SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: (Date of earliest event reported) March 31, 1998
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Lehman ABS Corporation
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(Exact Name of Registrant as Specified in Charter)
Delaware 1-11661 13-3447441
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(State of Incorporation) (Commission (I.R.S. Employer
File Number) Identification No.)
3 World Financial Center
New York, New York 10285
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including area code (212) 526-5594
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. Other Events
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On March 31, 1998, Lehman ABS Corporation ("LABS") transferred
$65,775,000 aggregate principal amount of 6.95% Debentures due December 15,
2097, comprising a portion of a fixed rate, publicly issued, unsecured debt
security issue (the "Underlying Securities") of Archer-Daniels-Midland Company
(the "Underlying Securities Issuer") to the Corporate Bond-Backed Certificates,
Series 1998-ADM-1 Trust (the "Trust") established by LABS, which issued
Corporate Bond-Backed Certificates, Series 1998-ADM-1 (the "Certificates"),
issued pursuant to a Standard Terms for Trust Agreements, dated as of February
25, 1998 (the "Standard Terms"), between LABS and The Bank of New York, as
trustee (the "Trustee"), as supplemented by a Series Supplement, dated as of
March 30, 1998 (the "Series Supplement" and, together with the Standard Terms,
the "Trust Agreement"), between LABS and the Trustee. The Certificates were
purchased by Lehman Brothers Inc. ("Lehman") from LABS pursuant to an
underwriting agreement, dated March 30, 1998 (the "Underwriting Agreement"),
between LABS and Lehman.
ITEM 7. Financial Statements and Exhibits
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(a) Financial Statements - Not Applicable
(b) Pro Forma Financial Information - Not Applicable
(c) Exhibits
Item 601(a)
of Regulation S-K
Exhibit No. Description
4.1 Series Supplement, dated as of March 30, 1998, between Lehman
ABS Corporation, as Depositor, and The Bank of New York, as
Trustee, together with the Standard Terms for Trust
Agreements, dated as of February 25, 1998, between Lehman ABS
Corporation, as Depositor, and The Bank of New York, as
Trustee
99.1 Structural Term Sheet - Indicative Summary of Terms for
Corporate Bond-Backed Certificates, Series 1998-ADM-1,
issued March 31, 1998.
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Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
LEHMAN ABS CORPORATION
/s/ Mark L. Zusy
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Name: Mark L. Zusy
Title: Senior Vice President
March 30, 1998
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INDEX TO EXHIBITS
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Exhibit No. Description
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4.1 Series Supplement, dated as of March
30, 1998, between Lehman ABS
Corporation, as Depositor, and The
Bank of New York, as Trustee,
together with the Standard Terms for
Trust Agreements, dated as of
February 25, 1998, between Lehman
ABS Corporation, as Depositor, and
The Bank of New York, as Trustee.
99.1 Structural Term Sheet -
Indicative Summary of Terms
for Corporate Bond-Backed
Certificates, Series 1998-
ADM-1, issued March 31,
1998.
EXHIBIT 4.1
EXECUTION COPY
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SERIES SUPPLEMENT
CORPORATE BOND-BACKED CERTIFICATES
SERIES 1998-ADM-1 TRUST
between
LEHMAN ABS CORPORATION,
as Depositor
and
THE BANK OF NEW YORK,
as Trustee
CORPORATE BOND-BACKED CERTIFICATES
Dated as of March 30, 1998
================================================================================
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TABLE OF CONTENTS
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Section 1. Incorporation of Standard Terms............................ 1
Section 2. Definitions................................................ 2
Section 3. Designation of Trust and Certificates......................11
Section 4. Satisfaction of Conditions to Initial Execution and
Delivery of Trust Certificates.............................12
Section 5. Distributions..............................................12
Section 6. Trustee's Fees.............................................14
Section 7. Optional Exchange..........................................15
Section 8. Events of Default..........................................16
Section 9. Miscellaneous..............................................16
Section 10. Notices....................................................18
Section 11. Governing Law..............................................19
Section 12. Counterparts...............................................19
Section 13. Termination of the Trust...................................19
Section 14. Sale of Underlying Securities..............................19
Section 15. Amendments.................................................20
Section 16. Voting of Underlying Securities, Modification of Indenture.20
SCHEDULE I SERIES 1998-ADM-1 UNDERLYING SECURITIES
SCHEDULE
SCHEDULE II AMORTIZATION SCHEDULE
SCHEDULE III ALLOCATION SCHEDULE
EXHIBIT A STANDARD TERMS FOR TRUST AGREEMENTS
EXHIBIT B-1 FORM OF TRUST CERTIFICATE CLASS A-1
i
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EXHIBIT B-2 FORM OF TRUST CERTIFICATE CLASS A-2
EXHIBIT C FORM OF MARKET AGENT AGREEMENT
ii
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SERIES SUPPLEMENT
CORPORATE BOND-BACKED CERTIFICATES
Series 1998-ADM-1 TRUST
SERIES SUPPLEMENT, Series 1998-ADM-1, dated as of March 30,
1998 (the "Series Supplement"), by and between LEHMAN ABS CORPORATION, as
Depositor (the "Depositor"), and THE BANK OF NEW YORK, as Trustee (the
"Trustee").
W I T N E S S E T H:
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WHEREAS, the Depositor desires to create the Trust designated
herein (the "Trust") by executing and delivering this Series Supplement, which
shall incorporate the terms of the Standard Terms for Trust Agreements, dated as
of February 25, 1998 (the "Standard Terms"; together with this Series
Supplement, the "Trust Agreement"), by and between the Depositor and the
Trustee, as modified by this Series Supplement;
WHEREAS, the Depositor desires to deposit the Underlying
Securities set forth on Schedule I attached hereto (the "Underlying Securities
Schedule") into the Trust;
WHEREAS, in connection with the creation of the Trust and the
deposit therein of the Underlying Securities, it is desired to provide for the
issuance of trust certificates (the "Certificates") evidencing undivided
interests in the Trust; and
WHEREAS, the Trustee has joined in the execution of the
Standard Terms and this Series Supplement to evidence the acceptance by the
Trustee of the Trust;
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual covenants expressed herein, it is hereby agreed by and between the
Depositor and the Trustee as follows:
Section 1. Incorporation of Standard Terms. Except as
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otherwise provided herein, all of the provisions of the Standard Terms, a copy
of which is attached hereto as Exhibit A, are hereby incorporated herein by
reference in their entirety, and this Series Supplement and the Standard Terms
shall form a single agreement between the parties. In the event of any
inconsistency between the
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provisions of this Series Supplement and the provisions of the Standard Terms,
the provisions of this Series Supplement will control with respect to the Series
1998-ADM-1 Certificates and the transactions described herein.
Section 2. Definitions. (a) Except as otherwise specified
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herein or as the context may otherwise require, the following terms shall have
the respective meanings set forth below for all purposes under this Series
Supplement. (Section 2(b) below sets forth terms listed in the Standard Terms
which are not applicable to this Series.) Capitalized terms used but not defined
herein shall have the meanings assigned to them in the Standard Terms.
"Allocation Ratio" shall mean the ratio of the Class A-1
Allocation to the Class A-2 Allocation.
"Available Funds" shall have the meaning specified in the
Standard Terms, except that investment income earned on funds invested pursuant
to Section 3.05 of the Standard Terms shall be included in Available Funds.
"Business Day" shall mean any day other than (i) Saturday and
Sunday or (ii) a day on which banking institutions in New York City, New York
are authorized or obligated by law or executive order to be closed for business
or (iii) a day that is not a business day for the purposes of the Underlying
Securities or the Indenture to the Underlying Securities.
"Certificate Account" shall have the meaning specified in the
Standard Terms.
"Certificates" shall have the meaning specified in Section
3(a) hereof.
"Class A-1 Allocation" means the present value (discounted at
the rate of 6.861% per annum) of the unpaid interest coupons due or to become
due on the Underlying Securities on or prior to the Final Scheduled Distribution
Date (assuming that the scheduled payments on the Underlying Securities were
paid when due according to their original terms and the Underlying Securities
were not redeemed prior to their stated maturity).
"Class A-1 Certificates" shall mean the Certificates, in the
form attached hereto as Exhibit B-1, to be issued by the Trust representing a
proportionate undivided beneficial ownership interest in certain distributions
to be made by the Trust and having the characteristics described herein and in
the Certificates.
"Class A-2 Allocation" means the sum of the present values
(discounted at the rate of 6.861% per annum) of (i) the unpaid interest coupons
due or to become due on the Underlying Securities after the Final Scheduled
Distribution Date and (ii)
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the principal amount of the Underlying Securities (in each case assuming that
the scheduled payments on the Underlying Securities were paid when due according
to their original terms and the Underlying Securities were not redeemed prior to
their stated maturity).
"Class A-2 Certificates" shall mean the Certificates, in the
form attached hereto as Exhibit B-2, to be issued by the Trust representing a
proportionate undivided beneficial ownership interest in certain distributions
to be made by the Trust and having the characteristics described herein and in
the Certificates.
"Closing Date" shall mean March 31, 1998.
"Collection Period" shall mean, (i) with respect to each June
Distribution Date, the period beginning on the day after the December
Distribution Date of the previous year and ending on such June Distribution
Date, inclusive and, (ii) with respect to each December Distribution Date, the
period beginning on the day after the June Distribution Date of that year and
ending on such December Distribution Date, inclusive, except for the initial
Distribution Date, as to which the Collection Period shall be the period
beginning on December 15, 1997 and ending on the June 15, 1998 Distribution
Date; provided, however, that clauses (i) and (ii) shall be subject to Section
9(f) hereof.
"Corporate Trust Office" shall mean the office of The Bank of
New York located at 101 Barclay Street, New York, New York 10286.
"Currency" shall mean United States Dollars.
"Depository" shall mean The Depository Trust Company.
"Distribution Date" shall mean June 15 and December 15 of each
year (or if such date is not a Business Day, the next succeeding Business Day),
commencing on June 15, 1998 and ending on the Final Scheduled Distribution Date.
"Distribution Year" shall mean the period commencing on the
day following either the Closing Date or any March Distribution Date and ending
on the following March Distribution Date.
"Eligible Account" shall have the meaning specified in the
Standard Terms.
"Eligible Investments" shall be as defined in the Standard
Terms; provided, however, that (i) the minimum required rating for long-term
instruments will be equal to the rating of the Underlying Securities, and (ii)
the rating of any short-term instruments will be A-1+ by S&P and P1 by Moody's;
and provided,
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further, that any such investment matures no later than the Business Day prior
to any related Distribution Date and that any such investment be denominated in
U.S.
dollars.
"Event of Default" shall mean (i) a default in the payment of
any interest on any Underlying Security after the same becomes due and payable
(subject to any applicable grace period), (ii) a default in the payment of the
principal of or any installment of principal of any Underlying Security when the
same becomes due and payable and (iii) any other event specified as an "Event of
Default" in the Underlying Securities Indenture.
"Extraordinary Trust Expenses" shall have the meaning
specified in the Standard Terms.
"Exchange Request" shall have the meaning specified in Section
7(b) hereof.
"Final Scheduled Distribution Date" shall mean: December 15,
2017.
"Fixed Pass-Through Rate" shall mean: 6.50% per annum.
"Interest Accrual Period" shall mean for any Distribution
Date, the period from and including the preceding Distribution Date (or in the
case of the first Interest Accrual Period, from and including December 15, 1997)
to but excluding the current Distribution Date.
"Liquidation Price" shall mean the price at which the Market
Agent sells the necessary portion, if any, of the Underlying Securities on
behalf of the Trustee.
"Liquidation Proceeds" shall have the meaning specified in the
Standard Terms.
"Maturity Date" shall have the meaning specified Schedule I
hereto.
"Market Agent" shall mean Lehman Brothers Inc.
"Market Agent Agreement" shall mean the agreement dated as of
the Closing Date between Lehman Brothers Inc., solely in its capacity as Market
Agent, and the Trust, substantially in the form attached hereto as Exhibit C.
"Moody's" shall mean Moody's Investors Service, Inc.
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"Necessary Third Party Expenses" shall mean the costs and
expenses of the Trust's or Trustee's counsel, accountants and other experts for
ordinary or routine consultation or advice in connection with the establishment,
administration and termination of the Trust and the preparation of tax returns
of the Trust. Such Necessary Third Party Expenses are not to exceed $1,500 per
Distribution Year, subject to the limitations set forth in Section 6(a) herein.
Such term does not include Extraordinary Trust Expenses.
"Optional Exchange" shall mean the exchange of the
Certificates by the Trust pursuant to Section 7 hereof.
"Optional Exchange Date" shall mean any Distribution Date on
which Underlying Securities subject to Optional Exchange are distributed to the
Depositor or any of its Affiliates, as a Certificateholder.
"Ordinary Expenses" shall mean the Trustee's ordinary expenses
and overhead in connection with its services as Trustee, including the items
referred to in the definition of Ordinary Expenses in the Standard Terms with
the exception of Necessary Third Party Expenses, as defined herein.
"Pass-Through Rate" shall mean: 6.50%.
"Prepaid Ordinary Expenses" shall be zero for this Series.
"Prospectus Supplement" shall mean the Prospectus Supplement,
dated March 27, 1998, relating to the Certificates.
"Rating Agency" shall mean Moody's and S&P.
"Rating Agency Condition" shall have the meaning specified in
the Standard Terms.
"Record Date" shall mean, with respect to each Distribution
Date, the day immediately preceding the related Distribution Date.
"Required Interest" shall have the meaning specified in the
Standard Terms.
"Required Percentage-Amendment" shall be 66-2/3% of the
aggregate Voting Rights.
"Required Percentage-Direction of Trustee" shall be 66-2/3% of
the aggregate Voting Rights.
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"Required Percentage-Remedies" shall be 66-2/3% of the
aggregate Voting Rights.
"Required Percentage-Removal" shall be 66-2/3% of the
aggregate Voting Rights.
"Required Rating" shall mean, in the case of Moody's, the
rating assigned to the Underlying Securities by Moody's as of the Closing Date,
and, in the case of S&P, the rating assigned to the Underlying Securities by S&P
as of the Closing Date.
"S&P" shall mean Standard & Poor's, a division of The
McGraw-Hill Companies, Inc.
"Sale Procedures" shall mean, in connection with any sale of a
portion of the Underlying Securities, the sale of such Underlying Securities to
the highest of not less than three solicited bidders for such Underlying
Securities (one of which bidders may be Lehman Brothers Inc. or one of its
Affiliates; provided, however, that neither Lehman Brothers Inc. nor any of its
Affiliates are obligated to bid, and that such bidders need not be limited to
recognized broker dealers). In the sole judgment of the Market Agent, bids may
be evaluated on the basis of bids for all or a portion of the Underlying
Securities being sold or any other basis selected in good faith by the Market
Agent. The Market Agent shall, prior to any sale of Underlying Securities to
Lehman Brothers Inc. or any of its Affiliates, certify in writing to the Trustee
that any such purchaser submitted the highest of at least three bids and shall
identify the other bidders.
"Series" shall mean Series 1998-ADM-1.
"Special Purpose Corporation" shall mean any corporation that
pursuant to its charter and by laws:
(i) is required to limit its purpose to
those actions that are incidental to structured financing, including, issuing,
selling, delivering, purchasing and investing in (and entering into agreements
in connection with) bonds, notes, debt or equity securities, obligations and
other securities and instruments which will be secured or backed by among other
things (a) one or more pools of receivables, (b) passed-through certificates
evidencing a fractional undivided ownership interest in one more grantors trusts
that own or hold among other things, one or more pools of receivables or
participations or certificates of participation or beneficial ownership in one
or more pools of receivables or (c) other collateral, in each case the
securities of a series which are distributed through one or more public
offerings of such series;
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(ii) in connection with the issuance or
sale of securities or otherwise, is authorized to purchase or otherwise acquire,
own, hold, transfer, convey, pledge, assign, sell, service, finance, refinance
or otherwise deal in or with the passed-through certificates, participation
certificates, receivables and related collateral and to enter into contractual
arrangements with respect thereto;
(iii) while the corporation is solvent, is
not permitted to commence a voluntary case, or consent to an involuntary case
for relief against the corporation under Title 11 of the United States Code, 11
U.S.C." 101 et seq., or file a petition or answer or consent to a petition
seeking (liquidation, reorganization or other relief under any applicable law or
any jurisdiction relating to bankruptcy, insolvency, reorganization or relief of
debtors, or consent to the appointment of a receiver, a liquidators, an
assignee, a trustee, a sequestrator for the corporation or a substantial part of
its property, or make any assignment for the benefit of creditors, or, except as
may be required by any fiduciary obligation of the board of directors or as may
be required by any applicable law, admit in writing its inability to pay its
debts generally as they become due or take any corporate action in furtherance
of any such action without the unanimous consent of the board of directors,
which shall include a certain set number of independent directors whose vote is
required to take any such action;
(iv) will not, without the prior written
consent of any trustee or custodian, from time to time, under amy indenture or
under any participation, pooling or other similar agreement to which the
corporation is a party, do any of the following: (a) engage in any business or
activity other than the business activities which the corporation is permitted
to engage in under its articles of incorporation, (b) dissolve or liquidate, in
whole or in part in accordance with applicable state non-bankruptcy law or (c)
consolidate or merge with or into any other entity or permit any entity to
consolidate or merge with or into the corporation except those permitted under
any indenture or pooling agreement to which the corporation is a party; and
(v) shall at all times (a)(i) maintain
the Corporation's princi- pal executive offices separate and apart from that of
a controlling entity and conspicuously identified as the corporation's office
and (ii) pay fair market rent for its executive office space located in the
offices of any controlling entity, (b) maintain the corporation's books,
financial statements, accounting records and other corporate documents and
records separate from those of any controlling entity or any other entity, (c)
not commingle the corporation's assets with those of any controlling entity or
any other entity, (d) maintain the corporation's bank accounts, payroll and
books of account separate from those of any controlling entity or any entity,
(e) act solely in its corporate name and through its own unauthorized officers
and agents, (f) make investments directly or by brokers engaged and paid by the
corporation or its agents (provided that if any such agent is an Affiliate of
the corporation it shall be
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compensated at a fair market rate for its services), (g) separately manage the
corporation's liabilities from those of any controlling entity, and pay its own
liabilities, including all administrative expenses, from its own separate
assets, and (h) pay from the corporation's assets all obligations and
indebtedness of any kind incurred by the corporation.
The corporation is also required by its charter to abide by
all corporate formalities, including the maintenance of current minute books,
and the corporation must cause its financial statements to be prepared in
accordance with generally accepted accounting principles in manner that
indicates the separate existence of the corporation and its assets and
liabilities and the corporation must not commingle its assets with those of any
controlling entity or other entity. The corporation is also required to (i) pay
all its liabilities, (ii) not assume the liabilities of any controlling entity
and (iii) not guarantee the liabilities of any controlling entity. The
corporation shall not acquire obligations or securities of, or make loans or
advances to, any controlling entity, except for any obligations or loans fully
supported as to principal and interest by an unaffiliated third-party. The
officers and directors of the corporation (as appropriate) must make decisions
with respect to the business and daily operations of the corporation independent
of and not to be dictated by any controlling entity.
"Trustee Fee" shall mean $4,500 per annum payable on each
Distribution Date out of Available Funds. The Trustee Fee payable on the June
15, 1998 Distribution Date shall be $937.50.
"Trust Property" shall mean the Underlying Securities
described on Schedule I hereto and the Certificate Account.
"Underlying Securities" shall mean $65,775,000 aggregate
principal amount of 6.95% Debentures due December 15, 2097 issued by the
Underlying Securities Issuer, as set forth on Schedule I attached hereto.
"Underlying Securities Indenture" shall mean the indenture
pursuant to which the Underlying Securities were issued.
"Underlying Securities Issuer" shall mean
Archer-Daniels-Midland Company.
"Underlying Securities Trustee" shall mean The Chase Manhattan
Bank, formerly known as Chemical Bank.
"Underwriter" shall mean Lehman Brothers Inc., an affiliate of
the Depositor.
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"Voting Rights" shall, in the entirety, be allocated among all
Class A-1 Certificateholders and Class A-2 Certificateholders in accordance with
the Allocation Ratio. Within each such class, Voting Rights shall be allocated
among Certificateholders in proportion to the then unpaid principal amounts of
their respective Certificates.
(b) The terms listed below are not applicable to this Series.
"Accounting Date"
"Administrative Agent"
"Administrative Fee"
"Advance"
"Allowable Expense Amount"
"Basic Documents"
"Calculation Agent"
"Call Premium Percentage"
"Credit Support"
"Credit Support Instrument"
"Credit Support Provider"
"Cut-off Date"
"Eligible Expense"
"Exchange Rate Agent"
"Floating Pass-Through Rate"
"Guaranteed Investment Contract"
"Letter of Credit"
"Limited Guarantor"
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"Limited Guaranty"
"Minimum Wire Denomination"
"Notional Amount"
"Permitted Investments"
"Place of Distribution"
"Predecessor Certificate"
"Purchase Price"
"Purchaser"
"Purchaser Default"
"Required Percentage-Administrative Agent Termination"
"Required Percentage-Waiver"
"Required Premium"
"Required Principal"
"Requisite Reserve Amount"
"Retained Interest"
"Sub-Administration Agreement"
"Sub-Administration Agent"
"Surety Bond"
"Swap Agreement"
"Swap Counterparty"
"Swap Distribution Amount"
"Swap Guarantee"
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"Swap Guarantor"
"Swap Receipt Amount"
"Swap Termination Payment"
Section 3. Designation of Trust and Certificates. (a) The
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Trust created hereby shall be known as the "Corporate Bond-Backed Certificates,
Series 1998-ADM-1 Trust." The Certificates evidencing certain undivided
ownership interests therein shall be known as "Corporate Bond-Backed
Certificates, Series 1998-ADM-1." The Certificates shall consist of the Class
A-1 Certificates and the Class A-2 Certificates (together, the "Certificates").
(b) The Certificates shall be held through the Depository in
book-entry form and shall be substantially in the forms attached hereto as
Exhibits B-1 and B-2. The Class A-1 Certificates shall be issued in minimum
denominations of $100,000, and in integral multiples of $1,000 in excess
thereof. The Class A-2 Certificates shall be issued in minimum denominations of
$100,000, and in integral multiples of $1,000 in excess thereof. One Certificate
of each class may be issued in an amount that is not an integral multiple of the
applicable minimum denomination. Except as provided in the Standard Terms, the
Trust shall not issue additional Certificates or incur any indebtedness.
(c) The Class A-1 Certificates have an initial aggregate
Certificate Principal Amount of $50,694,774. The Class A-2 Certificates have an
initial aggregate Certificate Principal Amount of $65,775,000.
The aggregate "Certificate Principal Amount" of the Class A-1
Certificates will initially be $50,694,774. On any Distribution Date, the
aggregate Certificate Principal Amount will be reduced by the positive
difference between (i) the semiannual fixed payment made on such Distribution
Date and (ii) interest accrued on the aggregate Certificate Principal Amount at
an annual rate of 6.50% compounded semi-annually from the prior Distribution
Date (or, in the case of the initial Distribution Date, such interest accrued
from December 15, 1997). The Certificate Principal Amount of any Class A-1
Certificate will represent a pro rata portion of the then-current aggregate
Certificate Principal Amount of all outstanding Class A-1 Certificates.
The Class A-1 Certificates will be entitled to receive on each
Distribution Date the interest, if any, received on the Underlying Securities,
less the Trustee Fee and applicable accounting fees (not to exceed $1,500 per
annum), which will represent a return of principal on the Class A-1 Certificates
in accordance with the amortization schedule set forth in Schedule II hereto,
and the payment of interest
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at a rate of 6.50% per annum on the outstanding Certificate Principal Amount of
the Class A-1 Certificates.
The aggregate "Certificate Principal Amount" of the Class A-2
Certificates on any determination date will equal the aggregate principal amount
of the Underlying Securities in the Trust as of such date. The Certificate
Principal Amount of any Class A-2 Certificate will represent a pro rata portion
of the then-current aggregate Certificate Principal Amount of all outstanding
Class A-2 Certificates and will equal the principal amount of Underlying
Securities that the holder of such Class A-2 Certificate is entitled to receive
as an in-kind distribution on December 15, 2017. The Class A-2 Certificates will
be issued with an aggregate Certificate Principal Amount of $65,775,000 and will
not be entitled to distributions of interest. Subject to the occurrence of an
optional redemption of the Underlying Securities by the Underlying Securities
Issuer or an advance of the Maturity Date or optional redemption upon the
occurrence of a Tax Event (each as described in Schedule I hereto) to a date
prior to the Final Scheduled Maturity Date, no cash distributions will be made
on the Class A-2 Certificates. Instead, on December 15, 2017, the Class A-2
Certificates outstanding will be entitled to a distribution of all of the
Underlying Securities held by the Trust as of such date. On or prior to the 60th
day preceding December 15, 2017, the Trustee shall request instructions from the
registered holders of the Class A-2 Certificates regarding the account or
accounts to which transfer of the Underlying Securities should be made, and
other information relevant to such transfer.
(d) Any reference to the principal amount of the Certificates
shall be construed as a reference to the remaining unamortized amount of the
Class A-1 Certificates and the Certificate Principal Amount of the Class A-2
Certificates, unless otherwise indicated.
Section 4. Satisfaction of Conditions to Initial Execution and
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Delivery of Trust Certificates. The Trustee hereby acknowledges receipt, on or
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prior to the Closing Date, of:
(i) the Underlying Securities set forth on the
Underlying Securities Schedule; and
(ii) all documents required to be delivered to
the Trustee pursuant to Section 2.01 of the Standard Terms.
Section 5. Distributions. (a) On each applicable Distribution
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Date, the Trustee shall apply solely to the extent of Available Funds in the
Certificate Account as follows (subject to Section 5(c) below) in the following
order of priority:
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(i) first, to the Trustee, the Trustee Fee, the
Necessary Third Party Expenses (in the amount of $750 for each Distribution
Date) and reimbursement for any approved Extraordinary Trust Expenses incurred
by the Trustee in accordance with Section 6(b) below and approved by 100% of the
Certificateholders.
(ii) second, to the holders of the Class A-1
Certificates, interest accrued during the related Interest Accrual Period at the
rate of 6.50% per annum on the principal amount of the Class A-1 Certificates
and principal in an amount that will amortize such Class A-1 Certificates
pursuant to Schedule II hereto.
(iii) third, to the holders of the Class A-1
Certificates, if available, any additional interest owed and paid by the
Underlying Securities Issuer as a result of a delay in the receipt by the
Trustee of any payment on the Underlying Securities;
(iv) fourth, to the holders of the Class A-2
Certificates, on the Final Scheduled Distribution Date only, a distribution of
all Underlying Securities held by the Trust as of such date.
(v) fifth, to the extent there are Available
Funds in the Certificate Account, to any creditors of the Trust in satisfaction
of liabilities thereto.
(b) On any Optional Exchange Date, if applicable, the Trustee
shall distribute to the Depositor, or any of its Affiliates as
Certificateholders, Underlying Securities representing a like percentage of
principal amount of Underlying Securities to the percentages of the Class A-1
Certificates and Class A-2 Certificates being tendered to the Trustee in
accordance with Section 7 hereof.
(c) Notwithstanding any other provision hereof, other amounts
recovered in respect of the Underlying Securities prior to the Final Scheduled
Distribution Date following (i) an acceleration of the date of maturity of the
Underlying Securities or (ii) the redemption or other prepayment of the
Underlying Securities by the Underlying Securities Issuer, shall be allocated
between the Class A- 1 and Class A-2 Certificateholders in accordance with the
Allocation Ratio on the date of such accelerated maturity, redemption or other
prepayment.
(d) Notwithstanding any other provision hereof, in the event
of the occurrence of (i) a payment default on the Underlying Securities or (ii)
an acceleration of the date of maturity of the Underlying Securities in
connection with a default thereon, the Trustee shall make an in-kind
distribution of the Underlying Securities to the Class A-1 and Class A-2
Certificateholders in accordance with the Allocation Ratio, as calculated on the
date of such default, within 30 days after the occurence of such default with
the Underlying Securities being distributed on a pro rata basis within each
respective Certificate Class. If, as a result of the minimum denominations of
the Underlying Securities, the Trustee cannot distribute the
13
<PAGE>
Underlying Securities to the Class A-1 and Class A-2 Certificateholders in
accordance with the Allocation Ratio, the Trustee will be permitted to sell, in
accordance with the Sale Procedures, such minimum principal amount of the
Underlying Securities as will be necessary in order that the Underlying
Securities, together with the proceeds received from the sale of any portion
thereof, may be distributed in accordance with the terms of the immediately
preceding sentence.
Subject to Section 9(f) hereof, to the extent Available Funds
are insufficient to make any required distributions due to any Class of
Certificates on any Distribution Date, any shortfall will be carried over and
will be distributed on the next Distribution Date on which sufficient funds are
available on the Available Funds to pay such shortfall.
Section 6. Trustee's Fees. (a) As compensation for its
--------------
services hereunder, the Trustee shall be entitled to the Trustee Fee. The
Trustee shall bear all Ordinary Expenses and Necessary Third Party Expenses (up
to $1,500 per Distribution Year). Notwithstanding any language to the contrary
in the Standard Terms or in this Series Supplement, on each Distribution Date
the Trustee shall be paid out of Available Funds (i) one half of the Trustee's
Fee and (ii) Necessary Third Party Expenses in the amount of $750. Should the
Trustee expect to incur any Necessary Third Party Expenses in any Distribution
Year which were neither anticipated upon the execution of this Series Supplement
nor which the Depositor was previously given notice of by the Trustee, the
Trustee shall first obtain the consent of the Depositor prior to incurring such
expenses. The prior consent of the Depositor shall not be unreasonably withheld.
Should the Depositor withhold its consent to the Trustee incurring any such
Necessary Third Party Expenses, the Depositor agrees at its own cost and expense
to undertake any and all steps necessary to cause a third party to provide to
the Trustee the consultation, service or advice to which such Necessary Third
Party Expenses relate, and further agrees to indemnify the Trustee against any
and all expenses, costs or claims resulting from the Trustee's reliance on such
consultation, service or advice. To the extent that the Necessary Third Party
Expenses of the Trustee exceed $1,500 for any Distribution Year, and the
Depositor has approved any excess required to be approved as provided above, the
Depositor shall promptly after receiving a statement from the Trustee specifying
the nature and amount of such excess, pay the amount of such excess to the
Trustee. Failure by the Depositor to pay or reimburse such amount shall not
entitle the Trustee to any payment or reimbursement from the Trust, nor shall
such failure release the Trustee from the duties it is required to perform under
the Trust Agreement. Should the Trustee not incur Necessary Third Party Expenses
in the amount of $1,500 for any Distribution Year, any excess will be returned
to the Depositor upon demand.
(b) Extraordinary Expenses shall not be paid out of the Trust
Property unless (i) the Trustee is satisfied that it will have adequate security
or indemnity in respect of such costs, expenses and liabilities, and (ii) either
(a) all the
14
<PAGE>
Certificateholders of each of Class A-1 and Class A-2 Certificates then
outstanding have voted to require the Trustee to incur such Extraordinary
Expenses; or (b) any lesser percentage of the Certificateholders requesting such
action pursuant hereto have agreed to reimburse the Trustee for the cost thereof
from their own funds. If Extraordinary Expenses are not approved unanimously as
set forth in clause (ii)(a), such Extraordinary Expenses shall not be an
obligation of the Trust, and the Trustee shall not file any claim against the
Trust therefor notwithstanding failure of certificateholders to reimburse the
Trustee.
Section 7. Optional Exchange. (a) On each Distribution Date
-----------------
any Affiliate of the Depositor, if it is then the holder of Class A-2
Certificates of a certain principal amount and Class A-1 Certificates
representing a like percentage of the principal amount thereof, may tender such
Certificates to the Trustee on such Distribution Date and receive a distribution
of Underlying Securities representing a like percentage of the Underlying
Securities to the percentages of the Class A-1 Certificates and Class A-2
Certificates being tendered by the Depositor or Affiliate to the Trustee;
provided, however, that any right to exchange shall be exercisable only (i) to
the extent that the Depositor provides upon the Trustee's request an opinion of
counsel that such exchange would not affect the characterization of the Trust as
a "grantor trust" for federal income tax purposes and (ii) to the extent
permitted under Section 7(d) hereof.
(b) Any such Affiliate of the Depositor must provide notice to
the Trustee (an "Exchange Request") no less than 30 days (or such shorter period
acceptable to the Trustee) but not more than 45 days prior to an Optional
Exchange Date that it requests an Optional Exchange of Certificates on such
Optional Exchange Date.
(c) The Trustee shall not be obligated to determine whether an
Optional Exchange complies with the applicable provisions for exemption under
Rule 3a-7 of the Investment Company Act of 1940, as amended, or the rules or
regulations promulgated thereunder.
(d) Any such Optional Exchange by any Affiliate of the
Depositor, will be subject to the following restrictions: (i) certification to
the Trustee that any Certificates to be exchanged have been held for a minimum
of six months and (ii) each Optional Exchange is limited in amount to a maximum
of 5% (except for Certificates acquired by the Underwriter but never distributed
to investors, in which case 25%) of the then outstanding principal amount of the
Class A-2 Certificates.
(e) The provisions of Section 4.07 of the Standard Terms shall
not apply to an Optional Exchange pursuant to this Section. This Section 7 shall
not provide the Depositor with a lien against, an interest in or a right to
specific performance with respect to the Underlying Securities.
15
<PAGE>
Section 8. Events of Default.
-----------------
Within 30 days of the occurrence of an Event of Default in
respect of the Certificates, the Trustee will give notice to the
Certificateholders, transmitted by mail, of all such uncured or unwaived Events
of Default known to it. However, except in the case of an Event of Default
relating to the payment of principal of or interest on any of the Underlying
Securities, the Trustee will be protected in withholding such notice if in good
faith it determines that the withholding of such notice is in the interest of
the Certificateholders.
Section 9. Miscellaneous.
-------------
(a) The provisions of Section 4.04, Advances, of the Standard
Terms shall not apply to the Series 1998-ADM-1 Certificates.
(b) The provisions of Section 4.07, Optional Exchange, of the
Standard Terms shall not apply to the Series 1998-ADM-1 Certificates in the case
of an Optional Exchange pursuant to Section 7 hereof.
(c) The Trustee shall forward reports to Certificateholders
pursuant to Section 4.03 of the Standard Terms to the New York Stock Exchange.
(d) The Certificateholders shall not be entitled to terminate
the Trust or cause the sale or other disposition of the Underlying Securities.
(e) The provisions of Section 3.07(d) of the Standard Terms
shall not apply to the Series 1998-ADM-1 Certificates.
(f) If the Trustee has not received payment with respect to a
Collection Period on the Underlying Securities on or prior to the related
Distribution Date, such distribution will be made promptly upon receipt of such
payment. No additional amounts shall accrue on the Certificates or be owed to
Certificateholders as a result of such delay; provided, however, that any
additional interest owed and paid by the Underlying Securities Issuer as a
result of such delay shall be paid to the Class A-1 Certificateholders,
proportionately to the ratio of their respective entitlements to interest.
(g) The outstanding principal balance of the Certificates
shall not be reduced by the amount of any Realized Losses (as defined in the
Standard Terms).
(h) The Trust may not engage in any business or activities
other than in connection with, or relating to, the holding, protecting and
preserving of the Trust Property and the issuance of the Certificates, and other
than those required or authorized by the Trust Agreement or incidental and
necessary to accomplish such
16
<PAGE>
activities. The Trust may not issue or sell any certificates or other
obligations other than the Certificates or otherwise incur, assume or guarantee
any indebtedness for money borrowed.
(i) Notwithstanding anything in the Trust Agreement to the
contrary, the Trustee may be removed upon 60 days prior written notice delivered
by the holders of Class A-1 and Class A-2 Certificates representing the Required
Percentage -- Removal.
(j) In the event that the Internal Revenue Service challenges
the characterization of the Trust as a grantor trust, the Trustee shall then
file such forms as the Depositor may specify to establish the Trust's election
pursuant to Section 761 of the Code to exclude the Trust from the application of
Subchapter K of the Code and is hereby empowered to execute such forms on behalf
of the Certificateholders.
(k) Notwithstanding anything in the Standard Terms to the
contrary, the Trustee, upon written direction by the Depositor, will execute the
Certificates.
(l) In relation to Section 7.01(f) of the Standard Terms, any
periodic reports filed by the Trustee pursuant to the Securities and Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder,
in accordance with the customary practices of the Depositor, need not contain
any independent reports.
(m) Notwithstanding anything in the Trust Agreement to the
contrary, the Depositor may not purchase or hold Certificates.
(n) Notwithstanding anything in the Trust Agreement to the
contrary, the Trustee will have recourse to the Underlying Securities. However,
such recourse shall be limited only to the amount of any Trustee Fee and
Necessary Third Party Expenses (such Necessary Third Party Expenses not to
exceed $1,500 for any Distribution Year).
17
<PAGE>
Section 10. Notices. All directions, demands and notices
-------
hereunder or under the Standard Terms shall be in writing and shall be delivered
as set forth below (unless written notice is otherwise provided to the Trustee).
If to the Depositor, to:
Lehman ABS Corporation
3 World Financial Center
New York, New York 10285
Attention: Mark Zusy
Telephone: (212) 526-4428
Facsimile: (212) 528-6664
If to the Market Agent, to:
Lehman Brothers Inc.
3 World Financial Center
New York, New York 10285
Attention: Mark Zusy
Telephone: (212) 526-4428
Facsimile: (212) 528-6664
If to the Trustee, to:
The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: Corporate Trust Administration
Telephone: (212) 815-5098
Facsimile: (212) 815-5999
If to the Rating Agencies, to:
Moody's Investors Service, Inc.
99 Church Street 21W
New York, New York 10007
Attention: CBO/CLO Monitoring Department
Telephone: (212) 553-1494
Facsimile: (212) 553-0355
18
<PAGE>
and to:
Standard & Poor's
25 Broadway
New York, New York 10004
Attention: Structured Finance Surveillance
Group
Telephone: (212) 208-1191
Facsimile: (212) 208-0053
If to the New York Stock Exchange, to:
New York Stock Exchange, Inc.
20 Broad Street
New York, New York 10005
Attention: Michael Hyland
Telephone: (212) 656-5868
Facsimile: (212) 656-6919
Section 11. Governing Law. THIS SERIES SUPPLEMENT AND THE
-------------
TRANSACTIONS DESCRIBED HEREIN SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND
PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CHOICE OF
LAWS PROVISIONS THEREOF.
Section 12. Counterparts. This Series Supplement may be
------------
executed in any number of counterparts, each of which shall be deemed to be an
original, and all such counterparts shall constitute but one and the same
instrument.
Section 13. Termination of the Trust. The Trust shall
------------------------
terminate upon the earliest to occur of (i) the payment in full at maturity or
sale by the Trust after a payment default on or an acceleration or other early
payment of the Underlying Securities and the distribution in full of all amounts
due to the Class A-1 and Class A-2 Certificateholders and (ii) the Final
Scheduled Distribution Date.
Section 14. Sale of Underlying Securities. In the event of a
-----------------------------
sale of a portion of the Underlying Securities pursuant to Section 5(d) hereof,
the settlement of the liquidation of such portion of the Underlying Securities
shall occur promptly after the date of receipt of notice of payment default or
acceleration of the maturity of the Underlying Securities by the Trustee, and
the Liquidation Proceeds, if any, shall be deposited into the Certificate
Account for distribution to the Class A-1 and Class A-2 Certificateholders in
accordance with the Allocation Ratio. The Trustee shall only
19
<PAGE>
deliver the Underlying Securities to the purchaser of such Underlying Securities
against payment in same day funds deposited into the Certificate Account.
Section 15. Amendments. Notwithstanding anything in the Trust
----------
Agreement to the contrary, in addition to the other restrictions on modification
and amendment contained therein, the Trustee shall not enter into any amendment
or modification of the Trust Agreement which would adversely affect in any
material respect the interests of the holders of any class of Certificates
without the consent of the holders of 100% of such class of Certificates;
provided, however, that no such amendment or modification will be permitted
which would alter the status of the Trust as a grantor trust for federal income
tax purposes. Further, no amendment shall be permitted which would adversely
affect in any material respect the interests of any Class of Certificateholders
without confirmation by each Rating Agency that such amendment will not result
in a downgrading or withdrawal of its rating of such Certificates.
Section 16. Voting of Underlying Securities, Modification of
-------------------------------------------------
Indenture. The Trustee, as holder of the Underlying Securities, has the right to
- ---------
vote and give consents and waivers in respect of the Underlying Securities as
permitted by the Depository and except as otherwise limited by the Trust
Agreement. In the event that the Trustee receives a request from the Depository,
the Underlying Securities Trustee or the Underlying Securities Issuer for its
consent to any amendment, modification or waiver of the Underlying Securities,
the Underlying Securities Indenture or any other document thereunder or relating
thereto, or receives any other solicitation for any action with respect to the
Underlying Securities, the Trustee shall mail a notice of such proposed
amendment, modification, waiver or solicitation to each Certificateholder of
record as of such date. The Trustee shall request instructions from the
Certificateholders as to whether or not to consent to or vote to accept such
amendment, modification, waiver or solicitation. The Trustee shall consent or
vote, or refrain from consenting or voting, in the same proportion (based on the
relative outstanding principal balances of the Certificates) as the Certificates
of the Trust were actually voted or not voted by the Certificateholders thereof
as of a date determined by the Trustee prior to the date on which such consent
or vote is required, after weighing the votes of the Class A-1
Certificateholders and the votes of the Class A-2 Certificateholders according
to the Allocation Ratio; provided, however, that, notwithstanding anything in
the Trust Agreement to the contrary, the Trustee shall at no time vote on or
consent to any matter (i) unless such vote or consent would not (based on an
opinion of counsel) alter the status of the Trust as a grantor trust for federal
income tax purposes or result in the imposition of tax upon the
Certificateholders, (ii) which would alter the timing or amount of any payment
on the Underlying Securities, including, without limitation, any demand to
accelerate the Underlying Securities, except in the event of a default under the
Underlying Securities or an event which with the passage of time would become an
event of default under the Underlying Securities and with the unanimous consent
of all outstanding Class A-1
20
<PAGE>
and Class A-2 Certificateholders, or (iii) which would result in the exchange or
substitution of any of the outstanding Underlying Securities pursuant to a plan
for the refunding or refinancing of such Underlying Securities except in the
event of a default under the Underlying securities Indenture and only with the
consent of Certificateholders representing 100% of the Class A-2 Certificates
and 100% of the Class A-1 Certificates. The Trustee shall have no liability for
any failure to act resulting from Certificateholders' late return of, or failure
to return, directions requested by the Trustee from the Certificateholders.
In the event that an offer is made by the Underlying
Securities Issuer to issue new obligations in exchange and substitution for any
of the Underlying Securities, pursuant to a plan for the refunding or
refinancing of the outstanding Underlying Securities or any other offer is made
for the Underlying Securities, the Trustee shall notify the Class A-1 and Class
A-2 Certificateholders of such offer promptly. The Trustee must reject any such
offer unless the Trustee is directed by the affirmative vote of the holders of
100% of the Class A-1 and Class A-2 Certificates to accept such offer and the
Trustee has received the tax opinion described above.
If an event of default under the Underlying Securities
Indenture occurs and is continuing, and if directed by all of the outstanding
Class A-1 and Class A-2 Certificateholders, the Trustee shall vote the
Underlying Securities in favor of directing, or take such other action as may be
appropriate to direct, the Underlying Securities Trustee to declare the unpaid
principal amount of the Underlying Securities and any accrued and unpaid
interest thereon to be due and payable.
21
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Series
Supplement to be duly executed by their respective authorized officers as of the
date first written above.
LEHMAN ABS CORPORATION,
as Depositor
By:/s/ Mark L. Zusy
---------------------------
Name: Mark L. Zusy
Title: Senior Vice President
THE BANK OF NEW YORK, not
in its individual
capacity but solely as
Trustee on behalf of the
Corporate Bond-Backed
Certificates Series,
1998-ADM-1 Trust
By: /s/ Enrico D. Reyes
-------------------------------------
Name: Enrico D. Reyes
Title: Vice President
<PAGE>
SCHEDULE I
SERIES 1998-ADM-1
UNDERLYING SECURITIES SCHEDULE
------------------------------
Underlying Securities: 6.95% Debentures due December 15, 2097
Underlying Securities Issuer: Archer-Daniels-Midland Company
CUSIP Number: 039483 AP 7
Principal Amount Deposited: $65,775,000
Original Issue Date: December 15, 1997
Principal Amount of
Underlying Securities
Originally Issued: $250,000,000
Maturity Date: December 15, 2097
Principal Payment Date: December 15, 2097
Interest Rate: 6.95% per annum
Interest Payment Dates: June 15 and December 15, commencing
June 15, 1998
Underlying Securities Record Dates: June 1 and December 1
Redemption: The Underlying Securities are redeemable
as a whole or in part, at any time, at
the option of the Underlying Securities
Issuer, on not less than 30 nor more than
60 days prior written notice to the
holders thereof, at a redemption price
equal to the greater of (i) 100% of the
principal amount of the Underlying
Securities to be redeemed and (ii) the
sum of the present values of the
remaining scheduled payments of principal
and interest thereon, discounted to the
redemption date on a semi-annual basis
(assuming a 360-day year consisting of
twelve 30-day months) at the rate of U.S.
Treasury securities plus 15 basis points,
<PAGE>
together in either case with accrued
interest on the principal amount being
redeemed to the date of such redemption.
The Underlying Securities Issuer intends
to deduct interest paid on the Underlying
Securities for United States federal
income tax purposes; however, during the
past several years there have been
several legislative proposals which,
although not enacted, contained proposed
tax law changes that, among other things,
would prohibit an issuer from deducting
interest payments on debt instruments
with a maturity of more than 40 years,
such as the Underlying Securities. Upon
the occurence of such an event (a "Tax
Event"), the Underlying Securities Issuer
will have the right, without the consent
of the holders of the Underlying
Securities, to shorten the maturity of
the Underlying Securities to the minimum
extent required, such that, after the
shortening of the maturity, interest paid
in respect of the Underlying Securities
will be deductible for United States
federal income tax purposes.
In addition, if a Tax Event occurs and in
the opinion of a nationally recognized
independent tax counsel, there would,
notwithstanding any shortening of the
maturity of the Underlying Securities, be
more than an insubstantial risk that
interest paid by the Underlying
Securities Issuer on the Underlying
Securities is not, or will not be,
deductible, in whole or in part, by the
Underlying Securities Issuer for United
States federal income tax purposes, the
Underlying Securities Issuer may, within
90 days following the occurrence of such
Tax Event, redeem the Underlying
Securities in whole (but not in part), on
not less than 30 nor more than 60 days'
notice mailed to holders thereof, at a
redemption price equal to the greater of
(i) 100% of
<PAGE>
the principal amount of the Underlying
Securities and (ii) the sum of the
present values of the remaining scheduled
payments thereon, discounted to the
redemption date on a semi-annual basis
(assuming a 360-day year consisting of
twelve 30-day months) at the rate of U.S.
Treasury securities plus 35 basis points,
together, in either case with accrued
interest on the principal amount being
redeemed to the date of redemption.
Defeasance: The Underlying Securities Issuer may
terminate certain of its obligations
under the Underlying Securities Indenture
with respect to the Underlying
Securities, including its obligations to
comply with certain covenants described
in the Prospectus for the Underlying
Securities, and, on the terms and subject
to the conditions contained in the
Underlying Securities Indenture, by
depositing in trust with the Underlying
Securities Trustee money or certain U.S.
government obligations sufficient to pay
the principal of, and premium, if any,
and interest on the Underlying Securities
to maturity. Such deposit and termination
is conditioned upon the Underlying
Securities Issuer's delivery of an
opinion of independent counsel of
nationally recognized standing that the
holders of the Underlying Securities will
have no federal income tax consequences
as a result of such deposit and
termination. Such termination will not
relieve Underlying Securities Issuer of
its obligation to pay when due the
principal of or interest on the
Underlying Securities if the Underlying
Securities are not paid from the money or
such U.S. government obligations held by
the Underlying Securities Trustee for the
payment thereof.
Priority: Based upon the Underlying Securities
Prospectus, the Underlying Securities are
<PAGE>
unsecured and unsubordinated obligations
of the Underlying Issuer ranking pari
passu with all other unsecured and
unsubordinated indebtedness of the
Underlying Securities Issuer.
Security: None
Ratings as of Closing: "Aa3" by Moody's and "AA-" by S&P
Form of Underlying
Securities: Book-entry debt securities registered
with DTC
<PAGE>
SCHEDULE II
AMORTIZATION SCHEDULE--CLASS A-1 CERTIFICATES
<TABLE>
<CAPTION>
TOTAL INTEREST OUTSTANDING
PLUS PRINCIPAL PRINCIPAL ON
CLOSING DATE OR INTEREST PAYABLE ON PRINCIPAL AMORTIZATION PAYABLE ON CLOSING DATE OR
DISTRIBUTION DATE DISTRIBUTION DATE ON DISTRIBUTION DATE DISTRIBUTION DATE(1) DISTRIBUTION DATE(2)
- ----------------- ----------------- ----------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
March 30, 1998............... $ 50,694,774
June 15, 1998................ $ 1,647,580 $ 635,101 $ 2,282,681 50,059,673
December 15, 1998............ 1,626,939 655,742 2,282,681 49,403,931
June 15, 1999................ 1,605,628 677,053 2,282,681 48,726,878
December 15, 1999............ 1,583,624 699,058 2,282,681 48,027,820
June 15, 2000................ 1,560,904 721,777 2,282,681 47,306,043
December 15, 2000............ 1,537,446 745,235 2,282,681 46,560,808
June 15, 2001................ 1,513,226 769,455 2,282,681 45,791,353
December 15, 2001............ 1,488,219 794,462 2,282,681 44,996,891
June 15, 2002................ 1,462,399 820,282 2,282,681 44,176,608
December 15, 2002............ 1,435,740 846,941 2,282,681 43,329,667
June 15, 2003................ 1,408,214 874,467 2,282,681 42,455,200
December 15, 2003............ 1,379,794 902,887 2,282,681 41,552,313
June 15, 2004................ 1,350,450 932,231 2,282,681 40,620,082
December 15, 2004............ 1,320,153 962,529 2,282,681 39,657,553
June 15, 2005................ 1,288,870 993,811 2,282,681 38,663,742
December 15, 2005............ 1,256,572 1,026,110 2,282,681 37,637,633
June 15, 2006................ 1,223,223 1,059,458 2,282,681 36,578,174
December 15, 2006............ 1,188,791 1,093,891 2,282,681 35,484,284
June 15, 2007................ 1,153,239 1,129,442 2,282,681 34,354,842
December 15, 2007............ 1,116,532 1,166,149 2,282,681 33,188,693
June 15, 2008................ 1,078,633 1,204,049 2,282,681 31,984,644
December 15, 2008............ 1,039,501 1,243,180 2,282,681 30,741,464
June 15, 2009................ 999,098 1,283,584 2,282,681 29,457,880
December 15, 2009............ 957,381 1,325,300 2,282,681 28,132,580
June 15, 2010................ 914,309 1,368,372 2,282,681 26,764,208
December 15, 2010............ 869,837 1,412,845 2,282,681 25,351,363
June 15, 2011................ 823,919 1,458,762 2,282,681 23,892,601
December 15, 2011............ 776,510 1,506,172 2,282,681 22,386,429
June 15, 2012................ 727,559 1,555,122 2,282,681 20,831,307
December 15, 2012............ 677,017 1,605,664 2,282,681 19,225,643
June 15, 2013................ 624,833 1,657,848 2,282,681 17,567,795
December 15, 2013............ 570,953 1,711,728 2,282,681 15,856,068
June 15, 2014................ 515,322 1,767,359 2,282,681 14,088,709
December 15, 2014............ 457,883 1,824,798 2,282,681 12,263,910
June 15, 2015................ 398,577 1,884,104 2,282,681 10,379,806
December 15, 2015............ 337,344 1,945,338 2,282,681 8,434,469
June 15, 2016................ 274,120 2,008,561 2,282,681 6,425,908
December 15, 2016............ 208,842 2,073,839 2,282,681 4,352,068
June 15, 2017................ 141,442 2,141,239 2,282,681 2,210,829
December 15, 2017............ 71,852 2,210,829 2,282,681 0
</TABLE>
- --------
1. Amounts shown reflect aggregate amounts of interest to be received by the
Trust in respect of the Underlying Securities on the related Distribution Date,
less ordinary Trustee's fees and scheduled expenses due to the Trustee on such
Distribution Date.
2. Principal Amount on the Closing Date or on the Distribution
Date after all scheduled distributions have been made.
<PAGE>
SCHEDULE III--ALLOCATION SCHEDULE
SCHEDULE--RELATIVE PERCENTAGES DISTRIBUTABLE UPON
CONDITIONAL SHORTENING OF MATURITY DATE
OR OPTIONAL REDEMPTION
<TABLE>
<CAPTION>
CLOSING DATE OR CLASS A-1 CLASS A-2
DISTRIBUTION DATE CERTIFICATES CERTIFICATES SUM
- ----------------- ------------ ------------ ----
<S> <C> <C> <C>
March 30, 1998..................... 74.03% 25.97% 100%
June 15, 1998...................... 73.14% 26.86% 100%
December 15, 1998.................. 72.22% 27.78% 100%
June 15, 1999...................... 71.27% 28.73% 100%
December 15, 1999.................. 70.28% 29.72% 100%
June 15, 2000...................... 69.26% 30.74% 100%
December 15, 2000.................. 68.21% 31.79% 100%
June 15, 2001...................... 67.12% 32.88% 100%
December 15, 2001.................. 65.99% 34.01% 100%
June 15, 2002...................... 64.82% 35.18% 100%
December 15, 2002.................. 63.62% 36.38% 100%
June 15, 2003...................... 62.37% 37.63% 100%
December 15, 2003.................. 61.08% 38.92% 100%
June 15, 2004...................... 59.75% 40.25% 100%
December 15, 2004.................. 58.37% 41.63% 100%
June 15, 2005...................... 56.94% 43.06% 100%
December 15, 2005.................. 55.46% 44.54% 100%
June 15, 2006...................... 53.93% 46.07% 100%
December 15, 2006.................. 52.35% 47.65% 100%
June 15, 2007...................... 50.72% 49.28% 100%
December 15, 2007.................. 49.03% 50.97% 100%
June 15, 2008...................... 47.28% 52.72% 100%
December 15, 2008.................. 45.48% 54.52% 100%
June 15, 2009...................... 43.61% 56.39% 100%
December 15, 2009.................. 41.68% 58.32% 100%
June 15, 2010...................... 39.68% 60.32% 100%
December 15, 2010.................. 37.61% 62.39% 100%
June 15, 2011...................... 35.47% 64.53% 100%
December 15, 2011.................. 33.26% 66.74% 100%
June 15, 2012...................... 30.97% 69.03% 100%
December 15, 2012.................. 28.60% 71.40% 100%
June 15, 2013...................... 26.16% 73.84% 100%
December 15, 2013.................. 23.63% 76.37% 100%
June 15, 2014...................... 21.01% 78.99% 100%
December 15, 2014.................. 18.30% 81.70% 100%
June 15, 2015...................... 15.50% 84.50% 100%
December 15, 2015.................. 12.61% 87.39% 100%
June 15, 2016...................... 9.61% 90.39% 100%
December 15, 2016.................. 6.52% 93.48% 100%
June 15, 2017...................... 3.31% 96.69% 100%
December 15, 2017.................. 0.00% 100.00% 100%
</TABLE>
<PAGE>
EXHIBIT A
Standard Terms for Trust Agreements
-----------------------------------
(begins on next page)
<PAGE>
Exhibit A
to Series Supplement
================================================================================
STANDARD TERMS FOR TRUST AGREEMENTS
between
LEHMAN ABS CORPORATION,
as Depositor
and
THE BANK OF NEW YORK,
as Trustee
BOND-BACKED CERTIFICATES
Dated as of February 25, 1998
================================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
PRELIMINARY STATEMENT........................................................ 1
ARTICLE I Definitions and Assumptions........................... 1
SECTION 1.01. Definitions............................. 1
SECTION 1.02. Rules of Construction................... 21
SECTION 1.03. Compliance Certificates and Opinions;
Record Date............................. 22
ARTICLE II Declaration of Trusts; Issuance of Certificates;
Purpose and Classification of Trusts.................. 23
SECTION 2.01. Creation and Declaration of Trusts:
Assignment of Underlying Securities..... 23
SECTION 2.02. Acceptance by Trustee................... 25
SECTION 2.03. Representations and Warranties of the
Depositor............................... 25
SECTION 2.04. Breach of Representation, Warranty or
Covenant................................ 27
SECTION 2.05. Agreement to Authenticate and Deliver
Certificates............................ 27
ARTICLE III Administration of each Trust.......................... 27
SECTION 3.01. Administration of each Trust............ 27
SECTION 3.02. Collection of Certain Underlying
Security Payments....................... 28
SECTION 3.03. Certificate Account..................... 28
SECTION 3.04. Liquidation of the Underlying
Securities.............................. 29
SECTION 3.05. Investment of Funds in the Accounts..... 29
SECTION 3.06. Maintenance of Credit Support........... 30
SECTION 3.07. Realization Upon Defaulted Underlying
Securities.............................. 31
SECTION 3.08. Retained Interest....................... 32
SECTION 3.09. Access to Certain Documentation......... 33
SECTION 3.10. Reports by the Depositor................ 33
SECTION 3.11. Charges and Expenses.................... 34
ARTICLE IV Distributions and Reports to
Certificateholders.................................... 34
SECTION 4.01. Distributions........................... 34
SECTION 4.02. Distributions on Certificates........... 35
SECTION 4.03. Reports to Certificateholders........... 37
SECTION 4.04. Advances................................ 39
i
<PAGE>
Page
----
SECTION 4.05. Allocation of Realized Losses and Trust
Expenses.................................40
SECTION 4.06. Compliance with Withholding
Requirements.............................40
SECTION 4.07. Optional Exchange........................41
ARTICLE V The Certificates.......................................43
SECTION 5.01. The Certificates.........................43
SECTION 5.02. Execution, Authentication
and Delivery.............................44
SECTION 5.03. Temporary Certificates...................45
SECTION 5.04. Registration; Registration of
Transfer and Exchange....................46
SECTION 5.05. Mutilated, Destroyed, Lost and Stolen
Certificates.............................51
SECTION 5.06. Persons Deemed Owners....................52
SECTION 5.07. Cancellation.............................53
SECTION 5.08. Global Securities........................53
SECTION 5.09. Notices to Depository....................55
SECTION 5.10. Definitive Certificates..................55
SECTION 5.11. Currency of Distributions in
Respect of Certificates..................56
SECTION 5.12. Conditions of Authentication and
Delivery of New Series...................57
SECTION 5.13. Appointment of Paying Agent..............58
SECTION 5.14. Authenticating Agent.....................59
SECTION 5.15. Voting Rights with Respect to Underlying
Securities...............................61
SECTION 5.16. Actions by Certificateholders............62
SECTION 5.17. Events of Default........................62
SECTION 5.18. Judicial Proceedings Instituted by
Trustee; Trustee May Bring Suit..........63
SECTION 5.19. Control by Certificateholders............63
SECTION 5.20. Waiver of Past Defaults..................63
SECTION 5.21. Right of Certificateholders to Receive
Payments Not to Be Impaired..............64
SECTION 5.22. Remedies Cumulative......................65
ARTICLE VI The Depositor..........................................65
SECTION 6.01. Liability of the Depositor...............65
SECTION 6.02. Limitation on Liability of
the Depositor............................65
SECTION 6.03. Depositor May Purchase Certificates......66
SECTION 6.04. Merger or Consolidation of
the Depositor............................67
ii
<PAGE>
Page
----
SECTION 6.05. No Liability of the Depositor with
Respect to the Underlying Securities;
Certificateholders to Proceed Directly
Against the Issuer(s)................... 67
ARTICLE VII Concerning the Trustee............................... 68
SECTION 7.01. Duties of Trustee....................... 68
SECTION 7.02. Between Trustee and Sub-Administrative
Agents.................................. 72
SECTION 7.03. Certain Matters Affecting the Trustee... 73
SECTION 7.04. Trustee Not Liable for Recitals in
Certificates or Underlying Securities... 75
SECTION 7.05. Trustee May Own Certificates............ 75
SECTION 7.06. Trustee's Fees and Expenses............. 75
SECTION 7.07. Eligibility Requirements for Trustee.... 76
SECTION 7.08. Resignation or Removal of the Trustee;
Appointment of Successor Trustee........ 77
SECTION 7.09. Appointment of Office or Agency......... 79
SECTION 7.10. Representations and Warranties
of Trustee.............................. 79
SECTION 7.11. Indemnification of Trustee by the
Depositor; Contribution................. 81
SECTION 7.12. Indemnification of Depositor by Trustee. 82
SECTION 7.13. No Liability of the Trustee with
Respect to the Underlying Securities;
Certificateholders to Proceed Directly
Against the Issuer(s)................... 82
SECTION 7.14. The Depositor To Furnish Trustee
with Names and Addresses of
Certificateholders...................... 83
SECTION 7.15. Preservation of Information............. 83
SECTION 7.16. Reports by Trustee...................... 83
SECTION 7.17. Trustee's Application for Instructions
from the Depositor...................... 83
ARTICLE VIII Market Agent.......................................... 84
SECTION 8.01. Market Agent............................ 84
ARTICLE IX Termination........................................... 84
SECTION 9.01. Termination upon Liquidation of All
Underlying Securities................... 84
ARTICLE X Miscellaneous Provisions.............................. 85
SECTION 10.01. Amendment............................... 85
SECTION 10.02. Limitation on Rights of
Certificateholders...................... 87
SECTION 10.03. GOVERNING LAW........................... 89
SECTION 10.04. Notices................................. 89
iii
<PAGE>
Page
----
SECTION 10.05. Notice to Rating Agencies............... 90
SECTION 10.06. Severability of Provisions.............. 91
SECTION 10.07. Grant of Security Interest.............. 91
SECTION 10.08. Nonpetition Covenant.................... 92
SECTION 10.09. No Recourse............................. 93
SECTION 10.10. Article and Section References.......... 93
SECTION 10.11. Counterparts............................ 93
SECTION 10.12. Trust Indenture Act Controls............ 93
iv
<PAGE>
STANDARD TERMS FOR TRUST AGREEMENTS dated as
of February 25, 1998, among LEHMAN ABS CORPORATION, a
Delaware corporation, as Depositor, and THE BANK OF
NEW YORK, a New York banking corporation, as Trustee.
PRELIMINARY STATEMENT
The Depositor and the Trustee have duly authorized the
execution and delivery of these Standard Terms for Trust Agreements (the
"Standard Terms") to provide for one or more Series (and one or more Classes
within each such Series) of Certificates, issuable from time to time as provided
in these Standard Terms.
Each such Series (inclusive of any Classes specified within
such Series) of Certificates will be issued only under a separate Series
Supplement to these Standard Terms, duly executed and delivered by the Depositor
and the Trustee. With respect to each Series, the applicable Series Supplement,
together with these Standard Terms, shall be known as the "Trust Agreement."
All representations, covenants and agreements made herein by
each of the Depositor and the Trustee are for the benefit and security of the
Certificateholders and, to the extent provided in the applicable Series
Supplement, for the benefit and security of any Credit Support Provider or any
other party as specified therein;
The Depositor is entering into these Standard Terms, and the
Trustee in accepting the trusts created hereby, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged.
ARTICLE I
Definitions and Assumptions
---------------------------
SECTION 1.01. Definitions. Except as otherwise specified
-----------
herein or in the applicable Series Supplement or as the context may otherwise
require, the following terms have the respective meanings set forth below for
all purposes of this Trust Agreement.
"Account": As defined in Section 3.05.
-------
<PAGE>
"Accounting Date": With respect to any Series, if
---------------
applicable, as defined in the related Series Supplement.
"Administrative Fees": With respect to any Series, if
-------------------
applicable, as defined in the related Series Supplement.
"Advance": As defined in Section 4.04.
-------
"Affiliate": With respect to any specified Person, any other
---------
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this
definition, "control", when used with respect to any specified Person, means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Allowable Expense Amounts": With respect to any Series, as
-------------------------
defined in the related Series Supplement.
"Authenticating Agent": As defined in Section 5.14.
--------------------
"Authorized Newspaper": A newspaper in an official language of
--------------------
the country of publication customarily published at least once a day, and
customarily published for at least five days in each calendar week, and of
general circulation in such city or cities specified in the related Series
Supplement with respect to the Certificates of any Series. Where successive
publications are required to be made in Authorized Newspapers, the successive
publications may be made in the same or in different newspapers in the same city
meeting the foregoing requirements and in each case on any Business Day in such
city.
"Available Funds": Unless otherwise specified in the
---------------
applicable Series Supplement, for any Distribution Date in respect of a given
Series or Class, the sum of (i) all amounts actually received on or with respect
to the Underlying Securities (including Liquidation Proceeds and investment
income on amounts in the Accounts) with respect to such Series during the
related Collection Period, (ii) all amounts received pursuant to any Credit
Support Instruments with respect to such Series for such Distribution Date and
(iii) all other amounts, if any, specified by the applicable Series Supplement.
"Basic Documents": With respect to any Series, if
---------------
applicable, as defined in the related Series Supplement.
2
<PAGE>
"Bearer Certificate": Any Certificate (with or without
------------------
Coupons), title to which passes by delivery only, but exclusive
of any Coupons.
"Beneficial Owner": Shall mean, with respect to Certificates
----------------
held through a Depository, the beneficial owner of a Certificate. For purposes
only of Section 5.16, the Trustee shall be obligated to treat a Person who
claims to be a beneficial owner of a Certificate as a "Beneficial Owner" within
the meaning of the Series Supplement only if such Person has first delivered to
the Trustee, (i) a certificate or other writing executed by such Person stating
the full name and address of such Person, the principal distribution amount of
the Certificate with respect to which such Person claims to be the Beneficial
Owner, and the Participant in the Depository ("such Person's Participant")
through which such Person holds its beneficial ownership interest in the
Certificates and (ii) a certificate or other writing executed by such Person's
Participant confirming that such Person's Participant holds on its own books and
records Certificates for the account of such Beneficial Owner and identifying
the principal distribution amount held for such Beneficial Owner.
"Business Day": With respect to any Place of Distribution
------------
specified in the related Series Supplement, any day that is not a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or trust
companies in such Place of Distribution are authorized or obligated by law,
regulation or executive order to close or any day which is not a Business Day
with respect to the Underlying Securities, except as otherwise specified in the
related Series Supplement and any Business Day specified with respect to the
Underlying Securities.
"Calculation Agent": With respect to any Series, if
-----------------
applicable, as defined in the related Series Supplement.
"Call Premium Percentage": With respect to any Series
-----------------------
(or Class with such Series), if applicable, as defined in the
related Series Supplement.
"Certificate Account": As defined in Section 3.03.
-------------------
"Certificate Owners": As defined in Section 5.08.
------------------
"Certificate Principal Balance": With respect to an
-----------------------------
Outstanding Certificate, as determined at any time, the maximum amount that the
Holder thereof is entitled to receive as distributions allocable to principal
payments on the Underlying
3
<PAGE>
Securities. The Certificate Principal Balance, if any, of any Class within a
given Series (other than those Classes, if any, specified in the related Series
Supplement), as of any date of determination, shall be equal to the aggregate
initial Certificate Principal Balance thereof less the sum of (i) all amount
allocable to prior distributions made to such Class in respect to principal of
the Underlying Securities, (ii) any reductions attributable to Certificates
surrendered in exchange for Underlying Securities, as and to the extent provided
in the applicable Series Supplement and (iii) any reductions in the Certificate
Principal Balance thereof deemed to have occurred in connection with allocations
of (A) Realized Losses in respect of principal of the Underlying Securities and
(B) expenses of the Trust, if any, only to the extent specified in the
applicable Series Supplement, each as allocated to such Class pursuant to the
applicable Series Supplement.
"Certificate Register" and "Certificate Registrar": As
------------------------------------------------
respectively defined in Section 5.04.
"Certificateholder": Any Holder of a Certificate.
-----------------
"Certificates": Any trust certificates authorized by,
------------
and authenticated and delivered under, this Trust Agreement.
"Class": With respect to any Series, any one of the classes
-----
of Certificates of such Series, each consisting of Certificates having identical
terms.
"Clearing Agency": An organization registered as a
---------------
"clearing agency" pursuant to Section 17A of the Exchange Act.
"Closing Date": With respect to any Series, the day on
------------
which Certificates of such Series are first executed,
authenticated and delivered, as specified in the related Series Supplement.
"Code": The Internal Revenue Code of 1986, as amended,
----
and Treasury Regulations promulgated thereunder.
"Collection Period": With respect to any Distribution
-----------------
Date for a Series (or Class within such Series), the period specified in the
related Series Supplement.
"Commission": The Securities and Exchange Commission,
----------
as from time to time constituted, created under the Exchange Act or, if at any
time after the execution and delivery of this Trust Agreement such Commission is
not existing and performing the
4
<PAGE>
duties now assigned to it, then the body then performing such duties.
"Corporate Trust Office": The principal corporate trust office
----------------------
of the Trustee located at the address set forth in the related Series Supplement
or such other addresses as the Trustee may designate from time to time by notice
to the Holders and the Depositor, or the principal corporate trust office of any
successor Trustee (or such other addresses as a successor Trustee may designate
from time to time by notice to the Holders and the Depositor).
"Coupon": Any interest coupon appertaining to a Bearer
------
Certificate.
"Coupon Certificate": Any Bearer Certificate
------------------
authenticated and delivered with one or more Coupons appertaining thereto.
"Credit Support": With respect to any Series (or any Class
--------------
within such Series), a Letter of Credit, Surety Bond, swap agreement, put or
call option or other asset intended to support or ensure the timely or ultimate
distributions of amounts due in respect of all or certain of the Underlying
Securities for such Series or Class, which in each case is specified as such in
the related Series Supplement.
"Credit Support Instrument": The instrument or
-------------------------
document pursuant to which the Credit Support for a given Series (or any Class
within such Series) is provided, as specified in the applicable Series
Supplement.
"Credit Support Provider": With respect to any Series (or any
-----------------------
Class with such Series), the Person, if any, that will provide any Credit
Support with respect to all or a portion of the Underlying Securities for such
Series or Class as specified in the applicable Series Supplement.
"Currency": Dollars or Foreign Currency.
--------
"Cut-off Date": With respect to any Series, the date specified
------------
as such in the related Series Supplement. For purposes of this Trust Agreement,
any Underlying Security acquired by the Depositor after the applicable Cut-off
Date but prior to the applicable Closing Date and included in the related Trust
as of such Closing Date shall be deemed to have been Outstanding as of such
Cut-off Date and references to the principal balance of such Underlying Security
as of such Cut-off Date shall be deemed to be
5
<PAGE>
to the principal balance of such Underlying Security as of the
date on which it was acquired by the Depositor.
"Definitive Certificates": As defined in Section 5.08.
-----------------------
"Depositor": Lehman ABS Corporation, a Delaware corporation,
---------
and, if a successor Person shall have become the Depositor pursuant to any
applicable provisions of this Trust Agreement, "Depositor" shall mean such
successor Person. With respect to any provisions of this Trust Agreement that
relate to the provisions of the Trust Indenture Act, "Depositor" shall include
any obligor on the Certificates as the term obligor is defined in the Trust
Indenture Act.
"Depositor Order" or "Depositor Request": A written
---------------
order or request, respectively, signed in the name of the Depositor by any of
its President or Vice Presidents.
"Depository": With respect to the Certificates of any Series
----------
(or Class within such Series) issuable in whole or in part in the form of one or
more Global Securities, the Person designated as Depository by the Depositor
pursuant to Section 5.01 and specified in the related Series Supplement until a
successor Depository shall have become such pursuant to the applicable
provisions of this Trust Agreement, and thereafter "Depository" shall mean or
include each Person who is then a Depository hereunder, and if at any time there
is more than one such Person, "Depository" as used with respect to the
Certificates of any such Series or Class shall mean the Depository with respect
to the Certificates of that Series or Class.
"Depository Agreement": If applicable, the agreement
--------------------
pursuant to which the Depository will agree to act as Depository with respect to
any Series (or Class within such Series) of Certificates in accordance with
Section 5.08.
"Discount Certificate": Any Certificate that is issued with
--------------------
"original issue discount" within the meaning of Section 1273(a) of the Code and
any other Certificate designated by the Depositor as issued with original issue
discount for United States Federal income tax purposes.
"Distribution Date": With respect to any Series (or
-----------------
Class within such Series) of Certificates, each date specified as
a "Distribution Date" for such Series (or Class) in the related Series
Supplement.
6
<PAGE>
"Dollar" or "$" or "USD": Such currency of the United States
----------------------
as at the time of payment is legal tender for the payment of public and private
debts.
"Eligible Account": Either (i) an account or accounts
----------------
maintained with a Federal or State chartered depository institution or trust
company the long term unsecured debt obligations of which are rated by the
Rating Agency the higher of (x) at least the then current long-term rating of
the Certificates or (y) in one of its two highest long-term rating categories
(unless otherwise specified in the Series Supplement) at the time any amounts
are held in deposit therein or (ii) a trust account(s) maintained as a
segregated account(s) and held by a Federal or State chartered depository
institution or trust company in trust for the benefit of the Certificateholders;
provided, however, that such depository institution or trust company has a
long-term rating in one of the four highest categories by the Rating Agency.
"Eligible Expense": With respect to any Series, as
----------------
specified in the related Series Supplement.
"Eligible Investments": With respect to any Series, unless
--------------------
otherwise specified in the related Series Supplement, any one or more of the
following obligations or securities; provided, however, that the total stated
return specified by the terms of each such obligation or security is at least
equal to the purchase price thereof; and provided, further, that no such
instrument may carry the symbol "R" in its rating:
(i) direct obligations of, and obligations fully
guaranteed by, the United States, the Federal Home Loan Mortgage
Corporation, the Federal National Mortgage Association, the Federal
Farm Credit System or any agency or instrumentality of the United
States the obligations of which are backed by the full faith and credit
of the United States of America; provided, however, that obligations
of, or guaranteed by, the Federal Home Loan Mortgage Corporation, the
Federal National Mortgage Association or the Federal Farm Credit System
shall be Eligible Investments only if, at the time of investment, it
has the rating specified in such Series Supplement for Eligible
Investments;
(ii) demand and time deposits in, certificates of
deposit of, or banker's acceptances issued by any depository
institution or trust company (including the Trustee or any agent of the
Trustee acting in their respective commercial
7
<PAGE>
capacities) incorporated under the laws of the United States or any
State and subject to supervision and examination by Federal and/or
State banking authorities so long as the commercial paper and/or the
short-term debt obligations of such depository institution or trust
company (or, in the case of a depository institution which is the
principal subsidiary of a holding company, the commercial paper or
other short-term debt obligations of such holding company) at the time
of such investment or contractual commitment providing for such
investment have the rating specified in such Series Supplement for
Eligible Investments; provided, however, that such rating shall be no
lower than the rating on the Underlying Securities at the time of
purchase of the investments;
(iii) repurchase agreements with respect to (a) any
security described in clause (i) above or (b) any other security issued
or guaranteed by an agency or instrumentality of the United States,
with an entity having the credit rating specified in such Series
Supplement for Eligible Investments;
(iv) securities bearing interest or sold at a discount
issued by any corporation incorporated under the laws of the United
States or any State that have the rating specified in such Series
Supplement for Eligible Investments at the time of such investment or
contractual commitment providing for such investment; provided,
however, that such rating shall be no lower than the rating on the
Underlying Securities; and provided, further, that securities issued by
any particular corporation will not be Eligible Investments to the
extent that investment therein will cause the then outstanding
principal amount of securities issued by such corporation and held as
part of the Trust for such Series to exceed 10% of the aggregate
outstanding principal balances and amounts of all the Underlying
Securities and Eligible Investments held as part of the Trust for such
Series;
(v) commercial paper having at the time of such
investment the rating specified in the Series Supplement for Eligible
Investments; and
(vi) a Guaranteed Investment Contract if and only if
specified in the related Series Supplement, provided that the Rating
Agency Condition is met.
8
<PAGE>
"Event of Default": With respect to any Series (or
----------------
Class within such Series) of Certificates, as specified in the
related Series Supplement.
"Exchange Act": The Securities Exchange Act of 1934,
------------
as amended.
"Exchange Rate Agent": With respect to any Series (or
-------------------
Class within such Series) of Certificates, if applicable, the Depositor or its
agent so specified in the related Series Supplement.
"Executive Officer": Any one of the duly elected or
-----------------
appointed qualified and acting officers of any entity executing a certificate.
"Extraordinary Trust Expense": Unless otherwise specified in
---------------------------
the related Series Supplement, any and all costs, expenses or liabilities
arising out of the establishment, existence or administration of the Trust,
other than (i) Ordinary Expenses, and (ii) costs and expenses payable by a
particular Certificateholder, the Trustee or the Depositor pursuant to this
Trust Agreement.
"Final Scheduled Distribution Date": With respect to any
---------------------------------
Certificate, the date on which all the unpaid principal of (and premium, if any,
on) such Certificate is scheduled, without giving effect to any prepayment,
exchange or early termination, to become due and payable as provided therein and
in the applicable Series Supplement.
"Fixed Pass-Through Rate": With respect to any Fixed
-----------------------
Rate Certificate, as defined in the related Series Supplement.
"Fixed Rate Certificate": A Certificate that provides
----------------------
for a payment of interest at a Fixed Pass-Through Rate.
"Floating Pass-Through Rate": With respect to any
--------------------------
Floating Rate Certificate, as defined in the related Series Supplement.
"Floating Rate Certificate": A Certificate that
-------------------------
provides for the payment of interest at a Floating Pass-Through Rate determined
periodically by reference to a formula specified in the related Series
Supplement.
"Foreign Currency": A currency issued by the government of
----------------
any country other than the United States or a
9
<PAGE>
composite currency the value of which is determined by reference to the values
of the currencies of any group of countries.
"Global Security": A Registered Certificate or Bearer
---------------
Certificate evidencing all or part of a Series (or Class within such Series) of
Certificates, issued to the Depository for such Series or Class in accordance
with Section 5.08 and bearing the legend prescribed therein.
"Grant": To sell, convey, assign, transfer, create, grant a
-----
lien upon and a security interest in and right of set-off against, deposit, set
over and confirm to the Trustee pursuant to these Standard Terms and a related
Series Supplement; and the terms "Granted" and "Granting" have the meanings
correlative to the foregoing. A Grant of any Underlying Securities or of any
other instrument shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal,
premium, if any, and interest payments in respect of such Underlying Securities
and all other moneys payable thereunder, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights and
options, to bring Proceedings in the name of the Granting party or otherwise,
and generally to do and receive anything that the Granting party is or may be
entitled to do or receive thereunder or with respect thereto.
"Guaranteed Investment Contract": With respect to any Series
------------------------------
(or Class within such Series), a guaranteed investment contract or surety bond
provided for in the related Series Supplement, Granted as part of the Trust or
to the Trustee for the benefit of the Certificateholders for such Series,
providing for the investment of funds in a related Account or related Accounts
and insuring a minimum or a fixed rate of return on the investment of such
funds, which contract or surety bond shall be an obligation of an insurance
company or other entity whose rating is no lower than the rating on the
Underlying Securities and shall satisfy any other requirements specified in such
Series Supplement.
"Holder": With respect to a Registered Certificate,
------
the Registered Holder thereof and, with respect to a Bearer Certificate or a
Coupon, the bearer thereof.
"Independent": When used with respect to any specified
-----------
Person means that the Person (1) is in fact independent of the Depositor and of
any Affiliate, (2) does not have any direct or
10
<PAGE>
indirect material financial interest in the Depositor or in any Affiliate and
(3) is not connected with the Depositor as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
"Initial Accrued Interest": With respect to any Series, shall
------------------------
mean, with respect to each Underlying Security, the amount of interest which
accrued thereon from the Underlying Security Interest Payment Date of such
Underlying Security next preceding the deposit of such Underlying Security
hereunder (or, in the event that such Underlying Security Interest Payment Date
is the first Underlying Security Interest Payment Date to occur after the
original issuance of such Underlying Security, from the dated date thereof) to,
but excluding, the Closing Date.
"Issuer": Shall mean, with respect to an Underlying
------
Security, the issuer thereof (including, if applicable, the
guarantor of the Underlying Security) as identified in Schedule I
to the Series Supplement.
"Letter of Credit": With respect to any Series or Class within
----------------
such Series, the letter of credit, if any, providing for the payment of all or a
portion of amounts due in respect of such Series or Class, issued to the Trustee
for the benefit of the Holders of such Series or Class, issued by the related
Credit Support Provider, all as specified in the related Series Supplement.
"Limited Guarantor": With respect to the Underlying Securities
-----------------
relating to any series (or Class within such Series), a Person specified in the
related Series Supplement as providing a guarantee or insurance policy or other
credit enhancement supporting the distributions in respect of such Series (or
Class) as and to the extent specified in such Series Supplement.
"Limited Guaranty": With respect to any Series or Class within
----------------
such Series, any guarantee of or insurance policy or other comparable form of
credit enhancement with respect to amounts required to be distributed in respect
of such Series or Class or payments under all or certain of the Underlying
Securities relating to such Series or Class, executed and delivered by a limited
Guarantor in favor of the Trustee, for the benefit of the Certificateholders, as
specified in the related Series Supplement.
"Liquidation Proceeds": The amounts received by the
--------------------
Trustee in connection with (i) the liquidation of a defaulted Underlying
Security or collateral, if any, related thereto or
11
<PAGE>
(ii) the repurchase, substitution or sale of a Underlying Security.
"Market Agent": Shall mean the market agent or market
------------
agents appointed pursuant to Section 8.01, and its or their
successors or assigns.
"Market Agent Agreement": With respect to any Series shall
----------------------
mean the Market Agent Agreement, dated as of the Closing Date, between the
Trustee and the Market Agent, the form of which will be attached to the Series
Supplement, and any similar agreement with a successor Market Agent, in each
case as from time to time amended or supplemented.
"Minimum Wire Denomination": If applicable, with
-------------------------
respect to any Series, as defined in the related Series Supplement.
"Moody's": Shall mean Moody's Investors Service Inc.
-------
and any successors thereto.
"Notional Amount": With respect to any Class of Certificates,
---------------
if applicable, the initial notional amount specified in the related Series
Supplement on which distributions of interest may be determined at the
applicable Pass-Through Rate, as the same may be adjusted as specified in such
Series Supplement.
"Officer's Certificate": A certificate signed by
---------------------
anyone (or, if specified in these Standard Terms or any Series Supplement, more
than one) Executive Officer of the Depositor, and delivered to the Trustee.
"Opinion of Counsel": A written opinion of counsel, who may,
------------------
except as otherwise expressly provided in this Trust Agreement, be counsel for
the Depositor acceptable to the Trustee, except that any opinion of counsel
relating to the qualification of any account required to be maintained pursuant
to this Trust Agreement as an Eligible Account must be an opinion of counsel who
is in fact Independent of the Depositor.
"Optional Exchange Date": With respect to any Series
----------------------
(or Class with such Series), as defined, if applicable, in the
related Series Supplement.
"Ordinary Expenses": The Trustee's customary fee for
-----------------
its services as Trustee, including but not limited to (i) the costs and expenses
of preparing, sending and receiving all
12
<PAGE>
reports, statements, notices, returns, filings, solicitation of consent or
instructions, or other communications required by this Trust Agreement, (ii) the
costs and expenses of holding and making ordinary collection or payments on the
assets of the Trust and of determining and making distributions, (iii) the costs
and expenses of the Trust's or Trustee's counsel, accountants and other experts
for ordinary or routing consultation or advice in connection with the
establishment, administration and termination of the Trust, and (iv) any other
costs and expenses that are, or reasonably should have been, expected to be
incurred in the ordinary course of administration of the Trust.
"Outstanding": With respect to Certificates of a specified
-----------
Series (or Class within such Series), as of any date of determination, all such
Certificates theretofore authenticated and delivered under these Standard Terms
and the related Series Supplement except:
(i) Certificates theretofore cancelled by the
Certificate Registrar or delivered to the Certificate
Registrar for cancellation; and
(ii) Certificates in exchange for or in lieu of which other
Certificates have been authenticated and delivered pursuant to this
Trust Agreement, unless proof satisfactory to the Trustee is presented
that any such Certificates are held by a bona fide purchaser in whose
hands such Certificates are valid obligations of the Trust;
provided, however, that in determining whether the Holders of the required
percentage of the aggregate Voting Rights of the Certificates have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Certificates beneficially owned by the Depositor, the Trustee, or any Affiliate
thereof shall be disregarded and deemed not to be Outstanding, and the Voting
Rights to which its Holder would otherwise be entitled shall not be taken into
account in determining whether the requisite percentage of aggregate Voting
Rights necessary to effect any such consent or take any such action has been
obtained except that, in determining whether the Trustee shall be protected in
relying upon any such request, demand, authorization, direction, notice, consent
or waiver, only Certificates with respect to which the Depositor has provided
the Trustee an Officer's Certificate stating that such Certificates so owned
shall be so disregarded. Certificates so owned that have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Certificates and
13
<PAGE>
that the pledgee is not, to the knowledge of the Trustee, the Depositor, or any
Affiliate of any thereof. The principal amount or notional amount, as
applicable, of a Discount Certificate that shall be deemed to be Outstanding for
the determination referred to in the foregoing proviso shall be the Certificate
Principal Balance or Certificate Notional Amount, as applicable, with respect
thereto as of the date of such determination, and the principal amount or
notional amount, as applicable, of a Certificate denominated in a Foreign
Currency that shall be deemed to be Outstanding for purposes of the
determination referred to in the foregoing provision shall be the amount
calculated pursuant to Section 5.11(c).
"Participant": A broker, dealer, bank, other financial
-----------
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"Pass-Through Rate": With respect to any Series (or Class
-----------------
within such Series) of Certificates (except certain Discount Certificates and
Certificates entitled to nominal or no interest distributions) the annual rate
at which interest accrues on the Certificates of such Series (or Class), which
may be a fixed rate or a floating rate of interest, determined upon the basis
and in the manner specified in the related Series Supplement.
"Paying Agent": As defined in Section 5.13.
------------
"Percentage Interest": With respect to a Certificate of any
-------------------
Series or Class within a Series, the portion of such Series or Class evidenced
by such Certificate, expressed as a percentage, equal to the product of (x) a
fraction, the numerator of which is the initial Certificate Principal Balance or
Notional Amount, as applicable, represented by such Certificate and the
denominator of which is the aggregate initial Certificate Principal Balance or
Notional Amount, as applicable, of all the Certificates of such Series or Class
and (y) 100.
"Permitted Investments": If applicable, with respect
---------------------
to any Series, as defined in the related Series Supplement.
"Person": Any individual, corporation, partnership, limited
------
liability company, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or government
or any agency or political subdivision thereof.
14
<PAGE>
"Place of Distribution": With respect to any Series (or Class
---------------------
within such Series) of Certificates, the place or places where the principal of
(and premium, if any) and interest on the Certificates or such Series (or Class)
are distributable as specified in the related Series Supplement.
"Predecessor Certificate": With respect to any particular
-----------------------
Certificate, every previous Certificate evidencing all or a portion of the same
interest as that evidenced by such particular Certificate; and for the purpose
of this definition, any Certificate authenticated and delivered under Section
5.05 in lieu of a lost, destroyed or stolen Certificate shall be deemed to
evidence the same interest as the lost, destroyed or stolen Certificate.
"Prepaid Ordinary Expenses": Unless otherwise
-------------------------
specified in the Series Supplement, the amount (if any) paid by the Depositor to
the Trustee on or before the Closing Date to cover Ordinary Expenses, as
specified in the related Series Supplement.
"Proceeding": Any suit in equity, action at law or
----------
other judicial or administrative proceeding.
"Purchase Price": If applicable, as specified in the
--------------
related Series Supplement.
"Rating Agency": With respect to any Series (or Class within
-------------
such Series), each nationally recognized rating organization specified in the
related Series Supplement that initially rates the Certificates of such Series
(or Class).
"Rating Agency Condition": With respect to any action or
-----------------------
occurrence, unless otherwise specified in the applicable Series Supplement, that
each Rating Agency shall have been given 10 days (or such shorter period
acceptable to each Rating Agency) prior notice thereof and that each Rating
Agency shall have notified the Depositor and the Trustee in writing that such
action or occurrence will not result in a reduction or withdrawal of the then
current rating of any Certificate of the applicable Series.
"Realized Losses": With respect to any defaulted and
---------------
liquidated Underlying Security, the excess, if any, of (x) the principal amount
of such Underlying Security plus accrued and unpaid interest thereon, plus
expenses incurred by the Trustee in connection with the practices and procedures
referred to in Section 3.07(b) to the extent reimbursable under these Standard
15
<PAGE>
Terms and the related Series Supplement, over (y) Liquidation Proceeds with
respect thereto.
"Record Date": With respect to any Distribution Date
-----------
for any Series (or Class within such Series) of Registered Certificates, the
date specified in the related Series Supplement.
"Registered Certificate": Any Certificate registered
----------------------
as to principal, premium, if any, and interest in the Certificate Register.
"Registered Holder": The Person in whose name a
-----------------
Registered Certificate is registered in the Certificate Register
on the applicable Record Date.
"Required Interest": Unless otherwise specified in the related
-----------------
Series Supplement, with respect to the Outstanding Certificates of any Series or
any Class thereof, the accrued and undistributed interest on the Certificate
Principal Balance or Notional Amount of such Outstanding Certificates (or the
amount due under any related Coupons), computed at the applicable Pass- Through
Rate.
"Required Percentage--Amendment": Unless otherwise specified
------------------------------
in the related Series Supplement, if a Rating Agency Condition is specified in
the related Series Supplement and such Rating Agency Condition is met, or, if a
Rating Agency Condition is not so specified in the related Series Supplement,
66-2/3% of the aggregate Voting Rights of Certificates of such Series, and 100%
otherwise.
"Required Percentage--Definitive Certificates": Unless
--------------------------------------------
otherwise specified in the related Series Supplement, 66 2/3% of
the aggregate Voting Rights of Certificates of such Series.
"Required Percentage--Direction of Trustee": Unless
-----------------------------------------
otherwise specified in the related Series Supplement, 66 2/3% of
the aggregate Voting Rights of Certificates of such Series.
"Required Percentage--Remedies": Unless otherwise
-----------------------------
specified in the related Series Supplement, 66-2/3% of the aggregate Voting
Rights of Certificates of such Series.
"Required Percentage--Removal of Trustee": Unless
---------------------------------------
otherwise specified in the related Series Supplement, more than 50% of the
aggregate Voting Rights of Certificates of such Series.
16
<PAGE>
"Required Percentage--Waiver": Unless otherwise specified in
---------------------------
the related Series Supplement, 66-2/3% of the aggregate Voting Rights of
Certificates of such Series.
"Required Premium": If applicable, unless otherwise specified
----------------
in the related Series Supplement, with respect to the Certificates of any Series
or any Class thereof, an amount equal to the product, as determined on any
Distribution Date with respect to such Series and Class, of (i) the Required
Principal for such Series and Class and (ii) the Call Premium Percentage for
such Series and Class.
"Required Principal": As determined for any Distribution Date
------------------
for a given Series (or Class within such Series), unless otherwise specified in
the related Series Supplement, the amounts on deposit in the Certificate Account
allocable to principal payments on the Underlying Securities (including from
Credit Support, if any, and Advances, if any, but excluding amounts in respect
of principal payments to the extent that Advances with respect thereto were
distributed as Required Principal on a prior Distribution Date) and required to
be distributed in respect of the Certificates of such Series (or Class) in
accordance with the terms of such Certificates and such related Series
Supplement.
"Required Rating": With respect to any Series (or Class within
---------------
such Series), the rating category (or categories) specified in the Series
Supplement that, as a condition to the issuance of such Series or Class, is (or
are) the lowest category (or categories) in which the Certificates of such
Series or Class may be categorized by the Rating Agency.
"Requisite Reserve Amount": As of any date with respect to any
------------------------
Series (or Class within such Series) of Certificates, the amount, if any,
required to be maintained in the Reserve Account, if any, for such Series or
Class as specified in or determined pursuant to the related Series Supplement.
"Reserve Account": An Eligible Account, if any,
---------------
created and maintained pursuant to Section 3.06 and specified in the related
Series Supplement.
"Responsible Officer": With respect to the Trustee,
-------------------
any officer within the Corporate Trust Office of the Trustee, including any Vice
President, Assistant Vice President, Assistant Treasurer or any other officer of
the Trustee customarily performing functions similar to those performed by any
of the
17
<PAGE>
above designated officers and also, with respect to a particular matter, any
other officer to whom such matter is referred because of such officer's actual
knowledge of and familiarity with the particular subject.
"Retained Interest": If applicable, with respect to any
-----------------
Underlying Security, an ownership interest in and a right to a portion of the
payments thereon by the obligor thereof, as specified in the related Series
Supplement, held by the Person so specified in such Series Supplement.
"Sale Procedures": Unless otherwise specified in the Series
---------------
Supplement, shall mean that, with respect to any sale of one or more Underlying
Securities, the Market Agent, on behalf of the Trust, shall sell such Underlying
Security or Underlying Securities to the highest bidders among not less than two
solicited bidders for such Underlying Securities (one of which bidders may
include Lehman Brothers Inc. or any Affiliate thereof; provided, however, that
neither Lehman Brothers Inc. nor any of its Affiliates will be under any
obligation to bid, and which bidders need not be limited to recognized broker
dealers). In the sole judgment of the Market Agent, bids may be evaluated on the
basis of bids for a single Underlying Security, a portion of the Underlying
Securities or all of the Underlying Securities being sold or any other basis
selected in good faith by the Market Agent.
"S&P": Shall mean Standard & Poor's, a division of The
---
McGraw-Hill Companies, Inc. and any successor thereof.
"Series": A separate series of Certificates issued
------
pursuant to these Standard Terms and a related Series Supplement, which series
may be divided into two or more Classes, as provided in such Series Supplement.
"Series Supplement": An agreement incorporating these
-----------------
Standard Terms that authorizes the issuance of a particular
Series (and each Class within such Series) of Certificates.
"Special Distribution Date": If applicable, with
-------------------------
respect to any Series, as defined in the related Series
Supplement and the related Certificates.
"Specified Currency": As defined in the related Series
------------------
Supplement.
"Standard Terms": As defined in the preliminary
--------------
statement to this Agreement.
18
<PAGE>
"Sub-Administration Account": As defined in Section 7.02.
--------------------------
"Sub-Administration Agreement": The written contract,
----------------------------
if any, between the Trustee and a Sub-Administrative Agent and any successor
Trustee or Sub-Administrative Agent relating to the administration of certain
Underlying Securities as provided in Section 7.02.
"Sub-Administration Agent": Any Person with which the
------------------------
Trustee has entered into a Sub-Administration Agreement and which meets the
qualifications of a Sub-Administrative Agent pursuant to Section 7.02.
"Surety Bond": If so specified in the Series Supplement, with
-----------
respect to any Series (or Class within such Series) of Certificates, the surety
bond providing for the distribution under certain circumstances specified in
such Series Supplement of amounts to the Certificateholders of such Series (or
Class), which surety bond will be issued to the Trustee for the benefit of such
Certificateholders by the related Credit Support Provider, all as specified in
such Series Supplement.
"Swap Agreement": If so specified in the Series Supplement,
--------------
with respect to any Series, shall mean the ISDA Master Agreement dated as of the
Closing Date by and between the Trust and the Swap Counterparty, and the form of
Schedule which is attached as an exhibit thereto, as the same may be amended or
supplemented by any attached Confirmations from time to time as provided herein
and therein.
"Swap Counterparty": If so specified in the Series
-----------------
Supplement, with respect to any Series, shall be specified in the Series
Supplement.
"Swap Distribution Amount": If so specified in the Series
------------------------
Supplement, with respect to any Series, shall mean all amounts then due and
owing to the Swap Counterparty pursuant to the Swap Agreement, other than Swap
Termination Payments.
"Swap Guarantee": If so specified in the Series
--------------
Supplement, with respect to any Series, shall mean, the Guarantee issued by the
Swap Guarantor in favor of the Trust substantially in the form attached as an
exhibit to the Swap Agreement.
"Swap Guarantor": If so specified in the Series Supplement,
--------------
with respect to any Series, shall be specified in the Series Supplement.
19
<PAGE>
"Swap Receipt Amount": If so specified in the Series
-------------------
Supplement, with respect to any Series, shall mean all amounts
due and owing to the Trust pursuant to the Swap Agreement, other
than Swap Termination Payments.
"Swap Termination Payment": If so specified in the Series
------------------------
Supplement, with respect to any Series, means the amount payable by the Swap
Counterparty to the Trust, or by the Trust to the Swap Counterparty, pursuant to
Section 6(e) of the Swap Agreement.
"Trust": With respect to any Series, the segregated asset or
-----
pool of assets subject hereto, constituting the trust created hereby and by the
related Series Supplement and to be administered hereunder and thereunder,
consisting of those Underlying Securities and the Credit Support, if applicable,
and all sums distributed in respect thereof that are specified as being part of
the Trust for such Series in the related Series Supplement, all for the benefit
of the Certificateholders of such Series as of any particular time.
"Trust Agreement": With respect to each Series of
---------------
Certificates, these Standard Terms and all amendments hereof and, unless the
context otherwise requires, the related Series Supplement and all amendments
thereto.
"Trustee": With respect to any Series, the Person so specified
-------
in the applicable Series Supplement, until a successor Person shall have become
the Trustee pursuant to the applicable provisions of these Standard Terms and
the applicable Series Supplement, and thereafter "Trustee" shall mean such
successor Person.
"Trust Indenture Act": The Trust Indenture Act of
-------------------
1939, as amended, as the same is in force and effect as of the date hereof.
"Underlying Security" or "Underlying Securities": With
------------------- ---------------------
respect to any Series, the asset or assets Granted as part of the Trust for such
Series or acquired (or, in the case of an agreement, entered into) by the
Trustee for the benefit of the Holders of such Series, and, if and to the extent
provided in the applicable Series Supplement, for the benefit of any Credit
Support Provider, all as identified in the Schedule I to the related Series
Supplement. The Underlying Securities for any such Series or the related Trust
shall not constitute Underlying Securities for any other Series or any other
Trust.
20
<PAGE>
"Underlying Security Interest Payment Date": Shall mean, with
-----------------------------------------
respect to an Underlying Security, each date specified in Schedule I to a Series
Supplement as a date on which interest is scheduled, as of the Closing Date, to
be payable by or on behalf of the Issuer on such Underlying Security in
accordance with its terms.
"Underlying Security Payment Date": Shall mean a Schedule
--------------------------------
Underlying Security Payment Date and any other date on which interest, principal
and/or redemption premium is payable on an Underlying Security in accordance
with its terms.
"Uniform Commercial Code": The Uniform Commercial Code as in
-----------------------
effect in the relevant jurisdiction or, with respect to the State of Louisiana,
the equivalent body of statutory and common law.
"United States": The United States of America (including the
-------------
States), its territories, its possessions and other areas subject to its
jurisdiction.
"Voting Rights": With respect to any Series (or Class within
-------------
such Series) of Certificates, the portion of the aggregate voting rights of the
Certificates of such Series or Class which shall be allocated to any Certificate
as specified in the applicable Series Supplement.
SECTION 1.02. Rules of Construction. Unless the
---------------------
context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally accepted accounting
principles as in effect in the United States from time to time;
(iii) "or" is not exclusive;
(iv) the words "herein", "hereof", "hereunder" and other
words of similar import refer to this Trust Agreement as a whole and
not to any particular Article, Section or other subdivision:
(v) "including" means including without limitation;
and
21
<PAGE>
(vi) words in the singular include the plural and words
in the plural include the singular.
SECTION 1.03. Compliance Certificates and Opinions; Record
--------------------------------------------
Date. (a) Upon any application or request by the Depositor to the Trustee to
- ----
take any action under any provision of this Trust Agreement other than the
initial issuance of the Certificates, the Depositor shall furnish to the Trustee
an Officer's Certificate stating that, in the opinion of the signer thereof, all
conditions precedent, if any, provided for in this Trust Agreement relating to
the proposed action have been complied with and an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent, if any, have
been complied with, except that in the case of any such application or request
as to which the furnishing of such documents is specifically required by any
provision of this Trust Agreement relating to such particular application or
request, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for this Trust Agreement (other than a
certificate provided pursuant to Section 3.10(d)) shall include:
(1) a statement that the individual signing such
certificate or opinion has read such covenant or condition and the
definitions herein relating thereto;
(2) a brief statement as to the nature and scope of
the examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such
individual, he or she has made such examination or investigation as is
necessary to enable him or her to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of such
individual, such condition or covenant has been complied with.
(b) The Depositor may at its option by delivery of an
Officer's Certificate to the Trustee set a record date to determine the Holders
of any subclass of Certificates entitled to give any consent, request, demand,
authorization, direction, notice, waiver or other act. Notwithstanding Section
316(c) of
22
<PAGE>
the Trust Indenture Act, such record date shall be the record date specified in
such Officer's Certificate, which shall be a date not more than 30 days prior to
the first solicitation of Certificateholders in connection therewith. If such a
record date is fixed, such consent, request, demand, authorization, direction,
notice, waiver or other act may be given before or after such record date, but
only the Holders of record of Certificates of the applicable subclass at the
close of business on such record date shall be deemed to be Certificateholders
of such subclass for the purposes of determining whether Holders of the
requisite aggregate principal amount of Outstanding Certificates of such
subclass have authorized or agreed or consented to such consent, request,
demand, authorization, direction, notice, waiver or other act, and for that
purpose the aggregate principal amount of the Outstanding Certificates of such
subclass shall be computed as of such record date; provided, however, that no
such consent, request, demand, authorization, direction, notice, waiver or other
act by the Holders of Certificates of such subclass on such record date shall be
deemed effective unless it shall become effective pursuant to the provisions of
this Trust Agreement not later than one year after the record date.
ARTICLE II
Declaration of Trusts; Issuance of Certificates;
Purpose and Classification of Trusts
------------------------------------
SECTION 2.01. Creation and Declaration of Trusts: Assignment
----------------------------------------------
of Underlying Securities. (a) The Depositor, concurrently with the execution and
- ------------------------
delivery hereof, does hereby agree to Grant to the Trustee, on behalf and for
the benefit of the Certificateholders of each given Series of Certificates and
without recourse, all the right, title and interest of the Depositor, including
any security interest therein for the benefit of the Depositor, in, to and under
the Underlying Securities attributable to each such Series (except for the
Underlying Securities attributable to such Series which are not Granted by the
Depositor, as specified in Schedule II to the applicable Series Supplement), now
existing or hereafter acquired, in each case as identified on the applicable
Schedule I, and all other assets included or to be included in the respective
Trust for the benefit of the Certificateholders of each such Series. Each such
Grant will include all interest, premium (if any) and principal received by or
on behalf of the Depositor of, on or with respect to any such Underlying
Securities due after the applicable Cut-off Date, and, unless
23
<PAGE>
otherwise specified in the Series Supplement, will exclude (i) all interest,
premium (if any) and principal of, on or with respect to any such Underlying
Securities due on or before the applicable Cut-off Date and (ii) any Retained
Interest in any such Underlying Security.
(b) In connection with each Grant referred to in the preceding
paragraph, the Depositor shall, not later than the applicable Closing Date,
either (i) deposit the Underlying Securities for a given Series (except for the
Underlying Securities attributable to such Series which are to be acquired from
a Person other than the Depositor, as specified on the Underlying Securities
Schedule to the applicable Series Supplement) with the Trustee by physical
delivery of such Underlying Securities, duly endorsed, to the Trustee or (ii)
have delivered such Underlying Securities to a Clearing Agency, in which event
(A) the Trustee has accepted delivery of such Underlying Securities through such
Clearing Agency, and (B) the Underlying Securities have been credited to a trust
account of the Trustee, or its authorized agent, and the Trustee shall have the
right to hold and maintain such Underlying Securities on deposit with such
Clearing Agency for all purposes of this Trust Agreement.
(c) Unless otherwise specified in the applicable Series
Supplement, the Grant of such Underlying Securities by the Depositor for a given
Series accomplished hereby and by such Series Supplement is absolute and is
intended by the parties hereto as a sale.
(d) In the case of each delivery of Underlying Securities to
the Trustee, the Depositor shall be deemed thereby to represent and warrant to
the Trustee that:
(i) the Depositor is duly authorized to so deliver
such Underlying Securities;
(ii) the Underlying Securities so delivered are
genuine;
(iii) at the time of delivery of the Underlying Securities,
such Underlying Securities are free and clear of any lien, pledge,
encumbrance, right, charge, claim or other security interest; and
(iv) such delivery is irrevocable and free of any continuing
claim by the Depositor except such as the Depositor may have as a
Certificateholder of a Certificate;
24
<PAGE>
The above representations and warranties shall survive the
delivery of such Underlying Securities and the Certificates in respect thereof.
The Depositor shall further be deemed by such delivery to have made the
representations that, to the best of its knowledge, as of the Closing Date, no
default or event of default with respect to the Underlying Securities has
occurred and is continuing.
(e) Unless otherwise specified in the related Series
Supplement, it is the intention of all of the parties hereto that the transfer
of the Trust property hereunder and under any Series Supplement shall constitute
a sale and the Trust created hereunder and thereunder shall constitute a fixed
investment trust for federal income tax purposes under Treasury Regulation
Section 301.7701-4, and all parties hereto and thereto agree to treat the Trust,
any distributions therefrom and the beneficial interest in the Certificates
consistently with such characterization. The provisions of this Trust Agreement
shall be interpreted consistently with such characterization.
(f) Unless otherwise specified in the related Series
Supplement, any Trust created hereunder shall not engage in any business or
activities other than in connection with, or relating to, the holding,
protecting and preserving of the Trust property and the issuance of the
Certificates, and other than those required or authorized by this Trust
Agreement or incidental to and necessary to accomplish such activities. Any
Trust created hereunder shall not issue or sell any certificates or other
obligations other than the Certificates or otherwise incur, assume or guarantee
any indebtedness for money borrowed.
SECTION 2.02. Acceptance by Trustee. With respect to each
---------------------
Series, the Trustee will acknowledge receipt by it, or by a custodian on its
behalf, of the related Underlying Securities and the related documents referred
to in Section 2.01, now existing or hereafter acquired, and declares that it
will hold such Underlying Securities and documents and all other documents
delivered to it pursuant to this Trust Agreement, and that it will hold all such
assets and such other assets (including Underlying Securities acquired from a
Person other than the Depositor) comprising the Trust for a given Series of
Certificates, in trust for the exclusive use and benefit of all present and
future Certificateholders of such Series and for the purposes and subject to the
terms and conditions set forth in this Trust Agreement.
SECTION 2.03. Representations and Warranties of the Depositor.
-----------------------------------------------
The Depositor hereby represents and warrants to the
25
<PAGE>
Trustee that as of the Closing Date or as of such other date specifically
provided herein or in the applicable Series Supplement:
(i) the Depositor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware;
(ii) with respect to each Series Supplement, to the Depositor's
knowledge, the information set forth in Schedule I attached thereto
with respect to each Underlying Security is true and correct in all
material respects at the date or dates, respecting which, such
information is furnished;
(iii) the execution and delivery of this Trust Agreement by the
Depositor and its performance of and compliance with the terms of this
Trust Agreement will not violate the Depositor's articles of
incorporation or By-laws or constitute a default (or an event which,
with notice or lapse of time, or both, would constitute a default)
under, or result in the breach or acceleration of, any material
contract, agreement or other instrument to which the Depositor is a
party or which may be applicable to the Depositor or any of its assets;
(iv) the Depositor has the full power and authority to enter into
and consummate all transactions contemplated by this Trust Agreement,
has duly authorized the execution, delivery and performance of this
Trust Agreement and has duly executed and delivered this Trust
Agreement. This Trust Agreement, upon its execution and delivery by the
Depositor and assuming due authorization, execution and delivery by the
Trustee, will constitute a valid, legal and binding obligation of the
Depositor, enforceable against it in accordance with the terms hereof,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other laws relating to or
affecting the rights of creditors generally, and by general equity
principles (regardless of whether such enforcement is considered a
proceeding in equity or at law); and
(v) any additional representations and warranties, if any, that may
be specified in the applicable Series Supplement.
It is understood and agreed that the representations
and warranties of the Depositor set forth in this Section 2.03
26
<PAGE>
shall survive delivery of the respective documents to the Trustee and shall
inure to the benefit of the Trustee on behalf of the Certificateholders
notwithstanding any restrictive or qualified endorsement or assignment. Upon
discovery by any of the Depositor or the Trustee of a breach of any of the
foregoing representations and warranties which materially and adversely affects
the interests of the Certificateholders, the party discovering such breach shall
give prompt written notice thereof to the other party.
SECTION 2.04. Breach of Representation, Warranty or Covenant.
----------------------------------------------
Within 90 days of the earlier of discovery by the Depositor or receipt of notice
by the Depositor of a breach of any representation or warranty of the Depositor
set forth in Section 2.03 that materially and adversely affects the interests of
the Certificateholders of a given Series of Certificates, the Depositor shall
cure such breach in all material respects.
SECTION 2.05. Agreement to Authenticate and Deliver
-------------------------------------
Certificates. With respect to each Series of Certificates and the related Trust,
- ------------
the Trustee hereby agrees and acknowledges that it will, concurrently with the
Grant to and receipt by it of the related Underlying Securities and delivery to
it by the Depositor of executed Certificates and Coupons, if any, of such
Series, cause to be authenticated and delivered to or upon the written order of
the Depositor, in exchange for the Underlying Securities and such other assets
constituting the Trust for a given Series, Certificates duly authenticated by or
on behalf of the Trustee in authorized denominations evidencing ownership of the
entire Trust for such Series, all in accordance with the terms and subject to
the conditions of Sections 5.02 and 5.14.
ARTICLE III
Administration of each Trust
----------------------------
SECTION 3.01. Administration of each Trust. (a) The
----------------------------
Trustee shall administer the Underlying Securities for each given Trust for the
benefit of the Certificateholders of the related Series. In engaging in such
activities, the Trustee shall follow or cause to be followed collection
procedures in accordance with the terms of these Standard Terms and the
applicable Series Supplement, the respective Underlying Securities and any
applicable Credit Support Instruments. With respect to each Trust, and subject
only to the above-described standards and the terms of these Standard Terms, the
related Series Supplement and the respective Underlying Securities and
applicable Credit
27
<PAGE>
Support Instruments, if any, the Trustee shall have full power and authority,
acting alone or through Sub-Administrative Agents as provided in Section 7.02,
to do or cause to be done any and all things in connection with such
administration which it deems necessary to comply with the terms of these
Standard Terms and the applicable Series Supplement.
(b) The duties of the Trustee shall be performed in accordance
with applicable local, State and Federal law, and the Trustee shall make any and
all filings, reports, notices or applications with, and seek any comments and
authorizations from, the Commission and any State securities authority on behalf
of the Trust for each Series.
SECTION 3.02. Collection of Certain Underlying Security
-----------------------------------------
Payments. With respect to any Series or Class of Certificates, the Trustee shall
- --------
make reasonable efforts to collect all payments required to be made pursuant to
the terms of the Underlying Securities in a manner consistent with the terms of
this Trust Agreement, such Underlying Securities and any related Credit Support
Instruments.
SECTION 3.03. Certificate Account. (a) For each Series of
-------------------
Certificates, the Trustee shall establish and maintain one or more Eligible
Accounts (collectively, the "Certificate Account"), held in trust for the
benefit of the Certificateholders of such Series. The Trustee on behalf of such
Certificateholders shall possess all right, title and interest in all funds on
deposit from time to time in each Certificate Account and in all proceeds
thereof. With respect to each Series of Certificates, the Certificate Account
shall be under the sole dominion and control of the Trustee for the benefit of
the related Certificateholders. With respect to each Series of Certificates, not
later than the close of business on the Business Day on which the Trustee
receives such amounts in the form of immediately available funds (so long as
such funds are received by the Trustee by 3:00 p.m. New York City time, and on
the next Business Day otherwise), the Trustee shall deposit or cause to be
deposited in the Certificate Account all amounts received by it with respect to
the Underlying Securities, any Credit Support and all Liquidation Proceeds
related to such Series including:
(i) all payments on account of principal of such
Underlying Securities;
(ii) all payments on account of interest on such
Underlying Securities;
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<PAGE>
(iii) all payments on account of premium (if any) on
such Underlying Securities;
(iv) any payments in respect of any such Credit
Support;
(v) any Advances made as required pursuant to Section
4.04; and
(vi) any interest or investment income earned on funds
deposited in the related Accounts.
Unless otherwise specified in the applicable Series
Supplement, it is understood and agreed that payments in the nature of
prepayment or redemption penalties, late payment charges, default interest or
reinvestment income which may be received by the Trustee shall be deposited by
the Trustee in the Certificate Account and shall not be retained by the Trustee
for its own account.
If, at any time, the Certificate Account for any Series ceases
to be an Eligible Account, the Trustee shall within 5 Business Days (or such
longer period, not to exceed 30 calendar days, as to which the Rating Agency
Condition is met) establish a new Certificate Account meeting the conditions
specified above and the Trustee shall within five Business Days transfer any
cash and any investments on deposit in the Certificate Account to such new
Certificate Account, and from the date such new Certificate Account is
established, it shall be the Certificate Account for such Series.
(b) The Trustee shall give notice to the Depositor and the
Rating Agency of the location of each Eligible Account constituting the
Certificate Account and prior to any change thereof.
SECTION 3.04. Liquidation of the Underlying Securities. If
----------------------------------------
specified in the applicable Series Supplement, upon the occurrences of specified
events, the Trustee shall direct the Market Agent to sell the Underlying
Securities in compliance with the Sale Procedures and to deposit the Liquidation
Proceeds therefrom into the Certificate Account pursuant to Section 3.03(a)
hereof.
SECTION 3.05. Investment of Funds in the Accounts. The Trustee
-----------------------------------
on behalf of the Trust, may direct any depository institution maintaining the
Certificate Account or the Reserve Account, if any, for the applicable Series
and any other
29
<PAGE>
segregated Eligible Account the contents of which are held for the benefit of
Certificateholders of such Series (each, an "Account") to invest the funds
therein at the specific written direction of the Depositor in one or more
Eligible Investments bearing interest or sold at a discount, which shall be held
to maturity unless payable on demand and which funds shall not be reinvested
upon the maturity or demand for payment of such Eligible Investment. If the
Depositor does not provide any investment directions, funds held in any Account
will be invested in the Eligible Investments specified in clause (ii) of the
definition thereof. Investments of such funds shall be invested in Eligible
Investments that will mature so that such funds will be available for
distribution on the next Distribution Date. Except as otherwise provided in the
applicable Series Supplement, any earnings with respect to such Permitted
Investments shall be paid to the Certificateholders (and, if applicable, the
Retained Interest holder) pro rata in proportion to their interest in the
invested funds. In the event amounts on deposit in an Account are at any time
invested in an Eligible Investment payable on demand, the Trustee shall:
(x) consistent with any notice required to be given
thereunder, demand that payment thereon be made on the last day such
Eligible Investment may otherwise mature hereunder in an amount equal
to the lesser of (1) all amounts then payable thereunder and (2) the
amount required to be withdrawn on such date; and
(y) demand same day payment of all amounts due thereunder upon
a determination by the Trustee that such Eligible Investment would not
constitute an Eligible Investment in respect at funds thereafter on
deposit in any Account.
SECTION 3.06. Maintenance of Credit Support. (a) On
-----------------------------
the applicable Closing Date, the Trustee at the written direction of the
Depositor or, if so specified in the applicable Series Supplement, the Depositor
shall, to the extent specified in the applicable Series Supplement, establish
and maintain, or enter into, as applicable, in the name of the Trustee, either
as a part of the related Trust or outside it, for the benefit of the
Certificateholders of the related Series, the Credit Support specified in the
applicable Series Supplement. To the extent specified in the applicable Series
Supplement, the Depositor will make or cause to be made any initial deposit to
the Certificate Account or any Reserve Account for the related Series as of the
Closing Date. Unless the Series Supplement for a given Series provides
otherwise, if a Reserve Account exists for such Series,
30
<PAGE>
collections with respect to the Underlying Securities for such Series not
distributed to the Certificateholders of such Series shall be deposited in the
Reserve Account. The Reserve Account, if any, shall be an asset of the Depositor
(and the income earned on any amounts held in the Reserve Account shall be
allocable to the Depositor, who agrees to include any such income in its gross
income for all federal, state and local income and franchise tax purposes) and
will not be a part of or otherwise be includible in the Trust but will be held
for the benefit of the Certificateholders.
(b) Amounts on deposit in the Reserve Account and amounts
available pursuant to any other Credit Support for such Series shall be applied
by the Trustee to make distributions of principal of and premium (if any) and
interest on the Certificates of such Series as required pursuant to Section 4.01
and the applicable Series Supplement to the extent that funds are not otherwise
available for such purpose. If specified in such Series Supplement, immediately
after each Distribution Date, amounts on deposit in the Reserve Account for such
Series in excess of a specified amount shall be paid to the Person so specified
in such Series Supplement.
SECTION 3.07. Realization Upon Defaulted Underlying
-------------------------------------
Securities. (a) The Trustee, on behalf of the Certificateholders, shall assert
- ----------
claims under each applicable Credit Support Instrument, and shall take such
reasonable steps as are necessary to receive payment or to permit recovery
thereunder with respect to any defaulted Underlying Securities, subject in all
cases to the provisions of Article VII hereof.
(b) Unless otherwise provided in the related Series
Supplement, if the Trustee, is unable to obtain full recovery in respect of a
defaulted Underlying Security and any related Credit Support Instrument pursuant
to Section 3.07(a), the Trustee shall follow or cause to be followed such normal
practices and procedures as it deems necessary or advisable to realize upon such
defaulted Underlying Security and such Credit Support Instrument, subject in all
cases to the provisions of Article VII hereof.
(c) If the Liquidation Proceeds of a defaulted Underlying
Security are less than the sum of (i) the outstanding principal balance of the
defaulted Underlying Security, (ii) interest accrued but unpaid thereon at the
applicable interest rate and (iii) the aggregate amount of expenses incurred by
the Trustee in connection with the practices and procedures referred to in
paragraph (b) of this Section 3.07 to the extent
31
<PAGE>
reimbursable under these Standard Terms and the related Series Supplement, the
Trust for the applicable Series shall recognize a Realized Loss equal to the
amount of such difference. Any such reimbursed Realized Loss shall be allocated
pursuant to Section 4.05 among the Certificateholders of such Series in the
manner and priority set forth in the related Series Supplement.
(d) With respect to any Underlying Securities, if specified in
a related Series Supplement, if any related document or instrument is found to
be missing or defective in any material respect, the Trustee shall immediately
notify the Depositor and the Underlying Securities Issuer who sold the
applicable Underlying Securities to the Depositor. If and to the extent
specified in the related Series Supplement, if the Underlying Securities Issuer
cannot cure such omission or defect within 60 days after receipt of such notice,
the Underlying Securities Issuer will be obligated, within 90 days of receipt of
such notice, to repurchase the related Underlying Securities from the Trustee at
the Purchase Price or provide a substitute for such Underlying Securities.
Neither the Trustee nor the Depositor shall be obligated to repurchase or
provide a substitute for such Underlying Securities if the Underlying Securities
Issuer defaults on its obligations. Unless otherwise specified in the related
Series Supplement, if applicable, the Underlying Securities Issuer's repurchase
or substitution obligation constitutes the sole remedy available to the
Certificateholders or the Trustee for omission of, or a material defect in, or
failure to provide, a constituent document.
SECTION 3.08. Retained Interest. The Retained Interest, if
-----------------
any, in any Underlying Security shall initially be held by the Person so
specified in the related Series Supplement as and to the extent specified
therein. With respect to each Underlying Security, unless otherwise specified in
the related Series Supplement, the Retained Interest shall be deducted by the
Trustee from applicable collections in respect of such Underlying Security.
Unless otherwise provided in the applicable Series Supplement, collections in
respect of Retained Interest shall not be deposited in the Certificate Account
for the applicable Series and shall not constitute a part of the Trust for such
Series, but shall instead be distributed to the holder of such Retained
Interest; provided, however, that the Series Supplement for any Series with
respect to which there is a Retained Interest may provide that, notwithstanding
the terms contained herein, commingled amounts received in respect of assets
inclusive of Underlying Securities and Retained Interest may initially be
deposited in a separate and discrete account established by the Trustee and such
Series Supplement may provide for additional
32
<PAGE>
terms relating thereto. Unless otherwise provided in the applicable Series
Supplement, after deduction of all applicable fees as provided for in this Trust
Agreement, on each Distribution Date the Trustee shall allocate on a pari passu
basis any partial recovery on an Underlying Security between (a) the Retained
Interest, if any, and (b) distributions to Certificateholders of the applicable
Series.
SECTION 3.09. Access to Certain Documentation. The
-------------------------------
Trustee shall provide to any Federal, State or local regulatory authority that
may exercise authority over any Certificateholder access to the documentation
regarding the Underlying Securities required by applicable laws and regulations.
Such access shall be afforded without charge, but only upon reasonable request
and during normal business hours at the offices of the Trustee designated by it.
In addition, access to the documentation regarding the Underlying Securities
related to a given Series (or Class within such Series) will be provided to any
Certificateholder of such Series (or Class) upon reasonable request during
normal business hours at the offices of the Trustee designated by it at the
expense of the Certificateholder requesting such access.
SECTION 3.10. Reports by the Depositor. The Depositor
------------------------
shall:
(a) file with the Trustee, within 30 days after the Depositor
is required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Depositor is
required to file with the Commission pursuant to Section 13 or Section
15(d) of the Exchange Act; or, if the Depositor is not required to file
information, documents or reports pursuant to either of such sections,
then to file with the Trustee and the Commission, in accordance with
rules and regulations prescribed by the Commission, such of the
supplementary and periodic information, documents and reports which may
be required pursuant to Section 13 of the Exchange Act in respect of a
security listed and registered on a national securities exchange as may
be prescribed in such rules and regulations;
(b) file with the Trustee and the Commission, in accordance
with the rules and regulations prescribed by the Commission, such
additional information, documents and reports with respect to
compliance by the Depositor with the
33
<PAGE>
conditions and covenants provided for in this Trust Agreement, as may
be required by such rules and regulations, certificates or opinions of
independent accountants, conforming to the requirements of Section
314(e) of the Trust Indenture Act;
(c) transmit to all Certificateholders, in the manner and to
the extent provided in Section 313(c) of the Trust Indenture Act, such
summaries of any information, documents and reports required to be
filed by the Company pursuant to subsections (a) and (b) of this
Section 3.10 as may be required by rules and regulations prescribed by
the Commission; and
(d) furnish to the Trustee, not less often than annually, a
certificate from the principal executive, financial or accounting
officer of the Depositor as to his or her knowledge of the Depositor's
compliance with all conditions and covenants under this Trust
Agreement. For purposes of this paragraph (d) such compliance shall be
determined without regard to any period of grace or requirement of
notice provided under this Trust Agreement.
Any reports, statements, documents or other information required to be furnished
by the Depositor to the Trustee pursuant to these Standard Terms or any Series
Supplement shall be deemed to have been delivered to the Trustee if the Trustee
is in possession of such reports, statements, documents or other information at
the time they are to be furnished pursuant to these Standard Terms or any Series
Supplement.
SECTION 3.11. Charges and Expenses. Except as otherwise
--------------------
provided in this Trust Agreement or the related Series Supplement, no amounts in
the nature of fees or charges shall be payable by or withheld from the Trust,
the Depositor or any other person. There shall be no recourse or claim against
the Trust or the property of the Trust for all or any part of any fees or
charges payable to any person.
ARTICLE IV
Distributions and Reports to Certificateholders
-----------------------------------------------
SECTION 4.01. Distributions. (a) On each Distribution
-------------
Date for a given Series of Certificates, the Trustee shall apply Available Funds
in the Certificate Account for such Series in the manner and priority set forth
in the Series Supplement for such Series. In any event, however, any amounts
collected during any
34
<PAGE>
period shall be distributed to the Certificateholders no later than the
Distribution Date immediately following the receipt thereof.
(b) All distributions on the Certificates shall be payable
only from Available Funds, and no provision of this Trust Agreement shall be
deemed to create any obligation on the part of the Trustee or the Depositor to
make any distribution from any other source.
SECTION 4.02. Distributions on Certificates. (a) Distributions
-----------------------------
on any Registered Certificate that are payable and are punctually paid or duly
provided for on any Distribution Date shall be distributed to the Person in
whose name such Registered Certificate (or one or more Predecessor Certificates)
is registered at the close of business on the related Record Date
notwithstanding the cancellation of such Registered Certificate upon any
transfer or exchange subsequent to such related Record Date.
The distribution of interest and principal on Registered
Certificates shall be made:
(i) if the Certificateholder is a Depository, to the
Depository, which shall credit the relevant Participant's
account at such Depository in accordance with the policies and
procedure of the Depository, or
(ii) if the Certificateholder is not a Depository, at
the Corporate Trust Office (except as otherwise specified in
the related Series Supplement) or, at the option of the
Trustee, by check mailed to the address of the Person entitled
thereto as such address shall appear in the Certificate
Register or, if provided in the related Series Supplement and
in accordance with arrangements satisfactory to the Trustee,
at the option of the Registered Holder by wire transfer to an
account designated by the Registered Holder. Notwithstanding
the foregoing paragraph, with respect to a Certificateholder
of Certificates not held in a Depository and having at least
the Minimum Wire Denomination, such payment shall be made by
wire transfer of immediately available funds to the account
designated by such Certificateholder in a written request
received by the Trustee not later than 10 days prior to such
Distribution Date; provided, however, that if a wire transfer
cannot be made for any reason, payment shall be made by check.
The Trustee shall not
35
<PAGE>
be required to send federal funds wires until any
corresponding payments which were not same day funds when
received by it have become same day funds.
In case a Coupon Certificate of any Series (or Class within
such Series) is surrendered in exchange for a Registered Certificate of such
Series or Class after the close of business (at an office or agency in a Place
of Distribution for such Series or Class) on any Record Date and before the
opening of business (at such office or agency) on the next succeeding
Distribution Date, such Coupon Certificate shall be surrendered without the
Coupon relating to such Distribution Date and interest will not be payable on
such Distribution Date in respect of the Registered Certificate issued in
exchange for such Coupon Certificate, but will be distributable only to the
Holder of such Coupon when due in accordance with the provisions of this Trust
Agreement.
(b) Interest on any Coupon Certificate that is distributable
and is punctually distributed or duly provided for on any Distribution Date
shall be distributed to the Holder of the Coupon that has matured on such
Distribution Date upon surrender of such Coupon on such Distribution Date at the
principal London office of the Trustee or at such other Place of Distribution
outside the United States specified in the related Series Supplement.
Interest on any Bearer Certificate (other than a Coupon
Certificate) that is distributable and is punctually distributed or duly
provided for on any Distribution Date shall be distributed to the Holder of the
Bearer Certificate upon presentation of such Bearer Certificate and notation
thereon on such Distribution Date at the principal London office of the Trustee
or at such other Place of Distribution outside the United States specified in
the related Series Supplement.
Unless otherwise specified in the related Series Supplement,
at the direction of the holder of any Bearer Certificate or Coupon Certificate
payable in Dollars, and subject to applicable laws and regulations,
distributions in respect of such Bearer Certificate or Coupon will be made by
check drawn on a bank in The City of New York or, in accordance with
arrangements satisfactory to the Trustee, by wire transfer to a Dollar account
maintained by such Holder with a bank outside the United States. If such
distribution at the offices of the Trustee or all Paying Agents, if any, outside
the United States becomes illegal or is effectively precluded because of the
imposition of exchange controls or similar restrictions on the
36
<PAGE>
full distribution or receipt of such amounts in Dollars, the Depositor will
appoint an office or agent in the United States at which such distribution may
be made. Unless otherwise specified in the related Series Supplement, at the
direction of the Holder of any Bearer Certificate or Coupon payable in a Foreign
Currency, distributions on such Bearer Certificate or Coupon will be made by a
check drawn on a bank outside the United States or, in accordance with
arrangements satisfactory to the Trustee, by wire transfer to an appropriate
account maintained by such Holder outside the United States. Except as provided
in this paragraph, no distribution on any Bearer Certificate or Coupon will be
made by mail to an address in the United States or by transfer to an account
maintained by the Holder thereof in the United States.
(c) Subject to the foregoing provisions of this Section 4.02,
each Certificate delivered under this Trust Agreement upon transfer of or in
exchange for or in lieu of any other Certificate shall carry the rights to
interest accrued and undistributed, and to accrue, that were carried by such
other Certificate.
(d) All computations of interest due with respect to any
Certificate of any Series or Class within such Series shall be made as specified
in the Series Supplement applicable to that particular Series or Class of
Certificates.
(e) With respect to any computations or calculations to be
made under these Standard Terms, the applicable Series Supplement and the
Certificates, except as otherwise provided, (i) all percentages resulting from
any calculation of accrued interest will be rounded, if necessary, to the
nearest 1/100,000 of 1% (.0000001), with five one-millionths of a percentage
point rounded upward, and (ii) all currency amounts will be rounded to the
nearest one-hundredth of a unit (with .005 of a unit being rounded upward).
(f) Unless specified otherwise in a Series Supplement, the
final distribution of principal and/or premium shall be made upon presentation
and surrender of such Certificates at the Corporate Trust Office.
SECTION 4.03. Reports to Certificateholders. Unless otherwise
-----------------------------
specified in the applicable Series Supplement, on the next Business Day
following each such Distribution Date the Trustee shall forward or cause to be
forwarded to the Depositor, each Certificateholder of such Series, to each
Rating Agency rating such Series and such other Persons as may be specified in
such Series Supplement, a statement setting forth:
37
<PAGE>
(i) the amounts received by the Trustee as of the last
such statement in respect of principal, interest and premium on the
Underlying Securities and the Swap Receipt Amount, if any;
(ii) the Swap Distribution Amount, if any, for such
date;
(iii) the amount of the distribution on such Distribution
Date to Certificateholders of each Class of such Series allocable to
principal of and premium, if any, and interest on the Certificates of
each such Class; and the amount of aggregate unpaid interest accrued as
of such Distribution Date;
(iv) in the case of each Class of Floating Rate
Certificates of such Series, the respective Floating Pass- Through Rate
applicable to each such Class on such Distribution Date, as calculated
in accordance with the method specified in such Certificates and the
related Series Supplement;
(v) the amount of compensation received by the Trustee
for the period relating to such Distribution Date, and such other
customary information as the Trustee deems necessary or desirable, (or
that any such Certificateholder reasonably requests,) to enable such
Certificateholders to prepare their tax returns;
(vi) if the Series Supplement provides for Advances, the
aggregate amount of Advances, if any, included in such distribution,
and the aggregate amount of unreimbursed Advances, if any, at the close
of business on such Distribution Date;
(vii) the aggregate stated principal amount and, if
applicable, notional amount of the Underlying Securities related to
such Series, the current rating assigned by the Rating Agency thereon
and the current interest rate or rates thereon at the close of business
on such Distribution Date;
(viii) the aggregate Certificate Principal Balance (or
Notional Amount, if applicable) of each Class of such series at the
close of business on such Distribution Date, separately identifying any
reduction in such aggregate Certificate Principal Balance (or Notional
Amount) due to the allocation of any Realized Losses on such
Distribution Date or otherwise;
38
<PAGE>
(ix) as to any Series (or any Class within such Series)
for which Credit Support has been obtained, the amount or notional
amount of coverage of each element of Credit Support (and rating, if
any, thereof) included therein as of the close of business on such
Distribution Date.
In the case of information furnished pursuant to subclauses (iii) and (v) above,
the amounts shall be expressed as a dollar amount (or the equivalent thereof in
any other Specified Currency) per minimum denomination of Certificates or for
such other specified portion thereof. Within a reasonable period of time after
the end of each calendar year, the Trustee shall furnish to each Person who at
any time during each such calendar year was a Certificateholder a statement
containing the information set forth in subclauses (iii) and (v) above,
aggregated for such calendar year or the applicable portion thereof during which
such person was a Certificateholder. Such obligation of the Trustee shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code as are from time to time in effect. The Trustee shall supply to
Certificateholders who so request all materials received by the Trustee from the
Underlying Securities Issuer.
SECTION 4.04. Advances. (a) Unless otherwise specified in the
--------
applicable Series Supplement, the Trustee shall have no obligation to make
Advances (as defined below) with respect to the Underlying Securities or in
favor of the Holders of any Series (or Class within such Series) of
Certificates.
(b) However, as and to the extent provided in the Series
Supplement for a given Series, and subject to the terms of paragraphs (b) and
(c) of this Section 4.04, on or prior to each Distribution Date, the Trustee
shall advance or cause to be advanced in immediately available funds for deposit
in the Certificate Account for such Series an advance (each, an "Advance") in an
amount equal, unless otherwise specified in the related Series Supplement, to
the aggregate of distributions of principal, premium (if any) and interest (net
of related administration fees and any Retained Interest) due on the Underlying
Securities for such Series (or Class) during the related Collection Period, to
the extent remaining unpaid at the time of such Advance. In satisfaction of its
obligation to make such Advances, the Trustee shall make such Advances from its
own funds. The Trustee may recover Advances from late collections received by
the Trustee on the applicable Underlying Securities, proceeds from any
applicable Credit Support, if any, and Liquidation Proceeds with respect to the
Underlying Securities
39
<PAGE>
for such Series or Class, as specified in the related Series Supplement, as to
which any such unreimbursed Advance was made.
(c) Notwithstanding any provision herein to the contrary, no
Advance shall be required to be made hereunder if the Trustee reasonably
believes that it will be unable to recover such Advance from related late
collections, Credit Support proceeds, if any, or Liquidation Proceeds with
respect to the applicable Underlying Securities. It is further understood and
agreed that the Trustee shall not be obligated to make any Advances in respect
of reductions in the amount of collections on the Underlying Securities due to
bankruptcy proceedings with respect to the Underlying Securities or the obligors
thereof.
(d) Notwithstanding any provision herein to the contrary,
unless otherwise provided in the Series Supplement for a given Series, any
Advances made in respect of any Underlying Securities related to such Series (or
Class within such Series) that are subsequently deemed by the Trustee to be
nonrecoverable from related late collections, Credit Support proceeds, if any,
or Liquidation Proceeds may be reimbursed to the Trustee through the application
of amounts on deposit in the Certificate Amount for such series allocable to any
of such Underlying Securities prior to the distributions of interest, premium
(if any) and principal with respect to the Certificates of such Series or Class.
SECTION 4.05. Allocation of Realized Losses and Trust
---------------------------------------
Expenses. With respect to any Series of Certificates, the manner and priority of
- --------
the allocation of Realized Losses, Administrative Fees, Eligible Expenses,
Allowable Expense Amounts and Extraordinary Trust Expenses, if any, on any
Distribution Date among the Classes, if any, of such Series shall be as set
forth in the related Series Supplement.
SECTION 4.06. Compliance with Withholding Requirements. (a)
----------------------------------------
Notwithstanding any other provision of this Trust Agreement to the contrary, the
Trustee shall comply with all Federal withholding requirements respecting
distributions to Certificateholders of interest or original issue discount that
the Trustee reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding.
(b) Each Certificateholder will provide the Trustee (and, so
long as the Certificates are held at a Depository in the form of Global
Securities, each Beneficial Owner of the Certificates will provide such
Depository and the Trustee) with
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evidence that there should not be any withholding tax assessed for Federal
income tax purposes in respect of distributions to such Certificateholder, such
evidence to take the form of a statement, on a duly executed and up-to-date
Internal Revenue Service Form W-8 (or successor form), Form W-9 (or successor
form), or Form 4224 (or successor form), as applicable, that identifies the
Beneficial Owner of the Certificate; provided, however, that for so long as the
Certificates are held at a Depository in the form of Global Securities, the
Certificateholder shall have no obligation to provide the Trustee with any such
evidence except to the extent it has received such evidence from Beneficial
Owners of the Certificates. The Trustee shall not be required to accept any such
Internal Revenue Service forms if it believes that they are not accurate (but
the Trustee shall not be required to make any independent investigation to
determine their accuracy).
(c) If any tax or other governmental charge shall become
payable by or on behalf of the Trustee, including any tax or governmental charge
required to be withheld from any payment by the Trustee under the provisions of
any applicable law or regulation with respect to any Underlying Securities or
the Certificates, such tax or governmental charge shall be payable by the
Certificateholder and may be withheld by the Trustee. The consent of
Certificateholder shall not be required for such withholding. In the event the
Trustee does withhold any amount from interest or original issue discount
distributions or Advances thereof to any Certificateholder pursuant to Federal
withholding requirements, the Trustee shall indicate in the statement required
pursuant to Section 4.03 the amount so withheld.
(d) The Depositor and the Trustee shall have the right to
refuse the surrender, registration of transfer or exchange of any Certificate
with respect to which such tax or other governmental charge shall be payable
until such payment shall have been made by the Certificateholder.
SECTION 4.07. Optional Exchange. (a) The terms and conditions,
-----------------
if any, upon which Certificates of any Series (or Class within such Series) may
be exchanged for a pro rata portion of the Underlying Securities of the related
Trust will be specified in the related Series Supplement; provided, however,
that any right of exchange shall be exercisable only to the extent that the
Depositor provides upon the Trustee's request an opinion of Counsel that (i)
such exchange would not be inconsistent with the Depositor's and the Trustee's
continued satisfaction of the applicable requirements for exemption under
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Rule 3a-7 (or other applicable rule or exemption) under the Investment Company
Act of 1940, as amended, and all applicable rules, regulations and
interpretations thereunder and (ii) such exchange would not affect the
characterization of the Trust as a "grantor trust" for federal income tax
purposes. Such terms may relate to, but are not limited to, the following:
(1) a requirement that the exchanging Holder tender to the
Trustee Certificates of each Class within such Series;
(2) a minimum Certificate Principal Balance or Notional
Amount, as applicable, with respect to Certificates being tendered for
exchange by a single Holder:
(3) a requirement that the Certificate Principal Balance or
National Amount, as applicable, of each certificate tendered for
exchange be an integral multiple of an amount specified in such Series
Supplement;
(4) specified dates during which a Holder may effect such an
exchange (each, an Optional Exchange Date);
(5) limitations on the right of an exchanging Holder to
receive any benefit upon exchange from any Credit Support or Underlying
Securities which are not debt Securities; and
(6) adjustments to the value of the proceeds of any exchange
based upon required prepayment of future expense allocations and the
establishment of a reserve for any anticipated Extraordinary Trust
Expenses.
(b) Unless otherwise provided in the applicable Series
Supplement, no Certificate may be exchanged pursuant to the preceding paragraph
unless the Trustee has received at least 30 days but not more than 45 days prior
to an Optional Exchange Date in accordance with delivery instructions specified
in the applicable Series Supplement (i) such Certificate with the form entitled
"Option to Elect Exchange" on the reverse thereof duly completed, or (ii) in the
case of Registered Certificates, a telegram, telex, facsimile transmission or
letter from a member of a national securities exchange or the National
Association of Securities Dealers, Inc., the Depository (in accordance with its
normal procedures) or a commercial bank or trust company in the United States
setting forth the name of the Holder of such Registered Certificate, the
Certificate Principal Balance or Notional Amount of such Registered Certificate
to be exchanged and the Certificate number or a description of the tenor and the
terms of such Registered Certificate, a statement that the option
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to elect exchange is being exercised thereby and an assurance that the
Registered Certificate to be exchanged with the form entitled "Option to Elect
Exchange" on the reverse of the Registered Certificate duly completed will be
received by such Trustee not later than five Business Days after the date at
such telegram, telex, facsimile transmission or letter, and such Registered
Certificate and form duly completed must be received by such Trustee by such
fifth Business Day. Any tender of a Certificate by the Holder thereof for
exchange shall be irrevocable. Unless otherwise provided in the applicable
Series Supplement, the exchange option may be exercised pursuant to this Section
by the Holder of a Certificate for less than the Certificate Principal Balance
or Notional Amount of such Certificate as long as the Certificate Principal
Balance or National Amount remaining Outstanding after such exchange is an
authorized denomination and all other exchange requirements set forth in the
related Series Supplement are satisfied upon such partial exchange such
Certificate shall be cancelled and a new Certificate or Certificates for the
remaining Certificate Principal Balance or Notional Amount thereof shall be
issued (which, in the case of any Registered Certificate, shall be in the name
of the Holder of such exchanged Certificate).
(c) Upon the completion of any such optional exchange, the
Trustee shall give prompt written notice thereof to each Rating Agency.
ARTICLE V
The Certificates
----------------
SECTION 5.01. The Certificates. (a) The Certificates of any
----------------
Series (or Class within such Series) may be issued in (x) fully registered form
as Registered Certificates or (y) bearer form with or without Coupons as Bearer
Certificates, and shall be substantially in the form of the exhibits with
respect thereto attached to the applicable Series Supplement.
The Certificates may be issued in one or more Series, each of
which Series may, subject to the provisions of the Code and the intended status
of each Series Trust to constitute a fixed investment trust for federal income
tax purposes, be issued in one or more Classes, with such further particular
designation added or incorporated in such title for the Certificates of any
particular Series or Class within such Series as the Depositor may determine.
Each Certificate and Coupon shall bear upon its face the designation so selected
for the Series and Class to
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which it belongs. All Certificates and all Coupons of the same Series and Class
shall be identical in all respects except for the denominations thereof. All
Certificates of all Classes within any one Series at any time Outstanding shall
be identical except for differences among the Certificates of the different
Classes within such Series specified in the applicable Series Supplement. Except
as otherwise provided in a Series Supplement, all Certificates of a particular
Series (and all Classes within such Series) issued under this Trust Agreement
shall be in all respects equally and ratably entitled to the benefits hereof
without preference, priority or distinction on account of the actual time or
times of authentication and delivery, all in accordance with the terms and
provisions of this Trust Agreement.
(b) Each Series (and all Classes within such Series) of
Certificates shall be created by a Series Supplement authorized by the Depositor
and establishing the terms and provisions of such Series. The several Series
may, subject to the provisions of the Code and the intended status of each Trust
to constitute a fixed investment trust for federal income tax purposes, differ
as between Series and any given Class may vary as between the other Classes
within any given Series.
SECTION 5.02. Execution, Authentication and Delivery.
--------------------------------------
(a) The Certificates and the Coupons, if any, shall be executed by the Depositor
by its President, its Treasurer, or one of its Vice Presidents, under its
corporate seal, which may be in facsimile form and imprinted or otherwise
reproduced thereon and shall be attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers may be manual or
facsimile. Certificates and Coupons bearing the manual or facsimile signature of
individual who were at any time the proper officers of the Depositor shall be
binding, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Certificates
or Coupons or did not hold such offices at the date of such Certificates and
Coupons. Notwithstanding anything in this Agreement to the contrary, the
Trustee, upon written direction by the Depositor, will, with respect to any
Series, execute any related Certificates.
(b) Each Certificate shall be dated as of the later of the
date specified in the related Series Supplement and the date of its
authentication.
(c) No Certificate or Coupon appertaining thereto shall be
entitled to any benefit under this Trust Agreement or be valid or obligatory for
any purpose, unless there appears on such
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Certificate a certificate of authentication substantially in one of the forms
provided for herein or in the form of Certificate attached to the related Series
Supplement executed by the Trustee by the manual signature of one of its
authorized signatories, and such certificate of authentication upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate (and any Coupons appertaining thereto) has been duly authenticated
and delivered hereunder and is entitled to the benefits of this Trust Agreement.
Except as permitted by Section 5.04, 5.05 or 5.06, the Trustee shall not
authenticate and deliver any Bearer Certificate unless all appurtenant Coupons
then matured have been detached and cancelled.
SECTION 5.03. Temporary Certificates. Pending the preparation
----------------------
of Definitive Certificates of any Series (or Class within each such Series), the
Depositor may execute, and upon receipt of a Depositor Order, the Trustee shall
authenticate and deliver temporary Certificates which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the Definitive Certificates in lieu of which they
are issued, in registered form or, if authorized, in bearer form with one or
more Coupons or without Coupons, and with such appropriate insertions,
omissions, substitutions and other variations as may be authorized by such
Depositor Order. Any such temporary Certificate may be in global form,
representing all or a portion of the Outstanding Certificates of such Series or
Class. Every such temporary Certificate shall be executed by the Depositor and
shall be authenticated and delivered by the Trustee upon the same conditions and
in substantially the same manner, and with the same effect, as the Definitive
Certificate or Definitive Certificates in lieu of which is issued.
If temporary Certificates of any Series (or Class within such
Series) are issued, the Depositor will cause Definitive Certificates of such
Series or Class to be prepared without unreasonable delay. Except as otherwise
specified in the applicable Series Supplement with respect to a Series (or Class
within such Series) of Certificates issuable as Bearer Certificates or as one or
more Global Securities representing individual Bearer Certificates of such
Series or Class, (a) after the preparation of Definitive Certificates of such
Series or Class, the temporary Certificates of such Series or Class shall be
exchangeable for Definitive Certificates of such Series or Class upon surrender
of the temporary Certificates of such Series or Class at the office of the
Trustee in a Place of Distribution for such Series or Class, without charge to
the Holder, except as provided in Section 5.04 in connection with a transfer and
except
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that a Person receiving definitive Bearer Certificates shall bear the cost of
insurance, postage, transportation and the like unless otherwise specified in
the applicable Series Supplement, and (b) upon surrender for cancellation of any
one or more temporary Certificates of any Series or Class within such Series
(accompanied by any unmatured Coupons appertaining thereto), the Depositor shall
execute and the Trustees shall authenticate and deliver in exchange therefore
Definitive Certificates with a like Certificate Principal Balance or Notional
Amount, as applicable, of the same Series (or Class within such Series) of
authorized denominations and of like tenor; provided, however, that no
definitive Bearer Certificate shall be delivered in exchange for a temporary
Registered Certificate; and provided, further, that delivery of a Global
Security representing individual Bearer Certificates or a Bearer Certificate
shall occur only outside the United States. Until so exchanged, temporary
Certificates of any Series (or Class within such Series) shall in all respects
be entitled to the same benefits under this Trust Agreement as Definitive
Certificates of such Series or Class, except as otherwise specified in the
applicable Series Supplement with respect to the payment of interest on Global
Securities in temporary form.
Unless otherwise specified in the related Series Supplement,
the Depositor will execute and deliver individual Bearer Certificates in
exchange for beneficial interests in the definitive Global Security and each
Bearer Certificate to the Trustee's principal office in London or to an
authorized agent at such other place outside the United States specified in the
related Series Supplement.
Upon any exchange of a portion of a temporary Global Security
for a definitive Global Security or for the individual Definitive Certificates
represented thereby pursuant to this Section 5.03 or Section 5.04, the temporary
Global Security shall be endorsed by the Trustee to reflect the reduction of the
aggregate Certificate Principal Balance or Notional Amount, as applicable,
evidenced thereby, whereupon the aggregate Certificate Principal Balance or
Notional Amount, as applicable, of such temporary Global Security shall be
reduced for all purposes by the amount so exchanged and endorsed.
SECTION 5.04. Registration; Registration of Transfer and
------------------------------------------
Exchange. (a) The Trustee shall cause to be kept a register for each Series of
- --------
Registered Certificates (the registers maintained in such office and in any
other office or agency of the Trustee in a Place of Distribution being herein
sometimes collectively referred to as the "Certificate Register") in which
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a transfer agent and registrar (which may be the Trustee) (the "Certificate
Registrar") shall provide for the registration of Registered Certificates and
the registration of transfers and exchanges of Registered Certificates. The
Trustee is hereby initially appointed Certificate Registrar for the purpose of
registering Registered Certificates and transfers and exchanges of Registered
Certificates as herein provided; provided, however, that the Trustee may appoint
one or more co-Certificate Registrars. Upon any resignation of any Certificate
Registrar, the Depositor shall promptly appoint a successor or, in the absence
of such appointment, assume the duties of Certificate Registrar.
If a Person other than the Trustee is appointed by the
Depositor as Certificate Registrar, the Depositor will give the Trustee prompt
written notice of the appointment of a Certificate Registrar and of the
location, and any change in the location, of the Certificate Register, and the
Trustee shall have the right to rely upon a certificate executed on behalf of
the Certificate Registrar by an Executive Officer thereof as to the names and
addresses of the Holders of the Registered Certificates and the principal
amounts and numbers of such Registered Certificates.
(b) Upon surrender for registration of transfer any Registered
Certificate of any Series (or Class within such Series) at the office or agency
of the Trustee, if the requirements of Section 8-401(1) of the Uniform
Commercial Code are met to the Depositor's satisfaction, the Depositor shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Registered Certificates of
any authorized denominations, of a like Series, Class and aggregate Certificate
Principal Balance or Notional Amount, as applicable. Except as otherwise
specified in the related Series Supplement, in no event may Registered
Certificates, including Registered Certificates received in exchange for Bearer
Certificates, be exchanged for Bearer Certificates.
(c) Notwithstanding any other provisions of this Section,
unless and until it is exchanged in whole or in part for the individual
Certificates represented thereby, a Global Security representing all or a
portion of the Certificates of a Series (or Class within such Series) may not be
transferred except as a whole by the Depository for such Series or Class to a
nominee of such Depository or by a nominee of such Depository to such Depository
or another nominee of such Depository or by such Depository or any such nominee
to a successor Depository for such Series or Class or a nominee of such
successor Depository.
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(d) At the option of the Holder, Registered Certificates of
any Series (or Class within such Series) (other than a Global Security, except
as set forth below) may be exchanged for other Registered Certificates of the
same Series or Class of any authorized denomination or denominations of like
tenor and aggregate Certificate Principal Balance or Notional Amount, as
applicable, upon surrender of the Registered Certificates to be exchanged at the
office or agency of the Trustee maintained for such purpose.
(e) At the option of the Holder, except as otherwise specified
in the related Series Supplement with respect to a Global Security representing
Bearer Certificates, Bearer Certificates of any Series (or Class within such
Series) may be exchanged for Registered Certificates (if the Certificates of
such Series or Class are issuable as Registered Certificates) or Bearer
Certificates of the same Series or Class, of any authorized denomination or
denominations, of like tenor and aggregate Certificate Principal Balance or
Notional Amount, as applicable, upon surrender of the Bearer Certificates to be
exchanged at the office or agency of the Trustee maintained for such purpose,
with all unmatured Coupons and all matured Coupons in default thereto
appertaining; provided, however, that delivery of a Bearer Certificate shall
occur only outside the United States. If the Holder of a Bearer Certificate is
unable to produce any such unmatured Coupon or Coupons or matured Coupon or
Coupons in default, such exchange may be effected if the Bearer Certificates are
accompanied by payment in funds acceptable to the Depositor and the Trustee in
an amount equal to the face amount of such missing Coupon or Coupons, or the
surrender of such missing Coupon or Coupons may be waived by the Depositor and
the Trustee if there be furnished to each of them such security or indemnity as
they may require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Bearer Certificate shall surrender for payment any
such missing Coupon in respect of which such a payment shall have been made,
such Holder shall be entitled to receive the amount of such payment; provided,
however, that, except as otherwise provided in Section 5.06, interest
represented by Coupons shall be payable only upon presentation and surrender of
those Coupons at an office or agency located outside the United States.
Whenever any Certificates are so surrendered for exchange, the
Depositor shall execute and the Trustee shall authenticate and deliver the
Certificates that the Holder making the exchange is entitled to receive.
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Notwithstanding the foregoing, the exchange of Bearer
Certificates for Registered Certificates will be subject to the provisions of
United States income tax laws and regulations applicable to Certificates in
effect at the time of such exchange.
(f) If at the time the Depository for the Certificates of a
Series (or Class within such Series) notifies the Depositor that it is unwilling
or unable to continue as Depository for the Certificates of such Series or Class
or if at any time the Depository for the Certificates of such Series or Class
shall no longer be eligible under Section 5.08(b), the Depositor shall appoint a
successor Depository with respect to the Certificates of such Series or Class.
If a successor Depository for the Certificates of such Series or Class is not
appointed by the Depositor within 90 days after the Depositor receives such
notice or becomes aware of such ineligibility, the Depositor's election as
specified in the related Series Supplement shall no longer be effective with
respect to the Certificates of such Series or Class and the Depositor will
execute, and the Trustee, upon receipt of a Depositor Order for the
authentication and delivery of individual Certificates of such Series or Class,
will authenticate and deliver individual Certificates of such Series or Class in
an aggregate Certificate Principal Balance or Notional Amount, as applicable,
equal to the aggregate Certificate Principal Balance or Notional Amount, as
applicable, of the Global Security or Securities representing Certificates of
such Series or Class in exchange for such Global Security or Securities.
(g) The Depositor may at any time and in its sole discretion
determine that individual Certificates of any Series (or Class within such
Series) issued in the form of one or more Global Securities shall no longer be
represented by such Global Security or Securities. In such event the Depositor
shall execute, and the Trustee, upon receipt of a Depositor Order for the
authentication and delivery of individual Certificates of such Series or Class,
shall authenticate and deliver, individual Certificates of such Series or Class
in an aggregate Certificate Principal Balance or Notional Amount, as applicable,
equal to the aggregate Certificate Principal Balance or Notional Amount, as
applicable, of the Global Security or Securities representing Certificates of
such Series or Class in exchange for such Global Security or Securities.
(h) If specified by the Depositor pursuant to the related
Series Supplement with respect to a Series (or Class within such Series) of
Certificates, the Depository for such
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<PAGE>
Series may surrender a Global Security for such Series or Class in exchange in
whole or in part for individual Certificates of such Series or Class on such
terms as are acceptable to the Depositor and such Depository. Thereupon, the
Depositor shall execute, and the Trustee, upon receipt of a Depositor Order,
shall authenticate and deliver, without service charge,
(i) to each Person specified by such Depository a new
individual Certificate or Certificates of the same Series or Class, of
any authorized denomination as requested by such Person in an aggregate
Certificate Principal Balance or Notional Amount, as applicable, equal
to and in exchange for such Person's beneficial interest in the Global
Security; and
(ii) to such Depository a new Global Security in a
denomination equal to the difference, if any, between the aggregate
Certificate Principal Balance or Notional Amount, as applicable, of the
surrendered Global Security and the aggregate Certificate Principal
Balance or Notional Amount, as applicable, of individual Certificates
delivered to Holders thereof.
In any exchange provided for in any of the preceding three
paragraphs, the Depositor shall execute, and the Trustee, upon receipt of a
Depositor Order, will authenticate and deliver individual Certificates (a) in
registered form in authorized denominations, if the Certificates of such Series
or Class are issuable as Registered Certificates, (b) in bearer form in
authorized denominations, with or without Coupons attached, if the Certificates
of such Series or Class are issuable as Bearer Certificates or (c) as either
Registered or Bearer Certificates, if the Certificates of such Series or Class
are issuable in either form; provided, however, that individual Bearer
Certificates shall be delivered in exchange for a Global Security only in
accordance with the procedures specified in the related Series Supplement.
Upon the exchange of a Global Security for individual
Certificates, such Global Security shall be cancelled by the Trustee. Individual
Registered Certificates issued in exchange for a Global Security pursuant to
this Section 5.04 shall be registered in such names and in such authorized
denominations as the Depository for such Global Security, pursuant to
instructions from its Participants, any indirect participants or otherwise,
shall instruct the Trustee. The Trustee shall deliver such Registered
Certificates to the Person in whose names such Registered Certificates are so
registered. The Trustee shall
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deliver individual Bearer Certificates issued in exchange for a Global Security
pursuant to this Section 5.04 to the Persons and in such authorized
denominations as the Depository for such Global Security, pursuant to
instructions from its Participants, any indirect participants or otherwise,
shall instruct the Trustee; provided, however, that individual Bearer
Certificates shall be delivered in exchange for a Global Security only in
accordance with the procedures as may be specified in the related Series
Supplement.
Notwithstanding the foregoing, the exchange of Bearer
Certificates for Registered Certificates will be subject to the provisions of
United States income tax laws and regulations applicable to Certificates in
effect at the time of such exchange.
(i) All Certificates issued upon any registration of transfer
or exchange of Certificates shall constitute complete and indefeasible evidence
of ownership in the Trust related to such Certificates and be entitled to the
same benefits under this Trust Agreement as the Certificates surrendered upon
such registration of transfer or exchange.
(j) Every Registered Certificate presented or surrendered for
registration of transfer or exchange shall (if so required by the Depositor, the
Trustee or the Certificate Registrar) be duly endorsed, or be accompanied by a
written instrument of transfer in form satisfactory to the Depositor, the
Trustee or the Certificate Registrar, duly executed, by the Holder thereof or
his attorney duly authorized in writing, with such signature guaranteed by a
brokerage firm or financial institution that is a member of a Securities
Approved Medallion Program such as Securities Transfer Agents Medallion Program
(STAMP), Stock Exchange Medallion Program (SEMP) or New York Stock Exchange Inc.
Medallion Signature Program (MSP).
(k) No service charge shall be made to a Holder for any
registration of transfer or exchange of Certificates, but the Depositor may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Certificates, other than exchanges pursuant to Section 5.03 not
involving any transfer.
SECTION 5.05. Mutilated, Destroyed, Lost and Stolen
-------------------------------------
Certificates. If (i) any mutilated Certificate or any mutilated Coupon with the
- ------------
Coupon Certificate to which it appertains (and all unmatured Coupons attached
thereto) is surrendered to the
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Trustee at its Corporate Trust Office (in the case of Registered Certificates)
or at its principal London office (in the case of Bearer Certificates) or (ii)
the Depositor and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Certificate or any Coupon, and there is
delivered to the Depositor and the Trustee such security or indemnity as they
may require to hold each of them and any Paying Agent harmless, and neither the
Depositor nor the Trustee receives notice that such Certificate or Coupon has
been acquired by a bona fide purchaser, then the Depositor shall execute and the
Trustee, upon receipt of a Depositor Order, shall authenticate and deliver, in
exchange for any such mutilated Certificate, or in lieu of any such destroyed,
lost or stolen Certificate or in exchange for the Coupon Certificate to which
such mutilated, destroyed lost or stolen Coupon appertained, a new Certificate
of the same Series or Class of like tenor, form, terms and principal amount,
bearing a number not contemporaneously Outstanding, and, in the case of a Coupon
Certificate, with such Coupons attached thereto so that neither gain nor loss in
interest shall result from such exchange or substitution.
Upon the issuance of any new Certificate under this Section,
the Depositor may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in respect thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Certificate of any Series or Class, with its
Coupons, if any, issued pursuant to this Section shall constitute complete and
indefeasible evidence of ownership in the Trust related to such Series, whether
or not the destroyed, lost or stolen Certificate or Coupon shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this Trust
Agreement equally and proportionately with any and all other Certificates of
that Series or Class and their Coupons, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Certificates
or Coupons.
SECTION 5.06. Persons Deemed Owners. (a) The Depositor, the
---------------------
Trustee and any agent of the Depositor or the Trustee may treat the Person in
whose name any Registered Certificate is registered as the owner of such
Registered Certificate for the purpose of receiving distributions of principal
of (and premium, if any) and (subject to Section 4.02)
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interest, if any, on such Registered Certificate and for all other purposes
whatsoever, whether or not such Registered Certificate be overdue, and neither
the Depositor or the Trustee, nor any agent of the Depositor or the Trustee
shall be affected by notice to the contrary.
(b) The Depositor, the Trustee and any agent of the Depositor
or the Trustee may treat the Holder of any Bearer Certificate or of any Coupon
as the absolute owner of such Bearer Certificate or Coupon for the purposes of
receiving distributions thereof or on account thereof and for all other purposes
whatsoever, whether or not such Bearer Certificate or Coupon be overdue, and
neither the Depositor, the Trustee, nor any agent of the Depositor or the
Trustee shall be affected by notice to the contrary. All distributions made to
any Holder, or upon his order, shall be valid, and, to the extent of the sum or
sums paid, effectual to satisfy and discharge the liability for moneys
distributable upon such Certificate or Coupon.
(c) None of the Depositor, the Trustee or any of their agents
will have any responsibility or liability for any aspect of the records relating
to or distributions made on account of beneficial ownership interests in a
Global Security or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
SECTION 5.07. Cancellation. Unless otherwise specified in the
------------
related Series Supplement for Certificates of any Series, all Certificates
surrendered for payment, redemption, transfer or exchange and all Coupons
surrendered for payment or exchange shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and shall be promptly cancelled by
it. No Certificates or Coupons shall be authenticated in lieu of or in exchange
for any Certificates or Coupons cancelled as provided in this Section, except as
expressly permitted by this Trust Agreement.
SECTION 5.08. Global Securities. (a) If the Series Supplement
-----------------
pursuant to Section 5.01 provides that a Series (or Class within such Series) of
Certificates shall be represented by one or more Global Securities, then the
Depositor shall execute and the Trustee shall authenticate and deliver one or
more Global Securities, that (i) shall represent an aggregate initial
Certificate Principal Balance or Notional Amount, as applicable, equal to the
aggregate initial Certificate Principal Balance or Notional Amount, as
applicable, of the Certificates of such Series or Class to be represented by
such one or more Global Securities, (ii) shall be registered, if in registered
form, in
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the name of the Depository for such Global Security or Securities or the nominee
of such Depository, (iii) shall be delivered by the Trustee to such Depository
or pursuant to such Depository's instruction and (iv) shall bear a legend
substantially to the following effect: "Unless and until it is exchanged in
whole or in part for the individual Certificates represented hereby, this Global
Security may not be transferred except as a whole by the Depository to a nominee
of the Depository or by a nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository.
No Holder of a Certificate of such Series or Class will
receive a Definitive Certificate representing such Holder's interest in such
Certificate or Certificates, except as provided in Section 5.10. Unless and
until definitive, fully registered Certificates (the "Definitive Certificates")
have been issued to Holders of such Series or Class pursuant to Section 5.11:
(i) the provisions of this Section 5.09 shall
be in full force and effect;
(ii) the Certificate Registrar and the Trustee
shall be entitled to deal with the Depository for all purposes
of this Trust Agreement (including the distribution of
principal of, and premium, if any, and interest on the
Certificates and the giving of instructions or directions
hereunder) as the sole Holder of the Certificates of such
Series or Class, and shall have no obligation to the owners of
beneficial interests in such Series or Class (collectively,
the "Certificate Owners");
(iii) to the extent that the provisions of this
Section 5.08 conflict with any other provisions of this Trust
Agreement, the provisions of this Section 5.08 shall control;
(iv) the rights of Certificate Owners of such
Series or Class shall be exercised only through the Depository
and shall be limited to those established by law and
agreements between such Certificate Owners and the Depository
or its Participants;
(v) whenever this Trust Agreement requires or
permits actions to be taken based upon instructions or
directions of Holders of Certificates of such Series or Class
evidencing a specified percentage of the aggregate Voting
Rights of such Series or Class, the
54
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Depository shall be deemed to represent such percentage only
to the extent that it has received instructions to such effect
from Certificate Owners of such Series or Class or
Participants in such Depository's system owning or
representing, respectively, such required percentage of the
beneficial interest in the Certificates of such Series or
Class and has delivered such instructions to the Trustee.
(b) Each Depository designated in the related Series
Supplement for a Global Security in registered form must, at the time of its
designation and at all times while it serves as such Depository, be a clearing
agency registered under the Exchange Act and any other applicable statute or
regulation.
SECTION 5.09. Notices to Depository. Whenever a notice or
---------------------
other communication to the Holders of a Series or Class within such Series
represented by one or more Global Securities is required under this Trust
Agreement, unless and until Definitive Certificates for such Series or Class
shall have been issued to such Certificate Owners pursuant to Section 5.10, the
Trustee shall give all such notices and communications specified herein to be
given to Holders of the Certificates of such Series to the Depository, and shall
have no obligation to the Certificate Owners.
SECTION 5.10. Definitive Certificates. If in respect of a
-----------------------
Series (or Class within such Series) represented by one or more Global
Securities (i) the Depositor advises the Trustee in writing that the Depository
is no longer willing or able to properly discharge its responsibilities with
respect to the Certificates of such Series or Class and the Depositor is unable
to locate a qualified successor, (ii) the Depositor at its option advises the
Trustee in writing that it elects to terminate the book-entry system of such
Series or Class through the Depository or (iii) Certificate Owners representing
beneficial interests aggregating at least a majority (or such other Required
Percentage--Definitive Certificates that may be specified in a Series
Supplement) of the Voting Rights of the Certificates of such Series or Class
advise the Depository in writing that the continuation of a book-entry system
for such Series or Class through the Depository is no longer in the best
interests of the Certificates Owners of such Series or Class, then the
Depository shall notify all Certificate Owners or Participants in the
Depository's system with respect to such Series or Class and the Trustee of the
occurrence of any such event and of the availability of Definitive Certificates
for such Series or Class
55
<PAGE>
to Certificate Owners of such Series or Class requesting the same.
Upon surrender to the Trustee of the Global Securities of such
Series or Class by the Depository, accompanied by registration instructions, the
Depositor shall execute and the Trustee shall authenticate the Definitive
Certificates of such Series or Class in accordance with the instructions of the
Depository. None of the Depositor, the Certificate Registrar or the Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Certificates of Series or Class, the Trustee
shall recognize the holders of the Definitive Certificates of such Series or
Class as Holders.
SECTION 5.11. Currency of Distributions in Respect of
---------------------------------------
Certificates. (a) Except as otherwise specified in the related Series Supplement
- ------------
for Bearer Certificates of any Series (or Class within such Series),
distributions of the principal of (and premium, if any) and interest on Bearer
Certificates of such Series or Class denominated in any Currency will be made in
such Currency.
(b) Except as otherwise specified in the related Series
Supplement for Registered Certificates of any Series (or Class within such
Series), distributions of the principal of (and premium, if any) and interest on
Registered Certificates of such Series or Class will be made in Dollars.
(c) For purposes of any provision of the Trust Agreement where
the Holders of Outstanding Certificates may perform an act that requires that a
specified percentage of the aggregate Voting Rights of the Certificates of all
Series perform such act and for purposes of any decision or determination by the
Trustee of amounts due and not distributed for the principal of (and premium, if
any) and interest on the Certificates of all Series in respect of which moneys
are to be disbursed ratably, the principal of (and premium, if any) or notional
amount of, as applicable, and interest on the Outstanding Certificates
denominated in a Foreign Currency will be the amount in Dollars based upon
exchange rates, determined as specified in the related Series Supplement for
Certificates of such Series, as of the date for determining whether the Holders
entitled to perform such act have performed it or as of the date of such
decision or determination by the Trustee, as the case may be.
56
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(d) With respect to Certificates of any Series, any decision
or determination to be made regarding exchange rates shall be made by an
Exchange Rate Agent appointed by the Depositor; provided, however, that such
Exchange Rate Agent shall accept such appointment in writing and the terms of
such appointment shall be acceptable to the Trustee and shall, in the opinion of
the Depositor at the time of such appointment, require such Exchange Rate Agent
to make such determination by a method provided in the applicable Series
Supplement for the making of such decision or determination. All decisions and
determinations of such Exchange Rate Agent regarding exchange rates shall be in
its sole discretion and shall, in the absence of manifest error, be conclusive
for all purposes and irrevocably binding upon the Depositor, the Trustee and all
Holders of the Certificates of such Series.
(e) If distributions in respect of a Certificate are required
to be made in a Specified Currency other than Dollars and such currency is
unavailable due to the imposition of exchange controls or other circumstances
beyond the control of the Trustee and the Depositor or is no longer used by the
government of the country issuing such Specified Currency or is no longer
commonly used for the settlement of transactions by public institutions of or
within the international banking community, then all distributions in respect of
such Certificate shall be made in Dollars until such Specified Currency is again
so used in the manner specified in the related Series Supplement.
SECTION 5.12. Conditions of Authentication and Delivery of New
------------------------------------------------
Series. Certificates of a new Series may be issued at any time and from time to
- ------
time after the execution and delivery of these Standard Terms and the related
Series Supplement. The Depositor shall execute and deliver Certificates of such
Series to the Trustee, with appropriate Coupons, if any, appertaining thereto,
and the Trustee shall authenticate and deliver such Certificates upon a
Depositor Order and upon delivery by the Depositor to the Trustee of the
following:
(1) The delivery of the Underlying Securities in
accordance with Section 2.01(b);
(2) Opinions of Counsel to the Depositor, addressed to
the Trustee, in a form acceptable to the Trustee;
(3) An Officer's Certificate of the Depositor, dated as
of the Closing Date, to the effect that all of the
requirements of this Section 5.12 have been
satisfied, and that the Depositor is not in breach
57
<PAGE>
of this Trust Agreement and that the issuance of the
Certificates will not result in any breach of any of
the terms, conditions, or provisions of, or
constitute a default under, the Depositor's
Certificate of Incorporation or bylaws, or any
indenture, mortgage, deed of transfer or other
agreement or instrument to which the Depositor is a
party or by which it or its property is bound or any
order of any court or administrative agency entered
in any Proceeding to which the Depositor is a party
or by which it or its property may be bound or to
which it or its property may be subject;
(4) A Series Supplement consistent with the applicable
provisions of these Standard Terms;
(5) If applicable, a fully executed copy of the Swap
Agreement, together with all documents and opinions
required to be delivered to the Trust upon execution
thereof pursuant to the terms thereof;
(6) Written instructions by the Depositor to the Trustee
directing the Trustee to enter into and perform any
obligations under the Swap Agreement, if applicable,
and/or the Market Agent Agreement, if applicable.
If all the Certificates of a Series are not to be originally
issued at the same time, then the documents required to be delivered pursuant to
this Section 5.12 must be delivered only once, prior to the authentication and
delivery of the first Certificate of such Series; provided, however, that any
subsequent Depositor Order to the Trustee to authenticate Certificate of such
Series upon original issuance shall constitute a representation and warranty by
the Depositor that, as of the date of such request, the statements made in this
Section 5.12 shall be true and correct as if made on such date.
SECTION 5.13. Appointment of Paying Agent. The Trustee may
---------------------------
appoint one or more paying agents (each, a "Paying Agent") with respect to the
Certificates of any Series. Any such Paying Agent shall be authorized to make
distributions to Certificateholders of such Series from the Certificate Account
for such Series pursuant to the provisions of the applicable Series Supplement
and shall report the amounts of such distributions to the Trustee. Any Paying
Agent shall have the revocable
58
<PAGE>
power to withdraw funds from such Certificate Account for the purpose of making
the distributions referred to above. The Trustee may revoke such power and
remove the Paying Agent if the Trustee determines in its sole discretion that
the Paying Agent shall have failed to perform its obligations under this Trust
Agreement in any material respect. The Paying Agent shall initially be the
Trustee and any co-paying agent chosen by the Trustee and acceptable to the
Depositor, including, if and so long as any Series or Class within such Series
is listed on the Luxembourg Stock Exchange and such exchange so requires, a
co-paying agent in Luxembourg or another European city. Any Paying Agent shall
be permitted to resign as Paying Agent upon 30 days' notice to the Trustee. In
the event that the Trustee shall no longer be the Paying Agent, the Trustee
shall appoint a successor or additional Paying Agent. The Trustee shall cause
each successor to act as Paying Agent to execute and deliver to Trustee an
instrument in which such successor or additional Paying Agent shall agree with
the Trustee that it will hold all sums, if any, held by it for distribution to
the Certificate- holders in trust for the benefit of the Certificateholders
entitled thereto until such sums shall be distributed to such Certificateholders
and will agree to such other matters as are required by Section 317(b) of the
Trust Indenture Act. The Paying Agent shall return all unclaimed funds to the
Trustee and upon removal shall also return all funds in its possession to the
Trustee. The provisions of Sections 7.01, 7.03, 7.04 and 7.06 shall apply to the
Trustee also in its role as Paying Agent, for so long as the Trustee shall act
as Paying Agent. Any reference in this Trust Agreement to the Paying Agent shall
include any co-paying agent unless the context requires otherwise.
Notwithstanding anything contained herein to the contrary, the appointment of a
Paying Agent pursuant to this Section 5.13 shall not release the Trustee from
the duties, obligations, responsibilities or liabilities arising under this
Trust Agreement other than with respect to funds paid to such Paying Agent.
SECTION 5.14. Authenticating Agent. (a) The Trustee may
--------------------
appoint one or more authenticating agents (each, an "Authenticating Agent") with
respect to the Certificates of any Series which shall be authorized to act on
behalf of the Trustee in authenticating such Certificates in connection with the
issuance, delivery and registration of transfer or exchange of such
Certificates. Whenever reference is made in this Trust Agreement to the
authentication of Certificates by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication on
behalf of the Trustee by an Authenticating Agent and a certificate of
authentication
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<PAGE>
executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent must be acceptable to the Depositor. Notwithstanding
anything contained herein to the contrary, the appointment of an Authenticating
Agent pursuant to this Section 5.14 shall not release the Trustee from the
duties, obligations, responsibilities or liabilities arising under this Trust
Agreement.
(b) Any institution succeeding to the corporate agency
business of any Authenticating Agent shall continue to be an Authenticating
Agent without the execution or filing of any power or any further act on the
part of the Trustee or such Authenticating Agent. An Authenticating Agent may at
any time resign by giving notice of resignation to the Trustee and to the
Depositor. The Trustee may at any time terminate the agency of an Authenticating
Agent by giving notice of termination to such Authenticating Agent and to the
Depositor. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time an Authenticating Agent shall cease to be
acceptable to the Trustee or the Depositor, the Trustee promptly may appoint a
successor Authenticating Agent. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the rights,
powers and duties of its predecessor hereunder, with like effect as if
originally named as an Authenticating Agent. No successor Authenticating Agent
shall be appointed unless acceptable to the Depositor. The Trustee agrees to pay
to each Authenticating Agent from time to time reasonable compensation for its
services under this Section. The provisions of Section 7.01, 7.03 and 7.04 shall
be applicable to any Authenticating Agent.
(c) Pursuant to an appointment made under this Section, the
Certificates may have endorsed thereon, in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication in substantially the
following form:
"This is one of the Certificates described in the
Standard Terms and the related Series Supplement.
Dated: ---------------------------
---------------------------
as Authenticating Agent
for the Trustee,
By --------------------- "
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<PAGE>
SECTION 5.15. Voting Rights with Respect to Underlying
----------------------------------------
Securities. (a) Within five Business Days after receipt of notice of any meeting
- ----------
of, or other occasion for the exercise of voting rights or the giving of
consents ("voting rights") by, owners of any of the Underlying Securities, the
Trustee shall give notice to the Certificateholders, setting forth (i) such
information as is contained in such notice to owners of Underlying Securities,
(ii) a statement that the Certificateholders will be entitled, subject to any
applicable provision of law and any applicable provisions of such Underlying
Securities (and to the extent of the voting rights allocated to the
Certificateholders pursuant to subsection 5.15(b)), to instruct the Trustee as
to the exercise of voting rights, if any, pertaining to such Underlying
Securities and (iii) a statement as to the manner in which instructions may be
given to the Trustee to give a discretionary proxy to a person designated in the
notice received by the Trustee. Such notice shall be given by the Trustee to the
Certificateholders of record on such Record Date.
Upon the written request of the applicable Certificateholder,
received on or before the date established by the Trustee for such purpose, the
Trustee shall endeavor, insofar as practicable and permitted under any
applicable provision of law and any applicable provision of or governing the
Underlying Securities, to vote in accordance with any nondiscretionary
instruction set forth in such written request (in each case to the extent of the
voting rights allocated pursuant to subsection 5.15(b) to such
Certificateholder). The Trustee shall not vote except as specifically authorized
and directed in written instructions from the applicable Certificateholder
entitled to give such instructions.
(b) Unless otherwise specified in the applicable Series
Supplement, the voting rights allocable to the owners of the Underlying
Securities pursuant to the terms thereof shall be allocated among the
Certificateholders pro rata, in the proportion that the denomination of each
Certificate bears to the aggregate denomination of all Certificates.
(c) By accepting delivery of a Certificate, whether upon
original issuance or subsequent transfer, exchange or replacement thereof, and
without regard to whether ownership is beneficial or otherwise, the
Certificateholder agrees so long as it is an owner of such Certificate that it
shall not grant any consent (i) to any conversion of the timing of payment of,
or the method or rate of accruing of, interest on the Underlying Securities
underlying the Certificates held by such
61
<PAGE>
Certificateholder or (ii) to any redemption or prepayment of the Underlying
Securities underlying the Certificates held by such Certificateholder. The
Trustee shall not grant any consent solicited from the owners of the Underlying
Securities underlying the Certificates with respect to the matters set forth in
this Section nor shall it accept or take any action in respect of any consent,
proxy or instructions received from any Certificateholder in contravention of
the provisions of this Section.
SECTION 5.16. Actions by Certificateholders.
-----------------------------
(a) Wherever in this Trust Agreement a provision is made that
an action may be taken or a notice, demand or instruction given by
Certificateholders or Beneficial Owners, such action, notice or instruction may
be taken or given by any Certificateholder or Beneficial Owner.
(b) Each Certificateholder or Beneficial Owner shall have the
right to assert any rights and privileges of a Certificateholder or Beneficial
Owner, and shall have the right to proceed directly and individually against any
Person to enforce any remedies hereunder and shall not be required to act in
concert with any other Certificateholder or Beneficial Owner or any other
Person.
(c) Any request, demand, authorization, direction, notice,
consent, waiver or other act by a Certificateholder or Beneficial Owner of a
Certificate shall bind such Certificateholder or Beneficial Owner and every
subsequent Certificateholder or Beneficial Owner of such Certificate or any
Certificate issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, suffered or omitted to
be done by the Certificateholder or Beneficial Owner or the Trustee in reliance
thereon, whether or not notation of such action is made upon such Certificate.
(d) Certificateholders of Certificates are beneficial owners
of the right to receive principal payments and interest payments to which such
Certificates relate and, as such, will have the right following an event of
default with respect to any Underlying Security to proceed directly against the
Issuer(s). Such Certificateholders are not required to join other
Certificateholders of Certificates, the Depositor or the Trustee in order to
proceed against the Issuer(s).
SECTION 5.17. Events of Default. If any Event of
-----------------
Default shall occur and be continuing with respect to any Class
62
<PAGE>
of Certificates, then, and in each and every case, the Trustee shall exercise
any rights in respect of the related Underlying Securities as provided in the
applicable Series Supplement.
SECTION 5.18. Judicial Proceedings Instituted by Trustee;
------------------------------------------
Trustee May Bring Suit. If there shall be a failure to make payment of the
- ----------------------
principal of or premium, if any, or interest on any Underlying Security, then
the Trustee, in its own name, and as trustee of an express trust, as holder of
such Underlying Security, shall be, to the extent permitted by and in accordance
with the terms of the Underlying Security, subject to the limitations on
acceleration and the exercise of remedies set forth therein, entitled and
empowered to institute any suits, actions or proceedings at law, in equity or
otherwise, including the power to make a demand on the trustee in respect of
such Underlying Security, if provided for, to take action to enforce the
Underlying Security for the collection of the sums so due and unpaid on such
Underlying Security and may prosecute any such claim or proceeding to judgment
or final decree with respect to the whole amount of any such sums so due and
unpaid.
SECTION 5.19. Control by Certificateholders. The Holders of
----------------------------
Certificates of any Class holding Certificates representing not less than the
Required Percentage--Direction of Trustee of the aggregate Voting Rights of the
Outstanding Certificates of such Class shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee under this
Trust Agreement, including any right of the Trustee as holder of the Underlying
Securities; provided, however, that:
(1) such direction shall not be in conflict with any rule of
law or with this Trust Agreement and would not involve the Trustee in
personal liability or expense;
(2) the Trustee shall not determine that the action so
directed would be unjustly prejudicial to the Holders of Certificates
of such Class not taking part in such direction;
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 5.20. Waiver of Past Defaults. The Holders of
-----------------------
the Required Percentage--Waiver of Certificates of any Series may direct the
Trustee to vote such percentage of the Underlying
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<PAGE>
Securities held by the Trustee as corresponds to the percentage of the aggregate
principal amount of the Certificates of such Series held by such Holders to
waive any past Event of Default thereunder with respect to such Series of
Certificates and its consequences or may instruct the Trustee, on behalf of all
Certificateholders of such Series, to waive any past default under this Trust
Agreement and its consequences, except a default:
(1) in the payment of the principal of or premium, if
any, or interest on the Underlying Securities or the
Certificates;
(2) in respect of a covenant or provision hereof which under
Article X hereof cannot be modified or amended without the consent of
the Holder of each Outstanding Certificate affected; or
(3) specified in the applicable Series Supplement, if any,
unless the applicable Series Supplement provides otherwise.
Upon any such direction, the Trustee shall vote such
percentage of the Underlying Securities of the corresponding Series held by the
Trustee as corresponds to the percentage of the aggregate principal amount of
the Outstanding Certificates of such Series held by Holders who directed the
Trustee to waive such default or Event of Default thereunder. Upon any waiver
that is effective under the terms of such Class of Underlying Securities to
waive such default or Event of Default, such default or Event of Default shall
cease to exist with respect to this Trust Agreement, and, in the case of a
default, any Event of Default arising therefrom shall be deemed to have been
cured for every purpose of this Trust Agreement and any direction given by the
Trustee on behalf of such Certificateholders or in respect of any Underlying
Securities shall be annulled with respect thereto; but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon.
SECTION 5.21. Right of Certificateholders to Receive Payments
-----------------------------------------------
Not to Be Impaired. Anything in this Trust Agreement to the contrary
- ------------------
notwithstanding, the right of any Certificateholder to receive distributions of
payments required pursuant to Section 4.01 hereof on the Certificates when due,
or to institute suit for enforcement of any such payment on or after the
applicable Distribution Date, Special Distribution Date or other date specified
herein for the making of such payment, shall not be
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<PAGE>
impaired or affected without the consent of such Certificateholder.
SECTION 5.22. Remedies Cumulative. Every remedy given
-------------------
hereunder to the Trustee or to any of the Certificateholders shall not be
exclusive of any other remedy or remedies, and every such remedy shall be
cumulative and in addition to every other remedy given hereunder or now or
hereafter given by statute, law, equity or otherwise.
ARTICLE VI
The Depositor
-------------
SECTION 6.01. Liability of the Depositor. (a) The Depositor
--------------------------
shall be liable in accordance herewith only to the extent of the obligations
specifically imposed by these Standard Terms and the related Series Supplement.
SECTION 6.02. Limitation on Liability of the Depositor. (a)
----------------------------------------
The Depositor shall not be under any obligation to expend or risk its own funds
or otherwise incur financial liability in the performance of its duties
hereunder or under a Series Supplement or in the exercise of any of its rights
or power if reasonable grounds exist for believing that the repayment or such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
(b) Neither the Depositor nor any of its directors, officers,
employees or agents shall be under any liability to any Trust or the
Certificateholders of any Series for any action taken, or for refraining from
the taking of any action, in good faith pursuant to this Trust Agreement, or for
errors in judgment; provided, however, that this provision shall not protect the
Depositor against any breach of representations, warranties or covenants made
herein, or against any liability which would otherwise be imposed by reason of
willful misfeas- ance, bad faith or gross negligence in the performance of
duties or by reason of reckless disregard of its obligations and duties
hereunder.
Unless otherwise provided in a related Series Supplement, the
Trust will indemnify and hold harmless the Depositor and any director, officer,
employee or agent of the Depositor against any loss, liability or expense
incurred in connection with any legal action relating to the Trust Agreement or
the Certificates, other than any loss, liability or expense incurred
65
<PAGE>
by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties by the Depositor and any of its directors, officers,
employees or agents hereunder or by reason of reckless disregard of their
obligations and duties hereunder.
(c) The Depositor shall not be under any obligation to appear
in, prosecute or defend any legal action unless such action is related to its
respective duties under this Trust Agreement and, in its opinion, does not
involve it in any expense or liability; provided, however, that the Depositor
may in its discretion undertake any such action which it may deem necessary or
desirable with respect to this Trust Agreement and the rights and duties of the
parties hereto and the interests of the Certificateholders hereunder. The
Depositor shall be under no obligation whatsoever to appear in, prosecute or
defend any action, suit or other proceeding in respect of any Underlying
Securities.
(d) The Depositor shall not be liable to any Certificateholder
for any action or non-action by it in reliance upon the advice of or information
from legal counsel, accountants, any Certificateholder of a Certificate or any
other person believed by it in good faith to be competent to give such advice or
information, including, without limitation, the Calculation Agent, the Market
Agent or the other party to this Trust Agreement. The Depositor may rely and
shall be protected in acting upon any written notice, request, direction or
other document believed by it to be genuine and to have been signed or presented
by the proper party or parties.
(e) The Depositor shall not incur any liability to any
Certificateholder if, by reason of any provision of any present or future law,
or regulation thereunder, or any governmental authority, or by any reason of any
act of God or war or other circumstance beyond the control of the relevant
party, the Depositor shall be prevented or forbidden from doing or performing
any act or thing which the terms of this Trust Agreement provide shall be done
or performed; and the Depositor shall not incur any liability to any
Certificateholder by reason of any non-performance or delay, caused as
aforesaid, in the performance of any act or thing which the terms of this Trust
Agreement provide shall or may be done or performed, or by reason of any
exercise of, or failure to exercise, any discretion provided for in this Trust
Agreement.
SECTION 6.03. Depositor May Purchase Certificates.
-----------------------------------
The Depositor may at any time purchase Certificates in the open market or
otherwise. Certificates so purchased by the Depositor
66
<PAGE>
may, at the discretion of the Depositor, be held or resold. Certificates
beneficially owned by the Depositor will be disregarded for purposes of
determining whether the required percentage of the aggregate Voting Rights has
given any request, demand, authorization, direction, notice, consent or waiver
hereunder.
SECTION 6.04. Merger or Consolidation of the Depositor.
----------------------------------------
Nothing in this Trust Agreement shall prevent any consolidation or merger of the
Depositor with or into any other corporation, or any consolidation or merger of
any other corporation with or into the Depositor or any sale or transfer of all
or substantially all of the property and assets of the Depositor to any other
Person lawfully entitled to acquire the same; provided, however, that, so long
as Certificates are outstanding hereunder, the Depositor covenants and agrees
that any such consolidation, merger, sale or transfers shall be upon the
condition that the due and punctual performance and observance of all the terms,
covenants and conditions of this Trust Agreement to be kept or performed by the
Depositor shall be assumed by the Person (if other than the Depositor) formed by
or resulting from any such consolidation or merger, or which shall have received
the transfer of all or substantially all of the property and assets of the
Depositor, just as fully and effectually as if successor Person had been the
original party of the first part hereto; and in the event of any such sale or
transfer the predecessor Depositor may be dissolved, wound up and liquidated at
any time thereafter.
SECTION 6.05. No Liability of the Depositor with Respect to
---------------------------------------------
the Underlying Securities; Certificateholders to Proceed Directly Against the
- -----------------------------------------------------------------------------
Issuer(s). (a) The sole obligor with respect to any Underlying Security is the
- ---------
Issuer thereof. The Depositor shall not have any obligation on or with respect
to the Underlying Securities; and its obligations with respect to Certificates
shall be solely as set forth in this Trust Agreement.
(b) The Depositor is not authorized to proceed against the
Issuer of any Underlying Security in the event of a default or to assert the
rights and privileges of Certificateholders of Certificates and has no duty in
respect thereof.
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ARTICLE VII
Concerning the Trustee
----------------------
SECTION 7.01. Duties of Trustee. (a) The Trustee undertakes to
-----------------
perform such duties and only such duties as are specifically set forth in these
Standard Terms and the related Series Supplement. The Trustee shall exercise
such of the rights and powers vested in it by this Trust Agreement, and shall
use the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of such person's own
affairs. The Trustee shall exercise those rights in a manner consistent with the
status of any Trust created hereunder as a fixed investment trust for federal
income tax purposes. The Trustee shall not have any power to vary the investment
of any Certificateholders of any Series or to accept any assets (other than
proceeds of the Underlying Securities) other than the Underlying Securities
transferred to it on the Closing Date of any Series. Any permissive right of the
Trustee enumerated in this Trust Agreement shall not be construed as a duty and
shall be interpreted consistently with the status of the Trust as a fixed
investment trust.
(b) The Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Trustee which are specifically required to be
furnished pursuant to any provision of this Trust Agreement, shall examine them
to determine whether they conform to the requirements of this Trust Agreement.
If any such instrument is found not to conform to the requirements of this Trust
Agreement, the Trustee shall take action as it deems appropriate to have the
instrument corrected, and if the instrument is not corrected to the Trustee's
satisfaction, the Trustee will provide notice thereof to the Depositor and
Certificateholders.
(c) No provision of this Trust Agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own misconduct; provided, however, that:
(i) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Trust Agreement,
the Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this Trust
Agreement, no implied covenants or obligations shall be read into this
Trust Agreement against the Trustee and, in the absence of bad
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faith on the part of the Trustee, the Trustee may conclusively rely, as
to the truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to the
Trustee that conform to the requirements of this Trust Agreement;
(ii) the Trustee shall not be personally liable for an
error of judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be personally liable with
respect to any action taken, suffered or omitted to be taken by it in
good faith in accordance with the direction of Holders of the Required
Percentage--Direction of Trustee of the aggregate Voting Rights of a
given Series (or Class or group of Classes within such Series), as
specified in the applicable Series Supplement relating to the time,
method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Trust Agreement;
(iv) the Trustee shall not be required to expend or risk
its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights
or powers if there is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it;
(v) except for actions expressly authorized by this
Trust Agreement, the Trustee shall take no actions reasonably likely to
impair the interests of the Trust in any Underlying Security now
existing or hereafter acquired or to impair the value of any Underlying
Security now existing or hereafter acquired;
(vi) except as expressly provided in this Trust
Agreement, the Trustee shall have no power to vary the corpus of the
Trust including by (A) accepting any substitute obligation or asset for
a Underlying Security initially assigned to the Trustee under Section
2.01, (B) adding any other investment, obligation or security to the
Trust or (C) withdrawing from the Trust any Underlying Securities;
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(vii) in the event that the Paying Agent or the
Certificate Registrar shall fail to perform any obligation, duty or
agreement in the manner or on the day required to be performed by the
Paying Agent or Certificate Registrar, as the case may be, under this
Trust Agreement, the Trustee shall be obligated promptly upon its
knowledge thereof to perform such obligation, duty or agreement in the
manner so required;
(viii) the Trustee shall not be liable to any Certificate-
holder for any action or non-action by it in reliance upon the advice
of or information from legal counsel, accountants, any
Certificateholder of a Certificate or any other person believed by it
in good faith to be competent to give such advice or information,
including, without limitation, the Calculation Agent, the Market Agent
or the other party to this Trust Agreement. The Trustee may rely and
shall be protected in acting upon any written notice, request,
direction or other document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(ix) the Trustee shall not incur any liability to any
Certificateholder if, by reason of any provision of any present or
future law, or regulation thereunder, or any governmental authority, or
by any reason of any act of God or war or other circumstance beyond the
control of the relevant party, the Trustee shall be prevented or
forbidden from doing or performing any act or thing which the terms of
this Trust Agreement provide shall be done or performed; and the
Trustee shall not incur any liability to any Certificateholder by
reason of any non-performance or delay, caused as aforesaid, in the
performance of any act or thing which the terms of this Trust Agreement
provide shall or may be done or performed, or by reason of any exercise
of, or failure to exercise, any discretion provided for in this Trust
Agreement;
(x) the Trustee shall be under no obligation whatsoever
to appear in, prosecute or defend any action, suit or other proceeding
in respect of any Underlying Securities;
(xi) whenever in the administration of this Trust
Agreement the Trustee shall deem it desirable that a matter be proved
or established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein specifically
prescribed) may, in the
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absence of bad faith on its part, conclusively rely upon an
Officers' Certificate; and
(xii) the Trustee may consult with counsel of its
selection and the advice of such counsel or any Opinion of Counsel
shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in reliance
thereon, unless the Trustee's taking, suffering or omitting such
action shall have been willful misconduct, in bad faith or negligent.
(d) As promptly as practicable after, and in any event within
10 days after, the occurrence of any default (as such term is defined below)
hereunder with respect to any Class of Certificates, the Trustee shall transmit
by mail to the Depositor and the Holders of Certificates of such Class in
accordance with Section 313(c) of the Trust Indenture Act, notice of such
default hereunder known to the Trustee, unless such default shall have been
cured or waived; provided, however, that, except in the case of a default in the
payment of the principal of or premium, if any, or interest on any Underlying
Security, the Trustee shall be protected in withholding such notice if and so
long as a trust committee of Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interests of the Holders
of the Certificates of such Class. For the purpose of this Section, the term
"default" means, with respect to any Class of Certificates, any event that is,
or after notice or lapse of time or both would become, an Event of Default with
respect to such Class of Certificates.
(e) Within five (5) Business Days after the receipt by the
Trustee of a written application by any three or more Certificateholders stating
that the applicants desire to communicate with other Certificateholders with
respect to their rights under this Trust Agreement or under the Certificates,
and accompanied by a copy of the form of proxy or other communication which such
applicants propose to transmit, and by reasonable proof that each such applicant
has owned its Certificates for a period of at least six (6) months preceding the
date of such application, the Trustee shall, at its election, either:
(i) afford to such applicants access to all
information so furnished to or received by the Trustee; or
(ii) inform such applicants as to the approximate
number of Certificateholders according to the most recent information so
furnished to or received by the Trustee, and as to the approximate cost of
mailing to such Certificateholders the
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form of proxy or other communication, if any, specified in such application.
If the Trustee shall elect not to afford to such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to all such Certificateholders copies of the form of proxy or other
communication which is specified in such request, with reasonable promptness
after a tender to the Trustee of the material to be mailed and of payment, or
provision for the payment, of the reasonable expenses of such mailing.
(f) The Trustee shall file periodic reports pursuant to the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder, in accordance with the customary practices of the
Depositor. The Depositor will respond reasonably promptly to any inquiry of the
Trustee as to such customary practices of the Depositor.
SECTION 7.02. Between Trustee and Sub-Administrative Agents.
---------------------------------------------
(a) Unless otherwise provided in a Series Supplement, the Trustee may enter into
Sub-Administration Agreements with one or more Sub-Administrative Agents in
order to delegate certain of its administrative obligations with respect to a
related Series under this Trust Agreement to such Sub-Administrative Agents;
provided, however, that (i) such delegation shall not release the Trustee from
the duties, obligations, responsibilities or liabilities arising under this
Trust Agreement; (ii) the Rating Agency Condition shall have been satisfied with
respect to the entering into of any such agreement and (iii) such agreements are
consistent with the terms of these Standard Terms and, with respect to
Certificates of any Series, the related Series Supplement. With respect to any
Series (or Class within such Series) of Certificates, each Sub-Administration
Agreement shall impose on the Sub-Administrative Agent requirements conforming
to the provisions set forth in Section 3.01 and provide for administration of
the related Trust and all or certain specified Underlying Securities for such
Series consistent with the terms of this Trust Agreement. Additional
requirements relating to the scope and contents of any Sub-Administration
Agreement may be provided in the applicable Series Supplement. The Trustee shall
deliver to the Depositor copies of all Sub-Administration Agreements which it
enters into, and any amendments or modifications thereof, promptly upon the
Trustee's execution and delivery of any such instruments.
(b) The Trustee shall be entitled to terminate any
Sub-Administration Agreement which it enters into and the rights
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and obligations of any Sub-Administrative Agent under any Sub- Administration
Agreement in accordance with the terms and conditions of any such
Sub-Administration Agreement. In the event of a termination of any
Sub-Administration Agreement, the Trustee shall simultaneously reassume direct
responsibility for all obligations delegated in such Sub-Administration
Agreement without any act or deed on the part of the applicable Sub-
Administrative Agent, the Trustee shall administer directly the related
Underlying Securities or shall enter into a Sub- Administration Agreement with a
successor Sub-Administrative Agent which so qualifies under this Section 7.02.
(c) Unless otherwise provided in the applicable Series
Supplements, in the event a Sub-Administrative Agent is administering one or
more Underlying Securities pursuant to a Sub-Administration Agreement, the
Sub-Administrative Agent shall be required immediately to direct the Trustee to
deposit into an Eligible Account established by such Sub-Administrative Agent (a
"Sub-Administration Account") any amounts collected with respect thereto, and
all such amounts shall be deposited into the related Certificate Account not
later than the Business Day after receipt thereof.
SECTION 7.03. Certain Matters Affecting the Trustee.
-------------------------------------
(a) Except as otherwise provided in this Article VII:
(i) the Trustee may request and rely upon and shall be
protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document reasonably
believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(ii) the Trustee may consult with counsel and any
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such Opinion of Counsel;
(iii) the Trustee shall be under no obligation to
exercise any of the trusts or powers vested in it by this Trust
Agreement or to institute, conduct or defend any litigation hereunder
or in relation hereto, at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Trust Agreement,
unless such Certificateholders shall have offered to the Trustee
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reasonable security or indemnity against the costs, expenses
and liabilities which may be incurred therein or thereby;
(iv) the Trustee shall not be personally liable for any
action taken, suffered or omitted by it in good faith and believed by
it to be authorized or within the discretion or rights or powers
conferred upon it by this Trust Agreement;
(v) the Trustee shall not be bound to make any
investigation into the facts of matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, approval, bond or other paper or document
believed by it to be genuine, unless requested in writing to do so by
Holders of the Required Percentage -- Direction of Trustee of the
aggregate Voting Rights of the affected Series (or Class or Classes
within any such Series), as specified by the applicable Series
Supplement; provided, however, that if the payment within a reasonable
time to the Trustee of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the opinion
of the Trustee, not reasonably assured to the Trustee by the security
afforded to it by the terms of this Trust Agreement, the Trustee may
require reasonable indemnity against such expense or liability as a
condition to taking any such action;
(vi) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian; and
(vii) the Trustee shall not be personally liable for any
loss resulting from the investment of funds held in any Certificate
Account or Reserve Account at the direction of the Depositor pursuant
to Section 3.05.
(b) All rights of action under this Trust Agreement or under
any of the Certificates, enforceable by the Trustee, may be enforced by it
without the possession of any of the Certificates of any Series (or Class within
such Series), or the production thereof at the trial or other Proceeding
relating thereto, and any such suit, action or proceeding instituted by the
Trustee shall be brought in its name for the benefit of all the Holders of such
Certificates, subject to the provisions of this Trust Agreement.
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SECTION 7.04. Trustee Not Liable for Recitals in Certificates
-----------------------------------------------
or Underlying Securities. The Trustee assumes no responsibility for the
- ------------------------
correctness of the recitals contained herein and in the Certificates or in any
document issued in connection with the sale of the Certificates (other than the
signature and authentication on the Certificates). Except as set forth in
Section 7.10, the Trustee makes no representations or warranties as to the
validity or sufficiency of this Trust Agreement or of the Certificates of any
Series (other than the signature and authentication on the Certificates) or of
any Underlying Security or related document. The Trustee shall not be
accountable for the use or application by the Depositor, of any of the
Certificates or of the proceeds of such Certificates.
SECTION 7.05. Trustee May Own Certificates. The Trustee in its
----------------------------
individual capacity or any other capacity may become the owner or pledgee of
Certificates with the same rights it would have if it were not Trustee;
provided, however, that in determining whether the required percentage of
aggregate Voting Rights shall have consented to any action hereunder requiring
the consent of the Certificateholders, the Trustee's interest shall be excluded.
SECTION 7.06. Trustee's Fees and Expenses. (a) The
---------------------------
applicable Series Supplement shall specify the amount and circumstances of the
Trustee's compensation and the source thereof.
(b) If the Prepaid Ordinary Expenses set forth in the Series
Supplement is greater than zero, the Trustee acknowledges that the Depositor has
paid to the Trustee an amount equal to the Prepaid Ordinary Expenses, and the
Trustee agrees that the payment of such amount shall constitute full and final
satisfaction of and payment for all Ordinary Expenses.
(c) If the Prepaid Ordinary Expenses set forth in the Series
Supplement is zero, the Series Supplement may indicate that Ordinary Expenses
will be paid for by the Trust, in which case the Trustee shall be paid on a
periodic basis by the Trust or the Retained Interest at the rate or amount and
on the terms provided for in the Series Supplement. The Trustee agrees that its
right to receive such payments from the Trust shall constitute full and final
satisfaction of and payment for all Ordinary Expenses and that the Trustee shall
have no claim on payment of Ordinary Expenses from any other source, including
the Depositor.
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(d) If the Prepaid Ordinary Expenses set forth in the Series
Supplement is zero, the Series Supplement may provide that the Depositor shall
pay to the Trustee from time to time a fee for its services and expenses as
Trustee as set forth in the Series Supplement payable at the times set forth
therein. The Trustee agrees that its right to receive such payments from the
Depositor shall constitute full and final satisfaction of and payment for all
Ordinary Expenses and that the Trustee shall have no claim for payment of
Ordinary Expenses from the Trust. The Trustee further agrees that,
notwithstanding any failure by the Depositor to make such periodic payments of
the Ordinary Expenses, the Trustee shall continue to perform its obligations
under this Trust Agreement. The Depositor's obligations to pay Ordinary Expenses
under this Trust Agreement shall be extinguished and of no further effect upon
the payment of Ordinary Expenses due and owing on the termination of the Trust
pursuant to Section 9.01 hereof.
(e) Subject to subsection 7.06(f), all Extraordinary Trust
Expenses, to the extent not paid by a third party are, and shall be, obligations
of the Trust and when due and payable shall be satisfied solely by the Trust.
(f) The Trustee shall not take any action, including appearing
in, instituting or conducting any action or suit hereunder or in relation
hereto, which is not indemnifiable under Section 7.11 hereof which, in the
Trustee's opinion, would or might cause it to incur costs, expenses or
liabilities that are Extraordinary Trust Expenses unless (i) the Trustee is
satisfied that it will have adequate security or indemnity in respect of such
costs, expenses and liabilities, (ii) the Trustee has been instructed to do so
by Certificateholders representing not less than the Required
Percentage--Remedies of the aggregate principal amount of Certificates then
outstanding, and (iii) the Certificateholders, pursuant to the instructions
given under clause (ii) above, have agreed that such costs, expenses or
liabilities shall either be (x) paid by the Trustee from the Trust, in the case
of a vote of 100% of the aggregate principal amount of Certificates then
outstanding, or (y) paid by the Trustee (which payment shall be made out of its
own funds and not from monies on deposit in the Trust) in which case the Trustee
shall be entitled to receive, upon demand, reimbursement from those
Certificateholders who have agreed to bear the entire amount of such costs,
expenses or liabilities, on a pro rata basis among such Certificateholders.
SECTION 7.07. Eligibility Requirements for Trustee.
------------------------------------
(a) The Trustee hereunder shall at all times be a corporation or
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an association which is not an Affiliate of the Depositor, the Underlying
Securities Issuer or the Credit Support Provider (but may have normal banking
relationships with such parties and their Affiliates) organized and doing
business under the laws of any State or the United States, authorized under such
laws to exercise corporate trust powers which shall be eligible to act as a
trustee under Section 310(a) of the Trust Indenture Act, having a combined
capital and surplus of at least $50,000,000 and subject to supervision or
examination by Federal or State authority. If such corporation or association
publishes reports of conditions at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section the combined capital and surplus of such corporation or
association shall be deemed to be its combined capital and surplus as set forth
in its most recent report of conditions so published. Such corporation or
association must be rated in one of the four highest rating categories by the
Rating Agency. In the event that at any time such Trustee shall cease to be
eligible in accordance with the provisions of this Section, such Trustee shall
resign immediately in the manner and with the effect specified in Section 7.08.
(b) In determining whether the Trustee has a conflicting
interest with respect to any Class of Certificates under Section 310(b) of the
Trust Indenture Act and this Section, each other Class of Certificate will be
treated as having been issued under an indenture other than this Trust
Agreement.
SECTION 7.08. Resignation or Removal of the Trustee;
-------------------------------------
Appointment of Successor Trustee. (a) The Trustee may at any time resign as
- --------------------------------
Trustee hereunder by written notice of its election so to do, delivered to the
Depositor, and such resignation shall take effect upon the appointment of a
successor Trustee and its acceptance of such appointment as hereinafter
provided; provided, however, that in the event of such resignation, the Trustee
shall (a) assist the Depositor in finding a successor Trustee acceptable to the
Depositor and (b) negotiate in good faith concerning any prepaid but unaccrued
fees.
(b) The Depositor or Holders of the Required
Percentage--Removal of Trustee of Certificates may at any time remove the
Trustee as Trustee hereunder by written notice delivered to the Trustee in the
manner provided in Section 10.04 hereof, and such removal shall take effect upon
the appointment of the successor trustee and its acceptance of such appointment
as provided in the succeeding paragraph; provided, however, that in the event of
such removal, the Depositor shall negotiate in
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good faith with the Trustee in order to agree regarding payment of the
termination costs of the Trustee resulting from such removal.
(c) Upon the designation of a successor Trustee, following
either resignation or removal of the Trustee, the Trustee shall deliver to the
successor Trustee all records relating to the Certificates in the form and
manner then maintained by the Trustee, which shall include a hard copy thereof
upon written request of the successor Trustee.
(d) If at any time the Trustee shall become incapable of
acting or shall be adjudged a bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property of affairs for the purpose
of rehabilitation, conservation or liquidation, the Depositor shall petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee. In the event the Trustee resigns or is
removed, the Trustee shall reimburse the Depositor for any fees or charges
previously paid to the Trustee in respect of duties not yet performed under this
Trust Agreement which remain to be performed by a successor Trustee.
(e) In case at any time the Trustee acting hereunder notifies
the Depositor that it elects to resign or the Depositor or Holders of the
Required Percentage--Removal of Trustee of Certificates notifies or notify the
Trustee that it or they elects or elect to remove the Trustee as Trustee, the
Depositor shall, within ninety (90) days after the delivery of the notice of
resignation or removal, appoint a successor Trustee, which shall satisfy the
requirements for a trustee under Section 7.07. If no successor Trustee has been
appointed within 90 days after the Trustee has given written notice of its
election to resign or the Depositor or Holders of the Required
Percentage--Removal of Trustee of Certificates have given written notice to the
Trustee of its or their election to remove the Trustee, as the case may be, the
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee. Every successor Trustee shall execute and deliver to its
predecessor and to the Depositor an instrument in writing accepting its
appointment hereunder, and thereupon such successor Trustee, without any further
act or deed, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor and for all purposes shall be the Trustee under
this Trust Agreement, and such predecessor, upon payment of all sums due it and
on the written request of the Depositor, shall execute and deliver an instrument
transferring to such successor all rights, obligations
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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 Trustee. Any successor Trustee shall promptly give
notice of its appointment to the Certificateholders of Certificates for which it
is successor Trustee in the manner provided in Section 10.04 hereof.
(f) Any corporation into or with which the Trustee may be
merged, consolidated or converted shall be the successor of such Trustee without
the execution or filing of any document or any further act.
SECTION 7.09. Appointment of Office or Agency. As
-------------------------------
specified in a Series Supplement, the Trustee shall appoint an office or agency
in the City of New York where the Certificates may be surrendered for
registration of transfer or exchange, and presented for the final distribution
with respect thereto, and where notices and demands to or upon the Trustee in
respect of the Certificates of the related Series and this Trust Agreement may
be served.
SECTION 7.10. Representations and Warranties of Trustee.
-----------------------------------------
The Trustee represents and warrants that:
(i) the Trustee is duly organized, validly existing
and in good standing under the laws of its jurisdiction of
incorporation or association;
(ii) neither the execution nor the delivery by the
Trustee of this Trust Agreement, nor the consummation by it of the
transactions contemplated hereby nor compliance by it with any of the
terms or provisions hereof will contravene any Federal or New York law,
governmental rule or regulation governing the banking or trust powers
of the Trustee or any judgment or order binding on it, or violate its
charter documents or by-laws or constitute a default under (or an event
which, without notice or lapse of time or both, would constitute a
default) under, or result in the breach or acceleration of any material
contract, indenture, mortgage, agreement or instrument to which it is a
party or by which any of its properties may be bound.
(iii) the Trustee has full power, authority and right to
execute, deliver and perform its duties and obligations as set forth
herein and in each Series Supplement to which it is a party and has
taken all necessary action to authorize
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the execution, delivery and performance by it of this Trust
Agreement;
(iv) this Trust Agreement has been duly executed and
delivered by the Trustee and constitutes the legal, valid and binding
obligation of the Trustee, enforceable in accordance with its terms,
except as enforcement may be limited by the applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
rights of creditors generally and general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law);
(v) the Trustee is not in violation, and the execution
and delivery of the Trust Agreement by the Trustee and its performance
and compliance with the terms thereof will not constitute a violation,
of any order or decree of any court or any order or regulation of any
federal, state, municipal or governmental agency having jurisdiction
over the Trustee or its properties, which violation would reasonably be
expected to have a material adverse effect on the condition (financial
or otherwise) or operations of the Trustee or its properties or on the
performance of its duties hereunder;
(vi) there are no actions or proceedings against, or
investigations of, the Trustee pending, or, to the knowledge of the
Trustee, threatened, before any court, administrative agency or other
tribunal (A) that could reasonably be expected to prohibit its entering
into the Trust Agreement, (B) seeking to prevent the issuance of the
Certificates contemplated by the Trust Agreement or (C) that could
reasonably affect the performance by the Trustee of its obligations
under, or the validity or enforceability against the Trustee of, the
Trust Agreement; and
(vii) no consent, approval, authorization or order of any
court, governmental agency or body is required for the execution,
delivery and performance by the Trustee of, or compliance by the
Trustee with, the Trust Agreement, or for the consummation of the
transactions contemplated by the Trust Agreement, except for such
consents, approvals, authorizations and orders, if any, that have been
obtained prior to the Closing Date.
The representations and warranties of the Trustee set forth in this Section 7.10
shall survive the receipt of Underlying Securities by the Trustee and shall
survive the delivery of the Trust Agreement by the Trustee to the Depositor.
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SECTION 7.11. Indemnification of Trustee by the Depositor;
-------------------------------------------
Contribution. (a) The Depositor agrees, to the extent the Trustee is not
- ------------
reimbursed pursuant to Section 7.06 hereof, to indemnify the Trustee against,
and hold it harmless from, any loss, expense or liability incurred in connection
with any legal action relating to this Trust Agreement or the Certificates or
the performance of any of the Trustee's duties hereunder, other than any loss,
liability or expense (i) that constitutes a specific liability of the Trustee
under this Trust Agreement or (ii) incurred by reason of wilful misfeasance, bad
faith or negligence in the performance of the Trustee's duties hereunder or by
reason of reckless disregard of the Trustee's obligations and duties hereunder
or as a result of a breach of the Trustee's obligations and duties hereunder.
(b) If the indemnification provided for in the preceding
paragraph is invalid or unenforceable in accordance with its terms, then the
Depositor shall contribute to the amount paid or payable by the Trustee as a
result of such liability in such proportion as is appropriate to reflect the
relative benefits received by the Depositor on one hand and the Trustee as
Trustee on the other hand. For this purpose (i) the benefits received by the
Depositor shall be the aggregate amount received by it upon the sale of such
Certificates, less the costs and expenses of such sale, including the cost of
acquisition of the Underlying Securities or parts thereof evidenced thereby, and
(ii) the benefits received by the Trustee as Trustee shall be the aggregate
amount of fees received by it as Trustee, less costs and expenses incurred by it
as Trustee in relation to such Certificates. If, however, the allocation
provided by the immediately preceding two sentences is not permitted by
applicable law, then the Depositor shall contribute to such amount paid or
payable by the Trustee in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Depositor on the one
hand and the Trustee on the other in connection with the actions or omissions
which resulted in such liability, as well as any other relevant equitable
considerations.
(c) In case any claim shall be made or action brought against
the Trustee for any reason for which indemnity may be sought against the
Depositor as provided above, the Trustee may promptly notify the Depositor in
writing setting forth the particulars of such claim or action and the Depositor
may assume the defense thereof. In the event that the Depositor assumes the
defense, the Trustee shall have the right to retain separate counsel in any such
action but shall bear the fees and expenses of such counsel unless (i) the
Depositor shall have specifically
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authorized the retaining of such counsel or (ii) the parties to such suit
include the Trustee and the Depositor, and the Trustee has been advised in
writing by such counsel that one or more legal defenses may be available to it
which may not be available to the Depositor, in which case the Depositor shall
not be entitled to assume the defense of such suit notwithstanding its
obligation to bear the reasonable fees and expenses of such counsel.
(d) The term "liability," as used in this Section 7.11, shall
include any losses, claims, damages, expenses (including without limitation the
Trustee's reasonable costs and expenses) in defending itself against any losses,
claims or investigations of any nature whatsoever.
(e) The obligations of the Depositor under this Section 7.11
shall be in addition to any liability which the Depositor may otherwise have and
shall extend, upon the same terms and conditions, to each officer and director
of the Trustee, and to each person, if any, who controls the Trustee within the
meaning of the Exchange Act.
(f) Notwithstanding anything to the contrary contained in this
Section 7.11, the Depositor shall not be liable for settlement of any such claim
by the Trustee entered into without the prior written consent of the Depositor,
which consent shall not be unreasonably withheld.
(g) The indemnity provided in this Section shall survive the
termination or discharge of this Trust Agreement.
SECTION 7.12. Indemnification of Depositor by Trustee. The
---------------------------------------
Trustee, in its individual capacity and not from the assets of the Trust, shall
indemnify the Depositor and any successor trustee against any losses, claims,
damages, expenses (including without limitation the Depositor's costs and
expenses in defending itself against any losses, claims or investigations of any
nature whatsoever) or other liabilities, joint or several, which may arise out
of acts performed or omitted by the Trustee or its agents due to its or their
negligence, bad faith or willful misconduct.
SECTION 7.13. No Liability of the Trustee with Respect to the
-----------------------------------------------
Underlying Securities; Certificateholders to Proceed Directly Against the
- -------------------------------------------------------------------------
Issuer(s). (a) The sole obligor with respect to any Underlying Security is the
- ---------
Issuer thereof. The Trustee shall not have any obligation on or with respect to
the Underlying Securities; and its obligations with respect to
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Certificates shall be solely as set forth in this Trust Agreement.
(b) The Trustee is not authorized to proceed against the
Issuer of any Underlying Security in the event of a default or to assert the
rights and privileges of Certificateholders of Certificates and has no duty in
respect thereof except as expressly provided herein.
SECTION 7.14. The Depositor To Furnish Trustee with Names and
-----------------------------------------------
Addresses of Certificateholders. The Depositor will furnish to the Trustee
- -------------------------------
within 15 days after each Record Date with respect to any Distribution Date, and
at such other times as the Trustee may request in writing, within 30 days after
receipt by the Depositor of any such request, a list, in such form as the
Trustee may reasonably require, of all information in the possession or control
of the Depositor as to the names and addresses of the Certificateholders, in
each case as of a date not more than 15 days prior to the time such list is
furnished; provided, however, that so long as the Trustee is the sole
Certificate Registrar, no such list need be furnished.
SECTION 7.15. Preservation of Information. The Trustee shall
---------------------------
preserve, in as current a form as is reasonably practicable, the names and
addresses of Certificateholders contained in the most recent list furnished to
the Trustee as provided in Section 7.14, and the names and addresses of
Certificateholders received by the Trustee in its capacity as Certificate
Registrar, if so acting. The Trustee may destroy any list furnished to it as
provided in Section 7.14, upon receipt of a new list so furnished.
SECTION 7.16. Reports by Trustee. If required, within 60 days
------------------
after May 15 of each year, commencing with the year 1998, the Trustee shall
transmit to the Certificateholders, as provided in Section 313(c) of the Trust
Indenture Act, a brief report dated as of such May 15, if required by Section
313(a) of the Trust Indenture Act.
SECTION 7.17. Trustee's Application for Instructions from the
-----------------------------------------------
Depositor. Any application by the Trustee for written instructions from the
- ---------
Depositor may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under this Trust Agreement and
the date on and/or after which such action shall be taken or such omission shall
be effective, if, but only if, the obligations of the Trustee with respect to
such proposed action or omission are not set forth reasonably clearly in these
Standard Terms and the
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<PAGE>
related Series Supplement. The Trustee shall not be liable for any action taken
by, or omission of, the Trustee in accordance with a proposal included in such
application on or after the date specified in such application (which date shall
not be less than ten (10) Business Days after the date an officer of the
Depositor actually receives such application, unless any such officer shall have
consented in writing to any earlier date) unless, prior to taking any such
action (or the effective date in the case of an omission), the Trustee shall
have received written instructions in response to such application specifying
the action to be taken or omitted; provided, however, that this provision shall
not protect the Trustee from liability for any action or omission constituting
willful misconduct, bad faith or negligence.
ARTICLE VIII
Market Agent
------------
SECTION 8.01. Market Agent. (a) If specified for a specific
------------
Series, on the Closing Date the Trustee shall enter into a Market Agent
Agreement with Lehman Brothers Inc., as the initial Market Agent, in the form
attached to the related Series Supplement. The Market Agent shall serve as such
under the terms and provisions hereof and of the Market Agent Agreement. The
Market Agent, including any successor appointed pursuant hereto, shall be a
member of the National Association of Securities Dealers, Inc., have
capitalization of at least $25,000,000, and be authorized by law to perform all
the duties imposed upon it by this Trust Agreement and the Market Agent
Agreement. The Market Agent may be removed at any time by the Trustee, acting at
the direction of the Depositor; provided, however, that such removal shall not
take effect until the appointment of a successor Market Agent. The Market Agent
may resign upon 30 days' written notice delivered to the Trustee. The Trustee
shall use its best efforts to appoint a successor Market Agent that is a
qualified institution, effective as of the effectiveness of any such resignation
or removal.
ARTICLE IX
Termination
-----------
SECTION 9.01. Termination upon Liquidation of All Underlying
----------------------------------------------
Securities. (a) The respective obligations and responsibilities under this Trust
- ----------
Agreement of the Depositor, and the Trustee (other than the obligations of the
Trustee to make
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distributions to Holders of the Certificates of any given Series as hereafter
set forth and to provide information reports and information tax reporting)
shall terminate upon the distribution to such Holders of all amounts held in all
the Accounts for such Series and required to be paid to such Holders pursuant to
this Trust Agreement on the Distribution Date coinciding with the final payment
on or other liquidation (which may include redemption or other purchase thereof
by the applicable Issuer) (or any Advance with respect thereto) of the last
Underlying Security remaining in the Trust for such Series or the disposition of
all property acquired upon liquidation of any such Underlying Security;
provided, however, that in no event shall the Trust created hereby continue
beyond the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late ambassador of the United States to
the Court of St. James, living on the date hereof.
(b) Written notice of any termination shall be provided as set
forth in Section 10.04.
(c) Upon presentation and surrender of the Certificates by the
Certificateholders to the Trustee at the locations specified in Section 5.05 on
the Final Scheduled Distribution Date or the Distribution Date coinciding with
or next following the earlier to occur of the occurrences specified in 9.01(a),
with respect to the applicable Series of Certificates, the Trustee shall, upon
its cancellation of each surrendered Certificate, distribute to each Holder
presenting and surrendering its Certificates (i) the amount otherwise
distributable on such Distribution Date in accordance with Section 4.01 in
respect of the Certificates so presented and surrendered, or (ii) as specified
in the applicable Series Supplement, if in connection with the Trustee's sale of
all the remaining Underlying Securities. Any funds not distributed on such
Distribution Date shall be set aside and held in trust for the benefit of
Certificateholders not presenting and surrendering their Certificates in the
aforesaid manner, and shall be disposed of in accordance with this Section 9.01
and Section 4.01 hereof. Immediately following the deposit of funds in trust
hereunder, the Trust for such Series shall terminate.
ARTICLE X
Miscellaneous Provisions
------------------------
SECTION 10.01. Amendment. (a) This Trust Agreement
---------
may be amended from time to time by the Depositor and the Trustee
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<PAGE>
without the consent of any of the Certificateholders for any of the following
purposes: (i) to cure any ambiguity or to correct or supplement any provision
herein which may be defective or inconsistent with any other provision herein or
to provide for any other terms or modify any other provisions with respect to
matters or questions arising under this Trust Agreement which shall not
adversely affect the interests of the Holders in any material respect; or (ii)
to evidence and provide for the acceptance of appointment hereunder of a change
in Trustee as Trustee for a Series of Certificates subsequent to the Closing
Date for such Series, and to add to or change any of the provisions of this
Trust Agreement as shall be necessary to provide for or facilitate the
administration of the separate Trusts hereunder by more than one trustee,
pursuant to the requirements of Section 5.01 hereof; or (iii) to evidence and
provide for the acceptance of appointment hereunder by a successor Trustee with
respect to the Certificate of one or more Series or to add or change any of the
provisions of this Trust Agreement as shall be necessary to provide for or
facilitate the administration of the trusts hereunder; or (iv) to provide for
the issuance of a new Series of Certificates pursuant to a Series Supplement
issued hereunder pursuant to Sections 5.01 and 5.12 hereof; provided, however,
that in the case of any amendment the Rating Agency Condition shall be satisfied
with respect to such amendment and that no such amendment shall cause any Trust
created hereunder (as evidenced by an Opinion of Counsel) to fail to qualify as
a fixed investment trust for federal income tax purposes.
(b) Without limiting the generality of the foregoing, with
respect to any Series, unless otherwise specified in a related Series
Supplement, this Trust Agreement may also be modified or amended from time to
time by the Depositor and the Trustee with the consent of the Holders of
Certificates representing the Required Percentage--Amendment of the aggregate
Voting Rights of those Certificates to which such modification or amendment
relates for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Trust Agreement or of modifying in any
manner the rights of the Holders of Certificates; provided, however, that,
unless otherwise specified in a related Series Supplement, no such amendment
shall (i) reduce in any manner the amount of, or delay the timing of, payments
received on Underlying Securities which are required to be distributed on any
Certificate without the consent of the Holders of such Certificates, (ii)
adversely affect in any material respect the interests of the Holders of any
Series (or Class within such Series) of Certificates in a manner other than as
described in (i), without the consent of the
86
<PAGE>
Holders of Certificates of such Series or Class evidencing not less than the
Required Percentage-- Amendment of the aggregate Voting Rights of such Series or
Class or (iii) reduce the percentage of aggregate Voting Rights required by
(ii), as described in (ii), without the consent of the Holders of all
Certificates of such Series or Class then Outstanding.
Notwithstanding any other provision of this Trust Agreement,
for purposes of the giving or withholding of consents pursuant to this Section
10.01, Certificates registered in the name of the Depositor or the Trustee or
any Affiliate thereof shall be entitled to Voting Rights with respect to matters
affecting such Certificates; and provided, further, that in the event the Rating
Agency Condition is not satisfied with respect to such modification or
amendment, the Required Percentage--Amendment shall be increased to require an
aggregate percentage of the aggregate Voting Rights in the amount specified in
the applicable Series Supplement. Notwithstanding any other provision of this
Trust Agreement, this Section 10.02(b) shall not be amended without the
unanimous consent of the Holders of all such Certificates.
(c) Promptly after the execution of any such amendment or
modification, the Trustee shall furnish a copy of such amendment or modification
to each Certificateholder of the affected Series or Class and to the Rating
Agency. It shall not be necessary for the consent of Certificateholders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
SECTION 10.02. Limitation on Rights of Certificateholders. (a)
------------------------------------------
The death or incapacity of any Certificateholder shall not operate to terminate
this Trust Agreement or the Trust, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the applicable Trust,
nor otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.
(b) No Certificateholder of a given Series shall have any
right to vote (except as expressly provided for herein) or in any manner
otherwise control the operation and management of any Trust, or the obligations
of the parties hereto, nor shall anything herein set forth, or contained in the
terms of the
87
<PAGE>
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken by the parties to this Trust Agreement pursuant to any provision
hereof.
(c) No Certificateholder of a given Series shall have any
right by virtue of any provision of this Trust Agreement to institute any suit,
action or proceeding in equity or at law upon or under or with respect to this
Trust Agreement, unless (i) such Holder previously shall have given to the
Trustee a written notice of breach and of the continuance thereof, (ii) the
Holders of Certificates of such Series evidencing not less than the Required
Percentage--Remedies of the aggregate Voting Rights of such Series shall have
made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, (iii) the Trustee, for 15
days after its receipt of such notice, request and offer of indemnity, shall
have neglected or refused to institute any such action, suit or proceeding, and
(iv) no direction inconsistent with such written request has been given to the
Trustee during such 15-day period by Certificateholders evidencing not less than
the Required Percentage--Remedies of the aggregate Voting Rights of such Series.
It is understood and agreed that the Trustee shall not be obligated to make any
investigation of matters arising under this Trust Agreement or to institute,
conduct or defend any litigation hereunder or in relation hereto at the request,
order or direction of any Certificateholders unless such Certificateholders have
offered to the Trustee the reasonable security or indemnity referred to above.
It is further understood and agreed, and expressly covenanted by each
Certificateholder of each Series with every other Certificateholder of such
Series and the Trustee, that no one or more Holders of Certificates of such
Series shall have any right in any manner whatever by virtue of any provision of
this Trust Agreement to affect, disturb or prejudice the rights of the Holders
of any other of the Certificates of such Series, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Trust Agreement, except in the manner herein provided and for the
equal, ratable and common benefit of all Certificateholders of such Series. For
the protection and enforcement of the provisions of this Section, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
88
<PAGE>
SECTION 10.03. GOVERNING LAW. THIS TRUST AGREEMENT SHALL BE
-------------
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY IN THE STATE OF NEW
YORK AND WITHOUT GIVING EFFECT TO SUCH STATE'S PRINCIPLES OF CONFLICTS OF LAW TO
THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 10.04. Notices. (a) All directions, demands
-------
and notices hereunder shall be in writing and shall be delivered
as set forth in the applicable Series Supplement.
(b) Any notice required to be provided to a Holder of a
Registered Certificate shall be given by first class mail, postage prepaid, at
the last address of such Holder as shown in the Certificate Register. Any notice
so mailed within the time prescribed in this Trust Agreement shall be
conclusively presumed to have been duly given when mailed, whether or not the
Certificateholder receives such notice.
(c) Any notice required to be given to a holder of a Bearer
Certificate or Coupon shall be published in an Authorized Newspaper or
Newspapers in such Place or Places of Distribution as may be specified for a
given Series in the applicable Series Supplement, and such notice shall be
deemed sufficient if published on two separate Business Days within two Business
Days of the time prescribed in this Trust Agreement.
(d) Any and all notices to be given to the Depositor shall be
deemed to have been duly given if sent by facsimile transmission to the
Depositor at 3 World Financial Center, New York, New York 10285, Attention: Mark
Zusy, through facsimile transmission number (212) 528-6664, telephone
confirmation number (212) 526-4428. The Depositor may change this information by
written notice to the Trustee.
(e) Any and all notices to be given to the Trustee shall be
deemed to have been duly given if sent by facsimile transmission to the Trustee
at 101 Barclay Street, New York, New York 10286, Attention: Corporate Trust
Trustee Administration, facsimile transmission number (212) 815-5999, telephone
confirmation number (212) 815-5098. The Trustee may change this information by
notice to the Depositor.
(f) Any and all notices to be given to the Swap Counterparty,
if any, will be specified in the Series Supplement.
89
<PAGE>
SECTION 10.05. Notice to Rating Agencies. (a) The
-------------------------
Trustee shall use its best efforts promptly to provide notice to each Rating
Agency with respect to each of the following of which it has actual knowledge:
(i) any change or amendment to this Trust Agreement;
(ii) the resignation or termination of the Trustee;
(iii) the final payment to Holders of the Certificates of any
Class;
(iv) any change in the location of the Certificate
Account; and
(v) any event that would result in the inability of the
Trustee to make Advances.
(b) In addition, the Trustee shall promptly furnish to each
Rating Agency copies of each report to Certificateholders described in Section
4.03.
(c) Any such notice pursuant to this Section shall be in
writing and shall be deemed to have been duly given if personally delivered or
mailed by first class mail, postage prepaid, or by express delivery service to
each Rating Agency at the address specified below or in the applicable Series
Supplement.
(d) (i) Any and all notices to be given to Moody's shall be
deemed to have been duly given if sent by facsimile transmission to
Moody's at Moody's Investors Service, Inc., 99 Church Street, New York,
New York 10007, Attention: CBO/CLO Monitoring Department, facsimile
transmission number (212) 553-0355, telephone confirmation number (212)
553- 1494. Moody's may change this information by notice to the
Depositor and the Trustee.
(ii) Any and all notices to be given to S&P shall be deemed to
have been duly given if sent by facsimile transmission to S&P at
Standard & Poor's Rating Group, 25 Broadway, New York, New York, 10004,
Attention: Structured Finance Surveillance Group, facsimile
transmission number (212) 208-0053, telephone confirmation number (212)
208- 1191. S&P may change this information by notice to the Depositor
and the Trustee.
90
<PAGE>
SECTION 10.06. Severability of Provisions. If any one or more
--------------------------
of the covenants, agreements, provisions or terms of this Trust Agreement shall
be for any reason whatsoever held invalid, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Trust Agreement and shall in no way
affect the validity or enforceability of the other provisions of this Trust
Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 10.07. Grant of Security Interest. (a) It is the
--------------------------
express intent of the parties hereto that each conveyance of any Underlying
Securities by the Depositor to the Trustee be, and be construed as, a sale of
the Underlying Securities by the Depositor and not a pledge of any Underlying
Securities by the Depositor to secure a debt or other obligation of the
Depositor.
(b) In the event that, notwithstanding the aforementioned
intent of the parties, any Underlying Securities are held to be property of the
Depositor, then, (x) it is the express intent of the parties that such
conveyance be deemed a pledge of such Underlying Securities by the Depositor to
the Trustee to secure a debt or other obligation of the Depositor and (y)(1)
this Trust Agreement shall also be deemed to be a security agreement within the
meaning of Articles 8 and 9 of the Uniform Commercial Code as in effect from
time to time in the State of New York, or such other State as may be specified
in the related Series Supplement; (2) the conveyance provided for in Section
2.01 hereof shall be deemed to be a grant by the Depositor to the Trustee of a
security interest in all the Depositor's right, title and interest in and to
such Underlying Securities and all amounts payable to the holders of such
Underlying Securities in accordance with the terms hereof and all proceeds of
the conversion, voluntary or involuntary, of the foregoing into cash,
instruments, securities or other property including all amounts from time to
time held or invested in the applicable Certificate Account, whether in the form
of cash, instruments, securities or other property; (3) the obligations secured
by such security agreement shall be deemed to be all the Depositor's obligations
under this Trust Agreement, including the obligation to provide to the
Certificateholders the benefits of this Trust Agreement relating to such
Underlying Securities and the applicable Trust; and (4) notifications to persons
holding such property, and acknowledgements, receipts or confirmations from
persons holding such property, shall be deemed notifications to, or
acknowledgements, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of the Trustee
91
<PAGE>
for the purpose of perfecting such security interest under applicable law.
Accordingly, the Depositor hereby grants to the Trustee a
security interest in the Underlying Securities and all other property described
in clause (y)(2) of the preceding paragraph, for the purpose of securing to the
Trustee the performance by the Depositor of the obligations described in clause
(y)(3) of the preceding paragraph. Notwithstanding the foregoing, the parties
hereto intend the Grant pursuant to Section 2.01 to be a true, absolute and
unconditional sale of the Underlying Securities and assets constituting the
applicable Trust by the Depositor to the Trustee.
(c) The Depositor and the Trustee shall to the extent
consistent with this Trust Agreement, take such actions as may be necessary to
ensure that, if this Trust Agreement were deemed to create a security interest
in the Underlying Securities, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such for so long as any of the Underlying Securities remain
outstanding. Without limiting the generality of the foregoing, the Trustee shall
file, or shall cause to be filed, all filings necessary to maintain the
effectiveness of any original filings necessary under the Uniform Commercial
Code as in effect in any jurisdiction to perfect the Trustee's security interest
in or lien on the Underlying Securities, including (x) continuation statements
and (y) such other statements as may be occasioned by (1) any change of name of
the Depositor or the Trustee, (2) any change of location of the place of
business or the chief executive office of the Depositor or (3) any transfer of
any interest of the Depositor in any Underlying Security.
SECTION 10.08. Nonpetition Covenant. Notwithstanding any prior
--------------------
termination of this Trust Agreement, each of the Trustee (including any
Sub-Administrative Agent, Authenticating Agent, Calculation Agent, or Paying
Agent) and the Depositor agrees that it shall not, until the date which is one
year and one day after the termination of the Trust acquiesce, petition or
otherwise invoke or cause the Trust to invoke the process of the United States
of America, any State or other political subdivision thereof or any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government for the purpose of commencing or
sustaining a case by or against the Trust under a Federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Trust or all
or any part of the
92
<PAGE>
property or assets of the Trust or ordering the winding up or liquidation of the
affairs of the Trust.
SECTION 10.09. No Recourse. Neither the Trustee (including any
-----------
Sub-Administrative Agent, Authenticating Agent, Calculation Agent, or Paying
Agent) nor the Depositor shall have any recourse to the Underlying Securities,
except for as specifically provided in the related Series Supplement.
SECTION 10.10. Article and Section References. All article and
------------------------------
section references used in these Standard Terms, unless otherwise provided, are
to articles and sections in these Standard Terms.
SECTION 10.11. Counterparts. These Standard Terms may be
------------
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute one and the same instrument.
SECTION 10.12. Trust Indenture Act Controls. This Trust
----------------------------
Agreement is subject to the provisions of the Trust Indenture Act and shall, to
the extent applicable, be governed by such provisions. The Trustee agrees to
take all actions within its control to prevent these Standard Terms, as
supplemented by any Series Supplements, from failing to qualify under the Trust
Indenture Act.
93
<PAGE>
IN WITNESS WHEREOF, the Depositor and the Trustee have caused
their names to be signed hereto by their respective officers thereunto duly
authorized, in each case as of the day and year first above written.
LEHMAN ABS CORPORATION,
as Depositor
By: /s/ Mark L. Zusy
---------------------------
Name: Mark L. Zusy
Title: Senior Vice President
THE BANK OF NEW YORK,
as Trustee
By: /s/ Enrico D. Reyes
---------------------------
Name: Enrico D. Reyes
Title: Vice President
<PAGE>
Reconciliation and tie between the Trust Agreement dated as of
February 25, 1998, and the Trust Indenture Act of 1939 as amended. This
reconciliation does not constitute part of Trust Agreement.
Trust Indenture Act Trust
of 1939 Section Agreement Section
- -------------------- -----------------
310(a)(1) 7.07
(a)(2) 7.07
(a)(5) 7.07
310(b) 7.07
312(a) 7.14
313(a) 7.16
314(a) 3.10
(c)(1) 1.03
(c)(2) 1.03
(e) 1.03
315(a)(1) 7.01(a)
315(a)(2) 7.03(a)
315(b) 7.01(d)
315(d) 7.01(c)
316(a)(1)(A) 5.19
(a)(1)(B) 5.20
(b) 5.21
(c) 1.03(b)
317(a)(1) 5.18
(b) 5.13
318(a) 10.12
<PAGE>
EXHIBIT B-1
Form of Class A-1 Certificate
-----------------------------
NUMBER [ ] $[ ]
CUSIP NO. 21987H AS 4
SEE REVERSE FOR CERTAIN DEFINITIONS
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE REPRESENTS A PROPORTIONATE UNDIVIDED
BENEFICIAL OWNERSHIP INTEREST IN THE TRUST AND DOES NOT EVIDENCE AN OBLIGATION
OF, OR AN INTEREST IN, AND IS NOT GUARANTEED BY THE DEPOSITOR OR THE TRUSTEE OR
ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE OR THE TRUST ASSETS
ARE INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR ANY OTHER PERSON.
LEHMAN ABS CORPORATION
CORPORATE BOND-BACKED CERTIFICATES,
SERIES 1998-ADM-1
$[ ] PRINCIPAL AMOUNT
6.50% PASS-THROUGH RATE
evidencing a proportionate undivided beneficial ownership interest in the Trust,
as defined below, the property of which consists principally of $[ ] aggregate
principal amount of 6.95% Debentures due December 15, 2097, comprising a portion
of a fixed rate, publicly issued, unsecured debt security issue of
Archer-Daniels-Midland Company (the "Underlying Security Issuer") and all
payments received thereon (the "Trust Property"), deposited in trust by Lehman
ABS Corporation (the "Depositor").
THIS CERTIFIES THAT CEDE & CO. is the registered owner of $[
] DOLLARS nonassessable, fully-paid, proportionate undivided beneficial
ownership interest in the Corporate Bond-Backed Certificates, Series 1998-ADM-1
Trust, formed by the Depositor.
<PAGE>
The Trust was created pursuant to a Standard Terms for Trust
Agreements, dated as of February 25, 1998 (the "Standard Terms"), between the
Depositor and The Bank of New York, a New York banking corporation, not in its
individual capacity but solely as Trustee (the "Trustee"), as supplemented by
the Series Supplement, Series 1998-ADM-1, dated as of March 30, 1998 (the
"Series Supplement" and, together with the Standard Terms, the "Trust
Agreement"), between the Depositor and the Trustee. This Certificate does not
purport to summarize the Trust Agreement and reference is hereby made to the
Trust Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby and the rights, duties and
obligations of the Trustee with respect hereto. A copy of the Trust Agreement
may be obtained from the Trustee by written request sent to the Corporate Trust
Office. Capitalized terms used but not defined herein have the meanings assigned
to them in the Trust Agreement.
This Certificate is one of the duly authorized Certificates
designated as the "Corporate Bond-Backed Certificates, Series 1998-ADM-1, Class
A-1" (herein called the "Certificates"). This Certificate is issued under and is
subject to the terms, provisions and conditions of the Trust Agreement, to which
Trust Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound. The Trust Property consists
of: (i) Underlying Securities described in the Trust Agreement; (ii) all
payments on or collections in respect of the Underlying Securities accrued on or
after December 15, 1997 together with any proceeds thereof; and (iii) all funds
from time to time deposited with the Trustee relating to the Certificates,
together with any and all income, proceeds and payments with respect thereto;
provided, however, that any income from the investment of Trust funds in certain
permitted investments ("Eligible Investments") does not constitute Trust
Property.
Subject to the terms and conditions of the Trust Agreement
(including the availability of funds for distributions) and until the obligation
created by the Trust Agreement shall have terminated in accordance therewith,
distributions will be made on each Distribution Date, to the Person in whose
name this Certificate is registered on the applicable Record Date, in an amount
equal to such Certificateholder's proportionate undivided beneficial ownership
interest in the amount required to be distributed to the Holders of the
Certificates on such Distribution Date. The Record Date applicable to any
Distribution Date is the close of business on the day immediately preceding such
Distribution Date (whether or not a Business Day). If a payment with respect to
the Underlying Securities is made to the Trustee after the date on which such
payment was due, then the Trustee will distribute any such amounts received on
the next occurring Business Day (a "Special Distribution Date").
Each Certificateholder, by its acceptance of a Certificate,
covenants and agrees that such Certificateholder will not at any time institute
against the Trust, or join in any institution against the Trust of, any
bankruptcy proceedings under any United
2
<PAGE>
States Federal or state bankruptcy or similar law in connection with any
obligations relating to the Certificates or the Trust Agreement.
Distributions made on this Certificate will be made as
provided in the Trust Agreement by the Trustee by wire transfer in immediately
available funds, or check mailed to the Certificateholder of record in the
Certificate Register without the presentation or surrender of this Certificate
or the making of any notation hereon, except that with respect to Certificates
registered on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee shall be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Except as otherwise provided in the Trust Agreement and notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the Corporate Trust Office or
such other location as may be specified in such notice.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee, by manual signature, this Certificate
shall not entitle the Holder hereof to any benefit under the Trust Agreement or
be valid for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE HOLDER HEREOF SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
3
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed as of the date set forth below.
CORPORATE BOND-BACKED CERTIFICATES,
SERIES 1998-ADM-1 TRUST
By: THE BANK OF NEW YORK
not in its individual
capacity but solely as
Trustee,
By: -----------------------------------
Authorized Signatory
Dated: [ ]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is on one of the Corporate Bond-Backed Certificates,
Series 1998-ADM-1, described in the Trust Agreement referred to herein.
THE BANK OF NEW YORK,
not in its individual
capacity but solely as
Trustee,
By:-----------------------------
Authorized Signatory
4
<PAGE>
(REVERSE OF CERTIFICATE)
The Certificates are limited in right of distribution to
certain payments and collections respecting the Underlying Securities, all as
more specifically set forth herein and in the Trust Agreement. The registered
Holder hereof, by its acceptance hereof, agrees that it will look solely to the
Trust Property (to the extent of its rights therein) for distributions
hereunder.
The Trust Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the Trustee and the rights of the
Certificateholders under the Trust Agreement at any time by the Depositor and
the Trustee with the consent of the holders of Class A-1 Certificates in the
manner set forth in the Series Supplement and the Standard Terms. Any such
consent by the Holder of this Certificate (or any predecessor Certificate) shall
be conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent in
made upon this Certificate. The Trust Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.
The Certificates are issuable in fully registered form only in
minimum principal amounts of $100,000 and integral multiples of $1,000 in excess
thereof (except that a single Certificate may be issued in an amount in excess
of $100,000 that is not an integral multiple of $1,000).
As provided in the Trust Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registerable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies of the Certificate Registrar maintained
by the Trustee in the Borough of Manhattan, the City of New York, duly endorsed
by or accompanied by an assignment in the form below and by such other documents
as required by the Trust Agreement, and thereupon one or more new Certificates
of the same class in authorized denominations evidencing the same principal
amount will be issued to the designated transferee or transferees. The initial
Certificate Registrar appointed under the Trust Agreement is The Bank of New
York.
No service charge will be made for any registration of
transfer or exchange, but the Trustee may require exchange of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.
The Depositor and the Trustee and any agent of the Depositor
or the Trustee may treat the Person in whose name this Certificate is registered
as the owner
5
<PAGE>
hereof for all purposes, and neither the Depositor, the Trustee, nor any such
agent shall be affected by any notice to the contrary.
It is the intention of the parties to the Trust Agreement that
the Trust created thereunder shall constitute a fixed investment trust for
federal income tax purposes under Treasury Regulation Section 301.7701-4, and
the Certificateholder agrees to treat the Trust, any distributions therefrom and
its beneficial interest in the Certificates consistently with such
characterization.
The Trust and the obligations of the Depositor and the Trustee
created by the Trust Agreement with respect to the Certificates shall terminate
upon the earliest to occur of (i) the distribution in full of all amounts due to
Certificateholders and retirement of the Underlying Securities, (ii) the
distribution in full of all Underlying Securities to the exchanging
Certificateholders on any Optional Exchange Date and any amounts due to
Certificateholders on any Optional Exchange Date, and (iii) the expiration of 21
years from the death of the last survivor of the descendants of Joseph P.
Kennedy, the late Ambassador of the United States to the Court of St. James,
living on the date hereof.
An employee benefit plan subject to the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), a plan described in Section
4975(e) of the Code, an entity whose underlying assets include plan assets by
reason of any such plan's investment in the entity, including an individual
retirement account or Keogh plan (any such, a "Plan") may purchase and hold
Certificates if the Plan can represent and warrant that its purchase and holding
of the Certificates would not be prohibited under ERISA or the Code.
6
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
- --------------------------------------------------------------------------------
(Please print or type name and address, including postal zip
code, of assignee)
- --------------------------------------------------------------------------------
the within Certificate, and all rights thereunder,
hereby irrevocably constituting and appointing
- --------------------------------------------------------------------- Attorney
to transfer said Certificate on the books of the
Certificate Register, with full power of substitution in the premises.
Dated:
------------------------- *
Signature Guaranteed:
------------------------- *
*NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Signatures must be guaranteed by
an "eligible guarantor institution" meeting the requirements of the Certificate
Registrar, which requirements include membership or participation in the
Security Transfer Agent Medallion Program ("STAMP") or such other "signature
guarantee program" as may be determined by the Certificate Registrar in addition
to, or in substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.
7
<PAGE>
EXHIBIT B-2
Form of Class A-2 Certificate
-----------------------------
NUMBER [ ] $[ ]
CUSIP NO. 21987H AT 2
SEE REVERSE FOR CERTAIN DEFINITIONS
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE REPRESENTS A PROPORTIONATE UNDIVIDED
BENEFICIAL OWNERSHIP INTEREST IN THE TRUST AND DOES NOT EVIDENCE AN OBLIGATION
OF, OR AN INTEREST IN, AND IS NOT GUARANTEED BY THE DEPOSITOR OR THE TRUSTEE OR
ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE OR THE TRUST ASSETS
ARE INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR ANY OTHER PERSON.
LEHMAN ABS CORPORATION
CORPORATE BOND-BACKED CERTIFICATES,
SERIES 1998-ADM-1
$[ ] PRINCIPAL AMOUNT
evidencing a proportionate undivided beneficial ownership interest in the Trust,
as defined below, the property of which consists principally of $[ ] aggregate
principal amount of 6.95% Debentures due December 15, 2097, comprising a portion
of a fixed rate, publicly issued, unsecured debt security issue of
Archer-Daniels-Midland Company (the "Underlying Security Issuer") and all
payments received thereon (the "Trust Property"), deposited in trust by Lehman
ABS Corporation (the "Depositor").
THIS CERTIFIES THAT CEDE & CO. is the registered owner of $[
] DOLLARS nonassessable, fully-paid, proportionate undivided beneficial
ownership interest in the Corporate Bond-Backed Certificates, Series 1998-ADM-1
Trust, formed by the Depositor.
<PAGE>
The Trust was created pursuant to a Standard Terms for Trust
Agreements, dated as of February 25, 1998 (the "Standard Terms"), between the
Depositor and The Bank of New York, a New York banking corporation, not in its
individual capacity but solely as Trustee (the "Trustee"), as supplemented by
the Series Supplement, Series 1998-ADM-1, dated as of March 30, 1998 (the
"Series Supplement" and, together with the Standard Terms, the "Trust
Agreement"), between the Depositor and the Trustee. This Certificate does not
purport to summarize the Trust Agreement and reference is hereby made to the
Trust Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby and the rights, duties and
obligations of the Trustee with respect hereto. A copy of the Trust Agreement
may be obtained from the Trustee by written request sent to the Corporate Trust
Office. Capitalized terms used but not defined herein have the meanings assigned
to them in the Trust Agreement.
This Certificate is one of the duly authorized Certificates
designated as the "Corporate Bond-Backed Certificates, Series 1998-ADM-1, Class
A-2" (herein called the "Certificates"). This Certificate is issued under and is
subject to the terms, provisions and conditions of the Trust Agreement, to which
Trust Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound. The Trust Property consists
of: (i) Underlying Securities described in the Trust Agreement; (ii) all
payments on or collections in respect of the Underlying Securities accrued on or
after December 15, 1997 together with any proceeds thereof; and (iii) all funds
from time to time deposited with the Trustee relating to the Certificates,
together with any and all income, proceeds and payments with respect thereto;
provided, however, that any income from the investment of Trust funds in certain
permitted investments ("Eligible Investments") does not constitute Trust
Property.
Subject to the terms and conditions of the Trust Agreement
(including the availability of funds for distributions) and until the obligation
created by the Trust Agreement shall have terminated in accordance therewith, no
distributions of interest will be made on this Certificate on any Distribution
Date.
Subject to the terms and conditions of the Trust Agreement
(including the availability of funds for distributions) and until the obligation
created by the Trust Agreement shall have terminated in accordance therewith,
the Trust will distribute on the Final Scheduled Distribution Date (i) all the
Underlying Securities held by the Trust as of such date and/or, if applicable,
(ii) the proceeds of the redemption of such Underlying Securities by the
Underlying Securities Issuer on such date, to the Person in whose name this
Certificate is registered on the applicable Record Date, in an amount equal to
such Certificateholder's proportionate undivided beneficial ownership interest
in the amount required to be distributed to the Holders of the Certificates on
such Final Scheduled Distribution Date.
2
<PAGE>
The Record Date applicable to the Final Scheduled
Distribution Date is the close of business on the day immediately preceding such
Final Scheduled Distribution Date (whether or not a Business Day). If a payment
with respect to the Underlying Securities is made to the Trustee after the date
on which such payment was due, then the Trustee will distribute any such amounts
received on the next occurring Business Day (a "Special Distribution Date").
Each Certificateholder, by its acceptance of a Certificate,
covenants and agrees that such Certificateholder will not at any time institute
against the Trust, or join in any institution against the Trust of, any
bankruptcy proceedings under any United States Federal or state bankruptcy or
similar law in connection with any obligations relating to the Certificates or
the Trust Agreement.
Distributions made on this Certificate will be made as
provided in the Trust Agreement by the Trustee by wire transfer in immediately
available funds, or check mailed to the Certificateholder of record in the
Certificate Register without the presentation or surrender of this Certificate
or the making of any notation hereon, except that with respect to Certificates
registered on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee shall be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Except as otherwise provided in the Trust Agreement and notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the Corporate Trust Office or
such other location as may be specified in such notice.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee, by manual signature, this Certificate
shall not entitle the Holder hereof to any benefit under the Trust Agreement or
be valid for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE HOLDER HEREOF SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
3
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed as of the date set forth below.
CORPORATE BOND-BACKED CERTIFICATES,
SERIES 1998-ADM-1 TRUST
By: THE BANK OF NEW YORK
not in its individual
capacity but solely as
Trustee,
By: --------------------------------
Authorized Signatory
Dated: [ ]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is on one of the Corporate Bond-Backed Certificates,
Series 1998-ADM-1, described in the Trust Agreement referred to herein.
THE BANK OF NEW YORK,
not in its individual
capacity but solely as
Trustee,
By -----------------------
Authorized Signatory
4
<PAGE>
(REVERSE OF CERTIFICATE)
The Certificates are limited in right of distribution to
certain payments and collections respecting the Underlying Securities, all as
more specifically set forth herein and in the Trust Agreement. The registered
Holder hereof, by its acceptance hereof, agrees that it will look solely to the
Trust Property (to the extent of its rights therein) for distributions
hereunder.
The Trust Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the Trustee and the rights of the
Certificateholders under the Trust Agreement at any time by the Depositor and
the Trustee with the consent of the holders of Certificates in the manner set
forth in the Series Supplement and the Standard Terms. Any such consent by the
Holder of this Certificate (or any predecessor Certificate) shall be conclusive
and binding on such Holder and upon all future Holders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent in made upon this
Certificate. The Trust Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
The Certificates are issuable in fully registered form only in
minimum denominations of $100,000 and integral multiples of $1,000 in excess
thereof.
As provided in the Trust Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registerable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies of the Certificate Registrar maintained
by the Trustee in the Borough of Manhattan, the City of New York, duly endorsed
by or accompanied by an assignment in the form below and by such other documents
as required by the Trust Agreement, and thereupon one or more new Certificates
of the same class in authorized denominations evidencing the same principal
amount will be issued to the designated transferee or transferees. The initial
Certificate Registrar appointed under the Trust Agreement is The Bank of New
York.
No service charge will be made for any registration of
transfer or exchange, but the Trustee may require exchange of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.
The Depositor and the Trustee and any agent of the Depositor
or the Trustee may treat the Person in whose name this Certificate is registered
as the owner hereof for all purposes, and neither the Depositor, the Trustee,
nor any such agent shall be affected by any notice to the contrary.
5
<PAGE>
It is the intention of the parties to the Trust Agreement that
the Trust created thereunder shall constitute a fixed investment trust for
federal income tax purposes under Treasury Regulation Section 301.7701-4, and
the Certificateholder agrees to treat the Trust, any distributions therefrom and
its beneficial interest in the Certificates consistently with such
characterization.
The Trust and the obligations of the Depositor and the Trustee
created by the Trust Agreement with respect to the Certificates shall terminate
upon the earliest to occur of (i) the distribution in full of all Underlying
Certificates and, if applicable, all proceeds of a redemption by the Underlying
Securities Issuer of the Underlying Securities, (ii) the distribution in full of
all Underlying Securities to the exchanging Certificateholders on any Optional
Exchange Date and any amounts due to Certificateholders on any Optional Exchange
Date, and (iii) the expiration of 21 years from the death of the last survivor
of the descendants of Joseph P. Kennedy, the late Ambassador of the United
States to the Court of St. James, living on the date hereof.
An employee benefit plan subject to the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), a plan described in Section
4975(e) of the Code, an entity whose underlying assets include plan assets by
reason of any such plan's investment in the entity, including an individual
retirement account or Keogh plan (any such, a "Plan") may purchase and hold
Certificates if the Plan can represent and warrant that its purchase and holding
of the Certificates would not be prohibited under ERISA or the Code.
6
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
- --------------------------------------------------------------------------------
(Please print or type name and address, including postal zip
code, of assignee)
- --------------------------------------------------------------------------------
the within Certificate, and all rights thereunder,
hereby irrevocably constituting and appointing
- --------------------------------------------------------------------- Attorney
to transfer said Certificate on the books of the
Certificate Register, with full power of substitution in the premises.
Dated:
----------------------- *
Signature Guaranteed:
----------------------- *
*NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Signatures must be guaranteed by
an "eligible guarantor institution" meeting the requirements of the Certificate
Registrar, which requirements include membership or participation in the
Security Transfer Agent Medallion Program ("STAMP") or such other "signature
guarantee program" as may be determined by the Certificate Registrar in addition
to, or in substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.
7
<PAGE>
EXHIBIT C
FORM OF MARKET AGENT AGREEMENT
------------------------------
(begins on next page)
<PAGE>
FORM OF MARKET AGENT AGREEMENT
MARKET AGENT AGREEMENT, dated as of [ ]
(the "Agreement"), by and between Lehman Brothers Inc. ("LBI"), and the [
] (the "Trust"), a New York trust created under the Standard Terms for
Trust Agreements, dated as of February 25, 1998 (the "Standard Terms"), between
Lehman ABS Corporation, as depositor (the "Depositor"), and The Bank of New
York, as trustee (the "Trustee"), as supplemented by the Series Supplement,
dated as of [ ], between the Depositor and the Trustee (the Standard
Terms, together with the Series Supplement, the "Trust Agreement"). Capitalized
terms used but not defined herein shall have the meanings ascribed to them in
the Trust Agreement. This Agreement shall constitute the "Market Agent
Agreement" as defined in the Trust Agreement.
W I T N E S S E T H:
-------------------
WHEREAS, the Trust desires to retain LBI to render certain
services to the Trust in the manner and on the terms hereinafter set forth:
WHEREAS, LBI is a recognized broker dealer meeting the
qualifications for a Market Agent set forth in the Trust Agreement and desires
to provide such services to the Trust on the terms and conditions hereinafter
set forth; and
WHEREAS, the Trustee has been directed to enter into and
execute this Market Agent Agreement with LBI as the initial Market Agent
pursuant to Section 8.01 of the Standard Terms;
NOW, THEREFORE, in consideration of the premises and the
covenants hereinafter contained, LBI and the Trust hereby agree as follows:
Section 1. Duties of the Market Agent. The Trust hereby
--------------------------
employs LBI to act as the Market Agent for the Trust and to furnish to the Trust
all of the services of the Market Agent set forth herein and in the Trust
Agreement, including but not limited to acting on behalf of the Trust in
connection with the sale and purchase of Underlying Securities as provided in
the Trust Agreement. The Market Agent may solicit and accept bids from
Certificateholders
<PAGE>
for the Underlying Securities. LBI hereby accepts such employment and agrees
during the term of the Certificates to render such services and to assume the
obligations of the Market Agent under the Trust Agreement under the terms and
conditions herein set forth.
Section 2. Compensation of LBI. The Depositor shall pay LBI a
-------------------
fee as shall be separately agreed between the Depositor and LBI. It shall be the
sole responsibility of the Depositor to pay such fee and the Trust shall have no
obligation to compensate LBI for the services it renders pursuant to the terms
of this Market Agent Agreement, except that the Trust shall pay LBI a fee for
any sale of the Underlying Securities in an amount that is customary for such a
sale at the time of such sale.
Section 3. Limitation of Liability of the Market Agent. The
-------------------------------------------
Market Agent shall not be liable in contract, tort or otherwise to the Trust for
any losses, costs or damages arising out of its performance of its obligations
and duties hereunder except for willful misconduct, bad faith or gross
negligence in the performance of its duties, or by reason of reckless disregard
of its obligations and duties hereunder.
Section 4. Term of this Agreement. This Agreement, which shall
----------------------
be a binding agreement as of the date hereof and shall inure to the benefit of
the respective successors and permitted assigns of the parties hereto, shall
terminate upon the earlier to occur of (a) the termination of the Trust
Agreement, (b) the removal of the Market Agent by the Trustee in accordance with
the Trust Agreement or (c) 30 days after written notice of LBI's resignation as
Market Agent is delivered to the Trustee.
Section 5. Amendments. No amendment or waiver of any provision
----------
of this Agreement nor consent to any departure herefrom by any party hereto
shall in any event be effective unless the same shall be in writing and signed
by the party against which enforcement of such amendment or waiver or consent is
sought, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it is given.
Section 6. Notice Addresses. Except as otherwise expressly
----------------
provided herein, all notices and other communica- tions provided for hereunder
shall be deemed to have been duly given if sent by facsimile transmission (a) if
to the
2
<PAGE>
Market Agent, as set forth below and (b) if to the Trustee,
as set forth in the Trust Agreement;
If to LBI: Lehman Brothers Inc.
3 World Financial Center
New York, New York 10285
Attention: [ ]
------------
Facsimile: [ ]
------------
Telephone confirmation no.: [ ]
-----------
Section 7. Assignment. Except as provided in this Section 7,
----------
this Agreement may not be assigned by the Market Agent without the prior consent
of the Trustee in accordance with the Trust Agreement.
The Market Agent shall have the right to transfer and assign
all of its rights, duties, obligations and liabilities under this Agreement to
an Affiliate of the Market Agent; provided, however, that such transfer and
assignment shall be on the condition that the due and punctual performance and
observance of all the terms and conditions of this Agreement to be performed by
the Market Agent shall, by an agreement supplemental hereto, be assumed by such
Affiliate just as fully and effectually as if such Affiliate had been the
original party of the first part to this Agreement.
Section 8. Governing Law. This Agreement shall be construed in
-------------
accordance with the laws of the State of New York applicable to agreements made
and to be performed in such state (without reference to choice of law doctrine).
Section 9. Entire Agreement. This Agreement embodies the
----------------
entire agreement and understanding between LBI and the Trust and supersedes any
and all prior agreements and understandings between LBI and the Trust relating
to the subject matter hereof.
Section 10. Counterparts. This Agreement may be signed in any
------------
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
Section 11. Severability of Provisions. If one or more of the
--------------------------
provisions of this Agreement shall be for any reason whatsoever held invalid or
unenforceable, such provisions shall be deemed severable from the remaining
covenants, agreements and provisions of this Agreement and such invalidity or
unenforceability shall in no way affect the
3
<PAGE>
validity or enforceability of such remaining provisions or the rights of any
parties thereunder. To the extent permitted by law, the parties hereto hereby
waive any provision of law that renders any provision of this Agreement invalid
or unenforceable in any respect.
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Market Agent Agreement as of the day and year first above
written.
LEHMAN BROTHERS INC.
By: -------------------------------
Name: -------------------------
Title: -------------------------
Series [ ]
By: THE BANK OF NEW YORK, not
in its individual capacity but
solely as Trustee
By: ------------------------------
Name: ------------------------
Title: ------------------------
EXHIBIT 99.1
LEHMAN BROTHERS
------------------------------------
STRUCTURED CREDIT TRADING
- --------------------------------------------------------------------------------
Corporate Bond-Backed Certificates, Series 1998-ADM-1
03/19/98
Indicative Summary of Terms
---------------------------
Issuer: The Trust, which has been established under the
laws of New York by Lehman ABS Corporation for
the sole purpose of issuing the Certificates.
Certificates: Corporate Bond Backed Certificates, Series
1998-ADM-1 (the "Certificates"). The
Certificates will be offered in two classes,
Class A-1 and Class A-2 having the
characteristics described below. Each class of
Certificates represents an undivided beneficial
interest in certain distributions of the Trust,
and will be issued pursuant to the Trust
Agreement.
Underlying Securities: The sole assets of the Trust will be
$65,775,000 Archer Daniels Midland debentures
maturing December 15, 2097 (the "Underlying
Securities").
Ratings: Aa3/AA-
Face Amount: $65,775,000
Settlement Date: March 30, 1998
Trust Termination Date: December 15, 2017
On the Final Scheduled Distribution Date, the
Underlying Securities will be distributed pro
rata to the holders of the Class A-2
Certificates.
Effect of Default of In the event of default of the Underlying
Underlying Securities: Securities each class of the Certificates will
receive its respective share of the proceeds of
the Underlying Securities according to the
Allocation Ratio. The "Allocation Ratio" will
be the ratio of (a) for the Class A-1
Certificates the present value (discounted at a
rate of 6.861% per annum) of the interest
coupons of the Underlying Securities due or to
become due on or prior to the Final Scheduled
Distribution Date and (b) for the A-2
Certificates the present value of the scheduled
interest coupons and principal redemption of
the Underlying Securities after the Final
Scheduled Distribution Date (discounted at a
rate of 6.861 % per annum).
- --------------------------------------------------------------------------------
Clients are advised to make an independent review and reach their own
conclusions regarding the economic benefits and risks of this transaction,and
the legal, tax and accounting aspects of this transaction as it relates to their
particular circumstances, including without limitation, currently and
prospectively, proposed IRS regulations concerning debt instruments with
contingent payments. Although the indicative information set forth above is
reflective of the terms, as of the specified date, under which Lehman Brothers
believes an issuance of securities or other obligations might structured, no
assurance can be given that such an issuance could in fact be executed and no
specific issuer is obligated to issue such securities. This term sheet does not
constitute an offer to sell or the solicitation of an offer to buy securities of
the type generally described above. Actual offerings of securities of a
particular issuer are made, in accordance with applicable law, by prospectus or
other appropriate offering documents. The terms and conditions of this swap are
subject to availability, credit approval and documentation.
<PAGE>
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LEHMAN BROTHERS
--------------------------------------------
STRUCTURED CREDIT TRADING
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Class A-1 Corporate Bond-Backed Certificates, Series 1998-ADM-1
03/19/98
Indicative Summary of Terms
---------------------------
National Amount: $50,694,774
<TABLE>
<CAPTION>
Class A-1 Distributions:
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Date Cashflow Interest Principal Principal
(6.50%) Pay Down Outstanding on
Pay Date
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<S> <C> <C> <C> <C>
3/23/98 50,694,774
6/15/98 2,282,681 1,647,580 635,101 50,059,673
12/15/98 2,282,681 1,626,939 655,742 49,403,931
6/15/99 2,282,681 1,605,628 677,053 48,726,878
12/15/99 2,282,681 1,583,624 699,058 48,027,820
6/15/00 2,282,681 1,560,904 721,777 47,306,043
12/15/00 2,282,681 1,537,446 745,235 46,560,808
6/15/01 2,282,681 1,513,226 769,455 45,791,353
12/15/01 2,282,681 1,488,219 794,462 44,996,891
6/15/02 2,282,681 1,462,399 820,282 44,176,608
12/15/02 2,282,681 1,435,740 846,941 43,329,667
6/15/03 2,282,681 1,408,214 874,467 42,455,200
12/15/03 2,282,681 1,379,794 902,887 41,552,313
6/15/04 2,282,681 1,350,450 932,231 40,620,082
12/15/04 2,282,681 1,320,153 962,529 39,657,553
6/15/05 2,282,681 1,288,870 993,811 38,663,742
12/15/05 2,282,681 1,256,572 1,026,110 37,637,633
6/15/06 2,282,681 1,223,223 1,059,458 36,578,174
12/15/06 2,282,681 1,188,791 1,093,891 35,484,284
6/15/07 2,282,681 1,153,239 1,129,442 34,354,842
2/15/07 2,282,681 1,116,532 1,166,149 33,188,693
6/15/08 2,282,681 1,078,633 1,204,049 31,984,644
12/15/08 2,282,681 1,039,501 1,243,180 30,741,464
6/15/09 2,282,681 999,098 1,283,584 29,457,880
12/15/09 2,282,681 957,381 1,325,300 28,132,580
6/15/10 2,282,681 914,309 1,368,372 26,764,208
12/15/10 2,282,681 869,837 1,412,845 25,351,363
6/15/11 2,282,681 823,919 1,458,762 23,892,601
12/15/11 2,282,681 776,510 1,506,172 22,386,429
6/15/12 2,282,681 727,559 1,555,122 20,831,307
12/15/12 2,282,681 677,017 1,605,664 19,225,643
6/15/13 2,282,681 624,833 1,657,848 17,567,795
12/15/13 2,282,681 570,953 1,711,728 15,856,068
6/15/14 2,282,681 515,322 1,767,359 14,088,709
12/15/14 2,282,681 457,883 1,824,798 12,263,910
6/15/15 2,282,681 398,577 1,884,104 10,379,806
12/15/15 2,282,681 337,344 1,945,338 8,434,469
6/15/16 2,282,681 274,120 2,008,561 6,425,908
12/15/16 2,282,681 208,842 2,073,839 4,352,068
6/15/17 2,282,681 141,442 2,141,239 2,210,829
12/15/17 2,282,681 71,852 2,210,829 -
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</TABLE>
Coupon: 6.50%
Modified Duration: 7.66 (11 year bullet maturity equivalent)
Offering Yield: 10yr UST + [ ]
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Clients are advised to make an independent review and reach their own
conclusions regarding the economic benefits and risks of this transaction,and
the legal, tax and accounting aspects of this transaction as it relates to their
particular circumstances, including without limitation, currently and
prospectively, proposed IRS regulations concerning debt instruments with
contingent payments. Although the indicative information set forth above is
reflective of the terms, as of the specified date, under which Lehman Brothers
believes an issuance of securities or other obligations might structured, no
assurance can be given that such an issuance could in fact be executed and no
specific issuer is obligated to issue such securities. This term sheet does not
constitute an offer to sell or the solicitation of an offer to buy securities of
the type generally described above. Actual offerings of securities of a
particular issuer are made, in accordance with applicable law, by prospectus or
other appropriate offering documents. The terms and conditions of this swap are
subject to availability, credit approval and documentation.
