-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PcOMKg1pcQsjkIN8377VJ1yoeF5KBddnWcxU+S1z1B1eTOQP8YimYhKgKfOjdvOX fp3d7C6rrb7a4ZuDPFxHwg== 0001125282-05-001623.txt : 20050329 0001125282-05-001623.hdr.sgml : 20050329 20050329150028 ACCESSION NUMBER: 0001125282-05-001623 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20041231 FILED AS OF DATE: 20050329 DATE AS OF CHANGE: 20050329 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MERRILL LYNCH DEPOSITOR INC PREFERREDPLUS TRUST SERIES CCR-1 CENTRAL INDEX KEY: 0001138682 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] IRS NUMBER: 133891329 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-16453 FILM NUMBER: 05709423 BUSINESS ADDRESS: STREET 1: WORLD FINANCIAL CENTER STREET 2: NORTH TOWER CITY: NEW YORK STATE: NY ZIP: 10281 BUSINESS PHONE: 2124491000 10-K 1 b405311_10k.txt ANNUAL REPORT SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------------------------- FORM 10-K ANNUAL REPORT Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 ---------------------------------- For the fiscal year ended: Commission file number: December 31, 2004 001-16453 MERRILL LYNCH DEPOSITOR, INC. (ON BEHALF OF PREFERREDPLUS TRUST SERIES CCR-1) (Exact name of registrant as specified in its charter) DELAWARE 13-3891329 (State or other (I. R. S. Employer jurisdiction of Identification No.) incorporation) WORLD FINANCIAL CENTER, 10080 NEW YORK, NEW YORK (Zip Code) (Address of principal executive offices) ---------------------------------- Registrant's telephone number, including area code: (212) 449-1000 Securities registered pursuant to Section 12(b) of the Act: PreferredPLUS Trust Certificates Series CCR-1, Listed On The New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: Not Applicable. Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this form 10-K or any amendment to this form 10-K. Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes [ ] No [X] State the aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant. The aggregate market value shall be computed by reference to the price at which the common equity was sold, or the average bid and asked prices of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter. Not Applicable. Indicate the number of shares outstanding for each of the registrant's class of common stock, as of the latest practicable date. Not Applicable. DOCUMENTS INCORPORATED BY REFERENCE None. PART I ITEM 1. BUSINESS For information with respect to the underlying securities held by PreferredPLUS Trust Series CCR-1, please refer to Countrywide Financial Corp.'s (Commission file number 001-12331-01) periodic reports, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and other information on file with the Securities and Exchange Commission (the "SEC"). You can read and copy these reports and other information at the public reference facilities maintained by the SEC at Room 1024, 450 Fifth Street, NW, Washington, D.C. 20549. You may obtain copies of this material for a fee by writing to the SEC's Public Reference Section of the SEC at 450 Fifth Street, NW, Washington, D.C. 20549. You may obtain information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. You can also access some of this information electronically by means of the SEC's website on the Internet at http://www.sec.gov, which contains reports, proxy and information statements and other information that the underlying securities issuer and underlying securities guarantor have filed electronically with the SEC. Although we have no reason to believe the information concerning the underlying securities, the junior subordinated debentures, the underlying securities issuer, the junior subordinated debentures issuer or the underlying securities guarantor contained in the underlying securities guarantor's Exchange Act reports is not reliable, neither the depositor nor the trustee participated in the preparation of such documents, or made any due diligence inquiry with respect to the information provided therein. No investigation with respect to the underlying securities guarantor, underlying securities issuer, junior subordinated debentures issuer (including, without limitation, no investigation as to their respective financial condition or creditworthiness) or of the underlying securities or the junior subordinated debentures has been made. You should obtain and evaluate the same information concerning the underlying securities guarantor, the underlying securities issuer or the junior subordinated debentures issuer as you would obtain and evaluate if your investment were directly in the underlying securities or in other securities issued by the underlying securities issuer. There can be no assurance that events affecting the underlying securities, the junior subordinated debentures, the underlying securities issuer, the junior subordinated debentures issuer or the underlying securities guarantor have not occurred or have not yet been publicly disclosed which would affect the accuracy or completeness of the publicly available documents described above. ITEM 2. PROPERTIES None. ITEM 3. LEGAL PROCEEDINGS None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. 2 PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Trust Certificates issued by PreferredPLUS Trust Series CCR-1 are represented by one or more physical certificates registered in the name of Cede & Co., the nominee of the Depository Trust Company. The Trust Certificates are listed on the New York Stock Exchange. ITEM 6. SELECTED FINANCIAL DATA Not Applicable. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Not Applicable. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not Applicable. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. Not Applicable. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. ITEM 9A. CONTROLS AND PROCEDURES The Registrant has procedures so as to provide reasonable assurance that its future Exchange Act filings will be filed within the applicable time periods. ITEM 9B. OTHER INFORMATION None. 3 PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Not Applicable. ITEM 11. EXECUTIVE COMPENSATION Not Applicable. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS (a) Securities Authorized For Issuance Under Equity Compensation Plans: None. (b) Security Ownership Of Certain Beneficial Owners: None. (c) Security Ownership Of Management: Not Applicable. (d) Changes In Control: None. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS None. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES Not Applicable. 4 PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES (a)(1) Financial Statements: Not Applicable (a)(2) Financial Statement Schedules: Not Applicable (a)(3) List of Exhibits The following exhibits are filed as part of, and incorporated by reference into this Annual Report on Form 10-K: 31.1 Certification of President of Registrant dated March 29, 2005, pursuant to Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2004. 99.1 Trustee's Annual Compliance Certificate dated March 24, 2005. 99.2 Report of Deloitte & Touche LLP, Independent Registered Public Accounting Firm dated March 25, 2005, Registrant's Assertion on Compliance with PPLUS Minimum Servicing Standards dated March 25, 2005 and PPLUS Minimum Servicing Standards. 99.3 Report of Ernst & Young LLP, Independent Registered Public Accounting Firm dated March 14, 2005, The Bank of New York's Assertion on Compliance with PPLUS Minimum Servicing Standards dated March 14, 2005 and PPLUS Minimum Servicing Standards. (b) Exhibits The Registrant hereby files as part of this Annual Report on Form 10-K the exhibits listed in Item 15(a)(3) set forth above. (c) Financial Statement Schedules Not applicable. 5 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized. MERRILL LYNCH DEPOSITOR, INC. Date: March 29, 2005 By: /s/ Stephan Kuppenheimer ----------------------------------- Name: Stephan Kuppenheimer Title: President EX-31.1 2 b405311_ex31-1.txt CERTIFICATION OF PRESIDENT OF REGISTRANT EXHIBIT 31.1 I, Stephan Kuppenheimer, certify that: 1. I have reviewed this annual report on Form 10-K, and all reports on Form 8-K containing distribution or servicing reports filed in respect of periods included in the year covered by this annual report, of Merrill Lynch Depositor, Inc., on behalf of PreferredPLUS Trust Series CCR-1; 2. Based on my knowledge, the information in these reports, taken as a whole, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading as of the last day of the period covered by this annual report; 3. Based on my knowledge, the distribution or servicing information required to be provided to the depositor by the trustee under the pooling and servicing, or similar, agreement, for inclusion in these reports is included in these reports; 4. I am responsible for reviewing the activities performed by the depositor and the trustee under the pooling and servicing, or similar, agreement and based upon my knowledge and the annual compliance review required under that agreement, and except as disclosed in the reports, the depositor and trustee have each fulfilled its obligations under that agreement; and 5. The reports disclose all significant deficiencies relating to the compliance by the depositor or trustee with the minimum servicing or similar standards based upon the report provided by an independent public accountant, after conducting a review in compliance with the Uniform Single Attestation Program for Mortgage Bankers or similar procedure, as set forth in the pooling or servicing, or similar, agreement, that is included in these reports. In giving the certifications above, I have reasonably relied on information provided to me by the following unaffiliated parties: The Bank of New York and its officers and agents. Date: March 29, 2005 /s/ Stephan Kuppenheimer --------------------------------- President EX-99.1 3 b405311_ex99-1.txt TRUSTEE'S ANNUAL COMPLIANCE CERTIFICATE EXHIBIT 99.1 [BANK OF NEW YORK LETTERHEAD] BANK OF NEW YORK Officer's Certificate ----------------------------- March 24, 2005 MERRILL LYNCH DEPOSITOR, INC. North Tower, 7th Floor 4 World Financial Center New York, New York 10080 PREFERREDPLUS, PPLUS TRUST AND INDEXPLUS CERTIFICATE The undersigned, Kevin Cremin, the Vice President-Manager of The Bank of New York, a New York corporation (the "Trustee"), hereby certifies in such capacity that, based on his knowledge, the Trustee has complied, in all material respects, with all conditions and covenants applicable to the Trustee under the Standard Terms for Trust Agreements dated February 20, 1998 between Merrill Lynch Depositor, Inc. as depositor (the "Depositor") and the Trustee, as successor to United States Trust Company of New York, as trustee and securities intermediary (the "Securities Intermediary"), in each case as amended by a series supplement between the Depositor, the Trustee and the Securities Intermediary for each series of trust certificates listed in the attached schedule. Very truly yours, BANK OF NEW YORK By: /s/ Kevin Cremin ------------------------ Name: Kevin Cremin Title: Vice President SCHEDULE INDEXPLUS Trust Series 2003-1 PPLUS Trust Series CMT-1 PPLUS Trust Series CSF-1 PPLUS Trust Series DCC-1 PPLUS Trust Series DCNA-1 PPLUS Trust Series FMC-1 PPLUS Trust Series GSC-1 PPLUS Trust Series GSC-2 PPLUS Trust Series GSC-3 PPLUS Trust Series GSG-1 PPLUS Trust Series GSG-2 PPLUS Trust Series HTZ-1 PPLUS Trust Series JPM-1 PPLUS Trust Series LMG-3 PPLUS Trust Series PMC-1 PPLUS Trust Series SPR-1 PPLUS Trust Series TWC-1 PPLUS Trust Series VAL-1 PreferredPLUS Trust Series ALL-1 PreferredPLUS Trust Series ATT-1 PreferredPLUS Trust Series BLC-1 PreferredPLUS Trust Series BLC-2 PreferredPLUS Trust Series BLS-1 PreferredPLUS Trust Series CCR-1 PreferredPLUS Trust Series CTR-1 PreferredPLUS Trust Series CZN-1 PreferredPLUS Trust Series ELP-1 PreferredPLUS Trust Series FAR-1 PreferredPLUS Trust Series FRD-1 PreferredPLUS Trust Series GEC-1 PreferredPLUS Trust Series GRC-1 PreferredPLUS Trust Series LMG-1 PreferredPLUS Trust Series LMG-2 PreferredPLUS Trust Series MSD-1 PreferredPLUS Trust Series NAI-1 PreferredPLUS Trust Series QWS-1 PreferredPLUS Trust Series QWS-2 PreferredPLUS Trust Series UPC-1 PreferredPLUS Trust Series VER-1 Public STEERS(R) Series 1998 F-Z4 Trust Public STEERS(R) Series 1998 HLT-1 Trust Public STEERS(R) Series 1998 IBM-Z2 Trust Public STEERS(R) Series 1998 TRV-C1 Trust Public STEERS(R) Series 1999 REN-C1 Trust 2 EX-99.2 4 b405311_ex99-2.txt INDEPENDENT ACCOUNTANTS' REPORT EXHIBIT 99.2 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Merrill Lynch Depositor, Inc. We have examined management's assertion that Merrill Lynch Depositor, Inc. (the "Company") has complied as and for the year ended December 31, 2004, with its established minimum servicing standards described in the accompanying Management's Assertion on Compliance with PPLUS Minimum Servicing Standards with respect to PreferredPLUS Trust Series CCR-1, dated March 25, 2005. Management is responsible for the Company's compliance with those minimum servicing standards. Our responsibility is to express an opinion on management's assertion about the Company's compliance based on our examination. We did not examine The Bank of New York's compliance with those minimum servicing standards that it is responsible for as indicated for "the Bank" in the accompanying minimum servicing standards. The Bank of New York's compliance with those minimum servicing standards was examined by other accountants whose report has been furnished to us, and our opinion, insofar as it relates to The Bank of New York's compliance, is based solely on the report of such other accountants. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants as adopted by the Public Company Accounting Oversight Board (United States) and, accordingly, included examining, on a test basis, evidence about the Company's compliance with its minimum servicing standards and performing such other procedures as we considered necessary in the circumstances. We believe that our examination and the report of other accountants provide a reasonable basis for our opinion. Our examination does not provide a legal determination on the Company's compliance with its minimum servicing standards. In our opinion, based on our examination and the report of other accountants, management's assertion that the Company complied with the aforementioned minimum servicing standards as of and for the year ended December 31, 2004, is fairly stated, in all material respects, based on the criteria set forth in Appendix I. Deloitte & Touche LLP New York, New York March 25, 2005 Management's Assertion on Compliance with PPLUS Minimum Servicing Standards March 25, 2005 As of and for the year ended December 31, 2004, Merrill Lynch Depositor, Inc. (the "Company") has complied, in all material respects, with the Company's established minimum servicing standards, as set forth in Appendix I, for servicing the securities in each of the Trust Series, as listed on Schedule A hereto, excluding those with respect to the Bank of New York as Trustee, Custodian, Paying Agent and Transfer Agent. By: /s/ Stephan Kuppenheimer ------------------------ Stephan Kuppenheimer President Merrill Lynch Depositor, Inc. *************** SCHEDULE A INDEXPLUS Trust Series 2003-1 PPLUS Trust Series CSF-1 PPLUS Trust Series DCC-1 PPLUS Trust Series FMC-1 PPLUS Trust Series GSG-1 PPLUS Trust Series GSG-2 PPLUS Trust Series HTZ-1 PPLUS Trust Series PMC-1 PPLUS Trust Series SPR-1 PPLUS Trust Series VAL-1 PreferredPLUS Trust Series ALL-1 PreferredPLUS Trust Series ATT-1 PreferredPLUS Trust Series BLC-1 PreferredPLUS Trust Series BLC-2 PreferredPLUS Trust Series BLS-1 PreferredPLUS Trust Series CCR-1 PreferredPLUS Trust Series CTR-1 PreferredPLUS Trust Series CZN-1 PreferredPLUS Trust Series ELP-1 PreferredPLUS Trust Series FAR-1 PreferredPLUS Trust Series FRD-1 PreferredPLUS Trust Series GEC-1 PreferredPLUS Trust Series GRC-1 PreferredPLUS Trust Series LMG-1 PreferredPLUS Trust Series LMG-2 PreferredPLUS Trust Series MSD-1 PreferredPLUS Trust Series NAI-1 PreferredPLUS Trust Series QWS-1 PreferredPLUS Trust Series QWS-2 PreferredPLUS Trust Series UPC-1 PreferredPLUS Trust Series VER-1 Public STEERS(R) Series 1998 HLT-1 Trust Public STEERS(R) Series 1998 TRV-C1 Trust Public STEERS(R) Series 1999 REN-C1 Trust APPENDIX I PPLUS Minimum Servicing Standards intended for use in connection with the Annual Accountants Report ("AAR") Below is Merrill Lynch Depositor, Inc.'s ("the Depositor") together with Merrill Lynch High Grade Credit Management ("HGCM") and the Merrill Lynch Credit Derivative Integrated Support Solutions ("ISS"), minimum servicing standards for the PreferredPlus Program ("PPlus"). The Bank of New York ("the Bank") acts as Trustee, Custodian, Paying Agent, and Transfer Agent on behalf of the PPlus Program and has agreed to comply with these minimum servicing standards. MERRILL LYNCH DEPOSITOR, INC.'S MINIMUM SERVICING STANDARDS 1. CUSTODIAL BANK ACCOUNT RECONCILIATIONS o The Bank must reconcile all related custodial bank accounts. o The Bank will include the Distribution report as Exhibit 99.1 in the Form 8-Ks filed with the SEC. 2. VERIFICATION OF INCOMING TRUST COLLATERAL INTEREST PAYMENTS o The Bank must have a tickler system in place so that they will be expecting and monitoring the custodial bank account for receipt of the collateral coupon interest. Each of the tickler systems shall be updated on an on-going basis as each new trust series is created. o The Bank will ensure all interest payments are deposited into the custodial bank accounts and related bank clearing accounts on the day the Bank is in receipt of the funds. o The Bank must prove the arithmetic accuracy of the amount of interest received by the Trust from the underlying securities and ensure that the face amount, description, coupon rate, and maturity date of the securities held in the Trust agree to the PPM Supplement dated Date XX, 20XX. 3. TRUST DISBURSEMENTS o The Bank must prove the arithmetic accuracy of the amount of interest to be paid by the Trust to the Debt Unit holders by referring to the PPM Supplement dated Date XX, 20XX. o The Bank will make all disbursements via wire transfer to The Depository Trust Company ("DTC") on the scheduled trust distribution date as soon as the amount of interest received from the underlying collateral into the custodial bank account has been received and verified for accuracy. 4. PARTIAL REDEMPTIONS o If there is a partial redemption of the trust certificates the Bank and the Depositor must ensure that the redemption proceeds received by the trust and distributed by the Bank are in accordance with the series supplement. 5. DEFAULTS o If the Bank has actual knowledge of an event of default on the underlying securities that did not cause the trust to liquidate, the Bank must distribute a formal notice of default to the Depositor, the certificateholders, the rating agencies and HGCM/ISS. o If the Bank has actual knowledge of an event of default on the underlying securities that did not cause the Trust to liquidate, the procedures for a vote or consent of the certificateholders as set forth in the Standard Terms and series Supplement must be complied with. 6. CALL WARRANT EXERCISES AND OPTIONAL EXCHANGES o If there is an exercise of call warrants or an optional exchange of trust certificates for underlying securities that did not cause the trust to liquidate, the Bank must give the Depositor and the affected certificateholders notice of any exercise of call warrants or optional exchange. Such notice must contain the amount of certificates to be purchased, the call price, and any other relevant information. o If there is an exercise of call warrants or an optional exchange of trust certificates for underlying securities that did not cause the trust to liquidate, the Bank must notify the rating agencies of the call exercise or optional exchange. o If there is an exercise of call warrants or an optional exchange of trust certificates for underlying securities that did not cause the trust to liquidate, the Bank must give notice of exercise or optional exchange to the Depositor and certificate registrar of any certificates that were called. 7. COMMUNICATIONS WITH CERTIFICATEHOLDERS o If there was any occasion for the exercise of voting rights or giving consents by the certificateholders, the Bank must provide notice to the certificateholders within 5 business days of the Trust's receipt of notice of the occasion and the Bank must vote or give consents as directed by certificateholders. EX-99.3 5 b405311_ex99-3.txt INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM EXHIBIT 99.3 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We have examined management's assertion, included in the accompanying Report of Management on Compliance, that The Bank of New York (the "Company") complied with the PPLUS Minimum Servicing Standards (attached) as of and for the year ended December 31, 2004 as it relates to PreferredPLUS Trust Series CCR-1. Management is responsible for The Bank of New York's compliance with those requirements. Our responsibility is to express an opinion on management's assertion about The Bank of New York's compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the Company's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Company's compliance with specified requirements. In our opinion, management's assertion that The Bank of New York complied with the aforementioned requirements as of and for the year ended December 31, 2004 is fairly stated, in all material respects. Ernst & Young LLP New York, New York March 14, 2005 REPORT OF MANAGEMENT ON COMPLIANCE March 14, 2005 We, as members of management of The Bank of New York, (the "Company") are responsible for complying with the requirements of the PPLUS Minimum Servicing Standards as it relates to PreferredPLUS Trust Series CCR-1. We also are responsible for establishing and maintaining effective internal control over compliance with the PPLUS Minimum Servicing Standards. We have performed an evaluation of the Company's compliance with the requirements of PPLUS Minimum Servicing Standards as it relates to PreferredPLUS Trust Series CCR-1 as of December 31, 2004 and for the year ended December 31, 2004. Based on this evaluation, we assert that for the year ended December 31, 2004, the Company complied with the requirements of the PPLUS Minimum Servicing Standards (attached). /s/ Robert L. Griffin ----------------------------- Robert L. Griffin Managing Director /s/ Kevin Cremin ----------------------------- Kevin Cremin Vice President APPENDIX I PPLUS Minimum Servicing Standards intended for use in connection with the Annual Accountants Report ("AAR") Below is Merrill Lynch Depositor, Inc.'s ("the Depositor") together with Merrill Lynch High Grade Credit Management ("HGCM") and the Merrill Lynch Credit Derivative Integrated Support Solutions ("ISS"), minimum servicing standards for the PreferredPlus Program ("PPlus"). The Bank of New York ("the Bank") acts as Trustee, Custodian, Paying Agent, and Transfer Agent on behalf of the PPlus Program and has agreed to comply with these minimum servicing standards. MERRILL LYNCH DEPOSITOR, INC.'S MINIMUM SERVICING STANDARDS 1. CUSTODIAL BANK ACCOUNT RECONCILIATIONS o The Bank must reconcile all related custodial bank accounts. o The Bank will include the Distribution report as Exhibit 99.1 in the Form 8-Ks filed with the SEC. 2. VERIFICATION OF INCOMING TRUST COLLATERAL INTEREST PAYMENTS o The Bank must have a tickler system in place so that they will be expecting and monitoring the custodial bank account for receipt of the collateral coupon interest. Each of the tickler systems shall be updated on an on-going basis as each new trust series is created. o The Bank will ensure all interest payments are deposited into the custodial bank accounts and related bank clearing accounts on the day the Bank is in receipt of the funds. o The Bank must prove the arithmetic accuracy of the amount of interest received by the Trust from the underlying securities and ensure that the face amount, description, coupon rate, and maturity date of the securities held in the Trust agree to the PPM Supplement dated Date XX, 20XX. 3. TRUST DISBURSEMENTS o The Bank must prove the arithmetic accuracy of the amount of interest to be paid by the Trust to the Debt Unit holders by referring to the PPM Supplement dated Date XX, 20XX. o The Bank will make all disbursements via wire transfer to The Depository Trust Company ("DTC") on the scheduled trust distribution date as soon as the amount of interest received from the underlying collateral into the custodial bank account has been received and verified for accuracy. 1 4. PARTIAL REDEMPTIONS o If there is a partial redemption of the trust certificates the Bank and the Depositor must ensure that the redemption proceeds received by the trust and distributed by the Bank are in accordance with the series supplement. 5. DEFAULTS o If the Bank has actual knowledge of an event of default on the underlying securities that did not cause the trust to liquidate, the Bank must distribute a formal notice of default to the Depositor, the certificateholders, the rating agencies and HGCM/ISS. o If the Bank has actual knowledge of an event of default on the underlying securities that did not cause the Trust to liquidate, the procedures for a vote or consent of the certificateholders as set forth in the Standard Terms and series Supplement must be complied with. 6. CALL WARRANT EXERCISES AND OPTIONAL EXCHANGES o If there is an exercise of call warrants or an optional exchange of trust certificates for underlying securities that did not cause the trust to liquidate, the Bank must give the Depositor and the affected certificateholders notice of any exercise of call warrants or optional exchange. Such notice must contain the amount of certificates to be purchased, the call price, and any other relevant information. o If there is an exercise of call warrants or an optional exchange of trust certificates for underlying securities that did not cause the trust to liquidate, the Bank must notify the rating agencies of the call exercise or optional exchange. o If there is an exercise of call warrants or an optional exchange of trust certificates for underlying securities that did not cause the trust to liquidate, the Bank must give notice of exercise or optional exchange to the Depositor and certificate registrar of any certificates that were called. 7. COMMUNICATIONS WITH CERTIFICATEHOLDERS o If there was any occasion for the exercise of voting rights or giving consents by the certificateholders, the Bank must provide notice to the certificateholders within 5 business days of the Trust's receipt of notice of the occasion and the Bank must vote or give consents as directed by certificateholders. 2 -----END PRIVACY-ENHANCED MESSAGE-----