McCARTER & ENGLISH
ATTORNEYS AT LAW
FOUR GATEWAY CENTER
100 MULBERRY STREET
P.O. BOX 652
NEWARK, NJ 07101-0652
(201) 622-4444
TELECOPIER (201) 624-7070
CHERRY HILL, NJ BOCA RATON, FL
NEW YORK, NY WILMINGTON, DE
PHILADELPHIA, PA
November 3, 1997
VIA: EDGAR
Re: Registration Statement on Form S-3
for American Corporate Receipts,
Inc.
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549
Dear Ladies and Gentlemen:
Pursuant to Rule 415, we are hereby filing on behalf of American Corporate
Receipts, Inc. (the "Depositor") a Registration Statement on Form S-3
registering $60,000,000 in principal amount of Trust Receipts. Payment of the
applicable filing fee is being made simultaneously with transmission of this
Registration Statement.
The content of this Registration Statement and exhibits follows, with
certain minor exceptions, the Registration Statement of American Corporate
Accruals, Inc. (Registration No. 33-97952), which was declared effective by the
Securities and Exchange Commission on March 10, 1995. Rickel Securities, Inc.,
an affiliate of the Depositor hereunder, was formed by certain former principals
of Rickel & Associates, Inc., the underwriter named in the prior Registration
Statement, in a negotiated split-off transaction.
<PAGE>
Securities and Exchange Commission
November 3, 1997
Page 2
Please direct all communications concerning this Registration Statement
to the undersigned at the address appearing above.
Very truly yours,
/s/ David F. Broderick
----------------------
David F. Broderick
DFB:cmo
Enclosure
<PAGE>
As filed with the Securities and Exchange Commission on November 3, 1997
Registration No. 33-________________
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
======================
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
======================
AMERICAN CORPORATE RECEIPTS, INC.
----------------------
(Originator of the Trusts described herein)
(Exact name of registrant as specified in its Charter)
New Jersey 22-3545150
---------- ----------
(State or other (IRS employer
jurisdiction of identification
incorporation) Number)
c/o Rickel Securities, Inc.
45 Essex Street
Millburn, New Jersey 07041
201-379-0300
-------------------------------------
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
----------------
John C. Sabo, President
American Corporate Receipts, Inc.
c/o Rickel Securities, Inc.
45 Essex Street
Millburn, New Jersey 07041
201-379-0300
-------------------------------------
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
David F. Broderick, Esq.
McCarter & English
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement as determined by
market conditions.
If the only securities being registered on this Form are to be offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. [X]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===============================================================================================================================
<S> <C> <C> <C> <C>
Title of securities Amount to Proposed maximum Proposed maximum Amount of
Being registered be registered(1) Offering price per unit(2) aggregate offering price(2) registration fee
- -------------------------------------------------------------------------------------------------------------------------------
American Corporate Receipts $60,000,000 100% $60,000,000 $18,181.82
===============================================================================================================================
(1) Represents the face amount of Principal and/or Callable Principal Receipts to be Offered.
(2) Estimated solely for the purpose of calculating the registration fee.
</TABLE>
-------------------
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
PROSPECTUS
AMERICAN CORPORATE RECEIPTS
-----
American Corporate Receipts, Inc.
Depositor
-----
The American Corporate Receipts (the "Receipts") described herein may be
sold from time to time in one or more series, in amounts, at prices and on terms
to be determined at the time of sale and to be set forth in a supplement to this
Prospectus (each a "Prospectus Supplement"). Each series of Receipts will
include two classes of Receipts.
The Receipts of each series will be issued by a newly formed, limited
purpose trust to be formed with respect to such series (each, a "Trust"). The
property of each Trust will be limited to a portion of one discrete issue of
taxable debt securities (the "Bonds") issued by a corporation or other issuer
that is eligible to offer and sell securities pursuant to a registration
statement on Form S-3 promulgated under the Securities Act of 1933, and which
issuer has a class of equity securities registered under Section 12 of the
Securities Exchange Act of 1934 and is therefore subject to the informational
requirements of the Securities Exchange Act of 1934 and in accordance therewith
will be obligated to file reports and other information with the Securities and
Exchange Commission. The Bonds will have been previously publicly issued
pursuant to an offering registered under the Securities Act. The identity of and
material terms of the Bonds held by a particular Trust will be described in the
related Prospectus Supplement.
Each Trust will be formed pursuant to a Trust Agreement (the "Trust
Agreement") to be entered into between American Corporate Receipts, Inc. as
Depositor (the "Depositor") and the Trustee specified in the related Prospectus
Supplement (the "Trustee").
Each series of Receipts will represent fractional undivided interests in
all of the interest and principal payments on the Bonds in the related Trust.
Each class of Receipts of any series will represent the right to receive a
specified payment of principal and/or interest on the related Bonds in the
manner described herein and in the related Prospectus Supplement, to the extent
that such payment has been actually received by the Trustee. The amounts, rates
and dates of such payments will be set forth in the related Prospectus
Supplement, and will correspond to the payments on the related Bonds. In the
event of a payment default on the underlying Bonds which is not cured within ten
days, Receiptholders will obtain the right to proceed directly against the
issuer of the Bonds.
There will be no secondary market for the Receipts prior to the offering
thereof. While Rickel Securities, Inc., an affiliate of the Depositor, intends
to make a secondary market in the Receipts, it is not obligated to do so. There
can be no assurance that a secondary market for the Receipts will develop or, if
it does develop, that it will continue. The Receipts may or may not be listed on
a securities exchange. If the Receipts are listed on a securities exchange, the
name of such exchange will be disclosed in the related Prospectus Supplement.
-2-
<PAGE>
Receipts will be issued in book-entry form. Each class of Receipts
initially issued in book-entry form will be represented by a single physical
certificate registered in the name of Cede & Co., the nominee of The Depository
Trust Company ("DTC"). The interests of owners of such Receipts will be
represented by book entries on the records of DTC and participating members
thereof. Certificated Receipts will be available only under limited
circumstances.
----------
PROCEEDS OF THE BONDS HELD BY THE TRUST FOR ANY SERIES ARE THE SOLE
SOURCE OF PAYMENTS ON THE RECEIPTS FOR SUCH SERIES. THE RECEIPTS WILL NOT
REPRESENT AN INTEREST IN OR OBLIGATION OF, AND ARE NOT INSURED OR GUARANTEED BY,
THE DEPOSITOR OR RICKEL SECURITIES, INC., ANY OTHER TRUST OR ANY OF THEIR
RESPECTIVE AFFILIATES. THE RECEIPTS ARE DIFFERENT FROM, AND SHOULD NOT BE DEEMED
TO BE A SUBSTITUTE FOR, DIRECT OWNERSHIP OF THE BONDS.
----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
Receipts may be sold by the Depositor through agents designated from
time to time, through underwriting syndicates led by one or more managing
underwriters or through one or more underwriters acting alone, as more fully
described under "PLAN OF DISTRIBUTION" and in the related Prospectus Supplement.
If underwriters or agents are involved in the offering of the Receipts of any
series offered hereby, the name of the managing underwriter or underwriters or
agents will be set forth in the related Prospectus Supplement.
This Prospectus may not be used to consummate sales of securities
offered hereby unless accompanied by a Prospectus Supplement.
The date of this Prospectus is __________, 1997.
-3-
<PAGE>
AVAILABLE INFORMATION
American Corporate Receipts, Inc., as depositor of each Trust, has filed
with the Securities and Exchange Commission (the "Commission") a Registration
Statement on Form S-3 (together with all amendments and exhibits thereto,
referred to herein as the "Registration Statement") under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the Receipts offered
pursuant to this Prospectus. This Prospectus, which forms a part of the
Registration Statement, omits certain information contained in such Registration
Statement pursuant to the rules and regulations of the Commission. For further
information, reference is made to the Registration Statement which may be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's regional offices at 500 West Madison Street, 14th Floor, Chicago,
Illinois 60661 and 75 Park Place, New York, New York 10007, or at the
Commission's Web site, http://www.sec.gov. Copies of the Registration Statement
may be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates.
REPORTS TO RECEIPTHOLDERS
Quarterly and annual unaudited reports containing information concerning
the related Bonds, including an annual independent accountant's statement of
review regarding the payment of all income on the Bonds to the holders of
Receipts ("Receiptholders" or "Holders"), will be prepared by the related
Trustee and sent on behalf of each Trust only to Cede & Co. ("Cede"), as nominee
of DTC and registered holder of the Receipts. See "CERTAIN INFORMATION REGARDING
THE RECEIPTS -- Book-Entry Registration" and "--Reports to Receiptholders". Such
reports will not constitute financial statements prepared in accordance with
generally accepted accounting principles. Each Trust will file with the
Commission such other reports as may required under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and the rules and regulations of the
Commission thereunder.
PROSPECTUS SUMMARY
This Prospectus Summary is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus and by reference to
the information with respect to the Receipts contained in the related Prospectus
Supplement to be prepared and delivered in connection with the offering of such
Receipts. Certain capitalized terms used in this Prospectus Summary are defined
elsewhere in this Prospectus and in the related Prospectus Supplement. A listing
of the pages on which some of such terms are defined is found in the "INDEX OF
TERMS".
Issuer.................... With respect to each series of Receipts, the
Trust to be formed by the Depositor and the
Trustee pursuant to the Trust Agreement.
Each Trust will be established for the primary
purpose of issuing Receipts of a single series
representing fractional ownership interests in
the Bonds to be described in the related
Prospectus Supplement for such series.
-4-
<PAGE>
The Bonds will be deposited into the Trust by the
Depositor in exchange for Receipts, the
aggregate face amount of which will correspond
exactly to the aggregate amount of principal and
interest payable on the Bonds from the date of
deposit to the date of maturity (or, in the case
of Callable Principal Receipts, the first date
upon which the Bonds are redeemable).
Depositor................. American Corporate Receipts, Inc.
Trustee.................... The Trustee specified in the related Prospectus
Supplement.
The Receipts............... Each series of Receipts will include two classes
of Receipts issued pursuant to a Trust Agreement
between the Depositor and the Trustee: (i) Coupon
Receipts, which represen the right to receive a
single payment of interest on the Bonds, and
(either (x) Principal Receipts, which represent
the right to receive a single payment of
principal on the Bonds upon maturity, or (y) in
any case where the Bonds are subject to early
redemption, Callable Principal Receipts, which
represent the right to receive all interest
payments from the first date upon which the Bonds
are redeemable and principal upon redemption or
maturity, plus any redemption premium. The
Receipts will be available initially only in book
-entry form. Receiptholders will be able to
receive Certificated Receipts only in the limited
circumstance described herein. See "CERTAIN
INFORMATION REGARDING THE RECEIPTS--Certificated
Receipts."
The Bonds ................... The property of each Trust will be limited to
taxable debt securities (the "Bonds") acquired by
the Depositor from Rickel Securities, Inc., an
affiliate of the Depositor, in exchange for the
Receipts. The Bonds will be described in the
related Prospectus Supplement and will have been
issued by a corporation or other issuer eligible
to offer and sell securities registered on a
registration statement on Form S-3 promulgated
under the Securities Act, and which also has a
class of equity securities registered under
Section 1 of the Exchange Act and therefore
-5-
<PAGE>
is subject to the periodic reporting requirements
of the Exchange Act.Each of the Bonds will have
been previously publicly issued in an offering
registered pursuant to the Securities Act. Rickel
Securities, Inc. will have previously purchased,
or will contemporaneously purchase the Bonds in
the secondary market.Rickel Securities, Inc. will
not purchase the Bonds from the issuer thereof or
any of its affiliates, and the Bonds will not be
purchased by Rickel Securities, Inc. as a part of
the initial distribution thereof. After the date
of issuance by each Trust of the related Receipts
(the "Issuance Date"), such Trust will not
purchase or otherwise acquire any additional
securities and will not dispose of or create any
lien on its assets, other than upon termination
of such Trust.
Payments..................... Subject to timely receipt of payments on the
Bonds, payments in respect of each class of any
series of Receipts will be paid or distributed at
such times and in such manner as described in the
related Prospectus Supplement.
Certain Federal Income Tax
Considerations............. Receipts will constitute "stripped coupons" or
"stripped bonds" for purposes of Section 1286 of
the Internal Revenue Code of 1986, as amended
(the "Code"). As such, the Receipts will be
treated as if issued with original issue
discount. Consequently, purchasers of Receipts
should understand that if they are subject to
income taxation, it is likely that they will
be allocated taxable income with respect to their
Receipts each year prior to maturity of the
Receipts although they will not receive any cash
distributions with respect to the Receipts they
hold prior to Maturity. In any such event, a
Holder would have to use other cash resources to
pay the tax on the taxable income allocated as a
result of his, her or its ownership of the
Receipts. Upon the issuance of each series of
Receipts, McCarter & English, special tax counsel
to the Depositor, will deliver an opinion with
respect to certain federal income tax
consequences. See "CERTAIN FEDERAL INCOME TAX
MATTERS" herein for additional information
-6-
<PAGE>
concerning the application of federal, state,
local and other laws.
ERISA Considerations........ Under a regulation issued by the Department of
Labor, the Trust assets represented by a series
of Receipts will not be deemed "plan assets" of
an employee benefit plan holding the
Receipts if certain conditions are met, including
that such class of Receipts must be held, upon
completion of the initial public offering of
the Receipts, by at least 100 investors who are
independent of the Depositor and of one another.
For certain series of Receipts the Depositor
expects that (i) one or more classes of Receipts
of each series will be held by at least 100
independent investors at the conclusion of the
initial public offering thereof (although no
assurance can be given, and no monitoring or
other measures will be taken to ensure, that such
condition will be met), and (ii) the other
conditions of the regulation will be met. If the
Trust assets represented by a series of Receipts
were deemed to be "plan assets" of an employee
benefit plan investor (e.g. if the 100
independent investor criterion is not satisfied),
violation of the "prohibited transaction" rules
of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), could result
and generate excise tax and other liabilities
under ERISA and Section 4975 of the Code,
unless a statutory, regulatory or administrative
exemption is available. It is uncertain whether
existing exemptions from the "prohibited
transaction" rules of ERISA would apply to all
transactions involving the Trust assets
represented by the related Receipts. Accordingly,
fiduciaries considering a purchase of the
Receipts on behalf of employee benefit plans
should consult their counsel before making the
purchase. See "ERISA CONSIDERATIONS" herein.
THE TRUSTS
GENERAL
With respect to each series of Receipts, the Depositor will establish a
Trust by depositing the Bonds in the Trust without recourse. After the Issuance
Date with respect to each Trust, such Trust
-7-
<PAGE>
will not purchase or otherwise acquire any additional securities and will not
dispose of or create any lien on its assets, other than upon termination of
the Trust, and will not issue any additional Receipts or other securities. The
Receipts of each series will evidence fractional ownership interests in the
related Bonds.
THE TRUSTEE
The Trustee for each Trust and the principal offices of the Trustee will
be as specified in the related Prospectus Supplement. The Trustee's liability in
connection with the issuance and sale of the Receipts is limited solely to the
express obligations of such Trustee set forth in the related Trust Agreement. A
Trustee may resign at any time, in which event the Depositor will be obligated
to appoint a successor trustee. Any resignation or removal of a Trustee and
appointment of a successor trustee will not become effective until acceptance of
the appointment by the successor trustee.
THE BONDS
GENERAL
The Bonds to be purchased by each Trust will be taxable debt securities
issued by a corporation or other entity (each such entity, an "Obligor")
eligible to offer and sell securities registered on a registration statement on
Form S-3 promulgated under the Securities Act, and which also has a class of
equity security registered under Section 12 of the Exchange Act and therefore is
subject to the periodic reporting requirements of the Exchange Act. Each of the
Bonds will have been previously publicly issued in an offering registered
pursuant to the Securities Act. The Bonds will have been acquired by the
Depositor from Rickel Securities, Inc. in exchange for the Receipts. Rickel
Securities, Inc. will have previously purchased the Bonds in the secondary
market. Rickel Securities, Inc. will not have purchased the Bonds from the
issuer thereof or any of its affiliates, and the Bonds will not have been
purchased by Rickel Securities, Inc. as part of the initial distribution
thereof. The specific terms and conditions of the Bonds to be purchased by each
Trust will be set forth in the related Prospectus Supplement.
THE OBLIGORS
In order to be eligible to offer and sell securities registered on a
registration statement on Form S-3, and thus fulfill that portion of the
criteria for Bond Obligors set forth above, an Obligor must:
1. Be incorporated or otherwise organized under the laws of the United
States or any State or territory or the District of Columbia and have its
principal business operations in the United States or its territories;
2. Have a class of securities registered under the Exchange Act and be
required to file reports pursuant to that Act;
-8-
<PAGE>
3. Have been subject to the periodic reporting requirements of the
Exchange Act for a period of at least 12 calendar months, and have filed
in a timely manner all reports required to be filed during the 12
calendar months and any portion of a month preceding the relevant date;
and
4. Have at least $75,000,000 in aggregate market value of voting stock
held by non-affiliates of the Obligor.
The Depositor will base its determination of whether a specific Obligor
meets this criteria on the basis of available public information. See "AVAILABLE
INFORMATION REGARDING THE OBLIGORS -- Public Information." The Depositor will
not confirm any such determination with the Obligor. In making such
determination, the Depositor will necessarily assume that all of the information
which an Obligor has filed with the Commission is true, accurate and complete.
AVAILABLE INFORMATION REGARDING THE OBLIGORS
PUBLIC INFORMATION
The Obligors will be corporations or other entities that are subject to
the informational requirements of the Exchange Act and in accordance therewith
file reports and other information with the Commission. Such reports, proxy and
information statements and other information filed by the Obligors with the
Commission can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the Commission's regional offices at 500 West Madison Street, 14th Floor,
Chicago, Illinois 60661 and 75 Park Place, New York, New York 10007, or at the
Commission's Web site, http://www.sec.gov. Copies of such material can be
obtained from the Public Reference Section of the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. If the Bonds are listed on the New
York Stock Exchange, the material described above and other information will
also be available for inspection at the offices of the New York Stock Exchange
at 20 Broad Street, New York, New York. If the Bonds are listed on the American
Stock Exchange, the material described above and other information will also be
available for inspection at the offices of the American Stock Exchange at 86
Trinity Place, New York, New York.
POSSIBLE UNAVAILABILITY OF PUBLIC INFORMATION AND RESULTING TRANSFER
RESTRICTIONS
An Obligor whose common stock (or similar equity security) ceases to be
held of record by 300 or more holders, which has no class of security listed on
a national securities exchange, and which has no class of debt security held of
record by 300 or more holders, could elect to suspend its Exchange Act reporting
requirements. Such suspension could occur at any time after the deposit of its
Bonds in a Trust. In such event, the public information referred to in the
preceding paragraph would no longer be available. If such reports are not
available to the Trust, the Receipts of such series will, by their terms,
generally be required to be removed from the DTC book entry system, and
definitive physical certificates representing the Receipts of such series will
be issued to the
-9-
<PAGE>
Holders of the Receipts of such series. Such actions could hinder a Holder's
ability to transfer his Receipts.
In the event an Obligor suspends its Exchange Act reporting and the
Receipts are removed from the DTC book entry system, the Depositor will notify
the Obligor that the Bonds are held pursuant to the Trust Agreement and that the
holders of the Receipts constitute record holders of the Bonds. The issuance of
such definitive physical certificates representing the Receipts may increase the
likelihood that there will then be more than 300 holders of record of the Bonds,
requiring the Obligor to resume filing Exchange Act reports, in light of Rule
12g5-1(b)(1) under the Exchange Act, which appears to require an obligor with
actual knowledge that its bonds are held pursuant to a Trust Agreement to treat
holders of record of certificates or other evidences of interest issued by the
Trust as holders of record of the underlying Bonds. However, no assurances can
be given that this procedure will result in the Obligor resuming its Exchange
Act filings, due to, among other reasons, the fact that to the Depositor's
knowledge, no court of competent jurisdiction has interpreted and enforced Rule
12g5-1(b)(1) in the circumstances described above. In addition, the Depositor is
unable to predict whether, even if the holders of Receipts are treated as
holders of the Bonds, the issuance of definitive physical certificates will
cause there to be more than 300 holders of record of the Bonds.
BONDHOLDER COMMUNICATIONS
Upon the receipt by the Trust of any Bondholder communications from an
Obligor, the Trustee, on behalf of the Trust, will transmit such communications
to the beneficial owners of the Receipts upon receipt from the Obligor of
assurances that the Trustee's reasonable expenses will be reimbursed by the
Obligor. In addition, upon receipt by the Trust of Bondholder communications
from a third party (other than the Obligor), the Trustee, on behalf of the
Trust, will transmit such Bondholder communications to the beneficial owners of
the Receipts upon receipt from such third party of assurances that the Trustee's
reasonable expenses will be reimbursed by such third party. In either case, if
the Trustee does not receive such assurances, then the Trustee, at the sole
discretion of the Depositor and at the expense of the Depositor and/or the
Trust, will transmit or cause to be transmitted any such Bondholder
communications to such beneficial owners.
USE OF PROCEEDS
There will be no cash proceeds received by the Depositor or the Trust
from the sale of the Receipts. The issuance of each series of Receipts will
involve the following steps, some or all of which may take place simultaneously:
- Rickel Securities, Inc. will purchase the Bonds in the secondary
market for cash at the price(s) prevailing in the market.
- The Trust will issue the Receipts to the Depositor. The aggregate face
amount of Receipts will correspond exactly to the aggregate amount of principal
and interest payable on the Bonds from
-10-
<PAGE>
the date of deposit to the date of maturity (or, in the case of Callable
Principal Receipts, the first date upon which the Bonds are redeemable).
- The Depositor will retransfer the Receipts to Rickel Securities, Inc.
in exchange for the Bonds.
- The Depositor will retransfer the Bonds to the Trust in consideration
for the Trust's issuance of the Receipts to the Depositor.
- Rickel Securities, Inc., acting as the Underwriter, will commence the
offering of the Receipts.
The Receipts will be offered from time to time through the Underwriter
in negotiated transactions, at various prices to be determined at the time of
sale. Any spread between the price at which the Receipts are sold and the
purchase price of the Bonds (less costs and expenses) will represent
underwriting compensation to Rickel Securities, Inc. Depending on the timing of
the various steps outlined above, Rickel Securities, Inc. may utilize a portion
of the net proceeds of the sale of the Receipts to finance or refinance the
purchase of the underlying Bonds.
The aggregate face amount of any series of Receipts will correspond
exactly to the aggregate amount of principal and interest payable on the
underlying Bonds from the date of deposit to the date of maturity (or, in the
case of Callable Principal Receipts, the first date upon which the Bonds are
redeemable). Therefore, the aggregate face amount of any particular series of
Receipts will not necessarily bear a direct relationship to the fair market
value of the underlying Bonds on the date that the Receipts are issued.
THE DEPOSITOR
The Depositor, a wholly owned subsidiary of Rickel Securities, Inc., was
incorporated in the State of New Jersey in October, 1997. The Depositor was
organized for the limited purpose of acquiring Bonds from Rickel Securities,
Inc., forming Trusts, transferring Bonds to the Trusts, and engaging in related
activities. The principal executive offices of the Depositor are located at 45
Essex Street, Millburn, New Jersey 07041, and its phone number is 201-379-0300.
THE RECEIPTS
GENERAL
With respect to each Trust, the Receipts will be issued pursuant to the
terms of a Trust Agreement, a form of which has been filed as an exhibit to the
Registration Statement of which this Prospectus forms a part. The following
summary does not purport to be complete and is subject to, and qualified in its
entirety by reference to, all of the provisions of the Receipts and the Trust
Agreement. Where particular provisions or terms used in the Trust Agreement are
referred to, the
-11-
<PAGE>
actual provisions (including definitions of terms) are incorporated by reference
as part of this summary.
Each class of a series of Receipts issued in book-entry form will
initially be represented by a single Receipt registered in the name of DTC. The
Depositor has been informed by DTC that DTC's nominee will be Cede. Accordingly,
Cede is expected to be the holder of record of the Receipts issued in book-entry
form. Unless and until Certificated Receipts are issued under the limited
circumstances described herein, no Receiptholder will be entitled to receive a
physical certificate representing a Receipt. All references herein to actions by
Receiptholders refer to actions taken by DTC upon instructions from the
Participants and all references herein to distributions, notices, reports and
statements to Receiptholders refer to distributions, notices, reports and
statements to DTC or Cede, as the registered holder of the Receipts, as the case
may be, for distribution to beneficial owners in accordance with DTC's
procedures with respect thereto. See "CERTAIN INFORMATION RRGARDING THE RECEIPTS
- -- Book Entry Registration" and "-- Certificated Receipts."
DISTRIBUTIONS OF INTEREST AND PRINCIPAL AMOUNT
There will not be any periodic interest payments on Coupon Receipts or
Principal Receipts. Each of such Receipts represents the right to receive a
single payment at its maturity.
With respect to Coupon Receipts, on and after the date of the interest
payment evidenced thereby, if the Obligor shall have paid in full and the
Trustee shall have confirmed receipt of the interest due on such interest
payment date on the underlying Bonds, the Trustee shall, upon surrender of such
Coupon Receipts at the office of the Trustee specified in the related Prospectus
Supplement, pay to the Holder thereof in lawful money of the United States of
America, if the Holder is DTC or its nominee, by wire transfer of immediately
available funds, and if the Holder is any other person, by check for New York
Clearing House funds in accordance with such regulations as the Trustee may
reasonably establish consistent with the provisions of the Trust Agreement, the
entire amount of such interest payment evidenced thereby, less any taxes or
governmental charges required to be withheld from such payment by the Trustee.
With respect to any Principal Receipts, if the Obligor shall have paid
in full and the Trustee shall have confirmed receipt of the amount of such
principal upon maturity of the underlying Bonds, the Trustee shall, upon
surrender of such Principal Receipts at the office of the Trustee specified in
the related Prospectus Supplement, pay to the Holder thereof in lawful money of
the United States of America, if the Holder is DTC or its nominee, by wire
transfer of immediately available funds, and if the Holder is any other person,
by check for New York Clearing House funds in accordance with such regulations
as the Trustee may reasonably establish consistent with the provisions of the
Trust Agreement, the entire amount of such principal evidenced thereby, less any
taxes or governmental charges required to be withheld from such payment by the
Trustee.
With respect to any Callable Principal Receipts: (i) on or after each
interest payment date, if the Obligor shall have paid in full and the Trustee
shall have confirmed receipt of the interest due on such interest payment date
on the underlying Bonds, the Trustee shall pay to the Holder of record on
-12-
<PAGE>
the applicable record date in lawful money of the United States of America, if
the Holder is DTC or its nominee, by wire transfer of immediately available
funds, and if the Holder is any other person, by check for New York Clearing
House funds in accordance with such regulations as the Trustee may reasonably
establish consistent with the provisions of the Trust Agreement, the entire
amount of such interest, less any taxes or governmental charges required to be
withheld for such payment by the Trustee, and (ii) if the Obligor shall have
paid and the Trustee shall have confirmed receipt of all or any part of the
principal amount of and redemption premium, if any, due upon stated maturity or
upon earlier redemption of the underlying Bonds, the Trustee shall, upon
surrender of such Callable Principal Receipts at the office of the Trustee
specified therein, pay to the Holder thereof, in lawful money of the United
States of America, if the Holder is DTC or its nominee, by wire transfer of
immediately available funds, and if the Holder is any other person, by check for
New York Clearing House funds in accordance with such regulations as the Trustee
may reasonably establish consistent with the provisions of the Trust Agreement,
the entire amount of such principal and premium, if any, evidenced thereby, or
in the case of a partial redemption, the amount of such principal so redeemed
(and any redemption premium); in each case less any taxes or governmental
charges required to be withheld from such payment by the Trustee.
The Trust Agreement provides that all moneys received from Obligors by
the Trustee which represent payments of interest, principal or redemption
premium on the underlying Bonds shall be held by the Trustee without interest in
a special account until required to be disbursed. Therefore, to the extent that
the Trustee holds in trust any payments of interest or principal for any period
prior to disbursement of the same to the Receiptholders, these amounts will not
be invested, and there will be no income generated. However, because the payment
dates of the Receipts will correspond to the payment dates of the underlying
Bonds, and because the Trustee is under a duty to transfer payments received on
the Bonds to the Receiptholders following receipt (including, in the case of
Callable Principal Receipts, following the receipt of redemption proceeds prior
to the maturity date of the Bonds), it is anticipated that any such payments
will be held by the Trustee for only that period of time as may be necessary to
arrange re-transfer to the Receiptholders. To the extent DTC is the only
Receiptholder of record, as is presently contemplated, DTC will follow its own
internal procedures in crediting the accounts of its Participants following the
receipt of any such payments.
REDEMPTION OF CALLABLE PRINCIPAL RECEIPTS
Any class of Callable Principal Receipts of any series is subject to
redemption on the optional redemption dates and any mandatory redemption dates,
if applicable, of the related Bonds as set forth in the related Prospectus
Supplement. The Bonds related to each series of Callable Principal Receipts will
be subject to redemption prior to maturity on and after the dates and at the
redemption prices set forth in the Prospectus Supplement relating to such
series.
If the Bonds underlying any series of Callable Principal Receipts are
redeemed in whole or in part, the Trustee shall redeem a principal amount of
Callable Principal Receipts of such series equal to the principal amount of the
Bonds held in trust so redeemed. Upon redemption of any Callable Principal
Receipts, the Holder will have no right to receive payments of any interest
maturing after the redemption date thereof.
-13-
<PAGE>
In the event of a partial redemption of the Bonds underlying any series
of Callable Principal Receipts, the particular Callable Principal Receipts to be
redeemed shall be selected by the Trustee from the outstanding Callable
Principal Receipts of such series by lot or such other method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions (in amounts equal to the minimum authorized denomination
of such series and integral multiples thereof) of the principal amount
represented by such Callable Principal Receipts. To the extent practicable the
Trustee shall, in the case of partial redemption, redeem Callable Principal
Receipts so that no more than one Callable Principal Receipt is thereby rendered
other than in an authorized denomination.
Notice of redemption shall be given by the Trustee to each Holder of any
Callable Principal Receipts to be redeemed within thirty (30) days after notice
of redemption of the underlying Bonds has been given by the Obligor, trustee or
paying agent of or for the Bonds, as the case may be. All notices of redemption
shall state the redemption date, the amount payable on such date, the place at
which such Callable Principal Receipts are to be surrendered for payment, that
interest on amounts redeemed will cease to accrue and, if less than all of a
Holder's Callable Principal Receipt is to be redeemed, the principal amount of
such Callable Principal Receipt to be redeemed.
DEFAULT ON BONDS
If the Obligor defaults on the payment of any interest or principal
which is evidenced by the Receipts, the Trustee shall promptly give notice to
Holders thereof as provided in the Trust Agreement. Such notice shall set forth
(a) the identity of the issue of Bonds, (b) the date and nature of such default,
(c) the amount of the interest, principal or callable principal to which such
default relates, (d) the identifying numbers or the class of Receipts, or any
combination, evidencing the interest, Principal or Callable Principal (or
portions thereof) described above in clause "(c)", and (e) any other information
which the Trustee may deem appropriate.
Upon any default by the issuer of any Bond on the payment of any
Interest, Principal or Callable Principal which is evidenced by a Receipt, the
Trustee shall take all such steps as the Trustee, in its capacity as Trustee and
as the registered owner or nominal holder of the Bond to which the Receipt owned
by the Holder relates, shall deem necessary to protect the rights of the Holders
of Receipts. In order to protect such rights, the Trustee may, in its own name
and as trustee of an express trust, institute any action or proceedings at law
or in equity for the collection of the sums due and unpaid upon any Bond, and
may prosecute any such action or proceeding to judgment or final decree. In
addition, the Trustee shall be entitled and empowered, either in its own name or
as trustee of an express trust or as attorney-in-fact for the Holders of
Receipts or in any one or more of such capacities to file such proofs of claim,
claims, petitions, amendments thereto or any other document as may be necessary
or advisable in order to have the claims of the Holders allowed in any judicial
proceedings involving the Obligor under the Bonds or the trustee under the
indenture governing the Bonds.
The Bonds may be subject to United States or state laws permitting
bankruptcy, moratorium, reorganization or other actions which, in the event of
extreme financial difficulties of the Obligor, could result in delays in payment
or in non-payment of the Receipts relating to Bonds.
-14-
<PAGE>
In certain cases the bankruptcy, reorganization or moratorium could result in
non-payment of one or more Coupon Receipts while the related Principal Receipts
and Callable Principal Receipts were paid in part or in full.
In the event that the Trustee receives money or other property in
respect of the Bonds (other than a scheduled interest payment with respect to an
Interest Payment Date or the scheduled payment of principal on or with respect
to the stated maturity date of the Bonds) as a result of a payment default on
the Bonds, or actual notice that such moneys or other will be paid to the
Trustee, the Trustee shall promptly give notice to DTC or, if the Receipts are
not then held by DTC, directly to the Holders of the Receipts then outstanding
and unpaid. Such notice shall state that, not later than thirty (30) days after
the receipt of such moneys or other property, the Trustee shall allocate and
distribute such moneys or other property to the Holders of the Receipts then
outstanding and unpaid, in proportion to the Accreted Value of each outstanding
class of Receipts, and within each class pro rata by face amount. Property
received, other than cash, shall be liquidated by the Trustee in a commercially
reasonable manner and the proceeds thereof, after deduction of all reasonable
costs and expenses of such liquidation, distributed in cash; provided, however,
that if such property consists of securities, such securities shall be
liquidated only to the extent necessary to avoid distribution of fractional
securities.
The term "Accreted Value" means, for any Receipt, (a) the original issue
price for such Receipt as set forth in Exhibit A to the Series Trust Agreement,
plus (b) an amount equal to an investment return thereon accrued to the date of
determination calculated based on a semiannual compounding rate, on the basis of
a 360-day year composed of twelve 30-day months, equal to the original yield to
maturity of such Receipt as set forth in Exhibit A to the Series Trust
Agreement. With respect to the allocation of proceeds of the Bonds received in
connection with a payment default on the Bonds, the relevant determination date
shall be the date of such default.
The Trustee may consult with and rely upon the calculations of an
advisor (which may be the Depositor) in connection with any calculation of
Accreted Value to the extent such amount must be determined in order for the
Trustee to carry out its duties under the Trust Agreement. The expenses of such
an advisor (other than the Depositor) shall be borne by the Holders.
Neither the Trustee nor the Depositor shall be under any obligation
whatsoever to appear in, prosecute or defend any action, suit or othe proceeding
in respect of the Bonds or Receipts.
CERTAIN INFORMATION REGARDING THE RECEIPTS
BOOK-ENTRY REGISTRATION
DTC is a limited purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered pursuant to Section 17A of the Exchange Act. DTC
was created to hold securities for its Participants and to facilitate the
clearance and settlement of securities transactions between Participants through
electronic book-entries,
-15-
<PAGE>
thereby eliminating the need for physical movement of certificates (such
electronic book-entry system, the "DTC Book Entry Only System"). Participants
include securities brokers and dealers, banks, trust companies and clearing
corporations. Indirect access to the DTC system also is available to others such
as banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a Participant, either directly or indirectly
("Indirect Participants").
Holders of book-entry Receipts that are not Participants or Indirect
Participants but desire to purchase, sell or otherwise transfer ownership of, or
other interests in, such Receipts may do so only through Participants and
Indirect Participants. In addition, such Holders will receive all distributions
of principal and interest through DTC Participants. DTC will forward such
payments to its Participants, which thereafter will forward them to Indirect
Participants or such Holders. Except for the Depositor, it is anticipated that
the only "Receiptholder" will be Cede, as nominee of DTC. Beneficial owners will
not be recognized by the Trustee as Receiptholders as such term is used in the
Trust Agreement, and beneficial owners will be permitted to exercise the rights
of Receiptholders only indirectly through DTC and its Participants.
Under the rules, regulations and procedures creating and affecting DTC
and its operations (the "Rules"), DTC is required to make book-entry transfers
of Receipts among Participants on whose behalf it acts with respect to the
Receipts and to receive and transmit distributions of principal of and interest
on Receipts. Participants and Indirect Participants with which Holders have
accounts with respect to the Receipts similarly are required to make book-entry
transfers and receive and transmit such payments on behalf of their respective
customers. Accordingly, although Holders will not possess Receipts, the Rules
provide a mechanism by which beneficial owners will receive payments and will be
able to transfer their Receipt interests.
The Certificated Receipts delivered to the Trustee will be registered in
the name of Cede, as nominee for DTC. The Holders, as purchasers of Receipts,
will not receive physical certificates representing their Receipts. Instead, the
ownership interests of the Holders will be recorded, directly or indirectly,
through the records of the respective Participants and Indirect Participants.
Transfers among Holders will be accomplished through and reflected on the
records of DTC and the Participants or Indirect Participants of which those
Holders are customers. DTC will maintain records for the payment, transfer and
exchange of Receipts held by DTC Participants on behalf of Holders, but will not
make payments directly to Holders or record specific transfers of Receipts from
one Holder to another.
Payments on the Bonds that are received by the Trustee from the Obligor,
including payments upon redemption of the Bonds, will be paid to DTC as the
registered holder of the related Receipts. DTC, under its current practices,
would credit those payments to the accounts of the Participants in accordance
with their respective holdings of Receipts as shown on DTC's records. Payment by
Participants and Indirect Participants to Holders will be governed by standing
instructions and customary practices, and will be the responsibility of each
such Participant or Indirect Participant and not of DTC or the Trustee, subject
to any statutory and regulatory requirements as may be in effect from time to
time.
-16-
<PAGE>
DTC may determine to discontinue the DTC Book Entry Only System with
respect to the Receipts at any time by giving notice to the Trustee and the
Depositor and discharging its responsibilities with respect thereto. In
addition, the Depositor may cause the removal of DTC (or a successor or
substitute depository) if the Depositor determines such removal is in the best
interest of the Holders or is in the best interests of the Depositor as long as
the removal will not adversely affect the Holders. If DTC (or a successor or
substitute depository) is removed and the Depositor, after a good faith effort,
is unable to procure the services of a successor depository, the Trustee will
serve as depository of the Bonds.
Because DTC can only act on behalf of Participants, who in turn act on
behalf of Indirect Participants and certain banks, the ability of a Holder to
pledge Receipts to persons or entities that do not participate in the DTC
system, or to otherwise act with respect to such Receipts, may be limited due to
the lack of a physical certificate for such Receipts.
DTC has advised the Depositor that it will take any action permitted to
be taken by a Receiptholder under the related Trust Agreement only at the
direction of one or more Participants to whose accounts with DTC the Receipts
are credited. DTC may take conflicting actions with respect to other fractional
interests to the extent that such actions are taken on behalf of Participants
whose holdings include such fractional interest.
Except as required by law, the Trustee will not have any liability for
any aspect of the records relating to or payments made on account of beneficial
ownership interest of the Receipts of any series held by Cede, as nominee for
DTC, or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
CERTIFICATED RECEIPTS
Receipts will initially be issued in book-entry form. Receipts will be
issued in fully registered, certificated form ("Certificated Receipts") to
Receiptholders or respective nominees, rather than to DTC or its nominee, only
if (i) the Depositor advises the Trustee in writing that DTC is no longer
willing or able to discharge properly its responsibilities as depository with
respect to such Receipts and the Depositor is unable to locate a qualified
successor, or (ii) the Depositor, at its option, elects to terminate the
book-entry system through DTC.
Upon the occurrence of any event described in the immediately preceding
paragraph, the Trustee will execute, register the transfer of and exchange
Certificated Receipts as requested by DTC or any other Holders of such Receipts
in appropriate amounts and in accordance with the Receipt registry of DTC.
Distributions of principal of, and interest on, the Certificated
Receipts will thereafter be made in accordance with the procedures set forth in
the related Trust Agreement directly to holders of Certificated Receipts in
whose names the Certificated Receipts were registered at the close of business
on the day before the related Payment Date. Such distributions will be made by
check mailed to the address of such holder as it appears on the register
maintained by the Trustee. The final payment on any Certificated Receipt,
however, will be made only upon presentation and
-17-
<PAGE>
surrender of such Certificated Receipt at the office or agency specified in the
notice of final distribution to the holders of such class.
REPORTS TO RECEIPTHOLDERS
Quarterly and annual unaudited reports containing information concerning
the related Bonds, including an annual independent accountant's statement of
review regarding the payment of all income on the Bonds to the Receiptholders,
will be prepared by the Depositor and sent on behalf of each Trust only to Cede
as nominee of DTC and registered holder of the Receipts. Such reports will not
constitute financial statements prepared in accordance with generally accepted
accounting principles. Each Trust will file with the Commission such other
reports as may be required under the Exchange Act, and the rules and regulations
of the Commission thereunder.
In addition to the foregoing, within the prescribed period of time for
tax reporting purposes after the end of each calendar year during the term of
each Trust, the Trustee will mail to each person who at any time during such
calendar year has been a Receiptholder with respect to such Trust and received
any payment thereon a statement containing certain information for the purposes
of such Receiptholder's preparation of federal income tax returns. See "CERTAIN
FEDERAL INCOME TAX MATTERS -- Additional Tax Considerations; Tax Information
Reporting."
THE TRUST AGREEMENT
Pursuant to the Trust Agreement, the Bonds underlying any series of
Receipts will be held for the Holders of that series of Receipts by the Trustee
in physical certificate form or as book-entry credits to an account of the
Trustee at DTC. Under the DTC Book Entry Only System, DTC will be the sole
registered holder of the Receipts. For each series of Receipts, the Trustee will
establish a separate trust account of the Bonds relating to such Receipts and
two subaccounts within such separate account, the first for interest payments
underlying Coupon Receipts and the second for principal payments underlying
Principal Receipts or principal payments and interest payments underlying
Callable Principal Receipts. Unless otherwise set forth in the related
Prospectus Supplement, it is the intent of the Depositor that all of the Bonds
will be held by the Trustee by book-entry credit to its account at DTC. If, for
any reason, the Bonds may no longer be held by book-entry credit at DTC, the
Bonds will thereafter be held by the Trustee in a separate trust account.
Prior to a payment default by the Obligor, the only responsibility of
the Trustee with respect to payments on Receipts will be to apply all payments
received in respect of the Bonds to the registered holders of the related
Receipts without making any deductions other than for any taxes and governmental
charges.
Trust accounts established for Receipts will be special accounts
separate from the general assets of the Trustee and the interest payments and
principal payments therein will not be subject to any right, charge, security
interest, lien or claim of any kind in favor of the Trustee or any person
claiming through it. The Trustee will not have the power or authority to assign,
transfer,
-18-
<PAGE>
pledge or otherwise dispose of any of the assets of the trust accounts to any
person except as otherwise permitted by the Trust Agreement.
The Trust Agreement provides that the Trustee shall keep at its
designated office in New York, New York a register (the "Receipt Register") in
which, subject to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of, and for the registration of transfers or
exchanges of, Receipts, which will be accomplished as described herein under
"Certain Information Regarding the Receipts -- Book-Entry Registration."
The Trust Agreement provides that, in the event of any action requiring
a vote of the registered holders of any Bonds, the Trustee (as the owner of
record of the Bonds), upon receipt of the Bond proxy, will notify DTC (in its
capacity as the owner of record of the Principal Receipts or Callable Principal
Receipts) of such action. Pursuant to currently existing procedures, it is
expected that DTC, in turn, will notify its Participants who, in turn, will
notify the beneficial owners of Principal Receipts or Callable Principal
Receipts of such event. Thereafter, except when the approval of the beneficial
owners of the Coupon Receipts is also required as described below, the Trustee
shall vote solely in accordance with the instructions received from DTC (or
pursuant to the applicable procedures of DTC) and shall apportion its voting
power on the basis of the face amount of such Principal Receipts or Callable
Principal Receipts. For any Receipts which are not then held by DTC or any other
depository, the Trustee, upon receipt of the Bond proxy, will notify the
registered holders directly of such action and shall vote in the same manner as
noted above. In no event shall the Depositor be allowed or entitled (other than
in its capacity as a safekeeper for a registered holder) to vote, directly or
indirectly any Receipts.
By their affirmative vote, the Holders of more than 50% in principal
amount of Receipts of any series may direct the Trustee to take or omit to take
any action required or permitted under the Trust Agreement or the Trust
Indenture Act of 1939, as amended; provided, however, that the Trustee shall not
vote in favor of any proposal with regard to the Bonds which would have the
effect of permitting a redemption or prepayment of the Bonds unless the Holders
of 100% of the Receipts then outstanding of the applicable series (including all
Coupon Receipts, Principal Receipts or Callable Principal Receipts, as the case
may be) vote in favor of such action.
The Trustee will maintain a fidelity bond for the protection of
registered holders of Receipts in customary amounts against losses due to
dishonest or fraudulent action by its employees in connection with its
obligations under the Trust Agreement.
The Trust Agreement provides that neither the Trustee nor the Depositor
shall be subject to any liabilities to registered holders of Receipts other than
by reason of willful misconduct, bad faith or negligence in the performance of
duties set forth in the Trust Agreement and that neither of them shall be liable
to such registered holders if any law, government regulation or other
circumstance prevents or delays performance of duties set forth in the Trust
Agreement.
DTC will not be deemed an agent of the Trustee. The Trustee may own and
deal in bonds of the same issue and maturity as the Bonds and in Receipts.
-19-
<PAGE>
The Trustee and the Depositor may amend the Trust Agreement, provided
that no amendment may be made which defers or alters the maturity of a Receipt
or in any manner adversely affects the rights of a Holder of a Receipt to the
interest or principal payments evidenced thereby or otherwise materially
prejudices any substantial existing right of a Holder.
No amendment to the Trust Agreement shall be effective unless the
Depositor shall have provided the nationally recognized statistical rating
agency, if any, which has rated the Receipts of each Trust to be effected by
such amendment with ten days prior written notice of such proposed amendment,
and shall have received a written confirmation from such nationally recognized
statistical rating agency that such amendment will not cause the nationally
recognized statistical rating agency to downgrade its rating of the subject
Receipts.
The Trustee shall be entitled to receive, and shall be fully protected
in relying upon, an opinion of counsel stating that the execution of any
amendment, supplement or waiver is authorized and permitted by the Trust
Agreement. Such opinion shall not be an expense of the Trustee.
The Trustee may at any time resign as Trustee by written notice to the
Depositor, such resignation to take effect upon the appointment of a successor
Trustee, subject to the terms and conditions of the Trust Agreement.
The Depositor may at any time remove the Trustee as Trustee under the
Trust Agreement by written notice of its election to do so, delivered to the
Trustee, and such removal shall take effect upon the appointment of a successor
Trustee and its acceptance of such appointment, subject to the terms and
conditions of the Trust Agreement.
In the event that the Trustee becomes incapable of action, is adjudged
to be bankrupt or insolvent, or a receiver of the Trustee or of its property is
appointed, or any public officer takes charge or control of the Trustee or of
its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Trustee may be removed by court action instituted by any
registered holder of a Receipt who has been a registered holder for six months
or by registered holders of 10% of the face amount of Receipts of a series which
is outstanding at such time.
CERTAIN FEDERAL INCOME TAX MATTERS
The following is a general summary of certain federal income tax
consequences that may result from the purchase, ownership and disposition of
Receipts. This summary is based on the Internal Revenue Code of 1986, as amended
(the "Code"), as well as final, temporary and proposed Treasury regulations and
administrative and judicial decisions in effect as of the date hereof.
Legislative, judicial and administrative changes may occur, possibly with
retroactive effect, affecting the accuracy of the statements set forth herein.
In particular, purchasers of the Receipts should be aware that changes in, or
clarifications of, the tax law applicable to Receipts, including the regulations
that address the federal income tax consequences relating to obligations
-20-
<PAGE>
issued with original discount (the "OID Regulations") and adoption of
regulations under section 1286 of the Code, may occur after issuance of Receipts
and may be applied retroactively to owners of Receipts. Additional United States
federal income tax considerations applicable to particular series and/or classes
of Receipts may be set forth in the applicable Prospectus Supplement.
This summary does not purport to address all federal income tax matters
that may be relevant to purchasers of Receipts or to address the tax
consequences of a purchase of Receipts by any particular investor. For example,
it deals only with Receipts held as capital assets within the meaning of Section
1221 of the Code. It does not address tax consequences that may be relevant to
particular holders subject to special treatment under federal income tax law
(e.g., banks and other financial institutions, life insurance companies, dealers
in securities or currencies, tax-exempt entities, taxpayers holding Receipts as
a hedge, or whose "functional currency" is not the United States dollar). Except
as indicated, this summary is directed to prospective purchasers in the initial
offering described herein, and not to subsequent purchasers of Receipts.
Consequently, purchasers of Receipts (in particular dealers in securities and
purchasers of the Callable Principal Receipts) should consult their own tax
advisors concerning the tax consequences to them under federal income tax law,
as well as the tax law of any state, local or foreign jurisdiction, of the
purchase, ownership and disposition of Receipts.
Upon the issuance of each series of Receipts, McCarter & English will
render an opinion to the effect that, for federal income tax purposes: (1) the
Trust will be a grantor trust and not a partnership or an association taxable as
a corporation; (2) each Receipt will be considered a "stripped bond" or a
"stripped coupon," as appropriate, under section 1286 of the Code, for purposes
of applying the original issue discount rules of the Code to a purchaser; (3) a
Receipt purchased in an original sale or subsequent purchase will be treated,
for purposes of applying the original issue discount rules of the Code to such
purchaser, as if the Receipt held by such purchaser was issued on the purchase
date with original issue discount; (4) the original issue discount with respect
to a Receipt, other than certain Callable Principal Receipts, will equal the
excess of the amount payable at maturity of the Receipt over the purchase price
of such Receipt; (5) each of the Callable Principal Receipts should be treated
under Section 1286 of the Code as a single stripped bond for purposes of
calculating original issue discount and gain or loss on disposition; (6) in the
case of a Callable Principal Receipt with respect to which the related Bond is
required to be redeemed prior to its stated maturity date, original issue
discount and yield to maturity will likely be required to be calculated by
taking into account events that have occurred prior to the purchase date of such
Callable Principal Receipt and therefore, as if the date on which the redemption
is to take place and the redemption price were the maturity date and amount
payable at maturity, respectively; (7) in the case of a Callable Principal
Receipt not required to be redeemed prior to its stated maturity date, the final
regulations under sections 1272 through 1275 of the Code provide that, if based
on all the facts and circumstances as of the issue date it is more likely than
not that a debt instrument's stated payment schedule will not occur, then the
yield and maturity of the debt instrument are computed based on the payment
schedule most likely to occur.
-21-
<PAGE>
CLASSIFICATION OF THE TRUST
In the opinion of McCarter & English, the Trust will be classified as a
grantor trust under subpart E, Part I of subchapter J of the Code and not as a
partnership or an association taxable as a corporation. As a grantor trust, the
Trust will not be not subject to federal income tax, although holders of
Receipts will be subject to the tax treatment discussed below.
FEDERAL TAX TREATMENT OF STRIPPED BONDS AND STRIPPED COUPONS
Under section 1286 of the Code, the separation of ownership of the right
to receive some or all of the principal payments on a bond from the ownership of
the right to receive some or all of the interest payments on that bond which
have not become payable results in the creation of "stripped bonds" with respect
to the principal payments and "stripped coupons" with respect to the interest
payments. Receipts will be considered "stripped bonds" or "stripped coupons," as
appropriate, and a Receipt (whether purchased by a purchaser in an original sale
or in a subsequent transaction) will be treated, under section 1286 of the Code,
solely for purposes of applying the original issue discount rules of the Code to
such purchaser, as if the Receipt held by such purchaser was issued on the
purchase date with original issue discount ("OID"). Purchasers of the Receipts
will be required to include the accrued portion of the OID (as described below)
in gross income for the taxable year even though the corresponding payment may
not be received during the taxable year.
Principal Receipts and Coupon Receipts
--------------------------------------
In the opinion of McCarter & English, the Coupon Receipts will be treated
as "stripped coupons" and Principal Receipts will be treated as "stripped
bonds," within the meaning of section 1286 of the Code. The total amount of OID
with respect to a Principal Receipt or Coupon Receipt will equal the excess of
the amount payable at maturity of the particular Principal Receipt or Coupon
Receipt over the purchase price of the respective Receipt.
Callable Principal Receipts
---------------------------
It is believed by the Depositor that purchasers of the Callable
Principal Receipts will be treated, for purposes of calculating original issue
discount and gain or loss on disposition, as having purchased a single "stripped
bond" (rather than multiple debt components representing separate rights to
receive principal and to receive interest on each interest payment date
subsequent to the first optional call date thereof, for which tax basis must be
separately allocated and original issue discount separately calculated). In the
event that the scheduled maturity date of a particular Callable Principal
Receipt is properly treated as the maturity date of such Receipt for purposes of
the original issue discount rules, it is believed by the Depositor that such
Callable Principal Receipt will be regarded as evidencing a single "installment
obligation", within the meaning of the regulations promulgated by the U.S.
Treasury with respect to original issue discount. This treatment is based on an
interpretation of the interrelationship between section 1286 of the Code and
certain Treasury regulations promulgated under sections 1272, 1273, and 1275 of
the Code, and there can be no assurance that the Internal Revenue Service would
agree
-22-
<PAGE>
with such interpretation. Certain of the Bonds related to Callable Principal
Receipts may be required to be redeemed prior to their stated maturity date at a
price equal to their principal amount plus, in some cases, a fixed call premium.
Under section 1286 the U.S. Treasury is given specific authority to adopt
regulations modifying treatment under such section where necessary to accurately
reflect the income of the holder of a stripped right by reason of applicable
call options or other circumstances. Because section 1286 of the Code treats a
"stripped bond" as being issued on the date of purchase for purposes of applying
the original issue discount rules of the Code, the original issue discount and
yield to maturity of the Principal Receipts will likely be required by the
Internal Revenue Service to be calculated by taking into account events that
have occurred prior to such purchase date and therefore as if the date on which
the redemption is to take place and the redemption price were the maturity date
and amount payable at maturity, respectively, of such Callable Principal
Receipts. Under regulations promulgated pursuant to sections 1271 through 1275
of the Code, if based on all the facts and circumstances as of the issue date it
is more likely than not that a debt instrument's stated payment schedule will
not occur, then the yield and maturity of the debt instrument are computed based
on the payment schedule most likely to occur. It is otherwise uncertain whether
the scheduled maturity date of a particular Callable Principal Receipt will be
viewed as the maturity date of such Callable Principal Receipt for purposes of
the original issue discount rules (e.g., determination of yield to maturity and
amount payable at maturity), particularly where on the date of purchase of such
Callable Principal Receipt objective market factors suggest that in the absence
of any market change, it can be expected to be in the economic interest of the
issuer of the related Bond to call such Bond on a date prior to scheduled
maturity. As described above, the OID Regulations provide that if, based on all
the facts and circumstances as of the issue date, it is more likely than not
that a debt instrument's stated payment schedule will not occur, then the yield
and maturity of the debt instrument are computed based on the payment schedule
most likely to occur. It is likely that future Treasury regulations promulgated
pursuant to a specific grant of regulatory authority under section 1286 of the
Code with respect to stripped rights with call options will address this
question.
Accrual of Original Issue Discount
----------------------------------
In general, OID on a Receipt accrues on a daily basis, based on the
constant yield to maturity of the Receipt over the term of the Receipt and is to
be allocated ratably to each day in an accrual period. The constant yield to
maturity means that interest rate which when used in computing the present value
of all of the principal and coupon payments to be made on the Receipts produces
an amount equal to the purchase price of such Receipts, calculated based on
compounding at the end of each accrual period.
In the case of any Receipt that matures more than one year after its
date of purchase, the OID will be allocated to accrual periods which may be of
any length and may vary over the term of the Receipt, provided that no period is
longer than one year and the principal payment and each coupon payment with
respect to the Receipt occurs on the first or last day of an accrual period. The
portion of the OID that is allocated to an accrual period will equal the product
of (i) the purchase price of such Receipts increased by the portion of the OID
allocated to prior accrual periods during which the purchaser held such Receipts
(and, in the case of a Callable Principal
-23-
<PAGE>
Receipts, if properly treated as an installment obligation maturing on the
scheduled maturity date, reduced by any payments on such Receipts received in
prior accrual periods during which the purchaser held such Receipts), and (ii)
the yield to maturity of the Receipts appropriately taking into account the
length of the accrual period. The resulting portion of OID allocated to an
accrual period will be divided by the number of days in the accrual period to
determine the daily portions of OID for that accrual period.
In the case of an Receipt maturing within one year of the date on which
it is purchased, OID accrues on a straight-line basis and is apportioned equally
to each of the days subsequent to the date of purchase of such Receipts through
the date of maturity, provided that, at the owner's election, OID may be accrued
under a constant yield method based on the yield to maturity calculated as
described above but with daily compounding (rather than compounding at the end
of each accrual period).
GAIN OR LOSS
A purchaser's tax basis in a Receipt will equal the purchase price for
such Receipt increased by the portion of the original issue discount accrued on
such Receipt during the period such purchaser owns the Receipt and, in the case
of a Callable Principal Receipt, if properly treated as an installment
obligation maturing on the scheduled maturity date, reduced by any payments
actually received prior to maturity. Gain or loss on sale or at maturity of a
Receipt will be equal to the difference between the amount realized in such sale
or at maturity and the owner's tax basis at the time of sale or at maturity and
will be taxable capital gain or loss.
ADDITIONAL TAX CONSIDERATIONS
Backup Withholding
------------------
Payments of interest (including OID) and principal, as well as proceeds
from the disposition or retirement of Receipts, may be subject to a "backup"
withholding tax of 31 percent if a recipient fails to furnish to the payor (in
the case of Receipts, the Trustee) certain identifying information. Certain
penalties also may be imposed by the IRS on a recipient of payments who is
required to supply information, but fails to do so in the proper manner.
Backup withholding will not apply with respect to payments made to certain
exempt recipients, such as corporations and financial institutions. Holders
should consult their own tax advisers with respect to qualification for
exemption from backup withholding and the procedure for obtaining such an
exemption. Any amounts deducted and withheld would be allowed as a credit
against such recipient's federal income tax.
Tax Information Reporting
-------------------------
Within a reasonable time after the end of each calendar year, the
Trustee will furnish each Receiptholder (DTC or other holders of Certificated
Receipts) such customary information as the Trustee deems necessary or desirable
to enable Receiptholders to prepare their tax returns. The
-24-
<PAGE>
Trustee will furnish comparable information to the IRS as and when required by
law to do so. Because the rules for accruing discount and amortizing premium
with respect to Receipts are uncertain in various respects, there is no
assurance that the IRS will agree with the information reports. Moreover, even
if otherwise accepted as accurate by the IRS, such information reports will be
based on the original issue price of the Receipt and will, therefore, in the
case of Receiptholders who purchased their Receipt after their initial issuance
or at a price different from the original issue price, require adjustments to
account for such Receiptholders' holding periods and purchase prices.
Receiptholders who hold their Receipt through DTC participants should consult
the party from whom they receive tax reports concerning the Receipts to
determine whether such reports reflect such adjustments. Receiptholders who hold
Certificated Receipts should consult their tax advisors concerning the method
for making any such required adjustments.
Non-United States Holders
-------------------------
A Non-United States Holder is a beneficial owner of a Receipt other than
a United States citizen or resident, a domestic partnership or corporation, or
a trust subject to U.S. income tax on income regardless of its source. Under
present federal income and estate tax law:
(a) No withholding of federal income tax will be required with respect
to the payment of interest or OID attributable to a Receipt
owned by a Non-United States Holder, provided that such Holder
(i) does not actually or constructively own 10 percent or more of
any issuer of Bonds, and (ii) in accordance with specified
procedures, supplies the person otherwise required to withhold with
a certification to the effect that the beneficial owner is not a
United States person, citizen or resident. In certain
circumstances, the requisite certification may be provided by or
through a bank or other financial institution.
(b) If certain conditions are met, a nonresident alien individual will
not be subject to Federal income tax with respect to certain gains
realized on the sale, exchange, or retirement of a receipt.
(c) A Receipt beneficially owned by an individual who at the time of
such individual's death is a Non-United States Holder will not
be subject to federal estate tax as a result of such individual's
death, provided that the payments with respect to such Receipt
are not effectively connected with a United States trade or
business of such individual and the Receipts constitute portfolio
debt obligations, interest on which is exempt from withholding
under the Code.
Notwithstanding the foregoing, Non-United States Holders may be subject
to income tax withholding and estate taxation with respect to any Bonds that
were issued before July 18, 1984. Further, a Non-United States Holder engaged in
a trade or business within the United States whose income from a Receipt is
effectively connected with that trade or business generally will be subject to
regular United States federal income tax on such income and gain as if it were a
United States Holder. In addition, if a Non-United States Holder is a foreign
corporation, it may
-25-
<PAGE>
be subject to a branch profits tax equal to 30 percent of its effectively
connected earnings and profits for the taxable year, subject to adjustments.
Backup withholding will not apply to payments to a Non-United States
Holder on a Receipt if the holder has certified as to its foreign status under
penalty of perjury (or has otherwise established an exemption) and certain other
requirements are met, provided that the payor does not know that the payee is a
United States person. Payments on the sale, exchange or other disposition of a
Receipt to or through a foreign office of a broker will not be subject to backup
withholding provided certain requirements are met; payments to or through the
United States office of a broker will be subject to backup withholding unless
the Non-United States Holder makes the certification or otherwise establishes an
exemption under the conditions previously described.
NON-UNITED STATES HOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS
REGARDING THE APPLICATION OF UNITED STATES FEDERAL INCOME TAX LAW TO THEIR
PARTICULAR SITUATIONS.
STATE AND OTHER TAX CONSIDERATIONS
In addition to the federal income tax consequences described above,
potential investors should consider the state, local and foreign tax
consequences of the acquisition, ownership and disposition of Receipts. State,
local and foreign tax law may differ substantially from federal tax law, and
this discussion does not purport to describe any aspect of the tax law of a
state or other jurisdiction. Therefore, prospective purchasers should consult
their own tax advisors with respect to such matters.
ERISA CONSIDERATIONS
Section 406 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and section 4975 of the Code, prohibit "plan assets" of a
pension, profit sharing and other employee benefit plans, as well as individual
retirement accounts and Keogh plans (each a "Plan"), from engaging in certain
transactions involving "plan assets" with persons that are "parties in interest"
under ERISA or "disqualified person" under the Code with respect to the Plan. A
violation of these "prohibited transaction" rules may result in an excise tax
and other liabilities under ERISA and Section 4975 of the Code for such persons,
unless a statutory, regulatory or administrative exemption is available.
A violation of the prohibited transaction rules could occur if Receipts
of any series were purchased with assets of a Plan, and if the Depositor, the
Trustee, or any of their affiliates were a "party in interest" or a
"disqualified person" with respect to such Plan, unless a statutory, regulatory
or administrative exemption is available or an exception applies under a
regulation (the "Plan Asset Regulation") issued by the Department of Labor (the
"DOL"). The Depositor, the Trustee, or their affiliates may be "parties in
interest"
-26-
<PAGE>
and "disqualified persons" with respect to certain Plans; in particular, it is
likely that the Trustee will be treated as a "party in interest" and
"disqualified person" with many Plans. Before purchasing Receipts of any
particular series, a Plan fiduciary (as defined in ERISA section 3(21) and the
regulations issued thereunder) or other Plan investor should consider whether a
prohibited transaction might arise by reason of the relationship between the
Plan and the Depositor, the relevant Trustee or any of their affiliates, and
should consult its counsel regarding the purchase in light of the considerations
described below.
The DOL has issued three class exemptions that may apply to otherwise
prohibited transactions arising from the purchase or holding of the Receipts:
DOL Prohibited Transaction Exemption 91-38 (Class Exemption for Certain
Transactions Involving Bank Collective Investment Funds), 90-1 (Class Exemption
for Certain Transactions Involving Insurance Company Pooled Separate Accounts),
and 84-14 (Class Exemption for Plan Asset Transactions Determined by Independent
Qualified Professional Asset Managers).
Under certain circumstances, the Plan Asset Regulation treats the
underlying assets of an entity in which a Plan holds an equity interest as "plan
assets" of such Plan. Because the Receipts will represent beneficial interests
in a Trust, the Receipts will be considered equity interests for purposes of the
Plan Asset Regulation, with the result that the assets of the Trust will be
treated as "plan assets" of the investing Plans for purposes of ERISA and
section 4975 of the Code, unless either of the following exceptions applies.
The first exception applies to a "publicly offered security." A
publicly-offered security is a security that is (a) freely transferable, (b)
part of a class of securities that is owned, immediately subsequent to the
initial offering, by 100 or more investors who are independent of the issuer and
of one another ("Independent Investors"), and (c) either is (i) part of a class
of securities registered under section 12(b) or 12(g) of the Exchange Act, or
(ii) sold to a Plan as part of an offering of securities to the public pursuant
to an effective registration statement under the Act and the class of securities
of which such security is a part is registered under the Exchange Act within 120
days (or such later time as may be allowed by the Commission) after the end of
the fiscal year of the issuer during which the offering of such securities to
the public occurred. For purposes of the 100 Independent Investor criterion,
each class of Receipts should be deemed to be a "class" of securities that would
be tested separately from any other securities that may be issued by the Trust.
It is anticipated that each class of Receipts will meet the foregoing criteria
for treatment as "publicly-offered securities," although no assurance can be
given that each class of each Series will meet this criteria.
The second exception applies if equity participation in the entity by
"benefit plan investors" (i.e., Plans and other employee benefit plans not
subject to ERISA, such as governmental or foreign plans, as well as entities
holding assets deemed to be "plan assets") is not "significant." Benefit plan
investors' equity participation in an entity is not significant on any date on
which an equity interest in the entity is issued and outstanding if, immediately
after the most recent acquisition or any equity interest in the entity, less
than 25% of the value of each class of equity interests in the entity (excluding
interests held by any person who has discretionary authority or control with
respect to such assets of the entity, received direct or indirect compensation
for providing investment advice with respect to such assets, or is an
-27-
<PAGE>
an affiliate of such person) is held by benefit plan investors. No assurance can
be given by the Depositor as to whether or not the value of each class of
Receipts in any Trust held by benefit plan investors will be "significant" upon
completion of the offering of any series of Receipts or thereafter, and no
monitoring or other measures will be taken with respect to the satisfaction of
the conditions to this exception.
If neither of the foregoing exceptions under the Plan Asset Regulation
were satisfied with respect to a Trust and the Trust were considered to hold
"plan assets," transactions involving the Trust and "parties in interest" or
"disqualified persons" with respect to Receipts held by the Plan might be
prohibited under section 406 of ERISA and/or section 4975 of the Code, and might
result in excise tax and other liabilities under ERISA or Section 4975 of the
Code unless an exemption were available. The three DOL class exemptions
mentioned above may not provide relief for all transactions involving the assets
of a Trust, even if they would otherwise apply to the purchase of a Receipt by a
Plan.
Receipts of any series may not be purchased with the assets of a Plan if
the Depositor, the Trustee, or any of their affiliates is deemed a Plan
fiduciary under the definition set forth above and, among other things, (a) has
investment or administrative discretion with respect to such Plan assets; (b)
has authority or responsibility to give, or regularly gives, investment advice
with respect to such Plan assets, for a fee and pursuant to an agreement or
understanding that such advice (i) will serve as a primary basis for investment
decisions with respect to such Plan assets, and (ii) will be based on the
particular investment needs of such Plan; or (c) is an employer maintaining or
contributing to such Plan.
In light of the foregoing, fiduciaries and other investors considering
the purchase of Receipts with "plan assets" (as defined in ERISA and the
regulations thereunder) of any Plan should consult their tax and/or legal
counsel regarding whether the assets of the Trust would be considered "plan
assets" of the Plan of such investors and fiduciaries, and the availability of
an exemption from the prohibited transaction rules.
PLAN OF DISTRIBUTION
The Receipts offered hereby and by the related Prospectus Supplement
will be offered in series through one or more of the methods described below.
The Prospectus Supplement prepared for each series will describe the method of
offering being utilized for that series. The Receipts will be transferred to
Rickel Securities, Inc. in exchange for the Bonds, and there will be no cash
proceeds received by the Depositor from the sale of the Receipts.
Any Receipts acquired by Rickel Securities, Inc. in exchange for Bonds
as described above will be acquired by Rickel Securities, Inc. for its own
account and may be resold from time to time in one or more transactions,
including negotiated transactions at fixed public offering prices or a varying
prices to be determined at the time of sale or at the time of commitment
therefor. If any underwriters other than Rickel Securities, Inc. participate as
co-managers in the distribution of the Receipts of a particular series, their
names and Rickel
-28-
<PAGE>
Securities, Inc.'s will be set forth on the cover of the Prospectus Supplement
relating to such series and the members of the underwriting syndicate, if any,
will be named in such Prospectus Supplement.
In connection with any sale of the Receipts in which Rickel Securities,
Inc. is not the sole underwriter, the other underwriters may receive
compensation from Rickel Securities, Inc. or from purchasers of the Receipts in
the form of discounts, concessions or commissions. Underwriters and dealers
participating in the distribution of the Receipts may be deemed to be
underwriters in connection with such Receipts, and any discounts or commissions
received by them from Rickel Securities, Inc. and any profit on the resale of
Receipts by them may be deemed to be underwriting discounts and commissions
under the Securities Act.
It is anticipated that the underwriting agreement pertaining to the sale
of any series of Receipts in which Rickel Securities, Inc. is not the sole
underwriter will provide that the obligations of the underwriters will be
subject to certain conditions precedent, that the underwriters will be obligated
to purchase all such Receipts if any are purchased (other than in connection
with an underwriting on a best efforts basis), and that the Depositor will
indemnify the several underwriters and the underwriters will indemnify the
Depositor against certain civil liabilities, including liabilities under the
Securities Act, or will contribute to payments required to be made in respect
thereof.
LEGAL OPINIONS
Certain legal and federal income tax matters relating to the Receipts
will be passed upon for the Depositor and Rickel Securities, Inc. by McCarter &
English, counsel to the Depositor and Rickel Securities, Inc.
INDEX OF TERMS
Set forth below is a list of the defined terms used in this Prospectus
and the pages on which the definitions of such terms may be found herein.
TERMS PAGE
Accreted Value ...............................................................15
Bonds .........................................................................2
Cede ..........................................................................4
Certificated Receipts ........................................................17
Code ..........................................................................6
Commission ....................................................................4
Depositor .....................................................................2
DOL ..........................................................................26
-29-
<PAGE>
DTC ...........................................................................3
DTC Book Entry Only System ...................................................16
ERISA .........................................................................7
Exchange Act ..................................................................4
Holders .......................................................................4
Independent Investors ........................................................27
Indirect Participants ........................................................16
Issuance Date .................................................................6
Obligor .......................................................................8
OID ..........................................................................22
OID Regulations ..............................................................21
Plan .........................................................................26
Plan Asset Regulation ........................................................26
Prospectus Supplement .........................................................2
Receiptholders ................................................................4
Receipt Registry .............................................................19
Receipts ......................................................................2
Registration Statement ........................................................4
Rules ........................................................................16
Securities Act ................................................................4
Trust .........................................................................2
Trust Agreement ...............................................................2
Trustee .......................................................................2
-30-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses to be incurred in
connection with the offering of the Receipts, other than underwriting discounts
and commissions, described in this Registration Statement:
Securities & Exchange Commission Registration Fee ...............$18,182
Printing ..........................................................5,000
Legal Fees and Expenses ..........................................75,000
Blue Sky Filing and Counsel Fees ..................................4,500
Accountants' Fees .................................................5,000
Trustee Fees and Expenses ........................................10,000
Rating Agencies' Fees ............................................10,000
Miscellaneous ....................................................18,104
------
Total ..........................................................$145,786
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
American Corporate Receipts, Inc. is incorporated under the laws of New
Jersey. Section 14A:3-5 of the New Jersey General Corporation Business Act
provides that a New Jersey corporation may indemnify any persons, including
officers and directors, who are, or are threatened to be made, parties to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of such corporation, by reason of the fact that such person was an
officer, director, employee or agent of such corporation, or is or was serving
at the request of such corporation as a director, officer, employee or agent of
another corporation or enterprise). The indemnity may include expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding, provided such person acted in good faith and in a manner he
reasonably believed to be in or not opposed to the corporation's best interests
and, for criminal proceedings, had no reasonable cause to believe that his
conduct was illegal. A New Jersey corporation may indemnify officers and
directors in an action by or in the right of the corporation under the same
conditions, except that no indemnification is permitted without judicial
approval if the officer or director is adjudged to be liable to the corporation.
Where an officer or director is successful on the merits or otherwise in the
defense of any action referred to above, the corporation must indemnify him
against the expenses which such officer or director actually and reasonably
incurred.
-31-
<PAGE>
American Corporate Receipts, Inc.'s Certificate of Incorporation
provides, in effect, that, subject to certain limited exceptions, such
corporation will indemnify its officers and directors to the extent permitted by
New Jersey law.
ITEM 16. EXHIBITS.
Exhibits
1.1--Form of Underwriting Agreement.
3.1--Certificate of Incorporation of the Depositor.
3.2--By-laws of the Depositor.
4.1--Form of Master Trust Agreement and Standard Terms and Conditions
5.1--Opinion of McCarter & English with respect to legality.
8.1--Opinion of McCarter & English with respect to federal tax matters.
24.1--Consent of McCarter & English (included as part of Exhibits 5.1 and 8.1).
25.1--Power of Attorney.
28.1--Form of Prospectus Supplement.
- ---------------------
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
-32-
<PAGE>
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) To file an application for the purpose of determining the
eligibility of the Trustee to act under subsection (a) of Section 310
of the Trust Indenture Act of 1939 in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the
Trust Indenture Act of 1939.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors and officers of the Depositor pursuant
to the provisions discussed in Item 14 above, or otherwise, the Depositor has
been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director or officer of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director or officer in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
-33-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Township of Millburn, State of New Jersey, on the 28th day of
October, 1997.
AMERICAN CORPORATE RECEIPTS, INC.
/s/ John C. Sabo
-----------------------------
John C. Sabo
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on October 28, 1997 by the
following persons in the capacities indicated.
Signature Title
--------- -----
/s/ John C. Sabo President and Sole Director
- --------------------------------
John C. Sabo (Principal Executive Officer)
/s/ Susan P. Bowen Senior Vice President
- --------------------------------
Susan P. Bowen (Chief Financial Officer)
-34-
<PAGE>
EXHIBIT INDEX
1.1 -- Form of Underwriting Agreement
3.1 -- Certificate of Incorporation of the Depositor
3.2 -- By-laws of the Depositor
4.1 -- Form of Master Trust Agreement and Standard
Terms and Conditions
5.1 -- Opinion of McCarter & English with respect to legality
8.1 -- Opinion of McCarter & English with respect to
federal tax matters
24.1 -- Consent of McCarter & English (included as part
of Exhibits 5.1 and 8.1)
25.1 -- Power of Attorney
28.1 -- Form of Prospectus Supplement
- ---------------------
-35-
EXHIBIT 1.1
$--------------
AMERICAN CORPORATE RECEIPTS,
SERIES _____
AMERICAN CORPORATE RECEIPTS, INC.
UNDERWRITING AGREEMENT
________________, 1997
Rickel Securities, Inc.
45 Essex Street
Millburn, New Jersey 07041
Ladies and Gentlemen:
American Corporate Receipts, Inc., a New Jersey corporation (the
"Company"), proposes to cause $_____________ aggregate amount of American
Corporate Receipts, Series __ (the "Receipts" and sometimes referred to herein
as the "Securities") to be issued under the trust agreement specified in
Schedule I hereto (the "Trust Agreement") between the Company and the Trustee
identified in such Schedule (the "Trustee") to Rickel Securities, Inc. as
underwriter (the "Underwriter").
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of 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, File No. 33-_______, 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
Securities. 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 Securities is
hereinafter referred to as the "Basic Prospectus." The Basic Prospectus as
supplemented by the prospectus supplement specifically relating to the
Securities in the form first used to confirm sales of the Securities is
hereinafter referred to as the "Prospectus." 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 Securities Exchange Act of
1934, as amended (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.
<PAGE>
The Company hereby agrees with the Underwriter as follows:
1. The Company agrees to cause the Securities to be issued under the Trust
Agreement and to be sold to the Underwriter as hereinafter provided, and the
Underwriter, on the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees to purchase
from the Company the respective principal amount of Securities set forth
opposite such Underwriter's name in Schedule II hereto. The consideration to be
received by the Company in respect of the Underwriter's purchase of the
Securities shall be the bonds set forth in Schedule III hereto (the "Bonds").
2. The Company understands that the Underwriter intends (i) to make a
public offering of the Securities and (ii) initially to offer the Securities
upon the terms set forth in the Prospectus.
3. Transfer of the Bonds by the Underwriter to the Company as payment for
the Securities shall be made on the date and at the time and place set forth in
Schedule I hereto (or at such other time and place on the same or such other
date, not later than the fifth Business Day thereafter, as you and the Company
may agree in writing). Such transfer will be made upon delivery to you of the
Securities registered in your name and in such denominations as you shall
request not less than two full Business Days prior to the date of delivery, with
any transfer taxes payable in connection with transfer to the Underwriter duly
paid by the Company. As used herein, the term "Business Day" means any day other
than a day on which banks are permitted or required to be closed in New York
City. The time and date of such transfer and delivery with respect to the
Securities are referred to herein as the Closing Date.
4. The Company represents and warrants to the Underwriter that:
(a) The Registration Statement has been filed with the Commission in
the form heretofore delivered or to be delivered to the Underwriter 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 Company and the Trust are entitled to use Form S-3 under the
Securities Act to register the Securities, and the Registration Statement and
the Prospectus conform, and any amendments or supplements thereto will conform,
in all material respects to the requirements of the Securities Act and the rules
and regulations of the Commission thereunder, and the Registration Statement, as
of the applicable effective date, did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the Prospectus,
including any amendments or supplements thereto, as of the date of the
Prospectus Supplement and as of the Closing Date, does not and will not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that this
representation and warranty shall not apply to statements in, or omissions from,
the Prospectus made in reliance upon and in conformity with information
furnished in writing to the Company by the
-2-
<PAGE>
Underwriter expressly for use in 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 New
Jersey with corporate power and authority to enter into and perform its
obligations under this Agreement and the Trust Agreement.
(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
the rights to indemnification hereunder may be limited by public policy under
applicable securities laws.
(e) The Securities, when executed in accordance with the Trust
Agreement and delivered to you pursuant to this Agreement, will have been duly
and validly issued and outstanding and will be entitled to the benefits provided
by the Trust Agreement; on 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
Securities will conform in all material respects to the respective descriptions
thereof in the Prospectus.
(f) The issue and sale of the Securities, the compliance by the
Company with all applicable provisions of the Securities, 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 Securities or the consummation by the Company of the 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 Securities by the
Underwriter.
-3-
<PAGE>
(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 the Company 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 Bonds 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 Bonds 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 Bonds.
(i) Any taxes, fees and other governmental charges in connection
with the execution, delivery and performance of this Agreement, the Trust
Agreement and the Securities 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").
5. The Company covenants and agrees with the Underwriter as follows:
(a) to file the Prospectus in a form approved by you pursuant to
Rule 424 under the Securities Act not later than the Commission's close of
business on the second Business Day following the date of determination of the
offering price of the Securities;
(b) to deliver to the Underwriter and counsel for the Underwriter,
at the expense of the Company, a signed copy of the Registration Statement (as
originally filed) and each amendment thereto, in each case including exhibits
and, during the period mentioned in paragraph (e) below, as many copies of the
Prospectus (including all amendments and supplements thereto) as you may
reasonably request;
(c) from the date hereof and prior to the Closing Date, to furnish
to you a copy of any proposed amendment or supplement to the Registration
Statement or the Prospectus, for your review, and not to file any such proposed
amendment or supplement to which you reasonably object;
(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(e), 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 Securities, and during such same period, to advise you
promptly, and to confirm such advice in writing, (i) when any amendment to the
Registration Statement shall have become effective, (ii) of
-4-
<PAGE>
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 Securities 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 Securities a prospectus relating to the Securities is in the
opinion of counsel for the Underwriter required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall occur as a
result of which it is necessary to amend or supplement the Prospectus in order
to make the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if it is necessary to
amend or supplement the Prospectus to comply with law, forthwith to prepare and
furnish, at the expense of the Company, to the Underwriter and to the dealers
(whose names and addresses you will furnish to the Company) to which Securities
may have been sold by you and to any other dealers upon request, such amendments
or supplements to the Prospectus as may be necessary so that the statements in
the Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be misleading or
so that the Prospectus will comply with law;
(f) to endeavor to qualify the Securities for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall reasonably
request and to continue such qualification in effect so long as reasonably
required for distribution of the Securities 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 Securities for investment under the laws
of such jurisdictions as you may designate; PROVIDED that the Company shall not
be required to file a general consent to service of process in any jurisdiction;
(g) so long as the Securities are outstanding, to furnish to you
copies of all reports or other communications (financial or other) furnished to
holders or Securities, and copies of any reports and financial statements
furnished to or filed with the Commission or any national securities exchange;
and
(h) 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 Securities, 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
-5-
<PAGE>
supplements thereto), (iii) incurred in connection with the registration or
qualification and determination of eligibility for investment of the Securities
under the laws of such jurisdictions as the Underwriter may designate (including
fees of counsel for the Underwriter and their disbursements), (iv) related to
any filing with National Association of Securities Dealers, Inc., (v) in
connection with the printing (including word processing and duplication costs)
and delivery of this Agreement and the Trust Agreement and the furnishing to
Underwriter and dealers of copies of the Registration Statement and the
Prospectus, including mailing and shipping, as herein provided and (vi) payable
to rating agencies in connection with the rating of the Securities.
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 your satisfaction;
(c) the Underwriter shall have received on and as of the Closing
Date a certificate of an executive officer of the Company satisfactory to you to
the effect set forth in subsection (a) of this Section;
(d) McCarter & English, counsel for the Company, shall have
furnished to you their written opinion, dated the Closing Date, in form and
substance satisfactory to you;
(e) you shall have received on and as of the Closing Date a written
opinion of McCarter & English, tax counsel to the Company, in form and substance
satisfactory to you, with respect to the tax consequences of an investment in
the Securities;
(f) 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
-6-
<PAGE>
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 an omission or alleged omission to the
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
information relating to the Underwriter furnished to the Company in writing by
the Underwriter expressly for use therein; PROVIDED, that the foregoing
indemnity with respect to any preliminary prospectus shall not inure to the
benefit of the Underwriter (or to the benefit of any person controlling the
Underwriter) from whom the person asserting any such losses, claims, damages or
liabilities purchased securities 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 Securities to such person.
The Underwriter agrees to indemnify and hold harmless the Company, its
directors, its officers who sign the Registration Statement and each person who
controls the Company within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act, to the same extent as the foregoing indemnity
from the Company to the Underwriter, but only with reference to information
relating to the Underwriter furnished to the Company in writing by the
Underwriter expressly for use in the Registration Statement, the Prospectus, any
amendment or supplement thereto, or any preliminary prospectus.
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
-7-
<PAGE>
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 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 Securities 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 Fair market value of the Bonds (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
Securities. 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 7, in no event shall the
Underwriter be required to contribute any amount in excess of the amount by
which the total
-8-
<PAGE>
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages that the
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
The indemnity and contribution agreements contained in this Section 7 are
in addition to any liability which the Indemnifying Persons may otherwise have
to the Indemnified Persons referred to above.
The indemnity and contribution agreements contained in this Section 7 and
the representations and warranties of the Company set forth in this Agreement
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
the Underwriter or any person controlling the Underwriter or by or on behalf of
the Company, its officers or directors or any other person controlling the
Company and (iii) acceptance of and transfer of the Bonds for any of the
Securities.
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 suspended or materially limited on
or by, as the case may be, any of the New York Stock Exchange, the American
Exchange, the National Association of Securities Dealers, Inc., the Chicago
Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board
of Trade, (ii) a general moratorium on commercial banking activities in New York
shall have been declared by either Federal or New York State authorities or
(iii) 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 Securities 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, of 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 the Underwriter
in connection with this Agreement or the offering of Securities.
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 Securities
from the Underwriter shall be deemed to be a successor by reason merely of such
purchase.
-9-
<PAGE>
11. All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Underwriter shall be given at the
address set forth in Schedule II hereto. Notices to the Company shall be given
to it at American Corporate Receipts, Inc., c/o Rickel Securities, Inc., 45
Essex Street, Millburn, New Jersey 07041, Attention: John Sabo, President.
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 Jersey, without giving effect to the conflicts of laws
provisions thereof.
Very truly yours,
AMERICAN CORPORATE RECEIPTS, INC.
By:_____________
Name:
Title:
Accepted: ________, 1997
Rickel Securities, Inc.
By:_______________
Name:
Title:
-10-
<PAGE>
SCHEDULE I
Underwriting Agreement
Dated: _____________
Aggregate Principal Amount: $____________
Trust Agreement: Trust Agreement dated as of__________
between the Company and__________,as Trustee.
Maturity:
Interest Rate:
Interest Payment Dates:
Closing Date and Time of
Delivery:
Closing Location:
I-1
<PAGE>
SCHEDULE II
Principal Amount
of Securities
to be Purchased
---------------
Underwriter
- -----------
Rickel Securities, Inc......... $
Total................. $
Address for Notices to
Underwriter:
II-1
<PAGE>
SCHEDULE III
[DESCRIPTION OF BONDS]
III-1
EXHIBIT 3.1
CERTIFICATE OF INCORPORATION
OF
AMERICAN CORPORATE RECEIPTS, INC.
TO: The Secretary of State
State of New Jersey
THE UNDERSIGNED, of the age of eighteen or over, for the purpose of forming
a corporation under the New Jersey Business Corporation Act, title 14A,
Corporations, General, of the New Jersey Statutes, does hereby execute the
following Certificate of Incorporation:
ARTICLE I
CORPORATE NAME
The name of the Corporation is AMERICAN CORPORATE RECEIPTS, INC.
ARTICLE II
REGISTERED OFFICE AND REGISTERED AGENT
The address of the Corporation's current registered office is 45 Essex
Street, Millburn, New Jersey 07041. The name of its current registered agent at
that address is Susan P. Bowen.
ARTICLE III
CORPORATE PURPOSE
The purposes for which the Corporation is organized is to engage in any
activities for which corporations may be organized under the New Jersey Business
Corporation Act, title 14A, Corporations, General, of the New Jersey statutes.
ARTICLE IV
CAPITAL STOCK
The Corporation is authorized to issue 1,000 shares of common stock at no
par value.
<PAGE>
ARTICLE V
BOARD OF DIRECTORS AND NUMBER OF DIRECTORS
The number of directors shall be governed by the By-Laws of the
Corporation. The number of directors constituting the initial Board of Directors
shall be one. The name and address of the initial Board of Directors is as
follows:
NAME ADDRESS
John C. Sabo c/o Rickel Securities, Inc.
45 Essex Street
Millburn, New Jersey 07041
ARTICLE VI
LIMITATION OF LIABILITY
Subject to the following, a director or officer shall not be personally
liable to the Corporation or its shareholders for any breach of any duty owed to
the Corporation or its shareholders. The preceding sentence shall not relieve a
director or officer from liability for any breach of duty based upon an act or
omission (i) in breach of such person's duty of loyalty to the Corporation or
its shareholders, (ii) not in good faith or involving a knowing violation of law
or (iii) resulting in receipt by such person of an improper personal benefit. If
the New Jersey Business Corporation Act is amended to authorize a corporate
action further eliminating or limiting the personal liability of directors or
officers, then the liability of a director or officer or both of the Corporation
shall be eliminated or limited to the fullest extent permitted by the New Jersey
Business Corporation Act as so amended. No amendment to or repeal of this
Certificate of Incorporation shall apply to or have any adverse effect on the
liability or alleged liability of any director or officer for or with respect to
any acts or omissions of such director or officer occurring prior to such
amendment or repeal.
ARTICLE VII
INDEMNIFICATION OF CORPORATE AGENTS
Every Corporate Agent of the Corporation who was or is made a party or is
threatened to be made a party to or is involved in any proceeding by reason of
his or her service as a Corporate Agent, whether or not the basis of such
proceeding is an alleged action in an official capacity as a director, officer,
employee or agent or in any other capacity (including service with respect to an
employee benefit plan), shall be indemnified and held harmless by the
Corporation to the fullest extent permitted by the New Jersey Business
Corporation Act, as the same exists today or may hereafter be amended (but, in
the case of any such amendment, only to the extent that such amendment permits
the Corporation to provide broader indemnification rights than the New Jersey
Business Corporation Act permitted the Corporation to provide prior to such
amendment), against all Expenses and Liabilities (including without limitation
ERISA excise taxes or penalties). The rights provided herein are intended to
extend to all Proceedings (including,
-2-
<PAGE>
without limitation, Proceedings by or in the right of the Corporation), and the
indemnification against Expenses and Liabilities in connection with Proceedings
by or in the right of the Corporation is specifically provided for to the
fullest extent permitted by law. The rights to indemnification provided
hereunder shall also include the right to advancement of expenses to the fullest
extent permitted by law. The rights provided hereunder shall not exclude any
other rights to which a Corporate Agent may be entitled under the By-Laws of the
Corporation or under any agreement, vote of shareholders or otherwise.
All terms not defined hereby are used in accordance with the definitions
contained in the New Jersey Business Corporation Act at N.J.S.A. ss.14A:3-5(1).
ARTICLE VIII
NAME AND ADDRESS OF INCORPORATOR
The name and address of the incorporator shall be David F. Broderick, Esq.,
c/o McCarter & English, Four Gateway Center, 100 Mulberry Street, Twelfth Floor,
Newark, New Jersey 07101-0652.
ARTICLE IX
DATE OF INCORPORATION
The effective date of this Certificate of Incorporation is the date of its
filing with the Secretary of State.
IN WITNESS WHEREOF, the undersigned, the incorporator of the above named
Corporation, has hereunto signed this Certificate of Incorporation on the 27th
day of October, 1997.
/S/ DAVID F. BRODERICK
--------------------------------------
DAVID F. BRODERICK, ESQ.
-3-
EXHIBIT 3.2
BY-LAWS
OF
AMERICAN CORPORATE RECEIPTS, INC.
Section 1. LAW, CERTIFICATE OF INCORPORATION
AND BY-LAWS
1.1. These by-laws are subject to the Certificate of Incorporation of the
corporation. In these By-laws, references to law, the Certificate of
Incorporation and By-laws mean the law, the provisions of the Certificate of
Incorporation and the By-laws as from time to time in effect.
Section 2. SHAREHOLDERS
2.1. ANNUAL MEETING. The annual meeting of shareholders shall be held at
such date and time as shall be designated from time to time by the board of
directors and stated in the notice of the meeting, at which they shall elect a
board of directors and transact such other business as may be required by law or
these by-laws or as may properly come before the meeting.
2.2. SPECIAL MEETINGS. A special meeting of the shareholders may be called
at any time by the chairman of the board, if any, the president or the board of
directors. A special meeting of the shareholders shall be called by the
secretary, or in the case of the death, absence, incapacity or refusal of the
secretary, by an assistant secretary or some other officer, upon application of
a majority of the directors. Any such application shall state the purpose or
purposes of the proposed meeting. Any such call shall state the place, date,
hour, and purposes of the meeting.
2.3. PLACE OF MEETING. All meetings of the shareholders for the election of
directors or for any other purpose shall be held at such place within or without
the State of New Jersey as may be determined from time to time by the board of
directors. Any adjourned session of any meeting of the shareholders shall be
held at the place designated in the vote of adjournment.
2.4. NOTICE OF MEETINGS. Except as otherwise provided by law, a written
notice of each meeting of shareholders stating the place, day and hour thereof
and, in the case of a special meeting, the purposes for which the meeting is
called, shall be given not less than ten nor more than sixty days before the
meeting, to each shareholder entitled to vote thereat, and to each shareholder
who, by law, by the Certificate of Incorporation or by these By-laws, is
entitled to notice, by leaving such notice with the shareholder or at the
shareholder's residence or usual place of business, or by depositing it in the
United States mail, postage prepaid, and addressed to such shareholder at such
shareholder's address as it appears in the records of the corporation.
<PAGE>
Such notice shall be given by the secretary, or by an officer or person
designated by the board of directors, or in the case of a special meeting by the
officer calling the meeting. As to any adjourned session of any meeting of
shareholders, notice of the adjourned meeting need not be given if the time and
place thereof are announced at the meeting at which the adjournment was taken
except that if after the adjournment a new record date is set for the adjourned
session, notice of any such adjourned session of the meeting shall be given in
the manner heretofore described. No notice of any meeting of shareholders or any
adjourned session thereof need be given to a shareholder if a written waiver of
notice, executed before or after the meeting or such adjourned session by such
shareholder, in person or by proxy, is filed with the records of the meeting or
if the shareholder attends such meeting, in person or by proxy, without
objecting at the beginning of the meeting to the transaction of any business
because the meeting is not lawfully called or convened. Neither the business to
be transacted at, nor the purpose of, any meeting of the shareholders or any
adjourned session thereof need be specified in any written waiver of notice.
2.5. QUORUM OF SHAREHOLDERS. At any meeting of the shareholders a quorum as
to any matter shall consist of a majority of the votes entitled to be cast on
the matter, except where a larger quorum is required by law, by the Certificate
of Incorporation or by these By-laws. Any meeting may be adjourned from time to
time by a majority of the votes properly cast upon the question, whether or not
a quorum is present. If a quorum is present at an original meeting, a quorum
need not be present at an adjourned session of that meeting. Shares of its own
stock belonging to the corporation or to another corporation, if a majority of
the shares entitled to vote in the election of directors of such other
corporation is held, directly or indirectly, by the corporation, shall neither
be entitled to vote nor be counted for quorum purposes; provided, however, that
the foregoing shall not limit the right of any corporation to vote stock,
including but not limited to its own stock, held by it in a fiduciary capacity.
2.6. ACTION BY VOTE. When a quorum is present at any meeting, a plurality
of the votes properly cast for election to any office shall elect to such office
and a majority of the votes properly cast upon any question other than an
election to an office shall decide the question, except when a larger vote is
required by law, by the Certificate of Incorporation or by these By-laws. No
ballot shall be required for any election unless requested by a shareholder
present or represented at the meeting and entitled to vote in the election.
2.7. ACTION WITHOUT MEETINGS. Unless otherwise provided in the Certificate
of Incorporation or by applicable law, any action required or permitted to be
taken by shareholders for or in connection with any corporate action may be
taken without a meeting, without prior notice and without a vote, if a consent
in writing, setting forth the action so taken, shall be signed by all of the
holders of outstanding stock entitled to vote thereon. The writing or writings
comprising such unanimous consent shall be filed with the records of the
meetings of shareholders.
Unless otherwise provided in the Certificate of Incorporation or by
applicable law, any action required or permitted to be taken by shareholders for
or in connection with any corporate action may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of that number
-2-
<PAGE>
of shares of outstanding stock which would have been entitled to cast the
minimum number of votes necessary to approve the action taken at a meeting of
shareholders at which all of the shareholders entitled to vote on the action
were present and voting, and the provisions of N.J.S.A. ss.14A:5-6(2) are
complied with.
2.8. PROXY REPRESENTATION. Every shareholder may authorize another person
or persons to act for the shareholder by proxy in all matters in which a
shareholder is entitled to participate, whether by waiving notice of any
meeting, objecting to or voting or participating at a meeting, or expressing
consent or dissent without a meeting. Every proxy must be signed by the
shareholder or by the shareholder's attorney-in-fact. No proxy shall be voted or
acted upon after eleven months from its date unless such proxy provides for a
longer period. A duly executed proxy shall be irrevocable if it states that it
is irrevocable and, if, and only as long as, it is coupled with an interest
sufficient in law to support an irrevocable power. A proxy may be made
irrevocable regardless of whether the interest with which it is coupled is an
interest in the stock itself or an interest in the corporation generally. The
authorization of a proxy may but need not be limited to specified action,
provided, however, that if a proxy limits its authorization to a meeting or
meetings of shareholders, unless otherwise specifically provided such proxy
shall entitle the holder thereof to vote at any adjourned session but shall not
be valid after the final adjournment thereof.
2.9. INSPECTORS. The directors or the person presiding at the meeting may,
but need not, appoint one or more inspectors of election and any substitute
inspectors to act at the meeting or any adjournment thereof. Each inspector,
before entering upon the discharge of the inspector's duties, shall take and
sign an oath faithfully to execute the duties of inspector at such meeting with
strict impartiality and according to the best of the inspector's ability. The
inspectors, if any, shall determine the number of shares of stock outstanding
and the voting power of each, the shares of stock represented at the meeting,
the existence of a quorum, the validity and effect of proxies, and shall receive
votes, ballots or consents, hear and determine all challenges and questions
arising in connection with the right to vote, count and tabulate all votes,
ballots or consents, determine the result, and do such acts as are proper to
conduct the election or vote with fairness to all shareholders. On request of
the person presiding at the meeting, the inspectors shall make a report in
writing of any challenge, question or matter determined by them and execute a
certificate of any fact found by them.
2.10. LIST OF SHAREHOLDERS. The secretary shall prepare and make, at least
ten days before every meeting of shareholders, a complete list of the
shareholders entitled to vote at such meeting, arranged in alphabetical order
and showing the address of each shareholder and the number of shares registered
in each shareholder's name. The stock ledger shall be PRIMA FACIE evidence as to
who are shareholders entitled to examine such list or to vote in person or by
proxy at such meeting.
Section 3. BOARD OF DIRECTORS
3.1. NUMBER. The number of directors which shall constitute the whole board
shall not be less than one nor more than twenty-five in number. Within the
foregoing limits, the number of directors may be increased at any time or from
time to time by the directors by vote of
-3-
<PAGE>
a majority of the directors then in office. The number of directors may be
decreased to any number permitted by the foregoing at any time either by the
shareholders or by the directors by vote of a majority of the directors then in
office, but only to eliminate vacancies existing by reason of the death,
resignation or removal of one or more directors. Directors need not be
shareholders.
3.2. TENURE. Except as otherwise provided by law, by the Certificate of
Incorporation or by these By-laws, each director shall hold office until the
next annual meeting and until the director's successor is elected and qualified,
or until the director sooner dies, resigns, is removed or becomes disqualified.
3.3. POWERS. The business and affairs of the corporation shall be managed
by or under the direction of the board of directors who shall have and may
exercise all the powers of the corporation and do all such lawful acts and
things as are not by law, the Certificate of Incorporation or these By-laws
directed or required to be exercised or done by the shareholders.
3.4. VACANCIES. Vacancies and any newly created directorships resulting
from any increase in the number of directors shall be filled by the affirmative
vote of a majority of the remaining directors even though less than a quorum of
the board. The directors shall have and may exercise all their powers
notwithstanding the existence of one or more vacancies in their number, subject
to any requirements of law or of the Certificate of Incorporation or of these
By-laws as to the number of directors required for a quorum or for any vote or
other actions.
3.5. COMMITTEES. The board of directors may, by vote of a majority of the
whole board, (a) designate, change the membership of or terminate the existence
of any committee or committees, each committee to consist of one or more of the
directors; (b) designate one or more directors as alternate members of any such
committee who may replace any absent or disqualified member at any meeting of
the committee; and (c) determine the extent to which each such committee shall
have and may exercise the powers of the board of directors in the management of
the business and affairs of the corporation; excepting, however, such powers
which by law, by the Certificate of Incorporation or by these By-laws they are
prohibited from so delegating. In the absence or disqualification of any member
of such committee and the member's alternate, if any, the member or members
thereof present at any meeting and not disqualified from voting, whether or not
constituting a quorum, may unanimously appoint another member of the board of
directors to act at the meeting in the place of any such absent or disqualified
member. Except as the board of directors may otherwise determine, any committee
may make rules for the conduct of its business, but unless otherwise provided by
the board or such rules, its business shall be conducted as nearly as may be in
the same manner as is provided by these By-laws for the conduct of business by
the board of directors. Each committee shall keep regular minutes of its
meetings and report the same to the board of directors upon request.
3.6. REGULAR MEETINGS. Regular meetings of the board of directors may be
held without call or notice at such places within or without the State of New
Jersey and at such times as the board may from time to time determine, provided
that notice of the first regular meeting following any such determination shall
be given to absent directors. A regular meeting of the
-4-
<PAGE>
directors may be held without call or notice immediately after and at the same
place as the annual meeting of shareholders.
3.7. SPECIAL MEETINGS. Special meetings of the board of directors may be
held at any time and at any place within or without the State of New Jersey
designated in the notice of the meeting, when called by the chairman of the
board, if any, the president, or by one-third or more in number of the
directors, reasonable notice thereof being given to each director by the
secretary or by the chairman of the board, if any, the president or any one of
the directors calling the meeting.
3.8. NOTICE. It shall be reasonable and sufficient notice to a director to
send notice by mail at least forty-eight hours or by telegram at least
twenty-four hours before the meeting addressed to the director at the director's
usual or last known business or residence address or to give notice to the
director in person or by telephone at least twenty-four hours before the
meeting. Notice of a meeting need not be given to any director if a written
waiver of notice, executed by the director before or after the meeting, is filed
with the records of the meeting, or to any director who attends the meeting
without protesting prior thereto or at its commencement the lack of notice to
such director. Neither notice of a meeting nor a waiver of a notice need specify
the purposes of the meeting.
3.9. QUORUM. Except as may be otherwise provided by law, by the Certificate
of Incorporation or by these By-laws, at any meeting of the directors a majority
of the directors then in office shall constitute a quorum; a quorum shall not in
any case be less than one-third of the total number of directors as determined
by Section 3.1. Any meeting may be adjourned from time to time by a majority of
the votes cast upon the question, whether or not a quorum is present, and the
meeting may be held as adjourned without further notice.
3.10. ACTION BY VOTE. Except as may be otherwise provided by law, by the
Certificate of Incorporation or by these By-laws, when a quorum is present at
any meeting the vote of a majority of the directors present shall be the act of
the board of directors.
3.11. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the board of directors or a committee thereof may be
taken without a meeting if all the members of the board or of such committee, as
the case may be, consent thereto in writing, and such writing or writings are
filed with the records of the meetings of the board or of such committee. Such
consent shall be treated for all purposes as the act of the board or of such
committee, as the case may be.
3.12. PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE. Members of the
board of directors, or any committee designated by such board, may participate
in a meeting of such board or committee by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other or by any other means permitted by law. Such
participation shall constitute presence in person at such meeting.
-5-
<PAGE>
3.13. COMPENSATION. In the discretion of the board of directors, each
director may be paid such fees for the director's services as director and be
reimbursed for reasonable expenses incurred in the performance of duties as
director as the board of directors from time to time may determine. Nothing
contained in this section shall be construed to preclude any director from
serving the corporation in any other capacity and receiving reasonable
compensation therefor.
3.14. INTERESTED DIRECTORS AND OFFICERS.
(a) No contract or transaction between the corporation and one or more of
its directors or officers, or between the corporation and any other corporation,
partnership, association, or other organization in which one or more of the
corporation's directors or officers are directors or officers, or have a
financial interest, shall be void or voidable solely for this reason, or solely
because the director or officer is present at or participates in the meeting of
the board or committee thereof which authorizes the contract or transaction, or
solely because the director's or officer's votes are counted for such purpose,
if any one of the following is true:
(1) The material facts as to the director's or officer's
relationship or interest and as to the contract or transaction are disclosed or
are known to the board of directors or the committee, and the board or committee
in good faith authorizes the contract or transaction by the affirmative votes of
a majority of the disinterested directors, even though the disinterested
directors be less than a quorum; or
(2) The material facts as to the director's or officer's
relationship or interest and as to the contract or transaction are disclosed or
are known to the shareholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the shareholders;
or
(3) The contract or transaction is fair as to the corporation as of
the time it is authorized, approved or ratified, by the board of directors, a
committee thereof, or the shareholders.
(b) Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the board of directors or of a committee
which authorizes the contract or transaction.
Section 4. OFFICERS AND AGENTS
4.1. ENUMERATION; QUALIFICATION. The officers of the corporation shall be a
president, a treasurer, a secretary and such other officers, if any, as the
board of directors from time to time may in its discretion elect or appoint
including without limitation a chairman of the board, one or more vice
presidents and a controller. The corporation may also have such agents, if any,
as the board of directors from time to time may in its discretion choose. Any
officer may be but none need be a director or shareholder. Any two or more
offices may be held by the same person. Any officer may be required by the board
of directors to secure the faithful performance
-6-
<PAGE>
of the officer's duties to the corporation by giving bond in such amount and
with sureties or otherwise as the board of directors may determine.
4.2. POWERS. Subject to law, to the Certificate of Incorporation and to the
other provisions of these By-laws, each officer shall have, in addition to the
duties and powers herein set forth, such duties and powers as are commonly
incident to the officer's office and such additional duties and powers as the
board of directors may from time to time designate.
4.3. ELECTION. The officers may be elected by the board of directors at
their first meeting following the annual meeting of the shareholders or at any
other time. At any time or from time to time the directors may delegate to any
officer their power to elect or appoint any other officer or any agents.
4.4. TENURE. Each officer shall hold office until the first meeting of the
board of directors following the next annual meeting of the shareholders and
until the officer's respective successor is chosen and qualified unless a
shorter period shall have been specified by the terms of the officer's election
or appointment, or in each case until the officer sooner dies, resigns, is
removed or becomes disqualified. Each agent shall retain authority at the
pleasure of the directors, or the officer by whom the agent was appointed or by
the officer who then holds agent appointive power.
4.5. CHAIRMAN OF THE BOARD OF DIRECTORS PRESIDENT AND VICE PRESIDENT. The
chairman of the board, if any, shall have such duties and powers as shall be
designated from time to time by the board of directors. Unless the board of
directors otherwise specifies, the chairman of the board, or if there is none
the chief executive officer, shall preside, or designate the person who shall
preside, at all meetings of the shareholders and of the board of directors.
Unless the board of directors otherwise specifies, the chief executive
officer or, if there is no chief executive officer, the president, shall be the
chief executive officer and shall have direct charge of all business operations
of the corporation and, subject to the control of the directors, shall have
general charge and supervision of the business of the corporation.
Any vice presidents shall have such duties and powers as shall be set forth
in these By-laws or as shall be designated from time to time by the board of
directors or by the president.
4.6. TREASURER AND ASSISTANT TREASURERS. The treasurer shall be the chief
financial officer of the corporation and shall be in charge of its funds and
valuable papers, and shall have such other duties and powers as may be
designated from time to time by the board of directors or by the president. If
no controller is elected, the treasurer shall also have the duties and powers of
the controller.
Any assistant treasurers shall have such duties and powers as shall be
designated from time to time by the board of directors, the president or the
treasurer.
-7-
<PAGE>
4.7. CONTROLLER AND ASSISTANT CONTROLLERS. If a controller is elected, the
controller shall be the chief accounting officer of the corporation and shall be
in charge of its books of account and accounting records, and of its accounting
procedures. The controller shall have such other duties and powers as may be
designated from time to time by the board of directors, the president or the
treasurer.
Any assistant controller shall have such duties and powers as shall be
designated from time to time by the board of directors, the president, the
treasurer or the controller.
4.8. SECRETARY AND ASSISTANT SECRETARIES. The secretary shall record all
proceedings of the shareholders, of the board of directors and of committees of
the board of directors in a book or series of books to be kept therefor and
shall file therein all actions by written consent of shareholders or directors.
In the absence of the secretary from any meeting, an assistant secretary, or if
there be none or the assistant secretary is absent, a temporary secretary chosen
at the meeting, shall record the proceedings thereof. Unless a transfer agent
has been appointed the secretary shall keep or cause to be kept the stock and
transfer records of the corporation, which shall contain the names and record
addresses of all shareholders and the number of shares registered in the name of
each shareholder. The secretary shall have such other duties and powers as may
from time to time be designated by the board of directors or the president.
Any assistant secretaries shall have such duties and powers as shall be
designated from time to time by the board of directors, the president or the
secretary.
Section 5. RESIGNATIONS AND REMOVALS
5.1. Any director or officer may resign at any time by delivering the
director's or officer's resignation in writing to the chairman of the board, if
any, the president, or the secretary or to a meeting of the board of directors.
Such resignation shall be effective upon receipt unless specified to be
effective at some other time, and without in either case the necessity of its
being accepted unless the resignation shall so state. A director (including
persons elected by directors to fill vacancies in the board) may be removed from
office with or without cause by the vote of the holders of a majority of the
shares issued and outstanding and entitled to vote in the election of directors.
The board of directors may at any time remove any officer either with or without
cause. The board of directors may at any time terminate or modify the authority
of any agent. No director or officer resigning and (except where a right to
receive compensation shall be expressly provided in a duly authorized written
agreement with the corporation) no director or officer removed shall have any
right to any compensation as such director or officer for any period following
the director's or officer's resignation or removal, or any right to damages on
account of such removal, whether the director's or officer's compensation be by
the month or by the year or otherwise; unless, in the case of a resignation, the
directors, or, in the case of removal, the body acting on the removal, shall in
their or its discretion provide for compensation.
-8-
<PAGE>
Section 6. VACANCIES
6.1. If the office of the president or the treasurer or the secretary
becomes vacant, the directors may elect a successor by vote of a majority of the
directors then in office. If the office of any other officer becomes vacant, any
person or body empowered to elect or appoint that officer may choose a
successor. Each such successor shall hold office for the unexpired term, and in
the case of the president, the treasurer and the secretary until a successor is
chosen and qualified or in each case until such successor sooner dies, resigns,
is removed or becomes disqualified. Any vacancy of a directorship shall be
filled as specified in Section 3.4 of these By-laws.
Section 7. CAPITAL STOCK
7.1. STOCK CERTIFICATES. Each shareholder shall be entitled to a
certificate stating the number and the class and the designation of the series,
if any, of the shares held by the shareholder, in such form as shall, in
conformity to law, the Certificate of Incorporation and the By-laws, be
prescribed from time to time by the board of directors. Such certificate shall
be signed by the chairman or vice chairman of the board, if any, or the
president or a vice president and may be countersigned by the treasurer or an
assistant treasurer or by the secretary or an assistant secretary. Any of or all
the signatures on the certificate may be a facsimile. In case an officer,
transfer agent, or registrar who has signed or whose facsimile signature has
been placed on such certificate shall have ceased to be such officer, transfer
agent, or registrar before such certificate is issued, it may be issued by the
corporation with the same effect as if the person were such officer, transfer
agent, or registrar at the time of its issue.
7.2. LOSS OF CERTIFICATES. In the case of the alleged theft, loss,
destruction or mutilation of a certificate of stock, a duplicate certificate may
be issued in place thereof, upon such terms, including receipt of a bond
sufficient to indemnify the corporation against any claim on account thereof, as
the board of directors may prescribe.
Section 8. TRANSFER OF SHARES OF STOCK
8.1. TRANSFER ON BOOKS. Subject to the restrictions, if any, stated or
noted on the stock certificate, shares of stock may be transferred on the books
of the corporation by the surrender to the corporation or its transfer agent of
the certificate therefor properly endorsed or accompanied by a written
assignment and power of attorney properly executed, with necessary transfer
stamps affixed, and with such proof of the authenticity of signature as the
board of directors or the transfer agent of the corporation may reasonably
require. Except as may be otherwise required by law, by the Certificate of
Incorporation or by these By-laws, the corporation shall be entitled to treat
the record holder of stock as shown on its books as the owner of such stock for
all purposes, including the payment of dividends and the right to receive notice
and to vote or to give any consent with respect thereto and to be held liable
for such calls and assessments, if any, as may lawfully be made thereon,
regardless of any transfer, pledge or other disposition of such stock until the
shares have been properly transferred on the books of the corporation.
-9-
<PAGE>
It shall be the duty of each shareholder to notify the corporation of the
shareholder's post office address.
8.2. RECORD DATE AND CLOSING TRANSFER BOOKS. In order that the corporation
may determine the shareholders entitled to notice of or to vote at any meeting
of shareholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the board of directors may fix, in
advance, a record date, which shall not be more than sixty nor less than ten
days (or such longer period as may be required by law) before the date of such
meeting, nor more than sixty days prior to any other action.
If no record date is fixed:
(a) The record date for determining shareholders entitled to notice of or
to vote at a meeting of shareholders shall be at the close of business on the
day next preceding the day on which notice is given, or, if notice is waived, at
the close of business on the day next preceding the day on which the meeting is
held.
(b) The record date for determining shareholders entitled to express
consent to corporate action in writing without a meeting, when no prior action
by the board of directors is necessary, shall be the day on which the first
written consent is expressed.
(c) The record date for determining shareholders for any other purpose
shall be at the close of business on the day on which the board of directors
adopts the resolution relating thereto.
A determination of shareholders of record entitled to notice of or to vote
at a meeting of shareholders shall apply to any adjournment of the meeting;
provided, however, that the board of directors may fix a new record date for the
adjourned meeting.
Section 9. CORPORATE SEAL
9.1. Subject to alteration by the directors, the seal of the corporation
shall consist of a flat-faced circular die with the word "New Jersey" and the
name of the corporation cut or engraved thereon, together with such other words,
dates or images as may be approved from time to time by the directors.
Section 10. EXECUTION OF PAPERS
10.1. Except as the board of directors may generally or in particular cases
authorize the execution thereof in some other manner, all deeds, leases,
transfers, contracts, bonds, notes, checks, drafts or other obligations made,
accepted or endorsed by the corporation shall be signed by the chairman of the
board, if any, the president, a vice president or the treasurer.
-10-
<PAGE>
Section 11. FISCAL YEAR
11.1. The fiscal year of the corporation shall be determined from time to
time by the board of directors.
Section 12. INDEMNIFICATION
12.1. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The corporation shall, to
the fullest extent permitted by applicable law, indemnify any person (and the
heirs, executors and administrators thereof) who was or is made, or threatened
to be made, a party to an action, suit or proceeding, whether civil, criminal,
administrative or investigative, whether involving any actual or alleged breach
of duty, neglect or error, any accountability, or any actual or alleged
misstatement, misleading statement or other act or omission and whether brought
or threatened in any court or administrative or legislative body or agency,
including an action by or in the right of the corporation to procure a judgment
in its favor and an action by or in the right of any other corporation of any
type or kind, domestic or foreign, or any partnership, joint venture, trust,
employee benefit plan or other enterprise, which any director or officer of the
corporation is serving or has served in any capacity at the request of the
corporation, by reason of the fact that the person, the person's testator or
intestate is or was a director or officer of the corporation, or is serving or
has served such other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise in any capacity, against judgments, fines,
amounts paid in settlement, and costs, charges and expenses, including
attorneys' fees, incurred therein or in any appeal thereof.
12.2. INDEMNIFICATION OF OTHERS. The corporation shall indemnify other
persons and reimburse the expenses thereof, to the extent required by applicable
law, and may indemnify any other person to whom the corporation is permitted to
provide indemnification or the advancement of expenses, whether pursuant to
rights granted pursuant to, or provided by, the New Jersey Business Corporation
Act or otherwise.
12.3. ADVANCES OR REIMBURSEMENT OF EXPENSES. The corporation shall, from
time to time, reimburse or advance to any person referred to in Section 12.1 the
funds necessary for payment of expenses, including attorneys' fees, incurred in
connection with any action, suit or proceeding referred to in Section 12.1, upon
receipt of a written undertaking by or on behalf of such person to repay such
amount(s) if a judgment or other final adjudication adverse to the director or
officer establishes that the director's or officer's acts or omissions (i)
constitute a breach of the director's or officer's duty of loyalty to the
corporation or its shareholders, (ii) were not in good faith, (iii) involved a
knowing violation of law, (iv) resulted in the director or officer receiving an
improper personal benefit, or (v) were otherwise of such a character that New
Jersey law would require that such amount(s) be repaid.
12.4. SERVICE OF CERTAIN ENTITIES DEEMED REQUESTED. Any director or officer
of the corporation serving (i) another corporation, of which a majority of the
shares entitled to vote in the election of its directors is held by the
corporation, or (ii) any employee benefit plan of the corporation or any
corporation referred in clause (i), in any capacity shall be deemed to be doing
so at the request of the Corporation.
-11-
<PAGE>
12.5. INTERPRETATION. Any person entitled to be indemnified or to the
reimbursement or advancement of expenses as a matter of right pursuant to this
Article may elect to have the right to indemnification (or advancement of
expense) interpreted on the basis of the applicable law in effect at the time of
the occurrence of the event or events giving rise to the action, suit or
proceeding, to the extent permitted by applicable law, or on the basis of the
applicable law in effect at the time indemnification is sought.
12.6. INDEMNIFICATION RIGHT. The right to be indemnified or to the
reimbursement or advancement of expenses pursuant to this Article (i) is a
contract right pursuant to which the person entitled thereto may bring suit as
if the provisions hereof were set forth in a separate written contract between
the corporation and the director or officer, (ii) is intended to be retroactive
and shall be available with respect to events occurring prior to the adoption
hereof, (iii) shall continue to exist after any elimination of or amendment to
this Article 12 hereof with respect to events occurring prior thereto, and (iv)
and shall not be deemed exclusive of any other rights to which any person
claiming indemnification hereunder may be entitled.
12.7. INDEMNIFICATION CLAIMS. If a request to be indemnified or for the
reimbursement or advancement of expenses pursuant hereto is not paid in full by
the corporation within thirty days after a written claim has been received by
the corporation, the claimant may at any time thereafter bring suit against the
corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall be entitled also to be paid the expenses of
prosecuting such claim. Neither the failure of the corporation (including its
Board of Directors, independent legal counsel, or its shareholders) to have made
a determination prior to the commencement of such action that indemnification of
or reimbursement or advancement of expenses to the claimant is proper in the
circumstances, nor an actual determination by the corporation (including its
Board of Directors, independent legal counsel, or its shareholders) that the
claimant is not entitled to indemnification or to the reimbursement or
advancement of expenses, shall be a defense to the action or create a
presumption that the claimant is not so entitled.
Section 13. AMENDMENTS
13.1. These By-laws may be adopted, amended or repealed by vote of a
majority of the directors then in office or by vote of a majority of the stock
outstanding and entitled to vote. Any by-law, whether adopted, amended or
repealed by the shareholders or directors, may be amended or reinstated by the
shareholders or the directors.
EXHIBIT 4.1
SERIES TRUST AGREEMENT
between
AMERICAN CORPORATE RECEIPTS, INC.,
as Depositor,
and
-------------------,
as Trustee
for American Corporate Receipts, Series _____
<PAGE>
AMERICAN CORPORATE RECEIPTS, INC.
AMERICAN CORPORATE RECEIPTS, SERIES _____,
SERIES TRUST AGREEMENT
This Series Trust Agreement (this "Series Trust Agreement"), dated
______________ __, ____, between American Corporate Receipts, Inc., as
Depositor, and ___________________, as Trustee, for $_________ American
Corporate Receipts, Series _____ (the "Receipts"), incorporates by reference the
Standard Terms and Provisions of Trust Agreement (the "Standard Terms") attached
as Exhibit B hereto, and is governed by the Standard Terms as fully as if set
forth herein at length. All capitalized terms not defined herein shall have the
same meaning as set forth in the Standard Terms.
W I T N E S S E T H:
SECTION 1. A Trust is hereby created under the laws of the State of New
York and in a manner specified in Section 2.01 of the Standard Terms for the
benefit of Holders of Receipts. The assets of the Trust shall consist of the
securities (referred to herein and in the Standard Terms as the "Bonds")
described in Exhibit A hereto, all distributions thereon after the date hereof,
and all rights, title and interest in and to such distributions.
SECTION 2. The name of the Trust is American Corporate Receipts, Series
____.
SECTION 3. The Receipts shall be issued in the classes and amounts set
forth in Exhibit A hereto; shall have the standard terms set forth in the
Standard Terms; and shall have the nonstandard terms set forth in Exhibit A
hereto. Receipts of any class of this series shall be issued in substantially
the form of Receipt set forth for such class in Appendix A to the Standard
Terms. The Receipts shall be limited obligations of the Trust payable solely
from payments received by the Trustee attributable to the Bonds.
SECTION 4. The Depositor hereby authorizes the Trustee to execute and
deliver a letter of representations in the form customarily provided to DTC from
the Trustee and the Depositor dated the date of delivery of the Receipts (the
"Letter of Representations").
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Series Trust
Agreement to be executed by their respective duly authorized officers as of the
date first above written.
AMERICAN CORPORATE RECEIPTS, INC.,
as Depositor
By_________________________________
Authorized Signatory
__________________________________,
as Trustee
By_________________________________
Authorized Signatory
---------------------------------------
Exhibit A -- Description of the Bonds and Receipts
Exhibit B -- Standard Terms and Provisions of Trust Agreement
-2-
<PAGE>
EXHIBIT A
TO SERIES TRUST
AGREEMENT
DESCRIPTION OF THE BONDS AND THE RECEIPTS
PART I -- DESCRIPTION OF THE BONDS
Issuer:
Bonds:
Dated:
Original Principal Maturity Date:
Original Par Value Amount Issued: $
CUSIP Number:
Stated Interest Rate:
Interest Payment Dates:
First Call Date:
Redemption Price:
YEAR REDEMPTION PRICE YEAR REDEMPTION PRICE
Fiscal Agent:
Mode of Payment of Bonds:
Par Value Amount of Bonds Deposited
Under Trust Agreement: $
The Bonds will be held by the Trustee [as Book-Entry Credits to] [in] an account
of the Trustee at ______________________.
A-1
<PAGE>
PART II -- DESCRIPTION OF THE RECEIPTS
Classes of Receipts: [Specify either: (i) Coupon Receipts and Principal
Receipts, or (ii) Coupon Receipts and Callable
Principal Receipts]
Aggregate Face Amount
of Coupon Receipts
Series _________: $________________
Aggregate Face Amount
of Principal Receipts
Series ________: $_________________
Aggregate Face Amount
of Callable Principal Receipts
Series _________: $________________
COUPON RECEIPTS, SERIES ________
ITEM CUSIP NUMBER AGGREGATE FACE MINIMUM OFFERED
NUMBER DUE DATE AMOUNT OFFERED DENOMINATIONS
PRINCIPAL RECEIPTS, SERIES ________
ITEM CUSIP NUMBER AGGREGATE FACE MINIMUM OFFERED
NUMBER DUE DATE AMOUNT OFFERED DENOMINATIONS
CALLABLE PRINCIPAL RECEIPTS, SERIES ________
ITEM CUSIP NUMBER AGGREGATE FACE MINIMUM OFFERED
NUMBER DUE DATE AMOUNT OFFERED DENOMINATIONS
FIRST CALL DATE
A-2
<PAGE>
ORIGINAL ISSUE PRICES AND YIELDS
American Corporate Receipts, Series ___
ORIGINAL ISSUE ORIGINAL
FACE PRICE AS A PERCENT YIELD
MATURITY AMOUNT OF FACE AMOUNT TO MATURITY
A-3
<PAGE>
EXHIBIT B
TO SERIES TRUST
AGREEMENT
STANDARD TERMS AND PROVISIONS OF TRUST AGREEMENT
between
AMERICAN CORPORATE RECEPTS, INC.
as Depositor,
and
----------------------------,
as Trustee
<PAGE>
STANDARD TERMS AND PROVISIONS OF TRUST AGREEMENT
This document constitutes the Standard Terms and Provisions of Trust
Agreement which are to be incorporated by reference in, and attached as Exhibit
B to, one or more Series Trust Agreements by and among American Corporate
Receipts, Inc., as Depositor, and ________________, as Trustee.
Each Series Trust Agreement will create a trust (each, a "Trust") under
the laws of the State of New York to hold securities (the "Bonds") and will
provide for the creation, execution and delivery of trust receipts (the
"Receipts").
These Standard Terms shall be of no force and effect unless and until
incorporated by reference into a Series Trust Agreement.
The following terms and provisions shall govern the Receipts subject to
contrary terms and provisions expressly set forth in a Series Trust Agreement,
which contrary terms and provisions of the Series Trust Agreement shall control,
and subject to contrary terms and provisions contained in the Trust Indenture
Act of 1939, as amended, which contrary terms and conditions shall control over
both the Series Trust Agreement and these Standard Terms and Provisions of Trust
Agreement.
ARTICLE I
DEFINITIONS
SECTION 1.01. CERTAIN DEFINITIONS. All capitalized terms used herein
shall have the meaning set forth in this Section 1.01 unless the context
otherwise requires. Any capitalized terms not otherwise defined shall have the
meanings ascribed to them in the Act.
The term "Accreted Value" means, for any Receipt, (a) the original issue
price for such Receipt as set forth in Exhibit A to the Series Trust Agreement,
plus (b) an amount equal to an investment return thereon accrued to the date of
determination calculated based on a semiannual compounding rate, on the basis of
a 360 day year composed of twelve 30-day months, equal to the original yield to
maturity of such Receipt as set forth in Exhibit A to the Series Trust
Agreement. With respect to the allocation of proceeds of the Bonds received in
connection with a payment default on the Bonds, the relevant determination date
shall be the date of such default.
The term "Act" shall mean the Trust Indenture Act of 1939, as amended.
The term "Agreement" shall mean the trust agreement consisting of the
Series Trust Agreement into which is incorporated by reference the Standard
Terms, including all exhibits, schedules, appendices, supplements and amendments
to each.
<PAGE>
The term "Beneficial Owner" shall mean any purchaser of Receipts which
are held through a Direct or Indirect DTC Participant as such term is used in
the rules and regulations of DTC.
The term "Bond" shall mean with respect to each delivery of Receipts
hereunder, the Bonds specified in the Series Trust Agreement relating to such
Receipts in the aggregate principal amount so specified.
The term "Book-Entry Credit" shall mean the evidence of the deposit by
the Trustee of one or more Bonds in a separate account of the Trustee, as
Trustee under this Agreement, identified in the Series Trust Agreement.
The term "Callable Principal" shall mean the right to receive (i) the
payment, whether upon stated maturity or upon earlier redemption, of the
Principal of Bonds which are redeemable at the option of the issuer thereof
prior to stated maturity, including any redemption premium, and (ii) the
Interest relating to such Bonds with respect to Interest Payment Dates after the
First Call Date for such Bonds.
The term "Depositor" shall mean American Corporate Receipts, Inc., a New
Jersey corporation, and any successor as Depositor hereunder.
The term "Designated Office in New York City," when used with respect to
the Trustee, shall mean an office maintained in accordance with Section 5.02(a)
hereof and designated by the Trustee in the Borough of Manhattan, City of New
York, State of New York.
The term "DTC" shall mean The Depository Trust Company, a clearing
agency registered with the Securities and Exchange Commission, its successor or
successors, and its nominee or nominees.
The term "First Call Date" shall mean, for any Bond, the first date such
Bond can be redeemed at the option of the issuer thereof.
The term "Holder" shall mean a person in whose name a Receipt is
registered in the Receipt Register.
The term "Indenture" shall mean, with respect to any series of Receipts,
the trust indenture or similar agreement governing the Bonds specified in the
Series Trust Agreement relating to such series of Receipts.
The term "Interest" shall mean the right to receive the interest payable
on the Bonds on a single Interest Payment Date.
The term "Interest Payment Dates" shall mean the dates for interest
payments specified in the Series Trust Agreement.
-2-
<PAGE>
The term "Letter of Representations" shall mean the letter of
representations from the Depositor and the Trustee to DTC with respect to the
series of Receipts held at DTC.
The term "Participant" means an entity maintaining a custodial account
in its own name with DTC.
The term "Principal" shall mean the right to receive the principal of
the Bonds upon stated maturity.
The term "Receipt" shall mean a trust receipt of a class of receipts to
be issued under the Agreement, which classes are specified in the Series Trust
Agreement for the series. Such classes may consist of:
(i) Coupon Receipts, which entitle the Holders thereof, in the
aggregate, to the Interest payable on a single Interest Payment Date on
or before the First Call Date for the Bonds, or the stated maturity date
in the case of Bonds not redeemable (otherwise than in connection with a
default or acceleration) at the option of the issuer thereof prior to
stated maturity;
(ii) Principal Receipts, which entitle the Holders thereof, in the
aggregate, to Principal, payable at the stated maturity of the Bonds, of
Bonds which are not redeemable (otherwise than in connection with a
default or acceleration) at the option of the issuer thereof prior to
stated maturity; and
(iii) Callable Principal Receipts, which entitle the Holders thereof, in
the aggregate, to the Callable Principal relating to the Bonds;
provided, that any designation of classes of Receipts made in the Series Trust
Agreement shall consist of only one of the following options: (a) Coupon
Receipts and Principal Receipts, or (b) Coupon Receipts and Callable Principal
Receipts.
The term "Receipt Register" shall have the meaning specified in Section
2.03 hereof.
The term "Redemption Date" shall mean, with respect to any Bonds to be
redeemed, the date fixed by the issuer thereof for such redemption.
The term "Series Trust Agreement" shall mean the particular Series Trust
Agreement into which these Standard Terms have been incorporated.
The term "Standard Terms" shall mean this Standard Terms and Provisions
of Trust Agreement.
The term "Trust" shall mean each trust created by each Series Trust
Agreement.
-3-
<PAGE>
ARTICLE II
CREATION OF TRUST; DELIVERY AND CUSTODY
OF BONDS; FORM OF RECEIPTS; EXECUTION AND
DELIVERY, SURRENDER AND REDEMPTION OF RECEIPTS
SECTION 2.01. CREATION OF TRUST; DELIVERY AND CUSTODY OF BONDS;
EXECUTION AND DELIVERY OF RECEIPTS IN RESPECT THEREOF. The Trust shall be
established by the Depositor pursuant to a Series Trust Agreement. The sole
asset of such Trust shall be the Bonds deposited by the Depositor and any other
related property specified in the Series Trust Agreement. The Receipts shall
evidence fractional interests in designated portions of the assets of the Trust.
The income received by and the assets of such Trust shall be distributed solely
in accordance with this Agreement. The Depositor shall, by book-entry credit or
otherwise, irrevocably deliver to the account of the Trustee specified in the
Series Trust Agreement such Bonds and, concurrently therewith, the Trustee
shall, in accordance with the provisions of this Agreement, execute and deliver
to the Depositor, or such person or persons as the Depositor may designate by
written instruction, the classes of Receipts identified in the Series Trust
Agreement, evidencing the aggregate amount, in authorized denominations, of the
Bonds so delivered to the Trustee. The Depositor shall also in connection with
the Series Trust Agreement enter into a separate agreement with the Trustee,
satisfactory to the Trustee, providing for the payment of the charges and
expenses of the Trustee in respect of such Receipts. In no event shall the
assets of the Trust be used to pay such fees.
The Trustee shall accept the Bonds so delivered as trustee for the
Holders of the Receipts which shall be delivered hereunder to evidence such
Bonds and shall hold the Bonds as provided hereunder. The Bonds specified in a
Series Trust Agreement shall be deposited by Book-Entry Credit in an account of
the Trustee at DTC, unless the Series Trust Agreement specifies that the Trustee
shall hold such Bonds (i) in a special trust account created by separate
recordation on its books, separate from all other assets of the Trustee, or (ii)
in some other manner. Separate subaccounts of any such special trust account
shall be established for each series of Receipts.
The Trustee shall hold all the Bonds delivered to it pursuant to this
Agreement in trust for the Holders, identified and held separate and apart from
the general assets of the Trustee. The account of the Trustee in which the Bonds
are held shall not contain any property of the Trustee in its individual
capacity and shall contain only property held by the Trustee as fiduciary. The
Trustee agrees that it does not have the authority to assign, transfer,
encumber, pledge, sell, set-off or otherwise dispose of any of the Bonds or any
interests therein except as provided hereunder or as required by law.
The Trustee acknowledges that it is not the beneficial owner of the
Bonds and that it holds the Bonds solely as trustee for the Holders pursuant to
this Agreement. Interest and principal payments on the Bonds held in the trust
account will not be subject to any right, charge,
-4-
<PAGE>
security interest, lien or claim of any kind in favor of the Trustee or any
person claiming through it.
The representations and covenants contained in any officer's certificate
of the Trustee delivered in connection with each series of Receipts created by a
deposit of Bonds shall be deemed to be incorporated by reference herein, as
fully as if set forth in full herein.
A reasonable time prior to the delivery of Bonds to the Trustee, the
Depositor shall furnish the Trustee with written instructions as to the name in
which the Receipts evidencing such Bonds shall initially be registered, the
denominations in which such Receipts shall initially be delivered, the persons
and addresses to whom such Receipts are to be delivered and such other
information as may be required by the Trustee in connection with the preparation
and delivery of such Receipts. Each class of Receipts shall evidence the
ownership by the Holders thereof of Interest, Principal, or Callable Principal
(or portions thereof), as the case may be, on the Bonds, to the extent required
by the terms of such class of Receipts.
Bonds underlying Receipts which are not held by book-entry credit at an
account of the Trustee at DTC shall be held by the Trustee at its Designated
Office in New York City or at such other place or places as the Trustee shall
determine.
SECTION 2.02. FORM OF RECEIPTS. Receipts shall be issued in registered
form only and shall be typewritten on safety paper or printed. The classes of
Receipts to be issued hereunder shall be identified in the Series Trust
Agreement and shall be substantially in the forms set forth in Appendix A, in
each case attached to these Standard Terms and with appropriate insertions,
modifications and omissions, as hereinafter so provided. Receipts shall be
executed by the Trustee by the manual signature of a duly authorized signatory
of the Trustee. No Receipt shall be entitled to any benefits under this
Agreement or be valid or obligatory for any purpose, unless it shall have been
executed manually by the Trustee by the signature of a duly authorized
signatory. The Trustee shall record in the Receipt Register each Receipt so
signed and delivered as herein provided.
The authorized denominations for each class of Receipts shall be the
dollar amount, and greater multiples thereof (or of such other dollar amount
specified in the Series Trust Agreement), set forth in the Series Trust
Agreement.
Receipts may be endorsed with or have incorporated in the text thereof
such legends or recitals not inconsistent with the provisions of this Agreement
as may be required by the Trustee or required to comply with any applicable law
or any regulation thereunder.
SECTION 2.03. REGISTRATION AND REGISTRATION OF TRANSFER AND EXCHANGE OF
RECEIPTS. The Trustee shall keep at its Designated Office in New York City
pursuant to Section 314 of the Act a register (the register maintained in such
office being herein sometimes referred to as the "Receipt Register") in which,
subject to such reasonable regulations as it may prescribe, the Trustee shall
provide for the registration of Receipts and for the registration of transfers
or exchanges of Receipts.
-5-
<PAGE>
Upon surrender for registration of transfer of any Receipt at the
Trustee's Designated Office in New York City, the Trustee shall, subject to
Sections 2.04 and 2.08 and any limitations that may be specified in the
applicable Series Trust Agreement, execute and deliver, in the name of the
designated transferee or transferees, one or more Receipts of the same class and
series, of any authorized denominations and of a like aggregate amount.
At the option of the Holder, Receipts may be exchanged for other
Receipts of the same class and series, of any authorized denominations and of a
like aggregate amount, upon surrender of the Receipts to be exchanged at the
Trustee's Designated Office in New York City. Whenever any Receipts are so
surrendered for exchange, the Trustee shall execute and deliver the Receipts
which the Holder making the exchange is entitled to receive.
All Receipts issued upon any registration of transfer or exchange of
Receipts shall evidence, to the extent indicated thereby, Interest, Principal or
Callable Principal (or portions thereof), as the case may be, of Bonds held by
the Trustee hereunder and shall be entitled to the same benefits under this
Agreement as the Receipts surrendered upon such registration of transfer or
exchange.
Every Receipt presented for registration of transfer or for exchange
shall (if so required by the Trustee) be duly endorsed by, or be accompanied by
a written instrument of transfer in form satisfactory to the Trustee and duly
executed by, the Holder thereof or such holder's attorney duly authorized in
writing.
The Trustee shall have no obligation to effect transfers or pledge of
Bonds in accordance with Section 8-320 of the New York Uniform Commercial Code.
SECTION 2.04. LIMITATIONS ON EXECUTION AND DELIVERY, SURRENDER AND
REGISTRATION OF TRANSFER AND EXCHANGE OF RECEIPTS. As a condition precedent to
the execution and delivery, surrender or registration of transfer or exchange of
any Receipt, the Trustee may require payment, by the Holder requesting such
action, of the then applicable service charge of the Trustee and of a sum
sufficient for reimbursement of any tax or other governmental charge with
respect thereto, may require the production of proof reasonably satisfactory to
it as to the Holder's residence and identity and genuineness of any signature,
may require the Holder to execute receipts and to make such representations and
assurances as the Trustee may reasonably deem necessary or proper and may also
require compliance with such regulations, if any, as the Trustee may reasonably
establish consistent with the provisions of this Agreement.
The surrender or registration of transfer or exchange of outstanding
Receipts may be suspended if any such suspension is deemed necessary or
advisable by the Trustee at any time or from time to time because of any
requirement of law or of any government or governmental body or commission, or
under any provision of this Agreement, or for any other reason which makes such
surrender or registration of transfer or exchange impracticable.
-6-
<PAGE>
SECTION 2.05. MUTILATED, DESTROYED, LOST OR STOLEN RECEIPTS. In case any
Receipt shall be mutilated, the Trustee in its discretion may execute and
deliver a Receipt of the same series, of like form and tenor, and in the same
denomination and bearing a number not contemporaneously outstanding, in exchange
and substitution for such mutilated Receipt. In case any Receipt shall be
destroyed, lost or stolen, the Trustee may execute and deliver a Receipt of the
same series, of like form and tenor, and in the same denomination and bearing a
number not contemporaneously outstanding, in lieu of and in substitution for
such destroyed, lost or stolen Receipt, only upon (i) the filing by the Holder
thereof with the Trustee of evidence satisfactory to the Trustee of the
destruction, loss or theft of such Receipt and of the authenticity of such
Holder's ownership thereof, and (ii) the furnishing to the Trustee of reasonable
indemnification satisfactory to it. All expenses and charges associated with
such indemnity and with the preparation, execution and delivery of a new Receipt
shall be borne by the Holder of the Receipt mutilated destroyed, lost or stolen.
SECTION 2.06. PERSONS DEEMED OWNERS. Prior to due presentment of a
Receipt for registration of transfer, the Trustee and any agent of the Trustee
may treat the person in whose name such Receipt is registered as the owner of
such Receipt for the purpose of receiving payment of such Receipt and for all
other purposes whatsoever, whether or not such Receipt be overdue, and neither
the Trustee nor any agent of the Trustee shall be affected by notice to the
contrary.
SECTION 2.07. CANCELLATION AND DESTRUCTION OF SURRENDERED RECEIPTS. All
Receipts surrendered to the Trustee shall be canceled by the Trustee. The
Trustee is authorized to destroy such receipts so canceled.
SECTION 2.08. BOOK-ENTRY. (i) At the election of the Depositor, any
Series Trust Agreement may provide that (1) all Receipts of a series are to be
held in DTC's book-entry only system, (2) all Receipts of a series are to be
issued in definitive physical form, or (3) the Receipts (or any part thereof)
are to be issued or held in such other form as is specified in the Series Trust
Agreement.
(ii) When the registered Holder of any or all of the Receipts is DTC,
such Receipts shall be registered in the name of Cede & Co., as nominee for DTC.
Payment in respect of any Interest or Principal represented by any Receipt (a)
if registered in the name of Cede & Co., shall be made by wire transfer of
immediately available funds to the account indicated for Cede & Co. in the
Receipt Register, and (b) if registered in the name of any other person (other
than a substitute depository for DTC described in Section 2.10 hereof), shall be
made by check for New York Clearing House funds mailed to the address indicated
for such person in the Receipt Register.
(iii) Receipts of which Cede & Co. shall be the Holder shall be
initially issued in the form of a separate single Receipt for each separate
class of Receipts identified in the Series Trust Agreement to be issued
hereunder, in the amount of each separate stated maturity of such Receipt. Upon
initial issuance, the ownership of such Receipt shall be registered in the
Receipt Register in the name of Cede & Co., as nominee for DTC. The
-7-
<PAGE>
Depositor and the Trustee may treat DTC (or its nominee) as the sole and
exclusive owner of the Receipt registered in its name for the purposes of
payment of interest, principal and/or premium represented thereby, giving any
notice permitted or required to be given to Holders under this Agreement,
registering the transfer of such Receipt, obtaining any consent or other action
to be taken by Holders and for all other purposes whatsoever, and neither the
Depositor nor the Trustee shall be affected by any notice to the contrary.
Neither the Depositor nor the Trustee shall have any responsibility or
obligation to any Participant, any person claiming a beneficial ownership
interest in such Receipt under or through DTC or any Participant or any other
person that is not shown on the Receipt Register as being a Holder of such
Receipt, with respect to the accuracy of any records maintained by DTC or any
Participant; the payment by DTC or any Participant of any amount in respect of
principal, interest and/or premium represented by such Receipt; any notice (or
the timeliness thereof) that is permitted or required to be given to Holders of
such Receipt under this Agreement; or any consent given or other action taken by
DTC as the Holder of such Receipt. Upon delivery by DTC to the Trustee of
written notice to the effect that DTC has determined to substitute a new nominee
in place of Cede & Co., and subject to the provisions of Section 2.03 hereof
limiting the obligations of the Trustee to register transfers of or to exchange
Receipts, the words "Cede & Co." in this Agreement shall refer to such new
nominee of DTC.
(iv) Upon (1) the resignation of DTC or its successor (or substitute
depository or its successor) from its functions as depository or (2) a
determination by the Depositor that it is in the best interests of (A) the
Depositor (and will not adversely affect the beneficial owners) or (B) the
beneficial owners to remove DTC or its functions as depository, the Depositor
shall notify DTC and the Trustee, whereupon DTC will notify the Participants of
the availability through DTC of physical certificates evidencing the Receipts.
In such event, the Trustee shall execute, register the transfer of and exchange
Receipts as requested by DTC or by any other Holders of such Receipts in
appropriate amounts and in accordance with the Receipt registry of DTC. In the
event the issuer of any Bond defaults on the payment of any Interest or
Principal which is evidenced by a Receipt held by DTC, and such default remains
uncured for 10 days, the Trustee may (but shall not be obligated to) withdraw
from DTC, in which event DTC shall promptly deliver to the Trustee the physical
certificates evidencing such Bonds. Whenever DTC requests the Trustee to do so,
the Trustee and the Depositor will cooperate with DTC in taking appropriate
action after reasonable notice (a) to make available one or more separate
physical certificates evidencing such Receipts to any Participant having
Receipts credited to its DTC account or (b) to arrange for another securities
depository to maintain custody of physical certificates evidencing such
Receipts.
(v) Notwithstanding any other provision of this Agreement to the
contrary, so long as any Receipt is registered in the name of Cede & Co., as
nominee for DTC, all payments with respect to the principal, interest and/or
premium represented by such Receipt shall be made by wire transfer of
immediately available funds and all notices with respect to such Receipt shall
be given, respectively, to DTC as provided in the Letter of Representations.
(vi) In connection with any notice or other communication to be provided
to Holders pursuant to this Agreement by the Trustee with respect to any consent
or
-8-
<PAGE>
other action to be taken by Holders, the Trustee shall establish a record date
for such consent or other action and give DTC notice of such record date not
less than 15 calendar days in advance of such record date to the extent
possible.
(vii) If quarterly and annual financial statements concerning the issuer
of the Bonds are not available to the Trust and less than two years have elapsed
from the date of issuance of the Receipts, then, unless the Trust has earlier
suspended its own reporting requirements under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), for such Receipts, the Receipts shall be
removed from the DTC book entry system, and physical certificates representing
the Receipts of each class will be issued to the Holders of the Receipts. Such
physical certificates will bear a legend indicating that pursuant to an
undertaking by the Depositor to the staff of the Securities and Exchange
Commission, such Receipts must be treated as restricted securities that have not
been registered under the Securities Act of 1933, as amended (the "Securities
Act"), and may not be transferred unless they are subsequently registered under
the Securities Act or transferred pursuant to an exemption thereto. No such
removal from the DTC book entry system and legending as restricted securities
will be required at any time after the earlier of two years from the date of
issuance of the Receipts or the suspension by the Trust of its own Exchange Act
reporting requirements. In addition, in the event that Receipts have been so
removed and legended, such Receipts will be returned to the DTC book entry
system and such legends will be removed promptly after the first to occur of (a)
the lapse of two years after the date of issuance of such Receipts, (b) the
suspension by the Trust of its Exchange Act reporting requirements with respect
to such Receipts, and (c) the reinstatement of the Exchange Act reporting
requirements of the issuer of the Bonds.
SECTION 2.09. ACTION OR CONSENT OF HOLDERS. In the event of any action
or consent requiring the vote of the owners of any Bonds, the Trustee, upon
receipt of the Bond proxy, will notify DTC of such action. Under current
procedures it is expected that DTC will notify the Participants who will notify
the beneficial owners of Principal or Callable Principal Receipts of such event.
Thereafter, except when the approval of the beneficial owners of the Coupon
Receipts is also required as provided below, the Trustee shall vote solely in
accordance with the instructions received from the DTC (or pursuant to the
applicable procedures of DTC) and shall apportion its voting powers on the basis
of the face amount of the Principal or Callable Principal Receipts. If the
Receipts are not then held by DTC or any other Depository, the Trustee upon
receipt of the Bond proxy will notify the Holders of the Principal or Callable
Principal Receipts directly of such action and shall vote in the same manner as
noted above.
In no event shall the Depositor be allowed or entitled (other than in
its capacity as a safekeeper for a Holder) to vote, directly or indirectly, any
Receipts.
By their affirmative vote, the Holders of more than 50% in principal
amount of Receipts of any Series may direct the Trustee to take or omit to take
any action required or permitted under this Agreement or the Act; provided,
however, that the Trustee shall not vote in favor of any proposal with regard to
the Bonds which would have the effect of permitting a redemption or prepayment
of the Bonds unless the Holders of 100% of the Receipts then
-9-
<PAGE>
outstanding of the applicable Series (including all Coupon Receipts, Principal
Receipts or Callable Principal Receipts as the case may be) vote in favor of
such action.
SECTION 2.10. TRANSFER OF RECEIPTS HELD BY DTC TO SUCCESSOR DEPOSITORY.
If the Depositor elects to direct that the Trustee deliver Receipts with respect
to a particular Series Trust Agreement in the name of and to DTC, as the
Depository hereunder, subject to Section 2.08, said Receipts may not thereafter
be transferred except:
(i) to any successor of DTC or its nominee, or to any substitute
depository designated pursuant to clause (ii) of this subsection (a)
("substitute depository"); provided, that any successor of DTC or substitute
depository shall be qualified under any applicable laws to provide the services
proposed to be provided by it;
(ii) to any substitute depository not objected to by the Trustee, upon
(1) the resignation of DTC or its successor (or any substitute depository or its
successor) from its functions as depository or (2) a determination by the
Depositor that it is in the best interest of the Depositor (and will not
adversely affect the beneficial owners) or the Holders to remove DTC or its
successor (or any substitute depository or its successor); provided, that any
such substitute depository shall be qualified under any applicable laws to
provide the services proposed to be provided by it; or
(iii) as provided in Section 2.08(iv) hereof.
SECTION 2.11. TEMPORARY RECEIPTS. The Receipts may be initially
delivered in temporary form exchangeable for definitive Receipts when ready for
delivery, which temporary Receipts shall be printed, lithographed or
typewritten, shall be of such denominations as may be determined by the Trustee,
shall be in fully registered form and shall contain such reference to any of the
provisions hereof as may be appropriate. Every temporary Receipt shall be
executed and delivered by the Trustee upon the same conditions and terms and in
substantially the same manner as definitive Receipts. If temporary Receipts are
issued, the Trustee will execute and deliver definitive Receipts without delay,
and in that case upon demand of the Holder of any temporary Receipts such
temporary Receipts shall be exchanged without cost to such Holder for definitive
Receipts at the office of the Trustee upon surrender of such temporary Receipts,
and until so exchanged such temporary Receipts shall be entitled to the same
benefit, protection and security hereunder as the definitive Receipts executed
and delivered hereunder. All temporary Receipts surrendered pursuant to the
provisions of this Section 2.11 shall be canceled by the Trustee, shall not be
redelivered and shall be destroyed by the Trustee.
-10-
<PAGE>
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS OF
RECEIPTS; DEPOSITOR'S WARRANTIES
SECTION 3.01. FILING PROOFS, CERTIFICATES AND OTHER INFORMATION. Any
Holder presenting Receipts for surrender or registration of transfer may be
required to file such proof of residence, or other matters or information, to
execute such certificates and to make such representations and warranties as the
Trustee may reasonably deem necessary or proper. The Trustee may withhold the
delivery or delay the surrender of or registration of transfer or exchange of
any Receipt until such proof or other information is filed, such certificates
are executed or such representations and warranties are made.
SECTION 3.02. PAYMENT OF TAXES OR OTHER GOVERNMENTAL CHARGES. If any tax
or other governmental charge shall become payable by or on behalf of the
Trustee, including any tax or charge required to be withheld from any payment
made to or by the Trustee under the provisions of any applicable law, with
respect to any Receipt or with respect to the Interest, Principal or Callable
Principal (or portions thereof) evidenced by any such Receipt, such tax or
governmental charge shall be payable by the Holder of such Receipt and may be so
withheld by the Trustee. The surrender of or registration of transfer or
exchange of any Receipt may be refused until such payment is made.
SECTION 3.03. DEPOSITOR'S WARRANTIES. In the case of each delivery of
Bonds to the Trustee, the Depositor shall be deemed thereby to represent and
warrant to the Trustee that the Depositor is duly authorized to so deliver such
Bonds and that immediately prior to the delivery thereof the Depositor owned
such Bonds free and clear of any lien, pledge, encumbrance or other security
interest. The Depositor shall further be deemed by such delivery to have made
the representations and warranties contained in the Series Trust Agreement with
respect to such Bonds and to represent and warrant to the Trustee that the
prospectus and prospectus supplement prepared by the Depositor with respect to
the Receipts makes such disclosure with respect to the Bonds as is required by
applicable federal and state securities laws. Such representations and
warranties shall survive the delivery of such Bonds and the Receipts in respect
thereof.
ARTICLE IV
PAYMENT OF INTEREST AND PRINCIPAL, CUSTODY
OF PROCEEDS OF INTEREST AND PRINCIPAL PAYMENTS
SECTION 4.01. PAYMENT OF INTEREST; PAYMENT OF PRINCIPAL. In the case of
any interest or principal payments due on Bonds held by the Trustee in
certificate form, the Trustee shall present to the issuer, trustee or paying
agent therefor, as applicable, for payment all coupons or other documents
required on the Interest Payment Dates related thereto
-11-
<PAGE>
and the receipts representing the Bonds and/or all other required documents at
stated maturity or upon the Redemption Date therefor.
With respect to any Coupon Receipt, on and after the Interest Payment
Date of the Interest evidenced thereby, if the applicable issuer shall have paid
in full and the Trustee shall have received the interest due on such Interest
Payment Date on the underlying Bonds, the Trustee shall pay to the Holder
thereof as of the applicable record date of the underlying Bonds, in lawful
money of the United States of America, (i) if the Holder is DTC or its nominee
or any successor depository or nominee thereof, by wire transfer of immediately
available funds, and (ii) if the Holder is any other person, by check for New
York Clearing House Funds sent by first-class mail to the address of the Holder
set forth in the Receipt Register, the entire amount of such Interest evidenced
thereby, less any taxes or governmental charges required to be withheld from
such payment by the Trustee.
Except as provided for under Section 5.01 hereof, with respect to any
Principal Receipt, if the applicable issuer shall have paid in full and the
Trustee shall have received the amount of such Principal, the Trustee shall pay
to the Holder thereof as of the applicable record date, in lawful money of the
United States of America, (i) if the Holder is DTC or its nominee or any
successor depository or nominee thereof, by wire transfer of immediately
available funds, and (ii) if the Holder is any other person, by check for New
York Clearing House Funds sent by first-class mail to the address of the Holder
set forth in the Receipt Register, the entire amount of such Principal evidenced
thereby, less any taxes or governmental charges required to be withheld from
such payment by the Trustee.
Except as provided for under Section 5.01 hereof, with respect to any
Callable Principal Receipt, if the applicable issuer shall have paid and the
Trustee shall have received all or any part of the principal amount of the
Principal and redemption premium, if any, due upon maturity, or upon the earlier
redemption of the underlying Bonds, the Trustee shall pay to the Holder thereof
as of the applicable record date, in lawful money of the United States of
America, (i) if the Holder is DTC or its nominee or any successor depository or
nominee thereof, by wire transfer of immediately available funds, and (ii) if
the Holder is any other person, by check for New York Clearing House funds sent
by first-class mail to the address of the Holder set forth in the Receipt
Register, the entire amount of such Principal and premium, if any, evidenced
thereby, or, in the case of a Callable Principal Receipt redeemed in part, the
amount of such Principal so redeemed; in each case less any taxes or
governmental charges required to be withheld from such Payment by the Trustee.
With respect to any Callable Principal Receipt, on and after the
Interest Payment Date of the Interest evidenced thereby (which Interest Payment
Date shall be on or after the First Call Date), if the applicable issuer shall
have paid in full and the Trustee shall have received the interest due on such
Interest Payment Date on the underlying Bonds, the Trustee shall pay to the
Holder thereof as of the applicable record date of the underlying Bonds, in
lawful money of the United States of America, (i) if the Holder is DTC or its
nominee or any successor depository or nominee thereof, by wire transfer of
immediately available funds, and (ii) if the Holder is any other person, by
check for New York Clearing House Funds sent by first-class mail to the
-12-
<PAGE>
address of the Holder set forth in the Receipt Register, the entire amount of
such Interest evidenced thereby, less any taxes or governmental charges required
to be withheld from such payment by the Trustee.
When making any payment to a Holder of a Receipt under this Agreement,
the Trustee shall round down such payment to the nearest whole cent.
SECTION 4.02. SEGREGATION OF MONEYS RECEIVED FROM ISSUERS IN RESPECT OF
BONDS. All moneys received from the issuers of Bonds or otherwise by the Trustee
in respect of Bonds evidenced by Receipts issued hereunder shall be held by it
without interest in a special account for each issue of Bonds held in trust
until required to be disbursed in accordance with the provisions of this
Agreement or as otherwise required by law and such moneys will be segregated by
separate recordation on the books and records of the Trustee.
ARTICLE V
THE TRUSTEE AND THE DEPOSITOR
SECTION 5.01. NO LIABILITY OF THE TRUSTEE OR THE DEPOSITOR ON THE BONDS;
POWERS OF TRUSTEE UPON A DEFAULT ON THE BONDS. The sole obligor with respect to
any Bond is the issuer thereof or any other entity obligated to make payments to
or on behalf of the issuer thereof (or its trustee or other applicable
fiduciary) with respect to any Bond. Neither the Trustee nor the Depositor shall
have any obligation on or with respect to the Bonds except as provided herein or
in the Act; and their respective obligations with respect to Receipts shall be
solely as set forth in this Agreement and the Act.
Upon any default by the issuer of any Bond on the payment of any
Interest, Principal, or Callable Principal which is evidenced by a Receipt, the
Trustee shall promptly give notice to DTC or, if the Receipts are not then held
by DTC or any other Depository, directly to Holders thereof as provided in
Section 8.03 hereof. Such notice shall set forth (a) the identity of the issue
of Bonds, (b) the date and nature of such default, (c) the face amount of the
Interest, Principal or Callable Principal to which such default relates, (d) the
identifying numbers or the class of Receipts, or any combination, as the case
may be, evidencing the Interest, Principal or Callable Principal (or portions
thereof) described above in clause (c), and (e) any other information which the
Trustee may deem appropriate.
Upon any default by the issuer of any Bond on the payment of any
Interest, Principal, or Callable Principal which is evidenced by a Receipt, the
Trustee shall take all such steps as the Trustee, in its capacity as Trustee and
as the registered owner or nominal holder of the Bond to which the Receipt owned
by the Holder relates, shall deem necessary to protect the rights of the Holders
of Receipts; provided, however, that the Trustee shall not be required to expend
its own funds in furtherance of such steps until the Trustee has received from
the Holders an indemnity for any costs or expenses incurred in connection
therewith in form and substance reasonably satisfactory to the Trustee. In order
to protect such rights, the Trustee may, in its own
-13-
<PAGE>
name and as trustee of an express trust, institute any action or proceedings at
law or in equity for the collection of the sums due and unpaid upon any Bond,
and may prosecute any such action or proceeding to judgment or final decree. In
addition, the Trustee shall be entitled and empowered, either in its own name or
as trustee of an express trust or as attorney-in-fact for the Holders of
Receipts or in any one or more of such capacities to file such proofs of claim,
claims, petitions, amendments thereto or any other documents as may be necessary
or advisable in order to have the claims of the Holders allowed in any judicial
proceedings involving the obligor under the Bonds or the trustee under the
Indenture.
In the event that the Trustee receives money or other property in
respect of the Bonds (other than a scheduled interest payment with respect to an
Interest Payment Date or the scheduled payment of principal on or with respect
to the stated maturity date of the Bonds) as a result of a payment default on
the Bonds, or actual notice that such moneys or other property will be paid to
the Trustee, the Trustee shall promptly give notice (as provided in Section 8.03
hereof) to DTC or, if the Receipts are not then held by DTC or any other
Depository, directly to the Holders of the Receipts then outstanding and unpaid.
Such notice shall state that, not later than thirty (30) days after the receipt
of such moneys or other property, the Trustee shall allocate and distribute such
moneys or other property to the Holders of the Receipts then outstanding and
unpaid, in proportion to the Accreted Value of each outstanding class of
Receipts, and within each class pro rata by face amount. Property received,
other than cash, shall be liquidated by the Trustee in a commercially reasonable
manner and the proceeds thereof, after deduction of all reasonable costs and
expenses of such liquidation, distributed in cash; provided, however, that if
such property consists of securities, such securities shall be liquidated only
to the extent necessary to avoid distribution of fractional securities.
Sections 317(a), 316(a)(1), 315(b) and 315(e) of the Act are hereby
specifically incorporated by reference into these Standard Terms.
Neither the Trustee nor the Depositor shall be under any obligation
whatsoever to appear in, prosecute or defend any action, suit or other
proceeding in respect of the Bonds or Receipts.
ANY ACTION OR PROCEEDING ALLEGING ANY BREACH BY THE TRUSTEE OF ITS
DUTIES UNDER THIS AGREEMENT SHALL BE PROSECUTED ONLY IN A STATE OR FEDERAL COURT
LOCATED IN THE STATE OF NEW YORK COUNTY, NEW YORK. THE TRUSTEE SHALL HAVE THE
RIGHT AT ANY TIME TO SEEK INSTRUCTIONS FROM ANY COURT OF COMPETENT JURISDICTION.
The Trustee may consult with and rely upon the calculations of an
advisor (which may be the Depositor) in connection with any calculation of
Accreted Value to the extent such amount must be determined in order for the
Trustee to carry out its duties hereunder. The expenses of such an advisor
(other than the Depositor) shall be borne by the Holders.
SECTION 5.02. MAINTENANCE OF OFFICES AND AGENCIES BY THE TRUSTEE. Until
termination of this Agreement in accordance with its terms, the Trustee shall
maintain (a)
-14-
<PAGE>
facilities in the Borough of Manhattan, City of New York, State of New York, for
the execution and delivery, payment, surrender and registration of transfer and
exchange of Receipts, all in accordance with the provisions of this Agreement,
and (b) such other agents, if any, according to the terms and conditions as the
Trustee and the Depositor may agree from time to time.
SECTION 5.03. PREVENTION OR DELAY IN PERFORMANCE BY THE TRUSTEE OR THE
DEPOSITOR. Neither the Trustee nor the Depositor shall incur any liability to
any Holder of any Receipt, if by reason of any provision of any present or
future law, or regulation thereunder, of any governmental authority, or by
reason of any act of God or war or other circumstance beyond the control of the
relevant party, the Trustee or the Depositor shall be prevented or forbidden
from doing or performing any act or thing which the terms of this Agreement
provide shall be done or performed; and neither the Trustee nor the Depositor
shall incur any liability to any Holder of a Receipt by reason of any
non-performance or delay, caused as aforesaid, in the performance of any act or
thing which the terms of this Agreement provide shall or may be done or
performed, or by reason of any exercise of, or failure to exercise, any
discretion provided for in this Agreement.
SECTION 5.04. OBLIGATIONS OF THE TRUSTEE AND THE DEPOSITOR. Subject to
Section 315 of the Act as to the Trustee, neither the Trustee nor the Depositor
assume any obligation or shall be subject to any liability under this Agreement
to Holders of Receipts, other than by reason of willful misconduct, bad faith or
negligence in the performance of such duties as are specifically set forth in
this Agreement. Neither the Depositor nor the Trustee shall be under any
obligation to take any action hereunder which may tend to involve it in any
expense or liability, the payment of which within a reasonable time is not, in
its reasonable opinion, assured to it.
Neither the Trustee nor the Depositor shall be liable to any Holder of
any Receipt for any action or non-action by it in reliance upon the advice of or
information from legal counsel, accountants, any Holder of a Receipt or any
other person believed by it in good faith to be competent to give such advice or
information. The Trustee and the Depositor may each rely and shall each be
protected in acting upon any written notice, request, direction or other
document believed by it to be genuine and to have been signed or presented by
the proper party or parties.
Neither DTC nor any registrar with which Bonds are maintained as
book-entry credits shall be deemed agents of the Trustee. The Trustee may own
and deal in bonds of the same issue and maturity as the Bonds and in Receipts.
The Trustee shall at all times maintain a fidelity bond in reasonable
form and amount to protect against loss due to dishonest or fraudulent action by
its employees in connection with its obligations hereunder.
SECTION 5.05. RESIGNATION AND REMOVAL OF THE TRUSTEE; APPOINTMENT OF
SUCCESSOR TRUSTEE. The Trustee may at any time resign as Trustee hereunder by
written notice of its election so to do, delivered to the Depositor, and such
resignation shall take effect upon the appointment of a successor Trustee and
its acceptance of such appointment as hereinafter
-15-
<PAGE>
provided. The Depositor may at any time remove the Trustee as Trustee hereunder
by written notice of its election to do so, delivered to the Trustee as provided
in Section 8.03 hereof, and such removal shall take effect upon the appointment
of a successor Trustee and its acceptance of such appointment as provided in the
third succeeding paragraph; provided, however, that in the event of such
removal, the Depositor shall negotiate in good faith with the Trustee in order
to agree regarding payment of the termination costs of the Trustee resulting
from such removal. Upon the designation of a successor Trustee following either
resignation by or removal of the Trustee, the Trustee shall deliver to the
successor Trustee all records relating to the Receipts in the form and manner
then maintained by the Trustee, which shall include a hard copy thereof upon
request of the successor Trustee.
If at any time the Trustee fails to meet the qualifications for
successor Trustees set forth in the next paragraph, shall become incapable of
acting or shall be adjudged a bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation, or the Trustee shall fail to
comply with the provisions of Section 310(b) of the Act, then any Holder of a
Receipt with respect to a particular issue of Bonds which has been such a Holder
for at least six (6) months or the Holders of ten percent (10%) of the face
amount of Receipts of a series which is outstanding at such time may, on behalf
of himself, herself or themselves and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee with respect
to the Bonds evidenced by such Receipts and the appointment of a successor
Trustee.
In the case at any time the Trustee acting hereunder notifies the
Depositor that it elects to resign or the Depositor notifies the Trustee that it
elects to remove the Trustee as Trustee, the Depositor shall, within ninety (90)
days after the delivery of the notice of resignation or removal, appoint a
successor Trustee, which shall be a bank with trust powers or trust company
having its principal office in the United States of America, having a combined
capital and surplus of at least $50,000,000, and having a rating of Baa or
better assigned by at least one nationally recognized statistical rating agency,
as that term is defined under Securities and Exchange Commission Rule
15C3-1(c)(2)(vi)(F). If no successor Trustee has been appointed a successor
Trustee within ninety (90) days after the Trustee has given written notice of
its election to resign or the Depositor has given written notice to the Trustee
of its election to remove the Trustee, as the case may be, the Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee. Every successor Trustee shall execute and deliver to its predecessor
and to the Depositor an instrument in writing accepting its appointment
hereunder, and thereupon such successor Trustee, without any further act or
deed, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor and for all purposes shall be the Trustee under
this Agreement, and such predecessor, upon payment of all sums due it and on the
written request of the Depositor, shall execute and deliver an instrument
transferring to such successor all rights, obligations and powers of such
predecessor hereunder, and shall duly assign, transfer and deliver all right,
title and interest in the Bonds and parts thereof to such successor. Any
successor Trustee shall promptly give notice of its appointment to the Holders
of Receipts for which it is successor Trustee as provided in Section 8.03
hereof.
-16-
<PAGE>
Any corporation into or with which the Trustee may be merged,
consolidated or converted or any corporation which shall succeed to all or
substantially all of the corporate trust business of the Trustee shall be the
successor of such Trustee without the execution or filing of any document or any
further act.
SECTION 5.06. INDEMNIFICATION BY THE DEPOSITOR; CONTRIBUTION. The
Depositor agrees to indemnify the Trustee against, and hold it harmless from,
any liability which may arise out of or in relation to the acceptance,
administration or performance by the Trustee of its duties hereunder or any acts
performed or omitted in accordance with the provisions of this Agreement, as the
same may be amended, supplemented or modified from time to time, in relation to
the Bonds described in the Series Trust Agreement executed by the Depositor or
the Receipts of a series and any liability which may arise out of acts performed
or omitted in relation to such Receipts (a) by the Trustee or its agents, except
for any liability arising out of acts of willful misconduct, bad faith or
negligence on the part of the Trustee or its agents, or (b) by the Depositor or
any of its agents.
If the indemnification provided for in the preceding paragraph is
invalid or unenforceable, then the Depositor shall contribute to the amount paid
or payable by the Trustee as a result of such liability in such proportion as is
appropriate to reflect the relative benefits received by the Depositor on one
hand and the Trustee on the other from the issuance and sale of such Receipts.
For this purpose the benefits received by the Depositor shall be the aggregate
amount received by it upon the sale of such Receipts, less the costs and
expenses of such sale, including the cost of acquisition of the Bonds evidenced
thereby, and the benefits received by the Trustee shall be the aggregate amount
of fees received by it as Trustee, less costs and expenses incurred by it as
Trustee in relation to such Receipts, and the Bonds evidenced thereby. If,
however, the allocation provided by the immediately preceding two sentences is
not permitted by applicable law, then the Depositor shall contribute to such
amount paid or payable by the Trustee in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Depositor on the one hand and the Trustee on the other in connection with the
actions or omissions which resulted in such liability, as well as any other
relevant equitable considerations.
The term "liability," as used in this Section 5.06, shall include any
losses, claims, damages, expenses (including without limitation the Trustee's
costs and expenses in defending itself against any losses, claims or
investigations of any nature whatsoever to the extent the Trustee is not
reimbursed as contemplated therein) or other liabilities, joint or several,
arising for any reason (including without limitation violation of applicable
laws or trademarks or service marks).
The obligations of the Depositor under this Section 5.06 shall (i) be in
addition to any liability which the Depositor may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of the
Trustee and to each person, if any, who controls the Trustee within the meaning
of the Securities Exchange Act of 1934, as amended and (ii) survive the
resignation or removal of the Trustee and the termination of this Agreement.
-17-
<PAGE>
SECTION 5.07. CHARGES AND EXPENSES. Except as otherwise provided in this
Agreement, (i) no current or future charges, fees and expenses of the Trustee
shall be payable by or withheld from any person other than the Depositor, except
for any taxes and other governmental charges, and (ii) in full payment and
satisfaction of all other charges and expenses of the Trustee (including, in
each case, fees and expenses of counsel) incidental to the performance of its
obligations hereunder, the Depositor shall pay the Trustee an amount determined
in accordance with a separate agreement between it and the Trustee.
SECTION 5.08. REPORTS TO RECEIPT HOLDERS.
(a) Quarterly and annual unaudited reports containing information
concerning the related Bonds, including an annual independent accountant's
statement of review regarding the payment of all income on the Bonds to the
Receipt Holders, will be prepared by the Depositor and sent on behalf of the
Trust to the Holders of the Receipts. The Depositor shall cause each Trust to
file with the Securities and Exchange Commission such other reports as may be
required under the Exchange Act of 1934, and the rules and regulations
thereunder, and, in addition, to prepare such reports and take such actions as
may otherwise be required by Section 314(a) of the Act.
(b) In addition to the foregoing, within the period of time prescribed
by the Internal Revenue Code of 1986, as amended, and the rules and regulations
thereunder, after the end of each calendar year during the term of each Trust,
the Trustee will mail to each person who at any time during such calendar year
has been a Holder and received any payment thereon a statement containing
certain information for the purposes of such Holder's preparation of federal
income tax returns.
(c) On or before February 1 of each year, the Trustee for each Trust
shall transmit by mail to the Holders of the related Receipts the report, if
any, required by Section 313(a) of the Act.
SECTION 5.09. REPORTS TO TRUSTEE. The Depositor, on behalf of the Trust,
shall deliver to the Trustee semi-annually each June 30 and December 31 the
information required by Section 312(a) of the Act; provided, however, that so
long as the Trustee is acting as registrar for the Receipts, no such information
need be furnished.
ARTICLE VI
AMENDMENT AND TERMINATION
SECTION 6.01. AMENDMENT. The form of the Receipts and any provisions of
this Agreement may at any time and from time to time be amended by agreement in
writing between the Depositor and the Trustee, executed by each of them, in any
respect which they may deem necessary or desirable, provided that in no event
shall any amendment defer or alter the maturity of a Receipt or, as evidenced by
an opinion of counsel delivered to the Trustee, in any other
-18-
<PAGE>
manner adversely affect the rights to payment of a Holder of a Receipt or
otherwise materially prejudice any substantial existing right of the Holders of
the Receipts. Every Holder of a Receipt at the time any such amendment so
becomes effective shall be deemed to be continuing to hold such Receipt, to
consent and agree to such amendment and to be bound by this Agreement as amended
thereby. Notwithstanding any other provision herein, no amendment to this
Agreement shall be effective unless the Depositor shall provide the nationally
recognized statistical rating agency, if any, which has rated the Receipts of
each Trust to be effected by such amendment with ten (10) days prior written
notice of such proposed amendment and has received a written confirmation from
such nationally recognized statistical rating agency that such amendment will
not cause the nationally recognized statistical rating agency to downgrade its
rating of the subject Receipts.
The Trustee shall be entitled to receive, and shall be fully protected
in relying upon, an opinion of counsel, in form and substance reasonably
satisfactory to the Trustee, stating that the execution of any amendment,
supplement or waiver authorized pursuant to this Section 6.01 is authorized and
permitted by this Agreement. Such opinion of counsel shall not be an expense of
the Trustee.
SECTION 6.02. TERMINATION. This Agreement shall terminate with respect
to any Trust one year following the payment upon maturity (or any earlier
redemption) by the respective issuers of the entire principal amount (and any
redemption premium) of the Bonds. If any Receipts shall remain outstanding after
the date of termination of this Agreement, the Trustee shall not perform any
further acts under this Agreement, except that the Trustee shall hold the
proceeds of any payment, without liability for interest, for the pro rata
benefit of the Holders of Receipts which have not theretofore been surrendered
for payment unless otherwise required by applicable law. Upon the termination of
this Agreement, the Depositor shall be discharged from all obligations under
this Agreement except for its obligations to the Trustee under Section 5.06 and
5.07 hereof.
ARTICLE VII
REDEMPTION OF CALLABLE PRINCIPAL RECEIPTS
SECTION 7.01. REDEMPTION. If the Bonds of any issue underlying Callable
Principal Receipts are redeemed in whole or in part on or after the First Call
Date, and upon actual receipt by the Trustee of notice of such redemption, the
Trustee shall, in accordance with the provisions of this Article VII, redeem a
principal amount of Callable Principal Receipts equal to the principal amount of
the Bonds of such issue held in trust hereunder so redeemed. In the absence of
the actual notice described in this Section 7.01, the Trustee shall be under no
obligation to effect the redemption required by this Section 7.01. The
particular Callable Principal Receipts to be redeemed shall be selected by the
Trustee from the outstanding Callable Principal Receipts of such series by lot
or such other method as the Trustee shall deem fair and appropriate and which
may provide for the selection for redemption of portions (in amounts equal to
the minimum authorized denomination of such series and integral multiples
thereof) of
-19-
<PAGE>
the principal amount represented by such Callable Principal Receipts. To the
extent practicable the Trustee shall, in the case of partial redemption, redeem
Callable Principal Receipts so that no more than one Callable Principal Receipt
is thereby rendered other than in an authorized denomination. Upon redemption of
any Callable Principal Receipts, the Holder will have no right to receive
Payments on any Interest maturing after the Redemption Date thereof.
SECTION 7.02. NOTICE OF REDEMPTION. Notice of redemption shall be given
by the Trustee to each Holder of any Callable Principal Receipts to be redeemed
as provided in Section 8.03 hereof within thirty (30) days after notice of
redemption of the underlying Bonds has been given by the issuer, trustee or
paying agent of or for the Bonds, as the case may be (but not less than fifteen
days prior to the redemption date); provided, however, that the Trustee shall
not be required to give any notice of redemption less than three (3) business
days after the date it receives notice of such redemption. All notices of
redemption shall be mailed to each Holder at such Holder's last address on the
Receipt Register and shall state the Redemption Date, the amount payable on such
date, the place at which Callable Principal Receipts are to be surrendered for
payment, that interest on amounts redeemed will cease to accrue and, if less
than all of a Holder's Callable Principal Receipt is to be redeemed, the
principal amount of such Callable Principal Receipt to be redeemed.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. EXCLUSIVE BENEFIT OF PARTIES AND HOLDERS OF RECEIPTS;
EFFECTIVE DATE. This Agreement is for the exclusive benefit of the parties
hereto, their respective successors hereunder, and Holders of Receipts, and
shall not be deemed to give any legal or equitable right, remedy or claim to any
other person whatsoever. The Holders from time to time shall be beneficiaries of
this Agreement and shall be bound by all the terms and conditions hereof and of
the Receipts by acceptance of delivery thereof. This Agreement shall become
effective as to the Trustee and the Depositor for each series of Receipts upon
the execution of the Series Trust Agreement for such series by the Trustee and
Depositor and the receipt by the Trustee of the Bonds deposited therewith.
SECTION 8.02. INVALIDITY OF PROVISIONS. In case any one or more of the
provisions contained in this Agreement or contained in the Receipts should be or
become invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein or therein shall
in no way be affected, prejudiced or disturbed thereby.
SECTION 8.03. NOTICES. Any and all notices to be given to the Depositor
shall be deemed to have been duly given if personally delivered or sent by mail
or facsimile confirmed by letter addressed to the address set forth in the
Series Trust Agreement relating to Receipts evidencing Bonds deposited by the
Depositor, or at any other place to which the Depositor may have transferred its
principal executive office.
-20-
<PAGE>
Any and all notices to be given to the Trustee shall be deemed to have
been duly given if personally delivered or sent by mail or by facsimile
confirmed by letter addressed to the Trustee at
[________________________________________________________] Attention: Corporate
Trust Department, or to such other place which the Trustee may have designated
in writing to the Depositor.
All other notices to be given to any Holder shall be deemed to have been
duly given if given by mail, first-class postage prepaid, to each Holder at such
Holder's address as it appears in the Receipt Register. Neither the failure to
mail such notice, nor any defect in any notice so mailed, to any particular
Holder shall affect the sufficiency of such notice with respect to other
Holders.
SECTION 8.04. GOVERNING LAW. This Agreement and the Receipts shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 8.05. HEADINGS. The headings of articles and sections in this
Agreement and in the form of the Receipts set forth in Appendix A hereto have
been inserted for convenience only and are not to be regarded as a part of this
Agreement or to have any bearing upon the meaning or interpretation of any
provision contained herein or in the Receipts.
SECTION 8.06. TRUST INDENTURE ACT. The provisions of the Act which
impose duties on any person (including provisions automatically deemed included
in an indenture under the Act unless the indenture provides that such provisions
are excluded) are part of and govern this Agreement. If any provision hereof
limits, qualifies or conflicts with any of the duties imposed by operation of
the Act, the provisions of the Act shall control.
-21-
<PAGE>
APPENDIX A-I
AMERICAN CORPORATE RECEIPTS, INC.
FORM OF COUPON RECEIPT
COUPON RECEIPT, SERIES ___
(ISSUABLE IN A MINIMUM DENOMINATION
OF $_________________ OR GREATER MULTIPLES OF $1,000)
FOR INTEREST PAYMENT DUE ON THE INTEREST PAYMENT
DATE INDICATED BELOW ON
[Description of Bonds]
No.:................... Face Amount:$.......................
CUSIP No.:............. Interest Payment Date:..............
[HOLDER] or registered assigns, is the owner of the interest payment due
in the Face Amount set forth above on the above-named bonds (the "Bonds") on the
indicated Interest Payment Date. The sole obligors with respect to such interest
payment are the issuer of the Bonds named above (the "Issuer") and any other
entity obligated to make payments to or on behalf of the Issuer (or its trustee
or other applicable fiduciary) with respect to the Bonds. The Bonds are being
held in a trust account by ____________________, as Trustee, pursuant to the
terms of a Trust Agreement (the "Agreement") dated as of _________________,
consisting of a Series Trust Agreement together with the Standard Terms and
Provisions of Trust Agreement appended thereto, together with all other
exhibits, schedules, appendices, supplements and amendments thereto, between
American Corporate Receipts, Inc., as Depositor, and the Trustee, pursuant to
which this and other receipts (the "Receipts") evidencing the right to receive
either interest, principal or interest and principal payments, including any
redemption premium, on the Bonds are executed and delivered by the Trustee. This
Receipt is subject to the provisions of and is entitled to the benefits of the
Agreement, which may be inspected by the holder hereof at the Designated Office
of the Trustee in the Borough of Manhattan, City of New York, State of New York.
The owner of this Receipt, by its acceptance hereof, agrees to be bound by the
terms and conditions of the Agreement.
The Bond or Bonds on which the interest payment evidenced by this
Receipt is payable will be held in an account of the Trustee at [DTC in
book-entry credit form] [ ]. On or after the Interest Payment Date of the
interest payment evidenced hereby, the Trustee will pay an amount equal to the
face amount of the interest payment evidenced hereby, less any amounts required
to be withheld from or by the Trustee pursuant to applicable law, to the
registered holder hereof in lawful money of the United States of America, (i) if
the registered holder is The Depository Trust Company ("DTC") or its nominee or
any successor depository or nominee thereof, by wire transfer of immediately
available funds, and (ii) if the registered holder is any other person, by check
in New York Clearing House funds sent by first-class mail to the address
A-I-1
<PAGE>
of the registered holder hereof set forth in the Receipt Register, but only out
of the interest payments received from the Issuer or its trustee or paying agent
for the Bonds.
In the event the Trustee receives money or other property in connection
with the payment of principal (or actual notice that such moneys or other
property will be received), other than in connection with a redemption, prior to
the maturity date of the [Callable] Principal Receipts, the Trustee shall
distribute such moneys or other property in accordance with the characterization
given such payments by the Issuer of, or trustee for, the Bonds. Amounts so
characterized as principal shall be distributed, pro rata to holders of
[Callable] Principal Receipts; amounts so characterized as interest shall be
distributed to holders of Coupon Receipts in chronological order by maturity
from the first to mature to the last.
In the event that no characterization as to principal or interest is
made or the characterization is not clear, the Trustee shall bring an action in
a court of competent jurisdiction within the State of New York seeking to have
such court determine the relative rights of the holders of Receipts to any such
payments. The expenses of such action incurred by the Trustee shall be paid by
the holders of the Receipts to the extent of the payments received by the
Trustee.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Receipt is registrable in the Receipt Register,
upon surrender of this Receipt for registration of transfer at the corporate
trust office of the Trustee at ________________ in New York, New York, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee, duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Receipts
having the Interest Payment Date set forth on the face hereof, of authorized
denominations of $______________ or greater multiples of $1,000, and of like
aggregate face amount will be issued to the designated transferee or
transferees. Under the Agreement, the Trustee is required, when making any
payment to a holder of a Receipt, to round down such payment to the nearest
whole cent.
Receipts having the Interest Payment Date set forth on the face hereof
are issuable only in registered form in authorized denominations. As provided in
the Agreement and subject to certain limitations therein set forth, such
Receipts are exchangeable for Receipts of the same series, due on the same
Interest Payment Date and of a like aggregate face amount, as requested by the
holder surrendering the same.
For any such registration of transfer or exchange, the Trustee may
require payment of the then applicable service charge and of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Receipt for registration of transfer,
the Trustee and any agent of the Trustee may treat the person in whose name this
Receipt is registered as the owner hereof for all purposes, whether or not this
Receipt be overdue, and neither the Trustee nor any such agent shall be affected
by notice to the contrary.
A-I-2
<PAGE>
This Receipt shall not be valid or become obligatory for any purpose
unless and until duly executed by the Trustee by manual signature.
Dated: ____________________________,
as Trustee
By:__________________________
Authorized Signatory
A-I-3
<PAGE>
APPENDIX A-II
AMERICAN CORPORATE RECEIPTS, INC.
FORM OF PRINCIPAL RECEIPT
PRINCIPAL RECEIPT, SERIES __________
(ISSUABLE IN A MINIMUM DENOMINATION
OF $__________ OR GREATER MULTIPLES OF $1,000)
FOR PRINCIPAL PAYMENT DUE ON THE
STATED MATURITY DATE INDICATED BELOW ON
[Description of Bonds]
No.:................... Face Amount:$.....................
CUSIP No.:............. Stated Maturity Date:.............
[HOLDER] or registered assigns, is the owner of the principal payment
due in the Face Amount set forth above on the above-named bonds (the "Bonds") on
the indicated Stated Maturity Date. The sole obligors with respect to such
principal and interest payment are the issuer of the Bonds named above (the
"Issuer") and any other entity obligated to make payments to or on behalf of the
Issuer (or its trustee or other applicable fiduciary) with respect to the Bonds.
The Bonds are being held in a trust account by _____________________, as
Trustee, pursuant to the terms of a Trust Agreement (the "Agreement") dated as
of _________________, consisting of a Series Trust Agreement together with the
Standard Terms and Provisions of Trust Agreement appended thereto, together with
all other exhibits, schedules, appendices, supplements and amendments thereto,
between American Corporate Receipts, Inc., as Depositor, and the Trustee,
pursuant to which this and other receipts (the "Receipts") evidencing the right
to receive either interest, principal or interest and principal payments,
including any redemption premium, on the Bonds are executed and delivered by the
Trustee. This Receipt is subject to the provisions of and is entitled to the
benefits of the Agreement, which may be inspected by the holder hereof as the
Designated Office of the Trustee in the Borough of Manhattan, City of New York,
State of New York. The owner of this Receipt, by its acceptance hereof, agrees
to be bound by the terms and conditions of the Agreement.
The Bond or Bonds on which the principal payment evidenced by this
Receipt is payable will be held in an account of the Trustee at [DTC in
book-entry credit form] [ ]. On or after the Stated Maturity Date of the
principal payment evidenced hereby, the Trustee will pay an amount equal to the
face amount of the principal payment evidenced hereby, less any amounts required
to be withheld from or by the Trustee pursuant to applicable law, to the
registered holder hereof in lawful money of the United States of America, (i) if
the registered holder is The Depository Trust Company ("DTC") or its nominee or
any successor depository or nominee
A-II-1
<PAGE>
thereof, by wire transfer of immediately available funds, and (ii) if the
registered holder is any other person, by check in New York Clearing House funds
sent by first-class mail to the address of the registered holder hereof set
forth in the Receipt Register, but only out of the principal payments received
from the Issuer or its trustee or paying agent for the Bonds.
In the event the Trustee receives money or other property in connection
with the payment of principal (or actual notice that such moneys or other
property will be received), prior to the maturity date of the Principal
Receipts, the trustee shall distribute such moneys or other property in
accordance with the characterization given such payment by the Issuer of, or
trustee for, the Bonds. Amounts so characterized as principal shall be
distributed, pro rata, to holders of Principal Receipts; amounts so
characterized as interest shall be distributed to holders of Coupon Receipts in
chronological order by maturity from the first to mature to the last. In the
event that no characterization as to principal or interest is made or the
characterization is not clear, the Trustee shall bring an action in a court of
competent jurisdiction within the State of New York seeking to have such court
determine the relative rights of the holders of Receipts to any such payments.
The expenses of such action incurred by the Trustee shall be paid by the holders
of the Receipts to the extent of the payments received by the Trustee.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Receipt is registrable in the Receipt Register,
upon surrender of this Receipt for registration of transfer at the corporate
trust office of the Trustee at _______________ in New York, New York, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by, the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Receipts
having the Stated Maturity Date set forth on the face hereof, of authorized
denominations of $____________ or greater multiples of $1,000, and evidencing
the same aggregate principal payment, will be issued to the designated
transferee or transferees. Under the Agreement, the Trustee is required when
making any payment to a holder of a Receipt, to round down such payment to the
nearest whole cent.
Receipts having the Stated Maturity Date set forth on the face hereof
are issuable only in registered form in authorized denominations. As provided in
the Agreement and subject to certain limitations therein set forth, such
Receipts are exchangeable for Receipts of the same series, due on the same
Stated Maturity Date and of a like aggregate face amount, as requested by the
holder surrendering the same.
For any such registration of transfer or exchange, the Trustee may
require payment of the then applicable service charge and of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Receipt for registration of transfer,
the Trustee and any agent of the Trustee may treat the person in whose name this
Receipt is registered as the owner hereof for all purposes, whether or not this
Receipt be overdue, and neither the Trustee nor any such agent shall be affected
by notice to the contrary.
A-II-2
<PAGE>
This Receipt shall not be valid or become obligatory for any purpose
unless and until duly executed by the Trustee by manual signature.
Dated: _____________________________,
as Trustee
By:__________________________
Authorized Signatory
A-II-3
<PAGE>
APPENDIX A-III
AMERICAN CORPORATE RECEIPTS, INC.
FORM OF CALLABLE PRINCIPAL RECEIPT
CALLABLE PRINCIPAL RECEIPT, SERIES ___
(ISSUABLE IN A MINIMUM DENOMINATION
OF $__________ OR GREATER MULTIPLES OF $1,000)
FOR PRINCIPAL PAYMENT DUE ON THE STATED MATURITY
DATE INDICATED BELOW OR ON PREVIOUS CALL FOR
REDEMPTION AND FOR INTEREST PAYMENTS
DUE AFTER THE FIRST CALL DATE
[Description of Bonds]
No.:.................... Face Amount:$.........................
CUSIP No.:.............. Stated Maturity Date:.................
First Call Date:.......
[HOLDER] or registered assigns, is the owner of the principal payment,
including the redemption premium, due in the Face Amount set forth above on the
above-named bonds (the "Bonds") on the indicated Stated Maturity Date or a
previous call for redemption together with interest payments in respect of such
principal due after the First Call Date set forth above. The sole obligors with
respect to such principal and interest payment are the issuer of the Bonds named
above (the "Issuer") or any other entity obligated to make payments to or on
behalf of the Issuer (or its trustee or other applicable fiduciary) with respect
to the Bonds. The Bonds are being held in a trust account by
________________________, as Trustee, pursuant to the terms of a Trust Agreement
(the "Agreement") dated as of ___________________, consisting of a Series Trust
Agreement together with the Standard Terms and Provisions of Trust Agreement
appended thereto, together with all other exhibits, schedules, appendices,
supplements and amendments thereto, between American Corporate Receipts, Inc.,
as Depositor, and the Trustee, pursuant to which this and other receipts (the
"Receipts") evidencing the right to receive either interest, principal or
interest and principal payments, including any redemption premium, on the Bonds
are executed and delivered by the Trustee. This Receipt is subject to the
provisions of and is entitled to the benefits of the Agreement, which may be
inspected by the holder hereof at the Designated Office of the Trustee in the
Borough of Manhattan, City of New York, State of New York. The owner of this
Receipt, by its acceptance hereof, agrees to be bound by the terms and
conditions of the Agreement.
A-III-1
<PAGE>
The Bond or Bonds on which the principal payment evidenced by this
Receipt is payable will be held in an account of the Trustee at [DTC in
book-entry credit form] [ ]. On or after the Stated Maturity Date of the
principal payment evidenced hereby, the Trustee will pay an amount equal to the
face amount of the principal payment evidenced hereby, less any amounts required
to be withheld from or by the Trustee pursuant to applicable law, to the
registered holder hereof in lawful money of the United States of America, (i) if
the registered holder is The Depository Trust Company ("DTC") or its nominee or
any successor depository or nominee thereof, by wire transfer of immediately
available funds, and (ii) if the registered holder is any other person, by check
in New York Clearing House funds sent by first-class mail to the address of the
registered holder hereof set forth in the Receipt Register, but only out of the
principal payment on the Bonds (including any redemption premium) received from
the Issuer or its trustee or paying agent for the Bonds.
On each interest payment date after the First Call Date, the Trustee
will pay an amount equal to a pro rata share of the interest payment due on such
principal on such interest payment date, less any amounts required to be
withheld from or by the Trustee pursuant to applicable law, to the registered
holder hereof in lawful money of the United States of America, (i) if the
registered holder is DTC or its nominee or any successor depository or nominee
thereof, by wire transfer or immediately available funds, and (ii) if the
registered holder is any other person, by check in immediately available funds
sent by first-class mail to the address of the registered holder hereof set
forth in the Receipt Register, but only out of interest payments received from
the Issuer on the Bonds.
THIS RECEIPT IS SUBJECT TO REDEMPTION AS PROVIDED IN THE AGREEMENT.
In the event the Trustee receives money or other property in connection
with the payment of principal (or actual notice that such moneys or other
property will be received), other than in connection with a redemption, prior to
the maturity date of the Callable Principal Receipts, the Trustee shall
distribute such moneys or other property in accordance with the characterization
given such payment by the Issuer of, or trustee for, the Bonds. Amounts so
characterized as principal shall be distributed, pro rata, to holders of
Callable Principal Receipts; amounts so characterized as interest shall be
distributed to holders of Coupon Receipts in chronological order by maturity
from the first to mature to the last. In the event that no characterization as
to principal or interest is made or the characterization is not clear, the
Trustee shall bring an action in a court of competent jurisdiction within the
State of New York seeking to have such court determine the relative rights of
the holders of Receipts to any such payments. The expenses of such action
incurred by the Trustee shall be paid by the holders of the Receipts to the
extent of the payments received by the Trustee.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Receipt is registrable in the Receipt Register,
upon surrender of the Receipt for registration of transfer at the corporate
trust office of the Trustee at ______________ in New York, New York, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by, the holder hereof or such holder's
attorney duly
A-III-2
<PAGE>
authorized in writing, and thereupon one or more new Receipts having the Stated
Maturity Date set forth on the face hereof, of authorized denominations of
$____________ or greater multiples of $1,000, of a like aggregate face amount,
will be issued to the designated transferee or transferees. Under the Agreement,
the Trustee is required, when making any payment to a holder of a Receipt, to
round down such payment to the nearest whole cent.
Receipts having the Stated Maturity Date set forth on the face hereof
are issuable only in registered form in authorized denominations. As provided in
the Agreement and subject to certain limitations therein set forth, such
Receipts are exchangeable for Receipts of the same series, due on the same
Stated Maturity Date and of a like aggregate face amount, as requested by the
holder surrendering the same.
For any such registration of transfer or exchange, the Trustee may
require payment of the then applicable service charge and of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Receipt for registration of transfer,
the Trustee and any agent of the Trustee may treat the person in whose name this
Receipt is registered as the owner hereof for all purposes, whether or not this
Receipt be overdue, and neither the Trustee nor any such agent shall be affected
by notice to the contrary.
This Receipt shall not be valid or become obligatory for any purpose
unless and until duly executed by the Trustee by manual signature.
Dated: ____________________________,
as Trustee
By:__________________________
Authorized Signatory
A-III-3
EXHIBIT 5.1
Opinion and Consent of Counsel
October 28, 1997
Re: American Corporate Receipts, Inc.
Registration Statement on Form S-3
American Corporate Receipts, Inc.
c/o Rickel Securities, Inc.
45 Essex Street
Millburn, New Jersey 07041
Dear Sirs:
We have acted as special counsel for American Corporate Receipts, Inc.,
a New Jersey corporation (the "Company") in connection with the preparation of
the Registration Statement of the Company on Form S-3 (the "Registration
Statement") filed with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended (the "Act") relating to the registration of
trust receipts fully described in the Registration Statement (collectively, the
"Securities"). The Securities are issuable in series (each, a "Series") under a
separate Trust Agreement by and between the Company and a trustee named therein
establishing an individual trust for each Series (each, a "Trust"). The
Securities are to be sold as set forth in the Registration Statement, and any
amendments thereto, and any prospectus supplement relating to each Series.
In so acting, we have examined, and relied as to matters of fact upon,
the originals, or copies certified or otherwise identified to our satisfaction,
of the Certificate of Incorporation and By-laws of the Company and such other
certificates (including certificates of officers of the Company), records,
instruments and documents, and have made such other and further investigations,
as we have deemed necessary or appropriate to enable us to express the opinion
set forth below. In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to originals of all
documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of such latter documents.
Based on the foregoing, we are of the opinion that when the issuance of
each Series of Securities has been duly authorized by appropriate corporate
action and the Securities of such Series have been duly executed, authenticated
and delivered in accordance with the
<PAGE>
American Corporate Receipts, Inc.
October 28, 1997
Page 2
related Trust Agreement and sold in the manner described in the Registration
Statement, any amendment thereto and the prospectus supplement relating to each
Series, the Securities of such Series will be legally issued and fully paid and
the holders of the Securities of such Series will be entitled to the benefits of
the related Trust Agreement, except as enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization, arrangement, fraudulent
conveyance, moratorium or other laws relating to or affecting the rights of
creditors generally and general principles of equity, and the possible
unavailability of specific performance or injunctive relief, regardless of
whether such enforceability is considered in a proceeding in equity or at law.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name wherever appearing in the
Registration Statement. In giving the foregoing consent, we do not admit that we
are in the category of persons whose consent is required under Section 7 of the
Act or the Rules and Regulations of the Securities and Exchange Commission
promulgated thereunder.
Very truly yours,
/s/ McCarter & English
-----------------------
McCarter & English
EXHIBIT 8.1
[FORM OF McCARTER & ENGLISH TAX OPINION]
____________, 1997
American Corporate Receipts, Inc.,
as Depositor
45 Essex Street
Millburn, New Jersey 07041
[---------------------------,
as Trustee
- ----------------------------
- ----------------------------]
Gentlemen:
We have acted as special tax counsel to American Corporate Receipts,
Inc., as Depositor (the "Depositor"), in connection with the issuance of Series
__ of the trust receipts (the "Receipts") pursuant to Registration Statement No.
33- _______ on Form S-3 ( the "Registration Statement") filed with the
Securities and Exchange Commission (the "Commission") pursuant to the Securities
Act of 1933, as amended (the "Act"). Capitalized terms not defined herein have
the same meanings given them in the Registration Statement.
Our opinion regarding anticipated federal income tax consequences to the
purchasers of Receipts is based on statutes, regulations, rulings and court
decisions now in effect. Because no final regulations, rulings or court
decisions have been issued that provide definitive interpretations of section
1286 of the Internal Revenue Code of 1986, as amended (the "Code") and the
interrelationship between section 1286 of the Code with certain Treasury
regulations promulgated under sections 1272, 1273, and 1275 of the Code in this
context, substantial uncertainty exists in the application of these provisions.
The opinions expressed herein are therefore subject to clarification or
modification.
<PAGE>
American Corporate Receipts, Inc. and
________________________________________
_________ __, 1997
Page 2
Based on the foregoing and on our review of such documents, statutes,
regulations, rulings, and court decisions as we have deemed appropriate, we are
of the opinion that:
1. The Trust will be classified as a grantor trust under subpart E, Part
I of subchapter J of the Code and not as a partnership or an association taxable
as a corporation.
2. The Receipts will be considered "stripped bonds" or "stripped
coupons," as appropriate, and a Receipt (whether purchased by a purchaser in an
original sale or in a subsequent transaction) will be treated, under section
1286 of the Code, solely for purposes of applying the original issue discount
rules of the Code to such purchaser, as if the Receipt held by such purchaser
was issued on the purchase date with original issue discount.
3. The Coupon Receipts will be treated as "stripped coupons," within the
meaning of section 1286 of the Code. Original issue discount (as defined below)
with respect to a Coupon Receipt will equal the excess of the amount payable at
maturity of the Coupon Receipts over the purchase price of such Coupon Receipts.
4. The Principal Receipts, other than possibly the Callable Principal
Receipts, will be treated as "stripped bonds," within the meaning of section
1286 of the Code. Original issue discount with respect to a Principal Receipts
will equal the excess of the amount payable at maturity of the Principal
Receipts over the purchase price of such Principal Receipts.
5. For purposes of calculating original issue discount and gain or loss
on disposition, the Callable Principal Receipts should be treated as a single
"stripped bond" (rather than multiple debt components representing separate
rights to receive principal and to receive interest on each semiannual interest
payment date subsequent to the first optional call date thereof, for which tax
basis must be separately allocated and original issue discount separately
calculated). In the event that the scheduled maturity date of a particular
Callable Principal Receipt is properly treated as the maturity date of such
Receipts for purposes of the original issue discount rules, such Callable
Principal Receipts should be regarded as evidencing a single "installment
obligation", within the meaning of the regulations promulgated by the U.S.
Treasury with respect to original issue discount. This treatment is based on an
interpretation of the interrelationship between section 1286 of the Code and
certain Treasury regulations promulgated under sections 1272, 1273, and 1275 of
the Code and is not free from doubt. It is uncertain whether the scheduled
maturity date of a particular Callable Principal Receipts will be viewed as the
maturity date of such Callable Principal Receipts for purposes of the original
issue discount rules (e.g., determination of yield to maturity and amount
payable at maturity), particularly where on the date of purchase of such
Callable Principal Receipts objective market factors suggest that in the absence
of any market change, it can be expected to be in the economic interest of the
issuer of the Bond to call such Bond on a date prior to scheduled maturity. It
is likely that future regulations adopted by the
<PAGE>
American Corporate Receipts, Inc. and
________________________________________
_________ __, 1997
Page 3
U.S. Treasury pursuant to its specific grant of regulatory authority under
section 1286 of the Code with respect to stripped rights with call options will
address this question.
6. In the case of Callable Principal Receipts with respect to which the
Bond is required to be redeemed prior to its stated maturity date, original
issue discount and yield to maturity will likely be required to be calculated by
taking into account events that have occurred prior to the purchase date of such
Callable Principal Receipts and therefore, as if the date on which the
redemption is to take place and the redemption price were the maturity date and
amount payable at maturity, respectively.
7. A purchaser's tax basis in a Receipt will equal the purchase price
for such Receipt increased by the portion of the original issue discount accrued
on such Receipt during the period such purchaser owns the Receipt and, in the
case of a Callable Principal Receipt, if properly treated as an installment
obligation maturing on the scheduled maturity date, reduced by any payments
actually received prior to maturity. Gain or loss on sale or at maturity of a
Receipt will be equal to the difference between the amount realized in such sale
or at maturity and the owner's tax basis at the time of sale or at maturity and
will be taxable capital gain or loss, if the Receipts are held as capital
assets. No gain or loss will be realized by a purchaser of holding such Receipts
until maturity.
No opinion is expressed as to any other consequence, for federal income
tax purposes, of ownership of Receipts. Moreover, no opinion is expressed with
respect to the treatment of Receipts for purposes of state or local income
taxes, or any other federal or state law, unless specifically provided herein.
Very truly yours,
McCarter & English
EXHIBIT 25.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints John C. Sabo and/or Susan P. Bowen, or either of
them, as his true and lawful attorney-in-fact and agent, with full power of
substitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments and post-effective amendments to that
certain Registration Statement of American Corporate Receipts, Inc. on Form S-3,
and to file the same with all exhibits thereto, and grants unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitute, may lawfully do or cause to be done by virtue of this
power of attorney.
SIGNATURE DATE
/S/ JOHN C. SABO October 28, 1997
-----------------------------
John C. Sabo
/S/ SUSAN P. BOWEN October 28, 1997
-----------------------------
Susan P. Bowen
SUBJECT TO COMPLETION, DATED ___________, 1997
Prospectus Supplement
(To Prospectus Dated __________, 1997)
AMERICAN CORPORATE RECEIPTS, INC.
AMERICAN CORPORATE RECEIPTS, SERIES ____
relating to
[Name of Obligor]
___% Bonds Series ______ Due ____
Coupon Receipts and
Callable Principal Receipts1
due _______ __, ____ or upon earlier redemption
American Corporate Receipts, Series ____ (the "Receipts"), evidence
ownership of future interest and principal payments due on the ____ % Bonds
Series ____ Due ____ (the "Bonds") issued by [Name of Obligor] (the "Obligor").
The Receipts consist of Coupon Receipts and Callable Principal Receipts relating
initially to $_________ aggregate principal amount (out of $_______________
aggregate principal amount originally issued in _______ 19____) of the Bonds, as
purchased by American Corporate Receipts, Inc. (the "Depositor") from Rickel
Securities, Inc. ("Rickel"), an affiliate of the Depositor, which acquired the
Bonds in the secondary market. The Bonds provide for [semi-annual] interest
payments due on _______ and ________ of each year ("Interest Payments") and for
a single payment of principal, together with any related premium payable upon
redemption, due on the earlier of ______, ___, or the date on which the Bonds
are redeemed by the Obligor (the "Callable Principal Payment"). No payment will
be made on any Receipt prior to the due date of the corresponding Interest
Payment or the due date of the Callable Principal Payment at maturity or upon
redemption of the Bonds. Each Callable Principal Receipt also includes the right
to receive any redemption premium and any related Interest Payments made after
__________, ___ (the "First Call Date") on a Bond. The Bonds will be held on
behalf of the purchasers of the related Receipts, as the beneficial owners
thereof (each, a Holder), by ________________, as trustee (the "Trustee"),
pursuant to a Trust Agreement, dated as of _______ __, ______, between the
Depositor and the Trustee (the "Trust Agreement").
THE RECEIPTS ARE ZERO COUPON OBLIGATIONS AND DO NOT ENTITLE THE HOLDERS
THEREOF TO ANY PERIODIC PAYMENT OF INTEREST, EXCEPT AFTER THE FIRST CALL DATE
UNDER THE CIRCUMSTANCES DESCRIBED HEREIN WITH RESPECT TO THE CALLABLE PRINCIPAL
RECEIPTS ONLY.
The Receipts are being offered in registered form. The Receipts are
being offered initially in book entry form only through The Depository Trust
Company, New York, New York ("DTC"), and purchasers will not receive
Certificates representing their ownership of the
- -----------------
1 This Exhibit has been prepared assuming that Callable Principal Receipts,
rather than Principal Receipts, will be issued with respect to this hypothetical
series.
<PAGE>
Receipts. See "CERTAIN INFORMATION REGARDING THE RECEIPTS - Book-Entry
Registration" in the Prospectus. The Receipts will be delivered in face amounts
of $1,000 and multiples thereof.
THE RECEIPTS WILL BE OFFERED AT SUBSTANTIAL DISCOUNTS FROM THEIR
NOTIONAL OR FACE AMOUNTS. SEE "CERTAIN RISK FACTORS" HEREIN FOR A DISCUSSION OF
PRICE VOLATILITY OF THE RECEIPTS AND "CERTAIN FEDERAL INCOME TAX CONSIDERATIONS"
IN THE PROSPECTUS FOR A DISCUSSION OF CERTAIN FEDERAL INCOME TAX CONSIDERATIONS,
INCLUDING IMPLICATIONS OF ORIGINAL ISSUE DISCOUNT AND POSSIBLE TAX WITHHOLDING.
There is currently no secondary market for the Receipts offered hereby.
Rickel Securities, Inc., as underwriter (in such capacity, the "Underwriter"),
intends to make a secondary market in the Receipts but has no obligation to do
so. There can be no assurance that a secondary market in the Receipts will
develop or, if it does develop, that it will be maintained. See "Certain Risk
Factors."
THIS PROSPECTUS SUPPLEMENT DOES NOT PROVIDE DETAILED INFORMATION WITH
RESPECT TO THE OBLIGOR. IN THE EVENT OF A DEFAULT ON A BOND, THE RISK OF LOSS
LIES ENTIRELY WITH THE HOLDERS OF THE RELATED RECEIPTS. THE OBLIGOR IS NOT
AFFILIATED WITH THE DEPOSITOR NOR IS THE OBLIGOR INVOLVED IN THIS OFFERING OF
RECEIPTS. SEE "CERTAIN RISK FACTORS" HEREIN AND "AVAILABLE INFORMATION REGARDING
THE OBLIGORS" IN THE PROSPECTUS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Receipts will be offered from time to time by the Underwriter in
negotiated transactions or otherwise at fixed or varying prices to be determined
at the time of sale.
The Prospectus Supplement should be retained for future reference.
RICKEL SECURITIES, INC.
The date of this Prospectus Supplement is _____________ ___, _______.
S-2
<PAGE>
This Prospectus Supplement does not contain complete information about
the Receipts offered hereby. Additional information is contained in the
Prospectus, and purchasers are urged to read both this Prospectus Supplement and
the Prospectus in full. Sales of the Receipts may not be consummated unless the
purchaser has received both this Prospectus Supplement and the Prospectus.
----------------
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR
EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICES OF THE RECEIPTS
AT LEVELS ABOVE THOSE THAT MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
-----------------
S-3
<PAGE>
CERTAIN RISK FACTORS
A prospective purchaser of the Receipts should be aware of the following
factors in evaluating the merits and risks of an investment therein.
1. PRICE VOLATILITY OF ZERO COUPON OBLIGATIONS AND POSSIBILITY
OF LOSS. The purchase at a discount of a Receipt will likely result in
greater price volatility than the purchase of an obligation of a similar
maturity which pays interest periodically. The Receipts are zero coupon
obligations. The market prices of zero coupon obligations, such as those
represented by Receipts, are particularly sensitive to fluctuations in
market interest rates. Thus, when market interest rates rise, absent
other factors such as changes in the perceived creditworthiness of the
Obligor on the underlying Bonds, there will be a sharp percentage fall
in the market price of Coupon Receipts relative to coupon bearing
instruments of a similar maturity. The market prices of Callable
Principal Receipts will be subject to similar volatility. Investors
should consider whether such potential secondary market price volatility
is in accordance with their investment needs.
2. NO DETAILED INFORMATION ABOUT OBLIGOR. This Prospectus
Supplement does not provide detailed information with respect to the
Obligor. See "AVAILABLE INFORMATION REGARDING THE OBLIGORS" in the
Prospectus. seq level2 \*arabic3. OBLIGOR IS ONLY PAYMENT SOURCE.
Proceeds of the Bonds held by the Trust are the sole source of payment
for the Receipts. The Bonds may be subject to laws permitting
bankruptcy, moratorium, reorganization or other actions which, in the
event of financial difficulties of the Obligor, could result in delays
in payment or in non-payment of the Bonds and consequently late payment
or non-payment of Receipts. In certain cases, the bankruptcy,
reorganization or moratorium could result in non-payment of one or more
Coupon Receipts while the related Callable Principal Receipts are paid
in part or in full.
4. LACK OF AFFILIATION BETWEEN THE OBLIGOR AND THE DEPOSITOR.
The Depositor is not affiliated with the Obligor and, although the
Depositor has no knowledge of any event that would have a material
adverse effect on the Obligor, any such event is beyond the Depositor's
ability to control and may be difficult to predict.
The Obligor is not involved in the offering of the receipts and
has no obligation with respect to the receipts, including any obligation
to take the needs of the Depositor or of holders of the receipts into
consideration for any reason. The Depositor will not receive any of the
proceeds of this Offering and is not responsible for, and has not
participated in, the determination of the timing of, prices for, or
quantities of, the receipts to be issued in this Offering or in the
determination or calculation of the principal amount to be paid at
maturity. The Obligor is not involved with the administration, marketing
or
S-4
<PAGE>
trading of the receipts and has no obligations with respect to the
principal amount to be paid to holders of receipts at maturity.
5. NO ASSURANCE OF LIQUIDITY. There is no assurance that any
secondary market will develop or be maintained for any Receipt. While
Rickel intends to maintain a secondary market for Receipts, it is not
obligated to do so. There can be no assurance that a secondary market in
the Receipts will develop or, if it does develop, that it will remain in
existence for any period of time. The absence of a secondary market
would adversely affect the liquidity of the Receipts. Even if such a
secondary market develops, the secondary market for securities of a type
similar to the Receipts has at times been characterized by high
volatility, with widely disparate price quotes and wide spreads between
bid and asked prices. Such secondary market conditions may create
difficulties for investors who need to obtain timely daily price quotes
with respect to the Receipts or for investors who wish to dispose of
Receipts.
6. CERTAIN TAX CONSIDERATIONS. Under Section 1286 of the Code,
the separation of the right to receive principal payments on a bond from
the right to receive interest payments on the bond results in the
creation of a "stripped bond" (with respect to the principal payments)
and "stripped coupons" (with respect to the interest payments). As a
result of the separation of the interest component of a Bond from the
principal component, the resulting Receipts will be treated for tax
purposes as being issued on the purchase date with original issue
discount ("OID"). Under the relevant tax rules, OID accrues for tax
purposes on a daily basis over the term of the Receipt. It is essential
that each potential purchaser of Receipts understand that OID accrues
(and taxable income results) in any year regardless of whether any cash
payment is made to the Holder with respect to the Receipt or Receipts
that he, she or it holds. Consequently, Holders of Receipts who are
subject to income taxation are likely to recognize taxable income in the
form of accrued OID in tax years when they receive no cash distributions
with respect to the Receipts. Any purchaser of Receipts must consider
whether he, she or it has the cash resources to meet the tax obligations
resulting from the accrual of OID with respect to the Receipts in
taxable years when no cash will be distributed with respect to the
Receipts.
7. BONDS SUBJECT TO REDEMPTION. The Bonds are subject to
redemption prior to maturity at the option of the Obligor on or after
the First Call Date, in whole or in part. Such redemption will cause the
retirement of all or a pro rata portion of the Callable Principal
Receipts, as applicable. There can be no assurance, however, that all or
any portion of the Callable Principal Receipts will be redeemed on the
First Call Date, or on any other date prior to their maturity.
S-5
<PAGE>
THE OBLIGOR
According to publicly available documents, the Obligor, a corporation,
is primarily in the business of . The Obligor is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended. Accordingly,
the Obligor files reports, proxy statements and other information with the
Securities and Exchange Commission. Copies of such reports, proxy statements and
other information may be inspected and copied at certain offices of the
Commission and at the offices of the [Exchange] [NASD] at the addresses listed
under "Available Information" in the Prospectus.
THIS PROSPECTUS SUPPLEMENT RELATES ONLY TO THE RECEIPTS OFFERED HEREBY
AND DOES NOT RELATE TO ANY SECURITIES OF THE OBLIGOR. ALL DISCLOSURES CONTAINED
IN THIS PROSPECTUS SUPPLEMENT REGARDING THE OBLIGOR ARE DERIVED FROM THE
PUBLICLY AVAILABLE DOCUMENTS DESCRIBED IN THE PRECEDING PARAGRAPH. NEITHER THE
DEPOSITOR NOR THE UNDERWRITER HAVE PARTICIPATED IN THE PREPARATION OF THOSE
DOCUMENTS, OR MADE ANY DUE DILIGENCE INQUIRY WITH RESPECT TO THE INFORMATION
PROVIDED THEREIN. THERE CAN BE NO ASSURANCE THAT ALL EVENTS CURRENT PRIOR TO THE
DATE HEREOF THAT WOULD EFFECT THE OBLIGOR (INCLUDING EVENTS THAT WOULD EFFECT
THE ACCURACY OR COMPLETENESS OF THE PUBLICLY AVAILABLE DOCUMENTS DESCRIBED IN
THE PRECEDING PARAGRAPH) HAVE BEEN PUBLICLY DISCLOSED.
THE RECEIPTS
GENERAL
The Receipts consist of Coupon Receipts evidencing ownership of future
interest payments ("Interest Payments") and Callable Principal Receipts
evidencing ownership of future payments of principal and redemption premium, if
any ("Callable Principal Payments"), and all Interest Payments due after the
First Call Date and prior to redemption or maturity. Payments of interest and
principal will come solely from payments of principal, interest and premium, if
any, on the Bonds made by the Obligor. An investor purchasing Receipts should
avail itself of the same information concerning the Obligor as it would if it
were purchasing Bonds. See "AVAILABLE INFORMATION REGARDING THE OBLIGORS" in the
Prospectus.
Each Coupon Receipt is payable on or after the due date of the
corresponding Interest Payment on the Bonds, subject to receipt thereof by the
Trustee. The principal portion of each Callable Principal Receipt and any
redemption premium is payable on or after the earlier of the due date of the
corresponding Callable Principal Payment, which is the maturity date of the
Bonds, and the date on which the Bonds are redeemed by the Obligor, subject to
receipt of such principal and any redemption premium by the Trustee. Each
Callable Principal Receipt includes the right to receive Interest Payments due
on each _____ and _____ occurring after the First Call Date up to and including
the maturity date of the Bonds or the date on which the Bonds are redeemed by
the Obligor. No Interest Payments will be made on Callable Principal Receipts
S-6
<PAGE>
after any such redemption. The face amount of each Receipt will be equal to the
payment or payments to be received thereon, except that the face amount of
Callable Principal Receipts will not include (i) the amount of any redemption
premium which would be paid in the event of a redemption prior to maturity or
(ii) any Interest Payments which may be made if the underlying Bonds are not
called for redemption on the First Call Date. See "Redemption of Bonds
Underlying Callable Principal Receipts."
The Receipts are being offered at substantial discounts from their face
amounts. See "CERTAIN FEDERAL INCOME TAX CONSIDERATIONS" in the Prospectus for a
discussion of certain income tax consequences.
Pursuant to the Trust Agreement, the Bonds underlying the Receipts will
be held by the Trustee for the benefit of the Holders in the form of physical
Receipts or as book-entry credits to an account of the Trustee at DTC. The
Obligor is not a party to the Trust Agreement. Each Holder of a Receipt, by its
acceptance thereof, agrees to be bound by the terms and conditions of the Trust
Agreement.
THE RECEIPTS OFFERED HEREBY ARE DIFFERENT FROM, AND NOT EXCHANGEABLE
FOR, ANY OTHER SERIES OF RECEIPTS OR ANY OTHER RECEIPT OR CERTIFICATE EVIDENCING
OWNERSHIP OF FUTURE INTEREST, PRINCIPAL AND PREMIUM, IF ANY, PAYMENTS DUE ON
OBLIGOR OBLIGATIONS, AND ARE SUBJECT TO THE TERMS AND CONDITIONS OF THE TRUST
AGREEMENT.
The Receipts will be delivered in registered form. The Receipts are
being offered initially in book entry form only through DTC, in face amounts of
$1,000 and multiples thereof, and purchasers will not receive physical Receipts
representing their ownership of Receipts.
THE BONDS
The following description has been obtained from the Obligor's
Registration Statement on Form S-__ dated _______ __, ____ (No. 33-______)
pursuant to which the Bonds were originally offered and sold to the public. The
following summary of certain provisions of the Indenture (as defined below) and
the Bonds does not purport to be complete, and such descriptions are qualified
in their entirety by reference to all of the provisions of the Indenture and the
Bonds, as the case may be (including in each case the definitions therein of
certain terms). Although the Depositor believes that the descriptions contained
herein are accurate, the Depositor has not independently confirmed the accuracy
of each of the statements made herein.
GENERAL
The Bonds have been issued under an Indenture dated (the "Indenture"),
between the Obligor and ____________, as the trustee (the "Bond Trustee").
Interest on the Bonds will be payable [semi-annually] on ____________
and _____________. The Bonds will mature on ______________ __, , unless redeemed
earlier at the option of the Obligor.
S-7
<PAGE>
The Bonds are not secured by the assets of the Obligor or otherwise and
do not have the benefit of a sinking fund for the retirement of principal. Only
capital stock of the Obligor is junior in right of payment to the Bonds.
REDEMPTION AT THE OPTION OF THE OBLIGOR
The Bonds are redeemable at the option of the Obligor, in whole or in
part, at any time after ________, _____, and in certain circumstances, sooner,
on not less than 30 days notice, at an initial redemption price equal to
________________, declining in equal annual increments to ____% in the tenth
year together with accrued interest to the redemption date.
SUBORDINATION
The principal and premium, if any, and interest on the Bonds will be
subordinated and junior in right of payment to the prior payment in full of all
Senior Indebtedness of the Obligor. Senior Indebtedness is defined as any and
all indebtedness of the Obligor except any particular indebtedness which
expressly provides in the instrument creating such indebtedness that such
indebtedness shall be subordinate or rank pari passu in right of payment of the
Bonds. Upon any distribution of assets of the Obligor in connection with any
dissolution, winding up, liquidation, reorganization, bankruptcy or other
similar proceeding relative to the Obligor, holders of all Senior Indebtedness
will first be entitled to receive payment in full before any distribution to the
holders of the Bonds. No direct or indirect payment may be made by the Obligor
of principal, premium or interest on the Bonds and no Bonds may be acquired by
the Obligor for cash or property if at the time of such payment or acquisition
there exists a default in the payment of all or part of principal, premium or
interest on any Senior Indebtedness and such default has not been cured or
unless the effect of this provision has been waived by the holders of such
Senior Indebtedness.
RESTRICTIONS ON SALE OF ASSETS
The Indenture also provides that the Obligor will not sell, assign,
transfer, or otherwise dispose of any Capital Stock of any subsidiary or
securities convertible into, or options, warrants, or rights to subscribe for or
to purchase any Capital Stock of any such subsidiary, except for (i) sales on
other dispositions made to qualify a person to serve as a director of any such
subsidiary; (ii) sales or other dispositions of fair market value in cash (as
determined by the Board of Directors of the Obligor) if, after giving effect
hereto and assuming conversion of any convertible securities, the Obligor will
own not less than 80% of the Capital Stock of such subsidiary; (iii) sales or
other dispositions in connection with a merger or consolidation as to which the
Obligor will have the same or greater proportionate ownership in the resulting
or surviving entity than that which it had in such subsidiary; (iv) sales or
other dispositions made in compliance with an order of a court or regulatory
authority of competent jurisdiction; or (v) any sale by any subsidiary of shares
of its Capital Stock to the Obligor.
S-8
<PAGE>
MERGER, CONSOLIDATION OR SALE OF ASSETS; SUCCESSOR CORPORATION
The Obligor has agreed that it will not merge or consolidate with, or
sell all or substantially all of its assets to, any person, firm or corporation
unless it is the surviving corporation in such transaction and, immediately
thereafter, is not in default under the Indenture or, if it is not the surviving
corporation, the successor corporation expressly assumes the Obligor's
obligations under the Indenture and, immediately after such transaction, the
successor corporation is not in default under the Indenture. Any successor
corporation shall assume by supplemental indenture all of the obligations of the
Obligor under the Bonds and the Indenture.
EVENTS OF DEFAULT
Under the Indenture, an "Event of Default" on the Bonds occurs if:
(i) the Obligor defaults in the payment of interest on the Bonds when
the same becomes due and the default continues for a period of 30 days, whether
or not such payments shall be prohibited by the provisions of the Indenture;
(ii) the Obligor defaults in the payment of the principal of (or
premium, if any, on) the Bonds when the same becomes due and payable at
maturity, upon acceleration, redemption or otherwise, whether or not such
payment shall be prohibited by the provisions of the Indenture;
(iii) the Obligor fails to comply with any of its agreements or
covenants in, or provisions of, or the Indenture, and the default continues for
the period and after the notice specified below;
(iv) a final judgment or final judgments for the payment of money are
entered by a court or courts of competent jurisdiction against the Obligor or
its subsidiaries which remain undischarged and unbonded for a period (during
which execution shall not be effectively stayed) of 60 days and have not been
appealed, provided that the aggregate of all such judgments (to the extent not
paid or covered by insurance) exceeds $3,000,000;
(v) the Obligor or any subsidiary or subsidiaries, pursuant to or within
the meaning of any Bankruptcy Law:
(A) commences a voluntary case or proceeding,
(B) consents to the entry of an order for relief against it
in an involuntary case or proceeding,
(C) consents to the appointment of a Custodian of it or for
all substantially all of its property,
(D) makes a general assignment for the benefit of its
creditors, or
S-9
<PAGE>
(E) generally is not paying its debts as the same becomes
due unless such debts are the subject of a bona fide
dispute; or
(vi) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Obligor or any subsidiary or
subsidiaries in an involuntary case or proceeding,
(B) appoints a Custodian of the Obligor or any subsidiary or
subsidiaries or for all or substantially all of its
property; or
(C) orders the liquidation of the Obligor or any subsidiary
or subsidiaries; and
in each case the order or decree remains unstayed and in effect for 60 days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator, sequestrator or similar official under
any Bankruptcy Law.
A default under clause (iii) above is not an Event of Default until the
Bond Trustee notifies the Obligor in writing, or the Holders of at least 25% in
principal amount of the Bonds then outstanding notify the Obligor and the Bond
Trustee in writing, of the default, and the Obligor does not cure the Default
within 30 days after receipt of the notice. The notice must specify the default,
demand that it be remedied and state that the notice is a "Notice of Default".
Such notice shall be given by the Bond Trustee if so requested in writing by the
Holders of at least 25% in principal amount of the Bonds then outstanding. Any
notice required to be delivered by the Bond Trustee to the Obligor shall be
given promptly after the Bond Trustee becomes aware of such Default or is
requested by the Holders to deliver such notice.
MODIFICATION AND WAIVER
The Obligor may omit in any particular instance to comply with any
covenant or condition as set forth in the Indenture if before the time for such
compliance the holders of 66 2/3% in aggregate principal amount of the Bonds at
the time outstanding shall either waive such compliance in such instance or
generally waive compliance with such covenant or condition, but no such waiver
may extend to or affect such covenant or condition except to the extent so
expressly waived, and, until such waiver has become effective, the obligations
of the Obligor and the duties of the Bond Trustee in respect of any such
covenant will remain in full force and effect. No Supplemental Indenture will
affect the seniority rights of the holders of Senior Indebtedness without the
consent of such holders.
Most of the terms of the Indenture and the Bond may be modified with
the written consent of two-thirds of the Holders. However, each holder must
agree to an extension of maturity, a reduction in conversion price or redemption
percentage or a reduction in the aforesaid percentage required for modification.
S-10
<PAGE>
THE TRUSTEE
_________________ will act as Trustee under the Trust Agreement. The
designated office of the Trustee for the transfer, exchange or withdrawal of
Receipts is ______________, New York, New York. Notwithstanding the foregoing,
under the DTC Book Entry Only System, transfers and exchange of Receipts will be
accomplished as described under "Certain Information Regarding the Receipts -
Book-Entry Registration" in the Prospectus.
Any Holder presenting Receipts for surrender or registration of transfer
or exchange may be required to file such proof of residence, or other matters or
information, to execute such certificates and to make such representations and
warranties and such assurances, including a signature guaranty, as the Trustee
may reasonably deem necessary or proper. The Trustee may withhold the delivery
or delay the surrender of a registration of transfer or exchange of any Receipts
until such proof or other information is filed, such receipts are executed or
such representations and warranties are made.
THE OFFERING
The Receipts will be transferred by the Depositor to Rickel Securities,
Inc. in exchange for the Bonds, and there will be no cash proceeds received by
the Depositor from the sale of the Receipts. Rickel Securities, Inc. has
purchased each Bond in the secondary market at a price that is lower than the
aggregate price expected to be realized by Rickel Securities, Inc. from its sale
of the Coupon Receipts and Callable Principal Receipts related to such Bond. The
difference between the price paid by Rickel Securities, Inc. to purchase each
Bond in the secondary market and the aggregate proceeds to be realized by Rickel
Securities, Inc. from the sale of the Receipts related to such Bond, less costs
and expenses, represents underwriting compensation to Rickel Securities, Inc. No
other remuneration will be received by Rickel Securities, Inc. or the Depositor
in connection with the offering.
The Receipts are being offered and sold by Rickel Securities, Inc.
pursuant to this Prospectus Supplement in negotiated transactions with
investors. The actual price of the Receipts will be determined at the times of
such sales and are expected to vary for different Receipts.
The obligation of Rickel Securities, Inc. to deliver the Receipts is
subject to certain conditions, including, among others, the receipt of certain
legal opinions described in the Prospectus.
Prior to the Offering, there has been no public market for the Receipts
and no assurance can be given that such a market will develop as a result of
this offering.
S-11
<PAGE>
COUPON RECEIPTS
Item CUSIP Aggregate Face
Number Due Date Number Amount Offered
- ------ -------- ------ --------------
CALLABLE PRINCIPAL RECEIPTS
Item CUSIP Aggregate Face
Number Due Date Number Amount Offered
- ------ -------- ------ --------------
First Call Date
---------------
------- ---, -----
