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GOVERNMENT SECURITIES EQUITY TRUST
TRUST INDENTURE AND AGREEMENT
for all series formed on or subsequent to the
effective date specified below
Among
PRUDENTIAL-BACHE SECURITIES INC.
As Depositor
UNITED STATES TRUST COMPANY OF NEW YORK
As Trustee
STANDARD & POOR'S CORPORATION
As Evaluator
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Dated: May 16, 1989
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TRUST INDENTURE AND AGREEMENT
GOVERNMENT SECURITIES EQUITY TRUST
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
ARTICLE II
DEPOSIT OF SECURITIES; ACCEPTANCE OF TRUST;
ISSUANCE OF UNITS; FORM OF CERTIFICATES
Section 2.01. Deposit of Securities.................................12
Section 2.02. Acceptance of Trust...................................12
Section 2.03. Issue of Units........................................12
Section 2.04. Form of Certificates..................................13
Section 2.05. Deposit of Additional Securities......................13
Section 2.06. Register of Units.....................................13
ARTICLE III
ADMINISTRATION OF TRUST
Section 3.01. Initial Costs.........................................14
Section 3.02. Income Account........................................14
Section 3.03. Principal Account.....................................14
Section 3.04. Reserve Account.......................................14
Section 3.05. Distribution........................ .................15
Section 3.06. Distribution Statements...............................17
Section 3.07. Replacement Securities................................19
Section 3.08. Sale of Securities................... ................19
Section 3.09. Notice and Sale by Trustee............................20
Section 3.10. Notice to Depositor...................................20
Section 3.11. Trustee Not to Amortize...............................21
Page
ARTICLE IV
EVALUATION OF SECURITIES; EVALUATOR
Section 4.01. Evaluation by Evaluator...............................21
Section 4.02. Tax Reports...........................................21
Section 4.03. Evaluator's Compensation.............. ...............22
Section 4.04. Liability of Evaluator................................22
Section 4.05. Successor Evaluator...................................22
ARTICLE V
TRUST EVALUATION; REDEMPTION, PURCHASE, TRANSFER,
INTERCHANGE OR REPLACEMENT OF CERTIFICATES
Section 5.01. Trust Evaluation....................... ..............23
Section 5.02. Redemptions by Trustee; Purchases by Depositor........24
Section 5.03. Transfer or Interchange of Certificates...............26
Section 5.04. Certificates Mutilated, Destroyed, Stolen-or Lost.....26
ARTICLE VI
TRUSTEE
Section 6.01. General Definition of Trustee's Liabilities, Rights and
Duties................................................27
Section 6.02. Books, Records and Reports........ ..............30
Section 6.03. Indenture and List of Securities on File..............31
Section 6.04. Compensation..........................................31
Section 6.05. Removal and Resignation of Trustee; Successor.........32
Section 6.06. Qualifications of Trustee.............................34
ARTICLE VII
RIGHTS OF UNIT HOLDERS
Section 7.01. Beneficiaries of Trust................................34
Section 7.02. Rights, Terms and Conditions..........................34
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Page
ARTICLE VIII
DEPOSITOR
Section 8.01. Liabilities; Power of Attorney.............. .........35
Section 8.02. Discharge.............................................35
Section 8.03. Successors............................................36
Section 8.04. Resignation...........................................37
Section 8.05. Additional Depositors.................................37
Section 8.06. Exclusions from Liability.............................37
ARTICLE IX
ADDITIONAL COVENANTS; MISCELLANEOUS PROVISIONS
Section 9.01. Amendments....................... ....................38
Section 9.02. Notice of Amendment...................................39
Section 9.03. Termination...........................................39
Section 9.04. Construction..........................................41
Section 9.05. Registration of Units.................................41
Section 9.06. Written Notice........................................41
Section 9.07. Severability..................... ....................42
Section 9.08. Dissolution of Depositors Not to Terminate............42
Section 9.09. Name..................................................42
EXECUTION......................................................... ........43
ACKNOWLEDGMENTS............................................................44
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This Table of Contents does not constitute part of the Indenture.
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TRUST INDENTURE AND AGREEMENT dated May 16, 1989 among PRUDENTIAL-BACHE
SECURITIES INC. as Depositor, United States Trust Company of New York as
Trustee, and Standard & Poor's Corporation as Evaluator.
WITNESSETH that:
WHEREAS, Prudential-Bache Securities Inc., the Trustee and the Evaluator
are entering into this Trust Indenture and Agreement for the purpose of
establishing certain of the terms, covenants and conditions of the Government
Securities Equity Trust Series 1, and each subsequent Series which may be
established from time to time hereafter, incorporating by reference the terms
hereof; and
WHEREAS, for the Government Securities Equity Trust Series 1, and each
subsequent Series of the Government Securities Equity Trust, to which this Trust
Indenture and Agreement is applicable, the Depositor, the Trustee, and the
Evaluator shall execute a separate Reference Trust Agreement incorporating by
reference this Trust Indenture and Agreement 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 United States
Treasury obligations and Fund Shares deposited in trust and the number of Units
delivered by the Trustee in exchange for the United States Treasury Obligations
and Fund Shares pursuant to Section 2.03; (ii) the initial fractional undivided
interest represented by each Unit in each Trust; (iii) the first Settlement
Date; (iv) the first Quarterly Computation Date; (v) the first Quarterly
Distribution Date; (vi) the first Quarterly Record Date; (vii) the name of the
Depositor; and (viii) any other change or addition contemplated or permitted by
this Trust Indenture and Agreement; and
WHEREAS, the Depositor will acquire and, concurrently with the execution
and delivery of the appropriate Reference Trust Agreement, will deposit in trust
with the Trustee the United States Treasury Obligations and Fund Shares to be
listed in the Schedules thereto, all to be held by the Trustee in trust upon the
terms and conditions hereinafter set forth as amended, supplemented or varied by
such Reference Trust Agreement, for the use and benefit of all registered
holders of units of fractional undivided interest in the Trust to which such
Reference Trust Agreement relates; and
WHEREAS, concurrently with the receipt of the aforesaid deposit, the
Trustee will record on its books the ownership by the Depositor thereof of units
of fractional undivided interest in such Securities and in the Income Account
and the Principal Account maintained under this Indenture in the manner
hereinafter provided (which units of fractional undivided interest so recorded
respectively will represent in the aggregate 110% of the beneficial interest
established hereby in such Securities, Income Account and Principal Account) and
will execute in the name of the Depositor thereof certificates representing the
ownership of the
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aggregate number of Units specified in such Reference Trust
Agreement (hereinafter called the "Certificates"); and
WHEREAS, the form of the Certificates shall be substantially as follows:
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No. ______ ________ Units
CERTIFICATE OF OWNERSHIP
--evidencing--
An Undivided Interest
--in the--
GOVERNMENT SECURITIES EQUITY TRUST
SERIES
CUSIP
[-----------]
[-----------]
This is to certify that _______ is the owner and registered holder of this
Certificate evidencing the ownership of Unit(s) of undivided interest in the
Series of the Government Securities Equity Trust that is specified on the face
hereof (hereinafter called the "Trust"). The Trust was created by the Trust
Indenture and Agreement applicable to this Series of the Government Securities
Equity Trust, as amended, supplemented or varied by the Reference Trust
Agreement applicable to this Series of the Government Securities Equity Trust
(such Trust Indenture and Agreement as amended, supplemented or varied by such
Reference Trust Agreement being hereinafter called the "Indenture"), among
PRUDENTIAL-BACHE SECURITIES INC. (hereinafter called the 'Depositor"), United
States Trust Company of New York (hereinafter called the "Trustee") and Standard
& Poor's Corporation (hereinafter called the "Evaluator"). The Trust consists of
(1) such of the United States Treasury Obligations (hereinafter called the
"Treasury Obligations") and mutual fund shares (hereinafter called the "Fund
Shares") listed in the Schedule of the Reference Trust Agreement relating to the
Trust, and contracts for the purchase of such securities and certified checks,
cash or an irrevocable letter of credit issued by a commercial bank, or a
combination thereof in the amount required for such purpose (collectively
referred to as the "Securities") and such of the Additional Securities that may
be deposited in the Trust, and any other securities that may be deposited in the
Trust as Replacement Securities, as may from time to time continue to be held as
part of the Trust and (2) such cash amounts as from time to time may be held in
the Income Account and the Principal Account for the Trust maintained under the
Indenture in the manner described in this Certificate.
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At any given time this Certificate shall represent a fractional undivided
interest in the Trust, the numerator of which fraction shall be the number of
Units set forth on the face hereof and the denominator of which shall be the sum
of the total of all Units of the Trust which are outstanding at such time.
The Depositor hereby grants and conveys all of its 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, all the terms, conditions and covenants of which
are incorporated herein as if fully set forth at length.
The registered holder of this Certificate is entitled at any time upon
tender of this Certificate to the Trustee at its corporate trust office in the
City of New York, and upon payment of any tax or other governmental charges, to
receive, on the seventh calendar day following the day on which such tender is
made, or, if such calendar day is not a business day, on the first business day
prior to such calendar day, an amount in cash equal to the evaluation of the
fractional undivided interest in the Trust evidenced by this Certificate, upon
the basis provided for in the Indenture. The right of redemption may be
suspended and the date of payment may be postponed for any period during which
the New York Stock Exchange is closed or trading on that Exchange is restricted,
for any period during which an emergency exists so that disposal of the
Securities held in the Trust is not reasonably practicable or it is not
reasonably practicable to determine fairly the value of such Securities, or for
such other periods as the Securities and Exchange Commission may by order
permit.
Dividend income and l2b-1 fee rebate amounts received by the Trustee as
part of the Trust shall be credited by the Trustee to the Income Account of the
Trust. The fractional undivided interest represented by this Certificate in the
balance in the Income Account of the Trust (after the deductions referred to
below) shall be computed as of the Quarterly Computation Date and paid on or
shortly after the Quarterly Distribution Date to Unit Holders of record on the
Quarterly Record Date immediately preceding the Quarterly Distribution Date. The
next computation shall be made as of the next succeeding Quarterly Computation
Date, and thereafter as of each succeeding Quarterly Computation Date.
All monies (other than dividend income and 12b-1 fee rebate amounts)
received by the Trustee as part of the Trust (including amounts received from
the sale, liquidation, redemption or maturity of any Securities held in the
Trust) shall be credited by the Trustee to a separate Principal Account. The
fractional undivided interest represented by this Certificate in the cash
balance in the Principal Account of the Trust (after the deductions referred to
below) shall be computed quarterly as of the Quarterly Computation Date. An
amount in cash equal to the sum of said fractional undivided interest in the
Income and Principal Accounts, shall be distributed on the Quarterly
Distribution Date or within a reasonable period of time thereafter, to Unit
Holders of record on the Quarterly Record Date immediately preceding the
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Quarterly Distribution Date. Notwithstanding the foregoing, the Trustee shall
not be required to make a distribution unless the aggregate cash balance
available for distribution in the Income and Principal Accounts is at least
$2.50 per 110 Units. However, not less than once per year, on a Quarterly
Distribution Date, the Trustee shall distribute the entire cash balance in the
Income and Principal Accounts available for distribution unless the Trustee
receives the agreement of the Depositor to forego a distribution.
Distributions from the Income and Principal Accounts shall be made by mail
at the post office address of the holder hereof appearing in the registration
books of the Trustee.
From time to time deductions shall be made from the Income Account and
Principal Account, as more fully set forth in the Indenture, for redemptions of
Units, compensation of the Trustee and Evaluator, reimbursement of certain
expenses incurred by or on behalf of the Trustee, certain legal expenses and
payment of, or the establishment of a reserve for, applicable taxes, if any.
Within a reasonable period of time after the end of each calendar year, but
not later than the time required by any applicable law, the Trustee shall
furnish to the registered holder of this Certificate a statement setting forth,
among other things, the amounts received and deductions therefrom and the
amounts distributed during the preceding year in respect of dividend income,
capital gain, and sales, redemptions, liquidation, or maturities of Securities
held in the Trust.
This Certificate shall be transferable by the registered holder hereof by
presentation and surrender hereof at the corporate 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 registered
holder hereof or his authorized attorney. Certificates of the Trust are
interchangeable for one or more Certificates in an equal aggregate number of
units of undivided interest in the Trust at the corporate trust office of the
Trustee, in denominations of a single unit of undivided interest or any multiple
thereof.
The holder hereof may be required to pay a charge of $2.00 per Certificate
issued in connection with the transfer or interchange of this Certificate and
will be required to pay any tax or other governmental charge that may be imposed
in connection with the transfer, interchange or other surrender of this
Certificate.
The holder of this Certificate, by virtue of the acceptance hereof, assents
to and shall be bound by the terms of the Indenture, a copy of which is on file
and available for inspection at the corporate trust office of the Trustee, to
which reference is made for all the terms, conditions and covenants thereof.
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The Trustee may deem and treat the person in whose name this Certificate is
registered upon the books of the Trustee as the owner hereof for all purposes
and the Trustee shall not be affected by any notice to the contrary.
The Trust shall terminate upon the maturity, redemption, sale or other
disposition of the last Security held therein, provided, however, that in no
event shall the Indenture and the Trust continue beyond the date set forth in
Part II of the Reference Trust Agreement. The Indenture also provides that the
Trust may be terminated at any time by the written consent of the holders of 51%
of the units of undivided interest in the Trust and under certain circumstances
which include a decrease in the aggregate value of the Trust assets to less than
40% of the maturity amounts of the Treasury Obligations calculated after the
most recent deposit of the Treasury Obligations in the Trust. Upon any
termination, the Trustee shall fully liquidate the Securities then held, if any
(unless the Unit Holder notifies the Trustee, in writing, of an election to
receive Fund Shares in-kind, in which event the Trustee shall distribute to the
Unit Holder such amount of Fund-Shares in-kind), and distribute pro rata the
cash and property then held in the Trust upon surrender of the Certificates, all
in the manner provided in the Indenture. Upon termination, the Trustee shall be
under no further obligation with respect to the Trust, except to hold the funds
in trust without interest until distribution as aforesaid and shall have no duty
upon any such termination to communicate with the holder hereof other than by
mail at the address of such holder appearing in the registration books of the
Trustee.
This Certificate shall not become valid or binding for any purpose until
properly executed by the Trustee under the Indenture.
IN WITNESS WHEREOF, Prudential-Bache Securities Inc. has caused this
Certificate to be executed in facsimile by its Senior Vice President; and United
States Trust Company of New York, as Trustee, has caused this Certificate to be
executed in its corporate name by an authorized officer.
Dated:
PRUDENTIAL-BACHE SECURITIES
INC., DEPOSITOR
By:____________________________
Senior Vice President
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XXXXXX XXXXXX TRUST COMPANY OF
NEW YORK, TRUSTEE
By:___________________________
Authorized Officer
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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 UNIF GIFT MIN ACT _____ Custodian ______
(Cust) (Minor)
TEN ENT as tenants by the under Uniform Gifts to Minors
entireties
JT TEN as joint tenants with right Act________________________________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
For Value Received ___________________________________________________________
Please insert Social Security or Other
Identifying Number of Assignee
[ ]
hereby sells, assigns and transfers unto________________________________________
the within Certificate and does hereby irrevocably constitute and appoint ______
______________________________________________________________ attorney, to
transfer the within Certificate on the books of the Trustee, with full power of
substitution in the premises.
Dated:
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The signature(s) to this assignment
must correspond with the name(s) as
written upon the face of the
certificate without alteration or
enlargement or any change whatever.
Signature guarantee should be made
by the Depositor, a member of the
New York, American, Midwest or
Pacific Stock Exchange, or by a
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commercial bank or trust company
having its principal office or
correspondent in the City of New
York.
Signature Guarantee
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NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the Depositor, the Trustee and the Evaluator agree
as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Whenever used in this Indenture the following words and
phrases, unless the context clearly indicates otherwise, shall have the
following meanings:
(1) "Additional Securities" shall mean such Securities (as defined herein) as
are listed in Supplementary Schedules of the Reference Trust Agreement and
which have been deposited to effect an increase over the number of Units
initially specified in Part II of the Reference Trust Agreement.
(2) "Additional Units" shall mean such Units (as defined herein) as are issued
in respect of Additional Securities.
(3) "Basic Agreement" shall mean this Trust Indenture and Agreement dated as
indicated on the cover page hereof as originally executed, or if amended as
hereinafter provided, as so amended, exclusive of the terms contained in
any related Reference Trust Agreement.
(4) "Business day" shall mean any day other than a Saturday or Sunday or, in
the City of New York, a legal holiday, or a day on which banking
institutions are authorized by law to close.
(5) "Certificate" shall mean any one of the certificates executed by the
Trustee and the Depositor evidencing ownership of an undivided fractional
interest in the Trust.
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(6) "Contract Securities" shall mean Securities which are to be acquired by the
Trust pursuant to contracts which have been assigned to the Trustee,
including (i) Securities listed in the Schedule to the Reference Trust
Agreement and Supplementary Schedules thereto and (ii) Securities which the
Depositor has contracted to purchase for the Trust pursuant to Section
3.07.
(7) "Depositor" of the Trust shall have the meaning assigned to it in Part II
of the Reference Trust Agreement.
(8) "Evaluation Time" shall mean 4:15 P.M. New York Time.
(9) "Evaluator" shall mean Standard & Poor's Corporation or any corporation
into which such firm may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which such
firm shall be a party, or any firm succeeding to all or substantially all
of the business of such firm; or any successor evaluator as hereinafter
provided for.
(10) "Fund" shall mean the mutual fund set forth in Part II of the Reference
Trust Agreement.
(11) "Fund Shares" shall mean shares of the Fund set forth in Part II of the
Reference Trust Agreement relating to such Trust or contracts and funds for
the purchase thereof.
(12) "Indenture" shall mean the Basic Agreement, as further amended,
supplemented or varied by the Reference Trust Agreement.
(13) "Quarterly Computation Date" of a Trust shall have the meaning assigned to
it in Part II of the Reference Trust Agreement relating to such Trust.
(14) "Quarterly Distribution Date" of a Trust shall have the meaning assigned to
it in Part II of the Reference Trust Agreement relating to such Trust.
(15) "Quarterly Record Date" of a Trust shall have the meaning assigned to it in
Part II of the Reference Trust Agreement relating to such Trust.
(16) "Reference Trust Agreement" shall mean a supplement to the Basic Agreement,
the purpose of which shall be to amend, supplement and/or vary certain of
the terms contained in the Basic Agreement. Each Reference Trust Agreement
together with the Basic Agreement to the extent that such Reference Trust
Agreement incorporates it by reference, defines all the terms, rights and
duties relevant to the series of the Government Securities Equity Trust, to
which such Reference Trust Agreement relates.
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(17) "Replacement Treasury Obligation" shall mean a Treasury Obligation
purchased by the Trustee pursuant to Section 3.07 hereof.
(18) "Securities" shall mean both the Fund Shares and the United States Treasury
Obligations deposited in trust and listed on a schedule attached to the
Reference Trust Agreement and on any supplemental schedule thereto,
including contracts for the purchase of such securities, and certified
checks, cash or an irrevocable letter of credit issued by a commercial
bank, or a combination thereof in the amount required for such purpose.
(19) "Trust" shall mean the trust created by this Indenture, which trust shall
be denominated as indicated in Part II of the Reference Trust Agreement
relating to such trust and which shall consist of the Securities held
pursuant and subject to this Indenture together with all undistributed
dividend income or other amounts received or accrued thereon, and any
undistributed net capital gains and proceeds realized from the disposition
of Securities.
(20) "Trustee" shall mean United States Trust Company of New York, or any
successor trustee as hereinafter provided for.
(21) "Unit" shall represent a fractional undivided interest in and ownership of
the Trust initially equal to the fraction specified for the Trust in Part
II of the Reference Trust Agreement relating to the Trust. From time to
time, the denominator of each of these fractions shall be decreased by the
number of any such Units redeemed as provided in Section 5.02 hereof and
increased by the number of any Additional Units created pursuant to Section
2.05 hereof.
(22) "Unit Holder" shall mean the registered holder of any unit as recorded on
the books of the Trustee, his legal representatives and heirs and the
successors of any other legal entity which is a registered holder of any
unit and as such shall be deemed a beneficiary of the Trust created by this
Indenture to the extent of his pro rata share thereof.
(23) "United States Treasury Obligations" ("Treasury Obligation(s)") shall mean
debt obligations of the government of the United States or agencies thereof
or obligations of an entity the payment of which is guaranteed by the full
faith and credit of the United States, which have been stripped of their
unmatured interest coupons or such coupons or receipts or certificates
evidencing such obligations or coupons or contracts and funds for the
purchase thereof. The obligor or guarantor of each obligation is the U.S.
Government. Such obligations may include certificates that represent
ownership of the payments that comprise a U.S. government bond.
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(24) Words importing the singular number shall include the plural number in each
case and vice versa, and words importing persons shall include
corporations, and associations, as well as natural persons.
(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) "12b-1 fee rebate" shall mean, where applicable, an amount of money
received by the Trustee in respect of l2b-1 fees assessed on particular
Fund Shares held by the Trust.
ARTICLE II
DEPOSIT OF SECURITIES; ACCEPTANCE OF TRUST;
ISSUANCE OF UNITS; FORM OF CERTIFICATES
Section 2.01. Deposit of Securities: The Depositor, concurrently with the
execution and delivery of the Reference Trust Agreement, has deposited with the
Trustee in trust the Securities listed in the Schedule or Schedules attached to
such Reference Trust Agreement in bearer form or duly endorsed in blank or
accompanied by all necessary instruments of assignment and transfer in proper
form to be held, administered and applied by the Trustee as herein provided. 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 3.07 applies, within such shorter period
as if specified in Section 3.07.
Section 2.02. Acceptance of Trust: The Trustee hereby accepts the Trust
created by this Indenture for the use and benefit of the Unit Holders in the
Trust, subject to the terms and conditions of this Indenture.
Section 2.03. Issue of Units: By executing the Reference Trust Agreement,
the Trustee will thereby acknowledge receipt of the deposit relating to the
Trust to which such Reference Trust Agreement relates, referred to in Section
2.01, and simultaneously with the receipt of said deposit, will execute
Certificates substantially in the form above recited representing the ownership
of all Units of the Trust as specified in Part II of the Reference Trust
Agreement and deliver same to the Depositor.
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The Trusts created by this Indenture are separate and distinct trusts for
all purposes and the assets of one such trust may not be commingled with the
assets of any other nor shall the expenses of any such trust be charge against
the other. The Certificates representing the ownership of a fractional undivided
interest in one Trust shall not be exchangeable for certificates representing
the ownership of an undivided fractional interest in any other.
Section 2.04. Form of Certificates: Each Certificate referred to in Section
2.03 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 a Senior Vice President of the Depositor of the
Trust to which the Certificate relates, and dated the date of execution and
delivery by the Trustee.
Section 2.05. Deposit of Additional Securities: From time to time and in
the discretion of the Depositor, the Depositor may make deposits of Additional
Securities, provided that the proportional relationship between the maturity
amount of the Treasury Obligations and the number of Fund Shares immediately
prior to such deposit is maintained; also provided that any additional Treasury
Obligations are substantially identical with those then held in the Trust. Each
deposit of Additional Securities shall be listed in and made in accordance with
a Supplementary Schedule 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 Supplementary Schedule receipt of the deposit,
and simultaneously with the receipt of said deposit, reflect the aggregate
number of Additional Units specified in such Supplementary Schedule by executing
Certificates representing the ownership of such Units and deliver same to the
Depositor. 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 a Supplementary Schedule 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 by the Trustee with regard to any
Additional Securities listed on such Supplementary Schedule 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.
Section 2.06. Register of Units: A register shall be kept by the Trustee
containing the names and addresses of Unit Holders and the number of Units owned
by each Unit Holder, and in which all issues, exchanges, transfers and
cancellations of Units shall be recorded.
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ARTICLE III
Administration of Trust
Section 3.01. Initial Costs: With respect to each Trust, the cost of the
initial preparation, printing and execution of the Certificates and this
Indenture, and other reasonable expenses in connection therewith shall be paid
by the Depositor and/or such other entity as the Depositor shall determine;
provided, however, that the liability on the part of the Depositor for such
initial costs, fees and expenses shall not include any fees, costs or other
expenses incurred in connection herewith after the execution and delivery of
this Indenture, and the deposit relating to the Trust, referred to in Section
2.01.
Section 3.02. Income Account: The Trustee shall collect the dividend income
on (the Securities in the Trust as such are paid, and all 12b-1 fee rebate
amounts, and credit such amounts to a separate account to be known as the
"Income Account."
Section 3.03. Principal Account: The Securities in the Trust and all
monies, including capital gains paid on the Fund Shares, other than amounts
credited to the Income Account for the Trust, received by the Trustee in respect
of the Securities in the Trust shall be credited to a separate account for the
Trust to be known as the "Principal Account" for the Trust.
Section 3.04. Reserve Account: From time to time the Trustee shall withdraw
from the Principal Account to the extent funds on deposit in the Income Account
are not sufficient 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 the Trust. Such amounts so withdrawn shall be
credited to a separate account for the Trust which shall be known as the
"Reserve Account." The Trustee shall not be required to distribute to the Unit
Holders 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 account from which it was
withdrawn or, if such Trust has been terminated or is in the process of
termination, the Trustee shall distribute to each Unit Holder thereof such
holder's interest in the Reserve Account of such Trust in accordance with
Section 9.03.
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Section 3.05. Distribution: As of each Quarterly Computation Date for the
Trust, the Trustee shall:
(a) 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 on account of its
services theretofore performed and its expenses, losses and liabilities
theretofore incurred pursuant to Section 6.04;
(b) deduct from the Income Account, or, to the extent funds are not available
in such Account, from the Principal Account and pay to the Evaluator the
amount that it is at the time entitled to receive pursuant to Section 4.03;
and
(c) deduct from the Income Account, or, to the extent funds are not available
in such Income Account, from the Principal Account, an amount equal to the
unpaid fees and expenses, if any, including registration charges, 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 Units and the Trust on a
current basis pursuant to Section 9.05, 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. if the cash dividend, 12b-1 fee rebate
and capital gains distributions to the Trust are insufficient to provide
for amounts payable pursuant to paragraphs (a), (b), and (c) of this
Section 3.05, the Trustee has the power to sell Fund Shares (not Treasury
Obligations) to pay such amounts.
On each Quarterly Distribution Date or within a reasonable period of time
thereafter, the Trustee shall provide the following distribution elections: (1)
distributions by mail to each Unit Holder of record at the close of business on
the immediately preceding Quarterly Record Date at his post office address as
shown on the books of the Trustee of such Unit Holder's pro rata share of the
balance of the Income Account, computed as of the preceding Quarterly
Computation Date for the Trust, plus such Unit Holder's pro rata share of the
distributable cash balance of the Principal Account of the Trust, computed as of
the preceding Quarterly Record Date for the Trust, except as reduced by (x) any
amounts deducted pursuant to Paragraphs (a), (b) and (c) of this Section 3.05
and (y) any amounts needed to redeem Units pursuant to Section 5.02 hereof, (2)
investment of the amount otherwise distributable pursuant to election (1) above
in Fund Shares, or (3) distributions to be made to the designated agent for any
other investment program, when, as and if, available to the Unit Holder through
the Depositor. If no election is offered by the Depositor or if no election is
specified by the Unit Holder at the time of purchase of any Unit, distributions,
if any, shall be made by mail to the Unit Holder as provided in (1) above. Once
a distribution election has been chosen by the Unit Holder, such election shall
remain in effect until changed by the Unit Holder. Such change of election may
be made by notification thereof to the Trustee. A transferee of any Unit may
make his distribution election in the manner as set forth above. The Trustee
shall be entitled to receive in writing a notification from the Unit Holder as
to his or her change of address. Notwithstanding the foregoing, the Trustee
shall not be required to make a distribution unless the aggregate cash balance
available for distribution in the Income and Principal Accounts is at least
$2.50 per 110 Units. However, not less than once per year, on a Quarterly
Distribution Date, the Trustee shall distribute the entire cash balance in the
Income and Principal Accounts available for distribution unless the Trustee
receives the agreement of the Depositor to forego a distribution.
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If the Depositor fails to replace any failed Treasury Obligation in
accordance with Section 3.07, the Trustee shall distribute to all Unit Holders
the cost to the Trust attributable to such Treasury Obligation not later than
the next Quarterly Distribution Date and, to the extent funds are provided by
the Depositor, will at such time distribute on behalf of the Depositor the sales
charges attributable to such Treasury Obligation.
If less than all monies attributable to a failed Treasury Obligation have
been applied by the Trustee to purchase Replacement Treasury Obligations, the
Trustee shall distribute the remaining monies to Unit Holders not later than the
next Quarterly Distribution Date.
All amounts (i) permitted to be 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, or (ii) permitted to be withdrawn from the Principal Account pursuant
to Section 5.02 hereof, may be made only from the balance in the Principal
Account after excluding capital amounts being held for distribution to Unit
Holders of record on the Record Date for a prior Quarterly Distribution Date
pursuant to the following paragraph. The Principal Account shall be reimbursed
for any such amounts described in clause (i) of the preceding sentence 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.
The amounts to be so distributed to each Unit Holder of the Trust shall be
that pro rata share of the cash balance of the Income and Principal Accounts of
the Trust, computed as set forth above, as shall be represented by the Units
registered in the name of such Unit Holder.
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 of the Trust
shall be held in the same manner as other amounts subsequently deposited in each
of such Income or Principal Accounts, respectively.
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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
Quarterly 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 Unit Holder of record. Nothing herein shall be construed to prevent
the payment of amounts from the Income Account and the Principal Account of the
Trust to individual Unit Holders by means of one check, draft or other proper
instrument, provided that the appropriate statement of such distribution shall
be furnished therewith as provided in Section 3.06 hereof.
Section 3.06. Distribution Statements: With each distribution, if any, from
the Income or Principal Accounts of the Trust the Trustee shall set forth,
either in the instrument by means of which payment of such distribution is made
or in an 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, but not later than required by law, the Trustee shall furnish to
each person who at any time during such calendar year was a Unit Holder of the
Trust a statement setting forth, with respect to such calendar year:
(A) as to the Income Account of the Trust:
(1) the amount of dividends received on the Fund Shares,
(2) the deductions for payment of applicable taxes, or other government
charges, if any, compensation of the Evaluator and fees and expenses of the
Trustee, and transfers to the Reserve Account, and any expenses paid by the
Trust pursuant to Section 3.05 hereof,
(3) all l2b-1 fee rebate amounts,
(4) any other amount credited or deducted from the Income Account, and
(5) 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 of the Trust:
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(1) the dates of the sale, maturity, liquidation or redemption of any of the
Securities, the identity of such Securities and the net proceeds received
therefrom, excluding any portion thereof credited to the Income Account,
(2) the amount paid for purchases of Replacement Treasury Obligations pursuant
to Section 3.07, and for redemptions pursuant to Section 5.02,
(3) the deductions for payment of applicable taxes and other governmental
charges, if any, compensation of the Evaluator and fees and expenses of the
Trustee, transfers to the Reserve Account and any other expenses paid by
the Trust under Section 3.05 hereof,
(4) the amount credited to or deducted from the Principal Account on account of
distributions of capital gains, if any, on Fund Shares, and
(5) any other amount credited to or deducted from the Principal Amount, 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; and
(C) the following information:
(1) a list of the Securities held in the Trust as of the last business day of
such calendar year,
(2) the number of Units of such Trust outstanding on the last business day of
the calendar year,
(3) the Unit Value (as defined in Section 5.01) based on the last evaluation of
such Trust made during such calendar year, and
(4) the amounts actually distributed during such calendar year from the Income
and Principal Accounts of the Trust, 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 3.07. Replacement 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 "Special Security"), the Depositor shall notify the Trustee in writing of
such failed contract and may instruct the Trustee to purchase Replacement
Securities which have been selected by the Depositor having a cost not in
excess of the cost of the Special Securities not so delivered. To be
eligible for inclusion in the Trust, the Replacement Securities which the
Depositor selects must: M in the case of Treasury Obligations be
substantially identical to every Treasury Obligation then in the Trust; and
(ii) be purchased within twenty days after delivery of the Trustee or to
the of notice of the failed contract Depositor, whichever occurs first. Any
Replacement 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
Replacement 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 Quarterly Record Date to occur after the date
of execution and delivery of the applicable Reference Trust Agreement.
Whenever a Replacement Security is acquired by the Depositor pursuant to
the provisions of this Section 3.07, the Trustee shall, within five days
thereafter, mail to all Unit Holders notices of such acquisition, including an
identification of the Special Security and the Replacement Security acquired.
The purchase price of a Replacement Security shall be paid out of the funds in
the Principal Account attributable to the Special Security which it replaces.
The Trustee shall not or loss be liable or responsible in any way for
depreciation 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 Replacement Securities under this
Indenture. The Depositor shall not be liable for any failure to instruct the
Trustee to purchase any Replacement Security or for errors of judgment in
selecting any Replacement Security. The Trustee shall have no duty or
responsibility with respect to the selection of any Replacement Security.
Section 3.08. Sale of Securities: In order to maintain the sound investment
character of the Trust, the Depositor may by written notice 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, with respect to the Securities to be sold, that any one or more of
the following conditions exist:
(a) that there has been a default by the issuer of the Securities in
payment of declared dividends or redemption of Fund Shares;
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(b) that any action or proceeding has been instituted in law or equity
seeking to restrain or enjoin the payment under any such Securities, or
attacking the validity of any of the Securities, or that there exists any other
legal question or impediment affecting such Securities or the payment of
dividends on the same;
(c) that there has been a default in the payment of principal or interest
on any outstanding obligations of the issuer of any of the Securities;
(d) that there has been a decline in market price of any such Securities to
such an extent, or such other market or credit factor exists, that in the
opinion of the Depositor the retention of such Securities would be detrimental
to the Trust and to the interests of the Unit Holders; and
Upon receipt of such direction from the Depositor, upon which the Trustee
shall rely, the Trustee shall proceed to sell the specified Securities in
accordance with such direction, and upon receipt of the proceeds of any such
sale, after deducting therefrom any fees and expenses of the Trustee, any
brokerage charges, taxes or other governmental charges, shall deposit such
proceeds in the Principal Account. 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 3.08.
Section 3.09. Notice and Sale by Trustee: If at any time there has been a
failure to pay a declared dividend on the Fund Shares the Trustee shall notify
the Depositor thereof. If within thirty days after such notification the
Depositor has not given any written instruction to sell or to hold or has not
taken any other action in connection with such Fund Shares, the Trustee shall
sell such Fund Shares forthwith, and the Trustee shall not be liable or
responsible in any way for depreciation or loss incurred by reason of such sale.
Section 3.10. Notice to Depositor: 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 the Securities in a 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 any amendment or supplement to any indenture, resolution,
agreement or other instrument under or pursuant to which the Securities have
been issued) the Trustee shall promptly notify the Depositor and shall thereupon
take such action or refrain from taking any action (not inconsistent with its
duties as Trustee) as the Depositor shall in writing direct; provided, however,
that the Trustee shall vote the Fund Shares as closely as possible, in the same
manner and the same general proportion, as the shares of such Fund held by
owners other than the Trust are voted; and provided, further 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.
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Section 3.11. Trustee Not to Amortize: Nothing in this Indenture, or
otherwise, shall be construed to require the Trustee to make any adjustments
between the Interest Account and the Principal Account of the Trust by reason of
any premium or discount in respect of any of the Securities except as required
by any applicable law or accounting practice.
ARTICLE IV
Evaluation of Securities; Evaluator
Section 4.01. Evaluation by Evaluator: The Evaluator shall determine
separately and promptly furnish to the Trustee and the Depositor upon request
the per Unit value of the Securities in the Trust as of the Evaluation Time on
the bid side of the market on the days on which the Trustee shall make the Trust
Evaluation required by Section 5.01 and, in addition, (i) as of the Evaluation
Time on the offering side of the market each business day during the initial
public offering period, (ii) if and as long as requested by the Depositor on the
offering side of the market on each business day following such initial public
offering period, and (iii) on any other day requested by the Depositor or the
Trustee. In making the evaluations the Evaluator may determine the value of each
issue of the securities in the Trust by the following methods or any combination
thereof which it deems appropriate: (i) on the basis of current bid or offering
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 (ii) if bid or offering prices are not available for any
of such securities, on the basis of bid or offering prices for comparable
securities, or (iii) by appraisal or (iv) by any combination of the above. The
Evaluator shall also make a per Unit evaluation of the Securities deposited in
the Trust as of the times said Securities are deposited under this Indenture.
Such evaluation shall be made on the same basis as set forth above and shall be
based upon offering prices of said Securities. The Evaluator's determination of
the offering price of the Securities of the Trust on the date of deposit shall
be included in the Schedules attached to the Reference Trust Agreement.
Section 4.02. Tax Reports: For the purpose of aiding Unit Holders to
satisfy any reporting requirements of applicable Federal or state tax law, the
Evaluator shall make available to the Trustee and the Trustee shall transmit to
any Unit Holder upon written request of such Unit Holder any determinations made
by the Evaluator pursuant to Section 4.01.
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Section 4.03. Evaluator's Compensation: As compensation for its services
hereunder, the Evaluator, with respect to each series, shall receive against a
statement therefor submitted to the Trustee quarterly on or before each
Quarterly Distribution Date from the Income Account to the extent funds are
available and thereafter from the Principal Account the amount as set forth in
the Summary of Essential Information in the Prospectus for each evaluation of
the series, provided, however, that if at any time the fee of the Trustee shall
have been increased pursuant to Section 6.04, the compensation of the Evaluator
hereunder shall at the same time be ratably increased.
Section 4.04. Liability of Evaluator: The Trustee, Depositor and Unit
Holders may rely on any evaluation furnished by the Evaluator and shall have no
responsibility for the accuracy thereof. The determinations made by the
Evaluator hereunder shall be made in good faith upon the basis of the best
information available to it. The Evaluator shall be under no liability to the
Trustee, the Depositor or Unit Holders for errors in judgment; provided,
however, that this provision shall not protect the Evaluator 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.
Section 4.05. Successor Evaluator: (a) The Evaluator may resign and be
discharged hereunder, by executing an instrument in writing resigning as
Evaluator and filing the same with the Depositor and the Trustee, not less than
60 days before the date specified in such instrument when, subject to Section
4.05(e), such resignation is to take effect. Upon receiving such notice of
resignation, the Depositor and the Trustee shall use their best efforts to
appoint a successor evaluator having qualifications and at a rate of
compensation satisfactory to the Depositor and the Trustee. Such appointment
shall be made by written instrument executed by the Depositor and the Trustee,
in duplicate, one copy of which shall be delivered to the resigning Evaluator
and one copy to the successor evaluator. The Depositor may remove the Evaluator
at any time upon 30 days' written notice and appoint a successor evaluator
having qualifications and at a rate of compensation satisfactory to the
Depositor. Such appointment shall be made by written instrument executed by the
Depositor, in duplicate, one copy of which shall be delivered by the Evaluator
so removed and one copy to the successor evaluator. Notice of such resignation
or removal and appointment of a successor evaluator shall be mailed by the
Trustee to each Unit Holder.
(b) Any successor evaluator appointed hereunder shall execute, acknowledge
and deliver to the Depositor and the Trustee an instrument accepting such
appointment hereunder, and such successor evaluator 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
Evaluator herein and shall be bound by all the terms and conditions of this
Agreement.
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(c) In case at any time the Evaluator shall resign and no successor
evaluator shall have been appointed and have accepted appointment within 30 days
after notice of resignation has been received by the Depositor and the Trustee,
the Evaluator may forthwith apply to a court of competent jurisdiction for the
appointment of a successor evaluator. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, appoint a successor
evaluator.
(d) Any corporation into which the Evaluator hereunder may be merged or
with which it may be consolidated, or any corporation resulting from any merger
or consolidation to which the Evaluator hereunder shall be a party, or any
corporation succeeding to all or substantially all of the business of the
Evaluator hereunder, shall be the successor evaluator under this Agreement
without the execution or filing of 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 the Evaluator 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.
(e) Any resignation or removal of the Evaluator and appointment of a
successor evaluator pursuant to this Section shall become effective upon
acceptance of appointment by the successor evaluator as provided in subsection
(b) hereof.
ARTICLE V
Trust Evaluation; Redemption, Purchase, Transfer,
Interchange or Replacement of Certificates
Section 5.01. Trust Evaluation: The Trustee shall make an evaluation of the
Trust as of 4:15 p.m. New York 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, and (iii) on any other day desired by the Trustee or
requested by the Depositor. Such evaluations shall take into account and itemize
separately (1) the cash on hand in the Trust (other than monies on deposit in
the Reserve Account, funds deposited on the date hereof by the Depositor for the
purchase of Securities and not theretofore credited to the Principal Account
pursuant to Section 3.03 and funds in the Principal Account with respect to
which contracts for the purchase of the Replacement Securities have been entered
into pursuant to Section 3.07), (2) the value of each Security in the Trust on
the bid side of the market as determined by the Evaluator pursuant to Section
4.01, and (3) all other assets of the Trust. For each such evaluation there
shall be deducted from the sum of the above (i) amounts representing any
applicable taxes or 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, (ii) amounts representing accrued expenses of the Trust
including but not limited to unpaid fees and expenses of the Trustee and the
Evaluator and expenses of the Trust (including legal and auditing expenses), in
each case as reported by the Trustee to the Evaluator on or prior to the date of
evaluation and (ii) cash held for distribution to Unit Holders of record as of a
date 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".
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The Trustee shall promptly advise the Depositor of each determination of
Unit Value made by it as above provided, and, shall promptly furnish to the
Depositor with such information regarding the Principal, Income and Reserve
Accounts as the Depositor may reasonably request.
Section 5.02. Redemptions by Trustee; Purchases by Depositor: Any Unit
evidenced by a Certificate tendered for redemption by a Unit Holder or his duly
authorized attorney to the Trustee at its corporate trust office in the City of
New York, shall be redeemed by the Trustee on the seventh calendar day following
the day on which tender for redemption is made, provided that if such day of
redemption is not a business day, then such Unit shall be redeemed on the first
business day prior thereto (being herein called the "Redemption Date"). Subject
to payment by such Unit Holder of any tax or other governmental charges which
may be imposed thereon, redemption of such Unit is to be made by payment on the
Redemption Date of cash equivalent to the Unit Value, determined by the Trustee
as of 4:15 p.m. on the date of tender. Units received for redemption by the
Trustee on any day after 4:15 p.m. 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, suspend the right of redemption for Units of the Trust or postpone
the date of payment of the Redemption Price therefor 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 to determine fairly
in accordance herewith the value of the Securities; or (3) for such other period
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.
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Not later than the close of business on the day of tender of a Unit for
redemption by a Unit Folder other than the Depositor, the Trustee shall notify
the Depositor of such tender or such mandatory redemption. Such Depositor shall
have the right to purchase such Unit 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 second business day after the day on which such
Unit was tendered for redemption. Such purchase shall be made by payment for
such Unit by the Depositor to the Unit Holder not later than the close of
business on the Redemption Date of an amount not less than the Redemption Price
which would otherwise be payable by the Trustee to such Unit Holder.
Any 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 5.02.
If the Depositor does not elect to purchase any Unit of the Trust tendered
to the Trustee for redemption, or if a Unit is being tendered by the Depositor
for redemption, that portion of the Redemption Price which represents income
shall be withdrawn from the Income Account of the Trust to the extent available.
The balance paid on any redemption, including accrued and unpaid interest, if
any, shall be withdrawn from the Principal Account of the Trust to the extent
that funds are available for such purpose. If such available balance shall be
insufficient the Trustee shall sell or redeem such of the Securities held in the
Trust as are currently designated for such purposes by the Depositor as the
Trustee in its sole discretion shall deem necessary. The Trustee shall sell, to
the extent possible, Fund Shares and Treasury Obligations in the same ratio as
the ratio of Fund Shares and Treasury Obligations then held in the Trust. To the
extent the sale of Securities in such ratio is not in the best interest of the
Unit Holders, Fund Shares shall be sold prior to the sale of Treasury
Obligations. In the event that funds are withdrawn from the Principal Account
for payment of amounts representing income, the Principal Account shall be
reimbursed for such funds so withdrawn when sufficient funds are next available
in the Income Account.
The Depositor shall maintain with the Trustee a current list of Securities
held in the Trust designated to be sold for the purpose of redemption of Units
of the Trust, 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 of the Trust.
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The Trustee shall not be liable or responsible in any way for depreciation
or loss incurred by reason of any sale or redemptions of Securities made
pursuant to this Section 5.02.
Certificates evidencing Units redeemed pursuant to this Section 5.02 shall
be cancelled by the Trustee, and any Unit or Units redeemed pursuant to this
Section 5.02 shall be terminated by such redemption.
Section 5.03. Transfer or Interchange of Certificates: A Certificate (and
the Units it represents) may be transferred by the registered holder thereof by
presentation and surrender of such Certificate at the corporate 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
Unit Holder or his authorized attorney, whereupon a new registered Certificate
or Certificates for the same number of Units of the Trust 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 of the Trust and
all Certificates issued shall be issued in denominations of one unit or any
integral multiple thereof as may be requested by the Unit Holder.
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 and 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
Unit Holder to the Trustee. The Trustee may require a Unit Holder to pay $2.00
for each new Certificate issued on any such transfer or interchange.
All Certificates cancelled pursuant to this Indenture shall be disposed of
by the Trustee without liability on its part.
Section 5.04. 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 Unit Holder's furnishing the Trustee with proper
identification and indemnity satisfactory to the Trustee, 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 cancelled 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 will be imposed and
payment of the fees and expenses of the Trustee may be required. 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.
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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 each
mutilated, destroyed, stolen or lost Certificate (without surrender thereof
except in the case of a mutilated Certificate) as provided in Section 9.03
hereof if the Trustee is furnished with such security or indemnity as it may
require to save it harmless, and in the case 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 VI
Trustee
Section 6.01. General Definition of Trustee's Liabilities, Rights and
Duties: in addition to and notwithstanding the other duties, rights, privileges
and liabilities of the Trustee as elsewhere set forth herein, the liabilities of
the Trustee are further defined as follows:
(a) all monies deposited with or received by the Trustee hereunder shall be
held by it 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 ledger of the Trustee so long as such Practice preserves a valid reference
under applicable law, or if such preference is not so preserved the Trustee
shall handle such moneys in such other manner as shall constitute the
segregation and holding hereof in Investment Company Act of 1940; as part of the
Trustee's compensation the Trustee may benefit from cash balances in the income
and Principal Accounts, as provided in Section 6.04;
(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 monies, any of the Securities, Units or
Certificates issued pursuant to this Indenture, or in respect of any evaluation
which it is required to make or is required or permitted to have made by others
under this Indenture or otherwise, except by reason of its own 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;
provided, however, that the Trustee shall not in any event be liable or
responsible for any of the provisions of this Indenture, insofar as the same may
appear to be ambiguous or inconsistent with any other provisions hereof, may be
concurred in by the parties to the Indenture and such an interpretation shall be
binding upon the parties to the Indenture. The parties to the Indenture shall be
under no liability for any good faith interpretation of the Indenture;
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(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 the Evaluator, or for the form, character,
genuineness, sufficiency, value or validity of any Securities or for or in
respect of the validity of 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 Unit Holder 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 signatures by or on behalf
of the Depositor or the Evaluator;
(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 required by the Trustee, it shall be furnished
with reasonable security and indemnity against such expense or liability, and
any pecuniary cost of the Trustee from such actions shall be deductible from and
a charge against the income and Principal Accounts of the Trust. Subject to the
foregoing 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 Unit Holders 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 Unit Holders;
(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 that if the Trustee chooses to
care; provided, however, 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. The accounts of the
Trusts shall be audited not less frequently than annually by independent
certified public accountants designated from time to time by the Depositor, and
the reports of such accountants shall be furnished by the Trustee to Unit
Holders upon request. 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 of the Trust as set forth in Section 6.04
hereof;
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(f) if at any time there is only one Depositor acting hereunder and such
Depositor shall resign pursuant to Section 8.04 or shall fail to undertake or
perform any of the duties which by the terms of this Agreement are required by
it to be undertaken or performed or the Depositor shall be dissolved or become
incapable of acting or shall be adjudged bankrupt or insolvent, or a receiver of
the Depositor or of its property should be a pointed, or any public officer
shall take charge or control of the Depositor or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, then in any such
case, the Trustee may: (1) appoint a successor depositor who shall act hereunder
in all respects in place or the Depositor which successor shall be satisfactory
to the Trustee, and which may be compensated semiannually, at rates deemed by
the Trustee to be reasonable under the circumstances, by deduction from the
Income Account of the Trust or, to the extent funds are not available in such
Account, from the Principal Account of the Trust but no such deduction shall be
made 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) act as Depositor itself without terminating the Trust, or
(3) terminate the Indenture and the Trust created hereby and liquidate the Trust
in the manner provided in Section 9.03;
(g) if the aggregate net value of all Trust assets as shown by any
evaluation by the Trustee pursuant to Section 5.01 hereof is less than 40% of
the aggregate maturity amounts of the Treasury Obligations deposited in the
Trust calculated after the most recent deposit of Treasury obligations in the
Trust (without reduction for disposition of Treasury Obligations), or if
Replacement Treasury Obligations are not acquired, or if there has been a
material change in the Fund's objectives, the Trustee shall when so directed by
the Depositor, terminate this Indenture and the and the trust created hereby and
liquidate the Trust, all in the manner provided in Section 9.03;
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(h) the Trustee is authorized and empowered 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;
(i) 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
interest 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 of any other taxing authority having jurisdiction in
the premises. For all such taxes and charges and for any expenses which the
Trustee may sustain or incur with respect to such taxes or charges, the Trustee
shall be reimbursed and indemnified out of the Reserve Account and/or 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 Unit Holders;
(j) the Trustee except by reason of its own gross negligence, lack of good
faith or willful misconduct in the performance of its duties hereunder shall not
be liable for any action taken, omitted 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;
(k) the Trustee shall sell Fund Shares for the purpose of payment of
expenses hereunder to the extent that the Income Account amounts are
insufficient to pay such expenses. The net proceeds of any such sales of Fund
Shares, to the extent not used for payment of expenses, shall be credited to the
Principal Account;
(l) so long as shall be required by Section 26(a)(2)(C) of the Investment
Company Act of 1940, no payment to the Depositor or to any principal underwriter
(as defined in such Act) for the Trust or to any affiliated person (as so
defined) or agent of the Depositor or such underwriter shall be allowed the
Trustee as an expense except for payment not in excess of such reasonable
amounts as the Securities and Exchange Commission may prescribe as compensation
for performing bookkeeping and other administrative services of a character
normally performed by the Trustee itself.
Section 6.02. Books, Records and Reports: The Trustee shall keep proper
books of record and account of all the transactions under this Indenture at its
corporate trust office including a record of the name and address of, the Units
held by, and the Certificates issued by the Trust and held by, every Unit
Holder, and the books and records shall be open to inspection by any Unit Holder
of the Trust at all reasonable times during the usual business hours of the
Trustee at its corporate office.
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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 6.03. Indenture and List of Securities on File: The Trustee shall
keep a certified copy in duplicate original of this Indenture (including the
Reference Trust Agreement) on file at its corporate trust office available for
inspection at all reasonable times during the usual business hours by any Unit
Holder, together with a current list of the Securities in the Trust.
Section 6.04. Compensation: For services performed under this Indenture the
Trustee shall receive as compensation such amount as specified in the Reference
Trust Agreement. Such compensation shall be payable quarterly in an amount equal
to one-fourth of the estimated annual compensation of the Trustee on or before
each Quarterly Distribution Date from the Income Account to the extent monies
are available and thereafter from the Principal Account and shall be computed on
the basis of the greatest amount of Units in the Trust at any time during the
previous quarter with respect to which such compensation is being computed. The
Trustee may from time to time adjust its computation set forth above; provided,
however, that the total adjustment upward does not, at the effective 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 is no longer published, in a similar index to be determined by the
Trustee and the Depositor. The consent or concurrence of any Unit Holder
hereunder shall not be required for any such adjustment or increase. Such
compensation shall be deemed to provide only for the usual normal and proper
functions undertaken as Trustee pursuant to this Indenture. In addition to the
foregoing compensation, as part of the Trustee's compensation for ordinary
services performed under this Indenture, the Trustee is entitled to the benefits
to the Trustee that may result from positive balances in the Income and
Principal Accounts. In addition, the Trustee may charge, to the extent then
lawful, the Income and Principal Accounts of the Trust for any and all expenses
(including but not limited to legal, auditing and printing expenses) of
maintaining registration or qualification of the Units and/or the Trust under
Federal or state securities laws subsequent to initial registration so long as
the Depositor is maintaining a market for the Units and including the fees of
counsel which may be retained by the Trustee in connection with its activities
hereunder, and disbursements incurred hereunder and additional compensation for
any extraordinary services performed by the Trustee hereunder and various
governmental charges, expenses and costs of any action taken by the Trustee to
protect the Trust and the rights and interests of Unit Holders, expenses of
indemnification or the Depositor for any losses, liabilities and expenses in
acting as Depositor under the Indenture without gross negligence, bad faith,
willful misfeasance or willful misconduct or disregard of its obligations and
duties, expenses incurred in contacting Unit Holders upon termination of the
Trust and the cost of independent public accountant auditors of the Trust. The
Trustee shall be indemnified by the Trust 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 the 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 of the Trust shall be
insufficient to provide for amounts payable pursuant to paragraphs (a), (b) and
(c) of Section 3.05 hereof, the Trustee shall have the power to sell Fund Shares
of the Trust. In the event the proceeds of such sale are insufficient to pay
ordinary expenses of the Trust, such deficit shall be paid by the distributor of
the Fund Shares without right to reimbursement for such amounts paid. If the
aggregate cash balances of the Income and Principal Accounts plus the proceeds
of the sale of the Fund Shares after deducting ordinary trust expenses are
insufficient to pay extraordinary trust expenses, the Trustee shall have the
power to sell Treasury Obligations of the Trust. 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 6.04. Any monies payable to the
Trustee pursuant to this Section shall be secured by a lien on the Trust prior
to the interests of the Unit Holders.
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Section 6.05. Removal and Resignation of Trustee; Successor: The following
provisions shall govern the removal and resignation of the Trustee and the
appointment of any successor trustee:
(a) the Trustee or any trustee or trustees hereafter appointed may resign
and be discharged of the trusts created by this Indenture, by executing an
instrument in writing resigning as Trustee of the Trust and filing the same with
the Depositor and mailing a copy of a notice of resignation to all Unit Holders
then of record, not less than sixty days before the date specified in such
instrument when, subject to Section 6.05(e), such resignation is to take effect.
Upon receiving such notice of resignation, the Depositor shall 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. If at any time the Trustee shall become incapable
of acting, or shall have an order of relief entered with respect to it, or shall
be adjudicated 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 control
of the Trustee or of its property or affairs for the purposes of rehabilitation,
conservation or liquidation, or if the Depositor determines that removal of the
Trustee is in the best interest of the Unit Holders, 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 a notice of such
removal and appointment of a successor trustee shall be mailed by the Depositor
to each Unit Holder then of record;
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(b) any successor trustee appointed hereunder shall execute, acknowledge
and deliver to the Depositor and to 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. Upon the request of such successor trustee, 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 them 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
monies 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 monies at the time held by thereunder to
secure any amounts then due the retiring Trustee;
(c) 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;
(d) any corporation into which any trustee hereunder may be merged or with
which it may be consolidated, 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 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 to retain certain
powers, rights and privileges theretofore obtaining for any period of time
following such merger or consolidation, to the contrary notwithstanding;
(e) any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to this Section shall become effective upon
acceptance of appointment by the successor trustee as provided in subsection (b)
hereof.
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Section 6.06. Qualifications of Trustee: The Trustee shall be a corporation
organized and doing business under the laws of the United States or the State of
New York, 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 $5,000,000 and having its principal office and place of business
in the Borough of Manhattan, the City and State of New York.
ARTICLE VII
Rights of Unit Holders
Section 7.01. Beneficiaries of Trust: By the purchase and acceptance or
other lawful delivery and acceptance of a Unit of the Trust the Unit Holder
shall be deemed to be a beneficiary of such Trust and vested with all rights,
title and interest in the Trust attributable to such Unit, subject to the terms
and conditions of this Indenture and of the Certificate evidencing such Unit.
Section 7.02. Rights, Terms and Conditions: In addition to the other rights
and powers set forth in the other provisions and conditions of this Indenture,
the Unit Holders shall have the following rights and powers and shall be subject
to the following terms and conditions:
(a) a Unit Holder may at any time tender his Units to the Trustee for
redemption in accordance with Section 5.02;
(b) the death or incapacity of any Unit Holder 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 Unit Holder 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 monies from time to time received,
held and applied by the Trustee hereunder;
(c) no Unit Holder 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 Unit Holders from time
to time as partners or members of any association; nor shall any Unit Holder
ever be under any liability to any third persons by reason of any action taken
by the parties to this Indenture, or any other cause whatsoever.
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ARTICLE VIII
Depositor
Section 8.01. Liabilities; Power of Attorney: The Depositor, or the
Depositors if there be more than one, shall be severally liable in accordance
herewith for the obligations imposed upon and undertaken by the Depositor
hereunder, provided, however, that, without in any way affecting or diminishing
such several liability, each Depositor of the Trust shall indemnify the other
Depositors thereof and hold such other Depositors harmless from and against any
and all costs, expenses and liabilities (including attorneys' fees) which such
other Depositors may suffer or incur as a result of or by reason of any act or
failure to act hereunder on the part or the indemnifying Depositor. At all times
prior to the termination of the Trust and while the Depositors thereof shall
continue to act jointly hereunder, there shall be maintained on file with the
Trustee a power of attorney executed in favor of one Depositor by the other
Depositors constituting and appointing the nonexecuting Depositor the true and
lawful agent and attorney-in-fact of the executing Depositors to execute and
deliver for and on behalf of the executing Depositors any and all notices,
opinions, certificates, lists, demands, directions, instruments, or other
documents provided or permitted to be executed or delivered by the Depositors
hereunder in connection with the Trust or to take any other action in respect
hereof. Such power of attorney shall continue in effect as to the executing
Depositors until written notice of revocation thereof has been given by such
executing Depositors to the Trustee. Prior to receipt of such notice of
revocation the Trustee shall be entitled to rely conclusively upon such power of
attorney as authorizing the non-executing Depositor to give any notice, opinion,
certificate, list, demand, direction, instrument or other document provided for
or permitted hereunder or to take any other action in respect hereof on behalf
of the executing Depositors as to which such power of attorney is in effect.
Section 8.02. Discharge: If there be more than one Depositor, the following
provisions shall provide for the discharge of a Depositor and the liability of
the Depositors in the event of the discharge of a Depositor:
(a) in the event that any Depositor shall fail to undertake or perform any of
the duties which by the terms of this Agreement are required by it to be
undertaken or performed and such failure shall continue for 30 days after
notice to the Depositors from the Trustee or if any Depositor shall become
incapable of acting or shall have any order of relief entered with respect
to it, or a receiver of the property of any Depositor shall be appointed or
any public officer shall take charge or control of any Depositor or its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then such Depositor shall forthwith be and shall be deemed to
be discharged forever as a Depositor hereunder and thereupon the remaining
Depositors shall act hereunder without the necessity of any other or
further action on its part or on the part of the Trustee;
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(b) in the event that the power of attorney referred to in Section 8.01 shall
be revoked by written notice given by an executing Depositor and it shall
not be replaced within one business day by another power of attorney
conforming with the requirements of said Section 8.01 the Depositors of the
Trust shall be deemed to have been unable to reach agreement with respect
to action to be taken jointly by them hereunder in connection with the
Trust and thereupon the Depositor which has revoked the power of attorney
executed by it shall be discharged hereunder upon the expiration of such
one-day period and thereupon the other Depositors shall act hereunder
without the necessity of any other or further action on their part or on
the part of the Trustee;
(c) notwithstanding the discharge of a Depositor of the Trust in accordance
with this Section 8.02, such Depositor shall continue to be fully liable in
accordance with the provisions hereof in respect of action taken or
refrained from under this Agreement by the Depositors before the date of
such discharge or by the undis-charged Depositors before or after the date
of such discharge, as fully and to the same extent as if no discharge has
occurred.
Section 8.03. Successors: The covenants, provisions and agreements herein
contained shall in every case be binding upon any successor or successors to any
Depositor and shall be binding upon the General Partners of any Depositor which
may be a partnership and upon the capital interest of the limited partners of
any Depositor which may be a partnership. In the event of the death, resignation
or withdrawal of any partner of any Depositor which may be a partnership, the
partner so dying, resigning or withdrawing shall be relieved of all further
liability hereunder if at the time of such death, resignation or withdrawal such
Depositor 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 any Depositor to a successor corporation or a 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 Agreement. Any Depositor may transfer all or substantially all of its
assets to a corporation or partnership which carries on the business of such
Depositor, if at the time of such transfer such successor duly assumes all the
obligations of such Depositor under this Agreement.
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Section 8.04. Resignation: If at any time any Depositor of the Trust shall
desire to resign its position as such a Depositor hereunder, the Depositor
desiring to resign may resign by delivering to the Trustee an instrument
executed by such resigning Depositor and upon such delivery, 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 delivery;
provided, however, that concurrently with or subsequent to such resignation the
Trustee may appoint a new Depositor to act and to assume the duties of the
resigning Depositor by an instrument executed by the Trustee and the new
Depositor. Such new Depositor shall not be under any liability hereunder for
occurrences or omissions prior to the effective time of execution of such
instrument.
Section 8.05. Additional Depositors: The Depositor of the Trust and the
Trustee may at any time appoint one or more corporations or partnerships to act
as new Depositor of such Trust, in addition to those currently serving, by an
instrument executed by such Depositor, the Trustee, and such corporations or
partnerships; provided, however, that at the time of such execution each new
Depositor maintains a net worth (determined in accordance with generally
accepted accounting principles) of at least $1,000,000. Upon such execution, a
new Depositor shall be deemed to be a depositor for all purposes under this
Indenture, and the covenants, provisions and agreements herein contained shall
in every case be binding upon such new Depositor and shall be binding upon the
General Partner of any such new Depositor which may be a partnership and upon
the capital interest of the limited partners of any such new Depositor which may
be a partnership, but such new Depositor shall not be liable hereunder or
occurrences or omissions prior to the effective time of execution of such
instrument.
Section 8.06. Exclusions from Liability: The following provisions shall
provide for certain exclusions from the liability of the Depositor:
(a) no Depositor of the Trust shall be under any liability to any other
Depositor of the Trust, such Trust or the Unit Holders thereof, for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, or for errors in judgment or liable or responsible in any way
for depreciation or loss incurred by reason of the acquisition 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 or by reason of its
reckless disregard of its obligations and duties hereunder. The Depositor of the
Trust 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 them, or any
of them, by any other Depositor of the Trust, the Trustee, the Evaluator or any
other person. The Depositor shall in no event be deemed to have assumed or
incurred any liability, duty, or obligation to any Unit Holder, the Evaluator or
the Trustee other than as expressly provided for herein;
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(b) the Depositor shall not be under any obligation to appear in, prosecute
or defend any legal action which in its opinion may involve it 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
Agreement and the rights and duties of the parties hereto and the interests of
the Unit Holders hereunder;
(c) none of the provisions of this Agreement shall be deemed to protect or
purport to protect the Depositor of the Trust against any liability to the Trust
or to the Unit Holders thereof or to each other (if there is more than one
Depositor) to which the Depositor would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of the
duties of the Depositor, or by reason of the Depositor's reckless disregard of
the obligations and duties of the Depositor under this Agreement.
ARTICLE IX
Additional Covenants; Miscellaneous Provisions
Section 9.01. 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 Unit Holders (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; or (b) to change any provision hereof as may be
required by the Securities and Exchange Commission or any successor governmental
agency exercising similar authority; or (c) to make such other provision in
regard to matters or questions arising hereunder as shall not adversely affect
the interests of the Unit Holders; provided, that the Indenture may also be
amended by the Depositor and the Trustee (or the Performance of any of the
provisions of the Indenture may be waived) with the consent of Unit Holders
evidencing 51% 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
or the provisions of the Indenture or of modifying in any manner the rights of
Unit Holders; provided, further, that this Indenture (including any Reference
Trust Agreement) may not be amended (nor may any provision thereof be waived) so
as to (1) permit an increase in the number of Units issuable except as the
result of the deposit of Additional Securities, as herein provided, or to reduce
the relative interest in the Trust of any Unit Holder without his consent (2)
permit the deposit or acquisition of Securities or other property either in
addition to or in substitution for any of the Securities on hand in the Trust
except in the manner permitted by the Trust Indenture as in effect on the Date
of Deposit, or to provide the Trustee with the power to engage in business or
investment. activities not specifically authorized in this Indenture as
originally adopted or (3) adversely affect the characterization of the Trust as
a grantor trust for federal income tax purposes.
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Section 9.02. Notice of Amendment: Promptly after the execution of any
amendment the Trustee shall furnish written notification of the substance of
such amendment to all Unit Holders then of record at their addresses appearing
on the registration books of the Trustee.
Section 9.03. Termination: The Trust shall terminate upon the maturity,
redemption, sale or other disposition as the case may be of the last Security
held in the Trust unless sooner terminated upon the direction of the Depositor
to the Trustee. The Trust may be terminated upon the direction of the Depositor
when the aggregate net of all Trust assets as shown in the Evaluator's
evaluation is less than 40% of the aggregate maturity amounts of the Treasury
Obligations deposited in the Trust calculated after the most recent deposit of
Treasury Obligations in the Trust (without reduction for disposition of Treasury
obligations), or if Replacement Treasury obligations are not acquired, or if
there is a material change in the Fund's investment objectives as hereinbefore
specified and may be terminated at any time by the written consent of the
Holders of Fifty One per cent of the Units of the Trust; provided, that in no
event shall the Trust continue beyond the Termination Date as set forth in Part
II of the Reference Trust Agreement. Written notice of any termination,
specifying the time or times at which the Unit Holders of such Trust may
surrender any Certificates they hold for cancellation shall be given by the
Trustee to each Unit Holder at his address appearing on the registration books
of the Trustee.
(a) Within a reasonable period of time after termination of the Trust the
Trustee shall liquidate such Securities of the Trust then held, if any, as it
shall deem necessary for payment of Trust expenses, to the extent the amounts in
the Income and Principal Accounts are insufficient, and shall:
(i) deduct from the Income Account of the Trust or, to the extent that
funds are not available in such Account, from the Principal Account of the Trust
and pay to itself individually an amount equal to the sum of (1) its accrued
compensation for its ordinary recurring services in connection with the Trust,
(2) any compensation due it for its extraordinary services and (3) any costs,
expenses or indemnities in connection with the Trust as provided herein;
(ii) deduct from the Income Account of the Trust or, to the extent that
funds are not available in such Account, from the Principal Account of the Trust
and pay any unpaid fee and expenses of the Evaluator in connection with the
Trust;
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(iii) deduct from the Income Account of the Trust or the Principal Account
of the Trust any amounts which may be required to be deposited in the Reserve
Account of the Trust 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 in connection with the Trust.
(b) The Trustee shall fully liquidate the remaining Treasury Obligations
and shall, upon each Unit Holder's surrender for cancellation of his Certificate
or Certificates, distribute to each Unit Holder such Unit Holder's pro rata
interest in the balance of the Income Account and Principal Account of the Trust
and the proceeds of such liquidation.
The amounts to be so distributed to each Unit Holder shall be the pro rata
share of the balance of the total Income and Principal Accounts of the Trust as
shall be represented by the Units therein held by such Unit Holder.
(c) A Unit Holder may notify the Trustee in writing on or before the
Evaluation Time on the Termination Date as to whether such Unit Holder desires:
1) to receive his pro rata share of the Fund Shares in-kind; or 2) to receive
the cash proceeds from the sale of his pro rata share of the Fund Shares. The
Trustee shall liquidate all Fund Shares not distributed in-kind. Unit Holders
who do not notify the Trustee of their election will receive cash from the sale
of their pro rata share of Fund Shares (option 2). In any case, Unit Holders
will receive their pro rata share of the Treasury Obligations and any other
assets of the Trust in cash.
(d) A Unit Holder choosing in-kind distribution of Fund Shares will receive
such distribution no later than the seventh calendar day after the Termination
Date (or if such day is not a Business Day, then the first Business Day prior
thereto), subject to payment by such Unit Holder of any tax or governmental
charges which may be imposed thereon. This distribution shall consist of such
Unit Holder's pro rata portion in whole shares of the Fund Shares held in the
Trust as of the Termination Date. Fractional share entitlement will be
distributed in cash.
(e) Together with such distribution to each Unit Holder as provided for in
(b) of this Section, the Trustee shall furnish to each such Unit Holder a final
distribution statement as of the date of computation of the amount distributable
to Unit Holders, setting forth the information in substantially the form and
manner provided for in Section 3.06 hereof.
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The Trustee shall be under no liability with respect to monies 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.
The Trustee may in its discretion, and shall when so directed by the
Depositor in writing, postpone the Termination Date (1) for any period during
which the New York Stock Exchange is closed other than customary weekend and
holiday closings; (2) for any period during which (as determined by the
Securities and Exchange Commission by rule, regulation or order) (i) trading on
the New York Stock Exchange is restricted or (ii) 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 for the purposes of any Trust
Evaluation; or (3) for such other periods as the Securities and Exchange
Commission may by order permit.
In the event that all of the Unit Holders who hold Certificates of the
Trust shall not surrender their Certificates for cancellation within six months
after the time specified in the above-mentioned written notice, the Trustee
shall give a second written notice to the remaining holders of Certificates to
surrender their Certificates for cancellation and receive the liquidation
distribution with respect thereto. If within one year after the second notice
all the Certificates shall not have been surrendered for cancellation, the
Trustee may take steps, or may appoint an agent to take appropriate steps, to
contact the remaining holders of Certificates concerning surrender of their
Certificates and the cost thereof shall be paid out of the monies and other
assets which remain in trust hereunder.
Section 9.04. Construction: This Indenture is delivered in the State of New
York, and all laws or rules of construction of such State shall govern the
rights of the parties hereto and the Unit Holders and the interpretation of the
provisions hereof. Headings and titles herein are for convenience only and
should not influence such interpretation.
Section 9.05. Registration of Units: The Depositor agrees and undertakes on
its own part to register the units 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 each
Trust which refers to this Indenture and the Trustee shall incur no liability or
be under any obligation or expense in connection therewith.
Section 9.06. 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 c/o Prudential-Bache Securities
Inc. at One Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at such other address as
shall be specified by the Depositor to the other parties hereto 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 corporate trust
office of the Trustee, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 Attention:
Corporate Trust and Agency Division or such other address as shall be specified
to the other parties by the Trustee in writing. Any notice, demand, direction or
instruction to be given to the Evaluator shall be in writing and shall be duly
given if mailed or delivered to the Evaluator, Attention: Vice President, Xxxx
Xxxxxxxxxx, 00 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or such other address as shall
be specified to the other parties hereto by the Evaluator in writing. Any notice
to be given to the Unit Holders shall be duly given if mailed or delivered to
each Unit Holder at the address of such holder appearing on the registration
books of the Trustee.
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Section 9.07. 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 of 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 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 Unit Holders.
Section 9.08. Dissolution of Depositors Not to Terminate: The dissolution
of one or all of the Depositors (if more than one) from or for any cause
whatsoever shall not operate to terminate this Indenture insofar as the duties
and obligations of the Trustee and Evaluator are concerned.
Section 9.09. Name: Depositor reserves the right to use the name
"Government Securities Equity Trust," with a distinguishing series number or
name, without the consent of the Trustee.
IN WITNESS WHEREOF, Prudential-Bache Securities Inc. has caused this Trust
Indenture and Agreement to be executed by one of its Senior Vice Presidents and
its corporate seal to be hereto affixed and attested by its Assistant Secretary;
United States Trust Company of New York has caused this Trust Indenture and
Agreement to be executed by one of its Assistant vice Presidents and its
corporate seal to be hereto affixed and attested by one of its Assistant
Secretaries and Standard & Poor's Corporation has caused this Trust Indenture
and Agreement to be executed by facsimile signature by one of its Group Vice
Presidents or Assistant Vice Presidents and its corporate seal to be hereto
affixed and attested by facsimile signature by one of its Vice Presidents or
Secretaries; all as of the day, month and year first above written.
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PRUDENTIAL-BACHE SECURITIES INC.,
Depositor
By__________________________________
Senior Vice-President
(SEAL)
ATTEST:
By___________________________
Assistant Secretary
UNITED STATES TRUST COMPANY
OF NEW YORK, Trustee
By______________________________
Assistant Vice President
(SEAL)
ATTEST:
By___________________________
Assistant Secretary
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
I, XXXXXX X. XXXXXXX, a Notary Public in and for the said County in the
State aforesaid, do hereby certify that XXXX X. XxXXXXX and Wm. Xxxxxxx
personally known to me to be the same persons whose names are subscribed to the
foregoing instrument and personally known to me to be the Assistant Vice
President and Assistant Secretary, respectively, of United States Trust Company
of New York, a corporation, appeared before me this day in person, and
acknowledged that they signed, sealed with the corporate seal of United States
Trust Company of New York, and delivered the said instrument as their free and
voluntary act as such Assistant Vice President and Assistant Secretary,
respectively, and as the free and voluntary act of said United States Trust
Company of New York for the uses and purposes therein set forth.
GIVEN, under my hand and notarial seal this 12th day of May, 1989.
-----------------------
Notary Public
(SEAL)
STANDARD & POOR'S CORPORATION
Evaluator
By_________________________________
Title: Vice President
(SEAL)
ATTEST
By ____________________________
Title: Vice President
