EXHIBIT 99.1
Form of Prospectus Supplement
SUBJECT TO COMPLETION, DATED ___________, 1998
Prospectus Supplement
(To Prospectus Dated ________,1998)
AMERICAN CORPORATE RECEIPTS, INC.
AMERICAN CORPORATE RECEIPTS, SERIES ____
RELATING TO
[NAME OF OBLIGOR]
___% BONDS SERIES ______ DUE ____
COUPON RECEIPTS AND
CALLABLE PRINCIPAL RECEIPTS1
DUE _______ __, ____ OR UPON EARLIER REDEMPTION
American Corporate Receipts, Series ____ (the "Receipts"), evidence
ownership of future interest and principal payments due on the ____ % Bonds
Series ____ Due ____ (the "Bonds") issued by [Name of Obligor] (the "Obligor").
The Receipts consist of Coupon Receipts and Callable Principal Receipts relating
initially to $_________ aggregate principal amount (out of $_______________
aggregate principal amount originally issued in _______ 19____) of the Bonds, as
purchased by American Corporate Receipts, Inc. (the "Depositor") from Rickel
Securities, Inc. ("Rickel"), an affiliate of the Depositor, which acquired the
Bonds in the secondary market. The Bonds provide for [semi-annual] interest
payments due on _______ and ________ of each year ("Interest Payments") and for
a single payment of principal, together with any related premium payable upon
redemption, due on the earlier of ______, ___, or the date on which the Bonds
are redeemed by the Obligor (the "Callable Principal Payment"). No payment will
be made on any Receipt prior to the due date of the corresponding Interest
Payment or the due date of the Callable Principal Payment at maturity or upon
redemption of the Bonds. Each Callable Principal Receipt also includes the right
to receive any redemption premium and any related Interest Payments made after
__________, ___ (the "First Call Date") on a Bond. The Bonds will be held on
behalf of the purchasers of the related Receipts, as the beneficial owners
thereof (each, a Holder), by ________________, as trustee (the "Trustee"),
pursuant to a Trust Agreement, dated as of _______ __, ______, between the
Depositor and the Trustee (the "Trust Agreement").
THE RECEIPTS ARE ZERO COUPON OBLIGATIONS AND DO NOT ENTITLE THE
HOLDERS THEREOF TO ANY PERIODIC PAYMENT OF INTEREST, EXCEPT AFTER THE FIRST CALL
DATE UNDER THE CIRCUMSTANCES DESCRIBED HEREIN WITH RESPECT TO THE CALLABLE
PRINCIPAL RECEIPTS ONLY.
The Receipts are being offered in registered form. The Receipts are
being offered initially in book entry form only through The Depository Trust
Company, New York, New York ("DTC"), and purchasers will not receive
Certificates representing their ownership of the
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1 This Exhibit has been prepared assuming that Callable Principal Receipts,
rather than Principal Receipts, will be issued with respect to this hypothetical
series.
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Receipts. See "CERTAIN INFORMATION REGARDING THE RECEIPTS - Book-Entry
Registration" in the Prospectus. The Receipts will be delivered in face amounts
of $1,000 and multiples thereof.
SEE "RISK FACTORS" HEREIN FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD CAREFULLY BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE RECEIPTS.
THE RECEIPTS WILL BE OFFERED AT SUBSTANTIAL DISCOUNTS FROM THEIR
NOTIONAL OR FACE AMOUNTS. SEE "RISK FACTORS" HEREIN FOR A DISCUSSION OF PRICE
VOLATILITY OF THE RECEIPTS AND "FEDERAL INCOME TAX CONSEQUENCES" IN THE
PROSPECTUS FOR A DISCUSSION OF FEDERAL INCOME TAX CONSIDERATIONS, INCLUDING
IMPLICATIONS OF ORIGINAL ISSUE DISCOUNT AND POSSIBLE TAX WITHHOLDING.
There is currently no secondary market for the Receipts offered
hereby. Rickel Securities, Inc., as underwriter (in such capacity, the
"Underwriter"), intends to make a secondary market in the Receipts but has no
obligation to do so. There can be no assurance that a secondary market in the
Receipts will develop or, if it does develop, that it will be maintained. See
"Risk Factors."
THIS PROSPECTUS SUPPLEMENT DOES NOT PROVIDE DETAILED INFORMATION
WITH RESPECT TO THE OBLIGOR. IN THE EVENT OF A DEFAULT ON A BOND, THE RISK OF
LOSS LIES ENTIRELY WITH THE HOLDERS OF THE RELATED RECEIPTS. THE OBLIGOR IS NOT
AFFILIATED WITH THE DEPOSITOR NOR IS THE OBLIGOR INVOLVED IN THIS OFFERING OF
RECEIPTS. SEE "RISK FACTORS" HEREIN AND "AVAILABLE INFORMATION REGARDING THE
OBLIGORS" IN THE PROSPECTUS. NO CREDIT ENHANCEMENT (IN THE FORM OF
OVER-COLLATERALIZATION, INSURANCE OR GUARANTEES) WILL BE AVAILABLE TO SUPPLEMENT
PAYMENTS MADE ON THE BONDS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Receipts will be offered from time to time by the Underwriter in
negotiated transactions or otherwise at fixed or varying prices to be determined
at the time of sale.
The Prospectus Supplement should be retained for future reference.
RICKEL SECURITIES, INC.
The date of this Prospectus Supplement is _____________ ___,
_______.
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This Prospectus Supplement does not contain complete information
about the Receipts offered hereby. Additional information is contained in the
Prospectus, and purchasers are urged to read both this Prospectus Supplement and
the Prospectus in full. Sales of the Receipts may not be consummated unless the
purchaser has received both this Prospectus Supplement and the Prospectus.
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IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR
EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICES OF THE RECEIPTS
AT LEVELS ABOVE THOSE THAT MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
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RISK FACTORS
A prospective purchaser of the Receipts should be aware of the
following factors in evaluating the merits and risks of an investment therein.
1. PRICE VOLATILITY OF ZERO COUPON OBLIGATIONS AND
POSSIBILITY OF LOSS. The purchase at a discount of a Receipt will
likely result in greater price volatility than the purchase of an
obligation of a similar maturity which pays interest periodically.
The Receipts are zero coupon obligations. The market prices of zero
coupon obligations, such as those represented by Receipts, are
particularly sensitive to fluctuations in market interest rates.
Thus, when market interest rates rise, absent other factors such as
changes in the perceived creditworthiness of the Obligor on the
underlying Bonds, there will be a sharp percentage fall in the
market price of Coupon Receipts relative to coupon bearing
instruments of a similar maturity. The market prices of Callable
Principal Receipts will be subject to similar volatility. Investors
should consider whether such potential secondary market price
volatility is in accordance with their investment needs.
2. NO DETAILED INFORMATION ABOUT OBLIGOR. This
Prospectus Supplement does not provide detailed information with
respect to the Obligor. See "AVAILABLE INFORMATION REGARDING THE
OBLIGORS" in the Prospectus.
3. OBLIGOR IS ONLY PAYMENT SOURCE. Proceeds of the Bonds
held by the Trust are the sole source of payment for the Receipts.
The Bonds may be subject to laws permitting bankruptcy, moratorium,
reorganization or other actions which, in the event of financial
difficulties of the Obligor, could result in delays in payment or in
non-payment of the Bonds and consequently late payment or
non-payment of Receipts. In certain cases, the bankruptcy,
reorganization or moratorium could result in non-payment of one or
more Coupon Receipts while the related Callable Principal Receipts
are paid in part or in full.
4. LACK OF AFFILIATION BETWEEN THE OBLIGOR AND THE
DEPOSITOR. The Depositor is not affiliated with the Obligor and,
although the Depositor has no knowledge of any event that would have
a material adverse effect on the Obligor, any such event is beyond
the Depositor's ability to control and may be difficult to predict.
The Obligor is not involved in the offering of the
receipts and has no obligation with respect to the receipts,
including any obligation to take the needs of the Depositor or of
holders of the receipts into consideration for any reason. The
Depositor will not receive any of the proceeds of this Offering and
is not responsible for, and has not participated in, the
determination of the timing of, prices for, or quantities of, the
receipts to be issued in this Offering or in the determination or
calculation of the principal amount to be paid at maturity. The
Obligor is not involved with the administration, marketing or
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trading of the receipts and has no obligations with respect to the
principal amount to be paid to holders of receipts at maturity.
5. NO ASSURANCE OF LIQUIDITY. There is no assurance that
any secondary market will develop or be maintained for any Receipt.
While Rickel intends to maintain a secondary market for Receipts, it
is not obligated to do so. There can be no assurance that a
secondary market in the Receipts will develop or, if it does
develop, that it will remain in existence for any period of time.
The absence of a secondary market would adversely affect the
liquidity of the Receipts. Even if such a secondary market develops,
the secondary market for securities of a type similar to the
Receipts has at times been characterized by high volatility, with
widely disparate price quotes and wide spreads between bid and asked
prices. Such secondary market conditions may create difficulties for
investors who need to obtain timely daily price quotes with respect
to the Receipts or for investors who wish to dispose of Receipts.
6. CERTAIN TAX CONSIDERATIONS. Under Section 1286 of the
Code, the separation of the right to receive principal payments on a
bond from the right to receive interest payments on the bond results
in the creation of a "stripped bond" (with respect to the principal
payments) and "stripped coupons" (with respect to the interest
payments). As a result of the separation of the interest component
of a Bond from the principal component, the resulting Receipts will
be treated for tax purposes as being issued on the purchase date
with original issue discount ("OID"). Under the relevant tax rules,
OID accrues for tax purposes on a daily basis over the term of the
Receipt. It is essential that each potential purchaser of Receipts
understand that OID accrues (and taxable income results) in any year
REGARDLESS OF WHETHER ANY CASH PAYMENT IS MADE to the Holder with
respect to the Receipt or Receipts that he, she or it holds.
Consequently, Holders of Receipts who are subject to income taxation
are likely to recognize taxable income in the form of accrued OID in
tax years when they receive NO CASH DISTRIBUTIONS with respect to
the Receipts. Any purchaser of Receipts must consider whether he,
she or it has the cash resources to meet the tax obligations
resulting from the accrual of OID with respect to the Receipts in
taxable years when no cash will be distributed with respect to the
Receipts.
7. BONDS SUBJECT TO REDEMPTION. The Bonds are subject to
redemption prior to maturity at the option of the Obligor on or
after the First Call Date, in whole or in part. Such redemption will
cause the retirement of all or a pro rata portion of the Callable
Principal Receipts, as applicable. There can be no assurance,
however, that all or any portion of the Callable Principal Receipts
will be redeemed on the First Call Date, or on any other date prior
to their maturity.
8. RATING OF THE RECEIPTS. It is a condition to the
issuance of any series of Receipts that they be rated by a
nationally recognized statistical rating organization (such as
Moody's Investor Service, Inc. ("Moody's") or Standard & Poor's
Corporation ("S&P")) (each, a
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"Rating Agency") in one of its generic rating categories which
signifies investment grade; typically, the four highest rating
categories (within which there may be sub-categories or gradations
indicating relative standing) signify investment grade. For example,
Moody's ratings between Aaa and Baa, and S&P's ratings between AAA
and BBB, signify investment grade. The ratings of any series of the
Receipts by the Rating Agencies address the likelihood of the full
and timely payment of the aggregate face amount of the Receipts.
There is no assurance that any such rating will continue for any
period of time or that it will not be revised or withdrawn entirely
by such Rating Agency if, in its judgment, circumstances (including,
without limitation, the financial health of the issuer of the
underlying Bonds) so warrant. A revision or withdrawal of such
rating may have an adverse effect on the market price of the
Receipts. A security rating is not a recommendation to buy, sell or
hold securities.
THE OBLIGOR
According to publicly available documents, the Obligor, a
______________ corporation, is primarily in the business of ______________. The
Obligor is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended. Accordingly, the Obligor files reports, proxy
statements and other information with the Securities and Exchange Commission.
Copies of such reports, proxy statements and other information may be inspected
and copied at certain offices of the Commission and at the offices of the
[Exchange] [NASD] at the addresses listed under "Available Information" in the
Prospectus.
THIS PROSPECTUS SUPPLEMENT RELATES ONLY TO THE RECEIPTS OFFERED
HEREBY AND DOES NOT RELATE TO ANY SECURITIES OF THE OBLIGOR. ALL DISCLOSURES
CONTAINED IN THIS PROSPECTUS SUPPLEMENT REGARDING THE OBLIGOR ARE DERIVED FROM
THE PUBLICLY AVAILABLE DOCUMENTS DESCRIBED IN THE PRECEDING PARAGRAPH. NEITHER
THE DEPOSITOR NOR THE UNDERWRITER HAVE PARTICIPATED IN THE PREPARATION OF THOSE
DOCUMENTS, OR MADE ANY DUE DILIGENCE INQUIRY WITH RESPECT TO THE INFORMATION
PROVIDED THEREIN. THERE CAN BE NO ASSURANCE THAT ALL EVENTS CURRENT PRIOR TO THE
DATE HEREOF THAT WOULD EFFECT THE OBLIGOR (INCLUDING EVENTS THAT WOULD EFFECT
THE ACCURACY OR COMPLETENESS OF THE PUBLICLY AVAILABLE DOCUMENTS DESCRIBED IN
THE PRECEDING PARAGRAPH) HAVE BEEN PUBLICLY DISCLOSED.
THE RECEIPTS
GENERAL
The Receipts consist of Coupon Receipts evidencing ownership of
future interest payments ("Interest Payments") and Callable Principal Receipts
evidencing ownership of future payments of principal and redemption premium, if
any ("Callable Principal Payments"), and all Interest Payments due after the
First Call Date and prior to redemption or maturity. Payments of interest and
principal will come solely from payments of principal, interest and premium, if
any, on the Bonds made by the Obligor. An investor purchasing Receipts should
avail itself of the
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same information concerning the Obligor as it would if it were purchasing Bonds.
See "AVAILABLE INFORMATION REGARDING THE OBLIGORS" in the Prospectus.
Each Coupon Receipt is payable on or after the due date of the
corresponding Interest Payment on the Bonds, subject to receipt thereof by the
Trustee. The principal portion of each Callable Principal Receipt and any
redemption premium is payable on or after the earlier of the due date of the
corresponding Callable Principal Payment, which is the maturity date of the
Bonds, and the date on which the Bonds are redeemed by the Obligor, subject to
receipt of such principal and any redemption premium by the Trustee. Each
Callable Principal Receipt includes the right to receive Interest Payments due
on each _____ and _____ occurring after the First Call Date up to and including
the maturity date of the Bonds or the date on which the Bonds are redeemed by
the Obligor. No Interest Payments will be made on Callable Principal Receipts
after any such redemption. The face amount of each Receipt will be equal to the
payment or payments to be received thereon, except that the face amount of
Callable Principal Receipts will not include (i) the amount of any redemption
premium which would be paid in the event of a redemption prior to maturity or
(ii) any Interest Payments which may be made if the underlying Bonds are not
called for redemption on the First Call Date. See "Redemption of Bonds
Underlying Callable Principal Receipts."
The Receipts are being offered at substantial discounts from their
face amounts. See "FEDERAL INCOME TAX CONSEQUENCES" in the Prospectus for a
discussion of income tax consequences.
Pursuant to the Trust Agreement, the Bonds underlying the Receipts
will be held by the Trustee for the benefit of the Holders in the form of
physical Receipts or as book-entry credits to an account of the Trustee at DTC.
The Obligor is not a party to the Trust Agreement. Each Holder of a Receipt, by
its acceptance thereof, agrees to be bound by the terms and conditions of the
Trust Agreement.
THE RECEIPTS OFFERED HEREBY ARE DIFFERENT FROM, AND NOT EXCHANGEABLE
FOR, ANY OTHER SERIES OF RECEIPTS OR ANY OTHER RECEIPT OR CERTIFICATE EVIDENCING
OWNERSHIP OF FUTURE INTEREST, PRINCIPAL AND PREMIUM, IF ANY, PAYMENTS DUE ON
OBLIGOR OBLIGATIONS, AND ARE SUBJECT TO THE TERMS AND CONDITIONS OF THE TRUST
AGREEMENT.
The Receipts will be delivered in registered form. The Receipts are
being offered initially in book entry form only through DTC, in face amounts of
$1,000 and multiples thereof, and purchasers will not receive physical Receipts
representing their ownership of Receipts.
THE BONDS
The following description has been obtained from the Obligor's
Registration Statement on Form S-__ dated _______ __, ____ (No. 33-______)
pursuant to which the Bonds were originally offered and sold to the public. The
following summary of certain provisions of the Indenture (as defined below) and
the Bonds does not purport to be complete, and such descriptions are qualified
in their entirety by reference to all of the provisions of the Indenture
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and the Bonds, as the case may be (including in each case the definitions
therein of certain terms). Although the Depositor believes that the descriptions
contained herein are accurate, the Depositor has not independently confirmed the
accuracy of each of the statements made herein.
GENERAL
The Bonds have been issued under an Indenture dated (the
"Indenture"), between the Obligor and ____________, as the trustee (the "Bond
Trustee").
Interest on the Bonds will be payable [semi-annually] on
____________ and _____________. The Bonds will mature on ______________ __, ,
unless redeemed earlier at the option of the Obligor.
The Bonds are not secured by the assets of the Obligor or otherwise
and do not have the benefit of a sinking fund for the retirement of principal.
Only capital stock of the Obligor is junior in right of payment to the Bonds.
REDEMPTION AT THE OPTION OF THE OBLIGOR
The Bonds are redeemable at the option of the Obligor, in whole or
in part, at any time after ________, _____, and in certain circumstances,
sooner, on not less than 30 days notice, at an initial redemption price equal to
________________, declining in equal annual increments to ____% in the tenth
year together with accrued interest to the redemption date.
SUBORDINATION
The principal and premium, if any, and interest on the Bonds will be
subordinated and junior in right of payment to the prior payment in full of all
Senior Indebtedness of the Obligor. Senior Indebtedness is defined as any and
all indebtedness of the Obligor except any particular indebtedness which
expressly provides in the instrument creating such indebtedness that such
indebtedness shall be subordinate or rank pari passu in right of payment of the
Bonds. Upon any distribution of assets of the Obligor in connection with any
dissolution, winding up, liquidation, reorganization, bankruptcy or other
similar proceeding relative to the Obligor, holders of all Senior Indebtedness
will first be entitled to receive payment in full before any distribution to the
holders of the Bonds. No direct or indirect payment may be made by the Obligor
of principal, premium or interest on the Bonds and no Bonds may be acquired by
the Obligor for cash or property if at the time of such payment or acquisition
there exists a default in the payment of all or part of principal, premium or
interest on any Senior Indebtedness and such default has not been cured or
unless the effect of this provision has been waived by the holders of such
Senior Indebtedness.
RESTRICTIONS ON SALE OF ASSETS
The Indenture also provides that the Obligor will not sell, assign,
transfer, or otherwise dispose of any Capital Stock of any subsidiary or
securities convertible into, or options, warrants, or rights to subscribe for or
to purchase any Capital Stock of any such subsidiary, except for (i)
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sales on other dispositions made to qualify a person to serve as a director of
any such subsidiary; (ii) sales or other dispositions of fair market value in
cash (as determined by the Board of Directors of the Obligor) if, after giving
effect hereto and assuming conversion of any convertible securities, the Obligor
will own not less than 80% of the Capital Stock of such subsidiary; (iii) sales
or other dispositions in connection with a merger or consolidation as to which
the Obligor will have the same or greater proportionate ownership in the
resulting or surviving entity than that which it had in such subsidiary; (iv)
sales or other dispositions made in compliance with an order of a court or
regulatory authority of competent jurisdiction; or (v) any sale by any
subsidiary of shares of its Capital Stock to the Obligor.
MERGER, CONSOLIDATION OR SALE OF ASSETS; SUCCESSOR CORPORATION
The Obligor has agreed that it will not merge or consolidate with,
or sell all or substantially all of its assets to, any person, firm or
corporation unless it is the surviving corporation in such transaction and,
immediately thereafter, is not in default under the Indenture or, if it is not
the surviving corporation, the successor corporation expressly assumes the
Obligor's obligations under the Indenture and, immediately after such
transaction, the successor corporation is not in default under the Indenture.
Any successor corporation shall assume by supplemental indenture all of the
obligations of the Obligor under the Bonds and the Indenture.
EVENTS OF DEFAULT
Under the Indenture, an "Event of Default" on the Bonds occurs if:
(i) the Obligor defaults in the payment of interest on the Bonds
when the same becomes due and the default continues for a period of 30 days,
whether or not such payments shall be prohibited by the provisions of the
Indenture;
(ii) the Obligor defaults in the payment of the principal of (or
premium, if any, on) the Bonds when the same becomes due and payable at
maturity, upon acceleration, redemption or otherwise, whether or not such
payment shall be prohibited by the provisions of the Indenture;
(iii) the Obligor fails to comply with any of its agreements or
covenants in, or provisions of, or the Indenture, and the default continues for
the period and after the notice specified below;
(iv) a final judgment or final judgments for the payment of money
are entered by a court or courts of competent jurisdiction against the Obligor
or its subsidiaries which remain undischarged and unbonded for a period (during
which execution shall not be effectively stayed) of 60 days and have not been
appealed, provided that the aggregate of all such judgments (to the extent not
paid or covered by insurance) exceeds $3,000,000;
(v) the Obligor or any subsidiary or subsidiaries, pursuant to or
within the meaning of any Bankruptcy Law:
(A) commences a voluntary case or proceeding,
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(B) consents to the entry of an order for relief against it in an
involuntary case or proceeding,
(C) consents to the appointment of a Custodian of it or for all
substantially all of its property,
(D) makes a general assignment for the benefit of its creditors,
or
(E) generally is not paying its debts as the same becomes due
unless such debts are the subject of a bona fide dispute; or
(vi) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Obligor or any subsidiary or
subsidiaries in an involuntary case or proceeding,
(B) appoints a Custodian of the Obligor or any subsidiary or
subsidiaries or for all or substantially all of its property;
or
(C) orders the liquidation of the Obligor or any subsidiary or
subsidiaries; and
in each case the order or decree remains unstayed and in effect for 60 days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator, sequestrator or similar official under
any Bankruptcy Law.
A default under clause (iii) above is not an Event of Default until
the Bond Trustee notifies the Obligor in writing, or the Holders of at least 25%
in principal amount of the Bonds then outstanding notify the Obligor and the
Bond Trustee in writing, of the default, and the Obligor does not cure the
Default within 30 days after receipt of the notice. The notice must specify the
default, demand that it be remedied and state that the notice is a "Notice of
Default". Such notice shall be given by the Bond Trustee if so requested in
writing by the Holders of at least 25% in principal amount of the Bonds then
outstanding. Any notice required to be delivered by the Bond Trustee to the
Obligor shall be given promptly after the Bond Trustee becomes aware of such
Default or is requested by the Holders to deliver such notice.
MODIFICATION AND WAIVER
The Obligor may omit in any particular instance to comply with any
covenant or condition as set forth in the Indenture if before the time for such
compliance the holders of 66 2/3% in aggregate principal amount of the Bonds at
the time outstanding shall either waive such compliance in such instance or
generally waive compliance with such covenant or condition, but no such waiver
may extend to or affect such covenant or condition except to the extent so
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expressly waived, and, until such waiver has become effective, the obligations
of the Obligor and the duties of the Bond Trustee in respect of any such
covenant will remain in full force and effect. No Supplemental Indenture will
affect the seniority rights of the holders of Senior Indebtedness without the
consent of such holders.
Most of the terms of the Indenture and the Bond may be modified with
the written consent of two-thirds of the Holders. However, each holder must
agree to an extension of maturity, a reduction in conversion price or redemption
percentage or a reduction in the aforesaid percentage required for modification.
THE TRUSTEE
_________________ will act as Trustee under the Trust Agreement. The
designated office of the Trustee for the transfer, exchange or withdrawal of
Receipts is ______________, New York, New York. Notwithstanding the foregoing,
under the DTC Book Entry Only System, transfers and exchange of Receipts will be
accomplished as described under "Certain Information Regarding the Receipts -
Book-Entry Registration" in the Prospectus.
Any Holder presenting Receipts for surrender or registration of
transfer or exchange may be required to file such proof of residence, or other
matters or information, to execute such certificates and to make such
representations and warranties and such assurances, including a signature
guaranty, as the Trustee may reasonably deem necessary or proper. The Trustee
may withhold the delivery or delay the surrender of a registration of transfer
or exchange of any Receipts until such proof or other information is filed, such
receipts are executed or such representations and warranties are made.
THE OFFERING
The Receipts will be transferred by the Depositor to Rickel
Securities, Inc. in exchange for the Bonds, and there will be no cash proceeds
received by the Depositor from the sale of the Receipts. Rickel Securities, Inc.
has purchased each Bond in the secondary market at a price that is lower than
the aggregate price expected to be realized by Rickel Securities, Inc. from its
sale of the Coupon Receipts and Callable Principal Receipts related to such
Bond. The difference between the price paid by Rickel Securities, Inc. to
purchase each Bond in the secondary market and the aggregate proceeds to be
realized by Rickel Securities, Inc. from the sale of the Receipts related to
such Bond, less costs and expenses, represents underwriting compensation to
Rickel Securities, Inc. No other remuneration will be received by Rickel
Securities, Inc. or the Depositor in connection with the offering.
The Receipts are being offered and sold by Rickel Securities, Inc.
pursuant to this Prospectus Supplement in negotiated transactions with
investors. The actual price of the Receipts will be determined at the times of
such sales and are expected to vary for different Receipts.
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The obligation of Rickel Securities, Inc. to deliver the Receipts is
subject to certain conditions, including, among others, the receipt of certain
legal opinions described in the Prospectus.
Prior to the Offering, there has been no public market for the
Receipts and no assurance can be given that such a market will develop as a
result of this offering.
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COUPON RECEIPTS
ITEM CUSIP AGGREGATE FACE
NUMBER DUE DATE NUMBER AMOUNT OFFERED
CALLABLE PRINCIPAL RECEIPTS
ITEM CUSIP AGGREGATE FACE
NUMBER DUE DATE NUMBER AMOUNT OFFERED
FIRST CALL DATE
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