EMPIRE STATE MUNICIPAL EXEMPT TRUST SERIES 185 REFERENCE TRUST AGREEMENT
Exhibit
1.1
EMPIRE
STATE MUNICIPAL EXEMPT TRUST
SERIES
185
This
Reference Trust Agreement dated August 14, 2008, among Glickenhaus & Co., as
Depositor, The Bank of New York Mellon, as Trustee and CapeLogic, Inc., as
Evaluator, sets forth certain provisions in full and incorporates other
provisions by reference to the document entitled “Empire State Municipal Exempt
Trust, Guaranteed Series 182 (and Subsequent Series), Trust Indenture and
Agreement” dated November 9, 2005, as amended in part by this Reference
Trust Agreement (herein as amended or supplemented called the
“Indenture”). This Reference Trust Agreement and the Indenture, as
incorporated by reference herein, will constitute a single
instrument.
WITNESSETH
THAT:
In
consideration of the premises and of the mutual agreements herein contained, the
Depositor, the Trustee, and the Evaluator agree as follows:
Part
I
STANDARD
TERMS AND CONDITIONS OF TRUST
Subject
to the provisions of Part II hereof, all the provisions contained in the
Indenture are herein incorporated by reference in their entirety and shall be
deemed to be a part of this instrument as fully and to the same extent as though
said provisions had been set forth in full in this instrument, except that the
Indenture is amended in the following manner.
(a) Section 1.1
shall be amended to add the definition “Diversification Test Day” which shall
read as follows:
“‘Diversification
Test Day’ shall mean the date occurring five Business Days prior to the last
Business Day of each quarter of each taxable year of the Trust.”
(b) Section 1.1
shall be amended to add the definition of “Non-Qualifying Securities” which
shall read as follows:
“As of
each Diversification Test Day, all Securities the holding of which would, unless
cured as set forth in Section 3.16, cause a Trust not to qualify as a
Regulated Investment Company by reason of Sections 851(b)(4) and 851(c) of
Internal Revenue Code of 1986, as amended (the “Code”) or any successor
provision.”
(c) Section 1.1
shall be amended to add the definition of “Regulated Investment Company” which
shall read as follows:
“A Trust
that, as disclosed in its Prospectus, intends to be treated and to qualify as a
‘regulated investment company’ within the meaning of the Code.”
(d) Section 3.6
shall be amended by adding the following after the tenth paragraph
thereof:
“Distributions
shall be made as follows (or in any other manner that, in the opinion of counsel
to the Sponsor or the independent public accountants or auditors employed
pursuant to Section 6.1(e), will satisfy then current requirements of the
Code):
“(a) Distribution of Capital Gain Net
Income for Purposes of Section 4982 of the Code. For each calendar year,
the Trustee shall determine whether the Trust realized any capital gain net
income for the one-year period ending on October 31 of such calendar year.
If the Trust realized capital gain net income the Trustee shall, during December
of such calendar year, declare a distribution of such capital gain net income
(reduced by any amount thereof previously distributed on account of such period)
payable to Unitholders of record on a specified date in December, and shall make
this distribution to such Unitholders no later than January 31 of the next
calendar year.”
“(b)
Distribution of Net Capital for Purposes of Section 852 of the Code. After
the tax return for any taxable year of the Trust is prepared, but prior to the
time such tax return is required to be filed (including extensions), the Trustee
shall determine whether the Trust realized any net capital gain for such year
and shall declare a distribution of any such net capital gain (reduced by any
amount thereof previously distributed on account of such year in respect of
which a dividends-paid deduction is available) and shall make this distribution
with the next Interest Distribution, in no event later than the earlier of 12
months after the close of the taxable year or the date of the first regular
dividend payment made after such declaration.”
“(c)
Distribution of Taxable Income of the Trust other than Capital Gain Net Income
for Purposes of Section 4982 of the Code. In December of each calendar
year, the Trustee shall estimate the Trust’s taxable income (without regard to
its capital gain net income) for the calendar year and shall declare a
distribution of such estimated taxable income (reduced by any amount thereof
previously distributed on account of such year) during such December to
Unitholders of record on a date in such
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December
specified by the Trustee and shall make this distribution to such Unitholders no
later than January 31 of the next calendar year. If after the Trustee has
estimated the Trust’s taxable income (without regard to its capital gain net
income) for the calendar year the Trust recognizes additional taxable income
(other than capital gain) in such calendar year that was not included in the
prior estimate of the Trust’s taxable income (e.g., gain from the disposition of
a Security treated as ordinary income under the market discount rules of
Sections 1276-78 of the Code) for such year, the Trustee shall re-estimate the
Trust’s taxable income for the calendar year and, if necessary, declare and make
any additional distribution in the same manner as set forth in the immediately
preceding sentence.”
“(d)
Distribution of Taxable Income of the Trust other than Net Capital Gain for
purposes of Section 852 of the Code. After the tax return for any taxable
year of the Trust is prepared, but prior to the time such tax return is required
to be filed (including extensions), the Trustee shall determine the Trust’s
taxable income (without regard to its net capital gain) for such year and shall
declare a distribution of such taxable income (reduced by any amount thereof
previously distributed on account of such year) and shall make this distribution
with the next Interest Distribution, but in no event later than the earlier of
12 months after the close of the taxable year or the date of the first regular
dividend payment after such declaration.”
“(e)
Withdrawals from Principal Account. Such amounts as shall be necessary to enable
the Trust to comply with the foregoing provisions of this Section 3.6 may
be withdrawn from the Principal Account and credited to the Interest Account.
The Trustee shall reserve amounts sufficient to satisfy the requirements of this
Section 3.6 within the Principal Account, as principal, without interest,
and not distribute such amounts to Unitholders until the Termination Date set
forth in the Prospectus.”
(e) Section 3.8
shall be amended by adding the following section (i):
“(i) that
the sale of such Bond is necessary or advisable (i) to maintain the
qualification of the Trust as a Regulated Investment Company under the Code,
(ii) to provide funds to make any distribution for a taxable year pursuant
to the fifth paragraph of Section 3.6.”
(f) Section 3.15(d)
shall be hereby deleted and replaced with the following:
“Each New
Bond purchased must be a Bond of investment grade quality, which is rated at
least BBB by Standard & Poor’s or at least Baa by ▇▇▇▇▇’▇.”
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(g) Section 3.16
shall be hereby deleted and replaced with the following:
“SECTION 3.16 Diversification Tests.
(a) At least five Business Days prior to the Diversification Test Day
occurring in the first quarter of the first taxable year of the Trust, the
Trustee shall request in writing from independent certified public accountants
or auditors employed pursuant to Section 6.1(e) written certification, in
form and substance satisfactory to the Trustee and its counsel, as to whether
there are any Non-Qualifying Securities held in the Trust (i) on such
Diversification Test Day and (ii) on the last Business Day of the first
quarter of the first taxable year of the Trust, and such certification shall be
delivered to the Trustee and to the Sponsor no later than (1) the Business
Day following such Diversification Text Day and (2) two hours after the
Evaluation Time on such last Business Day, respectively. In the event that such
accountants’ certification states that any Non-Qualifying Securities are held by
the Trust as of either day, the Trustee, at the direction of the Sponsor, shall
sell such portion of the Non-Qualifying Securities or take such other action as
the Sponsor may direct as necessary so that no Non-Qualifying Securities are
held by the Trust on the last Business Day of the first quarter of the first
taxable year of the Trust. On the last Business Day of the first quarter of the
first taxable year of the Trust the Trustee shall certifying in form and
substance satisfactory to the Sponsor and its counsel to the effect that no
Non-Qualifying Securities are held by the Trust on such last Business
Day.”
“(b) With respect to each subsequent
quarter of each taxable year of the Trust (a “Tax Quarter”) in which the Trust
has made an “acquisition of securities or other property” within the meaning of
Section 851(d) of the Code or successor provision, at least five Business
Days prior to the Diversification Test Day occurring in such Tax Quarter the
Trustee shall request in writing from independent certified public accountants
designated by the Sponsor pursuant to Section 6.1(e) written
certifications, in form and substance satisfactory to the Trustee and its
counsel, as to whether there are any Non-Qualifying Securities held in the Trust
on such Diversification Test Day and on the last Business Day of such Tax
Quarter; provided that if any such acquisition shall occur in such Tax Quarter
subsequent to the fifth Business Day prior to such Diversification Test Day, the
Trustee shall immediately thereafter request in writing such accountants’
written certification as of the last Business Day of such Tax Quarter. Such
certifications shall be delivered to the Trustee and to the Sponsor no later
than (i) the Business Day following such Diversification Test Day or
(ii) such last Business Day, as the case may be. In the event that such
accountants’ certifications with respect to the Diversification Test Day in such
Tax Quarter state that any Non-Qualifying Securities are
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held by
the Trust as of such Diversification Test Day, the Trustee, at the direction of
the Sponsor, shall sell such portion of the Non-Qualifying Securities as
necessary so that no Non-Qualifying Securities are held by the Trust on the last
Business Day of the then current Taxable Quarter or take such other action as
the Sponsor may direct. In the event that such accountants’ certifications with
respect to the last Business Day of such Tax Quarter states that any
Non-Qualifying Securities are held by the Trust as of such last Business Day,
the Trustee, at the direction of the Sponsor, shall sell, no later than 20 days
after the end of such Tax Quarter, such portion of the Non-Qualifying Securities
or take such other action as shall be directed by the Sponsor as necessary, so
that the Trust maintains its qualification as a Regulated Investment Company.
Within 25 days after the end of such Tax Quarter, the Trustee shall certify to
the Sponsor, in form and substance satisfactory to the Sponsor and its counsel,
that any such action required hereinabove has been taken.”
“(c)
In making the necessary computations under this Section 3.16, the
independent certified public accountants shall compute the fair market value of
the Bonds by (1) taking the mean between the bid and offering side
evaluations of the Bonds in the Trust or the closing sales prices of the Bonds
as furnished to them by the Evaluator, including any accrued interest thereon;
and by (2) treating Contract Securities as if the Bonds subject to such
contracts had been acquired by the Trust.”
(h) Section 4.1
shall be amended by adding the following paragraph at the end of
Section 4.1:
“The
Evaluator shall furnish to the independent certified public accountants or
auditors employed pursuant to Section 6.1(e) bid and offering side
evaluations of the Bonds or, if not available, the closing sales prices of the
Bonds, as of each Diversification Test Day, and the last Business Day of each
Tax Quarter (as defined in Section 3.16(b)). These evaluations shall be
furnished promptly on the day on which they are made.”
(i) Section
6.1 shall be amended to add a new ARTICLE 6.1 (l) which shall read as
follows:
“(i) if
the Trustee’s duties and obligations become unduly burdensome with respect to
the Trustee’s reporting requirements to Unitholders so that the Trustee’s fees
and expenses reach levels that would significantly constrain the marketability
and saleability of the Trusts, or if is otherwise impracticable for the Trustee
to comply with any reporting requirements, the Trustee may in its discretion,
and shall when so directed by the
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Sponsor,
terminate this Indenture and the Trusts created hereby, and liquidate the
Trusts, all in the manner provided in Section 9.2.”
(j) Section
9.1 of the Agreement is amended by adding the following part (d) to the first
paragraph thereof:
“or (d)
to add or change any provision as may be necessary or advisable for the
continuing qualification of the Trust as a Regulated Investment
Company;”
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Part
II
SPECIAL
TERMS AND CONDITIONS OF TRUST
The
following special terms and conditions are hereby agreed to:
(A)
The
interest-bearing obligations listed in the Prospectus related to Empire State
Municipal Exempt Trust, Series 185 have been deposited in trust under this
Indenture (See “Portfolio” in Part A of the Prospectus which for purposes of
this Indenture is the Schedule of Securities or Schedule A).
(B) For the
purposes of the definition of the Unit in item (24) of Section 1.1, the
fractional undivided interest in and ownership of the Trust is 3,800.
(C) The
fiscal year for the Trust shall end on May 31st of each year.
(D) All
Certificate holders of record on September 15, 2008
(the “First Monthly Record Date”), who have selected the monthly
distribution plan, will receive a distribution to be made on or shortly after
October 1, 2008 (the
“First Distribution Date”), and thereafter distributions will be made
monthly. The first semi-annual distribution will be made on or
shortly after December 1, 2008, to
all Certificate holders of record on November 15, 2008, who
have selected the semi-annual distribution plan, and thereafter distributions
will be made semi-annually.
(E) The First
Settlement Date shall mean August 19,
2008.
(F) The
number of Units referred to in Section 2.3 is 3,800.
(G) For the
purposes of Section 4.3, the Evaluator shall receive for each evaluation of the
Bonds in the Trust $.50 per Bond for each valuation.
(H) For
purposes of Section 6.4, the Trustee shall be paid per annum $1.03 per $1,000
principal amount of Bonds for that portion of the Trust under the monthly
distribution plan and $0.63 per $1,000 principal amount of Bonds for that
portion of the Trust under the semi-annual distribution plan.
(I)
For
purposes of Section 8.6, the Depositor’s maximum annual fee is hereby specified
to be $.75 per $1,000 principal amount of Bonds in the Trust.
(J) For
purposes of Section 9.2, the Mandatory Termination Date for the Trust is
February 15, 2047.
(K)
For
purposes of this Series of Empire State Municipal Exempt Trust, the form of
Certificate set forth in this Indenture shall be appropriately modified to
reflect the title of this Series as set forth above.
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(L) For
purposes of this Series of Empire State Municipal Exempt Trust, the execution
date of this Indenture shall be the date first written above.
IN
WITNESS WHEREOF, the parties hereto have caused this Reference Trust Agreement
to be duly executed on the date first above written.
[Signatures
on separate pages]
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| GLICKENHAUS & CO. | ||
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By:
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/s/ ▇▇▇▇▇▇▇
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Attorney-in-Fact
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for
each of the General Partners
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STATE OF NEW
YORK
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)
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ss.:
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| COUNTY OF NEW YORK | ) |
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I,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, a Notary Public in and for the said County in the State
aforesaid, do hereby certify that ▇▇▇▇▇▇▇ ▇▇▇▇▇, personally known to me to be
the same whose name is subscribed to the foregoing instrument, appeared before
me this day in person, and acknowledged that he signed and delivered the said
instrument as his free and voluntary act as Attorney-in-Fact for each of the
General Partners, and as the free and voluntary act of said GLICKENHAUS &
CO., for the uses and purposes therein set forth.
GIVEN,
under my hand and notarial seal this 8th day of August, 2008.
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/s/ ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇
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Notary
Public
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▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇
Notary
Public, State of New York
No.
01R04707544
Qualified
in New York County
Commission
Expires Jan. 20, ▇▇▇▇
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| ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ MELLON, Trustee | ||
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By:
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/s/ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
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Vice
President
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ATTEST:
By: /s/ ▇▇▇▇▇▇
▇▇▇▇▇▇
(CORPORATE
SEAL)
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STATE OF NEW
YORK
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)
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)
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ss.:
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| COUNTY OF NEW YORK | ) |
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I, ▇▇▇▇
▇▇▇▇▇▇▇, a Notary Public in and for the said County in the State aforesaid, do
hereby certify that ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇ 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 Treasurer,
respectively, of The Bank of New York Mellon, appeared before me this day in
person, and acknowledge that they signed, sealed with the corporate seal of The
Bank of New York Mellon and delivered the said instrument as their free and
voluntary act as such Vice President and Assistant Treasurer, respectively, and
as the free and voluntary act of said The Bank of New York Mellon for the uses
and purposes therein set forth.
GIVEN,
under my hand and notarial seal this 12th day of August, 2008.
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/s/ ▇▇▇▇ ▇.
▇▇▇▇▇▇▇
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Notary
Public
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| [SEAL] |
▇▇▇▇
▇. ▇▇▇▇▇▇▇
Notary
Public. State of New York
No.
01FR6118505
Qualified
in Queens County
My
Commission Expires Nov. 8, 2008
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| CAPELOGIC, INC., Evaluator | ||
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By:
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/s/ ▇▇▇▇▇▇
▇▇▇▇▇
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▇▇▇▇▇▇
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ATTEST:
By: /s/ ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇
Treasurer