EXHIBIT 1.1
EVEREN Unit Investment Trusts
Series 42
TRUST AGREEMENT
This Trust Agreement dated as of February 21, 1996 between EVEREN
Securities, Inc., as Depositor, and The Bank of New York, as Trustee, sets forth
certain provisions in full and incorporates other provisions by reference to the
document entitled "Standard Terms and Conditions of Trust For EVEREN Unit
Investment Trusts, Equity Trusts, Effective November 7, 1995" (herein called the
"Standard Terms and Conditions of Trust"), and such provisions as are set forth
in full and such provisions as are incorporated by reference constitute a single
instrument.
WITNESSETH THAT:
In consideration of the premises and of the mutual agreements herein
contained, the Depositor and the Trustee agree as follows:
Part I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II hereof, all the provisions contained
in the Standard Terms and Conditions of Trust are herein incorporated 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
this instrument.
Part II
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby agreed to:
(1) The equity securities listed in the Schedule hereto have been
deposited in trust under this Trust Agreement as indicated in each Trust
named on the attached Schedule.
(2) For the purposes of the definition of the term "Unit" in Article
I, it is hereby specified that the fractional undivided interest in and
ownership of a Trust is the amount set forth in the section captioned
"Essential Information" in the final Prospectus of the Trust (the
"Prospectus") contained in Amendment No. 2 to the Trust's Registration
Statement (Registration No. 333-00407) as filed with the Securities and
Exchange Commission on February 21, 1996. The fractional undivided interest
may (a) increase by the number of any additional Units issued pursuant to
Section 2.03, (b) increase or decrease in connection with an adjustment to
the number of Units pursuant to Section 2.03, or (c) decrease by the number
of Units redeemed pursuant to Section 5.02.
(3) The term "Deferred Sales Charge" shall mean the "deferred sales
charge" as described in the Prospectus.
(4) The terms "Income Account Record Date" and "Capital Account Record
Date" shall mean the dates set forth under "Essential Information--Record
and Computation Dates" in the Prospectus.
(5) The terms "Income Account Distribution Date" and "Capital Account
Distribution Date" shall mean the dates set forth under "Essential
Information--Distribution Dates" in the Prospectus.
(6) The term "Initial Date of Deposit" shall mean the date of this
Trust Agreement as set forth above.
(7) Section 1.01(20) is hereby stricken and replaced by the following:
" "Percentage Ratio" shall mean, for each Trust which will issue additional
Units pursuant to Section 2.03 hereof, the actual number of shares of each
Equity Security as a percent of all shares of Equity Securities necessary
to cause the Trust portfolio to replicate, to the extent practicable, the
Nasdaq-100 Index immediately prior to any subsequent deposit of Securities
as determined by computer program output operated independent of the
Depositor which tracks such index."
(8) Section 2.01(b) is hereby amended by adding the following
immediately after the first sentence of the second paragraph of such
Section the following: "Such additional Securities may be deposited or
purchased in round lots; if the amount of the deposit is insufficient to
acquire round lots of each Security to be acquired, the additional
Securities shall be deposited or purchased in the order of the Securities
in the Trust most under-represented in the Trust's portfolio in comparison
to their percentage weighting in the Nasdaq-100 Index as determined by
computer program output operated independent of the Depositor which tracks
such index."
(9) The first sentence of Section 2.01(e) is hereby stricken and
replaced with the following:
"If Securities in the Trust are sold pursuant to Sections 3.07 or 8.02
hereof or if there are excess proceeds remaining after meeting
redemption requests pursuant to Section 5.02, and the net proceeds of
any such sale are not otherwise reinvested as provided in such
Sections, the net proceeds of any such sale may be reinvested, if in
the opinion of the Depositor it is in the best interests of the
Unitholders to do so, in short term U.S. Treasury obligations maturing
on or
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prior to the next succeeding Capital Distribution Date or, if earlier,
December 31 of the year of purchase (the "Reinvestment Securities")."
(10) The number of Units of a Trust referred to in Section 2.03 is as set
forth under "Essential Information--Number of Units" in the Prospectus.
(11) Section 3.07(a) is hereby amended by adding the following subsections
immediately after Section 3.07(a)(ix):
" (x) that the Security has been removed from the Nasdaq-100 Index;
or
(xi) that computer program output operated independent of the
Depositor which tracks the Nasdaq-100 Index indicates that the Security
is over-represented in the Trust's portfolio in comparison to such
Security's percentage weighting in such index."
(12) Section 3.07 is hereby amended by changing the current subsection (c)
to subsection (d) and adding the following as a new subsection (c):
" (c) In the event a Security is sold pursuant to Section 3.07(a)(x),
the Depositor may direct the reinvestment of the proceeds of the sale of
such Security, to the extent practicable, into any security which
replaces such Security as a component of the Nasdaq-100 Index or, if no
security so replaces such Security, into any other Securities which are
under-represented in the Trust's portfolio in comparison to their
percentage weighting in the Nasdaq-100 Index as determined by computer
program output operated independent of the Depositor which tracks such
index. In the event a Security is sold pursuant to Section 3.07(a)(xi),
the Depositor may direct the reinvestment of the proceeds of the sale
of such Security, to the extent practicable, into any other Securities
which are under-represented in the Trust's portfolio in comparison to
their percentage weighting in the Nasdaq-100 Index as determined by
computer program output operated independent of the Depositor which
tracks such index. Without limiting the generality of the foregoing, in
determining whether such reinvestment is practicable, the Depositor may,
but is not obligated to, specifically consider the ability of the Trust
to reinvest such proceeds into round lots of a Security."
(13) The second paragraph of Section 3.10 is hereby stricken and replaced
with the following:
" In the event that an offer by the issuer of any of the Securities or
any other party shall be made to issue new securities, or to exchange
securities, for Trust Securities, the Trustee shall reject such offer.
However, should any issuance, exchange or substitution be effected
notwithstanding such rejection or
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without an initial offer, any securities, cash and/or property received
shall be deposited hereunder and shall be promptly sold, if securities
or property, by the Trustee; provided, however, if such securities are
components of the Nasdaq-100 Index, the Depositor may advise the Trustee
to keep such securities. The cash received in such exchange and cash
proceeds of any such sales shall, in the following priority, be
(1) reinvested, to the extent practicable, into any Securities which are
under-represented in the Trust's portfolio in comparison to their
percentage weighting in the Nasdaq-100 Index as determined by computer
program output operated independent of the Depositor which tracks such
index or (2) distributed to Unitholders on the next Distribution Date in
the manner set forth in Section 3.04(b) regarding distributions from the
Capital Account. Without limiting the generality of the foregoing, in
determining whether such reinvestment is practicable, the Depositor may,
but is not obligated to, specifically consider the ability of the Trust
to reinvest such proceeds into round lots of a Security. Except as
provided in Article VIII, the Trustee shall not be liable or responsible
in any way for depreciation or loss incurred by reason of any such
rejection or sale."
(14) Notwithstanding anything to the contrary in Section 3.10, if at any
time equity securities of EVEREN Capital Corporation or any of its affiliates
are included as Securities in the portfolio of the Trust and the Trustee shall
have been notified of any action to be taken or proposed to be taken by holders
of such Securities, then the Trustee shall take such action or refrain from
taking any action so as to insure that such Securities are voted as closely as
possible in the same manner and the same general proportion, with respect to
all issues, as are the Securities held by owners other than the Trust.
(15) Section 5.02 is hereby amended by adding the following immediately
after the last sentence of the second paragraph of such Section:
"If Securities in the Trust are sold for the payment of the
Redemption Value and there are excess proceeds remaining after meeting
redemption requests, the Depositor may, but is not obligated to,
instruct the Trustee to reinvest such excess proceeds into any
Securities which are under-represented in the Trust's portfolio in
comparison to their percentage weighting in the Nasdaq-100 Index as
determined by computer program output operated independent of the
Depositor which tracks such index."
(16) For the purposes of Section 6.01(g), the liquidation amount is the
amount set forth under "Essential Information--Minimum Value of Trust under
which Trust Agreement may be Terminated" in the Prospectus.
(17) Notwithstanding anything to the contrary herein, if at any time the
Nasdaq-100 Index shall no longer be compiled, maintained or made available, the
Depositor
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may (a) direct that the Trust created hereby continue to be operated hereunder
utilizing the components of the Nasdaq-100 Index, and the percentage weightings
of such components, as existed on the last date on which the Nasdaq-100 Index
components and weightings were available to the Trust or (b) direct the Trustee
to terminate this Indenture and the Trust created hereby and liquidate the
Trust in such manner as the Depositor shall direct.
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IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to
be duly executed.
EVEREN Securities, Inc.,
Depositor
By Xxxxxx X. Xxxxx
---------------------------
Senior Vice President
THE BANK OF NEW YORK,
Trustee
By Xxx Xxxxxx
---------------------------
Vice President
SCHEDULE A
Securities Initially Deposited
EVEREN Unit Investment Trusts
Series 42
(Note: Incorporated herein and made a part hereof is the "Portfolio" as
set forth in the Prospectus.)
