EXECUTION COPY
CorTS(R) SUPPLEMENT 2001-1
between
STRUCTURED PRODUCTS CORP.,
as Depositor
and
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
CorTS(R)Trust For PECO Energy Capital Trust III
TABLE OF CONTENTS
Page
Preliminary Statement ............................................1
Section 1. Certain Defined Terms.................................1
Section 2. Creation and Declaration of Trust; Sale of Term
Assets; Acceptance by Trustee.........................5
Section 3. Designation...........................................5
Section 4. Date of the Certificates..............................5
Section 5. Certificate Principal Balance and Denominations;
Additional Term Assets................................6
Section 6. Currency of the Certificates..........................6
Section 7. Form of Securities....................................6
Section 8. Reserved..............................................6
Section 9. Certain Provisions of Base Trust Agreement Not
Applicable............................................6
Section 10. Distributions.........................................6
Section 11. Termination of Trust.................................10
Section 12. Limitation of Powers and Duties......................10
Section 13. Compensation of Trustee..............................11
Section 14. Modification or Amendment............................11
Section 15. Accounting...........................................12
Section 16. No Investment of Amounts Received on Term Assets....12
Section 17. No Event of Default..................................12
Section 18. Notices..............................................12
Section 19. Access to Certain Documentation......................12
Section 20. Advances.............................................13
Section 21. Ratification of Agreement............................13
Section 22. Counterparts.........................................13
Section 23. Governing Law........................................13
Section 24. Reserved.............................................13
Section 25. Certificate of Compliance............................13
Exhibit A..-- Identification of the Term Assets as of Closing Date
Exhibit B..-- Terms of the Certificates as of Closing Date
Exhibit C..-- Form of Certificates
CorTS(R) SUPPLEMENT 2001-1, dated as of January 19, 2001 (this
"Series Supplement"), between STRUCTURED PRODUCTS CORP., a Delaware
corporation, as depositor (the "Depositor"), and U.S. Bank Trust
National Association, a national banking association, as trustee (the
"Trustee").
PRELIMINARY STATEMENT
Pursuant to the Base Trust Agreement, dated as of December 15, 2000
(as supplemented pursuant to the Series Supplement, the "Agreement"), between
the Depositor and the Trustee, such parties may at any time and from time to
time enter into a series supplement supplemental to the Agreement for the
purpose of creating a trust. Section 5.13 of the 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 CorTS(R) Trust For PECO
Energy Capital Trust III, and a new Series of trust certificates to be issued
thereby, which certificates shall be known as the CorTS(R) Certificates, and the
Depositor and the Trustee shall herein specify certain terms and conditions in
respect thereof.
The Certificates shall be Fixed Rate Certificates issued in one Class
(the "Certificates").
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 Agreement and this Series Supplement in accordance with the
terms of Section 5.13 of the Agreement.
Section 1. Certain Defined Terms. (a) All terms used in this Series
Supplement that are defined in the 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 Agreement also contains rules as to usage which shall be
applicable hereto.
(b) Pursuant to Article I of the Agreement, the meaning of certain defined terms
used in the 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": The acceleration of the maturity of the Term Assets after
the occurrence of any default on the Term Assets other than a Payment Default.
"Business Day": Any day other than a Saturday, Sunday or a day on
which banking institutions in New York, New York are authorized or obligated by
law, executive order or governmental decree to be closed.
"Certificateholder" or "Holder": With respect to any Certificate, the
Holder thereof.
"Certificateholders" or "Holders": The Holders of the Certificates.
"Closing Date": January 19, 2001.
"Certificate Account": With respect to this Series, the Eligible Account
established and maintained by the Trustee in its corporate trust department in
the Trustee's name for the benefit of the related Certificateholders, into which
all payments made on or with respect to the related Term Assets will be
deposited.
"Collection Period": The period from (but excluding) the preceding
Distribution Date (or, in the case of the first Distribution Date, from and
including the Closing Date), through and including the current Distribution
Date.
"Corporate Trust Office": U.S. Bank Trust National Association, 000 Xxxx
Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust or such
other corporate trust office as the Trustee shall designate in writing to the
Depositor and the Certificateholders.
"Depositary": The Depository Trust Company.
"Distribution Date": Any Scheduled Distribution Date, the Maturity Date or
any Term Assets Default Distribution Date or any Term Assets Redemption
Distribution Date.
"Event Redemption Price": Event Redemption Price shall have the meaning
specified in Section 10(h) of this Series Supplement.
"Extension Period": The period, up to ten (10) consecutive semiannual
interest distribution dates on the Term Assets, but not to extend beyond April
6, 2028, in which PECO Energy Company, and consequently the Term Assets Issuer,
defers distributions on the Term Assets.
"Fixed Payment": Each equal semiannual installment of interest payable on
the Term Assets on each April 30 and October 31 or, if any such day is not a
Business Day, then the immediately following Business Day, except that the final
installment of interest will be payable on April 6, 2028, commencing on April
30, 2001 through and including April 6, 2028.
"Interest Collections": With respect to any Distribution Date, all payments
received by the Trustee, during the Collection Period ending on such Scheduled
Distribution Date, in respect of (i) interest on the Term Assets and (ii)
penalties or other amounts required to be paid because of late payments on the
Term Assets.
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"Investment Company Event": Investment Company Event means the receipt by
PECO Energy Capital, L.P. of an opinion of counsel (which may be regular counsel
to PECO Energy Company or an affiliate but not an employee thereof) experienced
in such matters to the effect that a change in law or regulation or a change in
official interpretation of law or regulation by any legislative body, court,
governmental agency or regulatory authority has occurred to the effect that PECO
Energy Capital, L.P. is or will be considered an investment company which is
required to be registered under the Investment Company Act of 1940, as amended,
which change becomes effective on or after the date of the issuance of the
Preferred Securities.
"Investment Company Event Redemption": Investment Company Event Redemption
shall have the meaning specified in Section 10(h) of this Series Supplement.
"Maturity Date": April 6, 2028.
"Payment Default": A default by the Term Assets Issuer in the payment of
any amount due on the Term Assets after the same becomes due and payable (and
the expiration of any applicable grace period on the Term Assets).
"Place of Distribution": New York, New York.
"Preferred Securities": The 7.38% Cumulative Preferred Securities, Series
D, issued by PECO Energy Capital, L.P.
"Rating Agency": Each of Xxxxx'x Investors Service, Inc. ("Moody's"), and
Standard & Poor's Ratings Services ("S&P"), a division of The XxXxxx-Xxxx
Companies, Inc., and any successor to either of the foregoing. 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 day immediately
preceding such Distribution Date.
"Scheduled Distribution Date": Each April 30 and October 31 or, if any such
day is not a Business Day, then the immediately following Business Day, except
that the final Scheduled Distribution Date is April 6, 2028, commencing April
30, 2001, through and including April 6, 2028; provided, however, that payment
on each Scheduled Distribution Date shall be subject to prior payment of
interest or principal, as applicable, on the Term Assets.
"Special Event Redemption Price": Special Event Redemption Price shall have
the meaning specified in Section 10(h) of this Series Supplement.
"Specified Currency": United States Dollars.
"Subordinated Deferrable Interest Debentures": Means the 7.38% Subordinated
Deferrable Interest Debentures due on the Maturity Date issued by PECO Energy
Company.
"Tax Event": Tax Event means the receipt by PECO Energy Capital, L.P. of an
opinion of counsel (which may be regular counsel to PECO Energy Company or an
affiliate but not an employee thereof) experienced in such matters to the effect
that, as a result of any amendment to or change (including any announced
prospective change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein
affecting taxation, or as a result of any
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official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such interpretation or pronouncement is announced on or after the date of
issuance of the Preferred Securities, there is more than an insubstantial risk
that (a) PECO Energy Capital, L.P. is subject to United States federal income
tax with respect to income received on the Subordinated Deferrable Interest
Debentures or PECO Energy Capital, L.P. will otherwise not be taxed as a
partnership, (b) interest payable by PECO Energy Company on the Subordinated
Deferrable Interest Debentures will not be deductible for United States federal
income tax purposes, or (c) PECO Energy Capital, L.P. is subject to more than a
de minimis amount of other taxes, duties or other governmental charges.
"Tax Event Redemption": Tax Event Redemption shall have the meaning
specified in Section 10(h) of this Series Supplement.
"Term Assets": As of the Closing Date, $27,500,000 aggregate principal
amount of 7.38% Capital Trust Pass-Through Securities issued by the Term Assets
Issuer, sold to the Trustee by the Depositor and identified on Exhibit A hereto.
Additional Term Assets may also be sold to the Trustee from time to time
pursuant to Section 5 of this Series Supplement.
"Term Assets Default Distribution Date": The date on which the Trustee
makes a distribution of the proceeds received in connection with a recovery on
the Term Assets (in the case of Payment Default, after deducting any costs
incurred in connection therewith) following a Payment Default or an Acceleration
or other default with respect to the Term Assets.
"Term Assets Issuer": PECO Energy Capital Trust III, the sole assets of
which are the Preferred Securities issued by PECO Energy Capital, L.P. The sole
assets of PECO Energy Capital, L.P. are the Subordinated Deferrable Interest
Debentures.
"Term Assets Payment Date": Unless the Extension Period is in effect, each
April 30 and October 31, commencing on April 30, 2001 and ending on April 6,
2028; provided, however, that if any Term Assets Payment Date would otherwise
fall on a day that is not a Business Day, such Term Assets Payment Date will be
the following Business Day.
"Term Assets Prospectus": The prospectus of the Term Assets Issuer, dated
April 1, 1998, with respect to the Term Assets.
"Term Assets Redemption Distribution Date": The date on which the Trustee
makes a distribution of the proceeds received upon a redemption of Term Assets
in accordance with their terms.
"Term Assets Trustee": The trustee for the Term Assets.
"Trust": CorTS(R)Trust For PECO Energy Capital Trust III.
"Trust Termination Event": (a) the payment in full at maturity or upon
early redemption of the Certificates or (b) the distribution of the proceeds
received upon a recovery on
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the Term Assets (in the case of Payment Default, after deducting the costs
incurred in connection therewith) after a Payment Default or an Acceleration
thereof (or other default with respect to the Term Assets).
"Voting Rights": The Certificateholders shall have 100% of the total Voting
Rights with respect to the Certificates, which Voting Rights shall be allocated
among all Holders of Certificates in proportion to the principal balances held
by such Holders on any date of determination.
Section 2. Creation and Declaration of Trust; Sale of Term Assets;
Acceptance by Trustee. (a) The Trust, of which the Trustee is the trustee, is
hereby created under the laws of the State of New York for the benefit of the
holders of the Certificates. The Trust shall be irrevocable.
(b) 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.
(c) The Depositor does hereby sell, transfer, assign, set over and
otherwise convey to the Trustee on behalf and for the benefit of the holders of
the Certificates and the Trust, without recourse, the Term Assets. The Trustee
shall pay the purchase price for the Term Assets by delivering to, or at the
direction of, the Depositor, all of the Certificates on the Closing Date and
making the payment identified in Section 10(l) of this Series Supplement.
(d) The Trustee hereby (i) acknowledges such sale, deposit and delivery,
pursuant to subsections (b) and (c) 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 13 hereof 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 "CorTS(R) Certificates." The Certificates shall be issued in
one class, in the amount set forth in Section 5 and with the additional terms
set forth in Exhibit B to this Series Supplement. The Certificates shall be
issued in substantially the form set forth in Exhibit C to this Series
Supplement with such necessary or appropriate changes as shall be approved by
the Depositor and the Trustee, such approval to be manifested by the execution
and authentication thereof by the Trustee. The Certificates shall evidence
undivided ownership interests in the assets of the Trust, subject to the
liabilities of the Trust and shall be payable solely from payments or property
received by the Trustee on or in respect of the Term Assets.
Section 4. Date of the Certificates. The Certificates that are
authenticated and delivered by the Trustee to or upon Depositor Order on the
Closing Date shall be dated the
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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.
Section 5... Certificate Principal Balance and Denominations; Additional
Term Assets. On the Closing Date, up to 1,014,750 Certificates with a
Certificate Principal Balance of $25,368,750 may be authenticated and delivered
under the Agreement and this Series Supplement. The Certificate Principal
Balance shall initially equal 92.25% of the initial principal amount of Term
Assets sold to the Trustee and deposited in the Trust. Such Certificate
Principal Balance 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 or 5.5 of
the Agreement. The Depositor may sell to the Trustee additional Term Assets on
any date hereafter upon at least five (5) Business Days notice to the Trustee
and upon (i) satisfaction of the Rating Agency Condition and (ii) delivery of an
Opinion of Counsel to the effect that the sale of such additional Term Assets
will not materially increase the likelihood that the Trust would fail to qualify
as a grantor trust under the Code. Upon such sale to the Trustee, the Trustee
shall deposit such additional Term Assets in the Certificate Account, and shall
authenticate and deliver to the Depositor, or its order, Certificates in a
Certificate Principal Balance equal to 92.25% of the principal amount of such
additional Term Assets. Any such additional Certificates authenticated and
delivered shall rank pari passu with any Certificates previously issued in
accordance with this Series Supplement.
Section 6... Currency of the Certificates. All distributions on the
Certificates will be made in the Specified Currency.
Section 7... Form of Securities. The Trustee shall execute and deliver the
Certificates in the form of one or more global certificates registered in the
name of DTC or its nominee.
Section 8... Reserved.
Section 9... Certain Provisions of Base Trust Agreement Not Applicable. The
provisions of Sections 2.3, 3.2, 3.3, 3.4, 3.5, 3.6, 3.8, 3.10, 3.11, 3.12,
5.16, 5.17, 6.1(c) through (e), 6.6 and 9.1 of the Base Trust Agreement, dated
as of December 15, 2000, and any other provision of the Base Trust Agreement,
dated as of December 15, 2000, which imposes obligations on, or creates rights
in favor of, the Trustee or the Certificateholders as a result of or in
connection with an "Event of Default" or "Administrative Agent Termination
Event" shall be inapplicable with respect to the Certificates. In addition,
there is no "Administrative Agent" specified herein and all references to
"Administrative Agent" in the Base Trust Agreement, dated as of December 15,
2000, therefore shall be inapplicable with respect to the Certificates.
Section 10.. Distributions.
(a) On each Scheduled Distribution Date, the Trustee shall distribute to
the Certificateholders the related Fixed Payment, to the extent of Interest
Collections, and on the Maturity Date shall distribute to the Certificateholders
the principal balance of the Certificates (in the amount of $25,368,750) and an
additional distribution of principal of $2,131,250, to the extent the principal
of the Term Assets is received by the Trustee on such date, and all other
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amounts held in the Trust; provided, however, if any such payment with respect
to the Term Assets is made to the Trustee after the Term Assets Payment Date on
which such payment was due, the Trustee shall distribute such amount received on
the Business Day following such receipt. In the event the Extension Period is in
effect, interest on the Certificates will continue to accrue so long as interest
on the Subordinated Deferrable Interest Debentures continues to so accrue, but
the Trustee shall not be required to make any distributions on the Certificates
until the next Scheduled Distribution Date following the end of the Extension
Period. The Depositor hereby advises the Trustee that during an Extension
Period, interest will continue to accrue on the Subordinated Deferrable Interest
Debentures at a rate of 7.38% per annum, compounded semiannually, but interest
will accrue on the Certificates at a rate that is lower than the Certificates'
8.0% per annum stated interest rate. If interest distributions are deferred for
the maximum permissible period (10 consecutive semiannual interest periods) and
all deferred interest (plus interest thereon) is then distributed,
Certificateholders will realize an annualized return of 7.90%, compounded
semiannually, for the five-year period.
(b) In the event of a Payment Default, the Trustee shall proceed against
the Term Assets Issuer on behalf of the Certificateholders to enforce the Term
Assets or otherwise to protect the interests of the Certificateholders, subject
to the receipt of indemnity in form and substance satisfactory to the Trustee;
provided that, holders of the Certificates representing a majority of the Voting
Rights on the Certificates will be entitled to direct the Trustee in any such
proceeding or direct the Trustee to sell the Term Assets, subject to the
Trustee's receipt of satisfactory indemnity. If the Trustee is directed to sell
the Term Assets, the Trustee shall solicit bids for the sale of the Term Assets
with settlement thereof on or before the third (3rd) Business Day after such
sale from three leading dealers in the relevant market. Any of the following
dealers shall be deemed to qualify as leading dealers: (1) Credit Suisse First
Boston Corporation, (2) Xxxxxxx, Xxxxx & Co., (3) Xxxxxx Brothers Inc., (4)
Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated, (5) UBS Securities LLC and
(6) Xxxxxxx Xxxxx Xxxxxx Inc.; provided, however, that no bid from Xxxxxxx Xxxxx
Xxxxxx Inc. or any affiliate thereof shall be accepted unless such bid equals
the then fair market value of such Term Assets. The Trustee shall not be
responsible for the failure to obtain a bid so long as it has made reasonable
efforts to obtain bids. If a bid for the sale of the Term Assets has been
accepted by the Trustee but the sale has failed to settle on the proposed
settlement date, the Trustee shall request new bids from such leading dealers.
In the event of an Acceleration and a corresponding payment on the Term Assets,
the Trustee shall distribute the proceeds to the Certificateholders no later
than two (2) Business Days after the receipt of immediately available funds.
(c) In the event that the Trustee receives money or other property in
respect of the Term Assets (other than a scheduled payment on or with respect to
an interest payment date) as a result of a Payment Default on the Term Assets
(including from the sale thereof), the Trustee will promptly give notice as
provided in Section 18(c) to the Depositary, or for any Certificates which are
not then held by DTC or any other depository, directly to the registered holders
of the Certificates then outstanding and unpaid. Such notice shall state that,
not later than 30 days after the receipt of such moneys or other property, the
Trustee will allocate and distribute such moneys or other property to the
holders of Certificates then outstanding and unpaid, pro rata by principal
amount (after deducting the costs incurred in connection therewith and subject
to clause (l) of this Section 10). Property other than cash will be liquidated
by the Trustee, and the proceeds thereof distributed in cash, only to the extent
necessary to avoid distribution of
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fractional securities to Certificateholders. In-kind distribution of Term Assets
to Certificateholders will be deemed to reduce the principal amount of
Certificates on a dollar-for-dollar basis. Following such in kind distribution,
all Certificates will be cancelled. Other than as provided in clause (l) below,
no amounts will be distributed to the Depositor in respect of the Term Assets.
(d) Distributions to the Certificateholders on each Distribution Date will
be made to the Certificateholders of record on the Record Date.
(e) All distributions to Certificateholders shall be allocated pro rata
among the Certificates based on their respective principal balances as of the
Record Date.
(f) 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
10(f) unless a new instruction is delivered fifteen (15) days prior to a
Distribution Date.
(g) Upon receipt by the Trustee of a notice that all or a portion of the
Term Assets are to be redeemed, the Trustee shall select by lot for redemption a
principal amount of Certificates equal to 92.25% of the principal amount of the
Term Assets to be redeemed and establish the Term Assets Redemption Distribution
Date. Notice of such redemption shall be given by the Trustee to the registered
Certificateholders not less than fifteen (15) days prior to the Term Assets
Redemption Distribution Date by mail to each registered Certificateholder at
such registered Certificateholder's last address on the register maintained by
the Trustee; provided, however, that the Trustee shall not be required to give
any notice of redemption prior to the third business day after the date it
receives notice of such redemption. The redemption price for Certificates
redeemed pursuant to a Tax Event Redemption or an Investment Company Event
Redemption (each as defined below) is set forth below in Section 10(h) of this
Series Supplement.
(h) In addition, if a Tax Event occurs and is continuing, within 90 days
following the occurrence of such Tax Event, PECO Energy Capital, L.P. will have
the right to prepay the Preferred Securities in whole or in part and therefore
cause a mandatory redemption of the Term Assets (such redemption, a "Tax Event
Redemption"). In addition, if an Investment Company Event occurs and is
continuing, within 90 days following the occurrence of such Investment Company
Event, PECO Energy Capital, L.P. will have the right to prepay the Preferred
Securities in whole but not in part and therefore cause a mandatory redemption
of the Term Assets (such redemption, an "Investment Company Event Redemption").
The redemption price in the case of a Tax Event Redemption or an Investment
Company Event Redemption (the "Special Event Redemption Price") will equal the
greater of (i) 100% of the principal amount of
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the Term Assets or (ii) the sum of the present values of the principal amount
that would be payable on April 6, 2028, together with the present values of
scheduled payments of interest from the date of redemption to April 6, 2028, in
each case discounted to the date of redemption on a semiannual basis (assuming a
360-day year consisting of twelve 30-day months) at a certain treasury rate plus
0.50%, less accrued interest on the Term Assets to the date of redemption, plus,
in each case, accrued interest on the Term Assets to the date of redemption.
(i) In the event the Preferred Securities or the Subordinated Deferrable
Interest Debentures are distributed to the Trust, such distribution will not
cause the Certificates to be redeemed. Instead, the Trust will hold the
Preferred Securities or the Subordinated Deferrable Interest Debentures, as the
case may be, for the Certificateholders in accordance with the terms hereof and
the Agreement.
(j) The holder of a Certificate which is redeemed will receive, on the Term
Assets Redemption Distribution Date, a payment equal to its pro rata share of
the distributions made on the Term Assets pursuant to a Tax Event Redemption or
an Investment Company Event Redemption as set forth above.
(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 be responsible or liable to any other
Certificateholder in respect of amounts previously distributed on the
Certificates based on their respective principal balances.
(l) On the Closing Date, as partial payment for the Term Assets, the
Trustee shall deliver to, or at the direction of, the Depositor all of the
Certificates. On April 30, 2001, as payment of the balance of the purchase price
for the Term Assets, the Trustee shall pay to the Depositor the amount of the
interest accrued on the Term Assets from October 31, 2000 to but not including
the Closing Date, which amount equals $445,362.50. In the event the Depositor is
not paid such accrued interest on such date, the Depositor shall have a claim
for the amount specified in the preceding sentence and shall share pari passu
with Certificateholders to the extent of such claim in the proceeds from the
sale of the Term Assets.
Section 11. Termination of Trust. (a) The Trust shall terminate upon the
occurrence of any Trust Termination Event.
(b) Except for any reports and other information required to be provided to
Certificateholders hereunder and under the Agreement and except as otherwise
specified herein and therein, the obligations of the Trustee will terminate upon
the distribution to Certificateholders of all amounts required to be distributed
to them and the disposition of all Term Assets held by the Trustee. The Trust
shall thereupon terminate, except for surviving rights of indemnity.
Section 12. Limitation of Powers and Duties. (a) The Trustee shall
administer the Trust and the Term Assets solely as specified herein and in the
Agreement.
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(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, unless expressly provided 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, (ii) to merge or consolidate the Trust with any
other entity, or (iii) 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. In addition, the Trustee has no power to
create, assume or incur indebtedness or other liabilities in the name of the
Trust other than as contemplated herein and in the Agreement.
(c) The parties acknowledge that the Trustee, as the holder of the Term
Assets, has the right to vote and give consents and waivers in respect of the
Term Assets and enforce the other rights, if any, of a holder of the Term
Assets, except as otherwise limited by the Agreement or this Series Supplement.
In the event that the Trustee receives a request from the Term Assets Trustee,
the Term Assets Issuer or, if applicable, the Depositary with respect to the
Term Assets, for the Trustee's consent to any amendment, modification or waiver
of the Term Assets, or any document relating thereto, or receives any other
solicitation for any action with respect to the Term Assets, the Trustee shall
within two (2) Business Days mail a notice of such proposed amendment,
modification, waiver or solicitation to each Certificateholder of record as of
the date of such request. The Trustee shall request instructions from the
Certificateholders as to what action to take in response to such request and
shall be protected in taking no action if no direction is received. Except as
otherwise provided herein, the Trustee shall consent or vote, or refrain from
consenting or voting, in the same proportion (based on the principal balances of
the Certificates) as the Certificates of the Trust were actually voted or not
voted by the Holders thereof as of the date determined by the Trustee prior to
the date such vote or consent is required; provided, however, that,
notwithstanding anything to the contrary in the Agreement or this Series
Supplement, the Trustee shall at no time vote in favor of or consent to any
matter (i) which would alter the timing or amount of any payment on the Term
Assets (including, without limitation, any demand to accelerate the Term Assets)
or (ii) which would result in the exchange or substitution of any Term Asset
pursuant to a plan for the refunding or refinancing of such Term Asset, except
in each case with the unanimous consent of the Certificateholders and subject to
the requirement that such vote would not materially increase the likelihood that
the Trust will fail to qualify as a grantor trust for federal income tax
purposes, such determination to be based solely on an Opinion of Counsel. The
Trustee shall have no liability for any failure to act or to refrain from acting
resulting from the Certificateholders' late return of, or failure to return,
directions requested by the Trustee from the Certificateholders.
(d) Notwithstanding any provision of the Agreement to the contrary, the
Trustee may require from the Certificateholders prior to taking any action at
the direction of the Certificateholders, an indemnity agreement of a
Certificateholder or any of its Affiliates to provide for security or indemnity
against the costs, expenses and liabilities the Trustee may incur by reason of
any such action. An unsecured indemnity agreement, if acceptable to the Trustee,
shall be deemed to be sufficient to satisfy such security or indemnity
requirement.
(e) Notwithstanding any provision of the Agreement to the contrary, the
Trustee shall act as the sole Authenticating Agent, Paying Agent and Registrar.
10
Section 13. Compensation of Trustee. The Trustee shall be entitled to
receive from the Depositor as compensation for the Trustee's services hereunder,
trustee's fees pursuant to a separate agreement between the Trustee and the
Depositor, and shall be reimbursed for all reasonable expenses, disbursements
and advances incurred or made by the Trustee (including the reasonable
compensation, disbursements and expenses of its counsel and other persons not
regularly in its employ). The Depositor shall indemnify and hold harmless the
Trustee and its successors, assigns, agents and servants against any and all
loss, liability or reasonable expense (including attorneys' fees) incurred by it
in connection with the administration of this trust and the performance of its
duties thereunder. The Trustee shall notify the Depositor promptly of any claim
for which it may seek indemnity. Failure by the Trustee to so notify the
Depositor shall not relieve the Depositor of its obligations hereunder. The
Depositor need not reimburse any expense or indemnify against any loss,
liability or expense incurred by the Trustee through the Trustee's own willful
misconduct, negligence or bad faith. The indemnities contained in this Section
13 shall survive the resignation or termination of the Trustee or the
termination of this Agreement.
Failure by the Depositor to pay, reimburse or indemnify the Trustee shall
not entitle the Trustee to any payment, reimbursement or indemnification from
the Trust, nor shall such failure release the Trustee from the duties it is
required to perform under this Series Supplement. Any unpaid, unreimbursed or
unindemnified amounts shall not be borne by the Trust and shall not constitute a
claim against the Trust, but shall be borne by the Trustee in its individual
capacity, and the Trustee shall have no recourse against the Trust with respect
thereto.
Section 14. Modification or Amendment. The Trustee shall not enter into any
modification or amendment of the Agreement or this Series Supplement unless such
modification or amendment is in accordance with Section 10.1 of the Agreement.
Pursuant to Section 5 of this Series Supplement, the Depositor may sell to the
Trustee additional Term Assets from time to time without violation or trigger of
this Section 14.
Section 15. Accounting. Notwithstanding Section 3.16 of the Agreement,
Independent Public Accountants' Administration Report, no such accounting
reports shall be required. Pursuant to Section 4.2 of the Agreement, Reports to
Certificateholders, the Trustee shall cause the statements to be prepared and
forwarded as provided therein.
Section 16. 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.
Section 17. No Event of Default. There shall be no Events of Default
defined with respect to the Certificates.
Section 18. 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 Structured Products Corp., 000 Xxxxxxxxx Xxxxxx, 0xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Secretary, or such other address as
may hereafter be furnished to the Trustee in writing by the Depositor, and (ii)
in the case of the
11
Trustee, to U.S. Bank Trust National Association, 000 Xxxx Xxxxxx, Xxxxx 0000,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust, facsimile number (212)
809-5459, 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 under Section
10.07, Notice to Rating Agency, of the Agreement or otherwise, such notices
shall be mailed or delivered as provided in Section 10.07, Notice to Rating
Agency, to: Standard & Poor's Ratings Services, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000; and Xxxxx'x Investors Service, Inc., Structured Derivative Products,
00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; or such other address as the Rating
Agency may designate in writing to the parties hereto.
(c) In the event a Payment Default or an Acceleration occurs, the Trustee
shall promptly give notice to the Depositary or, for any Certificates which are
not then held by the Depositary or any other depository, directly to the
registered holders of the Certificates thereof. Such notice shall set forth (i)
the identity of the issue of Term Assets, (ii) the date and nature of such
Payment Default or Acceleration, (iii) the principal amount of the interest or
principal in default, (iv) the Certificates affected by the Payment Default or
Acceleration, and (v) any other information which the Trustee may deem
appropriate.
(d) Notwithstanding any provisions of the Agreement to the contrary, the
Trustee shall deliver all notices or reports required to be delivered to or by
the Trustee or the Depositor to the Certificateholders without charge to such
Certificateholders.
Section 19. Access to Certain Documentation. Access to documentation
regarding the Term Assets will be afforded without charge to any
Certificateholder so requesting pursuant to Section 3.17 of the Agreement,
Access to Certain Documentation. 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 20. Advances. There is no Administrative Agent specified herein;
hence no person (including the Trustee) shall be permitted or obligated to make
Advances as described in Section 4.3 of the Agreement, Advances.
Section 21. Ratification of Agreement. With respect to the Series issued
hereby, the Agreement (including the grant of a security interest in Section
10.8 of the Agreement with respect to the Term Assets conveyed hereunder), as
supplemented by this Series Supplement, is in all respects ratified and
confirmed and the 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 Agreement and this Series
Supplement, the terms of this Series Supplement shall govern.
Section 22. 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.
12
Section 23. Governing Law. This Series Supplement and each Certificate
issued hereunder shall be governed by and construed in accordance with the laws
of the State of New York applicable to agreements made and to be performed
entirely therein without reference to such State's principles of conflicts of
law to the extent that the application of the laws of another jurisdiction would
be required thereby, and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
Section 24. Reserved.
Section 25. Certificate of Compliance. The Depositor shall deliver to the
Trustee on or prior to June 30 of each year prior to a Trust Termination Event
the Officer's Certificate as to compliance as required by Section 6.1(b) of the
Base Trust Agreement.
13
IN WITNESS WHEREOF, the parties hereto have caused this Series Trust
Agreement to be executed by their respective duly authorized officers as of the
date first above written.
STRUCTURED PRODUCTS CORP.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Authorized Signatory
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------
Responsible Officer
EXHIBIT A
IDENTIFICATION OF THE TERM ASSETS AS OF CLOSING DATE
Issuer: PECO Energy Capital Trust III
Term Assets: 7.38% Capital Trust Pass-Through
Securities due April 6, 2028
Maturity Date: April 6, 2028
Original Principal Amount Issued: $78,105,000
CUSIP No.: 00000XXX0
Stated Interest Rate: 7.38% per annum
Interest Payment Dates: April 30 and October 31, except
that the final interest payment
date shall be on April 6, 2028
Tax Event The Term Assets are redeemable, in
Redemption; whole or in part, at any time by
Investment Company PECO Energy Capital, L.P. if
Event Redemption: certain adverse tax events occur
with respect to PECO Energy
Capital, L.P. or PECO Energy
Company. The Term Assets are
redeemable, in whole but not in
part, at any time by PECO Energy
Capital, L.P. if a determination is
made that PECO Energy Capital, L.P.
is or will become an investment
company under the Investment
Company Act of 1940, as amended.
Principal Amount of Underlying
Capital Securities Deposited
Under Trust Agreement: $27,500,000
The Term Assets will be held by the Trustee as book-entry credits to an account
of the Trustee or its agent at The Depository Trust Company, New York, New York
("DTC").
A-1
EXHIBIT B
TERMS OF THE CERTIFICATES AS OF CLOSING DATE
Maximum Number of CorTS(R)
Certificates Up to 1,014,750
Aggregate Principal Amount
of CorTS(R)Certificates: $25,368,750
Authorized Denomination: $25 and integral multiples thereof
Rating Agencies: Standard & Poor's Ratings Services,
and Xxxxx'x Investors Service, Inc.
Closing Date: January 19, 2001
Distribution Dates: April 30 and October 31, the Maturity
Date, any Term Assets Redemption
Distribution Date or any Term Assets
Default Distribution Date.
Interest Rate: 8.0% (subject to deferral of interest)
Maturity Date: April 6, 2028
Record Date: With respect to any Distribution
Date, the day immediately preceding
such Distribution Date.
Trustee's Fees: The Trustee's fees shall be payable
by the Depositor pursuant to a
separate fee agreement between the
Trustee and the Depositor.
Initial Certificate Registrar: U.S. Bank Trust National Association
Corporate Trust Office: U.S. Bank Trust National Association
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust
Department, Regarding CorTS(R)Trust
For PECO Energy Capital Trust III
B-1
EXHIBIT C
FORM OF CERTIFICATES
THIS CERTIFICATE REPRESENTS AN 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.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC") OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
CERTIFICATE NUMBER R-1 1,014,750 Certificates
CUSIP: $25,368,750 Certificate Principal Amount
CORTS(R) CERTIFICATES
evidencing an undivided interest in the Trust, as defined below, the assets of
which include PECO Energy Capital Trust III 7.38% Capital Trust Pass-Through
Securities due April 6, 2028.
This Certificate does not represent an interest in or obligation of the
Depositor or any of its affiliates.
THIS CERTIFIES THAT Cede & Co. is the registered owner of a nonassessable,
fully-paid, fractional undivided interest in CorTS(R)Trust For PECO Energy
Capital Trust III (the "Trust") formed by Structured Products Corp., as
depositor (the "Depositor").
The Trust was created pursuant to a Base Trust Agreement, dated as of
December 15, 2000 (as amended and supplemented, the "Agreement"), between the
Depositor and U.S. Bank Trust National Association, a national banking
association, not in its individual capacity but solely as Trustee (the
"Trustee"), as supplemented by the CorTS(R) Supplement 2001-1, dated as of
January 19, 2001 (the "Series Supplement" and, together with the 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
C-1
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
"CorTS(R) Certificates" (herein called the "Certificate" or "Certificates").
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Trust Agreement the Holder of this
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound. The assets of the Trust include the Term Assets and all proceeds of
the Term Assets. Additional Term Assets may be sold to the Trustee and
additional Certificates may be authenticated and delivered from time to time as
provided in the Trust Agreement, which additional Certificates shall rank pari
passu with all other Certificates issued in accordance with the Series
Supplement.
Under the Trust Agreement, there shall be distributed on the dates
specified in the Trust Agreement (a "Distribution Date"), to the person in whose
name this Certificate is registered at the close of business on the related
Record Date, such Certificateholder's fractional undivided interest in the
amount of distributions of the Term Assets to be distributed to
Certificateholders on such Distribution Date. Unless an Extension Period is in
effect, the Term Assets will pay interest on April 30 and October 31 of each
year with the next interest payment date occurring on April 30, 2001, except
that the final payment of interest will be on April 6, 2028. The principal of
the Term Assets is scheduled to be paid on April 6, 2028.
The distributions in respect of this Certificate are payable in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts as set forth in the Series Trust
Agreement.
It is the intent of the Depositor and the Certificateholders that the Trust
will be classified as a grantor trust under subpart E, Part I of subchapter J of
the Internal Revenue Code of 1986, as amended. Except as otherwise required by
appropriate taxing authorities, the Depositor and the Trustee, by executing the
Trust Agreement, and each Certificateholder, by acceptance of a Certificate,
agrees to treat, and to take no action inconsistent with the treatment of, the
Certificates for such tax purposes as interests in a grantor trust and the
provisions of the Trust Agreement shall be interpreted to further this intention
of the parties.
Each Certificateholder, by its acceptance of a Certificate, covenants and
agrees that such Certificateholder shall not, prior to the date which is one
year and one day after the termination of the Trust Agreement, acquiesce,
petition or otherwise invoke or cause the Depositor to invoke the process of any
court or governmental authority for the purpose of commencing or sustaining a
case against the Depositor under any federal or state bankruptcy, insolvency,
reorganization or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Depositor or
any substantial part of its property, or ordering the winding up or liquidation
of the affairs of the Depositor.
The Trust Agreement permits the amendment thereof, in certain
circumstances, without the consent of the Holders of any of the Certificates.
C-2
Unless the certificate of authentication hereon shall have been executed by
an authorized officer 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.
A copy of the Trust Agreement is available upon request and all of its
terms and conditions are hereby incorporated by reference and made a part
hereof.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
C-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed by its manual or facsimile signature.
U.S. BANK TRUST NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Trustee and
Authenticating Agent
By:
--------------------------------
Authorized Signatory
