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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) May 28, 1997
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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 May 19, 1997 (the
"Underwriting Agreement"), between the Registrant and Morgan Keegan &
Company, Inc. as representative (the "Representative") on behalf of
itself and Dain Bosworth Incorporated (the "Underwriters"), the
Registrant has sold to the Underwriters $7,000,000 in aggregate
principal amount of 7.10% FHLB Security-Backed Certificates, Series
1997-1 due April 25, 2007 (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
May 28, 1997 (the "Trust Agreement"), between the Registrant and Bank
One, West Virginia, N.A., as trustee (the "Trustee"). The
Certificates will be issued by the FHLB Security-Backed Trust, Series
1997-1 (the "Trust") 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 Series Supplement, dated as of May 28, 1997, between the Registrant
and Bank One, West Virginia, as trustee, supplementing the Standard
Terms for Trust Agreements, dated as of November 1, 1996, filed as
Exhibit 4.1 to the Registrant's Form 8-K (file no. 333-09883) filed
with the Commission on December 4, 1996 (and incorporated by reference
herein).
8.1 Opinion of Chapman and Cutler as to certain tax matters.
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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: June 9, 1997 By:/s/ C. David Ramsey
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C. David Ramsey
President
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Exhibit 1.1
Southpoint Structured Assets, Inc.
FHLB Security-Backed Certificates, Series 1997-1
Underwriting Agreement
May 19, 1997
Morgan Keegan & Company, Inc.,
as Representative to the Underwriters
listed on Schedule I hereto
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 $7,000,000 aggregate principal amount of its
7.10% FHLB Security-Backed Certificates, Series 1997-1, due April 25, 2007 (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") to Morgan Keegan & Company, Inc. and to Dain
Bosworth Incorporated (each, an "Underwriter" and together the "Underwriters")
for whom Morgan Keegan & Company, Inc. is acting as representative (the
"Representative"). Pursuant to the Trust Agreement, the Company and the Trustee
will form the FHLB Security-Backed Trust, Series 1997-1 (the "Trust") for the
purpose of issuing the Certificates. The Certificates will represent a
fractional undivided interest in the Trust and the principal asset of the Trust
will consist of a Fixed Rate Bond issued by the Federal Home Loan Banks having
an aggregate principal amount of $7,000,000, a coupon of 7.15% and a maturity of
April 23, 2007 (the "FHLB Security"). The FHLB Security will be deposited into
the Trust by the Company subject to (i) the right of the holder of the Call
Warrant to purchase the FHLB Security on any date on or after April 25, 1999 (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 Retained Interest to receive on each Distribution Date from payments
received on the FHLB Security, a distribution equal to 0.05% per annum
multiplied by the principal amount of the FHLB Security. The FHLB Security is
sometimes referred to herein as the "Underlying Security." The Call Warrant and
the Retained Interest 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
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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 Underwriters 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 several Underwriters, and the Underwriters agree to purchase, severally and
not jointly, from the Company, the respective principal amount of Certificates
and at the purchase price set forth opposite such Underwriter's name in
Schedule I hereto.
(b) The Company will deliver the Certificates against payment of the
purchase price by the Underwriters at 11:00 a.m., EST, on May 28, 1997, or such
later date as the Representative shall designate, which date and time may be
postponed by agreement between the Representative 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 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 Underwriters by the Company.
2. The Company understands that the several Underwriters intend (i) to
make a public offering of their respective portions of the Certificates and
(ii) initially to offer the Certificates upon the terms set forth in the
Prospectus, and each 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
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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 (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 the Representative 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
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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 Underwriters.
(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 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 Warrant and the
Retained Interest).
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(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 Representative represents and warrants to and agrees with the
Company that such Representative will have funds available at First Tennessee
Bank in the Representative'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 each 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 Representative, 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 each Underwriter may
reasonably request;
(c) from the date hereof and prior to the Closing Date, to furnish to
the Representative a copy of any proposed amendment or supplement to the
Registration Statement or the Prospectus, for the Representative's review,
and not to file any such proposed amendment or supplement to which the
Representative reasonably objects;
(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 the Representative 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
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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 Underwriters a
prospectus relating to the Certificates is required by law to be delivered
in connection with sales by the Underwriters or dealers, 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 Underwriters and to the dealers (whose names and addressees
the Representative will furnish to the Company) to which Certificates may
have been sold by the Underwriters 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 the Representative
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
Underwriters) 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 the Representative
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 the
Representative as soon as practicable, but no later than sixteen months
after the effective date of the Registration 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 the
Representative 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
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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 several obligations of the Underwriters 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 information
on the part of the Commission shall have been complied with to the
Representative's 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 Underwriters 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;
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(d) the Representative shall have received on and as of the Closing
Date a certificate of an executive officer of the Company satisfactory to
the Representative 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 the Representative 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 the Representative 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 the Representative their opinion, dated the Closing Date, substantially
to the effect set forth in Exhibit C, in form and substance satisfactory to
the Representative;
(h) the Representative shall have received on and as of the Closing
Date an opinion of Chapman and Cutler, counsel to the Underwriters,
substantially to the effect set forth in Exhibit D in form and substance
satisfactory to the Representative;
(i) the Certificates shall have been approved for listing on the New
York Stock Exchange, subject to official notice of issuance;
(j) The 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 Representative such further certificates and documents as the
Representative shall reasonably request.
7. The Company agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any 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 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
relating to any Underwriter furnished to the Company by such Underwriter through
the Representative 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
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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.
Each Underwriter agrees, severally and not jointly, 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 to 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 Underwriters
and such control persons of the Underwriters shall be designated in writing by
the Representative 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
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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 Underwriters 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 Underwriters 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 Underwriters 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 Underwriters bear to the aggregate public
offering price of the Certificates. The relative fault of the Company on the
one hand and the Underwriters 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 Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and the Underwriters 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 Section 9, in no event shall an
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
Underwriters' obligation to contribute pursuant to this Section 9 are several in
proportion to the respective principal amount of Certificates set forth opposite
their names in Schedule I hereto, and not joint.
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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
any Underwriter or any person controlling any 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 Representative, 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
Representative, is material and adverse and which, in the judgment of the
Representative, makes it impracticable to market the Certificates on the terms
and in the manner contemplated in the Prospectus.
9. If, on the Closing Date, any one or more of the Underwriters shall
fail or refuse to purchase Certificates which it or they have agreed to purchase
under this Agreement, and the aggregate principal amount of Certificates which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase is not more than one-tenth of the aggregate principal amount of the
Certificates, the other Underwriters shall be obligated severally in the
proportions that the principal amount of Certificates set forth opposite their
respective names in Schedule I hereto bears to the aggregate principal amount of
Certificates set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as the Representatives may specify,
to purchase the Certificates which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase on such date; provided that in no event
shall the principal amount of Certificates that any Underwriter has agreed to
purchase pursuant to Section 1 be increased pursuant to this Section 9 by an
amount in excess of one-tenth of such principal amount of Certificates without
the written consent of such Underwriter. If, on the Closing Date, any
Underwriter or Underwriters shall fail or refuse to purchase Certificates and
the aggregate principal amount of Certificates with respect to which such
default occurs is more than one-tenth of the aggregate principal amount of
Certificates to be purchased, and arrangements satisfactory to the
Representative and the Company for the purchase of such Certificates are not
made within 36 hours after such default, this Agreement shall terminate without
liability on the party of any non-defaulting Underwriter or the Company. In any
such case either the
-11-
<PAGE>
Representative or the Company shall have the right to postpone the Closing Date,
but in no event for longer than seven days, in order that the required changes,
if any, in the Registration Statement and in the Prospectus or in any other
documents or arrangements may be effected. Any action taken under this paragraph
shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
10. If this Agreement shall be terminated by the Underwriters, or any of
them, 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 Underwriters' obligations cannot be fulfilled,
the Company agrees to reimburse the Underwriters or such Underwriter for all
out-of-pocket expenses (including the fees and expenses of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering of Certificates.
11. This Agreement shall inure to the benefit of and be binding upon the
Company, the Underwriters, any controlling persons referred to herein and their
respective successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be 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 any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
12. Any action by the Underwriters hereunder may be taken by the
Underwriters jointly or by the Representative alone on behalf of the
Underwriters, and any such action taken by the Underwriters jointly or by the
Representative alone shall be binding upon the Underwriters. 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 each Underwriter shall be given at the address set
forth on Schedule I 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>
13. 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 /s/ C. David Ramsey
-------------------------------
C. David Ramsey
President
Accepted: May 19, 1997
Morgan Keegan & Company, Inc.
Acting severally on behalf of itself and
the Underwriters listed in Schedule I
hereto
By: Morgan Keegan & Company, Inc.
By /s/ Jere S. McGuffee
------------------------------
Jere S. McGuffee
First Vice President
-13-
<PAGE>
Schedule I
<TABLE>
<CAPTION>
<S> <C>
Representative: Morgan Keegan & Company, Inc.
Underwriters and Notice
Addresses: Morgan Keegan & Company, Inc.
50 North Front Street
Memphis, Tennessee 38103
Dain Bosworth Incorporated
60 South Sixth Street
Minneapolis, Minnesota 55402
Underwriting Agreement
dated: May 19, 1997
Registration Statement No.: 333-09883
Title of Certificates: FHLB Security-Backed Certificates, Series 1997-1
$7,000,000 7.10% Certificates due April 25, 2007
Underlying Securities: $7,000,000 7.15% Federal Home Loan Banks ("FHLB")
Fixed Rate Bonds due April 23, 2007 subject to the Call
Warrant and exclusive of the Retained Interest.
Aggregate Principal Amount: $7,000,000 Certificates
Price to each Underwriter: Morgan Keegan & Company, Inc.: $3,920,000 (98% of
$4,000,000 principal amount of Certificates)
Dain Bosworth Incorporated: $2,940,000 (98% of
$3,000,000 principal amount of Certificates)
Trust Agreement: Standard Terms for Trust Agreements, dated as of
November 1, 1996, as supplemented by the Series
Supplement, dated as of May 28, 1997, between the
Company and Bank One, West Virginia, N.A., as Trustee
Maturity: April 25, 2007
Interest Rate: 7.10%
Interest Payment Dates: April 25 and October 25
Early Termination
Provisions: The Certificates may be paid in full on any date on or after
April 25, 1999 in an amount equal to par plus accrued
interest
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Closing Date and Time of
Delivery: May 28, 1997, 11:00 a.m. (EST)
Closing Location: Offices of Chapman and Cutler, 111 West Monroe Street,
Chicago, Illinois 60603
</TABLE>
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
Dain Bosworth Incorporated
60 South Sixth Street
Minneapolis, Minnesota 55402
New York Stock Exchange, Inc.
20 Broad Street
New York, New York 10005
Re:
Southpoint Structured Assets, Inc.
FHLB Security-Backed Certificates, Series 1997-1
------------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to Southpoint Structured Assets, Inc. (the
"Company") in connection with the issuance and sale of FHLB Security-Backed
Certificates, Series 1997-1 (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 May 28, 1997 (the "Trust Agreement"), between the
Company and Bank One, West Virginia, N.A., as trustee (the "Trustee").
The Certificates will be issued by the FHLB Security-Backed Trust, Series
1997-1 (the "Trust"). The Certificates will represent a fractional undivided
interest in the Trust and the principal asset of the Trust will consist of Fixed
Rate Bonds issued by the Federal Home Loan Banks having an aggregate principal
amount of $7,000,000, a coupon of 7.15% and a maturity of April 23, 2007 (the
"FHLB Security"). The FHLB Security will be deposited into the Trust by the
Company subject to (i) the right of the holder of the Call Warrant to purchase
the FHLB Security on any date on or after April 25, 1999 (an "Early Termination
<PAGE>
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 Retained
Interest to receive on each Distribution Date from payments received on the FHLB
Security, a distribution equal to 0.05% per annum multiplied by the principal
amount of the FHLB Security. The FHLB Security is sometimes referred to herein
as the "Underlying Security."
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 May 19, 1997 (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. and Dain Bosworth Incorporated (the "Underwriters") pursuant to an
Underwriting Agreement, dated May 19, 1997, between the Company and the
Underwriters (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;
(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
A-2
<PAGE>
(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.
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.
A-3
<PAGE>
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 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
A-4
<PAGE>
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
Dain Bosworth Incorporated
60 South Sixth Street
Minneapolis, Minnesota 55402
Standard & Poors Ratings Services
25 Broadway, 21st Floor
New York, New York 10004
Re: Southpoint Structured Assets, Inc.
FHLB Security-Backed Certificates, Series 1997-1
------------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to Southpoint Structured Assets, Inc. (the
"Company") in connection with the issuance and sale of FHLB Security-Backed
Certificates, Series 1997-1 (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 May 28, 1997 (the "Trust Agreement"), among the Company
and Bank One, West Virginia, N.A., as trustee (the "Trustee").
The Certificates will be issued by the FHLB Security-Backed Trust, Series
1997-1 (the "Trust") to be formed pursuant to the Trust Agreement. The
Certificates will represent a fractional undivided interest in the Trust and the
principal asset of the Trust will consist of Fixed Rate Bonds issued by the
Federal Home Loan Banks ("FHLB") having an aggregate principal amount of
$7,000,000, a coupon of 7.15% and a maturity of April 23, 2007 (the "FHLB
Security"). The FHLB Security will be deposited into the Trust subject to
(i) the right of the holder of the Call Warrant to purchase the FHLB Security on
any date on or
<PAGE>
after April 25, 1999 (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 Retained Interest to receive on each
Distribution Date from payments received on the FHLB Security, a distribution
equal to 0.05% per annum multiplied by the principal amount of the FHLB
Security. The FHLB Security is sometimes referred to herein as the "Underlying
Security." The Trustee will hold legal title to the Underlying Security and
other assets of the Trusts for the benefit of the Certificateholders, but will
have no power to reinvest proceeds attributable to the Underlying Security 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 15, 1996, as supplemented by the
prospectus supplement dated May 19, 1997 (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. and Dain Bosworth Incorporated (the "Underwriters") pursuant to an
Underwriting Agreement, dated May 19, 1997, between the Company and the
Underwriters (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(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
(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
B-2
<PAGE>
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 Certificate holder 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.
B-3
<PAGE>
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 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
Dain Bosworth Incorporated
60 South Sixth Street
Minneapolis, Minnesota 55402
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 FHLB Security-Backed Certificates, Series 1997-1 (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 May 28,
1997 (the "Trust Agreement"), among the Company and the Trustee.
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 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.
<PAGE>
3. The Trustee has duly accepted the office of trustee under the
Trust Agreement.
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 has 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
Dain Bosworth Incorporated
60 South Sixth Street
Minneapolis, Minnesota 55402
Re: Southpoint Structured Assets, Inc.
FHLB Security-Backed Certificates, Series 1997-1
Ladies and Gentlemen:
We have acted as counsel to Morgan Keegan & Company, Inc. and Dain Bosworth
Incorporated (the "Underwriters") in connection with the sale by Southpoint
Structured Assets, Inc., a Delaware corporation (the "Company"), and the
purchase by the Underwriters pursuant to an underwriting agreement dated May 19,
1997 (the "Underwriting Agreement") of certificates entitled FHLB Security-
Backed Certificates, Series 1997-1 (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 May 28, 1997 (the "Trust
Agreement") between the Company and Bank One, West Virginia as trustee (the
"Trustee"). The Certificates will be issued by the FHLB Security-Backed Trust,
Series 1997-1 (the "Trust") to be formed pursuant to the Trust Agreement. The
Certificates will represent a fractional undivided interest in the Trust and the
principal asset of the Trust will consist of Fixed Rate Bonds issued by the
Federal Home Loan Banks having an aggregate principal amount of $7,000,000, a
coupon of 7.15% and a maturity of April 23, 2007 (the "FHLB Security"). The FHLB
Security will be deposited by the Company into the Trust subject to (i) the
right of the holder of the Call Warrant to purchase the FHLB Security on any
date on or after April 25, 1999 (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 Retained Interest to receive on each
Distribution Date from payments received on the FHLB Security, a distribution
equal to 0.05% per annum multiplied by the principal amount of the FHLB
Security. The FHLB Security is sometimes referred to herein as the "Underlying
Security." Capitalized terms used, but not defined herein, shall have the
meanings assigned to such terms in the Trust Agreement.
<PAGE>
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 May 19, 1997 (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.
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").
D-2
<PAGE>
11. The final form of a supplement dated May 19, 1997 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
Underwriters pursuant to the Underwriting Agreement, be entitled to the
benefits of the Trust Agreement.
(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
D-3
<PAGE>
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>
===============================================================================
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
===============================================================================
<PAGE>
Table of Contents
<TABLE>
<S> <C> <C>
Section 1. Incorporation of Standard Terms................................................... 1
Section 2. Definitions....................................................................... 1
Section 3. Designation of Trust and Certificates............................................. 6
Section 4. Call Warrant...................................................................... 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 Warrant and Retained Interest.................................. 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>
<PAGE>
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
<PAGE>
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.
-2-
<PAGE>
"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 an amount
equal to $1,200 per year payable from the Interest Strip on each April 25
Distribution Date.
"Pass-Through Rate" shall mean 7.10% per annum.
"Prepaid Ordinary Expenses" shall be $4,200 for this Series.
"Prospectus Supplement" shall mean the Prospectus Supplement, dated May 19,
1997, relating to the Certificates.
"Rating Agency" shall mean S&P.
-3-
<PAGE>
"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"
-4-
<PAGE>
"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"
-5-
<PAGE>
"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,
-6-
<PAGE>
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; provided, however, that on
each April 25 Distribution Date, the Trustee shall retain a portion from
the Interest Strip in an amount equal to $1,200 for payment of the
Trustee's Ordinary Expenses for such year; and
(ii) second, to the Certificateholders, Required Principal, if any.
-7-
<PAGE>
(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 and
Ordinary Expenses. The Prepaid Ordinary Expenses shall be paid to the Trustee
by the Depositor on or prior to the Closing Date and the Ordinary Expenses shall
be paid to the Trustee from a portion of the Interest Strip retained by the
Trustee on each April 25 Distribution Date pursuant to Section 7(a)(i);
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 or the holder of the Retained Interest, as applicable, of any fees
or charges previously paid to the Trustee for the months after the month 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 Warrantholder.
(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
-8-
<PAGE>
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 Warrantholders 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 Warrant and Retained Interest. The
Warrantholder or the Retained Interestholder, as applicable, may assign the Call
Warrant or the 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.
-9-
<PAGE>
(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 19, 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
-10-
<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.
-11-
<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 /s/ C. David Ramsey
-----------------------------------------
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 /s/ Teresa L. Davis
-----------------------------------------
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 Call Warrant and exclusive of the Retained
Interest
Principal Amount Deposited: $7,000,000
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: $45,878.72
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
(incorporated by reference to the
Registrant's Form 8-K filed with the
Commission on December 4, 1996)
<PAGE>
Exhibit B
Form of Certificate
R-1 $7,000,000
CUSIP No. 844653 AA3
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
$7,000,000 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 $7,000,000 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 SEVEN 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 8.1
[LETTERHEAD OF CHAPMAN AND CUTLER]
May 28, 1997
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
National Westminster Bank plc
175 Water Street
New York, New York 10038
Standard & Poor's Ratings Services
25 Broadway, 21st Floor
New York, New York 10004
Re: Southpoint Structured Assets, Inc.
FHLB Security-Backed Certificates, Series 1997-1
------------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to Southpoint Structured Assets, Inc. (the
"Company") in connection with the issuance and sale of FHLB Security-Backed
Certificates, Series 1997-1 (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 May 28, 1997 (the "Trust Agreement"), among the Company
and Bank One, West Virginia, N.A., as trustee (the "Trustee").
The Certificates will be issued by the FHLB Security-Backed Trust, Series
1997-1 (the "Trust") to be formed pursuant to the Trust Agreement. The
Certificates will represent a fractional undivided interest in the Trust and the
principal asset of the Trust will consist of a Federal Home Loan Banks Fixed
Rate Bond having an aggregate principal amount of $7,000,000, a coupon of 7.15%
and a maturity of April 23, 2007 (the "FHLB Security"). The FHLB Security will
be deposited into the Trust subject to (i) the right of the holder of
<PAGE>
the Call Warrant to purchase the FHLB Security on any date on or after April 25,
1999 (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 Retained Interest to receive on each Distribution Date from
payments received on the FHLB Security, a distribution equal to 0.05% per annum
multiplied by the principal amount of the Class A FHLB Security. The Trustee
will hold legal title to the FHLB Security and other assets of the Trust for the
benefit of the Certificateholders, but will have no power to reinvest proceeds
attributable to the FHLB Security or other assets of the Trust or to vary
investments in the Trust 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. and Dain Bosworth Incorporated (the "Underwriters") pursuant to an
Underwriting Agreement, dated May 19, 1997, between the Company and Morgan
Keegan & Company, Inc., as Representative on behalf of the Underwriters (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(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
(d) the documents delivered by the Company on the Closing Date
pursuant to the Agreements.
2
<PAGE>
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 on the date hereof 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, the 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 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.
3
<PAGE>
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 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/MJTrofa
4
