OFFERING CIRCULAR DATED NOVEMBER 25,1997
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BAYERISCHE LANDESBANK
REPACKAGED
BRAVO TRUST
SERIES 1997-1 ASSET
VEHICLE
OBLIGATIONS
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BRAVO Trust Series 1997-1 (the "Trust") will be a newly formed,
limited purpose Delaware business trust formed pursuant to a Declaration of
Trust and Trust Agreement (the "Trust Agreement") under which The Bank of New
York (together with any successor trustee, the "Trustee") will act as trustee
for the benefit of the beneficial owners (the "Owners") of the Trust
Certificates (the "Trust Certificates") described below. The Trust
Certificates will represent two classes of undivided interests in the Trust.
The two classes are designated "Class A Trust Certificates" and "Class B
Trust Certificates" and are referred to herein collectively as the "Trust
Certificates". Each Trust Certificate will be sold in amounts and on terms as
designated in the Supplement to this Offering Circular (the "Supplement").
The Trust will be formed for the primary purpose of acquiring the financial
instrument designated in the Supplement (the "Financial Instrument") and
issuing the related Trust Certificates. The Trust Certificates will represent
the right to receive specified payments from the Trust based upon periodic
payments to be received by the Trust under the Financial Instrument in the
manner described herein and in the Supplement.
Subject to timely receipt by the Trust of payments under the Financial
Instrument, interest payments on the Trust Certificates will be distributed to
each class of Owners at such times and in such manner as described in the
Supplement. Subject to timely receipt by the Trust of payments under the
Financial Instrument, principal payments on the Trust Certificates will be
distributed at such times and in such manner as is described in the Supplement.
As provided in the Supplement, Trust Certificates will be represented either by
one or more global trust certificates (the "Global Trust Certificates"),
registered in the name of the Depository Trust Company ("DTC") or its nominee
and deposited with DTC, or by certificates issued in definitive form ("Physical
Certificates"). An interest in a Global Trust Certificate will be shown only on,
and transfers thereof will be effected only through, records maintained by DTC
and its participants. Each Owner will be entitled to receive its proportionate
share of the foregoing distributions subject to such distinction as shall be
made between Owners of Class A Trust Certificates and Class B Trust
Certificates, as described in the Supplement. Only the Class A Trust
Certificates are being offered hereby.
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THE TRUST CERTIFICATES REPRESENT BENEFICIAL INTERESTS IN THE TRUST
ONLY AND DO NOT REPRESENT OBLIGATIONS OF OR INTERESTS
IN THE DEALER, THE ISSUER OF THE FINANCIAL
INSTRUMENT OR ANY OF THEIR AFFILIATES.
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THE TRUST CERTIFICATES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND THE TRUST HAS NOT BEEN REGISTERED
UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED.
SEE "NOTICE TO INVESTORS" HEREIN.
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LEHMAN BROTHERS INC.
Dealer
Each Owner must be a qualified institutional buyer, as such term is
defined in Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act"). Transfers of Class A Trust Certificates may be effected
pursuant to Rule 144A, or other exemption from registration, under the
Securities Act, subject to the restrictions described herein. See "Description
of the Trust Certificates--Holding and Transfer of Class A Trust Certificates".
There is currently no secondary market for the Class A Trust Certificates and
there can be no assurances that one will develop or, if one does develop, that
it will continue. Lehman Brothers Inc. (the "Dealer", the "Remarketing Agent",
or "Lehman Brothers") has entered into a remarketing arrangement, as described
in the Supplement.
The Class A Trust Certificates will be purchased by the Dealer from
the Trust and offered by the Dealer subject to prior sale, when, as and if
issued and subject to acceptance by the Dealer and approval of certain legal
matters by counsel for the Trust and certain other conditions, at the initial
offering price (the "Offering Price") per Class A Trust Certificate and with a
minimum subscription, both as set forth in the Supplement. This Offering
Circular may not be used to consummate sales of Class A Trust Certificates
unless accompanied by the Supplement. Lehman Brothers reserves the right to
offer the Class A Trust Certificates at a price different from the Offering
Price at any time. See "Offering and Sale".
The rating of the Class A Trust Certificates is set forth in the
Supplement.
NOTICE TO INVESTORS
THE TRUST CERTIFICATES (THE "TRUST CERTIFICATES") OF THE BRAVO TRUST SERIES
1997-1 (THE "TRUST") HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS. THE TRUST HAS NOT BEEN
REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE "INVESTMENT
COMPANY ACT"), IN RELIANCE UPON AN EXCEPTION TO REGISTRATION THEREUNDER. THE
TRUST CERTIFICATES ARE BEING OFFERED ONLY TO "QUALIFIED INSTITUTIONAL BUYERS" AS
DEFINED IN AND IN RELIANCE ON RULE 144A UNDER THE SECURITIES ACT ("QUALIFIED
INSTITUTIONAL BUYERS").
THE CLASS A TRUST CERTIFICATES WILL BE EVIDENCED BY GLOBAL TRUST CERTIFICATES
(THE "GLOBAL TRUST CERTIFICATES") AND THE CLASS B TRUST CERTIFICATES WILL BE
EVIDENCED BY PHYSICAL CERTIFICATES. EACH GLOBAL TRUST CERTIFICATE WILL BE IN
FULLY REGISTERED FORM WITHOUT COUPONS, DEPOSITED WITH A CUSTODIAN FOR AND
REGISTERED IN THE NAME OF A NOMINEE OF THE DEPOSITORY TRUST COMPANY ("DTC").
EXCEPT AS DESCRIBED HEREIN, BENEFICIAL INTERESTS IN THE GLOBAL TRUST
CERTIFICATES WILL BE SHOWN ON, AND TRANSFERS THEREOF WILL BE EFFECTED ONLY
THROUGH, RECORDS MAINTAINED BY DTC AND ITS DIRECT AND INDIRECT PARTICIPANTS.
BY ITS PURCHASE OF A TRUST CERTIFICATE EACH INVESTOR WILL BE DEEMED TO HAVE
REPRESENTED TO AND AGREED WITH THE TRUSTEE AND THE DEALER THAT
(A) (I) IT IS A QUALIFIED INSTITUTIONAL BUYER, (II) IT IS AWARE
THAT THE SALE OF THE TRUST CERTIFICATE IS BEING MADE IN
RELIANCE ON RULE 144A AND (III) THE TRUST CERTIFICATE IS
BEING ACQUIRED FOR ITS OWN ACCOUNT (OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER),
(B) ANY RESALE OR OTHER TRANSFER OF THE TRUST CERTIFICATE WILL BE
MADE ONLY (I) TO A PERSON WHO SUCH PURCHASER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER ACQUIRING SUCH
TRUST CERTIFICATE FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION COMPLYING
WITH RULE 144A AND (II) IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER
JURISDICTIONS,
(C) TRANSFERS OF TRUST CERTIFICATES SHALL BE RESTRICTED SO THAT,
UNLESS THE TRUSTEE HAS OBTAINED AN OPINION OF COUNSEL THAT
SUCH TRANSFER WILL NOT RESULT IN THE TRUST BEING TREATED AS
A PUBLICLY TRADED PARTNERSHIP WITHIN THE MEANING OF SECTION
7704(a) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE"), (I) THE TRUST CERTIFICATES OR INTERESTS IN THE
TRUST CERTIFICATES MAY NOT BE OR BECOME TRADEABLE ON AN
"ESTABLISHED SECURITIES MARKET" AS DEFINED IN TREASURY
REGULATION SECTION 1.7704-1(b), (II) ANY TRANSFER THAT
WOULD RESULT IN THERE BEING MORE THAN 100 OWNERS SHALL BE
NULL AND VOID, (III) NO TRUST CERTIFICATE MAY BE HELD BY A
FLOW-THROUGH ENTITY (A PARTNERSHIP, A GRANTOR TRUST, OR AN
S CORPORATION, MORE THAN HALF OF THE ASSETS OF WHICH CONSIST
OF TRUST CERTIFICATES), AND (IV) NO OWNER SHALL HOLD LESS
THAN $5 MILLION FACE AMOUNT OF CLASS A TRUST CERTIFICATES,
AND
(D) IT IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),
OR, IF IT IS, THAT THE ACQUISITION AND HOLDING OF THE
RELEVANT TRUST CERTIFICATES IS IN COMPLIANCE WITH ERISA (FOR
EXAMPLE, SUCH ACQUISITION AND HOLDING ARE IN COMPLIANCE WITH
PROHIBITED CLASS TRANSACTION EXEMPTION 84-14, RELATING To
PLAN ASSET TRANSACTIONS DETERMINED BY INDEPENDENT QUALIFIED
PROFESSIONAL ASSET MANAGERS) AND THE RELATED PROVISIONS OF
THE CODE AND IS PERMITTED UNDER SUCH PLAN'S CONSTITUENT
DOCUMENTS AND RELATED POLICIES.
THE TRUST CERTIFICATES AND RELATED DOCUMENTATION (INCLUDING, WITHOUT LIMITATION,
THE TRUST AGREEMENT AND THE PURCHASE AGREEMENT (AS SUCH TERMS ARE DEFINED
BELOW)) MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, WITHOUT THE CONSENT
OF, BUT UPON NOTICE TO, THE OWNERS OF TRUST CERTIFICATES (THE "OWNERS") TO,
AMONG OTHER THINGS: (I) MODIFY THE RESTRICTIONS ON AND PROCEDURES FOR RESALES
AND OTHER TRANSFERS OF THE TRUST CERTIFICATES TO REFLECT ANY CHANGE IN
APPLICABLE LAW OR REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES
RELATING TO THE RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY, (II)
ENABLE THE TRUST To RELY UPON ANY EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OR THE INVESTMENT COMPANY ACT (AND TO REMOVE CERTAIN EXISTING
RESTRICTIONS TO THE EXTENT NOT REQUIRED UNDER SUCH EXEMPTION), PROVIDED THAT NO
SUCH CHANGE SHALL HAVE A MATERIAL ADVERSE EFFECT UPON THE OWNERS OF TRUST
CERTIFICATES THEN OUTSTANDING AS EVIDENCED BY AN OPINION OF COUNSEL, AND
PROVIDED FURTHER THAT, IF THE TRUST CERTIFICATES HAVE BEEN RATED BY S&P AND/OR
MOODY'S (AS SUCH TERMS ARE DEFINED IN THE SUPPLEMENT), S&P AND/OR MOODY'S SHALL
HAVE PROVIDED EVIDENCE IN WRITING THAT SUCH RATING SHALL NOT HAVE BEEN REDUCED
OR WITHDRAWN AS A RESULT OF ANY SUCH AMENDMENT. THE OWNER OF ANY TRUST
CERTIFICATES SHALL BE DEEMED, BY PURCHASE THEREOF, TO HAVE AGREED TO ANY SUCH
AMENDMENT OR SUPPLEMENT (EACH OF WHICH SHALL BE CONCLUSIVE AND BINDING ON SUCH
OWNER AND ALL FUTURE OWNERS OF SUCH TRUST CERTIFICATES FROM TIME TO TIME).
THE ISSUER OF THE FINANCIAL INSTRUMENT (AS SUCH TERM IS DEFINED BELOW), THE
TRUSTEE AND ITS AFFILIATES, THE BANK (AS DEFINED BELOW), THE DEALER AND THE
REMARKETING AGENT ARE EACH IN THE BUSINESS OF PROVIDING SERVICES TO BENEFIT
PLANS AND OTHERS AND THUS SUCH ORGANIZATIONS MAY BE, OR MAY BECOME, A PARTY IN
INTEREST AS TO MANY EMPLOYEE BENEFIT PLANS SUBJECT TO RISA. IN
ii
ADDITION, THE PLANS PURCHASING CLASS A TRUST CERTIFICATES MAY BE DEEMED TO HAVE
ENTERED INTO A LENDING OR OTHER TRANSACTION WITH THE BANK, AS OWNER OF THE CLASS
B TRUST CERTIFICATES. THEREFORE, FIDUCIARIES CONSIDERING THE PURCHASE OF TRUST
CERTIFICATES ON BEHALF OF A BENEFIT PLAN SHOULD DETERMINE IF THE ACQUISITION AND
HOLDING OF TRUST CERTIFICATES IS IN COMPLIANCE WITH ERISA (FOR EXAMPLE, SUCH
ACQUISITION AND HOLDING ARE IN COMPLIANCE WITH PROHIBITED CLASS TRANSACTION
EXEMPTION 84-14, RELATING TO PLAN ASSET TRANSACTIONS DETERMINED BY INDEPENDENT
QUALIFIED PROFESSIONAL ASSET MANAGERS) AND RELATED PROVISIONS OF THE CODE.
ADDITIONALLY, EACH ERISA BENEFIT PLAN ACQUIRING AN INTEREST IN TRUST
CERTIFICATES MUST MAKE ITS OWN DETERMINATION THAT THE ACQUISITION OF THE TRUST
CERTIFICATES OR AN INTEREST IN A FINANCIAL INSTRUMENT SIMILAR TO THE FUNDING
AGREEMENT IS PERMITTED UNDER SUCH PLAN'S CONSTITUENT DOCUMENTS AND RELATED
POLICIES.
IN DECIDING WHETHER OR NOT TO PURCHASE TRUST CERTIFICATES, AS DESCRIBED HEREIN,
EACH POTENTIAL INVESTOR MUST MAKE ITS OWN INDEPENDENT EVALUATION, BASED UPON
SUCH INVESTIGATION AND ANALYSIS AS IT DEEMS APPROPRIATE, OF THE BUSINESS,
PROSPECTS AND CREDITWORTHINESS OF THE ISSUER OF THE FINANCIAL INSTRUMENT, AND OF
THE TERMS AND PROVISIONS OF THE TRUST CERTIFICATES AND THE OTHER AGREEMENTS, IN
EACH CASE AS DESCRIBED OR REFERRED TO HEREIN. IN ADDITION, NO REPRESENTATION IS
MADE BY THE DEALER, THE REMARKETING AGENT OR THE TRUST AS TO THE
CHARACTERIZATION OF THE TRUST CERTIFICATES WITH RESPECT TO THE LEGAL INVESTMENT
RESTRICTIONS APPLICABLE TO ANY REGULATED ENTITY.
THE FEDERAL INCOME TAX TREATMENT OF THE FINANCIAL INSTRUMENT IS UNCERTAIN.
ACCORDINGLY, INVESTORS ARE URGED TO CONSULT THEIR TAX ADVISERS REGARDING THE
INCOME TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF TRUST
CERTIFICATES, PARTICULARLY WITH RESPECT TO THE TIMING AND CHARACTER OF INCOME,
LOSS OR DEDUCTION ASSOCIATED WITH HOLDING AN INTEREST IN THE FINANCIAL
INSTRUMENT.
THE TRUST WILL MAKE AVAILABLE TO EACH PROSPECTIVE PURCHASER PRIOR TO SUCH
PURCHASER'S PURCHASE OF TRUST CERTIFICATES THE OPPORTUNITY TO ASK QUESTIONS OF,
AND RECEIVE ANSWERS FROM, THE DEALER OR THE REMARKETING AGENT CONCERNING THE
TERMS AND CONDITIONS OF THIS OFFERING AND THE TRUST. EXCEPT AS SET FORTH IN THIS
OFFERING CIRCULAR AND THE SUPPLEMENT, NO PERSON IS AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS OFFERING
CIRCULAR AND THE SUPPLEMENT, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON. NEITHER THE DELIVERY OF THIS OFFERING
CIRCULAR OR THE SUPPLEMENT AT ANY TIME NOR ANY SALE MADE HEREUNDER OR THEREUNDER
SHALL, UNDER ANY CIRCUMSTANCE, IMPLY THAT THERE HAS NOT BEEN A CHANGE IN THE
AFFAIRS OF THE TRUST SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF THE
SUPPLEMENT OR THE DATE OF THIS OFFERING CIRCULAR.
NOTICE TO NEW HAMPSHIRE RESIDENTS
NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE
HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE REVISED STATUTES WITH
NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON
IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY
OF STATE THAT ANY DOCUMENT FILED UNDER CHAPTER 421-B IS TRUE, COMPLETE AND NOT
MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS
AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS
PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN
APPROVAL TO, ANY PERSON, SECURITY, OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR
CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY
REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.
The Trustee has not participated in the preparation of the Supplement or this
Offering Circular and assumes no responsibility for their contents.
A Supplement describing the particular terms of each class of Trust
Certificates offered hereby and the related Financial Instrument and other
matters is provided herewith. This Offering Circular must be read in conjunction
with such Supplement. The information set forth in such Supplement with respect
to the Issuer of the Financial Instrument has been obtained from official or
other sources which are believed to be reliable but is not guaranteed as to
accuracy or completeness by and is not to be construed as a representation by
Lehman Brothers or the Trustee. In the event that there is a conflict between
the provisions of the Supplement and the provisions of this Offering Circular,
the provisions of the Supplement will be controlling.
The distribution of this Offering Circular and the Supplement and the
offering of the Trust Certificates in certain jurisdictions may be restricted
by law. Persons receiving this Offering Circular and the Supplement should
inform themselves about and observe any such restriction. This Offering Circular
and the Supplement do not constitute, and may not be used for or in connection
with, an offer or solicitation by anyone in any jurisdiction in which such offer
or solicitation is not authorized or to any person to whom it is unlawful to
make such offer or solicitation. This Offering Circular and the Supplement are
highly confidential and have been prepared solely for use in connection with the
offering of the Trust Certificates. They are personal to each offeree to whom
they have been delivered by the Dealer or an affiliate thereof or the
Remarketing Agent or an affiliate thereof and do not constitute an offer to any
other person or to the public generally to subscribe for or otherwise acquire
the Trust Certificates. Distribution of the Offering Circular and the
Supplement to any person other than the offeree and those persons, if any,
retained to
iii
advise such offeree with respect thereto is unauthorized, and any disclosure of
any of their contents, without the prior written consent of the Dealer, is
prohibited. Each prospective Purchaser, by accepting delivery of the Offering
Circular and the Supplement, agrees to the foregoing and to make no photocopies
of the Offering Circular and Supplement or any documents attached thereto and,
if the offeree does not purchase the Trust Certificates or the offering is
terminated, to return this Offering Circular and all documents attached hereto
to: Michele Mahoney, Lehman Brothers Inc., 3 World Financial Center, New York,
New York 10285, telephone: (212) 526-6092 and facsimile: (212) 528-6925. For a
further description of certain restrictions on offerings and sales of Trust
Certificates and on distribution of this Offering Circular and the Supplement,
see "Offering and Sale".
No person is authorized to give any information or to make any representation
not contained in this Offering Circular or the related Supplement, and any
information or representation not contained herein must not be relied upon as
having been authorized by or on behalf of the Dealer. The delivery of this
Offering Circular and related Supplement at any time does not imply that
information contained herein or therein is correct at any time subsequent to
their respective dates.
iv
TABLE OF CONTENTS
Summary of Principal Terms................1 The Financial Instrument.....14
Special Considerations ...................6 Tax Considerations...........14
Description of the Trust Certificate......8 Offering and Sale............14
Use of Proceeds..........................11 General Information..........17
The Trust................................11
v
SUMMARY OF PRINCIPAL TERMS
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE DETAILED
INFORMATION APPEARING ELSEWHERE HEREIN AND BY REFERENCE TO THE INFORMATION
CONTAINED IN THE SUPPLEMENT DELIVERED IN CONNECTION WITH THE RELATED OFFERING OF
TRUST CERTIFICATES.
THE TRUST............................... BRAVO Trust Series 1997-1 is a limited
purpose business trust (the "Trust")
established under the laws of the State
of Delaware (12 Del. C. Section 3801, et
seq.) pursuant to the terms of a
Declaration of Trust and Trust Agreement
(the "Trust Agreement") between The Bank
of New York, as trustee (the "Trustee"),
and the holders of the Trust
Certificates. The Trust will be
established for the primary purpose of
issuing two classes of Trust
Certificates representing undivided
interests in the Trust (collectively, the
"Trust Certificates") and acquiring the
Financial Instrument described in the
offering circular supplement (the
"Supplement").
THE TRUST PROPERTY...................... The property of the Trust (the "Trust
Property") will consist of (i) the
Financial Instrument and certain
proceeds thereof, (ii) certain
segregated accounts held by the Trustee
in trust for the benefit of the Owners
and (iii) any other assets described in
the Supplement as constituting a portion
of the Trust Property, in each case as
more fully described in this Offering
Circular or in the Supplement.
DEALER AND REMARKETING AGENT............ Lehman Brothers Inc.
TRUST CERTIFICATE REMARKETING The terms of any remarketing arrangement
ARRANGEMENTS............................ with respect to the Trust Certificates
will be described in the Supplement.
LIQUIDITY ARRANGEMENTS.................. The terms of any liquidity arrangement
with respect to the remarketing of Trust
Certificates will be described in the
Supplement under "Liquidity Agreement".
TRUSTEE................................. The Bank of New York
THE TRUST CERTIFICATES.................. The Trust Certificates are designated as
"Class A Trust Certificates" and "Class
B Trust Certificates" constituting an
undivided interest in the Trust with
such rights distinguished by class as are
summarized in the Supplement.
Trust Certificates will be available for
purchase in minimum denominations of
$5,000,000 and integral multiples of
$100,000 in excess thereof, or such
other minimum denominations as are set
forth in the Supplement.
The Trust Certificates may be offered
from time to time by the Dealer at
prices which will reflect,
among other things, the current value of
the Financial Instrument, and which
prices may be adjusted to reflect
selling concessions, as determined by
the Dealer or as otherwise set forth in
the Supplement.
Each Trust Certificate of the same
denomination of a particular class will
be entitled to identical distributions
and other rights and will be entitled to
an identical undivided interest in the
Trust as each other Trust Certificate of
the same denomination and class.
THE SUPPLEMENT.......................... This Offering Circular, which describes
various aspects of the Trust, the Trust
Certificates, the Trustee, the offering
of the Trust Certificates and related
tax and other considerations, must be
read in conjunction with the Supplement.
PAYMENTS UNDER THE TRUST CERTIFICATES... Payments to Owners corresponding to
payments received under the Financial
Instrument will be made with respect to
Class A Trust Certificates and Class B
Trust Certificates at such time and in
such manner as are described in the
Supplement, subject to the timely
receipt by the Trust of payments under
the Financial Instrument and subject to
payment of unfunded Trust Expenses, if
any. See "Description of the Trust
Certificates".
METHOD OF INTEREST PAYMENTS............. Distributions in respect of interest and
AND PRINCIPAL PAYMENTS principal on the Trust Certificates will
be paid to Owners entitled thereto in
accordance with the terms of the Class A
Trust Certificates and the Class B Trust
Certificates, as the case may be,
that are holders of record thereof
at the close of business 15 calendar
days prior to the related Distribution
Date (as defined in the Trust Agreement),
as the case may be (each a "Record Date"),
in such manner as is described in the
Supplement. See "Description of the Trust
Certificates -- Payments of Principal,
Interest and Redemption Payments".
TRUST TERMINATION....................... The Trust will terminate when all
amounts have been received by the Trust
with respect to the Financial Instrument
and distributed in accordance with the
terms of the Trust after payment of all
liabilities of the Trust.
THE FINANCIAL INSTRUMENT................ The Financial Instrument owned by the
Trust will be identified in the
Supplement.
After the Issue Date (as defined in the
Supplement), no additional assets will
be purchased by the Trust (other than
short-term eligible investments).
2
REPURCHASE OF TRUST CERTIFICATES........ The terms of any permitted repurchase of
Trust Certificates will be as described
in the Supplement.
RATINGS................................. The ratings applicable to the Class A
Trust Certificates are set forth in the
Supplement. The Class B Trust
Certificates will not be rated.
A rating is not a recommendation to
buy, sell or hold Trust Certificates,
and such rating may be subject to
revision or withdrawal at any time by
the assigning rating agency. Any
suspension, reduction or withdrawal of
the rating assigned to the Trust
Certificates may adversely affect the
market price of such Trust Certificates.
TRUST'S AGENT............................ Bayerische Landesbank Girozentrale, New
York Branch (the "Bank") or an affiliate
thereof will act as agent for the Trust
(the "Trust's Agent") and in that
capacity will, among other things,
perform various administrative functions
on behalf of the Trust and determine the
value of the Trust's interest in the
Financial Instrument from time to time.
The Bank will not act in a fiduciary
capacity as the Trust's Agent. The
Trust's Agent will not be acting on
behalf of any of the Owners of the Class
A Trust Certificates. The Trust's Agent
will undertake to deliver, if requested,
other information as is available with
respect to the Trust in connection with
transfers of Trust Certificates pursuant
to Rule 144A. The Trust's Agent may also
select a substitute Trustee upon the
resignation of the Trustee.
EXPENSES................................ All initial organization expenses
incurred by the Trust will be paid by
the Dealer, which will be entitled to be
reimbursed by the purchaser of the Class
B Trust Certificates. Certain customary
ongoing expenses of the Trust, such as
the fees and expenses of the Trustee and
the custodian for the Financial
Instrument (the "Virginia Custodian"),
up to $10,000 per year, will be paid by
the Trust before payments of principal
and interest are distributed to the
Owners of Class A Trust Certificates
("Class A Owners"). Any additional fees
and expenses of the Trustee and the
Virginia Custodian, as well as the
remainder of ongoing expenses, such as
fees of the custodian for the insurer's
(as defined below) assets that
collateralize the Financial Instrument
(the "Custodian"), the Trust's Agent and
the Remarketing Agent, will be paid out
of funds that would otherwise have been
distributable to the Owners of the Class
B Trust Certificates.
3
Extraordinary expenses, such as expenses
of the Trust resulting from claims
against the Trust by the Dealer or the
Remarketing Agent pursuant to an
indemnification of the Dealer under the
Purchase Agreement or of the Remarketing
Agent under the Remarketing Agreement,
respectively, or by creditors of or
claimants against the Dealer or the
Remarketing Agent, legal actions against
the Trust or the Trustee,
indemnification of the Trustee, and
expenses relating to litigation to
enforce rights under the Trust
Certificates, up to $25,000, will be
paid by the Bank pursuant to a Side
Letter Agreement between the Bank and
the Trust. Any such expenses over
$25,000 will be paid first out of funds
that would otherwise have been
distributable to Owners of the Class B
Trust Certificates and, to the extent
that such amounts are insufficient, by
BLB (pursuant to such Side Letter
Agreement).
FORM OF TRUST CERTIFICATES; SETTLEMENT;.. As provided in the Supplement, Class A
DENOMINATION Trust Certificates will be represented
by one or more Global Trust Certificates
registered in the name of DTC or its
nominee and deposited with DTC. An
interest in a Global Trust Certificate
will be shown only on, and transfers
thereof will be effected only through,
records maintained by DTC and its
participants. Minimum denominations, if
any, of the Trust Certificates will be
set forth in the Supplement.
FORM, REGISTRATION...................... The Trust Certificates will not be
AND TRANSFER registered under the Securities Act. The
Trust Certificates will be offered only
to "Qualified Institutional Buyers" as
defined in and in reliance on Rule 144A
under the Securities Act as set forth in
the Supplement. There is no undertaking
to register the Trust Certificates under
the Securities Act, and the Trust
Certificates cannot be resold unless the
Trust Certificates are subsequently
registered thereunder or an exemption
(including the exemption provided for in
Rule 144A) from registration is
available.
No sale or transfer of Trust
Certificates shall be permitted which
would require registration of the Trust
under the Investment Company Act or
registration of the Trust Certificates
under the Securities Act or result in a
violation of any federal or state
securities law or regulation and Trust
Certificates sold or otherwise
transferred in violation of such
restrictions are subject to resale or
redemption by the Trustee.
Eligibility and restrictions on the
purchase of Trust Certificates by
employee benefit or similar plans
4
may be subject to certain additional
restrictions. See "Offering and Sale" in
the Supplement.
GOVERNING LAW .......................... The Trust Certificates and the Trust
Agreement will be governed by, and
construed in accordance with, the laws
of the State of Delaware.
SPECIAL CONSIDERATIONS ................. An investment in Trust Certificates
represents an indirect investment in the
Financial Instrument and other Trust
Property of the Trust. As a result, such
investment will be subject to special
considerations. See "Special
Considerations".
TAXES................................... Unless otherwise provided in the
Supplement, the Trust will be classified
as a partnership, and not as an
association or publicly traded
partnership taxable as a corporation,
under the Internal Revenue Code of 1986,
as amended (the "Code"). Owners of Class
A Trust Certificates will be required to
separately take into account such
Owner's allocated share of income,
gains, losses, deductions and credits of
the Trust. See "Tax Considerations".
5
SPECIAL CONSIDERATIONS
THE PURCHASE OF THE CLASS A TRUST CERTIFICATES INVOLVES CERTAIN RISKS.
PROSPECTIVE INVESTORS SHOULD CONSIDER, AMONG OTHERS, THE FOLLOWING FACTORS.
THE FINANCIAL INSTRUMENT
The primary investment to be made by the Trust will be the acquisition of
the Financial Instrument. As a result, the value of each class of Trust
Certificates will increase or decrease with any change in the value of the
Financial Instrument. Each prospective investor should, therefore, consider the
volatility of the Financial Instrument and the nature and credit risk of the
issuer of the Financial Instrument. Specific considerations which apply to the
Financial Instrument may be set forth in the Supplement.
The secondary market for each class of Trust Certificates will be affected
by a number of factors, independent of the creditworthiness of the issuer of
the Financial Instrument, including the time remaining to the final distribution
date of such Trust Certificates, the amount outstanding of such Trust
Certificates, market interest rates, and economic, financial and political
events over which the Trust will not have control. The historical experience of
any interest rate should not be taken as an indication of future performance of
such interest rate during the term of the Class A Trust Certificates. Credit
ratings assigned to Trust Certificates do not reflect on the potential impact of
the factors discussed above, or the market value of the Trust Certificates.
Accordingly, a prospective investor should consult its own financial and legal
advisors as to the risks of such Trust Certificates and the suitability of such
Trust Certificates in light of such investor's particular circumstances.
LIMITED RIGHTS TO ENFORCE THE TRUST CERTIFICATES
The Financial Instrument will be issued in the name of the Trust. No
Owner will have the contractual right to act directly with respect to the
Financial Instrument or to proceed directly against the issuer of the
Financial Instrument. Such rights are reserved to the Trustee. In addition,
no Owner will have any right to bring an action in the right of the Trust
except in accordance with applicable law and unless Owners owning at least
51% in interest in the Trust join in the bringing of such action. See "The
Trust--The Trustee".
LEGAL INVESTMENT
The appropriate characterization of the Class A Trust Certificates under
various legal investment restrictions, and thus the ability of investors subject
to those restrictions to purchase the Class A Trust Certificates, may be subject
to significant interpretative uncertainties. An investor should consult with its
own legal advisors in determining whether, and to what extent, the Class A Trust
Certificates will constitute legal investments for such investor and the
consequences of such an investment.
LIQUIDITY OF THE CLASS A TRUST CERTIFICATES
Restrictions on the transfer of Trust Certificates will affect such Trust
Certificates' liquidity.
TAX CONSIDERATIONS
Prospective investors in Class A Trust Certificates should carefully
consider the federal income tax treatment of such Trust Certificates, as
described in the Supplement. Investors are urged to consult their tax advisers
regarding the income tax consequences of the purchase, ownership and disposition
of the Class A Trust Certificates, particularly with respect to the timing and
character of income, loss or deduction associated with holding an indirect
interest in the Financial Instrument, as described in the Supplement.
INSOLVENCY RISK
Integrity National Life Insurance Company, as issuer of the Financial
Instrument ("Integrity"), will maintain, in custody for the benefit of the
Trust, separate account assets with a market value (based on a weekly valuation
by First Trust National Association, as custodian) at least equal to 102% of the
principal amount of the Trust Certificates (the "Separate Account Assets"). Such
assets will be acquired pursuant to investment guidelines as more fully
described in the Supplement. See "The Trust Assets--Custodial Accounts" in the
Supplement. Under applicable state law, the Separate Account Assets remain the
property of Integrity but are not chargeable with liabilities arising out of any
other business of Integrity. In the event of an insolvency of Integrity, it is
possible that
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Separate Account Assets (i) in excess of 100% of the principal amount of the
Trust Certificates and (ii) which have been contributed by Integrity to meet the
maintenance requirement referred to above, may be subject to recovery as
"fraudulent transfers" or "voidable preferences" by other creditors of
Integrity.
TERMINATION OF LIQUIDITY FACILITY
Unless the maturity date is extended as provided in the Supplement (see
"The Trust Certificates--Extension of Maturity" in the Supplement), the
principal amount of Class A Trust Certificates will be payable to the Class A
Owners on October 15, 1998. Funds necessary to make such payments will be made
available through liquidation of the Separate Account Assets. Under certain
circumstances as described herein, Class A Owners may be offered the opportunity
to extend the maturity date applicable to their Class A Trust Certificates for
designated periods of up to 360 days. In such event, all, but not less than all,
of the Trust Certificates of Class A Owners who do not elect to extend such
maturity date will be offered for sale in a remarketing process. Class A Trust
Certificates not sold in the remarketing are required to be purchased by the
Bank under its liquidity facility, provided that the Bank has not terminated the
liquidity facility. The liquidity facility may be terminated by the Bank upon 10
days' notice in case of certain events, including receivership of, or
rehabilitation or liquidation proceedings involving, Integrity or the failure of
the Trust to make payments when due to Owners. Following any such termination
there will be no extension elections or remarketings of the Class A Trust
Certificates and the amounts payable to the Trust under the Financial Instrument
will be the sole source of payment of the Class A Trust Certificates.
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DESCRIPTION OF THE TRUST CERTIFICATES
THE FOLLOWING IS A GENERAL SUMMARY OF THE TERMS AND CONDITIONS OF THE CLASS
A TRUST CERTIFICATES. THE SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
THE SUPPLEMENT AND TO THE TRUST AGREEMENT, COPIES OF WHICH ARE AVAILABLE UPON
REQUEST FROM THE DEALER. CAPITALIZED TERMS USED HEREIN HAVE THE MEANINGS
ASCRIBED TO THEM IN THE TRUST AGREEMENT UNLESS THE CONTEXT OTHERWISE REQUIRES.
INTEREST IN THE TRUST
The Trust Certificates will constitute two classes of undivided interests
in the Trust with such rights distinguished by class as are set forth in the
Supplement. The Class A Trust Certificates will be available for purchase in
minimum denominations of $5,000,000 and integral multiples of $100,000 in excess
thereof, or such other minimum denominations as are set forth in the Supplement.
Each Trust Certificate of the same denomination of a particular class will be
entitled to an identical undivided interest in the Trust. The Trust Property
will consist of (i) the Financial Instrument and certain proceeds thereon, (ii)
certain segregated accounts held by the applicable Trustee in trust and for the
benefit of the Owners and (iii) any other assets described in the Supplement as
constituting a portion of the Trust Property, in each case as more fully
described in the Supplement. Owners will not have any right in or claim to any
specific part of the Trust Property. Unless otherwise provided in the
Supplement, no further Trust Certificates will be issued by the Trust after the
relevant Issue Date.
PAYMENTS OF PRINCIPAL, INTEREST AND REDEMPTION PAYMENTS
The Trustee will receive payments related to principal and interest under
the Financial Instrument as and to the extent such payments are made and, after
the deduction of any amounts required to pay certain customary ongoing expenses
of the Trust, if any, allocable to the Owners of Class A Trust Certificates and
to Owners of Class B Trust Certificates, respectively, will pay such amounts to
Owners of Class A Trust Certificates and Class B Trust Certificates required in
accordance with their respective rights. The Trustee will distribute such
amounts to an account maintained by each holder whose ownership was recorded in
the Trust Certificate Register on the related Record Date. See "The Trust --
Expenses".
The Trustee may, whether or not expressly authorized to do so by any
provision of the Trust Agreement, make from any distribution or other payment in
respect of any Trust Certificate such other deductions as by law the Trustee is
required or entitled to make in respect of any taxes, charges or other
assessments whatsoever (for example, assessments in the nature of taxes),
allocable to such Trust Certificate.
REMARKETING ARRANGEMENTS
The terms of any remarketing arrangement with respect to the Class A Trust
Certificates will be summarized in the Supplement.
LIQUIDITY ARRANGEMENTS
The terms of any liquidity arrangement with respect to the repayment of the
Class A Trust Certificates will be summarized in the Supplement.
ADDITIONAL PROVISIONS
The Supplement may describe provisions that relate specifically to the
Trust Certificates. These provisions may include, among others, those relating
to a right of the Dealer to call the Trust Certificates or a right of the
Owners, the Trust or any liquidity provider to extend the maturity of Trust
Certificates.
RIGHT OF OWNERS TO EXTEND THE MATURITY OF TRUST CERTIFICATES
The Supplement may provide that the Owners will have the right, upon
written notice to the Trustee, to extend the maturity of any Trust Certificates
held by such Owners pursuant to and in accordance with the terms set forth in
the Supplement.
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HOLDING AND TRANSFER OF CLASS A TRUST CERTIFICATES
In the case of Trust Certificates issued in the form of Global Trust
Certificates, beneficial interests therein will be shown only on, and transfers
thereof will be effected only through, records maintained by DTC and its
participants. See "Global Trust Certificates" below.
The Trustee will maintain a register (the "Trust Certificate Register") in
which, subject to such reasonable regulations as it may prescribe, the Trustee
will provide for the registration of Trust Certificates, the registration of
transfers of Trust Certificates and recordations of redemptions thereof, if any.
No service charge will be payable with respect to any transfer of Trust
Certificates, but the Trustee may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any such
transfer. Unless otherwise provided in the Supplement, transfers pursuant to
Rule 144A or other exemptions from registration under the Securities Act will be
permitted only (i) to the Trust or the Dealer or (ii) through, by or in a
transaction approved by the Dealer or any Remarketing Agent. The Trustee will
register transfers only if certain representations are made with respect to the
eligibility of the transferee and compliance with applicable securities laws.
The Trust's Agent has agreed to make available to Owners and transferees, upon
request, information, as available, with respect to the Trust as appropriate
pursuant to Rule 144A(d)(4). Transfers made in violation of the requirements
of the Trust Agreement will be null and void. See "Offering and Sale".
As provided in the Supplement, Class A Trust Certificates will be
represented by one or more global trust certificates (the "Global Trust
Certificates"), registered in the name of DTC or its nominee. An interest in a
Global Trust Certificate will be shown only on, and transfers thereof will be
effected only through, records maintained by DTC or its participants.
No sale or transfer of Trust Certificates shall be permitted which
would require registration of the Trust under the Investment Company Act or
registration of the Trust Certificates under the Securities Act or result in
a violation of any federal or state securities law or regulation. Offers to
purchase, and subsequent transfers, will be subject to the foregoing
restrictions, and Owners' ability to resell or otherwise transfer the Trust
Certificates (or any interest therein) may therefore be limited.
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 PROVISIONS
The issuer of the Funding Agreement and its affiliates, the Trustee, the
Bank, the Dealer and the Remarketing Agent are each in the business of providing
services to benefit plans and others and thus one or more of such organizations
may be, or may become, a party in interest as to many employee benefit plans
subject to the Employee Retirement Income Security Act of 1974, as amended
("ERISA"). In addition, the plans purchasing Class A Trust Certificates may be
deemed to have entered into a lending or other transaction with the Bank, as
holder of the Class B Trust Certificates. Therefore, fiduciaries considering the
purchase of Trust Certificates on behalf of a benefit plan should determine if
the acquisition and holding of Trust Certificates is in compliance with ERISA
and related provisions of the Code.
Additionally, each ERISA benefit plan acquiring Trust Certificates must
make its own determination that the acquisition of the Trust Certificates or an
interest in a financial instrument similar to the Funding Agreement is permitted
under such plan's constituent documents and related policies.
GLOBAL TRUST CERTIFICATES
THE FOLLOWING DESCRIPTION OF THE OPERATIONS AND PROCEDURES OF DTC IS
PROVIDED SOLELY AS A MATTER OF CONVENIENCE. THESE OPERATIONS AND PROCEDURES
ARE SOLELY WITHIN THE CONTROL OF THE RESPECTIVE SETTLEMENT SYSTEMS AND ARE
SUBJECT TO CHANGES BY THEM FROM TIME TO TIME. NEITHER THE TRUSTEE NOR THE
DEALER TAKES ANY RESPONSIBILITY FOR THESE OPERATIONS AND PROCEDURES AND URGES
INVESTORS TO CONTACT THE SYSTEM OR THEIR PARTICIPANTS DIRECTLY TO DISCUSS
THESE MATTERS.
Upon the issuance of the Global Trust Certificates, DTC will credit, on
its internal system, the respective principal amount of the individual
beneficial interests represented by such Global Trust Certificates to the
accounts of persons who have accounts with such depositary. Such accounts
initially will be designated by the Dealer. Ownership of beneficial interests
in a Global Trust Certificate will be limited to persons who maintain
accounts with DTC ("participants") or persons who hold interests through
participants. Ownership of beneficial interests in the Global Trust
Certificates will be shown on, and the transfer of that ownership will be
effected only through, records maintained by DTC or its nominee (with respect
to interests of participants) and the records of participants (with respect
to interests of persons other than participants).
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AS LONG AS DTC, OR ITS NOMINEE, IS THE REGISTERED HOLDER OF A GLOBAL
TRUST CERTIFICATE, DTC OR SUCH NOMINEE, AS THE CASE MAY BE, WILL BE
CONSIDERED THE SOLE OWNER AND HOLDER OF THE TRUST CERTIFICATES REPRESENTED BY
SUCH GLOBAL TRUST CERTIFICATE FOR ALL PURPOSES UNDER THE TRUST AGREEMENT AND
THE TRUST CERTIFICATES. Unless (a) DTC notifies the Trustee that it is
unwilling or unable to continue as depositary for a Global Trust Certificate,
or ceases to be a "Clearing Agency" registered under the Securities Exchange
Act of 1934, as amended (the "1934 Act"), or (b) approved by the Trust and
the Trust's Agent in their sole discretion, owners of beneficial interests in
a Global Trust Certificate will not be entitled to have any portions of such
Global Trust Certificate registered in their names, will not receive or be
entitled to have any physical delivery of Trust Cerificates in certificated
form and will not be considered the owners or holders of the Global Trust
Certificate (or any Trust Certificates represented thereby) under the Trust
Agreement or the Trust Certificates. In addition, no beneficial owner of an
interest in a Global Trust Certificate will be able to transfer that interest
except in accordance with DTC's applicable procedures (in addition to those
under the Trust Agreement referred to herein).
Payments of the principal of and interest on Global Trust Certificates
will be made to DTC or its nominee as the registered owners thereof. The
Trust, the Trustee, the Dealer and their respective agents will not have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the Global
Trust Certificates or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
The Trust expects that DTC or its nominee, upon receipt of any payment
of principal or interest in respect of a Global Trust Certificate
representing any Class A Trust Certificates held by it or its nominee, will
immediately credit participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal
amount of such Global Trust Certificate for such Class A Trust Certificates
as shown on the records of DTC or its nominee. The Trust also expects that
payments by participants to owners of beneficial interests in such Global
Trust Certificate held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers registered in "street name". Such payments will
be the responsibility of such participants.
The laws of some U.S. states require that certain persons take
physical delivery of securities in certificated form. Consequently, the
ability to transfer beneficial interests in a Global Trust Certificate to
such persons may be limited. Because DTC can act only on behalf of
participants, which, in turn, act on behalf of indirect participants and
certain banks, the ability of a person having a beneficial interest in a
Global Trust Certificate to pledge such interest to persons or entities that
do not participate in the DTC system, or otherwise take actions in respect of
such interest, may be affected by the lack of a physical certificate
evidencing such interest.
Interests in the Global Trust Certificates will trade in DTC's
Same-Day Funds Settlement System and secondary market trading activity in
such interests will therefore settle in immediately available funds, subject
in all cases to the rules and procedures of DTC and its participants.
Transfers between participants in DTC will be effected in accordance with
DTC's procedures and will be settled in same-day funds.
DTC has advised the Trust that it will take any action permitted to be
taken by a holder of Trust Certificates (including the presentation of Trust
Certificates for exchange as described below) only at the direction of one or
more participants to whose account with DTC interests in the Global Trust
Certificates are credited and only in respect of such portion of the
aggregate principal amount of the Trust Certificates as to which such
participant or participants has or have given such direction.
DTC has advised the Trust as follows: DTC is a limited purpose trust
company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the
Uniform Commercial Code and a "Clearing Agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for its participants and facilitate the clearance and settlement
of securities transactions between participants through electronic book-entry
changes in accounts of its participants, thereby eliminating the need for
physical transfer and delivery of certificates. Participants include
securities brokers and dealers, banks, trust companies and clearing
corporations and may include certain other organizations. Indirect access to
the DTC system is available to other entities such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship
with a participant, either directly or indirectly ("indirect participants").
Although DTC currently follows the forgoing procedures to facilitate
transfers of interests in global notes among participants of DTC, it is under
no obligation to do so, and such procedures may be discontinued or modified
at any time. The Trustee will not have any responsibility for the performance
by DTC, or its respective participants or indirect participants of its
respective obligations under the rules and procedures governing its
operations.
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If any depositary is at any time unwilling or unable to continue as a
depositary for the Class A Trust Certificates for the reasons set forth
above, the Trustee will issue certificates for the Class A Trust Certificates
in definitive, fully registered, non-global form without interest coupons in
exchange for the Global Trust Certificates. In no other circumstance will the
Trustee issue certificates for the Class A Trust Certificates in definitive,
fully registered, non-global form, without interest coupons, in exchange for
beneficial interests of like principal amount in any Class A Trust
Certificate. Upon receipt of notice that the depositary is unwilling or
unable to continue as a depositary for the Class A Trust Certificates, the
Trustee will cause the requested certificates to be prepared for delivery.
In all cases, certificates for notes delivered in exchange for any Global
Trust Certificate or beneficial interests therein will be registered in the
names, and issued in any approved denominations, requested by DTC (in
accordance with its customary procedures).
Physical Certificates for non-global Trust Certificates issued in
exchange for a Global Trust Certificate (or any portion thereof) will bear
certain restrictive legends as set forth under "Offering and Sale" below
(unless the Trustee determines otherwise in accordance with applicable law
and the Trust Agreement). The holder of a non-global Trust Certificate may
transfer such Trust Certificate, subject to compliance with the provisions of
the applicable legend.
USE OF PROCEEDS
Net cash proceeds from the sale of the Trust Certificates will be used
by the Trustee to acquire the Financial Instrument, as described in the
Supplement.
THE TRUST
The Trust will be established under the laws of the State of Delaware
pursuant to the terms of the Trust Agreement with the Trustee. The Trust
will be administered by the Trustee pursuant to the terms of the Trust
Agreement.
The Trust will be established for the primary purpose of issuing two
classes of Trust Certificates representing undivided interests in the Trust,
acquiring the Trust Property--the Financial Instrument described in the
Supplement--and temporarily investing funds in short-term Eligible
Investments, if any. The Trust will not purchase or otherwise acquire any
additional financial instruments or securities and will not dispose of or
create any lien on the Financial Instrument except as described in the
Supplement.
THE TRUSTEE
Pursuant to the terms of the Trust Agreement, the Trustee will
administer the Trust and hold Trust Property in one or more segregated
accounts and, as described in the Supplement, in certain custodial accounts.
The Trust will hold an ownership interest valid against third parties in the
Financial Instrument on behalf of the Owners of Trust Certificates.
The Trust Agreement provides for indemnification of the Trustee by the
Trust and exculpates the Trustee for acts or omissions in respect of the
Trust except for its own willful misconduct or negligence. The Trustee will
not be obligated to take or pursue any action on behalf of the Trust unless
the Trustee is satisfied that it has adequate indemnification for such action
and any related expense. The Trustee may from time to time delegate certain
of its responsibilities to third parties in good faith and in accordance with
the terms of the Trust Agreement. The Trustee will be paid a fee for its
services and will be reimbursed for its out-of-pocket expenses.
The Trustee's liability in connection with the issuance and sale of
Trust Certificates is limited solely to the express obligations of the
Trustee as set forth in the Trust Agreement. The primary source of payments
on the Trust Certificates will be the proceeds of, or payments received in
respect of, the Financial Instrument. Neither the Trust Certificates nor the
Financial Instrument will represent an interest in or obligation of, or be
guaranteed or insured by, the Trustee in its individual capacity. There will
be no recourse to the Trustee in its individual capacity or any other entity
in the event that proceeds of, or payments received in respect of, the
Financial Instrument are insufficient or otherwise unavailable to make all
payments provided for under the Trust Certificates.
In order to comply with Delaware law respecting business trusts, the
Trustee will enter into a Co-Trustee Agreement in respect of the Trust
Agreement (the "Co-Trustee Agreement") with The Bank of New York (Delaware),
a Delaware banking corporation (the "Delaware Trustee"). Under the
Co-Trustee Agreement, the Delaware Trustee will assume certain
responsibilities for executing and
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delivering documents necessary for the maintenance of the Trust in Delaware
and will be entitled to all the benefits and protection of the Trustee.
THE TRUST'S AGENT
The Trust will enter into an agreement (the "Agency Agreement") with
the Bank, which will serve as an agent of the Trust (the "Trust's Agent")
and, in that capacity, will, among other things, perform various
administrative duties and determine any tax or governmental charges that may
be due in connection with any transfer or exchange of Trust Certificates.
The Bank will not act in a fiduciary capacity as the Trust's Agent. The
Trust's Agent will not be acting on behalf of the Owners of the Class A Trust
Certificates. The Trust's Agent may also select a substitute Trustee upon
the resignation of a Trustee. The Trust's Agent will undertake to deliver,
if requested, other information as is available with respect to the Trust in
connection with transfers of Trust Certificates pursuant to Rule 144A. The
Trust's Agent may be removed by the Trustee upon 30 days' prior written
notice and may resign upon 60 days' prior written notice to the Trustee. The
Agency Agreement provides for indemnification and reimbursement of the
Trust's Agent for all expenses, losses, damages and liabilities incurred
under the Agency Agreement, subject to compliance with the applicable
standard of care, as provided therein, and limited to the extent of Trust
Property.
TERMINATION OF THE TRUST
The Trust will be terminated only in the event that all amounts owed
under the Trust Agreement in respect of the Financial Instrument have been
received by the Trust and distributed in accordance with the terms of the
Trust. Such event would occur upon the Maturity Date of the Financial
Instrument (see "The Trust Assets" in the Supplement) or if an Early
Certificate Maturity Event or an Early Funding Agreement Termination Event
(as such terms are defined in the Custody Agreement among the Custodian, the
Trust, the issuer of the Financial Instrument (the "Insurer"), and the
Trust's Agent (the "Custody Agreement")) occurs. An Early Certificate
Maturity Event will occur (i) if there is a material violation of investment
guidelines under the Custody Agreement; (ii) if assets supporting the
Financial Instrument fall below 102% of the then-applicable value of the
Deposit Fund under the Funding Agreement by more than $1 million as of any
weekly valuation; (iii) if the Insurer becomes subject to seizure or
receivership by its domiciliary state insurance department or rehabilitation
or liquidation proceedings; or (iv) if the Insurer fails to make a payment of
interest or principal under the Financial Instrument. An Early Funding
Agreement Termination Event will occur (i) if the liquidity provider holds,
under certain conditions, more than $45 million of Class A Trust
Certificates; (ii) if at any time upon initial and any subsequent maturity of
the Class A Trust Certificates there is not a liquidity provider in place or
if the Market Agent has not selected an extended maturity date on which the
principal amount of all outstanding Senior Securities will be due and
payable; (iii) if, following a change of control of the Insurer or an
assignment by the Insurer of any of its obligations under the Financial
Instrument or an amendment to the Financial Instrument required by applicable
state insurance regulatory authorities, one or both of the relevant rating
agencies lowers or withdraws its then-current rating of the Class A Trust
Certificates; or (iv) if the Custodian resigns and cannot be replaced. If an
Early Certificate Maturity Event described in clause (iii) of the third
sentence of this paragraph occurs, amounts owed under the Financial
Instrument will be received by the Trustee from the Custodian as soon as
possible thereafter. If any other Early Certificate Maturity Event occurs
under the Custody Agreement, amounts owed under the Financial Instrument will
be received by the Trustee from the Custodian no later than the earlier to
occur of the day that is 30 days after the Early Certificate Maturity Event or
the maturity date of the Class A Trust Certificates. If an Early Funding
Agreement Termination Event occurs under the Custody Agreement, amounts owed
under the Financial Instrument are required to be paid to the Trustee by the
Custodian no later than the maturity date of the Class A Trust Certificates.
Upon termination of the Trust in the circumstances described above,
the Trustee out of Trust fund will pay any accrued fees that have not yet
been paid to the Trustee or the Virginia Custodian, all principal and
interest that is owed to the Owners of the Class A Trust Certificates, all
other liabilities of the Trust not paid or payable by a third party and any
remaining amounts to Owners of the Class B Trust Certificates.
EXPENSES
All initial organization expenses incurred by the Trust will be paid
by the Dealer (subject to reimbursement by the purchaser of the Class B Trust
Certificates). Certain customary ongoing expenses of the Trust, such as the
fees and expenses of the Trustee and the Virginia Custodian up to a maximum
of $10,000 a year, will be paid by the Trust from amounts received by the
Trust under the Financial Instrument before payments are made to the Owner of
the Class A Trust Certificates. Any additional fees and expenses of the
Trustee and the Virginia Custodian in excess of $10,000 a year, as well as
the remainder of ongoing expenses, such as fees of the
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Trust's Agent, the Custodian and the Remarketing Agent, will be paid out
of funds that would otherwise have been distributable to the Owners of the
Class B Trust Certificates.
Extraordinary expenses, such as expenses of the Trust resulting from
claims against the Trust by creditors of or claimants against the Dealer,
legal actions against the Trust or the Trustee, indemnification of the
Trustee, indemnification of the Dealer and expenses relating to litigation to
enforce rights under the Trust Certificates, up to $25,000, will be paid by
the Bank pursuant to a Side Letter Agreement between the Bank and the Trust.
Any such expenses over $25,000 will be paid first out of funds that would
otherwise have been distributable to Owners of the Class B Trust Certificates
and, to the extent that such amounts are insufficient, by the Bank.
RESIGNATION AND REPLACEMENT OF THE TRUSTEE
Owners may not remove the Trustee. The Trustee of the Trust may
resign upon giving at least 90 days' prior written notice to the Trust's
Agent and the Owners. Such resignation will not take effect until a
successor trustee is appointed by the Trust's Agent (or otherwise) and has
assumed the duties of trustee as set forth in the Trust Agreement.
A resigning Trustee will continue, following appointment of any
successor, to have the benefit of all indemnities, powers and privileges and
rights of recourse against the property of the Trust conferred upon such
Trustee pursuant to the Trust Agreement or applicable law in respect of the
period during which it acted as Trustee.
MODIFICATION OF THE TRUST AGREEMENT
The Trustee acting in consultation with the Trust's Agent may amend
the Trust Agreement in such manner and to such extent as it may consider
expedient (i) to cure any ambiguity, (ii) to add to the duties or obligations
of the Trustee or the Trust's Agent under the Trust Agreement, (iii) to
address any questions arising under the Trust Agreement which amendment may
not be materially inconsistent with other provisions, or (iv) to add or
change any provision or modify the rights of Owners, provided that any such
amendment may not materially adversely affect the interests of the Owners of
either class of Trust Certificates. Without the approval of the Owners, the
Trustee may, upon Opinion of Counsel, amend the restrictions on resales and
other transfers of Trust Certificates as provided in the Trust Agreement in
order to reflect amendments to the Securities Act and/or the Investment
Company Act or regulations thereunder or interpretations thereof.
NO PETITION
Notwithstanding any termination of the Custody Agreement, the Trust
Agreement, the Financial Instrument, the Liquidity Agreement, the Virginia
Custody Agreement, the Purchase Agreement or the Remarketing Agreement, none
of the parties to the relevant agreement is permitted, prior to the date
which is one year and one day after the termination of such agreement and
payment in full of the Class A Trust Certificates, acquiesce, petition or
otherwise invoke or cause the Trust to invoke the process of any court or
governmental authority for the purpose of commencing or sustaining a case
against the Trust under any federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Trust or any
substantial part of its property, or making a general assignment for the
benefit of creditors, or ordering the winding up or liquidation of the
affairs of the Trust.
RIGHTS OF OWNERS
The terms and conditions of the Trust Agreement shall inure to the
benefit of, and be binding on, all Owners as if each Owner had been a party
to and had executed the Trust Agreement, had covenanted to observe and be
bound by all the provisions of the Trust Agreement, and had thereby
authorized the Trust and the Trustee to do all such acts and things as the
Trust Agreement may or shall require the Trust and the Trustee to do or which
the Trust and the Trustee shall do in accordance with the provisions thereof.
GOVERNING LAW
The Trust Certificates and the Trust Agreement will be governed by the
laws of the State of Delaware.
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THE FINANCIAL INSTRUMENT
The Financial Instrument to be held by the Trust is described in the
Supplement. This Offering Circular must be read in conjunction with the
Supplement.
ANY AND ALL INFORMATION PROVIDED IN THE SUPPLEMENT WITH RESPECT TO THE
FINANCIAL INSTRUMENT WILL BE IN SUMMARY FORM, WILL NOT PURPORT TO BE COMPLETE
AND, ACCORDINGLY, WILL BE QUALIFIED IN ITS ENTIRETY TO THE ACTUAL FORM
THEREOF. NO REPRESENTATIONS AS TO THE ACCURACY AND COMPLETENESS OF ANY SUCH
DESCRIPTION WILL BE MADE BY THE DEALER, THE TRUST OR THE TRUSTEE.
TAX CONSIDERATIONS
Prospective investors in the Trust Certificates should carefully
consider the federal income tax treatment of the Trust Certificates, as
described in the Supplement. Investors are urged to consult their tax
advisers regarding the income tax consequences of the purchase, ownership and
disposition of the Trust Certificates, particularly with respect to the
timing and character of income, loss or deduction associated with holding an
interest in the Financial Instrument, as described in the Supplement.
OFFERING AND SALE
Each prospective purchaser is hereby offered the opportunity to ask
questions of, and receive answers from, the Dealer concerning the terms and
conditions of this offering and the Trust and to obtain additional
information which the Dealer possesses or can acquire without unreasonable
effort or expense that is necessary to verify the accuracy of the
information furnished in this Offering Circular and the Supplement. Inquiries
concerning such additional information should be directed to Michele Mahoney,
Lehman Brothers Inc., 3 World Financial Center, New York, New York 10285,
tel: (212) 526-6092, fax: (212) 528-6925.
Lehman Brothers will be appointed sole Dealer of the Trust for the
private placement of the Trust Certificates pursuant to a Purchase Agreement
(the "Purchase Agreement") between the Trust and Lehman Brothers. In order to
facilitate the offering of the Trust Certificates by the Dealer, the Dealer
will temporarily acquire and hold the Trust Certificates as principal for
resale at prices determined by the Dealer to reflect the current market for
the related Financial Instrument as well as selling concessions and certain
costs and expenses (including those associated with the establishment of the
Trust). The Trust Certificates are being offered by the Dealer, subject to
prior sale, when as and if issued with approval of certain legal matters by
counsel for the Trustee and the Dealer and certain other conditions.
ELIGIBLE INVESTORS
The Trust Certificates have not been, and will not be, registered under
the Securities Act or any state securities laws. The Trust has not been
registered under the Investment Company Act, in reliance upon an exception
from registration thereunder or because registration is not required. As
provided in the Supplement, Trust Certificates may be offered to "qualified
institutional buyers", as defined in and in reliance on Rule 144A under the
Securities Act, and may not be reoffered, resold or otherwise transferred
except (i) to a person who such purchaser reasonably believes is a qualified
institutional buyer acquring such Trust Certificates for its own account or
for the account of a qualified institutional buyer in a transaction complying
with Rule 144A and (ii) in accordance with all applicable securities laws of
the states of the United States and other jurisdictions. Each purchaser of
Trust Certificates will be deemed to have made certain acknowledgments,
representations and agreements as set forth in the Supplement. The Trust
Certificates may not be offered or sold except in the limited circumstances
described above.
No sale or other transfer of Trust Certificates shall be permitted which
would require registration of the Trust Certificates under the Securities
Act, registration of the Trust under the Investment Company Act or result in
a violation of any federal or state securities law or regulation.
Unless otherwise provided in the Supplement (in which case, the related
legend and representations will be appropriately modified), each Class A Trust
Certificate representing an interest in a Class A Trust Certificate
initially offered in reliance on Rule 144A will be subject to the provisions
set forth in, and will bear, and by accepting an interest in a Class A Trust
Certificate, each purchaser shall be deemed to have agreed to the provisions
set forth in, the following legend:
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"THE TRUST CERTIFICATES (THE "TRUST CERTIFICATES") OF THE BRAVO TRUST SERIES
1997-1 (THE "TRUST") HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. THE TRUST HAS NOT BEEN REGISTERED UNDER THE INVESTMENT
COMPANY ACT OF 1940, AS AMENDED (THE "INVESTMENT COMPANY ACT"), IN RELIANCE
UPON AN EXCEPTION FROM REGISTRATION THEREUNDER. THE TRUST CERTIFICATES ARE
BEING OFFERED ONLY TO "QUALIFIED INSTITUTIONAL BUYERS" AS DEFINED IN AND IN
RELIANCE ON RULE 144A UNDER THE SECURITIES ACT ("QUALIFIED INSTITUTIONAL
BUYERS").
THIS TRUST CERTIFICATE IS A TRUST CERTIFICATE WITHIN THE MEANING OF THE TRUST
AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY ("DTC") OR A NOMINEE OF DTC. THIS TRUST CERTIFICATE
IS EXCHANGEABLE FOR TRUST CERTIFICATES REGISTERED IN THE NAME OF A PERSON
OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE TRUST AGREEMENT AND NO TRANSFER OF THIS TRUST CERTIFICATE (OTHER THAN A
TRANSFER OF THIS TRUST CERTIFICATE AS A WHOLE BY DTC TO A NOMINEE OF DTC OR
BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE REGISTERED
EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS TRUST CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC, TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY TRUST CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE
& CO. ("CEDE") OR SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE 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, HAS AN
INTEREST HEREIN.
THE ISSUER OF THE FINANCIAL INSTRUMENT (THE "FINANCIAL INSTRUMENT") TO BE
PURCHASED BY THE TRUST, CERTAIN OF ITS AFFILIATES, BAYERISCHE LANDESBANK
GIROZENTRALE (THE "BANK"), THE BANK OF NEW YORK (THE "TRUSTEE"), THE DEALER
AND THE REMARKETING AGENT, AS SUCH TERMS ARE DEFINED IN THE TRUST AGREEMENT
REFERRED TO BELOW, ARE EACH IN THE BUSINESS OF PROVIDING SERVICES TO BENEFIT
PLANS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"). IN ADDITION, PLANS PURCHASING CLASS A TRUST CERTIFICATES
MAY BE DEEMED TO HAVE ENTERED INTO A LENDING OR OTHER TRANSACTION WITH THE
BANK AS OWNER OF THE CLASS B TRUST CERTIFICATES. THEREFORE, FIDUCIARIES
CONSIDERING THE PURCHASE OF TRUST CERTIFICATES ON BEHALF OF A BENEFIT PLAN
SHOULD DETERMINE IF THE ACQUISITION AND HOLDING OF TRUST CERTIFICATES IS IN
COMPLIANCE WITH ERISA (FOR EXAMPLE, SUCH ACQUISITION AND HOLDING ARE IN
COMPLIANCE WITH PROHIBITED CLASS TRANSACTION EXEMPTION 84-14, RELATING TO
PLAN ASSET TRANSACTIONS DETERMINED BY INDEPENDENT QUALIFIED PROFESSIONAL
ASSET MANAGERS) AND RELATED PROVISIONS OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED (THE "CODE"). ADDITIONALLY, EACH ERISA BENEFIT PLAN ACQUIRING AN
INTEREST IN TRUST CERTIFICATES MUST MAKE ITS OWN DETERMINATION THAT THE
ACQUISITION OF THE TRUST CERTIFICATES OR AN INTEREST IN A FINANCIAL INSTRUMENT
SIMILAR TO THE FINANCIAL INSTRUMENT IS PERMITTED UNDER SUCH PLAN'S
CONSTITUENT DOCUMENTS AND RELATED POLICIES.
BY ITS ACCEPTANCE OF THIS TRUST CERTIFICATE (THE "TRUST CERTIFICATE"),
DIRECTLY OR THROUGH A NOMINEE, THE INVESTOR WILL BE DEEMED TO HAVE
REPRESENTED TO AND AGREED WITH THE TRUSTEE AND THE DEALER THAT:
(A) (I) IT IS A QUALIFIED INSTITUTIONAL BUYER, (II) IT IS AWARE THAT THE
SALE OF THE TRUST CERTIFICATE IS BEING MADE IN RELIANCE ON RULE
144A AND (III) THE TRUST CERTIFICATE IS BEING ACQUIRED FOR ITS OWN
ACCOUNT (OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER),
(B) ANY RESALE OR OTHER TRANSFER OF THE TRUST CERTIFICATE WILL BE MADE
ONLY (I) TO ONE OR MORE PERSONS EACH OF WHICH SUCH PURCHASER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER ACQUIRING
SUCH TRUST CERTIFICATE FOR ITS OWN
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ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A
TRANSACTION COMPLYING WITH RULE 144A AND (II) IN ACCORDANCE WITH
ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES
AND OTHER JURISDICTIONS,
(C) TRANSFERS OF TRUST CERTIFICATES SHALL BE RESTRICTED SO THAT,
UNLESS THE TRUSTEE HAS OBTAINED AN OPINION OF COUNSEL THAT SUCH
TRANSFER WILL NOT RESULT IN THE TRUST BEING TREATED AS A PUBLICLY
TRADED PARTNERSHIP WITHIN THE MEANING OF SECTION 7704(a) OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), (I) THE
TRUST CERTIFICATES OR INTERESTS IN THE TRUST CERTIFICATES MAY NOT
BE OR BECOME TRADEABLE ON AN "ESTABLISHED SECURITIES MARKET" AS
DEFINED IN TREASURY REGULATION SECTION 1.7704-1(b), (II) ANY
TRANSFER THAT WOULD RESULT IN THERE BEING MORE THAN 100 BENEFICIAL
OWNERS SHALL BE NULL AND VOID, (III) NO TRUST CERTIFICATE MAY BE
HELD BY A FLOW-THROUGH ENTITY (A PARTNERSHIP, A GRANTOR TRUST, OR
AN S CORPORATION, MORE THAN HALF OF THE ASSETS OF WHICH CONSIST OF
TRUST CERTIFICATES), AND (IV) NO BENEFICIAL OWNER OR HOLDER SHALL
HOLD LESS THAN $5 MILLION FACE AMOUNT OF CLASS A TRUST
CERTIFICATES, AND
(D) IT IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR, IF IT IS,
THAT THE ACQUISITION AND HOLDING OF THE RELEVANT TRUST CERTIFICATES
IS IN COMPLIANCE WITH ERISA (FOR EXAMPLE, SUCH ACQUISITION AND
HOLDING ARE IN COMPLIANCE WITH PROHIBITED CLASS TRANSACTION
EXEMPTION 84-14, RELATING TO PLAN ASSET TRANSACTIONS DETERMINED BY
INDEPENDENT QUALIFIED PROFESSIONAL ASSET MANAGERS) AND THE RELATED
PROVISIONS OF THE CODE AND IS PERMITTED UNDER SUCH PLAN'S
CONSTITUENT DOCUMENTS AND RELATED POLICIES.
THE TRUST CERTIFICATES AND RELATED DOCUMENTATION (INCLUDING,
WITHOUT LIMITATION, THE DECLARATION OF TRUST AND TRUST AGREEMENT
OF THE TRUST (THE "TRUST AGREEMENT") AND THE PURCHASE AGREEMENT
(THE "PURCHASE AGREEMENT") BETWEEN THE TRUST AND LEHMAN BROTHERS
INC. MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, WITHOUT THE
CONSENT OF, BUT UPON NOTICE TO, THE OWNERS OF TRUST CERTIFICATES
SENT TO THEIR REGISTERED ADDRESSES: (i) TO MODIFY THE RESTRICTIONS
ON AND PROCEDURES FOR RESALES AND OTHER TRANSFERS OF THE TRUST
CERTIFICATES TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION
(OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE
RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY AND (ii) TO
ACCOMMODATE THE ISSUANCE, IF ANY, OF TRUST CERTIFICATES IN
BOOK-ENTRY FORM THROUGH THE FACILITIES OF A CLEARING AGENCY. THE
TRUST CERTIFICATES AND RELATED DOCUMENTATION (INCLUDING WITHOUT
LIMITATION, THE AGREEMENTS REFERRED TO ABOVE) MAY BE AMENDED OR
SUPPLEMENTED FROM TIME TO TIME, EXISTING RESTRICTIONS UPON THE
RESALE OR TRANSFER OF THE TRUST CERTIFICATES MAY BE ALTERED, AND
ANY OTHER ACTIONS MAY BE TAKEN, IN EACH CASE WITHOUT THE CONSENT
OF BUT UPON NOTICE TO THE REGISTERED OWNERS, TO ENABLE THE TRUST
TO RELY UPON ANY EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OR THE INVESTMENT COMPANY ACT THAT MAY BECOME AVAILABLE (AND
TO REMOVE CERTAIN EXISTING RESTRICTIONS TO THE EXTENT NOT REQUIRED
UNDER SUCH EXEMPTION), PROVIDED THAT NO SUCH CHANGE SHALL HAVE A
MATERIAL ADVERSE EFFECT UPON THE OWNERS OF TRUST CERTIFICATES THEN
OUTSTANDING. THE OWNER OF THIS TRUST CERTIFICATE SHALL BE DEEMED,
BY ACCEPTANCE HEREOF, DIRECTLY OR THROUGH A NOMINEE, TO HAVE
AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT (EACH OF WHICH SHALL BE
CONCLUSIVE AND BINDING ON SUCH OWNER AND ALL FUTURE OWNERS OF THIS
TRUST CERTIFICATE AND ANY TRUST CERTIFICATE ISSUED IN EXCHANGE OR
SUBSTITUTION FOR THIS TRUST CERTIFICATE WHETHER OR NOT ANY
NOTATION THEREOF IS MADE THEREON) AND, IN ADDITION, TO HAVE AGREED
TO EXCHANGE THIS TRUST CERTIFICATE FOR A TRUST CERTIFICATE IN
BOOK-ENTRY FORM.
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NO SALE OR OTHER TRANSFER OF TRUST CERTIFICATES SHALL BE PERMITTED WHICH
WOULD REQUIRE REGISTRATION OF THE TRUST CERTIFICATES UNDER THE SECURITIES
ACT, OR REQUIRE REGISTRATION OF THE TRUST UNDER THE INVESTMENT COMPANY ACT OR
RESULT IN A VIOLATION OF ANY FEDERAL OR STATE SECURITIES LAW OR REGULATION."
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS
OFFERING CIRCULAR AND THE SUPPLEMENT IN CONNECTION WITH THE OFFER CONTAINED
HEREIN, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE TRUSTEE OR THE DEALER. THIS
OFFERING CIRCULAR AND SUCH SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, ANY TRUST CERTIFICATE IN ANY JURISDICTION
WHERE, OR TO ANY PERSON TO WHOM, IT IS NOT LAWFUL TO MAKE ANY SUCH OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS OFFERING CIRCULAR AND THE
SUPPLEMENT NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCE, CREATE
AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE TRUST
SINCE THE DATE HEREOF OR THE DATE OF THE SUPPLEMENT OR THAT THE INFORMATION
HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
By acquiring a Trust Certificate, each Owner appoints the Trustee to act
on its behalf pursuant to the terms of the Trust Agreement and agrees to be
bound by the terms and conditions of the Trust Agreement to the same extent
as if it were a signatory thereto.
GENERAL INFORMATION
FINANCIAL INFORMATION
Within 90 days of the termination of the Trust, the Trustee will
distribute unaudited financial statements of the Trust to all related Owners.
FURTHER INFORMATION
Further information concerning the Trust Certificates, the Financial
Instrument, the Trust's Agent, the Liquidity Provider, the Remarketing Agent,
the Custodian, the Virginia Custodian, and the operations of the Trust is
available from the Trust's Agent upon request.
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