Exhibit 4.3
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SERIES NSC 1998-1 SUPPLEMENT
between
PRUDENTIAL SECURITIES STRUCTURED ASSETS, INC.
as Depositor
and
THE BANK OF NEW YORK
as Trustee
Receipts on Corporate Securities Trust, Series NSC 1998-1
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TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT.............................. 1
SECTION 1. Certain Defined Terms................. 1
SECTION 2. Creation and Declaration of Trust;
Grant of Term Assets; Acceptance
by Trustee............................ 5
SECTION 3. Designation........................... 5
SECTION 4. Form and Date of the Certificates..... 5
SECTION 5. Aggregate Certificate Principal
Balance............................... 6
SECTION 6. Currency of the Certificates.......... 6
SECTION 7. Certain Provisions Regarding
Transfer and Exchange................. 6
SECTION 8. Certificateholder Exchange Right...... 7
SECTION 9. Distributions......................... 8
SECTION 10. Termination of Trust.................. 10
SECTION 11. Limitation of Powers and Duties....... 10
SECTION 12. Certain Provisions of Base Trust
Agreement Not Applicable.............. 10
SECTION 13. Modification and Amendment of Base
Trust Agreement....................... 10
SECTION 14. No Investment of Amounts Received
on Term Assets........................ 11
SECTION 15. Rule 144A Information................. 11
SECTION 16. Notices............................... 11
SECTION 17. Access to Certain Documentation....... 11
SECTION 18. Ratification of Agreement............. 11
SECTION 19. Counterparts.......................... 11
SECTION 20. Governing Law......................... 11
SECTION 21. Trustee Election...................... 11
SECTION 22. Covenant of Depositor................. 12
EXHIBIT A -- Form of Amortizing Class Certificate
EXHIBIT B -- Form of Residual Class Certificate
i
SCHEDULE 1 -- Identification of Term Assets
SCHEDULE 2 -- Amortization Schedule
ii
SERIES NSC 1998-1 SUPPLEMENT dated as of April 13, 1998
(this "Series Supplement") between Prudential Securities
Structured Assets, Inc., a Delaware corporation,
as depositor (the "Depositor"), and
The Bank of New York, a New York banking
corporation, as trustee (the "Trustee").
PRELIMINARY STATEMENT
Pursuant to the Base Trust Agreement dated as of
August 28, 1997, as amended by Base Amendment No.1 dated as of
February 27, 1998 (together, the "Base Trust Agreement" and, as
amended and supplemented pursuant to this Series Supplement, the
"Agreement"), among the Depositor and the Trustee, such parties
may at any time and from time to time enter into a series
supplement supplemental to the Base Trust Agreement for the
purpose of creating a trust. Section 5.13 of the Base Trust
Agreement provides that the Depositor may at any time and from
time to time direct the Trustee to authenticate and deliver, on
behalf of any such trust, a new series of trust certificates.
Each trust certificate of such new series of trust certificates
will represent a fractional undivided beneficial interest in such
trust. Certain terms and conditions applicable to each such
series are to be set forth in the related series supplement to
the Agreement.
Pursuant to this Series Supplement, the Depositor and
the Trustee shall create and establish a new trust to be known as
Receipts on Corporate Securities Trust, Series NSC 1998-1 (the
"Trust"), and a new Series of trust certificates to be issued
thereby, which certificates shall be known as the Receipts on
Corporate Securities, Series NSC 1998-1 (the "Certificates"), and
the Depositor and the Trustee shall herein specify certain terms
and conditions in respect thereof.
The Certificates shall be issued in two Classes
consisting of (a) the Amortizing Class Certificates (the
"Amortizing Class Certificates") and (b) the Residual Class
Certificates (the "Residual Class Certificates"), subject to
Section 5.16 of the Base Trust Agreement.
On behalf of and pursuant to the authorizing
resolutions of the Board of Directors of the Depositor, an
authorized officer of the Depositor has authorized the execution,
authentication and delivery of the Certificates, and has
authorized the Base Trust Agreement and this Series Supplement in
accordance with the terms of Section 5.13 of the Base Trust
Agreement.
SECTION 1. Certain Defined Terms. (a) All terms used
in this Series Supplement that are defined in the Base Trust
Agreement, either directly or by reference therein, have the
meanings assigned to such terms therein, except to the extent
such terms are defined or modified in this Series Supplement or
the context requires otherwise. The Base Trust Agreement also
contains rules as to usage which shall be applicable hereto.
(b) Pursuant to Article I of the Base Trust Agreement,
the meaning of certain defined terms used in the Base Trust
Agreement shall, when applied to the trust certificates of a
particular Series, be as defined in Article I but with such
additional provisions and modifications as are specified in the
related series supplement. With respect to the Certificates, the
following definitions shall apply:
"Acceleration of Term Assets": The acceleration of the
maturity of the Term Assets following the occurrence of any
default (other than a Payment Default) with respect to the Term
Assets under the Indenture, and the Trustee receives notice of
such acceleration, notwithstanding any subsequent rescission and
annulment of such acceleration by the requisite holders of the
entire series of Term Assets.
"Aggregate Amortized Amount": The aggregate Amortized
Amount of all the Amortizing Class Certificates.
"Aggregate Certificate Principal Balance": For the
Residual Class Certificates as of any date of determination, the
aggregate principal balance of the Term Assets in the Trust as of
such date of determination. For
the Amortizing Class Certificates as of any date of
determination, the Aggregate Amortized Amount as of such date of
determination.
"Amortized Amount": For any Amortizing Class
Certificate of $1,000 denomination, initially $1,000. On each
Scheduled Distribution Date, the Amortized Amount will be reduced
by the positive difference between (i) the Fixed Payment made on
such Scheduled Distribution Date and (ii) interest accrued on the
Certificate Principal Balance at the Amortizing Class Yield
during the related Interest Accrual Period. On any Optional
Redemption Date relating to a Partial Optional Redemption, the
Amortized Amount shall be recalculated based on the remaining
Term Assets after such partial redemption and no effect shall be
given to the allocation to principal provided for in Section 9(d)
hereof.
"Amortizing Class Certificates": A Class of securities
issued pursuant to this Agreement representing an undivided
interest in the distributions described in Section 9 hereto
payable to such Class.
"Amortizing Class Final Distribution Date": May 15,
2017.
"Amortizing Class Yield": 6.375% per annum.
"Available Funds": As of any Distribution Date, the
aggregate amount received on or with respect to the Term Assets
on or with respect to such Distribution Date.
"Calculation Agent": The Depositor.
"Certificates": Receipts on Corporate Securities,
Series NSC 1998-1.
"Certificateholder" or "Holder": With respect to any
Amortizing Class Certificate or Residual Class Certificate, the
Holder thereof.
"Certificate Principal Balance": For any Residual
Class Certificate, a pro rata portion of the principal amount of
the then outstanding Term Assets. For any Amortizing Class
Certificate, the Amortized Amount.
"Class": The class of Certificates constituted by the
Amortizing Class Certificates or the Residual Class Certificates.
"Closing Date": April 13, 1998.
"Corporate Trust Office": The Bank of New York, 000
Xxxxxxx Xxxxxx (00X) Street, New York, N.Y. 10286, Attention:
Corporate Trust or such other corporate trust office as the
Trustee shall designate in writing to the Depositor and the
Certificateholders.
"Distribution Date": Any Scheduled Distribution Date,
In-Kind Distribution Date, Shortened Maturity Date, or Optional
Redemption Date.
"Distribution Ratio": With respect to a specified
distribution to be made hereunder on any Distribution Date (other
than a Scheduled Distribution Date), the ratio in which such
distribution will be made to the holders of the Amortizing Class
Certificates and the Residual Class Certificates, respectively,
being the same ratio as (i) the present value of all originally
scheduled future payments on the Amortizing Class Certificates
bears to (ii) the present value of all originally scheduled
future payments on the Term Assets after May 15, 2017, in each
case discounted semiannually at a rate of 7.90% per annum to the
Distribution Date (or, in the case of Section 9(f), the date
specified therein).
"Excess Interest": Penalties, interest on overdue
interest or other amounts paid to holders of the Term Assets
because of late or defaulted payments on the Term Assets.
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"Exchange Certificate": Any Certificate of a Class to
be issued pursuant to this Agreement in the Exchange Offer in
exchange for an Initial Certificate of such Class at the request
of the holder of such Initial Certificate.
"Exchange Offer": The offer registered by the
Depositor and the Trust pursuant to the Exchange Offer
Registration Statement in which the Trust offers to holders of
the Initial Certificates of a Class the opportunity to exchange
such outstanding Initial Certificates for Exchange Certificates
of the same Class in an aggregate principal amount equal to the
Aggregate Certificate Principal Balance of the Initial
Certificates tendered in such offer by such Holders.
"Exchange Offer Registration Statement": The
registration statement under the Securities Act relating to the
Exchange Offer, including the related prospectus, prepared and
signed by the Depositor on behalf of the Trust and in no event by
the Trustee.
"Fixed Payment": Each semiannual installment of
interest and Excess Interest, if any, payable on the Term Assets
through and including May 15, 2017.
"Indenture": The supplement to an indenture dated as
of January 15, 1991 between NSC and First Trust of New York,
National Association, as trustee, as amended from time to time,
pursuant to which the Term Assets were issued.
"Initial Certificate": Any Amortizing Class
Certificate or Residual Class Certificate to be originally
issued, authenticated and delivered pursuant to this Agreement on
the Closing Date.
"Interest Accrual Period": With respect to any
Scheduled Distribution Date, the period from and including the
immediately preceding Scheduled Distribution Date (or in the case
of the first Interest Accrual Period, from and including November
15, 1997) to but excluding the then current Scheduled
Distribution Date.
"Interest Collections": With respect to any
Distribution Date, all payments received by the Trustee from NSC
with respect to the Term Assets immediately prior to such
Distribution Date, in respect of (i) interest on the Term Assets
and (ii) any Excess Interest.
'NSC": Norfolk Southern Corporation, a Virginia
corporation.
"Optional Redemption": A redemption of the Term
Assets, as a whole or in part from time to time, at the option of
NSC pursuant to the Indenture, other than a Shortened Maturity
Redemption.
"Optional Redemption Date": The date on which an
Optional Redemption occurs.
"Partial Optional Redemption": An Optional Redemption
relating to only a portion of the Term Assets.
"Payment Default": A default in any payment of the
principal of, premium, if any, or interest on the Term Assets
when the same becomes due and payable, and the expiration of any
applicable grace period for the making of such payment.
"Place of Distribution": New York, New York.
"Principal Collections": All principal payments
received by the Trustee on the Term Assets, including the
principal portion of the redemption price and the premium, if
any, paid in the event of Shortened Maturity Redemption or an
Optional Redemption.
"Private Placement Legend": As defined in Section 4(c)
hereof.
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"Rating Agency": Initially none. At any time after the
Closing Date, the Depositor may designate one or more credit
rating agencies as a "Rating Agency" for purposes of this
Agreement by Depositor Order, acknowledged by the Trustee.
Thereafter, references to "the Rating Agency" in the Agreement
shall be deemed to be each such credit rating agency.
"Record Date": With respect to any Distribution Date,
the 15th day immediately preceding such Distribution Date.
"Registration Rights Agreement": A registration rights
agreement between the Depositor and Prudential Securities
Incorporated dated April 13, 1998 relating to the Exchange Offer.
"Residual Class Certificates": A Class of securities
issued pursuant to this Agreement representing an undivided
interest in the distributions described in Section 9 hereof
payable to such Class.
"Scheduled Distribution Date": The fifteenth day of
each May and November, or, if any such day is not a Business Day
and a Term Assets Scheduled Payment Date, then the Business Day
on or immediately following the Term Assets Scheduled Payment
Date, commencing May 15, 1998, through and including May 15,
2017; provided, however, that payment on each Scheduled
Distribution Date shall be subject to receipt of the
corresponding payment of interest or principal, as applicable, on
the Term Assets.
"Scheduled Final Distribution Date": May 15, 2017.
"Shortened Maturity Date": A maturity date for the
Term Assets on or before May 15, 2017, designated by NSC, as a
result of a Tax Event.
"Shortened Maturity Redemption": A redemption of the
Certificates in whole, but not in part, as a result of the
Shortened Maturity Date occurring on or prior to May 15, 2017.
"Specified Currency": United States Dollars.
"Tax Event": Means that NSC shall have received an
opinion of nationally recognized independent tax counsel to the
effect that, as a result of (a) any amendment to, clarification
of, or change (including any announced prospective amendment,
clarification or change) in any law, or any regulation
thereunder, of the United States, (b) any judicial decision,
official administrative pronouncement, ruling, regulatory
procedure or regulation, including any notice or announcement of
intent to adopt or promulgate any ruling, regulatory procedure or
regulation (any of the foregoing, an "Administrative or Judicial
Action"), or (c) any amendment to, clarification of or change in
any official position with respect to, or any interpretation of,
an Administrative or Judicial Action or a law or regulation of
the United States that differs from the theretofore generally
accepted position or interpretation, in each case, occurring on
or after May 19, 1997, there is more than an insubstantial
increase in the risk that interest paid by NSC on the Term Assets
is not, or will not be, deductible, in whole or in part, by NSC
for United States federal income tax purposes.
"Term Assets": The $80,000,000 aggregate principal
amount of 7.90% Notes due May 15, 2097 issued by NSC, deposited
in the Trust by the Depositor and further identified on Schedule
1 hereto.
"Term Assets Scheduled Payment Date": The fifteenth
day of each May and November, commencing on May 15, 1998;
provided, however, that if any Term Assets Scheduled Payment Date
would otherwise fall on a day that is not a Business Day (as
defined in the Indenture), such Term Assets Scheduled Payment
Date will be the next following day that is a Business Day (as so
defined).
"Term Assets Prospectus": The prospectus of NSC, dated
May 14, 1997, as supplemented by a supplement thereto dated May
14, 1997, with respect to the Term Assets.
"Term Assets Trustee": The trustee under the
Indenture.
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"Trust": Receipts on Corporate Securities Trust,
Series NSC 1998-1.
"Trustee": The Bank of New York, a New York banking
corporation.
"Trust Termination Event": (a) the distribution in
kind of the Term Assets to the Residual Class Certificateholders
on May 15, 2017 (subject to Section 9(b) hereof), (b) the payment
in full of the Certificates following a Shortened Maturity
Redemption, (c) an In-Kind Distribution, (d) the payment in full
of the Certificates following an Optional Redemption, other than
a Partial Optional Redemption, or (e) the exchange of
Certificates for the last remaining Term Assets pursuant to
Section 8.
"Voting Rights": Voting Rights will be allocated
between the Amortizing Class Certificateholders, on the one hand,
and the Residual Class Certificateholders, on the other, at any
date of determination in the same ratio as (i) the present value
of all originally scheduled future payments on the Amortizing
Class Certificates bears to (ii) the present value of all
originally scheduled future payments on the Term Assets after May
15, 2017, in each case discounted semiannually at a rate of 7.90%
per annum to the date of determination. Such ratio will be
calculated by the Calculation Agent. Subject to the foregoing,
"Voting Rights" shall mean (a) with respect to the Amortizing
Class Certificates, the voting rights allotted to such Class,
allocated among all Holders of Amortizing Class Certificates in
proportion to the respective Amortized Amount held by such
Holders on any date of determination, and (b) with respect to the
Residual Class Certificates, the voting rights allotted to such
Class, allocated among all Holders of Residual Class Certificates
in proportion to the respective Certificate Principal Balances
held by such Holders on any date of determination.
SECTION 2. Creation and Declaration of Trust; Grant of
Term Assets; Acceptance by Trustee. (a) The Depositor,
concurrently with the execution and delivery hereof and pursuant
to Section 2.1 of the Agreement, has delivered or caused to be
delivered to the Trustee the Term Assets in exchange for the
delivery to, or at the direction of the Depositor, of all of the
Certificates, representing the entire beneficial interest in all
of the assets of the Trust.
(b) The Trustee hereby (i) acknowledges such deposit,
pursuant to subsection (a) above, and receipt by it of the Term
Assets, (ii) accepts the trusts created hereunder in accordance
with the provisions hereof and of the Agreement but subject to
the Trustee's obligation, as and when the same may arise, to make
any payment or other distribution of the assets of the Trust as
may be required pursuant to this Series Supplement, the Agreement
and the Certificates, and (iii) agrees to perform the duties
herein or therein required and any failure to receive
reimbursement of expenses and disbursements under Section 7.5 of
the Agreement shall not release the Trustee from its duties
herein or therein.
SECTION 3. Designation. There is hereby created a
Series of trust certificates to be issued pursuant to the
Agreement and this Series Supplement to be known as the "Receipts
on Corporate Securities, Series NSC 1998-1." The Certificates
shall be issued in two Classes, consisting of the Amortizing
Class Certificates and the Residual Class Certificates.
SECTION 4. Form and Date of the Certificates. (a) The
Certificates that are executed, authenticated and delivered by
the Trustee to the Depositor upon Depositor Order on the Closing
Date shall be dated the Closing Date. All other Certificates that
are authenticated after the Closing Date for any other purpose
under the Agreement shall be dated the date of their
authentication. The Certificates and the certificate of
authentication of the Trustee thereon shall be substantially in
the form of Exhibit A or Exhibit B hereto, as specified below,
which are hereby incorporated in and expressly made a part of
this Agreement. The Exchange Certificates and the certificate of
authentication of the Trustee thereon shall be substantially in
the same form with those changes as are noted in Exhibits A and
B.
(b) The Amortizing Class Certificates will be
represented by one or more permanent Certificates in definitive,
fully registered form in minimum denominations of $250,000 in
Certificate Principal Balance and integral multiples of $1.00 in
excess thereof. The Residual Class Certificates will be
represented by one or more
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permanent Certificates in definitive, fully registered form in
minimum denominations of $500,000 in Certificate Principal
Balance and integral multiples of $1.00 in excess thereof.
(c) In the event Initial Certificates are tendered in
an Exchange Offer, such Initial Certificates shall be exchanged
for one or more Exchange Certificates of the same Class in
definitive, fully registered form in the same denominations set
forth in Section 4(b).
(d) The Certificates shall bear the following legends.
Each Initial Residual Certificate and each Amortizing
Class Certificate shall bear the following legend (the "Private
Placement Legend") on the face thereof:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THESE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER JURISDICTION.
Each Certificate shall bear the following legend;
provided that the following legend may be removed from Exchange
Certificates of a Class upon such time, if any, as the Depositor
has furnished a Depositor Order pursuant to Section 7(c) hereof:
THE TRUST HAS NOT BEEN REGISTERED AS AN INVESTMENT
COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED. ANY
TRANSFER OF THIS CERTIFICATE MAY ONLY BE MADE IN ACCORDANCE WITH
RULE 3a-7 OF SUCH ACT.
SECTION 5. Aggregate Certificate Principal Balance.
The maximum Aggregate Certificate Principal Balance of the
Amortizing Class Certificates that may be executed, authenticated
and delivered under the Agreement and this Series Supplement is
$69,977,735. The maximum Aggregate Certificate Principal Balance
of the Residual Class Certificates that may be authenticated and
delivered under the Agreement and this Series Supplement is
$80,000,000. In each case such maximum amounts shall be
calculated without regard to Certificates authenticated and
delivered upon registration of transfer of, or in exchange for,
or in lieu of, other Certificates pursuant to Sections 5.3, 5.4,
5.5 or 5.16 of the Agreement. The Certificates are issuable in
the minimum denominations specified in Section 4.
SECTION 6. Currency of the Certificates. All
distributions on the Certificates will be made in the Specified
Currency.
SECTION 7. Certain Provisions Regarding Transfer and
Exchange. (a) In the event that the Depositor delivers to the
Trustee a copy of an Officers' Certificate certifying that an
Exchange Offer Registration Statement has been declared effective
by the Commission and that the Trust has offered Exchange
Certificates of a Class to the Holders of the related Class of
Initial Certificates in accordance with the Exchange Offer, the
Trustee shall exchange, upon request of any such Holder, such
Holder's Initial Certificates for Exchange Certificates of the
related Class upon the terms set forth in the Exchange Offer and
in accordance with Section 4(c) hereof, provided that the Initial
Certificates so surrendered for exchange are duly endorsed and
accompanied by a letter of transmittal or written instrument of
transfer in form satisfactory to the Trustee, in addition to any
certifications and representations required by the provisions of
the Registration Rights Agreement, and duly executed by the
Holder thereof or such Holder's attorney who shall be duly
authorized in writing to execute such document on the behalf of
such Holder.
The Trustee shall not be required (i) to issue,
register the transfer of or exchange any Certificate during the
period of 15 days ending on (and including) any Distribution
Date.
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(b) Upon receipt of a Depositor Request to the effect
that specified Initial Certificates of a Class (the "Registered
Certificates") have been registered under the Securities Act, if
Initial Certificates of such Class are issued upon the transfer,
exchange or replacement of the Registered Certificates, or if a
request is made to remove such Private Placement Legend on the
Registered Certificates, the Trustee shall execute, authenticate
and deliver Initial Certificates of such Class that do not bear
the Private Placement Legend.
(c) In connection with each transfer of a Certificate,
the transferee will be required to complete the certification
annexed to such Certificate unless the Depositor has furnished a
Depositor Order to the effect that such transfer form is no
longer required to assure compliance with Rule 3a-7.
(d) In connection with each transfer of a Residual
Class Certificate, the transferee will be required to deliver to
the Trustee a certification upon purchase of such Certificate to
the effect that the beneficial owner thereof (whether such
registered holder or the ultimate beneficiary for whom it holds
such Certificate) is either (i) a United States person, or (ii) a
non-United States person who is exempt from withholding under
U.S. federal income tax laws and has completed, accurately and in
a manner reasonably satisfactory to the Trustee or its agent, an
appropriate statement (generally on IRS Form W-8), signed under
penalties of perjury, identifying the beneficial owner and
stating that the beneficial owner is not a United States person
(or, after December 31, 1999, has satisfied applicable
documentary evidence requirements for establishing that it is not
a United States person) and delivered such statement (or
documentary evidence) to the Trustee or its agent.
Such transferee will be deemed to have represented and
agreed with the Trustee that so long as it is the registered
holder of such Certificate, the beneficial owner thereof will be
a person described in clauses (i) or (ii) above and, in the event
of any change in the identity of the beneficial owner for whom
such registered holder is acting or any lapse of a Form W-8 (or
documentary evidence) previously delivered to the Trustee, the
registered holder will promptly deliver a new certification or a
current Form W-8 (or documentary evidence), as applicable. In the
event such representation is untrue or such current forms (or
documentary evidence) are not so furnished, the Certificate held
by such registered holder will be subject to mandatory resale as
described below.
If a Responsible Officer has actual knowledge or
reason to know that the certification or deemed representation
made by such registered holder is incorrect or if such registered
holder does not provide the current Form W-8 (or documentary
evidence) as described above within ten days after the prior such
Form (or documentary evidence) has lapsed, then, the Trustee will
furnish a notice to such registered holder stating that (i) such
registered holder must, within 30 calendar days from the date of
such notice, effect the registration of transfer of its Residual
Class Certificate to a person that certifies that the beneficial
owner of the Certificate is a U.S. person or exempt from U.S.
withholding tax as described above and (ii) if such transfer does
not occur by the thirtieth day, the Holder will be deemed
irrevocably to have appointed Prudential Securities Incorporated
or Prudential-Bache Securities (U.K.) Inc. (either a "Broker") as
its broker to sell such Holder's Certificate on its behalf to a
qualified purchaser at a fair market price (net of customary
brokerage commissions) within the next succeeding five Business
Days. For purposes of effectuating such sale pursuant to clause
(ii) of the preceding sentence, the Trustee is hereby irrevocably
appointed the agent and attorney-in-fact of the Holder to, and
shall, (a) instruct the broker to effect the foregoing sale, (b)
receive from the broker the net proceeds from such sale for the
account of the Holder and (c) deliver to or upon the order of the
broker a new Certificate issued in exchange for the Certificate
of the Holder sold by the broker (whereupon the Holder's
Certificate will be deemed to have been surrendered and canceled
and cease to be outstanding for any purpose hereunder or entitled
to any rights or benefits hereunder). The Trustee shall pay to
the Holder, within five Business Days of receipt thereof from the
broker, the net proceeds of such sale, such payment to be made in
the same manner as such Holder received its most recent payment
on the Certificate. Each Holder, by its acceptance of a
Certificate, hereby consents to and agrees with the provisions of
this Section 7.
SECTION 8. Certificateholder Exchange Right. Any
Holder of both Amortizing Class Certificates and Residual Class
Certificates may, by delivery of a notice to the Trustee
substantially in the form of the Notice of Exchange attached to a
Certificate (a "Notice of Exchange") not less than 30 and not
more than 45 days prior to any Scheduled Distribution Date other
than May 15, 2017, elect to exchange Certificates of both Classes
for Term Assets on such Scheduled Distribution Date (the
"Exchange Date") in accordance with this Section. In order to
exercise such right, the holder shall tender to the Trustee on
the Exchange Date immediately
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succeeding such notice both (a) Amortizing Class Certificates
evidencing the percentage specified in the Notice of Exchange
(which shall not be less than 10%) of the Aggregate Certificate
Principal Balance of all Amortizing Class Certificates then
outstanding and (b) Residual Class Certificates evidencing the
same percentage of the Aggregate Certificate Principal Balance of
all Residual Class Certificates then outstanding as is
represented by the Amortizing Class Certificates tendered
pursuant to clause (a).
Upon tender of such Certificates, duly endorsed by the
Holder to the Trustee, the Trustee shall transfer to the Holder
(or its designee specified in the Notice of Exchange) a principal
amount of Term Assets comprising the same percentage of the Term
Assets then held in the Trust as the percentage of Amortizing
Class Certificates and Residual Class Certificates tendered by
such Holder on such Scheduled Distribution Date, rounded down to
the nearest authorized denomination of Term Assets. Upon such
exchange, the Trustee shall cancel the tendered Certificates,
provided that if the amount of Term Assets delivered to the
Holder or its designee was rounded down in accordance with the
preceding sentence, the Trustee shall issue to such Holder new
Certificates of each Class evidencing percentage interests of
such Class (regardless of whether such interests would otherwise
be authorized denominations) equal to the amount of such Class in
excess of the amount accepted for such exchange.
The delivery of a Notice of Exchange pursuant to this
Section shall be irrevocable; provided, however, that if (i) the
proceeds of an Optional Redemption, Shortened Maturity Redemption
or In-Kind Distribution are to be distributed on the Exchange
Date to which such Notice of Exchange relates or (ii) if prior to
such Exchange Date, the Trustee gives notice to Holders that the
proceeds of an Optional Redemption, Shortened Maturity Redemption
or In-Kind Distribution are scheduled to be distributed on a date
subsequent to such Exchange Date, such Notice of Exchange shall
be automatically deemed canceled and be of no further force and
effect.
Any Holder tendering Certificates in exchange for Term
Assets on an Exchange Date pursuant to this Section shall be
entitled to receive cash distributions otherwise payable on such
Certificates on such Exchange Date pursuant to Section 9(a).
SECTION 9. Distributions. (a) Not later than each
Scheduled Distribution Date, the Trustee shall distribute to the
Holders of the Amortizing Class Certificates, to the extent of
Interest Collections constituting Available Funds, an amount
equal to the Fixed Payment plus any Excess Interest. Each Fixed
Payment shall be allocated first to interest accrued during the
related Interest Accrual Period at a rate equal to the Amortizing
Class Yield on the then outstanding Aggregate Certificate
Principal Balance of the Amortizing Class Certificates, with the
balance of such Fixed Payment allocated to the repayment of
principal in accordance with the amortization schedule attached
hereto as Schedule 2 (the "Amortization Schedule"). Any Excess
Interest shall be allocated as additional interest and shall not
be taken into account in the allocation of the Fixed Payment. In
the event of a Partial Optional Redemption or an exchange of
Certificates for Term Assets pursuant to Section 8, the Fixed
Payment to the holders of the Amortizing Class Certificates will
be reduced, effective on the next Scheduled Distribution Date,
pro rata with the reduction of the Term Assets, and the Trustee
shall thereafter adjust the Amortization Schedule on the basis of
the new Aggregate Certificate Principal Balances following the
Optional Redemption Date.
In the event that any Interest Collections are
received by the Trustee after a Scheduled Distribution Date and
prior to the final distribution with respect to the Amortizing
Class Certificate, the Trustee will distribute such Interest
Collections to the holders of the Amortizing Class Certificates
as soon as practicable after receipt.
(b) On May 15, 2017, the Trustee shall distribute the
remaining Term Assets in kind to the Residual Class
Certificateholders; provided that if payment to the Amortizing
Class Certificateholders with respect to the Term Assets due on
May 15, 2017 is not made by NSC on such date, the Term Assets
will not be distributed to the holders of the Residual Class
Certificates until such payment is made by NSC or the Trustee
makes an In-Kind Distribution to Certificateholders in accordance
with this Agreement.
(c) In the event of an Optional Redemption on or prior
to May 15, 2017, the Certificates will be redeemed on the
Optional Redemption Date. Such redemption shall be a redemption
of the Certificates as a whole if the Optional Redemption is
redemption of the Term Assets as a whole, and shall be a
redemption of the
8
Certificates in part, as described in the next subsection, if the
Optional Redemption is a Partial Optional Redemption. In such
event, the Trustee will distribute the aggregate redemption price
received on the Term Assets on the Optional Redemption Date to
the holders of the Amortizing Class Certificates and the Residual
Class Certificates, respectively, on the basis of the
Distribution Ratio. Such ratio will be calculated by the
Calculation Agent.
(d) In the event of a Partial Optional Redemption, the
distribution of the portion of the redemption price allocable to
a particular Class of Certificates pursuant to the preceding
subsection shall be made on a pro rata basis among all
Certificateholders of such Class. Amounts so allocated to the
Amortizing Class Certificates shall be allocated first to
interest accrued since the start of the most recent Interest
Accrual Period at a rate equal to the Amortizing Class Yield on
the then outstanding Certificate Principal Balance of the
Amortizing Class Certificates, with the balance of such
distribution allocated to the repayment of principal. At the
close of business on the applicable Optional Redemption Date, the
respective Certificate Principal Balances of the Certificates
shall be reduced in accordance with definition of the term
"Certificate Principal Balance."
(e) In the event of a Shortened Maturity Redemption on
or prior to May 15, 2017, the Certificates shall be redeemed as a
whole on the Shortened Maturity Date. In such event, the Trustee
will distribute the aggregate redemption price received on the
Term Assets on the Shortened Maturity Date to the holders of the
Amortizing Class Certificates and the Residual Class
Certificates, respectively, on the basis of the Distribution
Ratio. Such ratio will be calculated by the Calculation Agent.
(f) Upon a Payment Default or an Acceleration of the
Term Assets under the Indenture on or before May 15, 2017, the
Trustee will make an In-Kind Distribution of the remaining Term
Assets, pursuant to Section 3.6 of the Agreement, to the holders
of the Amortizing Class Certificates and the Residual Class
Certificates. The Trustee will distribute the Term Assets and any
proceeds from liquidation thereof made pursuant to Section 3.6(b)
to the holders of the Amortizing Class Certificates and Residual
Class Certificates, respectively, on the basis of the
Distribution Ratio as of the date of such Payment Default or
Acceleration. Such ratio will be calculated by the Calculation
Agent.
(g) Distributions of any Purchase Price pursuant to
Section 2.5 of the Agreement shall be distributed in the same
ratio set forth in subsection (c) above discounted to the date on
which the Purchase Price is distributed. Such distribution shall
be made fifteen days after receipt of the Purchase Price.
(h) Distributions to the Certificateholders on each
Distribution Date will be made to the Certificateholders of
record on the related Record Date of the Amortizing Class
Certificates and Residual Class Certificates, as applicable.
(i) All distributions to Certificateholders of any
Class shall be allocated pro rata among the Certificates of such
Class, based on the respective Certificate Principal Balances as
of the Record Date with respect to such Distribution Date.
(j) Notwithstanding any provision of the Agreement to
the contrary, to the extent funds are available, the Trustee will
initiate payment in immediately available funds by 10:00 A.M.
(New York City time) on each Distribution Date of all amounts
payable to each Certificateholder with respect to any Certificate
held by such Certificateholder or its nominee (without the
necessity for any presentation or surrender thereof or any
notation of such payment thereon) in the manner and at the
address as each Certificateholder may from time to time direct
the Trustee in writing fifteen days prior to such Distribution
Date requesting that such payment will be so made and designating
the bank account to which such payments shall be so made. The
Trustee shall be entitled to rely on the last instruction
delivered by the Certificateholder pursuant to this Section 9(j)
unless a new instruction is delivered 15 days prior to a
Distribution Date.
(k) The rights of the Certificateholders to receive
distributions in respect of the Certificates, and all interests
of the Certificateholders in such distributions, shall be as set
forth in this Series Supplement. The Trustee shall in no way be
responsible or liable to the Certificateholders nor shall any
Certificateholder in any way
9
be responsible or liable to any other Certificateholder in
respect of amounts previously distributed on the Certificates
based on their respective Certificate Principal Balances.
(l) The Trustee shall furnish notice to
Certificateholders as soon as practicable after a Responsible
Officer learns of a situation giving rise to a distribution under
subsections (c), (d) or (e) hereof.
SECTION 10. Termination of Trust. (a) The Trust shall
terminate upon the occurrence of any Trust Termination Event and
the distribution to Certificateholders of all amounts or property
required to be distributed to them and the disposition of all
Term Assets held by the Trustee.
(b) Promptly after the Trustee has received a notice
from the Term Assets Trustee or NSC of an Optional Redemption
other than a Partial Optional Redemption, a Shortened Maturity
Redemption, a Payment Default or an Acceleration of the Term
Assets, the Trustee shall provide notice to the
Certificateholders of the expected occurrence of a Trust
Termination Event and the termination of the Trust.
(c) The obligations of the Trustee will thereupon
terminate, except for the making of final distributions to
Certificateholders and the furnishing of any reports and other
information required to be provided to Certificateholders
hereunder and under the Agreement and except as otherwise
specified herein and therein.
SECTION 11. Limitation of Powers and Duties. (a) The
Trustee shall administer the Trust and the Term Assets solely as
specified herein and in the Agreement.
(b) The Trust is constituted solely for the purpose of
acquiring and holding the Term Assets. The Trustee is not
authorized to acquire any other investments or engage in any
activities not authorized herein and, in particular,
notwithstanding anything to the contrary in the Agreement, the
Trustee is not authorized (i) to sell, assign, transfer,
exchange, pledge, set-off or otherwise dispose of any of the Term
Assets, once acquired, or interests therein, including to
Certificateholders except as expressly provided as Section 3.6 of
the Base Trust Agreement or (ii) to do anything that would
materially increase the likelihood that the Trust will fail to
qualify as a grantor trust for United States federal income tax
purposes.
SECTION 12. Certain Provisions of Base Trust Agreement
Not Applicable. The provisions of Sections 2.2(b), 2.3 (except
insofar as incorporated in Section 2.5), 5.16, 6.4 and 8.1(a)(i)
of the Base Trust Agreement shall be inapplicable with respect to
the Certificates.
SECTION 13. Modification and Amendment of Base Trust
Agreement. (a) In addition to, and notwithstanding anything to
the contrary in, the Base Trust Agreement or this Series
Supplement, the Trustee, upon receipt of a Depositor Order, shall
amend this Series Supplement to provide for the issuance of the
Initial Certificates of a Class or Exchange Certificates of a
Class in the form of a Global Security issued to a Depositary
specified by the Depositor. Such amendment shall not require the
consent of any Certificateholders or compliance with any other
conditions contained in Section 9.1 of the Base Trust Agreement.
(b) The penultimate sentence of Section 3.1(b) of the
Base Trust Agreement is amended for purposes of this Series
Supplement and the Certificates as follows: (1) by substituting a
comma for the word "or" at the end of clause (i), and (2) by
inserting after the words "Term Asset" and immediately preceding
the word "except" the following:
"(iii) which would alter the currency in which any payment is
required to be made on the Term Assets, (iv) which would change
the voting rights granted to holders of the Term Assets under the
Indenture, or (v) which would impair in any material respect any
rights of the Trustee or holders of the Term Assets to enforce
remedies against NSC under the Indenture,"
(c) Section 9.1(a) of the Base Trust Agreement is
amended for purposes of this Series Supplement and the
Certificates by deleting from clause (x) thereof the phrase ",
but not (vi),".
10
(d) Clause (ii) of the proviso to the first sentence
of Section 9.1(b) of the Base Trust Agreement is amended by
deleting the existing text after the word "without" and inserting
the following in its place: "the unanimous consent of the Holders
of Certificates of such Series or Class".
SECTION 14. No Investment of Amounts Received on Term
Assets. All amounts received on or with respect to the Term
Assets shall be held uninvested by the Trustee without liability
for interest thereon.
SECTION 15. Rule 144A Information. If the Depositor
with respect to the Trust is not subject to Section 13 or 15(d)
of the Exchange Act with respect to such Certificate, then
Trustee will furnish, upon request, to holders and prospective
purchasers of Initial Certificates information, which upon
request by the Trustee shall be assembled and delivered to the
Trustee by the Depositor, satisfying the requirement of
subsection (d)(4)(i) of Rule 144A.
SECTION 16. Notices. (a) All directions, demands and
notices hereunder and under the Agreement shall be in writing and
shall be deemed to have been duly given when received if
personally delivered or mailed by first class mail, postage
prepaid or by express delivery service or by certified mail,
return receipt requested or delivered in any other manner
specified herein, (i) in the case of the Depositor, to Prudential
Securities Structured Assets, Inc., Xxx Xxx Xxxx Xxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Xxxxx Xxxxxx, or
such other address as may hereafter be furnished to the Trustee
in writing by the Depositor, and (ii) in the case of the Trustee,
to The Bank of New York, 000 Xxxxxxx Xxxxxx (00X), Xxx Xxxx, Xxx
Xxxx 00000, Attention: Corporate Trust, or such other address as
may hereafter be furnished to the Depositor in writing by the
Trustee.
(b) For purposes of delivering notices to the Rating
Agency, notices shall be sent to the address specified by the
Depositor's designation.
SECTION 17. Access to Certain Documentation. Access to
documentation regarding the Term Assets will be afforded without
charge to any Certificateholder so requesting pursuant to Section
3.9 of the Agreement. Additionally, the Trustee shall provide at
the request of any Certificateholder without charge to such
Certificateholder the name and address of each Certificateholder
of Certificates hereunder as recorded in the Certificate Register
for purposes of contacting the other Certificateholders with
respect to their rights hereunder or for the purposes of
effecting purchases or sales of the Certificates, subject to the
transfer restrictions set forth herein.
SECTION 18. Ratification of Agreement. With respect to
the Series issued hereby, the Base Trust Agreement, as
supplemented by this Series Supplement, is in all respects
ratified and confirmed and the Base Trust Agreement as so
supplemented by this Series Supplement shall be read, taken and
construed as one and the same instrument. To the extent there is
any inconsistency between the terms of the Base Trust Agreement
and this Series Supplement, the terms of this Series Supplement
shall govern.
SECTION 19. Counterparts. This Series Supplement may
be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, but all of such
counterparts shall together constitute but one and the same
instrument.
SECTION 20. Governing Law. This Series Supplement and
each Certificate issued hereunder shall be construed in
accordance with and governed by the law of the State of New York
without regard to principles of conflicts of law.
SECTION 21. Trustee Election. In mutual consideration
for each Certificateholder's purchase of a Certificate, each
Certificateholder acknowledges that it intends that the Trust be
excluded from the application of the rules of subchapter K of the
Code in the event that the Internal Revenue Service successfully
recharacterizes the Trust as a partnership for federal income tax
purposes, and will be deemed to have consented to the making of a
protective election pursuant to Treasury Regulation Section
1.761-2 as of the date hereof.
11
SECTION 22. Covenant of Depositor. The Depositor
hereby covenants that it will be adequately capitalized at all
times. The Depositor hereby further covenants that it will not
purchase or otherwise acquire any Certificates in the open market
or otherwise at any time.
* * * * *
12
IN WITNESS WHEREOF, the Depositor and the Trustee have
caused this Series Supplement to be duly executed by their
respective officers thereunto duly authorized as of the day and
year first above written.
PRUDENTIAL SECURITIES STRUCTURED ASSETS,
INC., as Depositor
By /s/ C. Xxxxxxxxxxx Xxxxx
-------------------------------------
Authorized Signatory
THE BANK OF NEW YORK,
a New York banking corporation,
as Trustee
By /s/ Xxxxxxxx Xxxxxxx
-------------------------------------
Authorized Signatory
13
Exhibit A
[Form of Amortizing Class Certificate]
NUMBER Certificate Principal Balance $__________
R-___ Aggregate Certificate Principal
Balance $69,977,735
CUSIP NO. 000000XX0
SEE REVERSE FOR CERTAIN DEFINITIONS
THE HOLDER OF THIS CERTIFICATE SHALL HAVE NO RIGHT TO
PRINCIPAL PAYMENTS IN RESPECT OF THE TERM ASSETS EXCEPT IN THE
EVENT OF AN OPTIONAL REDEMPTION OR A SHORTENED MATURITY
REDEMPTION (AS SUCH TERMS ARE DEFINED IN THE TRUST AGREEMENT
REFERRED TO HEREIN) ON OR PRIOR TO MAY 15, 2017. THE REGISTERED
HOLDER HEREOF, BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL LOOK
SOLELY TO THE TRUST PROPERTY (TO THE EXTENT OF ITS RIGHTS
THEREIN) FOR DISTRIBUTIONS HEREUNDER.
THIS CERTIFICATE REPRESENTS A FRACTIONAL UNDIVIDED
INTEREST IN THE TRUST AND DOES NOT EVIDENCE AN OBLIGATION OF, OR
AN INTEREST IN, AND IS NOT GUARANTEED BY THE DEPOSITOR OR THE
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE TRUST ASSETS ARE INSURED OR GUARANTEED BY ANY
GOVERNMENTAL AGENCY OR ANY OTHER PERSON.
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THESE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER JURISDICTION.
THE TRUST HAS NOT BEEN REGISTERED AS AN INVESTMENT
COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED. ANY
TRANSFER OF THIS CERTIFICATE MAY ONLY BE MADE IN ACCORDANCE WITH
RULE 3a-7 OF SUCH ACT.
A-1
RECEIPTS ON CORPORATE SECURITIES TRUST, SERIES NSC 1998-1
RECEIPTS ON CORPORATE SECURITIES
SERIES NSC 1998-1
Amortizing Class Certificates evidencing a fractional
undivided beneficial ownership interest in the Trust, as defined
below, the property of which consists of $80,000,000 aggregate
principal amount of 7.90% Notes due May 15, 2097 (the "Term
Assets") issued by Norfolk Southern Corporation, a Virginia
corporation ("NSC"), and deposited in the Trust by the Depositor,
as defined below. The Term Assets were purchased by the Trust
from Prudential Securities Structured Assets, Inc. (the
"Depositor") in exchange for the transfer of the Certificates to
the Depositor by the Trust.
THIS CERTIFIES THAT [ ] is the registered owner of
a nonassessable, fully-paid, fractional undivided interest in
Receipts on Corporate Securities Trust, Series NSC 1998-1 formed
by the Depositor. Under the Trust Agreement, except upon or after
the occurrence of an Optional Redemption, a Shortened Maturity
Redemption or an In-Kind Distribution, there will be distributed
to the Holders of the Amortizing Class Certificates an amount
equal to the Fixed Payment plus any Excess Interest on the
fifteenth day of each May and November, or, if any such day is
not a Business Day and a Term Assets Scheduled Payment Date, then
the Business Day on or immediately following the Term Assets
Scheduled Payment Date, commencing May 15, 1998 through and
including May 15, 2017; provided that payment on each Scheduled
Distribution Date shall be subject to receipt of the
corresponding payment of interest or principal, as applicable, on
the Term Assets. Each Fixed Payment shall be allocated first to
interest accrued during the related Interest Accrual Period at a
rate equal to the Amortizing Class Yield on the then outstanding
Aggregate Certificate Principal Balance of the Amortizing Class
Certificates, with the balance of such Fixed Payment allocated to
the repayment of principal in accordance with the amortization
schedule attached to the Series Supplement as Schedule 2 (the
"Amortization Schedule"). Any Excess Interest shall be allocated
as additional interest and shall not be taken into account in the
allocation of the Fixed Payment. In the event of a Partial
Optional Redemption or an exchange of Certificates for Term
Assets pursuant to Section 8 of the Series Supplement referred to
below, the Fixed Payment to the holders of the Amortizing Class
Certificates and the Certificate Principal Balance of this
Certificate will be reduced in accordance with the Trust
Agreement. In the event of an Optional Redemption or a Shortened
Maturity Redemption, the Trustee will distribute the payments
received on the Term Assets on the Optional Redemption Date or
the Shortened Maturity Date, as applicable, to the holders of the
Amortizing Class Certificates and holders of the Residual Class
Certificates, respectively, in the same ratio as (i) the present
value of all originally scheduled future payments on the
Amortizing Class Certificates bears to (ii) the present value of
all originally scheduled future payments on the Term Assets after
May 15, 2017, discounted semiannually in each case at a rate of
7.90% per annum (such ratio being the "Distribution Ratio") to
the Optional Redemption Date or Shortened Maturity Date, as
applicable. Such amounts will be calculated by the Calculation
Agent. In the event of an In-Kind Distribution pursuant to
Section 3.6 of the Base Trust Agreement, the Trustee shall make
such In-Kind Distribution to the Holders of the Amortizing Class
Certificates and the Holders of the Residual Class Certificates,
respectively, on the basis of the Distribution Ratio to the date
on which the Payment Default or Acceleration of the Term Assets
occurred. Such ratio shall be calculated by the Calculation
Agent.
The Trust was created pursuant to a Base Trust
Agreement dated as of August 28, 1997, as amended by Base
Amendment No. 1 dated as of February 27, 1988 (together, the
"Base Trust Agreement"), between the Depositor and The Bank of
New York, a New York banking corporation, not in its individual
capacity but solely as Trustee (the "Trustee"), as supplemented
by the Series NSC 1998-1 Supplement dated as of April 13, 1998
(the "Series Supplement" and, together with the Base Trust
Agreement, the "Trust Agreement"), between the Depositor and the
Trustee. This Certificate does not purport to summarize the Trust
Agreement and reference is hereby made to the Trust Agreement for
information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby and the rights,
duties and obligations of the Trustee with respect hereto. A
A-2
copy of the Trust Agreement may be obtained from the Trustee by
written request sent to the Corporate Trust Office. Capitalized
terms used but not defined herein have the meanings assigned to
them in the Trust Agreement.
This Certificate is one of the duly authorized
Certificates designated as "Receipts on Corporate Securities,
Series NSC 1998-1, Amortizing Class Certificates" (herein called
the "Amortizing Class Certificates"). The Trust is also issuing
certificates designated as "Receipts on Corporate Securities,
Series NSC 1998-1, Residual Class Certificates" (hereinafter
called the "Residual Class Certificates" and together with the
Amortizing Class Certificates, the "Certificates") pursuant to
the Trust Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Trust
Agreement, to which Trust Agreement the Holder of this
Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound. The property of the Trust consists of
the Term Assets and all payments on or collections in respect of
the Term Assets accrued on or after the Closing Date, all as more
fully specified in the Trust Agreement.
Subject to the terms and conditions of the Trust
Agreement (including the availability of funds for distribution)
and until the obligation created by the Trust Agreement shall
have terminated in accordance therewith, distributions will be
made on each Distribution Date to the Person in whose name this
Certificate is registered on the applicable Record Date. The
Record Date applicable to any Distribution Date is the 15th day
immediately preceding such Distribution Date.
Distributions made on this Certificate will be made as
provided in the Trust Agreement by the Trustee by wire transfer
or credit to the appropriate account of the Holder in immediately
available funds, without the presentation or surrender of this
Certificate or the making of any notation hereon. Except as
otherwise provided in the Trust Agreement and notwithstanding the
above, the final distribution on this Certificate will be made
after due notice by the Trustee of the tendency of such
distribution and only upon presentation and surrender of this
Certificate at the office or agency maintained for that purpose
by the Trustee in the Borough of Manhattan, the City of New York.
Reference is hereby made to the further provisions of
this Certificate set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
Unless the certificate of authentication hereon has
been executed by or on behalf of the Trustee, by manual
signature, this Certificate shall not entitle the holder hereof
to any benefit under the Trust Agreement or be valid for any
purpose.
It is the intent of the Depositor and the
Certificateholders that, for purposes of federal income, state
and local income and franchise taxes and any other taxes imposed
upon, measured by or based upon gross or net income, the Trust
shall be treated as a grantor trust or, failing that, as a
partnership that is not treated as an association (or publicly
traded partnership) taxable as a corporation, and the Trust
Agreement shall be interpreted accordingly. Except as otherwise
required by appropriate taxing authorities, the Depositor and the
other Certificateholders by acceptance of a Certificate, agree to
treat, the Certificates for such tax purposes as interests in
such grantor trust. It is also the intent of the Depositor and
the Certificateholders that the Trust be excluded from the
application of the rules of subchapter K of the Code in the event
that the Internal Revenue Service successfully recharacterizes
the Trust as a partnership for federal income tax purposes, and
that a protective election pursuant to Treasury Regulation
Section 1.761-2 be made as of the date of formation of the Trust.
A-3
THIS CERTIFICATE SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO ITS CONFLICT-OF-LAW PROVISIONS.
IN WITNESS WHEREOF, the Trustee has caused this
Certificate to be duly executed as of the date set forth below.
THE BANK OF NEW YORK,
a New York banking corporation
By:_____________________________
Authorized Signatory
Dated: [ ], 1998
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Amortizing Class Certificates
described in the Trust Agreement referred to herein.
THE BANK OF NEW YORK,
a New York banking corporation,
not in its individual capacity but
solely as Trustee,
By:
Authorized Signatory
A-4
(REVERSE OF TRUST CERTIFICATE)
The Certificates are limited in right of distribution
to certain payments and collections respecting the Trust
Agreement, all as more specifically set forth herein and in the
Trust Agreement. The registered Holder hereof, by its acceptance
hereof, agrees that it will look solely to the Term Assets (to
the extent of its rights therein) for distributions hereunder.
Subject to the next sentence and to certain exceptions
provided in the Trust Agreement, the Trust Agreement permits the
amendment thereof and the modification of the rights and
obligations of the Depositor and the Trustee and the rights of
the Certificateholders under the Trust Agreement at any time by
the Depositor and the Trustee with the unanimous consent of the
Holders each Outstanding Class of Certificates. Any such consent
by the Holder of this Certificate (or any predecessor
Certificate) shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange hereof
or in lieu hereof whether or not notation of such consent is made
upon this Certificate. The Trust Agreement also permits the
amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
The Certificates are issuable in fully registered form
only in minimum Certificate Principal Balances of $250,000 and
integral multiples of $1.00 in excess thereof. As provided in the
Trust Agreement and subject to certain limitations therein set
forth, Certificates are exchangeable for new Certificates of the
same principal amount, Class, original issue date and maturity,
in authorized denominations as requested by the Holder
surrendering the same.
As provided in the Trust Agreement and subject to
certain limitations therein set forth, the transfer of this
Certificate is registrable in the Certificate Register upon
surrender of this Certificate for registration of transfer at the
offices or agencies of the Certificate Registrar maintained by
the Trustee in the Borough of Manhattan, The City of New York,
duly endorsed by, or accompanied by an assignment in the form
below and by such other documents as required by the Trust
Agreement signed by, the Holder hereof, and thereupon one or more
new Certificates of the same Class in authorized denominations
evidencing the same principal amount will be issued to the
designated transferee or transferees. The Certificate Registrar
appointed under the Trust Agreement is The Bank of New York.
No service charge will be made for any registration of
transfer or exchange, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of
Certificates.
The Depositor and the Trustee and any agent of the
Depositor or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes,
and neither the Depositor, the Trustee, nor any such agent shall
be affected by any notice to the contrary.
The Trust and the obligations of the Depositor and the
Trustee created by the Trust Agreement with respect to the
Certificates will terminate upon (i) the distribution of the Term
Assets to the Residual Class Certificateholders on May 15, 2017
(subject to Section 9(b) of the Series Supplement), (ii) the
payment in full of the Certificates after a Shortened Maturity
Redemption, (iii) the occurrence of an In-Kind Distribution, (iv)
the occurrence of an Optional Redemption other than a Partial
Optional Redemption, or (v) the exchange of Certificates for the
last remaining Term Assets pursuant to Section 8 of the Series
Supplement.
A-5
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells,
assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR TAXPAYER
IDENTIFICATION OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
_________________________________________________________________
(Please print or type name and address, including postal zip
code, of assignee)
_________________________________________________________________
the within Trust Certificate, and all rights thereunder, hereby
irrevocably constituting and appointing
_________________________________________________________________
Attorney to transfer said Trust Certificate on the books of the
Certificate Registrar, with full power of substitution in the
premises.
Dated: ______________________
________________________________*
Signature Guaranteed;
________________________________*
* NOTICE: The signature to this assignment must correspond with
the name as it appears upon the face of the within Trust
Certificate in every particular, without alteration, enlargement
or any change whatever. Such signature must be guaranteed by an
"eligible guarantor institution" meeting the requirements of the
Certificate Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee
program" as may be determined by the Certificate Registrar in
addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
[TO BE COMPLETED BY PURCHASER:
The undersigned represents and warrants that it is an
institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act of 1933, as amended.
Dated: ________ ________________________]1
Signature
1 Bracketed Certifcation to be omitted in Exchange
Certificates of this Class upon delivery of a Depositor
Order to such effect pursuant to Section 7(c) of the Series
Supplement.
A-6
NOTICE OF EXCHANGE
To: The Bank of New York, acting not in its individual
capacity but as trustee (the "Trustee") of Receipts on Corporate
Securities Trust, Series NSC 1998-1 (the "Trust") created
pursuant to the Series Supplement dated as of April 13, 1998 (the
"Series Supplement") to the Base Trust Agreement dated as of
August 28, 1997, as amended (together, the "Trust Agreement").
(Capitalized terms used and not defined herein have the meanings
ascribed thereto in the Trust Agreement).
By delivery of this duly completed Notice of exchange,
the undersigned registered holder of Amoritizing Class
Certificates and Residual Class Certificates of the Trust
irrevocably exercises its option under, and subject to the terms
and conditions of, Section 8 of the Series Supplement to exchange
(a) Amortizing Class Certificates evidencing the percentage
specified below (the "Specified Percentage") (which shall not be
less than 10%) of the Aggregate Certificate Principal Balance of
all outstanding Amortizing Class Certificates of the Trust and
(b) Residual Class Certificates evidencing the Specified
Percentage of the Aggregate Certificate Principal Balance of all
outstanding Residual Class Certificates of the Trust for Term
Assets representing the Specified Percentage of all Term Assets
held in the Trust (subject to rounding down to authorized
denominations as provided in Section 8 of the Series Supplement).
The undersigned irrevocably undertakes to deliver to
the Trustee on the Exchange Date specified below the specified
amount of Amortizing Class Certificates and Residual Class
Certificates held of record by the undersigned in exchange for
Term Assets in the Specified Percentage (subject to rounding as
described above).
Exchange Date:______________ (must be the Scheduled
Distribution Date occurring not less than 30 nor more than 45
days after the giving of this Notice).
Certificates to be Tendered:
-----------------------------------------------------------------
Specified
Principal Percentage
Amount of of entire
Principal Certificate Class
Certificate Amount of to be to be
Class Number Certificate Exchanged* Exchanged**
----- ----------- ----------- ---------- -----------
--
Amortizing $R-- $ $ |
Residual $R-- $ $ | ________%
--
-----------------------------------------------------------------
------------
* If not completed, the Holder will be deemed to have agreed
to exchange the entire Certificate Principal Balance
represented by its Certificates.
** Must be not less than 10% and must represent the identical
percentage of the respective Aggregate Certificate Principal
Balances of all outstanding Amortizing Class Certificates
and Residual Class Certificates issued by the Trust.
A-7
Registration instruction for Term Assets (Note: must be eligible
participant of book-entry depository system if Term Assets are
held through that system):
Dated: ________________
_________________________________*
Signature Guaranteed;
_________________________________*
* NOTICE: The signature to this assignment must correspond with
the name as it appears upon the face of the Trust Certificate
surrendered in connection with the exchange in every particular,
without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Certificate
Registrar, which requirements include membership or participation
in STAMP or such other "signature guarantee program" as may be
determined by the Certificate Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.
A-8
Exhibit B
[Form of Residual Class Certificate]
NUMBER Certificate Principal Balance $____________
R-___ Aggregate Certificate Principal
Balance $80,000,000
CUSIP NO. 000000XX0
SEE REVERSE FOR CERTAIN DEFINITIONS
THE HOLDER OF THIS CERTIFICATE SHALL HAVE NO RIGHT TO
PAYMENTS IN RESPECT OF THE TERM ASSETS EXCEPT IN THE EVENT OF AN
OPTIONAL REDEMPTION OR A SHORTENED MATURITY REDEMPTION (AS SUCH
TERMS ARE DEFINED IN THE TRUST AGREEMENT REFERRED TO HEREIN) ON
OR PRIOR TO MAY 15, 2017. THE REGISTERED HOLDER HEREOF, BY ITS
ACCEPTANCE HEREOF, AGREES THAT IT WILL LOOK SOLELY TO THE TRUST
PROPERTY (TO THE EXTENT OF ITS RIGHTS THEREIN) FOR DISTRIBUTIONS
HEREUNDER.
THIS CERTIFICATE REPRESENTS A FRACTIONAL UNDIVIDED
INTEREST IN THE TRUST AND DOES NOT EVIDENCE AN OBLIGATION OF, OR
AN INTEREST IN, AND IS NOT GUARANTEED BY THE DEPOSITOR OR THE
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE TRUST ASSETS ARE INSURED OR GUARANTEED BY ANY
GOVERNMENTAL AGENCY OR ANY OTHER PERSON.
[THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THESE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER JURISDICTION.]1
[THE TRUST HAS NOT BEEN REGISTERED AS AN INVESTMENT
COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED. ANY
TRANSFER OF THIS CERTIFICATE MAY ONLY BE MADE IN ACCORDANCE WITH
RULE 3A-7 OF SUCH ACT.]2
THE RESIDUAL CLASS CERTIFICATES MAY ONLY BE HELD BY
PERSONS WHO CERTIFY THAT THE BENEFICIAL OWNER THEREOF IS EXEMPT
FROM WITHHOLDING UNDER U.S. FEDERAL INCOME TAX LAWS.
--------------
1 Bracketed Legend to be omitted in Exchange Certificates of
this Class.
2 Bracketed Legend to be omitted in Exchange Certificates upon
Depositor Order, if any, delivered pursuant to Section 7(c).
B-1
RECEIPTS ON CORPORATE SECURITIES TRUST, SERIES NSC 1998-1
RECEIPTS ON CORPORATE SECURITIES
ON SERIES NSC 1998-1
Residual Class Certificates evidencing a fractional
undivided beneficial ownership interest in the Trust, as defined
below, the property of which consists of $80,000,000 aggregate
principal amount of 7.90% Notes due May 15, 2097 (the "Term
Assets") issued by Norfolk Southern Corporation, a Virginia
corporation ("NSC"), and deposited in the Trust by the Depositor,
as defined below. The Term Assets were purchased by the Trust
from Prudential Securities Structured Assets, Inc. (the
"Depositor") in exchange for the transfer of the Certificates to
the Depositor by the Trust.
THIS CERTIFIES THAT [ ] is the registered owner of
a nonassessable, fully-paid, fractional undivided interest in
Receipts on Corporate Securities Trust, Series NSC 1998-1 formed
by the Depositor. Under the Trust Agreement, this Certificate
will be terminated and deemed involuntarily surrendered by the
holder hereof in exchange for a principal amount of the Term
Assets underlying this Certificate equal to the Certificate
Principal Balance hereof on May 15, 2017, unless an Optional
Redemption, a Shortened Maturity Redemption or an In-Kind
Distribution (as such terms are defined in the Trust Agreement)
has occurred on or prior to such date; provided that if payment
to the Amortizing Class Certificateholders with respect to the
Term Assets due on May 15, 2017 is not made by NSC on such date,
the Term Assets will not be distributed to the holders of the
Residual Class Certificates until such payment is made by NSC or
the Trustee makes an In-Kind Distribution to Certificateholders
in accordance with the Trust Agreement. With respect to any
distribution to the Residual Class Certificates (as defined
below), the percentage of such distribution to which this
Certificateholder is entitled on any such Distribution Date is
such Certificateholder's Percentage Interest of such
distribution. In the event of an Optional Redemption or a
Shortened Maturity Redemption, the Trustee will distribute the
payments received on the Term Assets on the Optional Redemption
Date or the Shortened Maturity Date, as applicable, to the
holders of the Amortizing Class Certificates and holders of the
Residual Class Certificates, respectively, in the same ratio as
(i) the present value of all originally scheduled future payments
on the Amortizing Class Certificates bears to (ii) the present
value of all originally scheduled future payments on the Term
Assets after May 15, 2017, discounted semiannually in each case
at a rate of 7.90% per annum (such ratio being the "Distribution
Ratio") to the Optional Redemption Date or Shortened Maturity
Date, as applicable. Such amounts will be calculated by the
Calculation Agent. In the event of an In-Kind Distribution
pursuant to Section 3.6 of the Base Trust Agreement, the Trustee
shall make such In-Kind Distribution to the Holders of the
Amortizing Class Certificates and the Holders of the Residual
Class Certificates, respectively, on the basis of the
Distribution Ratio to the date on which the Payment Default or
Acceleration of the Term Assets occurred. Such ratio shall be
calculated by the Calculation Agent. In the event of a Partial
Optional Redemption, the Certificate Principal Balance of this
Certificate will be reduced in accordance with the Trust
Agreement.
The Trust was created pursuant to a Base Trust
Agreement dated as of August 28, 1997, as amended by Base
Amendment No. 1 dated as of February 27, 1998 (together, the
"Base Trust Agreement"), between the Depositor and The Bank of
New York, a New York banking corporation, not in its individual
capacity but solely as Trustee (the "Trustee"), as supplemented
by the Series NSC 1998-1 Supplement dated as of April 13, 1998
(the "Series Supplement" and, together with the Base Trust
Agreement, the "Trust Agreement"), between the Depositor and the
Trustee. This Certificate does not purport to summarize the Trust
Agreement and reference is hereby made to the Trust Agreement for
information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby and the rights,
duties and obligations of the Trustee with respect hereto. A copy
of the Trust Agreement may be obtained from the Trustee by
written request sent to the Corporate Trust Office. Capitalized
terms used but not defined herein have the meanings assigned to
them in the Trust Agreement.
This Certificate is one of the duly authorized
Certificates designated as "Receipts on Corporate Securities,
Series NSC 1998-1, Residual Class Certificates" (herein called
the "Residual Class Certificates"). The Trust is also issuing
certificates designated as "Receipts on Corporate Securities,
Series NSC 1998-1, Amortizing Class Certificates" (hereinafter
called the "Amortizing Class Certificates" and together with the
Residual Class Certificates, the "Certificates") pursuant to the
Trust Agreement. This Certificate is issued under and is subject
to
B-2
the terms, provisions and conditions of the Trust Agreement, to
which Trust Agreement the Holder of this Certificate by virtue of
the acceptance hereof assents and by which such Holder is bound.
The property of the Trust consists of the Term Assets and all
payments on or collections in respect of the Term Assets accrued
on or after the Closing Date, all as more fully specified in the
Trust Agreement.
Subject to the terms and conditions of the Trust
Agreement (including the availability of funds for distributions)
and until the obligation created by the Trust Agreement shall
have terminated in accordance therewith, distributions will be
made on each Distribution Date to the Person in whose name this
Certificate is registered on the applicable Record Date. The
Record Date applicable to any Distribution Date is the day
immediately preceding such Distribution Date.
Reference is hereby made to the further provisions of
this Certificate set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
Unless the certificate of authentication hereon has
been executed by or on behalf of the Trustee, by manual
signature, this Certificate shall not entitle the holder hereof
to any benefit under the Trust Agreement or be valid for any
purpose.
It is the intent of the Depositor and the
Certificateholders that, for purposes of federal income, state
and local income and franchise taxes and any other taxes imposed
upon, measured by or based upon gross or net income, the Trust
shall be treated as a grantor trust or, failing that, as a
partnership that is not treated as an association (or publicly
traded partnership) taxable as a corporation or a public traded
partnership, and the Trust Agreement shall be interpreted
accordingly. Except as otherwise required by appropriate taxing
authorities, the Depositor and the other Certificateholders by
acceptance of a Certificate, agree to treat, the Certificates for
such tax purposes as interests in such grantor trust. It is also
the intent of the Depositor and the Certificateholders that the
Trust be excluded from the application of the rules of subchapter
K of the Code in the event that the Internal Revenue Service
successfully recharacterizes the Trust as a partnership for
federal income tax purposes, and that a protective election
pursuant to Treasury Regulation Section 1.761-2 be made as of the
date of formation of the Trust.
B-3
THIS CERTIFICATE SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICT-OF-LAW PROVISIONS.
IN WITNESS WHEREOF, the Trustee has caused this
Certificate to be duly executed as of the date set forth below.
THE BANK OF NEW YORK,
a New York banking corporation,
By: _____________________________
Authorized Signatory
Dated: [ ], 1998
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Residual Class Certificates described in the
Trust Agreement referred to herein.
THE BANK OF NEW YORK,
a New York banking corporation,
not in its individual capacity
but solely as Trustee,
By: _____________________________
Authorized Signatory
B-4
(REVERSE OF TRUST CERTIFICATE)
The Certificates are limited in right of distribution
to certain payments and collections respecting the Trust
Agreement, all as more specifically set forth herein and in the
Trust Agreement. The registered Holder hereof, by its acceptance
hereof, agrees that it will look solely to the Term Assets (to
the extent of its rights therein) for distributions hereunder.
Subject to the next sentence and to certain exceptions
provided in the Trust Agreement, the Trust Agreement permits the
amendment thereof and the modification of the rights and
obligations of the Depositor and the Trustee and the rights of
the Certificateholders under the Trust Agreement at any time by
the Depositor and the Trustee with the unanimous consent of the
Holders of each Outstanding Class of Certificates. Any such
consent by the Holder of this Certificate (or any predecessor
Certificate) shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange hereof
or in lieu hereof whether or not notation of such consent is made
upon this Certificate. The Trust Agreement also permits the
amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
The Certificates are issuable in fully registered form
only in minimum Certificate Principal Balances of $500,000 and
integral multiples of $1.00 in excess thereof. As provided in the
Trust Agreement and subject to certain limitations therein set
forth, Certificates are exchangeable for new Certificates of the
same principal amount, Class, original issue date and maturity,
in authorized denominations as requested by the Holder
surrendering the same.
As provided in the Trust Agreement and subject to
certain limitations therein set forth, the transfer of this
Certificate is registrable in the Certificate Register upon
surrender of this Certificate for registration of transfer at the
offices or agencies of the Certificate Registrar maintained by
the Trustee in the Borough of Manhattan, The City of New York,
duly endorsed, by or accompanied by an assignment in the form
below and by such other documents as required by the Trust
Agreement signed by, the Holder hereof, and thereupon one or more
new Certificates of the same Class in authorized denominations
evidencing the same principal amount will be issued to the
designated transferee or transferees. The Certificate Registrar
appointed under the Trust Agreement is The Bank of New York.
No service charge will be made for any registration of
transfer or exchange, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of
Certificates.
The Depositor and the Trustee and any agent of the
Depositor or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes,
and neither the Depositor, the Trustee, nor any such agent shall
be affected by any notice to the contrary.
The Trust and the obligations of the Depositor and the
Trustee created by the Trust Agreement with respect to the
Certificates shall terminate upon (i) the distribution of the
Term Assets to the Residual Class Certificateholders on May 15,
2017 (subject to Section 9(b) of the Series Supplement), (ii) the
payment in full of the Certificates after a Shortened Maturity
Redemption, (iii) the occurrence of an In-Kind Distribution, (iv)
the occurrence of an Optional Redemption other than a Partial
Optional Redemption, or (v) the exchange of Certificates for the
last remaining Term Assets pursuant to Section 8 of the Series
Supplement.
B-5
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY OR TAXPAYER IDENTIFICATION OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
_________________________________________________________________
(Please print or type name and address, including postal zip
code, of assignee)
_________________________________________________________________
the within Trust Certificate, and all rights thereunder, hereby
irrevocably constituting and appointing
_________________________________________________________________
Attorney to transfer said Trust Certificate on the books of the
Certificate Registrar, with full power of substitution in the
premises.
Dated: _____________
______________________________*
Signature Guaranteed;
______________________________*
* NOTICE: The signature to this assignment must correspond with
the name as it appears upon the face of the within Trust
Certificate in every particular, without alteration, enlargement
or any change whatever. Such signature must be guaranteed by an
"eligible guarantor institution" meeting the requirements of the
Certificate Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee
program" as may be determined by the Certificate Registrar in
addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
B-6
TO BE COMPLETED BY PURCHASER:
The undersigned represents and warrants that that the
beneficial owner hereof is either (i) a United States person, or
(ii) a non-United States person who is exempt from withholding
under U.S. federal income tax laws and has completed, accurately
and in a manner reasonably satisfactory to the Trustee or its
agent, an appropriate statement (generally on IRS Form W-8),
signed under penalties of perjury, identifying the beneficial
owner and stating that the beneficial owner is not a United
States person (or, after December 31, 1999, has satisfied
applicable documentary evidence requirements for establishing
that it is not a United States person) and delivered such
statement (or documentary evidence) to the Trustee or its agent.
Dated ___________________________
(Signature)
[The undersigned represents and warrants that
it is "a qualified institutional buyer" (as defined in Rule 144A
under the Securities Act of 1933, as amended).
Dated ___________________________4
(Signature)
-------------------
4 Bracketed Certification to be omitted in Exchange
Certificates of this Class upon delivery of a Depositor
Order to such effect pursuant to Section 7(c) of the Series
Supplement.
B-7
NOTICE OF EXCHANGE
To: The Bank of New York, acting not in its individual
capacity but as trustee (the "Trustee") of Receipts on Corporate
Securities Trust, Series NSC 1998-1 (the "Trust") created
pursuant to the Series Supplement dated as of April 13, 1998 (the
"Series Supplement") to the Base Trust Agreement dated as of
August 28, 1997, as amended (together, the "Trust Agreement").
(Capitalized terms used and not defined herein have the meanings
ascribed thereto in the Trust Agreement).
By delivery of this duly completed Notice of Exchange,
the undersigned registered holder of Amortizing Class
Certificates and Residual Class Certificates of the Trust
irrevocably exercises its option under, and subject to the terms
and conditions of, Section 8 of the Series Supplement to exchange
(a) Amortizing Class Certificates evidencing the percentage
specified below (the "Specified Percentage") (which shall not be
less than 10%) of the Aggregate Certificate Principal Balance of
all outstanding Amortizing Class Certificates of the Trust and
(b) Residual Class Certificates evidencing the Specified
Percentage of the Aggregate Certificate Principal Balance of all
outstanding Residual Class Certificates of the Trust for Term
Assets representing the Specified Percentage of all Term Assets
held in the Trust (subject to rounding down to authorized
denominations as provided in Section 8 of the Series Supplement).
The undersigned irrevocably undertakes to deliver to
the Trustee on the Exchange Date specified below the specified
amount of Amortizing Class Certificates and Residual Class
Certificates held of record by the undersigned in exchange for
Term Assets in the Specified Percentage (subject to rounding as
described above).
Exchange Date: ____________ (must be the Scheduled
Distribution Date occurring not less than 30 nor more than 45
days after the giving of this Notice).
Certificates to be Tendered:
-----------------------------------------------------------------
Specified
Principal Percentage
Amount of of entire
Principal Certificate Class
Certificate Amount of to be to be
Class Number Certificate Exchanged* Exchanged**
----- ----------- ----------- ---------- -----------
--
Amortizing $R-- $ $ |
Residual $R-- $ $ | ________%
--
-----------------------------------------------------------------
------------
* If not completed, the Holder will be deemed to have agreed
to exchange the entire Certificate Principal Balance
represented by its Certificates.
** Must be not less than 10% and must represent the identical
percentage of the respective Aggregate Certificate Principal
Balances of all outstanding Amortizing Class Certificates
and Residual Class Certificates issued by the Trust.
B-8
Registration instruction for Term Assets (Note: must be eligible
participant of book-entry depository system if Term Assets are
held through that system):
Dated: ________________
____________________________*
Signature Guaranteed;
____________________________*
NOTICE: The signature to this assignment must correspond with the
name as it appears upon the face of the Trust Certificate
surrendered in connection with the exchange in every particular,
without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Certificate
Registrar, which requirements include membership or participation
in STAMP or such other "signature guarantee program" as may be
determined by the Certificate Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.
B-9
Schedule 1
IDENTIFICATION OF TERM ASSETS
Terms of Term Assets:
NSC:........................... Norfolk Southern Corporation
Term Assets:................... 7.90% Notes due May 15, 2097
Issue Date:.................... On or about May 19, 1997
Original Principal Maturity
Date:.......................... May 15, 2097
Original Principal Amount
Issued:........................ $350,000,000
CUSIP Number:.................. 000000XX0
Stated Interest Rate:.......... 7.90%
Interest Payment Dates:........ May 15 and November 15
Mode of Payment of Term
Assets:........................ By credit to the account
of the holder at DTC
Principal Amount of Term
Assets Deposited Under
Trust Agreement:............... $80,000,000
The Term Assets will be held by the Trustee for the
Owners of Certificates as book-entry credits to an account of the
Trustee at DTC.
Schedule 2
AMORTIZING CLASS CERTIFICATES
SCHEDULE OF AMORTIZING PAYMENTS*
DATE INTEREST PRINCIPAL TOTAL REMAINING
PAYMENT PAYMENT CASHFLOW BALANCE
May 15, 1998 $2,230,540.30 $929,459.70 $3,160,000.00 $69,048,275.30
November 15, 1998 $2,200,913.78 $959,086.22 $3,160,000.00 $68,089,189.08
May 15, 1999 $2,170,342.90 $989,657.10 $3,160,000.00 $67,099,531.98
November 15, 1999 $2,138,797.58 $1,021,202.42 $3,160,000.00 $66,078,329.56
May 15, 2000 $2,106,246.75 $1,053,753.25 $3,160,000.00 $65,024,576.31
November 15, 2000 $2,072,658.37 $1,087,341.63 $3,160,000.00 $63,937,234.68
May 15, 2001 $2,037,999.36 $1,122,000.64 $3,160,000.00 $62,815,234.04
November 15, 2001 $2,002,235.59 $1,157,764.41 $3,160,000.00 $61,657,469.63
May 15, 2002 $1,965,331.84 $1,194,668.18 $3,160,000.00 $60,462,801.47
November 15, 2002 $1,927,251.80 $1,232,748.20 $3,160,000.00 $59,230,053.27
May 15, 2003 $1,887,957.95 $1,272,042.05 $3,160,000.00 $57,958,011.22
November 15, 2003 $1,847,411.61 $1,312,588.39 $3,160,000.00 $56,645,422.83
May 15, 2004 $1,805,572.85 $1,354,427.15 $3,160,000.00 $55,290,995.68
November 15, 2004 $1,762,400.49 $1,397,599.51 $3,160,000.00 $53,893,396.17
May 15, 2005 $1,717,852.00 $1,442,148.00 $3,160,000.00 $52,451,248.17
November 15, 2005 $1,671,883.54 $1,488,116.46 $3,160,000.00 $50,963,131.71
May 15, 2006 $1,624,449.82 $1,535,550.18 $3,160,000.00 $49,427,581.53
November 15, 2006 $1,575,504.16 $1,584,495.84 $3,160,000.00 $47,843,085.69
May 15, 2007 $1,524,998.36 $1,635,001.64 $3,160,000.00 $46,208,084.05
November 15, 2007 $1,472,882.68 $1,687,117.32 $3,160,000.00 $44,520,966.73
May 15, 2008 $1,419,105.81 $1,740,894.19 $3,160,000.00 $42,780,072.54
November 15, 2008 $1,363,614.81 $1,796,385.19 $3,160,000.00 $40,983,687.35
May 15, 2009 $1,306,355.03 $1,853,644.97 $3,160,000.00 $39,130,042.38
November 15, 2009 $1,247,270.10 $1,912,729.90 $3,160,000.00 $37,217,312.48
May 15, 2010 $1,186,301.84 $1,973,698.16 $3,160,000.00 $35,243,614.32
November 15, 2010 $1,123,390.21 $2,036,609.79 $3,160,000.00 $33,207,004.53
May 15, 2011 $1,058,473.27 $2,101,526.73 $3,160,000.00 $31,105,477.80
November 15, 2011 $991,487.10 $2,168,512.90 $3,160,000.00 $28,936,964.90
May 15, 2012 $922,365.76 $2,237,634.24 $3,160,000.00 $26,699,330.66
November 15, 2012 $851,041.16 $2,308,958.84 $3,160,000.00 $24,390,371.82
May 15, 2013 $777,443.10 $2,382,556.90 $3,160,000.00 $22,007,814.92
November 15, 2013 $701,499.10 $2,458,500.90 $3,160,000.00 $19,549,314.02
May 15, 2014 $623,134.38 $2,536,865.62 $3,160,000.00 $17,012,448.40
November 15, 2014 $542,271.79 $2,617,728.21 $3,160,000.00 $14,394,720.19
May 15, 2015 $458,831.71 $2,701,168.29 $3,160,000.00 $11,693,551.90
November 15, 2015 $372,731.97 $2,787,268.03 $3,160,000.00 $8,906,283.87
May 15, 2016 $283,887.80 $2,876,112.20 $3,160,000.00 $6,030,171.67
November 15, 2016 $192,211.72 $2,967,788.28 $3,160,000.00 $3,062,383.39
May 15, 2017 $97,616.61 $3,062,383.39 $3,160,000.00 $0.00
--------
* Subject to change pursuant to Section 9(a) of the Agreement
following a Partial Optional Redemption.
