Governmental plans and certain church plans, while not subject to the fiduciary responsi- bility provisions of ERISA or the prohibited transaction provisions of ERISA and the Code, may nevertheless be subject to local, state or other federal laws that are substantially similar to the foregoing provisions of ERISA and the Code. Fiduciaries of any such plans should consult with their counsel before purchasing any of the Securities. Prospective Plan Investors should consult with their advisors, however, to deter- mine  whether  the  purchase,  holding,  or  resale  of  a  Security  could  give  rise  to  a transaction that is prohibited or is not otherwise permissible under either ERISA or the Code. See "ERISA Considerations" in the Base Offering Circular. The Residual Securities are not offered to, and may not be transferred to, a Plan Investor. LEGAL INVESTMENT CONSIDERATIONS Institutions whose investment activities are subject to legal investment laws and regula- tions or to review by certain regulatory authorities may be subject to restrictions on investment in the Securities. No representation is made about the proper characterization of any Class  for  legal  investment  or  other  purposes,  or  about  the  permissibility  of  the purchase  by  particular  investors  of  any  Class  under  applicable  legal  investment restrictions. Investors should consult their own legal advisors regarding applicable investment restrictions and the effect of any restrictions on the liquidity of the Securities prior to investing in the Securities. See "Legal Investment Considerations" in the Base Offering Circular. PLAN OF DISTRIBUTION Subject to the terms and conditions of the Sponsor Agreement, the Sponsor has agreed to purchase all of the Securities if any are sold and purchased. The Sponsor proposes to offer each Class to the public from time to time for sale in negotiated transactions at varying prices to be determined at the time of sale, plus accrued interest, if any,  from (1) August 1, 2007 on the Fixed Rate Classes and (2) August 20, 2007 on the Floating Rate and Inverse Floating Rate Classes. The Sponsor may effect these transactions by sales to or through certain securities dealers. These dealers may receive compensation in the form of discounts, concessions or commissions from the Sponsor and/or commissions from any purchasers for which they act as agents. Some of the Securities may be sold through dealers in relatively small sales. In the usual case, the commission charged on a relatively small sale of securities will be a higher percentage of the sales price than that charged on a large sale of securities. S-29