Exhibit 4.5.1
SERIES SUPPLEMENT
CORPORATE BACKED CALLABLE TRUST CERTIFICATES
J.C. PENNEY DEBENTURE-BACKED SERIES 2007-1 TRUST
between
SELECT ASSET INC.,
as Depositor,
and
U.S. BANK NATIONAL ASSOCIATION,
as Trustee,
CORPORATE BACKED CALLABLE TRUST CERTIFICATES
Dated as of January 31, 2007
Table of Contents
Page
Section 1. Incorporation of Standard Terms.......................................................................1
Section 2. Definitions...........................................................................................1
Section 3. Designation of Trust and Certificates.................................................................4
Section 4. Trust Certificates....................................................................................4
Section 5. Distributions.........................................................................................5
Section 6. Miscellaneous.........................................................................................6
Section 7. Governing Law.........................................................................................7
Section 8. Counterparts..........................................................................................7
Section 9. Amendments............................................................................................7
SCHEDULE I J.C. PENNEY DEBENTURE-BACKED SERIES 2007-1 UNDERLYING SECURITIES SCHEDULE
EXHIBIT A-1 FORM OF TRUST CERTIFICATE CLASS A-1
EXHIBIT A-2 FORM OF TRUST CERTIFICATE CLASS A-2
EXHIBIT B FORM OF WARRANT AGENT AGREEMENT
EXHIBIT C FORM OF INVESTMENT LETTER
i
SERIES SUPPLEMENT
CORPORATE BACKED CALLABLE TRUST CERTIFICATES
J.C. PENNEY DEBENTURE-BACKED SERIES 2007-1
SERIES SUPPLEMENT, J.C. Penney Debenture-Backed Series 2007-1
Trust, dated as of January 31, 2007 (the "Series Supplement"), by and between
Select Asset Inc., as Depositor (the "Depositor"), and U.S. Bank National
Association, as Trustee (the "Trustee").
W I T N E S S E T H:
WHEREAS, the Depositor desires to create the Trust designated
herein (the "Trust") by executing and delivering this Series Supplement, which
shall incorporate the terms of the Standard Terms for Trust Agreements, dated
as of the date hereof (the "Standard Terms" and, together with this Series
Supplement, the "Trust Agreement" in respect of the Trust), by and between the
Depositor and the Trustee, as modified by this Series Supplement;
WHEREAS, the Depositor desires to deposit into the Trust the
Underlying Securities described on Schedule I attached hereto, the general
terms of which are described in the Prospectus Supplement under the heading
"Description of the Deposited Assets--Underlying Securities;"
WHEREAS, in connection with the creation of the Trust and the
deposit therein of the Underlying Securities, it is desired to provide for the
issuance of trust certificates evidencing undivided interests in the Trust;
and
WHEREAS, the Trustee has joined in the execution of the Standard
Terms and this Series Supplement to evidence the acceptance by the Trustee of
the Trust.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants expressed herein, it is hereby agreed by and between the
Depositor and the Trustee as follows:
Section 1. Incorporation of Standard Terms. Except as otherwise
provided herein, all of the provisions of the Standard Terms are hereby
incorporated herein by reference in their entirety, and this Series Supplement
and the Standard Terms shall form a single agreement between the parties. In
the event of any inconsistency between the provisions of this Series
Supplement and the provisions of the Standard Terms, the provisions of this
Series Supplement will control with respect to the J.C. Penney
Debenture-Backed Series 2007-1 Certificates and the transactions described
herein.
Section 2. Definitions.
(a) Except as otherwise specified herein or as the context may
otherwise require, the following terms shall have the respective meanings set
forth below for all purposes under this Series Supplement. Capitalized terms
used but not defined herein shall have the meanings
assigned to them in the Standard Terms. Terms defined in the Standard Terms
but not used herein shall not, unless otherwise indicated, apply to this
Series Supplement.
"Allocation Discount Rate" shall mean (x) in the case of the P&I
Class and the calculation of the P&I Class Allocation with respect thereto,
7.00% per annum, and (y) in the case of the IO Strip Class and the calculation
of the IO Strip Class Allocation with respect thereto, 7.00% per annum.
"Call Date" shall have the meaning set forth in the Warrant Agent
Agreement.
"Call Price" shall mean the purchase price of an Underlying
Security to be paid by the holder of a Call Warrant to the Trust in connection
with its exercise of a Call Warrant as specified in the Warrant Agent
Agreement pursuant to which the applicable Call Warrant was issued.
"Certificate Principal Balance" shall have the meaning specified
in Section 3 hereof.
"Certificates" shall have the meaning specified in Section 3
hereof.
"Class A-1 Certificates" shall mean the Certificates, in the form
attached hereto as Exhibit A-1, to be issued by the Trust representing a
proportionate undivided beneficial ownership interest in certain distributions
to be made by the Trust and having the characteristics described herein and in
the Certificates. The Class A-1 Certificates shall be a P&I Class for purposes
of the Trust Agreement.
"Class A-2 Certificates" shall mean the Certificates, in the form
attached hereto as Exhibit A-2, to be issued by the Trust representing a
proportionate undivided beneficial ownership interest in certain distributions
to be made by the Trust and having the characteristics described herein and in
the Certificates. The Class A-2 Certificates shall be an IO Strip Class for
purposes of the Trust Agreement.
"Class A-2 Rate" shall have the meaning set forth in Section 3
hereof.
"Closing Date" shall mean January 31, 2007.
"Collection Period" shall mean, (i) with respect to each March
Distribution Date, the period beginning on the day after the September
Distribution Date of the prior year (or in the case of the first Collection
Period, the Closing Date) and ending on such March Distribution Date,
inclusive, and (ii) with respect to each September Distribution Date, the
period beginning on the day after the March Distribution Date of such year and
ending on such September Distribution Date, inclusive; provided, however, that
clauses (i) and (ii) shall be subject to Section 4.01(j) of the Standard
Terms.
"Depository" shall mean The Depository Trust Company, its nominees
and their respective successors.
2
"Distribution Date" shall mean March 1 and September 1 of each
year (or if such date is not a Business Day, the next succeeding Business
Day), commencing on the Initial Distribution Date, and ending on the earlier
of the Final Scheduled Distribution Date and any date on which all Underlying
Securities are redeemed, prepaid or liquidated in whole for any reason other
than at their maturity.
"Final Scheduled Distribution Date" shall mean the Distribution
Date in March 2097.
"Initial Distribution Date" shall mean the Distribution Date in
March 2007.
"Maturity Date" shall have the meaning specified in Schedule I
hereto.
"Prepaid Ordinary Expenses" shall be zero for this Series.
"Prospectus Supplement" shall mean the final Prospectus
Supplement, dated January 30, 2007, relating to the offering of the Class A-1
Certificates.
"Rating Agencies" shall mean Moody's and S&P.
"Securities Intermediary" shall mean initially, U.S. Bank National
Association.
"Series" shall mean Corporate Backed Callable Trust Certificates,
J.C. Penney Debenture-Backed Series 2007-1.
"Trust Property" shall mean the Underlying Securities described on
Schedule I hereto, the Certificate Account and any additional Underlying
Securities sold to the Trust pursuant to Section 2.01(g) of the Standard
Terms.
"Underlying Securities" shall mean $55,000,000 aggregate principal
amount of 7 5/8% Debentures due 2097 issued by the Underlying Securities
Issuer, as set forth in Schedule I attached hereto.
"Underlying Securities Guarantor" shall mean J.C. Penney Company,
Inc.
"Underlying Securities Events of Default" shall mean, any event of
default on the Underlying Securities under the Underlying Securities Issuance
Agreement.
"Underlying Securities Issuance Agreement" shall mean the
Indenture, dated as of April 1, 1994, between the Underlying Securities Issuer
and U. S. Bank National Association, as successor to First Trust of
California, National Association, successor trustee to Bank of America
National Trust and Savings Association and predecessor trustee to U.S. Bank,
as supplemented and pursuant to which the Underlying Securities were issued.
"Underlying Securities Issuer" shall mean J.C. Penney Corporation,
Inc.
"Underlying Securities Trustee" shall mean U. S. Bank National
Association, as successor to First Trust of California, National Association.
3
"Underwriter" shall mean Lehman Brothers Inc. acting for itself
and as representative of RBC Dain Rauscher Inc.
"Warrant Agent Agreement" shall mean that certain Warrant Agent
Agreement, dated as of the date hereof, between the Depositor and U.S. Bank
National Association, as Warrant Agent and as Trustee, as the same may be
amended from time to time.
Section 3. Designation of Trust and Certificates. The Trust
created hereby shall be known as the "Corporate Backed Callable Trust
Certificates, J.C. Penney Debenture-Backed Series 2007-1 Trust." The
Certificates evidencing certain undivided ownership interests therein shall be
known as "Corporate Backed Callable Trust Certificates, J.C. Penney
Debenture-Backed Series 2007-1." The Certificates shall consist of the Class
A-1 Certificates and the Class A-2 Certificates (together, the
"Certificates").
(a) The Class A-1 Certificates shall be held through the
Depository in book-entry form and shall be substantially in the form attached
hereto as Exhibit A-1. The Class A-2 Certificates shall initially be held
through the Depository in book-entry form and, as set forth in Section 5.04(l)
of the Standard Terms, shall be held subsequent to the Closing Date in
physical form or through the Depository in book-entry form and shall be
substantially in the form attached hereto as Exhibit A-2. The Class A-1
Certificates shall be issued in denominations of $25. The Class A-2
Certificates shall be issued in minimum notional denominations of $100,000 and
in integral multiples of $1 in excess thereof; provided, however, that on any
Call Date on which a Warrant Holder shall purchase Underlying Securities in
connection with the exercise of a Call Warrant in accordance with the
provisions of Section 4.08 of the Standard Terms, Certificates may be issued
in other denominations. Except as provided in the Standard Terms, the Trust
shall not issue additional Certificates or incur any indebtedness.
(b) The Class A-1 Certificates shall consist initially of
2,200,000 Certificates having an initial aggregate certificate principal
balance (the "Certificate Principal Balance") of $55,000,000. The Class A-2
Certificates, which are an IO Strip Class of Certificates, shall have an
initial aggregate Notional Amount of $55,000,000.
(c) The holders of the Class A-1 Certificates will be entitled to
receive on each Distribution Date the interest, if any, received on the
Underlying Securities, to the extent necessary to pay interest at a rate of
7.00% per annum (the "Class A-1 Rate") on the outstanding Certificate
Principal Balance of the Class A-1 Certificates. The holders of the Class A-2
Certificates will be entitled to receive on each Distribution Date the
interest, if any, received on the Underlying Securities, to the extent
necessary to pay interest at a rate of 0.625% per annum (the "Class A-2 Rate")
on the outstanding Notional Amount thereof.
Section 4. Trust Certificates. The Trustee hereby acknowledges
receipt, on or prior to the Closing Date, of:
(a) the Underlying Securities set forth on Schedule I hereto and
the related Warrant Agent Agreement; and
(b) all documents required to be delivered to the Trustee pursuant
to Section 2.01 of the Standard Terms.
4
Section 5. Distributions.
(a) Except as otherwise provided in Section 5(b) hereof, and in
Sections 4.01(c), 4.01(d), 4.01(g), 4.01(h) and 4.01(i) of the Standard Terms,
on each applicable Distribution Date, the Trustee shall apply Available Funds
in the Certificate Account as follows:
(i) The Trustee will pay the interest portion of Available Funds:
(1) first, to the Trustee, as reimbursement for any
Extraordinary Trust Expenses incurred by the Trustee in accordance
with Section 7.06(b) of the Standard Terms and approved by 100% of
the Certificateholders; and
(2) second, to the holders of the Class A-1 Certificates and
the Class A-2 Certificates, accrued and unpaid interest on each
such Class (as determined in accordance with Section 3(c)) pro
rata in proportion to their entitlements thereto.
(ii) the Trustee will pay the principal portion of Available
Funds:
(1) first, to the Trustee, as reimbursement for any
remaining Extraordinary Trust Expenses incurred by the Trustee in
accordance with Section 7.06(b) of the Standard Terms and approved
by 100% of the Certificateholders; and
(2) second, to the holders of the Class A-1 Certificates, an
amount equal to the Certificate Principal Balance of the Class A-1
Certificates (the Class A-2 Certificates are not entitled to
distributions of principal).
(iii) any Available Funds remaining in the Certificate Account
after the payments set forth in clauses 5(a)(i) and 5(a)(ii) above shall
be paid to the Trustee as reasonable compensation for services rendered
to the Depositor, up to $1,000.
(iv) the Trustee will pay any Available Funds remaining in the
Certificate Account after the distributions in clauses 5(a)(i) through
5(a)(iii) above to the holders of the Class A-1 Certificates and Class
A-2 Certificates pro rata in accordance with the ratio of the P&I Class
Allocation to the IO Strip Class Allocation.
Any funds received in respect of the Underlying Securities from the Underlying
Securities Guarantor shall be included in Available Funds on the related
Distribution Date or Special Distribution Date. Any portion of the Available
Funds (i) that does not constitute principal of, or interest on, the
Underlying Securities, (ii) that is not received in connection with (A) an
exercise of a Call Warrant related to the Underlying Securities or (B) a
tender offer, redemption, prepayment or liquidation of the Underlying
Securities and (iii) for which allocation by the Trustee is not otherwise
contemplated by this Series Supplement, shall be remitted by the Trustee to
the holders of the Class A-1 Certificates and the holders of the Class A-2
Certificates in accordance with the ratio of the P&I Class Allocation to the
IO Strip Class Allocation.
(b) Notwithstanding the foregoing, if the Underlying Securities:
5
(i) are purchased from the Trust in connection with an
exercise of a Call Warrant relating to the Underlying Securities,
the Trustee shall apply the Call Price to the payment of the
redemption price of the Class A-1 and/or Class A-2 Certificates in
accordance with the provisions of Section 6 hereof;
(ii) are redeemed, prepaid or liquidated, in whole or in
part, due to the occurrence of an Underlying Securities Event of
Default or an SEC Reporting Failure, Available Funds will be
allocated to the holders of the Class A-1 Certificates and the
holders of the Class A-2 Certificates in accordance with the ratio
of the P&I Class Allocation to the IO Strip Class Allocation; and
(iii) are redeemed, prepaid or liquidated in whole or in
part for any reason other than due to (A) an exercise of a Call
Warrant related to the Underlying Securities or (B) the occurrence
of an Event of Default, an SEC Reporting Failure, or the Final
Scheduled Distribution Date, the Trustee shall apply Available
Funds in the manner described in Section 4.01(g) of the Standard
Terms in the following order of priority:
(1) first, to the Trustee, as reimbursement for any
Extraordinary Trust Expenses incurred by the Trustee
in accordance with Section 7.06(b) of the Standard
Terms and approved by 100% of the Certificateholders;
(2) second, to the holders of the Class A-1 Certificates
and the holders of the Class A-2 Certificates, an
amount equal to any accrued and unpaid interest
thereon pro rata in proportion to their entitlements
thereto;
(3) third, to the holders of the Class A-1 Certificates,
pro rata in proportion to their outstanding
Certificate Principal Balances;
(4) fourth, to the Class A-2 Certificates, pro rata, an
amount equal to the IO Strip Class Allocation;
(4) fifth, to the Trustee, as reasonable compensation for
services rendered to the Depositor, any remainder up
to $1,000; and
(5) sixth, to the holders of the Class A-1 Certificates
and the Class A-2 Certificates pro rata in proportion
to the ratio of the P&I Class Allocation to the IO
Strip Class Allocation.
For the avoidance of doubt, with respect to any Optional Exchange of
Certificates for Underlying Securities on a Call Date pursuant to Section
4.06(b)(ix) of the Standard Terms, if the Trustee has identified any partial
demands from two or more Certificateholders that, in the aggregate, represent
an even multiple of the minimum denomination for the Underlying Securities, it
shall liquidate its interest in the Underlying Securities and distribute
liquidation proceeds to such Certificateholders.
Section 6. Mandatory Redemption Upon Exercise of Call Warrants. On
any Call Date on which a Call Warrant Holder purchases Underlying Securities
from the Trust in connection with an exercise of a Call Warrant, a principal
amount of Class A-1 Certificates and a Notional
6
Amount of Class A-2 Certificates equal, in each case, to the principal amount
of the Underlying Securities so purchased shall be redeemed at a redemption
price equal to (i) with respect to each Class A-1 Certificate being redeemed,
its par value (i.e., an amount equal to $25 per Class A-1 Certificate) plus
any accrued and unpaid interest to the Call Date, and (ii) with respect to
each Class A-2 Certificate being redeemed, the present value of all amounts
payable on such Notional Amount of Class A-2 Certificates for the period from
the related Call Date to the Final Scheduled Distribution Date using a
discount rate of 8.65% per annum (assuming no delinquencies, deferrals,
redemptions or prepayments on such called Underlying Securities) plus accrued
and unpaid interest to the date of redemption on the Notional Amount of such
Class A-2 Certificates; provided that the exercising Call Warrant holder pays
the Call Price to the Trustee on or prior to such Call Date. In the event that
less than all of the Underlying Securities are purchased at any time, the
Trustee or DTC will select the Class A-1 Certificates and Class A-2
Certificates to be redeemed by lot from first, the Class A-1 Certificates to
be redeemed by lot from among all of the Class A-1 Certificates then
outstanding and, second, if the aggregate principal amount of Underlying
Securities purchased exceeds the aggregate principal balance of the Class A-1
Certificates outstanding as of the Call Date, the Class A-2 Certificates to be
redeemed by lot from among all of the Class A-2 Certificates then outstanding.
Section 7. Miscellaneous.
(a) All directions, demands and notices hereunder shall be in
writing and shall be delivered as set forth in the Standard Terms (unless
written notice is otherwise provided to the Trustee).
Section 8. Governing Law. THIS SERIES SUPPLEMENT AND THE
TRANSACTIONS DESCRIBED HEREIN SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
CHOICE OF LAWS PROVISIONS THEREOF.
Section 9. Counterparts. This Series Supplement may be executed in
any number of counterparts, each of which shall be deemed to be an original,
and all such counterparts shall constitute but one and the same instrument.
Section 10. Amendments. Notwithstanding anything in the Trust
Agreement to the contrary, in addition to the other restrictions on
modification and amendment contained therein, the Trustee shall not enter into
any amendment or modification of the Trust Agreement which would adversely
affect in any material respect the interests of the holders of any class of
Certificates without the consent of the holders of 100% of such class of
Certificates; provided, however, that no such amendment or modification will
be permitted which would cause the Trust to be taxed as an association or
publicly traded partnership taxable as a corporation for federal income tax
purposes. Unless otherwise agreed, the Trustee shall provide five Business
Days written notice to each Rating Agency before entering into any amendment
or modification of the Trust Agreement pursuant to this Section 10.
7
IN WITNESS WHEREOF, the parties hereto have caused this Series
Supplement to be duly executed by their respective authorized officers as of
the date first written above.
SELECT ASSET INC.,
as Depositor
By: /s/ Charles M. Weaver
----------------------------------------
Name: Charles M. Weaver
Title: Senior Vice President
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Trustee on behalf of the Corporate Backed
Callable Trust Certificates, J.C. Penney
Debenture-Backed Series 2007-1 Trust
By: /s/ David J. Kolibachuk
----------------------------------------
Name: David J. Kolibachuk
Title: Vice President
8
SCHEDULE I
J.C. PENNEY DEBENTURE-BACKED SERIES 2007-1 TRUST
UNDERLYING SECURITIES SCHEDULE
Underlying Securities: 7 5/8% Debentures due March 1, 2097
Issuer: J.C. Penney Corporation, Inc.
Underlying Securities Guarantor: J.C. Penney Company, Inc.
CUSIP Number: 708160BL9
Principal Amount Deposited: $55,000,000
Original Issue Date: February 20, 1997
Principal Amount of
Underlying Securities
Originally Issued: $500,000,000
Maturity Date: March 1, 2097
Interest Rate: 7 5/8%
Interest Payment Dates: March 1 and September 1
I-1
EXHIBIT A-1
FORM OF TRUST CERTIFICATE CLASS A-1
CLASS A-1 CERTIFICATE
NUMBER 1 2,200,000 $25 PAR CERTIFICATES
CUSIP NO. [__]
SEE REVERSE FOR CERTAIN DEFINITIONS
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE REPRESENTS A PROPORTIONATE UNDIVIDED BENEFICIAL OWNERSHIP
INTEREST IN THE TRUST AND DOES NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST
IN, AND IS NOT GUARANTEED BY THE DEPOSITOR OR THE TRUSTEE OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE TRUST ASSETS ARE
INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR ANY OTHER PERSON.
THE CERTIFICATEHOLDER, BY ITS ACCEPTANCE OF THIS CERTIFICATE, COVENANTS AND
AGREES TO TENDER ANY AND ALL CERTIFICATES SELECTED FOR REDEMPTION TO THE
TRUSTEE UPON THE WARRANT HOLDER'S EXERCISE OF CALL WARRANTS AND PAYMENT OF THE
CALL PRICE FOR THE RELATED UNDERLYING SECURITIES IN ACCORDANCE WITH THE
PROVISIONS HEREOF AND OF THE WARRANT AGENT AGREEMENT.
A-1-1
SELECT ASSET INC.
2,200,000 $25 PAR
CORPORATE BACKED CALLABLE TRUST CERTIFICATES,
J.C. PENNEY DEBENTURE-BACKED SERIES 2007-1
7.00% INTEREST RATE
evidencing a proportionate undivided beneficial ownership interest in the
Trust, as defined below, the property of which consists principally of
$55,000,000 aggregate principal amount of 7 5/8% Debentures due 2097, issued
by J.C. Penney Corporation, Inc (the "Underlying Securities Issuer") and all
payments received thereon (the "Trust Property"), deposited in trust by Select
Asset Inc. (the "Depositor").
THIS CERTIFIES THAT CEDE & CO. is the registered owner of 2,200,000
Class A-1 Certificates issued by the Corporate Backed Trust Certificates, J.C.
Penney Debenture-Backed Series 2007-1 Trust (the "Trust"), having an aggregate
Certificate Principal Balance of $55,000,000, representing a nonassessable,
fully-paid, proportionate undivided beneficial ownership interest in the J.C.
Penney Debenture-Backed Series 2007-1 Trust, formed by the Depositor.
The Trust was created pursuant to a Standard Terms for Trust Agreements,
dated as of November 9, 2006 (the "Standard Terms"), between the Depositor and
U.S. Bank National Association, not in its individual capacity but solely as
Trustee (the "Trustee"), as supplemented by the Series Supplement in respect
of the Corporate Backed Callable Trust Certificates, J.C. Penney
Debenture-Backed Series 2007-1 Trust, dated as of January 31, 2007 (the
"Series Supplement" and, together with the Standard Terms, the "Trust
Agreement"), between the Depositor and the Trustee. This Certificate does not
purport to summarize the Trust Agreement and reference is hereby made to the
Trust Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds and duties evidenced hereby and the rights,
duties and obligations of the Trustee with respect hereto. A copy of the Trust
Agreement may be obtained from the Trustee by written request sent to the
Corporate Trust Office. Capitalized terms used but not defined herein have the
meanings assigned to them in the Trust Agreement.
This Certificate is one of the duly authorized Certificates designated
as the "Corporate Backed Callable Trust Certificates, J.C. Penney
Debenture-Backed Series 2007-1, Class A-1" (herein called the "Certificates").
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Trust Agreement the Holder of this
Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound. The Trust Property consists of: (i) Underlying Securities
described in the Trust Agreement, and (ii) all payments on or collections in
respect of the Underlying Securities accrued on or after January 31, 2007,
together with any and all income, proceeds and payments with respect thereto;
provided, however, that any income from the investment of Trust funds in
certain permitted investments ("Eligible Investments") does not constitute
Trust Property.
A-1-2
Subject to the terms and conditions of the Trust Agreement (including
the availability of funds for distributions) and until the obligation created
by the Trust Agreement shall have terminated in accordance therewith,
distributions will be made on each Distribution Date, to the Person in whose
name this Certificate is registered on the applicable Record Date, in an
amount equal to such Certificateholder's proportionate undivided beneficial
ownership interest in the amount required to be distributed to the Holders of
the Certificates on such Distribution Date. The Record Date applicable to any
Distribution Date is the close of business on the day immediately preceding
such Distribution Date (whether or not a Business Day). If a payment with
respect to the Underlying Securities is made to the Trustee after the date on
which such payment was due, then the Trustee will distribute any such amounts
received on the next occurring Business Day.
Each Certificateholder, by its acceptance of a Certificate, covenants
and agrees that such Certificateholder will not, until the date which is one
year and one day after the termination of the Trust, institute against the
Trust, or join in any institution against the Trust of, any bankruptcy
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Certificates or the Trust
Agreement.
Distributions made on this Certificate will be made as provided in the
Trust Agreement by the Trustee by wire transfer in immediately available
funds, or check mailed to the Certificateholder of record in the Certificate
Register without the presentation or surrender of this Certificate or the
making of any notation hereon, except that with respect to Certificates
registered on the Record Date in the name of the nominee of the Clearing
Agency (initially, such nominee shall be Cede & Co.), payments will be made by
wire transfer in immediately available funds to the account designated by such
nominee. Except as otherwise provided in the Trust Agreement and
notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the Corporate
Trust Office or such other location as may be specified in such notice.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee, by manual signature, this Certificate shall not
entitle the Holder hereof to any benefit under the Trust Agreement or be valid
for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE HOLDER HEREOF SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.
A-1-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed as of the date set forth below.
CORPORATE BACKED CALLABLE TRUST
CERTIFICATES, J.C. PENNEY
DEBENTURE-BACKED SERIES 2007-1
TRUST
By: U.S. Bank National Association
not in its individual capacity but solely as
Trustee,
By:
------------------------------------
Authorized Signatory
Dated: January 31, 2007
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Corporate Backed Callable Trust Certificates, J.C. Penney
Debenture-Backed Series 2007-1, described in the Trust Agreement referred to
herein.
U.S. Bank National Association
not in its individual capacity but solely as Trustee,
By:
---------------------------------
Authorized Signatory
A-1-4
(REVERSE OF CERTIFICATE)
The Certificates are limited in right of distribution to certain payments and
collections respecting the Underlying Securities, all as more specifically set
forth herein and in the Trust Agreement. The registered Holder hereof, by its
acceptance hereof, agrees that it will look solely to the Trust Property (to
the extent of its rights therein) for distributions hereunder.
The Trust Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the Trustee and the rights of the Certificateholders under the
Trust Agreement at any time by the Depositor and the Trustee with the consent
of the Holders of Class A-1 Certificates in the manner set forth in the Series
Supplement and the Standard Terms. Any such consent by the Holder of this
Certificate (or any predecessor Certificate) shall be conclusive and binding
on such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange hereof or in lieu
hereof whether or not a notation of such consent is made upon this
Certificate. The Trust Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of
the Certificates.
The Certificates are issuable in fully registered form only in denominations
of $100,000.
As provided in the Trust Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registerable in the Certificate
Register upon surrender of this Certificate for registration of transfer at
the offices or agencies of the Certificate Registrar maintained by the Trustee
in the Borough of Manhattan, the City of New York, duly endorsed by or
accompanied by an assignment in the form below and by such other documents as
required by the Trust Agreement, and thereupon one or more new Certificates of
the same class in authorized denominations evidencing the same principal
amount will be issued to the designated transferee or transferees. The initial
Certificate Registrar appointed under the Trust Agreement is U.S. Bank
National Association.
No service charge will be made for any registration of transfer or exchange,
but the Trustee may require exchange of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any transfer
or exchange of Certificates.
The Depositor and the Trustee and any agent of the Depositor or the Trustee
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trustee, nor any such
agent shall be affected by any notice to the contrary.
It is the intention of the parties to the Trust Agreement that the Trust
created thereunder shall constitute a fixed investment trust for federal
income tax purposes under Treasury Regulation Section 301.7701-4, and the
Certificateholder agrees to treat the Trust, any distributions therefrom and
its beneficial interest in the Certificates consistently with such
characterization.
The Trust and the obligations of the Depositor and the Trustee created by the
Trust Agreement with respect to the Certificates shall terminate upon the
earliest to occur of (i) the payment in full at maturity or sale by the Trust
after a payment default on or an acceleration or other early payment of the
Underlying Securities and the distribution in full of all amounts due to the
Class A-1 Certificateholders and Class A-2 Certificateholders; (ii) the
exercise of all outstanding Call
A-1-5
Warrants by the Warrant Holders; (iii) the Final Scheduled Distribution Date
and (iv) the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United States to
the Court of St. James, living on the date hereof.
An employee benefit plan subject to the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), a plan described in Section 4975(e) of the
Code, an entity whose underlying assets include plan assets by reason of any
such plan's investment in the entity, including an individual retirement
account or Keogh plan (any such, a "Plan") may purchase and hold Certificates
if the Plan can represent and warrant that its purchase and holding of the
Certificates would not be prohibited under ERISA or the Code.
A-1-6
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
(Please print or type name and address, including postal zip code, of
assignee) the within Certificate, and all rights thereunder, hereby
irrevocably constituting and appointing ______________________ Attorney to
transfer said Certificate on the books of the Certificate Register, with full
power of substitution in the premises.
Dated:
*
Signature Guaranteed:
*
*NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Signatures must be guaranteed
by an "eligible guarantor institution" meeting the requirements of the
Certificate Registrar, which requirements include membership or participation
in the Security Transfer Agent Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Certificate
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
A-1-7
EXHIBIT A-2
FORM OF TRUST CERTIFICATE CLASS A-2
CLASS A-2 CERTIFICATE
NUMBER 1 CUSIP NO. [__]
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS CLASS A-2 CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION UNDER
SUCH ACT IS IN EFFECT OR PURSUANT TO AN EXEMPTION THEREFROM UNDER SUCH ACT.
THE CLASS A-2 CERTIFICATE REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF THE SERIES SUPPLEMENT.
EACH PURCHASER OF THIS CLASS A-2 CERTIFICATE IS HEREBY NOTIFIED
THAT THE SELLER OF THIS CLASS A-2 CERTIFICATE MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.
THE NOTIONAL AMOUNT OF THIS CLASS A-2 CERTIFICATE IS AS SET FORTH
HEREIN. ACCORDINGLY, THE NOTIONAL AMOUNT OF THIS CLASS A-2 CERTIFICATE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE REPRESENTS A PROPORTIONATE UNDIVIDED BENEFICIAL
OWNERSHIP INTEREST IN THE TRUST AND DOES NOT EVIDENCE AN OBLIGATION OF, OR AN
INTEREST IN, AND IS NOT GUARANTEED BY THE DEPOSITOR OR THE TRUSTEE OR ANY OF
THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE OR THE TRUST ASSETS ARE
INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR ANY OTHER PERSON.
THE CERTIFICATEHOLDER, BY ITS ACCEPTANCE OF THIS CERTIFICATE,
COVENANTS AND AGREES TO TENDER ANY AND ALL
A-2-1
CERTIFICATES SELECTED FOR REDEMPTION TO THE TRUSTEE UPON THE WARRANT HOLDER'S
EXERCISE OF CALL WARRANTS AND PAYMENT OF THE CALL PRICE FOR THE RELATED
UNDERLYING SECURITIES IN ACCORDANCE WITH THE PROVISIONS HEREOF AND OF THE
WARRANT AGENT AGREEMENT.
A-2-2
SELECT ASSET INC.
CORPORATE BACKED CALLABLE TRUST CERTIFICATES,
J.C. PENNEY DEBENTURE-BACKED SERIES 2007-1
$55,000,000 NOTIONAL AMOUNT
0.625% INTEREST RATE
evidencing a proportionate undivided beneficial ownership interest in the
Trust, as defined below, the property of which consists principally of
$55,000,000 aggregate principal amount of 7 5/8% Debentures due 2097, issued
by J.C. Penney Corporation, Inc. and all payments received thereon (the "Trust
Property"), deposited in trust by Select Asset Inc. (the "Depositor").
THIS CERTIFIES THAT CEDE & CO. is the registered owner of Class
A-2 Certificates issued by the Corporate Backed Callable Trust Certificates,
J.C. Penney Debenture-Backed Series 2007-1 Trust (the "Trust"), having an
aggregate Notional Amount of $55,000,000, representing a nonassessable,
fully-paid, proportionate undivided beneficial ownership interest in the
Trust, formed by the Depositor.
The Trust was created pursuant to a Standard Terms for Trust
Agreements, dated as of November 9, 2006 (the "Standard Terms"), between the
Depositor and U.S. Bank National Association, not in its individual capacity
but solely as Trustee (the "Trustee"), as supplemented by the Series
Supplement, Corporate Backed Callable Trust Certificates, J.C. Penney
Debenture-Backed Series 2007-1 Trust, dated as of January 31, 2007 (the
"Series Supplement" and, together with the Standard Terms, the "Trust
Agreement"), between the Depositor and the Trustee. This Certificate does not
purport to summarize the Trust Agreement and reference is hereby made to the
Trust Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds and duties evidenced hereby and the rights,
duties and obligations of the Trustee with respect hereto. A copy of the Trust
Agreement may be obtained from the Trustee by written request sent to the
Corporate Trust Office. Capitalized terms used but not defined herein have the
meanings assigned to them in the Trust Agreement.
This Certificate is one of the duly authorized Certificates
designated as the "Corporate Backed Callable Trust Certificates, J.C. Penney
Debenture-Backed Series 2007-1, Class A-2" (herein called the "Certificates").
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Trust Agreement the Holder of this
Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound. The Trust Property consists of: (i) Underlying Securities
described in the Trust Agreement, and (ii) all payments on or collections in
respect of the Underlying Securities accrued on or after January 31, 2007,
together with any and all income, proceeds and payments with respect thereto;
provided, however, that any income from the investment of Trust funds in
certain permitted investments ("Eligible Investments") does not constitute
Trust Property.
Subject to the terms and conditions of the Trust Agreement
(including the availability of funds for distributions) and until the
obligation created by the Trust Agreement
A-2-3
shall have terminated in accordance therewith, distributions of interest will
be made on this Certificate on each Distribution Date.
Subject to the terms and conditions of the Trust Agreement
(including the availability of funds for distributions) and until the
obligation created by the Trust Agreement shall have terminated in accordance
therewith, distributions will be made on each Distribution Date, to the Person
in whose name this Certificate is registered on the applicable Record Date, in
an amount equal to such Certificateholder's proportionate undivided beneficial
ownership interest in the amount required to be distributed to the Holders of
the Certificates on such Distribution Date.
The Record Date applicable to any Distribution Date is the close
of business on the day immediately preceding such Distribution Date (whether
or not a Business Day). If a payment with respect to the Underlying Securities
is made to the Trustee after the date on which such payment was due, then the
Trustee will distribute any such amounts received on the next occurring
Business Day.
Each Certificateholder, by its acceptance of a Certificate,
covenants and agrees that such Certificateholder will not, until the date
which is one year and one day after the termination of the Trust, institute
against the Trust, or join in any institution against the Trust of, any
bankruptcy proceedings under any United States Federal or state bankruptcy or
similar law in connection with any obligations relating to the Certificates or
the Trust Agreement.
Distributions made on this Certificate will be made as provided in
the Trust Agreement by the Trustee by wire transfer in immediately available
funds, or check mailed to the Certificateholder of record in the Certificate
Register without the presentation or surrender of this Certificate or the
making of any notation hereon, except that with respect to Certificates
registered on the Record Date in the name of the nominee of the Clearing
Agency (initially, such nominee shall be Cede & Co.), payments will be made by
wire transfer in immediately available funds to the account designated by such
nominee. Except as otherwise provided in the Trust Agreement and
notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the Corporate
Trust Office or such other location as may be specified in such notice.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed
by or on behalf of the Trustee, by manual signature, this Certificate shall
not entitle the Holder hereof to any benefit under the Trust Agreement or be
valid for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE HOLDER HEREOF SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
A-2-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed as of the date set forth below.
CORPORATE BACKED CALLABLE TRUST
CERTIFICATES, J.C. PENNEY
DEBENTURE-BACKED SERIES 2007-1
TRUST
By: U.S. Bank National Association
not in its individual capacity but solely as
Trustee,
By:
------------------------------------
Authorized Signatory
Dated: January 31, 2007
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Corporate Backed Callable Trust Certificates, J.C. Penney
Debenture-Backed Series 2007-1, described in the Trust Agreement referred to
herein.
U.S. Bank National Association
not in its individual capacity but solely as Trustee,
By:
---------------------------------
Authorized Signatory
A-2-5
(REVERSE OF CERTIFICATE)
The Certificates are limited in right of distribution to certain
payments and collections respecting the Underlying Securities, all as more
specifically set forth herein and in the Trust Agreement. The registered
Holder hereof, by its acceptance hereof, agrees that it will look solely to
the Trust Property (to the extent of its rights therein) for distributions
hereunder.
The Trust Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the Trustee and the rights of the
Certificateholders under the Trust Agreement at any time by the Depositor and
the Trustee with the consent of the holders of Class A-2 Certificates in the
manner set forth in the Series Supplement and the Standard Terms. Any such
consent by the Holder of this Certificate (or any predecessor Certificate)
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Trust Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders
of any of the Certificates.
The Certificates are issuable in fully registered form only in
denominations of $100,000 and in integral multiples of $1 in excess thereof,
provided, however, that the Certificates will only be transferable in an
aggregate Notional Amount equal to or greater than $100,000.
As provided in the Trust Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is
registerable in the Certificate Register upon surrender of this Certificate
for registration of transfer at the offices or agencies of the Certificate
Registrar maintained by the Trustee in the Borough of Manhattan, the City of
New York, duly endorsed by or accompanied by an assignment in the form below
and by such other documents as required by the Trust Agreement, and thereupon
one or more new Certificates of the same class in authorized denominations
evidencing the same Notional Amount will be issued to the designated
transferee or transferees. The initial Certificate Registrar appointed under
the Trust Agreement is U.S. Bank National Association.
No service charge will be made for any registration of transfer or
exchange, but the Trustee may require exchange of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with
any transfer or exchange of Certificates.
The Depositor and the Trustee and any agent of the Depositor or
the Trustee may treat the Person in whose name this Certificate is registered
as the owner hereof for all purposes, and neither the Depositor, the Trustee,
nor any such agent shall be affected by any notice to the contrary.
It is the intention of the parties to the Trust Agreement that the
Trust created thereunder shall constitute a fixed investment trust for federal
income tax purposes under Treasury Regulation Section 301.7701-4, and the
Certificateholder agrees to treat the Trust, any distributions therefrom and
its beneficial interest in the Certificates consistently with such
characterization.
A-2-6
The Trust and the obligations of the Depositor and the Trustee
created by the Trust Agreement with respect to the Certificates shall
terminate upon the earliest to occur of (i) the payment in full at maturity or
sale by the Trust after a payment default on or an acceleration or other early
payment of the Underlying Securities and the distribution in full of all
amounts due to the Class A-1 Certificateholders and Class A-2
Certificateholders; (ii) the exercise of all outstanding Call Warrants by the
Warrant Holders; (iii) the Final Scheduled Distribution Date and (iv) the
expiration of 21 years from the death of the last survivor of the descendants
of Joseph P. Kennedy, the late Ambassador of the United States to the Court of
St. James, living on the date hereof.
An employee benefit plan subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), a plan described in Section
4975(e) of the Code, an entity whose underlying assets include plan assets by
reason of any such plan's investment in the entity, including an individual
retirement account or Keogh plan (any such, a "Plan") may purchase and hold
Certificates if the Plan can represent and warrant that its purchase and
holding of the Certificates would not be prohibited under ERISA or the Code.
A-2-7
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
(Please print or type name and address, including postal zip code, of
assignee) the within Certificate, and all rights thereunder, hereby
irrevocably constituting and appointing ____________________ Attorney to
transfer said Certificate on the books of the Certificate Register, with full
power of substitution in the premises.
Dated:
*
Signature Guaranteed:
*
*NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Signatures must be guaranteed
by an "eligible guarantor institution" meeting the requirements of the
Certificate Registrar, which requirements include membership or participation
in the Security Transfer Agent Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Certificate
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
A-2-8
EXHIBIT B
FORM OF WARRANT AGENT AGREEMENT
B-A-1
EXHIBIT C
FORM OF INVESTMENT LETTER
QUALIFIED INSTITUTIONAL BUYER AND ACCREDITED INVESTOR
Dated:
U.S. Bank National Association,
as Trustee
100 Wall Street
New York, New York 10005
Lehman Brothers Inc.,
as Initial Purchaser
745 Seventh Avenue
New York, New York 10019
Select Asset Inc.,
as Depositor
745 Seventh Avenue
New York, New York 10019
Ladies and Gentlemen:
In connection with our proposed purchase of $______________
aggregate Notional Amount of Class A-2 Certificates (the "Class A-2
Certificates") representing an interest in the Corporate Backed Callable Trust
Certificates, J.C. Penney Debenture-Backed Series 2007-1 Trust (the "Trust"),
the undersigned, by executing this letter (the "Purchaser") confirms that:
1. The Purchaser understands that substantial risks are involved in
an investment in the Class A-2 Certificates. The Purchaser
represents that, in making its investment decision to acquire the
Class A-2 Certificates, the Purchaser has not relied on
representations, warranties, opinions, projections, financial or
other information or analysis, if any, supplied to it by any
person or entity, including the Initial Purchaser, the Depositor
or the Trustee or any of their affiliates, except as expressly
contained in written information, if any. The Purchaser is
purchasing the Class A-2 Certificates for investment purposes and
not with a view to, or for, the offer or sale in connection with a
public distribution or in any other manner that would violate the
Securities Act or the securities or blue sky laws of any state of
the United States. The Purchaser has such knowledge and experience
in financial and business matters as to be capable of evaluating
the merits and risks of purchasing any of the Class A-2
Certificates. The Purchaser is aware that it may be required to
bear the substantial economic risk of an investment in the Class
A-2 Certificates for an indefinite period of time and such
Purchaser is able to bear such risk for an indefinite period. The
Purchaser has relied upon its own tax, legal and financial
advisors in connection with its decision to purchase the Class A-2
Certificates.
C-1
2. The Purchaser is not an "affiliate" (as defined in Rule 144 under
the Securities Act) of the Depositor and is either:
(i) (A) a "Qualified Institutional Buyer" (a "QIB"), within the
meaning of Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act" and "Rule 144A") and has delivered to you
the certification contained herein as to the fact that it is a QIB
and (B) acquiring the Class A-2 Certificates for its own account,
for the account of an Accredited Investor (as defined in Rule
501(a) under the Securities Act), or for the account of a QIB as
to each of which the Purchaser exercises sole investment
discretion. The Purchaser is aware that the Class A-2 Certificates
are being sold to it in reliance on the exemption from the
provisions of Section 5 of the Securities Act provided by Rule
144A; or
(ii) an Accredited Investor and, if the Class A-2 Certificates are
to be purchased for one or more accounts ("investor accounts") for
which it is acting as fiduciary or agent, each such investor
account is an Accredited Investor on a like basis or a QIB; in the
normal course of its business, such Purchaser invests in or
purchases securities similar to the Class A-2 Certificates.
3. The Purchaser acknowledges that neither the Depositor nor the
Initial Purchaser, or any person representing the Depositor or the
Initial Purchaser, has made any representation to such purchaser
with respect to the Trust, the Underlying Securities or the
offering or sale of any Class A-2 Certificates.
4. The Purchaser understands that the Class A-2 Certificates are
being offered in a transaction not involving any public offering
in the United States within the meaning of the Securities Act,
that the Class A-2 Certificates have not been and will not be
registered under the Securities Act or under the securities or
blue sky laws of any state, and that (i) if in the future it
decides to offer, resell, pledge or otherwise transfer the Class
A-2 Certificates, such Class A-2 Certificates shall only be
offered, resold, assigned or otherwise transferred (A) to the
Trust, (B) pursuant to an effective registration statement under
the Securities Act, (C) to a QIB, in accordance with Rule 144A or
(D) to any person or entity (including an Accredited Investor
within the meaning of Rule 501(a) under the Securities Act)
pursuant to another available exemption from registration provided
under the Securities Act, and, in each of cases (A) through (D),
in accordance with any applicable securities laws of any state of
the United States and other jurisdictions and (ii) the purchaser
will, and each subsequent holder is required to, notify any
subsequent purchaser of such Class A-2 Certificates from it of the
resale restrictions referred to in clause (i) above. Upon the
transfer of Class A-2 Certificates held in the form of global
certificates to an Accredited Investor, the transferor's interest
in such global certificates shall be exchanged for a Class A-2
Certificate in definitive form. Thereafter, upon transfer of a
definitive Class A-2 Certificate to a QIB, such Class A-2
Certificate may be exchanged for a beneficial interest in a global
certificate.
5. The Purchaser understands that each Class A-2 Certificate will,
unless otherwise agreed to by the Depositor and the Trustee, bear
a legend substantially to the following effect:
C-2
"THIS CLASS A-2 CERTIFICATE (OR ITS PREDECESSOR) HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE
DISPOSED OF EXCEPT WHILE A REGISTRATION UNDER SUCH ACT IS IN
EFFECT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
SUCH ACT. THE CLASS A-2 CERTIFICATE REPRESENTED HEREBY MAY
BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF THE
SERIES SUPPLEMENT.
EACH PURCHASER OF THIS CLASS A-2 CERTIFICATE IS HEREBY
NOTIFIED THAT THE SELLER OF THIS CLASS A-2 CERTIFICATE MAY
BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5
OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER."
6. The Purchaser understands that no subsequent transfer of the Class
A-2 Certificates is permitted unless (A) such transfer is of a
Class A-2 Certificate with a denomination of at least $100,000 and
(B) it causes its proposed transferee to provide to the Trustee
and the Initial Purchaser a letter substantially in the form of
Exhibit C to the Series Supplement and otherwise satisfactory to
the Trustee and Initial Purchaser, as applicable, or such other
written statement as the Depositor shall prescribe.
7. The Purchaser agrees that if at some time in the future it wishes
to transfer or exchange any of the Class A-2 Certificates, it will
not transfer or exchange any of the Class A-2 Certificates unless
such transfer or exchange is in accordance with Section 5.04 of
the Trust Agreement. The Purchaser understands that any purported
transfer of the Class A-2 Certificates (or any interest therein)
in contravention of any of the restrictions and conditions in the
Trust Agreement, as applicable, shall be void, and the purported
transferee in such transfer shall not be recognized by the Trust
or any other Person as a Certificateholder, as the case may be,
for any purpose.
8. The purchaser (i) acknowledges that the Depositor, the Initial
Purchaser, the Trustee and others will rely upon the truth and
accuracy of the foregoing acknowledgments, representations and
agreements and agrees that the Depositor, the Initial Purchaser
and the Trustee are irrevocably authorized to produce this letter
or a copy hereof to any interested party in any administrative or
legal proceeding or official inquiry with respect to the matters
covered hereby, and (ii) agrees that, if any of the
acknowledgments, representations, warranties and agreements made
or deemed to have been made by such purchaser's purchase of the
Class A-2 Certificates are no longer accurate, such purchaser
shall promptly notify the Depositor and the Initial Purchaser. If
the purchaser is acquiring any Class A-2 Certificates as a
fiduciary or agent for one or more investor accounts, it
represents that it has sole investment discretion with respect to
each such account and it has full power to make the foregoing
acknowledgments, representations
C-3
and agreements on behalf of each such account and that each such
investor account is eligible to purchase the Class A-2
Certificates.
You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.
Very truly yours,
By:
-----------------------------
Name:
Title:
C-4