EQUITY SECURITIES TRUST
SERIES 6
SIGNATURE SERIES, GABELLI ENTERTAINMENT AND MEDIA TRUST
for all series formed on or subsequent to the effective
date specified below
__________
TRUST INDENTURE AND AGREEMENT
Between
XXXXX & XXXX DISTRIBUTORS L.P.
As Depositor
and
THE CHASE MANHATTAN BANK, N.A.
As Trustee
__________
Dated: November 16, 1995
TRUST INDENTURE AND AGREEMENT
EQUITY SECURITIES TRUST
SERIES 6
Signature Series, Gabelli Entertainment and Media Trust
and Subsequent Series
CONTENTS
Article and Section Page
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 1 DEFINITIONS; CERTIFICATES . . . . . . . . . . . 2
Section 1.1. Definitions . . . . . . . . . . . . . . . . . . 2
Section 1.2. Form of Certificate . . . . . . . . . . . . . . 5
ARTICLE 2 DEPOSIT OF SECURITIES; DECLARATION
OF TRUST; FORM AND ISSUANCE OF
CERTIFICATES. . . . . . . . . . . . . . . . . 8
Section 2.1. Deposit of Securities . . . . . . . . . . . . . 8
Section 2.2. Declaration of Trust. . . . . . . . . . . . . . 8
Section 2.3. Issue of Certificates . . . . . . . . . . . . . 8
Section 2.4. Form of Certificates. . . . . . . . . . . . . . 8
Section 2.5. Certain Contracts Satisfactory. . . . . . . . . 9
Section 2.6. Deposit of Additional Securities. . . . . . . . 9
ARTICLE 3 ADMINISTRATION OF TRUST . . . . . . . . . . . . 10
Section 3.1. Initial Cost. . . . . . . . . . . . . . . . . . 10
Section 3.2. Income Account. . . . . . . . . . . . . . . . . 10
Section 3.3. Principal Account . . . . . . . . . . . . . . . 10
Section 3.4. Reserve Account . . . . . . . . . . . . . . . . 11
Section 3.5. Payments and Distributions. . . . . . . . . . . 11
Section 3.6. Distribution Statements . . . . . . . . . . . . 16
Section 3.7. Substitute Securities . . . . . . . . . . . . . 17
Section 3.8. Sale of Securities. . . . . . . . . . . . . . . 18
Section 3.9. Counsel . . . . . . . . . . . . . . . . . . . . 19
Section 3.10. Notice and Sale by Trustee. . . . . . . . . . . 19
Section 3.11. Refunding Securities. . . . . . . . . . . . . . 20
Section 3.12. Notice of Actions . . . . . . . . . . . . . . . 20
Section 3.13. Notice of Change in Principal
Account . . . . . . . . . . . . . . . . . . . 20
Section 3.14. Extraordinary Distributions . . . . . . . . . . 20
ARTICLE 4 EVALUATION OF SECURITIES. . . . . . . . . . . . 21
Section 4.1. Evaluation of Securities. . . . . . . . . . . . 21
Section 4.2. Tax Reports . . . . . . . . . . . . . . . . . . 22
Section 4.3. Liability of Trustee with respect
to Evaluations. . . . . . . . . . . . . . . . 22
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ARTICLE 5 TRUST EVALUATION, REDEMPTION,
PURCHASE, TRANSFER, INTERCHANGE
OR REPLACEMENT OF CERTIFICATES. . . . . . . . 22
Section 5.1. Trust Evaluation. . . . . . . . . . . . . . . . 22
Section 5.2. Redemptions by Trustee; Purchases
by Depositor. . . . . . . . . . . . . . . . . 23
Section 5.3. Transfer or Interchange of
Certificates. . . . . . . . . . . . . . . . . 26
Section 5.4. Certificates Mutilated, Destroyed,
Stolen or Lost. . . . . . . . . . . . . . . . 27
ARTICLE 6 TRUSTEE; REMOVAL OF DEPOSITOR . . . . . . . . . 27
Section 6.1. General Definition of Trustee's
Liabilities, Rights and Duties;
Removal of Depositor. . . . . . . . . . . . . 27
Section 6.2. Books, Records and Reports. . . . . . . . . . . 31
Section 6.3. Indenture and List of Securities on
File. . . . . . . . . . . . . . . . . . . . . 32
Section 6.4. Compensation. . . . . . . . . . . . . . . . . . 32
Section 6.5. Removal and Resignation of the
Trustee; Successor. . . . . . . . . . . . . . 33
Section 6.6. Qualifications of Trustee . . . . . . . . . . . 34
ARTICLE 7 DEPOSITOR . . . . . . . . . . . . . . . . . . . 35
Section 7.1. Succession. . . . . . . . . . . . . . . . . . . 35
Section 7.2. Resignation of Depositor. . . . . . . . . . . . 35
Section 7.3. Liability of Depositor and
Indemnification . . . . . . . . . . . . . . . 35
Section 7.4. Compensation. . . . . . . . . . . . . . . . . . 37
ARTICLE 8 RIGHTS OF CERTIFICATEHOLDERS. . . . . . . . . . 38
Section 8.1. Beneficiaries of Trust. . . . . . . . . . . . . 38
Section 8.2. Rights, Terms and Conditions. . . . . . . . . . 38
ARTICLE 9 ADDITIONAL COVENANTS; MISCELLANEOUS
PROVISIONS. . . . . . . . . . . . . . . . . . 39
Section 9.1. Amendments. . . . . . . . . . . . . . . . . . . 40
Section 9.2. Termination . . . . . . . . . . . . . . . . . . 40
Section 9.3. Construction. . . . . . . . . . . . . . . . . . 42
Section 9.4. Registration of Certificates. . . . . . . . . . 42
Section 9.5. Written Notice. . . . . . . . . . . . . . . . . 43
Section 9.6. Severability. . . . . . . . . . . . . . . . . . 43
Section 9.7. Dissolution of Depositor Not to
Terminate . . . . . . . . . . . . . . . . . . 43
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EQUITY SECURITIES TRUST
SERIES 6
SIGNATURE SERIES, GABELLI ENTERTAINMENT AND MEDIA TRUST
AND
SUBSEQUENT SERIES
TRUST INDENTURE AND AGREEMENT
DATED NOVEMBER 16, 1995
This Trust Indenture and Agreement ("Indenture") dated
November 16, 1995, between Xxxxx & Xxxx Distributors L.P., as
Depositor and The Chase Manhattan Bank, N.A., as Trustee.
WITNESSETH THAT
In consideration of the premises and of the mutual
agreements herein contained, the Depositor and the Trustee agree
as follows:
INTRODUCTION
The Depositor concurrently with the execution and
delivery hereof is establishing Equity Securities Trust,
Series 6, Signature Series, Gabelli Entertainment and Media Trust
(and subsequent Series), wherein certain securities consisting of
common stock, American Depository Receipts ("ADRs") and contracts
and funds for the purchase of such securities (collectively, the
"Securities") will be deposited by the Depositor, to be held by
the Trustee in trust for the use and benefit of the registered
holders of certificates of ownership (the "Certificateholders")
to be issued as hereinafter provided. The parties hereto are
entering into this Indenture for the purpose of establishing
certain of the terms, covenants and conditions of Equity
Securities Trust, Series 6, Signature Series, Gabelli
Entertainment and Media Trust and of each additional series of
such Trust which may be established from time to time hereafter.
For Equity Securities Trust, Series 6, Signature Series, Gabelli
Entertainment and Media Trust and each subsequent series of the
Equity Securities Trust (sometimes referred to herein as the
"Trust") (as to which this Indenture is to be applicable) the
parties hereto shall execute a separate Reference Trust Agreement
incorporating by reference this Indenture and effecting any
amendment, supplement or variation from or to such incorporation
by reference with respect to the related series and specifying
for that series (i) the Securities deposited in trust and the
number of Units delivered by the Trustee in exchange for the
Securities pursuant to Section 2.3; (ii) the initial fractional
undivided interest represented by each Unit; (iii) the first and
subsequent Record Dates; (iv) the first and subsequent
Distribution Dates; (v) the First Settlement Date; (vi) the
liquidation amount for purposes of Section 6.1(g); (vii) the
Trustee's fee; (viii) the Depositor's fee; (ix) the Termination
Date; and (x) any other change or addition contemplated or
permitted by this Indenture.
ARTICLE 1
DEFINITIONS; CERTIFICATES
Section 1.1. Definitions: Whenever used in this
Indenture the following words and phrases, unless the context
clearly indicates otherwise, shall have the following meanings:
(1) "Addendum to the Reference Trust Agreement" shall
mean the addendum which evidences the Additional Securities
deposited into the Trust and the number of Additional Units
created.
(2) "Additional Securities" shall mean such Securities
as are listed in Supplementary Schedules to Addendums to the
Reference Trust Agreement and which have been deposited to effect
an increase over the number of Units initially specified in the
Reference Trust Agreement.
(3) "Additional Units" shall mean such Units as are
issued in respect of Additional Securities.
(4) "Business Day" shall mean any day other than a
Saturday, Sunday, or other day on which the New York Stock
Exchange is closed for trading, a legal holiday in the City of
New York, or a day on which banking institutions are authorized
by law to close.
(5) "Certificate" shall mean any one of the
certificates substantially in the form hereinafter recited
executed by the Trustee and the Depositor evidencing ownership of
an undivided fractional interest in the Trust.
(6) "Certificateholder" shall mean the registered
holder of any Certificate as recorded on the books of the
Trustee, his legal representatives and heirs and the successors
of any corporation, partnership or legal entity which is a
registered holder of any Certificate, and as such shall be deemed
a beneficiary of the Trust created by the Indenture to the extent
of his pro rata share thereof.
(7) "Contract Securities" shall mean Securities which
are to be acquired by the Trust pursuant to contracts, including
(i) Securities listed in Schedule A to the Reference Trust
Agreement and (ii) Securities which the Depositor has contracted
to purchase for the Trust pursuant to Sections 2.6 and 3.7.
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(8) "Depositor" shall mean Xxxxx & Xxxx Distributors
L.P. or its successor or any successor Xxxxxxxxx appointed as
herein provided.
(9) "Distribution Date" shall have the meaning
assigned to it in Part II of the Reference Trust Agreement.
(10) "Failed Security" shall have the meaning assigned
to it in Section 3.7 hereof.
(11) "First Settlement Date" shall mean the date
specified in Part II of the Reference Trust Agreement.
(12) "Indenture" shall mean this Trust Indenture and
Agreement as originally executed or, if amended as herein
provided, as so amended.
(13) "Original Issue" shall mean an issue of
Securities deposited pursuant to Section 2.1 or any Substitute
Securities purchased to replace any Original Issue which have
become Failed Securities.
(14) "Original Proportionate Relationship" shall mean
the proportionate relationship among the number of shares of each
Security established on the deposit made pursuant to Section 2.1.
The Original Proportionate Relationship shall be adjusted, if
appropriate, to reflect (1) the deposit of Substitute Securities
and (2) the occurrence of any stock dividend, stock splits,
redemptions, or similar events.
(15) "Plan Units" shall mean fractional Units offered
by the Depositor pursuant to the reinvestment plans described in
the final prospectus of the Trust filed within the appropriate
registration forms under the Securities Act of 1933, and for
which Plan Units the Trustee is acting as Trustee.
(16) "Record Date" shall have the meaning assigned to
it in Part II of the Reference Trust Agreement.
(17) "Redemption Form" shall mean the form provided by
the Trustee at the request of holders of Plan Units for the
purposes of redeeming such Units, as such form may be reasonably
acceptable to the Depositor and the Trustee from time to time.
(18) "Reference Trust Agreement" shall mean the
indenture for the particular series of Equity Securities Trust
into which the terms of this Indenture are incorporated.
(19) "Securities" shall mean such common stock,
preferred stock, ADRs and contracts and funds for the purchase of
such securities as are (i) deposited in irrevocable trust and
listed in the Schedule to the Reference Trust Agreement and
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(ii) received in exchange or substitution for any Securities
pursuant to Section 3.7 hereof, as may from time to time be
acquired and continue to be held as a part of the Trust to which
such Reference Trust Agreement relates.
(20) "Substitute Security" shall mean a Security
purchased by the Trustee pursuant to Section 3.7 hereof.
(21) "Termination Date" shall have the meaning
assigned to it in Part II of the Reference Trust Agreement.
(22) "Trust" shall mean the Trust created by this
Indenture, which shall consist of the Securities held pursuant
and subject to this Indenture together with all dividends
thereon, received but undistributed, any undistributed cash
realized from the sale, redemption, liquidation thereof, such
amounts as may be on deposit in the Reserve Accounts hereinafter
established and all other property and rights to which
Certificateholders may be entitled under the provisions of this
Indenture.
(23) "Trustee" shall mean The Chase Manhattan Bank,
N.A., or its successor or any successor Trustee appointed as
herein provided.
(24) "Unit" shall mean the fractional undivided
interest in and ownership of the Trust initially specified in
Part II of the Reference Trust Agreement, the denominator of
which shall be decreased by the number of any such Units redeemed
as provided in Section 5.2.
(25) The words "herein," "hereby," "herewith,"
"hereof," "hereinafter," "hereunder," "hereinabove," "hereafter,"
"heretofore" and similar words or phrases of reference and
association shall refer to this Indenture in its entirety.
(26) Words importing singular number shall include the
plural number in each case and vice versa, and words importing
person shall include corporations and associations, as well as
natural persons.
Section 1.2. Form of Certificate: The form of
Certificate evidencing ownership or fractional undivided
interests in each Trust shall be substantially as follows:
CERTIFICATE OF OWNERSHIP
Evidencing A Fractional Undivided Interest In
Number EST Signature Series Units
Equity Securities Trust
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Description of Trust Plan of Distribution
Cusip
This is to
certify that
is the owner and registered holder of this
Certificate evidencing the ownership of
unit(s)
of fractional undivided interest in Equity Securities Trust of
the above Series (hereinafter called the "Trust") created under
the laws of the State of New York by a Trust Indenture and
Agreement as incorporated by a Reference Trust Agreement
applicable to the above Series (hereinafter collectively called
the "Indenture") between XXXXX & XXXX DISTRIBUTORS L.P., as
Depositor, such other co-Depositors, if any, identified in the
Indenture, and THE CHASE MANHATTAN BANK, N.A., as Trustee. This
Certificate is issued under and is subject to the terms,
provisions and conditions of the Indenture to which the holder of
this Certificate by virtue of the acceptance hereof assents and
is bound, a copy of which is on file and available for inspection
at the unit investment office of the Trustee. The Depositor(s)
hereby grant and convey all of their right, title and interest in
and to the Trust to the extent of the fractional undivided
interest represented hereby to the registered holder of this
Certificate subject to and in pursuance of the Indenture. This
Certificate is transferable and interchangeable by the registered
holder in person or by his duly authorized attorney at the unit
investment trust office of the Trustee upon surrender of this
Certificate properly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Trustee and
payment of any applicable fees and expenses.
This Certificate shall not become valid or binding for any
purpose until properly executed by the Trustee under the
Indenture.
IN WITNESS WHEREOF, Xxxxx & Xxxx Distributors L.P., as
Depositor and, if applicable, as agent for its co-Depositors, has
caused this Certificate to be executed in facsimile by a duly
authorized officer and The Chase Manhattan Bank, N.A., as
Trustee, has caused this Certificate to be executed in its
corporate name by an authorized officer.
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XXXXX & XXXX DISTRIBUTORS L.P.,
Depositor
By: Xxxxx & Xxxx Asset Management, Inc.,
as General Partner
By: Date:
------------------------------------------
Authorized Signatory
THE CHASE MANHATTAN BANK, N.A.,
Trustee
By:
------------------------------------------
Authorized Officer
The following abbreviations, when used in the inscription on
the face of this Certificate, shall be construed as though they
were written out in full according to applicable laws or
regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and
not as tenants in common
UNIF GIFT MIN ACT - Custodian
--------------- --------------
----------- (Cust)
(Minor)
Under Uniform Gifts to Minors Act
----------------------------------
(State)
Additional abbreviations may also be used though not in the above
list.
(FORM OF ASSIGNMENT)
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For Value Received,
------------------------------------------------
hereby sell, assign and transfer Units
---------------
represented by this
Certificate unto
--------------------------------------------------
--------------------------------------------------------------------
SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE MUST BE PROVIDED
----------------------------------------------
and does hereby irrevocably constitute and appoint ________________
__________________________________________________ , attorney,
to transfer said Units on the books of the Trustee, with full
power of substitution in the premises.
Dated: _____________________________
SIGNATURE(S) GUARANTEED BY
----------------------------
----------------------------------- NOTICE: The signature(s)
to this
Firm or Bank assignment must
correspond with the
name(s) as written upon
the face of the
Certificate in every
particular, without
alteration or
enlargement or any change
----------------------------------- whatever.
Authorized Signature
Signature(s) must be guaranteed by a member or participant of the
Securities Transfer Agents Medallion Program (STAMP), Stock
Exchanges Medallion Program (SEMP) or New York Stock Exchange,
Inc. Medallion Signature Program (MSP).
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ARTICLE 2
DEPOSIT OF SECURITIES; DECLARATION OF TRUST;
FORM AND ISSUANCE OF CERTIFICATES
Section 2.1. Deposit of Securities: The Depositor,
concurrently with the execution and delivery of a Reference Trust
Agreement, has deposited with the Trustee in trust the Securities
listed in Schedule A to the Reference Trust Agreement in bearer
form or registered in the name of the Trustee, or its nominee, or
duly endorsed in blank or accompanied by all necessary
instruments of assignment and transfer in proper form to be held,
managed and applied by the Trustee as herein provided. In the
event that the purchase of Securities represented by "when-
issued" and/or "regular way" contracts shall not be consummated
in accordance with said contracts, the Trustee shall credit to
the Principal Account pursuant to Section 3.3 hereof the cash or
cash equivalents (including such portion of any letter of credit
applicable to such contracts) deposited by the Depositor, for the
purpose of such purchase. Such monies, unless invested in
substitute Securities in accordance with Section 3.7 hereof,
shall be distributed to Certificateholders pursuant to
Section 3.5 hereof on the Distribution Date following the failure
of consummation of such purchase. The Depositor shall deliver
the Securities listed on said Schedule or Schedules to the
Trustee which were not actually delivered concurrently with the
execution and delivery of the Reference Trust Agreement within 90
days after said execution and delivery or, if Section 3.7
applies, within such shorter period as is specified in
Section 3.7.
The Trustee is irrevocably authorized hereto to effect
registration of transfer of the Securities in fully registered
form in the name of the Trustee or its nominee.
Section 2.2. Declaration of Trust: The Trustee
declares that it holds and will hold the Trust as Trustee in
trust upon the terms herein set forth for the use and benefit of
all present and future Certificateholders.
Section 2.3. Issue of Certificates: The Trustee
hereby acknowledges receipt of the deposit referred to in
Section 2.1, and simultaneously with the receipt of said deposit,
has executed a Certificate substantially in the form above
recited representing the ownership by the Depositor of the number
of Units specified in Part II of the Reference Trust Agreement,
or, pursuant to the Depositor's direction, in lieu of executing
such Certificate, has registered on the registration books of the
Trust the ownership by The Depository Trust Company of all of
such Units and will cause such Units to be credited at The
Depository Trust Company to the account of the Depositor or,
pursuant to the Depositor's direction and as hereafter provided,
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the account of the issuer of the letter of credit referred to in
Section 2.01. The Depositor shall not sell, pledge, hypothecate
or otherwise transfer such Units, prior to the effectiveness of
the registration statement covering the Units filed with the
Securities and Exchange Commission under the Securities Act of
1933, except that the Depositor may place the Units as security
for any letter of credit provided in connection with the deposit
of contracts described in Section 2.1.
The number of Units may be increased through a split of
the Units or decreased through a reverse split thereof, as
directed by the Depositor, on any day on which the Depositor is
the only Certificateholder, which revised number of Units shall
be recorded by the Trustee on its books.
Section 2.4. Form of Certificates: Each Certificate
referred to in Section 2.3 is, and each Certificate hereafter
issued shall be, in substantially the form hereinabove recited,
numbered serially for identification, in fully registered form,
transferable only on the books of the Trustee as herein provided,
executed manually by an authorized officer of the Trustee and in
facsimile by an Authorized Signator of the Depositor.
Section 2.5. Certain Contracts Satisfactory: The
Depositor approves as satisfactory in form and substance the
contracts to be assumed by the Trustee with regard to any
Securities listed in Schedule A to the Reference Trust Agreement
and authorizes the Trustee on behalf of the Trust to assume such
contracts and otherwise to carry out the terms and provisions
thereof or to take other appropriate action in order to complete
the deposit of the Securities covered thereby into the Trust.
Section 2.6. Deposit of Additional Securities. (a)
From time to time and in the discretion of the Depositor, but in
no event more than 90 days after the date of execution and
delivery of the applicable Reference Trust Agreement, the
Depositor may make deposits of (i) Additional Securities duly
endorsed in blank or accompanied by all necessary instruments of
assignment and transfer in proper form (or contracts to purchase
Additional Securities and cash or an irrevocable letter of credit
in an amount necessary to consummate the purchase of any
Additional Securities pursuant to such contracts ("Additional
Contract Securities")) or (ii) cash or a bank letter of credit in
lieu of cash) (collectively, "Purchase Monies") with instructions
to purchase Additional Securities, such Purchase Monies being in
an amount equal to the value of the Additional Securities to be
purchased pursuant to such instructions as determined by the last
preceding evaluation made pursuant to Section 4.1 and (iii) Cash
(as defined below). Each deposit made during the 90 days
following the deposit made pursuant to Section 2.1 hereof shall
replicate, to the extent practicable, as specified in the
following paragraph (b), the Original Proportionate Relationship.
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Each deposit made after the 90 days following the deposit made
pursuant to Section 2.1 hereof (except for deposits made to
replace Failed Securities if such deposits occur within 20 days
from the date of a failure occurring within such initial 90 day
period) shall maintain exactly the proportionate relationship
existing among the Securities as of the expiration of such 90 day
period. Each such deposit (whenever made) shall exactly
replicate Cash. For purposes of this paragraph, "Cash" means, as
to the Principal Account, cash or other property (other than
Securities) on hand in the Principal Account or receivable and to
be credited to the Principal Account as of the date of the
supplemental deposit (other than amounts to be distributed solely
to persons other than persons receiving the distribution from the
Principal Account as holders of Additional Units created by the
deposit), and, as to the Income Account, cash or other property
(other than Securities) received by the Trust as of the date of
the supplemental deposit or receivable by the Trust in respect of
dividends or other distributions declared but not received as of
the date of the supplemental deposit, reduced by the amount of
any cash or other property received or receivable on any Security
allocable (in accordance with the Trustee's calculation of the
monthly distribution from the Income Account pursuant to
Section 3.5) to a distribution made or to be made in respect of
Record Date occurring prior to the supplemental deposit. Each
deposit of Additional Securities shall be listed in a
Supplementary Schedule to an Addendum to the Reference Trust
Agreement stating the date of such deposit and the number of
Additional Units being issued therefor. The Trustee shall
acknowledge in such Addendum receipt of the deposit, and
simultaneously with the receipt of said deposit, reflect the
aggregate number of Additional Units specified in such Addendum
by recording such Units on its books. Such Additional Securities
shall be held, administered and applied by the Trustee in the
same manner as herein provided for the Securities. The execution
by the Depositor in connection with the deposit of Additional
Securities of an Addendum to the Reference Trust Agreement shall
constitute the approval by the Depositor as satisfactory in form
and substance of the contracts to be entered into or assumed on
such Addendum and authorization to the Trustee on behalf of the
Trust to enter into or assume such contracts and otherwise to
carry out the terms and provisions thereof or to take other
appropriate action in order to complete the deposit of the
Additional Securities covered thereby into the Trust.
(b) Additional Securities deposited during the 90 days
following the deposit made pursuant to Section 2.1 hereof
pursuant to this paragraph shall maintain as closely as
practicable the Original Proportionate Relationship, except as
provided in this Section. Additional Securities may be deposited
or purchased in round lots; if the amount of the deposit is
insufficient to acquire round lots of each Security to be
acquired, the Additional Securities shall be deposited or
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purchased in the order of the Security in the Trust most under
represented immediately before the deposit with respect to the
Original Proportionate Relationship. Instructions to purchase
Additional Securities under this Section, shall be in writing and
shall direct the Trustee to purchase, or enter into contracts to
purchase, Additional Securities; such instructions shall also
specify the name, CUSIP number, if any, and aggregate amount of
each such Additional Security. If, at the time of a subsequent
deposit under this Section, Securities of an Original Issue are
unavailable, cannot be purchased at reasonable prices or their
purchase is prohibited or restricted by applicable law,
regulation or policies, in lieu of the portion of the deposit
that would otherwise be represented by those Securities, the
Depositor may (A) deposit (or instruct the Trustee to purchase)
Securities of another Original Issue or replacement securities,
or (B) deposit cash or a letter of credit with instructions to
acquire the Securities of such original issue when they become
available.
The Trustee shall have no responsibility for the
selection of Securities deposited hereunder or for maintaining
the composition of the Trust portfolio.
ARTICLE 3
ADMINISTRATION OF TRUST
Section 3.1. Initial Cost: The cost of the initial
preparation, printing and execution of the Certificates and this
Indenture, the Registration Statement and other documents
relating to the Trust, Federal and State registration fees and
costs, the initial fees and expenses of the Trustee and
evaluator, legal and auditing expenses and other out-of-pocket
expenses (excluding expenses incurred in the preparation and
printing of preliminary prospectuses and prospectuses, expenses
incurred in the preparation and printing of brochures and other
advertising materials and any other selling expenses), to the
extent not borne by the Depositor, shall be paid by the Trust;
provided, however, the Trust shall not bear such expenses in
excess of the amount shown in the Statement of Condition included
in the Prospectus, and any such excess shall be borne by the
Depositor. To the extent the funds in the Interest and Principal
Accounts of the Trust shall be insufficient to pay the expenses
borne by the Trust specified in this Section 3.1, the Trustee
shall advance out of its own funds and cause to be deposited and
credited to the Interest Account such amount as may be required
to permit payment of such expenses. The Trustee shall be
reimbursed for such advance on each Record Date from funds on
hand in the Income Account or, to the extent funds are not
available in such Account, from the Principal Account, in the
amount deemed to have accrued as of such Record Date as provided
in the following sentence (less prior payments on account of such
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advances, if any), and the provisions of Section 6.4 with respect
to the reimbursement of disbursements for Trust expenses,
including, without limitation, the lien in favor of the Trustee
therefor, shall apply to the payment of expenses made pursuant to
this Section. For purposes of the preceding sentence and the
addition provided in clause (a)(4) of Section 5.1, the expenses
borne by the Trust pursuant to this Section shall be deemed to
accrue at a daily rate over the time period specified for their
amortization by the Depositor pursuant to Section 5.1 provided,
however, that nothing herein shall be deemed to prevent, and the
Trustee shall be entitled to, full reimbursement for any advances
made pursuant to this Section no later than the termination of
the Trust. For purposes of this Section 3.1, the Trustee shall
rely on the written estimates of such expenses provided by the
Depositor pursuant to Section 5.1.
Section 3.2. Income Account: The Trustee shall
collect the dividends or other like cash distributions on the
Securities in the Trust as such are paid, and credit such
amounts, as collected, to a separate account to be known as the
"Income Account."
Section 3.3. Principal Account: (a) The Securities
and all cash, other than amounts credited to the Income Account,
received by the Trustee in respect of the Securities shall be
credited to a separate account to be known as the "Principal
Account".
(b) Moneys and/or irrevocable letters of credit
required to purchase Contract Securities or deposited to secure
such purchases are hereby declared to be held specially by the
Trustee for such purchases and shall not be deemed to be part of
the Principal Account until (i) the Depositor fails to timely
purchase Contract Securities and has not given the Failed
Contract Notice (as defined in Section 3.7) at which time the
moneys and/or letters of credit attributable to the Contract
Securities not purchased by the Depositor shall be credited to
the Principal Account; or (ii) the Depositor has given the
Trustee the Failed Contract Notice at which time the moneys
and/or letters of credit attributable to failed contracts
referred to in such Notice shall be credited to the Principal
Account; provided, however, that if the Depositor also notifies
the Trustee in the Failed Contract Notice that it has purchased
or entered into a contract to purchase Securities (as defined in
Section 3.14), the Trustee shall not credit such moneys and/or
letters of credit to the Principal Account unless the Substitute
Securities shall also have failed or are not delivered by the
Depositor within two business days after the settlement date of
such Substitute Securities, in which event the Trustee shall
forthwith credit such moneys and/or letters of credit to the
Principal Account. To the extent of moneys, and/or moneys drawn
under a letter of credit, deposited by the Depositor and then
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held by the Trustee, the Trustee shall credit to the Principal
Account, and to the extent such moneys are insufficient the
Depositor shall deposit in the Principal Account, the difference,
if any, between the purchase price of the failed Contract
Securities and the purchase price of the Substitute Securities,
together with any sales charge and accrued dividends applicable
to such difference and distribute such moneys to
Certificateholders pursuant to Section 3.5.
Section 3.4. Reserve Account: From time to time the
Trustee shall withdraw from the cash on deposit in the Income
Account or the Principal Account such amounts as it, in its sole
discretion, shall deem requisite to establish a reserve for any
applicable taxes or other governmental charges that may be
payable out of or by the Trust. Such amounts so withdrawn shall
be credited to a separate account which shall be known as the
"Reserve Account". The Trustee shall not be required to
distribute to the Certificateholders any of the amounts in the
Reserve Account; provided, however, that if it shall, in its sole
discretion, determine that such amounts are no longer necessary
for payment of any applicable taxes or other governmental
charges, then it shall promptly deposit such amounts in the
appropriate account from which withdrawn or, if the Trust has
been terminated or is in the process of termination, the Trustee
shall distribute to each Certificateholder such holder's interest
in the Reserve Account in accordance with Section 9.2.
Section 3.5. Payments and Distributions:
Distributions to each Certificateholder from the Income Account
are computed as of the close of business on each Record Date for
the following Distribution Date. Distributions from the
Principal Account of the Trust (other than amounts representing
failed contracts, as discussed in Section 3.3.(b) will be
computed as of each Record Date, and will be made to the
Certificateholders of the Trust on or shortly after the next
Distribution Date. Proceeds representing principal received
from the disposition of any of the Securities between a Record
Date and a Distribution Date which are not used for redemptions
of Units will be held in the Principal Account and not
distributed until the second succeeding Distribution Date. No
distributions will be made to Certificateholders electing to
participate in the Total Reinvestment Plan. Persons who purchase
Units between a Record Date and a Distribution Date will receive
their first distribution on the second Distribution Date after
such purchase.
As of each Record Date the Trustee shall:
(a) deduct from the Income Account of the Trust, and,
to the extent funds are not sufficient therein, from the
Principal Account of the Trust, amounts necessary to pay any
unpaid expenses of the Trust, including registration charges,
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Blue Sky fees, printing costs, attorneys' fees, auditing costs
and other miscellaneous out-of-pocket expenses, as certified by
the Depositor, incurred in keeping the registration of the
Certificates and the Trust on a current basis pursuant to
Section 9.4, provided, however, that no portion of such amount
shall be deducted or paid unless the payment thereof from the
Trust is at that time lawful;
(b) deduct from the Income Account or, to the extent
funds are not available in such Account, from the Principal
Account, and pay to itself individually the amounts that it is at
the time entitled to receive pursuant to Section 6.4 or pursuant
to this Section 3.5;
(c) deduct from the Income Account, or, to the extent
funds are not available in such Account, from the Principal
Account, and pay an amount equal to the unpaid fees and expenses,
if any, of counsel pursuant to Section 3.9 as certified to it by
the Depositor; and
(d) deduct from the Income Account, or, to the extent
funds are not available in such Account, from the Principal
Account the estimated amount that the Depositor is then entitled
to receive pursuant to Section 7.4 and hold such amount without
interest until such time as it is payable to the Depositor as set
forth below.
On or before the first Distribution Date after the
conclusion of each calendar year, the Trustee shall, upon
certification in satisfactory form to the Trustee, upon which the
Trustee may rely, distribute to the Depositor from the amount so
held pursuant to the immediately preceding paragraph the amounts
that the Depositor is at the time entitled to receive pursuant to
Section 7.4 on account of services theretofore performed and
expenses theretofore incurred.
The Trustee also may withdraw from said accounts such
amounts, if any, as it deems necessary to establish a reserve for
any applicable taxes or other governmental charges that may be
payable out of the Trust. Amounts so withdrawn shall not be
considered a part of such Trust's assets until such time as the
Trustee shall return all or any part of such amounts to the
appropriate accounts. In addition, the Trustee may withdraw from
the Income and Principal Accounts such amounts as may be
necessary to cover redemptions of Units by the Trustee.
The Principal Account shall be reimbursed for any
amount withdrawn from the Principal Account under this Indenture
in order to satisfy obligations which, pursuant to the terms
hereof, are first to be paid out of the Income Account to the
extent funds are available therein, when sufficient funds are not
available in the Income Account after giving effect to the
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payment from the Income Account of all amounts otherwise required
to be deducted therefor at that time when sufficient funds are
next available in the Income Account after giving effect to the
payment from the Income Account of all amounts otherwise required
to be deducted therefrom at that time.
On each Distribution Date or within a reasonable period
of time thereafter, the Trustee shall distribute by mail to each
Certificateholder of record at the close of business on the
preceding Record Date, at the post office address appearing on
the registration books of the Trustee, such holder's pro rata
share of the balance in the Income Account calculated as set
forth in the next paragraph, plus such holder's pro rata share of
the distributable cash balance of the Principal Account, as of
the preceding Record Date; provided, however, that funds credited
to the Principal Account in the event of the failure of
consummation of a contract to purchase Securities pursuant to
Section 2.1 hereof, funds representing the proceeds of the sale
of Securities pursuant to Section 3.8 hereof, and funds
representing the proceeds of the sale of Securities under
Section 5.2, 6.4 or this Section 3.5 in excess of the aggregate
of (i) the amounts needed for the purposes of said Sections and
(ii) such amount as the Depositor has informed the Trustee is to
be used to purchase securities pursuant to Section 3.7 hereof,
shall not be distributed until the following Distribution Date or
at such earlier date as shall be determined by the Trustee. The
Trustee shall not be required to make a distribution from the
Principal Account unless the cash balance on deposit therein
available for distribution shall be sufficient to distribute at
least $1.00 per Unit in the case of Units initially offered at
approximately $1,000, or a proportionately lower amount in the
case of Units initially offered at less than $1,000 (e.g., .001
per Unit in the case of Units initially offered at approximately
$1.00).
The Trustee shall compute the amount of the
Distribution from the Income Account (i) by subtracting from the
cash balance of the Income Account computed as of the close of
business on such Record Date (a) any unpaid fees and expenses
then deductible pursuant to the foregoing provisions of Section
3.5 and (b) the Trustee's estimate of other expenses chargeable
to the Income Account pursuant to the Indenture which have
accrued as of such Record Date, or are otherwise properly
attributable to the period to which such Income Distribution
relates and (ii) by dividing the result of such calculation by
the number of Units outstanding on the applicable Record Date.
The amounts to be so distributed to each Certificate-
holder of the Trust of record as of each Record Date shall be
that pro rata share of the cash balance as of such Record Date of
the Income and Principal Accounts of the Trust, computed as set
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forth above, as shall be represented by a notation on the
registration or other record books of the Trustee.
In the computation of each such share, fractions of
less than one cent shall be omitted. After any such distribution
provided for above, any cash balance remaining in the Income
Account or the Principal Account shall be held in the same manner
as other amounts subsequently deposited in each of such Accounts,
respectively.
For the purpose of distribution as herein provided, the
holders of record on the registration books of the Trustee at the
close of business on each Record Date shall be conclusively
entitled to such distribution, and no liability shall attach to
the Trustee by reason of payment to any such registered Certifi-
cateholder of record. Nothing herein shall be construed to
prevent the payment of amounts from the Income Account and the
Principal Account to individual Certificateholders by means of
one check, draft or other proper instrument, provided that the
appropriate statement of such distribution shall be furnished
therein as provided in Section 3.6 hereof.
Section 3.6. Distribution Statements: With each
distribution from the Income or Principal Accounts the Trustee
shall set forth, either in the instrument by means of which
payment of such distribution is made or in any accompanying
statement the amount being distributed from each such account
expressed as a dollar amount per Unit.
Within a reasonable period of time after the last
business day of each calendar year, the Trustee shall furnish to
each person who at any time during such calendar year was a
Certificateholder a statement setting forth, with respect to such
calendar year:
(A) as to the Income Account:
(1) the amount of dividends received on the
Securities,
(2) the amounts paid from the Income Account for
redemptions pursuant to Section 5.2,
(3) the deductions for applicable taxes and fees
and expenses of the Trustee, the Evaluator and counsel
pursuant to Section 3.9, the annual audit fees referred to
in Section 6.2, and the annual fees of the Depositor for
portfolio supervisory services pursuant to Section 7.4,
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(4) the amount distributed from the Income
Account, identifying separately amounts distributed as
dividends and as other income,
(5) any other amount credited to or deducted from
the Income Account, and
(6) the balance remaining after such
distributions and deductions, expressed both as a total
dollar amount and as a dollar amount per Unit outstanding on
the last business day of such calendar year;
(B) as to the Principal Account:
(1) The number of shares of each issue of
Securities sold or liquidated, and the aggregate net
proceeds received with respect to each issue, excluding any
portion thereof credited to the Income Account,
(2) the amounts paid from the Principal Account
for redemption pursuant to Section 5.2,
(3) the deductions for payment of applicable
taxes and fees and expenses of the Trustee, the Evaluator
and counsel pursuant to Section 3.9, the annual audit fees
referred to in Section 6.2, and the annual fee of the
Depositor for portfolio supervisory services pursuant to
Section 7.4, and
(4) the balance remaining after such
distributions and deductions, expressed both as a total
dollar amount and as a dollar amount per Unit outstanding on
the last business day of such calendar year; and
(C) the following information:
(1) a list of Securities held in the Trust as of
the last business day of such calendar year,
(2) the number of Units outstanding on the last
business day of such calendar year,
(3) the Net Asset Value per Unit based on the
last Trust Evaluation made during such calendar year, and
(4) the amounts actually distributed to
Certificateholders during such calendar year from the
Interest and Principal Accounts, separately stated,
expressed both as total dollar amounts and as dollar amounts
per Unit outstanding on the Record Dates for such
distributions.
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Section 3.7. Substitute Securities: In the event that
any Contract Security is not delivered due to any occurrence, act
or event beyond the control of the Depositor and of the Trustee
(such a Contract Security being herein called a "Failed
Security"), the Depositor may instruct the Trustee to purchase
Substitute Securities which have been selected by the Depositor
having a cost not in excess of the cost of the Failed Securities.
To be eligible for inclusion in the Trust, the Substitute
Securities which the Depositor selects must: (a) be of the same
type as that replaced (e.g., both will be common stock or
preferred stock); (b) in the Depositor's judgment, be
substantially similar to the Failed Security, as the case may be,
as respects the investment characteristics which led the
Depositor to select the Failed Security for inclusion in the
Trust; and (c) be purchased prior to, simultaneously with, or no
more than twenty days after delivery of written notice to the
Trustee of the failed contract (the "Failed Contract Notice").
Any Substitute Securities received by the Trustee shall
be deposited hereunder and shall be subject to the terms and
conditions of this Indenture to the same extent as other
Securities deposited hereunder. No such deposit of Substitute
Securities shall be made after the earlier of (i) 90 days after
the date of execution and delivery of the applicable Reference
Trust Agreement or (ii) the first Distribution Date to occur
after the date of execution and delivery of the applicable
Reference Trust Agreement.
Whenever a Substitute Security is acquired by the
Depositor pursuant to the provisions of this Section 3.7, the
Trustee shall, within five days thereafter, mail to all Certifi-
cateholders notices of such acquisition, including an
identification of the Failed Security and the Substitute Security
acquired. The purchase price of a Substitute Security shall be
paid out of the funds in the principal account attributable to
the Failed Security which it replaces. The Trustee shall not be
liable or responsible in any way for depreciation or loss
incurred by reason of any purchase made pursuant to any such
instructions from the Depositor and in the absence of such
instructions the Trustee shall have no duty to purchase any
Substitute Securities under this Indenture. The Depositor shall
not be liable for any failure to instruct the Trustee to purchase
any Substitute Security or for errors of judgment in selecting
any Substitute Security.
Section 3.8. Sale of Securities;
In order to maintain the sound investment character
of the Trust, the Depositor may direct the Trustee to sell
or liquidate Securities at such price and time and in such
manner as shall be determined by the Depositor, provided that
the Depositor has determined that any one or more of the
following conditions exist:
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(i) default in payment of amounts due on any of the
Securities;
(ii) institution of certain legal proceedings;
(iii) default under certain documents materially and
adversely affecting future declaration or payment of amounts due
or expected;
(iv) determination of the Depositor that the tax
treatment of the Trust as a grantor trust would otherwise be
jeopardized; or
(v) decline in price that is a direct result of
serious adverse credit factors affecting the issuer of a Security
which, in the opinion of the Depositor, would make the retention
of the security detrimental to the Trust or the
Certificateholders.
Upon receipt of such direction from the Depositor, upon
which the Trustee shall rely, the Trustee shall proceed to sell
the specified Security in accordance with such direction. The
Trustee shall not be liable or responsible in any way for
depreciation or loss incurred by reason of any sale made pursuant
to any such direction or by reason of the failure of the
Depositor to give any such direction, and in the absence of such
direction the Trustee shall have no duty to sell any Securities
under this Section 3.8.
Section 3.9. Counsel: The Depositor may employ from
time to time as it may deem necessary a firm of attorneys for any
legal services that may be required in connection with the
disposition of Securities pursuant to Section 3.7. The fees and
expenses of such counsel shall be paid by the Trustee from the
Interest and Principal Accounts as provided for in Section 3.5(d)
hereof.
Section 3.10. Notice and Sale by Trustee: If at any
time there has been a failure by the issuer to pay a dividend
that is due and payable, the Trustee shall notify the Depositor
thereof. If within thirty days after such notification the
Trustee has not received any instruction from the Depositor to
sell or to hold or to take any other action in connection with
such Securities, the Trustee shall sell such Securities
forthwith, and the Trustee shall not be liable or responsible in
any way for depreciation or loss incurred by reason of such sale
or by reason of any action or inaction in accordance with such
written instructions of the Depositor. The Trustee shall
promptly notify the Depositor of such action in writing and shall
set forth therein the Securities sold and the proceeds received
therefrom.
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Section 3.11. Reorganization and Similar Events: In
the event that an offer by the issuer of any of the Securities or
any other party shall be made to issue new Securities, the
Trustee shall reject such offer. However, should any exchange or
substitution be effected notwithstanding such rejection or
without an initial offer, any Securities, cash and/or property
received in exchange shall be deposited hereunder and shall be
promptly sold, if securities or property, by the Trustee pursuant
to the Depositor's direction, unless the Depositor advises the
Trustee to retain such securities or property. The cash received
in such exchange and cash proceeds of any such sales shall be
distributed to Certificateholders on the next Distribution Date
in the manner set forth in Section 3.5 regarding distributions
from the Principal Account. This section shall apply, but its
application shall not be limited, to public tender offers,
mergers, acquisitions, reorganizations and recapitalization.
Whenever new securities or property is received and retained by a
Trust pursuant to this Section 3.11, the Trustee shall, within
five days thereafter, mail to all Certificateholders of such
Trust notices of such acquisition unless legal counsel for such
Trust determines that such notice is not required by the
Investment Company Act of 1940, as amended. Neither the
Depositor nor the Trustee shall be liable to any person for
action or failure to take action pursuant to the terms of this
Section 3.11.
Section 3.12. Notice of Actions: In the event that
the Trustee shall have been notified at any time of any action to
be taken or proposed to be taken by holders of any Securities
held by the Trust (including, but not limited to, the making of
any demand, direction, request, giving of any notice, consent or
waiver or the voting with respect to election of directors or any
amendment or supplement to any corporate resolution, agreement or
other instrument under or pursuant to which such Securities have
been issued) the Trustee shall promptly notify the Depositor and
shall thereupon take such action or refrain from taking any
action as the Depositor shall in writing direct; provided,
however, that if the Depositor shall not within five business
days of the giving of such notice to the Depositor direct the
Trustee to take or refrain from taking any action, the Trustee
shall take such action as it, in its sole discretion, shall deem
advisable. Neither the Depositor nor the Trustee shall be liable
to any person for any action or failure to take action with
respect to this section.
Section 3.13. Notice of Change in Principal Account:
The Trustee shall give prompt written notice to the Depositor of
all amounts credited to or withdrawn from the Principal Account
pursuant to any provisions of this Article III, and the balance
of such account after giving effect to such credit or withdrawal.
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Section 3.14. Extraordinary Distributions: Any
property received by the Trustee after the initial date of
Deposit in a form other than cash or additional shares of the
Securities listed on Schedule A or of a Substitute Security,
which shall be retained by the Trust, shall be dealt with in the
manner described in Section 3.11 and shall be retained or
disposed by the Trustee according to those provisions, provided,
however, that no property shall be retained which the Trustee
determines shall adversely affect its duties hereunder. The
proceeds of any disposition shall be credited to the Income or
Principal Account of the Trust, as the Depositor may direct.
The Trust is intended to be treated as a fixed
investment (i.e., grantor) trust for income tax purposes, and its
powers shall be limited in accordance with the restrictions
imposed on such trusts by Xxxxx. Reg. Section 301.7701-4.
ARTICLE 4
EVALUATION OF SECURITIES
Section 4.1. Evaluation of Securities: The Trustee
shall determine separately and promptly furnish to the Depositor
upon request the value of each issue of the Securities in the
Trust (determined as set forth below) as of the Evaluation Time
on each of the days on which the Trustee shall make the Trust
Evaluation required by Section 5.1. The value of each issue of
Securities shall be determined in good faith by the Trustee in
accordance with the following procedures: If the Securities are
listed on one or more national securities exchanges, such
valuation shall be based on the closing purchase price on such
exchange which is the principal market thereof, deemed to be the
New York Stock Exchange if the Securities are listed thereon
(unless the Trustee deems such price inappropriate as a basis for
valuation). If the Securities are not so listed, or, if so
listed and the principal market therefor is other than such
exchange or there is no closing purchase price on such exchange,
such valuation shall be based on the closing purchase price in
the over-the-counter market (unless the Trustee deems such price
inappropriate as a basis for valuation) or if there is no such
closing purchase price, then the Trustee may utilize, at the
Trust's expense, an independent evaluation service or services to
ascertain the values of the Securities. The independent
evaluation service shall use any of the following methods, or a
combination thereof, which it deems appropriate: (a) on the
basis of current bid prices of such Securities as obtained from
investment dealers or brokers (including the Depositor) who
customarily deal in securities comparable to those held by the
Trust, or (b) if bid prices are not available for any of such
Securities, on the basis of bid prices for comparable securities,
or (c) by appraisal of the value of the Securities on the bid
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side of the market or by such other appraisal as is deemed
appropriate, or (d) by any combination of the above. The Trustee
shall be permitted to rely on these evaluations when determining
the Unit Price. The Trustee shall have no responsibility or
liability for the valuations supplied to it by the independent
evaluation service. The Trustee shall also make an evaluation of
the Securities deposited in the Trust as of the time said
Securities are deposited under this Indenture pursuant to Section
2.1. Such evaluation shall be made on the same basis as set
forth above and shall be included in the Schedules attached to
the Reference Trust Agreement.
Section 4.2. Tax Reports: For the purpose of
permitting Certificateholders to satisfy any reporting
requirements of applicable Federal or State tax law, the Trustee
shall transmit to any Certificateholder upon written request any
determinations made by the Trustee pursuant to Section 4.1.
Section 4.3. Liability of Trustee with respect to
Evaluations: The Depositor and the Certificateholders may rely
on any evaluation furnished by the Trustee and shall have no
responsibility for the accuracy thereof. The determinations made
by the Trustee hereunder shall be made in good faith upon the
basis of, and shall have no liability for errors in, the
information reasonably available to it. The Trustee shall be
under no liability to the Depositor or the Certificateholders for
errors in judgment or any action taken in good faith, provided,
however, that this provision shall not protect the Trustee
against any liability to which it would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in
the performance of its duties or by reason of its reckless
disregard of its obligations and duties hereunder.
ARTICLE 5
TRUST EVALUATION, REDEMPTION, PURCHASE, TRANSFER,
INTERCHANGE OR REPLACEMENT OF CERTIFICATES
Section 5.1. Trust Evaluation: The Trustee shall make
an evaluation of the Trust as of the close of trading on the New
York Stock Exchange (4:00 p.m. Eastern Time) (sometimes referred
to herein as the "Evaluation Time") (i) on the last Business Day
of each of the months of June and December, (ii) on the day on
which any unit of the Trust is tendered for redemption (unless
tender is made after the Evaluation Time on such day, in which
case Tender shall be deemed to have been made on the next day
subsequent thereto on which the New York Stock Exchange is open
for trading), and (iii) on any other day desired by the Trustee
or requested by the Depositor. Such evaluations shall take into
account and itemize separately (a)(1) the cash on hand in the
Trust (other than monies on deposit in the Reserve Account, funds
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deposited on the date hereof by the Depositor for the purchase of
Securities and not theretofore credited to the Principal Account
pursuant to Section 3.3 and funds in the Principal Account with
respect to which contracts for the purchase of the Substitute
Securities have been entered into pursuant to Section 3.7
hereof), including dividends receivable on stocks trading ex
dividend, (a)(2) the value of each issue of the Securities in the
Trust as determined by the Trustee pursuant to Section 4.1,
(a)(3) all other assets of the Trust and (a)(4) amounts
representing organizational expenses paid less amounts
representing accrued organizational expenses of the Trust. For
each such evaluation there shall be deducted from the sum of the
above (b)(1) amounts representing any applicable taxes or other
governmental charges payable out of the Trust and for which no
deductions shall have previously been made for the purpose of
addition to the Reserve Account, (b)(2) amounts representing
accrued fees of the Trustee and expenses of the Trust including
but not limited to unpaid fees of the Trustee and expenses of the
Trust including but not limited to unpaid fees of the Trustee and
expenses of the Trust (including legal and auditing expenses),
accrued fees and expenses of the Depositor and its successor, if
any, and (b)(3) cash held for distribution to Certificateholders
of record as of a date on or prior to the evaluation then being
made. The value of the pro rata share of each unit of the Trust
determined on the basis of any such evaluation shall be referred
to herein as the "Unit Value."
Until the Depositor has informed the Trustee that there
will be no further deposits of Additional Securities pursuant to
Section 2.6, the Depositor shall provide the Trustee with written
estimates of (i) the total organizational expenses to be borne by
the Trust pursuant to Section 3.1, (ii) the total number of Units
to be issued in connection with the initial deposit and all
anticipated deposits of Additional Securities and (iii) the
period or periods over which such expenses are to be amortized,
separately stated with respect to each such amortization period.
For purposes of calculating the Trust Evaluation and Unit Value,
the Trustee shall treat all such anticipated expenses as having
been paid and all liabilities therefor as having been incurred,
and all Units as having been issued, in each case on the date of
the Trust Agreement, and, in connection with each such
calculation, shall take into account a pro rata portion of such
expense and liability based on the actual number of Units issued
as of the date of such calculation. In the event the Trustee is
informed by the Depositor of a revision in its estimate of total
expenses, total Units or period of amortization, and upon the
conclusion of the deposit of Additional Securities or initial
offering period, the Trustee shall base calculations made
thereafter on such revised estimates or actual expenses or period
of amortization, respectively, but such adjustment shall not
affect calculations made prior thereto and no adjustment shall be
made in respect thereof.
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The sum of (a)(1) and (a)(3) reduced by the sum of
(b)(1) and (b)(2) and (b)(3) shall be referred to herein as the
"Unit Cash Value".
The Trustee shall promptly advise the Depositor of each
determination of Unit value made by it as above provided, and, in
addition, upon each valuation by the Trustee under Section 4.1
other than those involved in such calculations of Unit Value, the
Trustee shall promptly furnish to Depositor, for purposes of
assisting it in maintaining a market in the Units, with such
information regarding the Principal, Income and Reserve Accounts
as the Depositor may reasonably request.
Section 5.2. Redemptions by Trustee; Purchases by
Depositor: Any Certificate tendered for redemption by a
Certificateholder or his duly authorized attorney to the Trustee
at its corporate trust office, or any Plan Unit tendered to the
Trustee for redemption by the registered holder thereof pursuant
to the Redemption Form, shall be redeemed by the Trustee on the
third business day following the day on which tender for
redemption is made (such third business day being herein called
the "Redemption Date"). Subject to payment by such Certificate-
holder of any tax or other governmental charges which may be
imposed thereon, such redemption is to be made by payment on the
Redemption Date of cash equivalent to the Net Asset Value per
Unit or Plan Unit determined by the Trustee as of the Evaluation
Time on the date of tender, multiplied by the number of Units
represented by such Certificate or Redemption Form (herein called
the "Redemption Price"). Certificates or Redemption Forms
received for redemption by the Trustee on any day after the
Evaluation Time will be held by the Trustee until the next day on
which the New York Stock Exchange is open for trading and will be
deemed to have been tendered on such day for redemption at the
Redemption Price computed on that day.
The Trustee may in its discretion, and shall when so
directed by the Depositor in writing, suspend the right of
redemption or postpone the date of payment of the Redemption
Price for more than seven calendar days following the day on
which tender for redemption is made:
(1) for any period during which the New York Stock
Exchange is closed other than customary weekend and holiday
closings or during which trading on the New York Stock
Exchange is restricted;
(2) for any period during which an emergency exists as
a result of which disposal by the Trust of the Securities is
not reasonably practicable or it is not reasonably
practicable fairly to determine in accordance herewith the
value of the Securities; or
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(3) for such other periods as the Securities and
Exchange Commission may by order permit,
and the Trustee shall not be liable to any person or in any way
for any loss or damage which may result from any such suspension
or postponement.
Not later than the close of business on the day of
tender of a Certificate or Redemption Form for redemption by a
Certificateholder other than the Depositor, the Trustee shall
notify the Depositor of such tender. The Depositor shall have
the right to purchase such Certificate or Plan Unit tendered by
such Redemption Form by notifying the Trustee of its election to
make such purchase as soon as practicable thereafter, but in no
event subsequent to the close of business on the business day on
which such Certificate or Redemption Form was tendered for
redemption. Such purchase shall be made by payment for such
Certificate or Plan Unit by the Depositor to the Certificate-
holder or Plan Unit holder not later than the close of business
on the Redemption Date of an amount equal to the Redemption Price
which would otherwise be payable by the Trustee to such
Certificateholder or Plan Unit holder.
Any Certificate or Plan Unit so purchased by the
Depositor may, at the option of the Depositor, be tendered to the
Trustee for redemption at the corporate trust office of the
Trustee in the manner provided in the first paragraph of this
Section 5.2.
If the Depositor does not elect to purchase any
Certificate or Plan Unit tendered to the Trustee for redemption,
or if a Certificate or Plan Unit is being tendered by the
Depositor for redemption, that portion of the Redemption Price
which represents dividends shall be withdrawn from the Income
Account to the extent funds are available. The balance paid on
any redemption, including accrued dividends, if any, shall be
withdrawn from the Principal Account to the extent that funds are
available for such purpose. If such available balance shall be
insufficient, the Trustee shall sell such Securities from among
those designated on the current list for such purpose as provided
below and in the manner, in its discretion, as it shall deem
advisable or necessary in order to fund the Principal Account for
purposes of such redemption. Sales of Securities by the Trustee
shall be made in such manner as the Trustee shall determine,
subject to any minimum face amount limitations on sale which
shall have been specified by the Depositor and agreed to by the
Trustee. In the event that funds are withdrawn from the
Principal Account or Securities are sold for payment of any
portion of the Redemption Price representing accrued dividends,
the Principal Account shall be reimbursed when sufficient funds
are next available in the Income Account for such funds so
applied.
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The Depositor shall maintain with the Trustee a current
list of Securities designated to be sold for the purpose of
redemption of Certificates or Plan Units tendered for redemption
and not purchased by the Depositor, and for payment of expenses
hereunder, provided that if the Depositor shall for any reason
fail to maintain such a list, the Trustee, in its sole
discretion, may designate a current list of Securities for such
purposes. The net proceeds of any sales of Securities from such
list representing principal shall be credited to the Principal
Account and the proceeds of such sales representing accrued
interest shall be credited to the Income Account.
Neither the Trustee nor the Depositor shall be liable
or responsible in any way for depreciation or loss incurred by
reason of any sale of Securities made pursuant to this
Section 5.2.
Certificates evidencing Units redeemed pursuant to this
Section 5.2 shall be canceled by the Trustee and the Units
evidenced by such Certificates or Plan Units tendered by
Redemption Forms shall be terminated by such redemptions. In the
event that a Certificate shall be tendered representing a number
of Units greater than those requested to be redeemed by the
Certificateholder, the Trustee shall issue to each Certificate-
holder, upon payment of any tax or charges of the character
referred to in the second paragraph to Section 5.3, a new
Certificate evidencing the Units representing the balance of the
Certificate so tendered.
If the related prospectus for the Trust so provides, a
Certificateholder who tenders for redemption Units in an
aggregate amount of at least the amount specified in the
prospectus may request, at the time of tender, to receive an In
Kind Distribution in lieu of cash. Such In Kind Distribution
shall consist of (i) such Certificateholder's pro rata portion of
each of the Securities, to the extent of whole shares, and (ii)
cash equal to such Certificateholder's pro rata portion of the
Income and Principal Accounts follows: (x) a pro rata portion of
the net proceeds of sale of the Securities representing any
fractional shares included in such Certificateholder's pro rata
share of the Securities and (y) such other cash as may properly
be included in such Certificateholder's pro rata share of the sum
of the cash balances of the Income and Principal Accounts in an
amount equal to the Redemption Price on the date of tender less
amounts specified in clauses (i) and (ii)(x) of this sentence.
The Trustee shall distribute the Certificateholder's Securities
to the account of the Certificateholder's bank or broker dealer
at The Depository Trust Company. An In Kind Distribution shall
be reduced by customary transfer and registration charges
incurred by the Trustee.
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Notwithstanding the foregoing provisions of this
Section 5.2, the Trustee is hereby irrevocably authorized in its
discretion, in the event that the Depositor does not elect to
purchase any Certificate or Plan Unit tendered to the Trustee for
redemption (other than Units as to which a valid request for In
Kind Redemption has been made), or in the event that a
Certificate or Plan Unit is being tendered by the Depositor for
redemption, in lieu of redeeming Units or Plan Units tendered for
redemption, to sell such Units or Plan Units in the over-the-
counter market or by private sale for the account of tendering
Unit or Plan Unit holders at prices which will return to the Unit
or Plan Unit holders amounts in cash, net after deducting
brokerage commissions, transfer taxes and other charges, equal to
or in excess of the Redemption Prices which such Unit or Plan
Unit holders would otherwise be entitled to receive on redemption
pursuant to this Section 5.2. The Trustee shall pay to the Unit
or Plan Unit holders the net proceeds of any such sale on the day
they would otherwise be entitled to receive payment of the
Redemption Price hereunder.
Section 5.3. Transfer or Interchange of Certificates:
A Certificate may be transferred by the registered holder thereof
by presentation and surrender of such Certificate at the unit
investment trust office of the Trustee properly endorsed or
accompanied by a written instrument or instruments of transfer in
form satisfactory to the Trustee and executed by the Certificate-
holder or his authorized attorney, whereupon a new registered
Certificate or Certificates for the same number of Units executed
by the Trustee and the Depositor will be issued in exchange and
substitution therefor. Certificates issued pursuant to this
Indenture are interchangeable for one or more other Certificates
in an equal aggregate number of Units and all Certificates issued
shall be issued in denominations of one Unit or any multiple
thereof as may be requested by the Certificateholder. The
Trustee may deem and treat the person in whose name any
Certificate shall be registered upon the books of the Trustee as
the owner of such Certificate for all purposes hereunder and the
Trustee shall not be affected by any notice to the contrary, nor
be liable to any person or in any way for so deeming or treating
the person in whose name any Certificate shall be so registered.
A sum sufficient to pay any tax or other governmental
charge that may be imposed in connection with any such transfer
or interchange shall be paid by the Certificateholder to the
Trustee. The Trustee may require a Certificateholder to pay
$2.00 for each new Certificate issued on any such transfer or
interchange.
All Certificates canceled pursuant to this Indenture
shall be disposed of by the Trustee without liability on its
part.
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Section 5.4. Certificates Mutilated, Destroyed, Stolen
or Lost: In case any Certificate shall become mutilated or be
destroyed, stolen or lost, the Trustee shall execute and deliver
a new Certificate in exchange and substitution therefor upon the
holder's furnishing the Trustee with proper identification and
indemnity satisfactory to the Trustee, and complying with such
other reasonable regulations and conditions as the Trustee may
prescribe and paying such expenses as the Trustee may incur. Any
mutilated Certificate shall be duly surrendered and canceled
before any new Certificate shall be issued in exchange and
substitution therefor. Upon the issuance of any new Certificate
a sum sufficient to pay any tax or other governmental charge and
the fees and expenses of the Trustee may be imposed. Any such
new Certificate issued pursuant to this Section shall constitute
complete and indefeasible evidence of ownership in the Trust, as
if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
In the event the Trust has terminated or is in the
process of termination, the Trustee may, instead of issuing a new
Certificate in exchange and substitution for any Certificate
which shall have become mutilated or shall have been destroyed,
stolen or lost, make the distributions in respect of such
mutilated, destroyed, stolen or lost Certificate (without
surrender thereof except in the case of a mutilated Certificate)
as provided in Section 9.2 hereof if the Trustee is furnished
with such security or indemnity as it may require to save it
harmless, and in the cause of destruction, loss or theft of a
Certificate, evidence to the satisfaction of the Trustee of the
destruction, loss or theft of such Certificate and of the
ownership thereof.
ARTICLE 6
TRUSTEE; REMOVAL OF DEPOSITOR
Section 6.1. General Definition of Trustee's
Liabilities, Rights and Duties; Removal of Depositor: In
addition to and notwithstanding the other duties, rights,
privileges and liabilities of the Trustee otherwise set forth
herein, the liabilities of the Trustee are further defined as
follows:
(a) All moneys deposited with or received by the
Trustee hereunder shall be held by the Trustee without interest
in trust as part of the Trust or the Reserve Account until
required to be disbursed in accordance with the provisions of
this Indenture and such moneys will be segregated by separate
recordation on the trust ledgers of the Trustee so long as such
practice preserves a valid preference under applicable law, or if
such preference is not so preserved the Trustee shall handle such
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moneys in such other manner as shall constitute the segregation
and holding thereof in trust within the meaning of the Investment
Company Act of 1940.
(b) The Trustee shall be under no liability for any
action taken in good faith on any appraisal, paper, order, list,
demand, request, consent, affidavit, notice, opinion, direction,
evaluation, endorsement, assignment, resolution, draft or other
document, whether or not of the same kind, prima facie properly
executed, or for the disposition of moneys, Securities or
Certificates pursuant to this Indenture, or in respect of any
evaluation which the Trustee is required to make or is required
or permitted to have made by others under this Indenture or
otherwise except by reason of its gross negligence, lack of good
faith or willful misconduct, provided that the Trustee shall not
in any event be liable or responsible for any evaluation made by
any independent evaluation service employed by it pursuant to
Section 4.1. The Trust shall pay and hold the Trustee harmless
from and against any loss, liability or expense incurred in
acting as Trustee of the Trust other than by reason of willful
misfeasance, bad faith or gross negligence in the performance of
its duties or by reason of its reckless disregard of its
obligations and duties hereunder, including the costs and
expenses of the defense against any claim or liability in the
premises. The Trustee may construe any of the provisions of this
Indenture, insofar as the same may appear to be ambiguous or
inconsistent with any other provisions hereof, and any
construction of any such provisions hereof by the Trustee in good
faith shall be binding upon the parties hereto. The Trustee
shall in no event be deemed to have assumed or incurred any
liability, duty or obligation to any Certificateholder or the
Depositor, other than as expressly provided for herein.
(c) The Trustee shall not be responsible for or in
respect of the recitals herein, the validity or sufficiency of
this Indenture or for the due execution hereof by the Depositor,
or for the form, character, genuineness, sufficiency, value or
validity of any letter of credit held hereunder or any Securities
(except that the Trustee shall be responsible for the exercise of
due care in determining the genuineness of Securities delivered
to it pursuant to contracts for the purchase of such Securities)
or for or in respect of the validity or sufficiency of the
Certificates or of the due execution thereof by the Depositor,
and the Trustee shall in no event assume or incur any liability,
duty or obligation to any Certificateholder or the Depositor
other than as expressly provided for herein. The Trustee shall
not be responsible for or in respect of the validity of any
signature by or on behalf of the Depositor.
(d) The Trustee shall not be under any obligation to
appear in, prosecute or defend any action, which in its opinion
may involve it in expense or liability, unless as often as
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required, it shall be furnished with reasonable security and
indemnity against such expense or liability as it may require,
and any pecuniary cost of the Trustee from such actions shall be
deductible from and a charge against the Income and Principal
Accounts. The Trustee shall in its discretion undertake such
action as it may deem necessary at any and all times to protect
the Trust and the rights and interests of the Certificateholders
pursuant to the terms of this Indenture, provided, however, that
the expenses and costs of such actions, undertakings or
proceedings shall be reimbursable to the Trustee from the Income
and Principal Accounts, and the payment of such costs and
expenses shall be secured by a lien on the Trust prior to the
interests of the Certificateholders.
(e) The Trustee may employ agents, attorneys,
accountants and auditors and shall not be answerable for the
default or misconduct of any such agents, attorneys, accountants
or auditors if such agents, attorneys, accountants or auditors
shall have been selected with reasonable care; provided, however,
that if the Trustee chooses to employ the Depository Trust
Company in connection with the storage and handling of, and the
furnishing of administrative services in connection with the
Securities, the Trustee will be answerable for any default or
misconduct of the Depository Trust Company and its employees and
agents as fully and to the same extent as if such default or
misconduct had been committed or occasioned by the Trustee. The
Trustee shall be fully protected in respect of any action under
this Agreement taken, or suffered, in good faith by the Trustee,
in accordance with the opinion of its counsel, which may be
counsel to the Depositor acceptable to the Trustee. The fees and
expenses charged by such agents, attorneys, accountants or
auditors shall constitute an expense of the Trustee reimbursable
from the Income and Principal Accounts as set forth in
Section 3.5 hereof.
(f) Other than as provided in Article 7 hereunder, if
at any time the Depositor shall resign or fail to undertake or
perform or become incapable of undertaking or performing any of
the duties which by the terms of this Indenture are required by
it to be undertaken or performed and no express provision is made
for action to be taken by the Trustee in such event, or the
Depositor shall be adjudged bankrupt or insolvent, or a receiver
of such Depositor or of its property shall be appointed, or any
public officer shall take charge or control of such Depositor or
of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then in any such case, the Trustee
may, in its sole discretion, do any one or more of the following:
(1) appoint a successor Xxxxxxxxx who shall act hereunder in all
respects in place of the Depositor, who shall be compensated
semi-annually, at rates deemed by the Trustee to be reasonable
under the circumstances, by deduction from the Income Account or
from the Principal Account, but no such deduction shall be made
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exceeding such reasonable amount as the Securities and Exchange
Commission may prescribe in accordance with Section 26(a)(2)(C)
of the Investment Company Act of 1940; or (2) terminate this
Indenture and the Trust created hereby and liquidate the Trust,
all in the manner provided in Section 9.2. or (3) continue to
act as Trustee hereunder without terminating this Indenture,
acting in its own absolute discretion without appointing any
successor Depositor and assuming such of the duties and
responsibilities of the Depositor hereunder as the Trustee
determines, in its absolute discretion, are necessary or
desirable for the administration and preservation of the Trust
and receiving additional compensation at rates determined as
provided in clause (1). If the Trustee continues so to act, it
is authorized to employ one or more agents to perform portfolio
supervisory services and such other of the services of the
Depositor hereunder as the Trustee determines, in its sole
discretion, to be necessary or desirable. The fees and expenses
of such agent or agents shall be charged to the Trust in
accordance with Section 6.4. All provisions of this Indenture
relating to the liability and indemnification of the Trustee,
including, without limitation, subparagraph (e) of this Section,
shall apply to any responsibility assumed or action taken by the
Trustee pursuant to this subparagraph.
(g) If the value of the Trust as shown by any
evaluation by the Trustee pursuant to Section 5.1 hereof shall be
less than the liquidation amount specified in Part II of the
Reference Trust Agreement, the Trustee may in its discretion, and
shall, when so directed by the Depositor, terminate this
Indenture and the Trust created hereby and liquidate the Trust,
all in the manner provided in Section 9.2.
(h) In no event shall the Trustee be liable for any
taxes or other governmental charges imposed upon or in respect of
the Securities or upon the dividends thereon or upon it as
Trustee hereunder or upon or in respect of the Trust which it may
be required to pay under any present or future law of the United
States of America or any other taxing authority having
jurisdiction in the premises. For all such taxes and charges and
for any expenses, including counsel fees, which the Trustee may
sustain or incur with respect to such taxes or charges, the
Trustee shall be reimbursed and indemnified out of the Income and
Principal Accounts of the Trust, and the payment of such amounts
so paid by the Trustee shall be secured by a lien on the Trust
prior to the interests of the Certificateholders.
(i) The Trustee, except by reason of its gross
negligence, lack of good faith, reckless disregard of its
obligations hereunder or willful misconduct, shall not be liable
for any action taken or suffered to be taken by it in good faith
and believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Indenture.
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(j) Notwithstanding anything in this Indenture to the
contrary, the Trustee is authorized and empowered to enter into
any safekeeping arrangement or arrangements it deems necessary or
appropriate for holding the Securities then owned by the Trust
and the Trustee is authorized and empowered in its sole right to
amend, supplement or terminate any safekeeping arrangement or
arrangements made under this provision. In addition, the Trustee
is authorized and empowered, at the request and discretion of the
Depositor, to execute and file on behalf of the Trust any and all
documents, in connection with consents to service of process,
required to be filed under the securities laws of the various
States in order to permit the sale of Units of the Trust in such
States by the Depositor.
(k) The Trustee in its individual or any other
capacity may become owner or pledgee or, or be an underwriter or
dealer in respect of, stock, bonds or other obligations issued by
the same issuer (or an affiliate of such issuer) or any obligor
of any Securities at any time held as part of the Trust and may
deal in any manner with the same or with the issuer (or an
affiliate of the issuer) with the same rights and powers as if it
were not the Trustee hereunder.
(l) The Trust may include a letter or letters of
credit for the purchase of Contract Securities issued by the
Trustee in its individual capacity for the account of the
Depositor, and the Trustee may otherwise deal with the Depositor
with the same rights and powers as if it were not the Trustee
hereunder.
Section 6.2. Books, Records and Reports: The Trustee
shall keep proper books of record and account of all the
transactions under this Indenture at its unit investment trust
office including a record of the name and address of, and the
Certificates issued by the Trust and held by, every Certificate-
holder, and such books and records shall be open to inspection by
any Certificateholder at all reasonable times during the usual
business hours, and such books and records shall be made
available to the Depositor upon the request of the Depositor
including, but not limited to, a record of the name and address
of, and the Certificates issued by the Trust and held by, every
Certificateholder.
Unless the Depositor otherwise directs, the Trustee
shall cause audited statements as to the assets and income of the
Trust to be prepared on an annual basis by independent public
accountants selected by the Depositor, provided, however, that if
the Depositor is then making a market for units of the Trust, the
Depositor shall bear the cost of such audit to the extent that it
exceeds $.50/unit of approximately $1000 initial value (or such
proportionate amount in the case of units of greater or lesser
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initial value). Such audited statement will be made available to
Certificateholders upon request.
To the extent permitted under the Investment Company
Act of 1940 as evidenced by an opinion of counsel to the
Depositor, reasonably acceptable to the Trustee, the Trustee
shall pay, or reimburse to the Depositor or others, the costs of
the preparation of documents and information with respect to the
Trust required by law or regulation in connection with the
maintenance of a secondary market in units of the Trust. Such
costs may include but are not limited to accounting and legal
fees, blue sky registration and filing fees, printing expenses
and other reasonable expenses related to documents required under
Federal and state securities laws.
The Trustee shall make such annual or other reports as
may from time to time be required under any applicable state or
federal statute or rule or regulation thereunder.
Section 6.3. Indenture and List of Securities on File:
The Trustee shall keep a certified copy or duplicate original of
this Indenture on file at its unit investment trust office
available for inspection at all reasonable times during the usual
business hours by any Certificateholder and the Trustee shall
keep and so make available for inspection a current list of the
Securities.
Section 6.4. Compensation: For services performed
under this Indenture the Trustee shall be paid at the rate per
annum set forth in Part II of the Reference Trust Agreement which
shall be computed on the basis of the greatest number of units of
the Trust outstanding at any time during the period with respect
to which such compensation is being computed. The Trustee may
from time to time adjust its compensation as set forth above
provided that the total adjustment upward does not, at the time
of such adjustment, exceed the percentage of the total increase,
after the date hereof, in consumer prices for services as
measured by the United States Department of Labor Consumer Price
Index entitled "All Services Less Rent," or, if such index shall
cease to be published, then as measured by the available index
most nearly comparable to such index. The consent or concurrence
of any Certificateholder hereunder shall not be required for any
such adjustment or increase, however, the consent of the
Depositor shall be required. Such compensation shall be charged
by the Trustee against the Income and Principal Accounts at the
time provided in Section 3.5 provided, however, that such
compensation shall be deemed to provide only for the usual normal
and recurring functions undertaken as Trustee pursuant to this
Indenture.
The Trustee shall charge the Income and Principal
Accounts at such times as shall be convenient in its
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administration of the Trust any and all expenses, including the
fees of counsel which may be retained by the Trustee in
connection with its activities hereunder, and disbursements
incurred hereunder and any extraordinary services performed by
the Trustee hereunder. The Trustee shall be indemnified and held
harmless against any loss or liability accruing to it without
gross negligence, bad faith or willful misconduct on its part,
arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses
(including counsel fees) of defending itself against any claim of
liability in the premises. If the cash balances in the Income
and Principal Accounts shall be insufficient to provide for
amounts payable pursuant to this Section 6.4, the Trustee shall
have the power to sell (i) Securities from the current list of
Securities designated to be sold pursuant to Section 5.2 hereof,
or (ii) if no such Securities have been so designated, such
Securities as the Trustee may see fit to sell in its own
discretion, and to apply the proceeds of any such sale in payment
of the amounts payable pursuant to this Section 6.4. The Trustee
shall not be liable or responsible in any way for depreciation or
loss incurred by reason of any sale of Securities made pursuant
to this Section 6.4. Any moneys payable to the Trustee pursuant
to this section shall be secured by a prior lien on the Trust.
Section 6.5. Removal and Resignation of the Trustee;
Successor: The following provisions shall provide for the
removal and resignation of the Trustee and the appointment of any
successor Trustee:
(a) any resignation or removal of the Trustee and
appointment of a successor pursuant to this section shall not
become effective until acceptance of appointment by the successor
Trustee as provided in subsection (b) hereof;
(b) the Trustee or any trustee hereafter appointed may
resign and be discharged of the trust created by this Indenture
by executing an instrument in writing resigning as such Trustee,
filing the same with the Depositor and mailing a copy of a notice
of resignation to all Certificateholders then on record not less
than sixty days before the date specified in such instrument
when, subject to Section 6.5(d), such resignation is to take
effect. Upon receiving such notice of resignation, the Depositor
shall use its best efforts to promptly appoint a successor
Trustee as hereinafter provided, by written instrument, in
duplicate, one copy of which shall be delivered to the resigning
Trustee and one copy to the successor Trustee. In case at any
time the Trustee shall become incapable of acting or shall be
deemed incapable of acting by the written consent of holders of
Certificates evidencing 66 2/3% of the outstanding Units
comprising a particular series, or shall be adjudged a bankrupt
or insolvent, or a receiver of the Trustee or of its property
shall be appointed, or any public officer shall take charge or
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control of the Trustee or of its property or affairs for the
purposes of rehabilitation, conservation, or liquidation, then in
any such case the Depositor may remove the Trustee and appoint a
successor Trustee by written instrument, in duplicate, one copy
of which shall be delivered to the Trustee so removed and one
copy to the successor Trustee; provided that notice of such
removal and appointment of a successor shall be given to each
Certificateholder then of record;
(c) any successor Trustee appointed hereunder shall
execute, acknowledge and deliver to the Depositor and the
retiring Trustee an instrument accepting such appointment
hereunder, and such successor Trustee without any further act,
deed or conveyance shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder with
like effect as if originally named Trustee herein and shall be
bound by all the terms and conditions of this Indenture provided,
however, that no successor trustee shall be under any liability
hereunder for occurrences or omissions prior to the execution of
such instrument. Upon the request of such successor Trustee, the
Depositor and the retiring Trustee shall, upon payment of any
amounts due the retiring Trustee or provision therefor to the
satisfaction of such retiring Trustee, execute and deliver an
instrument acknowledged by it transferring to such successor
trustee all the rights and powers of the retiring Trustee; and
the retiring Trustee shall transfer, deliver and pay over to the
successor Trustee all Securities and moneys at the time held by
it hereunder, together with all necessary instruments of transfer
and assignment or other documents properly executed necessary to
effect such transfer and such of the records or copies thereof
maintained by the retiring Trustee in the administration hereof
as may be requested by the successor Trustee, and shall thereupon
be discharged from all duties and responsibilities under this
Indenture. The retiring Trustee shall, nevertheless, retain a
lien upon all Securities and moneys at the time held by it
hereunder to secure any amounts then due the retiring Trustee
hereunder;
(d) in case at any time the Trustee shall resign and
no successor Trustee shall have been appointed and have accepted
appointment within thirty days after notice of resignation has
been received by the Depositor, the retiring Trustee may
forthwith apply to a court of competent jurisdiction for the
appointment of a successor Trustee. Such court may thereupon,
after such notice, if any, as it may deem proper and prescribe,
appoint a successor Trustee; and
(e) any corporation into which any Trustee hereunder
may be merged or with which it may consolidate, or any
corporation resulting from any merger or consolidation to which
any Trustee hereunder shall be a party, shall be the successor
Trustee under this Indenture without the execution or filing of
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any paper, instrument or further act to be done on the part of
the parties hereto, anything herein, or in any agreement relating
to such merger or consolidation, by which any such Trustee may
seek to retain certain powers, rights and privileges theretofore
obtaining for any period of time following such merger or
consolidation, to the contrary notwithstanding.
Section 6.6. Qualifications of Trustee: The Trustee,
or any successor thereof, shall be a corporation organized and
doing business under the laws of the United States or any state
thereof, which is authorized under such laws to exercise
corporate trust powers and having at all times an aggregate
capital, surplus, and undivided profits of not less than
$2,500,000.
ARTICLE 7
DEPOSITOR
Section 7.1. Succession: The covenants, provisions
and agreements herein contained shall in every case be binding
upon any successor to the business of the Depositor. In the
event of the death, resignation or withdrawal of any partner of
the Depositor or of any successor Depositor which may be a
partnership, the deceased, resigning or withdrawing partner shall
be relieved of all further liability hereunder if at the time of
such death, resignation or withdrawal such Xxxxxxxxx maintains a
net worth (determined in accordance with generally accepted
accounting principles) of at least $1,000,000. In the event of
an assignment by the Depositor to a successor corporation or
partnership as permitted by the next following sentence, such
Depositor and, if such Depositor is a partnership, its partners,
shall be relieved of all further liability under this Indenture.
The Depositor may transfer all or substantially all of its assets
to a corporation or partnership which carries on the business of
the Depositor, if at the time of such transfer such successor
duly assumes all the obligations of the Depositor under this
Indenture and if at such time such successor maintains a net
worth of at least $1,000,000 (determined in accordance with
generally accepted accounting principles).
Section 7.2. Resignation of Depositor: If at any time
the Depositor desires to resign its position as Depositor
hereunder, it may resign by delivering to the Trustee an
instrument of resignation executed by such Depositor. Such
resignation shall become effective upon the expiration of thirty
days from the date on which such instrument is delivered to the
Trustee. Upon effective resignation hereunder, the resigning
Depositor shall be discharged and shall no longer be liable in
any manner hereunder except as to acts or omissions occurring
prior to such resignation and any successor Xxxxxxxxx appointed
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by the Trustee pursuant to Section 6.1(f) shall thereupon perform
all duties and be entitled to all rights under this Indenture.
The successor Depositor shall not be under any liability
hereunder for occurrences or omissions prior to the execution of
such instrument.
Section 7.3. Liability of Depositor and
Indemnification: (a) The Depositor shall be under no liability
to the Trust or the Certificateholders for any action or for
refraining from the taking of any action in good faith pursuant
to this Indenture, or for errors in judgment or for depreciation
or loss incurred by reason of the purchase or sale of any
Securities, provided, however, that this provision shall not
protect the Depositor against any liability to which it would
otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of its duties or by reason
of its reckless disregard of its obligations and duties
hereunder. The Depositor may rely in good faith on any paper,
order, notice, list, affidavit, receipt, evaluation, opinion,
endorsement, assignment, draft or any other document of any kind
prima facie properly executed and submitted to it by the Trustee,
the Trustee's counsel or any other person for any matters arising
hereunder. The Depositor shall in no event be deemed to have
assumed or incurred any liability, duty, or obligation to any
Certificateholder or the Trustee other than as expressly provided
for herein.
(b) The Trust shall pay and hold the Depositor
harmless from and against any loss, liability or expense incurred
in acting as Depositor of the Trust other than by reason of
willful misfeasance, bad faith or gross negligence in the
performance of their duties or by reason of their reckless
disregard of their obligations and duties hereunder, including
the costs and expenses of the defense against any claim or
liability in the premises. The Depositor shall not be under any
obligation to appear in, prosecute or defend any legal action
which in their opinion may involve them in any expense or
liability, provided, however, that the Depositor may in its
discretion undertake any such action which it may deem necessary
or desirable in respect of this Indenture and the rights and
duties of the parties hereto and the interests of the
Certificateholders hereunder and, in such event, the legal
expenses and costs of any such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust
and shall be paid directly by the Trustee out of the Income and
Principal Accounts as provided by Section 3.5.
(c) None of the provisions of this Indenture shall be
deemed to protect or purport to protect the Depositor against any
liability to the Trust or to the Certificateholders to which the
Depositor would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of
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its duties, or by reason of the Depositor's reckless disregard of
its obligations and duties under this Indenture.
Section 7.4. Compensation: The Depositor shall
receive at the times set forth in Section 3.5 as compensation for
performing portfolio supervisory services, such amount and for
such periods as specified in Part II of the Reference Trust
Agreement. The computation of such compensation shall be made on
the basis of $.25 per 100 Units calculated on the basis of the
largest number of units outstanding at any time during the period
for which such compensation is being computed. At no time,
however, will the total amount received by the Depositor for
services rendered to all series of the Equities Securities Trust
in any calendar year exceed the aggregate cost to it of supplying
such services in such year. Such rate may be increased by the
Trustee from time to time, without the consent or approval of any
Certificateholder or the Depositor, by amounts not exceeding the
proportionate increase during the period from the date of such
Reference Trust Agreement to the date of any such increase, in
consumer prices as published either under the classification "All
Services Less Rent" in the Consumer Price Index published by the
United States Department of Labor or, if such Index is no longer
published, a similar index.
In the event that any amount of the compensation paid
to the Depositor pursuant to Section 3.5 is found to be an
improper charge against the Trust, the Depositor shall reimburse
the Trust in such amount. An improper charge shall be
established if a final judgment or order for reimbursement of the
Trust shall be rendered against the Depositor and such judgment
or order shall not be effectively stayed or a final settlement is
established in which the Depositor agrees to reimburse the Trust
for amounts paid to the Depositor pursuant to this Section 7.4.
ARTICLE 8
RIGHTS OF CERTIFICATEHOLDERS
Section 8.1. Beneficiaries of Trust: By the purchase
and acceptance or other lawful delivery and acceptance of any
Certificate the Certificateholder shall be deemed to be a
beneficiary of the Trust created by this Indenture and vested
with all right, title and interest in the Trust to the extent of
the Unit or Units set forth and evidenced by such Certificate,
subject to the terms and conditions of this Indenture and of such
Certificate.
Section 8.2. Rights, Terms and Conditions: In
addition to the other rights and powers set forth in the other
provisions and conditions of this Indenture the Certificate-
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holders shall have the following rights and powers and shall be
subject to the following terms and conditions:
(a) A Certificateholder may at any time prior to the
Evaluation Time on the date the Trust is terminated tender his
Certificate or Certificates to the Trustee for redemption in
accordance with Section 5.2.
(b) The death or incapacity of any Certificateholder
shall not operate to terminate this Indenture or the Trust, nor
entitle his legal representatives or heirs to claim an accounting
or to take any action or proceeding in any court of competent
jurisdiction for a partition or winding up of the Trust, nor
otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them. Each Certificateholder expressly
waives any right he may have under any rule of law, or the
provisions of any statute, or otherwise, to require the Trustee
at any time to account, in any manner other than as expressly
provided in this Indenture, in respect of the Securities or
moneys from time to time received, held and applied by the
Trustee hereunder.
(c) No Certificateholder shall have any right to vote
or in any manner otherwise control the operation and management
of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth, or contained in the terms of the
Certificates, be construed so as to constitute the Certificate-
holders from time to time as partners; nor shall any Certificate-
holder ever be under any liability to any third persons by reason
of any action taken by the parties to this Indenture for any
other cause whatsoever.
ARTICLE 9
ADDITIONAL COVENANTS; MISCELLANEOUS PROVISIONS
Section 9.1. Amendments: This Indenture may be
amended from time to time by the parties hereto or their
respective successors, without the consent of any of the
Certificateholders (a) to cure any ambiguity or to correct or
supplement any provision contained herein which may be defective
or inconsistent with any other provision contained herein; (b) to
change any provision required by Securities and Exchange
Commission or any successor governmental agency to be changed; or
(c) to make such other provision in regard to matters or
questions arising hereunder as shall not adversely affect the
interests of the Certificateholders; provided, however, that the
parties hereto may not amend this Indenture so as to (1) increase
the number of Units above the number set forth in Part II of the
Reference Trust Agreement or such lesser amount as may be
outstanding at any time during the term of this Indenture, except
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as the result of the deposit of Additional Securities as herein
provided, or (2) except in the manner permitted by the Indenture
as in effect on the date of the first deposit of Securities under
a particular Indenture, permit the deposit or acquisition
hereunder of securities either in addition to or in replacement
of any of the Securities.
This Indenture may also be amended from time to time by
the Depositor and the Trustee (or the performance of any of the
provisions or this Agreement may be waived) with the expressed
written consent of holders of Certificates evidencing 66-2/3% of
the Units at the time outstanding under the Indenture for the
purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the holders of
Certificates; provided, however, that no such amendment or waiver
shall (i) reduce the interest in the Trust represented by Units
evidenced by any Certificate without the consent of the holder of
such Certificate, (ii) reduce the aforesaid percentage of Units,
the holders of which are required to consent to any such
amendment, without the consent of the holders of all Certificates
then outstanding or (iii) affect the duties, obligations and
responsibilities of the Trustee without its consent.
Promptly after the execution of any such amendment the
Trustee shall furnish written notification to all then out-
standing Certificateholders of the substance of such amendment.
Section 9.2. Termination: This Indenture and the
Trust created hereby shall terminate upon the maturity,
redemption, sale or other disposition as the case may be of the
last Security held hereunder unless sooner terminated as herein-
before specified and may be terminated at any time by written
consent of all the holders of Certificates; provided that in no
event shall the Trust continue beyond the end of the Mandatory
Termination Date specified in the prospectus for the Trust.
Written notice of any termination, specifying the time
or times at which the Certificateholders may surrender their
Certificates for cancellation shall be given by the Trustee to
each Certificateholder at his address appearing on the
registration books of the Trustee.
In the event of any termination of the Trust prior to
the Termination Date, the Trustee shall proceed to liquidate the
Securities then held and make the payments and distributions
provided for hereinafter in this Section 9.2 except that in such
event, the distribution to each Certificateholder shall be made
in cash and shall be such Certificateholder's pro rata interest
in the balance of the Principal and Income Account after the
deductions herein provided.
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In the event that the Trust terminates on the
Termination Date, the Trustee shall, not less than 20 days prior
to the Termination Date, send a written notice to each
Certificateholder of record owning, as of such date, 2,500 Units
and whose interest in the Trust would entitle him to receive at
least one share of each Security. Such notice shall allow such
Certificateholder to elect to redeem his Units at the net asset
value on the Termination Date and to receive, in partial payment
of the Redemption Price per Unit, an in-kind distribution of such
Certificateholder's pro rata share of the Securities, to the
extent of whole shares. The Trustee will honor duly executed
requests for such in-kind distribution received (accompanied by
the electing Certificateholder's Certificate) by the close of
business on the Termination Date. Certificateholders who do not
effectively request an in-kind distribution shall receive their
distribution upon termination in cash. Redemption of the Units
of Certificateholders electing such in-kind distribution shall be
made within three business days following the Termination Date
and shall consist of (i) such Certificateholder's pro rata share
of Securities (valued as of the Termination Date) to the extent
of whole shares and (ii) cash equal to the balance of such
Certificateholder's Redemption Price.
On the Termination Date, this Indenture and the Trust
created hereby shall terminate. In connection with such
Termination, the Trustee shall segregate such number of shares of
Securities as shall be necessary to satisfy in-kind distributions
to Certificateholders electing such distribution.
The balance of the Securities shall be sold over a
period of 60 business days immediately following the Termination
Date. The Depositor shall direct the Trustee to sell the
Securities in such manner as the Depositor determines will
produce the best price for the Trust. Pursuant to such
direction, the Trustee may use the services of the Depositor to
effect such sales.
Within a reasonable period of time after such
termination and liquidation of Securities, the Trustee shall:
(a) deduct from the Income Account or, to the extent
that funds are not available in such account, from the Principal
Account and pay to itself individually an amount equal to the sum
of
(1) its accrued compensation for its ordinary
recurring services,
(2) any compensation due it for its extraordinary
services, and
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(3) any other costs, expenses, advances or indemnities
as provided herein.
(b) deduct from the Income Account or, to the extent
that funds are not available in such account, from the Principal
Account and pay accrued and unpaid fees of counsel pursuant to
Section 3.9;
(c) deduct from the Income Account or the Principal
Account any amounts which may be required to be deposited in the
Reserve Account to provide for payment of any applicable taxes or
other governmental charges and any other amounts which may be
required to meet expenses incurred under this Indenture;
(d) make a final distribution from the Trust, against
surrender for cancellation of each Certificateholder's
Certificate or Certificates, such Certificateholder's pro rata
share of the cash balances of the Income and Principal Accounts
and, on the conditions set forth in Section 3.04 hereof, the
balance of the Reserve Account, if any;
(e) together with such distribution to each
Certificateholder as provided for in (d), furnish to each such
Certificateholder a final distribution statement as of the date
of the computation of the amount distributable to Certificate-
holders, setting forth the data and information in substantially
the form and manner provided for in Section 3.6 hereof; and
(f) distribute to each Certificateholder receiving the
distribution provided in paragraph (d) any dividends, which on
the Termination Date were declared, but not received, net of any
and all expenses not previously deducted, within a reasonable
time of their receipt.
The amounts to be so distributed to each Certificate-
holder shall be that pro rata share of the balance of the total
Income and Principal Accounts as shall be represented by the
Units therein evidenced by the outstanding Certificate or
Certificates held of record by such Certificateholder.
The Trustee shall be under no liability with respect to
moneys held by it in the Income, Reserve and Principal Accounts
upon termination except to hold the same in trust without
interest until disposed of in accordance with the terms of this
Indenture.
Upon the Depositor's request, the Trustee will include
in the written notice to be sent to Certificateholders referred
to in the fourth paragraph of this section a form of election
whereby Certificateholders electing a cash distribution may
express interest in investing such cash distribution in units of
another series of the Equity Securities Trust (the "New Series").
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The Trustee will inform the Depositor of all Certificateholders
who, within the time period specified in such notice, express
such interest. The Depositor will provide to such
Certificateholders any applicable sales material with respect to
the New Series and a form, acceptable to the Trustee, whereby a
Certificateholder may appoint the Trustee the Certificateholder's
agent to apply the Certificateholder's cash distribution for the
purchase of a unit or units of the New Series. Such form will
specify, among other things, the time by which it must be
returned to the Trustee in order to be effective and the manner
in which such purchase shall be made. This paragraph shall not
obligate the Depositor to create any New Series or to provide any
such investment election.
Section 9.3. Construction: This Indenture is executed
and delivered in the State of New York, and all local laws or
rules of construction of such State shall govern the rights of
the parties hereto and the Certificateholders and the
interpretation of the provisions hereof.
Section 9.4. Registration of Certificates: The
Depositor agrees and undertakes to register the Certificates with
the Securities and Exchange Commission or other applicable
governmental agency pursuant to applicable Federal or State
statutes, if such registration shall be required, and to do all
things that may be necessary or required to comply with this
provision during the term of the Trust created hereunder, and the
Trustee shall incur no liability or be under any obligation or
expense in connection therewith.
Section 9.5. Written Notice: Any notice, demand,
direction or instruction to be given to the Depositor hereunder
shall be in writing and shall be duly given if mailed or
delivered to the Depositor as follows: Xxxxx & Xxxx Distributors
L.P., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at such other
address as shall be specified by the Depositor to the Trustee in
writing. Any notice, demand, direction or instruction to be
given to the Trustee shall be in writing and shall be duly given
if mailed or delivered to the Trustee at 000 Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, or such other address as shall be specified to
the Depositor by the Trustee in writing. Any notice to be given
to the Certificateholders shall be duly given if mailed or
delivered to each Certificateholder at the address of such holder
appearing on the registration books of the Trustee.
Section 9.6. Severability: If any one or more of the
covenants, agreements, provisions or terms of this Indenture
shall be held contrary to any express provision of law or
contrary to policy or express law, though not expressly
prohibited, or against public policy, or shall for any reason
whatsoever be held invalid, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining
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covenants, agreements, provisions or terms of this Indenture and
shall in no way affect the validity or enforceability of the
other provisions of this Indenture or of the Certificates or the
rights of the holders thereof.
Section 9.7. Dissolution of Depositor Not to
Terminate: The dissolution of the Depositor from or for any
cause whatsoever shall not operate to terminate this Indenture or
the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed as of the date first above written.
[Signatures and acknowledgements on separate pages.]
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THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION), Trustee
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
Vice President
STATE OF NEW YORK )
:ss.:
COUNTY OF NEW YORK )
On this 9th day of November, 1995, before me personally
appeared Xxxxxx X. Xxxxxxxx, to me known, who being by me duly
sworn, said that he is an Authorized Signator of The Chase
Manhattan Bank (National Association), one of the corporations
described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation and that
he signed his name thereto by like authority.
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Notary Public
XXXXXXX X. XXXXXXX
NOTARY PUBLIC, STATE OF NEW YORK
NO. 01bO4950864
EXP. 5-8-97
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XXXXX & XXXX DISTRIBUTORS L.P.
Depositor
By: Xxxxx & Xxxx Asset Management, Inc.,
as General Partner of Depositor
By: /s/ Xxxxx X. XxXxxxx
-----------------------------------
Authorized Signator
STATE OF NEW YORK )
: ss:
COUNTY OF NEW YORK )
On this 15th day of November, 1995, before me
personally appeared Xxxxx X. XxXxxxx, to me known, who being by
me duly sworn, said that he is an Authorized Signator of Xxxxx &
Xxxx Asset Management, Inc. as General Partner of the Depositor,
one of the corporations described in and which executed the
foregoing instrument, and that he signed his name thereto by
authority of the Board of Directors of said corporation.
/s/ Xxxxxx Xxxxxx
-----------------------------------
Notary Public
XXXXXX XXXXXX
NOTARY PULBIC, STATE OF NEW YORK
NO. 00-0000000
EXP. 8-31-96
