<PAGE>
Exhibit 4.1
TRUST AGREEMENT
between
NATIONAL FINANCIAL SECURITIES CORPORATION,
as Depositor,
and
-----------------------------------------------,
as Trustee
for Trust Certificates issued by
Financial Income Securities Trust NFSC 2000-_ for [UNDERLYING SECURITIES]
<PAGE>
FINANCIAL INCOME SECURITIES TRUST NFSC 2000-_ FOR
[UNDERLYING SECURITIES]
TRUST AGREEMENT
This Trust Agreement (this "Series Trust Agreement"), dated as
of_______ __, 2000, between National Financial Securities Corporation, as
Depositor, and ___________________, as Trustee, for $__,000,000 Trust
Certificates for [UNDERLYING SECURITIES] (the "Certificates"), incorporates by
reference the Standard Terms and Provisions of Series Trust Agreement (the
"Standard Terms") attached as Exhibit B hereto, and is governed by the Standard
Terms as fully as if set forth herein at length. All capitalized terms not
defined herein shall have the same meaning as set forth in the Standard Terms.
W I T N E S S E T H:
SECTION 1. A Trust is hereby created under the laws of the State of
[New York] and in the manner specified in Article II of the Standard Terms for
the benefit of Holders of the Certificates. The assets of the Trust shall
consist of the securities (referred to herein and in the Standard Terms as the
"Underlying Securities") described in Exhibit A hereto, all distributions
thereon after the date hereof, all right, title and interest in and to such
distributions and all other rights and privileges of the Holders of the
Certificates under this Series Trust Agreement.
SECTION 2. The name of the Trust is Financial Income Securities Trust
NFSC 2000-_ for [Underlying Securities].
SECTION 3. The Certificates shall be issued as a single class in the
amount set forth in Exhibit A hereto; shall have the standard terms set forth in
the Standard Terms; and shall have the nonstandard terms set forth in Exhibit A
hereto. Certificates shall be issued in substantially the form of the Form of
Certificate set forth in Exhibit C to this Series Trust Agreement. The
Certificates shall evidence fractional interests in the assets of the Trust,
payable solely from payments received by the Trustee attributable to the
Underlying Securities.
[SECTION 4. The Depositor hereby authorizes and directs the Trustee to
execute and deliver a letter of representations, in the form customarily
provided to DTC, from the Trustee and the Depositor dated the date of delivery
of the Certificates (the "Letter of Representations"). ]
4.1-2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Series Trust
Agreement to be executed by their respective duly authorized officers as of the
date first above written.
NATIONAL FINANCIAL SECURITIES CORPORATION,
as Depositor
By __________________________________
Name:
Title:
[_________________________],
as Trustee
By __________________________________
Name:
Title:
4.1-3
<PAGE>
Exhibit A - Description of the Underlying Securities and the Certificates;
Description of Certain Terms Used in the Agreement
Exhibit B - Standard Terms and Provisions of Series Trust Agreement
Exhibit C - Form of Certificate
Exhibit D - Officer's Certificate of the Trustee
4.1-4
<PAGE>
EXHIBIT A
TO SERIES TRUST AGREEMENT
DESCRIPTION OF THE UNDERLYING SECURITIES AND THE CERTIFICATES; DESCRIPTION OF
CERTAIN TERMS USED IN THE AGREEMENT
Part I - Description of the Underlying Securities
Issuer: [___________________]
Underlying Securities: [_______________________________]
Dated: [_________]
Original Principal Maturity Date: [_________]
Original Par Value Amount Issued: $[_________]
CUSIP Number: [_________]
Stated Interest Rate: [_________]%
Interest Payment Dates: [_________]
First Call Date: [_________]
Redemption Price: The Underlying Securities are redeemable at any time on or
after [_________], in whole or in part from time to time on
not less than __ nor more than __ days' notice at the
following redemption prices (expressed in percentages of the
principal amount) during the 12-month period ending
[_________]of each year:
Year Price ($)
---- ---------
and $__ on or after[_________], together, in each
case, with accrued interest to the redemption date.
<PAGE>
Mode of Payment of Underlying Securities: [By credit to the account of the
Holder at DTC.]
Record date of Underlying Securities: [_________]
Event of Default with respect to payment of interest and principal: [An event
of default under the Indenture exists upon (i) the default in the payment
of interest for 60 days, or (ii) the default in payment of principal (or
premium, if any) at maturity.]
Par Value Amount of Underlying Securities Deposited Under Series Trust
Agreement: $__,000,000
[The Underlying Securities will be held by the Trustee as Book-Entry Credits at
DTC.]
Part II - Description of the Certificates
Classes of Certificates: Pooled Certificates
Aggregate Face Amount of Pooled Certificate: $__,000,000
Item Aggregate
Face Minimum
Offered Number Due Date CUSIP Number Amount Offered Denominations
-------------- -------- ----------- -------------- -------------
1 [_________] [_________] $__,000,000 $__
Part III - Definitions of Certain Terms Used in the Agreement
Authorized Denominations (Section 1.01) $__
Certificate Principal Amount (Section 1.01) $__
Closing Date (Section 1.01) [_________].
Corporate Trust Office (Section 1.01) [_________]
Depositor Address (Section 9.04) National Financial Securities Corporation
909 East Main Street
Richmond, Virginia 23219
Distribution Dates (Section 1.01) [_________]1 and [_________] 1 of each year,
commencing[_________].
Indenture (Section 1.01) [_________]
A-2
<PAGE>
Indenture Trustee (Section 1.01) [_________]
Trustee Address (Section 9.04) [_________]
Rating Agency (Section 1.01) Each of [Moody's Investors Service, Inc.] and
[Standard & Poor's Ratings Group]
Rating Agency Address (Section 9.04) [Moody's Investors Service, Inc.
99 Church Street
New York, NY 10007]
[Standard & Poor's Ratings Group
26 Broadway, 15th Floor
New York, NY 10004]
Retained Amount (Section 1.01) Interest accrued on the Underlying Securities
from, and including, [_________]to, but excluding, the Closing Date,
equal to $[_________]
A-3
<PAGE>
EXHIBIT B
TO SERIES TRUST AGREEMENT
================================================================================
STANDARD TERMS AND PROVISIONS OF SERIES TRUST AGREEMENT
between
NATIONAL FINANCIAL SECURITIES CORPORATION,
as Depositor,
and
the Trustee
================================================================================
<PAGE>
Relating to Trust Certificates of the Series identified in the Series
Trust Agreement; Reconciliation and Tie between the Trust Indenture Act of 1939
and Agreement Provisions*
Trust Indenture Act Section Agreement Section
310(a)(1) 5.01
(a)(2) 5.01
(a)(3) Not Applicable
(a)(4) 5.02
(b) 5.11, 5.01
(c) Not Applicable
311(a) 5.10
(b) 5.10
312(a) 6.01, 6.02(a)
(b) 6.02(b)
(c) 6.02(c)
313(a) 6.03
(b) 6.03
(c) 6.03
(d) 6.03
314(a) 5.09(a), 5.09(b)
(b) 5.09(c), 5.09(d)
(c)(1) 5.09(f)
(c)(2) 5.09(f)
(c)(3) 5.09(f)
(d)(1) 5.09(e)
(d)(2) 5.09(e)
(d)(3) 5.09(e)
(e) 5.09(f)
315(a) 5.08
(b) 5.02
(c) 5.02
(d) 5.08
(d)(1) 5.08
(d)(2) 5.08
(d)(3) 5.08
(e) 5.13
316(a)(1)(A) 5.04
(a)(1)(B) 5.05
(a)(2) Not Applicable
(b) 2.08, 4.01
(c) 2.08, 2.09
(a) 5.03
317(b) 4.03
----------------------
* This reconciliation and tie shall not, for any purpose, be deemed to be part
of the within agreement.
B-ii
<PAGE>
3.18(a) 9.03
B-iii
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I DEFINITIONS............................................................................................ 1
Section 1.1 Certain Definitions........................................................................ 1
ARTICLE II CREATION OF TRUST; DELIVERY AND CUSTODY OF BONDS; FORM OF CERTIFICATES; EXECUTION AND DELIVERY,
SURRENDER AND REDEMPTION OF CERTIFICATES................................................................ 6
Section 2.1 Creation of Trust; Delivery and Custody of Underlying Securities; Execution................ 6
Section 2.2 Form of Certificates....................................................................... 8
Section 2.3 Registration and Registration of Transfer and Exchange of Certificates..................... 8
Section 2.4 Limitations on Execution and Delivery, Surrender and Registration of Transfer and Exchange
of Certificates................................................................................. 9
Section 2.5 Mutilated, Destroyed, Lost or Stolen Certificates.......................................... 9
Section 2.6 Persons Deemed Owners...................................................................... 9
Section 2.7 Cancellation and Destruction of Surrendered Certificates................................... 9
Section 2.8 Book-Entry................................................................................. 9
Section 2.9 Action or Consent of Holders............................................................... 11
Section 2.10 Transfer of Certificates Held by DTC to Successor Depository............................... 12
Section 2.11 Temporary Certificates..................................................................... 13
ARTICLE III CERTAIN OBLIGATIONS OF HOLDERS OF CERTIFICATES; DEPOSITOR'S WARRANTIES............................... 13
Section 3.1 Filing Proofs, Certificates and Other Information.......................................... 13
Section 3.2 Payment of Taxes or Other Governmental Charges............................................. 13
Section 3.3 Depositor's Warranties..................................................................... 14
ARTICLE IV PAYMENT OF INTEREST AND PRINCIPAL; CUSTODY OF PROCEEDS OF INTEREST AND PRINCIPAL PAYMENTS............. 14
Section 4.1 Payment of Interest; Payment of Principal; Mandatory Exchange of Callable Principal
Certificates and Callable Stripped Underlying Security Certificates............................. 14
Section 4.2 Segregation of Moneys Received from Issuers in Respect of Underlying Securities............ 17
Section 4.3 Paying Agent............................................................................... 17
ARTICLE V THE TRUSTEE AND THE DEPOSITOR.......................................................................... 17
Section 5.1 Eligibility of Trustee; Disqualification................................................... 17
Section 5.2 Trustee's Duties on Default; No Liability of the Trustee or the Depositor on the Underlying
Securities...................................................................................... 17
Section 5.3 Collection of Indebtedness and Suits for Enforcement by Trustee; Distribution of Amounts
Received in Respect of Defaulted Underlying Securities.......................................... 18
Section 5.4 Control by Holders......................................................................... 20
Section 5.5 Waiver of Past Defaults.................................................................... 20
Section 5.6 Maintenance of Offices and Agencies by the Trustee......................................... 20
Section 5.7 Prevention of or Delay in Performance by the Trustee or the Depositor...................... 20
Section 5.8 Liability of the Trustee and the Depositor................................................. 20
Section 5.9 Obligation of the Depositor................................................................ 23
Section 5.10 Preferential Collection of Claims Against Depositor........................................ 26
Section 5.11 Resignation and Removal of the Trustee; Appointment of Successor Trustee................... 26
Section 5.12 Indemnification by the Depositor........................................................... 27
</TABLE>
B-iv
<PAGE>
<TABLE>
<S> <C>
Section 5.13 Undertaking for Costs..................................................................... 29
Section 5.14 Charges and Expenses...................................................................... 29
Section 5.15 Trustee Reports........................................................................... 29
ARTICLE VI HOLDERS' LISTS AND REPORTS.......................................................................... 30
Section 6.1 Depositor to Furnish Names and Addresses of Holders to Trustee............................ 30
Section 6.2 Preservation of Information, Communications to Holders.................................... 30
Section 6.3 Reports by Trustee........................................................................ 30
ARTICLE VII AMENDMENT AND TERMINATION........................................................................... 31
Section 7.1 Amendment................................................................................. 31
Section 7.2 Termination............................................................................... 32
ARTICLE VIII REDEMPTION OF CERTIFICATES......................................................................... 32
Section 8.1 Redemption................................................................................ 32
Section 8.2 Notice of Redemption...................................................................... 33
ARTICLE IX MISCELLANEOUS....................................................................................... 33
Section 9.1 Exclusive Benefit of Parties and Holders of Certificates; Effective Date.................. 33
Section 9.2 Invalidity of Provisions.................................................................. 33
Section 9.3 Conflict with Trust Indenture Act......................................................... 33
Section 9.4 Notices................................................................................... 34
Section 9.5 Governing Law; Forum...................................................................... 34
Section 9.6 Headings.................................................................................. 34
Section 9.7 Covenant of Depositor and Trustee Not to Place Trust in Bankruptcy........................ 34
Section 9.8 Trust Not to Merge........................................................................ 34
Section 9.9 Incurrence of Indebtedness................................................................ 35
</TABLE>
B-v
<PAGE>
STANDARD TERMS AND PROVISIONS OF SERIES TRUST AGREEMENT
-------------------------------------------------------
This document constitutes Standard Terms and Provisions of Series Trust
Agreement which are to be incorporated by reference in, and attached as Exhibit
B to, one or more series trust deposit agreements (each, a "Series Trust
Agreement") by and among National Financial Securities Corporation, as
Depositor, and the trustee designated therein, as Trustee.
Each Series Trust Agreement will create a trust under the laws of the
State of New York to hold securities (the "Underlying Securities") and all
distributions thereon and will provide for the creation, execution and delivery
of trust certificates (the "Certificates").
These Standard Terms shall be of no force and effect unless and until
incorporated by reference into a Series Trust Agreement.
The following terms and provisions shall govern the Certificates
subject to contrary or additional terms and provisions expressly set forth in a
Series Trust Agreement, which contrary or additional terms and provisions of the
Series Trust Agreement shall control.
ARTICLE I DEFINITIONS
Section 1.1 Certain Definitions.
-------------------
All capitalized terms used herein shall have the meaning set forth in
this Section 1.01 unless the context otherwise requires:
The term "Accreted Value" shall mean, for any Coupon Certificate,
--------------
Principal Certificate, Callable Principal Certificate or Stripped Coupon
Certificate, (a) the original issue price for such Certificate as set forth in
Exhibit A to the Series Trust Agreement, plus (b) an amount equal to an
investment return thereon accrued to the date of determination calculated based
on a semiannual compounding rate, on the basis of a 360 day year composed of
twelve 30-day months, equal to the original yield to maturity on the Closing
Date on such Certificate as set forth in Exhibit A to the Series Trust
Agreement. With respect to the allocation of proceeds of the Underlying
Securities received in connection with a payment default on the Underlying
Securities, the relevant determination date shall be the Petition Date. With
respect to the determination of Accreted Value in connection with a vote
relating to the Underlying Securities, the relevant determination date shall be
a date determined by the Trustee, which date shall be within fifteen Business
Days of the date the Trustee casts its votes as provided herein.
The term "Agreement" shall mean the trust deposit agreement consisting
---------
of the Series Trust Agreement into which is incorporated by reference the
Standard Terms, including all exhibits, schedules, appendices, supplements and
amendments to each.
The term "Authorized Denominations" for each class of Certificates
------------------------
shall mean the dollar amount, and greater multiples thereof (or of such other
dollar amount specified in the Series Trust Agreement), set forth in the Series
Trust Agreement.
<PAGE>
The term "Authorized Officer" shall mean any officer of the Depositor
------------------
who is authorized to act for the Depositor in matters relating to the Depositor.
The term "Available Information Event" shall mean that the Issuer has
---------------------------
suspended its Exchange Act reporting requirements at a time when the Exchange
Act reporting requirements with respect to the Certificates have not been
suspended or terminated.
The term "Beneficial Owner" shall mean any purchaser of Certificates
----------------
which are held through a Direct or Indirect DTC Participant, as such terms are
used in the rules and regulations of DTC.
The term "Book-Entry Credit" shall mean the evidence of the deposit by
-----------------
the Trustee of one or more Underlying Securities in a separate account of the
Trustee, as Trustee under this Agreement, identified in the Series Trust
Agreement.
The term "Business Day" shall mean a day which is not a day when
------------
banking institutions or trust companies in New York City are authorized or
obligated by law, regulation or executive order to remain closed.
The term "Callable Principal" shall mean the right to receive (i) the
------------------
payment, whether upon stated maturity or upon earlier redemption, of the
Principal and redemption premium, if any, of Underlying Securities which are
redeemable at the option of the Issuer thereof prior to stated maturity, and
(ii) the Interest relating to such Underlying Securities with respect to
Interest Payment Dates after the First Call Date for such Underlying Securities,
in each case subject to Section 5.03(b) hereof.
The term "Certificate" shall mean a certificate of a class of
-----------
certificates to be issued under this Agreement, which classes are specified in
the Series Trust Agreement for the series. Such classes may consist of:
(i) Coupon Certificates, which entitle the Holders thereof, in the
aggregate, to the Interest payable on a single Interest Payment Date on
or before the First Call Date for the Underlying Securities, or the
stated maturity date in the case of Underlying Securities not
redeemable (otherwise than in connection with a default or
acceleration) at the option of the Issuer thereof prior to stated
maturity:
(ii) Principal Certificates, which entitle the Holders thereof, in the
aggregate, to Principal, payable at the stated maturity of the
Underlying Securities, of Underlying Securities which are not
redeemable (otherwise than in connection with a default or
acceleration) at the option of the Issuer thereof prior to stated
maturity.
(iii) Callable Principal Certificates, which entitle the Holders
thereof, in the aggregate, to the Callable Principal relating to the
Underlying Securities.
(iv) Stripped Coupon Certificates, which entitle the Holders thereof,
in the aggregate, to a specified portion (less than 100%) of the
Interest payable on a single Interest Payment Date on or before the
First Call Date for the Underlying Securities, or the stated maturity
date in
B-2
<PAGE>
the case of Underlying Securities not redeemable (otherwise than in
connection with a default or acceleration) at the option of the Issuer
thereof prior to stated maturity.
(v) Stripped Underlying Security Certificates, which entitle the
Holders thereof, in the aggregate, to Principal, payable at the stated
maturity of the Underlying Securities, of Underlying Securities which
are not redeemable (otherwise than in connection with a default or
acceleration) at the option of the Issuer thereof prior to stated
maturity, and to a specified portion (less than 100%) of Interest due
on the Underlying Securities on each Interest Payment Date on or prior
to the First Call Date.
(vi) Callable Stripped Underlying Security Certificates, which entitle
the Holders thereof, in the aggregate, to the Callable Principal
relating to the Underlying Securities, and to a specified portion (less
than 100%) of Interest due on the Underlying Securities on each
Interest Payment Date on or prior to the First Call Date.
(vii) Pooled Certificates, which entitle the Holders thereof to all the
interest payments on the Underlying Securities, all the principal
payments on the Underlying Securities and any related premium payable
upon early redemption of the Underlying Securities less any Retained
Amount; provided, that any designation of classes of Certificates made
in the Series Trust Agreement shall consist of only one of the
following options, designated by letters (a) - (e): (a) Coupon
Certificates and Principal Certificates, (b) Coupon Certificates and
Callable Principal Certificates, (c) Stripped Coupon Certificates and
Stripped Underlying Security Certificates, (d) Stripped Coupon
Certificates and Callable Stripped Underlying Security Certificates, or
(e) Pooled Certificates.
The term "Certificate Register" shall have the meaning specified in
--------------------
Section 2.03 hereof.
The term "Closing Date" shall mean the date set forth and designated as
------------
such in the Series Trust Agreement.
The term "Commission" shall mean the Securities and Exchange
----------
Commission.
The term "Corporate Trust Office" shall mean the principal office of
----------------------
the Trustee as identified in the Series Trust Agreement.
The term "Depositor" shall mean National Financial Securities
---------
Corporation, a Delaware corporation, and any successor as Depositor hereunder.
The term "Designated Office in New York City," when used with respect
----------------------------------
to the Trustee, shall mean an office maintained in accordance with Section 5.06
hereof and designated by the Trustee.
The term "DTC" shall mean The Depository Trust Company, a clearing
---
agency registered with the Commission, its successor or successors, and its
nominee or nominees.
The term "Exchange Act" shall mean the Securities Exchange Act of 1934,
------------
as amended.
B-3
<PAGE>
The term "First Call Date" shall mean, for any Underlying Security, the
---------------
first date such Underlying Security can be redeemed at the option of the Issuer
thereof, which date shall be specified in the Series Trust Agreement.
The term "Holder" shall mean a Person in whose name a Certificate is
------
registered in the Certificate Register.
The term "Independent Certificate" shall mean a certificate of a
-----------------------
non-affiliated accountant, engineer, appraiser or other expert, as required by
the TIA.
The term "Indenture Trustee" shall mean the trustee or other fiduciary
-----------------
for the Underlying Securities.
The term "Interest" shall mean the right to receive the interest
--------
payable on the Underlying Securities on each Interest Payment Date, subject to
Section 5.03(b) hereof.
The term "Interest Payment Dates" shall mean the dates on which
----------------------
interest payments are due on the Underlying Securities as specified in the
Series Trust Agreement.
The term "Issuer" shall mean the issuer of the Underlying Securities
------
described in Exhibit A to the Series Trust Agreement.
The term "Issuer Payment Default" shall have the meaning specified in
----------------------
Section 5.03 hereof.
The term "Letter of Representations" shall mean the letter of
-------------------------
representations from the Depositor and the Trustee to DTC with respect to the
Certificates held at DTC.
The term "Officer's Certificate of the Depositor" shall mean a
--------------------------------------
certificate signed by any Authorized Officer of the Depositor and delivered to
the Trustee. Unless otherwise specified, any reference in this Agreement to an
Officer's Certificate of the Depositor shall be to an Officer's Certificate of
any Authorized Officer of the Depositor.
The term "Officer's Certificate of the Trustee" shall mean the
------------------------------------
certificate of the Trustee in the form attached as Exhibit D to the Series Trust
Agreement.
The term "Opinion of Counsel" shall mean one or more written opinions
------------------
of counsel who may, except as otherwise expressly provided in this Agreement, be
employees of or counsel to the Depositor and who shall be satisfactory to the
Trustee, and which opinion or opinions shall be addressed to the Trustee as
Trustee, shall comply with any applicable requirements of this Agreement, and
shall be in form and substance satisfactory to the Trustee.
The term "Outstanding Certificates" shall mean, as of the date of
------------------------
determination, all Certificates theretofore authenticated and delivered under
this Agreement except:
(i) Certificates theretofore canceled by the Certificate registrar
or delivered to the Certificate registrar for cancellation;
B-4
<PAGE>
(ii) Certificates or portions thereof for which money in the
necessary amount for payment thereof has been theretofore deposited
with the Trustee or any Paying Agent in trust for the Holders of such
Certificates (provided, however, that if such Certificates are to be
redeemed, notice of such redemption has been duly given pursuant to
this Agreement or provision therefor, satisfactory to the Trustee, has
been made); and
(iii) Certificates in exchange for which or in lieu of which other
Certificates have been authenticated and delivered pursuant to this
Agreement, unless proof satisfactory to the Trustee is presented that
any such Certificates are held by a bona fide purchaser;
provided that in determining whether the Holders have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Certificates
owned by the Depositor, the Trustee or any Affiliate of any of the foregoing
Persons shall be disregarded and for purposes of determining the requisite
amount of Outstanding Certificates shall be deemed not to be Outstanding
Certificates, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Certificates that the Trustee knows to be so owned shall
be so disregarded.
The term "Participant" means an entity maintaining a custodial account
-----------
in its own name with DTC.
The term "Paying Agent" shall mean the Trustee or any other Person that
------------
meets the eligibility standards for the Trustee specified in Section 5.01 and is
authorized to make payments of Principal or Interest on behalf of the Trustee.
The term "Person" means any individual, corporation, limited liability
------
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
The term "Petition Date" shall mean (i) the date on which a bankruptcy
-------------
petition is filed by or against the Issuer of the Underlying Securities or (ii)
the date of commencement of any other similar proceeding, as applicable.
The term "Principal" shall mean the right to receive the principal due
---------
on the Underlying Securities, subject to Section 5.03(b) hereof.
The term "Proceeding" shall mean any suit in equity, action at law or
----------
other judicial or administrative proceeding.
The term "Rating Agency" shall mean each rating agency which is
-------------
identified in Exhibit A to the Series Trust Agreement.
The term "Redemption Date" shall mean, with respect to any Underlying
---------------
Securities to be redeemed, the date fixed by the Issuer thereof for such
redemption.
The term "Responsible Officer" shall mean, with respect to the Trustee,
-------------------
any officer within the Corporate Trust Office of the Trustee, including any
Senior Vice President, Vice President, Assistant Vice President, Secretary,
Assistant Secretary, or any other officer of the Trustee
B-5
<PAGE>
customarily performing functions similar to those performed by any of the above-
designated officers and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer's knowledge of
and familiarity with the particular subject.
The term "Retained Amount" shall mean the amount, if any, described in
---------------
Exhibit A to the Series Trust Agreement, which amount shall be held by the
Trustee in trust for the benefit of the Depositor and shall be paid by the
Trustee to the Depositor in accordance with Section 4.01 hereof.
The term "Series" shall mean any series of Certificates identified in a
------
Series Trust Agreement.
The term "Series Trust Agreement" shall mean the particular series
----------------------
trust deposit agreement between the Depositor and the Trustee into which these
Standard Terms have been incorporated.
The term "Standard Terms" shall mean this Standard Terms and Provisions
--------------
of Series Trust Agreement between National Financial Securities Corporation, as
Depositor, and the Trustee.
The term "TIA" shall mean the Trust Indenture Act of 1939, as amended.
---
The term "Trust" shall mean the trust established by this Agreement for
-----
the benefit of the Holders of the Certificates under the laws of the State of
New York.
The term "Trustee" shall mean the institution acting as trustee with
-------
whom the Depositor has entered into the Series Trust Agreement.
The term "Underlying Security" shall mean, with respect to the issuance
-------------------
of Certificates hereunder, the Underlying Securities specified in the Series
Trust Agreement relating to such Certificates in the aggregate principal amount
so specified.
The term "Voting Rights" shall mean voting rights on the Certificates
-------------
apportioned as required by Section 2.09 hereof.
ARTICLE II CREATION OF TRUST; DELIVERY AND CUSTODY OF BONDS; FORM OF
CERTIFICATES; EXECUTION AND DELIVERY, SURRENDER AND REDEMPTION OF CERTIFICATES
Section 2.1 Creation of Trust; Delivery and Custody of Underlying Securities;
-----------------------------------------------------------------
Execution.
---------
The Trust shall be established by the Depositor by execution and
delivery of the Series Trust Agreement and the deposit of the Underlying
Securities pursuant thereto. The sole asset of the Trust shall be the Underlying
Securities deposited by the Depositor and any other related property specified
in the Series Trust Agreement. The Certificates shall evidence fractional
interests in designated portions of the assets of the Trust. The income received
by, and the assets of, the Trust shall be distributed solely in accordance with
this Agreement. The Depositor shall, by book-entry credit or otherwise,
irrevocably deliver the Underlying Securities to the Trustee and, concurrently
therewith, the Trustee shall, in accordance with the provisions of this
Agreement, execute and deliver to the Depositor, or such Person or Persons as
the Depositor may designate by written
B-6
<PAGE>
instruction, the classes of Certificates identified in the Series Trust
Agreement, evidencing the aggregate amount, in Authorized Denominations, of the
Underlying Securities so delivered to the Trustee. The Depositor shall also, in
connection with the Series Trust Agreement, enter into a separate agreement with
the Trustee, satisfactory to the Trustee, providing for the payment of the
charges and expenses of the Trustee in respect of such Certificates.
The Trustee shall accept the Underlying Securities so delivered as
trustee for the Holders of the Certificates, which shall be delivered hereunder
to evidence the interests of the Holders in the Underlying Securities, and shall
hold the Underlying Securities as provided hereunder. The Underlying Securities
shall be deposited by Book-Entry Credit in an account maintained on behalf of
the Trustee at DTC, unless the Series Trust Agreement specifies that the Trustee
shall hold the Underlying Securities (i) in a special trust account created by
separate recordation on its books, separate from all other assets of the
Trustee, or (ii) in some other manner. Separate subaccounts of any such special
trust account shall be established for each series of Certificates.
The Trustee shall hold all the Underlying Securities delivered to it
pursuant to this Agreement in trust for the Holders, identified and held
separate and apart from the general assets of the Trustee. The account of the
Trustee in which the Underlying Securities are held shall not contain any
property of the Trustee in its individual capacity and shall contain only
property held by the Trustee as fiduciary. The Trustee agrees that it does not
have the authority to assign, transfer, encumber, pledge, sell, set-off or
otherwise dispose of any of the Underlying Securities or any interests therein
except as provided hereunder or as required by law.
The Trustee acknowledges that it is not the beneficial owner of the
Underlying Securities and that it holds the Underlying Securities solely as
trustee for the Holders pursuant to this Agreement. Interest and principal
payments on the Underlying Securities held in the trust account will not be
subject to any right, charge, security interest, lien or claim of any kind in
favor of the Trustee, the Depositor or any Person claiming through either of
them.
The representations and covenants contained in the Officer's
Certificate of the Trustee delivered in connection with the issuance of the
Certificates shall be deemed to be incorporated by reference herein, as fully as
if set forth in full herein.
A reasonable time prior to the delivery of Underlying Securities to the
Trustee, the Depositor shall furnish the Trustee with written instructions as to
the name in which the Certificates evidencing interests in such Underlying
Securities shall initially be registered, the denominations in which such
Certificates shall initially be delivered, the Persons and addresses to whom
such Certificates are to be delivered and such other information as may be
requested by the Trustee in connection with the execution and delivery of such
Certificates. Each class of Certificates shall evidence the ownership by the
Holders thereof of Interest, Principal, or Callable Principal (or portions
thereof), as the case may be, on the Underlying Securities, less any Retained
Amount, to the extent required by the terms of such class of Certificates.
Underlying certificates which are not held by book-entry credit at an
account maintained on behalf of the Trustee at DTC shall be held by the Trustee
at its Designated Office in New York City or at such other place or places as
the Trustee shall determine.
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Section 2.2 Form of Certificates.
--------------------
Certificates shall be issued in registered form only and shall be
typewritten or printed on safety paper. The classes of Certificates to be issued
hereunder shall be identified in the Series Trust Agreement and shall be
substantially in the forms set forth in Exhibit C thereto, in each case with
appropriate insertions, modifications and omissions, as therein and herein so
provided. Certificates shall be executed by the Trustee by the manual signature
of a duly authorized signatory of the Trustee. No Certificate shall be entitled
to any benefits under this Agreement or be valid or obligatory for any purpose,
unless it shall have been executed manually by the Trustee by the signature of a
duly authorized signatory. The Trustee shall record in the Certificate Register
each Certificate so signed and delivered as herein provided.
The Authorized Denominations for each class of Certificates shall be
the dollar amount, and greater multiples thereof (or of such other dollar amount
specified in the Series Trust Agreement), set forth in the Series Trust
Agreement.
Certificates may be endorsed with or have incorporated in the text
thereof such legends or recitals not inconsistent with the provisions of this
Agreement as may be required by the Trustee or required to comply with any
applicable law or any regulation thereunder.
Section 2.3 Registration and Registration of Transfer and Exchange of
---------------------------------------------------------
Certificates.
------------
The Trustee shall keep at its Designated Office in New York City a
register (the register maintained in such office being herein sometimes referred
to as the "Certificate Register") in which, subject to such reasonable
regulations as it may prescribe, the Trustee shall provide for the registration
of Certificates and for the registration of transfers or exchanges of
Certificates.
Upon surrender for registration of transfer of any Certificate at the
Trustee's Designated Office in New York City, the Trustee shall execute and
deliver, in the name of the designated transferee or transferees, one or more
Certificates of the same class and series, of any Authorized Denominations and
of a like aggregate amount.
At the option of the Holder, Certificates may be exchanged for other
Certificates of the same class and series, of any Authorized Denominations and
of a like aggregate amount, upon surrender of the Certificates to be exchanged
at the Trustee's Designated Office in New York City. Whenever any Certificates
are so surrendered for exchange, the Trustee shall execute and deliver the
Certificates which the Holder making the exchange is entitled to receive.
All Certificates issued upon any registration of transfer or exchange
of Certificates shall evidence, to the extent indicated thereby, Interest,
Principal and/or Callable Principal (or portions thereof), as the case may be,
of Underlying Securities held by the Trustee hereunder and shall be entitled to
the same benefits under this Agreement as the Certificates surrendered upon such
registration of transfer or exchange.
Every Certificate presented for registration of transfer or for
exchange shall (if so required by the Trustee) be duly endorsed by, or be
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and duly executed by, the Holder thereof or such Holder's attorney duly
authorized in writing.
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Section 2.4 Limitations on Execution and Delivery, Surrender and Registration
-----------------------------------------------------------------
of Transfer and Exchange of Certificates.
----------------------------------------
As a condition precedent to the execution and delivery, surrender or
registration of transfer or exchange of any Certificate, the Trustee may require
payment, by the Holder requesting such action, of the then applicable service
charge of the Trustee and of a sum sufficient for reimbursement of any tax or
other governmental charge with respect thereto, may require the production of
proof reasonably satisfactory to it as to the Holder's residence and identity
and genuineness of any signature, may require the Holder to execute certificates
and to make such representations and assurances as the Trustee may reasonably
deem necessary or proper, and may also require compliance with such regulations,
if any, as the Trustee may reasonably establish consistent with the provisions
of this Agreement.
The surrender or registration of transfer or exchange of Certificates may
be suspended if any such suspension is deemed necessary or advisable by the
Trustee at any time or from time to time because of any requirement of law or of
any government or governmental body or commission, or under any provision of
this Agreement, or for any other reason which makes such surrender or
registration of transfer or exchange impracticable.
Section 2.5 Mutilated, Destroyed, Lost or Stolen Certificates.
-------------------------------------------------
In case any Certificate shall be mutilated, the Trustee in its discretion
may execute and deliver a Certificate of the same series, of like form and
tenor, and in the same denomination and bearing a number not contemporaneously
outstanding, in exchange and substitution for such mutilated Certificate. In
case any Certificate shall be destroyed, lost or stolen, the Trustee may execute
and deliver a Certificate of the same series, of like form and tenor, and in the
same denomination and bearing a number not contemporaneously outstanding, in
lieu of and in substitution for such destroyed, lost or stolen Certificate, only
upon (i) the filing by the Holder thereof with the Trustee of evidence
satisfactory to the Trustee of the destruction, loss or theft of such
Certificate and of the authenticity of such Holder's ownership thereof, and (ii)
the furnishing to the Trustee of reasonable indemnification satisfactory to it.
All expenses and charges associated with such indemnity and with the
preparation, execution and delivery of a new Certificate shall be borne by the
Holder of the Certificate mutilated, destroyed, lost or stolen.
Section 2.6 Persons Deemed Owners.
---------------------
Prior to due presentment of a Certificate for registration of transfer, the
Trustee and any agent of the Trustee may treat the Person in whose name such
Certificate is registered as the owner of such Certificate for the purpose of
receiving payment of such Certificate and for all other purposes whatsoever,
whether or not such Certificate be overdue, and neither the Trustee nor any
agent of the Trustee shall be affected by notice to the contrary.
Section 2.7 Cancellation and Destruction of Surrendered Certificates.
--------------------------------------------------------
All Certificates surrendered to the Trustee shall be canceled by the
Trustee. The Trustee is authorized to destroy such Certificates so canceled.
Section 2.8 Book-Entry.
----------
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(i) At the election of the Depositor, the Series Trust Agreement may
provide that (1) all Certificates of a series are to be held in DTC's book-
entry only system, (2) all Certificates of a series are to be issued in
definitive physical form, or (3) the Certificates (or any part thereof) are
to be issued or held in such other form as is specified in the Series Trust
Agreement.
(ii) Notwithstanding Section 4.01 hereof, when the registered Holder of
any or all of the Certificates is DTC, such Certificates shall be
registered in the name of Cede & Co., as nominee for DTC, and payment in
respect of any Interest, Principal or Callable Principal represented by any
Certificate shall be made on or after the corresponding Interest Payment
Dates, in the case of the payment of Interest, and on or after the
corresponding stated maturity date, in the case of the payment of
Principal, in each case after the Trustee shall have received the amounts
due from the Issuer of the Underlying Securities, by credit of same day
funds to the account indicated for Cede & Co. in the Certificate Register.
Payments received by the Trustee on or prior to 2:00 p.m., New York City
time, shall be credited to DTC that same day and payments received after
such time shall be credited the following Business Day. Notwithstanding any
other provisions in this Agreement, the right of the Holder of any
Certificate to receive any of the payments described above in this Section
2.08 (ii), and to institute suit for the enforcement of any such payment on
or after the date such payment is payable, shall not be impaired without
the consent of such Holder.
(iii) Certificates of which Cede & Co. shall be the Holder shall be
initially issued in the form of one or more separate single Certificates
for each separate class of Certificates identified in the Series Trust
Agreement to be issued hereunder, aggregating in each case to the amount of
each separate stated maturity of the Certificates, or in such other manner
as is required by DTC. Upon initial issuance, the ownership of each such
Certificate shall be registered in the Certificate Register in the name of
Cede & Co., as nominee for DTC. The Depositor and the Trustee may treat DTC
(or its nominee) as the sole and exclusive owner of each Certificate
registered in its name for the purposes of payment of Interest, Principal
and/or Callable Principal represented thereby, giving any notice permitted
or required to be given to Holders under this Agreement, registering the
transfer of such Certificate, obtaining any consent or other action to be
taken by Holders and for all other purposes whatsoever, and neither the
Depositor nor the Trustee shall be affected by any notice to the contrary.
Neither the Depositor nor the Trustee shall have any responsibility or
obligation to any Participant, any Person claiming a beneficial ownership
interest in such Certificate under or through DTC or any Participant or any
other Person that is not shown on the Certificate Register as being a
Holder of such Certificate, with respect to the accuracy of any records
maintained by DTC or any Participant; the payment by DTC or any Participant
of any amount in respect of Principal, Interest and/or Callable Principal
represented by such Certificate; any notice (or the timeliness thereof)
that is permitted or required to be given to Holders of such Certificate
under this Agreement; or any consent given or other action taken by DTC as
the Holder of such Certificate. Upon delivery by DTC to the Trustee of
written notice to the effect that DTC has determined to substitute a new
nominee in place of Cede & Co., and subject to the provisions of section
2.03 hereof limiting the obligations of the Trustee to register transfers
of or to exchange Certificates, the words "Cede & Co." in this Agreement
shall refer to such new nominee of DTC.
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<PAGE>
(iv) DTC may determine to discontinue providing its services with
respect to Certificates at any time by giving 90 days prior written notice
to the Depositor and the Trustee and discharging its responsibilities with
respect thereto under applicable law. Following receipt of such notice from
DTC, the Trustee shall promptly notify the Rating Agency. In connection
therewith, the Trustee and the Depositor will cooperate with DTC in taking
appropriate action after reasonable notice (a) to make available one or
more separate physical certificates evidencing the Certificates to any
Participant having Certificates credited to its DTC account or (b) to
arrange for another securities depository to maintain custody of physical
certificates evidencing such Certificates. Upon (1) the resignation of DTC
from its functions as depository in accordance herewith, provided that the
Depositor is unable to arrange for another securities depository to act as
successor to DTC, (2) the election by the Depositor to terminate book-entry
registration of the Certificates (which election shall only be made if the
Depositor determines that such election will not adversely affect the
Holders), (3) the delivery of written notice to the Trustee through DTC,
from Holders of Outstanding Certificates representing at least a majority
of the Voting Rights, that such Holders elect to terminate book-entry
registration of the Certificates, (4) a default in payment of any Interest,
Principal or Callable Principal due on the Underlying Securities, which
default remains uncured for 10 days, and the election by the Trustee to
terminate book-entry registration of the Certificates, or (5) the
occurrence of an Available Information Event (provided that the financial
statements and other information about the Issuer of the Underlying
Securities referred to in Section 5.15 hereof are not thereafter available
to the Trust), the Depositor shall notify DTC and, except in the case of
item (4) above, the Trustee of such event, whereupon DTC is required under
the Letter of Representations to notify the Participants of the
availability through DTC of physical certificates evidencing the
Certificates. In such event, DTC is required under the Letter of
Representations to promptly deliver to the Trustee the physical
certificates evidencing such Certificates, whereupon the Trustee at the
expense of the Depositor shall deliver physical certificates evidencing the
Certificates to any Participant having Certificates credited to its account
at DTC and the provisions of this Agreement shall then apply irrespective
of this Section 2.08.
(v) In connection with any notice or other communication to be provided
to Holders pursuant to this Agreement by the Trustee with respect to any
consent or other action to be taken by Holders, the Trustee shall establish
a record date for such consent or other action and give DTC notice of such
record date not less than 15 calendar days in advance of such record date
to the extent possible. Such record date shall be the later of thirty (30)
days prior to the first solicitation of such consent or other action or the
date of the most recent list of Holders furnished to the Trustee pursuant
to Section 6.01 hereof.
(vi) In the event that Underlying Securities are redeemed and
Certificates are correspondingly redeemed and the Certificates are
registered in the name of Cede & Co., as nominee for DTC, the Certificates
shall be redeemed and terminated without action by the Holder thereof, all
as provided in the Letter of Representations.
Section 2.9 Action or Consent of Holders.
----------------------------
The Voting Rights on the Certificates shall be apportioned by the
Trustee among the Holders, as of the applicable record date as determined by the
Trustee pursuant to Section 2.08(v) hereof, of
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<PAGE>
the Outstanding Certificates in proportion to the Accreted Value or, with
respect to Stripped Underlying Security Certificates, Callable Stripped
Underlying Security Certificates and Pooled Certificates, the principal amount,
of each class of Certificates, and within each class, pro rata by aggregate
Accreted Value or principal amount, as applicable. In the event of any action or
consent requiring the vote of the owners of any Underlying Securities at any
time when the Certificates are held in the DTC book-entry form, the Trustee,
upon receipt of the Underlying Security proxy, shall notify DTC (in its capacity
as the Holder of the Certificates) of such action. Under current procedures the
Depositor expects that DTC will notify the Participants who will notify the
Beneficial Owners of the Certificates of such an event. Thereafter, the Trustee
shall vote solely in accordance with such proxies and shall apportion its voting
powers on the basis of the votes cast by the Holders, based upon the direction
the Holders have received from the Beneficial Owners. If the Certificates are
not then held by DTC or any other depository, the Trustee, upon receipt of the
Underlying Security proxy, shall notify the Holders directly of such action and
shall vote in the same manner as noted above. The Trustee shall cast its vote in
connection with the foregoing vote on the Underlying Securities in proportion to
the Voting Rights on the Certificates held by the Holders or groups of Holders
directing it, notwithstanding that such Holder or groups of Holders may give
contrary instructions or that such instructions may conflict.
The Trustee shall at no time vote for or consent to any action (i) to the
extent that such vote or consent could reasonably be expected to alter the
status of the Trust as a grantor trust for federal income tax purposes, (ii)
prior to the filing of a bankruptcy petition by or against the Issuer of the
Underlying Securities or the commencement of any other similar proceeding, if
such action would alter the timing or amount of any payment on such Underlying
Securities or (iii) prior to the filing of a bankruptcy petition by or against
the Issuer of Underlying Securities, or the commencement of any other similar
proceeding, if such action would result in the exchange or substitution of any
of such outstanding Underlying Securities pursuant to a plan for the refunding
or refinancing of such Underlying Securities. In connection with any vote, the
Trustee may request, as a condition precedent to casting any vote, that it be
provided with an opinion of Counsel that the consent or action will not alter
the status of the Trust as a grantor trust for federal income tax purposes,
which Opinion of Counsel shall be an expense of the Holders voting in favor of
the proposed action. The Trustee in requesting such opinion shall inform the
Holders of the potential expense of the Opinion of Counsel.
In no event shall the Depositor be allowed or entitled (other than in its
capacity as a Participant for a Beneficial Owner) to vote, directly or
indirectly, any Certificates.
The Trustee shall also transmit to DTC or, if the Certificates are not then
held by DTC or any other depository, the Holders as provided in Section 9.04
hereof, any communications from the Issuer or from a third party (other than the
Issuer) to the Trustee as bondholder, upon receipt from such Issuer or third
party, respectively, of assurances that the Trustee's reasonable expenses will
be reimbursed by such Issuer or third party. If the Trustee does not receive
such assurances, then the Trustee, at the sole discretion of the Depositor and
at the expense of the Trust, shall transmit or cause to be transmitted any such
communications to DTC or, if the Certificates are not then held by DTC or any
other depository, the Holders as provided in Section 9.04 hereof.
Section 2.10 Transfer of Certificates Held by DTC to Successor Depository.
------------------------------------------------------------
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<PAGE>
(a) If the Depositor elects to direct that the Trustee deliver Certificates
with respect to a particular Series Trust Agreement in the name of and to DTC,
as the depository hereunder, or its nominee, said Certificates may not
thereafter be transferred except:
(i) to any successor of DTC or its nominee;
(ii) to any substitute depository not objected to by the Trustee, upon
(1) the resignation of DTC or its successor (or any substitute depository
or its successor) from its functions as depository or (2) a determination
by the Depositor that it is in the best interest of the Depositor (and will
not adversely affect the Holders) or the Holders to remove DTC or its
successor (or any substitute depository or its successor); or
(iii) as provided in Section 2.08(iv) hereof;
provided, that any successor of DTC or substitute depository referred to
above shall be a clearing agency registered with the Commission and shall
otherwise be qualified under any applicable laws to provide the services
proposed to be provided by it.
Section 2.11 Temporary Certificates.
----------------------
The Certificates may be initially delivered in temporary form
exchangeable for definitive Certificates when ready for delivery, which
temporary Certificates shall be printed, lithographed or typewritten, shall be
of such denominations as may be determined by the Trustee, shall be in fully
registered form and shall contain such reference to any of the provisions hereof
as may be appropriate. Every temporary Certificate shall be executed and
delivered by the Trustee upon the same conditions and terms and in substantially
the same manner as definitive certificates. If temporary Certificates are
issued, the Trustee shall execute and deliver definitive Certificates without
delay, and in that case upon demand of the Holder of any temporary Certificates
such temporary Certificates shall be exchanged without cost to such Holder for
definitive Certificates at the office of the Trustee upon surrender of such
temporary Certificates, and until so exchanged such temporary Certificates shall
be entitled to the same benefit, protection and security hereunder as the
definitive Certificates executed and delivered hereunder. All temporary
Certificates surrendered pursuant to the provisions of this Section 2.11 shall
be canceled by the Trustee, shall not be redelivered and shall be disposed of
pursuant to Section 2.07.
ARTICLE III CERTAIN OBLIGATIONS OF HOLDERS OF CERTIFICATES;
DEPOSITOR'S WARRANTIES
Section 3.1 Filing Proofs, Certificates and Other Information.
-------------------------------------------------
Any Holder presenting Certificates for surrender or registration of
transfer or exchange may be required to file such proof of residence, or other
matters or information, to execute such certificates and to make such
representations and warranties as the Trustee may reasonably deem necessary or
proper. The Trustee may withhold the delivery or delay the surrender of or
registration of transfer or exchange of any Certificate until such proof or
other information is filed, such certificates are executed or such
representations and warranties are made.
Section 3.2 Payment of Taxes or Other Governmental Charges.
----------------------------------------------
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<PAGE>
If any tax or other governmental charge shall become payable by or on
behalf of the Trustee, including any tax or charge required to be withheld from
any payment made to or by the Trustee under the provisions of any applicable
law, with respect to any Certificate or with respect to the Interest, Principal
or Callable Principal (or portions thereof) evidenced by any Certificate, such
tax or governmental charge shall be payable by the Holder of such Certificate
and may be so withheld by the Trustee. The surrender of or registration of
transfer or exchange of any Certificate may be refused until such payment is
made.
Section 3.3 Depositor's Warranties.
----------------------
In the case of each delivery of Underlying Securities to the Trustee, the
Depositor shall be deemed thereby to represent and warrant to the Trustee that
the Depositor is duly authorized to so deliver such Underlying Securities and
that immediately prior to the delivery thereof the Depositor owned such
Underlying Securities free and clear of any lien, pledge, encumbrance or other
security interest, and such delivery is irrevocable and free of any continuing
claim by the Depositor, except for the Retained Amount. The Depositor shall
further be deemed by such delivery to represent and warrant to the Trustee that
the prospectus and prospectus supplement prepared by the Depositor with respect
to the Certificates makes such disclosure with respect to the Underlying
Securities as is required by applicable federal and state securities laws. Such
representations and warranties shall survive the delivery of such Underlying
Securities and the Certificates in respect thereof.
ARTICLE IV PAYMENT OF INTEREST AND PRINCIPAL; CUSTODY OF PROCEEDS OF
INTEREST AND PRINCIPAL PAYMENTS
Section 4.1 Payment of Interest; Payment of Principal; Mandatory Exchange of
----------------------------------------------------------------
Callable Principal Certificates and Callable Stripped Underlying Security
-------------------------------------------------------------------------
Certificates.
------------
In the case of Underlying Securities held by the Trustee in certificate
form, the Trustee shall present the Underlying Securities to the Issuer,
Indenture Trustee or paying agent therefor, as applicable, for payment of
Interest on the Interest Payment Dates related thereto and all Principal at
stated maturity or upon the Redemption Date therefor, to the extent required
under the terms of such Underlying Securities to obtain payment thereon.
With respect to any Coupon Certificate, on or after the Interest Payment
Date of the Interest evidenced thereby, if the Issuer shall have paid in full
and the Trustee shall have received the interest due on such Interest Payment
Date on the Underlying Securities, the Trustee shall pay to the Holder thereof
upon presentation and surrender of its Certificates, in lawful money of the
United States of America, by check no later than one Business Day after receipt
of funds by the Trustee, the entire amount of such Interest evidenced thereby,
less any taxes or governmental charges required to be withheld from such payment
by the Trustee.
With respect to any Principal Certificate, on or after the stated maturity
date of the Principal evidenced thereby, if the Issuer shall have paid in full
and the Trustee shall have received the amount of such Principal upon maturity
of the underlying Underlying Security or Underlying Securities, the Trustee
shall pay to the Holder thereof upon presentation and surrender of its
Certificates, in lawful money of the United States of America, by check no later
than one Business Day after receipt of
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<PAGE>
funds by the Trustee, the entire amount of such Principal evidenced thereby,
less any taxes or governmental charges required to be withheld from such payment
by the Trustee.
With respect to any Callable Principal Certificate, on or after the stated
maturity date, the redemption date or the Interest Payment Date, as applicable,
of the Callable Principal evidenced thereby, if the Issuer shall have paid and
the Trustee shall have received all or any part of the Callable Principal due
upon maturity or earlier redemption of the underlying Underlying Securities or
on any Interest Payment Date, the Trustee shall pay to the Holder thereof upon
presentation and surrender of its Certificates, in lawful money of the United
States of America, by check no later than one Business Day after receipt of
funds by the Trustee, the entire amount of such Callable Principal so paid and
received or, in the case of a Callable Principal Certificate redeemed in part,
the amount of such Principal so redeemed; in each case less any taxes or
governmental charges required to be withheld from such payment by the Trustee.
Any Callable Principal Certificate which is not redeemed on the First Call
Date shall be terminated and deemed involuntarily surrendered by the Holder
thereof in exchange for a principal amount of the Underlying Securities
underlying such Callable Principal Certificate equal to the face amount of such
Callable Principal Certificate, whether or not such Holder has requested such
exchange. No action such Holder shall be required to effect such termination,
which shall be carried out by the Trustee pursuant to the terms of this
Agreement.
With respect to any Stripped Coupon Certificate, on or after the
Interest Payment Date of the Interest evidenced thereby, if the Issuer shall
have paid in full and the Trustee shall have received the interest due on such
Interest Payment Date on the underlying Underlying Securities, the Trustee shall
pay to the Holder thereof upon presentation and surrender of its Certificates,
in lawful money of the United States of America, by check no later than one
Business Day after receipt of funds by the Trustee, the entire amount of such
Interest evidenced thereby, less any taxes or governmental charges required to
be withheld from such payment by the Trustee.
With respect to any Stripped Underlying Security Certificate, on or after
the Interest Payment Date or stated maturity date, as applicable, of the
Interest or Principal evidenced thereby, if the Issuer shall have paid and the
Trustee shall have received the Interest evidenced thereby or all or any part of
the principal amount of the Principal evidenced thereby due upon maturity of the
underlying Underlying Securities, the Trustee shall pay to the Holder thereof
(i) with respect to each Interest Payment Date preceding the maturity date, as
of the applicable record date of the underlying Underlying Securities, and (ii)
with respect to the maturity date, upon presentation of its Certificates, in
lawful money of the United States of America, by check no later than one
Business Day after receipt of funds by the Trustee (in the case of clause (i)
above, sent by first-class mail to the address of the Holder set forth in the
Certificate Register), the entire amount of such Interest and/or Principal; in
each case less any taxes or governmental charges required to be withheld from
such payment by the Trustee.
With respect to any Callable Stripped Underlying Security Certificate, on
or after the stated maturity date, the redemption date or the Interest Payment
Date, as applicable, of the Callable Principal evidenced thereby, if the Issuer
shall have paid and the Trustee shall have received the Interest or all or any
part of the Callable Principal evidenced thereby due upon maturity or earlier
redemption of the underlying Underlying Securities or on any Interest Payment
Date, the Trustee
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<PAGE>
shall pay to the Holder thereof (i) with respect to each Interest Payment Date
preceding the maturity date or redemption date, as applicable, as of the
applicable record date of the underlying Underlying Securities, and (ii) with
respect to the maturity date or redemption date, as applicable, upon
presentation of its Certificates, in lawful money of the United States of
America, by check no later than one Business Day after receipt of funds by the
Trustee (in the case of clause (i) above, sent by first-class mail to the
address of the Holder set forth in the Certificate Register), the entire amount
of such Holder's allocable portion of the Callable Principal so received or, in
the case of a Callable Stripped Underlying Security Certificate redeemed in
part, the amount so redeemed; in each case less any taxes or governmental
charges required to be withheld from such payment by the Trustee.
Any Callable Stripped Underlying Security Certificate which is not redeemed
on the First Call Date shall be terminated and deemed involuntarily surrendered
by the Holder thereof in exchange for a principal amount of the Underlying
Securities underlying such Callable Stripped Underlying Security Certificate
equal to the face amount of such Callable Stripped Underlying Security
Certificate, whether or not such Holder has requested such exchange. No action
by such Holder shall be required to effect such termination, which shall be
carried out by the Trustee pursuant to the terms of this Agreement.
With respect to any Pooled Certificate, on or after the stated maturity
date, the redemption date or the Interest Payment Date, as applicable, of the
Interest, Principal or Callable Principal evidenced thereby, if the Issuer shall
have paid and the Trustee shall have received Interest on any of the Underlying
Securities in the Trust evidenced thereby or all or any part of the Principal or
Callable Principal on any of the Underlying Securities in the Trust evidenced
thereby due upon maturity or earlier redemption of such Underlying Securities or
on any Interest Payment Date, the Trustee shall pay to the Holder thereof (i)
with respect to each Interest Payment Date preceding the maturity date or
redemption date, as applicable, as of the applicable record date of the
underlying Underlying Securities, and (ii) with respect to the maturity date or
redemption date, as applicable, upon presentation of its Certificates, in lawful
money of the United States of America, by check no later than one Business Day
after receipt of funds by the Trustee (in the case of clause (i) above, sent by
first-class mail to the address of the Holder set forth in the Certificate
Register), the entire amount of such Interest, Principal or Callable Principal
so paid and received, less any Retained Amount, or, in the case of a Certificate
redeemed in part, the amount of such Callable Principal so redeemed; in each
case less any taxes or governmental charges required to be withheld from such
payment by the Trustee.
With respect to any payment of Interest, Principal or Callable Principal,
as applicable, that constitutes a Retained Amount, the Trustee shall remit such
Retained Amount to the Depositor, in immediately available funds, within one
Business Day of receipt by the Trustee from the Issuer.
When making any payment to a Holder of a Certificate or, with respect to
any Retained Amount, to the Depositor, under this Agreement, the Trustee shall
round down such payment to the nearest whole cent.
Notwithstanding any other provisions in this Agreement, the right of the
Holder of any Certificate to receive any of the payments described above in this
Section 4.01, and to institute suit for the enforcement of any such payment on
or after the date such payment is payable, shall not be impaired without the
consent of such Holder.
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<PAGE>
Section 4.2 Segregation of Moneys Received from Issuers in Respect of
---------------------------------------------------------
Underlying Securities.
---------------------
All moneys received from the Issuers of Underlying Securities or otherwise
by the Trustee in respect of Underlying Securities evidenced by Certificates
issued hereunder shall be held by it without interest in a segregated trust
account (which account shall contain two subaccounts, one for interest payments
on the Underlying Securities and the second for principal and redemption premium
payments on the Underlying Securities) for each issue of Underlying Securities
held in trust until required to be disbursed in accordance with the provisions
of this Agreement or as otherwise required by law and such moneys shall be
segregated by separate recordation on the books and records of the Trustee.
Payments whose character as principal, redemption premium or interest on the
Underlying Securities cannot be determined shall be deposited in the subaccount
for principal until distributed pursuant to Section 5.03(b) hereof.
Section 4.3 Paying Agent.
------------
Each Paying Agent other than the Trustee shall execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the Trustee
(and if the Trustee acts as Paying Agent, it hereby so agrees), that such Paying
Agent shall:
(i) hold all sums held by it for the payment of amounts due with respect
to the Underlying Securities in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and pay such sums to such Persons as herein
provided;
(ii) give the Trustee notice of any default by the Issuer (or any other
obligor upon the Underlying Securities) of which it has actual knowledge in
the making of any payment required to be made with respect to the
Certificates.
ARTICLE V THE TRUSTEE AND THE DEPOSITOR
Section 5.1 Eligibility of Trustee; Disqualification.
----------------------------------------
The Trustee shall at all times satisfy the requirements of TIA Section
310(a). The Trustee shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of condition
and it shall have a long term unsecured debt or deposit rating of A-2 or better
by Moody's Investors Service, Inc. and A by Standard & Poor's Ratings Group or
the equivalent rating thereof by the Rating Agency (if other than Moody's
Investors Service, Inc., or Standard & Poor's Ratings Group). The Trustee shall
comply with TIA Section 310(b); provided, however, that there shall be excluded
from the operation of TIA Section 310(b)(1) any series trust deposit agreements
under which other securities are outstanding evidencing ownership interests in
bonds of the Issuer of the Underlying Securities if the requirements for such
exclusion set forth in TIA Section 310(b)(1) are met.
Section 5.2 Trustee's Duties on Default; No Liability of the Trustee or the
---------------------------------------------------------------
Depositor on the Underlying Securities.
--------------------------------------
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<PAGE>
If an event of default on the Underlying Securities has occurred and is
continuing, the Trustee shall exercise the rights and powers vested in it by
this Agreement and 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.
The Trustee shall have the legal power to exercise all of the rights,
powers and privileges of a holder of the Underlying Securities in which the
Certificates evidence an interest. However, neither the Trustee (except as
specifically provided in Section 5.03 or elsewhere herein or in the TIA) nor the
Depositor shall be under any obligation whatsoever to appear in, prosecute or
defend any action, suit or other proceeding in respect of Underlying Securities
or Certificates.
The sole obligor with respect to any Underlying Security is the Issuer
thereof or any other entity obligated to make payments to or on behalf of the
Issuer thereof (or its trustee or other applicable fiduciary) with respect to
such Underlying Security. Neither the Trustee nor the Depositor shall have any
obligation on or with respect to the Underlying Securities except as provided in
this Article V with respect to the Trustee; and their respective obligations
with respect to Certificates shall be solely as set forth in this Agreement.
If there is an event of default (as defined in the indenture or other
document pursuant to which the Underlying Securities were issued) with respect
to any Underlying Security and such default is known to the Trustee, the Trustee
shall promptly give notice to DTC or, if the Certificates are not then held by
DTC or any other depository, directly to Holders thereof as provided in Section
9.04 hereof (and in the manner and to the extent provided in TIA Section 313(c))
within 90 days after such event of default occurs. Such notice shall set forth
(a) the identity of the issue of Underlying Securities, (b) the date and nature
of such default, (c) the face amount of the Interest, Principal or Callable
Principal to which such default relates, (d) the identifying numbers of the
class of Certificates, or any combination, as the case may be, evidencing the
Interest, Principal or Callable Principal (or portions thereof) described above
in clause (c), and (e) any other information which the Trustee may deem
appropriate. Except in the case of a default in payment of Principal or Interest
(including payments pursuant to a redemption of any Certificate), the Trustee
may withhold the notice to Holders if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is in
the interests of the Holders.
Holders of Certificates shall have no recourse against the Depositor or the
Trustee for payment defaults on the Underlying Securities.
Section 5.3 Collection of Indebtedness and Suits for Enforcement by Trustee;
----------------------------------------------------------------
Distribution of Amounts Received in Respect of Defaulted Underlying Securities.
------------------------------------------------------------------------------
(a)If: (i) default is made in the payment of any installment of interest
on any Underlying Security when the same becomes due and payable, and such
default continues unremedied for the period specified in the indenture (as
identified in Exhibit A to the Series Trust Agreement), or, if no such
period is specified, five days, after receipt by the Issuer of notice
thereof from the Trustee or receipt by the Issuer and the Trustee of notice
thereof from the Holders of Outstanding Certificates representing at least
25% of the Voting Rights; or (ii) default is made in the payment of the
principal of or any installment of the principal of any Underlying Security
when the same becomes due and payable, and such default continues
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<PAGE>
unremedied for the period specified in the indenture (as identified in
Exhibit A to the Series Trust Agreement), or, if no such period is
specified, thirty (30) days, after receipt by the Issuer of notice thereof
from the Trustee or receipt by the Issuer and the Trustee of notice thereof
from the Holders of Outstanding Certificates representing at least 25% of
the Voting Rights;
and the Issuer shall, upon demand of the Trustee, fail to pay forthwith to
the Trustee, for the benefit of the Holders, the whole amount then due and
payable on such Underlying Securities for principal and interest, with
interest upon the overdue principal, at the rate borne by the Underlying
Securities and in addition thereto such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the
Trustee and its agents and counsel, to the extent permitted by law (such
event, an "Issuer Payment Default"), then the Trustee, in its own name and
as trustee of an express trust, subject to provision being made by the
Holders for indemnification against costs, expenses and liabilities in a
form satisfactory to the Trustee, shall institute a Proceeding for the
collection of the sums so due and unpaid, and shall prosecute such
Proceeding to judgment or final decree or settlement, and shall enforce the
same against the Issuer or other obligor upon the Underlying Securities and
collect in the manner provided by law out of the property of the Issuer or
other obligor upon the Underlying Securities, wherever situated, the moneys
adjudged or decreed to be payable, unless otherwise directed by Holders of
Outstanding Certificates representing not less than a majority of the
voting Rights. In connection therewith, the Trustee shall use its best
reasonable efforts in accordance with such normal and customary procedures
it shall deem necessary or advisable, and shall have the power and
authority, acting alone, to do any and all things in connection therewith
and the administration of the Trust as it may deem necessary or advisable.
(b) In the event that the Trustee receives money or other property in
respect of the Underlying Securities (other than a scheduled interest
payment with respect to an Interest Payment Date, the scheduled payment of
principal on or with respect to the stated maturity date of the Underlying
Securities, or the payment of principal and any redemption premium on or
with respect to the earlier redemption of the Underlying Securities) as a
result of a payment default on the Underlying Securities, or actual notice
that such moneys or other property will be paid to the Trustee, the Trustee
shall promptly give notice (as provided in Section 9.04 hereof) to DTC or,
if the Certificates are not then held by DTC or any other depository,
directly to the Holders of the Certificates then outstanding and unpaid.
Such notice shall state that, not later than thirty (30) days after the
receipt of such moneys or other property, the Trustee shall allocate and
distribute such moneys or other property to the Holders of the Outstanding
Certificates then unpaid, in proportion to the Accreted Value or, with
respect to Stripped Underlying Security Certificates, Callable Stripped
Underlying Security Certificates and Pooled Certificates, the principal
amount, of each class of Outstanding Certificates, and within each class,
pro rata by aggregate Accreted Value or principal amount, as applicable.
Property received, other than cash, shall be liquidated by the Trustee in a
commercially reasonable manner and the proceeds thereof, after deduction of
all reasonable costs of such liquidation, distributed in cash, only to the
extent necessary to avoid distribution of fractional securities. The
Trustee shall not be responsible for the failure of any Person to maximize
the price at which such property may be sold. No Person effecting a sale
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<PAGE>
on behalf of the Trustee shall be liable therefor so long as such sale is
effected in a commercially reasonable manner.
Section 5.4 Control by Holders.
------------------
The Holders of Outstanding Certificates representing a majority of the
Voting Rights shall, subject to provision being made for indemnification against
costs, expenses and liabilities in a form satisfactory to the Trustee, have the
right to direct the time, method and place of conducting any Proceeding for any
remedy available to the Trustee with respect to any Issuer Payment Default;
provided, however, that:
(i) such direction shall not be in conflict with any rule of law or with
this Agreement;
(ii) subject to Sections 2.09 and 5.12, the Trustee need not take any
action that it determines might cause it to incur any liability or might
materially adversely affect the rights of any Holders not consenting to
such action.
Section 5.5 Waiver of Past Defaults.
------------------------
The Holders of Outstanding Certificates representing not less than a
majority of the Voting Rights may waive any past default and its consequences
except (i) an Issuer Payment Default or other default in the payment of
principal of or interest on any of the Certificates or (ii) a default in respect
of a covenant or provision hereof which cannot be modified or amended without
the consent of the Holder of each Certificate. In the case of any such waiver,
the Depositor, the Trustee and the Holders shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall extend to
any subsequent or other default or impair any right consequent thereto.
Section 5.6 Maintenance of Offices and Agencies by the Trustee.
---------------------------------------------------
Until termination of this Agreement in accordance with its terms, the
Trustee shall maintain (a) facilities in the City of New York for the execution
and delivery, payment, surrender and registration of transfer and exchange of
Certificates, all in accordance with the provisions of this Agreement, and (b)
such other agents, if any, as the Trustee and the Depositor may agree from time
to time.
Section 5.7 Prevention of or Delay in Performance by the Trustee or the
-----------------------------------------------------------
Depositor.
----------
Neither the Trustee nor the Depositor shall incur any liability to any
Holder of any Certificate, if by reason of any provision of any present or
future law, or regulation thereunder, of 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 or the Depositor shall be prevented or forbidden
from doing or performing any act or thing which the terms of this Agreement
provide shall be done or performed; and neither the Trustee nor the Depositor
shall incur any liability to any Holder of a Certificate by reason of any non-
performance or delay, caused as aforesaid, in the performance of any act or
thing which the terms of this Agreement provide shall or may be done or
performed, or by reason of any exercise of, or failure to exercise, any
discretion provided for in this Agreement.
Section 5.8 Liability of the Trustee and the Depositor.
-------------------------------------------
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<PAGE>
(a) Neither the Trustee nor the Depositor assumes any obligation or
shall be subject to any liability under this Agreement to Holders of
Certificates, other than liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, in the performance of
such duties as are specifically set forth in this Agreement or the TIA; further
provided, that:
(i) the Trustee shall not be liable except for the performance of
such duties as are specifically set out in this Agreement and no implied
covenants or obligations shall be read into this Agreement against the
Trustee;
(ii) the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, in the
absence of bad faith on the part of the Trustee, upon certificates or
opinions conforming to the requirements of this Agreement (but the Trustee
shall examine the evidence furnished to it pursuant to TIA Section 314 to
determine whether or not such evidence conforms to the requirements of this
Agreement);
(iii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(iv) to the extent that the Holders of Outstanding Certificates
representing not less than a majority of the Voting Rights direct the
Trustee with respect to the time, method and place of conducting any
Proceeding for any remedy available to the Trustee with respect to an
Issuer Payment Default, the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with such
direction.
Neither DTC nor any registrar with which Underlying Securities are
maintained as book-entry credits shall be deemed agents of the Trustee. The
Trustee may own and deal (i) in bonds of the same issue and maturity as the
Underlying Securities and (ii) in Certificates.
The Trustee shall be under no liability to any party hereto, or to any
Holder, by reason of any failure on the part of the Depositor or any maker,
guarantor, endorser or other signatory of any document or instrument, including
any Underlying Security, or any other Person to perform such Person's
obligations under any such document or instrument.
The Trustee shall not be responsible for the sufficiency or accuracy, the
form or the execution, validity, value or genuineness of any document or
property received or held by it hereunder, including without limitation any
Underlying Securities, or the authority of the Depositor in executing this
Agreement.
The Trustee assumes no responsibility for the correctness of the recitals
to the Certificates or to any document issued in connection with the sale of the
Certificates, other than its signature under the Certificates.
ANY ACTION OR PROCEEDING ALLEGING ANY BREACH BY THE TRUSTEE OF ITS DUTIES UNDER
THIS AGREEMENT SHALL BE PROSECUTED ONLY IN A STATE OR FEDERAL COURT LOCATED IN
THE STATE OF NEW YORK, COUNTY OF NEW YORK. THE TRUSTEE SHALL HAVE THE RIGHT AT
ANY TIME TO SEEK INSTRUCTIONS FROM ANY COURT OF COMPETENT JURISDICTION.
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<PAGE>
The Trustee shall be deemed to have exercised reasonable care in the
custody and preservation of the Underlying Securities in its possession if the
Underlying Securities are held in the manner specified in the Officer's
Certificate of the Trustee and are accorded treatment substantially equal to
that which a prudent Person accords its own property.
The Trustee shall at all times maintain a fidelity bond in reasonable form
and amount to protect against loss due to dishonest or fraudulent action by its
employees in connection with its obligations hereunder.
The Trustee may consult with and rely upon the calculations of an advisor
(which may be the Depositor) in connection with any calculation of Accreted
Value to the extent such amount must be determined in order for the Trustee to
carry out its duties hereunder.
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.
The Trustee may request and rely upon and shall be protected in acting or
refraining from action upon any resolution, certificate signed by an authorized
officer, 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.
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 Holders, pursuant to the provisions of this Series Trust
Agreement, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby.
The Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents or attorneys or a
custodian and shall not be liable for any misconduct or negligence of any such
agents or attorneys selected with due care by it.
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 Series 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 this Series Trust Agreement. 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.
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<PAGE>
Section 5.9 Obligation of the Depositor.
---------------------------
(a) The Depositor shall:
(i) if so requested by the Trustee, provide to the Trustee at least
10 Business Days prior to the date required for filing information
reasonably necessary to assist the Trustee under Section 5.15(b) of
this Agreement in preparing and filing reports with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act;
(ii) [Reserved.];
(iii) supply to the Trustee (and the Trustee shall transmit by mail to
all Holders described in TIA Section 313(c), in the manner and to the
extent provided therein) such summaries of any information, documents
and reports required to be filed by the Depositor pursuant to clauses
(i) and (ii) of this Section 5.09(a), if any, as may be required by
rules and regulations prescribed from time to time by the Commission;
and
(iv) after an Available Information Event, on behalf of the Trust,
prepare and file with the Commission, following the execution thereof
by the Trustee if so requested by the Depositor, and file with the
Trustee, within 15 days after the Depositor on behalf of the Trust is
required to file the same with the Commission, reports of the kind
referred to in clause (i) of this Section 5.09(a) with respect to the
Issuer of the Underlying Securities, to the extent such reports are
then available to the Depositor, for as long as the Depositor on behalf
of the Trust is required to file such reports under the Exchange Act.
Such reports shall include quarterly and annual financial statements
and other information of the type required to be filed on Form 8-K
under the Exchange Act with respect to the Issuer of the Underlying
Securities. A copy of each such report shall be provided to the Trustee
at least 10 Business Days prior to the date required for filing. If
such reports and information are not available to the Depositor at a
time when such reports and information are required to be filed with
the Commission by the Depositor on behalf of the Trust, the Depositor
shall cause the removal of the Certificates from the DTC book-entry
system as set forth in Section 2.08(iv)(5) of this Agreement and shall
notify the Issuer that the Holders of Certificates constitute record
holders of the Underlying Securities for purposes of the Exchange Act.
(b) The Depositor shall deliver to the Trustee, not less often than
annually, an Officer's Certificate signed by an Authorized Officer who is the
principal executive officer, principal financial officer or principal accounting
officer of the Depositor, dated as of the date set forth in the Series Trust
Agreement for such year, stating that:
(i) a review of the activities of the Depositor during such fiscal
year and of performance under this Agreement has been made under such
Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on such
review, the Depositor has fulfilled all of its obligations under this
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known
to such Authorized Officer and the nature and status thereof. A copy of
such certificate may be obtained by any Holder by a request in writing
to the Depositor addressed to the Corporate Trust Office of the
Trustee.
B-23
<PAGE>
(a) If and only if the Series Trust Agreement provides for the pledge
of the Underlying Securities to the Trustee (and not merely the transfer,
assignment, conveyance and sale, without recourse, thereof to the Trustee), on
the Closing Date, the Depositor shall furnish to the Trustee an Opinion of
Counsel either stating that, in the opinion of such counsel, such action has
been taken with respect to the recording and filing of this Agreement, any
agreements supplemental hereto and any other requisite documents, and with
respect to the execution and filing of any financing statements and continuation
statements as are necessary to perfect and make effective the lien and security
interest of this Agreement and reciting the details of such action, or stating
that, in the opinion of such counsel, no such action is necessary to make such
lien and security interest effective.
(b) If and only if the Series Trust Agreement provides for the pledge
of the Underlying Securities to the Trustee (and not merely the transfer,
assignment, conveyance and sale, without recourse, thereof to the Trustee), at
least annually after the Closing Date, the Depositor shall furnish to the
Trustee an Opinion of Counsel either stating that, in the opinion of such
counsel, such action has been taken with respect to the recording, filing, re-
recording and refiling of this Agreement, any agreements supplemental hereto and
any other requisite documents and with respect to the execution and filing of
any financing statements and continuation statements as is necessary to maintain
the lien and security interest created by this Agreement and reciting the
details of such action or stating that in the opinion of such counsel no such
action is necessary to maintain the lien and security interest created by this
Agreement. Such Opinion of Counsel shall also describe the recording, filing,
re-recording and refiling of this Agreement, any agreements supplemental hereto
and any other requisite documents and the execution and filing of any financing
statements and continuation statements that will, in the opinion of such
counsel, be required to maintain the lien and security interest of this
Agreement until such date in the following calendar year.
(c) If and only if the Series Trust Agreement provides for the pledge
of the Underlying Securities to the Trustee (and not merely the transfer,
assignment, conveyance and sale, without recourse, thereof to the Trustee),
(i) whenever any property or securities are to be released from the
lien of this Agreement, the Depositor shall furnish to the Trustee an
Officer's Certificate of the Depositor certifying or stating the
opinion of each Person signing such certificate as to the fair value
(within 90 days of such release) of the property or securities proposed
to be released and stating that in the opinion of such Person the
proposed release will not impair the security under this Agreement in
contravention of the provisions hereof.
(ii) whenever the Depositor is required to furnish to the Trustee an
Officer's Certificate of the Depositor certifying or stating the
opinion of any signatory thereof as to the matters described in clause
(i) above, the Depositor shall also furnish to the Trustee an
Independent Certificate as to the same matters if the fair value of the
property or securities and of all other property or securities released
from the lien of this Agreement since the commencement of the then
current calendar year, as set forth in the certificates required by
clause (i) above and this clause (ii), equals 10% or more of the
principal amount of the Outstanding Certificates, but such certificate
need not be furnished in the case of any release of property or
securities if the fair value thereof as set forth in the related
Officer's Certificate of the Depositor is less than $25,000 or less
than one percent of the then principal amount of the Outstanding
Certificates.
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<PAGE>
(iii) prior to the deposit with the Trustee of any securities that is
to be made the basis for the authentication and delivery of
Certificates, the withdrawal of cash constituting a part of the trust
estate or the release of any property or securities subject to the lien
of this Agreement, the Depositor shall furnish to the Trustee an
Officer's Certificate of the Depositor certifying or stating the
opinion of each Person signing such certificate as to the fair value
(within 90 days of such deposit) to the Depositor of the securities to
be so deposited.
(iv) whenever the Depositor is required to furnish to the Trustee an
Officer's Certificate of the Depositor described in clause (iii) above,
the Depositor shall also deliver to the Trustee an Independent
Certificate as to the same matters, if the fair value to the Depositor
of the securities to be so deposited and of all other such securities
made the basis of any such withdrawal or release since the commencement
of the then current fiscal year of the Depositor, as set forth in the
certificates delivered pursuant to clause (iii) above and this clause
(iv), is 10% or more of the principal amount of the Outstanding
Certificates, but such a certificate need not be furnished with respect
to any securities so deposited, if the fair value thereof to the
Depositor as set forth in the related Officer's Certificate of the
Depositor is less than $25,000 or less than one percent of the
principal amount of the Outstanding Certificates.
(v) subject to the payment of its fees and expenses hereunder, the
Trustee may, and when required by the provisions of this Agreement,
shall, execute instruments to release property from the lien of this
Agreement, or convey the Trustee's interest in the same, in a manner
and under circumstances that are consistent with the provisions of this
Agreement. No party relying upon an instrument executed by the Trustee
in connection therewith shall be bound to ascertain the Trustee's
authority, inquire into the satisfaction of any conditions precedent or
see to the application of any moneys.
(vi) the Trustee shall at such time as there are no Outstanding
Certificates and all sums due to the Trustee hereunder have been paid,
release any remaining portion of the trust estate that secured the
Certificates from the lien of this Agreement and release to the
Depositor or any other Person entitled thereto any funds then included
in the trust estate.
(d) Upon any application or request by the Depositor to the Trustee
to take any action under the provisions of this Agreement, which action is
subject to the satisfaction of a condition precedent (including any covenants
compliance with which constitutes a condition precedent), the Depositor shall
furnish to the Trustee: (i) an Officer's Certificate stating that all conditions
precedent, if any, provided for in this Agreement relating to the proposed
action have been complied with, (ii) an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with and (iii) (if required by the TIA) an Independent Certificate from
a firm of certified public accountants meeting the applicable requirements of
the TIA, 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 Agreement, 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 Agreement shall include:
(i) a statement that such signatory of such certificate or opinion
has read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
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<PAGE>
(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 judgment of each such signatory, such
signatory has made such examination or investigations as is necessary to
enable such signatory to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such signatory,
such condition or covenant has been complied with.
Section 5.10 Preferential Collection of Claims Against Depositor.
---------------------------------------------------
The Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent required by TIA
Section 311(a).
Section 5.11 Resignation and Removal of the Trustee; Appointment of
------------------------------------------------------
Successor Trustee.
-----------------
The Trustee may at any time resign as Trustee hereunder by written notice
of its election so to do, delivered to the Depositor and the Rating Agency as
provided in Section 9.04 hereof, and such resignation shall take effect upon the
appointment of a successor Trustee and its acceptance of such appointment as
hereinafter provided. The Depositor may at any time (including such time as the
Trustee fails to comply with Section 5.01) remove the Trustee as Trustee
hereunder by written notice of its election to do so, delivered to the Trustee
and the Rating Agency as provided in Section 9.04 hereof, and such removal shall
take effect upon the appointment of a successor Trustee and its acceptance of
such appointment as provided in the third succeeding paragraph; provided,
however, that in the event of such removal, the Depositor shall negotiate in
good faith with the Trustee in order to agree regarding payment of the
termination costs of the Trustee resulting from such removal. Upon the
designation of a successor Trustee following either resignation by 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 request of the successor
Trustee.
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 or affairs for the purpose of rehabilitation,
conservation or liquidation, or the Trustee shall fail to comply with Section
5.01, then any Holder of a Certificate with respect to a particular issue of
Underlying Securities which has been such a Holder for at least six (6) months
or the Holders of Outstanding Certificates representing ten percent (10%) of the
Voting Rights for the Outstanding Certificates of a series which is outstanding
at such time may, on behalf of himself, herself or themselves and all others
similarly situated, petition any court of competent jurisdiction for the removal
of the Trustee with respect to the Underlying Securities evidenced by such
Certificates and the appointment of a successor Trustee.
In the event the Trustee resigns or is removed, the Trustee shall
reimburse the Depositor for any fees or charges previously paid to the Trustee
in respect of duties not yet performed under this Agreement which remain to be
performed by a successor Trustee and the Trustee shall promptly
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<PAGE>
notify the Rating Agency of its resignation or removal and any successor Trustee
shall promptly notify the Rating Agency of its appointment as provided in
Section 9.04 hereof.
The Holders of Certificates entitled to at least 51% of the Voting Rights
may at any time remove the Trustee and appoint a successor trustee by written
instrument or instruments, in triplicate, signed by such Holders or their
attorneys-in-fact duly authorized, one complete set of which instruments shall
be delivered to the Depositor, one complete set to the Trustee so removed, one
complete set to the successor trustee so appointed. A copy of such instrument
shall be delivered to the Certificateholders by the Depositor.
In case at any time the Trustee acting hereunder notifies the Depositor
that it elects to resign or the Depositor notifies the Trustee that it elects to
remove the Trustee as Trustee, the Depositor shall, within ninety (90) days
after the delivery of the notice of resignation or removal, appoint a successor
Trustee, which shall be a bank with trust powers or a trust company having its
principal office in the United States of America and having a combined capital
and surplus of at least $50,000,000 and which is rated at least investment grade
by the Rating Agency. If no successor Trustee has been appointed as successor
Trustee within ninety (90) days after the Trustee has given written notice of
its election to resign or the Depositor has given written notice to the Trustee
of its 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 Agreement, and such predecessor, upon payment of all sums due it and on the
written request of the Depositor, shall execute and deliver an instrument
transferring to such successor all rights, obligations and powers of such
predecessor hereunder, and shall duly assign, transfer and deliver all right,
title and interest in the Underlying Securities and parts thereof to such
successor. Any successor Trustee shall promptly give notice of its appointment
to the Holders of Certificates for which it is successor Trustee as provided in
Section 9.04 hereof.
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 5.12 Indemnification by the Depositor.
--------------------------------
The Depositor agrees to indemnify the Trustee and any of its agents,
officers, directors or employees for, and to hold them harmless against, any
loss, liability or expense arising, directly or indirectly, out of, relating to,
or in connection with the acceptance, administration or performance of their
duties, or the duties of the Trustee, as well as the costs and expenses of
defending themselves against any action, suit, or other proceeding involving any
claim or liability arising, directly or indirectly, out of, relating to or in
connection with, this Agreement, the Initial Trust Agreement or the exercise or
performance of any of their powers or duties hereunder or thereunder, other than
any loss, liability or expense arising out of (i) negligence, willful misconduct
or bad faith on the part of the Trustee or any of its agents, officers,
directors or employees, or (ii) any charges, fees or reimbursements that are
expressly required by this Agreement to be paid by the Holders or for which the
Holders are expressly required by this Agreement or have elected pursuant to the
terms of this
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<PAGE>
Agreement to provide security or indemnity to the Trustee. Failure of the
Depositor to fulfill its obligations hereunder shall not relieve the Trustee
from fulfilling its duties under this Agreement.
Any Person that proposes to assert the right to be indemnified under this
Section 5.12 (any such Person, an "Indemnified Party") shall, promptly after
receipt of notice of commencement of any action against such party in respect of
which a claim is to be made against the Depositor under this Section 5.12,
notify the Depositor of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify the Depositor shall not relieve the
Depositor from any liability that it may have to such Indemnified Party under
the foregoing provisions of this Section 5.12 unless, and only to the extent
that, such omission results in the forfeiture of rights or defenses by the
Depositor. If any such action is brought against an Indemnified Party and it
notifies the Depositor of its commencement, the Depositor shall be entitled to
participate in and, to the extent that it elects by delivering written notice to
the Indemnified Party promptly after receiving notice of the commencement of the
action from the Indemnified Party, to assume the defense of the action, with
counsel satisfactory to the Indemnified Party, and after notice from the
Depositor to the Indemnified Party of its election to assume the defense, the
Depositor shall not be liable to the Indemnified Party for any fees,
disbursements or other charges of counsel except as provided below and except
for the reasonable costs of investigation subsequently incurred by the
Indemnified Party in connection with the defense. The Indemnified Party shall
have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel shall be at the expense of the
Indemnified Party unless (1) the employment of counsel by the Indemnified Party
has been authorized in writing by the Depositor, (2) the Indemnified Party has
reasonably concluded (based on advice of counsel) that there may be legal
defenses available to it or other Indemnified Parties that are different from or
in addition to those available to the Depositor, (3) a conflict or potential
conflict exists (based on advice of counsel to the Indemnified Party) between
the Indemnified Party and the Depositor (in which case the Depositor shall not
have the right to direct the defense of such action on behalf of the Indemnified
Party), or (4) the Depositor has not in fact employed counsel to assume the
defense of such action within 15 Business Days after receiving notice of the
commencement of the action, in each of which cases the reasonable fees,
disbursements and other charges of counsel shall be at the expense of the
Depositor. It is understood that the Depositor shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees, disbursements and other charges of more than one separate firm
admitted to practice in such jurisdiction at any one time for all Persons
entitled to indemnification hereunder. All such fees, disbursements and other
charges shall be reimbursed by the Depositor promptly as they are incurred. The
Depositor shall not be liable for any settlement of any action or claim effected
without its written consent (which consent shall not be unreasonably withheld).
The Depositor shall not, without the prior written consent of each Indemnified
Party, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action or proceeding relating to the matters
contemplated by this Section 5.12 (whether or not any Indemnified Party is a
party thereto), unless such settlement, compromise or consent includes an
unconditional release of each Indemnified Party from all liability arising or
that may arise out of such claim, action or proceeding. Notwithstanding any
other provision of this Section 5.12, if at any time an Indemnified Party shall
have requested the Depositor to reimburse the Indemnified Party for fees and
expenses of counsel, the Depositor agrees that it shall be liable for any
settlement effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by the Depositor of the aforesaid
request, (ii) the Depositor shall have received notice of the terms of such
settlement at least 30 days
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<PAGE>
prior to such settlement being entered into, and (iii) the Depositor shall not
have reimbursed the Indemnified Party in accordance with such request prior to
the date of such settlement.
The term "liability," as used in this Section 5.12, shall include any
losses, claims, damages, expenses (including without limitation the Trustee's
costs and expenses in defending itself against any losses, claims or
investigations of any nature whatsoever to the extent the Trustee is not
reimbursed as contemplated in this Section 5.12) or other liabilities, joint or
several, arising for any reason (including without limitation violation of
applicable laws or trademarks or service marks).
The obligations of the Depositor under this Section 5.12 (i) shall be
in addition to any liability which the Depositor may otherwise have, (ii) 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 Securities Exchange Act of 1934, as amended (iii) shall survive the
termination of this Agreement and the resignation or removal of the Trustee, and
(iv) shall be limited to the extent set forth in the Depositor's certificate of
incorporation.
Section 5.13 Undertaking for Costs.
----------------------
All parties to this Agreement agree, and each Holder of any Certificate
by such Holder's acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any Proceeding for the enforcement of
any right or remedy under this Agreement, or in any Proceeding against the
Trustee for any action taken, suffered or omitted by it as Trustee, the filing
by any party litigant in such Proceeding of an undertaking to pay the costs of
such Proceeding and that such court may in its discretion assess reasonable
costs, including reasonable attorneys, fees, against any party litigant in such
Proceeding, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this Section 5.13
shall not apply to:
(a) any Proceeding instituted by the Trustee;
(b) any Proceeding instituted by any Holder, or group of Holders, in
each case holding in the aggregate Outstanding Certificates
representing more than 10% of the Voting Rights; or
(c) any Proceeding instituted by any Holder for the enforcement of the
payment of Principal or Interest on or after the respective due dates
expressed in such Certificate and in this Agreement (or, in the case of
redemption, on or after the Redemption Date).
Section 5.14 Charges and Expenses.
--------------------
Except as otherwise provided in this Agreement, (i) no current or
future charges, fees and expenses of the Trustee shall be payable by or withheld
from any Person other than the Depositor, except for any taxes and other
governmental charges, and (ii) in full payment and satisfaction of all other
charges and expenses of the Trustee (including, in each case, fees and expenses
of counsel) incidental to the performance of its obligations hereunder, the
Depositor shall pay the Trustee an amount determined in accordance with a
separate agreement between it and the Trustee. The Trustee shall not be released
from any of its duties hereunder as a result of the failure of the Depositor to
pay such amount.
Section 5.15 Trustee Reports.
---------------
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<PAGE>
(a) So long as the Certificates are held in DTC's book-entry only
system, annual unaudited reports setting forth the amounts of payments on the
Certificates, and whether such amounts are principal or interest shall be
prepared by the Trustee and sent to DTC. To the extent the Depositor fails to
provide the Trustee with a copy of any report referred to in Section 5.09(a) (i)
herein prior to the 10th Business Day preceding the applicable filing date
therefor as required by such provisions, the Trustee shall request the Depositor
to prepare and file such report and, if the Depositor fails to do so, shall
cause such report to be prepared and filed and the Depositor shall reimburse the
Trustee for its reasonable expenses incurred in connection therewith. Any such
expenses not reimbursed by the Depositor shall be borne by the Holders.
(b) The Trustee shall, on behalf of the Trust, prepare and file 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), if any,
which the Trust may be required to file with the Commission pursuant to Section
13 or 15(d) of the Exchange Act (collectively, "reports") with respect to the
Trust.
ARTICLE VI HOLDERS' LISTS AND REPORTS
Section 6.1 Depositor to Furnish Names and Addresses of Holders to Trustee.
--------------------------------------------------------------
The Depositor shall furnish or cause to be furnished to the Trustee not
more than five days before each Interest Payment Date or Redemption Date, and at
such other times as the Trustee may request in writing, a list, in such form as
the Trustee may reasonably require, to the extent such information is in the
possession or control of the Depositor or any of its paying agents, of the
Holders of Certificates as of the close of business on the applicable record
date of the underlying Underlying Securities; provided, however, that so long as
the Trustee maintains the Certificate Register, no such list shall be required
to be furnished.
Section 6.2 Preservation of Information, Communications to Holders.
-------------------------------------------------------
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders of Certificates
contained in the most recent list furnished to the Trustee as provided
in Section 6.01 and the names and addresses of Holders of Certificates
received by the Trustee in its capacity as Certificate registrar. The
Trustee may destroy any list furnished to it as provided in such
Section 6.01 upon receipt of a new list so furnished.
(b) Holders shall have the right to communicate pursuant to TIA
Section 312(b) with other Holders with respect to their rights under
this Agreement or under the Certificates.
(c) The Depositor, the Trustee and the Certificate registrar shall
have the protection of TIA Section 312(c).
Section 6.3 Reports by Trustee.
------------------
If required by TIA Section 313(a), within 60 days after December 31 of
each year, the Trustee shall mail to (i) each Holder as required by TIA Section
313(c) and (ii) the Depositor, a brief report dated as of such date that
complies with TIA Section 313(a). The Trustee also shall comply
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<PAGE>
with TIA Section 313(b). A copy of any report delivered pursuant to this Section
6.03 shall, at the time of its mailing to Holders and the Depositor, be filed by
the Trustee with the Commission and each stock exchange, if any, on which the
Certificates are listed. The Depositor shall notify the Trustee if and when the
Certificates are listed on any stock exchange.
ARTICLE VII AMENDMENT AND TERMINATION
Section 7.1 Amendment.
---------
The Trust Agreement may be amended or supplemented from time to time by
the Depositor and the Trustee without the consent of any of the
Certificateholders to (a) cure any ambiguity, (b) correct or supplement any
provisions herein which may be inconsistent with any other provisions herein,
(c) modify, eliminate or add to any of its provisions to such extent as shall be
necessary or appropriate to maintain the qualification of the Trust (or certain
assets thereof) as a grantor trust under the Code at all times that any
Certificates are outstanding or (d) make any other provisions with respect to
matters or questions arising under the Trust Agreement or matters arising with
respect to the Trust which are not covered by the Trust Agreement which shall
not be inconsistent with the provisions of the Trust Agreement, provided that
such action shall not adversely affect in any material respect the interests of
any Certificateholder. Any such amendment or supplement shall be deemed not to
adversely affect in any material respect any Certificateholder if there is
delivered to the Trustee written notification from each Rating Agency that rated
the applicable Certificates at the request of the Depositor to the effect that
such amendment or supplement will not cause that Rating Agency to reduce the
then current rating assigned to such Certificates.
The Trust Agreement may also be amended from time to time by the
Depositor and the Trustee with the consent of the Holders of Certificates
entitled to at least 51% of the Voting Rights for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Trust Agreement or of modifying in any manner the rights of the Holders of
Certificates; provided, however, that no such amendment shall (A) reduce in any
manner the amount of, or delay the timing of, payments received on any
Underlying Security which are required to be distributed on any Certificate
without the consent of the Holder of such Certificate, (B) adversely affect in
any material respect the interests of the Holders of any Class of Certificates
in a manner other than as described in (A), without the consent of the Holders
of Certificates of such Class evidencing at least 51% of the Voting Rights of
such Class, or (C) reduce the aforesaid percentage of Certificates the Holders
of which are required to consent to any such amendment, without the consent of
such Holders of all Certificates then outstanding. For purposes of the giving or
withholding of consents pursuant to this Section, Certificates registered in the
name of the Depositor or an Affiliate shall be entitled to Voting Rights with
respect to matters affecting such Certificates.
Promptly after the execution of any such amendment the Trustee shall
furnish a copy of such amendment to each Certificateholder.
It shall not be necessary for the consent of Certificateholders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
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<PAGE>
Prior to entering into any amendment to the form of the Certificates or
this Agreement, the Trustee shall be entitled to receive an Opinion of Counsel
to the effect that such amendments are authorized or permitted by this Agreement
and that all conditions precedent to the execution and delivery of such
amendments have been satisfied. The costs of providing such Opinion of Counsel
shall be borne by the Holders requesting that the Trustee execute and deliver
such amendment. The Trustee shall notify the Holders of the estimated expense of
any such Opinion of Counsel.
Section 7.2 Termination.
-----------
This Agreement shall terminate one year following the payment upon
maturity (or any earlier redemption) by the respective Issuers of the entire
principal amount (and any redemption premium) of the Underlying Securities or,
in the event of a default on the Underlying Securities, one year following
receipt by the Holders of all amounts to which the Holders are entitled pursuant
to Section 5.03(b) hereof. If any Certificates shall remain outstanding after
the date of termination of this Agreement, the Trustee shall not perform any
further acts under this Agreement, except that the Trustee shall hold the
proceeds of any payment, without liability for interest, for the pro rata
benefit of the Holders of Certificates which have not theretofore been
surrendered for payment unless otherwise required by applicable law. Upon the
termination of this Agreement, the Depositor shall be discharged from all
obligations under this Agreement except for its obligations to the Trustee under
Sections 5.15 and 5.13 hereof.
If, at any time when the Trust is subject to the reporting requirements
of the Exchange Act the Underlying Securities Issuer ceases to be subject to
such periodic reporting requirements, or the Underlying Securities Issuer fails
to make such periodic reports available to the Trustee, the Trustee shall notify
the Certificateholders of such event and declare a "Termination Event" to have
occurred.
Upon the declaration of a Termination Event, the Trustee shall
terminate the book-entry registration of the Trust Certificates and notify the
Underlying Security Trustee of such action. If the Underlying Security Issuer
fails to resume supplying its periodic reports under the Exchange Act within
[180] days of such termination and notice, the Trustee shall [either (i) arrange
for the sale of the Underlying Security for an amount at least equal to the
Redemption Price or (ii)] allow the Depositor to terminate the Trust in
accordance with this Section 7.2.
ARTICLE VIII REDEMPTION OF CERTIFICATES
Section 8.1 Redemption.
----------
If the Underlying Securities are redeemed in whole or in part on or
after the First Call Date, upon actual receipt by the Trustee of notice of such
redemption, the Trustee shall, in accordance with the provisions of this Article
VIII, redeem a principal amount of Pooled Certificates, Callable Principal
Certificates or Callable Stripped Underlying Security Certificates, as
applicable, equal to the principal amount of the Underlying Securities of such
issue held in trust hereunder so redeemed, and if the Underlying Securities are
redeemed in part, then the Trustee shall select the Certificates to be redeemed
by lot in such manner as the Trustee deems fair and appropriate. In the absence
of the actual notice described in this Section 8.01, the Trustee shall be under
no obligation to effect
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<PAGE>
the redemption required by this Section 8.01. Upon redemption of any
Certificate, the Holder shall have no right to receive payments on any Interest
maturing after the Redemption Date.
Section 8.2 Notice of Redemption.
--------------------
Notice of redemption shall be given by the Trustee to each Holder of
any Certificate to be redeemed as provided in Section 9.04 hereof within thirty
(30) days after notice of redemption of the underlying Underlying Securities has
been given by the Issuer, trustee or paying agent of or for the Underlying
Securities, as the case may be (but not less than fifteen days prior to the
redemption date); provided, however, that the Trustee shall not be required to
give any notice of redemption less than five (5) Business Days after the date it
receives notice of such redemption. All notices of redemption shall be mailed to
each Holder at such Holder's last address on the Certificate Register and shall
state the Redemption Date, the date the Certificates are to be redeemed, the
amount payable on such date, the place at which Certificates are to be
surrendered for payment and that interest on amounts redeemed shall cease to
accrue on and after the Redemption Date.
ARTICLE IX MISCELLANEOUS
Section 9.1 Exclusive Benefit of Parties and Holders of Certificates;
---------------------------------------------------------
Effective Date.
---------------
This Agreement is for the exclusive benefit of the parties hereto,
their respective successors hereunder, and Holders of Certificates, and shall
not be deemed to give any legal or equitable right, remedy or claim to any other
Person whatsoever. The Holders from time to time shall be beneficiaries of this
Agreement and shall be bound by all the terms and conditions hereof and of the
Certificates by acceptance of delivery thereof. This Agreement shall become
effective as to the Trustee and the Depositor for each series of Certificates
upon the execution of the Series Trust Agreement for such series by the Trustee
and Depositor and the receipt by the Trustee of the Underlying Securities
deposited therewith.
Section 9.2 Invalidity of Provisions.
------------------------
In case any one or more of the provisions contained in this Agreement
or contained in the Certificates should be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein or therein shall in no way be affected,
prejudiced or disturbed thereby.
Section 9.3 Conflict with Trust Indenture Act.
---------------------------------
(a) If any provision hereof limits, qualifies or conflicts with another
provision hereof that is required to be included in this Agreement by
any of the provisions of the TIA, such required provision shall
control.
(b) The provisions of TIA Sections 310 through 317 that impose duties
on any Person (including the provisions automatically deemed included
herein unless expressly excluded by this Agreement) are a part of and
govern this Agreement, whether or not physically contained herein.
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<PAGE>
Section 9.4 Notices.
-------
Any and all notices to be given to the Depositor shall be deemed to
have been duly given if personally delivered or sent by mail, first class, post
prepaid, or telegram or telex or facsimile confirmed by letter addressed to the
Depositor at the Depositor Address set forth in the Series Trust Agreement
relating to Certificates evidencing Underlying Securities deposited by the
Depositor, or at any other place as the Depositor shall notify the Trustee in
writing from time to time.
Any and all notices to be given to the Trustee shall be deemed to have
been duly given if personally delivered or sent by mail, first class, post
prepaid, or facsimile confirmed by letter addressed to the Trustee at the
Trustee Address set forth for notice to the Trustee in the Series Trust
Agreement, or to such other place which the Trustee may have designated in
writing to the Depositor.
Any and all notices to be given to the Rating Agency shall be deemed to
have been duly given if personally delivered or sent by mail, first class, post
prepaid, or facsimile confirmed by letter addressed to the Rating Agency at the
Rating Agency Address set forth in the Series Trust Agreement, or to such other
place which the Rating Agency may have designated in writing to the Depositor
and the Trustee.
All other notices to be given to any Holder shall be deemed to have
been duly given if given by mail, first-class postage prepaid, to each Holder at
such Holder's address as it appears in the Certificate Register. Neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders.
All notices specified to be given "promptly" hereunder shall be given
no later than the second Business Day after the event which results in the
requirement that the notice be delivered.
Section 9.5 Governing Law; Forum.
--------------------
This Agreement and the Certificates shall be governed by, and construed
in accordance with, the laws of the State of New York. Any action or proceeding
alleging a breach of an obligation under this Agreement shall be prosecuted only
in a state or federal court located in the State of New York, County of New
York.
Section 9.6 Headings.
--------
The headings of articles and sections in this Agreement have been
inserted for convenience only and are not to be regarded as a part of this
Agreement or to have any bearing upon the meaning or interpretation of any
provision contained herein or in the Certificates.
Section 9.7 Covenant of Depositor and Trustee Not to Place Trust in
-------------------------------------------------------
Bankruptcy.
-----------
Each party hereto covenants that it shall not, until at least one year
and one day after the termination of this Agreement, take any action to file an
involuntary bankruptcy petition against the Trust or cause the Trust to file a
voluntary bankruptcy petition.
Section 9.8 Trust Not to Merge.
------------------
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For so long as any Certificate remains outstanding, the Trust shall not
merge or consolidate with or into any Person, or transfer all or substantially
all of its assets to any Person.
Section 9.9 Incurrence of Indebtedness.
--------------------------
For so long as any Certificate remains outstanding, the Trust shall not
create, assume, incur, suffer to exist or otherwise become or remain liable in
respect of any indebtedness.
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<PAGE>
EXHIBIT C
TO SERIES TRUST AGREEMENT
TRUST CERTIFICATES
issued by
FINANCIAL INCOME SECURITIES TRUST NFSC 2000-_ FOR [UNDERLYING SECURITIES]
POOLED CERTIFICATE (principal amount $__ per
certificate) For a Pro Rata Share of All Interest
Payments on the [Underlying Securities] and All
Principal Payments and
Redemption Premium, If Any, Due on the Stated Maturity
Date Indicated Below or on any Previous Call for Redemption on
[UNDERLYING SECURITIES]
Certificate No. 1 Face Amount: $__,000,000
Number of Certificates: __,000,000
CUSIP No.: __________ Stated Maturity Date: ________ __, 20__
CEDE & CO., or registered assigns, is the owner of the face amount set forth
above of certificates evidencing 100% beneficial ownership of NFSC Trust 2000-_
for [Underlying Securities] (the "Issuer"), whose sole asset consists of
$__,000,000 of [Underlying Securities] (the "Underlying Securities"). The sole
obligor with respect to such Underlying Securities is the issuer of the
Underlying Securities named above (the "Underlying Issuer") or any other
entities obligated to make payments to or on behalf of the Underlying Issuer (or
their trustees or other applicable fiduciaries) with respect to the Underlying
Securities. The Underlying Securities are being held in a trust account by
[_________________], as Trustee, pursuant to the terms of a Trust Agreement
dated as of ________ __, 2000 (the "Agreement"), including the Standard Terms
and Provisions of Series Trust Agreement appended thereto and all other
exhibits, schedules, appendices, supplements and amendments thereto, between
National Financial Securities Corporation, as Depositor, and the Trustee,
pursuant to which this and other certificates (the "Certificates"), evidencing
the right to receive all interest and principal payments, including the
redemption premiums, if any, but excluding the Retained Amount (as defined in
the Agreement), if any, on the Underlying Securities, are executed and delivered
by the Trustee. This Certificate is subject to the provisions of and is entitled
to the benefits of the Agreement, which may be inspected by the holder hereof at
the Designated Office in New York City of the Trustee. The owner of this
Certificate, by its acceptance hereof, agrees to be bound by the terms and
conditions of the Agreement. Capitalized terms used but not defined herein shall
have the meanings set forth in the Agreement.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
<PAGE>
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
The Underlying Securities will be held in an account of the Trustee at DTC in
book-entry credit form. The Trustee will pay to the Holder of this Certificate
its pro rata share of all amounts received as payments on the Underlying
Securities, promptly after receipt, less any amounts required to be withheld
from or by the Trustee pursuant to applicable law, in lawful money of the United
States of America, (i) if the Holder is The Depository Trust Company ("DTC") or
its nominee or any successor depository or nominee thereof, by wire transfer of
immediately available funds, and (ii) if the Holder is any other person, by
check in immediately available funds sent by first-class mail to the address of
the Holder hereof set forth in the Certificate Register.
In the event the Trustee receives money or other property in connection with the
payment of principal (or actual notice that such moneys or other property will
be received), other than in connection with a redemption, prior to the Stated
Maturity Date, the Trustee shall promptly give notice, as provided in the
Agreement, to the Holder. Such notice shall state that, not later than ninety
(90) days after the receipt of such moneys or other property, the Trustee shall
distribute such moneys or other property pro rata to the Holders of
Certificates.
As provided in the 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
corporate trust office of the Trustee at [________________], duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
series having the Stated Maturity Date set forth on the face hereof, of
Authorized Denominations of $__ or greater multiples of $__, and having the same
aggregate face amount, will be issued to the designated transferee or
transferees. Under the Agreement, the Trustee is required, when making any
payment to a Holder, to round down such payment to the nearest whole cent.
The Certificates are issuable only in registered form in Authorized
Denominations. As provided in the Agreement and subject to certain limitations
therein set forth, such Certificates are exchangeable for Certificates of the
same series, having the same Stated Maturity Date and of a like aggregate face
amount, as requested by the Holder surrendering the same.
For any such registration of transfer or exchange, the Trustee may require
payment of the then applicable service charge and of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith. Prior to
due presentment of this Certificate for registration of transfer, the Trustee
and any agent of the Trustee may treat the person in whose name this Certificate
<PAGE>
is registered as the owner hereof for all purposes, whether or not this
Certificate be overdue, and neither the Trustee nor any such agent shall be
affected by notice to the contrary.
This Certificate shall not be valid or become obligatory for any purpose unless
and until duly executed by the Trustee by manual signature.
Dated: _______ __, 2000
[__________________], as Trustee
By: ____________________________________
Authorized Signatory
Authentication
This is one of the Certificates referred to in the
within-mentioned Trust Agreement.
[____________________], as Trustee
By:_____________________________________
Authorized Signatory
<PAGE>
TRANSFER FORM
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto____________________________________________________________________________
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint__________________________________________________________
________________________________________________________________________________
attorney to transfer the within Certificate on the books kept for the
registration thereof, with full power of substitution in the premises.
Optional:
[Insert wire transfer instructions for transferee.] Neither the transferor nor
the Trustee shall have any responsibility for the accuracy of such wire transfer
instructions, if provided.
Dated:___________
_______________________________________
(Signature)
NOTE: Signature must conform in every
particular to the name in which this
security is registered, without any
alteration or change whatsoever.
Signature must be guaranteed by an "eligible
guarantor institution" meeting the
requirements of the Trustee, which
requirements include membership or
participation in STAMP or such other
"signature guarantee program" as may be
determined by the Trustee in addition to, or
in substitution for, STAMP, all in
accordance with the Securities Exchange Act
of 1934.
<PAGE>
EXHIBIT D
TO SERIES TRUST AGREEMENT
OFFICER'S CERTIFICATE
OF [TRUSTEE]
The undersigned, being a [Senior Vice President] of [TRUSTEE] (the
"Bank"), does hereby certify and agree on behalf of the Bank, for the benefit of
National Financial Securities Corporation (the "Depositor") and the beneficial
owners of the Certificates (as defined below), that:
1. The Trust Agreement dated as of ________ __, 20__, including the Standard
Terms and Provisions of Series Trust Agreement (the "Trust Agreement"),
between the Depositor and[TRUSTEE], as Trustee (the "Trustee"), has been
duly executed and delivered in the name of and on behalf of the Bank.
2. Pursuant to the provisions of Section 2.01 of the Trust Agreement, the
Trustee has issued $__,000,000 face amount of Trust Certificates (the
"Certificates").
3. The Bank is a [state chartered bank and trust company organized under the
laws of the State of New York] [whose deposits are insured by the FDIC],
and has the power to act as trustee with respect to the Certificates.
4. Immediately prior to the transfer of any of the [UNDERLYING SECURITIES]
(the "Underlying Securities") to the Trustee pursuant to the Trust
Agreement, the Trustee did not have record or beneficial ownership of such
Underlying Securities.
5. By means of separate recordation upon the books of the Trustee, or by
physical segregation, if appropriate, the Underlying Securities will always
be segregated and kept separate from the assets of the Bank and from all
other trust or fiduciary accounts, and will always be specifically
identified as property held subject to a trust. The Trust Agreement will
always be maintained as an official record in the books and records of the
Trustee. The Trustee will always hold the Underlying Securities as required
by the Trust Agreement, will always keep its trust records separate and
distinct from its other records, will always ensure its trust records are
complete, will always comply with all applicable laws, regulations, and
rules relating to the custody of assets held in a trust relationship, and
will always take whatever steps are necessary to ensure that, should the
[superintendent of banks for the State of New York (the "Superintendent")]
take possession of the Trustee, or a receiver or liquidator for the Trustee
be appointed, at such time the Underlying Securities would be identifiable
as property held subject to the trust relationship by the Trust Agreement.
At all times that the Underlying Securities are credited to an account
maintained on behalf of the Trustee at The Depository Trust Company of New
York, the Bank will reflect on its records that the Underlying Securities
are held in a trust account subject to the Trust Agreement, which account
will contain no property of the Trustee in its individual capacity.
6. At no time will the Bank receive a loan or other credit from a third person
because of such third party's reliance upon the Bank's apparent ownership
of the beneficial interests in the Underlying Securities.
7. Each person who, on behalf of the Bank, executed the Trust Agreement was at
the date thereof and is now duly authorized as a signatory of the Bank and
duly authorized to perform such acts
<PAGE>
at the respective times of such acts and the signatures of such persons
appearing on such documents are their genuine signatures.
8. The Trust Agreement has been duly and validly authorized, executed and
delivered by the Bank and is enforceable against the Bank in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and by general principles of equity.
[SIGNATURE PAGE FOLLOWS]
8.1-2
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this certificate to be
duly executed.
[____________________], as Trustee
By________________________________
Name:
Title:
Dated: ________ __, 20__
8.1-3
