Exhibit 99.1.1.1
EMPIRE STATE
MUNICIPAL EXEMPT TRUST
GUARANTEED SERIES 182
(and Subsequent Series)
================================================================================
TRUST INDENTURE AND AGREEMENT
Among
GLICKENHAUS & CO.
as Depositor
THE BANK OF NEW YORK
as Trustee
and
CAPELOGIC, INC.
as Evaluator
================================================================================
Dated: November 9, 2005
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS, CERTIFICATE...................................................................2
Section 1.1 Definitions.......................................................................2
Section 1.2 Form of Certificate...............................................................4
ARTICLE II DEPOSIT OF BONDS, ACCEPTANCE OF TRUST, FORM AND
ISSUANCE OF CERTIFICATES, INSURANCE.......................................................14
Section 2.1 Deposit of Bonds.................................................................14
Section 2.2 Acceptance of Trust..............................................................14
Section 2.3 Issue of Certificates............................................................14
Section 2.4 Form of Certificates.............................................................14
Section 2.5 Insured Bonds....................................................................14
ARTICLE III ADMINISTRATION OF FUND....................................................................15
Section 3.1 Initial Cost.....................................................................15
Section 3.2 Update Cost .....................................................................15
Section 3.3 Interest Account.................................................................15
Section 3.4 Principal Account................................................................16
Section 3.5 Reserve Account..................................................................16
Section 3.6 Distribution.....................................................................16
Section 3.7 Distribution Statements..........................................................20
Section 3.8 Sale of Bonds....................................................................21
Section 3.9 Refunding Bonds..................................................................22
Section 3.10 Bond Counsel.....................................................................23
Section 3.11 Notice and Sale by Trustee.......................................................23
Section 3.12 Trustee not to Amortize..........................................................23
Section 3.13 Liability of Depositor...........................................................23
Section 3.14 Notice to Depositor..............................................................23
Section 3.15 Limited Replacement of Special Bonds.............................................24
Section 3.16 Grantor Trust Status ............................................................25
ARTICLE IV EVALUATION OF BONDS; EVALUATOR............................................................25
Section 4.1 Evaluation by Evaluator..........................................................25
Section 4.2 Tax Reports......................................................................26
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TABLE OF CONTENTS
(continued)
Page
Section 4.3 Evaluator's Compensation.........................................................26
Section 4.4 Liability of Evaluator...........................................................26
Section 4.5 Successor Evaluator..............................................................26
ARTICLE V TRUST FUND EVALUATION, REDEMPTION, PURCHASE
TRANSFER, INTERCHANGE OR REPLACEMENT OF
CERTIFICATES..............................................................................27
Section 5.1 Trust Fund Evaluation............................................................27
Section 5.2 Redemption by Trustee; Purchases by Depositor....................................28
Section 5.3 Transfer or Interchange of Certificates..........................................30
Section 5.4 Certificates Mutilated, Destroyed, Stolen or Lost................................30
ARTICLE VI TRUSTEE...................................................................................31
Section 6.1 General Definition of Trustee's Liabilities, Rights and Duties...................31
Section 6.2 Books, Records and Reports.......................................................33
Section 6.3 Indenture and List of Bonds on File..............................................34
Section 6.4 Compensation.....................................................................34
Section 6.5 Removal and Resignation of Trustee; Successor....................................34
Section 6.6 Qualifications of Trustee........................................................36
ARTICLE VII RIGHTS OF CERTIFICATEHOLDERS..............................................................36
Section 7.1 Beneficiaries of Trust...........................................................36
Section 7.2 Rights, Terms and Conditions.....................................................36
ARTICLE VIII DEPOSITOR.................................................................................37
Section 8.1 Liabilities......................................................................37
Section 8.2 Discharge........................................................................37
Section 8.3 Successors.......................................................................37
Section 8.4 Resignation......................................................................37
Section 8.5 Exclusions from Liability........................................................38
Section 8.6 Annual Fee.......................................................................38
ARTICLE IX ADDITIONAL COVENANTS; MISCELLANEOUS PROVISIONS............................................39
Section 9.1 Amendments.......................................................................39
Section 9.2 Termination......................................................................39
Section 9.3 Construction.....................................................................41
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TABLE OF CONTENTS
(continued)
Page
Section 9.4 Registration of Units and Trust Fund.............................................41
Section 9.5 Written Notice...................................................................41
Section 9.6 Severability.....................................................................41
Section 9.7 Dissolution of Depositor not to Terminate........................................42
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This "Table of Contents" does not constitute part of the Indenture.
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TRUST INDENTURE AND AGREEMENT DATED November 9, 2005
AMONG GLICKENHAUS & CO. as Depositor,
THE BANK OF NEW YORK, as Trustee,
and
CAPELOGIC, INC., as Evaluator
W I T N E S S E T H that:
WHEREAS, it is desired to expand the market for certain
obligations the interest income on which is exempt from federal income tax
pursuant to the applicable provisions of the United States Internal Revenue
Code, of 1986, as amended, or pursuant to other provisions of law, some of which
obligations, as individual issues or parts thereof, might be unavailable or
impracticable as investments to certain individual investors, and to provide
diversification to such investors, particularly those with limited investment
capital; and
WHEREAS, the Depositor desires to provide for the collection
and distribution of the principal of and interest on such obligations by the
Trustee to such persons as shall purchase an interest therein, as hereinafter
provided; and
WHEREAS, the Depositor, concurrently with the execution and
delivery hereof, is establishing Empire State Municipal Exempt Trust, Guaranteed
Series 182, wherein certain interest bearing obligations will be deposited by
the Depositor, to be held by the Trustee in trust for the use and benefit of the
registered holders of certificates of ownership to be issued as hereinafter
provided. The parties hereto are entering into this Indenture for the purpose of
establishing certain of the terms, covenants and conditions of Empire State
Municipal Exempt Trust, Guaranteed Series 182 and of each additional series of
such Trust which may be established from time to time hereafter. For Empire
State Municipal Exempt Trust, Guaranteed Series 182 and each subsequent series
of Empire State Municipal Exempt Trust (as to which this Indenture is to be
applicable) the parties hereto shall execute a separate Reference Trust
Agreement incorporating by reference this Indenture and effecting any amendment,
supplement or variation from or to this Indenture with respect to the related
series and specifying for that series (i) the Bonds deposited in trust and the
number of Units delivered by the Trustee in exchange for the Bonds pursuant to
Section 2.3; (ii) the initial fractional undivided interest represented by each
Unit; (iii) the First General Record Date; (iv) the First Distribution Date; (v)
the First Settlement Date; (vi) the Evaluator's fee; (vii) the Trustee's fee and
(viii) any other change or addition contemplated or permitted by this Indenture.
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements herein contained, the Depositor, the Trustee and the Evaluator
agree as follows:
ARTICLE I
DEFINITIONS, CERTIFICATE
SECTION 1.1 Definitions. Whenever used in this Indenture, the
following words and phrases, unless the context clearly indicates otherwise,
shall have the following meanings:
(1) "Bonds" shall mean such of the tax-exempt obligations,
including delivery statements, relating to "when-issued" and/or "regular way"
contracts, if any, for the purchase of certain bonds and receipts which will
entitle the Trustee to receive such tax-exempt bonds, and certified checks,
cash, or an irrevocable letter of credit or a combination thereof in the amount
required for such purchase, deposited in irrevocable trust and listed in
Schedule A, and any obligations received in exchange, substitution or
replacement for such obligations pursuant to Sections 3.9 and 3.15 hereof, as
may from time to time continue to be held as a part of the Trust Fund.
(2) "Business Day" shall mean any day other than a Saturday or
Sunday, or a legal holiday or a day on which banking institutions are authorized
by law to close in the City of New York, or a day on which the New York Stock
Exchange, Inc. is closed.
(3) "Certificate" shall mean any one of the certificates
substantially in the form hereinafter recited executed by the Trustee and the
Depositor evidencing ownership of a fractional undivided interest in the Trust
Fund.
(4) "Certificateholder" shall mean the registered holder of
any Certificate as recorded on the books of the Trustee, 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 trust created by this Indenture to the
extent of his pro rata share thereof.
(5) "Contract Bonds" shall mean Bonds which are to be acquired
by the Trust Fund pursuant to contracts, including (i) Bonds listed in Schedule
A and (ii) Bonds which the Depositor has contracted to purchase for the Trust
Fund pursuant to Section 3.15 hereof.
(6) "Date of Deposit" shall mean the date of the applicable
Reference Trust Agreement.
(7) "Depositor" shall mean Glickenhaus & Co. and its successor
in interest, or any successor depositor or depositors as hereinafter provided
for.
(8) "Evaluation Time" shall mean 12:00 p.m. Eastern Time on
the Business Day prior to the Date of Deposit and 2:00 p.m. Eastern time
thereafter."
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(9) "Evaluator" shall mean CapeLogic, Inc. or any corporation
into which such firm may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which such firm shall
be a party, or any firm succeeding to all or substantially all of the business
of such firm as an evaluator of tax-exempt bonds, or any successor evaluator as
hereinafter provided for.
(10) "First Distribution Date" shall mean the date specified
in Part II of the applicable Reference Trust Agreement.
(11) "First General Record Date" shall mean the date specified
in Part II of the applicable Reference Trust Agreement.
(12) "First Settlement Date" shall mean the date as specified
in Part II of the applicable Reference Trust Agreement.
(13) "Indenture" shall mean this Indenture and Agreement as
originally executed or, if amended by an applicable Reference Trust Agreement or
as hereinafter provided, as so amended.
(14) "Monthly Computation Date" shall mean the fifteenth day
of each month commencing with the first such day of the month after the First
General Record Date.
(15) "Monthly Distribution Date" shall mean the first day of
each month following a Monthly Computation Date.
(16) "Prospectus" shall mean the prospectus included in the
registration statement, as amended, on Form S-6 under the Securities Act of
1933, as amended, relating to the Trust on file with the Securities and Exchange
Commission at the time such registration statement, as amended, becomes
effective, except that if the prospectus filed pursuant to Rule 497(b) under the
Securities Act of 1933, as amended, differs from the prospectus on file at the
time such registration statement, as amended, becomes effective, the term
Prospectus shall refer to the Rule 497(b) prospectus from and after the time it
is mailed or otherwise delivered to the Securities and Exchange Commission for
filing.
(17) "Reference Trust Agreement" shall mean that Reference
Trust Agreement executed by the parties hereto for a particular series of Empire
State Municipal Exempt Trust into which the terms of this Indenture are
incorporated.
(18) "Reserve Account" shall mean the account established
pursuant to Section 3.5 hereof.
(19) "Schedule A" shall mean the Schedule A to the applicable
Reference Trust Agreement for this or any future series of Empire State
Municipal Exempt Trust established pursuant to this Indenture.
(20) "Semi-Annual Computation Date" shall mean the fifteenth
day of May and November commencing with the first such day after the First
General Record Date.
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(21) "Semi-Annual Distribution Date" shall mean the first day
of June and December following a Semi-Annual Computation Date.
(22) "Trust Fund" shall mean the trust created by this
Indenture and the applicable Reference Trust Agreement, and which shall consist
of the Bonds held pursuant and subject to this Indenture together with all
undistributed interest received or accrued thereof, and any undistributed cash
realized from the sale, redemption, liquidation, or maturity thereof. Such
amounts as may be on deposit in the Reserve Account hereinafter established
shall be excluded from the Trust Fund.
(23) "Trustee" shall mean The Bank of New York or any
successor trustee as hereinafter provided for.
(24) "Unit" shall mean the fractional undivided interest in
and ownership of the Trust Fund set forth in Part II of the applicable Reference
Trust Agreement the denominator of which shall be decreased by the number of any
such Units redeemed as provided in Section 5.2.
(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.
SECTION 1.2 Form of Certificate. The form of Certificate
evidencing ownership of fractional undivided interests in the Trust established
hereunder shall be substantially as follows:
[FACE]
Plan of Distribution
No. _______________ ______Units
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CERTIFICATE OF OWNERSHIP
--evidencing--
An Undivided Interest
in the
EMPIRE STATE
MUNICIPAL EXEMPT TRUST
CUSIP [ ]
This is to certify that _______________________ is the owner
and registered holder of this Certificate evidencing the ownership of the number
of units specified on the face hereof of undivided interest in the EMPIRE STATE
MUNICIPAL EXEMPT TRUST of the series specified on the face hereof (hereinafter
called the "Fund") created by the Trust Indenture and Agreement (hereinafter
called the "Indenture") among Glickenhaus & Co. (hereinafter called the
"Depositor"), The Bank of New York (hereinafter called the "Trustee") and
CapeLogic, Inc. (hereinafter called the "Evaluator"). The Fund consists of (1)
such of the tax-exempt obligations deposited in trust and listed in Schedule A
of the Indenture and any other obligations that may be deposited in the Fund in
exchange or substitution therefor by reason of replacement of failed contracts
or refunding of the obligations initially deposited in accordance with the
Indenture, as may from time to time continue to be held as part of the Fund, (2)
such cash amounts as from time to time may be held in the Interest Account and
the Principal Account maintained under the Indenture in the manner described on
the reverse side hereof and (3) units of previously-issued Series of the Fund.
This Certificate shall not become valid or binding for any
purpose until properly executed by the Trustee under the Indenture.
5
IN WITNESS WHEREOF, the Depositor has caused this Certificate
to be executed in facsimile by a General Partner thereof and The Bank of New
York, as Trustee, has caused this Certificate to be executed in its corporate
name by an authorized officer.
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Date:
-------------------------------
GLICKENHAUS & CO., Depositor
By:
-------------------------------------
General Partner
THE BANK OF NEW YORK, Trustee
By:
-------------------------------------
Authorized Officer
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[REVERSE]
EMPIRE STATE MUNICIPAL EXEMPT TRUST
At any given time this Certificate shall represent a
fractional undivided interest in the Fund, the numerator of which fraction shall
be the number of units set forth on the face hereof and the denominator of which
shall be the total number of units of fractional undivided interest represented
by all Certificates of the Fund which are outstanding at such time.
The Depositor hereby grants and conveys all of its right,
title and interest in and to the Fund to the extent of the fractional undivided
interest represented hereby to the registered holder of this Certificate subject
to and in pursuance of the Indenture, all the terms, conditions and covenants of
which are incorporated herein as if fully set forth at length.
The registered holder of this Certificate is entitled at any
time upon tender of this Certificate to the Trustee at its corporate trust
office in the City of New York, and upon payment of any tax or other
governmental charges, to receive, on the seventh calendar day following the day
on which such tender is made, or, if such calendar day is not a business day, on
the first business day prior to such calendar day, an amount in cash equal to
the evaluation of the fractional undivided interest in the Fund evidenced by
this Certificate, upon the basis provided for in the Indenture. The right of
redemption may be suspended and the date of payment may be postponed for any
period during which the New York Stock Exchange, Inc. is closed or trading on
that Exchange is restricted, for any period during which an emergency exists so
that disposal of the obligations held in the Fund is not reasonably practicable
or it is not reasonably practicable to determine fairly the value of such
obligations, or for such other periods as the Securities and Exchange Commission
may by order permit.
Interest received by the Trustee as part of the Fund
(including interest accrued and unpaid prior to the day of deposit of any
obligation in the Fund and that part of the proceeds of the sale, liquidation,
redemption or maturity of or any insurance on any such obligation which
represents accrued interest) shall be credited by the Trustee to the Interest
Account. The fractional undivided interest represented by this Certificate in
the balance in the Interest Account (after the deductions referred to below)
shall be computed as of the First Settlement Date, as defined in the Indenture,
and paid to the Depositor on such date. The next computation shall be made as of
the First General Record Date, as defined in the Indenture, and thereafter as of
May 15 and November 15 of each year commencing with the first such day following
the First General Record Date.
All moneys (other than interest) received by the Trustee as
part of the Fund (including amounts received from the sale, liquidation,
redemption or maturity of or any insurance on any obligations held in the Fund)
shall be credited by the Trustee to a separate Principal Account. The fractional
undivided interest represented by this Certificate in the cash balance in the
Principal Account (after the deductions referred to below) shall be computed as
of the First General Record Date and thereafter as of May 15 and November 15 of
each year commencing with the first such day following the First General Record
Date. The second distribution of funds from the Interest Account shall be made
on the First Distribution Date as provided in the Indenture and, thereafter, an
amount in cash equal to the sum of said fractional
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undivided interests in the Interest Account and Principal Account, computed as
set forth above, shall be distributed on the first day of June and December,
respectively, or within a reasonable period of time thereafter to the registered
holder of this Certificate at the close of business on the fifteenth day of the
month next preceding the date on which such distribution is made. The Trustee
shall not be required to make a distribution from the Principal Account unless
the cash balance on deposit therein available for such distribution shall be
sufficient to distribute at least $1.00 per unit.
Distributions from the Interest and Principal Accounts shall
be made by mail at the post office address of the holder hereof appearing in the
registration books of the Trustee.
From time to time deductions shall be made from the Interest
Account and Principal Account, as more fully set forth in the Indenture, for
redemptions, compensation of the Trustee and Evaluator, reimbursement of certain
expenses incurred by or on behalf of the Trustee, certain legal and auditing
expenses and payment of, or the establishment of a reserve for, applicable
taxes, if any.
Within a reasonable period of time after the end of each
calendar year the Trustee shall furnish to the registered holder of this
Certificate a statement setting forth, among other things, the amounts received
and deductions therefrom and the amounts distributed during the preceding year
in respect of interest on, and sales, redemptions or maturities of obligations
held in the Fund.
This Certificate shall be transferable by the registered
holder hereof by presentation and surrender hereof at the corporate trust office
of the Trustee properly endorsed and accompanied by a written instrument or
instruments of transfer in form satisfactory to the Trustee and executed by the
registered holder hereof or his authorized attorney. Certificates of the Fund
are interchangeable for one or more certificates in an equal aggregate number of
units of undivided interest at the corporate trust office of the Trustee, in
denominations of a single unit of undivided interest or any multiple thereof.
The holder hereof may be required to pay a charge of $2.00 per
Certificate issued in connection with the transfer or interchange of this
Certificate and any tax or other governmental charge that may be imposed in
connection with the transfer, interchange or other surrender of this
Certificate.
The holder of this Certificate, by virtue of the acceptance
hereof, assents to and shall be bound by the terms of the Indenture, a copy of
which is on file and available for inspection at the corporate trust office of
the Trustee, to which reference is made for all the terms, conditions and
covenants thereof.
The Trustee may deem and treat the person in whose name this
Certificate is registered upon the books of the Trustee as the owner hereof for
all purposes and the Trustee shall not be affected by any notice to the
contrary.
The Indenture, and the trust created thereby, shall terminate
upon the maturity, redemption, sale or other disposition of the last obligation
held thereunder, provided, however, that in no event shall the Indenture and the
trust continue beyond the end of the calendar year
9
immediately preceding the fiftieth anniversary of the date of the Indenture. The
Indenture also provides that the trust may be terminated at any time by the
written consent of one hundred percent of the Certificateholders and under
certain circumstances which include a decrease in the value of the Fund to less
than $2,000,000 or 20% of the value of the Fund as of the date of deposit
therein by the Depositor, whichever is lower. Upon any termination the Trustee
shall fully liquidate the obligations then held, if any, and distribute pro rata
the funds then held in the trust upon surrender of the Certificates, all in the
manner provided in the Indenture. Upon termination, the Trustee shall be under
no further obligation with respect to the Fund except to hold the funds in trust
without interest until distribution as aforesaid and shall have no duty upon any
such termination to communicate with the holder hereof other than by mail at the
address of such holder appearing on the registration books of the Trustee.
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STATEMENT REGARDING DISTRIBUTIONS
On the face of this Certificate it is indicated whether the
registered holder hereof has elected to receive distributions from the Interest
Account monthly or semi-annually.
The Certificate by its terms provides that distributions from
the Interest Account shall be computed as of the First Settlement Date and paid
to the Depositor on such date. The next computation shall be made as of the
First General Record Date and an amount in cash equal to the share of the
Interest Account represented by this Certificate shall be distributed on the
first day of the month following the month in which the First General Record
Date occurs, or within a reasonable period of time thereafter, to or upon the
order of the registered holder of this Certificate at the close of business on
the First General Record Date. Thereafter distributions will be made as of the
15th day of May and November of each year, commencing with the first such day
following the First General Record Date and subsequent to the date of this
Certificate, and an amount in cash equal to the share of the Interest Account
represented by this Certificate will be distributed on the 1st day of June and
December, respectively, or within a reasonable period of time thereafter, to or
upon the order of the registered holder of this Certificate at the close of
business on the 15th day of the month next preceding the date on which the
distribution is made.
If the registered holder hereof has elected the monthly
option, then he agrees that, in lieu of the distributions provided by this
Certificate, the fractional undivided interest represented by this Certificate
in the balance of the Interest Account shall be computed monthly as indicated on
the face hereof. All Certificateholders of record, however, regardless of the
plan of distribution selected, will receive the distribution to be made on the
First Distribution Date and thereafter distributions will be made monthly or
semi-annually, depending upon the plan of distribution chosen by the holder
hereof.
If monthly distributions have been selected, the fractional
undivided interest represented by this Certificate in the balance in the
Interest Account, after the First Distribution Date and after the deductions
referred to in the Certificate, will be computed as of the 15th day of each
month of each year, commencing with the first such day after the First General
Record Date, and subsequent to the date of this Certificate, and an amount in
cash as thus computed distributed to or upon the order of the holder at such
date of computation on or shortly after the 1st day of each subsequent month.
The plan of distribution chosen by the registered holder
hereof may be changed by written notice to the Trustee not later than May 15 in
any calendar year by surrender to the Trustee of this Certificate.
A plan of distribution shall continue in effect until changed as herein
provided. A change in a plan of distribution may only be made as indicated
herein and will be effective as of May 16 for the ensuing twelve months.
In the event the amount on deposit in the Interest Account is
not sufficient for the payment of the amount of interest to be distributed to
Certificateholders participating in a distribution, the Trustee shall advance
its own funds and cause to be deposited in and credited to the Interest Account
such amounts as may be required to permit payment of the distribution to be made
and shall be entitled to be reimbursed, without interest, out of interest
received by the Fund
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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 that
required for the next ensuing distribution of interest. Distributions to
Certificateholders who are participating in one of the optional plans for
distributions of interest shall not be affected because of advancements by the
Trustee for the purpose of equalizing distributions to Certificateholders
participating in a different plan.
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FORM OF ASSIGNMENT
For Value Received _____________________________ hereby sells,
assigns and transfers unto
[ ] _________________________________________________________
Please Insert Social Security
or Other Identifying Number of Assignee
________________________________________________________________________________
the within Certificate and does hereby irrevocably constitute and appoint
___________________ attorney, to transfer the within Certificate on the books of
the Trustee, with full power of substitution in the premises.
Date:
_____________________________________
Signature Guarantee
_____________________________________
______________________________
NOTICE:The signature to this
assignment must correspond
with the name as written upon
the face of the Certificate in
every particular, without any
alteration or enlargement
whatsoever.
______________________________
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ARTICLE II
DEPOSIT OF BONDS, ACCEPTANCE OF TRUST,
FORM AND ISSUANCE OF CERTIFICATES,
INSURANCE
SECTION 2.1 Deposit of Bonds. The Depositor, concurrently with
the execution and delivery hereof, has deposited with, or otherwise transferred
to, the Trustee in trust the Bonds listed in Schedule A in bearer form or duly
endorsed in blank or accompanied by all necessary instruments of assignment and
transfer in proper form to be held, administered and applied by the Trustee as
herein provided. The Depositor shall deliver the Bonds listed on said Schedule A
to the Trustee which were not actually delivered concurrently with the execution
and delivery of the Indenture within 90 days after said execution and delivery,
or if the contract to buy any Bond between the Depositor and the seller of such
Bond is terminated by such seller for any reason beyond the control of the
Depositor, the Depositor shall forthwith take the remedial action specified in
Section 3.15.
SECTION 2.2 Acceptance of Trust. The Trustee hereby accepts
the trust herein created for the use and benefit of the Certificateholders,
subject to the terms and conditions of this Indenture.
SECTION 2.3 Issue of Certificates. The Trustee hereby
acknowledges receipt of the deposit referred to in Section 2.1, and
simultaneously with the receipt of said deposit, has executed Certificates
substantially in the form above recited representing the ownership of the
aggregate number of Units set forth in Part II of the applicable Reference Trust
Agreement. Pending receipt of evidence satisfactory to it of the registration of
the Certificates under the Securities Act of 1933, as amended, the Certificates
will be held by the Trustee for the account of the Depositor.
SECTION 2.4 Form of Certificates. Each Certificate referred to
in Section 2.3 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 manually by an authorized officer of the
Trustee and in facsimile by a General Partner of the Depositor and dated the
date of execution and delivery by the Trustee. Certificates bearing the manual
or facsimile signatures of individuals who were at any time the proper officers
of the Depositor and Trustee shall bind the Depositor and Trustee,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates.
SECTION 2.5 Insured Bonds. As of the Date of Deposit, all of
the Bonds in the Trust are Insured Bonds which are insured by AAA-rated
insurance companies designated for each such Bond in the prospectus for the
Trust that guarantee the scheduled payments of principal and interest on the
bonds when due, as long as they are outstanding (but not the value of the bonds
before they mature). As a result, all of the Bonds in the Trust will be rated
AAA by Standard & Poor's or Fitch Ratings or Aaa by Moody's as of the Date of
Deposit.
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ARTICLE III
ADMINISTRATION OF FUND
SECTION 3.1 Initial Cost. Subject to reimbursement by
Unitholders to the Depositor of the estimated per-Unit amount set forth in the
Prospectus, the cost of organizing the Trust and sale of the Trust Units shall
be borne by the Depositor, provided, however, that the liability on the part of
the Depositor under this section shall not include any fees or other expenses
incurred in connection with the administration of the Trust subsequent to the
deposit referred to in Section 2.1. As used herein, the Depositor's reimbursable
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 indenture, and other
documents relating to the Trust, SEC and state blue sky registration fees, the
cost 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.
SECTION 3.2 Update Cost. To the extent permitted by an opinion
of independent counsel or in reliance on No-Action letters issued by the staff
of the Securities and Exchange Commission, the Trust shall bear the expenses
associated with updating the Trusts' registration statements and maintaining
registration or qualification of the Units and/or a Trust under federal or state
securities laws subsequent to initial registration. Such expenses shall include
legal fees, accounting fees, typesetting fees, electronic filing expenses and
regulatory filing fees. However, all direct distribution expenses of the Trusts
(including the costs of maintaining the secondary market for the trusts), such
as printing and distributing prospectuses, and preparing, printing and
distributing any advertisements or sales literature will be paid at no cost to
the Trusts. Any payments received by the Depositor reimbursing it for payments
made to update Trusts' registration statements will not exceed the costs
incurred by the Depositor. The Trusts shall further incur expenses associated
with all taxes and other governmental charges imposed upon the Bonds or any part
of a Trust (to the knowledge of the Depositor no such taxes or charges are being
levied or made or contemplated). The above expenses, including the Trustee's
fees, when paid by or owing to the Trustee, are secured by a lien on the Trust.
In addition, the Trustee is empowered to sell Bonds in order to make funds
available to pay all expenses.
SECTION 3.3 Interest Account. The Trustee shall collect the
interest on the Bonds as it becomes payable (including all interest accrued but
unpaid prior to the date of deposit of the Bonds in trust and including that
part of the proceeds of the sale, liquidation, redemption or maturity of any
Bonds or insurance on any Bonds which represents accrued interest thereon and
including all moneys representing penalties for the failure to make timely
payments on the Bonds, or as liquidated damages for default or breach of any
conditions or term of the Bonds or of any instrument underlying such Bonds) and
credit such interest to a separate account to be known as the "Interest
Account."
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SECTION 3.4 Principal Account. (a) The Bonds and all moneys
(except moneys held by the Trustee pursuant to subsection (b) hereof), other
than amounts credited to the Interest Account or the Reserve Account, received
by the Trustee in respect of the Bonds shall be credited to a separate account
to be known as the "Principal Account."
(b) Moneys and/or irrevocable letters of credit required to
purchase Contract Bonds 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 Bond and have not given the Failed Contract Notice
(as defined in Section 3.15) at which time the moneys and/or letters of credit
attributable to the Contract Bond 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 they have purchased or entered
into a contract to purchase a New Bond (as defined in Section 3.15), the Trustee
shall not credit such moneys and/or letters of credit to the Principal Account
unless the New Bond shall also have failed or is not delivered by the Depositor
within two business days after the settlement date of such New Bond, 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, and/or cause the Depositor to deposit in the Principal
Account, the difference, if any, between the purchase price of the failed
Contract Bond and the purchase price of the New Bond, together with any sales
charge and accrued interest applicable to such difference and distribute such
moneys to the Certificateholders pursuant to Section 3.6.
SECTION 3.5 Reserve Account. From time to time the Trustee
shall withdraw from the cash on deposit in the Interest Account or the Principal
Account 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 the Trust Fund. Such amounts so withdrawn shall be
credited to a separate account which shall be known as the "Reserve Account."
The Trustee shall not be required to distribute to the Certificateholders any of
the amount 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, or if the Trust has been
terminated or shall be in the process of termination, the Trustee shall
distribute to each Certificateholder such holder's interest in the Reserve
Account in accordance with Section 9.2.
SECTION 3.6 Distribution. The Trustee, as of the First
Settlement Date, shall advance out of its own funds and cause to be deposited in
and credited to the Interest Account such amount as may be required to permit
payment of the amount of interest accrued on the Bonds in the Trust through such
date (less the amount which the Trustee is entitled to receive at such time
pursuant to Section 6.4, the amount which the Evaluator is entitled to receive
at such time pursuant to Section 4.3, the amount which the Depositor is entitled
to receive at such time pursuant to Section 8.6, and shall pay to the
Certificateholders then of record, namely the Depositor, such amount. The
Trustee shall be entitled to be reimbursed, without interest, for such
advancement, and such reimbursement shall be made from the interest received by
the Trust. Subsequent distributions shall be made as hereinafter provided.
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The first distribution shall be made on the First Distribution
Date to all holders of record as of the First General Record Date. Thereafter,
as of the Monthly Computation Date the Trustee shall:
(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
Section 6.4 or pursuant to this Section 3.6;
(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
Evaluator the amount that it is at the time entitled to receive pursuant to
Section 4.3;
(c) 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 8.6; and
(d) deduct from the Interest Account, or, to the extent funds
are not available in such Account, from the Principal Account, and pay to bond
counsel and auditors, as hereinafter provided for, an amount equal to unpaid
fees and expenses, if any, of such bond counsel or auditors as certified to by
the Depositor.
Any amount withdrawn from the Principal Account in order to
satisfy requirements which, pursuant to the terms of this Indenture, are first
to be satisfied out of the Interest Account to the extent funds are available
therein shall be reimbursed to the Principal Account when sufficient funds are
next available in the Interest Account.
On the Semi-Annual Distribution Date, or within a reasonable
period of time thereafter, the Trustee shall distribute by mail to each
Certificateholder of record at the close of business on the preceding
Semi-Annual Computation Date at his post office address such holder's pro rata
share of the balance of the Interest Account, plus such holder's pro rata share
of the cash balance of the Principal Account, each computed as of such
Computation Date. The Trustee shall not be required to make a distribution from
the Principal Account unless the cash balance on deposit therein available for
distribution shall be sufficient to distribute at least $1.00 per Unit.
In the event that (i) the amount on deposit in the Interest
Account 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 foregoing
computation, the Trustee shall advance out of its own funds and cause to be
deposited in and credited to the Interest Account such amount as may be required
to permit payment of the interest distribution to be made on such Semi-Annual
Distribution Date or (ii) in order to acquire any Bond for the Trust Fund, it is
necessary to pay on the settlement date for delivery of such Bond an amount
covering accrued interest on such Bond that exceeds the amount of interest
accrued on such Bond to the date on which the Certificateholder settles on the
purchase of his Units, the Trustee shall advance out of its own funds any
amounts necessary to cover such excess, then in either event, the Trustee shall
be entitled to be reimbursed, without interest, out of interest received by the
Trust Fund on the first Semi-Annual Computation Date following the date of such
advance on which such
17
reimbursement may be made without reducing the amount of the Interest Account to
an amount less than that required of the next ensuing semi-annual or monthly
interest distribution.
In lieu of the semi-annual distributions of interest set forth
above, a Certificateholder may elect to receive payments from the Interest
Account, represented by the Units in a Certificate, monthly. The first
distribution to Certificateholders as of the First General Record Date, however,
shall be made to or upon the order of all holders of Certificates regardless of
whether they have chosen to receive subsequent distributions on a different
basis.
Certificateholders desiring to receive monthly distributions
and who purchase their Certificates prior to the Record Date for the first
distribution may elect at the time of purchase to receive distributions on a
monthly basis by notice to the Trustee. Those indicating no preference will be
deemed to have elected to receive semi-annual distributions. Such notice shall
be effective with respect to subsequent distributions until changed by further
notice to the Trustee. Certificateholders have the option to contact the Trustee
prior to May 15 of each year if the Certificateholder desires to change his plan
of distribution, and the change will become effective on May 16 of such year for
the ensuing twelve months.
For monthly distributions the share of the balance in the
Interest Account to be distributed to or upon the order of a Certificateholder
who has elected to receive monthly distributions, after the First Distribution
Date, shall be computed as of the Monthly Computation Date commencing with the
first such day subsequent to the First General Record Date and distribution made
as provided herein on or shortly after the Monthly Distribution Date to the
Certificateholder of record on the Monthly Computation Date. Such computation
shall be made on the basis of one-twelfth of the estimated annual interest
income to the Fund for the ensuing twelve months for the account of
Certificateholders who have elected to receive monthly distributions, after
deduction of the estimated costs and expenses to be incurred on behalf of such
Certificateholders during the twelve-month period for which such interest income
has been estimated.
If on any Monthly Computation Date the pro rata share of the
distributable cash balance of the Principal Account exceeds $10.00 per Unit then
outstanding, the Trustee shall, to the extent permitted by the Investment
Company Act of 1940 and the rules and regulations thereunder or an exemptive
order issued by the Securities and Exchange Commission thereunder, on the next
succeeding Monthly Distribution Date distribute by mail to each
certificateholder of record as of the close of business on the immediately
preceding Monthly Computation Date at his or her address appearing on the
registration books of the Trustee, such Certificateholder's pro rata share of
the balance of the Principal Account.
To the extent practicable, the Trustee shall allocate the
expenses of the Fund among Units, giving effect to differences in administrative
and operational cost among those who have chosen to receive distributions
semi-annually or monthly.
In the event the amount on deposit in the Interest Account for
a monthly distribution is not sufficient for the payment of the amount of
interest to be distributed to Certificateholders 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 the Interest
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Account such amounts as may be required to permit payment of the monthly
interest distribution to be made as aforesaid and shall be entitled to be
reimbursed, without interest, out of interest received by the Fund 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 the next ensuing distribution of interest. Distributions to
Certificateholders 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 Certificateholders
participating in a different plan.
If the Depositor (i) fails to replace any Special Bond (as
defined in Section 3.15) or (ii) is unable or fails to enter into any contract
for the purchase of any New Bond in accordance with Section 3.15, the Trustee
shall distribute to all Certificateholders, as of the expiration of the Purchase
Period (as defined in Section 3.15), the principal, accrued interest (determined
at the coupon rate of the Special Bond from the Date of Deposit to the
expiration of the Purchase Period) and the sales charge attributable to such
Special Bonds at the next Monthly Distribution Date which is more than thirty
days after the expiration of the Purchase Period.
If any contract for a New Bond in replacement of a Special
Bond shall fail, the Trustee shall distribute the principal, accrued interest
and sales charge attributable to the Special Bond to the Certificateholders at
the next Monthly Payment Date which is more than thirty days after the date on
which the contract in respect of such New Bond failed.
If, at the end of the Purchase Period, less than all moneys
attributable to a failed Special Bond have been applied or allocated by the
Trustee pursuant to a contract to purchase New Bonds, the Trustee shall
distribute the remaining moneys to Certificateholders at the next Monthly
Payment Date which is more than thirty days after the end of the Purchase
Period.
The amounts to be so distributed to each Certificateholder
shall be that pro rata share of the cash balance of the Interest and Principal
Accounts, computed as set forth above, as shall be represented by the Units
evidenced by the outstanding Certificate or Certificates registered in the name
of such Certificateholder.
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 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 Semi-Annual or Monthly Computation Date shall be conclusively
entitled to such distribution, and no liability shall attach to the Trustee by
reason of payment to any such registered Certificateholder of record. Nothing
herein shall be construed to prevent the payment of amounts from the Interest
Account and the Principal Account to individual Certificateholders by means of
one check, draft or other proper instrument, provided that the appropriate
statement of such distribution shall be furnished therein as provided in Section
3.7 hereof.
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SECTION 3.7 Distribution Statements. With each distribution
from the Interest or Principal Accounts the Trustee shall set forth, either in
the instrument by means 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.
In the event that the issuer of any of the Bonds 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 paid as a distribution of interest
the Trustee shall, with the first such distribution to each Certificateholder
following such failure, set forth in an accompanying statement (a) the name of
the issuer and the Bond, (b) the amount of the reduction in the distribution per
Unit resulting from such failure, (c) the percentage of the aggregate principal
amount of Bonds which such Bond represents, and (d) to the extent then
determined, information regarding any disposition or legal action with respect
to such Bonds.
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 Certificateholder a statement setting forth,
with respect to such calendar year:
(A) as to the Interest Account:
(1) the amount of interest received on the Bonds,
(2) the amounts paid in connection with purchases of New
Bonds pursuant to Section 3.15 and for redemption
pursuant to Section 5.2,
(3) the deduction for payment of applicable taxes,
compensation of the Evaluator, fees and expenses of
the Trustee and bond counsel and the annual fee of
the Depositor for portfolio supervisory services, 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) the dates of the sale, maturity, liquidation or
redemption of any of the Bonds and the net proceeds
received therefrom, excluding any portion thereof
credited to the Interest Account,
(2) the amounts paid for purchases of New Bonds pursuant
to Section 3.15 and for redemptions pursuant to
Section 5.2,
(3) the deductions for payment of applicable taxes,
compensation of the Evaluator, fees and expenses of
the Trustee and bond counsel and the annual fee of
the Depositor for portfolio supervisory services, and
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(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; and
(C) the following information:
(1) a list of Bonds disposed of or acquired during such
calendar year and a list of the Bonds 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 (as defined in Section 5.1) based on
the last Trust Fund evaluation made during such
calendar year; and
(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.
SECTION 3.8 Sale of Bonds. In order to maintain the sound
investment character of the Trust Fund, the Depositor may direct the Trustee to
sell Bonds, provided the Depositor deems such sale to be in the best interest of
Certificateholders in accordance with Section 2.5 hereof, 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 Bonds 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 Bonds, attacking the constitutionality of any enabling legislation or
alleging and seeking to have judicially determined the illegality of the issuing
body or the constitution of its governing body or officers, the illegality,
irregularity or omission of any necessary acts or proceedings preliminary to the
issuance of such Bonds, the tax-exempt nature of the interest paid on such Bonds
under the Internal Revenue Code of 1986, as amended, or seeking to restrain or
enjoin the performance by the officers or employees of any such issuing body of
any improper or illegal act in connection with the administration of funds
necessary for debt service on such Bonds or otherwise; or that there exists any
other legal question or impediment affecting such Bonds 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, of which the
Depositor has received notice, which would adversely affect either immediately
or contingently the payment of debt service on such Bonds, or other general
credit standing, or otherwise impair the sound investment character of such
Bonds;
21
(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 Bonds;
(e) that in the case of revenue bonds, the revenues and income
of the facility or project or other special funds expressly charged and pledged
for debt service on any such Bonds shall fall substantially below the estimated
revenues or income calculated by the engineers or other proper officials charged
with the acquisition, construction or operation of such facility or project, so
that, in the opinion of the Depositor, the retention of such Bonds would be
detrimental to the sound investment character of the Trust Fund and to the
interest of the Certificateholders;
(f) that the price of any such Bonds 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 Bonds would be detrimental to the Trust
Fund and to the interest of the Certificateholders;
(g) that such Bonds are the subject of an advance refunding.
For the purposes of this Section 3.8(g), "an advance 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; or
(h) that as of any Computation Date such Bonds are scheduled
to be redeemed and paid prior to the next succeeding Distribution Date;
provided, however, that as the result of such sale 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 $1.00 per Unit.
Upon receipt of such direction from the Depositor, upon which
the Trustee shall rely, the Trustee shall determine, based upon such direction,
and proceed to sell the specified Bond in accordance with such direction;
provided, however, that the Trustee shall not sell any Bond 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 the full principal amount of such Bonds, plus the premium, if any, and the
interest accrued and to accrue thereon to the date of the redemption of such
Bonds. 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 of the Depositor or by reason of the failure of the Depositor to give
any direction, and in the absence of such direction the Trustee shall have no
duty to sell any Bonds under this Section 3.8 except to the extent otherwise
required by Section 3.11 of this Indenture.
SECTION 3.9 Refunding Bonds. In the event that an offer shall
be made by an obligor of any of the Bonds to issue new obligations in exchange
and substitution for any issue of Bonds pursuant to a plan for the refunding or
refinancing of such Bonds, the Depositor shall instruct the Trustee in writing
to reject such offer and either to hold or sell such Bonds in accordance with
Section 3.8, except that if (1) the issuer is in default with respect to such
Bonds or (2) in the opinion of the Depositor, given in writing to the Trustee,
the issuer will probably default with respect to such Bonds 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; provided, however, that the Trustee may accept such
22
an offer only if such substitute or refunding bonds shall be eligible for
coverage of, and upon deposit into the Trust shall be subject to the terms and
conditions of this Indenture to the same extent as the Bonds originally
deposited hereunder. Within five days after such deposit, notice of such
exchange and deposit shall be given by the Trustee to each Certificateholder,
including an identification of the Bonds eliminated and the Bonds substituted
thereof. Except as set forth in this Section 3.9, the acquisition by the Trust
Fund of any securities other than the Bonds is prohibited.
SECTION 3.10 Bond Counsel. The Depositor may employ from time
to time as it may deem necessary a firm of municipal bond attorneys for any
legal services that may be required in connection with the disposition of Bonds
pursuant to Section 3.8 or the substitution of any securities for Bonds as the
result of any refunding permitted under Section 3.9. The fees and expenses of
such bond counsel shall be paid by the Trustee from the Interest and Principal
Accounts as provided for in Section 3.6(d) hereof.
SECTION 3.11 Notice and Sale by Trustee. If at any time the
principal of or interest on any of the Bonds shall be in default and not paid or
provision for payment thereof shall not have been duly made, the Trustee shall
notify the Depositor thereof. If within thirty days after such notification the
Depositor has not given any instructions to sell or to hold or have not taken
any other action in connection with such Bonds, the Trustee shall sell such
Bonds forthwith in accordance with Sections 3.8 and 3.9, and neither the Trustee
nor the Depositor shall be liable or responsible in any way for depreciation or
loss incurred by reason of such sale.
SECTION 3.12 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 by reason of any premium
or discount in respect of any of the Bonds.
SECTION 3.13 Liability of Depositor. The Depositor shall be
under no liability to the Certificateholders 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 gross
negligence, bad 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, the Evaluator, bond
counsel, or any other person pursuant to this Indenture and in furtherance of
their duties.
SECTION 3.14 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 Bonds (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 Bonds have been issued) the Trustee shall promptly notify the Depositor and
shall 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, subject to the requirements of Section 3.8, as
it, in its sole discretion, shall deem advisable.
23
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 3.14.
SECTION 3.15 Limited Replacement of Special Bonds. If any
contract in respect of Contract Bonds other than a contract to purchase a New
Bond (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 Bonds being herein called
the "Special Bonds") , the Depositor shall notify the Trustee (such notice being
herein called the "Failed Contract Notice") of their inability to deliver the
Special Bond to the Trustee after they are notified that the Special Bond will
not be delivered by the seller thereof to the Depositor. Such Failed Contract
Notice shall be given no later than 90 days after the Date of Deposit for the
Trust. 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," unless the
Depositor determines not to replace the Special Bond, in which case the
"Purchase Period" will terminate on the date of such determination), the
Depositor shall, if possible, purchase or enter into a contract to purchase an
obligation to be held as a Bond hereunder (herein called the "New Bond") as part
of the Trust in replacement of the Special Bond, subject to the satisfaction of
all of the following conditions in the case of each purchase or contract to
purchase:
(a) The New Bonds (i) shall be tax-exempt bonds issued by the
State of New York or a county, municipality, authority or political subdivision
thereof or by certain United States territories or possessions or their public
authorities, (ii) shall have a fixed maturity date (whether or not entitled to
the benefits of any sinking, redemption, purchase or similar fund) not exceeding
the date of maturity of the Special Bond they replace and not less than ten
years after the date of purchase, (iii) shall be purchased at a price that
results in a yield to maturity and a current return, in each case as of the Date
of Deposit, at least equal to the yield to maturity and the current return of
the Special Bond which they replace, (iv) shall be payable as to principal and
interest in United States currency, and (v) shall not be when, as and if issued
Bonds.
(b) The purchase price of the New Bonds (exclusive of accrued
interest) shall not exceed the principal attributable to the Special Bonds.
(c) The Depositor shall furnish a notice to the Trustee (which
may be part of the Failed Contract Notice) in respect of the New Bonds purchased
or to be purchased that shall (i) identify the New Bonds, (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 (a)
through (c) have been satisfied with respect to the New Bonds.
(d) Each New Bond purchased must be a Bond which is insured by
an AAA-rated insurance company that guarantees the scheduled payments of
principal and interest on the bonds when due, as long as they are outstanding.
Upon satisfaction of the foregoing conditions with respect to
any New Bond, the Depositor shall pay the purchase price for the New Bond from
its own resources or, if the Trustee has credited any moneys and/or letters of
credit attributable to the failed Special Bond to the Principal Account, the
Trustee shall pay the purchase price of the New Bond upon directions
24
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, the Trustee shall forthwith return to the Depositor the portion of such
moneys that is not properly distributable to Certificateholders pursuant to
Section 3.6.
Whenever a New Bond is acquired by the Depositor pursuant to
the provisions of this Section 3.15, the Trustee shall, within five days
thereafter, mail to all Certificateholders notices of such acquisition,
including an identification of the failed Special Bond and the New Bond
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
such directions and in the absence of such directions the Trustee shall have no
duty to purchase any Bonds under this Indenture. The Depositor shall not be
liable for any failure to instruct the Trustee to purchase any New Bonds or for
errors of judgment in respect of this Section 3.15; provided, however, that this
provision shall not protect the Depositor against any liability to which it
would otherwise be subject by reason of willful misconduct, bad faith or gross
negligence in the performance of its duties.
Notwithstanding anything to the contrary in this Section 3.15,
no substitution of New Bonds will be made without an opinion of counsel that
such substitution will not adversely affect the Federal income tax status of the
Trust, if such New Bonds when added to all previously purchased New Bonds in the
Trust exceed 15% of the principal amount of Bonds initially deposited.
Section 3.16 Grantor Trust Status: The Trust is intended to be
treated as a fixed investment (i.e., grantor) trust for income tax purposes, and
its powers shall be limited in accordance with the restrictions imposed on such
trusts by Treasury Regulation Section 301.7701-4(c) or similar or successor
provisions of Treasury Regulations under the Internal Revenue Code of 1986, as
amended ("Treas. Reg. Section 301.7701-4(c))". Nothing in this Indenture, or
otherwise, shall be construed to give the Trustee the power to vary the
investment of the Unitholders within the meaning of Treas. Reg. Section
301.7701-4(c), nor shall the Depositor give the Trustee any direction that would
vary the investment of the Unitholders. Notwithstanding the foregoing, the
Trustee shall have no liability for any breach of the foregoing, if the Trustee
acted pursuant to the other terms of this Indenture or pursuant to the
instructions of the Depositor.
ARTICLE IV
EVALUATION OF BONDS; EVALUATOR
SECTION 4.1 Evaluation by Evaluator. The Evaluator shall
determine separately and promptly furnish to the Trustee and the Depositor upon
request the value of each issue of Bonds (treating separate maturities of Bonds
as separate issues) as of the Evaluation Time on the bid side of the market on
the days on which the Trustee shall make the Trust Fund Evaluation required by
Section 5.1 and, in addition, as of the Evaluation Time on the offering side of
the market each business day during the initial public offering period. In
making the evaluation the Evaluator may determine the value of each issue of the
Bonds in the Trust Fund
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by the following methods or any combination thereof which it deems appropriate:
(i) on the basis of current bid or offering prices of such Bonds as obtained
from investment dealers or brokers (including the Depositor) who customarily
deal in public bonds comparable to those held by the Trust Fund, (ii) if bid or
offering prices are not available for any of such Bonds, on the basis of bid or
offering prices for comparable bonds, (iii) by appraisal, or (iv) in its
evaluation of Bonds which are in default in payment of principal or interest or,
in the Depositor's opinion, in significant risk of such default ("Defaulted
Bonds") on the basis of the current bid and offering prices of such Bonds and
the current bid and offering prices of such issuers whose securities, if
identifiable, carry identical interest rates and maturities and are of a
creditworthiness comparable to the issuer of such Bonds prior to the default or
significant risk of default. If such other bonds are not identifiable, the
Evaluator will compare prices of bonds with substantially identical interest
rates and maturities and which are of a creditworthiness of minimum investment
grade or (v) by any combination of the above which it deems appropriate. The
Evaluator shall also make an evaluation of the Bonds deposited in the Trust Fund
as of the time said Bonds are deposited under this Indenture. Such evaluation
shall be made on the same basis set forth above and shall be based upon offering
prices of said Bonds. In addition to the methods of determining the value of the
Bonds described above, the Evaluator may make the initial evaluation in whole or
in part by reference to the Blue List of Current Municipal Offerings (a daily
publication containing the current public offering prices of public bonds of all
grades currently being offered by dealers and banks). The Evaluator's
determination of the offering price of the Bonds on the Date of Deposit shall be
included in Schedule A.
SECTION 4.2 Tax Reports. For the purpose of permitting
Certificateholders to satisfy any reporting requirements of applicable Federal
or State tax law, the Evaluator shall make available to the Trustee and the
Trustee shall transmit to any Certificateholder upon request any determinations
made by it pursuant to Section 4.1.
SECTION 4.3 Evaluator's Compensation. As compensation for its
services hereunder, the Evaluator shall receive against a statement therefor
submitted to the Trustee monthly on or before each monthly Computation Day the
amount set forth in Part II of the applicable Reference Trust Agreement.
SECTION 4.4 Liability of Evaluator. The Trustee and the
Depositor may rely on any evaluation furnished by the Evaluator and shall have
no responsibility for the accuracy thereof. The determinations made by the
Evaluator hereunder shall be made in good faith upon the basis of the best
information available to it. The Evaluator shall be under no liability to the
Trustee, Depositor or Certificateholders for errors in judgment, provided,
however, that this provision shall not protect the Evaluator against any
liability to which it would otherwise be subject by reason of its willful
misconduct, bad faith or gross negligence.
SECTION 4.5 Successor Evaluator. (a) The Evaluator may resign
and be discharged hereunder, by executing an instrument in writing resigning as
Evaluator and filing the same with the Depositor and the Trustee, not less than
60 days before the date specified in such instrument when, subject to Section
4.5(e), such resignation is to take effect. Upon receiving such notice of
resignation, the Depositor and the Trustee shall use their best efforts to
appoint a successor evaluator having qualifications and at a rate of
compensation satisfactory to the Depositor and the Trustee. Such appointment
shall be made by written instrument executed by
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the Depositor and the Trustee, in duplicate, one copy of which shall be
delivered to the resigning Evaluator and one copy to the successor evaluator.
The Depositor and the Trustee may remove the Evaluator at any time upon 30 days'
written notice and appoint a successor evaluator having qualifications and at a
rate of compensation satisfactory to the Depositor and the Trustee. Such
appointment shall be made by written instrument executed by the Depositor and
the Trustee, in duplicate, one copy of which shall be delivered to the Evaluator
so removed and one copy to the successor evaluator. Notice of such resignation
or removal and appointment of a successor evaluator shall be mailed by the
Trustee to each Certificateholder.
(b) Any successor evaluator appointed hereunder shall execute,
acknowledge and deliver to the Depositor and the Trustee an instrument accepting
such appointment hereunder, and such successor evaluator 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 Evaluator herein and shall be bound by all the terms and conditions of
this Agreement.
(c) In case at any time the Evaluator shall resign and no
successor evaluator shall have been appointed and have accepted appointment
within 30 days after notice of resignation has been received by the Depositor
and the Trustee, the Evaluator may forthwith apply to a court of competent
jurisdiction for the appointment of a successor evaluator. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
appoint a successor evaluator.
(d) Any corporation into which the Evaluator hereunder may be
merged or with which it may consolidate, or any corporation resulting from any
merger or consolidation to which the Evaluator hereunder shall be a party, shall
be the successor evaluator under this Agreement 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 the Evaluator may see, to retain certain powers, rights
and privileges theretofore obtaining for any period of time following such
merger or consolidation, to the contrary notwithstanding.
(e) Any resignation or removal of the Evaluator and
appointment of a successor evaluator pursuant to this Section 4.5 shall become
effective upon acceptance of appointment by the successor evaluator as provided
in subsection (b) hereof.
ARTICLE V
TRUST FUND EVALUATION, REDEMPTION, PURCHASE
TRANSFER, INTERCHANGE OR REPLACEMENT OF CERTIFICATES
SECTION 5.1 Trust Fund Evaluation. The Trustee shall make an
evaluation of the Trust Fund as of the Evaluation Time (i) on each Business Day
on which any Unit is tendered for redemption if prior to the Evaluation Time
that day, otherwise on the following Business Day, (ii) on each Business Day
during the initial offering period, and (iii) on any other day
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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 Trust Fund
(other than cash declared held specially for purchase of Contract Bonds under
Section 3.15 hereof or cash credited to the Reserve Account) or moneys in the
process of being collected from matured interest coupons or bonds matured or
called for redemption prior to maturity, (2) the value of each issue of the
Bonds (including Contract Bonds) on the bid side of the market as determined by
the Evaluator pursuant to Section 4.1, and (3) interest accrued thereon not
subject to collection and distribution. 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 Fund and for which no
deductions shall have previously been made for the purpose of addition to the
Reserve Account, (ii) amounts representing accrued expenses of the Trust Fund
including but not limited to unpaid fees and expenses of the Trustee, the
Evaluator and bond counsel and those relating to the annual audit, in each case
as reported by the Trustee to the Evaluator on or prior to the date of
evaluation, and (iii) cash held for distribution to Certificateholders of record
as of a date prior to the evaluation then being made. The value of the pro rata
share of each Unit determined on the basis of any such evaluation shall be
referred to herein as the "Unit Value," and shall be effective as to (i) all
orders received by the Sponsors for the purchase or sale of Units and (ii) all
Units received by the Trustee for redemption prior to the Evaluation Time
utilized but subsequent to the preceding evaluation.
The Trustee shall make an evaluation of the Bonds deposited in
the Fund as of the time said Bonds are deposited under this Indenture. Such
evaluation shall be made on the same basis as set forth in Section 4.1, except
that it shall be based upon the offering prices of said Bonds and upon the bid
prices of the Trust Units. The Trustee, in lieu of making the evaluation
required hereby, may use an evaluation prepared by the Evaluator and in so doing
shall not be liable or responsible under any circumstances whatever for the
accuracy or correctness thereof or for any error or omission therein. The
Trustee's determination of the offering price of the Bonds on the date of
deposit determined as herein provided shall be included in Schedule A.
SECTION 5.2 Redemption by Trustee; Purchases by Depositor. Any
Certificate, properly endorsed or accompanied by a written instrument of
transfer, tendered for redemption by a Certificateholder or his duly authorized
attorney to the Trustee at its corporate trust office in the City of New York
shall be redeemed by the Trustee on the seventh calendar day following the day
on which tender for redemption is made, provided that if such day of redemption
is not a Business Day, then such Certificate shall be redeemed on the first
Business Day prior thereto (being herein called the "Redemption Date"). Subject
to payment by such Certificateholder 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 next subsequent Evaluation Time, multiplied by the number of Units
represented by such Certificate (herein called the "Redemption Price").
The Trustee may in its discretion, and shall when so directed
by the Depositor, suspend the right of redemption or postpone the date of
payment of the Redemption Price for more than seven calendar days following the
day on which tender for redemption is made (1) for any period during which the
New York Stock Exchange, Inc. is closed other than customary weekend and holiday
closings or during which trading on the New York Stock Exchange, Inc. is
restricted; (2) for any period during which an emergency exists as a result of
which disposal by
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the Trust Fund of the Bonds is not reasonably practicable or it is not
reasonably practicable fairly to determine in accordance herewith the value of
the Bonds; or (3) for such other period as the Securities and Exchange
commission may by order permit; and neither the Trustee nor the Depositor shall
be liable to any person or in any way for any loss or damage which may result
from any such suspensions or postponement.
Not later than the close of business on the day of tender of a
Certificate for redemption by a Certificateholder other than the Depositor, the
Trustee shall notify the Depositor of such tender. The Depositor shall have the
right to purchase such Certificate by notifying the Trustee of their election to
make such purchase as soon as practicable thereafter but in no event subsequent
to the close of business on the second Business Day after the day on which such
Certificate was tendered for redemption. Such purchase shall be made by payment
for such Certificate by the Depositor to the Certificateholder not later than
the close of business on the Redemption Date of an amount not less than the
Redemption Price which would otherwise be payable by the Trustee to such
Certificateholder.
Any Certificate so purchased by the Depositor may at the
option of the Depositor be tendered to the Trustee for redemption at the
corporate trust office of the Trustee in the manner provided in the first
paragraph of this Section 5.2, provided that in no event shall the Depositor
receive a greater amount on such redemption than the amount the Depositor paid
in purchasing such Certificate plus accrued interest from the date of purchase
of such Certificate by the Depositor, less the amount, if any, of any
distributions from the Principal Account received by the Depositor with respect
to such Certificate.
If the Depositor does not elect to purchase any Certificate
tendered to the Trustee for redemption, or if a Certificate is being tendered by
the Depositor for redemption, that portion of the Redemption Price which
represents interest shall be withdrawn from the Interest Account to the extent
available. The balance paid on any redemption, including accrued interest, if
any, shall be withdrawn from the Principal Account to the extent that funds are
available for such purpose. If such available balance shall be insufficient, the
Trustee shall sell, in accordance with the provisions set forth below, such of
the Bonds currently designated for such purposes by the Depositor as the Trustee
in its sole discretion shall deem necessary. In the event that funds are
withdrawn from the Principal Account for payment of accrued interest, the
Principal Account shall be reimbursed for such funds so withdrawn when
sufficient funds are next available in the Interest Account.
The Depositor shall maintain with the Trustee a current list
of Bonds designated to be sold for the purpose of redemption of Certificates
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 Bonds for such purposes. The net proceeds of any sales of Bonds
from such list representing principal shall be credited to the Principal
Account, and the proceeds of such sales representing accrued interest shall be
credited to the Interest Account.
Neither the Depositor nor the Trustee shall be liable or
responsible in any way for depreciation or loss incurred by reason of any sale
of Bonds made pursuant to this Section 5.2.
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Certificates evidencing Units, redeemed pursuant to this
Section 5.2 shall be cancelled by the Trustee and the Units evidenced by such
Certificates shall be terminated by such redemptions.
SECTION 5.3 Transfer or Interchange of Certificates. A
Certificate may be transferred by the registered holder thereof by presentation
and surrender of such Certificate at the corporate 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
Certificateholder or his authorized attorney, whereupon a new registered
Certificate or Certificates for the same number of Units 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 and all
Certificates issued shall be issued in denominations of one unit or any multiple
thereof as may be requested by the Certificateholder. The Trustee may deem and
treat the person in whose name any Certificate shall be registered upon the
books of the Trustee as the owner of such Certificate 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 Certificate shall be so registered.
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 Certificateholder to the Trustee. The Trustee may require a
Certificateholder to pay $2.00 for each new Certificate issued on any such
transfer or interchange.
All Certificates cancelled pursuant to this Indenture shall be
disposed of by the Trustee without liability on its part.
SECTION 5.4 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 in exchange and
substitution therefor upon the holder's furnishing the Trustee with proper
identification and indemnity satisfactory to the Trustee, 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 shall be issued in
exchange and substitution therefor. Upon the issuance of any new Certificate 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 pursuant
to this Section shall constitute complete and indefeasible evidence of ownership
in the Trust Fund, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
In the event the Trust Fund has terminated or is in the
process of termination, the Trustee may, instead of issuing a new certificate 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 9.2
hereof) if the Trustee is furnished with such security or indemnity as it may
require to save it harmless, and in
30
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.
ARTICLE VI
TRUSTEE
SECTION 6.1 General Definition of Trustee's Liabilities,
Rights and Duties. 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 shall be held by it without interest in trust as part of the Trust
Fund or the Reserve Account 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 or
Certificates 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
the Indenture or otherwise, except by reason of its own willful misconduct, bad
faith or gross negligence; provided, however, that the Trustee shall not in any
event be liable or responsible for any evaluation made by the Evaluator. The
Trustee may construe any of the provisions in 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;
(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 the Evaluator, or for the form,
character, genuineness, sufficiency, value or validity of any Bonds or for or in
respect of the validity or sufficiency of the Certificates or of the due
execution thereof by the Depositor, and the Trustee shall in no event assume or
incur any liability, duty or obligation to any Certificateholder 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 signatures by or on behalf
of the Depositor or the Evaluator;
(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. The
Trustee shall in its discretion undertake such action as it may deem necessary
at any and all times to protect the Trust Fund and the rights and interests of
the Certificateholders pursuant to the terms of this Indenture;
31
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 Fund prior to the interests of the Certificateholders;
(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
accounts of the Trust shall be audited not less frequently than annually by an
independent public accounting firm that is registered and in good standing with
the Public Company Accounting Oversight Board, designated from time to time by
the Depositor, and the report of such accountants shall be furnished by the
Trustee to the Certificateholders upon request. 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 as set forth in Section 6.4 hereof; provided, however, that
an amount equal to any excess over $0.50 per outstanding Unit of the annual
audit expense shall be paid by the Depositor so long as the Depositor maintains
a secondary market;
(f) upon the occurrence of any of the events stated in Section
8.2(a) or Section 8.4 hereof, the Trustee may:
(1) appoint a successor depositor (having a net worth,
determined in accordance with generally accepted accounting principles, of at
least $1,000,000) who shall act hereunder in all respects in place of the
Depositor by an instrument executed by the new Depositor and the Trustee, which
successor shall be satisfactory to the Trustee, and which may be compensated
semi-annually, at rates deemed by the Trustee to be reasonable under the
circumstances, by deduction from the Interest Account, or, to the extent funds
are not available in such Account, from the Principal Account 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 any successor provision, or
(2) if no depositor or successor depositor has been appointed,
terminate this Agreement and the trust created hereby, and liquidate the Trust
Fund in the manner provided in Section 9.3;
(g) the Trustee shall notify all Certificateholders if the
value of the Trust Fund as shown by any evaluation by the Trustee pursuant to
Section 5.1 hereof shall be less than $2,000,000 or less than 20% of the value
of the Trust Fund as of the Date of Deposit and, after such notice is given,
this Indenture and the trust created hereby may be terminated and the Trust Fund
liquidated, all in the manner provided in Section 9.3, (i) by the consent of 66
2/3% of the Units at the time outstanding under this Indenture or (ii) by the
Trustee, in its discretion, provided, however, upon written notification to the
Certificateholders of their opportunity to object to such termination and to the
Depositor, at least 33 1/3% of the Units at the time
32
outstanding under this Indenture do not instruct the Trustee not to terminate
the trust and liquidate the Trust Fund;
(h) in no event shall the Trustee be liable for any taxes or
other governmental charges imposed upon or in respect of the Bonds or upon the
interest thereon or upon it as Trustee hereunder or upon or in respect of the
Trust Fund 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 and audit 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 Trust Fund, except
as otherwise provided in Section 6.1(e) and the payment of such amounts so paid
by the Trustee shall be secured by a lien on the Trust Fund prior to the
interests of the Certificateholders; (i) the Trustee, except by reason of its
own gross negligence, bad faith or willful misconduct, shall not be liable for
any action taken, omitted or suffered to be taken by it or believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Indenture;
(i) the Trustee, except by reason of its own gross negligence,
bad faith or willful misconduct, shall not be liable for any action taken,
omitted or suffered to be taken by it or believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Indenture;
(j) the Trustee is authorized and empowered to execute and
file on behalf of the Trust Fund any and all documents, in connection with
consents to service of process, required to be filed under the securities laws
of the various states in order to permit the sale of Units of the Trust Fund in
such states by the Depositor; and
(k) no payment to the Depositor or to any principal
underwriter (as defined in the Investment Company Act of 1940) for the Trust or
to any affiliated person (as defined in the Investment Company Act of 1940) or
agent of a Depositor or such underwriter shall be allowed the Trustee as an
expense by the Trustee 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. Notwithstanding any provision of this Agreement to the contrary,
the Trustee is authorized and empowered, subject to the approval of the
Depositor and its counsel, to enter into a servicing arrangement or arrangements
as it deems necessary or appropriate for the performance by a service
organization (which may be a corporation under common ownership with the
Trustee) of bookkeeping, accounting, reporting, distribution and other
activities and duties allocated to it under this Agreement. The Trustee is
further authorized and empowered, subject to the approval of the Depositor and
its counsel, to amend, supplement or terminate any such servicing arrangement or
arrangements made pursuant to this provision.
SECTION 6.2 Books, Records and Reports. The Trustee shall keep
proper books of record and account of all the transactions under this Indenture
at its corporate trust office including a record of the name and address of, and
the Certificates issued by the Trust Fund and held by every Certificateholder,
and such books and records shall be open to inspection by any Certificateholder
at all reasonable times during the usual business hours.
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.
33
SECTION 6.3 Indenture and List of Bonds on File. The Trustee
shall keep a certified copy in duplicate original of this Indenture on file at
its corporate trust office available for inspection at all reasonable times
during the usual business hours by any Certificateholder, together with a
current list of the Bonds.
SECTION 6.4 Compensation. For services performed under this
Indenture, the Trustee shall be paid an amount set forth in Part II of the
applicable Reference Trust Agreement; provided, however, if interest on any
bonds in the Trust Fund does not commence accruing to the benefit of
Certificateholders on the First Settlement Date due to the fact that any
contract to purchase such Bond settles after the First Settlement Date, then the
compensation of the Trustee hereunder during the first year of the Trust Fund
shall be adjusted downward to reflect the amount of interest that would have
accrued on such Bond during the period from the First Settlement Date to the
settlement on such contract to purchase. Such compensation shall be payable in
monthly installments equal to one-twelfth of the estimated annual compensation
and shall be computed on the basis of the greatest amount of such principal
amount of Bonds in the Trust Fund at any time during the period with respect to
which such compensation is being computed. The Trustee may from time to time
adjust its compensation as set forth above; provided, however, that 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." The consent or concurrence of any
Certificateholder hereunder shall not be required for any such adjustment or
increase. Such compensation shall be deemed to provide only for the usual,
normal and proper functions undertaken as Trustee pursuant to this Indenture
and, in addition, the Trustee shall charge the Interest and Principal Accounts
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. The Trustee shall be indemnified and held harmless against any loss
or liability accruing to it without gross negligence, bad faith or willful
misconduct on its part, arising out of or in connection with the acceptance or
administration of this Trust Fund, including the costs and expenses (including
counsel fees) of defending itself against any claim or liability in the
premises. If the cash balances in the Interest and Principal Accounts shall be
insufficient to provide for any expenses of the Trust, the Trustee shall have
the power to sell, in accordance with Sections 3.8 and 5.2 (i) Bonds from the
current list of Bonds designated to be sold pursuant to Sections 3.8 and 5.2
hereof, or (ii) if no such Bonds have been so designated, such Bonds as the
Trustee deems appropriate 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 6.4. 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 6.4. Any moneys payable pursuant to this Section shall be secured
by a lien on the Trust Fund prior to the interest of the Certificateholders.
SECTION 6.5 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 trust created by this Indenture, by
executing an instrument in writing resigning as Trustee of such trust and filing
the same with the Depositor and mailing a copy of a
34
notice of resignation to all Certificateholders then of record, not less than
sixty days before the date specified in such instrument when, subject to Section
6.5(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, 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, or the Depositor shall deem it to
be in the best interests of the Certificateholders, 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 Certificateholder 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. 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 them 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;
35
(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 6.6 Qualifications of Trustee. The Trustee shall be a
corporation organized and doing business under the laws of the United States or
the State of New York, 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 and having its principal office
and place of business in the Borough of Manhattan, the City and State of New
York.
ARTICLE VII
RIGHTS OF CERTIFICATEHOLDERS
SECTION 7.1 Beneficiaries of Trust. By the purchase and
acceptance or other lawful delivery and acceptance of any Certificate the
Certificateholder shall be deemed to be a beneficiary of the trust created by
this Indenture and vested with all right, title and interest in the Trust Fund
to the extent of the Unit or Units set forth and evidenced by such Certificate,
subject to the terms and conditions of this Indenture and of such Certificate.
SECTION 7.2 Rights, Terms and Conditions. In addition to the
other rights and powers set forth in the other provisions and conditions of this
Indenture, the Certificateholders shall have the following rights and powers and
shall be subject to the following terms and conditions:
(a) a Certificateholder may at any time tender his Certificate
or Certificates to the Trustee for redemption in accordance with Section 5.2;
(b) the death or incapacity of any Certificateholder shall not
operate to terminate this Indenture or the 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, nor otherwise affect the rights, obligations and liabilities
of the parties hereto or any of them. Each Certificateholder 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; and
(c) except as otherwise provided herein, no Certificateholder
shall have any right to vote or in any manner otherwise control the operation
and management of the Trust Fund 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 Certificateholders from time to time as
partners or members of any association; nor shall any Certificateholder ever 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.
36
ARTICLE VIII
DEPOSITOR
SECTION 8.1 Liabilities. The Depositor shall be liable in
accordance herewith for the obligations imposed upon and taken by the Depositor
hereunder.
SECTION 8.2 Discharge. The following provisions shall provide
for the discharge of the Depositor and the liability of the Depositor in the
event of the discharge of the Depositor:
(a) in the event that the Depositor shall fail to undertake or
perform any of the duties which by the terms of this Agreement are required by
it to be undertaken or performed and such failure shall continue for thirty days
after notice to the Depositor from the Trustee or if the Depositor shall become
incapable of acting or shall be adjudged a bankrupt or insolvent, or a receiver
of the property of the Depositor shall be appointed or any public officer shall
take charge or control the Depositor or its property or affairs for the purpose
of rehabilitation, conservation or liquidation, then the Depositor shall
forthwith be and shall be deemed to be discharged forever as the Depositor
hereunder;
(b) notwithstanding the discharge of the Depositor in
accordance with this Section 8.2, or the resignation of the Depositor pursuant
to Section 8.4, the Depositor shall continue to be fully liable in accordance
with the provisions hereof in respect of action taken or refrained from under
this Indenture by the Depositor before the date of such discharge, as fully and
to the same extent as if no discharge had occurred.
SECTION 8.3 Successors. The covenants, provisions and
agreements herein contained shall in every case be binding upon any successor to
the Depositor and shall be binding upon the General Partners of any successor
depositor which may be a partnership and upon the capital interest of the
limited partners of any successor depositor which may be a partnership. In the
event of the death, resigning or withdrawal of any partner of any successor
depositor which may be a partnership, the partner so dying, resigning or
withdrawing shall be relieved of all further liability hereunder if at the time
of such death, resignation or withdrawal such successor depositor maintains a
net worth (determined in accordance with generally accepted accounting
principles) of at least $1,000,000. In the event of an assignment by the
Depositor to a successor corporation or partnership as permitted by the next
following sentence, the Depositor shall be relieved of all further liability
under this Agreement. The Depositor may transfer all or substantially all of its
assets to a corporation or partnership which carries on the business of the
Depositor, if at the time of such transfer such successor duly assumes all the
obligations of the Depositor under this Agreement.
SECTION 8.4 Resignation. If at any time the Depositor shall
desire to resign its position as the Depositor hereunder, it may resign by
delivering to the Trustee an instrument executed by the Depositor. Upon
effective resignation hereunder, the resigning Depositor shall be discharged and
shall no longer be liable in any manner hereunder except as to acts and
omissions occurring prior to such resignation and any successor Depositor
appointed by the Trustee pursuant to Section 6.01(f)(1) shall thereupon perform
all duties and be entitled to all
37
rights under this Indenture. Any successor Depositor shall have a minimum net
worth determined in accordance with generally accepted accounting principles of
at least $1,000,000. Such new Depositor shall not be under any liability
hereunder for occurrences or omissions prior to the execution of such
instrument.
SECTION 8.5 Exclusions from Liability. The following
provisions shall provide for certain exclusions from the liability of the
Depositor:
(a) the Depositor shall be under no liability to the Trust
Fund or the Certificateholders 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 or liable or responsible in any way for depreciation or loss incurred
by reason of the sale of any Bonds; provided, however, that this provision shall
not protect the Depositor against any liability to which it would otherwise be
subject by reason of its own willful misconduct, bad faith or gross negligence.
The Depositor may rely in good faith on any paper, order, notice, list,
affidavit, receipt, evaluation, opinion, endorsement, assignment, draft or any
other document of any kind prima facie properly executed and submitted to it, or
by the Trustee, bond counsel, the Evaluator or any other person. The Depositor
shall in no event be deemed to have assumed or incurred any liability, duty, or
obligation to any Certificateholder or the Trustee other than as expressly
provided for herein or arising as a matter of law;
(b) the Depositor shall not be under any obligation to appear
in, prosecute or defend any legal action which in their opinion may involve it
in any expense or liability; provided, however, that the Depositor may in its
discretion undertake any such action which it may deem necessary or desirable in
respect of this Agreement and the rights and duties of the parties hereto and
the interest of the Certificateholders hereunder; and
(c) none of the provisions of this Agreement shall be deemed
to protect or purport to protect the Depositor against any liability to the
Trust Fund or to the Certificateholders to which the Depositor would otherwise
be subject by reason of its own willful misconduct, bad faith or gross
negligence.
SECTION 8.6 Annual Fee. For services performed under this
Indenture, the Depositor will be paid an annual fee, against a statement
therefor submitted to the Trustee annually on or before December 1 of each year,
in an amount set forth in Part II of the applicable Reference Trust Agreement as
reimbursement of the costs incurred by the Depositor in rendering its portfolio
supervisory services with respect to the portfolio of the Trust Fund unless such
fee shall not be permitted by any governmental regulatory agency having
jurisdiction to regulate the payments of such fees. This fee may exceed the
actual costs of supervising the portfolio of this Trust but the total amount of
fees received under this Section 8.6 by the Depositor in any calendar year,
together with similar fees received by it in connection with other guaranteed
series of Empire State Municipal Exempt Trust in such calendar year, shall not
exceed the aggregate cost of supplying such services. The Depositor will
calculate the actual costs of its services by keeping records of the amount of
time spent by each employee of the Depositor working on the portfolio
supervision and determining what portion of such employee's salary to allocate
to such services. The Depositor shall also keep records of the appropriate
allocation of the costs of periodicals, computer time, communications expenses
and other related expenses.
38
The Depositor's annual fee may be increased from time to time
by amounts not exceeding the proportionate increase during the period from the
date of this Indenture to the date of any such increase in consumer prices as
published either under the classification "All Services Less Rent" in the
Consumer Price Index published by the U.S. Department of Labor or, if such index
is no longer published, a similar index.
ARTICLE IX
ADDITIONAL COVENANTS; MISCELLANEOUS PROVISIONS
SECTION 9.1 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 Certificateholders (a) to cure any ambiguity or to correct
or supplement any provision contained herein which may be defective or
inconsistent any provision contained herein which may be defective or
inconsistent with any other provision contained herein, (b) to change any
provision hereof as may be required by the Securities and Exchange Commission,
any successor governmental agency exercising similar authority, or (C) to make
such other provision in regard to matters or questions arising hereunder as
shall not adversely affect the interest of the Certificateholders; and this
Indenture may also be amended from time to time by the parties hereto or their
successors with the consent of the holders of Certificates evidencing 66 2/3% of
the Units at the time outstanding under the Indenture for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
hereof or of modifying in any manner the rights of the holders of Certificates
of the Trust Fund; provided, however, that the parties hereto may not amend this
Indenture without the consent of 100% of the Certificateholders so as to (i)
reduce the aforesaid percentage of Units the holders of which are required to
consent to certain amendments, and (ii) reduce the interest in the Trust Fund
represented by Units evidenced by any Certificate; provided, however, that the
parties hereto may not amend this Indenture so as to (1) increase the number of
Units issuable hereunder above the aggregate number of Units set forth in the
applicable Reference Trust Agreement except as provided in Section 5.4 hereof or
such lesser amount as may be outstanding at any time during the term of this
Indenture or (2) subject to Section 3.9 and 3.15, permit the deposit or
acquisition hereunder of obligations or other securities either in addition to
or in substitution for any of the Bonds.
It shall not be necessary for the consent of
Certificateholders under this Section 9.1 to approve the particular form of any
proposed amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
Promptly after the execution of any such amendment the Trustee
shall furnish written notification to all holders of then outstanding
Certificates of the substance of such amendment.
SECTION 9.2 Termination. This Indenture and the trust created
hereby shall terminate upon the maturity, redemption, sale or other disposition,
as the case may be, of the last Bond held hereunder unless sooner terminated as
hereinbefore specified and may be terminated
39
at any time by the written consent of 100% of the Certificateholders; provided,
that in no event shall this Trust continue beyond the Mandatory Termination Date
set forth in Part II of the applicable Reference Trust Agreement. Written notice
of any termination, specifying the time or times at which the Certificateholders
may surrender their Certificates for cancellation and the date, determined by
the Trustee, upon which the transfer books of the Trust, maintained pursuant to
Section 6.1, shall be closed, shall be given by the Trustee to each
certificateholder at the address appearing on the registration books of the
Trustee. Within a reasonable period of time after such termination the Trustee,
shall, subject to any applicable provision of law, fully liquidate the Bonds
then held, if any; provided, however, that in connection with any such
liquidation it shall not be necessary for the Trustee to dispose of any Bond or
Bonds if retention of such Bond or Bonds, until due, shall be deemed to be in
the best interest of Certificate- holders, including, but not limited to,
situations in which a Bond or Bonds mature after the Mandatory Termination Date,
and shall:
(a) deduct from, the Interest Account or, to the extent that
funds are not available in such Account, from the Principal Account, and pay to
itself individually an amount equal to the sum of (1) its accrued compensation
for its ordinary recurring services, (2) any compensation due it for its
extraordinary services and (3) any costs, expenses or indemnities as provided
herein;
(b) deduct from the Interest Account, or to the extent that
funds are not available in such Account, from the Principal Account, and pay any
unpaid fees and expenses of the Evaluator and of bond counsel, if any, as
directed and certified to by the Depositor and of any successor Depositor
pursuant to Section 8.3;
(c) deduct from the Interest Account or the Principal Account
any amounts which may be required to be deposited in the Reserve Account 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;
(d) distribute to each Certificateholder, upon surrender for
cancellation of his certificate or Certificates, such holder's pro rata share of
the balance of the Interest Account;
(e) distribute to each Certificateholder, upon surrender for
cancellation of his Certificate or Certificates, such holder's pro rata share of
the balance of the Principal Account and on the conditions set forth in Section
3.5, the Reserve Account; and
(f) together with such distribution to each Certificateholder
as provided for in (d) and (e), furnish to each such Certificateholder a final
distribution statement as of the date of the computation of the amount
distributable to Certificateholders, setting forth the data and information in
substantially the form and manner provided for in Section 3.7 hereof.
The amounts to be so distributed to each Certificateholder
shall be that pro rata share of the balance of the total Interest and Principal
Accounts as shall be represented by the Units therein evidenced by the
outstanding Certificate or Certificates held of record by such
Certificateholder.
40
The Trustee shall be under no liability with respect to moneys
held by it in the Interest, Reserve and Principal Accounts 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 Certificateholders 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 the remaining Certificateholders to surrender their
Certificates for cancellation and receive the liquidation distribution with
respect thereto. If within one year after the second notice all the Certificates
shall not have been surrendered for cancellation, the Trustee may take steps, or
may appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates and the cost
thereof shall be paid out of the moneys and other assets which remain in trust
hereunder.
No distribution of funds constituting long-term capital gains
shall be in contravention of Section 19(b) of the Investment Company Act of
1940, as from time to time amended, and applicable orders, rules and regulations
thereunder.
SECTION 9.3 Construction. This Indenture is 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 Certificateholders and the
interpretation of the provisions hereof.
SECTION 9.4 Registration of Units and Trust Fund. The
Depositor agrees and undertakes on its own part to register the Units and the
Empire State Municipal Exempt Trust 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 not incur any liability or
be under any obligation or expense in connection therewith.
SECTION 9.5 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 c/o Glickenhaus & Co., 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other address as shall be
specified by the Depositor to the other parties hereto 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 corporate trust office of
the Trustee, 0 Xxxxxx Xxxxx, 00xx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000, Attention:
UIT Administration, or such other address as shall be specified to the other
parties hereto by the Trustee in writing. Any notice, demand, direction or
instruction to be given to CapeLogic, Inc. shall be in writing and shall be duly
given if mailed or delivered to CapeLogic, Inc., Attention: Vice President,
Municipal Bond Department, 000 Xxxxx 00 Xxxx, Xxxxx 000, Xxxxxxxx, Xxx Xxxxxx
00000, or such other address as shall be specified to the other parties hereto
by the Evaluator in writing. Any notice to be given to the Certificateholders
shall be duly given if mailed or delivered to each Certificateholder at the
address of such holder appearing on the registration books of the Trustee.
SECTION 9.6 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
41
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 holders thereof.
SECTION 9.7 Dissolution of Depositor not to Terminate. The
dissolution of the Depositor for any cause whatsoever shall not operate to
terminate this Indenture insofar as the duties and obligations of the Trustee
and Evaluator are concerned.
IN WITNESS WHEREOF, the Depositor has caused this Trust
Indenture and Agreement to be executed for Glickenhaus & Co., by one of its
General Partners and its corporate seal to be hereto affixed and attested to by
one of their respective Secretaries or Assistant Secretaries; The Bank of New
York has caused this Trust Indenture and Agreement to be executed by one of its
Vice Presidents or Assistant Vice Presidents and its corporate seal to be hereto
affixed and attested to by one of its Assistant Secretaries and CapeLogic, Inc.
has caused this Trust Indenture and Agreement to be executed by one of its Vice
Presidents and Assistant Vice Presidents and its corporate seal to be hereto
affixed and attested to by one of its Vice Presidents; all as of the day, month
and year first above written.
[signatures and acknowledgments appear on separate pages]
42
GLICKENHAUS & CO.
By /s/ Xxxxxxx X. Xxxxx
------------------------------------
Attorney-in-Fact
for each of the
General Partners
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
I, Xxxx Xxxxxxxx, a Notary Public in and for the said County
in the State aforesaid, do hereby certify that Xxxxxxx Xxxxx personally known to
me to be the same whose name is subscribed to the foregoing instrument, appeared
before me this day in person, and acknowledged that he signed and delivered the
said instrument as his free and voluntary act as Attorney-in-Fact for each of
the General Partners, and as the free and voluntary act of said GLICKENHAUS &
CO., for the uses and purposes therein set forth.
GIVEN, under my hand and notarial seal this 8th day of
November, 2005.
/s/ Xxxx Xxxxxxxx
------------------------------------
Notary Public
[SEAL] Xxxx Xxxxxxxx
Notary Public, State of New York
No. 00-0000000
Qualified in Queens County
Commission expires June 8, 0000
XXX XXXX XX XXX XXXX, Trustee
By /s/ Xxxxxxx Xxxxxxx
-------------------------------------
ATTEST:
By /s/ Xxxxxx Xxxxx
-----------------------------------------
(CORPORATE SEAL)
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
I, Xxxxxxxx X. Xxxxx, a Notary Public in and for the said
County in the State aforesaid, do hereby certify that Xxxxxxx Xxxxxxx and Xxxxxx
Xxxxx personally known to me to be the same persons whose names are subscribed
to the foregoing instrument and personally known to me to be a Vice President
and A.T., respectively, of The Bank of New York, appeared before me this day in
person, and acknowledge that they signed, sealed with the corporate seal of The
Bank of New York and delivered the said instrument as their free and voluntary
act as such Vice President and A.T. , respectively, and as the free and
voluntary act of said The Bank of New York for the uses and purposes therein set
forth.
GIVEN, under my hand and notarial seal this 7th day of
November, 2005.
/s/ Xxxxxxxx X. Xxxxx
-------------------------------------
Notary Public
[SEAL] Xxxxxxxx X. Xxxxx
Notary Public, State of New York
No. 00-0000000
Qualified in Queens County
Commission expires April 30, 2007
CAPELOGIC, INC., Evaluator
By /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxxxx
President
ATTEST:
By /s/ Xxxxxx Xxxxx
------------------------------------------
Xxxxxx Xxxxx
Treasurer
(CORPORATE SEAL)
