As filed with the Securities and Exchange Commission on December 7, 1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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PRUDENTIAL SECURITIES STRUCTURED RECEIPTS ON CORPORATE SECURITIES
ASSETS, INC. TRUST, SERIES CHR 1998-1
(Exact Name of Registrant as (Exact Name of Registrant as Specified
Specified in its Charter) in its Trust Agreement)
Delaware New York
(State of Incorporation) (State of Incorporation)
6799 6733
(Primary Standard Industrial (Primary Standard Industrial
Classification Code Number) Classification Code Number)
31-0944462 N/A
(I.R.S.EmployerIdentification No.) (I.R.S. Employer Identification No.)
One New York Plaza c/o The Bank of New York
14th Floor 101 Barclay Street, 12E
New York, New York 10292 New York, New York 10286
(212) 809-6631 Attention: Corporate Trust
(Address, Including Zip Code, and (212) 815-5728
Telephone Number, (Address, Including Zip Code, and
Including Area Code, of Registrant's Telephone Number,
Principal Executive Offices) Including Area Code, of Registrant's
Principal Executive Offices)
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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)
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Copies to:
Michael A. King, Esq.
Brown & Wood llp
One World Trade Center
New York, New York 10048
(212) 839-5546
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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. |_|
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------- -------------------- --------------------- --------------------- ------------------
Proposed Maximum Proposed Maximum Amount Of
Title Of Each Class Of Securities Amount To Be Offering Aggregate Offering Registration Fee
To Be Registered Registered (1) Price Per Unit Price (2) (3)
- --------------------------------------- -------------------- --------------------- --------------------- ------------------
<S> <C> <C> <C> <C>
Residual Class of Receipts on
Corporate Securities, Series CHR $57,830,000 Not Applicable $14,833,437 $4,124
1998-1
======================================= ==================== ===================== ===================== ==================
</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) $4,375.86 has been previously transmitted to the designated lockbox at
Mellon Bank.
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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 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
$57,830,000
aggregate certificate principal balance of
Residual 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 $57,830,000 aggregate certificate
principal balance of our Residual 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 Residual Class Certificates (the "Old Certificates"), which were
issued in a private placement.
The New Certificates
o 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
o Expires 5:00 p.m. New York City time, on ___________, 1998, unless
extended.
o Not conditioned upon any minimum certificate principal balance of the Old
Certificates being tendered for exchange.
o 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.
o We will exchange all Old Certificates that you validly tender and do not
withdraw.
o You may withdraw any Old Certificates that you tender at any time prior to
the expiration of the exchange offer.
o The exchange of the Old Certificates for New Certificates will not be a
taxable exchange.
o 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 11.
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.
TABLE OF CONTENTS
Page
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Where You Can Find More Information..........................................4
Summary......................................................................5
Risk Factors................................................................11
Use of Proceeds.............................................................13
Formation of the Trust......................................................13
Description of the Trust Assets.............................................13
The Exchange Offer..........................................................18
Description of the New Certificates.........................................24
Description of the Base Trust Agreement.....................................30
Certain U.S. Federal Income Tax Consequence.................................33
ERISA Considerations........................................................38
Plan of Distribution........................................................39
Legal Matters...............................................................40
Appendix A -- Allocation Schedule..........................................A-1
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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:
----
o 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
o 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.
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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 $57,830,000
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
$500,000 and integral multiples of $1.00 in
excess of $500,000.
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 on 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 $57,830,000 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
an "Amortizing 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 Your New Certificates will accrete principal at
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
Shortened Maturity Redemption or an In-Kind
Distribution, on each Scheduled Distribution
Date commencing February 1, 2019 through August
1, 2097, your New Certificates will receive,
from distributions of interest on the CHR
Debentures, if any, a distribution of interest
on the then outstanding principal amount of New
Certificates at a rate of 7.40% per annum.
Subject to the occurrence of an Optional
Redemption, a Shortened Maturity Redemption or
an In-Kind Distribution, on August 1, 2097 your
New Certificates will receive, from distributions
of principal on the CHR Debentures, if any, a
return of principal. Your New 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.
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
o shorten the maturity of the CHR Debentures or
o 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 of you that holds 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 a Residual Class Certificate, you
must deliver to the Trustee a certification that
the new beneficial owner of the certificate is
either
o a United States person or
o 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 Residual
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 $500,000 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."
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
o Chrysler or the CHR Debentures,
o any risk factors relating to Chrysler or the CHR Debentures or
o 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 Residual Class Certificates are not scheduled to receive any
distributions before February 1, 2019. Potentially, the maturity and yield of
the New Certificates could be affected by
o a cash distribution to you upon a maturity shortening redemption or an
optional redemption or
o 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
o will receive your respective shares of the redemption price, including
principal and accrued and unpaid interest, without premium and
o 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
o will receive your respective shares of the redemption price, including
principal and accrued and unpaid interest, without premium and
o 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,
o the Trustee will make an In-Kind Distribution of CHR Debentures to you
and holders of Amortizing Class Certificates,
o you will receive your share of the CHR Debentures pursuant to a
distribution ratio and
o the distribution may be treated in whole or in part as equivalent to a
taxable sale or exchange.
Upon a payment default, acceleration or change in reporting status after
August 1, 2018,
o the Trustee will make an In-Kind Distribution of CHR Debentures to you.
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 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 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.
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 $500,000 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.
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 $500,000 Certificate Principal Balance and integral
multiples of $1.00 in excess thereof.
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.
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 Residual Class Certificates
Each registered holder of a Residual 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").
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.
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*
<TABLE>
<CAPTION>
DISTRIBUTION JUST PRIOR DISTRIBUTION JUST AFTER
TO INTEREST PAYMENT INTEREST PAYMENT
---------------------------- -----------------------------
Amortizing Residual Amortizing Residual
Date Class Class Class Class
- --------------------- ------------- ------------- -------------- -----------
<S> <C> <C> <C> <C>
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%
</TABLE>
* 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.
==============================================================================
$57,830,000
Receipts on Corporate
Securities Trust, Series CHR 1998-1
Offer to Exchange
Receipts on Corporate Securities,
Series CHR 1998-1, Residual 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, Residual Class
____________, 1998
===============================================================================
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, Residual 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.
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
- --------------------- (Principal Executive Officer)
Jeffrey J. Theodorou
/s/William J. Horan Chief Financial Officer
- --------------------- (Principal Financial and Accounting
William J. Horan 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
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Description
- ------- -------------------
<S> <C>
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, Residual 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.
</TABLE>
* 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:
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.
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
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.
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.
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.
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.
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.
Section 6.1. Corporate Seal................................................9
VII Fiscal Year.
Section 7.1. Fiscal Year...................................................9
VIII.Amendments.
Section 8.1. Amendments....................................................9
IX...Action without a Meeting.
Section 9.1. Action without a Meeting......................................9
X....Indemnification.
Section 10.1. Indemnification.............................................10
XI...Waiver of Notice.
Section 11.1. Waiver of Notice of Meetings of Stockholders, Directors
and Committees..............................................12
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 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 Residual Class Certificate]
NUMBER Certificate Principal Balance $____________
R-___ Aggregate Certificate Principal Balance _____________
CUSIP NO. _____________
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.
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 EITHER A U.S. PERSON OR A NON-U.S.
PERSON EXEMPT FROM WITHHOLDING UNDER U.S. FEDERAL INCOME TAX LAWS.
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.
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
(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.
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.
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
================================================================================
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
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.
* * * * *
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
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.
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.
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
(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.
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.
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)
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 identical percentage of
the respective Aggregate Certificate Principal Balance of all outstanding
Amortizing Class Certificates and Residual Class Certificates issued by
the Trust.
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.
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.
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.
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
(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.
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.
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)
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>
<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>
[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.
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>
<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>
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.
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.
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
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.
</TABLE>
<TABLE>
<CAPTION>
Schedule 2
AMORTIZING CLASS CERTIFICATES
SCHEDULE OF AMORTIZING PAYMENTS*
DATE INTEREST PAYMENT PRINCIPAL PAYMENT TOTAL CASHFLOW REMAINING 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 1,177,868.70 961,841.30 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
</TABLE>
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 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.
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 /s/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.
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
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.
THE BANK OF NEW YORK
SIGNING AUTHORITIES (Continued)
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.
THE BANK OF NEW YORK
SIGNING AUTHORITIES (Continued)
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.
THE BANK OF NEW YORK
SIGNING AUTHORITIES (Continued)
Code Explanation
- ---- -----------
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.
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.
THE BANK OF NEW YORK
SIGNING AUTHORITIES (Continued)
Code Explanation
- ---- -----------
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.
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.
THE BANK OF NEW YORK
SIGNING AUTHORITIES (Continued)
Code Explanation
- ---- -----------
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.
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>
THE BANK OF NEW YORK
SIGNING AUTHORITIES (Continued)
<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)
---------------------
Residual 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.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
Name Address
- -------------------------------------------------------------------------------------------------------------
<S> <C>
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
</TABLE>
(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 Amount
ASSETS in Thousands
Cash and balances due from
depository 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............................. 972,453
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
subsidiaries 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
Securities sold under agreements
to repurchase....................... 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
exeCuted 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 51,233
securities..........................
Cumulative foreign currency
translation 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,
Residual 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,
Residual 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 $57,830,000
Certificate Principal Balance of Receipts of Corporate Securities, Series CHR
1998-1, Residual Class (the "New Certificates") for an equal Certificate
Principal Balance of the outstanding Receipts of Corporate Securities, Series
CHR 1998-1, Residual 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 $500,000 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 nstructions 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)
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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)
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(Please Type or Print)
Address:_____________________________
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(Including Zip Code)
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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)
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PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS)
(Complete accompanying Substitute Form W-9)
Dated:____________________________________________________, 1998
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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):___________________________________________________________________
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(Please Type or Print)
Capacity:___________________________________________________________________
Address:____________________________________________________________________
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(Including Zip Code)
SIGNATURE GUARANTEE
(if required by Instruction 3)
Signature(s) Guaranteed by
an Eligible Institution:_______________________________________________________
(Authorized Signature)
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(Title)
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(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, Residual 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, Residual
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 $500,000 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
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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
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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________________
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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.
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YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART 2 OF SUBSTITUTE FORM W-9
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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________________
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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:__________________________________
