Exhibit 4.2
XXXXXX XXXXXXX XXXX XXXXXX SELECT EQUITY TRUST
THE COMPETITIVE EDGE BEST IDEAS PORTFOLIO OCTOBER 1998
REFERENCE TRUST AGREEMENT
This Reference Trust Agreement dated October 15, 1998
between XXXX XXXXXX XXXXXXXX INC., as Depositor, and The Bank
of New York, as Trustee, sets forth certain provisions in full
and incorporates other provisions by reference to the document
entitled "Xxxx Xxxxxx Select Equity Trust, Trust Indenture and
Agreement" (the "Basic Agreement") dated September 30, 1993, as
amended. Such provisions as are incorporated by reference con-
stitute a single instrument (the "Indenture").
WITNESSETH THAT:
In consideration of the premises and of the mutual
agreements herein contained, the Depositor and the Trustee
agree as follows:
I.
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II hereof, all the
provisions contained in the Basic Agreement are herein incorpo-
rated by reference in their entirety and shall be deemed to be
a part of this instrument as fully and to the same extent as
though said provisions had been set forth in full in this in-
strument except that the Basic Agreement is hereby amended as
follows:
A. The first sentence of Section 2.01 is amended to
add the following language at the end of such sentence:
"and/or cash (or a letter of credit in lieu of cash) with
instructions to the Trustee to purchase one or more of
such Securities which cash (or cash in an amount equal to
the face amount of the letter of credit), to the extent
not used by the Trustee to purchase such Securities within
the 90-day period following the first deposit of Securi-
ties in the Trust, shall be distributed to Unit Holders on
the Distribution Date next following such 90-day period or
such earlier date as the Depositor and the Trustee deter-
mine".
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B. The first sentence of Section 2.06 is amended to
add the following language after "Securities"))": "and/or
cash (or a letter of credit in lieu of cash) with instruc-
tions to the Trustee to purchase one or more Additional
Securities which cash (or cash in an amount equal to the
face amount of the letter of credit), to the extent not
used by the Trustee to purchase such Additional Securities
within the 90-day period following the first deposit of
Securities in the Trust, shall be distributed to Unit
Holders on the Distribution Date next following such 90-
day period or such earlier date as the Depositor and the
Trustee determine".
C. Article III, entitled "Administration of Trust",
Section 3.01 Initial Cost shall be amended as follows:
Section 3.01 Initial Cost shall be amended to substi-
tute the following language:
SECTION 3.01. INITIAL COST The costs of organ-
izing the Trust and sale of the Trust Units shall, to
the extent of the expenses reimbursable to the De-
positor provided below, be borne by the Unit Holders,
provided, however, that, to the extent all of such
costs are not borne by Unit Holders, the amount of
such costs not borne by Unit Holders shall be borne
by the Depositor and, PROVIDED FURTHER, HOWEVER, that
the liability on the part of the Depositor under this
section shall not include any fees or other expenses
incurred in connection with the administration of the
Trust subsequent to the deposit referred to in Sec-
tion 2.01. Upon notification from the Depositor that
the primary offering period is concluded, the Trustee
shall withdraw from the Account or Accounts specified
in the Prospectus or, if no Account is therein speci-
fied, from the Principal Account, and pay to the De-
positor the Depositor's reimbursable expenses of or-
ganizing the Trust and sale of the Trust Units in an
amount certified to the Trustee by the Depositor. If
the balance of the Principal Account is insufficient
to make such withdrawal, the Trustee shall, as di-
rected by the Depositor, sell Securities identified
by the Depositor, or distribute to the Depositor Se-
curities having a value, as determined under Section
4.01 as of the date of distribution, sufficient for
such reimbursement. The reimbursement provided for
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in this section shall be for the account of the Uni-
tholders of record at the conclusion of the primary
offering period and shall not be reflected in the
computation of the Unit Value prior thereto. As used
herein, the Depositor's reimbursable expenses of or-
ganizing the Trust and sale of the Trust Units shall
include the cost of the initial preparation and type-
setting of the registration statement, prospectuses
(including preliminary prospectuses), the indenture,
and other documents relating to the Trust, SEC and
state blue sky registration fees, the cost of the
initial valuation of the portfolio and audit of the
Trust, the initial fees and expenses of the Trustee,
and legal and other out-of-pocket expenses related
thereto, but not including the expenses incurred in
the printing of preliminary prospectuses and prospec-
tuses, expenses incurred in the preparation and
printing of brochures and other advertising materials
and any other selling expenses. Any cash which the
Depositor has identified as to be used for reimburse-
ment of expenses pursuant to this Section shall be
reserved by the Trustee for such purpose and shall
not be subject to distribution or, unless the Deposi-
tor otherwise directs, used for payment of redemp-
tions in excess of the per-Unit amount allocable to
Units tendered for redemption.
D. The third paragraph of Section 3.05 is hereby
amended to add the following sentence after the first sen-
tence thereof: "Depositor may direct the Trustee to in-
vest the proceeds of any sale of Securities not required
for the redemption of Units in eligible money market in-
struments selected by the Depositor which will include
only negotiable certificates of deposit or time deposits
of domestic banks which are members of the Federal Deposit
Insurance Corporation and which have, together with their
branches or subsidiaries, more than $2 billion in total
assets, except that certificates of deposit or time depos-
its of smaller domestic banks may be held provided the de-
posit does not exceed the insurance coverage on the in-
strument (which currently is $100,000), and provided fur-
ther that the Trust's aggregate holding of certificates of
deposit or time deposits issued by the Trustee may not ex-
ceed the insurance coverage of such obligations and U.S.
Treasury notes or bills (which shall be held until the ma-
turity thereof) each of which matures prior to the ear-
lier of the next following Distribution Date or 90 days
after receipt, the principal thereof and interest thereon
(to the extent such interest is not used to pay Trust ex-
penses) to be distributed on the earlier of the 90th day
after receipt or the next following Distribution Date."
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E. The first sentence of each of Sections 3.10,
3.11 and 3.12 is amended to insert the following language
at the beginning of such sentence, "Except as otherwise
provided in Section 3.13,".
F. The following new Section 3.13 is added
SECTION 3.13. EXTRAORDINARY EVENT-SECURITY RE-
TENTION AND VOTING. In the event the Trustee is no-
tified of any action to be taken or proposed to be
taken by holders of the securities held by the Trust
in connection with any proposed merger, reorganiza-
tion, spin-off, split-off or split-up by the issuer
of stock or securities held in the Trust, the Trustee
shall take such action or refrain from taking any ac-
tion, as appropriate, so as to insure that the secu-
rities are voted as closely as possible in the same
manner and in the same general proportion as are the
securities held by owners other than the Trust. If
stock or securities are received by the Trustee, with
or without cash, as a result of any merger, reorgani-
zation, spin-off, split-off or split-up by the issuer
of stock or securities held in the Trust, the Trustee
at the direction of the Depositor may retain such
stock or securities in the Trust. Neither the De-
positor nor the Trustee shall be liable to any person
for any action or failure to take action with respect
to this section.
G. Section 1.01 is amended to add the following
definition: (9) "Deferred Sales Charge" shall mean any
deferred sales charge payable in accordance with the pro-
visions of Section 3.14 hereof, as set forth in the pro-
spectus for a Trust. Definitions following this defini-
tion (9) shall be renumbered.
H. Section 3.05 is hereby amended to add the fol-
lowing paragraph after the end thereof: On each Deferred
Sales Charge payment date set forth in the prospectus for
a Trust, the Trustee shall pay the account created pursu-
ant to Section 3.14 the amount of the Deferred Sales
Charge payable on each such date as stated in the prospec-
tus for a Trust. Such amount shall be withdrawn from the
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Principal Account from the amounts therein designated for
such purpose.
I. Section 3.06B(3) shall be amended by adding the
following: "and any Deferred Sales Charge paid".
J. Section 3.08 shall be amended by adding the fol-
lowing at the end thereof: "In order to pay the Deferred
Sales Charge, the Trustee shall sell or liquidate an
amount of Securities at such time and from time to time
and in such manner as the Depositor shall direct such that
the proceeds of such sale or liquidation shall equal the
amount required to be paid to the Depositor pursuant to
the Deferred Sales Charge program as set forth in the pro-
spectus for a Trust.
K. Section 3.14 shall be added as follows:
SECTION 3.14. DEFERRED SALES CHARGE. If the
prospectus for a Trust specifies a Deferred Sales
Charge, the Trustee shall, on the dates specified in
and as permitted by the prospectus, withdraw from the
Income Account if such account is designated in the
prospectus as the source of the payments of the De-
ferred Sales Charge, or to the extent funds are not
available in that account or if such account is not
so designated, from the Principal Account, an amount
per Unit specified in the prospectus and credit such
amount to a special, non-Trust account maintained at
the Trustee out of which the Deferred Sales Charge
will be distributed to the Depositor. If the Income
Account is not designated as the source of the De-
ferred Sales Charge payment or if the balances in the
Income and Principal Accounts are insufficient to
make any such withdrawal, the Trustee shall, as di-
rected by the Depositor, either advance funds, if so
agreed to by the Trustee, in an amount equal to the
proposed withdrawal and be entitled to reimbursement
of such advance upon the deposit of additional monies
in the Income Account or the Principal Account, sell
Securities and credit the proceeds thereof to such
special Depositor's account or credit Securities in
kind to such special Depositor's Account. Such di-
rections shall identify the Securities, if any, to be
sold or distributed in kind and shall contain, if the
Trustee is directed by the Depositor to sell a Secu-
rity, instructions as to execution of such sales. If
a Unit Holder redeems Units prior to full payment of
the Deferred Sales Charge, the Trustee shall, if so
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provided in the prospectus, on the Redemption Date,
withhold from the Redemption Price payment to such
Unit Holder an amount equal to the unpaid portion of
the Deferred Sales Charge and distribute such amount
to such special Depositor's account or, if the De-
positor shall purchase such Unit pursuant to the
terms of Section 5.02 hereof, the Depositor shall pay
the Redemption Price for such Unit less the unpaid
portion of the Deferred Sales Charge. The Depositor
may at any time instruct the Trustee to distribute to
the Depositor cash or Securities previously credited
to the special Depositor's account.
L. The Distribution Agency Agreement is amended to
be applicable to the Xxxxxx Xxxxxxx Xxxx Xxxxxx Select Eq-
uity Trust, The Competitive Edge Best Ideas Portfolio se-
xxxx.
M. Reference to "Xxxx Xxxxxx Select Equity Trust"
is replaced by "Xxxxxx Xxxxxxx Xxxx Xxxxxx Select Equity
Trust".
II.
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby
agreed to:
A. The Trust is denominated Xxxxxx Xxxxxxx Xxxx
Xxxxxx Select Equity Trust, The Competitive Edge Best Ideas
Portfolio October 1998 (the "Best Ideas Trust").
B. The publicly traded stocks listed in Schedule A
hereto are those which, subject to the terms of this Indenture,
have been or are to be deposited in trust under this Indenture.
C. The term, "Depositor" shall xxxx Xxxx Xxxxxx
Xxxxxxxx Inc.
D. The aggregate number of Units referred to in
Sections 2.03 and 9.01 of the Basic Agreement is 25,000 for the
Best Ideas Trust.
E. A Unit is hereby declared initially equal to
1/25,000th for the Best Ideas Trust.
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F. The term "In-Kind Distribution Date" shall mean
December 30, 1999.
G. The term "Record Dates" shall mean March 1, 1999
and January 21, 2000 and such other date as the Depositor
may direct. (Such dates are set forth for the purposes of dis-
tribution to Unit Holders. Trust expenses shall be paid quar-
terly.)
H. The term "Distribution Dates shall mean March 15,
1999 and on or about January 28, 2000 and such other date as the Depositor
may direct. (Such dates are set forth for the purposes of
distribution to Unit Holders. Trust expenses shall be paid
quarterly.)
I. The term "Termination Date" shall mean January 21,
2000.
J. The Depositor's Annual Portfolio Supervision Fee
shall be a maximum of $0.25 per 100 Units.
K. The Trustee's Annual Fee as defined in Section
6.04 of the Indenture shall be $.80 per 100 Units.
L. For a Unit Holder to receive an "in-kind" dis-
tribution during the life of the Trust, such Unit Holder must
tender at least 25,000 Units for redemption. There is no mini-
mum amount of Units that a Unit Holder must tender in order to
receive an "in-kind" distribution on the In-Kind Date or in
connection with a rollover.
M. The Indenture is amended to provide that the pe-
riod during which the Trustee shall liquidate the Trust Securi-
ties shall not exceed 14 business days commencing on the first
business day following the In-Kind Date.
(Signatures and acknowledgments on separate pages)
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The Schedule of Portfolio Securities in the prospec-
tus included in this Registration Statement is hereby incorpo-
rated by reference herein as Schedule A hereto.
