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): February 18, 1999
MERRILL LYNCH DEPOSITOR, INC.
(on behalf of Public STEERS(R) Series 1998 HLT-1 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.
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2
Item 4. Changes in Registrant's Certifying Accountant
Not Applicable.
Item 5. Other Events
On February 18, 1999, Public STEERS(R) Series 1998 HLT-1
Trust, for which Merrill Lynch Depositor, Inc. (the "Depositor") acted as
depositor, issued an additional $9,887,000 stated amount of Class A Trust
Certificates and corresponding Class B Trust Certificates.
In connection therewith, the Depositor entered into a Public
STEERS(R) Series 1998 HLT-1 Amended and Restated Supplement, dated as of
February 18, 1999 (the "Supplement"), by and between the Depositor and United
States Trust Company of New York, as trustee (the "Trustee") and securities
intermediary (the "Securities Intermediary"), which amends and supplements 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. The Supplement replaces the Public STEERS(R) Series 1998 HLT-1
Supplement, dated as of October 15, 1998 (the "Supplement"), 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.
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Item 601(a)
of Regulation S-K
Exhibit No. Description
- ----------- -----------
1.2 Terms Agreement between Merrill Lynch Depositor, Inc. and
Merrill Lynch, Pierce, Fenner & Smith, Incorporated dated
February 18, 1999.
4.2 Amended and Restated Supplement to
the Standard Terms for Trust
Agreements, dated as of February 18,
1999, between Merrill Lynch
Depositor, Inc. and United States
Trust Company of New York, as
Trustee and as Securities
Intermediary. (Exhibits to the
Series Supplement were previously
filed with the Form 8-K dated
October 19, 1998.)
Item 8. Change in Fiscal Year
Not Applicable.
Item 9. Sales of Equity Securities Pursuant to Regulation S
Not Applicable.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
MERRILL LYNCH DEPOSITOR, INC.
Date: February 24, 1999 By:/s/ Bradley N. Liebmann
---------------------------------
Name: Bradley N. Liebmann
Title: Secretary
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INDEX TO EXHIBITS
Exhibit No. Description
- ----------- -----------
1.2 Terms Agreement between Merrill Lynch Depositor, Inc.
and Merrill Lynch, Pierce, Fenner & Smith, Incorporated
dated February 18, 1999.
4.2 Amended and Restated Supplement to the Standard Terms for
Trust Agreements, dated as of February 18, 1999, between
Merrill Lynch Depositor, Inc. and United States Trust Company
of New York, as Trustee and as Securities Intermediary.
(Exhibits to the Series Supplement were previously filed with
the Form 8-K dated October 19, 1998.)
(R) "STEERS" is a registered service mark of Merrill Lynch & Co., Inc.
Exhibit 1.2
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
PUBLIC STEERS(R) TRUST CERTIFICATES
TERMS AGREEMENT
February 18, 1999
To: Merrill Lynch Depositor, Inc.
World Financial Center
North Tower
New York, New York 10281
Attention: Barry N. Finkelstein
Ladies and Gentlemen:
We understand that Merrill Lynch Depositor, Inc., a Delaware
corporation (the "Company"), proposes to issue and sell or cause the Trust to
sell its Public STEERS(R) Trust Certificates in the following amounts: (1)
$9,887,000 stated amount of Class A Trust Certificates; and (2) the
corresponding Class B Trust Certificates (collectively, the "Underwritten
Securities").
Subject to the terms and conditions set forth below and subject to the
terms of the Purchase Agreement which are incorporated by reference herein, we
offer to purchase the principal amount of Underwritten Securities at the
purchase price set forth below.
The Underwritten Securities shall have the following terms:
Title: Trust Certificates, Series 1998 HLT-1, offered in two classes (Class A
Trust Certificates and Class B Trust Certificates)
Ratings: "Baa2" from Moody's; "BBB" from S&P
Aggregate principal amount:
Class A Trust Certificates: $9,887,000 stated amount
Corresponding Class B Trust Certificates
Denominations: $1,000 and integral multiples thereof.
Currency of payment: U.S. dollars
<PAGE>
Interest rate or formula: Holders of Class A Trust Certificates will be entitled
to payments of interest at 7.0% per annum through April 15, 2007.
Holders of Class B Trust Certificates will be entitled to a
distribution equal to .95% per annum multiplied by the principal amount
of the Underlying Securities (the "Class B Payments").
Interest payment dates: April 15 and October 15, commencing April 15, 1999.
Regular record dates: April 1 and October 1.
Stated maturity date: April 15, 2007.
Exchange of Trust Certificates: On each distribution date, Merrill Lynch & Co.
or any of its affiliates, other than the Depositor, may, if it holds Class A
Trust Certificates of a certain stated amount and Class B Trust Certificates of
a corresponding amount thereof, tender such Trust Certificates to the Trustee on
such distribution date, subject to certain conditions. Upon such tender, the
Trustee will deliver Deposited Assets having a principal amount equal to the
combined principal amounts of the Class A Trust Certificates and Class B Trust
Certificates being tendered to such Trust Certificateholder.
Sinking fund requirements: none
Conversion provisions: none
Listing requirements: Class A Certificates to be listed on the New York Stock
Exchange.
Black-out provisions: none
Fixed or Variable Price Offering: Variable Price Offering
Purchase price:
Class A Trust Certificates: 98.527% of the stated amount, plus
accrued interest at 7.0% compounded
semiannually from October 15, 1998
to the Closing Date
Class B Trust Certificates: $603,065.80
Form: Book-entry Trust Certificates with The Depository Trust Company, except
in certain limited circumstances
Closing date and location: February 18, 1999; Shearman & Sterling,
599 Lexington Avenue, New York, New York
2
<PAGE>
Please accept this offer no later than 10 o'clock A.M. (New York City time) on
February 18, 1999 by signing a copy of this Terms Agreement in the space set
forth below and returning the signed copy to us.
Very truly yours,
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Barry N. Finkelstein
------------------------------------
Authorized Signatory
Accepted:
MERRILL LYNCH DEPOSITOR, INC.
By /s/ Barry N. Finkelstein
------------------------------
Name: Barry N. Finkelstein
Title: President
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Exhibit 4.2
PUBLIC STEERS(R) SERIES 1998 HLT-1 TRUST
AMENDED AND RESTATED
SERIES SUPPLEMENT
between
MERRILL LYNCH DEPOSITOR, INC.,
as Depositor,
and
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee and Securities Intermediary
Dated as of February 18, 1999
<PAGE>
AMENDED AND RESTATED SERIES 1998 HLT-1 SUPPLEMENT, dated as of
February 18, 1999 (the "Supplement"), by and between MERRILL LYNCH DEPOSITOR,
INC., a Delaware corporation, as Depositor, and 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, $26,751,000 stated amount of Class A Certificates and
corresponding Class B Certificates were issued pursuant to a Series 1998 HLT-1
Supplement, dated as of October 15, 1998 (the "Initial Supplement"), by and
between the Depositor and the Trustee and Securities Intermediary, incorporating
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;
WHEREAS, the Depositor desires to deposit an additional
$9,887,000 aggregate principal amount of Underlying Securities into the Trust
designated herein (the "Trust");
WHEREAS, in connection with the deposit into the Trust of such
additional securities, the Depositor and the Trustee and Securities Intermediary
seek to increase to $36,638,000 in stated amount of Class A Certificates offered
and corresponding amount of Class B Certificates offered;
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual covenants expressed herein, the Depositor and the Trustee and
Securities Intermediary hereby agree that the Initial Supplement shall be
replaced in its entirety with this Supplement and further agree as follows:
Section 1. Incorporation of Standard Terms. All of the
provisions of the Standard Terms, a copy of which is attached hereto as Exhibit
A, are hereby incorporated herein by reference in their entirety and this
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. (a) Except as otherwise specified
herein or as the context may otherwise require, the following terms shall have
the respective meanings set forth below for all purposes under this Supplement.
Capitalized terms used but not defined herein shall have the meanings assigned
to them in the Standard Terms.
"Allocation Ratio": The ratio of the Class A Allocation to the
Class B Allocation. Voting Rights, Liquidation Proceeds, Realized Losses and
Extraordinary Trust Expenses shall be
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allocated between Class A Certificateholders and Class B Certificateholders in
accordance with the Allocation Ratio and, within each Class, each of the
foregoing rights and obligations shall be allocated to Certificateholders in
accordance with their respective economic interests in such Class.
"Available Funds": To the extent applicable, for any
Distribution Date, the sum of (i) all amounts actually received on or accruing
with respect to the Underlying Securities (including Liquidation Proceeds and
investment income earned on Account funds invested pursuant to Section 3.05 of
the Standard Terms) during the related Collection Period, (ii) all amounts
received pursuant to any Credit Support Instruments for such Distribution Date
and (iii) all other amounts, if any, less any amount held for the benefit of the
Retained Interest.
"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.
"Class A Allocation": The present value (discounted at the
rate of 7.95% per annum) of (i) the unpaid interest, except for the Class B
Payments, due or to become due on the Underlying Securities on or prior to the
Final Scheduled Distribution Date and (ii) the principal amount of the
Underlying Securities (in each case assuming that the Underlying Securities are
paid when due and are not redeemed prior to their stated maturity).
"Class A Certificates": The Certificates issued on October 15,
1998 under the Initial Supplement and on February 18, 1999 under this Supplement
in a stated amount of $26,751,000 and $9,887,000, respectively, entitled to
receive on each Distribution Date until and including the Final Scheduled
Distribution Date, interest payments of 7.00%, on the stated amount of the Class
A Trust Certificates and a distribution of the principal amount of the
Underlying Securities on the Final Scheduled Distribution Date.
"Class B Allocation": The sum of the present values
(discounted at the rate of 7.95% per annum) of the unpaid payments due or to
become due in respect of the Class B Payments of the Underlying Securities.
"Class B Certificates": The Certificates issued on October 15,
1998 under the Initial Supplement and on February 18, 1999 under this Supplement
are entitled, on each Distribution Date, commencing on April 15, 1999 and ending
on the Final Scheduled Distribution Date, to interest payments of 0.95% on the
stated amount of the Class A Trust Certificates (the "Class B Payments").
"Collection Period": (i) With respect to each October 15
Distribution Date, the period beginning on the April 15 Distribution Date of
that year and ending on the day before such
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October 15 Distribution Date, inclusive and (ii) with respect to each April 15
Distribution Date, the period beginning on the October 15 Distribution Date of
the previous year and ending on the day before such April 15 Distribution Date,
inclusive, except for the April 15, 1999 Distribution Date, as to which the
Collection Period shall be the period beginning on the Cut-off Date and ending
on the day before such April 15, 1999 Distribution Date, inclusive; provided,
however, that clauses (i) and (ii) shall be subject to Section 9(c) hereof.
"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": October 15, 1998.
"Depository": The Depository Trust Company, its nominees and
their respective successors.
"Distribution Date": April 15 and October 15 of each year (or
if such date is not a Business Day, the next succeeding Business Day),
commencing on April 15, 1999 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.
"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 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": April 15, 2007.
"Fixed Pass-Through Rate": 7.00% per annum.
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4
"Issue Dates": October 15, 1998 and February 18, 1999.
"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 semiannual installments of $1,000).
"Pass-Through Rate": The Fixed Pass-Through Rate.
"Prepaid Ordinary Expenses": Zero (0).
"Prospectus Supplement": Collectively, the Prospectus
Supplement, dated September 24, 1998, the Prospectus Supplement, dated October
9, 1998 and the Prospectus Supplement, dated February 18, 1999, relating to the
Certificates.
"Rating Agency": Moody's and S&P.
"Record Date": The close of business on each April 1 and
October 1, as the case may be, immediately preceding each Distribution Date.
"Series": Public STEERS(R) Trust Certificates, Series 1998
HLT-1.
"Underlying Securities": The $36,638,000 principal amount of
7.95% Debentures Due April 15, 2007 issued by the Underlying Securities Issuer,
as described in Schedule I hereto.
"Underlying Securities Issuer": Hilton Hotels Corporation, a
Delaware corporation.
(b) The terms listed below are not applicable to this Series.
"Accounting Date"
"Administration Account"
"Administrative Agent"
"Administration Agreement"
"Administrative Agent Termination Event"
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"Advance"
"Calculation Agent"
"Call Date"
"Call Price"
"Call Right"
"Call Terms"
"Callable Series"
"Credit Support"
"Credit Support Instrument"
"Credit Support Provider"
"Eligible Expense"
"Exchange Rate Agent"
"Floating Pass-Through Rate"
"Letter of Credit"
"Limited Guarantor"
"Limited Guaranty"
"Related Assets"
"Reserve Account"
"Requisite Reserve Amount"
"Retained Interest"
"Surety Bond"
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"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 by the Initial Supplement is known as the "Public STEERS(R) Series
1998 HLT-1 Trust". The Class A Certificates and Class B Certificates evidencing
certain undivided ownership interests therein shall be known as the "Public
STEERS(R) Trust Certificates, Series 1998 HLT-1, Class A Trust Certificates" and
the "Public STEERS(R) Trust Certificates, Series 1998 HLT-1, Class B Trust
Certificates", respectively.
(b) The Class A Certificates and Class B Certificates shall be
held through the Depository in book-entry form and shall be in the form attached
hereto as Exhibits B and C, respectively. The Certificates shall be issued in
authorized denominations of $1,000 (the "Authorized Denomination") and integral
multiples thereof. On each Issue Date, one Class A Certificate and one Class B
Certificate may be issued in an amount other than an integral multiple of the
Authorized Denomination. Except as provided in the Standard Terms and Section
15(a) hereof, the Trust shall not issue additional Certificates or incur any
indebtedness.
(c) The Class A Certificates will be entitled to receive (i)
on each Distribution Date, commencing on April 15, 1999 and ending on the Final
Scheduled Distribution Date interest payments at a rate of 7.00% on the stated
amount of the Class A Trust Certificates and (ii) on the Final Scheduled
Distribution Date, a distribution of the principal amount of the Underlying
Securities.
(d) On each Distribution Date, the Class B Certificates will
be entitled to receive an interest payment of 0.95% per annum multiplied by the
principal amount of the Underlying Securities (the "Class B Payments").
(e) Any reference to the principal amount of the Certificates
shall be construed as a reference to the principal amount of the Class A
Certificates and the initial principal amount of the Class B Certificates,
unless otherwise indicated.
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Section 4. Satisfaction of Conditions to Initial Execution and
Delivery of Trust Certificates. The Trustee hereby acknowledges receipt, on or
prior to the applicable Issue Date, of:
(i) the aggregate principal amount of 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, pro rata to the holders of the Class A
Certificates and Class B Certificates, interest accrued during the
related Collection Period at the rate of 7.00% per annum on the stated
amount of the Class A Certificates and 0.95% per annum multiplied by
the principal amount of the Underlying Securities (the "Class B
Payments") to holders of the Class B Certificates on such Distribution
Date, commencing on April 15, 1999 and ending on the Final Scheduled
Distribution Date;
(iii) third, pro rata in accordance with the Allocation Ratio
to the holders of the Class A Certificateholders and Class B
Certificateholders, if available, any additional payments 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 Class A Certificateholders, on the Final
Scheduled Distribution Date only, a distribution of the principal
amount of the Underlying Securities held by the Trust as of such date;
(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 any Class of 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.
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(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. (a) Payment to the Trustee of
Ordinary Expenses shall be as set forth in a separate agreement between the
Trustee and the Depositor. Notwithstanding anything to the contrary contained
herein, 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 each of Class A and Class B 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.
Section 7. Optional Exchange. (a) Merrill Lynch & Co., or any
of its Affiliates, other than the Depositor, may, if it holds Class A
Certificates and a corresponding amount of Class B Certificates, notify the
Trustee, not less than 30 (or such shorter period acceptable to the Trustee) but
not more than 45 days prior to a given Distribution Date that (i) it intends to
tender such Certificates to the Trustee on such Distribution Date, (ii) such
distribution will not 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 and (iii) such distribution will not affect the
characterization of the Trust as a "grantor trust" under the Code. Upon such
tender, the Trustee will deliver to such Certificateholder Underlying Securities
having a principal amount equal to the stated amount of the Class A Certificates
being tendered. For the avoidance of doubt, in exchange for tendering to the
Trustee Class A Certificates representing a certain proportion of the
outstanding Class A Certificates and Class B Certificates representing an
equivalent proportion of the outstanding Class B Certificates, Merrill Lynch &
Co. shall receive from the Trustee a pro rata portion of the Underlying
Securities.
(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.
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Section 8. Events of Default. Within 3 Business Days of its
receipt of notice of the occurrence of an Event of Default, the Trustee will
give notice to the Certificateholders, including any Beneficial Owners,
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, including any Beneficial Owners. For the purposes of this
Section 8, the Trustee will be obliged to treat a Person as a Beneficial Owner
only if such Person has first delivered to the Trustee the certificates
described in clauses (i) and (ii) of the definition of "Beneficial Owner" in the
Standard Terms.
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 Class A 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 Class A and Class B Certificates representing the Required
Percentage--Removal.
(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 D.
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(h) Notwithstanding anything in the Standard Terms to the
contrary, the Reserve Account referred to in Section 3.06(a) of the Standard
Terms, when and if established, shall be an asset of the Depositor and shall be
held by the Trustee for the benefit of the Depositor, not for the benefit of the
Certificateholders.
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, New York 10281
Attention: Barry N. Finkelstein
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 HLT-1
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 HLT-1
Telephone: (212) 852-1667
Facsimile: (212) 852-1625
If to the Rating Agencies, to:
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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 distribution in full of all
amounts due to the Class A and Class B Certificateholders, after a payment
default on the Underlying Securities, (ii) the exchange of all outstanding Class
A and Class B Certificates for Underlying Securities pursuant to one or more
Optional Exchanges, (iii) the distribution in full of all amounts due to Class A
and Class B Certificateholders on the Final Scheduled Distribution and (iv) the
sale of the Underlying Securities by the Trustee in accordance with Section
14(b), below, and the distribution of the proceeds from such sale to the
Certificateholders. Upon termination of the Trust, the Trust Certificates will
be fully redeemed. To the extent that the provisions of this Section 13 conflict
with Section 10.01 of the Standard Terms, the former shall control.
Section 14. Sale of Underlying Securities. (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 the
Underlying Securities to pay such Extraordinary Trust Expenses.
(b) If the Underlying Securities Issuer ceases to file
periodic reports under the Exchange Act and is not eligible to use Form S-3 for
a primary common stock offering, the Trustee, upon receipt of notice thereof,
shall sell all of the Underlying Securities and distribute
<PAGE>
12
the proceeds from such sale pro rata among the Class A Certificateholders and
Class B Certificateholders in accordance with the Allocation Ratio.
Section 15. Amendments. (a) Subject to the Rating Agency
Condition (as defined in the Standard Terms), the Depositor may, by an amendment
that does not require the consent of the Certificateholders, deposit additional
Underlying Securities into the Trust and the Trust, without the consent of the
Holders, may issue additional Class A Certificates in an initial Notional Amount
and Class B Certificates in a principal amount at maturity corresponding to the
aggregate principal amount of additional Underlying Securities so deposited.
(b) Sections 11.01(a)(i) and (x) of the Standard Terms are
hereby deleted in their entirety and replaced to read as follows:
(i) to cure any error or ambiguity;
(x) to add, change or eliminate any other provisions with
respect to matters or questions arising under this Trust Agreement; provided,
however, that such additions, changes or eliminations do not, as evidenced by an
Opinion of Counsel, have a material adverse effect on the interests of any
Certificateholders.
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 promptly shall notify each Certificateholder
of record as of such date and the Ratings Agencies of such proposed amendment,
modification, waiver or solicitation. The Trustee shall request instructions
from the Certificateholders as to whether or not to consent to or vote to accept
such amendment, modification, waiver or solicitation. The Trustee shall consent
or vote, or refrain from consenting or voting, in the same proportion (based on
the relative outstanding 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, after weighing the votes of the
Class A Certificateholders and the votes of the Class B Certificateholders
according to the Allocation Ratio; 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
<PAGE>
13
(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, other than any demand to accelerate the
Underlying Securities, except in the event of a default under the
Underlying Securities Indenture or an event that with the passage of
time would become an event of default under the Underlying Securities
and only with the consent of 100% of the outstanding Class A and Class
B Certificateholders,
(iii) that would constitute a demand to accelerate the
Underlying Securities, except in the event of a default under the
Underlying Securities Indenture or an event that with the passage of
time would become an event of default under the Underlying Securities
Indenture and then only with the consent of Certificateholders
representing 66 2/3% of the outstanding Class A and Class B
Certificates and receipt by the Trustee of the Opinion of Counsel
described in (i) above, or
(iv) 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 or an
event that with the passage of time would become an event of default
under the Underlying Securities Indenture and then only with the
consent of Certificateholders representing 66 2/3% of the outstanding
Class A and Class B Certificates and receipt by the Trustee of the
Opinion of Counsel described in (i) above.
The Trustee shall have no liability for any failure to act
resulting from Certificateholders' late return of, or failure to return,
directions requested by the Trustee from the Certificateholders.
If an event of default under the Underlying Securities
Indenture occurs and is continuing, and if directed by the outstanding Class A
and Class B Certificateholders as described above, 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. Grantor Trust Status. Notwithstanding any
provision in the Standard Terms to the contrary, the Trustee, the
Certificateholders, or any other person may not act or refrain from acting, by
vote or otherwise, in a manner that is inconsistent with the status of the Trust
as a grantor trust for federal income tax purposes.
<PAGE>
14
[INTENTIONALLY LEFT BLANK]
<PAGE>
15
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/ Bradley N. Liebmann
-----------------------------------
Name: Bradley N. Liebmann
Title: Secretary
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>
SCHEDULE I
PUBLIC STEERS(R) TRUST CERTIFICATES, SERIES 1998 HLT-1
UNDERLYING SECURITIES SCHEDULE
Underlying Securities: $26,751,000 (deposited on October
15, 1998) and $9,887,000 (deposited
on February 18, 1999) aggregate
principal amount of 7.95% Debentures
due April 15, 2007.
Underlying Securities Indenture: The indenture dated April 15, 1997
(the "Underlying Securities
Indenture") between the Underlying
Securities Issuer and the Bank of
New York providing for the issuance
of debt securities by the Underlying
Securities Issuer.
Underlying Securities Issuer: Hilton Hotels Corporation, a
Delaware corporation.
Underlying Securities 432848AH2
CUSIP Number:
Underlying Securities
Original Issue Date: April 15, 1997
Underlying Securities
Principal Amount
Originally Issued: $375,000,000.
Underlying Securities
Listing: None.
Underlying Securities
Registration: 333-18523.
Principal Amount of
Underlying Securities
not Granted to the Trust: $338,362,000.
Underlying Securities
Maturity Date: April 15, 2007.
Underlying Securities
Principal Payment Date: April 15, 2007.
Underlying Securities
Interest Rate: 7.95% per annum.
<PAGE>
I-2
Underlying Securities
Interest Payment Dates: April 15 and October 15, commencing
October 15, 1997.
Underlying Securities
Record Dates: The close of business on April 1
and October 1, as the case may be,
immediately preceding each
Underlying Securities Interest
Payment Date.
Underlying Securities
Ranking: Senior unsecured obligations of the
Underlying Securities Issuer.
Underlying Securities
Collateral: None.
Underlying Securities
Amortization: None.
Underlying Securities
Interest Accrual Periods: Semiannual.
Underlying Securities
Authorized Denomination
and Specified Currency: $1,000.
Underlying Securities
Rating as of Closing: "Baa2" by Moody's and "BBB" by S&P.
Underlying Securities Form: Book-entry debt security with DTC.
