve Amount": As of any date with respect to any
Series (or Class within such Series), 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 Supplement.
"Reserve Account": An Eligible Account, if any, created and
maintained pursuant to Section 3.06.
<PAGE>
16
"Responsible Officer": With respect to the Trustee, any
officer within the Corporate Trust Office, including any Managing Director,
Senior Vice President, Vice President, Assistant Vice President, Assistant
Secretary or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's 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 Supplement,
held by the Person so specified in such Supplement.
"Sale Procedures": Unless otherwise specified in the
Supplement, shall mean that, with respect to any sale of one or more Underlying
Securities or Related Assets, the Market Agent, on behalf of the Trust, shall
sell such Underlying Securities or Related Assets to the highest bidders among
not less than two solicited bidders for such Underlying Securities or Related
Assets (one of which bidders may include Merrill Lynch & Co. or any Affiliate
thereof; provided, however, that neither Merrill Lynch & Co. 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 or
Related Asset, a portion of the Underlying Securities or Related Assets, or all
of the Underlying Securities or Related Assets 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.
"Securities Account": As defined in Section 8-501(a) of the
UCC.
"Securities Control": "Control" as defined in Section 8-106 of
the UCC and, for purposes of determining an interest in investment property
under UCC Article 9, Section 9-115(1)(e) of the UCC.
"securities intermediary": As defined in Section 8-102(a)(14)
of the UCC and, in respect of any Book-Entry Security, a "securities
intermediary" (as defined in 31 C.F.R. ss. 357.2 or, as applicable to such
Book-Entry Security, the corresponding Federal Book-Entry Regulations).
"Securities Intermediary": With respect to any Series, the
Securities Intermediary shall be the Person so specified in the applicable
Supplement until a successor Person shall have become the Securities
Intermediary pursuant to the applicable provisions of these Standard Terms and
the applicable Supplement, and thereafter "Securities Intermediary" shall mean
such successor Person.
<PAGE>
17
"Security": As defined in Section 8-102(a)(15) of the UCC.
"Security Certificate": As defined in Section 8-102(a)(9) of
the UCC.
"Security Entitlement": As defined in Section 8-102(a)(17) of
the UCC or, in respect of any Book-Entry Security, as defined in 31 C.F.R.
Section 357.2 (or, as applicable to such Book-Entry Security, the corresponding
Federal Book-Entry Regulations).
"Series": A separate series of Certificates issued pursuant to
these Standard Terms and a related Supplement, which series may be divided into
two or more Classes, as provided in such Supplement.
"Specified Currency": As specified in the related Supplement
for the applicable Series or Class, which may be a currency issued by the
government of any country or a composite currency the value of which is
determined by reference to the values of the currencies of any group of
countries. If not specified in the related Supplement, the Specified Currency
shall be Dollars.
"State": Any one of the 50 states of the United States, or the
District of Columbia.
"Supplement": An agreement incorporating these Standard Terms
that authorizes the issuance of a particular Series (and each Class within such
Series) of Certificates.
"Surety Bond": If so specified in the Supplement with respect
to any Series (or Class within such Series), the surety bond providing for the
distribution under certain circumstances specified in such 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 Supplement.
"Swap Agreement": If so specified in the 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 from time to time as provided therein.
"Swap Counterparty": If so specified in the Supplement with
respect to any Series (or Class within such Series), as specified in such
Supplement.
<PAGE>
18
"Swap Distribution Amount": If so specified in the 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 Supplement with
respect to any Series, the guarantee issued by the Swap Guarantor in favor of
the Trust substantially in the form attached as an exhibit to the Swap
Agreement.
"Swap Guarantor": If so specified in the Supplement with
respect to any Series, the guarantor specified as such in such Supplement.
"Swap Receipt Amount": If so specified in the 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 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 the Swap Agreement.
"Tax Event": The right of an Underlying Securities Issuer to
shorten the maturity of or repurchase such Underlying Securities, in accordance
with the terms of the Underlying Securities Indenture, due to a change in the
treatment of such Underlying Securities under the Code.
"Trust": With respect to any Series, the segregated asset or
pool of assets subject hereto, constituting the trust created hereby and by the
related Supplement and to be administered hereunder and thereunder, consisting
of those Deposited Assets, 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 Supplement, all for the benefit of the
Certificateholders of such Series as of any particular time.
"Trust Agreement": With respect to each Series, these Standard
Terms and all amendments hereof and, unless the context otherwise requires, the
related Supplement and all amendments thereto.
"Trustee": With respect to any Series, the Person so specified
in the applicable Supplement until a successor Person shall have become the
Trustee pursuant to the applicable provisions of these Standard Terms and the
applicable Supplement, and thereafter "Trustee" shall mean such successor
Person.
<PAGE>
19
"Trustee's Fed Member": Any Person that is eligible to
maintain a Fed Member Securities Account in such Person's name with the Fed and
through which the Trustee holds Book-Entry Securities.
"TIA": The Trust Indenture Act of 1939, as amended, as the
same is in force and effect as of the date hereof.
"UCC": The Uniform Commercial Code as in effect from time to
time in the State of New York and any successor statute.
"Underlying Securities Indenture": The indenture pursuant to
which the Underlying Securities were issued, as identified in the Underlying
Securities Schedule.
"Underlying Securities Issuer": With respect to an Underlying
Security, the issuer thereof (including, if applicable, the guarantor of the
Underlying Security), as identified in the Underlying Securities Schedule.
"Underlying Securities Schedule": Schedule I to the
Supplement.
"Underlying Security" or "Underlying Securities": With respect
to any Series, the asset or assets identified in the Underlying Securities
Schedule. The Underlying Securities for any 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 the Underlying Securities
Schedule 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.
"United States": The United States of America (including the
States), its territories, its possessions and other areas subject to its
jurisdiction.
"Voting Rights": The voting rights with respect to the
Underlying Securities, which voting rights shall be allocated to
Certificateholders of each Class within a given Series (and to the holders of
the Retained Interest and Call Right, if any) in accordance with the Allocation
Ratio.
Section 1.02. Rules of Construction. Unless the context
otherwise requires:
(i) a term has the meaning assigned to it;
<PAGE>
20
(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;
(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:
(i) a statement that the individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(ii) 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;
(iii) 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
<PAGE>
21
(iv) 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
entitled to give any consent, request, demand, authorization, direction, notice,
waiver or other act. Notwithstanding TIA Section 316(c), 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 at the close of
business on such record date shall be deemed to be Holders for the purposes of
determining whether the requisite aggregate Voting Rights have authorized or
agreed or consented to such consent, request, demand, authorization, direction,
notice, waiver or other act, and for that purpose the aggregate Voting Rights
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 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 Deposited Assets. (a) The Depositor, concurrently with the execution and
delivery of the related Supplement, does hereby agree to Grant to the Trustee
for the benefit of the Trustee and the Certificateholders of each given Series
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 and other Deposited Assets. Unless otherwise
specified in the Supplement, each such Grant will include all interest, premium
(if any) and principal of, on or with respect to any such Underlying Securities
due after the Cut-off Date and received by the Depositor, and will exclude all
interest, premium (if any) and principal of, on or with respect to any such
Underlying Securities due on or before the Cut-off Date. With respect to any
Concentrated Underlying Security, the Underlying Securities Schedule shall
include information regarding the payment terms of the Concentrated Underlying
Security, the maturity or terms thereof, the rating, if any, thereof and any
other material information with respect thereto.
<PAGE>
22
(b) In connection with each Grant referred to in paragraph (a)
of this Section 2.01, 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 that
are to be acquired from a Person other than the Depositor, as specified
on the Underlying Securities Schedule to the applicable 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 ensured that the Underlying Securities have been
delivered to a Clearing Agency, in which event (A) the Securities
Intermediary or its agent, on behalf of the Trustee, has accepted
delivery of such Underlying Securities through such Clearing Agency,
and (B) the Underlying Securities have been credited to a Securities
Account of the Trustee and maintained by the Securities Intermediary on
behalf of the Trustee, and the Securities Intermediary or its agent
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) In the case of each delivery of Underlying Securities
referred to in paragraph (b) of this Section 2.01, the Depositor shall be deemed
thereby to represent and warrant to the Trustee and the Securities Intermediary
that:
(i) the Depositor is duly authorized to so deliver the
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 this 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.
The above representations and warranties shall survive the
delivery of the 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 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.
(d) Unless otherwise specified in the related Supplement, the
Grant of the Deposited Assets accomplished by this Trust Agreement is absolute
and shall constitute a
<PAGE>
23
sale. In addition, 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.
(e) 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 Deposited Assets 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.
(f) Anything herein to the contrary notwithstanding, none of
the Trustee, the Securities Intermediary or any of the Certificateholders
assumes any of the obligations of the Depositor or any other Person in respect
of the Underlying Securities.
(g) The Securities Intermediary expressly agrees with the
Trustee and the Certificateholders that, at all times from and after the date
hereof, any and all of the Deposited Assets held by the Securities Intermediary
in the Certificate Account are to be treated as Financial Assets under, and for
all purposes of, UCC Article 8 and UCC Article 9.
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 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, 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 Supplement:
(i) the Depositor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware;
<PAGE>
24
(ii) with respect to each Supplement, to the Depositor's
knowledge but without having made any independent inquiry, the
information set forth in the Underlying Securities 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 certificate of
incorporation or by-laws 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 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 and the Underlying Securities 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.
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
<PAGE>
25
materially and adversely affects the interests of the Certificateholders of a
given Series, the Depositor shall cure such breach in all material respects.
Section 2.05. Agreement to Execute, Authenticate and Deliver
Certificates. With respect to each Series 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 an Authorized Denomination evidencing ownership of the entire Trust
for such Series, all in accordance with the terms and subject to the conditions
of Section 5.02.
Section 2.06. Custody and Holding of Deposited Assets. (a)
With respect to each Series, the Trustee shall hold and maintain the Deposited
Assets with the Securities Intermediary in and through, and hereby directs the
Securities Intermediary to credit any and all such Deposited Assets to, the
Certificate Account (all as further provided in this Article II) in such manner
as shall enable the Trustee to be and have the rights of an Entitlement Holder
with respect to, and have sole dominion and control (including, without
limitation, Securities Control) over, such Deposited Assets.
(b) The Securities Intermediary hereby represents, warrants,
covenants and agrees that from and after the Closing Date:
(i) Each Certificate Account is a Securities Account, with the
Trustee (for its benefit and the benefit of the Certificateholders) as
the Entitlement Holder in, and having sole dominion and control
(including, without limitation, Securities Control) over, any and all
Deposited Assets (including, without limitation, any and all assets and
properties referred to in clause (ii) below) in such Certificate
Account.
(ii) All assets and properties from time to time transferred
or credited to the Certificate Account constitute Financial Assets.
(iii) The Securities Intermediary is (and will remain) a
securities intermediary and is acting (and will continue to act) as
such with respect to the Certificate Account, the Deposited Assets
therein and the Trustee as Entitlement Holder. Unless otherwise
instructed by the Trustee in writing, the Securities Intermediary will
treat the Trustee (for its benefit and the benefit of the
Certificateholders) as entitled to exercise the rights that comprise
the Deposited Assets in each Certificate Account. Further, the
Securities Intermediary is and will remain (A) a bank, banking
institution, financial firm or similar party, in each case, that
regularly accepts in its course of its business Book-Entry Securities
as a custodial
<PAGE>
26
service for customers and maintains Securities Accounts in the name of
such customers reflecting ownership of or interest in such Securities,
(B) will maintain its books and records reflecting such Book-Entry
Securities in the State of New York and (C) if the Trustee maintains
one or more Certificate Accounts with the Securities Intermediary, will
have entered into, and will maintain in full force and effect, an
agreement with the Trustee (which, on the date hereof, is comprised of
this Trust Agreement) to the effect that their respective rights and
obligations in respect of each other, said Underlying Securities and
said Certificate Accounts are governed by the laws of the State of New
York.
(iv) The Securities Intermediary shall hold any and all assets
and properties from time to time comprising the Deposited Assets
(whether individually or as part of a fungible bulk) in a manner such
that the Trustee will have dominion and control (including, without
limitation, Securities Control) over such Deposited Assets. The
Securities Intermediary will credit to the appropriate Certificate
Account (and will thereby or by book entry or otherwise identify as
being subject to the Grant to the Trustee hereunder) any and all assets
and properties from time to time comprising the Deposited Assets in
accordance with Section 2.06(a) hereof.
(v) To effect the intention of clauses (i) through (iv) above,
the Securities Intermediary or its agent maintains (and will continue
to maintain)
(A) one or more Securities Accounts with the
Depository. The Securities Intermediary or its agent will
instruct the Depository to credit such Securities Accounts of
the Securities Intermediary or its agent with the Depository
with the Depository Securities comprising from time to time
the Deposited Assets; and
(B) one or more Fed Member Securities Accounts to
which the Securities Intermediary through its agent will
instruct the Fed to credit, in accordance with the Book-Entry
Regulations, all Book-Entry Securities from time to time
comprising the Deposited Assets.
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
<PAGE>
27
applicable 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
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 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 Supplement.
(b) The duties of the Trustee shall be performed in accordance
with applicable local, State and Federal law, and the Trustee shall, at the
direction of the Depositor, make any and all filings, reports, notices or
applications with (as prepared by the Depositor), and seek any comments and
authorizations from, the Commission and any State securities authority on behalf
of the Trust for each Series.
Section 3.02. Collection of Certain Underlying Security
Payments. With respect to any Series or Class, 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, if applicable.
Section 3.03. Certificate Accounts. (a) For each Series, the
Trustee shall establish and maintain one or more Eligible Accounts
(collectively, the "Certificate Accounts"), which shall be Securities Accounts
and shall be held in trust in the name of the Trustee for its benefit and the
benefit of 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 and in accordance with Section 2.06, the
Certificate Accounts shall be under the sole dominion and control (including,
without limitation, Securities Control) of the Trustee for the benefit of the
related Certificateholders. With respect to each Series, 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 Accounts all amounts received by it with respect to the Deposited
Assets, 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;
<PAGE>
28
(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 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 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. Distribution or Sale of the Underlying
Securities. If (a) there occurs a payment default on the Underlying Securities,
(b) there occurs an acceleration of the date of maturity of the Underlying
Securities, or (c) the Underlying Securities Issuer of any Concentrated
Underlying Securities ceases to be a reporting company under the Exchange Act,
then the Trustee, upon receiving notice of the events set forth in (a), (b) or
(c) shall exercise one of the following remedies, in accordance with the
Distribution Election:
(i) immediately direct the Market Agent to sell the Underlying
Securities and a pro rata portion of the Related Assets held by such
Trust, in accordance with the Sale Procedures, and the Liquidation
Proceeds, if any, shall be deposited into the Certificate Account for
distribution in accordance with the Allocation Ratio on the first
Business Day following such deposit into the Certificate Account;
<PAGE>
29
(ii) distribute the Underlying Securities and a pro rata
portion of the Related Assets in accordance with the Allocation Ratio
to each Holder's last address as it appears in the Certificate Register
within three Business Days of receiving the notice referred to in the
first sentence of this Section 3.04; or
(iii) provide that the Holders of a given Series or Class may
vote in favor of either (i) or (ii), in accordance with the procedures
set forth in the applicable Supplement.
In the case of a sale by the Market Agent of Underlying Securities and Related
Assets pursuant to clause (i) of this Section 3.04, the Trustee shall deliver
such Underlying Securities and Related Assets to the purchaser of such
Underlying Securities and Related Assets only against payment in same day funds
and the Trustee shall deposit the same into the Certificate Account.
Section 3.05. Investment of Funds in the Accounts. The Trustee
may direct any depository institution maintaining the Certificate Account or the
Reserve Account, if any, for the Series and any other segregated Eligible
Account, which Eligible Account shall be a Securities Account the contents of
which are held for the benefit of Certificateholders of such applicable 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 (iv) 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 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 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 Securities Intermediary, on behalf of the
Trustee and the Trust, shall:
(i) 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
<PAGE>
30
(ii) 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.
None of the Trustee, the Depositor or the Securities Intermediary 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 Supplement, the Depositor shall, to the
extent specified in the applicable Supplement, establish and maintain, or enter
into, as applicable, in the name of the Trustee, either as 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 Supplement. To the extent
specified in the applicable 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 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 included 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 Supplement to the extent that funds are not otherwise
available for such purpose. If specified in such 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 Supplement.
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 Supplement, if
the Trustee is unable to obtain full recovery in respect of a defaulted
Underlying Security and any related
<PAGE>
31
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 and (ii) 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 Supplement, the Trust for the applicable Series
shall recognize a Realized Loss equal to the amount of such difference. Any such
Realized Loss shall be allocated in accordance with Section 4.05.
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 Supplement as and to the extent specified therein.
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:
(i) 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;
<PAGE>
32
(ii) 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 TIA Section 314(e);
(iii) supply to the Trustee (and the Trustee shall transmit to
all Certificateholders, in the manner and to the extent provided in TIA
Section 313(c)), such summaries of any information, documents and
reports required to be filed by the Depositor pursuant to clauses (i)
and (ii) of this Section 3.10 as may be required by rules and
regulations prescribed by the Commission; and
(iv) 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 clause (iv), 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
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
Supplement.
Section 3.11. Charges and Expenses. Except as otherwise
provided in these Standard Terms or the related 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 and 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, the Trustee shall apply Available Funds in the Certificate
Account for such Series in the manner and priority set forth in the Supplement
for such Series. In any event, however, any amounts collected during any period
shall be distributed to the Holders no later than the Distribution Date
immediately following the receipt thereof.
<PAGE>
33
(b) All distributions to Holders shall be payable 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.
The distribution of interest and principal on Certificates
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 Holder is not a Depository, at the Corporate Trust
Office (except as otherwise specified pursuant to the applicable
Supplement) 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 the applicable
Supplement and in accordance with arrangements satisfactory to the
Trustee, at the option of the registered Holder by wire transfer to an
account designated by the registered Holder. Notwithstanding clause (i)
of this paragraph (a), with respect to a Holder 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 Holder 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 Supplement applicable to that particular Series or Class.
<PAGE>
34
(d) With respect to any computations or calculations to be
made under these Standard Terms, the applicable Supplement and the Certificates,
except as otherwise provided, 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.
(e) The final distribution of principal and/or premium shall
be made upon presentation and surrender of such Certificates at the Corporate
Trust Office.
Section 4.03. Reports to Certificateholders. On the fifth
Business Day following each such Distribution Date the Trustee shall forward or
cause to be forwarded to the Depositor, each Holder of such Series, to each
Rating Agency rating such Series and such other Persons as may be specified in
such 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, the Swap Receipt Amount, if any, and any other
derivatives transaction that may be entered into by the Trust pursuant
to the terms of these Standard Terms and the related Supplement;
(ii) the Swap Distribution Amount, if any, received by the
Trustee as of such Distribution Date and any other amounts payable
pursuant to any other derivatives transaction that may be entered into
by the Trust pursuant to the terms of these Standard Terms and the
related Supplement;
(iii) the amount of compensation received by the Trustee, and
any Administrative Agent, for the period relating to such Distribution
Date, and such other customary and sufficient information as is
reasonably necessary to enable Holders to calculate their federal
income tax liability with respect to the Certificates; provided,
however, the Trustee shall be permitted to seek the advice of counsel
and such other experts as it may deem necessary in its reasonable
judgment in order to determine that information which is reasonably
necessary to provide to the Holders;
(iv) the amount of the distribution on such Distribution Date
to Holders allocable to principal of and premium, if any, and interest
on the Certificates of each such Class and to the Retained Interest,
and the amount of aggregate unpaid interest accrued as of such
Distribution Date;
(v) in the case of each Class of Floating Rate Certificates of
such Series, the respective Floating Pass-Through Rate applicable to
each such Class on such Distribution Date, as calculated in accordance
with the method specified in such Certificates and the related
Supplement;
<PAGE>
35
(vi) if the 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 interest rate or rates thereon at the close of
business on such Distribution Date, and the current rating assigned to
the Certificates, as provided to the Trustee in writing in an
instrument specifically referring to this Trust Agreement by the
applicable rating agency;
(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 as may be specified by the Depositor;
(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; and
(x) any other information appropriate for a Series, as
specified in the applicable Supplement.
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 Holder a statement containing the information set forth in clause
(iii) above, aggregated for such calendar year during which such person was a
Holder. 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 Holders in writing at such Holder's expense
who so request all materials received by the Trustee from the Underlying
Securities Issuer.
Section 4.04. Advances. (a) Unless otherwise specified in the
applicable 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 Supplement
for a given Series, and subject to the terms of paragraphs (c) and (d) 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
<PAGE>
36
"Advance") in an amount equal, unless otherwise specified in the related
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 and 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 Supplement, as to which any such 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 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 related Supplement for a given Series, any
Advances made in respect of any Underlying Securities related to such Series (or
Class within such Series) that subsequently are 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, Realized Losses and Extraordinary Trust
Expenses, if any, shall be allocated on any Distribution Date in accordance with
the Allocation Ratio, provided, however, that distributions pursuant to Section
3.04 shall be completed as the earliest practicable date.
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 Holders of interest or original issue discount that the Trustee
believes are applicable under the Code. The consent of Holders shall not be
required for such withholding.
(b) Each Holder 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
<PAGE>
37
be any withholding tax assessed for Federal income tax purposes in respect of
distributions to such Holder, 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 Holder 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).
(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 Holder
and may be withheld by the Trustee. The consent of the Holder 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 Holder 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 Holder thereof.
Section 4.07. Optional Exchange. (a) The terms and conditions,
if any, of an Optional Exchange will be specified in the related Supplement;
provided, however, that any right of Optional 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 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" under the Code. The terms of an Optional Exchange may include,
but are not limited to, the following:
(i) a requirement that the exchanging Holder tender to the
Trustee Certificates of each Class within such Series;
<PAGE>
38
(ii) a minimum Certificate Principal Balance or Notional
Amount, as applicable, with respect to Certificates being tendered for
exchange by a single Holder;
(iii) a requirement that the Certificate Principal Balance or
Notional Amount, as applicable, of each Certificate tendered for
exchange be an Authorized Denomination;
(iv) specified dates on which a Holder may effect such an
Optional Exchange (each, an "Optional Exchange Date"), as specified in
the applicable Supplement;
(v) limitations on the right of an exchanging Holder to
receive any benefit upon Optional Exchange from any Credit Support; and
(vi) adjustments to the value of the proceeds of any Optional
Exchange based upon required prepayment of future expense allocations
and the establishment of a reserve for any unanticipated Extraordinary
Trust Expenses.
(b) Unless otherwise provided in the applicable Supplement, no
Certificate may be exchanged pursuant to this Section 4.07 unless the Trustee
has received at least 30 days (or such shorter period acceptable to the Trustee
or specified in the applicable Supplement) but not more than 45 days prior to an
Optional Exchange Date 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, the Certificate Principal Balance or Notional
Amount of such Registered Certificate to be exchanged and the number or a
description of the tenor and the terms of such Certificate, a statement that the
Optional Exchange is being exercised thereby and an assurance that the
Registered Certificate to be exchanged with the form entitled "Option to Elect
Exchange" on the reverse of the Registered Certificate duly completed will be
received by such Trustee not later than five Business Days after the date of
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 by the Holder thereof for Optional Exchange shall be irrevocable.
Unless otherwise provided in the applicable Supplement, the Optional Exchange
option may be exercised pursuant to this Section 4.07 by the Holder of a
Certificate for less than the aggregate Certificate Principal Balance or
Notional Amount of such Certificate as long as the Certificate Principal Balance
or Notional Amount remaining Outstanding after such Optional Exchange is an
Authorized Denomination and all other requirements set forth in the related
Supplement are satisfied. Upon such partial exchange, such Certificate shall be
cancelled and a new Certificate or Certificates for
<PAGE>
39
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.
Section 4.08. Call Right. (a) The holder of a Call Right may
purchase Certificates of a given Series or Class from the Holders thereof prior
to maturity if the applicable Supplement designates such Series or Class as a
Callable Series, or upon the occurrence of a Tax Event or an Optional
Redemption. The Call Terms shall be set forth in the applicable Supplement and
shall include, without limitation, the following:
(i) the initial holder of the Call Right;
(ii) whether the Certificate Principal Balance or Notional
Amount of each Certificate being purchased pursuant to the Call Right
must be an Authorized Denomination;
(iii) the Call Date or Dates; and
(iv) the Call Price.
(b) A Call Right may be exercised at the option of the holder
thereof, in accordance with the Call Terms, upon not less than 35 days' (or such
shorter period acceptable to the Trustee or specified in the applicable
Supplement) nor more than 60 days' prior notice sent via facsimile with
transmission confirmed to the Trustee at the Corporate Trust Office. Such notice
to the Trustee shall include the Certificate Principal Balance (or Notional
Amount) of the Certificates to be purchased and shall reference the Call Price
and the Call Date. On or prior to the second Business Day following receipt of
such notice from the holder of the Call Right, the Trustee shall notify the
Holders of the Certificates by first class mail; such notices shall state:
(i) the Certificate Principal Balance (or Notional
Amount) of Certificates to be purchased;
(ii) the Call Price;
(iii) the name and address of the Paying Agent;
(iv) that Certificates called for purchase must be surrendered
to the Paying Agent in order to collect the Call Price;
<PAGE>
40
(v) that interest on Certificates called for purchase pursuant
to the Call Right ceases to accrue on and after the Call Date, and the
only remaining right of Holders of such Certificates is to receive
payment of the Call Price upon surrender of the Certificates to the
Paying Agent; and
(vi) that, if any Certificate contains a CUSIP, CINS or ISIN
number, no representation is being made as to the correctness of the
CUSIP, CINS or ISIN number either as printed on the Certificates or as
contained in such notice and that reliance may be placed only on the
other identification numbers printed on the Certificates.
(c) If less than all of the Certificates are to be purchased
pursuant to the exercise of the Call Right, the Trustee shall select the
Certificates to be purchased in accordance with the requirements of the
principal national securities exchange on which the Certificates are listed or,
if the Certificates are not listed on a national securities exchange, on a pro
rata basis, by lot or by such other method as such Trustee in its sole
discretion shall deem to be fair and appropriate. The Trustee shall notify the
Depositor and the Certificate Registrar promptly in writing of the Certificates
or portions of the Certificates to be purchased by the holder of the Call Right,
provided, however, that this Section 4.08(c) shall not apply to Certificates
subject to a Call Right due to a Tax Event or an Optional Redemption.
(d) Once such notice is mailed to the Holders, the
Certificates called for purchase become due and payable on the Call Date and at
the Call Price. Upon surrender of any Certificates to the Paying Agent, the
Holders of such Certificates shall be paid the Call Price. Notice of purchase
shall be deemed to be given when mailed, whether or not the Holder receives the
notice. In any event, failure to give such notice, or any defect therein, shall
not affect the validity of the proceedings for the purchase of Certificates held
by Holders to whom such notice was properly given.
(e) At or prior to 12:00 noon on the Call Date, the holder of
the Call Right to be exercised shall deposit with the Paying Agent by wire
transfer in same-day funds money sufficient to pay the Call Price of the
Certificates to be redeemed on that date.
(f) If a notice has been given in the manner provided above,
the Certificates or portion of Certificates specified in such notice to be
purchased shall become due and payable on the Call Date at the Call Price stated
therein, together with accrued interest (if applicable) on and after such dates.
Upon surrender of any Certificate in connection with the Call Right, such
Certificate shall be paid and redeemed by the holder of the Call Right at the
Call Price.
<PAGE>
41
(g) Upon surrender of any Certificate that is purchased in
part, the Depositor shall execute and the Trustee shall authenticate and deliver
to the Holder a new Certificate equal in principal amount to the unredeemed
portion of such surrendered Certificate.
(h) Notwithstanding anything to the contrary in these Standard
Terms or any Supplement, a Series or Class will be subject to a Call Right of
the Underlying Securities Issuer if the Underlying Securities Issuer gives
notice of a Tax Event or an Optional Redemption, regardless of whether such
Series or Class is also designated a Callable Series in the applicable
Supplement, and in the case of a Tax Event or an Optional Redemption the
required notice of the Call Right shall be the lesser of the time set forth in
Section 4.08(b) and the time set forth in the notice provisions relating to such
Tax Event or Optional Redemption, respectively, in the Underlying Securities
Indenture, as specified in the related Supplement.
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 attached
to the applicable Supplement.
(b) Each Series (and all Classes within such Series) shall be
created by a Supplement authorized by the Depositor and establishing the terms
and provisions of such Series. Each Trust must be a fixed investment trust under
the Code. Each such Series may 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 Supplement. Except as otherwise provided in the related
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.
<PAGE>
42
Section 5.02. Execution, Authentication and Delivery. (a) The
Certificates shall be executed by the Trustee by one of its Responsible
Officers, which may be in facsimile form and imprinted or otherwise reproduced
thereon. The signature of any of the Responsible Officers may be manual or
facsimile. Certificates bearing the manual or facsimile signature of individuals
who were at any time the Responsible 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.
(b) Each Certificate shall be dated as of the later of the
date specified in the related 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 Responsible Officers, and such signature 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 or permanent Global Securities of any Series (or
Class within each such Series), and upon receipt of a Depositor Order, the
Trustee shall execute, 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 or permanent Global Securities 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 Certificates or permanent Global Securities 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 or Global
Securities 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 or permanent Global Securities of such Series or Class
upon surrender of the temporary Certificates of such Series or Class at the
Corporate Trust Office, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Certificates of any Series or Class
within such Series, the Trustee, upon receipt of a Depositor Order, shall
execute, authenticate and deliver in exchange therefor Definitive
<PAGE>
43
Certificates or permanent Global Securities with a like Certificate Principal
Balance or Notional Amount, as applicable, of the same Series (or Class within
such Series) of Authorized Denomination 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 or permanent Global Securities of such Series or Class,
except as otherwise specified in the applicable Supplement.
Upon any exchange of a portion of a temporary Global Security
for a permanent definitive Global Security or for the individual Definitive
Certificates represented thereby, 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 (the
registers maintained in such office and in any other office or agency of the
Trustee being herein sometimes collectively referred to as 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(a) of the UCC are met to
the Depositor's satisfaction, the Depositor shall execute, and the Trustee, upon
receipt of a Depositor Order, shall 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.
<PAGE>
44
(c) Notwithstanding any other provisions of this Section 5.04,
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
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 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) 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.
(f) 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 Securities Transfer Agents Medallion Program
(STAMP), Stock Exchange Medallion Program (SEMP) or New York Stock Exchange Inc.
Medallion Signature Program (MSP).
(g) 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
its Corporate Trust 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
<PAGE>
45
neither the Depositor nor the Trustee receives notice that such Certificate has
been acquired by a bona fide purchaser, then the Depositor shall execute and the
Trustee, 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.
Any Certificate executed, authenticated and delivered under this Section 5.05 in
lieu of a lost, destroyed or stolen Certificate (a "Predecessor Certificate")
shall be deemed to evidence the same interest as the Predecessor Certificate.
Upon the issuance of any new Certificate under this Section
5.05, 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 5.05 shall constitute complete and indefeasible evidence of
ownership in the Trust related to such Series, whether or not the Predecessor
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 5.05 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of Predecessor Certificates.
Section 5.06. Persons Deemed Owners. (a) The Depositor, the
Trustee, the Securities Intermediary and any agent of the Depositor, the Trustee
or the Securities Intermediary 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 Certificate be overdue, and neither the
Depositor, the Trustee or the Securities Intermediary, nor any agent of the
Depositor, the Trustee or the Securities Intermediary shall be affected by
notice to the contrary.
(b) None of the Depositor, the Trustee, the Securities
Intermediary or any of their agents will have any responsibility or liability
for any aspect of the records relating to or distributions made by the
Depository to Beneficial Owners of interests in a Global Security or for
maintaining, supervising or reviewing any records relating to such Beneficial
Owners.
Section 5.07. Cancellation. Unless otherwise specified
pursuant to Section 5.01 for Certificates of any Series, all Certificates
surrendered for payment, redemption,
<PAGE>
46
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 5.07, except as expressly
permitted by this Trust Agreement.
Section 5.08. Global Securities. (a) If the Supplement
provides that a Series (or Class within such Series) of Certificates shall be
held by the Depository in book-entry form, then the Depositor shall execute and,
upon receipt of a Depositor Order, the Trustee shall 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 THIS GLOBAL SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF A NOMINEE OF THE DEPOSITORY (AND
ANY PAYMENT IS MADE TO A NOMINEE OF THE DEPOSITORY), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF HAS AN INTEREST HEREIN.
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 TO THE DEPOSITORY OR TO ANOTHER NOMINEE OF THE
DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR
A NOMINEE OF SUCH SUCCESSOR DEPOSITORY."
(b) 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 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 this Trust
Agreement (including the distribution of
<PAGE>
47
principal of, and premium, if any, and interest on the Certificates and
the giving of instructions or directions hereunder) as the sole Holder
of the Certificates of such Series or Class, and shall have no
obligation to the Beneficial Owners of interests in such Series or
Class;
(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 Beneficial 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 Beneficial 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 Holders of a
specified percentage of the aggregate Voting Rights of a 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
Beneficial 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.
(c) Each Depository 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 Beneficial 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 Beneficial Owners.
Section 5.10. Definitive Certificates. (a) If in respect of a
Series (or Class within such Series) represented by one or more Global
Securities (i) the Depositor advises the Trustee and the Securities Intermediary
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 does not appoint a successor within 90 days or (ii)
the Depositor at its option advises the Trustee and the Securities Intermediary
in writing that it elects to terminate the book-entry system of such Series or
Class through the Depository, then the
<PAGE>
48
Depository shall notify all Beneficial 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, fully
registered Certificates ("Definitive Certificates") for such Series or Class to
Beneficial 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 upon receipt of a Depositor Order for the execution, authentication and
delivery of Definitive Certificates of such Series or Class, will execute,
authenticate and deliver Definitive 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. None of
the Depositor, the Certificate Registrar, the Trustee or the Securities
Intermediary 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 exchange of a Global Security for Definitive
Certificates, such Global Security shall be cancelled by the Trustee. Definitive
Certificates issued in exchange for a Global Security 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. 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.
(b) In addition, if the Depositor so specifies with respect to
the Certificates of a given Series, a Beneficial Owner may, on terms acceptable
to the Depositor and the Depository for such Global Security, receive individual
Definitive Certificates in exchange for such beneficial interest. Upon the
request of such Beneficial Owner, the Trustee upon receipt of a Depositor Order
shall execute, authenticate and deliver, without service charge,
(i) to each such Person specified, 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 an Authorized
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.
<PAGE>
49
In any exchange provided for above, the Trustee, upon receipt
of a Depositor Order, will execute, authenticate and deliver individual
Certificates in registered form in Authorized Denominations.
Section 5.11. Currency of Distributions. (a) Except as
otherwise specified pursuant to the applicable Supplement, distributions of the
principal of (and premium, if any) and interest in respect of Certificates of
any Series or Class will be made in Dollars.
(b) In the case of a Series denominated in a Specified
Currency other than the Dollar, all exchange rate calculations shall be based
upon the noon buying rate in New York City for cable transfers as certified for
customs purposes by the Fed for such Specified Currency. If the Fed does not
publish a noon buying rate for the applicable Specified Currency, the applicable
Supplement will designate the source for calculating the Dollar value of such
Specified Currency.
(c) With respect to any Series, any decision or determination
to be made regarding exchange rates shall be made by an Exchange Rate Agent,
provided, however, that such Exchange Rate Agent shall accept such appointment
in writing and the terms of such appointment shall be acceptable to the Trustee
and shall require such Exchange Rate Agent to make such determination by the
method provided in Section 5.11(b) for the making of such decisions or
determination. All decisions and determinations of such Exchange Rate Agent
regarding exchange rates shall be in its sole discretion and shall, in the
absence of manifest error, be conclusive for all purposes and irrevocably
binding upon the Depositor, the Trustee and all Holders of such Series.
(d) If distributions in respect of a Series must be made in a
Specified Currency other than Dollars and such currency is unavailable due to
the imposition of exchange controls or other circumstances beyond the control of
the Trustee and the Depositor or is no longer used by the government of the
country issuing such Specified Currency or is no longer commonly used for the
settlement of transactions by public institutions of or within the international
banking community, then all distributions in respect of such Series shall be
made in Dollars until such Specified Currency is available.
Section 5.12. Conditions of Execution, Authentication and
Delivery of New Series. (a) 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 Supplement. The Trustee shall execute, authenticate and
deliver such Certificates upon a Depositor Order and upon delivery by the
Depositor to the Trustee of the following:
(i) The delivery of the Underlying Securities in accordance
with Section 2.01(b);
(ii) An Opinion of Counsel to the Depositor, addressed to the
Trustee, stating:
<PAGE>
50
1. The Certificates are in the form contemplated by the Trust
Agreement and assuming that the Certificates have been duly executed,
authenticated and delivered by the Trustee in the manner described in
its certificate delivered today, the Certificates are entitled to the
benefits provided in the Trust Agreement and constitute valid and
binding obligations of the Trust, enforceable against the Trust in
accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally and
except as enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a proceeding
in equity or at law), and will be entitled to the benefits of the Trust
Agreement.
2. Execution, authentication and delivery of such Certificates
by the Trustee will not violate the terms of the Trust Agreement.
3. The execution and delivery of the Trust Agreement will not
contravene the certificate of incorporation or by-laws of the Company
or result in any violation of any of the terms or provisions of any law
or regulation or, to our knowledge of any indenture, mortgage or other
agreement by which the Company is bound.
4. The Trust Agreement has been duly authorized, executed and
delivered by the Company and (assuming the due authorization, execution
and delivery thereof by the Trustee and the Securities Intermediary)
constitutes a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws affecting
enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law).
(iii) An Officer's Certificate of the Depositor, dated as of the
Closing Date, to the effect that all of the requirements of this Section 5.12
have been satisfied, and that the Depositor is not in breach of this Trust
Agreement and that the execution and delivery of this Trust Agreement and 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 certificate of
incorporation and by-laws, 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>
51
(iv) A Supplement consistent with the applicable provisions of these
Standard Terms;
(v) All agreements, instruments or other documents called for by the
applicable Supplement as a condition to the issuance of the Certificates of such
Series;
(vi) If applicable, a fully executed copy of any Swap Agreement or
other Credit Support Instrument, together with all documents and opinions
required to be delivered to the Trust upon execution thereof pursuant to the
terms thereof; and
(vii) Written instructions by the Depositor to the Trustee directing
the Trustee to enter into and perform any obligations under any Swap Agreement
or other Credit Support Instrument, if applicable, and/or the Market Agent
Agreement, if applicable.
(b) 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 5.12 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 5.12 shall be true and correct as if made on such date.
Section 5.13. 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 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
<PAGE>
52
Paying Agent shall have failed to perform its obligations under this Trust
Agreement in any material respect; provided, however, no Paying Agent may be
removed or replaced until a successor (which successor may be the Trustee) has
been appointed as provided for herein and has accepted the appointment. 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, as specified in the related Supplement. 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
<PAGE>
53
the Trustee that it will hold all sums, if any, held by it for distribution to
the Certificateholders in trust for the benefit of the Certificateholders
entitled thereto until such sums shall be distributed to such Certificateholders
and will agree to such other matters as are required by TIA Section 317(b). 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 5.13 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 5.14. 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 5.14 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 which may be the Trustee. 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 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 Sections
7.01, 7.03 and 7.04 shall be applicable to any Authenticating Agent.
<PAGE>
54
(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 Supplement.
Dated: [NAME OF AUTHENTICATING AGENT]
as Authenticating Agent
for the Trustee,
By:
---------------------------------
Authorized Officer"
Section 5.15. 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 by owners of any of the Underlying Securities, the Trustee shall give
notice to the Holders, setting forth (i) such information as is contained in
such notice to owners of Underlying Securities, (ii) a statement that Holders
will be entitled, subject to any applicable provision of law and any applicable
provisions of such Underlying Securities 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
Holders of record on such Record Date.
Upon the written request of the applicable Holder, 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 Holder
entitled to give such instructions. Notwithstanding the foregoing, if the
Trustee determines (based solely upon advice furnished by nationally recognized
independent tax counsel, whether at the request of any Holder 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 Code, 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.
<PAGE>
55
(b) 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 Holder
agrees so long as it is an owner thereof 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 Holder or (ii) to any redemption or prepayment of the Underlying
Securities underlying the Certificates held by such Holder. 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 Holder in contravention of the provisions of
this Section.
Section 5.16. 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
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) Holders 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 Holders of
Certificates, the Depositor, the Trustee or the Securities Intermediary in order
to proceed against the Underlying Securities Issuer(s).
Section 5.17. 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 Supplement.
<PAGE>
56
Section 5.18. 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, and further subject
to the provisions of Sections 7.01(c) and 7.06(f) herein, entitled and empowered
to institute 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
Proceeding to judgment or final decree with respect to the whole amount of any
such sums so due and unpaid.
Section 5.19. 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:
(i) 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;
(ii) the Trustee shall determine, based upon an Opinion of
Counsel, that the action so directed would not be unjustly prejudicial
to the Holders of Certificates of such Class not taking part in such
direction; and
(iii) the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction.
Section 5.20. Waiver of Past Defaults. The Holders of the
Required Percentage--Waiver of Certificates of any Series may (a) waive any past
default under this Trust Agreement and its consequences or (b) 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 default
thereunder and its consequences with respect to such Series; provided that such
Holders may not waive or direct the Trustee to waive a default
(i) in the payment of the principal of or premium, if any, or
interest on the Underlying Securities; or
<PAGE>
57
(ii) in respect of a covenant or provision hereof that under
Section 11.01 hereof cannot be modified or amended without the consent
of the Holder of each Outstanding Certificate affected.
Upon any waiver of a default under this Trust Agreement or direction that is
effective to waive a default in respect of the Underlying Securities, such
default shall cease to exist with respect to this Trust Agreement, 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
Holders 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 5.21. 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 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 5.22. 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 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 Supplement or in the exercise of any of its rights or
powers 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
<PAGE>
58
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 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, and a 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 Market Agent or the other
parties 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.
<PAGE>
59
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 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 and has no duty in respect thereof.
ARTICLE VII
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 Supplement. The Trustee shall exercise in case of
receipt of notice of Default (as such term is defined in paragraph (d) below)
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 person
would exercise or use under the circumstances in the conduct of such person's
own affairs. In the event that the Underlying Securities Issuer ceases to file
periodic reports under the Exchange Act, the Depositor shall notify the Trustee
of that fact and the Trustee shall take such actions as specifically set forth
in the Supplement. 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 as directed by the
<PAGE>
60
Depositor. 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, in its best judgment, 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 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 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;
<PAGE>
61
(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;
(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 Certificate
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 Certificate 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 or any other person believed by it in good faith to
be competent to give such advice or information, including, without
limitation, the Market Agent or the other parties 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;
<PAGE>
62
(x) the Trustee shall be under no obligation whatsoever to
appear in, prosecute or defend any 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 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, 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 TIA Section 313(c), notice of such Default hereunder actually
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 determines 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 7.01(d), 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 (5) Business Days after the receipt by the
Trustee of a written application by any three or more Certificateholders stating
that such Certificateholders 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 Certificateholders propose to transmit, and by
reasonable proof that each such Certificateholder has owned its Certificates for
a period of at least six (6) months preceding the date of such application, the
Trustee shall, at its election, either:
(i) afford to such Certificateholders access to all
information so furnished to or received by the Trustee; or
(ii) inform such Certificateholders as to the approximate
number of
<PAGE>
63
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 Certificateholders access to
such information, the Trustee shall, upon the written request of such
Certificateholders, mail to all such Certificateholders 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.
(f) The Trustee shall prepare for filing, at the direction of
and with information provided by the Depositor, periodic reports for the Trust
pursuant to the Exchange Act, and the rules and regulations promulgated
thereunder on behalf of the Depositor. The Depositor shall respond reasonably
promptly to any inquiry of the Trustee concerning such reports and shall provide
the information required for such reports within three days of the filing due
date.
Section 7.02. Agreements Between Trustee and Administrative
Agents. (a) The Trustee may enter into Administration Agreements with one or
more Administrative Agents in order to delegate to such Administrative Agents
certain of its administrative obligations with respect to a Series hereunder;
provided, however, that:
(i) such delegation shall not release the Trustee from the
duties, obligations, responsibilities or liabilities arising hereunder;
(ii) the Rating Agency Condition shall have been satisfied
with respect to the entering into of any such agreement;
(iii) such agreement must be consistent with these Standard
Terms and, with respect to Certificates of any Series, the related
Supplement;
(iv) the Trustee will remain solely liable for all fees and
expenses it may owe to such Administrative Agent;
(v) the Administrative Agent shall give representations and
warranties in such Administration Agreement that are the same in
substance as those set forth in Section 7.10 herein (references therein
to the Trust Agreement, the Trustee and the Depositor shall be to the
applicable Administration Agreement, Administrative Agent and Trustee,
respectively, for purposes of this Section 7.02(a)); and
<PAGE>
64
(vi) such Administrative Agent shall meet the eligibility
requirements of a Trustee pursuant to Section 7.07 herein.
An Administration Agreement must provide that an entity serving as
Administrative Agent may resign from its obligations and duties under this Trust
Agreement with respect to any Series only if such resignation, and the
appointment of a successor, would satisfy the Rating Agency Condition or upon a
determination that the duties of the Administrative Agent with respect to such
Series are no longer permissible under applicable law. No such resignation shall
become effective until the Trustee or a successor Administrative Agent has
assumed the obligations of such Administrative Agent with respect to such
Series. In addition, with respect to any Series (or Class within such Series),
each Administration Agreement shall impose on the 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 Administration
Agreement may be provided in the applicable Supplement. The Trustee shall
deliver to the Depositor copies of all Administration Agreements into which it
enters, and any amendments or modifications thereof, promptly upon the Trustee's
execution and delivery of any such instruments.
(b) Upon the occurrence of an Administrative Agent Termination
Event, the Trustee shall be entitled to terminate the relevant Administration
Agreement and the rights and obligations of any such Administrative Agent under
any Administration Agreement in accordance with the terms and conditions of any
such Administration Agreement. If such Administration Agreement is terminated,
the Trustee shall simultaneously reassume direct responsibility for all
obligations delegated in such Administration Agreement without any act or deed
on the part of the applicable Administrative Agent, and the Trustee shall
administer directly the related Underlying Securities or shall enter into an
Administration Agreement with a successor Administrative Agent which so
qualifies under Section 7.02(a). If the Trustee is unwilling or unable to act,
it may appoint, or petition a court of competent jurisdiction for the
appointment of, an Administrative Agent which so qualifies under Section
7.02(a). Pending such appointment, the Trustee must act in such capacity (except
that if the Trustee is prohibited by law from doing so, then the Trustee will
not be so obligated).
(c) If an Administrative Agent is administering one or more
Underlying Securities pursuant to an Administration Agreement, the
Administrative Agent shall deposit into an Eligible Account established by such
Administrative Agent (an "Administration Account") any amounts collected with
respect thereto, and all such amounts shall be distributed to the Trustee for
deposit into the related Certificate Account not later than the Business Day
after receipt thereof.
<PAGE>
65
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 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;
(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
<PAGE>
66
custodian and shall not be liable for any misconduct or negligence of
any such agents or attorneys selected with due care by it; 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 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, any interest beneficially held by the
Trustee in its individual capacity shall be excluded.
Section 7.06. Trustee's Fees and Expenses. (a) The applicable
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
Supplement is greater than zero, the Trustee acknowledges that the Depositor has
paid to the Trustee an amount equal to the Prepaid Ordinary Expenses specified
therein, and the Trustee agrees that the payment of such amount shall constitute
full and final satisfaction of and payment for all such expenses.
<PAGE>
67
(c) If the Prepaid Ordinary Expenses set forth in the
Supplement is zero, the 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 at the rate or amount and on the terms provided for in the
Supplement. In such cases, 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
Supplement is zero, the 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 Supplement payable at the times set forth therein. In such
cases, 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 10.01 hereof.
(e) Subject to paragraph (f) of this Section 7.06, all
Extraordinary Trust 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
which 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 Trust 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 100% of the aggregate principal amount of
Certificates then outstanding and (iii) such Certificateholders have agreed that
such costs, expenses or liabilities shall be paid by the Trustee from the Trust.
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 TIA
Section 310(a), having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by Federal or State authority and have a
rating from
<PAGE>
68
S&P of BBB- or higher. 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 7.07 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 7.07, 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 under TIA Section 310(b) with respect to any Class of Certificates and
this Section 7.07, 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 (i) assist the Depositor in finding a successor Trustee acceptable to the
Depositor and (ii) 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 11.04 hereof, and such removal shall take effect upon
the appointment of the successor Trustee and its acceptance of such appointment
as provided in paragraph (e) of this Section 7.08; 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 and acceptance thereof 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 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
<PAGE>
69
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 sixty (60) 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 sixty (60) 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 Deposited Assets 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 11.04 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 Supplement, the Trustee shall appoint an office or agency in The City of New
York where the Certificates 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:
<PAGE>
70
(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 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, subject to due execution by the
Depositor, 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;
(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
<PAGE>
71
(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 Proceeding 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 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.
(b) If the indemnification provided for in paragraph (a) of
this Section 7.11 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 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
<PAGE>
72
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, expenses and attorneys' fees 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 7.11 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 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 right or 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
<PAGE>
73
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 7.14, 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
7.14, upon receipt of a new list so furnished.
Section 7.15. Reports by Trustee. If required, within 60 days
after May 15 of each year, commencing with the year 1998, the Trustee shall
transmit to the Certificateholders, as provided in TIA Section 313(c), a brief
report dated as of such May 15, if required by TIA Section 313(a).
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, in the view of the Trustee, are not set forth
reasonably clearly in these Standard Terms and the related 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 ten (10)
Business Days after the date a Responsible Officer of the Depositor actually
receives such application, unless any such Responsible Officer shall have
consented in writing to any earlier date) unless, prior to 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 given
Series, on the Closing Date the Trustee shall enter into a Market Agent
Agreement with Merrill Lynch & Co. as the initial Market Agent, in the form
attached to the related Supplement. The Market Agent shall serve as such under
the terms and provisions hereof and of the Market Agent
<PAGE>
74
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
SECURITIES INTERMEDIARY
Section 9.01. Resignation or Removal of the Securities
Intermediary; Appointment of Successor Securities Intermediary. (a) The
Securities Intermediary may at any time resign as Securities Intermediary
hereunder by written notice of its election so to do, delivered to the Trustee
and the Depositor, and such resignation shall take effect upon the appointment
of a successor Securities Intermediary and its acceptance of such appointment as
hereinafter provided; provided, however, that in the event of such resignation,
the Securities Intermediary shall (i) assist the Trustee and the Depositor in
finding a successor Securities Intermediary acceptable to the Trustee and the
Depositor and (ii) negotiate in good faith concerning any prepaid but unaccrued
fees.
(b) The Trustee, the Depositor or the Holders of the Required
Percentage--Removal of Securities Intermediary of Certificates may at any time
remove the Securities Intermediary as Securities Intermediary hereunder by
written notice delivered to the Securities Intermediary in the manner provided
in Section 11.04 hereof, and such removal shall take effect upon the appointment
of the successor Securities Intermediary and its acceptance of such appointment
as provided in paragraph (e) of this Section 9.01; provided, however, that in
the event of such removal, the Depositor shall negotiate in good faith with the
Securities Intermediary in order to agree regarding payment of the termination
costs of the Securities Intermediary resulting from such removal.
(c) Upon the designation and acceptance thereof of a successor
Securities Intermediary, following either resignation or removal of the
Securities Intermediary, the Securities Intermediary shall deliver to the
successor Securities Intermediary all records relating to the Certificates in
the form and manner then maintained by the Securities Intermediary, which shall
include a hard copy thereof upon written request of the successor Securities
Intermediary.
<PAGE>
75
(d) If at any time the Securities Intermediary shall become
incapable of acting or shall be adjudged a bankrupt or insolvent, or a receiver
of the Securities Intermediary or of its property shall be appointed, or any
public officer shall take charge or control of the Securities Intermediary 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 Securities Intermediary and the appointment of a
successor Securities Intermediary. In the event the Securities Intermediary
resigns or is removed, the Securities Intermediary shall reimburse the Depositor
for any fees or charges previously paid to the Securities Intermediary in
respect of duties not yet performed under this Trust Agreement which remain to
be performed by a successor Securities Intermediary.
(e) In case at any time the Securities Intermediary acting
hereunder notifies the Trustee or the Depositor that it elects to resign or the
Trustee, the Depositor or Holders of the Required Percentage--Removal of
Securities Intermediary of Certificates notifies or notify the Securities
Intermediary that it or they elects or elect to remove the Securities
Intermediary as Securities Intermediary, the Depositor shall, within sixty (60)
days after the delivery of the notice of resignation or removal, appoint a
successor Securities Intermediary, which shall satisfy the requirements set
forth in Section 2.06. If no successor Securities Intermediary has been
appointed within sixty (60) days after the Securities Intermediary has given
written notice of its election to resign or the Trustee, the Depositor or
Holders of the Required Percentage--Removal of Securities Intermediary of
Certificates have given written notice to the Securities Intermediary of its or
their election to remove the Securities Intermediary, as the case may be, the
Securities Intermediary may petition any court of competent jurisdiction for the
appointment of a successor Securities Intermediary. Every successor Securities
Intermediary shall execute and deliver to its predecessor, to the Trustee and to
the Depositor an instrument in writing accepting its appointment hereunder, and
thereupon such successor Securities Intermediary, 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 Securities
Intermediary under this Trust Agreement, and such predecessor, upon payment of
all sums due it and on the written request of the Trustee and 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 Deposited
Assets and parts thereof to such successor. Any successor Securities
Intermediary shall promptly give notice of its appointment to the
Certificateholders of Certificates for which it is successor Securities
Intermediary in the manner provided in Section 11.04 hereof.
(f) Any corporation into or with which the Securities
Intermediary may be merged, consolidated or converted shall be the successor of
such Securities Intermediary without the execution or filing of any document or
any further act.
<PAGE>
76
ARTICLE X
TERMINATION
Section 10.01. 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 any trust
created hereby continue beyond the earlier of (1) any date set forth in Section
13 of the applicable Supplement as the termination date for such trust or (2)
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.
(b) The Depositor shall provide the Trustee with written
notice of any of the events set forth in paragraph (a) of this Section 10.01.
(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 paragraph (a) of this Section 10.01, 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 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 10.01 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.
<PAGE>
77
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Amendment. (a) Unless otherwise specified in
the applicable Supplement, this Trust Agreement may be amended from time to time
by the Depositor, the Trustee and the Securities Intermediary without notice to
or consent of any of the Certificateholders, for any of the following purposes:
(i) to cure any ambiguity;
(ii) to correct or supplement any provision herein that may be
inconsistent with any other provision herein or in the Supplement;
(iii) to change the Trustee or the Securities Intermediary for
a Series subsequent to the Closing Date for such Series;
(iv) to provide for administration of separate Trusts by more
than one trustee;
(v) to provide for a successor Trustee or successor Securities
Intermediary with respect to Certificates of one or more Series;
(vi) to provide for the issuance of a new Series pursuant to a
Supplement issued hereunder pursuant to Sections 5.01 and 5.12 hereof;
(vii) to add or supplement any Credit Support for the benefit
of any Certificateholders (provided, however, that if any such addition
affects any Series or Class of Certificateholders differently than any
other Series or Class of Certificateholders, then such addition will
not, as evidenced by an Opinion of Counsel, have a material adverse
effect on the interests of any affected Series or Class of
Certificateholders);
(viii) to add to the covenants, restrictions or obligations of
the Depositor, the Trustee, the Securities Intermediary or the
Administrative Agent, if any, for the benefit of the
Certificateholders;
(ix) to comply with any requirements imposed by the Code; or
(x) to add, change or eliminate any other provisions with
respect to matters or questions arising under this Trust Agreement.
<PAGE>
78
Any amendment made pursuant to this paragraph (a) is subject to the condition
that such amendment shall satisfy the Rating Agency Condition with respect to
such amendment and shall not cause any Trust created hereunder to fail to
qualify as a fixed investment trust (or "grantor trust") for federal income tax
purposes.
(b) Without limiting the generality of the foregoing, unless
otherwise specified in the applicable Supplement, with respect to any Series,
this Trust Agreement may also be modified or amended from time to time by the
Depositor, the Trustee and the Securities Intermediary with the consent of the
Holders of Certificates representing the Required Percentage--Amendment of the
aggregate Voting Rights of those Certificates that are adversely affected by
such modification or amendment for the purpose of adding any provision 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) reduce the percentage of
aggregate Voting Rights required to take any action specified in this Trust
Agreement, without the consent of the Holders of all Certificates of such Series
or Class then Outstanding, or (iii) cause any Trust created hereunder to fail to
qualify as a fixed investment trust (or "grantor trust") for federal income tax
purposes.
Notwithstanding any other provision of this Trust Agreement,
for purposes of the giving or withholding of consents pursuant to this Section
11.01, Certificates registered in the name of the Depositor, the Trustee, the
Securities Intermediary or any Affiliate of the Depositor, the Trustee or the
Securities Intermediary shall be entitled to Voting Rights with respect to
matters affecting such Certificates. Notwithstanding any other provision of this
Trust Agreement, this paragraph (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 11.01 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.
Section 11.02. 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
<PAGE>
79
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 other than
pursuant to the provisions hereof.
(c) No Certificateholder of a given Series shall have any
right by virtue of any provision of this Trust Agreement to institute any
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 of this Trust Agreement 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 Proceeding in its own name as Trustee hereunder;
(iii) such Certificateholder or Certificateholders 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;
(iv) 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 Proceeding; and
(v) 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 Proceeding 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
<PAGE>
80
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 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 11.02, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
Section 11.03. Governing Law. This Trust Agreement (including,
without limitation, the establishment and maintenance of Certificate Accounts
and all interests, duties and obligations of the parties hereunder or thereunder
or with respect hereto or thereto) and each Certificate shall be construed in
accordance with and governed by the law of the State of New York.
Section 11.04. Notices. (a) All directions, demands and
notices hereunder shall be in writing and shall be delivered as set forth in the
applicable 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 Merrill Lynch & Co., World Financial Center, New York, New York
10281, Attention: Frank D. Ronan, facsimile transmission number (212) 449-9054,
telephone confirmation number (212) 449- 6177. The Depositor may change this
information by written notice to the Trustee and to the Securities Intermediary.
(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 United States Trust Company of New York, 114 West 47th Street, 25th Floor,
New York, New York 10036, Attention: STEERS, referencing the designation of the
applicable Series, facsimile transmission number (212) 852-1625, telephone
confirmation number (212) 852-1623. The Trustee may change this information by
notice to the Depositor and to the Securities Intermediary.
(e) Any and all notices to be given to the Securities
Intermediary shall be deemed to have been duly given if sent by facsimile
transmission to the Securities Intermediary at United States Trust Company of
New York, 114 West 47th Street, 25th
<PAGE>
81
Floor, New York, New York 10036, Attention: STEERS, referencing the designation
of the applicable Series, facsimile transmission number (212) 852-1625,
telephone confirmation number (212) 852-1623. The Securities Intermediary may
change this information by notice to the Depositor and to the Trustee.
(f) Any and all notices to be given to the Swap Counterparty,
if any, will be specified in the Supplement.
Section 11.05. 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;
(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
4.03.
(c) Any such notice pursuant to this Section 11.05 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
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,
<PAGE>
82
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.
(iii) Any and all notices to be given to DCR shall be deemed
to have been duly given in sent by facsimile transmission to DCR at Duff &
Phelps Credit Rating Co., 55 E. Monroe Street, Suite 3500, Chicago, IL
60603-5701, Attention: Karen O'Donnell, facsimile transmission number (312)
368-3155, telephone confirmation number (312) 368- 3100. DCR may change this
information by notice to the Depositor and the Trustee.
(iv) Any and all notices to be given to Fitch shall be deemed
to have been duly given in sent by facsimile transmission to Fitch at Fitch
Investors Service, L.P., One State Street Plaza, New York, NY 10004, facsimile
transmission number (212) 480-4435, telephone confirmation number (212)
908-0500. Fitch may change this information by notice to the Depositor and the
Trustee.
Section 11.06. 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 11.07. Nonpetition Covenant. Notwithstanding any prior
termination of this Trust Agreement, each of the Trustee (including any
Administrative Agent, Authenticating Agent and Paying Agent) and the Depositor
agrees that it shall not, until the date which is one year and one day after the
termination of a Series, acquiesce, petition or otherwise invoke or cause a
Trust to invoke the process of the United States, 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 such Trust or all or any part of the property or assets of such Trust or
ordering the winding up or liquidation of the affairs of such Trust.
Section 11.08. No Recourse. None of the Trustee (including any
Administrative Agent, Authenticating Agent or Paying Agent), the Securities
Intermediary or the Depositor shall have any recourse to the Underlying
Securities, except as specifically provided in the related Supplement.
Section 11.09. 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.
<PAGE>
83
Section 11.10. 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 11.11. Trust Indenture Act. This Trust Agreement is
subject to the provisions of the TIA 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 Supplements,
from failing to qualify under the TIA.
<PAGE>
84
IN WITNESS WHEREOF, the Depositor, the Trustee and the
Securities Intermediary have caused these Standard Terms to be duly executed by
their respective officers thereunto duly authorized, in each case as of the day
and year first above written.
MERRILL LYNCH DEPOSITOR, INC.,
as Depositor
By: /s/ Frank D. Ronan
---------------------------------
Name: Frank D. Ronan
Title: President
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
By: /s/ Andy Serrano
---------------------------------
Name: Andres E. Serrano
Title: Vice President
UNITED STATES TRUST COMPANY OF NEW YORK,
as Securities Intermediary
By: /s/ Andy Serrano
---------------------------------
Name: Andres E. Serrano
Title: Vice President
<PAGE>
EXHIBIT B
Form of Certificate
(begins on next page)
<PAGE>
TRUST CERTIFICATE
No. $ 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 THE 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.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE
INDIVIDUAL CERTIFICATES REPRESENTED HEREBY, THIS CERTIFICATE MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY DTC TO CEDE & CO. OR BY CEDE & CO. TO DTC OR TO
ANOTHER NOMINEE OF DTC OR BY DTC OR CEDE & CO. TO A SUCCESSOR DEPOSITORY OR A
NOMINEE OF SUCH SUCCESSOR DEPOSITORY.
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 DEPOSITED ASSETS ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR ANY OTHER PERSON.
THE HOLDER OF THIS CERTIFICATE SHALL HAVE NO RIGHT TO
PRINCIPAL PAYMENTS IN RESPECT OF THE UNDERLYING SECURITIES. THE REGISTERED
HOLDER HEREOF, BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL LOOK SOLELY TO THE
DEPOSITED ASSETS (TO THE EXTENT OF ITS RIGHTS THEREIN) FOR DISTRIBUTIONS
HEREUNDER.
PUBLIC STEERS(R) SERIES 1998 MCIC-P1 TRUST
PUBLIC STEERS(R) TRUST CERTIFICATES,
<PAGE>
2
SERIES 1998 MCIC-P1
PRINCIPAL AMOUNT TRUST CERTIFICATES
evidencing a fractional undivided beneficial ownership interest in the Trust, as
defined below, the property of which consists principally of $50,000,000
aggregate principal amount of 7.125% Trust Preferred Securities (the "Underlying
Securities") of MCI Communications Corporation, a Delaware corporation (the
"Underlying Securities Issuer"), and all payments received thereon, deposited in
trust by Merrill Lynch Depositor, Inc. (the "Depositor").
THIS CERTIFIES THAT CEDE & CO. is the registered owner of a
nonassessable, fully-paid, fractional undivided interest in the Public STEERS(R)
Series 1998 MCIC-P1 Trust formed by the Depositor. Under the Trust Agreement,
the Certificates are entitled to receive on each Distribution Date until June
15, 2003, the distributions, if any, received on the Underlying Securities,
which will represent distributions at a rate of 7.125% per annum on the Stated
Amount of the Certificates.
The Trust was created pursuant to a Standard Terms for Trust
Agreements, dated as of February 20, 1998 (the "Standard Terms"), between the
Depositor and United States Trust Company of New York, a New York corporation,
not in its individual capacity but solely as Trustee (the "Trustee") and as
securities intermediary (the "Securities Intermediary"), as supplemented by the
Public STEERS(R) Series 1998 MCIC-P1 Supplement, dated as of April 8, 1998 (the
"Supplement" and, together with the Standard Terms, the "Trust Agreement"),
between the Depositor and the Trustee and the Securities Intermediary. 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 "Public STEERS(R) Trust Certificates, Series 1998 MCIC-P1"
(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. Further, subject to the terms,
provisions and conditions of the Trust Agreement, the Trust will issue Call
Rights, which will be sold in one or more privately negotiated transactions. The
property of the Trust consists of the Underlying Securities, all payments
received or receivable on the Underlying Securities
<PAGE>
3
accrued on or after the Cut-off Date, and the other Deposited Assets, if any,
all as more fully specified in the Trust Agreement.
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.
Each Certificateholder, by its acceptance of a Certificate,
covenants and agrees that such Certificateholder will not at any time institute
against the Trust, or join in any institution against the Trust of, any
bankruptcy proceedings under any United States Federal or state bankruptcy or
similar law in connection with any obligations relating to the Certificates or
the Trust Agreement.
Distributions made on this Certificate will be made as
provided in the Trust Agreement by the Trustee by check mailed to the
Certificateholder of record in the Certificate Register or by wire transfer to
an account designated by such Holder without the presentation or surrender of
this Certificate or the making of any notation hereon of, 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.
The Trustee does not assume responsibility for the accuracy of
the statements in the Certificate (and the reverse hereof).
Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee, this Certificate shall not entitle the
Holder hereof to any benefit under the Trust Agreement or be valid for any
purpose.
<PAGE>
4
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed as of the date set forth below.
UNITED STATES TRUST COMPANY
OF NEW YORK, not in its individual
capacity but solely as Trustee
By: _________________________
Authorized Signatory
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates described in the Trust
Agreement referred to herein.
UNITED STATES TRUST COMPANY
OF NEW YORK, not in its individual
capacity but solely as Trustee
Dated: April __, 1998 By: _________________________
Authorized Signatory
<PAGE>
5
(REVERSE OF CERTIFICATE)
The Certificates are limited in right of distribution to
certain payments and collections respecting the Underlying Securities, all as
more specifically set forth herein and in the Trust Agreement. The registered
Holder hereof, by its acceptance hereof, agrees that it will look solely to the
Deposited Assets (to the extent of its rights therein) for interest
distributions hereunder. Both the Underlying Securities and Call Holders that
exercise their Call Rights may be sources of principal distributions on the
Trust Certificates.
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 662/3% 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.
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 signed by, the Holder hereof, 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 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, the Trustee and the Securities Intermediary and
any agent of the Depositor, the Trustee or the Securities Intermediary may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Depositor, the Trustee, or the Securities
Intermediary nor any such agent shall be affected by any notice to the contrary.
<PAGE>
6
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, by its acceptance of this Certificate, agrees to treat
the Certificates, the distributions from the Trust and its beneficial interest
in the Trust 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 Deposited Assets and the issuance of the Certificates and the Call
Rights, and other than those required or authorized by the Trust Agreement or
incidental and necessary to accomplish such activities. The Trust may not issue
or sell any certificates or other obligations other than the Certificates and
the Call Rights or otherwise incur, assume or guarantee any indebtedness for
money borrowed.
The Trust and the obligations of the Depositor, the Trustee
and the Securities Intermediary created by the Trust Agreement with respect to
the Certificates shall terminate upon the earlier of (i) the payment in full at
maturity or sale by the Trust after a payment default on or an acceleration or
other early payment of the Underlying Securities and the distribution in full of
all amounts due in respect of the Certificates and (ii) June 15, 2003.
If 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 (each, a "Plan"), purchases Certificates,
certain aspects of such investment, including the operation of the Trust, might
be subject to the prohibited transaction provisions under ERISA and the Internal
Revenue Code of 1986, as amended (the "Code"), unless certain exemptions apply.
A Plan should consult its advisors concerning the ability of such Plan to
purchase Certificates under ERISA or the Code.
<PAGE>
7
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY OR
TAXPAYER IDENTIFICATION 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 Registrar, with full power of substitution in the
premises.
Dated:
________________________*
Signature Guaranteed:
________________________*
* NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a 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>
C-1
OPTION TO ELECT EXCHANGE
If you wish to have this Certificate, or a portion thereof, exchanged
by the Trustee pursuant to Section 4.07 of the Standard Terms, check the Box: _
If you wish to have less than all of this Certificate exchanged, state
the amount: $________________
Date: ___________
Your Signature: ________________________
(Sign exactly as your name appears on the other side of this
Certificate)
Signature Guarantee: ______________________________
<PAGE>
EXHIBIT C
Market Agent Agreement
(begins on next page)
<PAGE>
MARKET AGENT AGREEMENT
MARKET AGENT AGREEMENT, dated as of April 8, 1998 (the
"Agreement"), by and between Merrill Lynch & Co. ("Merrill Lynch & Co.") and the
Public STEERS(R) Series 1998 MCIC-P1 Trust (the "Trust"), a New York trust
created under the Standard Terms for Trust Agreements, dated as of the date
hereof (the "Standard Terms"), between Merrill Lynch Depositor, Inc., as
depositor (the "Depositor") and United States Trust Company of New York, as
trustee (the "Trustee") and as securities intermediary (the "Securities
Intermediary"), as amended and supplemented by the Series Supplement, dated as
of the date hereof, between the Depositor and the Trustee and Securities
Intermediary (the Standard Terms, together with the Series Supplement, the
"Trust Agreement"). Capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Trust Agreement. This Agreement shall
constitute the "Market Agent Agreement" as defined in the Trust Agreement.
W I T N E S S E T H:
WHEREAS, the Trust desires to retain Merrill Lynch & Co. to
render certain services to the Trust in the manner and on the terms hereinafter
set forth;
WHEREAS, Merrill Lynch & Co. is a recognized broker dealer
meeting the qualifications for a Market Agent set forth in the Trust Agreement
and desires to provide such services to the Trust on the terms and conditions
hereinafter set forth; and
WHEREAS, the Trustee has been directed to enter into and
execute this Market Agent Agreement with Merrill Lynch & Co. as the initial
Market Agent pursuant to Section 8.01 of the Standard Terms;
NOW, THEREFORE, in consideration of the premises and the
covenants hereinafter contained, Merrill Lynch & Co. and the Trust hereby agree
as follows:
Section 1. Duties of the Market Agent. The Trust hereby
employs Merrill Lynch & Co. to act as the Market Agent for the Trust and to
furnish to the Trust all of the services of the Market Agent set forth herein
and in the Trust Agreement, including but not limited to acting on behalf of the
Trust in connection with the sale and purchase of Underlying Securities as
provided in the Trust Agreement. The Market Agent may solicit and accept bids
from Certificateholders for the Underlying Securities. Merrill Lynch & Co.
hereby accepts such employment and agrees during the term of the Certificates to
render such services and to assume the obligations of the Market Agent under the
Trust Agreement under the terms and conditions herein set forth.
<PAGE>
Section 2. Compensation of Merrill Lynch & Co. The Depositor
shall pay Merrill Lynch & Co. a fee as shall be separately agreed between the
Depositor and Merrill Lynch & Co. It shall be the sole responsibility of the
Depositor to pay such fee and the Trust shall have no obligation to compensate
Merrill Lynch & Co. for the services it renders pursuant to the terms of this
Market Agent Agreement, except that the Trust shall pay Merrill Lynch & Co. a
fee for any sale of the Underlying Securities in an amount that is customary for
such a sale at the time of such sale.
Section 3. Limitation of Liability of the Market Agent. The
Market Agent shall not be liable in contract, tort or otherwise to the Trust for
any losses, costs or damages arising out of its performance of its obligations
and duties hereunder except for willful misconduct or negligence in the
performance of its duties, or by reason of reckless disregard of its obligations
and duties hereunder.
Section 4. Term of this Agreement. This Agreement, which shall
be a binding agreement as of the date hereof and shall inure to the benefit of
the respective successors and permitted assigns of the parties hereto, shall
terminate upon the earlier to occur of (a) the termination of the Trust
Agreement, (b) the removal of the Market Agent by the Trustee in accordance with
the Trust Agreement or (c) 30 days after written notice of Merrill Lynch & Co.'s
resignation as Market Agent is delivered to the Trustee.
Section 5. Amendments. No amendment or waiver of any provision
of this Agreement nor consent to any departure herefrom by any party hereto
shall in any event be effective unless the same shall be in writing and signed
by the party against which enforcement of such amendment or waiver or consent is
sought, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it is given.
Section 6. Notice Addresses. Except as otherwise expressly
provided herein, all notices and other communications provided for hereunder
shall be deemed to have been duly given if sent by facsimile transmission (a) if
to the Market Agent, as set forth below and (b) if to the Trustee, as set forth
in the Trust Agreement;
If to Merrill Lynch & Co.: Merrill Lynch & Co.
World Financial Center
New York, New York 10281
Attention: Frank D. Ronan
Facsimile: (212) 449-9054
Telephone confirmation no.: (212) 449-6177
Section 7. Assignment. Except as provided in this Section 7,
this Agreement may not be assigned by the Market Agent without the prior consent
of the Trustee in accordance with the Trust Agreement.
2
<PAGE>
The Market Agent shall have the right to transfer and assign
all of its rights, duties, obligations and liabilities under this Agreement to
an Affiliate of the Market Agent; provided, however, that such transfer and
assignment shall be on the condition that the due and punctual performance and
observance of all the terms and conditions of this Agreement to be performed by
the Market Agent shall, by an agreement supplemental hereto, be assumed by such
Affiliate just as fully and effectually as if such Affiliate had been the
original party of the first part to this Agreement.
Section 8. Applicable Law. This Agreement shall be governed by
the laws of the State of New York.
Section 9. Entire Agreement. This Agreement embodies the
entire agreement and understanding between Merrill Lynch & Co. and the Trust and
supersedes any and all prior agreements and understandings between Merrill Lynch
& Co. and the Trust relating to the subject matter hereof.
Section 10. Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
Section 11. Severability of Provisions. If one or more of the
provisions of this Agreement shall be for any reason whatsoever held invalid or
unenforceable, such provisions shall be deemed severable from the remaining
covenants, agreements and provisions of this Agreement and such invalidity or
unenforceability shall in no way affect the validity or enforceability of such
remaining provisions or the rights of any parties thereunder. To the extent
permitted by law, the parties hereto hereby waive any provision of law that
renders any provision of this Agreement invalid or unenforceable in any respect.
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Market Agent Agreement as of the day and year first above
written.
MERRILL LYNCH & CO.
By: /s/ Barry S. Finkelstein
------------------------------------
Name: Barry S. Finkelstein
Title: Secretary
UNITED STATES TRUST COMPANY OF
NEW YORK, not in its individual capacity
but as Trustee
By: /s/ Andres E. Serrano
------------------------------------
Name: Andres E. Serrano
Title: Vice President
4
<PAGE>
EXHIBIT D
Form of Escrow Agreement
(begins on next page)
<PAGE>
FORM OF
ESCROW DEPOSIT AGREEMENT
THIS ESCROW DEPOSIT AGREEMENT, dated as of this 14th day of
May, 2003 among United States Trust Company of New York, a New York corporation,
as Trustee of the Public STEERS(R) Series 1998 MCIC-P1 Trust ("Trustee"),
[____________________], a [___________] corporation, as Escrow Agent ("Escrow
Agent"), and [_______________], a [__________] corporation ("Call Holder").
W I T N E S S E T H:
WHEREAS, Trustee and Merrill Lynch Depositor, Inc. (
"Depositor") entered into a Standard Terms for Trust Agreement dated February
20, 1998 (the "Standard Terms"), as supplemented by a Series Supplement dated
April 8, 1998 (the "Series Supplement," and, together with the Standard Terms,
the "Trust Agreement"), providing for the issuance by Trustee of the Public
STEERS(R), Trust Certificates, Series MCIC-P1 and related call rights on the
Underlying Securities (each a "Call Right," and collectively, the "Call Rights")
of the Trust described therein; and
WHEREAS, Call Holder is [one of the holders] [the holder] of
the Call Rights; and
WHEREAS, because the credit rating of Call Holder's senior,
unsecured long-term debt by Moody's Investors Service, Inc. ("Moody's") or
Standard & Poor's Ratings Services, a division of the McGraw-Hill Companies,
Inc. ("S&P") is less than the rating that was assigned to the Trust Certificates
on April 8, 1998, in order for Call Holder to exercise its Call Right on the
Underlying Securities, it is a condition precedent to such exercise that Call
Holder deliver the Escrow Deposit (as defined herein) to Escrow Agent; and
WHEREAS, the parties desire that Escrow Agent shall hold, and
Escrow Agent has agreed to hold, the Escrow Deposit in escrow on the terms and
conditions provided in this Agreement.
NOW THEREFORE, the parties hereto mutually agree as follows:
1. Escrow Deposit. Concurrently with the execution and
delivery of this Agreement, Call Holder will deliver the sum of
_________________ Dollars ($___________) (the "Escrow Deposit") by wire transfer
of immediately available funds to Escrow Agent, to be held by Escrow Agent in
escrow on the terms and conditions hereinafter provided. Escrow Agent hereby
acknowledges receipt of the Escrow Deposit.
2. Investment of Escrow Deposit. Following the delivery of the
Escrow Deposit to Escrow Agent, Escrow Agent shall cause the Escrow Deposit to
be deposited in an interest bearing account, designated as the "Public STEERS(R)
MCIC-P1 Trust Call Right Escrow Account." Escrow Agent is hereby directed to
invest the Escrow Deposit in (i) U.S. Treasury Securities or (ii) money market
accounts in banks having combined capital, surplus and undivided profits of
$50,000,000 or
<PAGE>
2
more. All investments shall have a maturity of ________ days or less during the
_______ days immediately after deposit of the Escrow Deposit, and thereafter
shall be available on demand without penalty unless Escrow Agent is otherwise
directed in writing by both Call Holder and Trustee.
3. Disposition of Escrow Deposit Prior to and at Closing.
(a) On June 15, 2003 (the "Call Date"), simultaneously with
the transfer to Call Holder of the Underlying Securities that were subject to
Call Holder's Call Right (the "Closing," the period of time between the initial
deposit of the Escrow Deposit and the Closing being referred to as the "Escrow
Period") in accordance with the terms of the Trust Agreement (i) Escrow Agent
shall pay to Call Holder all interest, and interest earned on interest, on the
Escrow Deposit to the Closing Date by wire transfer of immediately available
funds to a bank account or bank accounts designated by Call Holder or, at Call
Holder's option, by a bank check or bank checks payable to the order of a payee
or payees designated by Call Holder and (ii) Escrow Agent shall pay to the
Trustee the Escrow Deposit by wire transfer of immediately available funds to a
single bank account or bank accounts designated by Trustee, or, at Trustee's
option, by a bank check or bank checks payable to the order of a payee or payees
designated by Trustee.
(b) If, during the Escrow Period, the Trust Agreement is
terminated in accordance with Section 10 of the Standard Terms and Section 13 of
the Series Supplement, then Escrow Agent shall, ten (10) business days after
written notice by Trustee and Call Holder of such termination, pay to Call
Holder the Escrow Deposit, plus all interest, and interest earned on interest,
on the Escrow Deposit, by wire transfer of immediately available funds to a bank
account or bank accounts designated by Call Holder or, at Call Holder's option,
by a bank check or bank checks payable to the order of a payee or payees
designated by Call Holder; provided, however, that if Escrow Agent receives a
written objection from the Trustee to such release of the Escrow Deposit within
seven (7) business days after Call Holder gives such written notice, then Escrow
Agent shall pay the Escrow Deposit and any interest, and interest earned on
interest, on the Escrow Deposit in accordance with joint written instructions
from Call Holder and Trustee, or, in the absence of such joint written
instructions, the provisions of Section 6 hereof shall apply.
4. Liability of Escrow Agent. Escrow Agent shall not incur any
liability to any party for damages, losses or expenses for (a) any act or
failure to act made or omitted in good faith and without gross negligence or
willful misconduct or (b) any action taken or omitted in reliance upon any
instrument that Escrow Agent shall in good faith believe to be genuine, nor will
Escrow Agent be liable or responsible for forgeries, fraud, impersonations, or
determining the scope of any representative authority. In addition, Escrow Agent
may consult with legal counsel in connection with Escrow Agent's duties under
this Agreement and shall be fully protected in any act taken, suffered, or
permitted by it in good faith in accordance with the advice of counsel. Escrow
Agent is not responsible for determining and verifying the authority of any
person acting or purporting to act on behalf of any party to this Agreement.
<PAGE>
3
5. Escrow. Escrow Agent can incur reasonable expenses in
connection with its duties and incur legal fees and expenses in connection with
this Agreement with any firm, and such expenses shall be paid or reimbursed, as
the case may be, in accordance with Section 7 of this Agreement. In the event
that the conditions of this Agreement are not properly fulfilled, or if Escrow
Agent renders any service not provided for in this Agreement, or if the parties
request a substantial modification of its terms, or if any controversy arises,
or if Escrow Agent is made a party to, or intervenes in, any litigation
pertaining to this escrow or its subject matter, Escrow Agent shall be
reasonably compensated for such extraordinary service and reimbursed for all
reasonable costs, attorneys' fees and expenses of any firm occasioned by such
default, delay, controversy or litigation and Escrow Agent shall have the right
to retain all documents and/or other things of value at any time held by Escrow
Agent in this escrow until such compensation, fees, costs, and expenses are
paid.
6. Controversies. If any controversy arises relating to this
Agreement, or with any other party concerning the subject matter of this
Agreement, its terms or conditions, Escrow Agent will not be required to
determine the controversy or to take any action regarding it. Escrow Agent may
hold the Escrow Funds (as hereinafter defined) and may wait for settlement of
any such controversy by final appropriate legal proceedings or other means, as,
in Escrow Agent's discretion, Escrow Agent may deem appropriate despite what may
be set forth elsewhere in this Agreement. In such event, Escrow Agent will not
be liable for damages as long as Escrow Agent acts in good faith and without
gross negligence or willful misconduct. Escrow Agent is authorized to deposit
with the clerk of any court the Escrow Funds held hereunder. Upon initiating an
interpleader or declaratory judgment or any other action seeking to determine
the rights of the parties hereunder and depositing the Escrow Funds, Escrow
Agent shall be fully released and discharged of and from all further obligations
and liability imposed by the terms of this Agreement, but not as to acts of
Escrow Agent prior thereto. As used herein, the term "Escrow Funds" means the
Escrow Deposit plus all interest, and interest earned on interest, on the Escrow
Deposit.
7. Indemnification of Escrow Agent. Trustee and Call Holder
and their respective successors and assigns agree to indemnify and hold Escrow
Agent harmless against any and all losses, claims, damages, liabilities and
expenses, including reasonable costs of investigation and reasonable counsel
fees and disbursements, that may be imposed on Escrow Agent or incurred by
Escrow Agent in good faith and without gross negligence or willful misconduct in
connection with the performance of the duties under this Agreement, including,
but not limited to, any litigation arising from this Agreement or involving its
subject matter.
8. Termination. Except for the provisions of Section 7, which
shall survive this Agreement, this Agreement shall terminate upon the day on
which all of the Escrow Funds are disbursed in full in accordance with this
Agreement.
9. Mailing Instructions, Etc. Instructions and other documents
hand-delivered under this Agreement shall be valid if (i) hand-delivered, (ii)
sent by registered or certified mail,
<PAGE>
4
return receipt requested, (iii) sent by Federal Express or other reliable
overnight courier service, or (iv) transmitted by telecopy.
(a) If to Call Holder at:
Telecopy ( )
Telephone ( )
(b) If to Trustee, at:
United States Trust Company of New York, as Trustee
114 West 47th Street, 25H
New York, NY 10036-1532 CTD
Attn: Corporate Trust _____________
Telecopy (212) 852-1626/27/32
Telephone (212) 852-1___
(c) If to Escrow Agent, at:
Telecopy ( )
Telephone ( )
Each notice, demand, instruction or communication which shall be given or made
in the manner described above shall be deemed sufficiently given or made at such
time as it is delivered to the addressee in the case of personal delivery or
registered or certified mail, one (1) business day following delivery to the
courier if sent by Federal Express or other reliable overnight courier or upon
receipt of the telecopy if sent by telecopy, followed by a written confirmation
within two (2) business days.
10. Trust Agreement; Defined Terms. Defined terms used herein
shall have the respective meanings set forth in the Trust Agreement unless
otherwise defined herein.
11. Binding. This Agreement shall be binding upon, inure to
the benefit of, and be enforceable by the parties hereto and their respective
successors and assigns.
12. Governing Law. This Agreement shall be deemed a contract
made under the laws of the State of New York, and together with the rights and
obligations of the parties hereunder, shall be construed and enforced in
accordance with and governed by the laws of such state (but not including the
choice-of-law rules thereof).
<PAGE>
5
13. Counterparts. This Agreement may be executed
simultaneously in counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
14. Captions. Any captions are solely for convenience of
reference and shall not be used in construing or interpreting this Agreement.
15. Entire Agreement. This Agreement sets forth the entire
agreement among the parties with respect to the subject matter hereof and
supersedes all prior or oral agreements or understandings with respect thereto.
<PAGE>
6
IN WITNESS WHEREOF, the parties hereto have executed this
Escrow Agreement as of the day and year first above written.
______________________, as Call Holder
By:
-----------------------------------
Name:
Title:
UNITED STATES TRUST COMPANY OF
NEW YORK, as Trustee
_______________________, as Escrow Agent
By:
-----------------------------------
Name:
Title:
PUBLIC STEERS, SERIES MCIC-P1
MCI COMMUNICATIONS CORP.
PROPOSED TERMS
(AS OF MARCH 24, 1998)
Issuer: The Trust, which will be established by Merrill Lynch
Depositor, Inc., solely for the purpose of issuing the Trust
Certificates (the "Certificates")
Certificates
Offered: Public STEERS(R)Trust Certificates, Series 1998 MCIC-P1 (the
"Certificates")
Underlying
Securities: The sole assets of the Trust will be $50 million 7.125%
Debentures due June 15, 2027 (the "Underlying Securities")
issued by MCI Communications Corp. (the "Issuer")
Cusip: 552673AU9
Amount of
Certificates: $50 million
Trade Date: March 25, 1998
Start Date: April 8, 1998
Cut-Off
Date: December 15, 1997
Offering
Price: T.B.D. (UST5Y + 0.85%)
Certificate
Coupon: 7.125%
Certificate
Payment
Dates: Each June 15 and December 15, commencing June 15, 1998.
Modified following business day will apply without adjustment
for period end dates.
Coupon Day
Count: 30/360
Final Scheduled
<PAGE>
2
Distribution
Date: June 15, 2003. On the Final Scheduled Distribution Date, the
Trust will put the Underlying Securities to the Issuer at par
plus accrued and unpaid interest (the "Exercise Price"), which
it will distribute to the holders of the Certificates, unless
the call on the Underlying Securities has been exercised. If
such call has been exercised, the call holder will pay the
Exercise Price to the Trust which, in turn, will distribute
the Exercise Price to the holders of the Certificates.
Denom-
inations: $1,000 and integral multiples thereof.
Rating: "A2" by Moody's and "A" by S&P
PROPRIETARY AND CONFIDENTIAL
This material is for discussion purposes and we are not soliciting any action
based upon it. This term sheet does not constitute an offer to sell or the
solicitation of an offer to buy securities of the type described above. Actual
offering of securities of a particular issuer will be made, in accordance with
applicable law, by prospectus or other appropriate offering documents. Any
information or descriptions contained herein will be superseded by such
information and descriptions contained in the final prospectus supplement
related to the offering of the Certificates. Although the information and
descriptions set forth above are reflective of the terms, as of the date
specified, under which Merrill Lynch Depositor believes an issuance of
Certificates might be structured, no assurance can be given that such an
issuance could in fact be executed and no obligation is created hereby to issue
such securities. We are acting solely in the capacity of underwriter and as an
affiliate of the Depositor and not in the capacity of your financial advisor or
fiduciary. You are advised to make an independent review and reach your own
conclusion regarding the economic benefits and risks of this transaction, and
the legal, tax and accounting aspects of this transaction as it relates to your
particular circumstances.
