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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) November 27, 1996
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Southpoint Structured Assets, Inc.
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(Exact Name of Registrant as Specified in its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
333-09883 51-6503749
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(Commission File Number) (I.R.S. Employer Identification No.)
50 North Front Street, Memphis, Tennessee 38103
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(Address of Principal Executive Offices) (Zip Code)
(901) 524-4100
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
Pursuant to an underwriting agreement, dated as of November 21, 1996
(the "Underwriting Agreement"), between the Registrant and Morgan
Keegan & Company, Inc. (the "Underwriter"), the Registrant has sold to
the Underwriter $10,000,000 in aggregate principal amount of Treasury
Security-Backed Certificates, Series 1996-1, consisting of $5,000,000
in aggregate principal amount of 6.25% Class A Certificates due August
15, 2002 and $5,000,000 in aggregate principal amount of 6.80% Class B
Certificates due May 15, 2006 (collectively, the "Certificates") issued
pursuant to a Standard Terms for Trust Agreements, dated as of November
1, 1996 as supplemented by the Series Supplement, dated as of November
27, 1996 (the "Trust Agreement"), between the Registrant and Bank One,
West Virginia, N.A., as trustee (the "Trustee"). The Class A
Certificates will be issued by the Treasury Security-Backed Trust,
Series 1996-1, Class A (the "Class A Trust") and the Class B
Certificates will be issued by the Treasury Security-Backed Trust,
Series 1996-1, Class B (the "Class B Trust") both to be formed pursuant
to the Trust Agreement.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
EXHIBIT
NO. DOCUMENT DESCRIPTION
1.1 Underwriting Agreement
4.1 Standard Terms for Trust Agreements, dated as of November 1, 1996, as
supplemented by a Series Supplement, dated as of November 27, 1996,
between the Registrant and Bank One, West Virginia, as trustee.
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SIGNATURES
Pursuant to the requirements 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.
SOUTHPOINT STRUCTURED ASSETS, INC.
Dated: December 3, 1996 By: /s/ C. David Ramsey
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C. David Ramsey
President
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Exhibit 1.1
SOUTHPOINT STRUCTURED ASSETS, INC.
TREASURY SECURITY-BACKED CERTIFICATES, SERIES 1996-1
UNDERWRITING AGREEMENT
November 21, 1996
Morgan Keegan & Company, Inc.
Morgan Keegan Tower
50 North Front Street
Memphis, Tennessee 38103
Ladies and Gentlemen:
Southpoint Structured Assets, Inc., a Delaware corporation (the "Company"),
proposes to cause the issuance of $10,000,000 aggregate principal amount of its
Treasury Security-Backed Certificates, Series 1996-1, consisting of $5,000,000
aggregate principal amount of 6.25% Class A Certificates due August 15, 2002 and
$5,000,000 aggregate principal amount of 6.80% Class B Certificates due May 15,
2006 (collectively, the "Certificates"), to be issued under the trust agreement
specified in Schedule I hereto (the "Trust Agreement") between the Company and
the Trustee identified in such Schedule (the "Trustee"), in each case, to you.
Pursuant to the Trust Agreement, the Company and the Trustee will form the
Treasury Security-Backed Trust, Series 1996-1, Class A (the "Class A Trust") for
the purpose of issuing the Class A Certificates and the Treasury Security-Backed
Trust, Series 1996-1, Class B (the "Class B Trust") for the purpose of issuing
the Class B Certificates (the Class A Trust and the Class B Trust are
collectively referred to herein as the "Trust"). The Class A Certificates will
represent a fractional undivided interest in the Class A Trust and the principal
asset of the Class A Trust will consist of a United States Treasury Note having
an aggregate principal amount of $5,000,000, a coupon of 6.375% and a maturity
of August 15, 2002 (the "Class A Treasury Note"). The Class A Treasury Note
will be deposited into the Class A Trust by the Company subject to (i) the right
of the holder of the Class A Call Warrant to purchase the Class A Treasury Note
on any date on or after May 15, 1997 (an "Early Termination Date") at a price of
par plus accrued interest to such Early Termination Date (the "Liquidation
Price") and (ii) the right of the holder of the Class A Retained Interest to
receive on each Class A Distribution Date from payments received on the Class A
Treasury Note, a distribution equal to .125% per annum multiplied by the
principal amount of the Class A Treasury Note. The Class B Certificates will
represent a fractional undivided interest in the Class B Trust and the principal
asset of the Class B Trust will consist of a United States Treasury Note having
an aggregate principal amount of $5,000,000, a coupon of 6.875% and a maturity
of May 15, 2006 (the "Class B Treasury Note"). The Class B Treasury Note will
be deposited into the Class B Trust by the Company subject to (i) the right of
the holder of the Class B Call Warrant to purchase the Class B Treasury Note on
the Early Termination Date at the Liquidation Price and (ii) the right of the
holder of the Class B Retained Interest to receive on each Class B Distribution
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Date from payments received on the Class B Treasury Note, a distribution equal
to .075% per annum multiplied by the principal amount of the Class B Treasury
Note. The Class A Treasury Note and the Class B Treasury Note are sometimes
collectively referred to herein as the "Underlying Securities." The Class A
Call Warrant and the Class B Call Warrant are collectively referred to herein as
the "Call Warrants." The Class A Retained Interest and the Class B Retained
Interest are collectively referred to herein as the "Retained Interests." The
Call Warrants and the Retained Interests are not subject to this Agreement.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement on Form S-3 (No. 333-09883), relating to certain securities to be
issued from time to time by various trusts originated by the Company. The
Company also has filed with, or proposes to file with, the Commission pursuant
to Rule 424 under the Securities Act a prospectus supplement specifically
relating to the Certificates. The registration statement as amended to the date
of this Agreement is hereinafter referred to as the "Registration Statement" and
the related prospectus in the form first used to confirm sales of the
Certificates is hereinafter referred to as the "Basic Prospectus." The Basic
Prospectus as supplemented by the prospectus supplement specifically relating to
the Certificates in the form first used to confirm sales of the Certificates is
hereinafter referred to as the "Prospectus." Any preliminary form of the
Prospectus Supplement which has heretofore been filed pursuant to Rule 424, or
prior to the effective date of the Registration Statement, pursuant to Rule
402(a) or 424(a) is hereinafter called a "Preliminary Prospectus Supplement."
Any reference to "amend," "amendment" or "supplement" with respect to the
Registration Statement, the Basic Prospectus, any preliminary prospectus or the
Prospectus shall be deemed to refer to and include any documents filed under the
Exchange Act after the date of this Agreement, or the date of the Basic
Prospectus, any preliminary prospectus or the Prospectus, as the case may be,
which are deemed to be incorporated by reference therein.
The Company hereby agrees with the Underwriter as follows:
1. (a) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company agrees to sell to
the Underwriter, and the Underwriter agrees to purchase from the Company, the
Certificates at prices, as of the Closing Date, equal to 99% of the aggregate
principal balance of the Class A Certificates and 98.75% of the aggregate
principal balance of the Class B Certificates. There will be added to the
purchase price of the Certificates an amount equal to interest accrued thereon
from November 27, 1996 (the "Cut-off Date") to but not including the Closing
Date (defined below).
(b) The Company will deliver the Certificates against payment of the
purchase price by the Underwriter at 11:00 a.m., EST, on November 27, 1996, or
such later date as you shall designate, which date and time may be postponed by
agreement between you and the Company (such date and time of delivery and
payment for the Certificates being herein called the "Closing Date"). Delivery
of the Certificates shall be made through the services of
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the Depository Trust Company ("DTC"). Payment of the purchase price shall be
made by wire transfer of immediately available funds to an account previously
designated to the Underwriter by the Company.
2. The Company understands that the Underwriter intends (i) to make a
public offering of the Certificates and (ii) initially to offer the Certificates
upon the terms set forth in the Prospectus, and the Underwriter agrees that all
such offers and sales by such Underwriter shall be made in compliance with all
applicable laws and regulations.
3. The Company represents and warrants to each Underwriter that:
(a) The Registration Statement on Form S-3 (No. 333-09883) in
respect of the Certificates has been filed with the Commission in the form
heretofore delivered or to be delivered and such Registration Statement in
such form has been declared effective by the Commission and no stop order
suspending the effectiveness of such Registration Statement has been issued
and no proceeding for that purpose has been initiated or threatened by the
Commission.
(b) The Certificates meet the requirements for use of Form S-3 under
the Securities Act, and the Registration Statement and the Prospectus
conform, and any amendments or supplements thereto will conform, in all
material respects to the requirements of the Securities Act and the rules
and regulations of the Commission thereunder, and the Registration
Statement, as of the applicable effective date, did not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and the Prospectus, including any amendments or supplements
thereto, as of the date of the Prospectus Supplement and as of the Closing
Date, does not and will not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading. The conditions to the use by the Company of a registration
statement on Form S-3 under the Securities Act, as set forth in the General
Instructions to Form S-3, have been satisfied with respect to the
Registration Statement and the Prospectus.
(c) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware
with corporate power and authority to enter into and perform its
obligations under this Agreement and the Trust Agreement; and the Company
is duly qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which the ownership or lease of its
properties or the conduct of its business requires such qualification,
except where the failure to be so qualified, considering all such cases in
the aggregate, does not have a material adverse effect on the business or
properties of the Company.
(d) This Agreement has been duly authorized, executed and delivered
by the Company and constitutes a valid and binding agreement of the Company
enforceable in accordance with its terms, except that the enforceability
hereof may be subject to
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(i) bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights generally,
and (ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law); and
except that rights to indemnification hereunder may be limited by public
policy under applicable securities laws.
(e) The Certificates have been duly authorized by the Company and,
when executed, authenticated and delivered in accordance with the Trust
Agreement and delivered to you pursuant to this Agreement, such
Certificates will have been duly and validly issued and outstanding and
will be entitled to the benefits provided by the Trust Agreement; at the
Closing Date the Trust Agreement will be duly authorized, executed and
delivered by the Company and will constitute a valid and binding agreement
of the Company enforceable in accordance with its terms, except that the
enforceability thereof may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally, and (ii) general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law); and at the Closing Date the Trust
Agreement and the Certificates will conform in all material respects to the
respective descriptions thereof in the Prospectus and the representations
and warranties of the Company in the Trust Agreement will be true and
correct.
(f) The issue and sale of the Certificates, the compliance by the
Company with all applicable provisions of the Certificates, the Trust
Agreement and this Agreement, and the consummation of the transactions
herein or therein contemplated will not conflict with or result in a breach
of any of the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, mortgage, pledge, charge,
security interest or encumbrance (collectively, "Liens") upon any property
or assets of the Company pursuant to, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company
is a party or by which the Company is bound or to which any of the property
or assets of the Company is subject, nor will any such action result in any
violation of the provisions of the Certificate of Incorporation or the by-
laws of the Company or of any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the
Company or any of its properties; and no consent, notice, approvals,
authorization, order, registrations or qualification of or with any such
court or governmental agency or body is required for the issue and sale of
the Certificates or the consummation by the Company of the other
transactions contemplated by this Agreement or the Trust Agreement except
such as have been obtained and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities
or Blue Sky laws in connection with the purchase and distribution of the
Certificates by the Underwriter.
(g) Other than as set forth or contemplated in the Prospectus, there
are no legal or governmental proceedings pending to which the Company is a
party or of which any property of the Company is the subject which, if
determined adversely to such person would individually or in the aggregate
have a material adverse effect on
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the financial position, earnings, management, stockholder's equity or
results of operations of the Company or which might interfere with or
adversely affect the consummation of the transactions contemplated herein
or in the Trust Agreement; and, to the best of the Company's knowledge, no
such proceedings are threatened or contemplated by governmental authorities
or threatened by others.
(h) At the time of execution and delivery of the Trust Agreement,
the Company will have good and marketable title to the Underlying
Securities being transferred to the Trust pursuant thereto, free and clear
of any Liens, and will not have assigned to any person any of its rights,
title or interest therein; the Company will have the power and authority to
transfer the Underlying Securities to the Trust on the Closing Date and the
Trust will have been assigned all right, title and interest held by the
Company in and to the Underlying Securities (exclusive of the Call Warrants
and the Retained Interests).
(i) Any taxes, fees and other governmental charges in connection
with the execution, delivery and performance of this Agreement, the Trust
Agreement and the Certificates have been or will be paid at or prior to the
Closing Date.
(j) The Trust created by the Trust Agreement is not required to be
registered under the Investment Company Act of 1940, as amended (the "1940
Act").
4. The Underwriter represents and warrants to and agrees with the Company
that such Underwriter will have funds available at First Tennessee Bank in the
Underwriter's account at such bank at the time all documents are executed and
the closing of the sale of the Certificates is completed except for the transfer
of funds and the delivery of the Certificates. Such funds will be available for
immediate transfer into the account of the Company maintained at such bank.
5. The Company covenants and agrees with the Underwriter as follows:
(a) to cause the Prospectus to be transmitted to the Commission for
filing pursuant to Rule 424(b) under the Securities Act by means reasonably
calculated to result in filing with the Commission pursuant to said rule;
(b) to deliver to the Underwriter, at the expense of the Company, a
signed copy of the Registration Statement (as originally filed) and each
amendment thereto, in each case including exhibits and, during the period
mentioned in paragraph (e) below, as many copies of the Prospectus
(including all amendments and supplements thereto) as you may reasonably
request;
(c) from the date hereof and prior to the Closing Date, to furnish
to you a copy of any proposed amendment or supplement to the Registration
Statement or the Prospectus, for your review, and not to file any such
proposed amendment or supplement to which you reasonably object;
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(d) to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company or the Trust
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Certificates, and during such
same period, to advise you promptly, and to confirm such advice in writing,
(i) when any amendment to the Registration Statement shall have become
effective, (ii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or
for any additional information, (iii) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or the initiation or threatening of any proceeding for that purpose, and
(iv) of the receipt by the Company or the Trust of any notification with
respect to any suspension of the qualification of the Certificates for
offer and sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; and to use its best efforts to prevent the
issuance of any such stop order or notification and, if issued, to obtain
as soon as possible the withdrawal thereof;
(e) if, during such period after the first date of the public
offering of the Certificates in the opinion of counsel for the Underwriter
a prospectus relating to the Certificates is required by law to be
delivered in connection with sales by the Underwriter or dealer, any event
shall occur as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the Prospectus to
comply with law, forthwith to prepare and furnish, at the expense of the
Company, to the Underwriter and to the dealers (whose names and addressees
you will furnish to the Company) to which Certificates may have been sold
by you and to any other dealers upon request, such amendments or
supplements to the Prospectus as may be necessary so that the statements in
the Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus will comply with law;
(f) to endeavor to qualify the Certificates for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request and to continue such qualification in effect so long as
reasonably required for distribution of the Certificates and to pay all
fees and expenses (including fees and disbursements of counsel to the
Underwriter) reasonably incurred in connection with such qualification and
in connection with the determination of the eligibility of the Certificates
for investment under the laws of such jurisdictions as you may designate;
provided, however, that the Company shall not be required to qualify to do
business in any jurisdiction where it is not now so qualified or to take
any action that would subject it to general or unlimited service of process
in any jurisdiction where it is not now so subject;
(g) to make generally available to its security holders and to you
as soon as practicable, but no later than sixteen months after the
effective date of the Registration
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Statement, an earnings statement covering a period of at least twelve
months beginning with the first fiscal quarter of the Company occurring
after the effective date of the Registration Statement, which shall satisfy
the provisions of Section 11(a) of the Securities Act and Rule 158 of the
Commission promulgated thereunder;
(h) so long as the Certificates are outstanding, to furnish to you
copies of all reports or other communications (financial or other)
furnished to holders of Certificates, and copies of any reports and
financial statements furnished to or filed with the Commission or any
national securities exchange;
(i) to pay all costs and expenses incident to the performance of its
obligations hereunder, including without limiting the generality of the
foregoing, all costs and expenses (i) incident to the preparation,
issuance, execution, authentication and delivery of the Certificates,
including any expenses of the Trustee, (ii) incident to the preparation,
printing and filing under the Securities Act of the Registration Statement,
the Prospectus and any preliminary prospectus (including in each case all
exhibits, amendments and supplements thereto), (iii) incurred in connection
with the registration or qualification and determination of eligibility for
investment of the Certificates under the laws of such jurisdictions as the
Underwriters may designate (including fees of counsel for the Underwriters
and their disbursements), (iv) in connection with the listing of the
Certificates on any stock exchange, (v) related to any filing with National
Association of Securities Dealers, Inc., (vi) in connection with the
printing (including word processing and duplication costs) and delivery of
this Agreement, the Trust Agreement and the furnishing to Underwriters and
dealers of copies of the Registration Statement and the Prospectus,
including mailing and shipping, as herein provided and (vii) payable to
rating agencies in connection with the rating of the Certificates; and
(j) to file with the Commission within fifteen days of the issuance
of the Certificates a Current Report on Form 8-K (for purposes of filing
the Trust Agreement).
6. The obligations of the Underwriter hereunder shall be subject to the
following conditions:
(a) the representations and warranties of the Company contained
herein are true and correct on and as of the Closing Date as if made on and
as of the Closing Date and the Company shall have complied with all
agreements and all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date;
(b) the Prospectus shall have been filed with the Commission
pursuant to Rule 424 within the applicable time period prescribed for such
filing by the rules and regulations under the Securities Act; no stop order
suspending the effectiveness of the Registration Statement shall be in
effect, and no proceedings for such purpose shall be pending before or
threatened by the Commission; and all requests for additional
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information on the part of the Commission shall have been complied with to
your satisfaction;
(c) since the respective dates as of which information is given in
the Registration Statement and the Prospectus there shall not have been any
material adverse change or any development involving a material adverse
change, or any development with respect to the Company, otherwise than as
set forth or contemplated in the Prospectus, the effect of which in the
judgment of the Underwriter makes it impracticable or inadvisable to
proceed with the public offering or the delivery of the Certificates on the
terms and in the manner contemplated in the Prospectus;
(d) the Underwriter shall have received on and as of the Closing
Date a certificate of an executive officer of the Company satisfactory to
you to the effect set forth in subsections (a), (b) and (c) of this
Section.
(e) Chapman and Cutler, special counsel for the Company, shall have
furnished to you their written opinion, dated the Closing Date,
substantially to the effect set forth in Exhibit A;
(f) Chapman and Cutler, special tax counsel for the Company, shall
have furnished to you their written opinion, dated the Closing Date,
substantially to the effect set forth in Exhibit B;
(g) Hamb & Poffenbarger, counsel to the Trustee shall have furnished
to you their opinion, dated the Closing Date, substantially to the effect
set forth in Exhibit C, in form and substance satisfactory to you;
(h) the Underwriter shall have received on and as of the Closing
Date an opinion of Chapman and Cutler, counsel to the Underwriter,
substantially to the effect set forth in Exhibit D in form and substance
satisfactory to you;
(i) the Certificates shall have been approved for listing on the New
York Stock Exchange, subject to official notice of issuance;
(j) The Class A Certificates shall have been rated "AAA" and the
Class B Certificates shall have been rated "AAA" by Standard & Poor's
Ratings Services; and
(k) on or prior to the Closing Date, the Company shall have
furnished to the Underwriter such further certificates and documents as the
Underwriter shall reasonably request.
7. The Company agrees to indemnify and hold harmless the Underwriter and
each person, if any, who controls the Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages and liabilities (including without
limitation the legal fees and other expenses incurred in connection with any
suit, action or proceeding or any claim asserted) caused by
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any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
information furnished to the Company by the Underwriter expressly for use
therein as described in Exhibit E hereto (the "Underwriter Information");
provided that the foregoing indemnity with respect to any preliminary prospectus
shall not inure to the benefit of any Underwriter (or to the benefit of any
person controlling such Underwriter) from whom the person asserting any such
losses, claims, damages or liabilities purchased Certificates if such untrue
statement or omission or alleged untrue statement or omission made in such
preliminary prospectus is eliminated or remedied in the Prospectus (as amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto) and, if required by law, a copy of the Prospectus (as so
amended or supplemented) shall not have been furnished to such person at or
prior to the written confirmation of the sale of such Certificates to such
person.
The Underwriter agrees to indemnify and hold harmless the Company, its
directors, its officers who sign the Registration Statement and each person who
controls the Company within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act, to the same extent as the foregoing indemnity
from the Company to each Underwriter, but only with reference the Underwriter
Information.
If any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any person
in respect of which indemnity may be sought pursuant to either of the two
preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Person has failed within
a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm for the Underwriter
and such control persons
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of the Underwriter shall be designated in writing by the Underwriter and any
such separate firm for the Company, its directors, its officers who sign the
Registration Statement and such control persons of the Company or authorized
representatives shall be designated in writing by the Company. The Indemnifying
Person shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Person agrees to indemnify any
Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. No Indemnifying Person shall, without the prior written
consent of the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement includes an unconditional release of
such Indemnified Person from all liability on claims that are the subject matter
of such proceeding.
If the indemnification provided for in the first and second paragraphs of
this Section 7 is unavailable to an Indemnified Person in respect of any losses,
claims, damages or liabilities referred to therein, then each Indemnifying
Person under such paragraph, in lieu of indemnifying such Indemnified Person
thereunder, shall contribute to the amount paid or payable by such Indemnified
Person as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriter on the other hand from the offering
of the Certificates or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the Underwriter on the other
in connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriter on the other shall be deemed to be in the same respective
proportions as the net proceeds from the offering of such Certificates (before
deducting expenses) received by the Company and the total underwriting discounts
and the commissions received by the Underwriter bear to the aggregate public
offering price of the Certificates. The relative fault of the Company on the one
hand and the Underwriter on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriter and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and the Underwriter agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this
-10-
<PAGE>
Section 9, in no event shall the Underwriter be required to contribute any
amount in excess of the amount by which the total price at which the
Certificates underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages that such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
The indemnity and contribution agreements contained in this Section 7 are
in addition to any liability which the Indemnifying Persons may otherwise have
to the Indemnified Persons referred to above.
The indemnity and contribution agreements contained in this Section 7 and
the representations and warranties of the Company set forth in this Agreement
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
the Underwriter or any person controlling the Underwriter or by or on behalf of
the Company, its officers or directors or any other person controlling the
Company and (iii) acceptance of and payment for any of the Certificates.
8. Notwithstanding anything herein contained, this Agreement may be
terminated in the absolute discretion of the Underwriter, by notice given to the
Company, if after the execution and delivery of this Agreement and prior to the
Closing Date (i) trading generally shall have been suspended or materially
limited on or by, as the case may be, any of the New York Stock Exchange, the
American Stock Exchange and the National Association of Securities Dealers,
Inc., (ii) trading of any securities of or guaranteed by the Company shall have
been suspended on any exchange or in any over-the-counter market, (iii) a
general moratorium on commercial banking activities in New York shall have been
declared by either Federal or New York State authorities, or (iv) there shall
have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in the judgment of the
Underwriter, is material and adverse and which, in the judgment of the
Underwriter, makes it impracticable to market the Certificates on the terms and
in the manner contemplated in the Prospectus.
9. If this Agreement shall be terminated by the Underwriter because of
any failure or refusal on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, or if for any reason the
Company shall be unable to perform its obligations under this Agreement or any
condition of the Underwriter's obligations cannot be fulfilled, the Company
agrees to reimburse the Underwriter for all out-of-pocket expenses (including
the fees and expenses of their counsel) reasonably incurred by such Underwriter
in connection with this Agreement or the offering of Certificates.
10. This Agreement shall inure to the benefit of and be binding upon the
Company, the Underwriter, any controlling persons referred to herein and their
respective successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be
-11-
<PAGE>
construed to give any other person, firm or corporation any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
herein contained. No purchaser of Certificates from the Underwriter shall be
deemed to be a successor by reason merely of such purchase.
11. All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given if mailed or transmitted and
confirmed by any standard form of telecommunication. Notices to the Underwriter
shall be given at the address set forth on the first page hereof. Notices to the
Company shall be given to it at Southpoint Structured Assets, Inc., 50 North
Front Street, Memphis, Tennessee 38103, (fax: 901-579-4363); Attention: C. David
Ramsey.
-12-
<PAGE>
12. This Agreement may be signed in counterparts, each of which shall be
an original and all of which together shall constitute one and the same
instrument. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without giving effect to the conflicts of
laws provisions thereof.
Very truly yours,
Southpoint Structured Assets, Inc.
By
---------------------------------
C. David Ramsey
President
Accepted: November 21, 1996
By: Morgan Keegan & Company, Inc.
By
--------------------------------
Jere S. McGuffee
First Vice President
-13-
<PAGE>
Schedule I
Underwriting Agreement
dated: November 21, 1996
Registration Statement No.: 333-09883
Title of Certificates: Treasury Security-Backed Certificates, Series
1996-1 $5,000,000 6.25% Class A Certificates due
August 15, 2002 $5,000,000 6.80% Class B
Certificates due May 15, 2006
Underlying Securities: $5,000,000 6.375% United States Treasury Note due
August 15, 2002 subject to the Class A Call Warrant
and exclusive of the Class A Retained
Interest. $5,000,000 6.875% United States Treasury
Note due May 15, 2006 subject to the Class B Call
Warrant and exclusive of the Class B Retained
Interest
Aggregate Principal Amount: $5,000,000 Class A Certificates
$5,000,000 Class B Certificates
Price to Underwriter: Class A Certificates: $4,950,000 (99% of the
principal amount of the Class A Certificates, plus
accrued interest, if any, from November 27, 1996 to
the Closing Date) Class B Certificates: $4,937,500
(98.75% of the principal amount of the Class B
Certificates, plus accrued interest, if any, from
November 27, 1996 to the Closing Date)
Trust Agreement: Standard Terms for Trust Agreements, dated as of
November 1, 1996, as supplemented by the Series
Supplement, dated as of November 27, 1996, between
the Company and Bank One, West Virginia, N.A., as
Trustee
Maturity: Class A Certificates: August 15, 2002
Class B Certificates: May 15, 2006
Interest Rate: Class A Certificates: 6.25%
Class B Certificates: 6.80%
Interest Payment Dates: Class A Certificates: February 15 and August 15
Class B Certificates: May 15 and November 15
Early Termination
Provisions: Any Class of Certificates may be paid in full on
any date on or after May 15, 1997 in an amount
equal to par plus accrued interest
<PAGE>
Closing Date and Time of
Delivery: November 27, 1996, 11:00 a.m. (EST)
Closing Location: Offices of Chapman and Cutler, 111 West Monroe
Street, Chicago, Illinois 60603
I-2
<PAGE>
Exhibit A
[Chapman and Cutler Letterhead]
[Date]
Southpoint Structured Assets, Inc.
50 North Front Street
Memphis, Tennessee 38103
Morgan Keegan & Company, Inc.
Morgan Keegan Tower
50 North Front Street
Memphis, Tennessee 38103
New York Stock Exchange, Inc.
20 Broad Street
New York, New York 10005
Re: Southpoint Structured Assets, Inc.
Treasury Security-Backed Certificates, Series 1996-1
----------------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to Southpoint Structured Assets, Inc. (the
"Company") in connection with the issuance and sale of Treasury Security-Backed
Certificates, Series 1996-1, consisting of two classes designated as Class A
Certificates and Class B Certificates (collectively, the "Certificates")
pursuant to a Standard Terms for Trust Agreements, dated as of November 1, 1996
as supplemented by the Series Supplement, dated as of November 27, 1996 (the
"Trust Agreement"), between the Company and Bank One, West Virginia, N.A., as
trustee (the "Trustee").
The Class A Certificates will be issued by the Treasury Security-Backed
Trust, Series 1996-1, Class A (the "Class A Trust") and the Class B Certificates
will be issued by the Treasury Security-Backed Trust, Series 1996-1, Class B
(the "Class B Trust") both to be formed pursuant to the Trust Agreement (the
Class A Trust and the Class B Trust are collectively referred to herein as the
"Trusts"). The Class A Certificates will represent a fractional undivided
interest in the Class A Trust and the principal asset of the Class A Trust will
consist of a United States Treasury Note having an aggregate principal amount of
$5,000,000, a coupon of 6.375% and a maturity of August 15, 2002 (the "Class A
Treasury Note;"). The Class A Treasury Note will be deposited into the Class A
Trust by the Company subject to (i) the right of the holder of the Class A Call
Warrant to purchase the
<PAGE>
Class A Treasury Note on any date on or after May 15, 1997 (an "Early
Termination Date") at a price of par plus accrued interest to such Early
Termination Date (the "Liquidation Price") and (ii) the right of the holder of
the Class A Retained Interest to receive on each Class A Distribution Date from
payments received on the Class A Treasury Note, a distribution equal to .125%
per annum multiplied by the principal amount of the Class A Treasury Note. The
Class B Certificates will represent a fractional undivided interest in the Class
B Trust and the principal asset of the Class B Trust will consist of a United
States Treasury Note having an aggregate principal amount of $5,000,000, a
coupon of 6.875% and a maturity of May 15, 2006 (the "Class B Treasury Note").
The Class B Treasury Note will be deposited into the Class B Trust by the
Depositor subject to (i) the right of the holder of the Class B Call Warrant to
purchase the Class B Treasury Note on the Early Termination Date at the
Liquidation Price and (ii) the right of the holder of the Class B Retained
Interest to receive on each Class B Distribution Date from payments received on
the Class B Treasury Note, a distribution equal to .075% per annum multiplied by
the principal amount of the Class B Treasury Note. The Class A Treasury Note and
the Class B Treasury Note are collectively referred to herein as the "Underlying
Securities."
The Certificates are included in a Registration Statement on Form S-3 (File
No. 333-09883) filed by the Company with the Securities and Exchange Commission
(the "Commission") on August 9, 1996, as amended by Amendment No. 1 to
Registration Statement filed on October 1, 1996, Amendment No. 2 to Registration
Statement filed on October 21, 1996 and Amendment No. 3 to Registration
Statement filed on November 13, 1996 and declared effective on November 15, 1996
(as amended as of the date hereof, the "Registration Statement"), and were
offered by the prospectus dated November 15, 1996, as supplemented by the
prospectus supplement dated November 21, 1996 (together, the "Prospectus"),
filed with the Commission pursuant to Rule 424(b) of the rules and regulations
of the Commission under the Securities Act of 1933, as amended (the "Act").
The Company will cause the issuance of the Certificates to Morgan Keegan &
Company, Inc. (the "Underwriter") pursuant to an Underwriting Agreement, dated
November 21, 1996, between the Company and the Underwriter (the "Underwriting
Agreement"; the Trust Agreement and the Underwriting Agreement are collectively
referred to herein as the "Agreements"). Capitalized terms used but not defined
herein shall have the meanings set forth in the Agreements. This opinion letter
is rendered pursuant to Section 6(e) of the Underwriting Agreement.
In arriving at the opinion expressed below, we have examined and relied on
the following documents:
(a) executed copies of the Agreements;
(b) the Certificate of Incorporation and By-Laws of the Company;
(c) good standing certificate from the Secretary of State of the
State of Delaware concerning the Company;
A-2
<PAGE>
(d) resolutions adopted by the Board of Directors of the Company by
written unanimous consent, authorizing, among other things, the issuance of
the Certificates;
(e) the President's Certificate executed by the President of the
Company, authorizing, among other things, the issuance of the Certificates;
(f) the Registration Statement;
(g) the Prospectus;
(h) the forms of the Certificates; and
(i) the documents delivered by the Company on the Closing Date
pursuant to the Agreements.
In addition, we have examined and relied, as to factual matters, on the
representations of the Company in the Agreements and on originals or copies
certified or otherwise identified to our satisfaction of all such corporate
records of the Company and such other instruments and other certificates of
public officials, officers and representatives of the Company and the Trustee,
and we have made such investigations of law, as we have deemed appropriate as a
basis for the opinion expressed below.
Based upon such examination and having regard for legal considerations
which we deem relevant, we are of the following opinion:
1. The Registration Statement has become effective under the Act, and,
to our knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and not withdrawn, and no
proceedings for that purpose have been instituted or threatened under
Section 8(d) of the Act.
2. The Registration Statement, as of the date it became effective, and
the Prospectus, as of the date of the Prospectus Supplement, other than any
financial or statistical information contained therein as to which we
express no opinion, complied as to form in all material respects with the
requirements of the Act and the applicable rules and regulations
thereunder.
3. To our knowledge, there are no material contracts, indentures, or
other documents of a character required to be described or referred to in
either the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement other than those described or
referred to therein or filed as exhibits thereto.
4. The Certificates, when validly authorized, duly executed,
authenticated, issued and delivered in accordance with the Trust Agreement,
will be entitled to the benefits of the Trust Agreement.
A-3
<PAGE>
5. The statements set forth in the Prospectus under the headings
"Description of the Certificates" and "Description of the Trust Agreement,"
insofar as such statements purport to summarize certain provisions of the
Certificates and the Trust Agreement, are correct in all material respects.
The statements set forth in the Prospectus under the headings "Federal
Income Tax Consequences," and "ERISA Considerations," to the extent that
they constitute matters of federal law or legal conclusions with respect
thereto, while not purporting to discuss all possible consequences of
investment in the Certificates, are correct in all material respects with
respect to those consequences or matters that are discussed therein.
6. The Trust created by the Trust Agreement is not required to be
registered under the Investment Company Act of 1940, as amended.
7. The Company is duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware and
has the requisite power and authority, corporate or other, to own its
properties and conduct its business, as presently conducted by it, and to
enter into and perform its obligations under the Agreements and the
Certificates.
8. The Certificates have been duly authorized by the Board of
Directors of the Company.
9. The Trust Agreement has been duly qualified under the Trust
Indenture Act of 1939, as amended.
10. Each of the Agreements has been duly authorized, executed and
delivered by the Company and, upon due authorization, execution and
delivery by the other parties thereto, each will constitute a valid, legal
and binding agreement of the Company, enforceable against the Company in
accordance with its terms subject to: (1) limitations imposed by
bankruptcy, insolvency, reorganization, arrangement, moratorium or other
laws relating to or affecting the enforcement of creditors' rights
generally; (2) general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law; and (3)
rights to indemnification which may be limited by applicable law or
equitable principles or otherwise unenforceable as against public policy.
In addition, we have participated in conferences with your representatives
concerning the Registration Statement and the Prospectus and have considered the
matters required to be stated therein and the statements contained therein,
although we have not independently verified the accuracy, completeness or
fairness of such statements (except as described in paragraph 5 above). Based
upon and subject to the foregoing, nothing has come to our attention to cause us
to believe that the Registration Statement (excluding any exhibits filed
therewith), as of the date it became effective, contained an untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectus, as of the date of the Prospectus
A-4
<PAGE>
Supplement and as of the Closing Date, contained or contains an untrue statement
of a material fact or omitted or omits to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (it being understood
that we have not been requested to and we do not make any comment in this
paragraph with respect to the financial statements, schedules and other
financial and statistical information contained in the Registration Statement or
the Prospectus).
With your permission we have assumed the following: (a) the authenticity of
original documents and the genuineness of all signatures; (b) the conformity to
the originals of all documents submitted to us as copies; (c) the truth,
accuracy and completeness of the information, factual matters, representations
and warranties contained in the records, documents, instruments and certificates
we have reviewed; and (d) except as specifically covered in the opinions set
forth above, the due authorization, execution and delivery on behalf of the
respective parties thereto of documents referred to herein and the legal, valid
and binding effect thereof on such parties.
Whenever a statement herein is qualified by the phrase "to our knowledge,"
it is intended to indicate that, during the course of our representation of the
Company, no information that would give us current actual knowledge of the
inaccuracy of such statement has come to the attention of those attorneys
currently in this firm who have rendered legal services in connection with this
opinion letter. However, we have not undertaken any independent investigation to
determine the accuracy of any such statement, and any limited inquiry undertaken
by us during the preparation of this opinion letter should not be regarded as
such an investigation; no inference as to our knowledge of any matters bearing
on the accuracy of any such statement should be drawn from the fact of our
representation of the Company.
With respect to our opinion set forth in paragraph 2, in passing on the
form of Registration Statement and the Prospectus, we have necessarily assumed
the correctness and completeness of the statements made therein.
This opinion letter is solely for your benefit and may not be relied upon
or used by, circulated, quoted or referred to, nor may copies hereof be
delivered to, any other person without our prior written approval. We disclaim
any obligation to update this opinion letter for events occurring or coming to
our attention after the date hereof.
Respectfully submitted,
Chapman and Cutler
A-5
<PAGE>
Exhibit B
[Chapman and Cutler Letterhead]
[Date]
Southpoint Structured Assets, Inc.
50 North Front Street
Memphis, Tennessee 38103
Morgan Keegan & Company, Inc.
Morgan Keegan Tower
50 North Front Street
Memphis, Tennessee 38103
Re: Southpoint Structured Assets, Inc.
Treasury Security-Backed Certificates, Series 1996-1
____________________________________________________
Ladies and Gentlemen:
We have acted as special counsel to Southpoint Structured Assets, Inc. (the
"Company") in connection with the issuance and sale of Treasury Security-Backed
Certificates, Series 1996-1, consisting of two classes designated as Class A
Certificates and Class B Certificates (collectively, the "Certificates")
pursuant to a Standard Terms for Trust Agreements, dated as of November 1, 1996
as supplemented by the Series Supplement, dated as of November 27, 1996 (the
"Trust Agreement"), among the Company and Bank One, West Virginia, N.A., as
trustee (the "Trustee").
The Class A Certificates will be issued by the Treasury Security-Backed
Trust, Series 1996-1, Class A (the "Class A Trust") and the Class B Certificates
will be issued by the Treasury Security-Backed Trust, Series 1996-1, Class B
(the "Class B Trust") both to be formed pursuant to the Trust Agreement (the
Class A Trust and the Class B Trust are collectively referred to herein as the
"Trusts"). The Class A Certificates will represent a fractional undivided
interest in the Class A Trust and the principal asset of the Class A Trust will
consist of a United States Treasury Note having an aggregate principal amount of
$5,000,000, a coupon of 6.375% and a maturity of August 15, 2002 (the "Class A
Treasury Note"). The Class A Treasury Note will be deposited into the Class A
Trust subject to (i) the right of the holder of the Class A Call Warrant to
purchase the Class A Treasury Note on any date on or after May 15, 1997 (an
"Early Termination Date") at a price of par plus accrued interest to such Early
Termination Date (the "Liquidation Price") and (ii) the right of the holder of
the Class A Retained Interest to receive on each Class A Distribution Date from
payments received on the Class A Treasury Note, a distribution equal to .125%
<PAGE>
per annum multiplied by the principal amount of the Class A Treasury Note. The
Class B Certificates will represent a fractional undivided interest in the Class
B Trust and the principal asset of the Class B Trust will consist of a United
States Treasury Note having an aggregate principal amount of $5,000,000, a
coupon of 6.875% and a maturity of May 15, 2006 (the "Class B Treasury Note").
The Class B Treasury Note will be deposited into the Class B Trust subject to
(i) the right of the holder of the Class B Call Warrant to purchase the Class B
Treasury Note on the Early Termination Date at the Liquidation Price and (ii)
the right of the holder of the Class B Retained Interest to receive on each
Class B Distribution Date from payments received on the Class B Treasury Note, a
distribution equal to .075% per annum multiplied by the principal amount of the
Class B Treasury Note. The Class A Treasury Note and the Class B Treasury Note
are collectively referred to herein as the "Underlying Securities;". The Trustee
will hold legal title to the Underlying Securities and other assets of the
Trusts for the benefit of the related Class of Certificateholders, but will have
no power to reinvest proceeds attributable to the Underlying Securities or other
assets of the Trusts or to vary investments in the Trusts in any manner.
The Certificates are included in a Registration Statement on Form S-3 (File
No. 333-09883) filed by the Company with the Securities and Exchange Commission
(the "Commission") on August 9, 1996, as amended by Amendment No. 1 to
Registration Statement filed on October 1, 1996, Amendment No. 2 to Registration
Statement filed on October 21, 1996 and Amendment No. 3 to Registration
Statement filed on November 13, 1996 and declared effective on November 15, 1996
(as amended as of the date hereof, the "Registration Statement"), and were
offered by the prospectus dated November 14, 1996, as supplemented by the
prospectus supplement dated November 21, 1996 (together, the "Prospectus"),
filed with the Commission pursuant to Rule 424(b) of the rules and regulations
of the Commission under the Securities Act of 1933, as amended (the "Act").
The Company will cause the issuance of the Certificates to Morgan Keegan &
Company, Inc. (the "Underwriter") pursuant to an Underwriting Agreement, dated
November 21, 1996, between the Company and the Underwriter (the "Underwriting
Agreement"; the Trust Agreement and the Underwriting Agreement are collectively
referred to herein as the "Agreements"). Capitalized terms used but not defined
herein shall have the meanings set forth in the Agreements. This opinion letter
is rendered pursuant to Section 8(f) of the Underwriting Agreement.
In arriving at the opinion expressed below, we have examined and relied on
the following documents each of which we have assumed has been duly and validly
authorized, executed and delivered by all parties thereto other than the
Company:
(a) executed copies of the Agreements;
(b) the Prospectus;
(c) the forms of the Certificates; and
B-2
<PAGE>
(d) the documents delivered by the Company on the Closing Date
pursuant to the Agreements.
In addition, we have relied, as to factual matters, on the representations
of the Company in the Agreements and on originals or copies certified or
otherwise identified to our satisfaction of all such corporate records of the
Company and such other instruments and other certificates of public officials,
officers and representatives of the Company and the Trustee, without any
investigation thereof. However, we have made such investigations of law, as we
have deemed appropriate as a basis for the opinion expressed below. Our opinion
is subject to the qualification that facts different from those set forth in the
Agreements and all such instruments or certificates may affect or prevent us
from rendering an opinion as expressed herein.
Our opinion is based on current provisions of the Internal Revenue Code of
1986, as amended (the "Code"), the Treasury Regulations promulgated thereunder,
published pronouncements of the Internal Revenue Service, and case law, any of
which may be changed at any time with retroactive effect. Further, you should be
aware that opinions of counsel are not binding on the Internal Revenue Service
or the courts. We note that the Company has not requested a ruling from the
Internal Revenue Service as to the matters covered by our opinion. We express no
opinion either as to any matters not specifically covered by the following
opinion or as to the effect on the matters covered by this opinion of the laws
of any other jurisdictions. Additionally, we undertake no obligation to update
this opinion in the event there is either a change in the legal authorities,
facts, including the taking of any action by any party to any of the
transactions described in the Prospectus pursuant to any opinion of counsel as
required by any of the documents relating to such transactions, or documents on
which this opinion is based, or an inaccuracy in any of the representations or
warranties upon which we have relied in rendering this opinion.
On the basis of the foregoing and in reliance thereon and our consideration
of such other matters of fact and questions of law as we have deemed necessary,
and assuming continuing compliance with the Trust Agreement, we are of the
opinion that:
(i) subject to the qualifications referred to herein, for Federal
income tax purposes, each Trust create under the Trust Agreement will be
treated as a grantor trust under Subpart E, Part I, of Subchapter J of the
Code and not as an association taxable as a corporation under the Code, and
under Section 671 of the Code, each Certificateholder will be treated as
the owner of a pro rata interest in the property of the corresponding
Trust; and,
(ii) the applicable statements contained in the Prospectus Supplement,
under the caption "Federal Income Tax Consequences," while not purporting
to discuss all possible federal income tax consequences of an investment in
Certificates, is materially accurate with respect to those tax consequences
which are discussed.
We hereby consent to the filing of this opinion letter as an Exhibit to the
Registration Statement and to the references to our firm under the captions
"Federal Income Tax
B-3
<PAGE>
Consequences" and "Legal Opinions" in the Prospectus without admitting that we
are "experts" within the meaning of the Act, and the rules and regulations
thereunder, with respect to any part of the Registration Statement.
Respectfully submitted,
Chapman and Cutler
JDBerry/JMTrofa
B-4
<PAGE>
EXHIBIT C
[COUNSEL TO TRUSTEE LETTERHEAD]
, 199
-------- --
Southpoint Structured Assets, Inc.
50 North Front Street
Memphis, Tennessee 38103
Bank One, West Virginia, N.A.
707 Virginia Street East
Charleston, West Virginia 25301
Morgan Keegan & Company, Inc.
Morgan Keegan Tower
50 North Front Street
Memphis, Tennessee 38103
Ladies and Gentlemen:
We have acted as special counsel to Bank One, West Virginia, N.A. in its
capacity as trustee (the "Trustee") in connection with the issuance and sale by
the Company of Treasury Security-Backed Certificates, Series 1996-1 (the
"Certificates") pursuant to a Standard Terms for Trust Agreements, dated as of
November 1, 1996 as supplemented by the Series Supplement, dated as of November
26, 1996 (the "Trust Agreement"), among the Company and the Trustee. The
Certificates consist of two classes designated as Class A and Class B
Certificates. The Class A Certificates and the Class B Certificates are referred
to herein as the "Offered Certificates."
Based on the foregoing and subject to the qualifications and matters of
reliance set forth herein, it is our opinion that:
1. The Trustee is a national banking association duly organized,
validly existing and in good standing as a under the laws of the United
States of America, with full corporate and trust power and authority to
conduct its business and affairs as a Trustee.
2. The Trustee has full corporate power and authority to execute and
deliver the Trust Agreement and the Certificates and to perform its
obligations thereunder.
3. The Trustee has duly accepted the office of trustee under the Trust
Agreement.
<PAGE>
4. The Trustee has duly authorized, executed, issued and delivered the
Trust Agreement and has duly and validly authorized, executed, issued,
delivered and authenticated the Certificates as the Trustee.
5. The Trust Agreement constitutes the legal, valid and binding
agreements of the Trustee, enforceable against the Trustee in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws affecting the rights
of creditors generally and by general principles of equity and the
discretion of the court, regardless of whether such enforcement is
considered in a proceeding in equity or at law, and except as
enforceability may be determined according to or limited by the laws of
jurisdictions other than those specified below.
In rendering the foregoing opinion, we have assumed that the Trust
Agreement have been duly authorized, executed and delivered by the other parties
thereto and are valid, legal, binding and enforceable obligations of such
parties.
We express no opinion as to any matter other than as expressly set forth
above, and, in conjunction therewith, we specifically express no opinion as to
the status of the Certificates or the Trust Fund under any federal or state
securities laws, including, but not limited to, the Securities Act of 1933, as
amended, the Trust Indenture Act of 1939, as amended, and the Investment Company
Act of 1940, as amended.
This opinion is as of the date hereof and we undertake no, and disclaim
any, obligation to advise you of any change in any matter set forth herein. This
opinion has been furnished to you at your request in connection with the
transactions described herein, and it may not be relied upon by you for any
other purpose or by any other person without our prior written consent.
We are admitted to practice law under the laws of the State of West
Virginia and the opinion set forth above is limited to the laws of the State of
West Virginia and the laws of the United States of America.
Very truly yours,
[Counsel to the Trustee]
C-2
<PAGE>
EXHIBIT D
[COUNSEL TO THE UNDERWRITER LETTERHEAD]
, 199
------- --
Morgan Keegan & Company, Inc.
Morgan Keegan Tower
50 North Front Street
Memphis, Tennessee 38103
Re: Southpoint Structured Assets, Inc.
Treasury Security-Backed Certificates, Series 1996-1
----------------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to Morgan Keegan & Company, Inc. (the
"Underwriter") in connection with the sale by Southpoint Structured Assets,
Inc., a Delaware corporation (the "Company"), and the purchase by the
Underwriter pursuant to an underwriting agreement dated November 21, 1996 (the
"Underwriting Agreement") of certificates entitled Treasury Security-Backed
Certificates, Series 1996-1, Class A Certificates and Class B Certificates (the
"Certificates"). The Certificates are issued pursuant to a Standard Terms for
Trust Agreements, dated as of November 1, 1996, as amended by a Series
Supplement, dated as of November 27, 1996 (the "Trust Agreement") between the
Company and Bank One, West Virginia as trustee (the "Trustee"). The Class A
Certificates will be issued by the Treasury Security-Backed Trust, Series 1996-
1, Class A (the "Class A Trust") and the Class B Certificates will be issued by
the Treasury Security-Backed Trust, Series 1996-1, Class B (the "Class B Trust")
both to be formed pursuant to the Trust Agreement. The Class A Certificates will
represent a fractional undivided interest in the Class A Trust and the principal
asset of the Class A Trust will consist of a United States Treasury Note having
an aggregate principal amount of $5,000,000, a coupon of 6.375% and a maturity
of August 15, 2002 (the "Class A Treasury Note"). The Class A Treasury Note
will be deposited by the Company into the Class A Trust subject to (i) the right
of the holder of the Class A Call Warrant to purchase the Class A Treasury Note
on any date on or after May 15, 1997 (an "Early Termination Date") at a price of
par plus accrued interest to such Early Termination Date (the "Liquidation
Price") and (ii) the right of the holder of the Class A Retained Interest to
receive on each Class A Distribution Date from payments received on the Class A
Treasury Note, a distribution equal to .125% per annum multiplied by the
principal amount of the Class A Treasury Note. The Class B Certificates will
represent a fractional undivided interest in the Class B Trust and the principal
asset of the Class B Trust will consist of a United States Treasury Note having
an aggregate principal amount of $5,000,000, a coupon of 6.875% and a maturity
of May 15, 2006 (the "Class B
<PAGE>
Treasury Note"). The Class B Treasury Note will be deposited into the Class B
Trust by the Depositor subject to (i) the right of the holder of the Class B
Call Warrant to purchase the Class B Treasury Note on the Early Termination Date
at the Liquidation Price and (ii) the right of the holder of the Class B
Retained Interest to receive on each Class B Distribution Date from payments
received on the Class B Treasury Note, a distribution equal to .075% per annum
multiplied by the principal amount of the Class B Treasury Note (the "Class B
Interest Strip"). The Class A Treasury Note and the Class B Treasury Note are
collectively referred to herein as the "Underlying Securities." Capitalized
terms used, but not defined herein, shall have the meanings assigned to such
terms in the Trust Agreement.
The Certificates are included in a Registration Statement on Form S-3 (File
No. 333-09883) filed by the Company with the Securities and Exchange Commission
(the "Commission") on August 9, 1996, as amended by Amendment No. 1 to
Registration Statement filed on October 1, 1996, Amendment No. 2 to Registration
Statement filed on October 21, 1996 and Amendment No. 3 to Registration
Statement filed on November 13, 1996 and declared effective on November 15, 1996
(as amended as of the date hereof, the "Registration Statement"), and were
offered by the prospectus dated November 15, 1996, as supplemented by the
prospectus supplement dated November 21, 1996 (together, the "Prospectus"),
filed with the Commission pursuant to Rule 424(b) of the rules and regulations
of the Commission under the Securities Act of 1933, as amended (the "Act").
We have examined such documents and records as we deemed appropriate,
including the following:
1. Copy of the Certificate of Incorporation of the Company and all
amendments thereto, certified by the Secretary of State of the State of
Delaware to be a true and correct copy.
2. Copy of the By-Laws of the Company certified by the Secretary of
the Company to be a true and correct copy.
3. Certificate of the Secretary of State of the State of Delaware,
dated as of recent date, to the effect that the Company is in good standing
under the laws of the State of Delaware.
4. Copy of resolutions adopted by the Board of Directors of the
Company in connection with the authorization, issuance and sale of the
Certificates, certified by the Secretary of Company to be a true and
correct copy.
5. Officer's Certificate of the Company pursuant to Section 6(d) of
the Underwriting Agreement.
6. Signed copy of the Underwriting Agreement.
7. Signed copy of the Trust Agreement.
D-2
<PAGE>
8. Specimens of the Certificates.
9. Signed copies of the Company's registration statement (File No.
333-9883) on Form S-3 filed by the Company with the Securities and Exchange
Commission relating to Trust Certificates (the registration statement in
the form in which it became effective being hereinafter called the
"Registration Statement").
10. The final form of a prospectus dated November 15, 1996 (the
"Basic Prospectus").
11. The final form of a supplement dated November 21, 1996 to the
Basic Prospectus relating specifically to the Certificates (the "Prospectus
Supplement"; the Basic Prospectus and Prospectus Supplement are herein
collectively referred to as the "Prospectus.")
Based upon the foregoing, we are of the opinion that:
(a) The Registration Statement has become effective under the
Securities Act of 1933, as amended (the "Act"), and, to the best of our
knowledge and information, no proceedings for a stop order have been
instituted or are threatened under Section 8(d) of the Act.
(b) The Registration Statement as of its effective date and the
Prospectus as of the date of the Prospectus Supplement, other than the
numerical, financial and statistical data contained therein, as to which we
express no opinion, comply as to form in all material respects with the
requirements of the Act and the rules thereunder.
(c) The Underwriting Agreement has been duly and validly authorized,
executed and delivered by the Company.
(d) The Trust Agreement has been duly and validly authorized,
executed and delivered by the Company and, assuming that it has been duly
and validly authorized, executed and delivered by the other parties
thereto, constitutes a valid, legal and binding agreement of the Company,
enforceable against the Company in accordance with its terms subject to
bankruptcy, insolvency, reorganization or other similar laws affecting
creditors' rights generally and, as to enforceability, to general
principles of equity, regardless of whether such enforcement is considered
in a proceeding in equity or at law.
(e) The Certificates, assuming that they have been duly and validly
authorized, executed and issued by the Trustee, will, when authenticated as
specified in the Trust Agreement and delivered to the Underwriter pursuant
to the Underwriting Agreement, be entitled to the benefits of the Trust
Agreement.
D-3
<PAGE>
(f) Trust Fund is not required to be registered under the Investment
Company Act of 1940, as amended.
We have endeavored to see that the Registration Statement and the
Prospectus comply with the Act and the rules and regulations of the Securities
and Exchange Commission thereunder relating to registration statements on Form
S-3 and related prospectuses, but we cannot, of course, make any representation
to you as to the accuracy or completeness of statements of fact contained in the
Registration Statement or Prospectus. Nothing, however, has come to our
attention that would lead us to believe that the Registration Statement at the
time it became effective contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus as of the date
of the Prospectus Supplement and at the date hereof contained or contains an
untrue statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (other than the numerical, financial
and statistical data contained in the Registration Statement or the Prospectus,
as to which we express no opinion).
This opinion is for your benefit only and is not to be relied upon by any
other person.
Respectfully submitted,
Chapman and Cutler
D-4
<PAGE>
Exhibit E
Underwriter Information
The text set forth in the Prospectus Supplement under the heading "Plan of
Distribution" and in the second paragraph therein.
<PAGE>
Exhibit 4.1
================================================================================
Standard Terms For Trust Agreements
between
Southpoint Structured Assets, Inc.,
as Depositor
and
Bank One, West Virginia, N.A.,
as Trustee
Trust Certificates
dated as of November 1, 1996
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
HEADING DESCRIPTION PAGE
<S> <C> <C>
Preliminary Statement.............................................................................................. 1
Article I Definitions and Assumptions......................................................................... 1
Section 1.01. Definitions...................................................................................... 1
Section 1.02. Rules of Construction............................................................................ 15
Section 1.03. Compliance Certificates and Opinions; Record Date................................................ 16
Article II Declaration of Trusts; Issuance of Certificates; Purpose and Classification of Trusts............... 17
Section 2.01. Creation and Declaration of Trusts: Assignment of Underlying Securities.......................... 17
Section 2.02. Acceptance by Trustee............................................................................ 19
Section 2.03. Representations and Warranties of the Depositor.................................................. 19
Section 2.04. Breach of Representation, Warranty or Covenant................................................... 20
Section 2.05. Agreement to Authenticate and Deliver Certificates............................................... 20
Article III Administration of each Trust........................................................................ 20
Section 3.01. Administration of each Trust..................................................................... 20
Section 3.02. Collection of Certain Underlying Security Payments............................................... 21
Section 3.03. Certificate Account.............................................................................. 21
Section 3.04. Liquidation of the Underlying Securities......................................................... 22
Section 3.05. Investment of Funds in the Accounts.............................................................. 22
Section 3.06. Maintenance of Credit Support.................................................................... 23
Section 3.07. Realization Upon Defaulted Underlying Securities................................................. 23
Section 3.08. Retained Interest................................................................................ 24
Section 3.09. Access to Certain Documentation.................................................................. 24
Section 3.10. Reports by the Depositor......................................................................... 24
Section 3.11. Charges and Expenses............................................................................. 25
Article IV Distributions and Reports to Certificateholders..................................................... 25
Section 4.01. Distributions.................................................................................... 25
Section 4.02. Distributions on Certificates.................................................................... 26
Section 4.03. Reports to Certificateholders.................................................................... 27
Section 4.04. Advances......................................................................................... 28
Section 4.05. Allocation of Realized Losses and Trust Expenses................................................. 29
Section 4.06. Compliance with Withholding Requirements......................................................... 29
Article V The Certificates.................................................................................... 30
Section 5.01. The Certificates................................................................................. 30
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C>
Section 5.02. Execution, Authentication and Delivery........................................................... 30
Section 5.03. Temporary Certificates........................................................................... 31
Section 5.04. Registration; Registration of Transfer and Exchange.............................................. 32
Section 5.05. Mutilated, Destroyed, Lost and Stolen Certificates............................................... 34
Section 5.06. Persons Deemed Owners............................................................................ 35
Section 5.07. Cancellation..................................................................................... 35
Section 5.08. Global Securities................................................................................ 36
Section 5.09. Notices to Depository............................................................................ 37
Section 5.10. Definitive Certificates.......................................................................... 37
Section 5.11. Conditions of Authentication and Delivery of New Series.......................................... 37
Section 5.12. Appointment of Paying Agent...................................................................... 38
Section 5.13. Authenticating Agent............................................................................. 39
Section 5.14. Voting Rights with Respect to Underlying Securities.............................................. 40
Section 5.15. Actions by Certificateholders.................................................................... 41
Section 5.16. Events of Default................................................................................ 42
Section 5.17. Judicial Proceedings Instituted by Trustee; Trustee May Bring Suit............................... 42
Section 5.18. Control by Certificateholders.................................................................... 42
Section 5.19. Waiver of Past Defaults.......................................................................... 42
Section 5.20. Right of Certificateholders to Receive Payments Not to Be Impaired............................... 43
Section 5.21. Remedies Cumulative.............................................................................. 43
Article VI The Depositor....................................................................................... 43
Section 6.01. Liability of the Depositor....................................................................... 43
Section 6.02. Limitation on Liability of the Depositor......................................................... 43
Section 6.03. Depositor May Purchase Certificates.............................................................. 44
Section 6.04. Merger or Consolidation of the Depositor......................................................... 44
Section 6.05. No Liability of the Depositor with Respect to the Underlying Securities.......................... 45
Article VII Concerning the Trustee.............................................................................. 45
Section 7.01. Duties of Trustee................................................................................ 45
Section 7.02. Between Trustee and Sub-Administrative Agents.................................................... 48
Section 7.03. Certain Matters Affecting the Trustee............................................................ 49
Section 7.04. Trustee Not Liable for Recitals in Certificates or Underlying Securities......................... 50
Section 7.05. Trustee May Own Certificates..................................................................... 50
Section 7.06. Trustee's Fees and Expenses...................................................................... 51
Section 7.07. Eligibility Requirements for Trustee............................................................. 52
Section 7.08. Resignation or Removal of the Trustee; Appointment of Successor Trustee.......................... 52
Section 7.09. Appointment of Office or Agency.................................................................. 53
Section 7.10. Representations and Warranties of Trustee........................................................ 54
Section 7.11. Indemnification of Trustee by the Depositor; Contribution........................................ 55
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C>
Section 7.12. No Liability of the Trustee with Respect to the Underlying Securities; Certificateholders to
Proceed Directly Against the Underlying Securities Issuer(s)..................................... 56
Section 7.13. The Depositor To Furnish Trustee with Names and Addresses of Certificateholders.................. 56
Section 7.14. Preservation of Information...................................................................... 56
Section 7.15. Reports by Trustee............................................................................... 57
Section 7.16. Trustee's Application for Instructions from the Depositor........................................ 57
Article VIII Market Agent........................................................................................ 57
Section 8.01. Market Agent..................................................................................... 57
Article IX Termination......................................................................................... 58
Section 9.01. Termination of Trust............................................................................. 58
Article X Miscellaneous Provisions............................................................................ 58
Section 10.01. Amendment........................................................................................ 58
Section 10.02. Limitation on Rights of Certificateholders....................................................... 60
Section 10.03. Governing Law.................................................................................... 61
Section 10.04. Notices.......................................................................................... 61
Section 10.05. Notice to Rating Agencies........................................................................ 61
Section 10.06. Severability of Provisions....................................................................... 62
Section 10.07. Grant of Security Interest....................................................................... 62
Section 10.08. Nonpetition Covenant............................................................................. 63
Section 10.09. No Recourse...................................................................................... 64
Section 10.10. Article and Section References................................................................... 64
Section 10.11. Counterparts..................................................................................... 64
Section 10.12. Trust Indenture Act Controls..................................................................... 64
</TABLE>
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<PAGE>
Standard Terms for Trust Agreements, dated as of November 1, 1996, between
Southpoint Structured Assets, Inc., a Delaware corporation, as Depositor, and
Bank One, West Virginia, N.A., a national banking association, as Trustee.
Preliminary Statement
The Depositor and the Trustee 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) of
Certificates will be issued only under a separate Series Supplement to these
Standard Terms, duly executed and delivered by the Depositor and the Trustee.
With respect to each Series, the applicable Series Supplement, together with
these Standard Terms, shall be known as the "Trust Agreement."
All representations, covenants and agreements made herein by each of the
Depositor and the Trustee are for the benefit and security of the
Certificateholders and, to the extent provided in the applicable Series
Supplement, for the benefit and security of any Credit Support Provider or any
other party as specified therein;
The Depositor is entering into these Standard Terms, and the Trustee in
accepting the trusts 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 Series 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 Series 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
<PAGE>
any specified Person, means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing."
"Authenticating Agent." As defined in Section 5.13.
"Authorized Newspaper." A newspaper in an official language of the country
of publication customarily published at least once a day, and customarily
published for at least five days in each calendar week, and of general
circulation in such city or cities specified pursuant to Section 5.01 with
respect to the Certificates of any Series. Where successive publications are
required to be made in Authorized Newspapers, the successive publications may be
made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any Business Day in such city.
"Available Funds." Unless otherwise specified in the applicable Series
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 on amounts in
the Accounts) 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 Series Supplement.
"Basic Documents." With respect to any Series, if applicable, as defined
in the related Series Supplement.
"Beneficial Owner." Shall mean, with respect to Certificates held through
a Depository, the beneficial owner of a Certificate. For purposes only of
Section 5.15, 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 Series 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.
"Business Day." With respect to any Place of Distribution specified
pursuant to Section 5.01, any day that is not a Saturday, a Sunday or a legal
holiday or a day on which banking institutions or trust companies in such Place
of Distribution are authorized or obligated by law, regulation or executive
order to close or any day which is not a Business Day with respect to the
Underlying Securities, except as otherwise specified pursuant to Section 5.01
and any Business Day specified with respect to the Underlying Securities.
-2-
<PAGE>
"Call Premium Percentage." With respect to any Series (or Class with such
Series), if applicable, as defined in the related Series Supplement.
"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 Series Supplement), as of any date of determination, shall be equal to
the aggregate initial Certificate Principal Balance thereof less the sum of (i)
all amount allocable to prior distributions made to such Class in respect to
principal of the Underlying Securities, and (ii) 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 Series Supplement, each as allocated to such Class pursuant to
the applicable Series Supplement.
"Certificate Register" and "Certificate Registrar." As respectively defined
in Section 5.04.
"Certificateholder." Any Holder of a Certificate.
"Certificates." Any trust certificates authorized by, and authenticated and
delivered under, this Trust Agreement.
"Class." With respect to any Series, any one of the classes of Certificates
of such Series, each consisting of Certificates having identical terms.
"Clearing Agency." An organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act.
"Closing Date." With respect to any Series, the day on which Certificates
of such Series are first executed, authenticated and delivered.
"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 Series
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.
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<PAGE>
"Corporate Trust Office." The principal corporate trust office of the
Trustee located at the address set forth in the related Series Supplement or
such other addresses 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." With respect to any Series (or any Class within such
Series), a letter of credit, surety bond, swap agreement, put or call option or
other asset intended to support or ensure the timely or ultimate distributions
of amounts due in respect of all or certain of the Underlying Securities for
such Series or Class, which in each case is specified as such in the related
Series Supplement.
"Credit Support Instrument." The instrument or document pursuant to which
the Credit Support for a given Series (or any Class within such Series) is
provided, as specified in the applicable Series Supplement.
"Credit Support Provider." With respect to any Series (or any Class with
such Series), the Person, if any, that will provide any Credit Support with
respect to all or a portion of the Underlying Securities for such Series or
Class as specified in the applicable Series Supplement.
"Cut-off Date." With respect to any Series, the date specified as such in
the related Series 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.
"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 designated as Depository by the Depositor pursuant
to Section 5.01 until a successor Depository shall have become such pursuant to
the applicable provisions of this Trust Agreement, and thereafter "Depository"
shall mean or include each Person who is then a Depository hereunder, 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.
"Depositor." Southpoint Structured Assets, 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 provisions of this Trust Agreement that
relate to the provisions of the Trust Indenture Act,
-4-
<PAGE>
"Depositor" shall include any obligor on the Certificates as the term obligor is
defined in the Trust Indenture Act.
"Depositor Order" or "Depositor Request." A written order or request,
respectively, signed in the name of the Depositor by its President, Treasurer or
Secretary.
"Depository Agreement." If applicable, the agreement pursuant to which the
Depository will agree to act as Depository with respect to any Series (or Class
within such Series) of Certificates in accordance with Section 5.08.
"Discount Certificate." Any Certificate that reflects "original issue
discount" within the meaning of Section 1273(a) of the Code with respect to an
Underlying Security.
"Distribution Date." With respect to any Series (or Class within such
Series) of Certificates, each date specified as a "Distribution Date" for such
Series (or Class) in the related Series Supplement.
"Dollar" or "$". 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 debt 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 Series 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 Series Supplement, any one or more of the following
obligations or securities as directed in writing by the Depositor; 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 at the time of purchase the
symbol "R" 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 of America; 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, it has the rating specified in such Series Supplement
for Eligible Investments;
-5-
<PAGE>
(ii) demand and time deposits in, certificates of deposit of, or
banker's acceptances issued by any depository institution or trust company
(including the Trustee or any agent of the Trustee acting in their
respective commercial capacities) incorporated under the laws of the United
States or any State and subject to supervision and examination by Federal
and/or State banking authorities so long as the commercial paper and/or the
short-term debt obligations of such depository institution or trust company
(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 Series Supplement for Eligible Investments; provided,
however, that such rating shall be no lower than the rating on the
Underlying Securities at the time of purchase of the investments;
(iii) repurchase agreements with respect to (a) any security described
in clause (i) above or (b) any other security issued or guaranteed by an
agency or instrumentality of the United States, with an entity having the
credit rating specified in such Series Supplement for Eligible Investments;
(iv) 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 Series 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 rating on the Underlying Securities; 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;
(v) commercial paper having at the time of such investment the rating
specified in the Series Supplement for Eligible Investments;
(vi) money market mutual funds registered under the Investment Company
Act of 1940, as amended, having at the time of such investment a rating
from each of the Rating Agencies in the highest investment category granted
thereby; and
(vii) a Guaranteed Investment Contract if and only if specified in the
related Series Supplement, provided that the Rating Agency Condition is
met.
"Event of Default." With respect to any Series (or Class within such
Series) of Certificates, as specified in the related Series Supplement.
"Exchange Act." The Securities Exchange Act of 1934, as amended.
-6-
<PAGE>
"Extraordinary Trust Expense." Unless otherwise specified in the related
Series Supplement, 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.
"Final Scheduled Distribution Date." With respect to any Certificate, the
date on which all the unpaid principal of (and premium, if any, on) such
Certificate is scheduled, without giving effect to any prepayment or early
termination, to become due and payable as provided therein and in the applicable
Series Supplement.
"Fixed Pass-Through Rate." With respect to any Fixed Rate Certificate, as
defined in the related Series 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 Series 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 pursuant to Section 5.01 and the related Series Supplement.
"Global Security." A Registered Certificate evidencing all or part of a
Series (or Class within such Series) of Certificates, issued to the Depository
for such Series or Class in accordance with Section 5.08 and bearing the legend
prescribed therein.
"Grant." To sell, convey, assign, transfer, create, grant a lien upon and a
security interest in and right of set-off against, deposit, set over and confirm
to the Trustee pursuant to these Standard Terms and a related Series Supplement;
and the terms "Granted" and "Granting" have the meanings correlative to the
foregoing. A Grant of any Underlying Securities or of any other instrument shall
include all rights, powers and options (but none of the obligations) of the
Granting party thereunder, 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 such Underlying Securities and all other moneys
payable thereunder, to give and receive notices and other communications, to
make waivers or other agreements, to exercise all rights and options, to bring
Proceedings in the name of the Granting party or otherwise, and generally to do
and receive anything that the Granting party is or may be entitled to do or
receive thereunder or with respect thereto.
"Guaranteed Investment Contract." With respect to any Series (or Class
within such Series), a guaranteed investment contract or surety bond provided
for in the related Series Supplement, Granted as part of the Trust or to the
Trustee for the benefit of the Certificateholders for such Series, providing for
the investment of funds in a related Account or related Accounts and insuring a
minimum or a fixed rate of return on the
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investment of such funds, which contract or surety bond shall be an obligation
of an insurance company or other entity whose rating is no lower than the rating
on the Underlying Securities and shall satisfy any other requirements specified
in such Series Supplement.
"Holder." With respect to a Registered Certificate, the Registered Holder
thereof.
"Independent." When used with respect to any specified Person means that
the 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 as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
"Initial Accrued Interest." With respect to any Series, shall mean, with
respect to each Underlying Security, the amount of interest which accrued
thereon from the Underlying Security Interest Payment Date of such Underlying
Security next preceding the deposit of such Underlying Security hereunder (or,
in the event that such Underlying Security Interest Payment Date is the first
Underlying Security Interest Payment Date to occur after the original issuance
of such Underlying Security, from the dated date thereof) to, but excluding, the
Cut-off Date.
"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 Series Supplement.
"Limited Guarantor." With respect to the Underlying Securities relating to
any series (or Class within such Series), a Person specified in the related
Series Supplement as providing a guarantee or insurance policy or other credit
enhancement supporting the distributions in respect of such Series (or Class) as
and to the extent specified in such Series 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 Series Supplement.
"Liquidation Proceeds." The amounts received by the Trustee in connection
with (i) the liquidation of a defaulted Underlying Security or collateral, if
any, related thereto or (ii) the repurchase, substitution or sale of a
Underlying Security.
"Market Agent." Shall mean the market agent or market agents appointed
pursuant to Section 8.01, and its or their successors or assigns.
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"Market Agent Agreement." With respect to any Series shall mean the Market
Agent Agreement, dated as of the Closing Date, between the Trustee and the
Market Agent, the form of which will be attached to the Series Supplement, and
any similar agreement with a successor Market Agent, in each case as from time
to time amended or supplemented.
"Moody's." Shall mean 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 Series
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
Series Supplement.
"Officer's Certificate." A certificate signed by anyone (or, if specified
in these Standard Terms or any Series 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.
"Ordinary Expenses." The Trustee's customary fee for its services as
Trustee, 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 routing 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 authenticated and delivered under these Standard Terms and the
related Series Supplement except:
(i) Certificates theretofore cancelled by the Certificate Registrar or
delivered to the Certificate Registrar for cancellation; and
(ii) Certificates in exchange for or in lieu of which other
Certificates have been 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;
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provided, however, that in determining whether the Holders of the required
percentage of the aggregate Voting Rights of the Certificates have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Certificates beneficially owned by the Depositor, the Trustee, or any Affiliate
thereof shall be disregarded and deemed not to be Outstanding, and the Voting
Rights to which its Holder would otherwise be entitled 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 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 and that the pledgee is not, to the knowledge of the Trustee, the
Depositor, or any Affiliate of any thereof. The principal amount or notional
amount, as applicable, of a Discount Certificate that shall be deemed to be
Outstanding for the definition referred to in the foregoing proviso shall be the
Certificate Principal Balance or Certificate Notional Amount, as applicable,
with respect thereto as of the date of such determination.
"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) of Certificates (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 Series Supplement.
"Paying Agent." As defined in Section 5.12.
"Percentage Interest." With respect to a Certificate of any Series or Class
within a Series, the portion of such Series or Class evidenced by such
Certificate, expressed as a percentage, equal to the product of (x) a fraction,
the numerator of which is the initial Certificate Principal Balance or Notional
Amount, as applicable, represented by such Certificate and the denominator of
which is the aggregate initial Certificate Principal Balance or Notional Amount,
as applicable, of all the Certificates of such Series or Class and (y) 100.
"Person." Any individual, corporation, partnership, joint venture,
association, joint stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or political subdivision
thereof.
"Place of Distribution." With respect to any Series (or Class within such
Series) of Certificates, the place or places where the principal of (and
premium, if any) and interest on
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the Certificates or such Series (or Class) are distributable as specified
pursuant to Section 5.01.
"Predecessor Certificate." With respect to any particular Certificate,
every previous Certificate evidencing all or a portion of the same interest as
that evidenced by such particular Certificate; and for the purpose of this
definition, any Certificate authenticated and delivered under Section 5.05 in
lieu of a lost, destroyed or stolen Certificate shall be deemed to evidence the
same interest as the lost, destroyed or stolen Certificate.
"Prepaid Ordinary Expenses." Unless otherwise specified in the Series
Supplement, 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
Series 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 rating organization specified in the related Series
Supplement that initially rates the Certificates of such Series (or Class).
"Rating Agency Condition." With respect to any action or occurrence, unless
otherwise specified in the applicable Series Supplement, that each Rating Agency
shall have been given 10 days (or such shorter period acceptable to each Rating
Agency) prior 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 Losses." With respect to any defaulted and liquidated Underlying
Security, the excess, if any, of (x) the principal amount of such Underlying
Security plus accrued and unpaid interest thereon, plus expenses incurred by the
Trustee in connection with the practices and procedures referred to in Section
3.07(b) to the extent reimbursable under these Standard Terms and the related
Series Supplement, over (y) Liquidation Proceeds with respect thereto.
"Record Date." With respect to any Distribution Date for any Series (or
Class within such Series) of Registered Certificates, the date specified in the
related Series Supplement.
"Registered Certificate." Any Certificate registered as to principal,
premium, if any, and interest in the Certificate Register.
"Registered Holder." The Person in whose name a Registered Certificate is
registered in the Certificate Register on the applicable Record Date.
"Required Interest." Unless otherwise specified in the related Series
Supplement, with respect to the Outstanding Certificates of any Series or any
Class thereof, the accrued and
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undistributed interest on the Certificate Principal Balance or Notional Amount
of such Outstanding Certificates, computed at the applicable Pass-Through Rate.
"Required Percentage-Amendment." Unless otherwise specified in the related
Series Supplement, if a Rating Agency Condition is specified in the related
Series Supplement and such Rating Agency Condition is met, or, if a Rating
Agency Condition is not so specified in the related Series Supplement, 66-2/3%
of the aggregate Voting Rights of Certificates of such Series, and 100%
otherwise.
"Required Percentage-Definitive Certificates." Unless otherwise specified
in the related Series Supplement, 66-2/3% of the aggregate Voting Rights of
Certificates of such Series.
"Required Percentage-Direction of Trustee." Unless otherwise specified in
the related Series Supplement, 66-2/3% of the aggregate Voting Rights of
Certificates of such Series.
"Required Percentages--Remedies." Unless otherwise specified in the related
Series Supplement, 66-2/3% of the aggregate Voting Rights of Certificates of
such Series.
"Required Percentage--Removal of Trustee." Unless otherwise specified in
the related Series Supplement, more than 50% of the aggregate Voting Rights of
Certificates of such Series.
"Required Percentage--Waiver." Unless otherwise specified in the related
Series Supplement, 75% of the aggregate Voting Rights of Certificates of such
Series.
"Required Premium." If applicable, unless otherwise specified in the
related Series Supplement, with respect to the Certificates of any Series or any
Class thereof, an amount equal to the product, as determined on any Distribution
Date with respect to such Series and Class, of (i) the Required Principal for
such Series and Class and (ii) the Call Premium Percentage for such Series and
Class.
"Required Principal." As determined for any Distribution Date for a given
Series (or Class within such Series), unless otherwise specified in the related
Series 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 Series
Supplement.
"Required Rating." With respect to any Series (or Class within such
Series), the rating category (or categories) specified in the Series Supplement
that, as a condition to the issuance of such Series or Class, is (or are) the
lowest category (or categories) in which the Certificates of such Series or
Class may be categorized at the time of purchase by the Rating Agency.
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"Requisite Reserve Amount." As of any date with respect to any Series (or
Class within such Series) of Certificates, 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 Series 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 of the Trustee, including any Vice President, Assistant
Vice President, Assistant Treasurer 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 Series Supplement,
held by the Person so specified in such Series Supplement.
"Sale Procedures." Unless otherwise specified in the Series Supplement,
shall mean that, with respect to any sale of one or more Underlying Securities,
the Market Agent, on behalf of the Trust, shall sell such Underlying Security or
Underlying Securities to the highest bidders among not less than two solicited
bidders for such Underlying Securities (one of which bidders may include Morgan
Keegan & Company, Inc. or any affiliate thereof; provided, however, that neither
Morgan Keegan & Company, Inc. 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, a portion of the Underlying
Securities or all of the Underlying Securities being sold or any other basis
selected in good faith by the Market Agent.
"S&P." Shall mean Standard & Poor's, a division of The McGraw-Hill
Companies, Inc. and any successor thereof.
"Series." A separate series of Certificates issued pursuant to these
Standard Terms and a related Series Supplement, which series may be divided into
two or more Classes, as provided in such Series Supplement.
"Series Supplement." An agreement incorporating these Standard Terms that
authorizes the issuance of a particular Series (and each Class within such
Series) of Certificates.
"Sub-Administration Account." As defined in Section 7.02.
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"Sub-Administration Agreement." The written contract, if any, between the
Trustee and a Sub-Administrative Agent and any successor Trustee or Sub-
Administrative Agent relating to the administration of certain Underlying
Securities as provided in Section 7.02.
"Sub-Administration Agent." Any Person with which the Trustee has entered
into a Sub-Administration Agreement and which meets the qualifications of a Sub-
Administrative Agent pursuant to Section 7.02.
"Surety Bond." If so specified in the Series Supplement, with respect to
any Series (or Class within such Series) of Certificates, the surety bond
providing for the distribution under certain circumstances specified in such
Series 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 Series Supplement.
"Swap Agreement." If so specified in the Series Supplement, with respect to
any Series, shall mean 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 herein and therein.
"Swap Counterparty." If so specified in the Series Supplement, with respect
to any Series, shall be specified in the Series Supplement.
"Swap Distribution Amount." If so specified in the Series Supplement, with
respect to any Series, shall mean 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 Series Supplement, with respect to
any Series, shall mean, the Guarantee issued by the Swap Guarantor in favor of
the Trust.
"Swap Guarantor." If so specified in the Series Supplement, with respect to
any Series, shall be specified in the Series Supplement.
"Swap Receipt Amount." If so specified in the Series Supplement, with
respect to any Series, shall mean 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 Series Supplement, with
respect to any Series, means the amount payable by the Swap Counterparty to the
Trust, or by the Trust to the Swap Counterparty, pursuant to Section 6(e) of the
Swap Agreement.
"Trust." With respect to any Series, the segregated asset or pool of assets
subject hereto, constituting the trust created hereby and by the related Series
Supplement and to be administered hereunder and thereunder, consisting of those
Underlying Securities and the Credit Support, if applicable, and all sums
distributed in respect thereof that are specified as
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being part of the Trust for such Series in the related Series Supplement, all
for the benefit of the Certificateholders of such Series as of any particular
time.
"Trust Agreement." With respect to each Series of Certificates, these
Standard Terms and all amendments hereof and, unless the context otherwise
requires, the related Series Supplement and all amendments thereto.
"Trustee." With respect to any Series, the Person so specified in the
applicable Series Supplement, until a successor Person shall have become the
Trustee pursuant to the applicable provisions of these Standard Terms and the
applicable Series Supplement, and thereafter "Trustee" shall mean such successor
Person.
"Trust Indenture Act." The Trust Indenture Act of 1939, as amended, as the
same is in force and effect as of the date hereof.
"Underlying Securities Issuer." Shall mean, with respect to an Underlying
Security, the issuer thereof (including, if applicable, the guarantor of the
Underlying Security) as identified in Schedule I to the Series Supplement.
"Underlying Security" or "Underlying Securities." With respect to any
Series, the asset or assets Granted as part of the Trust for such Series or
acquired (or, in the case of an agreement, entered into) by the Trustee for the
benefit of the Holders of such Series, and, if and to the extent provided in the
applicable Series Supplement, for the benefit of any Credit Support Provider,
all as identified in the Schedule I to the related Series Supplement. The
Underlying Securities for any such Series or the related Trust shall not
constitute Underlying Securities for any other Series or any other Trust.
"Underlying Security Interest Payment Date." Shall mean, with respect to an
Underlying Security, each date specified in Schedule I to the Series Supplement
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.
"Uniform Commercial Code." The Uniform Commercial Code as in effect in the
relevant jurisdiction or, with respect to the State of Louisiana, the equivalent
body of statutory and common law.
"United States." The United States of America (including the States), its
territories, its possessions and other areas subject to its jurisdiction.
"Voting Rights." With respect to any Series (or Class within such Series)
of Certificates, the portion of the aggregate voting rights of the Certificates
of such Series or Class which shall be allocated to any Certificate as specified
in the applicable Series Supplement.
Section 1.02. Rules of Construction. Unless the context otherwise requires:
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(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 this Trust Agreement (other than a certificate provided
pursuant to Section 3.10(d)) shall include:
(1) a statement that the individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) 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;
(3) 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
(4) a statement as to whether, in the opinion of such individual,
such condition or covenant has been complied with.
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(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 of any
subclass of Certificates entitled to give any consent, request, demand,
authorization, direction, notice, waiver or other act. Notwithstanding Section
316(c) of the Trust Indenture Act, 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 of Certificates of the
applicable subclass at the close of business on such record date shall be deemed
to be Certificateholders of such subclass for the purposes of determining
whether Holders of the requisite aggregate amount of Outstanding Certificates of
such subclass have authorized or agreed or consented to such consent, request,
demand, authorization, direction, notice, waiver or other act, and for that
purpose the aggregate amount of the Outstanding Certificates of such subclass
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 of Certificates of such subclass on such record date shall be
deemed 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 Underlying
Securities. (a) The Depositor, concurrently with the execution and delivery
hereof, does hereby agree to Grant to the Trustee, on behalf and for the benefit
of the Certificateholders of each given Series of Certificates 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 attributable to each such Series (except for the
Underlying Securities attributable to such Series which are not Granted by the
Depositor, as specified in Schedule I to the applicable Series Supplement), now
existing or hereafter acquired, in each case as identified on the applicable
Schedule I, and all other assets included or to be included in the respective
Trust for the benefit of the Certificateholders of each such Series. Each such
Grant will include all interest, premium (if any) and principal received by or
on behalf of the Depositor of, on or with respect to any such Underlying
Securities due after the applicable Cut-off Date, and, unless otherwise
specified in the Series Supplement, will exclude (i) all interest, premium (if
any) and principal of, on or with respect to any such Underlying Securities due
on or before the applicable Cut-off Date and (ii) any Retained Interest in any
such Underlying Security.
(b) In connection with each Grant referred to in the preceding paragraph,
the Depositor shall, not later than the applicable Closing Date, either (i)
deposit the Underlying Securities for a given Series with the Trustee by
physical delivery of such Underlying Securities, duly endorsed, to the Trustee
or (ii) have delivered such Underlying Securities to
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a Clearing Agency, in which event (A) the Trustee has accepted delivery of such
Underlying Securities through such Clearing Agency, and (B) the Underlying
Securities have been credited to a trust account of the Trustee, or its
authorized agent, and the Trustee 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) The Grant of such Underlying Securities by the Depositor for a given
Series accomplished hereby and by such Series Supplement is absolute and is
intended by the parties hereto as a sale.
(d) In the case of each delivery of Underlying Securities to the Trustee,
the Depositor shall be deemed thereby to represent and warrant to the Trustee
that:
(i) the Depositor is duly authorized to so deliver such 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; 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
of a Certificate;
The above representations and warranties shall survive the delivery of such
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 best of its knowledge, as of the Closing Date, no default or event of
default with respect to the Underlying Securities has occurred and is
continuing.
(e) It is the intention of all of the parties hereto that the transfer of
the Trust Property hereunder and under any Series Supplement shall constitute a
sale and, unless otherwise set forth in the Series Supplement, 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 a grantor
trust under the Code, 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.
(f) Any Trust created hereunder shall not engage in any business. Any
Trust created hereunder shall engage only in those activities relating to the
holding, protecting and preserving of the Trust Property and the issuance of the
Certificates and those activities required or authorized by this Trust Agreement
or incidental to and necessary hereunder. Any Trust created hereunder shall not
issue or sell any certificates or other obligations other
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than the Certificates or otherwise incur, assume or guarantee any indebtedness
for money borrowed.
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 and the related documents referred to in Section
2.01, now existing or hereafter acquired, and declares that it will hold such
Underlying Securities and documents 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 of Certificates, 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
Series 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 Series Supplement, to the Depositor's
knowledge, the information set forth in the Series Supplement 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, would constitute a default) under, or
result in the breach or acceleration of, any material contract, agreement
or other instrument to which the Depositor is a party or which may be
applicable to the Depositor or any of its assets;
(iv) the Depositor has the full power and authority to enter into
and consummate all transactions contemplated by this Trust Agreement, has
duly authorized the execution, delivery and performance of this Trust
Agreement and has duly executed and delivered this Trust Agreement. This
Trust Agreement, upon its execution and delivery by the Depositor and
assuming due authorization, execution and delivery by the Trustee, will
constitute a valid, legal and binding obligation of the Depositor,
enforceable against it in accordance with the terms hereof, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium or other laws relating to or affecting the rights
of creditors generally, and by general equity principles (regardless of
whether such enforcement is considered a proceeding in equity or at law);
and
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(v) any additional representations and warranties, if any, that may
be specified in the applicable Series Supplement.
It is understood and agreed that the representations and warranties of the
Depositor set forth in this Section 2.03 shall survive delivery of the
respective documents to the Trustee and shall inure to the benefit of the
Trustee on behalf of the Certificateholders notwithstanding any restrictive or
qualified endorsement or assignment. Upon discovery by any of the Depositor or
the Trustee of a breach of any of the foregoing representations and warranties
which materially and adversely affects the interests of the Certificateholders,
the party discovering such breach shall give prompt written notice thereof to
the other party.
Section 2.04. Breach of Representation, Warranty or Covenant. Within 90
days of the earlier of discovery by the Depositor or receipt of notice by the
Depositor of a breach of any representation or warranty of the Depositor set
forth in Section 2.03 that materially and adversely affects the interests of the
Certificateholders of a given Series of Certificates, the Depositor shall cure
such breach in all material respects.
Section 2.05. Agreement to Authenticate and Deliver Certificates. With
respect to each Series of Certificates and the related Trust, the Trustee hereby
agrees and acknowledges that it will, concurrently with the Grant to and receipt
by it of the related Underlying Securities and delivery to it by the Depositor
of executed Certificates of such Series, cause to be authenticated and delivered
to or upon the written order of the Depositor, in exchange for the Underlying
Securities and such other assets constituting the Trust for a given Series,
Certificates duly authenticated by or on behalf of the Trustee in authorized
denominations evidencing ownership of the entire Trust for such Series, all in
accordance with the terms and subject to the conditions of Sections 5.02 and
5.11.
ARTICLE III
ADMINISTRATION OF EACH TRUST
Section 3.01. Administration of each Trust. (a) The Trustee shall
administer the Underlying Securities for each given Trust for the benefit of the
Certificateholders of the related Series. In engaging in such activities, the
Trustee shall follow or cause to be followed collection procedures in accordance
with the terms of these Standard Terms and the applicable Series Supplement, the
respective Underlying Securities and any applicable Credit Support Instruments.
With respect to each Trust, and subject only to the above-described standards
and the terms of these Standard Terms, the related Series Supplement and the
respective Underlying Securities and applicable Credit Support Instruments, if
any, the Trustee shall have full power and authority, acting alone or through
Sub-Administrative Agents as provided in Section 7.02, to do or cause to be done
any and all things in connection with such administration which it deems
necessary to comply with the terms of these Standard Terms and the applicable
Series Supplement.
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(b) The duties of the Trustee shall be performed in accordance with
applicable local, State and Federal law, and the Trustee shall make any and all
filings, reports, notices or applications with, and seek any comments and
authorizations from, the Commission and any State securities authority on behalf
of the Trust for each Series.
Section 3.02. Collection of Certain Underlying Security Payments. With
respect to any Series or Class of Certificates, the Trustee shall make
reasonable efforts to collect all payments required to be made pursuant to the
terms of the Underlying Securities in a manner consistent with the terms of this
Trust Agreement, such Underlying Securities and any related Credit Support
Instruments.
Section 3.03. Certificate Account. (a) For each Series of Certificates,
the Trustee shall establish and maintain one or more Eligible Accounts
(collectively, the "Certificate Account"), held in trust for the benefit of the
Certificateholders of such Series. The Trustee on behalf of such
Certificateholders shall possess all right, title and interest in all funds on
deposit from time to time in each Certificate Account and in all proceeds
thereof. With respect to each Series of Certificates, the Certificate Account
shall be under the sole dominion and control of the Trustee for the benefit of
the related Certificateholders. With respect to each Series of Certificates, not
later than the close of business on the Business Day on which the Trustee
receives such amounts in the form of immediately available funds (so long as
such funds are received by the Trustee by 3:00 p.m. New York City time, and on
the next Business Day otherwise), the Trustee shall deposit or cause to be
deposited in the Certificate Account all amounts received by it with respect to
the Underlying Securities, any Credit Support and all Liquidation Proceeds
related to such Series including:
(i) all payments on account of principal of such Underlying
Securities;
(ii) all payments on account of interest on such Underlying
Securities;
(iii) all payments on account of premium (if any) on such Underlying
Securities;
(iv) any payments in respect of any such Credit Support;
(v) any Advances made as required pursuant to Section 4.03; and
(vi) any interest or investment income earned on funds deposited in
the related Accounts.
Unless otherwise specified in the applicable Series Supplement, it is
understood and agreed that payments in the nature of prepayment or redemption
penalties, late payment charges, default interest or reinvestment income which
may be received by the Trustee shall be deposited by the Trustee in the
Certificate Account and shall not be retained by the Trustee for its own
account.
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If, at any time, the Certificate Account for any Series ceases to be an
Eligible Account, the Trustee shall within 5 Business Days (or such longer
period, not to exceed 30 calendar days, as to which the Rating Agency Condition
is met) establish a new Certificate Account meeting the conditions specified
above and the Trustee shall within 5 Business Days transfer any cash and any
investments on deposit in the Certificate Account to such new Certificate
Account, and from the date such new Certificate Account is established, it shall
be the Certificate Account for such Series.
(b) The Trustee shall give notice to the Depositor and the Rating Agency
of the location of each Eligible Account constituting the Certificate Account
and prior to any change thereof.
Section 3.04. Liquidation of the Underlying Securities. If specified in
the applicable Series Supplement, upon the occurrences of specified events, the
Trustee shall direct the Market Agent to sell the Underlying Securities in
compliance with the Sale Procedures and to deposit the Liquidation Proceeds
therefrom into the Certificate Account pursuant to Section 3.03(a) hereof.
Section 3.05. Investment of Funds in the Accounts. The Trustee on behalf
of the Trust, may direct any depository institution maintaining the Certificate
Account or the Reserve Account, if any, for the applicable Series and any other
segregated Eligible Account the contents of which are held for the benefit of
Certificateholders of such Series (each, an "Account") to invest the funds
therein at the specific written direction of the Depositor in one or more
Eligible Investments bearing interest or sold at a discount, which shall be held
to maturity unless payable on demand and which funds shall not be reinvested
upon the maturity or demand for payment of such Eligible Investment. If the
Depositor does not provide any investment directions, funds held in any Account
will be invested in the Eligible Investments specified in clause (vi) of the
definition thereof. Investments of such funds shall be invested in Eligible
Investments that will mature so that such funds will be available for
distribution on the next Distribution Date. Except as otherwise provided in the
applicable Series Supplement, any earnings with respect to such Eligible
Investments shall be paid to the Certificateholders (and, if applicable, the
Retained Interest holder) pro rata in proportion to their interest in the
invested funds. In the event amounts on deposit in an Account are at any time
invested in an Eligible Investment payable on demand, the Trustee shall:
(x) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such Eligible
Investment may otherwise mature hereunder in an amount equal to the lesser
of (1) all amounts then payable thereunder and (2) the amount required to
be withdrawn on such date; and
(y) demand same day payment of all amounts due thereunder upon a
determination by the Trustee that such Eligible Investment would not
constitute an Eligible Investment in respect at funds thereafter on deposit
in any Account.
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Section 3.06. Maintenance of Credit Support. (a) On the applicable Closing
Date, the Trustee at the written direction of the Depositor or, if so specified
in the applicable Series Supplement, the Depositor shall, to the extent
specified in the applicable Series Supplement, establish and maintain, or enter
into, as applicable, in the name of the Trustee, either as a part of the related
Trust or outside it, for the benefit of the Certificateholders of the related
Series, the Credit Support specified in the applicable Series Supplement. To the
extent specified in the applicable Series Supplement, the Depositor will make or
cause to be made any initial deposit to the Certificate Account or any Reserve
Account for the related Series as of the Closing Date. Unless the Series
Supplement for a given Series provides otherwise, if a Reserve Account exists
for such Series, collections with respect to the Underlying Securities for such
Series not distributed to the Certificateholders of such Series shall be
deposited in the Reserve Account. The Reserve Account, if any, shall be an asset
of the Depositor (and the income earned on any amounts held in the Reserve
Account shall be allocable to the Depositor, who agrees to include any such
income in its gross income for all federal, state and local income and franchise
tax purposes) and will not be a part of or otherwise be includible in the Trust
but will be held for the benefit of the Certificateholders.
(b) Amounts on deposit in the Reserve Account and amounts available
pursuant to any other Credit Support for such Series shall be applied by the
Trustee to make distributions of principal of and premium (if any) and interest
on the Certificates of such Series as required pursuant to Section 4.01 and the
applicable Series Supplement to the extent that funds are not otherwise
available for such purpose. If specified in such Series Supplement, immediately
after each Distribution Date, amounts on deposit in the Reserve Account for such
Series in excess of a specified amount shall be paid to the Person so specified
in such Series Supplement.
Section 3.07. Realization Upon Defaulted Underlying Securities. (a) The
Trustee, on behalf of the Certificateholders, shall assert claims under each
applicable Credit Support Instrument, and shall take such reasonable steps as
are necessary to receive payment or to permit recovery thereunder with respect
to any defaulted Underlying Securities, subject in all cases to the provisions
of Article VII hereof.
(b) Unless otherwise provided in the related Series Supplement, if the
Trustee, as applicable, is unable to obtain full recovery in respect of a
defaulted Underlying Security and any related Credit Support Instrument pursuant
to Section 3.07(a), the Trustee shall follow or cause to be followed such normal
practices and procedures as it deems necessary or advisable to realize upon such
defaulted Underlying Security and such Credit Support Instrument, subject in all
cases to the provisions of Article VII hereof.
(c) If the Liquidation Proceeds of a defaulted Underlying Security are
less than the sum of (i) the outstanding principal balance of the defaulted
Underlying Security, (ii) interest accrued but unpaid thereon at the applicable
interest rate and (iii) the aggregate amount of expenses incurred by the Trustee
in connection with the practices and procedures referred to in paragraph (b) of
this Section 3.07 to the extent reimbursable under these Standard Terms and the
related Series Supplement, the Trust for the applicable Series shall recognize a
Realized Loss equal to the amount of such difference. Any such reimbursed
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Realized Loss shall be allocated pursuant to Section 4.05 among the
Certificateholders of such Series in the manner and priority set forth in the
related Series Supplement.
Section 3.08. Retained Interest. The Retained Interest, if any, in any
Underlying Security shall initially be held by the Person so specified in the
related Series Supplement as and to the extent specified therein. With respect
to each Underlying Security, unless otherwise specified in the related Series
Supplement, the Retained Interest shall be deducted by the Trustee from
applicable collections in respect of such Underlying Security. Unless otherwise
provided in the applicable Series Supplement, collections in respect of Retained
Interest shall not be deposited in the Certificate Account for the applicable
Series and shall not constitute a part of the Trust for such Series, but shall
instead be distributed to the holder of such Retained Interest; provided,
however, that the Series Supplement for any Series with respect to which there
is a Retained Interest may provide that, notwithstanding the terms contained
herein, commingled amounts received in respect of assets inclusive of Underlying
Securities and Retained Interest may initially be deposited in a separate and
discrete account established by the Trustee and such Series Supplement may
provide for additional terms relating thereto. Unless otherwise provided in the
applicable Series Supplement, after deduction of all applicable fees as provided
for in this Trust Agreement, on each Distribution Date the Trustee shall
allocate on a pari passu basis any partial recovery on an Underlying Security
between (a) the Retained Interest, if any, and (b) distributions to
Certificateholders of the applicable Series.
Section 3.09. Access to Certain Documentation. The Trustee shall provide
to any Federal, State or local regulatory authority that may exercise authority
over any Certificateholder access to the documentation regarding the Underlying
Securities required by applicable laws and regulations. Such access shall be
afforded without charge, but only upon reasonable request and during normal
business hours at the offices of the Trustee designated by it. In addition,
access to the documentation regarding the Underlying Securities related to a
given Series (or Class within such Series) will be provided to any
Certificateholder of such Series (or Class) upon reasonable request during
normal business hours at the offices of the Trustee designated by it at the
expense of the Certificateholder requesting such access.
Section 3.10. Reports by the Depositor. The Depositor shall:
(a) file with the Trustee, within 30 days after the Depositor is
required to file the same with the Commission, copies of the annual reports
and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Depositor is required to file
with the Commission pursuant to Section 13 or Section 15(d) of the Exchange
Act; or, if the Depositor is not required to file information, documents or
reports pursuant to either of such sections, then to file with the Trustee
and the Commission, in accordance with rules and regulations prescribed by
the Commission, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of the
Exchange Act in respect
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of a security listed and registered on a national securities exchange as
may be prescribed in such rules and regulations;
(b) file with the Trustee and the Commission, in accordance with the
rules and regulations prescribed by the Commission, such additional
information, documents and reports with respect to compliance by the
Depositor with the conditions and covenants provided for in this Trust
Agreement, as may be required by such rules and regulations, certificates
or opinions of independent accountants, conforming to the requirements of
Section 314(e) of the Trust Indenture Act;
(c) transmit to all Certificateholders, in the manner and to the
extent provided in Section 313(c) of the Trust Indenture Act, such
summaries of any information, documents and reports required to be filed by
the Depositor pursuant to subsections (a) and (b) of this Section 3.10 as
may be required by rules and regulations prescribed by the Commission; and
(d) furnish to the Trustee, not less often than annually, a
certificate from the principal executive, financial or accounting officer
of the Depositor as to his or her knowledge of the Depositor's compliance
with all conditions and covenants under this Trust Agreement. For purposes
of this paragraph (d) such compliance shall be determined without regard to
any period of grace or requirement of notice provided under this Trust
Agreement.
Any reports, statements, documents or other information required to be
furnished by the Depositor to the Trustee pursuant to these Standard Terms or
any Series Supplement shall be deemed to have been delivered to the Trustee if
the Trustee is in possession of such reports, statements, documents or other
information at the time they are to be furnished pursuant to these Standard
Terms or any Series Supplement.
Section 3.11. Charges and Expenses. Except as otherwise provided in this
Trust Agreement or the related Series Supplement, no amounts in the nature of
fees or charges shall be payable by or withheld from the Trust, the Depositor or
any other person. There shall be no recourse or claim against the Trust or the
property of the Trust for all or any part of any fees or charges payable to any
person.
ARTICLE IV
DISTRIBUTIONS AND REPORTS TO CERTIFICATEHOLDERS
Section 4.01. Distributions. (a) On each Distribution Date for a given
Series of Certificates, the Trustee shall apply Available Funds in the
Certificate Account for such Series in the manner and priority set forth in the
Series Supplement for such Series. In any event, however, any amounts collected
during any period shall be distributed to the Certificateholders no later than
the Distribution Date immediately following the receipt thereof.
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(b) All distributions on the Certificates shall be payable only from
Available Funds, and no provision of this Trust Agreement shall be deemed to
create any obligation on the part of the Trustee or the Depositor to make any
distribution from any other source.
Section 4.02. Distributions on Certificates. (a) Distributions on any
Registered Certificate that are payable and are punctually paid or duly provided
for on any Distribution Date shall be distributed to the Person in whose name
such Registered Certificate (or one or more Predecessor Certificates) is
registered at the close of business on the related Record Date notwithstanding
the cancellation of such Registered Certificate upon any transfer or exchange
subsequent to such related Record Date.
The distribution of interest and principal on Registered Certificates shall
be made:
(i) if the Certificateholder is a Depository, to the Depository,
which shall credit the relevant participant's account at such Depository in
accordance with the policies and procedure of the Depository, or
(ii) if the Certificateholder is not a Depository, at the Corporate
Trust Office (except as otherwise specified pursuant to Section 5.01) or,
at that option of the Trustee, by check mailed to the address of the Person
entitled thereto as such address shall appear in the Certificate Register
or, if provided pursuant to Section 5.01 and in accordance with
arrangements satisfactory to the Trustee, at the option of the Registered
Holder by wire transfer to an account designated by the Registered Holder.
Notwithstanding the foregoing paragraph, with respect to a
Certificateholder of Certificates not held in a Depository and having at
least the Minimum Wire Denomination, such payment shall be made by wire
transfer of immediately available funds to the account designated by such
Certificateholder in a written request received by the Trustee not later
than 10 days prior to such Distribution Date; provided, however, that if a
wire transfer cannot be made for any reason, payment shall be made by
check. The Trustee shall not be required to send federal funds wires until
any corresponding payments which were not same day funds when received by
it have become same day funds.
(b) Subject to the foregoing provisions of this Section 4.02, each
Certificate delivered under this Trust Agreement upon transfer of or in exchange
for or in lieu of any other Certificate shall carry the rights to interest
accrued and undistributed, and to accrue, that were carried by such other
Certificate.
(c) All computations of interest due with respect to any Certificate of
any Series or Class within such Series shall be made as specified in the Series
Supplement applicable to that particular Series or Class of Certificates.
(d) With respect to any computations or calculations to be made under
these Standard Terms, the applicable Series Supplement and the Certificates,
except as otherwise provided, (i) all percentages resulting from any calculation
of accrued interest will be rounded, if necessary, to the nearest 1/100,000 of
1% (.0000001), with five one-millionths
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of a percentage point rounded upward, and (ii) all currency amounts will be
rounded to the nearest one-hundredth of a unit (with .005 of a unit being
rounded upward).
(e) Unless specified otherwise in a Series Supplement, the final
distribution of principal and/or premium shall be made upon presentation and
surrender of such Certificates at the Corporate Trust Office.
Section 4.03. Reports to Certificateholders. Unless otherwise specified in
the applicable Series Supplement, on the next Business Day following each such
Distribution Date the Trustee shall forward or cause to be forwarded to the
Depositor, each Certificateholder of such Series, to each Rating Agency rating
such Series and such other Persons as may be specified in such Series
Supplement, a statement setting forth:
(i) the amounts received by the Trustee as of the last such
statement in respect of principal, interest and premium on the Underlying
Securities and the Swap Receipt Amount, if any;
(ii) the Swap Distribution Amount, if any, for such date;
(iii) the amount of the distribution on such Distribution Date to
Certificateholders of each Class of such Series allocable to principal of
and premium, if any, and interest on the Certificates of each such Class;
and the amount of aggregate unpaid interest accrued as of such Distribution
Date;
(iv) in the case of each Class of Floating Rate Certificates of such
Series, the respective Floating Pass-Through Rate applicable to each such
Class on such Distribution Date, as calculated in accordance with the
method specified in such Certificates and the related Series Supplement;
(v) such other customary information as the Trustee deems necessary
or desirable, (or that any such Certificateholder reasonably requests,) to
enable such Certificateholders to prepare their tax returns;
(vi) if the Series Supplement provides for Advances, the aggregate
amount of Advances, if any, included in such distribution, and the
aggregate amount of unreimbursed Advances, if any, at the close of business
on such Distribution Date;
(vii) the aggregate stated principal amount and, if applicable,
notional amount of the Underlying Securities related to such Series, the
current rating assigned by the Rating Agency thereon and the current
interest rate or rates thereon at the close of business on such
Distribution Date;
(viii) the aggregate Certificate Principal Balance (or Notional
Amount, if applicable) of each Class of such series at the close of
business on such Distribution Date, separately identifying any reduction in
such aggregate Certificate Principal
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Balance (or Notional Amount) due to the allocation of any Realized Losses
on such Distribution Date or otherwise;
(ix) as to any Series (or any Class within such Series) for which
Credit Support has been obtained, the amount or notional amount of coverage
of each element of Credit Support (and rating, if any, thereof) included
therein as of the close of business on such Distribution Date.
In the case of information furnished pursuant to subclauses (iii) and (v)
above, the amounts shall be expressed as a dollar amount per minimum
denomination of Certificates or for such other specified portion thereof. Within
a reasonable period of time after the end of each calendar year, the Trustee
shall furnish to each Person who at any time during each such calendar year was
a Certificateholder a statement containing the information set forth in
subclauses (iii) and (v) above, aggregated for such calendar year or the
applicable portion thereof during which such person was a Certificateholder.
Such obligation of the Trustee shall be deemed to have been satisfied to the
extent that substantially comparable information shall be provided by the
Trustee pursuant to any requirements of the Code as are from time to time in
effect. The Trustee shall supply to Certificateholders who so request all
materials received by the Trustee from the Underlying Securities Issuer.
Section 4.04. Advances. (a) Unless otherwise specified in the applicable
Series Supplement, the Trustee shall have no obligation to make Advances (as
defined below) with respect to the Underlying Securities or in favor of the
Holders of any Series (or Class within such Series) of Certificates.
(b) However, as and to the extent provided in the Series Supplement for a
given Series, and subject to the terms of paragraphs (b) and (c) of this Section
4.04, on or prior to each Distribution Date, the Trustee shall advance or cause
to be advanced in immediately available funds for deposit in the Certificate
Account for such Series an advance (each, an "Advance") in an amount equal,
unless otherwise specified in the related Series Supplement, to the aggregate of
distributions of principal, premium (if any) and interest due on the Underlying
Securities for such Series (or Class) during the related Collection Period, to
the extent remaining unpaid at the time of such Advance. In satisfaction of its
obligation to make such Advances, the Trustee shall make such Advances from its
own funds. The Trustee may recover Advances from late collections received by
the Trustee on the applicable Underlying Securities, proceeds from any
applicable Credit Support, if any, and Liquidation Proceeds with respect to the
Underlying Securities for such Series or Class, as specified in the related
Series Supplement, as to which any such unreimbursed Advance was made.
(c) Notwithstanding any provision herein to the contrary, no Advance shall
be required to be made hereunder if the Trustee reasonably believes that it will
be unable to recover such Advance from related late collections, Credit Support
proceeds, if any, or Liquidation Proceeds with respect to the applicable
Underlying Securities. It is further understood and agreed that the Trustee
shall not be obligated to make any Advances in
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respect of reductions in the amount of collections on the Underlying Securities
due to bankruptcy proceedings with respect to the Underlying Securities or the
obligors thereof.
(d) Notwithstanding any provision herein to the contrary, unless
otherwise provided in the Series Supplement for a given Series, any Advances
made in respect of any Underlying Securities related to such Series (or Class
within such Series) that are subsequently deemed by the Trustee to be
nonrecoverable from related late collections, Credit Support proceeds, if any,
or Liquidation Proceeds may be reimbursed to the Trustee through the application
of amounts on deposit in the Certificate Amount for such series allocable to any
of such Underlying Securities prior to the distributions of interest, premium
(if any) and principal with respect to the Certificates of such Series or Class.
Section 4.05. Allocation of Realized Losses and Trust Expenses. With
respect to any Series of Certificates, the manner and priority of the allocation
of Realized Losses and Extraordinary Trust Expenses, if any, on any Distribution
Date among the Classes, if any, of such Series shall be as set forth in the
related Series Supplement.
Section 4.06. Compliance with Withholding Requirements. (a)
Notwithstanding any other provision of this Trust Agreement to the contrary, the
Trustee shall comply with all Federal withholding requirements respecting
distributions to Certificateholders of interest or original issue discount that
the Trustee reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding.
(b) Each Certificateholder will provide the Trustee (and, so long as the
Certificates are held at a Depository in the form of Global Certificates,
each Beneficial Owner of the Certificates will provide such Depository and
the Trustee) with evidence that there should not be any withholding tax
assessed for Federal income tax purposes in respect of distributions to
such Certificateholder, such evidence to take the form of a statement, on a
duly executed and up-to-date Internal Revenue Service Form W-8 (or
successor form), Form W-9 (or successor Form), or Form 4224 (or successor
form), as applicable, that identifies the Beneficial Owner of the
Certificate; provided, however, that for so long as the Certificates are
held at a Depository in the form of Global Certificates, the
Certificateholder shall have no obligation to provide the Trustee with any
such evidence except to the extent it has received such evidence from
Beneficial Owners of the Certificates. The Trustee shall not be required
to accept any such Internal Revenue Service forms if it believes that they
are not accurate (but the Trustee shall not be required to make any
independent investigation to determine their accuracy).
(c) If any tax or other governmental charge shall become payable by or on
behalf of the Trustee, including any tax or governmental charge required to
be withheld from any payment by the Trustee under the provisions of any
applicable law or regulation with respect to any Underlying Securities or
the Certificates, such tax or governmental charge shall be payable by the
Certificateholder and may be withheld by the Trustee. The consent of
Certificateholder shall not be required for such withholding. In the event
the Trustee does withhold any amount from interest or original issue
discount distributions or Advances
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thereof to any Certificateholder pursuant to Federal withholding requirements,
the Trustee shall indicate in the statement required pursuant to Section 4.03
the amount so withheld.
(d) The Depositor and the Trustee shall have the right to refuse the
surrender, registration of transfer or exchange of any Certificate with respect
to which such tax or other governmental charge shall be payable until such
payment shall have been made by the Certificateholder.
Article V
The Certificates
Section 5.01. The Certificates. (a) The Certificates of any Series (or
Class within such Series) shall be issued in fully registered form as Registered
Certificates and shall be substantially in the form of the exhibits with respect
thereto attached to the applicable Series Supplement.
The Certificates may be issued in one or more Series, each of which series
may, subject to the provisions of the Code and the intended status of each
Series Trust to constitute a fixed investment trust for federal income tax
purposes, be issued in one or more Classes, with such further particular
designation added or incorporated in such title for the Certificates of any
particular Series or Class within such Series as the Depositor may determine.
Each Certificate shall bear upon its face the designation so selected for the
Series and Class to which it belongs. All Certificates of the same Series and
Class shall be identical in all respects except for the denominations thereof.
All Certificates of all Classes within any one Series at any time Outstanding
shall be identical except for differences among the Certificates of the
different Classes within such Series specified in the applicable Series
Supplement. Except as otherwise provided in a Series Supplement, all
Certificates of a particular Series (and all Classes within such Series) issued
under this Trust Agreement shall be in all respects equally and ratably entitled
to the benefits hereof without preference, priority or distinction on account of
the actual time or times of authentication and delivery, all in accordance with
the terms and provisions of this Trust Agreement.
(b) Each Series (and all Classes within such Series) of Certificates shall
be created by a Series Supplement authorized by the Depositor and establishing
the terms and provisions of such Series. The several Series may, subject to the
provisions of the Code and the intended status of each Series Trust to
constitute a fixed investment trust for federal income tax purposes, differ as
between Series and any given Class may vary as between the other Classes within
any given Series.
Section 5.02. Execution, Authentication and Delivery. (a) Unless
otherwise set forth in the Series Supplement, the Certificates shall be executed
by the Trustee on behalf of the Trust by manual or facsimile signature of a
Responsible Officer. Certificates bearing the manual or facsimile signature of
individuals who were at any time the proper officers of the Trustee shall be
binding, notwithstanding that such individuals or any of them have ceased to
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hold such offices prior to the authentication and delivery of such Certificates
or did not hold such offices at the date of such Certificates.
(b) Each Certificate shall be dated as of the later of the date specified
in the related Series Supplement and the date of its authentication.
(c) No Certificate appertaining thereto shall be entitled to any benefit
under this Trust Agreement or be valid or obligatory for any purpose, unless
there appears on such Certificate a certificate of authentication substantially
in one of the forms provided for herein executed by the Trustee by the manual
signature of one of its authorized signatories, and such certificate upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder and is entitled
to the benefits of this Trust Agreement.
Section 5.03. Temporary Certificates. Pending the preparation of
Definitive Certificates of any Series (or Class within each such Series), the
Depositor may execute, and upon receipt of a Depositor Order, the Trustee shall
authenticate and deliver temporary Certificates which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the Definitive Certificates in lieu of which they
are issued, in registered form and with such appropriate insertions, omissions,
substitutions and other variations as may be authorized by such Depositor Order.
Any such temporary Certificate may be in global form, representing all or a
portion of the Outstanding Certificates of such Series or Class. Every such
temporary Certificate shall be executed by the Depositor and shall be
authenticated and delivered by the Trustee upon the same conditions and in
substantially the same manner, and with the same effect, as the Definitive
Certificate or Definitive Certificates in lieu of which is issued.
If temporary Certificates of any Series (or Class within such Series) are
issued, the Depositor will cause Definitive Certificates of such Series or Class
to be prepared without unreasonable delay. After the preparation of Definitive
Certificates of such Series or Class, the temporary Certificates of such Series
or Class shall be exchangeable for Definitive Certificates of such Series or
Class upon surrender of the temporary Certificates of such Series or Class at
the office of the Trustee in a Place of Distribution for such Series or Class,
without charge to the Holder, except as provided in Section 5.04 in connection
with a transfer. Upon surrender for cancellation of any one or more temporary
Certificates of any Series or Class within such Series, the Depositor shall
execute and the Trustees shall authenticate and deliver in exchange therefore
Definitive Certificates with a like Certificate Principal Balance or Notional
Amount, as applicable, of the same Series (or Class within such Series) of
authorized denominations and of like tenor. Until so exchanged, temporary
Certificates of any Series (or Class within such Series) shall in all respects
be entitled to the same benefits under this Trust Agreement as Definitive
Certificates of such Series or Class, except as otherwise specified in the
applicable Series Supplement with respect to the payment of interest on Global
Securities in temporary form.
Upon any exchange of a portion of a temporary Global Security for a
definitive Global Security or for the individual Definitive Certificates
represented thereby pursuant to
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this Section 5.03 or Section 5.04, the temporary Global Security shall be
endorsed by the Trustee to reflect the reduction of the aggregate Certificate
Principal Balance or Notional Amount, as applicable, evidenced thereby,
whereupon the aggregate Certificate Principal Balance or Notional Amount, as
applicable, of such temporary Global Security shall be reduced for all purposes
by the amount so exchanged and endorsed.
Section 5.04. Registration; Registration of Transfer and Exchange. (a)
The Trustee shall cause to be kept a register for each Series of Registered
Certificates (the registers maintained in such office and in any other office or
agency of the Trustee in a Place of Distribution being herein sometimes
collectively referred to as the "Certificate Register") in which a transfer
agent and registrar (which may be the Trustee) (the "Certificate Registrar")
shall provide for the registration of Registered Certificates and the
registration of transfers and exchanges of Registered Certificates. The Trustee
is hereby initially appointed Certificate Registrar for the purpose of
registering Registered Certificates and transfers and exchanges of Registered
Certificates as herein provided; provided, however, that the Trustee may appoint
one or more co-Certificate Registrars. Upon any resignation of any Certificate
Registrar, the Depositor shall promptly appoint a successor or, in the absence
of such appointment, assume the duties of Certificate Registrar.
If a Person other than the Trustee is appointed by the Depositor as
Certificate Registrar, the Depositor will give the Trustee prompt written notice
of the appointment of a Certificate Registrar and of the location, and any
change in the location, of the Certificate Register, and the Trustee shall have
the right to rely upon a certificate executed on behalf of the Certificate
Registrar by an officer thereof as to the names and addresses of the Holders of
the Registered Certificates and the principal amounts and numbers of such
Registered Certificates.
(b) Only upon surrender for registration of transfer any Registered
Certificate of any Series (or Class within such Series) at the office or agency
of the Trustee, if the requirements of Section 8-401(1) of the Uniform
Commercial Code are met to the Depositor's satisfaction, the Trustee on behalf
of the Trust (or the Depositor if specified in the Series Supplement) shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Registered Certificates of
any authorized denominations, of a like Series, Class and aggregate Certificate
Principal Balance or Notional Amount, as applicable.
(c) Notwithstanding any other provisions of this Section, unless and until
it is exchanged in whole or in part for the individual Certificates represented
thereby, a Global Security representing all or a portion of the Certificates of
a Series (or Class within such Series) may not be transferred except as a whole
by the Depository for such Series or Class to a nominee of such Depository or by
a nominee of such Depository to such Depository or another nominee of such
Depository or by such Depository or any such nominee to a successor Depository
for such Series or Class or a nominee of such successor Depository.
(d) At the option of the Holder, Registered Certificates of any Series (or
Class within such Series) (other than a Global Security, except as set
forth below) may be
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exchanged for other Registered Certificates of the same Series or Class of any
authorized denomination or denominations of like tenor and aggregate Certificate
Principal Balance or Notional Amount, as applicable, upon surrender of the
Registered Certificates to be exchanged at the office or agency of the Trustee
maintained for such purpose.
(e) If at the time the Depository for the Certificates of a Series (or
Class within such Series) notifies the Depositor that it is unwilling or unable
to continue as Depository for the Certificates of such Series or Class or if at
any time the Depository for the Certificates of such Series or Class shall no
longer be eligible under Section 5.08(b), the Depositor shall appoint a
successor Depository with respect to the Certificates of such Series or Class.
If a successor Depository for the Certificates of such Series or Class is not
appointed by the Depositor within 90 days after the Depositor receives such
notice or becomes aware of such ineligibility, the Depositor's election pursuant
to Section 5.01 shall no longer be effective with respect to the Certificates of
such Series or Class and the Depositor will execute, and the Trustee, upon
receipt of a Depositor Order for the authentication and delivery of individual
Certificates of such Series or Class, will authenticate and deliver individual
Certificates of such Series or Class in an aggregate Certificate Principal
Balance or Notional Amount, as applicable, equal to the aggregate Certificate
Principal Balance or Notional Amount, as applicable, of the Global Security or
Securities representing Certificates of such Series or Class in exchange for
such Global Security or Securities.
(f) The Depositor may at any time and in its sole discretion determine
that individual Certificates of any Series (or Class within such Series) issued
in the form of one or more Global Securities shall no longer be represented by
such Global Security or Securities. In such event the Trustee on behalf of the
Trust (or the Depositor if specified in the Series Supplement) shall execute,
and the Trustee, upon receipt of a Depositor Order for the authentication and
delivery of individual Certificates of such Series or Class, shall authenticate
and deliver, individual Certificates of such Series or Class in an aggregate
Certificate Principal Balance or Notional Amount, as applicable, equal to the
aggregate Certificate Principal Balance or Notional Amount, as applicable, of
the Global Security or Securities representing Certificates of such Series or
Class in exchange for such Global Security or Securities.
(g) If specified by the Depositor pursuant to Section 5.01 with respect to
a Series (or Class within such Series) of Certificates, the Depository for such
Series may surrender a Global Security for such Series or Class in exchange in
whole or in part for individual Certificates of such Series or Class on such
terms as are acceptable to the Depositor and such Depository. Thereupon, the
Trustee on behalf of the Trust (or the Depositor if specified in the Series
Supplement) shall execute, and the Trustee, upon receipt of a Depositor Order,
shall authenticate and deliver, without service charge,
(i) to each Person specified by such Depository a new individual
Certificate or Certificates of the same Series or Class, of any authorized
denomination as requested by such Person in an aggregate Certificate
Principal Balance or Notional
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Amount, as applicable, equal to and in exchange for such Person's
beneficial interest in the Global Security; and
(ii) to such Depository a new Global Security in a denomination equal
to the difference, if any, between the aggregate Certificate Principal
Balance or Notional Amount, as applicable, of the surrendered Global
Security and the aggregate Certificate Principal Balance or Notional
Amount, as applicable, of individual Certificates delivered to Holders
thereof.
In any exchange provided for in any of the preceding three paragraphs, the
Trustee on behalf of the Trust (or the Depositor if specified in the Series
Supplement) shall execute, and the Trustee, upon receipt of a Depositor Order,
will authenticate and deliver individual Certificates in registered form in
authorized denominations.
Upon the exchange of a Global Security for individual Certificates, such
Global Security shall be cancelled by the Trustee. Individual Registered
Certificates issued in exchange for a Global Security pursuant to this Section
5.04 shall be registered in such names and in such authorized denominations as
the Depository for such Global Security, pursuant to instructions from its
Participants, any indirect participants or otherwise, shall instruct the
Trustee. The Trustee shall deliver such Registered Certificates to the Person in
whose names such Registered Certificates are so registered.
(h) All Certificates issued upon any registration of transfer or exchange
of Certificates shall constitute complete and indefeasible evidence of ownership
in the Trust related to such Certificates and be entitled to the same benefits
under this Trust Agreement as the Certificates surrendered upon such
registration of transfer or exchange.
(i) Every Registered Certificate presented or surrendered for registration
of transfer or exchange shall (if so required by the Depositor, the Trustee or
the Certificate Registrar) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Depositor, the Trustee or the
Certificate Registrar, duly executed, by the Holder thereof or his attorney duly
authorized in writing, with such signature guaranteed by a brokerage firm or
financial institution that is a member of a Securities Approved Medallion
Program such as Securities Transfer Agents Medallion Program (STAMP), Stock
Exchange Medallion Program (SEMP) or New York Stock Exchange Inc. Medallion
Signature Program (MSP).
(j) No service charge shall be made to a Holder for any registration of
transfer or exchange of Certificates, but the Depositor may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Certificates,
other than exchanges pursuant to Section 5.03 not involving any transfer.
Section 5.05. Mutilated, Destroyed, Lost and Stolen Certificates. If (i)
any mutilated Certificate is surrendered to the Trustee at its Corporate Trust
Office or such other locations as specified by the Trustee or (ii) the Depositor
and the Trustee receive evidence to their
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satisfaction of the destruction, loss or theft of any Certificate, and there is
delivered to the Depositor and the Trustee such security or indemnity as they
may require to hold each of them and any Paying Agent harmless, and neither the
Depositor nor the Trustee receives notice that such Certificate has been
acquired by a bona fide purchaser, then the Trustee on behalf of the Trust (or
the Depositor if specified in the Series Supplement) shall execute and the
Trustee, upon receipt of a Depositor Order, shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of the same Series or Class of like tenor, form,
terms and principal amount, bearing a number not contemporaneously Outstanding,
so that neither gain nor loss in interest shall result from such exchange or
substitution.
Upon the issuance of any new Certificate under this Section, the Trustee
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in respect thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Certificate of any Series or Class issued pursuant to this
Section shall constitute complete and indefeasible evidence of ownership in the
Trust related to such Series, whether or not the destroyed, lost or stolen
Certificate shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Trust Agreement equally and proportionately with any
and all other Certificates of that Series or Class duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates or Coupons.
Section 5.06. Persons Deemed Owners. (a) The Depositor, the Trustee and
any agent of the Depositor or the Trustee may treat the Person in whose name any
Registered Certificate is registered as the owner of such Registered Certificate
for the purpose of receiving distributions of principal of (and premium, if any)
and (subject to Section 4.02) interest, if any, on such Registered Certificate
and for all other purposes whatsoever, whether or not such Registered
Certificate be overdue, and neither the Depositor or the Trustee, nor any agent
of the Depositor or the Trustee shall be affected by notice to the contrary.
(b) None of the Depositor, the Trustee or any of their agents will have
any responsibility or liability for any aspect of the records relating to or
distributions made on account of beneficial ownership interests in a Global
Security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
Section 5.07. Cancellation. Unless otherwise specified pursuant to
Section 5.01 for Certificates of any Series, all Certificates surrendered for
payment, redemption, transfer or exchange shall, if surrendered to any Person
other than the Trustee, be delivered to the Trustee and shall be promptly
cancelled by it. No Certificates shall be authenticated in lieu
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of or in exchange for any Certificates cancelled as provided in this Section,
except as expressly permitted by this Trust Agreement.
Section 5.08. Global Securities. (a) If the Series Supplement pursuant to
Section 5.01 provides that a Series (or Class within such Series) of
Certificates shall be represented by one or more Global Securities that (i)
shall represent an aggregate initial Certificate Principal Balance or Notional
Amount, as applicable, equal to the aggregate initial Certificate Principal
Balance or Notional Amount, as applicable, of the Certificates of such Series or
Class to be represented by such one or more Global Securities, (ii) shall be
registered, if in registered form, in the name of the Depository for such Global
Security or Securities or the nominee of such Depository, (iii) shall be
delivered by the Trustee to such Depository or pursuant to such Depository's
instruction and (iv) shall bear a legend substantially to the following effect:
"Unless and until it is exchanged in whole or in part for the individual
Certificates represented hereby, this Global Security may not be transferred
except as a whole by the Depository to a nominee of the Depository or by a
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository."
No Holder of a Certificate of such Series or Class will receive a
Definitive Certificate representing such Holder's interest in such Certificate
or Certificates, except as provided in Section 5.10. Unless and until
definitive, fully registered Certificates (the "Definitive Certificates") have
been issued to Holders of such Series or Class pursuant to Section 5.10:
(i) the provisions of this Section 5.09 shall be in full force and
effect;
(ii) the Certificate Registrar and the Trustee shall be entitled to
deal with the Depository for all purposes of this Trust Agreement
(including the distribution of principal of, and premium, if any, and
interest on the Certificates and the giving of instructions or directions
hereunder) as the sole Holder of the Certificates of such Series or Class,
and shall have no obligation to the Beneficial Owners of such Series or
Class;
(iii) to the extent that the provisions of this Section 5.08 conflict
with any other provisions of this Trust Agreement, the provisions of this
Section 5.08 shall control;
(iv) the rights of Beneficial Owners of such Series or Class shall be
exercised only through the Depository and shall be limited to those
established by law and agreements between such Beneficial Owners and the
Depository or its Participants; and
(v) whenever this Trust Agreement requires or permits actions to be
taken based upon instructions or directions of Holders of Certificates of
such Series or Class evidencing a specified percentage of the aggregate
Voting Rights of such Series or Class, the Depository shall be deemed to
represent such percentage only to the extent that it has received
instructions to such effect from Beneficial Owners of such Series
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or Class or Participants in such Depository's system owning or
representing, respectively, such required percentage of the beneficial
interest in the Certificates of such Series or Class and has delivered such
instructions to the Trustee.
(b) Each Depository designated pursuant to Section 5.01 for a Global
Security in registered form must, at the time of its designation and at all
times while it serves as such Depository, be a clearing agency registered under
the Exchange Act and any other applicable statute or regulation.
Section 5.09. Notices to Depository. Whenever a notice or other
communication to the Holders of a Series or Class within such Series represented
by one or more Global Securities is required under this Trust Agreement, unless
and until Definitive Certificates for such Series or Class shall have been
issued to such Beneficial Owners pursuant to Section 5.10, the Trustee shall
give all such notices and communications specified herein to be given to Holders
of the Certificates of such Series to the Depository, and shall have no
obligation to the Beneficial Owners.
Section 5.10. Definitive Certificates. If in respect of a Series (or Class
within such Series) represented by one or more Global Securities (i) the
Depositor advises the Trustee in writing that the Depository is no longer
willing or able to properly discharge its responsibilities with respect to the
Certificates of such Series or Class and the Depositor is unable to locate a
qualified successor, (ii) the Depositor at its option advises the Trustee in
writing that it elects to terminate the book-entry system of such Series or
Class through the Depository or (iii) Beneficial Owners representing beneficial
interests aggregating at least a majority (or such other Required Percentage--
Definitive Certificates that may be specified in a Series Supplement) of the
Voting Rights of the Certificates of such Series or Class advise the Depository
in writing that the continuation of a book-entry system for such Series or Class
through the Depository is no longer in the best interests of the Certificates
Owners of such Series or Class, then the Depository shall notify all Beneficial
Owners or Participants in the Depository's system with respect to such Series or
Class and the Trustee of the occurrence of any such event and of the
availability of Definitive Certificates for such Series or Class to Beneficial
Owners of such Series or Class requesting the same.
Upon surrender to the Trustee of the Global Securities of such Series or
Class by the Depository, accompanied by registration instructions, the Depositor
shall execute and the Trustee shall authenticate the Definitive Certificates of
such Series or Class in accordance with the instructions of the Depository. None
of the Depositor, the Certificate Registrar or the Trustee shall be liable for
any delay in delivery of such instructions and may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the issuance of
Definitive Certificates of a Series or Class, the Trustee shall recognize the
holders of the Definitive Certificates of such Series or Class as Holders.
Section 5.11. Conditions of Authentication and Delivery of New Series.
Certificates of a new Series may be issued at any time and from time to time
after the execution and delivery of these Standard Terms and the related Series
Supplement. The Trustee on behalf of the Trust (or the Depositor if specified in
the Series Supplement) shall execute and deliver
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Certificates of such Series to the Trustee and the Trustee shall authenticate
and deliver such Certificates upon a Depositor Order and upon delivery by the
Depositor to the Trustee of the following:
(1) The delivery of the Underlying Securities in accordance with
Section 2.01(b);
(2) An Officer's Certificate of the Depositor, dated as of the Closing
Date, to the effect that all of the requirements of this Section 5.11 have
been satisfied, and that the Depositor is not in breach of this Trust
Agreement and that the issuance of the Certificates will not result in any
breach of any of the terms, conditions, or provisions of, or constitute a
default under, the Depositor's certificate of incorporation or bylaws, or
any indenture, mortgage, deed of transfer or other agreement or instrument
to which the Depositor is a party or by which it or its property is bound
or any order of any court or administrative agency entered in any
Proceeding to which the Depositor is a party or by which it or its property
may be bound or to which it or its property may be subject;
(3) A Series Supplement consistent with the applicable provisions of
these Standard Terms;
(4) If applicable, a fully executed copy of the Swap Agreement,
together with all documents and opinions required to be delivered to the
Trust upon execution thereof pursuant to the terms thereof; and
(5) Written instructions by the Depositor to the Trustee directing the
Trustee to enter into and perform any obligations under the Swap Agreement,
if applicable, and/or the Market Agent Agreement, if applicable.
If all the Certificates of a Series are not to be originally issued at the
same time, then the documents required to be delivered pursuant to this Section
5.11 must be delivered only once, prior to the authentication and delivery of
the first Certificate of such Series; provided, however, that any subsequent
Depositor Order to the Trustee to authenticate Certificate of such Series upon
original issuance shall constitute a representation and warranty by the
Depositor that, as of the date of such request, the statements made in this
Section 5.11 shall be true and correct as if made on such date.
Section 5.12. Appointment of Paying Agent. The Trustee may appoint one or
more paying agents (each, a "Paying Agent") with respect to the Certificates of
any Series. Any such Paying Agent shall be authorized to make distributions to
Certificateholders of such Series from the Certificate Account for such Series
pursuant to the provisions of the applicable Series Supplement and shall report
the amounts of such distributions to the Trustee. Any Paying Agent shall have
the revocable power to withdraw funds from such Certificate Account for the
purpose of making the distributions referred to above. The Trustee may revoke
such power and remove the Paying Agent if the Trustee determines in its sole
discretion that the Paying Agent shall have failed to perform its obligations
under
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this Trust Agreement in any material respect. The Paying Agent shall initially
be the Trustee and any co-paying agent chosen by the Trustee and acceptable to
the Depositor. Any Paying Agent shall be permitted to resign as Paying Agent
upon 30 days' notice to the Trustee. In the event that the Trustee shall no
longer be the Paying Agent, the Trustee shall appoint a successor or additional
Paying Agent. The Trustee shall cause each successor to act as Paying Agent to
execute and deliver to Trustee an instrument in which such successor or
additional Paying Agent shall agree with the Trustee that it will hold all sums,
if any, held by it for distribution to the Certificateholders in trust for the
benefit of the Certificateholders entitled thereto until such sums shall be
distributed to such Certificateholders and will agree to such other matters as
are required by Section 317(b) of the Trust Indenture Act. The Paying Agent
shall return all unclaimed funds to the Trustee and upon removal shall also
return all funds in its possession to the Trustee. The provisions of Sections
7.01, 7.03, 7.04 and 7.06 shall apply to the Trustee also in its role as Paying
Agent, for so long as the Trustee shall act as Paying Agent. Any reference in
this Trust Agreement to the Paying Agent shall include any co-paying agent
unless the context requires otherwise. Notwithstanding anything contained herein
to the contrary, the appointment of a Paying Agent pursuant to this Section 5.12
shall not release the Trustee from the duties, obligations, responsibilities or
liabilities arising under this Trust Agreement other than with respect to funds
paid to such Paying Agent.
Section 5.13. Authenticating Agent. (a) The Trustee may appoint one or more
Authenticating Agents (each, an "Authenticating Agent") with respect to the
Certificates of any Series which shall be authorized to act on behalf of the
Trustee in authenticating such Certificates in connection with the issuance,
delivery and registration of transfer or exchange of such Certificates. Whenever
reference is made in this Trust Agreement to the authentication of Certificates
by the Trustee or the Trustee's certificate of authentication, such reference
shall be deemed to include authentication on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent must be
acceptable to the Depositor. Notwithstanding anything contained herein to the
contrary, the appointment of an Authenticating Agent pursuant to this Section
5.13 shall not release the Trustee from the duties, obligations,
responsibilities or liabilities arising under this Trust Agreement.
(b) Any institution succeeding to the corporate agency business of any
Authenticating Agent shall continue to be an Authenticating Agent without the
execution or filing of any power or any further act on the part of the Trustee
or such Authenticating Agent. An Authenticating Agent may at any time resign by
giving notice of resignation to the Trustee and to the Depositor. The Trustee
may at any time terminate the agency of an Authenticating Agent by giving notice
of termination to such Authenticating Agent and to the Depositor. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
an Authenticating Agent shall cease to be acceptable to the Trustee or the
Depositor, the Trustee promptly may appoint a successor Authenticating Agent.
Any successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless acceptable to the
Depositor. The Trustee agrees to pay to each
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Authenticating Agent from time to time reasonable compensation for its services
under this Section. The provisions of Section 7.01, 7.03 and 7.04 shall be
applicable to any Authenticating Agent.
(c) Pursuant to an appointment made under this Section, the Certificates
may have endorsed thereon, in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication in substantially the
following form:
This is one of the Certificates described in the Standard Terms and
the related Series Supplement.
Dated: ________________________________________
________________________________________
as Authenticating Agent for the Trustee,
By______________________________________
Section 5.14. Voting Rights with Respect to Underlying Securities. (a)
Within five Business Days after receipt of notice of any meeting of, or other
occasion for the exercise of voting rights or the giving of consents ("voting
rights") by, owners of any of the Underlying Securities, the Trustee shall give
notice to the Certificateholders, setting forth (i) such information as is
contained in such notice to owners of Underlying Securities, (ii) a statement
that the Certificateholders will be entitled, subject to any applicable
provision of law and any applicable provisions of such Underlying Securities
(and to the extent of the voting rights allocated to the Certificateholders
pursuant to subsection 5.14(b)), to instruct the Trustee as to the exercise of
voting rights, if any, pertaining to such Underlying Securities and (iii) a
statement as to the manner in which instructions may be given to the Trustee to
give a discretionary proxy to a person designated in the notice received by the
Trustee. Such notice shall be given by the Trustee to the Certificateholders of
record on such Record Date. Notwithstanding the foregoing, the
Certificateholders shall not exercise any such voting rights unless the Trustee
receives a written opinion, satisfactory in all respects to the Trustee, that
the exercise of such voting rights will not alter the status of the Trust as a
grantor trust for federal income tax purposes.
Upon the written request of the applicable Certificateholder, received on
or before the date established by the Trustee for such purpose, the Trustee
shall endeavor, insofar as practicable and permitted under any applicable
provision of law and any applicable provision of or governing the Underlying
Securities, to vote in accordance with any nondiscretionary instruction set
forth in such written request (in each case to the extent of the voting rights
allocated pursuant to subsection 5.14(b) to such Certificateholder). The Trustee
shall not vote except as specifically authorized and directed in written
instructions from the applicable Certificateholder entitled to give such
instructions.
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(b) Unless otherwise specified in the applicable Series Supplement, the
voting rights allocable to the owners of the Underlying Securities pursuant to
the terms thereof shall be allocated among the Certificateholders pro rata, in
the proportion that the denomination of each Certificate bears to the aggregate
denomination of all Certificates.
(c) By accepting delivery of a Certificate, whether upon original issuance
or subsequent transfer, exchange or replacement thereof, and without regard to
whether ownership is beneficial or otherwise, the Certificateholder agrees so
long as it is an owner of such Certificate that it shall not grant any consent
(i) to any amendment, modification or other change to the Underlying Securities
underlying the Certificates held by such Certificateholder, unless the Trustee
receives a written opinion, satisfactory in all respects to the Trustee, that
such amendment, modification or change will not result as an exchange of the
original Underlying Security for a modified Underlying Security, all within the
meaning of Section 1001 of the Internal Revenue Code of 1986, as amended or (ii)
to any redemption or prepayment of the Underlying Securities underlying the
Certificates held by such Certificateholder. The Trustee shall not grant any
consent solicited from the owners of the Underlying Securities underlying the
Certificates with respect to the matters set forth in this Section nor shall it
accept or take any action in respect of any consent, proxy or instructions
received from any Certificateholder in contravention of the provisions of this
Section.
Section 5.15. Actions by Certificateholders. (a) Wherever in this Trust
Agreement a provision is made that an action may be taken or a notice, demand or
instruction given by Certificateholders or Beneficial Owners, such action,
notice or instruction may be taken or given by any Certificateholder or
Beneficial Owner.
(b) Each Certificateholder or Beneficial Owner shall have the right to
assert any rights and privileges of a Certificateholder or Beneficial Owner, and
shall have the right to proceed directly and individually against any Person to
enforce any remedies hereunder and shall not be required to act in concert with
any other Certificateholder or Beneficial Owner or any other Person.
(c) Any request, demand, authorization, direction, notice, consent, waiver
or other act by a Certificateholder or Beneficial Owner of a Certificate shall
bind such Certificateholder or Beneficial Owner and every subsequent
Certificateholder or Beneficial Owner of such Certificate or any Certificate
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof in respect of anything done, suffered or omitted to be done by the
Certificateholder or Beneficial Owner or the Trustee in reliance thereon,
whether or not notation of such action is made upon such Certificate.
(d) Certificateholders of Certificates are beneficial owners of the right
to receive principal payments and interest payments to which such Certificates
relate and, as such, will have the right following an event of default with
respect to any Underlying Security to proceed directly against the Underlying
Securities Issuer(s). Such Certificateholders are not required to join other
Certificateholders of Certificates, the Depositor or the Trustee in order to
proceed against the Underlying Securities Issuer(s).
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Section 5.16. Events of Default. If any Event of Default shall occur and be
continuing with respect to any class of Certificates, then, and in each and
every case, the Trustee shall exercise any rights in respect of the related
Underlying Securities as provided in the applicable Series Supplement.
Section 5.17. Judicial Proceedings Instituted by Trustee; Trustee May Bring
Suit. If there shall be a failure to make payment of the principal of or
premium, if any, or interest on any Underlying Security, then the Trustee, in
its own name, and as trustee of an express trust, as holder of such Underlying
Security, shall be, to the extent permitted by and in accordance with the terms
of the Underlying Security, subject to the limitations on acceleration and the
exercise of remedies set forth therein, entitled and empowered to institute any
suits, actions or proceedings at law, in equity or otherwise, including the
power to make a demand on the trustee in respect of such Underlying Security, if
provided for, to take action to enforce the Underlying Security for the
collection of the sums so due and unpaid on such Underlying Security and may
prosecute any such claim or proceeding to judgment or final decree with respect
to the whole amount of any such sums so due and unpaid.
Section 5.18. Control by Certificateholders. The Holders of Certificates of
any Class holding Certificates representing not less than the Required
Percentage--Direction of Trustee of the aggregate Voting Rights of the
Outstanding Certificates of such Class shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee under this
Trust Agreement, including any right of the Trustee as holder of the Underlying
Securities; provided, however, that:
(1) such direction shall not be in conflict with any rule of law or
with this Trust Agreement and would not involve the Trustee in personal
liability or expense;
(2) the Trustee shall not determine that the action so directed would
be unjustly prejudicial to the Holders of Certificates of such Class not
taking part in such direction; and
(3) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
Section 5.19. Waiver of Past Defaults. The Holders of the Required
Percentage--Waiver of Certificates of any Series may direct the Trustee to vote
such percentage of the Underlying Securities held by the Trustee as corresponds
to the percentage of the aggregate Principal Amount of the Certificates of such
Series held by such Holders to waive any past Event of Default thereunder with
respect to such Series of Certificates and its consequences or may instruct the
Trustee to waive any past default under this Trust Agreement and its
consequences, except a default:
(1) in the payment of the principal of or premium, if any, or interest
on the Underlying Securities;
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(2) in respect of a covenant or provision hereof which under Article
VIII hereof cannot be modified or amended without the consent of the Holder
of each Outstanding Certificate affected; or
(3) specified in the applicable Series Supplement, if any, unless the
applicable Series Supplement provides otherwise.
Upon any such direction, the Trustee shall vote such percentage of the
Underlying Securities of the corresponding Series held by the Trustee as
corresponds to the percentage of the aggregate Principal Amount of the
Outstanding Certificates of such Series held by Holders who directed the Trustee
to waive such default or Event of Default thereunder. Upon any waiver that is
effective under the terms of such Class of Underlying Securities to waive such
default or Event of Default, such default or Event of Default shall cease to
exist with respect to this Trust Agreement, and, in the case of a default, any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Trust Agreement and any direction given by the Trustee on behalf
of such Certificateholders or in respect of any Underlying Securities shall be
annulled with respect thereto; but no such waiver shall extend to any subsequent
or other default or Event of Default or impair any right consequent thereon.
Section 5.20. Right of Certificateholders to Receive Payments Not to Be
Impaired. Anything in this Trust Agreement to the contrary notwithstanding, the
right of any Certificateholder to receive distributions of payments required
pursuant to Section 4.01 hereof on the Certificates when due, or to institute
suit for enforcement of any such payment on or after the applicable Distribution
Date or other date specified herein for the making of such payment, shall not be
impaired or affected without the consent of such Certificateholder.
Section 5.21. Remedies Cumulative. Every remedy given hereunder to the
Trustee or to any of the Certificateholders shall not be exclusive of any other
remedy or remedies, and every such remedy shall be cumulative and in addition to
every other remedy given hereunder or now or hereafter given by statute, law,
equity or otherwise.
Article VI
The Depositor
Section 6.01. Liability of the Depositor. (a) The Depositor shall be liable
in accordance herewith only to the extent of the obligations specifically
imposed by these Standard Terms and the related Series Supplement.
Section 6.02. Limitation on Liability of the Depositor. (a) The Depositor
shall not be under any obligation to expend or risk its own funds or otherwise
incur financial liability in the performance of its duties hereunder or under a
Series Supplement or in the exercise of any of its rights or power if reasonable
grounds exist for believing that the repayment or such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
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(b) Neither the Depositor nor any of its directors, officers, employees or
agents shall be under any liability to any Trust or the Certificateholders of
any Series for any action taken, or for refraining from the taking of any
action, in good faith pursuant to this Trust Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the Depositor
against any breach of representations, warranties or covenants made herein, or
against any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder.
(c) The Depositor shall not be under any obligation to appear in, prosecute
or defend any legal action unless such action is related to its respective
duties under this Trust Agreement and, in its opinion, does not involve it in
any expense or liability; provided, however, that the Depositor may in its
discretion undertake any such action which it may deem necessary or desirable
with respect to this Trust Agreement and the rights and duties of the parties
hereto and the interests of the Certificateholders hereunder. The Depositor
shall be under no obligation whatsoever to appear in, prosecute or defend any
action, suit or other proceeding in respect of any Underlying Securities.
(d) The Depositor shall not be liable to any Certificateholder for any
action or non-action by it in reliance upon the advice of or information from
legal counsel, accountants, any Certificateholder of a Certificate or any other
person believed by it in good faith to be competent to give such advice or
information. The Depositor may rely and shall be protected in acting upon any
written notice, request, direction or other document believed by it to be
genuine and to have been signed or presented by the proper party or parties.
(e) The Depositor shall not incur any liability to any Certificateholder
if, by reason of any provision of any present or future law, or regulation
thereunder, or any governmental authority, or by any reason of any act of God or
war or other circumstance beyond the control of the relevant party, the
Depositor shall be prevented or forbidden from doing or performing any act or
thing which the terms of this Trust Agreement provide shall be done or
performed; and the Depositor shall not incur any liability to any
Certificateholder by reason of any non-performance or delay, caused as
aforesaid, in the performance of any act or thing which the terms of this Trust
Agreement provide shall or may be done or performed, or by reason of any
exercise of, or failure to exercise, any discretion provided for in this Trust
Agreement.
Section 6.03. Depositor May Purchase Certificates. The Depositor may at any
time purchase Certificates in the open market or otherwise. Certificates so
purchased by the Depositor may, at the discretion of the Depositor, be held or
resold. Certificates beneficially owned by the Depositor will be disregarded for
purposes of determining whether the required percentage of the aggregate Voting
Rights has given any request, demand, authorization, direction, notice, consent
or waiver hereunder.
Section 6.04. Merger or Consolidation of the Depositor. Nothing in this
Trust Agreement shall prevent any consolidation or merger of the Depositor with
or into any other corporation, or any consolidation or merger of any other
corporation with or into the
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Depositor or any sale or transfer of all or substantially all of the property
and assets of the Depositor to any other Person lawfully entitled to acquire the
same; provided, however, that, so long as Certificates are outstanding
hereunder, the Depositor covenants and agrees that any such consolidation,
merger, sale or transfers shall be upon the condition that the due and punctual
performance and observance of all the terms, covenants and conditions of this
Trust Agreement to be kept or performed by the Depositor shall be assumed by the
Person (if other than the Depositor) formed by or resulting from any such
consolidation or merger, or which shall have received the transfer of all or
substantially all of the property and assets of the Depositor, just as fully and
effectually as if successor Person had been the original party of the first part
hereto; and in the event of any such sale or transfer the predecessor Depositor
may be dissolved, wound up and liquidated at any time thereafter.
Section 6.05. No Liability of the Depositor with Respect to the
Underlying Securities; Certificateholders to Proceed Directly Against the
Underlying Securities Issuer(s). (a) The sole obligor with respect to any
Underlying Security is the Underlying Securities Issuer thereof. The Depositor
shall not have any obligation on or with respect to the Underlying Securities;
and its obligations with respect to Certificates shall be solely as set forth in
this Trust Agreement.
(b) The Depositor is not authorized to proceed against the Underlying
Securities Issuer of any Underlying Security in the event of a default or to
assert the rights and privileges of Certificateholders of Certificates and has
no duty in respect thereof.
Article VII
Concerning the Trustee
Section 7.01. Duties of Trustee. (a) Prior to the occurrence of an Event
of Default, the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in these Standard Terms and the related Series
Supplement. During an Event of Default, the Trustee shall exercise such of the
rights and powers vested in it by this Trust Agreement, and shall use the same
degree of care and skill in their exercise, as a prudent man would exercise or
use under the circumstances in the conduct of such person's own affairs. The
Trustee shall exercise those rights in a manner consistent with the status of
any Trust created hereunder as a fixed investment trust for federal income tax
purposes. The Trustee shall not have any power to vary the investment of any
Certificateholders of any Series or to accept any assets (other than proceeds of
the Underlying Securities) other than the Underlying Securities transferred to
it on the Closing Date of any Series. Any permissive right of the Trustee
enumerated in this Trust Agreement shall not be construed as a duty and shall be
interpreted consistently with the status of the Trust as a fixed investment
trust.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Trust Agreement, shall examine them to determine whether they
conform to the requirements of this Trust
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Agreement. If any such instrument is found not to conform to the requirements of
this Trust Agreement, the Trustee shall take action as it deems appropriate to
have the instrument corrected, and if the instrument is not corrected to the
Trustee's satisfaction, the Trustee will provide notice thereof to the Depositor
and Certificateholders.
(c) No provision of this Trust Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; provided, however, that:
(i) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Trust Agreement, the Trustee shall
not be liable except for the performance of such duties and obligations as
are specifically set forth in this Trust Agreement, no implied covenants or
obligations shall be read into this Trust Agreement against the Trustee
and, in the absence of bad faith on the part of the Trustee, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee that conform to the requirements of this
Trust Agreement;
(ii) the Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of Holders of the Required Percentage--
Direction of Trustee of the aggregate Voting Rights of a given Series (or
Class or group of Classes within such Series), as specified in the
applicable Series Supplement relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this Trust
Agreement;
(iv) the Trustee shall not be required to expend or risk its own
funds or otherwise incur financial liability in the performance of any of
its duties hereunder or in the exercise of any of its rights or powers if
there is reasonable ground for believing that the repayment of such funds
or adequate indemnity against such risk or liability is not reasonably
assured to it;
(v) except for actions expressly authorized by this Trust Agreement,
the Trustee shall take no actions reasonably likely to impair the interests
of the Trust in any Underlying Security now existing or hereafter acquired
or to impair the value of any Underlying Security now existing or hereafter
acquired;
(vi) except as expressly provided in this Trust Agreement, the
Trustee shall have no power to vary the corpus of the Trust including by
(A) accepting any substitute obligation or asset for a Underlying Security
initially assigned to the Trustee under Section 2.01, (B) adding any other
investment, obligation or security to the Trust or (C) withdrawing from the
Trust any Underlying Securities;
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(vii) in the event that the Paying Agent or the Registrar shall fail
to perform any obligation, duty or agreement in the manner or on the day
required to be performed by the Paying Agent or Registrar, as the case may
be, under this Trust Agreement, the Trustee shall be obligated promptly
upon its knowledge thereof to perform such obligation, duty or agreement in
the manner so required;
(viii) the Trustee shall not be liable to any Certificateholder for
any action or non-action by it in reliance upon the advice of or
information from legal counsel, accountants, any Certificateholder of a
Certificate or any other person believed by it in good faith to be
competent to give such advice or information. The Trustee may rely and
shall be protected in acting upon any written notice, request, direction or
other document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ix) the Trustee shall not incur any liability to any
Certificateholder if, by reason of any provision of any present or future
law, or regulation thereunder, or any governmental authority, or by any
reason of any act of God or war or other circumstance beyond the control of
the relevant party, the Trustee shall be prevented or forbidden from doing
or performing any act or thing which the terms of this Trust Agreement
provide shall be done or performed; and the Trustee shall not incur any
liability to any Certificateholder by reason of any non-performance or
delay, caused as aforesaid, in the performance of any act or thing which
the terms of this Trust Agreement provide shall or may be done or
performed, or by reason of any exercise of, or failure to exercise, any
discretion provided for in this Trust Agreement;
(x) the Trustee shall be under no obligation whatsoever to appear in,
prosecute or defend any action, suit or other proceeding in respect of any
Underlying Securities;
(xi) whenever in the administration of this Trust Agreement the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the Trustee
(unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, conclusively rely upon an Officers'
Certificate; and
(xii) the Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in reliance thereon, unless the Trustee's taking,
suffering or omitting such action shall have been willful misconduct, in
bad faith or negligent.
(d) As promptly as practicable after, and in any event within 10 days
after, the occurrence of any default (as such term is defined below) hereunder
with respect to any Class of Certificates, the Trustee shall transmit by mail to
the Depositor and the Holders of Certificates of such Class in accordance with
Section 313(c) of the Trust Indenture Act, notice of such default hereunder
known to the Trustee, unless such default shall have been
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cured or waived; provided, however, that, except in the case of a default in the
payment of the principal of or premium, if any, or interest on any Underlying
Security, the Trustee shall be protected in withholding such notice if and so
long as a trust committee of Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interests of the Holders
of the Certificates of such Class. For the purpose of this Section, the term
"default" means, with respect to any Class of Certificates, any event that is,
or after notice or lapse of time or both would become, an Event of Default with
respect to such Class of Certificates.
(e) Within five (5) Business Days after the receipt by the Trustee of a
written application by any three or more Certificateholders stating that the
applicants desire to communicate with other Certificateholders with respect to
their rights under this Trust Agreement or under the Certificates, and
accompanied by a copy of the form of proxy or other communication which such
applicants propose to transmit, and by reasonable proof that each such applicant
has owned its Certificates for a period of at least six (6) months preceding the
date of such application, the Trustee shall, at its election, either:
(i) afford to such applicants access to all information so furnished
to or received by the Trustee; or
(ii) inform such applicants as to the approximate number of
Certificateholders according to the most recent information so furnished to
or received by the Trustee, and as to the approximate cost of mailing to
such Certificateholders the form of proxy or other communication, if any,
specified in such application.
If the Trustee shall elect not to afford to such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to all such Certificateholders copies of the form of proxy or other
communication which is specified in such request, with reasonable promptness
after a tender to the Trustee of the material to be mailed and of payment, or
provision for the payment, of the reasonable expenses of such mailing.
Section 7.02. Between Trustee and Sub-Administrative Agents. (a) Unless
otherwise provided in a Series Supplement, the Trustee may enter into Sub-
Administration Agreements with one or more Sub-Administrative Agents in order to
delegate certain of its administrative obligations with respect to a related
Series under this Trust Agreement to such Sub-Administrative Agents; provided,
however, that (i) such delegation shall not release the Trustee from the duties,
obligations, responsibilities or liabilities arising under this Trust Agreement;
(ii) the Rating Agency Condition shall have been satisfied with respect to the
entering into of any such agreement and (iii) such agreements are consistent
with the terms of these Standard Terms and, with respect to Certificates of any
Series, the related Series Supplement. With respect to any Series (or Class
within such Series) of Certificates, each Sub-Administration Agreement shall
impose on the Sub-Administrative Agent requirements conforming to the provisions
set forth in Section 3.01 and provide for administration of the related Trust
and all or certain specified Underlying Securities for
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such Series consistent with the terms of this Trust Agreement. Additional
requirements relating to the scope and contents of any Sub-Administration
Agreement may be provided in the applicable Series Supplement. The Trustee shall
deliver to the Depositor copies of all Sub-Administration Agreements which it
enters into, and any amendments or modifications thereof, promptly upon the
Trustee's execution and delivery of any such instruments.
(b) The Trustee shall be entitled to terminate any Sub-Administration
Agreement which it enters into and the rights and obligations of any Sub-
Administrative Agent under any Sub- Administration Agreement in accordance with
the terms and conditions of any such Sub-Administration Agreement. In the event
of a termination of any Sub-Administration Agreement, the Trustee shall
simultaneously reassume direct responsibility for all obligations delegated in
such Sub-Administration Agreement without any act or deed on the part of the
applicable Sub-Administrative Agent, the Trustee shall administer directly the
related Underlying Securities or shall enter into a Sub-Administration Agreement
with a successor Sub-Administrative Agent which so qualifies under Section 7.02.
(c) Unless otherwise provided in the applicable Series Supplements, in the
event a Sub-Administrative Agent is administering one or more Underlying
Securities pursuant to a Sub-Administration Agreement, the Sub-Administrative
Agent shall be required immediately to direct the Trustee to deposit into an
Eligible Account established by such Sub-Administrative Agent (a "Sub-
Administration Account") any amounts collected with respect thereto, and all
such amounts shall be deposited into the related Certificate Account not later
than the Business Day after receipt thereof.
Section 7.03. Certain Matters Affecting the Trustee. (a) Except as
otherwise provided in this Article VII:
(i) the Trustee may request and rely upon and shall be protected in
acting or refraining from acting upon any resolution, Officer's
Certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal,
bond or other paper or document reasonably believed by it to be genuine and
to have been signed or presented by the proper party or parties;
(ii) the Trustee may consult with counsel and any Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and in
accordance with such Opinion of Counsel;
(iii) the Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Trust Agreement or to institute,
conduct or defend any litigation hereunder or in relation hereto, at the
request, order or direction of any of the Certificateholders, pursuant to
the provisions of this Trust Agreement, unless such Certificateholders
shall have offered to the Trustee reasonable security or indemnity against
the costs, expenses and liabilities which may be incurred therein or
thereby;
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(iv) the Trustee shall not be personally liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this
Trust Agreement;
(v) the Trustee shall not be bound to make any investigation into the
facts of matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal,
approval, bond or other paper or document believed by it to be genuine,
unless requested in writing to do so by Holders of the Required
Percentage--Direction of Trustee of the aggregate Voting Rights of the
affected Series (or Class or Classes within any such Series), as specified
by the applicable Series Supplement; provided, however, that if the payment
within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation
is, in the opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Trust Agreement, the
Trustee may require reasonable indemnity against such expense or liability
as a condition to taking any such action;
(vi) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian; and
(vii) the Trustee shall not be personally liable for any loss
resulting from the investment of funds held in any Certificate Account or
Reserve Account at the direction of the Depositor pursuant to Section 3.05.
(b) All rights of action under this Trust Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates of any Series (or Class within such
Series), or the production thereof at the trial or other Proceeding relating
thereto, and any such suit, action or proceeding instituted by the Trustee shall
be brought in its name for the benefit of all the Holders of such Certificates,
subject to the provisions of this Trust Agreement.
Section 7.04. Trustee Not Liable for Recitals in Certificates or Underlying
Securities. The Trustee assumes no responsibility for the correctness of the
recitals contained herein and in the Certificates or in any document issued in
connection with the sale of the Certificates (other than the signature and
authentication on the Certificates). Except as set forth in Section 7.10, the
Trustee makes no representations or warranties as to the validity or sufficiency
of this Trust Agreement or of the Certificates of any Series (other than the
signature and authentication on the Certificates) or of any Underlying Security
or related document. The Trustee shall not be accountable for the use or
application by the Depositor, of any of the Certificates or of the proceeds of
such Certificates.
Section 7.05. Trustee May Own Certificates. The Trustee in its individual
capacity or any other capacity may become the owner or pledgee of Certificates
with the same rights it would have if it were not Trustee; provided, however,
that in determining whether the
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required percentage of aggregate Voting Rights shall have consented to any
action hereunder requiring the consent of the Certificateholders, the Trustee's
interest shall be excluded.
Section 7.06. Trustees Fees and Expenses. (a) The applicable Series
Supplement shall specify the amount and circumstances of the Trustee's
compensation and the source thereof.
(b) If the Prepaid Ordinary Expenses set forth in the Series Supplement is
greater than zero, the Trustee acknowledges that the Depositor has paid to the
Trustee an amount equal to the Prepaid Ordinary Expenses, and the Trustee agrees
that the payment of such amount shall constitute full and final satisfaction of
and payment for all Ordinary Expenses.
(c) If the Prepaid Ordinary Expenses set forth in the Series Supplement is
zero, the Series Supplement may indicate that Ordinary Expenses will be paid for
by the Trust, in which case the Trustee shall be paid on a periodic basis by the
Trust or the Retained Interest at the rate or amount and on the terms provided
for in the Series Supplement. The Trustee agrees that its right to receive such
payments from the Trust shall constitute full and final satisfaction of and
payment for all Ordinary Expenses and that the Trustee shall have no claim on
payment of Ordinary Expenses from any other source, including the Depositor.
(d) If the Prepaid Ordinary Expenses set forth in the Series Supplement is
zero, the Series Supplement may provide that the Depositor shall pay to the
Trustee from time to time a fee for its services and expenses as Trustee as set
forth in the Series Supplement payable at the times set forth therein. The
Trustee agrees that its right to receive such payments from the Depositor shall
constitute full and final satisfaction of and payment for all Ordinary Expenses
and that the Trustee shall have no claim for payment of Ordinary Expenses from
the Trust. The Trustee further agrees that, notwithstanding any failure by the
Depositor to make such periodic payments of the Ordinary Expenses, the Trustee
shall continue to perform its obligations under this Trust Agreement. The
Depositor's obligations to pay Ordinary Expenses under this Trust Agreement
shall be extinguished and of no further effect upon the payment of Ordinary
Expenses due and owing on the termination of the Trust pursuant to Section 9.01
hereof.
(e) Subject to subsection 7.06(f), all Extraordinary Expenses, to the
extent not paid by a third party are, and shall be, obligations of the Trust and
when due and payable shall be satisfied solely by the Trust.
(f) The Trustee shall not take any action, including appearing in,
instituting or conducting any action or suit hereunder or in relation hereto and
is not indemnifiable under Section 7.11 hereof which, in the Trustee's opinion,
would or might cause it to incur costs, expenses or liabilities that are
Extraordinary Expenses unless (i) the Trustee is satisfied that it will have
adequate security or indemnity in respect of such costs, expenses and
liabilities, (ii) the Trustee has been instructed to do so by Certificateholders
representing not less than the Required Percentage--Remedies of the aggregate
principal amount of Certificates then outstanding, and (iii) the
Certificateholders, pursuant to the instructions given under clause (ii) above,
have agreed that such costs, expenses or liabilities shall either be (x) paid by
the
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Trustee from the Trust, in the case of a vote of 100% of the aggregate principal
amount of Certificates then outstanding, or (y) paid by the Trustee (which
payment shall be made out of its own funds and not from monies on deposit in the
Trust) in which case the Trustee shall be entitled to receive, upon demand,
reimbursement from those Certificateholders who have agreed to bear the entire
amount of such costs, expenses or liabilities, on a pro rata basis among such
Certificateholders.
Section 7.07. Eligibility Requirements for Trustee. (a) The Trustee
hereunder shall at all times be a corporation or an association which is not an
Affiliate of the Depositor (but may have normal banking relationships with the
Depositor and its Affiliates) organized and doing business under the laws of any
State or the United States, authorized under such laws to exercise corporate
trust powers which shall be eligible to act as a trustee under Section 310(a) of
the Trust Indenture Act, having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by federal or state
authority. If such corporation or association publishes reports of conditions at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section the
combined capital and surplus of such corporation or association shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
conditions so published. Such corporation or association must be rated in one of
the four highest rating categories by the Rating Agency. In the event that at
any time such Trustee shall cease to be eligible in accordance with the
provisions of this Section, such Trustee shall resign immediately in the manner
and with the effect specified in Section 7.08.
(b) In determining whether the Trustee has a conflicting interest with
respect to any Class of Certificates under Section 310(b) of the Trust Indenture
Act and this Section, each other Class of Certificate will be treated as having
been issued under an indenture other than this Trust Agreement.
Section 7.08. Resignation or Removal of the Trustee; Appointment of
Successor Trustee. (a) The Trustee may at any time resign as Trustee hereunder
by written notice of its election so to do, delivered to the Depositor, and such
resignation shall take effect upon the appointment of a successor Trustee and
its acceptance of such appointment as hereinafter provided; provided, however,
that in the event of such resignation, the Trustee shall (a) assist the
Depositor in finding a successor Trustee acceptable to the Depositor and (b)
negotiate in good faith concerning any prepaid but unaccrued fees.
(b) The Depositor or Holders of the Required Percentage--Removal of Trustee
of Certificates may at any time remove the Trustee as Trustee hereunder by
written notice delivered to the Trustee in the manner provided in Section 7.04
hereof, and such removal shall take effect upon the appointment of the successor
trustee and its acceptance of such appointment as provided in the succeeding
paragraph; provided, however, that in the event of such removal, the Depositor
shall negotiate in good faith with the Trustee in order to agree regarding
payment of the termination costs of the Trustee resulting from such removal.
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(c) Upon the designation of a successor Trustee, following either
resignation or removal of the Trustee, the Trustee shall deliver to the
successor Trustee all records relating to the Certificates in the form and
manner then maintained by the Trustee, which shall include a hard copy thereof
upon written request of the successor Trustee.
(d) If at any time the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or control
of the Trustee or of its property of affairs for the purpose of rehabilitation,
conservation or liquidation, the Depositor shall petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee. In the event the Trustee resigns or is removed, the Trustee shall
reimburse the Depositor for any fees or charges previously paid to the Trustee
in respect of duties not yet performed under this Trust Agreement which remain
to be performed by a successor Trustee.
(e) In case at any time the Trustee acting hereunder notifies the Depositor
that it elects to resign or the Depositor or Holders of the Required
Percentage--Removal of Trustee of Certificates notifies or notify the Trustee
that it or they elects or elect to remove the Trustee as Trustee, the Depositor
shall, within ninety (90) days after the delivery of the notice of resignation
or removal, appoint a successor Trustee, which shall satisfy the requirements
for a trustee under Section 7.07. If no successor Trustee has been appointed
within 90 days after the Trustee has given written notice of its election to
resign or the Depositor or Holders of the Required Percentage--Removal of
Trustee of Certificates have given written notice to the Trustee of its or their
election to remove the Trustee, as the case may be, the Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
Every successor Trustee shall execute and deliver to its predecessor and to the
Depositor an instrument in writing accepting its appointment hereunder, and
thereupon such successor Trustee, without any further act or deed, shall become
fully vested with all the rights, powers, duties and obligations of its
predecessor and for all purposes shall be the Trustee under this Trust
Agreement, and such predecessor, upon payment of all sums due it and on the
written request of the Depositor, shall execute and deliver an instrument
transferring to such successor all rights, obligations and powers of such
predecessor hereunder, and shall duly assign, transfer and deliver all right,
title and interest in the Underlying Securities and parts thereof to such
successor. Any successor Trustee shall promptly give notice of its appointment
to the Certificateholders of Certificates for which it is successor Trustee in
the manner provided in Section 7.04 hereof.
(f) Any corporation into or with which the Trustee may be merged,
consolidated or converted shall be the successor of such Trustee without the
execution or filing of any document or any further act.
Section 7.09. Appointment of Office or Agency. As specified in a Series
Supplement, the Trustee shall appoint its Corporate Trust Office as the place
where the Certificates may be surrendered for registration of transfer or
exchange, and presented for the final distribution with respect thereto, and
where notices and demands to or upon the Trustee in respect of the Certificates
of the related Series and this Trust Agreement may be served.
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Section 7.10. Representations and Warranties of Trustee. The Trustee
represents and warrants that:
(i) the Trustee is duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation or
association;
(ii) neither the execution nor the delivery by the Trustee of this
Trust Agreement, nor the consummation by it of the transactions
contemplated hereby nor compliance by it with any of the terms or
provisions hereof will contravene any Federal or State law, governmental
rule or regulation governing the banking or trust powers of the Trustee or
any judgment or order binding on it, or violate its charter documents or
by-laws or constitute a default under (or an event which, without notice or
lapse of time or both, would constitute a default) under, or result in the
breach or acceleration of any material contract, indenture, mortgage,
agreement or instrument to which it is a party or by which any of its
properties may be bound;
(iii) the Trustee has full power, authority and right to execute,
deliver and perform its duties and obligations as set forth herein and in
each Series Supplement to which it is a party and has taken all necessary
action to authorize the execution, delivery and performance by it of this
Trust Agreement;
(iv) this Trust Agreement has been duly executed and delivered by the
Trustee and constitutes the legal, valid and binding obligation of the
Trustee, enforceable in accordance with its terms, except as enforcement
may be limited by the applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally and
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law);
(v) the Trustee is not in violation, and the execution and delivery
of the Trust Agreement by the Trustee and its performance and compliance
with the terms thereof will not constitute a violation, of any order or
decree of any court or any order or regulation of any federal, state,
municipal or governmental agency having jurisdiction over the Trustee or
its properties, which violation would reasonably be expected to have a
material adverse effect on the condition (financial or otherwise) or
operations of the Trustee or its properties or on the performance of its
duties hereunder;
(vi) there are no actions or proceedings against, or investigations
of, the Trustee pending, or, to the knowledge of the Trustee, threatened,
before any court, administrative agency or other tribunal (A) that could
reasonably be expected to prohibit its entering into the Trust Agreement,
(B) seeking to prevent the issuance of the Certificates contemplated by the
Trust Agreement or (C) that could reasonably affect the performance by the
Trustee of its obligations under, or the validity or enforceability against
the Trustee of, the Trust Agreement; and
(vii) no consent, approval, authorization or order of any court,
governmental agency or body is required for the execution, delivery and
performance by the
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Trustee of, or compliance by the Trustee with, the Trust Agreement, or for
the consummation of the transactions contemplated by the Trust Agreement,
except for such consents, approvals, authorizations and orders, if any,
that have been obtained prior to the Closing Date.
The representations and warranties of the Trustee set forth in this Section
7.10 shall survive the receipt of Underlying Securities by the Trustee and shall
survive the delivery of the Trust Agreement by the Trustee to the Depositor.
Section 7.11. Indemnification of Trustee by the Depositor; Contribution.
(a) The Depositor agrees, to the extent the Trustee is not reimbursed pursuant
to Section 7.06 hereof, to indemnify the Trustee against, and hold it harmless
from, any loss, expense or liability incurred in connection with any legal
action relating to this Trust Agreement or the Certificates or the performance
of any of the Trustee's duties hereunder, other than any loss, liability or
expense (i) that constitutes a specific liability of the Trustee under this
Trust Agreement or (ii) incurred by reason of wilful misfeasance, bad faith or
negligence in the performance of the Trustee's duties hereunder or by reason of
reckless disregard of the Trustee's obligations and duties hereunder or as a
result of a breach of the Trustee's obligations and duties hereunder.
(b) If the indemnification provided for in the preceding paragraph is
invalid or unenforceable in accordance with its terms, then the Depositor shall
contribute to the amount paid or payable by the Trustee as a result of such
liability in such proportion as is appropriate to reflect the relative benefits
received by the Depositor on one hand and the Trustee as Trustee on the other
hand. For this purpose (i) the benefits received by the Depositor shall be the
aggregate amount received by it upon the sale of such Certificates, less the
costs and expenses of such sale, including the cost of acquisition of the
Underlying Securities or parts thereof evidenced thereby, and (ii) the benefits
received by the Trustee as Trustee shall be the aggregate amount of fees
received by it as Trustee, less costs and expenses incurred by it as Trustee in
relation to such Certificates. If, however, the allocation provided by the
immediately preceding two sentences is not permitted by applicable law, then the
Depositor shall contribute to such amount paid or payable by the Trustee in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Depositor on the one hand and the Trustee on the other
in connection with the actions or omissions which resulted in such liability, as
well as any other relevant equitable considerations.
(c) In case any claim shall be made or action brought against the Trustee
for any reason for which indemnity may be sought against the Depositor as
provided above, the Trustee may promptly notify the Depositor in writing setting
forth the particulars of such claim or action and the Depositor may assume the
defense thereof. In the event that the Depositor assumes the defense, the
Trustee shall have the right to retain separate counsel in any such action but
shall bear the fees and expenses of such counsel unless (i) the Depositor shall
have specifically authorized the retaining of such counsel or (ii) the parties
to such suit include the Trustee and the Depositor, and the Trustee has been
advised in writing by such counsel that one or more legal defenses may be
available to it which may not be available to
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the Depositor, in which case the Depositor shall not be entitled to assume the
defense of such suit notwithstanding its obligation to bear the reasonable fees
and expenses of such counsel.
(d) The term "liability," as used in this Section 7.11, shall include any
losses, claims, damages, expenses (including without limitation the Trustee's
reasonable costs and expenses) in defending itself against any losses, claims or
investigations of any nature whatsoever.
(e) The obligations of the Depositor under this Section 7.11 shall be in
addition to any liability which the Depositor may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of the
Trustee, and to each person, if any, who controls the Trustee within the meaning
of the Exchange Act.
(f) Notwithstanding anything to the contrary contained in this Section
7.11, the Depositor shall not be liable for settlement of any such claim by the
Trustee entered into without the prior written consent of the Depositor, which
consent shall not be unreasonably withheld.
(g) The indemnity provided in this Section shall survive the termination
or discharge of this Trust Agreement.
Section 7.12. No Liability of the Trustee with Respect to the Underlying
Securities; Certificateholders to Proceed Directly Against. (a) The sole obligor
with respect to any Underlying Security is the Underlying Securities Issuer
thereof. The Trustee shall not have any obligation on or with respect to the
Underlying Securities; and its obligations with respect to Certificates shall be
solely as set forth in this Trust Agreement.
(b) The Trustee is not authorized to proceed against the Underlying
Securities Issuer of any Underlying Security in the event of a default or to
assert the rights and privileges of Certificateholders and has no duty in
respect thereof except as expressly provided herein.
Section 7.13. The Depositor To Furnish Trustee with Names and Addresses of
Certificateholders. The Depositor will furnish to the Trustee within 15 days
after each Record Date with respect to any Distribution Date, and at such other
times as the Trustee may request in writing, within 30 days after receipt by the
Depositor of any such request, a list, in such form as the Trustee may
reasonably require, of all information in the possession or control of the
Depositor as to the names and addresses of the Certificateholders, in each case
as of a date not more than 15 days prior to the time such list is furnished;
provided, however, that so long as the Trustee is the sole Registrar, no such
list need be furnished.
Section 7.14. Preservation of Information. The Trustee shall preserve, in
as current a form as is reasonably practicable, the names and addresses of
Certificateholders contained in the most recent list furnished to the Trustee as
provided in Section 7.13, and the names and addresses of Certificateholders
received by the Trustee in its capacity as Registrar, if so
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acting. The Trustee may destroy any list furnished to it as provided in Section
7.13, upon receipt of a new list so furnished.
Section 7.15. Reports by Trustee. If required, within 60 days after each
anniversary of the execution of the Series Supplement, commencing with the first
anniversary thereof, the Trustee shall transmit to the Certificateholders, as
provided in Section 313(c) of the Trust Indenture Act, a brief report dated as
of such date, if required by Section 313(a) of the Trust Indenture Act.
Section 7.16. Trustees Application for Instructions from the Depositor.
Any application by the Trustee for written instructions from the Depositor may,
at the option of the Trustee, set forth in writing any action proposed to be
taken or omitted by the Trustee under this Trust Agreement and the date on
and/or after which such action shall be taken or such omission shall be
effective, if, but only if, the obligations of the Trustee with respect to such
proposed action or omission are not set forth reasonably clearly in these
Standard Terms and the related Series Supplement. The Trustee shall not be
liable for any action taken by, or omission of, the Trustee in accordance with a
proposal included in such application on or after the date specified in such
application (which date shall not be less than ten (10) Business Days after the
date an officer of the Depositor actually receives such application, unless any
such officer shall have consented in writing to any earlier date) unless, prior
to taking any such action (or the effective date in the case of an omission),
the Trustee shall have received written instructions in response to such
application specifying the action to be taken or omitted; provided, however,
that this provision shall not protect the Trustee from liability for any action
or omission constituting willful misconduct, bad faith or negligence.
Article VIII
Market Agent
Section 8.01. Market Agent. (a) If specified for a specific Series, on the
Closing Date the Trustee shall enter into a Market Agent Agreement with Morgan
Keegan & Company, Inc., as the initial Market Agent, in the form attached to the
related Series Supplement. The Market Agent shall serve as such under the terms
and provisions hereof and of the Market Agent Agreement. The Market Agent,
including any successor appointed pursuant hereto, shall be a member of the
National Association of Securities Dealers, Inc., have capitalization of at
least $25,000,000, and be authorized by law to perform all the duties imposed
upon it by this Trust Agreement and the Market Agent Agreement. The Market Agent
may be removed at any time by the Trustee, acting at the direction of the
Depositor; provided, however, that such removal shall not take effect until the
appointment of a successor Market Agent. The Market Agent may resign upon 30
days' written notice delivered to the Trustee. The Depositor shall use its best
efforts to appoint a successor Market Agent that is a qualified institution,
effective as of the effectiveness of any such resignation or removal.
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Article IX
Termination
Section 9.01. Termination of Trust. (a) The respective obligations and
responsibilities under this Trust Agreement of the Depositor, and the Trustee
(other than the obligations of the Trustee to make distributions to Holders of
the Certificates of any given Series as hereafter set forth and to provide
information reports and information tax reporting) shall terminate upon the
distribution to such Holders of all amounts held in all the Accounts for such
Series and required to be paid to such Holders pursuant to this Trust Agreement
on the Distribution Date coinciding with the final payment on or other
liquidation (which may include redemption or other purchase thereof by the
applicable Underlying Securities Issuer) (or any Advance with respect thereto)
of the last Underlying Security remaining in the Trust for such Series or the
disposition of all property acquired upon liquidation of any such Underlying
Security; provided, however, that in no event shall the trust created hereby
continue beyond the expiration of 21 years from the death of the last survivor
of the descendants of Joseph P. Kennedy, the late ambassador of the United
States to the Court of St. James, living on the date hereof.
(b) Written notice of any termination shall be provided as set forth in
Section 10.05.
(c) Upon presentation and surrender of the Certificates by the
Certificateholders on the Final Scheduled Distribution Date, or the Distribution
Date coinciding with or next following the earlier to occur of the occurrences
specified in 9.01(a), with respect to the applicable Series of Certificates, the
Trustee shall distribute to each Holder presenting and surrendering its
Certificates (i) the amount otherwise distributable on such Distribution Date in
accordance with Section 4.01 in respect of the Certificates so presented and
surrendered, or (ii) as specified in the applicable Series Supplement, if in
connection with the Trustee's sale of all the remaining Underlying Securities.
Any funds not distributed on such Distribution Date shall be set aside and held
in trust for the benefit of Certificateholders not presenting and surrendering
their Certificates in the aforesaid manner, and shall be disposed of in
accordance with this Section 9.01 and Section 4.01 hereof. Immediately following
the deposit of funds in trust hereunder, the Trust for such Series shall
terminate.
Article X
Miscellaneous Provisions
Section 10.01. Amendment. (a) This Trust Agreement may be amended from
time to time by the Depositor and the Trustee without the consent of any of the
Certificateholders for any of the following purposes: (i) to cure any ambiguity
or to correct or supplement any provision herein which may be defective or
inconsistent with any other provision herein or to provide for any other terms
or modify any other provisions with respect to matters or questions arising
under this Trust Agreement which shall not adversely affect the interests of the
Holders in any material respect; or (ii) to evidence and provide for the
acceptance of
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appointment hereunder of a change in Trustee as Trustee for a Series of
Certificates subsequent to the Closing Date for such Series, and to add to or
change any of the provisions of this Trust Agreement as shall be necessary to
provide for or facilitate the administration of the separate Trusts hereunder by
more than one trustee, pursuant to the requirements of Section 5.01 hereof; or
(iii) to evidence and provide for the acceptance of appointment hereunder by a
successor Trustee with respect to the Certificate of one or more Series or to
add or change any of the provisions of this Trust Agreement as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder; or (iv) to provide for the issuance of a new Series of Certificates
pursuant to a Series Supplement issued hereunder pursuant to Sections 5.01 and
5.11 hereof; provided, however, that in the case of any amendment the Rating
Agency Condition shall be satisfied with respect to such amendment and that no
such amendment shall cause any Trust created hereunder to fail to qualify as a
fixed investment trust for federal income tax purposes.
(b) Without limiting the generality of the foregoing, with respect to any
Series this Trust Agreement may also be modified or amended from time to time by
the Depositor and the Trustee with the consent of the Holders of Certificates
representing the Required Percentage--Amendment of the aggregate Voting Rights
of those Certificates to which such modification or amendment relates for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Trust Agreement or of modifying in any manner the
rights of the Holders of Certificates; provided, however, that no such amendment
shall (i) reduce in any manner the amount of, or delay the timing of, payments
received on Underlying Securities which are required to be distributed on any
Certificate without the consent of the Holders of such Certificates, (ii)
adversely affect in any material respect the interests of the Holders of any
Series (or Class within such Series) of Certificates in a manner other than as
described in (i), without the consent of the Holders of Certificates of such
Series or Class evidencing not less than the Required Percentage--Amendment of
the aggregate Voting Rights of such Series or Class or (iii) reduce the
percentage of aggregate Voting Rights required by (ii), as described in (ii),
without the consent of the Holders of all Certificates of such Series or Class
then Outstanding.
Notwithstanding any other provision of this Trust Agreement, for purposes
of the giving or withholding of consents pursuant to this Section 10.01,
Certificates registered in the name of the Depositor or the Trustee or any
affiliate thereof shall be entitled to Voting Rights with respect to matters
affecting such Certificates; and provided, further, that in the event the Rating
Agency Condition is not satisfied with respect to such modification or
amendment, the Required Percentage--Amendment shall be increased to require an
aggregate percentage of the aggregate Voting Rights in the amount specified in
the applicable Series Supplement. Notwithstanding any other provision of this
Trust Agreement, this Section 10.02(b) shall not be amended without the
unanimous consent of the Holders of all such Certificates.
(c) Promptly after the execution of any such amendment or modification,
the Trustee shall furnish a copy of such amendment or modification to each
Certificateholder of the affected Series or Class and to the Rating Agency. It
shall not be necessary for the consent of Certificateholders under this Section
to approve the particular form of any
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proposed amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
Section 10.02. Limitation on Rights of Certificateholders. (a) The death
or incapacity of any Certificateholder shall not operate to terminate this Trust
Agreement or the Trust, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the applicable Trust,
nor otherwise affect the rights, obligations and liabilities of the parties
hereto.
(b) No Certificateholder of a given Series shall have any right to vote
(except as expressly provided for herein) or in any manner otherwise control the
operation and management of any Trust, or the obligations of the parties hereto,
nor shall anything herein set forth, or contained in the terms of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken by the parties to this Trust Agreement pursuant to any provision
hereof.
(c) No Certificateholder of a given Series shall have any right by virtue
of any provision of this Trust Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Trust
Agreement, unless (i) such Holder previously shall have given to the Trustee a
written notice of breach and of the continuance thereof, (ii) the Holders of
Certificates of such Series evidencing not less than the Required Percentage--
Remedies of the aggregate Voting Rights of such Series shall have made written
request upon the Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, (iii) the Trustee, for 15 days after its receipt of
such notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding, and (iv) no direction
inconsistent with such written request has been given to the Trustee during such
15-day period by Certificateholders evidencing not less than the Required
Percentage--Remedies of the aggregate Voting Rights of such Series. It is
understood and agreed that the Trustee shall not be obligated to make any
investigation of matters arising under this Trust Agreement or to institute,
conduct or defend any litigation hereunder or in relation hereto at the request,
order or direction of any Certificateholders unless such Certificateholders have
offered to the Trustee the reasonable indemnity referred to above. It is further
understood and agreed, and expressly covenanted by each Certificateholder of
each Series with every other Certificateholder of such Series and the Trustee,
that no one or more Holders of Certificates of such Series shall have any right
in any manner whatever by virtue of any provision of this Trust Agreement to
affect, disturb or prejudice the rights of the Holders of any other of the
Certificates of such Series, or to obtain or seek to obtain priority over or
preference to any other such Holder, or to enforce any right under this Trust
Agreement, except in the manner herein provided and for the equal, ratable and
common benefit of all Certificateholders of such Series. For the protection and
enforcement of the provisions of
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this Section, each and every Certificateholder and the Trustee shall be entitled
to such relief as can be given either at law or in equity.
Section 10.03. Governing Law. This Trust Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely within the State of New York and
without giving effect to such state's principles of conflicts of law to the
extent that the application of the laws of another jurisdiction would be
required thereby, and the obligations, rights and remedies of the Parties
hereunder shall be determined in accordance with such laws.
Section 10.04. Notices. (a) All directions, demands and notices hereunder
shall be in writing and shall be delivered as set forth in the applicable Series
Supplement.
(b) Any notice required to be provided to a Holder of a Registered
Certificate shall be given by first class mail, postage prepaid, at the last
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Trust Agreement shall be conclusively
presumed to have been duly given when mailed, whether or not the
Certificateholder receives such notice.
(c) Any and all notices to be given to the Depositor shall be deemed to
have been duly given if sent by facsimile transmission to the Depositor at 50
North Front Street, Memphis, Tennessee 38103, Attention: President, through
facsimile transmission number (901) 579-4363, telephone confirmation number
(901) 524-4100. The Depositor may change this information by written notice to
the Trustee.
(d) Any and all notices to be given to the Trustee shall be deemed to have
been duly given if sent by facsimile transmission to the Trustee at 707 Virginia
Street East, 2nd Floor, Charleston, West Virginia 25301, Attention: Corporate
Trust Department, facsimile transmission number (304) 348-7978, telephone
confirmation number (304) 348-4416. The Trustee may change this information by
notice to the Depositor.
(e) Any and all notices to be given to the Swap Counterparty, if any, will
be specified in the Series Supplement.
Section 10.05. Notice to Rating Agencies. (a) The Trustee shall use its
best efforts promptly to provide notice to each Rating Agency with respect to
each of the following of which it has actual knowledge:
(i) any change or amendment to this Trust Agreement;
(ii) the resignation or termination of the Trustee;
(iii) the final payment to Holders of the Certificates of any Class;
(iv) any change in the location of the Certificate Account; and
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(v) any event that would result in the inability of the Trustee to
make Advances.
(b) In addition, the Trustee shall promptly furnish to each Rating Agency
copies of each report to Certificateholders described in Section 4.02.
(c) Any such notice pursuant to this Section shall be in writing and shall
be deemed to have been duly given if personally delivered or mailed by first
class mail, postage prepaid, or by express delivery service to each Rating
Agency at the address specified below or in the applicable Series Supplement.
(d) (i) Any and all notices to be given to Moody's shall be deemed to have
been duly given if sent by facsimile transmission to Moody's at Moody's
Investors Service, Inc., 99 Church Street, New York, New York 10007, Attention:
CBO/CLO Monitoring Department, facsimile transmission number (212) 553-0355,
telephone confirmation number (212) 553-1494. Moody's may change this
information by notice to the Depositor and the Trustee.
(ii) Any and all notices to be given to S&P shall be deemed to have been
duly given if sent by facsimile transmission to S&P at Standard & Poor's Rating
Group, 26 Broadway, New York, New York 10004, Attention: Structured Finance
Surveillance Group, facsimile transmission number (212) 208-0030, telephone
confirmation number (212) 208-1191. S&P may change this information by notice to
the Depositor and the Trustee.
Section 10.06. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Trust Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Trust Agreement and shall in no way affect the
validity or enforceability of the other provisions of this Trust Agreement or of
the Certificates or the rights of the Holders thereof.
Section 10.07. Grant of Security Interest. (a) It is the express intent of
the parties hereto that each conveyance of any Underlying Securities by the
Depositor to the Trustee be, and be construed as, a sale of the Underlying
Securities by the Depositor and not a pledge of any Underlying Securities by the
Depositor to secure a debt or other obligation of the Depositor.
(b) In the event that, notwithstanding the aforementioned intent of the
parties, any Underlying Securities are held to be property of the
Depositor, then, (x) it is the express intent of the parties that such
conveyance be deemed a pledge of such Underlying Securities by the
Depositor to the Trustee to secure a debt or other obligation of the
Depositor and (y)(1) this Trust Agreement shall also be deemed to be a
security agreement within the meaning of Articles 8 and 9 of the Uniform
Commercial Code as in effect from time to time in the State of New York, or
such other State as may be specified in the related Series Supplement; (2)
the conveyance provided for in Section 2.01 hereof shall be deemed to be a
grant by the Depositor to the Trustee of a security interest in all the
Depositor's right, title
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and interest in and to such Underlying Securities and all amounts payable to the
holders of such Underlying Securities in accordance with the terms hereof and
all proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property including all amounts from time
to time held or invested in the applicable Certificate Account, whether in the
form of cash, instruments, securities or other property; (3) the obligations
secured by such security agreement shall be deemed to be all the Depositor's
obligations under this Trust Agreement, including the obligation to provide to
the Certificateholders the benefits of this Trust Agreement relating to such
Underlying Securities and the applicable Trust; and (4) notifications to persons
holding such property, and acknowledgments, receipts or confirmations from
persons holding such property, shall be deemed notifications to, or
acknowledgements, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of the Trustee for the purpose of perfecting
such security interest under applicable law.
Accordingly, the Depositor hereby grants to the Trustee a security interest
in the Underlying Securities and all other property described in clause (y)(2)
of the preceding paragraph, for the purpose of securing to the Trustee the
performance by the Depositor of the obligations described in clause (y)(3) of
the preceding paragraph. Notwithstanding the foregoing, the parties hereto
intend the Grant pursuant to Section 2.01 to be a true, absolute and
unconditional sale of the Underlying Securities and assets constituting the
applicable Trust by the Depositor to the Trustee.
(c) The Depositor and the Trustee shall to the extent consistent with this
Trust Agreement, take such actions as may be necessary to ensure that, if this
Trust Agreement were deemed to create a security interest in the Underlying
Securities, such security interest would be deemed to be a perfected security
interest of first priority under applicable law and will be maintained as such
for so long as any of the Underlying Securities remain outstanding. Without
limiting the generality of the foregoing, the Trustee shall file, or shall cause
to be filed, all filings necessary to maintain the effectiveness of any original
filings necessary under the Uniform Commercial Code as in effect in any
jurisdiction to perfect the Trustee's security interest in or lien on the
Underlying Securities, including (x) continuation statements and (y) such other
statements as may be occasioned by (1) any change of name of the Depositor or
the Trustee, (2) any change of location of the place of business or the chief
executive office of the Depositor or (3) any transfer of any interest of the
Depositor in any Underlying Security.
Section 10.08. Nonpetition Covenant. Notwithstanding any prior termination
of this Trust Agreement, each of the Trustee (including any Sub-Administrative
Agent, Authenticating Agent, or Paying Agent) and the Depositor agrees that it
shall not, until the date which is one year and one day after the Closing Date
acquiesce, petition or otherwise invoke or cause the Underlying Securities
Issuer to invoke the process of the United States of America, 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 Underlying
Securities Issuer under a Federal or state bankruptcy, insolvency or similar law
or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator
or other similar official of the
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<PAGE>
Underlying Securities Issuer or all or any part of the property or assets of the
Underlying Securities Issuer or ordering the winding up or liquidation of the
affairs of the Underlying Securities Issuer.
Section 10.09. No Recourse. Neither the Trustee (including any Sub-
Administrative Agent, Authenticating Agent, or Paying Agent) nor the Depositor
shall have any recourse to the Underlying Securities, except for as specifically
provided in the related Series Supplement.
Section 10.10. Article and Section References. All article and section
references used in these Standard Terms, unless otherwise provided, are to
articles and sections in these Standard Terms.
Section 10.11. Counterparts. These Standard Terms may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute one and the
same instrument.
Section 10.12. Trust Indenture Act Controls. This Trust Agreement is
subject to the provisions of the Trust Indenture Act and if any provision of
this Trust Agreement limits, qualifies or conflicts with another provision
hereof which is required to be included in this Trust Agreement by any of the
provisions of the Trust Indenture Act, such required provision shall control.
The Trustee agrees to take all actions within its control to prevent these
Standard Terms, as supplemented by any Series Supplements, from failing to
qualify under the Trust Indenture Act.
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<PAGE>
In Witness Whereof, the Depositor and the Trustee have caused their names
to be signed hereto by their respective officers thereunto duly authorized, in
each case as of the day and year first above written.
SOUTHPOINT STRUCTURED ASSETS, INC., as
Depositor
By: ----------------------------------
Name: C. David Ramsey
Title: President
BANK ONE, WEST VIRGINIA, N.A., as
Trustee
By: ----------------------------------
Name: Teresa L. Davis
Title: Vice President
<PAGE>
Reconciliation and tie between the Trust Agreement dated as of November,
1996, and the Trust Indenture Act of 1939 as amended. This reconciliation does
not constitute part of the Trust Agreement.
<TABLE>
<CAPTION>
TRUST INDENTURE ACT
OF 1939 SECTION TRUST AGREEMENT SECTION
<S> <C> <C>
310(a)(1) 7.07
(a)(2) 7.07
(a)(5) 7.07
312(a) 7.13
313(a) 7.15
314(a) 3.10
(b)
(c)(1) 1.03
(c)(2) 1.03
(e) 1.03
315(a)(1) 7.01
(a)(2) 7.03
(b) 7.01(d)
(d) 7.01(c)
316(a)(1)(A) 5.18
(a)(1)(B) 5.19
(b) 5.20
(c) 1.03(b)
317(a)(1) 5.17
(b) 5.12
318(a) 10.12
</TABLE>
<PAGE>
===============================================================================
Series Supplement
Treasury Security-Backed Trust, Series 1996-1
between
Southpoint Structured Assets, Inc.,
as Depositor
and
Bank One, West Virginia, N.A.,
as Trustee
Treasury Security-Backed Certificates
Series 1996-1
Dated as of November 27, 1996
===============================================================================
<PAGE>
TABLE OF CONTENTS
Section 1. Incorporation of Standard Terms................................. 1
Section 2. Definitions..................................................... 2
Section 3. Designation of Trusts and Certificates.......................... 7
Section 4. Call Warrants................................................... 8
Section 5. Retained Interests.............................................. 9
Section 6. Satisfaction of Conditions to Initial Execution and
Delivery of Trust Certificates.................................. 9
Section 7. Distributions................................................... 9
Section 8. Trustee's Fees..................................................10
Section 9. Early Termination...............................................10
Section 10. Events of Default...............................................11
Section 11. Assignment of Call Warrants and Retained
Interests.......................................................11
Section 12. Information to Warrantholders and Holders of
Retained Interests..............................................11
Section 13. Miscellaneous...................................................12
Section 14. Notices.........................................................12
Section 15. Governing Law...................................................13
Section 16. Counterparts....................................................13
Schedule I Underlying Securities Schedule
Schedule II Description of the Class A Call Warrant
Schedule III Description of the Class B Call Warrant
Schedule IV Intentionally left blank
Schedule V Description of the Class A Retained Interest
Schedule VI Description of the Class B Retained Interest
Exhibit A Standard Terms for Trust Agreements
Exhibit B-1 Form of Class A Certificate
Exhibit B-2 Form of Class B Certificate
Exhibit C Form of Assignment for Call Warrant or Retained Interest
Exhibit D Form of Transferee Letter for Call Warrant or
Retained Interest
-i-
<PAGE>
TREASURY SECURITY-BACKED CERTIFICATES
SERIES SUPPLEMENT
SERIES 1996-1
Series Supplement, Series 1996-1, dated as of November 27, 1996 (the
"Series Supplement"), by and between Southpoint Structured Assets, Inc., as
Depositor (the "Depositor"), and Bank One, West Virginia, N.A., as Trustee (the
"Trustee").
WITNESSETH
Whereas, the Depositor desires to create the Class A Trust and the Class B
Trust designated herein (individually each a "Trust", collectively, the
"Trusts") by executing and delivering this Series Supplement, which shall
incorporate the terms of the Standard Terms for Trust Agreements, dated as of
November 1, 1996 (the "Standard Terms"; together with this Series Supplement,
the "Trust Agreement"), by and between the Depositor and the Trustee, as
modified by this Series Supplement;
Whereas, the Depositor desires to deposit the Class A Treasury Note set
forth on Schedule I hereto into the Class A Trust (subject to the Class A Call
Warrant and exclusive of the Class A Retained Interest) and the Class B Treasury
Note set forth on Schedule I hereto into the Class B Trust (subject to the Class
B Call Warrant and exclusive of the Class B Retained Interest);
Whereas, in connection with the creation of the Class A Trust and the Class
B Trust and the deposit therein of the Class A Treasury Note and the Class B
Treasury Note, respectively, it is desired to provide for (i) the issuance of
the Class A Certificates and the Class B Certificates (collectively, the
"Certificates") evidencing undivided interests in the Class A Trust and the
Class B Trust, respectively, (ii) the retention by the Depositor of the Class A
Call Warrant and the Class B Call Warrant (collectively, the "Call Warrants")
evidencing the right to purchase, under the terms set forth herein, the Class A
Treasury Note and the Class B Treasury Note, respectively, and (iii) the
retention by the Depositor of the Class A Retained Interest and the Class B
Retained Interest (collectively, the "Retained Interests") evidencing the right
to receive a portion of the interest payments made on the Class A Treasury Note
and the Class B Treasury Note, respectively; and
Whereas, the Trustee has joined in the execution of the Standard Terms and
this Series Supplement to evidence the acceptance by the Trustee of the Trusts;
Now, therefore, in consideration of the foregoing premises and the mutual
covenants expressed herein, it is hereby agreed by and between the Depositor and
the Trustee as follows:
Section 1. Incorporation of Standard Terms. All of the provisions of the
Standard Terms, a copy of which is attached hereto as Exhibit A, are hereby
incorporated herein by
<PAGE>
reference in their entirety and this Series Supplement and the Standard Terms
shall form a single agreement between the parties. In the event of any
inconsistency between the provisions of this Series Supplement and the
provisions of the Standard Terms, the provisions of this Series Supplement will
control with respect to the transactions described herein.
Section 2. Definitions. (a) Except as otherwise specified herein or as
the context may otherwise require, the following terms shall have the respective
meanings set forth below for all purposes under this Series Supplement. (Section
2(b) below sets forth terms listed in the Standard Terms which are not
applicable to this Series.) Capitalized terms used but not defined herein shall
have the meanings assigned to them in the Standard Terms.
"Available Funds" shall mean with respect to a Class A Distribution Date,
the Class A Available Funds and with respect to a Class B Distribution Date, the
Class B Available Funds.
"Certificate" shall mean any one of the Class A Certificates or the Class B
Certificates.
"Certificates" shall mean the Class A Certificates and the Class B
Certificates.
"Class" shall mean all of the Class A Certificates or the Class B
Certificates, as applicable.
"Class A Available Funds" shall mean the sum of all amounts received on or
with respect to the Class A Treasury Note (including investment income on
Eligible Investments associated with the investment of any funds in the Class A
Trust) during the preceding Collection Period.
"Class A Call Warrant" shall mean the "Series 1996-1 Class A Call Warrant"
(as described on Schedule II hereto) evidencing the right to purchase the Class
A Treasury Note on an Early Termination Date pursuant to the Early Termination
provisions of Section 9 hereof.
"Class A Certificates" shall mean those certificates in substantially the
form set forth in Exhibit B-1 hereto.
"Class A Collection Period" shall mean, (i) with respect to each February
15 Distribution Date, the period beginning on the day after the August 15
Distribution Date of the previous year and ending on such February 15
Distribution Date, inclusive, except for the February 15, 1997 Distribution
Date, as to which the Class A Collection Period shall be the period beginning on
Closing Date and ending on such February 15, 1997 Distribution Date, inclusive
and, (ii) with respect to each August 15 Distribution Date, the period beginning
on the day after the February 15 Distribution Date of that year and ending on
such August 15 Distribution Date, inclusive; provided, however, that clauses (i)
and (ii) shall be subject to Section 13(f) hereof.
-2-
<PAGE>
"Class A Distribution Date" shall mean the February 15 and August 15 of
each year (or if such date is not a Business Day, the next succeeding Business
Day), commencing on February 15, 1997 and ending on the earlier of the Class A
Final Scheduled Distribution Date and the applicable Early Termination Date.
"Class A Final Scheduled Distribution Date" shall mean August 15, 2002.
"Class A Interest Strip" shall mean, on any Class A Distribution Date,
accrued but unpaid interest on the outstanding principal balance of the Class A
Treasury Note, computed at an annual rate of .125%.
"Class A Pass-Through Rate" shall mean 6.25% per annum.
"Class A Retained Interest" shall mean the right to receive the Class A
Interest Strip on each Class A Distribution Date. Collections in respect of the
Class A Retained Interest shall be deposited in the Certificate Account for the
Class A Certificates.
"Class A Treasury Note" shall mean the United States Treasury Note listed
on the Underlying Securities Schedule attached hereto as Schedule I.
"Class B Available Funds" shall mean the sum of all amounts received on or
with respect to the Class B Treasury Note (including investment income on
Eligible Investments associated with the investments of any funds in the Class B
Trust) during the preceding Collection Period.
"Class B Call Warrant" shall mean the "Series 1996-1 Class B Call Warrant"
(as described on Schedule III hereto) evidencing the right to purchase the Class
B Treasury Note on an Early Termination Date pursuant to the Early Termination
provisions of Section 9 hereof.
"Class B Certificates" shall mean those certificates in substantially the
form set forth in Exhibit B-2 hereto.
"Class B Collection Period" shall mean, (i) with respect to each May 15
Distribution Date, the period beginning on the day after the November 15
Distribution Date of the previous year and ending on such May 15 Distribution
Date, inclusive, except for the May 15, 1997 Distribution Date, as to which the
Collection Period shall be the period beginning on Closing Date and ending on
such May 15, 1997 Distribution Date, inclusive and, (ii) with respect to each
November 15 Distribution Date, the period beginning on the day after the May 15
Distribution Date of that year and ending on such November 15 Distribution Date,
inclusive; provided, however, that clauses (i) and (ii) shall be subject to
Section 13(f) hereof.
"Class B Distribution Date" shall mean the May 15 and November 15 of each
year (or if such date is not a Business Day, the next succeeding Business Day),
commencing on
-3-
<PAGE>
May 15, 1997 and ending on the earlier of the Class B Final Scheduled
Distribution Date and the applicable Early Termination Date.
"Class B Final Scheduled Distribution Date" shall mean May 15, 2006.
"Class B Interest Strip" shall mean, on any Class B Distribution Date,
accrued but unpaid interest on the outstanding principal balance of the Class B
Treasury Note, computed at an annual rate of .075%.
"Class B Pass-Through Rate" shall mean 6.80% per annum.
"Class B Retained Interest" shall mean the right to receive the Class B
Interest Strip on each Class B Distribution Date. Collections in respect of the
Class B Retained Interest shall be deposited in the Certificate Account for the
Class B Certificates.
"Class B Treasury Note" shall mean the United States Treasury Note listed
on the Underlying Securities Schedule attached hereto as Schedule I.
"Closing Date" shall mean November 27, 1996.
"Corporate Trust Office" shall mean the office of Bank One West Virginia,
N.A. located at 707 Virginia Street East, 2nd Floor, Charleston, West Virginia
25301, Attention: Corporate Trust Department.
"Currency" shall mean United States dollars.
"Cut-off Date" shall mean November 27, 1996.
"Depository" shall mean the Depository Trust Company.
"Distribution Date" shall mean the Class A Distribution Date or the Class B
Distribution Date, as applicable.
"Early Termination" shall mean the payment in full of a Class of
Certificates by the applicable Trust pursuant to Section 9 hereof.
"Early Termination Date" shall mean any day on or after May 15, 1997.
"Early Termination Price" shall mean, with respect to each Class, the
outstanding principal amount of the Certificates subject to Early Termination
plus accrued interest to the Early Termination Date.
"Eligible Account" shall have the meaning specified in the Standard Terms.
"Eligible Investments" shall be United States Treasury bills.
-4-
<PAGE>
"Event of Default" shall mean (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), and (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.
"Interest Accrual Period" shall mean for any Distribution Date, the period
from and including the preceding Distribution Date (or in the case of the first
Interest Accrual Period, from and including the Cut-off Date) to but excluding
the current Distribution Date.
"Interest Strip" for any Class A Distribution Date, means the Class A
Interest Strip and for any Class B Distribution Date, means the Class B Interest
Strip.
"Liquidation Price" shall mean, with respect to any Underlying Security,
par plus accrued interest to the Early Termination Date.
"Ordinary Expenses" shall mean the compensation due the Trustee for
Ordinary Expenses (as defined in the Standard Terms), which shall be fixed and
prepaid by the Depositor.
"Pass-Through Rate" shall mean the Class A Pass-Through Rate or the Class B
Pass-Through Rate, as applicable.
"Prepaid Ordinary Expenses" shall be $13,600 for this Series.
"Prospectus Supplement" shall mean the Prospectus Supplement, dated
November 21, 1996, relating to the Certificates.
"Rating Agency" shall mean S&P.
"Rating Agency Condition" shall have the meaning specified in the Standard
Terms.
"Record Date" shall mean the day immediately preceding each Distribution
Date.
"Required Interest" shall have the meaning specified in the Standard
Terms.
"Required Principal" shall have the meaning specified in the Standard
Terms; provided, however, that in the case of an Early Termination, Required
Principal shall be the Early Termination Price.
"Required Rating" shall mean "AAA", as assigned by S&P as of the Closing
Date.
"Retained Interest" shall mean the Class A Retained Interest or the Class B
Retained Interest, as applicable.
-5-
<PAGE>
"Retained Interestholder" shall mean initially the Depositor and upon
assignment thereof the holder of a Class A Retained Interest or a Class B
Retained Interest, as applicable.
"S&P" shall mean Standard & Poor's Ratings Services, a subsidiary of The
McGraw-Hill Companies, Inc.
"Series" shall mean Series 1996-1.
"Trust Property" shall mean, with respect to each Trust, (i) the applicable
Underlying Security described on Schedule I (exclusive of the applicable Call
Warrant and the applicable Retained Interest) hereto; (ii) all payments on or
collections in respect of such Underlying Security accrued on or after the Cut-
off Date (exclusive of the applicable Interest Strip) together with any proceeds
thereof; and (iii) all funds from time to time deposited with the Trustee
relating to the applicable Class of Certificates and any investments thereof,
together with any and all income, proceeds and payments with respect thereto.
"Underlying Securities Issuer" shall mean the United States of America.
"Voting Rights" shall, in the entirety, be allocated separately among each
Trust and to the Certificateholders therein in proportion to the then
outstanding principal balances of the Underlying Securities and their respective
Certificates, respectively.
"Warrantholder" shall mean initially the Depositor and upon assignment
thereof the holder of a Class A Call Warrant or a Class B Call Warrant, as
applicable.
(b) The terms listed below are not applicable to this Series.
"Accounting Date"
"Advance"
"Basic Documents"
"Call Premium Percentage"
"Credit Support"
"Credit Support Instrument"
"Credit Support Provider"
"Floating Pass-Through Rate"
"Floating Rate Certificate"
-6-
<PAGE>
"Guaranteed Investment Contract"
"Letter of Credit"
"Limited Guarantor"
"Limited Guaranty"
"Market Agent"
"Market Agent Agreement"
"Notional Amount"
"Required Premium"
"Requisite Reserve Amount"
"Reserve Account"
"Sales Procedure"
"Sub-Administration Agreement"
"Sub-Administration Agent"
"Surety Bond"
"Swap Agreement"
"Swap Counterparty"
"Swap Distribution Amount"
"Swap Guarantee"
"Swap Guarantor"
"Swap Receipt Amount"
"Swap Termination Payment"
Section 3. Designation of Trusts and Certificates. (a) The Trusts created
hereby shall be known as (i) the "Treasury Security-Backed Trust, Series 1996-1,
Class A" and the Certificates evidencing certain undivided ownership interests
therein shall be known as "Treasury Security-Backed Certificates, Series 1996-1,
Class A" and (ii) the "Treasury
-7-
<PAGE>
Security-Backed Trust, Series 1996-1, Class B" and the Certificates evidencing
certain individual ownership interests therein shall be known as "Treasury
Security-Backed Certificates, Series 1996-1, Class B." The holders of the Class
A Certificate shall have no rights or interests with respect to the Class B
Trust and the related Trust Property therein. The holders of the Class B
Certificates shall have no rights or interests with respect to the Class A Trust
and the related Trust Property therein.
(b) It is the intention of all of the parties hereto that the transfer of
the Trust Property hereunder and under the Standard Terms shall constitute a
sale and each of the two Trusts created hereunder and thereunder shall
constitute a fixed investment trust for federal income tax purposes under
Treasury Regulation Section 301.7701-4 and a grantor trust under the Internal
Revenue Code of 1986, as amended, and all parties hereto and thereto agree to
treat the Trusts, 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.
(c) The Certificates shall be held through the Depository in book-entry
form and shall be substantially in the form attached hereto as Exhibit B. The
Certificates shall be issued in minimum denominations of $1,000 and integral
multiples of $1,000 in excess thereof. Except as provided in the Standard Terms,
the Trusts shall not issue additional Certificates or incur any indebtedness.
Section 4. Call Warrants. (a) The Trust Property of each Trust created
hereby does not include the Call Warrants. The transfer and exchange of the Call
Warrants shall be administered by the Trustee on behalf of the Depositor.
(b) The Class A Call Warrant will be uncertificated and shall be as
described in Schedule II attached hereto. The Class A Call Warrant will be
retained by the Depositor and may be transferred by the Depositor or a
Warrantholder to another party in accordance with the provisions of Section 11
hereof at the sole option of the Depositor or the Warrantholder, as applicable,
without the consent of the Certificateholders or any other party. The beneficial
ownership interest in the Class A Call Warrant will be recorded on the records
of the Trustee. Notwithstanding any other provision of this Trust Agreement, the
Trustee shall not agree to any amendment or modification of this Trust Agreement
(including the Standard Terms) which would adversely affect in any material
respect the holder of a Class A Call Warrant without the consent of such
Warrantholder.
(c) The Class B Call Warrant will be uncertificated and shall be as
described in Schedule III attached hereto. The Class B Call Warrant will be
retained by the Depositor and may be transferred by the Depositor or a
Warrantholder to another party in accordance with the provisions of Section 11
hereof at the sole option of the Depositor or the Warrantholder, as applicable,
without the consent of the Certificateholders or any other party. The beneficial
ownership interest in the Class B Call Warrant will be recorded on the records
of the Trustee. Notwithstanding any other provision of this Trust Agreement, the
Trustee shall not agree to any amendment or modification of this Trust Agreement
-8-
<PAGE>
(including the Standard Terms) which would adversely affect in any material
respect the holder of a Class B Call Warrant without the consent of such
Warrantholder.
Section 5. Retained Interests. (a) The Trust Property of each Trust does
not include the Retained Interests. The transfer and exchange of the Retained
Interests shall be administered by the Trustee on behalf of the Depositor.
(b) The Class A Retained Interest will be uncertificated and shall be as
described in Schedule V attached hereto. The Class A Retained Interest will be
retained by the Depositor and may be transferred by the Depositor or a Retained
Interestholder to another party in accordance with the provisions of Section 11
hereof at the sole option of the Depositor or the Retained Interestholder, as
applicable, without the consent of the Certificateholders or any other party.
The beneficial ownership interest in the Class A Retained Interest will be
recorded on the records of the Trustee. Notwithstanding any other provision of
this Trust Agreement, the Trustee shall not agree to any amendment or
modification of this Trust Agreement (including the Standard Terms) which would
adversely affect in any material respect the holder of a Class A Retained
Interest without the consent of such holder.
(c) The Class B Retained Interest will be uncertificated and shall be as
described in Schedule VI attached hereto. The Class B Retained Interest will be
retained by the Depositor and may be transferred by the Depositor or a Retained
Interestholder to another party in accordance with the provisions of Section 11
hereof at the sole option of the Depositor or the Retained Interestholder, as
applicable, without the consent of the Certificateholders or any other party.
The beneficial ownership interest in the Class B Retained Interest will be
recorded on the records of the Trustee. Notwithstanding any other provision of
this Trust Agreement, the Trustee shall not agree to any amendment or
modification of this Trust Agreement (including the Standard Terms) which would
adversely affect in any material respect the holder of a Class B Retained
Interest without the consent of such holder.
Section 6. 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 the Underlying Securities
Schedule; and
(ii) a letter from the Rating Agency indicating that they have
assigned the Required Rating to the Certificates.
Section 7. Distributions. (a) With respect to each Trust created hereunder,
on each Distribution Date other than the Early Termination Date, the Trustee
shall apply Available Funds in the Certificate Account as follows (subject to
SECTION 7(c) below) without regard to Available Funds in the Certificate Account
relating to another Class of Certificates:
-9-
<PAGE>
(i) first, to the applicable Class of Certificateholders and holder
of the Retained Interest, proportionately to the ratio of their respective
entitlements to interest, the Required Interest and the Interest Strip,
respectively, and to the Depositor, the Initial Accrued Interest, but only
with respect to each Class; and
(ii) second, to the applicable Class of Certificateholders, Required
Principal, if any, but only with respect to each Class.
(b) With respect to each Trust created hereunder, on an Early Termination
Date, if applicable, the Trustee shall apply Available Funds in the Certificate
Account as follows without regard to Available Funds in the Certificate Account
relating to another Class of Certificates:
(i) first, to the applicable Class of Certificateholders and the
holder of the Retained Interest, proportionately to the ratio of their
respective entitlements to interest, the Required Interest and the Interest
Strip, respectively, but only with respect to each Class;
(ii) second, to the applicable Class of Certificateholders, Required
Principal, but only with respect to each Class; and
(iii) third, to any creditors of the Trust in satisfaction of
liabilities thereto, but only with respect to each Class.
(c) Amounts recovered in respect of the Underlying Securities following a
default by the Underlying Securities Issuer shall, to the extent allocable to
interest, be distributed in accordance with the provisions of Section 7(a)(i),
and, to the extent allocable to principal, in accordance with the provisions of
Section 7(a)(ii).
Section 8. Trustees Fees. (a) As compensation for its services hereunder,
the Trustee shall be entitled to Prepaid Ordinary Expenses. The Prepaid Ordinary
Expenses shall be paid to the Trustee by the Depositor on or prior to the
Closing Date; provided, however, in the event of an Early Termination of a Class
of Certificates, the Trustee shall negotiate in good faith with the Depositor
the reimbursement to the Depositor of any fees or charges previously paid to the
Trustee for the years after the year in which the Early Termination occurred.
(b) Extraordinary Trust Expenses shall not be paid out of the Trust
Property unless (i) such Extraordinary Trust Expenses relate to a time when the
Underlying Securities Issuer was in default of any payment obligation under the
Underlying Securities, or (ii) Certificateholders representing 100% of the
aggregate Voting Rights of the Certificates have voted to require the Trustee to
incur such Extraordinary Trust Expenses.
Section 9. Early Termination. (a) On any Early Termination Date, the Class
A Certificates may be paid the Early Termination Price by the Class A Trust upon
the purchase of the Class A Treasury Note by the holder of the Class A Warrant.
On any
-10-
<PAGE>
Early Termination Date, the Class B Certificates may be paid the Early
Termination Price by the Class B Trust upon the purchase of the Class B Treasury
Note by the holder of the Class B Warrant.
(b) A Warrantholder may provide notice to the Trustee and the Depositor (a
"Purchase Request") no less than 35 days prior to the applicable Early
Termination Date that it will purchase the applicable Underlying Security. The
Trustee will notify Certificateholders of the applicable Class of the Early
Termination Date not less than 30 days prior to such Early Termination Date.
(c) On or before the Early Termination Date, the Warrantholder shall
provide the Trustee with the Liquidation Price for such Treasury Security. Upon
receiving such Liquidation Price, the Trustee will immediately deliver the
Underlying Security relating to such Call Warrant to the Warrantholder;
provided, however, that if the Warrantholder delivers the Liquidation Price
before the Early Termination Date, the Trustee shall not deliver the Underlying
Security until the Early Termination Date.
(d) Delivery of a Underlying Security by the related Trust to the
Warrantholder will only be made against payment by the Warrantholder in
immediately available funds. Such payment must occur no later than 10:00 a.m.
New York City Time on the Early Termination Date. In the event that the
Warrantholder fails to make such payment by such time (a "Purchase Default"),
the sale shall be voided and the Early Termination will be deemed not to be
effective with respect to such Early Termination Date. In the event of a
Purchase Default, the Certificates shall continue to remain outstanding and,
unless such Purchase Default was due to a failure in the federal wire system,
the Warrantholder's rights with respect to the Call Warrant shall be deemed
surrendered to the Depositor.
(e) The Trustee shall not consent to any amendment or modification of this
Agreement (including the Standard Terms) which would alter the timing or amount
of any payment of the Liquidation Price.
Section 10. Events of Default. Within 30 days of the occurrence of an Event
of Default, the Trustee will give notice to the Certificateholders, the
Warrantholders and the holders of the Retained Interest, transmitted by mail, of
all such uncured or unwaived Events of Default known to it.
Section 11. Assignment of Call Warrants and Retained Interests. The
Warrantholder or the Retained Interestholder, as applicable, may assign a Call
Warrant or a Retained Interest pursuant to an assignment substantially in the
form of Exhibit C hereto. Any such assignee may enforce the assigned Call
Warrant or Retained Interest directly against the Trustee as if such assignee
had been an original party to this Series Supplement. Notwithstanding anything
else contained herein, the Trustee shall only acknowledge and record such
assignment of Call Warrant or Retained Interest upon receipt of a transferee
letter in substantially the form of Exhibit D hereto or an opinion of counsel
acceptable to the Trustee to the effect that such assignment does not require
registration of such Call Warrant or Retained Interest under the Securities Act
of 1933, as amended.
-11-
<PAGE>
Section 12. Information to Warrantholders and Holders of Retained
Interests. The Trustee shall furnish to any Warrantholder, any holder of a
Retained Interest or any prospective purchasers thereof, upon request, the
information specified in, and meeting the requirements of Rule 144A(d)(4) of the
Securities Act of 1933, as amended.
Section 13. Miscellaneous. (a) The provisions of Section 3.04, 3.06 and
4.04 of the Standard Terms shall not apply to the Certificates.
(b) The provisions of Article VIII, Market Agent, of the Standard Terms
shall not apply to the Certificates.
(c) The Trustee shall forward reports to Certificateholders pursuant to
Section 4.03 of the Standard Terms to the New York Stock Exchange.
(d) The Certificateholders shall not be entitled to terminate a Trust or
cause the sale or other disposition of an Underlying Security, if and for so
long as a related Call Warrant remains outstanding, without the consent of the
Warrantholders.
(e) In any conflict between the provisions of the Prospectus Supplement
and this Agreement (including the Standard Terms), the provisions of the
Prospectus Supplement shall prevail. Any affirmative statement of rights or
obligations of Certificateholders or the parties hereto included in the
Prospectus Supplement shall be deemed to be included herein.
(f) 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 Certificateholders, proportionately to
the ratio of their respective entitlements to interest.
(g) In any conflict between the provisions of this Series Supplement and
the Standard Terms, the provisions of this Series Supplement shall control.
(h) The Trustee shall prepare any tax returns or other forms required to
be filed by each Trust. So long as no applicable statute, Treasury regulation or
applicable Internal Revenue Service ruling or other administration pronouncement
requires to the contrary, all such tax returns shall be prepared in a manner
consistent with tax information reporting positions described in the Prospectus
prepared in connection with the Certificates dated November 21, 1996.
Section 14. Notices. 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).
-12-
<PAGE>
If to the Depositor, to:
Southpoint Structured Assets, Inc.
50 North Front Street
Memphis, Tennessee 38103
Attention: President
Telephone: (901) 524-4100
Facsimile: (901) 579-4430
If to the Trustee, to:
Bank One West Virginia, N.A.
707 Virginia Street East, 2nd Floor
Charleston, West Virginia 25301
Attention: Corporate Trust Department
Telephone: (304) 348-5667
Facsimile: (304) 348-7978
If to the Rating Agencies, to:
Standard & Poor's
25 Broadway
New York, New York 10004
Attention: Structured Finance Surveillance Group
Telephone: (212) 208-1191
Facsimile: (212) 208-0030
If to the New York Stock Exchange, to:
New York Stock Exchange, Inc.
20 Broad Street
New York, New York 10005
Attention: Michael Hyland
Telephone: (212) 656-5868
Facsimile: (212) 656-6919
Section 15. Governing Law. This Series Supplement and the transactions
described herein shall be governed by, and construed in accordance with, the
laws of the State of New York applicable to contracts made and performed within
the State of New York, without giving effect to the choice of laws provisions
thereof.
Section 16. Counterparts. This Series Supplement may be executed in any
number of counterparts, each of which shall be deemed to be an original, and all
such counterparts shall constitute but one and the same instrument.
-13-
<PAGE>
In Witness Whereof, the parties hereto have caused this Series Supplement
to be duly executed by their respective authorized officers as of the date first
written above.
Southpoint Structured Assets, Inc., as
Depositor
By____________________________________
Name: C. David Ramsey
Title: President
Bank One West Virginia, N.A., not in its
individual capacity but solely as Trustee
on behalf of the Treasury Security-Backed
Trust, Series 1996-1, Class A
By____________________________________
Name: Teresa L. Davis
Title: Vice President
Bank One West Virginia, N.A., not in its
individual capacity but solely as Trustee
on behalf of the Treasury Security-Backed
Trust, Series 1996-1, Class B
By____________________________________
Name: Teresa L. Davis
Title: Vice President
<PAGE>
SCHEDULE I
SERIES 1996-1
Underlying Securities Schedule
I. Class A Treasury Note: 6.375% Treasury Note due August 15, 2002,
subject to the Class A Call Warrant and exclusive of the Class A Retained
Interest
Principal Amount Deposited: $5,000,000
Original Issue Date: August 15, 1992
Maturity Date: August 15, 2002
Principal Payment Date: August 15, 2002
Interest Rate: 6.375%
Interest Payment Dates: February 15 and August 15
Initial Accrued Interest:
Redemption Dates: None
Redemption Prices: N/A
Form of Underlying Securities: Book-entry, maintained in the book-entry
system operated by the Federal Reserve Bank
II. Class B Treasury Note: 6.875% Treasury Note due May 15, 2006, subject
to the Class B Call Warrant and exclusive of the Class B Retained Interest
Principal Amount Deposited: $5,000,000
Original Issue Date: May 15, 1996
Maturity Date: May 15, 2006
Principal Payment Date: May 15, 2006
Interest Rate: 6.875%
Interest Payment Dates: May 15 and November 15
Initial Accrued Interest:
<PAGE>
Redemption Dates: None
Redemption Prices: N/A
Form of Underlying Securities: Book-entry, maintained in the book-entry
system operated by the Federal Reserve Bank
<PAGE>
SCHEDULE II
DESCRIPTION OF THE SERIES 1996-1 CLASS A CALL WARRANT
The Call Warrant represents the right to purchase the Class A Treasury Note
on any Early Termination Date for the Liquidation Price.
The Class A Call Warrant will be retained by the Depositor and may be
transferred by the Depositor or a Warrantholder to another party in accordance
with the provisions of the Series Supplement at the sole option of the Depositor
or the Warrantholder without the consent of the Certificateholders or any other
party. The beneficial ownership interest in the Class A Call Warrant will be
recorded on the records of the Trustee. The Trustee shall not agree to any
amendment or modification of the Standard Terms or the Series Supplement which
would adversely affect in any material respect the holder of the Class A Warrant
without the consent of such Warrantholder.
<PAGE>
SCHEDULE III
DESCRIPTION OF THE SERIES 1996-1 CLASS B CALL WARRANT
The Call Warrant represents the right to purchase the Class B Treasury Note
on any Early Termination Date for the Liquidation Price.
The Class B Call Warrant will be retained by the Depositor and may be
transferred by the Depositor or a Warrantholder to another party in accordance
with the provisions of the Series Supplement at the sole option of the Depositor
or the Warrantholder without the consent of the Certificateholders or any other
party. The beneficial ownership interest in the Class B Call Warrant will be
recorded on the records of the Trustee. The Trustee shall not agree to any
amendment or modification of the Standard Terms or the Series Supplement which
would adversely affect in any material respect the holder of the Class B Warrant
without the consent of such Warrantholder.
<PAGE>
SCHEDULE IV
[INTENTIONALLY LEFT BLANK]
<PAGE>
SCHEDULE V
DESCRIPTION OF THE SERIES 1996-1 CLASS A RETAINED INTEREST
The holder of the Class A Retained Interest will retain the right with
respect to the Class A Treasury Note to receive on each Class A Distribution
Date, from payments received on the Class A Treasury Note, a distribution equal
to .125% per annum of the principal amount of the Class A Treasury Note (the
"Class A Interest Strip"). The rights of the holder of the Class A Retained
Interest to the Class A Interest Strip is of equal priority with the rights of
the Class A Certificateholders to receive distributions of interest.
The Class A Retained Interest will be retained by the Depositor and may be
transferred by the Depositor or a Retained Interestholder to another party in
accordance with the provisions of the Series Supplement at the sole option of
the Depositor or the Retained Interestholder without the consent of the
Certificateholders or any other party. The beneficial ownership interest in the
Class A Retained Interest will be recorded on the records of the Trustee. On
each Class A Distribution Date, payments will be made on the Class A Retained
Interest by wire transfer to the account of the holder thereof on the related
Record Date as specified in written instructions to the Trustee. The Trustee
shall not agree to any amendment or modification of the Standard Terms or the
Series Supplement which would adversely affect in any material respect the
holder of the Class A Retained Interest without the consent of the holder of the
Class A Retained Interest.
<PAGE>
SCHEDULE VI
DESCRIPTION OF THE SERIES 1996-1 CLASS B RETAINED INTEREST
The holder of the Class B Retained Interest will retain the right with
respect to the Class B Treasury Note to receive on each Class B Distribution
Date, from payments received on the Class B Treasury Note, a distribution equal
to .075% per annum of the principal amount of the Class B Treasury Note (the
"Class B Interest Strip"). The rights of the holder of the Class B Retained
Interest to the Class B Interest Strip is of equal priority with the rights of
the Class B Certificateholders to receive distributions of interest.
The Class B Retained Interest will be retained by the Depositor and may be
transferred by the Depositor or a Retained Interestholder to another party in
accordance with the provisions of the Series Supplement at the sole option of
the Depositor or the Retained Interestholder without the consent of the
Certificateholders or any other party. The beneficial ownership interest in the
Class B Retained Interest will be recorded on the records of the Trustee. On
each Class B Distribution Date, payments will be made on the Class B Retained
Interest by wire transfer to the account of the holder thereof on the related
Record Date as specified in written instructions to the Trustee. The Trustee
shall not agree to any amendment or modification of the Standard Terms or the
Series Supplement which would adversely affect in any material respect the
holder of the Class B Retained Interest without the consent of the holder of the
Class B Retained Interest.
<PAGE>
EXHIBIT A
STANDARD TERMS FOR TRUST AGREEMENTS
(begins on next page)
<PAGE>
EXHIBIT B-1
FORM OF CLASS A CERTIFICATE
RA-1 $5,000,000
CUSIP No. 89464G AA4
Unless this Certificate is presented by an authorized representative of the
Depository Trust Company, a New York Corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), any transfer, pledge or other use hereof for value or
otherwise by or to any person is wrongful inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
This Certificate represents a fractional undivided interest in the Trust
and does not evidence an obligation of, or an interest in, and is not guaranteed
by the depositor or the Trustee or any of their respective affiliates. Neither
this Certificate or the trust assets are insured or guaranteed by any
governmental agency or any other person.
Southpoint Structured Assets, Inc.
Treasury Security-Backed Certificates
Series 1996-1, Class A
$5,000,000 Certificate Principal Balance
6.25% Pass-Through Rate
evidencing a fractional undivided beneficial ownership interest in the Trust, as
defined below, the property of which consists principally of $5,000,000 in
aggregate principal amount of direct obligations of the United States of America
and all payments received thereon, deposited in trust by Southpoint Structured
Assets, Inc. (the "Depositor").
This certifies that Cede & Co. is the registered owner of Five Million
Dollars non-assessable, fully-paid, fractional undivided interest in the
Treasury Security-Backed Trust, Series 1996-1, Class A (the "Trust"), formed by
the Depositor.
<PAGE>
The Trust was created pursuant to a Standard Terms for Trust Agreements,
dated as of November 1, 1996 (the "Standard Terms"), between the Depositor and
Bank One, West Virginia, N.A., a national banking association, not in its
individual capacity but solely as Trustee (the "Trustee"), as supplemented by
the Series Supplement, Series 1996-1, dated as of November 27, 1996 (the "Series
Supplement" and, together with the Standard Terms, the "Trust Agreement"),
between the Depositor and the Trustee. This Certificate does not purport to
summarize the Trust Agreement and reference is hereby made to the Trust
Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby and the rights, duties and
obligations of the Trustee with respect hereto. A copy of the Trust Agreement
may be obtained from the Trustee by written request sent to the Corporate Trust
Office. Capitalized terms used but not defined herein have the meanings assigned
to them in the Trust Agreement.
This Certificate is one of the duly authorized Certificates designated as
the "Treasury Security-Backed Certificates, Series 1996-1, Class A" (herein
called the "Certificates"). This Certificate is issued under and is subject to
the terms, provisions and conditions of the Trust Agreement, to which Trust
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound. The Trust Property consists of: (i)
the Underlying Security described in the Trust Agreement (subject to the Call
Warrant and exclusive of the Retained Interest); (ii) all payments on or
collections in respect of the Underlying Security accrued on or after November
27, 1996 (the "Cut-off Date") (exclusive of the Interest Strip) together with
any proceeds thereof; and (iii) all funds from time to time deposited with the
Trustee relating to the Certificates and any investments thereof, together with
any and all income, proceeds and payments with respect thereto (the "Trust
Property").
Subject to the terms and conditions of the Trust Agreement (including the
availability of funds for distributions) and until the obligation created by the
Trust Agreement shall have terminated with respect to the Certificates in
accordance therewith, distributions will be made on each Distribution Date, to
the Person in whose name this Certificate is registered on the applicable Record
Date, in an amount equal to such Certificateholder's fractional undivided
interest in the amount required to be distributed to the Holders of the
Certificates on such Distribution Date. The Record Date applicable to any
Distribution Date is the close of business on the day immediately preceding such
Distribution Date (whether or not a Business Day). If a payment with respect to
the Underlying Security is made to the Trustee after the date on which such
payment was due, then the Trustee will distribute any such amounts received on
the next occurring Business Day (a "Special Distribution Date").
Each Certificateholder, by its acceptance of a Certificate, covenants and
agrees that such Certificateholder will not at any time institute against the
Trust, or join in any institution against the Trust of, any bankruptcy
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Certificates or the Trust
Agreement.
B-1-2
<PAGE>
Distributions made on this Certificate will be made as provided in the
Trust Agreement by the Trustee by wire transfer in immediately available funds,
or check mailed to the Certificateholder of record in the Certificate Register
without the presentation or surrender of this Certificate or the making of any
notation hereon, except that with respect to Certificates registered on the
Record Date in the name of the nominee of the Clearing Agency (initially, such
nominee shall be Cede & Co.), payments will be made by wire transfer in
immediately available funds to the account designated by such nominee. Except as
otherwise provided in the Trust Agreement and notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the Corporate Trust Office or such other
location as may be specified in such notice.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee, by manual signature, this Certificate shall not entitle
the Holder hereof to any benefit under the Trust Agreement or be valid for any
purpose.
This Certificate shall be construed in accordance with the laws of the
State of New York, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the Holder hereof shall be determined in
accordance with such laws.
The Certificates are limited in right of distribution to certain payments
and collections respecting the Underlying Security, all as more specifically set
forth herein and in the Trust Agreement. The registered Holder hereof, by its
acceptance hereof, agrees that it will look solely to the Trust Property (to the
extent of its rights therein) for distributions hereunder.
The Trust Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the Trustee and the rights of the Certificateholders under the
Trust Agreement at any time by the Depositor and the Trustee with the consent of
the Holders of Certificates evidencing greater than 66-2/3% of the aggregate
Voting Rights of the Certificates subject to certain provisions set forth in the
Trust Agreement. Any such consent by the Holder of this Certificate (or any
predecessor Certificate) shall be conclusive and binding on such Holder and upon
all future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent in made upon this Certificate. The Trust Agreement also permits
the amendment thereof, in certain limited circumstances, without the consent of
the Holders of any of the Certificates.
The Certificates are issuable in fully registered form only in minimum
original principal amounts of $1,000 and integral multiples of $1,000 in excess
thereof.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies of the Certificate Registrar maintained by
the Trustee at 707 Virginia Street East, 2nd Floor, Charleston, West Virginia
25301, duly endorsed by or accompanied by an assignment in the form below and
B-1-3
<PAGE>
by such other documents as required by the Trust Agreement, and thereupon one or
more new Certificates of the same class in authorized denominations evidencing
the same principal amount will be issued to the designated transferee or
transferees. The initial Certificate Registrar appointed under the Trust
Agreement is the Trustee.
No service charge will be made for any registration of transfer or
exchange, but the Trustee may require exchange of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
The Depositor and the Trustee and any agent of the Depositor or the Trustee
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trustee, nor any such
agent shall be affected by any notice to the contrary.
It is the intention of the parties to the Trust Agreement that the Trust
created thereunder shall constitute a fixed investment trust for federal income
tax purposes under Treasury Regulation Section 301.7701-4 and a grantor trust
under the Internal Revenue Code of 1986, as amended, and the Certificateholder
agrees to treat the Trust, any distributions therefrom and its beneficial
interest in the Certificates consistently with such characterization.
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
Trust Property and the issuance of the Certificates, 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 or otherwise incur, assume or
guarantee any indebtedness for money borrowed.
The Trust and the obligations of the Depositor and the Trustee created by
the Trust Agreement with respect to the Certificates shall terminate upon the
earliest to occur of (i) the distribution in full of all amounts due to
Certificateholders and retirement of the Underlying Security, (ii) the
distribution in full of all amounts due to Certificateholders on any Early
Termination Date, and (iii) the expiration of 21 years from the death of the
last survivor of the descendants of Joseph P. Kennedy, the late Ambassador of
the United States to the Court of St. James, living on the date hereof.
An employee benefit plan subject to the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), including an individual retirement account or
Keogh plan (any such, a "Plan") may purchase Certificates if either (i) the
Underwriter is able to confirm the existence of at least 100 independent
purchasers or (ii) the Plan can represent that its purchase of the Certificates
would not be prohibited under ERISA or the Code.
B-1-4
<PAGE>
In Witness Whereof, the Trustee has caused this Certificate to be duly
executed as of the date set forth below.
Treasury Security-Backed Trust,
Series 1996-1, Class A
By: Bank One West Virginia, N.A., not in
its individual capacity but solely as
Trustee,
By________________________________________
Authorized Officer
Dated: November 27, 1996
Trustee's Certificate of Authentication
This is on one of the Certificates described in the Trust Agreement
referred to herein.
Bank One, West Virginia, N.A., not in its
individual capacity but solely as Trustee,
By________________________________________
Authorized Officer
B-1-5
<PAGE>
Assignment
For value received the undersigned hereby sells, assigns and transfers unto
Please insert social security or other
identifying number of assignee
________________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
________________________________________________________________________________
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
_______________________________________________________________________ Attorney
to transfer said Certificate on the books of the Certificate Register, with full
power of substitution in the premises.
Dated:
____________________________________
Signature Guaranteed:
____________________________________
*Notice: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member of the New York Stock Exchange or a commercial bank or
trust company.
<PAGE>
Exhibit B-2
Form of Class B Certificate
RB-1 $5,000,000
CUSIP No. 89464G AB2
Unless this Certificate is presented by an authorized representative of the
Depository Trust Company, a New York Corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), any transfer, pledge or other use hereof for value or
otherwise by or to any person is wrongful inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
This Certificate represents a fractional undivided interest in the Trust
and does not evidence an obligation of, or an interest in, and is not guaranteed
by the depositor or the Trustee or any of their respective affiliates. Neither
this Certificate or the trust assets are insured or guaranteed by any
governmental agency or any other person.
Southpoint Structured Assets, Inc.
Treasury Security-Backed Certificates
Series 1996-1, Class B
$5,000,000 Certificate Principal Balance
6.80% Pass-Through Rate
evidencing a fractional undivided beneficial ownership interest in the Trust, as
defined below, the property of which consists principally of $5,000,000
aggregate principal amount of direct obligations of the United States of America
and all payments received thereon, deposited in trust by Southpoint Structured
Assets, Inc. (the "Depositor").
This certifies that Cede & Co. is the registered owner of Five Million
Dollars non-assessable, fully-paid, fractional undivided interest in the
Treasury Security-Backed Trust, Series 1996-1, Class B (the "Trust"), formed by
the Depositor.
<PAGE>
The Trust was created pursuant to a Standard Terms for Trust Agreements,
dated as of November 1, 1996 (the "Standard Terms"), between the Depositor and
Bank One, West Virginia, N.A., a national banking association, not in its
individual capacity but solely as Trustee (the "Trustee"), as supplemented by
the Series Supplement, Series 1996-1, dated as of November 27, 1996 (the "Series
Supplement" and, together with the Standard Terms, the "Trust Agreement"),
between the Depositor and the Trustee. This Certificate does not purport to
summarize the Trust Agreement and reference is hereby made to the Trust
Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby and the rights, duties and
obligations of the Trustee with respect hereto. A copy of the Trust Agreement
may be obtained from the Trustee by written request sent to the Corporate Trust
Office. Capitalized terms used but not defined herein have the meanings assigned
to them in the Trust Agreement.
This Certificate is one of the duly authorized Certificates designated as
the "Treasury Security-Backed Certificates, Series 1996-1, Class B" (herein
called the "Certificates"). This Certificate is issued under and is subject to
the terms, provisions and conditions of the Trust Agreement, to which Trust
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound. The Trust Property consists of: (i)
the Underlying Security described in the Trust Agreement (subject to the Call
Warrant and exclusive of the Retained Interest); (ii) all payments on or
collections in respect of the Underlying Security accrued on or after November
27, 1996 (the "Cut-off Date") (exclusive of the Interest Strip) together with
any proceeds thereof; and (iii) all funds from time to time deposited with the
Trustee relating to the Certificates and any investments thereof, together with
any and all income, proceeds and payments with respect thereto (the "Trust
Property").
Subject to the terms and conditions of the Trust Agreement (including the
availability of funds for distributions) and until the obligation created by the
Trust Agreement shall have terminated with respect to the Certificates in
accordance therewith, distributions will be made on each Distribution Date, to
the Person in whose name this Certificate is registered on the applicable Record
Date, in an amount equal to such Certificateholder's fractional undivided
interest in the amount required to be distributed to the Holders of the
Certificates on such Distribution Date. The Record Date applicable to any
Distribution Date is the close of business on the day immediately preceding such
Distribution Date (whether or not a Business Day). If a payment with respect to
the Underlying Security is made to the Trustee after the date on which such
payment was due, then the Trustee will distribute any such amounts received on
the next occurring Business Day (a "Special Distribution Date").
Each Certificateholder, by its acceptance of a Certificate, covenants and
agrees that such Certificateholder will not at any time institute against the
Trust, or join in any institution against the Trust of, any bankruptcy
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Certificates or the Trust
Agreement.
B-2-2
<PAGE>
Distributions made on this Certificate will be made as provided in the
Trust Agreement by the Trustee by wire transfer in immediately available funds,
or check mailed to the Certificateholder of record in the Certificate Register
without the presentation or surrender of this Certificate or the making of any
notation hereon, except that with respect to Certificates registered on the
Record Date in the name of the nominee of the Clearing Agency (initially, such
nominee shall be Cede & Co.), payments will be made by wire transfer in
immediately available funds to the account designated by such nominee. Except as
otherwise provided in the Trust Agreement and notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the Corporate Trust Office or such other
location as may be specified in such notice.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee, by manual signature, this Certificate shall not entitle
the Holder hereof to any benefit under the Trust Agreement or be valid for any
purpose.
This Certificate shall be construed in accordance with the laws of the
State of New York, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the Holder hereof shall be determined in
accordance with such laws.
The Certificates are limited in right of distribution to certain payments
and collections respecting the Underlying Security, all as more specifically set
forth herein and in the Trust Agreement. The registered Holder hereof, by its
acceptance hereof, agrees that it will look solely to the Trust Property (to the
extent of its rights therein) for distributions hereunder.
The Trust Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the Trustee and the rights of the Certificateholders under the
Trust Agreement at any time by the Depositor and the Trustee with the consent of
the Holders of Certificates evidencing greater than 66-2/3% of the aggregate
Voting Rights of the Certificates subject to certain provisions set forth in the
Trust Agreement. Any such consent by the Holder of this Certificate (or any
predecessor Certificate) shall be conclusive and binding on such Holder and upon
all future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent in made upon this Certificate. The Trust Agreement also permits
the amendment thereof, in certain limited circumstances, without the consent of
the Holders of any of the Certificates.
The Certificates are issuable in fully registered form only in minimum
original principal amounts of $1,000 and integral multiples of $1,000 in excess
thereof.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies of the Certificate Registrar maintained by
the Trustee at 707 Virginia Street East, 2nd Floor, Charleston, West Virginia
25301, duly endorsed by or accompanied by an assignment in the form below and
B-2-3
<PAGE>
by such other documents as required by the Trust Agreement, and thereupon one or
more new Certificates of the same class in authorized denominations evidencing
the same principal amount will be issued to the designated transferee or
transferees. The initial Certificate Registrar appointed under the Trust
Agreement is the Trustee.
No service charge will be made for any registration of transfer or
exchange, but the Trustee may require exchange of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
The Depositor and the Trustee and any agent of the Depositor or the Trustee
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trustee, nor any such
agent shall be affected by any notice to the contrary.
It is the intention of the parties to the Trust Agreement that the Trust
created thereunder shall constitute a fixed investment trust for federal income
tax purposes under Treasury Regulation Section 301.7701-4 and a grantor trust
under the Internal Revenue Code of 1986, as amended, and the Certificateholder
agrees to treat the Trust, any distributions therefrom and its beneficial
interest in the Certificates consistently with such characterization.
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
Trust Property and the issuance of the Certificates, 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 or otherwise incur, assume or
guarantee any indebtedness for money borrowed.
The Trust and the obligations of the Depositor and the Trustee created by
the Trust Agreement with respect to the Certificates shall terminate upon the
earliest to occur of (i) the distribution in full of all amounts due to
Certificateholders and retirement of the Underlying Security, (ii) the
distribution in full of all amounts due to Certificateholders on any Early
Termination Date, and (iii) the expiration of 21 years from the death of the
last survivor of the descendants of Joseph P. Kennedy, the late Ambassador of
the United States to the Court of St. James, living on the date hereof.
An employee benefit plan subject to the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), including an individual retirement account or
Keogh plan (any such, a "Plan") may purchase Certificates if either (i) the
Underwriter is able to confirm the existence of at least 100 independent
purchasers or (ii) the Plan can represent that its purchase of the Certificates
would not be prohibited under ERISA or the Code.
B-2-4
<PAGE>
In Witness Whereof, the Trustee has caused this Certificate to be duly
executed as of the date set forth below.
Treasury Security-Backed Trust,
Series 1996-1, Class B
By: Bank One, West Virginia, N.A., not
in its individual capacity but solely as
Trustee,
By
------------------------------------------
Authorized Officer
Dated: November 27, 1996
Trustee's Certificate of Authentication
This is on one of the Certificates described in the Trust Agreement
referred to herein.
Bank One, West Virginia, N.A., not in its
individual capacity but solely as Trustee,
By
------------------------------------------
Authorized Officer
B-2-5
<PAGE>
Assignment
For value received the undersigned hereby sells, assigns and transfers unto
Please insert social security or other
identifying number of assignee
________________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
________________________________________________________________________________
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
_______________________________________________________________________ Attorney
to transfer said Certificate on the books of the Certificate Register, with full
power of substitution in the premises.
Dated:
_____________________________________
Signature Guaranteed:
_____________________________________
*Notice: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member of the New York Stock Exchange or a commercial bank or
trust company.
<PAGE>
Exhibit C
Form of Assignment of [Call Warrant] [Retained Interest]
_________________________________ (the "Assignor"), for and in
consideration of the good and valuable consideration in hand paid by__________
_____________________________ (the "Assignee"), the receipt and sufficiency of
which consideration are hereby confessed and acknowledged by Assignor, does
hereby transfer, assign, sell, set over and deliver, unto Assignee, all of
Assignor's right, title and interest in and to that certain Series 1996-1 Class
__ [Call Warrant] [Retained Interest].
Executed this __ day of _______________________
[Assignor]
By_____________________________________
Name_________________________________
Title________________________________
Acknowledged and agreed to:
[Assignee]
By_______________________________
Name __________________________
Title__________________________
Acknowledgement
The undersigned hereby acknowledges the assignment from the Assignor to the
Assignee of the Assignor's rights with respect to the assigned [Call Warrant]
[Retained Interest] and hereby agrees that the Assignee has all the rights of a
[Warrantholder][Retained Interestholder] (as defined in the Series Supplement)
described in the Series Supplement with respect to such [Call Warrant] [Retained
Interest], such rights being enforceable directly by the Assignee as if it were
an original party to the Series Supplement.
Bank One, West Virginia, as Trustee
By_____________________________________
Name_________________________________
Title________________________________
<PAGE>
Exhibit D
Form of Transferee Letter for Call Warrant or Retained Interest
[Date]
Southpoint Structured Assets, Inc.
50 North Front Street
Memphis, Tennessee 38103
Bank One, West Virginia, N.A.
707 Virginia Street East
2nd Floor
Charleston, WV 25301
Re: Transfer of Series 1996-1 Class __ [Call Warrant] [Retained Interest]
Ladies and Gentlemen:
In connection with the proposed acquisition of the above-captioned Series
1996-1 Class __ [Call Warrant] [Retained Interest] by the undersigned pursuant
to Section 11 of the Series Supplement dated as of November __, 1996, between
Bank One, West Virginia, N.A., as trustee, and Southpoint Structured Assets,
Inc., and Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act"), the undersigned hereby represents the following (check the
appropriate boxes):
A. The undersigned is a "qualified institutional buyer" under Rule 144A(a)(1)
of the Securities Act because the undersigned is:
(i) One of the following entities, acting for its own account or the
accounts of other qualified institutional buyers, that in the
aggregate owns and invests on a discretionary basis at least $100
million in securities of issuers that are not affiliated with the
entity:
[_] (A) Any insurance company as defined in Section 2(13) of the
Securities Act;
[_] (B) Any investment company registered under the Investment
Company Act of 1940, as amended (the "Investment Company Act") or
any business development company as defined in Section 2(a)(48)
of the Investment Company Act;
<PAGE>
[_] (C) Any Small Business Investment Company licensed by the U.S.
Small Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958, as amended;
[_] (D) Any plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees;
[_] (E) Any employee benefit plan within the meaning of Title I of
the Employee Retirement Income Security Act of 1974;
[_] (F) Any trust fund whose trustee is a bank or trust company and
whose participants are exclusively plans of the types identified
in paragraphs (D) and (E) of this section, except trust funds
that include as participants individual retirement accounts or
H.R. 10 plans;
[_] (G) Any business development company as defined in Section 202(a)
(22) of the Investment Advisers Act of 1940 (the "Investment
Advisers Act");
[_] (H) Any organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended, corporation (other
than a bank as defined in Section 3(a)(2) of the Securities Act
or a savings and loan association or other institution referenced
in Section 3(a)(5)(A) of the Securities Act or a foreign bank or
savings and loan association or equivalent institution),
partnership, or Massachusetts or similar business trust; and
[_] (I) any investment adviser registered under the Investment
Advisers Act.
[_] (ii) Any dealer registered pursuant to Section 15 of the Securities and
Exchange Act of 1934, as amended (the "Exchange Act"), acting for
its own account or the accounts of other qualified institutional
buyers, that in the aggregate owns and invests on a discretionary
basis at least $10 million of securities of issuers that are not
affiliated with the dealer, provided that securities constituting
the whole or a part of an unsold allotment to or subscription by a
dealer as a participant in a public offering shall not be deemed to
be owned by such dealer;
[_] (iii) Any dealer registered pursuant to Section 15 of the Exchange Act
acting in a riskless principal transaction on behalf of a qualified
institutional buyer;
[_] (iv) Any investment company registered under the Investment Company Act,
acting for its own account or for the accounts of other qualified
institutional buyers, that is part of a family of investment
companies which own in the aggregate at least $100 million in
securities of issuers, other than issuers that are affiliated
D-2
<PAGE>
with the investment company or are part of such family of investment
companies. Family of investment companies means any two or more
investment companies registered under the Investment Company Act,
except for a unit investment trust whose assets consist solely of
shares of one or more registered investment companies, that have the
same investment adviser (or, in the case of unit investment trusts,
the same depositor), provided that, for purposes of this paragraph:
(A) Each series of a series company (as defined in Rule 18f-2
under the Investment Company Act) shall be deemed to be a
separate investment company; and
(B) Investment companies shall be deemed to have the same
adviser (or depositor) if their advisers (or depositors) are
majority-owned subsidiaries of the same parent, or if one
investment company's adviser (or depositor) is a majority-owned
subsidiary of the other investment company's adviser (or
depositor);
[_] (v) Any entity, all of the equity owners of which are qualified
institutional buyers, acting for its own account or the accounts of
other qualified institutional buyers; and
[_] (vi) Any bank as defined in Section 3(a)(2) of the Securities Act, any
savings and loan association or other institution as referenced in
Section 3(a)(5)(A) of the Securities Act, or any foreign bank or
savings and loan association or equivalent institution, acting for
its own account or the accounts of other qualified institutional
buyers, that in the aggregate owns and invests on a discretionary
basis at least $100 million in securities of issuers that are not
affiliated with it and that has an audited net worth of at least $25
million as demonstrated in its latest annual financial statements,
as of a date not more than 16 months preceding the date of sale of
the Custodial Receipt in the case of a U.S. bank or savings and loan
association, and not more than 18 months preceding the date of sale
for a foreign bank or savings and loan association or equivalent
institution.
B. The undersigned is aware that the transferor may rely on the exemption from
the provisions of Section 5 of the Securities Act provided by Rule
144A(d)(2) of the Securities Act in connection with the transfer to the
undersigned contemplated by this certificate.
C. The transferor or the undersigned has received from the Agent, if so
requested, at or prior to the time of sale, the information required to be
delivered pursuant to Rule 144A(d)(4) of the Securities Act.
D-3
<PAGE>
D. If the undersigned sells the [Call Warrant] [Retained Interest] at our
option, the undersigned will obtain from any institutional investor that
purchases the [Call Warrant] [Retained Interest] from the undersigned a
certificate containing the same representations, warranties and agreements
contained in the foregoing paragraphs A through C and this paragraph D.
[Transferee]
By_______________________________________
Name_____________________________________
Title____________________________________
[Note: must be Chief Financial Officer or
other Executive Officer]
D-4
