Exhibit 99.A2
THE PAINEWEBBER EQUITY TRUST,
REIT SERIES 1
TRUST INDENTURE AND AGREEMENT
Dated as of May 27, 1998
Incorporating
Standard Terms and Conditions of Trust
Dated as of May 1, 1998,
Between
PAINEWEBBER INCORPORATED,
as Depositor
and
THE CHASE MANHATTAN BANK
as Trustee
THIS TRUST INDENTURE AND AGREEMENT dated as of May 27, 1998 between
PaineWebber Incorporated, as Depositor and The Chase Manhattan Bank, as
Trustee, which sets forth certain of its provisions in full and incorporates
other of its provisions by reference to a document entitled "Standard Terms and
Conditions of Trust" dated as of May 1, 1998, among the parties hereto
(hereinafter called the "Standard Terms"), such provisions as are set forth in
full and such provisions as are incorporated by reference constituting a single
instrument.
W I T N E S S E T H T H A T :
WHEREAS, the parties hereto have heretofore or concurrently herewith
entered into the Standard Terms in order to facilitate creation of a series of
securities issued under a unit investment trust pursuant to the provisions of
the Investment Company Act of 1940 and the laws of the State of New York, each
of which series will be composed of redeemable securities representing
undivided interests in a trust fund composed of publicly traded common or
preferred stocks issued by domestic companies, and, in certain cases,
interest-bearing United States Treasury Obligations ("Treasury Obligations");
and
WHEREAS, the parties now desire to create the First trust of the
aforesaid series;
NOW THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the Depositor and the Trustee agree as follows:
Section 1. Incorporation of Standard Terms and Conditions of Trust.
Subject to the provisions of Sections 2 of this Trust Indenture and Agreement
set forth below, all of the provisions of the Standard Terms incorporated by
reference in their entirety and shall be deemed to be a part of this instrument
as fully to all intents and purposes as though said provisions had been set
forth in full in this instrument. Unless otherwise stated, section references
shall refer to sections in the Standard Terms.
Section 2. Specific Terms of this Series. The following terms are
hereby agreed to for this series of The PaineWebber Equity Trust, which series
shall be known and designated as "The PaineWebber Equity Trust, REIT Series 1".
A. The Securities deposited pursuant to Section 2.02(e) are listed in
Schedule A annexed hereto.
B. (1) The aggregate number of Units outstanding on the date hereof
for this Series is 10,000.
(2) The initial fractional undivided interest represented by each
Unit of this series shall be 1/10,0000th of the Trust Fund. A receipt
evidencing the ownership of this total number of Units outstanding on the date
hereof is being delivered by the Trustee to the Depositor.
B. The term "Capital Account Record Date" shall mean December 10, 1998
and annually thereafter and the term "Income Account Record Date" shall mean
July 10, 1998 and monthly thereafter; provided, however, that with respect to a
distribution required by Section 2.02(b), the Record Date shall be the last
business day of the month during which the contract to purchase the Security
fails.
Record Date shall also include such date or dates determined by the
Sponsor and the Trustee as necessary or desirable and in the best interest of
the Unitholders for federal or state tax purposes, or for other purposes
(hereinafter a "Special Record Date") which date may replace a regularly
scheduled Record Date if such regularly scheduled Record Date is within 30 days
of a Special Record Date.
C. (1) The term "Capital Account Distribution Date" shall mean
December 25, 1998, and annually thereafter. (2) The term "Income Account
Distribution Date" shall mean July 25, 1998 and monthly thereafter, except that
the Trustee may declare a Record Date of December 31 in any year for a
Distribution Date of January 20 of the following year, if required for
compliance with the rules and regulations governing regulated investment
companies. With respect to a distribution required by Section 2.02(b), the
Distribution Date shall be twenty days after the Record Date with respect
thereto.
In the event a Special Record Date is declared, Distribution Date
shall also include such Date as is determined by the Sponsor and the Trustee to
be the Distribution Date in respect of such Special Record Date.
D. The Discretionary Liquidation Amount shall be fifty per centum
(50%) of the aggregate value of the Securities originally deposited on the date
hereof and subsequently deposited pursuant to any Supplemental Indenture
pursuant to Section 2.02.
E. The Mandatory Termination Date shall be June 30, 2001. Unless
advised to the contrary by the Sponsor, the date on which the Trustee shall
begin to sell equity Securities in accordance with Section 9.01 shall be
June 10, 2001. The Trustee will honor redemptions tendered to the Trustee not
later than the Valuation Time on June 9, 2001.
F. The Trustee's annual compensation as referred to in Section 8.05
shall be $.01575 per Unit computed monthly based on the largest number of Units
outstanding during the preceding month.
G. The Sponsor's annual compensation pursuant to Section 7.02 shall be
computed as $00.00 per Unit, based on the largest number of Units outstanding
in a calendar year.
H. The balance in the Capital Account below which no distribution need
be made, as referred to in Section 3.04, is $0.75 per Unit Outstanding.
I. The amount specified in Section 5.02 relating to "In Kind
Distributions" shall be $500,000.
J. The Trustee's address pursuant to Section 10.06 is: The Chase
Manhattan Bank, 0 Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Unit
Trust Division.
K. Subsection (c) of Section 3.02 shall be amended to add the
following paragraph at the conclusion thereof:
The Sponsor may, in lieu of depositing additional Securities or
contracts for the purchase of additional Securities, provide the Trustee a
written agreement (the "Delivery Agreement"), which may be included in the
Supplemental Indenture relating to such deposit, (i) to deliver "free" the
additional Securities identified in the Delivery Agreement not later than the
first Record Date for distributions from the Income Account and (ii) to
maintain with the Trustee, as collateral security for such undertaking, an
irrevocable letter of credit or cash, or combination thereof, in an amount not
less than 120% of the value, as determined under Section 4.01 on each Business
Day, of the then undelivered Securities identified in the Delivery Agreement.
The Sponsor shall deliver to the Trustee the collateral security specified in
the preceding sentence not later than the Valuation Time on the date of the
Delivery Agreement and on any Business Day on which an increase in the security
is required pursuant to such sentence. The undelivered Securities identified in
the Delivery Agreement shall be treated as Contract Securities for purposes of
the computation of the Trust Fund Evaluation. The Cash Component with respect
to Securities delivered pursuant to the Delivery Agreement shall be computed as
of the date the Securities are delivered to the Trustee. In the event the
Sponsor shall fail to deliver Securities in accordance with the Delivery
Agreement, the Trustee shall (i) credit the funds then held as collateral
security to the Capital Account and (ii) distribute the same in the manner
provided for Failed Contract Securities for which no Replacement Securities are
to be purchased.
L. Section 3.01 of the Standard Terms is amended to add the following
sentence at the conclusion thereof:
"The Trustee shall credit to the Income Account any distribution on Securities
which is not identified, at the time of receipt, as a return of principal, and
shall administer such funds in accordance with the provisions for funds
credited to the Income Account hereunder, regardless of whether the issuer of
such Securities may subsequently characterize the distributed funds in such
manner as would require them to be credited to the Capital Account, provided,
however, that the Trustee shall file tax reports and returns for the Trust Fund
reflecting distributions as characterized by the issuer of the Security."
M. The text of Section 3.04 shall be deleted and the following text
shall be inserted in its place:
"Section 3.04. Certain Deductions and Distributions. Each month the
Trustee shall satisfy itself as to the adequacy of the Reserve Account, making
any further credits thereto as may appear appropriate in accordance with
Section 3.03 and shall then:
(a) deduct from the Income Account or, to the extent such
funds are not available in such Account, from the Capital Account, and
pay to itself individually the amounts that it is at the time entitled
to receive pursuant to Sections 8.01 and 8.05 on account of its
services theretofore performed and expenses, losses and liabilities
theretofore incurred, if any;
(b) deduct from the Income Account or, to the extent funds
are not available in such account, from the Capital Account, and pay
to itself individually an amount equal to the portion of the advance
for the Initial Costs specified in Section 10.02(b) for which it is
then entitled to reimbursement pursuant to such section;
(c) deduct from the Income Account or, to the extent funds
are not available in such Account, from the Capital Account, and pay
to the Sponsor or successor Sponsor the amount that it is entitled to
receive pursuant to Sections 7.02 and 8.01(f); and
(d) to the extent that the Trustee has been advised that
costs incurred in keeping the registration of Units and the Trust on a
current basis are permitted to be deducted at that time by the
Securities and Exchange Commission, deduct from the Income Account, or
to the extent funds are not available in such Account, from the
Capital Account, an amount equal to the unpaid fees and expenses
incurred in keeping the registration statement current as provided in
Section 10.03.
Any amounts that the Trustee has paid pursuant to (c) above in excess
of the amount to which the Sponsor is entitled pursuant to Section 7.02, shall
be returned to the Trust and distributed on the next Distribution Date to
Unitholders of record on the preceding Record Date.
On each Income Account Distribution Date with respect to Income
Account Distributions ("Income Distributions"), and on each annual Distribution
Date with respect to Capital Account Distributions ("Capital Distributions") or
within a reasonable period of time thereafter, the Trustee shall distribute by
check mailed to each Unitholder of record at the close of business on the
preceding Record Date at his address appearing on such Record Date on the
registration books of the Trustee or by such other means as may be mutually
agreed upon by the Trustee and the Unitholder, such Unitholder's pro rata share
of the balance of the Income and/or Capital Accounts, as the case may be,
computed as of such Record Date in the manner set forth below, provided,
however, that the Trustee, if so directed with respect to distributions from
the Income Account and the Capital Account in a writing signed by the Sponsor
on behalf of Unitholders electing the reinvestment plan offered in the
Prospectus (the "Reinvestment Plan") and received by the Trustee at least ten
days prior to the Record Date for the first distribution to which such notice
is to apply, use such distributions to purchase Units from the Sponsor, which
may be Units held by the Sponsor or additional Units created pursuant to the
provisions of Section 2.02, for the accounts of such Unitholders under the
terms and conditions set forth in the Prospectus. Only whole Units shall be
purchased pursuant to this Section 3.04.
The Trustee shall, as of each Income Account Record Date, compute and
report to the Sponsor the per-Unit amount of the monthly income distribution to
be made on the next following Distribution Date (the "Monthly Income
Distribution") by (i) estimating the annual income of the Trust Fund for the
ensuing twelve months (by reference to the most recent distributions made on
Securities and any information received by the Trustee with respect to future
dividends or other income), (ii) deducting therefrom the estimated costs and
expenses to be incurred during the twelve-month period for which such income
has been estimated and (iii) dividing the amount so obtained by the result by
twelve (12) multiplied by the number of Units outstanding on such Record Date.
However, unless the Trustee or
the Sponsor determines that the Monthly Income Distribution should be reduced
as provided hereafter, the amount of the Monthly Income Distribution shall be
the amount computed by the Trustee on the most recent prior, or concurrently
occurring, Quarterly Computation Date (such "Quarterly Computation Date" being
the first Income Account Record Date and each Record Date occurring at
three-month intervals thereafter). The Trustee shall adjust the amount of the
Monthly Income Distribution computed on each Quarterly Computation Date to
reconcile, over the ensuing three Monthly Income Distributions, any variance
between net income and distributions made during the preceding three months.
Notwithstanding the foregoing, the Trustee may reduce the amount of any Monthly
Income Distribution in the event the Trustee or the Sponsor determines that
such reduction is necessary to avoid, or to respond to, a significant
discrepancy between estimated and actual net income.
In the event the amount on deposit in the Income Account of the Trust
Fund on a Distribution Date is not sufficient for the payment of the amount of
income to be distributed on the basis of the above computation, the Trustee
shall advance out of its own funds and cause to be deposited in and credited to
the Income Account such amount as may be required to permit payment of the
income distribution to be made on such Distribution Date and shall be entitled
to be reimbursed out of the income subsequently received, without interest, on
the first Income Account Record Date following the date of such advance on
which such reimbursement may be made without reducing the cash balance of the
Income Account to an amount less than that required for the next ensuing
distribution. The Trustee shall be deemed to be the beneficial owner of the
dividends or other income received by the Trust Fund to the extent of all
amounts advanced by it pursuant to this paragraph, and such advances shall be
considered a lien on the Trust Fund prior to the interest of Unitholders.
The Unitholders distribution from the Capital Account shall be an
amount substantially equal to the Unitholder's pro rata share of the cash
balance of the Capital Account (but not including cash required to purchase
Contract Securities or held for reinvestment in Replacement Securities
purchased pursuant to Section 3.15) computed as of the close of business on the
preceding Capital Account Record Date, provided, however, that the Trustee
shall not be required to make a distribution from the Capital Account unless
the cash balance on deposit therein available for distribution shall be
sufficient to distribute at least that amount per Unit stated in the Trust
Indenture.
The amounts to be distributed to each Unitholder shall be that pro
rata share of the cash balances of the Income and Capital Accounts of the Trust
Fund, computed as provided above, as shall be represented by the Units owned by
such Unitholder as evidenced by the record books of the Trustee as
of the applicable Record Date. In computing the distribution to be made to any
Unitholder, fractions of one cent shall be omitted.
In the event a Unitholder of a particular series of any Trust fund is
also a Unitholder of one or more other series of a trust for which the Trustee
is the trustee and for which the Sponsor is the sole depositor, and such
Unitholder has not elected to participate in the Reinvestment Plan, then the
Trustee shall consolidate in one check the distribution required to be made to
a Unitholder hereunder with all other distributions required to be made on such
Distribution Date to such Unitholder pursuant to the indenture governing such
other series; provided that an appropriate statement of distribution be
furnished therewith as required by the applicable Trust Indenture."
N. The following sentence shall be added at the conclusion of the
first paragraph of Section 4.01:
"Notwithstanding any contrary provision of this paragraph, the Trustee
shall, unless the Sponsor shall otherwise direct, evaluate any Restricted
Security which is the subject of a registration rights agreement or other
similar agreement at the last reported sales price of the comparable security
of the same issuer listed on a national securities exchange (and if such
comparable security is listed on more than one exchange, at the last reported
sales price on the exchange where such security is principally traded.) In the
event that there is no comparable security listed on a national securities
exchange for such Restricted Security, the Trustee shall designate an appraisal
service as provided for in this Indenture, which appraisal service shall
consider the factors provided in this Section 4.01 for the purpose of valuing
such Restricted Security."
IN WITNESS WHEREOF, PaineWebber Incorporated has caused this Trust
Indenture and Agreement to be executed by one of its Vice Presidents and its
corporate seal to be hereto affixed and attested by one of its Assistant
Secretaries, and The Chase Manhattan Bank has caused this Trust Indenture to be
executed by one of its Vice Presidents and its corporate seal to be hereto
affixed and attested by one of its Assistant Secretaries or Assistant
Treasurers, all as of the date first above written.
PAINEWEBBER INCORPORATED
as Depositor and Sponsor
SEAL By
-------------------------------
Senior Vice President
Attest:
May 26, 1998
--------------------------
Secretary
STATE OF NEW YORK )
:ss.:
COUNTY OF NEW YORK )
On this 27th day of May, 1998 before me personally appeared
Xxxxxx X. Xxxxxx, to me known, who being by me duly sworn, said that he is a
Senior Vice President of PaineWebber Incorporated, one of the corporations
described in and which executed the foregoing instrument; that he knows the
seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by authority of the Board of Directors
of said corporation, and that he signed his name thereto by like authority.
-----------------------------------
Notary Public
THE CHASE MANHATTAN BANK
By:
--------------------------------
Title:
-----------------------------
SEAL
Attest:
-----------------------------
Title:
STATE OF NEW YORK )
:ss.:
COUNTY OF NEW YORK )
On this 27th day of May, 1998 before me personally appeared , to me
known, who being by me duly sworn, said that he/she is a of The Chase Manhattan
Bank, one of the corporations described in and which executed the foregoing
instrument; that he/she knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation, and that he/she signed
his/her name thereto by like authority.
-----------------------------------
Notary Public
SCHEDULE A
SCHEDULE OF INVESTMENTS
AS OF INITIAL DATE OF DEPOSIT, MAY 27, 1998
COMMON STOCKS (1)
NUMBER OF COST OF SECURITIES
NAME OF ISSUER SHARES TO TRUST(2)
-------------- ----------- ------------------
Alexandria Real Estate Equities, Inc. (9.1%) 442 $ 13,646.75
Camden Property Trust (3.0%) ................ 152 4,493.50
Chateau Communities, Inc. (2.0%) ............ 104 2,990.00
Colonial Properties Trust (3.1%) ............ 153 4,647.38
Cornerstone Realty Income Trust, Inc. (7.5%) 978 11,247.00
EastGroup Properties, Inc. (2.0%) ........... 155 2,993.44
FelCor Suite Hotels, Inc. (3.2%) ............ 141 4,802.81
Gables Residential Trust (1.5%) ............. 83 2,246.19
Home Properties of New York, Inc. (7.2%) ... 409 10,812.94
Kimco Realty Corporation (7.6%) ............. 299 11,399.38
Liberty Property Trust (2.5%) ............... 144 3,762.00
The Macerich Company (12.5%) ................ 698 18,758.75
Xxxx-Xxxx Realty Corporation (9.0%) ........ 369 13,514.63
Post Properties, Inc. (3.7%) ................ 137 5,531.38
PS Business Parks, Inc. (6.2%) .............. 384 9,312.00
Realty Income Corporation (1.2%) ............ 69 1,794.00
Shurgard Storage Centers, Inc. (2.0%) ...... 106 2,981.25
Xxxxx XxXxxxxxx Group, Inc. 12.7%) .......... 581 19,060.09
Storage USA, Inc. (2.0%) .................... 82 3,008.38
Sun Communities, Inc. (2.0%)................. 90 2,998.13
------------------
TOTAL INVESTMENTS.......................... $150,000.00
==================
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(1) All Securities are represented entirely by contracts to purchase
Securities.
(2) Valuation of the Securities by the Trustee was made as described in
"Valuation" as of the close of business on the business day prior to
the Initial Date of Deposit.
(3) The loss to the Sponsor on the date of Initial Date of Deposit is
$10.00.
