EXHIBIT 1.1
EQUITY SECURITIES TRUST,
SERIES 21, SIGNATURE SERIES,
GABELLI ENTERTAINMENT & MEDIA TRUST II
REFERENCE TRUST AGREEMENT
This Reference Trust Agreement (the "Agreement") dated January 26, 1999
between Xxxxx & Xxxx Distributors, Inc., as Depositor and The Chase Manhattan
Bank, as Trustee, sets forth certain provisions in full and incorporates other
provisions by reference to the document entitled "Equity Securities Trust,
Series 6, Signature Series, Gabelli Entertainment and Media Trust, and
Subsequent Series, Trust Indenture and Agreement" dated November 16, 1995 and
as amended in part by this Agreement (collectively, such documents hereinafter
called the "Indenture and Agreement"). This Agreement and the Indenture, as
incorporated by reference herein, will constitute a single instrument.
WITNESSETH THAT:
WHEREAS, this Agreement is a Reference Trust Agreement as defined in Section
1.1 of the Indenture, and shall be amended and modified from time to time by an
Addendum as defined in Section 1.1 (1) of the Indenture, such Addendum setting
forth any Additional Securities as defined in Section 1.1 (2) of the Indenture;
WHEREAS, the Depositor wishes to deposit Securities, and any Additional
Securities as listed on any Addendums hereto, into the Trust and issue Units,
and Additional Units as the case maybe, in respect thereof pursuant to Sections
2.1 and 2.6 of the Indenture; and
NOW THEREFORE, in consideration of the premises and of the mutual agreements
herein contained, the Depositor and the Trustee agree as follows:
Part I
STANDARD TERMS AND CONDITIONS OF TRUST
Section 1. Subject to the provisions of Part II hereof, all the provisions
contained in the Indenture are herein incorporated by reference in their
entirety and shall be deemed to be a part of this instrument as fully and to
the same extent as though said provisions had been set forth in full in this
instrument except that the following sections of the Indenture hereby are
amended as follows:
(a) All references to "The Chase Manhattan Bank (National Association)" are
replaced with "The Chase Manhattan Bank".
(b) Notwithstanding any provision of the Indenture to the contrary, ownership
of Units of this series of Equity Securities Trust shall not be certificated
and shall be evidenced solely by registration on the transfer books of the
Trustee, and the registered holder of uncertificated Units shall have all of
the rights and obligations (excluding the right to the issuance of a
Certificate) specified for a registered Certificateholder under the Indenture.
The Depositor and the Trustee shall cause all Units of the Trust issued to the
Depositor (upon both the initial deposit and any deposits of Additional
Securities pursuant to Section 2.6) to be deposited at The Depository Trust
Company ("DTC") and to be credited there to the account of the Depositor. On
and
after such deposit, for all purposes under the Indenture and Agreement, the
sole registered holder of Units of the Trust shall be DTC, or its nominee,
unless and until DTC has notified the Trustee and the Depositor that it is no
longer willing to act as depository with respect to the Units. Accordingly, so
long as DTC, or its nominee, is the registered owner of the Trust Units,
beneficial ownership of Units may only be maintained by or through a
participant in DTC and shall be subject to the rules and operating procedures
of DTC as in effect from time to time. The Trustee shall not be liable for any
loss or liability resulting from the actions of DTC as registered holder and
depository of the Units.
(c) Sections 1.2 and 2.4 and any reference herein to the issuance of
Certificates shall be deleted.
(d) Section 2.3 shall be amended by adding after the words "has registered on
the registration books of the Trust the ownership by" the words "the Depositor
of such Units or, if requested by the Depositor, the ownership by."
(e) Paragraph (a) of Section 2.6 shall be amended to read in its entirety as
follows:
"Section 2.6 Deposit of Additional Securities. (a) Subject to the
requirements set forth below in this Section, the Depositor may, on any
Business Day (the "Trade Date"), subscribe for Additional Units as follows:
(1) Prior to the Evaluation Time on the Trade Date, the Depositor shall
provide notice (the "Subscription Notice") to the Trustee, by telecopy or by
written communication, of the Depositor's intention to subscribe for Additional
Units. The Subscription Notice shall identify the Additional Securities to be
acquired (unless such Additional Securities are a precise replication of the
then existing portfolio) and shall either (i) specify the quantity of
Additional Securities to be deposited by the Depositor on the settlement date
for such subscription or (ii) instruct the Trustee to purchase Additional
Securities with an aggregate value as specified in the Subscription Notice.
(2) Promptly following the Evaluation Time on such Business Day, the
Depositor shall verify with the Trustee, by telecopy, the number of Additional
Units to be created.
(3) Not later than the time on the settlement date for such subscription when
the Trustee is to deliver the Additional Units created thereby (which time
shall not be later than the time by which the Trustee is required to settle any
contracts for the purchase of Additional Securities entered into by the Trustee
pursuant to the instruction of the Depositor referred to in subparagraph (1)
above), the Depositor shall deposit with the Trustee (i) any Additional
Securities specified in the Subscription Notice (or contracts to purchase such
Additional Securities together with cash or a letter of credit in the amount
necessary to settle such contracts) or (ii) cash or a letter of credit in the
amount equal to the aggregate value of the Additional Securities specified in
the Subscription Notice, together with, in each case, Cash as defined below.
"Cash" means, as to the Principal Account, cash or other property (other than
Securities) on hand in the Principal Account or receivable and to be credited
to the Principal Account as of the Evaluation Time on the Business Day
preceding the Trade Date (other than amounts to be distributed solely to
persons other than persons receiving the distribution from the Principal
Account as holders of Additional Units created by the deposit), and, as to the
Income Account, cash or other property (other than Securities) received by the
Trust as of the Evaluation Time on the Business Day preceding the Trade Date or
receivable by the Trust in respect of dividends or other distributions declared
but not received as of the Evaluation Time on the Business Day preceding the
Trade Date, reduced by the amount of any cash or other property received or
receivable on any Security allocable (in accordance with the Trustee's
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calculation of the monthly distribution from the Income Account pursuant to
Section 3.5) to a distribution made or to be made in respect of a Record Date
occurring prior to the Trade Date. Each deposit made during the 90 days
following the deposit made pursuant to Section 2.1 hereof shall replicate, to
the extent practicable, as specified in subparagraph (b), the Original
Proportionate Relationship. Each deposit made after the 90 days following the
deposit made pursuant to Section 2.1 hereof (except for deposits made to
replace Failed Securities if such deposits occur within 20 days from the date
of a failure occurring within such initial 90 day period) shall maintain
exactly the proportionate relationship existing among the Securities as of the
expiration of such 90 day period. Each such deposit shall exactly replicate
Cash.
(4) On the settlement date for a subscription, the Trustee shall, in exchange
for the Securities and cash or letter of credit described above, issue and
deliver to or on the order of the Depositor the number of Units verified by the
Depositor with the Trustee. No Unit to be issued pursuant to this paragraph
shall be issued or delivered unless and until Securities, cash or a letter of
credit is received in exchange therefor and no person shall have any claim to
any Unit not so issued and delivered or any interest in the Trust in respect
thereof.
(5) Each deposit of Additional Securities, shall be listed in a Supplementary
Schedule to an Addendum to the Reference Trust Agreement stating the date of
such deposit and the number of Additional Units being issued therefor. The
Trustee shall acknowledge in such Addendum the receipt of the Deposit and the
number of Additional Units issued in respect thereof. The Additional Securities
shall be held, administered and applied by the Trustee in the same manner as
herein provided for the Securities.
(6) The acceptance of Additional Units by the Depositor in accordance with
the provisions of paragraph (a) of this Section shall be deemed a certification
by the Depositor that the deposit or purchase of Additional Securities
associated therewith complies with the conditions of this Section 2.06.
(7) Notwithstanding the preceding, in the event that the Sponsor's
Subscription Notice shall instruct the Trustee to purchase Additional
Securities in an amount which, when added to the purchase amount of all other
unsettled contracts entered into by the Trustee, exceeds 25% of the value of
the Securities then held (taking into account the value of contracts to
purchase Securities only to the extent that there has been deposited with the
Trustee cash or an irrevocable letter of credit in an amount sufficient to
settle their purchase), the Sponsor shall deposit with the Trustee concurrently
with the Subscription Notice such that, when added to 25% of the value of the
Securities then held (determined as above) the aggregate value shall be not
less than the purchase amount of the securities to be purchased pursuant to
such Subscription Notice."
(f) Section 3.1 is hereby amended in its entirety to read as follows:
"Section 3.1. Initial Cost: The cost of the initial preparation, printing and
execution of the Certificates and this Indenture, the initial fees of the
Trustee and its counsel, and the initial fees of the Evaluator and other
reasonable expenses in connection therewith, shall be paid by the Depositor,
provided, however, that the liability on the part of the Depositor for such
initial costs, fees and expenses shall not include any fees, costs or other
expenses incurred in connection herewith after the execution of this Indenture
and the deposit referred to in Section 2.01.
Upon notification from the Depositor that the primary offering period is
concluded, the Trustee shall withdraw from the Account or Accounts specified in
the Prospectus or, if no Account is therein specified, from the Principal
Account, and pay to the Depositor the Depositor's reimbursable expenses of
organizing the Trust and sale of the Trust Units in an amount certified to the
Trustee by the Depositor. If the balance of the
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Principal Account is insufficient to make such withdrawal, the Trustee shall,
as directed by the Depositor, sell Securities identified by the Depositor, or
distribute to the Depositor Securities having a value, as determined under
Section 4.1 as of the date of distribution, sufficient for such reimbursement.
The reimbursement provided for in this section shall be for the account of the
Unitholders of record at the conclusion of the primary offering period and
shall not be reflected in the computation of Unit Value prior thereto. 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 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. Any cash which the Depositor has
identified as to be used for reimbursement of expenses pursuant to this Section
shall be reserved by the Trustee for such purpose and shall not be subject to
distribution or, unless the Depositor otherwise directs, used for payment of
redemptions in excess of the per-Unit amount allocable to Units tendered for
redemption."
(g) Section 3.5 is hereby amended by inserting the phrase "or Income" in the
second sentence of the sixth paragraph after the words "The Trustee shall not
be required to make a distribution from the Principal..."
(h) Section 3.11 is hereby amended so that the first sentence of such section
reads as follows:
" In the event that an offer by the issuer of any of the Securities or
any other party shall be made to issue new Securities, the Trustee shall
reject such offer, except that if (1) the issuer failed to declare or pay
anticipated dividends with respect to such Securities or (2) in the opinion
of the Sponsor, given in writing to the Trustee, the issuer will probably
fail to declare or pay anticipated dividends with respect to such
Securities in the reasonably foreseeable future, the Sponsor shall instruct
the Trustee in writing to accept or reject such offer and to take any other
action with respect thereto as the Sponsor may deem proper."
(i) Section 3.14 is hereby amended by inserting the phrase "including, but
not limited to securities received as a result of a spin-off" in the first
sentence after the words "Any property received by the Trustee after the
initial date of Deposit in a form other than cash or additional shares of the
Securities listed on Schedule A."
(j) Section 5.1 of the Agreement is amended by deleting clause (a)(4) in the
first paragraph and deleting clause (i) from the first sentence of the second
paragraph and renumbering the remaining clauses accordingly.
(k) Section 9.2 is hereby amended by replacing the phrase "60 business days"
with "7 days" in the first sentence of the sixth paragraph.
(l) Section 9.2 of the Agreement is further amended by adding the following
paragraph after the sixth paragraph of such Section 9.2:
"In the event that the Depositor directs the Trustee that certain
Securities will be sold to a new series of the Trust (a "New Series"), the
Depositor will certify to the Trustee, within five days of each sale from a
Trust to a New Series, (1) that the transaction is consistent with the
policy of both the Trust and the New Series, as recited in their respective
registration statements and reports filed under the Act, (2) the date of
such transaction and (3) the closing sales price on the national securities
exchange for the sale date of the securities subject to such sale. The
Trustee will then countersign the certificate, unless the Trustee disagrees
with the closing sales price listed on the certificate, whereupon the
Trustee will promptly inform
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the Depositor orally of any such disagreement and return the certificate
within five days to the Depositor with corrections duly noted. Upon the
Depositor's receipt of a corrected certificate, if the Depositor can verify
the corrected price by reference to an independently published list of
closing sales prices for the date of the transactions, the Depositor will
ensure that the price of Units of the New Series, and distributions to
holders of the Trust with regard to redemption of their Units or
termination of the Trust, accurately reflect the corrected price. To the
extent that the Depositor disagree with the Trustee's corrected price, the
Depositor and the Trustee will jointly determine the correct sales price by
reference to a mutually agreeable, independently published list of closing
sales prices for the date of the transaction. The Depositor and Trustee
will periodically review the procedures for sales and make such changes as
they deem necessary, consistent with Rule 17a-7(e)(2). Finally, records of
the procedures and of each transaction will be maintained as provided in
Rule 17a-7(f)."
(m) All references to "Xxxxx & Xxxx Distributors L.P.", are replaced with
"Xxxxx & Tang Distributors, Inc."
Section 2. This Reference Trust Agreement may be amended and modified by
Addendums, attached hereto, evidencing the purchase of Additional Securities
which have been deposited to effect an increase over the number of Units
initially specified in Part II of this Reference Trust Agreement ("Additional
Closings"). The Depositor and Trustee hereby agree that their respective
representations, agreements and certifications contained in the Closing
Memorandum dated January 26, 1999, relating to the initial deposit of
Securities continue as if such representations, agreements and certifications
were made on the date of such Additional Closings and with respect to the
deposits made therewith, except as such representations, agreements and
certifications relate to their respective By-Laws and as to which they each
represent that their has been no amendment affecting their respective abilities
to perform their respective obligations under the Indenture.
Part II
SPECIAL TERMS AND CONDITIONS OF TRUST
Section 1. The following special terms and conditions are hereby agreed to:
(a) The Securities (including Contract Securities) listed in the Prospectus
relating to this series of Equity Securities Trust (the "Prospectus") have been
deposited in the Trust under this Agreement (see "Portfolio" in Part A of the
Prospectus which for purposes of this Indenture and Agreement is the Schedule
of Securities or Schedule A).
(b) The number of Units delivered by the Trustee in exchange for the
Securities referred to in Section 2.3 is 15,666.
(c) For the purposes of the definition of Unit in item (22) of Section 1.1,
the fractional undivided interest in and ownership of the Trust initially is
1/15,666 of the date hereof.
(d) The term Record Date shall mean the fifteenth day of June and December
commencing on June 15, 1999.
(e) The term Distribution Date shall mean the last business day of June and
December commencing on June 30, 1999.
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(f) The First Settlement Date shall mean January 29, 1999
(g) For purposes of Section 6.1(g), the liquidation amount is hereby
specified to be 40% of the aggregate value of the Securities at the completion
of the Deposit Period.
(h) For purposes of Section 6.4, the Trustee shall be paid per annum an
amount computed according to the following schedule, determined on the basis of
the number of Units outstanding as of the Record Date preceding the Record Date
on which the compensation is to be paid, provided, however, that with respect
to the period prior to the first Record Date, the Trustee's compensation shall
be computed at $.86 per 100 Units:
rate
per
100 number of Units
units outstanding
$0.86 5,000,000 or less
$0.80 5,000,001--10,000,000
$0.74 10,000,001--20,000,000
$0.62 20,000,001 or more
(i) For purposes of Section 7.4, the Depositor's maximum annual supervisory
fee is hereby specified to be $.30 per 100 Units outstanding.
(j) The Mandatory Termination Date shall be February 1, 2002 or the earlier
disposition of the last Security in the Trust.
(k) The fiscal year for the Trust shall end on December 31 of each year.
IN WITNESS WHEREOF, the parties hereto have caused this Reference Trust
Agreement to be duly executed on the date first above written.
[Signatures on separate pages]
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XXXXX & XXXX DISTRIBUTORS, INC.
Depositor
/s/ Xxxxx X. XxXxxxx
By: ______________________________________
Executive Vice President
STATE OF NEW YORK)
: ss:
COUNTY OF NEW YORK)
On this 26th day of January, 1999, before me personally appeared Xxxxx X.
XxXxxxx, to me known, who being by me duly sworn, said that he is the Executive
Vice President of the Depositor, one of the corporations described in and which
executed the foregoing instrument, and that he signed his name thereto by
authority of the Board of Directors of said corporation.
/s/ Xxxxxx Xxxxxxxx
__________________________________________
Notary Public
Xxxxxxx Xxxxxxxx
Notary Public, State of New York
No. 00-0000000
Qualified in New York County
Term Expires 8/31/00
THE CHASE MANHATTAN BANK
Trustee
/s/ Xxxxxxx X. Xxxxxxx
By: ______________________________________
Vice President
STATE OF NEW YORK)
: ss.:
COUNTY OF NEW YORK)
On this 26th day of January, 1999, before me personally appeared Xxxxxxx X.
Xxxxxxx, to me known, who being by me duly sworn, said that (s)he is an
Authorized Signator of The Chase Manhattan Bank, one of the corporations
described in and which executed the foregoing instrument; that (s)he knows the
seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by authority of the Board of Directors
of said corporation and that (s)he signed his/her name thereto by like
authority.
/s/ Ada Xxxx Xxxx
__________________________________________
Notary Public
Ada Xxxx Xxxx
Notary Public, State of New York
No. 4864106
Qualified in New York County
Commission Expires 6-30-2000
