QUALIFIED UNIT INVESTMENT
LIQUID TRUST SERIES ("QUILTS")
AND
SUBSEQUENT SERIES AND ANY OTHER
FUTURE TRUSTS FOR WHICH OCC
DISTRIBUTORS ACTS AS SPONSOR
--------------------
TRUST INDENTURE AND AGREEMENT
Among
OCC DISTRIBUTORS
As Depositor
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
As Trustee
--------------------
Dated: February 8, 1996
337970.1
TRUST INDENTURE AND AGREEMENT
QUALIFIED UNIT INVESTMENT
LIQUID TRUST SERIES ("QUILTS")
and Subsequent Series and any other future
trusts for which OCC Distributors
acts as sponsor
CONTENTS
Page
ARTICLE I DEFINITIONS; CERTIFICATES............................... 2
Section 1.1. Definitions............................................. 2
Section 1.2. Form of Certificate..................................... 4
ARTICLE II DEPOSIT OF SECURITIES; DECLARATION OF TRUST;
FORM AND ISSUANCE OF CERTIFICATES..................... 8
Section 2.1. Deposit of Securities................................... 8
Section 2.2. Declaration of Trust.................................... 8
Section 2.3. Issuance of Units....................................... 8
Section 2.4. Form of Certificates.................................... 9
Section 2.5. Certain Contracts Satisfactory.......................... 9
Section 2.6. Deposit of Additional Securities........................ 9
ARTICLE III ADMINISTRATION OF TRUST................................. 12
Section 3.1. Cost.................................................... 12
Section 3.2. Income Account.......................................... 12
Section 3.3. Principal Account....................................... 13
Section 3.4. Reserve Account......................................... 13
Section 3.5. Payments and Distributions.............................. 14
Section 3.6. Distribution Statements................................. 17
Section 3.7. Substitute Securities................................... 18
Section 3.8. Sale of Securities...................................... 19
Section 3.9. Counsel................................................. 20
Section 3.10. Notice and Sale by Trustee.............................. 20
Section 3.11. Reorganization and Similar Events....................... 20
Section 3.12. Notice of Actions....................................... 21
Section 3.13. Notice of Change in Principal Account: ................ 21
Section 3.14. Extraordinary Distributions............................. 21
ARTICLE IV EVALUATION OF SECURITIES; EVALUATOR..................... 22
Section 4.1. Evaluation of Securities................................ 22
Section 4.2. Tax Reports............................................. 22
Section 4.3. Liability of Trustee with Respect to
Evaluations........................................... 23
ARTICLE V TRUST EVALUATION; REDEMPTION OR PURCHASE OF
UNITS................................................. 23
Section 5.1. Trust Evaluation........................................ 23
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i
Page
Section 5.2. Redemptions by Trustee; Purchases by Depositor.......... 24
Section 5.3. Transfer of Units; Issuance, Transfer and
Interchange of Certificates........................... 27
Section 5.4. Replacement of Certificates............................. 28
Section 5.5. Form of Certificate..................................... 29
ARTICLE VI TRUSTEE; REMOVAL OF DEPOSITOR........................... 29
Section 6.1. General Definition of Trustee's Liabilities,
Rights and Duties; Removal of Depositor............... 29
Section 6.2. Books, Records and Reports.............................. 33
Section 6.3. Indenture and List of Securities on File................ 34
Section 6.4. Compensation............................................ 34
Section 6.5. Removal and Resignation of the Trustee;
Successor............................................. 35
Section 6.6. Qualifications of Trustee............................... 37
ARTICLE VII DEPOSITOR............................................... 37
Section 7.1. Succession.............................................. 37
Section 7.2. Resignation of a Depositor.............................. 38
Section 7.3. Liability of Depositor and Indemnification.............. 38
Section 7.4. Compensation............................................ 39
ARTICLE VIII RIGHTS OF UNIT HOLDERS.................................. 40
Section 8.1. Beneficiaries of Trust.................................. 40
Section 8.2. Rights, Terms and Conditions............................ 40
ARTICLE IX ADDITIONAL COVENANTS; MISCELLANEOUS PROVISIONS.......... 41
Section 9.1. Amendments.............................................. 41
Section 9.2. Termination............................................. 41
Section 9.3. Construction............................................ 44
Section 9.4. Registration of Units................................... 44
Section 9.5. Written Notice.......................................... 44
Section 9.6. Severability............................................ 45
Section 9.7. Dissolution of Depositor Not to Terminate............... 45
This Table of Contents does not constitute part of the Indenture.
337970.1
ii
QUALIFIED UNIT INVESTMENT LIQUID
TRUST SERIES
("QUILTS")
(A UNIT INVESTMENT TRUST)
AND
SUBSEQUENT SERIES AND ANY OTHER FUTURE TRUSTS
FOR WHICH OCC DISTRIBUTORS ACTS
AS SPONSOR
TRUST INDENTURE AND AGREEMENT
DATED FEBRUARY 8, 1996
This Trust Indenture and Agreement ("Indenture") dated February 8,
1996, among OCC Distributors ("Distributors"), as Depositor, and The Chase
Manhattan Bank (National Association), as Trustee.
WITNESSETH THAT
In consideration of the premises and of the mutual agreements herein
contained, the Depositor and the Trustee agree as follows:
INTRODUCTION
The Depositor, concurrently with the execution and delivery hereof,
is establishing Qualified Unit Investment Liquid Trust Series ("QUILTS"),
wherein certain interest bearing and non-interest bearing obligations will be
deposited by the Depositor, to be held by the Trustee in trust for the use and
benefit of the registered holders of units of beneficial interest as recorded
in book-entry form. The parties hereto are entering into this Indenture for
the purpose of establishing certain of the terms, covenants and conditions of
Qualified Unit Investment Liquid Trust Series and of each additional series of
such Trust, and any other future trusts for which the Depositor acts as
sponsor, which may be established from time to time hereafter. For Qualified
Unit Investment Liquid Trust Series and each subsequent series, and any other
future trusts for which the Depositor acts as sponsor (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
Securities deposited in trust and the number of Units delivered by the Trustee
in exchange for the Securities pursuant to Section 2.3; (ii) the initial
fractional undivided
337970.1
interest represented by each Unit; (iii) the first and subsequent Record
Dates; (iv) the first and subsequent Payment Dates; (v) the First Settlement
Date; (vi) the Termination Date; (vii) the liquidation amount for purposes of
Section 6.1(g); (viii) the Trustee's fee; (ix) the Depositor's fee; and (x)
any other change or addition contemplated or permitted by this Indenture.
ARTICLE I
DEFINITIONS; CERTIFICATES
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) "Addendum to the Reference Trust Agreement" shall mean the
addendum which evidences the Additional Securities deposited into the
Trust and the number of Additional Units created.
(2) "Additional Securities" shall mean such Securities as are
listed in Supplementary Schedules to Addendums to the Reference Trust
Agreement and which have been deposited to effect an increase over the
number of Units initially specified in the Reference Trust Agreement.
(3) "Additional Units" shall mean such Units as are issued in
respect of Additional Securities.
(4) "Business Day" shall mean any day other than Saturday,
Sunday, or, in the City of New York, a legal holiday or a day on which
banking institutions or the New York Stock Exchange are authorized by
law to close.
(5) "Certificate" shall mean any certificate substantially in
the form hereinafter recited executed by the Trustee and the Depositor
evidencing ownership of an undivided fractional interest in each
Trust.
(6) "Contract Securities" shall mean Securities which are to be
acquired by the Trust pursuant to contracts, including (i) Securities
listed in Schedule A to the Reference Trust Agreement, contracts for
the purchase thereof which have been assigned to the Trustee and cash
or an irrevocable letter of credit issued by a commercial bank in the
amount required for such purchase which has been delivered to the
Trustee and (ii) Securities which the Depositor has contracted to
purchase for the Trust pursuant to Sections 2.6 and 3.7.
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337970.1
(7) "Depositor" shall mean OCC Distributors, its successors or
any successor Depositor appointed as herein provided.
(8) "DTC" shall mean Depository Trust Company, or its
successors.
(9) "Evaluator" shall mean The Chase Manhattan Bank (National
Association), or its successors or any successor evaluator appointed
as herein provided.
(10) "Failed Security" shall have the meaning assigned to it in
Section 3.7 hereof.
(11) "First Settlement Date" shall mean the date specified in
Part II of the Reference Trust Agreement.
(12) 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.
(13) "Indenture" shall mean this Trust Indenture and Agreement
as originally executed or, if amended as herein provided, as so
amended.
(14) "Original Issue" shall mean an issue of Securities
deposited pursuant to Section 2.1 or any Substitute Securities
purchased to replace any Original Issue which have become Failed
Securities.
(15) "Original Proportionate Relationship" shall mean the
proportionate relationship among the number of shares of each Security
established on the deposit made pursuant to Section 2.1. The Original
Proportionate Relationship shall be adjusted, if appropriate, to
reflect (1) the deposit of Substitute Securities and (2) the
occurrence of any stock dividend, stock splits, redemptions, or
similar events.
(16) "Payment Date" shall have the meaning assigned to it in
Part II of the Reference Trust Agreement.
(17) "Record Date" shall have the meaning assigned to it in
Part II of the Reference Trust Agreement.
(18) "Reference Trust Agreement" shall mean the indenture for
the particular series of Quest for Value Trust into which the terms of
this Indenture are incorporated.
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337970.1
(19) "Securities" shall mean the securities, including Contract
Securities, (i) which are listed in Schedule A and Supplemental
Schedules to Addendums to the Reference Trust Agreement or (ii) which
have been received by the Trust in exchange, substitution or
replacement pursuant to Section 3.7 hereof, as may from time to time
continue to be held as part of the Trust to which such Reference Trust
Agreement relates.
(20) "Substitute Security" shall mean a Security purchased by
the Trustee pursuant to Section 3.7 hereof.
(21) "Trust" shall mean the trust created by this Indenture,
which shall consist of the Securities held pursuant and subject to
this Indenture together with all dividends thereon, received but
undistributed, any undistributed cash realized from the sale,
redemption, liquidation, or maturity thereof, such amounts as may be
on deposit in the Reserve Accounts hereinafter established and all
other property and rights to which Unit Holders may be entitled under
the provisions of this Indenture.
(22) "Trustee" shall mean The Chase Manhattan Bank (National
Association), or its successors or any successor Trustee appointed as
herein provided.
(23) "Unit" shall mean the fractional undivided interest in and
ownership of the Trust initially specified in Part II of the Reference
Trust Agreement, the denominator of which shall be decreased by the
number of any such Units redeemed as provided in Section 5.2.
(24) "Unit Holder" shall mean the registered holder of units of
beneficial interest as recorded in book-entry form at DTC, his legal
representatives and heirs and the successors of any corporation,
partnership or legal entity which is a registered holder of any Unit,
and as such shall be deemed a beneficiary of the trust created by the
Indenture to the extent of his pro rata share thereof.
(25) Words importing singular number shall include the plural
number in each case and vice versa, and words importing person shall
include corporations and associations, as well as natural persons.
Section 1.2. Form of Certificate: If the Reference Trust
Agreement specifies that Units of a Trust shall be evidenced by Certificates,
the form of Certificate evidencing ownership of fractional undivided interests
in the Trust shall be substantially as follows:
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337970.1
No.
CERTIFICATE OF OWNERSHIP
--evidencing--
A Fractional Undivided Interest
--in--
QUALIFIED UNIT INVESTMENT
LIQUID TRUST SERIES
("QUILTS")
__________ SERIES _________
--------------------
CUSIP
This is to certify that ______________________________ is the owner and
registered holder of this Certificate evidencing the ownership of _____
unit(s) of fractional undivided interest in the above named Trust created
under the laws of the State of New York pursuant to the Trust Indenture and
Agreement among OCC Distributors as Depositor and The Chase Manhattan Bank
(National Association) as Trustee (the "Indenture"), a copy of which is
available at the office of the Trustee. This Certificate is issued under and
is subject to the terms, provisions and conditions of the Indenture to which
the holder of this Certificate by virtue of the acceptance hereof asserts and
is bound, a summary of which Indenture is contained in the Prospectus relating
to the Trust. This Certificate is transferable and interchangeable by the
registered holder in person or by his duly authorized attorney at the
Trustee's office upon surrender of this Certificate properly endorsed or
accompanied by a written instrument of transfer or other documents that the
Trustee may require for transfer in form satisfactory to the Trustee and
payment of the fees and expenses as provided in the Indenture.
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337970.1
Witness the facsimile signature of a duly authorized officer of the
Depositor and the manual signature of an authorized signature of the Trustee.
Date: OCC DISTRIBUTORS,
Depositor
___________________________________
Authorized Signatory
THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), Trustee
By: _______________________________
Authorized Officer
The following abbreviations, when used in the inscription on the face
of this Certificate, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
UNIF GIFT MIN ACT - _________________ Custodian __________________
____________
(Cust)
(Minor)
Under Uniform Gifts to Minors Act
_________________________________
(State)
Additional abbreviations may also be used though not in the above list.
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337970.1
(FORM OF ASSIGNMENT)
For Value Received, __________________________________________________________
hereby sell(s), assign(s) and transfer(s) ______________ Units represented
by this Certificate unto
SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE MUST BE PROVIDED
___________________________________________
and do(es) hereby irrevocably constitute and appoint _________________________
______________________________________________________, attorney, to transfer
said Units on the books of the Trustee, with full power of substitution in the
premises.
Dated:
_____________________________
SIGNATURE(S) GUARANTEED BY
__________________________________ _____________________________
Firm or Bank NOTICE: The signature(s) to
this assignment must
correspond with the name(s)
as written upon the face of
the Certificate in every
__________________________________ particular, without
alteration or enlargement or
Authorized Signature any change whatever.
Signature(s) must be guaranteed by a member or participant of the Securities
Transfer Agents Medallion Program (STAMP), Stock Exchanges Medallion Program
(SEMP) or New York Stock Exchange, Inc. Medallion Signature Program (MSP).
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337970.1
ARTICLE II
DEPOSIT OF SECURITIES; DECLARATION OF TRUST;
FORM AND ISSUANCE OF CERTIFICATES
Section 2.1. Deposit of Securities: The Depositor, concurrently with the
execution and delivery of the Reference Trust Agreement, has deposited with
the Trustee in trust the Securities listed in Schedule A to the Reference
Trust Agreement in bearer form or registered in the name of the Trustee, or
its nominee, or duly endorsed in blank or accompanied by all necessary
instruments of assignment and transfer in proper form to be held, managed and
applied by the Trustee as herein provided. In the event that the purchase of
Securities represented by "when-issued" and/or "regular way" contracts shall
not be consummated in accordance with said contracts, the Trustee shall credit
to the Principal Account pursuant to Section 3.3 hereof the cash or cash
equivalents (including such portion of any letter of credit applicable to such
contracts) deposited by the Depositor, for the purpose of such purchase. Such
monies, unless invested in substitute Securities in accordance with Section
3.7 hereof, shall be distributed to Unit Holders pursuant to Section 3.5
hereof on the Payment Date following the failure of consummation of such
purchase. The Depositor shall deliver the Securities listed on said Schedule
or Schedules to the Trustees which were not actually delivered concurrently
with the execution and delivery of the Reference Trust Agreement within 90
days after said execution and delivery or, if Section 3.7 applies, within such
shorter period as is specified in Section 3.7.
The Trustee is irrevocably authorized to effect registration of
transfer of the Securities in fully registered form in the name of the Trustee
or its nominee.
Section 2.2. Declaration of Trust: The Trustee declares that it holds
and will hold the Securities as Trustee in trust upon the trusts herein set
forth for the use and benefit of all present and future Unit Holders.
Section 2.3. Issuance of Units: (a) The Trustee hereby acknowledges
receipt of the deposit referred to in Section 2.1, and simultaneously with the
receipt of said deposit, has registered on the registration books of the Trust
the ownership by The Depository Trust Company of the number of Units specified
in Part II of the Reference Trust Agreement and will cause such Units to be
credited at The Depository Trust Company to the account of the Depositor or,
pursuant to the Depositor's direction and as hereafter provided, the account
of the issuer of the letter of credit referred to in Section 2.01. The
Depositor shall not sell, pledge, hypothecate or otherwise transfer such
Units, prior to the effectiveness of the registration statement covering the
Units filed with the Securities and Exchange
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337970.1
Commission under the Securities Act of 1933, except that the Depositor may
place the Units as security for any letter of credit provided in connection
with the deposit of contracts described in Section 2.1.
The number of Units may be increased through a split of the Units or
decreased through a reverse split thereof, as directed in writing by the
Depositor, on any day on which the Depositor is the only beneficial holder of
Units, which revised number of Units shall be recorded by the Trustee on its
books. The Trustee shall be entitled to rely on the Depositor's direction as
certification that no person other than the Depositor has a beneficial
interest in the Units and the Trustee shall have no liability to any person
for action taken pursuant to such direction.
(b) Unless the Reference Trust Agreement for the Trust provides that
Units may be represented by Certificates, ownership of Units shall be
evidenced solely by registration on the records of the Trustee. If the
Reference Trust Agreement permits the holding of Units in certificated form,
Unit Holders may elect to have their Units held in certificated form by making
a written request to the Trustee requesting such Certificates and paying the
applicable charge referred to in Section 5.3. Units and Certificates may be
transferred as provided in Article V.
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 or in facsimile by an
authorized officer of the Trustee and in facsimile by an Authorized Signator
of the Depositor.
Section 2.5. Certain Contracts Satisfactory: The Depositor approves
as satisfactory in form and substance the contracts to be assumed by the
Trustee with regard to any Securities listed in Schedule A to the Reference
Trust Agreement and authorizes the Trustee on behalf of the Trust to assume
such contracts and otherwise to carry out the terms and provisions thereof or
to take other appropriate action in order to complete the deposit of the
Securities covered thereby into the Trust.
Section 2.6. Deposit of Additional Securities: (a) From time to time
and in the discretion of the Depositor, the Depositor may make deposits of (i)
Additional Securities duly endorsed in blank or accompanied by all necessary
instruments of assignment and transfer in proper form (or contracts to
purchase Additional Securities and cash or an irrevocable letter of credit in
an amount necessary to consummate the purchase of any Additional Securities
pursuant to such contracts ("Additional
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337970.1
Contract Securities")) or (ii) cash or a bank letter of credit in lieu of cash
(collectively, the "Purchase Monies") with instructions to purchase Additional
Securities, such Purchase Monies being in an amount equal to the value of the
Additional Securities to be purchased pursuant to such instructions as
determined by the last preceding evaluation made pursuant to Section 4.1 and
(iii) Cash (as defined below). Each deposit made during the 90 days following
the deposit made pursuant to Section 2.1 hereof shall replicate, to the extent
practicable, as specified in the following paragraph (b), the Original
Proportionate Relationship. Each deposit made after the 90 days following the
deposit made pursuant to Section 2.1 hereof (except for deposits made to
replace Failed Securities if such deposits occur within 20 days from the date
of a failure occurring within such initial 90 day period) shall maintain
exactly the proportionate relationship existing among the Securities as of the
expiration of such 90 day period. Each such deposit (whenever made) shall
exactly replicate Cash. For purposes of this paragraph, "Cash" means, as to
the Principal Account, cash or other property (other than Securities) on hand
in the Principal Account or receivable and to be credited to the Principal
Account as of the date of the supplemental deposit (other than amounts to be
distributed solely to persons other than persons receiving the distribution
from the Principal Account as holders of Additional Units created by the
deposit), and, as to the Income Account, cash or other property (other than
Securities) received by the Trust as of the date of the supplemental deposit
or receivable by the Trust in respect of dividends or other distributions
declared but not received as of the date of the supplemental deposit, reduced
by the amount of any cash or other property received or receivable on any
Security allocable (in accordance with the Trustee's calculation of the
monthly distribution from the Income Account pursuant to Section 3.5) to a
distribution made or to be made in respect of Record Date occurring prior to
the supplemental deposit. Each deposit of Additional Securities shall be
listed in a Supplementary Schedule to an Addendum to the Reference Trust
Agreement stating the date of such deposit and the number of Additional Units
being issued therefor. The Trustee shall acknowledge in such Addendum receipt
of the deposit, and simultaneously with the receipt of said deposit, reflect
the aggregate number of Additional Units specified in such Addendum by
recording such Units on its books. Such Additional Securities shall be held,
administered and applied by the Trustee in the same manner as herein provided
for the Securities. The execution by the Depositor in connection with the
deposit of Additional Securities of an Addendum to the Reference Trust
Agreement shall constitute the approval by the Depositor as satisfactory in
form and substance of the contracts to be entered into or assumed on such
Addendum and authorization to the Trustee on behalf of the Trust to enter into
or assume such contracts and otherwise to carry out the terms and provisions
thereof or to take other
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337970.1
appropriate action in order to complete the deposit of the Additional
Securities covered thereby into the Trust.
(b) Additional Securities deposited during the 90 days following the
deposit made pursuant to Section 2.1 hereof pursuant to this paragraph shall
maintain as closely as practicable the Original Proportionate Relationship,
except as provided in this Section. Additional Securities may be deposited or
purchased in round lots; if the amount of the deposit is insufficient to
acquire round lots of each Security to be acquired, the Additional Securities
shall be deposited or purchased in the order of the Security in the Trust most
under represented immediately before the deposit with respect to the Original
Proportionate Relationship. Instructions to purchase Additional Securities
under this Section, shall be in writing and shall direct the Trustee to
purchase, or enter into contracts to purchase, Additional Securities; such
instructions shall also specify the name, CUSIP number, if any, aggregate
amount of each such Additional Security, price or price range and date to be
purchased. When requested by the Trustee, the Depositor shall act as broker to
execute purchases in accordance with such instructions; the Depositor shall be
entitled to compensation therefor in accordance with applicable law and
regulations. The Trustee shall have no liability for any loss or depreciation
resulting from any purchase made pursuant to the Depositor's instructions or
made by the Depositor as broker. Cash deposited for the purchase of Additional
Securities to be acquired pursuant to instructions to purchase Additional
Securities shall be credited to the Principal Account. Cash deposited to
secure the purchase of Contract Securities shall be credited to the Principal
Account only at the times specified in Section 3.3. In connection with
valuations made pursuant to Sections 4.1 and 5.1, (i) there shall be
subtracted from the cash balance of the Principal Account the cost to the
Trust of contracts entered into by the Trustee pursuant to purchase
instructions, and (ii) Contract Securities and contracts entered into by the
Trustee pursuant to purchase instructions shall be valued as the Securities to
be acquired pursuant thereto. If, at the time of a subsequent deposit under
this Section, Securities of an Original Issue are unavailable, cannot be
purchased at reasonable prices or their purchase is prohibited or restricted
by applicable law, regulation or policies, in lieu of the portion of the
deposit that would otherwise be represented by those Securities, the Depositor
may (A) deposit (or instruct the Trustee to purchase) Securities of another
Original Issue or replacement securities, or (B) deposit cash or a letter of
credit with instructions to acquire the Securities of such original issue when
they become available.
The Trustee shall have no responsibility for the selection of
Securities deposited hereunder or for maintaining the composition of the Trust
portfolio.
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ARTICLE III
ADMINISTRATION OF TRUST
Section 3.1. Cost: The cost of the initial preparation, printing and
execution of the Certificates and this Indenture, Registration Statement and
other documents relating to the Trust, Federal and State registration fees and
costs, the initial fees and expenses of the Trustee and Evaluator, legal and
auditing expenses and other out-of-pocket expenses (excluding expenses
incurred in the preparation and printing of preliminary prospectuses and
prospectuses, expenses incurred in the preparation and printing of brochures
and other advertising materials and any other selling expenses), to the extent
not borne by the Depositor, shall be paid by the Trust; provided, however, the
Trust shall not bear such expenses in excess of the amount shown in the
Statement of Condition included in the Prospectus, and any such excess shall
be borne by the Depositor. To the extent the funds in the Interest and
Principal Accounts of the Trust shall be insufficient to pay the expenses
borne by the Trust specified in this Section 3.1, the Trustee shall advance
out of its own funds and cause to be deposited and credited to the Interest
Account such amount as may be required to permit payment of such expenses. The
Trustee shall be reimbursed for such advance on each Record Date from funds on
hand in the Income Account, or to the extent funds are not available in such
Account, from the Principal Account, in the amount deemed to have accrued as
of such Record Date as provided in the following sentence (less prior payments
on account of such advances, if any), and the provisions of Section 6.4 with
respect to the reimbursement of disbursements for Trust expenses, including,
without limitation, the lien in favor of the Trustee therefor, shall apply to
the payment of expenses made pursuant to this Section. For purposes of the
provisions of the preceding sentence and the addition provided in clause
(a)(4) of Section 5.1, the expenses borne by the Trust pursuant to this
Section shall be deemed to accrue at a daily rate over the time period
specified for their amortization by the Depositor pursuant to Section 5.1;
provided, however, that nothing herein shall be deemed to prevent, and the
Trustee shall be entitled to, full reimbursement for any advances made
pursuant to this Section no later than the termination of the Trust. For
purposes of this Section 3.1, the Trustee shall rely on the written estimates
of such expenses provided by the Depositor pursuant to Section 5.1.
Section 3.2. Income Account: The Trustee shall collect the dividends
or other like cash distributions on the Securities in the Trust as such are
paid, and credit such amounts, as collected, to a separate account to be known
as the "Income Account."
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Section 3.3. Principal Account: (a) The Securities and all cash,
other than amounts credited to the Income Account, received by the Trustee in
respect of the Securities 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 Securities or deposited to secure such purchases are hereby declared
to be held specially by the Trustee for such purchases and shall not be deemed
to be part of the Principal Account until (i) the Depositor fails to timely
purchase Contract Securities and has not given the Failed Contract Notice (as
defined in Section 3.7) at which time the moneys and/or letters of credit
attributable to the Contract Security not purchased by the Depositor shall be
credited to the Principal Account; or (ii) the Depositor has given the Trustee
the Failed Contract Notice at which time the moneys and/or letters of credit
attributable to failed contracts referred to in such Notice shall be credited
to the Principal Account; provided, however, that if the Depositor also
notifies the Trustee in the Failed Contract Notice that they have purchased or
entered into a contract to purchase Securities (as defined in Section 3.7),
the Trustee shall not credit such moneys and/or letters of credit to the
Principal Account unless the Substitute Securities shall also have failed or
is not delivered by the Depositor within two business days after the
settlement date of such Substitute Securities, in which event the Trustee
shall forthwith credit such moneys and/or letters of credit to the Principal
Account. To the extent of moneys, and/or moneys drawn under a letter of
credit, deposited by the Depositor and then held by the Trustee, the Trustee
shall credit to the Principal Account, and to the extent such moneys are
insufficient the Depositor shall deposit in the Principal Account the
difference, if any, between the purchase price of the failed Contract Security
and the purchase price of the Substitute Securities, together with any sales
charge and accrued interest applicable to such difference and distribute such
moneys to Unit Holders 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 Income 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 or by the Trust. 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 Unit Holders any of the
amounts 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 from which withdrawn
or, if the Trust has
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been terminated or is in the process of termination, the Trustee shall
distribute to each Unit Holder such holder's interest in the Reserve Account
in accordance with Section 9.2.
Section 3.5. Payments and Distributions: Distributions to each Unit
Holder from the Income Account are computed as of the close of business on
each Record Date for the following Payment Date. Distributions from the
Principal Account of the Trust (other than amounts representing failed
contracts, as discussed in Section 3.3.(b) will be computed as of each Record
Date, and will be made to the Unit Holders of the Trust on or shortly after
the next Payment Date. Proceeds representing principal received from the
disposition of any of the Securities between a Record Date and a Payment Date
which are not used for redemptions of Units will be held in the Principal
Account and not distributed until the second succeeding Payment Date. Persons
who purchase Units between a Record Date and a Payment Date will receive their
first distribution on the second Payment Date after such purchase.
As of each Record Date, the Trustee shall:
(a) Deduct from the Income Account and, to the extent funds are
not sufficient therein, from the Principal Account of the Trust,
amounts necessary to pay any unpaid expenses of the Trust, including
registration charges, Blue Sky fees, printing costs, attorneys' fees,
auditing costs and other miscellaneous out-of-pocket expenses, as
certified by the Depositor, incurred in keeping the registration of
the Units and the Trust on a current basis pursuant to Section 9.4,
provided, however, that no portion of such amount shall be deducted
or paid unless the payment thereof from the Trust is at that time
lawful;
(b) deduct from the Income 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 on account of its fees, unpaid expenses and advances;
(c) deduct from the Income Account, or, to the extent funds are
not available in such Account, from the Principal Account, and pay an
amount equal to the unpaid fees and expenses, if any, of counsel
pursuant to Section 3.9 as certified to it by the Depositor; and
(d) deduct from the Income Account, or, to the extent funds are
not available in such Account, from the Principal Account the
estimated amount that the Depositor is then entitled to receive
pursuant to Section 7.4 and hold such amount without interest until
such time as it is payable to the Depositor as set forth below.
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On or before the first Payment Date after the conclusion of each
calendar year, the Trustee shall, upon certification in satisfactory form to
the Trustee, upon which the Trustee may rely, distribute to the Depositor from
the amount so held pursuant to the immediately preceding paragraph the amounts
that the Depositor is at the time entitled to receive pursuant to Section 7.4
on account of services theretofore performed and expenses theretofore
incurred.
The Trustee also may withdraw from said accounts such amounts, if
any, as it deems necessary to establish a reserve for any applicable taxes or
other governmental charges that may be payable out of the Trust. Amounts so
withdrawn shall not be considered a part of such Trust's assets until such
time as the Trustee shall return all or any part of such amounts to the
appropriate accounts. In addition, the Trustee may withdraw from the Income
and Principal Accounts such amounts as may be necessary to cover redemptions
of Units by the Trustee.
The Principal Account shall be reimbursed for any amount withdrawn
from the Principal Account under this Indenture in order to satisfy
obligations which, pursuant to the terms hereof, are first to be paid out of
the Income Account to the extent funds are available therein, when sufficient
funds are not available in the Income Account after giving effect to the
payment from the Income Account of all amounts otherwise required to be
deducted therefor at that time when sufficient funds are next available in the
Income Account after giving effect to the payment from the Income Account of
all amounts otherwise required to be deducted therefrom at that time.
On each Payment Date or within a reasonable period of time
thereafter, the Trustee shall distribute by mail to each Unit Holder of record
at the close of business on the preceding Record Date, at the post office
address appearing on the registration books of the Trustee, such holder's pro
rata share of the balance in the Income Account calculated as set forth in the
next paragraph, plus such holder's pro rata share of the distributable cash
balance of the Principal Account, as of the preceding Record Date; provided,
however, that funds credited to the Principal Account in the event of the
failure of consummation of a contract to purchase Securities pursuant to
Section 2.1 hereof, funds representing the proceeds of the sale of Securities
pursuant to Section 3.8 hereof, and funds representing the proceeds of the
sale of Securities under Section 5.2, 6.4 or this Section 3.5 in excess of the
aggregate of (i) the amounts needed for the purposes of said Sections and (ii)
such amount as the Depositor has informed the Trustee is to be used to
purchase securities pursuant to Section 3.7 hereof, shall not be distributed
until the following Payment Date or at such earlier date as shall be
determined by the Trustee. The Trustee shall not be required to make a
distribution from the Principal Account
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unless the cash balance on deposit therein available for distribution shall be
sufficient to distribute at least $1.00 per Unit in the case of Units
initially offered at approximately $1,000, or a proportionately lower amount
in the case of Units initially offered at less than $1,000 (e.g., .001 per
Unit in the case of Units initially offered at approximately $1.00).
The Trustee shall compute the amount of the Distribution from the
Income Account (i) by subtracting from the cash balance of the Income Account
computed as of the close of business on such Record Date (a) any unpaid fees
and expenses then deductible pursuant to the foregoing provisions of Section
3.5 and (b) the Trustee's estimate of other expenses chargeable to the Income
Account pursuant to the Indenture which have accrued as of such Record Date,
or are otherwise properly attributable to the period to which such Income
Distribution relates and (ii) by dividing the result of such calculation by
the number of Units outstanding on the applicable Record Date.
The amounts to be distributed to each Unit Holder of the Trust of
record as of each Record Date shall be that pro rata share of the cash balance
of the Income and Principal Accounts of the Trust, computed as set forth
above, as shall be represented by the Units registered in the name of such
Unit Holder on the registration or other record books of the Trustee.
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 Income Account or the Principal Account shall be
held in the same manner as other amounts subsequently deposited in each 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 Record Date shall be conclusively entitled to such distribution, and no
liability shall attach to the Trustee by reason of payment to any such
registered Unit Holder of record. Nothing herein shall be construed to prevent
the payment of amounts from the Interest Account and the Principal Account to
individual Unit Holders by means of one check, draft or other proper
instrument, provided that the appropriate statement of such distribution shall
be furnished therewith as provided in Section 3.6 hereof.
The Trustee will, for any Unit Holder who provides the Trustee
written instruction, properly executed and in form satisfactory to the
Trustee, received by the Trustee no later than its close of business 10
business days prior to a Record Date (the "Reinvestment Notice Date"),
reinvest such Unit holder's distribution from the Income and Principal
Accounts in Units of the Trust, purchased from the Depositor, to the extent
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the Depositor shall make Units available for such purchase, at the Depositor's
offering price as of the third business day prior to the following
Distribution Date, and at such reduced sales charge, or with no sales charge
imposed, as may be described in the prospectus for the Trusts. If, for any
reason, the Depositor does not have Units of the Trust available for purchase,
the Trustee shall distribute such Unit Holder's distribution from the Income
and Principal Accounts in the manner provided in this Section 3.5. The Trustee
shall be entitled to rely on a written instruction received as of the
Reinvestment Notice Date and shall not be affected by any subsequent notice to
the contrary. The Trustee shall have no responsibility for any loss or
depreciation resulting from any reinvestment made in accordance with this
paragraph, or for any failure to make such reinvestment in the event the
Depositor does not make Units available for purchase.
Section 3.6. Distribution Statements: With each distribution from the
Income 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.
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 Unit Holder a statement setting forth, with
respect to such calendar year:
(A) as to the Income Account:
(1) the amount of dividends received on the Securities,
(2) the amounts paid from the Income Account for redemptions
of Units pursuant to Section 5.2,
(3) the deductions for applicable taxes and fees and expenses
of the Trustee, the Evaluator and counsel pursuant to Section 3.9, the
annual audit fees referred to in Section 6.2 and the annual fee of the
Depositor for portfolio supervisory services pursuant to Section 7.4,
(4) the amount distributed from the Income Account,
identifying separately amounts distributed as dividends and as other
income,
(5) any other amount credited to or deducted from the Income
Account, and
(6) the balance remaining after such distribu- tions and
deductions, expressed both as a total dollar
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amount and as a dollar amount per Unit outstanding on the last business
day of such calendar year;
(B) as to the Principal Account:
(1) The number of shares of each issue of Securities sold or
liquidated, and the aggregate net proceeds received with respect to each
issue, excluding any portion thereof credited to the Income Account,
(2) the amounts paid from the Principal Account for
redemptions of Units pursuant to Section 5.2,
(3) the deductions for payment of applicable taxes and fees
and expenses of the Trustee, the Evaluator and counsel pursuant to Section
3.9, the annual audit fees referred to in Section 6.2 and the annual fee
of the Depositor for portfolio supervisory services pursuant to Section
7.4, 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 Securities held in the Trust 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 Net Asset Value per Unit based on the last Trust
Evaluation made during such calendar year, and
(4) the amounts actually distributed to Unit Holders during
such calendar year from the Income 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. Substitute Securities: In the event that any Contract
Security is not delivered due to any occurrence, act or event beyond the
control of the Depositor and of the Trustee (such a Contract Security being
herein called a "Failed Security"), the Depositor may instruct the Trustee to
purchase Substitute Securities which have been selected by the Depositor
having a cost not in excess of the cost of the Failed Securities. To be
eligible for inclusion in the Trust, the Substitute Securities which the
Depositor selects must: (A) be of the same type as that replaced (e.g., both
will be common stock or
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preferred stock); (B) in the Depositor's judgment, be substantially similar to
the Failed Security, as the case may be, as respects the investment
characteristics which led the Depositor to select the Failed Security for
inclusion in the Trust; and (C) be purchased prior to, simultaneously with, or
no more than twenty days after delivery of written notice to the Trustee of
the failed contract (the "Failed Contract Notice").
Any Substitute Securities received by the Trustee shall be deposited
hereunder and shall be subject to the terms and conditions of this Indenture
to the same extent as other Securities deposited hereunder. No such deposit of
Substitute Securities shall be made after the earlier of (i) 90 days after the
date of execution and delivery of the applicable Reference Trust Agreement or
(ii) the first Payment Date to occur after the date of execution and delivery
of the applicable Reference Trust Agreement.
Whenever a Substitute Security is acquired by the Depositor pursuant
to the provisions of this Section 3.7, the Trustee shall, within five days
thereafter, mail to all Certifi- cateholders notices of such acquisition,
including an identification of the Failed Security and the Substitute Security
acquired. The purchase price of a Substitute Security shall be paid out of the
funds in the principal account attributable to the Failed Security which it
replaces. 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 instructions from the Depositor and in the absence of such instructions
the Trustee shall have no duty to purchase any Substitute Securities under
this Indenture. The Depositor shall not be liable for any failure to instruct
the Trustee to purchase any Substitute Security or for errors of judgment in
selecting any Substitute Security.
Section 3.8. Sale of Securities: In order to maintain the sound
investment character of the Trust, the Depositor may direct the Trustee to
sell or liquidate Securities at such prices and times and in such manner as
shall be determined by the Depositor, provided that the Depositor has
determined that any one or more of the following conditions exist:
(i) default in the payment of amounts when due on any
of the Securities;
(ii) institution of certain legal proceedings;
(iii) default under certain documents materially and
adversely affecting future declarations or payments of
amounts due or expected;
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(iv) determination of the Depositor that the tax
treatment of the Trust as a "grantor trust" would otherwise
be jeopardized; or
(v) decline in price that is a direct result of serious
adverse credit factors affecting the issuer of a Security which, in
the opinion of the Depositor, would make the retention of the Security
detrimental to the Trust or the Unit Holders.
Upon receipt of such direction from the Depositor, upon which the
Trustee shall rely, the Trustee shall proceed to sell the specified Security
in accordance with such direction. 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, or by reason of the failure of the
Depositor to give any such direction, and in the absence of such direction the
Trustee shall have no duty to sell any Securities under this Section 3.8.
Section 3.9. Counsel: The Depositor from time to time as it may deem
necessary employ a firm of attorneys for any legal services that may be
required in connection with the disposition of Securities pursuant to Section
3.8. The fees and expenses of such counsel shall be paid by the Trustee from
the Interest and Principal Accounts as provided for in Section 3.5(c) hereof.
Section 3.10. Notice and Sale by Trustee: If at any time there has
been a failure by the issuer to pay a declared dividend, the Trustee shall
notify the Depositor thereof. If within thirty days after such notification
the Trustee has not received any instructions from the Depositor to sell or to
hold or to take any other action in connection with such Securities, the
Trustee shall sell such Securities forthwith, and the Trustee shall not be
liable or responsible in any way for depreciation or loss incurred by reason
of such sale or by reason of any action or inaction in accordance with such
written instructions of the Depositor. The Trustee shall promptly notify the
Depositor of such action in writing and shall set forth therein the Securities
sold and the proceeds received therefrom.
Section 3.11. Reorganization and Similar Events: In the event that an
offer by the issuer of any of the Securities or any other party shall be made
to issue new Securities, the Trustee shall reject such offer. However, should
any exchange or substitution be effected notwithstanding such rejection or
without an initial offer, any Securities, cash and/or property received in
exchange shall be deposited hereunder and shall be promptly sold, if
securities or property, by the Trustee pursuant to the Depositor's direction,
unless the Depositor advises the Trustee to retain such securities or
property. The cash received in such exchange and cash proceeds of any such
sales shall be
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distributed to Certificateholders on the next Payment Date in the manner set
forth in Section 3.5 regarding distributions from the Principal Account. This
section shall apply, but its application shall not be limited, to public
tender offers, mergers, acquisitions, reorganizations and recapitalization.
Neither the Depositor nor the Trustee shall be liable to any person for action
or failure to take action pursuant to the terms of this Section 3.11.
Section 3.12. Notice of Actions: 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 any Securities held by the Trust (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 election of directors
or any amendment or supplement to any corporate resolution, agreement or other
instrument under or pursuant to which such Securities have been issued) the
Trustee shall promptly notify the Depositor and shall thereupon take such
action or refrain from taking any action as the Depositor shall in writing
direct; provided, however, that if the Depositor shall not within five
business days of the giving of such notice to the Depositor direct the Trustee
to take or refrain from taking any action, the Trustee shall take such action
as it, in its sole discretion, shall deem advisable. Neither the Depositor nor
the Trustee shall be liable to any person for any action or failure to take
action with respect to this section.
Section 3.13. Notice of Change in Principal Account: The Trustee
shall give prompt written notice to the Depositor of all amounts credited to
or withdrawn from the Principal Account pursuant to any provisions of this
Article III, and the balance of such account after giving effect to such
credit of withdrawal.
Section 3.14. Extraordinary Distributions: Any property received by
the Trustee after the initial date of Deposit in a form other than cash or
additional shares of the Securities listed on Schedule A or of a Substitute
Security received in a non-taxable stock split or stock dividend, which shall
be retained by the Trust, shall be dealt with in the manner described in
Section 3.11 and shall be retained or disposed by the Trustee according to
those provisions, provided, however, that no property shall be retained which
the Trustee determines shall adversely affect its duties hereunder. The
proceeds of any disposition shall be credited to the Income or Principal
Account of the Trust, as the Depositor may direct.
The Trust is intended to be treated as a fixed investment (i.e.,
grantor) trust for income tax purposes, and its powers shall be limited in
accordance with the restrictions imposed on such trusts by Treas. Reg. Section
301.7701-4.
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ARTICLE IV
EVALUATION OF SECURITIES; EVALUATOR
Section 4.1. Evaluation of Securities: The Trustee shall determine
separately and promptly furnish to the Depositor upon request the value of
each issue of Securities (determined as set forth below) as of the Evaluation
Time on each of the days on which the Trustee shall make the Trust Evaluation
required by Section 5.1. The value of each issue of Securities shall be
determined in good faith by the Trustee in accordance with the following
procedures: If the Securities are listed on one or more national securities
exchanges, such valuation shall be based on the closing purchase price on such
exchange which is the principal market thereof, deemed to be the New York
Stock Exchange if the Securities are listed thereon (unless the Trustee deems
such price inappropriate as a basis for valuation). If the Securities are not
so listed or, if so listed and the principal market therefor is other than on
such exchange or there is no such closing purchase price on such exchange,
such valuation shall be based on the closing purchase price in the
over-the-counter market (unless the Trustee deems such price inappropriate as
a basis for valuation) or if there is no such closing purchase price, then the
Trustee may utilize, at the Trust's expense, an independent evaluation service
or services to ascertain the values of the Securities. The independent
evaluation service shall use any of the following methods, or a combination
thereof, which it deems appropriate: (A) on the basis of current bid prices of
such Securities as obtained from investment dealers or brokers (including the
Depositor) who customarily deal in securities comparable to those held by the
Trust, or (B) if bid prices are not available for any of such Securities, on
the basis of bid prices for comparable securities, or (C) by appraisal of the
value of the Securities on the bid side of the market or by such other
appraisal as is deemed appropriate, or (D) by any combination of the above.
The Trustee shall be permitted to rely on these evaluations when determining
the Unit Price. The Trustee shall have no responsibility or liability for the
valuations supplied to it by the independent evaluation service. The Trustee
shall also make an evaluation of the Securities deposited in the Trust as of
the time said Securities are deposited under this Indenture pursuant to
Section 2.1. Such evaluation shall be made on the same basis as set forth
above and shall be included in the Schedules attached to the Reference Trust
Agreement.
Section 4.2. Tax Reports: For the purpose of permitting Unit Holders
to satisfy any reporting requirements of applicable Federal or State tax law,
the Trustee shall transmit to any Unit Holder upon written request any
determinations made by the Trustee pursuant to Section 4.1.
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Section 4.3. Liability of Trustee with Respect to Evaluations: The
Depositor and the Unit Holders may rely on any evaluation furnished by the
Trustee and shall have no responsibility for the accuracy thereof. The
determinations made by the Trustee hereunder shall be made in good faith upon
the basis of the best information available to it. The Trustee shall be under
no liability to the Depositor or the Unit Holders for errors in judgment,
provided, however, that this provision shall not protect the Trustee against
any liability to which it would otherwise be subject by reason of willful
misfeasance, bad faith or negligence in the performance of its duties or by
reason of its reckless disregard of its obligations and duties hereunder.
ARTICLE V
TRUST EVALUATION; REDEMPTION
OR PURCHASE OF UNITS
Section 5.1. Trust Evaluation: The Trustee shall make an evaluation
of the Trust (herein called a "Trust Evaluation") as of the close of trading
on the New York Stock Exchange (4:00 p.m. Eastern Time) (sometimes referred to
herein as the "Evaluation Time") (i) on the last Business Day of each of the
months of December and June, (ii) on the day on which any Unit is tendered for
redemption or to the Depositor for repurchase unless such tender shall occur
subsequent to the close of trading on the New York Stock Exchange, in which
event on the Business Day next following such day, and on each Business Day
after the initial public offering has been completed, and (iii) on any other
day desired by the Trustee or requested by the Depositor. Each Trust
Evaluation shall take into account and itemize separately (a)(1) the cash on
hand in the Trust (other than monies on deposit in the Reserve Account, funds
deposited on the date hereof by the Depositor for the purchase of Contract
Securities and not theretofore credited to the Principal Account pursuant to
Section 3.3 and funds in the Principal Account with respect to which contracts
for the purchase of the Substitute Securities have been entered into pursuant
to Section 3.7 hereof), including dividends receivable on stocks trading ex
dividend, (a)(2) the value of each issue of the Securities in the Trust as
determined by the Trustee pursuant to Section 4.1, (a)(3) amounts representing
organizational expenses paid less amounts representing accrued organizational
expenses of the Trust and (a)(4) all other assets of the Trust. For each such
evaluation there shall be deducted from the sum of the above (b)(1) amounts
representing any applicable taxes or other governmental charges payable out of
the Trust and for which no deductions shall have previously been made for the
purpose of addition to the Reserve Account, (b)(2) amounts representing
accrued fees of the Trustee and expenses of the Trust including but not
limited to unpaid fees of the Trustee and expenses of the
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Trust including but not limited to unpaid fees of the Trustee and expenses of
the Trust (including legal and auditing expenses), accrued fees and expenses
of the Depositor and its successor, if any, and (b)(3) cash held for
distribution to Unit Holders of record and redemption of Units tendered as of
a date on or prior to the evaluation then being made. The value of the pro
rata share of each unit of the Trust determined on the basis of any such
evaluation shall be referred to herein as the "Unit Value."
Until the Depositor has informed the Trustee that there will be no
further deposits of Additional Securities pursuant to Section 2.6, the
Depositor shall provide the Trustee with written estimates of (i) the total
organizational expenses to be borne by the Trust pursuant to Section 3.1, (ii)
the total number of Units to be issued in connection with the initial deposit
and all anticipated deposits of Additional Securities and (iii) the period or
periods over which such expenses are to be amortized, separately stated with
respect to each such amortization period. For purposes of calculating the
Trust Evaluation and Unit Value, the Trustee shall treat all such anticipated
expenses as having been paid and all liabilities therefor as having been
incurred, and all Units as having been issued, in each case on the date of the
Trust Agreement, and, in connection with each such calculation, shall take
into account a pro rata portion of such expense and liability based on the
actual number of Units issued as of the date of such calculation. In the event
the Trustee is informed by the Depositor of a revision in its estimate of
total expenses, total Units or period of amortization, and upon the conclusion
of the deposit of Additional Securities or initial offering period, the
Trustee shall base calculations made thereafter on such revised estimates or
actual expenses or period of amortization, respectively, but such adjustment
shall not affect calculations made prior thereto and no adjustment shall be
made in respect thereof.
The sum of (a)(1) and (a)(3) reduced by the sum of (b)(1) and (b)(2)
and (b)(3) shall be referred to herein as the "Unit Cash Value."
The Trustee shall promptly advise the Depositor of each determination
of Unit Value made by it as above provided, and, in addition, upon each
valuation by the Trustee under Section 4.1 other than those involved in such
calculations of Unit Value, the Trustee shall promptly furnish to Depositor,
for purposes of assisting it in maintaining a market in the Units, with such
information regarding the Principal, Income and Reserve Accounts as the
Depositor may reasonably request.
Section 5.2. Redemptions by Trustee; Purchases by Depositor: Any Unit
tendered for redemption by a Unit Holder or his duly authorized attorney to
the Trustee at its unit investment trust office shall be redeemed by the
Trustee on the
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third Business Day following the day on which tender for redemption is made
(the "Redemption Date"). Subject to payment by such Unit Holder 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 Net Asset
Value per Unit determined by the Trustee as of the closing of trading on the
New York Stock Exchange, on the date of tender, multiplied by the number of
Units being tendered for redemption (herein called the "Redemption Price").
Unit received for redemption by the Trustee on any day after the close of
trading on the New York Stock Exchange will be held by the Trustee until the
next day on which the New York Stock Exchange is open for trading and will be
deemed to have been tendered on such day for redemption at the Redemption
Price computed on that day.
The Trustee may in its discretion, and shall when so directed by the
Depositor in writing, suspend the right of redemption or postpone the date of
payment of the Redemption Price beyond the Third Business Day following the
day on which tender for redemption is made:
(1) for any period during which the New York Stock Exchange is
closed other than customary weekend and holiday closings or during
which trading on the New York Stock Exchange is suspended;
(2) for any period during which an emergency exists as a result
of which disposal by the Trust of the Securities is not reasonably
practicable or it is not reasonably practicable fairly to determine in
accordance herewith the value of the Securities; or
(3) for such other periods as the Securities and
Exchange Commission may by order permit,
and the Trustee shall not be liable to any person or in any way for any loss
or damage which may result from any such suspension or postponement.
Not later than the close of business on the day of tender of a Unit
for redemption by a Unit Holder other than the Depositor, the Trustee shall
notify the Depositor of such tender. The Depositor shall have the right to
purchase such Unit by notifying the Trustee of its 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 Unit
was tendered for redemption. Such purchase shall be made by payment for such
Unit by the Depositor to the Unit Holder not later than the close of business
on the Redemption Date of an amount equal to the Redemption Price which would
otherwise be payable by the Trustee to such Unit Holder.
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Any Unit so purchased by the Depositor may, at the option of the
Depositor, be tendered to the Trustee for redemption at the unit investment
trust office of the Trustee in the manner provided in the first paragraph of
this Section 5.2.
If the Depositor does not elect to purchase any Unit tendered to the
Trustee for redemption, or if a Unit is being tendered by the Depositor for
redemption, that portion of the Redemption Price which represents interest
shall be withdrawn from the Interest Account to the extent funds are
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 such Securities from among those
designated on the current list for such purpose as provided below and in the
manner, in its discretion, as it shall deem advisable or necessary in order to
fund the Principal Account for purposes of such redemption. Sales of
Securities by the Trustee shall be made in such manner as the Trustee shall
determine, subject to any minimum face amount limitations on sale which shall
have been specified by the Depositor and agreed to by the Trustee. In the
event that funds are withdrawn from the Principal Account or Securities are
sold for payment of any portion of the Redemption Price representing accrued
interest, the Principal Account shall be reimbursed when sufficient funds are
next available in the Interest Account for such funds so applied.
The Depositor shall maintain with the Trustee a current list of
Securities designated to be sold, and/or the proportionate amount of the
Securities designated to be sold, for the purpose of redemption of Units
tendered for redemption and not purchased by the Depositor, and for payment of
expenses hereunder, provided that if the Depositor shall for any reason fail
to maintain such a list, the Trustee, in its sole discretion, may designate a
current list of Securities for such purposes. The net proceeds of any sales of
Securities from such list representing principal shall be credited to the
Principal Account and the proceeds of such sales representing accrued interest
shall be credited to the Interest Account.
Neither the Trustee nor the Depositor shall be liable or responsible
in any way for depreciation or loss incurred by reason of any sale of
Securities made pursuant to this Section 5.2.
Units redeemed pursuant to this Section 5.2 shall be cancelled by the
Trustee and the Units shall be terminated by such redemptions.
If the related prospectus for the Trust so provides, a Unit Holder
who tenders for redemption Units in an aggregate
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amount of at least the amount specified in the prospectus may request, at the
time of tender, to receive an In Kind Distribution in lieu of cash. Such In
Kind Distribution shall consist of (i) such Unit Holder's pro rata portion of
each of the Securities, to the extent of whole shares, and (ii) cash equal to
such Unit Holder's pro rata portion of the Income and Principal Accounts
follows: (x) a pro rata portion of the net proceeds of sale of the Securities
representing any fractional shares included in such Unit Holder's pro rata
share of the Securities and (y) such other cash as may properly be included in
such Unit Holder's pro rata share of the sum of the cash balances of the
Income and Principal Accounts in an amount equal to the Redemption Price on
the date of tender less amounts specified in clauses (i) and (ii)(x) of this
sentence. The Trustee shall distribute the Unit Holder's Securities to the
account of the Unit Holder's bank or broker dealer at The Depository Trust
Company. An In Kind Distribution shall be reduced by customary transfer and
registration charges incurred by the Trustee.
Notwithstanding the foregoing provisions of this Section 5.2, the
Trustee is hereby irrevocably authorized in its discretion, in the event that
the Depositor does not elect to purchase any Unit tendered to the Trustee for
redemption (other than Units as to which a valid request for In Kind
Redemption has been made), or in the event that a Unit is being tendered by
the Depositor for redemption, in lieu of redeeming Units tendered for
redemption, to sell such Units in the over-the-counter market or by private
sale for the account of tendering Unit Holders at prices which will return to
the Unit Holders amounts in cash, net after deducting brokerage commissions,
transfer taxes and other charges, equal to or in excess of the Redemption
Prices which such Unit Holders would otherwise be entitled to receive on
redemption pursuant to this Section 5.2. The Trustee shall pay to the Unit
Holders the net proceeds of any such sale on the day they would otherwise be
entitled to receive payment of the Redemption Price hereunder.
Section 5.3. Transfer of Units; Issuance, Transfer and Interchange of
Certificates: Units may be transferred by the Unit Holder thereof by
presentation and surrender of transfer instructions or, in the case of
certificated Units, properly endorsed Certificates, at the Trustee's unit
investment trust office, accompanied by such documents executed by the Unit
Holder or his authorized attorney, as the Trustee deems necessary to evidence
the authority of the person making the transfer. 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 as may be
requested by the Unit Holder and deemed appropriate by the Trustee shall be
issued in denominations of one Unit or any multiple thereof. The Trustee may
deem and treat the person in whose name any Unit shall be registered upon the
books of the
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Trustee as the owner of such Unit for all purposes hereunder and the Trustee
shall not be affected by any notice to the contrary. The transfer books
maintained by the Trustee for the purposes of this Section 5.3 shall include
the name and address of the record owners of the Unit, shall include an
indication as to whether the Units are represented by Certificates or are in
uncertificated form, and shall be closed in connection with the termination of
the Trust pursuant to Article IX hereof.
A sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any such transfer shall be paid to the
Trustee by the Unit Holder. A Unit Holder may be required to pay a fee of $2
for each new Certificate to be issued (or such other amount as may be
specified by the Trustee and approved by the Depositor) pursuant to the
preceding paragraph.
Certificates will be issued to Unit Holders if so provided in the
Reference Trust Agreement for a Trust or if so directed by the Sponsors;
provided that subject to the terms of this Indenture, a holder of
uncertificated Units shall have the same rights, benefits and obligations as
though such holder were in possession of a Certificate. Unit Holders who have
elected to hold their Units in uncertificated form in any certificated Trust
may at any time request the Trustee to issue Certificates for such Units. The
Trustee shall, upon receipt of such request in form satisfactory to it, issue
such Certificates as may be requested by the Unit Holder and deemed
appropriate by the Trustee in denominations of one Unit or any multiple
thereof. Holders of Units evidenced by Certificates may at any time elect to
have their Units held in uncertificated form by surrendering their
Certificates to the Trustee for cancellation. At such time, an appropriate
notation will be made in the registration books of the Trustee to indicate
that the Units formerly evidenced by such cancelled Certificates are Units
held in uncertificated form.
All Certificates cancelled pursuant to this Indenture may be
destroyed or otherwise voided by the Trustee in accordance with the usual
practice of the Trustee.
The Trustee may adopt other reasonable rules and regulations for the
registration, transfer, tender and redemption of Units as it may, in its
discretion, deem necessary.
Section 5.4. Replacement of Certificates: 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 Unit Holder's furnishing the Trustee with proper identification and
satisfactory indemnity, complying with such other reasonable regulations and
conditions as the Trustee may prescribe and
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paying such expenses and charges, including any bonding fee, as the Trustee
may incur or reasonably impose; provided that if the Trustee has terminated or
is in the process of termination the Trustee, in lieu of issuing such new
Certificate, may, upon the terms and conditions set forth herein, make the
distributions set forth in Section 9.2 hereof. Any mutilated Certificate shall
be duly surrendered and cancelled before any duplicate Certificate shall be
issued in exchange and substitution therefor. Upon issuance of any duplicate
Certificate pursuant to this Section 5.4, the original Certificate claimed to
have been lost, stolen or destroyed shall become null and void and of no
effect, and any bona fide purchaser thereof shall have only such rights as are
afforded under Article 8 of the Uniform Commercial Code to a holder presenting
a Certificate for transfer in the case of an overissue.
Section 5.5. Form of Certificate: Any Certificate permitted to be
issued pursuant to this Indenture shall be in fully registered form, shall be
numbered for identification, shall be executed in facsimile by the Depositor
and manually by an authorized signatory of the Trustee, shall be dated the
date of execution and delivery by the Trustee and shall represent a fractional
undivided interest in the Trust, the numerator of which fraction shall be the
number of Units set forth on the face of such Certificate and the denominator
of which shall be the total number of Units of fractional undivided interest
in the Trust outstanding at that time.
ARTICLE VI
TRUSTEE; REMOVAL OF DEPOSITOR
Section 6.1. General Definition of Trustee's Liabilities, Rights and
Duties; Removal of Depositor: In addition to and notwithstanding the other
duties, rights, privileges and liabilities of the Trustee 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 the Trustee without interest in trust as
part of the Trust 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
ledgers 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;
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(b) the Trustee shall be under no liability for any action
taken in good faith and with reasonable care on any appraisal, paper,
order, list, demand, request, consent, affidavit, notice, opinion,
direction, evaluation, endorsement, assignment, resolution, draft or
other document, whether or not of the same kind, prima facie properly
executed, or for the disposition of moneys, Securities or
Certificates pursuant to this Indenture, or in respect of any
evaluation which the Trustee is required to make or is required or
permitted to have made by others under this Indenture or otherwise
except by reason of its negligence, lack of good faith and reasonable
care or willful misconduct, provided that the Trustee shall not in
any event be liable or responsible for any evaluation made by any
independent evaluation service employed by it pursuant to Section
4.1. The Trust shall pay and hold the Trustee harmless from and
against any loss, liability or expense incurred in acting as Trustee
of the Trust other than by reason of willful misfeasance, bad faith
or negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties hereunder, including
the costs and expenses of the defense against any claim or liability
in the premises. The Trustee may construe any of the provisions of
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. The Trustee shall in no event be
deemed to have assumed or incurred any liability, duty or obligation
to any Unit Holder or the Depositor, other than as expressly provided
for herein;
(c) the Trustee in its role as Trustee shall not be
responsible for or in respect of the recitals herein, the validity or
sufficiency of this Indenture or for the due execution hereof by the
Depositor, or for the form, character, genuineness, sufficiency,
value or validity of any Securities (except that the Trustee shall be
responsible for the exercise of due care in determining the
genuineness and negotiability of Securities delivered to it pursuant
to contracts for the purchase of such Securities) or for or in
respect of the validity or sufficiency of the Certificates or of the
due execution thereof by the Depositor, and the Trustee shall in no
event assume or incur any liability, duty or obligation to any Unit
Holder or the Depositor other than as expressly provided for herein.
The Trustee shall not be responsible for or in respect of the
validity of any signature by or on behalf of the Depositor;
(d) the Trustee shall not be under any obligation to
appear in, prosecute or defend any action, which in its
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opinion may involve it in expense or liability, unless as often as
required, it shall be furnished with reasonable security and
indemnity against such expense or liability as it may require, and
any pecuniary cost of the Trustee from such actions shall be
deductible from and a charge against the Income 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
and the rights and interests of the Unit Holders 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 Income and Principal Accounts,
and the payment of such costs and expenses shall be secured by a lien
on the Trust prior to the interests of the Unit Holders;
(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 or their
activities overseen with reasonable care; provided, however, that if
the Trustee chooses to employ the Depository Trust Company in
connection with the storage and handling of, and the furnishing of
administrative services in connection with the Securities, the
Trustee will be answerable for any default or misconduct of the
Depository Trust Company and its employees and agents as fully and to
the same extent as if such default or misconduct had been committed
or occasioned by the Trustee. The Trustee shall be fully protected in
respect of any action under this Indenture taken, or suffered, in
good faith by it in accordance with the opinion of counsel. The fees
and expenses charged by such agents, attorneys, accountants or
auditors shall constitute an expense of the Trustee reimbursable from
the Income and Principal Accounts as set forth in Section 3.5 hereof;
(f) other than as provided in Article VII hereunder, if at any
time the Depositor shall resign or fail to undertake or perform or
become incapable of undertaking or performing any of the duties which
by the terms of this Indenture are required by it to be undertaken or
performed and no express provision is made for action to be taken by
the Trustee in such event, or said Depositor shall be adjudged a
bankrupt or insolvent, or a receiver of such Depositor or of its
property shall be appointed, or any public officer shall take charge
or control of such Depositor or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then in any
such case, the Trustee may do any one or more of the following: (1)
appoint a successor Depositor who shall act
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hereunder in all respects in place of the Depositor, who shall be
compensated semi-annually, at rates deemed by the Trustee to be
reasonable under the circumstances, by deduction from the Income
Account or 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 (i) terminate this Indenture
and the Trust created hereby and liquidate the Trust, all in the
manner provided in Section 9.2 or (3) continue to act as Trustee
hereunder without terminating this Indenture, acting in its own
absolute discretion without appointing any successor Depositor and
assuming such of the duties and responsibilities of the Depositor
hereunder as the Trustee determines, in its absolute discretion, are
necessary or desirable for the administration and preservation of the
Trust and receiving additional compensation at rates determined as
provided in clause (1). If the Trustee continues so to act, it is
authorized to employ one or more agents to perform portfolio
supervisory services and such other of the services of the Depositor
hereunder as the Trustee determines, in its sole discretion, to be
necessary or desirable. The fees and expenses of such agent or agents
shall be charged to the Trust in accordance with Section 6.4. All
provisions of this Indenture relating to the liability and
indemnification of the Trustee, including, without limitation,
subparagraph (e) of this Section, shall apply to any responsibility
assumed or action taken by the Trustee pursuant to this subparagraph;
(g) if the value of the Trust as shown by any evaluation by
the Trustee pursuant to Section 5.1 hereof shall be less than the
liquidation amount specified in Part II of the Reference Trust
Agreement, the Trustee may in its discretion, and shall, when so
directed by the Depositor, terminate this Indenture and the Trust
created hereby and liquidate the Trust, all in the manner provided in
Section 9.2;
(h) in no event shall the Trustee be liable for any taxes or
other governmental charges imposed upon or in respect of the
Securities or upon the interest thereon or upon it as Trustee
hereunder or upon or in respect of the Trust which it may be required
to pay under any present or future law of the United States of
America or any other taxing authority having jurisdiction in the
premises. For all such taxes and charges and for any expenses,
including counsel 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 Income and Principal Accounts of the Trust,
and the payment of such amounts so
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paid by the Trustee shall be secured by a prior lien on the Trust
prior to the interests of the Unit Holders;
(i) the Trustee, except by reason of its negligence, lack of
good faith, reckless disregard of its obligations hereunder or
willful misconduct, shall not be liable for any action taken or
suffered to be taken by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred
upon it by this Indenture;
(j) notwithstanding anything in this Indenture to the
contrary, the Trustee is authorized and empowered to enter into any
safekeeping arrangement or arrangements it deems necessary or
appropriate for holding the Securities then owned by the Trust and
the Trustee is authorized and empowered in its sole right to amend,
supplement or terminate any safekeeping arrangement or arrangements
made under this provision. In addition, the Trustee is authorized and
empowered, at the request and discretion of the Depositor, to execute
and file on behalf of the Trust 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 in such States by the Depositor;
(k) the Trustee in its individual or any other capacity may
become owner or pledgee or, or be an underwriter or dealer in respect
of, stock, bonds or other obligations issued by the same issuer (or
an affiliate of such issuer) or any obligor of any Securities at any
time held as part of the Trust and may deal in any manner with the
same or with the issuer (or an affiliate of the issuer) with the same
rights and powers as if it were not the Trustee hereunder; and
(l) the Trust may include a letter or letters of credit for
the purchase of Contract Securities issued by the Trustee in its
individual capacity for the account of the Depositor, and the Trustee
may otherwise deal with the Depositor with the same rights and powers
as if it were not the Trustee hereunder.
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 every Unit Holder, and such books and records shall be open to
inspection by any Unit Holder at all reasonable times during the usual
business hours, and such books and records shall be made available to the
Depositor upon the request of the Depositor including, but not limited to, a
record of the name and address of every Unit Holder.
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Unless the Depositor otherwise directs, the Trustee shall cause
audited statements as to the assets and income of the Trust to be prepared on
an annual basis by independent public accountants selected by the Depositor,
provided, however, that if the Depositor is then making a market for units of
the Trust, the Depositor shall bear the cost of such audit to the extent that
it exceeds $.50/unit of approximately $1,000 initial value (or such
proportionate amount in the case of units of greater or lesser initial value).
In the event that the Depositor is not making a market for the Units of a
Trust, then the Depositor may instruct the Trustee not to prepare such
statements. Such audited statement will be made available to Unit Holders upon
request.
To the extent permitted under the Investment Company Act of 1940 as
evidenced by an opinion of counsel to the Depositor, the Trustee shall pay, or
reimburse to the Depositor or others, the costs of the preparation of
documents and information with respect to each Trust required by law or
regulation in connection with the maintenance of a secondary market in units
of each Trust. Such costs may include but are not limited to accounting and
legal fees, blue sky registration and filing fees, printing expenses and other
reasonable expenses related to documents required under Federal and state
securities laws.
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 Securities on File: The Trustee
shall keep a certified copy or duplicate original of this Indenture on file at
its investment unit trust office available for inspection at all reasonable
times during the usual business hours by any Unit Holder and the Trustee shall
keep and so make available for inspection a current list of the Securities.
Section 6.4. Compensation: For services performed under this
Indenture the Trustee shall be paid at the rate per annum set forth in Part II
of the Reference Trust Agreement which shall be computed on the basis of the
greatest number of Units in the Trust 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 that the
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," or, if such index shall cease
to be published, then as measured by the available index most nearly
comparable to such index. The consent or concurrence of any Unit Holder
hereunder shall not be required for any such
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adjustment or increase. Such compensation shall be charged by the Trustee
against the Income and Principal Accounts on or before the Payment Date on
which such period terminates; provided, however, that such compensation shall
be deemed to provide only for the usual normal and recurring functions
undertaken as Trustee pursuant to this Indenture.
The Trustee shall charge the Income and Principal Accounts at such
times as shall be convenient in its administration of the Trust 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 negligence, bad faith or willful
misconduct on its part, arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses (including
counsel fees) of defending itself against any claim of liability in the
premises. If the cash balances in the Income and Principal Accounts shall be
insufficient to provide for amounts payable pursuant to this Section 6.4, the
Trustee shall have the power to sell (i) Securities from the current list of
Securities designated to be sold pursuant to Section 5.2 hereof, or (ii) if no
such Securities have been so designated, such Securities as the Trustee may
see fit 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 Securities made pursuant to this Section
6.4. Any moneys payable to the Trustee pursuant to this section shall be
secured by a prior lien on the Trust.
Section 6.5. Removal and Resignation of the Trustee; Successor: The
following provisions shall provide for the removal and resignation of the
Trustee and the appointment of any successor Trustee.
(a) Any resignation or removal of the Trustee and appointment
of a successor pursuant to this section shall not become effective
until acceptance of appointment by the successor Trustee as provided
in subsection (b) hereof.
(b) The Trustee or any trustee hereafter appointed may resign
and be discharged of the trust created by this Indenture by executing
an instrument in writing resigning as such Trustee, filing the same
with the Depositor and mailing a copy of a notice of resignation to
all Unit Holders then on record not less than sixty days before the
date specified in such instrument when, subject to Section 6.5(d),
such resignation is to take effect. Upon receiving such notice of
resignation, the Depositor shall use their best efforts
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to 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 deemed incapable of acting by the written consent
of Unit Holders evidencing 66-2/3% of the outstanding Units of the
Trust, or shall be adjudged a bankrupt or insolvent, or a receiver of
the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its
property or affairs for the purposes of rehabilitation, conservation,
or liquidation, or the Depositor shall deem it to be in the best
interests of the Unit Holders, then in any such case the Depositor
may remove the Trustee and appoint a successor Trustee by written
instrument, in duplicate, one copy of which shall be delivered to the
Trustee so removed and one copy to the successor Trustee; provided
that notice of such removal and appointment of a successor shall be
mailed by the Depositor to each Unit Holder then of record.
(c) Any successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Depositor and the retiring Trustee an
instrument accepting such appointment hereunder, and such successor
Trustee without any further act, deed or conveyance shall become
vested with all the rights, powers, duties and obligations of its
predecessor hereunder with like effect as if originally named Trustee
herein and shall be bound by all the terms and conditions of this
Indenture. Upon the request of such successor Trustee, the Depositor
and the retiring Trustee shall, upon payment of any amounts due the
retiring Trustee or provision therefor to the satisfaction of such
retiring Trustee, execute and deliver an instrument acknowledged by
it 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. A successor trustee shall not
be under any liability hereunder for occurrences or omissions prior
to the effectiveness of its appointment. The retiring Trustee shall,
nevertheless, retain a lien upon all Securities and moneys at the
time held by it hereunder to secure any amounts then due the retiring
Trustee hereunder.
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(d) In case at any time the Trustee shall resign and no
successor Trustee shall have been appointed and have accepted
appointment within thirty days after notice of resignation has been
received by the Depositor, the retiring Trustee may forthwith apply
to a court of competent jurisdiction for the appointment of a
successor Trustee. Such court may thereupon, after such notice, if
any, as it may deem proper and prescribe, appoint a successor
Trustee.
(e) Any corporation into which any Trustee hereunder may be
merged or with which it may consolidate, 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.
Section 6.6. Qualifications of Trustee: The Trustee, or any successor
thereof, shall be a corporation organized and doing business under the laws of
the United States or any state thereof, which is authorized under such laws to
exercise corporate trust powers and having at all times an aggregate capital,
surplus, and undivided profits of not less than $2,500,000.
ARTICLE VII
DEPOSITOR
Section 7.1. Succession: The covenants, provisions and agreements
herein contained shall in every case be binding upon any successor to the
business of the Depositor. In the event of the death, resignation or
withdrawal of any partner of either of the Depositor or of any successor
Depositor which may be a partnership, the deceased, resigning or withdrawing
partner shall be relieved of all further liability hereunder if at the time of
such death, resignation or withdrawal such Depositor maintains a net worth
(determined in accordance with generally accepted accounting principles) of at
least $1,000,000. In the event of an assignment by the Depositor to a
successor corporation or partnership as permitted by the next following
sentence, such Depositor and, if such Depositor is a partnership, its partners
shall be relieved of all further liability under this Indenture. The Depositor
may transfer all or substantially all of its assets to a corporation or
partnership which carries on the business of that Depositor, if at the time of
such
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transfer such successor duly assumes all the obligations of said Depositor
under this Indenture and if at such time such successor maintains a net worth
of at least $1,000,000 (determined in accordance with generally accepted
accounting principles).
Section 7.2. Resignation of a Depositor: If at any time, any
Depositor desires to resign its position as Depositor hereunder, it may resign
by delivering to the Trustee an instrument of resignation executed by such
Depositor. Such resignation shall become effective upon the expiration of
thirty days from the date on which such instrument is delivered to the
Trustee. Upon effective resignation hereunder, 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 resignation and any successor
Depositor appointed by the Trustee pursuant to Section 6.1(f) shall thereupon
perform all duties and be entitled to all rights under this Indenture. The
successor Depositor shall not be under any liability hereunder for occurrences
or omissions prior to the execution of such instrument.
Section 7.3. Liability of Depositor and Indemnification:
(a) No Depositor shall be under any liability to any other
Depositor, the Trust or the Unit Holders for any action or for
refraining from the taking of any action in good faith pursuant to
this Indenture, or for errors in judgment or for depreciation or loss
incurred by reason of the purchase or sale of any Securities,
provided, however, that this provision shall not protect the
Depositor against any liability to which they would otherwise be
subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of their duties or by reason of their
reckless disregard of their obligations and duties hereunder. The
Depositor may rely in good faith on any paper, order, notice, list,
affidavit, receipt, evaluation, opinion, endorsement, assignment,
draft or any other document of any kind prima facie properly executed
and submitted to them by the Trustee, the Trustee's counsel or any
other person for any matters arising hereunder. The Depositor shall
in no event be deemed to have assumed or incurred any liability,
duty, or obligation to any Unit Holder or the Trustee other than as
expressly provided for herein.
(b) The Trust shall pay and hold the Depositor harmless from
and against any loss, liability or expense incurred in acting as
Depositor of the Trust other than by reason of wilful misfeasance,
bad faith or gross negligence in the performance of their duties or
by reason of the reckless disregard of their obligations and duties
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hereunder, including the costs and expenses of the defense against
any claim or liability in the premises. The Depositor 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 Depositor may, in their
discretion, undertake any such action which they may deem necessary
or desirable in respect of this Indenture and the rights and duties
of the parties hereto and the interests of the Unit Holders hereunder
and, in such event, the legal expenses and costs of any such action
and any liability resulting therefrom shall be expenses, costs and
liabilities of the Trust and shall be paid directly by the Trustee
out of the Income and Principal Accounts as provided by Section 3.5.
(c) None of the provisions of this Indenture shall be deemed
to protect or purport to protect the Depositor against any liability
to the Trust or to the Unit Holders to which the Depositor would
otherwise be subject by reason of willful misfeasance, bad faith or
negligence in the performance of their duties, or by reason of the
Depositor's reckless disregard of their obligations and duties under
this Indenture.
Section 7.4. Compensation: The Depositor or its affiliate shall
receive at the times set forth in Section 3.5 as compensation for performing
portfolio supervisory services, such amount and for such periods as specified
in Part II of the Reference Trust Agreement. Such compensation shall be
calculated on the basis of the largest number of Units outstanding at any time
during the period for which such compensation is being computed. At no time,
however, will the total amount received by the Depositor for services rendered
to all series of the Qualified Unit Investment Liquid Trust Series in any
calendar year exceed the aggregate cost to them of supplying such services in
such year. Such rate may be increased by the Trustee from time to time,
without the consent or approval of any Unit Holder or the Depositor, by
amounts not exceeding the proportionate increase during the period from the
date of such Reference Trust Agreement 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 United States
Department of Labor, or, if such Index is no longer published, a similar
index.
In the event that any amount of the compensation paid to the
Depositor pursuant to Section 3.5 is found to be an improper charge against
the Trust, the Depositor shall reimburse the Trust in such amount. An improper
charge shall be established if a final judgment or order for reimbursement of
the Trust shall be rendered against the Depositor and such judgment or order
shall not be effectively stayed or a final settlement is
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established in which the Depositor agrees to reimburse the Trust for amounts
paid to the Depositor pursuant to this Section 7.4.
ARTICLE VIII
RIGHTS OF UNIT HOLDERS
Section 8.1. Beneficiaries of Trust: By the purchase and acceptance
or other lawful delivery and acceptance of any Unit the Unit Holder 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 to the extent of his or her
Unit or Units subject to the terms and conditions of this Indenture.
Section 8.2. Rights, Terms and Conditions: In addition to the other
rights and powers set forth in the other provisions and conditions of this
Indenture the Unit Holders shall have the following rights and powers and
shall be subject to the following terms and conditions:
(a) A Unit Holder may at any time prior to the termination of
the Trust tender his Unit or Units to the Trustee for redemption in
accordance with Section 5.2.
(b) The death or incapacity of any Unit Holder 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, nor otherwise affect the
rights, obligations and liabilities of the parties hereto or any of
them. Each Unit Holder 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 Securities
or moneys from time to time received, held and applied by the Trustee
hereunder.
(c) No Unit Holder shall have any right to vote or in any
manner otherwise control the operation and management of the Trust,
or the obligations of the parties hereto, nor shall anything herein
set forth, be construed so as to constitute the Unit Holders from
time to time as partners; nor shall any Unit Holder ever be under any
liability to any third persons by reason of any action taken by the
parties to this Indenture for any other cause whatsoever.
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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 Unit Holders (a) to cure any ambiguity or to correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provision contained herein; (b) to change any
provision required by the Securities and Exchange Commission or any successor
governmental agency to be changed; or (c) to make such other provision in
regard to matters or questions arising hereunder as shall not adversely affect
the interests of the Unit Holders; provided, however, that the parties hereto
may not amend this Indenture so as to (1) increase the number of Units above
the number set forth in Part II of the Reference Trust Agreement or such
lesser amount as may be outstanding at any time during the term of this
Indenture, except as the result of the deposit of Additional Securities as
herein provided, or (2) except in the manner permitted by the Indenture as in
effect on the date of the first deposit of Securities under a particular
Indenture, permit the deposit or acquisition hereunder of securities either in
addition to or in replacement of any of the Securities.
This Indenture may also be amended from time to time by the Depositor
and the Trustee (or the performance of any of the provisions of this Agreement
may be waived) with the expressed written consent of Unit Holders representing
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 of this Indenture or of modifying in any manner the
rights of the Unit Holders; provided, however, that no such amendment or
waiver shall (i) reduce the interest in the Trust represented by such Units
without the consent of the Unit Holder, (ii) reduce the aforesaid percentage
of Units, the holders of which are required to consent to any such amendment,
without the consent of the holders of all Units then outstanding or (iii)
affect the duties, obligations and responsibilities of the Trustee without its
consent.
Promptly after the execution of any such amendment the Trustee shall
furnish written notification to all then outstanding Unit Holders of the
substance of such amendment.
Section 9.2. Termination: This Indenture and the Trust created hereby
shall terminate upon the earlier of (i) the Termination Date or (ii) the
maturity, redemption, sale or other disposition as the case may be of the last
Securities held hereunder, unless sooner terminated as hereinbefore specified
and may be terminated at any time by written consent of all Unit Holders;
provided that in no event shall the Trust continue
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beyond the end of the calendar year preceding the fiftieth
anniversary of the execution of this Indenture.
Written notice of any termination, specifying the time or times at
which the Unit Holders may surrender their Units for cancellation shall be
given by the Trustee to each Unit Holder at his address appearing on the
registration books of the Trustee.
In the event of any termination of the Trust prior to the Termination
Date, the Trustee shall proceed to liquidate the Securities then held and make
the payments and distributions provided for hereinafter in this Section 9.2
except that in such event, the distribution to each Unit Holder shall be made
in cash and shall be such Unit Holder's pro rata interest in the balance of
the Principal and Income Account after the deductions herein provided.
In the event that the Trust terminates on the Termination Date, the
Trustee shall, not less than 20 days prior to the Termination Date, send a
written notice to each Unit Holder of record owning, as of such date, the
number of Units prerequisite to electing an in-kind distribution specified in
the prospectus for the Trust and whose interest in the Trust would entitle him
to receive at least one share of each Security. Such notice shall allow such
Unit Holder to elect to redeem his Units at the net asset value on the
Termination Date and to receive, in partial payment of the Redemption Price
per Unit, an in-kind distribution of such Unit Holder's pro rata share of the
Securities, to the extent of whole shares. The Trustee will honor duly
executed requests for such in-kind distribution received by the close of
business on the Termination Date. Unit Holders who do not effectively request
an in-kind distribution shall receive their distribution upon termination in
cash. Redemption of the Units of Unit Holders electing such in-kind
distribution shall be made within three business days following the
Termination Date and shall consist of (i) such Unit Holder's pro rata share of
Securities (valued as of the Termination Date) to the extent of whole shares
and (ii) cash equal to the balance of such Unit Holder's Redemption Price.
On the Termination Date, this Indenture and the Trust created hereby
shall terminate. In connection with such Termination, the Trustee shall
segregate such number of shares of Securities as shall be necessary to satisfy
in-kind distributions to Unit Holders electing such distribution.
The balance of the Securities shall be sold over a period immediately
following the Termination Date specified in the prospectus for the Trust. The
Depositor shall direct the Trustee to sell the Securities in such manner as
the Depositor determines will produce the best price for the Trust. Pursuant
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to such direction, the Trustee may use the services of the
Depositor to effect such sales.
Within a reasonable period of time after such termination and
liquidation of Securities, the Trustee shall:
(a) deduct from the Income 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 other costs, expenses, advances or indemnities
as provided herein;
(b) deduct from the Income Account or, to the extent that
funds are not available in such account, from the Principal Account
and pay accrued and unpaid fees of counsel pursuant to Section 3.9;
(c) deduct from the Income 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) make a final distribution from the Trust to each Unit
Holder, upon surrender for cancellation of his Unit or Units, such
holder's pro rata share of the cash balances of the Income and
Principal Interest Accounts and, on the conditions set forth in
Section 3.4 hereof, the balance of the Reserve Account, if any;
(e) together with such distribution to each Unit Holder as
provided for in (d), furnish to each such Unit Holder a final
distribution statement as of the date of the computation of the
amount distributable to Unit Holders, setting forth the data and
information in substantially the form and manner provided for in
Section 3.6 hereof; and
(f) distribute to each Unit Holder receiving the distribution
provided in paragraph (d) any dividends, which on the Termination
Date were declared, but not received, net of any and all expenses not
previously deducted, within a reasonable time of their receipt.
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The amounts to be so distributed to each Unit Holder shall be that
pro rata share of the balance of the total Income and Principal Accounts as
shall be represented by the Units held of record by such Unit Holder.
The Trustee shall be under no liability with respect to moneys held
by it in the Income, 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.
Upon the Depositor's request, the Trustee will include in the written
notice to be sent to Unit Holders referred to in the fourth paragraph of this
section a form of election whereby Unit Holders electing a cash distribution
may express interest in investing such cash distribution in units of another
series of the Qualified Unit Investment Liquid Trust Series (the "New
Series"). The Trustee will inform the Depositor of all Unit Holders who,
within the time period specified in such notice, express such interest. The
Depositor will provide to such Unit Holders any applicable sales material with
respect to the New Series and a form, acceptable to the Trustee, whereby a
Unit Holder may appoint the Trustee the Unit Holder's agent to apply the Unit
Holder's cash distribution for the purchase of a unit or units of the New
Series. Such form will specify, among other things, the time by which it must
be returned to the Trustee in order to be effective and the manner in which
such purchase shall be made. This paragraph shall not obligate the Depositor
to create any New Series or to provide any such investment election.
Section 9.3. Construction: This Indenture is executed and delivered
in the State of New York, and all local laws or rules of construction of such
State shall govern the rights of the parties hereto and the Unit Holders and
the interpretation of the provisions hereof.
Section 9.4. Registration of Units. The Depositor agrees and
undertakes to register the Units 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 created hereunder, and the Trustee shall incur no liability
or be under any obligation or expense in connection therewith.
Section 9.5. Written Notice: Any notice, demand, direction or
instruction to be given to the Depositor hereunder shall be in writing and
shall be duly given if mailed or delivered to: OCC Distributors, World
Financial Center, βββ βββββββ ββββββ βββ ββββ, βββ ββββ βββββ Attn: βββββ
ββββββ, and with a copy to OCC Distributors' Secretary, or at such other
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address as shall be specified by the Depositor to the Trustee 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 Trustee, βββ
ββββββββ, βββ ββββ, βββ ββββ βββββ. Any notice to be given to the Unit Holders
shall be duly given if mailed or delivered to each Unit Holder at the address
of such holder appearing on the registration books of the Trust.
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 or 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 Units or
the rights of the Unit Holders.
Section 9.7. Dissolution of Depositor Not to Terminate: The
dissolution of the Depositor from or for any cause whatsoever shall not
operate to terminate this Indenture or the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the date first above written.
[Signatures and acknowledgments on separate pages.]
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OCC DISTRIBUTORS
as Depositor
By: βββββββββββ FINANCIAL CORP.
as Managing Partner of the
Depositor
By: /s/ βββββ β. ββββββ
Authorized Person
STATE OF NEW YORK )
: ss:
COUNTY OF NEW YORK )
I, βββββ βββββ, a Notary Public in and for the said County in the
State aforesaid, do hereby certify that βββββ β. ββββββ personally known to me
to be the same person whose name is subscribed to the foregoing instrument and
personally known to me to be an Authorized Person of βββββββββββ Financial
Corp., a Delaware corporation, appeared before me this day in person, and
acknowledged that he/she signed and delivered the said instrument as his/her
free and voluntary act as such Authorized Person and as the free and voluntary
act of said βββββββββββ Financial Corp., for the uses and purposes therein set
forth.
GIVEN under my hand and notarial seal this 8th day of February, 1996.
/s/βββββ βββββ
Notary Public
(SEAL)
My Commission expires: November 1, 1997
337970.1
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
as Trustee and Evaluator
By: /s/ββββββ ββββββββ
(SEAL)
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
I, Ada Iris Vegas, a Notary Public in and for the said County in the
State aforesaid, do hereby certify that ββββββ ββββββββ personally known to me
to be the same person whose name is subscribed to the foregoing instrument and
personally known to me to be a Vice President of The Chase Manhattan Bank
(National Association), appeared before me this day in person, and
acknowledged that he/she sealed with the corporate seal of The Chase Manhattan
Bank (National Association) and signed and delivered the said instrument as
his/her free and voluntary act as such Vice President and as the free and
voluntary act of said The Chase Manhattan Bank (National Association), for the
uses and purposes therein set forth.
GIVEN under my hand and notarial seal this 6th day of February, 1996.
/s/Ada Iris Vegas
Notary Public
(SEAL)
My Commission expires: 6-30-96
337970.1