Exhibit 4.1
STRUCTURED ASSET TRUST UNIT REPACKAGINGS
(SATURNSSM)
- --------------------------------------------------------------------------------
STANDARD TERMS FOR TRUST AGREEMENTS
MS Structured Asset Corp.
(as Depositor)
and
LaSalle Bank National Association
(as Trustee)
- --------------------------------------------------------------------------------
March 4, 2003
TABLE OF CONTENTS
Page
----
ARTICLE I
Definitions; Construction
SECTION 1.01. Definitions.....................................................1
SECTION 1.02. Rules of Construction..........................................15
SECTION 1.03. Article and Section References.................................15
ARTICLE II
Declaration of Trust; Entry into Swap Agreement
SECTION 2.01. Creation and Declaration of Trust; Assignment of Underlying
Securities.....................................................15
SECTION 2.02. Entry into Swap Agreement and Other Agreements.................16
SECTION 2.03. Acceptance by Trustee..........................................16
SECTION 2.04. Representations and Warranties of the Depositor................17
SECTION 2.05. Breach of Representation or Warranty...........................18
SECTION 2.06. Agreement to Authenticate and Deliver Units....................18
ARTICLE III
Trust Powers; Administration of the Trust Property
SECTION 3.01. Trust Property.................................................18
SECTION 3.02. Administration of the Trust....................................19
SECTION 3.03. Collection of Certain Underlying Security Payments.............20
SECTION 3.04. Sale...........................................................20
SECTION 3.05. Unit Account...................................................20
SECTION 3.06. Investment of Funds in the Accounts............................23
SECTION 3.07 Retained Interest..............................................23
SECTION 3.08. Access to Certain Documentation................................24
ARTICLE IV
Distributions and Reports to Unitholders
SECTION 4.01. Distributions..................................................24
SECTION 4.02. Reports to Unitholders and Others..............................24
SECTION 4.03. Calculation of Interest Rates..................................26
SECTION 4.04. Compliance with Tax Reporting and Withholding Requirements.....27
SECTION 4.05. Preservation of Information, Communications to Holders.........27
ARTICLE V
The Units
SECTION 5.01. The Units......................................................28
SECTION 5.02. Execution, Authentication and Delivery.........................28
SECTION 5.03. Registration; Registration of Transfer and Exchange............29
SECTION 5.04. Mutilated, Destroyed, Lost and Stolen Units....................30
SECTION 5.05. Distributions in Respect of Units..............................30
SECTION 5.06. Persons Deemed Owners..........................................31
SECTION 5.07. Cancellation...................................................31
SECTION 5.08. Currency of Distributions in Respect of Units; Redenomination..31
SECTION 5.09. Appointment of Paying Agent....................................32
SECTION 5.10. Authenticating Agent...........................................32
SECTION 5.11. Issuance and Transfer Restrictions.............................33
SECTION 5.12. Optional Exchange..............................................36
SECTION 5.13. Callable Series................................................38
ARTICLE VI
The Depositor
SECTION 6.01. Liability of the Depositor.....................................38
SECTION 6.02. Limitation on Liability of the Depositor.......................38
SECTION 6.03. Depositor May Purchase Units...................................39
SECTION 6.04. Preparation and Filing of Exchange Act Reports; Obligations
of the Depositor...............................................39
ARTICLE VII
Rights of Unitholders
SECTION 7.01. Voting Rights with Respect to Underlying Securities............40
SECTION 7.02. Amendments and Waivers Under Swap Agreement and Guarantee......41
ARTICLE VIII
Default on Underlying Securities and Permitted Investments
SECTION 8.01. Realization Upon Default.......................................42
ARTICLE IX
Trust Wind-Up Events and Liquidation Events
SECTION 9.01. Liquidation Events.............................................42
SECTION 9.02. Trust Wind-Up Events...........................................43
SECTION 9.03. Expense Event..................................................44
SECTION 9.04. Special Depositor Wind-Up Event................................44
SECTION 9.05. Disposition of Trust Property..................................44
SECTION 9.06. Limitation on Notice Requirement...............................47
ARTICLE X
Concerning the Trustee
SECTION 10.01. Duties of Trustee.............................................48
SECTION 10.02. Certain Matters Affecting the Trustee.........................49
SECTION 10.03. Limitation on Liability of Trustee............................50
SECTION 10.04. Trustee May Own Units.........................................51
SECTION 10.05. Trustee Fees and Expenses; Limited Indemnification............51
SECTION 10.06. Eligibility Requirements for Trustee..........................52
SECTION 10.07. Resignation or Removal of the Trustee.........................52
SECTION 10.08. Successor Trustee.............................................53
SECTION 10.09. Merger or Consolidation of Trustee............................53
SECTION 10.10. Appointment of Co-Trustee.....................................54
SECTION 10.11. Appointment of Office or Agency...............................54
SECTION 10.12. Representations and Warranties of Trustee.....................55
SECTION 10.13. Limitation of Powers and Duties...............................56
SECTION 10.14. Preferential Collection of Claims Against the Trust...........56
ARTICLE XI
Termination
SECTION 11.01. Termination of the Trust......................................57
ARTICLE XII
Miscellaneous Terms
SECTION 12.01. Amendment of Trust Agreement; Waivers.........................57
SECTION 12.02. Counterparts..................................................59
SECTION 12.03. Limitation on Rights of Unitholders...........................59
SECTION 12.04. Governing Law.................................................59
SECTION 12.05. Notices.......................................................59
SECTION 12.06. Severability of Terms.........................................60
SECTION 12.07. Notice to Rating Agencies.....................................60
SECTION 12.08. Perfection of Swap Counterparty Security Interest.............60
SECTION 12.09. No Recourse...................................................60
SECTION 12.10. Non-Petition..................................................60
SECTION 12.11. Merger and Consolidation......................................61
SECTION 12.12. Conflict With Trust Indenture Act.............................61
EXHIBIT A Form of Trust Agreement
EXHIBIT B-1 Form of Registered Unit
STRUCTURED ASSET TRUST UNIT REPACKAGINGS
(SATURNSSM)
STANDARD TERMS FOR TRUST AGREEMENTS
LaSalle Bank National Association, as Trustee
MS Structured Asset Corp., as Depositor
These Standard Terms for Trust Agreements, dated March 4, 2003
("Standard Terms"), may be incorporated by reference in one or more Trust
Agreements (each a "Trust Agreement") relating to a particular series of
Structured Asset Trust Unit Repackagings (SATURNSSM) described in the Prospectus
dated March 4, 2003 and the applicable Prospectus Supplement. Any such Trust
Agreement may be in the form of Exhibit A hereto or such other form as MS
Structured Asset Corp. (the "Depositor") and the Trustee may approve, such
approval to be evidenced by their execution thereof. All terms defined herein
shall have meanings solely with respect to the particular Trust Agreement in
which these Standard Terms are incorporated. Incorporation of these Standard
Terms into a Trust Agreement is for convenience only to avoid the necessity of
physically including the Standard Terms in such Trust Agreement, and each trust
created by a Trust Agreement shall be a legally separate and distinct trust from
any other trust created by any other Trust Agreement into which these Standard
Terms may also be incorporated. These Standard Terms shall by themselves be of
no force and effect, and shall only have effect as and to the extent
incorporated by reference in a Trust Agreement. Execution hereof by the Trustee
and the Depositor is for purposes of identification only and the absence of such
execution shall not affect the validity of any Trust Agreement or these Standard
Terms to the extent incorporated therein. The Trust Agreement into which these
Standard Terms are incorporated by reference, including any Schedules thereto
and made a part thereof and these Standard Terms so incorporated by reference
therein, as amended, modified or supplemented from time to time, shall together
constitute a single Trust Agreement and are referred to herein as the "Trust
Agreement". In the event of a conflict between any Trust Agreement, including
the Schedules attached thereto, and these Standard Terms, the Trust Agreement
and such Schedules shall control. The expression herein that specific terms may
be supplemented, altered or otherwise changed by a Trust Agreement shall not be
construed to mean that other terms may not.
ARTICLE I
Definitions; Construction
SECTION 1.01. Definitions. Except as otherwise specified herein, the
applicable Trust Agreement or as the context may otherwise require, the
following terms have the respective meanings set forth below for all purposes of
these Standard Terms:
"25% Test": The restriction on Transfer of Units set forth in Section
5.11(c)(i).
"Account": As defined in Section 3.06.
"Affected Transaction": As defined in the Swap Agreement.
"Affected Underlying Securities": With respect to any Liquidation
Event, the Underlying Securities affected by an Underlying Security Default,
Disqualified Underlying Securities, or Underlying Securities related to a
Termination Event.
"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.
"Authenticating Agent": As defined in Section 5.10.
"Available Funds": With respect to any Distribution Date, (i) all
amounts received by the Trustee on or with respect to the Underlying Securities
or other Trust Property plus (ii) all investment income from Permitted
Investments plus (iii) all Swap Amounts, if any, paid to the Trustee by the Swap
Counterparty pursuant to the Swap Agreement, or by the Guarantor pursuant to the
Guarantee, minus (iv) all amounts paid or payable to the Swap Counterparty by
the Trustee pursuant to the Swap Agreement, minus (v) any amounts reimbursable
to the Trustee under Section 10.02(a)(ix), in each case on deposit in the Unit
Account, and available for distribution, on such Distribution Date.
"Benefit Plan Investor": Any (i) "employee benefit plan" (as defined in
Section 3(3) of ERISA), whether or not it is subject to the fiduciary
responsibility provisions of Title I of ERISA, including any U.S. governmental
plans and any foreign governmental or private pension plans, (ii) "plan"
described in Section 4975(e)(1) of the Code, or (iii) entity whose underlying
assets include plan assets by reason of a plan's investment in such entity or
otherwise.
"Book-Entry Unit": A Unit represented by a Global Security.
"Business Day": As specified in the Trust Agreement.
"Calculation Agent": As specified in the Trust Agreement, if any.
"Callable Series": A Series so designated in the Trust Agreement which
grants one or more specified persons the right to purchase all or a portion of
the Units of any given Series.
"Call Date": As defined in Section 5.13.
"Call Option": As specified in the Trust Agreement.
"Call Rights": A Call Option or other right specified in the Trust
Agreement.
"Call Price": As defined in Section 5.13.
"Clearstream": Clearstream Banking, S.A.
"Certificate": A certificate in the form attached as Exhibit B1,
evidencing a Registered Unit.
"Class": A separately denominated class of the Units of any Series,
entitled to specified distributions of the Trust Property.
"Closing Date": As specified in the Trust Agreement.
"Code": The Internal Revenue Code of 1986, as amended, and Treasury
Regulations promulgated thereunder.
"Commission": The Securities and Exchange Commission, or any successor
agency.
"Concentrated Underlying Security": Any Underlying Security that
constitutes 10% or more of the Trust Property. Unless the Trust Agreement shall
specify the method of determining whether an Underlying Security constitutes 10%
or more of the Trust Property, such determination will be based upon the
principal amount of the Underlying Securities.
"Corporate Trust Office": The Trustee's offices at 135 S. LaSalle
Street, Suite 1625, Chicago, Illinois 60603, Attention: Asset-Backed Securities
Trust Services Group-SATURNS, or such other addresses as the Trustee may
designate from time to time by notice to the Unitholders, the Depositor, the
Swap Counterparty and the Guarantor.
"Credit Support": With respect to any Series (or any Class within such
Series), any combination of insurance policies, letters of credit, reserve
accounts and other types of rights or assets designed to support or ensure the
servicing and distribution of amounts due in respect of the Trust Property,
which in each case is specified as such in the applicable Trust Agreement.
"Credit Support Provider": With respect to any Series (or any Class
within such Series), the bank issuing a letter of credit or the financial
guarantor or surety company issuing a financial guaranty or surety bond that
serves as Credit Support with respect to such Series or Class.
"Currency": Dollars or Foreign Currency.
"Definitive Registered Unit": A Registered Unit in definitive,
certificated form without coupons attached, registered in the name of the
beneficial owner thereof or its nominee.
"Depositary": DTC or, if so provided in the Trust Agreement, Euroclear
or Clearstream; or another depositary specified in the Trust Agreement.
"Depositor": MS Structured Asset Corp., a Delaware corporation, and any
of its successors or assigns.
"Depositor Order" or "Depositor Requests": A written order or request,
respectively, signed in the name of the Depositor by any of its Chief Executive
Officer, Chief Financial Officer, Chief Operating Officer, President, a Vice
President, its Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary and delivered to the Trustee.
"Disqualified Credit Support": Any Credit Support that has a value to
the Trust of 10% or more of the Trust Property if a Concentrated Underlying
Security of the related Credit Support Provider would be a Disqualified
Underlying Security.
"Disqualified Underlying Security": Unless otherwise specified in the
applicable Trust Agreement, an Underlying Security as to which the applicable
issuer of any Concentrated Underlying Security, other than a government security
has ceased to be an Eligible Underlying Security Issuer (other than due to a
reduction in the credit rating of the related underlying security or underlying
security issuer) and no additional means of providing current information
regarding that Underlying Security issuer is described in the applicable
prospectus supplement, and either (i) twelve months have elapsed, or (ii) the
applicable issuer has formally terminated its reporting obligations under the
Exchange Act, unless the Depositor, after discussion with the staff of the SEC,
determines that the Depositor would not be required to provide information with
respect to that Underlying Security issuer if the Trust continued to hold such
Underlying Security.
"Disqualified Transaction": Any Transaction under a Swap Agreement that
(i) has a value to the trust equal to 10% or more of the Trust Property if a
Concentrated Underlying Security of the related Swap Counterparty would be a
Disqualified Underlying Security, or (ii) is a credit swap transaction with a
notional amount on the date of formation of the Trust of 10% or more of the
Trust Property if a Concentrated Underlying Security of the related Reference
Entity would be a Disqualified Underlying Security.
"Distribution Agreement": The agreement between each Distribution
Participant and the Depositor, relating to the distribution of the Units.
"Distribution Date": As specified in the Trust Agreement.
"Distribution Participant": Each Person acting as underwriter, dealer,
placement agent or any similar capacity in connection with the initial
distribution of the Units.
"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.
"DTC": The Depository Trust Company, a limited purpose trust company
organized under the laws of the State of New York, its successors and assigns.
"Early Termination Date": As defined in the Swap Agreement.
"Eligible Account": A non-interest bearing account, held in the United
States, in the name of the Trustee for the benefit of the Trust that is either
(i) a segregated account or segregated accounts maintained with a Federal or
State chartered depository institution or trust company the short-term and
long-term unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding
company, the short-term and long-term unsecured debt obligations of such holding
company) are rated P-1 and Aa2 by Moody's, A-1+ and AA by S&P, and, if rated by
Fitch, F1 and AA by Fitch at the time any amounts are held on deposit therein
including when such amounts are initially deposited and all times subsequent or
(ii) a segregated trust account or segregated accounts maintained as a
segregated account or as segregated accounts and held by the Trustee in its
Corporate Trust Office in trust for the benefit of the Unitholders.
"Eligible Underlying Security": A designated security or pool of
securities that:
(i) were registered under the Securities Act, otherwise publicly
issued, or are eligible for resale pursuant to Rule 144(k) under the Securities
Act, and have been purchased by the depositor or one or more of its affiliates
and deposited with the trust.
(ii) consist of one or more of the following issued under the laws of
the United States, any U.S. State or any foreign jurisdiction:
(A) debt obligations or investment grade term preferred stock
issued or issued and guaranteed by one or more corporations, general or limited
partnerships, limited liability companies, business trusts, banking
organizations or insurance companies or other organizations (for purposes of the
definition of Underlying Securities, "Corporate Debt");
(B) equipment trust certificates, including enhanced equipment
trust certificates and pass-through equipment trust certificates (for purposes
of the definition of Underlying Securities, "Equipment Trust Certificates");
(C) trust preferred capital securities and other similar
preferred securities of one or more trusts or other special purpose legal
entities (for purposes of the definition of Underlying Securities, "Trust
Preferred Capital Securities");
(D) asset-backed securities of one or more trusts or other
special purpose legal entities issued pursuant to a registration statement filed
with the SEC on Form S-3 or any successor to such form (for purposes of the
definition of Underlying Securities, "Asset Backed Securities");
(E) an obligation issued or guaranteed by an Eligible
Sovereign or any agency or instrumentality thereof for the payment of which the
full faith and credit of the Eligible Sovereign is pledged, where Eligible
Sovereigns include the United States of America, the Republic of France, the
Federal Republic of Germany and the states thereof, the United Kingdom, Canada
and the provinces thereof, Japan, the Kingdom of Belgium, the Kingdom of the
Netherlands, the Republic of Italy and any other sovereign specified in the
Trust Agreement;
(F) the obligations of one or more of the following government
sponsored enterprises ("GSEs"): Federal National Mortgage Association, Federal
Home Loan Mortgage Corporation, Student Loan Marketing Association, Resolution
Funding Corporation, Federal Home Loan Banks (to the extent such obligations
represent the joint and several obligations of the twelve Federal Home Loan
Banks), Tennessee Valley Authority, Federal Farm Credit Banks and any other
government sponsored enterprise specified in the Trust Agreement that, at the
time of the offering of the Units, has outstanding securities held by
non-affiliates with an aggregate market value of at least $75,000,000 and that
makes information publicly available comparable to that of Exchange Act
reporting companies;
(G) certificates evidencing undivided fractional interests in
a trust, the assets of which consist of promissory notes (the "GTC Notes"),
payable in U.S. Dollars, of a certain foreign government, backed a full faith
and credit guaranty issued by the United States of America, acting through the
Defense Security Assistance Agency of the Department of Defense, of the due and
punctual payment of 90% of all payments of principal and interest due on the GTC
Notes and a security interest in collateral, consisting of non-callable
securities issued or guaranteed by the United States government thereof,
sufficient to pay the remaining 10% of all payments of principal and interest
due on the GTC Notes; or
(H) an obligation issued by the International Bank for
Reconstruction and Development, the Inter-American Development Bank, the Asian
Development Bank, the African Development Bank, the International Finance
Corporation or the European Bank for Reconstruction and Development, or another
multilateral development bank that has a comparable volume of outstanding
securities and files with the SEC comparable publicly available information, and
the securities of which are exempted from registration under the Securities Act;
(iii) with respect to a Concentrated Underlying Security that is
Corporate Debt, a Trust Preferred Capital Security or an Equipment Trust
Certificate, the Depositor must reasonably believe that one of the following
additional conditions is met:
(A) the issuer is eligible to use SEC Form S-3 or F-3 for a
primary offering of common equity or an offering of non-convertible investment
grade securities; or
(B) the underlying securities are guaranteed by a direct or
indirect parent company of the issuer, or a subsidiary of the issuer or the
issuer's direct or indirect parent company; and
(1) the issuer, guaranteeing parent company or
guaranteeing subsidiary of the parent company is
eligible to use SEC Form S-3 or F-3 for a primary
offering of common equity or an offering of
non-convertible investment grade securities, and
(2) the issuer or the relevant parent company's periodic
reports meet the requirements of Rule 3-10 of
Regulation S-X promulgated by the SEC.
In the case of Trust Preferred Capital Securities or Equipment Trust
Certificates, the issuer of the obligation held by, or supporting the issuance
of, the trust or other special purpose legal entity issuing the Trust Preferred
Capital Securities or Equipment Trust Certificates which may be deemed to be the
issuer for the foregoing purposes.
(iv) If a Concentrated Underlying Security is an Asset-Backed Security,
the Depositor must reasonably believe that the related issuer has at least
$75,000,000 in outstanding securities held by non-affiliates and that either:
(A) the related issuer will be subject to the reporting
requirements of the Exchange Act, or
(B) the related issuer was subject to the reporting
requirements of the Exchange Act and the Trust undertakes to provide copies to
investors of the payment date reports and other reports provided by such issuer
to the Trust, and such payment date reports and other reports provided by the
related issuer to the Trust are comparable to the regular reports of issuers of
asset-backed securities that file regular reports under the Exchange Act.
(v) were purchased by the Depositor or one or more of its affiliates in
the secondary market (either directly or through an affiliate of the Depositor)
and if the Depositor or any of its affiliates acted as an underwriter or
placement agent with respect to such Underlying Security, three months have
elapsed since the related allotment and any unsold allotment have been sold out;
unless such Underlying Securities are designated "Primary Offering Securities"
in the applicable Trust Agreement and no such Underlying Security exceeds 7.5%
of Trust Property.
"Eligible Underlying Security Issuer": The related issuer of each
Underlying Security that satisfies the definition of Eligible Underlying
Security.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended, including any successor or amendatory statutes.
"Euroclear": Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear System
"Event of Default": As specified in the Swap Agreement.
"Excess Expense Event": As defined in Section 9.03(a).
"Exchange Act": The Securities Exchange Act of 1934, as amended.
"Exchange Rate Agent": Unless otherwise specified in the Trust
Agreement, MS&Co. or an Affiliate or agent of MS&Co. designated by MS&Co..
"Executive Officer": With respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, President,
any Vice President, the Secretary, any Assistant Secretary, the Treasurer or any
Assistant Treasurer of such corporation; with respect to any partnership, any
general partner thereof.
"Extraordinary Trust Expense": As defined in Section 10.05(b).
"Fitch": Fitch Ratings Inc.
"Foreign Currency": A currency issued by the government of any country
other than the United States or a composite currency the value of which is
determined by reference to the values of the currencies of any group of
countries.
"Global Security": A Certificate in global form deposited with or on
behalf of DTC or other depository specified in the Trust Agreement and, in the
case of a Registered Unit, registered in the name of the DTC, such depository or
its nominee.
"Guaranty": The Guaranty (if any) identified in the Trust Agreement of
the obligations of the Swap Counterparty under the Swap Agreement. If the Trust
Agreement does not specify a Guaranty, references to the Guaranty and the
Guarantor herein shall be deemed deleted.
"Guarantor": The Guarantor who issues and is identified in the
Guarantee (if a Guarantee is identified in the Trust Agreement), and, if a
successor Person shall have become the Guarantor pursuant to the Guarantee,
"Guarantor" shall mean such successor Person.
"Independent": When used with respect to any specified Person means
that the Person (1) is in fact independent of the Depositor, the Swap
Counterparty and the Guarantor and of any Affiliate of any of the foregoing
Persons, (2) does not have any direct or indirect financial interest in the
Depositor, the Swap Counterparty or the Guarantor, or in any Affiliate of any of
the foregoing Persons which is material with respect to such Person and (3) is
not connected with the Depositor, the Swap Counterparty or the Guarantor, as an
officer, employee, promoter, partner, director or person performing similar
functions.
"Initial Swap Rate Accrual Period": The period from and including the
Closing Date to but excluding the next Swap Payment Date.
"Initial Underlying Security Accrual Period": The period from and
including the Closing Date to but excluding the next Underlying Security Payment
Date.
"Insolvency Law": As defined in Section 12.09.
"Interest Rate": As specified in the Trust Agreement.
"Investment Company Act": The United States Investment Company Act of
1940, as amended, and applicable rules thereunder.
"Liquidation Event": Any of the events described in Section 9.01.
"Maximum Reimbursable Amount": As specified in the Trust Agreement (or
any other amount specified by the party agreeing to indemnify the Trustee).
"Moody's": Moody's Investors Service, Inc.
"MS&Co.": Morgan Stanley & Co. Incorporated.
"No Plan Restriction": The restriction on transfer of Units set forth
in Section 5.11(c)(iii).
"Notional Amount": A notional amount specified in the Trust Agreement
with respect to any Class of Units with respect to which distributions of
interest or other distributions are determined but which does not represent a
Unit Principal Balance.
"Officers' Certificate": A certificate signed by any one (or, if
specified in the Trust Agreement, more than one) Executive Officer of the
applicable Person, and delivered to the Trustee.
"Opinion of Counsel": A written opinion of counsel, who may, except as
otherwise expressly provided in the Trust Agreement, be counsel for the
Depositor, acceptable to the Trustee.
"Optional Exchange Date": As defined in Section 5.12.
"Outstanding": As of any date of determination, all Units theretofore
authenticated and delivered under the Trust Agreement, except:
(i) Units theretofore canceled by the Unit Registrar or delivered to
the Trustee for cancellation; and
(ii) Units in exchange for or in lieu of which other Units have been
authenticated and delivered pursuant to the Trust Agreement, unless proof
satisfactory to the Trustee is presented that any such Units are held by a bona
fide purchaser in whose hands such Units represent interests in the Trust.
"Paying Agent": As defined in Section 5.09.
"Permitted Investments": All investments made by the Trustee pursuant
to Section 3.05 in any one or more of the following; provided, however, that the
total return specified by the terms of each such obligation or security is at
least equal to the purchase price thereof; and provided, further, that each such
obligation or security shall be held in the name of the Trustee on behalf of the
Trust:
(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 explicitly
backed by the full faith and credit of the United States of America; provided
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 Permitted Investments only if, at the time, and during
the course, of investment, it has at least the credit rating of P-1 or Aaa by
Moody's, A-1+ or AAA by S&P, and, if rated by Fitch, D-1+ or AAA by Fitch;
(ii) demand and time deposits in, certificates of deposit of, or
banker's acceptances issued by any depository institution or trust company
(including the Trustee or any agent of the Trustee acting in their respective
commercial capacities) incorporated under the laws of the United States or any
State and subject to supervision and examination by Federal and/or State banking
authorities so long as the commercial paper and/or the short-term debt
obligations of such depository institution or trust company at the time of, and
during the course of, such investment or contractual commitment providing for
such investment have at least the credit rating of P-1 or Aaa by Moody's, A-l or
AAA by S&P, and, if rated by Fitch, F1 or AAA by Fitch (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 have a credit rating of P-1 or Aaa by Moody's, A-1+ or AAA by S&P, and,
if rated by Fitch, Fl+ or AAA by Fitch;
(iii) commercial paper having a maturity of not more than 180 days and
having at the time, and during the course, of such investment at least the
credit rating of P-1 by Moody's, A-1+ by S&P, and, if rated by Fitch, Fl+ by
Fitch;
(iv) 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
of P-1 or Aaa by Moody's, A-1+ or AAA by S&P, and, if rated by Fitch, F1+ or AAA
by Fitch. Copies of any repurchase agreement entered into will be delivered to
the Rating Agencies, if any; and
(v) Units of the Dreyfus Cash Management Fund Investor Shares or any
other money market funds which are rated in the highest applicable rating
category by each Rating Agency (or such lower rating if the Rating Agency
Condition is satisfied).
In no event shall a Permitted Investment at any time constitute (a) a
swap agreement as defined in the United States Bankruptcy Code, 11 U.S.C. ss.
101 et seq., (b) an interest-only or principal-only security or (c) a liability
of the Trust in excess of the principal amount invested by the Trustee.
Permitted Investments shall include, without limitation, those investments for
which the Trustee or an Affiliate of the Trustee provides services.
"Person": Any individual, corporation, partnership, joint venture,
association, joint stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or political subdivision
thereof.
"Plan": Any (i) "employee benefit plan" (as defined in Section 3(3) of
ERISA) subject to the fiduciary responsibility provisions of Title I of ERISA,
(ii) "plan" described in Section 4975(e)(1) of the Code subject to Section 4975
of the Code or (iii) entity whose underlying assets include plan assets by
reason of a plan's investment in such entity or otherwise.
"Predecessor Unit": With respect to any particular Unit, every previous
Unit evidencing all or a portion of the same interest as that evidenced by such
particular Unit; and, for the purpose of this definition, any Unit authenticated
and delivered under Section 5.04 in lieu of a lost, destroyed or stolen Unit
shall be deemed to evidence the same interest as the lost, destroyed or stolen
Unit.
"Proceeding": Any suit in equity, action at law or other judicial or
administrative proceeding.
"Prohibited Transaction Exemption Restriction": The restriction on
Transfer of Units set forth in Section 5.11(c)(ii).
"Rating Agencies": As specified in the Trust Agreement.
"Rating Agencies Condition": With respect to any specified action or
determination, means receipt of (i) written confirmation by Moody's (for so long
as the Units are outstanding and rated by Moody's) and (ii) written confirmation
by S&P (for so long as the Units are outstanding and rated by S&P), that such
specified action or determination will not result in the reduction or withdrawal
of their then-current ratings on the Units; provided, however, that if the
Rating Agency Condition specified herein is to be satisfied only with respect to
Moody's or S&P, only clause (i) or clause (ii) shall be applicable. Such
satisfaction may relate either to a specified transaction or may be a
confirmation with respect to any future transactions which comply with generally
applicable conditions published by the applicable rating agency.
"Record Date": As specified in the Trust Agreement.
"Redenomination Date": As specified in Section 5.08.
"Reference Entity": As specified in the Trust Agreement.
"Registered Unit": Any Unit in registered form ownership of which is
evidenced by the Unit Register.
"Responsible Officer": With respect to the Trustee, any officer within
the Corporate Trust Office of the Trustee, including any Vice President,
Assistant Vice President, Secretary, Assistant Secretary or any other officer of
the Trustee customarily performing functions similar to those performed by any
of the above designated officers and also, with respect to a particular matter,
any other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
"Retained Interest": If applicable, with respect to any Underlying
Security or other Trust Property, an ownership interest therein and a right to a
portion of the payments thereon by the obligor thereof, as specified in the
Trust Agreement, held by the Person so specified in such Trust Agreement.
"S&P": Standard & Poor's, a division of The McGraw-Hill Companies, Inc.
"Scheduled Final Distribution Date": As specified in the Trust
Agreement.
"SEC": The United States Securities and Exchange Commission.
"Securities Act": The Securities Act of 1933, as amended.
"Securities Intermediary": LaSalle Bank National Association acting in
the capacity as a securities intermediary hereunder.
"Selling Agent": Unless otherwise specified in the Trust Agreement,
MS&Co. or any Affiliate of MS&Co. designated by it.
"Series": All of the Units issued by a particular Trust.
"Special Depositor Wind-Up Event": As defined in Section 9.04.
"Specified Currency": Unless otherwise specified in the Trust
Agreement, United States Dollars.
"Specified Percentage": 66 2/3%, or such higher percentage of Units of
any class or series as is specified in the Trust Agreement.
"State": Any one of the 50 states of the United States or the District
of Columbia.
"Swap Agreement": The ISDA Master Agreement (including the Schedule
thereto and Confirmation or Confirmations thereunder and any ISDA Credit Support
Annex forming a part thereof), if any, to which the Trust is a party identified
in the Trust Agreement. In the event that the Trust shall enter into more than
one ISDA Master Agreement, "Swap Agreement" shall mean each such ISDA Master
Agreement specified in the Trust Agreement.
"Swap Amount": With respect to each Swap Payment Date, an amount,
payable by, or on behalf of, the Swap Counterparty, equal to the accrued
interest or other payment obligation calculated with reference to the Swap
Notional Amount for the immediately preceding Swap Rate Accrual Period at the
Swap Rate.
"Swap Calculation Agent": The "Calculation Agent" as defined in the
Swap Agreement.
"Swap Counterparty": Morgan Stanley Capital Services, Inc., unless
another Person is identified in the Trust Agreement as the counterparty of the
Trust under the Swap Agreement; unless a successor Person shall have become the
Swap Counterparty pursuant to the applicable terms of the Swap Agreement,
whether by assignment or otherwise, and thereafter "Swap Counterparty" shall
mean such Person. In the event that the Trust shall enter into more than one
Swap Agreement, "Swap Counterparty" shall mean each counterparty of the Trust
specified in the Trust Agreement.
"Swap Default": The occurrence of an "Event of Default" (as defined in
the Swap Agreement) under the Swap Agreement.
"Swap Notional Amount": As specified in the Trust Agreement.
"Swap Payment Date": As specified in the Trust Agreement.
"Swap Rate": As specified in the Trust Agreement.
"Swap Rate Accrual Period": The Initial Swap Rate Accrual Period and
each period from and including a Swap Payment Date to but excluding the next
succeeding Swap Payment Date.
"Termination Event": As defined in the Swap Agreement.
"Swap Termination Payment": Any amounts payable under the Swap
Agreement in accordance with its terms, whether to or by the Trust, as the case
may be, in consequence of an early termination of one or more Transactions under
the Swap Agreement.
"Trust Agreement": The schedule or schedules (which may be in the form
of Schedules I, II and III attached to Exhibit A hereto) which contains
information with respect to the particular terms of the Units, as well as the
Swap Agreement, the Underlying Securities and any other Trust Property.
"TIA": The Trust Indenture Act of 1939, as amended.
"Transaction": As defined in the Swap Agreement.
"Transfer": To sell, convey, assign, transfer, create, grant a lien
upon and a security interest in and right of setoff against, deposit, set over,
contribute and confirm to the Trustee pursuant to the Trust Agreement; and the
terms "Transferred" and "Transferring" have the meanings correlative to the
foregoing. A Transfer of any Underlying Securities or of any other instrument
shall include all rights, powers and options (but none of the obligations) of
the Transferring party thereunder, including the first priority 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 Transferring party or
otherwise, and generally to do and receive anything that the Transferring party
is or may be entitled to do or receive thereunder or with respect thereto.
"Trigger Amount": As specified in the Trust Agreement.
"Trust": The trust created by the Trust Agreement.
"Trust Agreement": As defined in the preamble hereto.
"Trust Property": As defined in Section 3.01.
"Trust Wind-up Event": As defined in Section 9.02.
"Trustee": LaSalle Bank National Association, a national banking
association, or any co-trustee appointed pursuant to Section 10.10, until a
successor Person shall have become the Trustee pursuant to the applicable terms
of the Trust Agreement, and thereafter "Trustee" shall mean such successor
Person.
"Trustee Fee Letter": A letter agreement between the Trustee and the
Depositor dated on or before the Closing Date setting forth the fees and
expenses of the Trust and the Trustee which are subject to reimbursement by the
Depositor.
"Trustee Fees": The amount or amounts set forth in the Trustee Fee
Letter.
"UCC": 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.
"Underlying Securities": As specified in the Trust Agreement.
"Underlying Security Accrual Period": The Initial Underlying Security
Accrual Period and each period from and including a Underlying Security Payment
Date to but excluding the next succeeding Underlying Security Payment Date.
"Underlying Security Issuance Agreement": The indenture, fiscal agency
agreement, or other agreement with respect to a Underlying Security which sets
forth the covenants and agreements of the Underlying Security Issuer in
connection with issuance of the Underlying Security.
"Underlying Security Amount": With respect to each Underlying Security
Payment Date, an amount equal to the accrued interest and/or other payment
obligation calculated with reference to the applicable Underlying Security for
the immediately preceding applicable Underlying Security Accrual Period at the
applicable Underlying Security Rate.
"Underlying Security Default": Unless otherwise specified in the Trust
Agreement, (i) the acceleration of the outstanding Underlying Securities under
the terms of the Underlying Securities and/or the applicable Underlying Security
Issuance Agreement and failure to pay the accelerated amount on the acceleration
date; (ii) the failure of the Underlying Security Issuer (or any applicable
guarantor on its behalf) to pay an installment of principal of, or any amount of
interest due on, the Underlying Securities after the due date thereof and after
the expiration of any applicable grace period; (iii) the initiation by the
Underlying Security Issuer or applicable guarantor of any proceedings seeking a
judgment of insolvency or bankruptcy or seeking relief under bankruptcy or
insolvency laws or similar laws affecting creditor's rights; (iv) if not
otherwise addressed in (iii), the passage of thirty (30) calendar days since the
day upon which any person or entity initiates any proceedings against the
Underlying Security Issuer or applicable guarantor seeking a judgment of
insolvency or bankruptcy or seeking relief under bankruptcy or insolvency laws
or similar laws affecting creditor's rights and such proceeding has not been
dismissed prior to such thirtieth day; or (v) other events specified in the
Trust Agreement.
"Underlying Security Issuer": As specified in the Trust Agreement.
"Underlying Security Payment Date": As specified in the Trust
Agreement.
"Underlying Security Rate": As specified in the Trust Agreement.
"Underlying Security Trustee": As specified in the Trust Agreement, if
applicable.
"Unit Account": As defined in Section 3.05.
"Unit Principal Balance": With respect to a Unit that is Outstanding,
as determined at any time, the maximum amount that the Holder thereof is
entitled to receive as distributions allocable to principal payments on the
Underlying Securities.
"Unit Register" and "Unit Registrar": As respectively defined in
Section 5.03.
"Unitholder" and "Holder": In the case of Registered Units, the Person
in whose name a Unit is registered in the Unit Register on the applicable Record
Date.
"Units": The securities authorized by, and authenticated and delivered
under, the Trust Agreement and evidenced by a certificate in the form or forms
attached hereto as Exhibit B.
"United States": The United States of America (including the States and
the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction.
"Warrant": A Call Option or other right specified in the Trust
Agreement.
"U.S. Person": A citizen or resident of the United States, a
corporation, partnership or other entity created or organized in or under the
laws of the United States or any political subdivision thereof, an estate the
income of which is subject to United States federal income taxation regardless
of its source or a trust if (i) a U.S. court is able to exercise primary
supervision over the trust's administration and (ii) one or more U.S. persons
have the authority to control all of the trust's substantial decisions.
Certain additional defined terms have the meanings assigned thereto in other
terms hereof.
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 the Trust Agreement as a whole and not to any particular
Article, section or other subdivision;
(v) "including" means including without limitations; and
(vi) words in the singular include the plural and words in the plural
include the singular.
SECTION 1.03. Article and Section References. All article and section
references used in the Trust Agreement, unless otherwise provided, are to
articles and sections in the Trust Agreement. Any reference to "this Section"
appearing within a particular paragraph of a section is a reference to such
section as a whole.
ARTICLE II
Declaration of Trust; Entry into Swap Agreement;
Issuance of Units
SECTION 2.01. Creation and Declaration of Trust; Assignment of
Underlying Securities. (a) The Depositor, concurrently with the execution and
delivery of the Trust Agreement, Transfers to the Trustee, in trust, on behalf
and for the benefit of the Unitholders and without recourse, all the right,
title and interest of the Depositor, including any security interest therein,
in, to and under (i) the Underlying Securities, (ii) the Unit Account, including
all income from the investment of funds in the Unit Account, (iii) all payments
on or under and all proceeds of any of the foregoing (including all proceeds of
the conversion thereof, voluntary or involuntary, into cash or other liquid
property, all cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, insurance proceeds,
condemnation awards, causes of action, rights to payment of any and every kind
and other forms of obligations, receivables, instruments and other property
which at any time constitute all or part of or are included in the proceeds of
any of the foregoing) and (iv) all other assets included or to be included in
the Trust Property; in each case except for any specified Retained Interest.
(b) In connection with the Transfer referred to in the preceding
paragraph, the Depositor shall, not later than the Closing Date, (i) deposit the
Underlying Securities with the Trustee by physical delivery of such Underlying
Securities, duly endorsed, to the Trustee, its nominee or in blank or cause the
Underlying Securities to be registered by book-entry in the name of the Trustee
provided that the book-entry depositary will be an agency of the United States,
DTC or another book-entry institution acceptable to the Depositor and (ii) with
respect to each such Underlying Security, deliver or cause to be delivered to
the Trustee all documents necessary to transfer such Underlying Security to the
Trustee.
(c) The Guarantor shall deliver the Guarantee to the Trustee for the
benefit of the Unitholders.
(d) The Transfer of the Underlying Securities by the Depositor
accomplished by the Trust Agreement is absolute (other than with respect to any
Retained Interest) and is intended by the parties thereto as a sale as further
provided in Section 3.03.
SECTION 2.02. Entry into Swap Agreement and Other Agreements.
Concurrently with the execution of the Trust Agreement, the Trust shall (i)
execute and deliver the Swap Agreement and each Transaction thereunder, if any,
(ii) accept the Guarantee and (iii) enter into each other Agreement specified in
the Trust Agreement, including, without limitation, agreements evidencing or
ancillary to any Call Option, any repurchase agreement, and any expense
administration agreement. It shall be a condition to the effectiveness of the
Trust Agreement that the Swap Agreement be effective as of the date of the Trust
Agreement. The Trustee shall, on behalf of the Trust, perform the obligations of
the Trust under the Swap Agreement in accordance with its terms and shall make
demands under the Guarantee immediately upon obtaining notice of a payment
default under the Swap Agreement by the Swap Counterparty. The Trustee and the
Depositor agree, and each Unitholder by acquiring its Units shall be deemed to
agree, that the Swap Agreement does not represent an ownership interest in the
Trust or its assets and that none of them shall treat the Swap Agreement as an
ownership interest for the Trust for any purpose. Except as expressly set forth
in this Trust Agreement and in the Swap Agreement, the receipt by the Trustee of
the Underlying Securities and the execution by the Trustee of the Swap Agreement
shall not constitute and is not intended to result in an assumption by the
Trustee or any Unitholder of any obligation of the issuer of the Underlying
Securities or the Swap Counterparty or any other Person in connection with the
Underlying Securities or the Swap Agreement or under any agreements or
instruments relating to any of them.
SECTION 2.03. Acceptance by Trustee. The Trustee will acknowledge
receipt by it of (i) the Underlying Securities and the related documents
referred to in Section 2.01, now existing or hereafter acquired, (ii) the Swap
Agreement, (iii) the Guarantee and (iv) the documents specified in the Swap
Agreement, and declares that it will hold such assets and all other assets
comprising the Trust Property in trust, for the exclusive use and benefit of all
present and future Unitholders and for the purposes and subject to the terms and
conditions set forth in the Trust Agreement, including the Trustee's
obligations, as and when they may arise, (I) to pay any amount due from the
Trust under the Swap Agreement, which obligations shall be and hereby are
designated to be secured, under the terms of the Swap Agreement, by a pledge of
all of the Trust Property, (II) to pay Extraordinary Trust Expenses and (III) to
make distributions to the Unitholders in accordance with Section 4.01.
SECTION 2.04. Representations and Warranties of the Depositor. The
Depositor represents and warrants to the Trustee that as of the Closing Date or
as of such other date otherwise specifically provided in the Trust Agreement:
(i) the Depositor is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware;
(ii) to the Depositor's knowledge after the inquiry, there are not any
liens or encumbrances on the Underlying Securities immediately prior to the time
of Transfer except those created by the Trust Agreement;
(iii) the execution and delivery of the Trust Agreement by the
Depositor and its performance of and compliance with the terms thereof 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 by which the Depositor or any of its assets is bound;
(iv) to the Depositor's knowledge after due inquiry, the Depositor has
the full power and authority to enter into and consummate all transactions
contemplated by the Trust Agreement, has duly authorized the execution, delivery
and performance of the Trust Agreement and has duly executed and delivered the
Trust Agreement. The 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 thereof, 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 in a proceeding in equity or at law); and
(v) to the Depositor's knowledge after due inquiry, the Depositor is
not in violation, and the execution and delivery of the Trust Agreement by the
Depositor and its performance and compliance with the terms of the Trust
Agreement will not constitute a violation, of any order decree of any court or
any order or regulation of any Federal, State, municipal or governmental agency
having jurisdiction over the Depositor or its properties, which violation would
reasonably be expected to have a material and adverse effect on the duties and
obligations of the Depositor under the Trust Agreement.
It is understood and agreed that the representations and warranties of
the Depositor set forth in this Section shall survive delivery of the respective
documents to the Trustee and shall inure to the benefit of the Trustee on behalf
of the Unitholders notwithstanding any restrictive or qualified endorsement or
assignment. Upon discovery by any of the Depositor, the Guarantor, or the
Trustee of a breach of any of the foregoing representations and warranties which
materially and adversely affects the interests of the Unitholders, the party
discovering such breach shall give prompt written notice thereof to the other
parties.
SECTION 2.05. Breach of Representation or Warranty. Upon 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 2.04 that
materially and adversely affects the rights of the Unitholders to receive
distributions under the Trust Agreement when due and payable, the Depositor
shall notify the Rating Agencies of such breach. The Depositor shall cure such
breach in all material respects within two Business Days of the earlier of
discovery by the Depositor or receipt of notice by the Depositor of such breach.
SECTION 2.06. Agreement to Authenticate and Deliver Units. The Trustee
agrees and acknowledges that it will, concurrently with the Transfer to and
receipt by it of the Underlying Securities and the Guarantee and delivery to it
by the Depositor of the executed Trust Agreement and by the Swap Counterparty of
the executed Swap Agreement, cause to be executed, authenticated and delivered
to or upon the order of the Depositor, in exchange for the Underlying Securities
and such other assets constituting the Trust Property, cash in an amount equal
to the premium or other net payments to the Trust on the Closing Date under any
Swap Agreement and Units duly executed and authenticated by or on behalf of the
Trustee in authorized denominations evidencing ownership of the entire Trust
Property, all in accordance with the terms and subject to the conditions of
Section 5.02.
ARTICLE III
Trust Powers; Administration of the Trust Property
SECTION 3.01. Trust Property. (a) The "Trust Property" with respect to
a Trust will consist of: (i) the related Underlying Securities and all payments
on or collections in respect of such Underlying Securities due after a specified
"Cut-off Date" set forth in the Trust Agreement; (ii) all the Trustee's right,
title and interest under any Swap Agreement and any related Guarantee; (iii) all
the Trustee's right, title and interest in any related Credit Support, if any;
(iv) all Permitted Investments and all funds from time to time deposited in
certain segregated accounts held by the Trustee in trust and for the benefit of
the Unitholders representing interests in such Trust; and (v) any other asset
described in the Trust Agreement as constituting a portion of such Trust
Property, in each case exclusive of any Retained Interest.
(b) The Trust Property for a given Series of Units and the related
Trust will not constitute Trust Property for any other Series of Units and the
related Trust and the Units of each Class of a given Series possess an equal and
ratable undivided ownership interest in such Trust Property. The Trust Agreement
may, however, specify that certain assets constituting a part of the Trust
Property relating to any given Series may be beneficially owned solely by or
deposited solely for the benefit of one Class or a group of Classes within such
Series. In such event, the other Classes of such Series will not possess any
beneficial ownership interest in those specified assets constituting a part of
the Trust Property.
SECTION 3.02. Administration of the Trust. (a) The Trustee shall
administer the Trust Property for the benefit of the Unitholders. In engaging in
such activities, the Trustee shall follow or cause to be followed collection
procedures in accordance with the terms of the Trust Agreement, the Underlying
Securities, the Swap Agreement, the indemnification offered by the Depositor
pursuant to Section 10.05(b) and the Guarantee. The duties of the Trustee shall
be performed in accordance with applicable local, State and Federal law.
(b) Subject to Article X, the Trustee is hereby authorized to perform,
and from time to time hereafter, shall perform only those acts which are
described in the Trust Agreement as obligations of the Trustee. Notwithstanding
the generality of the foregoing, the Trustee is hereby specifically authorized
to do the following on behalf of the Trust: to issue the Certificates evidencing
Units; to execute and deliver and perform its obligations and exercise its
rights under the Swap Agreement; to establish and maintain the Unit Account
hereunder; to accept delivery of the Underlying Securities and the Swap
Agreement; to pledge the assets of the Trust (including the Underlying
Securities) to secure the obligations of the Trust including obligations under
the Swap Agreement; to sell the Underlying Securities through the Selling Agent
in accordance with Section 9.05; to make Permitted Investments pursuant to
Section 3.06; to liquidate the Trust pursuant to Article IX and to make
distributions pursuant to Article IV.
(c) Notwithstanding anything to the contrary herein, the Trust shall
not engage in any business or activities other than receiving the Underlying
Securities and any Credit Support or other Trust Property and entering into the
Swap Agreement as provided herein, holding the Underlying Securities, the Swap
Agreement and any Credit Support (or other Trust Property), issuing Certificates
evidencing Units, making Permitted Investments in accordance with Section 3.06
and performing its obligations hereunder and under the Swap Agreement; provided,
however, that during its existence the Trust shall not engage in any business or
activity which will cause it to be or become an open-end investment company,
unit investment trust or face-amount certificate company that is or is required
to be registered under Section 8 of the Investment Company Act, or to be or
become a closed-end investment company required to be registered, but not
registered, under the Investment Company Act.
(d) The Trustee shall not sell, assign, pledge or otherwise transfer
the Underlying Securities, the Swap Agreement, any Credit Support or other Trust
Property, or any interest of the Trust therein, to any Person or Persons, except
to a successor trustee as provided in Section 10.07, through the Selling Agent
in accordance with Section 9.05, in accordance with Section 10.02(a)(x), as
required under any Swap Agreement or as otherwise expressly permitted hereunder.
This section shall not be construed to prohibit transfers of the Units.
(e) The Trustee shall have the legal power to exercise all of the
rights, powers and privileges of holders of the Underlying Securities in which
the Units evidence an interest; provided, however, that the exercise of such
powers shall be subject to the provisions of this Section 3.02, Article X and
the other provisions hereof. However, neither the Trustee (except as
specifically provided herein or in the TIA) nor the Depositor shall be under any
obligation whatsoever to appear in, prosecute or defend any action, suit or
other proceeding in respect of Underlying Securities or Units.
(f) Except for actions expressly authorized by the Trust Agreement, the
Trustee shall not take actions reasonably likely to (nor fail to take actions,
if such failure would be reasonably likely to) (i) impair the interests of the
Trust in any Underlying Security, any Credit Support, the Swap Agreement or the
Guarantee (or any other Trust Property); (ii) impair the value of any Underlying
Security, any Credit Support, the Swap Agreement or the Guarantee (or any other
Trust Property); or (iii) alter the classification of a Trust for U.S. federal
income tax purposes.
(g) Except as expressly provided in the Trust Agreement, the Trustee
shall have no power to vary the corpus of the Trust Property including by (i)
accepting any substitute obligation or asset for a Underlying Security or any
Credit Support, (ii) entering into any amendment or modification of the Swap
Agreement or the Underlying Securities, (iii) accepting any substitute guarantee
for the Guarantee, (iv) adding any other investment, obligation or security to
the Trust Property, (v) withdrawing from the Trust Property any Underlying
Securities or Credit Support, (vi) terminating the Swap Agreement except in
accordance with its terms or (vii) rejecting or otherwise failing to accept the
continuing benefits of the Guarantee.
SECTION 3.03. Collection of Certain Underlying Security Payments. 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 the Trust Agreement and such Underlying Securities.
SECTION 3.04. Sale. The parties hereto agree and intend that the
Transfer of Underlying Securities, the Swap Agreement and all proceeds of any of
the foregoing shall be treated as a sale and purchase by the Trust and not a
loan or a pledge to secure a loan. If for any reason such Transfer is deemed to
be a loan or a pledge to secure a loan, the parties intend that the Trust
Agreement shall be a security agreement pursuant to which there shall be deemed
to have been granted to the Trustee a security interest in all right, title and
interest in the Underlying Securities, the Swap Agreement and all proceeds of
any of the Trust Property granted in favor of the Swap Counterparty pursuant to
the Swap Agreement and to the obligation of the Trust to pay Extraordinary Trust
Expenses. If the Trust terminates prior to the satisfaction of the claims of any
Unitholder under any Unit, the security interest created hereby shall continue
in full force and effect and the Trustee shall be deemed to be the collateral
agent for the benefit of such Unitholder, subject to the prior security interest
of the Swap Counterparty under the Swap Agreement and to the terms of the Trust
Agreement.
SECTION 3.05. Unit Account. (a) The Trustee shall establish and
maintain one or more Eligible Accounts (collectively, the "Unit Account"), held
in trust for the benefit of the Unitholders and, subject to any security
interest in the Trust Property granted in favor of the Swap Counterparty
pursuant to the Swap Agreement and the obligation of the Trust to pay
Extraordinary Trust Expenses. The Trustee, on behalf of the Unitholders, shall
possess all right, title and interest in all funds on deposit from time to time
in the Unit Account and in all proceeds thereof, subject to any security
interest in the Trust Property granted in favor of the Swap Counterparty
pursuant to the Swap Agreement and the obligation of the Trust to pay
Extraordinary Trust Expenses. The Unit Account shall be under the sole dominion
and control of the Trustee. The Trustee shall deposit or cause to be deposited
in the Unit Account all amounts collected with respect to the Underlying
Securities, Swap Agreement and the Guarantee including:
(i) all payments received by the Trustee on account of principal
of the Underlying Securities;
(ii) all payments received by the Trustee on account of interest
(if any) on the Underlying Securities;
(iii) all payments received by the Trustee on account of premium
(if any) on the Underlying Securities;
(iv) all Swap Amounts and all other payments, (if any) received
by the Trustee on account of the Swap Agreement;
(v) the Unit Principal Balance, if applicable;
(vi) all payments received by the Trustee on account of the
Guarantee; and
(vii) it is understood and agreed that payments in the nature of
prepayment or redemption penalties, late payment charges or
assumption fees which may be received by the Trustee shall be
deposited by the Trustee in the Unit Account and shall not be
retained by the Trustee for its own account.
If, at any time, a formerly Eligible Account no longer fulfills
the definition of Eligible Account, the Trustee shall within five
Business Days or by the next Distribution Date, whichever comes
earlier, establish a new Unit Account meeting the conditions
specified above and transfer any cash and any investments on
deposit in the Unit Account to such new Unit Account, and from
the date such new Unit Account is established, it shall be the
Unit Account.
(b) The Trustee shall give notice to the Depositor and the Rating
Agencies of the location of each Eligible Account constituting the Unit Account
prior to any change thereof.
(c) Additional Representations of the Trustee and the Securities
Intermediary:
(i) The Unit Account is a "securities account" within the meaning
of Section 8-501 of the UCC and is held only in the name of the
Trust. The Securities Intermediary is acting with respect to the
Unit Account in the capacity of a "securities intermediary"
within the meaning of Section 8-102(a)(l4) of the UCC.
(ii) All Underlying Securities have been (i) delivered to the
Securities Intermediary pursuant to the Trust Agreements; (ii)
credited to the Unit Account; and (iii) registered in the name of
the Securities Intermediary or its nominee, indorsed to the
Securities Intermediary or in blank or credited to another
securities account maintained in the name of the Securities
Intermediary. In no case will any Underlying Securities or other
financial asset credited to a Unit Account be registered in the
name of the Depositor, payable to the order of the Depositor or
specially indorsed to the Depositor except to the extent the
foregoing have been specially indorsed to the Securities
Intermediary or in blank.
(iii) The Unit Account is an account to which financial assets
are or may be credited, and the Securities Intermediary shall
treat the Trustee as entitled to exercise the rights that
comprise any financial asset credited to the account.
(iv) The Securities Intermediary hereby agrees that the
Underlying Securities credited to the Unit Account shall be
treated as a "financial asset" within the meaning of Section
8-l02(a)(9) of the UCC.
(v) If at any time the Securities Intermediary shall receive any
order from the Trustee directing the transfer or redemption of
any Underlying Securities on deposit in any Unit Account, the
Securities Intermediary shall comply with such entitlement order
without further consent by the Depositor or any other Person. The
Securities Intermediary shall take all instructions (including
without limitation all notifications and entitlement orders) with
respect to each Unit Account solely from the Trustee.
(d) The Securities Intermediary hereby confirms and agrees that:
(i) There are no other agreements entered into between the
Securities Intermediary and the Depositor with respect to any
Unit Account;
(ii) It has not entered into, and until the termination of this
Agreement will not enter into, any agreement with any other
Person relating to any Unit Account and/or any financial assets
credited thereto pursuant to which it has agreed to comply with
entitlement orders (as defined in Section 8-l02(a)(8) of the UCC)
of such other Person; and
(iii) It has not entered into, and until the termination of the
Trust Agreements will not enter into, any agreement with the
Depositor or the Trustee purporting to limit or condition the
obligation of the Securities Intermediary to comply with
entitlement orders as set forth above
(e) The Trustee hereby represents and warrants as follows:
(i) The Trustee maintains its books and records with respect to
its securities accounts in the State of Illinois; and
(ii) The Trustee has not granted any lien on the Underlying
Securities nor are the Underlying Securities subject to any lien
on properties of the Trustee in its individual capacity; the
Trustee has no actual knowledge and has not received actual
notice of any lien on the Underlying Securities (other than any
liens of the Trustee in favor of the beneficiaries of the Trust
Agreements); other than the interests of the Unitholders and the
potential interests of the Call Option holders, the books and
records of the Trustee do not identify any Person as having an
interest in the Underlying Securities.
(iii) The Trustee makes no representation as to (i) the validity,
legality, sufficiency or enforceability of any of the Underlying
Securities or (ii) the collectability, insurability,
effectiveness or suitability of any of the Underlying Securities.
(f) The Depositor hereby represents and warrants to the Trustee as
follows with respect to the Closing Date:
(i) Immediately prior to the transfer of the Underlying
Securities to the applicable Trust, the Depositor owned and had
good and marketable title to the Underlying Securities free and
clear of any lien, claim or encumbrance of any Person.
(ii) The Depositor has received all consents and approvals
required by the terms of the Underlying Securities to the
transfer to the Trustee of its interest and rights in the
Underlying Securities as contemplated by the Trust Agreements.
(iii) The Depositor has not assigned, pledged, sold, granted a
security interest in or otherwise conveyed any interest in the
Underlying Securities (or, if any such interest has been
assigned, pledged or otherwise encumbered, it has been released),
except such interests granted pursuant to the Trust Agreements.
The Depositor has not authorized the filing of and is not aware
of any financing statements against the Depositor that includes a
description of the Underlying Securities, other than any such
filings pursuant to the Trust Agreements. The Depositor is not
aware of any judgment or tax lien filings against Depositor.
SECTION 3.06. Investment of Funds in the Accounts. The Depositor, on
behalf of the Trust, may direct in writing the Trustee or any depositary
institution maintaining the Unit Account, if any, and any other segregated
account the contents of which are held for the benefit of the Trust (each, an
"Account") to invest the funds therein in one or more Permitted Investments
bearing interest or sold at a discount, which shall be held to maturity unless
payable on demand. If the Depositor does not provide any investment directions
to the Trustee, then the Trustee shall invest funds held in any Account in the
Permitted Investments specified in clause (i) of the definition thereof upon
receipt of such funds. Such funds shall be invested in Permitted Investments
that will mature at least one Business Day prior to the next Distribution Date.
SECTION 3.07. Retained Interest. The Retained Interest, if any, in any
Underlying Security or other Trust Property shall initially be held by the
Person so specified in the Trust Agreement and to the extent specified therein.
The Retained Interest will be established on an asset-by-asset basis. With
respect to each Underlying Security, unless otherwise specified in the Trust
Agreement, the Retained Interest shall be deducted by the Trustee from
applicable collections in respect of such Underlying Security or other Trust
Property. Unless otherwise provided in the Trust Agreement, collections in
respect of Retained Interest shall not be deposited in the Unit Account and
shall not constitute a part of the Trust, but shall instead be distributed to
the holder of such Retained Interest; provided, however, that the Trust
Agreement with respect to which there is a Retained Interest may provide that
commingled amounts received in respect of Underlying Securities and the related
Retained Interest may initially be deposited in separate and discrete accounts
established by the Trustee.
SECTION 3.08. Access to Certain Documentation. The Trustee shall
provide to any Federal, State or local regulatory authority that may exercise
authority over the Depositor, the Swap Counterparty, the Guarantor or any
Unitholder access to the documentation regarding the Underlying Securities, the
Swap Agreement and the Guarantee 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,
the Swap Agreement and the Guarantee will be provided to the Depositor, the Swap
Counterparty, the Guarantor or any Unitholder upon reasonable request during
normal business hours at the offices of the Trustee designated by it at the
expense of the Person requesting such access.
ARTICLE IV
Distributions and Reports to Unitholders
SECTION 4.01. Distributions. On each Distribution Date for the Units
(including the Scheduled Final Distribution Date), the Trustee shall distribute
the pro rata portion of the Available Funds in the Unit Account allocable to
each Unitholder.
SECTION 4.02. Reports to Unitholders and Others. (a) Unless otherwise
specified in the applicable Trust Agreement, on each Distribution Date the
Trustee shall forward or cause to be forwarded or made available to the
Depositor, each Rating Agency, if any, each Swap Counterparty, each holder of
Call Rights, and each Unitholder a statement setting forth:
(i) the amount of such distribution to Unitholders allocable to
principal of or interest or premium, if any, on the Units;
(ii) if applicable, the Interest Rate applicable to such
Distribution Date and the amount of any scheduled payment of
principal applicable to such Distribution Date;
(iii) the aggregate stated principal amount of the Underlying
Securities as of the Distribution Date and, if applicable, the
interest rate applicable to the Underlying Securities for the
Underlying Security Accrual Period therefor next beginning;
(iv) the amount received by the Trustee on the related Underlying
Securities for the Underlying Security Accrual Period therefor
last ended;
(v) the amounts of and the recipients of any payments under the
Swap Agreement for the Swap Rate Accrual Period last ended;
(vi) if applicable and feasible, the new Swap Rate applicable to
the Swap Rate Accrual Period next beginning;
(vii) the aggregate Unit Principal Balance (or Notional Amount,
if applicable) at the close of business on such Distribution
Date;
(viii) if the ratings of the Units or the underlying securities
are specified in the applicable prospectus supplement, the
current ratings of the Units or the underlying securities, as
applicable, if different from the ratings provided in the
prospectus supplement and the names of the rating agencies that
assigned such ratings;
(ix) the cumulative amount of Extraordinary Trust Expense, if
any, as of that Distribution Date;
(x) with respect to any Trust having Trust Property which
includes Credit Support, any change in the available amount of
each element of Credit Support; and
(xi) any additional information relevant to the Unitholders as
specified in the Trust Agreement.
In the case of information furnished pursuant to clause (i) above, any
amount shall be expressed as a Dollar amount (or the equivalent thereof in any
other Specified Currency) per minimum denomination of Units or for such other
specified portion thereof.
The Trustee will file a copy of such report with the SEC on Form 8-K
within the time limits prescribed by such form, otherwise in compliance with SEC
rules applicable to the trust, or as otherwise advised by counsel.
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 Unitholder a statement containing the information set forth
in clause (i) above, aggregated for such calendar year or the applicable portion
thereof during which such Person was a Unitholder which statement shall contain
sufficient information to allow Unitholders to calculate their U.S. federal
income tax liability with respect to the Units. Such obligation of the Trustee
shall be deemed to have been satisfied to the extent that substantially
comparable information shall have been provided by the Trustee pursuant to any
requirements of the Code as are from time to time in effect.
(b) At any time when the Trust is not subject to Section 13 or
15(d) of the Exchange Act, upon request to the Trustee by a Unitholder or a
prospective purchaser from a Unitholder of the information required by Rule
144A(d)(4)(i) of the Securities Act, the Trustee shall promptly notify the
Depositor of such request, and the Depositor shall promptly thereafter provide
such information to the Trustee, and the Trustee shall furnish such information
to such Unitholder or prospective purchaser, provided, that for purposes of this
Section 4.02(b), the information required by Rule 144A(d)(4)(i) shall be as
interpreted in Release No. 33-6862, Part D, i.e., basic, material information
concerning the structure of the Trust, the Units and distributions in respect
thereof, and the nature and performance of the Underlying Securities, the Swap
Agreement and any other assets of the Trust.
(c) The Trustee will deliver to Unitholders, each Swap
Counterparty and any Credit Support Provider copies of all notices and
communications it receives from each Underlying Security Issuer within three (3)
Business Days of receipt, including notice of any redemption of or self-tender
for the Underlying Securities by the Underlying Security Issuer. The Trustee
will also notify the Unitholders of any exercise of any call rights with respect
to the Underlying Securities by a Swap Counterparty under the terms of a Swap
Agreement.
(d) If so specified in the Trust Agreement commencing on a certain
date and on or before a specified date in each year thereafter, a firm of
independent public accountants will furnish a statement to the Trustee to the
effect that such firm has examined certain documents and records relating to the
administration of the Trust Property during the related 12-month period (or, in
the case of the first such report, the period ending on or before the date
specified in the Trust Agreement, which date shall not be more than one year
after the related original issue date with respect to such Units) and that, on
the basis of certain agreed upon procedures considered appropriate under the
circumstances, such firm is of the opinion that such administration was
conducted in compliance with the terms of the Trust Agreement, except for such
exceptions as such firm shall believe to be immaterial and such other exceptions
and qualifications as shall be set forth in such report.
The Trust Agreement may also provide for delivery to the Depositor, on
or before a specified date in each year, of an annual statement signed by two
officers of the Trustee to the effect that the Trustee has fulfilled its
obligations under the Trust Agreement throughout the preceding year with respect
to any Series of Units. Copies of the annual accountants' statement, if any, and
the statement of officers of the Trustee may be obtained by Unitholders without
charge upon written request to the Trustee.
(e) If the Trust Agreement provides the Units are subject to the
right of one or more specified Persons to purchase all or a portion of the Units
of a given Series (a "Call Option") and designates such Series a "Callable
Series," then after receiving notice of the exercise of such a call right, the
Trustee will provide notice thereof as provided in the Trust Agreement. The
Trustee and the Depositor agree, and each Unitholder by acquiring its Units
shall be deemed to agree, that the Call Option does not represent an ownership
interest in the Trust or its assets and that none of them shall treat the Call
Option as an ownership interest in the Trust for any purpose.
(f) If required by TIA Section 313(a), within 60 days after
December 31 of each year, the Trustee shall mail to (i) each Unitholder as
required by TIA Section 313(c) and (ii) the Depositor, a brief report dated as
of such date that complies with TIA Section 313(a). The Trustee also shall
comply with TIA Section 313(b). A copy of any report delivered pursuant to this
Section 4.02(f) shall, at the time of its mailing to Unitholders and the
Depositor, be filed by the Trustee with the Commission and each stock exchange,
if any, on which the Units are listed. The Depositor shall notify the Trustee if
and when the Units are listed on any stock exchange.
SECTION 4.03. Calculation of Interest Rates. Unless otherwise specified
in the Trust Agreement, the Interest Rate applicable to the Units will be the
equivalent floating rate applicable to payments received by the Trust under any
related Swap Agreement (as determined by the Swap Calculation Agent) or under
the Underlying Securities. If the Trust Agreement specifies a Calculation Agent,
the Calculation Agent shall calculate the Interest Rate applicable to the Units
from time to time as specified in the Trust Agreement. All determinations of
interest by the Calculation Agent hereunder shall, in the absence of manifest
error, be conclusive for all purposes and binding on the holders of Units. Each
of the protections, releases, indemnities and other terms applicable to the
Trustee under Section 10.01, 10.02, 10.03 and 10.05 shall apply to the
Calculation Agent in connection with its actions as Calculation Agent for the
Trust.
SECTION 4.04. Compliance with Tax Reporting and Withholding
Requirements. Unless otherwise specified in the Trust Agreement, the Trustee
shall file or cause to be filed, within the time limits established by law,
federal and state income tax returns and information statements as a grantor
trust for each of Trust's taxable years. The Trust's taxable year shall be the
calendar year. Notwithstanding any other provision of the Trust Agreement to the
contrary, the Trustee shall comply with all Federal withholding requirements
respecting distributions to, or receipts of amounts on behalf of, Unitholders
and pursuant to the Swap Agreement that the Trustee reasonably believes are
applicable under the Code. The consent of Unitholders shall not be required for
such withholding. In the event the Trustee does withhold any amount from
interest or original issue discount distributions thereof to any Unitholder
pursuant to Federal withholding requirements, the Trustee shall indicate in the
statement required pursuant to Section 4.02 the amount so withheld.
SECTION 4.05. Preservation of Information, Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Unitholders contained in the most
recent list furnished to the Trustee and the names and addresses of Unitholders
received by the Trustee in its capacity as Unit Registrar. The Trustee may
destroy any list furnished to it as provided upon receipt of a new list.
(b) Unitholders shall have the right to communicate pursuant to TIA
Section 312(b) with other Unitholders with respect to their rights under this
Agreement or under the Certificates.
(c) Irrespective of whether the TIA shall apply to this Agreement, the
Depositor, the Trustee, the Paying Agent and the Unit Registrar shall have the
protections provided pursuant to TIA Section 312(c).
ARTICLE V
The Units
SECTION 5.01. The Units. (a) The Units may be issued in the form of and
be represented by definitive certificates substantially in the form of Exhibit
B1 hereto (a "Certificate") or by one or more Global Securities. Unless
otherwise specified in the applicable Trust Agreement, Units initially offered
for sale pursuant to an effective registration statement under the Securities
Act will be issued in denominations of $25 and in integral multiples of $25 in
excess thereof. Unless otherwise specified in the applicable Trust Agreement,
Units initially offered pursuant to an exemption from the registration
requirements of the Securities Act will be issued in denominations of $100,000
and in integral multiples of $1,000 in excess thereof. The authorized
denomination of Units having a Specified Currency other than U.S. dollars will
be set forth in the applicable Trust Agreement. All Units of the same Class
shall be identical in all respects except for the denominations thereof. All
Units issued under the Trust Agreement shall be in all respects equally and
ratably entitled to the benefits thereof without preference, priority or
distinction on account of the actual time or times of authentication and
delivery, all in accordance with the Trust Agreement. No additional interests in
the Trust other than the Units shall be issued hereunder, except in accordance
with Section 5.04. The Units in the aggregate may be subject, to the extent
provided in the Trust Agreement, to Call Option.
(b) The Units issued under a Trust Agreement may be limited to a single
class, or, if so specified in the Trust Agreement, a Series of Units may include
two or more Classes differing as to entitlement to distributions of principal,
interest or premium and one or more Classes may be subordinated in certain
respects to other Classes of such Series with respect to allocation of losses
arising from any defaults with respect to the Trust Property.
Each Series and Class of Units may be issued as Registered Units in
definitive form or as one or more Global Securities. Unless otherwise specified
in the Trust Agreement, all Units of a given Series (or, if more than one Class
exists, any given Class within that Series) will, upon issuance, be represented
by one or more Global Securities that will be deposited with, or on behalf of,
DTC, Euroclear, Clearstream, or another Depositary. Global Securities may be
issued in either registered or bearer form and in either temporary or permanent
form. Global Securities representing Registered Units will be registered in the
name of a nominee of the Depositary, and will clear and settle in book-entry
form only through the facilities of one or more Depositaries. Unless and until
it is exchanged in whole or in part for the individual Units represented
thereby, a Global Security may not be transferred except as a whole by the
Depositary for such Global Security to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a successor of such
Depositary or a nominee of such successor.
SECTION 5.02. Execution, Authentication and Delivery. (a) The Units
shall be executed on behalf of the Trust by the Trustee by a Responsible
Officer. The signature of any Responsible Officer may be manual or facsimile.
Units bearing the manual or facsimile signature of individuals who were at any
time Responsible Officers shall be binding, notwithstanding that such
individuals or any of them have ceased to be a Responsible Officer prior to the
authentication and delivery of such Units or were not Responsible Officers at
the date of such Units.
(b) The Trustee shall not be required to authenticate any Units if the
issuance of such Units pursuant to the Trust Agreement will adversely affect the
Trustee's own rights, duties or immunities under the Trust Agreement.
(c) Each Unit shall be dated as of the date of its authentication.
(d) Subject to Section 5.10(c), no Unit shall be entitled to any
benefit under the Trust Agreement or be valid or obligatory for any purpose,
unless there appears on such Unit a certificate of authentication substantially
in the form as contained in the form of Unit attached to the Trust Agreement as
Exhibit B1 executed by the Trustee by the manual signature of one of its
Responsible Officers, and such certificate upon any Unit shall be conclusive
evidence, and the only evidence, that such Unit has been duly authenticated and
delivered under the Trust Agreement and is entitled to the benefits of the Trust
Agreement. Any Unit duly authenticated and delivered to the Depositor under the
Trust Agreement shall be fully paid and non-assessable for all purposes.
SECTION 5.03. Registration; Registration of Transfer and Exchange. (a)
The Trustee shall cause to be kept a register for Registered Units (the
registers maintained in such office and in any other office or agency of the
Trustee from which distributions are made being herein sometimes collectively
referred to as the "Unit Register") in which, subject to such reasonable
regulations as it may prescribe, a transfer agent and registrar (which may be
the Trustee) (the "Unit Registrar") shall provide for the registration of
Registered Units and the registration of transfers and exchanges of Registered
Units. The Trustee is hereby initially appointed Unit Registrar for the purpose
of registering Registered Units and transfers and exchanges of Registered Units
as herein provided and the Trustee shall remain Unit Registrar for such purposes
until the earlier to occur of (i) the appointment by the Depositor of a
different Unit Registrar, (ii) the resignation or termination of the Trustee and
appointment of a successor trustee in accordance with Section 10.07, in which
case such successor trustee shall assume the duties of Unit Registrar and (iii)
the termination of the Trust and discharge of the Trustee's obligations under
the Trust Agreement in accordance with the applicable terms of Articles IX and
XI; provided, however, that the Trustee may appoint one or more Co-Unit
Registrars. Upon any resignation of any Unit Registrar appointed by the
Depositor pursuant to clause (i) above, the Trustee shall promptly appoint a
successor or, in the absence of such appointment, assume the duties of Unit
Registrar.
Upon (i) the appointment by the Depositor of a Person other than the
Trustee as Unit Registrar, (ii) the appointment of any Co-Unit Registrar or
(iii) any change in the identity of the Unit Registrar or any Co-Unit Registrar,
the Depositor will in each case give each of the Trustee and each Rating Agency,
if any, written notice within three Business Days of any such appointment or
change and of the location, and any change in the location, of the Unit
Register, and the Trustee shall have the right to rely upon a certificate
executed on behalf of the Unit Registrar by an Executive Officer thereof as to
the names and addresses of the Holders of the Registered Units and the principal
amounts and numbers of such Registered Units.
Upon surrender for registration of transfer of any Registered Unit 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 Trustee's satisfaction, and subject
to the transfer restrictions set forth in Section 5.11 hereof, the Trustee shall
execute, authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Registered Units of any authorized denominations,
of a like aggregate Unit Principal Balance. All transfers of Registered Units
are subject to the approval of the Trustee and the Trustee shall not register
any transfer of Registered Units if such transfer would violate any provision of
the Trust Agreement.
(b) At the option of the Holder, Registered Units may be exchanged for
other Registered Units of any authorized denomination or denominations of like
tenor and aggregate Unit Principal Balance upon surrender of the Registered
Units to be exchanged at the office or agency of the Trustee maintained for such
purpose. Whenever any Registered Units are so surrendered for exchange, the
Trustee shall execute, authenticate and deliver the Registered Units that the
Holder making the exchange is entitled to receive.
All Registered Units issued upon any registration of transfer or
exchange of Units shall constitute complete and indefeasible evidence of
ownership in the Trust Property and be entitled to the same benefits under the
Trust Agreement as the Units surrendered upon such registration of transfer or
exchange.
(c) Every Registered Unit presented or surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Unit
Registrar, duly executed, by the Holder thereof or his attorney duly authorized
in writing, with such signature guaranteed by a commercial bank or trust company
located, or having a correspondent located, in The City of New York or the city
in which the Corporate Trust Office is located, or by a member firm of a
national securities exchange, and such other documents as the Trustee may
require.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Units, but the Trustee may require payment by the
Holders 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
Units.
SECTION 5.04. Mutilated, Destroyed, Lost and Stolen Units. If (i) any
mutilated Unit is presented to the Depositor and the Trustee or (ii) the
Depositor and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Unit, and there is delivered to the Depositor
and the Trustee such security or indemnity as they may require to save each of
them and any Paying Agent harmless, and neither the Depositor nor the Trustee
receives notice that such Unit has been acquired by a protected purchaser or
other bona fide purchaser, then, in each case, the Trustee, shall execute,
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Unit, a new Unit of like tenor, form, terms and
principal amount, bearing a number not contemporaneously Outstanding, so that
neither gain nor loss in interest shall result from such exchange or
substitution.
Upon the issuance of any new Unit under this Section, the Trustee may
require the payment by the Holder 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 Unit issued pursuant to this Section shall constitute
complete and indefeasible evidence of ownership in the Trust Property, whether
or not the destroyed, lost or stolen Unit shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of the Trust Agreement equally
and proportionately with any and all other Units, if any, duly issued
thereunder.
The terms 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 Units.
SECTION 5.05. Distributions in Respect of Units. (a) Any per Unit
amount in respect of a Registered Unit that is payable and is punctually paid or
duly provided for on any Distribution Date or any other date shall be
distributed to the Person in whose name such Registered Unit (or one or more
Predecessor Units) is registered at the close of business on the related Record
Date notwithstanding the cancellation of such Registered Unit upon any transfer
or exchange subsequent to such related Record Date. Distributions on Registered
Units shall be made, in accordance with arrangements satisfactory to the
Trustee, by wire transfer to an account designated in writing by a Holder, or,
in the case of distributions of Underlying Securities in kind, by delivery of
such Underlying Securities to any DTC or other depositary account designated in
writing by a Holder, or, if such arrangements with respect to any Holder are not
so made no later than 15 calendar days prior to the applicable Distribution
Date, at the Corporate Trust Office (with respect to the final distribution and
distributions in kind of Underlying Securities) or by check mailed to the
address of the Person entitled thereto as such address shall appear in the Unit
Register.
(b) Subject to the foregoing terms of this Section, each Unit delivered
under the Trust Agreement upon transfer of or in exchange for or in lieu of any
other Unit shall carry the rights to amounts to be distributed that are accrued
and undistributed, and to accrue, that were carried by such other Unit.
SECTION 5.06. Persons Deemed Owners. Subject to Section 5.05 and except
for the final distribution, the Depositor and the Trustee and any agent of the
Depositor or the Trustee may treat the Person in whose name any Registered Unit
is registered as the owner of such Unit on the related Record Date for the
purpose of receiving distributions of principal of (and premium, if any) and
(subject to Section 5.05) interest, if any, on such Unit and for all other
purposes whatsoever, whether or not such Unit 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 such 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 Unit.
SECTION 5.07. Cancellation. All Units surrendered for payment,
redemption, transfer or exchange shall, if surrendered to any Person other than
the Trustee, be delivered to the Trustee and shall be promptly canceled by it.
No Units shall be authenticated in lieu of or in exchange for any Units canceled
as provided in this Section, except as expressly permitted by the Trust
Agreement.
SECTION 5.08. Currency of Distributions in Respect of Units;
Redenomination. (a) Except as provided in (b) below, distributions of the
principal of (and premium and interest, if any) on the Units will be made in the
Specified Currency.
(b) Except as set forth below or unless otherwise provided in the Trust
Agreement, if distributions in respect of a Unit are required to be made in a
Specified Currency other than U.S. dollars and such currency is unavailable due
to the imposition of exchange controls or other circumstances beyond the control
of the Depositor or the Trustee or their respective Affiliates, or is no longer
used by the government of the country issuing such currency or for the
settlement of transactions by public institutions of or within the international
banking community, then all distributions in respect of such Unit shall be made
at a time and in a manner determined by the Exchange Rate Agent in its sole
discretion, which may be in the Specified Currency at such time as such currency
is again available or so used or in such other currency and at such rates as the
Exchange Rate Agent shall determine.
Each of the protections, releases, indemnities and other terms
applicable to the Trustee under Section 10.01, 10.02, 10.03 and 10.05 shall
apply to the Exchange Rate Agent in connection with its actions as Exchange Rate
Agent for the Trust.
SECTION 5.09. Appointment of Paying Agent. (a) The Trustee may appoint
one or more paying agents (each, a "Paying Agent") with respect to the Units.
Any such Paying Agent shall be authorized to make distributions to Unitholders
pursuant to the Trust Agreement and shall report the amounts of such
distributions to the Trustee. The Trustee may remove the Paying Agent if the
Trustee determines in its sole discretion that the Paying Agent shall have
failed to perform its obligations under the Trust Agreement in any material
respect or if the Paying Agent fails to satisfy the eligibility requirements set
forth in paragraph (b) of this Section. The Paying Agent shall initially be the
Trustee and any co-paying agent chosen by the Depositor and acceptable to the
Trustee. Any Paying Agent shall be permitted to resign as Paying Agent upon 30
days' written 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 and shall provide written notice of such appointment to the Rating
Agencies, if any. The Trustee shall cause each such Paying Agent to execute and
deliver to the Trustee an instrument in which such Paying Agent shall agree with
the Trustee that it will hold all sums, if any, held by it for distribution to
the Unitholders in an Eligible Account in trust for the benefit of the
Unitholders entitled thereto until such sums shall be distributed to such
Unitholders. The Paying Agent shall return all. unclaimed funds to the Trustee
within two years from the time such funds were first eligible to be claimed and
promptly upon removal shall also return all funds in its possession to the
Trustee.
(b) The Paying Agent shall at all times be a corporation or an
association, the combined capital and surplus of which is at least $50,000,000
and the long-term debt obligations of which are rated in one of the four highest
categories assigned long-term debt obligations by each of the Rating Agencies,
and is subject to supervision of examination by Federal or State authority. If
such corporation or association publishes reports of conditions at least
annually, pursuant to combined capital and surplus of such corporation or
association shall be deemed to be its combined capital and surplus as set forth
in its most recent report of conditions so published. In the event that at any
time the Paying Agent shall cease to be eligible in accordance with the terms of
this paragraph, the Paying Agent shall release all Trust Property to the Trustee
and then resign immediately. Upon such resignation, the Trustee shall act as
Paying Agent until the appointment of a successor Paying Agent in accordance
with paragraph (c) of this Section.
(c) The terms of Sections 10.01, 10.02, 10.03, 10.05 and 10.06 shall
apply to the Trustee also in its role as Paying Agent, for so long as the
Trustee shall act as Paying Agent.
(d) Any reference in the Trust Agreement to the Paying Agent shall
include any co-paying agent unless the context requires otherwise.
SECTION 5.10. Authenticating Agent. (a) The Trustee may appoint any one
or more Authenticating Agents (each, an "Authenticating Agent") with respect to
the Units which shall be authorized to act on behalf of the Trustee in
authenticating the Units in connection with the issuance, delivery and
registration or transfer or exchange of the Units. Whenever reference is made in
the Trust Agreement to the authentication of Units by the Trustee or the
Trustee's unit of authentication, such reference shall be deemed to include
authentication on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent must be acceptable to the Depositor.
(b) Any institution succeeding to the corporate agency business of any
Authenticating Agent shall continue to be an Authenticating Agent without the
execution or filling 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, the Depositor and the Rating
Agencies. The Trustee may at any time terminate the agency of an Authenticating
Agent by signing 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 may appoint a successor
Authenticating Agent. Subsequent to any such removal or resignation of the
Authenticating Agent, the Trustee shall act as Authenticating Agent until a
successor Authenticating Agent, if any, is appointed. 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
compensating for its services under this Section. The provision of Sections
10.01, 10.02 and 10.03 shall be applicable to any Authenticating Agent.
(c) Pursuant to an appointment made under this Section, the Units 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 Units described in the Trust Agreement.
By: _________________________________
as Authenticating Agent for
the Trustee
By: _______________________________
Authorized Signatory
SECTION 5.11. Issuance and Transfer Restrictions. (a) The Units shall
be issued on the Closing Date upon (i) deposit of the Underlying Securities into
the Trust by the Depositor in exchange for all the Units, (ii) satisfaction of
the conditions set forth in Section 2.06 and (iii) the due authentication by the
Trustee of the Units in the form set forth in Exhibit B1 attached hereto.
(b) In the event that the Trust Agreement provides that the Units will
be Book-Entry Units, the following terms shall apply:
(i) The Units will be represented by one or more Global
Securities registered (in the case of Registered Units) in the
name of a Depositary or its nominee.
(ii) Unless otherwise provided in the Units or the Trust
Agreement, any Global Security representing Registered Units
shall be exchangeable for Certificates registered in the name of
Persons other than the Depositary or its nominee only if (i) the
Depositary is no longer willing or able to act as a depositary
and the Trustee is unable to locate a qualified successor within
30 days, or (ii) there shall have occurred and be continuing an
event specified in Section 9.02. Upon such issuance, the Trustee
shall register such Certificates in the name of, and cause the
same to be delivered to, such Person or Persons (or the nominee
thereof) consistent with Section 5.02.
(iii) Any Global Security representing Registered Units may bear
a legend in substantially the following form:
"This Certificate is a Global Security within the meaning of
the Trust Agreement hereinafter referred to and is registered in
the name of a Depositary or a nominee of a Depositary. This
Certificate is exchangeable for Certificates registered in the
name of a person other than the Depositary or its nominee only in
the limited circumstances described in the Trust Agreement, and
may not be transferred except as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary."
(c) (i) 25% Test. If the Trust Agreement provides that the 25% Test
applies, only this subclause (i) of this Section 5.11(c) shall apply to the
Units governed thereby. Units will be issued only as Definitive Registered Units
and only after a definitive purchase agreement has been executed and delivered
by the purchaser or the proposed transferee. That agreement will contain
additional representations, including whether the purchaser or proposed
transferee is a Benefit Plan Investor or a Plan. No transfer of any Unit shall
be made to any Benefit Plan Investor, unless immediately after such transfer,
either (x) no Units are held by a Plan or (y) Benefit Plan Investors hold less
than 25% of the Units (for this purpose Units held by the Depositor, the Trustee
or any other Person (other than a Benefit Plan Investor) that has discretionary
authority or control with respect to the assets of the Trust or that provides
investment advice for a fee (direct or indirect) with respect to such assets, or
any affiliate of the Depositor, the Trustee of any such Person (within the
meaning of Department of Labor Reg. ss. 2510.3-101(f)(3)) will not be treated as
outstanding). In addition, the Depositor and the Trustee will agree that, after
the initial distribution of the Units, if any Units are held by Plans, neither
they nor their affiliates will acquire any Units, unless that acquisition would
not cause the ownership by Benefit Plan Investors immediately following the
acquisition to exceed 25% of the Units. Each Person that acquires a Unit, and
each fiduciary who causes a Person to acquire a Unit, in its individual as well
as its fiduciary capacity, agrees to indemnify and hold harmless the Depositor,
the Trustee, MS&Co., each Distribution Participant and their respective
affiliates from any cost, damages, loss or expense, incurred by them as a result
of the representations made by such Person or fiduciary not being true.
(ii) Prohibited Transaction Exemption Restriction. If the Trust
Agreement provides that the Prohibited Transaction Exemption
Restriction applies, only this subclause (ii) of this Section
5.11(c) shall apply to the Units governed thereby. By its
acquisition of any Unit, the Holder will be deemed to have
represented and warranted on each day that it holds such Unit
either that (x) it is not a Plan, an entity whose underlying
assets include the assets of any such Plan, or an governmental
plan which is subject to any federal, state or local law that is
substantially similar to the provisions of Section 406 of ERISA
or Section 4975 of the Code, or (y) its purchase, holding and
disposition of a Unit will not result in a prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code (or, in
the case of a governmental plan, any substantially similar
federal, state or local law) unless an exemption is available
(all of the conditions of which have been satisfied) or in any
other violations of an applicable requirement of ERISA, the
Internal Revenue Code or other law. Each Person that acquires a
Unit, and each fiduciary who causes a Person to acquire a Unit,
in its individual as well as its fiduciary capacity, agrees to
indemnify and hold harmless the Depositor, the Trustee, MS&Co.,
each Distribution Participant and their respective affiliates
from any cost, damages, loss or expense, incurred by them as a
result of the representations made by such Person or fiduciary
not being true.
(iii) No Plan Restriction. If the Trust Agreement provides that
the No Plan Restriction applies, only this subclause (iii) of
this Section 5.11(c) shall apply to the Units governed thereby.
Units may not be purchased, held by or transferred to any Person
unless that Person is not a Plan, is not a governmental or other
plan subject to restrictions substantially similar to Title I of
ERISA or Section 4975 of the Code, and is not acquiring the Units
with the assets of any such Plan or other plan. Each Person who
acquires any Unit, and each fiduciary which causes any such
Person to acquire any Unit, in its individual as well as its
fiduciary capacity, will be deemed by such purchase, holding or
acquisition, on each date on which the Unit is held by such
person, to have represented that it is not a Plan or any
governmental or other plan subject to requirements substantially
similar to Title I of ERISA or Section 4975 of the Code and is
not using the assets of any such Plan to purchase those Units.
Each Person that acquires a Unit, and each fiduciary who causes a
person to acquire a Unit, in its individual as well as its
fiduciary capacity, agrees to indemnify and hold harmless the
Depositor, the Trustee, MS&Co., each Distribution Participant and
their respective affiliates from any cost, damages, loss or
expense, incurred by them as a result of the representations made
by such Person or fiduciary not being true.
(iv) No ERISA Restriction. If the Trust Agreement does not
provide for the 25% Test, the Prohibited Transaction Exemption
Restriction or the No Plan Restriction to apply, then none of
Section 5.11(c)(i), (ii) or (iii) will apply to the Units
governed thereby.
(d) The Trustee and the Depositor are entitled to request additional
evidence from a proposed transferee of such Units to ensure to their sole
satisfaction the accuracy of the representations in the Trust Agreement and as
described above.
(e) If, at any time, the Trustee learns that any of the representations
or warranties provided by a purchaser or potential transferee of Units is false
or that any agreement made therein has been violated, any transfer of a Unit to
such purchaser or potential transferee shall be null and void ab initio. The
Trustee will arrange for the compulsory sale (at a price determined by the
Depositor) for any Unit sold or otherwise acquired in contravention of any of
the transfer restrictions set forth herein. The Trustee shall also have such
other powers to effect compliance with the terms of this Section 5.11 as it
deems appropriate.
(f) If the Trust Agreement specifies that the "QIB Restriction" is
applicable, sales of the Units will be restricted to "qualified institutional
buyers" as defined in Rule 144A under the Securities Act, and each purchaser of
the Units is deemed to represent (or in the case of definitive Units, shall be
required to represent) for the benefit of the Depositor, the Trustee and each
Distribution Participant that such purchaser is a "qualified institutional
buyer".
(g) Each Certificate shall be required to bear a legend describing the
restrictions on transferability set forth in this Section 5.11 applicable
thereto.
SECTION 5.12. Optional Exchange.
(a) A Trust Agreement may designate a series of Units as Exchangeable
Units. In order for a Unit of a given Exchangeable Series (or Class within such
Exchangeable Series) to be exchanged by the applicable Unitholder, the Trustee
must receive, at least 30 (or such shorter period acceptable to the Trustee) but
not more than 45 days prior to an Optional Exchange Date (i) such Unit with the
form entitled "Option to Elect Exchange" on the reverse thereof duly completed
or (ii) in the case of Registered Units, a telegram, telex, facsimile
transmission or letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc., the Depositary (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 Unit, the Unit
Principal Balance or Notional Amount of such Registered Unit to be exchanged,
the certificate number or a description of the tenor and terms of such
Registration Unit, a statement that the option to elect exchange is being
exercised thereby and a guarantee that the Registered Unit to be exchanged with
the form entitled "Option to Elect Exchange" on the reverse of the Registered
Unit duly completed will be received by such Trustee not later than five
Business Days after the date of such telegram, telex, facsimile transmission or
letter. If the procedure described in clause (ii) of the preceding sentence is
followed, then such Registered Unit and form duly completed must be received by
such Trustee by such fifth Business Day. Any tender of a Unit by the Holder for
exchange shall be irrevocable. The exchange option may be exercised by the
Holder of a Unit for less than the entire Unit Principal Balance of such Unit
provided that the Unit Principal Balance or Notional Amount, as applicable, of
such Unit remaining outstanding after redemption is an authorized denomination
and all other exchange requirements set forth in the related Trust Agreement are
satisfied. Upon such partial exchange, such Unit shall be canceled and a new
Unit or Units for the remaining Unit Principal Balance thereof shall be issued
(which, in the case of any Registered Unit, shall be in the name of the Holder
of such exchanged Unit).
(b) Unless otherwise provided in the Trust Agreement, upon the
satisfaction of the foregoing conditions and any applicable conditions with
respect to the related Trust Property, the applicable Unitholder will be
entitled to receive a distribution of a pro rata share of the Trust Property
related to the Exchangeable Series (and Class within such Exchangeable Series)
of the Unit being exchanged, in the manner and to the extent described in the
Trust Agreement. Alternatively, if so specified in the Trust Agreement, the
applicable Unitholder, upon satisfaction of such conditions, may direct the
Trustee to sell, on behalf of such Unitholder, such pro rata share of the Trust
Property, in which event the Unitholder shall be entitled to receive the net
proceeds of such sale, less any costs and expenses incurred by such Trustee in
facilitating such sale, subject to any additional adjustments set forth in the
Trust Agreement.
Any right of exchange in respect of Units of an Exchangeable Series
shall be exercisable only to the extent that the Depositor determines that such
exchange would not be inconsistent with the Depositor's and such Trust's
continued satisfaction of the applicable requirements for exemption under Rule
3a-7 under the Investment Company Act. The Trust Agreement shall set forth
additional terms pertaining to any right of exchange, including but are not
limited to, the following:
(i) a requirement that the exchanging Holder tender to the
Trustee Units of each Class within such Exchangeable Series;
(ii) a minimum Unit Principal Balance or Notional Amount, as
applicable, with respect to each Unit being tendered for
exchange;
(iii) a requirement that the Unit Principal Balance or Notional
Amount, as applicable, of each Unit tendered for exchange be an
integral multiple of an amount specified in the Trust Agreement;
(iv) specified dates during which a Holder may effect such an
exchange (each, an "Optional Exchange Date");
(v) limitations on the right of an exchanging Holder to receive
any benefit upon exchange from any Credit Support or other
non-Underlying Securities deposited in the applicable Trust;
(vi) adjustments to the value of the proceeds of any exchange
based upon the Unitholder's allocable share of expenses incurred
but not yet paid and the establishment of a reserve for any
allocable Extraordinary Trust Expenses as set forth in the Trust
Agreement; and
(vii) a requirement that the exchanging holder obtain the consent
of any Swap Counterparty to such exchange and tender to the Swap
Counterparty a termination payment for termination of the portion
of the Swap Agreement corresponding to the portion of the
Underlying Securities to be distributed by the Trustee.
(c) Unless the Trust Agreement states that "Depositor Optional
Exchange" does not apply to the Units of a given Series, any Units held or
beneficially owned by the Depositor or its affiliates from time to time will be
subject to optional exchange by the Depositor or such affiliates for a pro rata
portion of the Trust Property of the related Trust. Unless the Trust Agreement
otherwise provides, the Depositor may only exchange Units for a pro rata portion
of the Trust Property if: (i) the exchange is made with respect to a minimum
Unit Principal Balance of $250,000 and in $25 integral multiples in excess
thereof; (ii) such exchange is to be effected on any January 1, April 1, July 1
or October 1 (or the succeeding Business Day if such date is not a Business Day)
with 45 days notice; (iii) any persons specified in the Trust Agreement consent.
(d) Any holder of a Call Option shall be entitled to exchange Units
acquired upon exercise of the Call Option for a corresponding portion of Trust
Property.
SECTION 5.13. Callable Series. If one or more specified Persons has the
right to purchase all or a portion of the Units of any given Series, the Trust
Agreement will designate such Series as a "Callable Series," and specify the
terms upon which any such specified Person may exercise its right to purchase
all or a portion of the Units. Such terms may relate to, but are not limited to,
the following:
(i) a minimum Unit Principal Balance with respect to each Unit
being purchased;
(ii) a requirement that the Unit Principal Balance of each Unit
being purchased be an integral multiple of a specified amount;
(iii) specified dates during which such a purchase may be
effected (each, a "Call Date"); and
(iv) the price at which such a purchase may be effected (the
"Call Price").
After receiving notice of the exercise of such a call right, the
Trustee will provide notice thereof as specified in the Trust Agreement. Upon
the satisfaction of any applicable conditions to the exercise of such right to
purchase of the Units described in such Trust Agreement, each Unitholder will be
entitled to receive a distribution of a pro rata share of the Call Price paid in
connection with such exercise, in the manner and to the extent described in such
Trust Agreement.
ARTICLE VI
The Depositor
SECTION 6.01. Liability of the Depositor. The Depositor shall be liable
in accordance with the Trust Agreement only to the extent of the obligation
specifically imposed thereby.
SECTION 6.02. Limitation on Liability of the Depositor. (a) Unless
otherwise expressly specified in the Trust Agreement, the Depositor shall not be
under any obligation to expend or risk its own funds, except to the extent of
its obligation to pay any amount payable under the Trustee Fee Letter or under
Section 10.05(b) hereof, or otherwise incur financial liability in the
performance of its duties thereunder or in the exercise of any of its rights or
powers if reasonable grounds exist for believing that the repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
(b) Neither the Depositor nor any of the directors, officers, employees
or agents of the Depositor shall be under any liability to the Trustee, the
Trust Property or the Unitholders for any action taken, or for refraining from
the taking of any action, in good faith pursuant to the Trust Agreement, or for
errors in judgment; provided, however, that this provision shall not protect the
Depositor or any such person against any breach of warranties, representations
or covenants made in the Trust Agreement, or against any specific liability
imposed on the Depositor pursuant to the Trust Agreement, or against any
liability which would otherwise be imposed by reason of willful misfeasance, bad
faith or negligence in the performance of duties specifically set forth in the
Trust Agreement or by reason of reckless disregard of obligations and duties
specifically set forth in the Trust Agreement.
The Depositor shall not be under any obligation to appear in, prosecute
or defend any legal action unless such action is related to its duties under the
Trust Agreement and, in its reasonable 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 the Trust Agreement and the rights and duties of the parties
thereto and the interests of the Unitholders.
SECTION 6.03. Depositor May Purchase Units. The Depositor or its
Affiliates may at any time purchase Units in the open market or otherwise. Units
so purchased by the Depositor may, at the discretion of the Depositor, be held
or resold.
SECTION 6.04. Preparation and Filing of Exchange Act Reports;
Obligations of the Depositor. The Depositor shall (or shall engage the Trustee
to):
(a) on behalf of the Trust, prepare, sign and file with the Commission,
within the time period set forth below, copies of the annual reports and of the
information, documents, certifications and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe), if any, which the Depositor on behalf of the
Trust may be required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act (collectively, "Exchange Act Reports") with respect to
the Trust. The names of such Exchange Act Reports and the dates on which they
are required to be filed with the Commission are as follows:
(i) Form 8-K, within the time requirement prescribed by the
Exchange Act if the filing of Form 8-K is necessary;
(ii) Form 10-K, within the time requirement prescribed by the
Exchange Act; and
(iii) such other reports as may be required pursuant to Section
13 or 15(d) of the Exchange Act.
(b) deliver to the Trustee within 15 days after the Depositor is
required to file the same with the Commission, such additional information,
documents and reports with respect to compliance by the Depositor with the
conditions and covenants of this Agreement, if any, as may be required to be
filed with the Commission from time to time by such rules and regulations; and
(c) deliver to the Trustee, which shall then transmit by mail to all
Holders described in TIA Section 313(c), in the manner and to the extent
provided therein, such summaries of any information, documents and reports
required to be filed by the Depositor and received pursuant to clauses (a) and
(b) of this Section 6.04, if any, as may be required by rules and regulations
prescribed from time to time by the Commission.
ARTICLE VII
Rights of Unitholders
SECTION 7.01. Voting Rights with Respect to Underlying Securities. (a)
Within three Business Days after receipt of notice of any meeting of, or other
occasion for the exercise of voting rights or the giving of consents by, owners
of any of the Underlying Securities, the Trustee shall give notice to the
Unitholders, setting forth (i) such information as is contained in such notice
to owners of Underlying Securities, (ii) a statement that the Unitholders will
be entitled, subject to any applicable provision of law, any applicable terms of
such Underlying Securities and any applicable provisions of the Trust Agreement
(and to the extent of the voting rights allocated to the Unitholders), 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 Unitholders of record on such record date.
(b) Unless otherwise specified in the Trust Agreement the voting rights
allocable to the owners of the Underlying Securities pursuant to the terms
thereof will be allocated among the Unitholders pro rata, in the proportion that
the denomination of each Unit bears to the aggregate denomination of all Units;
and upon the written request of the applicable Unitholder, 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, provided, that the Trustee shall not vote except as
specifically authorized and directed in written instructions from the applicable
Unitholder entitled to give such instructions.
(c) Notwithstanding Section 7.01(b), the Trustee must reject any vote
to (i) alter the currency, amount or timing of payment of, or the method or rate
of accruing, any principal or interest on the Underlying Securities underlying
the Units held by such Unitholder or (ii) consent to any redemption or
prepayment of the Underlying Securities underlying the Units held by such
Unitholder or (iii) consent to the issuance of new obligations in exchange or
substitution for any Underlying Securities pursuant to a plan or refunding of
the Underlying Securities or any other offer for the Underlying Securities; in
each case unless the Trustee is directed by the affirmative vote of all
Unitholders to accept such amendment or offer as the case may be; and provided,
further, that the Trustee receives advice of nationally recognized independent
tax counsel, designated by the Depositor, that such exercise of voting rights
with respect to any Underlying Securities (i) would not result in a "sale or
other disposition" of such Underlying Securities within the meaning of Section
1001(a) of the Code and (ii) will not alter the classification of the Trust for
Federal Income Tax Purposes. The Trustee will not grant any consent (other than
a unanimous consent) solicited from the owners of the Underlying Securities
underlying the Units with respect to the foregoing matters in (i), (ii) and
(iii) above nor will it accept or take any action in respect of any consent,
proxy or instructions received from any Unitholder in contravention of such
provisions. In addition, if the Trustee determines (based upon advice furnished
by nationally recognized independent tax counsel, whether at the request of any
Unitholder or otherwise) that the exercise of voting rights with respect to any
Underlying Securities could result in a "sale or other disposition" of such
Underlying Securities within the meaning of Section 1001(a) of the Code, the
Trustee shall exercise such voting rights in a manner that would not result in
any such sale or other disposition. The Trustee will have no responsibility to
undertake on its own initiative to determine that any exercise of voting rights
will result in any such sale or other disposition and in any event will not
undertake to make such determination unless given an indemnity reasonably
satisfactory to it against the costs of such determination.
SECTION 7.02. Amendments and Waivers Under Swap Agreement and
Guarantee. (a) Without the need for consent of any Unitholder, the Trustee shall
enter into any amendment, modification, waiver, or other change of the Swap
Agreement or the Guarantee to cure any ambiguity or manifest error in, or to
correct or supplement or otherwise change any provision of, the Swap Agreement
or the Guarantee, if such change will not materially and adversely affect any
Unitholder. Section 7.02(a) shall not be construed to require the consent of a
Class of Units not materially and adversely affected by any amendment to the
Swap Agreement in connection with an amendment pursuant to Section 7.02(b).
(b) The Trustee shall enter into any other amendment, or agree to a
waiver or other modification or other change, of the Swap Agreement or Guarantee
if directed or consented to by the Specified Percentage of Unitholders
materially and adversely affected thereby.
(c) Notwithstanding subsection (b) above, the Trustee shall not enter
into any amendment, or agree to a waiver or other modification, of the Swap
Agreement or Guarantee that would have the effect of changing the principal
amount, interest rate, maturity, or other terms specified in the related Trust
Agreement, of any Class or Series of Units without the consent of 100% of the
outstanding Unit Principal Balance of each Class of Units affected thereby.
(d) In the case of both (a) and (b) above, (i) the Trustee shall
require an Opinion of Counsel, not at the expense of the Trustee, to the effect
that such amendment will not alter the classification of the Trust for Federal
income tax purposes and (ii) the Rating Agency Condition shall be satisfied with
respect to any amendment, waiver, modification or other change pursuant to this
Section to any Swap Agreement unless Units representing 100% of the Unit
Principal Balance of all affected Units vote in favor of such amendment with
notice that the Rating Agency Condition will not be satisfied, but in any case
each applicable Rating Agency shall receive written notice of such amendment.
(e) In executing any such amendment or restatement created by any
amendment or the modifications of the Swap Agreement, the Trustee shall be
entitled to receive, and (subject to the standard of care provided in Article X
hereof) shall be fully protected in relying upon an Opinion of Counsel stating
that the execution of such amendment is authorized or permitted by the Trust
Agreement and that all conditions precedent thereto have been complied with. The
Trustee may, but shall not be obligated to, enter into any such amendment which
affects the Trustee's own rights, duties or immunities under the Trust Agreement
or otherwise.
ARTICLE VIII
Default on Underlying Securities and Permitted Investments
SECTION 8.01. Realization Upon Default. (a) The Trustee, on behalf of
the Unitholders, shall assert claims under the Underlying Securities or the
Permitted Investments, and shall take such reasonable steps as are necessary to
receive payment or to permit recovery thereunder with respect to any default,
subject in all cases to the terms of Article X.
(b) If the Trustee is unable to obtain full recovery in respect of a
defaulted Underlying Security or Permitted Investment, 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 or
Permitted Investment, subject in all cases to the terms of Article X.
(c) If there is an event of default (as defined in the indenture or
other document pursuant to which the Underlying Securities were issued) with
respect to any Underlying Security and such default is known to the Trustee, the
Trustee shall promptly give notice to the Unitholders thereof as promptly as
practicable as provided in Section 12.05 hereof, and in the manner and to the
extent provided in TIA Section 313(c)) within 90 days after such event of
default occurs.
ARTICLE IX
Trust Wind-Up Events and Liquidation Events
SECTION 9.01. Liquidation Events.
(a) Unless a Trust Wind-Up Event has also occurred and unless otherwise
provided in the Trust Agreement (each such event below, a "Liquidation Event"):
(i) In the event that (i) an Underlying Security Default occurs
with respect to any Underlying Security or (ii) any Underlying
Security held by the Trust becomes a Disqualified Underlying
Security, then the Trust shall sell such Underlying Security and,
if necessary, shall sell other Trust Property to the extent
necessary to pay any Swap Termination Payment.
(ii) In the event that any Swap Default or Termination Event
occurs under any Transaction (including if such Transaction
becomes a Disqualified Transaction), and such Transaction is
terminated, the Trust shall sell any Affected Underlying
Securities and, if necessary, shall sell other Trust Property to
the extent necessary to pay any related Swap Termination Payment,
and
(iii) In the event that any Credit Support becomes Disqualified
Credit Support, then such Credit Support shall be terminated.
(b) Unless otherwise specified in the Trust Agreement, the Trust shall
distribute any net proceeds to the Trust from a Liquidation Event to the
Unitholders pro rata or in such other proportion as specified in the Trust
Agreement.
(c) The Trust shall continue thereafter.
SECTION 9.02. Trust Wind-Up Events. (a) Unless otherwise provided in
the Trust Agreement, if any of the following events (each event, a "Trust
Wind-up Event") shall occur:
(i) the occurrence of one or more Underlying Security Defaults
which results in an Underlying Security Default with respect to
all Underlying Securities held by the Trust or with respect to
any Underlying Securities specified in the Trust Agreement;
(ii) the consummation of any redemption of, tender for, exercise
of any call option on, or other similar transactions with respect
to all Underlying Securities held by the Trust;
(iii) if and as specified in the Trust Agreement, any specified
Swap Default or specified Termination Event under a specified
Swap Agreement or specified Swap Agreements;
(iv) any specified Credit Support default occurs under Credit
Support specified in the Trust Agreement;
(v) all Underlying Securities held by the Trust become
Disqualified Underlying Securities;
(vi) if specified in the Trust Agreement, all Transactions
becomes Disqualified Transactions or any specified Transactions
become Disqualified Transactions;
(vii) any Credit Support held by the Trust becomes Disqualified
Credit Support and the Trust Agreement specifies that a Trust
Wind-Up Event shall occur upon such Credit Support becoming
Disqualified Credit Support;
(viii) any Excess Expense Event;
(ix) the designation of a Special Depositor Wind-Up Event
described in Section 9.04; and
(x) any other Trust Wind-Up Event set forth in the Trust
Agreement.
(b) Unless otherwise specified in the Trust Agreement, if more than one
Trust Wind-Up Event occurs, only the first such event will be the "Trust Wind-Up
Event" for all purposes under the Trust Agreement, each Swap Agreement and any
related agreements or other documents.
SECTION 9.03. Expense Event. (a) An "Excess Expense Event" will occur,
and a Trust Wind-Up Event shall occur under Section 9.02, in the event that the
Trustee incurs Extraordinary Trust Expense in an aggregate amount exceeding the
Trigger Amount, unless the Swap Counterparty or, if specified as permitted under
the Trust Agreement, the Unitholders provide adequate assurance of indemnity to
the Trustee in accordance with the terms of subsection (b) or (c), as
applicable.
(b) Promptly upon the incurrence by the Trustee of Extraordinary Trust
Expense in an aggregate amount exceeding the Trigger Amount, and in any event
within one Business Day after such incurrence, the Trustee shall provide notice
to each Swap Counterparty, the Depositor and the Rating Agencies, if any. If the
Trust Agreement so specifies, the Trustee shall also provide notice to the
Unitholders. Such notice shall state that an Excess Expense Event shall occur on
the fifth Business Day following the provision of such notice unless prior to
such day the Swap Counterparty agrees to indemnify the Trustee for Extraordinary
Trust Expense in an aggregate amount exceeding the Maximum Reimbursable Amount,
and actually incurred by the Trustee as of the date of such agreement, to the
reasonable satisfaction of the Trustee and its counsel; provided, however, in no
event shall the Trustee be released from its obligations under the Trust
Agreement until such fifth Business Day. If the Trust Agreement so specifies,
the Unitholders, by unanimous agreement, may provide such indemnification.
(c) Following an agreement to indemnify the Trustee for future
Extraordinary Trust Expense, upon the incurrence of Extraordinary Trust Expense
in excess of the Maximum Reimbursable Amount, then an "Excess Expense Event"
will occur unless adequate assurance of indemnity is given to the Trustee in the
manner specified in paragraph 9.03(b).
(d) Nothing in this Section shall be construed to excuse the Depositor
from its indemnification obligations under Section 10.05.
SECTION 9.04. Special Depositor Wind-Up Event. If the Depositor (or, if
applicable, its permitted assignee) owns 100% of the Units, then it shall have
the power to designate a distribution of the Trust Property to the Unitholders
and the termination of the Trust (a "Special Depositor Wind-Up Event") pursuant
to this Article IX.
SECTION 9.05. Disposition of Trust Property. (a) Subject to Section
9.06, as promptly as possible after the occurrence of a Trust Wind-Up Event or
Liquidation Event, and in any case within three Business Days following such
occurrence, the Trustee shall provide notice to the Unitholders, the Swap
Counterparties, the Depositor and the Rating Agencies of the occurrence of a
Trust Wind-up Event or Liquidation Event specifying the particular Trust Wind-Up
Event or Liquidation Event and in the case of a Liquidation Event, the
particular Underlying Security, Swap Agreement or other Trust Property related
to such Liquidation Event. In the case of a Trust Wind-Up Event, the notice
shall state that (i) Holders should surrender their Units to the Trustee, or
deliver security or indemnity acceptable to the Trustee in order to receive
their respective distributions of Trust Property, if any, (ii) the location and
hours of the Corporate Trust Office at which Units should be presented and
surrendered and (iii) that each Holder must supply transfer instructions in
writing with respect to Trust Property to be distributed in cash or in kind;
provided, however, that with respect to Units that are Global Securities as to
which distributions will be made through the facilities of DTC or another
depository, the Trustee may adhere to the applicable rules and procedures or DTC
or such other depository in lieu of clauses (i), (ii) and (iii) of this
sentence.
(b) Immediately upon receipt of notice from the Trustee that the Trust
is required to sell Underlying Securities, the Selling Agent shall undertake to
sell Underlying Securities on behalf of the Trust; provided, however, that the
Selling Agent may elect not to act as Selling Agent with respect to some or all
of the Underlying Securities by written notice to that effect to the Trustee.
The timing, price and other terms of any sale conducted by the Selling Agent
shall be determined by the Selling Agent in its sole discretion, but all such
sales shall be completed within 30 days or such longer period of time as may be
reasonable with respect to particular Underlying Securities. In the case of a
Liquidation Event, sales under this provision shall be limited to the Affected
Underlying Securities except where the proceeds from the Affected Underlying
Securities are insufficient to make payment of the Swap Termination Payment.
The Selling Agent must solicit at least three bids for the Underlying
Securities to be sold. The Selling Agent must solicit at least three of such
bids from registered broker-dealers of national reputation, but additional bids
may be solicited from one or more financial institutions or other counterparties
with credit worthiness acceptable to the Selling Agent in its discretion. The
Selling Agent will, on behalf of the Trust, sell the Underlying Securities at
the highest bid price received. None of the Selling Agent, its affiliates or its
agents, may bid for the Underlying Securities. The Selling Agent may provide a
right of last refusal to any Swap Counterparty, Call Option holder or other
counterparty or holder with an interest in the Underlying Securities or other
Trust Property that is not an affiliate of the Selling Agent or any holder of a
Call Option.
If the Selling Agent is unable to sell Underlying Securities within 180
days of its first attempt to do and the Selling Agent determines that it is not
commercially reasonable to continue to try to sell such Underlying Securities,
it may give notice to the Trustee that it is unable to sell such Underlying
Securities and that it has determined that it is commercially unreasonable to
continue to attempt to sell such Underlying Security. In such event, the Trustee
shall arrange to distribute such Underlying Securities to Unitholders.
(c) Subject to Section 9.06, as promptly as possible after the
occurrence of a Liquidation Event, the Trustee shall take action on behalf of
the Trust as specified in Section 9.01. Subject to Section 9.06, as promptly as
possible after the occurrence of a Trust Wind-Up Event, unless otherwise
provided in the Trust Agreement, the Trustee on behalf of the Trust shall
terminate all Swap Agreements, Credit Support and other agreements of the Trust,
the Trustee shall permit delivery of any Trust Property to any Swap Counterparty
or other person in accordance with any Swap Agreement or other agreement, and
the Trustee shall cause the Selling Agent to liquidate all Trust Property. The
Trustee shall use reasonable efforts to cause such terminations and liquidations
within thirty days of the occurrence of such Trust Wind-Up Event. Upon
completion of the liquidation of Trust Property, the Trustee shall provide a
notice to Unitholders, the Swap Counterparties, the Depositor and the Rating
Agencies stating the liquidation of Trust Property has been completed,
specifying the amount of any Swap Termination Payment paid or to be paid and the
amounts to be distributed to Unitholders.
The Trustee shall distribute the cash proceeds of liquidation, and if
applicable, other Trust Property, to Unitholders upon surrender, or delivery of
security or indemnity acceptable to the Trustee, by each Holder of its Units at
the Corporate Trust Office specified pursuant to paragraph (a) of this Section
9.05. Upon receipt by the Trustee of (i) appropriate transfer instructions in
writing from a Holder with respect to the Underlying Securities and (ii) such
Holder' Units (or acceptable security or indemnity), the Trustee shall promptly
deliver Underlying Securities to such Holder in an aggregate principal amount
corresponding to the aggregate Unit Principal Balance of such Holder's Units in
accordance with such transfer instructions by (A) physical delivery or (B) if
applicable, causing the book-entry depositary for such Underlying Securities to
credit such Underlying Securities to an account of such Holder with such
depositary or an account of a designated participant in such depositary,
provided that such book-entry depositary will be an agency of the United States,
DTC or another book-entry institution acceptable to the Depositary. With respect
to a Global Security, the Trustee may also distribute such cash or other Trust
Property in accordance with the rules of DTC or other applicable Depository. Any
Transfer made in accordance with this paragraph shall satisfy all obligations of
the Trust with respect to the Unitholders.
(d) If the related Trust Agreement so specifies, in connection with any
Swap Termination Payment payable by the Trust, the Unitholders may, acting
unanimously, deliver to the Trustee the amount of such outstanding Swap
Termination Payment (together with, in the case of a Trust Wind-Up Event, any
Extraordinary Trust Expense in excess of the Maximum Reimbursable Amount payable
to the Trustee) and a written instruction to discontinue sale of the Underlying
Securities. If the Selling Agent receives notice from the Trustee of the
exercise by the Unitholders of their rights under this Section 9.05(d), the
Selling Agent shall promptly discontinue sales of the related Underlying
Securities (but the Selling Agent and the Trustee shall complete the settlement
of any sale already agreed). It is expressly understood and agreed that
Underlying Securities may be sold in the time necessary for the Unitholders to
be notified of and act upon their rights under this Section 9.05(d). If the
Trust Agreement specifies that this provision shall be applicable, the Trustee
shall provide notice of this right to Unitholders together with an estimate of
the amount of any Swap Termination Payment and applicable Extraordinary Trust
Expense at the time the Trustee provides notice to Unitholders of such Trust
Wind-Up Event or Liquidation Event.
(e) Unless otherwise provided in the Trust Agreement, and
notwithstanding any other provision of this Agreement (and as specified in the
Swap Agreement), in connection with early termination of a Swap Agreement or one
or more Transactions thereunder, other than as a result of Underlying Security
Default, the claim of the Swap Counterparty against the Underlying Securities
(or proceeds thereof arising from sale thereof) and any other Trust Property
will be limited to a claim pro rata with that of the Unitholders according to
the amount of the Swap Termination Payment otherwise payable to the Swap
Counterparty and the Unitholders' aggregate Unit Principal Balance plus accrued
interest.
(f) The only distributions from the Trustee to which the Holders shall
be entitled are, subject to the security interest in all of the Trust Property
granted in favor of the Swap Counterparty pursuant to the Swap Agreement and the
obligation of the Trust to pay Extraordinary Trust Expenses, payments on the
Underlying Securities, amounts, if any, recovered under the Swap Agreement
(including Swap Termination Payments, if any, and amounts collected pursuant to
Section 2(e) and Section 11 of the Swap Agreement) or Guarantee, received by the
Trustee after the occurrence of the Trust Wind-Up Event, and any other remaining
Trust Property, if any, which in each case the Trustee shall distribute pro rata
to the Unitholders in the manner provided pursuant to Section 4.01 upon
satisfaction of the conditions for transfer of Underlying Securities referred to
in paragraph (b) of this Section.
(g) Except for reports and other information required to be provided to
Holders under the Trust Agreement, the obligations the Trustee and the Depositor
will terminate upon the distribution to Unitholders of all amounts required to
be distributed to them and the disposition of all Underlying Securities held by
the Trustee, and such distribution shall constitute full satisfaction of all of
the interests of the Unitholders under this Trust Agreement.
(h) In the event that the Selling Agent resigns or declines to sell
specific Underlying Securities, the Trustee shall proceed under Section
10.02(a)(x).
(i) The Selling Agent is an agent of the Trustee only and shall have no
fiduciary or other duties to the Unitholders, nor shall the Selling Agent have
any liability to the Trust in the absence of the Selling Agent's bad faith or
willful default. The Selling Agent shall be permitted to sell Underlying
Securities to Affiliates of the Selling Agent. The Selling Agent may (in
addition to declining to sell specific Underlying Securities as provided in
Section 9.05(b)) resign at any time by written notice to the Trustee, such
resignation to take effect immediately upon notice. Except as provided in the
first sentence of this Section 9.05(i), each of the protections, releases,
indemnities and other terms applicable to the Trustee under Section 10.01,
10.02, 10.03 and 10.05 shall apply to the Selling Agent in connection with its
actions as Selling Agent for the Trust.
(j) Subject to Section 9.05(b) and Section 9.05(e), the Trustee agrees
that upon any failure of the Trust to make any payment when due under the Swap
Agreement, the Swap Counterparty shall have the right to take all action and to
pursue all remedies with respect to such property that a secured party is
permitted to take with respect to collateral under the UCC, including the right
to require the Trustee promptly to sell all or any portion of the Underlying
Securities in the open market or, if the Swap Counterparty elects, to sell the
Underlying Securities to the Swap Counterparty for its fair value as determined
in good faith by the Swap Counterparty. In either case, the proceeds of sale
shall be applied to any amounts owed to the Swap Counterparty. The Trustee
further agrees to take any actions necessary to facilitate the perfection of the
aforementioned security interest of the Swap Counterparty in the property of the
Trust as the Swap Counterparty may reasonably request.
(k) No Unitholder shall have any liability as a seller of the Trust
Property in connection with any sale of Trust Property by the Trustee or the
Selling Agent.
SECTION 9.06. Limitation on Notice Requirement. The Trustee shall not
be responsible for taking action with respect to a Trust Wind-Up Event or a
Liquidation Event unless and until (i) the Trustee fails to receive funds due on
the Underlying Securities or under the Swap Agreement when due and such funds
are not received within any applicable grace period, (ii) receipt by the Trustee
of notice from the Swap Counterparty of the occurrence of a Swap Default or
Termination Event, (iii) receipt of actual notice of an Underlying Security
Default from the Underlying Security Issuer or (iv) upon actual knowledge of any
event that would constitute a Liquidation Event or a Trust Wind-Up Event by a
Responsible Officer of the Trustee; provided, however, that the Trustee is
responsible for making due inquiry as to whether a Liquidation Event or a Trust
Wind-up Event occurred if it has reason to believe that such a Liquidation Event
or Trust Wind-up Event has occurred.
ARTICLE X
Concerning the Trustee
SECTION 10.01. Duties of Trustee. (a) The Trustee undertakes to perform
such duties and only such duties as are specifically set forth in the Trust
Agreement. Any permissive right of the Trustee enumerated in the Trust Agreement
shall not be construed as a duty.
(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 the Trust Agreement, shall examine them to determine whether they
conform to the requirements of the Trust Agreement. If any such instrument is
found not to conform to the requirements of the 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, the Unitholders and the Rating
Agencies, if any.
(c) Upon a default by the Swap Counterparty in making any other payment
due under the Swap Agreement and upon a default by the Guarantor after the
Trustee makes demand under the Guarantee, the Trustee shall exercise such of the
rights and powers vested in it by the Trust Agreement, and shall use the same
degree of care and skill in their exercise as a prudent person would exercise or
use under the circumstances in the conduct of such person's own affairs.
(d) No provision of the 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 terms of the Trust Agreement, the Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in the Trust Agreement,
no implied covenants or obligations (except for a fiduciary duty
to the beneficiaries of the Trust) shall be read into the Trust
Agreement against the Trustee and, in the absence of negligence,
bad faith or willful misconduct 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 the Trust Agreement;
(ii) the Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent
facts;
(iii) except with respect to actions or duties required to be
taken or performed, as applicable, by the Trustee under the
express terms of the Trust Agreement, 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 or in
the exercise of any of its rights powers under the Trust
Agreement 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; provided, however,
that the Trustee agrees that the indemnification under Section
10.05 will provide reasonable assurance against such risk or
liability; and
(iv) in the event that the Paying Agent or the Unit 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 Unit Registrar, as the case may be, under the Trust Agreement,
the Trustee shall be obligated promptly upon its knowledge
thereof to perform such obligation, duty or agreement in the
manner so required.
SECTION 10.02. Certain Matters Affecting the Trustee. (a) Except as
otherwise provided in Section 10.01:
(i) the Trustee may request and rely upon and shall be protected
in acting or refraining from acting upon any resolution,
Officers' 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 by the proper party or parties;
(ii) the Trustee may consult with counsel and any advice or
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted
by it under the Trust Agreement in good faith and in accordance
with such advice or Opinion of Counsel;
(iii) except for the duties and obligations of the Trustee
expressly created by the Trust Agreement, the Trustee shall be
under no obligation to exercise any of the trusts or powers
vested in it by the Trust Agreement or to institute, conduct or
defend any litigation thereunder or in relation thereto, at the
request, order or direction of any of the Unitholders, pursuant
to the terms of the Trust Agreement, unless such Unitholders or
the Depositor shall have, to the reasonable satisfaction of the
Trustee and its counsel, offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby;
(iv) the Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it
to be authorized or within the discretion or rights or powers
conferred upon it by the 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;
(vi) the Trustee may execute any of the trusts or powers or
perform any duties under the Trust Agreement either directly or
by or through agents or attorneys or a custodian or
administrative agent;
(vii) the Trustee shall not be personally liable for any loss
resulting from the investment of funds held in any Unit Account
pursuant to Section 3.04;
(viii) the Trustee shall not be deemed to have notice or
knowledge of any matter unless a Responsible Officer assigned to
and working in the Corporate Trust Office has actual knowledge
thereof or unless written notice thereof is received by the
Trustee at the Corporate Trust Office and such notice references
the Units generally or the Trust Agreement;
(ix) if the Trust Agreement provides that this Section
10.02(a)(ix) applies, the Trustee shall have the power to
reimburse itself for any unpaid Extraordinary Trust Expense
actually incurred in accordance with the terms and conditions of
this Trust Agreement prior to the distribution of funds or Trust
Property to Unitholders; and
(x) the Trustee shall have the power to sell the Underlying
Securities and other Trust Property, in accordance with Article
IX and XI, through the Selling Agent or, if the Selling Agent
shall have resigned or declined to sell some or all of the
Underlying Securities, any broker selected by the Trustee (at the
direction of the Depositor) with reasonable care, in an amount
sufficient to pay any amount due to the Swap Counterparty under
the Swap Agreement (including Swap Termination Payments) or
reimbursable to itself in respect of unpaid Extraordinary Trust
Expenses and to use the proceeds thereof to make such payments
after the distribution of funds or Trust Property to Unitholders.
Any such broker shall be instructed by the Trustee to sell such
Trust Property in a reasonable manner designed to maximize the
sale proceeds.
(b) All rights of action under the Trust Agreement or under any of the
Units, enforceable by the Trustee, may be enforced by it without the possession
of any of the Units, 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, subject
to the terms of the Trust Agreement.
SECTION 10.03. Limitation on Liability of Trustee. The Trustee assumes
no responsibility for the correctness of the recitals contained in the Trust
Agreement, the Units, the Swap Agreement and the Guarantee, or in any document
issued in connection with the sale of the Units (other than the signature and
authentication on the Units). The sole obligor with respect to the Underlying
Securities is the related Underlying Security Issuer, with respect to the Swap
Agreement is the Swap Counterparty and with respect to the Guarantee, is the
Guarantor. Except as set forth in Section 10.12, the Trustee makes no
representations or warranties as to the validity or sufficiency of the Trust
Agreement, the Units (other than the signature and authentication on the Units),
any Underlying Security, the Swap Agreement, the Guarantee or of any related
document. The Trustee shall not be accountable for the use or application by the
Depositor of any of the Units or of the proceeds of such Units, or for the use
or application of any funds paid to the Depositor or the Swap Counterparty in
respect of the Underlying Securities. The Units do not represent interests in or
obligations of the Trustee and the Trustee shall not be responsible or
accountable for any tax, accounting or other treatment proposed to be applied to
the Units or any interest therein except as expressly provided in the Trust
Agreement.
SECTION 10.04. Trustee May Own Units. The Trustee in its individual
capacity or any other capacity may become the owner or pledgee of Units with the
same rights it would have if it were not Trustee.
SECTION 10.05. Trustee Fees and Expenses; Limited Indemnification. (a)
As compensation for its regular and customary services and in payment of its
regular and customary expenses under the Trust Agreement (including the
reasonable compensation, expenses and disbursements of its counsel for regular
and customary services hereunder) the Trustee shall be entitled to the Trustee
Fees (which shall not be limited by any provision of law in regard to
compensation or payment of a trustee of an express trust). The Depositor agrees
to pay such Trustee Fees when due in accordance with the Trustee Fee Letter;
provided, however, that, subject to paragraph (b) below, the Depositor shall be
under no obligation to make any other payment for any other services and
expenses, disbursements and advances of the Trustee.
(b) The Trustee and any director, officer, employee or agent of the
Trustee shall be indemnified by the Depositor and held harmless against any
loss, liability or expense incurred in connection with any Proceeding relating
to the Trust Agreement, the Swap Agreement or the Units or the performance of
any of the Trustee's duties under the Trust Agreement, other than any loss,
liability or expense (i) that constitutes a specific liability of the Trustee
under the Trust Agreement or (ii) incurred by reason of willful misfeasance, bad
faith or negligence in the performance of the Trustee' duties thereunder or by
reason of reckless disregard of the Trustee's obligations and duties thereunder
(such loss, liability or expense, other than as described in clauses (i) and
(ii) of this sentence, "Extraordinary Trust Expense"); provided, however, that
with respect to any such Proceeding, (1) the Trustee shall have given the
Depositor notice thereof promptly after the Trustee shall have knowledge
thereof; (2) while maintaining control over its own defense in any such legal
action, the Trustee shall consult with the Depositor in preparing such defense;
(3) if any Person ever alleges such willful misfeasance, bad faith or negligence
by the Trustee, the indemnification provided for in this paragraph (b) shall
nonetheless be paid upon demand, subject to later adjustment or reimbursement,
until such time as a court of competent jurisdiction enters a final judgment as
to the extent and effect of the alleged willful misfeasance, bad faith or
negligence; and (4) the Depositor shall in no event be obligated under the Trust
Agreement to indemnify the Trustee for any Extraordinary Trust Expense to the
extent that such Extraordinary Trust Expense, when aggregated with all
Extraordinary Trust Expense previously indemnified, exceeds the Maximum
Reimbursable Amount. Subject to clause (4) of the proviso to the immediately
preceding sentence, the indemnity for Extraordinary Trust Expense shall survive
the termination or discharge of the Trust Agreement and the resignation or
removal of the Trustee. In the event the Trustee is not indemnified by the
Depositor, whether due to bankruptcy, insolvency or otherwise, the Trustee shall
be indemnified by the Trust, however, the Trustee shall nevertheless remain
obligated to perform its duties under the Trust Agreement.
(c) The Trustee and the Depositor expressly acknowledge that the
limited obligations of the Depositor (and in the case of the last sentence of
paragraph (b) above, the Trust) to indemnify the Trustee pursuant to paragraph
(b) of this Section do not extend to amounts attributable to compensation for
services or payment of expenses of the Trustee, which amounts are payable in
full in the form of the Trustee Fee.
SECTION 10.06. Eligibility Requirements for Trustee. (a) The Trustee
shall at all times satisfy the requirements of TIA Section 310(a) and Section
(a)(4)(i) of Rule 3a-7 under the Investment Company Act. The Trustee hereunder
shall at all times be a corporation or association which is not an Affiliate of
the Depositor (but may have normal banking relationships with the Depositor or
any obligor with respect to the Underlying Securities with respect to such
Series of Units and their respective Affiliates) organized and doing business
under the laws of any State or the United States, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $200,000,000 and subject to supervision or examination by Federal or State
authority, and the long-term debt obligations of which are rated in one of the
four highest categories assigned long-term debt obligations by each of the
Rating Agencies. If such corporation or association publishes reports of
conditions at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section the combined capital and surplus of such corporation or association
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of conditions so published. In the event that at any time the
Trustee shall cease to be eligible in accordance with the terms of this Section,
the Trustee shall resign immediately in the manner and with the effect specified
in Section 10.07.
(b) The Trustee shall comply with Section 310(b) of the TIA; provided,
however, that there shall be excluded from the operation of TIA Section
310(b)(1), any Series under which other securities are outstanding evidencing
ownership interest in obligations of the Underlying Security Issuer if the
requirements for such exclusion set forth in TIA Section 310(b)(1) are met.
SECTION 10.07. Resignation or Removal of the Trustee. (a) Subject to
the last sentence of this paragraph (a), the Trustee may at any time resign and
be discharged from the Trust by giving written notice thereof to the Depositor,
each Swap Counterparty and any Guarantor, the Rating Agencies, any Credit
Support Provider and to all Unitholders. Upon receiving such notice of
resignation, the Depositor, with the consent of each Swap Counterparty and any
Guarantor which consents shall not be unreasonably withheld, shall as promptly
as possible (and in any event within 30 days after the date of such notice of
resignation) appoint a successor trustee by written instrument, in duplicate,
which instrument shall be delivered to the resigning Trustee and to the
successor trustee. A copy of such instrument shall be delivered to the
Unitholders, each Swap Counterparty and any Guarantor and the Rating Agencies by
the Depositor. If no such successor trustee shall have been so appointed and
have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee for the Units.
(b) If at any time the Trustee shall cease to be eligible in accordance
with the terms of Section 10.06 and shall fail to resign after written request
therefor by the Depositor, or if at any time the Trustee shall become incapable
of acting, or shall be adjudged bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation, then the Depositor may, with the
consent of each Swap Counterparty and any Guarantor which consents shall not be
unreasonably withheld, remove the Trustee and appoint a successor trustee by
written instrument, in duplicate, which instrument shall be delivered to the
Trustee so removed and to the successor trustee. A copy of such instrument shall
be delivered to the Unitholders, each Swap Counterparty and any Guarantor, and
the Rating Agencies by the Depositor.
(c) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the terms of this Section shall not become
effective until acceptance of appointment by the successor trustee as provided
in Section 10.08.
SECTION 10.08. Successor Trustee. (a) Any successor trustee appointed
as provided in Section 10.07 shall execute, acknowledge and deliver to the
Depositor, its predecessor trustee and the Rating Agencies an instrument
accepting such appointment under the Trust Agreement, and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor under the Trust Agreement, with the like effect as if originally
named as trustee in the Trust Agreement. The predecessor trustee shall deliver
to the successor trustee all documents and statements held by it under the Trust
Agreement, and the Depositor and the predecessor trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
for more fully and certainly vesting and confirming in the successor trustee all
such rights, powers, duties and obligations. No successor trustee shall accept
appointment as provided in this Section unless at the time of such acceptance
such successor trustee shall be eligible under the terms of Section 10.06.
(b) Upon acceptance of appointment by a successor trustee as provided
in this Section, the Depositor shall transmit notice of the succession of such
trustee under the Trust Agreement to all Unitholders in the manner provided
pursuant to Section 12.05.
SECTION 10.09. Merger or Consolidation of Trustee. Any corporation or
association into which the Trustee may be merged or converted or with which it
may be consolidated or any corporation or association resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation or association succeeding to the business of the Trustee, shall be
the successor of the Trustee under the Trust Agreement, provided such
corporation or association shall be eligible under the terms of Section 10.06,
without the execution or filing of any paper or any further act on the part of
any of the parties to the Trust Agreement, anything in the Trust Agreement to
the contrary notwithstanding.
SECTION 10.10. Appointment of Co-Trustee. (a) Notwithstanding any other
terms of the Trust Agreement, at any time, for the purpose of meeting any legal
requirements of any jurisdiction in which any party of the Trust Property may at
the time be located, the Depositor and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees, jointly
with the Trustee, of all or any part of the Trust Property, and to vest in such
Person or Persons, in such capacity, such title to the Trust Property, or any
part thereof, and, subject to the other terms of this Section, such powers,
duties, obligations, rights and trusts as the Depositor and the Trustee may
consider necessary or desirable. If the Depositor shall not have joined in such
appointment within 15 days after the receipt by it of a request so to do, the
Trustee alone shall have the power to make such appointment. No co-trustee under
the Trust Agreement shall be required to meet the terms of eligibility as a
successor trustee under Section 10.06 and no notice to Unitholders of the
appointment of a co-trustee or co-trustees shall be required under Section
10.08.
(b) In the case of any appointment of a co-trustee pursuant to this
Section, all rights, powers, duties and obligations conferred or imposed upon
the Trustee shall be conferred or imposed upon and exercised or performed by the
Trustee and such co-trustee jointly, except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed by the
Trustee, the Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations (including the
holding of title to such Trust Property or any portion thereof in any such
jurisdiction) shall be exercised and performed by such co-trustee at the
direction of the Trustee. The Trustee shall not be liable for the acts or
omissions of any co-trustee.
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of then co-trustees, as effectively as if
given to each of them. Every instrument appointment any co-trustee shall refer
to the Trust Agreement and the conditions of this Article X. Each co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, jointly with the Trustee
subject to all the terms of the Trust Agreement, specifically including every
provision of the Trust Agreement relating to the conduct of, affecting the
liability of, or affording protection to, the Trustee. Every such instrument
shall be filed with the Trustee.
(d) Any co-trustee may, at any time, constitute the Trustee, its agent
or attorney-in-fact, with full power and authority, to the extent not prohibited
by law, to do any lawful act under or in respect of the Trust Agreement on its
behalf and in its name. If any co-trustee shall die, become incapable of acting,
resign or be removed, all its estates, properties, rights, remedies and trusts
shall vest in and be exercised by the Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee.
SECTION 10.11. Appointment of Office or Agency. The Units may be
surrendered for registration of transfer or exchange, and presented for the
final distribution with respect thereto, and notices and demands to or upon the
Trustee in respect of the Units and the Trust Agreement may be served at the
Corporate Trust Office.
SECTION 10.12. Representations and Warranties of Trustee. (a) 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) the Trustee has full power, authority and right to execute,
deliver and perform its duties and obligations under the Trust
Agreement, the Units and the Swap Agreement and has taken all
necessary action to authorize the execution, delivery and
performance by it (or, with respect to the Units, by an
Authenticating Agent on its behalf, if applicable) of the Trust
Agreement, the Units and the Swap Agreement;
(iii) the execution and delivery of the Trust Agreement, the
Units and the Swap Agreement by the Trustee and its performance
of and compliance with the terms of the Trust Agreement, the
Units and the Swap Agreement will not violate the Trustee's
articles of incorporation, association or other constitutive
documents or By-laws or constitute a default under, or result in
the breach or acceleration of, any material contract, agreement
or other instrument to which the Trustee is a party or which may
be applicable to the Trustee or any of its assets;
(iv) as of the Closing Date, each of the Trust Agreement, the
Units and the Swap Agreement has been duly executed and delivered
by the Trustee (or, with respect to the Units, by an
Authenticating Agent on its behalf, if applicable) and each of
the Trust Agreement and the Swap Agreement 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;
(v) the Trustee is not in violation, and the execution and
delivery of the Trust Agreement, the Swap Agreement and the Units
by the Trustee and its performance and compliance with respective
terms of the Trust Agreement, the Swap Agreement and the Units
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 thereunder;
(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 or the Swap
Agreement or to render the Units invalid, (B) seeking to prevent
the issuance of the Units or the consummation of any of the
transactions contemplated by the Trust Agreement or the Swap
Agreement or (C) that could reasonably be expected to prohibit or
materially and adversely affect the performance by the Trustee of
its obligations under, or the validity or enforceability of, the
Trust Agreement, the Swap Agreement or the Units; and
(vii) no consent, approval, authorization or order of any court
or 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, the Swap Agreement or the
Units, or for the consummation of the transactions contemplated
by the Trust Agreement or the Swap Agreement, except for such
consents, approvals, authorizations and orders, if any, that have
been obtained prior to the Closing Date.
(b) Within 30 days of the earlier of discovery by the Trustee or
receipt of notice by the Trustee of a breach of any representation or warranty
of the Trustee set forth in this Section 10.12 that materially and adversely
affects the interests of the Unitholders, the Trustee shall promptly cure such
breach in all material respects.
SECTION 10.13. Limitation of Powers and Duties. The Trust is
constituted solely for the purposes of acquiring and holding the Underlying
Securities, entering into the Swap Agreement, accepting the Guarantee, entering
into any ancillary agreements and issuing the Units. The Trust may not incur any
additional debt other than the debt that does not constitute a claim against the
Trust to the extent that excess proceeds are insufficient to pay such debt. The
Trustee is not authorized to acquire any other investments or engage in any
activities not authorized in the Trust Agreement and, in particular, the Trustee
is not authorized (i) to sell, assign, transfer, exchange, pledge, set-off or
otherwise dispose of any of the Underlying Securities or interests therein,
including to Unitholders (except upon termination of the Trust in accordance
with Article IX and Article XI of the Trust Agreement) or (ii) to do anything
that would cause the Trust to fail or cease to qualify as a "grantor trust" for
Federal income tax purposes.
SECTION 10.14. Preferential Collection of Claims Against the Trust.
Irrespective of whether the TIA shall apply to this Agreement, the Trustee shall
comply with TIA Section 311(a), excluding any creditor relationship listed in
TIA Section 311(b). A trustee who has resigned or been removed shall be subject
to TIA Section 311(a) to the extent required by TIA Section 311(a).
ARTICLE XI
Termination
SECTION 11.01. Termination of the Trust. (a) Except as otherwise
provided in Article IX, the respective obligations and responsibilities under
the Trust Agreement of the Depositor and the Trustee (other than the obligations
imposed by Section 10.05(b) and the obligations of the Trustee to provide
reports and other information under the Trust Agreement and to make
distributions to Unitholders as hereafter set forth) shall terminate upon the
distribution to such Holders of all amounts held in all the Accounts and
required to be paid to such Holders pursuant to the Trust Agreement; provided,
however, that in no event shall the Trust continue beyond the expiration of 21
years from the death of the last survivor of the descendants of Queen Elizabeth
II of England, living on the date of the Trust Agreement.
(b) Written notice of any termination shall be provided to each
Unitholder, the Depositor, each Swap Counterparty and any Guarantor and the
Rating Agencies pursuant to Section 12.05 within ten Business Days, unless such
termination occurs pursuant to the Scheduled Final Distribution Date.
(c) On the Scheduled Final Distribution Date, the Trustee shall
distribute to each Holder presenting and surrendering its Units, and to each
Holder delivering such security or indemnity to the Trustee as the Trustee may
require to save the Trustee and hold the Trustee harmless, the amount
distributable on such Distribution Date pursuant to Section 4.01 in respect of
the Units so presented and surrendered. Any funds not distributed on such
Distribution Date shall be set aside and held in trust for the benefit of
Unitholders either (i) not presenting and surrendering their Units in the
aforesaid manner or (ii) not delivering such security or indemnity to the
Trustee. as the Trustee may require to save the Trustee and hold the Trustee
harmless, and shall be disposed of in accordance with this Section and Sections
4.01 and 5.09. Immediately following the deposit of such funds in trust
hereunder, the Trust shall terminate.
ARTICLE XII
Miscellaneous Terms
SECTION 12.01. Amendment of Trust Agreement; Waivers. (a) The Trust
Agreement may be amended from time to time by the Depositor and the Trustee
without the consent of any of the Unitholders for any of the following purposes:
(i) to cure any ambiguity or defect or to correct or supplement any provision in
the Trust Agreement which may be defective or inconsistent with any other
provision in the Trust Agreement or with disclosure in the applicable prospectus
supplement; (ii) to add or supplement any credit support for the benefit of any
Unitholders, (iii) to amend the definitions of Trigger Amount and Maximum
Reimbursable Amount so as to increase, but not decrease, the respective amounts
contained in such definitions or to otherwise amend or waive the terms of
Section 10.05(b) in any manner which shall not adversely affect the Unitholders
in any material respect; (iv) to evidence and provide for the acceptance of
appointment under the Trust Agreement by a successor Trustee; (v)o to add to the
covenants, restrictions or obligations of the Depositor or the Trustee for the
benefit of the Unitholders, (vi) to comply with any requirements imposed by the
Internal Revenue Code or other applicable law, including any amendment necessary
to ensure the intended classification of the Trust for United States federal
income tax purposes or (vii) to add, modify, supplement or otherwise change any
of the terms of the Trust Agreement if no Unitholder will be materially and
adversely affected by such change; provided, however, that with respect to any
such amendment in this Section 12.01(a), the Rating Agency Condition shall be
satisfied with respect to such amendment. Section 12.01(a)(vii) shall not be
construed to require the consent of a Class of Units not materially and
adversely affected by any amendment to the Trust Agreement in connection with an
amendment pursuant to Section 12.01(b).
(b) The Trust Agreement may be amended from time to time by the
Depositor and the Trustee with the consent of Specified Percentage of the
outstanding Unit Principal Balance of each Class of Units materially and
adversely affected thereby. Unless specified in the related Trust Agreement, no
amendment to the Trust Agreement may change the principal amount, interest rate,
maturity, or other terms specified in the related Trust Agreement, of any Class
or Series of Units without the consent of 100% of the outstanding Unit Principal
Balance of each Class of Units affected thereby. The Rating Agency Condition
shall be satisfied with respect to such amendment unless Units representing 100%
of the Unit Principal Balance of all affected Units vote in favor of such
amendment with notice that the Rating Agency Condition will not be satisfied,
but in any case each applicable Rating Agency shall receive written notice of
such amendment.
(c) Promptly after the execution of any such amendment or modification,
the Trustee shall furnish a copy of such amendment or modification to each
Unitholder.
(d) Notwithstanding the foregoing, no amendment or modification to the
Trust Agreement shall be permitted unless the Trustee first receives an Opinion
of Counsel, provided at the expense of the party requesting such amendment, that
such amendment or modification will not alter the classification of the Trust
for U.S. federal income tax purposes. The Trustee shall not agree to any
amendment that would affect the rights or obligations of any Swap Counterparty
of the respective Trust, without first obtaining the approval of that Swap
Counterparty.
(e) For purposes of this Section 12.01, Schedule III to any Trust
Agreement and any Swap Agreements entered into in connection with any related
Trust shall not be considered part of the Trust Agreement. Section 7.02 shall
govern action taken under the Trust Agreement with respect to any amendments to
such Swap Agreements.
(f) Holders of Units evidencing not less than a Specified Percentage of
the Units of a particular Class may, on behalf of all Holders of the Units of
that Class, (1) waive, insofar as that Class is concerned, compliance by the
Depositor or the Trustee with any restrictive provisions of the Trust Agreement
before the time for such compliance or (2) waive any past default under the
Trust Agreement with respect to the Units of that Class, except for (A) a
default resulting from any failure to distribute amounts received as principal
of (and premium, if any) or any interest on any such Unit and (B) a default in
respect of any covenant or provision the modification or amendment of which
would require the consent of the Holder of each outstanding Unit affected by the
default.
(g) In executing or accepting the additional trusts created by any
amendment or the modifications thereby of the trusts created by the Trust
Agreement, the Trustee shall be entitled to receive, and (subject to the
standard of care provided in Article X hereof) shall be fully protected in
relying upon an Opinion of Counsel stating that the execution of such amendment
is authorized or permitted by the Trust Agreement and that all conditions
precedent thereto have been complied with. The Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Trustee's own
rights, duties or immunities under the Trust Agreement or otherwise.
SECTION 12.02. Counterparts. The Trust Agreement 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 but one and
the same instrument.
SECTION 12.03. Limitation on Rights of Unitholders. (a) The death or
incapacity of any Unitholder shall not operate to terminate the Trust Agreement
or the Trust Property, nor entitle such Unitholder'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 Trust Property, nor otherwise affect the
rights, obligations and liabilities of the parties thereto or any of them.
(b) Except as otherwise expressly provided herein, no Unitholder shall
have any right to control the operation and management of any Trust Property, or
the obligations of the parties thereto, nor shall anything in the Trust
Agreement set forth, or contained in the terms of the Units, be construed so as
to constitute the Unitholders from time to time as partners or members of an
association; nor shall any Unitholder be under any liability to any third person
by reason of any action taken by the parties to the Trust Agreement pursuant to
any provision thereof.
(c) No Unitholder shall have any right by virtue of any provision of
the Trust Agreement to institute any suit, action or proceeding in equity or at
law upon or under or with respect to the Trust Agreement.
SECTION 12.04. Governing Law. The Trust Agreement and each Unit issued
thereunder 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
therein without reference to such State' 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
thereunder shall be determined in accordance with such laws.
SECTION 12.05. Notices. All directions, demands and notices under the
Trust Agreement shall be in writing and shall be delivered to the offices of the
Trustee specified in the offering documents dated as of the Closing Date. Unless
otherwise provided in the Trust Agreement, any notice required to be given to a
holder of a Registered Unit will be given by facsimile to such number as may be
provided to the Trustee or be mailed to the last address of such holder set
forth in the applicable Unit Register. Any notice so mailed within the time
prescribed in the Trust Agreement shall be conclusively presumed to have been
duly given when mailed, whether or not the Unitholder receives such notice.
Notices given by facsimile will be effective upon confirmation (including
electronic confirmation) of effective transmission. With respect to Global
Securities, the Trustee may give any required notice to Unitholders in
accordance with applicable rules and procedures of DTC or other applicable
depository in satisfaction of any of its obligations to give any notice to
Unitholders.
Any required to be given to the Rating Agencies, if any, 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
the Rating Agencies at the addresses set forth in the Trust Agreement or as
otherwise specified by the applicable Rating Agencies.
SECTION 12.06. Severability of Terms. If any one or more of the
covenants, agreements or terms of the Trust Agreement shall be for any reason
whatsoever held invalid, then such covenants, agreements or terms shall be
deemed severable from the remaining covenants, agreements or terms of the Trust
Agreement and shall in no way affect the validity or enforceability of the other
terms of the Trust Agreement or of the Units or the rights of the Holders
thereof.
SECTION 12.07. Notice to Rating Agencies. The Trustee shall provide
notice to the Rating Agencies as soon as is reasonably practicable with respect
to each of the following of which the Trustee has actual knowledge:
(i) any material change or amendment to the Trust Agreement;
(ii) the occurrence of any Swap Default or Termination Event;
(iii) the resignation or termination of the Trustee;
(iv) the final payment to Holders of the Units;
(v) any change in the location of the Unit Account; and
(vi) any Security Default.
In addition, the Trustee shall promptly furnish to the Rating Agencies
copies of each report to Unitholders described in Section 4.02. 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 the Rating Agencies at the addresses
set forth in the Terms Schedule
SECTION 12.08. Perfection of Swap Counterparty Security Interest. At
the request of the Swap Counterparty, the Trustee will assist the Swap
Counterparty in the perfection of the security interest in the Trust Property
described in Section 3.04 and granted by the Trust to the Counterparty under the
Swap Agreement.
SECTION 12.09. No Recourse. Each Unitholder by accepting a Unit
acknowledges that such Unitholder's Units represent beneficial interests in the
Trust only and do not represent interests in or obligations of the Depositor,
the Trustee, the Swap Counterparty, the Guarantor or any Affiliate of the
foregoing Persons and no recourse may be had against such Persons or their
respective assets, except as may be expressly set forth in the Trust Agreement,
the Swap Agreement or the Units.
SECTION 12.10. Non-Petition. Prior to the date that is one year and one
day after all distributions in respect of the Units have been made, none of the
Trustee, the Trust or the Depositor shall take any action, institute any
proceeding, join in any action or proceeding or otherwise cause any action or
proceeding against any of the others under the United States Bankruptcy Code or
any other liquidation, insolvency, bankruptcy, moratorium, reorganization or
similar law ("Insolvency Law") applicable to any of them, now or hereafter in
effect, or which would be reasonably likely to cause any of the others to be
subject to, or seek the protection of, any such Insolvency Law.
SECTION 12.11. Merger and Consolidation The Trust shall not merge or
consolidate with any other trust, entity or person and the Trust shall not
acquire the assets of, or an interest in, any other trust, entity or person
except as specifically contemplated herein.
SECTION 12.12. Conflict With Trust Indenture Act . (a) If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Agreement by any of the provisions of the TIA,
such required provision shall control.
(b) The provisions of the TIA Sections 310 through 317 that impose
duties on any Person (including the provisions automatically deemed included
herein unless expressly excluded by this Agreement) are a part of and govern
this Agreement, whether or not physically contained herein.
(c) Except as expressly provided in this Agreement, all provisions
specifically referencing the TIA shall be inapplicable until such time as this
Agreement is qualified under the TIA.
IN WITNESS WHEREOF, the Depositor and the Trustee have caused this
instrument to be duly executed by their respective officers thereunto duly
authorized as of the date first above written.
MS STRUCTURED ASSET CORP.
By
-----------------------------
Name:
Title:
LASALLE BANK NATIONAL
ASSOCIATION, as Trustee on behalf
of the Trust identified in
Schedule I to the Trust Agreement
dated today's date, and not in
its individual capacity
By
-----------------------------
Name:
Title:
EXHIBIT A
TRUST AGREEMENT
TRUST AGREEMENT, between MS Structured Asset Corp. (the "Depositor")
and LaSalle Bank National Association (the "Trustee"), made as of the date set
forth in Schedule I attached hereto, which Schedule together with Schedules II
and III attached hereto, are made a part hereof. The terms of the Standard Terms
for Trust Agreements, dated March 4, 2003 (the "Standard Terms") are, except
to the extent otherwise expressly stated, hereby incorporated by reference
herein in their entirety with the same force and effect as though set forth
herein. Capitalized terms used herein and not defined shall have the meanings
defined in the Standard Terms. References to "herein", "hereunder", "this Trust
Agreement" and the like shall include the Schedules attached hereto and the
Standard Terms so incorporated by reference.
WHEREAS, the Depositor and the Trustee desire to establish the Trust
identified in Schedule I attached hereto (the "Trust") for the primary purposes
of (i) holding the Underlying Securities, (ii) entering into any Swap Agreement
with the Swap Counterparty and (iii) issuing the Units;
WHEREAS, the Depositor desires that the respective beneficial interests
in the Trust be divided into transferable fractional shares, such shares to be
represented by the Units;
WHEREAS, the Depositor desires to appoint the Trustee as trustee of the
Trust and the Trustee desires to accept such appointment;
WHEREAS, the Depositor shall transfer, convey and assign to the Trust
without recourse, and the Trust shall acquire, all of the Depositor's right,
title and interest in and under the Underlying Securities and other property
identified in Schedule II to the Trust Agreement (the "Trust Property"); and
WHEREAS, the Trust agrees to acquire the Trust Property specified
herein in consideration for Units having an initial Unit Principal Balance
identified in Schedule I attached hereto, subject to the terms and conditions
specified in the Trust Agreement;
NOW THEREFORE, the Depositor hereby appoints the Trustee as trustee
hereunder and hereby requests the Trustee to receive the Underlying Securities
from the Depositor and to issue in accordance with the instructions of the
Depositor Units having the terms specified in Schedule I attached hereto, and
the Trustee accepts such appointment and, for itself and its successors and
assigns, hereby declares that it shall hold all the estate, right, title and
interest in any property contributed to the trust account established hereunder
(except property to be applied to the payment or reimbursement of or by the
Trustee for any fees or expenses which under the terms hereof is to be so
applied) in trust for the benefit of all present and future Holders of the
fractional shares of beneficial interest issued hereunder, namely, the
Unitholders, and subject to the terms and provisions hereof and of the Standard
Terms.
IN WITNESS WHEREOF, each of the undersigned has executed this
instrument as of the date set forth in Schedule I attached hereto.
LASALLE BANK NATIONAL ASSOCIATION
as Trustee on behalf of the Trust identified
in Schedule I hereto, and not in its
individual capacity
By:
---------------------------------------
Name:
Title:
MS STRUCTURED ASSET CORP.
By:
---------------------------------------
Name:
Title:
Attachments: Schedules [I, II and III]
Schedule I
(Terms of Trust and Units)
Trust: SATURNS Trust No. [__________]
Date of Trust Agreement: [____________]
Units:
Initial Unit Principal Balance
of the Units:
[Initial Notional Amount
of the Units:
Issue Price of Units:
Number of Units:
Minimum Denomination:
Cut-off Date:
Closing Date:
Specified Currency: [United States dollars]
Business Day: New York, New York and Chicago, Illinois
Interest Rate: [_____]% per annum [basis]
Interest Reset Period: [Not Applicable]
Rating:
Rating Agencies: [Moody's and S&P]
Scheduled Final Distribution Date: [_____________]. The Units will have the
same final maturity as the Underlying
Securities.
Prepayment/Redemption: [The Trust Property is subject to
redemption in accordance with the terms of
the Underlying Securities and as described
in Schedule II and is subject to call in
accordance with Schedule III. Any such
call or redemption will result in the
redemption of a proportional amount of the
Units [and a proportional reduction in the
Notional Amount of the Units. ]]
Additional Distribution:
Swap Agreement:
Swap Counterparty: Party A to the Swap Agreement referred to
in Schedule III or any assignee thereof.
[Guaranty: Morgan Stanley shall guarantee the
obligations of [any Morgan Stanley
affiliate who is a Swap Counterparty]. ]
Swap Notional Amount:
Swap Payment Date:
Swap Rate:
Distribution Date: Each [__________], or the next succeeding
Business Day if such day is not a Business
Day, commencing December 1, 2002, and any
other date upon which funds are available
for distribution in accordance with the
terms hereof.
If any payment with respect to the
Underlying Securities held by the Trust is
not received by the Trustee by 12 noon
(New York City time) on a Distribution
Date, the corresponding distribution on
the Units will not occur until the next
Business Day that the Trust is in receipt
of proceeds of such payment prior to 12
noon, with no adjustment to the amount
distributed.
Record Date: Each [____________], regardless of whether
such day is a Business Day.
Form: [Global Security]
Depositary: [DTC]
Specified Percentage:
Trustee Fees and Expenses: [As compensation for and in payment of
trust expenses related to its services
hereunder other than Extraordinary Trust
Expenses, the Trustee will receive Trustee
Fees on each Distribution Date in the
amount equal to $3,750. The Trustee Fee
shall cease to accrue after termination of
the Trust. The "Trigger Amount" with
respect to Extraordinary Trust Expenses
for the Trust is $25,000 and the Maximum
Reimbursable Amount is $100,000. The
Trustee Fee will be paid by the Expense
Administrator. Expenses will be reimbursed
by the Expense Administrator in accordance
with the Expense Administration
Agreement.]
[Expense Administrator: The Depositor will act as Expense
Administrator on behalf of the Trust
pursuant to an Expense Administration
Agreement, dated as of the date of the
Trust Agreement (the "Expense
Administration Agreement"), between the
Depositor as Expense Administrator (the
"Expense Administrator") and the Trust.
The Expense Administrator will receive a
fee equal to [_____]% per annum of the
principal amount of the Underlying
Securities held by the Trust as its fee,
calculated on the basis of a 360 day year
consisting of twelve 30 day months (the
"Expense Administration Fee"). The Expense
Administrator's fee is payable only from
available interest receipts received with
respect to the Underlying Securities after
application of such receipts to payment of
accrued interest on the Units.
The Expense Administrator will be
responsible for paying the Trustee Fee and
reimbursing certain other expenses of the
Trust in accordance with the Expense
Administration Agreement.]
Listing: [The Depositor has applied to list the
Units on [____]
ERISA Restrictions: [None][No Plan Restriction][25%
Test][Prohibited Transaction Exemption
Restriction]
QIB Restriction:
Primary Offering Securities: The Trustee, as purchaser of the
Underlying Securities, hereby assigns to
the Unitholders its rights against the
related Underlying Security Issuers and
the Placement Agents under the U.S.
federal and state securities laws with
respect to its purchase of the Underlying
Securities. Accordingly, Unitholders may
proceed directly against the related
Underlying Security Issuers of Underlying
Securities and the Placement Agents to
enforce those rights without first
proceeding against the Trust, the Trustee
or any other person or entity. Each
Underlying Security Issuer and its
Placement Agents have acknowledged the
existence of such assignment and agreed
not to contest its enforceability.
The Trustee shall remove from Trust
Property any Underlying Securities, in
whole and not in part, for which removal
of such Underlying Securities is required
to effectuate a final judgment or decree
which requires a right of rescission with
respect to such Underlying Securities in
connection with any action brought under
federal or state securities laws in
respect of such Underlying Securities.
[Disqualified Underlying Security: For Primary Offering Securities, insert
provisions from prospectus]
[Liquidation Events: For Primary Offering Securities, revise
provisions as specified in prospectus]
[Eligible Underlying Security: For Primary Offering Securities, restrict
definition as specified in prospectus]
Trust Wind-Up Event: [The following Trust Wind-Up Events shall
not apply:]
[The following additional events shall be
Trust Wind-Up Events:]
[If (i) cash settlement applies under the
Swap Agreement, (ii) a Trust Wind-Up Event
has occurred in connection with the
exercise of any call rights under the Swap
Agreement and (iii) the Selling Agent
cannot obtain a bid for the Underlying
Securities in excess of 100% of the
aggregate Unit Principal Balance of the
Units and accrued interest on the
Underlying Securities, then the Underlying
Securities will not be sold, the Swap
Counterparty's exercise of the call rights
will be rescinded (and the Swap
Counterparty shall be entitled to exercise
such options in the future) and any
related Trust Wind-Up Event will be deemed
not to have occurred.]
Termination:
[Distributions of Securities: Provisions of the Standard Terms allowing
for otherwise providing for distributions
of Underlying Securities with respect to
the Units in connection with Liquidation
Events or Trust Wind-Up Events shall not
be incorporated herein.]
[Indemnification by Unitholders: Provisions of the Standard Terms allowing
for otherwise providing for Unitholders to
offer indemnity to the Trustee with
respect to a Trigger Event or to tender
amounts in respect of a Swap Termination
Payment shall not be incorporated herein.]
Self-Tenders by Underlying
Security Issuer: [The Trust will not participate in any
self-tender by the Underlying Security
Issuer for the Underlying Securities and
the Trustee will not accept any
instructions to the contrary from the
Unitholders. However, the Swap
Counterparty may exercise the Swap
Agreement at any time in connection with a
self-tender.]
Depositor Optional Exchange: [Depositor Optional Exchange shall be
subject to the consent of [the Swap
Counterparty][the holder of Call
Rights][the Expense Administrator.]
[Depositor Optional Exchange shall be
available on the following dates instead
of the dates specified in the Standard
Terms].
Terms of Retained Interest: Notwithstanding any other provision herein
or in the Standard Terms, the Depositor
retains the right to receive any and all
interest that accrues on the Underlying
Securities prior to the Closing Date. The
Depositor will receive such accrued
interest on the first Distribution Date
(or redemption date if earlier) for the
Units and such amount shall be paid from
the interest payment made with respect to
the Underlying Securities on the first
Distribution Date.
The amount of the Retained Interest is
$[_____].
If a Underlying Security Default occurs on
or prior to the first Distribution Date
and the Depositor does not receive such
Retained Interest amount in connection
with such Distribution Date, the Depositor
will have a claim for such Retained
Interest, and will share pro rata with
holders of the Units to the extent of such
claim in the proceeds from the recovery on
the Underlying Securities.
Call Option Terms: [Specify terms of Call Option, Call
Rights, Warrants, if applicable.]
Sale of Underlying Securities: [If cash settlement applies and if the
Swap Counterparty exercises any of its
call rights other than in connection with
a redemption of or a self-tender for the
Underlying Securities by the Underlying
Security Issuer (or to the extent such
exercise corresponds to such redemption or
self-tender), a number of Underlying
Securities corresponding to the number of
call rights exercised by the Swap
Counterparty will be sold by the Selling
Agent on behalf of the Trust.
If the Selling Agent cannot obtain a bid
for the Underlying Securities in excess of
100% of the aggregate Unit Principal
Balance of the Class A Units to be
redeemed and accrued interest on the
Underlying Securities to be sold, then the
Underlying Securities will not be sold,
the Swap Counterparty's exercise will be
rescinded (and the Swap Counterparty shall
be entitled to exercise such call rights
in the future) and any related Trust
Wind-Up Event will be deemed not to have
occurred.]
Selling Agent: [Morgan Stanley & Co. Incorporated.
Notwithstanding any provision of the
Standard Terms to the contrary, any sale
of the Underlying Securities shall be
conducted by and through the Selling Agent
and not the Trustee. ]
Other Terms:
Schedule II
(Terms of Trust Property)
Underlying Securities:
Underlying Security Issuer:
[Primary Offering Securities: Applicable]
Principal Amount:
Underlying Security Rate:
Credit Ratings: [___ by Moody's]
[___ by S&P]
Listing:
Underlying Security Issuance
Agreement:
Form: [Global]
Currency of
Denomination: [United States dollars]
Acquisition Price by Trust:
Underlying Security Payment Date:
Original Issue Date:
Maturity Date:
Sinking Fund Terms:
Redemption Terms:
CUSIP No.:/ISIN No.
Underlying Security Trustee:
Available Information
Regarding the Underlying Security
Issuer (if other than U.S.
Treasury obligations): The Security Issuer is subject to the
informational requirements of the
Securities Exchange Act of 1934, as
amended, and in accordance therewith files
reports and other information with the
Securities and Exchange Commission (the
"Commission"). Such reports and other
information can be inspected and copied at
the public reference facilities maintained
by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549 and at the
following Regional Offices of the
Commission: Woolworth Building, 233
Broadway, New York, New York 10279, and
Northwest Atrium Center, 500 West Madison
Street, Chicago, Illinois 60661. Copies of
such materials can be obtained from the
Public Reference Section of the Commission
at 450 Fifth Street, N.W., Washington,
District of Columbia 20549 at prescribed
rates.
[Schedule III]
[(Swap Agreement Confirmation)]
EXHIBIT B1
FORM OF REGISTERED UNIT
STRUCTURED ASSET TRUST UNIT REPACKAGINGS ("SATURNS")
SERIES [________]
[CLASS __] UNITS
[EACH PURCHASER OR OTHER TRANSFEREE OF THIS UNIT OR ANY INTEREST HEREIN OF THIS
UNIT, BY ITS ACCEPTANCE HEREOF, IS DEEMED TO REPRESENT AND WARRANT FOR THE
BENEFIT OF THE TRUSTEE AND THE DEPOSITOR OF THE TRUST, AND EACH DISTRIBUTION
PARTICIPANT AS DEFINED IN THE TRUST AGREEMENT THAT SUCH PURCHASER OR OTHER
TRANSFEREE IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT. ]
[IF THE TRUST AGREEMENT PROVIDES THAT THE 25% TEST APPLIES, A DEFINITIVE
PURCHASE AGREEMENT MUST BE EXECUTED AND DELIVERED BY THE PURCHASER OR THE
PROPOSED TRANSFEREE WHICH AGREEMENT WILL CONTAIN ADDITIONAL REPRESENTATIONS,
INCLUDING WHETHER THE PURCHASER OR PROPOSED TRANSFEREE IS A (I) "EMPLOYEE
BENEFIT PLAN" (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA")), WHETHER OR NOT IT IS SUBJECT TO THE
FIDUCIARY RESPONSIBILITY PROVISIONS OF TITLE I OF ERISA, INCLUDING ANY U.S.
GOVERNMENTAL PLANS AND ANY FOREIGN GOVERNMENTAL OR PRIVATE PENSION PLANS, (II)
"PLAN" DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE"), OR (III) ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN
ASSETS BY REASON OF A PLAN'S INVESTMENT IN SUCH ENTITY OR OTHERWISE, AND, IF SO,
WHETHER SUCH PERSON IS SUBJECT TO TITLE I OF ERISA, SECTION 4975 OF THE CODE OR
ANY SUBSTANTIALLY SIMILAR LAW.]
[IF THE TRUST AGREEMENT PROVIDES THAT THE PROHIBITED TRANSACTION EXEMPTION
RESTRICTION APPLIES, BY ITS ACQUISITION OF ANY UNIT, THE HOLDER WILL BE DEEMED
TO HAVE REPRESENTED AND WARRANTED ON EACH DAY THAT IT HOLDS SUCH UNIT EITHER
THAT (X) IT IS NOT A (I) "EMPLOYEE BENEFIT PLAN" (AS DEFINED IN SECTION 3(3) OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"))
SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF TITLE I OF ERISA, (II)
"PLAN" DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE") SUBJECT TO SECTION 4975 OF THE CODE OR (III) ENTITY WHOSE
UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A PLAN'S INVESTMENT IN SUCH
ENTITY OR OTHERWISE OR (IV) GOVERNMENTAL PLAN WHICH IS SUBJECT TO ANY FEDERAL,
STATE OR LOCAL LAW THAT IS SUBSTANTIALLY SIMILAR TO THE PROVISIONS OF SECTION
406 OF ERISA OR SECTION 4975 OF THE CODE, OR (Y) ITS PURCHASE, HOLDING AND
DISPOSITION OF A UNIT WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION
406 OF ERISA OR SECTION 4975 OF THE CODE (OR, IN THE CASE OF A GOVERNMENTAL
PLAN, ANY SUBSTANTIALLY SIMILAR FEDERAL, STATE OR LOCAL LAW) UNLESS AN EXEMPTION
IS AVAILABLE (ALL OF THE CONDITIONS WHICH HAVE BEEN SATISFIED) OR IN ANY OTHER
VIOLATIONS OF AN APPLICABLE REQUIREMEMENT OF ERISA, THE INTERNAL REVENUE CODE OR
OTHER LAW.]
[IF THE TRUST AGREEMENT PROVIDES THAT THE NO PLAN RESTRICTION APPLIES, THE
HOLDER, AND EACH FIDUCIARY WHICH CAUSES ANY SUCH PERSON TO ACQUIRE ANY UNIT, IN
ITS INDIVIDUAL AS WELL AS ITS FIDUCIARY CAPACITY, WILL BE DEEMED BY SUCH
PURCHASE, HOLDING OR ACQUISITION, ON EACH DATE ON WHICH THE UNIT IS HELD BY SUCH
PERSON, TO HAVE REPRESENTED THAT IT IS NOT A (I) "EMPLOYEE BENEFIT PLAN" (AS
DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
AS AMENDED ("ERISA")) SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF
TITLE I OF ERISA, (II) "PLAN" DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE") SUBJECT TO SECTION 4975 OF THE
CODE, (III) ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A
PLAN'S INVESTMENT IN SUCH ENTITY OR OTHERWISE OR (IV) GOVERNMENTAL OR OTHER PLAN
SUBJECT TO REQUIREMENTS SUBSTANTIALLY SIMILAR TO TITLE I OF ERISA OR SECTION
4975 OF THE INTERNAL REVENUE CODE.]
[EACH PERSON THAT ACQUIRES A UNIT, AND EACH FIDUCIARY WHO CAUSES A PERSON TO
ACQUIRE A UNIT, IN ITS INDIVIDUAL AS WELL AS ITS FIDUCIARY CAPACITY, AGREES TO
INDEMNIFY AND HOLD HARMLESS THE DEPOSITOR, THE TRUSTEE, [MS&CO.] AND THEIR
RESPECTIVE AFFILIATES FROM ANY COST, DAMAGES, LOSS OR EXPENSE, INCURRED BY THEM
AS A RESULT OF THE REPRESENTATIONS MADE BY SUCH PERSON OR FIDUCIARY NOT BEING
TRUE.]
[THIS CERTIFICATE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE TRUST AGREEMENT
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY. THIS UNIT IS EXCHANGEABLE FOR UNITS REGISTERED IN THE
NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE TRUST AGREEMENT AND MAY NOT BE TRANSFERRED EXCEPT
AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF
THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY.]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO TRUSTEE 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 UNIT MAY BE SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AS PROVIDED IN
THE TRUST AGREEMENT FOR THE TRUST TO WHICH THIS UNIT RELATES.]
[THIS UNIT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.]
Unit No. [__] CUSIP No. [_______________]
REGISTERED INITIAL AMOUNT: $[_________] FRACTIONAL SHARE: [____]%
AGGREGATE INITIAL AMOUNT OF UNITS: $[25,000,000]
REGISTERED INITIAL NUMBER: [__]
AGGREGATE INITIAL NUMBER
OF ALL UNITS: [__]
STRUCTURED ASSET TRUST UNIT REPACKAGINGS ("SATURNS")
SERIES [________]
[CLASS __] UNITS
This certifies that Cede & Co. is the registered owner of an undivided
fractional interest in the Trust Property referred to below. The amount due on
this Unit on any Distribution Date is the fractional undivided interest
represented by this Unit of the amount of the distribution on the Units as
determined pursuant to the Trust Agreement.
The Trust Property will be held in trust by the Trustee identified in
the Trust Agreement (the "Trust"). The Trust has been created pursuant to a
Trust Agreement, dated as of [__________] (the "Trust Agreement"), between
LaSalle Bank National Association, as Trustee of the Trust (the "Trustee"), and
MS Structured Asset Corp.
To the extent not defined herein, all capitalized terms shall have the
meanings assigned to such terms in the Trust Agreement and the Terms Schedule
attached thereto. This Unit is one of the Units described in the Trust Agreement
and is issued under and subject to the terms, provisions and conditions of the
Trust Agreement. By acceptance of this Unit, the Holder assents to and becomes
bound by the Trust Agreement.
The Trust Property consists of the Securities (excluding the Retained
Interest of the Depositor) and any Permitted Investments.
Subject to the terms and conditions of the Trust Agreement (including
the availability of funds for distributions and any grace period or cure period
applicable to the Trust Property) and to the prior obligation of the Trust to
pay (i) all amounts due to the Swap Counterparty pursuant to the Swap Agreement
and (ii) all unpaid Extraordinary Trust Expenses, and until the obligations
created by the Trust Agreement shall have terminated in accordance therewith,
there will be distributed on each Distribution Date, to the Person in whose name
this Unit is registered at the close of business on the Record Date, such
Unitholder's fractional undivided interest in the amounts to be distributed to
Holders of Units pursuant to the Trust Agreement on such Distribution Date. The
amount to be distributed on the Scheduled Final Distribution Date will include
the full repayment of principal.
Distributions on this Certificate will be made by wire transfer in
accordance with a written notice to the Trustee providing appropriate wire
transfer instructions given no later than 15 calendar days prior to the
applicable Distribution Date. If no such notice has been given, distributions
will be made by the Trustee by check mailed to the Unitholder of record at its
address as it appears in the Unit Register without the presentation or surrender
of this Certificate or the making of any notation hereon, by wire transfer of
immediately available funds. 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 office or agency
maintained for that purpose by the Trustee in the Chicago, Illinois.
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 rights, benefits, obligations and duties evidenced thereby. A copy of the
Trust Agreement may be examined during normal business hours at the Corporate
Trust Office of the Trustee, located at 135 South LaSalle Street, Suite 1625,
Chicago, Illinois 60603 and at such other places, if any, designated by the
Trustee, by any Unitholder upon request.
Reference is hereby made to the further terms of this Certificate set
forth on the reverse hereof, which further terms shall for all purposes have the
same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer 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.
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust, and not in its
individual capacity, has caused this Certificate to be duly executed.
SATURNS TRUST NO. ________
BY: LASALLE BANK NATIONAL
ASSOCIATION,
as Trustee
By:
-------------------------
Authorized Signatory
DATED:
[SEAL]
Trustee's Certificate of
Authentication:
This is one of the Units referred
to in the within-mentioned Agreement.
LASALLE BANK NATIONAL ASSOCIATION,
as Authenticating Agent
By:
----------------------------
Authorized Signatory
[If not a Global Security: Attachments: Schedule I to the Trust Agreement]
STRUCTURED ASSET TRUST UNIT REPACKAGINGS ("SATURNS")
SERIES ________
The Trust Agreement permits the amendment thereof, in certain
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registerable in the Unit
Register upon surrender of this Certificate for registration of transfer at the
office or agency maintained by the Trustee in Chicago, Illinois, accompanied by
a written instrument of transfer and, if applicable, a transfer letter in form
and substance satisfactory to the Trustee duly completed and executed by the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of authorized denominations evidencing
the same aggregate interest in the Trust will be issued to the designated
transferee.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates
representing different numbers of Units which evidence the same aggregate
interest in the Trust, as requested by the Holder surrendering the same. No
service charge will be made for any such registration of transfer or exchange,
but the Trustee may require payment of a sum sufficient to cover any tax or
governmental charges payable in connection therewith.
The Depositor, the Trustee and any agent of the Depositor or the
Trustee may treat the person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Depositor, the Trustee, or any
such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement and
the Trust created thereby will terminate upon the payment to Unitholders of all
amounts required to be paid to them pursuant to the Trust Agreement.
Notwithstanding anything contained in the Trust Agreement to the
contrary the Trust Agreement has been accepted by LaSalle Bank National
Association not in its individual capacity but solely as Trustee and in no event
shall LaSalle Bank National Association have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Depositor thereunder or in any of the certificates, notices or agreements
delivered pursuant thereto, as to all of which recourse shall be had solely to
the assets of the Depositor, and under no circumstances shall LaSalle Bank
National Association be personally liable for the payment of any indebtedness or
expenses of the Trust. The Units do not represent interests in or obligations of
the Trustee and the Trustee shall not be responsible or accountable for any tax,
accounting or other treatment proposed to be applied to the Units or any
interest therein except as expressly provided in the Trust Agreement.
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 typewrite name and address, including postal zip code, of
assignee)
- ----------------------------------------------------------------------------
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
- ----------------------------------------------------------------------------
Attorney to transfer said Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.
Dated:
_______________________________ */
Signature Guaranteed:
_______________________________ */
_____________
*/ NOTICE: The signature to this assignment must correspond with the
name as it appears upon the face of the within Certificate in every particular,
without alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member of the New York Stock Exchange or a commercial bank or
trust company.
[OPTION TO ELECT EXCHANGE
The undersigned hereby irrevocably requests and instructs the Trustee
to effect exchange of this Unit for the Trust Property in which this Unit
evidences a beneficial interest (or portion thereof specified below) pursuant to
its terms and in accordance with the Term Schedule and Section 5.12 of the Trust
Agreement, to be delivered to the undersigned, at
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Please print or typewrite
name and address of the undersigned.)
If less than the entire Unit Principal Balance of this Unit is to be
redeemed, specify the portion thereof which the Holder elects to have exchanged:
___________________; and specify the denomination or denominations (which shall
not be less than the minimum authorized denomination) of the Units to be issued
to the Holder for the portion of the within Units not being exchanged (in the
absence of any such specification, one such Unit will be issued for the portion
not being redeemed):
Dated: ________________