EQUITY SECURITIES TRUST,
SIGNATURE SERIES, XXXXX & XXXX GROWTH AND VALUE TRUST II
REFERENCE TRUST AGREEMENT
This Reference Trust Agreement (the "Agreement") dated
September 29, 1998 between Xxxxx & Tang Distributors, 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 "Equity
Securities Trust, Series 6, Signature Series, Gabelli Entertainment and Media
Trust, and Subsequent Series, Trust Indenture and Agreement" dated November 16,
1995 and as amended in part by this Agreement (collectively, such documents
hereinafter called the "Indenture and Agreement"). This Agreement and the
Indenture, as incorporated by reference herein, will constitute a single
instrument.
WITNESSETH THAT:
WHEREAS, this Agreement is a Reference Trust Agreement as
defined in Sec tion 1.1 of the Indenture, and shall be amended and modified from
time to time by an Addendum as defined in Section 1.1 (1) of the Indenture, such
Addendum setting forth any Additional Securities as defined in Section 1.1 (2)
of the Indenture;
WHEREAS, the Depositor wishes to deposit Securities, and any
Additional Securities as listed on any Addendums hereto, into the Trust and
issue Units, and Additional Units as the case maybe, in respect thereof pursuant
to Sections 2.1 and 2.6 of the Indenture; and
NOW THEREFORE, 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
Section 1. Subject to the provisions of Part II hereof, all
the provisions contained in the Indenture 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 full in
this instrument except that the following sections of the Indenture hereby are
amended as follows:
(a) All references to "The Chase Manhattan Bank (National
Association)" are replaced with "The Chase Manhattan Bank".
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(b) Notwithstanding any provision of the Indenture to the
contrary, ownership of Units of this series of Equity Securities Trust shall not
be certificated and shall be evidenced solely by registration on the transfer
books of the Trustee, and the registered holder of uncertificated Units shall
have all of the rights and obligations (excluding the right to the issuance of a
Certificate) specified for a registered Certificateholder under the Indenture.
The Depositor and the Trustee shall cause all Units of the Trust issued to the
Depositor (upon both the initial deposit and any deposits of Additional
Securities pursuant to Section 2.6) to be deposited at The Depository Trust
Company ("DTC") and to be credited there to the account of the Depositor. On and
after such deposit, for all purposes under the Indenture and Agreement, the sole
registered holder of Units of the Trust shall be DTC, or its nominee, unless and
until DTC has notified the Trustee and the Depositor that it is no longer
willing to act as depository with respect to the Units. Accordingly, so long as
DTC, or its nominee, is the registered owner of the Trust Units, beneficial
ownership of Units may only be maintained by or through a participant in DTC and
shall be subject to the rules and operating procedures of DTC as in effect from
time to time. The Trustee shall not be liable for any loss or liability
resulting from the actions of DTC as registered holder and depository of the
Units.
(c) Sections 1.2 and 2.4 and any reference herein to the
issuance of Certificates shall be deleted.
(d) Section 2.3 shall be amended by adding after the words
"has registered on the registration books of the Trust the ownership by" the
words "the Depositor of such Units or, if requested by the Depositor, the
ownership by."
(e) Paragraph (a) of Section 2.6 shall be amended to read in
its entirety as follows:
"Section 2.6 Deposit of Additional Securities. (a)
Subject to the requirements set forth below in this
Section, the Depositor may, on any Business Day (the
"Trade Date"), subscribe for Additional Units as follows:
(1) Prior to the Evaluation Time on the Trade Date, the
Depositor shall provide notice (the "Subscription
Notice") to the Trustee, by telecopy or by written
communication, of the Depositor's intention to subscribe
for Additional Units. The Subscription Notice shall
identify the Additional Securities to be acquired (unless
such Additional Securities are a precise replication of
the then existing portfolio) and shall either (i) specify
the quantity of Additional Securities to be deposited by
the Depositor on the settlement date for such
subscription or (ii) instruct the Trustee to purchase
Additional Securities with an aggregate value as
specified in the Subscription Notice.
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(2) Promptly following the Evaluation Time on such
Business Day, the Depositor shall verify with the
Trustee, by telecopy, the number of Additional Units to
be created.
(3) Not later than the time on the settlement date for
such subscription when the Trustee is to deliver the
Additional Units created thereby (which time shall not be
later than the time by which the Trustee is required to
settle any contracts for the purchase of Additional
Securities entered into by the Trustee pursuant to the
instruction of the Depositor referred to in subparagraph
(1) above), the Depositor shall deposit with the Trustee
(i) any Additional Securities specified in the
Subscription Notice (or contracts to purchase such
Additional Securities together with cash or a letter of
credit in the amount necessary to settle such contracts)
or (ii) cash or a letter of credit in the amount equal to
the aggregate value of the Additional Securities
specified in the Subscription Notice, together with, in
each case, Cash as defined below. "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 Evaluation Time on the Business Day preceding the
Trade Date (other than amounts to be distributed solely
to persons other than persons receiving the distribution
from the Principal Account as holders of Additional 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 Evaluation Time on the Business
Day preceding the Trade Date or receivable by the Trust
in respect of dividends or other distributions declared
but not received as of the Evaluation Time on the
Business Day preceding the Trade Date, reduced by 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 3.5) to a
distribution made or to be made in respect of a Record
Date occurring prior to the Trade Date. Each deposit made
during the 90 days following the deposit made pursuant to
Section 2.1 hereof shall replicate, to the extent
practicable, as specified in subparagraph (b), the
Original Proportionate Relationship. Each deposit made
after the 90 days following the deposit made pursuant to
Section 2.1 hereof (except for deposits made to replace
Failed Securities if such deposits occur within 20 days
from the date of a failure occurring within such initial
90 day period) shall maintain exactly the proportionate
relationship existing among the Securities as of the
expiration of such 90 day period. Each such deposit shall
exactly replicate Cash.
(4) On the settlement date for a subscription, the
Trustee shall, in exchange for the Securities and cash or
letter of credit described above, issue and
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deliver to or on the order of the Depositor the number of
Units verified by the Depositor with the Trustee. No Unit
to be issued pursuant to this paragraph shall be issued
or delivered unless and until Securities, cash or a
letter of credit is received in exchange therefor and no
person shall have any claim to any Unit not so issued and
delivered or any interest in the Trust in respect
thereof.
(5) Each deposit of Additional Securities, shall be
listed in a Supplementary Schedule to an Addendum to the
Reference Trust Agreement stating the date of such
deposit and the number of Additional Units being issued
therefor. The Trustee shall acknowledge in such Addendum
the receipt of the Deposit and the number of Additional
Units issued in respect thereof. The Additional
Securities shall be held, administered and applied by the
Trustee in the same manner as herein provided for the
Securities.
(6) The acceptance of Additional Units by the Depositor
in accordance with the provisions of paragraph (a) of
this Section shall be deemed a certification by the
Depositor that the deposit or purchase of Additional
Securities associated therewith complies with the
conditions of this Section 2.06.
(7) Notwithstanding the preceding, in the event that the
Sponsor's Subscription Notice shall instruct the Trustee
to purchase Additional Securities in an amount which,
when added to the purchase amount of all other unsettled
contracts entered into by the Trustee, exceeds 25% of the
value of the Securities then held (taking into account
the value of contracts to purchase Securities only to the
extent that there has been deposited with the Trustee
cash or an irrevocable letter of credit in an amount
sufficient to settle their purchase), the Sponsor shall
deposit with the Trustee concurrently with the
Subscription Notice such that, when added to 25% of the
value of the Securities then held (determined as above)
the aggregate value shall be not less than the purchase
amount of the securities to be purchased pursuant to such
Subscription Notice."
(f) Section 3.1 is hereby amended in its entirety to read as
follows:
"Section 3.1. Initial Cost: The cost of the initial
preparation, printing and execution of the Certificates and
this Indenture, the initial fees of the Trustee and its
counsel, and the initial fees of the Evaluator and other
reasonable expenses in connection therewith, shall be paid by
the Depositor, provided, however, that the liability on the
part of the Depositor for such initial costs, fees and
expenses shall not include any fees, costs or other expenses
incurred in connection herewith after the execution of this
Indenture and the deposit referred to in Section 2.01.
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The cost of the preparation, printing and execution of the
Registration Statement and other documents relating to the
Trust, Federal and State registration fees and costs, and
legal and auditing expenses and other out-of-pocket expenses
related thereto (excluding expenses incurred in the
preparation and 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 paid by the Trust. To the extent the
funds in the Interest and Principal Accounts of the Trust
shall be insufficient to pay the offering costs borne by the
Trust specified in this Section 3.1, 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 costs. The Trustee shall
be reimbursed for such advance on each Record Date from funds
on hand in the Income 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 6.4 with respect to the reimbursement of
disbursements for Trust expenses, including, without
limitation, the lien in favor of the Trustee therefor, shall
apply to the payment of costs made pursuant to this Section.
For purposes of the preceding sentence and the addition
provided in clause (a)(4) of Section 5.1, the costs borne by
the Trust pursuant to this Section shall be deemed to accrue
at a daily rate over the time period specified for their
amortization by the Depositor pursuant to Section 5.1
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
this Section 3.1, the Trustee shall rely on the written
estimates of such costs provided by the Depositor pursuant to
Section 5.1."
(g) Section 3.5 is hereby amended by inserting the phrase "or
Income" in the second sentence of the sixth paragraph after the words "The
Trustee shall not be required to make a distribution from the Principal..."
(h) Section 3.11 is hereby amended so that the first sentence
of such section reads as follows:
" 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, the Trustee shall reject such offer, except
that if (1) the issuer failed to declare or pay
anticipated dividends with respect to such Securities or
(2) in the opinion of the Sponsor, given in writing to
the Trustee, the issuer will probably fail to declare or
pay anticipated dividends with respect to such
Securities in the reasonably forseeable future, the
Sponsor shall instruct the Trustee in writing to accept
or reject such
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offer and to take any other action with respect thereto
as the Sponsor may deem proper."
(i) Section 3.14 is hereby amended by inserting the phrase
"including, but not limited to securities received as a result of a spin-off" in
the first sentence after the words "Any property received by the Trustee after
the initial date of Deposit in a form other than cash or additional shares of
the Securities listed on Schedule A..."
(j) Section 5.1 of the Agreement is amended by replacing the
phrase "organizational expenses" with "offering costs" each place it appears in
the second sentence of the first paragraph and the first sentence of the second
paragraph.
(k) Section 9.2 is hereby amended by replacing the phrase "60
business days" with "30 days" in the first sentence of the sixth paragraph.
(l) Section 9.2 of the Agreement is further amended by adding
the following paragraph after the sixth paragraph of such Section 9.2:
"In the event that the Depositor directs the Trustee that
certain Securities will be sold to a new series of the Trust
(a "New Series"), the Depositor will certify to the Trustee,
within five days of each sale from a Trust to a New Series,
(1) that the transaction is consistent with the policy of both
the Trust and the New Series, as recited in their respective
registration statements and reports filed under the Act, (2)
the date of such transaction and (3) the closing sales price
on the national securities exchange for the sale date of the
securities subject to such sale. The Trustee will then
countersign the certificate, unless the Trustee disagrees with
the closing sales price listed on the certificate, whereupon
the Trustee will promptly inform the Depositor orally of any
such disagreement and return the certificate within five days
to the Depositor with corrections duly noted. Upon the
Depositor's receipt of a corrected certificate, if the
Depositor can verify the corrected price by reference to an
independently published list of closing sales prices for the
date of the transactions, the Depositor will ensure that the
price of Units of the New Series, and distributions to holders
of the Trust with regard to redemption of their Units or
termination of the Trust, accurately reflect the corrected
price. To the extent that the Depositor disagree with the
Trustee's corrected price, the Depositor and the Trustee will
jointly determine the correct sales price by reference to a
mutually agreeable, independently published list of closing
sales prices for the date of the transaction. The Depositor
and Trustee will periodically review the procedures for sales
and make such changes as they deem necessary, consistent with
Rule 17a-7(e)(2). Finally, records of the procedures and of
each transaction will be maintained as provided in Rule
17a-7(f)."
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(m) All references to "Xxxxx & Xxxx Distributors L.P.". are
replaced with "Xxxxx & Tang Distributors, Inc."
Section 2. This Reference Trust Agreement may be amended and
modified by Addendums, attached hereto, evidencing the purchase of Additional
Securities which have been deposited to effect an increase over the number of
Units initially specified in Part II of this Reference Trust Agreement
("Additional Closings"). The Depositor and Trustee hereby agree that their
respective representations, agreements and certifications contained in the
Closing Memorandum dated September 29, 1998, relating to the initial deposit of
Securities continue as if such representations, agreements and certifications
were made on the date of such Additional Closings and with respect to the
deposits made therewith, except as such representations, agreements and
certifications relate to their respective By-Laws and as to which they each
represent that their has been no amendment affecting their respective abilities
to perform their respective obligations under the Indenture.
Part II
SPECIAL TERMS AND CONDITIONS OF TRUST
Section 1. The following special terms and conditions are
hereby agreed to:
(a) The Securities (including Contract Securities) listed in
the Prospectus relating to this series of Equity Securities Trust (the
"Prospectus") have been deposited in the Trust under this Agreement (see
"Portfolio" in Part A of the Prospectus which for purposes of this Indenture and
Agreement is the Schedule of Securities or Schedule A).
(b) The number of Units delivered by the Trustee in exchange
for the Securities referred to in Section 2.3 is 15,780.
(c) For the purposes of the definition of Unit in item (22) of
Section 1.1, the fractional undivided interest in and ownership of the Trust
initially is 1/15780 as of the date hereof.
(d) The term Record Date shall mean the fifteenth day of June
and December commencing on December 15, 1998.
(e) The term Distribution Date shall mean the last business
day of June and December commencing on December 31, 1998.
(f) The First Settlement Date shall mean October 2, 1998.
(g) For purposes of Section 6.1(g), the liquidation amount is
hereby specified to be 40% of the aggregate value of the Securities at the
completion of the Deposit Period.
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(h) For purposes of Section 6.4, the Trustee shall be paid per
annum an amount computed according to the following schedule, determined on the
basis of the number of Units outstanding as of the Record Date preceding the
Record Date on which the compensation is to be paid, provided, however, that
with respect to the period prior to the first Record Date, the Trustee's
compensation shall be computed at $.86 per 100 Units:
rate per 100 units number of Units outstanding
$0.86 5,000,000 or less
$0.80 5,000,001 - 10,000,000
$0.74 10,000,001 - 20,000,000
$0.62 20,000,001 or more
(i) For purposes of Section 7.4, the Depositor's maximum
annual supervisory fee is hereby specified to be $.25 per 100 Units outstanding.
(j) The Termination Date shall be October 6, 2003 or the
earlier disposition of the last Security in the Trust.
(k) The fiscal year for the Trust shall end on June 30 of each
year.
IN WITNESS WHEREOF, the parties hereto have caused this
Reference Trust Agreement to be duly executed on the date first above written.
[Signatures on separate pages]
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XXX XXXXX XXXXXXXXX BANK
Trustee
By: /s/ XXXXXXX X. XXXXXXX
----------------------
Vice President
(SEAL)
STATE OF NEW YORK )
:ss.:
COUNTY OF NEW YORK )
On this 14th day of September, 1998, before me personally appeared Xxxxxxx
X. Xxxxxxx, to me known, who being by me duly sworn, said that (s)he is an
Authorized Signator of The Chase Manhattan Bank, one of the corporations
described in and which executed the foregoing instrument; that (s)he knows the
seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by authority of the Board of Directors of
said corporation and that (s)he signed his/her name thereto by like authority.
/s/ ADA XXXX XXXX
-----------------------------------------
Notary Public
ADA XXXX XXXX
NOTARY PUBLIC, State of New York
No. 4864106
Qualified in New York County
Commission Expires 6/30/2000
315855.1
XXXXX & TANG DISTRIBUTORS, INC.
Depositor
By: /s/ XXXXX X. XXXXXXX
--------------------------------
Executive Vice President
STATE OF NEW YORK )
: ss:
COUNTY OF NEW YORK )
On this 14th day of September, 1998, before me personally appeared Xxxxx
X. XxXxxxx, to me known, who being by me duly sworn, said that he is Executive
Vice President of the Depositor, one of the corporations described in and which
executed the foregoing instrument, and that he signed his name thereto by
authority of the Board of Directors of said corporation.
/s/ XXXXXX XXXXXXXX
---------------------------------------
Notary Public
XXXXXX XXXXXXXX
NOTARY PUBLIC, State of New York
No. 00-0000000
Qualified in New York County
Term Expires 8/31/00
