Terms Agreement for Sale of PPLUS Trust Certificates Series LMG-3 between Merrill Lynch Depositor, Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated

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Summary

This agreement is between Merrill Lynch Depositor, Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated for the sale and purchase of 1,222,000 Class A and 1,222,000 Class B PPLUS Trust Certificates Series LMG-3. The certificates have fixed interest rates (7.00% for Class A, 1.25% for Class B) and mature in February 2030. The agreement sets the purchase prices, payment terms, and other key conditions. The transaction is set to close on August 24, 2004, and the Class A certificates will be listed on the New York Stock Exchange.

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EX-1.2 2 ex1-2_082504.txt TERMS AGREEMENT MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED PPLUS CLASS A 7.00% TRUST CERTIFICATES SERIES LMG-3 PPLUS CLASS B 1.25% TRUST CERTIFICATES SERIES LMG-3 TERMS AGREEMENT August 19, 2004 Merrill Lynch Depositor, Inc. 4 World Financial Center North Tower, 7th Floor New York, New York 10080 Attention: Michael F. Connor Ladies and Gentlemen: We understand that Merrill Lynch Depositor, Inc., a Delaware corporation (the "Company"), proposes to issue and sell 1,222,000 PPLUS Class A 7.00% Trust Certificates Series LMG-3 (the "Class A Certificates") at a $25 Stated Amount per Class A Trust Certificate and 1,222,000 PPLUS Class B 1.25% Trust Certificates Series LMG-3 (the "Class B Certificates") with a notional principal amount of $25 per Class B Certificate, (the Class A Certificates and Class B Certificates collectively, the "Underwritten Securities"). Reference is made to the purchase agreement dated February 9, 1998 (the "Standard Purchase Agreement") between you and the undersigned. Subject to the terms and conditions set forth below and subject to the terms of the Standard Purchase Agreement which terms are incorporated by reference herein, we offer to purchase the principal amount of Underwritten Securities at the purchase price set forth below. The Underwritten Securities shall have the following terms:
Title: PPLUS Trust Certificates Series LMG-3, offered in two classes (Class A Trust Certificates and Class B Trust Certificates) Ratings: "BBB-" from Standard & Poor's, and "Baa3" from Moody's Amount: 1,222,000 Class A Trust Certificates 1,222,000 Class B Trust Certificates Class A Trust Certificate Denominations: Stated amount of $25 and integral multiples thereof Class B Trust Certificate Denominations: Notional principal amount of $25 and integral multiples thereof Currency of payment: U.S. dollars Distribution rate or formula: Holders of Class A Trust Certificates will be entitled to distributions at 7.00% per annum through February, 2030, unless the Class A Trust Certificates are redeemed or called prior to such date. Holders of Class B Trust Certificates will be entitled to distributions at 1.25% per annum through February, 2030, unless the Class B Trust Certificates are redeemed or called prior to such date. Cut-off Date: August 24, 2004 Distribution payment dates: February 1 and August 1, commencing February 1, 2005. Regular record dates: As long as the Underlying Securities are represented by one or more global certificated securities, the record day will be the close of business on the Business Day prior to the relevant distribution payment dates, unless a different record date is established for the Underlying Securities. If the Underlying Securities are no longer represented by one or more global certificated securities, the distribution payment date will be at least one Business Day prior to the relevant distribution payment dates. Stated maturity date: February 1, 2030 Sinking fund requirements: None Conversion provisions: None Listing requirements: Class A listed on the New York Stock Exchange Black-out provisions: None Fixed or Variable Price Offering: Fixed Price Offering Class A Trust Certificate Purchase Price: $25 per Class A Trust Certificate Class B Trust Certificate Purchase Price: $3.3375 per Class B Trust Certificate Form: Book-entry Trust Certificates with The Depository Trust Company, except in certain limited circumstances Closing date and location: August 24, 2004, Shearman & Sterling LLP, 599 Lexington Avenue, New York, NY
Please accept this offer no later than 10:00 A.M. (New York City time) on August 19, 2004 by signing a copy of this Terms Agreement in the space set forth below and returning the signed copy to us. Very truly yours, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: /s/ Michael F. Connor ------------------------------ Authorized Signatory Accepted: MERRILL LYNCH DEPOSITOR, INC. By: /s/ Brian Barrett ------------------------------ Name: Brian Barrett Title: President