As filed with the Securities and Exchange Commission on February 8, 1999
Registration No. 333-68497
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
POST-EFFECTIVE AMENDMENT NO. 1
to
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
<TABLE>
<S> <C>
PRUDENTIAL SECURITIES STRUCTURED ASSETS, INC. RECEIPTS ON CORPORATE SECURITIES
(Exact Name of Registrant as Specified in its TRUST, SERIES CHR 1998-1
Charter) (Exact Name of Registrant as Specified in its Trust
DELAWARE Agreement)
(State of Incorporation) NEW YORK
6799 (State of Incorporation)
(Primary Standard Industrial 6733
Classification Code Number) (Primary Standard Industrial)
31-0944462 Classification Code Number)
(I.R.S. Employer Identification No.) N/A
ONE NEW YORK PLAZA (I.R.S. Employer Identification No.)
14TH FLOOR C/O THE BANK OF NEW YORK
NEW YORK, NEW YORK 10292 101 BARCLAY STREET, 12E
(212) 809-6631 NEW YORK, NEW YORK 10286
(Address, Including Zip Code, and Telephone Number, ATTENTION: CORPORATE TRUST
Including Area Code, of Registrant's Principal (212) 815-5728
Executive Offices) (Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal
Executive Offices)
</TABLE>
---------------------
Felicia Smith, Esq.
Prudential Securities Incorporated
One Seaport Plaza
New York, New York 10292
(212) 214-6324
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)
---------------------
COPIES TO:
Michael A. King, Esq.
Brown & Wood LLP
One World Trade Center
New York, New York 10048
(212) 839-5546
---------------------
<PAGE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO
THE PUBLIC: As soon as practicable after this Post-Effective Amendment 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. / /
THIS POST-EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE UPON THE ORDER OF THE COMMISSION PURSUANT TO SECTION 8(C) OF THE
SECURITIES ACT OF 1933, AS AMENDED.
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
==============================================================================================================================
Title Of Each Amount Proposed Proposed Amount Of
Class Of Securities To Be Maximum Offering Maximum Aggregate Registration
To Be Registered Registered (1) Price Per Unit Offering Price (2) Fee (3)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Amortizing Class of Receipts on
Corporate Securities, Series CHR 1998-1 $48,096,190 Not Applicable $47,633,067 $13,242
==============================================================================================================================
</TABLE>
(1) Certificate Principle Balance.
(2) Estimated solely for the purpose of calculating the registration fee, which
was computed pursuant to Rule 457(f) under the Securities Act of 1933, as
amended, based on the book value of the Securities being registered.
(3) $14,051.75 has been previously transmitted to the designated lockbox at
Mellon Bank.
---------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED FEBRUARY 8, 1999
PROSPECTUS
EXCHANGE OFFER
FOR UP TO
$48,096,190
AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF
AMORTIZING CLASS CERTIFICATES
A CLASS OF RECEIPTS ON CORPORATE SECURITIES, SERIES CHR 1998-1,
RELATING TO $57,830,000 AGGREGATE PRINCIPAL AMOUNT
OF CHRYSLER CORPORATION 7.40% DEBENTURES
DUE AUGUST 1, 2097
THE EXCHANGE OFFER
We hereby offer to exchange up to $48,096,190 aggregate certificate
principal balance of our Amortizing Class Certificates (the "New Certificates"),
which are covered by a registration statement under the Securities Act of 1933,
as amended (the "Securities Act"), for an equal principal balance of our
outstanding Amortizing Class Certificates (the "Old Certificates"), which were
issued in a private placement.
THE NEW CERTIFICATES
- - The New Certificates that we will exchange for your Old Certificates will
be identical in all material respects to your Old Certificates, except for
certain restrictions on transferring the Old Certificates.
TERMS OF THE EXCHANGE OFFER
- - Expires 5:00 p.m. New York City time, on ___________, 1999, unless
extended.
- - Not conditioned upon any minimum certificate principal balance of the Old
Certificates being tendered for exchange.
- - Subject only to certain customary conditions and a requirement that the
exchange offer not violate applicable law or interpretations of the
Securities and Exchange Commission.
- - We will exchange all Old Certificates that you validly tender and do not
withdraw.
- - You may withdraw any Old Certificates that you tender at any time prior to
the expiration of the exchange offer.
- - The exchange of the Old Certificates for New Certificates will not be a
taxable exchange.
- - We began mailing these prospectuses (and letters of transmittal) on
________, 1999.
AS USED HEREIN, "CHRYSLER" REFERS TO CHRYSLER CORPORATION AND ITS SUCCESSORS,
PURSUANT TO THE TERMS OF THE CHR DEBENTURES INDENTURE (AS DEFINED HEREIN).
YOUR TENDERING OF OLD CERTIFICATES FOR THE NEW CERTIFICATES INVOLVES CERTAIN
RISKS. SEE "RISK FACTORS" BEGINNING ON PAGE 9.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES OR PASSED UPON THE
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION. WE URGE YOU TO READ THIS PROSPECTUS AND THE RELATED LETTER OF
TRANSMITTAL CAREFULLY BEFORE DECIDING WHETHER TO TENDER YOUR OLD CERTIFICATES
PURSUANT TO THE EXCHANGE OFFER.
---------------------
THE DATE OF THIS PROSPECTUS IS __________, 1999.
<PAGE>
TABLE OF CONTENTS
Page
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Where You Can Find More Information..........................................3
Summary......................................................................4
Risk Factors.................................................................9
Use of Proceeds.............................................................11
Formation of the Trust......................................................11
Description of the Trust Assets.............................................11
The Exchange Offer..........................................................16
Description of the New Certificates.........................................22
Description of the Base Trust Agreement.....................................28
Certain U.S. Federal Income Tax Consequences................................32
ERISA Considerations........................................................37
Plan of Distribution........................................................38
Legal Matters...............................................................38
Appendix A - Allocation Schedule...........................................A-1
Appendix B - Amortizing Payment Schedule...................................B-1
---------------------
You should rely only on the information contained or incorporated by
reference in this Prospectus. Neither we nor the Receipts on Corporate
Securities Trust (the "Trust") have authorized any other person to provide you
with different information. If anyone provides you with different or
inconsistent information, you should not rely on it. Neither we nor the Trust
are making an offer to sell these securities in any jurisdiction where the offer
or sale is not permitted. You should assume that the information appearing in
this Prospectus, as well as information we filed previously with the Securities
and Exchange Commission and incorporated by reference, is accurate as of the
date on the front cover of those documents only. Our and the Trust's business,
financial condition, results of operations and prospects may have changed since
that date.
WHERE YOU CAN FIND MORE INFORMATION
We, on the Trust's behalf, will be subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). As a result, we will file reports and other information with the
Securities and Exchange Commission (the "Commission") relating to the Trust. You
may visit the Commission's Public Reference Room in Washington, D.C., New York,
New York or Chicago, Illinois to read and copy any document we file with the
Commission. Please call the Commission at 1-800-SEC-0330 for more information on
its public reference rooms and document copying charges. Our Commission filings
also will be available to you via the Commission's web site at
http://www.sec.gov.
- ------------------
The reports to be filed by us, on the Trust's behalf, primarily will
consist of distribution date statements relating to the distributions made on
the certificates and certain material events regarding the Trust, but not other
financial information or statements. The reports also will refer to the periodic
reports filed by Chrysler Corporation ("Chrysler") and DaimlerChrysler AG
("DaimerChrysler") so long as those entities are reporting companies 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.
333-68497) of which this Prospectus is a part:
- the Base Trust Agreement dated August 28, 1997 between Prudential
Securities Structured Assets, Inc., as depositor, and The Bank of New
York, as trustee, as amended, which was filed on October 24, 1997 as
Exhibit 4.2 to the Registration Statement on Form S-4 filed by
Prudential Securities Structured Assets, Inc. and the Receipts on
Corporate Securities Trust, Series FDX 1997-1, File No. 333-38745 and
- Base Amendment No. 1 dated February 27, 1998 and Amendment No. 2 dated
April 28, 1998, which were filed on May 6, 1998 as Exhibits 4.4 and 4.5,
respectively, to the Registration Statement on Form S-4 filed by
Prudential Securities Structured Assets, Inc. and the Receipts on
Corporate Securities Trust, Series FDX 1997-1, File No. 333-38745.
This Prospectus incorporates documents by reference that have not been
presented nor delivered to you with this Prospectus. You may request a copy of
these documents, at no cost, by contacting us in writing or by telephone at:
c/o Prudential Securities Structured Assets, Inc.
One New York Plaza
14th Floor
New York, New York 10292-2014
(212) 809-6631
Contact Person: Linda Muller
In order to ensure timely delivery of the documents, any request should be
made by _______________, 1999.
SUMMARY
This summary may not contain all the information that may be important to
you. You should read the entire Prospectus, including documents incorporated by
reference, before tendering your Old Certificates for exchange.
THE EXCHANGE OFFER
Who we are We are Prudential Securities Structured Assets, Inc.
Our main role in this transaction is that of depositor
and issuer. This means that we formed the Trust and
deposited with it the Chrysler debentures. The
Chrysler debentures continue to be held by the Trust
for your benefit.
What we are Offering
to Exchange We are offering to exchange up to $48,096,190
aggregate certificate principal balance of New
Certificates for an equal amount of Old Certificates.
You may tender either all or a portion of your Old
Certificates, provided that you tender them in minimum
denominations of $250,000 and integral multiples of
$1.00 in excess of $250,000.
Purpose of
the Exchange Offer The purpose of the exchange offer is to satisfy our
obligations under a registration rights agreement into
which we entered when we issued the outstanding
Chrysler Certificates. See "The Exchange Offer--Terms
of the Exchange Offer."
Resale of the New
Certificates In making this exchange offer, we are relying on
certain letters issued by the staff of the
Commission's Division of Corporation Finance to third
parties. Our legal counsel's interpretation of these
letters is that the New Certificates may be offered
for resale, resold or otherwise transferred by you
without regard to the registration and prospectus
delivery requirements of the Securities Act. For you
to rely on these no-action letters, you must (i) not
be an affiliate of ours, (ii) have acquired the New
Certificates in the ordinary course of your business,
(iii) not have any arrangement or understanding with
any person to participate in a distribution of the New
Certificates and (iv) not have purchased the Old
Certificates directly from the Trust to resell
pursuant to Rule 144A or any other available exemption
from the Securities Act. See "The Exchange
Offer--Terms of the Exchange Offer."
Consequences of Failure
to Exchange Old
Certificates If you hold Old Certificates and do not participate in
the exchange offer, then your registration rights
would terminate at the expiration of the exchange
offer. As a result, you will not be able to offer for
sale or sell your Old Certificates unless you register
the Old Certificates under the Securities Act or meet
an exemption from registration. See "Risk Factors --
Risk Factors Relating to the Certificates and the
Exchange Offer -- Consequences of Failure to
Exchange."
When the Exchange
Offer Expires The exchange offer will expire at 5:00 p.m., New York
City time, on __________, 1999 (30 calendar days
following the commencement of the exchange offer)
unless it is extended.
Conditions to the
Exchange Offer Except for the requirements of applicable federal and
state securities laws, there are no other federal or
state regulatory requirements with which we or the
Trust must comply in connection with this exchange
offer. The exchange offer is not conditioned upon your
tendering any minimum aggregate amount of Old
Certificates. However, the exchange offer is subject
to certain customary conditions, which may be waived
by the Trust. See "The Exchange Offer--Conditions."
How to Tender your
Old Certificates You can accept the exchange offer by completing,
signing and dating the "Letter of Transmittal." You
must then deliver the Letter of Transmittal, along
with the Old Certificates and any other required
documentation, to the Exchange Agent at the address
set forth below. See "The Exchange Offer--Procedures
for Tendering."
You have the Right to
Withdraw your Tender You may withdraw your tender at any time before the
expiration date. To properly withdraw your tender you
must deliver a notice of withdrawal to the Exchange
Agent at the address set forth below. See "The
Exchange Offer--Procedures for Tendering."
Guaranteed Delivery
Procedures If you wish to tender your Old Certificates but they
are not immediately available, or you cannot deliver
them together with the Letter of Transmittal prior to
the expiration date, then you may use the guaranteed
delivery procedures set forth in "The Exchange
Offer--Guaranteed Delivery Procedures."
When you Receive the
New Certificates All New Certificates will be delivered to you after
the expiration date and once the Old Certificates are
accepted. Any and all Old Certificates will be
accepted, subject to certain conditions, at any time
prior to the expiration date. See "The Exchange
Offer--Terms of the Exchange Offer."
Your U.S. Federal Income
Tax Considerations The exchange offer is not considered a sale, exchange
or other taxable event. See "Certain U.S. Federal
Income Tax Consequences--Exchange of Old Certificates
for New Certificates."
Exchange Agent The Trustee is the "Exchange Agent." The Trustee's
address and telephone and facsimile numbers are set
forth below in "The Exchange Offer--Exchange Agent."
Fees and Expenses We will bear all costs associated with the
consummation of the exchange offer and compliance with
the Registration Rights Agreement. See "The Exchange
Offer--Fees and Expenses."
How we will
Use the Proceeds Neither we nor the Trust will receive any cash
proceeds as a result of the exchange offer. The
proceeds from the sale of the Old Certificates were
applied to the purchase of the Chrysler 7.40%
Debentures due August 1, 2097 (the "CHR Debentures")
and to pay issuance costs. See "Use of Proceeds."
THE NEW CERTIFICATES
Securities that
we are Offering We will issue up to $48,096,190 aggregate certificate
principal balance of New Certificates under the
Securities Act. The New Certificates will be issued
under the same base trust agreement that covers the
Old Certificates. Subject to the occurrence of certain
events, the New Certificates (together with a
"Residual Class" of certificates offered by a separate
prospectus) will constitute the entire beneficial
ownership of the Receipts on Corporate Securities
Trust, Series CHR 1998-1.
The New Certificates are identical in all material
respects to the terms of the Old Certificates, except
the New Certificates are not subject to certain
transfer restrictions that apply to the Old
Certificates.
See "Description of the Trust Assets," "The Exchange
Offer--Terms of the Exchange Offer" and "Description
of the New Certificates."
Distribution on the
New Certificates February 1 and August 1 of each year, or if such day
is not a distribution business day, then on the
immediately following distribution business day,
commencing August 1, 1998 and ending August 1, 2018.
Payment on your certificates, however, shall be
subject to the receipt of the corresponding interest
payments on the CHR Debentures.
See "Description of the New Certificates--General" and
"--Collections and Distributions on New Certificates."
Redemption
Optional Redemption Chrysler, at its option, may redeem all or a portion
of the CHR Debentures under certain circumstances and
for a specified redemption price.
See "Description of the New Certificates--Optional
Redemption of CHR Debentures."
Maturity Shortening
Redemption Upon the occurrence of certain tax-related events,
Chrysler has the right to
- shorten the maturity of the CHR Debentures or
- redeem the CHR Debentures in whole (but not in
part) for a specified redemption price.
Such a maturity shortening might increase the amount
of original issue discount required to be included in
your ordinary gross income.
See "Description of the New Certificates--Maturity
Shortening Redemption" and "Certain U.S. Federal
Income Tax Consequences--Purchase and Holding of Trust
Certificates."
In-Kind Distribution If a payment default, acceleration or change in
reporting status occurs on or before August 1, 2018,
then the Trustee will make an "In-Kind Distribution"
of the CHR Debentures to those of you who hold either
Amortizing or Residual Class Certificates. A payment
default, acceleration or change in reporting occurring
after August 1, 2018 will cause an In-Kind
Distribution to be made to the Residual Class only.
The distribution would be made according to a
distribution ratio calculated by a calculation agent.
See "Description of the New Certificates--Optional
Redemption of CHR Debentures." After distribution,
your certificates would be cancelled.
An In-Kind Distribution would terminate any future
distributions by the Trustee to you. Rather, any
future distributions would be made by Chrysler to
those of you who hold CHR Debentures after the In-Kind
Distribution. See "Description of New
Certificates--Distribution of CHR Debentures on
Payment Default, Acceleration or Change in Reporting
Status."
In addition, the In-Kind Distribution could be treated
in whole or in part as the equivalent of a taxable
sale or exchange. See "Certain U.S. Federal Income Tax
Consequences--Distributions."
Exchange of Certificates
for CHR Debentures Commencing August 1, 1999 and terminating February 1,
2018, any of you that holds both Amortizing Class
Certificates and Residual Class Certificates (or, if
on or after August 1, 2018, any holder of Residual
Class Certificates) will have the right on any
Scheduled Distribution Date, on not less than 30 nor
more than 45 days prior written notice to the Trustee,
to exchange certificates of both classes (or, if on or
after August 1, 2018, of Residual Class Certificates)
for CHR Debentures. See "Description of the New
Certificates--Exchange of Certificates for CHR
Debentures."
Record Dates The 15th day immediately preceding each distribution
date.
Denominations The New Certificates will be denominated and payable
in U.S. dollars. They will be issued in definitive,
fully-registered form in minimum denominations of
$250,000 certificate principal balance and integral
multiples of $1.00 in excess thereof.
Your U.S. Federal
Income Tax Consequences Although the characterization of the Trust is not
certain, the Trust should be treated for U.S. federal
income tax purposes as a grantor trust, and the
Trustee intends to report income, gain, loss and
deductions to the Internal Revenue Service ("IRS") on
that basis. If the Trust were not classified as a
grantor trust, then it would be classified as a
partnership. In either event, the Trust will not be
subject to U.S. federal income taxation.
Under the grantor trust characterization, assuming the
CHR Debentures are treated as debt for U.S. federal
income tax consequences, each of you will be treated
as owning the rights to those payments on the CHR
Debentures that are allocable to your certificate(s)
and will be taxed under the "stripped bond" rules of
the Internal Revenue Code of 1986, as amended (the
"Code"). Under those rules, you will be required to
include in ordinary gross income original issue
discount income based on your yield to maturity for
the certificate.
See "Certain U.S. Federal Income Tax Consequences."
Ratings The New Certificates at issuance will be rated "A2" by
Moody's Investors Service, Inc. and "A" by Standard &
Poor's Rating Services.
A security rating is not a recommendation to buy, sell
or hold securities and may be subject to revision or
withdrawal at any time by the assigning rating
organization.
No Further Rule
3a-7 Limitation As a result of the rating assigned to the New
Certificates, they will not be subject to certain
restrictions on transfer that originally were
applicable to the Old Certificates pursuant to Rule
3a-7 under the Investment Company Act of 1940, as
amended.
ERISA Considerations Certain pension, profit sharing or other employee
benefit, or other plans (such as individual retirement
accounts) may be prohibited from investing in the New
Certificates. Investing in the New Certificates may
generate excise tax and other liabilities under the
Employee Retirement Income Security Act of 1974, as
amended, and the Internal Revenue Code of 1986, as
amended. See "ERISA Considerations."
<PAGE>
RISK FACTORS
You should review carefully the information contained elsewhere in this
Prospectus and should especially consider the following risk factors.
LIMITED OBLIGATIONS AND INTERESTS
The New Certificates will not represent an obligation of, or an interest
in, either us or any of our affiliates. Nor will the New Certificates be insured
or guaranteed by any government agency, or by us, the Trustee, any of our or the
Trustee's affiliates, or any other person.
WE HAVE NOT PROVIDED YOU WITH ANY DETAILED INFORMATION ABOUT CHRYSLER OR THE CHR
DEBENTURES
We have not provided you with any detailed information with respect to
- Chrysler or the CHR Debentures,
- any risk factors relating to Chrysler or the CHR Debentures or
- any rights or obligations, legal, financial or otherwise, arising under
or related to the CHR Debentures.
See "Description of the Trust Assets."
EVENTS OF DEFAULT
If there is ever an event of default on the CHR Debentures, then the risk
of loss related to the CHR Debentures lies entirely with you. If a payment
default, acceleration or change in reporting status occurs with respect to
Chrysler or the CHR Debentures, then the Trustee will distribute the CHR
Debentures to you in an In-Kind Distribution. See "Description of the New
Certificates--Distribution of CHR Debentures on Payment Default, Acceleration or
Change in Reporting Status."
An In-Kind Distribution may be treated in whole or in part as equivalent to
a taxable sale or exchange. See "Certain U.S. Federal Income Tax
Consequences--Distributions."
BANKRUPTCY RISKS
The New Certificates are payable solely from payments made on the CHR
Debentures by Chrysler. Chrysler is subject to laws permitting bankruptcy,
moratorium, reorganization or other actions, which, in the event of financial
difficulties of Chrysler, could cause delays in distribution, partial
distribution or non-distribution of payments to you with respect to the New
Certificates. See "Description of the New Certificates--Distribution of CHR
Debentures on Payment Default, Acceleration or Change in Reporting Status."
MATURITY AND REDEMPTION CONSIDERATIONS
The Amortizing Class Certificates are scheduled to receive semiannual
distributions as described in "Description of the New Certificates--Collections
and Distributions on the New Certificates." Potentially, the maturity and yield
of the New Certificates could be affected by
- a cash distribution to you upon a maturity shortening redemption or an
optional redemption or
- a distribution of the CHR Debentures to you upon an In-Kind
Distribution.
In the event of a cash distribution on a shortened maturity date, you
- will receive your respective shares of the redemption price, including
principal and accrued and unpaid interest, without premium and
- may then need to reinvest the distribution at the then-prevailing market
rates rather than receiving scheduled distributions on your
certificate(s).
In the event of a maturity shortening, you might have to increase the
original issue discount required to be included in your ordinary gross income.
In the event of a cash distribution on an optional redemption date, you
- will receive your respective shares of the redemption price, including
principal and accrued and unpaid interest, without premium and
- may then need to reinvest the distribution at the then-prevailing market
rates rather than receiving scheduled distributions on your
certificate(s).
See "Description of the New Certificates--Optional Redemption of CHR
Debentures," "Description of the New Certificates--Maturity Shortening
Redemption" and "Certain U.S. Federal Income Tax Consequences--Purchase and
Holding of Trust Certificates."
Upon a payment default, acceleration or change in reporting status
occurring on or before August 1, 2018,
- the Trustee will make an In-Kind Distribution of CHR Debentures to both
you and holders of Residual Class Certificates,
- you will receive your share of the CHR Debentures pursuant to a
distribution ratio and
- the distribution may be treated in whole or in part as equivalent to a
taxable sale or exchange.
See "Description of the New Certificates--Distribution of CHR Debentures on
Payment Default, Acceleration or Change in Reporting Status" and "Certain U.S.
Federal Income Tax Consequences--Distributions."
PASSIVE NATURE OF THE RECEIPTS ON CORPORATE SECURITIES TRUST, SERIES 1998-1
The Trustee will hold the CHR Debentures for your benefit. The Trust
generally will hold the CHR Debentures to maturity and not dispose of them
regardless of adverse events, financial or otherwise, which may affect Chrysler
or the value of the CHR Debentures. The Trust, however, will surrender the CHR
Debentures pursuant to an In-Kind Distribution to you in exchange for your
certificates.
RISK FACTORS RELATING TO THE CERTIFICATES AND THE EXCHANGE OFFER
Consequences of Failure to Exchange
Those of you who do not exchange your Old Certificates for New Certificates
pursuant to the exchange offer will continue to be subject to the limitations on
transferability applicable to the Old Certificates. This limitation is due to
the fact that the Old Certificates were not issued under an effective
registration statement under the Securities Act. A description of the limitation
can be found on the legend of the Old Certificates.
Resales of the Old Certificates may be made under an effective registration
statement or pursuant to an exemption from the Securities Act and applicable
state securities laws. We do not currently anticipate that we will register
resales of the Old Certificates under the Securities Act. To the extent that Old
Certificates are tendered and accepted in the exchange offer, the trading market
for Old Certificates (if any) could be adversely affected.
Absence of a Public Market for the New Certificates
Prior to the exchange offer, there was no public market for the New
Certificates and it is uncertain whether such a market will develop. In
addition, neither we nor the Trust intends to apply for listing of the New
Certificates on any securities exchange or for quotation of the New Certificates
on The Nasdaq Stock Market's National Market or otherwise. The Trust has been
advised by Prudential Securities that it currently intends to make a market in
the New Certificates, as permitted by applicable laws and regulations, after
consummation of the exchange offer. Prudential Securities is not obligated,
however, to make a market in the New Certificates. Any such market-making
activity may be discontinued at any time without notice and at the sole
discretion of Prudential Securities. There can be no assurance as to the
liquidity of the market for the New Certificates or that any active market for
the New Certificates will develop or continue. If an active market does not
develop or continue, then the market price and liquidity of the New Certificates
may be affected adversely.
USE OF PROCEEDS
There will be no cash proceeds payable to Prudential Securities Structured
Assets, Inc. ("PSSA") or the Receipts on Corporate Securities Trust, Series CHR
1998-1 (the "Trust") from the issuance of the New Certificates pursuant to the
Letter of Transmittal and this Prospectus (together the "Exchange Offer"). PSSA
sold the Old Certificates to Prudential Securities, an affiliate of PSSA, as
initial purchaser. The proceeds from the sale of the Old Certificates were
received by PSSA and were applied to its purchase of the CHR Debentures, which,
after the purchase thereof, were deposited by PSSA in the Trust. PSSA also paid
the issuance costs out of the proceeds from the sale of Old Certificates. PSSA
obtained an intercompany loan from Prudential Securities Group Inc. to the
extent the net proceeds from the sale of the Old Certificates were insufficient
to pay the full purchase price of the CHR Debentures and issuance expenses. Such
intercompany loan was repaid in full from the proceeds of a subsequent sale of
the Amortizing Class Certificates.
FORMATION OF THE TRUST
The Trust was formed under New York law pursuant to the Base Trust
Agreement dated August 28, 1997, as amended by Base Amendment No. 1 dated
February 27, 1998 and Amendment No. 2 dated April 28, 1998, and as supplemented
by the Series CHR 1998-1 Supplement dated June 9, 1998. Concurrently with the
execution and delivery of the Amortizing and Residual Class Certificates (the
"Trust Certificates" or "Certificates"), PSSA deposited the CHR Debentures with
the Trustee. The Trustee, on behalf of the Trust, accepted the CHR Debentures
and delivered the Trust Certificates to PSSA. The Trustee is holding the CHR
Debentures for the benefit of the holders of the Trust Certificates.
DESCRIPTION OF THE TRUST ASSETS
The assets of the Trust consist solely of $57,830,000 aggregate principal
amount of 7.40% Debentures due August 1, 2097 issued by Chrysler and having the
characteristics described in the CHR Debentures Prospectus. The CHR Debentures
were originally issued by Chrysler on July 15, 1997 as part of an underwritten
public offering of $500,000,000 aggregate principal amount of such securities
(CUSIP No. 171196AT5) pursuant to a registration statement on Form S-3 (File No.
333-21589) (together with all amendments and exhibits thereto, the "CHR
Debentures Registration Statement"), filed by Chrysler, with the Commission
under the Securities Act. Payments of interest are required to be made on the
CHR Debentures semiannually on the first day of each February and August,
commencing February 1, 1998, or if such day is not a business day, on the next
succeeding business day.
The CHR Debentures deposited in the Trust represent the principal assets of
the Trust that are available to make distributions in respect of the Trust
Certificates. Consequently, the ability of holders of New Certificates to
receive cash distributions in respect of the New Certificates in the event of a
Maturity Shortening Redemption will depend on the Trust's receipt of payments
on, or in respect of, the CHR Debentures in such an event.
The CHR Debentures Prospectus states that the CHR Debentures rank pari
passu in right of payment with all existing and future unsecured and
unsubordinated indebtedness of Chrysler. Under the "CHR Debentures Indenture,"
the events of default are as follows: (a) default for more than 30 days in the
payment of any interest; (b) default in the payment of principal of, or premium,
if any, when due; (c) failure to perform or breach of any other covenant or
warranty of CHR in the Indenture with respect to the CHR Debentures, continued
for 90 days after written notice has been given by the Indenture Trustee or the
holders of at least 10% in principal amount of the CHR Debentures, as provided
in the Indenture; (d) acceleration of the maturity of any indebtedness for money
borrowed by CHR of $5,000,000 or more at the time outstanding, if such
acceleration is not rescinded or annulled within 10 days after notice by the
Indenture Trustee or the holders of 10% in principal amount of the CHR
Debentures; (e) default in the deposit of any sinking fund payment, when and as
due by the terms of the CHR Debentures; and (f) certain events in bankruptcy,
insolvency or reorganization in respect of Chrysler.
The CHR Debentures may be redeemed by Chrysler prior to maturity. See
"Description of the New Certificates--Optional Redemption of CHR Debentures."
The CHR Debentures are denominated in U.S. dollars and issued in fully
registered form without coupons in denominations of $1,000 and any integral
multiples thereof, unless otherwise specified pursuant to a Resolution of the
Board of Directors. The CHR Debentures were issued in book-entry form only and
are held through participants in the Depository Trust Company.
OPTIONAL REDEMPTION OF CHR DEBENTURES
On or after August 1, 2087, the CHR Debentures may be redeemed prior to
maturity, as a whole or in part, at the option of Chrysler (a "Late Optional
Redemption"), at any time, at a redemption price equal to 100% of the principal
amount being redeemed and together with accrued interest to the date of
redemption (a "Late Optional Redemption Date"). In addition, prior to August 1,
2087, the CHR Debentures may be redeemed, as a whole or in part at any time, at
the option of Chrysler (an "Early Optional Redemption"; as used herein, the term
"Optional Redemption" shall refer to either a Late Optional Redemption or an
Early Optional Redemption, as the context requires), at a redemption price equal
to the greater of (i) 100% of the principal amount being redeemed and (ii) the
sum of the present values of the Remaining Scheduled Payments (as defined below)
of principal and interest thereon discounted to the date of redemption (an
"Early Optional Redemption Date"; as used herein, the term "Optional Redemption
Date" shall refer to either a Late Optional Redemption Date or an Early Optional
Redemption Date, as the context requires) on a semiannual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury Rate (as
defined below) plus 20 basis points together, in either case, with accrued
interest thereon to the date of redemption. The "Treasury Rate" means, with
respect to any redemption date, the rate per annum equal to the semiannual
equivalent yield to maturity (computed as of the second business day immediately
preceding such redemption date) of the Comparable Treasury Issue, assuming a
price for the Comparable Treasury Issue (as defined below) (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price (as
defined below) for such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker (as defined below) that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the Debentures. "Independent Investment
Banker" means one of the Reference Treasury Dealers (as defined below) appointed
by Chrysler.
"Comparable Treasury Price" means, with respect to any redemption date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such business day, (A) the average
of the Reference Treasury Dealer Quotations (as defined below) for such
redemption date after excluding the highest and lowest such Reference Treasury
Dealer Quotations or, (B) if the Trustee obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such Quotations. "Reference
Treasury Dealer Quotations" means, with respect to each Reference Treasury
Dealer and any redemption date, the average, as determined by the Trustee, of
the bid and asked prices for the Comparable Treasury Issue (expressed in each
case as a percentage of its principal amount) quoted in writing to the Trustee
by such Reference Treasury Dealer at 5:00 p.m., on the third business day
preceding such redemption date.
"Reference Treasury Dealer" means each of Salomon Brothers Inc, Chase
Securities Inc., Credit Suisse First Boston Corporation, Goldman, Sachs & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities Inc.,
Morgan Stanley & Co. Incorporated and their respective successors; provided,
however, that if any of the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"), the
Company shall substitute therefor another nationally recognized investment
banking firm that is a Primary Treasury Dealer.
"Remaining Scheduled Payments" means, with respect to each CHR Debenture to
be redeemed, the remaining scheduled payments of the principal thereof and
interest thereon that would be due after the related redemption date but for
such redemption; provided, however, that, if such redemption date is not an
interest payment date with respect to such CHR Debenture, the amount of the next
succeeding scheduled interest payment thereon will be reduced by the amount of
interest accrued thereon to such redemption date.
In the event of an Optional Redemption, the Certificates will be redeemed
on the Optional Redemption Date. In such event, the Trustee will distribute the
payment received on the CHR Debentures on the Optional Redemption Date, to the
holders, if any, of the Amortizing Class Certificates and the Residual Class
Certificates, respectively, in the same ratio as (i) the present value of all
originally scheduled future payments on the Amortizing Class Certificates bears
to (ii) the present value of all originally scheduled future payments on the CHR
Debentures after August 1, 2018, discounted semiannually in each case at a rate
of 7.40% per annum (such ratio being the "Distribution Ratio") to the Optional
Redemption Date. Such ratio will be calculated by the Calculation Agent. In the
case of an Optional Redemption of less than all of the CHR Debentures, the
Trustee will distribute the payment received on the CHR Debentures on the
Optional Redemption Date to the holders, if any, of the Amortizing Class
Certificates and the Residual Class Certificates on the basis of the
Distribution Ratio as of the Optional Redemption Date on a pro rata basis; such
a distribution will result in a reduction (based on the percentage of CHR
Debentures redeemed) of the Residual Class Certificates Certificate Principal
Balance and a recalculation of the Certificate Principal Balance of, and Fixed
Payments (as defined in the Base Trust Agreement) with respect to, the
outstanding Amortizing Class Certificates, if any, based on the remaining CHR
Debentures after such redemption.
MATURITY SHORTENING REDEMPTION
The CHR Debentures Prospectus Supplement states as follows: Chrysler
intends to deduct interest paid on the CHR Debentures for U.S. federal income
tax purposes. However, there have been proposed tax law changes that, among
other things, would have prohibited an issuer from deducting interest payments
on debt instruments with a maturity of more than 40 years. While none of these
proposals have become law, there can be no assurance that similar legislation
affecting Chrysler's ability to deduct interest paid on the CHR Debentures will
not be enacted in the future or that such legislation would not have a
retroactive effective date.
The CHR Debentures Prospectus Supplement states as follows: Upon the
occurrence of a tax event (as defined below in "Description of the New
Certificates--Maturity Shortening Redemption"), Chrysler will have the right to
shorten the maturity of the CHR Debentures to the extent required, in the
opinion of a nationally recognized independent tax counsel experienced in such
matters, so that, after such shortening of the maturity, interest paid on the
CHR Debentures will be deductible for U.S. federal income tax purposes or, if
such counsel is unable to opine definitively as to such a minimum period, the
minimum extent so required as determined in good faith by the Board of Directors
of Chrysler, after receipt of an opinion of such counsel regarding the
applicable legal standards. There can be no assurance that Chrysler would not
exercise its right to shorten the maturity of the CHR Debentures upon the
occurrence of such a tax event or as to the period by which such maturity would
be shortened. In the event that Chrysler elects to exercise its right to shorten
the maturity of the CHR Debentures on the occurrence of a tax event, Chrysler
will mail a notice of shortened maturity to each holder of the CHR Debentures by
first-class mail not more than 60 days after the occurrence of such tax event,
stating the new maturity date of the CHR Debentures. Such notice shall be
effective immediately upon mailing.
The CHR Debentures Prospectus Supplement states as follows: Chrysler
believes that the CHR Debentures constitute indebtedness for U.S. federal income
tax purposes under current law and that the shortening of the maturity of the
CHR Debentures will not be a taxable event to holders. Prospective investors
should be aware, however, that the shortening of the maturity of the CHR
Debentures will be a taxable event to holders if the CHR Debentures are treated
as equity for purposes of U.S. federal income taxation before the maturity is
shortened, assuming that the CHR Debentures of shortened maturity are treated as
debt for such purposes.
The information under this caption is derived solely from the description
of the CHR Debentures contained in the CHR Debentures Prospectus and the CHR
Debentures Prospectus Supplement. An investor may wish to read this Prospectus
in conjunction with (i) the CHR Debentures Prospectus, (ii) the CHR Debentures
prospectus Supplement and (iii) the CHR Debentures Prospectus (ii) the CHR
Debentures Prospectus Supplement and (iii) the CHR Debentures Registration
Statement, of which the CHR Debentures Prospectus is a part. This Prospectus
relates only to the New Certificates offered hereby and does not relate to an
offering of the CHR Debentures. No representation is made by the Trust, the
Trustee or PSSA as to the accuracy or completeness of the information contained
in the CHR Debentures Prospectus, the CHR Debentures Prospectus Supplement or
the CHR Debentures Registration Statement.
CHR DEBENTURES INDENTURE
The CHR Debentures were issued under the CHR Debentures Indenture, dated
March 1, 1985, between Chrysler and Manufacturers Hanover Trust Company, as
Trustee.
MODIFICATION, AMENDMENT AND WAIVER
The CHR Debentures Prospectus states as follows: The CHR Debentures
Indenture permits Chrysler and the Trustee, with the consent of the holders of
66 2/3% in principal amount of each series of debt securities at the time
outstanding thereunder and affected thereby, to execute supplemental indentures
adding any provisions to or changing or eliminating any of the provisions of the
CHR Debentures Indenture or modifying the rights of the holders of debt
securities of each such series, except that no such supplemental indenture may,
without the consent of the holders of each affected series of debt securities,
(a) change the maturity of debt securities of such series or any installment of
interest thereon or reduce the principal amount thereof or premium, if any, or
interest thereon, or (b) reduce the aforesaid percentage of debt securities of
such series, the consent of the holders of which is required for any such
supplemental indenture. Compliance by Chrysler with certain restrictive
covenants may be waived in particular cases with the consent of the holders of
66 2/3% in principal amount of the outstanding debt securities of each series
affected thereby.
The information under this caption is derived solely from the description
of the CHR Debentures contained in the CHR Debentures Prospectus and the CHR
Debentures Prospectus Supplement. An investor may wish to read this Prospectus
in conjunction with (i) the CHR Debenture Prospectus, (ii) the CHR Debentures
Prospectus Supplement and (iii) the CHR Debentures Registration Statement, of
which the CHR Debentures Prospectus is a part. This Prospectus relates only to
the New Certificates offered hereby and does not relate to an offering of the
CHR Debentures. No representation is made by the Trust, the Trustee or PSSA as
to the accuracy or completeness of the information contained in the CHR
Debentures Prospectus, the CHR Debentures Prospectus Supplement or the CHR
Debentures Registration Statement.
CHRYSLER
This Prospectus does not provide information with respect to Chrysler. No
investigation has been made of the financial condition or creditworthiness of
Chrysler or any of its subsidiaries, of the potential affects of the Chrysler
and Daimler-Benz AG merger as reported pursuant to the Form 8-K, dated May 7,
1998, filed by Chrysler with the Commission, or of the ratings on the CHR
Debentures, in connection with the issuance of the New Certificates. PSSA is not
an affiliate of Chrysler. Prospective purchasers of the New Certificates should
consider carefully Chrysler's financial condition and its ability to make
payments in respect of the CHR Debentures. An investor in the Certificates
should obtain and evaluate the same information concerning Chrysler as it would
if it were investing directly in the CHR Debentures. All information contained
in this Prospectus regarding Chrysler is derived from the CHR Debentures
Prospectus. Neither PSSA nor the Trust nor any of their respective affiliates
has participated in the preparation of the CHR Debentures Prospectus, CHR
Debentures Prospectus Supplement or the CHR Debentures Registration Statement,
and takes no responsibility for the accuracy or completeness of the information
provided therein.
DaimlerChrysler, the successor to Chrysler pursuant to Chrysler's merger
with Daimler-Benz, AG, 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 or DaimlerChrysler 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 ____________, 1999 (the "Expiration Date") will be accepted
for exchange. New Certificates of the same class will be issued in exchange for
an equal principal amount of outstanding Old Certificates accepted in the
Exchange Offer. Old Certificates may be tendered only in minimum denominations
of $250,000 certificate principal balance and integral multiples of $1.00 in
excess thereof. This Prospectus, together with the Letter of Transmittal, is
being sent to all registered holders as of _____, 1999. The Exchange Offer is
not conditioned upon any minimum principal amount of Old Certificates being
tendered in exchange. However, the obligation to accept Old Certificates for
exchange pursuant to the Exchange Offer is subject to certain conditions as set
forth herein under "--Conditions."
Old Certificates shall be deemed to have been accepted as validly tendered
when, as and if the Trustee has given oral or written notice thereof to the
Exchange Agent. The Exchange Agent will act as agent for the tendering holders
of Old Certificates for the purposes of receiving the New Certificates and
delivering New Certificates to such holders.
Based on interpretations by the staff of the Commission, as set forth in
no-action letters issued to third parties (the "Exchange Offer No-Action
Letters"), legal counsel has advised that the New Certificates issued pursuant
to the Exchange Offer may be offered for resale, resold or otherwise transferred
by holders thereof (other than a broker-dealer who acquires such New
Certificates directly from PSSA for resale pursuant to Rule 144A under the
Securities Act or any other available exemption under the Securities Act or any
holder that is an "affiliate" of PSSA or the Trust as defined in Rule 405 under
the Securities Act), without compliance with the registration and prospectus
delivery provisions of the Securities Act, provided that such New Certificates
are acquired in the ordinary course of such holders' business and such holders
are not engaged in, and do not intend to engage in, a distribution of such New
Certificates and have no arrangement with any person to participate in a
distribution of such New Certificates. By tendering the Old Certificates in
exchange for New Certificates, each holder, other than a broker-dealer, will
represent to the Trust that (i) it is not an affiliate of PSSA or the Trust (as
defined in Rule 405 under the Securities Act) or a broker-dealer tendering Old
Certificates acquired directly from the Trust or PSSA for its own account; (ii)
any New Certificates to be received by it will be acquired in the ordinary
course of its business; and (iii) it is not engaged in, and does not intend to
engage in, a distribution of such New Certificates and has no arrangement or
understanding to participate in a distribution of the New Certificates. If a
holder of Old Certificates is engaged in or intends to engage in a distribution
of the New Certificates or has any arrangement or understanding with respect to
the distribution of the New Certificates to be acquired pursuant to the Exchange
Offer, such holder may not rely on the applicable interpretations of the staff
of the Commission and must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any secondary resale
transaction. Each broker-dealer that receives New Certificates for its own
account ("Restricted Broker-Dealer") pursuant to the Exchange Offer must
acknowledge that it will deliver a prospectus in connection with any resale of
such New Certificates. The Letter of Transmittal states that by so acknowledging
and by delivering a prospectus, a Restricted Broker-Dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a Restricted Broker-Dealer in connection with resales of New Certificates
received in exchange for Old Certificates where such Old Certificates were
acquired by such Restricted Broker-Dealer as a result of market-making
activities or other trading activities. PSSA has agreed that for a period of one
year it will cause this Prospectus to be made available to any Restricted
Broker-Dealer for use in connection with any such resale. See "Plan of
Distribution."
If (i) PSSA is not required to file an Exchange Offer Registration
Statement with respect to the New Certificates because the Exchange Offer is not
permitted by applicable law or (ii) any holder of Old Certificates shall notify
PSSA within 20 Business Days following the consummation of the Exchange Offer
that (A) such holder was prohibited by law or Commission policy from
participating in the Exchange Offer or (B) such holder may not resell the
Certificates acquired by it in the Exchange Offer to the public without
delivering a prospectus and the prospectus contained in the Exchange Offer
Registration Statement is not appropriate or available for such resales by such
holder or (C) such holder is a broker-dealer and holds Old Certificates acquired
directly from the Trust or PSSA or one of their respective Affiliates, then PSSA
shall (x) cause to be filed, on or prior to 60 days after the date on which PSSA
determines that it is not required to file the Exchange Offer Registration
Statement pursuant to clause (i) above, or 60 days after the date on which PSSA
receives the notice specified in clause (ii) above, a shelf registration
statement pursuant to Rule 415 under the Securities Act (which may be an
amendment to the Exchange Offer Registration Statement (in either event, the
"Shelf Registration Statement") relating to all Old Certificates the holders of
which shall have provided the information required by the Registration Rights
Agreement and shall (y) use its best efforts to cause such Shelf Registration
Statement to become effective within 120 days after the date on which PSSA
becomes obligated to file such Shelf Registration Statement. PSSA shall use its
best efforts to keep the Shelf Registration Statement continuously effective,
supplemented and amended to the extent necessary to ensure that it is available
for sales of Old Certificates by the holders thereof entitled to the benefit of
the Shelf Registration Statement, and to ensure that it conforms with the
requirements of the Registration Rights Agreement, the Securities Act and the
policies, rules and regulations of the Commission as announced from time to
time, for a period of not more than one year following the date on which such
Shelf Registration Statement first becomes effective under the Securities Act or
such shorter period that will terminate when all the Old Certificates covered by
the Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement.
Upon consummation of the Exchange Offer, subject to certain exceptions,
holders of Old Certificates who do not exchange their Old Certificates for New
Certificates in the Exchange Offer will no longer be entitled to registration
rights and will not be able to offer or sell their Old Certificates, unless such
Old Certificates are subsequently registered under the Securities Act (which,
subject to certain limited exceptions, PSSA will have no obligation to do),
except pursuant to an exemption from, or in a transaction not subject to, the
Securities Act and applicable state securities laws. See "Risk Factors--Risk
Factors Relating to the New Certificates and the Exchange Offer."
NEITHER PSSA NOR THE TRUSTEE MAKES ANY RECOMMENDATION TO HOLDERS OF OLD
CERTIFICATES AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ALL OR ANY
PORTION OF THEIR OLD CERTIFICATES PURSUANT TO THE EXCHANGE OFFER. IN ADDITION,
NO ONE HAS BEEN AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF OLD
CERTIFICATES MUST MAKE THEIR OWN DECISION WHETHER TO TENDER PURSUANT TO THE
EXCHANGE OFFER AND, IF SO, THE AGGREGATE AMOUNT OF OLD CERTIFICATES TO TENDER
AFTER READING THIS PROSPECTUS AND THE LETTER OF TRANSMITTAL AND CONSULTING WITH
THEIR ADVISERS, IF ANY, BASED ON THEIR OWN FINANCIAL POSITION AND REQUIREMENTS.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS; TERMINATION
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
______________ (30 calendar days following the commencement of the Exchange
Offer), unless PSSA, in its sole discretion, instructs the Exchange Agent to
extend the Exchange Offer, in which case the term "Expiration Date" shall mean
the latest date to which the Exchange Offer is extended.
In order to extend the Expiration Date, PSSA will notify the Exchange Agent
of any extension by oral or written notice and will cause the Exchange Agent to
notify the holders of the Old Certificates by means of a press release or other
public announcement prior to 9:00 A.M., New York City time, on the next business
day after the previously scheduled Expiration Date. Such announcement may state
that the Trust is extending the Exchange Offer for a specified period of time.
PSSA reserves the right to cause the Trust and the Exchange Agent (i) to
delay acceptance of any Old Certificates, to extend the Exchange Offer or to
terminate the Exchange Offer and not permit acceptance of Old Certificates not
previously accepted if any of the conditions set forth herein under
"--Conditions" shall have occurred and shall not have been waived by PSSA, by
giving oral or written notice of such delay, extension or termination to the
Exchange Agent, or (ii) to cause the Trustee to amend the terms of the Exchange
Offer in any manner deemed by it to be advantageous to the holders of the Old
Certificates. Any such delay in acceptance, extension, termination or amendment
will be followed as promptly as practicable by oral or written notice thereof to
the Exchange Agent. If the Exchange Offer is amended in a manner determined by
PSSA to constitute a material change, PSSA promptly will cause such amendment to
be disclosed in a manner reasonably calculated to inform the holders of the Old
Certificates of such amendment.
Without limiting the manner in which the Exchange Agent may choose to make
public announcement of any delay, extension, amendment or termination of the
Exchange Offer, the Exchange Agent shall have no obligation to publish,
advertise, or otherwise communicate any such public announcement, other than by
making a timely release to an appropriate news agency.
PROCEDURES FOR TENDERING
To tender in the Exchange Offer, a holder must complete, sign and date the
Letter of Transmittal, or a facsimile thereof, have the signatures thereon
guaranteed if required by the Letter of Transmittal, and mail or otherwise
deliver such Letter of Transmittal or such facsimile, together with any other
required documents, to the Exchange Agent prior to the Expiration Date. In
addition, (A) either (i) certificates for such Old Certificates must be received
by the Exchange Agent along with the Letter of Transmittal or (ii) the holder
must comply with the guaranteed delivery procedures described below, and (B) a
certification to the effect that the beneficial owner thereof (whether such
registered holder or the ultimate beneficiary for whom it holds such Old
Certificate(s)) is either (i) a United States person or (ii) a non-United States
person who is exempt from withholding under U.S. federal income tax laws and has
completed, accurately and in a manner reasonably satisfactory to the Trustee or
its agent, an IRS Form W-8 and delivered such Form to the Trustee or its agent
unless such certificate has already been provided to the Trustee in connection
with the purchase of the Old Certificate(s) being tendered and the status of the
beneficial owner has not changed. THE METHOD OF DELIVERY OF OLD CERTIFICATES,
LETTERS OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND
RISK OF THE HOLDERS. IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT
REGISTERED MAIL, PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED, BE USED. IN
ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY. NO
LETTERS OF TRANSMITTAL OR OLD CERTIFICATES SHOULD BE SENT TO PSSA. Delivery of
all documents must be made to the Exchange Agent at its address set forth below.
Holders also may request their respective brokers, dealers, commercial banks,
trust companies or nominees to effect such tender for such holders.
The tender by a holder of Old Certificates will constitute an agreement
between such holder and the Trust in accordance with the terms and subject to
the conditions set forth herein and in the Letter of Transmittal.
Only a holder of Old Certificates may tender such Old Certificates in the
Exchange Offer. The term "holder" with respect to the Exchange Offer means any
person in whose name Old Certificates are registered on the books of the Trustee
or any other person who has obtained a properly completed bond power from the
registered holder.
Any beneficial owner whose Old Certificates are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact such registered holder promptly and instruct such
registered holder to tender on his behalf. If such beneficial owner wishes to
tender on his own behalf, such beneficial owner must, prior to completing and
executing the Letter of Transmittal and delivering his Old Certificates, either
make appropriate arrangements to register ownership of the Old Certificates in
such owner's name or obtain a properly completed bond power from the registered
holder. The transfer of registered ownership may take considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by any member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
a commercial bank or trust company having an office or correspondent in the
United States or an "eligible guarantor" institution within the meaning of Rule
17Ad-15 under the Exchange Act (each an "Eligible Institution") unless the Old
Certificates tendered pursuant thereto are tendered (i) by a registered holder
who has not completed the box entitled "Special Issuance Instructions" or
"Special Delivery Instructions" on the Letter of Transmittal or (ii) for the
account of an Eligible Institution.
If the Letter of Transmittal is signed by a person other than the
registered holder of any Old Certificates listed therein, then such Old
Certificates must be endorsed or accompanied by bond powers and a proxy which
authorizes such person to tender the Old Certificates on behalf of the
registered holder, in each case as the name of the registered holder or holders
appears on the Old Certificates.
If the Letter of Transmittal or any Old Certificates or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and unless waived by the
Trustee, evidence satisfactory to the Trustee of their authority to so act must
be submitted with the Letter of Transmittal.
All questions as to the validity, form, eligibility (including time of
receipt) and withdrawal of the tendered Old Certificates will be determined by
the Trustee in its sole discretion, which determination will be final and
binding. The Trustee reserves the absolute right to reject any and all Old
Certificates not properly tendered or any Old Certificates which, if accepted,
would be, in the opinion of counsel for PSSA, unlawful. The Trustee also
reserves the absolute right to waive any irregularities or conditions of tender
as to particular Old Certificates. The Trustee's interpretation of the terms and
conditions of the Exchange Offer (including the instructions in the Letter of
Transmittal) will be final and binding on all parties. Unless waived, any
defects or irregularities in connection with tenders of Old Certificates must be
cured within such time as the Trustee shall determine. Neither the Trustee nor
PSSA, nor the Exchange Agent nor any other person shall be under any duty to
give notification of defects or irregularities with respect to tenders of Old
Certificates, nor shall any of them incur any liability for failure to give such
notification. Tenders of Old Certificates will not be deemed to have been made
until such irregularities have been cured or waived. Any Old Certificates
received by the Exchange Agent that are not tendered properly and as to which
the defects or irregularities have not been cured or waived will be returned
without cost to such holder by the Exchange Agent to the tendering holders of
Old Certificates, unless otherwise provided in the Letter of Transmittal, as
soon as practicable following the Expiration Date.
In addition, PSSA reserves the right in its sole discretion (i) to purchase
or make offers for any Old Certificates that remain outstanding subsequent to
the Expiration Date or, as set forth under "--Conditions," to terminate the
Exchange Offer in accordance with the terms of the Registration Rights Agreement
and (ii) to the extent permitted by applicable law, to purchase Old Certificates
in the open market, in privately negotiated transactions or otherwise. The terms
of any such purchases or offers could differ from the terms of the Exchange
Offer.
ACCEPTANCE OF OLD CERTIFICATES FOR EXCHANGE; DELIVERY OF NEW CERTIFICATES
Upon satisfaction or waiver of all of the conditions to the Exchange Offer,
all Old Certificates properly tendered will be accepted promptly after the
Expiration Date, and the New Certificates will be issued promptly after
acceptance of the Old Certificates. For purposes of the Exchange Offer, Old
Certificates shall be deemed to have been accepted as validly tendered for
exchange when, as and if the Trustee has given oral or written notice thereof to
the Exchange Agent.
In all cases, issuance of New Certificates for Old Certificates that are
accepted for exchange pursuant to the Exchange Offer will be made only after
timely receipt by the Exchange Agent of certificates for such Old Certificates,
a properly completed and duly executed Letter of Transmittal and all other
required documents. If any tendered Old Certificates are not accepted for any
reason set forth in the terms and conditions of the Exchange Offer or if Old
Certificates are submitted for a greater principal amount than the holder
desires to exchange, then such unaccepted or unexchanged Old Certificates will
be returned without expense to the tendering holder thereof as promptly as
practicable after the expiration or termination of the Exchange Offer.
GUARANTEED DELIVERY PROCEDURES
If a registered holder of the Old Certificates desires to tender such Old
Certificates, and the Old Certificates are not immediately available, or time
will not permit such holder's Old Certificates or other required documents to
reach the Exchange Agent before the Expiration Date, then a tender may be
effected if (i) the tender is made by or through an Eligible Institution, (ii)
prior to the Expiration Date, the Exchange Agent receives from such Eligible
Institution a properly completed and duly executed Letter of Transmittal (or a
facsimile thereof) and Notice of Guaranteed Delivery, substantially in the form
provided by PSSA (by facsimile transmission, mail or hand delivery), setting
forth the name and address of the holder of Old Certificates and the amount of
Old Certificates tendered, stating that the tender is being made thereby and
guaranteeing that within three New York Stock Exchange (the "NYSE") trading days
after the date of execution of the Notice of Guaranteed Delivery, the
certificates for all physically tendered Old Certificates, in proper form for
transfer, and any other documents required by the Letter of Transmittal will be
deposited by the Eligible Institution with the Exchange Agent and (iii) the
certificates for all physically tendered Old Certificates, in proper form for
transfer, and all other documents required by the Letter of Transmittal are
received by the Exchange Agent within three NYSE trading days after the date of
execution of the Notice of Guaranteed Delivery.
WITHDRAWAL OF TENDERS
Tenders of Old Certificates may be withdrawn at any time prior to the
Expiration Date.
For a withdrawal to be effective, a written notice of withdrawal must be
received by the Exchange Agent prior to the Expiration Date at one of the
addresses set forth below under "Exchange Agent." Any such notice of withdrawal
must specify the name of the person having tendered the Old Certificates to be
withdrawn, identify the Old Certificates to be withdrawn (including the
principal amount of such Old Certificates) and (where certificates for Old
Certificates have been transmitted) specify the name in which such Old
Certificates are registered, if different from that of the withdrawing holder.
If certificates for Old Certificates have been delivered or otherwise identified
to the Exchange Agent, then, prior to the release of such certificates, the
withdrawing holder also must submit the serial numbers of the particular
certificates to be withdrawn and a signed notice of withdrawal with signatures
guaranteed by an Eligible Institution unless such holder is an Eligible
Institution. All questions as to the validity, form and eligibility (including
time of receipt) of such notices will be determined by the Trustee, in its sole
discretion, whose determination shall be final and binding on all parties.
Neither PSSA, the Trust, any affiliates or assigns of PSSA or the Trust, the
Exchange Agent nor any other person shall be under any duty to give any
notification of any irregularities in any notice of withdrawal or incur any
liability for failure to give any such notification. Any Old Certificates so
withdrawn will be deemed not to have been validly tendered for exchange for
purposes of the Exchange Offer. Any Old Certificates which have been tendered
for exchange but which are not exchanged for any reason will be returned to the
holder thereof without cost to such holder as soon as practicable after
withdrawal, rejection of tender or termination of the Exchange Offer. Properly
withdrawn Old Certificates may be tendered again by following one of the
procedures described under "--Procedures for Tendering" above at any time on or
prior to the Expiration Date.
CONDITIONS
Notwithstanding any other term of the Exchange Offer, Old Certificates will
not be required to be accepted for exchange, nor will New Certificates be issued
in exchange for any Old Certificates, and PSSA may cause the Trustee to
terminate or amend the Exchange Offer as provided herein before the acceptance
of such Old Certificates, if because of (i) any change in law, or applicable
interpretations thereof by the Commission or (ii) any stop order issued by the
Commission or any state securities authority suspending the effectiveness of the
Registration Statement, PSSA determines that the Trust is not permitted to
effect the Exchange Offer. PSSA has no obligation to, and will not knowingly,
permit acceptance of tenders of Old Certificates by the Trust from affiliates of
PSSA or the Trust (within the meaning of Rule 405 under the Securities Act) or
from any other holder or holders who are not eligible to participate in the
Exchange Offer under applicable law or interpretations thereof by the
Commission, or if the New Certificates to be received by such holder or holders
of Old Certificates in the Exchange Offer, upon receipt, will not be tradable by
such holder without restriction under the Securities Act and the Exchange Act
and without material restrictions under the "blue sky" or securities laws of
substantially all of the states of the United States.
EXCHANGE AGENT
The Trustee has been appointed as Exchange Agent for the Exchange Offer.
Questions and requests for assistance and requests for additional copies of this
Prospectus or of the Letter of Transmittal should be directed to the Exchange
Agent addressed as follows:
By Mail or By Hand:
The Bank of New York
101 Barclay Street, 12E
New York, N.Y. 10286
Attention: Corporate Trust
Telephone: (212) 815-5728
Facsimile: (212) 815-7157
Delivery to other than the above address or facsimile number will not
constitute a valid delivery.
FEES AND EXPENSES
The expenses of soliciting tenders pursuant to the Exchange Offer will be
borne by PSSA on behalf of the Trust pursuant to the Registration Rights
Agreement. The principal solicitation for tenders pursuant to the Exchange Offer
is being made by mail; however, additional solicitations may be made by
telegraph, telephone, telecopy or in person by officers and regular employees or
agents of PSSA on behalf of the Trust.
PSSA will not make any payments to brokers, dealers or other persons
soliciting acceptances of the Exchange Offer. PSSA, however, will pay on behalf
of the Trust the Exchange Agent's reasonable and customary fees for its services
and will reimburse the Exchange Agent for its reasonable out-of-pocket expenses
in connection therewith. PSSA also may pay on behalf of the Trust, the
reasonable out-of-pocket expenses incurred by brokerage houses and other
custodians, nominees and fiduciaries in forwarding copies of the Prospectus and
related documents to the beneficial owners of the Old Certificates, and in
handling or forwarding tenders for exchange.
The expenses to be incurred in connection with the Exchange Offer will be
paid by PSSA on behalf of the Trust, including fees and expenses of the Exchange
Agent and Trustee and accounting, legal, printing and related fees and expenses.
PSSA will pay all transfer taxes, if any, applicable to the exchange of Old
Certificates pursuant to the Exchange Offer. If, however, certificates
representing New Certificates or Old Certificates for principal amounts not
tendered or accepted for exchange are to be delivered to, or are to be
registered or issued in the name of, any person other than the registered holder
of the Old Certificates tendered, or if tendered Old Certificates are registered
in the name of any person other than the person signing the Letter of
Transmittal, or if a transfer tax is imposed for any reason other than the
exchange of Old Certificates pursuant to the Exchange Offer, then the amount of
any such transfer taxes (whether imposed on the registered holder or any other
persons) will be payable by the tendering holder. If satisfactory evidence of
payment of such taxes or exemption therefrom is not submitted with the Letter of
Transmittal, then the amount of such transfer taxes will be billed directly to
such tendering holder.
DESCRIPTION OF THE NEW CERTIFICATES
GENERAL
The New Certificates will be denominated and distributions with respect
thereto will be payable in U.S. Dollars. The Trust Certificates represent in the
aggregate the entire beneficial ownership interest in the Trust. The property of
the Trust will consist of (i) the CHR Debentures, (ii) all payments on or
collections in respect of the CHR Debentures received on or after June 9, 1998,
together with any proceeds thereof, and (iii) all funds from time to time
deposited with the Trustee in accounts related to the Trust. The property of the
Trust will be held for the benefit of the holders of the Trust Certificates by
the Trustee. Holders of the New Certificates will receive payments or
distributions on each Distribution Date as described herein. See "--Collections
and Distributions."
The Trust Certificates represent two classes of undivided fractional
beneficial interests in the assets of the Trust, and all distributions to
holders of the Trust Certificates will be made only from the property of the
Trust as described herein. The Trust Certificates do not represent an interest
in or obligation of PSSA, Chrysler, the CHR Debentures Indenture Trustee, the
Trustee, Prudential Securities or any affiliate of any of the foregoing.
Subject to the occurrence of an Optional Redemption, a Maturity Shortening
Redemption or an In-Kind Distribution, distribution of a Fixed Payment on the
Amortizing Class Certificates will be made semiannually on each Scheduled
Distribution Date (or if such date is not a Distribution Business Day (as
defined below), on the next succeeding Distribution Business Day) up to and
including August 1, 2018 in an amount equal to the amount of interest due and
received on the CHR Debentures on such Scheduled Distribution Date. The amount
of interest and principal (the "Total Cashflow") due on the CHR Debentures on
each Scheduled Distribution Date is the product of (i) 7.40%, (ii) 180 divided
by 360 and (iii) $57,830,000 (less the principal amount of any CHR Debentures
redeemed in part upon an Optional Redemption or exchanged for Certificates as
described herein). A "Distribution Business Day" is the first New York Business
Day (as defined below) following the day on which payments on the CHR Debentures
are due. A "New York Business Day" means any day other than a Saturday, Sunday
or legal holiday on which banking institutions or trust companies in New York
City are authorized or obligated by law, regulation or executive order to be
closed.
The aggregate purchase price of Residual Class Certificates represents
25.650% of the face amount of the CHR Debentures. The Residual Class
Certificates will accrete principal at the rate of 6.870% per annum, to a
principal amount of $57,830,000 on August 1, 2018 (assuming that all are still
outstanding on such date). Subject to the occurrence of an Optional Redemption,
a Maturity Shortening Redemption or an In-Kind Distribution, on each Scheduled
Distribution Date commencing February 1, 2019 through August 1, 2097, the
Residual Class Certificates will receive, from distributions of interest on the
CHR Debentures, if any, a distribution of interest on the then outstanding
principal amount of the Residual Class Certificates at a rate of 7.40% per
annum. Subject to the occurrence of an Optional Redemption, a Maturity
Shortening Redemption or an In-Kind Distribution, on August 1, 2097 the Residual
Class Certificates will receive, from distributions of principal on the CHR
Debentures, if any, a return of principal on the Residual Class Certificates.
The Residual Class Certificates will not be entitled to any allocation of
interest accrued under the CHR Debentures until February 1, 2019, including
interest accrued on or before August 1, 2018 which is unpaid as of February 1,
2019.
The aggregate "Certificate Principal Balance" of the Amortizing Class
Certificates initially will be $48,096,190. On any Scheduled Distribution Date,
the aggregate Certificate Principal Balance will be reduced by the positive
difference between (i) the semiannual Fixed Payment made on such Scheduled
Distribution Date and (ii) interest accrued on the aggregate Certificate
Principal Balance at the Yield to Amortizing Class Final Distribution Date from
the prior Scheduled Distribution Date (or, in the case of the initial
Distribution Date, such interest accrued from February 1, 1998). The Certificate
Principal Balance of any Amortizing Class Certificate will represent a pro rata
portion of the then-current aggregate Certificate Principal Balance of all
outstanding Amortizing Class Certificates. In the case of an Optional Redemption
of less than all of the CHR Debentures, upon the distribution of the proceeds
from such Optional Redemption, the Certificate Principal Balance of each
Amortizing Class Certificate shall be reduced by the same percentage as the
percentage of CHR Debentures redeemed.
Scheduled Distributions on the Amortizing Class Certificates will consist
of equal semiannual installments allocable to principal and interest through
August 1, 2018 (each, a "Fixed Payment"). Each Fixed Payment will be allocated
between interest accrued at a per annum rate equal to 6.50% compounded
semiannually (the "Yield to Amortizing Class Final Distribution Date") on the
then-outstanding Certificate Principal Balance of the Amortizing Class
Certificates, and the repayment of principal as set forth in Appendix A attached
hereto. Although payments on the Amortizing Class Certificates are denominated
as principal and interest, the Amortizing Class Certificates generally represent
indirect beneficial ownership of solely the interest payments on the CHR
Debentures on or before August 1, 2018 and will be paid solely from interest
payments on the CHR Debentures; absent an Optional Redemption or a Maturity
Shortening Redemption on or prior to August 1, 2018, the holders of Amortizing
Class Certificates have no right to any portion of the principal payments on the
CHR Debentures. The Amortizing Class Certificates are scheduled to be paid in
full on August 1, 2018 (the "Amortizing Class Final Distribution Date"). The
actual final payment date could occur later in the event of a payment default on
the CHR Debentures, and could occur earlier in the case of an Optional
Redemption, Maturity Shortening Redemption or In-Kind Distribution.
New Certificates may be transferred or exchanged for like Certificates of
the same Class at the corporate trust office or agency of the Trustee in the
City and State of New York, subject to the limitations provided in the Base
Trust Agreement, without the payment of any service charge, other than any tax
or governmental charge payable in connection therewith.
FORM OF THE NEW CERTIFICATES
The New Certificates will be issued in definitive registered form in
minimum denominations of $250,000 Certificate Principal Balance and integral
multiples of $1.00 in excess thereof.
INTEREST ACCRUAL
For each Distribution Date, interest shall accrue on the Amortizing Class
Certificates during the period (the "Interest Accrual Period") commencing on and
including the prior Distribution Date to, but excluding, such Distribution Date,
except that the initial Interest Accrual Period shall commence on February 1,
1998.
The aggregate purchase price of Residual Class Certificates represents
25.650% of the face amount of the CHR Debentures. The Residual Class
Certificates will accrete principal at the rate of 6.870% per annum, to a
principal amount of $57,830,000 on August 1, 2018 (assuming that all are still
outstanding on such date). Subject to the occurrence of an Optional Redemption,
a Maturity Shortening Redemption or an In-Kind Distribution, on each Scheduled
Distribution Date commencing February 1, 2019 through August 1, 2097, the
Residual Class Certificates will receive, from distributions of interest on the
CHR Debentures, if any, a distribution of interest on the then outstanding
principal amount of the Residual Class Certificates at a rate of 7.40% per
annum. Subject to the occurrence of an Optional Redemption, a Maturity
Shortening Redemption or an In-Kind Distribution, on August 1, 2097 the Residual
Class Certificates will receive, from distributions of principal on the CHR
Debentures, if any, a return of principal on the Residual Class Certificates.
The Residual Class Certificates will not be entitled to any allocation of
interest accrued under the CHR Debentures until February 1, 2019, including
interest accrued on or before August 1, 2018 which is unpaid as of February 1,
2019.
Interest will accrue on each Amortizing Class Certificate for each Interest
Accrual Period ending on or prior to the Amortizing Class Final Distribution
Date at the Yield to Amortizing Class Final Distribution Date (such accrued
interest, the "Amortizing Class Periodic Interest"). Except in the case of any
Optional Redemption or Maturity Shortening Redemption, the Amortizing Class
Periodic Interest shall be payable (together with principal on the Amortizing
Class Certificates) on the Scheduled Distribution Dates related to each
applicable Interest Accrual Period.
COLLECTIONS AND DISTRIBUTIONS ON NEW CERTIFICATES
Distributions by the Trustee pursuant to the terms of the Certificates and
the Base Trust Agreement shall be made, subject to timely receipt of payments on
the CHR Debentures and, in the case of cash distributions, solely to the extent
of available funds, as follows:
(i) with respect to the Amortizing Class Certificates, on each
Scheduled Distribution Date through and including August 1, 2018; and
(ii) with respect to the Residual Class Certificates, on each
Scheduled Distribution Date commencing February 1, 2019 through and
including August 1, 2097 (except as provided below);
subject, in each case, to the provisions discussed under "--Optional Redemption
of CHR Debentures," "--Maturity Shortening Redemption" and "--Distribution of
CHR Debentures on Payment Default, Acceleration or Change in Reporting Status."
"Available Funds" means, as of any Scheduled Distribution Date, the
aggregate amount received on or with respect to the CHR Debentures during the
period from the preceding Scheduled Distribution Date up to and including such
Scheduled Distribution Date (each such period, a "Collection Period"), and
deposited in the Collection Account and available for distribution on such
Scheduled Distribution Date.
On each Scheduled Distribution Date, subject to the occurrence of an
In-Kind Distribution, the Trustee will distribute Interest Collections (as
defined below) constituting Available Funds for such Scheduled Distribution Date
to the holders of Amortizing Class Certificates, but only to the extent that
such Interest Collections represent payments due on or prior August 1, 2018.
"Interest Collections" means, with respect to any Scheduled Distribution Date,
all payments received by the Trustee during the Collection Period ending on such
Scheduled Distribution Date, in respect of (i) interest on the CHR Debentures
and (ii) penalties or other amounts, if any, required to be paid by CHR because
of late payments on the CHR Debentures.
If a payment with respect to the CHR Debentures is made to the Trustee
after the CHR Debentures Payment Date on which such payment was due, then the
Trustee will distribute any such amounts received on the first New York Business
Day thereafter as if such funds had constituted Available Funds on the Scheduled
Distribution Date immediately preceding such Business Day; provided, however,
that the Record Date for such distribution shall be fifteen days prior to such
Business Day and no additional amounts will accrue on the Certificates or be
owed to the holders of the Certificates in respect of such distribution.
All amounts received on or with respect to the CHR Debentures shall be held
uninvested by the Trustee. On August 1, 2097, the Trustee will distribute the
remaining Available Funds to the holders of Residual Class Certificates, unless
an Optional Redemption, a Maturity Shortening Redemption, an In-Kind
Distribution or certain circumstances of non-payment by Chrysler has occurred on
or prior to such date.
In the event that PSSA is required to repurchase the CHR Debentures as a
result of a breach of its representation and warranty as to its title to the CHR
Debentures immediately prior to the transfer thereof to the Trustee, the Trustee
will distribute the repurchase price received from PSSA to the holders of the
Amortizing Class Certificates and the Residual Class Certificates on the basis
of the distribution ratio as of the date of such repurchase. Such ratio will be
calculated by the "Calculation Agent," and such distribution will be made
fifteen days after receipt of the repurchase price. See "--Optional Redemption
of CHR Debentures" for a definition of the distribution ratio.
Distributions with respect to New Certificates will be made at the
corporate trust office or agency of the Trustee in the City of New York.
OPTIONAL REDEMPTION OF CHR DEBENTURES
On or after August 1, 2087, the CHR Debentures may be redeemed prior to
maturity, as a whole or in part, at the option of Chrysler (a "Late Optional
Redemption"), at any time, at a redemption price equal to 100% of the principal
amount being redeemed and together with accrued interest to the date of
redemption (a "Late Optional Redemption Date"). In addition, prior to August 1,
2087, the CHR Debentures may be redeemed, as a whole or in part at any time, at
the option of Chrysler (an "Early Optional Redemption"; as used herein, the term
"Optional Redemption" shall refer to either a Late Optional Redemption or an
Early Optional Redemption, as the context requires), at a redemption price equal
to the greater of (i) 100% of the principal amount being redeemed and (ii) the
sum of the present values of the Remaining Scheduled Payments of principal and
interest thereon discounted to the date of redemption (an "Early Optional
Redemption Date"; as used herein, the term "Optional Redemption Date" shall
refer to either a Late Optional Redemption Date or an Early Optional Redemption
Date, as the context requires) on a semiannual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Treasury Rate plus 20 basis points
together, in either case, with accrued interest thereon to the date of
redemption. The "Treasury Rate" means, with respect to any redemption date, the
rate per annum equal to the semiannual equivalent yield to maturity (computed as
of the second business day immediately preceding such redemption date) of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date.
In the event of an Optional Redemption, the Certificates will be redeemed
on the Optional Redemption Date. In such event, the Trustee will distribute the
payment received on the CHR Debentures on the Optional Redemption Date, to the
holders, if any, of the Amortizing Class Certificates and the Residual Class
Certificates, respectively, in the same ratio as (i) the present value of all
originally scheduled future payments on the Amortizing Class Certificates bears
to (ii) the present value of all originally scheduled future payments on the CHR
Debentures after August 1, 2018, discounted semiannually in each case at a rate
of 7.40% per annum (such ratio being the "Distribution Ratio") to the Optional
Redemption Date. Such ratio will be calculated by the Calculation Agent. In the
case of an Optional Redemption of less than all of the CHR Debentures, the
Trustee will distribute the payment received on the CHR Debentures on the
Optional Redemption Date to the holders, if any, of the Amortizing Class
Certificates and the Residual Class Certificates on the basis of the
Distribution Ratio as of the Optional Redemption Date on a pro rata basis; such
a distribution will result in a reduction (based on the percentage of CHR
Debentures redeemed) of the Residual Class Certificates Certificate Principal
Balance and a recalculation of the Certificate Principal Balance of, and Fixed
Payments (as defined in the Base Trust Agreement) with respect to, the
outstanding Amortizing Class Certificates, if any, based on the remaining CHR
Debentures after such redemption. A table showing the percentages of such
distribution that would be distributable to the Amortizing Class Certificates
and Residual Class Certificates, respectively, assuming that such a distribution
date occurs an a Scheduled Distribution Date, is attached hereto as Appendix A.
MATURITY SHORTENING REDEMPTION
Upon the occurrence of a tax event (as defined below) with respect to the
CHR Debentures, Chrysler has the right to shorten the maturity of the CHR
Debentures (i) to the minimum extent required, in the opinion of nationally
recognized independent tax counsel, such that, after the shortening of the
maturity, interest paid on the CHR Debentures will be deductible by Chrysler for
U.S. federal income tax purposes, or (ii) if such counsel is unable to opine
definitively as to such minimum period, the minimum extent so required as
determined in good faith by the Board of Directors of Chrysler after receipt of
an opinion of such counsel regarding the applicable legal standards. Chrysler
also has the right to redeem the CHR Debentures in whole (but not in part), on
not less than 30 nor more than 60 days' notice, if a tax event occurs and a
nationally recognized independent tax counsel opines that there would be,
notwithstanding any shortening of the maturity of the CHR Debentures, more than
an insubstantial risk that interest paid by Chrysler on the CHR Debentures would
not be deductible in whole (or in part) by Chrysler for U.S. federal income tax
purposes. The redemption price available to Chrysler would be equal to the
greater of (i) 100% of the principal amount of the CHR Debentures, plus accrued
interest to the date of redemption or (ii) the sum of the present values of the
remaining scheduled payments of principal and interest thereon discounted to the
date of redemption on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate plus 35 basis points, plus accrued
interest to the date of redemption. Chrysler must exercise its redemption right
within 90 days following the tax event. Any such new maturity date is referred
to herein as the "Shortened Maturity Date." If the Shortened Maturity Date is on
or prior to August 1, 2018, (a) the Amortizing Class Certificates and the
Residual Class Certificates will be redeemed on the Shortened Maturity Date and
(b) the Trustee will distribute the payment received on the CHR Debentures on
the Shortened Maturity Date to the holders of each class of Certificates on the
basis of the Distribution Ratio as of the Shortened Maturity Date; such ratio
will be calculated by the Calculation Agent. If the Shortened Maturity Date is
after August 1, 2018, the Residual Class Certificates would be redeemed on the
Shortened Maturity Date and the Trustee would distribute the payments received
on the CHR Debentures on the Shortened Maturity Date to the holders of such
Certificates. Either such redemption will be referred to herein as a "Maturity
Shortening Redemption." A table showing the percentages of such distribution
that would be distributable to the Amortizing Class Certificates and the
Residual Class Certificates, respectively, assuming that such distribution
occurs on a Scheduled Distribution Date, is attached hereto as Appendix A.
A "Tax Event" means that Chrysler shall have received an opinion of
nationally recognized independent tax counsel to the effect that, as a result of
(a) any amendment to, clarification of, or change (including any announced
prospective amendment, clarification or change) in any law, or any regulation
thereunder, of the United States, (b) any judicial decision, official
administrative pronouncement, ruling, regulatory procedure, notice or
announcement, including any notice or announcement of intent to adopt or
promulgate any ruling, regulatory procedure or regulation (any of the foregoing,
an "Administrative or Judicial Action") or (c) any amendment to, clarification
of, or change in any official position with respect to, or any interpretation
of, an Administrative or Judicial Action or a law or regulation of the United
States that differs from the theretofore generally accepted position or
interpretation, in each case, occurring on or after July 15, 1997, there is more
than an insubstantial increase in the risk that interest paid by Chrysler on the
CHR Debentures is not, or will not be, deductible, in whole or in part, by
Chrysler for U.S. federal income tax purposes.
DISTRIBUTION OF CHR DEBENTURES ON PAYMENT DEFAULT, ACCELERATION OR CHANGE IN
REPORTING STATUS
If a Payment Default or an Acceleration with respect to the CHR Debentures,
or a Change in Reporting Status with respect to Chrysler, occurs, then the
Trustee will make an In-Kind Distribution of the remaining CHR Debentures to the
holders of the Residual Class Certificates and, if still outstanding, the
Amortizing Class Certificates. A "Payment Default" means a default in the
payment of any amount due on the CHR Debentures from Chrysler after the same
becomes due and payable (and the expiration of any applicable grace period on
the CHR Debentures), and such default continues unremedied beyond the period
specified in the CHR Debentures Indenture or other authorizing document for the
CHR Debentures (or if no such period is specified, three days). An
"Acceleration" means the acceleration of the maturity of the CHR Debentures
following the occurrence of any default on the CHR Debentures other than a
Payment Default, notwithstanding any subsequent recission and annulment of such
Acceleration by the requisite holders of the entire series of CHR Debentures. A
"Change in Reporting Status" means that Chrysler is no longer subject to the
informational requirements of the Exchange Act. The In-Kind Distribution will be
made to the holders of Residual Class Certificates and, if still outstanding,
the Amortizing Class Certificates on the basis of the Distribution Ratio as of
such Payment Default, Acceleration or Change in Reporting Status. Such ratio
will be calculated by the Calculation Agent. To the extent necessary to avoid a
distribution of CHR Debentures in unauthorized denominations, the Trustee will
cause the liquidation in a commercially reasonable manner of such CHR Debentures
as are necessary, and will distribute the proceeds therefrom to the holders of
Amortizing Class Certificates and Residual Class Certificates based on their
respective rights to CHR Debentures. A table showing the percentages of such
distribution that would be distributable to the Amortizing Class Certificates
and the Residual Class Certificates, respectively, assuming that such
distribution occurs on a Scheduled Distribution Date, is attached hereto as
Appendix A. If a Payment Default, Acceleration or Change in Reporting Status
occurs after August 1, 2018, then the Trustee will make an In-Kind Distribution
to the holders of the Residual Class Certificates.
EXCHANGE OF CERTIFICATES FOR CHR DEBENTURES
Commencing August 1, 1999, any holder of both Amortizing Class Certificates
and Residual Class Certificates (or, if on or after August 1, 2018, any holder
of Residual Class Certificates) may, by delivery of a notice to the Trustee
substantially in the form of the Notice of Exchange attached to a Certificate (a
"Notice of Exchange") not less than 30 and not more than 45 days prior to any
Scheduled Distribution Date, elect to exchange Certificates of both classes for
CHR Debentures (or on or after August 1, 2018, of Residual Class Certificates)
on such Scheduled Distribution Date (the "Exchange Date"). In order to exercise
such right, the holder shall tender to the Trustee on the Exchange Date
immediately succeeding such notice (i) if the Exchange Date is prior to August
1, 2018, both (a) Amortizing Class Certificates evidencing the percentage
specified in the Notice of Exchange (which shall not be less than 10%) of the
aggregate Certificate Principal Balance of all Amortizing Class Certificates
then outstanding and (b) Residual Class Certificates evidencing the same
percentage of the aggregate Certificate Principal Balance of all Residual Class
Certificates then outstanding or (ii) if the Exchange Date is on or after August
1, 2018, Residual Class Certificates evidencing at least 10% of the aggregate
Certificate Principal Balance of all Residual Class Certificates then
outstanding.
Upon tender of such Certificates, duly endorsed by the holder to the
Trustee, the Trustee shall transfer to the holder (or its designee specified in
the Notice of Exchange) a principal amount of CHR Debentures comprising the same
percentage of the CHR Debentures then held in the Trust as the percentage of
Amortizing Class Certificates and Residual Class Certificates tendered by such
holder on such Scheduled Distribution Date, rounded down to the nearest
authorized denomination of Term Assets. Upon such exchange, the Trustee shall
cancel the tendered Certificates, provided that if the amount of CHR Debentures
delivered to the holder or its designee was rounded down in accordance with the
preceding sentence, the Trustee shall issue to such holder new Certificates of
each class evidencing percentage interests of such class (regardless of whether
such interests would otherwise be authorized denominations) equal to the amount
of such class in excess of the amount accepted for such exchange.
The delivery of a Notice of Exchange shall be irrevocable; provided,
however, that if (i) the proceeds of an Optional Redemption, Shortened Maturity
Redemption or In-Kind Distribution are to be distributed on the Exchange Date to
which such Notice of Exchange relates or (ii) if prior to such Exchange Date,
the Trustee gives notice to holders that the proceeds of an Optional Redemption,
Shortened Maturity Redemption or In-Kind Distribution are scheduled to be
distributed on a date subsequent to such Exchange Date, such Notice of Exchange
shall be automatically deemed canceled and be of no further force and effect.
Any holder tendering Certificates in exchange for CHR Debentures on an
Exchange Date shall be entitled to receive cash distributions otherwise payable
on such Certificates on such Exchange Date.
NO FURTHER RULE 3a-7 LIMITATION
As a result of the rating assigned to the New Certificates, they will not
be subject to certain restrictions on transfer that were originally applicable
to the Old Certificates pursuant to Rule 3a-7 under the Investment Company Act
of 1940, as amended (the "Investment Company Act").
<PAGE>
DESCRIPTION OF THE BASE TRUST AGREEMENT
GENERAL
The following summary of certain provisions of the Base Trust Agreement and
the Trust Certificates does not purport to be complete and such summary is
qualified in its entirety by reference to the detailed provisions of the Base
Trust Agreement incorporated by reference hereto as described under "Where You
Can Find More Information." Article and section references in parentheses below
are to articles and sections in the Base Trust Agreement. Wherever particular
sections or defined terms of the Base Trust Agreement are referred to, such
sections or defined terms are incorporated herein by reference as part of the
statement made, and the statement is qualified in its entirety by such
reference.
THE TRUSTEE
The Bank of New York, a New York banking corporation, acts as trustee of
the Trust pursuant to the Base Trust Agreement. The Trustee's offices are
located at 101 Barclay Street, 12E, New York, New York 10286,
Attention--Corporate Trust.
The Base Trust Agreement provides that the Trustee and any director,
officer, employee or agent thereof will be indemnified by PSSA and held harmless
against any loss, liability or expense incurred in connection with any legal
action relating to the Base Trust Agreement or the Trust Certificates or the
performance of the Trustee's duties under the Base Trust Agreement, other than
any loss, liability or expense (i) that constitutes a specific liability of the
Trustee under the Base Trust Agreement or (ii) incurred by reason of willful
misfeasance, bad faith or negligence in the performance of the Trustee's duties
under the Base Trust Agreement or as a result of a breach, or by reason of
reckless disregard, of the Trustee's obligations and duties under the Base Trust
Agreement. Pursuant to the Base Trust Agreement, as compensation for the
performance of its duties thereunder, the Trustee is entitled to payment of
trustee fees and reimbursement of expenses by PSSA pursuant to a separate
agreement with PSSA, but shall not have any claim against the Trust with respect
thereto.
The Trustee makes no representations as to the validity or sufficiency of
the Base Trust Agreement, the New Certificates or the CHR Debentures or any
related document. The Trustee is required to perform only those duties
specifically required under the Base Trust Agreement. However, upon receipt of
the various certificates, reports or other instruments required to be furnished
to it, the Trustee is required to examine such documents and to determine
whether they conform to the applicable requirements of the Base Trust Agreement.
The Trustee is unaffiliated with, but may have normal banking relationships
with, PSSA and its affiliates.
The Base Trust Agreement and, upon consummation of the Exchange Offer, the
provisions of the Trust Indenture Act of 1939, as amended (the "Indenture Act"),
incorporated by reference therein, contain limitations on the rights of the
Trustee thereunder, should it become a creditor of the Trust, to obtain payment
of claims in certain cases or to realize on certain property received by it in
respect of any such claims, as security or otherwise. The Trustee is permitted
to engage in other transactions; provided, however, that if it acquires any
conflicting interest (as defined in the "Indenture Act") it must eliminate such
conflict or resign.
EVENTS OF DEFAULT
There are no events of default with respect to the Trust Certificates.
VOTING RIGHTS
Voting rights will be allocated between the holders of Residual Class
Certificates, on the one hand, and the holders of Amortizing Class Certificates
on the other, respectively, at any date of determination in the same ratio as
(i) the present value of all originally scheduled future payments on the CHR
Debentures after August 1, 2018 bears to (ii) the present value of all
originally scheduled future payments on the Amortizing Class Certificates,
discounted semiannually in each case at a rate of 7.40% per annum to the date of
determination. Such ratio will be calculated by the Calculation Agent. All
voting rights with respect to the Residual Class Certificates will be allocated
among all holders of Residual Class Certificates in proportion to the respective
Certificate Principal Balances of the then-outstanding Residual Class
Certificates held by such holders on any date of determination. All voting
rights with respect to the Amortizing Class Certificates will be allocated among
all holders of Amortizing Class Certificates in proportion to the respective
notional amounts of the then-outstanding Amortizing Class Certificates held by
such holders on any date of determination.
The required percentage of Voting Rights of those Classes of Trust
Certificates that are materially adversely affected by any modification or
amendment of the Base Trust Agreement necessary to consent to such modification
or amendment is 100%.
VOTING WITH RESPECT TO THE CHR DEBENTURES; WAIVERS
The Trustee, as the holder of the CHR Debentures, has the right to vote and
give consents and waivers in respect of the CHR Debentures as permitted by the
CHR Debentures Indenture with respect thereto and except as otherwise limited by
the Base Trust Agreement. In the event that the Trustee receives a request from
Chrysler for its consent to any amendment, modification or waiver of the CHR
Debentures or any document relating thereto, or receives any other solicitation
for any action with respect to the CHR Debentures including a tender offer for
the CHR Debentures by Chrysler (an "Issuer Tender Offer"), the Trustee shall
mail a notice of such proposed amendment, modification, waiver or solicitation
to each holder of Trust Certificates of record as of such date. The Trustee
shall request instructions from the holders of Trust Certificates as to whether
or not to consent to or vote to accept such amendment, modification, waiver or
solicitation. The Trustee shall consent or vote, or refrain from consenting or
voting, in the same proportion (based on the relative voting rights of the Trust
Certificates) as the Trust Certificates of the Trust were actually voted or not
voted by the holders of Trust Certificates thereof as of a date determined by
the Trustee prior to the date on which such consent or vote is required;
provided, however, that, notwithstanding anything to the contrary herein, the
Trustee shall at no time vote in favor of or consent to any matter (i) which
would alter the timing or amount of any payment on the CHR Debentures,
including, without limitation, any demand to accelerate the CHR Debentures, (ii)
which would result in the exchange or substitution of any of the CHR Debentures
pursuant to a plan for the refunding or refinancing of such CHR Debentures,
(iii) which would alter the currency in which any payment is required to be made
on the CHR Debentures, (iv) which would change the voting rights granted to
holders of the CHR Debentures under the CHR Debentures Indenture or (v) which
would impair in any material respect any rights of the Trustee or holders of the
CHR Debentures to enforce remedies against Chrysler under the CHR Debentures
Indenture, except in each case with the unanimous consent of the holders of
Amortizing Class Certificates and Residual Class Certificates, or vote in favor
of an Issuer Tender Offer except with the consent of the holders of 66 2/3% in
interest of Certificates then outstanding (as reflected in the Distribution
Ratio) and, in the event that any such Issuer Tender Offer shall not include the
payment of all accrued interest and principal in full on the CHR Debentures
subject to such Issuer Tender Offer, unless such Issuer Tender Offer satisfies
the Rating Agency Condition (as defined in the Base Trust Agreement), and
subject to the requirement that such vote or consent would not, based on an
Opinion of Counsel, cause the Trust to fail to be characterized as a grantor
trust for U.S. federal income tax purposes or result in a sale or exchange of
any Certificate for U.S. federal income tax purpose. The Trustee shall have no
liability for any failure to act resulting from holders of Trust Certificates'
late return of, or failure to return, directions requested by the Trustee from
the holders of Trust Certificates.
MODIFICATION AND AMENDMENT
The Base Trust Agreement may be amended by PSSA and the Trustee, without
notice to or consent of the holders of Trust Certificates, for certain purposes
including (i) to cure any ambiguity therein, (ii) to correct or supplement any
provision therein which may be inconsistent with any other provision therein,
(iii) to add or supplement any Credit Support (as defined in the Base Trust
Agreement) for the benefit of any holders of Trust Certificates, (iv) to add to
the covenants, restrictions or obligations of PSSA or the Trustee for the
benefit of the holders of Trust Certificates, (v) to add, change or eliminate
any other provisions with respect to matters or questions arising under such
Base Trust Agreement, (vi) to comply with any requirements imposed by the
Internal Revenue Code of 1986 (the "Code"), (vii) to evidence and provide for
the acceptance of appointment hereunder of a Trustee other than The Bank of New
York as Trustee for a series of certificates, and to add to or change any of the
provisions of the Base Trust Agreement as shall be necessary to provide for or
facilitate the administration of the separate trusts thereunder by more than one
trustee, pursuant to the requirements of the Certificates, (viii) to evidence
and provide for the acceptance of appointment hereunder by a successor trustee
with respect to the certificates of one or more series or to add or change any
of the provisions of the Base Trust Agreement as shall be necessary to provide
for or facilitate the administration of the separate trusts thereunder or (ix)
to provide for the issuance of new certificates issued pursuant to an optional
exchange; provided that (a) any such amendment described in (i) through (ix),
but not (vii), will not, as evidenced by an Opinion of Counsel, cause the Trust
to fail to qualify as a grantor trust for U.S. federal income tax purposes or
result in a sale or exchange of any Certificate for tax purposes and (b) the
Trustee has received (1) an officer's certificate of PSSA to the effect that
such amendment will not have a material adverse effect on any class of holders
of Trust Certificates and (2) written confirmation from each Rating Agency
rating such Trust Certificates, if any, that such amendment will not cause such
Rating Agency to reduce or withdraw the then current rating thereof. Without
limiting the generality of the foregoing, the Base Trust Agreement also may be
modified or amended from time to time by PSSA and the Trustee, with the consent
of the holders of Certificates of each class evidencing not less than the
"Required Percentage-Amendment" of the Voting Rights of those Trust Certificates
of such Classes that are affected by such modification or amendment for the
purpose of adding any provision to or changing in any manner or eliminating any
provision of the Base Trust Agreement or of modifying in any manner the rights
of such holders of Trust Certificates; provided that any such amendment shall
not, as evidenced by an Opinion of Counsel, cause the Trust to fail to qualify
as a grantor trust for U.S. federal income tax purposes.
No such modification or amendment, however, may (i) reduce in any manner
the amount of or alter the timing of, distributions or payments which are
required to be made on any Certificate without the consent of the holder of such
Trust Certificate or (ii) reduce the aforesaid Required Percentage of Voting
Rights required for the consent to any such amendment without the consent of the
holders of all Certificates covered by the Base Trust Agreement then
outstanding.
REPORTS TO HOLDERS OF TRUST CERTIFICATES; NOTICES
Reports to Holders of Trust Certificates
With each distribution to holders of Trust Certificates, the Trustee will
forward or cause to be forwarded to each such holder of Trust Certificates and
to PSSA a statement setting forth: (i) the amount of such distribution to
holders of Trust Certificates of such Class allocable to principal, if any, on
the Trust Certificates of such Class; (ii) the amount of compensation received
by the Trustee for the period relating to such Distribution Date, (iii) the
aggregate stated principal amount or, if applicable, notional principal amount
of the CHR Debentures and the current interest rate thereon at the close of
business on such Distribution Date; (iv) the aggregate Certificate Principal
Balance or aggregate Notional Amount, if applicable, of each Class of Trust
Certificates at the close of business on such Distribution Date, separately
identifying any reduction in such aggregate Certificate Principal Balance or
aggregate Notional Amount due to the allocation of any Realized Losses or
otherwise, (v) any information reasonably requested by a holder to enable such
holder to prepare its tax returns, provided that such information is reasonably
attainable in the requested form and (vi) as to any series (or any class within
such series) for which Credit Support has been obtained, the amount or notional
amount of coverage of each element of Credit Support (and rating, if any,
thereof) included therein as of the close of business on such Distribution Date.
In the case of information furnished pursuant to subclauses (i) and (iii)
above, the amounts shall be expressed as a U.S. dollar amount per minimum
denomination of Trust Certificates or for such other specified portion thereof.
Within a reasonable period of time after the end of each calendar year, the
Trustee shall furnish to each person who at any time during the calendar year
was a holder of Trust Certificates a statement containing the information set
forth in subclauses (i) and (iii) above, aggregated for such calendar year or
the applicable portion thereof during which such person was a holder of Trust
Certificates. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Trustee pursuant to any requirements of the Code as are from
time to time in effect.
Notices
Any notice required to be given to a holder of a Registered Certificate
will be mailed to the address of such holder set forth in the applicable
Certificate Register.
REPLACEMENT CERTIFICATES
If a New Certificate is mutilated, destroyed, lost or stolen, then it may
be replaced at the corporate trust office or agency of the applicable Trustee in
the City and State of New York, upon payment by the holder of such expenses as
may be incurred by the applicable Trustee in connection therewith and the
furnishing of such evidence and indemnity as such Trustee may require. Mutilated
Certificates must be surrendered before new Certificates will be issued.
TERMINATION OF THE TRUST
The Trust shall terminate upon (i) receipt and distribution to the holders
of Certificates entitled thereto of all amounts owed under the Base Trust
Agreement in respect of the CHR Debentures, (ii) the occurrence of any Shortened
Maturity Redemption, (iii) the occurrence of any Optional Redemption of all CHR
Debentures then held by the Trust, (iv) the occurrence of an In-Kind
Distribution of all CHR Debentures then held by the Trust or (v) the delivery of
the last remaining CHR Debentures then held by the Trust, to holders in exchange
for certificates.
The final distribution will be made only upon surrender and cancellation of
the Trust Certificates at an office or agency appointed by the Trustee.
GOVERNING LAW
The Base Trust Agreement and the Trust Certificates will be governed by,
and construed in accordance with, the laws of the State of New York without
reference to such State's principles of conflicts of law. Upon consummation of
the Exchange Offer, the Base Trust Agreement will be subject to the provisions
of the Indenture Act that are required to be part of the Base Trust Agreement
and, to the extent applicable, will be governed by such provisions.
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of U.S. federal income tax consequences material
to the purchase, ownership and disposition of Trust Certificates and the
exchange of Old Certificates for New Certificates (the "Exchange") pursuant to
the Exchange Offer. The summary does not purport to be a comprehensive
description of all of the tax consequences that may be relevant to a decision to
purchase Trust Certificates by any particular investor, including tax
consequences that arise from rules of general application to all taxpayers or to
certain classes of taxpayers or that are generally assumed to be known by
investors. Thus, for example, except where otherwise noted, the discussion below
is addressed to holders that are U.S. persons and that hold Trust Certificates
as capital assets. It does not discuss state, local or foreign tax consequences,
nor does it discuss all the tax consequences that may be relevant to a holder
subject to special rules, including dealers in securities or commodities, banks,
savings and loan associations and similar financial institutions, tax-exempt
organizations, insurance companies, taxpayers that hold Trust Certificates as
part of a hedged or integrated transaction (such as a "straddle" or "conversion
transaction") for U.S. federal income tax purposes, or taxpayers whose
functional currency is other than the U.S. dollar. It also does not discuss tax
consequences for individuals or entities taxed as individuals. The discussion
below is based on the Code and the regulations issued thereunder, and
interpretations of law, rulings and decisions currently in effect, all of which
are subject to change. Any such change may be applied retroactively, and may
adversely affect the U.S. federal income tax consequences described herein.
The term "U.S. person" means a citizen or resident of the United States, a
corporation or partnership created or organized in or under the laws of the
United States or any state thereof (including the District of Columbia) (other
than a partnership that is not treated as a United States person, the term
"United States person" being used herein with the meaning given to such term in
the Code and the regulations issued thereunder), an estate the income of which
is subject to U.S. federal income taxation regardless of its source, or a trust
if (i) a U.S. court is able to exercise primary supervision over the trust's
administration and (ii) one or more United States persons have the authority to
control all of the trust's substantial decisions. To the extent provided in
Treasury regulations, certain trusts in existence prior to August 20, 1996 and
treated as United States persons prior to such date that elect to be treated as
United States persons are also considered U.S. persons.
PROSPECTIVE HOLDERS SHOULD CONSULT THEIR TAX ADVISORS AS TO THE U.S.
FEDERAL TAX CONSEQUENCES TO THEM OF THE EXCHANGE, AND OF ACQUIRING, HOLDING AND
DISPOSING OF TRUST CERTIFICATES, INCLUDING, IN PARTICULAR, THE APPLICATION IN
THEIR PARTICULAR CIRCUMSTANCES OF THE TAX DISCUSSED BELOW, AS WELL AS THE
APPLICATION OF STATE, LOCAL, FOREIGN OR OTHER TAX LAWS.
EXCHANGE OF OLD CERTIFICATES FOR NEW CERTIFICATES
In the opinion of Brown & Wood LLP, the Exchange will not be a taxable
event for U.S. federal income tax purposes. As a result, a holder of an Old
Certificate whose Old Certificate is accepted in the Exchange Offer will not
recognize gain or loss on the Exchange. The New Certificates will have the same
"issue price" (and "adjusted issue price" immediately after the Exchange) as the
Old Certificates, and each tendering holder will have the same adjusted basis
and holding period in the New Certificates as it had in the Old Certificates
immediately before the Exchange.
CHARACTERIZATION OF THE TRUST
For U.S. federal income tax purposes, the Trust will not be treated as an
association taxable as a corporation (or a publicly traded partnership taxable
as a corporation) in the opinion of Brown & Wood LLP. Although the
characterization of the Trust is not certain, the Trust should be treated for
U.S. federal income tax purposes as a grantor trust, and the Trustee intends to
report income, gain, loss and deductions to the Internal Revenue Service ("IRS")
on that basis. If the Trust were not classified as a grantor trust, then it
would be classified as a partnership. As a consequence, the Trust will not be
subject to U.S. federal income taxation.
Prospective investors should be aware that no rulings have been, nor are
any expected to be, sought from the IRS with respect to the classification of
the Trust (or any of the other U.S. federal income tax consequences discussed in
this summary) and there can be no assurance that the IRS will agree with the
characterization of the Trust as a grantor trust (or with the other U.S. federal
income tax consequences discussed herein). See "--Alternative
Characterizations." Accordingly, prospective purchasers are urged to consult
their tax advisers regarding the U.S. federal income tax classification of the
Trust.
Under the U.S. federal income tax rules applicable to grantor trusts, a
holder of a Trust Certificate will be treated as owning the rights to those
payments on the CHR Debentures that are allocable to that Trust Certificate. The
sale of a Trust Certificate will be considered a sale of a holder's interest in
those payments. In addition, a holder may deduct its pro rata share of the fees
and other deductible expenses paid by the Trust, at the same time and to the
same extent as such items would be deducted by the holder if the holder paid
directly a pro rata portion of the amounts paid by the Trust.
The CHR Debentures Prospectus indicates that the CHR Debentures underlying
the Trust Certificates were sold based on Chrysler's belief that they constitute
indebtedness of Chrysler for U.S. federal income tax purposes. The following
discussion is based on the assumption that the CHR Debentures will constitute
debt instruments in their entirety. Except for the discussion under
"--Alternative Characterizations," the following also assumes that the Trust
will be classified as a grantor trust.
PURCHASE AND HOLDING OF TRUST CERTIFICATES
A purchaser of a Trust Certificate will be treated as having acquired the
rights to those payments on the CHR Debentures that are allocable to that Trust
Certificate and will be taxed under the "stripped bond" rules of the Code. The
holder will be treated as having purchased a newly issued, single debt
instrument (or may under a literal reading of the Code be required to treat each
payment as a separate debt instrument each with its own issue price based on its
relative fair market value) providing for payments equal to the payments on the
CHR Debentures allocable to the Trust Certificate, and having original issue
discount ("OID") equal to the excess of the sum of such payments over the
holder's purchase price for the Trust Certificate (which would be treated as the
"issue price"). In determining the purchase price for a Trust Certificate for
this purpose, a portion of the purchase price of the Trust Certificate may be
separately allocated to amounts held by the Trust pending distribution to
holders (the recovery of which amounts would not be taxable). Any such
allocation would reduce the amount paid for (and the amount payable on) such
Trust Certificate.
Under the OID rules, in general, each holder of a Trust Certificate,
whether such holder uses the cash or the accrual method of tax accounting, will
be required to include in ordinary gross income the sum of the "daily portions"
of OID on the Trust Certificate for all days during the taxable year that the
holder owns the Trust Certificate. The daily portions of OID on a Trust
Certificate are determined by allocating to each day in any accrual period a
ratable portion of the OID allocable to that accrual period. Accrual periods may
be any length and may vary in length over the term of a Trust Certificate,
provided that no accrual period is longer than one year and each scheduled
payment of principal or interest occurs on either the final day or the first day
of an accrual period. The amount of OID on a Trust Certificate allocable to each
accrual period is determined by multiplying the "adjusted issue price" of the
Trust Certificate at the beginning of the accrual period by the yield to
maturity of such Trust Certificate (appropriately adjusted to reflect the length
of the accrual period). The yield to maturity of a Trust Certificate is the
discount rate that causes the present value of all payments on the Trust
Certificate as of its issue date to equal the issue price of such Trust
Certificate. The "adjusted issue price" of a Trust Certificate at the beginning
of any accrual period generally will be the sum of its issue price and the
amount of OID allocable to all prior accrual periods, reduced by the amount of
all payments made with respect to such Trust Certificate in all prior accrual
periods.
Because holders of Residual Class Certificates will not be receiving
current distributions, OID will be includible as income prior to the receipt of
cash attributable to such income and the amount of OID includible in income will
increase each year.
It is not clear how the possibility of a Maturity Shortening as a result of
a Tax Event, and the resulting distribution to Amortizing Class Certificate
holders of a portion of the payment received by the Trust on the Shortened
Maturity Date, should be taken into account for purposes of determining the
taxation of holders at, and prior to, the Shortened Maturity Date (including,
but not limited to, the amount of OID required to be included by holders in
ordinary gross income). The Trustee intends to take the position that the
possibility of a Maturity Shortening should not affect the U.S. federal income
tax consequences to holders prior to the Maturity Shortening. Under this
treatment, if the maturity of the CHR Debentures was shortened as a result of a
Tax Event, a holder would be treated, solely for OID purposes, as acquiring a
newly issued OID bond, and would be required to determine OID on the newly
issued bond taking into account the Shortened Maturity Date and the amount
required to be distributed to the holder on that date. The amount of OID
required to be included in the holder's ordinary gross income as a result of the
redetermination could be more or less than the amount determined without taking
into account the Maturity Shortening. There can be no assurance, however, that
the IRS will not take a different position on the effect of a potential Maturity
Shortening, which position may have less favorable tax consequences. See
"--Alternative Characterizations." Prospective purchasers should consult their
tax advisers with respect to the effect of a potential Maturity Shortening.
The Trust currently intends, for information reporting purposes, to account
for OID reportable by holders of Trust Certificates by reference to the first
price at which a substantial amount of the Trust Certificates is sold to
purchasers (other than Prudential Securities), even though the amount of OID
will differ for subsequent purchasers. Such prospective purchasers should
consult their tax advisers regarding the proper calculation of OID.
DISTRIBUTIONS
Cash distributions on the Trust Certificates will not be subject to
additional taxation. An In-Kind Distribution may be treated in whole or in part
as equivalent to a sale or exchange.
OPTIONAL EXCHANGE OF CERTIFICATES FOR CHR DEBENTURES
The distribution of a principal amount of CHR Debentures comprising a
specified percentage of the CHR Debentures then held in the Trust in exchange
for the same percentage of Amortizing Class Certificates and Residual Class
Certificates, and the issuance of new Certificates, if any, of each such class
will not be subject to additional taxation. The treatment of a holder that
exchanges such Certificates for such CHR Debentures is unclear. The provisions
of the Code and Treasury regulations relating to stripped bonds do not
specifically provide authority or a mechanism for ceasing to apply the stripped
bond rules under such circumstances. As a consequence, a holder, and any
subsequent purchaser from such holder, could be required to continue to report
income, gain or loss on the CHR Debentures so acquired in the same manner as if
it still held the Certificates surrendered in exchange for the CHR Debentures.
SALE OR EXCHANGE OF TRUST CERTIFICATES OR THE CHR DEBENTURES
The tax basis of a holder of a Trust Certificate in a Trust Certificate
generally will equal the cost of the Trust Certificate increased by any amounts
includible in income as OID, and reduced by any payments made on the Trust
Certificate.
Upon the sale or exchange of a Trust Certificate (other than the Exchange),
a holder generally will recognize gain or loss equal to the difference between
the amount realized on the sale or exchange and the holder's tax basis in the
Trust Certificate. Gain or loss recognized by an individual holder on the sale
or exchange of a Trust Certificate generally will be capital gain or loss, and
will be long-term capital gain or loss if the holder is considered to have held
the Trust Certificate for more than one year at the time of the disposition.
Long-term capital gains recognized by an individual holder generally are subject
to reduced maximum tax rates.
A holder will recognize gain or loss on any sale by the Trust of the CHR
Debentures, including in connection with an In-Kind Distribution or pursuant to
an Optional Redemption of all or part of the CHR Debentures, equal to the
difference between the portion of the amount realized on the sale allocable to
the holder and the allocable portion of the holder's basis in the Trust
Certificate. In the event of an Optional Redemption of less than all of the CHR
Debentures, a holder will calculate gain or loss by assuming that the CHR
Debentures consist of two debt instruments, one of which is retired and one of
which remains outstanding. The adjusted issue price, holder's adjusted basis and
accrued but unpaid OID of the CHR Debentures, determined immediately before the
partial Optional Redemption, will be allocated between those two instruments
based on the portion of the CHR Debentures that is treated as retired by the
partial Optional Redemption.
ALTERNATIVE CHARACTERIZATIONS
As noted above, there can be no assurance that the IRS will agree with the
characterization of the Trust as a grantor trust. It is possible that the IRS
could seek to classify the Trust as a partnership, although even if the IRS were
successful the Trust would not be subject to U.S. federal income tax. While not
certain, if the Trust is classified as a partnership, it should be eligible for
the election out of the partnership tax rules of subchapter K of the Code, under
Treasury Regulation Section 1.761-2. In mutual consideration for each holder's
purchase of a Trust Certificate, each holder of a Trust Certificate is deemed to
have consented to the making of such a protective election as of the date of
formation of the Trust. As a result of the election, each holder of a Trust
Certificate would be required to report its respective share of the items of
income, deductions and credits of the Trust on its respective U.S. federal
income tax return in a manner substantially similar to the U.S. federal income
tax reporting required under the grantor trust rules. However, if the Trust were
not eligible to make the election, the method of taxation of holders of Trust
Certificates could differ significantly from the treatment described in this
summary. Among those differences, (i) the Trust would be required to account for
its income and deductions at the Trust level, and to utilize a taxable year for
reporting purposes, (ii) income from the CHR Debentures would be taxed under the
rules of the Code applicable to whole debt instruments rather than under the
"stripped bond" rules described above, and (iii) each holder would be required
to separately take into account such holder's distributive share of income and
deductions of the Trust. A holder would take into account its distributive share
of Trust income and deductions for each taxable year of the Trust in the
holder's taxable year which ends with or within the Trust's taxable year.
Prospective purchasers are urged to consult their tax advisers regarding the
U.S. federal income tax classification of the Trust.
Although denominated as debentures, the Trust Assets exhibit significant
equity features and there can be no assurances that the IRS will agree with the
characterization of the Trust Assets as debt for U.S. federal income tax
purposes. If the Trust Assets were treated as equity, the "interest" payments on
them would be considered dividends to the extent of Chrysler's earnings and
profits as determined under federal income tax principles. To the extent such
payments on the Trust Assets exceed Chrysler's earnings and profits, such
portion would be reduced by a corresponding amount. Such reduction in basis
could cause the recognition of gain, or increase the amount of gain otherwise
recognized, on the sale, disposition or redemption of the Trust Assets or the
Certificates. In addition, if "interest" payments were treated as equity,
payments made to a holder that was not a U.S. person would be subject to 30
percent withholding tax (unless (i) such rate were reduced by treaty and such
non-U.S. person provides an appropriate statement (e.g., a Form 1001) to that
effect or (ii) such payment is effectively connected to the conduct of a trade
or business by the non-U.S. person in the United States and such non-U.S. person
provides an appropriate statement to that effect (e.g., a Form 4224)). Finally,
assuming the Trust were treated as a grantor trust and the Trust Assets were
treated as equity, amounts accrued on the Certificates would be treated as
stripped dividends/ stripped preferred stock under section 305(e) of the Code.
Potential investors in Certificates should consult their tax advisors as to how
section 305(e) applies in this case.
Adverse tax consequences also might result if the IRS takes a different
position than the position described above under "--Purchase and Holding of
Trust Certificates" with respect to the effect on holders of a potential
distribution to Amortizing Class Certificate holders of a portion of the payment
received by the Trust on a Shortened Maturity Date. For example, the IRS might
treat the Amortizing Class Certificate as a right to payments on the CHR
Debentures coupled with a separate agreement, in the nature of a put option,
between Amortizing Class Certificate holders, on the one hand, and Residual
Class Certificate holders, on the other hand. Under this characterization, a
Maturity Shortening event would be a taxable event. Moreover, the existence of a
deemed put option might trigger the Code's "straddle" rules, in which case,
among other matters, gain or loss on the sale of a Trust Certificate would be
short-term capital gain or loss regardless of the period during which the holder
held the Trust Certificate.
NON-U.S. HOLDERS
A holder that is not a U.S. person and that is not subject to U.S. federal
income tax as a result of any direct or indirect connection to the United States
other than its ownership of a Trust Certificate will not be subject to United
States income or withholding tax, except as described below and under
"--Information Reporting and Backup Withholding," in respect of interest income
or gain on the CHR Debentures if the holder provides an appropriate statement
(generally an IRS Form W-8), signed under penalties of perjury, identifying the
holder and stating, among other things, that the holder is not a U.S. person and
if the holder is not a "10-percent shareholder" or related "controlled foreign
corporation" with respect to Chrysler. If these conditions are not met, a 30
percent withholding tax will apply to interest income from the Trust
Certificates, unless an income tax treaty reduces or eliminates such tax or
unless the interest is effectively connected with the conduct of a trade or
business within the United States by such holder. In the latter case, such
holder will be subject to U.S. federal income tax with respect to all income
from the CHR Debentures at regular rates applicable to U.S. taxpayers.
A holder that is not a U.S. person also may be subject to U.S. federal
income taxation with respect to a Trust Certificate if it is a personal holding
company, a corporation that accumulates earnings to avoid U.S. taxes on
shareholders or a private foundation under the Code.
INFORMATION REPORTING AND BACKUP WITHHOLDING
The Trustee will furnish or make available to each party registered during
such calendar year as a holder, such information as is required under the Code
or regulations under the Code to enable each holder to file its U.S. federal
income tax returns.
Certain holders that are U.S. persons or that otherwise are subject to U.S.
federal income taxation on a net income basis in respect of the Note ("U.S.
holders") may be subject to a 31 percent backup withholding tax in respect of
distributions made on a Trust Certificate and proceeds from the sale of a Trust
Certificate to or through certain brokers if they do not provide their taxpayer
identification numbers (generally on IRS Form W-9). Persons who are not U.S.
holders may be required to comply with applicable certification procedures to
establish that they are not U.S. holders in order to avoid the application of
information reporting requirements and backup withholding tax. Any amounts so
withheld from distributions on the Trust Certificate would be allowed as a
credit against the holder's U.S. federal income tax liability, or upon
application by the holder to the IRS, would be refunded by the IRS to the extent
it exceeds such liability.
ERISA CONSIDERATIONS
Section 406 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and Section 4975 of the Code, prohibit pension, profit
sharing or other employee benefit or other plans (such as individual retirement
accounts) that are subject to Title I of ERISA or to Section 4975 of the Code
(collectively, the "Plans") from engaging in certain transactions involving
"plan assets" with any person that is a "party in interest" under ERISA or
"disqualified person" under the Code with respect to the Plans. A violation of
these "prohibited transaction" rules may generate excise tax and other
liabilities under ERISA and the Code for such persons.
ERISA also imposes certain duties on persons who are fiduciaries of Plans
subject to ERISA, including the requirements of investment prudence and
diversification, and the requirement that such a Plan's investments be made in
accordance with the documents governing the Plan. Under ERISA, any person who
exercises any authority or control with respect to the management or disposition
of the assets of a Plan is considered to be a fiduciary of such Plan.
Pursuant to Department of Labor Regulation ss.2510.3-101 (the "Plan Assets
Regulation"), in general, when a Plan acquires an equity interest in an entity
such as the Trust, then, unless certain exceptions apply, the Plan's assets
include both the equity interest and an undivided interest in each of the
underlying assets of the entity. In general, an "equity interest" is defined
under the Plan Assets Regulation as any interest in an entity other than an
instrument which is treated as indebtedness under applicable local law and which
has no substantial equity features. It is anticipated that the New Certificates,
like the Old Certificates, will be considered equity interests in the Trust for
purposes of the Plan Assets Regulation, and that the assets of the Trust may
therefore constitute plan assets if such Certificates are acquired by Plans. In
such event, the fiduciary and prohibited transaction restrictions of ERISA and
section 4975 of the Code would apply to transactions involving the assets of the
Trust.
In addition, Plan fiduciaries must determine whether the acquisition and
holding of New Certificates would result in prohibited transactions if Plans
that acquired the New Certificates were deemed to own an interest in the
underlying assets of the Trust under the rules discussed above. Accordingly, a
Plan fiduciary considering an investment in the Trust should consider whether
Chrysler, the Trustee, or any of their affiliates is a party in interest or
disqualified person with respect to the Plan. Depending on the relevant facts
and circumstances, certain prohibited transaction exemptions may apply to the
acquisition or holding of the New Certificates--for example, Prohibited
Transaction Class Exemption ("PTE") 96-23, which exempts certain transactions
effected on behalf of a Plan by an "in-house asset manager"; PTE 95-60, which
exempts certain transactions between insurance company general accounts and
parties in interest; PTE 91-38, which exempts certain transactions between bank
collective investment funds and parties in interest; PTE 90-1, which exempts
certain transactions between insurance company pooled separate accounts and
parties in interest; PTE 84-14, which exempts certain transactions effected on
behalf of a Plan by a "qualified professional asset manager"; and PTE 75-1,
which exempts certain transactions effected through a bank supervised by the
United States or a State. There can be no assurance that any of these exemptions
will apply with respect to any Plan's acquisition of the New Certificates, or
that such an exemption, if it did apply, would apply to all prohibited
transactions that may occur in connection with such investment, including, for
example, transactions involving plan assets arising in the operations of the
Trust.
PLAN OF DISTRIBUTION
Each broker or dealer that receives New Certificates for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Certificates. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker or dealer in connection with resales of New Certificates received in
exchange for Old Certificates where such Old Certificates were acquired as a
result of market-making activities or other trading activities. PSSA has agreed
that it will make this Prospectus, as amended or supplemented, available to any
broker or dealer for use in connection with any such resale for a period of one
year. In addition, until such date, all brokers or dealers effecting
transactions in the New Certificates may be required to deliver a prospectus.
PSSA will not receive any proceeds from any sale of New Certificates by
brokers or dealers. New Certificates received by brokers or dealers for their
own account pursuant to the Exchange Offer may be sold from time to time in one
or more transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the New Certificates or a combination of such
methods of resale, at market prices prevailing at the time of resale, at prices
related to such prevailing market prices or negotiated prices. Any such resale
may be made directly to purchasers or to or through brokers or dealers who may
receive compensation in the form of commissions or concessions from any such
broker or dealer and/or the purchasers of any such New Certificates. Any broker
or dealer that resells New Certificates that were received by it for its own
account pursuant to the Exchange Offer and any broker or dealer that
participates in a distribution of such New Certificates may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit on any
such resale of New Certificates and any commissions or concessions received by
any such persons may be deemed to be underwriting compensation under the
Securities Act. The Letter of Transmittal states that by acknowledging that it
will deliver, and by delivering a prospectus, a broker or dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act.
Starting on the Expiration Date, PSSA promptly will send additional copies
of this Prospectus and any amendment or supplement to this Prospectus to any
broker or dealer that requests such documents in the Letter of Transmittal. PSSA
has agreed to pay all expenses incident to the Exchange Offer (including the
expenses of one counsel for the holders of the Certificates) other than
commissions or concessions of any broker or dealer and will indemnify the holder
of the New Certificates (including any broker or dealer) against certain
liabilities, including liabilities under the Securities Act.
LEGAL MATTERS
The validity of the New Certificates and certain U.S. federal income
taxation matters will be passed upon for the Trust by Brown & Wood LLP, New
York, New York.
<PAGE>
APPENDIX A
RECEIPTS ON CORPORATE SECURITIES TRUST, SERIES CHR 1998-1
ALLOCATION SCHEDULE FOR DISTRIBUTION FOLLOWING
ANY OPTIONAL REDEMPTION, MATURITY
SHORTENING REDEMPTION OR IN-KIND DISTRIBUTION*
DISTRIBUTION JUST PRIOR DISTRIBUTION JUST AFTER
TO INTEREST PAYMENT INTEREST PAYMENT
------------------------ -------------------------
Amortizing Residual Amortizing Residual
Date Class Class Class Class
- ---------------- ---------- -------- ---------- --------
August 1, 1998 77.45% 22.55% 76.62% 23.38%
February 1, 1999 76.62% 23.38% 75.75% 24.25%
August 1, 1999 75.75% 24.25% 74.86% 25.14%
February 1, 2000 74.86% 25.14% 73.93% 26.07%
August 1, 2000 73.93% 26.07% 72.96% 27.04%
February 1, 2001 72.96% 27.04% 71.96% 28.04%
August 1, 2001 71.96% 28.04% 70.92% 29.08%
February 1, 2002 70.92% 29.08% 69.85% 30.15%
August 1, 2002 69.85% 30.15% 68.73% 31.27%
February 1, 2003 68.73% 31.27% 67.58% 32.42%
August 1, 2003 67.58% 32.42% 66.38% 33.62%
February 1, 2004 66.38% 33.62% 65.13% 34.37%
August 1, 2004 65.13% 34.87% 63.84% 36.16%
February 1, 2005 63.84% 36.16% 62.50% 37.50%
August 1, 2005 62.50% 37.50% 61.12% 38.88%
February 1, 2006 61.12% 38.88% 59.68% 40.32%
August 1, 2006 59.68% 40.32% 58.19% 41.81%
February 1, 2007 58.19% 41.81% 56.64% 43.36%
August 1, 2007 56.64% 43.36% 55.04% 44.96%
February 1, 2008 55.04% 44.96% 53.37% 46.63%
August 1, 2008 53.37% 46.63% 51.65% 48.35%
February 1, 2009 51.65% 48.35% 49.86% 50.14%
August 1, 2009 49.36% 50.14% 48.00% 52.00%
February 1, 2010 48.00% 52.00% 46.08% 53.92%
August 1, 2010 46.08% 53.92% 44.08% 55.92%
February 1, 2011 44.08% 55.92% 42.01% 57.99%
August 1, 2011 42.01% 57.99% 39.87% 60.13%
February 1, 2012 39.87% 60.13% 37.64% 62.36%
August 1, 2012 37.64% 62.36% 35.34% 64.66%
February 1, 2013 35.34% 64.66% 32.94% 67.06%
August 1, 2013 32.94% 67.06% 30.46% 69.54%
February 1, 2014 30.46% 69.54% 27.89% 72.11%
August 1, 2014 27.89% 72.11% 25.22% 74.78%
February 1, 2015 25.22% 74.78% 22.46% 77.54%
August 1, 2015 22.46% 77.54% 19.59% 80.41%
February 1, 2016 19.59% 80.41% 16.61% 83.39%
August 1, 2016 16.61% 83.39% 13.53% 86.47%
February 1, 2017 13.53% 86.47% 10.33% 89.67%
August 1, 2017 10.33% 89.67% 7.01% 92.99%
February 1, 2018 7.01% 92.99% 3.57% 96.43%
August 1, 2018 3.57% 96.43% 0.00% 100.00%
* The proceeds of any Optional Redemption, Maturity Shortening Redemption or
In-Kind Distribution occurring on any of the above Scheduled Distribution
Dates with respect to the CHR Debentures will be allocated to the above
percentages if such proceeds are distributed on the above Scheduled
Distributed Dates. The proceeds of any such event occurring on the dates
other than Scheduled Distribution Dates will be distributed in accordance
with the ratio described in the Prospectus.
<PAGE>
APPENDIX B
Amortizing Class Certificates
Schedule of Amortizing Payments
<TABLE>
<CAPTION>
INTEREST PRINCIPAL TOTAL REMAINING
DATE AMOUNT AMOUNT CASHFLOW BALANCE
- ---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
August 1, 1998 $ 1,563,126.18 $ 576,583.82 $ 2,139,710.00 $ 47,519,606.18
February 1, 1999 $ 1,544,387.20 $ 595,322.80 $ 2,139,710.00 $ 46,924,283.38
August 1, 1999 $ 1,525,039.21 $ 614,670.79 $ 2,139,710.00 $ 46,309,612.59
February 1, 2000 $ 1,505,062.41 $ 634,647.59 $ 2,139,710.00 $ 45,674,965.00
August 1, 2000 $ 1,484,436.36 $ 655,273.64 $ 2,139,710.00 $ 45,019,691.36
February 1, 2001 $ 1,463,139.97 $ 676,570.03 $ 2,139,710.00 $ 44,343,121.33
August 1, 2001 $ 1,441,151.44 $ 698,558.56 $ 2,139,710.00 $ 43,644,562.77
February 1, 2002 $ 1,418,448.29 $ 721,261.71 $ 2,139,710.00 $ 42,923,301.06
August 1, 2002 $ 1,395,007.28 $ 744,702.72 $ 2,139,710.00 $ 42,178,598.34
February 1, 2003 $ 1,370,804.45 $ 768,905.55 $ 2,139,710.00 $ 41,409,692.79
August 1, 2003 $ 1,345,815.02 $ 793,894.98 $ 2,139,710.00 $ 40,615,797.81
February 1, 2004 $ 1,320,013.43 $ 819,696.57 $ 2,139,710.00 $ 39,796,101.24
August 1, 2004 $ 1,293,373.29 $ 846,336.71 $ 2,139,710.00 $ 38,949,764.53
February 1, 2005 $ 1,265,867.35 $ 873,842.65 $ 2,139,710.00 $ 38,075,921.88
August 1, 2005 $ 1,237,467.46 $ 902,242.54 $ 2,139,710.00 $ 37,173,679.34
February 1, 2006 $ 1,208,144.58 $ 931,565.42 $ 2,139,710.00 $ 36,242,113.92
August 1, 2006 $ 1,177,368.70 $ 961,841.30 $ 2,139,710.00 $ 35,280,272.62
February 1, 2007 $ 1,146,608.86 $ 993,101.14 $ 2,139,710.00 $ 34,287,171.48
August 1, 2007 $ 1,114,333.07 $ 1,025,376.93 $ 2,139,710.00 $ 33,261,794.55
February 1, 2008 $ 1,081,008.32 $ 1,058,701.68 $ 2,139,710.00 $ 32,203,092.87
August 1, 2008 $ 1,046,600.52 $ 1,093,109.48 $ 2,139,710.00 $ 31,109,983.39
February 1, 2009 $ 1,011,074.46 $ 1,128,635.54 $ 2,139,710.00 $ 29,981,347.85
August 1, 2009 $ 974,393.81 $ 1,165,316.19 $ 2,139,710.00 $ 28,816,031.66
February 1, 2010 $ 936,521.03 $ 1,203,188.97 $ 2,139,710.00 $ 27,612,842.69
August 1, 2010 $ 897,417.39 $ 1,242,292.61 $ 2,139,710.00 $ 26,370,550.08
February 1, 2011 $ 857,042.88 $ 1,282,667.12 $ 2,139,710.00 $ 25,087,882.96
August 1, 2011 $ 815,356.20 $ 1,324,353.80 $ 2,139,710.00 $ 23,763,529.16
February 1, 2012 $ 772,314.70 $ 1,367,395.30 $ 2,139,710.00 $ 22,396,133.86
August 1, 2012 $ 727,874.35 $ 1,411,835.65 $ 2,139,710.00 $ 20,984,298.21
February 1, 2013 $ 681,989.69 $ 1,457,720.31 $ 2,139,710.00 $ 19,526,577.90
August 1, 2013 $ 634,613.78 $ 1,505,096.22 $ 2,139,710.00 $ 18,021,481.68
February 1, 2014 $ 585,698.15 $ 1,554,011.85 $ 2,139,710.00 $ 16,467,469.83
August 1, 2014 $ 535,192.77 $ 1,604,517.23 $ 2,139,710.00 $ 14,862,952.60
February 1, 2015 $ 483,045.96 $ 1,656,664.04 $ 2,139,710.00 $ 13,206,288.56
August 1, 2015 $ 429,204.38 $ 1,710,505.62 $ 2,139,710.00 $ 11,495,782.94
February 1, 2016 $ 373,612.95 $ 1,766,097.05 $ 2,139,710.00 $ 9,729,685.89
August 1, 2016 $ 316,214.79 $ 1,823,495.21 $ 2,139,710.00 $ 7,906,190.68
February 1, 2017 $ 256,951.20 $ 1,882,758.80 $ 2,139,710.00 $ 6,023,431.88
August 1, 2017 $ 195,761.54 $ 1,943,948.46 $ 2,139,710.00 $ 4,079,483.42
February 1, 2018 $ 132,583.21 $ 2,007,126.79 $ 2,139,710.00 $ 2,072,356.63
August 1, 2018 $ 67,353.37 $ 2,072,356.63 $ 2,139,710.00 $ 0.00
</TABLE>
* Schedule assumes no Optional Redemption, Shortened Maturity Redemption,
In-Kind Distribution or distribution of the CHR Debentures in exchange for
certificates.
<PAGE>
================================================================================
$48,096,190
RECEIPTS ON CORPORATE
SECURITIES TRUST, SERIES CHR 1998-1
Offer to Exchange
Receipts on Corporate Securities,
Series CHR 1998-1, Amortizing Class
which have been registered under the
Securities Act of 1933, as amended,
For any and all outstanding
Receipts on Corporate Securities,
Series CHR 1998-1, Amortizing Class
____________, 1999
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
-----------------------------------------
PSSA's Bylaws provide that PSSA shall indemnify each of its directors and
officers who was or is a party or is threatened to be made a party to any
threatened, pending or contemplated action, suit or proceeding, whether civil,
criminal, administrative or investigative by reason of the fact that he is or
was a director or officer of PSSA other than an action by or in the right of
PSSA (for which PSSA may indemnify such persons under certain circumstances).
Section 145 of the General Corporation Law of Delaware (the "GCL") provides
as follows:
"(a) A corporation shall have the power to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation ) by
reason of the fact that the person is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by the person in connection with such action, suit or proceeding if the
person acted in good faith and in a manner the person reasonably believed to be
in or not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe the
person's conduct was unlawful. The termination of any action, suit or proceeding
by judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which the person reasonably believed to be
in or not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had reasonable cause to believe that the
person's conduct was unlawful.
(b) A corporation shall have the power to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred by
the person in connection with the defense or settlement of such action or suit
if the person acted in good faith and in a manner the person reasonably believed
to be in or not opposed to the best interests of the corporation and except that
no indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to liable to the corporation unless
and only to the extent that the Court of Chancery or the court in which such
action or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses which
the Court of Chancery or such other court shall deem proper.
(c) To the extent that a present or former director or officer of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense of any claim, issue or matter therein, such person shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the present or
former director, officer, employee or agent is proper in the circumstances
because the person has met the applicable standard of conduct set forth in
subsections (a) and (b) of this section. Such determination shall be made with
respect to a person who is a director or officer at the time of such
determination, (1) by a majority vote of the directors who are not parties to
such action, suit or proceeding, even though less than a quorum, or (2) by a
committee of such directors designated by majority vote of such directors, even
though less than a quorum, or (3) if there are no such directors, or if such
directors so direct, by independent legal counsel in a written opinion, or (4)
by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or director
in defending any civil, criminal, administrative or investigative action, suit
or proceeding may be paid by the corporation in advance of the final disposition
of such action, suit or proceeding upon receipt of undertaking by or on behalf
of such director or officer to repay such amount if it shall ultimately be
determined that such person is not entitled to be indemnified by the corporation
as authorized in this section. Such expenses (including attorneys' fees)
incurred by former directors and officers or other employees and agents may be
so paid upon such terms and conditions, if any, as the corporation deems
appropriate.
(f) The indemnification and advancement of expenses provided by, or granted
pursuant to, the other subsections of this section shall not be deemed exclusive
of any other rights to which those seeking indemnification or advancement of
expenses may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in such person's
official capacity and as to action in another capacity while holding such
office.
(g) A corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against such
person and incurred by such person in any such capacity, or arising out of such
person's status as such, whether or not the corporation would have the power to
indemnify such person against such liability under this section.
(h) For purposes of this section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, so that
any person who is or was a director, officer, employee or agent for such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under this section with respect to the resulting or surviving
corporation as such person would have with respect to such constituent
corporation if its separate existence had continued.
(i) For purposes of this section, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee, or
agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner such person
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to in this
section.
(j) The indemnification and advancement of expenses provided by, or granted
pursuant to, this section shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive jurisdiction to
hear and determine all actions for advancement of expenses or indemnification
brought under this section or under any bylaw, agreement, vote of stockholders
or disinterested directors, or otherwise. The Court of Chancery may summarily
determine a corporation's obligation to advance expenses (including attorneys'
fees)."
The Amended and Restated Certificate of Incorporation of PSSA also limits
the personal liability of directors to PSSA and its stockholders for monetary
damages resulting from certain breaches of the directors' fiduciary duties. The
Amended and Restated Certificate of Incorporation of PSSA provides as follows:
"No director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director; provided that the provisions of this ARTICLE ELEVENTH shall
not eliminate or limit the liability of a director (a) for any breach of the
Director's duty of loyalty to the Corporation and to its stockholders, (b) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (c) under Section 174 of the General Corporation Law
of the State of Delaware or (d) for any transaction from which such director
derived any improper personal benefit. If the GCL is amended after the filing of
this Amended and Restated Certificate of Incorporation so as to authorize
corporate action further eliminating or limiting the personal liability of
directors, then the liability of each director of the Corporation shall be
eliminated or limited to the fullest extent permitted by the law of the State of
Delaware as the same exists from time to time. Any repeal or modification of
this ARTICLE ELEVENTH by the stockholders of the Corporation shall not adversely
affect any elimination or limitation on the personal liability of a director
existing at the time of such repeal or modification."
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
Exhibit
Number Exhibit Description
- ------- -------------------
Exhibit 3.1 Amended and Restated Certificate of
Incorporation of Prudential Securities
Structured Assets, Inc., dated August 25,
1997. ++
Exhibit 3.2 Bylaws of Prudential Securities Structured
Assets, Inc., dated August 21, 1997.++
Exhibit 4.1 Form of Certificate of Receipts on Corporate
Securities, Series CHR 1998-1, Amortizing
Class.++
Exhibit 4.2 Base Trust Agreement, dated August 28, 1997,
between Prudential Securities Structured Assets,
Inc. and The Bank of New York, as trustee.*
Exhibit 4.3 Base Amendment No. 1, dated February 27, 1998.+
Exhibit 4.4 Amendment No. 2, dated April 28, 1998.+
Exhibit 4.5 Series CHR 1998-1 Supplement dated June 9, 1998
between Prudential Securities Structured Assets,
Inc. and The Bank of New York, as trustee.++
Exhibit 4.6 Registration Rights Agreement dated June 9, 1998
between Prudential Securities Structured Assets,
Inc. and Prudential Securities Incorporated.++
Exhibit 4.7 Certificate of Trust by The Bank of New York,
dated June 9, 1998.++
Exhibit 5.1 Opinion of Brown & Wood LLP relating to the
legality of the New Certificates.++
Exhibit 8.1 Opinion of Brown & Wood LLP relating to certain
U.S. federal income tax matters (included in
Exhibit 5.1).++
Exhibit 23.1 Consent of Brown & Wood LLP (included in Exhibit
5.1).++
Exhibit 24.1 Powers of Attorney (included on the signature
page of the Registrant in this Registration
Statement).++
Exhibit 25.1 Form T-1 Statement of Eligibility of The Bank of
New York, as trustee, relating to the Trust
Certificates.++
Exhibit 99.1 Form of Letter of Transmittal.++
Exhibit 99.2 Form of Notice of Guaranteed Delivery.++
* Incorporated by reference to Exhibit 4.2 attached to the Registration
Statement on Form S-4 filed by Prudential Securities Structured Assets, Inc. and
the Receipts on Corporate Securities Trust, Series FDX 1997-1, on October 24,
1997. (File No. 333-38745).
+ Incorporated by reference to Exhibits 4.4 and 4.5 attached to Amendment No. 2
to the Registration Statement on Form S-4 filed by Prudential Securities
Structured Assets, Inc. and the Receipts on Corporate Securities Trust, Series
FDX 1997-1 on May 6, 1998. (File No. 333-38745).
++ Previously filed.
ITEM 22. UNDERTAKINGS
------------
(a) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
and Exchange Act of 1934 (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Securities and
Exchange Act of 1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial BONA FIDE offering thereof.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant, pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by any such director, officer or controlling
person in connection with the securities being registered, the registrant will
submit, unless in the opinion of its counsel the matter has been settled by
controlling precedent, to a court of appropriate jurisdiction the question of
whether or not such indemnification is against Public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
(c) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
(d) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective. This exchange
offer, however, does not involve any acquisition, nor are any acquisitions with
respect to PSSA expected after the registration statement becomes effective. The
transaction covered by this registration statement only involves the exchange of
registered for unregistered securities.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this Post-Effective Amendment No. 1 to Form S-4
Registration Statement No. 333-68497 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on February 8, 1999.
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 Post-Effective Amendment No. 1 to Form S-4 Registration Statement No.
333-68497 has been signed by the following persons in the capacities and on the
date indicated above.
Signature Title
- --------- -----
/s/Howard Whitman
- ----------------- Chairman of the Board and Director
Howard Whitman
/s/Jeffrey J. Theodorou
- ----------------------- President
Jeffrey J. Theodorou (Principal Executive Officer)
/s/William J. Horan
- ------------------- Chief Financial Officer
William J. Horan (Principal Financial and
Accounting Officer)
/s/Elizabeth W. Castagna
- ------------------------ Treasurer
Elizabeth W. Castagna
/s/Alan D. Hogan
- ---------------- Director
Alan D. Hogan
/s/Ruth Lavelle
- --------------- Director
Ruth Lavelle
*By /s/Jeffrey J. Theodorou
------------------------
Jeffrey J. Theodorou
Pro Se and as Attorney-in-Fact
<PAGE>
EXHIBIT INDEX
Exhibit
Number Exhibit Description
- ------ -------------------
Exhibit 3.1 Amended and Restated Certificate of Incorporation of Prudential
Securities Structured Assets, Inc., dated August 25, 1997.++
Exhibit 3.2 Bylaws of Prudential Securities Structured Assets, Inc., dated
August 21, 1997.++
Exhibit 4.1 Form of Certificate of Receipts on Corporate Securities, Series
CHR 1998-1, Amortizing Class.++
Exhibit 4.2 Base Trust Agreement, dated August 28, 1997, between Prudential
Securities Structured Assets, Inc. and The Bank of New York, as
trustee.*
Exhibit 4.3 Base Amendment No. 1 to the Base Trust Agreement, dated
February 27, 1998.+
Exhibit 4.4 Amendment No. 2 to the Base Trust Agreement, dated April 28,
1998.+
Exhibit 4.5 Series CHR 1998-1 Supplement, dated June 9, 1998 between
Prudential Securities Structured Assets, Inc. and The Bank of
New York, as trustee.++
Exhibit 4.6 Registration Rights Agreement dated June 9, 1998 Prudential
Securities Structured Assets, Inc. and Prudential Securities
Incorporated.++
Exhibit 4.7 Certificate of Trust by The Bank of New York, dated June 9,
1998.++
Exhibit 5.1 Opinion of Brown & Wood LLP relating to the legality of the New
Certificates.++
Exhibit 8.1 Opinion of Brown & Wood LLP relating to certain U.S. federal
income tax matters (included in Exhibit 5.1).++
Exhibit 23.1 Consent of Brown & Wood LLP (included in Exhibit 5. 1).++
Exhibit 24.1 Powers of Attorney (included on signature page of the
Registrant in this Registration Statement).++
Exhibit 25.1 Form T-1 Statement of Eligibility of The Bank of New York, as
trustee, relating to the Trust Certificates.++
Exhibit 99.1 Form of Letter of Transmittal.++
Exhibit 99.2 Form of Notice of Guaranteed Delivery.++
* Incorporated by reference to Exhibit 4.2 attached to the Registration
Statement on Form S-4 filed by Prudential Securities Structured Assets,
Inc. and the Receipts on Corporate Securities Trust, Series FDX 1997-1 on
October 24, 1997. (File No. 333-38745).
+ Incorporated by reference to Exhibits 4.4 and 4.5 attached to Amendment No.
2 to the Registration Statement on Form S-4 filed by Prudential Securities
Structured Assets, Inc. and the Receipts on Corporate Securities Trust,
Series FDX 1997-1 on May 6, 1998. (File No. 333-38745).
++ Previously filed.
