Exhibit 4.2
XXXXXX XXXXXXX XXXX XXXXXX SELECT EQUITY TRUST
REIT PORTFOLIO SERIES 98
REFERENCE TRUST AGREEMENT
This Reference Trust Agreement dated October 21, 1998
between XXXX XXXXXX XXXXXXXX INC., as Depositor, and The Chase
Manhattan Bank, as Trustee, sets forth certain provisions in
full and incorporates other provisions by reference to the
document entitled "Sears Equity Investment Trust, Trust Inden-
ture and Agreement" dated January 22, 1991, as amended on March
16, 1993, July 18, 1995 and December 30, 1997 (the "Basic
Agreement"). Such provisions as are incorporated by reference
constitute a single instrument (the "Indenture").
WITNESSETH THAT:
In consideration of the premises and of the mutual
agreements herein contained, the Depositor and the Trustee
agree as follows:
I.
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II hereof, all the
provisions contained in the Basic Agreement are herein incorpo-
rated by reference in their entirety and shall be deemed to be
a part of this instrument as fully and to the same extent as
though said provisions had been set forth in full in this in-
strument except that the Basic Agreement is hereby amended in
the following manner:
A. Article I, Section 1.01, paragraph (29) defining
"Trustee" shall be amended as follows:
"'Trustee' shall mean The Chase Manhattan Bank,
or any successor trustee appointed as hereinaf-
ter provided."
B. Reference to United States Trust Company of New
York in its capacity as Trustee is replaced by The Chase
Manhattan Bank throughout the Basic Agreement.
C. Reference to "Xxxx Xxxxxx Select Equity Trust"
is replaced by "Xxxxxx Xxxxxxx Xxxx Xxxxxx Select Equity
Trust".
D. Section 3.01 is amended to substitute the fol-
lowing:
SECTION 3.01. INITIAL COST The costs of organizing
the Trust and sale of the Trust Units shall, to the extent
of the expenses reimbursable to the Depositor provided be-
low, be borne by the Unit Holders, PROVIDED, HOWEVER,
that, to the extent all of such costs are not borne by
Unit Holders, the amount of such costs not borne by Unit
Holders shall be borne by the Depositor and, PROVIDED FUR-
THER, however, that the liability on the part of the De-
positor under this Section shall not include any fees or
other expenses incurred in connection with the administra-
tion of the Trust subsequent to the deposit referred to in
Section 2.01. Upon notification from the Depositor that
the primary offering period is concluded, the Trustee
shall withdraw from the Account or Accounts specified in
the Prospectus or, if no Account is therein specified,
from the Principal Account, and pay to the Depositor the
Depositor's reimbursable expenses of organizing the Trust
and sale of the Trust Units in an amount certified to the
Trustee by the Depositor. If the balance of the Principal
Account is insufficient to make such withdrawal, the Trus-
tee shall, as directed by the Depositor, sell Securities
identified by the Depositor, or distribute to the Deposi-
tor Securities having a value, as determined under Section
4.01 as of the date of distribution, sufficient for such
reimbursement. The reimbursement provided for in this
Section shall be for the account of the Unitholders of re-
cord at the conclusion of the primary offering period and
shall not be reflected in the computation of the Unit
Value prior thereto. As used herein, the Depositor's re-
imbursable expenses of organizing the Trust and sale of
the Trust Units shall include the cost of the initial
preparation and typesetting of the registration statement,
prospectuses (including preliminary prospectuses), the in-
denture, and other documents relating to the Trust, SEC
and state blue sky registration fees, the cost of the ini-
tial 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 pre-
liminary prospectuses and prospectuses, expenses incurred
in the preparation and printing of brochures and other ad-
vertising materials and any other selling expenses. Any
cash which the Depositor has identified as to be used for
reimbursement of expenses pursuant to this Section shall
be reserved by the Trustee for such purpose and shall not
be subject to distribution or, unless the Depositor other-
wise directs, used for payment of redemptions in excess of
the per-Unit amount allocable to Units tendered for re-
demption.
E. The third through fifth paragraphs of Sec-
tion 3.05 shall be amended to provide as follows:
On each Distribution Date or within a reasonable pe-
riod of time thereafter, the Trustee shall distribute by
mail to each Unit Holder of record at the close of busi-
ness on the preceding Record Date at his address appearing
on the registration books of the Trustee such Unit
Holder's income distribution, computed as hereinafter pro-
vided, plus such holder's pro rata share of the cash bal-
ance of the Principal Account, each computed as of the
preceding Record Date; provided, however, that funds cred-
ited to the Principal Account in the event of the failure
of consummation of a contract to purchase Securities pur-
suant to Section 2.01 hereof, funds representing the pro-
ceeds of the sale of Securities pursuant to Section 3.08
hereof, and funds representing the proceeds of the sale of
Securities under Sections 5.02 or 6.04 in excess of the
amounts needed for the purposes of said Sections shall not
be distributed until the next Distribution Date or at such
earlier date as shall be determined by the Trustee. The
Trustee shall not be required to make a distribution from
the Principal Amount unless the cash balance on deposit
therein available for distribution shall be sufficient to
distribute at least $1.00 per Unit in the case of Units
initially offered at approximately $1,000 or a proportion-
ately lower amount in the case of Units initially offered
at less that $1,000 (e.g. $.001 per Unit in the case of
Units initially offered at approximately $1.00).
The Trustee shall, as of each Record Date, compute
and report to the Depositor the per-Unit amount of the
monthly income distribution to be made on the next follow-
ing Distribution Date (the "Monthly Income Distribution")
by (i) estimating the annual income of the Trust for the
ensuing twelve months (by reference to the most recent
distributions made on Securities and any information re-
ceived by the Trustee with respect to future dividends or
other income), (ii) deducting therefrom the estimated
costs and expenses to be incurred during the twelve-month
period for which such income has been estimated and
(iii) dividing the amount so obtained by the result of 12
multiplied by the number of Units outstanding on such Rec-
ord Date. However, unless the Trustee or the Sponsor de-
termines that the Monthly Income Distribution should be
adjusted as provided hereafter, the amount of the Monthly
Income Distribution shall be the amount computed by the
Trustee on the most recent prior, or concurrently occur-
ring, Quarterly Computation Date (such "Quarterly Computa-
tion Date" being the first Record Date and each Record
Date occurring at three-month intervals thereafter). The
Trustee will adjust the amount of the Monthly Income Dis-
tribution computed on each Quarterly Computation Date to
reconcile, over the ensuing three Monthly Income Distribu-
tions, any variance between net income and distributions
made during the preceding three months. Notwithstanding
the preceding, the Trustee may reduce the amount of any
Monthly Income Distribution in the event the Trustee or
the Sponsor determines that such adjustment is necessary
to avoid, or to respond to, a significant discrepancy be-
tween estimated and actual net income. Notwithstanding the
foregoing, the Trustee may adjust the amount of the
Monthly Income Distribution in order to maintain an aver-
age annual cash balance in the Income Account of $0.
In the event the amount on deposit in the Income Ac-
count of the Trust on a Distribution Date is not suffi-
cient for the payment of the amount of income to be dis-
tributed 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 the Income Account such
amount as may be required to permit payment of the income
distribution to be made on such Distribution Date and
shall be entitled to be reimbursed, without interest, out
of the income subsequently received on the first Record
Date following the date of such advance on which such re-
imbursement may be made without reducing the cash balance
of the Income Account to an amount less than that required
for the next ensuing distribution. The Trustee shall be
deemed to be the beneficial owner of the dividends or
other income received by the Trust to the extent of all
amounts advanced by it pursuant to this paragraph, and
such advances shall be considered a lien on the Trust
prior to the interest of Unit Holders.
The amounts to be distributed to each Unit Holder
shall be that per-Unit income distribution and pro rata
share of the cash balance of the Principal Account of the
Trust, computed as hereinabove provided, as shall be rep-
resented by the Units owned by such Unit Holder as evi-
denced by the record books of the Trustee as of the appli-
cable Record Date.
In computing the distribution to be made to any Unit
Holder, fractions of one cent shall be omitted. After any
such distribution, any cash balance remaining in the In-
come Account or the Principal Account shall be held in the
same manner as other amounts subsequently deposited in
each of such Accounts, respectively.
II.
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby
agreed to:
A. The Trust is denominated Xxxxxx Xxxxxxx Xxxx
Xxxxxx Select Equity Trust, REIT Portfolio Series 98 (the
"REIT" Trust").
B. The publicly traded stocks listed in Schedule A
hereto are those which, subject to the terms of this
Indenture, have been or are to be deposited in trust under
this Indenture.
C. The term, "Depositor" shall xxxx Xxxx Xxxxxx
Xxxxxxxx Inc.
D. The aggregate number of Units referred to in
Sections 2.03 and 9.01 of the Basic Agreement is 25,000
for the REIT Trust.
E. A Unit is hereby declared initially equal to
1/25,000th for the REIT Trust.
F. The term "In-Kind Distribution Date" shall mean
October 18, 2000.
G. The term "Record Date" shall mean monthly on the
1st day of each month beginning December 1, 1998.
H. The term "Distribution Dates" shall mean monthly
on the 15th day of each month beginning December 15, 1998.
I. The term "Termination Date" shall mean
November 30, 2000.
J. The Depositor's Annual Portfolio Supervision Fee
shall be a maximum of $0.25 per 100 Units.
K. The Trustee's annual fee as defined in
Section 6.04 of the Indenture shall be $.74 per 100 Units if
the greatest number of Units outstanding during the period
is 10,000,000 or more; $.80 per 100 Units if the greatest
number of Units outstanding during the period is between
5,000,000 and 9,999,999; and $.86 per 100 Units if the
greatest number of Units outstanding during the period is
4,999,999 or less.
L. For a Unit Holder to receive an "in-kind"
distribution during the life of the Trust, such Unit
Holder must tender at least 25,000 Units for redemption.
There is no minimum amount of Units that a Unit Holder
must tender in order to receive an "in-kind" distribution
on the In-Kind Date or in connection with a rollover.
M. The Indenture is amended to provide that the
period during which the Trustee shall liquidate the Trust
Securities shall not exceed 30 business days commencing on
the first business day following the In-Kind Date.
(Signatures and acknowledgments on separate pages)
The Schedule of Portfolio Securities in the
prospectus included in this Registration Statement is
hereby incorporated by reference herein as Schedule A
hereto.
