As filed with the Securities and Exchange Commission on December 7, 1998
Registration No. 333-
- ------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
<TABLE>
<S> <C>
PRUDENTIAL SECURITIES STRUCTURED ASSETS, INC. RECEIPTS ON CORPORATE SECURITIES
(Exact Name of Registrant as Specified in its TRUST, SERIES CHR 1998-1
Charter) (Exact Name of Registrant as Specified in its Trust
DELAWARE Agreement)
(State of Incorporation) NEW YORK
6799 (State of Incorporation)
(Primary Standard Industrial 6733
Classification Code Number) (Primary Standard Industrial)
31-0944462 Classification Code Number)
(I.R.S. Employer Identification No.) N/A
ONE NEW YORK PLAZA (I.R.S. Employer Identification No.)
14TH FLOOR C/O THE BANK OF NEW YORK
NEW YORK, NEW YORK 10292 101 BARCLAY STREET, 12E
(212) 809-6631 NEW YORK, NEW YORK 10286
(Address, Including Zip Code, and Telephone Number, ATTENTION: CORPORATE TRUST
Including Area Code, of Registrant's Principal (212) 815-5728
Executive Offices) (Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal
Executive Offices)
</TABLE>
---------------------
Felicia Smith, Esq.
Prudential Securities Incorporated
One Seaport Plaza
New York, New York 10292
(212) 214-6324
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)
---------------------
COPIES TO:
Michael A. King, Esq.
Brown & Wood LLP
One World Trade Center
New York, New York 10048
(212) 839-5546
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO
THE PUBLIC: As soon as practicable after this Registration Statement becomes
effective.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. / /
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
==============================================================================================================================
Title Of Each Amount Proposed Proposed Amount Of
Class Of Securities To Be Maximum Offering Maximum Aggregate Registration
To Be Registered Registered (1) Price Per Unit Offering Price (2) Fee (3)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Amortizing Class of Receipts on
Corporate Securities, Series CHR 1998-1 $48,096,190 Not Applicable $47,633,067 $13,242
==============================================================================================================================
</TABLE>
(1) Certificate Principle Balance.
(2) Estimated solely for the purpose of calculating the registration fee, which
was computed pursuant to Rule 457(f) under the Securities Act of 1933, as
amended, based on the book value of the Securities being registered.
(3) $14,051.75 has been previously transmitted to the designated lockbox at
Mellon Bank.
---------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED DECEMBER 7, 1998
EXCHANGE OFFER
FOR UP TO
$48,096,190
AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF
AMORTIZING CLASS CERTIFICATES
A CLASS OF RECEIPTS ON CORPORATE SECURITIES, SERIES CHR 1998-1,
RELATING TO $57,830,000 AGGREGATE PRINCIPAL AMOUNT
OF CHRYSLER CORPORATION 7.40% DEBENTURES
DUE AUGUST 1, 2097
THE EXCHANGE OFFER
We hereby offer to exchange up to $48,096,190 aggregate certificate
principal balance of our Amortizing Class Certificates (the "New Certificates"),
which are covered by a registration statement under the Securities Act of 1933,
as amended (the "Securities Act"), for an equal principal balance of our
outstanding Amortizing Class Certificates (the "Old Certificates"), which were
issued in a private placement.
THE NEW CERTIFICATES
- - The New Certificates that we will exchange for your Old Certificates will
be identical in all material respects to your Old Certificates, except for
certain restrictions on transferring the Old Certificates.
TERMS OF THE EXCHANGE OFFER
- - Expires 5:00 p.m. New York City time, on ___________, 1998, unless
extended.
- - Not conditioned upon any minimum certificate principal balance of the Old
Certificates being tendered for exchange.
- - Subject only to certain customary conditions and a requirement that the
exchange offer not violate applicable law or interpretations of the
Securities and Exchange Commission.
- - We will exchange all Old Certificates that you validly tender and do not
withdraw.
- - You may withdraw any Old Certificates that you tender at any time prior to
the expiration of the exchange offer.
- - The exchange of the Old Certificates for New Certificates will not be a
taxable exchange.
- - We began mailing these prospectuses (and letters of transmittal) on
________, 1998.
YOUR TENDERING OF OLD CERTIFICATES FOR THE NEW CERTIFICATES INVOLVES CERTAIN
RISKS. SEE "RISK FACTORS" BEGINNING ON PAGE 9.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES OR PASSED UPON THE
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION. WE URGE YOU TO READ THIS PROSPECTUS AND THE RELATED LETTER OF
TRANSMITTAL CAREFULLY BEFORE DECIDING WHETHER TO TENDER YOUR OLD CERTIFICATES
PURSUANT TO THE EXCHANGE OFFER.
---------------------
THE DATE OF THIS PROSPECTUS IS __________, 1998.
<PAGE>
TABLE OF CONTENTS
Page
- ------------------------------------------------------------------------------
Where You Can Find More Information..........................................3
Summary......................................................................4
Risk Factors.................................................................9
Use of Proceeds.............................................................11
Formation of the Trust......................................................11
Description of the Trust Assets.............................................11
The Exchange Offer..........................................................16
Description of the New Certificates.........................................22
Description of the Base Trust Agreement.....................................28
Certain U.S. Federal Income Tax Consequences................................32
ERISA Considerations........................................................37
Plan of Distribution........................................................38
Legal Matters...............................................................38
Appendix A - Allocation Schedule...........................................A-1
Appendix B - Amortizing Payment Schedule...................................B-1
---------------------
You should rely only on the information contained or incorporated by
reference in this Prospectus. Neither we nor the Receipts on Corporate
Securities Trust (the "Trust") have authorized any other person to provide you
with different information. If anyone provides you with different or
inconsistent information, you should not rely on it. Neither we nor the Trust
are making an offer to sell these securities in any jurisdiction where the offer
or sale is not permitted. You should assume that the information appearing in
this Prospectus, as well as information we filed previously with the Securities
and Exchange Commission and incorporated by reference, is accurate as of the
date on the front cover of those documents only. Our and the Trust's business,
financial condition, results of operations and prospects may have changed since
that date.
WHERE YOU CAN FIND MORE INFORMATION
We, on the Trust's behalf, will be subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). As a result, we will file reports and other information with the
Securities and Exchange Commission (the "Commission") relating to the Trust. You
may visit the Commission's Public Reference Room in Washington, D.C., New York,
New York or Chicago, Illinois to read and copy any document we file with the
Commission. Please call the Commission at 1-800-SEC-0330 for more information on
its public reference rooms and document copying charges. Our Commission filings
also will be available to you via the Commission's web site at
http://www.sec.gov.
- ------------------
The reports to be filed by us, on the Trust's behalf, primarily will
consist of distribution date statements relating to the distributions made on
the certificates and certain material events regarding the Trust, but not other
financial information or statements. The reports also will refer to the periodic
reports filed by Chrysler Corporation ("Chrysler") so long as Chrysler is a
reporting company under the Exchange Act.
No separate financial statements of the Trust have been included or
incorporated by reference herein. We do not believe such financial statements
would be material to you because the Trust's sole asset consists of debt
obligations of an unaffiliated issuer that is a reporting company under the
Exchange Act. See "Description of the Trust Assets--Chrysler."
The Commission allows us to "incorporate by reference" the information we
file with it. This means that we can disclose information to you by referring
you to those documents. Information incorporated by reference is part of this
Prospectus. Later information filed with the Commission updates and supersedes
this Prospectus.
We incorporate by reference the following documents that were filed with
the Commission and are exhibits to the Registration Statement (File No.
333-_____) of which this Prospectus is a part:
- the Base Trust Agreement dated August 28, 1997 between Prudential
Securities Structured Assets, Inc., as depositor, and The Bank of New
York, as trustee, as amended, which was filed on October 24, 1997 as
Exhibit 4.2 to the Registration Statement on Form S-4 filed by
Prudential Securities Structured Assets, Inc. and the Receipts on
Corporate Securities Trust, Series FDX 1997-1, File No. 333-38745 and
- Base Amendment No. 1 dated February 27, 1998 and Amendment No. 2 dated
April 28, 1998, which were filed on May 6, 1998 as Exhibits 4.4 and 4.5,
respectively, to the Registration Statement on Form S-4 filed by
Prudential Securities Structured Assets, Inc. and the Receipts on
Corporate Securities Trust, Series FDX 1997-1, File No. 333-38745.
This Prospectus incorporates documents by reference that have not been
presented nor delivered to you with this Prospectus. You may request a copy of
these documents, at no cost, by contacting us in writing or by telephone at:
c/o Prudential Securities Structured Assets, Inc.
One New York Plaza
14th Floor
New York, New York 10292-2014
(212) 809-6631
Contact Person: Linda Muller
In order to ensure timely delivery of the documents, any request should be
made by _______________, 1998.
SUMMARY
This summary may not contain all the information that may be important to
you. You should read the entire Prospectus, including documents incorporated by
reference, before tendering your Old Certificates for exchange.
THE EXCHANGE OFFER
Who we are We are Prudential Securities Structured Assets, Inc.
Our main role in this transaction is that of depositor
and issuer. This means that we formed the Trust and
deposited with it the Chrysler debentures. The
Chrysler debentures continue to be held by the Trust
for your benefit.
What we are Offering
to Exchange We are offering to exchange up to $48,096,190
aggregate certificate principal balance of New
Certificates for an equal amount of Old Certificates.
You may tender either all or a portion of your Old
Certificates, provided that you tender them in minimum
denominations of $250,000 and integral multiples of
$1.00 in excess of $250,000.
Purpose of
the Exchange Offer The purpose of the exchange offer is to satisfy our
obligations under a registration rights agreement into
which we entered when we issued the outstanding
Chrysler Certificates. See "The Exchange Offer--Terms
of the Exchange Offer."
Resale of the New
Certificates We are relying on certain no-action letters of the
staff of the Division of Corporation Finance of the
Commission in making this exchange offer. Our legal
counsel's interpretation of these letters is that the
New Certificates may be offered for resale, resold or
otherwise transferred by you without regard to the
registration and prospectus delivery requirements of
the Securities Act. For you to rely on these no-action
letters, you must (i) not be an affiliate of ours,
(ii) have acquired the New Certificates in the
ordinary course of your business, (iii) not have any
arrangement or understanding with any person to
participate in a distribution of the New Certificates
and (iv) not have purchased the Old Certificates
directly from the Trust to resell pursuant to Rule
144A or any other available exemption from the
Securities Act. See "The Exchange Offer--Terms of the
Exchange Offer."
Consequences of Failure
to Exchange Old
Certificates If you hold Old Certificates and do not participate in
the exchange offer, then your registration rights
would terminate at the expiration of the exchange
offer. As a result, you will not be able to offer for
sale or sell your Old Certificates unless you register
the Old Certificates under the Securities Act or meet
an exemption from registration. See "Risk Factors --
Risk Factors Relating to the Certificates and the
Exchange Offer -- Consequences of Failure to
Exchange."
When the Exchange
Offer Expires The exchange offer will expire at 5:00 p.m., New York
City time, on __________, 1998 (30 calendar days
following the commencement of the exchange offer)
unless it is extended.
Conditions to the
Exchange Offer Except for the requirements of applicable federal and
state securities laws, there are no other federal or
state regulatory requirements with which we or the
Trust must comply in connection with this exchange
offer. The exchange offer is not conditioned upon your
tendering any minimum aggregate amount of Old
Certificates. However, the exchange offer is subject
to certain customary conditions, which may be waived
by the Trust. See "The Exchange Offer--Conditions."
How to Tender your
Old Certificates You can accept the exchange offer by completing,
signing and dating the "Letter of Transmittal." You
must then deliver the Letter of Transmittal, along
with the Old Certificates and any other required
documentation, to the Exchange Agent at the address
set forth below. See "The Exchange Offer--Procedures
for Tendering."
You have the Right to
Withdraw your Tender You may withdraw your tender at any time before the
expiration date. To properly withdraw your tender you
must deliver a notice of withdrawal to the Exchange
Agent at the address set forth below. See "The
Exchange Offer--Procedures for Tendering."
Guaranteed Delivery
Procedures If you wish to tender your Old Certificates but they
are not immediately available, or you cannot deliver
them together with the Letter of Transmittal prior to
the expiration date, then you may use the guaranteed
delivery procedures set forth in "The Exchange
Offer--Guaranteed Delivery Procedures."
When you Receive the
New Certificates All New Certificates will be delivered to you after
the expiration date and once the Old Certificates are
accepted. Any and all Old Certificates will be
accepted, subject to certain conditions, at any time
prior to the expiration date. See "The Exchange
Offer--Terms of the Exchange Offer."
Your U.S. Federal Income
Tax Considerations The exchange offer is not considered a sale, exchange
or other taxable event. See "Certain U.S. Federal
Income Tax Consequences--Exchange of Old Certificates
for New Certificates."
Exchange Agent The Trustee is the "Exchange Agent." The Trustee's
address and telephone and facsimile numbers are set
forth below in "The Exchange Offer--Exchange Agent."
Fees and Expenses We will bear all costs associated with the
consummation of the exchange offer and compliance with
the Registration Rights Agreement. See "The Exchange
Offer--Fees and Expenses."
How we will
Use the Proceeds Neither we nor the Trust will receive any cash
proceeds as a result of the exchange offer. The
proceeds from the sale of the Old Certificates were
applied to the purchase of the Chrysler 7.40%
Debentures due August 1, 2097 (the "CHR Debentures")
and to pay issuance costs. See "Use of Proceeds."
THE NEW CERTIFICATES
Securities that
we are Offering We will issue up to $48,096,190 aggregate certificate
principal balance of New Certificates under the
Securities Act. The New Certificates will be issued
under the same base trust agreement that covers the
Old Certificates. Subject to the occurrence of certain
events, the New Certificates (together with a
"Residual Class" of certificates offered by a separate
prospectus) will constitute the entire beneficial
ownership of the Receipts on Corporate Securities
Trust, Series CHR 1998-1.
The New Certificates are identical in all material
respects to the terms of the Old Certificates, except
the New Certificates are not subject to certain
transfer restrictions that apply to the Old
Certificates.
See "Description of the Trust Assets," "The Exchange
Offer--Terms of the Exchange Offer" and "Description
of the New Certificates."
Distribution on the
New Certificates February 1 and August 1 of each year, or if such day
is not a distribution business day, then on the
immediately following distribution business day,
commencing August 1, 1998 and ending August 1, 2018.
Payment on your certificates, however, shall be
subject to the receipt of the corresponding interest
payments on the CHR Debentures.
See "Description of the New Certificates--General" and
"--Collections and Distributions on New Certificates."
Redemption
Optional Redemption Chrysler, at its option, may redeem all or a portion
of the CHR Debentures under certain circumstances and
for a specified redemption price.
See "Description of the New Certificates--Optional
Redemption of CHR Debentures."
Maturity Shortening
Redemption Upon the occurrence of certain tax-related events,
Chrysler has the right to
- shorten the maturity of the CHR Debentures or
- redeem the CHR Debentures in whole (but not in
part) for a specified redemption price.
Such a maturity shortening might increase the amount
of original issue discount required to be included in
your ordinary gross income.
See "Description of the New Certificates--Maturity
Shortening Redemption" and "Certain U.S. Federal
Income Tax Consequences--Purchase and Holding of Trust
Certificates."
In-Kind Distribution If a payment default, acceleration or change in
reporting status occurs on or before August 1, 2018,
then the Trustee will make an "In-Kind Distribution"
of the CHR Debentures to those of you who hold either
Amortizing or Residual Class Certificates. A payment
default, acceleration or change in reporting occurring
after August 1, 2018 will cause an In-Kind
Distribution to be made to the Residual Class only.
The distribution would be made according to a
distribution ratio calculated by a calculation agent.
See "Description of the New Certificates--Optional
Redemption of CHR Debentures." After distribution,
your certificates would be cancelled.
An In-Kind Distribution would terminate any future
distributions by the Trustee to you. Rather, any
future distributions would be made by Chrysler to
those of you who hold CHR Debentures after the In-Kind
Distribution. See "Description of New
Certificates--Distribution of CHR Debentures on
Payment Default, Acceleration or Change in Reporting
Status."
In addition, the In-Kind Distribution could be treated
in whole or in part as the equivalent of a taxable
sale or exchange. See "Certain U.S. Federal Income Tax
Consequences--Distributions."
Exchange of Certificates
for CHR Debentures Commencing August 1, 1999 and terminating February 1,
2018, any of you that holds both Amortizing Class
Certificates and Residual Class Certificates (or, if
on or after August 1, 2018, any holder of Residual
Class Certificates) will have the right on any
Scheduled Distribution Date, on not less than 30 nor
more than 45 days prior written notice to the Trustee,
to exchange certificates of both classes (or, if on or
after August 1, 2018, of Residual Class Certificates)
for CHR Debentures. See "Description of the New
Certificates--Exchange of Certificates for CHR
Debentures."
Limitation on Ownership Upon transfer of an Amortizing Class Certificate, you
must deliver to the Trustee a certification that the
new beneficial owner of the certificate is either
- a United States person or
- a non-United States person who is exempt from
withholding under U.S. federal income tax laws and
has completed an IRS Form W-8 in a manner
satisfactory to the Trustee or its agent.
See "Description of the New Certificates--Limitations
on Beneficial Ownership of Amortizing Class
Certificates."
Record Dates The 15th day immediately preceding each distribution
date.
Denominations The New Certificates will be denominated and payable
in U.S. dollars. They will be issued in definitive,
fully-registered form in minimum denominations of
$250,000 certificate principal balance and integral
multiples of $1.00 in excess thereof.
Your U.S. Federal
Income Tax Consequences Although the characterization of the Trust is not
certain, the Trust should be treated for U.S. federal
income tax purposes as a grantor trust, and the
Trustee intends to report income, gain, loss and
deductions to the Internal Revenue Service ("IRS") on
that basis. If the Trust were not classified as a
grantor trust, then it would be classified as a
partnership. In either event, the Trust will not be
subject to U.S. federal income taxation.
Under the grantor trust characterization, assuming the
CHR Debentures are treated as debt for U.S. federal
income tax consequences, each of you will be treated
as owning the rights to those payments on the CHR
Debentures that are allocable to your certificate(s)
and will be taxed under the "stripped bond" rules of
the Internal Revenue Code of 1986, as amended (the
"Code"). Under those rules, you will be required to
include in ordinary gross income original issue
discount income based on your yield to maturity for
the certificate.
See "Certain U.S. Federal Income Tax Consequences."
Ratings The New Certificates at issuance will be rated "A2" by
Moody's Investors Service, Inc. and "A" by Standard &
Poor's Rating Services.
A security rating is not a recommendation to buy, sell
or hold securities and may be subject to revision or
withdrawal at any time by the assigning rating
organization.
No Further Rule
3a-7 Limitation As a result of the rating assigned to the New
Certificates, they will not be subject to certain
restrictions on transfer that originally were
applicable to the Old Certificates pursuant to Rule
3a-7 under the Investment Company Act of 1940, as
amended.
ERISA Considerations Certain pension, profit sharing or other employee
benefit, or other plans (such as individual retirement
accounts) may be prohibited from investing in the New
Certificates. Investing in the New Certificates may
generate excise tax and other liabilities under the
Employee Retirement Income Security Act of 1974, as
amended, and the Internal Revenue Code of 1986, as
amended. See "ERISA Considerations."
<PAGE>
RISK FACTORS
You should review carefully the information contained elsewhere in this
Prospectus and should especially consider the following risk factors.
LIMITED OBLIGATIONS AND INTERESTS
The New Certificates will not represent an obligation of, or an interest
in, either us or any of our affiliates. Nor will the New Certificates be insured
or guaranteed by any government agency, or by us, the Trustee, any of our or the
Trustee's affiliates, or any other person.
WE HAVE NOT PROVIDED YOU WITH ANY DETAILED INFORMATION ABOUT CHRYSLER OR THE CHR
DEBENTURES
We have not provided you with any detailed information with respect to
- Chrysler or the CHR Debentures,
- any risk factors relating to Chrysler or the CHR Debentures or
- any rights or obligations, legal, financial or otherwise, arising under
or related to the CHR Debentures.
See "Description of the Trust Assets."
EVENTS OF DEFAULT
If there is ever an event of default on the CHR Debentures, then the risk
of loss related to the CHR Debentures lies entirely with you. If a payment
default, acceleration or change in reporting status occurs with respect to
Chrysler or the CHR Debentures, then the Trustee will distribute the CHR
Debentures to you in an In-Kind Distribution. See "Description of the New
Certificates--Distribution of CHR Debentures on Payment Default, Acceleration or
Change in Reporting Status."
An In-Kind Distribution may be treated in whole or in part as equivalent to
a taxable sale or exchange. See "Certain U.S. Federal Income Tax
Consequences--Distributions."
BANKRUPTCY RISKS
The New Certificates are payable solely from payments made on the CHR
Debentures by Chrysler. Chrysler is subject to laws permitting bankruptcy,
moratorium, reorganization or other actions, which, in the event of financial
difficulties of Chrysler, could cause delays in distribution, partial
distribution or non-distribution of payments to you with respect to the New
Certificates. See "Description of the New Certificates--Distribution of CHR
Debentures on Payment Default, Acceleration or Change in Reporting Status."
MATURITY AND REDEMPTION CONSIDERATIONS
The Amortizing Class Certificates are scheduled to receive semiannual
distributions as described in "Description of the New Certificates--Collections
and Distributions on the New Certificates." Potentially, the maturity and yield
of the New Certificates could be affected by
- a cash distribution to you upon a maturity shortening redemption or an
optional redemption or
- a distribution of the CHR Debentures to you upon an In-Kind
Distribution.
In the event of a cash distribution on a shortened maturity date, you
- will receive your respective shares of the redemption price, including
principal and accrued and unpaid interest, without premium and
- may then need to reinvest the distribution at the then-prevailing market
rates rather than receiving scheduled distributions on your
certificate(s).
In the event of a maturity shortening, you might have to increase the
original issue discount required to be included in your ordinary gross income.
In the event of a cash distribution on an optional redemption date, you
- will receive your respective shares of the redemption price, including
principal and accrued and unpaid interest, without premium and
- may then need to reinvest the distribution at the then-prevailing market
rates rather than receiving scheduled distributions on your
certificate(s).
See "Description of the New Certificates--Optional Redemption of CHR
Debentures," "Description of the New Certificates--Maturity Shortening
Redemption" and "Certain U.S. Federal Income Tax Consequences--Purchase and
Holding of Trust Certificates."
Upon a payment default, acceleration or change in reporting status
occurring on or before August 1, 2018,
- the Trustee will make an In-Kind Distribution of CHR Debentures to both
you and holders of Residual Class Certificates,
- you will receive your share of the CHR Debentures pursuant to a
distribution ratio and
- the distribution may be treated in whole or in part as equivalent to a
taxable sale or exchange.
See "Description of the New Certificates--Distribution of CHR Debentures on
Payment Default, Acceleration or Change in Reporting Status" and "Certain U.S.
Federal Income Tax Consequences--Distributions."
PASSIVE NATURE OF THE RECEIPTS ON CORPORATE SECURITIES TRUST, SERIES 1998-1
The Trustee will hold the CHR Debentures for your benefit. The Trust
generally will hold the CHR Debentures to maturity and not dispose of them
regardless of adverse events, financial or otherwise, which may affect Chrysler
or the value of the CHR Debentures. The Trust, however, will surrender the CHR
Debentures pursuant to an In-Kind Distribution to you in exchange for your
certificates.
RISK FACTORS RELATING TO THE CERTIFICATES AND THE EXCHANGE OFFER
Consequences of Failure to Exchange
Those of you who do not exchange your Old Certificates for New Certificates
pursuant to the exchange offer will continue to be subject to the limitations on
transferability applicable to the Old Certificates. This limitation is due to
the fact that the Old Certificates were not issued under an effective
registration statement under the Securities Act. A description of the limitation
can be found on the legend of the Old Certificates.
Resales of the Old Certificates may be made under an effective registration
statement or pursuant to an exemption from the Securities Act and applicable
state securities laws. We do not currently anticipate that we will register
resales of the Old Certificates under the Securities Act. To the extent that Old
Certificates are tendered and accepted in the exchange offer, the trading market
for Old Certificates (if any) could be adversely affected.
Absence of a Public Market for the New Certificates
Prior to the exchange offer, there was no public market for the New
Certificates and it is uncertain whether such a market will develop. In
addition, neither we nor the Trust intends to apply for listing of the New
Certificates on any securities exchange or for quotation of the New Certificates
on The Nasdaq Stock Market's National Market or otherwise. The Trust has been
advised by Prudential Securities that it currently intends to make a market in
the New Certificates, as permitted by applicable laws and regulations, after
consummation of the exchange offer. Prudential Securities is not obligated,
however, to make a market in the New Certificates. Any such market-making
activity may be discontinued at any time without notice and at the sole
discretion of Prudential Securities. There can be no assurance as to the
liquidity of the market for the New Certificates or that any active market for
the New Certificates will develop or continue. If an active market does not
develop or continue, then the market price and liquidity of the New Certificates
may be affected adversely.
USE OF PROCEEDS
There will be no cash proceeds payable to Prudential Securities Structured
Assets, Inc. ("PSSA") or the Receipts on Corporate Securities Trust, Series CHR
1998-1 (the "Trust") from the issuance of the New Certificates pursuant to the
Letter of Transmittal and this Prospectus (together the "Exchange Offer"). PSSA
sold the Old Certificates to Prudential Securities, an affiliate of PSSA, as
initial purchaser. The proceeds from the sale of the Old Certificates were
received by PSSA and were applied to its purchase of the CHR Debentures, which,
after the purchase thereof, were deposited by PSSA in the Trust. PSSA also paid
the issuance costs out of the proceeds from the sale of Old Certificates. PSSA
obtained an intercompany loan from Prudential Securities Group Inc. to the
extent the net proceeds from the sale of the Old Certificates were insufficient
to pay the full purchase price of the CHR Debentures and issuance expenses. Such
intercompany loan was repaid in full from the proceeds of a subsequent sale of
the Amortizing Class Certificates.
FORMATION OF THE TRUST
The Trust was formed under New York law pursuant to the Base Trust
Agreement dated August 28, 1997, as amended by Base Amendment No. 1 dated
February 27, 1998 and Amendment No. 2 dated April 28, 1998, and as supplemented
by the Series CHR 1998-1 Supplement dated June 9, 1998. Concurrently with the
execution and delivery of the Amortizing and Residual Class Certificates (the
"Trust Certificates" or "Certificates"), PSSA deposited the CHR Debentures with
the Trustee. The Trustee, on behalf of the Trust, accepted the CHR Debentures
and delivered the Trust Certificates to PSSA. The Trustee is holding the CHR
Debentures for the benefit of the holders of the Trust Certificates.
DESCRIPTION OF THE TRUST ASSETS
The assets of the Trust consist solely of $57,830,000 aggregate principal
amount of 7.40% Debentures due August 1, 2097 issued by Chrysler and having the
characteristics described in the CHR Debentures Prospectus. The CHR Debentures
were originally issued by Chrysler on July 15, 1997 as part of an underwritten
public offering of $500,000,000 aggregate principal amount of such securities
(CUSIP No. 171196AT5) pursuant to a registration statement on Form S-3 (File No.
333-21589) (together with all amendments and exhibits thereto, the "CHR
Debentures Registration Statement"), filed by Chrysler, with the Commission
under the Securities Act. Payments of interest are required to be made on the
CHR Debentures semiannually on the first day of each February and August,
commencing February 1, 1998, or if such day is not a business day, on the next
succeeding business day.
The CHR Debentures deposited in the Trust represent the principal assets of
the Trust that are available to make distributions in respect of the Trust
Certificates. Consequently, the ability of holders of New Certificates to
receive cash distributions in respect of the New Certificates in the event of a
Maturity Shortening Redemption will depend on the Trust's receipt of payments
on, or in respect of, the CHR Debentures in such an event.
The CHR Debentures Prospectus states that the CHR Debentures rank pari
passu in right of payment with all existing and future unsecured and
unsubordinated indebtedness of Chrysler. Under the "CHR Debentures Indenture,"
the events of default are as follows: (a) default for more than 30 days in the
payment of any interest; (b) default in the payment of principal of, or premium,
if any, when due; (c) failure to perform or breach of any other covenant or
warranty of CHR in the Indenture with respect to the CHR Debentures, continued
for 90 days after written notice has been given by the Indenture Trustee or the
holders of at least 10% in principal amount of the CHR Debentures, as provided
in the Indenture; (d) acceleration of the maturity of any indebtedness for money
borrowed by CHR of $5,000,000 or more at the time outstanding, if such
acceleration is not rescinded or annulled within 10 days after notice by the
Indenture Trustee or the holders of 10% in principal amount of the CHR
Debentures; (e) default in the deposit of any sinking fund payment, when and as
due by the terms of the CHR Debentures; and (f) certain events in bankruptcy,
insolvency or reorganization in respect of Chrysler.
The CHR Debentures may be redeemed by Chrysler prior to maturity. See
"Description of the New Certificates--Optional Redemption of CHR Debentures."
The CHR Debentures are denominated in U.S. dollars and issued in fully
registered form without coupons in denominations of $1,000 and any integral
multiples thereof, unless otherwise specified pursuant to a Resolution of the
Board of Directors. The CHR Debentures were issued in book-entry form only and
are held through participants in the Depository Trust Company.
OPTIONAL REDEMPTION OF CHR DEBENTURES
On or after August 1, 2087, the CHR Debentures may be redeemed prior to
maturity, as a whole or in part, at the option of Chrysler (a "Late Optional
Redemption"), at any time, at a redemption price equal to 100% of the principal
amount being redeemed and together with accrued interest to the date of
redemption (a "Late Optional Redemption Date"). In addition, prior to August 1,
2087, the CHR Debentures may be redeemed, as a whole or in part at any time, at
the option of Chrysler (an "Early Optional Redemption"; as used herein, the term
"Optional Redemption" shall refer to either a Late Optional Redemption or an
Early Optional Redemption, as the context requires), at a redemption price equal
to the greater of (i) 100% of the principal amount being redeemed and (ii) the
sum of the present values of the Remaining Scheduled Payments (as defined below)
of principal and interest thereon discounted to the date of redemption (an
"Early Optional Redemption Date"; as used herein, the term "Optional Redemption
Date" shall refer to either a Late Optional Redemption Date or an Early Optional
Redemption Date, as the context requires) on a semiannual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury Rate (as
defined below) plus 20 basis points together, in either case, with accrued
interest thereon to the date of redemption. The "Treasury Rate" means, with
respect to any redemption date, the rate per annum equal to the semiannual
equivalent yield to maturity (computed as of the second business day immediately
preceding such redemption date) of the Comparable Treasury Issue, assuming a
price for the Comparable Treasury Issue (as defined below) (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price (as
defined below) for such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker (as defined below) that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the Debentures. "Independent Investment
Banker" means one of the Reference Treasury Dealers (as defined below) appointed
by Chrysler.
"Comparable Treasury Price" means, with respect to any redemption date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such business day, (A) the average
of the Reference Treasury Dealer Quotations (as defined below) for such
redemption date after excluding the highest and lowest such Reference Treasury
Dealer Quotations or, (B) if the Trustee obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such Quotations. "Reference
Treasury Dealer Quotations" means, with respect to each Reference Treasury
Dealer and any redemption date, the average, as determined by the Trustee, of
the bid and asked prices for the Comparable Treasury Issue (expressed in each
case as a percentage of its principal amount) quoted in writing to the Trustee
by such Reference Treasury Dealer at 5:00 p.m., on the third business day
preceding such redemption date.
"Reference Treasury Dealer" means each of Salomon Brothers Inc, Chase
Securities Inc., Credit Suisse First Boston Corporation, Goldman, Sachs & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities Inc.,
Morgan Stanley & Co. Incorporated and their respective successors; provided,
however, that if any of the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"), the
Company shall substitute therefor another nationally recognized investment
banking firm that is a Primary Treasury Dealer.
"Remaining Scheduled Payments" means, with respect to each CHR Debenture to
be redeemed, the remaining scheduled payments of the principal thereof and
interest thereon that would be due after the related redemption date but for
such redemption; provided, however, that, if such redemption date is not an
interest payment date with respect to such CHR Debenture, the amount of the next
succeeding scheduled interest payment thereon will be reduced by the amount of
interest accrued thereon to such redemption date.
In the event of an Optional Redemption, the Certificates will be redeemed
on the Optional Redemption Date. In such event, the Trustee will distribute the
payment received on the CHR Debentures on the Optional Redemption Date, to the
holders, if any, of the Amortizing Class Certificates and the Residual Class
Certificates, respectively, in the same ratio as (i) the present value of all
originally scheduled future payments on the Amortizing Class Certificates bears
to (ii) the present value of all originally scheduled future payments on the CHR
Debentures after August 1, 2018, discounted semiannually in each case at a rate
of 7.40% per annum (such ratio being the "Distribution Ratio") to the Optional
Redemption Date. Such ratio will be calculated by the Calculation Agent. In the
case of an Optional Redemption of less than all of the CHR Debentures, the
Trustee will distribute the payment received on the CHR Debentures on the
Optional Redemption Date to the holders, if any, of the Amortizing Class
Certificates and the Residual Class Certificates on the basis of the
Distribution Ratio as of the Optional Redemption Date on a pro rata basis; such
a distribution will result in a reduction (based on the percentage of CHR
Debentures redeemed) of the Residual Class Certificates Certificate Principal
Balance and a recalculation of the Certificate Principal Balance of, and Fixed
Payments (as defined in the Base Trust Agreement) with respect to, the
outstanding Amortizing Class Certificates, if any, based on the remaining CHR
Debentures after such redemption.
MATURITY SHORTENING REDEMPTION
The CHR Debentures Prospectus Supplement states as follows: Chrysler
intends to deduct interest paid on the CHR Debentures for U.S. federal income
tax purposes. However, there have been proposed tax law changes that, among
other things, would have prohibited an issuer from deducting interest payments
on debt instruments with a maturity of more than 40 years. While none of these
proposals have become law, there can be no assurance that similar legislation
affecting Chrysler's ability to deduct interest paid on the CHR Debentures will
not be enacted in the future or that such legislation would not have a
retroactive effective date.
The CHR Debentures Prospectus Supplement states as follows: Upon the
occurrence of a tax event (as defined below in "Description of the New
Certificates--Maturity Shortening Redemption"), Chrysler will have the right to
shorten the maturity of the CHR Debentures to the extent required, in the
opinion of a nationally recognized independent tax counsel experienced in such
matters, so that, after such shortening of the maturity, interest paid on the
CHR Debentures will be deductible for U.S. federal income tax purposes or, if
such counsel is unable to opine definitively as to such a minimum period, the
minimum extent so required as determined in good faith by the Board of Directors
of Chrysler, after receipt of an opinion of such counsel regarding the
applicable legal standards. There can be no assurance that Chrysler would not
exercise its right to shorten the maturity of the CHR Debentures upon the
occurrence of such a tax event or as to the period by which such maturity would
be shortened. In the event that Chrysler elects to exercise its right to shorten
the maturity of the CHR Debentures on the occurrence of a tax event, Chrysler
will mail a notice of shortened maturity to each holder of the CHR Debentures by
first-class mail not more than 60 days after the occurrence of such tax event,
stating the new maturity date of the CHR Debentures. Such notice shall be
effective immediately upon mailing.
The CHR Debentures Prospectus Supplement states as follows: Chrysler
believes that the CHR Debentures constitute indebtedness for U.S. federal income
tax purposes under current law and that the shortening of the maturity of the
CHR Debentures will not be a taxable event to holders. Prospective investors
should be aware, however, that the shortening of the maturity of the CHR
Debentures will be a taxable event to holders if the CHR Debentures are treated
as equity for purposes of U.S. federal income taxation before the maturity is
shortened, assuming that the CHR Debentures of shortened maturity are treated as
debt for such purposes.
The information under this caption is derived solely from the description
of the CHR Debentures contained in the CHR Debentures Prospectus and the CHR
Debentures Prospectus Supplement. An investor may wish to read this Prospectus
in conjunction with (i) the CHR Debentures Prospectus, (ii) the CHR Debentures
prospectus Supplement and (iii) the CHR Debentures Prospectus (ii) the CHR
Debentures Prospectus Supplement and (iii) the CHR Debentures Registration
Statement, of which the CHR Debentures Prospectus is a part. This Prospectus
relates only to the New Certificates offered hereby and does not relate to an
offering of the CHR Debentures. No representation is made by the Trust, the
Trustee or PSSA as to the accuracy or completeness of the information contained
in the CHR Debentures Prospectus, the CHR Debentures Prospectus Supplement or
the CHR Debentures Registration Statement.
CHR DEBENTURES INDENTURE
The CHR Debentures were issued under the CHR Debentures Indenture, dated
March 1, 1985, between Chrysler and Manufacturers Hanover Trust Company, as
Trustee.
MODIFICATION, AMENDMENT AND WAIVER
The CHR Debentures Prospectus states as follows: The CHR Debentures
Indenture permits Chrysler and the Trustee, with the consent of the holders of
66 2/3% in principal amount of each series of debt securities at the time
outstanding thereunder and affected thereby, to execute supplemental indentures
adding any provisions to or changing or eliminating any of the provisions of the
CHR Debentures Indenture or modifying the rights of the holders of debt
securities of each such series, except that no such supplemental indenture may,
without the consent of the holders of each affected series of debt securities,
(a) change the maturity of debt securities of such series or any installment of
interest thereon or reduce the principal amount thereof or premium, if any, or
interest thereon, or (b) reduce the aforesaid percentage of debt securities of
such series, the consent of the holders of which is required for any such
supplemental indenture. Compliance by Chrysler with certain restrictive
covenants may be waived in particular cases with the consent of the holders of
66 2/3% in principal amount of the outstanding debt securities of each series
affected thereby.
The information under this caption is derived solely from the description
of the CHR Debentures contained in the CHR Debentures Prospectus and the CHR
Debentures Prospectus Supplement. An investor may wish to read this Prospectus
in conjunction with (i) the CHR Debenture Prospectus, (ii) the CHR Debentures
Prospectus Supplement and (iii) the CHR Debentures Registration Statement, of
which the CHR Debentures Prospectus is a part. This Prospectus relates only to
the New Certificates offered hereby and does not relate to an offering of the
CHR Debentures. No representation is made by the Trust, the Trustee or PSSA as
to the accuracy or completeness of the information contained in the CHR
Debentures Prospectus, the CHR Debentures Prospectus Supplement or the CHR
Debentures Registration Statement.
CHRYSLER
This Prospectus does not provide information with respect to Chrysler. No
investigation has been made of the financial condition or creditworthiness of
Chrysler or any of its subsidiaries, of the potential affects of the Chrysler
and Daimler-Benz AG merger as reported pursuant to the Form 8-K, dated May 7,
1998, filed by Chrysler with the Commission, or of the ratings on the CHR
Debentures, in connection with the issuance of the New Certificates. PSSA is not
an affiliate of Chrysler. Prospective purchasers of the New Certificates should
consider carefully Chrysler's financial condition and its ability to make
payments in respect of the CHR Debentures. An investor in the Certificates
should obtain and evaluate the same information concerning Chrysler as it would
if it were investing directly in the CHR Debentures. All information contained
in this Prospectus regarding Chrysler is derived from the CHR Debentures
Prospectus. Neither PSSA nor the Trust nor any of their respective affiliates
has participated in the preparation of the CHR Debentures Prospectus, CHR
Debentures Prospectus Supplement or the CHR Debentures Registration Statement,
and takes no responsibility for the accuracy or completeness of the information
provided therein.
Chrysler presently is subject to the informational requirements of the
Exchange Act, and in accordance therewith files reports and other information
(including financial information) with the Commission. Copies of such reports
and other information may be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549; Seven World Trade Center, Suite 1300, New York, New York
10048; and Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661, and may be obtained from the Public Reference Section
of the Commission at Washington, D.C. 20549, at prescribed rates. The Commission
maintains a Web site at http://www.sec.gov containing reports, proxy statements
and other information regarding registrants that file electronically with the
Commission. In addition, certain material described above and other information
also will be available for inspection at the offices of the New York Stock
Exchange at 20 Broad Street, New York, New York, 10005. Neither PSSA nor the
Trust nor any of their respective affiliates has participated in the preparation
of any of the foregoing reports or other information filed by Chrysler with the
Commission or the New York Stock Exchange or has made any investigation with
respect to the information contained therein.
If Chrysler ceases to be a reporting company under the Exchange Act, then
an In-Kind Distribution will be made. See "Description of the New
Certificates--Distribution of CHR Debentures on Payment Default, Acceleration or
Change in Reporting Status." In that event, the Trust no longer would provide
information regarding the CHR Debentures to the Certificate holders.
The Trust will have no assets other than the CHR Debentures from which to
make distributions of amounts due in respect of the Trust Certificates.
Consequently, the ability of holders of Trust Certificates to receive
distributions and the timeliness of such distributions in respect of the New
Certificates will depend on the Trust's receipt of payments on the CHR
Debentures from Chrysler.
RATINGS
The CHR Debentures have been rated "A2" and "A" by Moody's Investors
Service, Inc. and Standard & Poor's Rating Services, respectively. The New
Certificates will be rated "A2" by Moody's Investors Service, Inc. and "A" by
Standard & Poor's Rating Services at initial issuance. Any rating of the CHR
Debentures or the New Certificates is not a recommendation to purchase, hold or
sell the CHR Debentures or the New Certificates, and there can be no assurance
that a rating will remain for any given period of time or that a rating will not
be revised or withdrawn entirely by a rating agency if in its judgment
circumstances in the future so warrant.
PRUDENTIAL SECURITIES AND CHRYSLER
From time to time, Prudential Securities may be engaged by Chrysler as an
underwriter, or placement agent, in an advisory capacity or in other business
arrangements. In addition, Prudential Securities or another affiliate of PSSA
may make a market in other outstanding securities of Chrysler.
THE EXCHANGE OFFER
The summary herein of certain provisions of the Registration Rights
Agreement does not purport to be complete and reference is made to the
provisions of the Registration Rights Agreement, filed as an exhibit to the
Registration Statement of which this Prospectus is a part.
TERMS OF THE EXCHANGE OFFER
In connection with the sale of the Old Certificates pursuant to a Purchase
Agreement dated as of August 25, 1997 and the Terms Agreement dated as of June
9, 1998, between PSSA and Prudential Securities, their respective assignees
became entitled to the benefits of the Registration Rights Agreement attached as
an exhibit hereto.
Under the Registration Rights Agreement, except in certain circumstances,
PSSA is obligated to (i) file a Registration Statement (the "Exchange Offer
Registration Statement"), of which this Prospectus is a part, for a registered
exchange offer with respect to an issue of New Certificates identical in all
material respects to the Old Certificates within 180 calendar days after June 9,
1998, the date the Old Certificates were issued and (ii) use its reasonable best
efforts to cause the Registration Statement to become effective within a certain
specified period thereafter. In addition, the Registration Rights Agreement
provides that the Trust shall keep the Exchange Offer open for a period of not
less than 30 calendar days and not more than 45 days after the date notice of
the Exchange Offer is mailed to holders. The Exchange Offer being made hereby,
if commenced and consummated within the time periods described in this
paragraph, will satisfy those requirements under the Registration Rights
Agreement.
Upon the terms and subject to the conditions set forth in this Prospectus
and in the Letter of Transmittal (which together constitute the Exchange Offer),
all Old Certificates validly tendered and not withdrawn prior to 5:00 p.m., New
York City time, on ____________, 1998 (the "Expiration Date") will be accepted
for exchange. New Certificates of the same class will be issued in exchange for
an equal principal amount of outstanding Old Certificates accepted in the
Exchange Offer. Old Certificates may be tendered only in minimum denominations
of $250,000 certificate principal balance and integral multiples of $1.00 in
excess thereof. This Prospectus, together with the Letter of Transmittal, is
being sent to all registered holders as of _____, 1998. The Exchange Offer is
not conditioned upon any minimum principal amount of Old Certificates being
tendered in exchange. However, the obligation to accept Old Certificates for
exchange pursuant to the Exchange Offer is subject to certain conditions as set
forth herein under "--Conditions."
Old Certificates shall be deemed to have been accepted as validly tendered
when, as and if the Trustee has given oral or written notice thereof to the
Exchange Agent. The Exchange Agent will act as agent for the tendering holders
of Old Certificates for the purposes of receiving the New Certificates and
delivering New Certificates to such holders.
Based on interpretations by the staff of the Commission, as set forth in
no-action letters issued to third parties (the "Exchange Offer No-Action
Letters"), legal counsel has advised that the New Certificates issued pursuant
to the Exchange Offer may be offered for resale, resold or otherwise transferred
by holders thereof (other than a broker-dealer who acquires such New
Certificates directly from PSSA for resale pursuant to Rule 144A under the
Securities Act or any other available exemption under the Securities Act or any
holder that is an "affiliate" of PSSA or the Trust as defined in Rule 405 under
the Securities Act), without compliance with the registration and prospectus
delivery provisions of the Securities Act, provided that such New Certificates
are acquired in the ordinary course of such holders' business and such holders
are not engaged in, and do not intend to engage in, a distribution of such New
Certificates and have no arrangement with any person to participate in a
distribution of such New Certificates. By tendering the Old Certificates in
exchange for New Certificates, each holder, other than a broker-dealer, will
represent to the Trust that (i) it is not an affiliate of PSSA or the Trust (as
defined in Rule 405 under the Securities Act) or a broker-dealer tendering Old
Certificates acquired directly from the Trust or PSSA for its own account; (ii)
any New Certificates to be received by it will be acquired in the ordinary
course of its business; and (iii) it is not engaged in, and does not intend to
engage in, a distribution of such New Certificates and has no arrangement or
understanding to participate in a distribution of the New Certificates. If a
holder of Old Certificates is engaged in or intends to engage in a distribution
of the New Certificates or has any arrangement or understanding with respect to
the distribution of the New Certificates to be acquired pursuant to the Exchange
Offer, such holder may not rely on the applicable interpretations of the staff
of the Commission and must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any secondary resale
transaction. Each broker-dealer that receives New Certificates for its own
account ("Restricted Broker-Dealer") pursuant to the Exchange Offer must
acknowledge that it will deliver a prospectus in connection with any resale of
such New Certificates. The Letter of Transmittal states that by so acknowledging
and by delivering a prospectus, a Restricted Broker-Dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a Restricted Broker-Dealer in connection with resales of New Certificates
received in exchange for Old Certificates where such Old Certificates were
acquired by such Restricted Broker-Dealer as a result of market-making
activities or other trading activities. PSSA has agreed that for a period of one
year it will cause this Prospectus to be made available to any Restricted
Broker-Dealer for use in connection with any such resale. See "Plan of
Distribution."
If (i) PSSA is not required to file an Exchange Offer Registration
Statement with respect to the New Certificates because the Exchange Offer is not
permitted by applicable law or (ii) any holder of Old Certificates shall notify
PSSA within 20 Business Days following the consummation of the Exchange Offer
that (A) such holder was prohibited by law or Commission policy from
participating in the Exchange Offer or (B) such holder may not resell the
Certificates acquired by it in the Exchange Offer to the public without
delivering a prospectus and the prospectus contained in the Exchange Offer
Registration Statement is not appropriate or available for such resales by such
holder or (C) such holder is a broker-dealer and holds Old Certificates acquired
directly from the Trust or PSSA or one of their respective Affiliates, then PSSA
shall (x) cause to be filed, on or prior to 60 days after the date on which PSSA
determines that it is not required to file the Exchange Offer Registration
Statement pursuant to clause (i) above, or 60 days after the date on which PSSA
receives the notice specified in clause (ii) above, a shelf registration
statement pursuant to Rule 415 under the Securities Act (which may be an
amendment to the Exchange Offer Registration Statement (in either event, the
"Shelf Registration Statement") relating to all Old Certificates the holders of
which shall have provided the information required by the Registration Rights
Agreement and shall (y) use its best efforts to cause such Shelf Registration
Statement to become effective within 120 days after the date on which PSSA
becomes obligated to file such Shelf Registration Statement. PSSA shall use its
best efforts to keep the Shelf Registration Statement continuously effective,
supplemented and amended to the extent necessary to ensure that it is available
for sales of Old Certificates by the holders thereof entitled to the benefit of
the Shelf Registration Statement, and to ensure that it conforms with the
requirements of the Registration Rights Agreement, the Securities Act and the
policies, rules and regulations of the Commission as announced from time to
time, for a period of not more than one year following the date on which such
Shelf Registration Statement first becomes effective under the Securities Act or
such shorter period that will terminate when all the Old Certificates covered by
the Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement.
Upon consummation of the Exchange Offer, subject to certain exceptions,
holders of Old Certificates who do not exchange their Old Certificates for New
Certificates in the Exchange Offer will no longer be entitled to registration
rights and will not be able to offer or sell their Old Certificates, unless such
Old Certificates are subsequently registered under the Securities Act (which,
subject to certain limited exceptions, PSSA will have no obligation to do),
except pursuant to an exemption from, or in a transaction not subject to, the
Securities Act and applicable state securities laws. See "Risk Factors--Risk
Factors Relating to the New Certificates and the Exchange Offer."
NEITHER PSSA NOR THE TRUSTEE MAKES ANY RECOMMENDATION TO HOLDERS OF OLD
CERTIFICATES AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ALL OR ANY
PORTION OF THEIR OLD CERTIFICATES PURSUANT TO THE EXCHANGE OFFER. IN ADDITION,
NO ONE HAS BEEN AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF OLD
CERTIFICATES MUST MAKE THEIR OWN DECISION WHETHER TO TENDER PURSUANT TO THE
EXCHANGE OFFER AND, IF SO, THE AGGREGATE AMOUNT OF OLD CERTIFICATES TO TENDER
AFTER READING THIS PROSPECTUS AND THE LETTER OF TRANSMITTAL AND CONSULTING WITH
THEIR ADVISERS, IF ANY, BASED ON THEIR OWN FINANCIAL POSITION AND REQUIREMENTS.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS; TERMINATION
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
______________ (30 calendar days following the commencement of the Exchange
Offer), unless PSSA, in its sole discretion, instructs the Exchange Agent to
extend the Exchange Offer, in which case the term "Expiration Date" shall mean
the latest date to which the Exchange Offer is extended.
In order to extend the Expiration Date, PSSA will notify the Exchange Agent
of any extension by oral or written notice and will cause the Exchange Agent to
notify the holders of the Old Certificates by means of a press release or other
public announcement prior to 9:00 A.M., New York City time, on the next business
day after the previously scheduled Expiration Date. Such announcement may state
that the Trust is extending the Exchange Offer for a specified period of time.
PSSA reserves the right to cause the Trust and the Exchange Agent (i) to
delay acceptance of any Old Certificates, to extend the Exchange Offer or to
terminate the Exchange Offer and not permit acceptance of Old Certificates not
previously accepted if any of the conditions set forth herein under
"--Conditions" shall have occurred and shall not have been waived by PSSA, by
giving oral or written notice of such delay, extension or termination to the
Exchange Agent, or (ii) to cause the Trustee to amend the terms of the Exchange
Offer in any manner deemed by it to be advantageous to the holders of the Old
Certificates. Any such delay in acceptance, extension, termination or amendment
will be followed as promptly as practicable by oral or written notice thereof to
the Exchange Agent. If the Exchange Offer is amended in a manner determined by
PSSA to constitute a material change, PSSA promptly will cause such amendment to
be disclosed in a manner reasonably calculated to inform the holders of the Old
Certificates of such amendment.
Without limiting the manner in which the Exchange Agent may choose to make
public announcement of any delay, extension, amendment or termination of the
Exchange Offer, the Exchange Agent shall have no obligation to publish,
advertise, or otherwise communicate any such public announcement, other than by
making a timely release to an appropriate news agency.
PROCEDURES FOR TENDERING
To tender in the Exchange Offer, a holder must complete, sign and date the
Letter of Transmittal, or a facsimile thereof, have the signatures thereon
guaranteed if required by the Letter of Transmittal, and mail or otherwise
deliver such Letter of Transmittal or such facsimile, together with any other
required documents, to the Exchange Agent prior to the Expiration Date. In
addition, (A) either (i) certificates for such Old Certificates must be received
by the Exchange Agent along with the Letter of Transmittal or (ii) the holder
must comply with the guaranteed delivery procedures described below, and (B) a
certification to the effect that the beneficial owner thereof (whether such
registered holder or the ultimate beneficiary for whom it holds such Old
Certificate(s)) is either (i) a United States person or (ii) a non-United States
person who is exempt from withholding under U.S. federal income tax laws and has
completed, accurately and in a manner reasonably satisfactory to the Trustee or
its agent, an IRS Form W-8 and delivered such Form to the Trustee or its agent
unless such certificate has already been provided to the Trustee in connection
with the purchase of the Old Certificate(s) being tendered and the status of the
beneficial owner has not changed. THE METHOD OF DELIVERY OF OLD CERTIFICATES,
LETTERS OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND
RISK OF THE HOLDERS. IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT
REGISTERED MAIL, PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED, BE USED. IN
ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY. NO
LETTERS OF TRANSMITTAL OR OLD CERTIFICATES SHOULD BE SENT TO PSSA. Delivery of
all documents must be made to the Exchange Agent at its address set forth below.
Holders also may request their respective brokers, dealers, commercial banks,
trust companies or nominees to effect such tender for such holders.
The tender by a holder of Old Certificates will constitute an agreement
between such holder and the Trust in accordance with the terms and subject to
the conditions set forth herein and in the Letter of Transmittal.
Only a holder of Old Certificates may tender such Old Certificates in the
Exchange Offer. The term "holder" with respect to the Exchange Offer means any
person in whose name Old Certificates are registered on the books of the Trustee
or any other person who has obtained a properly completed bond power from the
registered holder.
Any beneficial owner whose Old Certificates are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact such registered holder promptly and instruct such
registered holder to tender on his behalf. If such beneficial owner wishes to
tender on his own behalf, such beneficial owner must, prior to completing and
executing the Letter of Transmittal and delivering his Old Certificates, either
make appropriate arrangements to register ownership of the Old Certificates in
such owner's name or obtain a properly completed bond power from the registered
holder. The transfer of registered ownership may take considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by any member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
a commercial bank or trust company having an office or correspondent in the
United States or an "eligible guarantor" institution within the meaning of Rule
17Ad-15 under the Exchange Act (each an "Eligible Institution") unless the Old
Certificates tendered pursuant thereto are tendered (i) by a registered holder
who has not completed the box entitled "Special Issuance Instructions" or
"Special Delivery Instructions" on the Letter of Transmittal or (ii) for the
account of an Eligible Institution.
If the Letter of Transmittal is signed by a person other than the
registered holder of any Old Certificates listed therein, then such Old
Certificates must be endorsed or accompanied by bond powers and a proxy which
authorizes such person to tender the Old Certificates on behalf of the
registered holder, in each case as the name of the registered holder or holders
appears on the Old Certificates.
If the Letter of Transmittal or any Old Certificates or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and unless waived by the
Trustee, evidence satisfactory to the Trustee of their authority to so act must
be submitted with the Letter of Transmittal.
All questions as to the validity, form, eligibility (including time of
receipt) and withdrawal of the tendered Old Certificates will be determined by
the Trustee in its sole discretion, which determination will be final and
binding. The Trustee reserves the absolute right to reject any and all Old
Certificates not properly tendered or any Old Certificates which, if accepted,
would be, in the opinion of counsel for PSSA, unlawful. The Trustee also
reserves the absolute right to waive any irregularities or conditions of tender
as to particular Old Certificates. The Trustee's interpretation of the terms and
conditions of the Exchange Offer (including the instructions in the Letter of
Transmittal) will be final and binding on all parties. Unless waived, any
defects or irregularities in connection with tenders of Old Certificates must be
cured within such time as the Trustee shall determine. Neither the Trustee nor
PSSA, nor the Exchange Agent nor any other person shall be under any duty to
give notification of defects or irregularities with respect to tenders of Old
Certificates, nor shall any of them incur any liability for failure to give such
notification. Tenders of Old Certificates will not be deemed to have been made
until such irregularities have been cured or waived. Any Old Certificates
received by the Exchange Agent that are not tendered properly and as to which
the defects or irregularities have not been cured or waived will be returned
without cost to such holder by the Exchange Agent to the tendering holders of
Old Certificates, unless otherwise provided in the Letter of Transmittal, as
soon as practicable following the Expiration Date.
In addition, PSSA reserves the right in its sole discretion (i) to purchase
or make offers for any Old Certificates that remain outstanding subsequent to
the Expiration Date or, as set forth under "--Conditions," to terminate the
Exchange Offer in accordance with the terms of the Registration Rights Agreement
and (ii) to the extent permitted by applicable law, to purchase Old Certificates
in the open market, in privately negotiated transactions or otherwise. The terms
of any such purchases or offers could differ from the terms of the Exchange
Offer.
ACCEPTANCE OF OLD CERTIFICATES FOR EXCHANGE; DELIVERY OF NEW CERTIFICATES
Upon satisfaction or waiver of all of the conditions to the Exchange Offer,
all Old Certificates properly tendered will be accepted promptly after the
Expiration Date, and the New Certificates will be issued promptly after
acceptance of the Old Certificates. For purposes of the Exchange Offer, Old
Certificates shall be deemed to have been accepted as validly tendered for
exchange when, as and if the Trustee has given oral or written notice thereof to
the Exchange Agent.
In all cases, issuance of New Certificates for Old Certificates that are
accepted for exchange pursuant to the Exchange Offer will be made only after
timely receipt by the Exchange Agent of certificates for such Old Certificates,
a properly completed and duly executed Letter of Transmittal and all other
required documents. If any tendered Old Certificates are not accepted for any
reason set forth in the terms and conditions of the Exchange Offer or if Old
Certificates are submitted for a greater principal amount than the holder
desires to exchange, then such unaccepted or unexchanged Old Certificates will
be returned without expense to the tendering holder thereof as promptly as
practicable after the expiration or termination of the Exchange Offer.
GUARANTEED DELIVERY PROCEDURES
If a registered holder of the Old Certificates desires to tender such Old
Certificates, and the Old Certificates are not immediately available, or time
will not permit such holder's Old Certificates or other required documents to
reach the Exchange Agent before the Expiration Date, then a tender may be
effected if (i) the tender is made by or through an Eligible Institution, (ii)
prior to the Expiration Date, the Exchange Agent receives from such Eligible
Institution a properly completed and duly executed Letter of Transmittal (or a
facsimile thereof) and Notice of Guaranteed Delivery, substantially in the form
provided by PSSA (by facsimile transmission, mail or hand delivery), setting
forth the name and address of the holder of Old Certificates and the amount of
Old Certificates tendered, stating that the tender is being made thereby and
guaranteeing that within three New York Stock Exchange (the "NYSE") trading days
after the date of execution of the Notice of Guaranteed Delivery, the
certificates for all physically tendered Old Certificates, in proper form for
transfer, and any other documents required by the Letter of Transmittal will be
deposited by the Eligible Institution with the Exchange Agent and (iii) the
certificates for all physically tendered Old Certificates, in proper form for
transfer, and all other documents required by the Letter of Transmittal are
received by the Exchange Agent within three NYSE trading days after the date of
execution of the Notice of Guaranteed Delivery.
WITHDRAWAL OF TENDERS
Tenders of Old Certificates may be withdrawn at any time prior to the
Expiration Date.
For a withdrawal to be effective, a written notice of withdrawal must be
received by the Exchange Agent prior to the Expiration Date at one of the
addresses set forth below under "Exchange Agent." Any such notice of withdrawal
must specify the name of the person having tendered the Old Certificates to be
withdrawn, identify the Old Certificates to be withdrawn (including the
principal amount of such Old Certificates) and (where certificates for Old
Certificates have been transmitted) specify the name in which such Old
Certificates are registered, if different from that of the withdrawing holder.
If certificates for Old Certificates have been delivered or otherwise identified
to the Exchange Agent, then, prior to the release of such certificates, the
withdrawing holder also must submit the serial numbers of the particular
certificates to be withdrawn and a signed notice of withdrawal with signatures
guaranteed by an Eligible Institution unless such holder is an Eligible
Institution. All questions as to the validity, form and eligibility (including
time of receipt) of such notices will be determined by the Trustee, in its sole
discretion, whose determination shall be final and binding on all parties.
Neither PSSA, the Trust, any affiliates or assigns of PSSA or the Trust, the
Exchange Agent nor any other person shall be under any duty to give any
notification of any irregularities in any notice of withdrawal or incur any
liability for failure to give any such notification. Any Old Certificates so
withdrawn will be deemed not to have been validly tendered for exchange for
purposes of the Exchange Offer. Any Old Certificates which have been tendered
for exchange but which are not exchanged for any reason will be returned to the
holder thereof without cost to such holder as soon as practicable after
withdrawal, rejection of tender or termination of the Exchange Offer. Properly
withdrawn Old Certificates may be tendered again by following one of the
procedures described under "--Procedures for Tendering" above at any time on or
prior to the Expiration Date.
CONDITIONS
Notwithstanding any other term of the Exchange Offer, Old Certificates will
not be required to be accepted for exchange, nor will New Certificates be issued
in exchange for any Old Certificates, and PSSA may cause the Trustee to
terminate or amend the Exchange Offer as provided herein before the acceptance
of such Old Certificates, if because of (i) any change in law, or applicable
interpretations thereof by the Commission or (ii) any stop order issued by the
Commission or any state securities authority suspending the effectiveness of the
Registration Statement, PSSA determines that the Trust is not permitted to
effect the Exchange Offer. PSSA has no obligation to, and will not knowingly,
permit acceptance of tenders of Old Certificates by the Trust from affiliates of
PSSA or the Trust (within the meaning of Rule 405 under the Securities Act) or
from any other holder or holders who are not eligible to participate in the
Exchange Offer under applicable law or interpretations thereof by the
Commission, or if the New Certificates to be received by such holder or holders
of Old Certificates in the Exchange Offer, upon receipt, will not be tradable by
such holder without restriction under the Securities Act and the Exchange Act
and without material restrictions under the "blue sky" or securities laws of
substantially all of the states of the United States.
EXCHANGE AGENT
The Trustee has been appointed as Exchange Agent for the Exchange Offer.
Questions and requests for assistance and requests for additional copies of this
Prospectus or of the Letter of Transmittal should be directed to the Exchange
Agent addressed as follows:
By Mail or By Hand:
The Bank of New York
101 Barclay Street, 12E
New York, N.Y. 10286
Attention: Corporate Trust
Telephone: (212) 815-5728
Facsimile: (212) 815-7157
Delivery to other than the above address or facsimile number will not
constitute a valid delivery.
FEES AND EXPENSES
The expenses of soliciting tenders pursuant to the Exchange Offer will be
borne by PSSA on behalf of the Trust pursuant to the Registration Rights
Agreement. The principal solicitation for tenders pursuant to the Exchange Offer
is being made by mail; however, additional solicitations may be made by
telegraph, telephone, telecopy or in person by officers and regular employees or
agents of PSSA on behalf of the Trust.
PSSA will not make any payments to brokers, dealers or other persons
soliciting acceptances of the Exchange Offer. PSSA, however, will pay on behalf
of the Trust the Exchange Agent's reasonable and customary fees for its services
and will reimburse the Exchange Agent for its reasonable out-of-pocket expenses
in connection therewith. PSSA also may pay on behalf of the Trust, the
reasonable out-of-pocket expenses incurred by brokerage houses and other
custodians, nominees and fiduciaries in forwarding copies of the Prospectus and
related documents to the beneficial owners of the Old Certificates, and in
handling or forwarding tenders for exchange.
The expenses to be incurred in connection with the Exchange Offer will be
paid by PSSA on behalf of the Trust, including fees and expenses of the Exchange
Agent and Trustee and accounting, legal, printing and related fees and expenses.
PSSA will pay all transfer taxes, if any, applicable to the exchange of Old
Certificates pursuant to the Exchange Offer. If, however, certificates
representing New Certificates or Old Certificates for principal amounts not
tendered or accepted for exchange are to be delivered to, or are to be
registered or issued in the name of, any person other than the registered holder
of the Old Certificates tendered, or if tendered Old Certificates are registered
in the name of any person other than the person signing the Letter of
Transmittal, or if a transfer tax is imposed for any reason other than the
exchange of Old Certificates pursuant to the Exchange Offer, then the amount of
any such transfer taxes (whether imposed on the registered holder or any other
persons) will be payable by the tendering holder. If satisfactory evidence of
payment of such taxes or exemption therefrom is not submitted with the Letter of
Transmittal, then the amount of such transfer taxes will be billed directly to
such tendering holder.
DESCRIPTION OF THE NEW CERTIFICATES
GENERAL
The New Certificates will be denominated and distributions with respect
thereto will be payable in U.S. Dollars. The Trust Certificates represent in the
aggregate the entire beneficial ownership interest in the Trust. The property of
the Trust will consist of (i) the CHR Debentures, (ii) all payments on or
collections in respect of the CHR Debentures received on or after June 9, 1998,
together with any proceeds thereof, and (iii) all funds from time to time
deposited with the Trustee in accounts related to the Trust. The property of the
Trust will be held for the benefit of the holders of the Trust Certificates by
the Trustee. Holders of the New Certificates will receive payments or
distributions on each Distribution Date as described herein. See "--Collections
and Distributions."
The Trust Certificates represent two classes of undivided fractional
beneficial interests in the assets of the Trust, and all distributions to
holders of the Trust Certificates will be made only from the property of the
Trust as described herein. The Trust Certificates do not represent an interest
in or obligation of PSSA, Chrysler, the CHR Debentures Indenture Trustee, the
Trustee, Prudential Securities or any affiliate of any of the foregoing.
Subject to the occurrence of an Optional Redemption, a Maturity Shortening
Redemption or an In-Kind Distribution, distribution of a Fixed Payment on the
Amortizing Class Certificates will be made semiannually on each Scheduled
Distribution Date (or if such date is not a Distribution Business Day (as
defined below), on the next succeeding Distribution Business Day) up to and
including August 1, 2018 in an amount equal to the amount of interest due and
received on the CHR Debentures on such Scheduled Distribution Date. The amount
of interest and principal (the "Total Cashflow") due on the CHR Debentures on
each Scheduled Distribution Date is the product of (i) 7.40%, (ii) 180 divided
by 360 and (iii) $57,830,000 (less the principal amount of any CHR Debentures
redeemed in part upon an Optional Redemption or exchanged for Certificates as
described herein). A "Distribution Business Day" is the first New York Business
Day (as defined below) following the day on which payments on the CHR Debentures
are due. A "New York Business Day" means any day other than a Saturday, Sunday
or legal holiday on which banking institutions or trust companies in New York
City are authorized or obligated by law, regulation or executive order to be
closed.
The aggregate purchase price of Residual Class Certificates represents
25.650% of the face amount of the CHR Debentures. The Residual Class
Certificates will accrete principal at the rate of 6.870% per annum, to a
principal amount of $57,830,000 on August 1, 2018 (assuming that all are still
outstanding on such date). Subject to the occurrence of an Optional Redemption,
a Maturity Shortening Redemption or an In-Kind Distribution, on each Scheduled
Distribution Date commencing February 1, 2019 through August 1, 2097, the
Residual Class Certificates will receive, from distributions of interest on the
CHR Debentures, if any, a distribution of interest on the then outstanding
principal amount of the Residual Class Certificates at a rate of 7.40% per
annum. Subject to the occurrence of an Optional Redemption, a Maturity
Shortening Redemption or an In-Kind Distribution, on August 1, 2097 the Residual
Class Certificates will receive, from distributions of principal on the CHR
Debentures, if any, a return of principal on the Residual Class Certificates.
The Residual Class Certificates will not be entitled to any allocation of
interest accrued under the CHR Debentures until February 1, 2019, including
interest accrued on or before August 1, 2018 which is unpaid as of February 1,
2019.
The aggregate "Certificate Principal Balance" of the Amortizing Class
Certificates initially will be $48,096,190. On any Scheduled Distribution Date,
the aggregate Certificate Principal Balance will be reduced by the positive
difference between (i) the semiannual Fixed Payment made on such Scheduled
Distribution Date and (ii) interest accrued on the aggregate Certificate
Principal Balance at the Yield to Amortizing Class Final Distribution Date from
the prior Scheduled Distribution Date (or, in the case of the initial
Distribution Date, such interest accrued from February 1, 1998). The Certificate
Principal Balance of any Amortizing Class Certificate will represent a pro rata
portion of the then-current aggregate Certificate Principal Balance of all
outstanding Amortizing Class Certificates. In the case of an Optional Redemption
of less than all of the CHR Debentures, upon the distribution of the proceeds
from such Optional Redemption, the Certificate Principal Balance of each
Amortizing Class Certificate shall be reduced by the same percentage as the
percentage of CHR Debentures redeemed.
Scheduled Distributions on the Amortizing Class Certificates will consist
of equal semiannual installments allocable to principal and interest through
August 1, 2018 (each, a "Fixed Payment"). Each Fixed Payment will be allocated
between interest accrued at a per annum rate equal to 6.50% compounded
semiannually (the "Yield to Amortizing Class Final Distribution Date") on the
then-outstanding Certificate Principal Balance of the Amortizing Class
Certificates, and the repayment of principal as set forth in Appendix A attached
hereto. Although payments on the Amortizing Class Certificates are denominated
as principal and interest, the Amortizing Class Certificates generally represent
indirect beneficial ownership of solely the interest payments on the CHR
Debentures on or before August 1, 2018 and will be paid solely from interest
payments on the CHR Debentures; absent an Optional Redemption or a Maturity
Shortening Redemption on or prior to August 1, 2018, the holders of Amortizing
Class Certificates have no right to any portion of the principal payments on the
CHR Debentures. The Amortizing Class Certificates are scheduled to be paid in
full on August 1, 2018 (the "Amortizing Class Final Distribution Date"). The
actual final payment date could occur later in the event of a payment default on
the CHR Debentures, and could occur earlier in the case of an Optional
Redemption, Maturity Shortening Redemption or In-Kind Distribution.
New Certificates may be transferred or exchanged for like Certificates of
the same Class at the corporate trust office or agency of the Trustee in the
City and State of New York, subject to the limitations provided in the Base
Trust Agreement, without the payment of any service charge, other than any tax
or governmental charge payable in connection therewith.
FORM OF THE NEW CERTIFICATES
The New Certificates will be issued in definitive registered form in
minimum denominations of $250,000 Certificate Principal Balance and integral
multiples of $1.00 in excess thereof.
INTEREST ACCRUAL
For each Distribution Date, interest shall accrue on the Amortizing Class
Certificates during the period (the "Interest Accrual Period") commencing on and
including the prior Distribution Date to, but excluding, such Distribution Date,
except that the initial Interest Accrual Period shall commence on February 1,
1998.
The aggregate purchase price of Residual Class Certificates represents
25.650% of the face amount of the CHR Debentures. The Residual Class
Certificates will accrete principal at the rate of 6.870% per annum, to a
principal amount of $57,830,000 on August 1, 2018 (assuming that all are still
outstanding on such date). Subject to the occurrence of an Optional Redemption,
a Maturity Shortening Redemption or an In-Kind Distribution, on each Scheduled
Distribution Date commencing February 1, 2019 through August 1, 2097, the
Residual Class Certificates will receive, from distributions of interest on the
CHR Debentures, if any, a distribution of interest on the then outstanding
principal amount of the Residual Class Certificates at a rate of 7.40% per
annum. Subject to the occurrence of an Optional Redemption, a Maturity
Shortening Redemption or an In-Kind Distribution, on August 1, 2097 the Residual
Class Certificates will receive, from distributions of principal on the CHR
Debentures, if any, a return of principal on the Residual Class Certificates.
The Residual Class Certificates will not be entitled to any allocation of
interest accrued under the CHR Debentures until February 1, 2019, including
interest accrued on or before August 1, 2018 which is unpaid as of February 1,
2019.
Interest will accrue on each Amortizing Class Certificate for each Interest
Accrual Period ending on or prior to the Amortizing Class Final Distribution
Date at the Yield to Amortizing Class Final Distribution Date (such accrued
interest, the "Amortizing Class Periodic Interest"). Except in the case of any
Optional Redemption or Maturity Shortening Redemption, the Amortizing Class
Periodic Interest shall be payable (together with principal on the Amortizing
Class Certificates) on the Scheduled Distribution Dates related to each
applicable Interest Accrual Period.
COLLECTIONS AND DISTRIBUTIONS ON NEW CERTIFICATES
Distributions by the Trustee pursuant to the terms of the Certificates and
the Base Trust Agreement shall be made, subject to timely receipt of payments on
the CHR Debentures and, in the case of cash distributions, solely to the extent
of available funds, as follows:
(i) with respect to the Amortizing Class Certificates, on each
Scheduled Distribution Date through and including August 1, 2018; and
(ii) with respect to the Residual Class Certificates, on each
Scheduled Distribution Date commencing February 1, 2019 through and
including August 1, 2097 (except as provided below);
subject, in each case, to the provisions discussed under "--Optional Redemption
of CHR Debentures," "--Maturity Shortening Redemption" and "--Distribution of
CHR Debentures on Payment Default, Acceleration or Change in Reporting Status."
"Available Funds" means, as of any Scheduled Distribution Date, the
aggregate amount received on or with respect to the CHR Debentures during the
period from the preceding Scheduled Distribution Date up to and including such
Scheduled Distribution Date (each such period, a "Collection Period"), and
deposited in the Collection Account and available for distribution on such
Scheduled Distribution Date.
On each Scheduled Distribution Date, subject to the occurrence of an
In-Kind Distribution, the Trustee will distribute Interest Collections (as
defined below) constituting Available Funds for such Scheduled Distribution Date
to the holders of Amortizing Class Certificates, but only to the extent that
such Interest Collections represent payments due on or prior August 1, 2018.
"Interest Collections" means, with respect to any Scheduled Distribution Date,
all payments received by the Trustee during the Collection Period ending on such
Scheduled Distribution Date, in respect of (i) interest on the CHR Debentures
and (ii) penalties or other amounts, if any, required to be paid by CHR because
of late payments on the CHR Debentures.
If a payment with respect to the CHR Debentures is made to the Trustee
after the CHR Debentures Payment Date on which such payment was due, then the
Trustee will distribute any such amounts received on the first New York Business
Day thereafter as if such funds had constituted Available Funds on the Scheduled
Distribution Date immediately preceding such Business Day; provided, however,
that the Record Date for such distribution shall be fifteen days prior to such
Business Day and no additional amounts will accrue on the Certificates or be
owed to the holders of the Certificates in respect of such distribution.
All amounts received on or with respect to the CHR Debentures shall be held
uninvested by the Trustee. On August 1, 2097, the Trustee will distribute the
remaining Available Funds to the holders of Residual Class Certificates, unless
an Optional Redemption, a Maturity Shortening Redemption, an In-Kind
Distribution or certain circumstances of non-payment by Chrysler has occurred on
or prior to such date.
In the event that PSSA is required to repurchase the CHR Debentures as a
result of a breach of its representation and warranty as to its title to the CHR
Debentures immediately prior to the transfer thereof to the Trustee, the Trustee
will distribute the repurchase price received from PSSA to the holders of the
Amortizing Class Certificates and the Residual Class Certificates on the basis
of the distribution ratio as of the date of such repurchase. Such ratio will be
calculated by the "Calculation Agent," and such distribution will be made
fifteen days after receipt of the repurchase price. See "--Optional Redemption
of CHR Debentures" for a definition of the distribution ratio.
Distributions with respect to New Certificates will be made at the
corporate trust office or agency of the Trustee in the City of New York.
OPTIONAL REDEMPTION OF CHR DEBENTURES
On or after August 1, 2087, the CHR Debentures may be redeemed prior to
maturity, as a whole or in part, at the option of Chrysler (a "Late Optional
Redemption"), at any time, at a redemption price equal to 100% of the principal
amount being redeemed and together with accrued interest to the date of
redemption (a "Late Optional Redemption Date"). In addition, prior to August 1,
2087, the CHR Debentures may be redeemed, as a whole or in part at any time, at
the option of Chrysler (an "Early Optional Redemption"; as used herein, the term
"Optional Redemption" shall refer to either a Late Optional Redemption or an
Early Optional Redemption, as the context requires), at a redemption price equal
to the greater of (i) 100% of the principal amount being redeemed and (ii) the
sum of the present values of the Remaining Scheduled Payments of principal and
interest thereon discounted to the date of redemption (an "Early Optional
Redemption Date"; as used herein, the term "Optional Redemption Date" shall
refer to either a Late Optional Redemption Date or an Early Optional Redemption
Date, as the context requires) on a semiannual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Treasury Rate plus 20 basis points
together, in either case, with accrued interest thereon to the date of
redemption. The "Treasury Rate" means, with respect to any redemption date, the
rate per annum equal to the semiannual equivalent yield to maturity (computed as
of the second business day immediately preceding such redemption date) of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date.
In the event of an Optional Redemption, the Certificates will be redeemed
on the Optional Redemption Date. In such event, the Trustee will distribute the
payment received on the CHR Debentures on the Optional Redemption Date, to the
holders, if any, of the Amortizing Class Certificates and the Residual Class
Certificates, respectively, in the same ratio as (i) the present value of all
originally scheduled future payments on the Amortizing Class Certificates bears
to (ii) the present value of all originally scheduled future payments on the CHR
Debentures after August 1, 2018, discounted semiannually in each case at a rate
of 7.40% per annum (such ratio being the "Distribution Ratio") to the Optional
Redemption Date. Such ratio will be calculated by the Calculation Agent. In the
case of an Optional Redemption of less than all of the CHR Debentures, the
Trustee will distribute the payment received on the CHR Debentures on the
Optional Redemption Date to the holders, if any, of the Amortizing Class
Certificates and the Residual Class Certificates on the basis of the
Distribution Ratio as of the Optional Redemption Date on a pro rata basis; such
a distribution will result in a reduction (based on the percentage of CHR
Debentures redeemed) of the Residual Class Certificates Certificate Principal
Balance and a recalculation of the Certificate Principal Balance of, and Fixed
Payments (as defined in the Base Trust Agreement) with respect to, the
outstanding Amortizing Class Certificates, if any, based on the remaining CHR
Debentures after such redemption. A table showing the percentages of such
distribution that would be distributable to the Amortizing Class Certificates
and Residual Class Certificates, respectively, assuming that such a distribution
date occurs an a Scheduled Distribution Date, is attached hereto as Appendix A.
MATURITY SHORTENING REDEMPTION
Upon the occurrence of a tax event (as defined below) with respect to the
CHR Debentures, Chrysler has the right to shorten the maturity of the CHR
Debentures (i) to the minimum extent required, in the opinion of nationally
recognized independent tax counsel, such that, after the shortening of the
maturity, interest paid on the CHR Debentures will be deductible by Chrysler for
U.S. federal income tax purposes, or (ii) if such counsel is unable to opine
definitively as to such minimum period, the minimum extent so required as
determined in good faith by the Board of Directors of Chrysler after receipt of
an opinion of such counsel regarding the applicable legal standards. Chrysler
also has the right to redeem the CHR Debentures in whole (but not in part), on
not less than 30 nor more than 60 days' notice, if a tax event occurs and a
nationally recognized independent tax counsel opines that there would be,
notwithstanding any shortening of the maturity of the CHR Debentures, more than
an insubstantial risk that interest paid by Chrysler on the CHR Debentures would
not be deductible in whole (or in part) by Chrysler for U.S. federal income tax
purposes. The redemption price available to Chrysler would be equal to the
greater of (i) 100% of the principal amount of the CHR Debentures, plus accrued
interest to the date of redemption or (ii) the sum of the present values of the
remaining scheduled payments of principal and interest thereon discounted to the
date of redemption on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate plus 35 basis points, plus accrued
interest to the date of redemption. Chrysler must exercise its redemption right
within 90 days following the tax event. Any such new maturity date is referred
to herein as the "Shortened Maturity Date." If the Shortened Maturity Date is on
or prior to August 1, 2018, (a) the Amortizing Class Certificates and the
Residual Class Certificates will be redeemed on the Shortened Maturity Date and
(b) the Trustee will distribute the payment received on the CHR Debentures on
the Shortened Maturity Date to the holders of each class of Certificates on the
basis of the Distribution Ratio as of the Shortened Maturity Date; such ratio
will be calculated by the Calculation Agent. If the Shortened Maturity Date is
after August 1, 2018, the Residual Class Certificates would be redeemed on the
Shortened Maturity Date and the Trustee would distribute the payments received
on the CHR Debentures on the Shortened Maturity Date to the holders of such
Certificates. Either such redemption will be referred to herein as a "Maturity
Shortening Redemption." A table showing the percentages of such distribution
that would be distributable to the Amortizing Class Certificates and the
Residual Class Certificates, respectively, assuming that such distribution
occurs on a Scheduled Distribution Date, is attached hereto as Appendix A.
A "Tax Event" means that Chrysler shall have received an opinion of
nationally recognized independent tax counsel to the effect that, as a result of
(a) any amendment to, clarification of, or change (including any announced
prospective amendment, clarification or change) in any law, or any regulation
thereunder, of the United States, (b) any judicial decision, official
administrative pronouncement, ruling, regulatory procedure, notice or
announcement, including any notice or announcement of intent to adopt or
promulgate any ruling, regulatory procedure or regulation (any of the foregoing,
an "Administrative or Judicial Action") or (c) any amendment to, clarification
of, or change in any official position with respect to, or any interpretation
of, an Administrative or Judicial Action or a law or regulation of the United
States that differs from the theretofore generally accepted position or
interpretation, in each case, occurring on or after July 15, 1997, there is more
than an insubstantial increase in the risk that interest paid by Chrysler on the
CHR Debentures is not, or will not be, deductible, in whole or in part, by
Chrysler for U.S. federal income tax purposes.
DISTRIBUTION OF CHR DEBENTURES ON PAYMENT DEFAULT, ACCELERATION OR CHANGE IN
REPORTING STATUS
If a Payment Default or an Acceleration with respect to the CHR Debentures,
or a Change in Reporting Status with respect to Chrysler, occurs, then the
Trustee will make an In-Kind Distribution of the remaining CHR Debentures to the
holders of the Residual Class Certificates and, if still outstanding, the
Amortizing Class Certificates. A "Payment Default" means a default in the
payment of any amount due on the CHR Debentures from Chrysler after the same
becomes due and payable (and the expiration of any applicable grace period on
the CHR Debentures), and such default continues unremedied beyond the period
specified in the CHR Debentures Indenture or other authorizing document for the
CHR Debentures (or if no such period is specified, three days). An
"Acceleration" means the acceleration of the maturity of the CHR Debentures
following the occurrence of any default on the CHR Debentures other than a
Payment Default, notwithstanding any subsequent recission and annulment of such
Acceleration by the requisite holders of the entire series of CHR Debentures. A
"Change in Reporting Status" means that Chrysler is no longer subject to the
informational requirements of the Exchange Act. The In-Kind Distribution will be
made to the holders of Residual Class Certificates and, if still outstanding,
the Amortizing Class Certificates on the basis of the Distribution Ratio as of
such Payment Default, Acceleration or Change in Reporting Status. Such ratio
will be calculated by the Calculation Agent. To the extent necessary to avoid a
distribution of CHR Debentures in unauthorized denominations, the Trustee will
cause the liquidation in a commercially reasonable manner of such CHR Debentures
as are necessary, and will distribute the proceeds therefrom to the holders of
Amortizing Class Certificates and Residual Class Certificates based on their
respective rights to CHR Debentures. A table showing the percentages of such
distribution that would be distributable to the Amortizing Class Certificates
and the Residual Class Certificates, respectively, assuming that such
distribution occurs on a Scheduled Distribution Date, is attached hereto as
Appendix A. If a Payment Default, Acceleration or Change in Reporting Status
occurs after August 1, 2018, then the Trustee will make an In-Kind Distribution
to the holders of the Residual Class Certificates.
EXCHANGE OF CERTIFICATES FOR CHR DEBENTURES
Commencing August 1, 1999, any holder of both Amortizing Class Certificates
and Residual Class Certificates (or, if on or after August 1, 2018, any holder
of Residual Class Certificates) may, by delivery of a notice to the Trustee
substantially in the form of the Notice of Exchange attached to a Certificate (a
"Notice of Exchange") not less than 30 and not more than 45 days prior to any
Scheduled Distribution Date, elect to exchange Certificates of both classes for
CHR Debentures (or on or after August 1, 2018, of Residual Class Certificates)
on such Scheduled Distribution Date (the "Exchange Date"). In order to exercise
such right, the holder shall tender to the Trustee on the Exchange Date
immediately succeeding such notice (i) if the Exchange Date is prior to August
1, 2018, both (a) Amortizing Class Certificates evidencing the percentage
specified in the Notice of Exchange (which shall not be less than 10%) of the
aggregate Certificate Principal Balance of all Amortizing Class Certificates
then outstanding and (b) Residual Class Certificates evidencing the same
percentage of the aggregate Certificate Principal Balance of all Residual Class
Certificates then outstanding or (ii) if the Exchange Date is on or after August
1, 2018, Residual Class Certificates evidencing at least 10% of the aggregate
Certificate Principal Balance of all Residual Class Certificates then
outstanding.
Upon tender of such Certificates, duly endorsed by the holder to the
Trustee, the Trustee shall transfer to the holder (or its designee specified in
the Notice of Exchange) a principal amount of CHR Debentures comprising the same
percentage of the CHR Debentures then held in the Trust as the percentage of
Amortizing Class Certificates and Residual Class Certificates tendered by such
holder on such Scheduled Distribution Date, rounded down to the nearest
authorized denomination of Term Assets. Upon such exchange, the Trustee shall
cancel the tendered Certificates, provided that if the amount of CHR Debentures
delivered to the holder or its designee was rounded down in accordance with the
preceding sentence, the Trustee shall issue to such holder new Certificates of
each class evidencing percentage interests of such class (regardless of whether
such interests would otherwise be authorized denominations) equal to the amount
of such class in excess of the amount accepted for such exchange.
The delivery of a Notice of Exchange shall be irrevocable; provided,
however, that if (i) the proceeds of an Optional Redemption, Shortened Maturity
Redemption or In-Kind Distribution are to be distributed on the Exchange Date to
which such Notice of Exchange relates or (ii) if prior to such Exchange Date,
the Trustee gives notice to holders that the proceeds of an Optional Redemption,
Shortened Maturity Redemption or In-Kind Distribution are scheduled to be
distributed on a date subsequent to such Exchange Date, such Notice of Exchange
shall be automatically deemed canceled and be of no further force and effect.
Any holder tendering Certificates in exchange for CHR Debentures on an
Exchange Date shall be entitled to receive cash distributions otherwise payable
on such Certificates on such Exchange Date.
LIMITATIONS ON BENEFICIAL OWNERSHIP OF AMORTIZING CLASS CERTIFICATES
Each registered holder of a Amortizing Class Certificate will be required
to deliver to the Trustee a certification (which will be included in the Letter
of Transmittal) upon purchase of the certificate to the effect that the
beneficial owner thereof (whether such registered holder or the ultimate
beneficiary for whom it holds such Certificate) is either (i) a United States
person or (ii) a non-United States person who is exempt from withholding under
U.S. federal income tax laws and has completed, accurately and in a manner
reasonably satisfactory to the Trustee or its agent, an IRS Form W-8 and
delivered such Form to the Trustee or its agent. Such registered holder will be
deemed to have represented and agreed with the Trustee that so long as it is the
registered holder of such Certificate, the beneficial owner thereof will be a
person described in clauses (i) or (ii) above and, in the event of any change in
the identity of the beneficial owner for whom such registered holder is acting
or any lapse of a Form W-8 previously delivered to the Trustee, it will promptly
deliver a new certification or a current Form W-8, as applicable. In the event
such representation is untrue or such current forms are not so furnished, the
Certificate held by such registered holder will be subject to mandatory resale
as described below.
If the Trustee determines that the deemed representation made by such
registered holder is incorrect, or if such registered holder does not provide
the current Form W-8 as described above within ten days after the prior such
Form has lapsed, then the Trustee will furnish a notice to such registered
holder stating that (i) such registered holder must, within 30 calendar days
from the date of such notice, effect the registration of transfer of its New
Certificate to a person that certifies that the beneficial owner of the
Certificate is a U.S. person or exempt from U.S. withholding tax as described
above and (ii) if such transfer does not occur by the thirtieth day, the
registered holder will be deemed to have appointed Prudential Securities and/or
Prudential-Bache Securities (U.K.) Inc. as its broker(s) to sell such registered
holder's certificate on its behalf to such an exempt person at a commercially
reasonable price (net of customary brokerage commissions) within the next
succeeding five Business Days.
NO FURTHER RULE 3a-7 LIMITATION
As a result of the rating assigned to the New Certificates, they will not
be subject to certain restrictions on transfer that were originally applicable
to the Old Certificates pursuant to Rule 3a-7 under the Investment Company Act
of 1940, as amended (the "Investment Company Act").
<PAGE>
DESCRIPTION OF THE BASE TRUST AGREEMENT
GENERAL
The following summary of certain provisions of the Base Trust Agreement and
the Trust Certificates does not purport to be complete and such summary is
qualified in its entirety by reference to the detailed provisions of the Base
Trust Agreement incorporated by reference hereto as described under "Where You
Can Find More Information." Article and section references in parentheses below
are to articles and sections in the Base Trust Agreement. Wherever particular
sections or defined terms of the Base Trust Agreement are referred to, such
sections or defined terms are incorporated herein by reference as part of the
statement made, and the statement is qualified in its entirety by such
reference.
THE TRUSTEE
The Bank of New York, a New York banking corporation, acts as trustee of
the Trust pursuant to the Base Trust Agreement. The Trustee's offices are
located at 101 Barclay Street, 12E, New York, New York 10286,
Attention--Corporate Trust.
The Base Trust Agreement provides that the Trustee and any director,
officer, employee or agent thereof will be indemnified by PSSA and held harmless
against any loss, liability or expense incurred in connection with any legal
action relating to the Base Trust Agreement or the Trust Certificates or the
performance of the Trustee's duties under the Base Trust Agreement, other than
any loss, liability or expense (i) that constitutes a specific liability of the
Trustee under the Base Trust Agreement or (ii) incurred by reason of willful
misfeasance, bad faith or negligence in the performance of the Trustee's duties
under the Base Trust Agreement or as a result of a breach, or by reason of
reckless disregard, of the Trustee's obligations and duties under the Base Trust
Agreement. Pursuant to the Base Trust Agreement, as compensation for the
performance of its duties thereunder, the Trustee is entitled to payment of
trustee fees and reimbursement of expenses by PSSA pursuant to a separate
agreement with PSSA, but shall not have any claim against the Trust with respect
thereto.
The Trustee makes no representations as to the validity or sufficiency of
the Base Trust Agreement, the New Certificates or the CHR Debentures or any
related document. The Trustee is required to perform only those duties
specifically required under the Base Trust Agreement. However, upon receipt of
the various certificates, reports or other instruments required to be furnished
to it, the Trustee is required to examine such documents and to determine
whether they conform to the applicable requirements of the Base Trust Agreement.
The Trustee is unaffiliated with, but may have normal banking relationships
with, PSSA and its affiliates.
The Base Trust Agreement and, upon consummation of the Exchange Offer, the
provisions of the Trust Indenture Act of 1939, as amended (the "Indenture Act"),
incorporated by reference therein, contain limitations on the rights of the
Trustee thereunder, should it become a creditor of the Trust, to obtain payment
of claims in certain cases or to realize on certain property received by it in
respect of any such claims, as security or otherwise. The Trustee is permitted
to engage in other transactions; provided, however, that if it acquires any
conflicting interest (as defined in the "Indenture Act") it must eliminate such
conflict or resign.
EVENTS OF DEFAULT
There are no events of default with respect to the Trust Certificates.
VOTING RIGHTS
Voting rights will be allocated between the holders of Residual Class
Certificates, on the one hand, and the holders of Amortizing Class Certificates
on the other, respectively, at any date of determination in the same ratio as
(i) the present value of all originally scheduled future payments on the CHR
Debentures after August 1, 2018 bears to (ii) the present value of all
originally scheduled future payments on the Amortizing Class Certificates,
discounted semiannually in each case at a rate of 7.40% per annum to the date of
determination. Such ratio will be calculated by the Calculation Agent. All
voting rights with respect to the Residual Class Certificates will be allocated
among all holders of Residual Class Certificates in proportion to the respective
Certificate Principal Balances of the then-outstanding Residual Class
Certificates held by such holders on any date of determination. All voting
rights with respect to the Amortizing Class Certificates will be allocated among
all holders of Amortizing Class Certificates in proportion to the respective
notional amounts of the then-outstanding Amortizing Class Certificates held by
such holders on any date of determination.
The required percentage of Voting Rights of those Classes of Trust
Certificates that are materially adversely affected by any modification or
amendment of the Base Trust Agreement necessary to consent to such modification
or amendment is 100%.
VOTING WITH RESPECT TO THE CHR DEBENTURES; WAIVERS
The Trustee, as the holder of the CHR Debentures, has the right to vote and
give consents and waivers in respect of the CHR Debentures as permitted by the
CHR Debentures Indenture with respect thereto and except as otherwise limited by
the Base Trust Agreement. In the event that the Trustee receives a request from
Chrysler for its consent to any amendment, modification or waiver of the CHR
Debentures or any document relating thereto, or receives any other solicitation
for any action with respect to the CHR Debentures including a tender offer for
the CHR Debentures by Chrysler (an "Issuer Tender Offer"), the Trustee shall
mail a notice of such proposed amendment, modification, waiver or solicitation
to each holder of Trust Certificates of record as of such date. The Trustee
shall request instructions from the holders of Trust Certificates as to whether
or not to consent to or vote to accept such amendment, modification, waiver or
solicitation. The Trustee shall consent or vote, or refrain from consenting or
voting, in the same proportion (based on the relative voting rights of the Trust
Certificates) as the Trust Certificates of the Trust were actually voted or not
voted by the holders of Trust Certificates thereof as of a date determined by
the Trustee prior to the date on which such consent or vote is required;
provided, however, that, notwithstanding anything to the contrary herein, the
Trustee shall at no time vote in favor of or consent to any matter (i) which
would alter the timing or amount of any payment on the CHR Debentures,
including, without limitation, any demand to accelerate the CHR Debentures, (ii)
which would result in the exchange or substitution of any of the CHR Debentures
pursuant to a plan for the refunding or refinancing of such CHR Debentures,
(iii) which would alter the currency in which any payment is required to be made
on the CHR Debentures, (iv) which would change the voting rights granted to
holders of the CHR Debentures under the CHR Debentures Indenture or (v) which
would impair in any material respect any rights of the Trustee or holders of the
CHR Debentures to enforce remedies against Chrysler under the CHR Debentures
Indenture, except in each case with the unanimous consent of the holders of
Amortizing Class Certificates and Residual Class Certificates, or vote in favor
of an Issuer Tender Offer except with the consent of the holders of 66 2/3% in
interest of Certificates then outstanding (as reflected in the Distribution
Ratio) and, in the event that any such Issuer Tender Offer shall not include the
payment of all accrued interest and principal in full on the CHR Debentures
subject to such Issuer Tender Offer, unless such Issuer Tender Offer satisfies
the Rating Agency Condition (as defined in the Base Trust Agreement), and
subject to the requirement that such vote or consent would not, based on an
Opinion of Counsel, cause the Trust to fail to be characterized as a grantor
trust for U.S. federal income tax purposes or result in a sale or exchange of
any Certificate for U.S. federal income tax purpose. The Trustee shall have no
liability for any failure to act resulting from holders of Trust Certificates'
late return of, or failure to return, directions requested by the Trustee from
the holders of Trust Certificates.
MODIFICATION AND AMENDMENT
The Base Trust Agreement may be amended by PSSA and the Trustee, without
notice to or consent of the holders of Trust Certificates, for certain purposes
including (i) to cure any ambiguity therein, (ii) to correct or supplement any
provision therein which may be inconsistent with any other provision therein,
(iii) to add or supplement any Credit Support (as defined in the Base Trust
Agreement) for the benefit of any holders of Trust Certificates, (iv) to add to
the covenants, restrictions or obligations of PSSA or the Trustee for the
benefit of the holders of Trust Certificates, (v) to add, change or eliminate
any other provisions with respect to matters or questions arising under such
Base Trust Agreement, (vi) to comply with any requirements imposed by the
Internal Revenue Code of 1986 (the "Code"), (vii) to evidence and provide for
the acceptance of appointment hereunder of a Trustee other than The Bank of New
York as Trustee for a series of certificates, and to add to or change any of the
provisions of the Base Trust Agreement as shall be necessary to provide for or
facilitate the administration of the separate trusts thereunder by more than one
trustee, pursuant to the requirements of the Certificates, (viii) to evidence
and provide for the acceptance of appointment hereunder by a successor trustee
with respect to the certificates of one or more series or to add or change any
of the provisions of the Base Trust Agreement as shall be necessary to provide
for or facilitate the administration of the separate trusts thereunder or (ix)
to provide for the issuance of new certificates issued pursuant to an optional
exchange; provided that (a) any such amendment described in (i) through (ix),
but not (vii), will not, as evidenced by an Opinion of Counsel, cause the Trust
to fail to qualify as a grantor trust for U.S. federal income tax purposes or
result in a sale or exchange of any Certificate for tax purposes and (b) the
Trustee has received (1) an officer's certificate of PSSA to the effect that
such amendment will not have a material adverse effect on any class of holders
of Trust Certificates and (2) written confirmation from each Rating Agency
rating such Trust Certificates, if any, that such amendment will not cause such
Rating Agency to reduce or withdraw the then current rating thereof. Without
limiting the generality of the foregoing, the Base Trust Agreement also may be
modified or amended from time to time by PSSA and the Trustee, with the consent
of the holders of Certificates of each class evidencing not less than the
"Required Percentage-Amendment" of the Voting Rights of those Trust Certificates
of such Classes that are affected by such modification or amendment for the
purpose of adding any provision to or changing in any manner or eliminating any
provision of the Base Trust Agreement or of modifying in any manner the rights
of such holders of Trust Certificates; provided that any such amendment shall
not, as evidenced by an Opinion of Counsel, cause the Trust to fail to qualify
as a grantor trust for U.S. federal income tax purposes.
No such modification or amendment, however, may (i) reduce in any manner
the amount of or alter the timing of, distributions or payments which are
required to be made on any Certificate without the consent of the holder of such
Trust Certificate or (ii) reduce the aforesaid Required Percentage of Voting
Rights required for the consent to any such amendment without the consent of the
holders of all Certificates covered by the Base Trust Agreement then
outstanding.
REPORTS TO HOLDERS OF TRUST CERTIFICATES; NOTICES
Reports to Holders of Trust Certificates
With each distribution to holders of Trust Certificates, the Trustee will
forward or cause to be forwarded to each such holder of Trust Certificates and
to PSSA a statement setting forth: (i) the amount of such distribution to
holders of Trust Certificates of such Class allocable to principal, if any, on
the Trust Certificates of such Class; (ii) the amount of compensation received
by the Trustee for the period relating to such Distribution Date, (iii) the
aggregate stated principal amount or, if applicable, notional principal amount
of the CHR Debentures and the current interest rate thereon at the close of
business on such Distribution Date; (iv) the aggregate Certificate Principal
Balance or aggregate Notional Amount, if applicable, of each Class of Trust
Certificates at the close of business on such Distribution Date, separately
identifying any reduction in such aggregate Certificate Principal Balance or
aggregate Notional Amount due to the allocation of any Realized Losses or
otherwise, (v) any information reasonably requested by a holder to enable such
holder to prepare its tax returns, provided that such information is reasonably
attainable in the requested form and (vi) as to any series (or any class within
such series) for which Credit Support has been obtained, the amount or notional
amount of coverage of each element of Credit Support (and rating, if any,
thereof) included therein as of the close of business on such Distribution Date.
In the case of information furnished pursuant to subclauses (i) and (iii)
above, the amounts shall be expressed as a U.S. dollar amount per minimum
denomination of Trust Certificates or for such other specified portion thereof.
Within a reasonable period of time after the end of each calendar year, the
Trustee shall furnish to each person who at any time during the calendar year
was a holder of Trust Certificates a statement containing the information set
forth in subclauses (i) and (iii) above, aggregated for such calendar year or
the applicable portion thereof during which such person was a holder of Trust
Certificates. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Trustee pursuant to any requirements of the Code as are from
time to time in effect.
Notices
Any notice required to be given to a holder of a Registered Certificate
will be mailed to the address of such holder set forth in the applicable
Certificate Register.
REPLACEMENT CERTIFICATES
If a New Certificate is mutilated, destroyed, lost or stolen, then it may
be replaced at the corporate trust office or agency of the applicable Trustee in
the City and State of New York, upon payment by the holder of such expenses as
may be incurred by the applicable Trustee in connection therewith and the
furnishing of such evidence and indemnity as such Trustee may require. Mutilated
Certificates must be surrendered before new Certificates will be issued.
TERMINATION OF THE TRUST
The Trust shall terminate upon (i) receipt and distribution to the holders
of Certificates entitled thereto of all amounts owed under the Base Trust
Agreement in respect of the CHR Debentures, (ii) the occurrence of any Shortened
Maturity Redemption, (iii) the occurrence of any Optional Redemption of all CHR
Debentures then held by the Trust, (iv) the occurrence of an In-Kind
Distribution of all CHR Debentures then held by the Trust or (v) the delivery of
the last remaining CHR Debentures then held by the Trust, to holders in exchange
for certificates.
The final distribution will be made only upon surrender and cancellation of
the Trust Certificates at an office or agency appointed by the Trustee.
GOVERNING LAW
The Base Trust Agreement and the Trust Certificates will be governed by,
and construed in accordance with, the laws of the State of New York without
reference to such State's principles of conflicts of law. Upon consummation of
the Exchange Offer, the Base Trust Agreement will be subject to the provisions
of the Indenture Act that are required to be part of the Base Trust Agreement
and, to the extent applicable, will be governed by such provisions.
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of U.S. federal income tax consequences material
to the purchase, ownership and disposition of Trust Certificates and the
exchange of Old Certificates for New Certificates (the "Exchange") pursuant to
the Exchange Offer. The summary does not purport to be a comprehensive
description of all of the tax consequences that may be relevant to a decision to
purchase Trust Certificates by any particular investor, including tax
consequences that arise from rules of general application to all taxpayers or to
certain classes of taxpayers or that are generally assumed to be known by
investors. Thus, for example, except where otherwise noted, the discussion below
is addressed to holders that are U.S. persons and that hold Trust Certificates
as capital assets. It does not discuss state, local or foreign tax consequences,
nor does it discuss all the tax consequences that may be relevant to a holder
subject to special rules, including dealers in securities or commodities, banks,
savings and loan associations and similar financial institutions, tax-exempt
organizations, insurance companies, taxpayers that hold Trust Certificates as
part of a hedged or integrated transaction (such as a "straddle" or "conversion
transaction") for U.S. federal income tax purposes, or taxpayers whose
functional currency is other than the U.S. dollar. It also does not discuss tax
consequences for individuals or entities taxed as individuals. The discussion
below is based on the Code and the regulations issued thereunder, and
interpretations of law, rulings and decisions currently in effect, all of which
are subject to change. Any such change may be applied retroactively, and may
adversely affect the U.S. federal income tax consequences described herein.
The term "U.S. person" means a citizen or resident of the United States, a
corporation or partnership created or organized in or under the laws of the
United States or any state thereof (including the District of Columbia) (other
than a partnership that is not treated as a United States person, the term
"United States person" being used herein with the meaning given to such term in
the Code and the regulations issued thereunder), an estate the income of which
is subject to U.S. federal income taxation regardless of its source, or a trust
if (i) a U.S. court is able to exercise primary supervision over the trust's
administration and (ii) one or more United States persons have the authority to
control all of the trust's substantial decisions. To the extent provided in
Treasury regulations, certain trusts in existence prior to August 20, 1996 and
treated as United States persons prior to such date that elect to be treated as
United States persons are also considered U.S. persons.
PROSPECTIVE HOLDERS SHOULD CONSULT THEIR TAX ADVISORS AS TO THE U.S.
FEDERAL TAX CONSEQUENCES TO THEM OF THE EXCHANGE, AND OF ACQUIRING, HOLDING AND
DISPOSING OF TRUST CERTIFICATES, INCLUDING, IN PARTICULAR, THE APPLICATION IN
THEIR PARTICULAR CIRCUMSTANCES OF THE TAX DISCUSSED BELOW, AS WELL AS THE
APPLICATION OF STATE, LOCAL, FOREIGN OR OTHER TAX LAWS.
EXCHANGE OF OLD CERTIFICATES FOR NEW CERTIFICATES
In the opinion of Brown & Wood LLP, the Exchange will not be a taxable
event for U.S. federal income tax purposes. As a result, a holder of an Old
Certificate whose Old Certificate is accepted in the Exchange Offer will not
recognize gain or loss on the Exchange. The New Certificates will have the same
"issue price" (and "adjusted issue price" immediately after the Exchange) as the
Old Certificates, and each tendering holder will have the same adjusted basis
and holding period in the New Certificates as it had in the Old Certificates
immediately before the Exchange.
CHARACTERIZATION OF THE TRUST
For U.S. federal income tax purposes, the Trust will not be treated as an
association taxable as a corporation (or a publicly traded partnership taxable
as a corporation) in the opinion of Brown & Wood LLP. Although the
characterization of the Trust is not certain, the Trust should be treated for
U.S. federal income tax purposes as a grantor trust, and the Trustee intends to
report income, gain, loss and deductions to the Internal Revenue Service ("IRS")
on that basis. If the Trust were not classified as a grantor trust, then it
would be classified as a partnership. As a consequence, the Trust will not be
subject to U.S. federal income taxation.
Prospective investors should be aware that no rulings have been, nor are
any expected to be, sought from the IRS with respect to the classification of
the Trust (or any of the other U.S. federal income tax consequences discussed in
this summary) and there can be no assurance that the IRS will agree with the
characterization of the Trust as a grantor trust (or with the other U.S. federal
income tax consequences discussed herein). See "--Alternative
Characterizations." Accordingly, prospective purchasers are urged to consult
their tax advisers regarding the U.S. federal income tax classification of the
Trust.
Under the U.S. federal income tax rules applicable to grantor trusts, a
holder of a Trust Certificate will be treated as owning the rights to those
payments on the CHR Debentures that are allocable to that Trust Certificate. The
sale of a Trust Certificate will be considered a sale of a holder's interest in
those payments. In addition, a holder may deduct its pro rata share of the fees
and other deductible expenses paid by the Trust, at the same time and to the
same extent as such items would be deducted by the holder if the holder paid
directly a pro rata portion of the amounts paid by the Trust.
The CHR Debentures Prospectus indicates that the CHR Debentures underlying
the Trust Certificates were sold based on Chrysler's belief that they constitute
indebtedness of Chrysler for U.S. federal income tax purposes. The following
discussion is based on the assumption that the CHR Debentures will constitute
debt instruments in their entirety. Except for the discussion under
"--Alternative Characterizations," the following also assumes that the Trust
will be classified as a grantor trust.
PURCHASE AND HOLDING OF TRUST CERTIFICATES
A purchaser of a Trust Certificate will be treated as having acquired the
rights to those payments on the CHR Debentures that are allocable to that Trust
Certificate and will be taxed under the "stripped bond" rules of the Code. The
holder will be treated as having purchased a newly issued, single debt
instrument (or may under a literal reading of the Code be required to treat each
payment as a separate debt instrument each with its own issue price based on its
relative fair market value) providing for payments equal to the payments on the
CHR Debentures allocable to the Trust Certificate, and having original issue
discount ("OID") equal to the excess of the sum of such payments over the
holder's purchase price for the Trust Certificate (which would be treated as the
"issue price"). In determining the purchase price for a Trust Certificate for
this purpose, a portion of the purchase price of the Trust Certificate may be
separately allocated to amounts held by the Trust pending distribution to
holders (the recovery of which amounts would not be taxable). Any such
allocation would reduce the amount paid for (and the amount payable on) such
Trust Certificate.
Under the OID rules, in general, each holder of a Trust Certificate,
whether such holder uses the cash or the accrual method of tax accounting, will
be required to include in ordinary gross income the sum of the "daily portions"
of OID on the Trust Certificate for all days during the taxable year that the
holder owns the Trust Certificate. The daily portions of OID on a Trust
Certificate are determined by allocating to each day in any accrual period a
ratable portion of the OID allocable to that accrual period. Accrual periods may
be any length and may vary in length over the term of a Trust Certificate,
provided that no accrual period is longer than one year and each scheduled
payment of principal or interest occurs on either the final day or the first day
of an accrual period. The amount of OID on a Trust Certificate allocable to each
accrual period is determined by multiplying the "adjusted issue price" of the
Trust Certificate at the beginning of the accrual period by the yield to
maturity of such Trust Certificate (appropriately adjusted to reflect the length
of the accrual period). The yield to maturity of a Trust Certificate is the
discount rate that causes the present value of all payments on the Trust
Certificate as of its issue date to equal the issue price of such Trust
Certificate. The "adjusted issue price" of a Trust Certificate at the beginning
of any accrual period generally will be the sum of its issue price and the
amount of OID allocable to all prior accrual periods, reduced by the amount of
all payments made with respect to such Trust Certificate in all prior accrual
periods.
Because holders of Residual Class Certificates will not be receiving
current distributions, OID will be includible as income prior to the receipt of
cash attributable to such income and the amount of OID includible in income will
increase each year.
It is not clear how the possibility of a Maturity Shortening as a result of
a Tax Event, and the resulting distribution to Amortizing Class Certificate
holders of a portion of the payment received by the Trust on the Shortened
Maturity Date, should be taken into account for purposes of determining the
taxation of holders at, and prior to, the Shortened Maturity Date (including,
but not limited to, the amount of OID required to be included by holders in
ordinary gross income). The Trustee intends to take the position that the
possibility of a Maturity Shortening should not affect the U.S. federal income
tax consequences to holders prior to the Maturity Shortening. Under this
treatment, if the maturity of the CHR Debentures was shortened as a result of a
Tax Event, a holder would be treated, solely for OID purposes, as acquiring a
newly issued OID bond, and would be required to determine OID on the newly
issued bond taking into account the Shortened Maturity Date and the amount
required to be distributed to the holder on that date. The amount of OID
required to be included in the holder's ordinary gross income as a result of the
redetermination could be more or less than the amount determined without taking
into account the Maturity Shortening. There can be no assurance, however, that
the IRS will not take a different position on the effect of a potential Maturity
Shortening, which position may have less favorable tax consequences. See
"--Alternative Characterizations." Prospective purchasers should consult their
tax advisers with respect to the effect of a potential Maturity Shortening.
The Trust currently intends, for information reporting purposes, to account
for OID reportable by holders of Trust Certificates by reference to the first
price at which a substantial amount of the Trust Certificates is sold to
purchasers (other than Prudential Securities), even though the amount of OID
will differ for subsequent purchasers. Such prospective purchasers should
consult their tax advisers regarding the proper calculation of OID.
DISTRIBUTIONS
Cash distributions on the Trust Certificates will not be subject to
additional taxation. An In-Kind Distribution may be treated in whole or in part
as equivalent to a sale or exchange.
OPTIONAL EXCHANGE OF CERTIFICATES FOR CHR DEBENTURES
The distribution of a principal amount of CHR Debentures comprising a
specified percentage of the CHR Debentures then held in the Trust in exchange
for the same percentage of Amortizing Class Certificates and Residual Class
Certificates, and the issuance of new Certificates, if any, of each such class
will not be subject to additional taxation. The treatment of a holder that
exchanges such Certificates for such CHR Debentures is unclear. The provisions
of the Code and Treasury regulations relating to stripped bonds do not
specifically provide authority or a mechanism for ceasing to apply the stripped
bond rules under such circumstances. As a consequence, a holder, and any
subsequent purchaser from such holder, could be required to continue to report
income, gain or loss on the CHR Debentures so acquired in the same manner as if
it still held the Certificates surrendered in exchange for the CHR Debentures.
SALE OR EXCHANGE OF TRUST CERTIFICATES OR THE CHR DEBENTURES
The tax basis of a holder of a Trust Certificate in a Trust Certificate
generally will equal the cost of the Trust Certificate increased by any amounts
includible in income as OID, and reduced by any payments made on the Trust
Certificate.
Upon the sale or exchange of a Trust Certificate (other than the Exchange),
a holder generally will recognize gain or loss equal to the difference between
the amount realized on the sale or exchange and the holder's tax basis in the
Trust Certificate. Gain or loss recognized by an individual holder on the sale
or exchange of a Trust Certificate generally will be capital gain or loss, and
will be long-term capital gain or loss if the holder is considered to have held
the Trust Certificate for more than one year at the time of the disposition.
Long-term capital gains recognized by an individual holder generally are subject
to reduced maximum tax rates.
A holder will recognize gain or loss on any sale by the Trust of the CHR
Debentures, including in connection with an In-Kind Distribution or pursuant to
an Optional Redemption of all or part of the CHR Debentures, equal to the
difference between the portion of the amount realized on the sale allocable to
the holder and the allocable portion of the holder's basis in the Trust
Certificate. In the event of an Optional Redemption of less than all of the CHR
Debentures, a holder will calculate gain or loss by assuming that the CHR
Debentures consist of two debt instruments, one of which is retired and one of
which remains outstanding. The adjusted issue price, holder's adjusted basis and
accrued but unpaid OID of the CHR Debentures, determined immediately before the
partial Optional Redemption, will be allocated between those two instruments
based on the portion of the CHR Debentures that is treated as retired by the
partial Optional Redemption.
ALTERNATIVE CHARACTERIZATIONS
As noted above, there can be no assurance that the IRS will agree with the
characterization of the Trust as a grantor trust. It is possible that the IRS
could seek to classify the Trust as a partnership, although even if the IRS were
successful the Trust would not be subject to U.S. federal income tax. While not
certain, if the Trust is classified as a partnership, it should be eligible for
the election out of the partnership tax rules of subchapter K of the Code, under
Treasury Regulation Section 1.761-2. In mutual consideration for each holder's
purchase of a Trust Certificate, each holder of a Trust Certificate is deemed to
have consented to the making of such a protective election as of the date of
formation of the Trust. As a result of the election, each holder of a Trust
Certificate would be required to report its respective share of the items of
income, deductions and credits of the Trust on its respective U.S. federal
income tax return in a manner substantially similar to the U.S. federal income
tax reporting required under the grantor trust rules. However, if the Trust were
not eligible to make the election, the method of taxation of holders of Trust
Certificates could differ significantly from the treatment described in this
summary. Among those differences, (i) the Trust would be required to account for
its income and deductions at the Trust level, and to utilize a taxable year for
reporting purposes, (ii) income from the CHR Debentures would be taxed under the
rules of the Code applicable to whole debt instruments rather than under the
"stripped bond" rules described above, and (iii) each holder would be required
to separately take into account such holder's distributive share of income and
deductions of the Trust. A holder would take into account its distributive share
of Trust income and deductions for each taxable year of the Trust in the
holder's taxable year which ends with or within the Trust's taxable year.
Prospective purchasers are urged to consult their tax advisers regarding the
U.S. federal income tax classification of the Trust.
Although denominated as debentures, the Trust Assets exhibit significant
equity features and there can be no assurances that the IRS will agree with the
characterization of the Trust Assets as debt for U.S. federal income tax
purposes. If the Trust Assets were treated as equity, the "interest" payments on
them would be considered dividends to the extent of Chrysler's earnings and
profits as determined under federal income tax principles. To the extent such
payments on the Trust Assets exceed Chrysler's earnings and profits, such
portion would be reduced by a corresponding amount. Such reduction in basis
could cause the recognition of gain, or increase the amount of gain otherwise
recognized, on the sale, disposition or redemption of the Trust Assets or the
Certificates. In addition, if "interest" payments were treated as equity,
payments made to a holder that was not a U.S. person would be subject to 30
percent withholding tax (unless (i) such rate were reduced by treaty and such
non-U.S. person provides an appropriate statement (e.g., a Form 1001) to that
effect or (ii) such payment is effectively connected to the conduct of a trade
or business by the non-U.S. person in the United States and such non-U.S. person
provides an appropriate statement to that effect (e.g., a Form 4224)). Finally,
assuming the Trust were treated as a grantor trust and the Trust Assets were
treated as equity, amounts accrued on the Certificates would be treated as
stripped dividends/ stripped preferred stock under section 305(e) of the Code.
Potential investors in Certificates should consult their tax advisors as to how
section 305(e) applies in this case.
Adverse tax consequences also might result if the IRS takes a different
position than the position described above under "--Purchase and Holding of
Trust Certificates" with respect to the effect on holders of a potential
distribution to Amortizing Class Certificate holders of a portion of the payment
received by the Trust on a Shortened Maturity Date. For example, the IRS might
treat the Amortizing Class Certificate as a right to payments on the CHR
Debentures coupled with a separate agreement, in the nature of a put option,
between Amortizing Class Certificate holders, on the one hand, and Residual
Class Certificate holders, on the other hand. Under this characterization, a
Maturity Shortening event would be a taxable event. Moreover, the existence of a
deemed put option might trigger the Code's "straddle" rules, in which case,
among other matters, gain or loss on the sale of a Trust Certificate would be
short-term capital gain or loss regardless of the period during which the holder
held the Trust Certificate.
NON-U.S. HOLDERS
A holder that is not a U.S. person and that is not subject to U.S. federal
income tax as a result of any direct or indirect connection to the United States
other than its ownership of a Trust Certificate will not be subject to United
States income or withholding tax, except as described below and under
"--Information Reporting and Backup Withholding," in respect of interest income
or gain on the CHR Debentures if the holder provides an appropriate statement
(generally an IRS Form W-8), signed under penalties of perjury, identifying the
holder and stating, among other things, that the holder is not a U.S. person and
if the holder is not a "10-percent shareholder" or related "controlled foreign
corporation" with respect to Chrysler. If these conditions are not met, a 30
percent withholding tax will apply to interest income from the Trust
Certificates, unless an income tax treaty reduces or eliminates such tax or
unless the interest is effectively connected with the conduct of a trade or
business within the United States by such holder. In the latter case, such
holder will be subject to U.S. federal income tax with respect to all income
from the CHR Debentures at regular rates applicable to U.S. taxpayers.
A holder that is not a U.S. person also may be subject to U.S. federal
income taxation with respect to a Trust Certificate if it is a personal holding
company, a corporation that accumulates earnings to avoid U.S. taxes on
shareholders or a private foundation under the Code.
INFORMATION REPORTING AND BACKUP WITHHOLDING
The Trustee will furnish or make available to each party registered during
such calendar year as a holder, such information as is required under the Code
or regulations under the Code to enable each holder to file its U.S. federal
income tax returns.
Certain holders that are U.S. persons or that otherwise are subject to U.S.
federal income taxation on a net income basis in respect of the Note ("U.S.
holders") may be subject to a 31 percent backup withholding tax in respect of
distributions made on a Trust Certificate and proceeds from the sale of a Trust
Certificate to or through certain brokers if they do not provide their taxpayer
identification numbers (generally on IRS Form W-9). Persons who are not U.S.
holders may be required to comply with applicable certification procedures to
establish that they are not U.S. holders in order to avoid the application of
information reporting requirements and backup withholding tax. Any amounts so
withheld from distributions on the Trust Certificate would be allowed as a
credit against the holder's U.S. federal income tax liability, or upon
application by the holder to the IRS, would be refunded by the IRS to the extent
it exceeds such liability.
ERISA CONSIDERATIONS
Section 406 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and Section 4975 of the Code, prohibit pension, profit
sharing or other employee benefit or other plans (such as individual retirement
accounts) that are subject to Title I of ERISA or to Section 4975 of the Code
(collectively, the "Plans") from engaging in certain transactions involving
"plan assets" with any person that is a "party in interest" under ERISA or
"disqualified person" under the Code with respect to the Plans. A violation of
these "prohibited transaction" rules may generate excise tax and other
liabilities under ERISA and the Code for such persons.
ERISA also imposes certain duties on persons who are fiduciaries of Plans
subject to ERISA, including the requirements of investment prudence and
diversification, and the requirement that such a Plan's investments be made in
accordance with the documents governing the Plan. Under ERISA, any person who
exercises any authority or control with respect to the management or disposition
of the assets of a Plan is considered to be a fiduciary of such Plan.
Pursuant to Department of Labor Regulation ss.2510.3-101 (the "Plan Assets
Regulation"), in general, when a Plan acquires an equity interest in an entity
such as the Trust, then, unless certain exceptions apply, the Plan's assets
include both the equity interest and an undivided interest in each of the
underlying assets of the entity. In general, an "equity interest" is defined
under the Plan Assets Regulation as any interest in an entity other than an
instrument which is treated as indebtedness under applicable local law and which
has no substantial equity features. It is anticipated that the New Certificates,
like the Old Certificates, will be considered equity interests in the Trust for
purposes of the Plan Assets Regulation, and that the assets of the Trust may
therefore constitute plan assets if such Certificates are acquired by Plans. In
such event, the fiduciary and prohibited transaction restrictions of ERISA and
section 4975 of the Code would apply to transactions involving the assets of the
Trust.
In addition, Plan fiduciaries must determine whether the acquisition and
holding of New Certificates would result in prohibited transactions if Plans
that acquired the New Certificates were deemed to own an interest in the
underlying assets of the Trust under the rules discussed above. Accordingly, a
Plan fiduciary considering an investment in the Trust should consider whether
Chrysler, the Trustee, or any of their affiliates is a party in interest or
disqualified person with respect to the Plan. Depending on the relevant facts
and circumstances, certain prohibited transaction exemptions may apply to the
acquisition or holding of the New Certificates--for example, Prohibited
Transaction Class Exemption ("PTE") 96-23, which exempts certain transactions
effected on behalf of a Plan by an "in-house asset manager"; PTE 95-60, which
exempts certain transactions between insurance company general accounts and
parties in interest; PTE 91-38, which exempts certain transactions between bank
collective investment funds and parties in interest; PTE 90-1, which exempts
certain transactions between insurance company pooled separate accounts and
parties in interest; PTE 84-14, which exempts certain transactions effected on
behalf of a Plan by a "qualified professional asset manager"; and PTE 75-1,
which exempts certain transactions effected through a bank supervised by the
United States or a State. There can be no assurance that any of these exemptions
will apply with respect to any Plan's acquisition of the New Certificates, or
that such an exemption, if it did apply, would apply to all prohibited
transactions that may occur in connection with such investment, including, for
example, transactions involving plan assets arising in the operations of the
Trust.
PLAN OF DISTRIBUTION
Each broker or dealer that receives New Certificates for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Certificates. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker or dealer in connection with resales of New Certificates received in
exchange for Old Certificates where such Old Certificates were acquired as a
result of market-making activities or other trading activities. PSSA has agreed
that it will make this Prospectus, as amended or supplemented, available to any
broker or dealer for use in connection with any such resale for a period of one
year. In addition, until such date, all brokers or dealers effecting
transactions in the New Certificates may be required to deliver a prospectus.
PSSA will not receive any proceeds from any sale of New Certificates by
brokers or dealers. New Certificates received by brokers or dealers for their
own account pursuant to the Exchange Offer may be sold from time to time in one
or more transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the New Certificates or a combination of such
methods of resale, at market prices prevailing at the time of resale, at prices
related to such prevailing market prices or negotiated prices. Any such resale
may be made directly to purchasers or to or through brokers or dealers who may
receive compensation in the form of commissions or concessions from any such
broker or dealer and/or the purchasers of any such New Certificates. Any broker
or dealer that resells New Certificates that were received by it for its own
account pursuant to the Exchange Offer and any broker or dealer that
participates in a distribution of such New Certificates may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit on any
such resale of New Certificates and any commissions or concessions received by
any such persons may be deemed to be underwriting compensation under the
Securities Act. The Letter of Transmittal states that by acknowledging that it
will deliver, and by delivering a prospectus, a broker or dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act.
Starting on the Expiration Date, PSSA promptly will send additional copies
of this Prospectus and any amendment or supplement to this Prospectus to any
broker or dealer that requests such documents in the Letter of Transmittal. PSSA
has agreed to pay all expenses incident to the Exchange Offer (including the
expenses of one counsel for the holders of the Certificates) other than
commissions or concessions of any broker or dealer and will indemnify the holder
of the New Certificates (including any broker or dealer) against certain
liabilities, including liabilities under the Securities Act.
LEGAL MATTERS
The validity of the New Certificates and certain U.S. federal income
taxation matters will be passed upon for the Trust by Brown & Wood LLP, New
York, New York.
<PAGE>
APPENDIX A
RECEIPTS ON CORPORATE SECURITIES TRUST, SERIES CHR 1998-1
ALLOCATION SCHEDULE FOR DISTRIBUTION FOLLOWING
ANY OPTIONAL REDEMPTION, MATURITY
SHORTENING REDEMPTION OR IN-KIND DISTRIBUTION*
DISTRIBUTION JUST PRIOR DISTRIBUTION JUST AFTER
TO INTEREST PAYMENT INTEREST PAYMENT
------------------------ -------------------------
Amortizing Residual Amortizing Residual
Date Class Class Class Class
- ---------------- ---------- -------- ---------- --------
August 1, 1998 77.45% 22.55% 76.62% 23.38%
February 1, 1999 76.62% 23.38% 75.75% 24.25%
August 1, 1999 75.75% 24.25% 74.86% 25.14%
February 1, 2000 74.86% 25.14% 73.93% 26.07%
August 1, 2000 73.93% 26.07% 72.96% 27.04%
February 1, 2001 72.96% 27.04% 71.96% 28.04%
August 1, 2001 71.96% 28.04% 70.92% 29.08%
February 1, 2002 70.92% 29.08% 69.85% 30.15%
August 1, 2002 69.85% 30.15% 68.73% 31.27%
February 1, 2003 68.73% 31.27% 67.58% 32.42%
August 1, 2003 67.58% 32.42% 66.38% 33.62%
February 1, 2004 66.38% 33.62% 65.13% 34.37%
August 1, 2004 65.13% 34.87% 63.84% 36.16%
February 1, 2005 63.84% 36.16% 62.50% 37.50%
August 1, 2005 62.50% 37.50% 61.12% 38.88%
February 1, 2006 61.12% 38.88% 59.68% 40.32%
August 1, 2006 59.68% 40.32% 58.19% 41.81%
February 1, 2007 58.19% 41.81% 56.64% 43.36%
August 1, 2007 56.64% 43.36% 55.04% 44.96%
February 1, 2008 55.04% 44.96% 53.37% 46.63%
August 1, 2008 53.37% 46.63% 51.65% 48.35%
February 1, 2009 51.65% 48.35% 49.86% 50.14%
August 1, 2009 49.36% 50.14% 48.00% 52.00%
February 1, 2010 48.00% 52.00% 46.08% 53.92%
August 1, 2010 46.08% 53.92% 44.08% 55.92%
February 1, 2011 44.08% 55.92% 42.01% 57.99%
August 1, 2011 42.01% 57.99% 39.87% 60.13%
February 1, 2012 39.87% 60.13% 37.64% 62.36%
August 1, 2012 37.64% 62.36% 35.34% 64.66%
February 1, 2013 35.34% 64.66% 32.94% 67.06%
August 1, 2013 32.94% 67.06% 30.46% 69.54%
February 1, 2014 30.46% 69.54% 27.89% 72.11%
August 1, 2014 27.89% 72.11% 25.22% 74.78%
February 1, 2015 25.22% 74.78% 22.46% 77.54%
August 1, 2015 22.46% 77.54% 19.59% 80.41%
February 1, 2016 19.59% 80.41% 16.61% 83.39%
August 1, 2016 16.61% 83.39% 13.53% 86.47%
February 1, 2017 13.53% 86.47% 10.33% 89.67%
August 1, 2017 10.33% 89.67% 7.01% 92.99%
February 1, 2018 7.01% 92.99% 3.57% 96.43%
August 1, 2018 3.57% 96.43% 0.00% 100.00%
* The proceeds of any Optional Redemption, Maturity Shortening Redemption or
In-Kind Distribution occurring on any of the above Scheduled Distribution
Dates with respect to the CHR Debentures will be allocated to the above
percentages if such proceeds are distributed on the above Scheduled
Distributed Dates. The proceeds of any such event occurring on the dates
other than Scheduled Distribution Dates will be distributed in accordance
with the ratio described in the Prospectus.
<PAGE>
APPENDIX B
Amortizing Class Certificates
Schedule of Amortizing Payments
<TABLE>
<CAPTION>
INTEREST PRINCIPAL TOTAL REMAINING
DATE AMOUNT AMOUNT CASHFLOW BALANCE
- ---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
August 1, 1998 $ 1,563,126.18 $ 576,583.82 $ 2,139,710.00 $ 47,519,606.18
February 1, 1999 $ 1,544,387.20 $ 595,322.80 $ 2,139,710.00 $ 46,924,283.38
August 1, 1999 $ 1,525,039.21 $ 614,670.79 $ 2,139,710.00 $ 46,309,612.59
February 1, 2000 $ 1,505,062.41 $ 634,647.59 $ 2,139,710.00 $ 45,674,965.00
August 1, 2000 $ 1,484,436.36 $ 655,273.64 $ 2,139,710.00 $ 45,019,691.36
February 1, 2001 $ 1,463,139.97 $ 676,570.03 $ 2,139,710.00 $ 44,343,121.33
August 1, 2001 $ 1,441,151.44 $ 698,558.56 $ 2,139,710.00 $ 43,644,562.77
February 1, 2002 $ 1,418,448.29 $ 721,261.71 $ 2,139,710.00 $ 42,923,301.06
August 1, 2002 $ 1,395,007.28 $ 744,702.72 $ 2,139,710.00 $ 42,178,598.34
February 1, 2003 $ 1,370,804.45 $ 768,905.55 $ 2,139,710.00 $ 41,409,692.79
August 1, 2003 $ 1,345,815.02 $ 793,894.98 $ 2,139,710.00 $ 40,615,797.81
February 1, 2004 $ 1,320,013.43 $ 819,696.57 $ 2,139,710.00 $ 39,796,101.24
August 1, 2004 $ 1,293,373.29 $ 846,336.71 $ 2,139,710.00 $ 38,949,764.53
February 1, 2005 $ 1,265,867.35 $ 873,842.65 $ 2,139,710.00 $ 38,075,921.88
August 1, 2005 $ 1,237,467.46 $ 902,242.54 $ 2,139,710.00 $ 37,173,679.34
February 1, 2006 $ 1,208,144.58 $ 931,565.42 $ 2,139,710.00 $ 36,242,113.92
August 1, 2006 $ 1,177,368.70 $ 961,841.30 $ 2,139,710.00 $ 35,280,272.62
February 1, 2007 $ 1,146,608.86 $ 993,101.14 $ 2,139,710.00 $ 34,287,171.48
August 1, 2007 $ 1,114,333.07 $ 1,025,376.93 $ 2,139,710.00 $ 33,261,794.55
February 1, 2008 $ 1,081,008.32 $ 1,058,701.68 $ 2,139,710.00 $ 32,203,092.87
August 1, 2008 $ 1,046,600.52 $ 1,093,109.48 $ 2,139,710.00 $ 31,109,983.39
February 1, 2009 $ 1,011,074.46 $ 1,128,635.54 $ 2,139,710.00 $ 29,981,347.85
August 1, 2009 $ 974,393.81 $ 1,165,316.19 $ 2,139,710.00 $ 28,816,031.66
February 1, 2010 $ 936,521.03 $ 1,203,188.97 $ 2,139,710.00 $ 27,612,842.69
August 1, 2010 $ 897,417.39 $ 1,242,292.61 $ 2,139,710.00 $ 26,370,550.08
February 1, 2011 $ 857,042.88 $ 1,282,667.12 $ 2,139,710.00 $ 25,087,882.96
August 1, 2011 $ 815,356.20 $ 1,324,353.80 $ 2,139,710.00 $ 23,763,529.16
February 1, 2012 $ 772,314.70 $ 1,367,395.30 $ 2,139,710.00 $ 22,396,133.86
August 1, 2012 $ 727,874.35 $ 1,411,835.65 $ 2,139,710.00 $ 20,984,298.21
February 1, 2013 $ 681,989.69 $ 1,457,720.31 $ 2,139,710.00 $ 19,526,577.90
August 1, 2013 $ 634,613.78 $ 1,505,096.22 $ 2,139,710.00 $ 18,021,481.68
February 1, 2014 $ 585,698.15 $ 1,554,011.85 $ 2,139,710.00 $ 16,467,469.83
August 1, 2014 $ 535,192.77 $ 1,604,517.23 $ 2,139,710.00 $ 14,862,952.60
February 1, 2015 $ 483,045.96 $ 1,656,664.04 $ 2,139,710.00 $ 13,206,288.56
August 1, 2015 $ 429,204.38 $ 1,710,505.62 $ 2,139,710.00 $ 11,495,782.94
February 1, 2016 $ 373,612.95 $ 1,766,097.05 $ 2,139,710.00 $ 9,729,685.89
August 1, 2016 $ 316,214.79 $ 1,823,495.21 $ 2,139,710.00 $ 7,906,190.68
February 1, 2017 $ 256,951.20 $ 1,882,758.80 $ 2,139,710.00 $ 6,023,431.88
August 1, 2017 $ 195,761.54 $ 1,943,948.46 $ 2,139,710.00 $ 4,079,483.42
February 1, 2018 $ 132,583.21 $ 2,007,126.79 $ 2,139,710.00 $ 2,072,356.63
August 1, 2018 $ 67,353.37 $ 2,072,356.63 $ 2,139,710.00 $ 0.00
</TABLE>
* Schedule assumes no Optional Redemption, Shortened Maturity Redemption,
In-Kind Distribution or distribution of the CHR Debentures in exchange for
certificates.
<PAGE>
================================================================================
$48,096,190
RECEIPTS ON CORPORATE
SECURITIES TRUST, SERIES CHR 1998-1
Offer to Exchange
Receipts on Corporate Securities,
Series CHR 1998-1, Amortizing Class
which have been registered under the
Securities Act of 1933, as amended,
For any and all outstanding
Receipts on Corporate Securities,
Series CHR 1998-1, Amortizing Class
____________, 1998
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
-----------------------------------------
PSSA's Bylaws provide that PSSA shall indemnify each of its directors and
officers who was or is a party or is threatened to be made a party to any
threatened, pending or contemplated action, suit or proceeding, whether civil,
criminal, administrative or investigative by reason of the fact that he is or
was a director or officer of PSSA other than an action by or in the right of
PSSA (for which PSSA may indemnify such persons under certain circumstances).
Section 145 of the General Corporation Law of Delaware (the "GCL") provides
as follows:
"(a) A corporation shall have the power to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation ) by
reason of the fact that the person is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by the person in connection with such action, suit or proceeding if the
person acted in good faith and in a manner the person reasonably believed to be
in or not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe the
person's conduct was unlawful. The termination of any action, suit or proceeding
by judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which the person reasonably believed to be
in or not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had reasonable cause to believe that the
person's conduct was unlawful.
(b) A corporation shall have the power to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred by
the person in connection with the defense or settlement of such action or suit
if the person acted in good faith and in a manner the person reasonably believed
to be in or not opposed to the best interests of the corporation and except that
no indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to liable to the corporation unless
and only to the extent that the Court of Chancery or the court in which such
action or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses which
the Court of Chancery or such other court shall deem proper.
(c) To the extent that a present or former director or officer of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense of any claim, issue or matter therein, such person shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the present or
former director, officer, employee or agent is proper in the circumstances
because the person has met the applicable standard of conduct set forth in
subsections (a) and (b) of this section. Such determination shall be made with
respect to a person who is a director or officer at the time of such
determination, (1) by a majority vote of the directors who are not parties to
such action, suit or proceeding, even though less than a quorum, or (2) by a
committee of such directors designated by majority vote of such directors, even
though less than a quorum, or (3) if there are no such directors, or if such
directors so direct, by independent legal counsel in a written opinion, or (4)
by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or director
in defending any civil, criminal, administrative or investigative action, suit
or proceeding may be paid by the corporation in advance of the final disposition
of such action, suit or proceeding upon receipt of undertaking by or on behalf
of such director or officer to repay such amount if it shall ultimately be
determined that such person is not entitled to be indemnified by the corporation
as authorized in this section. Such expenses (including attorneys' fees)
incurred by former directors and officers or other employees and agents may be
so paid upon such terms and conditions, if any, as the corporation deems
appropriate.
(f) The indemnification and advancement of expenses provided by, or granted
pursuant to, the other subsections of this section shall not be deemed exclusive
of any other rights to which those seeking indemnification or advancement of
expenses may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in such person's
official capacity and as to action in another capacity while holding such
office.
(g) A corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against such
person and incurred by such person in any such capacity, or arising out of such
person's status as such, whether or not the corporation would have the power to
indemnify such person against such liability under this section.
(h) For purposes of this section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, so that
any person who is or was a director, officer, employee or agent for such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under this section with respect to the resulting or surviving
corporation as such person would have with respect to such constituent
corporation if its separate existence had continued.
(i) For purposes of this section, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee, or
agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner such person
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to in this
section.
(j) The indemnification and advancement of expenses provided by, or granted
pursuant to, this section shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive jurisdiction to
hear and determine all actions for advancement of expenses or indemnification
brought under this section or under any bylaw, agreement, vote of stockholders
or disinterested directors, or otherwise. The Court of Chancery may summarily
determine a corporation's obligation to advance expenses (including attorneys'
fees)."
The Amended and Restated Certificate of Incorporation of PSSA also limits
the personal liability of directors to PSSA and its stockholders for monetary
damages resulting from certain breaches of the directors' fiduciary duties. The
Amended and Restated Certificate of Incorporation of PSSA provides as follows:
"No director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director; provided that the provisions of this ARTICLE ELEVENTH shall
not eliminate or limit the liability of a director (a) for any breach of the
Director's duty of loyalty to the Corporation and to its stockholders, (b) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (c) under Section 174 of the General Corporation Law
of the State of Delaware or (d) for any transaction from which such director
derived any improper personal benefit. If the GCL is amended after the filing of
this Amended and Restated Certificate of Incorporation so as to authorize
corporate action further eliminating or limiting the personal liability of
directors, then the liability of each director of the Corporation shall be
eliminated or limited to the fullest extent permitted by the law of the State of
Delaware as the same exists from time to time. Any repeal or modification of
this ARTICLE ELEVENTH by the stockholders of the Corporation shall not adversely
affect any elimination or limitation on the personal liability of a director
existing at the time of such repeal or modification."
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
Exhibit
Number Exhibit Description
- ------- -------------------
Exhibit 3.1 Amended and Restated Certificate of
Incorporation of Prudential Securities
Structured Assets, Inc., dated August 25, 1997.
Exhibit 3.2 Bylaws of Prudential Securities Structured
Assets, Inc., dated August 21, 1997.
Exhibit 4.1 Form of Certificate of Receipts on Corporate
Securities, Series CHR 1998-1, Amortizing Class.
Exhibit 4.2 Base Trust Agreement, dated August 28, 1997,
between Prudential Securities Structured Assets,
Inc. and The Bank of New York, as trustee.*
Exhibit 4.3 Base Amendment No. 1, dated February 27, 1998.+
Exhibit 4.4 Amendment No. 2, dated April 28, 1998.+
Exhibit 4.5 Series CHR 1998-1 Supplement dated June 9, 1998
between Prudential Securities Structured Assets,
Inc. and The Bank of New York, as trustee.
Exhibit 4.6 Registration Rights Agreement dated June 9, 1998
between Prudential Securities Structured Assets,
Inc. and Prudential Securities Incorporated.
Exhibit 4.7 Certificate of Trust by The Bank of New York,
dated June 9, 1998.
Exhibit 5.1 Opinion of Brown & Wood LLP relating to the
legality of the New Certificates.
Exhibit 8.1 Opinion of Brown & Wood LLP relating to certain
U.S. federal income tax matters (included in
Exhibit 5.1).
Exhibit 23.1 Consent of Brown & Wood LLP (included in Exhibit
5.1).
Exhibit 24.1 Powers of Attorney (included on the signature
page of the Registrant in this Registration
Statement).
Exhibit 25.1 Form T-1 Statement of Eligibility of The Bank of
New York, as trustee, relating to the Trust
Certificates.
Exhibit 99.1 Form of Letter of Transmittal.
Exhibit 99.2 Form of Notice of Guaranteed Delivery.
* Incorporated by reference to Exhibit 4.2 attached to the Registration
Statement on Form S-4 filed by Prudential Securities Structured Assets, Inc. and
the Receipts on Corporate Securities Trust, Series FDX 1997-1, on October 24,
1997. (File No. 333-38745).
+ Incorporated by reference to Exhibits 4.4 and 4.5 attached to Amendment No. 2
to the Registration Statement on Form S-4 filed by Prudential Securities
Structured Assets, Inc. and the Receipts on Corporate Securities Trust, Series
FDX 1997-1 on May 6, 1998. (File No. 333-38745).
ITEM 22. UNDERTAKINGS
------------
(a) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
and Exchange Act of 1934 (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Securities and
Exchange Act of 1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial BONA FIDE offering thereof.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant, pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by any such director, officer or controlling
person in connection with the securities being registered, the registrant will
submit, unless in the opinion of its counsel the matter has been settled by
controlling precedent, to a court of appropriate jurisdiction the question of
whether or not such indemnification is against Public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
(c) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
(d) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective. This exchange
offer, however, does not involve any acquisition, nor are any acquisitions with
respect to PSSA expected after the registration statement becomes effective. The
transaction covered by this registration statement only involves the exchange of
registered for unregistered securities.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York,
State of New York, on December 7, 1998.
PRUDENTIAL SECURITIES STRUCTURED ASSETS, INC.
By: /s/Jeffrey J. Theodorou
-----------------------
Jeffrey J. Theodorou
President
RECEIPTS ON CORPORATE SECURITIES TRUST, SERIES
CHR 1998-1
By: PRUDENTIAL SECURITIES STRUCTURED ASSETS,
INC., as depositor
By: /s/Jeffrey J. Theodorou
-----------------------
Jeffrey J. Theodorou
President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Jeffrey J. Theodorou, Terrance
O'Dwyer and Lawrence S. Motz, and each of them, his or her true and lawful
attorneys-in-fact and agents, each acting alone, with full power of substitution
and resubstitution, for him or her and in his or her name, place and stead, in
any and all capacities, to sign a Registration Statement on Form S-4 of
Prudential Securities Structured Assets, Inc. with respect to securities issued
by Receipts on Corporate Securities Trust, Series CHR 1998-1, and any and all
amendments thereto, including post-effective amendments, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, each acting alone, full power and authority to do and perform to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, each acting alone, or
the substitutes for each attorneys-in-fact and agents, may lawfully do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities and on the date indicated above.
Signature Title
- --------- -----
/s/Howard Whitman
- ----------------- Chairman of the Board and Director
Howard Whitman
/s/Jeffrey J. Theodorou
- ----------------------- President
Jeffrey J. Theodorou (Principal Executive Officer)
/s/William J. Horan
- ------------------- Chief Financial Officer
William J. Horan (Principal Financial and
Accounting Officer)
/s/Elizabeth W. Castagna
- ------------------------ Treasurer
Elizabeth W. Castagna
/s/Alan D. Hogan
- ---------------- Director
Alan D. Hogan
/s/Ruth Lavelle
- --------------- Director
Ruth Lavelle
*By /s/Jeffrey J. Theodorou
------------------------
Jeffrey J. Theodorou
Pro Se and as Attorney-in-Fact
<PAGE>
EXHIBIT INDEX
Exhibit
Number Exhibit Description
- ------ -------------------
Exhibit 3.1 Amended and Restated Certificate of Incorporation of Prudential
Securities Structured Assets, Inc., dated August 25, 1997.
Exhibit 3.2 Bylaws of Prudential Securities Structured Assets, Inc., dated
August 21, 1997.
Exhibit 4.1 Form of Certificate of Receipts on Corporate Securities, Series
CHR 1998-1, Amortizing Class.
Exhibit 4.2 Base Trust Agreement, dated August 28, 1997, between Prudential
Securities Structured Assets, Inc. and The Bank of New York, as
trustee.*
Exhibit 4.3 Base Amendment No. 1 to the Base Trust Agreement, dated
February 27, 1998.+
Exhibit 4.4 Amendment No. 2 to the Base Trust Agreement, dated April 28,
1998.+
Exhibit 4.5 Series CHR 1998-1 Supplement, dated June 9, 1998 between
Prudential Securities Structured Assets, Inc. and The Bank of
New York, as trustee.
Exhibit 4.6 Registration Rights Agreement dated June 9, 1998 Prudential
Securities Structured Assets, Inc. and Prudential Securities
Incorporated.
Exhibit 4.7 Certificate of Trust by The Bank of New York, dated June 9,
1998.
Exhibit 5.1 Opinion of Brown & Wood LLP relating to the legality of the New
Certificates.
Exhibit 8.1 Opinion of Brown & Wood LLP relating to certain U.S. federal
income tax matters (included in Exhibit 5.1).
Exhibit 23.1 Consent of Brown & Wood LLP (included in Exhibit 5. 1).
Exhibit 24.1 Powers of Attorney (included on signature page of the
Registrant in this Registration Statement).
Exhibit 25.1 Form T-1 Statement of Eligibility of The Bank of New York, as
trustee, relating to the Trust Certificates.
Exhibit 99.1 Form of Letter of Transmittal.
Exhibit 99.2 Form of Notice of Guaranteed Delivery.
* Incorporated by reference to Exhibit 4.2 attached to the Registration
Statement on Form S-4 filed by Prudential Securities Structured Assets,
Inc. and the Receipts on Corporate Securities Trust, Series FDX 1997-1 on
October 24, 1997. (File No. 333-38745).
+ Incorporated by reference to Exhibits 4.4 and 4.5 attached to Amendment No.
2 to the Registration Statement on Form S-4 filed by Prudential Securities
Structured Assets, Inc. and the Receipts on Corporate Securities Trust,
Series FDX 1997-1 on May 6, 1998. (File No. 333-38745).
Exhibit 3.1
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
PRUDENTIAL SECURITIES STRUCTURED ASSETS, INC.
------------------------------------
Pursuant to Sections 242 and 245 of the Delaware General
Corporation Law
------------------------------------
Prudential Securities Structured Assets, Inc. (the "Corporation"), a
corporation originally incorporated under the name "PSSA Corp." on May 30, 1995
and organized and existing under and by virtue of the General Corporation Law of
the State of Delaware (the "GCL"), DOES HEREBY CERTIFY:
1) That this Amended and Restated Certificate of Incorporation was
duly adopted by the Board of Directors and adopted by the stockholders in
accordance with the provisions of Sections 228, 242 and 245 of the GCL.
2) That the Certificate of Incorporation of the Corporation is hereby
restated, integrated and amended to read in its entirety as follows:
<PAGE>
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
PRUDENTIAL SECURITIES STRUCTURED ASSETS, INC.
FIRST: The name of the corporation is Prudential Securities Structured
-----
Assets, Inc. (the "Corporation").
-----------
SECOND: The address of the Corporation's registered office in the
------
State of Delaware is 1209 Orange Street, Wilmington, Delaware 19801. The name of
its registered agent at such address is The Corporation Trust Company.
THIRD: The nature of the business or purpose to be conducted or
-----
promoted by the Corporation is to engage exclusively in the following
activities:
a) to enter into, acquire, own, hold, transfer, assign, pledge and
otherwise deal from time to time with fixed-income securities
issued by corporations or other obligors, and to deposit such
securities ("Trust Assets") into one or more trusts (each a
"Trust") in exchange for trust certificates (the "Trust
Certificates"), representing the entire beneficial interest in
such Trust Assets;
b) to enter into, acquire, own, hold, transfer, assign, pledge and
otherwise deal from time to time with any letters of credit,
guarantees, collateral and other credit support (each, a "Credit
Support") and derivative contracts relating to the Trust Assets
and to deposit the same in the Trust;
c) to enter into any agreement that provides for the administration
and servicing of and collection of amounts due in respect of the
Trust Assets;
d) to sell and deliver one or more series or classes of Trust
Certificates in the public or private capital markets, including
without limitation in public offerings registered under the
Securities Act of 1933, as amended;
e) to enter into arrangements with respect to the financing of the
Trust Certificates provided that such financings are non-recourse
to the Corporation other than to Trust Certificates retained by
it; and
f) to engage in any activity and to exercise any powers permitted to
corporations under the laws of the State of Delaware that are
incident to the foregoing and necessary or convenient to
accomplish the foregoing.
FOURTH: (a) The total number of shares of all classes of capital stock
------
that the Corporation shall have authority to issue is One Hundred (100) shares
of common stock, par value One Dollar ($1.00) per share (the "Common Stock").
(b) All voting rights shall be vested in the holders of the Common
Stock, and at each meeting of stockholders of the Corporation, each holder of
Common Stock shall be entitled to one vote for each share on each matter to come
before the meeting.
(c) Dividends may be declared upon and paid to the holders of the
Common Stock as the Board of Directors shall determine.
(d) In the event of voluntary or involuntary liquidation or
dissolution of the Corporation, the holders of the Common Stock shall be
entitled to share ratably in all assets of the Corporation.
FIFTH: The business and affairs of the Corporation shall be managed by
-----
and under the direction of the Board of Directors.
(a) At any given time, the Corporation will have at least one member
of the Corporation's Board of Directors (the "Independent Director") and at
--------------------
least one officer (the "Independent Officer"), each of whom shall be an
-------------------
individual who is not (and is not an Associate, as defined below, of), and for a
five-year period prior to election or appointment as the case may be, has not
been (and has not been an Associate of), a direct, indirect or beneficial holder
of two percent or more of any class of equity securities, or a director,
officer, employee, customer or supplier (in either case, of goods or services,
or both, having a value of $1,000 or more), of any Affiliate (as defined below)
of the Corporation. The same individual may serve both as an Independent
Director and an Independent Officer.
(b) No Independent Director serving pursuant to the requirements Of
this ARTICLE FIFTH shall, with regard to any matter described in ARTICLE EIGHTH,
------------- --------------
owe a fiduciary duty or other obligation to the stockholders (except as may
specifically be required by the statutory law of any applicable jurisdiction);
instead, such Independent Director's fiduciary duty and other obligations with
regard to any matter described in ARTICLE EIGHTH shall be owed to the
---------------
Corporation including, without limitation, the Corporation's creditors.
Hereafter, every subsequent stockholder of the Corporation shall be deemed to
have consented to the foregoing by virtue of such stockholder's purchase of
shares of capital stock of the Corporation, and no further act or deed of any
stockholder shall be required to evidence such consent. In addition, no
Independent Director may be removed unless his or her successor has been duly
elected.
As used in this Amended and Restated Certificate of Incorporation, (i)
a "Person" is an individual, partnership, corporation. (including a business
------
trust), joint stock company, trust, unincorporated association, partnership,
limited liability company, joint venture, government (including any agency or
subdivision thereof) or any other entity, (ii) an "Affiliate" of a Person is a
---------
Person that directly or indirectly through one or more intermediaries, controls
or is controlled by, or is under common control with, the Person specified, and
(iii) an "Associate," when used to indicate a relationship with any Person, is
---------
(A) a corporation or organization of which such Person is an officer, director
or partner or is, directly or indirectly, the beneficial owner of ten percent or
more of any class of equity securities, (B) any trust or other estate in which
such Person serves as trustee or in a similar capacity, and (C) any relative or
spouse of such Person, or any relative of such spouse, who has the same home as
such Person.
SIXTH: The Corporation is to have perpetual existence.
-----
SEVENTH: Meetings of stockholders shall be held at such place, within
-------
or without the State of Delaware, as may be designated by or in the manner
provided in the Bylaws or, if not so designated or provided, at the registered
office of the Corporation in the State of Delaware. Elections of directors need
not be by ballot unless and except to the extent that the Bylaws so provide. The
books of the Corporation may be kept (subject to any provision contained in any
applicable statute) outside the State of Delaware at such place or places as may
be designated from time to time by the Corporation's Board of Directors or in
the Bylaws of the Corporation.
EIGHTH: The Corporation shall not, without the affirmative vote of
------
each member of the Corporation's Board of Directors, including the affirmative
vote of each Independent Director:
Corporation in connection with, indebtedness of the Corporation
permitted by this Amended and Restated Certificate of
Incorporation, has a certificate of incorporation containing
provisions substantially identical to the provisions of
ARTICLES THIRD, FIFTH, EIGHTH and NINTH of this Amended and
-------- ----- ----- ------ -----
Restated Certificate of Incorporation, and, immediately after
giving effect to the proposed merger, consolidation or
transfer, no default or event of default under any obligation
of the Corporation would occur and be continuing; or directly
or indirectly purchase or otherwise acquire all or
substantially all of the assets or any stock of any class of
any corporation, partnership, joint venture or other entity; or
c) dissolve or liquidate, in whole or in part.
Provided that if there is not one Independent Director then in office and
acting, a vote upon any matter set forth in this ARTICLE EIGHTH shall not be
--------------
taken unless and until one Independent Director shall have been duly elected.
NINTH: Without the affirmative vote of each member of the
-----
Corporation's Board of Directors, including the affirmative vote of the
Independent Director, the Corporation shall not amend this Amended and Restated
Certificate of Incorporation, provided that if there is not one Independent
Director then in office, no vote upon any matter set forth in this ARTICLE NINTH
-------------
shall be taken unless and until one Independent Director shall have been duly
elected.
a) make an assignment for the benefit of creditors, file a
petition in bankruptcy, petition or apply to any tribunal for
the appointment of a custodian, receiver, trustee or other
similar official for it or for a substantial part of its
property, commence any proceeding under any bankruptcy,
reorganization, arrangement, readjustment of debt, dissolution
or liquidation law or statute or similar law or statute of any
jurisdiction, whether now or hereinafter in effect, consent or
acquiesce in the filing of any such petition, application,
proceeding or appointment of or taking possession by the
custodian, receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Corporation or
any substantial part of its property, admit its inability to
pay its debts generally as they become due, or declare or
effect a moratorium on its debt or authorize any of the
foregoing to be done or taken on behalf of the Corporation;
b) be a party to any merger or consolidation or sell, transfer,
assign, convey or lease any substantial part of the assets of
the Corporation, unless the entity (if other than the
Corporation) formed under or surviving the consolidation or
merger or which acquires the properties or assets of the
Corporation is a corporation organized and existing under the
laws of the State of Delaware, expressly assumes the due and
punctual payment of, and all obligations of the
TENTH: In furtherance and not in limitation of the powers conferred by
-----
statute, the Board of Directors of the Corporation is expressly authorized to
exercise, in addition to the powers and authorities hereinbefore or by law
conferred upon it, any such powers and authorities and do all such acts and
things as may be exercised or done by the Corporation, subject, nevertheless, to
the provisions of the laws of the State of Delaware and of this Amended and
Restated Certificate of incorporation and of the Bylaws of the Corporation.
ELEVENTH: No director of the Corporation shall be personally liable to
--------
the Corporation or any of its stockholders for monetary damages for breach of
fiduciary duty as a director; provided that the provisions of this ARTICLE
-------
ELEVENTH shall not eliminate or limit the liability of a director (a) for any
- --------
breach of the director's duty of loyalty to the Corporation and to its
stockholders, (b) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (c) under Section 174 of
the General Corporation Law of the State of Delaware or (d) for any transaction
from which such director derived an improper personal benefit. If the GCL is
amended after the filing of this Amended and Restated Certificate of
Incorporation so as to authorize corporate action further eliminating or
limiting the personal liability of directors, then the liability of each
director of the Corporation shall be eliminated or limited to the fullest extent
permitted by the law of the State of Delaware as the same exists from time to
time. Any repeal or modification of this ARTICLE ELEVENTH by the stockholders of
----------------
the Corporation shall not adversely affect any elimination of or limitation on
the personal liability of a director of the Corporation existing at the time of
such repeal or modification.
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by its duly authorized officer, this 25th day of August, 1997.
PRUDENTIAL SECURITIES STRUCTURED ASSETS, INC.
/s/Paul M. Waldman
-------------------------------
Paul M. Waldman
Assistant Secretary
Exhibit 3.2
PRUDENTIAL SECURITIES STRUCTURED ASSETS, INC.
----------
BYLAWS
August 21,1997
<PAGE>
TABLE OF CONTENTS
Page
I. Meetings of Stockholders......................................... 1
Section 1.1. Annual Meetings.................................. 1
Section 1.2. Special Meetings................................. 1
Section 1.3. Notice of Meeting................................ 1
Section 1.4. Quorum........................................... 1
Section 1.5. Adjournments..................................... 1
Section 1.6. Voting........................................... 1
Section 1.7. Proxies.......................................... 2
Section 1.8. Fixing Date for Determination of Stockholders
of Record........................................ 2
II. Board of Directors............................................... 3
Section 2.1. Powers; Number; Qualifications................... 3
Section 2.2. Election and Term of Office...................... 3
Section 2.3. Vacancies and Additional Directorships........... 3
Section 2.4. Meetings......................................... 3
Section 2.5. Quorum and Manner of Acting...................... 3
Section 2.6. Resignation of Directors......................... 4
Section 2.7. Removal of Directors............................. 4
III. Committees of the Board.......................................... 4
Section 3.1. Designation, Power, Alternate Members and Term
of Office........................................ 4
Section 3.2. Meetings, Notices and Records.................... 4
Section 3.3. Quorum and Manner of Acting...................... 5
Section 3.4. Resignations..................................... 5
Section 3.5. Removal.......................................... 5
Section 3.6. Vacancies........................................ 5
IV. Officers......................................................... 5
Section 4.1. Officers......................................... 5
Section 4.2. Election, Term of Office and Qualifications...... 5
Section 4.3. Other Officers; Bonds............................ 5
Section 4.4. Independent Officer.............................. 6
Section 4.5. Resignations..................................... 6
Section 4.6. Removal.......................................... 6
Section 4.7. Vacancies........................................ 6
Section 4.8. The President.................................... 6
Section 4.9. The Chairman of the Board........................ 6
Section 4.10. The Secretary.................................... 6
Section 4.11. Assistant Secretaries............................ 7
Section 4.12. The Chief Financial Officer...................... 7
Section 4.13. The Treasurer.................................... 7
Section 4.14. Other Officers................................... 8
V. Execution of Instruments and Deposit of Corporate Funds.......... 8
Section 5.1. Execution of Instruments Generally............... 8
Section 5.2. Borrowing........................................ 8
Section 5.3. Deposits......................................... 8
Section 5.4. Checks, Drafts etc............................... 8
Section 5.5. Proxies.......................................... 8
VI. Corporate Seal................................................... 8
Section 6.1. Corporate Seal................................... 9
VII. Fiscal Year...................................................... 9
Section 7.1. Fiscal Year...................................... 9
VIII. Amendments....................................................... 9
Section 8.1. Amendments....................................... 9
IX. Action without a Meeting......................................... 9
Section 9.1. Action without a Meeting......................... 9
X. Indemnification.................................................. 10
Section 10.1. Indemnification.................................. 10
XI. Waiver of Notice................................................. 11
Section 11.1. Waiver of Notice of Meetings of Stockholders,
Directors and Committees......................... 12
<PAGE>
PRUDENTIAL SECURITIES STRUCTURED ASSETS, INC.
BYLAWS
Meetings of Stockholders.
Annual Meetings. The annual meeting of the stockholders for the election of
directors and for the transaction of such other business as properly may come
before such meeting shall be held each year on such date, and at such time and
place within or without the State of Delaware, as may be designated by the Board
of Directors from time to time.
Special Meetings. Special meetings of the stockholders for any proper
purpose or purposes may be called at any time by the Board of Directors, the
President, the Chairman of the Board or any Vice President, to be held on such
date, and at such time and place within or without the State of Delaware, as the
Board of Directors, the President, the Chairman of the Board or any Vice
President, whichever has called the meeting, shall direct. A special meeting of
the stockholders shall be called by the President, the Chairman of the Board or
any Vice President whenever stockholders owning a majority of the shares of the
Corporation then issued and outstanding and entitled to vote on matters to be
submitted to stockholders of the Corporation shall make application therefor in
writing. Any such written request shall state a proper purpose or purposes of
the meeting and shall be delivered to the President, Chairman of the Board or
any Vice President.
Notice of Meeting. Written notice, signed by the President, the Chairman of
the Board, any Vice President, the Secretary or an Assistant Secretary, of every
meeting of stockholders stating the date and time when, and the place where, it
is to be held shall be delivered either personally or by mail to each
stockholder entitled to vote at such meeting not less than ten nor more than
sixty days before the meeting, except as otherwise provided by law. The purpose
or purposes for which the meeting is called may in the case of an annual
meeting, and shall in the case of a special meeting, also be stated. If mailed,
such notice shall be directed to a stockholder at his address as it shall appear
on the stock books of the Corporation, unless he shall have filed with the
Secretary a written request that notices intended for him be mailed to some
other address, in which case it shall be mailed to the address designated in
such request.
Quorum. The presence at any meeting, in person or by proxy, of the holders
of record of a majority of the shares then issued and outstanding and entitled
to vote shall be necessary and sufficient to constitute a quorum for the
transaction of business, except as otherwise provided by law or in the Amended
and Restated Certificate of Incorporation of the Corporation, as amended, from
time to time (hereinafter, the "Amended and Restated Certificate of
Incorporation").
Adjournments. In the absence of a quorum, a majority in interest of the
stockholders entitled to vote, present in person or by proxy, or, if no
stockholder entitled to vote is present in person or by proxy, any officer
entitled to preside at or act as secretary of such meeting, may adjourn the
meeting from time to time until a quorum shall be present.
Voting. Directors shall be chosen by a plurality of the votes cast at the
election, and, except as otherwise provided by law, all other questions shall be
determined by a majority of the votes cast on such question. The stockholders
shall exercise their votes so as to ensure the election to the Board of
Directors of at least such number of Independent Directors (as defined in the
Amended and Restated Certificate of Incorporation of the Corporation) as is
required to permit the Corporation to conduct its business in accordance with
Articles EIGHTH and NINTH of the Corporation's Amended and Restated Certificate
of Incorporation.
Proxies. Each stockholder entitled to vote at a meeting of stockholders or
to express consent or dissent to corporate action in writing without a meeting
may authorize another person or persons to act for him by proxy, but no such
proxy shall be voted or acted upon after eleven months from its date, unless the
proxy provides for a longer period. A duly executed proxy shall be irrevocable
if it states that it is irrevocable and if, and only as long as, it is coupled
with an interest sufficient in law to support an irrevocable power. A
stockholder may revoke any proxy which is not irrevocable by attending the
meeting and voting in person or by filing an instrument in writing revoking the
proxy or another duly executed proxy bearing a later date with the Secretary of
the Corporation.
Fixing Date for Determination of Stockholders of Record. In order that the
Corporation may determine the stockholders entitled to notice of or to vote at
any meeting of stockholders or any adjournment thereof, the Board of Directors
may fix a record date, which record date shall not precede the date upon which
the resolution fixing the record date is adopted by the Board of Directors, and
which record date shall not be more than sixty nor less than ten days before the
date of such meeting. If no record date is fixed by the Board of Directors, the
record date for determining stockholders entitled to notice of or to vote at a
meeting of stockholders shall be at the close of business on the day next
preceding the day on which notice is given, or, if notice is waived, at the
close of business on the day next preceding the day on which the meeting is
held. A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
In order that the Corporation may determine the stockholders entitled to
consent to corporate action in writing without a meeting, the Board of Directors
may fix a record date, which record date shall not precede the date upon which
the resolution fixing the record date is adopted by the Board of Directors, and
which date shall not be more than ten days after the date upon which the
resolution fixing the record date is adopted by the Board of Directors. If no
record date has been fixed by the Board of Directors, the record date for
determining stockholders entitled to consent to corporate action in writing
without a meeting, when no prior action by the Board of Directors is required by
law, shall be the first date on which a signed written consent setting forth the
action taken or proposed to be taken is delivered to the Corporation by delivery
to its registered office in the State of Delaware, its principal place of
business, or an officer or agent of the Corporation having custody of the book
in which proceedings of meetings of stockholders are recorded. Delivery made to
the Corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested. If no record date has been fixed by
the Board of Directors and prior action by the Board of Directors is required by
law, the record date for determining stockholders entitled to consent to
corporate action in writing without a meeting shall be at the close of business
on the day on which the Board of Directors adopts the resolution taking such
prior action.
In order that the Corporation may determine the stockholders entitled to
receive payment of any dividend or other distribution or allotment of any rights
or the stockholders entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful action,
the Board of Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted,
and which record date shall be not more than sixty days prior to such action. If
no record date is fixed, the record date for determining stockholders for any
such purpose shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto.
Board of Directors.
Powers; Number; Qualifications. The business and affairs of the Corporation
shall be managed by or under the direction of the Board of Directors, except as
may otherwise be provided by law or in the Amended and Restated Certificate of
Incorporation of the Corporation. The Board of Directors shall consist of a
minimum of three directors (one of which shall be an Independent Director as
defined in the Amended and Restated Certificate of Incorporation of the
Corporation) until changed as herein provided. The number of directors which
shall constitute the whole Board of Directors may be fixed from time to time by
resolution of the Board of Directors or stockholders (any such resolution of
either the Board of Directors or stockholders being subject to any later
resolution of either of them). Directors need not be stockholders or residents
of the State of Delaware.
Election and Term of Office. Directors shall be elected at the annual
meeting of the stockholders, except as provided in Section 2.3. Each director
(whether elected at an annual meeting or to fill a vacancy or otherwise) shall
continue in office until his successor shall have been elected and qualified or
until his earlier death, resignation or removal in the manner hereinafter
provided.
Vacancies and Additional Directorships. If any vacancy shall occur among
the directors by reason of death, resignation or removal, or as the result of an
increase in the number of directorships, a majority of the directors then in
office, or a sole remaining director, though less than a quorum, may fill any
such vacancy.
Meetings. The Board of Directors by resolution may provide for the holding
of regular meetings and may fix the times and places (within or without the
State of Delaware) at which such meetings shall be held. Notice of regular
meetings shall not be required to be given, provided that whenever the time or
place of regular meetings shall be fixed or changed, notice of such action shall
be mailed promptly to each director who shall not have been present at the
meeting at which such action was taken, addressed to him at his residence or
usual place of business.
Special meetings of the Board of Directors shall be held (within or without
the State of Delaware) upon call by or at the direction of the President, the
Chairman of the Board or one of the directors, except that when the Board of
Directors consists of one director, then the one director may call a special
meeting. Except as otherwise required by law, notice of each special meeting
shall be mailed to each director, addressed to him at his residence or usual
place of business, at least two days before the day on which the meeting is to
be held, or shall be sent to him at such place by telegram, radio or cable, or
telephoned or delivered to him personally, not later than the day before the day
on which the meeting is to be held. Such notice shall state the time and place
of such meeting, but need not state the purposes thereof, unless otherwise
required by law, the Amended and Restated Certificate of Incorporation of the
Corporation or these Bylaws.
Quorum and Manner of Acting. At each meeting of the Board of Directors the
presence of a majority of the total number of members of the Board of Directors
as constituted from time to time, but not less than three, shall be necessary
and sufficient to constitute a quorum for the transaction of business, except
that when the Board of Directors consists of one director, then the one director
shall constitute a quorum; provided that at any regular meeting of the Board of
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Directors as to which a matter requiring the consent of the Independent Director
pursuant to Article EIGHTH AND NINTH of the Amended and Restated Certificate of
Incorporation of the Corporation then at least one of such duly elected
directors must be an Independent Director (if any Independent Directors are then
on the Board of Directors). In the absence of a quorum, a majority of those
present at the time and place of any meeting may adjourn the meeting from time
to time until a quorum shall be present and the meeting may be held as adjourned
without further notice or waiver. A majority of those present at any meeting at
which a quorum is present may decide any question brought before such meeting,
except as otherwise provided by law, the Amended and Restated Certificate of
Incorporation of the Corporation or these Bylaws.
Resignation of Directors. Any director may resign at any time by giving
written notice of such resignation to the Board of Directors, the President, the
Chairman of the Board, the Secretary or Assistant Secretary. Unless otherwise
specified in such notice, such resignation shall take effect upon receipt
thereof by the Board of Directors or any such officer, and the acceptance of
such resignation shall not be necessary to make it effective.
Removal of Directors. At any meeting of the stockholders, duly called as
provided in these Bylaws, any director or directors may be removed from office,
either with or without cause, as provided by law. At such meeting a successor or
successors may be elected by a plurality of the votes cast, or if any such
vacancy is not so filled, it may be filled by the directors as provided in
Section 2.3. No Independent Director may be removed unless his or her successor
has been duly elected.
Committees of the Board.
Designation, Power, Alternate Members and Term of Office. The Board of
Directors may, by resolution passed by a majority of the whole Board of
Directors, designate one or more committees, each committee to consist of one or
more of the directors of the Corporation. Any such committee, to the extent
provided in such resolution and permitted by law, shall have and may exercise
all the powers and authority of the Board of Directors in the management of the
business and affairs of the Corporation, and may authorize the seal of the
Corporation or a facsimile thereof to be affixed to or reproduced on all such
papers as said committee shall designate. The Board of Directors may designate
one or more directors as alternate members of any committee who, in the order
specified by the Board of Directors, may replace any absent or disqualified
member at any meeting of the committee. If at a meeting of any committee one or
more of the members thereof should be absent or disqualified, and if either the
Board of Directors has not so designated any alternate member or members, or the
number of absent or disqualified members exceeds the number of alternate members
who are present at such meeting, then the member or members of such committee
(including alternates) present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint another
director to act at the meeting in the place of any such absent or disqualified
member. The term of office of the members of each committee shall be as fixed
from time to time by the Board of Directors, subject to these Bylaws; provided,
however, that any committee member who ceases to be a member of the Board of
Directors shall ipso facto cease to be a committee member. Each committee shall
appoint a secretary, who may be the Secretary of the Corporation or an Assistant
Secretary thereof.
Meetings, Notices and Records. Each committee may provide for the holding
of regular meetings, with or without notice, and may fix the times and places at
which such meetings shall be held. Special meetings of each committee shall be
held upon call by or at the direction of its chairman or, if there be no
chairman, by or at the direction of any one of its members. Except as otherwise
provided by law, notice of each special meeting of a committee shall be mailed
to each member of such committee, addressed to him at his residence or usual
place of business, at least two days before the day on which the meeting is to
be held, or shall be sent to him at such place by telegram, radio or cable, or
telephoned or delivered to him personally, not later than the day before the day
on which the meeting is to be held. Such notice shall state the time and place
of such meeting, but need not state the purposes thereof, unless otherwise
required by law, the Amended and Restated Certificate of Incorporation of the
Corporation or these Bylaws.
Quorum and Manner of Acting. At each meeting of any committee the presence
of a majority of its members then in office shall be necessary and sufficient to
constitute a quorum for the transaction of business, except that when a
committee consists of one member, then the one member shall constitute a quorum.
At each committee meeting in which a quorum is present, at least one of such
members constituting the quorum must be an Independent Director (so long as an
Independent Director is then on the Board of Directors. In the absence of a
quorum, a majority of the members present at the time and place of any meeting
may adjourn the meeting from time to time until a quorum shall be present and
the meeting may be held as adjourned without further notice or waiver. The act
of a majority of the members present at any meeting at which a quorum is present
shall be the act of such committee. Subject to the foregoing and other
provisions of these Bylaws and except as otherwise determined by the Board of
Directors or as provided by law, each committee may make rules for the conduct
of its business.
Resignations. Any member of a committee may resign at any time by giving
written notice of such resignation to the Board of Directors, the President, the
Chairman of the Board, the Secretary or Assistant Secretary. Unless otherwise
specified in such notice, such resignation shall take effect upon receipt
thereof by the Board of Directors or any such officer, and the acceptance of
such resignation shall not be necessary to make it effective.
Removal. Any member of any committee may be removed at any time with or
without cause by the Board of Directors.
Vacancies. If any vacancy shall occur in any committee by reason of death,
resignation, disqualification, removal or otherwise, the remaining member or
members of such committee, so long as a quorum is present, may continue to act
until such vacancy is filled by the Board of Directors.
Officers.
Officers. The officers of the Corporation shall be a President and a
Secretary, and such other officers as may be elected in accordance with the
provisions of Section 4.3.
Election, Term of Office and Qualifications. Each officer shall be elected
by the Board of Directors. Each such officer (whether elected at the first
meeting of the Board of Directors after the annual meeting of stockholders or to
fill a vacancy or otherwise) shall hold his office until the first meeting of
the Board of Directors after the next annual meeting of stockholders and until
his successor shall have been elected, or until his death, or until he shall
have resigned in the manner provided in Section 4.4 or shall have been removed
in the manner provided in Section 4.5.
Other Officers; Bonds. The Board of Directors may elect other officers
including a Chairman of the Board, one or more Vice-Chairman, one or more Vice
Presidents, a Chief Financial Officer, a Treasurer, and one or more Assistant
Secretaries. If and to the extent required by any securities exchange, board of
trade, commodities exchange, clearing corporation or association or similar
institution in which the Corporation has membership privileges, the officers
shall each be the record owner of Common Stock of the Corporation. The Board may
require any officer, agent or employee, to give bond for the faithful
performance of his duties in such sum and of such character as the Board may
from time to time prescribe.
Independent Officer. An Independent Officer (as defined in the Amended and
Restated Certificate of Incorporation of the Corporation) shall be appointed and
shall hold the position of President, Treasurer, Secretary or Vice President or
shall have responsibility for financial, legal or administrative affairs. The
Independent Officer may be the same individual as the Independent Director.
Resignations. Any officer may resign at any time by giving written notice
of such resignation to the Board of Directors, the President, the Chairman of
the Board, the Secretary or Assistant Secretary. Unless otherwise specified in
such written notice, such resignation shall take effect upon receipt thereof by
the Board of Directors or any such officer, and the acceptance of such
resignation shall not be necessary to make it effective.
Removal. Any officer may be removed with or without cause at any meeting of
the Board of Directors by affirmative vote of a majority of the directors then
in office.
Vacancies. A vacancy in any office by reason of death, resignation,
removal, disqualification or any other cause shall be filled for the unexpired
portion of the term by the Board of Directors at any regular or special meeting
if the vacancy is in an office which is required to be filled by the Board and
may be filled if such vacancy is in an office which may be filled at the Board's
discretion.
The President. Subject to the direction of the Board of Directors, the
President of the Corporation shall be the chief executive officer of the
Corporation and shall have general charge of the business, affairs and property
of the Corporation and general supervision over its officers and agents. If
present, he shall preside at all meetings of stockholders and, in the absence or
nonelection of the Chairman of the Board of Directors, at all meetings of the
Board. He may sign, with any other officer thereunto duly authorized,
certificates representing stock of the Corporation the issuance of which shall
have been duly authorized (the signature to which may be a facsimile signature).
From time to time he shall report to the Board of Directors all matters within
his knowledge which the interests of the Corporation may require to be brought
to their attention. He shall have such other powers and perform such other
duties as may from time to time be prescribed by the Board of Directors or these
Bylaws.
The Chairman of the Board. At the request of the President or in his
absence or disability, the Chairman of the Board or any Vice President
designated by the Board of Directors shall perform all the duties of the
President and, when so acting, shall have all the powers of and be subject to
all restrictions upon the President. The Chairman of the Board may also sign,
with any other officer thereunto duly authorized, certificates representing
stock of the Corporation the issuance of which shall have been duly authorized
(the signature to which may be a facsimile signature). The Chairman of the Board
shall have such other powers and perform such other duties as may from time to
time be prescribed by the Board of Directors, the President or these Bylaws.
The Secretary. The Secretary shall
record all the proceedings of the meetings of the stockholders, the Board
of Directors and any committees in a book or books to be kept for that purpose;
cause all notices to be duly given in accordance with the provisions of
these Bylaws and as required by law;
whenever any committee shall be appointed in pursuance of a resolution of
the Board of Directors, furnish the chairman of such committee with a copy of
such resolution;
be custodian of the records and of the seal of the Corporation, and cause
such seal to be affixed to or a facsimile to be reproduced on all certificates
representing stock of the Corporation prior to the issuance thereof and to all
instruments the execution of which on behalf of the Corporation under its seal
shall have been duly authorized;
see that the lists, books, reports, statements, certificates and other
documents and records required by law are properly kept and filed;
have charge of the stock and transfer books of the Corporation, and exhibit
such stock book at all reasonable times to such persons as are entitled by law
to have access thereto;
sign (unless the Treasurer or an Assistant Secretary shall sign)
certificates representing stock of the Corporation the issuance of which shall
have been duly authorized (the signature to which may be a facsimile signature);
and
in general, perform all duties incident to the office of Secretary and have
such other powers and perform such other duties as may from time to time be
prescribed by the Board of Directors, the President or these Bylaws.
Assistant Secretaries. At the request of the Secretary or in his absence or
disability, the Assistant Secretary shall perform all the duties of the
Secretary and, when so acting, shall have all the powers of and be subject to
all restrictions upon the Secretary. Each Assistant Secretary shall have such
other powers and perform such other duties as may from time to time be
prescribed by the Board of Directors, the President, the Chairman of the Board,
the Secretary or these Bylaws.
The Chief Financial Officer. The Chief Financial Officer shall
render to the Board of Directors, the President or the Chairman of the
Board, whenever requested, a statement of the financial condition of the
Corporation;
cause to be kept at the Corporation's principal office correct books of
account of all its business and transactions and such duplicate books of account
as he shall determine and upon application cause such books or duplicates
thereof to be exhibited to any director;
be empowered, from time to time, to require from the officers or agents of
the Corporation reports or statements giving such information as he may desire
with respect to any and all financial transactions of the Corporation; and
in general, perform all duties incident to the office of Chief Financial
Officer and have such other powers and perform such other duties as may from
time to time be prescribed by the Board of Directors, the President, the
Chairman of the Board or these Bylaws.
The Treasurer. The Treasurer shall
cause the moneys and other valuable effects of the Corporation to be
deposited in the name and to the credit of the Corporation in such banks or
trust companies or with such bankers or other depositaries as shall be selected
in accordance with Section 5.3 or to be otherwise dealt with in such manner as
the Board of Directors may direct;
sign (unless the Secretary or an Assistant Secretary shall sign)
certificates representing stock of the Corporation the issuance of which shall
have been duly authorized (the signature to which may be facsimile signature);
and
in general, perform all duties incident to the office of Treasurer and have
such other powers and perform such other duties as may from time to time be
prescribed by the Board of Directors, the President, the Chairman of the Board
or these Bylaws.
Other Officers. Except as otherwise provided in these Bylaws, the other
officers of the Corporation shall have such powers and duties as may be
delegated to them, respectively, by the Board of Directors.
Execution of Instruments and Deposit of Corporate Funds.
Execution of Instruments Generally. Except as otherwise determined from
time to time by the Board of Directors of the Corporation with respect to
specific contracts or classes of contracts, all contracts shall be signed by an
officer of the Corporation, and such signature may be attested to by the
signature of the Secretary or an Assistant Secretary, who may if he so desires
affix the seal of the Corporation thereto.
Borrowing. No loans or advances shall be obtained or contracted for, by or
on behalf of the Corporation and no negotiable paper shall be issued in its
name, unless and except as authorized by the Board of Directors. Such
authorization may be general or confined to specific instances.
Deposits. All funds of the Corporation not otherwise employed shall be
deposited from time to time to its credit in such banks or trust companies or
with such bankers or other depositories as the Board of Directors may select, or
as may be selected by any officer or officers or agent or agents authorized to
do so by the Board of Directors. Endorsements for deposit to the credit of the
Corporation in any of its duly authorized depositories shall be made in such
manner as the Board of Directors from time to time may determine, or as may be
selected by any officer or officers or agent or agents authorized to do so by
the Board of Directors. Such authorization may be general or confined to
specific instances.
Checks, Drafts etc. All checks, drafts or other orders for the payment of
money, and all notes or other evidences of indebtedness issued in the name of
the Corporation, shall be signed by such officer or officers or agent or agents
of the Corporation, and in such manner, as from time to time shall be determined
by the Board of Directors. Such authorization may be general or confined to
specific instances.
Proxies. Proxies to vote with respect to shares of stock of other
corporations owned by or standing in the name of the Corporation may be executed
and delivered from time to time on behalf of the Corporation by the President,
the Chairman of the Board, any Vice-Chairman or any Vice President or by any
other person or persons thereunto authorized by the Board of Directors.
Corporate Seal.
Corporate Seal. The corporate seal shall be circular in form and shall bear
the name of the Corporation and words and figures denoting its organization
under the laws of the State of Delaware and the year thereof and otherwise shall
be in such form as shall be approved from time to time by the Board of
Directors.
Fiscal Year.
Fiscal Year. The fiscal year of the Corporation shall begin on the first
day of January in each year and end on the last day of December in each year.
Amendments.
Amendments. All Bylaws of the Corporation may be amended or repealed, and
new Bylaws may be made, by an affirmative majority of the votes cast at any
annual or special stockholders' meeting by holders of outstanding shares of
stock of the Corporation entitled to vote, or by an affirmative vote of a
majority of the directors present at any organizational, regular or special
meeting of the Board of Directors.
Action without a Meeting.
Action without a Meeting. Any action which might have been taken under
these Bylaws by a vote of the stockholders at a meeting thereof may be taken
without a meeting, without prior notice and without a vote, if a consent in
writing setting forth the action so taken, shall be signed by the holders of
outstanding shares of stock of the Corporation having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted,
provided that prompt notice shall be given to those stockholders who have not so
consented if less than unanimous written consent is obtained. Any action which
might have been taken under these Bylaws by vote of the directors at any meeting
of the Board of Directors or any committee thereof may be taken without a
meeting if all the members of the Board of Directors or such committee, as the
case may be, consent thereto in writing, and the writing or writings are filed
with the minutes of the Board of Directors or such committee.
Indemnification.
Indemnification. The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation) by
reason of the fact that he is or was a director or officer of the Corporation,
or is or was a director, officer or employee of the Corporation serving at the
request of the Corporation as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a ---- ---------- presumption that
the person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Corporation, and,
with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.
The Corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Corporation to procure a judgment in its favor by
reason of the fact that he is or was a director or officer of the Corporation,
or is or was a director, officer or employee of the Corporation serving at the
request of the Corporation as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Corporation and except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable to the Corporation unless and only to the extent that
the Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of Chancery
or such other court shall deem proper.
To the extent that a director, officer, or employee of the Corporation has
been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in subsections (a) and (b), or in defense of any claim,
issue or matter therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith.
Any indemnification under subsections (a) and (b) (unless ordered by a
court) shall be made by the Corporation only as authorized in the specific case
upon a determination that indemnification of the director, officer, or employee
is proper in the circumstances because he has met the applicable standard of
conduct set forth in subsections (a) and (b). Such determination shall be made
(1) by a majority vote of the directors who are not parties to such action, suit
or proceeding, even though less than a quorum, or (2) if there are no such
directors, or if such directors so direct, by independent legal counsel in a
written opinion, or (3) by the stockholders.
Expenses (including attorneys' fees) incurred by an officer or director in
defending any civil, criminal, administrative, or investigative action, suit or
proceeding may be paid by the Corporation in advance of the final disposition of
such action, suit or proceeding upon receipt of an undertaking by or on behalf
of such director or officer to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the Corporation as
authorized in this Article. Such expenses (including attorneys' fees) incurred
by other employees may be so paid upon such terms and conditions, if any, as the
Board of Directors deems appropriate.
The indemnification and advancement of expenses provided by, or granted
pursuant to, the other subsections of this Article shall not be deemed exclusive
of any other rights to which those seeking indemnification or advancement of
expenses may be entitled under any other bylaw, agreement, vote of stockholders
or disinterested directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office.
The Corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer or employee of the
Corporation, or is or was serving at the request of the Corporation as a
director or officer of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such liability under
the provisions of this Article.
For purposes of this Article, references to "the Corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers and employees so that any person
who is or was a director or officer of such constituent corporation, or is or
was serving at the request of such constituent corporation as a director or
officer of another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under the provisions of this
section with respect to the resulting or surviving corporation as he would have
with respect to such constituent corporation if its separate existence had
continued.
For purposes of this section, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the Corporation" shall include any
service as a director or officer of the Corporation which imposes duties on, or
involves services by, such director or officer with respect to an employee
benefit plan, its participants and beneficiaries; and a person who acted in good
faith and in a manner he reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be deemed to
have acted in a manner "not opposed to the best interests of the Corporation" as
referred to in this Article.
The indemnification and advancement of expenses provided by, or granted
pursuant to, this Article shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director, officer, or
employee and shall inure to the benefit of the heirs, executors and
administrators of such a person.
The Court of Chancery is hereby vested with exclusive jurisdiction to hear
and determine all actions for advancement of expenses or indemnification brought
under this Article or any other bylaw, agreement, vote of stockholders or
disinterested directors, or otherwise. The Court of Chancery may summarily
determine a corporation's obligation to advance expenses (including attorneys'
fees).
Waiver of Notice.
Waiver of Notice of Meetings of Stockholders, Directors and Committees.
Whenever notice is required to be given by law or under any provision of the
Amended and Restated Certificate of Incorporation of the Corporation or these
Bylaws, a written waiver thereof, signed by the person entitled to notice,
whether before or after the time stated therein, shall be deemed equivalent to
notice. Attendance of a person at a meeting shall constitute a waiver of notice
of such meeting, except when the person attends a meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of, any regular or special meeting
of the stockholders, directors or members of a committee of directors need be
specified in any written waiver of notice unless so required by the Amended and
Restated Certificate of Incorporation of the Corporation or these Bylaws.
The CHR Trust Agreement and CHR Trust Certificates
- --------------------------------------------------
WHEREAS, the Corporation and the Bank of New York (the "BONY") entered into
that certain Base Trust Agreement dated as of August 28, 1997, as amended by
Base Supplement No. 1 dated as of February 27, 1998 (together, the "Base Trust
Agreement").
NOW, THEREFORE BE IT:
RESOLVED, that, for purposes of the following resolutions, the term "Senior
Officer" shall mean the President, Chairman, or any Senior Vice President; and
that with regard to a particular matter covered by the following resolutions,
the term "Authorized Person" shall mean any officer or employee of the
Corporation designated from time to time as being authorized to act as an
Authorized Person, in general or specifically with regard to a particular
matter, under the following resolutions, by any one of the Senior Officers in a
written authorization notice, which notice may also set forth any terms,
conditions or limitations on the authority of such Authorized Person to so act
(the "Written Authorization Notice"); and be it
FURTHER RESOLVED, that the Corporation be, and it hereby is, authorized to
enter into a supplement to the Base Trust Agreement (the "CHR Trust Agreement")
upon such terms and conditions as any Senior Officer or, subject to the terms of
any applicable Written Authorization Notice, any of the Authorized Persons
designated by any of them may approve, and each Senior Officer or Authorized
Person in accordance with any applicable Written Authorization Notice be, and
hereby is, authorized in the name and on behalf of the Corporation to execute
and deliver the CHR Trust Agreement; and be it
FURTHER RESOLVED, that the BONY, or any substitute trustee approved by any
of the Senior Officers or Authorized Persons in accordance with any applicable
Written Authorization Notice, is hereby appointed as trustee (the "Trustee")
under the CHR Trust Agreement; and be it
FURTHER RESOLVED, that the Corporation be, and it hereby is, authorized to
acquire $57,830,000 aggregate principal amount of 7.40% Debentures due August 1,
2097 issued by Chrysler Corporation (the "CHR Notes") and to deposit such CHR
Notes into the Receipts on Corporate Securities Trust, Series CHR 1998-1 (the
"CHR Trust") formed pursuant to the CHR Trust Agreement, in exchange for
Receipts on Corporate Securities Trust, Series CHR 1998-1 Certificates (the "CHR
Trust Certificates"), which CHR Trust Certificates shall evidence the entire
beneficial interest in the CHR Notes; and be it
FURTHER RESOLVED, that the Corporation be, and it hereby is, authorized to
sell such CHR Trust Certificates transferred to the Corporation by the CHR
Trust; and be it
FURTHER RESOLVED, that the Corporation be, and it hereby is, authorized to
apply the net proceeds from the sale of the CHR Trust Certificates to the
purchase of the CHR Notes and to pay issuance expenses and operating expenses of
the Corporation; and be it
FURTHER RESOLVED, that any of the Senior Officers be, and, subject to the
terms of any applicable Written Authorization Notice, any of the Authorized
Persons designated by any of them be, and each of them hereby is, authorized to
take such action and execute and cause the filing and recording of all such
documents as such Senior Officer or Authorized Person in accordance with any
applicable Written Authorization Notice may deem necessary or appropriate for
the creation of the CHR Trust created by such CHR Trust Agreement.
Registration Statement
- ----------------------
RESOLVED, when and if deemed appropriate by any of the Senior Officers or
Authorized Persons, such Senior Officer or Authorized Person in accordance with
any applicable Written Authorization Notice, is authorized, directed and
empowered, in the name of the Corporation and on behalf the CHR Trust, (i) to
cause to be prepared and to execute and file with the Securities and Exchange
Commission (the "Commission") a Registration Statement on Form S-3 or Form S-4,
or both (together, the "Registration Statement"), and any amendment or
amendments (including post-effective amendments or supplements) thereto,
together with all documents required as exhibits to the Registration Statement,
relating to one or more classes of CHR Trust Certificates (or substantially
identical securities issued in exchange therefor pursuant to a registered
exchange offer), in such form as such Senior Officer or Authorized Person in
accordance with any applicable Written Authorization Notice may approve, and
(ii) to do all such acts and things, to execute and deliver all such documents
and to make all such filings as shall be necessary or deemed appropriate by any
of them to obtain all state securities and "blue sky" permits or approvals that
shall be required or appropriate in connection with the issuance of such CHR
Trust Certificates; and be it
FURTHER RESOLVED, that the Secretary of the Corporation be, and hereby is,
appointed as agent for service to be named in the Registration Statement; and be
it
FURTHER RESOLVED, that each officer and director who may be required to
sign and execute the Registration Statement or any and all amendments thereto or
documents in connection therewith (whether in the name or on behalf of the
Corporation or the CHR Trust, or otherwise) be, and each hereby is, authorized
to execute a power of attorney appointing the persons designated therein his or
her true and lawful attorney to sign in his or her name, place and stead, in any
such capacity, the Registration Statement and any and all amendments (including
post-effective amendments) thereto, including amendments or supplements to the
prospectus contained therein and the addition or amendment of exhibits and other
documents in connection therewith, and to file the same with the Commission, and
to have full power and authority to do and perform, in the name and on behalf of
each of said officers and directors who shall have executed such power of
attorney, every act whatsoever that such attorney may deem necessary,
appropriate or desirable to be done in connection therewith as fully and to all
intents and purposes as such officers or directors might or could do in person.
Preparation of Offering Document
- --------------------------------
RESOLVED, that any of the Senior Officers be, and, subject to the terms of
any applicable Written Authorization Notice, any of the Authorized Persons
designated by any of them be, and each of them hereby is, authorized in the name
and on behalf of the Corporation, to cause to be prepared and distributed an
offering circular or prospectus, where appropriate, and any amendment or
supplements thereto (together the "Offering Document"), in connection with the
sale by the Corporation of the CHR Trust Certificates (including substantially
identical certificates issued in exchange therefor pursuant to a registered
exchange offer) and that such Offering Document and any preliminary offering
document be, and it hereby is, approved in such form as any of the Senior
Officers or Authorized Persons in accordance with any applicable Written
Authorization Notice may deem necessary or appropriate.
Fees and Expenses
- -----------------
RESOLVED, that any of the Senior Officers be, and, subject to the terms of
any applicable Written Authorization Notice, any of the Authorized Persons
designated by any of them be, and each of them hereby is, authorized, empowered
and directed, in the name and for and on behalf of the Corporation to pay all
necessary and reasonable fees incurred in connection with the foregoing,
including, but not limited to, all printing expenses, fees and expenses of the
Corporation's legal counsel, and the Trustee, and to make all payments as any of
the Senior Officers or Authorized Persons in accordance with any applicable
Written Authorization Notice shall determine to be necessary or appropriate,
such payment to be conclusive evidence of their determination.
Miscellaneous
- -------------
RESOLVED, that any of the Senior Officers be, and, subject to the terms of
any applicable Written Authorization Notice, any of the Authorized Persons
designated by any of them be, and each of them hereby is, authorized and
empowered, in the name and on behalf of the Corporation, to take or cause to be
taken any and all such action to execute and deliver any and all such
agreements, certificates, instructions, notices, requests, instruments and other
documents and to do any and all such other things as any of such Senior Officer
or Authorized Person in accordance with any applicable Written Authorization
Notice shall determine to be necessary or appropriate to effectuate the
foregoing resolutions and to carry out the purposes thereof and that any such
actions be, and hereby are, ratified and confirmed.
Exhibit 4.1
[Form of Amortizing Class Certificate]
NUMBER Certificate Principal Balance $____________
R-___ Aggregate Certificate Principal Balance $____________
CUSIP NO. _____________
SEE REVERSE FOR CERTAIN DEFINITIONS
THE HOLDER OF THIS CERTIFICATE SHALL HAVE NO RIGHT TO PRINCIPAL
PAYMENTS IN RESPECT OF THE TERM ASSETS EXCEPT IN THE EVENT OF AN OPTIONAL
REDEMPTION OR A SHORTENED MATURITY REDEMPTION (AS SUCH TERMS ARE DEFINED IN THE
TRUST AGREEMENT REFERRED TO HEREIN) ON OR PRIOR TO AUGUST 1, 2018. THE
REGISTERED HOLDER HEREOF, BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL LOOK
SOLELY TO THE TRUST PROPERTY (TO THE EXTENT OF ITS RIGHTS THEREIN) FOR
DISTRIBUTIONS HEREUNDER.
THIS CERTIFICATE REPRESENTS A FRACTIONAL UNDIVIDED INTEREST IN THE
TRUST AND DOES NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN, AND IS NOT
GUARANTEED BY THE DEPOSITOR OR THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE TRUST ASSETS ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR ANY OTHER PERSON.
UNLESS THE CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY TRUST COMPANY, A NEW YORK CORPORATION, TO THE ISSUER OF ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME IF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT IS MADE TO CEDE
& CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE TRUST HAS NOT BEEN REGISTERED AS AN INVESTMENT COMPANY UNDER THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED. NO SALE OR OTHER TRANSFER OF THIS
CERTIFICATE SHALL BE PERMITTED WHICH WOULD REQUIRE REGISTRATION OF THE TRUST
THEREUNDER.
THE AMORTIZING CLASS CERTIFICATES MAY ONLY BE HELD BY PERSONS WHO
CERTIFY THAT THE BENEFICIAL OWNER THEREOF IS EITHER A U.S. PERSON OR A NON-U.S.
PERSON EXEMPT FROM WITHHOLDING UNDER U.S. FEDERAL INCOME TAX LAWS.
<PAGE>
RECEIPTS ON CORPORATE SECURITIES TRUST, SERIES CHR 1998-1
RECEIPTS ON CORPORATE SECURITIES
SERIES CHR 1998-1
Amortizing Class Certificates evidencing a fractional undivided
beneficial ownership interest in the Trust, as defined below, the property of
which consists of $57,830,000 aggregate principal amount of 7.40% Debentures due
August 1, 2097 (the "Term Assets") issued by Chrysler Corporation, a Delaware
corporation ("CHR"), and deposited in the Trust by the Depositor, as defined
below. The Term Assets were purchased by the Trust from Prudential Securities
Structured Assets, Inc. (the "Depositor") in exchange for the transfer of the
Certificates to the Depositor by the Trust.
THIS CERTIFIES THAT_________________________________________________
is the registered owner of a nonassessable, fully-paid, fractional undivided
interest in Receipts on Corporate Securities Trust, Series CHR 1998-1 formed by
the Depositor. Under the Trust Agreement, except upon or after the occurrence of
an Optional Redemption, a Shortened Maturity Redemption or an In-Kind
Distribution, there will be distributed to the Holders of the Amortizing Class
Certificates an amount equal to the Fixed Payment plus any Excess Interest on
the first day of each February and August, or, if any such day is not a Business
Day and a Term Assets Scheduled Payment Date, then the Business Day on or
immediately following the Term Assets Scheduled Payment Date, commencing August
1, 1998 through and including August 1, 2018; provided that payment on each
Scheduled Distribution Date shall be subject to receipt of the corresponding
payment of interest or principal, as applicable, on the Term Assets. Each Fixed
Payment shall be allocated first to interest accrued during the related Interest
Accrual Period at a rate equal to the Amortizing Class Yield on the then
outstanding Aggregate Certificate Principal Balance of the Amortizing Class
Certificates, with the balance of such Fixed Payment allocated to the repayment
of principal in accordance with the amortization schedule attached to the Series
Supplement as Schedule 2 (the "Amortization Schedule"). Any Excess Interest
shall be allocated as additional interest and shall not be taken into account in
the allocation of the Fixed Payment. In the event of a Partial Optional
Redemption or an exchange of Certificates for Term Assets pursuant to Section 8
of the Series Supplement referred to below, the Fixed Payment to the holders of
the Amortizing Class Certificates and the Certificate Principal Balance of this
Certificate will be reduced in accordance with the Trust Agreement. In the event
of an Optional Redemption or a Shortened Maturity Redemption, the Trustee will
distribute the payments received on the Term Assets on the Optional Redemption
Date or the Shortened Maturity Date, as applicable, to the holders of the
Amortizing Class Certificates, if still outstanding, and holders of the Residual
Class Certificates, respectively, in the same ratio as (i) the present value of
all originally scheduled future payments on the Amortizing Class Certificates
bears to (ii) the present value of all originally scheduled future payments on
the Term Assets after August 1, 2018, discounted semiannually in each case at a
rate of 7.40% per annum (such ratio being the "Distribution Ratio") to the
Optional Redemption Date or Shortened Maturity Date, as applicable. Such amounts
will be calculated by the Calculation Agent. If no Amortizing Class Certificates
are still outstanding, all payments will be made to the Holders of the Residual
Class Certificates. In the event of an In-Kind Distribution pursuant to Section
3.6 of the Base Trust Agreement, the Trustee shall make such In-Kind
Distribution to the Holders of the Amortizing Class Certificates, if still
outstanding, and the Holders of the Residual Class Certificates, respectively,
on the basis of the Distribution Ratio to the date on which the Payment Default,
Change in Reporting Status, or Acceleration of the Term Assets occurred. Such
ratio shall be calculated by the Calculation Agent. If no Amortizing Class
Certificates are still outstanding, all such distributions will be made to the
Holders of the Residual Class Certificates.
The Trust was created pursuant to a Base Trust Agreement dated as of
August 28, 1997, as amended by Base Amendment No. 1 dated as of February 27,
1998 (together, the "Base Trust Agreement"), between the Depositor and The Bank
of New York, a New York banking corporation, not in its individual capacity but
solely as Trustee (the "Trustee"), as supplemented by the Series CHR 1998-1
Supplement dated as of June 9, 1998 (the "Series Supplement" and, together with
the Base Trust Agreement, the "Trust Agreement"), between the Depositor and the
Trustee. This Certificate does not purport to summarize the Trust Agreement and
reference is hereby made to the Trust Agreement for information with respect to
the interests, rights, benefits, obligations, proceeds and duties evidenced
hereby and the rights, duties and obligations of the Trustee with respect
hereto. A copy of the Trust Agreement may be obtained from the Trustee by
written request sent to the Corporate Trust Office. Capitalized terms used but
not defined herein have the meanings assigned to them in the Trust Agreement.
This Certificate is one of the duly authorized Certificates designated
as "Receipts on Corporate Securities, Series CHR 1998-1, Amortizing Class
Certificates" (herein called the "Amortizing Class Certificates"). The Trust is
also issuing certificates designated as "Receipts on Corporate Securities,
Series CHR 1998-1, Residual Class Certificates" (hereinafter called the
"Residual Class Certificates" and together with the Amortizing Class
Certificates, the "Certificates") pursuant to the Trust Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Trust Agreement the Holder of this
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound. The property of the Trust consists of the Term Assets and all payments
on or collections in respect of the Term Assets accrued on or after the Closing
Date, all as more fully specified in the Trust Agreement.
Subject to the terms and conditions of the Trust Agreement (including
the availability of funds for distribution) and until the obligation created by
the Trust Agreement shall have terminated in accordance therewith, distributions
will be made on each Distribution Date to the Person in whose name this
Certificate is registered on the applicable Record Date. The Record Date
applicable to any Distribution Date is the 15th day immediately preceding such
Distribution Date.
Distributions made on this Certificate will be made as provided in the
Trust Agreement by the Trustee by wire transfer or credit to the appropriate
account of the Holder in immediately available funds, without the presentation
or surrender of this Certificate or the making of any notation hereon. Except as
otherwise provided in the Trust Agreement and notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency maintained for that
purpose by the Trustee in the Borough of Manhattan, the City of New York.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this Certificate shall not
entitle the holder hereof to any benefit under the Trust Agreement or be valid
for any purpose.
It is the intent of the Depositor and the Certificateholders that, for
purposes of federal income, state and local income and franchise taxes and any
other taxes imposed upon, measured by or based upon gross or net income, the
Trust shall be treated as a grantor trust or, failing that, as a partnership
that is not treated as an association (or publicly traded partnership) taxable
as a corporation, and the Trust Agreement shall be interpreted accordingly.
Except as otherwise required by appropriate taxing authorities, the Depositor
and the other Certificateholders by acceptance of a Certificate, agree to treat,
the Certificates for such tax purposes as interests in such grantor trust.
<PAGE>
THIS CERTIFICATE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICT-OF-LAW
PROVISIONS.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed as of the date set forth below.
THE BANK OF NEW YORK,
a New York banking corporation
By:________________________________
Authorized Signatory
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Amortizing Class Certificates described in the
Trust Agreement referred to herein.
THE BANK OF NEW YORK,
a New York banking corporation, not in its
individual capacity but solely as Trustee,
By:________________________________
Authorized Signatory
<PAGE>
(REVERSE OF TRUST CERTIFICATE)
The Certificates are limited in right of distribution to certain
payments and collections respecting the Trust Agreement, all as more
specifically set forth herein and in the Trust Agreement. The registered Holder
hereof, by its acceptance hereof, agrees that it will look solely to the Term
Assets (to the extent of its rights therein) for distributions hereunder.
Subject to the next sentence and to certain exceptions provided in the
Trust Agreement, the Trust Agreement permits the amendment thereof and the
modification of the rights and obligations of the Depositor and the Trustee and
the rights of the Certificateholders under the Trust Agreement at any time by
the Depositor and the Trustee with the unanimous consent of the Holders of each
Outstanding Class of Certificates. Any such consent by the Holder of this
Certificate (or any predecessor Certificate) shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange hereof or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Trust Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
The Certificates are issuable in fully registered form only in minimum
Certificate Principal Balances of $250,000 and integral multiples of $1.00 in
excess thereof. As provided in the Trust Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same principal amount, Class, original issue date and
maturity, in authorized denominations as requested by the Holder surrendering
the same.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies of the Certificate Registrar maintained by
the Trustee in the Borough of Manhattan, The City of New York, duly endorsed by,
or accompanied by an assignment in the form below and by such other documents as
required by the Trust Agreement signed by, the Holder hereof, and thereupon one
or more new Certificates of the same Class in authorized denominations
evidencing the same principal amount will be issued to the designated transferee
or transferees. The Certificate Registrar appointed under the Trust Agreement is
The Bank of New York.
No service charge will be made for any registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
The Depositor and the Trustee and any agent of the Depositor or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Trustee, nor any
such agent shall be affected by any notice to the contrary.
The Trust and the obligations of the Depositor and the Trustee created
by the Trust Agreement with respect to the Certificates will terminate upon (i)
receipt and distribution to the holders of Certificates entitled thereto of all
amounts owed under the Trust Agreement in respect of the Term Assets (subject to
Section 9(c) of the Series Supplement), (ii) the occurrence of any Shortened
Maturity Redemption, (iii) the occurrence of any Optional Redemption of all the
Term Assets then held by the Trust, (iv) the occurrence of an In-Kind
Distribution of all Term Assets then held by the Trust or (v) the delivery of
the last remaining Term Assets then held by the Trust to Certificateholders in
exchange for Certificates pursuant to Section 8 of the Series Supplement.
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR TAXPAYER IDENTIFICATION OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
________________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
________________________________________________________________________________
the within Trust Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
________________________________________________________________________________
Attorney to transfer said Trust Certificate on the books of the Certificate
Registrar, with full power of substitution in the premises.
Dated: ______________________
*
---------------------------
Signature Guaranteed;
*
---------------------------
* NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Trust Certificate in every particular,
without alteration, enlargement or any change whatever. Such signature must be
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Certificate Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Certificate Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
<PAGE>
TO BE COMPLETED BY PURCHASER:
The undersigned represents and warrants that the beneficial owner
hereof is either (i) a United States person, or (ii) a non-United States person
who is exempt from withholding under U.S. federal income tax laws and has
completed, accurately and in a manner reasonably satisfactory to the Trustee or
its agent, an appropriate statement (generally on IRS Form W-8), signed under
penalties of perjury, identifying the beneficial owner and stating that the
beneficial owner is not a United States person (or, after December 31, 1999, has
satisfied applicable documentary evidence requirements for establishing that it
is not a United States person) and delivered such statement (or documentary
evidence) to the Trustee or its agent.
Dated __________ _________________________________
(Signature)
Exhibit 4.5
================================================================================
SERIES CHR 1998-1 SUPPLEMENT
between
PRUDENTIAL SECURITIES STRUCTURED ASSETS, INC.
as Depositor
and
THE BANK OF NEW YORK
as Trustee
Receipts on Corporate Securities Trust, Series CHR 1998-1
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT..................................................... 1
SECTION 1. Certain Defined Terms...................................... 1
SECTION 2. Creation and Declaration of Trust; Grant of Term
Assets; Acceptance by Trustee.............................. 5
SECTION 3. Designation................................................ 5
SECTION 4. Form and Date of the Certificates.......................... 6
SECTION 5. Aggregate Certificate Principal Balance.................... 6
SECTION 6. Currency of the Certificates............................... 6
SECTION 7. Certain Provisions Regarding Transfer and Exchange......... 6
SECTION 8. Certificateholder Exchange Right........................... 8
SECTION 9. Distributions.............................................. 8
SECTION 10. Termination of Trust....................................... 10
SECTION 11. Limitation of Powers and Duties............................ 11
SECTION 12. Certain Provisions of Base Trust Agreement Not
Applicable................................................. 11
SECTION 13. Modification and Amendment of Base Trust Agreement......... 11
SECTION 14. No Investment of Amounts Received on Term Assets........... 12
SECTION 15. Rule 144A Information...................................... 12
SECTION 16. Notices.................................................... 12
SECTION 17. Access to Certain Documentation............................ 12
SECTION 18. Ratification of Agreement.................................. 12
SECTION 19. Counterparts............................................... 12
SECTION 20. Governing Law.............................................. 13
SECTION 21. Covenant of Depositor...................................... 13
EXHIBIT A -- Form of Amortizing Class Certificate
EXHIBIT B -- Form of Residual Class Certificate
SCHEDULE 1 -- Identification of Term Assets
SCHEDULE 2 -- Amortization Schedule
<PAGE>
SERIES CHR 1998-1 SUPPLEMENT dated as of June 9, 1998 (this
"Series Supplement") between Prudential Securities Structured Assets, Inc., a
Delaware corporation, as depositor (the "Depositor"),
and The Bank of New York, a New York banking corporation,
as trustee (the "Trustee").
PRELIMINARY STATEMENT
Pursuant to the Base Trust Agreement dated as of August 28, 1997, as
amended by Base Amendment No.1 dated as of February 27, 1998 (together, the
"Base Trust Agreement" and, as amended and supplemented pursuant to this Series
Supplement, the "Agreement"), among the Depositor and the Trustee, such parties
may at any time and from time to time enter into a series supplement
supplemental to the Base Trust Agreement for the purpose of creating a trust.
Section 5.13 of the Base Trust Agreement provides that the Depositor may at any
time and from time to time direct the Trustee to authenticate and deliver, on
behalf of any such trust, a new series of trust certificates. Each trust
certificate of such new series of trust certificates will represent a fractional
undivided beneficial interest in such trust. Certain terms and conditions
applicable to each such series are to be set forth in the related series
supplement to the Agreement.
Pursuant to this Series Supplement, the Depositor and the Trustee
shall create and establish a new trust to be known as Receipts on Corporate
Securities Trust, Series CHR 1998-1 (the "Trust"), and a new Series of trust
certificates to be issued thereby, which certificates shall be known as the
Receipts on Corporate Securities, Series CHR 1998-1 (the "Certificates"), and
the Depositor and the Trustee shall herein specify certain terms and conditions
in respect thereof.
The Certificates shall be issued in two Classes consisting of (a) the
Amortizing Class Certificates (the "Amortizing Class Certificates") and (b) the
Residual Class Certificates (the "Residual Class Certificates"), subject to
Section 5.16 of the Base Trust Agreement.
On behalf of and pursuant to the authorizing resolutions of the Board
of Directors of the Depositor, an authorized officer of the Depositor has
authorized the execution, authentication and delivery of the Certificates, and
has authorized the Base Trust Agreement and this Series Supplement in accordance
with the terms of Section 5.13 of the Base Trust Agreement.
1. Certain Defined Terms. (a) All terms used in this Series Supplement that are
---------------------
defined in the Base Trust Agreement, either directly or by reference therein,
have the meanings assigned to such terms therein, except to the extent such
terms are defined or modified in this Series Supplement or the context requires
otherwise. The Base Trust Agreement also contains rules as to usage which shall
be applicable hereto.
(b) Pursuant to Article I of the Base Trust Agreement, the meaning of
certain defined terms used in the Base Trust Agreement shall, when applied to
the trust certificates of a particular Series, be as defined in Article I but
with such additional provisions and modifications as are specified in the
related series supplement. With respect to the Certificates, the following
definitions shall apply:
"Acceleration of Term Assets": The acceleration of the maturity of the
Term Assets following the occurrence of any default (other than a Payment
Default) with respect to the Term Assets under the Indenture, and the Trustee
receives notice of such acceleration, notwithstanding any subsequent rescission
and annulment of such acceleration by the requisite holders of the entire series
of Term Assets.
"Aggregate Amortized Amount": The aggregate Amortized Amount of all
the Amortizing Class Certificates.
"Aggregate Certificate Principal Balance": For the Residual Class
Certificates as of any date of determination, the aggregate principal balance of
the Term Assets in the Trust as of such date of determination. For the
Amortizing Class Certificates as of any date of determination, the Aggregate
Amortized Amount as of such date of determination.
"Unamortized Amount": For any Amortizing Class Certificate of $1,000
denomination, initially $1,000. On each Scheduled Distribution Date on which the
Amortizing Class Certificates are outstanding, the Unamortized Amount will be
reduced by the positive difference between (i) the Fixed Payment made on such
Scheduled Distribution Date and (ii) interest accrued on the Certificate
Principal Balance at the Amortizing Class Yield during the related Interest
Accrual Period. On any Optional Redemption Date relating to a Partial Optional
Redemption, the Unamortized Amount shall be recalculated based on the remaining
Term Assets after such partial redemption and no effect shall be given to the
allocation to principal provided for in Section 9(d) hereof.
"Amortizing Class Certificates": A Class of securities issued pursuant
to this Agreement representing an undivided interest in the distributions
described in Section 9 hereto payable to such Class.
"Amortizing Class Final Distribution Date": August 1, 2018.
"Amortizing Class Yield": 6.5% per annum.
"Available Funds": As of any Distribution Date, the aggregate amount
received on or with respect to the Term Assets on or with respect to such
Distribution Date.
"Calculation Agent": The Depositor.
"Certificates": Receipts on Corporate Securities, Series CHR 1998-1.
"Certificateholder" or "Holder": With respect to any Amortizing Class
Certificate or Residual Class Certificate, the Holder thereof.
"Certificate Principal Balance": For any Residual Class Certificate, a
pro rata portion of the principal amount of the then outstanding Term Assets.
For any Amortizing Class Certificate, the Unamortized Amount.
"Change in Reporting Status": Any circumstance pursuant to which the
issuer of the Term Assets is no longer subject to the informational requirements
of the Exchange Act.
"CHR": Chrysler Corporation, a Delaware corporation, or any successor
as provided in the Indenture.
"Class": The class of Certificates constituted by the Amortizing Class
Certificates or the Residual Class Certificates.
"Closing Date": June 9, 1998.
"Corporate Trust Office": The Bank of New York, 101 Barclay Street
(12E), New York, N.Y. 10286, Attention: Corporate Trust or such other corporate
trust office as the Trustee shall designate in writing to the Depositor and the
Certificateholders.
"Distribution Date": Any Scheduled Distribution Date, In-Kind
Distribution Date, Shortened Maturity Date, or Optional Redemption Date.
"Distribution Ratio": With respect to a specified distribution to be
made hereunder on any Distribution Date (other than a Scheduled Distribution
Date), the ratio in which such distribution will be made to the holders of the
Amortizing Class Certificates and the Residual Class Certificates, respectively,
being the same ratio as (i) the present value of all originally scheduled future
payments on the Amortizing Class Certificates bears to (ii) the present value of
all originally scheduled future payments on the Term Assets after August 1,
2018, in each case discounted semiannually at a rate of 7.40% per annum to the
Distribution Date (or, in the case of Section 9(h), the date specified therein).
"Excess Interest": Penalties, interest on overdue interest or other
amounts paid to holders of the Term Assets because of late or defaulted payments
on the Term Assets.
"Exchange Certificate": Any Certificate of a Class to be issued
pursuant to this Agreement in the Exchange Offer in exchange for an Initial
Certificate of such Class at the request of the holder of such Initial
Certificate.
"Exchange Offer": The offer registered by the Depositor and the Trust
pursuant to the Exchange Offer Registration Statement in which the Trust offers
to holders of the Initial Certificates of a Class the opportunity to exchange
such outstanding Initial Certificates for Exchange Certificates of the same
Class in an aggregate principal amount equal to the Aggregate Certificate
Principal Balance of the Initial Certificates tendered in such offer by such
Holders.
"Exchange Offer Registration Statement": The registration statement
under the Securities Act relating to the Exchange Offer, including the related
prospectus, prepared and signed by the Depositor on behalf of the Trust and in
no event by the Trustee.
"Fixed Payment": Each semiannual installment of interest and Excess
Interest, if any, payable on the Term Assets through and including August 1,
2018.
"Indenture": The indenture dated as of March 1, 1985 between CHR and
Manufacturers Hanover Trust Company, which has been succeeded by State Street
Bank and Trust Company, as trustee, as amended from time to time.
"Initial Certificate": Any Amortizing Class Certificate or Residual
Class Certificate to be originally issued, authenticated and delivered pursuant
to this Agreement on the Closing Date.
"Interest Accrual Period": With respect to any Scheduled Distribution
Date, the period from and including the immediately preceding Scheduled
Distribution Date (or in the case of the first Interest Accrual Period, from and
including February 1, 1998) to but excluding the then current Scheduled
Distribution Date.
"Interest Collections": With respect to any Distribution Date, all
payments received by the Trustee from CHR with respect to the Term Assets
immediately prior to such Distribution Date, in respect of (i) interest on the
Term Assets and (ii) any Excess Interest.
"Optional Redemption": A redemption of the Term Assets, as a whole or
in part from time to time, at the option of CHR pursuant to the Indenture, other
than a Shortened Maturity Redemption.
"Optional Redemption Date": The date on which an Optional Redemption
occurs.
"Partial Optional Redemption": An Optional Redemption relating to only
a portion of the Term Assets.
"Payment Default": A default in any payment of the principal of,
premium, if any, or interest on the Term Assets when the same becomes due and
payable, and the expiration of any applicable grace period for the making of
such payment.
"Place of Distribution": New York, New York.
"Principal Collections": All principal payments received by the
Trustee on the Term Assets, including the principal portion of the redemption
price and the premium, if any, paid in the event of a Shortened Maturity
Redemption or an Optional Redemption.
"Private Placement Legend": As defined in Section 4(d) hereof.
"Rating Agency": Initially none. At any time after the Closing Date,
the Depositor may designate one or more credit rating agencies as a "Rating
Agency" for purposes of this Agreement by Depositor Order, acknowledged by the
Trustee. Thereafter, references to "the Rating Agency" in the Agreement shall be
deemed to be each such credit rating agency.
"Record Date": With respect to any Distribution Date, the 15th day
immediately preceding such Distribution Date.
"Registration Rights Agreement": A registration rights agreement
between the Depositor and Prudential Securities Incorporated dated June 9, 1998
relating to the Exchange Offer.
"Residual Class Certificates": A Class of securities issued pursuant
to this Agreement representing an undivided interest in the distributions
described in Section 9 hereof payable to such Class.
"Scheduled Distribution Date": The first day of each February and
August, or, if any such day is not a Business Day and a Term Assets Scheduled
Payment Date, then the Business Day on or immediately following the Term Assets
Scheduled Payment Date, commencing August 1, 1998, through and including August
1, 2097; provided, however, that payment on each Scheduled Distribution Date
shall be subject to receipt of the corresponding payment of interest or
principal, as applicable, on the Term Assets. In the case of the Amortizing
Class Certificates, commencing on August 1, 1998 and ending with the Scheduled
Final Distribution Date for the Amortizing Class Certificateholders. In the case
of the Residual Class Certificates, commencing February 1, 2019 and ending with
the Scheduled Final Distribution Date for the Residual Class Certificateholders.
"Scheduled Final Distribution Date":
Amortizing Class Certificates - August 1, 2018.
Residual Class Certificates - August 1, 2097.
"Shortened Maturity Date": A maturity date for the Term Assets on or
before August 1, 2097, designated by CHR, as a result of a Tax Event.
"Shortened Maturity Redemption": A redemption of the Certificates in
whole, but not in part, as a result of the Shortened Maturity Date occurring on
or prior to August 1, 2097.
"Specified Currency": United States Dollars.
"Tax Event": Means that CHR shall have received an opinion of
nationally recognized independent tax counsel to the effect that, as a result of
(a) any amendment to, clarification of, or change (including any announced
prospective amendment, clarification or change) in any law, or any regulation
thereunder, of the United States, (b) any judicial decision, official
administrative pronouncement, ruling, regulatory procedure, notice or
announcement, including any notice or announcement of intent to adopt or
promulgate any ruling, regulatory procedure or regulation (any of the foregoing,
an "Administrative or Judicial Action"), or (c) any amendment to, clarification
of or change in any official position with respect to, or any interpretation of,
an Administrative or Judicial Action or a law or regulation of the United States
that differs from the theretofore generally accepted position or interpretation,
in each case, occurring on or after July 15, 1997, there is more than an
insubstantial increase in the risk that interest paid by CHR on the Term Assets
is not, or will not be, deductible, in whole or in part, by CHR for United
States federal income tax purposes.
"Term Assets": The $57,830,000 aggregate principal amount of 7.40%
Debentures due August 1, 2097 issued by CHR, deposited in the Trust by the
Depositor and further identified on Schedule 1 hereto.
"Term Assets Scheduled Payment Date": The first day of each February
and August, commencing on February 1, 1998; provided, however, that if any Term
Assets Scheduled Payment Date would otherwise fall on a day that is not a
Business Day (as defined in the Indenture), such Term Assets Scheduled Payment
Date will be the next following day that is a Business Day (as so defined).
"Term Assets Prospectus": The prospectus of CHR, dated July 15, 1997,
with respect to the Term Assets.
"Term Assets Trustee": The trustee under the Indenture.
"Trust": Receipts on Corporate Securities Trust, Series CHR 1998-1.
"Trustee": The Bank of New York, a New York banking corporation.
"Trust Termination Event": (a) receipt and distribution to the holders
of Certificates entitled thereto of all amounts owed under the Trust Agreement
in respect of the Term Assets (subject to Section 9(c) hereof), (b) the
occurrence of any Shortened Maturity Redemption, (c) the occurrence of any
Optional Redemption of all the Term Assets then held by the Trust, (d) the
occurrence of an In-Kind Distribution of all Term Assets then held by the Trust
or (e) the delivery of the last remaining Term Assets then held by the Trust, to
Certificateholders in exchange for Certificates pursuant to Section 8.
"Voting Rights": Voting Rights will be allocated between the
Amortizing Class Certificateholders, on the one hand, and the Residual Class
Certificateholders, on the other, at any date of determination in the same ratio
as (i) the present value of all originally scheduled future payments on the
Amortizing Class Certificates bears to (ii) the present value of all originally
scheduled future payments on the Term Assets after August 1, 2018, in each case
discounted semiannually at a rate of 7.40% per annum to the date of
determination. Such ratio will be calculated by the Calculation Agent. Subject
to the foregoing, "Voting Rights" shall mean (a) with respect to the Amortizing
Class Certificates, the voting rights allotted to such Class, allocated among
all Holders of Amortizing Class Certificates in proportion to the respective
Amortized Amount held by such Holders on any date of determination, and (b) with
respect to the Residual Class Certificates, the voting rights allotted to such
Class, allocated among all Holders of Residual Class Certificates in proportion
to the respective Certificate Principal Balances held by such Holders on any
date of determination. In the case of any tender offer by CHR, see Section 11(c)
hereof.
2. Creation and Declaration of Trust; Grant of Term Assets; Acceptance by
-----------------------------------------------------------------------------
Trustee. (a) The Depositor, concurrently with the execution and delivery hereof
- -------
and pursuant to Section 2.1 of the Agreement, has delivered or caused to be
delivered to the Trustee the Term Assets in exchange for the delivery to, or at
the direction of the Depositor, of all of the Certificates, representing the
entire beneficial interest in all of the assets of the Trust.
(b) The Trustee hereby (i) acknowledges such deposit, pursuant to
subsection (a) above, and receipt by it of the Term Assets, (ii) accepts the
trusts created hereunder in accordance with the provisions hereof and of the
Agreement but subject to the Trustee's obligation, as and when the same may
arise, to make any payment or other distribution of the assets of the Trust as
may be required pursuant to this Series Supplement, the Agreement and the
Certificates, and (iii) agrees to perform the duties herein or therein required
and any failure to receive reimbursement of expenses and disbursements under
Section 7.5 of the Agreement shall not release the Trustee from its duties
herein or therein.
3. Designation. There is hereby created a Series of trust certificates to be
-----------
issued pursuant to the Agreement and this Series Supplement to be known as the
"Receipts on Corporate Securities, Series CHR 1998-1." The Certificates shall be
issued in two Classes, consisting of the Amortizing Class Certificates and the
Residual Class Certificates.
4. Form and Date of the Certificates. (a) The Certificates that are executed,
------------------------------------
authenticated and delivered by the Trustee to the Depositor upon Depositor Order
on the Closing Date shall be dated the Closing Date. All other Certificates that
are authenticated after the Closing Date for any other purpose under the
Agreement shall be dated the date of their authentication. The Certificates and
the certificate of authentication of the Trustee thereon shall be substantially
in the form of Exhibit A or Exhibit B hereto, as specified below, which are
hereby incorporated in and expressly made a part of this Agreement. The Exchange
Certificates and the certificate of authentication of the Trustee thereon shall
be substantially in the same form with those changes as are noted in Exhibits A
and B.
(b) The Amortizing Class Certificates will be represented by one or more
permanent Certificates in definitive, fully registered form in minimum
denominations of $250,000 in Certificate Principal Balance and integral
multiples of $1.00 in excess thereof. The Residual Class Certificates will be
represented by one or more permanent Certificates in definitive, fully
registered form in minimum denominations of $500,000 in Certificate Principal
Balance and integral multiples of $1.00 in excess thereof.
(c) In the event Initial Certificates are tendered in an Exchange Offer,
such Initial Certificates shall be exchanged for one or more Exchange
Certificates of the same Class in definitive, fully registered form in the same
denominations set forth in Section 4(b).
(d) The Certificates shall bear the following legends.
Each Initial Residual Certificate and each Initial Amortizing Class
Certificate shall bear the following legend (the "Private Placement Legend") on
the face thereof:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THESE SECURITIES
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER JURISDICTION.
Each Certificate shall bear the following legend; provided that the
following legend may be removed from Exchange Certificates of a Class upon such
time, if any, as the Depositor has furnished a Depositor Order pursuant to
Section 7(c) hereof:
THE TRUST HAS NOT BEEN REGISTERED AS AN INVESTMENT COMPANY UNDER THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED. NO SALE OR OTHER TRANSFER OF THIS
CERTIFICATE SHALL BE PERMITTED WHICH WOULD REQUIRE REGISTRATION OF THE TRUST
THEREUNDER.
5. Aggregate Certificate Principal Balance. The maximum Aggregate Certificate
------------------------------------------
Principal Balance of the Amortizing Class Certificates that may be executed,
authenticated and delivered under the Agreement and this Series Supplement is
$48,096,190. The maximum Aggregate Certificate Principal Balance of the Residual
Class Certificates that may be authenticated and delivered under the Agreement
and this Series Supplement is $57,830,000. In each case such maximum amounts
shall be calculated without regard to Certificates authenticated and delivered
upon registration of transfer of, or in exchange for, or in lieu of, other
Certificates pursuant to Sections 5.3, 5.4, 5.5 or 5.16 of the Agreement. The
Certificates are issuable in the minimum denominations specified in Section 4.
6. Currency of the Certificates. All distributions on the Certificates will be
------------------------------
made in the Specified Currency.
7. Certain Provisions Regarding Transfer and Exchange. (a) In the event that the
--------------------------------------------------
Depositor delivers to the Trustee a copy of an Officers' Certificate certifying
that an Exchange Offer Registration Statement has been declared effective by the
Commission and that the Trust has offered Exchange Certificates of a Class to
the Holders of the related Class of Initial Certificates in accordance with the
Exchange Offer, the Trustee shall exchange, upon request of any such Holder,
such Holder's Initial Certificates for Exchange Certificates of the related
Class upon the terms set forth in the Exchange Offer and in accordance with
Section 4(c) hereof, provided that the Initial Certificates so surrendered for
--------
exchange are duly endorsed and accompanied by a letter of transmittal or written
instrument of transfer in form satisfactory to the Trustee, in addition to any
certifications and representations required by the provisions of the
Registration Rights Agreement, and duly executed by the Holder thereof or such
Holder's attorney who shall be duly authorized in writing to execute such
document on the behalf of such Holder.
The Trustee shall not be required (i) to issue, register the transfer
of or exchange any Certificate during the period of 15 days ending on (and
including) any Distribution Date.
(b) Upon receipt of a Depositor Request to the effect that specified
Initial Certificates of a Class (the "Registered Certificates") have been
registered under the Securities Act, if Initial Certificates of such Class are
issued upon the transfer, exchange or replacement of the Registered
Certificates, or if a request is made to remove the Private Placement Legend on
the Registered Certificates, the Trustee shall execute, authenticate and deliver
Initial Certificates of such Class that do not bear the Private Placement
Legend.
(c) In connection with each transfer of a Certificate, the transferee will
be required to complete the certification annexed to such Certificate unless the
Depositor has furnished a Depositor Order to the effect that such transfer form
is no longer required.
(d) In connection with each transfer of a Residual Class Certificate, the
transferee will be required to deliver to the Trustee a certification upon
purchase of such Certificate to the effect that the beneficial owner thereof
(whether such registered holder or the ultimate beneficiary for whom it holds
such Certificate) is either (i) a United States person, or (ii) a non-United
States person who is exempt from withholding under U.S. federal income tax laws
and has completed, accurately and in a manner reasonably satisfactory to the
Trustee or its agent, an appropriate statement (generally on IRS Form W-8),
signed under penalties of perjury, identifying the beneficial owner and stating
that the beneficial owner is not a United States person (or, after December 31,
1999, has satisfied applicable documentary evidence requirements for
establishing that it is not a United States person) and delivered such statement
(or documentary evidence) to the Trustee or its agent.
Such transferee will be deemed to have represented and agreed with the
Trustee that so long as it is the registered holder of such Certificate, the
beneficial owner thereof will be a person described in clauses (i) or (ii) above
and, in the event of any change in the identity of the beneficial owner for whom
such registered holder is acting or any lapse of a Form W-8 (or documentary
evidence) previously delivered to the Trustee, the registered holder will
promptly deliver a new certification or a current Form W-8 (or documentary
evidence), as applicable. In the event such representation is untrue or such
current forms (or documentary evidence) are not so furnished, the Certificate
held by such registered holder will be subject to mandatory resale as described
below.
If a Responsible Officer has actual knowledge or reason to know that
the certification or deemed representation made by such registered holder is
incorrect or if such registered holder does not provide the current Form W-8 (or
documentary evidence) as described above within ten days after the prior such
Form (or documentary evidence) has lapsed, then, the Trustee will furnish a
notice to such registered holder stating that (i) such registered holder must,
within 30 calendar days from the date of such notice, effect the registration of
transfer of its Residual Class Certificate to a person that certifies that the
beneficial owner of the Certificate is a U.S. person or exempt from U.S.
withholding tax as described above and (ii) if such transfer does not occur by
the thirtieth day, the Holder will be deemed irrevocably to have appointed
Prudential Securities Incorporated or Prudential-Bache Securities (U.K.) Inc.
(either a "Broker") as its broker to sell such Holder's Certificate on its
behalf to a qualified purchaser at a fair market price (net of customary
brokerage commissions) within the next succeeding five Business Days. For
purposes of effectuating such sale pursuant to clause (ii) of the preceding
sentence, the Trustee is hereby irrevocably appointed the agent and
attorney-in-fact of the Holder to, and shall, (a) instruct the broker to effect
the foregoing sale, (b) receive from the broker the net proceeds from such sale
for the account of the Holder and (c) deliver to or upon the order of the broker
a new Certificate issued in exchange for the Certificate of the Holder sold by
the broker (whereupon the Holder's Certificate will be deemed to have been
surrendered and canceled and cease to be outstanding for any purpose hereunder
or entitled to any rights or benefits hereunder). The Trustee shall pay to the
Holder, within five Business Days of receipt thereof from the broker, the net
proceeds of such sale, such payment to be made in the same manner as such Holder
received its most recent payment on the Certificate. Each Holder, by its
acceptance of a Certificate, hereby consents to and agrees with the provisions
of this Section 7.
8. Certificateholder Exchange Right. Commencing August 1, 1999, any Holder of
--------------------------------
both Amortizing Class Certificates and Residual Class Certificates (or on or
after August 1, 2018, of Residual Class Certificates) may, by delivery of a
notice to the Trustee substantially in the form of the Notice of Exchange
attached to a Certificate (a "Notice of Exchange") not less than 30 and not more
than 45 days prior to any Scheduled Distribution Date, elect to exchange
Certificates of both Classes for Term Assets (or on or after August 1, 2018, of
Residual Class Certificates) on such Scheduled Distribution Date (the "Exchange
Date") in accordance with this Section. In order to exercise such right, the
Holder shall tender to the Trustee on the Exchange Date immediately succeeding
such notice (i) if the Exchange Date is prior to August 1, 2018, both (a)
Amortizing Class Certificates evidencing the percentage specified in the Notice
of Exchange (which shall not be less than 10%) of the Aggregate Certificate
Principal Balance of all Amortizing Class Certificates then outstanding and (b)
Residual Class Certificates evidencing the same percentage of the Aggregate
Certificate Principal Balance of all Residual Class Certificates then
outstanding as is represented by the Amortizing Class Certificates tendered
pursuant to clause (a) or (ii) if the Exchange Date is on or after August 1,
2018, Residual Class Certificates evidencing at least 10% of the aggregate
Certificate Principal Balance of all Residual Class Certificates then
outstanding.
Upon tender of such Certificates, duly endorsed by the Holder to the
Trustee, the Trustee shall transfer to the Holder (or its designee specified in
the Notice of Exchange) a principal amount of Term Assets comprising the same
percentage of the Term Assets then held in the Trust as the percentage of
Amortizing Class Certificates and Residual Class Certificates tendered by such
Holder on such Scheduled Distribution Date, rounded down to the nearest
authorized denomination of Term Assets. Upon such exchange, the Trustee shall
cancel the tendered Certificates, provided that if the amount of Term Assets
--------
delivered to the Holder or its designee was rounded down in accordance with the
preceding sentence, the Trustee shall issue to such Holder new Certificates of
each Class evidencing percentage interests of such Class (regardless of whether
such interests would otherwise be authorized denominations) equal to the amount
of such Class in excess of the amount accepted for such exchange.
The delivery of a Notice of Exchange pursuant to this Section shall be
irrevocable; provided, however, that if (i) the proceeds of an Optional
-------- -------
Redemption, Shortened Maturity Redemption or In-Kind Distribution are to be
distributed on the Exchange Date to which such Notice of Exchange relates or
(ii) if prior to such Exchange Date, the Trustee gives notice to Holders that
the proceeds of an Optional Redemption, Shortened Maturity Redemption or In-Kind
Distribution are scheduled to be distributed on a date subsequent to such
Exchange Date, such Notice of Exchange shall be automatically deemed canceled
and be of no further force and effect.
Any Holder tendering Certificates in exchange for Term Assets on an
Exchange Date pursuant to this Section shall be entitled to receive cash
distributions otherwise payable on such Certificates on such Exchange Date
pursuant to Section 9(a).
9. Distributions. (a) Not later than each Scheduled Distribution Date, the
-------------
Trustee shall distribute to the Holders of the Amortizing Class Certificates, to
the extent of Interest Collections constituting Available Funds, an amount equal
to the Fixed Payment plus any Excess Interest. Each Fixed Payment shall be
allocated first to interest accrued during the related Interest Accrual Period
at a rate equal to the Amortizing Class Yield on the then outstanding Aggregate
Certificate Principal Balance of the Amortizing Class Certificates, with the
balance of such Fixed Payment allocated to the repayment of principal in
accordance with the amortization schedule attached hereto as Schedule 2 (the
"Amortization Schedule"). Any Excess Interest shall be allocated as additional
interest and shall not be taken into account in the allocation of the Fixed
Payment. In the event of a Partial Optional Redemption or an exchange of
Certificates for Term Assets pursuant to Section 8, the Fixed Payment to the
holders of the Amortizing Class Certificates will be reduced, effective on the
next Scheduled Distribution Date, pro rata with the reduction of the Term
Assets, and the Trustee shall thereafter adjust the Amortization Schedule on the
basis of the new Aggregate Certificate Principal Balances following the Optional
Redemption Date.
(b) Following the Scheduled Final Distribution Date with respect to the
Amortizing Class Certificates, and not later than each Scheduled Distribution
Date, the Trustee shall distribute to the Holders of the Residual Class
Certificates, to the extent of Interest Collections constituting Available
Funds, an amount equal to the payments of interest received from CHR on account
of the Term Assets plus any Excess Interest. Any Excess Interest shall be
allocated as additional interest and shall not be taken into account in the
allocation of the payments of interest received from CHR on account of the Term
Assets. In the event of a Partial Optional Redemption or an exchange of
Certificates for Term Assets pursuant to Section 8, the payments of interest
received from CHR on account of the Term Assets made to the holders of the
Residual Class Certificates will be reduced, effective on the next Scheduled
Distribution Date, pro rata with the reduction of the Term Assets.
(c) On August 1, 2097, the Trustee shall distribute the proceeds from the
maturity of the Term Assets to the Residual Class Certificateholders; provided
that if payment of the proceeds from the maturity of the Term Assets due to the
Trust from CHR on August 1, 2097 is not made by CHR on such date, the proceeds
from the maturity of the Term Assets will not be distributed to the holders of
the Residual Class Certificates until payment of such proceeds is made by CHR or
the Trustee makes an In-Kind Distribution to Certificateholders in accordance
with this Agreement.
(d) In the event of an Optional Redemption or in the event of a vote to
accept a tender offer (as described in 11(c) below), on or prior to August 1,
2097, the Certificates will be redeemed on the Optional Redemption Date, or in
the case of a tender offer, on the date applicable thereto. Such redemption
shall be a redemption of the Certificates as a whole if the Optional Redemption
is redemption of the Term Assets as a whole, and shall be a redemption of the
Certificates in part, as described in the next subsection, if the Optional
Redemption is a Partial Optional Redemption. In such event, the Trustee will
distribute the aggregate redemption price received on the Term Assets on the
Optional Redemption Date to the holders of the Amortizing Class Certificates, if
still outstanding, and/or the Residual Class Certificates, respectively, on the
basis of the Distribution Ratio. Such ratio will be calculated by the
Calculation Agent. If no Amortizing Class Certificates are still outstanding,
all payments will be made to the Holders of the Residual Class Certificates.
(e) In the event of a Partial Optional Redemption, the distribution of the
portion of the redemption price allocable to a particular Class of Certificates
pursuant to the preceding subsection shall be made on a pro rata basis among all
Certificateholders of such Class. Amounts so allocated to the Amortizing Class
Certificates, if still outstanding, shall be allocated first to interest accrued
since the start of the most recent Interest Accrual Period at a rate equal to
the Amortizing Class Yield on the then outstanding Certificate Principal Balance
of the Amortizing Class Certificates, with the balance of such distribution
allocated to the repayment of principal. At the close of business on the
applicable Optional Redemption Date, the respective Certificate Principal
Balances of the Certificates shall be reduced in accordance with the definition
of the term "Certificate Principal Balance."
(f) In the event of a Shortened Maturity Redemption on or prior to August
1, 2097, the Certificates shall be redeemed as a whole on the Shortened Maturity
Date. In such event, the Trustee will distribute the aggregate redemption price
received on the Term Assets on the Shortened Maturity Date to the holders of the
Amortizing Class Certificates, if still outstanding, and/or the Residual Class
Certificates, respectively, on the basis of the Distribution Ratio. Such ratio
will be calculated by the Calculation Agent. If no Amortizing Class Certificates
are still outstanding, all payments will be made to the Holders of the Residual
Class Certificates.
(g) Upon a Payment Default, a Change in Reporting Status or an Acceleration
of the Term Assets under the Indenture on or before August 1, 2097, the Trustee
will make an In-Kind Distribution of the remaining Term Assets, pursuant to
Section 3.6 of the Agreement, to the holders of the Amortizing Class
Certificates, if still outstanding, and/or the Residual Class Certificates. The
Trustee will distribute the Term Assets and any proceeds from liquidation
thereof made pursuant to Section 3.6(b) to the holders of the Amortizing Class
Certificates, if still outstanding, and/or Residual Class Certificates,
respectively, on the basis of the Distribution Ratio as of the date of such
Payment Default or Acceleration. Such ratio will be calculated by the
Calculation Agent. If no Amortizing Class Certificates are still outstanding,
all distributions will be made to the Holders of the Residual Class
Certificates.
(h) Distributions of any Purchase Price pursuant to Section 2.5 of the
Agreement shall be distributed in the same ratio set forth in subsection (e)
above discounted to the date on which the Purchase Price is distributed. Such
distribution shall be made no later than fifteen days after receipt of the
Purchase Price.
(i) Distributions to the Certificateholders on each Distribution Date will
be made to the Certificateholders of record on the related Record Date of the
Amortizing Class Certificates and Residual Class Certificates, as applicable.
(j) In the event a payment with respect to the Term Assets is made to the
Trustee after the Term Assets Payment Date on which such payment was due, the
Trustee will distribute any such amounts received on the first New York Business
Day thereafter as if such funds had constituted Available Funds on the Scheduled
Distribution Date immediately preceding such Business Day; provided, however,
that the Record Date for such distribution shall be fifteen days prior to such
Business Day and no additional amounts will accrue on the Certificates or be
owed to the holders of Amortizing Class Certificates and Residual Class
Certificates in respect of such distribution.
(k) All distributions to Certificateholders of any Class shall be allocated
pro rata among the Certificates of such Class, based on the respective
Certificate Principal Balances as of the Record Date with respect to such
Distribution Date.
(l) Notwithstanding any provision of the Agreement to the contrary, to the
extent funds are available, the Trustee will initiate payment in immediately
available funds by 10:00 A.M. (New York City time) on each Distribution Date of
all amounts payable to each Certificateholder with respect to any Certificate
held by such Certificateholder or its nominee (without the necessity for any
presentation or surrender thereof or any notation of such payment thereon) in
the manner and at the address as each Certificateholder may from time to time
direct the Trustee in writing fifteen days prior to such Distribution Date
requesting that such payment will be so made and designating the bank account to
which such payments shall be so made. The Trustee shall be entitled to rely on
the last instruction delivered by the Certificateholder pursuant to this Section
9(k) unless a new instruction is delivered 15 days prior to a Distribution Date.
(m) The rights of the Certificateholders to receive distributions in
respect of the Certificates, and all interests of the Certificateholders in such
distributions, shall be as set forth in this Series Supplement. The Trustee
shall in no way be responsible or liable to the Certificateholders nor shall any
Certificateholder in any way be responsible or liable to any other
Certificateholder in respect of amounts previously distributed on the
Certificates based on their respective Certificate Principal Balances.
(n) The Trustee shall furnish notice to Certificateholders as soon as
practicable after a Responsible Officer learns of a situation giving rise to a
distribution under subsections (d), (e) or (f) hereof.
10. Termination of Trust. (a) The Trust shall terminate upon the occurrence of
--------------------
any Trust Termination Event and the distribution to Certificateholders of all
amounts or property required to be distributed to them and the disposition of
all Term Assets held by the Trustee.
(b) Promptly after the Trustee has received a notice from the Term Assets
Trustee or CHR of an Optional Redemption other than a Partial Optional
Redemption, a Shortened Maturity Redemption, a Payment Default or an
Acceleration of the Term Assets, the Trustee shall provide notice to the
Certificateholders of the expected occurrence of a Trust Termination Event and
the termination of the Trust.
(c) The obligations of the Trustee will thereupon terminate, except for the
making of final distributions to Certificateholders and the furnishing of any
reports and other information required to be provided to Certificateholders
hereunder and under the Agreement and except as otherwise specified herein and
therein.
11. Limitation of Powers and Duties. (a) The Trustee shall administer the Trust
-------------------------------
and the Term Assets solely as specified herein and in the Agreement.
(b) The Trust is constituted solely for the purpose of acquiring and
holding the Term Assets. The Trustee is not authorized to acquire any other
investments or engage in any activities not authorized herein and, in
particular, notwithstanding anything to the contrary in the Agreement, the
Trustee is not authorized (i) to sell, assign, transfer, exchange, pledge,
set-off or otherwise dispose of any of the Term Assets, once acquired, or
interests therein, including to Certificateholders except as expressly provided
as Section 3.6 of the Base Trust Agreement, (ii) to do anything that would
materially increase the likelihood that the Trust will fail to qualify as a
grantor trust for United States federal income tax purposes, (iii) to merge or
consolidate the Trust with any other entity, (iv) to incur any debt other than
Trust expenses as described in the Agreement and any obligations under the
Certificates, or (v) to issue any securities other than the Certificates.
(c) Notwithstanding the foregoing, or anything to the contrary in the
Agreement, upon a vote of the Holders of at least 66-2/3% in interest of the
Certificates then outstanding (as reflected by the Distribution Ratio) to such
effect, the Trustee shall tender all of the Term Assets to CHR (unless otherwise
restricted pursuant to the terms of the tender offer) for repurchase in the
event of a tender offer by CHR. However, with respect to this Section 11(c), in
the event any such tender offer shall not include the payment of all accrued
interest and principal in full amount due on those Term Assets subject to such a
tender offer, then any such tender offer must satisfy the Rating Agency
Condition.
12. Certain Provisions of Base Trust Agreement Not Applicable. The provisions
----------------------------------------------------------
of Sections 2.2(b), 2.3 (except insofar as incorporated in Section 2.5), 5.16,
6.4 and 8.1(a)(i) of the Base Trust Agreement shall be inapplicable with respect
to the Certificates.
13. Modification and Amendment of Base Trust Agreement. (a) Section 1.1 of the
----------------------------------------------------
Base Trust Agreement is amended for the purposes of this Series Supplement and
the Certificates by deleting "Section 3a-7" and inserting in its place "Rule
3a-7".
(b) In addition to, and notwithstanding anything to the contrary in, the
Base Trust Agreement or this Series Supplement, the Trustee, upon receipt of a
Depositor Order, shall amend this Series Supplement to provide for the issuance
of the Initial Certificates of a Class or Exchange Certificates of a Class in
the form of a Global Security issued to a Depositary specified by the Depositor.
Such amendment shall not require the consent of any Certificateholders or
compliance with any other conditions contained in Section 9.1 of the Base Trust
Agreement.
(c) The penultimate sentence of Section 3.1(b) of the Base Trust Agreement
is amended for purposes of this Series Supplement and the Certificates as
follows: (1) by substituting a comma for the word "or" at the end of clause (i),
and (2) by inserting after the words "Term Asset" and immediately preceding the
word "except" the following:
"(iii) which would alter the currency in which any payment is required to be
made on the Term Assets, (iv) which would change the voting rights granted to
holders of the Term Assets under the Indenture, or (v) which would impair in any
material respect any rights of the Trustee or holders of the Term Assets to
enforce remedies against CHR under the Indenture,"
(d) Section 3.6(a) of the Base Trust Agreement is amended for purposes of
this Series Supplement and the Certificates by adding the following:
"(iv) there is a Change in Reporting Status;"
(e) Section 3.11(a) of the Base Trust Agreement is amended for purposes of
this Series Supplement and the Certificates by substituting both references to
"3.11" with "3.10".
(f) Section 6.5 of the Base Trust Agreement is amended for the purposes of
this Series Supplement and the Certificates by deleting "those" and inserting in
its place "the".
(g) Section 9.1(a) of the Base Trust Agreement is amended for purposes of
this Series Supplement and the Certificates (i) to add at the end of clause (v)
the phrase "and/or the TIA", and (ii) by deleting from clause (x) thereof the
phrase ", but not (vi),".
(h) Clause (ii) of the proviso to the first sentence of Section 9.1(b) of
the Base Trust Agreement is amended by deleting the existing text after the word
"without" and inserting the following in its place: "the unanimous consent of
the Holders of Certificates of such Series or Class".
(i) Section 9.9 of the Base Trust Agreement is amended for purposes of this
Series Supplement and Certificates by inserting directly after the word
"acquiesce" the following: ", join".
14. No Investment of Amounts Received on Term Assets. All amounts received on
------------------------------------------------
or with respect to the Term Assets shall be held uninvested by the Trustee
without liability for interest thereon.
15. Rule 144A Information. The Trustee will furnish, upon request, to holders
---------------------
and prospective purchasers of Initial Certificates information, which upon
request by the Trustee shall be assembled and delivered to the Trustee by the
Depositor, satisfying the requirement of subsection (d)(4)(i) of Rule 144A.
16. Notices. (a) All directions, demands and notices hereunder and under the
-------
Agreement shall be in writing and shall be deemed to have been duly given when
received if personally delivered or mailed by first class mail, postage prepaid
or by express delivery service or by certified mail, return receipt requested or
delivered in any other manner specified herein, (i) in the case of the
Depositor, to Prudential Securities Structured Assets, Inc., One New York Plaza,
15th Floor, New York, New York 10292-2014, Attention: Linda Muller, or such
other address as may hereafter be furnished to the Trustee in writing by the
Depositor, and (ii) in the case of the Trustee, to The Bank of New York, 101
Barclay Street (12E), New York, New York 10286, Attention: Corporate Trust, or
such other address as may hereafter be furnished to the Depositor in writing by
the Trustee.
(b) For purposes of delivering notices to the Rating Agency, notices shall
be sent to the address specified by the Depositor's designation.
17. Access to Certain Documentation. Access to documentation regarding the Term
-------------------------------
Assets will be afforded without charge to any Certificateholder so requesting
pursuant to Section 3.9 of the Agreement. Additionally, the Trustee shall
provide at the request of any Certificateholder without charge to such
Certificateholder the name and address of each Certificateholder of Certificates
hereunder as recorded in the Certificate Register for purposes of contacting the
other Certificateholders with respect to their rights hereunder or for the
purposes of effecting purchases or sales of the Certificates, subject to the
transfer restrictions set forth herein.
18. Ratification of Agreement. With respect to the Series issued hereby, the
---------------------------
Base Trust Agreement, as supplemented by this Series Supplement, is in all
respects ratified and confirmed and the Base Trust Agreement as so supplemented
by this Series Supplement shall be read, taken and construed as one and the same
instrument. To the extent there is any inconsistency between the terms of the
Base Trust Agreement and this Series Supplement, the terms of this Series
Supplement shall govern.
19. Counterparts. This Series Supplement may be executed in any number of
------------
counterparts, each of which so executed shall be deemed to be an original, but
all of such counterparts shall together constitute but one and the same
instrument.
20. Governing Law. This Series Supplement and each Certificate issued hereunder
-------------
shall be construed in accordance with and governed by the law of the State of
New York without regard to principles of conflicts of law.
21. Covenant of Depositor. The Depositor hereby covenants that it will be
----------------------
adequately capitalized at all times. The Depositor hereby further covenants that
it will not purchase or otherwise acquire any Certificates in the open market or
otherwise at any time.
* * * * *
<PAGE>
IN WITNESS WHEREOF, the Depositor and the Trustee have caused this
Series Supplement to be duly executed by their respective officers thereunto
duly authorized as of the day and year first above written.
PRUDENTIAL SECURITIES STRUCTURED ASSETS,
INC., as Depositor
By_____________________________
Authorized Signatory
THE BANK OF NEW YORK,
a New York banking corporation,
as Trustee
By_____________________________
Authorized Signatory
<PAGE>
Exhibit A
[Form of Amortizing Class Certificate]
NUMBER Certificate Principal Balance $____________
R-___ Aggregate Certificate Principal Balance $48,096,190
CUSIP NO. 755920AM7
SEE REVERSE FOR CERTAIN DEFINITIONS
THE HOLDER OF THIS CERTIFICATE SHALL HAVE NO RIGHT TO PRINCIPAL
PAYMENTS IN RESPECT OF THE TERM ASSETS EXCEPT IN THE EVENT OF AN OPTIONAL
REDEMPTION OR A SHORTENED MATURITY REDEMPTION (AS SUCH TERMS ARE DEFINED IN THE
TRUST AGREEMENT REFERRED TO HEREIN) ON OR PRIOR TO AUGUST 1, 2018. THE
REGISTERED HOLDER HEREOF, BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL LOOK
SOLELY TO THE TRUST PROPERTY (TO THE EXTENT OF ITS RIGHTS THEREIN) FOR
DISTRIBUTIONS HEREUNDER.
THIS CERTIFICATE REPRESENTS A FRACTIONAL UNDIVIDED INTEREST IN THE
TRUST AND DOES NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN, AND IS NOT
GUARANTEED BY THE DEPOSITOR OR THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE TRUST ASSETS ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR ANY OTHER PERSON.
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THESE SECURITIES
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANsFERRED EXCEPT PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER JURISDICTION.
THE TRUST HAS NOT BEEN REGISTERED AS AN INVESTMENT COMPANY UNDER THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED. NO SALE OR OTHER TRANSFER OF THIS
CERTIFICATE SHALL BE PERMITTED WHICH WOULD REQUIRE REGISTRATION OF THE TRUST
THEREUNDER.
<PAGE>
RECEIPTS ON CORPORATE SECURITIES TRUST, SERIES CHR 1998-1
RECEIPTS ON CORPORATE SECURITIES
SERIES CHR 1998-1
Amortizing Class Certificates evidencing a fractional undivided
beneficial ownership interest in the Trust, as defined below, the property of
which consists of $57,830,000 aggregate principal amount of 7.40% Debentures due
August 1, 2097 (the "Term Assets") issued by Chrysler Corporation, a Delaware
corporation ("CHR"), and deposited in the Trust by the Depositor, as defined
below. The Term Assets were purchased by the Trust from Prudential Securities
Structured Assets, Inc. (the "Depositor") in exchange for the transfer of the
Certificates to the Depositor by the Trust.
THIS CERTIFIES THAT _____________________________________________ is
the registered owner of a nonassessable, fully-paid, fractional undivided
interest in Receipts on Corporate Securities Trust, Series CHR 1998-1 formed by
the Depositor. Under the Trust Agreement, except upon or after the occurrence of
an Optional Redemption, a Shortened Maturity Redemption or an In-Kind
Distribution, there will be distributed to the Holders of the Amortizing Class
Certificates an amount equal to the Fixed Payment plus any Excess Interest on
the first day of each February and August, or, if any such day is not a Business
Day and a Term Assets Scheduled Payment Date, then the Business Day on or
immediately following the Term Assets Scheduled Payment Date, commencing August
1, 1998 through and including August 1, 2018; provided that payment on each
Scheduled Distribution Date shall be subject to receipt of the corresponding
payment of interest or principal, as applicable, on the Term Assets. Each Fixed
Payment shall be allocated first to interest accrued during the related Interest
Accrual Period at a rate equal to the Amortizing Class Yield on the then
outstanding Aggregate Certificate Principal Balance of the Amortizing Class
Certificates, with the balance of such Fixed Payment allocated to the repayment
of principal in accordance with the amortization schedule attached to the Series
Supplement as Schedule 2 (the "Amortization Schedule"). Any Excess Interest
shall be allocated as additional interest and shall not be taken into account in
the allocation of the Fixed Payment. In the event of a Partial Optional
Redemption or an exchange of Certificates for Term Assets pursuant to Section 8
of the Series Supplement referred to below, the Fixed Payment to the holders of
the Amortizing Class Certificates and the Certificate Principal Balance of this
Certificate will be reduced in accordance with the Trust Agreement. In the event
of an Optional Redemption or a Shortened Maturity Redemption, the Trustee will
distribute the payments received on the Term Assets on the Optional Redemption
Date or the Shortened Maturity Date, as applicable, to the holders of the
Amortizing Class Certificates, if still outstanding, and holders of the Residual
Class Certificates, respectively, in the same ratio as (i) the present value of
all originally scheduled future payments on the Amortizing Class Certificates
bears to (ii) the present value of all originally scheduled future payments on
the Term Assets after August 1, 2018, discounted semiannually in each case at a
rate of 7.40% per annum (such ratio being the "Distribution Ratio") to the
Optional Redemption Date or Shortened Maturity Date, as applicable. Such amounts
will be calculated by the Calculation Agent. If no Amortizing Class Certificates
are still outstanding, all payments will be made to the Holders of the Residual
Class Certificates. In the event of an In-Kind Distribution pursuant to Section
3.6 of the Base Trust Agreement, the Trustee shall make such In-Kind
Distribution to the Holders of the Amortizing Class Certificates, if still
outstanding, and the Holders of the Residual Class Certificates, respectively,
on the basis of the Distribution Ratio to the date on which the Payment Default,
Change in Reporting Status, or Acceleration of the Term Assets occurred. Such
ratio shall be calculated by the Calculation Agent. If no Amortizing Class
Certificates are still outstanding, all such distributions will be made to the
Holders of the Residual Class Certificates.
The Trust was created pursuant to a Base Trust Agreement dated as of
August 28, 1997, as amended by Base Amendment No. 1 dated as of February 27,
1998 (together, the "Base Trust Agreement"), between the Depositor and The Bank
of New York, a New York banking corporation, not in its individual capacity but
solely as Trustee (the "Trustee"), as supplemented by the Series CHR 1998-1
Supplement dated as of June 9, 1998 (the "Series Supplement" and, together with
the Base Trust Agreement, the "Trust Agreement"), between the Depositor and the
Trustee. This Certificate does not purport to summarize the Trust Agreement and
reference is hereby made to the Trust Agreement for information with respect to
the interests, rights, benefits, obligations, proceeds and duties evidenced
hereby and the rights, duties and obligations of the Trustee with respect
hereto. A copy of the Trust Agreement may be obtained from the Trustee by
written request sent to the Corporate Trust Office. Capitalized terms used but
not defined herein have the meanings assigned to them in the Trust Agreement.
This Certificate is one of the duly authorized Certificates designated
as "Receipts on Corporate Securities, Series CHR 1998-1, Amortizing Class
Certificates" (herein called the "Amortizing Class Certificates"). The Trust is
also issuing certificates designated as "Receipts on Corporate Securities,
Series CHR 1998-1, Residual Class Certificates" (hereinafter called the
"Residual Class Certificates" and together with the Amortizing Class
Certificates, the "Certificates") pursuant to the Trust Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Trust Agreement the Holder of this
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound. The property of the Trust consists of the Term Assets and all payments
on or collections in respect of the Term Assets accrued on or after the Closing
Date, all as more fully specified in the Trust Agreement.
Subject to the terms and conditions of the Trust Agreement (including
the availability of funds for distribution) and until the obligation created by
the Trust Agreement shall have terminated in accordance therewith, distributions
will be made on each Distribution Date to the Person in whose name this
Certificate is registered on the applicable Record Date. The Record Date
applicable to any Distribution Date is the 15th day immediately preceding such
Distribution Date.
Distributions made on this Certificate will be made as provided in the
Trust Agreement by the Trustee by wire transfer or credit to the appropriate
account of the Holder in immediately available funds, without the presentation
or surrender of this Certificate or the making of any notation hereon. Except as
otherwise provided in the Trust Agreement and notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency maintained for that
purpose by the Trustee in the Borough of Manhattan, the City of New York.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this Certificate shall not
entitle the holder hereof to any benefit under the Trust Agreement or be valid
for any purpose.
It is the intent of the Depositor and the Certificateholders that, for
purposes of federal income, state and local income and franchise taxes and any
other taxes imposed upon, measured by or based upon gross or net income, the
Trust shall be treated as a grantor trust or, failing that, as a partnership
that is not treated as an association (or publicly traded partnership) taxable
as a corporation, and the Trust Agreement shall be interpreted accordingly.
Except as otherwise required by appropriate taxing authorities, the Depositor
and the other Certificateholders by acceptance of a Certificate, agree to treat,
the Certificates for such tax purposes as interests in such grantor trust.
<PAGE>
THIS CERTIFICATE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICT-OF-LAW
PROVISIONS.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed as of the date set forth below.
THE BANK OF NEW YORK,
a New York banking corporation
By:________________________________
Authorized Signatory
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Amortizing Class Certificates described in the
Trust Agreement referred to herein.
THE BANK OF NEW YORK,
a New York banking corporation, not in its
individual capacity but solely as Trustee,
By:________________________________
Authorized Signatory
<PAGE>
(REVERSE OF TRUST CERTIFICATE)
The Certificates are limited in right of distribution to certain
payments and collections respecting the Trust Agreement, all as more
specifically set forth herein and in the Trust Agreement. The registered Holder
hereof, by its acceptance hereof, agrees that it will look solely to the Term
Assets (to the extent of its rights therein) for distributions hereunder.
Subject to the next sentence and to certain exceptions provided in the
Trust Agreement, the Trust Agreement permits the amendment thereof and the
modification of the rights and obligations of the Depositor and the Trustee and
the rights of the Certificateholders under the Trust Agreement at any time by
the Depositor and the Trustee with the unanimous consent of the Holders of each
Outstanding Class of Certificates. Any such consent by the Holder of this
Certificate (or any predecessor Certificate) shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange hereof or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Trust Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
The Certificates are issuable in fully registered form only in minimum
Certificate Principal Balances of $250,000 and integral multiples of $1.00 in
excess thereof. As provided in the Trust Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same principal amount, Class, original issue date and
maturity, in authorized denominations as requested by the Holder surrendering
the same.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies of the Certificate Registrar maintained by
the Trustee in the Borough of Manhattan, The City of New York, duly endorsed by,
or accompanied by an assignment in the form below and by such other documents as
required by the Trust Agreement signed by, the Holder hereof, and thereupon one
or more new Certificates of the same Class in authorized denominations
evidencing the same principal amount will be issued to the designated transferee
or transferees. The Certificate Registrar appointed under the Trust Agreement is
The Bank of New York.
No service charge will be made for any registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
The Depositor and the Trustee and any agent of the Depositor or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Trustee, nor any
such agent shall be affected by any notice to the contrary.
The Trust and the obligations of the Depositor and the Trustee created
by the Trust Agreement with respect to the Certificates will terminate upon (i)
receipt and distribution to the holders of Certificates entitled thereto of all
amounts owed under the Trust Agreement in respect of the Term Assets (subject to
Section 9(c) of the Series Supplement), (ii) the occurrence of any Shortened
Maturity Redemption, (iii) the occurrence of any Optional Redemption of all the
Term Assets then held by the Trust, (iv) the occurrence of an In-Kind
Distribution of all Term Assets then held by the Trust or (v) the delivery of
the last remaining Term Assets then held by the Trust to Certificateholders in
exchange for Certificates pursuant to Section 8 of the Series Supplement.
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR TAXPAYER IDENTIFICATION OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
________________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
________________________________________________________________________________
the within Trust Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
________________________________________________________________________________
Attorney to transfer said Trust Certificate on the books of the Certificate
Registrar, with full power of substitution in the premises.
Dated: ______________________
*
---------------------------
Signature Guaranteed;
*
---------------------------
* NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Trust Certificate in every particular,
without alteration, enlargement or any change whatever. Such signature must be
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Certificate Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Certificate Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
<PAGE>
TO BE COMPLETED BY PURCHASER:
[Check one]
[ ] The undersigned represents and warrants that it is an institutional
"accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act of 1933, as amended.
Dated: __________ _______________________________*
(Signature)
or
[ ] The undersigned represents and warrants that it is a "qualified
institutional buyer" (as defined in Rule 144A under the Securities Act of
1933, as amended).
Dated: __________ _______________________________
(Signature)
<PAGE>
NOTICE OF EXCHANGE
To: The Bank of New York, acting not in its individual capacity but as
trustee (the "Trustee") of Receipts on Corporate Securities Trust, Series CHR
1998-1 (the "Trust") created pursuant to the Series Supplement dated as of June
9, 1998 (the "Series Supplement") to the Base Trust Agreement dated as of August
28, 1997, as amended (together, the "Trust Agreement"). (Capitalized terms used
and not defined herein have the meanings ascribed thereto in the Trust
Agreement).
By delivery of this duly completed Notice of Exchange, the undersigned
registered holder of Amortizing Class Certificates and Residual Class
Certificates of the Trust irrevocably exercises its option under, and subject to
the terms and conditions of, Section 8 of the Series Supplement to exchange (a)
Amortizing Class Certificates evidencing the percentage specified below (the
"Specified Percentage") (which shall not be less than 10%) of the Aggregate
Certificate Principal Balance of all outstanding Amortizing Class Certificates
of the Trust and (b) Residual Class Certificates evidencing the Specified
Percentage of the Aggregate Certificate Principal Balance of all outstanding
Residual Class Certificates of the Trust for Term Assets representing the
Specified Percentage of all Term Assets held in the Trust (subject to rounding
down to authorized denominations as provided in Section 8 of the Series
Supplement).
The undersigned irrevocably undertakes to deliver to the Trustee on
the Exchange Date specified below the specified amount of Amortizing Class
Certificates and Residual Class Certificates held of record by the undersigned
in exchange for Term Assets in the Specified Percentage (subject to rounding as
described above).
Exchange Date: ________________________ (must be a Scheduled
Distribution Date occurring on or after August 1, 1999 and not less than 30 nor
more than 45 days after the giving of this Notice).
Certificates to be Tendered:
<TABLE>
<CAPTION>
Specified
Principal Amount of Percentage of
Certificate Principal Amount Certificate to be entire Class to
Class Number of Certificate Exchanged* be Exchanged**
- ----- ----------- ---------------- ------------------- ---------------
<S> <C> <C> <C> <C>
Amortizing $R-- $ $ {
Residual $R-- $ $ {_____________%
</TABLE>
_______________
* If not completed, the Holder will be deemed to have agreed to exchange the
entire Certificate Principal Balance represented by its Certificates.
** Must be not less than 10% and must represent the percentage of the
respective Aggregate Certificate Principal Balances of all outstanding
Amortizing Class Certificates and Residual Class Certificates issued by the
Trust.
<PAGE>
Registration instruction for Term Assets (Note: must be eligible participant of
book-entry depository system if Term Assets are held through that system):
Dated: ________________
*
--------------------------------
Signature Guaranteed;
*
--------------------------------
* NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the Trust Certificate surrendered in connection with
the exchange in every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Certificate Registrar, which
requirements include membership or participation in STAMP or such other
"signature guarantee program" as may be determined by the Certificate Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
<PAGE>
Exhibit B
[Form of Residual Class Certificate]
NUMBER Certificate Principal Balance $___________
R-___ Aggregate Certificate Principal Balance $57,830,000
CUSIP NO. 755920AL9
SEE REVERSE FOR CERTAIN DEFINITIONS
ON OR PRIOR TO AUGUST 1, 2018, THE HOLDER OF THIS CERTIFICATE SHALL
HAVE NO RIGHT TO PAYMENTS IN RESPECT OF THE TERM ASSETS EXCEPT IN THE EVENT OF
AN OPTIONAL REDEMPTION OR A SHORTENED MATURITY REDEMPTION (AS SUCH TERMS ARE
DEFINED IN THE TRUST AGREEMENT REFERRED TO HEREIN) ON OR PRIOR TO SUCH DATE AND
PRIOR TO AUGUST 1, 2097, THE HOLDER OF THIS CERTIFICATE SHALL HAVE NO RIGHT TO
PRINCIPAL PAYMENTS IN RESPECT OF THE TERM ASSETS EXCEPT IN THE EVENT OF AN
OPTIONAL REDEMPTION OR A SHORTENED MATURITY REDEMPTION (AS SUCH TERMS ARE
DEFINED IN THE TRUST AGREEMENT REFERRED TO HEREIN) PRIOR TO SUCH DATE. THE
REGISTERED HOLDER HEREOF, BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL LOOK
SOLELY TO THE TRUST PROPERTY (TO THE EXTENT OF ITS RIGHTS THEREIN) FOR
DISTRIBUTIONS HEREUNDER.
THIS CERTIFICATE REPRESENTS A FRACTIONAL UNDIVIDED INTEREST IN THE
TRUST AND DOES NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN, AND IS NOT
GUARANTEED BY THE DEPOSITOR OR THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE TRUST ASSETS ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR ANY OTHER PERSON.
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THESE SECURITIES
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANsFERRED EXCEPT PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER JURISDICTION.
THE TRUST HAS NOT BEEN REGISTERED AS AN INVESTMENT COMPANY UNDER THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED. NO SALE OR OTHER TRANSFER OF THIS
CERTIFICATE SHALL BE PERMITTED WHICH WOULD REQUIRE REGISTRATION OF THE TRUST
THEREUNDER.
THE RESIDUAL CLASS CERTIFICATES MAY ONLY BE HELD BY PERSONS WHO
CERTIFY THAT THE BENEFICIAL OWNER THEREOF IS EXEMPT FROM WITHHOLDING UNDER U.S.
FEDERAL INCOME TAX LAWS.
<PAGE>
RECEIPTS ON CORPORATE SECURITIES TRUST, SERIES CHR 1998-1
RECEIPTS ON CORPORATE SECURITIES
ON SERIES CHR 1998-1
Residual Class Certificates evidencing a fractional undivided
beneficial ownership interest in the Trust, as defined below, the property of
which consists of $57,830,000 aggregate principal amount of 7.40% Debentures due
August 1, 2097 (the "Term Assets") issued by Chrysler Corporation, a Delaware
corporation ("CHR"), and deposited in the Trust by the Depositor, as defined
below. The Term Assets were purchased by the Trust from Prudential Securities
Structured Assets, Inc. (the "Depositor") in exchange for the transfer of the
Certificates to the Depositor by the Trust.
THIS CERTIFIES THAT _________________________________________________
is the registered owner of a nonassessable, fully-paid, fractional undivided
interest in Receipts on Corporate Securities Trust, Series CHR 1998-1 formed by
the Depositor. Under the Trust Agreement, except upon or after the occurrence of
an Optional Redemption, a Shortened Maturity Redemption or an In-Kind
Distribution (as such terms are defined in the Trust Agreement), there will be
distributed to the Holders of the Residual Class Certificates, to the extent of
Interest Collections constituting Available Funds, an amount equal to the
payments of interest received from CHR on account of the Term Assets plus any
Excess Interest on the first day of each February and August, or, if any such
day is not a Business Day and a Term Assets Scheduled Payment Date, then the
Business Day on or immediately following the Term Assets Scheduled Payment Date,
commencing February 1, 2019 through and including August 1, 2097; provided that
payment on each Scheduled Distribution Date shall be subject to receipt of the
corresponding payment of interest or principal, as applicable, on the Term
Assets. Any Excess Interest shall be allocated as additional interest and shall
not be taken into account in the allocation of the payments of interest received
from CHR on account of the Terms Assets. On August 1, 2097, there will be
distributed to the Holders of the Residual Class Certificates, the proceeds from
the maturity of the Term Assets; provided that if payment of the proceeds from
the maturity of the Term Assets due from CHR on August 1, 2097 is not made by
CHR on such date, the proceeds from the maturity of the Term Assets will not be
distributed to the Holders of the Residual Class Certificates until payments of
such proceeds is made by CHR or the Trustee makes an In-Kind Distribution to
Certificateholders in accordance with the Trust Agreement. With respect to any
distribution to the Residual Class Certificates (as defined below), the
percentage of such distribution to which this Certificateholder is entitled on
any such Distribution Date is such Certificateholder's Percentage Interest of
such distribution. In the event of an Optional Redemption or a Shortened
Maturity Redemption, the Trustee will distribute the payments received on the
Term Assets on the Optional Redemption Date or the Shortened Maturity Date, as
applicable, to the holders of the Amortizing Class Certificates, if still
outstanding, and holders of the Residual Class Certificates, respectively, in
the same ratio as (i) the present value of all originally scheduled future
payments on the Amortizing Class Certificates bears to (ii) the present value of
all originally scheduled future payments on the Term Assets after August 1,
2018, discounted semiannually in each case at a rate of 7.40% per annum (such
ratio being the "Distribution Ratio") to the Optional Redemption Date or
Shortened Maturity Date, as applicable. Such amounts will be calculated by the
Calculation Agent. If no Amortizing Class Certificates are still outstanding,
all payments will be made to the Holders of the Residual Class Certificates. In
the event of an In-Kind Distribution pursuant to Section 3.6 of the Base Trust
Agreement, the Trustee shall make such In-Kind Distribution to the Holders of
the Amortizing Class Certificates, if still outstanding, and the Holders of the
Residual Class Certificates, respectively, on the basis of the Distribution
Ratio to the date on which the Payment Default, Change in Reporting Status, or
Acceleration of the Term Assets occurred. Such ratio shall be calculated by the
Calculation Agent. If no Amortizing Class Certificates are still outstanding,
all such distributions will be made to the Holders of the Residual Class
Certificates. In the event of a Partial Optional Redemption or an exchange of
Certificates for Terms Assets pursuant to Section 8 of the Series Supplement
referred to below, the payments of interest received from CHR on account of the
Term Assets made to the holders of the Residual Class Certificates and the
Certificate Principal Balance of this Certificate will be reduced in accordance
with the Trust Agreement.
The Trust was created pursuant to a Base Trust Agreement dated as of
August 28, 1997, as amended by Base Amendment No. 1 dated as of February 27,
1998 (together, the "Base Trust Agreement"), between the Depositor and The Bank
of New York, a New York banking corporation, not in its individual capacity but
solely as Trustee (the "Trustee"), as supplemented by the Series CHR 1998-1
Supplement dated as of June 9, 1998 (the "Series Supplement" and, together with
the Base Trust Agreement, the "Trust Agreement"), between the Depositor and the
Trustee. This Certificate does not purport to summarize the Trust Agreement and
reference is hereby made to the Trust Agreement for information with respect to
the interests, rights, benefits, obligations, proceeds and duties evidenced
hereby and the rights, duties and obligations of the Trustee with respect
hereto. A copy of the Trust Agreement may be obtained from the Trustee by
written request sent to the Corporate Trust Office. Capitalized terms used but
not defined herein have the meanings assigned to them in the Trust Agreement.
This Certificate is one of the duly authorized Certificates designated
as "Receipts on Corporate Securities, Series CHR 1998-1, Residual Class
Certificates" (herein called the "Residual Class Certificates"). The Trust is
also issuing certificates designated as "Receipts on Corporate Securities,
Series CHR 1998-1, Amortizing Class Certificates" (hereinafter called the
"Amortizing Class Certificates" and together with the Residual Class
Certificates, the "Certificates") pursuant to the Trust Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Trust Agreement the Holder of this
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound. The property of the Trust consists of the Term Assets and all payments
on or collections in respect of the Term Assets accrued on or after the Closing
Date, all as more fully specified in the Trust Agreement.
Subject to the terms and conditions of the Trust Agreement (including
the availability of funds for distributions) and until the obligation created by
the Trust Agreement shall have terminated in accordance therewith, distributions
will be made on each Distribution Date to the Person in whose name this
Certificate is registered on the applicable Record Date. The Record Date
applicable to any Distribution Date is the 15th day immediately preceding such
Distribution Date.
Distributions made on this Certificate will be made as provided in the
Trust Agreement by the Trustee by wire transfer or credit to the appropriate
account of the Holder in immediately available funds, without the presentation
or surrender of this Certificate or the making of any notation hereon. Except as
otherwise provided in the Trust Agreement and notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency maintained for that
purpose by the Trustee in the Borough of Manhattan, the City of New York.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this Certificate shall not
entitle the holder hereof to any benefit under the Trust Agreement or be valid
for any purpose.
It is the intent of the Depositor and the Certificateholders that, for
purposes of federal income, state and local income and franchise taxes and any
other taxes imposed upon, measured by or based upon gross or net income, the
Trust shall be treated as a grantor trust or, failing that, as a partnership
that is not treated as an association (or publicly traded partnership) taxable
as a corporation or a public traded partnership, and the Trust Agreement shall
be interpreted accordingly. Except as otherwise required by appropriate taxing
authorities, the Depositor and the other Certificateholders by acceptance of a
Certificate, agree to treat, the Certificates for such tax purposes as interests
in such grantor trust.
<PAGE>
THIS CERTIFICATE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT-OF-LAW PROVISIONS.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed as of the date set forth below.
THE BANK OF NEW YORK,
a New York banking corporation,
By:_________________________________
Authorized Signatory
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Residual Class Certificates described in the Trust
Agreement referred to herein.
THE BANK OF NEW YORK,
a New York banking corporation, not in its
individual capacity but solely as Trustee,
By:_________________________________
Authorized Signatory
<PAGE>
(REVERSE OF TRUST CERTIFICATE)
The Certificates are limited in right of distribution to certain
payments and collections respecting the Trust Agreement, all as more
specifically set forth herein and in the Trust Agreement. The registered Holder
hereof, by its acceptance hereof, agrees that it will look solely to the Term
Assets (to the extent of its rights therein) for distributions hereunder.
Subject to the next sentence and to certain exceptions provided in the
Trust Agreement, the Trust Agreement permits the amendment thereof and the
modification of the rights and obligations of the Depositor and the Trustee and
the rights of the Certificateholders under the Trust Agreement at any time by
the Depositor and the Trustee with the unanimous consent of the Holders of each
Outstanding Class of Certificates. Any such consent by the Holder of this
Certificate (or any predecessor Certificate) shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange hereof or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Trust Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
The Certificates are issuable in fully registered form only in minimum
Certificate Principal Balances of $500,000 and integral multiples of $1.00 in
excess thereof. As provided in the Trust Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same principal amount, Class, original issue date and
maturity, in authorized denominations as requested by the Holder surrendering
the same.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies of the Certificate Registrar maintained by
the Trustee in the Borough of Manhattan, The City of New York, duly endorsed, by
or accompanied by an assignment in the form below and by such other documents as
required by the Trust Agreement signed by, the Holder hereof, and thereupon one
or more new Certificates of the same Class in authorized denominations
evidencing the same principal amount will be issued to the designated transferee
or transferees. The Certificate Registrar appointed under the Trust Agreement is
The Bank of New York.
No service charge will be made for any registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
The Depositor and the Trustee and any agent of the Depositor or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Trustee, nor any
such agent shall be affected by any notice to the contrary.
The Trust and the obligations of the Depositor and the Trustee created
by the Trust Agreement with respect to the Certificates will terminate upon (i)
receipt and distribution to the holders of Certificates entitled thereto of all
amounts owed under the Trust Agreement in respect of the Term Assets (subject to
Section 9(c) of the Series Supplement), (ii) the occurrence of any Shortened
Maturity Redemption, (iii) the occurrence of any Optional Redemption of all the
Term Assets then held by the Trust, (iv) the occurrence of an In-Kind
Distribution of all Term Assets then held by the Trust or (v) the delivery of
the last remaining Term Assets then held by the Trust to Certificateholders in
exchange for Certificates pursuant to Section 8 of the Series Supplement.
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR TAXPAYER IDENTIFICATION OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE
________________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
________________________________________________________________________________
the within Trust Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
________________________________________________________________________________
Attorney to transfer said Trust Certificate on the books of the Certificate
Registrar, with full power of substitution in the premises.
Dated: ___________________________
*
------------------------------
Signature Guaranteed;
*
------------------------------
* NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Trust Certificate in every particular,
without alteration, enlargement or any change whatever. Such signature must be
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Certificate Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Certificate Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
<PAGE>
TO BE COMPLETED BY PURCHASER:
The undersigned represents and warrants that the beneficial owner
hereof is either (i) a United States person, or (ii) a non-United States person
who is exempt from withholding under U.S. federal income tax laws and has
completed, accurately and in a manner reasonably satisfactory to the Trustee or
its agent, an appropriate statement (generally on IRS Form W-8), signed under
penalties of perjury, identifying the beneficial owner and stating that the
beneficial owner is not a United States person (or, after December 31, 1999, has
satisfied applicable documentary evidence requirements for establishing that it
is not a United States person) and delivered such statement (or documentary
evidence) to the Trustee or its agent.
Dated __________ _____________________________
(Signature)
[Check one]
[ ] The undersigned represents and warrants that it is an
institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or
(7) of Regulation D under the Securities Act of 1933, as amended.
Dated: _________ ___________________________*
(Signature)
or
[ ] The undersigned represents and warrants that it is a "qualified
institutional buyer" (as defined in Rule 144A under the Securities Act of 1933,
as amended).
Dated _________ _______________________________
(Signature)
<PAGE>
NOTICE OF EXCHANGE
To: The Bank of New York, acting not in its individual capacity but as
trustee (the "Trustee") of Receipts on Corporate Securities Trust, Series CHR
1998-1 (the "Trust") created pursuant to the Series Supplement dated as of June
9, 1998 (the "Series Supplement") to the Base Trust Agreement dated as of August
28, 1997, as amended (together, the "Trust Agreement"). (Capitalized terms used
and not defined herein have the meanings ascribed thereto in the Trust
Agreement).
[Complete the following for Exchange Dates before August 1, 2018]
By delivery of this duly completed Notice of Exchange, the undersigned
registered holder of Amortizing Class Certificates and Residual Class
Certificates of the Trust irrevocably exercises its option under, and subject to
the terms and conditions of, Section 8 of the Series Supplement to exchange (a)
Amortizing Class Certificates evidencing the percentage specified below (the
"Specified Percentage") (which shall not be less than 10%) of the Aggregate
Certificate Principal Balance of all outstanding Amortizing Class Certificates
of the Trust and (b) Residual Class Certificates evidencing the Specified
Percentage of the Aggregate Certificate Principal Balance of all outstanding
Residual Class Certificates of the Trust for Term Assets representing the
Specified Percentage of all Term Assets held in the Trust (subject to rounding
down to authorized denominations as provided in Section 8 of the Series
Supplement).
The undersigned irrevocably undertakes to deliver to the Trustee on
the Exchange Date specified below the specified amount of Amortizing Class
Certificates and Residual Class Certificates held of record by the undersigned
in exchange for Term Assets in the Specified Percentage (subject to rounding as
described above).
Exchange Date: ________________________ (must be a Scheduled
Distribution Date occurring on or after August 1, 1999 and not less than 30 nor
more than 45 days after the giving of this Notice).
Certificates to be Tendered:
<TABLE>
Specified
Principal Amount of Percentage of
Certificate Principal Amount Certificate to be entire Class to
Class Number of Certificate Exchanged* be Exchanged**
- ----- ----------- ---------------- ------------------- ---------------
<S> <C> <C> <C> <C>
Amortizing $R-- $ $ {
Residual $R-- $ $ {________%
</TABLE>
[Complete the following for Exchange Dates on or after August 1, 2018]
By delivery of this duly completed Notice of Exchange, the undersigned
registered holder of Residual Class Certificates of the Trust irrevocably
exercises its option under, and subject to the terms and conditions of, Section
8 of the Series Supplement to exchange Residual Class Certificates evidencing
the percentage specified below (the "Specified Percentage") (which shall not be
less than 10%) of the Aggregate Certificate Principal Balance of all outstanding
Residual Class Certificates of the Trust for Term Assets representing the
Specified Percentage of all Term Assets held in the Trust (subject to rounding
down to authorized denominations as provided in Section 8 of the Series
Supplement).
_______________
* If not completed, the Holder will be deemed to have agreed to exchange the
entire Certificate Principal Balance represented by its Certificates.
** Must be not less than 10% and must represent the identical percentage of
the respective Aggregate Certificate Principal Balances of all outstanding
Amortizing Class Certificates and Residual Class Certificates issued by the
Trust.
<PAGE>
The undersigned irrevocably undertakes to deliver to the Trustee on
the Exchange Date specified below the specified amount of Residual Class
Certificates held of record by the undersigned in exchange for Term Assets in
the Specified Percentage (subject to rounding as described above).
Exchange Date: _______________________ (must be a Scheduled
Distribution Date occurring on or after August 1, 2018 and not less than 30 nor
more than 45 days after the giving of this Notice).
Certificates to be Tendered:
<TABLE>
Specified
Principal Amount of Percentage of
Certificate Principal Amount Certificate to be entire Class to
Class Number of Certificate Exchanged*** be Exchanged****
- ----- ----------- ---------------- ------------------- ----------------
<S> <C> <C> <C> <C>
Residual $R-- $ $ ___________%
</TABLE>
_______________
*** If not completed, the Holder will be deemed to have agreed to exchange the
entire Certificate Principal Balance represented by its Certificates.
**** Must be not less than 10% and must represent the identical percentage of
the respective Aggregate Certificate Principal Balances of all outstanding
Residual Class Certificates issued by the Trust.
<PAGE>
Registration instruction for Term Assets (Note: must be eligible participant of
book-entry depository system if Term Assets are held through that system):
Dated: ___________________
*
------------------------------
Signature Guaranteed;
*
------------------------------
NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the Trust Certificate surrendered in connection with
the exchange in every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Certificate Registrar, which
requirements include membership or participation in STAMP or such other
"signature guarantee program" as may be determined by the Certificate Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
<PAGE>
Schedule 1
IDENTIFICATION OF TERM ASSETS
<TABLE>
<CAPTION>
Terms of Term Assets:
<S> <C>
CHR:................................................. Chrysler Corporation
Term Assets:......................................... 7.40% Debentures due August 1, 2097
Issue Date:.......................................... On or about July 15, 1997
Original Principal Maturity Date:.................... August 1, 2097
Original Principal Amount Issued:.................... $500,000,000
CUSIP Number:........................................ 171196AT5
Stated Interest Rate:................................ 7.40%
Interest Payment Dates:.............................. February 1 and August 1
Mode of Payment of Term Assets:...................... By credit to the account of the holder at DTC
Principal Amount of Term Assets Deposited Under
Trust Agreement:................................. $57,830,000
</TABLE>
The Term Assets will be held by the Trustee for the Owners of
Certificates as book-entry credits to an account of the Trustee at DTC.
<PAGE>
Schedule 2
AMORTIZING CLASS CERTIFICATES
SCHEDULE OF AMORTIZING PAYMENTS*
INTEREST PRINCIPAL TOTAL REMAINING
DATE PAYMENT PAYMENT CASHFLOW BALANCE
- ---------------- ------------ ------------ ------------ -------------
August 1, 1998 1,563,126.18 576,583.82 2,139,710.00 47,519,606.18
February 1, 1999 1,544,387.20 595,322.80 2,139,710.00 46,924,283.38
August 1, 1999 1,525,039.21 614,670.79 2,139,710.00 46,309,612.59
February 1, 2000 1,505,062.41 634,647.59 2,139,710.00 45,674,965.00
August 1, 2000 1,484,436.36 655,273.64 2,139,710.00 45,019,691.36
February 1, 2001 1,463,139.97 676,570.03 2,139,710.00 44,343,121.33
August 1, 2001 1,441,151.44 698,558.56 2,139,710.00 43,644,562.77
February 1, 2002 1,418,448.29 721,261.71 2,139,710.00 42,923,301.06
August 1, 2002 1,395,007.28 744,702.72 2,139,710.00 42,178,598.34
February 1, 2003 1,370,804.45 768,905.55 2,139,710.00 41,409,692.79
August 1, 2003 1,345,815.02 793,894.98 2,139,710.00 40,615,797.81
February 1, 2004 1,320,013.43 819,696.57 2,139,710.00 39,796,101.24
August 1, 2004 1,293,373.29 846,336.71 2,139,710.00 38,949,764.53
February 1, 2005 1,265,867.35 873,842.65 2,139,710.00 38,075,921.88
August 1, 2005 1,237,467.46 902,242.54 2,139,710.00 37,173,679.34
February 1, 2006 1,208,144.58 931,565.42 2,139,710.00 36,242,113.92
August 1, 2006 1,177,868.70 961,841.30 2,139,710.00 35,280,272.62
February 1, 2007 1,146,608.86 993,101.14 2,139,710.00 34,287,171.48
August 1, 2007 1,114,333.07 1,025,376.93 2,139,710.00 33,261,794.55
February 1, 2008 1,081,008.32 1,058,701.68 2,139,710.00 32,203,092.87
August 1, 2008 1,046,600.52 1,093,109.48 2,139,710.00 31,109,983.39
February 1, 2009 1,011,074.46 1,128,635.54 2,139,710.00 29,981,347.85
August 1, 2009 974,393.81 1,165,316.19 2,139,710.00 28,816,031.66
February 1, 2010 936,521.03 1,203,188.97 2,139,710.00 27,612,842.69
August 1, 2010 897,417.39 1,242,292.61 2,139,710.00 26,370,550.08
February 1, 2011 857,042.88 1,282,667.12 2,139,710.00 25,087,882.96
August 1, 2011 815,356.20 1,324,353.80 2,139,710.00 23,763,529.16
February 1, 2012 772,314.70 1,367,395.30 2,139,710.00 22,396,133.86
August 1, 2012 727,874.35 1,411,835.65 2,139,710.00 20,984,298.21
February 1, 2013 681,989.69 1,457,720.31 2,139,710.00 19,526,577.90
August 1, 2013 634,613.78 1,505,096.22 2,139,710.00 18,021,481.68
February 1, 2014 585,698.15 1,554,011.85 2,139,710.00 16,467,469.83
August 1, 2014 535,192.77 1,604,517.23 2,139,710.00 14,862,952.60
February 1, 2015 483,045.96 1,656,664.04 2,139,710.00 13,206,288.56
August 1, 2015 429,204.38 1,710,505.62 2,139,710.00 11,495,782.94
February 1, 2016 373,612.95 1,766,097.05 2,139,710.00 9,729,685.89
August 1, 2016 316,214.79 1,823,495.21 2,139,710.00 7,906,190.68
February 1, 2017 256,951.20 1,882,758.80 2,139,710.00 6,023,431.88
August 1, 2017 195,761.54 1,943,948.46 2,139,710.00 4,079,483.42
February 1, 2018 132,583.21 2,007,126.79 2,139,710.00 2,072,356.63
August 1, 2018 67,353.37 2,072,356.63 2,139,710.00 (0.00)
_______________
* Subject to change pursuant to Section 9(a) of the Agreement following a
Partial Optional Redemption.
Exhibit 4.6
Receipts on Corporate Securities Trust, Series CHR 1998-1
$57,830,000 Residual Class Certificates
$48,096,190 Amortizing Class Certificates
Prudential Securities Structured Assets, Inc.
Depositor
REGISTRATION RIGHTS AGREEMENT
-----------------------------
This Registration Rights Agreement (this "Agreement") is made and
---------
entered into as of June 9, 1998 by and between Prudential Securities Structured
Assets, Inc., a Delaware corporation (the "Company"), and Prudential Securities
-------
Incorporated (the "Initial Purchaser"), which has agreed pursuant to the
------------------
Purchase Agreement described below to purchase from the Company an aggregate of
$57,830,000 in certificate principal amount of Receipts on Corporate Securities,
Series CHR 1998-1, Residual Class Certificates and an aggregate of $48,096,190
in certificate principal amount of Receipts on Corporate Securities, Series CHR
1998-1, Amortizing Class Certificates (together, the "Initial Certificates").
---------------------
The Initial Certificates evidence a class of undivided interest in Receipts on
Corporate Securities Trust, Series CHR 1998-1 (the "Trust") to be formed
-----
pursuant to the Trust Agreement dated as of August 28, 1997, between the
Company, as depositor, and The Bank of New York, as trustee (together with any
successor trustee, the "Trustee"), as amended by Base Amendment No. 1 thereto
dated as of February 27, 1998 and as supplemented by the Series CHR 1998-1
Supplement, to be dated as of June 9, 1998 (together, and as amended from time
to time, the "Trust Agreement"). The property of the Trust will consist
----------------
principally of $57,830,000 aggregate principal amount of 7.40% Debentures due
2097 (the "Term Assets") issued by Chrysler Corporation ("CHR") and transferred
-----------
by the Company to the Trust in exchange for the Initial Certificates and certain
other interests in the Trust.
This Agreement is made pursuant to the Terms Agreement, dated June 9,
1998 between the Company and the Initial Purchaser, which Terms Agreement
incorporates by reference the document entitled "Prudential Securities
Structured Assets, Inc.--Receipts of Corporate Securities--Offered From Time to
Time in Series, Purchase Agreement--Basic Provisions", dated August 25, 1997
(together, the "Purchase Agreement"). In order to induce the Initial Purchaser
------------------
to purchase the Initial Certificates, the Company has agreed to provide the
registration rights set forth in this Agreement. The execution and delivery of
this Agreement is a condition to the obligations of the Initial Purchaser under
the Purchase Agreement.
The parties hereby agrees as follows:
Definitions. As used in this Agreement, the following capitalized terms
shall have the following meanings:
Act: The Securities Act of 1933, as amended.
---
Affiliate: With respect to any specified person, any other person that,
---------
directly or indirectly, is in control of, is controlled by, or is under common
control with, such specified person. For purposes of this definition, control of
a person means the power, direct or indirect, to direct or cause the direction
of the management and policies of such person whether by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
Broker-Dealer: Any broker or dealer registered under the Exchange Act.
-------------
Broker-Dealer Transfer Restricted Securities: The Exchange Certificates
--------------------------------------------
that are acquired by a Broker-Dealer in the Exchange Offer in exchange for
Initial Certificates that such Broker-Dealer acquired for its own account as a
result of market-making activities or other trading activities (other than
Initial Certificates acquired directly from any of the Company or its
Affiliates).
Business Day: Any day except a Saturday, Sunday or other day in the
-------------
City of New York, or in the city of the corporate trust office of the Trustee,
on which banks are authorized to close.
Certificated Securities: As defined in the Trust Agreement.
-----------------------
Certificates: The Initial Certificates and the Exchange Certificates.
------------
Closing Date: As defined in the Purchase Agreement.
------------
Commission: The Securities and Exchange Commission.
----------
Consummate: The Exchange Offer shall be deemed "Consummated" for
----------
purposes of this Agreement upon the occurrence of the latest to occur of (a) the
filing and effectiveness under the Act of the Exchange Offer Registration
Statement relating to the Exchange Certificates to be issued in the Exchange
Offer, (b) the maintenance of such Registration Statement continuously effective
and the keeping of the Exchange Offer open for a period not less than the
minimum period required pursuant to Section 2(b) hereof, and (c) the issuance by
the Trustee pursuant to the Trust Agreement of the Exchange Certificates in the
same aggregate principal amount as the aggregate principal amount of the Initial
Certificates tendered by Holders thereof pursuant to the Exchange Offer.
Depositary: The Depository Trust Company, or any other depositary
----------
appointed by the Trust; provided, however, that such depositary must have an
address in the Borough of Manhattan, The City of New York.
Distribution Date: As defined in the Trust Agreement and the
-------------------
Certificates.
Exchange Act: The Securities Exchange Act of 1934, as amended.
------------
Exchange Certificates: Any of the Receipts on Corporate Securities,
----------------------
Series CHR 1998-1, Residual Class Certificates and the Receipts on Corporate
Securities, Series CHR 1998-1, Amortizing Class Certificates to be issued
pursuant to the Trust Agreement (i) in the Exchange Offer, (ii) in exchange for
Exchange Certificates or (iii) upon the request of any Holder of Initial
Certificates covered by a Shelf Registration Statement, in exchange for such
Initial Certificates.
Exchange Offer: The registration by the Company on behalf of the Trust
--------------
under the Act of the Exchange Certificates pursuant to the Exchange Offer
Registration Statement pursuant to which the Company on behalf of the Trust
shall offer the Holders of all outstanding Transfer Restricted Securities the
opportunity to exchange all such outstanding Transfer Restricted Securities for
Exchange Certificates in an aggregate principal amount equal to the aggregate
principal amount of the Transfer Restricted Securities tendered in such exchange
offer by such Holders.
Exchange Offer Registration Statement: The Registration Statement
----------------------------------------
relating to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial Purchaser
---------------
proposes to sell the Initial Certificates to institutional investors which are
"accredited investors" (as defined in Rule 501(a) (1), (2), (3) or (7) under the
Securities Act) or "qualified institutional buyers," as such term is defined in
Rule 144A under the Act.
Holders: With respect to a Transfer Restricted Security, the owner
-------
thereof.
Indemnified Holder: As defined in Section 6(a).
------------------
NASD: National Association of Securities Dealers, Inc.
----
Person: An individual, partnership, corporation, trust, unincorporated
------
organization, or a government or agency or political subdivision thereof.
Prospectus: The prospectus included in a Registration Statement at the
----------
time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.
Rating Agencies: Moody's Investors Service, Inc. and Standard & Poor's
---------------
Ratings Services.
Registrar: As defined in the Trust Agreement.
---------
Registration Default: As defined in Section 4.
--------------------
Registration Statement: Any registration statement filed by the Company
----------------------
on behalf of the Trust relating to (a) an offering of Exchange Certificates
pursuant to an Exchange Offer or (b) the registration for resale of Transfer
Restricted Securities pursuant to the Shelf Registration Statement, in each
case, (i) which is filed pursuant to the provisions of this Agreement and (ii)
including the Prospectus included therein, all amendments and supplements
thereto (including post-effective amendments) and all exhibits and material
incorporated by reference therein.
Restricted Broker-Dealer: Any Broker-Dealer which holds Broker-Dealer
-------------------------
Transfer Restricted Securities.
Shelf Registration Statement: As defined in Section 3(a).
----------------------------
TIA: The Trust Indenture Act of 1939, as in effect on the date of the
---
Trust Agreement.
Transfer Restricted Securities: Each Certificate, until the earliest to
------------------------------
occur of (a) the date on which such Certificate is exchanged in the Exchange
Offer and entitled to be resold to the public by the Holder thereof without
complying with the prospectus delivery requirements of the Act, (b) the date on
which such Certificate has been disposed of in accordance with a Shelf
Registration Statement, (c) the date on which such Certificate is disposed of by
a Broker-Dealer pursuant to the "Plan of Distribution" contemplated by the
Exchange Offer Registration Statement (including delivery of the Prospectus
contained therein) or (d) the date on which such Certificate is sold pursuant to
Rule 144 under the Act.
Underwritten Offering: An offering in which Certificates are sold to an
---------------------
underwriter for reoffering to the public.
Registered Exchange Offer.
Unless (i) the Exchange Offer shall not be permitted by applicable
federal law (after the procedures set forth in Section 4(a)(i) below have been
complied with), and (ii) the credit rating assigned to CHR by both Rating
Agencies falls below investment grade prior to any of the periods described in
this Section 2(a) or Section 2(b) below, the Company shall (i) cause the
Exchange Offer Registration Statement to be filed with the Commission within 180
days after the Closing Date, (ii) use its reasonable best efforts to cause such
Exchange Offer Registration Statement to become effective at the earliest
practicable time thereafter, (iii) in connection with the foregoing, (A) file
all pre-effective amendments to such Exchange Offer Registration Statement as
may be necessary in order to cause such Exchange Offer Registration Statement to
become effective, (B) file, if applicable, a post-effective amendment to such
Exchange Offer Registration Statement pursuant to Rule 430A under the Act and
(C) cause all necessary filings, if any, in connection with the registration and
qualification of the Exchange Certificates to be made under the Blue Sky laws of
such jurisdictions as are necessary to permit Consummation of the Exchange Offer
and (iv) promptly after the effectiveness of such Exchange Offer Registration
Statement, commence and Consummate the Exchange Offer. The Exchange Offer shall
be on the appropriate form permitting registration of the Exchange Certificates
to be offered in exchange for the Initial Certificates that are Transfer
Restricted Securities and to permit sales of Broker-Dealer Transfer Restricted
Securities by Restricted Broker-Dealers as contemplated by Section 2(c) below.
The Company will mail or cause to be mailed to each Holder a copy of
the Prospectus forming part of the Exchange Offer Registration Statement,
together with an appropriate letter of transmittal and related documents. The
Company shall use its best efforts to cause the Exchange Offer Registration
Statement to be effective continuously, and shall keep the Exchange Offer open
for a period of not less than 30 days and not more than 45 days after the date
notice of the Exchange Offer is mailed to the Holders; provided, however, that
-------- -------
in no event shall such period be less than the minimum period required under
applicable federal and state securities laws to Consummate the Exchange Offer.
The Company shall cause the Exchange Offer to comply with all applicable federal
and state securities laws. No securities other than the Certificates shall be
included in the Exchange Offer Registration Statement. The Company shall use its
reasonable best efforts to cause the Exchange Offer to be Consummated on the
earliest practicable date after the Exchange Offer Registration Statement has
become effective, but in no event later than 210 days following the Closing
Date.
The Company shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any Restricted Broker-Dealer which holds the Initial Certificates
that are Transfer Restricted Securities and that were acquired for the account
of such Broker-Dealer as a result of market-making activities or other trading
activities, may exchange such Initial Certificates (other than Transfer
Restricted Securities acquired directly from the Company or an Affiliate
thereof) pursuant to the Exchange Offer; however, such Broker-Dealer may be
deemed to be an "underwriter" within the meaning of the Act and must, therefore,
deliver a prospectus meeting the requirements of the Act in connection with its
initial sale of each Exchange Certificate received by such Broker-Dealer in the
Exchange Offer, which prospectus delivery requirement may be satisfied by the
delivery by such Broker-Dealer of the Prospectus contained in the Exchange Offer
Registration Statement; provided, however, that by delivering a Prospectus, a
-------- -------
Broker-Dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Act. Such "Plan of Distribution" section shall also contain all
other information with respect to such sales of Broker-Dealer Transfer
Restricted Securities by Restricted Broker-Dealers that the Commission may
require in order to permit such sales pursuant thereto, but such "Plan of
Distribution" shall not name any such Broker-Dealer or disclose the amount of
the Certificates held by any such Broker-Dealer, except to the extent required
by the Commission as a result of a change in policy after the date of this
Agreement.
The Company shall use its best efforts to keep the Exchange Offer
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Section 4(c) below to the extent necessary to
ensure that it is available for sales of Broker-Dealer Transfer Restricted
Securities by Restricted Broker-Dealers, and to ensure that such Registration
Statement conforms with the requirements of this Agreement, the Act and the
policies, rules and regulations of the Commission as announced from time to
time, for a period of one year from the date on which the Exchange Offer is
Consummated.
The Company shall promptly provide sufficient copies of the latest
version of such Prospectus to such Restricted Broker-Dealers promptly upon
request, and in no event later than one day after such request, at any time
during such one-year period in order to facilitate such sales.
The Company shall utilize the services of the Depositary for the
Exchange Offer, if and as permitted pursuant to applicable law.
Shelf Registration.
Shelf Registration. Unless the credit rating assigned to CHR by both
-------------------
Rating Agencies falls below investment grade prior to any of the periods
described in this Section 3(a), if (i) the Company is not required to file an
Exchange Offer Registration Statement with respect to the Exchange Certificates
because the Exchange Offer is not permitted by applicable law (after the
procedures set forth in Section 4(a)(i) below have been complied with) or (ii)
if any Holder of Transfer Restricted Securities shall notify the Company within
20 Business Days following the Consummation of the Exchange Offer that (A) such
Holder was prohibited by law or Commission policy from participating in the
Exchange Offer or (B) such Holder may not resell the Exchange Certificates
acquired by it in the Exchange Offer to the public without delivering a
prospectus and the Prospectus contained in the Exchange Offer Registration
Statement is not appropriate or available for such resales by such Holder or (C)
such Holder is a Broker-Dealer and holds Initial Certificates acquired directly
from the Company or one of its Affiliates, then the Company shall (x) cause to
be filed, on or prior to 60 days after the date on which the Company determines
that it is not required to file the Exchange Offer Registration Statement
pursuant to clause (i) above, or 60 days after the date on which the Company
receives the notice specified in clause (ii) above, a shelf registration
statement pursuant to Rule 415 under the Act (which may be an amendment to the
Exchange Offer Registration Statement (in either event, the "Shelf Registration
------------------
Statement")) relating to all Transfer Restricted Securities the Holders of which
- ---------
shall have provided the information required pursuant to Section 3(b) hereof,
and shall (y) use its best efforts to cause such Shelf Registration Statement to
become effective within 120 days after the date on which the Company becomes
obligated to file such Shelf Registration Statement. The Company shall use its
best efforts to keep the Shelf Registration Statement discussed in this Section
4(a) continuously effective, supplemented and amended as required by and subject
to the provisions of Sections 4(b) and (c) hereof to the extent necessary to
ensure that it is available for sales of Transfer Restricted Securities by the
Holders thereof entitled to the benefit of this Section 3(a), and to ensure that
it conforms with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, for a
period of not more than one year (as extended pursuant to Section 4(c)(i))
following the date on which such Shelf Registration Statement first becomes
effective under the Act or such shorter period that will terminate when all the
Certificates covered by the Shelf Registration Statement have been sold pursuant
to the Shelf Registration Statement. The Company shall utilize the services of
the Depositary, if and as permitted pursuant to applicable law.
Provision by Holders of Certain Information in Connection with the
-----------------------------------------------------------------------
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
- -----------------------------
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 days after receipt of a request therefor, such
information specified in Item 507 of Regulation S-K under the Act for use in
connection with any Shelf Registration Statement or Prospectus or preliminary
prospectus included therein. Each Holder as to which any Shelf Registration
Statement is being effected agrees to furnish promptly to the Company all
information required to be disclosed in order to make the information previously
furnished to the Company by such Holder not materially misleading.
Registration Procedures.
Exchange Offer Registration Statement. In connection with the Exchange
--------------------------------------
Offer, the Company shall comply with all applicable provisions of Section 4(c)
below, shall use its best efforts to effect such exchange and to permit the sale
of Broker-Dealer Transfer Restricted Securities being sold in accordance with
the intended method or methods of distribution thereof, and shall comply with
all of the following provisions:
If, following the date hereof there has been published, or otherwise
communicated by the staff of the Commission (the "Staff") a change in Commission
policy with respect to exchange offers such as the Exchange Offer, such that in
the reasonable opinion of counsel to the Company there is a substantial question
as to whether the Exchange Offer is permitted by applicable federal law, the
Company hereby agrees to seek a no-action letter or other favorable decision
from the Commission allowing the Company to Consummate an Exchange Offer. The
Company hereby agrees to pursue the issuance of such a decision by the Staff. In
connection with the foregoing, the Company hereby agrees to take all such other
actions as are reasonably requested by the Staff or otherwise reasonably
required in connection with the issuance of such decision, including without
limitation (A) participating in telephonic conferences with the Staff, (B)
delivering to the Commission staff an analysis prepared by counsel to the
Company setting forth the legal bases, if any, upon which such counsel has
concluded that such an Exchange Offer should be permitted and (C) diligently
pursuing a favorable resolution (if possible) by the Commission staff of such
submission.
As a condition to its participation in the Exchange Offer pursuant to
the terms of this Agreement, each Holder of Transfer Restricted Securities shall
furnish, upon the request of the Company, prior to the Consummation of the
Exchange Offer, a written representation to the Company (which may be contained
in the letter of transmittal contemplated by the Exchange Offer Registration
Statement) to the effect that (A) it is not an Affiliate of the Company or CHR,
(B) it is not engaged in, and does not intend to engage in, and has no
arrangement or understanding with any person to participate in, a distribution
of the Exchange Certificates to be issued in the Exchange Offer and (C) it is
acquiring the Exchange Certificates in its ordinary course of business. Each
Holder hereby acknowledges and agrees that any Broker-Dealer and any such Holder
using the Exchange Offer to participate in a distribution of the securities to
be acquired in the Exchange Offer (1) could not under Commission policy as in
effect on the date of this Agreement rely on the position of the staff of the
Commission enunciated in Morgan Stanley and Co., Inc. (available June 5, 1991)
---------------------------
(the "Morgan Stanley Letter") and Exxon Capital Holdings Corporation (available
--------------------- ----------------------------------
May 13, 1988) (the "Exxon Capital Letter"), as interpreted in the Commission
----------------------
staff's letter to Shearman & Sterling dated July 2, 1993, and similar no-action
letters (including, if applicable, any no-action letter obtained pursuant to
clause (i) above), and (2) must comply with the registration and prospectus
delivery requirements of the Act in connection with a secondary resale
transaction and that such a secondary resale transaction must be covered by an
effective registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation S-K if the
resales are of Exchange Certificates obtained by such Holder in exchange for
Initial Certificates acquired by such Holder directly from the Company or an
Affiliate thereof.
Prior to effectiveness of the Exchange Offer Registration Statement,
the Company shall provide a supplemental letter to the Commission (A) stating
that the Company is registering the Exchange Offer in reliance on the position
of the staff of the Commission enunciated in the Exxon Capital Letter, the
Morgan Stanley Letter and, if applicable, any no-action letter obtained pursuant
to clause (i) above, (B) including a representation that the Company has not
entered into any arrangement or understanding with any Person to distribute the
Exchange Certificates to be received in the Exchange Offer and that, to the best
of the Company's information and belief, each Holder participating in the
Exchange Offer is acquiring the Exchange Certificates in its ordinary course of
business and has no arrangement or understanding with any Person to participate
in the distribution of the Exchange Certificates received in the Exchange Offer
and (C) any other undertaking or representation required by the Commission as
set forth in any no-action letter obtained pursuant to clause (i) above.
Shelf Registration Statement. In connection with the Shelf Registration
----------------------------
Statement, the Company shall comply with all of the provisions of Section 4(c)
below and shall use its best efforts to effect such registration to permit the
sale of the Transfer Restricted Securities being sold in accordance with the
intended method or methods of distribution thereof (as indicated in the
information furnished to the Company pursuant to Section 3(b)), and pursuant
thereto the Company will prepare and file with the Commission a Registration
Statement relating to the registration on any appropriate form under the Act,
which form shall be available for the sale of the Transfer Restricted Securities
in accordance with the intended method or methods of distribution thereof within
the time periods and otherwise in accordance with the provisions hereof.
General Provisions. In connection with any Registration Statement and
------------------
any related Prospectus required by this Agreement to permit the sale or resale
of Transfer Restricted Securities (including, without limitation, any Exchange
Offer Registration Statement and the related Prospectus, to the extent that the
same are required to be available to permit sales of Broker-Dealer Transfer
Restricted Securities by Restricted Broker-Dealers), the Company shall:
use its best efforts to keep such Registration Statement continuously
effective and provide all requisite financial statements for the period
specified in Section 2 or 3 of this Agreement, as applicable. Upon the
occurrence of any event that would cause any such Registration Statement or the
Prospectus contained therein (A) to contain a material misstatement or omission
or (B) not to be effective and usable for resale of Transfer Restricted
Securities during the period required by this Agreement, the Company shall file
promptly an appropriate amendment to such Registration Statement, (1) in the
case of clause (A), correcting any such misstatement or omission, and (2) in the
case of clauses (A) and (B), use its best efforts to cause such amendment to be
declared effective and such Registration Statement and the related Prospectus to
become usable for its intended purposes as soon as practicable thereafter, and
shall advise the underwriter(s), if any, and selling Holders of Certificates
covered by such Registration Statement (and, if requested by such Persons,
confirm such advice in writing) of any circumstances covered by clause (A) or
(B);
prepare and file with the Commission such amendments and post-effective
amendments to the Registration Statement as may be necessary to keep the
Registration Statement effective for the applicable period set forth in Section
2 or 3, or such shorter period as will terminate when all Transfer Restricted
Securities covered by such Registration Statement have been sold; cause the
Prospectus to be supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 under the Act, and to comply fully
with Rules 424, 430A, 434 and 462, as applicable, under the Act in a timely
manner; and comply with the provisions of the Act with respect to the
disposition of all securities covered by such Registration Statement during the
applicable period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in such Registration Statement or
supplement to the Prospectus;
advise the underwriter(s), if any, and selling Holders promptly (and,
if requested by such Persons, confirm such advice in writing), (A) when the
Prospectus or any Prospectus supplement or post-effective amendment has been
filed, and, with respect to any Registration Statement or any post-effective
amendment thereto, when the same has become effective, (B) of any request by the
Commission for amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information relating thereto,
(C) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement under the Act or of the suspension
by any state securities commission of the qualification of the Transfer
Restricted Securities for offering or sale in any jurisdiction, or the
initiation or threatening of any proceeding for any of the preceding purposes,
(D) of the existence of any fact or the happening of any event that makes any
statement of a material fact made in the Registration Statement, the Prospectus,
any amendment or supplement thereto or any document incorporated by reference
therein untrue, or that requires the making of any additions to or changes in
the Registration Statement in order to make the statements therein not
misleading, or that requires the making of any additions to or changes in the
Prospectus in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, or any state securities commission or other regulatory
authority shall issue an order suspending the qualification or exemption from
qualification of the Transfer Restricted Securities under state securities or
Blue Sky laws, the Company shall use its best efforts to obtain the withdrawal
or lifting of such order at the earliest possible time;
furnish to the Initial Purchaser, each selling Holder named in any
Registration Statement or Prospectus and each of the underwriter(s) in
connection with such sale, if any, before filing with the Commission, copies of
any Registration Statement or any Prospectus included therein or any amendments
or supplements to any such Registration Statement or Prospectus (but excluding
all documents incorporated by reference after the initial filing of such
Registration Statement), which documents will be subject to the review and
comment of such Holders and underwriter(s) in connection with such sale, if any,
for a period of at least five Business Days, and the Company will not file any
such Registration Statement or Prospectus or any amendment or supplement to any
such Registration Statement or Prospectus (excluding all such documents
incorporated by reference) to which the selling Holders of the Transfer
Restricted Securities covered by such Registration Statement or the
underwriter(s) in connection with such sale, if any, shall reasonably object
within five Business Days after the receipt thereof. A selling Holder or
underwriter, if any, shall be deemed to have reasonably objected to such filing
if such Registration Statement, amendment, Prospectus or supplement, as
applicable, as proposed to be filed, contains a material misstatement or
omission or fails to comply with the applicable requirements of the Act;
make available at reasonable times for inspection by the selling
Holders, any managing underwriter participating in any disposition pursuant to
such Registration Statement and any attorney or accountant retained by such
selling Holders or any of such underwriter(s), all financial and other records
relating to the Trust, and cause the officers, directors and employees of the
Company to supply all readily obtainable information reasonably requested by any
such Holder, underwriter, attorney or accountant in connection with such
Registration Statement or any post-effective amendment thereto subsequent to the
filing thereof and prior to its effectiveness;
if requested by any selling Holders or the underwriter(s) in connection
with such sale, if any, promptly include in any Registration Statement or
Prospectus, pursuant to a supplement or post-effective amendment if necessary,
such information as such selling Holders and underwriter(s), if any, may
reasonably request to have included therein, including, without limitation,
information relating to the "Plan of Distribution" of the Transfer Restricted
Securities, information with respect to the principal amount of Transfer
Restricted Securities being sold to such underwriter(s), the purchase price
being paid therefor and any other terms of the offering of the Transfer
Restricted Securities to be sold in such offering; and make all required filings
of such Prospectus supplement or post-effective amendment as soon as practicable
after the Company is notified of the matters to be included in such Prospectus
supplement or post-effective amendment;
furnish to each selling Holder and each of the underwriter(s) in
connection with such sale, if any, without charge, at least one copy of the
Registration Statement, as first filed with the Commission, and of each
amendment thereto, including all documents incorporated by reference therein and
all exhibits (including exhibits incorporated therein by reference);
deliver to each selling Holder and each of the underwriter(s), if any,
without charge, as many copies of the Prospectus (including each preliminary
prospectus) and any amendment or supplement thereto as such Persons reasonably
may request; the Company hereby consents to the use (in accordance with law) of
the Prospectus and any amendment or supplement thereto by each of the selling
Holders and each of the underwriter(s), if any, in connection with the offering
and the sale of the Transfer Restricted Securities covered by the Prospectus or
any amendment or supplement thereto;
enter into such agreements (including an underwriting agreement) and
make such representations and warranties and take all such other actions in
connection therewith in order to expedite or facilitate the disposition of the
Transfer Restricted Securities pursuant to any Registration Statement
contemplated by this Agreement as may be reasonably requested by any Holder of
Transfer Restricted Securities or underwriter in connection with any sale or
resale pursuant to any Registration Statement contemplated by this Agreement,
and in such connection, whether or not an underwriting agreement is entered into
and whether or not the registration is an Underwritten Offering, the Company
shall:
furnish (or in the case of paragraph (2), use its best efforts to
furnish) to each selling Holder and each underwriter, if any, upon the
effectiveness of the Shelf Registration Statement and each post-effective
amendment thereto and to each Restricted Broker-Dealer upon Consummation of the
Exchange Offer and the effective date of any post-effective amendment to the
Exchange Offer Registration Statement:
a certificate, dated the date of Consummation of the Exchange Offer or
the date of effectiveness of the Shelf Registration Statement, as the case may
be, signed on behalf of the Company by the President or any Vice President,
confirming, as of the date thereof, the matters set forth in paragraph (g) of
Section 2 of the Purchase Agreement (to the extent applicable) and such other
matters as the Holders, underwriter(s) and/or Restricted Broker Dealers may
reasonably request; and
a letter, dated the date of Consummation of the Exchange Offer (and the
effective date of any post-effective amendment to the Exchange Offer
Registration Statement) or the date of effectiveness of the Shelf Registration
Statement (and each post-effective amendment thereto), as the case may be, of
counsel for the Company substantially to the effect that such counsel have
participated in conferences with officers and other representatives of the
Company and the Trustee, and have considered the matters required to be stated
therein and the statements contained therein, although such counsel have not
independently verified the accuracy, completeness or fairness of such
statements; and that such counsel advise that, on the basis of the foregoing, no
information came to such counsel's attention that caused such counsel to believe
that the applicable Registration Statement, at the time such Registration
Statement or any post-effective amendment thereto became effective and, in the
case of the Exchange Offer Registration Statement, as of the date of
Consummation of the Exchange Offer or the effective date of any post-effective
amendment to the Exchange Offer Registration Statement, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or that the Prospectus
contained in such Registration Statement as of its date and, in the case of the
opinion dated the date of Consummation of the Exchange Offer, as of the date of
Consummation, contained an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. Without
limiting the foregoing, such counsel may state further that such counsel assume
no responsibility for and express no advice as to any financial statements,
certificates and schedules thereto, and any other accounting or financial data
included in any Registration Statement contemplated by this Agreement or the
related Prospectus; and
set forth in full or incorporate by reference in the underwriting
agreement, if any, in connection with any sale or resale pursuant to any Shelf
Registration Statement the indemnification provisions and procedures of Section
6 with respect to all parties to be indemnified pursuant to said Section; and
deliver such other documents and certificates as may be reasonably
requested by the selling Holders, the underwriter(s), if any, and Restricted
Broker Dealers, if any, to evidence compliance with clause (A) above and with
any customary conditions contained in the underwriting agreement or other
agreement entered into by the Company pursuant to this clause (ix).
The above shall be done at each closing under such underwriting or
similar agreement, as and to the extent required thereunder, and if at any time
the representations and warranties of the Company contemplated in (A)(1) above
cease to be true and correct, the Company shall so advise the underwriter(s), if
any, the selling Holders and each Restricted Broker-Dealer promptly and, if
requested by such Persons, shall confirm such advice in writing;
prior to any public offering of Transfer Restricted Securities,
cooperate with the selling Holders, the underwriter(s), if any, and its counsel
in connection with the registration and qualification of the Transfer Restricted
Securities under the securities or Blue Sky laws of such jurisdictions as the
selling Holders or underwriter(s), if any, may request and do any and all other
acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Transfer Restricted Securities covered by the applicable
Registration Statement; provided, however, that the Company shall not be
required to register or qualify as a foreign corporation where it is not now so
qualified or to take any action that would subject it to the service of process
in suits or to taxation, other than as to matters and transactions relating to
the Registration Statement, in any jurisdiction where it is not now so subject;
use its best efforts to cause the disposition of the Transfer
Restricted Securities covered by the Registration Statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof or the underwriter(s), if any,
to consummate the disposition of such Transfer Restricted Securities, subject to
the proviso contained in clause (x) above;
subject to Section 4(c)(i), if any fact or event contemplated by
Section 4(c)(iii)(D) above shall exist or have occurred, prepare a supplement
or, if required, post-effective amendment to the Registration Statement or
related Prospectus or any document incorporated therein by reference or file any
other required document so that, as thereafter delivered to the purchasers of
Transfer Restricted Securities, the Prospectus will not contain an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading;
provide a CUSIP number for all Initial Certificates or Exchange
Certificates covered by a Registration Statement not later than the effective
date of such Registration Statement; and use its best efforts to ensure that
each class of Exchange Certificates have the same CUSIP number;
cooperate and assist in any filings required to be made with the NASD
and in the performance of any due diligence investigation by any underwriter
(including any "qualified independent underwriter") that is required to be
retained in accordance with the rules and regulations of the NASD, and use its
best efforts to cause such Registration Statement to become effective and
approved by such governmental agencies or authorities as may be necessary to
enable the Holders selling Transfer Restricted Securities to consummate the
disposition of such Transfer Restricted Securities;
cause the Trust Agreement to be qualified under the TIA not later than
the effective date of the first Registration Statement required by this
Agreement and, in connection therewith, cooperate with the Trustee and the
Holders of Certificates to effect such changes to the Trust Agreement as may be
required for such Trust Agreement to be so qualified in accordance with the
terms of the TIA; and execute and use its best efforts to cause the Trustee to
execute, all documents that may be required to effect such changes and all other
forms and documents required to be filed with the Commission to enable such
Trust Agreement to be so qualified in a timely manner; and
provide promptly to each Holder upon request each document filed with
the Commission with respect to the Trust pursuant to the requirements of Section
13 or Section 15(d) of the Exchange Act.
utilize the services of the Depositary, if and as permitted pursuant to
applicable law.
Restrictions on Holders. Each Holder agrees by acquisition of a
-------------------------
Transfer Restricted Security that, upon receipt of the notice referred to in
Section 4(c)(i) or Section 4(c)(iii)(D), such Holder will forthwith discontinue
disposition of Transfer Restricted Securities pursuant to the applicable
Registration Statement until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 4(c)(xii), or until
it is advised in writing by the Company that the use of the Prospectus may be
resumed, and has received copies of any additional or supplemental filings that
are incorporated by reference in the Prospectus (the "Advice"). If so directed
by the Company, each Holder will deliver to the Company (at the Company's
expense) all copies, other than permanent file copies then in such Holder's
possession, of the Prospectus covering such Transfer Restricted Securities that
was current at the time of receipt of either such notice. In the event the
Company shall give any such notice, the time period regarding the effectiveness
of such Registration Statement set forth in Section 2 or 3, as applicable, shall
be extended by the number of days during the period from and including the date
of the giving of such notice pursuant to Section 4(c)(i) or Section 4(c)(iii)(D)
to and including the date when each selling Holder covered by such Registration
Statement shall have received the copies of the supplemented or amended
Prospectus contemplated by Section 4(c)(xii) or shall have received the Advice.
Registration Expenses. All expenses incident to the Company's
performance of or compliance with this Agreement will be borne by the Company,
regardless of whether a Registration Statement becomes effective, including
without limitation: (i) all registration and filing fees and expenses (including
filings made by any purchaser or Holder with the NASD (and, if applicable, the
fees and expenses of any "qualified independent underwriter") and its counsel
that may be required by the rules and regulations of the NASD); (ii) all fees
and expenses of compliance with federal securities and state Blue Sky or
securities laws; (iii) all expenses of printing (including printing certificates
for the Exchange Certificates to be issued in the Exchange Offer and printing of
Prospectuses), messenger and delivery services and telephone; (iv) all
reasonable fees and disbursements of counsel for the Company and the Trust; (v)
all application and filing fees in connection with listing the Certificates on a
national securities exchange or automated quotation system pursuant to the
requirements hereof; and (vi) all rating agency fees in connection with
obtaining any rating of the Exchange Certificates sought by the Company.
The Company will, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties) and the fees and expenses of any Person,
including special experts, retained by the Company.
The Company will not be responsible for the fees and expenses of
counsel to the Initial Purchaser or any Holder.
Indemnification. The Company agrees to indemnify and hold harmless (i)
each Holder and (ii) each person, if any, who controls (within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act) any Holder (any of the
persons referred to in this clause (ii) being hereinafter referred to as a
"controlling person") and (iii) the respective officers, directors, partners,
employees, representatives and agents of any Holder or any controlling person
(any person referred to in clause (i), (ii) or (iii) may hereinafter be referred
to as an "Indemnified Holder"), to the fullest extent lawful, from and against
any and all losses, claims, damages, liabilities, judgments, actions and
expenses (including without limitation and as incurred, reimbursement of all
reasonable costs of investigating, preparing, pursuing or defending any claim or
action, or any investigation or proceeding by any governmental agency or body,
commenced or threatened, including the reasonable fees and expenses of counsel
to any Indemnified Holder) directly or indirectly caused by, related to, based
upon, arising out of or in connection with any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement,
preliminary prospectus or Prospectus (or any amendment or supplement thereto),
or any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or expenses are
caused by an untrue statement or omission or alleged untrue statement or
omission that is made in reliance upon and in conformity with information
relating to such Holder furnished in writing to the Company by such Holder
expressly for use therein. This indemnity agreement will be in addition to any
liability that the Company may otherwise have.
In case any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought or asserted against any
of the Indemnified Holders with respect to which indemnity may be sought against
the Company, such Indemnified Holder shall promptly notify the Company in
writing (provided that the failure to give such notice shall not relieve the
--------
Company of its obligations pursuant to this Agreement). Such Indemnified Holder
shall have the right to employ its own counsel in any such action and the fees
and expenses of such counsel shall be paid, as incurred, by the Company;
provided, however that such Indemnified Holder shall promptly reimburse the
- -------- -------
Company for any amounts paid in respect of this Section 6(a) if it is ultimately
determined that an Indemnified Holder is not entitled to indemnification
hereunder. The Company shall not, in connection with any one such action or
proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of more than
one separate firm of attorneys (in addition to any local counsel) at any time
for such Indemnified Holders, which firm shall be designated by the Holders. The
Company shall be liable for any settlement of any such action or proceeding
effected with its prior written consent, which consent shall not be withheld
unreasonably, and each Company agrees to indemnify and hold harmless each
Indemnified Holder from and against any loss, claim, damage, liability or
expense by reason of any settlement of any action effected with its written
consent. Notwithstanding the immediately preceding sentence, if at any time an
Indemnified Holder shall have requested an indemnifying party to reimburse the
Indemnified Holder for fees and expenses of counsel as contemplated by the
second sentence of this paragraph, the indemnifying party agrees that it shall
be liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than twenty business days
after receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the Indemnified Holder in
accordance with such request prior to the date of such settlement. The Company
shall not, without the prior written consent of each Indemnified Holder, settle
or compromise or consent to the entry of judgment in or otherwise seek to
terminate any pending or threatened action, claim, litigation or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not any Indemnified Holder is a party thereto), unless such
settlement, compromise, consent or termination includes an unconditional release
of each Indemnified Holder from all liability arising out of such action, claim,
litigation or proceeding.
Each Holder of Transfer Restricted Securities agrees, severally and not
jointly, to indemnify and hold harmless the Company, and its directors,
officers, and any person controlling (within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act) the Company, and the respective officers,
directors, partners, employees, representatives and agents of each such person,
to the same extent as the foregoing indemnity from the Company to each of the
Indemnified Holders, but only with respect to claims and actions based on
information relating to such Holder furnished in writing by such Holder
expressly for use in any Registration Statement. In case any action or
proceeding shall be brought against the Company or its directors or officers or
any such controlling person in respect of which indemnity may be sought against
a Holder of Transfer Restricted Securities, such Holder shall have the rights
and duties given the Company, and the Company, such directors or officers or
such controlling person shall have the rights and duties given to each Holder by
the preceding paragraph. In no event shall any Holder be liable or responsible
for any amount in excess of the amount by which the total received by such
Holder with respect to its sale of Transfer Restricted Securities pursuant to a
Registration Statement exceeds (i) the amount paid by such Holder for such
Transfer Restricted Securities and (ii) the amount of any damages which such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. This indemnity agreement will
be in addition to any liability that any such Holder may otherwise have.
If the indemnification provided for in this Section 6 is unavailable to
or insufficient to hold harmless an indemnified party under Section 6(a) or
Section 6(b) (other than by reason of exceptions provided in those Sections) in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then each applicable indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative benefits
received by the Company, on the one hand, and the Holders, on the other hand,
from its sale of Transfer Restricted Securities or if such allocation is not
permitted by applicable law, the relative fault of the Company, on the one hand,
and of the Indemnified Holder, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative fault of the Company, on the one hand, and of the Indemnified
Holder, on the other hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Indemnified Holder and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The amount paid or payable by a party as a result of
the losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in the second paragraph
of Section 6(a), any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or claim.
The Company and each Holder of Transfer Restricted Securities agree
that it would not be just and equitable if contribution pursuant to this Section
6(c) were determined by pro rata allocation (even if the Holders were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or expenses referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 6, no Holder or
its related Indemnified Holders shall be required to contribute, in the
aggregate, any amount in excess of the amount by which the total received by
such Holder with respect to the sale of its Transfer Restricted Securities
pursuant to a Registration Statement exceeds the sum of (A) the amount paid by
such Holder for such Transfer Restricted Securities PLUS (B) the amount of any
damages which such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Holders' obligations to contribute
pursuant to this Section 6(c) are several in proportion to the respective
principal amount of Transfer Restricted Securities held by each of the Holders
hereunder and not joint.
The provisions of this Section 6 will remain in full force and effect,
regardless of any investigation made by or on behalf of any Holder or the
Company or any of the officers, directors or controlling persons referred to in
this Section 6, and will survive the sale by a Holder of Certificates covered by
a Registration Statement.
Underwritten Offering. No Holder may participate in any Underwritten
Offering hereunder unless such Holder (a) agrees to sell such Holder's Transfer
Restricted Securities on the basis provided in customary underwriting
arrangements entered into in connection therewith and (b) completes and executes
all reasonable questionnaires, powers of attorney, and other documents required
under the terms of such underwriting arrangements.
Selection of Underwriters. For any Underwritten Offering, the
investment banker or investment bankers and manager or managers for any
Underwritten Offering that will administer such offering will be selected by the
Holders of a majority in aggregate principal amount of the Transfer Restricted
Securities included in such offering. Such investment bankers and managers are
referred to herein as the "underwriters."
Miscellaneous.
Amendments and Waivers. The provisions of this Agreement may not be
-----------------------
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless (i) in the case of Section 4
hereof and this Section 9(a)(i), the Company has obtained the written consent of
Holders of all outstanding Transfer Restricted Securities and (ii) in the case
of all other provisions hereof, the Company has obtained the written consent of
Holders of a majority of the outstanding principal amount of Transfer Restricted
Securities, provided that, with respect to any matter that directly or
indirectly affects the rights of the Initial Purchaser, the Company shall obtain
the written consent of the Initial Purchaser against which such amendment,
modification, supplement, waiver or consent is to be effective. Notwithstanding
the foregoing, a waiver or consent to departure from the provisions hereof that
relates exclusively to the rights of Holders whose securities are being tendered
pursuant to the Exchange Offer and that does not affect directly or indirectly
the rights of other Holders whose securities are not being tendered pursuant to
such Exchange Offer may be given by the Holders of a majority of the outstanding
principal amount of Transfer Restricted Securities subject to such Exchange
Offer.
Notices. All notices and other communications provided for or permitted
-------
hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), or air courier guaranteeing
overnight delivery:
if to a Holder, at the address set forth on the records of the Trustee
under the Trust Agreement; and
if to the Company:
Prudential Securities Structured Assets, Inc.
One New York Plaza
14th Floor
New York, New York 10292
Attention: Robert Troiano
and Lawrence S. Motz
if to the Initial Purchaser:
Prudential Securities Incorporated
One New York Plaza
New York, New York 10292
Attention: Debt Transactions Group
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next business day, if timely delivered
to an air courier guaranteeing overnight delivery.
Successors and Assigns. This Agreement shall inure to the benefit of
----------------------
and be binding upon the successors and assigns of each of the parties, including
without limitation and without the need for an express assignment, subsequent
Holders of Transfer Restricted Securities; provided, however, that this
-------- -------
Agreement shall not inure to the benefit of or be binding upon a successor or
assign of a Holder unless and to the extent such successor or assign acquired
Transfer Restricted Securities directly from such Holder.
Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
--------------
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICTS-OF-LAW PROVISIONS.
Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, to the extent permitted by law the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be affected or impaired
thereby.
Entire Agreement. This Agreement is intended by the parties as a final
----------------
expression of its agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior or contemporaneous
oral, and all prior written, agreements and understandings between the parties
with respect to such subject matter.
Certificates Held by the Company. Whenever the consent or approval of
---------------------------------
Holders of a majority in principal amount of the Transfer Restricted Securities
is required hereunder, the Transfer Restricted Securities held by any of the
Company or its Affiliates (other than subsequent Holders who are deemed to be
Affiliates solely by reason of its holdings of such Transfer Restricted
Securities) shall not be counted in determining whether such consent or approval
was given by Holders of such required majority.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
PRUDENTIAL SECURITIES STRUCTURED ASSETS, INC.
By /s/Terrance O'Dwyer
-----------------------------------------
Name: Terrance O'Dwyer
Title: Vice President
PRUDENTIAL SECURITIES INCORPORATED
By Lawrence S. Motz
-----------------------------------------
Name: Lawrence S. Motz
Title: Vice President
Exhibit 4.7
THE BANK OF NEW YORK
Officer's Certificate
---------------------
The Bank of New York hereby certifies that:
1. The Series CHR 1998-1 Supplement, dated as of June 9, 1998, between
Prudential Securities Structured Assets, Inc. (the "Depositor"), and The Bank of
New York, as Trustee (the "Trustee"), incorporating the Base Trust Agreement
referred to therein (together the "Trust Agreement"), has been duly executed and
delivered in the name and on behalf of the Trustee by Enrico Reyes, one of its
Vice Presidents.
2. Pursuant to the Trust Agreement, the Trustee has duly executed and
authenticated the Certificates and has made the Certificates available for
delivery to or upon the written order of the Depositor. The Trustee has examined
the form of the Certificates so authenticated and delivered and has found the
same to be in substantially the form called for by the Trust Agreement.
3. Each person who, on behalf of the Trustee, executed and delivered
the Trust Agreement or executed or authenticated the Certificates was at the
date thereof and is now duly elected, appointed or authorized, qualified and
acting as an officer or authorized signatory of the Trustee and duly authorized
to perform such acts at the respective times of such acts and the signatures of
such persons appearing on such documents are their genuine signatures.
4. Attached hereto are (i) an extract from the By-laws of the Trustee,
duly adopted by its Board of Directors, respecting the signing authority of the
persons mentioned above in paragraph 3, and (ii) a letter from an Executive Vice
President of the undersigned authorizing, pursuant to such Bylaws, such signing
authority, which By-laws and letter at the date hereof are in full force and
effect.
<PAGE>
IN WITNESS WHEREOF, THE BANK OF NEW YORK has caused this certificate
to be executed in its corporate name by an officer thereunto duly authorized.
Dated: June 9, 1998
THE BANK OF NEW YORK
By: /s/Mark Walsh
----------------------
Name: Mark Walsh,
Title: Assistant Vice President
<PAGE>
SIGNING AUTHORITIES
EXTRACTS FROM BY-LAWS
OF
THE BANK OF NEW YORK
ARTICLE VI
As amended through May 1, 1997
SECTION 6.1. Real Property. Real property owned by the Bank in its own
right shall not be deeded, conveyed, mortgaged, assigned or transferred except
when duly authorized by a resolution of the Board. The Board may from
time-to-time authorize officers to deed, convey, mortgage, assign or transfer
real property owned by the Bank in its own right with such maximum values as the
Board may fix in its authorizing resolution.
SECTION 6.2. Senior Signing Powers. Subject to the exception provided in
Section 6.1, the Chairman, the President, any Vice Chairman of the Board, any
Senior Executive Vice President, any Executive Vice President or any Senior Vice
President is authorized to accept, endorse, execute or sign any document,
instrument or paper in the name of, or on behalf of, the Bank in all
transactions arising out of, or in connection with, the normal course of the
Bank's business or in any fiduciary, representative or agency capacity and, when
required, to affix the seal of the Bank thereto. In such instances as in the
judgment of the Chairman, the President, any Vice Chairman of the Board, any
Senior Executive Vice President or any Executive Vice President may be proper
and desirable, any one of said officers may authorize in writing from
time-to-time any other officer to have the powers set forth in this section
applicable only to the performance or discharge of the duties of such officer
within his or her particular division or function. Any officer of the Bank
authorized in or pursuant to Section 6.3 to have any of the powers set forth
therein, other than the officer signing pursuant to this Section 6.2, is
authorized to attest to the seal of the Bank on any documents requiring such
seal.
SECTION 6.3. Limited Signing Powers. Subject to the exception provided in
Section 6.1, in such instances as in the judgment of the Chairman, the
President, any Vice Chairman of the Board, any Senior Executive Vice President
or any Executive Vice President may be proper and desirable, any one of said
officers may authorize in writing from time-to-time any other officer, employee
or individual to have the limited signing powers or limited power to affix the
seal of the Bank to specified classes of documents set forth in a resolution of
the Board applicable only to the performance or discharge of the duties of such
officer, employee or individual within his or her division or function.
SECTION 6.4. Powers of Attorney. All powers of attorney on behalf of the
Bank shall be executed by any officer of the Bank jointly with the Chairman of
the Board, the President, any Vice Chairman, any Senior Executive Vice
President, any Executive Vice President or any Senior Vice President. Any such
power of attorney may, however, be executed by any officer or officers or person
or persons who may be specifically authorized to execute the same by the Board
of Directors and, at foreign branches only, by any two officers provided one of
such officers is the Branch Manager.
SECTION 6.5. Auditor. The Auditor or any officer designated by the Auditor
is authorized to certify in the name of, or on behalf of the Bank, in its own
right or in a fiduciary or representative capacity, as to the accuracy and
completeness of any account, schedule of assets, or other document, instrument
or paper requiring such certification.
<PAGE>
The various signing powers delegated to certain Bank employees are indicated by
these code letters which appear next to the names of individuals.
CODE EXPLANATION
- ---- -----------
Senior Signing Powers
X............................... Authority to sign any document on behalf of
the Bank, in accordance with Article VI,
Section 6.2 of the By-laws.
Limited Signing Powers Granted to individuals in accordance with
Article VI, Section 6.3 of the By-laws, and
the Resolution of the Board. (Refer to
Codes A through J below.)
A .............................. All signing authority set forth in
paragraphs B through I below.
B .............................. Authority to accept, endorse, execute or
sign any bill receivable; certification;
contract, document or other instrument
evidencing, embodying a commitment with
respect to, or reflecting the terms or
conditions of, a loan or an extension of
credit by the Bank; disclosure notice
required by law; document, instrument or
paper of any type required for judicial,
regulatory or administrative proceedings or
filings; legal opinion; note; and document,
instrument or paper or any type, including
stock and bond powers, required for
purchasing, selling, transferring,
exchanging or otherwise disposing of or
dealing in foreign currency or any form of
securities, including options and futures
thereon; in each case in transactions
arising out of, or in connection with, the
normal course of the Bank's business.
C1 ............................. Authority to accept, endorse, execute or
sign or effect the issuance of any
cashier's, certified or other official
check; draft; order for payment of money;
check certification; receipt; certificate
of deposit; and money transfer wire; in
each case, in an unlimited dollar amount.
C2 ............................. Authority to accept, endorse, execute or
sign or effect the issuance of any
cashier's, certified or other official
check; draft; order for payment of money;
check certification; receipt; certificate
of deposit; and money transfer wire; in
each case, in an amount up to $1,000,000.
<PAGE>
CODE EXPLANATION
- ---- -----------
C3 ............................. Authority to accept, endorse, execute or
sign or effect the issuance of any
cashier's, certified or other official
check; draft; order for payment of money;
check certification; receipt; certificate
of deposit; and money transfer wire; in
each case, in an amount up to $250,000.
C4 ............................. Authority to accept, endorse, execute or
sign or effect the issuance of any
cashier's, certified or other official
check; draft; order for payment of money;
check certification; receipt; certificate
of deposit; and money transfer wire; in
each case, in an amount up to $50,000.
C5 ............................. Authority to accept, endorse, execute or
sign or effect the issuance of any
cashier's, certified or other official
check; draft; order for payment of money;
check certification; receipt; certificate
of deposit; and money transfer wire; in
each case, in an amount up to $5,000.
D1 ............................. Authority to accept, endorse, execute or
sign any contract obligating the Bank for
the payment of money or the provision of
services in an amount up to $1,000,000.
D2 ............................. Authority to accept, endorse, execute or
sign any contract obligating the Bank for
the payment of money or the provision of
services in an amount up to $250,000.
D3 ............................. Authority to accept, endorse, execute or
sign any contract obligating the Bank for
the payment of money or the provision of
services in an amount up to $50,000.
D4 ............................. Authority to accept, endorse, execute or
sign any contract obligating the Bank for
the payment of money or the provision of
services in an amount up to $5,000.
E .............................. Authority to accept. endorse, execute or
sign any guarantee of signature to
assignments of stocks, bonds or other
instruments; certification required for
transfers and deliveries of stocks, bonds
or other instruments; and document,
instrument or paper of any type required in
connection with any Individual Retirement
Account or Keogh Plan or similar plan.
<PAGE>
CODE EXPLANATION
- ---- -----------
F .............................. Authority to accept, endorse, execute or
sign any certificate of authentication as
bond, unit investment trust or debenture
trustee and on behalf of the Bank as
registrar and transfer agent.
G .............................. Authority to accept, endorse, execute or
sign any bankers acceptance; letter of
credit; and bill of lading.
H .............................. Authority to accept, endorse, execute or
sign any document, instrument or paper of
any type required in connection with the
ownership, management or transfer of real
or personal property held by the Bank in
trust or in connection with any transaction
with respect to which the Bank is acting in
any fiduciary, representative or agency
capacity, including the acceptance of such
fiduciary, representative or agency
account.
I .............................. Authority to effect the movement of
securities outside the Bank.
J ............................. Authority to either sign on behalf of the
Bank or to affix the seal of the Bank to,
any of the following classes of documents:
Trust Indentures, Escrow Agreements,
Pooling and Servicing Agreements,
Collateral Agency Agreements, Custody
Agreements, Trustee's Deeds, Executor's
Deeds, Personal Representative's Deeds,
Other Real Estate Deeds for property not
owned by the Bank in its own right,
Corporate Resolutions, Mortgage
Satisfactions, Mortgage Assignments, Trust
Agreements, Loan Agreements, Trust and
Estate Accountings, Probate Petitions,
responsive pleadings in litigated matters
and Petitions in Probate Court with respect
to Accountings.
Internal Signing Authority Authority to accept, endorse, execute or
N .............................. sign internal transactions only (i.e.,
general ledger tickets) which does not
include the authority to approve or
authorize the request of external money
transfer wires, checks and/or the movement
of securities outside the Bank.
<PAGE>
CORPORATE TRUST DIVISION
OFFICIAL SIGNING POWER AUTHORITY
- --------------------------------
Pursuant to Article 6, Section 6.2 and Section 6.3 of the By-Laws of The Bank of
New York, I hereby convey the signing authorities noted next to the following
individuals:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
SIGNING POWER
NAME TITLE AUTHORITY
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Eileen Barat Vice President Section 6.2
Gary S. Bush Vice President Section 6.2
Robert L. Cascone Vice President Section 6.2
Frederick W. Clark Vice President Section 6.2
Richard Costantino Vice President Section 6.2
Michael Culhane Vice President Section 6.2
Peter H. Cunningham Vice President Section 6.2
William T. Cunningham Vice President Section 6.2
Jason Engelhardt Vice President Section 6.3A
Joseph Ernst Vice President Section 6.2
Lucille Firrincieli Vice President Section 6.2
Jack Fruchtman Vice President Section 6.2
Robert F. Gennari Vice President Section 6.2
Walter N. Gitlin Vice President Section 6.2
Joseph F. Giunto Vice President Section 6.2
James W. P. Hall Vice President Section 6.2
James R. Keenan Vice President Section 6.2
Thomas J. Kelly Vice President Section 6.2
Loretta A. Lundberg Vice President Section 6.2
Suzanne J. MacDonald Vice Pres. & Ass't Secy Section 6.2
Douglas MacInnes Vice President Section 6.2
Philip A. Martone Vice President Section 6.2
William J. McGann Vice President Section 6.2
Kenneth T. McGraw Vice President Section 6.2
Robert F. McIntyre Vice President Section 6.2
Edward C. Morelli Vice President Section 6.2
Todd N. Niemy Vice President Section 6.2
Lawrence J. Olsen Vice President Section 6.2
Susan Panzer-Eichholz Vice President Section 6.3A
Enrico Reyes Vice President Section 6.2
David G. Sampson Vice President Section 6.2
Mary Jane Schmalzel Vice President Section 6.2
Paul Schmalzel Vice President Section 6.2
Nicholas S. Signoretta Vice President Section 6.2
John W. Stevenson Vice President Section 6.2
Dorothy Strelzick Vice President Section 6.2
Brian V. Swords Vice President Section 6.3A
Robert M. Zaratin Vice President Section 6.3A
Franklin B. Austin Asst. Vice President Section 6.2
Trevor R. Blewer Asst. Vice President Section 6.2
Van K. Brown Asst. Vice President Section 6.2
Stephen M. Bruce Asst. Vice President Section 6.2
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
SIGNING POWER
NAME TITLE AUTHORITY
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Patrick K. Byrne Asst. Vice President Section 6.3A
Jane S. Chester Asst. Vice President Section 6.2
Betty A. Cocozza Asst. Vice President Section 6.2
Kevin Cremin Asst. Vice President Section 6.3, C1, F, I
Wuhan Dansby Asst. Vice President Section 6.2
John Doherty Asst. Vice President Section 6.2
James S. Foley Asst. Vice President Section 6.2
Eric D. Fredrikson Asst. Vice President Section 6.3A
Vivian Georges Asst. Vice President Section 6.2
Thomas E. Geraghty Asst. Vice President Section 6.3A
Hugo Gindraux Asst. Vice President Section 6.2
Mike Hellmuth Asst. Vice President Section 6.2
Scott Heys Asst. Vice President Section 6.3A
Wilson Howard Asst. Vice President Section 6.2
Audrey I. Hyman Asst. Vice President Section 6.2
Joette Iris Asst. Vice President Section 6.3A
Harley Jeanty Asst. Vice President Section 6.2
Thomas C. Knight Asst. Vice President Section 6.2
Mary LaGumina Asst. Vice President Section 6.2
Cheryl L. Laser Asst. Vice President Section 6.2
Mary Beth A. Lewicki Asst. Vice President Section 6.2
David Massa Asst. Vice President Section 6.2
Denise A. Michaux Asst. Vice President Section 6.3A
Reyne A. Macadaeg Asst. Vice President Section 6.2
Robert A. Massimillo Asst. Vice President Section 6.2
Thomas C. Monahan Asst. Vice President Section 6.2
Mauro Palladino Asst. Vice President Section 6.2
Remo J. Reale Asst. Vice President Section 6.2
Robert W. Rich Asst. Vice President Section 6.2
Ming Shiang Asst. Vice President Section 6.2
Shanti Singh Asst. Vice President Section 6.2
Alan P. Spater Asst. Vice President Section 6.3A
Thomas E. Tabor Asst. Vice President Section 6.2
Steven D. Torgeson Asst. Vice President Section 6.2
Arlene Tramble Asst. Vice President Section 6.2
John Ulla Asst. Vice President Section 6.3A
Mark G. Walsh Asst. Vice President Section 6.2
Thomas B. Zakrzewski Asst. Vice President Section 6.2
Frank Driscoll Asst. Secretary Section 6.3A
Louis J. Hack Asst. Secretary Section 6.3A
Fernando Acebedo Assistant Treasurer Section 6.2
Iliana Acevedo Assistant Treasurer Section 6.2
Julius Antoine Assistant Treasurer Section 6.3, C1, F
Barbara E. Bennett Assistant Treasurer Section 6.2
Lenore N. Brown Assistant Treasurer Section 6.2
Carlos J. Cappelan Assistant Treasurer Section 6.3A
Jacalyn L. Choy Assistant Treasurer Section 6.3, C1, F
Anthony Cipriano Assistant Treasurer Section 6.3, C1, F
</TABLE>
THE BANK OF NEW YORK
SIGNING AUTHORITIES (Continued)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
SIGNING POWER
NAME TITLE AUTHORITY
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Sharon N. Coker Assistant Treasurer Section 6.3A
Michael C. Daly Assistant Treasurer Section 6.3A
John DiGiannantonio Assistant Treasurer Section 6.3A
Marilyn Evans Assistant Treasurer Section 6.3, C1, F
Anna Felt Assistant Treasurer Section 6.2
Albert M. Fiorello Assistant Treasurer Section 6.2
Venita Forde Assistant Treasurer Section 6.3, C1, F
Kimberly Gilfoil Assistant Treasurer Section 6.2
Timothy J. Grant Assistant Treasurer Section 6.3A
Richard Haberstroh Assistant Treasurer Section 6.2
Michael Hieb Assistant Treasurer Section 6.3, C1, F
Arlene Hernandez Assistant Treasurer Section 6.2
Sharia Jones-Bey Assistant Treasurer Section 6.3A
Barbara Kaczmar Assistant Treasurer Section 6.2
Janie J. Kim Assistant Treasurer Section 6.3A
Marie LaDolcetta Assistant Treasurer Section 6.3A
Edgar R. Lago Assistant Treasurer Section 6.3, C1, F, I
Victoria P. Lau Assistant Treasurer Section 6.3, C1, F
Joseph M. Lawlor Assistant Treasurer Section 6.2
Ednora G. Linares Assistant Treasurer Section 6.3A
Matthew G. Louis Assistant Treasurer Section 6.3A
Lina Millard Assistant Treasurer Section 6.3, C1, F
Miriam Y. Molina Assistant Treasurer Section 6.2
Robert Muller Assistant Treasurer Section 6.2
Norma Perry Assistant Treasurer Section 6.3A
William Potes Assistant Treasurer Section 6.3A
Ciro Russo Assistant Treasurer Section 6.3, C1, F
Maria R. Santos Assistant Treasurer Section 6.3A
Kelly A. Sheahan Assistant Treasurer Section 6.2
Vincent Sicari Assistant Treasurer Section 6.3A
Erica C. Thomas Assistant Treasurer Section 6.3, C1, F
Marie E. Trimboli Assistant Treasurer Section 6.3A
Paul A. VanLingen Assistant Treasurer Section 6.3A
Craig S. Wenzler Assistant Treasurer Section 6.2
Michael White Assistant Treasurer Section 6.2
</TABLE>
--------------------------------
Joseph M. Velli
Executive Vice President
THE BANK OF NEW YORK
SIGNING AUTHORITIES (Continued)
CORPORATE TRUST DIVIDION
LIST OF NON-OFFICIALS
SIGNING AUTHORITY
-----------------
SIGNING POWER
NAME AUTHORITY
- ---- ---------
Eva D. Aryeetey Section 6.3, C1, F
Eric P. Auguste Section 6.3, C1, F
William Cassels Section 6.3, C1, F
Pensador Castro Section 6.3, C1, F
Mona Chapoteau Section 6.3, C1, F
Wilberto Colon Section 6.3, C1, F, H
Patrick Cosgrove Section 6.3, C1, F
Peter C. Courtien Section 6.3A
John Cowan Section 6.3, C1, F
Sonia Cruz Section 6.3, C1, F
Barbara D'Amico Section 6.3, C1, F, H, I
Linh Dao Section 6.3, C1, F
Barbara Dean Section 6.3, C1, F
Edwin Echevarria Section 6.3, C1, F, H
Monica Edriera-Freire Section 6.3, C1, F
Essie Elcock Section 6.3, C1, F
Bernardine M. Ferguson Section 6.3, C1, F
Kevin Fox Section 6.3, C1, F
Sigifredo Galarraga Section 6.3, C1, F
Beverly Gardner-Samuel Section 6.3, C1, F
Mary Gomez Section 6.3, C1, F
William B. Gonzalez Section 6.3, C1, F
Rosilyn Goodrich Section 6.3, C1, F
Jason G. Gregory Section 6.3, C1, F
Michelle Hermonstyne Section 6.3, C1, F
Sharon Hill Section 6.3, C1, F
Peter Hyland Section 6.3, C1, F
Teresita Izar Section 6.3, C1, F
Mark Jagoda Section 6.3, C1, F
William G. Keenan Section 6.3, C1, F
THE BANK OF NEW YORK
SIGNING AUTHORITIES (Continued)
SIGNING POWER
NAME AUTHORITY
- ---- ---------
Cynthia A. Keller Section 6.3, C1, F
Joann LaBarbera Section 6.3, C1, F
Eileen Lostetter Section 6.3, C1, F
Joyce Maccou Section 6.3, C1, F
Brenda McCabe Section 6.3, C1, F
Mary Meadows Section 6.3, C1, F
Robert Miller Section 6.3, C1, F
Konstantin Mirnitchenko Section 6.3, C1, F
Geraldine Mitchell Section 6.3, C1, F
Herbert Moise Section 6.3, C1, F
William F. Morales Section 6.3, C1, F
Fernando A. Moreyra Section 6.3, C1, F
Charles J. Morgan Section 6.3, C1, F
Chitkumari Narain Section 6.3, C1, F
Patrick J. O'Leary Section 6.3, C1, F
Miriam Osorio Section 6.3, C1, F
Stacey Poindexter Section 6.3, C1, F, I
Wilfredo Ruelas Section 6.3, C1, F
Michele L. Russo Section 6.3, C1, F, I
Anthony Rutledge Section 6.3, C1, F, I
William J. Sachelari Section 6.3H
Circe M. Saint-Fleur Section 6.3, C1, F
Elizabeth L. Sandy Section 6.3H
Rolando Salazar Section 6.3, C1, F
Robert Schneck Section 6.3, C1, F
O.D. Scott, Jr. Section 6.3H
Laura Shields Section 6.3, C1, F
Ed Souter Section 6.3, C1, F
Beverly A. Steele Section 6.3, C1, F
Sandra Taranto Section 6.3, C1, F
Shirley A. Thomas Section 6.3, C1, F
Darrel X. Thompson Section 6.3, C1, F, I
Brian Townes Section 6.3, C1, F
THE BANK OF NEW YORK
SIGNING AUTHORITIES (Continued)
SIGNING POWER
NAME AUTHORITY
- ---- ---------
Phoung Tran Section 6.3, C1, F
Mavis A. Walfall Section 6.3, C1, F
Simona Ziegelboym Section 6.3, C1, F
- -------------------------
Joseph M. Velli
Executive Vice President
Exhibit 5.1
[LETTERHEAD OF BROWN & WOOD LLP]
December 7, 1998
Prudential Securities Structured Assets, Inc.
One New York Plaza
14th Floor
New York, New York 10292
Receipts on Corporate Securities Trust,
Series CHR 1998-1
c/o The Bank of New York
101 Barclay Street, 12E
New York, New York 10286
Re: Prudential Securities Structured Assets, Inc. and
Receipts on Corporate Securities Trust, Series CHR
1998-1 Registration Statement on Form S-4 (333- )
--------------------------------------------------
Ladies and Gentlemen:
We have acted as your counsel in connection with the above-referenced
Registration Statement on Form S-4 (the "Registration Statement"), filed on
December 7, 1998 with the Securities and Exchange Commission (the
"Commission") pursuant to the Securities Act of 1933, as amended (the "Act"),
in respect of the Receipts on Corporate Securities, Series CHR 1998-1 (the
"New Certificates"), to be offered in exchange (the "Exchange") for all
outstanding Receipts on Corporate Securities, Series CHR 1998-1 (the "Old
Certificates") as described in the form of prospectus contained therein (the
"Prospectus"). The New Certificates will be issued by Receipts on Corporate
Securities Trust, Series CHR 1998-1 (the "Trust"). The Trust was created
pursuant to a Base Trust Agreement dated August 28, 1997, as amended, and as
supplemented by a Series CHR 1998-1 Supplement dated June 9, 1998 (together,
the "Trust Agreement" between Prudential Securities Structured Assets, Inc.,
as depositor ("PSSA"), and The Bank of New York, a New York banking
corporation, as trustee (the "Trustee").
In arriving at the opinions expressed below, we have reviewed the
Registration Statement as filed with the Commission and the exhibits thereto. In
addition, we have reviewed the originals or copies certified or otherwise
identified to our satisfaction of all such corporate records of PSSA, the Trust,
and the Trustee and such other instruments and other certificates of public
officials, officers and representatives of PSSA and the Trustee and such other
persons, and we have made such investigations of law, as we have deemed
appropriate as a basis for the opinions expressed below. In rendering the
opinions expressed below, we have assumed that the signatures on all documents
that we have reviewed are genuine, we have relied upon the facts stated in the
Prospectus, and we have assumed that the New Certificates will conform in all
material respects to the description thereof set forth in the Prospectus.
Based upon and subject to the foregoing, and subject to the further
qualifications set forth below, it is our opinion that:
1. When the New Certificates, in the form filed as an exhibit to
the Registration Statement, have been duly executed and authenticated
in accordance with the Trust Agreement, and duly issued and delivered
by the Trustee in exchange for an equal certificate principal balance
of Old Certificates pursuant to the terms of the Registration Rights
Agreement in the form filed as an exhibit to the Registration
Statement, the New Certificates will be legal, valid, binding and
enforceable obligations of the Trust, entitled to the benefits of the
Trust Agreement, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally and to general
principles of equity.
2. For U.S. federal income tax purposes, the Trust will not be
treated as an association taxable as a corporation (or a publicly
traded partnership taxable as a corporation).
3. The Exchange will not be a taxable event for U.S. federal
income tax purposes.
The foregoing opinion 1 is limited to the laws of the State of New York.
The foregoing opinions 2 and 3 are based on the Internal Revenue Code of 1986,
as amended, U.S. Treasury regulations promulgated thereunder, and administrative
and judicial interpretations thereof, all as of the date hereof and all of which
are subject to change, possibly on a retroactive basis. This opinion will not be
updated for subsequent changes or modifications to the law and regulations or to
the judicial and administrative interpretations thereof, unless we are
specifically engaged to do so. In rendering opinions 2 and 3, we are expressing
our views only as to the federal income tax laws of the United States of
America.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the heading
"Legal Matters" in the Prospectus included in the Registration Statement. In
giving such consent, we do not thereby admit that we are "experts" within the
meaning of the Act or the rules and regulations of the Securities and Exchange
Commission issued thereunder with respect to any part of the Registration
Statement, including this exhibit.
The opinions expressed herein are limited to those matters expressly
set forth herein, and no opinion may be implied or inferred beyond the matters
expressly stated herein. Further, the opinions contained herein are being
rendered to you solely in connection with the consummation of the transactions
contemplated by the Registration Rights Agreement, and may not be relied upon to
state directly or indirectly any general proposition or for any other purpose
and may not be relied upon by any other party for any purpose.
We are furnishing this opinion to you solely for your benefit. This
opinion is not to be used, circulated, quoted or otherwise referred to for any
purpose without our prior written consent.
Very truly yours,
Brown & Wood LLP
By /s/Brown & Wood LLP
-----------------------
Exhibit 25.1
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
---------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
---------------------
PRUDENTIAL SECURITIES STRUCTURED ASSETS, INC.
(Exact name of obligor as specified in its charter)
Delaware 31-0944462
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
One New York Plaza
14th Floor
New York, New York 10292
(Address of principal executive offices) (Zip code)
RECEIPTS ON CORPORATE SECURITIES TRUST, SERIES CHR 1998-1
(Exact name of obligor as specified in its charter)
New York Not Applicable
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
c/o The Bank of New York
101 Barclay Street, 12E
New York, New York
Attention: Corporate Trust 10286
(Address of principal executive offices) (Zip code)
---------------------
Amortizing Class of Receipts on Corporate Securities, Series CHR 1998-1
(Title of the indenture securities)
================================================================================
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006,
and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
229.10(D).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T- 1
filed with Registration Statement No. 33-6215, Exhibits la and lb to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit
1 to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-
1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T- 1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York,
and State of New York, on the 17th day of November, 1998.
THE BANK OF NEW YORK
By: /s/MARY JANE SCHMALZEL
----------------------
Name: MARY JANE SCHMALZEL
Title: VICE PRESIDENT
Exhibit 7
---------
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal
Reserve System, at the close
of business June 30, 1998,
published in accordance with
a call made by the Federal
Reserve Bank of this District
pursuant to the provisions of
the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from deposi-
tory institutions:
Noninterest-bearing balances and
Currency and coin................................. $ 7,301,241
Interest-bearing balances .......................... 1,385,944
Securities:
Held-to-maturity securities. ....................... 1,000,737
Available-for-sale securities ...................... 4,240,655
Federal funds sold and Securities
purchased under agreements to
resell ............................................. 971,453
Loans and lease financing
Receivables:
Loans and leases, net of unearned
Income .............................. 38,788,269
LESS: Allowance for loan and
leases losses ....................... 632,875
LESS: Allocated transfer risk
reserve 0
Loans and leases, net of unearned
Income, allowance, and reserve 38,155,394
Assets held in trading accounts ....................... 1,307,562
Premises and fixed assets (including
capitalized leases) ................................ 670,445
Other real estate owned ............................... 13,598
Investments in unconsolidated sub-
sidiaries and associated com-
panies ............................................. 215,024
Customers' liability to this bank on
Acceptances outstanding ............................ 974,237
Intangible assets ..................................... 1,102,625
Other assets .......................................... 1,944,777
-----------
Total assets $59,283,692
===========
LIABILITIES
Deposits:
In domestic offices ................................ $ 26,930,258
Noninterest-bearing ................... 11,579,390
Interest-bearing ...................... 15,350,868
In foreign offices, Edge and
Agreement subsidiaries, and IBFs 16,117,854
Noninterest-bearing ................... 187,464
Interest-bearing ...................... 15,930,390
Federal funds purchased and Secu-
rities sold under agreements to re-
purchase ............................................ 2,170,238
Demand notes issued to the U.S.
Treasury ............................................ 300,000
Trading liabilities .................................... 1,310,867
Other Borrowed money:
With remaining maturity of one
year or less .................................... 2,549,479
With remaining maturity of more
than one year through three
years ........................................... 0
With remaining maturity of more
than three years ................................ 46,654
Bank's liability on acceptances exe-
cuted and outstanding ............................. 983,398
Subordinated notes and debentures ...................... 1,314,000
Other liabilities....................................... 2,295,520
-----------
Total liabilities ...................................... 54,018,268
-----------
EQUITY CAPITAL
Common stock ........................................... 1,135,284
Surplus ................................................ 731,319
Undivided profits and capital
Reserves ............................................ 3,385,227
Net unrealized holding gains
(losses) on available-for-sale
securities .......................................... 51,233
Cumulative foreign currency transla-
tion adjustments .................................... ( 37,639)
-----------
Total equity capital ................................... 5,265,424
-----------
Total liabilities and equity capital ................... $59,283,692
===========
I, Robert E. Keilman, Senior Vice
President and Comptroller of the
above-named bank do hereby declare that
this Report of Condition has been
prepared in conformance with the
instructions issued by the Board of
Governors of the Federal Reserve System
and is true to the best of my knowledge
and belief.
Robert E. Keilman
We, the undersigned directors,
attest to the correctness of this Report
of Condition and declare that it has
been examined by us and to the best of
our knowledge and belief has been
prepared in conformance with the
instructions issued by the Board of
Governors of the Federal Reserve System
and is true and correct.
J. Carter Bacot )
Thomas A. Renyi } Directors
Allan R. Griffith )
- --------------------------------------------------------------------------------
Exhibit 99.1
[FORM OF LETTER OF TRANSMITTAL]
RECEIPTS ON CORPORATE RECEIPTS TRUST, SERIES CHR 1998-1
Offer to Exchange
Receipts of Corporate Securities, Series CHR 1998-1,
Amortizing Class
which have been registered under the
Securities Act of 1933, as amended,
for any and all Outstanding
Receipts of Corporate Securities, Series CHR 1998-1,
Amortizing Class
Pursuant to the Prospectus, dated [____________], 1998.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M. NEW YORK
CITY TIME, ON [_________________], 1998 UNLESS EXTENDED
(THE "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN PRIOR
TO 5:00 P.M., NEW YORK CITY TIME, ON [ ], 1998.
Delivery to: The Bank of New York
By Mail or By Hand:
The Bank of New York
101 Barclay Street, 12 East
New York, New York 10286
Attention: Corporate Trust -- ________________
Telephone: (212) 815-5728
Facsimile: (212) 815-7157
Delivery of this instrument to an address other than as set forth
above, or transmission of instructions via facsimile other than as set forth
above, will not constitute a valid delivery.
The undersigned acknowledges receipt of the Prospectus, dated
[_________], 1998 (the "Prospectus"), of Receipts on Corporate Securities Trust,
Series CHR 1998-1 (the "Trust"), and this Letter of Transmittal (this "Letter"),
which together constitute the offer (the "Exchange Offer") to exchange an
aggregate Certificate Principal Balance of up to $48,096,190 Certificate
Principal Balance of Receipts of Corporate Securities, Series CHR 1998-1,
Amortizing Class (the "New Certificates") for an equal Certificate Principal
Balance of the outstanding Receipts of Corporate Securities, Series CHR 1998-1,
Amortizing Class (the "Old Certificates"). The Trust was formed pursuant to a
trust agreement dated August 28, 1997 between Prudential Securities Structured
Assets, Inc., a Delaware corporation (the "Company"), and The Bank of New York,
as trustee.
For each Old Certificate accepted for exchange, the holder of such Old
Certificate will receive a New Certificate having a Certificate Principal
Balance equal to that of the surrendered Old Certificate. The Company reserves
the right to cause the Trust, at any time or from time to time, to extend the
Exchange Offer at its discretion, in which event the term "Expiration Date"
shall mean the latest time and date to which the Exchange Offer is extended. The
Bank of New York, as Exchange Agent (the "Exchange Agent") shall notify the
holders of the Old Certificates of any extension by means of a press release or
other public announcement prior to 9:00 A.M., New York City time, on the next
business day after the previously scheduled Expiration Date.
This Letter is to be completed by a holder of Old Certificates and the
Old Certificates are to be forwarded pursuant to the procedure set forth in "The
Exchange Offer" section of the Prospectus. Holders of Old Certificates whose
certificates are not immediately available, or who are unable to deliver their
certificates and all other documents required by this Letter to the Exchange
Agent on or prior to the Expiration Date, must tender their Old Certificates
according to the guaranteed delivery procedures set forth in "The Exchange
Offer--Guaranteed Delivery Procedures" section of the Prospectus. See
Instruction 1.
The undersigned has completed the appropriate boxes below and signed
this Letter to indicate the action the undersigned desires to take with respect
to the Exchange Offer.
List below the Old Certificates to which this Letter relates. If the
space provided below is inadequate, the certificate numbers and principal amount
of Old Certificates should be listed on a separate signed schedule affixed
hereto.
- --------------------------------------------------------------------------------
DESCRIPTION OF OLD 1 2 3
CERTIFICATES
- --------------------------------------------------------------------------------
Aggregate
Name(s) and Address(es) Certificate Certificate Principal
of Registered Holder(s) Number(s) Principal Amount
(Please fill in, Balance Tendered**
if blank) of Old
Certifi-
cate(s)
- --------------------------------------------------------------------------------
----------------------------
----------------------------
Total
- --------------------------------------------------------------------------------
** Unless otherwise indicated in this column, a holder will be deemed to
have tendered ALL of the Old Certificates represented by the Old
Certificates indicated in column 2. See Instruction 2. Old
Certificates tendered hereby must be in minimum denominations in
Certificate Principal Balance of $250,000 and integral multiples of
$1.00 in excess thereof. See Instruction 1.
- --------------------------------------------------------------------------------
[ ] CHECK HERE IF TENDERED OLD CERTIFICATES ARE BEING DELIVERED
PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE
EXCHANGE AGENT AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s)
Window Ticket Number (if any)
Date of Execution of Notice of Guaranteed Delivery
Name of Institution which guaranteed delivery
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name:
Address:
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Trust the aggregate principal amount of Old
Certificates indicated above. Subject to, and effective upon, the acceptance for
exchange of the Old Certificates tendered hereby, the undersigned hereby sells,
assigns and transfers to, or upon the order of, the Trust all right, title and
interest in and to such Old Certificates as are being tendered hereby.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Old
Certificates tendered hereby and that the Trust will acquire good and
unencumbered title thereto, free and clear of all liens, restrictions, charges
and encumbrances and not subject to any adverse claim when the same are accepted
by the Trust. The undersigned hereby further represents that any New
Certificates acquired in exchange for Old Certificates tendered hereby will have
been acquired in the ordinary course of business of the person receiving such
New Certificates, whether or not such person is the undersigned, that neither
the holder of such Old Certificates nor any such other person is engaged in, or
intends to engage in a distribution of such New Certificates, or has an
arrangement or understanding with any person to participate in the distribution
of such New Certificates, and that neither the holder of such Old Certificates
nor any such other person is an "affiliate," as defined in Rule 405 under the
Securities Act of 1933, as amended (the "Securities Act"), of the Company.
The undersigned also acknowledges that this Exchange Offer is being
made based upon the understanding of the Company of an interpretation by the
staff of the Securities and Exchange Commission (the "Commission") as set forth
in no-action letters issued to third parties, including Exxon Capital Holdings
Corporation, SEC No-Action Letter (available April 13, 1989), Morgan Stanley &
Co. Incorporated, SEC No-Action Letter (available June 5, 1991) and Shearman &
Sterling, SEC No-Action Letter (available July 2, 1993), that the New
Certificates issued in exchange for the Old Certificates pursuant to the
Exchange Offer may be offered for resale, resold and otherwise transferred by
holders thereof (other than a broker-dealer who acquires such New Certificates
directly from the Trust or the Company for resale pursuant to Rule 144A under
the Securities Act or any other available exemption under the Securities Act or
any such holder that is an "affiliate" of the Company within the meaning of Rule
405 under the Securities Act), without compliance with the registration and
prospectus delivery provisions of the Securities Act, provided that such New
Certificates are acquired in the ordinary course of such holders' business and
such holders are not engaged in, and do not intend to engage in, a distribution
of such New Certificates and have no arrangement with any person to participate
in the distribution of such New Certificates. If a holder of Old Certificates is
engaged in or intends to engage in a distribution of the New Certificates or has
any arrangement or understanding with respect to the distribution of the New
Certificates to be acquired pursuant to the Exchange Offer, such holder may not
rely on the applicable interpretations of the staff of the Commission and must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any secondary resale transaction. If the
undersigned is a broker-dealer that will receive New Certificates for its own
account in exchange for Old Certificates, it represents that the Old
Certificates to be exchanged for the New Certificates were acquired by it as a
result of market-making activities or other trading activities and acknowledges
that it will deliver a prospectus in connection with any resale of such New
Certificates; however, by so acknowledging and by delivering a prospectus, the
undersigned will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Trust to be necessary or desirable to complete the sale,
assignment and transfer of the Old Certificates tendered hereby. All authority
conferred or agreed to be conferred in this Letter and every obligation of the
undersigned hereunder shall be binding upon the successors, assigns, heirs,
executors, administrators, trustees in bankruptcy and legal representatives of
the undersigned and shall not be affected by, and shall survive, the death or
incapacity of the undersigned. This tender may be withdrawn only in accordance
with the procedures set forth in "The Exchange Offer--Withdrawal of Tenders"
section of the Prospectus.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, please deliver the New Certificates (and, if applicable,
substitute certificates representing Old Certificates for any Old Certificates
not exchanged) in the name of the undersigned. Similarly, unless otherwise
indicated under the box entitled "Special Delivery Instructions" below, please
send the New Certificates (and, if applicable, substitute certificates
representing Old Certificates for any Old Certificates not exchanged) to the
undersigned at the address shown above in the box entitled "Description of Old
Certificates".
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF OLD
CERTIFICATES" ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE
OLD CERTIFICATES AS SET FORTH IN SUCH BOX ABOVE.
- - ------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
(See Instructions 3 and 4)
To be completed ONLY if certificates for Old Certificates not exchanged
and/or New Certificates are to be issued in the name of and sent to someone
other than the person(s) whose signature(s) appear(s) on this Letter above.
Issue New Certificates and/or Old Certificates to:
Name(s):______________________________
(Please Type or Print)
______________________________________
(Please Type or Print)
Address:._____________________________
______________________________________
(Including Zip Code)
- - ------------------------------------
- - ------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 3 and 4)
- - ------------------------------------
To be completed ONLY if certificates for Old Certificates not exchanged
and/or New Certificates are to be sent to someone other than the person(s) whose
signature(s) appear(s) on this Letter above or to such person(s) at an address
other than shown in the box entitled "Description of Old Certificates" on this
Letter above.
Issue New Certificates and/or Old Certificates to:
Name(s):______________________________
(Please Type or Print)
______________________________________
(Please Type or Print)
Address:______________________________
______________________________________
(Including Zip Code)
- - ------------------------------------
IMPORTANT: THIS LETTER OR A FACSIMILE HEREOF (TOGETHER WITH THE
CERTIFICATES FOR OLD CERTIFICATES AND ALL OTHER REQUIRED DOCUMENTS OR THE NOTICE
OF GUARANTEED DELIVERY) MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO 5:00
P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
PLEASE READ THIS LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING ANY BOX ABOVE.
TO BE COMPLETED BY ALL HOLDERS IN WHOSE NAME NEW CERTIFICATES ARE TO BE
REGISTERED (which will be the tendering holder unless a special issuance
instruction is given):
The undersigned represents and warrants that the beneficial owner of
the New Certificate to be received pursuant to the Exchange Offer is either (i)
a United States person, or (ii) a non-United States person who is exempt from
withholding under U.S. federal income tax laws and has completed, accurately and
in a manner reasonably satisfactory to the Trustee or its agent, an IRS Form W-8
and delivered such Form to the Trustee or its agent.
Dated ______________ _____________________________
(Signature)
- --------------------------------------------------------------------------------
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS)
(Complete accompanying Substitute Form W-9)
Dated:____________________________________________________, 1998
___________________________________________________________________
x
___________________________________________________________________
x
(Signature(s) of Owner) (Date)
Area Code and Telephone Number:_________________________
If a holder is tendering any Old Certificates, this Letter must be
signed by the registered holder(s) as the name(s) appear(s) on the
certificate(s) for the Old Certificates or by any person(s) authorized to become
registered holder(s) by endorsements and documents transmitted herewith. If
signature is by a trustee, executor, administrator, guardian, officer or other
person acting in a fiduciary or representative capacity, please set forth full
title. See Instruction 3.
Name(s):_________________________________________________________
_________________________________________________________________
(Please Type or Print)
Capacity:________________________________________________________
Address:_________________________________________________________
_________________________________________________________________
(Including Zip Code)
SIGNATURE GUARANTEE (if
required by Instruction 3)
Signature(s) Guaranteed by
an Eligible Institution:__________________________________________________
(Authorized Signature)
__________________________________________________________________________
(Title)
__________________________________________________________________________
(Name and Firm)
Dated: _______________________________________________________, 1998
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer to Exchange
Receipts of Corporate Securities, Series CHR 1998-1, Amortizing Class which have
been registered under the Securities Act of 1933, as amended, for any and all
Outstanding Receipts of Corporate Securities, Series CHR 1998-1, Amortizing
Class by Receipts on Corporate Securities Trust, Series CHR 1998-1
1. Delivery of this Letter and Old Certificates; Guaranteed Delivery
Procedures.
This Letter is to be completed by holders of Old Certificates if
certificates are to be forwarded herewith. Certificates for all physically
tendered Old Certificates as well as a properly completed and duly executed
Letter of Transmittal (or facsimile thereof) and any other documents required by
this Letter, must be received by the Exchange Agent at the address set forth
herein on or prior to the Expiration Date, or the tendering holder must comply
with the guaranteed delivery procedures set forth below. Old Certificates
tendered hereby must be in denominations of Certificate Principal Balance of
$250,000 and integral multiples of $1.00 in excess thereof.
Holders of Old Certificates whose certificates for Old Certificates are
not immediately available or who cannot deliver their certificates and all other
required documents to the Exchange Agent on or prior to the Expiration Date may
tender their Old Certificates pursuant to the guaranteed delivery procedures set
forth in "The Exchange Offer--Guaranteed Delivery Procedures" section of the
Prospectus. Pursuant to such procedures, (i) such tender must be made through an
Eligible Institution (as defined below), (ii) prior to the Expiration Date, the
Exchange Agent must receive from such Eligible Institution a properly completed
and duly executed Letter of Transmittal (or facsimile thereof) and Notice of
Guaranteed Delivery, substantially in the form provided by the Trust (by
facsimile transmission, mail or hand delivery), setting forth the name and
address of the holder of Old Certificates and the amount of Old Certificates
tendered, stating that the tender is being made thereby and guaranteeing that
within three New York Stock Exchange ("NYSE") trading days after the date of
execution of the Notice of Guaranteed Delivery, the certificates for all
physically tendered Old Certificates and any other documents required by this
letter will be deposited by the Eligible Institution with the Exchange Agent,
and (iii) the certificates for all physically tendered Old Certificates, in
proper form for transfer, and all other documents required by this Letter, are
received by the Exchange Agent within three NYSE trading days after the date of
execution of the Notice of Guaranteed Delivery.
The method of delivery of this Letter, the Old Certificates and all
other required documents is at the election and risk of the tendering holders,
but the delivery will be deemed made only when actually received or confirmed by
the Exchange Agent. If Old Certificates are sent by mail, it is suggested that
the mailing be made sufficiently in advance of the Expiration Date to permit
delivery to the Exchange Agent prior to 5:00 p.m., New York City time, on the
Expiration Date.
See "The Exchange Offer" section of the Prospectus.
2. Partial Tenders.
If less than all of the Old Certificates evidenced by a submitted
certificate are to be tendered, the tendering holder(s) should fill in the
aggregate principal amount of Old Certificates to be tendered in the box above
entitled "Description of Old Certificates--Principal Amount Tendered". A
reissued certificate representing the balance of nontendered Old Certificates
will be sent to such tendering holder, unless otherwise provided in the
appropriate box on this Letter, promptly after the Expiration Date. ALL OF THE
OLD CERTIFICATES DELIVERED TO THE EXCHANGE AGENT WILL BE DEEMED TO HAVE BEEN
TENDERED UNLESS OTHERWISE INDICATED.
3. Signatures of this Letter; Bond Powers and Endorsements; Guarantee of
Signatures.
If this Letter is signed by the registered holder of the Old
Certificates tendered hereby, the signature must correspond exactly with the
name as written on the face of the certificates without any change whatsoever.
If any tendered Old Certificates are owned of record by two or more
joint owners, all such owners must sign this Letter.
If any tendered Old Certificates are registered in different names on
several certificates, it will be necessary to complete, sign and submit as many
separate copies of this Letter as there are different registrations of
certificates.
When this Letter is signed by the registered holder of the Old
Certificates specified herein and tendered hereby, no endorsements of
certificates or separate bond powers are required. If, however, the New
Certificates are to be issued, or any untendered Old Certificates are to be
reissued, to a person other than the registered holder, then endorsements of any
certificates transmitted hereby or separate bond powers are required. Signatures
on such certificates must be guaranteed by an Eligible Institution.
If this Letter is signed by a person other than the registered holder
of any certificates specified herein, such certificates must be endorsed or
accompanied by appropriate bond powers, in either case signed exactly as the
name of the registered holder appears on the certificates and the signatures on
such certificates must be guaranteed by an Eligible Institution.
If this Letter or any certificates or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and, unless waived by the Trust, proper
evidence satisfactory to the Trust of their authority to so act must be
submitted.
ENDORSEMENTS ON CERTIFICATES FOR OLD CERTIFICATES OR SIGNATURES ON BOND
POWERS REQUIRED BY THIS INSTRUCTION 3 MUST BE GUARANTEED BY A FIRM WHICH IS A
MEMBER OF A REGISTERED NATIONAL SECURITIES EXCHANGE OR A MEMBER OF THE NATIONAL
ASSOCIATION OF SECURITIES DEALERS, INC., BY A COMMERCIAL BANK OR TRUST COMPANY
HAVING AN OFFICE OR CORRESPONDENT IN THE UNITED STATES OR BY AN "ELIGIBLE
GUARANTOR" INSTITUTION WITHIN THE MEANING OF RULE 17AD-15 UNDER THE SECURITIES
EXCHANGE ACT OF 1934 (AN "ELIGIBLE INSTITUTION").
SIGNATURES ON THIS LETTER NEED NOT BE GUARANTEED BY AN ELIGIBLE
INSTITUTION, PROVIDED THE OLD CERTIFICATES ARE TENDERED (I) BY A REGISTERED
HOLDER OF OLD CERTIFICATES WHO HAS NOT COMPLETED THE BOX ENTITLED "SPECIAL
ISSUANCE INSTRUCTIONS" OR "SPECIAL DELIVERY INSTRUCTIONS" ON THIS LETTER, OR
(II) FOR THE ACCOUNT OF AN ELIGIBLE INSTITUTION.
4. Special Issuance and Delivery Instructions.
Tendering holders of Old Certificates should indicate in the applicable
box the name and address to which New Certificates issued pursuant to the
Exchange Offer and/or substitute certificates evidencing Old Certificates not
exchanged are to be issued or sent, if different from the name or address of the
person signing this Letter. In the case of issuance in a different name, the
employer identification or social security number of the person named must also
be indicated. If no such instructions are given, such Old Certificates not
exchanged will be returned to the name or address of the person signing this
Letter.
5. Tax Identification Number.
Federal income tax law generally requires that a tendering holder whose
Old Certificates are accepted for exchange must provide the Trustee (as payor)
with such Holder's correct Taxpayer Identification Number ("TIN") on Substitute
Form W-9 below, which, in the case of a tendering holder who is an individual,
is his or her social security number. If the Trustee is not provided with the
current TIN or an adequate basis for an exemption, such tendering holder may be
subject to a $50 penalty imposed by the Internal Revenue Service. In addition,
delivery of New Certificates to such tendering holder may be subject to backup
withholding in an amount equal to 31% of all reportable payments made after the
exchange. If withholding results in an overpayment of taxes, a refund may be
obtained.
Exempt holders of Old Certificates (including, among others, all
corporations and certain foreign individuals) are not subject to these backup
withholding and reporting requirements. See the enclosed Guidelines of
Certification of Taxpayer Identification Number on Substitute Form W-9 (the "W-9
Guidelines") for additional instructions.
To prevent backup withholding, each tendering holder of Old
Certificates must provide its correct TIN by completing the "Substitute Form
W-9" set forth below, certifying that the TIN provided is correct (or that such
holder is awaiting a TIN) and that (i) the holder is exempt from backup
withholding, (ii) the holder has not been notified by the Internal Revenue
Service that such holder is subject to a backup withholding as a result of a
failure to report all interest or dividends or (iii) the Internal Revenue
Service has notified the holder that such holder is no longer subject to backup
withholding. If the tendering holder of Old Certificates is a nonresident alien
or foreign entity not subject to backup withholding, such holder must give the
Trustee a completed Form W-8, Certificate of Foreign Status. These forms may be
obtained from the Exchange Agent. If the Old Certificates are in more than one
name or are not in the name of the actual owner, such holder should consult the
W-9 Guidelines for information on which TIN to report. If such holder does not
have a TIN, such holder should consult the W-9 Guidelines for instructions on
applying for a TIN, check the box in Part 2 of the Substitute Form W-9 and write
"applied for" in lieu of its TIN. Note: checking this box and writing "applied
for" on the form means that such holder has already applied for a TIN or that
such holder intends to apply for one in the near future. If such holder does not
provide its TIN to the Trustee within 60 days, backup withholding will begin and
continue until such holder furnishes its TIN to the Trustee.
6. Transfer Taxes.
The Company will pay all transfer taxes, if any, applicable to the
transfer of Old Certificates to it or its order pursuant to the Exchange Offer.
If, however, New Certificates and/or substitute Old Certificates not exchanged
are to be delivered to, or are to be registered or issued in the name of, any
person other than the registered holder of the Old Certificates tendered hereby,
or if tendered Old Certificates are registered in the name of any person other
than the person signing this Letter, or if a transfer tax is imposed for any
reason other than the transfer of Old Certificates to the Trust or its order
pursuant to the Exchange Offer, the amount of any such transfer taxes (whether
imposed on the registered holder or any other persons) will be payable by the
tendering holder. If satisfactory evidence of payment of such taxes or exemption
therefrom is not submitted herewith, the amount of such transfer taxes will be
billed directly to such tendering holder.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT IS NOT NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE OLD CERTIFICATES SPECIFIED IN THIS
LETTER.
7. Waiver of Conditions.
The Trust reserves the absolute right to waive satisfaction of any or
all conditions enumerated in the Prospectus.
8. No Conditional Tenders.
No alternative, conditional, irregular or contingent tenders will be
accepted. All tendering holders of Old Certificates, by execution of this
Letter, shall waive any right to receive notice of the acceptance of their Old
Certificates for exchange.
None of the Trustee, the Exchange Agent, PSSA or any other person is
obligated to give notice of any defect or irregularity with respect to any
tender of Old Certificates nor shall any of them incur any liability for failure
to give any such notice.
9. Mutilated, Lost, Stolen or Destroyed Old Certificates.
Any holder whose Old Certificates have been mutilated, lost, stolen or
destroyed should contact the Exchange Agent at the address indicated above for
further instructions.
10. Requests for Assistance or Additional Copies.
Questions relating to the procedure for tendering, as well as requests
for additional copies of the Prospectus and this Letter, may be directed to the
Exchange Agent, at the address and telephone number indicated above.
TO BE COMPLETED BY ALL TENDERING HOLDERS
(See Instruction 5)
PAYOR'S NAME: RECEIPTS ON CORPORATE SECURITIES TRUST, SERIES CHR 1998-1
- --------------------------------------------------------------------------------
SUBSTITUTE
Form W-9
Department of the Treasury
Internal Revenue Service:
- --------------------------------------------------------------------------------
Part 1 -- PLEASE PROVIDE YOUR
TIN IN THE BOX AT RIGHT AND TIN:______________________________
CERTIFY BY SIGNING AND (Social Security Number or
DATING BELOW. Employer Identification Number
- --------------------------------------------------------------------------------
Part 2 -- TIN Applied For
- --------------------------------------------------------------------------------
CERTIFICATION: UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT:
(1) the number shown on this form is my correct Taxpayer Identification
Number (or I am waiting for a number to be issued to me) ("TIN").
(2) I am not subject to backup withholding either because: (a) I am
exempt from Taxpayer backup withholding, or (b) I have not been
notified by the Internal Revenue Service (the "IRS") that I am
subject to backup withholding as a result of a failure to report all
interest or dividends, or (c) the IRS has notified me that I am no
longer subject to backup withholding, and
(3) any other information provided on this form is true and correct.
SIGNATURE______________________________ DATE________________
- --------------------------------------------------------------------------------
You must cross out item (2) of the above certification if you have been
notified by the IRS that you are subject to backup withholding because of
underreporting of interest or dividends on your tax return and you have not been
notified by the IRS that you are no longer subject to backup withholding.
- - ------------------------------------------------
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART 2 OF SUBSTITUTE FORM W-9
- - ------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (b)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number by the time of the
exchange, 31 percent of all reportable payments made to me thereafter will be
withheld until I provide a number.
SIGNATURE______________________________ DATE________________
- --------------------------------------------------------------------------------
Exhibit 99.2
[FORM OF NOTICE OF GUARANTEED DELIVERY FOR
RECEIPTS ON CORPORATE SECURITIES TRUST, SERIES CHR 1998-1]
This form or one substantially equivalent hereto must be used to accept
the Exchange Offer of Receipts on Corporate Securities Trust, Series CHR 1998-1
(the "Trust"), made pursuant to the Prospectus, dated [__________], 1998 (the
"Prospectus"), and the enclosed Letter of Transmittal (the "Letter of
Transmittal") if certificates for Old Certificates are not immediately available
or time will not permit all required documents to reach the Exchange Agent prior
to 5:00 P.M., New York City time, on the Expiration Date of the Exchange Offer.
Such form may be delivered or transmitted by facsimile transmission, mail or
hand delivery to The Bank of New York (the "Exchange Agent") as set forth below.
In addition, in order to utilize the guaranteed delivery procedure to tender Old
Certificates pursuant to the Exchange Offer, a completed, signed and dated
Letter of Transmittal (or facsimile thereof) must also be received by the
Exchange Agent prior to 5:00 P.M., New York City time, on the Expiration Date.
Capitalized terms not defined herein are defined in the Prospectus.
Delivery to: The Bank of New York, Exchange Agent
By Mail or By Hand
The Bank of New York
101 Barclay Street, 12 East
New York, New York 10286
Attention: Corporate Trust -- ____________________
Telephone: (212) 815-5728
Facsimile: (212) 815-7157
Delivery of this instrument to an address other than as set forth
above, or transmission of instructions via facsimile other than as set forth
above, will not constitute a valid delivery.
Ladies and Gentlemen:
Upon the terms and conditions set forth in the Prospectus and the
accompanying Letter of Transmittal, the undersigned hereby tenders to the
Trust the Certificate Principal Balance of Old Certificates set forth below,
pursuant to the guaranteed delivery procedure described in "The Exchange Offer
- -- Guaranteed Delivery Procedures" section of the Prospectus.
Certificate Principal Balance Name(s) of Record Holders(s):
of Old Certificates Tendered:
$_________________________________ _________________________________
Certificate Nos. (if available):
_________________________________ Address(es):
_________________________________
_________________________________
_________________________________
_________________________________
Area Code and Telephone
Number(s):
_________________________________
Signature(s):
_________________________________
_________________________________
THE ACCOMPANYING GUARANTEE MUST BE COMPLETED.
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a firm that is a member firm of a registered
national securities exchange or of the National Association of Securities
Dealers, Inc., a commercial bank or trust company having an office
correspondent in the United States or any "eligible guarantor" institution
within the meaning of Rule 17Ad-15 of the Exchange Act of 1934, as amended.,
hereby (a) guarantees to deliver to the Exchange Agent, at one of its
addresses set forth above, the certificates representing all tendered Old
Certificates, in proper form for transfer, together with a properly completed
and duly executed Letter of Transmittal (or facsimile thereof), with any
required signature guarantees, and any other documents required by the Letter
of Transmittal within three New York Stock Exchange, Inc. trading days after
the date of execution of this Notice of Guaranteed Delivery.
Name of Firm: ___________________________ ___________________________________
(Authorized Signature)
Address:_______________________________
_______________________________________
Area Code and
Telephone Number:______________________
Title:_________________________________
Name:__________________________________
Date:__________________________________
