SERIES SUPPLEMENT

 

                                                                     EXHIBIT 4.2

 

 

 

 

 

 

 

 

 

 

                      PPLUS TRUST CERTIFICATES SERIES CMT-1

 

 

 

 

 

                                SERIES SUPPLEMENT

 

                                     between

 

                          MERRILL LYNCH DEPOSITOR, INC.,

 

                                  as Depositor,

 

                                       and

 

                              THE BANK OF NEW YORK,

 

                     as Trustee and Securities Intermediary

 

 

 

 

 

 

 

 

 

                           Dated as of April 16, 2004

 

 

 

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              SERIES SUPPLEMENT, dated as of April 16, 2004 (the "Supplement"),

by and between MERRILL LYNCH DEPOSITOR, INC., a Delaware corporation, as

Depositor, THE BANK OF NEW YORK, a New York corporation, as Trustee and

Securities Intermediary.

 

                              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 Supplement, which shall

incorporate the terms of the Standard Terms for Trust Agreements, dated as of

February 20, 1998 (the "Standard Terms" and, together with this Supplement, the

"Trust Agreement"), by and between the Depositor and the Trustee and Securities

Intermediary, as modified by this Supplement;

 

              WHEREAS, the Depositor desires to deposit the Underlying

Securities set forth on Schedule I attached hereto into the Trust;

 

              WHEREAS, in connection with the creation of the Trust and the

deposit therein of the Underlying Securities, it is desired to provide for the

issuance of (a) the Certificates evidencing undivided interests in the Trust and

(b) Call Rights;

 

              WHEREAS, the Trustee has joined in the execution of the Standard

Terms and this Supplement to evidence the acceptance by the Trustee of the

Trust; and

 

              WHEREAS, the Securities Intermediary has joined in the execution

of the Standard Terms and this Supplement to evidence the acceptance by the

Securities Intermediary of its obligations thereunder and hereunder;

 

              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 and Securities Intermediary as follows:

 

              Section 1. Incorporation of Standard Terms. All of the provisions

of the Standard Terms, a copy of which is attached hereto as Exhibit A, are

hereby incorporated herein by reference in their entirety and this Supplement

and the Standard Terms shall form a single agreement among the parties. In the

event of any inconsistency between the provisions of this Supplement and the

provisions of the Standard Terms, the provisions of this Supplement will control

with respect to the transactions described herein.

 

              Section 2. Definitions. Except as otherwise specified herein or as

the context may otherwise require, the following terms shall have the respective

meanings set forth below for all purposes under this Supplement (Section 2(b)

hereof sets forth terms listed in the Standard Terms that are not applicable to

this Series). Capitalized terms used but not defined herein shall have the

meanings assigned to them in the Standard Terms.

 

              "Allocation Ratio": The ratio of the Class A Allocation to the

Class B Allocation. Voting Rights, Liquidation Proceeds, Realized Losses and

Extraordinary Trust Expenses shall be allocated between Class A

Certificateholders and Class B Certificateholders in accordance with the

Allocation Ratio and, within each Class, each of the foregoing rights and

obligations shall be allocated to Certificateholders in accordance with their

pro rata interests in such Class.

 

 

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              "Authorized Denomination": With respect to Certificates, an

aggregate stated and/or notional principal amount of $1,000, as applicable.

 

              "Business Day": Any day that is not a Saturday, a Sunday or a

legal holiday or a day on which banking institutions or trust companies in the

City of New York are authorized or obligated by law, regulation or executive

order to close and that also is specified as a Business Day with respect to the

Underlying Securities.

 

              "Call Date": Any Business Day that (i) a Call Holder designates as

a Call Date on or after March 15, 2009; (ii) a Call Holder designates as a Call

Date before March 15, 2009 after the announcement of any redemption of the

Underlying Securities or other unscheduled payment of the Underlying Securities

or after receipt by the Call Holder of notice of the termination of the Trust;

provided that if a Call Right is to be exercised after the announcement of any

redemption of the Underlying Securities or other unscheduled payment of the

Underlying Securities and prior to such redemption or other unscheduled payment,

then the Call Date designated by the Call Holder must be the second Business Day

prior to such redemption or other unscheduled payment; (iii) at any time is

deemed a Call Date upon an acceleration of the Underlying Securities and payment

in full by the Underlying Securities Issuer of all amounts when due; or (iv) at

any time in the case of a tender offer for the Underlying Securities, a Call

Holder is deemed to designate as a Call Date pursuant to Section 2.02(i)(iv) of

the Warrant Agreement.

 

              "Call Holder": The holder of a Class A Call Right or a Class B

Call Right.

 

              "Call Price": The Class A Call Price and the Class B Call Price.

 

              "Call Right": The Class A Call Right and the Class B Call Right.

 

              "Certificates": All 1,400,000 Class A Certificates and all

1,400,000 Class B Certificates.

 

              "Class A Allocation": The present value (discounted at the rate of

7.05% per annum) of (i) the unpaid interest, except for the Class B Payments,

due or to become due on the Underlying Securities on or prior to the Final

Scheduled Distribution Date and (ii) the principal amount of the Underlying

Securities (in each case assuming that the Underlying Securities are paid in

full when due and are not accelerated or redeemed prior to their stated

maturity).

 

              "Class A Call Price" means $25.00 per Class A Certificate being

called plus any accrued and unpaid interest on each Class A Certificate being

called to the Call Date. Any payments of interest on the Call Date by the Trust

to the applicable Class A Certificateholder shall be excluded.

 

              "Class A Call Right": The right, but not the obligation, pursuant

to the Warrant Agreement and any related Warrant Certificates (as defined in the

Warrant Agreement) of one or more Call Holders to purchase from the Class A

Certificateholders on a Call Date some or all of the Class A Certificates for

the Class A Call Price.

 

 

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              "Class A Certificate Account": The Certificate Account established

for the Class A Certificateholders.

 

              "Class A Certificates": The Certificates issued by the Trust in a

stated amount of $25.00 per trust certificate, entitled to receive on each

Distribution Date until and including the Final Scheduled Distribution Date,

distributions at a rate of 6.25% per annum on the stated amount of the Class A

Certificates and a cash distribution of the principal amount of the Underlying

Securities on the Final Scheduled Distribution Date and such other distributions

as described herein.

 

              "Class B Allocation": The sum of the present values (discounted at

the rate of 7.05% per annum) of the Class B Payments (assuming, for purposes

hereof, that the Underlying Securities are paid in full on their stated maturity

date, and no portion thereof is accelerated or redeemed prior to such date).

 

              "Class B Call Price" means the sum of the present values,

discounted at a rate of 7.05% per annum, of the unpaid distributions due, or to

become due, in respect of the Class B Payments to be made on each Class B

Certificate being called on or after the Call Date (assuming, for purposes

hereof, that the Underlying Securities are paid in full on their stated maturity

date, and no portion thereof is accelerated or redeemed prior to such date). Any

payments of interest on the Call Date by the Trust to the applicable Class B

Certificateholder shall be excluded.

 

              "Class B Call Right": The right, but not the obligation, pursuant

to the Warrant Agreement and any related Warrant Certificates (as defined in the

Warrant Agreement) of one or more Call Holders to purchase from the Class B

Certificateholders on a Call Date some or all of the Class B Certificates for

the Class B Call Price.

 

              "Class B Certificate Account": The Certificate Account established

for the Class B Certificateholders.

 

              "Class B Certificates": The Certificates issued by the Trust with

the right to receive, on each Distribution Date, commencing on September 15,

2004 and ending on the Final Scheduled Distribution Date, a distribution of

0.80% per annum of the aggregate notional principal amount of Class B

Certificates and such other distributions as described herein.

 

              "Class B Payments" will have the meaning given to it in Section

3(d).

 

              "Closing Date": April 16, 2004.

 

              "Collection Period": (i) With respect to each March 15

Distribution Date, the period beginning on the day after the September 15

Distribution Date of the current year and ending on such March 15 Distribution

Date, inclusive, and (ii) with respect to each September 15 Distribution Date,

the period beginning on the day after the March 15 Distribution Date of the

prior year and ending on such September 15 Distribution Date, inclusive, except

for the September 15, 2004 Distribution Date, as to which the Collection Period

shall be the period beginning on the Cut-off Date and ending on such September

15, 2004 Distribution Date, inclusive; provided, however, that clauses (i) and

(ii) shall be subject to Section 9(c) hereof.

 

 

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              "Corporate Trust Office": The office of the Trustee located at 101

Barclay Street, Floor 8E, New York, NY 10286, Attention: Corporate Trust

Department; provided, however, that the office at which certificated securities

are delivered for registration of transfer, cancellation or exchange shall be

the office of the Trustee, located at 101 Barclay Street, Floor 8E, New York, NY

10286.

 

              "Cut-off Date": April 16, 2004.

 

              "Delivery Certificates" has the meaning given to it in Section

2.02 of the Warrant Agreement.

 

              "Depository": The Depository Trust Company, its nominees and their

respective successors.

 

              "Distribution Date": March 15 and September 15 of each year (or if

such date is not a Business Day, the next succeeding Business Day), commencing

on September 15, 2004 and ending on the Final Scheduled Distribution Date.

 

               "Distribution Election": (a) If there occurs an Event of Default

(as defined in the Underlying Securities Indenture) on the Underlying Securities

under clauses (1) or (2) of Section 5.01 of the Underlying Securities Indenture,

then the Trustee, upon receiving notice of such event, shall, on or immediately

after the 30th day after such event, direct the Market Agent to sell the

Underlying Securities and a pro rata portion of the Related Assets held by the

Trust, in accordance with the Sale Procedures, and the Liquidation Proceeds, if

any, shall be divided between the Classes in accordance with the Allocation

Ratio and each Class' portion shall be deposited into such Class' Certificate

Account and distributed to such Class' Certificateholders pro rata on the first

Business Day following such deposit into such Certificate Account.

 

              (b) If, prior to the day on which the Market Agent sells the

Underlying Securities pursuant to paragraph (a) above, there occurs (and the

trustee receives notice of such occurrence) an acceleration of the date of

maturity of the Underlying Securities and the Underlying Securities are declared

to be immediately due and payable in accordance with the Underlying Securities

Indenture, and the Underlying Securities Issuer:

 

              (i) makes full payment of all amounts when due, and such payment

         exceeds the sum of (x) the aggregate stated amount of the Class A

         Certificates plus any accrued and unpaid distributions to the date of

         payment and (y) the sum of the present values, discounted at the rate

         of 7.05% per year, of the unpaid payments due, or to become due, in

         respect of the Class B Payments to be made on the Class B Certificates

         on or after the date of payment (assuming, for purposes of such

         calculation, that the Underlying Securities would have been paid in

         full at their stated maturity, that such acceleration had not occurred,

         and that no portion thereof would have been redeemed prior to such

         maturity date) then all holders of outstanding Call Rights will be

         deemed to have exercised their Call Rights automatically, and the

         Trustee, upon receiving such acceleration proceeds from the Underlying

         Securities Issuer, shall, on the first Business Day following receipt

         of such acceleration proceeds, distribute from such acceleration

         proceeds the following amounts:

 

 

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                   (A) the Class A Call Price or the Class B Call Price per

              Certificate, as applicable, shall be distributed from such payment

              on account of each Certificate called from the holder thereof

              (which holders, pursuant to Section 2.02(d) of the Warrant

              Agreement, shall exclude Certificateholders to whom Delivery

              Certificates (as defined in the Warrant Agreement) were delivered

              in accordance with Section 2.02(d) of the Warrant Agreement),

 

                   (B) for each Class A Certificate, $25.00 plus any accrued and

              unpaid interest on such Class A Certificate to that date of

              payment, or, for each Class B Certificate, the sum of the present

              values, discounted at the rate of 7.05% per annum, of the unpaid

              distributions that were due, or to become due, in respect of the

              Class B Payments to be made on such Class B Certificate on or

              after the date of payment (assuming, for purposes of such

               calculation, that the Underlying Securities would have been paid

              in full on their stated maturity, and that such acceleration had

              not occurred, and that no portion thereof would have been redeemed

              prior to such stated maturity date), as applicable, shall be

              distributed from such payment on account of each Certificate held

              by Certificateholders to whom Delivery Certificates were delivered

              in accordance with Section 2.02(d) of the Warrant Agreement, and

 

                   (C) any amounts remaining shall be divided between the

              Classes in accordance with the Allocation Ratio and each Class'

              portion shall be distributed pro rata among the Call Holders that

              are deemed to have exercised their Call Rights automatically

              pursuant to this clause with respect to that Class and the

              Certificateholders of that Class to whom Delivery Certificates

              were delivered in accordance with Section 2.02(d) of the Warrant

              Agreement;

 

                   If the payment to be made by the Underlying Securities Issuer

              does not exceed the threshold set forth above, the Trustee shall

               divide the amount of such payment between the Trust Certificate

              Classes in accordance with the Allocation Ratio and distribute

              each Class's portion of such amounts pro rata to the Trust

              Certificateholders of that Class.

 

              (ii) makes a partial payment of all amounts when due, then the

         Trustee, upon receiving such payment, shall:

 

                   (A) immediately divide such payment between the Classes in

              accordance with the Allocation Ratio and deposit each Class'

              portion of such payment into that Class' Certificate Account for

              distribution to such Class' Certificateholders pro rata on the

              first Business Day following such deposit into such Certificate

              Account; provided, that if the Underlying Securities Issuer places

              any condition, restriction or obligation on the acceptance of such

              partial payment including but not limited to a waiver of any right

              granted to a holder of the Underlying Securities, such partial

              payment will be rejected by the Trustee and no deposit will be

              made into the Certificate Account,

 

 

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                   (B) divide a principal amount of the Underlying Securities

              equal to the aggregate stated amount of the outstanding Class A

              Certificates between the Classes in accordance with the Allocation

              Ratio and distribute each Class' portion of the Underlying

              Securities to such Class' Certificateholders pro rata and divide a

              pro rata portion of the Related Assets between the Classes in

              accordance with the Allocation Ratio and distribute each Class'

               portion of such Related Assets to such Class' Certificateholders

              pro rata to each Certificateholder's last address as it appears in

              the Certificate Register within three Business Days of receiving

              said notice, and

 

                   (C) if any Underlying Securities are not distributed pursuant

              to clause (B), immediately direct the Market Agent to sell all

              Underlying Securities not so distributed and a pro rata portion of

               the Related Assets held by the Trust, in accordance with the Sale

              Procedures, and the Liquidation Proceeds, if any, shall be divided

              between the Classes in accordance with the Allocation Ratio and

              each Class' portion shall be deposited into such Class'

              Certificate Account and distributed to such Class'

              Certificateholders pro rata on the first Business Day following

              such deposit into such Certificate Account; or

 

               (iii) fails to make such payment when due, then the Trustee, upon

         receiving notice of such failure to make payment, shall:

 

                   (A) divide a principal amount of Underlying Securities equal

              to the aggregate stated amount of the outstanding Class A

              Certificates and a pro rata portion of the Related Assets in

              accordance with the Allocation Ratio between the Classes in

              accordance with the Allocation Ratio and distribute each Class'

              portion to such Class' Certificateholders pro rata to each

              Certificateholder's last address as it appears in the Certificate

              Register within three Business Days of receiving said notice, and

 

                    (B) if any Underlying Securities are not distributed pursuant

              to clause (A), immediately direct the Market Agent to sell all

              Underlying Securities not so distributed and a pro rata portion of

              the Related Assets held by the Trust, in accordance with the Sale

              Procedures, and the Liquidation Proceeds, if any, shall be divided

              between the Classes in accordance with the Allocation Ratio and

              each Class' portion shall be deposited into such Class'

              Certificate Account and distributed to such Class'

              Certificateholders pro rata on the first Business Day following

              such deposit into such Certificate Account.

 

              (c) If the Underlying Securities Issuer of any Concentrated

Underlying Securities ceases to be a reporting company under the Exchange Act,

and no parent guarantor of such Underlying Securities Issuer, if any, includes

in its Exchange Act reports condensed consolidating financial statements setting

forth financial information for the Underlying Securities Issuer, then the

Trustee, upon receiving notice of such event shall (A) divide a principal amount

of Underlying Securities equal to the aggregate stated amount of the outstanding

Class A Certificates and a pro rata portion of the Related Assets in accordance

with the Allocation Ratio between the Classes in accordance with the Allocation

Ratio and distribute

 

 

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each Class' portion to such Class' Certificateholders pro rata to each

Certificateholder's last address as it appears in the Certificate Register

within three Business Days of receiving said notice, and (B) if any Underlying

Securities are not distributed pursuant to clause (A), immediately direct the

Market Agent to sell all Underlying Securities not so distributed and a pro rata

portion of the Related Assets held by the Trust, in accordance with the Sale

Procedures, and the Liquidation Proceeds, if any, shall be divided between the

Classes in accordance with the Allocation Ratio and each Class' portion shall be

deposited into such Class' Certificate Account and distributed to such Class'

Certificateholders pro rata on the first Business Day following such deposit

into such Certificate Account.

 

              (d) Upon receiving (A) notice of an acceleration of the date of

maturity of the Underlying Securities and the Underlying Securities Issuer's

partial payment of all amounts when due as described in subsection (ii) of

clause (b) above, or (B) notice of the events set forth in clause (c) above, the

Trustee shall, 10 days prior to the exercise of any remedy, provide written

notice of the termination of the Trust to the Call Holders. Notwithstanding

subsection (ii) of clause (b) and clause (c), the Trustee shall not distribute

any such partial payment, Underlying Securities or Related Assets to any

Certificateholders before the earlier of (i) the expiration of the 10-day notice

of termination period, and (ii) receipt by the Trust of notice of all Call

Holders' election to exercise their Class A Call Right or Class B Call Right, as

applicable. If less than all outstanding Class A Call Rights or Class B Call

Rights are exercised, upon receiving such notice of election, the Trustee shall

select by lot (or by such other reasonable procedure as may be established by

the Trustee) for purchase by such exercising Call Holders in the case of Class A

Certificates the stated amount of Class A Certificates equal to the stated

amount of Class A Call Rights being exercised multiplied by the aggregate stated

amount of the outstanding Class A Certificates not subject to Delivery

Certificates divided by the aggregate stated amount of the outstanding Class A

Call Rights or, in the case of Class B Certificates, the aggregate notional

principal amount of Class B Certificates equal to the aggregate notional

principal amount of Class B Call Rights being exercised multiplied by the

aggregate notional principal amount of the outstanding Class B Certificates not

subject to Delivery Certificates divided by the aggregate notional principal

amount of the outstanding Class B Call Rights. The Certificateholders of the

Trust Certificates to be purchased shall not be entitled to any right other than

the right to receive payment of an amount equal to the applicable Call Price on

the date the applicable Call Rights are exercised, and such Trust Certificates

shall be deemed to have been automatically surrendered by the Certificateholders

to the Trust for further transfer to the exercising Call Holders. The share of

the payment, Underlying Securities and Related Assets to be distributed with

respect to such called Trust Certificates shall be distributed to the exercising

Call Holders. In the case of a sale by the Market Agent of Underlying Securities

and Related Assets pursuant to clause (a) above, the Trustee shall deliver such

Underlying Securities and Related Assets to the purchaser of such Underlying

Securities and Related Assets only against payment in same day funds and the

Trustee shall deposit the same into the Certificate Account.

 

              "Eligible Investments": As defined in the Standard Terms;

provided, however, that (i) the minimum required rating for long-term

instruments will be equal to the lower of the rating of the Underlying

Securities or the Trust Certificates, and (ii) the rating of any short-term

instruments will be A-1+ by Standard & Poor's Ratings Services and P1 by Moody's

Investors Service, Inc.; and provided, further, that any such investment matures

no later than the Business Day prior to the next succeeding Distribution Date.

 

 

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              "Escrow Agent": As will be set forth in the Escrow Agreement.

 

              "Escrow Agreement": The escrow agreement to be entered into on the

Exercise Date among a given Call Holder, the Trustee and the Escrow Agent

pursuant to Section 14(c)(iii)(2) hereof.

 

              "Event of Default": (i) A default in the payment of any interest

on any Underlying Security after the same becomes due and payable (subject to

any applicable grace period), (ii) a default in the payment of the principal of

or any installment of principal of any Underlying Security when the same becomes

due and payable and (iii) any other event specified as an event of default in

the Underlying Securities Indenture. For a summary of certain events of default

in the Underlying Securities Indenture, please refer to the Prospectus

Supplement.

 

              "Exercise Date": any date on which a Call Holder notifies the

Trustee of its intention to exercise its Call Right in accordance with the

provision of Section 14(c)(iii), any date a Call Holder is deemed to have

exercised its Call Right pursuant to Section 2.02(i)(iv) of the Warrant

Agreement, or any date following the acceleration of the Underlying Securities

and payment in full of all amounts when due by the Underlying Securities Issuer.

 

              "Final Scheduled Distribution Date": March 15, 2033 (or if such

date is not a Business Day, the next succeeding Business Day).

 

              "Fixed Pass-Through Rate": With respect to the Class A

Certificates, 6.25% per annum and with respect to the Class B Certificates,

0.80% per annum.

 

              "Optional Exchange Date": Any Distribution Date or such date as is

designated pursuant to Section 7(b) hereof.

 

               "Ordinary Expenses": The compensation due to the Trustee for

Ordinary Expenses as defined in the Standard Terms, which, with respect to

Ordinary Expenses other than those referred to in clause (iii) of such

definition and other than the costs of converting to EDGAR format the periodic

reports required for the Trust under the Exchange Act, shall be fixed at $2,000

per annum.

 

              "Pass-Through Rate": For each Class of Certificates, the

associated Fixed Pass-Through Rate.

 

              "Prepaid Ordinary Expenses": Zero (0).

 

              "Prospectus Supplements": The Prospectus Supplement dated August

19, 2003 relating to the Class A Certificates and the Prospectus Supplement

dated August 19, 2003 relating to the Class B Certificates.

 

               "Rating Agency": Moody's Investors Service, Inc. and Standard &

Poor's Ratings Services.

 

              "Record Date": The Business Day immediately preceding each

Distribution Date.

 

 

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              "Series": PPLUS Trust Series CMT-1.

 

               "Underlying Securities": The $35,000,000 aggregate principal

amount of 7.05% Notes due March 15, 2033 issued by the Underlying Securities

Issuer, as described in Schedule I hereto.

 

              "Underlying Securities Indenture": As set forth in Schedule I.

 

              "Underlying Securities Issuer": Comcast Corporation, a

Pennsylvania corporation.

 

              "Underlying Securities Prospectus Supplement": The prospectus

supplement dated March 12, 2003 filed with the Securities and Exchange

Commission by the Underlying Securities Issuer with respect to the Underlying

Securities.

 

              "Warrant Agreement": The Warrant Agreement, dated as of April 16,

2004, by and between the Trust and the Warrant Agent (as defined in the Warrant

Agreement).

 

              (b) The terms listed below are not applicable to this Series.

 

              "Accounting Date"

 

              "Administration Account"

 

              "Administrative Agent"

 

              "Administrative Agent Termination Event"

 

               "Administration Agreement"

 

              "Advance"

 

              "Calculation Agent"

 

              "Eligible Expense"

 

              "Exchange Rate Agent"

 

              "Floating Pass-Through Rate"

 

              "Letter of Credit"

 

               "Limited Guarantor"

 

              "Limited Guaranty"

 

              "Notional Amount"

 

 

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              "Requisite Reserve Amount"

 

              "Reserve Account"

 

              "Retained Interest"

 

              "Surety Bond"

 

              "Swap Agreement"

 

              "Swap Counterparty"

 

              "Swap Distribution Amount"

 

              "Swap Guarantee"

 

              "Swap Guarantor"

 

              "Swap Receipt Amount"

 

              "Swap Termination Payment"

 

              Section 3. Designation of Trust and Certificates. (a) The Trust

created hereby shall be known as the "PPLUS Trust Series CMT-1". The Class A

Certificates and Class B Certificates evidencing certain undivided ownership

interests therein shall be known as the "PPLUS Class A 6.25% Trust Certificates

Series CMT-1" and the "PPLUS Class B 0.80% Trust Certificates Series CMT-1,"

respectively.

 

              (b) The Class A Certificates and Class B Certificates shall be

held through the Depository in book-entry form and shall be substantially in the

form attached hereto as Exhibits B and C, respectively. The Class A Certificates

shall be issued in authorized denominations of $25.00 and integral multiples

thereof and the Class B Certificates shall be issued with a notional principal

amount of $25.00 and integral multiples thereof. Except as provided in the

Standard Terms, the Trust shall not issue additional Certificates or incur any

indebtedness; provided, however, from time to time, upon obtaining prior written

confirmation by each Rating Agency that such action will not result in a

downgrading or withdrawal of its rating of the Certificates, the Depositor may,

without the consent of the Certificateholders, increase the amount of the

Underlying Securities in the Trust and the Trust may issue a corresponding

amount of additional Certificates in accordance with Section 5.12(a) of the

Standard Terms except that clauses (v), (vi) and (vii) of Section 5.12(a) shall

not apply to this Series and a corresponding number of additional Warrants in

accordance with Article I of the Warrant Agreement.

 

              (c) The Class A Certificates will be entitled to receive (i) on

each Distribution Date, commencing on September 15, 2004 and ending on the Final

Scheduled Distribution Date, or such earlier date if the Underlying Securities

are redeemed prior to the Final Scheduled Distribution Date, distributions at a

rate of 6.25% per annum on the stated amount of the Class A Certificates and

(ii) on the Final Scheduled Distribution Date, a distribution of the aggregate

principal amount of the Underlying Securities.

 

 

<PAGE>

 

              (d) On each Distribution Date, the Class B Certificates will be

entitled to receive a distribution of 0.80% per annum multiplied by the notional

principal amount of the Class B Certificates (the "Class B Payments").

 

              (e) Any reference to the principal amount of the Certificates

shall be construed as a reference to the stated amount of the Class A

Certificates and/or the notional principal amount of the Class B Certificates,

unless otherwise indicated.

 

              Section 4. Satisfaction of Conditions to Initial Execution and

Delivery of Trust Certificates. The Trustee hereby acknowledges receipt, on or

prior to the Closing Date, of:

 

               (i) the Underlying Securities set forth on Schedule I hereto; and

 

              (ii) all documents set forth in Section 5.12 of the Standard Terms

         except that clauses (v), (vi) and (vii) of Section 5.12(a) shall not

         apply to this Series.

 

              Section 5. Distributions. (a) On each Distribution Date, the

Trustee shall apply the funds in the Certificate Account, solely to the extent

of Available Funds in the Certificate Account, as follows:

 

              (i) first, to the Trustee, reimbursement for any approved

         Extraordinary Trust Expenses incurred by the Trustee in accordance with

         Section 6(b) hereof and approved by not less than 100% of the

         Certificateholders;

 

              (ii) second, pro rata to the holders of the Class A Certificates

         and Class B Certificates, distributions accrued during the related

         Collection Period at the rate of 6.25% per annum on the stated amount

         of the Class A Certificates to holders of the Class A Certificates on

         such Distribution Date and 0.80% per annum multiplied by the notional

         principal amount of Class B Certificates to holders of the Class B

         Certificates on such Distribution Date, commencing on September 15,

          2004 and ending on the Final Scheduled Distribution Date;

 

              (iii) third, divided between the Classes in accordance with the

         proportionate interest of each Class in any delayed interest payments

         on the Underlying Securities (e.g., 6.25/7.05 to the Class A

         Certificateholders and 0.80/7.05 to the Class B Certificateholders) and

         each Class' portion distributed to the holders of each Class pro rata,

         if available, any additional payments paid by the Underlying Securities

         Issuer as a result of a delay in the receipt by the Trustee of any

         interest payment on the Underlying Securities;

 

              (iv) fourth, pro rata to the Class A Certificateholders, on the

         Final Scheduled Distribution Date only, a distribution of the aggregate

         principal amount of the Underlying Securities;

 

              (v) fifth, to the extent there remain Available Funds in the

         Certificate Account, to any creditors of the Trust in satisfaction of

         liabilities thereto; and

 

 

<PAGE>

 

              (vi) sixth, to the extent there remain Available Funds in the

         Certificate Account, to Merrill Lynch Capital Services, Inc. and if no

         Available Funds remain in the Certificate Account then no distribution

         will be made pursuant to this Section 5(a)(vi).

 

Subject to Section 9(c) hereof, to the extent Available Funds are insufficient

to make any required distributions due to the Certificates on any Distribution

Date, any shortfall will be carried over and will be distributed on the next

Distribution Date on which sufficient funds are available on the Available Funds

to pay such shortfall. Neither Merrill Lynch & Co. nor any of its Affiliates

will have any claim against the Trust pursuant to Section 5(a)(vi) if the Trust

fails to make a distribution on a Distribution Date to such person because no

Available Funds remain in the Certificate Account on such Distribution Date.

 

              (b) On an Optional Exchange Date, the Trustee shall distribute to

Merrill Lynch & Co. or any of its Affiliates, other than the Depositor, or any

other Person exercising an optional exchange pursuant to Section 7 hereof, as

the case may be, Underlying Securities in accordance with Section 7 hereof.

 

              Section 6. Trustee's Fees; Escrow Agent's Fees. (a) Payment to the

Trustee of Ordinary Expenses shall be as set forth in a separate agreement

between the Trustee and the Depositor. The Trustee agrees that in the event

Ordinary Expenses are not paid in accordance with such agreement, it shall (i)

not have any claim or recourse against the Trust or the property of the Trust

with respect thereto and (ii) continue to perform all of its services as set

forth herein unless it elects to resign as Trustee in accordance with Section

7.08 of the Standard Terms.

 

              (b) Extraordinary Trust Expenses shall not be paid out of the

Deposited Assets unless (i) the Trustee is satisfied that it will have adequate

security or indemnity in respect of such costs, expenses and liabilities, and

(ii) all the Certificateholders of Certificates then outstanding have voted to

require the Trustee to incur such Extraordinary Trust Expenses. If Extraordinary

Trust Expenses are not approved unanimously as set forth in clause (ii), such

Extraordinary Trust Expenses shall not be an obligation of the Trust, and the

Trustee shall not file any claim against the Trust therefor notwithstanding

failure of Certificateholders to reimburse the Trustee. In addition, if the

conditions in (i) and (ii) are not both satisfied, the Trustee shall not be

obligated to incur any Extraordinary Trust Expense.

 

              (c) In the event that one or more Call Holders is required to

deposit the applicable Call Price with the Escrow Agent on the Exercise Date

pursuant to Section 14(c)(iii)(2) hereof, the Depositor and the Escrow Agent

shall enter into an agreement reasonably acceptable to both parties thereto

whereby the Depositor shall pay to the Escrow Agent a fee in consideration for

its services under the Escrow Agreement or Escrow Agreements, as applicable.

 

              Section 7. Optional Exchange. (a) Merrill Lynch & Co. or any of

its Affiliates (other than the Depositor), if it holds Certificates, or any

other (i) Person or (ii) group of Affiliated Persons (in each case other than

the Depositor) holding Class A Certificates with an aggregate stated amount of

$5 million or more and an equal aggregate notional principal amount of Class B

Certificates, all acquired pursuant to the exercise of Class A Call Rights or

Class B Call Rights held by it, (provided that, in the case of a group of

Affiliated Persons, no single Affiliated Person holds Class A Certificates with

an aggregate stated amount of less than

 

<PAGE>

 

$500,000 and Class B Certificates with a notional principal amount of less than

$500,000 acquired pursuant to the exercise of Class A Call Rights or Class B

Call Rights, as applicable, held by it) may notify the Trustee, not less than 30

days but not more than 60 days prior to any Optional Exchange Date, that:

 

              (i) such Person intends or Affiliated Persons intend to tender an

         Authorized Denomination of Class A Certificates and an equal number of

         Class B Certificates that it holds or they hold to the Trustee on such

         Optional Exchange Date in exchange for a proportional amount of

         Underlying Securities;

 

              (ii) such exchange will not cause the Trust or Depositor to fail

         to satisfy the applicable requirements for exemption under Rule 3a-7

         under the Investment Company Act of 1940, as amended;

 

              (iii) such exchange will not affect the characterization of the

         Trust as a "grantor trust" under the Code;

 

              (iv) in the case of an exchange of less than all outstanding

         Certificates, such exchange will not cause a failure to satisfy the

         minimum requirements for the Class A Certificates to remain listed on

         the New York Stock Exchange, unless the Person or Affiliated Persons

         tendering such Certificates will hold all remaining outstanding

         Certificates upon completion of the exchange of such Certificates

         pursuant to this Section 7;

 

              (v) such exchange will not be made with respect to Certificates

         subject to outstanding Call Rights held by any Person or Affiliated

         Persons other than the Person or Affiliated Persons exercising such

         exchange; and

 

              (vi) in the case of an exchange by a person other than Merrill

         Lynch & Co. or any of its Affiliates (other than the Depositor), such

         exchange will be made with respect to an aggregate stated amount of

         Class A Certificates equal to the aggregate stated amount of Class A

         Certificates acquired by such Person or Affiliated Persons pursuant to

         the exercise of the applicable Call Rights held by it or them.

 

Upon tender of such Class A Certificates and Class B Certificates on such

Optional Exchange Date, the Trustee will deliver to the Person or Affiliated

Persons tendering such Certificates an amount of Underlying Securities having a

principal amount equal to the aggregate principal amount of Underlying

Securities then held by the Trust times the aggregate stated amount of Class A

Certificates being tendered divided by the aggregate stated amount of Class A

Certificates then outstanding, and in the case of an exchange by Merrill Lynch &

Co. or any of its Affiliates, where such Person or Affiliated Person holds

unexercised Class A Call Rights respecting the exchanged Class A Certificates

and a corresponding number of unexercised Class B Call Rights respecting the

exchanged Class B Certificates, such unexercised Class A Call Rights and Class B

Call Rights held by such Person or Affiliated Person shall be cancelled. Any

Call Holder that has properly provided notice of exercise to the Warrant Agent

and has deposited the Call Price with the Escrow Agent may concurrently

designate an Optional Exchange Date,

 

<PAGE>

 

and such Optional Exchange Date shall be specified in the notice of exercise,

provided, however, that such Optional Exchange Date shall not occur prior to the

applicable Call Date.

 

              (b) When a tender offer for the Underlying Securities is pending,

Merrill Lynch & Co. or any of its Affiliates (other than the Depositor), if it

holds Certificates, or any other Person or Affiliated Persons (other than the

Depositor, or an Affiliate of the Person making such tender offer) holding Class

A Certificates with an aggregate stated amount of $5 million or more and an

equal aggregate notional principal amount of Class B Certificates, all acquired

pursuant to the exercise of the applicable Call Rights held by it (provided

that, in the case of a group of Affiliated Persons, no single Affiliated Person

holds Class A Certificates with an aggregate stated amount of less than $500,000

and Class B Certificates with a notional principal amount of less than $500,000

acquired pursuant to the exercise of Class A Call Rights or Class B Call Rights,

as applicable, held by it), may notify the Trustee, not less than 5 days but not

more than 60 days prior to any such Optional Exchange Date as they may

designate, that:

 

              (i) such Person intends or such Affiliated Persons intend to

         tender an Authorized Denomination of Class A Certificates with an

         aggregate stated amount of $5 million or more and a corresponding

         number of Class B Certificates that it holds or they hold to the

          Trustee on such Optional Exchange Date in exchange for a proportional

         amount of Underlying Securities;

 

              (ii) such exchange will not cause the Trust or Depositor to fail

         to satisfy the applicable requirements for exemption under Rule 3a-7

         under the Investment Company Act of 1940, as amended;

 

              (iii) such exchange will not affect the characterization of the

         Trust as a "grantor trust" under the Code,

 

              (iv) in the case of an exchange of less than all outstanding

         Certificates, such exchange will not cause a failure to satisfy the

         minimum requirements for the Certificates to remain listed on the New

         York Stock Exchange, unless the Person or Affiliated Persons tendering

         such Certificates will hold all remaining outstanding Certificates upon

         completion of the exchange of such Certificates pursuant to this

         Section 7;

 

              (v) such exchange will not be made with respect to Certificates

         subject to outstanding Call Rights held by any Person or Affiliated

         Persons other than the Person or Affiliated Persons exercising such

         exchange; and

 

              (vi) in the case of an exchange by a person other than Merrill

         Lynch & Co. or any of its Affiliates (other than the Depositor), such

         exchange will be made with respect to an aggregate stated amount of

         Class A Certificates equal to the aggregate stated amount of Class A

         Certificates acquired by such Person or Affiliated Persons pursuant to

         the exercise of Call Rights held by it or them.

 

Upon tender of such Class A Certificates and Class B Certificates on such

Optional Exchange Date, the Trustee will deliver to the Person or Affiliated

Persons tendering such Certificates an amount of Underlying Securities having a

principal amount equal to the aggregate principal

 

 

<PAGE>

 

amount of Underlying Securities then held by the Trust times the aggregate

stated amount of Class A Certificates being tendered divided by the aggregate

stated amount of Class A Certificates then outstanding, and in the case of an

exchange by Merrill Lynch & Co. or any of its Affiliates, where such Person or

Affiliated Person holds unexercised Class A Call Rights respecting the exchanged

Class A Certificates and a corresponding number of unexercised Class B Call

Rights respecting the exchanged Class B Certificates, such unexercised Class A

Call Rights and Class B Call Rights held by such Person or Affiliated Person

shall be cancelled.

 

              (c) The requirements set forth in paragraphs (a)(ii), (a)(v) and

(a)(vi) of Section 4.07 of the Standard Terms do not apply to an Optional

Exchange pursuant to this Section 7.

 

              (d) Any costs associated with the exercise of the rights granted

under paragraphs (a) and (b) of this Section 7 will be borne by the Person or

Affiliated Persons exercising such rights and not by the Trust.

 

              (e) In no event can an Optional Exchange be made unless an equal

number of Class A and Class B Certificates are tendered for exchange by each

Holder exercising this Optional Exchange right.

 

              Section 8. Events of Default. Within 30 days of its receipt of

notice of the occurrence of an Event of Default, the Trustee will give notice to

the Certificateholders, transmitted by mail, of all such uncured or unwaived

Events of Default actually known to it. However, unless there is an Event of

Default relating to the payment of principal of or interest on any of the

Underlying Securities, the Trustee will be protected in withholding such notice

if in good faith it determines that the withholding of such notice is in the

interest of the Certificateholders; provided, however, that the Trustee shall

give notice of an Event of Default to the extent required under "Distribution

Election."

 

              Section 9. Miscellaneous. (a) The provisions of Section 4.04,

Advances, of the Standard Terms shall not apply to the Certificates.

 

              (b) The Certificateholders shall not be entitled to terminate the

Trust or cause the sale or other disposition of the Underlying Securities;

provided, however, that Certificateholders holding all, but not less than all,

of the outstanding Certificates may exercise their rights under Section 13(b)

with respect to all such Certificates.

 

              (c) If the Trustee has not received payment with respect to a

Collection Period on the Underlying Securities on or prior to the related

Distribution Date, such distribution will be made promptly upon receipt of such

payment. No additional amounts shall accrue on the Certificates or be owed to

Certificateholders as a result of such delay; provided, however, that any

additional interest owed and paid by the Underlying Securities Issuer as a

result of such delay shall be paid to the Class A Certificateholders and Class B

Certificateholders, proportionately to the ratio of their respective

entitlements to interest payments.

 

              (d) The outstanding principal balance of the Class A Certificates

and the aggregate notional principal amount of the Class B Certificates shall

not be reduced by the amount of any Realized Loss.

 

 

<PAGE>

 

              (e) The Trust may not engage in any business or activities other

than in connection with, or relating to, the holding, protecting and preserving

of the Deposited Assets and the issuance of the Certificates and Call Rights,

and other than those required or authorized by the Trust Agreement or incidental

and necessary to accomplish such activities. The Trust may not issue or sell any

certificates or other obligations other than the Certificates and Call Rights,

or otherwise incur, assume or guarantee any indebtedness for money borrowed.

 

              (f) The Trust may not consolidate, amalgamate, merge with or into,

or be replaced by or convey, transfer or lease its properties and assets

substantially as an entirety to, any another entity or permit any other entity

to consolidate, amalgamate, merge with or into, or replace the Trust.

 

              (g) Except as expressly provided in the Trust Agreement, the Trust

may not sell the Underlying Securities.

 

              (h) If the Trustee resigns or is removed as Trustee in accordance

with Section 7.08 of the Trust Agreement, in addition to providing the Depositor

with written notice, the Trustee shall also provide the Rating Agencies with

written notice.

 

              (i) Merrill Lynch & Co. shall act as the Market Agent and shall

serve in such capacity in accordance with the terms of the Market Agent

Agreement attached hereto as Exhibit D.

 

              (j) Notwithstanding anything in the Trust Agreement to the

contrary, the Trustee may be removed upon 60 days prior written notice delivered

by Certificateholders holding Certificates that represent the Required

Percentage-Removal, and such removal shall take effect upon the appointment of a

successor Trustee and its acceptance of such appointment as provided in the

Trust Agreement.

 

              Section 10. Notices. (a) All directions, demands and notices

hereunder or under the Standard Terms shall be in writing and shall be delivered

as set forth below (unless written notice is otherwise provided to the Trustee).

 

              If to the Depositor, to:

 

              Merrill Lynch Depositor, Inc.

              c/o Merrill Lynch & Co.

              World Financial Center

              New York, NY 10080

              Attention:   Michael F. Connor

              Telephone:   (212) 449-2401

              Facsimile:   (212) 449-9054

 

 

<PAGE>

 

              If to the Trustee, to:

 

              The Bank of New York

              Corporate Trust Dealing & Trading Group

              101 Barclay Street, Floor 8E

              New York, NY 10286

              Attention:   PPLUS Trust Series CMT-1

              Telephone:   (212) 815-2915

              Facsimile:   (212) 815-2380

 

 

              If to the Securities Intermediary, to:

 

              The Bank of New York

              Corporate Trust Dealing & Trading Group

              101 Barclay Street, Floor 8E

              New York, NY 10286

              Attention:   PPLUS Trust Series CMT-1

              Telephone:   (212) 815-2915

              Facsimile:   (212) 815-2380

 

              If to the Warrant Agent, to

 

              The Bank of New York

              Corporate Trust Dealing & Trading Group

              101 Barclay Street, Floor 8E

              New York, NY 10286

              Attention:   PPLUS Trust Series CMT-1

              Telephone:   (212) 815-2915

              Facsimile:   (212) 815-2380

 

              If to the Rating Agencies, to:

 

              Moody's Investors Service, Inc.

              99 Church Street

              New York, NY 10007

              Attention:   CBO/CLO Monitoring Department

              Telephone:   (212) 553-1494

              Facsimile:   (212) 553-0355

 

              and to:

 

 

<PAGE>

 

              Standard & Poor's Ratings Services

              55 Water Street, 40th Floor

              New York, NY 10041

              Attention:   Structured Finance Surveillance Group

              Telephone:   (212) 438-2482

              Facsimile:   (212) 438-2664

 

              (b) Copies of any tender offer materials and all directions,

demands and notices required to be given to the Certificateholders hereunder or

under the Standard Terms will be given to the Warrant Agent by facsimile

transmission and by mail.

 

              Section 11. Governing Law. This Supplement and the transactions

described herein shall be construed in accordance with and governed by the laws

of the State of New York.

 

              Section 12. Counterparts. This Supplement may be executed in any

number of counterparts, each of which shall be deemed to be an original, and all

such counterparts shall constitute but one and the same instrument.

 

               Section 13. Termination of the Trust. (a) The Trust shall

terminate upon the earlier of (i) the payment in full at maturity or sale by the

Trust after a payment default on the Underlying Securities and the distribution

in full of all amounts due to the Certificateholders, (ii) the distribution to

the Certificateholders of all Underlying Securities in accordance with the

Distribution Election, (iii) the exchange of all outstanding Certificates for

Underlying Securities pursuant to one or more Optional Exchanges, (iv) the Final

Scheduled Distribution Date and (v) the holders of all, but not less than all,

of the Certificates exercising their election in Section 13(b) below.

 

              (b) Certificateholders who hold all, but not less than all, of the

outstanding Certificates may, upon prior written notice to the Rating Agencies,

elect to terminate the Trust at any time; provided that (i) the exercise of such

termination right would not cause the Trust or the Depositor to fail to satisfy

the applicable requirements for exemption under Rule 3a-7 under the Investment

Company Act of 1940, as amended and (ii) if and for so long as the call warrants

remain outstanding, all of the Call Holders have consented to such termination.

 

              (c) To the extent that the provisions of this Section 13 conflict

with Section 10.01 of the Standard Terms, the latter shall control.

 

              Section 14. Sale or Redemption of Underlying Securities; Call

Right

 

              (a) In the case of Extraordinary Trust Expenses approved by 100%

of the Certificateholders of each Class, pursuant to Section 6(b) hereof, the

Trustee may, upon prior written notice to the Rating Agencies, elect to sell all

or a portion of the Underlying Securities to pay such Extraordinary Trust

Expenses.

 

              (b) As a holder of the Underlying Securities, the Trust may

receive redemption proceeds (the "Redemption Amount") upon the redemption of the

Underlying Securities, in whole or in part, by the Underlying Securities Issuer

pursuant to the Underlying Securities Indenture and the Underlying Securities

Prospectus Supplement. (i) Upon the

 

 

<PAGE>

 

redemption of the Underlying Securities in whole, but not in part, (A) on the

stated maturity date of such Underlying Securities or (B) at the option of the

Underlying Securities Issuer, upon at least 30 days, but not more than 60 days,

prior notice pursuant to the Underlying Securities Indenture, the Redemption

Amount will be distributed pro rata to the holders of the Underlying Securities,

including the Trust. Upon receiving such Redemption Amount, the Trust shall

distribute the Redemption Amount first, pro rata to the Class A

Certificateholders until each shall have received the stated amount of each

Class A Certificate it holds plus accrued and unpaid distributions on the Class

A Certificates to the Redemption Date; second, pro rata to the Class B

Certificateholders until each shall have received the sum of the present values

(discounted at the rate of 7.05% per annum) of the Class B Payments on or after

the Redemption Date (assuming, for purposes of such calculation, that the

Underlying Securities would have been paid in full on their stated maturity with

no such redemption or acceleration); and third, any remaining Redemption Amount

will be divided between the Classes of trust certificates in accordance with a

percentage equal to 6.25/7.05 of such amount to the Class A Certificateholders

and 0.80/7.05 of such amount to the Class B Certificateholders, and within each

class the Redemption Amount will be distributed pro rata to the

Certificateholders of the Class A or Class B Certificates entitled to such

Redemption Amount upon the date such Redemption Amount is received in

immediately available funds by the Trust if such Redemption Amount is received

prior to 1:00 p.m. local time at the office of the Trustee and otherwise on the

next Business Day. (ii) Upon any redemption of the Underlying Securities in part

at the option of the Underlying Securities Issuer upon at least 30 days, but not

more than 60 days, prior notice pursuant to the Underlying Securities Indenture,

the Redemption Amount will be distributed pro rata to the holders of the

Underlying Securities, including the Trust. Upon any such redemption in part,

the Trustee shall select by lot (or by such other reasonable procedure as may be

established by the Trustee) a stated amount of Class A Certificates and an equal

notional principal amount of Class B Certificates equal to the aggregate amount

of each Class of Certificates then outstanding multiplied by the aggregate

principal amount of Underlying Securities subject to redemption and then held by

the Trust divided by the aggregate principal amount of Underlying Securities

then held by the Trust; provided that the amount of each Class of Trust

Certificates being selected by lot may be reduced by the aggregate stated amount

of Class A Certificates or notional principal amount of Class B Certificates, as

applicable, called pursuant to the exercise of Call Rights prior to such

redemption in accordance with the terms of the Warrant Agreement. Upon receiving

such Redemption Amount, the Trust shall distribute the Redemption Amount, first,

pro rata to the Class A Certificateholders selected by lot pursuant to this

subsection until each shall have received the stated amount of each Class A

Certificate it holds plus accrued and unpaid distributions on the Class A

Certificates to the Redemption Date; second, pro rata to the Class B

Certificateholders selected by lot pursuant to this subsection until each shall

have received the sum of the present values (discounted at the rate of 7.05% per

annum) of the Class B Payments on or after the Redemption Date (assuming for

purposes of such calculation, that the Underlying Securities would have been

paid in full on their stated maturity with no such redemption or acceleration);

and third, any remaining Redemption Amount will be divided between the Classes

of trust certificates in accordance with a percentage equal to 6.25/7.05 of such

amount to the Class A Certificateholders and 0.80/7.05 of such amount to the

Class B Certificateholders, and within each class the Redemption Amount will be

distributed pro rata to the Certificateholders of the Class A or Class B

Certificates. Such Redemption Amount will be distributed to the Class A and

Class B Certificateholders entitled to such Redemption Amount upon the date such

 

 

<PAGE>

 

Redemption Amount is received in immediately available funds by the Trust if

such Redemption Amount is received prior to 1:00 pm local time at the office of

the Trustee and otherwise on the next Business Day. Upon distribution of the

Redemption Amount by the Trustee, the Trust Certificates called pursuant to the

exercise of Call Rights and the Trust Certificates selected by lot pursuant to

this subsection (ii) shall be deemed to have been surrendered for cancellation

by the Trust, and the aggregate stated amount of the outstanding Class A

Certificates and the aggregate notional principal amount of the outstanding

Class B Certificates shall be reduced by the aggregate stated amount of such

Class A Certificates and the aggregate notional principal amount of such Class B

Certificates, as applicable; provided that the right of a Certificateholder to

receive the Call Price will not be affected by any such deemed surrender.

Payment of the Redemption Amount with respect to the Certificates will be made

to the Call Holder exercising the Call Rights.

 

              (c) The Call Terms are as follows:

 

              (i) The initial holders of the Call Rights are as named in the

         Call Warrants and such holders may transfer the Call Rights, in whole

         or in part, to one or more third parties in privately negotiated

         transactions;

 

              (ii) A Call Holder that has met the exercise requirements set

         forth in paragraph (c)(iii) of this Section 14 may, on the Call Date,

         exercise its option to purchase, in whole or in part, a principal or

         notional amount of Class A or Class B Certificates, as applicable,

         proportionate to such Call Holder's exercised Call Warrants, in

         Authorized Denominations of the Class A or Class B Certificates at the

         Class A Call Price or Class B Call Price, as applicable;

 

              (iii) In order to exercise its Call Right on a Call Date, a Call

         Holder must, not less than 30 days (or not less than three days in the

         case of an announcement of any redemption of the Underlying Securities

         or other unscheduled payment of the Underlying Securities or after

         receipt of notice of termination of the Trust or not less than five

         Business Days prior to the expiration of a tender offer for the

         Underlying Securities) but not more than 60 days prior to such Call

          Date:

 

                   (1) notify the Trustee in writing of its intention to

              exercise such Call Right (which notice is irrevocable, subject to

              Section 2.02(i)(v) of the Warrant Agreement) and whether such

              exercise is in connection with a tender offer for the Underlying

              Securities. In the event that such notice is provided in

              connection with a tender offer for the Underlying Securities, if

              the exercising Holder did not receive from the Warrant Agent

              notice of a Tender Offer, then such Holder shall also provide the

              Warrant Agent with any information the Holder may have from a

              third-party source indicating that such Tender Offer is pending.

 

                   (2) deposit the applicable Call Price with the Escrow Agent

              (the "Escrow Deposit") to be held in escrow pursuant to an Escrow

              Agreement reasonably satisfactory to the Trustee and substantially

               in the form attached hereto as Exhibit E (to be entered into

              immediately preceding delivery of the applicable Call Price by

              such Call Holder to the Escrow Agent) until such Call Price is

              paid

 

 

<PAGE>

 

               by the Trustee to the Certificateholders in accordance with

              paragraph (d) of this Section 14 or returned to the exercising

              Holders pursuant to subsection (i) of Section 2.02 of the Warrant

              Agreement; provided, that if (a) all of the outstanding Trust

              Certificates of a given Class are to be purchased pursuant to the

              exercise of the Warrants on an Exercise Date and the exercising

              Call Holder at such time holds Class A Certificates or Class B

              Certificates that are subject to Call Rights, the Call Holder may

              deposit such Class A Certificates or Class B Certificates with the

              Escrow Agent in lieu of the portion of the Call Price that would

              relate thereto, and (b) if less than all of the outstanding Class

              B Trust Certificates are to be purchased pursuant to the exercise

              of the Warrants on an Exercise Date and the exercising Call Holder

               at such time holds Class B Certificates that are subject to Call

              Rights, the Call Holder may deposit such Class B Certificates with

              the Escrow Agent in lieu of the portion of the Call Price that

              would relate thereto.

 

                   (3) provide the Trustee with any other documents customary

              for a transaction of this nature, including a certificate of the

              Call Holder certifying the solvency of such Call Holder on such

               date; provided that the Call Holder need not provide any such

              solvency certificate if the rating of the senior, unsecured

              long-term debt of the Call Holder, or the Call Holder's credit

              support provider, if applicable, by Moody's Investors Service,

              Inc. and Standard & Poor's Ratings Services is in one of the

              investment grade categories of Moody's Investors Service, Inc. and

              Standard & Poor's Ratings Services, respectively, on such date.

 

The provisions of this Section 14(c)(iii)(1) through (3) shall not apply if

Warrants are being exercised upon an acceleration of the Underlying Securities

and payment in full by the Underlying Securities Issuer of all amounts due upon

such acceleration.

 

              (d) In connection with any exercise of the Call Rights to purchase

Class A Certificates, the Trustee shall select by lot (or by such other

reasonable procedure as may be established by the Trustee) a stated amount of

the outstanding Class A Certificates to be surrendered by the Class A

Certificateholders thereof to the Trustee upon any such exercise (other than

Class A Trust Certificates held by any Person to whom a Delivery Certificate was

delivered in accordance with Section 2.02(d) of the Warrant Agreement, as

evidenced by the registration of such Delivery Certificate in the Delivery

Register in accordance with Section 4.01 of the Warrant Agreement), deliver such

Class A Certificates to the exercising Call Holder and the proceeds of the Class

A Call Price shall be distributed pro rata among such Class A Certificateholders

on the Call Date in accordance with the provisions of the Warrant Agreement. In

connection with any exercise of the Call Rights to purchase Class B

Certificates, if the amount to be purchased exceeds the amount of Trust

Certificates of such Class held by the Call Holder and deposited with the Escrow

Agent, the Trustee shall select by lot (or by such other reasonable procedure as

may be established by the Trustee) an aggregate notional principal amount of the

outstanding Class B Certificates to be surrendered by the Class B

Certificateholders thereof to the Trustee upon any such exercise (other than

Class B Trust Certificates held by any Persons to whom a Delivery Certificate

was delivered in accordance with Section 2.02(d) of the Warrant Agreement, as

evidenced by the registration of such Delivery Certificate in the Delivery

Register in accordance with Section 4.01 of the Warrant Agreement), deliver such

Class B Certificates to the exercising Call Holder and the proceeds of the Class

B Call Price shall be distributed pro

 

 

<PAGE>

 

rata among such Certificateholders on the Call Date in accordance with the

provisions of the Warrant Agreement. Upon distribution of the applicable Call

Price, the Trust Certificates called pursuant to the exercise of Call Rights

shall be deemed to have been surrendered and such Trust Certificates shall be

transferred to the Call Holder; provided that the right of a Certificateholder

to receive the Call Price will not be affected by any such deemed surrender.

 

              (e) The rights of the Certificateholders under the Trust Agreement

and the Certificates are limited by the terms, provisions and conditions of the

Trust Agreement and the Warrant Agreement with respect to the exercise of the

applicable Call Rights by the Call Holder. The Certificateholders, by their

acceptance of Certificates, covenant and agree to tender any and all

Certificates to the Warrant Agent upon the Call Holder's exercise of Call Rights

and deposit of the applicable Call Price with the Escrow Agent for such

Certificates in accordance with the applicable procedures in the Warrant

Agreement.

 

              (f) Upon receipt of a notice of a tender offer for the Underlying

Securities, the Trustee shall deliver notice of the tender offer to the Warrant

Agent and holders of Delivery Certificates (as defined in Section 2.02(d) of the

Warrant Agreement) within two Business Days after receipt of notice from the

Tender Offeror (as defined in the Warrant Agreement). Within two Business Days

of the expiration of the period for validly delivering tender offer exercise

notices pursuant to Section 2.02(i)(i) of the Warrant Agreement, the Trustee

shall, after giving effect to the exercise of Call Rights with respect to Trust

Certificates already held by the Call Holder, as set forth in the Warrant

Agreement, (A) select by lot (or by such other reasonable procedure as may be

established by the Trustee), in the case of Class A Certificates, a stated

amount of Class A Certificates equal to the aggregate stated amount of Class A

Certificates not subject to Delivery Certificates then outstanding multiplied by

the aggregate principal amount of Class A Call Rights being exercised divided by

the aggregate principal amount of the outstanding Class A Call Rights and, in

the case of Class B Certificates an aggregate notional principal amount of Class

B Certificates equal to the aggregate notional principal amount of Class B

Certificates not subject to Delivery Certificates then outstanding multiplied by

the aggregate notional principal amount of Class B Call Rights being exercised

divided by the aggregate notional principal amount of the outstanding Class B

Call Rights and (B) notify the Certificateholders of the selected Certificates

that, subject to Section 2.02(i) of the Warrant Agreement, such Certificates

will be purchased on the Call Date. Upon the Trustee's receipt of the tender

offer proceeds, the applicable Call Price will be distributed pursuant to

Section 2.02(e) and Section 2.02(i)(vi) of the Warrant Agreement pro rata to the

Certificateholders whose Certificates have been purchased and the tender offer

proceeds will be distributed by the Trustee pro rata to the exercising Call

Holders pursuant to Section 2.02(i) of the Warrant Agreement. Upon distribution

of the applicable Call Price and tender offer proceeds, the Trust Certificates

called pursuant to the exercise of Call Rights shall be deemed to have been

surrendered for cancellation by the Trustee and the aggregate stated amount of

the outstanding Trust Certificates shall be reduced by the aggregate stated

amount of such Trust Certificates; provided that the right of a

Certificateholder to receive the Call Price will not be affected by any such

deemed surrender.

 

              Section 15. Amendments. Notwithstanding anything in the Trust

Agreement to the contrary, in addition to the other restrictions on modification

and amendment contained herein, the Trustee shall not enter into any amendment

or modification of the Trust Agreement

 

<PAGE>

 

that would adversely affect in any material respect the interests of the

Certificateholders or the Call Holders without the consent of 100% of such

Certificateholders or Call Holders, as the case may be; provided, however, that

no such amendment or modification will be permitted if the Trustee has been

advised by the Depositor that such amendment or modification would alter the

status of the Trust as a "grantor trust" for federal income tax purposes.

Further, no amendment shall be permitted pursuant to paragraphs (vi), (vii) and

(x) of Section 11.01(a) of the Standard Terms without prior written confirmation

by each Rating Agency that such amendment will not result in a downgrading or

withdrawal of its rating of the Certificates. The Trustee may consult with

counsel and shall be entitled to rely upon an Opinion of Counsel for purposes of

determining compliance with the provisions of this Section 15.

 

              Section 16. Voting of Underlying Securities, Modification of

Indenture. The Trustee, as holder of the Underlying Securities, has the right to

vote and give consents and waivers in respect of the Underlying Securities as

permitted by the Depository and except as otherwise limited by the Trust

Agreement. In the event that the Trustee receives a request from the Depository,

the Underlying Securities trustee or the Underlying Securities Issuer for its

consent to any amendment, modification or waiver of the Underlying Securities,

the Underlying Securities Indenture or any other document thereunder or relating

thereto, or receives any other solicitation for any action with respect to the

Underlying Securities, the Trustee shall mail a notice of such proposed

amendment, modification, waiver or solicitation to each Certificateholder of

record as of such date. The Trustee shall request instructions from the

Certificateholders as to whether or not to consent to or vote to accept such

amendment, modification, waiver or solicitation. The Trustee shall consent or

vote, or refrain from consenting or voting, in the same proportion (based on the

relative outstanding principal balances of the Certificates) as the Certificates

of the Trust were actually voted or not voted by the Certificateholders thereof

as of a date determined by the Trustee prior to the date on which such consent

or vote is required after weighing the votes of the Class A Certificateholders

and the Class B Certificateholders in accordance with the Allocation Ratio;

provided, however, that, notwithstanding anything in the Trust Agreement to the

contrary, the Trustee shall at no time vote on or consent to any matter (i)

unless such vote or consent would not (based on an Opinion of Counsel) alter the

status of the Trust as a "grantor trust" for federal income tax purposes or

result in the imposition of tax upon the Certificateholders, or (ii) that would

alter the timing or amount of any payment on the Underlying Securities,

including, without limitation, any demand to accelerate the Underlying

Securities, except in the event of a default under the Underlying Securities or

an event that with the passage of time would become an event of default under

the Underlying Securities and with the consent of 100% of the Certificateholders

and 100% of the Call Holders, or (iii) except as provided in the following

paragraph, that would result in the exchange or substitution of any of the

outstanding Underlying Securities pursuant to a plan for the refunding or

refinancing of such Underlying Securities except in the event of a default under

the Underlying Securities Indenture and only with the consent of 100% of the

Certificateholders and 100% of the Call Holders. The Trustee shall have no

liability for any failure to act resulting from Certificateholders' or Call

Holders' late return of, or failure to return, directions requested by the

Trustee from the Certificateholders and Call Holders.

 

              If an offer is made by the Underlying Securities Issuer to issue

new obligations in exchange and substitution for any of the Underlying

Securities, pursuant to a plan for the refunding or refinancing of the

outstanding Underlying Securities or any other offer is made for

 

<PAGE>

 

the Underlying Securities, the Trustee shall notify the Certificateholders, the

Call Holders and the Rating Agencies of such offer promptly. Subject to Sections

7(b) and 14 in connection with a tender offer and the exercise of Call Rights or

Optional Exchange rights, the Trustee must reject any such offer unless the

Trustee is directed by the affirmative vote of 100% of the Certificateholders

and 100% of the Call Holders to accept such offer, the Trustee has received the

tax opinion described above and if the Trustee is so directed, the Trustee shall

promptly notify the Rating Agencies of such direction accompanied by evidence of

the affirmative vote of such Certificateholders and Call Holders.

 

              If an event of default under the Underlying Securities Indenture

occurs and is continuing, and if directed by 100% of the Certificateholders, the

Trustee shall vote the Underlying Securities in favor of directing, or take such

other action as may be appropriate to direct, the Underlying Securities trustee

to declare the unpaid principal amount of the Underlying Securities and any

accrued and unpaid interest thereon to be due and payable.

 

              Section 17. Call Right Documentation. Simultaneously with the

execution hereof, the Depositor hereby directs the Trustee, in the name of and

on behalf of the Trust, to enter into a Warrant Agreement and any related

Warrant Certificates (as defined in the Warrant Agreement) evidencing the Call

Rights and to make representations contained therein on behalf of the Trust. At

the direction of the Depositor, the Trustee shall execute such further documents

as may be required to evidence any transfer of any or all of the rights,

interests or obligations under the Warrant Agreement and any related Warrant

Certificates.

 

              Section 18. Third Party Beneficiary. The Escrow Agent and each

Call Holder shall be third party beneficiaries of this Trust Agreement.

 

              Section 19. Nonpetition Covenant. Solely with respect to the Trust

and the Series and for no other purpose, Section 11.07 of the Standard terms is

hereby deleted and replaced with the following:

 

              "Section 11.07. Nonpetition Covenant. Notwithstanding any prior

termination of this Trust Agreement, each of the Trustee (including any

Administrative Agent, Authenticating Agent and Paying Agent) and the Depositor

agrees that it shall not, until the date which is one year and one day after the

termination of the PPLUS Trust Series CMT-1, acquiesce, petition or otherwise

invoke or cause the Trust to invoke the process of the United States, any State

or other political subdivision thereof or any entity exercising executive,

legislative, judicial, regulatory or administrative functions of or pertaining

to government for the purpose of commencing or sustaining a case by or against

the Trust under a Federal or state bankruptcy, insolvency or similar law or

appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or

other similar official of such Trust or all or any part of the property or

assets of such Trust or ordering the winding up or liquidation of the affairs of

such Trust.

 

              Section 20. Amendments to Standard Terms. Solely with respect to

the Trust and the Series and for no other purpose, the Standard Terms are hereby

amended as follows:

 

              (a) Clause (iii) of Subsection (c) of Section 2.01 of the Standard

Terms shall be deleted and replaced with the following:

 

 

<PAGE>

 

              "at the time of delivery of the Underlying Securities, Depositor

owns such Underlying Securities, has the right to transfer its interest in such

Underlying Securities and such Underlying Securities are free and clear of any

lien, pledge, encumbrance, right, charge, claim or other security interest

(other than the lien created by this Trust Agreement); and"

 

              (b) Subsection (e) of Section 2.01 of the Standard Terms shall be

deleted and replaced with the following:

 

              "Any Trust created hereunder shall not engage in any business or

         activities other than in connection with, or relating to, the holding,

         protecting and preserving of the Deposited Assets and the issuance of

         the Certificates and, if applicable, Call Rights, and other than those

         required or authorized by this Trust Agreement or incidental to and

         necessary to accomplish such activities. Any Trust created hereunder

         shall not issue or sell any certificates or other obligations other

         than the Certificates or, if applicable, Call Rights or otherwise

         incur, assume or guarantee any indebtedness for money borrowed."

 

              (c) Clause (v) of Subsection (b) of Section 4.08 of the Standard

Terms shall be deleted and replaced with the following:

 

              "that Holders of Certificates receiving notice of Call Rights

         being exercised with respect to the Certificates held by them shall not

         be entitled to any interest on the Certificates for any period on and

         after the Call Date, and the only remaining right of Holders of such

         Certificates is to receive payment of the Call Price upon surrender of

         the Certificates to the Warrant Agent; and"

 

              (d) The first sentence of subsection (d) of Section 4.08 of the

Standard Terms shall be deleted and replaced with the following:

 

              "Once such notice is mailed to a Holder, such Holder shall not be

         entitled to any right as a Holder other than the right to receive

         payment of the Call Price on the Call Date and the Certificates subject

         to the Call Right shall be deemed to have been automatically

         surrendered to the Trust for further transfer to the holder exercising

         its Call Right."

 

              (e) Subsection (e) of Section 4.08 of the Standard Terms shall be

deleted and replaced with the following:

 

               "Subject to Section 2.02(a)(i) of the Warrant Agreement, at or

         prior to 12:00 noon on the Call Date, the holder of the Call Right to

         be exercised shall deposit with the Escrow Agent by wire transfer in

         same-day funds money sufficient to pay the Call Price of the

         Certificates to be purchased on that date."

 

              (f) Subsection (f) of Section 4.08 of the Standard Terms shall be

deleted and replaced with the following:

 

              "This subsection has been intentionally left blank."

 

              (g) Subsection (g) of Section 4.08 shall be deleted and replaced

with the following:

 

 

<PAGE>

 

              "Upon surrender of any Certificate that is purchased in part, the

         Depositor shall execute and the Trustee shall authenticate and deliver

         to the Holder a new Certificate equal in principal amount to the

         portion of such surrendered Certificate not purchased."

 

<PAGE>

 

 

              IN WITNESS WHEREOF, the parties hereto have caused this Supplement

to be duly executed by their respective authorized officers as of the date first

written above.

 

                                      Merrill Lynch Depositor, Inc.,

                                      as Depositor

 

 

                                       By: /s/   Michael F. Connor

                                         ---------------------------------------

                                         Name:    Michael F. Connor

                                         Title:   President

 

 

 

 

                                      The Bank of New York,

                                      not in its individual capacity

                                      but as Trustee

 

 

                                      By: /s/   Fernando Acebedo

                                          ---------------------------------------

                                         Name:    Fernando Acebedo

                                         Title:   Authorized Signatory

 

 

 

 

                                      The Bank of New York,

                                      as Securities Intermediary

 

 

                                      By: /s/   Fernando Acebedo

                                         ---------------------------------------

                                          Name:    Fernando Acebedo

                                         Title:   Authorized Signatory

 

 

                       [SERIES SUPPLEMENT SIGNATURE PAGE]

 

<PAGE>

 

 

 

SCHEDULE I

 

                     PPLUS TRUST CERTIFICATES, SERIES CMT-1

                         UNDERLYING SECURITIES SCHEDULE

 

Underlying Securities:                  $35,000,000 7.05% Notes due March 15,

                                       2033 of the Underlying Securities Issuer.

 

Underlying Securities Issuer:           Comcast Corporation, a Pennsylvania

                                       corporation.

 

Underlying Securities Guarantors:       Comcast Cable Communications, Inc.,

                                       Comcast Cable Communications Holdings,

                                        Inc., Comcast Cable Holdings, LLC,

                                       Comcast MO of Delaware, Inc. and Comcast

                                       MO Group, Inc.

 

Underlying Securities Indenture:        Indenture dated as of January 7, 2003,

                                       among the Underlying Securities

                                       Guarantors, the Underlying Securities

                                       Issuer and the Underlying Securities

                                        Trustee, as amended and supplemented by

                                       the first supplemental indenture dated as

                                       of March 25, 2003.

 

Underlying Securities Trustee:          The Bank of New York

 

Underlying Securities                   20030NAC5

CUSIP Number:

 

Underlying Securities                   March 14, 2003

Original Issue Date:

 

Underlying Securities                   $750,000,000 7.05% Notes due 2033

Original Amount Issued:                  (principal amount $1,000 per security)

 

Underlying Securities                   333-101861

Commission File Number:

 

Underlying Securities                   March 15, 2033

Maturity Date:

 

Underlying Securities                   March 15, 2033

Principal Payment Date:

 

Underlying Securities                   March 15 and September 15, or if any such

Interest Payment Dates:                 date is not a business day, then the next

                                       succeeding business day to the persons in

                                        whose names the Underlying Securities are

                                       registered at the close of business on

                                       the March 1 or September 1, respectively,

                                        immediately prior to the relevant

                                       interest payment

 

 

<PAGE>

 

                                       date, subject to certain exceptions.

 

Underlying Securities                   7.05% per annum.

Interest Rate:

 

Underlying Securities                   March 1 and September 1.

Record Dates:

 

Underlying Securities                   The Underlying Securities Issuer will

Redemption:                             have the option to redeem the Underlying

                                        Securities as a whole at any time or in

                                       part from time to time, at the option of

                                       the Underlying Securities Issuer, at a

                                        redemption price equal to the greater of

                                       (i) 100% of their principal amount and

                                       (ii) the sum of the present values of the

                                       remaining scheduled payments of principal

                                       and interest thereon (exclusive of

                                       interest accrued to the date of

                                       redemption) discounted to the redemption

                                       date on a semiannual basis (assuming a

                                       360-day year consisting of twelve 30-day

                                       months) at, in each case, the Treasury

                                        Rate plus 40 basis points, plus in each

                                       case accrued interest thereon to the date

                                       of redemption.

 

Underlying Securities                   None.

Collateral:

 

Underlying Securities                   None.

Amortization:

 

Underlying Securities                   Semi-annual.

Accrual Periods:

 

Underlying Securities                   The Underlying Securities are denominated

Authorized Denomination                 and payable in U.S. dollars and are

and Specified Currency:                 available in minimum denominations of

                                       $1,000 and integral multiples thereof.

 

Underlying Securities                   "Baa3" by Moody's Investors Service, Inc.

Rating as of Closing:                   and "BBB" by Standard & Poor's Ratings

                                       Services.

 

Underlying Securities Form:             Book-entry security with DTC.

 

<PAGE>

 

 

EXHIBIT A

 

 

 

                        STANDARD TERMS FOR TRUST AGREEMENTS

 

 

 

                                     between

 

 

 

                         MERRILL LYNCH DEPOSITOR, INC.,

 

 

 

                                  as Depositor,

 

 

 

                                       and

 

 

 

                     UNITED STATES TRUST COMPANY OF NEW YORK,

 

 

 

                    as Trustee and as Securities Intermediary

 

 

 

 

                               TRUST CERTIFICATES

 

 

 

 

                          Dated as of February 20, 1998

 

 

<PAGE>

 

            Reconciliation and tie between the Standard Terms, dated as of

February 20, 1998, and the Trust Indenture Act of 1939, as amended. This

reconciliation and tie does not constitute part of the Standard Terms.

 

 

 

 

================================================================================

                Trust Indenture Act                      Standard

                  of 1939 Section                      Terms Section

--------------------------------------------------------------------------------

                    310(a)(1)                                           7.07

--------------------------------------------------------------------------------

                      (a)(2)                                           7.07

--------------------------------------------------------------------------------

                      (a)(5)                                           7.07

--------------------------------------------------------------------------------

                   312(a)                                               7.14

--------------------------------------------------------------------------------

                   313(a)                                              7.16

--------------------------------------------------------------------------------

                   314(a)                                              3.10

--------------------------------------------------------------------------------

                      (c)(1)                                           1.03

--------------------------------------------------------------------------------

                      (c)(2)                                           1.03

--------------------------------------------------------------------------------

                      (e)                                               1.03

--------------------------------------------------------------------------------

                  315(a)(1)                                            7.01

--------------------------------------------------------------------------------

                  315(a)(2)                                            7.03

--------------------------------------------------------------------------------

                  315(b)                                               7.01(d)

--------------------------------------------------------------------------------

                  315(d)                                               7.01(c)

--------------------------------------------------------------------------------

                  316(a)(1)(A)                                         5.19

--------------------------------------------------------------------------------

                     (a)(1)(B)                                         5.20

-------------------------------------------------------------------------------

                     (b)                                               5.21

--------------------------------------------------------------------------------

                     (c)                                                1.03(b)

--------------------------------------------------------------------------------

                  317(a)(1)                                            5.18

--------------------------------------------------------------------------------

                      (b)                                               5.13

--------------------------------------------------------------------------------

                  318(a)                                              11.11

================================================================================

 

 

<PAGE>

 

                                TABLE OF CONTENTS

 

 

 

Article I Definitions AND ASSUMPTIONS..........................................1

 

  Section 1.01.   Definitions....................................................1

  Section 1.02.   Rules of Construction.........................................13

  Section 1.03.   Compliance Certificates and Opinions; Record Date.............13

 

Article II DECLARATION OF TRUSTS; ISSUANCE OF CERTIFICATES; PURPOSE AND

  CLASSIFICATION OF TRUSTS.....................................................14

 

  Section 2.01.   Creation and Declaration of Trusts; Assignment of

                  Deposited Assets............................................14

  Section 2.02.   Acceptance by Trustee.........................................16

  Section 2.03.   Representations and Warranties of the Depositor...............16

  Section 2.04.   Breach of Representation, Warranty or Covenant................16

  Section 2.05.   Agreement to Execute, Authenticate and Deliver Certificates...16

  Section 2.06.   Custody and Holding of Deposited Assets.......................17

 

Article III ADMINISTRATION OF EACH TRUST......................................18

 

  Section 3.01.   Administration of Each Trust..................................18

  Section 3.02.   Collection of Certain Underlying Security Payments............18

  Section 3.04.   Distribution or Sale of the Underlying Securities.............19

  Section 3.05.   Investment of Funds in the Accounts...........................20

  Section 3.06.   Maintenance of Credit Support.................................20

  Section 3.07.   Realization upon Defaulted Underlying Securities..............20

  Section 3.08.   Retained Interest.............................................21

  Section 3.09.   Access to Certain Documentation...............................21

  Section 3.10.   Reports by the Depositor......................................21

  Section 3.11.   Charges and Expenses..........................................22

 

Article IV DISTRIBUTIONS AND REPORTS TO CERTIFICATEHOLDERS....................22

 

  Section 4.01.   Distributions.................................................22

  Section 4.02.   Distributions on Certificates.................................22

  Section 4.03.   Reports to Certificateholders.................................23

  Section 4.04.   Advances......................................................24

  Section 4.05.   Allocation of Realized Losses and Trust Expenses..............24

  Section 4.06.   Compliance with Withholding Requirements......................24

  Section 4.07.   Optional Exchange.............................................25

  Section 4.08.   Call Right....................................................26

 

Article V THE CERTIFICATES....................................................27

 

  Section 5.01.   The Certificates..............................................27

  Section 5.02.   Execution, Authentication and Delivery........................28

  Section 5.03.   Temporary Certificates........................................28

  Section 5.04.   Registration; Registration of Transfer and Exchange...........28

  Section 5.05.   Mutilated, Destroyed, Lost and Stolen Certificates............29

  Section 5.06.   Persons Deemed Owners.........................................30

  Section 5.07.   Cancellation..................................................30

 

                                      -i-

<PAGE>

 

 

  Section 5.08.   Global Securities.............................................30

  Section 5.09.   Notices to Depository.........................................31

  Section 5.10.   Definitive Certificates.......................................31

  Section 5.11.   Currency of Distributions.....................................32

  Section 5.12.   Conditions of Execution, Authentication and Delivery of

                  New Series..................................................32

  Section 5.13.   Appointment of Paying Agent...................................34

  Section 5.14.   Authenticating Agent..........................................34

  Section 5.15.   Voting Rights with Respect to Underlying Securities...........35

  Section 5.16.   Actions by Certificateholders.................................35

  Section 5.17.   Events of Default.............................................36

  Section 5.18.   Judicial Proceedings Instituted by Trustee; Trustee May

                  Bring Suit..................................................36

  Section 5.19.   Control by Certificateholders.................................36

  Section 5.20.   Waiver of Past Defaults.......................................36

  Section 5.21.   Right of Certificateholders to Receive Payments Not to Be

                  Impaired....................................................37

  Section 5.22.   Remedies Cumulative...........................................37

 

Article VI THE DEPOSITOR......................................................37

 

  Section 6.01.   Liability of the Depositor....................................37

  Section 6.02.   Limitation on Liability of the Depositor......................37

  Section 6.03.   Depositor May Purchase Certificates...........................37

  Section 6.04.   Merger or Consolidation of the Depositor......................38

  Section 6.05.   No Liability of the Depositor with Respect to the

                  Underlying Securities; Certificateholders to Proceed

                  Directly Against the Underlying Securities Issuer(s)........38

 

Article VII THE TRUSTEE.......................................................38

 

  Section 7.01.   Duties of Trustee.............................................38

  Section 7.02.   Agreements Between Trustee and Administrative Agents..........41

  Section 7.03.   Certain Matters Affecting the Trustee.........................42

  Section 7.04.   Trustee Not Liable for Recitals in Certificates or

                  Underlying Securities.......................................43

  Section 7.05.   Trustee May Own Certificates..................................43

  Section 7.06.   Trustee's Fees and Expenses...................................43

  Section 7.07.   Eligibility Requirements for Trustee..........................43

  Section 7.08.   Resignation or Removal of the Trustee; Appointment of

                  Successor Trustee...........................................44

  Section 7.09.   Appointment of Office or Agency...............................46

  Section 7.10.   Representations and Warranties of Trustee.....................46

  Section 7.11.   Indemnification of Trustee by the Depositor; Contribution.....46

  Section 7.12.   No Liability of the Trustee with Respect to the

                  Underlying Securities; Certificateholders to Proceed

                  Directly Against the Underlying Securities Issuer(s)........47

  Section 7.13.   The Depositor to Furnish Trustee with Names and

                  Addresses of Certificateholders.............................47

  Section 7.14.   Preservation of Information...................................48

  Section 7.15.   Reports by Trustee............................................48

  Section 7.16.   Trustee's Application for Instructions from the Depositor.....48

 

                                      -ii-

 

<PAGE>

 

Article VIII MARKET AGENT.....................................................48

 

  Section 8.01.   Market Agent..................................................48

 

Article IX SECURITIES INTERMEDIARY............................................48

 

  Section 9.01.   Resignation or Removal of the Securities Intermediary;

                Appointment of Successor Securities Intermediary..............48

 

Article X TERMINATION.........................................................50

 

  Section 10.01.   Termination upon Liquidation of All Underlying Securities....50

 

Article XI MISCELLANEOUS PROVISIONS...........................................51

 

  Section 11.01.   Amendment....................................................51

  Section 11.02.   Limitation on Rights of Certificateholders...................52

  Section 11.03.   Governing Law................................................53

  Section 11.04.   Notices......................................................53

  Section 11.05.   Notice to Rating Agencies....................................53

  Section 11.06.   Severability of Provisions...................................54

  Section 11.07.   Nonpetition Covenant.........................................54

  Section 11.08.   No Recourse..................................................54

  Section 11.09.   Article and Section References...............................54

  Section 11.10.   Counterparts.................................................54

  Section 11.11.   Trust Indenture Act..........................................54

 

 

 

 

 

<PAGE>

 

           STANDARD TERMS FOR TRUST   AGREEMENTS   dated as of February 20, 1998

between MERRILL LYNCH DEPOSITOR, INC., a Delaware corporation, as Depositor (the

"Depositor"), and UNITED STATES TRUST COMPANY OF NEW YORK, a New York

corporation, as Trustee (in such capacity, the "Trustee") and as securities

intermediary (in such capacity, the "Securities Intermediary").

 

 

 

                              PRELIMINARY STATEMENT

 

 

           The   Depositor,   the   Trustee   and the   Securities   Intermediary  

have duly authorized the execution and delivery of these Standard Terms for

Trust Agreements (the "Standard Terms") to provide for one or more Series (and

one or more Classes within each such Series) of Certificates, issuable from time

to time as provided in these Standard Terms.

 

 

           Each such Series (inclusive of any Classes specified within such

Series) will be issued under a separate Supplement to these Standard Terms, duly

executed and delivered by the Depositor, the Trustee and the Securities

Intermediary. With respect to each Series, these Standard Terms and all

amendments hereof and, unless the context otherwise requires, the related

Supplement and all amendments thereto shall be known as the "Trust Agreement".

 

           All representations, covenants and agreements made herein by each of

the Depositor, the Trustee and the Securities Intermediary are for the benefit

and security of the Holders and, to the extent provided in the applicable

Supplement, for the benefit and security of any Credit Support Provider or any

other party as specified therein.

 

 

           The Depositor and the Securities Intermediary are entering into

these Standard Terms, and the Trustee is accepting the trust created hereby, for

good and valuable consideration, the receipt and sufficiency of which are hereby

acknowledged.

 

 

                                   Article I

                            Definitions AND ASSUMPTIONS

 

            Section 1.01. Definitions. Except as otherwise specified herein or

in the applicable Supplement or as the context may otherwise require, the

following terms have the respective meanings set forth below for all purposes of

this Trust Agreement.

 

            "Account":   As defined in Section 3.05.

 

            "Accounting Date":   With respect to any Series, if applicable, as

defined in the related Supplement.

 

            "Administration Account":   As defined in Section 7.02.

 

            "Administration Agreement": The written contract, if any, between

the Trustee and an Administrative Agent and any successor Trustee or

Administrative Agent providing that the Trustee can delegate certain of its

administrative obligations with respect to any Series hereunder.

 

            "Administrative Agent": Any Person with which the Trustee has

entered into an Administration Agreement and that meets the qualifications of an

Administrative Agent, pursuant to Section 7.02.

 

            "Administrative Agent Termination Event": With respect to any given

Series, any of the following: (i) any failure by an Administrative Agent to

remit to the Trustee any funds in respect of collections on the Underlying

Securities and Credit Support, if any, as required under this Trust Agreement,

that continues unremedied for five days after the giving of written notice of

such failure to the Administrative Agent by the Trustee or the Depositor, or to

the Administrative Agent, the Depositor and the Trustee by the Holders of not

less than 25% of the Voting Rights; (ii) any failure by an Administrative Agent

duly to observe or perform in any material respect any of its other covenants or

obligations under the Administration Agreement with respect to such Series that

continues unremedied for thirty days after the giving of written notice of such

failure to the Administrative Agent by the Trustee or the Depositor, or to the

Administrative Agent, the Depositor and the Trustee by the Holders of not less

than 25% of the Voting Rights; and (iii) events of insolvency, readjustment of

debt, marshalling of assets and liabilities or similar proceedings and certain

actions by or on behalf of an Administrative Agent

 

 

 

<PAGE>

 

indicating its insolvency or inability to pay its obligations. Any additional

Administrative Agent Termination Event with respect to any given Series may be

set forth in the applicable Supplement.

 

            "Advance":   As defined in Section 4.04.

 

            "Affiliate": With respect to any specified Person, any other Person

directly or indirectly controlling or controlled by or under direct or indirect

common control with such specified Person. For the purposes of this definition,

"control", when used with respect to any specified Person, means the power to

direct the management and policies of such Person, directly or indirectly,

whether through the ownership of voting securities, by contract or otherwise;

and the terms "controlling" and "controlled" have meanings correlative to the

foregoing.

 

            "Allocation Ratio":   With respect to any Series, as defined in the

related Supplement.

 

            "Authenticating Agent":   As defined in Section 5.14.

 

            "Authorized Denomination":   The minimum denomination in which a

Certificate may be issued, or any multiple thereof, as specified in the related

Supplement.

 

            "Available Funds": Unless otherwise specified in the applicable

Supplement, for any Distribution Date in respect of a given Series or Class, the

sum of (i) all amounts actually received on or with respect to the Underlying

Securities (including Liquidation Proceeds and investment income earned on

Account funds invested pursuant to Section 3.05) with respect to such Series

during the related Collection Period, (ii) all amounts received pursuant to any

Credit Support Instruments with respect to such Series for such Distribution

Date and (iii) all other amounts, if any, specified by the applicable Supplement

less any amount held for the benefit of the Retained Interest.

 

            "Beneficial Owner": With respect to Certificates held through a

Depository, the beneficial owner of a Certificate. For purposes only of Section

5.16, the Trustee shall be obligated to treat a Person who claims to be a

beneficial owner of a Certificate as a "Beneficial Owner" within the meaning of

the Supplement only if such Person has first delivered to the Trustee, (i) a

certificate or other writing executed by such Person stating the full name and

address of such Person, the principal distribution amount of the Certificate

with respect to which such Person claims to be the Beneficial Owner, and the

participant in the Depository ("such Person's Participant") through which such

Person holds its beneficial ownership interest in the Certificates and (ii) a

certificate or other writing executed by such Person's Participant confirming

that such Person's Participant holds on its own books and records Certificates

for the account of such Beneficial Owner and identifying the principal

distribution amount held for such Beneficial Owner.

 

            "Book-Entry Securities": Securities maintained in the form of

entries (including, without limitation, the Security Entitlements in such

Securities) in the commercial book-entry system of the Fed and held for the

Trustee, directly or indirectly, by any Trustee's Fed Member. Book-Entry

Securities shall not include, in any event, any Certificated Security (or any

Security Entitlement in any Certificated Security) held, directly or indirectly,

through a Clearing Corporation.

 

            "Business Day":   With respect to any Series, as defined in the

related Supplement.

 

            "Calculation Agent":   If applicable with respect to any Series, as

specified in the applicable Supplement.

 

             "Call Date":   The date on which the Call Right may be exercised, as

specified in the applicable Supplement.

 

            "Call Price":   If applicable with respect to any Series, as

specified in the applicable Supplement.

 

                                        2

 

<PAGE>

 

            "Call Right": The right of the holder thereof (or any successor), as

named in the applicable Supplement, to purchase Certificates from the Holders

thereof or to purchase Underlying Securities from the Trust.

 

             "Call Terms": The terms pursuant to which a Call Right may be

exercised, as set forth in the applicable Supplement.

 

            "Callable Series":   A Series or Class within such Series subject to

a Call Right, as specified in the applicable Supplement.

 

            "Certificate" and "Certificates": Any trust certificate or trust

certificates authorized by, executed pursuant to and authenticated and delivered

under, this Trust Agreement, and unless the context requires otherwise,

"Certificate" and "Certificates" shall also be deemed to refer to the Retained

Interest.

 

            "Certificate Account":   As defined in Section 3.03.

 

            "Certificate Principal Balance": With respect to an Outstanding

Certificate, as determined at any time, the maximum amount that the Holder

thereof is entitled to receive as distributions allocable to principal payments

on the Underlying Securities. The Certificate Principal Balance, if any, of any

Class within a given Series (other than those Classes, if any, specified in the

related Supplement), as of any date of determination, shall be equal to the

aggregate initial Certificate Principal Balance thereof less the sum of (i) all

amounts allocable to prior distributions made to such Class in respect to

principal of the Underlying Securities, (ii) any reductions attributable to

Certificates surrendered in exchange for Underlying Securities, as and to the

extent provided in the applicable Supplement, and (iii) any reductions in the

Certificate Principal Balance thereof deemed to have occurred in connection with

allocations of (A) Realized Losses in respect of principal of the Underlying

Securities and (B) expenses of the Trust if any only to the extent specified in

the applicable Supplement, each as allocated to such Class pursuant to the

applicable Supplement.

 

            "Certificate Register" and "Certificate Registrar":   As defined in

Section 5.04.

 

            "Certificated Security":   As defined in Section 8-102(a)(4) of the

UCC.

 

            "Certificateholder":   Any holder of a Certificate or a Retained

Interest.

 

            "Class":   With respect to any Series, any one of the classes of

Certificates of such Series, each class consisting of Certificates having

identical terms.

 

            "Clearing Agency":   An organization that (i) is registered as a

"clearing agency" pursuant to Section 17A of the Exchange Act and (ii) is a

Clearing Corporation.

 

            "Clearing Agency Participant": At any time, in respect of any

Clearing Agency, a securities intermediary that maintains Securities Accounts

with such Clearing Agency at such time.

 

            "Clearing Corporation":   The meaning specified in Section

8-102(a)(5) of the UCC.

 

            "Closing Date":   With respect to any Series, the day on which

Certificates of such Series are first executed, authenticated and delivered, as

specified in the related Supplement.

 

            "Code":   The Internal Revenue Code of 1986, as amended, and Treasury

Regulations promulgated thereunder.

 

            "Collection Period":   With respect to any Distribution Date for a

Series (or Class within such Series), the period specified in the related

Supplement.

 

            "Commission": The Securities and Exchange Commission, as from time

to time constituted, created under the Exchange Act or, if at any time after the

execution and delivery of this Trust Agreement such Commission is not existing

and performing the duties now assigned to it, then the body then performing such

duties.

 

            "Concentrated Underlying Securities": Any Underlying Securities that

constitute 10% or more of the total Underlying Securities with respect to a

Series of Certificates.

 

                                       3

 

<PAGE>

 

            "Corporate Trust Office": The principal corporate trust office of

the Trustee located at the address set forth in the related Supplement or such

other address as the Trustee may designate from time to time by notice to the

Holders and the Depositor, or the principal corporate trust office of any

successor Trustee (or such other addresses as a successor Trustee may designate

from time to time by notice to the Holders and the Depositor).

 

            "Credit Support": As specified in the related Supplement, a Letter

of Credit, Limited Guaranty, Surety Bond, Swap Agreement, Swap Guarantee, or

other asset intended to support or ensure the timely or ultimate distributions

of amounts due in respect of a Series (or Class within such Series).

 

            "Credit Support Instrument": The instrument or document pursuant to

which the Credit Support for a given Series (or Class within such Series) is

provided, as specified in the applicable Supplement.

 

            "Credit Support Provider": With respect to any Series (or Class

within such Series), the Person, if any, that will provide any Credit Support

with respect to all or a portion of a Series or Class, as specified in the

applicable Supplement.

 

            "Cut-off Date": With respect to any Series, the date specified as

such in the related Supplement. For purposes of this Trust Agreement, any

Underlying Security acquired by the Depositor after the applicable Cut-off Date

but prior to the applicable Closing Date and included in the related Trust as of

such Closing Date shall be deemed to have been Outstanding as of such Cut-off

Date and references to the principal balance of such Underlying Security as of

such Cut-off Date shall be deemed to be to the principal balance of such

Underlying Security as of the date on which it was acquired by the Depositor.

 

             "Definitive Certificates":   As defined in Section 5.10.

 

            "Deposited Assets": With respect to any Series, the following

assets, properties and items (together with the accounts and book-entry accounts

containing or reflecting, directly or indirectly, such assets, properties and

items), in each case, wherever located, however held and whether now existing or

hereafter acquired:

 

          (i) all Underlying Securities and Related Assets;

 

          (ii) all payments   receivable or received in respect of the Underlying

     Securities   including   the   immediate   and   continuing   right to claim for,

     collect,   receive and give   receipt for   principal,   premium,   if any,   and

     interest   payments in respect of the   Underlying   Securities   and all other

     monies payable thereunder;

 

          (iii) all   Financial   Assets,   Security   Entitlements   and   Investment

     Property   in,   constituting,   evidenced   by,   resulting   from or   otherwise

     related to, any of the Deposited Assets;

 

           (iv) all other   rights   and   remedies   (but   none of the   obligations)

     comprising,   arising   or   resulting   from or   related   to the   Grant of the

     Deposited   Assets   including,   without   limitation,   the   right to give and

     receive   notices   and   other   communications,   to   make   waivers   or   other

     agreements,   to exercise all rights and options of the Depositor,   to bring

     Proceedings   in the name of the   Depositor or   otherwise,   and generally to

     exercise   all of the rights and   remedies   of the   Depositor   and to do and

     receive   anything that the Depositor is or may be entitled to do or receive

     thereunder or with respect thereto; and

 

          (v) any other assets   identified   as   Deposited   Assets in the related

     Supplement,   which assets may include cash, cash   equivalents,   guarantees,

     letters of credit,   financial insurance,   interest rate, currency,   equity,

     commodity   and   credit-linked   swaps,   caps,   floors,   collars and options,

     forward   contracts,    structured    securities   and   other   instruments   and

     transactions that credit enhance, hedge or otherwise support the Underlying

     Securities   designed   to assure the   servicing   or timely   distribution   of

     payments to Holders.

 

            "Depositor": Merrill Lynch Depositor, Inc., a Delaware corporation,

and, if a successor Person shall have become the Depositor pursuant to any

applicable provisions of this Trust Agreement, "Depositor" shall mean such

successor Person. With respect to any

 

                                       4

 

<PAGE>

 

 

provisions of this Trust Agreement that relate to the provisions of the TIA,

"Depositor" shall include any obligor on the Certificates as the term obligor

is defined in the TIA.

 

             "Depositor Order": A written order or request, respectively, signed

in the name of the Depositor by any one of its Executive Officers.

 

            "Depository": With respect to the Certificates of any Series (or

Class within such Series) issuable in whole or in part in the form of one or

more Global Securities, the Person so designated in the applicable Supplement,

and, if at any time there is more than one such Person, "Depository" as used

with respect to the Certificates of any such Series or Class shall mean the

Depository with respect to the Certificates of that Series or Class.

 

            "Discount Certificate": Any Certificate that is issued with

"original issue discount" within the meaning of Section 1273(a) of the Code and

any other Certificate designated by the Depositor as issued with original issue

discount for United States Federal income tax purposes.

 

            "Distribution Date": With respect to any Series (or Class within

such Series), each date specified as a "Distribution Date" for such Series (or

Class) in the related Supplement.

 

            "Distribution Election":   With respect to any Series, as specified

in the related Supplement.

 

            "Depository Securities": Securities consisting of Security

Entitlements to Certificated Securities, held by the Depository or a Clearing

Corporation or a nominee of either subject to the control of the Depository and

in bearer form or indorsed in blank by an appropriate Person or registered on

the books of the issuer thereof in the name of the Depository or its Clearing

Corporation or a nominee of either.

 

            "DCR":   Duff & Phelps Credit Rating Co. and any successor thereto.

 

            "Dollar" or "$" or "USD": Such currency of the United States as at

the time of payment is legal tender for the payment of public and private debts.

 

            "Eligible Account": Either (i) an account or accounts maintained

with a Federal or State chartered depository institution or trust company the

long-term unsecured obligations of which are rated by the Rating Agency the

higher of (x) at least the then current long-term rating of the Certificates or

(y) in one of its two highest long-term rating categories (unless otherwise

specified in the Supplement) at the time any amounts are held in deposit therein

or (ii) a trust account(s) maintained as a segregated account(s) and held by a

Federal or State chartered depository institution or trust company in trust for

the benefit of the Certificateholders; provided, however, that such depository

institution or trust company has a long-term rating in one of the four highest

categories by the Rating Agency.

 

            "Eligible Investments": With respect to any Series, unless otherwise

specified in the related Supplement, any one or more of the following

obligations or securities; provided, however, that the total stated return

specified by the terms of each such obligation or security is at least equal to

the purchase price thereof; and provided further that no such instrument may

carry the symbol "r" from S&P in its rating:

 

          (i) direct obligations of, and obligations fully guaranteed by, the

     United States, the Federal Home Loan Mortgage Corporation, the Federal

     National Mortgage Association, the Federal Farm Credit System or any agency

     or instrumentality of the United States the obligations of which are backed

     by the full faith and credit of the United States; provided, however, that

     obligations of, or guaranteed by, the Federal Home Loan Mortgage

     Corporation, the Federal National Mortgage Association or the Federal Farm

     Credit System shall be Eligible Investments only if, at the time of

     investment, such investment has the rating specified in such Supplement for

     Eligible Investments;

 

          (ii) demand and time deposits in, certificates of deposit of, or

     banker's acceptances issued by any depository institution or trust company

     (including the Trustee or any agent of the Trustee acting in their

     respective commercial capacities) incorporated under the laws of the United

     States or any State and

 

                                       5

 

<PAGE>

 

 

     subject to supervision and examination by Federal and/or State banking

     authorities so long as the commercial paper and/or the short-term debt

     obligations of such depository institution or trust company (or, in the

     case of a depository institution which is the principal subsidiary of a

     holding company, the commercial paper or other short-term debt obligations

      of such holding company) at the time of such investment or contractual

     commitment providing for such investment have the rating specified in such

     Supplement for Eligible Investments; provided, however, that such rating

     shall be no lower than the lower of the rating on the Underlying Securities

     or the Trust Certificates at the time of purchase of the investments;

 

          (iii) securities bearing interest or sold at a discount issued by any

     corporation incorporated under the laws of the United States or any State

     that have the rating specified in such Supplement for Eligible Investments

     at the time of such investment or contractual commitment providing for such

     investment; provided, however, that such rating shall be no lower than the

     lower of the rating on the Underlying Securities or the Trust Certificates;

     and provided further that securities issued by any particular corporation

     will not be Eligible Investments to the extent that investment therein will

     cause the then outstanding principal amount of securities issued by such

     corporation and held as part of the Trust for such Series to exceed 10% of

     the aggregate outstanding principal balances and amounts of all the

     Underlying Securities and Eligible Investments held as part of the Trust

     for such Series; and

 

          (iv) commercial paper having at the time of such investment the rating

     specified in the Supplement for Eligible Investments.

 

            "Entitlement Holder":   As defined in Section 8-102(a)(7) of the UCC.

 

            "Event of Default":   With respect to any Series (or Class within

such Series), as specified in the related Supplement.

 

            "Exchange Act":   The Securities Exchange Act of 1934, as amended.

 

            "Exchange Rate Agent":   As specified in the Supplement.

 

            "Executive Officer": With respect to any limited liability company

or corporation, the chief executive officer, the chief operating officer, the

chief financial officer, the president, any vice president, the secretary or the

treasurer of such limited liability company or corporation; with respect to any

partnership, any general partner thereof.

 

            "Extraordinary Trust Expenses": Any and all costs, expenses or

liabilities arising out of the establishment, existence or administration of the

Trust, other than (i) Ordinary Expenses, and (ii) costs and expenses payable by

a particular Certificateholder, the Trustee or the Depositor pursuant to this

Trust Agreement.

 

            "Fed":   The Federal Reserve Bank of New York.

 

            "Fed Member Securities Account": In respect of any Person, an

account in the name of such Person at the Fed, to which account Book-Entry

Securities held for such Person are or may be credited.

 

            "Federal Book-Entry Regulations": (a) the Federal regulations

contained in Subpart B ("Treasury/Reserve Automated Debt Entry System (TRADES)"

governing Book-Entry Securities consisting of U.S. Treasury bonds, notes and

bills) and Subpart D ("Additional Provisions") of 31 C.F.R. Part 357, 31 C.F.R.

ss. 357.10 through ss. 357.14 and ss. 357.41 through ss. 357.44 (including

related defined terms in 31 C.F.R. ss. 357.2) and (b) to the extent

substantially identical to the federal regulations referred to in clause (a)

above (as in effect from time to time), the federal regulations governing other

Book-Entry Securities.

 

            "Final Scheduled Distribution Date": With respect to any

Certificate, the date on which all the unpaid principal of (and premium, if any,

on) and interest on such Certificate is scheduled, without giving effect to any

prepayment, exchange or early termination, to become due and payable as provided

therein and in the applicable Supplement.

 

                                        6

 

<PAGE>

 

            "Financial Asset":   As defined in Section 8-102(a)(9) of the UCC.

 

            "Fitch":   Fitch Investors Service, L.P., and any successor thereof.

 

            "Fixed Pass-Through Rate":   With respect to any Fixed Rate

Certificate, as defined in the related Supplement.

 

            "Fixed Rate Certificate":   A Certificate that provides for a payment

of interest at a Fixed Pass-Through Rate.

 

            "Floating Pass-Through Rate":   With respect to any Floating Rate

Certificate, as defined in the related Supplement.

 

            "Floating Rate Certificate": A Certificate that provides for the

payment of interest at a Floating Pass-Through Rate determined periodically by

reference to a formula specified in the related Supplement.

 

            "Global Security": A registered Certificate evidencing all or part

of a Series (or Class within such Series), issued to the Depository for such

Series or Class in accordance with Section 5.08 and bearing the legend

prescribed therein.

 

            "Grant": To grant, bargain, sell, warrant, alienate, remise, demise,

release, convey, assign, transfer, deposit, set over and confirm to the Trustee

pursuant to these Standard Terms and the applicable Supplement; and the terms

"Granted" and "Granting" have the meanings correlative to the foregoing.

 

            "Holder": The Person in whose name a Certificate or Retained

Interest is registered in the Certificate Register on the applicable Record

Date. Where the context requires, "Holder" may refer to the person entitled to

exercise the Voting Rights accompanying a Certificate.

 

            "Independent": When used with respect to any Person means that such

Person (1) is in fact independent of the Depositor and of any Affiliate, (2)

does not have any direct or indirect material financial interest in the

Depositor or in any Affiliate and (3) is not connected with the Depositor or any

Affiliate as an officer, employee, promoter, underwriter, trustee, partner,

director or person performing similar functions.

 

            "Investment Property":   As defined in Section 9-115 of the UCC.

 

            "Letter of Credit": With respect to any Series (or Class within such

Series), the letter of credit, if any, providing for the payment of all or a

portion of amounts due in respect of such Series (or Class), issued to the

Trustee for the benefit of the Holders of such Series (or Class), issued by the

related Credit Support Provider, all as specified in the related Supplement.

 

            "Limited Guarantor": With respect to any Series (or Class within

such Series), a Person specified in the related Supplement as providing a

guarantee or insurance policy or other credit enhancement supporting the

distributions in respect of such Series (or Class within such Series) as and to

the extent specified in such Supplement.

 

            "Limited Guaranty": With respect to any Series (or Class within such

Series), any guarantee of, or insurance policy or other comparable form of

credit enhancement with respect to, amounts required to be distributed in

respect of such Series (or Class) or payments under all or certain of the

Underlying Securities relating to such Series or Class, executed and delivered

by a Limited Guarantor in favor of the Trustee, for the benefit of the

Certificateholders, as specified in the related Supplement.

 

            "Liquidation Price": If applicable with respect to any Series, the

price at which the Market Agent sells the Underlying Securities on behalf of the

Trustee, as specified in the applicable Supplement.

 

            "Liquidation Proceeds": The amounts received by the Trustee in

connection with (i) the liquidation of a defaulted Underlying Security,

collateral, if any, related thereto, or Related Asset or (ii) the repurchase,

substitution or sale of an Underlying Security or Related Asset.

 

                                       7

 

<PAGE>

 

 

            "Market Agent": The market agent or market agents, if any, appointed

pursuant to Section 8.01, and its or their successors or assigns.

 

             "Market Agent Agreement": With respect to any Series, the agreement,

if any, dated as of the Closing Date, between the Trustee and the Market Agent,

the form of which will be attached to the related Supplement, and any similar

agreement with a successor Market Agent, in each case as from time to time

amended or supplemented.

 

            "Merrill Lynch & Co.":   Merrill Lynch & Co., a Delaware corporation.

 

            "Minimum Wire Denomination":   $10,000,000 or the equivalent in any

Specified Currency.

 

            "Moody's":   Moody's Investors Service, Inc. and any successors

thereto.

 

            "Notional Amount": With respect to any Class of Certificates, if

applicable, the initial notional amount specified in the related Supplement on

which distributions of interest may be determined at the applicable Pass-Through

Rate, as the same may be adjusted as specified in such Supplement.

 

            "Officer's Certificate": A certificate signed by any (or, if

specified in these Standard Terms or any Supplement, more than one) Executive

Officer of the Depositor, and delivered to the Trustee.

 

            "Opinion of Counsel": A written opinion of counsel, who may, except

as otherwise expressly provided in this Trust Agreement, be counsel for the

Depositor acceptable to the Trustee, except that any opinion of counsel relating

to the qualification of any account required to be maintained pursuant to this

Trust Agreement as an Eligible Account must be an opinion of counsel who is in

fact Independent of the Depositor.

 

            "Optional Exchange": shall mean the exchange of Certificates of any

Series (or Class within such Series) for a pro rata portion of the Deposited

Assets of the related Trust.

 

            "Optional Exchange Date": With respect to any Series (or Class

within such Series), as defined, if applicable, in the related Supplement.

 

            "Optional Redemption": The right of an Underlying Securities Issuer

to redeem such Underlying Securities in accordance with the terms of the

Underlying Securities Indenture.

 

            "Ordinary Expenses": The Trustee's customary fee for its services as

Trustee, as set forth in the related Supplement, including but not limited to

(i) the costs and expenses of preparing, sending and receiving all reports,

statements, notices, returns, filings, solicitation of consent or instructions,

or other communications required by this Trust Agreement, (ii) the costs and

expenses of holding and making ordinary collection or payments on the assets of

the Trust and of determining and making distributions, (iii) the costs and

expenses of the Trust's or Trustee's counsel, accountants and other experts for

ordinary or routine consultation or advice in connection with the establishment,

administration and termination of the Trust, and (iv) any other costs and

expenses that are, or reasonably should have been, expected to be incurred in

the ordinary course of administration of the Trust.

 

            "Outstanding": With respect to Certificates of a specified Series

(or Class within such Series), as of any date of determination, all such

Certificates theretofore executed, authenticated and delivered under these

Standard Terms and the related Supplement except:

 

          (i) Certificates theretofore cancelled by the Certificate Registrar;

     and

 

          (ii) Certificates, including Predecessor Certificates, in exchange for

     or in lieu of which other Certificates have been executed, authenticated

     and delivered pursuant to this Trust Agreement, unless proof satisfactory

     to the Trustee is presented that any such Certificates are held by a bona

     fide purchaser in whose hands such Certificates are valid obligations of

     the Trust;

 

 

                                       8

 

<PAGE>

 

provided, however, that in determining whether any request, demand,

authorization, direction, notice, consent or waiver hereunder has been given by

the required percentage of the aggregate Voting Rights, Voting Rights

accompanying Certificates beneficially owned by the Depositor, the Trustee, or

any Affiliate thereof shall be disregarded and deemed not to be Outstanding, and

such Voting Rights shall not be taken into account in determining whether the

requisite percentage of aggregate Voting Rights necessary to effect any such

consent or take any such action has been obtained except that, in determining

whether the Trustee shall be protected in relying upon any such request, demand,

authorization, direction, notice, consent or waiver, only Certificates with

respect to which the Depositor has provided the Trustee an Officer's Certificate

stating that such Certificates are so owned shall be so disregarded.

Certificates so owned that have been pledged in good faith may be regarded as

Outstanding if the pledgee establishes to the satisfaction of the Trustee the

pledgee's right so to act with respect to such Certificates.

 

            "Participant": A broker, dealer, bank, other financial institution

or other Person for whom from time to time a Depository effects book-entry

transfers and pledges of securities deposited with the Depository.

 

            "Pass-Through Rate": With respect to any Series (or Class within

such Series) (except certain Discount Certificates and Certificates entitled to

nominal or no interest distributions), the annual rate at which interest accrues

on the Certificates of such Series (or Class), which may be a fixed rate or a

floating rate of interest, determined upon the basis and in the manner specified

in the related Supplement.

 

            "Paying Agent":   As defined in Section 5.13.

 

            "Person": Any individual, limited liability company, corporation,

partnership, joint venture, association, joint stock company, trust (including

any beneficiary thereof), unincorporated organization or government or any

agency or political subdivision thereof.

 

            "Predecessor Certificate":   As defined in Section 5.05.

 

            "Prepaid Ordinary Expenses": The amount (if any) paid by the

Depositor to the Trustee on or before the Closing Date to cover Ordinary

Expenses, as specified in the related Supplement.

 

            "Proceeding":   Any suit in equity, action at law or other judicial

or administrative proceeding.

 

            "Rating Agency": With respect to any Series or Class within such

Series), each nationally recognized statistical rating organization, specified

in the related Supplement, that initially rates the Certificates of such Series

(or Class within such Series).

 

            "Rating Agency Condition": With respect to any action or occurrence,

unless otherwise specified in the applicable Supplement, that each Rating Agency

shall have been given 10 days (or such shorter period acceptable to each Rating

Agency) prior written notice thereof and that each Rating Agency shall have

notified the Depositor and the Trustee in writing that such action or occurrence

will not result in a reduction or withdrawal of the then current rating of any

Certificate of the applicable Series.

 

            "Realized Loss": With respect to any defaulted and liquidated

Underlying Security, the excess, if any, of (x) the price paid by the Depositor

for such Underlying Security plus expenses incurred by the Trustee in connection

with the practices and procedures referred to in Section 3.07(b) of these

Standard Terms, to the extent reimbursable under these Standard Terms and the

related Supplement, over (y) Liquidation Proceeds with respect thereto.

 

            "Record Date": With respect to any Distribution Date for any Series

(or Class within such Series), the date specified in the related Supplement.

 

            "Related Assets": Any assets held by a Trust the return of which is

linked to one or more Underlying Securities and which, if applicable, shall be

described in the related Supplement or a schedule thereto.

 

                                        9

 

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            "Required Percentage--Amendment": Unless otherwise specified in the

related Supplement, if a Rating Agency Condition is specified in such Supplement

and such Rating Agency Condition is met, or, if a Rating Agency Condition is not

so specified in such Supplement, 66-2/3% of the aggregate Voting Rights of such

Series, and 100% otherwise.

 

            "Required Percentage--Direction of Trustee": Unless otherwise

specified in the related Supplement, 66-2/3% of the aggregate Voting Rights of

such Series.

 

            "Required Percentage--Remedies": Unless otherwise specified in the

related Supplement, 66-2/3% of the aggregate Voting Rights of such Series.

 

            "Required Percentage--Removal of Securities Intermediary": Unless

otherwise specified in the related Supplement, more than 50% of the aggregate

Voting Rights of such Series.

 

            "Required Percentage--Removal of Trustee": Unless otherwise

specified in the related Supplement, more than 50% of the aggregate Voting

Rights of a Series.

 

            "Required Percentage--Waiver": Unless otherwise specified in the

related Supplement, 66-2/3% of the aggregate Voting Rights of a Series.

 

            "Required Principal": As determined for any Distribution Date for a

given Series (or Class within such Series), unless otherwise specified in the

related Supplement, the amounts on deposit in the Certificate Account allocable

to principal payments on the Underlying Securities (including from Credit

Support, if any, and Advances, if any, but excluding amounts in respect of

principal payments to the extent that Advances with respect thereto were

distributed as Required Principal on a prior Distribution Date) and required to

be distributed in respect of the Certificates of such Series (or Class) in

accordance with the terms of such Certificates and such related Supplement.

 

            "Requisite Reserve Amount": As of any date with respect to any

Series (or Class within such Series), the amount, if any, required to be

maintained in the Reserve Account, if any, for such Series or Class as specified

in or determined pursuant to the related Supplement.

 

            "Reserve Account":   An Eligible Account, if any, created and

maintained pursuant to Section 3.06.

 

            "Responsible Officer": With respect to the Trustee, any officer

within the Corporate Trust Office, including any Managing Director, Senior Vice

President, Vice President, Assistant Vice President, 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 actual knowledge of and familiarity with the particular subject.

 

            "Retained Interest": If applicable, with respect to any Underlying

Security, an ownership interest in and a right to a portion of the payments

thereon by the obligor thereof, as specified in the related Supplement, held by

the Person so specified in such Supplement.

 

            "Sale Procedures": Unless otherwise specified in the Supplement,

shall mean that, with respect to any sale of one or more Underlying Securities

or Related Assets, the Market Agent, on behalf of the Trust, shall sell such

Underlying Securities or Related Assets to the highest bidders among not less

than two solicited bidders for such Underlying Securities or Related Assets (one

of which bidders may include Merrill Lynch & Co. or any Affiliate thereof;

provided, however, that neither Merrill Lynch & Co. nor any of its Affiliates

will be under any obligation to bid, and which bidders need not be limited to

recognized broker dealers). In the sole judgment of the Market Agent, bids may

be evaluated on the basis of bids for a single Underlying Security or Related

Asset, a portion of the Underlying Securities or Related Assets, or all of the

Underlying Securities or Related Assets being sold or any other basis selected

in good faith by the Market Agent.

 

            "S&P":   Standard & Poor's Ratings Services, and any successor

thereof.

 

                                       10

 

<PAGE>

 

            "Securities Account":   As defined in Section 8-501(a) of the UCC.

 

             "Securities Control": "Control" as defined in Section 8-106 of the

UCC and, for purposes of determining an interest in investment property under

UCC Article 9, Section 9-115(1)(e) of the UCC.

 

            "securities intermediary": As defined in Section 8-102(a)(14) of the

UCC and, in respect of any Book-Entry Security, a "securities intermediary" (as

defined in 31 C.F.R. ss. 357.2 or, as applicable to such Book-Entry Security,

the corresponding Federal Book-Entry Regulations).

 

            "Securities Intermediary": With respect to any Series, the

Securities Intermediary shall be the Person so specified in the applicable

Supplement until a successor Person shall have become the Securities

Intermediary pursuant to the applicable provisions of these Standard Terms and

the applicable Supplement, and thereafter "Securities Intermediary" shall mean

such successor Person.

 

            "Security":   As defined in Section 8-102(a)(15) of the UCC.

 

            "Security Certificate":   As defined in Section 8-102(a)(9) of the

UCC.

 

            "Security Entitlement": As defined in Section 8-102(a)(17) of the

UCC or, in respect of any Book-Entry Security, as defined in 31 C.F.R. Section

357.2 (or, as applicable to such Book-Entry Security, the corresponding Federal

Book-Entry Regulations).

 

            "Series": A separate series of Certificates issued pursuant to these

Standard Terms and a related Supplement, which series may be divided into two or

more Classes, as provided in such Supplement.

 

            "Specified Currency": As specified in the related Supplement for the

applicable Series or Class, which may be a currency issued by the government of

any country or a composite currency the value of which is determined by

reference to the values of the currencies of any group of countries. If not

specified in the related Supplement, the Specified Currency shall be Dollars.

 

            "State":   Any one of the 50 states of the United States, or the

District of Columbia.

 

            "Supplement": An agreement incorporating these Standard Terms that

authorizes the issuance of a particular Series (and each Class within such

Series) of Certificates.

 

            "Surety Bond": If so specified in the Supplement with respect to any

Series (or Class within such Series), the surety bond providing for the

distribution under certain circumstances specified in such Supplement of amounts

to the Certificateholders of such Series (or Class), which surety bond will be

issued to the Trustee for the benefit of such Certificateholders by the related

Credit Support Provider, all as specified in such Supplement.

 

            "Swap Agreement": If so specified in the Supplement with respect to

any Series, the ISDA Master Agreement dated as of the Closing Date by and

between the Trust and the Swap Counterparty, as the same may be amended or

supplemented from time to time as provided therein.

 

            "Swap Counterparty": If so specified in the Supplement with respect

to any Series (or Class within such Series), as specified in such Supplement.

 

             "Swap Distribution Amount": If so specified in the Supplement with

respect to any Series, all amounts then due and owing to the Swap Counterparty

pursuant to the Swap Agreement, other than Swap Termination Payments.

 

            "Swap Guarantee": If so specified in the Supplement with respect to

any Series, the guarantee issued by the Swap Guarantor in favor of the Trust

substantially in the form attached as an exhibit to the Swap Agreement.

 

                                       11

 

<PAGE>

 

             "Swap Guarantor": If so specified in the Supplement with respect to

any Series, the guarantor specified as such in such Supplement.

 

            "Swap Receipt Amount": If so specified in the Supplement with

respect to any Series, all amounts due and owing to the Trust pursuant to the

Swap Agreement other than Swap Termination Payments.

 

            "Swap Termination Payment": If so specified in the Supplement with

respect to any Series, the amount payable by the Swap Counterparty to the Trust,

or by the Trust to the Swap Counterparty, pursuant to the Swap Agreement.

 

            "Tax Event": The right of an Underlying Securities Issuer to shorten

the maturity of or repurchase such Underlying Securities, in accordance with the

terms of the Underlying Securities Indenture, due to a change in the treatment

of such Underlying Securities under the Code.

 

            "Trust": With respect to any Series, the segregated asset or pool of

assets subject hereto, constituting the trust created hereby and by the related

Supplement and to be administered hereunder and thereunder, consisting of those

Deposited Assets, the Credit Support, if applicable, and all sums distributed in

respect thereof that are specified as being part of the Trust for such Series in

the related Supplement, all for the benefit of the Certificateholders of such

Series as of any particular time.

 

            "Trust Agreement": With respect to each Series, these Standard Terms

and all amendments hereof and, unless the context otherwise requires, the

related Supplement and all amendments thereto.

 

            "Trustee": With respect to any Series, the Person so specified in

the applicable Supplement until a successor Person shall have become the Trustee

pursuant to the applicable provisions of these Standard Terms and the applicable

Supplement, and thereafter "Trustee" shall mean such successor Person.

 

            "Trustee's Fed Member": Any Person that is eligible to maintain a

Fed Member Securities Account in such Person's name with the Fed and through

which the Trustee holds Book-Entry Securities.

 

            "TIA": The Trust Indenture Act of 1939, as amended, as the same is

in force and effect as of the date hereof.

 

            "UCC": The Uniform Commercial Code as in effect from time to time in

the State of New York and any successor statute.

 

            "Underlying Securities Indenture": The indenture pursuant to which

the Underlying Securities were issued, as identified in the Underlying

Securities Schedule.

 

            "Underlying Securities Issuer": With respect to an Underlying

Security, the issuer thereof (including, if applicable, the guarantor of the

Underlying Security), as identified in the Underlying Securities Schedule.

 

            "Underlying Securities Schedule":   Schedule I to the Supplement.

 

            "Underlying Security" or "Underlying Securities": With respect to

any Series, the asset or assets identified in the Underlying Securities

Schedule. The Underlying Securities for any Series or the related Trust shall

not constitute Underlying Securities for any other Series or any other Trust.

 

            "Underlying Security Interest Payment Date": With respect to an

Underlying Security, each date specified in the Underlying Securities Schedule

as a date on which interest is scheduled, as of the Closing Date, to be payable

by or on behalf of the Underlying Securities Issuer on such Underlying Security

in accordance with its terms.

 

            "United States": The United States of America (including the

States), its territories, its possessions and other areas subject to its

jurisdiction.

 

            "Voting Rights": The voting rights with respect to the Underlying

Securities, which voting rights shall be allocated to Certificateholders of each

Class within a given

                                        12

 

<PAGE>

 

 

Series (and to the holders of the Retained Interest and Call Right, if any) in

accordance with the Allocation Ratio.

 

 

            Section 1.02.   Rules of Construction. Unless the context otherwise

requires:

 

           (i) a term has the meaning assigned to it;

 

          (ii) an accounting term not otherwise defined has the meaning assigned

     to it in accordance with generally accepted accounting principles as in

     effect in the United States from time to time;

 

          (iii) "or" is not exclusive;

 

          (iv) the words "herein", "hereof", "hereunder" and other words of

     similar import refer to this Trust Agreement as a whole and not to any

     particular Article, Section or other subdivision;

 

           (v) "including" means including without limitation; and

 

          (vi) words in the singular include the plural and words in the plural

     include the singular.

 

            Section 1.03. Compliance Certificates and Opinions; Record Date. a)

Upon any application or request by the Depositor to the Trustee to take any

action under any provision of this Trust Agreement other than the initial

issuance of the Certificates, the Depositor shall furnish to the Trustee an

Officer's Certificate stating that, in the opinion of the signer thereof, all

conditions precedent, if any, provided for in this Trust Agreement relating to

the proposed action have been complied with and an Opinion of Counsel stating

that in the opinion of such counsel all such conditions precedent, if any, have

been complied with, except that in the case of any such application or request

as to which the furnishing of such documents is specifically required by any

provision of this Trust Agreement relating to such particular application or

request, no additional certificate or opinion need be furnished.

 

            Every certificate or opinion with respect to compliance with a

condition or covenant provided for in this Trust Agreement (other than a

certificate provided pursuant to Section 3.10(d)) shall include:

 

            (i) a statement that the individual signing such certificate or

       opinion has read such covenant or condition and the definitions herein

       relating thereto;

 

            (ii) a brief statement as to the nature and scope of the examination

       or investigation upon which the statements or opinions contained in such

       certificate or opinion are based;

 

            (iii) a statement that, in the opinion of such individual, he or she

       has made such examination or investigation as is necessary to enable him

       or her to express an informed opinion as to whether or not such covenant

       or condition has been complied with; and

 

            (iv) a statement as to whether, in the opinion of such individual,

       such condition or covenant has been complied with.

 

            (b) The Depositor may at its option by delivery of an Officer's

Certificate to the Trustee set a record date to determine the Holders entitled

to give any consent, request, demand, authorization, direction, notice, waiver

or other act. Notwithstanding TIA Section 316(c), such record date shall be the

record date specified in such Officer's Certificate, which shall be a date not

more than 30 days prior to the first solicitation of Certificateholders in

connection therewith. If such a record date is fixed, such consent, request,

demand, authorization, direction, notice, waiver or other act may be given

before or after such record date, but only the Holders of record at the close of

business on such record date shall be deemed to be Holders for the purposes of

determining whether the requisite aggregate Voting Rights have authorized or

agreed or consented to such consent, request, demand, authorization, direction,

notice, waiver or other act, and for that purpose the aggregate Voting Rights

shall be computed as of such record date; provided, however, that no such

consent, request, demand, authorization, direction, notice, waiver or other act

by the Holders on such record date shall be deemed

 

                                       13

 

<PAGE>

 

 

effective unless it shall become effective pursuant to the provisions of this

Trust Agreement not later than one year after the record date.

 

 

                                   Article II

                 DECLARATION OF TRUSTS; ISSUANCE OF CERTIFICATES;

                      PURPOSE AND CLASSIFICATION OF TRUSTS

 

            Section 2.01. Creation and Declaration of Trusts; Assignment of

Deposited Assets. (a) The Depositor, concurrently with the execution and

delivery of the related Supplement, does hereby agree to Grant to the Trustee

for the benefit of the Trustee and the Certificateholders of each given Series

and without recourse, all the right, title and interest of the Depositor,

including any security interest therein for the benefit of the Depositor, in, to

and under the Underlying Securities and other Deposited Assets. Unless otherwise

specified in the Supplement, each such Grant will include all interest, premium

(if any) and principal of, on or with respect to any such Underlying Securities

due after the Cut-off Date and received by the Depositor, and will exclude all

interest, premium (if any) and principal of, on or with respect to any such

Underlying Securities due on or before the Cut-off Date. With respect to any

Concentrated Underlying Security, the Underlying Securities Schedule shall

include information regarding the payment terms of the Concentrated Underlying

Security, the maturity or terms thereof, the rating, if any, thereof and any

other material information with respect thereto.

 

            (b) In connection with each Grant referred to in paragraph (a) of

this Section 2.01, the Depositor shall, not later than the applicable Closing

Date, either

 

            (i) deposit the Underlying Securities for a given Series (except for

       the Underlying Securities attributable to such Series that are to be

       acquired from a Person other than the Depositor, as specified on the

       Underlying Securities Schedule to the applicable Supplement) with the

       Trustee by physical delivery of such Underlying Securities duly endorsed,

       together with any documents necessary to transfer ownership of such

       Underlying Securities, to the Trustee, or

 

            (ii) have ensured that the Underlying Securities have been delivered

       to a Clearing Agency, in which event (A) the Securities Intermediary or

       its agent, on behalf of the Trustee, has accepted delivery of such

       Underlying Securities through such Clearing Agency, and (B) the

       Underlying Securities have been credited to a Securities Account of the

       Trustee and maintained by the Securities Intermediary on behalf of the

       Trustee, and the Securities Intermediary or its agent shall have the

       right to hold and maintain such Underlying Securities on deposit with

       such Clearing Agency for all purposes of this Trust Agreement.

 

            (c) In the case of each delivery of Underlying Securities referred

to in paragraph (b) of this Section 2.01, the Depositor shall be deemed thereby

to represent and warrant to the Trustee and the Securities Intermediary that:

 

            (i) the Depositor is duly authorized to so deliver the Underlying

       Securities;

 

            (ii) the Underlying Securities so delivered are genuine;

 

            (iii) at the time of delivery of the Underlying Securities, such

       Underlying Securities are free and clear of any lien, pledge,

       encumbrance, right, charge, claim or other security interest (other than

       the lien created by this Trust Agreement); and

 

            (iv) such delivery is irrevocable and free of any continuing claim

       by the Depositor except such as the Depositor may have as a

       Certificateholder.

 

            The above representations and warranties shall survive the delivery

of the Underlying Securities and the Certificates in respect thereof. The

Depositor shall further be deemed by such delivery to have made the

representations that to the Depositor's knowledge but without having made any

independent inquiry, as of the Closing Date, no default or event of default with

respect to the Underlying Securities has occurred and is continuing.

 

            (d) Unless otherwise specified in the related Supplement, the Grant

of the Deposited Assets accomplished by this Trust Agreement is absolute and

shall constitute a

 

                                       14

 

<PAGE>

 

 

sale. In addition, the Trust created hereunder and thereunder shall constitute a

fixed investment trust for federal income tax purposes under Treasury Regulation

Section 301.7701-4, and all parties hereto and thereto agree to treat the Trust,

any distributions therefrom and the beneficial interest in the Certificates

consistently with such characterization. The provisions of this Trust Agreement

shall be interpreted consistently with such characterization.

 

            (e) Any Trust created hereunder shall not engage in any business or

activities other than in connection with, or relating to, the holding,

protecting and preserving of the Deposited Assets and the issuance of the

Certificates, and other than those required or authorized by this Trust

Agreement or incidental to and necessary to accomplish such activities. Any

Trust created hereunder shall not issue or sell any certificates or other

obligations other than the Certificates or otherwise incur, assume or guarantee

any indebtedness for money borrowed.

 

            (f) Anything herein to the contrary notwithstanding, none of the

Trustee, the Securities Intermediary or any of the Certificateholders assumes

any of the obligations of the Depositor or any other Person in respect of the

Underlying Securities.

 

            (g) The Securities Intermediary expressly agrees with the Trustee

and the Certificateholders that, at all times from and after the date hereof,

any and all of the Deposited Assets held by the Securities Intermediary in the

Certificate Account are to be treated as Financial Assets under, and for all

purposes of, UCC Article 8 and UCC Article 9.

 

                                       15

 

<PAGE>

 

            Section 2.02. Acceptance by Trustee. With respect to each Series,

the Trustee will acknowledge receipt by it, or by a custodian on its behalf, of

the related Underlying Securities now existing or hereafter acquired, and

declares that it will hold such Underlying Securities and all other documents

delivered to it pursuant to this Trust Agreement, and that it will hold all such

assets and such other assets (including Underlying Securities acquired from a

Person other than the Depositor) comprising the Trust for a given Series, in

trust for the exclusive use and benefit of all present and future

Certificateholders of such Series and for the purposes and subject to the terms

and conditions set forth in this Trust Agreement.

 

            Section 2.03. Representations and Warranties of the Depositor. The

Depositor hereby represents and warrants to the Trustee that as of the Closing

Date or as of such other date specifically provided herein or in the applicable

Supplement:

 

            (i) the Depositor is a corporation duly organized, validly existing

       and in good standing under the laws of the State of Delaware;

 

            (ii) with respect to each Supplement, to the Depositor's knowledge

       but without having made any independent inquiry, the information set

       forth in the Underlying Securities Schedule with respect to each

       Underlying Security is true and correct in all material respects at the

       date or dates, respecting which, such information is furnished;

 

            (iii) the execution and delivery of this Trust Agreement by the

       Depositor and its performance of and compliance with the terms of this

       Trust Agreement will not violate the Depositor's certificate of

       incorporation or by-laws or constitute a default (or an event which, with

       notice or lapse of time, or both, wou