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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) August 29, 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 August 25, 1997
(the "Underwriting Agreement"), between the Registrant and Morgan
Keegan & Company, Inc. (the "Underwriter"), the Registrant has sold to
the Underwriter $10,000,000 in aggregate principal amount of 6.25%
Treasury Security-Backed Certificates, Series 1997-1 due February 15,
2003 (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 August 29, 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
Treasury 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 August 29, 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: September 12, 1997 By: /s/ C. David Ramsey
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C. David Ramsey
President
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Exhibit No. 1.1
Southpoint Structured Assets, Inc.
Treasury Security-Backed Certificates, Series 1997-1
Underwriting Agreement
August 25, 1997
Morgan Keegan & Company, Inc.
Morgan Keegan Tower
50 North Front Street
Memphis, Tennessee 38103
Ladies and Gentlemen:
Southpoint Structured Assets, Inc., a Delaware corporation (the "Company"),
proposes to cause the issuance of $10,000,000 aggregate principal amount of its
6.25% Treasury Security-Backed Certificates, Series 1997-1, due February 15,
2003 (the "Certificates"), to be issued under the trust agreement specified in
Schedule I hereto (the "Trust Agreement") between the Company and the Trustee
identified in such Schedule (the "Trustee"), in each case, to Morgan Keegan &
Company, Inc. (the "Underwriter"). Pursuant to the Trust Agreement, the Company
and the Trustee will form the Treasury 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 United States Treasury Note having an aggregate
principal amount of $10,000,000, a coupon of 6.25% and a maturity of February
15, 2003 (the "Treasury Note"). The Treasury Note will be deposited into the
Trust by the Company subject to the right of the holder of the Call Warrant to
purchase the Treasury Note on any date on or after February 28, 1998 (an "Early
Termination Date") at a price of par plus accrued interest to such Early
Termination Date (the "Liquidation Price"). The Treasury Note is sometimes
referred to herein as the "Underlying Security." The Call Warrant is not subject
to this Agreement.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement on Form S-3 (No. 333-09883), relating to certain securities to be
issued from time to time by various trusts originated by the Company. The
Company also has filed with, or proposes to file with, the Commission pursuant
to Rule 424 under the Securities Act a prospectus supplement specifically
relating to the Certificates. The registration statement as amended to the date
of this Agreement is hereinafter referred to as the "Registration Statement" and
the related prospectus in the form first used to confirm sales of the
Certificates is hereinafter referred to as the "Basic Prospectus." The Basic
Prospectus as supplemented by the prospectus supplement specifically relating to
the Certificates in the form first used to confirm sales of the Certificates is
hereinafter referred
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to as the "Prospectus." Any preliminary form of the Prospectus Supplement which
has heretofore been filed pursuant to Rule 424, or prior to the effective date
of the Registration Statement, pursuant to Rule 402(a) or 424(a) is hereinafter
called a "Preliminary Prospectus Supplement." Any reference to "amend,"
"amendment" or "supplement" with respect to the Registration Statement, the
Basic Prospectus, any preliminary prospectus or the Prospectus shall be deemed
to refer to and include any documents filed under the Exchange Act after the
date of this Agreement, or the date of the Basic Prospectus, any preliminary
prospectus or the Prospectus, as the case may be, which are deemed to be
incorporated by reference therein.
The Company hereby agrees with the Underwriter as follows:
1. (a) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company agrees to sell to
the Underwriter, and the Underwriter agrees to purchase from the Company, the
Certificates at a price, as of the Closing Date, equal to 99% of the aggregate
principal balance of the Certificates. There will be added to the purchase price
of the Certificates an amount equal to interest accrued thereon from August 29,
1997 (the "Cut-off Date") to but not including the Closing Date (defined below).
(b) The Company will deliver the Certificates against payment of the
purchase price by the Underwriter at 11:00 a.m., EST, on August 29, 1997, or
such later date as the Underwriter shall designate, which date and time may be
postponed by agreement between the Underwriter 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 Underwriter by the Company.
2. The Company understands that the Underwriter intends (i) to make a
public offering of the Certificates and (ii) initially to offer the Certificates
upon the terms set forth in the Prospectus, and the Underwriter agrees that all
such offers and sales by the Underwriter shall be made in compliance with all
applicable laws and regulations.
3. The Company represents and warrants to the Underwriter that:
(a) The Registration Statement on Form S-3 (No. 333-09883) in respect
of the Certificates has been filed with the Commission in the form
heretofore delivered or to be delivered and such Registration Statement in
such form has been declared effective by the Commission and no stop order
suspending the effectiveness of such Registration Statement has been issued
and no proceeding for that purpose has been initiated or threatened by the
Commission.
(b) The Certificates meet the requirements for use of Form S-3 under
the Securities Act, and the Registration Statement and the Prospectus
conform, and any amendments or supplements thereto will conform, in all
material respects to the
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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 Underwriter pursuant to this Agreement, such
Certificates will have been duly and validly issued and outstanding and will be
entitled to the benefits provided by the Trust Agreement; at the Closing Date
the Trust Agreement will be duly authorized, executed and delivered by the
Company and will constitute a valid and binding agreement of the Company
enforceable in accordance with its terms, except that the enforceability thereof
may be subject to (i) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors' rights
generally, and (ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law); and at the
Closing Date the Trust Agreement and the Certificates will conform in all
material respects to the respective descriptions thereof in the Prospectus and
the representations and warranties of the Company in the Trust Agreement will be
true and correct.
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(f) The issue and sale of the Certificates, the compliance by the
Company with all applicable provisions of the Certificates, the Trust
Agreement and this Agreement, and the consummation of the transactions
herein or therein contemplated will not conflict with or result in a breach
of any of the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, mortgage, pledge, charge,
security interest or encumbrance (collectively, "Liens") upon any property
or assets of the Company pursuant to, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company
is a party or by which the Company is bound or to which any of the property
or assets of the Company is subject, nor will any such action result in any
violation of the provisions of the Certificate of Incorporation or the by-
laws of the Company or of any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the
Company or any of its properties; and no consent, notice, approvals,
authorization, order, registrations or qualification of or with any such
court or governmental agency or body is required for the issue and sale of
the Certificates or the consummation by the Company of the other
transactions contemplated by this Agreement or the Trust Agreement except
such as have been obtained and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities
or Blue Sky laws in connection with the purchase and distribution of the
Certificates by the Underwriter.
(g) Other than as set forth or contemplated in the Prospectus, there
are no legal or governmental proceedings pending to which the Company is a
party or of which any property of the Company is the subject which, if
determined adversely to such person would individually or in the aggregate
have a material adverse effect on 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 Security
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 Security 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 Security (exclusive of the Call Warrant).
(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").
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4. The Underwriter represents and warrants to and agrees with the Company
that such Underwriter will have funds available at First Tennessee Bank in the
Underwriter's account at such bank at the time all documents are executed and
the closing of the sale of the Certificates is completed except for the transfer
of funds and the delivery of the Certificates. Such funds will be available for
immediate transfer into the account of the Company maintained at such bank.
5. The Company covenants and agrees with the Underwriter as follows:
(a) to cause the Prospectus to be transmitted to the Commission for
filing pursuant to Rule 424(b) under the Securities Act by means reasonably
calculated to result in filing with the Commission pursuant to said rule;
(b) to deliver to the Underwriter, at the expense of the Company, a
signed copy of the Registration Statement (as originally filed) and each
amendment thereto, in each case including exhibits and, during the period
mentioned in paragraph (e) below, as many copies of the Prospectus
(including all amendments and supplements thereto) as the Underwriter may
reasonably request;
(c) from the date hereof and prior to the Closing Date, to furnish to
the Underwriter a copy of any proposed amendment or supplement to the
Registration Statement or the Prospectus, for review by the Underwriter,
and not to file any such proposed amendment or supplement to which the
Underwriter 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 Underwriter promptly, and to confirm such advice
in writing, (i) when any amendment to the Registration Statement shall have
become effective, (ii) of any request by the Commission for any amendment
to the Registration Statement or any amendment or supplement to the
Prospectus or for any additional information, (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation or threatening of any proceeding
for that purpose, and (iv) of the receipt by the Company or the Trust of
any notification with respect to any suspension of the qualification of the
Certificates for offer and sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and to use its best efforts
to prevent the issuance of any such stop order or notification and, if
issued, to obtain as soon as possible the withdrawal thereof;
(e) if, during such period after the first date of the public
offering of the Certificates in the opinion of counsel for the Underwriter
a prospectus relating to the Certificates is required by law to be
delivered in connection with sales by the Underwriter or dealer, any event
shall occur as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein, in the
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light of the circumstances when the Prospectus is delivered to a purchaser,
not misleading, or if it is necessary to amend or supplement the Prospectus
to comply with law, forthwith to prepare and furnish, at the expense of the
Company, to the Underwriter and to the dealers (whose names and addressees
the Underwriter will furnish to the Company) to which Certificates may have
been sold by the Underwriter 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 Underwriter
shall reasonably request and to continue such qualification in effect so
long as reasonably required for distribution of the Certificates and to pay
all fees and expenses (including fees and disbursements of counsel to the
Underwriter) reasonably incurred in connection with such qualification and
in connection with the determination of the eligibility of the Certificates
for investment under the laws of such jurisdictions as the Underwriter 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
Underwriter 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
Underwriter copies of all reports or other communications (financial or
other) furnished to holders of Certificates, and copies of any reports and
financial statements furnished to or filed with the Commission or any
national securities exchange;
(i) to pay all costs and expenses incident to the performance of its
obligations hereunder, including without limiting the generality of the
foregoing, all costs and expenses (i) incident to the preparation,
issuance, execution, authentication and delivery of the Certificates,
including any expenses of the Trustee, (ii) incident to the preparation,
printing and filing under the Securities Act of the Registration Statement,
the Prospectus and any preliminary prospectus (including in each case all
exhibits, amendments and supplements thereto), (iii) incurred in connection
with the registration or qualification and determination of eligibility for
investment of the Certificates under the laws of such jurisdictions as the
Underwriter may designate (including fees of counsel for the Underwriter
and its disbursements), (iv) in
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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 the Underwriter and dealers of copies of the Registration
Statement and the Prospectus, including mailing and shipping, as herein
provided and (vii) payable to rating agencies in connection with the rating
of the Certificates; and
(j) to file with the Commission within fifteen days of the issuance
of the Certificates a Current Report on Form 8-K (for purposes of filing
the Trust Agreement).
6. The obligations of the Underwriter hereunder shall be subject to the
following conditions:
(a) the representations and warranties of the Company contained
herein are true and correct on and as of the Closing Date as if made on and
as of the Closing Date and the Company shall have complied with all
agreements and all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date;
(b) the Prospectus shall have been filed with the Commission pursuant
to Rule 424 within the applicable time period prescribed for such filing by
the rules and regulations under the Securities Act; no stop order
suspending the effectiveness of the Registration Statement shall be in
effect, and no proceedings for such purpose shall be pending before or
threatened by the Commission; and all requests for additional information
on the part of the Commission shall have been complied with to the
satisfaction of the Underwriter;
(c) since the respective dates as of which information is given in
the Registration Statement and the Prospectus there shall not have been any
material adverse change or any development involving a material adverse
change, or any development with respect to the Company, otherwise than as
set forth or contemplated in the Prospectus, the effect of which in the
judgment of the Underwriter makes it impracticable or inadvisable to
proceed with the public offering or the delivery of the Certificates on the
terms and in the manner contemplated in the Prospectus;
(d) the Underwriter shall have received on and as of the Closing Date
a certificate of an executive officer of the Company satisfactory to the
Underwriter 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 Underwriter their written opinion, dated the Closing Date,
substantially to the effect set forth in Exhibit A;
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(f) Chapman and Cutler, special tax counsel for the Company, shall
have furnished to the Underwriter 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 Underwriter their opinion, dated the Closing Date, substantially to
the effect set forth in Exhibit C, in form and substance satisfactory to
the Underwriter;
(h) the Underwriter shall have received on and as of the Closing Date
an opinion of Chapman and Cutler, counsel to the Underwriter, substantially
to the effect set forth in Exhibit D in form and substance satisfactory to
the Underwriter;
(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 Underwriter such further certificates and documents as the
Underwriter shall reasonably request.
7. The Company agrees to indemnify and hold harmless the Underwriter
and each person, if any, who controls the Underwriter within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, damages and liabilities
(including without limitation the legal fees and other expenses incurred in
connection with any suit, action or proceeding or any claim asserted)
caused by any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or the Prospectus (as amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or caused by any
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages or liabilities
are caused by any untrue statement or omission or alleged untrue statement
or omission made in reliance upon and in conformity with information
furnished to the Company by the Underwriter expressly for use therein as
described in Exhibit E hereto (the "Underwriter Information"); provided
that the foregoing indemnity with respect to any preliminary prospectus
shall not inure to the benefit of any Underwriter (or to the benefit of any
person controlling such Underwriter) from whom the person asserting any
such losses, claims, damages or liabilities purchased Certificates if such
untrue statement or omission or alleged untrue statement or omission made
in such preliminary prospectus is eliminated or remedied in the Prospectus
(as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) and, if required by law, a copy of the
Prospectus (as so amended or supplemented) shall not have been furnished to
such person at or prior to the written confirmation of the sale of such
Certificates to such person.
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The Underwriter agrees to indemnify and hold harmless the Company, its
directors, its officers who sign the Registration Statement and each person who
controls the Company within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act, to the same extent as the foregoing indemnity
from the Company to each Underwriter, but only with reference 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 Underwriter
and such control persons of the Underwriter shall be designated in writing by
the Underwriter and any such separate firm for the Company, its directors, its
officers who sign the Registration Statement and such control persons of the
Company or authorized representatives shall be designated in writing by the
Company. The Indemnifying Person shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the Indemnifying
Person agrees to indemnify any Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. No Indemnifying Person
shall, without the prior written consent of the Indemnified Person, effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Person is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Person, unless such settlement includes an
unconditional release of such Indemnified Person from all liability on claims
that are the subject matter of such proceeding.
If the indemnification provided for in the first and second paragraphs of
this Section 7 is unavailable to an Indemnified Person in respect of any losses,
claims, damages or liabilities referred to therein, then each Indemnifying
Person under such paragraph, in lieu of indemnifying such Indemnified Person
thereunder, shall contribute to the amount paid or payable by such Indemnified
Person as a result of such losses, claims, damages or
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liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriter on the
other hand from the offering of the Certificates or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and the Underwriter on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriter on the other shall be deemed
to be in the same respective proportions as the net proceeds from the offering
of such Certificates (before deducting expenses) received by the Company and the
total underwriting discounts and the commissions received by the Underwriter
bear to the aggregate public offering price of the Certificates. The relative
fault of the Company on the one hand and the Underwriter on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or by the
Underwriter and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company and the Underwriter agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, in no event shall the
Underwriter be required to contribute any amount in excess of the amount by
which the total price at which the Certificates underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages that such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
The indemnity and contribution agreements contained in this Section 7 are
in addition to any liability which the Indemnifying Persons may otherwise have
to the Indemnified Persons referred to above.
The indemnity and contribution agreements contained in this Section 7 and
the representations and warranties of the Company set forth in this Agreement
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
the Underwriter or any person controlling the Underwriter or by or on behalf of
the Company, its officers or directors or any other
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person controlling the Company and (iii) acceptance of and payment for any of
the Certificates.
8. Notwithstanding anything herein contained, this Agreement may be
terminated in the absolute discretion of the Underwriter, by notice given to the
Company, if after the execution and delivery of this Agreement and prior to the
Closing Date (i) trading generally shall have been suspended or materially
limited on or by, as the case may be, any of the New York Stock Exchange, the
American Stock Exchange and the National Association of Securities Dealers,
Inc., (ii) trading of any securities of or guaranteed by the Company shall have
been suspended on any exchange or in any over-the-counter market, (iii) a
general moratorium on commercial banking activities in New York shall have been
declared by either Federal or New York State authorities, or (iv) there shall
have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in the judgment of the
Underwriter, is material and adverse and which, in the judgment of the
Underwriter, makes it impracticable to market the Certificates on the terms and
in the manner contemplated in the Prospectus.
9. If this Agreement shall be terminated by the Underwriter because of
any failure or refusal on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, or if for any reason the
Company shall be unable to perform its obligations under this Agreement or any
condition of the Underwriter's obligations cannot be fulfilled, the Company
agrees to reimburse the Underwriter for all out-of-pocket expenses (including
the fees and expenses of their counsel) reasonably incurred by such Underwriter
in connection with this Agreement or the offering of Certificates.
10. This Agreement shall inure to the benefit of and be binding upon the
Company, the Underwriter, any controlling persons referred to herein and their
respective successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person, firm or
corporation any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision herein contained. No purchaser of Certificates
from the Underwriter shall be deemed to be a successor by reason merely of such
purchase.
11. All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted and confirmed
by any standard form of telecommunication. Notices to the Underwriter shall be
given at the address set forth on the first page hereof. Notices to the Company
shall be given to it at Southpoint Structured Assets, Inc., 50 North Front
Street, Memphis, Tennessee 38103 (fax: 901-579-4363); Attention: C. David
Ramsey.
-11-
<PAGE>
12. This Agreement may be signed in counterparts, each of which shall be
an original and all of which together shall constitute one and the same
instrument. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without giving effect to the conflicts of
laws provisions thereof.
Very truly yours,
Southpoint Structured Assets, Inc.
By /s/ C. David Ramsey
-------------------
C. David Ramsey
President
Accepted: August 25, 1997
By: Morgan Keegan & Company, Inc.
By /s/ Jere S. McGuffee
--------------------
Jere S. McGuffee
First Vice President
-12-
<PAGE>
Schedule I
Underwriting Agreement
dated: August 25, 1997
Registration Statement No.: 333-09883
Title of Certificates: $10,000,000 6.25% Treasury Security-Backed
Certificates, Series 1997-1 due February 15,
2003
Underlying Security: $10,000,000 6.25% United States Treasury Note
due February 15, 2003 subject to the Call
Warrant
Aggregate Principal Amount: $10,000,000
Price to Underwriter: $9,900,000 (99% of the principal amount of the
Certificates, plus accrued interest, if any,
from August 29, 1997 to the Closing Date)
Trust Agreement: Standard Terms for Trust Agreements, dated as of
November 1, 1996, as supplemented by the Series
Supplement, dated as of August 29, 1997, between
the Company and Bank One, West Virginia, N.A.,
as Trustee
Maturity: February 15, 2003
Interest Rate: 6.25%
Interest Payment Dates: February 15 and August 15
Early Termination of Certificates may be paid in full on any date
Provisions: on or after February 28, 1998 in an amount equal
to par plus accrued interest
Closing Date and Time of
Delivery: August 29, 1997, 11:00 a.m. (EST)
Closing Location: Offices of Chapman and Cutler, 111 West Monroe
Street, Chicago, Illinois 60603
<PAGE>
EXHIBIT A
[CHAPMAN AND CUTLER LETTERHEAD]
[Date]
Southpoint Structured Assets, Inc.
50 North Front Street
Memphis, Tennessee 38103
Morgan Keegan & Company, Inc.
Morgan Keegan Tower
50 North Front Street
Memphis, Tennessee 38103
New York Stock Exchange, Inc.
20 Broad Street
New York, New York 10005
Banque Paribas
787 Seventh Avenue, 31st Floor
New York, New York 10019
Standard & Poor's Ratings Services
25 Broadway, 21st Floor
New York, New York 10004
Re: Southpoint Structured Assets, Inc.
Treasury 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 Treasury 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 August 29, 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 Treasury 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
<PAGE>
consist of a United States Treasury Note having an aggregate principal amount of
$10,000,000, a coupon of 6.25% and a maturity of February 15, 2003 (the
"Treasury Note"). The Treasury Note will be deposited into the Trust by the
Company subject to the right of the holder of the Call Warrant to purchase the
Treasury Note on any date on or after February 28, 1998 (an "Early Termination
Date") at a price of par plus accrued interest to such Early Termination Date
(the "Liquidation Price"). The Treasury Note 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 August 25, 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. (the "Underwriter") pursuant to an Underwriting Agreement, dated
August 25, 1997, between the Company and the Underwriter (the "Underwriting
Agreement"; the Trust Agreement and the Underwriting Agreement are collectively
referred to herein as the "Agreements"). Capitalized terms used but not defined
herein shall have the meanings set forth in the Agreements. This opinion letter
is rendered pursuant to Section 6(e) of the Underwriting Agreement.
In arriving at the opinion expressed below, we have examined and relied on
the following documents:
(a) executed copies of the Agreements;
(b) the Certificate of Incorporation and By-Laws of the Company;
(c) good standing certificate from the Secretary of State of the
State of Delaware concerning the Company;
(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;
A-2
<PAGE>
(h) the forms of the Certificates; and
(i) the documents delivered by the Company on the Closing Date
pursuant to the Agreements.
In addition, we have examined and relied, as to factual matters, on the
representations of the Company in the Agreements and on originals or copies
certified or otherwise identified to our satisfaction of all such corporate
records of the Company and such other instruments and other certificates of
public officials, officers and representatives of the Company and the Trustee,
and we have made such investigations of law, as we have deemed appropriate as a
basis for the opinion expressed below.
Based upon such examination and having regard for legal considerations
which we deem relevant, we are of the following opinion:
1. The Registration Statement has become effective under the Act,
and, to our knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and not withdrawn, and no
proceedings for that purpose have been instituted or threatened under
Section 8(d) of the Act.
2. The Registration Statement, as of the date it became effective,
and the Prospectus, as of the date of the Prospectus Supplement, other than
any financial or statistical information contained therein as to which we
express no opinion, complied as to form in all material respects with the
requirements of the Act and the applicable rules and regulations
thereunder.
3. To our knowledge, there are no material contracts, indentures, or
other documents of a character required to be described or referred to in
either the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement other than those described or
referred to therein or filed as exhibits thereto.
4. The Certificates, when validly authorized, duly executed,
authenticated, issued and delivered in accordance with the Trust Agreement,
will be entitled to the benefits of the Trust Agreement.
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.
A-3
<PAGE>
6. The Trust created by the Trust Agreement is not required to be
registered under the Investment Company Act of 1940, as amended.
7. The Company is duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware and
has the requisite power and authority, corporate or other, to own its
properties and conduct its business, as presently conducted by it, and to
enter into and perform its obligations under the Agreements and the
Certificates.
8. The Certificates have been duly authorized by the Board of
Directors of the Company.
9. The Trust Agreement has been duly qualified under the Trust
Indenture Act of 1939, as amended.
10. Each of the Agreements has been duly authorized, executed and
delivered by the Company and, upon due authorization, execution and
delivery by the other parties thereto, each will constitute a valid, legal
and binding agreement of the Company, enforceable against the Company in
accordance with its terms subject to: (1) limitations imposed by
bankruptcy, insolvency, reorganization, arrangement, moratorium or other
laws relating to or affecting the enforcement of creditors' rights
generally; (2) general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law; and (3)
rights to indemnification which may be limited by applicable law or
equitable principles or otherwise unenforceable as against public policy.
In addition, we have participated in conferences with your representatives
concerning the Registration Statement and the Prospectus and have considered the
matters required to be stated therein and the statements contained therein,
although we have not independently verified the accuracy, completeness or
fairness of such statements (except as described in paragraph 5 above). Based
upon and subject to the foregoing, nothing has come to our attention to cause us
to believe that the Registration Statement (excluding any exhibits filed
therewith), as of the date it became effective, contained an untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectus, as of the date of the Prospectus 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
A-4
<PAGE>
information, factual matters, representations and warranties contained in the
records, documents, instruments and certificates we have reviewed; and (d)
except as specifically covered in the opinions set forth above, the due
authorization, execution and delivery on behalf of the respective parties
thereto of documents referred to herein and the legal, valid and binding effect
thereof on such parties.
Whenever a statement herein is qualified by the phrase "to our knowledge,"
it is intended to indicate that, during the course of our representation of the
Company, no information that would give us current actual knowledge of the
inaccuracy of such statement has come to the attention of those attorneys
currently in this firm who have rendered legal services in connection with this
opinion letter. However, we have not undertaken any independent investigation to
determine the accuracy of any such statement, and any limited inquiry undertaken
by us during the preparation of this opinion letter should not be regarded as
such an investigation; no inference as to our knowledge of any matters bearing
on the accuracy of any such statement should be drawn from the fact of our
representation of the Company.
With respect to our opinion set forth in paragraph 2, in passing on the
form of Registration Statement and the Prospectus, we have necessarily assumed
the correctness and completeness of the statements made therein.
This opinion letter is solely for your benefit and may not be relied upon
or used by, circulated, quoted or referred to, nor may copies hereof be
delivered to, any other person without our prior written approval. We disclaim
any obligation to update this opinion letter for events occurring or coming to
our attention after the date hereof.
Respectfully submitted,
CHAPMAN AND CUTLER
A-5
<PAGE>
EXHIBIT B
[CHAPMAN AND CUTLER LETTERHEAD]
[Date]
Southpoint Structured Assets, Inc.
50 North Front Street
Memphis, Tennessee 38103
Morgan Keegan & Company, Inc.
Morgan Keegan Tower
50 North Front Street
Memphis, Tennessee 38103
Banque Paribas
787 Seventh Avenue, 31st Floor
New York, New York 10019
Standard & Poor's Ratings Services
25 Broadway, 21st Floor
New York, New York 10004
Re: Southpoint Structured Assets, Inc.
Treasury 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 Treasury 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 August 29, 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 Treasury 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 United States Treasury Note
having an aggregate principal amount of $10,000,000, a coupon of 6.25% and a
maturity of February 15, 2003 (the "Treasury Note" or the "Underlying
Security"). The Treasury Note will be deposited into the Trust subject to the
right of the holder of the Call Warrant to purchase the Treasury Note on any
date on or
<PAGE>
after February 28, 1998 (an "Early Termination Date") at a price of par plus
accrued interest to such Early Termination Date (the "Liquidation Price"). The
Trustee will hold legal title to the Underlying Security and other assets of the
Trust for the benefit of the Certificateholders, but will have no power to
reinvest proceeds attributable to the Underlying 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. (the "Underwriter") pursuant to an Underwriting Agreement, dated
August 25, 1997, between the Company and the Underwriter (the "Underwriting
Agreement"; the Trust Agreement and the Underwriting Agreement are collectively
referred to herein as the "Agreements"). Capitalized terms used but not defined
herein shall have the meanings set forth in the Agreements. This opinion letter
is rendered pursuant to Section 6(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 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
B-2
<PAGE>
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 created 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.
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
B-3
<PAGE>
EXHIBIT C
[COUNSEL TO TRUSTEE LETTERHEAD]
[Date]
Southpoint Structured Assets, Inc.
50 North Front Street
Memphis, Tennessee 38103
Bank One, West Virginia, N.A.
707 Virginia Street East
Charleston, West Virginia 25301
Morgan Keegan & Company, Inc.
Morgan Keegan Tower
50 North Front Street
Memphis, Tennessee 38103
Ladies and Gentlemen:
We have acted as special counsel to Bank One, West Virginia, N.A. in its
capacity as trustee (the "Trustee") in connection with the issuance and sale by
the Company of Treasury Security-Backed Certificates, Series 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 August
29, 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 as a under the laws of the United
States of America, with full corporate and trust power and authority to
conduct its business and affairs as a Trustee.
2. The Trustee has full corporate power and authority to execute and
deliver the Trust Agreement and the Certificates and to perform its
obligations thereunder.
3. The Trustee has duly accepted the office of trustee under the
Trust Agreement.
<PAGE>
4. The Trustee has duly authorized, executed, issued and delivered
the Trust Agreement and has duly and validly authorized, executed, issued,
delivered and authenticated the Certificates as the Trustee.
5. The Trust Agreement constitutes the legal, valid and binding
agreements of the Trustee, enforceable against the Trustee in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws affecting the rights
of creditors generally and by general principles of equity and the
discretion of the court, regardless of whether such enforcement is
considered in a proceeding in equity or at law, and except as
enforceability may be determined according to or limited by the laws of
jurisdictions other than those specified below.
In rendering the foregoing opinion, we have assumed that the Trust
Agreement have been duly authorized, executed and delivered by the other parties
thereto and are valid, legal, binding and enforceable obligations of such
parties.
We express no opinion as to any matter other than as expressly set forth
above, and, in conjunction therewith, we specifically express no opinion as to
the status of the Certificates or the Trust Fund under any federal or state
securities laws, including, but not limited to, the Securities Act of 1933, as
amended, the Trust Indenture Act of 1939, as amended, and the Investment Company
Act of 1940, as amended.
This opinion is as of the date hereof and we undertake no, and disclaim
any, obligation to advise you of any change in any matter set forth herein. This
opinion has been furnished to you at your request in connection with the
transactions described herein, and it may not be relied upon by you for any
other purpose or by any other person without our prior written consent.
We are admitted to practice law under the laws of the State of West
Virginia and the opinion set forth above is limited to the laws of the State of
West Virginia and the laws of the United States of America.
Very truly yours,
[COUNSEL TO THE TRUSTEE]
C-2
<PAGE>
EXHIBIT D
[COUNSEL TO THE UNDERWRITER LETTERHEAD]
[Date]
Morgan Keegan & Company, Inc.
Morgan Keegan Tower
50 North Front Street
Memphis, Tennessee 38103
Re: Southpoint Structured Assets, Inc.
Treasury Security-Backed Certificates, Series 1997-1
----------------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to Morgan Keegan & Company, Inc. (the
"Underwriter") in connection with the sale by Southpoint Structured Assets,
Inc., a Delaware corporation (the "Company"), and the purchase by the
Underwriter pursuant to an underwriting agreement dated August 25, 1997 (the
"Underwriting Agreement") of certificates entitled Treasury 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 August 29, 1997 (the "Trust
Agreement") between the Company and Bank One, West Virginia as trustee (the
"Trustee"). The Certificates will be issued by the Treasury 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 United States Treasury Note
having an aggregate principal amount of $10,000,000, a coupon of 6.25% and a
maturity of February 15, 2003 (the "Treasury Note"). The Treasury Note will be
deposited by the Company into the Trust subject to the right of the holder of
the Call Warrant to purchase the Treasury Note on any date on or after February
28, 1998 (an "Early Termination Date") at a price of par plus accrued interest
to such Early Termination Date (the "Liquidation Price"). The Treasury Note 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.
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
<PAGE>
"Registration Statement"), and were offered by the prospectus dated November 15,
1996, as supplemented by the prospectus supplement dated August 25, 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").
11. The final form of a supplement dated August 25, 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.")
D-2
<PAGE>
Based upon the foregoing, we are of the opinion that:
(a) The Registration Statement has become effective under the
Securities Act of 1933, as amended (the "Act"), and, to the best of our
knowledge and information, no proceedings for a stop order have been
instituted or are threatened under Section 8(d) of the Act.
(b) The Registration Statement as of its effective date and the
Prospectus as of the date of the Prospectus Supplement, other than the
numerical, financial and statistical data contained therein, as to which we
express no opinion, comply as to form in all material respects with the
requirements of the Act and the rules thereunder.
(c) The Underwriting Agreement has been duly and validly authorized,
executed and delivered by the Company.
(d) The Trust Agreement has been duly and validly authorized,
executed and delivered by the Company and, assuming that it has been duly
and validly authorized, executed and delivered by the other parties
thereto, constitutes a valid, legal and binding agreement of the Company,
enforceable against the Company in accordance with its terms subject to
bankruptcy, insolvency, reorganization or other similar laws affecting
creditors' rights generally and, as to enforceability, to general
principles of equity, regardless of whether such enforcement is considered
in a proceeding in equity or at law.
(e) The Certificates, assuming that they have been duly and validly
authorized, executed and issued by the Trustee, will, when authenticated as
specified in the Trust Agreement and delivered to the Underwriter pursuant
to the Underwriting Agreement, be entitled to the benefits of the Trust
Agreement.
(f) Trust Fund is not required to be registered under the Investment
Company Act of 1940, as amended.
We have endeavored to see that the Registration Statement and the
Prospectus comply with the Act and the rules and regulations of the Securities
and Exchange Commission thereunder relating to registration statements on
Form S-3 and related prospectuses, but we cannot, of course, make any
representation to you as to the accuracy or completeness of statements of fact
contained in the Registration Statement or Prospectus. Nothing, however, has
come to our attention that would lead us to believe that the Registration
Statement at the time it became effective contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that the
Prospectus as of the date of the Prospectus Supplement and at the date hereof
contained or contains an untrue statement of a material fact or omitted or omits
to state a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading (other than the
numerical,
D-3
<PAGE>
financial and statistical data contained in the Registration Statement or the
Prospectus, as to which we express no opinion).
This opinion is for your benefit only and is not to be relied upon by any
other person.
Respectfully submitted,
CHAPMAN AND CUTLER
D-4
<PAGE>
EXHIBIT E
UNDERWRITER INFORMATION
The text set forth in the Prospectus Supplement under the heading "Plan of
Distribution" and in the second paragraph therein.
<PAGE>
EXHIBIT NO. 4.1
================================================================================
SERIES SUPPLEMENT
TREASURY SECURITY-BACKED TRUST, SERIES 1997-1
BETWEEN
SOUTHPOINT STRUCTURED ASSETS, INC.,
as Depositor
AND
BANK ONE, WEST VIRGINIA, N.A.,
as Trustee
TREASURY SECURITY-BACKED CERTIFICATES
Series 1997-1
DATED AS OF AUGUST 29, 1997
================================================================================
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<C> <S> <C>
SECTION 1. INCORPORATION OF STANDARD TERMS..................... 1
SECTION 2. DEFINITIONS......................................... 1
SECTION 3. DESIGNATION OF TRUSTS AND CERTIFICATES.............. 6
SECTION 4. CALL WARRANT........................................ 6
SECTION 5. [RESERVED].......................................... 6
SECTION 6. SATISFACTION OF CONDITIONS TO INITIAL EXECUTION AND
DELIVERY OF TRUST CERTIFICATES...................... 6
SECTION 7. DISTRIBUTIONS....................................... 7
SECTION 8. TRUSTEE'S FEES...................................... 7
SECTION 9. EARLY TERMINATION................................... 7
SECTION 10. EVENTS OF DEFAULT................................... 8
SECTION 11. ASSIGNMENT OF CALL WARRANT.......................... 8
SECTION 12. INFORMATION TO WARRANTHOLDER........................ 8
SECTION 13. MISCELLANEOUS....................................... 8
SECTION 14. NOTICES............................................. 9
SECTION 15. GOVERNING LAW....................................... 10
SECTION 16. COUNTERPARTS........................................ 10
SCHEDULE I UNDERLYING SECURITIES SCHEDULE
SCHEDULE II DESCRIPTION OF THE CALL WARRANT
EXHIBIT A STANDARD TERMS FOR TRUST AGREEMENTS
EXHIBIT B FORM OF CERTIFICATE
EXHIBIT C FORM OF ASSIGNMENT FOR CALL WARRANT
EXHIBIT D FORM OF TRANSFEREE LETTER FOR CALL WARRANT
</TABLE>
<PAGE>
TREASURY SECURITY-BACKED CERTIFICATES
SERIES SUPPLEMENT
SERIES 1997-1
SERIES SUPPLEMENT, Series 1997-1, dated as of August 29, 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 Treasury Note set forth on
Schedule I hereto into the Trust (subject to the Call Warrant);
WHEREAS, in connection with the creation of the Trust, and the deposit
therein of the Treasury Note, it is desired to provide for (i) the issuance of
the Certificates (the "Certificates") evidencing undivided interests in the
Trust, and (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 Treasury Note; 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 below for all purposes under this Series Supplement. (Section
2(b) below sets forth terms
<PAGE>
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 Treasury Note (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 Treasury Note on an
Early Termination Date pursuant to the Early Termination provisions of Section
9 hereof.
"Certificates" shall mean those certificates in substantially the form set
forth in Exhibit B hereto.
"Closing Date" shall mean August 29, 1997.
"Collection Period" shall mean, (i) with respect to each February 15
Distribution Date, the period beginning on the day after the August 15
Distribution Date of the previous year and ending on such February 15
Distribution Date, inclusive, except for the February 15, 1998 Distribution
Date, as to which the Collection Period shall be the period beginning on Closing
Date and ending on such February 15, 1998 Distribution Date, inclusive and, (ii)
with respect to each August 15 Distribution Date, the period beginning on the
day after the February 15 Distribution Date of that year and ending on such
August 15 Distribution Date, inclusive; provided, however, that clauses (i) and
(ii) shall be subject to Section 13(f) hereof.
"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 August 29, 1997.
"Depository" shall mean the Depository Trust Company.
"Distribution Date" shall mean the February 15 and August 15 of each year
(or if such date is not a Business Day, the next succeeding Business Day),
commencing on February 15, 1998 and ending on the earlier of the Final Scheduled
Distribution Date and the Early Termination Date.
"Early Termination" shall mean the payment in full of Certificates by the
Trust pursuant to Section 9 hereof.
"Early Termination Date" shall mean any day on or after February 28, 1998.
-2-
<PAGE>
"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.
"Final Scheduled Distribution Date" shall mean February 15, 2003.
"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.
"Liquidation Price" shall mean, with respect to any Underlying Security,
par plus accrued interest to the Early Termination Date.
"Ordinary Expenses" shall mean the compensation due the Trustee for
Ordinary Expenses (as defined in the Standard Terms), which shall be fixed and
prepaid by the Depositor.
"Pass-Through Rate" shall mean 6.25% per annum.
"Prepaid Ordinary Expenses" shall be $9,600 for this Series.
"Prospectus Supplement" shall mean the Prospectus Supplement, dated August
25, 1997, relating to the Certificates.
"Rating Agency" shall mean S&P.
"Rating Agency Condition" shall have the meaning specified in the Standard
Terms.
"Record Date" shall mean the day immediately preceding each Distribution
Date.
"Required Interest" shall have the meaning specified in the Standard Terms.
"Required Principal" shall have the meaning specified in the Standard
Terms; provided, however, that in the case of an Early Termination, Required
Principal shall be the Early Termination Price.
"Required Rating" shall mean "AAA", as assigned by S&P as of the Closing
Date.
-3-
<PAGE>
"S&P" shall mean Standard & Poor's Ratings Services, a subsidiary of The
McGraw-Hill Companies, Inc.
"Series" shall mean Series 1997-1.
"Treasury Note" shall mean the United States Treasury Note listed on the
Underlying Securities Schedule attached hereto as Schedule I.
"Trust Property" shall mean (i) the Underlying Security described on
Schedule I (exclusive of the Call Warrant) hereto; (ii) all payments on or
collections in respect of such Underlying Security accrued on or after the Cut-
off Date 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 United States of America.
"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 the Call Warrant.
(b) The terms listed below are not applicable to this Series.
"Accounting Date"
"Advance"
"Authorized Newspaper"
"Basic Documents"
"Call Premium Percentage"
"Class"
"Credit Support"
"Credit Support Instrument"
"Credit Support Provider"
"Discount Certificate"
-4-
<PAGE>
"Floating Pass-Through Rate"
"Floating Rate Certificate"
"Guaranteed Investment Contract"
"Interest Strip"
"Letter of Credit"
"Limited Guarantor"
"Limited Guaranty"
"Market Agent"
"Market Agent Agreement"
"Notional Amount"
"Required Premium"
"Requisite Reserve Amount"
"Reserve Account"
"Retained Interest"
"Sales Procedure"
"Sub-Administration Agreement"
"Sub-Administration Agent"
"Surety Bond"
"Swap Agreement"
"Swap Counterparty"
"Swap Distribution Amount"
"Swap Guarantee"
"Swap Guarantor"
-5-
<PAGE>
"Swap Receipt Amount"
"Swap Termination Payment"
Section 3. Designation of Trust and Certificates. (a) The Trust created
hereby shall be known as the "Treasury Security-Backed Trust, Series 1997-1" and
the Certificates evidencing certain undivided ownership interests therein shall
be known as "Treasury 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 the Trust created hereunder and thereunder shall constitute a fixed
investment trust for federal income tax purposes under Treasury Regulation
Section 301.7701-4 and a grantor trust under the 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. The
Underlying Security shall be held by the Trustee for the benefit of the
Warrantholder as well as the Certificateholders subject to such rights as the
Certificateholders may have prior to the exercise of the Call Warrant.
(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, 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. [Reserved].
-6-
<PAGE>
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, Required Interest and to the
Depositor, the Initial Accrued Interest; and
(ii) second, to the Certificateholders, Required Principal, if any.
(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, the Required Interest;
(ii) second, to the Certificateholders, Required Principal; and
(iii) third, to any creditors of the Trust in satisfaction of
liabilities thereto.
(c) Amounts recovered in respect of the Underlying Securities following a
default by the Underlying Securities Issuer shall, to the extent allocable to
interest, be distributed in accordance with the provisions of Section 7(a)(i),
and, to the extent allocable to principal, in accordance with the provisions of
Section 7(a)(ii).
Section 8. Trustee's Fees. (a) As compensation for its services hereunder,
the Trustee shall be entitled to Prepaid Ordinary Expenses. The Prepaid Ordinary
Expenses shall be paid to the Trustee by the Depositor on or prior to the
Closing Date; provided, however, in the event of an Early Termination of
Certificates, the Trustee shall negotiate in good faith with the Depositor the
reimbursement to the Depositor of any fees or charges previously paid to the
Trustee for the years after the year in which the Early Termination occurred.
(b) Extraordinary Trust Expenses shall not be paid out of the Trust
Property unless (i) such Extraordinary Trust Expenses relate to a time when the
Underlying Securities Issuer was in default of any payment obligation under the
Underlying Securities, or (ii) Certificateholders representing 100% of the
aggregate Voting Rights of the Certificates have voted to require the Trustee to
incur such Extraordinary Trust Expenses.
-7-
<PAGE>
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 Treasury Note by the holder of the Call Warrant.
(b) A Warrantholder may provide notice to the Trustee (a "Purchase
Request") no less than 35 days prior to the applicable Early Termination Date
that it will purchase the 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 Treasury Security. Upon
receiving such Liquidation Price, the Trustee will immediately deliver the
Underlying Security relating to such Call Warrant to the Warrantholder;
provided, however, that if the Warrantholder delivers the Liquidation Price
before the Early Termination Date, the Trustee shall not deliver the Underlying
Security until the Early Termination Date.
(d) Delivery of an Underlying Security by the related Trust to the
Warrantholder will only be made against payment by the Warrantholder in
immediately available funds. Such payment must occur no later than 10:00 a.m.
New York City Time on the Early Termination Date. In the event that the
Warrantholder fails to make such payment by such time (a "Purchase Default"),
the sale shall be voided and the Early Termination will be deemed not to be
effective with respect to such Early Termination Date. In the event of a
Purchase Default, the Certificates shall continue to remain outstanding and,
unless such Purchase Default was due to a failure in the federal wire system,
the Warrantholder's rights with respect to the Call Warrant shall be deemed
surrendered to the Depositor.
(e) The Trustee shall not consent to any amendment or modification of this
Agreement (including the Standard Terms) which would alter the timing or amount
of any payment of the Liquidation Price.
Section 10. Events of Default. Within 30 days of the occurrence of an
Event of Default, the Trustee will give notice to the Certificateholders and the
Warrantholder, transmitted by mail, of all such uncured or unwaived Events of
Default known to it.
Section 11. Assignment of Call Warrant. The Warrantholder may assign a
Call Warrant pursuant to an assignment substantially in the form of Exhibit C
hereto. Any such assignee may enforce the assigned Call Warrant 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 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 under the Securities Act of 1933, as
amended.
Section 12. Information to Warrantholder. The Trustee shall furnish to any
Warrantholder or any prospective purchasers thereof, upon request, the
information
-8-
<PAGE>
specified in, and meeting the requirements of Rule 144A(d)(4) of the Securities
Act of 1933, as amended.
Section 13. Miscellaneous. (a) The provisions of Section 3.04, 3.06 and
4.04 of the Standard Terms shall not apply to the Certificates.
(b) The provisions of Article VIII, Market Agent, of the Standard Terms
shall not apply to the Certificates.
(c) The Trustee shall forward reports to Certificateholders pursuant to
Section 4.03 of the Standard Terms to the New York Stock Exchange.
(d) The Certificateholders shall not be entitled to terminate the Trust or
cause the sale or other disposition of the Underlying Security, if and for so
long as a Call Warrant remains outstanding, without the consent of the
Warrantholder.
(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 August 25, 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).
-9-
<PAGE>
If to the Depositor, to:
Southpoint Structured Assets, Inc.
50 North Front Street
Memphis, Tennessee 38103
Attention: President
Telephone: (901) 524-4100
Facsimile: (901) 579-4430
If to the Trustee, to:
Bank One West Virginia, N.A.
707 Virginia Street East, 2nd Floor
Charleston, West Virginia 25301
Attention: Corporate Trust Department
Telephone: (304) 348-5667
Facsimile: (304) 348-7978
If to the Rating Agencies, to:
Standard & Poor's
25 Broadway
New York, New York 10004
Attention: Structured Finance Surveillance Group
Telephone: (212) 208-1191
Facsimile: (212) 208-0030
If to the New York Stock Exchange, to:
New York Stock Exchange, Inc.
20 Broad Street
New York, New York 10005
Attention: Michael Hyland
Telephone: (212) 656-5868
Facsimile: (212) 656-6919
Section 15. Governing Law. This Series Supplement and the transactions
described herein shall be governed by, and construed in accordance with, the
laws of the State of New York applicable to contracts made and performed within
the State of New York, without giving effect to the choice of laws provisions
thereof.
Section 16. Counterparts. This Series Supplement may be executed in any
number of counterparts, each of which shall be deemed to be an original, and all
such counterparts shall constitute but one and the same instrument.
-10-
<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 Treasury 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
Treasury Note: 6.25% Treasury Note due February 15, 2003, subject to the
Call Warrant
Principal Amount Deposited: $10,000,000
Original Issue Date: February 16, 1993
Maturity Date: February 15, 2003
Principal Payment Date: February 15, 2003
Interest Rate: 6.25%
Interest Payment Dates: February 15 and August 15
Initial Accrued Interest: $23,777.17
Redemption Dates: None
Redemption Prices: N/A
Form of Underlying Securities: Book-entry, maintained in the book-entry
system operated by the Federal Reserve Bank
<PAGE>
Schedule II
Description of the Series 1997-1 Call Warrant
The Call Warrant represents the right to purchase the Treasury Note 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>
Exhibit A
Standard Terms for Trust Agreements
(begins on next page)
<PAGE>
Exhibit B
Form of Certificate
R-1 $10,000,000
CUSIP NO. 844653 AB 1
Unless this Certificate is presented by an authorized representative of the
Depository Trust Company, a New York Corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), any transfer, pledge or other use hereof for value or
otherwise by or to any person is wrongful inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
This Certificate represents a fractional undivided interest in the Trust
and does not evidence an obligation of, or an interest in, and is not guaranteed
by the depositor or the Trustee or any of their respective affiliates. Neither
this Certificate or the trust assets are insured or guaranteed by any
governmental agency or any other person.
Southpoint Structured Assets, Inc.
Treasury Security-Backed Certificates
Series 1997-1,
$10,000,000 Certificate Principal Balance
6.25% Pass-Through Rate
evidencing a fractional undivided beneficial ownership interest in the
Trust, as defined below, the property of which consists principally of
$10,000,000 in aggregate principal amount of direct obligations of the United
States of America and all payments received thereon, deposited in trust by
Southpoint Structured Assets, Inc. (the "Depositor").
This certifies that Cede & Co. is the registered owner of Ten Million
Dollars non-assessable, fully-paid, fractional undivided interest in the
Treasury 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 August 29, 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 "Treasury 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); (ii)
all payments on or collections in respect of the Underlying Security accrued on
or after August 29, 1997 (the "Cut-off Date") together with any proceeds
thereof; and (iii) all funds from time to time deposited with the Trustee
relating to the Certificates and any investments thereof, together with any and
all income, proceeds and payments with respect thereto (the "Trust Property").
Subject to the terms and conditions of the Trust Agreement (including the
availability of funds for distributions) and until the obligation created by the
Trust Agreement shall have terminated with respect to the Certificates in
accordance therewith, distributions will be made on each Distribution Date, to
the Person in whose name this Certificate is registered on the applicable Record
Date, in an amount equal to such Certificateholder's fractional undivided
interest in the amount required to be distributed to the Holders of the
Certificates on such Distribution Date. The Record Date applicable to any
Distribution Date is the close of business on the day immediately preceding such
Distribution Date (whether or not a Business Day). If a payment with respect to
the Underlying Security is made to the Trustee after the date on which such
payment was due, then the Trustee will distribute any such amounts received on
the next occurring Business Day (a "Special Distribution Date").
Each Certificateholder, by its acceptance of a Certificate, covenants and
agrees that such Certificateholder will not at any time institute against the
Trust, or join in any institution against the Trust of, any bankruptcy
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Certificates or the Trust
Agreement.
Distributions made on this Certificate will be made as provided in the
Trust Agreement by the Trustee by wire transfer in immediately available funds,
or check mailed
B-1-2
<PAGE>
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 is made upon this Certificate. The Trust Agreement also permits
the amendment thereof, in certain limited circumstances, without the consent of
the Holders of any of the Certificates.
The Certificates are issuable in fully registered form only in minimum
original principal amounts of $1,000 and integral multiples of $1,000 in excess
thereof.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies of the Certificate Registrar maintained by
the Trustee at 707 Virginia Street East, 2nd Floor, Charleston, West Virginia
25301, duly endorsed by or accompanied by an assignment in the form below and by
such other documents as required by the Trust Agreement, and thereupon one or
more new Certificates of the same class in authorized denominations evidencing
the same principal
B-1-3
<PAGE>
amount will be issued to the designated transferee or transferees. The initial
Certificate Registrar appointed under the Trust Agreement is the Trustee.
No service charge will be made for any registration of transfer or
exchange, but the Trustee may require exchange of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
The Depositor and the Trustee and any agent of the Depositor or the Trustee
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trustee, nor any such
agent shall be affected by any notice to the contrary.
It is the intention of the parties to the Trust Agreement that the Trust
created thereunder shall constitute a fixed investment trust for federal income
tax purposes under Treasury Regulation Section 301.7701-4 and a grantor trust
under the Internal Revenue Code of 1986, as amended, and the Certificateholder
agrees to treat the Trust, any distributions therefrom and its beneficial
interest in the Certificates consistently with such characterization.
The Trust may not engage in any business or activities other than in
connection with, or relating to, the holding, protecting and preserving of the
Trust Property and the issuance of the Certificates, and other than those
required or authorized by the Trust Agreement or incidental and necessary to
accomplish such activities. The Trust may not issue or sell any certificates or
other obligations other than the Certificates or otherwise incur, assume or
guarantee any indebtedness for money borrowed.
The Trust and the obligations of the Depositor and the Trustee created by
the Trust Agreement with respect to the Certificates shall terminate upon the
earliest to occur of (i) the distribution in full of all amounts due to
Certificateholders and retirement of the Underlying Security, (ii) the
distribution in full of all amounts due to Certificateholders on any Early
Termination Date, and (iii) the expiration of 21 years from the death of the
last survivor of the descendants of Joseph P. Kennedy, the late Ambassador of
the United States to the Court of St. James, living on the date hereof.
An employee benefit plan subject to the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), including an individual retirement account or
Keogh plan (any such, a "Plan") may purchase Certificates if either (i) the
Underwriter is able to confirm the existence of at least 100 independent
purchasers or (ii) the Plan can represent that its purchase of the Certificates
would not be prohibited under ERISA or the Code.
B-1-4
<PAGE>
In Witness Whereof, the Trustee has caused this Certificate to be duly
executed as of the date set forth below.
Treasury Security-Backed Trust,
Series 1997-1
By: Bank One West Virginia, N.A., not in
its individual capacity but solely as
Trustee,
By_______________________________________
Authorized Officer
Dated: August 29, 1997
Trustee's Certificate of Authentication
This is one of the Certificates described in the Trust Agreement referred
to herein.
Bank One, West Virginia, N.A., not in its
individual capacity but solely as
Trustee,
By_______________________________________
Authorized Officer
B-1-5
<PAGE>
Assignment
For value received the undersigned hereby sells, assigns and transfers
unto
Please insert social security or other
identifying number of assignee
________________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
________________________________________________________________________________
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
_______________________________________________________________________ Attorney
to transfer said Certificate on the books of the Certificate Register, with full
power of substitution in the premises.
Dated:
_________________________________________
Signature Guaranteed:
_________________________________________
*Notice: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member of the New York Stock Exchange or a commercial bank or
trust company.
<PAGE>
Exhibit C
Form of Assignment of Call Warrant
_______________________________________ (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.
Executed this __ day of _______________________
[Assignor]
By ________________________________________
Name____________________________________
Title___________________________________
Acknowledged and agreed to:
[Assignee]
By_______________________________
Name __________________________
Title____________________________
Acknowledgement
The undersigned hereby acknowledges the assignment from the Assignor to the
Assignee of the Assignor's rights with respect to the assigned Call Warrant and
hereby agrees that the Assignee has all the rights of a Warrantholder (as
defined in the Series Supplement) described in the Series Supplement with
respect to such Call Warrant, 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
[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
Ladies and Gentlemen:
In connection with the proposed acquisition of the above-captioned Series
1997-1 Call Warrant by the undersigned pursuant to Section 11 of the Series
Supplement dated as of August 29, 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 Call Warrant 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 at our option, the undersigned
will obtain from any institutional investor that purchases the Call Warrant
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 NO. 8.1
[LETTERHEAD OF CHAPMAN AND CUTLER]
August 29, 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
Banque Paribas
c/o Paribas Corporation, as agent
787 Seventh Avenue, 31st Floor
New York, New York 10019
Standard & Poor's Ratings Services
25 Broadway, 21st Floor
New York, New York 10004
Re: Southpoint Structured Assets, Inc.
Treasury 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 Treasury 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 August 29, 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 Treasury 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 United States Treasury Note
having an aggregate principal amount of $10,000,000, a coupon of 6.25% and a
maturity of February 15, 2003 (the "Treasury Note" or the "Underlying
Security"). The Treasury Note will be deposited into the Trust subject to the
<PAGE>
right of the holder of the Call Warrant to purchase the Treasury Note on any
date on or after February 28, 1998 (an "Early Termination Date") at a price of
par plus accrued interest to such Early Termination Date (the "Liquidation
Price"). The Trustee will hold legal title to the Underlying Security and other
assets of the Trust for the benefit of the Certificateholders, but will have no
power to reinvest proceeds attributable to the Underlying 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. (the "Underwriter") pursuant to an Underwriting Agreement, dated
August 25, 1997, between the Company and the Underwriter (the "Underwriting
Agreement"; the Trust Agreement and the Underwriting Agreement are collectively
referred to herein as the "Agreements"). Capitalized terms used but not defined
herein shall have the meanings set forth in the Agreements. This opinion letter
is rendered pursuant to Section 6(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
2
<PAGE>
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 that each of the parties to the Trust Agreement has and will fully
comply with all of its obligations thereunder without amendment or waiver, we
are of the opinion that:
(i) subject to the qualifications referred to herein, for Federal
income tax purposes, the Trust created 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.
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
3
<PAGE>
CONSEQUENCES" and "LEGAL OPINIONS" in the Prospectus without admitting that we
are "experts" within the meaning of the Act, and the rules and regulations
thereunder, with respect to any part of the Registration Statement.
Respectfully submitted,
/s/ Chapman and Cutler
----------------------
CHAPMAN AND CUTLER
JDBerry/MJTrofa
4
