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As filed with the Securities and Exchange Commission on April 22, 1997
Registration No. 33-55860
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Post-Effective Amendment No. 4
to
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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STRUCTURED PRODUCTS CORP.
(Exact name of Registrant as specified in its charter)
Delaware 13-3692801
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Seven World Trade Center
New York, New York 10048
(212) 783-6645
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
Zachary Snow, Esq., Secretary
Structured Products Corp.
Seven World Trade Center
New York, New York 10048
(212) 783-6645
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to:
Adam W. Glass
Orrick, Herrington & Sutcliffe LLP
666 Fifth Avenue
New York, New York 10103
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Approximate date of commencement of proposed sale to the public: From time to
time after this Registration Statement becomes effective as determined by market
conditions.
If the only securities being registered on this form are being 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, check the following box. /x/
If this Form is filed to register additional securities from an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. / /
If this Form is post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act of 1933, please check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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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 this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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Page 1 of ____
Exhibit Index is on page ____.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION DATED APRIL __, 1997
Prospectus
Trust Certificates
Trust Shares
(Issuable in Series)
Structured Products Corp.
Depositor
The Trust Certificates or Shares (either the "Certificates") offered hereby and
by supplements (each a "Prospectus Supplement") to this Prospectus will be
offered from time to time in one or more series (each a "Series") and in one or
more classes within each such Series (each a "Class") with an aggregate initial
public offering price or purchase price of up to $1,000,000,000 or the
equivalent thereof in one or more foreign or composite currencies, including the
European Currency Unit ("ECU"). Certificates of each respective Series and Class
will be offered on terms to be determined at the time of sale as described in
the related Prospectus Supplement accompanying the delivery of this Prospectus.
Certificates may be sold for United States dollars or for one or more foreign or
composite currencies, and the principal of, premium, if any, and any interest to
be distributed in respect of Certificates may be payable in United States
dollars or in one or more foreign or composite currencies. Each Series and Class
of Certificates may be issuable as individual securities in registered form
without coupons ("Registered Certificates") or as one or more global securities
in registered form (each a "Global Security").
Each Series of Certificates will represent in the aggregate the entire
beneficial ownership interest in a publicly issued, fixed income debt security
or a pool of such debt securities (the "Term Assets") issued by one or more
issuers (the "Term Assets Issuers"), together with certain other assets
described herein and in the related Prospectus Supplement (such assets, together
with the Term Assets, the "Deposited Assets"), to be deposited in a trust (the
"Trust") for the benefit of holders of Certificates of such Series
("Certificateholders") by Structured Products Corp. (the "Company") pursuant to
a Trust Agreement and a series supplement thereto with respect to any given
Series (collectively, the "Trust Agreement") among the Company, the
administrative agent, if any, (the "Administrative Agent") and the trustee (the
"Trustee") named in the related Prospectus Supplement. The Term Assets will be
purchased by the Company in the secondary market (either directly or through an
affiliate of the Company) and will not be acquired either from the issuer with
respect thereto or pursuant to any distribution by or agreement with any such
issuer. The Term Assets discussed herein and in the related Prospectus
Supplement represent the obligation of one or more corporations, banking
organizations or insurance companies organized under the laws of the United
States or any State, which are subject to the information requirements of the
Securities Exchange Act of 1934, as amended, and which, in accordance therewith
file reports and other information with the Securities and Exchange Commission.
If so specified in the related Prospectus Supplement, the Trust for a Series of
Certificates may also include, or the Certificateholders of such Certificates
may have the benefit of, any combination of insurance policies, letters of
credit, reserve accounts and other types of rights or assets designed to support
or ensure the servicing and distribution of amounts due in respect of the
Deposited Assets (collectively, "Credit Support"). See "Description of
Certificates" and "Description of Deposited Assets and Credit Support".
Each Class of Certificates of any Series will represent the right, which may be
senior to those of one or more of the other Classes of such Series, to receive
specified portions of payments of principal, interest and certain other amounts
on the Deposited Assets in the manner described herein and in the related
Prospectus Supplement. A Series may include two or more Classes differing as to
the timing, sequential order or amount of distributions of principal, interest
or premium and one or more Classes within such Series may be subordinated in
certain respects to other Classes of such Series.
Except as otherwise provided herein and in the applicable prospectus supplement,
the Company's only obligations with respect to each Series of Certificates will
be, pursuant to certain representations and warranties concerning the Deposited
Assets, to assign and deliver the Deposited Assets and certain related documents
to the applicable Trustee and, in certain cases, to provide for the Credit
Support, if any. The principal obligations of an Administrative Agent, if any is
named in the applicable Prospectus Supplement, with respect to a Series of
Certificates will be pursuant to its contractual administrative obligations and,
only as and to the extent provided in the related Prospectus Supplement, its
obligation to make certain cash advances in the event of payment delinquencies
on the Deposited Assets. See "Description of the Certificates--Advances in
Respect of Delinquencies".
The Certificates of each Series will not represent an obligation of or interest
in the Company, any Administrative Agent or any of their respective affiliates,
except to the limited extent described herein and in the related Prospectus
Supplement. Neither the Certificates nor the Deposited Assets (unless, and only
as and to the extent otherwise specified in such Prospectus Supplement) will be
guaranteed or insured by any governmental agency or instrumentality, or by the
Company, any Administrative Agent or their respective affiliates.
Prospective investors should consider the factors set forth under "Special
Considerations".
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The Certificates may be offered and sold to or through underwriters, through
dealers or agents or directly to purchasers, as more fully described under "Plan
of Distribution" and in the related Prospectus Supplement. This Prospectus may
not be used to consummate sales of Certificates offered hereby unless
accompanied by a Prospectus Supplement.
The date of this Prospectus is April __, 1997.
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PROSPECTUS SUPPLEMENT
The Prospectus Supplement relating to a Series of Certificates to be
offered thereby and hereby will set forth, among other things, the following
with respect to such Series: (a) the specific designation and aggregate
principal amount, (b) the currency or currencies in which the principal (the
"Specified Principal Currency"), premium, if any (the "Specified Premium
Currency"), and any interest (the "Specified Interest Currency") are
distributable (the Specified Principal Currency, the Specified Premium Currency
and the Specified Interest Currency being collectively referred to as the
"Specified Currency"), (c) the number of Classes of such Series and, with
respect to each Class of such Series, its designation, aggregate principal
amount or, if applicable, notional amount and authorized denominations, (d)
certain information concerning the type, characteristics and specifications of
the Deposited Assets and any Credit Support for such Series or Class, (e) the
relative rights and priorities of each such Class (including the method for
allocating collections from the Deposited Assets to the Certificateholders of
each Class and the relative ranking of the claims of the Certificateholders of
each Class to such Deposited Assets), (f) the name of the Trustee and the
Administrative Agent, if any, for such Series, (g) the Pass Through Rate (as
defined below) or the terms relating to the applicable method of calculation
thereof, (h) the time and place of distribution (each such date, a "Distribution
Date") of any interest, premium (if any) and/or principal, (i) the date of
issue, (j) the scheduled final Distribution Date, if applicable, (k) the
offering price, (l) any exchange, whether mandatory or optional, the redemption
terms and any other specific terms of Certificates of each such Series or Class.
See "Description of Certificates--General" for a listing of other items that may
be specified in the applicable Prospectus Supplement.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Securities and
Exchange Commission (the " Commission"). Reports and other information
concerning the Company can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's Regional Offices at Seven World
Trade Center, New York, New York 10048, and Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can
be obtained upon written request addressed to the Commission, Public Reference
Section, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
The Company does not intend to send any financial reports to Certificateholders.
The Company has filed with the Commission a registration statement on
Form S-3 (together with all amendments and exhibits, the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act"),
relating to the Certificates. This Prospectus does not contain all the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission. For
further information, reference is hereby made to the Registration Statement.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the Certificates shall be deemed to be
incorporated by reference in this Prospectus. Any statement contained herein or
in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy
of this Prospectus is delivered, on the written or oral request of any such
person, a copy of any or all of the documents incorporated herein by reference,
except the exhibits to such documents (unless such exhibits are specifically
incorporated by reference in such documents). Written requests for such copies
should be directed to the Secretary of Structured Products Corp., 32nd Floor,
Seven World Trade Center, New York, New York 10048. Telephone requests for such
copies should be directed to the Secretary of Structured Products Corp. at (212)
783-6645.
REPORTS TO CERTIFICATEHOLDERS
Except as otherwise specified in the applicable Prospectus Supplement,
unless and until Definitive Certificates are issued , on each Distribution
Date unaudited reports containing information concerning the related Trust 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 Certificates. See
"Description of Certificates--Global Securities" and "Description of the Trust
Agreement--Reports to Certificateholders; Notice". Such reports will not
constitute financial statements prepared in accordance with generally accepted
accounting principles. The Company, on behalf of each Trust, will cause to be
filed with the Commission such periodic reports as are required under the
Exchange Act.
IMPORTANT CURRENCY INFORMATION
Purchasers are required to pay for each Certificate in the Specified
Principal Currency for such Certificate. Currently, there are limited facilities
in the United States for conversion of U.S. dollars into foreign currencies and
vice versa, and banks do not currently offer non-U.S. dollar checking or savings
account facilities in the United States. However, if requested by a prospective
purchaser of a Certificate having a Specified Principal Currency other than U.S.
dollars, Salomon Brothers Inc (the "Offering Agent") will arrange for the
exchange of U.S. dollars into such Specified Principal Currency to enable the
purchaser to pay for such Certificate. Such request must be made on or before
the fifth Business Day (as defined below) preceding the date of delivery of such
Certificate or by such later date as is determined by the Offering Agent. Each
such exchange will be made by the Offering Agent on such terms and subject to
such conditions, limitations and charges as the Offering Agent may from time to
time establish in accordance with its regular foreign exchange practice. All
costs of exchange will be borne by the purchaser.
References herein to "U.S. dollars", "U.S.$", USD, "dollar" or "$" are
to the lawful currency of the United States.
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SPECIAL CONSIDERATIONS
Limited Liquidity. There will be no market for any Series (or Class
within such Series) of Certificates prior to the issuance thereof, and there can
be no assurance that a secondary market will develop or, if it does develop,
that it will provide Certificateholders with liquidity of investment or will
continue for the life of such Certificates.
Certain Legal Aspects. The applicable Prospectus Supplement may set
forth certain legal considerations that are applicable to a specific Series (or
Class or Classes within such Series) of Certificates being offered in connection
with that Prospectus Supplement or the assets deposited in or assigned to the
related Trust.
Limited Obligations and Interests. The Certificates will not represent
a recourse obligation of or interest in the Company or any of its affiliates.
Unless otherwise specified in the applicable Prospectus Supplement, the
Certificates of each Series will not be insured or guaranteed by any government
agency or instrumentality, the Company, any Person affiliated with the Company
or the Issuer, or any other Person. The obligations, if any, of the Company with
respect to the Certificates of any Series will only be pursuant to certain
limited representations and warranties. The Company does not have, and is not
expected in the future to have, any significant assets with which to satisfy any
claims arising from a breach of any representation or warranty. If, for example,
the Company were required to repurchase a Term Asset with respect to which the
Company has breached a representation or warranty, its only sources of funds to
make such repurchase would be from funds obtained from the enforcement of a
corresponding obligation, if any, on the part of the seller of such Term Asset
to the Company, or from a reserve fund established to provide funds for such
repurchases. The Company has no obligation to establish or maintain any such
reserve fund.
Credit Support; Limited Assets. Although the Trust for any Series (or
Class of such Series) of Certificates may include, or the Certificateholders of
such Certificates may have the benefit of, certain assets which are designed to
support the payment upon, or otherwise ensure the servicing or distribution with
respect to, the Deposited Assets related to such Series or Class as described in
the related Prospectus Supplement, the Certificates do not represent obligations
of the Company, any Administrative Agent or any of their affiliates and, unless
otherwise specified in the applicable Prospectus Supplement, are not insured or
guaranteed by the Company, any Administrative Agent, any of their affiliates or
any other person or entity. Accordingly, Certificateholders' receipt of
distributions in respect of the Certificates will depend entirely on the
performance of and the Trust's receipt of payments with respect to the Deposited
Assets and any Credit Support identified in the related Prospectus Supplement.
See "Description of Deposited Assets and Credit Support".
Maturity and Redemption Considerations. The timing of distributions of
interest, premium (if any) and principal of any Series (or of any Class within
such Series) of Certificates is affected by a number of factors, including the
performance of the related Deposited Assets, the extent of any early redemption,
repayment or extension of maturity with respect to the related Term Assets and
the manner and priority in which collections from such Term Assets and any other
Deposited Assets are allocated to each Class of such Series. Certain of these
factors may be influenced by a variety of accounting, tax, economic, social and
other factors. The related Prospectus Supplement will discuss any calls, puts or
other redemption options, any extension of maturity provisions and certain other
terms applicable to such Term Assets and any other Deposited Assets. See also
"Maturity and Yield Considerations".
Tax Considerations. The Federal income tax consequences of the
purchase, ownership and disposition of the Certificates and the tax treatment of
the Trust will depend on the specific terms of the Certificates, the Trust, any
Credit Support and the Deposited Assets. Upon the issuance of each Series of
Certificates, the Depositor will cause to be filed with the Commission a Current
Report on Form 8-K containing an opinion of counsel as to Federal income tax
matters. See the description under "Federal Income Tax Considerations" in the
related Prospectus Supplement.
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Ratings of the Certificates. At the time of issue, the Certificates of
any given Series (or each Class of such Series that is offered hereby) will be
rated in one of the investment grade categories recognized by one or more
nationally recognized rating agencies (a "Rating Agency"). Unless otherwise
specified in the applicable Prospectus Supplement, the rating of any Series or
Class of Certificates is based primarily on the related Deposited Assets and any
Credit Support and the relative priorities of the Certificateholders of such
Series or Class to receive collections from, and to assert claims against, the
Trust with respect to such Deposited Assets and any Credit Support. The rating
is not a recommendation to purchase, hold or sell Certificates, inasmuch as such
rating does not comment as to market price or suitability for a particular
investor. There can be no assurance that the rating will remain for any given
period of time or that the rating will not be lowered or withdrawn entirely by
the Rating Agency if in its judgment circumstances in the future so warrant. Any
Class or Classes of a given Series of Certificates may not be offered pursuant
to this Prospectus, in which case such Class or Classes may or may not be rated
in an investment grade category by a Rating Agency.
Global Securities. Unless otherwise specified in the related Prospectus
Supplement, the Certificates of each Series (or, if more than one Class exists,
each Class of such Series) will initially be represented by one or more Global
Securities deposited with, or on behalf of, a Depositary (as defined below) and
will not be issued as individual definitive Certificates to the purchasers of
such Certificates. Consequently, unless and until such individual definitive
Certificates of a particular Series or Class are issued, such purchasers will
not be recognized as Certificateholders under the Trust Agreement. Hence, until
such time, such purchasers will only be able to exercise the rights of
Certificateholders indirectly through the Depositary and its respective
participating organizations and, as a result, the ability of any such purchaser
to pledge that Certificate to persons or entities that do not participate in the
Depositary's system, or to otherwise act with respect to such Certificate, may
be limited. See "Description of Certificates-- Global Securities" and any
further description contained in the related Prospectus Supplement.
Currency Risks. The Certificates of any given Series (or Class within
such Series) may be denominated in a currency other than U.S. dollars to the
extent specified in the applicable Prospectus Supplement. This Prospectus does
not describe all the risks of an investment in such Certificates, and the
Company disclaims any responsibility to advise prospective purchasers of such
risks as they exist from time to time. Prospective purchasers of such
Certificates should consult their own financial and legal advisors as to the
risks entailed by an investment in such Certificates denominated in a currency
other than U.S. dollars. See "Currency Risks".
Passive Nature of the Trust. The Trustee with respect to any Series of
Certificates will hold the Deposited Assets for the benefit of the
Certificateholders. Each Trust will generally hold the related Deposited Assets
to maturity and not dispose of them, regardless of adverse events, financial or
otherwise, which may affect any Term Assets Issuer or the value of the
Deposited Assets. Under certain circumstances the holders of the Certificates
may direct the Trustee to dispose of the Term Assets or take certain other
actions in respect of the Deposited Assets.
In addition, the Prospectus Supplement for each Series of Certificates
will set forth information regarding additional special considerations, if any,
applicable to such Series (and each Class within such Series).
THE COMPANY
The Company was incorporated in the State of Delaware on November 23,
1992, as an indirect, wholly-owned, limited-purpose finance subsidiary of
Salomon Inc. The Company will not engage in any business or other activities
other than issuing and selling securities from time to time and acquiring,
owning, holding, pledging and transferring assets (including Deposited Assets
and Credit Support) in connection therewith or with the creation of each Trust
and in activities related or incidental thereto.
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The Company does not have, nor is it expected to have, any significant
unencumbered assets. The Company's principal executive offices are 32nd Floor,
Seven World Trade Center, New York, New York 10048 (telephone (212) 783-6645).
USE OF PROCEEDS
Unless otherwise specified in the applicable Prospectus Supplement, the
net proceeds to be received from the sale of each Series or Class of
Certificates (whether or not offered hereby) will be used by the Company to
purchase the related Deposited Assets and arrange certain Credit Support
including, if specified in the related Prospectus Supplement, making required
deposits into any reserve account or the applicable Certificate Account (as
defined below) for the benefit of the Certificateholders of such Series or
Class. Any remaining net proceeds, if any, will be used by the Company for
general corporate purposes.
FORMATION OF THE TRUST
The Company will assign the Deposited Assets (or cash to purchase such
assets) for each Series of Certificates to the Trustee named in the applicable
Prospectus Supplement, in its capacity as Trustee, for the benefit of the
Certificateholders of such Series. See "Description of the Trust
Agreement--Assignment of Deposited Assets". The Trustee named in the applicable
Prospectus Supplement, will administer the Deposited Assets pursuant to the
Trust Agreement and will receive a fee for such services (the "Trustee's Fee").
Any Administrative Agent named in the applicable Prospectus Supplement will
perform such tasks as are specified therein and in the Trust Agreement and will
receive a fee for such services (the "Administration Fee") as specified in the
Prospectus Supplement. See "Description of the Trust Agreement--Collection and
Other Administrative Procedures" and "--Retained Interest; Administrative Agent
Compensation and Payment of Expenses". The Trustee or an Administrative Agent,
if applicable, will either cause the assignment of the Deposited Assets to be
recorded or will obtain an opinion of counsel that no recordation is required to
obtain a first priority perfected security interest in such Deposited Assets.
Unless otherwise stated in the Prospectus Supplement, the Company's
assignment of the Deposited Assets to the Trustee will be without recourse. To
the extent provided in the applicable Prospectus Supplement, the obligations of
an Administrative Agent so named therein with respect to the Deposited Assets
will consist primarily of its contractual administrative obligations, if any,
under the Trust Agreement, its obligation, if any, to make certain cash advances
in the event of delinquencies in payments on or with respect to any Deposited
Assets in amounts described under "Description of the Trust Agreement--Advances
in Respect of Delinquencies", and its obligations, if any, to purchase Deposited
Assets as to which there has been a breach of certain representations and
warranties or as to which the documentation is materially defective. The
obligations of an Administrative Agent, if any, named in the applicable
Prospectus Supplement to make advances will be limited to amounts which any such
Administrative Agent believes ultimately would be recoverable under any Credit
Support, insurance coverage, the proceeds of liquidation of the Deposited Assets
or from other sources available for such purposes. See "Description of the Trust
Agreement--Advances in Respect of Delinquencies".
Unless otherwise provided in the related Prospectus Supplement, each
Trust will consist of (i) such Deposited Assets, or interests therein, exclusive
of any interest in such assets (the "Retained Interest") retained by the Company
or any previous owner thereof, as from time to time are specified in the Trust
Agreement; (ii) such assets as from time to time are identified as deposited in
the related Certificate Account; (iii) property, if any, acquired on behalf of
Certificateholders by foreclosure or repossession and any revenues received
thereon; (iv) those elements of Credit Support, if any, provided with respect to
any Class within such Series that are specified as being part of the related
Trust in the applicable Prospectus Supplement, as described therein and under
"Description of Deposited Assets
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and Credit Support--Credit Support"; (v) the rights of the Company under the
agreement or agreements entered into by the Trustee on behalf of the
Certificateholders which constitute, or pursuant to which the Trustee has
acquired, such Deposited Assets; and (vi) the rights of the Trustee in any cash
advance, reserve fund or surety bond, if any, as described under "Description of
the Trust Agreement--Advances in Respect at Delinquencies".
In addition, to the extent provided in the applicable Prospectus
Supplement, the Company will obtain Credit Support for the benefit of the
Certificateholders of any related Series (or Class within such Series) of
Certificates.
MATURITY AND YIELD CONSIDERATIONS
Each Prospectus Supplement will, to the extent applicable, contain
information with respect to the type and maturities of the related Term Assets
and the terms, if any, upon which such Term Assets may be subject to early
redemption (either by the applicable obligor or pursuant to a third-party call
option), repayment (at the option of the holders thereof) or extension of
maturity. The provisions of the Term Assets with respect to the foregoing will,
unless otherwise specified in the applicable Prospectus Supplement, affect the
weighted average life of the related Series of Certificates.
The effective yield to holders of the Certificates of any Series (and
Class within such Series) may be affected by certain aspects of the Deposited
Assets or any Credit Support or the manner and priorities of allocations of
collections with respect to such Deposited Assets between the Classes of a given
Series. With respect to any Series of Certificates the Term Assets of which
consist of one or more redeemable securities, extendable securities or
securities subject to a third-party call option, the yield to maturity of such
Series (or Class within such Series) may be affected by any optional or
mandatory redemption or repayment or extension of the related Term Assets prior
to the stated maturity thereof. A variety of tax, accounting, economic, social
and other factors will influence whether an issuer exercises any right of
redemption in respect of its securities. The rate of redemption may also be
influenced by prepayments on the obligations a Term Assets Issuer holds for
its own account. All else remaining equal, if prevailing interest rates fall
significantly below the interest rates on the related Term Assets, the
likelihood of redemption would be expected to increase. There can be no
certainty as to whether any Term Asset redeemable at the option of a Term
Assets Issuer will be repaid prior to its stated maturity.
Unless otherwise specified in the related Prospectus Supplement, each
of the Term Assets will be subject to acceleration upon the occurrence of
certain Term Asset Events of Default (as defined below). The maturity and yield
on the Certificates will be affected by any early repayment of the Term Assets
as a result of the acceleration of the Outstanding Debt Securities by the
holders thereof. See "Description of the Deposited Assets".
The extent to which the yield to maturity of such Certificates may vary
from the anticipated yield due to the rate and timing of payments on the
Deposited Assets will depend upon the degree to which they are purchased at a
discount or premium and the degree to which the timing of payments thereon is
sensitive to the rate and timing of payments on the Deposited Assets.
The yield to maturity of any Series (or Class) of Certificates will
also be affected by variations in the interest rates applicable to, and the
corresponding payments in respect of, such Certificates, to the extent that the
Pass-Through Rate for such Series (or Class) is based on variable or adjustable
interest rates. With respect to any Series of Certificates representing an
interest in a pool of debt securities, disproportionate principal payments
(whether resulting from differences in amortization schedules, payments due on
scheduled maturity or upon early redemption) on the related Term Assets having
interest rates higher or lower than the then applicable Pass-Through Rates
applicable to such Certificates may affect the yield thereon.
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The Prospectus Supplement for each Series of Certificates will set
forth additional information regarding yield and maturity considerations
applicable to such Series (and each Class within such Series) and the related
Deposited Assets, including the applicable Term Assets.
DESCRIPTION OF CERTIFICATES
Each Series (or, if more than one Class exists, the Classes within such
Series) of Certificates will be issued pursuant to a Trust Agreement and a
separate series supplement thereto among the Company, the Administrative Agent,
if any, and the Trustee named in the related Prospectus Supplement, a form of
which Trust Agreement is attached as an exhibit to the Registration Statement.
The provisions of the Trust Agreement (as so supplemented) may vary depending
upon the nature of the Certificates to be issued thereunder and the nature of
the Deposited Assets, Credit Support and related Trust. The following summaries
describe certain provisions of the Trust Agreement which may be applicable to
each Series of Certificates. The applicable Prospectus Supplement for a Series
of Certificates will describe any provision of the Trust Agreement that
materially differs from the description thereof contained in this Prospectus.
The following summaries do not purport to be complete and are subject to the
detailed provisions of the form of Trust Agreement to which reference is hereby
made for a full description of such provisions, including the definition of
certain terms used, and for other information regarding the Certificates.
Article and section references in parentheses below are to articles and sections
in the Trust Agreement. Wherever particular sections or defined terms of the
Trust Agreement are referred to, such sections or defined terms are incorporated
herein by reference as part of the statement made, and the statement is
qualified in its entirety by such reference. As used herein with respect to any
Series, the term "Certificate" refers to all the Certificates of that Series,
whether or not offered hereby and by the related Prospectus Supplement, unless
the context otherwise requires.
A copy of the applicable series supplement to the Trust Agreement
relating to each Series of Certificates issued from time to time will be filed
by the Company as an exhibit to a Current Report on Form 8-K to be filed with
the Commission following the Issuance of such Series.
General
There is no limit on the amount of Certificates that may be issued
under the Trust Agreement, and the Trust Agreement will provide that
Certificates of the applicable Series may be issued in multiple Classes (Section
5.01). The Series (or Classes within such Series) of Certificates to be issued
under the Trust Agreement will represent the entire beneficial ownership
interest in the Trust for such Series created pursuant to the Trust Agreement
and each such Class will be allocated certain relative priorities to receive
specified collections from, and a certain percentage ownership interest of the
assets deposited in, such Trust, all as identified and described in the
applicable Prospectus Supplement. See "Description of Deposited Assets and
Credit Support--Collections".
Reference is made to the related Prospectus Supplement for a
description of the following terms of the Series (and if applicable, Classes
within such Series) of Certificates in respect of which this Prospectus and such
Prospectus Supplement are being delivered: (i) the title of such Certificates;
(ii) the Series of such Certificates and, if applicable, the number and
designation of Classes of such Series; (iii) certain information concerning the
type, characteristics and specifications of the Deposited Assets being deposited
into the related Trust by the Company (and, with respect to any Term Asset which
at the time of such deposit represents a significant portion of all such
Deposited Assets and any related Credit Support, certain information concerning
the terms of each such Term Asset, the identity of the issuer thereof and where
publicly available information regarding such issuer may be obtained); (iv) the
limit, if any, upon the aggregate principal amount or notional amount, as
applicable, of each Class thereof; (v) the dates on which or periods during
which such Series or Classes within such Series may be issued (each, an
"Original Issue Date"), the offering price thereof and the applicable
Distribution
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Dates on which the principal, if any, of (and premium, if any, on) such Series
or Classes within such Series will be distributable; (vi) if applicable, the
relative rights and priorities of each such Class (including the method for
allocating collections from and defaults or losses on the Deposited Assets to
the Certificateholders of each such Class); (vii) whether the Certificates of
such Series or each Class within such Series are Fixed Rate Certificates or
Floating Rate Certificates (each as defined below) and the applicable interest
rate (the " Pass-Through Rate") for each such Class, including the applicable
rate, if fixed (a "Fixed Pass-Through Rate"), or the terms relating to the
particular method of calculation thereof applicable to such Series or each Class
within such Series, if variable (a "Variable Pass-Through Rate"); the date or
dates from which such interest will accrue; the applicable Distribution Dates on
which interest, principal and premium, in each case as applicable, on such
Series or Class will be distributable and the related Record Dates, if any;
(viii) the option, if any, of any Certificateholder of such Series or Class to
withdraw a portion of the assets of the Trust in exchange for surrendering such
Certificateholder's Certificate or of the Company or Administrative Agent, if
any, or another third party to purchase or repurchase any Deposited Assets (in
each case to the extent not inconsistent with the Company's continued
satisfaction of the applicable requirements for exemption under Rule 3a-7 under
the Investment Company Act of 1940 and all applicable rules, regulations and
interpretations thereunder) and the periods within which or the dates on which,
and the terms and conditions upon which any such option may be exercised, in
whole or in part; (ix) the rating of such Series or each Class within such
Series offered hereby (provided, however, that one or more Classes within such
Series not offered hereunder may be unrated or may be rated below investment
grade); (x) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which such Series or Class within such Series will
be issuable; (xi) whether the Certificates of any Class within a given Series
are to be entitled to (1) principal distributions, with disproportionate,
nominal or no interest distributions, or (2) interest distributions, with
disproportionate, nominal or no principal distributions ("Strip Certificates"),
and the applicable terms thereof; (xii) whether the Certificates of such Series
or of any Class within such Series are to be issued in the form of one or more
Global Securities and, if so, the identity of the Depositary (as defined below),
if other than The Depository Trust Company, for such Global Security or
Securities; (xiii) if a temporary Certificate is to be issued with respect to
such Series or any Class within such Series, whether any interest thereon
distributable on a Distribution Date prior to the issuance of a definitive
Certificate of such Series or Class will be credited to the account of the
Persons entitled thereto on such Distribution Date; (xiv) if a temporary Global
Security is to be issued with respect to such Series or Class, the terms upon
which beneficial interests in such temporary Global Security may be exchanged in
whole or in part for beneficial interests in a definitive Global Security or for
individual Definitive Certificates (as defined below) of such Series or Class
and the terms upon which beneficial interests in a definitive Global Security,
if any, may be exchanged for individual Definitive Certificates of such Series
or Class; (xv) If other than U.S. dollars, the Specified Currency applicable to
the Certificates of such Series or Class for purposes of denominations and
distributions on such Series or each Class within such Series and the
circumstances and conditions, if any, when such Specified Currency may be
changed, at the election of the Company or a Certificateholder, and the currency
or currencies in which any principal of or any premium or any interest on such
Series or Class are to be distributed pursuant to such election; (xvi) any
additional Administrative Agent Termination Events (as defined below), if
applicable, provided for with respect to such Class; (xvii) all applicable
Required Percentages and Voting Rights (each as defined below) relating to the
manner and percentage of votes of Certificateholders of such Series and each
Class within such Series required with respect to certain actions by the Company
or the applicable Administrative Agent, if any, or Trustee under the Trust
Agreement or with respect to the applicable Trust; and (xviii) any other terms
of such Series or Class within such Series of Certificates not inconsistent with
the provisions of the Trust Agreement relating to such Series.
Unless otherwise indicated in the applicable Prospectus Supplement,
Certificates of each Series (including any Class of Certificates not offered
hereby) will be issued only as Registered Certificates in denominations of
$1,000 and any integral multiple thereof and will be payable only in U.S.
dollars (Section 5.01). The authorized denominations of Registered Certificates
of a given Series or Class
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within such Series having a Specified Currency other than U.S. dollars will be
set forth in the applicable Prospectus Supplement.
The United States Federal income tax consequences and ERISA
consequences relating to any Series or any Class within such Series of
Certificates will be described in the applicable Prospectus Supplement. In
addition, any special considerations, the specific terms and other information
with respect to the issuance of any Series or Class within such Series of
Certificates on which the principal of and any premium and interest are
distributable in a Specified Currency other than U.S. dollars will be described
in the applicable Prospectus Supplement relating to such Series or Class. Unless
otherwise specified in the applicable Prospectus Supplement, the U.S. dollar
equivalent of the public offering price or purchase price of a Certificate
having a Specified Principal Currency other than U.S. dollars will be determined
on the basis of the noon buying rate in New York City for cable transfer in
foreign currencies as certified for customs purposes by the Federal Reserve Bank
of New York (the "Market Exchange Rate") for such Specified Principal Currency
on the applicable issue date. As specified in the applicable Prospectus
Supplement such determination will be made by the Company, the Trustee, the
Administrative Agent, if any, or an agent thereof as exchange rate agent for
each Series of Certificates (the "Exchange Rate Agent").
Unless otherwise provided in the applicable Prospectus Supplement,
Registered Certificates may be transferred or exchanged for like Certificates of
the same Series and Class at the corporate trust office or agency of the
applicable Trustee in the City and State of New York, subject to the limitations
provided in the Trust Agreement, without the payment of any service charge,
other than any tax or governmental charge payable in connection therewith
(Section 5.04). The Company may at any time purchase Certificates at any price
in the open market or otherwise. Certificates so purchased by the Company may,
at the discretion of the Company, be held or resold or surrendered to the
Trustee for cancellation of such Certificates.
Distributions
Distributions allocable to principal, premium (if any) and interest on
the Certificates of each Series (and Class within such Series) will be made in
the Specified Currency for such Certificates by or on behalf of the Trustee on
each Distribution Date as specified in the related Prospectus Supplement and the
amount of each distribution will be determined as of the close of business on
the date specified in the related Prospectus Supplement (the "Determination
Date"). If the Specified Currency for a given Series or Class within such Series
of Registered Certificates is other than U.S. dollars, the Administrative Agent,
if any, or otherwise the Trustee will (unless otherwise specified in the
applicable Prospectus Supplement) arrange to convert all payments in respect of
each Certificate of such Series or Class into U.S. dollars in the manner
described in the following paragraph. The Certificateholder of a Registered
Certificate of a given Series or Class within such Series denominated in a
Specified Currency other than U.S. dollars may (if the applicable Prospectus
Supplement and such Certificate so indicate) elect to receive all distributions
in respect of such Certificate in the Specified Currency by delivery of a
written notice to the Trustee and Administrative Agent, if any, for such Series
not later than fifteen calendar days prior to the applicable Distribution Date,
except under the circumstances described under "Currency Risks--Payment
Currency" below. Such election will remain in effect until revoked by written
notice to such Trustee and Administrative Agent, if any, received by each of
them not later than fifteen calendar days prior to the applicable Distribution
Date.
Unless otherwise specified in the applicable Prospectus Supplement, in
the case of a Registered Certificate of a given Series or Class within such
Series having a Specified Currency other than U.S. dollars, the amount of any
U.S. dollar distribution in respect of such Registered Certificate will be
determined by the Exchange Rate Agent based on the highest firm bid quotation
expressed in U.S. dollars received by the Exchange Rate Agent at approximately
11:00 a.m., New York City time, on the second Business Day preceding the
applicable Distribution Date (or, if no such rate is quoted on such date, the
last date on which such rate was quoted), from three (or, if three are not
available, then two)
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recognized foreign exchange dealers in The City of New York (one of which may be
the Offering Agent and another of which may be the Exchange Rate Agent) selected
by the Exchange Rate Agent, for the purchase by the quoting dealer, for
settlement on such Distribution Date, of the aggregate amount payable in such
Specified Currency on such payment date in respect of all Registered
Certificates. All currency exchange costs will be borne by the
Certificateholders of such Registered Certificates by deductions from such
distributions. If no such bid quotations are available, such distributions will
be made in such Specified Currency, unless such Specified Currency is
unavailable due to the imposition of exchange controls or to other circumstances
beyond the Company's control, in which case such distributions will be made as
described under "Currency Risks--Payment Currency" below. The applicable
Prospectus Supplement will specify such information with respect to Bearer
Certificates.
Unless otherwise provided in the applicable Prospectus Supplement and
except as provided in the succeeding paragraph, distributions with respect to
Certificates will be made (in the case of Registered Certificates) at the
corporate trust office or agency of the Trustee specified in the applicable
Prospectus Supplement in The City of New York; provided, however, that any such
amounts distributable on the final Distribution Date of a Certificate will be
distributed only upon surrender of such Certificate at the applicable location
set forth above (Sections 4.01 and 9.01).
Unless otherwise specified in the applicable Prospectus Supplement,
distributions on Registered Certificates in U.S. dollars will be made, except as
provided below, by check mailed to the Registered Certificateholders of such
Certificates (which, in the case of Global Securities, will be a nominee of the
Depositary); provided, however, that, in the case of a Series or Class of
Registered Certificates issued between a Record Date (as defined below) and the
related Distribution Dates, interest for the period beginning on the issue
date for such Series or Class and ending on the last day of the interest accrual
period ending immediately prior to or coincident with such Distribution Date
will, unless otherwise specified in the applicable Prospectus Supplement, be
distributed on the next succeeding Distribution Date to the Registered
Certificateholders of the Registered Certificates of such Series or Class on the
related Record Date. A Certificateholder of $10,000,000 (or the equivalent
thereof in a Specified Principal Currency other than U.S. dollars) or more in
aggregate principal amount of Registered Certificates of a given Series shall be
entitled to receive such U.S. dollar distributions by wire transfer of
immediately available funds, but only if appropriate wire transfer instructions
have been received in writing by the Trustee for such Series not later than
fifteen calendar days prior to the applicable Distribution Date. Simultaneously
with the election by any Certificateholder to receive payments in a Specified
Currency other than U.S. dollars (as provided above), such Certificateholder
shall provide appropriate wire transfer instructions to the Trustee for such
Series, and all such payments will be made by wire transfer of immediately
available funds to an account maintained by the payee with a bank located
outside the United States.
Except as otherwise specified in the applicable Prospectus Supplement,
"Business Day" with respect to any Certificate means any day, other than a
Saturday or Sunday, that is (i) not a day on which banking institutions are
authorized or required by law or regulation to be closed in (a) The City of New
York or (b) if the Specified Currency for such Certificate is other than U.S.
dollars, the financial center of the country issuing such Specified Currency
(which, in the case of ECU, shall be Brussels, Belgium) and (ii) if the
Pass-Through Rate for such Certificate is based on LIBOR, a London Banking Day.
"London Banking Day" with respect to any Certificate means any day on which
dealings in deposits in the Specified Currency of such Certificate are
transacted in the London interbank market. The Record Date with respect to any
Distribution Date for a Series or Class of Registered Certificates shall be
specified as such in the applicable Prospectus Supplement.
Interest on the Certificates
General. Each Class of Certificates (other than certain Classes of
Strip Certificates) of a given Series may have a different Pass-Through Rate,
which may be a fixed or variable Pass-Through Rate, as described below. In the
case of Strip Certificates with no or, in certain cases, a nominal Certificate
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Principal Balance, such distributions of interest will be in an amount (as to
any Distribution Date, "Stripped Interest") described in the related Prospectus
Supplement. For purposes hereof, "Notional Amount" means the notional principal
amount specified in the applicable Prospectus Supplement on which interest on
Strip Certificates with no or, in certain cases, a nominal Certificate Principal
Balance will be made on each Distribution Date. Reference to the Notional Amount
of a Class of Strip Certificates herein or in a Prospectus Supplement does not
indicate that such Certificates represent the right to receive any distributions
in respect of principal in such amount, but rather the term "Notional Amount" is
used solely as a basis for calculating the amount of required distributions and
determining certain relative voting rights, all as specified in the related
Prospectus Supplement.
Fixed Rate Certificates. Each Series (or, if more than one Class
exists, each Class within such Series) of Certificates with a fixed Pass-Through
Rate ("Fixed Rate Certificates") will bear interest, on the outstanding
Certificate Principal Balance (or Notional Amount, if applicable), from its
Original Issue Date, or from the last date to which interest has been paid, at
the fixed Pass-Through Rate stated on the face thereof and in the applicable
Prospectus Supplement until the principal amount thereof is distributed or made
available for payment (or in the case of Fixed Rate Certificates with no or a
nominal principal amount, until the Notional Amount thereof is reduced to zero),
except that, if so specified in the applicable Prospectus Supplement, the
Pass-Through Rate for such Series or any such Class or Classes may be subject to
adjustment from time to time in response to designated changes in the rating
assigned to such Certificates by one or more rating agencies, in accordance with
a schedule or otherwise, all as described in such Prospectus Supplement. Unless
otherwise set forth in the applicable Prospectus Supplement, interest on each
Series or Class of Fixed Rate Certificates will be distributable in arrears on
each Distribution Date specified in such Prospectus Supplement. Each such
distribution of interest shall include interest accrued through the day
specified in the applicable Prospectus Supplement. Unless otherwise specified in
the applicable Prospectus Supplement, interest on Fixed Rate Certificates will
be computed on the basis of a 360-day year of twelve 30-day months.
Floating Rate Certificates. Each Series (or, if more than one Class
exists, each Class within such Series) of Certificates with a variable
Pass-Through Rate ("Floating Rate Certificates") will bear interest, on the
outstanding Certificate Principal Balance (or Notional Amount, if applicable),
from its Original Issue Date to the first Interest Reset Date (as defined below)
for such Series or Class at the Initial Pass-Through Rate set forth on the face
thereof and in the applicable Prospectus Supplement. Thereafter, the
Pass-Through Rate on such Series or Class for each Interest Reset Period (as
defined below) will be determined by reference to an interest rate basis (the
"Base Rate"), plus or minus the Spread, if any, or multiplied by the Spread
Multiplier, if any. The "Spread" is the number of basis points (one basis point
equals one one-hundredth of a percentage point) that may be specified in the
applicable Prospectus Supplement as being applicable to such Series or Class,
and the " Spread Multiplier" is the percentage that may be specified in the
applicable Prospectus Supplement as being applicable to such Series or Class,
except that if so specified in the applicable Prospectus Supplement, the Spread
or Spread Multiplier on such Series or any such Class or Classes of Floating
Rate Certificates may be subject to adjustment from time to time in response to
designated changes in the rating assigned to such Certificates by one or more
rating agencies, in accordance with a schedule or otherwise, all as described in
such Prospectus Supplement. The applicable Prospectus Supplement, unless
otherwise specified therein, will designate one of the following Base Rates as
applicable to a Floating Rate Certificate: (i) LIBOR (a "LIBOR Certificate"),
(ii) the Commercial Paper Rate (a "Commercial Paper Rate Certificate"), (iii)
the Treasury Rate (a "Treasury Rate Certificate"), (iv) the Federal Funds Rate
(a "Federal Funds Rate Certificate"), (v) the CD Rate (a "CD Rate Certificate")
or (vi) such other Base Rate (which may be based on, among other things, one or
more market indices or the interest and/or other payments (whether scheduled or
otherwise) paid, accrued or available with respect to a designated asset, pool
of assets or type of asset) as is set forth in such Prospectus Supplement and in
such Certificate. The "Index Maturity" for any Series or Class of Floating Rate
Certificates is the period of maturity of the instrument or obligation from
which the Base Rate is calculated. "H.15(519)" means the publication entitled
"Statistical Release H.15(519), Selected Interest Rates", or any successor
publication, published by the Board of Governors of the Federal Reserve
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System. "Composite Quotations" means the daily statistical release entitled
"Composite 3:30 p.m. Quotations for U.S. Government Securities" published by the
Federal Reserve Bank of New York.
As specified in the applicable Prospectus Supplement, Floating Rate
Certificates of a given Series or Class may also have either or both of the
following (in each case expressed as a rate per annum on a simple interest
basis): (i) a maximum limitation, or ceiling, on the rate at which interest may
accrue during any interest accrual period specified in the applicable Prospectus
Supplement ("Maximum Pass-Through Rate") and (ii) a minimum limitation, or
floor, on the rate at which interest may accrue during any such interest accrual
period ("Minimum Pass-Through Rate"). In addition to any Maximum Pass-Through
Rate that may be applicable to any Series or Class of Floating Rate
Certificates, the Pass-Through Rate applicable to any Series or Class of
Floating Rate Certificates will in no event be higher than the maximum rate
permitted by applicable law, as the same may be modified by United States law of
general application. The Floating Rate Certificates will be governed by the law
of the State of New York and, under such law as of the date of this Prospectus,
the maximum rate of interest, with certain exceptions, is 25% per annum on a
simple interest basis.
The Company will appoint, and enter into agreements with, agents (each
a "Calculation Agent") to calculate Pass-Through Rates on each Series or Class
of Floating Rate Certificates. The applicable Prospectus Supplement will set
forth the identity of the Calculation Agent for each Series or Class of Floating
Rate Certificates. All determinations of interest by the Calculation Agent
shall, in the absence of manifest error, be conclusive for all purposes and
binding on the holders of Floating Rate Certificates of a given Series or Class.
The Pass-Through Rate on each Class of Floating Rate Certificates will
be reset daily, weekly, monthly, quarterly, semiannually or annually (such
period being the "Interest Reset Period" for such Class, and the first day of
each Interest Reset Period being an "Interest Reset Date"), as specified in the
applicable Prospectus Supplement. Interest Reset Dates with respect to each
Series, and any Class within such Series of Floating Rate Certificates will be
specified in the applicable Prospectus Supplement; provided, however, that
unless otherwise specified in such Prospectus Supplement, the Pass-Through Rate
in effect for the ten days immediately prior to the Scheduled Final Distribution
Date will be that in effect on the tenth day preceding such Scheduled Final
Distribution Date. If an Interest Reset Date for any Class of Floating Rate
Certificates would otherwise be a day that is not a Business Day, such Interest
Reset Date will occur on a prior or succeeding Business Day, specified in the
applicable Prospectus Supplement.
Unless otherwise specified in the applicable Prospectus Supplement,
interest payable in respect of Floating Rate Certificates shall be the accrued
interest from and including the Original Issue Date of such Series or Class or
the last Interest Reset Date to which interest has accrued and been distributed,
as the case may be, to but excluding the immediately following Distribution
Date.
With respect to a Floating Rate Certificate, accrued interest shall be
calculated by multiplying the Certificate Principal Balance of such Certificate
(or, in the case of a Strip Certificate with no or a nominal Certificate
Principal Balance, the Notional Amount specified in the applicable Prospectus
Supplement) by an accrued interest factor. Such accrued interest factor will be
computed by adding the interest factors calculated for each day in the period
for which accrued interest is being calculated. Unless otherwise specified in
the applicable Prospectus Supplement, the interest factor (expressed as a
decimal calculated to seven decimal places without rounding) for each such day
is computed by dividing the Pass-Through Rate in effect on such day by 360, in
the case of LIBOR Certificates, Commercial Paper Rate Certificates, Federal
Funds Rate Certificates and CD Rate Certificates or by the actual number of days
in the year, in the case of Treasury Rate Certificates. For purposes of making
the foregoing calculation, the variable Pass-Through Rate in effect on any
Interest Reset Date will be the applicable rate as reset on such date.
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Unless otherwise specified in the applicable Prospectus Supplement, all
percentages resulting from any calculation of the Pass-Through Rate on a
Floating Rate Certificate will be rounded, if necessary, to the nearest
1/100,000 of 1% (.0000001), with five one-millionths of a percentage point
rounded upward, and all currency amounts used in or resulting from such
calculation on Floating Rate Certificates will be rounded to the nearest
one-hundredth of a unit (with .005 of a unit being rounded upward).
Interest on any Series (or Class within such Series) of Floating Rate
Certificates will be distributable on the Distribution Dates and for the
interest accrual periods as and to the extent set forth in the applicable
Prospectus Supplement.
Upon the request of the holder of any Floating Rate Certificate of a
given Series or Class, the Calculation Agent for such Series or Class will
provide the Pass-Through Rate then in effect and, if determined, the
Pass-Through Rate that will become effective on the next Interest Reset Date
with respect to such Floating Rate Certificate.
(1) CD Rate Certificates. Each CD Rate Certificate will bear interest
for each Interest Reset Period at the Pass-Through Rate calculated with
reference to the CD Rate and the Spread or Spread Multiplier, if any, specified
in such Certificate and in the applicable Prospectus Supplement.
Unless otherwise specified in the applicable Prospectus Supplement, the
"CD Rate" for each Interest Reset Period shall be the rate as of the second
Business Day prior to the Interest Reset Date for such Interest Reset Period (a
"CD Rate Determination Date") for negotiable certificates of deposit having the
Index Maturity designated in the applicable Prospectus Supplement as published
in H.15(519) under the heading "CDs (Secondary Market)". In the event that such
rate is not published prior to 3:00 p.m., New York City time, on the Calculation
Date (as defined below) pertaining to such CD Rate Determination Date, then the
"CD Rate" for such Interest Reset Period will be the rate on such CD Rate
Determination Date for negotiable certificates of deposit of the Index Maturity
designated in the applicable Prospectus Supplement as published in Composite
Quotations under the heading "Certificates of Deposit". If by 3:00 p.m., New
York City time, on such Calculation Date such rate is not yet published in
either H.15(519) or Composite Quotations, then the "CD Rate" for such Interest
Reset Period will be calculated by the Calculation Agent for such CD Rate
Certificate and will be the arithmetic mean of the secondary market offered
rates as of 10:00 a.m., New York City time, on such CD Rate Determination
Date, of three leading nonbank dealers in negotiable U.S. dollar certificates of
deposit in The City of New York selected by the Calculation Agent for such CD
Rate Certificate for negotiable certificates of deposit of major United States
money center banks of the highest credit standing (in the market for negotiable
certificates of deposit) with a remaining maturity closest to the Index
Maturity designated in the related Prospectus Supplement in a denomination of
$5,000,000; provided, however, that if the dealers selected as aforesaid by such
Calculation Agent are not quoting offered rates as mentioned in this sentence,
the "CD Rate" for such Interest Reset Period will be the same as the CD Rate for
the immediately preceding Interest Reset Period (or, if there was no such
Interest Reset Period, the Initial Pass-Through Rate).
The "Calculation Date" pertaining to any CD Rate Determination Date
shall be the first to occur of (a) the tenth calendar day after such CD Rate
Determination Date or, if such day is not a Business Day, the next succeeding
Business Day or (b) the second Business Day preceding the date any distribution
of interest is required to be made following the applicable Interest Reset Date.
(2) Commercial Paper Rate Certificates. Each Commercial Paper Rate
Certificate will bear interest for each Interest Reset Period at the
Pass-Through Rate calculated with reference to the Commercial Paper Rate and the
Spread or Spread Multiplier, if any, specified in such Certificate and in the
applicable Prospectus Supplement.
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Unless otherwise specified in the applicable Prospectus Supplement, the
"Commercial Paper Rate" for each Interest Reset Period will be determined by the
Calculation Agent for such Commercial Paper Rate Certificate as of the second
Business Day to the Interest Reset Period for such Interest Reset Period (a
"Commercial Paper Rate Determination Date") and shall be the Money Market Yield
(as defined below) on such Commercial Paper Rate Determination Date of the rate
for commercial paper having the Index Maturity specified in the applicable
Prospectus Supplement, as such rate shall be published in H.15(519) under the
heading "Commercial Paper". In the event that such rate is not published
prior to 3:00 p.m., New York City time, on the Calculation Date (as defined
below) pertaining to such Commercial Paper Rate Determination Date, then the
"Commercial Paper Rate" for such Interest Reset Period shall be the Money
Market Yield on such Commercial Paper Rate Determination Date of the rate for
commercial paper of the specified Index Maturity as published in Composite
Quotations under the heading "Commercial Paper". If by 3:00 p.m., New York City
time, on such Calculation Date such rate is not yet published in either
H.15(519) or Composite Quotations, then the "Commercial Paper Rate" for such
Interest Reset Period shall be the Money Market Yield of the arithmetic mean of
the offered rates, as of 11:00 a.m., New York City time, on such Commercial
Paper Rate Determination Date of three leading dealers of commercial paper in
The City of New York selected by the Calculation Agent for such Commercial Paper
Rate Certificate for commercial paper of the specified Index Maturity placed for
an industrial issuer whose bonds are rated "AA" or the equipment by a
nationally recognized rating agency; provided, however, that if the dealers
selected as aforesaid by such Calculation Agent are not quoting offered rates as
mentioned in this sentence, the "Commercial Paper Rate" for such Interest
Reset Period will be the same as the Commercial Paper Rate for the immediately
preceding Interest Reset Period (or, if there was no such Interest Reset
Period, the Initial Pass-Through Rate).
"Money Market Yield" shall be a yield calculated in accordance with the
following formula:
Money Market Yield = D X 360 X 100
-------------
360 - (D X M)
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the specified Index Maturity.
The "Calculation Date" pertaining to any Commercial Paper Rate
Determination Date shall be the first to occur of (a) the tenth calendar day
after such Commercial Paper Rate Determination Date or, if such day is not a
Business Day, the next succeeding Business Day or (b) the second Business Day
preceding the date any distribution of interest is required to be made following
the applicable Interest Reset Date.
(3) Federal Funds Rate Certificates. Each Federal Funds Rate
Certificate will bear interest for each Interest Resort Period at the
Pass-Through Rate calculated with name to the Federal Funds Rate and the Spread
or Spread Multiplier, if any, specified in such Certificate and in the
applicable Prospectus Supplement.
Unless otherwise specified in the applicable Prospectus Supplement, the
"Federal Funds Rate" for each Interest Reset Period shall be the effective rate
on the Interest Reset Date for such Interest Reset Period (a "Federal Funds Rate
Determination Date") for Federal Funds as published in H.15(519) under the
heading "Federal Funds (Effective)". In the event that such rate is not
published prior to 3:00 p.m., New York City time on the Calculation Date (as
defined below) pertaining to such Federal Funds Rate Determination Date, the
"Federal Funds Rate" for such Interest Reset Period shall be the rate on such
Federal Funds Rate Determination Date as published in Composite Quotations under
the heading "Federal Funds/Effective Rate". If by 3:00 p.m., New York City time,
on such Calculation Date such rate is not yet published in either H.15(519) or
Composite Quotations, then the "Federal Funds Rate" for such Interest Reset
Period shall be the rate on such Federal Funds Rate Determination Date made
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publicly available by, the Federal Reserve Bank of New York which is equivalent
to the rate which appears in H.15(519) under the heading "Federal Funds
(Effective)", provided, however, that if such rate is not made publicly
available by the Federal Reserve Bank of New York by 3:00 p.m., New York City
time, on such Calculation Date, the "Federal Funds Rate" for such Interest Reset
Period will be the same as the Federal Funds Rate in effect for the immediately
preceding Interest Reset Period (or, if there was no such Interest Reset Period,
the Initial Pass-Through Rate). Unless otherwise specified in the applicable
Prospectus Supplement, in the case of a Federal Funds Rate Certificate that
resets daily, the Pass-Through Rate on such Certificate for the period from and
including a Monday to but excluding the succeeding Monday will be reset by the
Calculation Agent for such Certificate on such second Monday (or, if not a
Business Day, on the next succeeding Business Day) to a rate equal to the
average of the Federal Funds Rates in effect with respect to each such day in
such week.
The "Calculation Date" pertaining to any Federal Funds Rate
Determination Date shall be the next succeeding Business Day.
(4) LIBOR Certificates. Each LIBOR Certificate will bear interest for
each Interest Reset Period at the Pass-Through Rate calculated with reference to
LIBOR and the Spread or Spread Multiplier, if any, specified in such Certificate
and in the applicable Prospectus Supplement.
With respect to LIBOR indexed to the offered rates for U.S. dollar
deposits, unless otherwise specified in the applicable Prospectus Supplement,
"LIBOR" for each Interest Reset Period will be determined by the Calculation
Agent for any LIBOR Certificate as follows:
(i) On the second London Banking Day prior to the Interest Reset Date
for such Interest Reset Period (a "LIBOR Determination Date"), the
Calculation Agent for such LIBOR Certificate will determine the
arithmetic mean of the offered rates for deposits in U.S. dollars for
the period of the Index Maturity specified in the applicable Prospectus
Supplement, commencing on such Interest Reset Date, which appear on the
Reuters Screen LIBO Page at approximately 11:00 a.m., London time, on
such LIBOR Determination Date. "Reuters Screen LIBO Page" means the
display designated as page "LIBOR" on the Reuters Monitor Money Rates
Service (or such other page may replace the LIBO page on that service
for the purpose of displaying London interbank offered rates of major
banks). If at least two such offered rates appear on the Reuters Screen
LIBO Page, "LIBOR" for such Interest Reset Period will be the
arithmetic mean of such offered rates as determined by the Calculation
Agent for such LIBOR Certificate.
(ii) If fewer than two offered rates appear on the Reuters Screen LIBO
Page on such LIBOR Determination Date, the Calculation Agent for such
LIBOR Certificate will request the principal London offices of each of
four major banks in the London interbank market selected by such
Calculation Agent to provide such Calculation Agent with its offered
quotations for deposits in U.S. dollars for the period of the specified
Index Maturity, commencing on such Interest Reset Date, to prime
banks in the London interbank market at approximately 11:00 a.m.,
London time, on such LIBOR Determination Date and in a principal amount
equal to an amount of not less than $1,000,000 that is representative
of a single transaction in such market at such time. If at low two such
quotations are provided, "LIBOR" for such Interest Reset Period will be
the arithmetic mean of such quotations. If fewer than two such
quotations are provided, "LIBOR" for such Interest Reset Period will be
the arithmetic mean of rates quoted by three major banks in The City of
New York selected by the Calculation Agent for such LIBOR Certificate
at approximately 11:00 am., New York City time, on such LIBOR
Determination Date for loans in U.S. dollars to leading European banks,
for the period of the specified Index Maturity, commencing on such
Interest Reset Date, and in a principal amount equal to an amount of
not less than $1,000,000 that is representative of a single transaction
in such market at such time; provided, however, that if fewer than
three banks selected as aforesaid by such Calculation Agent are quoting
rates as mentioned in this sentence, "LIBOR" for such Interest Reset
Period
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will be the same as LIBOR for the immediately preceding Interest Reset
Period (or, if there was no such Interest Reset Period, the Initial
Pass-Through Rate).
If LIBOR with respect to any LIBOR Certificate is indexed to the
offered rates for deposits in a currency other than U.S. dollars, the applicable
Prospectus Supplement will set forth the method for determining such rate.
(5) Treasury Rate Certificates. Each Treasury Rate Certificate will
bear interest for each Interest Reset Period at the Pass-Through Rate calculated
with reference to the Treasury Rate and the Spread or Spread Multiplier, if any,
specified in such Certificate and in the applicable Prospectus Supplement.
Unless otherwise specified in the applicable Prospectus Supplement, the
"Treasury Rate" for each Interest Reset Period will be the rate for the auction
held on the Treasury Rate Determination Date (as defined below) for such
Interest Reset Period of direct obligations of the United States ("Treasury
Bills") having the Index Maturity specified in the applicable Prospectus
Supplement, as such rate shall be published in H.15(519) under the heading "U.S.
Government Certificates-Treasury bills-auction average (investment)" or, in the
event that such rate is not published prior to 3:00 p.m., New York City time, on
the Calculation Date (as defined below) pertaining to such Treasury Rate
Determination Date, the auction average rate (expressed as a bond equivalent on
the basis of a year of 365 or 366 days, as applicable, and applied on a daily
basis) on such Treasury Rate Determination Date as otherwise announced by the
United States Department of the Treasury. In the event that the results of the
auction of Treasury bills having the specified Index Maturity are not published
or reported as provided above by 3:00 p.m., New York City time, on such
Calculation Date, or if no such auction is held on such Treasury Rate
Determination Date, then the "Treasury Rate" for such Interest Reset Period
shall be calculated by the Calculation Agent for such Treasury Rate Certificate
and shall be a yield to maturity (expressed as a bond equivalent on the basis of
a year of 365 or 366 days, as applicable, and applied on a daily basis) of the
arithmetic mean of the secondary market bid rates, as of approximately 3:30
p.m., New York City time, on such Treasury Rate Determination Date, of three
leading primary United States government securities dealers selected by such
Calculation Agent for the issue of Treasury bills with a remaining maturity
closest to the specified Index Maturity; provided, however, that if the dealers
selected as aforesaid by such Calculation Agent are not quoting bid rates as
mentioned in this sentence, then the "Treasury Rate" for such Interest Reset
Period will be the same as the Treasury Rate for the immediately preceding
Interest Reset Period (or, if there was no such Interest Reset Period, the
Initial Pass-Through Rate).
The "Treasury Rate Determination Date" for each Interest Reset Period
will be the day of the week in which the Interest Reset Date for such Interest
Reset Period falls on which Treasury bills would normally be auctioned. Treasury
bills are normally sold at auction on Monday of each week, unless that day is a
legal holiday, in which case the auction is normally held on the following
Tuesday, except that such auction may be held on the preceding Friday. If, as
the result of a legal holiday, an auction is so held on the preceding Friday,
such Friday will be the Treasury Rate Determination Date pertaining to the
Interest Reset Period commencing in the next succeeding week. Unless otherwise
specified in the applicable Prospectus Supplement, if an auction date shall
fall on any day that would otherwise be an Interest Reset Date for a Treasury
Rate Certificate, then such Interest Reset Date shall instead be the Business
Day immediately following such auction date.
The "Calculation Date" pertaining to any Treasury Rate Determination
Date shall be the first to occur of (a) the tenth calendar day after such
Treasury Rate Determination Date or, if such a day is not a Business Day, the
next succeeding Business Day or (b) the second Business Day preceding the date
any distribution of interest is required to be made following the applicable
Interest Reset Date.
Principal of the Certificates
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Unless the related Prospectus Supplement provides otherwise, each
Certificate (other than certain Classes of Strip Certificates) will have a
"Certificate Principal Balance" which, at any time, will equal the maximum
amount that the holder thereof will be entitled to receive in respect of
principal out of the future cash flow on the Deposited Assets and other assets
included in the related Trust. Unless otherwise specified in the related
Prospectus Supplement, distributions generally will be applied to undistributed
accrued interest on, then to principal of, and then to premium (if any) on,
each such Certificate of the Class or Classes entitled thereto (in the manner
and priority specified in such Prospectus Supplement) until the aggregate
Certificate Principal Balance of such Class or Classes has been reduced to zero.
The outstanding Certificate Principal Balance of a Certificate will be reduced
to the extent of distributions of principal thereon, and, applicable pursuant to
the terms of the related Series, by the amount of any net losses realized on any
Deposited Asset ("Realized Losses") allocated thereto. Unless the related
Prospectus Supplement provides otherwise, the initial aggregate Certificate
Principal Balance of all Classes of Certificates of a Series will equal the
outstanding aggregate principal balance of the related Deposited Assets as of
the applicable Cut-off Date. The initial aggregate Certificate Principal Balance
of a Series and each Class thereof will be specified in the related Prospectus
Supplement. Distributions of principal of any Class of Certificates will be made
on a pro rate basis among all the Certificates of such Class. Strip Certificates
with no Certificate Principal Balance will not receive distributions of
principal.
Optional Exchange
If a holder may exchange Certificates of any given Series for a pro
rata portion of the Deposited Assets, the applicable Prospectus Supplement will
designate such Series as an " Exchangeable Series". The terms upon which a
holder may exchange Certificates of any Exchangeable Series for a pro rata
portion of the Deposited Assets of the related Trust will be specified in the
related Prospectus Supplement; provided that any right of exchange shall be
exercisable only to the extent that such exchange would not be inconsistent with
the Company's and such Trust's continued satisfaction of the applicable
requirements for exemption under Rule 3a-7 under the Investment Company Act of
1940 and all applicable rules, regulations and interpretations thereunder. Such
terms may relate to, but are not limited to, the following:
(a) a requirement that the exchanging holder tender to the Trustee
Certificates of each Class within such Exchangeable Series;
(b) a minimum Certificate Principal Balance or Notional Amount, as
applicable, with respect to each Certificate being tendered for
exchange;
(c) a requirement that the Certificate Principal Balance or Notional
Amount, as applicable, of each Certificate tendered for exchange be an
integral multiple of an amount specified in the Prospectus Supplement;
(d) specified dates during which a holder may effect such an exchange
(each, an "Optional Exchange Date");
(e) limitations on the right of an exchanging holder to receive any
benefit upon exchange from any Credit Support or other non-Term Assets
deposited in the applicable Trust; and
(f) adjustments to the value of the proceeds of any exchange based upon
the required prepayment of future expense allocations and the
establishment of a reserve for any anticipated Extraordinary Trust
Expenses.
Unless otherwise specified in the related Prospectus Supplement, in
order for a Certificate of a given Exchangeable Series (or Class within such
Exchangeable Series) to be exchanged by the applicable Certificateholder, the
Trustee for such Certificate must receive, at least 30 (or such shorter
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period acceptable to the Trustee) but not more than 45 days prior to an Optional
Exchange Date (i) such Certificate with the form entitled "Option to Elect
Exchange" on the reverse thereof duly completed, or (ii) in the case of
Registered Certificates, a telegram, telex, facsimile transmission or letter
from a member of a national securities exchange or the National Association of
Securities Dealers, Inc., the Depositary (in accordance with its normal
procedures) or a commercial bank or trust company in the United States setting
forth the name of the holder of such Registered Certificate, the Certificate
Principal Balance or Notional Amount of such Registered Certificate to be
exchanged, the certificate number or a description of the tenor and terms of
such Registered Certificate, a statement that the option to elect exchange is
being exercised thereby and a guarantee that the Registered Certificate to be
exchanged with the form entitled "Option to Elect Exchange" on the reverse of
the Registered Certificate duly completed will be received by such Trustee not
later than five Business Days after the date of such telegram, telex, facsimile
transmission or letter. If the procedure described in clause (ii) of the
preceding sentence is followed, then such Registered Certificate and form duly
completed must be received by such Trustee by such fifth Business Day. Any
tender of a Certificate by the holder for exchange shall be irrevocable. The
exchange option may be exercised by the holder of a Certificate for less than
the entire Certificate Principal Balance of such Certificate provided that the
Certificate Principal Balance or Notional Amount, as applicable, of such
Certificate remaining outstanding after redemption is an authorized denomination
and all other exchange requirements set forth in the related Prospectus
Supplement are satisfied. Upon such partial exchange, such Certificate shall be
cancelled and a new Certificate or Certificates for the remaining Certificate
Principal Balance thereof shall be issued (which, in the case of any Registered
Certificate, shall be in the name of the holder of such exchanged Certificate).
Unless otherwise specified in the applicable Prospectus Supplement,
because initially and until Definitive Certificates are issued each Certificate
will be represented by a Global Security, the Depositary's nominee will be the
Certificateholder of such Certificate and therefore will be the only entity that
can exercise a right of exchange. In order to ensure that the Depositary's
nominee will timely exercise a right of exchange with respect to a particular
Certificate, the beneficial owner of such Certificate must instruct the broker
or other direct or indirect participant through which it holds an interest in
such Certificate to notify the Depositary of its desire to exercise a right of
exchange. Different firms have different cut-off times for accepting
instructions from their customers and, accordingly, each beneficial owner should
consult the broker or other direct or indirect participant through which it
holds an interest in a Certificate in order to ascertain the cut-off time by
which such an instruction must be given in order for timely notice to be
delivered to the Depositary.
Unless otherwise provided in the applicable Prospectus Supplement, upon
the satisfaction of the foregoing conditions and any applicable conditions with
respect to the related Deposited Assets, as described in such Prospectus
Supplement, the applicable Certificateholder will be entitled to receive a
distribution of a pro rata share of the Deposited Assets related to the
Exchangeable Series (and Class within such Exchangeable Series) of the
Certificate being exchanged, in the manner and to the extent described in such
Prospectus Supplement. Alternatively, to the extent so specified in the
applicable Prospectus Supplement, the applicable Certificateholder, upon
satisfaction of such conditions, may direct the related Trustee to sell, on
behalf of such Certificateholder, such pro rata share of the Deposited Assets,
in which event the Certificateholder shall be entitled to receive the net
proceeds of such sale, less any costs and expenses incurred by such Trustee in
facilitating such sale, subject to any additional adjustments set forth in the
Prospectus Supplement.
Global Securities
Unless otherwise specified in the applicable Prospectus Supplement, all
Certificates of a given Series (or, if more than one Class exists, any given
Class within that Series) will, upon issuance, be represented by one or more
Global Securities that will be deposited with, or on behalf of, The Depository
Trust Company, New York, New York (for Registered Certificates denominated and
payable in U.S. dollars), or such other depositary identified in the related
Prospectus Supplement (the "
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Depositary"), and registered in the name of a nominee of the Depositary. Global
Securities may be issued in either temporary or definitive form. Unless and
until it is exchanged in whole or in part for the individual Certificates
represented thereby (each a "Definitive Certificate"), a Global Security may not
be transferred except as a whole by the Depositary for such Global Security to a
nominee of such Depositary or by a nominee of such Depositary to such Depositary
or another nominee of such Depositary or by such Depositary or any such nominee
to a successor of such Depositary or a nominee of such successor (Sections 5.02
and 5.04).
The Depository Trust Company has advised the Company as follows: The
Depository Trust Company 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 the provisions of Section
17A of the Exchange Act. The Depository Trust Company was created to hold
securities of its participants and to facilitate the clearance and settlement of
securities transactions among the institutions that have accounts with such
Depositary ("participants") in such securities through electronic book-entry
changes in accounts of the participants, thereby eliminating the need for
physical movement of securities certificates. Such Depositary's participants
include securities brokers and dealers (including the Offering Agent), banks,
trust companies, clearing corporations, and certain other organizations, some of
whom (and/or their representatives) own such Depositary. Access to such
Depositary's book-entry system is also 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. The Depository
Trust Company has confirmed to the Company that it intends to follow such
procedures.
Upon the issuance of a Global Security, the Depositary for such Global
Security will credit, on its book-entry registration and transfer system, the
respective principal amounts of the individual Certificates represented by such
Global Security to the accounts of its participants. The accounts to be
accredited shall be designated by the underwriters of such Certificates, or, if
such Certificates are offered and sold directly through one or more agents, by
the Company or such agent or agents. Ownership of beneficial interests in a
Global Security will be limited to participants or Persons that may hold
beneficial interests through participants. Ownership of beneficial interests in
a Global Security will be shown on, and the transfer of that ownership will be
effected only through, records maintained by the Depositary for such Global
Security or by participants or Persons that hold through participants. The laws
of some states require that certain purchasers of securities take physical
delivery of such securities. Such limits and such laws may limit the market for
beneficial interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
owner of such Global Security, such Depositary or such nominee, as the case may
be, will be considered the sole Certificateholder of the individual Certificates
represented by such Global Security for all purposes under the Trust Agreement
governing such Certificates. Except as set forth below, owners of beneficial
interests in a Global Security will not be entitled to have any of the
individual Certificates represented by such Global Security registered in their
names, will not receive or be entitled to receive physical delivery of any such
Certificates and will not be considered the Certificateholder thereof under the
Trust Agreement governing such Certificates. Because the Depositary can only act
on behalf of its participants, the ability of a holder of any Certificate to
pledge that Certificate to persons or entries that do not participate in the
Depositary's system, or to otherwise act with respect to such Certificate, may
be limited due to the lack of a physical certificate for such Certificate.
Distributions of principal of (and premium, if any) and any interest on
individual Certificates represented by a Global Security will be made to the
Depositary or its nominee, as the case may be, as the Certificateholder of such
Global Security. None of the Company, the Administrative Agent, if any, the
Trustee for such Certificates, any Paying Agent or the Certificate Registrar for
such Certificates will have any responsibility or liability for any aspect of
the records relating to or payments made on
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account of beneficial interests in such Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial interests.
The Company expects that the Depositary for Certificates of a given
Class and Series, upon receipt of any distribution of principal, premium or
interest in respect of a definitive Global Security representing any of such
Certificates, will credit immediately participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of such Global Security as shown on the records of such Depositary. The
Company also expects that payments by participants to owners of beneficial
interests in such Global Security held through such participants will be
governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or registered
in "street name", and will be the responsibility of such participants.
If the Depositary for Certificates of a given Class of any Series is at
any time unwilling or unable to continue as depositary and a successor
depositary is not appointed by the Company within ninety days, the Company will
issue individual Definitive Certificates in exchange for the Global Security or
Securities representing such Certificates. In addition, the Company may at any
time and in its sole discretion determine not to have any Certificates of a
given Class represented by one or more Global Securities and, in such event will
issue individual Definitive Certificates of such Class in exchange for the
Global Security or Securities representing such Certificates. Further, if the
Company so specifies with respect to the Certificates of a given Class, an owner
of a beneficial interest in a Global Security representing Certificates of such
Class may, on terms acceptable to the Company and the Depositary for such Global
Security, receive individual Definitive Certificates in exchange for such
beneficial interest. In any such instance, an owner of a beneficial interest in
a Global Security will be entitled to physical delivery of individual Definitive
Certificates of the Class represented by such Global Security equal in principal
amount to such beneficial interest and to have such Definitive Certificates
registered in its name (if the Certificates of such Class are issuable as
Registered Certificates). Individual Definitive Certificates of such Class so
issued will be issued as Registered Certificates in denominations, unless
otherwise specified by the Company, of $1,000 and integral multiples thereof.
The applicable Prospectus Supplement will set forth any specific terms
of the depositary arrangement with respect to any Class or Series of
Certificates being offered thereby to the extent not set forth or different from
the description set forth above.
DESCRIPTION OF DEPOSITED ASSETS AND CREDIT SUPPORT
General
Each Certificate of each Series (or if more than one Class exists, each
Class (whether or not each such Class is offered hereby) within such Series)
will represent an ownership interest specified for such Series (or Class) of
Certificates in a designated, publicly issued, fixed income debt security or a
pool of such debt securities (the "Term Assets") issued by one or more Issuers
(the "Term Assets Issuers"), purchased by a Trust with proceeds from, and at the
direction of, the Company or purchased by the Company (or an affiliate thereof)
in the secondary market and assigned to a Trust as described in the applicable
Prospectus Supplement. The Term Assets Issuers will be one or more corporations,
banking organizations or insurance companies organized under the laws of the
United States or any state, which are subject to the informational requirements
of the Exchange Act and which, in accordance therewith, file reports and other
information with the Commission. Based on information contained in the offering
document pursuant to which any Term Assets Issuer's securities were originally
offered (a "Term Asset Prospectus"), the applicable Prospectus Supplement shall
set forth certain information with respect to the public availability of
information with respect to any Term Assets Issuer the debt securities of which
constitute more than ten percent of the Term Assets for any series
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of Certificates as of the date of such Prospectus Supplement ("Concentrated Term
Assets"). The specific terms and conditions of the Term Assets will be set forth
in the related Prospectus Supplement.
This Prospectus relates only to the Certificates offered hereby and
does not relate to the Term Assets. The following description of the Term Assets
is intended only to summarize certain characteristics of the Term Assets the
Company is permitted to deposit in a Trust or to direct the Trustee to purchase,
and does not purport to be a complete description of any Term Asset and is
qualified in its entirety by reference to the applicable Prospectus Supplement,
Term Asset Prospectus, or Term Assets Indenture (as defined below).
Term Assets
General. Unless otherwise specified in the related Prospectus
Supplement each Term Asset will have been issued pursuant to an agreement (each,
a "Term Assets Indenture") between the Term Assets Issuer and a trustee (the
"Term Assets Trustee"). Unless otherwise specified, the Term Assets Indenture
and the Term Assets Trustee will be qualified under the Trust Indenture Act of
1939 (the "Trust Indenture Act") and the Term Assets Indenture will contain
certain provisions required by the Trust Indenture Act.
Certain Covenants. Indentures generally contain covenants intended to
protect security holders against the occurrence or effects of certain specified
events, including restrictions limiting the issuer's, and in some cases any
subsidiary's, ability to: (i) consolidate, merge, or transfer or lease assets;
(ii) incur or suffer to exist any lien, charge, or encumbrance upon any of its
property or assets, or to incur, assume, guarantee or suffer to exist any
indebtedness for borrowed money if the payment of such indebtedness is secured
by the grant of such a lien; (iii) declare or pay any cash dividends, or make
any distribution on or in respect of, or purchase, redeem, exchange or otherwise
acquire or retire for value any capital stock or subordinated indebtedness of
the issuer or its subsidiaries, if any. An indenture may also contain financial
covenants which, among other things, require the maintenance of certain
financial ratios or the creation or maintenance of reserves. Subject to certain
exceptions, indentures typically may be amended or supplemented and past
defaults may be waived with the consent of the indenture trustee, the consent of
the holders of not less than a specified percentage of the outstanding
securities, or both.
The Term Assets Indenture related to one or more Term Assets included
in a Trust may include some, all or none of the foregoing provisions or
variations thereof or additional covenants not discussed herein. To the extent
that the Term Assets are investment grade debt they are unlikely to contain
significant restrictive covenants although certain non-investment grade debt may
not be subject to restrictive covenants either. There can be no assurance that
any such provision will protect the Trust as a holder of the Term Assets against
losses. The Prospectus Supplement used to offer any Series of Certificates will
describe material covenants in relation to any Concentrated Term Asset and, as
applicable, will describe material covenants which are common to any pool of
Term Assets.
Events of Default. Indentures generally provide that any one of a
number of specified events will constitute an event of default with respect to
the securities issued thereunder. Such events of default typically include the
following or variations thereof: (i) failure by the issuer to pay an installment
of interest or principal on the securities at the time required (subject to any
specified grace period) or to redeem any of the securities when required
(subject to any specified grace period); (ii) failure by the issuer to observe
or perform any covenant, agreement, or condition contained in the securities or
the indenture which failure is materially adverse to security holders and
continues for a specified period after notice thereof is given to the issuer by
the indenture trustee or the holders of not less than a specified percentage of
the outstanding securities; (iii) failure by the issuer to make any required
payment of principal (and premium, if any) or interest with respect to certain
of the other outstanding debt obligations of the issuer or the acceleration by
or on behalf of the holders thereof of such securities, and (iv) certain events
of insolvency or bankruptcy with respect to the Term Assets Issuer.
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Remedies. Indentures generally provide that upon the occurrence of an
event of default, the indenture trustee may, and upon the written request of the
holders of not less than a specified percentage of the outstanding securities
must, take such action as it may deem appropriate to protect and enforce the
rights of the security holders. Certain indentures provide that the indenture
trustee or a specified percentage of the holders of the outstanding securities
have the right to declare all or a portion of the principal and accrued interest
on the outstanding securities immediately due and payable upon the occurrence of
certain events of default, subject to the issuer's right to cure, if applicable.
Generally, an indenture will contain a provision entitling the trustee
thereunder to be indemnified by the security holders prior to proceeding to
exercise any right or power under such indenture with respect to such securities
at the request of such security holders. An indenture is also likely to limit a
security holder's right to institute certain actions or proceedings to pursue
any remedy under the indenture unless certain conditions are satisfied,
including consent of the indenture trustee, that the proceeding be brought for
the ratable benefit of all holders of the security, and/or the indenture
trustee, after being requested to institute a proceeding by the owners of at
least a specified minimum percentage of the securities, shall have refused or
neglected to comply with such request within a reasonable time.
Each Term Assets Indenture may include some, all or none of the
foregoing provisions or variations thereof or additional events of default not
discussed herein. The Prospectus Supplement with respect to any Series of
Certificates will describe the events of default under the Term Assets Indenture
with respect to any Concentrated Term Asset ("Term Asset Events of Default") and
applicable remedies with respect thereto. With respect to any Trust comprised of
a pool of securities, the applicable Prospectus Supplement will describe certain
common Term Asset Events of Default with respect to such pool. There can be no
assurance that any such provision will protect the Trust, as a holder of the
Term Assets, against losses. If a Term Asset Event of Default occurs and the
Trustee as a holder of the Term Assets is entitled to vote or take such other
action to declare the principal amount of a Term Assets and any accrued and
unpaid interest thereon to be due and payable, the Certificateholders'
objectives may differ from those of holders of other securities of the same
series and class as any Term Asset ("Outstanding Debt Securities") in
determining whether to declare the acceleration of the Term Assets.
Subordination. As set forth in the applicable Prospectus Supplement,
certain of the Term Assets with respect to any Trust may be either senior
("Senior Term Assets") or subordinated ("Subordinated Term Assets") in right to
payment to other existing or future indebtedness of the Term Assets Issuer. With
respect to Subordinated Term Assets, to the extent of the subordination
provisions of such securities, and after the occurrence of certain events,
security holders and direct creditors whose claims are senior to Subordinated
Term Assets, if any, may be entitled to receive payment of the full amount due
thereon before the holders of any subordinated debt securities are entitled to
receive payment on account of the principal (and premium, if any) or any
interest on such securities. Consequently, the Trust as a holder of subordinated
debt may suffer a greater loss than if it held unsubordinated debt of the Term
Assets Issuer. There can be no assurance, however, that in the event of a
bankruptcy or similar proceeding the Trust as a holder of Senior Term Assets
would receive all payments in respect of such securities even if holders of
subordinated securities receive amounts in respect of such securities. Reference
is made to the Prospectus Supplement used to offer any Series of Certificates
for a description of any subordination provisions with respect to any
Concentrated Term Assets and the percentage of Senior Term Assets and
Subordinated Term Assets, if any, in a Trust comprised of a pool of securities.
Secured Obligations. Certain of the Term Assets with respect to any
Trust may represent secured obligations of the Term Assets Issuer ("Secured Term
Assets"). Generally, unless an event of default shall have occurred, or with
respect to certain collateral or as otherwise set forth in the indenture
pursuant to which such securities were offered and sold, an issuer of secured
obligations generally has the right to remain in possession and retain exclusive
control of the collateral securing a security and to collect, invest and dispose
of any income related to the collateral. The indenture pursuant to which any
secured indebtedness is issued may also contain certain provisions for release,
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substitution or disposition of collateral under certain circumstances with or
without the consent of the indenture trustee or upon the direction of not less
than a specified percentage of the security holders. The indenture pursuant to
which any secured indebtedness is issued will also provide for the disposition
of the collateral upon the occurrence of certain events of default with respect
thereto. In the event of a default in respect of any secured obligation,
security holders may experience a delay in payments on account of principal (and
premium, if any) or any interest on such securities pending the sale of any
collateral and prior to or during such period the related collateral may decline
in value. If proceeds of the sale of collateral following an indenture event of
default are insufficient to repay all amounts due in respect of any secured
obligations, the holders of such securities (to the extent not repaid from the
proceeds of the sale of the collateral) would have only an unsecured claim
ranking pari passu with the claims of all other general unsecured creditors.
The Term Assets Indenture with respect to any Secured Term Asset may
include, some, or all or none of the foregoing provisions or variations thereof.
The Prospectus Supplement used to offer any Series of Certificates which
includes Concentrated Term Assets which are Secured Term Assets, will describe
the security provisions of such Term Assets and the related collateral. With
respect to any Trust comprised of a pool of securities, a substantial portion of
which are Secured Term Assets, the applicable Prospectus Supplement will
disclose certain general information with respect to such security provisions
and the collateral.
Principal Economic Terms of Term Assets
Reference is made to the applicable Prospectus Supplement with respect
to each Series of Certificates for a description of the following terms, as
applicable, of any Concentrated Term Asset: (i) the title and series of such
Term Assets, the aggregate principal amount, denomination and form thereof;
(ii) whether such securities are senior or subordinated to any other obligations
of the issuer; (iii) whether any of the obligations are secured or unsecured and
the nature of any collateral; (iv) the limit, if any, upon the aggregate
principal amount of such debt securities; (v) the dates on which, or the range
of dates within which, the principal of (and premium, if any, on) such debt
securities will be payable; (vi) the rate or rates or the method of
determination thereof, at which such Term Assets will bear interest, if any
("Term Assets Rate"); the date or dates from which such interest will accrue
("Term Assets Interest Accrual Periods"); and the dates on which such interest
will be payable ("Term Assets Payment Dates"); (vii) the obligation, if any, of
the Term Assets Issuer to redeem the Outstanding Debt Securities pursuant to
any sinking fund or analogous provisions, or at the option of a holder thereof,
and the periods within which or the dates on which, the prices at which and the
terms and conditions upon which such debt securities may be redeemed or
repurchased, in whole or in part, pursuant to such obligation; (viii) the
periods within which or the dates on which, the prices at which and the terms
and conditions upon which such debt securities may be redeemed, if any, in whole
or in part, at the option of the Term Assets Issuer; (ix) whether the Term
Assets were issued at a price lower than the principal amount thereof; (x) if
other than United States dollars, the foreign or composite currency in which
such debt securities are denominated, or in which payment of the principal of
(and premium, if any) or any interest on such Term Assets will be made (the
"Term Assets Currency"), and the circumstances, if any, when such currency of
payment may be changed; (xi) material events of default or restrictive
covenants provided for with respect to such Term Assets; (xii) the rating
thereof, if any; and (xiii) any other material terms of such Term Assets.
With respect to a Trust comprised of a pool of Term Assets, the related
Prospectus Supplement will, to the extent applicable, describe the composition
of the Term Assets pool as of the Cut-off Date, certain material events of
default or restrictive covenants common to the Term Assets, and, on an
aggregate, percentage or weighted average basis, as applicable, the
characteristics of the pool with respect to the terms set forth in (ii), (iii),
(v), (vi), (vii), (viii) and (ix) of the preceding paragraph and any other
material terms regarding such pool of securities.
Publicly Available Information
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In addition to the foregoing, with respect to each Concentrated Term
Asset issued by a Term Assets Issuer the applicable Prospectus Supplement will
disclose the identity of the applicable obligor and will describe the existence
and type of certain information that is made publicly available by each obligor
regarding such Term Asset or Term Assets and shall disclose where and how
prospective purchasers of the Certificates may obtain such publicly available
information with respect to each such obligor. Such information will typically
consist of such obligor's annual report, which contains financial statements or
similar financial information, and can be obtained from the Commission, if so
specified in the applicable Prospectus Supplement, or from the office of such
obligor identified in the related Prospectus Supplement. However, the precise
nature of such publicly available information and where and how it may be
obtained with respect to any given Term Assets Issuer will vary, and, as
described above, will be set forth in the applicable Prospectus Supplement with
respect to any such obligor.
Other Deposited Assets
In addition to the Term Assets, the Company may also deposit into a
given Trust, or the Trustee on behalf of the Certificateholders of a Trust may
enter into an agreement constituting or providing for the purchase of, to the
extent described in the related Prospectus Supplement, certain assets related or
incidental to one or more of such Term Assets or to some other asset deposited
in the Trust, including hedging contracts and other similar arrangements (such
as puts, calls, interest rate swaps, currency swaps, floors, caps and collars,
cash and assets ancillary or incidental to the foregoing or to the Term Assets
(including assets obtained through foreclosure or in settlement of claims with
respect thereto) (all such assets for any given Series, together with the
related Term Assets, the "Deposited Assets"). The applicable Prospectus
Supplement will to the extent appropriate contain analogous disclosure with
respect to the foregoing assets as referred to above with respect to the Term
Assets.
Unless otherwise specified in the related Prospectus Supplement, the
Deposited Assets for a given Series of Certificates and the related Trust will
not constitute Deposited Assets for any other Series of Certificates and the
related Trust and the Certificates of each Class of a given Series possess an
equal and ratable undivided ownership interest in such Deposited Assets. The
applicable Prospectus Supplement may, however, specify that certain assets
constituting a part of the Deposited Assets relating to any given Series may be
beneficially owned solely by or deposited solely for the benefit of one Class or
a group of Classes within such Series. In such event, the other Classes of such
Series will not possess any beneficial ownership interest in those specified
assets constituting a part of the Deposited Assets.
Credit Support
As specified in the applicable Prospectus Supplement for a given Series
of Certificates, the Trust for any Series of Certificates may include, or the
Certificateholders of such Series (or any Class or group of Classes within such
Series) may have the benefit of, Credit Support for any Class or group of
Classes within such Series. Such Credit Support may be provided by any
combination of the following means described below or any other means described
in the applicable Prospectus Supplement. The applicable Prospectus Supplement
will set forth whether the Trust for any Class or group of Classes of
Certificates contains, or the Certificateholders of such Certificates have the
benefit of, Credit Support and, if so, the amount, type and other relevant terms
of each element of Credit Support with respect to any such Class or Classes and
certain information with respect to the obligors of each such element, including
financial information with respect to any such obligor providing Credit Support
for 20% or more of the aggregate principal amount of such Class or Classes.
Subordination. As discussed below under "--Collections", the rights
of the Certificateholders of any given Class within a Series of Certificates to
receive collections from the Trust for such Series and any Credit Support
obtained for the benefit of the Certificateholders of such Series (or Classes
within such Series) may be subordinated to the rights of the Certificateholders
of one or more other
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Classes of such Series to the extent described in the related Prospectus
Supplement. Such subordination accordingly provides some additional credit
support to those Certificateholders of those other Classes. For example, its
losses are realized during a given period on the Deposited Assets relating to a
Series of Certificates such that the collections received thereon are
insufficient to make all distributions on the Certificates of such Series, those
realized losses would be allocated to the Certificateholder of any Class of such
Series that is subordinated to another Class, to the extent and in the manner
provided in the related Prospectus Supplement. In addition, if so provided in
the applicable Prospectus Supplement, certain amounts otherwise payable to
Certificateholders of any Class that is subordinated to another Class may be
required to be deposited into a reserve account. Amounts held in any reserve
account may be applied as described below under "-Reserve Accounts" and in the
related Prospectus Supplement.
If so provided in the related Prospectus Supplement, the Credit Support
for any Series or Class of Certificates may include, in addition to the
subordination of certain Classes of such Series and the establishment of a
reserve account, any of the other forms of Credit Support described below. Any
such other forms of Credit Support that are solely for the benefit of a given
Class will be limited to the extent necessary to make required distributions to
the Certificateholders of such Class or as otherwise specified in the related
Prospectus Supplement. In addition, if so provided in the applicable Prospectus
Supplement, the obligor of any other forms of Credit Support may be reimbursed
for amounts paid pursuant to such Credit Support out of amounts otherwise
payable to one or more of the Classes of the Certificates of such Series.
Letter of Credit; Surety Bond. The Certificateholders of any Series (or
Class or group of Classes of Certificates within such Series) may, if specified
in the applicable Prospectus Supplement, have the benefit of a letter or letters
of credit (a "Letter of Credit") issued by a bank (a "Letter of Credit Bank") or
a surety bond or bonds (a "Surety Bond") issued by a surety company (a
"Surety"). In either case, the Trustee or such other person specified in the
applicable Prospectus Supplement will use its reasonable efforts to cause the
Letter of Credit or the Surety Bond, as the case may be, to be obtained, to be
kept in full force and effect (unless coverage thereunder has been exhausted
through payment of claims) and to pay timely the fees or premiums therefor
unless, as described in the related Prospectus Supplement, the payment of such
fees or premiums is otherwise provided for. The Trustee or such other person
specified in the applicable Prospectus Supplement will make or cause to be made
draws under the Letter of Credit or the Surety Bond, as the case may be, under
the circumstances and to cover the amounts specified in the applicable
Prospectus Supplement. Any amounts otherwise available under the Letter of
Credit or the Surety Bond will be reduced to the extent of any prior
unreimbursed draws thereunder. The applicable Prospectus Supplement will provide
the manner, priority and source of funds by which any such draws are to be
repaid.
Unless otherwise specified in the applicable Prospectus Supplement, in
the event that the Letter of Credit Bank or the Surety, as applicable, ceases to
satisfy any credit rating or other applicable requirements specified in the
related Prospectus Supplement, the Trustee or such other person specified in the
applicable Prospectus Supplement will use its reasonable efforts to obtain or
cause to be obtained a substitute Letter of Credit or Surety Bond, as
applicable, or other form of credit enhancement providing similar protection,
that meets such requirements and provides the same coverage to the extent
available for the same cost. There can be no assurance that any Letter of Credit
Bank or any Surety, as applicable, will continue to satisfy such requirements or
that any such substitute Letter of Credit, Surety Bond or similar credit
enhancement will be available providing equivalent coverage for the same cost.
To the extent not so available, the credit support otherwise provided by the
Letter of Credit or the Surety Bond (or similar credit enhancement) may be
reduced to the level otherwise available for the same cost as the original
Letter of Credit or Surety Bond.
Reserve Accounts. If so provided in the related Prospectus Supplement,
the Trustee or such other person specified in the Prospectus Supplement will
deposit or cause to be deposited into an account maintained with an eligible
institution (which may be the Trustee) (a "Reserve Account") any
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combination of cash or permitted investments in specified amounts, which will be
applied and maintained in the manner and under the conditions specified in such
Prospectus Supplement. In the alternative or in addition to such deposit, a
Reserve Account may be funded through application of a portion of collections
received on the Deposited Assets for a given Series of Certificates, in the
manner and priority specified in the applicable Prospectus Supplement Amounts
may be distributed to Certificateholders of such Class or group of Classes
within such Series, or may be used for other purposes, in the manner and to the
extent provided in the related Prospectus Supplement. Amounts deposited in any
Reserve Account will be invested in certain permitted investments by, or at the
direction of, the Trustee, the Company or such other person named in the related
Prospectus Supplement.
Collections
The Trust Agreement will establish procedures by which the Trustee or
such other person specified in the Prospectus Supplement is obligated, for the
benefit of the Certificateholders of each Series of Certificates, to administer
the related Deposited Assets, including making collections of all payments made
thereon, depositing from time to time prior to any applicable Distribution
Date such collections into a segregated account maintained or controlled by the
applicable Trustee for the benefit of such Series (each a "Certificate
Account"). An Administration Agent, if any is appointed pursuant to the
applicable Prospectus Supplement, will direct the Trustee, and otherwise the
Trustee will make all determinations, as to the appropriate application of such
collections and other amounts available for distribution to the payment of any
administrative or collection expenses (such as any administrative fee) and
certain Credit Support-related ongoing fees (such as insurance premiums, letter
of credit fees or any required account deposits) and to the payment of amounts
then due and owing on the Certificates of such Series (and Classes within such
Series), all in the manner and priorities described in the related Prospectus
Supplement. The applicable Prospectus Supplement will specify the collection
periods, if applicable, and Distribution Dates for a given Series of
Certificates and the particular requirements relating to the segregation and
investment of collections received on the Deposited Assets during a given
collection period or on or by certain specified dates. There can be no assurance
that amounts received from the Deposited Assets and any Credit Support obtained
for the benefit of Certificateholders for a particular Series or Class of
Certificates over a specified period will be sufficient, after payment of all
prior expenses and fees for such period, to pay amounts then due and owing to
holders of such Certificates. The applicable Prospectus Supplement will also set
forth the manner and priority by which any Realized Loss will be allocated among
the Classes of any Series of Certificates, if applicable.
The relative priorities of distributions with respect to collections
from the assets of the Trust assigned to Classes of a given Series of
Certificates may permanently or temporarily change over time upon the occurrence
of certain circumstances specified in the applicable Prospectus Supplement.
Moreover, the applicable Prospectus Supplement may specify that the relative
distribution priority assigned to each Class of a given Series for purposes of
payments of certain amounts, such as principal, may be different from the
relative distribution priority assigned to each such Class for payments of other
amounts, such as interest or premium.
DESCRIPTION OF THE TRUST AGREEMENT
General
The following summary of certain provisions of the Trust Agreement and
the Certificates does not purport to be complete and such summary is qualified
in its entirety by reference to the detailed provisions of the form of Trust
Agreement filed as an exhibit to the Registration Statement. Article and section
references in parentheses below are to articles and sections in the Trust
Agreement. Wherever particular sections or defined terms of the Trust Agreement
are referred to, such sections or defined
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terms are incorporated herein by reference as part of the statement made, and
the statement is qualified in its entirety by such reference.
Assignment of Deposited Assets
At the time of issuance of any Series of Certificates, the Company will
cause the Term Assets to be included in the related Trust, and any other
Deposited Asset specified in the Prospectus Supplement, to be assigned to the
related Trustee, together with all principal, premium (if any) and interest
received by or on behalf of the Company on or with respect to such Deposited
Assets after the cut-off date specified in the Prospectus Supplement (the
"Cut-off Date"), other than principal, premium (if any) and interest due on or
before the Cut-off Date and other than any Retained Interest (Section 2.01).
Unless otherwise provided in the Prospectus Supplement, the Trustee will,
concurrently with such assignment, deliver the Certificates to the Company in
exchange for certain assets to be deposited in the Trust (Section 2.06). Each
Deposited Asset will be identified in a schedule appearing as an exhibit to the
Trust Agreement. Such schedule will include certain statistical information with
respect to each Term Asset and each other Deposited Asset as of the Cut-off
Date, and in the event any Term Asset represents ten percent or more of the
total Term Assets with respect to any Series of Certificates, such schedule will
include, to the extent applicable, information regarding the payment terms
thereof, the Retained Interest, if any, with respect thereto, the maturity or
term thereof, the rating, if any, thereof and certain other information with
respect thereto.
In addition, the Company will, with respect to each Deposited Asset,
deliver or cause to be delivered to the Trustee (or to the custodian hereinafter
referred to) all documents necessary to transfer ownership of such Deposited
Asset to the Trustee. The Trustee (or such custodian) will review such documents
upon receipt thereof or within such period as is permitted in the Prospectus
Supplement, and the Trustee (or such custodian) will hold such documents in
trust for the benefit of the Certificateholders (Sections 2.01 and 2.02).
Each of the Company and the Administrative Agent, if any, will make
certain representations and warranties regarding its authority to enter into,
and its ability to perform its obligations under, the Trust Agreement. Upon a
breach of any such representation of the Company or any such Administrative
Agent, as the case may be, which materially and adversely affects the interests
of the Certificateholders, the Company or any such Administrative Agent,
respectively, will be obligated to cure the breach in all material respects
(Section 2.05).
Collection and Other Administrative Procedures
General. With respect to any Series of Certificates, the Trustee or
such other person specified in the Prospectus Supplement, directly or through
sub-administrative agents, will make reasonable efforts to collect all scheduled
payments under the Deposited Assets and will follow or cause to be followed such
collection procedures, if any, as it would follow with respect to comparable
financial assets that it held for its own account , provided that such
procedures are consistent with the Trust Agreement and any related instrument
governing any Credit Support (collectively, the "Credit Support Instruments")
and provided that, except as otherwise expressly set forth in the applicable
Prospectus Supplement, it shall not be required to expend or risk its own
funds or otherwise incur personal financial liability.
Sub-Administration. Any Trustee or Administrative Agent may delegate
its obligations in respect of the Deposited Assets to third parties they deem
qualified to perform such obligations (each, a "Sub-Administrative Agent), but
the Trustee or Administrative Agent will remain obligated with respect to such
obligations under the Trust Agreement. Each Sub-Administrative Agent will be
required to perform the customary functions of an administrator of comparable
financial assets, including, if applicable, collecting payments from obligors
and remitting such collections to the Trustee; maintaining accounting records
relating to the Deposited Assets, attempting to cure defaults and delinquencies;
and
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enforcing any other remedies with respect thereto all as and to the extent
provided in the applicable Sub-Administration Agreement (as defined below).
The agreement between any Administrative Agent or Trustee and a
Sub-Administrative Agent (a "Sub-Administration Agreement") will be consistent
with the terms of the Trust Agreement and such assignment to the
Sub-Administrator by itself will not result in a withdrawal or downgrading of
the rating of any Class of Certificates issued pursuant to the Trust Agreement.
With respect to any Sub-Administrative Agreement between an Administrative
Agent and a Sub-Administrative Agent, although each such Sub-Administration
Agreement will be a contract solely between such Administrative Agent and the
Sub-Administrative Agent, the Trust Agreement pursuant to which a Series of
Certificates is issued will provide that, if for any reason such Administrative
Agent for such Series of Certificates is no longer acting in such capacity, the
Trustee or any successor Administrative Agent must recognize the
Sub-Administrative Agent's rights and obligations under such Sub-Administration
Agreement.
The Administrative Agent or Trustee, as applicable, will be solely
liable for all fees owed by it to any Sub-Administrative Agent, irrespective of
whether the compensation of the Administrative Agent or Trustee, as applicable,
pursuant to the Trust Agreement with respect to the particular Series of
Certificates is sufficient to pay such fees. However, a Sub-Administrative Agent
may be entitled to a Retained Interest in certain Deposited Assets to the extent
provided in the related Prospectus Supplement. Each Sub-Administrative Agent
will be reimbursed by the Administrative Agent, if any, or otherwise the Trustee
for certain expenditures which it makes, generally to the same extent the
Administrative Agent or Trustee, as applicable, would be reimbursed under the
terms of the Trust Agreement relating to such Series. See "--Retained Interest;
Administrative Agent Compensation and Payment of Expenses".
The Administrative Agent or Trustee, as applicable, may require any
Sub-Administrative Agent to agree to indemnify the Administrative Agent or
Trustee, as applicable, for any liability or obligation sustained by the
Administrative Agent or Trustee, as applicable, in connection with any act or
failure to act by the Sub-Administrative Agent.
Realization upon Defaulted Deposited Assets. Unless otherwise specified
in the applicable Prospectus Supplement, as administrator with respect to the
Deposited Assets, the Trustee, on behalf of the Certificateholders of a given
Series (or any Class or Classes within such Series), will present claims under
each applicable Credit Support Instrument, and will take such reasonable steps
as are necessary to receive payment or to permit recovery thereunder with
respect to defaulted Deposited Assets. As set forth above, all collections by or
on behalf of the Trustee or Administrative Agent under any Credit Support
Instrument are to be deposited in the Certificate Account for the related Trust,
subject to withdrawal as described above.
Unless otherwise provided in the applicable Prospectus Supplement, if
recovery on a defaulted Deposited Asset under any related Credit Support
Instrument is not available, the Trustee will be obligated to follow or cause to
be followed such normal practices and procedures as it deems necessary or
advisable to realize upon the defaulted Deposited Asset (Section 3.12), provided
that, except as otherwise expressly provided in the applicable Prospectus
Supplement, it shall not be required to expend or risk its own funds or
otherwise incur personal financial liability. If the proceeds of any liquidation
of the defaulted Deposited Asset are less than the sum of (i) the outstanding
principal balance of the defaulted Deposited Asset, (ii) interest accrued
thereon at the applicable interest rate and (iii) the aggregate amount of
expenses incurred by the Administrative Agent and the Trustee, as applicable, in
connection with such proceedings to the extent reimbursable from the assets of
the Trust under the Trust Agreement, the Trust will realize a loss in the amount
of such difference. Only if and to the extent provided in the applicable
Prospectus Supplement, the Administrative Agent or Trustee, as so provided, will
be entitled to withdraw or cause to be withdrawn from the related Certificate
Account out of the net proceeds recovered on any defaulted Deposited Asset,
prior to the distribution
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of such proceeds to Certificateholders, amounts representing its normal
administrative compensation on the Deposited Asset, unreimbursed administrative
expenses incurred with respect to the Deposited Asset and any unreimbursed
advances of delinquent payments made with respect to the Deposited Asset
(Section 3.12).
Retained Interest; Administrative Agent Compensation and Payment of Expenses
The Prospectus Supplement for a Series of Certificates will specify
whether there will be any Retained Interest in the Deposited Assets, and, if so,
the owner thereof. If so provided, the Retained Interest will be established on
an asset-by-asset basis and will be specified in an exhibit to the applicable
series supplement to the Trust Agreement. A Retained Interest in a Deposited
Asset represents a specified interest therein. Payments in respect of the
Retained Interest will be deducted from payments on the Deposited Assets as
received and, in general, will not be deposited in the applicable Certificate
Account or become a part of the related Trust. Unless otherwise provided in the
applicable Prospectus Supplement, any partial recovery of interest on a
Deposited Asset, after deduction of all applicable administration fees, will be
allocated between the Retained Interest (if any) and interest distributions to
Certificateholders on a pari passu basis.
The applicable Prospectus Supplement will specify the Administrative
Agent's, if any, and the Trustee's compensation, and the source, manner and
priority of payment thereof, with respect to a given Series of Certificates.
If and to the extent specified in the applicable Prospectus Supplement,
in addition to amounts payable to any Sub-Administrative Agent, the
Administrative Agent, if any, and otherwise the Trustee will pay from its
compensation certain expenses incurred in connection with its administration of
the Deposited Assets, including, without limitation, payment of the fees and
disbursements of the Trustee, if applicable, and independent accountants,
payment of expenses incurred in connection with distributions and reports to
Certificateholders, and payment of any other expenses described in the related
Prospectus Supplement (Section 3.14).
Advances In Respect of Delinquencies
Unless otherwise specified in the applicable Prospectus Supplement, the
Administrative Agent, if any, specified therein will have no obligation to make
any advances with respect to collections on the Deposited Assets or in favor of
the Certificateholders of the related Series of Certificates. However, to the
extent provided in the applicable Prospectus Supplement, any such Administrative
Agent will advance on or before each Distribution Date its own funds or funds
held in the Certificate Account for such Series that are not part of the funds
available for distribution for such Distribution Date, in an amount equal to the
aggregate of payments of principal, premium (if any) and interest (net of
related administration fees and any Retained Interest) with respect to the
Deposited Assets that were due during the related Collection Period and were
delinquent on the related Determination Date, subject to (i) any such
Administrative Agent's good faith determination that such advances will be
reimbursable from Related Proceeds (as defined below) and (ii) such other
conditions as may be specified in the Prospectus Supplement.
Advances are intended to maintain a regular flow of scheduled interest,
premium (if any) and principal payments to holders of the Class or Classes of
Certificates entitled thereto, rather than to guarantee or insure against
losses. Unless otherwise provided in the related Prospectus Supplement, advances
of an Administrative Agent's funds, if any, will be reimbursable only out of
related recoveries on the Deposited Assets (and amounts received under any form
of Credit Support) for such Series with respect to which such advances were made
(as to any Deposited Assets, "Related Proceeds"); provided, however, that any
such advance will be reimbursable from any amounts in the Certificate Account
for such Series to the extent that such Administrative Agent shall determine, in
its sole judgment, that such advance (a "Nonrecoverable Advance") is not
ultimately recoverable from Related
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Proceeds. If advances have been made by such Administrative Agent from excess
funds in the Certificate Account for any Series, such Administrative Agent will
replace such funds in such Certificate Account on any future Distribution Date
to the extent that funds in such Certificate Account on such Distribution Date
are less than payments required to be made to Certificateholders on such date
(Section 4.03). If so specified in the related Prospectus Supplement, the
obligations, if any, of an Administrative Agent to make advances may be secured
by a cash advance reserve fund or a surety bond. If applicable, information
regarding the characteristics of, and the identity of any obligor on, any such
surety bond, will be set forth in the related Prospectus Supplement.
Certain Matters Regarding the Administrative Agent and the Company
An Administrative Agent, if any, for each Series of Certificates under
the Trust Agreement will be named in the related Prospectus Supplement. The
entity serving as Administrative Agent for any such Series may be the Trustee,
the Company, an affiliate of either thereof, the Deposited Asset Provider or any
third party and may have other normal business relationships with the Trustee,
the Company, their affiliates or the Deposited Asset Provider.
The Trust Agreement will provide that an Administrative Agent may
resign from its obligations and duties under the Trust Agreement with respect to
any Series of Certificates only if such resignation, and the appointment of a
successor, will not result in a withdrawal or downgrading of the rating of any
Class of Certificates of such Series or upon a determination that its duties
under the Trust Agreement with respect to such Series are no longer permissible
under applicable law. No such resignation will become effective until the
Trustee or a successor has assumed the Administrative Agent's obligations and
duties under the Trust Agreement with respect to such Series (Section 6.04).
The Trust Agreement will further provide that neither such an
Administrative Agent, the Company nor any director, officer, employee, or
agent of the Administrative Agent or the Company will incur any liability to the
related Trust or Certificateholders for any action taken, or for refraining
from taking any action, in good faith pursuant to the Trust Agreement or for
errors in judgment; provided, however, that none of the Administrative Agent,
the Company nor any such person will be protected against any liability that
would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of duties thereunder or by reason of reckless
disregard of obligations and duties thereunder. The Trust Agreement will further
provide that unless otherwise provided in the applicable series supplement
thereto, such an Administrative Agent, the Company and any director, officer,
employee or agent of the Administrative Agent or the Company will be entitled to
indemnification by the related Trust and will be held harmless against any loss,
liability or expense incurred in connection with any legal action relating to
the Trust Agreement or the Certificates, other than any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or negligence in
the performance of duties thereunder or by reason of reckless disregard of
obligations and duties thereunder. In addition, the Trust Agreement will provide
that neither such an Administrative Agent nor the Company will be under any
obligation to appear in, prosecute or defend any legal action which is not
incidental to their respective responsibilities under the Trust Agreement or
which in its opinion may involve it in any expense or liability. Each of such
Administrative Agent or the Company may, however, in its discretion undertake
any such action which it may deem necessary or desirable with respect to the
Trust Agreement and the rights and duties of the parties thereto and the
interests of the Certificateholders thereunder (Section 6.03). The applicable
Prospectus Supplement will describe how such legal expenses and costs of such
action and any liability resulting therefrom will be allocated.
Any person into which an Administrative Agent may be merged or
consolidated, or any person resulting from any merger or consolidation to which
an Administrative Agent is a part, or any person succeeding to the business of
an Administrative Agent, will be the successor of the Administrative Agent under
the Trust Agreement with respect to the Certificates of any given Series
(Section 6.02).
Administrative Agent Termination Events; Rights Upon Administrative Agent
Termination Event
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Unless otherwise provided in the related Prospectus Supplement,
"Administrative Agent Termination Events" under the Trust Agreement with respect
to any given Series of Certificates will consist of the following: (i) any
failure by an Administrative Agent to remit to the Trustee any funds in respect
of collections on the Deposited Assets and Credit Support, if any, as required
under the Trust Agreement, that continues unremedied for five days after the
giving of written notice of such failure to the Administrative Agent by the
Trustee or the Company, or to the Administrative Agent, the Company and the
Trustee by the holders of such Certificates evidencing not less than 25% of the
Voting Rights (as defined below); (ii) any failure by an Administrative Agent
duly to observe or perform in any material respect any of its other covenants or
obligations under the Trust Agreement with respect to such Series which
continues unremedied for thirty days after the giving of written notice of such
failure to the Administrative Agent by the Trustee or the Company, or to the
Administrative Agent, the Company and the Trustee by the holders of such
Certificates evidencing not less than 25% of the Voting Rights; and (iii)
certain events of insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings and certain actions by or on behalf of an
Administrative Agent indicating its insolvency or inability to pay its
obligations (Section 7.01). Any additional Administrative Agent Termination
Events with respect to any given Series of Certificates will be set forth in the
applicable Prospectus Supplement. In addition, the applicable Prospectus
Supplement and the related series supplement to the Trust Agreement will specify
as to each matter requiring the vote of holders of Certificates of a Class or
group of Classes within a given Series, the circumstances and manner in which
the Required Percentage (as defined below) applicable to each such matter is
calculated. "Required Percentage" means, with respect to any matter requiring a
vote of holders of Certificates of a given Series, the specified percentage
(computed on the basis of outstanding Certificate Principal Balance or Notional
Amount, as applicable) of Certificates of a designated Class or group of Classes
within such Series (either voting as separate classes or as a single class)
applicable to such matter, all as specified in the applicable Prospectus
Supplement and the related series supplement to the Trust Agreement. "Voting
Rights" evidenced by any Certificate will be the portion of the voting rights of
all the Certificates in the related Series allocated in the manner described in
the related Prospectus Supplement (Article 1).
Unless otherwise specified in the applicable Prospectus Supplement, so
long as an Administrative Agent Termination Event under the Trust Agreement with
respect to a given Series of Certificates remains unremedied, the Company or the
Trustee may, and at the direction of holders of such Certificates evidencing not
less than the "Required Percentage--Administrative Agent Termination" of the
Voting Rights, the Trustee will, terminate all the rights and obligations of
such Administrative Agent under the Trust Agreement relating to the applicable
Trust and in and to the related Deposited Assets (other than any Retained
Interest of such Administrative Agent), whereupon the Trustee will succeed to
all the responsibilities, duties and liabilities of such Administrative Agent
under the Trust Agreement with respect to such Series (except that if the
Trustee is prohibited by law from obligating itself to make advances regarding
delinquent Deposited Assets, then the Trustee will not be so obligated) and will
be entitled to similar compensation arrangements. In the event that the Trustee
is unwilling or unable so to act, it may, or, at the written request of the
holders of such Certificates evidencing not less than the "Required
Percentage--Termination" of the Voting Rights, it will appoint, or petition a
court of competent jurisdiction for the appointment of, an administration agent
acceptable to the Rating Agency with a net worth at the time of such appointment
of at least $15,000,000 to act as successor to such Administrative Agent under
the Trust Agreement with respect to such Series. Pending such appointment, the
Trustee is obligated to act in such capacity (except that if the Trustee is
prohibited by law from obligating itself to make advances regarding delinquent
Deposited Assets, then the Trustee will not be so obligated). The Trustee and
any such successor may agree upon the compensation to be paid to such successor,
which in no event may be greater than the compensation payable to such
Administrative Agent under the Trust Agreement with respect to such Series
(Sections 7.01 and 7.02).
No Certificateholder will have the right under the Trust Agreement to
institute any proceeding with respect thereto unless such holder previously has
given to the Trustee written notice of breach
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<PAGE>
and unless the holders of Certificates evidencing not less than the "Required
Percentage--Remedies" of the Voting Rights have made written request upon the
Trustee to institute such proceeding in its own name as Trustee thereunder and
have offered to the Trustee reasonable indemnity, and the Trustee for fifteen
days has neglected or refused to institute any such proceeding (Section 10.03).
The Trustee, however, is under no obligation to exercise any of the trusts or
powers vested in it by the Trust Agreement or to make any investigation of
matters arising thereunder or to institute, conduct or defend any litigation
thereunder or in relation thereto at the request, order or direction of any of
the holders of Certificates covered by the Trust Agreement, unless such
Certificateholders have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which may be incurred therein or
thereby (Section 8.02).
Modification and Waiver
Unless otherwise specified in the applicable Prospectus Supplement, the
Trust Agreement for each Series of Certificates may be amended by the Company
and the Trustee with respect to such Series, without notice to or consent of the
Certificateholders, for certain purposes including (i) to cure any ambiguity,
(ii) to correct or supplement any provision therein which may be inconsistent
with any other provision therein or in the Prospectus Supplement, (iii) to add
or supplement any Credit Support for the benefit of any Certificateholders
(provided that if any such addition affects any series or class of
Certificateholders differently than any other series or class of
Certificateholders, then such addition will not, as evidenced by an opinion of
counsel, have a material adverse effect on the interests of any affected series
or class of Certificateholders), (iv) to add to the covenants, restrictions or
obligations of the Company, the Administrative Agent, if any, or the Trustee for
the benefit of the Certificateholders, (v) to add, change or eliminate any other
provisions with respect to matters or questions arising under such Trust
Agreement, so long as (x) any such amendment described in (i) through (v) will
not, as evidenced by an opinion of counsel, affect the tax status of the Trust
or result in a sale or exchange of any Certificate for tax purposes and (y) the
Trustee has received written confirmation from each Rating Agency rating such
Certificates that such amendment will not cause such Rating Agency to reduce or
withdraw the then current rating thereof, or (vi) to comply with any
requirements imposed by the Code. Without limiting the generality of the
foregoing, unless otherwise specified in the applicable Prospectus Supplement,
the Trust Agreement may also be modified or amended from time to time by the
Company, and the Trustee, with the consent of the holders of Certificates
evidencing not less than the "Required Percentage-- Amendment" of the Voting
Rights of those Certificates that are materially adversely affected by such
modification or amendment for the purpose of adding any provision to or changing
in any manner or eliminating any provision of the Trust Agreement or of
modifying in any manner the rights of such Certificateholders; provided,
however, that in the event such modification or amendment would materially
adversely affect the rating of any Series or Class by each Rating Agency, the
"Required Percentage-- Amendment" specified in the related series supplement to
the Trust Agreement shall include an additional specified percentage of the
Certificates of such Series or Class, and provided further that any such
amendment shall not, as evidenced by an opinion of counsel, affect the tax
status of the Trust.
Except as otherwise set forth in the applicable Prospectus Supplement,
no such modification or amendment may, however, (i) reduce in any manner the
amount of or after the timing of, distributions or payments which are required
to be made on any Certificate or otherwise adversely affect in any material
respects the interests of Certificateholders without the consent of the holder
of such Certificate or (ii) reduce the aforesaid Required Percentage of Voting
Rights required for the consent to any such amendment without the consent of the
holders of all Certificates covered by the Trust Agreement then outstanding.
Unless otherwise specified in the applicable Prospectus Supplement,
holders of Certificates evidencing not less than the "Required
Percentage--Waiver" of the Voting Rights of a given Series may, on behalf of all
Certificateholders of that Series, (i) waive, insofar as that Series is
concerned, compliance by the Company, the Trustee or the Administrative Agent,
if any, with certain restrictive
33
<PAGE>
provisions, if any, of the Trust Agreement before the time for such compliance
and (ii) waive any past default under the Trust Agreement with respect to
Certificates of that Series, except a default in the failure to distribute
amounts received as principal of (and premium, if any) or any interest on any
such Certificate and except a default in respect of a covenant or provision the
modification or amendment of which would require the consent of the holder of
each outstanding Certificate affected thereby (Section 7.04).
Reports to Certificateholders; Notices
Reports to Certificateholders. Unless otherwise provided in the
applicable Prospectus Supplement, with each distribution to Certificateholders
of any Class of Certificates of a given Series, the Administrative Agent or the
Trustee, as provided in the related Prospectus Supplement, will forward or cause
to be forwarded to each such Certificateholder, to the Company and to such other
parties as may be specified in the Trust Agreement, a statement setting forth:
(i) the amount of such distribution to Certificateholders of such Class
allocable to principal of or interest or premium, if any, on the
Certificates of such Class; and the amount of aggregate unpaid interest
as of such Distribution Date;
(ii) in the case of Certificates with a variable Pass-Through Rate, the
Pass-Through Rate applicable to such Distribution Date, as calculated
in accordance with the method specified herein and in the related
Prospectus Supplement;
(iii) the amount of compensation received by the Administrative Agent,
if any, and the Trustee for the period relating to such Distribution
Date, and such other customary information as the Administrative Agent,
if any, or otherwise the Trustee deems necessary or desirable to enable
Certificateholders to prepare their tax returns;
(iv) if the Prospectus Supplement provides for advances, the aggregate
amount of advances included in such distribution, and the aggregate
amount of unreimbursed advances at the close of business on such
Distribution Date;
(v) the aggregate stated principal amount or, if applicable,
notional principal amount of the Deposited Assets and the current
interest rate thereon at the close of business on such Distribution
Date;
(vi) the aggregate Certificate Principal Balance or aggregate Notional
Amount, if applicable, of each Class of Certificates (including any
Class of Certificates not offered hereby) at the close of business on
such Distribution Date, separately identifying any reduction in such
aggregate Certificate Principal Balance or aggregate Notional Amount
due to the allocation of any Realized Losses or otherwise;
(vii) as to any Series (or Class within such Series) for which Credit
Support has been obtained, the amount of coverage of each element of
Credit Support included therein as of the close of business on such
Distribution Date.
In the case of information furnished pursuant to subclauses (i) and
(iii) above, the amounts shall be expressed as a U.S. dollar amount (or
equivalent thereof in any other Specified Currency) per minimum denomination of
Certificates or for such other specified portion thereof. Within a reasonable
period of time after the end of each calendar year, the Administrative Agent, if
any, or the Trustee shall furnish to each person who at any time during the
calendar year was a Certificateholder a statement containing the information set
forth in subclauses (i) and (iii) above, aggregated for such calendar year or
the applicable portion thereof during which such person was a Certificateholder.
Such obligation of the Administrative Agent or the Trustee, as applicable, shall
be deemed to have been satisfied to the
34
<PAGE>
extent that substantially comparable information shall be provided by the
Administrative Agent or the Trustee, as applicable, pursuant to any requirements
of the Code as are from time to time in effect (Section 4.02).
Notices. Unless otherwise provided in the applicable Prospectus
Supplement, any notice required to be given to a holder of a Registered
Certificate will be mailed to the address of such holder set forth in the
applicable Certificate Register.
Evidence as to Compliance
Unless otherwise specified in the applicable Prospectus Supplement, the
Trust Agreement will provide that commencing on a certain date and on or before
a specified date in each year thereafter, a firm of independent public
accountants will furnish a statement to the Trustee to the effect that such firm
has examined certain documents and records relating to the administration of the
Deposited Assets during the related 12-month period (or, in the case of the
first such report, the period ending on or before the date specified in the
Prospectus Supplement, which date shall not be more than one year after the
related Original Issue Date) and that, on the basis of certain agreed upon
procedures considered appropriate under the circumstances, such firm is of the
opinion that such administration was conducted in compliance with the terms of
the Trust Agreement, except for such exceptions as such firm shall believe to be
immaterial and such other exceptions and qualifications as shall be set forth
in such report (Section 3.16).
The Trust Agreement will also provide for delivery to the Company, the
Administrative Agent, if any, and the Trustee on behalf of the
Certificateholders, on or before a specified date in each year, of an annual
statement signed by two officers of the Trustee to the effect that the Trustee
has fulfilled its obligations under the Trust Agreement throughout the preceding
year with respect to any Series of Certificates (Section 3.15).
Copies of the annual accountants' statement, if any, and the statement
of officers of the Trustee may be obtained by Certificateholders without charge
upon written request to either the Administrative Agent or the Trustee, as
applicable, at the address set forth in the related Prospectus Supplement.
Replacement Certificates
Unless otherwise provided in the applicable Prospectus Supplement, if a
Certificate is mutilated, destroyed, lost or stolen, it may be replaced at the
corporate trust office or agency of the applicable Trustee in the City and State
of New York, or such other location as may be specified in the applicable
Prospectus Supplement, upon payment by the holder of such expenses as may be
incurred by the applicable Trustee in connection therewith and the furnishing of
such evidence and indemnity as such Trustee may require. Mutilated Certificates
must be surrendered before new Certificates will be issued (Section 5.05).
Termination
Unless otherwise provided in the Prospectus Supplement, the obligations
created by the Trust Agreement for each Series of Certificates will terminate
upon the payment to Certificateholders of that Series of all amounts held in the
related Certificate Account or by an Administrative Agent, if any, and required
to be paid to them pursuant to the Trust Agreement following the earlier of (i)
the final payment or other liquidation of the last Deposited Asset subject
thereto or the disposition of all property acquired upon foreclosure or
liquidation of any such Deposited Asset and (ii) the purchase of all the assets
of the Trust by the party entitled to effect such termination, under the
circumstances and in the manner set forth in the related Prospectus Supplement.
In no event, however, will any trust created by the Trust Agreement continue
beyond the respective date specified in the related Prospectus
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<PAGE>
Supplement. Written notice of termination of the obligations with respect to the
related Series of Certificates under the Trust Agreement will be provided as set
forth above under "--Reports to Certificateholders; Notices--Notices", and the
final distribution will be made only upon surrender and cancellation of the
Certificates at an office or agency appointed by the Trustee which will be
specified in the notice of termination (Section 9.01).
Any such purchase of Deposited Assets and property acquired in respect
of Deposited Assets evidenced by a Series of Certificates shall be made at a
price approximately equal to the aggregate fair market value of all the assets
in the Trust (as determined by the Trustee, the Administrative Agent, if any,
and, if different than both such persons, the person entitled to effect such
termination), in each case taking into account accrued interest at the
applicable interest rate to the first day of the month following such purchase
or, to the extent specified in the applicable Prospectus Supplement, a specified
price as determined therein (such price, a "Purchase Price"). The exercise of
such right will effect early retirement of the Certificates of that Series, but
the right of the person entitled to effect such termination is subject to the
aggregate principal balance of the outstanding Deposited Assets for such Series
at the time of purchase being less than the percentage of the aggregate
principal balance of the Deposited Assets at the Cut-off Date for that Series
specified in the related Prospectus Supplement (Section 9.01).
Duties of the Trustee
The Trustee makes no representations as to the validity or sufficiency
of the Trust Agreement, the Certificates of any Series or any Deposited Asset or
related document and is not accountable for the use or application by or on
behalf of any Administrative Agent of any funds paid to such Administrative
Agent or its designee in respect of such Certificates or the Deposited Assets,
or deposited into or withdrawn from the related Certificate Account or any other
account by or on behalf of such Administrative Agent (Section 8.03). If no
Administrative Agent Termination Event has occurred and is continuing with
respect to any given Series, the Trustee is required to perform only those
duties specifically required under the Trust Agreement with respect to such
Series. However, upon receipt of the various certificates, reports or other
instruments required to be furnished to it, the Trustee is required to examine
such documents and to determine whether they conform to the applicable
requirements of the Trust Agreement (Section 8.01).
The Trustee
The Trustee for any given Series of Certificates under the Trust
Agreement will be named in the related Prospectus Supplement. The commercial
bank, national banking association or trust company serving as Trustee, will be
unaffiliated with, but may have normal banking relationships with, the Company,
any Administrative Agent and their respective affiliates.
CURRENCY RISKS
Exchange Rates and Exchange Controls
An investment in a Certificate having a Specified Currency other than
U.S. dollars entails significant risks that are not associated with a similar
investment in a security denominated in U.S. dollars. Such risks include,
without limitation, the possibility of significant changes in rates of exchange
between the U.S. dollar and such Specified Currency and the possibility of the
imposition or modification of foreign exchange controls with respect to such
Specified Currency. Such risks generally depend on factors over which the
Company has no control, such as economic and political events and the supply of
and demand for the relevant currencies. In recent years, rates of exchange
between the U.S. dollar and certain currencies have been highly volatile, and
such volatility may be expected in the future. Fluctuations in any particular
exchange rate that have occurred in the past are not necessarily
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<PAGE>
indicative, however, of fluctuations in the rate that may occur during the term
of any Certificate. Depreciation of the Specified Currency for a Certificate
against the U.S. dollar would result in a decrease in the effective yield of
such Certificate below its Pass-Through Rate and, in certain circumstances,
could result in a loss to the investor on a U.S. dollar basis.
Governments have from time to time imposed, and may in the future
impose, exchange controls that could affect exchange rates as well as the
availability of a Specified Currency for making distributions in respect of
Certificates denominated in such currency. At present, the Company has
identified the following currencies in which distributions of principal, premium
and interest on Certificates may be made: Australian dollars, Canadian dollars,
Danish kroner, Italian lire, Japanese yen, New Zealand dollars, U.S. dollars and
ECU. However, Certificates distributable with Specified Currencies other than
those listed may be issued at any time. There can be no assurance that exchange
controls will not restrict or prohibit distributions of principal, premium or
interest in any Specified Currency. Even if there are no actual exchange
controls, it is possible that, on a Distribution Date with respect to any
particular Certificate, the currency in which amounts then due to be distributed
in respect of such Certificate are distributable would not be available. In that
event, such payments will be made in the manner set forth above under
"Description of Certificates--General" or as otherwise specified in the
applicable Prospectus Supplement.
THIS PROSPECTUS DOES NOT DESCRIBE ALL THE RISKS OF AN INVESTMENT IN
CERTIFICATES DENOMINATED IN A CURRENCY OTHER THAN U.S. DOLLARS, AND THE COMPANY
DISCLAIMS ANY RESPONSIBILITY TO ADVISE PROSPECTIVE PURCHASERS OF SUCH RISKS AS
THEY EXIST AT THE DATE OF THIS PROSPECTUS OR AS SUCH RISKS MAY CHANGE FROM
TIME TO TIME. PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR OWN FINANCIAL AND
LEGAL ADVISORS AS TO THE RISKS ENTAILED BY AN INVESTMENT IN CERTIFICATES
DENOMINATED IN A CURRENCY OTHER THAN U.S. DOLLARS. SUCH CERTIFICATES ARE NOT AN
APPROPRIATE INVESTMENT FOR PERSONS WHO ARE UNSOPHISTICATED WITH RESPECT TO
FOREIGN CURRENCY TRANSACTIONS.
The information set forth in this Prospectus is directed to prospective
purchasers of Certificates who are United States residents. The applicable
Prospectus Supplement for certain issuances of Certificates may set forth
certain information applicable to prospective purchasers who are residents of
countries other than the United States with respect to matters that may affect
the purchase or holding of, or receipt of distributions of principal, premium or
interest in respect of, such Certificates.
Any Prospectus Supplement relating to Certificates having a Specified
Currency other than U.S. dollars will contain information concerning historical
exchange rates for such currency against the U.S. dollar, a description of such
currency, any exchange controls affecting such currency and any other required
information concerning such currency.
Payment Currency
Except as set forth below or unless otherwise provided in the
applicable Prospectus Supplement, if distributions in respect of a Certificate
are required to be made in a Specified Currency other than U.S. dollars and such
currency is unavailable due to the imposition of exchange controls or other
circumstances beyond the Company's control or is no longer used by the
government of the country issuing such currency or for the settlement of
transactions by public institutions of or within the international banking
community, then all distributions in respect of such Certificate shall be made
in U.S. dollars until such currency is again available or so used. The amounts
so payable on any date in such currency shall be converted into U.S. dollars on
the basis of the most recently available Market Exchange Rate for such currency
or as otherwise indicated in the applicable Prospectus Supplement.
If distribution in respect of a Certificate is required to be made in
ECU and ECU is no longer used in the European Monetary System, then all
distributions in respect of such Certificate shall be
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made in U.S. dollars until ECU is again so used. The amount of each distribution
in U.S. dollars shall be computed on the basis of the equivalent of the ECU in
U.S. dollars, determined as described below, as of the second Business Day prior
to the date on which such distribution is to be made.
The equivalent of the ECU in U.S. dollars as of any date (the "Day of
Valuation") shall be determined for the Certificates of any Series and Class by
the applicable Trustee on the following basis. The component currencies of the
ECU for this purpose (the "Components") shall be the currency amounts that were
components of the ECU as of the last date on which the ECU was used in the
European Monetary System. The equivalent of the ECU in U.S. dollars shall be
calculated by aggregating the U.S. dollar equivalents of the Components. The
U.S. dollar equivalent of each of the Components shall be determined by such
Trustee on the basis of the most recently applicable Market Exchange Rates for
such Components or as otherwise indicated in the applicable Prospectus
Supplement.
If the official unit of any component currency is altered by way of
combination or subdivision, the number of units of that currency as a Component
shall be divided or multiplied in the same proportion. If two or more component
currencies are consolidated into a single currency, the amounts of those
currencies as Components shall be replaced by an amount in such single currency
equal to the sum of the amounts of the consolidated component currencies
expressed in such single currency. If any component currency is divided into two
or more currencies, the amount of that currency as a Component shall be replaced
by amounts of such two or more currencies, each of which shall be equal to the
amount of the former component currency divided by the number of currencies into
which that currency was divided.
All determinations referred to above made by the applicable Trustee
shall be at its sole discretion and shall, in the absence of manifest error, be
conclusive for all purposes and binding on the related Certificateholders of
such Series.
Foreign Currency Judgments
Unless otherwise specified in the applicable Prospectus Supplement, the
Certificates will be governed by and construed in accordance with the law of the
State of New York. Courts in the United States customarily have not rendered
judgments for money damages denominated in any currency other than the U.S.
dollar. A 1987 amendment to the Judiciary Law of the State of New York provides,
however, that an action based upon an obligation denominated in a currency other
than U.S. dollars will be rendered in the foreign currency of the underlying
obligation and converted into U.S. dollars at the rate of exchange prevailing on
the date of the entry of the judgment or decree.
PLAN OF DISTRIBUTION
Certificates may be offered in any of three ways: (i) through
underwriters or dealers; (ii) directly to one or more purchasers; or (iii)
through agents. The applicable Prospectus Supplement will set forth the terms of
the offering of any Series of Certificates, which may include the names of any
underwriters, or initial purchasers, the purchase price of such Certificates and
the proceeds to the Company from such sale, any underwriting discounts and other
items constituting underwriters' compensation, any initial public offering
price, any discounts or concessions allowed or reallowed or paid to dealers, any
securities exchanges on which such Certificates may be listed and the place and
time of delivery of the Certificates to be offered thereby.
If underwriters are used in the sale, Certificates will be acquired by
the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. Such
Certificates may be offered to the public either through underwriting syndicates
represented by
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managing underwriters or by underwriters without a syndicate. Such managing
underwriters or underwriters in the United States will include Salomon Brothers
Inc, an affiliate of the Company. Unless otherwise set forth in the applicable
Prospectus Supplement, the obligations of the underwriters to purchase such
Certificates will be subject to certain conditions precedent, and the
underwriters will be obligated to purchase all such Certificates if any of such
Certificates are purchased. Any initial public offering price and any discounts
or concessions allowed or reallowed or paid to dealers may be changed from time
to time.
Certificates may also be sold through agents designated by the Company
from time to time. Any agent involved in the offer or sale of Certificates will
be named, and any commissions payable by the Company to such agent will be set
forth, in the applicable Prospectus Supplement. Unless otherwise indicated in
the applicable Prospectus Supplement, any such agent will act on a best efforts
basis for the period of its appointment.
If so indicated in the applicable Prospectus Supplement, the Company
will authorize agents, underwriters or dealers to solicit offers by certain
specified institutions to purchase Certificates at the public offering price
described in such Prospectus Supplement pursuant to delayed delivery contracts
providing for payment and delivery on a future date specified in such Prospectus
Supplement. Such contracts will be subject only to those conditions set forth in
the applicable Prospectus Supplement and such Prospectus Supplement will set
forth the commissions payable for solicitation of such contracts.
Any underwriters, dealers or agents participating in the distribution
of Certificates may be deemed to be underwriters and any discounts or
commissions received by them on the sale or resale of Certificates may be deemed
to be underwriting discounts and commissions under the Securities Act. Agents
and underwriters may be entitled under agreements entered into with the Company
to indemnification by the Company against certain civil liabilities, including
liabilities under the Securities Act, or to contribution with respect to
payments that the agents or underwriters may be required to make in respect
thereof. Agents and underwriters may be customers of, engage in transactions
with, or perform services for, the Company or its affiliates in the ordinary
course of business.
Salomon Brothers Inc is an affiliate of the Company and is an indirect
wholly owned subsidiary of Salomon Inc, the indirect parent corporation of the
Company. Salomon Brothers Inc's participation in the offer and sale of
Certificates complies with the requirements of Schedule E of the By-Laws of the
National Association of Securities Dealers, Inc. regarding underwriting
securities of an affiliate.
As to each Series of Certificates, only those Classes rated in one of
the investment grade rating categories by a Rating Agency will be offered
hereby. Any unrated Classes or Classes rated below investment grade may be
retained by the Company or sold at any time to one or more purchasers.
Affiliates of the Underwriters may act as agents or underwriters in
connection with the sale of the Certificates. Any affiliate of the Underwriters
so acting will be named, and its affiliation with the Underwriters described, in
the related Prospectus Supplement. Also, affiliates of the Underwriters may act
as principals or agents in connection with market-making transactions relating
to the Certificates. A Prospectus Supplement will be prepared with respect to
the Certificates for use by such affiliates in connection with offers and sales
related to market-making transactions in the Certificates.
LEGAL OPINIONS
Certain legal matters with respect to the Certificates will be passed
upon for the Company and the underwriters by Orrick, Herrington & Sutcliffe
LLP, New York, New York or other counsel identified in the applicable Prospectus
Supplement.
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INDEX OF TERMS
<TABLE>
<S> <C>
Administration Fee................................................................................................6
Administrative Agent.............................................................................................1
Administrative Agent Termination Events..........................................................................32
Base Rate........................................................................................................12
Business Day.....................................................................................................11
Calculation Agent................................................................................................13
Calculation Date.................................................................................................14
CD Rate..........................................................................................................14
CD Rate Certificate..............................................................................................12
CD Rate Determination Date.......................................................................................14
Certificate Account..............................................................................................27
Certificate Principal Balance....................................................................................17
Certificateholders................................................................................................1
Certificates......................................................................................................1
Class.............................................................................................................1
Code.............................................................................................................20
Commercial Paper Rate............................................................................................15
Commercial Paper Rate Certificate................................................................................12
Commercial Paper Rate Determination Date.........................................................................15
Commission........................................................................................................2
Company...........................................................................................................1
Components.......................................................................................................38
Composite Quotations.............................................................................................13
Concentrated Term Assets.........................................................................................21
Credit Support....................................................................................................1
Credit Support Instruments.......................................................................................28
Cut-off Date.....................................................................................................28
Day of Valuation.................................................................................................38
Definitive Certificate...........................................................................................19
Depositary.......................................................................................................19
Deposited Assets..................................................................................................1
Determination Date...............................................................................................10
Distribution Date.................................................................................................2
ECU...............................................................................................................1
Exchange Act......................................................................................................2
Exchange Rate Agent..............................................................................................10
Exchangeable Series..............................................................................................18
Federal Funds Rate...............................................................................................15
Federal Funds Rate Certificate...................................................................................12
Federal Funds Rate Determination Date............................................................................15
Fixed Pass-Through Rate...........................................................................................9
Fixed Rate Certificates..........................................................................................12
Floating Rate Certificates.......................................................................................12
Global Security...................................................................................................1
H.15(519)........................................................................................................12
Index Maturity...................................................................................................12
Interest Reset Date..............................................................................................13
Interest Reset Period............................................................................................13
Letter of Credit.................................................................................................26
Letter of Credit Bank............................................................................................26
LIBOR............................................................................................................16
LIBOR Certificate................................................................................................12
</TABLE>
40
<PAGE>
<TABLE>
<S> <C>
LIBOR Determination Date.......................................................................................16
London Banking Day.............................................................................................11
Market Exchange Rate...........................................................................................10
Maximum Pass-Through Rate......................................................................................13
Minimum Pass-Through Rate......................................................................................13
Money Market Yield.............................................................................................15
Nonrecoverable Advance.........................................................................................30
Notional Amount................................................................................................12
Offering Agent..................................................................................................3
Optional Exchange Date.........................................................................................18
Original Issue Date.............................................................................................8
Participants...................................................................................................20
Pass-Through Rate...............................................................................................9
Prospectus Supplement...........................................................................................1
Purchase Price.................................................................................................36
Rating Agency...................................................................................................5
Realized Losses................................................................................................18
Registered Certificates.........................................................................................1
Registration Statement..........................................................................................2
Related Proceeds...............................................................................................30
Required Percentage............................................................................................32
Reserve Account................................................................................................26
Retained Interest...............................................................................................6
Reuters Screen LIBO Page.......................................................................................16
Securities Act..................................................................................................2
Series..........................................................................................................1
Specified Currency..............................................................................................2
Specified Interest Currency.....................................................................................2
Specified Premium Currency......................................................................................2
Specified Principal Currency....................................................................................2
Spread.........................................................................................................12
Spread Multiplier..............................................................................................12
Strip Certificates..............................................................................................9
Stripped Interest..............................................................................................12
Sub-Administration Agreement...................................................................................29
Sub-Administrative Agent.......................................................................................28
Surety.........................................................................................................26
Surety Bond....................................................................................................26
Term Assets.................................................................................................1, 21
Term Assets Currency...........................................................................................24
Term Assets Interest Accrual Periods...........................................................................24
Term Assets Issuers.........................................................................................1, 21
Term Assets Payment Dates......................................................................................24
Term Assets Prospectus.........................................................................................21
Term Assets Rate...............................................................................................24
Treasury Bills.................................................................................................17
Treasury Rate..................................................................................................17
Treasury Rate Certificate......................................................................................12
Treasury Rate Determination Date...............................................................................17
Trust...........................................................................................................1
Trust Agreement.................................................................................................1
Trustee.........................................................................................................1
Trustee's Fee...................................................................................................6
Variable Pass-Through Rate......................................................................................9
</TABLE>
41
<PAGE>
<TABLE>
<S> <C>
Voting Rights...................................................................................................32
</TABLE>
42
<PAGE>
No dealer, salesman or any other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus Supplement or the Prospectus in connection with the offer made by
this Prospectus Supplement and the Prospectus, and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Underwriters. This Prospectus Supplement and the Prospectus do not
constitute an offer or solicitation by anyone in any jurisdiction in which such
offer or solicitation is not authorized or in which the person making such offer
or solicitation is not qualified to do so or to anyone to whom it is unlawful to
make such offer or solicitation. Neither the delivery of this Prospectus
Supplement or the accompanying Prospectus nor any sale made hereunder and
thereunder shall, under any circumstances, create any implication that the
information contained herein and in the accompanying Prospectus is correct as of
any time subsequent to the date hereof; however, if any material change occurs
while this Prospectus Supplement or the accompanying Prospectus is required by
law to be delivered, this Prospectus Supplement or the accompanying Prospectus
will be amended or supplemented accordingly.
------------------------------
TABLE OF CONTENTS
Prospectus Supplement
<TABLE>
<CAPTION>
Page
<S> <C>
Summary of Terms...............................................................................................
Formation of the Trust.........................................................................................
Use of Proceeds................................................................................................
Special Considerations.........................................................................................
Description of the Term Assets.................................................................................
Yield on the Certificates .....................................................................................
Description of the Certificates................................................................................
Description of the Trust Agreement.............................................................................
Federal Income Tax Consequences................................................................................
State and Other Tax Consequences...............................................................................
ERISA Considerations...........................................................................................
Method of Distribution.........................................................................................
Ratings........................................................................................................
Legal Opinions.................................................................................................
Index of Terms.................................................................................................
Prospectus
Prospectus Supplement..........................................................................................
Available Information..........................................................................................
Incorporation of Certain Documents By
Reference....................................................................................................
Reports to Certificateholders..................................................................................
Important Currency Information.................................................................................
Special Considerations.........................................................................................
The Company....................................................................................................
Use of Proceeds................................................................................................
Formation of the Trust.........................................................................................
Maturity and Yield Considerations..............................................................................
Description of Certificates....................................................................................
Description of Deposited Assets and Credit Support.............................................................
Description of the Trust Agreement.............................................................................
Currency Risks.................................................................................................
Plan of Distribution...........................................................................................
Legal Opinions.................................................................................................
Index of Terms.................................................................................................
</TABLE>
Until [T+90], 1997, all dealers effecting transactions in the Certificates,
whether or not participating in this distribution, may be required to deliver a
Prospectus Supplement and the Prospectus to which it relates. This delivery
requirement is in addition to the obligation of dealers to deliver a Prospectus
Supplement and Prospectus when acting as Underwriters and with respect to their
unsold allotments or subscriptions.
$--------------------
Structured Products Corp.
Depositor
Salomon Brothers Inc
Prospectus Supplement
Dated April __, 1997
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following is an itemized list of the estimated expenses to be incurred
in connection with the offering of the securities being offered hereunder other
than underwriting discounts and commissions.
Registration Fee .............. $ 344,830
Printing and Engraving Expenses 10,000
Trustee's Fees ................ 15,000
Legal Fees and Expenses ....... 1,000,000
Blue Sky Fees and Expenses .... 10,000
Accountants' Fees and Expenses 15,000
Rating Agency Fees ............ 55,000
Miscellaneous ................. 25,000
----------
Total ..................... $1,474,830
==========
Item 15. Indemnification of Directors and Officers
The Company's By-laws provide for indemnification of directors and officers
of the Company to the fullest extent permitted by Delaware law.
Section 145 of the Delaware General Corporation Law provides, in substance,
that Delaware corporations shall have the power, under specified circumstances,
to indemnify their directors, officers, employees and agents in connection with
actions, suits or proceedings brought against them by a third party or in the
right of the corporation, by reason of the fact that they were or are such
directors, officers, employees or agents, against expenses incurred in any such
action, suit or proceeding.
Salomon Inc carries directors' and officers' liability insurance that
covers certain liabilities and expenses of the Company's directors and officers.
Item 16. Exhibits and Financial Statements
(a) All financial statements, schedules and historical information have
been omitted as they are not applicable.
(b) Exhibits
1.0 Form of proposed Underwriting Agreement for Certificates to be
distributed in the United States. A form of Underwriting
Agreement relating to any other sale of Certificates will be
filed as an Exhibit to a Current Report on Form 8-K and
incorporated herein by reference.*
- ------------
* Previously filed.
II-1
<PAGE>
3.1 Certificate of Incorporation of Structured Products Corp.*
3.2 By-laws of Structured Products Corp.*
4.1 Form of Trust Agreement, with forms of Certificates attached
thereto. A form of Trust Agreement relating to any other sale of
Certificates will be filed as an Exhibit to a Current Report on
Form 8-K and incorporated herein by reference.*
4.2 Form of qualified Trust Agreement.*
4.3 Form of Indenture.*
4.4 Alternate form of qualified Trust Agreement.*
5 Opinion of Cravath, Swaine & Moore with respect to legality.*
5.1 Opinion of Orrick, Herrington & Sutcliffe LLP with respect to
legality.
8 Opinion of Cravath, Swaine & Moore with respect to tax matters.*
8.1 Opinion of Orrick, Herrington & Sutcliffe LLP with respect to tax
matters.
23.1 Consent of Cravath, Swaine & Moore (included in their opinions
filed as Exhibits 5 and 8).*
23.2 Consent of Arthur Andersen & Co., certified public accountants.*
23.3 Consent of Orrick, Herrington & Sutcliffe LLP (included in its
opinions filed as Exhibit 5.1 and 8.1)
24 Powers of Attorney.*
25 Statement of eligibility of Trustee (Bankers Trust).*
25.1 Statement of eligibility of Trustee (First Trust).*
Item 17. Undertakings
(a) As to Rule 415:
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made of
the securities registered hereby, 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 (the "Act"), as amended;
II-2
<PAGE>
(ii) to reflect in the prospectus any facts or events arising after the
effective date of this registration statement (or the most recent
post-effective amendment hereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum offering range
may be reflected in the form of Prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective Registration Statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or any
material change to such information in this registration statement;
provided, however, that the undertakings set forth in clauses (i) and (ii) above
do not apply if the information required to be included in a post-effective
amendment by those clauses is contained in periodic reports filed by the
registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934, as amended, that are incorporated by reference in this registration
statement.
(2) That, for the purpose of determining any liability under the Act, 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.
(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.
(b) As to documents subsequently filed that are incorporated by reference:
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934, as amended, that is incorporated by reference in this registration
statement shall be deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) As to indemnification:
Insofar as indemnification for liabilities arising under the
Act may be permitted to directors, officers and controlling person of the
registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act 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, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
II-3
<PAGE>
person 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 Act and
will be governed by the final adjudication of such issue.
(e)(1) That, for purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained
in the form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Act shall be deemed to be part
of the registration statement as of the time it was declared
effective.
(2) That, for the purpose of determining any liability under the Act,
each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
the time shall be deemed to be the initial bona fide offering
thereof.
(f) That the registrant hereby undertakes 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, as
amended (the "Trust Indenture Act"), in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the
Trust Indenture Act.
II-4
<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 the
requirements for filing Form S-3 and has duly caused this Post-Effective
Amendment No. 4 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on this 22nd day of April, 1997.
STRUCTURED PRODUCTS CORP.,
By /s/ PHILIP U. TREMMEL
Name: Philip U. Tremmel
Title: Vice President
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequential
Exhibit Page
No. Description of Exhibit Number
<S> <C>
1 Form of proposed Underwriting Agreement for Certificates to
be distributed in the United States. A form of Underwriting
Agreement relating to any other sale of Certificates will be
filed as an Exhibit to a Current Report on Form 8-K and
incorporated herein by reference.*
3.1 Certificate of Incorporation of Structured Products Corp.*
3.2 By-laws of Structured Products Corp.*
4.1 Form of Trust Agreement, with forms of Certificates attached
thereto. A form of Trust Agreement relating to any other sale
of Certificates will be filed as an Exhibit to a Current
Report on Form 8-K and incorporated herein by reference.*
4.2 Form of qualified Trust Agreement, to be used in connection
with transactions required to be qualified under the Trust
Indenture Act of 1939, as amended.*
4.3 Form of Indenture.*
4.4 Alternate form of qualified Trust Agreement.*
5 Opinion of Cravath, Swaine & Moore with respect to legality.*
5.1 Opinion of Orrick, Herrington & Sutcliffe LLP with respect to
legality.
8 Opinion of Cravath, Swaine & Moore with respect to tax
matters.*
8.1 Opinion of Orrick, Herrington & Sutcliffe LLP with respect to
tax matters.
23.1 Consent of Cravath, Swaine & Moore (included in their
opinions filed as Exhibits 5 and 8).*
23.2 Consent of Arthur Andersen & Co., certified public
accountants.*
</TABLE>
- ------------
* Previously filed.
<PAGE>
<TABLE>
<S> <C>
23.3 Consent of Orrick, Herrington & Sutcliffe LLP (included in
its opinion filed as Exhibits 5.1 and 8.1).
24 Powers of Attorney.*
25 Statement of eligibility of Trustee (Bankers Trust).*
25.1 Statement of eligibility of Trustee (First Trust).*
</TABLE>
<PAGE>
Registration No. 33-55860
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
EXHIBITS
filed with
Post-Effective Amendment No. 4
to
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
STRUCTURED PRODUCTS CORP.
(Exact name of Registrant as specified in its charter)
----------------
================================================================================
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequential
Exhibit Page
No. Description of Exhibit Number
- ------- ----------------------------------------------------------- ----------
<S> <C>
1 Form of proposed Underwriting Agreement for Certificates to
be distributed in the United States. A form of Underwriting
Agreement relating to any other sale of Certificates will
be filed as an Exhibit to a Current Report on Form 8-K and
incorporated herein by reference.*
3.1 Certificate of Incorporation of Structured Products Corp.*
3.2 By-Laws of Structured Products Corp.*
4.1 Certificate of Incorporation of Structured Products Corp.*
4.2 By-Laws of Structured Products Corp.*
4.3 Form of Trust Agreement, with forms of Certificates
attached thereto. A form of Trust Agreement relating to any
other sale of Certificates will be filed as an Exhibit to a
Current Report on Form 8-K and incorporated herein by
reference.*
4.4 Alternate form of qualified Trust Agreement.*
5 Opinion of Cravath, Swaine & Moore with respect to
legality.*
5.1 Opinion of Orrick, Herrington & Sutcliffe LLP with respect
to legality.
8 Opinion of Cravath, Swaine & Moore with respect to tax
matters.*
8.1 Opinion of Orrick, Herrington & Sutcliffe LLP with respect
to tax matters.
23.1 Consent of Cravath, Swaine & Moore (included in their
opinions filed as Exhibits 5 and 8).*
23.2 Consent of Arthur Andersen & Co., certified public
accountants.*
23.3 Consent of Orrick, Herrington & Sutcliffe LLP (included in
its opinions filed as Exhibits 5.1 and 8.1).
24 Powers of Attorney.*
25 Statement of Eligibility of Trustee (Bankers Trust).*
25.1 Statement of Eligibility of Trustee (First Trust).*
</TABLE>
- ------------
* Previously filed.
<PAGE>
EXHIBIT 5.1
April 22, 1997
Structured Products Corp.
Seven World Trade Center
New York, NY 10048
Ladies and Gentlemen:
At your request, we have examined Post-Effective Amendment No. 4 to the
Registration Statement on Form S-3 filed by Structured Products Corp., a
Delaware corporation (the "Registrant") with the Securities and Exchange
Commission on April 21, 1997 (the "Registration Statement"), in connection with
the registration under the Securities Act of 1933, as amended (the "Act"), of
Notes and Certificates (together the "Securities"). The Securities are issuable
in series (each, a "Series"). Each Series of Certificates is issued under a
separate Trust Agreement by and between the Registrant and a Trustee named
therein, establishing an individual trust for such Series (each, a "Trust").
Each Series of Notes is issued under an Indenture between the Trust and an
Indenture Trustee named therein. The Securities are to be sold as set forth in
the Registration Statement, any amendments thereto, and the prospectus and
prospectus supplement relating to each Series.
We have examined such instruments, documents and records as we deemed
relevant and necessary as a basis of our opinion hereinafter expressed. In such
examination, we have assumed the following: (a) the authenticity of original
documents and the genuineness of all signatures; (b) the conformity to the
originals of all documents submitted to us as copies; and (c) the truth,
accuracy and completeness of the information, representations and warranties
contained in the records, documents, instruments and certificates we have
reviewed.
Based on such examination, 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 related Trust Agreement and Indenture, if
applicable, and sold in the manner described in the Registration Statement, any
amendment thereto and the prospectus and prospectus supplement relating thereto,
the Securities of such Series will be legally issued, fully paid, binding
obligations of the Trust created by each Trust Agreement, and the holders of the
Securities of such Series will be entitled to the benefits of the related Trust
Agreement and Indenture, as applicable, 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, including
without limitation concepts of materiality, reasonableness, good faith and fair
dealing, and the possible unavailability of specific
<PAGE>
Structured Products Corp.
April 22, 1997
Page 2
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 and each prospectus contained therein. In giving such
consent, we do not consider that we are "experts," within the meaning of the
term as used in the Act or the rules and regulations of the Securities and
Exchange Commission issued thereunder, with respect to any part of the
Registration Statement, including this opinion as an exhibit or otherwise.
Very truly yours,
ORRICK, HERRINGTON & SUTCLIFFE LLP
<PAGE>
EXHIBIT 8.1
April 22, 1997
Structured Products Corp.
Seven World Trade Center
New York, NY 10048
Re: Structured Products Corp. Registration Statement on Form S-3
(Registration No. 33-55860)
Ladies and Gentlemen:
We have advised Structured Products Corp. (the "Registrant") in connection
with the above captioned registration statement on Form S-3 (as amended by
Post-Effective Amendment No. 4 filed by the Registrant with the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the "Act") on
April 22, 1997, the "Registration Statement") with respect to certain federal
income tax aspects of the issuance by the Registrant of its Notes and
Certificates, issuable in series (together, the "Securities"). As described in
the Registration Statement, the Securities will be issued from time to time in
series, with each series being issued by a trust organized under the laws of New
York to be formed by the Registrant pursuant to a Trust Agreement (each, a
"Trust Agreement") between the Company and a trustee (the "Trustee").
Capitalized terms not otherwise defined herein are used as defined in the
Registration Statement.
In that connection, we are generally familiar with the proceedings required
to be taken in connection with the proposed authorization, issuance and sale of
any series of Securities and we have examined copies of such documents,
corporate records and other instruments as we have deemed necessary or
appropriate for the purposes of this opinion, including the Registration
Statement and the forms of Trust Agreement and Indenture filed as exhibits to
the Registration Statement.
Based on the foregoing and assuming that the Trust Agreement and Indenture,
if applicable, with respect to each series of Securities is executed and
delivered in substantially the form we have examined and that the transactions
contemplated to occur under the Registration Statement and the Trust Agreement
and Indenture, if applicable, in fact occur in accordance with the terms
thereof, we hereby confirm that our advice conforms to the description of
selected federal income tax consequences to holders of the Securities that
appears under the heading "Federal Income Tax Consequences" in the prospectus
supplement (the "Prospectus Supplement") to the prospectus (the "Prospectus").
Such description does not purport to discuss all possible income tax
ramifications of the proposed issuance, but
<PAGE>
Structured Products Corp.
April 22, 1997
Page 2
with respect to those tax consequences which are discussed, in our opinion the
description is accurate in all material respects.
This opinion is based on the facts and circumstances set forth in the
Prospectus Supplement and in the other documents reviewed by us. Our opinion as
to the matters set forth herein could change with respect to a particular Series
of Securities as a result of changes in facts and circumstances, changes in the
terms of documents reviewed by us, or changes in the law subsequent to the date
hereof. As the Registration Statement contemplates Series of Securities with
numerous different characteristics, the particular characteristics of each
Series of Securities must be considered in determining the applicability of this
opinion to a particular Series of Securities.
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 and the Prospectus and Prospectus Supplement contained
therein. In giving such consent, we do not consider that we are "experts,"
within the meaning of the term as used in the Act or the rules and regulations
of the Commission issued thereunder, with respect to any part of the
Registration Statement, including this opinion as an exhibit or otherwise.
Very truly yours,
ORRICK, HERRINGTON & SUTCLIFFE LLP
