EXHIBIT 1.1
SOUTHPOINT STRUCTURED ASSETS, INC.
TVA SECURITY-BACKED CERTIFICATES, SERIES 1998-1
UNDERWRITING AGREEMENT
March 16, 1998
Xxxx Xxxxxxxx Corporation
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
Southpoint Structured Assets, Inc., a Delaware corporation (the "Company"),
proposes to cause the issuance of $5,000,000 aggregate principal amount of its
6.25% TVA Security-Backed Certificates, Series 1998-1, due December 15, 2017
(the "Certificates"), to be issued under the trust agreement specified in
Schedule I hereto (the "Trust Agreement") between the Company and the Trustee
identified in such Schedule (the "Trustee"), to Xxxx Xxxxxxxx Corporation (the
"Underwriter"). Pursuant to the Trust Agreement, the Company and the Trustee
will form the TVA Security-Backed Trust, Series 1998-1(the "Trust") for the
purpose of issuing the Certificates. The Certificates will represent a
fractional undivided interest in the Trust and the principal asset of the Trust
will consist of a Tennessee Valley Authority Power Bond 1997 Series E having an
aggregate principal amount of $5,000,000, a coupon of 6.25% and a maturity of
December 15, 2017 (the "TVA Security;"). The TVA Security will be deposited into
the Trust by the Company subject to the right of the holder of the Call Warrant
to purchase the TVA Security on any date on or after June 15, 2001 (an "Early
Termination Date") at a price of par plus accrued interest to such Early
Termination Date (the "Liquidation Price"). The TVA Security is sometimes
referred to herein as the "Underlying Security." The Call Warrant is not subject
to this Agreement.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement on Form S-3 (No. 333-09883), relating to certain securities to be
issued from time to time by various trusts originated by the Company. The
Company also has filed with, or proposes to file with, the Commission pursuant
to Rule 424 under the Securities Act a prospectus supplement specifically
relating to the Certificates. The registration statement as amended to the date
of this Agreement is hereinafter referred to as the "Registration Statement" and
the related prospectus in the form first used to confirm sales of the
Certificates is hereinafter referred to as the "Basic Prospectus." The Basic
Prospectus as supplemented by the prospectus supplement specifically relating to
the Certificates in the form first used to confirm sales of the Certificates is
hereinafter referred to as the "Prospectus." Any preliminary form of the
Prospectus Supplement which has heretofore been filed pursuant to Rule 424, or
prior to the effective date of the Registration
Statement, pursuant to Rule 402(a) or 424(a) is hereinafter called a
"Preliminary Prospectus Supplement." Any reference to "amend," "amendment" or
"supplement" with respect to the Registration Statement, the Basic Prospectus,
any preliminary prospectus or the Prospectus shall be deemed to refer to and
include any documents filed under the Exchange Act after the date of this
Agreement, or the date of the Basic Prospectus, any preliminary prospectus or
the Prospectus, as the case may be, which are deemed to be incorporated by
reference therein.
The Company hereby agrees with the Underwriter as follows:
1. (a) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company agrees to sell to
the Underwriter, and the Underwriter agrees to purchase from the Company, the
Certificates at a price, as of the Closing Date, equal to 97.795% of the
aggregate principal balance of the Certificates.
(b) The Company will deliver the Certificates against payment of the
purchase price by the Underwriter at 11:00 a.m., EST, on March 19, 1998, or such
later date as the Underwriter shall designate, which date and time may be
postponed by agreement between the Underwriter and the Company (such date and
time of delivery and payment for the Certificates being herein called the
"Closing Date"). Delivery of the Certificates shall be made through the services
of the Depository Trust Company ("DTC"). Payment of the purchase price shall be
made by wire transfer of immediately available funds to an account previously
designated to the Underwriter by the Company.
2. The Company understands that the Underwriter intends (i) to make a
public offering of the Certificates and (ii) initially to offer the Certificates
upon the terms set forth in the Prospectus, and the Underwriter agrees that all
such offers and sales by the Underwriter shall be made in compliance with all
applicable laws and regulations.
3. The Company represents and warrants to the Underwriter that:
(a) The Registration Statement on Form S-3 (No. 333-09883) in respect
of the Certificates has been filed with the Commission in the form
heretofore delivered or to be delivered and such Registration Statement in
such form has been declared effective by the Commission and no stop order
suspending the effectiveness of such Registration Statement has been issued
and no proceeding for that purpose has been initiated or threatened by the
Commission.
(b) The Certificates meet the requirements for use of Form S-3 under
the Securities Act, and the Registration Statement and the Prospectus
conform, and any amendments or supplements thereto will conform, in all
material respects to the requirements of the Securities Act and the rules
and regulations of the Commission thereunder, and the Registration
Statement, as of the applicable effective date, did not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and the Prospectus, including any amendments or supplements
thereto, as of the date of the
-2-
Prospectus Supplement and as of the Closing Date, does not and will not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The conditions to the use by the
Company of a registration statement on Form S-3 under the Securities Act, as set
forth in the General Instructions to Form S-3, have been satisfied with respect
to the Registration Statement and the Prospectus.
(c) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware with
corporate power and authority to enter into and perform its obligations under
this Agreement and the Trust Agreement; and the Company is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which the ownership or lease of its properties or the conduct of
its business requires such qualification, except where the failure to be so
qualified, considering all such cases in the aggregate, does not have a material
adverse effect on the business or properties of the Company.
(d) This Agreement has been duly authorized, executed and delivered by the
Company and constitutes a valid and binding agreement of the Company enforceable
in accordance with its terms, except that the enforceability hereof may be
subject to (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights generally,
and (ii) general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law); and except that rights to
indemnification hereunder may be limited by public policy under applicable
securities laws.
(e) The Certificates have been duly authorized by the Company and, when
executed, authenticated and delivered in accordance with the Trust Agreement and
delivered to the Underwriter pursuant to this Agreement, such Certificates will
have been duly and validly issued and outstanding and will be entitled to the
benefits provided by the Trust Agreement; at the Closing Date the Trust
Agreement will be duly authorized, executed and delivered by the Company and
will constitute a valid and binding agreement of the Company enforceable in
accordance with its terms, except that the enforceability thereof may be subject
to (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally, and (ii)
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law); and at the Closing Date the
Trust Agreement and the Certificates will conform in all material respects to
the respective descriptions thereof in the Prospectus and the representations
and warranties of the Company in the Trust Agreement will be true and correct.
(f) The issue and sale of the Certificates, the compliance by the Company
with all applicable provisions of the Certificates, the Trust Agreement and this
Agreement, and the consummation of the transactions herein or therein
contemplated will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien,
-3-
mortgage, pledge, charge, security interest or encumbrance (collectively,
"Liens") upon any property or assets of the Company pursuant to, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company is a party or by which the Company is bound
or to which any of the property or assets of the Company is subject, nor
will any such action result in any violation of the provisions of the
Certificate of Incorporation or the by-laws of the Company or of any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its
properties; and no consent, notice, approvals, authorization, order,
registrations or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Certificates or
the consummation by the Company of the other transactions contemplated by
this Agreement or the Trust Agreement except such as have been obtained and
such consents, approvals, authorizations, registrations or qualifications
as may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Certificates by the Underwriter.
(g) Other than as set forth or contemplated in the Prospectus, there
are no legal or governmental proceedings pending to which the Company is a
party or of which any property of the Company is the subject which, if
determined adversely to such person would individually or in the aggregate
have a material adverse effect on the financial position, earnings,
management, stockholder's equity or results of operations of the Company or
which might interfere with or adversely affect the consummation of the
transactions contemplated herein or in the Trust Agreement; and, to the
best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(h) At the time of execution and delivery of the Trust Agreement, the
Company will have good and marketable title to the Underlying Security
being transferred to the Trust pursuant thereto, free and clear of any
Liens, and will not have assigned to any person any of its rights, title or
interest therein; the Company will have the power and authority to transfer
the Underlying Security to the Trust on the Closing Date and the Trust will
have been assigned all right, title and interest held by the Company in and
to the Underlying Security (exclusive of the Call Warrant).
(i) Any taxes, fees and other governmental charges in connection with
the execution, delivery and performance of this Agreement, the Trust
Agreement and the Certificates have been or will be paid at or prior to the
Closing Date.
(j) The Trust created by the Trust Agreement is not required to be
registered under the Investment Company Act of 1940, as amended (the "1940
Act").
4. The Underwriter represents and warrants to and agrees with the Company
that such Underwriter will have funds available at First Bank, N.A. in the
Underwriter's account at such bank at the time all documents are executed and
the closing of the sale of the Certificates is completed except for the transfer
of funds and the delivery of the Certificates.
-4-
Such funds will be available for immediate transfer into the account of the
Company maintained at such bank.
5. The Company covenants and agrees with the Underwriter as follows:
(a) to cause the Prospectus to be transmitted to the Commission for
filing pursuant to Rule 424(b) under the Securities Act by means reasonably
calculated to result in filing with the Commission pursuant to said rule;
(b) to deliver to the Underwriter, at the expense of the Company, a
signed copy of the Registration Statement (as originally filed) and each
amendment thereto, in each case including exhibits and, during the period
mentioned in paragraph (e) below, as many copies of the Prospectus
(including all amendments and supplements thereto) as the Underwriter may
reasonably request;
(c) from the date hereof and prior to the Closing Date, to furnish to
the Underwriter a copy of any proposed amendment or supplement to the
Registration Statement or the Prospectus, for review by the Underwriter,
and not to file any such proposed amendment or supplement to which the
Underwriter reasonably objects;
(d) to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company or the Trust
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Certificates, and during such
same period, to advise the Underwriter promptly, and to confirm such advice
in writing, (i) when any amendment to the Registration Statement shall have
become effective, (ii) of any request by the Commission for any amendment
to the Registration Statement or any amendment or supplement to the
Prospectus or for any additional information, (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation or threatening of any proceeding
for that purpose, and (iv) of the receipt by the Company or the Trust of
any notification with respect to any suspension of the qualification of the
Certificates for offer and sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and to use its best efforts
to prevent the issuance of any such stop order or notification and, if
issued, to obtain as soon as possible the withdrawal thereof;
(e) if, during such period after the first date of the public offering
of the Certificates in the opinion of counsel for the Underwriter a
prospectus relating to the Certificates is required by law to be delivered
in connection with sales by the Underwriter or dealer, any event shall
occur as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the Prospectus to
comply with law, forthwith to prepare and furnish, at the expense of the
Company, to the Underwriter and to the dealers (whose names and addressees
the Underwriter will
-5-
furnish to the Company) to which Certificates may have been sold by the
Underwriter and to any other dealers upon request, such amendments or
supplements to the Prospectus as may be necessary so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be misleading or
so that the Prospectus will comply with law;
(f) to endeavor to qualify the Certificates for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Underwriter shall
reasonably request and to continue such qualification in effect so long as
reasonably required for distribution of the Certificates and to pay all fees and
expenses (including fees and disbursements of counsel to the Underwriter)
reasonably incurred in connection with such qualification and in connection with
the determination of the eligibility of the Certificates for investment under
the laws of such jurisdictions as the Underwriter may designate; provided,
however, that the Company shall not be required to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action that would
subject it to general or unlimited service of process in any jurisdiction where
it is not now so subject;
(g) to make generally available to its security holders and to the
Underwriter as soon as practicable, but no later than sixteen months after the
effective date of the Registration Statement, an earnings statement covering a
period of at least twelve months beginning with the first fiscal quarter of the
Company occurring after the effective date of the Registration Statement, which
shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
of the Commission promulgated thereunder;
(h) so long as the Certificates are outstanding, to furnish to the
Underwriter copies of all reports or other communications (financial or other)
furnished to holders of Certificates, and copies of any reports and financial
statements furnished to or filed with the Commission or any national securities
exchange;
(i) to pay all costs and expenses incident to the performance of its
obligations hereunder, including without limiting the generality of the
foregoing, all costs and expenses (i) incident to the preparation, issuance,
execution, authentication and delivery of the Certificates, including any
expenses of the Trustee, (ii) incident to the preparation, printing and filing
under the Securities Act of the Registration Statement, the Prospectus and any
preliminary prospectus (including in each case all exhibits, amendments and
supplements thereto), (iii) incurred in connection with the registration or
qualification and determination of eligibility for investment of the
Certificates under the laws of such jurisdictions as the Underwriter may
designate (including fees of counsel for the Underwriter and its disbursements),
(iv) in connection with the listing of the Certificates on any stock exchange,
(v) related to any filing with National Association of Securities Dealers, Inc.,
(vi) in connection with the printing (including word processing and duplication
costs) and delivery of this Agreement, the Trust Agreement and the furnishing to
the Underwriter and
-6-
dealers of copies of the Registration Statement and the Prospectus,
including mailing and shipping, as herein provided and (vii) payable to
rating agencies in connection with the rating of the Certificates; and
(j) to file with the Commission within fifteen days of the issuance
of the Certificates a Current Report on Form 8-K (for purposes of filing
the Trust Agreement).
6. The obligations of the Underwriter hereunder shall be subject to the
following conditions:
(a) the representations and warranties of the Company contained
herein are true and correct on and as of the Closing Date as if made on and
as of the Closing Date and the Company shall have complied with all
agreements and all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date;
(b) the Prospectus shall have been filed with the Commission pursuant
to Rule 424 within the applicable time period prescribed for such filing by
the rules and regulations under the Securities Act; no stop order
suspending the effectiveness of the Registration Statement shall be in
effect, and no proceedings for such purpose shall be pending before or
threatened by the Commission; and all requests for additional information
on the part of the Commission shall have been complied with to the
satisfaction of the Underwriter;
(c) since the respective dates as of which information is given in
the Registration Statement and the Prospectus there shall not have been any
material adverse change or any development involving a material adverse
change, or any development with respect to the Company, otherwise than as
set forth or contemplated in the Prospectus, the effect of which in the
judgment of the Underwriter makes it impracticable or inadvisable to
proceed with the public offering or the delivery of the Certificates on the
terms and in the manner contemplated in the Prospectus;
(d) the Underwriter shall have received on and as of the Closing Date
a certificate of an executive officer of the Company satisfactory to the
Underwriter to the effect set forth in subsections (a), (b) and (c) of this
Section;
(e) Xxxxxxx and Xxxxxx, special counsel for the Company, shall have
furnished to the Underwriter their written opinion, dated the Closing Date,
substantially to the effect set forth in Exhibit A;
(f) Xxxxxxx and Xxxxxx, special tax counsel for the Company, shall
have furnished to the Underwriter their written opinion, dated the Closing
Date, substantially to the effect set forth in Exhibit B;
-7-
(g) Hamb & Xxxxxxxxxxxx, counsel to the Trustee shall have furnished
to the Underwriter their opinion, dated the Closing Date, substantially to
the effect set forth in Exhibit C, in form and substance satisfactory to
the Underwriter;
(h) the Underwriter shall have received on and as of the Closing Date
an opinion of Xxxxxxx and Xxxxxx, counsel to the Underwriter, substantially
to the effect set forth in Exhibit D in form and substance satisfactory to
the Underwriter;
(i) the Certificates shall have been approved for listing on the New
York Stock Exchange, subject to official notice of issuance;
(j) The Certificates shall have been rated "AAA" by Standard & Poor's
Ratings Services; and
(k) on or prior to the Closing Date, the Company shall have furnished
to the Underwriter such further certificates and documents as the
Underwriter shall reasonably request.
7. The Company agrees to indemnify and hold harmless the Underwriter and
each person, if any, who controls the Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages and liabilities (including without
limitation the legal fees and other expenses incurred in connection with any
suit, action or proceeding or any claim asserted) caused by any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) or any preliminary
prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with information
furnished to the Company by the Underwriter expressly for use therein as
described in Exhibit E hereto (the "Underwriter Information"); provided that the
foregoing indemnity with respect to any preliminary prospectus shall not inure
to the benefit of any Underwriter (or to the benefit of any person controlling
such Underwriter) from whom the person asserting any such losses, claims,
damages or liabilities purchased Certificates if such untrue statement or
omission or alleged untrue statement or omission made in such preliminary
prospectus is eliminated or remedied in the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) and, if required by law, a copy of the Prospectus (as so amended or
supplemented) shall not have been furnished to such person at or prior to the
written confirmation of the sale of such Certificates to such person.
The Underwriter agrees to indemnify and hold harmless the Company, its
directors, its officers who sign the Registration Statement and each person who
controls the Company within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act,
-8-
to the same extent as the foregoing indemnity from the Company to each
Underwriter, but only with reference the Underwriter Information.
If any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any person
in respect of which indemnity may be sought pursuant to either of the two
preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Person has failed within
a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm for the Underwriter
and such control persons of the Underwriter shall be designated in writing by
the Underwriter and any such separate firm for the Company, its directors, its
officers who sign the Registration Statement and such control persons of the
Company or authorized representatives shall be designated in writing by the
Company. The Indemnifying Person shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the Indemnifying
Person agrees to indemnify any Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. No Indemnifying Person
shall, without the prior written consent of the Indemnified Person, effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Person is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Person, unless such settlement includes an
unconditional release of such Indemnified Person from all liability on claims
that are the subject matter of such proceeding.
If the indemnification provided for in the first and second paragraphs of
this Section 7 is unavailable to an Indemnified Person in respect of any losses,
claims, damages or liabilities referred to therein, then each Indemnifying
Person under such paragraph, in lieu of indemnifying such Indemnified Person
thereunder, shall contribute to the amount paid or payable by such Indemnified
Person as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriter on the other hand from the offering
of the Certificates or (ii) if the allocation provided by clause (i) above is
not permitted by
-9-
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Underwriter on the other in connection with
the statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriter on
the other shall be deemed to be in the same respective proportions as the net
proceeds from the offering of such Certificates (before deducting expenses)
received by the Company and the total underwriting discounts and the commissions
received by the Underwriter bear to the aggregate public offering price of the
Certificates. The relative fault of the Company on the one hand and the
Underwriter on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriter and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriter agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, in no event shall the
Underwriter be required to contribute any amount in excess of the amount by
which the total price at which the Certificates underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages that such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
The indemnity and contribution agreements contained in this Section 7 are
in addition to any liability which the Indemnifying Persons may otherwise have
to the Indemnified Persons referred to above.
The indemnity and contribution agreements contained in this Section 7 and
the representations and warranties of the Company set forth in this Agreement
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
the Underwriter or any person controlling the Underwriter or by or on behalf of
the Company, its officers or directors or any other person controlling the
Company and (iii) acceptance of and payment for any of the Certificates.
-10-
8. Notwithstanding anything herein contained, this Agreement may be
terminated in the absolute discretion of the Underwriter, by notice given to the
Company, if after the execution and delivery of this Agreement and prior to the
Closing Date (i) trading generally shall have been suspended or materially
limited on or by, as the case may be, any of the New York Stock Exchange, the
American Stock Exchange and the National Association of Securities Dealers,
Inc., (ii) trading of any securities of or guaranteed by the Company shall have
been suspended on any exchange or in any over-the-counter market, (iii) a
general moratorium on commercial banking activities in New York shall have been
declared by either Federal or New York State authorities, or (iv) there shall
have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in the judgment of the
Underwriter, is material and adverse and which, in the judgment of the
Underwriter, makes it impracticable to market the Certificates on the terms and
in the manner contemplated in the Prospectus.
9. If this Agreement shall be terminated by the Underwriter because of
any failure or refusal on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, or if for any reason the
Company shall be unable to perform its obligations under this Agreement or any
condition of the Underwriter's obligations cannot be fulfilled, the Company
agrees to reimburse the Underwriter for all out-of-pocket expenses (including
the fees and expenses of their counsel) reasonably incurred by such Underwriter
in connection with this Agreement or the offering of Certificates.
10. This Agreement shall inure to the benefit of and be binding upon the
Company, the Underwriter, any controlling persons referred to herein and their
respective successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person, firm or
corporation any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision herein contained. No purchaser of Certificates
from the Underwriter shall be deemed to be a successor by reason merely of such
purchase.
11. All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted and confirmed
by any standard form of telecommunication. Notices to the Underwriter shall be
given at the address set forth on the first page hereof. Notices to the Company
shall be given to it at Southpoint Structured Assets, Inc., 00 Xxxxx Xxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxx 00000, (fax: 000-000-0000); Attention: C. Xxxxx
Xxxxxx.
-11-
12. This Agreement may be signed in counterparts, each of which shall be
an original and all of which together shall constitute one and the same
instrument. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without giving effect to the conflicts of
laws provisions thereof.
Very truly yours,
SOUTHPOINT STRUCTURED ASSETS, INC.
By: /s/ C. Xxxxx Xxxxxx
------------------------------
C. Xxxxx Xxxxxx
President
Accepted: March 16, 1998
By: XXXX XXXXXXXX CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Director/Retail Fixed Income
-12-
SCHEDULE I
Underwriting Agreement
dated: March 16, 1998
Registration Statement No.: 333-09883
Title of Certificates: $5,000,000 6.25% TVA Security-Backed Certificates,
Series 1998-1 due December 15, 2017
Underlying Security: $5,000,000 6.25% Tennessee Valley Authority Power
Bond 1997 Series E due December 15, 2017 subject
to the Call Warrant
Aggregate Principal Amount: $5,000,000
Price to Underwriter: $4,889,750 (97.795% of the principal amount of the
Certificates)
Trust Agreement: Standard Terms for Trust Agreements, dated as of
November 1, 1996, as supplemented by the Series
Supplement, dated as of March 19, 1998, between
the Company and Bank One, West Virginia, N.A., as
Trustee
Maturity: December 15, 2017
Interest Rate: 6.25% per annum
Interest Payment Dates: June 15 and December 15
Early Termination of Certificates may be paid in full on any date
Provisions: on or after June 15, 2001 in an amount equal to
par plus accrued interest
Closing Date and Time of
Delivery: March 19, 1998, 11:00 a.m. (EST)
Closing Location: Offices of Xxxxxxx and Xxxxxx, 000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxx 00000
EXHIBIT A
[XXXXXXX AND XXXXXX LETTERHEAD]
[Date]
Southpoint Structured Assets, Inc.
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Xxxx Xxxxxxxx Corporation
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
New York Stock Exchange, Inc.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Greenwich NatWest
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Standard & Poor's Ratings Services
00 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Southpoint Structured Assets, Inc.
TVA Security-Backed Certificates, Series 1998-1
-----------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to Southpoint Structured Assets, Inc. (the
"Company") in connection with the issuance and sale of TVA Security-Backed
Certificates, Series 1998-1 (the "Certificates") pursuant to a Standard Terms
for Trust Agreements, dated as of November 1, 1996 as supplemented by the Series
Supplement, dated as of March 19, 1998 (the "Trust Agreement"), between the
Company and Bank One, West Virginia, N.A., as trustee (the "Trustee").
The Certificates will be issued by the TVA Security-Backed Trust, Series
1998-1, (the "Trust"), to be formed pursuant to the Trust Agreement. The
Certificates will represent a fractional undivided interest in the Trust and the
principal asset of the Trust will consist of a Tennessee Valley Authority Power
Bond 1997 Series E having an aggregate principal
amount of $5,000,000, a coupon of 6.25% and a maturity of December 15, 2017 (the
"TVA Security"). The TVA Security will be deposited into the Trust by the
Company subject to the right of the holder of the Call Warrant to purchase the
TVA Security on any date on or after June 15, 2001 (an "Early Termination Date")
at a price of par plus accrued interest to such Early Termination Date (the
"Liquidation Price"). The TVA Security is sometimes referred to herein as the
"Underlying Security."
The Certificates are included in a Registration Statement on Form S-3 (File
No. 333-09883) filed by the Company with the Securities and Exchange Commission
(the "Commission") on August 9, 1996, as amended by Amendment No. 1 to
Registration Statement filed on October 1, 1996, Amendment No. 2 to Registration
Statement filed on October 21, 1996 and Amendment No. 3 to Registration
Statement filed on November 13, 1996 and declared effective on November 15, 1996
(as amended as of the date hereof, the "Registration Statement"), and were
offered by the prospectus dated November 15, 1996, as supplemented by the
prospectus supplement dated March 16, 1998 (together, the "Prospectus"), filed
with the Commission pursuant to Rule 424(b) of the rules and regulations of the
Commission under the Securities Act of 1933, as amended (the "Act").
The Company will cause the issuance of the Certificates to Xxxx Xxxxxxxx
Corporation (the "Underwriter") pursuant to an Underwriting Agreement, dated
March 16, 1998, between the Company and the Underwriter (the "Underwriting
Agreement"; the Trust Agreement and the Underwriting Agreement are collectively
referred to herein as the "Agreements"). Capitalized terms used but not defined
herein shall have the meanings set forth in the Agreements. This opinion letter
is rendered pursuant to Section 6(e) of the Underwriting Agreement.
In arriving at the opinion expressed below, we have examined and relied on
the following documents:
(a) executed copies of the Agreements;
(b) the Certificate of Incorporation and By-Laws of the Company;
(c) good standing certificate from the Secretary of State of the
State of Delaware concerning the Company;
(d) resolutions adopted by the Board of Directors of the Company by
written unanimous consent, authorizing, among other things, the issuance of
the Certificates;
(e) the President's Certificate executed by the President of the
Company, authorizing, among other things, the issuance of the Certificates;
(f) the Registration Statement;
(g) the Prospectus;
A-2
(h) the forms of the Certificates; and
(i) the documents delivered by the Company on the Closing Date
pursuant to the Agreements.
In addition, we have examined and relied, as to factual matters, on the
representations of the Company in the Agreements and on originals or copies
certified or otherwise identified to our satisfaction of all such corporate
records of the Company and such other instruments and other certificates of
public officials, officers and representatives of the Company and the Trustee,
and we have made such investigations of law, as we have deemed appropriate as a
basis for the opinion expressed below.
Based upon such examination and having regard for legal considerations
which we deem relevant, we are of the following opinion:
1. The Registration Statement has become effective under the Act,
and, to our knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and not withdrawn, and no
proceedings for that purpose have been instituted or threatened under
Section 8(d) of the Act.
2. The Registration Statement, as of the date it became effective,
and the Prospectus, as of the date of the Prospectus Supplement, other than
any financial or statistical information contained therein as to which we
express no opinion, complied as to form in all material respects with the
requirements of the Act and the applicable rules and regulations
thereunder.
3. To our knowledge, there are no material contracts, indentures, or
other documents of a character required to be described or referred to in
either the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement other than those described or
referred to therein or filed as exhibits thereto.
4. The Certificates, when validly authorized, duly executed,
authenticated, issued and delivered in accordance with the Trust Agreement,
will be entitled to the benefits of the Trust Agreement.
5. The statements set forth in the Prospectus under the headings
"DESCRIPTION OF THE CERTIFICATES" and "DESCRIPTION OF THE TRUST AGREEMENT,"
insofar as such statements purport to summarize certain provisions of the
Certificates and the Trust Agreement, are correct in all material respects.
The statements set forth in the Prospectus under the headings "FEDERAL
INCOME TAX CONSEQUENCES," and "ERISA CONSIDERATIONS," to the extent that
they constitute matters of federal law or legal conclusions with respect
thereto, while not purporting to discuss all possible consequences of
investment in the Certificates, are correct in all material respects with
respect to those consequences or matters that are discussed therein.
A-3
6. The Trust created by the Trust Agreement is not required to be
registered under the Investment Company Act of 1940, as amended.
7. The Company is duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware and has the
requisite power and authority, corporate or other, to own its properties and
conduct its business, as presently conducted by it, and to enter into and
perform its obligations under the Agreements and the Certificates.
8. The Certificates have been duly authorized by the Board of Directors of
the Company.
9. The Trust Agreement has been duly qualified under the Trust Indenture
Act of 1939, as amended.
10. Each of the Agreements has been duly authorized, executed and delivered
by the Company and, upon due authorization, execution and delivery by the other
parties thereto, each will constitute a valid, legal and binding agreement of
the Company, enforceable against the Company in accordance with its terms
subject to: (1) limitations imposed by bankruptcy, insolvency, reorganization,
arrangement, moratorium or other laws relating to or affecting the enforcement
of creditors' rights generally; (2) general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or at law;
and (3) rights to indemnification which may be limited by applicable law or
equitable principles or otherwise unenforceable as against public policy.
In addition, we have participated in conferences with your representatives
concerning the Registration Statement and the Prospectus and have considered the
matters required to be stated therein and the statements contained therein,
although we have not independently verified the accuracy, completeness or
fairness of such statements (except as described in paragraph 5 above). Based
upon and subject to the foregoing, nothing has come to our attention to cause us
to believe that the Registration Statement (excluding any exhibits filed
therewith), as of the date it became effective, contained an untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectus, as of the date of the Prospectus Supplement and as of the Closing
Date, contained or contains an untrue statement of a material fact or omitted or
omits to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading (it being understood that we have not been requested to and
we do not make any comment in this paragraph with respect to the financial
statements, schedules and other financial and statistical information contained
in the Registration Statement or the Prospectus).
With your permission we have assumed the following: (a) the authenticity of
original documents and the genuineness of all signatures; (b) the conformity to
the originals of all documents submitted to us as copies; (c) the truth,
accuracy and completeness of the
A-4
information, factual matters, representations and warranties contained in the
records, documents, instruments and certificates we have reviewed; and (d)
except as specifically covered in the opinions set forth above, the due
authorization, execution and delivery on behalf of the respective parties
thereto of documents referred to herein and the legal, valid and binding effect
thereof on such parties.
Whenever a statement herein is qualified by the phrase "to our knowledge,"
it is intended to indicate that, during the course of our representation of the
Company, no information that would give us current actual knowledge of the
inaccuracy of such statement has come to the attention of those attorneys
currently in this firm who have rendered legal services in connection with this
opinion letter. However, we have not undertaken any independent investigation to
determine the accuracy of any such statement, and any limited inquiry undertaken
by us during the preparation of this opinion letter should not be regarded as
such an investigation; no inference as to our knowledge of any matters bearing
on the accuracy of any such statement should be drawn from the fact of our
representation of the Company.
With respect to our opinion set forth in paragraph 2, in passing on the
form of Registration Statement and the Prospectus, we have necessarily assumed
the correctness and completeness of the statements made therein.
This opinion letter is solely for your benefit and may not be relied upon
or used by, circulated, quoted or referred to, nor may copies hereof be
delivered to, any other person without our prior written approval. We disclaim
any obligation to update this opinion letter for events occurring or coming to
our attention after the date hereof.
Respectfully submitted,
XXXXXXX AND XXXXXX
A-5
EXHIBIT B
[XXXXXXX AND XXXXXX LETTERHEAD]
[Date]
Southpoint Structured Assets, Inc.
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Xxxx Xxxxxxxx Corporation
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Greenwich NatWest
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Standard & Poor's Ratings Services
00 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Southpoint Structured Assets, Inc.
TVA Security-Backed Certificates, Series 1998-1
Ladies and Gentlemen:
We have acted as special counsel to Southpoint Structured Assets, Inc. (the
"Company") in connection with the issuance and sale of TVA Security-Backed
Certificates, Series 1998-1 (the "Certificates") pursuant to a Standard Terms
for Trust Agreements, dated as of November 1, 1996 as supplemented by the Series
Supplement, dated as of March 19, 1998 (the "Trust Agreement"), among the
Company and Bank One, West Virginia, N.A., as trustee (the "Trustee").
The Certificates will be issued by the TVA Security-Backed Trust, Series
1998-1 (the "Trust") to be formed pursuant to the Trust Agreement. The
Certificates will represent a fractional undivided interest in the Trust and the
principal asset of the Trust will consist of a Tennessee Valley Authority Power
Bond 1997 Series E having an aggregate principal amount of $5,000,000, a coupon
of 6.25% and a maturity of December 15, 2017 (the "TVA Security" or the
"Underlying Security"). The TVA Security will be deposited into the Trust
subject to the right of the holder of the Call Warrant to purchase the TVA
Security on any date on or after June 15, 2001 (an "Early Termination Date") at
a price of par plus accrued
interest to such Early Termination Date (the "Liquidation Price"). The Trustee
will hold legal title to the Underlying Security and other assets of the Trust
for the benefit of the Certificateholders, but will have no power to reinvest
proceeds attributable to the Underlying Security or other assets of the Trust or
to vary investments in the Trust in any manner.
The Certificates are included in a Registration Statement on Form S-3 (File
No. 333-09883) filed by the Company with the Securities and Exchange Commission
(the "Commission") on August 9, 1996, as amended by Amendment No. 1 to
Registration Statement filed on October 1, 1996, Amendment No. 2 to Registration
Statement filed on October 21, 1996 and Amendment No. 3 to Registration
Statement filed on November 13, 1996 and declared effective on November 15, 1996
(as amended as of the date hereof, the "Registration Statement"), and were
offered by the prospectus dated November 14, 1996, as supplemented by the
prospectus supplement dated March 16, 1998 (together, the "Prospectus"), filed
with the Commission pursuant to Rule 424(b) of the rules and regulations of the
Commission under the Securities Act of 1933, as amended (the "Act").
The Company will cause the issuance of the Certificates to Xxxx Xxxxxxxx
Corporation (the "Underwriter") pursuant to an Underwriting Agreement, dated
March 16, 1998, between the Company and the Underwriter (the "Underwriting
Agreement"; the Trust Agreement and the Underwriting Agreement are collectively
referred to herein as the "Agreements"). Capitalized terms used but not defined
herein shall have the meanings set forth in the Agreements. This opinion letter
is rendered pursuant to Section 6(f) of the Underwriting Agreement.
In arriving at the opinion expressed below, we have examined and relied on
the following documents each of which we have assumed has been duly and validly
authorized, executed and delivered by all parties thereto other than the
Company:
(a) executed copies of the Agreements;
(b) the Prospectus;
(c) the forms of the Certificates; and
(d) the documents delivered by the Company on the Closing Date
pursuant to the Agreements.
In addition, we have relied, as to factual matters, on the representations
of the Company in the Agreements and on originals or copies certified or
otherwise identified to our satisfaction of all such corporate records of the
Company and such other instruments and other certificates of public officials,
officers and representatives of the Company and the Trustee, without any
investigation thereof. However, we have made such investigations of law, as we
have deemed appropriate as a basis for the opinion expressed below. Our opinion
is subject to the qualification that facts different from those set forth in the
Agreements on
B-2
the date hereof and all such instruments or certificates may affect or prevent
us from rendering an opinion as expressed herein.
Our opinion is based on current provisions of the Internal Revenue Code of
1986, as amended (the "Code"), the Treasury Regulations promulgated thereunder,
published pronouncements of the Internal Revenue Service, and case law, any of
which may be changed at any time with retroactive effect. Further, you should be
aware that opinions of counsel are not binding on the Internal Revenue Service
or the courts. We note that the Company has not requested a ruling from the
Internal Revenue Service as to the matters covered by our opinion. We express no
opinion either as to any matters not specifically covered by the following
opinion or as to the effect on the matters covered by this opinion of the laws
of any other jurisdictions. Additionally, we undertake no obligation to update
this opinion in the event there is either a change in the legal authorities,
facts, including the taking of any action by any party to any of the
transactions described in the Prospectus pursuant to any opinion of counsel as
required by any of the documents relating to such transactions, or documents on
which this opinion is based, or an inaccuracy in any of the representations or
warranties upon which we have relied in rendering this opinion.
On the basis of the foregoing and in reliance thereon and our consideration
of such other matters of fact and questions of law as we have deemed necessary,
and assuming continuing compliance with the Trust Agreement, we are of the
opinion that:
(i) subject to the qualifications referred to herein, for Federal
income tax purposes, the Trust created under the Trust Agreement will be
treated as a grantor trust under Subpart E, Part I, of Subchapter J of the
Code and not as an association taxable as a corporation under the Code, and
under Section 671 of the Code, each Certificateholder will be treated as
the owner of a pro rata interest in the property of the Trust; and,
(ii) the applicable statements contained in the Prospectus Supplement,
under the caption "FEDERAL INCOME TAX CONSEQUENCES," while not purporting
to discuss all possible federal income tax consequences of an investment in
Certificates, is materially accurate with respect to those tax consequences
which are discussed.
We hereby consent to the filing of this opinion letter as an Exhibit to the
Registration Statement and to the references to our firm under the captions
"FEDERAL INCOME TAX CONSEQUENCES" and "LEGAL OPINIONS" in the Prospectus without
admitting that we are "experts" within the meaning of the Act, and the rules and
regulations thereunder, with respect to any part of the Registration Statement.
Respectfully submitted,
XXXXXXX AND XXXXXX
B-3
EXHIBIT C
[COUNSEL TO TRUSTEE LETTERHEAD]
[Date]
Southpoint Structured Assets, Inc.
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Bank One, West Virginia, N.A.
000 Xxxxxxxx Xxxxxx Xxxx
Xxxxxxxxxx, Xxxx Xxxxxxxx 00000
Xxxx Xxxxxxxx Corporation
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
We have acted as special counsel to Bank One, West Virginia, N.A. in its
capacity as trustee (the "Trustee") in connection with the issuance and sale by
the Company of TVA Security-Backed Certificates, Series 1998-1 (the
"Certificates") pursuant to a Standard Terms for Trust Agreements, dated as of
November 1, 1996 as supplemented by the Series Supplement, dated as of March 19,
1998 (the "Trust Agreement"), among the Company and the Trustee.
Based on the foregoing and subject to the qualifications and matters of
reliance set forth herein, it is our opinion that:
1. The Trustee is a national banking association duly organized,
validly existing and in good standing under the laws of the United
States of America, with full corporate and trust power and authority to
conduct its business and affairs as a Trustee.
2. The Trustee has full corporate power and authority to execute and
deliver the Trust Agreement and the Certificates and to perform its
obligations thereunder.
3. The Trustee has duly accepted the office of trustee under the Trust
Agreement.
4. The Trustee has duly authorized, executed, issued and delivered the
Trust Agreement and has duly and validly authorized, executed, issued,
delivered and authenticated the Certificates as the Trustee.
5. The Trust Agreement constitutes the legal, valid and binding
agreements of the Trustee, enforceable against the Trustee in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws affecting the rights
of creditors generally and by general principles of equity and the
discretion of the court, regardless of whether such enforcement is
considered in a proceeding in equity or at law, and except as
enforceability may be determined according to or limited by the laws of
jurisdictions other than those specified below.
In rendering the foregoing opinion, we have assumed that the Trust
Agreement has been duly authorized, executed and delivered by the other parties
thereto and are valid, legal, binding and enforceable obligations of such
parties.
We express no opinion as to any matter other than as expressly set forth
above, and, in conjunction therewith, we specifically express no opinion as to
the status of the Certificates or the Trust Fund under any federal or state
securities laws, including, but not limited to, the Securities Act of 1933, as
amended, the Trust Indenture Act of 1939, as amended, and the Investment Company
Act of 1940, as amended.
This opinion is as of the date hereof and we undertake no, and disclaim
any, obligation to advise you of any change in any matter set forth herein. This
opinion has been furnished to you at your request in connection with the
transactions described herein, and it may not be relied upon by you for any
other purpose or by any other person without our prior written consent.
We are admitted to practice law under the laws of the State of West
Virginia and the opinion set forth above is limited to the laws of the State of
West Virginia and the laws of the United States of America.
Very truly yours,
[COUNSEL TO THE TRUSTEE]
C-2
EXHIBIT D
[COUNSEL TO THE UNDERWRITER LETTERHEAD]
[Date]
Xxxx Xxxxxxxx Corporation
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Re: Southpoint Structured Assets, Inc.
TVA Security-Backed Certificates, Series 1998-1
Ladies and Gentlemen:
We have acted as counsel to Xxxx Xxxxxxxx Corporation (the "Underwriter")
in connection with the sale by Southpoint Structured Assets, Inc., a Delaware
corporation (the "Company"), and the purchase by the Underwriter pursuant to an
underwriting agreement dated March 16, 1998 (the "Underwriting Agreement") of
certificates entitled TVA Security-Backed Certificates, Series 1998-1 (the
"Certificates"). The Certificates are issued pursuant to a Standard Terms for
Trust Agreements, dated as of November 1, 1996, as amended by a Series
Supplement, dated as of March 19, 1998 (the "Trust Agreement") between the
Company and Bank One, West Virginia as trustee (the "Trustee"). The Certificates
will be issued by the TVA Security-Backed Trust, Series 1998-1 (the "Trust") to
be formed pursuant to the Trust Agreement. The Certificates will represent a
fractional undivided interest in the Trust and the principal asset of the Trust
will consist of a Tennessee Valley Authority Power Bond 1997 Series E having an
aggregate principal amount of $5,000,000, a coupon of 6.25% and a maturity of
December 15, 2017 (the "TVA Security"). The TVA Security will be deposited by
the Company into the Trust subject to the right of the holder of the Call
Warrant to purchase the TVA Security on any date on or after June 15, 2001 (an
"Early Termination Date") at a price of par plus accrued interest to such Early
Termination Date (the "Liquidation Price"). The TVA Security is sometimes
referred to herein as the "Underlying Security." Capitalized terms used, but
not defined herein, shall have the meanings assigned to such terms in the Trust
Agreement.
The Certificates are included in a Registration Statement on Form S-3 (File
No. 333-09883) filed by the Company with the Securities and Exchange Commission
(the "Commission") on August 9, 1996, as amended by Amendment No. 1 to
Registration Statement filed on October 1, 1996, Amendment No. 2 to Registration
Statement filed on October 21, 1996 and Amendment No. 3 to Registration
Statement filed on November 13, 1996 and declared effective on November 15, 1996
(as amended as of the date hereof, the
"Registration Statement"), and were offered by the prospectus dated November 15,
1996, as supplemented by the prospectus supplement dated March 16, 1998
(together, the "Prospectus"), filed with the Commission pursuant to Rule 424(b)
of the rules and regulations of the Commission under the Securities Act of 1933,
as amended (the "Act").
We have examined such documents and records as we deemed appropriate,
including the following:
1. Copy of the Certificate of Incorporation of the Company and all
amendments thereto, certified by the Secretary of State of the State of
Delaware to be a true and correct copy.
2. Copy of the By-Laws of the Company certified by the Secretary of
the Company to be a true and correct copy.
3. Certificate of the Secretary of State of the State of Delaware,
dated as of recent date, to the effect that the Company is in good standing
under the laws of the State of Delaware.
4. Copy of resolutions adopted by the Board of Directors of the
Company in connection with the authorization, issuance and sale of the
Certificates, certified by the Secretary of Company to be a true and
correct copy.
5. Officer's Certificate of the Company pursuant to Section 6(d) of
the Underwriting Agreement.
6. Signed copy of the Underwriting Agreement.
7. Signed copy of the Trust Agreement.
8. Specimens of the Certificates.
9. Signed copies of the Company's registration statement (File No.
333-9883) on Form S-3 filed by the Company with the Securities and Exchange
Commission relating to Trust Certificates (the registration statement in
the form in which it became effective being hereinafter called the
"Registration Statement").
10. The final form of a prospectus dated November 15, 1996 (the "Basic
Prospectus").
11. The final form of a supplement dated March 16, 1998 to the Basic
Prospectus relating specifically to the Certificates (the "Prospectus
Supplement"; the Basic Prospectus and Prospectus Supplement are herein
collectively referred to as the "Prospectus").
D-2
Based upon the foregoing, we are of the opinion that:
(a) The Registration Statement has become effective under the Securities
Act of 1933, as amended (the "Act"), and, to the best of our knowledge and
information, no proceedings for a stop order have been instituted or are
threatened under Section 8(d) of the Act.
(b) The Registration Statement as of its effective date and the Prospectus
as of the date of the Prospectus Supplement, other than the numerical, financial
and statistical data contained therein, as to which we express no opinion,
comply as to form in all material respects with the requirements of the Act and
the rules thereunder.
(c) The Underwriting Agreement has been duly and validly authorized,
executed and delivered by the Company.
(d) The Trust Agreement has been duly and validly authorized, executed and
delivered by the Company and, assuming that it has been duly and validly
authorized, executed and delivered by the other parties thereto, constitutes a
valid, legal and binding agreement of the Company, enforceable against the
Company in accordance with its terms subject to bankruptcy, insolvency,
reorganization or other similar laws affecting creditors' rights generally and,
as to enforceability, to general principles of equity, regardless of whether
such enforcement is considered in a proceeding in equity or at law.
(e) The Certificates, assuming that they have been duly and validly
authorized, executed and issued by the Trustee, will, when authenticated as
specified in the Trust Agreement and delivered to the Underwriter pursuant to
the Underwriting Agreement, be entitled to the benefits of the Trust Agreement.
(f) Trust Fund is not required to be registered under the Investment
Company Act of 1940, as amended.
We have endeavored to see that the Registration Statement and the
Prospectus comply with the Act and the rules and regulations of the Securities
and Exchange Commission thereunder relating to registration statements on Form
S-3 and related prospectuses, but we cannot, of course, make any representation
to you as to the accuracy or completeness of statements of fact contained in the
Registration Statement or Prospectus. Nothing, however, has come to our
attention that would lead us to believe that the Registration Statement at the
time it became effective contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus as of the date
of the Prospectus Supplement and at the date hereof contained or contains an
untrue statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (other than the numerical,
D-3
financial and statistical data contained in the Registration Statement or the
Prospectus, as to which we express no opinion).
This opinion is for your benefit only and is not to be relied upon by any
other person.
Respectfully submitted,
XXXXXXX AND XXXXXX
D-4
EXHIBIT E
UNDERWRITER INFORMATION
The text set forth in the Prospectus Supplement under the heading "Plan of
Distribution" and in the second paragraph therein.
