________________________________________________________________________________
STANDARD TERMS AND CONDITIONS OF TRUST
FOR
NUVEEN UNIT TRUSTS SERIES 1
and subsequent Series
Effective: , 1997
Between
XXXX NUVEEN & CO. INCORPORATED
As Depositor
and
THE CHASE MANHATTAN BANK
As Trustee
______________________________
________________________________________________________________________________
STANDARD TERMS AND CONDITIONS OF TRUST
NUVEEN UNIT TRUST
TABLE OF CONTENTS
SECTION HEADING PAGE
Form of Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . .5
ARTICLE II DEPOSIT OF SECURITIES; ACCEPTANCE OF TRUST; FORM AND
ISSUANCE OF CERTIFICATES; INSURED TRUST BOND INSURANCE. .8
Section 2.01. Deposit of Securities. . . . . . . . . . . . . . . . .8
Section 2.02. Acceptance of Trust. . . . . . . . . . . . . . . . . 10
Section 2.03. Issue of Certificates. . . . . . . . . . . . . . . . 10
Section 2.04. Form of Certificates . . . . . . . . . . . . . . . . 11
Section 2.05. Uncertificated Form. . . . . . . . . . . . . . . . . 11
Section 2.06 Separate Trusts. . . . . . . . . . . . . . . . . . . 11
Section 2.07. Insured Trust Corporate Bond Insurance . . . . . . . 11
ARTICLE III ADMINISTRATION OF FUND. . . . . . . . . . . . . . . . . 12
Section 3.01. Initial Cost . . . . . . . . . . . . . . . . . . . . 12
Section 3.02. Interest Account . . . . . . . . . . . . . . . . . . 13
Section 3.03. Principal Account. . . . . . . . . . . . . . . . . . 13
Section 3.04. Reserve Account. . . . . . . . . . . . . . . . . . . 14
Section 3.05. Distributions. . . . . . . . . . . . . . . . . . . . 14
Section 3.06. Distribution Statements. . . . . . . . . . . . . . . 16
Section 3.07. Sale of Securities . . . . . . . . . . . . . . . . . 18
Section 3.08. Refunding Securities . . . . . . . . . . . . . . . . 19
Section 3.09. Counsel. . . . . . . . . . . . . . . . . . . . . . . 20
Section 3.10. Notice and Sale by Trustee . . . . . . . . . . . . . 20
Section 3.11. Trustee Not to Amortize. . . . . . . . . . . . . . . 20
Section 3.12. Liability of Depositor . . . . . . . . . . . . . . . 20
Section 3.13. Notice to Depositor. . . . . . . . . . . . . . . . . 20
Section 3.14. Limited Replacement of Special Securities. . . . . . 21
ARTICLE IV EVALUATION, REDEMPTION, PURCHASE, TRANSFER OR
INTERCHANGE OF UNITS AND REPLACEMENT OF
CERTIFICATES. . . . . . . . . . . . . . . . . . . . . . 24
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Section 4.01. Evaluation . . . . . . . . . . . . . . . . . . . . . 24
Section 4.02. Redemptions by Trustee; Purchases by Depositor . . . 25
Section 4.03. Transfer or Interchange of Certificates or
Units Held in Uncertificated Form. . . . . . . . . . 28
Section 4.04. Certificates Mutilated, Destroyed, Stolen or Lost. . 29
Section 4.05. Compensation of Depositor. . . . . . . . . . . . . . 29
ARTICLE V TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 5.01. General Definition of Trustee's Liabilities,
Rights and Duties. . . . . . . . . . . . . . . . . . 30
Section 5.02. Books, Records and Reports . . . . . . . . . . . . . 33
Section 5.03. Indenture and List of Securities on File . . . . . . 33
Section 5.04. Compensation . . . . . . . . . . . . . . . . . . . . 33
Section 5.05. Removal and Resignation of Trustee; Successor. . . . 34
Section 5.06. Qualifications of Trustee. . . . . . . . . . . . . . 36
ARTICLE VI RIGHTS OF UNITHOLDERS . . . . . . . . . . . . . . . . . 36
Section 6.01. Beneficiaries of Trust . . . . . . . . . . . . . . . 36
Section 6.02. Rights, Terms and Conditions . . . . . . . . . . . . 36
ARTICLE VII ADDITIONAL COVENANTS; MISCELLANEOUS PROVISIONS. . . . . 37
Section 7.01. Amendments . . . . . . . . . . . . . . . . . . . . . 37
Section 7.02. Termination. . . . . . . . . . . . . . . . . . . . . 37
Section 7.03. Construction . . . . . . . . . . . . . . . . . . . . 39
Section 7.04. Registration of Units. . . . . . . . . . . . . . . . 39
Section 7.05. Written Notice . . . . . . . . . . . . . . . . . . . 39
Section 7.06. Severability . . . . . . . . . . . . . . . . . . . . 39
Section 7.07. Dissolution of Depositor Not to Terminate. . . . . . 39
____________________________
This Contents does not constitute part of the Indenture.
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STANDARD TERMS AND CONDITIONS OF TRUST
FOR
NUVEEN UNIT TRUST SERIES 1
and certain subsequent Series
Effective , 1997
These Standard Terms and Conditions of Trust effective , 1997 are
executed by and between Xxxx Nuveen & Co. Incorporated, as Depositor and The
Chase Manhattan Bank, as Trustee.
WITNESSETH THAT:
In consideration of the premises and of the mutual agreements herein
contained, the Depositor and the Trustee agree as follows:
INTRODUCTION
These Standard Terms and Conditions of Trust, effective May 29, 1997,
shall be applicable to Nuveen Unit Trust Series 1 and certain subsequent
Series established after the date of effectiveness hereof, as provided in
this paragraph. For Nuveen Unit Trust Series 1 and all subsequent Series
established after the date of effectiveness hereof to which these Standard
Terms and Conditions of Trust, effective May 29, 1997, are to be applicable,
the Depositor and the Trustee shall execute a Trust Indenture and Agreement,
incorporating by reference these Standard Terms and Conditions of Trust,
effective May 29, 1997, and designating any exclusion from or exception to
such incorporation by reference for the purposes of that Series or variation
of the terms hereof for the purposes of that Series and specifying for that
Series and for each Trust in such Series (i) the Securities deposited in
trust, (ii) the fractional undivided interest represented by each Unit and
(iii) the number of Units of the Trust.
WHEREAS, for those Units which at any time or from time to time may be held
in certificated form, the form of the certificates of ownership in the
respective Trusts ("CERTIFICATES") shall be substantially as follows:
No. ____ CERTIFICATE OF OWNERSHIP Units _____
Description of Trust Plan of Distribution ______
CUSIP______________________
This is to certify that _______________________________________ is the
owner and registered holder of this Certificate evidencing the ownership of
________________ units of undivided interest in the above-named Trust created
pursuant to the Trust Indenture and Agreement between Xxxx Nuveen & Co.
Incorporated and The Chase Manhattan Bank (the "TRUSTEE"), a copy of which is
available at the office of the Trustee. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Indenture to which the
Holder of this Certificate by virtue of the acceptance hereof assents and is
bound, a summary of which Indenture is contained in the Prospectus relating to
the Trust. This Certificate is transferable and interchangeable by the
registered owner in person or by his duly authorized attorney at the Trustee's
office upon surrender of this Certificate properly endorsed or accompanied by a
written instrument of transfer and any other documents that the Trustee may
require for transfer, in form satisfactory to the Trustee and payment of the
fees and expense provided in the Indenture.
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IN WITNESS WHEREOF, Xxxx Nuveen & Co. Incorporated has caused this Certificate
to be executed in facsimile by its Chairman of the Board and The Chase Manhattan
Bank, as Trustee, has caused this Certificate to be executed in facsimile in its
corporate name by an authorized officer.
Date:
XXXX NUVEEN & CO. INCORPORATED,
Depositor
By_____________________________________
THE CHASE MANHATTAN BANK, Trustee
By_____________________________________
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FORM OF ASSIGNMENT
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 ______
TEN ENT -as tenants by the entireties (Cust) (Minor)
JT TEN -as joint tenants with right Under Uniform Gifts to Minors Act
of survivorship and not
as tenants in common ______________________________
State
Additional abbreviations may also be used though not in the above list.
For Value Received, ________________________________ hereby sell, assign and
transfer ____________ Units represented by this Certificate unto______________
SOCIAL SECURITY OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE MUST BE PROVIDED
____________________________________________
____________________________________________
_______________________________________________________________________________
and does hereby irrevocably constitute and appoint
_____________________________________________________, attorney, to transfer
said Units on the books of the Trustee, with full power and substitution in the
premises.
Dated: ____________________________________________
NOTICE: The signature to this assignment
must correspond with the name as written upon
the face of the Certificate in every
particular, without alteration or enlargement
or any change whatever.
SIGNATURE(S) GUARANTEED BY
_________________________________
Firm or Bank
_________________________________
Authorized Signature
Signatures must be guaranteed by a participant in the Securities Transfer Agents
Medallion Program ("STAMP") or such other guarantee program in addition to, or
in substitution for, STAMP, as may be accepted by the Trustee.
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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) "SECURITIES" shall mean such of the corporate debt obligations
(the "CORPORATE BONDS"); taxable, mortgage backed securities of the modified
pass through type guaranteed by the Government National Mortgage
Association and backed by the full faith and credit of the United States
(the "XXXXXX XXXX" or "XXXXXX XXX SECURITIES"); and/or U.S. Treasury bonds
which may included zero coupons Treasury obligations, i.e., Treasury
obligations which accrue but do not pay interest currently, are sold at a
discount from principal value and represent an obligation to receive the
principal value thereof at a future date (the "TREASURY OBLIGATIONS");
including delivery statements relating to "when, as and if issued" and/or
"regular-way" contracts, if any, for the purchase of certain securities and
certified or bank check(s) or letter(s) of credit sufficient in amount or
availability required for such purchase, deposited in irrevocable trust and
listed in Schedule A of the Trust Agreement, and any obligations received
in exchange, substitution or replacement for such obligations pursuant to
Sections 3.08 and 3.14 hereof, as may from time to time continue to be held
as part of the Trust Fund. Only zero coupon Treasury Obligations which, if
certificated, are or may be registered and held by the Trustee in book
entry form on the registration books of a bank or clearing house which it
is authorized to use a custodian of assets of a unit investment trust
pursuant to the Investment Company Act of 1940 shall be eligible for
deposit in any Trust.
(2) "BOOK ENTRY DEALER" shall mean those dealers including banks,
trust companies and other investment advisers for whose customers the
Depositor executes and confirms trades, and broker/dealers that clear
trades in Units through the Depositor, through whom purchasers of Units
will automatically be book entry Unitholders.
(3) "BOOK ENTRY POSITION" shall mean any position in Units of a
Trust which ownership is recorded on the books of the Trustee which notation
evidences ownership of an undivided fractional Interest in a Trust in book
entry form.
(4) "BOOK ENTRY POSITION CONFIRMATION" shall mean the notice sent
out by the Depositor to a purchaser of Units through a Book Entry Dealer,
or a Unitholder who converts certificated Units to a Book Entry Position
which confirms such purchase or conversion.
(5) "BOOK ENTRY UNITHOLDER" shall mean the registered holder of any
Book Entry Position as recorded on the books of the Trustee, his legal
representatives and
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heirs and the successors of any corporation, partnership or other legal
entity which is a registered holder of any Book Entry Position and as such
shall be deemed a beneficiary of the related Trust created by this
Indenture to the extent of his pro rata share thereof.
(6) "BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or, in the City of New York, a legal holiday or a day on which
banking institutions are authorized by law to close.
(7) "CERTIFICATE" shall mean any one of the certificates executed
by the Trustee and the Depositor evidencing ownership of an undivided
fractional interest in a Trust.
(8) "CERTIFICATED UNITHOLDER" shall mean the registered holder of
any Certificate, his legal representatives and heirs and the successors of
any corporation, partnership or other legal entity which is a registered
holder of any Certificate and as such shall be deemed a beneficiary of the
related Trust created by this Indenture to the extent of his pro rata share
thereof.
(9) "DEPOSITOR" shall mean Xxxx Nuveen & Co. Incorporated and its
successors in interest, or any successor depositor as hereinafter provided
for.
(10) "ELIGIBLE BOOK ENTRY UNITHOLDER" shall have the meaning
ascribed to such term in Section 4.02 of this Indenture.
(11) "INDENTURE" shall mean this Standard Terms and Conditions of
Trust as originally executed or, if amended as hereinafter provided, as so
amended, together with the Trust Indenture and Agreement creating a
particular series of the Fund.
(12) "INSURANCE" shall mean the contract or contracts or policy or
policies of insurance guaranteeing the payment when due of the principal of
and interest on the Corporate Bonds (except Corporate Bonds held pursuant
and subject to this Indenture which are insured by individual policies of
insurance which have been obtained by the issuers or underwriters of such
Corporate Bonds or others (the "PRE-INSURED BONDS")) held pursuant and
subject to this Indenture, together with the proceeds, if any, thereof
payable to or received by the Trustee for the benefit of each Insured Trust
in the Fund and the respective Unitholders thereof.
(13) "INSURED TRUST" shall mean any separate trust created by this
Indenture, each Corporate Bond contained in the portfolio of which is
either a Pre-Insured Bond or guaranteed by insurance obtained by the
Depositor from the Insurer.
(14) "INSURER" shall mean the MBIA Insurance Corporation (the
"CORPORATION"), its successors and assigns, having its headquarters in
Armonk, New
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York, and issuing the contracts or policies of insurance protecting the
owners of the Bonds against nonpayment when due of the principal thereof
and interest thereon (except for Pre-Insured Bonds).
(15) "NEW BONDS" shall have the meaning ascribed to such term in
Section 3.14 of this Indenture.
(16) "PROSPECTUS" shall mean the prospectus relating to the Trust
Fund filed with the Securities and Exchange Commission pursuant to Rule
497(b) under the Securities Act of 1933, as amended, in the form first used
to confirm sales of Units.
(17) "TELEPHONE REDEMPTION AUTHORIZATION FORM" shall mean any form
approved by the Trustee for use by Book Entry Unitholders redeeming 1,000
Units or less.
(18) "TRUST" OR "TRUSTS" shall mean the separate trust or trusts
created by this Indenture, the Securities constituting the portfolios of
which are listed in the various separate Schedules attached to the Trust
Agreement.
(19) "TRUST AGREEMENT" shall mean the Trust Indenture and
Agreement for the particular series of the Fund into which this Standard
Terms and Conditions is incorporated.
(20) "TRUSTEE" shall mean The Chase Manhattan Bank, or any
successor trustee as hereinafter provided for.
(21) "TRUSTEE'S OFFICE" shall mean the office of the Trustee
specified in the Prospectus or any other office that the Trustee may from
time to time designate as the principal office where its unit trust business
shall be conducted.
(22) "TRUST FUND" or "FUND" shall mean the collective Trusts
created by this Indenture, which shall consist of all the Securities held
pursuant and subject to this Indenture together with all undistributed
interest received or accrued thereon, and any undistributed cash realized
from the sale, redemption, liquidation, or maturity thereof or the
proceeds of insurance received in respect thereof. Such amounts as may
be on deposit in the Reserve Account hereinafter established shall be
excluded from the Trust Fund.
(23) "UNIT" in respect of any Trust shall mean the fractional
undivided interest in and ownership of the Trust equal initially to the
fraction specified in "Essential Information" in the Prospectus, the
numerator of which is one and the denominator of which shall be (1)
increased by the number of any additional Units issued pursuant to
Section 2.01 hereof and (2) decreased by the number of any such Units
redeemed as provided in Section 4.02.
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(24) "UNITHOLDER" shall mean any Book Entry Unitholder or any
Certificated Unitholder.
(25) Words importing singular number shall include the plural
number in each case and vice versa, and words importing person shall
include corporations and associations, as well as natural persons.
(26) 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.
Article II
Deposit of Bonds; Acceptance of Trust; Form and Issuance
of Certificates; Insured Trust Bond Insurance
SECTION 2.01. DEPOSIT OF SECURITIES. (a) The Depositor, on the date of
the Trust Agreement, has deposited with the Trustee in trust the Securities
listed in Schedule A to the 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, managed and applied by the Trustee as herein provided.
The Depositor agrees to pay the total purchase price of all the Securities and
shall deliver the Securities listed on said Schedule A to the Trustee which were
represented by delivery statements at the time of the execution and delivery of
the Trust Agreement within 90 days after said execution and delivery, or if the
contract to buy such Securities between the Depositor and seller is terminated
by the seller thereof for any reason beyond the control of the Depositor, the
Depositor shall forthwith take the remedial action specified in Section 3.14.
(b) From time to time following the Initial Date of Deposit, the Depositor
is hereby authorized, in its discretion, to assign, convey to and deposit with
the Trustee additional Securities, in bearer form or duly endorsed in blank or
accompanied by all necessary instruments of assignment and transfer in proper
form (or Contract Obligations relating to such Securities), to be held, managed
and applied by the Trustee as herein provided. In lieu of additional Securities
or Contract Obligations representing additional Securities, the Depositor may
deposit with the Trustee cash (or a letter of credit) in an amount equal to the
valuation made in accordance with Section 4.01 for the date of such deposit of
the additional Securities not delivered or represented by Contract Obligations
together with instructions to purchase such additional Securities. Each deposit
of additional Securities shall be made pursuant to a Notice of Deposit of
Additional Securities from the Depositor to the Trustee. Except as provided in
the following subparagraph (c), the Depositor, in each case, shall ensure that
each deposit of additional Securities pursuant to this Section shall be, as
nearly as is practicable, in the identical ratio as the Percentage Ratio for
such Securities as is specified in the Prospectus (adjusted as hereinafter
provided) for the Trust and the Depositor shall ensure that such Securities are
identical to those deposited on the Initial Date of Deposit. The Percentage
Ratio shall be adjusted, as directed by the Depositor, to reflect (1) the
deposit of New Securities, (2) the sale of Securities pursuant to Sections 3.08,
3.10, 4.02 or
-8-
otherwise as provided hereunder, and (3) the occurrence of any stock dividend,
stock splits, receipt of securities under Section 3.08, redemptions, or similar
events. The Depositor shall deliver the additional Securities which were not
delivered concurrently with the deposit of additional Securities and which were
represented by Contract Obligations within 10 calendar days after such deposit
of additional Securities (the "ADDITIONAL SECURITIES DELIVERY PERIOD"). If a
contract to buy such Securities between the Depositor and seller is terminated
by the seller thereof for any reason beyond the control of the Depositor or if
for any other reason such Securities are not delivered to the Trust by the end
of the Additional Securities Delivery Period for such deposit, the Trustee shall
immediately draw on the Letter of Credit, if any, in its entirety, apply the
monies in accordance with Section 2.01(e), and the Depositor shall forthwith
take the remedial action specified in Section 3.14. If the Depositor does not
take the action specified in Section 3.14 within 10 calendar days of the end of
the Additional Securities Delivery Period, the Trustee shall forthwith take the
action specified in Section 3.14. If the Depositor determines that Securities
for whose purchase cash was deposited with the Trustee cannot be acquired, the
Depositor may proceed pursuant to Section 3.14 in the same manner as if such
Securities were Special Securities. Instructions to purchase additional
Securities shall be in writing and shall specify the name, CUSIP number, if any,
aggregate amount of the Security to be purchased and price. The Trustee shall
have no responsibility or liability for any loss or depreciation resulting from
any purchase made pursuant to the Depositor's instructions and in the absence
thereof shall have no duty to purchase any Securities. The Trustee shall have
no responsibility for maintaining the composition of the Trust portfolio.
(c) Any contrary authorization in the preceding subparagraph (b)
notwithstanding, deposits of additional Securities made after the 90-day period
immediately following the Initial Date of Deposit (except for deposits made to
replace Failed Contract Obligations if such deposits occur within 20 days from
the date of a failure occurring within such initial 90-day period) shall
maintain exactly the Percentage Ratio existing immediately prior to such
deposit.
(d) In connection with the deposits described in Section 2.01 (a) and (b),
the Depositor has, in the case of Section 2.01(a) deposits, and, prior to the
Trustee accepting a Section 2.01(b) deposit will, deposit cash and/or Letter(s)
of Credit in an amount sufficient to purchase the Contract Obligations (the
"PURCHASE AMOUNT") relating to Securities which are not actually delivered to
the Trustee at the time of such deposit, the terms of which unconditionally
allow the Trustee to draw on the full amount of the available Letter of Credit.
The Trustee may allow the Depositor to substitute any Letter(s) of Credit
deposited with the Trustee in connection with the deposits described in Section
2.01(a) and (b) with cash in an amount sufficient to satisfy the obligations to
which the Letter(s) of Credit relates. Any substituted Letter(s) of Credit
shall be released by the Trustee. The Trustee may deposit such cash or cash
drawn on the Letter of Credit in a non-interest bearing account for the Trust.
(e) In the event that the purchase of Contract Obligations pursuant to any
contract shall not be consummated in accordance with said contract or if the
Securities represented by a Contract Obligation are not delivered to the Trust
in accordance with Section 2.01(a) or
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2.01(b) and the monies, or, if applicable, the monies drawn on the Letter of
Credit, deposited by the Depositor are not utilized for Section 3.14 purchases
of New Securities, such funds, to the extent of the purchase price of Failed
Contract Obligations for which no Replacement Security was acquired pursuant to
Section 3.14, plus all amounts described in the next succeeding two sentences,
shall be credited to the Principal Account and distributed pursuant to Section
3.05 to Unitholders of record as of the Record Date next following the failure
of consummation of such purchase. The Depositor shall cause to be refunded to
each Unitholder his PRO RATA portion of the sales charge levied on the sale of
Units to such Unitholder attributable to such Failed Contract Obligation. The
Depositor shall also pay to the Trustee, for distribution to the Unitholders, an
amount equal to the accrued interest (at the coupon rate of the Failed
Securities) to the date the Depositor notifies the Trustee that no Replacement
Security will be purchased or, in the absence of such notification, to the
expiration date for purchase of a Replacement Security specified in Section
3.14. Any amounts remaining from monies drawn on the Letter of Credit which are
not used to purchase New Securities or are not used to provide refunds to
Unitholders shall be paid to the Depositor.
(f) The Trustee is hereby irrevocably authorized to effect registration or
transfer of the Securities in fully registered form to the name of the Trustee
or to the name of its nominee.
(g) In connection with and at the time of any deposit of additional
Securities pursuant to Section 2.01(b), the Depositor shall exactly replicate
Cash (as defined below) received or receivable by the Trust as of the date of
such deposit. For purposes of this paragraph, "Cash" means, as to the Principal
Account, cash or other property (other than Securities) on hand in the Principal
Account or receivable and to be credited to the Principal Account as of the date
of the deposit (other than amounts to be distributed solely to persons other
than holders of Units created by the deposit) and, as to the Income Account,
cash or other property (other than Securities) received by the Trust as of the
date of the deposit or receivable by the Trust in respect of matured interest
payments not received as of the date of the deposit, reduced by (i) the amount
of any cash or other property received or receivable on any Security allocable
(in accordance with the Trustee's calculation of the monthly distribution from
the Income Account pursuant to Section 3.05) to a distribution made or to be
made in respect of a Record Date occurring prior to the deposit and (ii) unpaid
fees and expenses allocable to the period prior to the deposit. Such
replication will be made on the basis of a fraction, the numerator of which is
the number of Units created by the deposit and the denominator of which is the
number of Units which are outstanding immediately prior to the deposit.
(h) With respect to Units created by the deposit of additional Securities,
annual fees payable hereunder shall be calculated, and estimated expenses (other
than organizational expenses borne by the Trust Fund pursuant to Section 3.01)
shall be estimated, ratably on the basis of the period during which such Units
have been in existence. The Depositor shall from time to time provide the
Trustee estimates of the total number of additional Securities to be
deposited and total number of Units to be created, on which the Trustee is
authorized conclusively to rely for purposes of estimating income, expenses
and the accrual thereof. In the event the Trustee is informed by the
Depositor of a revision in its estimates and upon the conclusion of the
deposit of additional Securities, the Trustee shall base calculations made
thereafter on such revised estimates or actual expenses, respectively, but
any such revision shall not affect calculations made prior thereto and no
adjustment shall be made in respect thereof.
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SECTION 2.02. ACCEPTANCE OF TRUST: The Trustee hereby accepts the trust
herein created for the use and benefit of the Unitholders in the Trusts, subject
to the terms and conditions of this Indenture.
SECTION 2.03. ISSUE OF CERTIFICATES. The Trustee hereby acknowledges
receipt of the deposit referred to in Section 2.01 and simultaneously with the
receipt of said deposit has executed and delivered to or on the order of the
Depositor Certificates substantially in the form above recited or has recorded
on the books of each Trust for the account of the Depositor the ownership of
Units representing the ownership of the number of Units of each Trust Fund
specified in Part II of the Trust Agreement. The Trustee hereby agrees that on
the date of any Notice of Deposit of Additional Securities pursuant to Section
2.01 of the Indenture, it shall acknowledge that the additional Securities
identified therein have been deposited with it by recording on its books the
ownership, by the Depositor or such other person or persons as may be indicated
by the Depositor, of the aggregate number of Units to be issued in respect of
such additional Securities so deposited, and shall, if so requested, execute and
deliver Certificates substantially in the form above recited representing the
ownership of an aggregate number of those Units.
SECTION 2.04. FORM OF CERTIFICATES. Each Certificate referred to in
Section 2.03 is, and each Certificate hereafter issued shall be, in
substantially the form hereinabove recited, numbered serially for
identification, in fully registered form, transferable only on the books of the
Trustee as herein provided, executed either manually or in facsimile by an
authorized signatory of the Trustee and in facsimile by the Chairman, President
or one of the Vice Presidents of the Depositor and dated the date of execution
and delivery by the Trustee.
SECTION 2.05. UNCERTIFICATED FORM. Units may also be held in
uncertificated form. Upon the issuance of Units in uncertificated form, the
Trustee shall provide to the registered owner within two business days after the
issuance, an initial transaction statement which sets forth a description of the
Fund, the number of Units issued, the name, address and taxpayer identification
number, if any, of the Unitholders and the date the issuance was registered or
setting forth those items as are required by Article 8 of the Uniform Commercial
Code currently in effect in the State of New York. Unitholders evidenced by
Certificates may at any time elect to have their Units held in uncertificated
form by surrendering their Certificates to the Trustee for cancellation. At
such time, an appropriate notation will be made in the registration books of the
Trust to indicate that the Units formerly evidenced by such canceled
Certificates are Units held in uncertificated form. The Trustee shall, at the
request of the holder of any Units held in uncertificated form, issue a new
Certificate to evidence such Units and at such time make appropriate notation in
the registration books of the Trust. If the Prospectus so provides, Units will
be held (i) solely in uncertificated form or (ii) held in uncertificated form
unless the Unitholder submits a written request to the Trustee for the issuance
of a Certificate.
SECTION 2.06 SEPARATE TRUSTS: The Trusts created by this Indenture are
separate and distinct trusts for all purposes and the assets of one trust may
not be commingled with the assets of any other nor shall the expenses of any
trust be charged against the other. The Certificates and/or Book Entry
Positions representing the ownership of Units of undivided
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fractional interest in one Trust shall not be exchangeable for certificates or
book entry positions representing ownership of Units of undivided fractional
interest in any other Trust.
SECTION 2.07. INSURED TRUST CORPORATE BOND INSURANCE: Concurrently with
the delivery to the Trustee of the Corporate Bonds listed in the Schedules for
Insured Trusts attached to the Trust Agreement, the Insurer has delivered to and
deposited with the Trustee, a unit investment trust insurance policy or policies
(the "Insurance") to protect each Corporate Bond and the Unitholders of the
respective Insured Trust in which such Corporate Bond is held against nonpayment
of principal and interest when due on any such Corporate Bond or Corporate Bonds
(except for Pre-Insured Bonds).
The Trustee shall take all action deemed necessary or advisable in
connection with the Insurance to continue the Insurance in full force and
effect, all in such manner as in its sole discretion shall appear to result in
the most protection and least expense to each Insured Trust.
At all times during the existence of the Insured Trust, the Insurance
policies shall provide for payment by the Insurer to the Trustee of any amounts
of principal and interest due, but not paid, by the issuer of an insured
Corporate Bond. The Trustee shall promptly notify the Insurer of any nonpayment
or threatened nonpayment of principal or interest and the Insurer shall in
accordance with the terms of the policies make payment to the Trustee of all
amounts of principal and interest at that time due, but not paid.
Upon the making of any payment referred to in the preceding paragraphs, the
Insurer shall succeed to the rights of the Trustee under the Corporate Bond or
Corporate Bonds involved to the extent of the payments made. Concurrently with
the payment of any amounts by the Insurer occasioned by the nonpayment of
principal and/or interest by the issuer, the Trustee shall execute and deliver
to the Insurer any receipt, instrument or document required to evidence the
right of the Insurer to payment of principal and/or interest under the Corporate
Bond or Corporate Bonds involved to the extent of the payments made by the
Insurer to the Trustee.
The Trustee shall promptly notify the Corporation of any nonpayment of
principal of or interest on any Bonds and if the Corporation should fail to make
payment to the Trustee within 30 days after receipt of such notice, the Trustee
shall take all action against the Corporation and/or the issuer deemed necessary
to collect all amounts of principal and interest at that time due, but not
collected.
ARTICLE III
ADMINISTRATION OF FUND
SECTION 3.01. INITIAL COST: Unless otherwise provided in the Trust's
prospectus, the expenses incurred in establishing the Trust, including the cost
of the preparation and typesetting of the registration statement, prospectuses
(including preliminary prospectuses), the indenture and other documents relating
to the Trust, printing of Certificates, Securities
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and Exchange Commission and state blue sky registration fees, the costs of the
initial valuation of the portfolio and audit of the Trust, the initial fees and
expenses of the Trustee, and legal and other out-of-pocket expenses related
thereto, but not including the expenses incurred in the printing of preliminary
prospectuses and prospectuses, expenses incurred in the preparation and printing
of brochures and other advertising materials and any other selling expenses, to
the extent not borne by the Depositor, shall be borne by the Trust. To the
extent the funds in the Interest and Principal Accounts of the Trust shall be
insufficient to pay the expenses borne by the Trust specified in this Section
3.01, the Trustee shall advance out of its own funds and cause to be deposited
and credited to the Interest Account such amount as may be required to permit
payment of such expenses. The Trustee shall be reimbursed for such advance on
each Record Date (or such earlier date on which the expenses have been fully
accrued) from funds on hand in the Interest Account or, to the extent funds are
not available in such Account, from the Principal Account, in the amount deemed
to have accrued as of such Record Date as provided in the following sentence
(less prior payments on account of such advances, if any), and the provisions
of Section 5.04 with respect to the reimbursement of disbursements for Trust
expenses, including, without limitation, the lien in favor of the Trustee
therefor and the authority to sell Securities as needed to fund such
reimbursement, shall apply to the payment of expenses and the amounts advanced
pursuant to this Section. For the purposes of the preceding sentence and the
addition provided in clause (4) of the second sentence of Section 4.01, the
expenses borne by the Trust pursuant to this Section shall be deemed to have
been paid on the date of the Trust Agreement and to accrue at a daily rate over
the time period specified for their amortization provided in the Prospectus;
provided, however, that nothing herein shall be deemed to prevent, and the
Trustee shall be entitled to, full reimbursement for any advances made pursuant
to this Section no later than the termination of the Trust. For purposes of
calculating the accrual of organizational expenses under this Section 3.01, the
Trustee shall rely on the written estimates of such expenses provided by the
Depositor pursuant to Section 4.01.
SECTION 3.02. INTEREST ACCOUNT: The Trustee shall collect the interest on
the Securities in each Trust as such becomes payable (including all interest
accrued but unpaid prior to the date of deposit of the Securities in trust and
including that part of the proceeds of the sale, liquidation, redemption or
maturity of any Securities or insurance thereon which represents accrued
interest thereon but not accrued original issue discount, if any) and credit
such interest to a separate account for each Trust to be known as the "Interest
Account". For purposes of this Indenture, interest to be credited to the
Interest Account shall not be deemed to include original issue discount accrued
or paid or any amounts accrued or paid in respect of Stripped Obligations.
SECTION 3.03. PRINCIPAL ACCOUNT: (a) The Securities in each Trust and all
moneys (except moneys held by the Trustee pursuant to subsection (b) hereof)
other than amounts credited to the Interest Account, received by the Trustee in
respect of the Securities in each Trust, including insurance thereon, shall be
credited to a separate account for each Trust to be known as the "Principal
Account."
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(b) Moneys and/or irrevocable letters of credit required to purchase
Contract Securities or to purchase Securities pursuant to the Depositor's
written instructions, or deposited to secure such purchases, are hereby declared
to be held specially by the Trustee for such purchases and shall not be deemed
to be part of the Principal Account until (i) the Depositor fails to timely
purchase a Contract Security and has not given the Failed Contract Notice (as
defined in Section 3.14) at which time the moneys and/or letters of credit
attributable to the Contract Security not purchased by the Depositor shall be
credited to the Principal Account; or (ii) the Depositor has given the Trustee
the Failed Contract Notice at which time the moneys and/or letters of credit
attributable to failed contracts referred to in such Notice shall be credited to
the Principal Account; PROVIDED, HOWEVER, that if the Depositor also notifies
the Trustee in the Failed Contract Notice that it has purchased or entered into
a contract to purchase a New Security (as defined in Section 3.14), the Trustee
shall not credit such moneys and/or letters of credit to the Principal Account
unless the New Security shall also have failed or is not delivered by the
Depositor within two business days after the settlement date of such New
Security, in which event the Trustee shall forthwith credit such moneys and/or
letters of credit to the Principal Account. The Trustee shall in any case
forthwith credit to the Principal Account, to the extent of moneys, or moneys
then available under any letter of credit, deposited by the Depositor, and/or
cause the Depositor to deposit in the Principal Account, the difference, if any,
between the purchase price of the failed Contract Security and the purchase
price of the New Security, together with any sales charge and accrued interest
applicable to such difference (or applicable to the failed Contract Security if
no New Security is deposited) and distribute such moneys to Unitholders pursuant
to Section 3.05.
The Trustee shall give prompt written notice to the Depositor and the
Evaluator of all amounts credited to or withdrawn from the Principal Account and
the balance in such Account after giving effect to such credit or withdrawal.
SECTION 3.04. RESERVE ACCOUNT: From time to time the Trustee shall
withdraw from the cash on deposit in the Interest Account or the Principal
Account of the appropriate Trust 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 such Trust. Such amounts so
withdrawn shall be credited to a separate account for each Trust which shall be
known as the "Reserve Account." The Trustee shall not be required to distribute
to the Unitholders any of the amounts in the Reserve Account; PROVIDED, HOWEVER,
that if it shall, in its sole discretion, determine that such amounts are no
longer necessary for payment of any applicable taxes or other governmental
charges, then it shall promptly deposit such amounts in the appropriate account.
SECTION 3.05. DISTRIBUTIONS: Unless otherwise provided in the Prospectus,
the Trustee, as of the Settlement Date set forth in the Prospectus, shall
advance from its own funds and shall pay to the Depositor, as the sole
Unitholder of record on the date of the Trust Agreement, the amount of interest
accrued on the Securities as of the date of the Trust Agreement. The Trustee
shall be entitled to reimbursement, without interest, for such advancement from
interest received by the respective Trusts before any further distributions
shall be made from the Interest Account to Unitholders of the respective Trusts.
The second
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distribution of funds from the Interest Account of the respective Trusts shall
be in the amount as set forth for each Trust under each plan of distribution in
the Prospectus and shall be made on the date as indicated in the Prospectus
(sometimes referred to herein as the First General Record Date) to or upon the
order of all Unitholders of record of the respective Trusts as of the dates as
indicated in the Prospectus. For all subsequent distributions to Unitholders of
any Trust, the "RECORD DATE" is hereby fixed to be those dates set forth in the
Prospectus for each Trust.
As of the first day of each month of each year commencing with the first
Record Date for each Trust indicated in the Prospectus, the Trustee shall with
respect to each Trust:
(a) deduct from the Interest Account or, to the extent funds are
not available in such Account, from the Principal Account and pay to
itself individually the amounts that it is at the time entitled to
receive pursuant to Sections 3.01 and 5.04;
(b) deduct from the Interest Account, or, to the extent funds are
not available in such Account, from the Principal Account and pay to the
Depositor the amount that it is at the time entitled to receive pursuant
to Section 4.05; and
(c) deduct from the Interest Account, or, to the extent funds are
not available in such Account, from the Principal Account and pay to
counsel, as hereinafter provided for, an amount equal to unpaid fees and
expenses, if any, of such counsel as certified to by the Depositor.
On or shortly after the 15th day of the months in which a semi-annual
distribution is to be made as set forth in the Prospectus (the "Semi-Annual
Distribution Date") commencing on the date for each Trust indicated in the
Prospectus, the Trustee shall, with respect to any Trust, distribute by mail to
or upon the order of each Unitholder of record of such Trust as of the close of
business on the preceding Record Date at the post office address appearing on
the registration books of the Trustee such Unitholder's pro rata share of the
balance of the Interest Account of such Trust calculated as of the Record Date
for such semi-annual payment on the basis of one-half of the estimated annual
interest income to such Trust for the ensuing twelve months, after deduction of
the estimated costs and expenses of such Trust to be incurred during the twelve
month period for which the interest income has been estimated provided, however,
that the first such semi-annual distribution may be a partial distribution
reflecting the number of months since the preceding distribution.
In the event the amount on deposit in the Interest Account of any Trust on
a Semi-Annual Distribution Date is not sufficient for the payment of the amount
of interest to be distributed on the basis of the aforesaid computation, the
Trustee shall advance out of its own funds and cause to be deposited in and
credited to such Interest Account such amount as may be required to permit
payment of the semi-annual interest distribution to be made on such Semi-Annual
Distribution Date and shall be entitled to be reimbursed, without interest, out
of interest received by such Trust subsequent to the date of such advance and
subject to the condition that any such reimbursement shall be made only under
conditions which will not reduce the funds in or available for the Interest
Account to an amount less than required for
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the next ensuing distribution of interest. The Trustee's fee takes into account
the costs attributable to the outlay of capital needed to make such advances.
In lieu of the semi-annual distributions of interest provided above, a
Unitholder of any Trust may elect to receive payments from the Interest Account
of such Trust monthly or quarterly. The second distributions hereinbefore
PROVIDED, HOWEVER, shall be made to or upon the order of all holders of Units of
such Trust who have chosen to receive subsequent distributions on a different
basis.
Unitholders of any Trust desiring to receive monthly or quarterly
distributions and who purchase their units prior to the Record Date for the
second distribution may elect at the time of purchase to receive distributions
on a monthly or quarterly basis by notice to the Trustee. Unitholders must
furnish written notice to the Trustee indicating their desire to receive monthly
or quarterly distributions. The Trustee, within five business days of receiving
such notice, shall issue to the Book Entry Unitholder a new Book Entry Position
Confirmation indicating such Unitholder's preferred distribution plan. Such
notice shall be effective with respect to subsequent distributions until changed
by further notice to the Trustee. Those wishing to change their plan of
distribution must do so by sending written notice at any time to the Trustee;
Certificated Unitholders must also send to the Trustee the Certificate to which
the requested change relates. Changes may be made only as herein provided and
will become effective as of the following May 2 if received by May 1 of such
year, or as of November 2 if received by November 1 of such year and such
distributions will continue unit further notice.
For monthly distributions the share of the balance in the Interest Account
to be distributed to a Unitholder of any Trust who has elected to receive
monthly distributions, after the second distribution, shall be computed as of
the first day of each month commencing with the first such day subsequent to the
date of the certificate or to the date of the recording of the Book Entry
Position on the books of the Trustee and distribution made as provided herein on
or shortly after the 15th day of the month of computation to the Unitholder of
record on such date of computation. Such computation shall be made on the basis
of one-twelfth of the estimated annual interest income to the related Trust for
the ensuing twelve months for the account of Unitholders of any Trust who have
elected to receive monthly distributions, after deduction of the estimated costs
and expenses to be incurred on behalf of such Unitholders during the twelve
month period for which such interest income has been estimated.
For quarterly distributions the share of the balance in the Interest
Account to be distributed to a Unitholder of any Trust who has elected to
receive quarterly distributions, after the second distribution, shall be
computed as of the first day of each month as set forth in the Prospectus,
commencing with the first such day subsequent to the date of the Certificate or
to the date of the recording of the Book Entry Position on the books of the
Trustee and distribution made as provided herein on or shortly after the 15th
day of the month of computation to the Unitholder of record on such date of
computation. Such computation shall be made on the basis of one-fourth of the
estimated annual interest income to the related Trust for the ensuing twelve
months for the account of Unitholders of any
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Trust who have elected to receive quarterly distributions, after deduction of
the estimated costs and expenses to be incurred on behalf of such Unitholders
during the twelve month period for which such interest income has been estimated
provided, however, that the first such quarterly distribution may be a partial
distribution reflecting the number of months since the preceding distribution.
To the extent practicable, the Trustee shall allocate the expenses of each
Trust among Units of such Trust, giving effect within any Trust to differences
in administrative and operational cost among those who have chosen to receive
distributions monthly, quarterly or semi-annually.
If the Trustee determines that an event has occurred as a result of which
there has resulted an excessive distribution from the Interest Account, it shall
reduce subsequent distributions so as to reconcile, as promptly as practicable,
the aggregate net income and distributions from such Account.
In the event the amount on deposit in the Interest Account of a Trust for a
monthly or quarterly distribution is not sufficient for the payment of the
amount of interest to be distributed to Unitholders participating in such
distributions on the basis of the aforesaid computations, the Trustee shall
advance its own funds and cause to be deposited in and credited to such Interest
Account such amounts as may be required to permit payment of the monthly or
quarterly interest distribution to be made as aforesaid and shall be entitled to
be reimbursed, without interest, out of interest received by such Trust
subsequent to the date of such advance and subject to the condition that any
such reimbursement shall be made only under conditions which will not reduce the
funds in or available for such Interest Account to an amount less than required
for tje next ensuing distribution of interest. The Trustee's fee takes into
account the costs attributable to the outlay of capital needed to make such
advances. Distributions to Unitholders of any Trust who are participating in
one of the optional plans for distribution of interest shall not be affected
because of advancements by the Trustee for the purpose of equalizing
distributions to Unitholders of any Trust participating in a different plan.
Distributions of amounts represented by the cash balance in the Principal
Account for each Trust shall be computed as of the dates as indicated in the
Prospectus. On the fifteenth day of each month in which such computation is
made, or within a reasonable period of time thereafter, the Trustee shall
distribute by mail to each Unitholder of record at the close of business on the
date of computation (the Record Date) at his post office address such holder's
pro rata share of the cash balance of such Principal Account as thus computed.
The Trustee shall not be required to make a distribution from such Principal
Account unless the cash balance on deposit therein available for distribution
shall be sufficient to distribute at least 10 cents per Unit.
If the Depositor (i) fails to replace any failed Special Security (as
defined in Section 3.14), or (ii) is unable or fails to enter into any contract
for the purchase of any New Security in accordance with Section 3.14, the
Depositor shall pay to the Trustee and the Trustee shall distribute, to the
extent of the monies credited to the Principal Account
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pursuant to Section 3.03(b) or supplied by the Depositor pursuant to this
Section, to all Unitholders of Units in the respective Trust the principal and
accrued interest (at the coupon rate of the relevant Security to the date the
Depositor is notified of the failure) and sales charge attributable to such
Special Securities at the next Distribution Date which is more than thirty days
after the expiration of the Purchase Period (as defined in Section 3.14) or at
such earlier time or in such manner as the Trustee in its sole discretion deems
to be in the best interest of the Unitholders.
If any contract for a New Security in replacement of a Special Security
shall fail, the Depositor shall pay to the Trustee and the Trustee shall
distribute to the extent of the monies credited to the Principal Account
pursuant to Section 3.03(b) or supplied by the Depositor pursuant to this
Section, the principal and accrued interest (at the coupon rate of the relevant
Special Security to the date the Depositor is notified of the failure) and sales
charge attributable to the Special Security to the Unitholders of Units in the
respective Trust at the next Distribution Date which is more than thirty days
after the date on which the contract in respect of such New Security failed or
at such earlier time or in such earlier manner as the Trustee in its sole
discretion determines to be in the best interest of the Unitholders.
If, at the end of the Purchase Period, less than all moneys attributable to
a failed Special Security have been applied or allocated by the Trustee pursuant
to a contract to purchase New Securities, the Trustee shall distribute the
remaining moneys to Unitholders of Units in the respective Trust at the next
Distribution Date which is more than thirty days after the end of the Purchase
Period or at such earlier time thereafter as the Trustee in its sole discretion
deems to be in the best interest of the Unitholders.
The amounts to be so distributed to each Unitholder of a Trust shall be
that PRO RATA share of the balance of the Interest and Principal Accounts of
such Trust, computed as set forth above, as shall be represented by the Units
registered on the books of the Trustee in the name of such Unitholder.
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 Interest Account or the Principal Account of a Trust
shall be held in the same manner as other amounts subsequently deposited in each
of such Accounts, respectively.
For the purpose of distribution as herein provided, the holders of record
on the registration books of the Trustee at the close of business on each Record
Date shall be conclusively entitled to such distribution, and no liability shall
attach to the Trustee by reason of payment to any such registered Unitholder of
record. Nothing herein shall be construed to prevent the payment of amounts
from the Interest Account and the Principal Account of a Trust to individual
Unitholders 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 from the
Interest or Principal Accounts of a Trust the Trustee shall set forth, either in
the instrument by means
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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 of such Trust except that such information need not be furnished to a
Unitholder who has waived receipt thereof in writing.; In the event that the
issuer or insurer of any of the Securities in a Trust shall fail to make payment
when due of any interest or principal and such failure results in a change in
the amount which would otherwise be distributed as a monthly distribution, the
Trustee shall, with the first distribution relating to such Trust following such
failure, set forth in an accompanying statement (a) the name of the issuer and
the Security, (b) the amount of the reduction in the distribution per unit
resulting from such failure, (c) the percentage of the aggregate principal
amount of Securities which such Security represents and (d) to the extent then
determined, information regarding any disposition or legal action with respect
to such Security.
Within a reasonable period of time after the last business day of each
calendar year, the Trustee shall furnish to each person who at any time during
such calendar year was a Unitholder of a Trust a statement setting forth, with
respect to such calendar year and with respect to such Trust:
(A) as to the Interest Account:
(1) the amount of interest received on the Securities (including
amounts representing interest received upon any disposition of
Securities, penalties for failure to make timely payments on
Securities or liquidated damages for default on breach of any
condition or term of the Securities),
(2) the amounts paid for purchases of New Securities pursuant to
Section 3.14 and for redemptions pursuant to Section 4.02,
(3) the deductions for applicable taxes and fees and expenses of
the Trustee, the Depositor and counsel, and
(4) the balance remaining after such distributions and
deductions, expressed both as a total dollar amount and as a dollar
amount per Unit outstanding on the last business day of such calendar
year;
(B) as to the Principal Account:
(1) payments of principal on Securities, if any,
(2) the dates of the sale, maturity, liquidation or redemption
of any of the Securities and the net proceeds received therefrom
excluding any portion thereof credited to the Interest Account,
(3) the amount paid for purchases of New Securities, Replacement
Securities or Reinvestment Securities pursuant to Section 3.14 and for
redemptions pursuant to Section 4.02,
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(4) the deductions for payment of applicable taxes and fees and
expenses of the Trustee and bond counsel, 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; and
(C) the following information:
(1) a list of the Securities as of the last business day of such
calendar year,
(2) the number of Units outstanding on the last business day of
such calendar year,
(3) the Unit Value based on the last evaluation of such Trust
made during such calendar year,
(4) the amounts actually distributed during such calendar year
from the Interest and Principal Accounts, separately stated, expressed
both as total dollar amounts and as dollar amounts per Unit
outstanding on the Record Dates for such distributions, and
(5) such other information as the Trustee may deem appropriate.
SECTION 3.07. SALE OF SECURITIES: If necessary, in order to maintain the
sound investment character of a Trust, the Depositor may direct the Trustee to
sell or liquidate Securities in such Trust at such price and time and in such
manner as shall be determined by the Depositor, provided that the Depositor has
determined that any one or more of the following conditions exist:
(a) that there has been a default on such Securities in the payment
of principal or interest, or both, when due and payable;
(b) that any action or proceeding has been instituted in law or
equity seeking to restrain or enjoin the payment of principal or interest
on any such Securities, or that there exists any other legal question or
impediment affecting such Securities or the payment of debt service on
the same;
(c) that there has occurred any breach of covenant or warranty in any
resolution, ordinance, trust indenture or other document, which would
adversely affect either immediately or contingently the payment of debt
service on such Securities, or their general credit standing, or otherwise
impair the sound investment character of such Securities;
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(d) that there has been a default in the payment of principal of or
interest on any other outstanding obligations of an issuer of such
Securities;
(e) that, in the case of Trusts containing Treasury Obligations, there
has been a default in payment of interest or principal of other obligations
guaranteed or backed by the full faith and credit of the United States of
America;
(f) that the price of any such Securities has declined to such an
extent, or such other market or credit factor exists, so that in the
opinion of the Depositor the retention of such Securities would be
detrimental to such Trust and to the interest of the Unitholders thereof;
(g) that such Securities are the subject of an advanced refunding.
For the purposes of this Section 3.07(g), "an advanced refunding" shall
mean when refunding bonds are issued and the proceeds thereof are
deposited in irrevocable trust to retire the Bonds on or before their
redemption date;
(h) that as of any Record Date any of the Securities are scheduled
to be redeemed and paid prior to the next succeeding Distribution Date;
PROVIDED, HOWEVER, that as the result of such redemption the Trustee will
receive funds in an amount sufficient to enable the Trustee to include in
the distribution from the Principal Account on such next succeeding
Distribution Date at least $.50 per Unit.
The Depositor shall also consider whether any insurance that may be
applicable to the Bonds cannot be relied upon to provide the principal and
interest protections intended to be afforded by such insurance.
Upon receipt of such direction from the Depositor, upon which the Trustee
shall rely, the Trustee shall proceed to sell or liquidate the specified
Securities in accordance with such direction; PROVIDED, HOWEVER, that the
Trustee shall not sell or liquidate any Securities upon receipt of a direction
from the Depositor that it has determined that the conditions in subdivision (h)
above exist, unless the Trustee shall receive on account of such sale or
liquidation the full principal amount of such Securities, plus the premium, if
any, and the interest accrued and to accrue thereon to the date of the
redemption of such Securities. 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 or liquidate any Securities under this Section 3.07 except to the
extent otherwise required by Section 3.10 of this Indenture.
SECTION 3.08. REFUNDING SECURITIES: In the event that an offer shall be
made by an obligor of any of the Securities in a Trust to issue new
obligations in exchange and substitution for any issue of Securities pursuant
to a plan for the refunding or refinancing of such Securities, the Depositor
shall instruct the Trustee in writing to reject such offer and either to hold
or sell such Securities, except that if (1) the issuer is in default with
respect to such Securities or (2) in the opinion of the Depositor, given in
writing to the Trustee, the
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issuer will probably default with respect to such Securities in the reasonably
foreseeable future, the Depositor shall instruct the Trustee in writing to
accept or reject such offer or take any other action with respect thereto as the
Depositor may deem proper. Any obligation so received in exchange shall either
be sold as provided in Section 3.07 or deposited hereunder and shall be subject
to the terms and conditions of this Indenture to the same extent as the
Securities originally deposited hereunder. Within five days after such deposit,
notice of such exchange and deposit shall be given by the Trustee to each
Unitholder of such Trust, including an identification of the Securities
eliminated and the bonds substituted therefor.
SECTION 3.09. COUNSEL: The Depositor may employ from time to time as it
may deem necessary a firm of attorneys for any legal services that may be
required in connection with the disposition of underlying securities pursuant to
Section 3.07 or the substitution of any securities for underlying bonds as the
result of any refunding permitted under Section 3.08. The fees and expenses of
such counsel shall be paid by the Trustee from the Interest and Principal
Accounts of the applicable Trust as provided for in Section 3.05(c) hereof.
SECTION 3.10. NOTICE AND SALE BY TRUSTEE: If at any time the principal of
or interest on any of the Securities shall be in default and not paid or
provision for payment thereof shall not have been duly made, either pursuant to
any Insurance thereon or otherwise, the Trustee shall notify the Depositor
thereof. If within thirty days after such notification the Depositor has not
given any instruction to sell or to hold or has not taken any other action in
connection with such Securities, the Trustee shall sell such Securities
forthwith, and the Trustee shall not be liable or responsible in any way for
depreciation or loss incurred by reason of such sale.
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 and Principal Accounts of any Trust by reason of any
premium or discount in respect of any of the Securities.
SECTION 3.12. LIABILITY OF DEPOSITOR: The Depositor shall be under no
liability to the Unitholders for any action taken or for refraining from the
taking of any action in good faith pursuant to this Indenture or for errors in
judgment, but shall be liable only for its own negligence, lack of good faith or
willful misconduct. The Depositor may rely in good faith on any paper, order,
notice, list, affidavit, receipt, opinion, endorsement, assignment, draft or any
other document of any kind prima facie properly executed and submitted to it by
the Trustee, counsel, or any other persons pursuant to this Indenture and in
furtherance of its duties.
SECTION 3.13. 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 (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
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thereupon take such action or refrain from taking any action as the Depositor
shall in writing direct; PROVIDED, HOWEVER, that if the Depositor shall not
within five business days of the giving of such notice to the Depositor direct
the Trustee to take or refrain from taking any action, the Trustee shall take
such action as it, in its sole discretion, shall deem advisable. Neither the
Depositor nor the Trustee shall be liable to any person for any action or
failure to take action with respect to this Section 3.13.
SECTION 3.14. LIMITED REPLACEMENT OF SPECIAL SECURITIES; REPLACEMENT
SECURITIES. (a) If any contract in respect of Contract Securities in a Trust
other than a contract to purchase a New Security (as defined below), including
those purchased on a "when, as and if issued" basis, shall have failed due to
any occurrence, act or event beyond the control of the Depositor or the Trustee
(such failed Contract Securities being herein called the "SPECIAL SECURITIES"),
the Depositor shall notify the Trustee (such notice being herein called the
"FAILED CONTRACT NOTICE") of its inability to deliver the failed Special
Security to the Trustee after it is notified that the Special Security will not
be delivered by the seller thereof to the Depositor. Prior to, or
simultaneously with, giving the Trustee the Failed Contract Notice, or within a
maximum of twenty days after giving such Notice (such twenty-day period being
herein called the "PURCHASE PERIOD"), the Depositor shall, if possible, purchase
or enter into the contract, if any, to purchase an obligation to be held as a
Security hereunder (herein called the "NEW SECURITY") as part of the Fund in
replacement of the failed Special Security, subject to the satisfaction of all
of the following conditions in the case of each purchase or contract to
purchase:
(1) The New Securities (i) shall have a fixed maturity date
(whether or not entitled to the benefits of any sinking, redemption,
purchase of similar fund) substantially similar to, but not exceeding the
date of maturity of the Special Securities they replace, (ii) must be
purchased at a price that results in a current return as of the Initial
Date of Deposit at least equal to that of the Special Securities they
replace, (iii) must be purchased at a price that results in a yield to
maturity as of the Initial Date of Deposit of the Trust at least equal to
that of the Special Securities they replace, (iv) shall be payable as to
principal and interest in United States currency, (v) shall not be "when,
as and if issued" Securities, and (vi) shall be issued after July 18,
1984.
(2) Each New Security shall be rated at least "BBB" or better in
the case of the Insured Trusts and "A" or better in the case of other
Trusts by Standard & Poor's Ratings Services or "Baa" or better in the
case of the Insured Trusts and "A" or better in the case of other Trusts
by Xxxxx'x Investors Service, Inc., or comparably rated by any other
nationally recognized credit rating service rating debt obligations which
shall be designated by the Depositor and shall be satisfactory to the
Trustee.
(3) The principal amount of the New Securities (exclusive of
accrued interest) shall not exceed the principal attributable to the
Special Securities.
(4) With respect to the Insured Trusts, each New Security shall be
acceptable to the Insurer to be included under the respective Trust's
Insurance and will be so included upon acquisition by the Trust or, in
the case of a Trust in which all Securities
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are not insured by a portfolio insurance policy but are Pre-Insured
Securities, shall be a Pre-Insured Security.
(5) The Depositor shall promptly furnish a notice to the Trustee
(which may be part of the Failed Contract Notice) in respect of the New
Securities purchased or to be purchased that shall (i) identify the New
Securities, (ii) state that the contract to purchase, if any, entered
into by the Depositor is satisfactory in form and substance, and (iii)
state that the foregoing conditions of clauses (1) through (4) have been
satisfied with respect to the New Securities.
Upon satisfaction of the foregoing conditions with respect to any New
Security, the Depositor shall pay the purchase price for the New Security from
its own resources or, if the Trustee has credited any moneys and/or letters of
credit attributable to the failed Special Security to the Principal Account of
such Trust, the Trustee shall pay the purchase price of the New Security upon
directions from the Depositor from the moneys and/or letters of credit so
credited to the Principal Account. If the Depositor has paid the purchase price
and, in addition, the Trustee has credited moneys of the Depositor to the
Principal Account of such Trust, the Trustee shall forthwith return to the
Depositor the portion of such moneys that is not properly distributable to
Unitholders pursuant to Section 3.05.
Whenever a New Security is acquired by the Depositor pursuant to the
provisions of this Section 3.14, the Trustee shall, within five days thereafter,
mail to all holders of Units of the respective Trust notice of such acquisition,
including an identification of the failed Special Security and the New Security
acquired. The Trustee shall not be liable or responsible in any way for
depreciation or loss incurred by reason of any purchase made pursuant to any
direction of the Depositor provided in this Section 3.14, and in the absence of
such direction the Trustee shall have no duty to make any purchase. The
Depositor shall not be liable for errors of judgment in respect of this Section
3.14; PROVIDED, HOWEVER, that this provision shall not protect the Depositor
against any liability to which it would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of its reckless disregard of its obligations and duties
hereunder. Notwithstanding anything to the contrary in this Section 3.14, no
substitution of New Securities will be made unless the Depositor has received an
opinion of counsel that such substitution will not adversely affect the federal,
state or local income tax status of the Trust, if the principal amount of such
New Securities when added to all previously purchased New Securities in the
Trust exceeds 15% of the principal amount of Securities initially deposited in
the Trust.
(b) The Trustee shall not be liable or responsible in any way for
depreciation or loss incurred by reason of any purchase made pursuant to any
direction of the Depositor provided in this Section 3.14, and in the absence of
such direction the Trustee shall have no duty to make any purchase. The
Depositor shall not be liable for errors of judgment in respect of this Section
3.14; provided, however, that this provision shall not protect the Depositor
against any liability to which it would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of its reckless disregard of its obligations and duties
hereunder.
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Article IV
EVALUATION, REDEMPTION, PURCHASE, TRANSFER OR
INTERCHANGE OF UNITS AND REPLACEMENT OF CERTIFICATES
SECTION 4.01. EVALUATION: The Trustee shall make an evaluation of each
Trust as of that time set forth in the Prospectus (the "EVALUATION TIME"), (i)
on the last business day of each of the months of June and December, (ii) on the
day on which any Unit of a respective 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 respective Trust (other than cash declared held in trust to cover
contracts to purchase securities) or moneys in the process of being collected
from matured interest coupons or securities matured or called for redemption
prior to maturity, (2) the value of each issue of the Securities in the Trust,
(3) interest accrued thereon not subject to collection and distribution and (4)
amounts representing organizational expenses paid less accrued organizational
expenses of a Trust. In making the evaluations the Trustee 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 prices of such Securities as obtained from investment dealers or brokers
(including the Depositor) who customarily deal in bonds comparable to those held
by the Trust, or (ii) if bid prices are not available for any of such
Securities, on the basis of bid prices for comparable securities, or (iii) by
causing the value of the Securities in the Trust to be determined by others
engaged in the practice of evaluating, quoting or appraising securities. 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 of such Trust, (ii) amounts
representing accrued expenses of the Trust including but not limited to unpaid
fees and expenses of the Trustee, the Depositor and counsel, in each case as
reported by the Trustee to the Depositor on or prior to the date of evaluation,
and (iii) cash held for distribution to Unitholders of such Trust of record, and
required for redemption of Units tendered, as of a date prior to the evaluation
then being made. The value of the pro rata share of each Unit of such Trust
determined on the basis of any such evaluation shall be referred to herein as
the "Unit Value." Until the Depositor has informed the Trustee that there will
be no further deposits of Additional Securities pursuant to Section 2.01(b), the
Depositor shall provide the Trustee with written estimates of (i) the total
organizational expenses to be borne by the Trust pursuant to Section 3.01, (ii)
the total number of Units to be issued in connection with the initial deposit
and all anticipated deposits of additional Securities and (iii) the period or
periods over which such expenses are to be amortized and the aggregate amount of
expense to be amortized during each such period. For purposes of calculating
the Trust Evaluation and Unit Value, the Trustee shall treat all such
anticipated expenses as having been paid and all liabilities therefor as having
been incurred, and all Units as having been issued, in each case on the date of
the Trust Agreement, and, in connection with each such calculation, shall take
into account a pro rata portion of such expense and liability based on the
actual number of Units issued as of the date of such calculation. In the event
the Trustee is informed by the Depositor of a revision in its estimate of total
expenses or total Units or period of amortization and upon the conclusion of the
deposit of additional Securities, the Trustee shall base calculations made
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thereafter on such revised estimates or actual expenses or period of
amortization, respectively, but such adjustment shall not affect calculations
made prior thereto and no adjustment shall be made in respect thereof.
The Depositor shall make an evaluation of each Trust as of the Evaluation
Time (i) on the last business day of each of the months of June and December,
(ii) on the day in which any Unit of such Trust is tendered for redemption, and
(iii) on any other day such an evaluation is desired by the Trustee or is deemed
necessary by the Depositor. Such evaluation shall be made on the same basis as
set forth in the preceding paragraph. The Trustee, in lieu of making the
evaluation provided in the preceding paragraph, may use the evaluation made by
the Depositor for all purposes of this Indenture, except as provided in the
following paragraph, and shall not be liable or responsible, under any
circumstances whatever, for its election to use the Depositor's evaluation or
for the accuracy or correctness thereof or for any error or omission therein.
The Trustee shall also cause an evaluation of the Securities deposited in
each Trust to be made as of the Evaluation Time on the day preceding the day on
which said Securities are deposited under this Indenture by X.X. Xxxxx Co.,
Inc., or such other evaluator as shall be specified by the Depositor. Such
evaluation shall be made on the same basis as set forth in the second preceding
paragraph except that it shall be based upon offering prices of said Securities.
The determination of the offering price of the Securities so made shall be
included in the Schedule attached to the Trust Agreement. The Trustee shall not
be liable or responsible, under any circumstances whatever, for the accuracy or
correctness of such evaluation or for the selection of the evaluator making the
same.
SECTION 4.02. REDEMPTIONS BY TRUSTEE; PURCHASES BY DEPOSITOR: A
Certificated Unitholder may redeem his Units by sending a written redemption
request and tendering his Certificate to the Trustee at the Trustee's unit
investment trust office. Any individual Book Entry Unitholder redeeming 1,000
Units or less may do so by telephone upon completion and submission to the
Trustee of a Telephone Redemption Authorization Form prior to the date of
redemption (the "ELIGIBLE BOOK ENTRY UNITHOLDERS"). All other Book Entry
Unitholders must make their redemption request in writing to the Trustee at the
Trustee's Office, and may do so by (i) completing the form on the reverse side
of their Book Entry Position Confirmation or (ii) sending a written redemption
request which includes (a) the tax identification number for the account, (b)
the name and address of the redeeming Unitholder, (c) a complete description of
the Units to be redeemed with the Trust number and payment option, (d) the
number of Units to be redeemed, (e) a notation that the Units are in Book Entry
form and (f) the number of Units remaining, if the redemption is a partial
redemption. Any proper request for redemption made in one of the manners
provided for above shall be effected by the Trustee on the third business day
following the day on which such request for redemption is made (being herein
called the "REDEMPTION DATE"). Subject to payment by any redeeming Unitholder
of any tax or other governmental charges which may be imposed thereon, such
redemption is to be made by payment on the Redemption Date of cash equivalent to
the Unit Value, determined by the Trustee as of the Evaluation Time set forth in
the Prospectus, on the date of tender, multiplied by the number of Units owned
by the Unitholder plus a sum equivalent to the amount of accrued interest which
would have
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been payable on such Units to, but not including, the third business day
following the date of tender (herein called the "REDEMPTION PRICE"). Unit
redemption requests received by telephone or in writing by the Trustee on any
day after the Evaluation Time set forth in the Prospectus will be treated by the
Trustee as received on the next day on which the New York Stock Exchange is open
for trading and will be deemed to have been received 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 a Trust or postpone the
date of payment of the Redemption Price therefor for more than three business
days following the day on which a proper request for redemption is made in the
manner provided for in this Section 4.02 (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
such Trust of the Securities is not reasonably practicable or it is not
reasonably practicable fairly to determine in accordance herewith the value of
the Securities; or (3) for such other period as the Securities and Exchange
Commission may by order permit, and shall not be liable to any person or in any
way for any loss or damage which may result from any such suspension or
postponement.
Not later than the close of business on the day a proper request for
redemption in the manner provided for in this Section 4.02 by a Unitholder other
than the Depositor is received, the Trustee shall notify the Depositor of such
request. The Depositor shall have the right to purchase such Units 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 day on
which the request for redemption of such Units was received. Such purchase
shall be made by payment for such Units by the Depositor to the Unitholder not
later than the close of business on the Redemption Date of an amount equal to
the Redemption Price which would otherwise be payable by the Trustee to such
Unitholder.
Any Unit so purchased by the Depositor may at the option of the Depositor
be tendered to the Trustee for redemption at the Trustee's Office in the manner
provided in the first paragraph of this Section 4.02.
If the Depositor does not elect to purchase any Unit of a 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 interest shall
be withdrawn from the Interest Account of such Trust to the extent available.
The balance paid on any redemption, including accrued interest, if any, shall be
withdrawn from the Principal Account of such Trust to the extent that funds are
available for such purpose. If such available balance shall be insufficient the
Trustee shall sell such of the Securities held in such Trust currently
designated for such purposes by the Depositor as the Trustee in its sole
discretion shall deem necessary. Given the minimum principal amount in which
certain Securities may be required to be sold, the proceeds of such sales may
exceed the amount necessary for payment of Units redeemed. Such excess proceeds
shall be distributed pro rata to all remaining Unitholders of record of such
Trust Fund unless (i) the Trust has elected to be taxed as a
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Regulated Investment Company and (ii) the Depositor shall have notified the
Trustee no later than five Business Days prior to the next following Record Date
that such excess proceeds shall be reinvested as provided in Section 3.14;
however, the Trustee shall not be required to make a distribution from the
Principal Account of the Trust Fund unless the cash balance on deposit therein
available for distribution shall be sufficient to distribute at least the amount
set forth in the related Prospectus. In the event that funds are withdrawn from
such Principal Account for payment of accrued interest, such Principal Account
shall be reimbursed for such funds so withdrawn when sufficient funds are next
available in such Interest Account.
The Depositor shall maintain with the Trustee a current list of Securities
held in each Trust designated to be sold for the purpose of redemption of Units
of each Trust tendered for redemption and not purchased by the Depositor, and
for payment of expenses hereunder, provided that if the Depositor shall for any
reason fail to maintain such a list, the Trustee, in its sole discretion, may
designate a current list of Securities for such purposes. The net proceeds of
any sales of Securities from such list representing principal shall be credited
to the Principal Account of such Trust and the proceeds of such sales
representing accrued interest, if any, but not accrued original issue discount,
if any, shall be credited to the Interest Account of such Trust. The Depositor
shall also designate the Securities upon the sale of which the Trustee shall
obtain permanent insurance (the "Permanent Insurance") from an insurer, provided
that if the Depositor shall for any reason fail to make such designation, the
Trustee in its sole discretion shall make such designation if it deems such
designation to be in the best interest of Unitholders. The Trustee shall pay
out of the proceeds of the sale of the Securities which are covered by Permanent
Insurance any premium for such Permanent Insurance and the net proceeds after
such deduction shall be credited to the Interest and Principal Accounts, as
provided above.
Sales of Securities shall be made in such manner as the Trustee shall
determine will bring the best price obtainable for the Trust Fund, provided,
however, that sales shall be made in such manner, as the Trustee shall
determine, as will provide the Trustee with funds in an amount sufficient and at
the time necessary in order for it to pay the Redemption Price of Units tendered
for redemption, regardless of whether or not a better price could be obtained if
the Securities were sold without regard for the day on which the proceeds of
such sale would be received. The Trustee shall not be liable or responsible in
any way for depreciation or loss incurred by reason of any sale of Bonds made
pursuant to this Section 4.02.
Certificates evidencing Units and the amount recorded in the registration
books of the Trust representing Units held in uncertificated form redeemed
pursuant to this Section 4.02 shall be canceled by the Trustee and the Unit or
Units evidenced by such Certificates or evidenced by such records in the
registration books of the Trust for Units held in uncertificated form shall be
terminated by such redemptions.
When directed by the Depositor, the Trustee shall employ the Depositor as
its agent for the purpose of executing sales of Securities. The Depositor will
verify the Trustee's ownership of any Security prior to entering into a contract
for its sale. The Trustee shall
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have no liability for loss or depreciation resulting from the Depositor's
negligence or misconduct as such agent.
Notwithstanding the foregoing, the Trustee is hereby authorized in its
discretion, but without obligation, in the event that the Depositor does not
elect to purchase any Unit tendered to the Trustee for redemption, or in the
event that a Unit is being tendered by the Depositor for redemption, in lieu of
redeeming such Unit, to sell such Unit in the over-the-counter-market for the
account of the tendering Unitholder at a price which will return to the
Unitholder an amount in cash, net after deducting brokerage commissions,
transfer taxes and other charges, equal to or in excess of the Redemption Price
which such Unitholder would otherwise be entitled to receive on redemption
pursuant to this Section 4.02. The Trustee shall pay to the Unitholder the net
proceeds of any such sale no later than the day the Unitholder would otherwise
be entitled to receive payment of the Redemption Price hereunder.
SECTION 4.03. TRANSFER OR INTERCHANGE OF CERTIFICATES OR UNITS HELD IN
UNCERTIFICATED FORM. A Unit may be transferred by the registered holder thereof
by presentation and surrender of the Certificate or in the case of Units held in
uncertificated form, written transfer instructions in a form satisfactory to the
Trustee at the unit investment trust office of the Trustee, properly endorsed or
accompanied by a written instrument or instruments of transfer in form
satisfactory to the Trustee and executed by the Unitholder or his authorized
attorney, whereupon a new registered Certificate or Certificates or a new
notation in the registration books of the Trust for Units to be held in
uncertificated form for the same number of Units of the same Trust Fund 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
same Trust and all Certificates issued shall be issued in denominations of one
Unit or any multiple thereof as may be requested by the Unitholder. Unitholders
may exchange their Certificates for the same number of Units to be held in
uncertificated form as recorded in the registration books of the Trust. The
Trustee may deem and treat the person in whose name any Unit shall be registered
upon the books of the Trustee as the owner of such Unit 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 Unit shall be so registered.
Unitholders holding their Units in uncertificated form may at any time
request the Trustee to issue Certificates representing such Units. The Trustee
shall, upon receipt of such a request in a form satisfactory to it, issue
Certificates in denominations of one Unit or any multiple thereof as may be
requested by the Unitholders.
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
Unitholder to the Trustee. The Trustee may require a Unitholder to pay $2.00
for each new Certificate issued on any such transfer or interchange.
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All Units canceled pursuant to this Indenture shall be disposed of by the
Trustee without liability on its part.
SECTION 4.04. 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 or, at the Certificated
Unitholder's written request in a form satisfactory to the Trustee to thereafter
hold the Units in a Book Entry Position, enter an equivalent Book Entry Position
on the records of the Trustee pursuant to Section 4.03 in exchange and
substitution therefor upon the Unitholder's furnishing the Trustee with proper
identification and satisfactory indemnity, 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 or Book Entry Position shall be issued
or recorded in exchange and substitution therefor. Upon the issuance of any new
Certificate or recording of any Book Entry Position on the books of the Trustee
a sum sufficient to pay any tax or other governmental charge and the fees and
expenses of the Trustee may be imposed. Any such new Certificate issued or Book
Entry Position recorded on the books of the Trustee pursuant to this Section
shall constitute complete and indefeasible evidence of ownership of Units in the
related Trust, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time. In the event the related
Trust has terminated or is in the process of termination, the Trustee may,
instead of issuing a new Certificate or recording of a Book Entry Position in
exchange and substitution for any Certificate which shall have become mutilated
or shall have been destroyed, stolen or lost, make the distributions in respect
of such mutilated, destroyed, stolen or lost Certificate (without surrender
thereof except in the case of a mutilated Certificate) as provided in Section
7.02 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.
SECTION 4.05. COMPENSATION OF DEPOSITOR: For services performed under
this Indenture in evaluating and for maintaining surveillance over the
Securities in each Trust, the Depositor shall be paid that amount, if any, set
forth in the Prospectus. Such compensation shall be computed on the basis of
the greatest amount of such principal amount of Securities in each Trust at any
time during the period with respect to which such compensation is being computed
and may, from time to time, be adjusted provided that the total adjustment
upward does not, at the time of such adjustment, exceed the percentage of the
total increase, after the date hereof, in consumer prices for services as
measured by the United States Department of Labor Consumer Price Index entitled
"All Services Less Rent" or if such index no longer exists, a comparable index.
The consent or concurrence of any Unitholder hereunder shall not be required for
any such adjustment or increase. The Depositor shall in addition be compensated
for its costs incurred in providing such other services to the Trust as the
Trustee shall request. Such compensation shall be charged by the Trustee, upon
receipt of invoice therefor from the Depositor, against the Interest and
Principal Accounts of the respective Trusts on or before the Distribution Date
on which such period terminates. If the cash balances in the Interest and
Principal Accounts of any Trust shall be insufficient to provide for amounts
payable pursuant to this Section 4.05, the
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Trustee shall have the power to sell (i) Securities of such Trust from the
current list of Securities designated to be sold pursuant to Section 4.02
hereof, or (ii) if no such Securities have been so designated such Securities of
such Trust as the Trustee may see fit to sell in its own discretion, and to
apply the proceeds of any such sale in payment of the amounts payable pursuant
to this Section 4.05. Any moneys payable to the Depositor pursuant to this
Section 4.05 shall be secured by a prior lien on such Trust except that no such
lien shall be prior to any lien in favor of the Trustee under the provisions of
Section 5.04.
ARTICLE V
TRUSTEE
SECTION 5.01. GENERAL DEFINITION OF TRUSTEE'S LIABILITIES, RIGHTS AND
DUTIES: The Trustee shall in its discretion undertake such action as it may
deem necessary at any and all times to protect each Trust and the rights and
interests of the Unitholders 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 Interest and Principal
Accounts of such Trust and the payment of such costs and expenses shall be
secured by a prior lien on such Trust. In addition to and notwithstanding the
other duties, rights, privileges and liabilities of the Trustee as otherwise set
forth herein, the liabilities of the Trustee are further defined as follows:
(a) All moneys deposited with or received by the Trustee hereunder
related to a Trust shall be held by it without interest in trust as part of
such Trust or the Reserve Account of such Trust 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 preference 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 thereof in trust within the meaning of the Investment Company
Act of 1940.
(b) The Trustee shall be under no liability for any action taken in
good faith on any appraisal, paper, order, list, demand, request, consent,
affidavit, notice, opinion, direction, evaluation, endorsement, assignment,
resolution, draft or other document whether or not of the same kind prima
facie properly executed, or for the disposition of moneys, Bonds,
Certificates or Book Entry Positions 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 negligence, lack of good faith or willful misconduct,
provided that the Trustee shall not in any event be liable or responsible
for any evaluation made by the Depositor. The Trustee may construe any of
the provisions of this Indenture, insofar as the same may appear to be
ambiguous or inconsistent with any other provisions hereof, and any
construction of any such provisions hereof by the Trustee in good faith
shall be binding upon the parties hereto.
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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 for the form, character,
genuineness, sufficiency, value or validity of any Securities (except that
the Trustee shall be responsible for the exercise of due care in
determining the genuineness of Securities delivered to it pursuant to
contracts for the purchase of such Securities) or for or in respect of the
validity or sufficiency of any Certificates or of the due execution thereof
by the Depositor, or for the payment by the Insurer of amounts due under or
the performance by the Insurer of its obligations in accordance with the
Insurance, and the Trustee shall in no event assume or incur any liability,
duty, or obligation to any Unitholder or the Depositor other than as
expressly provided for herein. The Trustee shall not be responsible for or
in respect of the validity of any signature by or on behalf of the
Depositor.
(d) The Trustee shall not be under any obligation to appear in,
prosecute or defend any action, which in its opinion may involve it in
expense or liability, unless as often as 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 Interest and Principal Accounts of
the affected Trust or Trusts. 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 Unitholders 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 Interest 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 Unitholders.
(e) The Trustee may employ agents, attorneys, accountants and
auditors and shall not be answerable for the default or misconduct of any
such agents, attorneys, accountants or auditors if such agents,
attorneys, accountants or auditors shall have been selected with
reasonable care. 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 fees and
expenses charged by such agents, attorneys, accountants or auditors shall
constitute an expense of the Trustee reimbursable from the Interest and
Principal Accounts of the affected Trust as set forth in Section 5.04
hereof.
(f) If at any time the Depositor shall fail to undertake or perform
any of the duties which by the terms of this Indenture are required by it
to be undertaken or performed, or such Depositor shall become incapable of
acting or shall be adjudged a bankrupt or insolvent, or a receiver of such
Depositor or of its property shall be appointed, or any public officer
shall take charge or control of such Depositor or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation,
then in any such case, the Trustee may: (1) appoint a successor depositor
who shall act hereunder in all respects in place of such Depositor which
successor shall be satisfactory to the Trustee, and which may be
compensated at rates deemed by the Trustee to be reasonable under the
circumstances, by deduction ratably from the
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Interest Accounts of the affected Trusts or, to the extent funds are not
available in such Account, from the Principal Accounts of the affected
Trusts 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) terminate
and liquidate the affected Trust in the manner provided in Section 7.02.
(g) If (i) the value of any Trust as shown by any evaluation by the
Trustee pursuant to Section 4.01 hereof shall be less than twenty per cent
(20%) of the aggregate principal amount of Securities initially deposited
in such Trust, or (ii) by reason of the Depositor's redemption of Units of
a Trust not theretofore sold, the net worth of the Trust is reduced to less
than forty per cent (40%) of the aggregate principal amount of Securities
initially deposited therein, the Trustee may in its discretion, and shall
when so directed by the Depositor, terminate this Indenture and the trust
created hereby insofar as they related to such Trust and liquidate such
Trust, all in the manner provided in Section 7.02.
(h) In no event shall the Trustee be liable for any taxes or
othergovernmental 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 any 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, including counsel fees, which the Trustee
may sustain or incur with respect to such taxes or charges, the Trustee
shall be reimbursed and indemnified out of the Interest and Principal
Accounts of the affected Trust, and the payment of such amounts so paid
by the Trustee shall be secured by a prior lien on such Trust.
(i) No payment to a Depositor or to any principal underwriter (as
defined in the Investment Company Act of 1940) for the Trust or to any
affiliated person (as so defined) or agent of a Depositor or such
underwriter shall be allowed the Trustee as a expense except for payment 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.
(j) The Trustee except by reason of its own negligence or willful
misconduct shall not be liable for any action taken or suffered to be taken
by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture.
(k) The Trustee in its individual or any other capacity may become
owner or pledgee of, or be an underwriter or dealer in respect of, stocks,
bonds or other obligations issued by the same issuer (or an affiliate of
such issuer) or any obligor of any Bonds at any time held as part of the
Trust and may deal in any manner with the same or with the issuer (or an
affiliate of the issuer) with the same rights and powers as if it were not
the Trustee hereunder.
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(l) The Trust may include a letter or letters of credit securing the
purchase of Bonds pursuant to contracts deposited by the Depositor which
are issued by the Trustee in its individual capacity for the account of the
Depositor, and the Trustee may otherwise deal with the Depositor and the
Trustee with the same rights and powers as if it were not the Trustee
hereunder.
SECTION 5.02. BOOKS, RECORDS AND REPORTS: The Trustee shall keep proper
books of record and account of all the transactions of each Trust and Book Entry
Positions recorded on the books of the Trustee under this Indenture at the
Trustee's Office including a record of the name and address of, and the
Certificates issued by each Trust and held by, every Unitholder, and such books
and records of each Trust shall be open to inspection by any Unitholder of such
Trust at all reasonable times during the Trustee's usual business hours. The
Trustee shall cause audited statements as to the assets and income of each Trust
to be prepared on an annual basis by independent public accountants selected by
the Depositor, PROVIDED, HOWEVER, (i) if the Sponsor shall provide to the
Trustee a written representation concluding that in the best judgment of the
Sponsor ceasing to prepare such annual audited statement would not have a
material adverse impact on the marketability of the Units in the secondary
market or (ii) if the cost to a Trust for preparation of such statements shall
exceed an amount equivalent to $.05 per Unit on an annual basis then the Trustee
shall not be required to have such statements prepared.
To the extent permitted under the Investment Company Act of 1940 as
evidenced by an opinion of counsel to the Depositor, the Trustee shall pay, or
reimburse to the Depositor or others, the costs of the preparation of documents
and information with respect to each Trust required by law or regulation in
connection with the maintenance of a secondary market in units of each Trust.
Such costs may include but are not limited to accounting and legal fees, blue
sky registration and filing fees, printing expenses and other reasonable
expenses related to documents required under Federal and state securities laws.
The Trustee shall make such annual or other reports as may from time to
time be required under any applicable state or federal statute or rule or
regulation thereunder.
SECTION 5.03. INDENTURE AND LIST OF SECURITIES ON FILE: The Trustee shall
keep a certified copy or duplicate original of this Indenture on file at its
corporate trust office available for inspection at all reasonable times during
the Trustee's usual business hours by any Unitholder, together with a current
list of the Securities in each Trust.
SECTION 5.04. COMPENSATION: For services performed under this
Indenture, the Trustee shall be paid at the rate specified in the Prospectus,
provided, however, that for services performed prior to the record date for
the second distribution from the Interest Account indicated under "Interest
Distribution" for each Trust in the Prospectus, the Trustee's compensation
shall be computed in respect of all Units outstanding at the rate specified
for the monthly plan of distribution. Such compensation with respect to each
Trust shall be computed on the basis of the largest principal amount of
Securities in such trust at any time during the period with respect to which
such compensation is being computed. The Trustee may periodically adjust the
compensation provided for pursuant to this paragraph in
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response to fluctuations in short-term interest rates and average cash balances
of the Trust accounts (reflecting the cost to the Trustee of advancing funds to
a Trust to meet scheduled distributions and changes in anticipated earnings on
cash balances) and may, in addition, adjust such portion of its fee as is not
computed by reference to the cash balances in the Trust accounts in accordance
with 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 no
longer exists, a comparable index. The consent or concurrence of any Unitholder
hereunder shall not be required for any such adjustment or increase. Such
compensation shall be charged by the Trustee against the Interest and Principal
Accounts of each Trust on or before the Distribution Date on which such period
terminates; PROVIDED, HOWEVER, that such compensation shall be deemed to provide
only for the usual, normal and proper functions undertaken as Trustee pursuant
to this Indenture. The Trustee shall charge the Interest and Principal Accounts
relating to such Trust for any and all expenses, including the fees of counsel
which may be retained by the Trustee in connection with its activities hereunder
and disbursements incurred hereunder and any extraordinary services performed by
the Trustee hereunder relating to such Trust. The Trustee shall be indemnified
ratably by the affected Trust and held harmless against any loss or liability
accruing to it without negligence, bad faith or willful misconduct on its part,
arising out of or in connection with the acceptance or administration of this
trust, including the costs and expenses (including counsel fees) of defending
itself against any claim of liability in the premises. If the cash balances in
the Interest and Principal Accounts of the affected Trust shall be insufficient
to provide for amounts payable pursuant to this Section 5.04 the Trustee shall
have the power to sell (i) Securities of the affected Trust from the current
list of Securities designated to be sold pursuant to Section 4.02 hereof, or
(ii) if no such Securities have been so designated such Securities of the
affected Trust as the Trustee may see fit to sell in its own discretion, and to
apply the proceeds of any such sale in payment of the amounts payable pursuant
to this Section 5.04. 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 5.04. Any moneys payable to the Trustee pursuant to
any provision of this Indenture shall be secured by a prior lien on the affected
Trust.
SECTION 5.05. REMOVAL AND RESIGNATION OF TRUSTEE; SUCCESSOR: The
following provisions shall provide for 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 such trusts and
filing the same with the Depositor and mailing a copy of a notice of
resignation to all Unitholders then of record, not less than sixty days
before the date specified in such instrument when, subject to Section
5.05(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. In case at any time the Trustee shall become incapable
of acting, or shall be adjudged a bankrupt or insolvent,
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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, 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 Unitholder
then of record.
(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
provided, however, that no successor trustee shall be under any liability
hereunder for occurrences or omissions prior to the execution of such
instrument. Upon the request of such successor trustee, the Depositor and
the retiring Trustee shall, upon payment of any amounts due the retiring
Trustee, or provision therefor to the satisfaction of such retiring
Trustee, execute and deliver an instrument acknowledged by it
transferring to such successor trustee all the rights and powers of the
retiring Trustee; and the retiring Trustee shall transfer, deliver and
pay over to the successor trustee all Bonds and moneys at the time held
by it hereunder, together with all necessary instruments of transfer and
assignment or other documents properly executed necessary to effect such
transfer and such of the records or copies thereof maintained by the
retiring Trustee in the administration hereof as may be requested by the
successor trustee, and shall thereupon be discharged from all duties and
responsibilities under this Indenture. The retiring Trustee shall,
nevertheless, retain a lien upon all Bonds and moneys at the time held by
it hereunder 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 or consolidation, by which any such trustee may seek to retain
certain powers, rights and privileges theretofore obtaining for any period
of time following such merger or consolidation, to the contrary
notwithstanding.
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(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.
SECTION 5.06. QUALIFICATIONS OF TRUSTEE: The Trustee shall be a
corporation organized and doing business under the laws of the United States
or any state thereof, which is authorized under such laws to exercise
corporate trust powers and having at all times an aggregate capital, surplus,
and undivided profits of not less than $5,000,000.
ARTICLE VI
RIGHTS OF UNITHOLDERS
SECTION 6.01. BENEFICIARIES OF TRUST: By the purchase and acceptance or
other lawful delivery and acceptance of a Certificate of a Trust or the purchase
and acceptance of any Book Entry Position or other lawful delivery and
acceptance of such Book Entry Position including receipt of a Book Entry
Confirmation, the Unitholder (i) shall be deemed to be a beneficiary of such
Trust and vested with all right, title and interest in such Trust to the extent
of the Unit or Units or fraction thereof set forth and evidenced by such
Certificate or Book Entry Position and (ii) shall assent to and be bound by the
terms and conditions of this Indenture.
SECTION 6.02. RIGHTS, TERMS AND CONDITIONS: In addition to the other
rights and powers set forth in the other provisions and conditions of this
Indenture the Unitholders shall have the following rights and powers and
shall be subject to the following terms and conditions:
(a) A Unitholder may at any time prior to the termination of the Trust
tender his Units to the Trustee for redemption in accordance with Section
4.02.
(b) The death or incapacity of any Unitholder shall not operate to
terminate this Indenture or the related 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 Fund or the related Trust, nor otherwise affect
the rights, obligations and liabilities of the parties hereto or any of
them. Each Unitholder 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 Bonds or moneys from time
to time received, held and applied by the Trustee hereunder.
(c) No Unitholder shall have any right to vote or in any manner
otherwise control the operation and management of the Trust Fund, the
related 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 Unitholders from time to time as
partners or members of an association; nor shall any Unitholder ever
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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.
ARTICLE VII
ADDITIONAL COVENANTS; MISCELLANEOUS PROVISIONS
SECTION 7.01. 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 Unitholders (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 make such
other provision in regard to matters or questions arising hereunder as shall
not adversely affect the interests of the Unitholders; PROVIDED, HOWEVER,
that the parties hereto may not amend this Indenture so as to (1) increase
the number of Units issuable hereunder above the amount issued pursuant to
Section 2.01, or such lesser amount as may be outstanding at any time during
the term of this Indenture or (2) subject to Sections 3.08 and 3.14, permit
the deposit or acquisition hereunder of obligations or other securities
either in addition to or in substitution for any of the Securities.
Promptly after the execution of any such amendment the Trustee shall
furnish written notification to all the outstanding Unitholders of the substance
of such amendment.
SECTION 7.02. TERMINATION: Each Trust shall terminate upon the
maturity, redemption, sale or other disposition as the case may be of the
last Security held in such Trust unless sooner terminated as hereinbefore
specified and may be terminated at any time by the written consent of one
hundred per cent of the Unitholders of the respective Trust; PROVIDED, that
in no event shall any Trust continue beyond the end of the calendar year
preceding the fiftieth anniversary of the execution of this Indenture (the
"Mandatory Termination Date"). Written notice of any termination, specifying
for Certificated Unitholders the time or times at which the Certificated
Unitholders of such Trust may surrender their Certificates for cancellation
shall be given by the Trustee to each such Certificated Unitholder at his
address appearing on the registration books of the Trustee. Written notice
of any termination shall be given by the Trustee to each Book Entry
Unitholder at his address appearing on the registration books of the Trustee.
Within a reasonable period of time after the termination of a Trust the
Trustee shall fully liquidate the Bonds of such Trust then held, if any, and
shall:
(a) deduct from the Interest Account of such Trust or, to the extent
that funds are not available in such Account, from the Principal Account of
such 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 such Trust, (2) any compensation due it for its extraordinary services
in connection with such Trust and (3) any costs, expenses, indemnities and
advances in connection with such Trust as provided herein;
(b) deduct from the Interest Account of such Trust or, to the extent
that funds are not available in such Account, from the Principal Account of
such Trust and pay
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accrued and unpaid fees of bond counsel in connection with such Trust, if
any, as directed and certified to by the Depositor;
(c) deduct from the Interest Account of such Trust or the Principal
Account of such Trust any amounts which may be required to be deposited in
the Reserve Account of such 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
such Trust;
(d) distribute to each Unitholder of such Trust, upon surrender for
cancellation of his Certificate or Certificates, if any, such holder's pro
rata share of the balance of the Interest Account of such Trust;
(e) distribute to each Unitholder of such Trust, upon surrender, for
cancellation by the Unitholder of his Certificate or Certificates, if any,
such Unitholder's pro rata share of the balance of the Principal Account of
such Trust; and
(f) together with such distribution to each Unitholder as provided for
in (d) and (e), furnish to each such Unitholder a final distribution
statement as of the date of the computation of the amount distributable to
Unitholders, setting forth the data and information in substantially the
form and manner provided for in Section 3.06 hereof.
The amounts to be so distributed to each Unitholder shall be that pro rata
share of the balance of the total Interest and Principal Accounts of such Trust
as shall be represented by the Units therein evidenced by the outstanding
Certificate or Certificates held of record by such Unitholder and/or as
evidenced on the records of the Trustees as Book Entry Positions.
The Trustee shall be under no liability with respect to moneys held by it
in the Interest, Reserve and Principal Accounts of a Trust upon termination
except to hold the same in trust without interest until disposed of in
accordance with the terms of this Indenture.
In the event that all of the Certificated Unitholders of such 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 such remaining Certificated Unitholders to surrender
their written Certificates for cancellation and receive the liquidation
distribution with respect thereto. If within one year after the second notice
all the Certificates of such Trust shall not have been surrendered for
cancellation, the Trustee may take steps, or may appoint an agent to take
appropriate steps, to contact such remaining Certificated Unitholders concerning
surrender of their Certificates and the cost thereof shall be paid out of the
moneys and other assets which remain in such Trust hereunder.
SECTION 7.03. CONSTRUCTION: This Indenture is executed and 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 Unitholders and the
interpretation of the provisions hereof.
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SECTION 7.04. REGISTRATION OF UNITS: The Depositor agrees and
undertakes 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 the Trust Fund created hereunder, and the Trustee shall incur no
liability or be under any obligation or expense in connection therewith,
except as provided in Section 3.01.
SECTION 7.05. 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 at 000 Xxxx
Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, or at such other address as shall be
specified by the Depositor to the Trustee in writing. Any notice, demand,
direction or instruction to be given to the Trustee shall be in writing and
shall be duly given if mailed or delivered to the Trustee's Office or such
other address as shall be specified to the Depositor by the Trustee in
writing. Any notice to be given to the Unitholders shall be duly given if
mailed or delivered to each Unitholder at the address of such holder
appearing on the registration books of the Trustee.
SECTION 7.06. 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 Unitholders.
SECTION 7.07. DISSOLUTION OF DEPOSITOR NOT TO TERMINATE: The
dissolution of the Depositor from or for any cause whatsoever shall not
operate to terminate this Indenture insofar as the duties and obligations of
the Trustee are concerned.
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IN WITNESS WHEREOF, Xxxx Nuveen & Co. Incorporated, has caused this
Standard Terms and Conditions of Trust to be executed by its President, one of
its Vice Presidents or one of its Assistant Vice Presidents and its corporate
seal to be hereto affixed and attested by its Secretary or its Assistant
Secretary and The Chase Manhattan Bank has caused this Trust Indenture and
Agreement to be executed by one of its Vice Presidents or Second Vice Presidents
and its corporate seal to be hereto affixed and attested to by one of its
Assistant Treasurers; all as of the day, month and year first above written.
XXXX NUVEEN & CO. INCORPORATED,
Depositor
By
--------------------------------
Authorized Officer
(SEAL)
Attest:
By
--------------------------------------
Assistant Secretary
THE CHASE MANHATTAN BANK, TRUSTEE
By
--------------------------------
Second Vice President
(SEAL)
Attest:
By
--------------------------------------
Assistant Treasurer
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