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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549-1004
Form 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(B) OR (G) OF THE
SECURITIES EXCHANGE ACT OF 1934
Southpoint Structured Assets, Inc.
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(Exact name of registrant as specified in its charter)
DELAWARE 51-6503749
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(State or jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
50 North Front Street
Memphis, Tennessee 38103
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(Address of principal executive offices) (Zip Code)
If this Form relates to the registration of a class of debt securities and is
effective upon filing pursuant to General Instruction A.(c)(1), please check the
following box. [X]
If this Form relates to the registration of a class of debt securities and is to
become effective simultaneously with the effectiveness of a concurrent
registration statement under the Securities Act of 1933 pursuant to General
Instruction A.(c)(2), please check the following box. [_]
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
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FHLB Security-Backed Certificates, New York Stock Exchange, Inc.
Series 1997-1,
Certificates due 4/25/07
Securities to be registered pursuant to Section 12(g) of the Act:
None
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(Title of class)
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ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
The description of the FHLB Security-Backed Certificates, Series 1997-1 is
contained in the Prospectus, dated November 15, 1996, included in the
Registrant's Registration Statement on Form S-3 (No. 333-9883) under the caption
"DESCRIPTION OF CERTIFICATES," which is incorporated herein by reference, and in
the Preliminary Prospectus Supplement, dated May 2, 1997, filed on May 7, 1997
with the Commission pursuant to Rule 424(b) under the Securities Act of 1933,
under the caption "DESCRIPTION OF THE CERTIFICATES," which Preliminary
Prospectus Supplement, together with the Prospectus, shall be deemed to be
incorporated herein by reference.
ITEM 2. EXHIBITS
The securities described herein are to be registered pursuant to Section
12(b) of the Securities Exchange Act of 1934 on an exchange on which other
securities of the registrant are registered. In accordance with Part I to the
instructions regarding exhibits on Form 8-A, the following Exhibits are filed
herewith with the Commission and with the exchange.
1. Form of Series Supplement to the Standard Terms of Trust
Agreements, to be dated as of May 28, 1997, between the Registrant and the
Trustee, relating to the FHLB Security-Backed Certificates, Series 1997-1.
2. Form of Specimen FHLB Security-Backed Certificate, Series 1997-1.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the Registrant has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereto duly authorized.
SOUTHPOINT STRUCTURED ASSETS, INC.
By /s/ C. David Ramsey
------------------------------------
C. David Ramsey
President
Dated: May 7, 1997
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EXHIBIT 99.1
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SERIES SUPPLEMENT
FHLB SECURITY-BACKED TRUST, SERIES 1997-1
BETWEEN
SOUTHPOINT STRUCTURED ASSETS, INC.,
as Depositor
AND
BANK ONE, WEST VIRGINIA, N.A.,
as Trustee
FHLB SECURITY-BACKED CERTIFICATES
Series 1997-1
DATED AS OF MAY 28, 1997
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
<C> <S> <C>
SECTION 1. INCORPORATION OF STANDARD TERMS.......................... 1
SECTION 2. DEFINITIONS.............................................. 1
SECTION 3. DESIGNATION OF TRUSTS AND CERTIFICATES................... 6
SECTION 4. CALL WARRANTS............................................ 6
SECTION 5. RETAINED INTEREST........................................ 7
SECTION 6. SATISFACTION OF CONDITIONS TO INITIAL EXECUTION AND
DELIVERY OF TRUST CERTIFICATES........................... 7
SECTION 7. DISTRIBUTIONS............................................ 7
SECTION 8. TRUSTEE'S FEES........................................... 8
SECTION 9. EARLY TERMINATION........................................ 8
SECTION 10. EVENTS OF DEFAULT........................................ 9
SECTION 11. ASSIGNMENT OF CALL WARRANTS AND RETAINED INTERESTS....... 9
SECTION 12. INFORMATION TO WARRANTHOLDERS AND HOLDERS OF
RETAINED INTERESTS....................................... 9
SECTION 13. MISCELLANEOUS............................................ 9
SECTION 14. NOTICES.................................................. 10
SECTION 15. GOVERNING LAW............................................ 11
SECTION 16. COUNTERPARTS............................................. 11
SCHEDULE I UNDERLYING SECURITIES SCHEDULE
SCHEDULE II DESCRIPTION OF THE CALL WARRANT
SCHEDULE III DESCRIPTION OF THE RETAINED INTEREST
EXHIBIT A STANDARD TERMS FOR TRUST AGREEMENTS
EXHIBIT B FORM OF CERTIFICATE
EXHIBIT C FORM OF ASSIGNMENT FOR CALL WARRANT OR RETAINED INTEREST
EXHIBIT D FORM OF TRANSFEREE LETTER FOR CALL WARRANT OR
RETAINED INTEREST
</TABLE>
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FHLB SECURITY-BACKED CERTIFICATES
SERIES SUPPLEMENT
SERIES 1997-1
SERIES SUPPLEMENT, Series 1997-1, dated as of May 28, 1997 (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 Trust designated herein (the
"Trust") by executing and delivering this Series Supplement, which shall
incorporate the terms of the Standard Terms for Trust Agreements, dated as of
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 FHLB Security set forth on
Schedule I hereto into the Trust (subject to the Call Warrant and exclusive of
the Retained Interest);
WHEREAS, in connection with the creation of the Trust and the deposit
therein of the FHLB Security, it is desired to provide for (i) the issuance of
the FHLB Security-Backed Certificates, Series 1997-1 (the "Certificates")
evidencing undivided interests in the Trust, (ii) the retention by the Depositor
of the Call Warrant (the "Call Warrant") evidencing the right to purchase, under
the terms set forth herein, the FHLB Security, and (iii) the retention by the
Depositor of the Retained Interest (the "Retained Interest") evidencing the
right to receive a portion of the interest payments made on the FHLB Security;
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 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
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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 the sum of all amounts received on or with
respect to the FHLB Security (including investment income on Eligible
Investments associated with the investment of any funds in the Trust) during the
preceding Collection Period.
"Call Warrant" shall mean the "Series 1997-1 Call Warrant" (as described on
Schedule II hereto) evidencing the right to purchase the FHLB Security on an
Early Termination Date pursuant to the Early Termination provisions of Section 9
hereof.
"Certificate" shall mean any one of the Certificates.
"Certificates" shall mean those certificates in substantially the form set
forth in Exhibit B hereto.
"Closing Date" shall mean May 28, 1997.
"Collection Period" shall mean, (i) with respect to each April 25
Distribution Date, the period beginning on the day after the October 25
Distribution Date of the previous year and ending on such April 25 Distribution
Date, inclusive and, (ii) with respect to each October 25 Distribution Date, the
period beginning on the day after the April 25 Distribution Date of that year
and ending on such October 25 Distribution Date, inclusive, except for the
October 25, 1997 Distribution Date, as to which the Collection Period shall be
the period beginning on Closing Date and ending on such October 25, 1997
Distribution Date, inclusive provided, however, that clauses (i) and (ii) shall
be subject to Section 13(f) hereof.
"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 May 28, 1997.
"Depository" shall mean the Depository Trust Company.
"Distribution Date" shall mean the October 25 and April 25 of each year (or
if such date is not a Business Day, the next succeeding Business Day),
commencing on October 25, 1997 and ending on the earlier of the Final Scheduled
Distribution Date and the applicable Early Termination Date.
"Early Termination" shall mean the payment in full of the Certificates by
the Trust pursuant to Section 9 hereof.
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"Early Termination Date" shall mean any day on or after April 25, 1999.
"Early Termination Price" shall mean 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.
"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.
"FHLB" shall mean the Federal Home Loan Banks, instrumentalities of the
United States organized under the authority of the Federal Home Loan Bank Act.
"FHLB Security" shall mean the Federal Home Loan Banks Fixed Rate Bond
listed on the Underlying Securities Schedule attached hereto as Schedule I.
"Final Scheduled Distribution Date" shall mean April 25, 2007.
"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" shall mean, on any Distribution Date, accrued but unpaid
interest on the outstanding principal balance of the FHLB Security, computed at
an annual rate of 0.05%.
"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 7.10% per annum.
"Prepaid Ordinary Expenses" shall be $_____ for this Series.
"Prospectus Supplement" shall mean the Prospectus Supplement, dated May
___, 1997, relating to the Certificates.
"Rating Agency" shall mean S&P.
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"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 right to receive the Interest Strip on
each Distribution Date. Collections in respect of the Retained Interest shall be
deposited in the Certificate Account.
"Retained Interestholder" shall mean initially the Depositor and upon
assignment thereof the holder of a Retained Interest.
"S&P" shall mean Standard & Poor's Ratings Services, a subsidiary of The
McGraw-Hill Companies, Inc.
"Series" shall mean Series 1997-1.
"Trust Property" shall mean, (i) the Underlying Security described on
Schedule I (exclusive of the Call Warrant and the 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 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.
"Underlying Securities Issuer" shall mean the Federal Home Loan Banks.
"Voting Rights" shall, in the entirety, be allocated separately to the
Certificateholders 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 Call Warrant.
(b) The terms listed below are not applicable to this Series.
"Accounting Date"
"Advance"
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"Authorized Newspaper"
"Basic Documents"
"Call Premium Percentage"
"Class"
"Credit Support"
"Credit Support Instrument"
"Credit Support Provider"
"Discount Certificate"
"Floating Pass-Through Rate"
"Floating Rate Certificate"
"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 Account"
"Sub-Administration Agreement"
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"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 Trust and Certificates. (a)The Trust created
hereby shall be known as the "FHLB Security-Backed Trust, Series 1997-1" and the
Certificates evidencing certain undivided ownership interests therein shall be
known as "FHLB Security-Backed Certificates, Series 1997-1".
(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 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 Internal Revenue Code of 1986,
as amended, 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.
(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 Trust shall not issue additional Certificates or incur any indebtedness.
Section 4. Call Warrant. (a) The Trust Property of the Trust created
hereby does not include the Call Warrant. The transfer and exchange of the Call
Warrant shall be administered by the Trustee on behalf of the Depositor.
(b) The Call Warrant will be uncertificated and shall be as described in
Schedule II attached hereto. The 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,
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without the consent of the Certificateholders or any other party. The beneficial
ownership interest in the 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 Call Warrant without the consent of such Warrantholder.
Section 5. Retained Interest. (a) The Trust Property of the Trust does not
include the Retained Interest. The transfer and exchange of the Retained
Interest shall be administered by the Trustee on behalf of the Depositor.
(b) The Retained Interest will be uncertificated and shall be as
described in Schedule III attached hereto. The 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 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 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) 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):
(i) first, to the 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; and
(ii) second, to the Certificateholders, Required Principal, if any.
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(b) On an Early Termination Date, if applicable, the Trustee shall apply
Available Funds in the Certificate Account as follows:
(i) first, to the 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;
(ii) second, to the Certificateholders, Required Principal; and
(iii) third, to any creditors of the Trust in satisfaction of
liabilities thereto.
(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. Trustee's 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 the
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
Certificates may be paid the Early Termination Price by the Trust upon the
purchase of the FHLB Security by the holder of the 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 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 FHLB 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.
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(d) Delivery of an 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.
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.
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(d) The Certificateholders shall not be entitled to terminate the Trust
or cause the sale or other disposition of the Underlying Security, if and for so
long as the 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 May___, 1997.
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).
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
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<PAGE>
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.
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<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 FHLB Security-
Backed Trust, Series 1997-1
By
----------------------------------------
Name: Teresa L. Davis
Title: Vice President
<PAGE>
SCHEDULE I
SERIES 1997-1
UNDERLYING SECURITIES SCHEDULE
I. FHLB Security: 7.15% Federal Home Loan Banks Fixed Rate Bond due April
23, 2007, subject to the Warrant and exclusive of the Retained Interest
Principal Amount Deposited: $10,000,000
Original Issue Date: April 23, 1997
Maturity Date: April 23, 2007
Principal Payment Date: April 23, 2007
Interest Rate: 7.15%
Interest Payment Dates: April 23 and October 23
Initial Accrued Interest: ______________
Redemption Dates: None
Redemption Prices: N/A
Form of Underlying Securities: Book-entry on the Fed Book-Entry System
<PAGE>
SCHEDULE II
DESCRIPTION OF THE SERIES 1997-1 CALL WARRANT
The Call Warrant represents the right to purchase the FHLB Security on any
Early Termination Date for the Liquidation Price.
The 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 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 Call Warrant without
the consent of such Warrantholder.
<PAGE>
SCHEDULE III
DESCRIPTION OF THE SERIES 1997-1 RETAINED INTEREST
The holder of the Retained Interest will retain the right with respect to
the FHLB Security to receive on each Distribution Date, from payments received
on the FHLB Security, a distribution equal to 0.05% per annum of the principal
amount of the FHLB Security (the "Interest Strip"). The rights of the holder of
the Retained Interest to the Interest Strip is of equal priority with the rights
of the Certificateholders to receive distributions of interest.
The 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
Retained Interest will be recorded on the records of the Trustee. On each
Distribution Date, payments will be made on the 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 Retained
Interest without the consent of the holder of the Retained Interest.
<PAGE>
EXHIBIT A
STANDARD TERMS FOR TRUST AGREEMENTS
(begins on next page)
<PAGE>
EXHIBIT B
FORM OF CERTIFICATE
R-1 $10,000,000
CUSIP NO. __________
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 1997-1
$10,000,000 CERTIFICATE PRINCIPAL BALANCE
7.10% PASS-THROUGH RATE
evidencing a fractional undivided beneficial ownership interest in the Trust, as
defined below, the property of which consists principally of $10,000,000 in
aggregate principal amount of Fixed Rate Bonds of the Federal Home Loan Banks
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 TEN MILLION
DOLLARS non-assessable, fully-paid, fractional undivided interest in the FHLB
Security-Backed Trust, Series 1997-1 (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 1997-1, dated as of May 28, 1997 (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 "FHLB Security-Backed Certificates, Series 1997-1" (herein called the
"Certificates"). This Certificate is issued under and is subject to the terms,
provisions and conditions of the Trust Agreement, to which Trust Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound. The Trust Property consists of: (i) 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 May 28, 1997 (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
<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-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-4
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed as of the date set forth below.
FHLB SECURITY-BACKED TRUST, SERIES 1997-1
By: BANK ONE, WEST VIRGINIA, N.A., not in
its individual capacity but solely as
Trustee,
By
----------------------------------------
Authorized Officer
Dated: May 28, 1997
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-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 1997-1 [Call
Warrant] [Retained Interest].
EXECUTED this __ day of _______________________
[ASSIGNOR]
By
-----------------------------------------
Name
--------------------------------------
Title
-------------------------------------
ACKNOWLEDGED AND AGREED TO:
[ASSIGNEE]
By
---------------------------------
Name
----------------------------
Title
----------------------------
ACKNOWLEDGMENT
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 1997-1 [Call Warrant] [Retained Interest]
Ladies and Gentlemen:
In connection with the proposed acquisition of the above-captioned Series
1997-1 [Call Warrant] [Retained Interest] by the undersigned pursuant to
Section 11 of the Series Supplement dated as of May 28, 1997, 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
<PAGE>
EXHIBIT 99.2
R-1 $10,000,000
CUSIP NO. ___________
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.
FHLB SECURITY-BACKED CERTIFICATES
SERIES 1997-1
$10,000,000 CERTIFICATE PRINCIPAL BALANCE
7.10% PASS-THROUGH RATE
evidencing a fractional undivided beneficial ownership interest in the Trust, as
defined below, the property of which consists principally of $10,000,000 in
aggregate principal amount of Fixed Rate Bonds issued by the Federal Home Loan
Banks ("FHLB") 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 TEN MILLION
DOLLARS non-assessable, fully-paid, fractional undivided interest in the FHLB
Security-Backed Trust, Series 1997-1 (the "Trust"), formed by the Depositor.
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 1997-1, dated as of May 28, 1997 (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
<PAGE>
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 "FHLB Security-Backed Certificates, Series 1997-1" (herein called the
"Certificates"). This Certificate is issued under and is subject to the terms,
provisions and conditions of the Trust Agreement, to which Trust Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound. The Trust Property consists of: (i) 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 May 28, 1997 (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.
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
2
<PAGE>
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 is made upon this Certificate. The Trust Agreement also permits
the amendment thereof, in certain limited circumstances, without the consent of
the Holders of any of the Certificates.
The Certificates are issuable in fully registered form only in 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 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.
3
<PAGE>
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.
4
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed as of the date set forth below.
FHLB SECURITY-BACKED TRUST, SERIES 1997-1
By: BANK ONE WEST VIRGINIA, N.A., not in
its individual capacity but solely as
Trustee,
By_________________________________________
Authorized Officer
Dated: May 28, 1997
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is 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
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.
