EMPIRE STATE
MUNICIPAL EXEMPT TRUST
GUARANTEED SERIES 66
(and Subsequent Series)
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TRUST INDENTURE AND AGREEMENT
Among
GLICKENHAUS & CO.
and
LEBENTHAL & CO., INC.
as Depositors
THE BANK OF NEW YORK
as Trustee
and
STANDARD & POOR'S CORPORATION
as Evaluator
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Dated: December 18, 1990
433559.1
TRUST INDENTURE AND AGREEMENT
EMPIRE STATE
MUNICIPAL EXEMPT TRUST
GUARANTEED SERIES 66
(and Subsequent Series)
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS, CERTIFICATE.................................. 2
SECTION 1.1. Definitions....................................... 2
SECTION 1.2. Form of Certificate............................... 5
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. Bond Insurance.................................... 15
ARTICLE III ADMINISTRATION OF FUND.................................... 16
SECTION 3.1. Initial Cost...................................... 16
SECTION 3.2. Interest Account.................................. 16
SECTION 3.3. Principal Account................................. 16
SECTION 3.4. Reserve Account................................... 17
SECTION 3.5. Distribution...................................... 17
SECTION 3.6. Distribution Statements........................... 22
SECTION 3.7. Sale of Bonds..................................... 23
SECTION 3.8. Refunding Bonds................................... 25
SECTION 3.9. Bond Counsel...................................... 26
SECTION 3.10. Notice and Sale by Trustee........................ 26
SECTION 3.11. Trustee not to Amortize........................... 26
SECTION 3.12. Liability of Depositors........................... 26
SECTION 3.13. Notice to Depositors.............................. 26
SECTION 3.14. Limited Replacement of Special Bonds.............. 27
ARTICLE IV EVALUATION OF BONDS; EVALUATOR............................ 29
SECTION 4.1. Evaluation by Evaluator........................... 29
SECTION 4.2. Tax Reports....................................... 30
SECTION 4.3. Evaluator's Compensation.......................... 30
SECTION 4.4. Liability of Evaluator............................ 30
SECTION 4.5. Successor Evaluator............................... 30
(i)
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ARTICLE V TRUST FUND EVALUATION, REDEMPTION, PURCHASE
TRANSFER, INTERCHANGE OR REPLACEMENT OF
CERTIFICATES........................................ 32
SECTION 5.1. Trust Fund Evaluation............................. 32
SECTION 5.2. Redemption by Trustee; Purchases by
Depositors........................................ 33
SECTION 5.3. Transfer or Interchange of Certificates........... 35
SECTION 5.4. Certificates Mutilated, Xxxxxxxxx, Stolen
or Lost........................................... 35
ARTICLE VI TRUSTEE..................................... ............. 36
SECTION 6.1. General Definition of Trustee's
Liabilities, Rights and Duties..... .............. 36
SECTION 6.2. Books, Records and Reports........................ 39
SECTION 6.3. Indenture and List of Bonds on File............... 40
SECTION 6.4. Compensation...................................... 40
SECTION 6.5. Removal and Resignation of Trustee;
Successor......................................... 41
SECTION 6.6. Qualifications of Trustee......................... 42
ARTICLE VII RIGHTS OF CERTIFICATEHOLDERS.............................. 43
SECTION 7.1. Beneficiaries of Trust............................ 43
ARTICLE VIII DEPOSITORS................................................ 44
SECTION 8.1. Liabilities; Power of Attorney.................... 44
SECTION 8.2. Discharge......................................... 44
SECTION 8.3. Successors........................................ 45
SECTION 8.4. Resignation....................................... 46
SECTION 8.5. Exclusions from Liability......................... 46
SECTION 8.6. Annual Fee........................................ 47
ARTICLE IX ADDITIONAL COVENANTS; MISCELLANEOUS
PROVISIONS.......................................... 47
SECTION 9.1. Amendments........................................ 47
SECTION 9.2. Termination....................................... 48
SECTION 9.3. Construction...................................... 50
SECTION 9.4. Registration of Units and Trust Fund.............. 50
SECTION 9.5. Written Notice.................................... 51
SECTION 9.6. Severability...................................... 51
SECTION 9.7. Dissolution of Depositor not to Terminate......... 51
----------------------------------------------------
This "Table of Contents" does not
constitute part of the Indenture.
433559.1
TRUST INDENTURE AND AGREEMENT DATED December 18, 1990
AMONG XXXXXXXXXXX & CO.,
AND
LEBENTHAL & CO., INC., as Depositors,
THE BANK OF NEW YORK, as Trustee,
and
STANDARD & POOR'S CORPORATION, as Evaluator
W I T N E 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 Depositors desire 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 Depositors, concurrently with the execution and
delivery hereof, are establishing Empire State Municipal Exempt Trust,
Guaranteed Series 66, wherein certain interest bearing obligations will be
deposited by the Depositors, 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 66 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 66 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;
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(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 Depositors, 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 3.8 and 3.14 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
Depositors 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.
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(5) "Contract Bond" 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 Depositors have contracted to purchase for the Trust Fund
pursuant to Section 3.14 hereof.
(6) "Date of Deposit" shall mean the date of the applicable
Reference Trust Agreement.
(7) "Depositors" shall mean Xxxxxxxxxxx & Co. and Lebenthal & Co.,
Inc. and their successors in interest, or any successor depositor or depositors
as hereinafter provided for.
(8) "Evaluation Time" shall mean 4:00 P.M. New York Time during the
initial offering period and 2:00 P.M. New York Time thereafter.
(9) "Evaluator" shall mean Standard & Poor's Corporation 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 Trust Indenture and Agreement as
originally executed or, if amended by an applicable Reference Trust Agreement or
as hereinafter provided, as so amended.
(14) "Insurance" shall mean the contract or contracts, or policy or
policies, and any supplements or amendments thereto, of insurance (except for
such contracts, policies or amendments relating thereto obtained with respect to
Pre-insured Bonds by the issuers of those Pre-insured Bonds or by persons other
than the Trust) guaranteeing the payment when due of the principal of and
interest on the Bonds held pursuant and subject to this Indenture, together with
the proceeds, if any, thereof payable to or received by the Trustee for the
benefit of the Trust and the Certificateholders or guaranteeing the stated
payment of interest and principal with respect to any such Bonds as long as they
remain in the Trust.
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(15) "Insurer" shall mean the Municipal Bond Investors Assurance
Corporation, its successors and assigns, having its headquarters in Armonk, New
York, and issuing the Insurance, or any corporation into which it may be merged
or with which it may be consolidated resulting from the merger or consolidation
to which it shall be a party or any corporation succeeding to all or
substantially all of its business, or any successor Insurer designated as such
by operation of law.
(16) "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.
(17) "Monthly Distribution Date" shall mean the first day of each
month following a Monthly Computation Date.
(18) "Permanent Insurance" shall mean the insurance obtained from
the Insurer by the Trustee on a Bond upon the sale of such Bond from the Trust,
as described in the Prospectus.
(19) "Pre-insured Bonds" shall mean Bonds which are insured as long
as they are outstanding under insurance policies obtained by the issuers of such
Bonds or by parties other than the Trust.
(20) "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.
(21) "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.
(22) "Reserve Account" shall mean the account established pursuant
to Section 3.4 hereof.
(23) "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.
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(24) "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.
(25) "Semi-Annual Distribution Date" shall mean the first day of
June and December following a Semi-Annual Computation Date.
(26) "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.
(27) "Trustee" shall mean The Bank of New York or any successor
trustee as hereinafter provided for.
(28) "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.
(29) 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.
(30) 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:
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[FACE]
Plan of Distribution
No. Units
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. and Lebenthal & Co., Inc. (hereinafter called the
"Depositors"), The Bank of New York (hereinafter called the "Trustee") and
Standard & Poor's Corporation (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.
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IN WITNESS WHEREOF, each of the Depositors has caused this
Certificate to be executed in facsimile by a General Partner, the President or a
Vice President thereof and The Bank of New York, as Trustee, has caused this
Certificate to be executed in its corporate name by an authorized officer.
Date:
XXXXXXXXXXX & CO., Depositor
By:
General Partner
LEBENTHAL & CO., INC.,
Depositor
By:
President
THE BANK OF NEW YORK, Trustee
By:
Authorized Officer
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433559.1
[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 Depositors hereby grant and convey all of their 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
Depositors 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
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433559.1
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 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, payment of any insurance
premium, 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
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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 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 Depositors,
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 Depositors 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.
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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, together with a
completed form for selection of a plan of distribution provided by the Trustee.
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 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 Depositors, concurrently with the
execution and delivery hereof, have 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 Depositors 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 Depositors and the
seller of such Bond is terminated by such seller for any reason beyond the
control of the Depositors, the Depositors shall forthwith take the remedial
action specified in Section 3.14.
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 Depositors.
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 or the President or one of the Vice Presidents of
each of the Depositors 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 Depositors and Trustee shall
bind the Depositors and Trustee, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the
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authentication and delivery of such Certificates or did not hold such offices at
the date of such Certificates.
SECTION 2.5. Bond Insurance. Concurrently with the delivery to the
Trustee of the Bonds listed in Schedule A the Insurer has delivered to and
deposited with the Trustee the Insurance to protect the Trust and the
Certificateholders against nonpayment of principal and interest when due on any
Bond as long as such Bond is held by the Trust pursuant and subject to this
Indenture.
The Trustee shall take all action deemed necessary or advisable in
connection with the Insurance to continue the Insurance in full force and
effect, all in such manner as in its sole discretion shall appear to result in
the most protection and least expense to the Trust.
At all times during the existence of the Trust, the Insurance shall
provide for payment by the Insurer to the Trustee of any amounts of principal
and interest due, but not paid, by the issuer of the Bond or by the insurer of a
Pre-insured Bond, as long as such Bond is held by the Trust. The Trustee shall
promptly notify the Insurer of any nonpayment, or significant risk of nonpayment
known to the Trustee, of principal or interest and the Insurer shall, in
accordance with the terms of the policy or policies, make payment to the Trustee
of all amounts of principal and interest at the time due, but not paid.
Notwithstanding any other provision hereof, upon the making of any
payment by the Insurer to the Trustee as set forth in the preceding paragraphs,
the Insurer shall succeed to the rights of the Trustee under the Bond or Bonds
involved to the extent of the payments made. Concurrently with the payment of
any amounts by the Insurer occasioned by the nonpayment thereof by the issuer of
a Bond or by the issuer or insurer of a Pre- insured Bond, the Trustee shall
execute and deliver to the Insurer any receipt, instrument or document required
to evidence the right of the Insurer in the Bond or Bonds involved to payment of
principal and/or interest thereon to the extent of the payments made by the
Insurer to the Trustee.
With respect to Pre-insured Bonds in the Trust, the Trustee shall
promptly notify both the insurer of such Pre- insured Bonds and the Insurer of
any nonpayment of such principal of or interest on such Bonds and if such
insurer shall fail to make payments to the Trustee, shall present evidence to
the Insurer that demand for payment has been made to such insurer. Upon receipt
of such notice and of such evidence of demand for payment made to the insurer,
the Insurer shall pay to the Trustee any amount of principal and interest due
but not paid on such Pre-insured Bonds.
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The Trustee shall also take such action required under Sections 3.7,
3.8, 3.10, 5.2 and 6.4 hereof with respect to Permanent Insurance.
ARTICLE III
ADMINISTRATION OF FUND
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 the Trustee's counsel and other reasonable expenses in
connection therewith, the fees of the Evaluator during the initial offering
period and all costs of registering the Units under the Securities Act of 1933
and the Empire State Municipal Exempt Trust under the Investment Company Act of
1940 shall be paid by the Depositors, provided, however, that the liability on
the part of the Depositors 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 2.1.
SECTION 3.2. 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."
SECTION 3.3. 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 or Insurance on any 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 Depositors fail to timely purchase a
Contract Bond and have not given the Failed Contract Notice (as defined in
Section 3.14) at which time the moneys and/or letters of credit attributable to
the Contract Bond not
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purchased by the Depositors shall be credited to the Principal Account; or (ii)
the Depositors have 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 Depositors also notify 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 3.14), 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 Depositors 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 Depositors 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 3.5.
SECTION 3.4. 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 3.5. 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 Depositors are
entitled to receive at such time pursuant to Section 8.6 and the amount which
the Insurer is entitled to receive at such time in payment of premiums for the
Insurance delivered pursuant to Section 2.5), and shall pay to the
Certificateholders then of record, namely the Depositors,
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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.
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 3.5;
(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
Depositors the amount that they are at the time entitled to receive pursuant to
Section 8.6;
(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 Depositors; and
(e) deduct from the Interest Account, or, to the extent funds are
not available in such Account, from the Principal Account, and pay to the
Insurer the amount equal to the premium which it is at that time entitled to
receive in accordance with the terms of the Insurance deposited with the Trustee
pursuant to Section 2.5.
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
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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 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. In April of each year, the Trustee will furnish each Certificateholder
a card to be returned to the Trustee by May 15 of each year if the
Certificateholder wishes to change his plan of distribution. Those wishing to
change shall so indicate on the card and return it to the Trustee and accompany
the card by the surrender of the Certificate to which it relates. Changes may be
made only as
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herein provided and will become effective as of the following May 16 to continue
until further notice.
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 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
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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 Depositors (i) fail to replace any Special Bond (as defined
in Section 3.14) or (ii) are unable or fail to enter into any contract for the
purchase of any New Bond in accordance with Section 3.14, the Trustee shall
distribute to all Certificateholders, as of the expiration of the Purchase
Period (as defined in Section 3.14), 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
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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 3.6 hereof.
SECTION 3.6. 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 3.14 and for redemption pursuant to Section 5.2,
(3) the deduction for payment of applicable taxes, insurance
premiums to the Insurer, compensation of the Evaluator, fees and expenses of the
Trustee and bond counsel and the annual fee of the Depositors 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;
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(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 3.14 and for redemptions pursuant to Section
5.2,
(3) the deductions for payment of applicable taxes, insurance
premiums to the Insurer, compensation of the Evaluator, fees and expenses of the
Trustee and bond counsel and the annual fee of the Depositors 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; 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 3.7. Sale of Bonds. In order to maintain the sound
investment character of the Trust Fund, the Depositors may direct the Trustee to
sell Bonds, provided the Depositors deem 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 Depositors, provided that the
Depositors have 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;
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(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
Depositors have 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;
(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 Depositors, 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
Depositors, with consideration of the Insurance described in Section 2.5, 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 3.7(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
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(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 Depositors, upon which the
Trustee shall rely, the Trustee shall determine, based upon such direction,
whether it is in the best interests of the Certificateholders to obtain
Permanent Insurance with respect to the specified Bond and then proceed to
obtain such Permanent Insurance, if applicable, 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 Depositors
that they have 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 Depositors or by
reason of the failure of the Depositors to give any direction, and in the
absence of such direction the Trustee shall have no duty to sell any Bonds under
this Section 3.7 except to the extent otherwise required by Section 3.10 of this
Indenture.
SECTION 3.8. 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 Depositors shall instruct the Trustee in writing
to reject such offer and either to hold or sell such Bonds in accordance with
Section 3.7, except that if (1) the issuer is in default with respect to such
Bonds or (2) in the opinion of the Depositors, given in writing to the Trustee,
the issuer will probably default with respect to such Bonds in the reasonably
foreseeable future, the Depositors shall instruct the Trustee in writing to
accept or reject such offer or take any other action with respect thereto as the
Depositors may deem proper; provided, however, that the Trustee may accept such
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 3.8, the
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acquisition by the Trust Fund of any securities other than the
Bonds is prohibited.
SECTION 3.9. Bond Counsel. The Depositors may employ from time to
time as they 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 3.7 or the substitution of any securities for Bonds as the
result of any refunding permitted under Section 3.8. 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 3.5(d) hereof.
SECTION 3.10. 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 Depositors thereof. If within thirty days after such notification the
Depositors have 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 3.7 and 3.8, and neither the Trustee
nor the Depositors shall be liable or responsible in any way for depreciation or
loss incurred by reason of such sale.
SECTION 3.11. 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 3.12. Liability of Depositors. The Depositors 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 their own gross negligence, bad
faith or willful misconduct. The Depositors 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
them by the Trustee, the Evaluator, bond counsel, or any other person pursuant
to this Indenture and in furtherance of their duties.
SECTION 3.13. Notice to Depositors. 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 Depositors and shall thereupon
take such
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action or refrain from taking any action as the Depositors shall in writing
direct; provided, however, that if the Depositors shall not within five business
days of the giving of such notice to the Depositors direct the Trustee to take
or refrain from taking any action, the Trustee shall take such action, subject
to the requirements of Section 3.7, as it, in its sole discretion, shall deem
advisable. Neither the Depositors nor the Trustee shall be liable to any person
for any action or failure to take action with respect to this Section 3.13.
SECTION 3.14. 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
Depositors or the Trustee (such failed Contract Bonds being herein called the
"Special Bonds"), the Depositors 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 Depositors. 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
Depositors determine not to replace the Special Bond, in which case the
"Purchase Period" will terminate on the date of such determination), the
Depositors 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) Each New Bond shall be rated at least equal to the Special Bond
which it replaces by Standard & Poor's Corporation
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or Xxxxx'x Investors Service, or comparably rated by any other nationally
recognized credit rating service rating debt obligations which shall be
designated by the Depositors and shall be satisfactory to the Trustee.
(c) The purchase price of the New Bonds (exclusive of accrued
interest) shall not exceed the principal attributable to the Special Bonds.
(d) The Depositors 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 identify the New Bonds, (ii) state that the contract
to purchase, if any, entered into by the Depositors 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.
(e) Each New Bond purchased must be a Bond which will be acceptable
to the Insurer to be insured under a policy or policies of insurance identical
in form and substance to the Insurance and will be so insured upon acquisition
by the Trust.
Upon satisfaction of the foregoing conditions with respect to any
New Bond, the Depositors shall pay the purchase price for the New Bond from
their 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 from the
Depositors from the moneys and/or letters of credit so credited to the Principal
Account. If the Depositors have paid the purchase price, and, in addition, the
Trustee has credited moneys of the Depositors to the Principal Account, the
Trustee shall forthwith return to the Depositors the portion of such moneys that
is not properly distributable to Certificateholders pursuant to Section 3.5.
Whenever a New Bond is acquired by the Depositors pursuant to the
provisions of this Section 3.14, 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 Depositors 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 3.14; provided, however, that this provision shall not
protect the Depositors against any liability to which they would otherwise be
subject by
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reason of willful misconduct, bad faith or gross negligence in
the performance of their duties.
Notwithstanding anything to the contrary in this Section 3.14, 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.
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 Depositors 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 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
Depositors) 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 Depositors' opinion, in significant risk of
such default ("Defaulted Bonds") and which are covered by the Insurance pursuant
to Section 2.5 hereof, on the basis of the value of the Insurance as well as 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. As to any evaluation of Defaulted Bonds
the value of the Insurance will be equal to the difference between (i) the
market value of Defaulted Bonds assuming the exercise of the right to obtain
Permanent Insurance
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(less the insurance premium attributable to the purchase of Permanent Insurance
and the related custodial fee) and (ii) the market value of such Defaulted Bonds
not covered by Permanent Insurance. In any case the Evaluator will consider the
ability of the Insurer to meet its commitments under the Insurance, including
the commitment to issue Permanent Insurance. 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 Depositors
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, Depositors 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 Depositors 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 Depositors and the Trustee shall use their best efforts to
appoint a successor evaluator having
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qualifications and at a rate of compensation satisfactory to the Depositors and
the Trustee. Such appointment shall be made by written instrument executed by
the Depositors and the Trustee, in duplicate, one copy of which shall be
delivered to the resigning Evaluator and one copy to the successor evaluator.
The Depositors 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 Depositors and the Trustee. Such
appointment shall be made by written instrument executed by the Depositors 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 Depositors 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 Depositors 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.
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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 desired by the
Trustee or requested by the Depositors. 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 3.14 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
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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 Depositors. 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
Depositors, 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
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 Depositors 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 Depositors, the
Trustee shall notify the Depositors of such tender. The Depositors 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 Depositors 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.
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Any Certificate so purchased by the Depositors may at the option of
the Depositors 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 Depositors receive a greater
amount on such redemption than the amount the Depositors paid in purchasing such
Certificate plus accrued interest from the date of purchase of such Certificate
by the Depositors, less the amount, if any, of any distributions from the
Principal Account received by the Depositors with respect to such Certificate.
If the Depositors do not elect to purchase any Certificate tendered
to the Trustee for redemption, or if a Certificate is being tendered by the
Depositors 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 Depositors 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 Depositors 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 Depositors, and for payment of
expenses hereunder, provided that if the Depositors 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. The Depositors shall also designate, on such
list of Bonds designated to be sold, the Bonds upon the sale of which the
Trustee shall obtain Permanent Insurance from the Insurer, provided that if the
Depositors shall for any reason fail to make such designation, the Trustee, in
its sole discretion, shall make such designation if it deems such designation to
be in the best interests of Certificateholders. The Trustee is hereby authorized
to pay and shall pay out of the proceeds of the sale of the Bonds which are
covered by Permanent Insurance, any premium for such Permanent Insurance and any
related custodial fee paid to the custodian of Bonds covered under the Permanent
Insurance and the net proceeds after such deductions shall be credited to the
Principal Account
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and the net proceeds representing accrued interest shall be
credited to the Interest Account.
Neither the Depositors 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.
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 Depositors 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
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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 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,
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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 Depositors 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 Depositors, and the Trustee shall in no event assume or incur any
liability, duty or obligation to any Certificateholder or the Depositors 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
Depositors 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; 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
independent certified public accountants designated from time to
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time by the Depositors, 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 Depositors so long as the Depositors maintain
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 Depositors
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
Depositors, at least 33 1/3% of the Units at the time 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
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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;
(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 Depositors; and
(k) no payment to a 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 Depositors and their
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 Depositors and their 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
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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.
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)
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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 3.7 and 5.2 (i) Bonds from the current list of Bonds
designated to be sold pursuant to Sections 3.7 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 Depositors and mailing a copy of a 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 Depositors
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
Depositors shall deem it to be in the best interests of the Certificateholders,
then in any such case the Depositors 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 Depositors to each Certificateholder then of record;
(b) any successor trustee appointed hereunder shall execute,
acknowledge and deliver to the Depositors 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,
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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
Depositors 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 Depositors, 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;
(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
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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
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persons by reason of any action taken by the parties to this Indenture, or any
other cause whatsoever.
ARTICLE VIII
DEPOSITORS
SECTION 8.1. Liabilities; Power of Attorney. The Depositors shall be
jointly and severally liable in accordance herewith for the obligations imposed
upon and taken by the Depositors hereunder; provided, however, that, without in
any way affecting or diminishing such joint and several liability, a Depositor
shall indemnify the other Depositor and hold the other Depositor harmless from
and against any and all costs, expenses and liabilities (including attorneys'
fees) which such other Depositor may suffer or incur as a result of or by reason
of any act or failure to act hereunder on the part of the indemnifying
Depositor. At all times prior to the termination of the Trust Fund and while the
Depositors shall continue to act jointly hereunder, there shall be maintained on
file with the Trustee a power of attorney executed in favor of one Depositor by
the other Depositor constituting and appointing the non-executing Depositor the
true and lawful agent and attorney-in-fact of the executing Depositor to execute
and deliver for and on behalf of the executing Depositor any and all notices,
opinions, certificates, lists, demands, directions, instruments or other
documents provided or permitted to be executed or delivered by the Depositors
hereunder or to take any other action in respect hereof. Such power of attorney
shall continue in effect as to the executing Depositor until written notice of
revocation thereof has been given by such executing Depositor to the Trustee.
Prior to receipt of such notice of revocation the Trustee shall be entitled to
rely conclusively upon such power of attorney as authorizing the non-executing
Depositor to give any notice, opinion, certificate, list, demand, direction,
instrument or other document provided for or permitted hereunder or to take any
other action in respect hereof on behalf of the executing Depositor as to which
such power of attorney is in effect.
SECTION 8.2. Discharge. The following provisions shall
provide for the discharge of a Depositor and the liability of the
Depositors in the event of the discharge of a Depositor:
(a) in the event that any 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 all Depositors from the Trustee or if any Depositor shall become
incapable of acting or shall be adjudged a bankrupt or insolvent, or a receiver
of the property of any Depositor shall be appointed
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or any public officer shall take charge or control of any Depositor or its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then such Depositor shall forthwith be and shall be deemed to be
discharged forever as a Depositor hereunder and thereupon the remaining
Depositor shall act hereunder without the necessity of any other or further
action on its part or their part or on the part of the Trustee;
(b) in the event that the power of attorney referred to in Section
8.1 shall be revoked by written notice given by the executing Depositor and it
shall not be replaced within one business day by another power of attorney
conforming with the requirements of said Section 8.1, the Depositors shall be
deemed to have been unable to reach agreement with respect to action to be taken
jointly by them hereunder and thereupon the Depositor which has revoked the
power of attorney executed by it shall be discharged hereunder upon the
expiration of such one-day period and thereupon the other Depositor shall act
hereunder without the necessity of any other or further action on its part or on
the part of the Trustee; and
(c) notwithstanding the discharge of a Depositor in accordance with
this Section 8.2, or the resignation of a Depositor pursuant to Section 8.4,
such 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 Depositors before the date of such discharge or by the
undischarged Depositor before or after 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 any
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 any
Depositor to a successor corporation or partnership as permitted by the next
following sentence, such Depositor shall be relieved of all further liability
under this Agreement. Any Depositor may transfer all or substantially all of its
assets to a corporation or partnership which carries on the business of such
Depositor, if at the time of such transfer such successor duly assumes all the
obligations of such Depositor under this Agreement.
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SECTION 8.4. Resignation. If at any time any Depositor shall desire
to resign its position as a Depositor hereunder and if at such time the other
Depositor maintains a net worth (determined in accordance with generally
accepted accounting principles) of at least $1,000,000 and the other Depositor
is agreeable to such resignation, the Depositor desiring to resign may resign by
delivering to the Trustee an instrument executed by such resigning Depositor and
consented to by the remaining Depositor and upon such delivery the resigning
Depositor shall be discharged and shall no longer be liable in any manner
hereunder except as to acts or omissions occurring prior to such delivery and
the remaining Depositor shall thereupon perform all duties and be entitled to
all rights under this Indenture; provided, however, that concurrently with or
subsequent to such resignation the remaining Depositor and the Trustee may
appoint a new Depositor to act with the remaining Depositor and to assume the
duties of the resigning Depositor by an instrument executed by the remaining
Depositor, the Trustee and the new Depositor. 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 Depositors:
(a) no Depositor shall be under any liability to the other
Depositor, 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 Depositors against any
liability to which they would otherwise be subject by reason of their own
willful misconduct, bad faith or gross negligence. The Depositors 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 them, or to any of them by the other
Depositors, the Trustee, bond counsel, the Evaluator or any other person. The
Depositors 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 Depositors shall not be under any obligation to appear in,
prosecute or defend any legal action which in their opinion may involve them in
any expense or liability; provided, however, that the Depositors may in their
discretion undertake any such action which they may deem necessary or desirable
in respect of this Agreement and the rights and duties of the
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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 Depositors against any liability to the Trust
Fund or to the Certificateholders to which the Depositors would otherwise be
subject by reason of their own willful misconduct, bad faith or gross
negligence.
SECTION 8.6. Annual Fee. For services performed under this
Indenture, the Depositors 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 Depositors in rendering their
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 Depositors in any calendar year,
together with similar fees received by them 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 Depositors will
calculate the actual costs of their services by keeping records of the amount of
time spent by each employee of the Depositors working on the portfolio
supervision and determining what portion of such employee's salary to allocate
to such services. The Depositors shall also keep records of the appropriate
allocation of the costs of periodicals, computer time, communications expenses
and other related expenses.
The Depositors' 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
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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 Sections 3.8 and 3.14, 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 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
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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
Certificateholders, including, but not limited to, situations in which a Bond or
Bonds insured by the Insurance reflect a deteriorated market price resulting
from a fear of default and 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 Depositors 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
3.4, 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
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Certificateholders, setting forth the data and information in substantially the
form and manner provided for in Section 3.6 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.
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 Depositors
agree and undertake on their own parts 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.
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SECTION 9.5. Written Notice. Any notice, demand, direction or
instruction to be given to the Depositors hereunder shall be in writing and
shall be duly given if mailed or delivered to the Depositors c/o Glickenhaus &
Co., 0 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other address as
shall be specified by the Depositors 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, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, 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 Standard & Poor's Corporation shall be in writing and
shall be duly given if mailed or delivered to Standard & Poor's Corporation,
Attention: Vice President, Municipal Bond Department, 00 Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx 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 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 any or all Depositors 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 Depositors have caused this Trust Indenture
and Agreement to be executed for Glickenhaus & Co. by one of its General
Partners and for Lebenthal & Co., Inc. by its President with their corporate
seals 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 Standard & Poor's
Corporation has caused this Trust Indenture and Agreement to be executed by one
of its Vice
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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]
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GLICKENHAUS & CO.
By/s/ X. Xxxxx Xxxxxxx
Attorney-in-Fact
for each of the
General Partners
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
I, Xxxx Victory, a Notary Public in and for the said County in the
State aforesaid, do hereby certify that X. Xxxxx Xxxxxxx, 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 18th day of December,
1990.
/s/ Xxxx Xxxxxxx
Notary Public
[SEAL]
Commission Expires: 5/31/92
433559.1
Lebenthal & Co., Inc.
By/s/ Xxxxx Xxxxxxxx
President
ATTEST:
By/s/ X. Xxxxxx Xxxxxxx
Secretary
[CORPORATE SEAL]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
I, Xxxxx Xxxxxxx, a Notary Public in and for the said County in the
State aforesaid, do hereby certify that Xxxxx Xxxxxxxx and X. Xxxxxx Xxxxxxx,
personally known to me to be the same persons whose names are subscribed to the
foregoing instrument and personally known to me to be the President and
Secretary, respectively, of LEBENTHAL & CO., INC., appeared before me this day
in person, and acknowledged that they signed, sealed with the corporate seal of
LEBENTHAL & CO., INC., and delivered the said instrument as their free and
voluntary act as such President and Secretary, respectively, and as the free and
voluntary act of said LEBENTHAL & CO., INC., for the uses and purposes therein
set forth.
GIVEN, under my hand and notarial seal this 7th day of December,
1990.
/s/ Xxxxx Xxxxxxx
Notary Public
[SEAL]
My commission expires: 7/10/91
433559.1
THE BANK OF NEW YORK, Trustee
By/s/ Xxxxxxxx Xxxxxxxx
Vice President
ATTEST
By/s/ Xxxxxxx Xxxxxx
(CORPORATE SEAL)
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
I, Xxxxxx Xxx Xxxx, a Notary Public in and for the said County in
the State aforesaid, do hereby certify that Xxxxxxxx Xxxxxxxx and Xxxxxxx
Xxxxxx, 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 Assistant Vice President, 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 Assistant Vice
President, 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 12th day of December,
1990.
/s/ Xxxxxx X. Xxx Xxxx
Notary Public
[SEAL]
My commission expires: 6/3/91
433559.1
STANDARD & POOR'S CORPORATION,
Evaluator
By/s/ Xxxxxx X. Xxxxxxx
Vice President
ATTEST:
By/s/ Xxxxxx X. Xxxxxx
General Manager
(CORPORATE SEAL)
433559.1
